Vol 6 - LVCoGen 1 2 - GEN-1 to GEN-4

Vol 6 - LVCoGen 1 2 - GEN-1 to GEN-4
BEFORE THE PUBLIC UTILITIES COMMISSION OF NEVADA
Application of Nevada Power Company d/b/a NV Energy
Seeking Acceptance of the First Amendment to its 20132032 integrated resource plan and its Energy Supply Plan
Update for 2015, which include an emissions reduction and
capacity replacement plan filed pursuant to NRS § 704.7311
et seq.
Docket No. 14-05___
VOLUME 6 OF 15
EMISSIONS REDUCTION AND CAPACITY REPLACEMENT PLAN
TECHNICAL APPENDIX
LAS VEGAS COGENERATION 1 AND 2, GENERATION
AND SUN PEAK AGREEMENTS
ITEM
DESCRIPTION
PAGE NUMBER
LAS VEGAS COGENERATION 1 AND 2, SUN PEAK
LVC-1
LVC-2
Asset Purchased Agreement and Exhibits REDACTED
Economic Analysis
2
201
GENERATION
GEN-1
GEN-2
GEN-3
GEN-4
Generating Unit Characteristics Table-REDACTED
New Generation Performance and Cost Summary REDACTED
Reid Gardner Decommissioning Study
2013 Plant Emission Rates REDACTED
203
216
218
275
SUN-PEAK
SP-1
SP-2
Asset Purchase Agreement and Exhibits– REDACTED
Economic Analysis REDACTED
278
392
LVC-1
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ASSET PURCHASE AGREEMENT
by and between
LAS VEGAS COGENERATION LIMITED PARTNERSHIP
and
LAS VEGAS COGENERATION II, L.L.C. as Sellers,
and
NEVADA POWER COMPANY d/b/a NV ENERGY,
as Purchaser
April 30, 2014
Las Vegas Cogeneration I and II
North Las Vegas, Nevada
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS; USAGE ................................................................................. 1 1.1
Definitions.................................................................................................. 1
1.2 Rules as to Usage ..................................................................................... 13 1.3 Schedules and Exhibits ............................................................................ 14 ARTICLE II
PURCHASE AND SALE; PURCHASE PRICE; CLOSING ....................... 14 2.1 Purchase and Sale; Assigned Facilities Agreements; Excluded Assets ....................................................................................................... 14 2.2
Purchase Price .......................................................................................... 16
2.3 Allocation of Purchase Price.................................................................... 17 2.4
The Closing .............................................................................................. 18
2.5
Pre-Closing Deliveries ............................................................................. 18
2.6
Closing Deliveries.................................................................................... 18
2.7
Further Assurances; Post-Closing Cooperation ....................................... 21 ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS...................... 22 3.1
Existence .................................................................................................. 22
3.2
Authority .................................................................................................. 22
3.3
B
inding Agreement .................................................................................. 23
3.4
No Conflicts ............................................................................................. 23
3.5 Approvals and Filings .............................................................................. 23 3.6 No Seller Material Adverse Effect........................................................... 24 3.7
Legal Proceedings .................................................................................... 24
3.8
C
ompliance with Laws ............................................................................ 24
3.9 Title to Purchased Assets ......................................................................... 24 3.10
Real Property ........................................................................................... 24
3.11 Sufficiency of Purchased Assets.............................................................. 25 3.12
Warranty Matters ..................................................................................... 26
3.13
Contracts .................................................................................................. 26
3.14
P
ermits ..................................................................................................... 27
3.15
Insurance .................................................................................................. 27
3.16
E
nvironmental Matters............................................................................. 28
3.17
Labor Matters ........................................................................................... 29
3.18
E
mployee Matters .................................................................................... 30
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TABLE OF CONTENTS
(continued)
Page
3.19
Brokers..................................................................................................... 31
3.20
Intellectual Property ................................................................................. 31
3.21
Regulatory Status ..................................................................................... 31
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER ............... 31 4.1
Existence .................................................................................................. 32
4.2
Authority .................................................................................................. 32
4.3
Binding Agreement .................................................................................. 32
4.4
No Conflicts ............................................................................................. 32
4.5
Approvals and Filings .............................................................................. 33 4.6
Legal Proceedings .................................................................................... 33
4.7
Brokers..................................................................................................... 33
4.8
Financial Resources ................................................................................. 33
ARTICLE V
COVENANTS ............................................................................................... 33 5.1
Efforts to Close and Fulfillment of Conditions ....................................... 33 5.2
Operation and Maintenance of Purchased Assets.................................... 36 5.3
Purchaser’s Inspection Right ................................................................... 37 5.4
Cooperation with Facilities Takeover and Transition of Operations....... 37 5.5
Employee and Benefit Matters................................................................. 38 5.6
Casualty; Condemnation .......................................................................... 38
5.7
Interim Reports ........................................................................................ 39
5.8
Update of Sellers’ Disclosure Schedule................................................... 39 5.9
No Solicitation of Competing Transaction .............................................. 40 5.10
Termination of Certain Seller Services .................................................... 40 5.11
Excluded Contracts; Terminated Contracts ............................................. 40 5.12
Greenhouse Property ................................................................................ 40
5.13 Sellers’ Lender Approval......................................................................... 41 5.14
Additional Deliveries ............................................................................... 41
5.15 Assignment of Warranties........................................................................ 41 5.16 Release of Credit Support ........................................................................ 41 ii 21745149v11
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TABLE OF CONTENTS
(continued)
Page
ARTICLE VI
CONDITIONS TO CLOSING ...................................................................... 41 6.1 Purchaser’s Conditions Precedent............................................................ 41 6.2 Sellers’ Conditions Precedent .................................................................. 43 ARTICLE VII
TERMINATION............................................................................................ 44 7.1
Termination Prior to Closing ................................................................... 44 7.2
Effect of Termination or Breach Prior to Closing ................................... 45 ARTICLE VIII
INDEMNIFICATION.................................................................................... 45 8.1
Indemnification by Sellers ....................................................................... 45 8.2
Indemnification by Purchaser .................................................................. 46 8.3
Method of Asserting Claims .................................................................... 46 8.4
Limitations of Liability ............................................................................ 47
8.5
Indemnification in Case of Strict Liability .............................................. 49 8.6
Determination of Losses .......................................................................... 49 ARTICLE IX
TAX MATTERS............................................................................................ 49 9.1
Representations and Warranties............................................................... 49 9.2
Transfer Taxes ......................................................................................... 50
9.3
Property Taxes ......................................................................................... 51
9.4
Sellers’ Tax Indemnification.................................................................... 51
9.5
Purchaser Tax Indemnification ................................................................ 51 9.6
Refunds .................................................................................................... 51
9.7
Contests.................................................................................................... 52
9.8
Assistance and Cooperation..................................................................... 52 9.9
Information .............................................................................................. 52
9.10
Tax Returns .............................................................................................. 53
9.11
Survival of Obligations ............................................................................ 53
9.12 No Extraordinary Actions ........................................................................ 53 9.13 Adjustments to Purchase Price................................................................. 53 ARTICLE X
SURVIVAL; NO OTHER REPRESENTATIONS ....................................... 53 10.1
Survival of Representations, Warranties, Covenants and Agreements .............................................................................................. 53 iii 21745149v11
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TABLE OF CONTENTS
(continued)
Page
10.2 No Other Representations ........................................................................ 54 ARTICLE XI
DISPUTE RESOLUTION ............................................................................. 54 11.1
Dispute Resolution ................................................................................... 54
11.2
Venue ....................................................................................................... 55
11.3
Waiver of Trial by Jury............................................................................ 55 ARTICLE XII
LIMITED REMEDIES AND DAMAGES.................................................... 55 12.1
Exclusive Remedies ................................................................................. 55
12.2
Limitation of Liability.............................................................................. 55 12.3
Specific Performance ............................................................................... 56
ARTICLE XIII
MISCELLANEOUS ...................................................................................... 56 13.1
Notices ..................................................................................................... 56
13.2
Payments .................................................................................................. 58
13.3
Entire Agreement ..................................................................................... 58
13.4
Expenses .................................................................................................. 58
13.5
Public Announcements ............................................................................ 58
13.6
Confidentiality ......................................................................................... 58
13.7
Waivers .................................................................................................... 58
13.8
Amendment.............................................................................................. 59
13.9
No Construction Against Drafting Party.................................................. 59 13.10
No Third Party Beneficiary...................................................................... 59 13.11
Headings .................................................................................................. 59
13.12
Invalid Provisions .................................................................................... 59
13.13
Governing Law ........................................................................................ 59 13.14
No Assignment; Binding Effect............................................................... 60 13.15
Counterparts............................................................................................. 60
13.16
Time of Essence ....................................................................................... 60 iv 21745149v11
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EXHIBITS
Exhibit A – Form of Sellers’ Parent Guaranty
Exhibit B – Forms of Bills of Sale
Exhibit C – Forms of Assignment and Assumption Agreements
Exhibit D – Form of Escrow Agreement
Exhibit E – Form of Parcel Separation Easement Agreement
Exhibit F – Form of Successor Liability Certificate
Exhibit G – Form of Greenhouse Property ROFR
SELLERS’ DISCLOSURE SCHEDULE
Section 1.1(a) – Sellers’ Knowledge
Section 3.4 – Sellers’ Consents
Section 3.5 – Governmental Approvals and Filings
Section 3.7– Legal Proceedings
Section 3.10(a)(i) – Project Property
Section 3.10(a)(ii) – Setback Property
Section 3.10(d) – Real Property – Agreements with Governmental Authorities
Section 3.10(e) – Real Property – Agreements
Section 3.10(f) – Real Property – Compliance Exceptions
Section 3.11 – Fixtures and Equipment; Improvements – Exceptions
Section 3.12 – Warranty Matters
Section 3.14(a) – Transferred Permits
Section 3.14(b) – Transferred Permits – Exceptions
Section 3.15 – Insurance Policies
Section 3.16 – Environmental Matters – Exceptions
Section 3.16(d) – Environmental Permits
Section 3.18(b) – Employee Matters – Seller Plans
Section 3.20– Transferred Intellectual Property – Exceptions
Section 9.1 – Tax Matters
PURCHASER’S DISCLOSURE SCHEDULE
Section 1.1(a) – Purchaser’s Knowledge
Section 4.5 – Governmental Approvals and Filings
Section 4.6 – Legal Proceedings
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SCHEDULES TO ASSET PURCHASE AGREEMENT
Schedule 1.1(a) – Assigned Facilities Agreements
Schedule 1.1(b) – Financing Liens
Schedule 1.1(c) – Permitted Liens
Schedule 1.1(d) – Requested Consents
Schedule 1.1(e) – Transferred Intellectual Property
Schedule 1.1(f) – Project Employees
Schedule 1.1(g) – SO2 Allowances
Schedule 2.1.3 – Excluded Assets
Schedule 5.2(b) – Permitted Actions
Schedule 5.2(b)(iii) – Material Assigned Facilities Agreements
Schedule 5.11(a) – Excluded Contracts
Schedule 5.11(b) – Terminated Contracts
Schedule 5.12(a) – Parcel Separation Map and Description
Schedule 5.12(b) – Parcel Separation Tasks
Schedule 5.16 – Release of Credit Support
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the “Agreement”) is made and entered
into effective as of April 30, 2014 (the “Effective Date”), by and among LAS VEGAS
COGENERATION LIMITED PARTNERSHIP, a Nevada limited partnership (“LV I
Seller”), and LAS VEGAS COGENERATION II, L.L.C., a Delaware limited liability
company (“LV II Seller”, and together with LV I Seller, each a “Seller” and, collectively, the
“Sellers”), and NEVADA POWER COMPANY d/b/a NV ENERGY, a Nevada corporation
(“Purchaser”). Sellers and Purchaser are also each referred to herein as a “Party” and collectively
as the “Parties.”
RECITALS
A.
Sellers collectively hold tangible and intangible assets, real and personal
properties, contracts, permits and other rights associated with two operating natural gas-fired
combined-cycle electric generation plants located in North Las Vegas, Nevada and known as Las
Vegas Cogeneration I (“LV Cogen I”), an operating natural gas-fired, combined-cycle, electric
generation plant which is nominally rated at approximately 50 MW, and Las Vegas Cogeneration
II (“LV Cogen II”), an operating natural gas-fired, combined-cycle, electric generation plant
which is nominally rated at approximately 230 MW (collectively the “LV Cogen Plants”).
B.
Sellers wish to sell and assign to Purchaser, and Purchaser wishes to purchase and
assume from Sellers, substantially all of the assets that are used or useful in connection with, and
certain specified liabilities associated with, the LV Cogen Plants, subject to the terms and
conditions set forth herein.
C.
As an inducement to Purchaser entering into this Agreement, Sellers have agreed
to provide the Sellers’ Parent Guaranty (as defined herein) guaranteeing certain of Sellers’
performance obligations under this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual representations,
warranties, covenants and agreements set forth in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows.
ARTICLE I DEFINITIONS; USAGE 1.1
Definitions. Unless the context shall otherwise require, capitalized terms used in
this Agreement shall have the meanings assigned to them in this Section 1.1.
“Acquisition Proposal” shall mean any proposal or offer made by any Person other than
Purchaser to acquire all or a substantial part of a Project.
“Action” means any suit, claim, proceeding, arbitration, audit or investigation by or
before any Governmental Authority or arbitral tribunal.
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“Affiliate” of any Person means any other Person directly or indirectly Controlling,
directly or indirectly Controlled by or under direct or indirect common Control with such Person;
provided, however, with respect to Purchaser, the term “Affiliate” does not include Berkshire
Hathaway Inc. or any of its affiliates (other than Purchaser and any direct or indirect subsidiaries
of Purchaser), and no provision of this Agreement shall apply to, be binding on, create any
liability of or otherwise restrict the activities of Berkshire Hathaway Inc. or any of its affiliates
(other than Purchaser and any direct or indirect subsidiaries of Purchaser).
“Agreement” has the meaning given to it in the Preamble of this Agreement.
“Ancillary Agreements” means those other documents, instruments, certificates or
agreements as may be executed and delivered in connection with this Agreement and the
transactions contemplated hereby and thereby.
“Assigned Facilities Agreements” means the Contracts which are listed on Schedule
1.1(a) of this Agreement.
“Assignment and Assumption Agreements” has the meaning given to it in
Section 2.6.1(b) of this Agreement.
“Assumed Liabilities” has the meaning given to it in Section 2.1.4(b) of this Agreement.
“Bills of Sale” has the meaning given to it in Section 2.6.1(a) of this Agreement.
“Books and Records” means books, records, files, documents, instruments, papers,
correspondence that can be reasonably and practically provided, journals, deeds, licenses,
Permits, supplier, contractor and subcontractor lists, supplier design interface information,
computer files and programs (other than Sellers’ enterprise-wide computer programs), retrieval
programs, environmental studies, environmental reports, construction reports, annual operating
plans, monthly operating reports, operating logs, operations and maintenance records, purchase
orders, safety and maintenance manuals, incident reports, standard OSHA logs, engineering
design plans, blue prints and as-built plans, records drawings, drawings, specifications, test
reports, quality documentation and reports, hazardous waste disposal records, personnel records
(other than personnel records which Sellers and their Affiliates are prohibited from providing or
otherwise required to be kept confidential, in each case, under applicable Law), training records,
procedures and similar items, in each case, in all formats in which they are reasonably and
practically available, including electronic, where applicable; in each case, in the possession of a
Seller or its Affiliates and to the extent the same relates to the applicable Seller or any of the
Facilities; provided, however, that any such data currently contained in computer systems shall
be provided in electronic format as either fixed form or character delimited data and shall include
record descriptions, to the extent the computer systems of Purchaser and Sellers is compatible in
allowing such data provision; in each case excluding (a) documents subject to attorney-client
privilege or information from third parties subject to confidentiality restrictions binding on a
Seller or its Affiliates; provided that the applicable Seller has used commercially reasonable
efforts to procure waivers of such confidentiality provisions, (b) documents relating to the sale
process of the Projects, and (c) price curves, power curves or other proprietary information of a
2
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Seller or its Affiliates; provided further, that in no event shall Books and Records include the
corporate records of any Seller or its Affiliates.
“Business Day” means any day except Saturday, Sunday or a weekday that banks in Las
Vegas, Nevada or New York, New York are closed.
“Certificate of Amount Due” means, with respect to each Seller, a certificate issued by
the Nevada Department of Revenue pursuant to NRS 360.525 setting forth the outstanding Tax
liabilities of such Seller which Purchaser is required to withhold.
“Claim Threshold” has the meaning given to it in Section 8.4.1 of this Agreement.
“Closing” has the meaning given to it in Section 2.4 of this Agreement.
“Closing Date” has the meaning given to it in Section 2.4 of this Agreement.
“Code” means the Internal Revenue Code of 1986, as amended.
“Confidentiality Agreement” means the Confidentiality Agreement, dated as of February
24, 2014, between NV Energy, Inc., an Affiliate of Purchaser, and Sellers.
“Continuing Diligence Items” means (a) various matters regarding the Greenhouse
Property, including noise, steam and wastewater-related investigations, and review and analysis
of various issues presented by the Parcel Separation Approval, Parcel Separation Tasks and
Parcel Separation Easement Agreement, (b) air modeling for the Projects, and (c) the updated
Phase I Environmental Assessment, and related environmental follow-up inquiries, with respect
to the Real Property.
“Contract” means agreement, lease, license (other than a Permit), note, bond, evidence of
Indebtedness, mortgage, indenture, security agreement, purchase order, binding bid, letter of
credit or other instrument or contract, whether written or oral.
“Control” of any Person means the possession, directly or indirectly, of the power either
to (a) vote fifty percent (50%) or more of the securities or interests having ordinary voting power
for the election of directors (or other comparable controlling body) of such Person or (b) direct or
cause the direction of management or policies of such Person, whether through the ownership of
voting securities or interests, by contract or otherwise, excluding in each case, any secured lender
of such Person.
“Default Rate” means the lesser of (i) the prime rate under “Money Rates” as reported in
the Wall Street Journal on the first Business Day of the month during which interest is payable
plus two percent (2%) and (ii) the maximum rate of interest permitted to be charged by
applicable Law.
“Effective Date” has the meaning given to it in the Preamble of this Agreement.
“Environmental Condition” means the presence or Release to the environment of
Hazardous Materials, including any migration of Hazardous Materials through air, soil or water.
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“Environmental Law” means any applicable statute, law, rule, regulation, ordinance,
order or other legally enforceable directive of any Governmental Authority that is in effect as of
the Closing Date and relates to pollution, safety or protection of human health or the
environment, including, without limitation, (a) the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601 et seq. (“CERCLA”), (b) the Resource
Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., (c) the Federal Water Pollution
Control Act, 33 U.S.C. § 1251 et seq., (d) the Clean Air Act, 42 U.S.C. § 7401 et seq., (e) the
Hazardous Materials Transportation Authorization Act of 1994, 49 U.S.C. § 5101 et seq., (f) the
Occupational Safety and Health Act, 29 U.S.C. § 651 et seq., (g) the Toxic Substances Control
Act, 15 U.S.C. §§ 2601 through 2629, (h) the Oil Pollution Act, 33 U.S.C. § 2701 et seq., (i) the
Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11001 et seq., (j) the Safe
Drinking Water Act, 42 U.S.C. §§ 300f through 300j, (k) the Federal Insecticide, Fungicide, &
Rodenticide Act, 7 U.S.C. §§ 136 et seq., (l) the Endangered Species Act, 16 U.S.C. §§ 1531 et
seq, and (m) state equivalents to items (a) through (l).
“Environmental Permits” means any Permits required by Environmental Law necessary
for the operation of the Projects as currently conducted.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” means any entity that, together with a Person, would be deemed a
single employer within the meaning of Code Section 414(b), (c), or (m) or ERISA
Section 4001(b).
“Escrow Agent” means JPMorgan Chase Bank, NA.
“Escrow Agreement” has the meaning given to it in Section 2.6.3 of this Agreement.
“Escrow Amount” has the meaning given to it in Section 2.2.2 of this Agreement.
“Excluded Assets” has the meaning given to it in Section 2.1.3 of this Agreement.
“Excluded Contract” has the meaning given in Section 5.11 of this Agreement.
“Excluded Liabilities” has the meaning given to it in Section 2.1.4(a) of this Agreement.
“Facilities” means LV Cogen I and LV Cogen II, each located on the Project Property,
together with all of their respective Improvements, electrical transformers, pipeline and electrical
interconnections, metering facilities and all ancillary and associated facilities and equipment that
are located on the Project Property.
“Federal Power Act” means the Federal Power Act of 1935, as amended.
“FERC” means the Federal Energy Regulatory Commission or any successor agency
thereto.
“FERC Approval” means a final order issued by FERC under Section 203 of the Federal
Power Act approving the transactions contemplated hereby that (1) does not contain any
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conditions imposed on, or modifications required of, Purchaser that Purchaser determines
adversely and materially affect its decision to acquire the Facilities, and (2) does not contain any
conditions imposed on, or modifications required of, Sellers that Sellers determine adversely and
materially affect their decision to sell the Facilities.
“Financing Liens” means the liens set forth on Schedule 1.1(b), or new or amended Liens
that Sellers or their Affiliates may grant from time to time in respect of the amendment,
supplement or modification of the existing credit facilities of Sellers’ Parent Guarantor or any
refinancing of the existing credit arrangements of Sellers’ Parent Guarantor, in whole or in part,
whether with the same or different lenders, arrangers and/or agents and whether with a larger or
smaller aggregate principal amount and/or a longer or shorter maturity.
“Fixtures and Equipment” means the fixtures, equipment (including major equipment
such as combustion turbines (specifically including one (1) spare LM6000 combustion turbine
having any one of the following serial numbers: 185-160, 185-163, 191-170, 191-324, 191-334,
or 191-336), steam turbine, air-cooled condenser, heat-recovery steam generators, transformers
and other auxiliaries; various balance of plant equipment; and storage tanks); furniture, office
equipment, communications equipment, furnishings, mobile equipment, vehicles, computer
hardware, air conditioning ventilation and heating equipment and control stations, heavy lifting
equipment such as forklifts and cranes, tools (including special tools), dies, construction in
progress and other tangible personal property used, or to be used, by a Seller for or in connection
with the operation or maintenance of any of the Facilities.
“GAAP” means generally accepted accounting principles in the United States of America
applied on a consistent basis.
“Good Operating Practices” means, with respect to the Facilities, the practices, methods
and acts generally engaged in or approved by a significant portion of the independent electric
power industry in the United States for similarly situated facilities in the United States during a
particular period, or any of such practices, methods and acts, which, in the exercise of reasonable
judgment in light of the facts known at the time a decision is made, would be expected to
accomplish the desired result in a manner consistent with applicable Law, reliability, safety,
environmental protection, economy and expedition, the Assigned Facilities Agreements and the
other Contracts affecting the operation of any of the Facilities, and which practices, methods and
acts are consistent with any applicable operation and maintenance standards recommended by
the equipment suppliers and manufacturers to any of the Facilities, and operational limits.
Without limiting the foregoing, Good Operating Practices are not intended to be limited to the
optimum practices, methods or acts, to the exclusion of all others, but rather to include a
spectrum of possible practices, methods or acts generally acceptable in the region during the
relevant period in light of the circumstances.
“Governmental Authority” means any federal, state or local governmental entity,
authority or agency, court, tribunal, regulatory commission or other body, whether legislative,
judicial or executive (or a combination or permutation thereof).
“Greenhouse Building” means that certain steel building located on the north-west corner
of the Greenhouse Property within the Setback Property, of approximately 16,000 square feet.
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“Greenhouse Property” means that certain land consisting of approximately 14.661 acres
adjacent to the Project Property as more particularly described in Section 5.12 of the Sellers’
Disclosure Schedule.
“Greenhouse Property ROFR” means the Right of First Refusal Agreement in
substantially the form of Exhibit G to this Agreement.
“Hazardous Materials” means (a) any substance, emission or material defined as or listed
in any Environmental Law as a “regulated substance,” “hazardous substance,” “toxic substance,”
“pesticide,” “hazardous waste,” “hazardous material,” “waste,” “pollutant,” “contaminant” or
words of similar import in any Environmental Law; or (b) any products or substances containing
petroleum, friable asbestos, polychlorinated biphenyls or radioactive materials.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
“Improvements” means all buildings, structures, fixtures and improvements located on
the Project Property, including those under construction as of the Closing Date.
“Indebtedness” means any of the following: (a) any indebtedness for borrowed money,
whether secured or unsecured; (b) any obligations evidenced by bonds, debentures, notes or
other similar instruments; (c) any obligations to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of business, consistent with
past practice; (d) any obligations as lessee under capitalized leases; (e) any obligations,
contingent or otherwise, under acceptances, letters of credit or similar facilities; (f) any
obligations created or arising under conditional sale or title retention agreements; (g) any net
obligations payable under any rate, currency, commodity or other swap, option or derivative
agreement, (h) any obligations secured by (or for which the holder of such obligation has an
existing right, contingent or otherwise, to be secured by) any Lien on property (other than
Permitted Liens); and (i) any guaranty of any of the foregoing.
“Indemnified Party” has the meaning given to it in Section 8.3.1 of this Agreement.
“Indemnifying Party” has the meaning given to it in Section 8.3.1 of this Agreement.
“Independent Accounting Firm” means such nationally recognized, independent
accounting firm as is mutually appointed by Purchaser and Sellers for purposes of this
Agreement.
“Intellectual Property” means (a) patents and industrial designs (including any
continuations, divisionals, continuations-in-part, renewals, reissues and applications for any of
the foregoing), (b) copyrights (including any registrations and applications for any of the
foregoing), (c) trademarks, service marks, trade names, logos, slogans, trade dress and
applications for registration of the foregoing, and (d) trade secrets and confidential information,
including confidential know-how, processes, formulae, algorithms, models or methodologies.
“Law” means any applicable statute, law, treaty, rule, code, common law, ordinance,
regulation, certificate or order of any Governmental Authority, or any judgment, decision,
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decree, injunction, writ, order or like action of any court, arbitrator or other Governmental
Authority, including each Environmental Law.
“Liability” means any Indebtedness and other obligations of a Person (whether absolute,
accrued, contingent, fixed or otherwise, or whether due or to become due).
“Lien” shall mean any mortgage, pledge, deed of trust, hypothecation, assignment,
deposit arrangement, charge, security interest, encumbrance, lien (statutory or other) or
preference, priority or other security agreement of any kind or nature whatsoever, any
conditional sale or other title retention agreement, any financing lease having substantially the
same effect as any of the foregoing or the filing of any financing statement or similar instrument
under the Uniform Commercial Code as in effect in any relevant jurisdiction or comparable Law
of any jurisdiction, domestic or foreign.
“Loss” means any judgment, amount paid in settlement, damage, fine, penalty,
deficiency, replacement power cost, Liability, loss or expense (including interest, court costs,
reasonable fees and expenses of attorneys, accountants and other experts or other reasonable
expenses of litigation or other proceedings or of any claim, default or assessment).
“LV Cogen I” has the meaning given to it in the Recitals.
“LV Cogen II” has the meaning given to it in the Recitals.
“LV Cogen Plants” has the meaning given to it in the Recitals.
“LV I Seller” has the meaning given to it in the Recitals.
“LV II Seller” has the meaning given to it in the Recitals.
“NAC” means the Nevada Administrative Code, as amended through the date hereof.
“NRS” means the Nevada Revised Statutes, as amended through the date hereof.
“Objectionable Title and Survey Matters” has the meaning given to it in Section 5.1(e) of
this Agreement.
“Overlap Period” means any taxable period beginning on or before and ending after the
Closing Date.
“Overlap Period Taxes” means any Taxes (other than Seller Income Taxes) imposed on
or with respect to the Purchased Assets or Seller for an Overlap Period.
“Parcel Separation Approval” has the meaning given to it in Section 5.12(a) of this
Agreement.
“Parcel Separation Easement Agreement” means the Noise and Steam Easement
Agreement in substantially the form of Exhibit E to this Agreement.
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“Parcel Separation Tasks” has the meaning given to it in Section 5.12(b) of this
Agreement.
“Party” or “Parties” has the meaning given to it in the Preamble of this Agreement.
“Permits” means registrations, permits, licenses, authorizations, consents, approvals,
grants, franchises, variances, certificates of authority, letter rulings, orders, decrees, judgments,
writs, injunctions or similar rights and privileges granted by or obtained from any Governmental
Authority, as well as applications for any of the foregoing.
“Permitted Encumbrances” has the meaning given to it in Section 5.1(e) of this
Agreement.
“Permitted Liens” means (a) those Liens set forth on Schedule 1.1(c); (b) zoning,
entitlement, conservation restriction and other land use and environmental regulations by any
Governmental Authority; (c) Liens for Taxes and other governmental charges and assessments
which are not yet due and payable or which are being contested in good faith by appropriate
proceedings; (d) mechanics’, carriers’, workers’, repairers’ and other similar Liens arising or
incurred in the ordinary course of business which are not yet due and payable; (e) Liens
expressly granted under, or created by, existing or pursuant to, the terms and conditions of the
Assigned Facilities Agreements; (f) prior to Closing, the Financing Liens; (g) Liens created
pursuant to, or as a result of the existence of, this Agreement or any Ancillary Agreement; (h)
any Liens approved or consented to in writing by Purchaser; (i) easements, rights-of-way,
servitudes, permits, surface leases and other rights with respect to surface obligations, including
without limitation, pipelines, grazing, canals, ditches, reservoirs, or the like, conditions,
covenants or other restrictions, and easements of or for streets, alleys, highways, pipelines,
telephone lines, power lines, railways, and any other easements and rights-of-way; (j) any grants
or reservations of surface or subsurface rights of others in and to the removal and mining or oil,
gas or minerals, including rights of ingress and egress with respect thereto; (k) such other
easements, restrictions and encumbrances which do not materially detract from the value of, or
materially interfere with the present use of the Purchased Assets in the aggregate; and (l) Liens
relating to any Excluded Liability.
“Person” means any individual, corporation, partnership, joint venture, association, joint
stock company, trust, limited liability company, unincorporated organization, Governmental
Authority or any other form of entity.
“Post-Closing Tax Period” shall mean any taxable period ending after the Closing Date,
or with respect to any Overlap Period, the portion of such Overlap Period that begins the day
after the Closing Date.
“Pre-Closing Books and Records” has the meaning given to it in Section 2.7.2(a) of this
Agreement.
“Pre-Closing Tax Period” shall mean any taxable period ending on or before the Closing
Date, or with respect to any Overlap Period, the portion of such Overlap Period ending on the
Closing Date.
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“Pre-Closing Taxes” has the meaning given to it in Section 9.4 of this Agreement.
“Project” means, with respect to each of LV Cogen I and LV Cogen II, its Facilities and
all of its Fixtures and Equipment, Stores and Inventory, Books and Records, Assigned Facilities
Agreements, Transferred Permits, Transferred Intellectual Property and, to the extent
transferable without consent or requisite consent has been obtained, all third-party warranties and
related assignments and, to the extent operated, owned or leased by the applicable Seller or any
of its Affiliates, any other assets used in connection with the operation and maintenance of its
Facilities as currently conducted.
“Project Employees” has the meaning given to it in Section 3.17(a) of this Agreement.
“Project Property” has the meaning given to it in Section 3.10(a) of this Agreement.
“Property Taxes” has the meaning given to it in Section 9.3 of this Agreement.
“PUCN” means the Public Utilities Commission of Nevada.
“PUCN Approval” means a final order issued by the PUCN pursuant to NRS Section
704.751 accepting an amendment to Purchaser’s plan to increase its supply of electricity or
decrease the demands made on its system by its customers, which order (a) approves Purchaser’s
acquisition of the Purchased Assets, (b) does not contain conditions, modifications or terms that
adversely and materially affect Purchaser’s decision to acquire the Facilities or the Purchaser’s
preferred supply side plan, and (c) is not the subject of (i) a petition for reconsideration or
rehearing filed pursuant to NAC Section 703.801, (ii) a petition for judicial review filed pursuant
to NRS Section 704.373, or (iii) a petition for a preliminary injunction filed pursuant to NRS
Section 703.374.
“Purchase Price” has the meaning given to it in Section 2.2.1 of this Agreement.
“Purchase Price Allocation” has the meaning given to it in Section 2.3 of this Agreement.
“Purchased Assets” means the assets, properties, rights and interest of every kind, nature,
character and description (whether real, personal or mixed, whether tangible or intangible, and
wherever situated), and any goodwill related thereto, operated, owned or leased by a Seller or
any of its Affiliates as of the Closing Date, in each case, which are used in connection with the
operation and maintenance of any of the Facilities as currently conducted, including, but not
limited to, the Real Property, the Projects and the SO2 Allowances, but excluding the Excluded
Assets.
“Purchaser” has the meaning given to it in the Preamble of this Agreement.
“Purchaser Consent Representative” means the person appointed by Purchaser and
notified to Sellers with appropriate contact information for the purpose of giving consents and
receiving notices required pursuant to Section 5.2(c) of this Agreement.
“Purchaser Indemnified Party” has the meaning given to it in Section 8.1 of this
Agreement.
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“Purchaser Material Adverse Effect” means a material adverse effect on (a) the ability of
Purchaser to perform its obligations under this Agreement or consummate the transactions
contemplated hereby, or (b) the validity or enforceability of the rights and remedies of Sellers
under this Agreement or under any of the Ancillary Agreements.
“Purchaser’s Disclosure Schedule” means the schedule delivered to Sellers by Purchaser
herewith and dated as of the Effective Date, containing all lists, descriptions, exceptions and
other information and materials as are required to be included therein by Purchaser pursuant to
this Agreement.
“Purchaser’s Knowledge” means the actual knowledge, after due inquiry, of the Persons
listed on Section 1.1(a) of Purchaser’s Disclosure Schedule.
“Real Property” has the meaning given to it in Section 3.10(a) of this Agreement.
“Real Property Transfer Taxes” has the meaning given to it in Section 9.2 of this
Agreement.
“Related Person” means with respect to Sellers and Purchaser, their respective Affiliates,
and the employees, officers and directors of Sellers, Purchaser and their respective Affiliates.
“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, seeping, or disposing to the environment
(including the abandonment or discarding of barrels, containers, and receptacles containing
Hazardous Materials).
“Remediation” means actions required under Environmental Laws or by a Governmental
Authority, or a claim by a third party against a Purchaser Indemnified Party where remediation in
connection with such claim would be in accordance with Good Operating Practices, in each case
to address an Environmental Condition, including any monitoring, investigation, assessment,
characterization, treatment, cleanup, containment, removal, mitigation, response or restoration
work.
“Requested Consents” means the consents set forth on Schedule 1.1(d) of this
Agreement.
“Restoration Cost” means, with respect to any Purchased Asset, the cost of restoring a
damaged, lost or destroyed Purchased Asset to a condition reasonably comparable to its preCasualty Loss condition.
“Retained Information” has the meaning given to it in Section 2.7.2(b) of this Agreement.
“Sales Taxes” means all sales, use or other similar Taxes assessed, levied or imposed by
any Nevada Taxing Authority.
“Schedule Update” has the meaning given to it in Section 5.8 of this Agreement.
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“Seller” and “Sellers” have the meanings given to them in the Preamble to this
Agreement.
“Seller Income Taxes” means any franchise or similar Taxes imposed on, or Taxes
imposed on, or measured by reference to, the net income or net worth of, a Seller or any Affiliate
of a Seller.
“Seller Indemnified Party” has the meaning given to it in Section 8.2 of this Agreement.
“Seller Material Adverse Effect” means a material adverse effect on (a) the Facilities or
the Purchased Assets or the operation or condition thereof, taken as a whole, or (b) the ability of
Sellers to perform their obligations under this Agreement or any of the Ancillary Agreements to
which a Seller is a party, provided, however, that the term Seller Material Adverse Effect shall
not include (i) any change resulting from changes in general international, national, regional,
state or local economic, financial or market conditions, (ii) changes in general regulatory or
political conditions, including any acts of war or terrorist activities not directed at a Project,
(iii) strikes, work stoppages or other labor disturbances other than those involving only the
workforce at a Project, (iv) increases in costs of commodities or supplies, including fuel,
(v) weather or meteorological events (other than short-term events such as tornados and storms),
(vi) any change of Law that does not disproportionately affect a Project relative to similarlysituated projects, (vii) any effect having a disproportionate impact on the Facilities compared to
other generating facilities in Purchaser’s control area, to the extent resulting from the voluntary
action of Purchaser relating to the transmission of power from the Facilities, (viii) changes in
national, regional, state or local electric interconnection, transmission or distribution procedures
or systems, (ix) any effect, occurrence, development, or condition which is cured (including by
the payment of money) before the earlier of the Closing Date or the termination of this
Agreement, or (x) any event or condition attributable to the announcement or pendency of the
transactions contemplated by this Agreement, or resulting from or relating to compliance with
the terms of this Agreement.
“Seller Plans” has the meaning given to it in Section 3.18(b) of this Agreement.
“Sellers’ Disclosure Schedule” means the schedule prepared by Sellers and delivered to
Purchaser in conjunction with the execution of this Agreement.
“Sellers’ Knowledge” means the actual knowledge, after due inquiry, of the Persons
listed on Section 1.1(a) of Sellers’ Disclosure Schedule.
“Sellers’ Lender Approval” has the meaning given to it in Section 5.13 of this
Agreement.
“Sellers’ Parent Guarantor” means Southwest Generation Holding Company II, LLC, a
Delaware limited liability company.
“Sellers’ Parent Guaranty” means the Guaranty in the form of Exhibit A to this
Agreement, pursuant to which Sellers’ Parent Guarantor guarantees the payment of any amounts
owed to a Purchaser Indemnified Party by Sellers pursuant to this Agreement, including Sellers’
performance of their indemnification obligations as set forth in ARTICLE VIII and ARTICLE
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IX of this Agreement, in the maximum amount of
, representing
Price.
LVC-1
of the Purchase
“Sellers’ Title/Survey Objection Response” has the meaning given to it in Section 5.1(e)
of this Agreement.
“Setback Property” has the meaning given to it in Section 3.10(a) of this Agreement.
“SO2 Allowances” means the sulfur dioxide allowances allocated to the Projects by the
United States Environmental Protection Agency as part of the Acid Rain Program, all of which
are described on Schedule 1.1(g).
“Stores and Inventory” means supplies, inventories, materials, lubricants, chemicals,
filters, fittings, connectors, seals, gaskets, and repair and replacement parts which are located at
any of the Facilities or deliverable to a Seller at any of the Facilities pursuant to the Assigned
Facilities Agreements or otherwise, as of the Closing Date, and used in connection with the
operation and maintenance of the Facilities.
“Successor Liability Certificate” means Nevada Department of Revenue Form ADM­
01.17.
“Survey” has the meaning given to it in Section 5.1(e) of this Agreement.
“Surveyor” means VTN, or any successor company thereto.
“SWG Holdings” means SWG Nevada Real Estate Holdings, LLC, a Delaware limited
liability company.
“Tax” or “Taxes” means any and all taxes, including any interest, penalties or other
additions to tax that may become payable in respect thereof, imposed by any foreign, federal,
state or local government or any agency or political subdivision of any such government, which
taxes shall include all income taxes, profits taxes, taxes on gains, alternative minimum taxes,
estimated taxes, payroll and employee withholding taxes, unemployment insurance taxes, social
security taxes, welfare taxes, disability taxes, severance taxes, license charges, taxes on stock,
sales and use taxes, ad valorem taxes, value added taxes, excise taxes, franchise taxes, gross
receipts taxes, business license taxes, occupation taxes, real or personal property taxes, stamp
taxes, environmental taxes, transfer taxes, workers’ compensation taxes and other taxes, fees,
duties, levies, customs, tariffs, imposts, assessments, obligations and charges of the same or of a
similar nature to any of the foregoing.
“Tax Claim” has the meaning given to it in Section 9.7 of this Agreement.
“Tax Returns” means any return, report, rendition, information return, claim for refund or
other document (including any related or supporting information) supplied to or required to be
supplied to any Taxing Authority with respect to Taxes, including any attachments, amendments
and supplements thereto.
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“Taxing Authority” means, with respect to any Tax, the governmental entity or political
subdivision thereof that imposes such Tax and the agency (if any) charged with the collection of
such Tax for such entity or subdivision.
“Terminated Contract” has the meaning given to it in Section 5.11(b) of this Agreement.
“Title and Survey Objection Notice” has the meaning given to it in Section 5.1(e) of this
Agreement.
“Title Company” means Chicago Title Company.
“Title Insurance Commitment” has the meaning given to it in Section 5.1(e) of this
Agreement.
“Title Insurance Policy” has the meaning given to it in Section 5.1(e) of this Agreement.
“Transfer Taxes” has the meaning given to it in Section 9.2 of this Agreement.
“Transferred Intellectual Property” means the Intellectual Property and licenses to use
such Intellectual Property owned or held by a Seller and used in a Project to the extent identified
on Schedule 1.1(e).
“Transferred Permits” means (a) those Permits set forth on Section 3.14(a) of the Sellers’
Disclosure Schedule and (b) any Permits obtained by a Seller after the Effective Date that are
transferable to Purchaser and designated as Transferred Permits by Purchaser, in each case,
interests in which are to be conveyed by the applicable Seller to Purchaser as part of the
Purchased Assets.
1.2
Rules as to Usage. Except as otherwise expressly provided herein, the following
rules shall apply to the usage of terms in this Agreement:
(a)
The terms defined above have the meanings set forth above for all purposes, and
such meanings are equally applicable to both the singular and plural forms of the terms defined.
If a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning
when used as another part of speech (such as a verb).
(b)
“Include,” “includes” and “including” shall be deemed to be followed by “without
limitation” whether or not they are in fact followed by such words or words of like import.
(c)
“Writing,” “written” and comparable terms refer to printing, typing, and other
means of reproducing in a visible form.
(d)
Any Law defined or referred to herein means such Law as from time to time
amended, modified or supplemented, including by succession of comparable successor Law and
any rules and regulations promulgated thereunder.
(e)
References to a Person are also to its permitted successors and assigns.
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(f)
“Hereof,” “herein,” “hereunder” and comparable terms refer, unless otherwise
expressly indicated, to the entire agreement or instrument in which such terms are used and not
to any particular article, section or other subdivision thereof or exhibit or schedule or other
attachment thereto. References in an instrument to “Article,” “Section” or another subdivision or
to an exhibit, schedule or other attachment are, unless the context otherwise requires, to an
article, section, subsection or subdivision of or an exhibit or schedule or other attachment to such
agreement or instrument.
(g)
Pronouns, whenever used in any agreement or instrument that is governed by this
Agreement and of whatever gender, shall include all Persons. References to any gender include,
unless the context otherwise requires, references to all genders.
(h)
The word “or” will be deemed to be disjunctive but not necessarily exclusive (i.e.,
unless the context dictates otherwise, “or” will be interpreted to mean “and/or” rather than
“either/or”). “Shall” and “will” have equal force and effect.
(i)
Whenever the consent or approval of any Party is required pursuant to this
Agreement, unless expressly stated that such consent or approval is to be given in the sole
discretion of such Party, such consent or approval shall not be unreasonably withheld or delayed.
(j)
Whenever this Agreement refers to a number of days, such number shall refer to
calendar days unless Business Days are specified. Whenever any action must be taken hereunder
on or by a day that is not a Business Day, then such action may be validly taken on or by the next
day that is a Business Day.
(k)
All accounting terms used herein and not expressly defined herein shall have the
meanings given to them under GAAP.
1.3
Schedules and Exhibits. This Agreement consists of the Articles contained herein
and the Schedules and Exhibits attached hereto, all of which comprise part of one and the same
agreement with equal force and effect.
ARTICLE II PURCHASE AND SALE; PURCHASE PRICE; CLOSING 2.1
Purchase and Sale; Assigned Facilities Agreements; Excluded Assets.
2.1.1 Purchase and Sale. On the terms and subject to the conditions set forth in
this Agreement, at the Closing, each Seller shall sell, transfer, convey, assign and deliver to
Purchaser, free and clear of all Liens (other than Permitted Liens and Permitted Encumbrances),
and Purchaser will purchase and pay for, all of such Seller’s right, title and interest in and to the
Purchased Assets, but not the Excluded Assets.
2.1.2 Assignment and Assumption of Assigned Facilities Agreements. On the
terms and subject to the conditions set forth in this Agreement, effective as of the Closing, each
Seller shall assign to Purchaser and Purchaser shall assume (a) all of such Seller’s rights under
the Assigned Facilities Agreements and (b) all of such Seller’s obligations arising under such
Assigned Facilities Agreements, solely to the extent such obligations arise after the Closing and
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do not constitute Liabilities arising out of any failure to perform, improper performance,
warranty or other breach, default or violation by a Seller or any of its Affiliates prior to the
Closing. For the avoidance of doubt, with respect to indemnity obligations under the Assigned
Facilities Agreements, Purchaser shall assume liability only for events that occur after the
Closing.
2.1.3 Retention of Certain Assets. Sellers shall have no obligation to, and do
not, transfer any interest or rights in those agreements, assets and properties described in
Schedule 2.1.3 attached hereto (the “Excluded Assets”), and Purchaser shall have no Liability
with respect thereto. The Parties acknowledge and agree that each Seller shall have the right on
or prior to the Closing Date to retain or to transfer and assign to one or more of its Affiliates its
interests in the Excluded Assets.
2.1.4
Excluded Liabilities; Assumed Liabilities.
(a)
Excluded Liabilities.
Except for the Assumed Liabilities,
Purchaser shall not assume and shall not be responsible to pay, perform, satisfy or discharge any
Liabilities of a Seller or any of its Affiliates of any kind or nature whatsoever, whether direct or
indirect, known or unknown, absolute or contingent (collectively, the “Excluded Liabilities”).
On and after the Closing, each Seller shall, and shall cause each of its Affiliates to, retain, pay,
perform, satisfy and discharge all Excluded Liabilities for which it or they are respectively
obligated, including, without limitation, the following:
(i)
all Liabilities arising from any violation of applicable
Environmental Law (A) by a Seller or any of its Affiliates or (B) any other Person acting on
behalf of a Seller or any of its Affiliates, in each case in connection with the construction,
operation or maintenance of any of the Facilities or the Real Property prior to the Closing;
(ii)
all Liabilities arising from any Environmental Condition
on, under, or near the Real Property to the extent existing prior to the Closing, including
Liabilities related to Remediation, natural resource damages, bodily injury or property damage;
(iii) all Liabilities arising from the off-site transportation,
disposal, recycling or storage, or arrangement for same, of Hazardous Materials, from any of the
Facilities prior to the Closing, including Liabilities related to Remediation, natural resource
damages, bodily injury or property damage;
(iv)
all Liabilities that have arisen or may arise with respect to
(A) any Seller Plan or any other benefit plan or employment agreement or other arrangement of a
Seller, any Affiliate of a Seller or any of their ERISA Affiliates providing any type of
compensation to any former or current employee of a Seller, any Affiliate of a Seller or any of
their respective ERISA Affiliates, (B) any Project Employee who is not employed by Purchaser
in accordance with Section 5.5; (C) any Project Employee who is employed by Purchaser in
accordance with Section 5.5, with respect to (i) periods prior to the Closing or (ii) any actions
taken by a Seller, any Affiliate of a Seller or any of their respective ERISA Affiliates with
respect to such Project Employee; and (D) any current or former employee (other than a Project
Employee) of a Seller, any Affiliate of a Seller or any of their respective ERISA Affiliates;
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(v)
all Liabilities of a Seller and any of its Affiliates under the
Assigned Facilities Agreements not expressly assumed by Purchaser pursuant to Section 2.1.2
and all Liabilities under Contracts relating to the Projects which are not Assigned Facilities
Agreements;
(vi)
all Pre-Closing Taxes, Seller Income Taxes, Sales Taxes
with respect to the transfer of the Purchased Assets pursuant to this Agreement and Sellers’
respective shares of any Real Property Transfer Taxes, but not any Taxes for which Purchaser is
required to indemnify Sellers pursuant to Section 9.5;
(vii) except as set forth in Section 2.1.4(b)(iii), all Liabilities in
any way relating to the Greenhouse Property or any buildings, structures, fixtures or
improvements located thereon or activities conducted thereon; and
(viii) all Liabilities in any way relating to any Excluded Asset.
(b)
Assumed Liabilities. From and after the Closing, Purchaser shall
assume, and Purchaser hereby agrees to pay, satisfy and discharge when due, the following
Liabilities of Sellers (the “Assumed Liabilities”), and no other Liabilities:
(i)
all Liabilities under the Assigned Facilities Agreements
expressly assumed by Purchaser pursuant to, and subject to the conditions set forth in Section
2.1.2;
(ii)
all Liabilities arising from the operation of the LV Cogen
Plants or the ownership of the Purchased Assets by Purchaser following the Closing;
(iii) without limiting Section 2.1.4(b)(ii) all Liabilities relating
to the Setback Property or any buildings, structures, fixtures or improvements located thereon or
activities conducted thereon following the Closing; and
(iv)
Sellers pursuant to Section 9.5.
2.2
all Taxes for which Purchaser is required to indemnify
Purchase Price.
2.2.1 Amount. The total consideration for the Purchased Assets which
Purchaser shall pay or cause to be paid to Sellers, shall be an amount equal to One Hundred
Twenty Nine Million Nine Hundred Twenty Thousand Dollars ($129,920,000) (subject to
adjustment in Section 5.6, the “Purchase Price”), plus the assumption by Purchaser of the
Assumed Liabilities.
2.2.2 Method of Payment of Purchase Price; Escrow Amount; Withheld
Amount. Payment of the Purchase Price shall be made in United States Dollars, as follows: (i)
by
wire transfer of immediately available federal funds to an account located in the United States as
Sellers may specify by notice, and (ii)
, representing
of the Purchase Price) (the “Escrow
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Amount”), by wire transfer to the Escrow Agent to be held in escrow subject to the terms set
forth in Section 2.6.3 below. At the Closing, Purchaser shall withhold from the Purchase Price
any amount set forth as owing to the Nevada Department of Revenue in a Certificate of Amount
Due with respect to each of the Sellers and shall remit such withheld amounts to the Nevada
Department of Revenue.
2.2.3 Proration. Purchaser and Sellers agree that the following items relating to
the Purchased Assets shall be prorated without duplication of any such items as of the Closing
Date, with Sellers liable to the extent such items relate to any time period through the Closing
Date, and Purchaser liable to the extent such items relate to periods commencing after the
Closing Date (measured in the same units used to compute the item in question, otherwise
measured by calendar days):
(i)
any real and personal property ad valorem taxes imposed
on tangible or intangible property with respect to the Purchased Assets as provided in
Section 9.3, Section 9.4 and Section 9.5;
(ii)
in respect of the Real Property;
any rent payments or fees made or paid prior to the Closing
(iii) any charges for water, telephone, electricity and other
utilities and any other payment for goods and services; and
(iv)
(A) any annual Permit, license and registration fees
associated with the Purchased Assets and (B) any prepayments under the Assigned Facilities
Agreements.
In connection with the proration referred to in this Section 2.2.3, in the event that actual
figures are not available at the Closing Date, the proration shall be based upon the amounts
accrued through the Closing Date or paid for the most recent year (or other appropriate period)
for which actual amounts paid are available. Such prorated amounts shall be re-prorated and
paid to the appropriate Party within sixty (60) days of the date that the previously unavailable
actual figures become available. Sellers and Purchaser agree to furnish each other with such
documents and other records as may be reasonably requested in order to confirm all adjustment
and proration calculations made pursuant to this Section 2.2.3.
2.3
Allocation of Purchase Price.
2.3.1 Not later than forty-five (45) days after the Closing, Purchaser shall
provide Sellers with an allocation of the Purchase Price, plus any liabilities deemed assumed for
U.S. federal income Tax purposes, among the Purchased Assets as of the Closing Date using the
allocation method provided by Section 1060 of the Code and the Treasury regulations thereunder
(the “Purchase Price Allocation Schedule”). Within fifteen (15) days after its receipt of
Purchaser’s proposed Purchase Price Allocation Schedule, Sellers shall propose to Purchaser any
changes thereto, or otherwise shall be deemed to have agreed with Purchaser’s proposed
Purchase Price Allocation Schedule.
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2.3.2 If Sellers propose changes to Purchaser’s proposed Purchase Price
Allocation Schedule within the fifteen (15) day period described above, Purchaser and Sellers
shall cooperate in good faith to mutually agree upon a revised Purchase Price Allocation
Schedule as soon as practicable and in any event within fifteen (15) days of receipt of Seller’s
proposed changes. If, after such fifteen (15) day period, the Parties are unable to agree on a
revised Purchase Price Allocation Schedule, the Parties shall refer such dispute to a firm of
independent public accountants that is mutually acceptable to Purchaser and Sellers (the
“Independent Accountant”), which firm shall make a final and binding determination as to all
matters in dispute with respect to the Purchase Price Allocation Schedule (and only such matters)
on a timely basis and shall promptly notify the Parties in writing of its resolution. The
Independent Accountant shall not have the power to modify or amend any term or provision of
this Agreement. Each Party shall bear and pay one-half of the fees and other costs for services
rendered by the Independent Accountant pursuant to this Section 2.3.2.
2.3.3 The Parties shall cooperate to comply with all substantive and procedural
requirements of Section 1060 of the Code and the regulations thereunder, and except for any
adjustment to the Purchase Price, the Purchase Price Allocation Schedule shall be adjusted only
if and to the extent necessary to comply with such requirements. Purchaser and Sellers agree
that they will not take nor will they permit any Affiliate to take, for Tax purposes, any position
inconsistent with such Purchase Price Allocation Schedule; provided, however, that
(a) Purchaser’s cost may differ from the total amount allocated hereunder to reflect the inclusion
in the total cost of items (for example, capitalized acquisition costs) not included in the total
amount so allocated, and (b) the amount realized by Sellers may differ from the amount allocated
to reflect transaction costs that reduce the amount realized for federal income Tax purposes.
Each of the Parties shall notify the other Parties, within twenty (20) days after notice or
commencement of an examination, audit or other proceeding regarding the allocation determined
under this Section 2.3.
2.4
The Closing. The closing of the transactions contemplated herein (the “Closing”)
will take place at the offices of Nevada Power Company, 6226 W. Sahara, Las Vegas, Nevada, at
10:00 a.m. local time on the date as soon as practicable (but in no event longer than ten
(10) Business Days, subject to an additional ten (10) Business Day extension at the election of
Purchaser in the event of a Schedule Update pursuant to Section 5.8 which occurs less than ten
(10) days prior to the Closing Date, and further subject to the provisions of Sections 5.8,
7.1(e)(ii) and 7.2(b)) after the conditions to the Closing set forth in Section 6.1 and Section 6.2
have been satisfied or waived, or at such other place, time or date as Purchaser and Seller
mutually agree (the “Closing Date”). The Closing shall be deemed effective as of 12:01 A.M.
Pacific Prevailing Time on the day after the Purchase Price has been paid to Sellers and the Bills
of Sale and the Assignment and Assumption Agreements have been executed and delivered to
Purchaser.
2.5
Pre-Closing Deliveries.
Contemporaneously with the execution of this
Agreement, Seller shall execute and deliver to Purchaser a Successor Liability Certificate in the
form attached hereto as Exhibit F.
2.6
Closing Deliveries.
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2.6.1 Purchaser’s Closing Deliveries. At the Closing, Purchaser will pay to
Sellers or the Escrow Agent, as applicable, the Purchase Price in accordance with Section 2.2.2,
and execute and deliver or pay (as applicable) the following items to Sellers:
(a)
counterpart signature pages to the Bills of Sale in substantially the
forms attached hereto as Exhibit B (collectively, the “Bills of Sale”), executed by an authorized
representative of Purchaser;
(b)
counterpart signature pages to the Assignment and Assumption
Agreements in substantially the forms attached hereto as Exhibit C (collectively, the
“Assignment and Assumption Agreements”), executed by an authorized representative of
Purchaser;
(c)
a certificate, dated as of the Closing Date, executed by an
authorized officer of Purchaser, certifying that attached thereto is: (i) a true, accurate and
complete copy of a Certificate of Good Standing with respect to Purchaser, issued by the
Secretary of State of the State of Nevada as of a recent date; (ii) a true, accurate and complete
copy of the resolutions of the board of directors of Purchaser, authorizing the execution, delivery
and performance by Purchaser of this Agreement and all of the other agreements and
instruments, in each case, to be executed and delivered by Purchaser in connection herewith; and
(iii) the name, title and signature of each of the officers of Purchaser authorized to execute and
deliver this Agreement and the other agreements and instruments contemplated hereby;
(d)
a certificate, dated as of the Closing Date, executed by an
authorized officer of Purchaser, certifying as to the matters set forth in Section 6.2.1 and
Section 6.2.2;
(e)
a counterpart of the State of Nevada Declaration of Value Form,
executed by an authorized representative of Purchaser, with respect to the Real Property;
(f)
a counterpart signature page to the Escrow Agreement executed by
an authorized representative of Purchaser;
(g)
any amounts for which Purchaser is liable pursuant to Section 2.2.3
of this Agreement;
(h)
a copy of the Certificate of Amount Due received from the Nevada
Department of Revenue with respect to each Seller;
(i)
a counterpart signature page to the Greenhouse Property ROFR,
executed by an authorized representative of Purchaser;
(j)
the original undrawn Standby Letter of Credit numbered
in the amount of
issued in favor of Purchaser surrendered to the issuing bank to
Sellers’ Affiliate under its credit facility; and
(k)
such other documents and instruments as may be reasonably
requested by Sellers to consummate the transactions contemplated by this Agreement.
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2.6.2 Sellers’ Closing Deliveries. At the Closing, Sellers will execute and
deliver, or will cause to be executed and delivered (as applicable), to Purchaser the following
items:
(a)
the Sellers’ Parent Guaranty;
(b)
a grant, bargain, sale deed, with respect to the Real Property,
executed by an authorized representative of SWG Holdings;
(c)
an Owner’s Affidavit and related documentation, with respect to
the Real Property, executed by an authorized representative of SWG Holdings, in form and
substance satisfactory to the Title Company;
(d)
counterpart signature pages to the Bills of Sale, executed by an
authorized representative of each Seller;
(e)
counterpart signature pages to the Assignment and Assumption
Agreements, executed by an authorized representative of each Seller and SWG Holdings, as
applicable;
(f)
certifications of non-foreign status of the respective owners of Las
Vegas Cogeneration Limited Partnership and Las Vegas Cogeneration II, LLC, in the form and
manner which complies with the requirements of Section 1445(b)(2) of the Code and Treasury
Regulation Section 1.1445-2(b)(2) and in form and substance reasonably satisfactory to
Purchaser;
(g)
certificates, dated as of the Closing Date, executed by an
authorized officer of each Seller, certifying that attached thereto is: (i) a true, accurate and
complete copy of a Certificate of Good Standing with respect to such Seller, issued by the
Secretary of State of the State of Nevada or Delaware, as applicable, as of a recent date; (ii) true,
accurate and complete copies of the resolutions of the general partner or member, as applicable,
of the applicable Seller, authorizing the execution, delivery and performance by such Seller of
this Agreement and all of the other agreements and instruments, in each case, to be executed and
delivered by such Seller in connection herewith; and (iii) the name, title and signature of each of
the authorized representatives of the applicable Seller authorized to execute and deliver this
Agreement and the other agreements and instruments contemplated hereby;
(h)
certificates, dated as of the Closing Date, executed by an
authorized officer of each Seller, certifying as to the matters set forth in Section 6.1.1 and
Section 6.1.2;
(i)
a counterpart of the State of Nevada Declaration of Value Form,
executed by an authorized representative of SWG Holdings, with respect to the Real Property;
(j)
counterpart signature pages to the Escrow Agreement, executed by
an authorized representative of each Seller;
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any amounts for which a Seller is liable pursuant to Section 2.2.3
of this Agreement;
(l)
documents suitable for recording, releasing or terminating, as
applicable, the Financing Liens;
(m)
a counterpart signature page to the Greenhouse Property ROFR,
executed by an authorized representative of SWG Holdings; and
(n)
such other documents and instruments as may be reasonably
requested by Purchaser to consummate the transactions contemplated by this Agreement.
2.6.3 Escrow. The Escrow Amount shall be held by Escrow Agent under the
terms and conditions of an escrow agreement among Sellers, Purchaser and Escrow Agent in the
form of Exhibit D (the “Escrow Agreement”). The Escrow Amount shall be held and distributed
in accordance with the terms of the Escrow Agreement and shall be used to satisfy any amounts
owed to a Purchaser Indemnified Party by Sellers pursuant to this Agreement, including Sellers’
performance of their indemnification obligations as set forth in ARTICLE VIII and ARTICLE
IX of this Agreement.
2.7
Further Assurances; Post-Closing Cooperation.
2.7.1 Further Assurances. Subject to the terms and conditions of this
Agreement, at any time or from time to time after the Closing, at any Party’s request and without
further consideration, the other Parties shall execute and deliver to such Party such other
instruments of sale, transfer, conveyance, assignment and confirmation, provide such materials
and information and take such other actions as such Party may reasonably deem necessary or
desirable in order more effectively (a) to transfer, convey and assign to Purchaser, and to confirm
Purchaser’s title to, the Purchased Assets, (b) to effectuate the assumption by Purchaser of the
Assigned Facilities Agreements, and (c) otherwise to consummate the transactions contemplated
by this Agreement. Purchaser shall provide to Sellers all invoices and supporting documentation
received with respect to Assigned Facilities Agreements, which relate to any obligations arising
thereunder prior to the Closing Date or any other obligation that remains with a Seller.
2.7.2
Pre-Closing Books and Records.
(a)
Following Closing, each Party and its Affiliates will afford each
other Party, its counsel and its accountants, during normal business hours, reasonable access to
the Books and Records with respect to periods prior to Closing (the “Pre-Closing Books and
Records”) and the right to make copies and extracts therefrom, to the extent that such access may
be reasonably required by the requesting Party in connection with (i) the preparation of Tax
Returns, (ii) compliance with the requirements of any Governmental Authority, (iii) any
Excluded Liabilities or (iv) any rights and obligations arising under ARTICLE VIII, ARTICLE
IX or ARTICLE XI hereof. Each Party shall maintain Pre-Closing Books and Records
reasonably expected to be required in connection with the matters described in items (i) through
(iv) of the preceding sentence in accordance with the ordinary course document retention
policies of such Party; provided, however, that nothing in this Agreement shall be deemed to
obligate either Party to maintain the Pre-Closing Books and Records for longer than seven (7)
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years after Closing, and, (x) in the case of Purchaser to provide access to Pre-Closing Book and
Records other than those of Purchaser, and (y) in the case of Sellers to provide access to PreClosing Books of Records other than those of Sellers.
(b)
Purchaser acknowledges and consents to the retention by Sellers of
information made available to Purchaser relating to the Purchased Assets (the “Retained
Information”). From and after the Closing Date, Sellers shall, and shall cause their respective
representatives to, treat the Retained Information as strictly confidential (except to the extent
compelled to disclose by judicial or administrative process or by other requirements of Law, any
stock exchange or any other self-regulatory organization or as reasonably required by Seller in
connection with the matters described in clauses (i) through (iv) of Section 2.7.2(a)).
2.7.3 Delivery of Books and Records. No later than the Closing Date (or in the
case of Books and Records not immediately required for the operation and maintenance of the
Facilities that cannot be reasonably and practicably delivered at the Closing, as soon as
reasonably practicable thereafter, but no later than forty-five (45) days after the Closing Date),
Sellers shall deliver any Books and Records (to the extent providing such to Purchaser does not
violate any Law) that are not located at the Facilities to Purchaser at Purchaser’s offices in Las
Vegas, Nevada, the Facilities or another location as designated by Purchaser in or near Las
Vegas, Nevada.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby represent and warrant, jointly and severally, to Purchaser that, except as
set forth in Sellers’ Disclosure Schedule, all of the statements contained in this ARTICLE III are
true and correct as of the Effective Date, except to the extent such representations and warranties
are specifically made as of a particular date (in which case such representations and warranties
will be true and correct as of such date). Each exception and other response to this Agreement set
forth in Sellers’ Disclosure Schedule is identified by reference to, or has been grouped under a
heading referring to, a specific individual section of this Agreement, and, except as otherwise
specifically stated with respect to such exception, relates only to such section and to other
sections to the extent that the application of such exception or other response to such other
sections is reasonably apparent on its face without further investigation.
3.1
Existence. Each Seller is duly formed, validly existing and in good standing, as
applicable, under the Laws of the jurisdiction of its formation. Each Seller has the requisite entity
power and authority to own, operate and lease its properties and assets and to carry on its
business as now being conducted. Each Seller is duly qualified or licensed to do business and is
in good standing in all jurisdictions in which the character of the properties owned or held under
lease by it or the nature of the business transacted by it makes qualification necessary, except
where the failure to be so qualified, licensed or in good standing would not reasonably be
expected to have a Seller Material Adverse Effect.
3.2
Authority. Each Seller has full entity power and authority to execute and deliver
this Agreement and the Ancillary Agreements to which it is or will be a party in connection with
the transactions contemplated hereby, to perform its obligations hereunder and thereunder and to
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consummate the transactions contemplated hereby and thereby. The execution and delivery by
Sellers of this Agreement and the Ancillary Agreements to which it will be a party in connection
with the transactions contemplated hereby, and the performance by Sellers of their obligations
hereunder and thereunder, have been duly and validly authorized by all necessary entity action.
3.3
Binding Agreement. This Agreement and the Ancillary Agreements to which the
applicable Seller is or will be a party have been or will be when delivered duly executed and
delivered by such Seller and, assuming due and valid authorization, execution and delivery
thereof by Purchaser and each other party thereto, this Agreement and the Ancillary Agreements
to which it is or will be a party are or will be when delivered valid and binding obligations of
such Seller enforceable against such Seller in accordance with their terms (subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar Laws relating to or affecting
the enforcement of creditors’ rights generally and to general principles of equity).
3.4
No Conflicts. Subject to the receipt of the Requested Consents, FERC Approval,
the expiration of the waiting period under the HSR Act and receipt of the other consents and
actions listed in Section 3.4 of Sellers’ Disclosure Schedule, the execution, delivery, and
performance of this Agreement and any of the Ancillary Agreements by each Seller to which it is
or will be a party shall not:
(a)
conflict with or result in a violation or breach of any of the terms,
conditions or provisions of such Seller’s organizational documents;
(b)
result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions of any Assigned
Facilities Agreement or material Contract (with or without notice or lapse of time or both) with
respect to the Purchased Assets to which such Seller or any of its Affiliates is a party or by which
such Seller, any of its Affiliates or any of the Purchased Assets may be bound, except for such
defaults (or rights of termination, cancellation or acceleration) as to which requisite waivers or
consents have been obtained in writing (true and correct copies of which waivers or consents
have been furnished to Purchaser);
(c)
conflict with or result in a violation or breach in any material
respect of any term or provision of any Law applicable to such Seller or the Purchased Assets; or
(d)
result in the imposition or creation of any Lien (other than a
Permitted Lien) upon any of the Purchased Assets, other than in favor of Purchaser;
3.5
Approvals and Filings. Except for the Requested Consents, FERC Approval and
expiration of the waiting period under the HSR Act and as set forth in Section 3.5 of Sellers’
Disclosure Schedule, no material consent or approval of, filing with or notice to, any
Governmental Authority or other Person by a Seller is required in connection with the execution,
delivery and performance by such Seller of this Agreement or any of the Ancillary Agreements
to which it is or will be a party or the consummation of the transactions contemplated hereby or
thereby.
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3.6
No Seller Material Adverse Effect. Since December 31, 2012, no change, event
or development has had, or would reasonably be expected to have, a Seller Material Adverse
Effect.
3.7
Legal Proceedings. Except as set forth in Section 3.7 of Sellers’ Disclosure
Schedule, there are no Actions (a) outstanding or pending to which a Seller is a party or (b) to
Sellers’ Knowledge, threatened against such Seller or any of its assets and properties, in each
case which would be reasonably expected to (i) result in the issuance of an order restraining,
enjoining or otherwise prohibiting or making illegal the consummation of the transactions
contemplated by this Agreement or any of the Ancillary Agreements, (ii) adversely affect the
ownership, operation, maintenance or use of the Projects or the Purchased Assets, or
(iii) individually or in the aggregate, have a Seller Material Adverse Effect.
3.8
Compliance with Laws. To Sellers’ Knowledge, each Seller is not in violation of
or in default under any Law applicable to it (excluding any Environmental Laws which are
addressed in Section 3.16 and employment-related Laws which are addressed in Sections 3.17
and 3.18), the Projects or the Purchased Assets, in each case, in any material respect. Each Seller
has not received notification alleging that it is in violation of any Law (excluding any
Environmental Laws which are addressed in Section 3.16 and employment-related Laws which
are addressed in Sections 3.17 and 3.18) applicable to the Projects or the Purchased Assets, in
each case, in any material respect.
3.9
Title to Purchased Assets. As of the Effective Date, Sellers have good and
marketable title to the Purchased Assets (other than the Real Property), free and clear of all
Liens, except for Permitted Liens. At the Closing, Purchaser will acquire good and marketable
title to the Purchased Assets (other than the Real Property), free and clear of all Liens, except for
Permitted Liens.
3.10
Real Property.
(a)
Section 3.10(a)(i) of Sellers’ Disclosure Schedule sets forth a true
and complete description of all real property used for the conduct of the Projects by Sellers as
currently conducted (collectively, the “Project Property”). Section 3.10(a)(ii) of Sellers’
Disclosure Schedule sets forth a depiction of that portion of the Greenhouse Property which shall
be conveyed by SWG Holdings to Purchaser at the Closing to provide a setback from the
Projects (the “Setback Property” and, together with the Project Property, the “Real Property”).
Sellers have delivered to Purchaser copies of (i) the deeds and other instruments (as recorded) for
the Greenhouse Property and Project Property and (ii) all title insurance policies, opinions,
abstracts and surveys with respect to such Real Property, that are in the possession of Sellers or
SWG Holdings.
(b)
As of the Effective Date, SWG Holdings is the fee simple owner of
the Real Property, free and clear of all Liens other than Permitted Liens. At the Closing,
Purchaser will acquire good and marketable title to the Real Property, free and clear of all Liens
other than Permitted Liens, and subject to Permitted Encumbrances.
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(c)
None of Sellers or SWG Holdings has received any written notice
that the whole or any portion of the Real Property is subject to any governmental decree or order
to be sold or is being condemned, expropriated or otherwise taken by any Governmental
Authority with or without payment of compensation therefor, nor, to Sellers’ Knowledge, has
any such condemnation, expropriation or taking been proposed. None of Sellers or SWG
Holdings is a party to any lease, assignment or similar arrangement affecting or relating to any
portion of the Real Property, except as may be disclosed in that certain Preliminary Title Report
from Lawyers Title dated March 11, 2014, a copy of which has been provided to Purchaser.
None of Sellers or SWG Holdings has received any written notice of any material requirements
or recommendations by any insurance company that has issued a policy covering any part of the
Real Property or by any board of fire underwriters or other body exercising similar functions,
requiring or recommending any repairs or work to be done on any part of the Real Property,
which repair or work has not been completed and accepted.
(d)
Other than Permitted Liens and as set forth in Section 3.10(d) of
Sellers’ Disclosure Schedule, there are no agreements between a Seller or SWG Holdings and
any Governmental Authority affecting the use or ownership of the Real Property and, to Sellers’
Knowledge, there are no agreements between any other party and any Governmental Authority
affecting the use or ownership of the Real Property.
(e)
Except for this Agreement, Permitted Liens or as set forth in
Section 3.10(e) of Sellers’ Disclosure Schedule, none of Sellers or SWG Holdings is a party to
any agreement for the sale, exchange, encumbrance, lease or transfer of any of the Real Property
or any portion of the Real Property by such Seller or SWG Holdings.
(f)
Except as set forth in Section 3.10(f) of Sellers’ Disclosure
Schedule, to Sellers’ Knowledge, each Seller and SWG Holdings is in compliance with
applicable material conditions, covenants and restrictions that encumber the Real Property.
3.11
Sufficiency of Purchased Assets.
(a)
Sellers have, or will have at the Closing, the power and right to
sell, convey, deliver, transfer and assign to Purchaser, the Purchased Assets and the Greenhouse
Building free and clear of all Liens (other than Permitted Liens and Permitted Encumbrances).
To Sellers’ Knowledge, there are no adverse claims of ownership to the Acquired Assets and,
except as disclosed in Section 3.10(e) of Sellers’ Disclosure Schedule, neither Sellers nor any of
their Affiliates has received any notice that any Person has asserted a claim of ownership or right
of possession or use in or to any of the Purchased Assets or the Greenhouse Building. Sellers
have not removed any Stores and Inventory from the Facilities except for obsolete and unneeded
Stores and Inventory in the ordinary course of business and in accordance with Good Operating
Practices. Sellers have provided Purchaser with a list of all material consumable supplies for
which less than a sixty (60) day supply is maintained. Except as set forth in Section 3.11 of
Sellers’ Disclosure Schedule, all Fixtures and Equipment are currently located at the Facilities,
and no Fixtures and Equipment intended for the Facilities are being held by third parties pending
payment by or on behalf of any Seller or SWG Holdings. All Fixtures and Equipment (other
than spare parts and other equipment not currently in service) and all Improvements constituting
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part of the Facilities have been maintained and operated by Sellers in accordance with Good
Operating Practices, except for ordinary wear and tear.
3.12 Warranty Matters. Section 3.12 of Sellers’ Disclosure Schedule identifies all
currently effective warranties by any vendor, materialman, supplier, contractor or subcontractor
relating to the Purchased Assets or any component thereof with a value of $100,000 or more. To
Sellers’ Knowledge, there are no events that have occurred or conditions applicable that
constitute or may constitute a defense to the continuing effectiveness of each such warranty.
3.13
Contracts.
(a)
Except for the Assigned Facilities Agreements, any Seller Plans
and any Contracts with respect to which none of the Purchased Assets will be bound or have
Liability after the Closing (including the Excluded Contracts), there are no Contracts of the
following types by which the Purchased Assets may be bound or relating to the employment at
the Projects of any Project Employee:
(i)
Contracts for the future purchase, exchange or sale of
electric power or ancillary services or fuel;
(ii)
Contracts for the future transmission of electric power or
(iii)
interconnection Contracts;
fuel or for the storage of fuel;
(iv)
other than Contracts of the nature addressed by
Section 3.13(a)(i) and Section 3.13(a)(ii), Contracts for the future provision of goods or services
requiring payments in excess of $100,000 for each individual Contract;
(v)
outstanding agreements of guaranty, surety or
indemnification, direct or indirect, by a Seller or any of its Affiliates for the benefit of the
Purchased Assets;
(vi)
Contracts with a Seller or any of its Affiliates relating to
the future provision of goods or services;
(vii)
employment and consulting Contracts;
(viii) Contracts providing severance benefits;
(ix)
any collective bargaining agreement;
(x)
outstanding futures, swap, collar, put, call, floor, cap,
option or other Contracts that are intended to benefit from or reduce or eliminate the risk of
fluctuations in the price of commodities, including electric power, fuel or securities;
(xi)
partnership, joint venture or limited liability company
agreements;
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Contracts relating to Indebtedness;
(xiii) Contracts relating to the use of the Facilities; and
(xiv)
Contracts relating to the use of Intellectual Property used in
the operation of the Facilities.
(b)
Each Seller has provided Purchaser with, or access to, true and
complete copies of all Assigned Facilities Agreements, including all amendments, supplements,
schedules and exhibits thereto. No written waiver or, to Sellers’ Knowledge, oral waiver of any
term or condition of any Assigned Facilities Agreement is currently in effect. No Seller has
assigned any of its interest in the Assigned Facilities Agreements, and its interest in the Assigned
Facilities Agreements is not subject to any Liens (other than Permitted Liens).
(c)
None of the Sellers, and to Sellers’ Knowledge, no counterparty, is
in default in any material respect in the performance or observance of any term or provision of,
and no event has occurred which, with lapse of time or action by a third party, would result in
such a default under, any Assigned Facilities Agreement. Each Assigned Facilities Agreement is
in full force and effect, and constitutes a legal, valid and binding agreement of the applicable
Seller and, to Sellers’ Knowledge, of each other party thereto, enforceable in accordance with its
terms (subject to applicable bankruptcy, insolvency or other similar Laws relating to or affecting
the enforcement of creditors’ rights generally and to general principles of equity).
3.14
Permits.
(a)
Except for those Permits required under Environmental Law
(which are addressed in Section 3.16), Section 3.14(a) of Sellers’ Disclosure Schedule sets forth
a list of all Transferred Permits.
(b)
All Transferred Permits are properly in the name of the Facilities
or a Seller, as applicable. Except as set forth in Section 3.14(b) of Sellers’ Disclosure Schedule,
each Seller is in compliance in all material respects with each Transferred Permit, and each
Transferred Permit is in full force and effect.
3.15 Insurance. Section 3.15 of Sellers’ Disclosure Schedule sets forth a true and
complete list and description of all material insurance policies in force on the Effective Date with
respect to the Purchased Assets, together with a statement of the aggregate amount of claims paid
out and claims pending under each such insurance policy, in each case, relating to the Purchased
Assets. All policies are in full force and effect, all premiums due thereon have been paid and
each Seller is in compliance in all material respects with the terms and provisions of such
policies. Furthermore, as they relate to the Purchased Assets, (a) each Seller has not received
any notice of cancellation or non-renewal of any such policy, (b) to Sellers’ Knowledge, there is
no claim pending under any of such policies as to which coverage has been questioned, denied or
disputed by the underwriters of such policies, (c) no Seller has received any notice from any of
its insurance carriers that any insurance premiums in respect of such policies will be increased in
the future or that any insurance coverage presently provided for will not be available to such
Seller in the future on substantially the same terms as now in effect, and (d) no Seller has
received notice that the Facilities, or any Fixtures and Equipment or the operation thereof, will
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not be insurable or will be subject to exclusions arising from actual or potential defects in the
Purchased Assets.
3.16
Environmental Matters.
Except as set forth in Section 3.16 of Sellers’ Disclosure Schedule:
(a)
Each Seller has made available to Purchaser all of the material
environmental site assessment reports, Environmental Permits and other material studies, audits
and reports that are in the possession of such Seller or SWG Holdings and which relate to
environmental, health and safety matters in connection with ownership, construction, operation
or maintenance of the Facilities or the Real Property.
(b)
Each Seller and SWG Holdings (i) has not entered into or agreed to
any judicial or administrative consent decree or order, and (ii) is not subject to any judgment,
decree, or judicial or administrative order, relating to compliance with any Environmental Law
or to investigation or cleanup of Hazardous Materials or Environmental Conditions, in each case,
relating to the Facilities or the Real Property.
(c)
To Sellers’ Knowledge, there are no Actions pending or threatened
under any Environmental Law relating to the Facilities or the Real Property.
(d)
All Environmental Permits issued to Sellers or SWG Holdings and
in effect with respect to the Facilities or the Real Property are set forth in Section 3.16(d) of
Sellers’ Disclosure Schedule. All Environmental Permits required for the ownership, operation
or maintenance of the Facilities as currently conducted (i) are in effect to the extent required
under any Environmental Law or (ii) a complete and timely application has been submitted such
that an application shield would apply. No appeal or any other Action is pending, or to Sellers’
Knowledge, threatened, to revoke, suspend or modify any such Environmental Permits.
(e)
To Sellers’ Knowledge, each Seller and SWG Holdings is and has
been in compliance with all Environmental Laws in all material respects with respect to the
Facilities and the Real Property.
(f)
To Sellers’ Knowledge, there has been no Release of Hazardous
Materials on, beneath or from the Real Property, except for Releases of Hazardous Materials that
would not reasonably be expected to result in a claim by a Governmental Authority or other
Person not affiliated with Purchaser or a requirement to engage in a Remediation; provided that,
with respect to the Setback Property, the Setback Property is used for industrial use or other
current use as of the Effective Date.
Notwithstanding any other provision of this Agreement to the contrary (except for
Environmental Permits that may require filing with, or approval by, Governmental Authorities
under Section 3.5), this Section 3.16 contains the sole and exclusive representations and
warranties of Sellers with respect to compliance with Environmental Laws, Environmental
Permits, Hazardous Materials and Remediation.
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Labor Matters.
(a)
Each of the employees at each Project (each, a “Project
Employee”) is employed by a Seller or an Affiliate of Seller, and all Project Employees are listed
on Schedule 1.1(f). No individual performs material services in respect of the Facilities or
otherwise in respect of the Purchased Assets other than those listed as a Project Employee on
Schedule 1.1(f). Each Seller has disclosed to Purchaser, with respect to each Project Employee
(including any Project Employee who is on a leave of absence or on layoff status): (i) the name
and title of the Project Employee; (ii) the aggregate dollar amounts of the compensation
(including wages, salary, commissions, fringe benefits, bonuses, profit-sharing payments and
other payments or benefits of any type) received by the Project Employee from such Seller or an
Affiliate of such Seller, as applicable, for the two (2)-year period before the Agreement Date;
(iii) the Project Employee’s annualized compensation as of the Effective Date; and (iv) the
number of hours and aggregate dollar amount of vacation time that the Project Employee has
accrued as of February 28, 2014.
(b)
No Seller nor any Affiliate of a Seller that employs a Project
Employee is party to or bound by any labor agreement, collective bargaining agreement, work
rules or practices or any other labor-related agreements or arrangements with any labor union or
labor organization pertaining to the Project Employees. There are no labor agreements, collective
bargaining agreements, work rules or practices or any other labor-related agreements or
arrangements with any labor union or labor organization that pertain to any Project Employee’s
employment with such Seller or an Affiliate of such Seller.
(c)
No labor union, labor organization or Project Employee has made
a pending demand for recognition or certification to a Seller or an Affiliate of a Seller with
respect to the Facilities or Project Employees. There are no representation or certification
proceedings or petitions seeking a representation proceeding presently pending or threatened in
writing to be brought or filed with the National Labor Relations Board or any other labor
relations tribunal or authority with respect to Project Employees. To Sellers’ Knowledge, there
have been no labor union organizing activities with respect to any Project Employees.
(d)
From January 1, 2009, there have been no actual or, to Sellers’
Knowledge, threatened arbitrations, grievances, labor disputes, strikes, lockouts, slowdowns or
work stoppages against or affecting any Project. From January 1, 2009, there have been no actual
or, to Sellers’ Knowledge, threatened, arbitrations, grievances, labor disputes, strikes, lockouts,
slowdowns or work stoppages against or affecting any Project.
(e)
To Sellers’ Knowledge, with respect to the Project Employees, no
Seller or any Affiliate of a Seller, or any of their respective Related Persons, has committed any
material unfair labor practice as defined in the National Labor Relations Act.
(f)
Each Seller and all Affiliates of each Seller, with respect to the
Project Employees, are in compliance in all material respects with all applicable Laws relating to
employment and employment practices, including, without limitation, all Laws respecting terms
and conditions of employment, health and safety, wages and hours, child labor, immigration,
employment discrimination, worker classification, disability rights or benefits, equal opportunity,
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plant closures and layoffs, affirmative action, workers compensation, labor relations, employee
leave issues and unemployment insurance.
(g)
Except as would not, individually or in the aggregate, reasonably
be expected to have a Seller Material Adverse Effect, there are no claims pending or, to Sellers’
Knowledge, threatened against, a Seller or an Affiliate of a Seller that pertain to any Project
Employee or any former employee of a Seller or any Affiliate of a Seller with respect to a
Project.
3.18
Employee Matters.
(a)
Neither Purchaser nor any of its Affiliates will incur, and no
condition or set of circumstances exists under which Purchaser or any of its Affiliates could
incur, directly or indirectly, any Tax, penalty, fine, Liability, Loss or expense under ERISA, the
Code or any other applicable Law, or pursuant to any indemnification or similar agreement,
under the terms of or otherwise in respect of any employee compensation or benefit plan,
program, agreement or arrangement, providing retirement, incentive compensation, health,
disability, severance, life, change in control or equity compensation or benefits (including any
employee benefit plan within the meaning of ERISA Section 3(3)), established or maintained by
a Seller or any of its Affiliate or ERISA Affiliates.
(b)
Section 3.18(b) of Sellers’ Disclosure Schedule sets forth a
complete list of each deferred compensation, incentive compensation, stock purchase and equity
compensation plan, program, agreement or arrangement; each “welfare” plan, fund or program
that is within the meaning of Section 3(1) of ERISA; each “pension” plan, fund or program that
is within the meaning of Section 3(2) of ERISA; each employment, termination, change in
control, or severance agreement; and each other employee benefit plan, fund, program,
agreement or arrangement, in each case, maintained or contributed to by a Seller or any of its
Affiliates or ERISA Affiliates for the benefit of any Project Employee (the “Seller Plans”). With
respect to each Seller Plan, each Seller has heretofore delivered or made available to Purchaser,
copies of a plan or agreement document, a summary plan description, if applicable, or such other
plan summary, and the most recent determination letter received from the Internal Revenue
Service with respect to each Seller Plan intended to qualify under Section 401(a) of the Code.
(c)
To Sellers’ Knowledge, each of the Seller Plans is, and at all times
since inception has been, maintained, operated, administered and funded in material compliance
with its terms and all applicable Law. Each Seller and, to Sellers’ Knowledge, each fiduciary,
has, at all times, properly performed all of its duties and obligations in all material respects,
whether arising by operation of Law, by contract or otherwise, under or with respect to each of
the Seller Plans, including reporting, disclosure, notification and fiduciary duties and obligations.
(d)
Each of the Seller Plans that is intended to be qualified under
Section 401(a) of the Code has received a favorable determination letter with respect to its
qualified status under Section 401(a) of the Code. To Sellers’ Knowledge, nothing has occurred
that would reasonably be expected to adversely affect the qualified status of any such Seller Plan.
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(e)
Except for routine claims for benefits in the normal operation of
the Seller Plans, there are no claims against or involving any Seller Plan or asserting any rights
or claims to benefits under any Seller Plan, nor, to Sellers’ Knowledge is any such claim
threatened nor is there a reasonable basis for any such claim. There are no audits, inquiries or
proceedings pending or, to Sellers’ Knowledge, threatened by any Governmental Authority with
respect to any Seller Plan.
(f)
No Seller or any of its ERISA Affiliates sponsors, maintains or
contributes to, or has ever sponsored, maintained or contributed to (or been obligated to sponsor,
maintain or contribute to) (i) a “multiemployer plan,” as defined in Sections 3(37) or 4001(a)(3)
of ERISA or 414(f) of the Code, (ii) a multiple employer plan within the meaning of
Section 4063 or 4064 of ERISA or Section 413(c) of the Code, (iii) an employee benefit plan that
is subject to Section 302, 303, 304 or 305 of ERISA, Title IV of ERISA or Section 412, 430,
431, 432 or 436 of the Code, or (iv) a “multiple employer welfare arrangement,” as defined in
Section 3(40) of ERISA.
3.19 Brokers. All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by Sellers directly with Purchaser without the
intervention of any Person on behalf of a Seller in such manner as to give rise to any valid claim
by any Person against Purchaser for a finder’s fee, brokerage commission or similar payment.
3.20 Intellectual Property. Except as set forth on Section 3.20 of Sellers’ Disclosure
Schedule, (i) each Seller owns or has the right to use all the Transferred Intellectual Property
used in the operations of the Facilities as owned, operated and maintained for the last twentyfour (24) months by such Seller, and (ii) to Sellers’ Knowledge, no Person has or is infringing or
misappropriating (whether directly or indirectly) any Transferred Intellectual Property. No
Person has asserted against a Seller or any of its Affiliates a claim in writing that the operation of
the Facilities as owned, operated and maintained for the last twenty-four (24) months by such
Seller infringes or misappropriates the Intellectual Property of such Person and, to Sellers’
Knowledge, there is no valid basis for any such claim.
3.21 Regulatory Status. Each Seller (a) is an “exempt wholesale generator” as defined
in the Public Utility Holding Company Act of 2005, (b) is subject to regulation under the Federal
Power Act as a “public utility” and (c) has been authorized by FERC to make sales of energy and
capacity at market-based rates pursuant to Section 205 of the Federal Power Act. No Seller is
subject to regulation as a franchised public utility or public service company (or similar
designation reflecting an obligation to offer retail electric service to the public) by the United
States, any State of the United States, any foreign country or any municipality or any political
subdivision of the foregoing.
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Sellers that, except as set forth in
Purchaser’s Disclosure Schedule, all of the statements contained in this ARTICLE IV are true
and correct as of the Effective Date, except to the extent such representations and warranties are
specifically made as of a particular date (in which case such representations and warranties will
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be true and correct as of such date). Each exception and other response to this Agreement set
forth in Purchaser’s Disclosure Schedule is identified by reference to, or has been grouped under
a heading referring to, a specific individual section of this Agreement, and, except as otherwise
specifically stated with respect to such exception, relates only to such section and to other
sections to the extent that the application of such exception or other response to such other
sections is reasonably apparent on its face without further investigation.
4.1
Existence. Purchaser is a corporation, duly formed, validly existing and in good
standing under the Laws of the State of Nevada and has full corporate power and authority to
conduct its business as it is now being conducted and to own, lease and operate its assets and
properties. Purchaser is duly qualified or licensed to do business and is in good standing in all
jurisdictions in which the character of the properties owned or held under lease by it or the nature
of the business transacted by it makes qualification necessary, except where the failure to be so
qualified, licensed or in good standing would not be reasonably expected to have a Purchaser
Material Adverse Effect.
4.2
Authority. Purchaser has full corporate power and authority to execute and
deliver this Agreement and the Ancillary Agreements to which it is or will be a party in
connection with the transactions contemplated hereby, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby. The execution
and delivery by Purchaser of this Agreement and the Ancillary Agreements to which it is or will
be a party in connection with the transactions contemplated hereby, and the performance by
Purchaser of its obligations hereunder and thereunder, have been duly and validly authorized by
all necessary corporate action.
4.3
Binding Agreement. This Agreement and the Ancillary Agreements to which
Purchaser is or will be a party have been or will be when delivered duly and validly executed and
delivered by Purchaser and, assuming due and valid authorization, execution and delivery thereof
by Sellers and each other party thereto, this Agreement and the Ancillary Agreements to which
Purchaser is or will be a party are or will be when delivered valid and binding obligations of
Purchaser enforceable against Purchaser in accordance with their terms (subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar Laws relating to or affecting
the enforcement of creditors’ rights generally and to general principles of equity).
4.4
No Conflicts. Subject to the receipt of the Requested Consents, PUCN Approval,
FERC Approval and the expiration of the waiting period under the HSR Act, the execution,
delivery, and performance of this Agreement and any of the Ancillary Agreements by Purchaser
to which Purchaser is or will be a party shall not:
(a)
conflict with or result in a violation or breach of any of the terms,
conditions or provisions of Purchaser’s articles of incorporation and by-laws;
(b)
result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions of any material
Contract or other material obligation (with or without notice or lapse of time or both) to which
Purchaser is a party or by which any of its assets and properties may be bound, except for such
defaults (or rights of termination, cancellation or acceleration) as to which requisite waivers or
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consents have been obtained in writing (true and correct copies of which waivers and consents
have been furnished to Sellers); or
(c)
conflict with or result in a violation or breach in any material
respect of any term or provision of any Law applicable to Purchaser or any of its assets and
properties.
4.5
Approvals and Filings. Except for the Requested Consents, PUCN Approval,
FERC Approval and the expiration of the waiting period under the HSR Act and as set forth in
Section 4.5 of Purchaser’s Disclosure Schedule, no material consent or approval of, filing with or
notice to, any Governmental Authority or other Person is required in connection with the
execution, delivery and performance by Purchaser of this Agreement or any of the Ancillary
Agreements to which Purchaser is or will be a party or the consummation by Purchaser of the
transactions contemplated hereby or thereby.
4.6
Legal Proceedings. Except as set forth in Section 4.6 of Purchaser’s Disclosure
Schedule, there are no Actions (a) outstanding or pending to which Purchaser is a party or (b) to
Purchaser’s Knowledge, threatened against Purchaser or any of its assets and properties, which
would be reasonably expected to (i) result in the issuance of an order restraining, enjoining or
otherwise prohibiting or making illegal the consummation of the transactions contemplated by
this Agreement or any of the Ancillary Agreements, or (ii) individually or in the aggregate, have
a Purchaser Material Adverse Effect.
4.7
Brokers. All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by Purchaser directly with Sellers without the
intervention of any Person on behalf of Purchaser in such manner as to give rise to any valid
claim by any Person against Seller for a finder’s fee, brokerage commission or similar payment.
4.8
Financial Resources. Purchaser will, at Closing, have unrestricted cash sufficient
to satisfy its obligations required to be performed at Closing.
ARTICLE V COVENANTS
5.1
to Closing:
Efforts to Close and Fulfillment of Conditions. After the Effective Date and prior
(a)
Each Party shall use commercially reasonable efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable
under Law to consummate and make effective the transactions contemplated by this Agreement.
Such actions shall include each Party using its commercially reasonable efforts to ensure
satisfaction of the conditions precedent to its obligations hereunder, as soon as practicable after
the Effective Date.
(b)
Each Party shall provide reasonable cooperation to the other Parties in
obtaining consents, approvals or actions of, making all filings with and giving all notices to
Governmental Authorities or other Persons required of the other Parties to consummate the
transactions contemplated hereby and by the Ancillary Agreements. The Parties shall use their
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commercially reasonable efforts to respond promptly and accurately to any requests for
additional information made by any such Governmental Authority. The Parties agree that they
shall consult with each other with respect to the transfer to Purchaser or the obtaining by
Purchaser or Sellers of FERC Approval, PUCN Approval and applicable Permits, consents,
approvals and authorizations of all third parties and Governmental Authorities, including the
HSR Act filing; provided, that for the avoidance of doubt, the HSR Act and PUCN filings and
attachments thereto need not be exchanged or preapproved by the non-filing Parties. Purchaser
shall use commercially reasonable efforts to file with the PUCN, on or before May 1, 2014 an
emission reduction and capacity replacement plan pursuant to NRS Sections 704.7316 and
704.741, which filing includes the Facilities. Sellers shall timely file a petition for leave to
intervene in the PUCN proceeding(s) related to the approval of such filing, retain counsel to
represent Sellers in such proceeding(s) in accordance with NAC Section 703.510, and actively
support the regulatory approval process. Subject to Section 5.1(i), each Party shall cooperate in
good faith with the Governmental Authorities and undertake promptly any and all commercially
reasonable action required to complete lawfully the transactions contemplated by this
Agreement.
(c)
On or before May 1, 2014, Purchaser shall file with the PUCN all
documents reasonably required to obtain the PUCN Approval. Purchaser shall use commercially
reasonable efforts to respond promptly and accurately to any requests for additional information
made by the PUCN, and Sellers shall use commercially reasonable efforts to cooperate with
Purchaser in connection therewith. Purchaser shall consult with Sellers on all principal filings
submitted by Purchaser to the PUCN in connection with the PUCN Approval; provided, that
such PUCN filings and attachments thereto need not be exchanged with, or preapproved by,
Sellers. For the avoidance of doubt, Sellers shall not be entitled to receive any proprietary data
related to current and forecasted operations of Purchaser, including production models, operating
costs and other similar information in connection with the preparation of the filing to the PUCN.
Each Party shall bear its own costs and expenses of the preparation of such filing.
(d)
Each Party shall prepare, as soon as is practical following the execution of
this Agreement, all necessary filings in connection with the transactions contemplated by this
Agreement that may be required by FERC, under the HSR Act or under any other federal, state
or local Laws. Each Party shall use commercially reasonable efforts to submit such filings (A)
under the HSR Act as promptly as practicable and, in any event, not later than thirty (30) days
after the Effective Date and (B) with the FERC as promptly as practicable and, in any event, not
later than sixty (60) days after the Effective Date. No Party shall request early termination of the
waiting period under the HSR Act. The Parties shall promptly furnish each other with copies of
any notices, correspondence or other written communication from the relevant Governmental
Authority, shall promptly make any appropriate or necessary subsequent or supplemental filings
and shall cooperate in the preparation of such filings as is reasonably necessary and appropriate
(provided that HSR Act filings and attachments need not be exchanged or preapproved by the
other party and provided, further, that any exchange of information between Sellers and
Purchaser in connection with any filings shall be done in a manner that complies with applicable
antitrust laws). The filing fee under the HSR Act shall be paid by Purchaser (except insofar as
the ownership structures of Sellers or SWG Holdings necessitate multiple filing fees).
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(e)
On or before ninety (90) days following the Effective Date, Sellers shall
provide to Purchaser a commitment for title insurance issued by the Title Company (the “Title
Insurance Commitment”), to issue on the Closing Date, at Purchaser’s own cost and expense, a
title insurance policy reasonably insuring Purchaser’s ownership interest in the Real Property and
the Improvements in the full amount of the Purchase Price allocated to the Real Property, subject
only to the Permitted Encumbrances and the Permitted Liens (the “Title Insurance Policy”).
Purchaser shall use commercially reasonable efforts to obtain and provide to Sellers on or before
sixty (60) days after Purchaser’s receipt of the Title Commitment, a current or updated
ALTA/ACSM survey (the “Survey”) of the Real Property prepared by the Surveyor. The
premium for the Title Insurance Policy shall be paid at Closing. Purchaser shall be responsible
for all costs of the Title Insurance Commitment, resulting Title Insurance Policy and the Survey.
Purchaser may object to any matters shown on the Title Insurance Commitment and/or the
Survey, other than Permitted Liens as of the Closing Date pursuant to Schedule 1.1(c) and the
standard pre-printed exceptions that appear in the Title Insurance Commitment, by delivering
written notice (the “Title and Survey Objection Notice”) to Seller no later than ten (10) days after
receipt by Purchaser of the later of the Title Insurance Commitment and the Survey. If Purchaser
does not deliver the Title and Survey Objection Notice within the prescribed 10-day period, all
matters reflected on the Title Insurance Commitment and Survey shall be “Permitted
Encumbrances”, and all matters reflected on the Title Insurance Commitment and the Survey to
which Purchaser does not object in the Title and Survey Objection Notice shall be Permitted
Encumbrances. Sellers may, but shall have no obligation to, remove or rectify prior to Closing
any matters identified as objections in the Title and Survey Objection Notice (the “Objectionable
Title and Survey Matters”). Within ten (10) days after receipt of Purchaser’s Title and Survey
Objection Notice, Sellers shall provide Purchaser notice (“Sellers’ Title/Survey Objection
Response”) of those Objectionable Title and Survey Matters that Sellers will remove or rectify
and those that Sellers elect not to remove or rectify. If Sellers elect not to remove or rectify any
of the Objectionable Title and Survey Matters, Purchaser shall have the right to terminate this
Agreement by delivering written notice to Seller within ten (10) days following Purchaser’s
receipt of Sellers’ Title/Survey Objection Response. If Purchaser does not deliver to Sellers such
a notice of termination within the prescribed 10-day period, then Purchaser shall be deemed to
have accepted the Objectionable Title and Survey Matters and they shall be deemed to be
Permitted Encumbrances.
(f)
Sellers shall request the Requested Consents in the forms acceptable to the
Parties from the applicable counterparties to the Assigned Facilities Agreements.
(g)
Each of the Sellers and Purchaser agree to use commercially reasonable
efforts to refrain from taking any action which could reasonably be expected to materially delay
the consummation of the transactions contemplated by this Agreement; provided, however, that
neither (i) the filing by a Seller of a petition for leave to intervene or notice of intent to comment
in any proceeding(s) initiated by Purchaser in accordance with Section 5.1(b), or otherwise, nor
(ii) Purchaser’s inclusion in its application for PUCN Approval requests or action plan items
unrelated to the Purchased Assets, shall be deemed to be an action which could reasonably be
expected to materially delay the consummation of the transactions contemplated by this
Agreement.
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(h)
No separate consent by Purchaser under any agreement to which
Purchaser and a Seller is a party that is required to complete the transactions contemplated by
this Agreement and the assignment and assumption of the Assigned Facilities Agreements shall
be required from Purchaser, and by its execution and delivery of this Agreement Purchaser
hereby grants each such consent.
(i)
Notwithstanding the foregoing, nothing in this Section 5.1 shall require, or
be construed to require, Purchaser or any Seller or any of their respective Affiliates to agree to (i)
sell, hold, divest, discontinue or limit, before or after the Closing Date, any assets, businesses or
interests of Purchaser or a Seller or any of their respective Affiliates (other than pursuant to this
Agreement); (ii) waive their respective conditions to Closing set forth in Section 6.1 and Section
6.2; or (iii) any modification or waiver of the terms and conditions of this Agreement.
5.2
Operation and Maintenance of Purchased Assets.
(a)
After the Effective Date and prior to Closing, each Seller shall operate and
maintain the Facilities in accordance with Good Operating Practices in compliance with Law and
in the ordinary course of business consistent with past practices. Each Seller shall provide notice
to Purchaser if the expenditures for maintenance and capital improvements for the applicable
Project shall vary materially more or less than from the amounts set forth in the budget therefore
and shall provide information related thereto reasonably requested by Purchaser. Each Seller
shall provide Purchaser with a detailed budget of maintenance and capital expenditures through
December 31, 2014 within two (2) weeks after the date hereof.
(b)
Except as set forth in Schedule 5.2(b), after the Effective Date and prior to
Closing, the Sellers shall not, and shall cause SWG Holdings not to, without the written consent
of Purchaser:
(i)
dispose of, remove or assign any of the Purchased Assets
except for obsolete and unneeded assets in the ordinary course of business and in accordance
with Good Operating Practices;
(ii)
incur or permit to exist any Lien on any of the Purchased
Assets, other than the Permitted Liens and Permitted Encumbrances;
(iii) enter into, amend, modify, terminate, grant any waiver
under, give any consent or settle or compromise any claim with respect to: (A) any Assigned
Facilities Agreement listed on Schedule 5.2(b)(iii) (Material Assigned Facilities Agreements); or
(B) any other Assigned Facilities Agreement and Contracts entered into after the Effective Date,
except in the case of this clause (B), for any Contracts, amendments, modifications, terminations,
waivers, consents, settlements or compromises entered into or made in the ordinary course of
business, consistent with past practices, and without any cost to or Liability of Purchaser or
adverse effect on the Purchased Assets. At the election of Sellers, Contracts entered into in
accordance with Section 5.2(b)(iii)(B) shall become Assigned Facilities Agreements;
(iv)
permit to lapse any rights to any Transferred Intellectual
Property, except to the extent such rights are not required to fulfill Sellers’ obligations pursuant
to this Section 5.2;
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(v)
make any material modification to the Facilities or the Real
Property, except for the Parcel Separation Approval and the Parcel Separation Tasks;
(vi)
settle or compromise any litigation or other Action which
could result in any obligation, cost to or Liability of Purchaser or which could constrain the
future operation of a Project;
(vii) make any material change in the levels of Stores and
Inventory maintained at the Facilities for the applicable time of the year, except in the ordinary
course of business, consistent with past practices and Good Operating Practices;
(viii) apply for or obtain any Permit, or modify or amend in any
material respect any Permit associated with the Purchased Assets, except for timely renewal of
any Permits in the ordinary course of business; or
(ix)
enter into any agreement to do or engage in any of the
foregoing.
(c)
All notices of Sellers and requests by Sellers for consent or other action by
Purchaser pursuant to this Section 5.2, and all responses of Purchaser pursuant thereto, shall be
made in writing to or by a Purchaser Consent Representative.
5.3
Purchaser’s Inspection Right. After the Effective Date and prior to Closing,
Purchaser, its Related Persons and its and their agents and representatives shall have reasonable
access, upon reasonable prior notice, to the Facilities and to the Books and Records, all for
purposes of inspection and review; provided, however, that (a) any investigation shall be
conducted in such manner as not to interfere unreasonably with the operation of the Purchased
Assets, (b) Purchaser shall require each Person conducting or participating in any such
investigation to comply with Sellers’ reasonably adopted procedures relating to safety and
security, (c) Purchaser shall indemnify Sellers for any damage to property or persons resulting
from any such investigation that is the result of the negligence or willful misconduct of
Purchaser, its Related Persons or its or their agents or representatives and is not covered by
insurance, (d) Sellers shall be entitled to have a representative present during the course of any
such investigation and (e) Sellers shall not be required to take any action that would constitute a
waiver of the attorney-client privilege.
5.4
Cooperation with Facilities Takeover and Transition of Operations. Within thirty
(30) days after the Effective Date, Purchaser shall deliver to Sellers a list of its proposed
representatives to the joint transition team. Each Seller will add its representatives to such team
within five (5) Business Days after receipt of Purchaser’s list. Such team will be responsible for
preparing as soon as reasonably practicable after the Effective Date, and timely implementing, a
transition plan which will identify and describe substantially all of the various transition
activities that the Parties will cause to occur before and after the Closing and any other transfer
of control matters that any Party reasonably believes should be addressed in such transition plan.
The Parties shall use commercially reasonable efforts to cause their representatives on such
transition team to cooperate in good faith and take all reasonable steps necessary to develop a
mutually acceptable transition plan no later than sixty (60) days after the Effective Date.
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Employee and Benefit Matters
(a)
Purchaser will be afforded the opportunity to interview and offer
employment to Project Employees at the Facilities. Neither Purchaser nor any of its Affiliates is
obligated to, interview or hire any Project Employees. Within
of Purchaser’s
request, Sellers shall provide Purchaser with copies of the resume, job application or other
relevant data containing a summary of a Project Employee’s employment history with the
applicable Seller and shall provide Purchaser with reasonable access to any Project Employee
within normal working hours.
(b)
Any offer of employment shall be subject to Purchaser’s applicable
employment practices and conditions and on terms acceptable to Purchaser in its sole discretion.
If, within
after the Closing, a Project Employee who accepted an offer of
employment from Purchaser and was hired by Purchaser is terminated, other than for misconduct
or violation of policy, Purchaser agrees to provide severance to such terminated Project
Employee in accordance with the terms of Sellers’ severance policies in place as of the Effective
Date.
(c)
Purchaser shall reimburse the applicable Seller for any severance paid by
such Seller to a Project Employee who was not given an offer of employment by Purchaser and
whose employment was terminated by such Seller within
after Closing in
accordance with the terms of such Seller’s severance policies in place as of the Effective Date.
Purchaser shall have no obligation to a Seller for any severance paid by such Seller to a Project
Employee of the LV Cogen Plants who: (i) declines an offer of employment from Purchaser, (ii)
is otherwise not eligible for employment in accordance with Purchaser’s employment policies
and practices, or (iii) is redeployed by such Seller (whether prior to or after Closing) to duties
other than those related to the LV Cogen Plants.
(d)
Each Seller and its Affiliates shall be and are solely responsible for any
continuation coverage under Seller Plans required under Section 4980B of the Code and Part 6 of
Title I of ERISA, and any applicable state Law, except with respect to any Project Employee
who is employed by Purchaser in accordance with this Section 5.5.
(e)
Subject to Section 2.1.4(a)(iv), neither Sellers nor any of their Affiliates
shall have any Liability with respect to (i) any Project Employee who is employed by Purchaser
in accordance with this Section 5.5, with respect to periods after the Closing, or (ii) any
compensation or benefit plans, programs or policies established or maintained by Purchaser, its
Affiliates or any of their respective ERISA Affiliates.
5.6
Casualty; Condemnation.
5.6.1 Casualty. If any part of the Purchased Assets is damaged, lost or
destroyed (whether by fire, theft, vandalism or other casualty) in whole or in part prior to the
Closing (a “Casualty Loss”), the applicable Seller shall provide Purchaser prompt written notice
of the Casualty Loss and the details thereof. If the Restoration Cost of the Purchased Assets that
were damaged, lost or destroyed, as estimated by a qualified firm reasonably acceptable to
Purchaser and such Seller (a “Qualified Firm”) within 30 days after such notice is received by
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Purchaser, is an amount equal to or less than ten percent (10%) of the Purchase Price, Purchaser
may, at its sole election, within 10 days of the estimation by the Qualified Firm, either require (a)
a reduction in the Purchase Price in an amount equal to the Restoration Cost (a “Casualty
Reduction”), or (b) such Seller to restore, prior to the Closing Date and to a pre-Casualty Loss
condition, any such damage, loss or destruction to the Purchased Assets. If the Restoration Cost
of the Purchased Assets that were damaged, lost or destroyed, as estimated by a Qualified Firm
within 30 days after such notice is received by Purchaser, is an amount greater than ten percent
(10%) of the Purchase Price, Purchaser may, at its sole election, within 10 days of the estimation
by the Qualified Firm, either (x) terminate this Agreement, or (y) require a Casualty Reduction.
Except as set forth in this Section 5.6 and ARTICLE VII, in no event shall a Casualty Loss affect
the Closing.
5.6.2 Condemnation. If any part of the Purchased Assets becomes subject to or
is threatened with any condemnation action, eminent domain proceeding or other similar action
(each, a “Condemnation Action”), the applicable Seller shall provide Purchaser prompt written
notice of the Condemnation Action and the details thereof. If the Purchased Assets subject to the
Condemnation Action have a Condemnation Value (as defined below), as estimated by a
Qualified Firm, equal to or less than ten percent (10%) of the Purchase Price, the Purchase Price
shall be reduced by the Condemnation Value. If the Purchased Assets subject to the
Condemnation Action have a Condemnation Value), as estimated by a Qualified Firm, greater
than ten percent (10%) of the Purchase Price, Purchaser may, at its sole election, within 10 days
of the estimation by the Qualified Firm, either (a) terminate this Agreement, or (b) require a
reduction in the Purchase Price in an amount equal to the Condemnation Value. For purposes of
this Section 5.6.2, “Condemnation Value” means, with respect to any Purchased Asset, the
amount payable (whether by condemnation award or otherwise) with respect to the Purchased
Asset that is subject to a Condemnation Action after the Effective Date and prior to the Closing.
If the Condemnation Value is not known as of the Closing and a reduction in the Purchase Price
occurs or has been elected under this Section 5.6.2, for purposes of the Closing, the Purchase
Price shall not be adjusted and the reduction in Purchase Price will be effected by the assignment
from the applicable Seller to Purchaser of all right, title and interest in and to the Condemnation
Value (including all rights to contest the amount of, and to collect, the Condemnation Value).
5.7
Interim Reports. In connection with the continuing operation of the Facilities,
each Seller shall use commercially reasonable efforts between the Effective Date and Closing to
provide Purchaser copies of monthly operational reports regularly prepared by such Seller.
5.8
Update of Sellers’ Disclosure Schedule. Prior to Closing, Sellers shall promptly
supplement or amend Sellers’ Disclosure Schedule previously delivered by Sellers, with respect
to any matter arising or of which a Seller becomes aware after the Effective Date which, if
existing, occurring or known on or before the Effective Date, would have been required to be set
forth or described in Sellers’ Disclosure Schedule (each, a “Schedule Update”). Sellers shall
deliver any such Schedule Update to Purchaser promptly and, in any event, no later than ten (10)
Business Days after the discovery of any such matter by a Seller. Any disclosure in a Schedule
Update shall be deemed to have been disclosed solely for purposes of determining whether the
condition precedent set forth in Section 6.1.1 has been satisfied. If the Closing occurs, the
making of any such disclosure in any such Schedule Update shall be deemed to have cured the
breach of any representation, warranty, covenant or agreement relating to the matter set forth in
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the Schedule Update for purposes of Purchaser’s right to indemnification as set forth in Section
8.1(a) and Section 8.1(b).
5.9
No Solicitation of Competing Transaction. After the Effective Date and prior to
Closing, no Seller shall, directly or indirectly, solicit, initiate or participate in discussions or
negotiations with any Person or group (other than Purchaser, any of its Affiliates or
representatives) concerning any Acquisition Proposal. No Seller shall, and each Seller shall
cause each of its Affiliates not to, enter into any agreement with respect to any Acquisition
Proposal. Each Seller shall promptly notify, and shall cause its Affiliates to promptly notify,
Purchaser of any Acquisition Proposal received by such Seller.
5.10 Termination of Certain Seller Services. Notwithstanding anything in this
Agreement to the contrary, during the period between the date hereof and Closing, Sellers may
take such actions as may be necessary to terminate or sever as to the Facilities (with appropriate
mutual releases) upon the Closing any services provided by a Seller or its Affiliates, including
any joint Tax services and joint legal services.
5.11
Excluded Contracts; Terminated Contracts.
(a)
At or prior to Closing, Sellers may terminate, assign or otherwise transfer
each Contract that is not an Assigned Facilities Agreement (each, an “Excluded Contract”),
without any Liability to Purchaser or any Project, all of which Excluded Contracts are set forth
on Schedule 5.11(a).
(b)
At or prior to Closing, Sellers shall terminate the Contracts set forth on
Schedule 5.11(b) (each, a “Terminated Contract”), without any Liability to Purchaser or any
Project.
5.12
Greenhouse Property.
(a)
Parcel Separation Approval. Sellers and SWG Holdings, as soon as
reasonably practical after the Effective Date, shall apply to the City of North Las Vegas, Nevada
for such approvals as may be necessary in order to create the Real Property as a separate legal
parcel from the Greenhouse Property (excluding the Setback Property) as depicted and described
on Schedule 5.12(a) (the “Parcel Separation Approval”). Purchaser shall reasonably cooperate in
processing the Parcel Separation Approval application, and within ninety (90) days after the
Effective Date, the Parties shall use commercially reasonable efforts to mutually agree upon
services to be provided, if any, following the Parcel Separation Approval.
(b)
Parcel Separation Tasks. At or prior to Closing, Sellers and SWG
Holdings shall, at their sole cost and expense, complete each of the tasks described on Schedule
5.12(b) (each, a “Parcel Separation Task”), in each case, to Purchaser’s reasonable satisfaction.
(c)
Parcel Separation Easement Agreement. At or prior to Closing, Sellers
and SWG Holdings shall, at their sole cost and expense, record in the real property records of the
appropriate jurisdiction(s) the Parcel Separation Easement Agreement.
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(d)
Greenhouse Property Right of First Refusal. At or prior to the Closing,
Sellers shall, at their sole cost and expense, cause SWG Holdings to record in the real property
records of the Office of the County Recorder for Clark County, Nevada the Greenhouse Property
ROFR.
5.13 Sellers’ Lender Approval. On or prior to April 28, 2014, Sellers shall seek, or
cause to be sought, the approval of this Agreement, the Ancillary Agreements and the
transactions contemplated hereby and thereby, that contains no conditions unacceptable to
Sellers, by the lenders to Sellers’ Affiliate under its credit facility (the “Sellers’ Lender
Approval”).
5.14 Additional Deliveries. On or prior to the Effective Date, Sellers shall deliver to
Purchaser, an updated Phase I Environmental Assessment with respect to the Real Property and
an air modeling report with respect to the Project.
5.15 Assignment of Warranties. On or prior to Closing, Sellers shall use commercially
reasonable efforts to assign or cause to be assigned to Purchaser the warranty rights associated
with the repair of combustion turbines number 191-324, 185-163 and 191-336 under the Master
Services Agreement, Agreement No. tct-13-MSA-6LM-004-C, between Southwest Generation
Operating Company, LLC and Transcanada Turbines Ltd., dated as of February 1, 2013.
5.16 Release of Credit Support. With respect to the item listed on Schedule 5.16 (the
“Credit Support Obligation”), Purchaser shall obtain, at or prior to the Closing, substitute credit
support arrangements in replacement for the Credit Support Obligation, to the extent such
substitute credit support arrangements are required. Purchaser shall reasonably cooperate with
Sellers in order that the applicable Seller shall be released and discharged from its obligations
under the Credit Support Obligation, pursuant to documents in form and substance reasonably
satisfactory to such Seller.
ARTICLE VI
CONDITIONS TO CLOSING
6.1
Purchaser’s Conditions Precedent. The obligations of Purchaser hereunder to
execute or deliver the items it is required to deliver pursuant to Section 2.6.1 and to consummate
the Closing are subject to the fulfillment to the reasonable satisfaction of Purchaser, at or before
the Closing, of each of the following conditions (all or any of which may be waived in whole or
in part by Purchaser in its sole discretion):
6.1.1 Representations and Warranties. Each of the representations and
warranties made by Sellers in this Agreement and qualified by materiality shall be true and
correct on and as of the Closing Date as though made on and as of the Closing Date and as so
qualified, except to the extent such representations and warranties expressly relate to an earlier
date (in which case as of such earlier date). Each of the representations and warranties made by
Sellers in this Agreement and not qualified by materiality shall be true and correct on and as of
the Closing Date as though made on and as of the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date (in which case as of such earlier
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date), except for failures to be true and correct that would not reasonably be expected to have, in
the aggregate, a Seller Material Adverse Effect.
6.1.2 Performance. Sellers shall have performed and complied in all material
respects with the agreements, covenants and obligations required by this Agreement to be so
performed or complied with by Sellers at or before the Closing.
6.1.3 Law. There shall not be in effect on the Closing Date any Law restraining,
enjoining or otherwise prohibiting or making illegal the consummation of the transactions
contemplated by this Agreement.
6.1.4 PUCN Approval; FERC Approval; HSR Act Filing. The PUCN Approval
and the FERC Approval shall have been duly obtained, made or given and shall be in full force
and effect, and all terminations or expirations of the waiting period under the HSR Act necessary
for the consummation of the transactions contemplated by this Agreement shall have occurred,
and no adverse action by the applicable Governmental Authority shall have been threatened or
instituted in connection therewith.
6.1.5 Requested Consents. The Requested Consents shall have been duly
obtained, made or given and shall be in full force and effect.
6.1.6 Deliveries. Sellers shall have executed and delivered to Purchaser the
items set forth in Section 2.6.2 of this Agreement.
6.1.7 No Seller Material Adverse Effect. No Seller Material Adverse Effect
shall have occurred and be continuing.
6.1.8 Title Insurance, Survey and Title Insurance Policy. The Title Company
shall be in a position, upon Closing, to issue the Title Insurance Policy as contemplated by
Section 5.1(e), subject only to the Permitted Encumbrances (including those Objectionable Title
and Survey Matters that are deemed to be Permitted Encumbrances as provided in Section 5.1(e),
the Permitted Liens, and the pre-printed exceptions set out in the Title Insurance Commitment).
6.1.9 Transferred Permits. The Transferred Permits required to be transferred as
of Closing, or other Permits required to be issued to Purchaser as of Closing, in each case, under
applicable Law shall have been so transferred or issued.
6.1.10 Terminated Contracts. Each of the Terminated Contracts shall have been
terminated, without Liability to Purchaser or the Projects.
6.1.11 Parcel Separation Approval. The Parcel Separation Approval shall have
been obtained.
6.1.12 Parcel Separation Tasks. Each of the Parcel Separation Tasks shall have
been completed to Purchaser’s reasonable satisfaction.
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6.1.13 Parcel Separation Easement Agreement. The Parcel Separation Easement
Agreement shall be in full force and effect and shall have been recorded in the real property
records of the appropriate jurisdiction(s).
6.1.14 Continuing Diligence Items. Purchaser shall have been satisfied, in its
reasonable discretion, with the results of its due diligence investigation regarding the Continuing
Diligence Items, which investigation shall have been completed within forty-five (45) days after
the Effective Date.
6.1.15 Combustion Turbine Repairs. Purchaser shall have received evidence
reasonably satisfactory to it that all required repairs to combustion turbines 185-163 and 191­
336, as identified in the Borescope Inspection Reports prepared by General Electric Company
dated March 18, 2014 and March 20, 2014, respectively, have been completed and the units have
been restored to serviceable condition.
6.1.16 Greenhouse Property ROFR. The Greenhouse Property ROFR shall be in
full force and effect and shall have been recorded in the real property records of the appropriate
jurisdiction(s).
6.2
Sellers’ Conditions Precedent. The obligations of each Seller hereunder to
execute or deliver the items it is required to deliver pursuant to Section 2.6.2 of this Agreement
are subject to the fulfillment, to the reasonable satisfaction of Seller at or before the Closing, of
each of the following conditions (all or any of which may be waived in whole or in part by the
applicable Seller in its sole discretion):
6.2.1 Representations and Warranties. Each of the representations and
warranties made by Purchaser in this Agreement and qualified by materiality shall be true and
correct on and as of the Closing Date as though made on and as of the Closing Date, except to
the extent such representations and warranties expressly relate to an earlier date (in which case as
of such earlier date). Each of the representations and warranties made by Purchaser in this
Agreement and not qualified by materiality shall be true and correct on and as of the Closing
Date as though made on and as of the Closing Date, except to the extent such representations and
warranties expressly relate to an earlier date (in which case as of such earlier date), except for
failures to be true and correct that would not reasonably be expected to have, in the aggregate, a
material adverse effect on Purchaser’s ability to perform its obligations hereunder.
6.2.2 Performance. Purchaser shall have performed and complied in all material
respects with the agreements, covenants and obligations required by this Agreement to be so
performed or complied with by Purchaser at or before the Closing.
6.2.3 Law. There shall not be in effect on the Closing Date any Law restraining,
enjoining or otherwise prohibiting or making illegal the consummation of the transactions
contemplated by this Agreement.
6.2.4 PUCN Approval; FERC Approval; HSR Act Filing. The PUCN Approval
and the FERC Approval shall have been duly obtained, made or given and shall be in full force
and effect, and all terminations or expirations of the waiting period imposed under the HSR Act
necessary for the consummation of the transactions contemplated by this Agreement shall have
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occurred, and no adverse action by the applicable Governmental Authority shall have been
threatened or instituted in connection therewith.
6.2.5 Requested Consents. The Requested Consents shall have been duly
obtained, made or given and shall be in full force and effect.
6.2.6 Deliveries. Purchaser shall have executed and delivered to Sellers the
items set forth in Section 2.6.1 of this Agreement and shall have paid the Purchase Price in
accordance with Section 2.2.2.
6.2.7
Parcel Separation Approval. The Parcel Separation Approval shall have
been obtained.
6.2.8 Sellers’ Lender Approval. The Sellers’ Lender Approval shall have been
obtained, made or given and shall be in full force and effect.
ARTICLE VII TERMINATION
7.1
Termination Prior to Closing. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned:
(a)
at any time before the Closing, by mutual written consent of the Parties;
(b)
at any time before the Closing, by Sellers or Purchaser upon notice to the
other Parties, in the event that any non-appealable Law becomes effective or final order is issued
restraining, enjoining or otherwise prohibiting or making illegal the consummation of the
transactions contemplated by this Agreement;
(c)
at any time before the Closing, by Purchaser or Sellers upon notice to the
other Parties, in the event that a Party receives notice from the applicable Governmental
Authority or other Person that any of the FERC Approval, the PUCN Approval or the Requested
Consents has not been obtained, or the waiting period under the HSR Act has not expired, in
each case, after the applicable request for consent or approval, filing or application, or notice has
been made in accordance with this Agreement;
(d)
at any time before the Closing as provided in Section 5.1(e) or Section 5.6;
(e)
at any time before the Closing, by Purchaser upon notice to Sellers, if (i)
there has been a breach by a Seller of any representation, warranty, covenant or agreement
contained in this Agreement which would result in a failure of, or inability of such Seller to
satisfy, any condition set forth in Section 6.1, and such breach has not been cured to Purchaser’s
reasonable satisfaction within thirty (30) days following Sellers’ receipt of notice of such breach,
or (ii) a Schedule Update is delivered to Purchaser that discloses a Seller Material Adverse Effect
has occurred, which Seller Material Adverse Effect (A) was not caused by a breach by Purchaser
of any provision of this Agreement and (B) has not been cured to Purchaser’s reasonable
satisfaction within thirty (30) days following Purchaser’s receipt of the Schedule Update;
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(f)
at any time before the Closing, by Sellers upon notice to Purchaser, if (i)
there has been a breach by Purchaser of any representation, warranty, covenant or agreement
contained in this Agreement which would result in a failure of, or inability of Purchaser to
satisfy, any condition set forth in Section 6.2, and such breach has not been cured to Sellers’
reasonable satisfaction within thirty (30) days following Purchaser’s receipt of notice of such
breach, or (ii) a Purchaser Material Adverse Effect has occurred, which Purchaser Material
Adverse Effect (A) was not caused by a breach by a Seller of any provision of this Agreement
and (B) cannot be cured to Sellers’ reasonable satisfaction within thirty (30) days following
Purchaser’s notification to Sellers thereof; or
(g)
At any time following February 28, 2015 (the “Outside Date”), (i) by
Purchaser upon notice to Sellers if the Closing shall not have occurred on or before such date and
such failure to consummate the Closing is not caused by a breach of this Agreement by
Purchaser, and (ii) by Sellers upon notice to Purchaser if the Closing shall not have occurred on
or before such date and such failure to consummate the Closing is not caused by a breach of this
Agreement by a Seller.
7.2
Effect of Termination or Breach Prior to Closing.
(a)
If this Agreement is validly terminated pursuant to Section 7.1(a), 7.1(b),
7.1(c), 7.1(d) or 7.1(g), there shall be no liability or obligation on the part of Sellers or Purchaser
(or any of their respective Related Persons), except that the provisions of Section 3.19 (Brokers),
Section 4.7 (Brokers) Section 5.3(c) (Purchaser’s Inspection Rights), ARTICLE XI (Dispute
Resolution), ARTICLE XII (Limited Remedies and Damages), Section 13.1 (Notices),
Section 13.2 (Payments), Section 13.3 (Entire Agreement), Section 13.4 (Expenses),
Section 13.5 (Public Announcements), Section 13.6 (Confidentiality), Section 13.9 (No
Construction Against Drafting Party), Section 13.10 (No Third Party Beneficiary), Section 13.11
(Headings), Section 13.12 (Invalid Provisions), Section 13.13 (Governing Law), Section 13.14
(No Assignment; Binding Effect), and this Section 7.2 shall continue to apply following any such
termination.
(b)
If this Agreement is validly terminated pursuant to Section 7.1(e) or 7.1(f)
by Purchaser or Sellers, as applicable, as a result of a breach by the non-terminating Parties, then,
subject to Section 12.2 and notwithstanding any other provision of this Agreement to the
contrary, the terminating Party shall be entitled to all rights and remedies available to it with
respect to such breach.
ARTICLE VIII
INDEMNIFICATION
8.1
Indemnification by Sellers. Subject to the limitations set forth in Section 8.4
(Limitations of Liability), Section 8.5 (Indemnification in Case of Strict Liability), Section 9.4
(Sellers’ Tax Indemnification), Section 10.1 (Survival), Section 10.2 (No Other Representations)
and ARTICLE XII (Limited Remedies and Damages) of this Agreement, if the Closing occurs,
each Seller agrees, jointly and severally, to indemnify and hold Purchaser and its Related Persons
(each, a “Purchaser Indemnified Party”), harmless from and against (and to reimburse each
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Purchaser Indemnified Party as the same are incurred for) any and all Losses incurred by any
Purchaser Indemnified Party resulting from any of the following:
(a)
any breach of a representation or warranty made by a Seller in this
Agreement;
(b)
the breach by a Seller of, or default in the performance by a Seller of, any
covenant, agreement or obligation to be performed by a Seller pursuant to this Agreement or any
of the Ancillary Agreements; or
(c)
the Excluded Assets or the Excluded Liabilities; provided, that any
Purchaser Indemnified Party shall have the right, at such party’s sole discretion, to elect to
pursue recovery for any such Losses under either Section 8.1(a) (with respect to Section 3.16
(Environmental Matters)) or this Section 8.1(c) (with respect to Section 2.1.4(a)(i)-(iii) inclusive
(Excluded Liabilities)) regardless of whether remedies for such Losses may also be available
pursuant to any provision of this Agreement other than the one so elected by Purchaser
Indemnified Party.
8.2
Indemnification by Purchaser. Subject to the limitations set forth in Section 8.4
(Limitations of Liability), Section 8.5 (Indemnification in Case of Strict Liability), Section 9.5
(Purchaser’s Tax Indemnification), Section 10.1 (Survival), Section 10.2 (No Other
Representations) and ARTICLE XII (Limited Remedies and Damages) of this Agreement, if the
Closing occurs, Purchaser hereby agrees to indemnify and hold each Seller and its Related
Persons (each, a “Seller Indemnified Party”), harmless from and against (and to reimburse each
Seller Indemnified Party as the same are incurred for) any and all Losses incurred by any Seller
Indemnified Party resulting from any of the following:
(a)
any breach of a representation or warranty made by Purchaser in this
Agreement;
(b)
the breach by Purchaser of, or default in the performance by Purchaser of,
any covenant, agreement or obligation to be performed by Purchaser pursuant to this Agreement
or any of the other agreements or instruments to which Purchaser is a party and which is being
delivered in connection with this Agreement; or
(c)
8.3
the Assumed Liabilities.
Method of Asserting Claims.
8.3.1 Notification of Claims. If any Purchaser Indemnified Party or Seller
Indemnified Party (each, an “Indemnified Party”) asserts that a Party has become obligated to the
Indemnified Party pursuant to this Agreement other than pursuant to ARTICLE IX (as so
obligated, an “Indemnifying Party”), or if any suit, action, investigation, claim or proceeding is
begun, made or instituted as a result of which the Indemnifying Party may become obligated to
the Indemnified Party hereunder, the Indemnified Party shall notify the Indemnifying Party
promptly and shall cooperate with the Indemnifying Party, at the Indemnifying Party’s expense,
to the extent reasonably necessary for the resolution of such claim or in the defense of such suit,
action or proceeding, including making available any information, documents and things in the
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possession of the Indemnified Party. Notwithstanding the foregoing notice requirement, the right
to indemnification hereunder shall not be affected by any failure to give, or delay in giving,
notice, unless, and only to the extent that, the rights and remedies of the Indemnifying Party shall
have been prejudiced as a result of such failure or delay. Any assertion by an Indemnified Party
that an Indemnifying Party is liable to the Indemnified Party for indemnification pursuant to
Section 8.1 or Section 8.2 above must be delivered to the Indemnifying Party prior to the
expiration date (if applicable) of the representation, warranty, covenant or agreement giving rise
to such indemnification obligation, as provided in Section 10.1.
8.3.2 Defense of Claims. Subject to Section 9.7, in fulfilling its obligations
under this Section 8.3, after the Indemnifying Party has provided each Indemnified Party with a
written notice of its agreement to indemnify each Indemnified Party under this Section 8.3, as
between such Indemnified Party and the Indemnifying Party, the Indemnifying Party shall have
the right to investigate, defend, settle or otherwise handle, with the aforesaid cooperation, any
claim, suit, action or proceeding brought by a third party in such manner as the Indemnifying
Party may reasonably deem appropriate; provided, that (a) the Indemnifying Party will not
consent to any settlement or entry of judgment imposing any obligations on any Indemnified
Parties, other than financial obligations for which such Person will be indemnified hereunder,
unless such Person has consented in writing to such settlement or judgment (which consent may
be given or withheld in its sole discretion), and (b) the Indemnifying Party will not consent to
any settlement or entry of judgment unless, in connection therewith, the Indemnifying Party
obtains a full and unconditional release of the Indemnified Party from all liability with respect to
such suit, action, investigation, claim or proceeding. Notwithstanding the Indemnifying Party’s
election to assume the defense or investigation of such claim, action or proceeding, the
Indemnified Party shall have the right to employ separate counsel (at its own cost except as
provided below) and to reasonably participate in the defense or investigation of such claim,
action or proceeding, which participation shall be at the expense of the Indemnifying Party, (a) if
on the advice of counsel to the Indemnified Party use of counsel of the Indemnifying Party’s
choice could reasonably be expected to give rise to a material conflict of interest, (b) if the
Indemnifying Party shall authorize the Indemnified Party to employ separate counsel at the
Indemnifying Party’s expense, or (c) if separate counsel is retained to represent the Indemnifying
Party in any action which seeks relief other than monetary damages against the Indemnified
Party to the extent such representation is related to such relief.
8.3.3 Real Property Title Claims. Notwithstanding anything to the contrary
contained in this Agreement, Purchaser shall seek recourse and make claims solely from and
against the title company issuing the Title Insurance Policy with respect to claims regarding title
to the Real Property. For the avoidance of doubt, the preceding sentence shall not affect any
claims of Purchaser pursuant to Section 8.1(a) relating to ARTICLE III.
8.4
Limitations of Liability.
8.4.1 Claim Threshold. Notwithstanding anything to the contrary contained in
this Agreement, (a) Sellers shall not have liability for their obligations under Section 8.1 until the
aggregate amount of all Losses incurred by the Purchaser Indemnified Parties equals or exceeds
of the Purchase Price (the “Claim Threshold”), in which event Sellers shall become liable
for the aggregate Losses under Section 8.1, and not just amounts in excess of the Claim
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Threshold; it being understood and agreed that the Claim Threshold shall not apply in the event
of fraud, willful misconduct or to claims for indemnification relating to Excluded Liabilities
under Sections 2.1.4(a)(iv), (v), (vii) and (viii), Excluded Assets, Section 3.1 (Existence),
Section 3.2 (Authority), Section 3.3 (Binding Agreement), Section 3.9 (Title to Purchased
Assets), Section 3.10(b) (Real Property), Section 3.19 (Brokers) or ARTICLE IX (Tax Matters)
(collectively, the “Purchaser Exceptions”), in each case for which Sellers shall become liable for
all such Losses, whether or not the Claim Threshold has been reached, and (b) Purchaser shall
have no liability for its obligations under Section 8.2 until the aggregate amount of all Losses
incurred by Sellers’ Indemnified Parties equals or exceeds the Claim Threshold, in which event
Purchaser shall become liable for the aggregate Losses under Section 8.2, and not just amounts
in excess of the Claim Threshold; it being understood and agreed that the foregoing Claim
Threshold shall not apply in the event of fraud, willful misconduct or to claims for
indemnification relating to Assumed Liabilities, Section 4.1 (Existence), Section 4.2 (Authority),
Section 4.3 (Binding Agreement), Section 4.7 (Brokers) or ARTICLE IX (Tax Matters)
(collectively, the “Sellers’ Exceptions”), in each case for which Purchaser shall become liable for
all such Losses, whether or not the Claim Threshold has been reached.
8.4.2 Cap Amount. In no event shall (a) Sellers’ aggregate liability arising out
of their indemnification obligations under Section 8.1 or otherwise in any respect of or relating to
this Agreement, exceed
of the Purchase Price; it being understood and agreed that the
foregoing limitation shall not apply in the event of fraud or willful misconduct committed by a
Seller or its Related Persons, or to claims for indemnification relating to the Purchaser
Exceptions or to any claim under Section 12.3 (Specific Performance), provided that any such
excluded indemnifiable Losses shall not be deemed to count against or otherwise reduce such
limitation on Sellers’ aggregate liability, and provided, further, that, except with respect to fraud
or willful misconduct committed by a Seller or its Related Persons, all claims for indemnification
pursuant to such sections shall not, under any circumstances, in the aggregate, exceed the
Purchase Price; and (b) Purchaser’s aggregate liability arising out of its indemnification
obligations under Section 8.2 exceed
of the Purchase Price; it being understood and
agreed that the foregoing limitation shall not apply in the event of fraud or willful misconduct
committed by Purchaser or its Related Persons, or to claims for indemnification relating to the
Sellers’ Exceptions, or to any claim under Section 12.3 (Specific Performance), provided that
any such excluded indemnifiable Losses shall not be deemed to count against or otherwise
reduce such limitation on Purchaser’s aggregate liability, and provided, further, that, except with
respect to fraud or willful misconduct committed by Purchaser or its Related Persons, all claims
for indemnification pursuant to such sections shall not, under any circumstances, in the
aggregate, exceed the Purchase Price.
8.4.3 Effect of Purchaser’s Knowledge. A Purchaser Indemnified Party’s right
to indemnification, payment, reimbursement or other remedy based on a breach by Seller of any
of its representations, warranties, covenants or obligations hereunder will be deemed to have
been waived solely to the extent that Seller can reasonably demonstrate that Purchaser had actual
knowledge of such breach prior to the Effective Date. For purposes of demonstrating
Purchaser’s “actual knowledge” in accordance with the preceding sentence, Purchaser shall be
deemed to have “actual knowledge” of a breach only if such breach is reasonably apparent from
the materials made available in writing to Purchaser or contained within the electronic data room
established by Sellers, in each case, as of April 7, 2014.
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8.4.4 Mitigation. Each Party hereto shall take all reasonable steps to mitigate its
Losses upon and after becoming aware of any event which could reasonably be expected to give
rise to any Losses.
8.4.5 Order of Indemnification Payments. Any Losses for which Sellers are
obligated to indemnify a Purchaser Indemnified Party hereunder shall be satisfied first from the
Escrow Amount and, once the Escrow Amount is exhausted, then from the Sellers or pursuant to
the Sellers’ Parent Guaranty, subject to the limitations set forth herein.
8.5
Indemnification in Case of Strict Liability.
THE INDEMNIFICATION
PROVISIONS IN ARTICLE V, THIS ARTICLE VIII AND ARTICLE IX SHALL BE
ENFORCEABLE REGARDLESS OF WHETHER THE LIABILITY IS BASED ON PAST,
PRESENT OR FUTURE ACTS, CLAIMS OR LAWS (INCLUDING ANY PAST, PRESENT
OR FUTURE ENVIRONMENTAL LAW, FRAUDULENT TRANSFER ACT,
OCCUPATIONAL SAFETY AND HEALTH LAW OR PRODUCTS LIABILITY,
SECURITIES OR OTHER LAW), AND REGARDLESS OF WHETHER ANY PERSON
(INCLUDING THE PERSON FROM WHOM INDEMNIFICATION IS SOUGHT) ALLEGES
OR PROVES SOLE, JOINT, OR CONCURRENT STRICT LIABILITY IMPOSED ON THE
PERSON SEEKING INDEMNIFICATION.
8.6
Determination of Losses. For purposes of this ARTICLE VIII and ARTICLE IX,
the amount of Losses arising out of any inaccuracy in or breach of any representations or
warranties of a Seller or Purchaser in ARTICLE III (other than Section 3.6), ARTICLE IV or
ARTICLE IX shall be calculated as if the terms “material” and “Material Adverse Effect” (and
variations thereof) were omitted from such representations and warranties.
ARTICLE IX TAX MATTERS
9.1
Representations and Warranties. Sellers represent and warrant, jointly and
severally, to Purchaser, except as set forth in Section 9.1 of Sellers’ Disclosure Schedule, that,
solely with respect to the Purchased Assets:
(a)
(i) Each Seller has timely filed or will timely file when due with the proper
Taxing Authority all income and other material Tax Returns with respect to the Purchased Assets
that are required to be filed (A) on or before the Closing Date and (B) after the Closing Date with
respect to Sellers’ operation of the Projects, the Purchased Assets and the conduct of Sellers’
businesses through the Closing Date, and has timely paid or will timely pay in full all Taxes
(whether or not due on such Tax Returns) required to be paid by such Seller (with respect to the
Purchased Assets except for Property Taxes that are the responsibility of Purchaser pursuant to
Section 9.3); and (ii) such Tax Returns were prepared or will be prepared in the manner required
by applicable Law and were or will be true and complete in all material respects at the time of
filing. With respect to the Purchased Assets, no Seller has received any notice that any Taxes
relating to any period prior to Closing are owing or delinquent that have not been paid.
(b)
No director or officer (or employee responsible for Tax matters) of a
Seller expects any Taxing Authority to assess any additional Taxes for any period for which Tax
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Returns have been filed. There is no dispute or claim concerning any Tax Liability of a Seller
either (A) claimed or raised by any authority in writing or (B) as to which any of the equity
holders, directors and officers (and employees responsible for Tax matters) of a Seller has
Knowledge based upon personal contact with any agent of such Taxing Authority.
(c)
No Seller is a party to any Tax allocation or sharing agreement.
(d)
No Seller (A) has been a member of an affiliated group filing a
consolidated federal income Tax Return, and (B) has any Liability for the Taxes of any Person
(other than such Seller) under IRS Regulation Section 1.1502-6 (or any similar provision of
applicable Law), as a transferee or successor, by contract, or otherwise.
(e)
True and complete copies of all sales and use and property Tax Returns,
relating to the Purchased Assets, and copies of all material written communications to or from
any Taxing Authority relating to the Purchased Assets, for taxable years from 2009 through 2013
for sales and use Taxes and from 2009 through 2013 for property Taxes have been made
available to Purchaser for inspection.
(f)
Since the date of its inception, each Seller has been treated either as a
disregarded entity or a partnership for United States federal income Tax purposes.
(g)
No Seller has extended or waived the application of any statute of
limitations of any jurisdiction regarding the assessment or collection of any Tax with respect to
the Purchased Assets.
(h)
There are no audits, claims, assessments, levies, administrative or judicial
proceedings pending, or to Sellers’ Knowledge, threatened, proposed or contemplated with
respect to the Purchased Assets by any Taxing Authority.
(i)
Each Seller, with respect to the Purchased Assets, 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, member or other third party.
(j)
No claim has ever been made by a Taxing Authority in a jurisdiction
where a Tax Return is not filed by, or with respect to, a Seller or the Purchased Assets, that either
such Seller (with respect to the Purchased Assets) or any of the Purchased Assets is or may be
subject to Tax in that jurisdiction.
9.2
Transfer Taxes. The Tax on transfers of real property under chapter 375 of the
Nevada Revenue and Taxation Code (“Real Property Transfer Taxes”), if any, shall be borne
fifty percent (50%) by Purchaser and fifty percent (50%) by Sellers, and any Sales Taxes with
respect to the transfer of the Purchased Assets pursuant to this Agreement shall be borne 100%
by Sellers (the Real Property Transfer Taxes and Sales Taxes being referred to herein,
collectively, as “Transfer Taxes”). Purchaser shall file all necessary documentation and Tax
Returns with respect to the Real Property Transfer Taxes and cause such Taxes, if any, to be paid
to the relevant Taxing Authorities on a timely basis. The Parties shall cooperate to comply with
all Tax Return requirements for any and all Transfer Taxes and shall provide such documentation
and take such other reasonable actions as may be necessary to minimize the amount of any
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Transfer Taxes (such as that documentation that is required to obtain the “occasional sale”
exemption from Nevada sales and use tax contemplated by NRS 372.320 and NRS. 374.325 with
respect to the transfer of the Purchased Assets pursuant to this Agreement).
9.3
Property Taxes. Real and personal property ad valorem taxes with respect to the
Purchased Assets (“Property Taxes”) for the taxable period that includes the Closing Date shall
be prorated on a daily basis to the Closing Date. Sellers shall be liable only for the portion of
such Property Taxes attributable to the portion of such taxable period ending on and including
the Closing Date. Following the Closing, Sellers and Purchaser shall cooperate and consult with
each other with respect to the determination of such Property Taxes and Sellers shall have the
right to participate (at their own expense) in any proceedings or disputes with the applicable
Taxing Authority concerning the determination of the amount of such Property Taxes (including
the determination of the value of the property with respect to which such Property Taxes are
assessed).
9.4
Sellers’ Tax Indemnification. Sellers shall, jointly and severally and without
duplication of any rights of recovery or indemnity set forth herein, indemnify and hold harmless
Purchaser from and against (a) any and all Seller Income Taxes, (b) any and all Taxes (other than
Seller Income Taxes) imposed on or with respect to the Purchased Assets or a Seller attributable
to any Pre-Closing Tax Period (“Pre-Closing Taxes”), (c) any and all Transfer Taxes for which a
Seller is responsible pursuant to Section 9.2 of this Agreement, and (d) any Taxes arising from a
breach by a Seller of its representations, warranties and covenants in this ARTICLE IX. For
purposes of determining the amount of Taxes attributable to the period deemed to end on the
Closing Date for an Overlap Period: (x) Property Taxes shall be apportioned in accordance with
Section 9.3, (y) in the case of Taxes (other than Property Taxes) imposed on a periodic basis,
such amount shall be equal to the product of such Taxes for the Overlap Period (or, in the case of
such Taxes determined on an arrears basis, the amount of such Taxes for the immediately
preceding period), multiplied by a fraction the numerator of which is the number of days in the
Pre-Closing Tax Period portion of the Overlap Period and the denominator of which is the
number of days in the entire Overlap Period; and (z) in the case of all other Taxes, shall be the
amount of such Taxes that would be payable if the Overlap Period ended on the Closing Date.
Notwithstanding anything to the contrary in this Agreement, no claim for Taxes shall be
permitted under this Article IX unless such claim is first made not later than ninety (90) days
after the expiration of the applicable statute of limitations (including extensions or waivers) with
respect to such Taxes. For the avoidance of doubt, the limitations of liability contained in
Section 8.4 shall not apply with respect to any indemnification claim under this Section 9.4.
9.5
Purchaser Tax Indemnification. Purchaser shall indemnify and hold harmless
Sellers from and against (a) any Taxes with respect to the Purchased Assets attributable to the
Post-Closing Tax Period, (b) any and all Real Property Transfer Taxes for which Purchaser is
responsible pursuant to Section 9.2 and (c) any Liability arising from a breach by Purchaser of its
covenants set forth in this ARTICLE IX. For the avoidance of doubt, the limitations of liability
contained in Section 8.4 shall not apply with respect to any indemnification claim under this
Section 9.5.
9.6
Refunds. If, after the Closing Date, Purchaser actually receives a refund or
actually utilizes a credit of any Tax attributable to a Pre-Closing Tax Period, Purchaser shall pay
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to Sellers within fifteen (15) Business Days after such receipt or utilization an amount equal to
such refund actually received or credit actually utilized (with respect to any Overlap Period, only
so much of such refund or credit as relates to the portion of the Overlap Period ending on or
before Closing Date), together with any interest actually received or actually credited thereon.
Purchaser shall take such action to obtain a refund or credit attributable to a Pre-Closing Tax
Period or to mitigate, reduce or eliminate any Taxes that could be imposed for a Pre-Closing Tax
Period (including with respect to the transactions contemplated hereby) as is reasonably
requested by Sellers. Sellers shall reimburse Purchaser for any reasonable, out-of-pocket costs
that are incurred by Purchaser in providing such assistance.
9.7
Contests. Notwithstanding Section 8.3.2, in the event Purchaser or a Seller
receives written notice of any examination, claim, settlement, proposed adjustment,
administrative or judicial proceeding or other matter (“Tax Claim”) related to any Pre-Closing
Taxes (other than entity-level Taxes, such as employment or wage Taxes or sales Taxes that are
not material in amount) or Transfer Taxes, Purchaser or such Seller, as the case may be, shall
notify the other Parties in writing as soon as reasonably practical (but in no event more than
fifteen (15) Business Days) after receipt of such notice. In the case of any Tax Claim relating to
any Pre-Closing Taxes or Transfer Taxes that, if determined adversely to a Seller would be
grounds for a claim for indemnity pursuant to Section 9.4 hereof, such Seller (at its sole cost and
expense) shall have the right to control the conduct of such Tax Claim and shall have the right to
settle such Tax Claim; provided, however, that (a) Purchaser may participate in the dispute of
such Tax Claim at its own expense, (b) such Seller shall not settle, compromise or dispose of any
Tax Claim in a manner that would reasonably be expected to adversely affect Purchaser (or any
of its Affiliates) without the consent of Purchaser, which consent shall not be unreasonably
withheld, conditioned or delayed, and (c) such Seller shall keep Purchaser reasonably informed
with respect to the commencement, status and nature of any such Tax Claim. In the case of any
Tax Claim relating to any Overlap Period Taxes, Purchaser and Sellers may each participate, at
their own expense, in the Tax Claim, and the Tax Claim shall be controlled by Purchaser or the
applicable Seller according to whichever would bear the burden of the greatest portion of the
adjustment; provided, however, that the Party controlling the Overlap Period Tax Claim (1) shall
not settle such Tax Claim without the consent of each other Party, which consent shall not be
unreasonably withheld, conditioned or delayed, and (2) shall keep each other Party timely
informed with respect to the commencement, status and nature of any such Tax Claim.
9.8
Assistance and Cooperation. After the Closing Date, each of the Sellers and
Purchaser shall (and shall cause their respective Affiliates to) (a) assist the other Parties in
preparing any Tax Returns which such other Party is responsible for preparing and filing in
accordance with the terms of this Agreement, and (b) cooperate fully in preparing for any audits
of, or disputes with any Taxing Authority regarding, any Tax Returns of Seller with respect to
the Purchased Assets.
9.9
Information. After the Closing, Sellers and Purchaser will make available to each
other as reasonably requested all information, records or documents relating to liability or
potential liability for Pre-Closing Taxes, Overlap Period Taxes and Transfer Taxes and will
preserve such information, records or documents until thirty (30) days after the expiration of the
applicable statute of limitations (including extensions or waivers thereof) with respect to the
particular Tax to which the information, records or documents relate.
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9.10 Tax Returns. Sellers shall be responsible for preparing and timely filing all Tax
Returns with the appropriate Taxing Authority with respect to the Purchased Assets relating to
Tax periods ending on or prior to the Closing Date. Purchaser shall be responsible for preparing
and filing all other Tax Returns with respect to the Purchased Assets but, to the extent such Tax
Returns relate to Taxes for which Sellers are required to indemnify Purchaser pursuant to this
Agreement then Purchase shall not file such Tax Returns without the consent of Sellers, which
consent shall not be unreasonably withheld, conditioned or delayed. The Purchaser shall not,
without the prior written consent of the Sellers (not to be unreasonably withheld, conditioned or
delayed), file, re-file or amend or cause to filed, re-filed or amended any Tax Return as to the
Purchased Assets that was due on or before the Closing Date or enter or cause to be entered into
discussions regarding any voluntary disclosure involving Taxes for any Pre-Closing Tax Period
or Overlap Period, or also for such periods, or consent to any extension or waiver of the
limitation period applicable to any claim or assessment in respect of Taxes.
9.11 Survival of Obligations. The representations, warranties and obligations of the
Parties set forth in this ARTICLE IX shall remain in effect until ninety (90) days after expiration
of the applicable statutes of limitation (giving effect to any extensions or waivers thereof)
relating to the Tax or Tax Return in question.
9.12 No Extraordinary Actions. Except with respect to the transfer of the Purchased
Assets contemplated by this Agreement, Purchaser shall not cause to be made any extraordinary
transaction or event on the Closing Date that would result in any increased Tax liability for
which the Sellers would be required to provide indemnification pursuant to this Agreement.
9.13 Adjustments to Purchase Price. The Parties hereby agree that any and all
indemnity payments made pursuant to this Agreement shall, to the maximum extent permitted by
applicable Law, be treated for all Tax purposes as an adjustment to the Purchase Price.
ARTICLE X SURVIVAL; NO OTHER REPRESENTATIONS 10.1 Survival of Representations, Warranties, Covenants and Agreements. The
representations, warranties, covenants and agreements of Sellers and Purchaser contained in this
Agreement shall survive the Closing and shall expire
from the Closing Date.
Notwithstanding the preceding sentence, (a) (i) the representations and warranties contained in
Section 3.1 (Existence), Section 3.2 (Authority), Section 3.3 (Binding Agreement), Section 3.9
(Title to Purchased Assets), Section 3.10(b) (Real Property), Section 3.19 (Brokers), Section 4.1
(Existence), Section 4.2 (Authority), Section 4.3 (Binding Agreement), and Section 4.7
(Brokers), and (ii) the covenants in Section 2.1.2 (Assignment and Assumption of Assigned
Facilities Agreements), Section 2.1.3 (Excluded Assets), Section 2.1.4(a) (Excluded Liabilities),
Section 2.1.4(b) (Assumed Liabilities), ARTICLE X (Survival, No Other Representations),
ARTICLE XI (Dispute Resolution) and ARTICLE XII (Limited Remedies and Damages), shall
survive indefinitely after the Closing, (b) the representations and warranties contained in
Section 3.16 (Environmental Matters) and Section 3.18 (Employee Matters) shall survive the
Closing and shall expire
from the Closing Date, (c) Section 2.7.2(b) (Pre-Closing
Books and Records) with respect to Retained Information, shall survive for so long as a Seller
retains the Retained Information but in no case less than
following the
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Closing, (d) the survival of representations, warranties, covenants and agreements contained in
ARTICLE IX (Tax Matters) and Section 13.6 (Confidentiality) shall be governed solely by the
terms therein, and (e) ARTICLE VIII shall survive the Closing in accordance with its terms.
10.2
No Other Representations.
(a)
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE
CONTRARY, IT IS THE EXPLICIT INTENT OF EACH PARTY HERETO, AND THE
PARTIES HEREBY AGREE, THAT NONE OF THE PARTIES OR ANY OF THEIR
AFFILIATES OR REPRESENTATIVES HAS MADE OR IS MAKING ANY
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED,
WRITTEN OR ORAL, INCLUDING ANY IMPLIED REPRESENTATION OR WARRANTY
INCLUDING AS TO THE CONDITION, MERCHANTABILITY, USAGE, SUITABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO ANY OF THE
PURCHASED ASSETS, OR ANY PART THEREOF, EXCEPT THOSE EXPRESS
REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE III, ARTICLE IV,
AND ARTICLE IX, AS APPLICABLE TO A PARTY. IN PARTICULAR, AND WITHOUT
IN ANY WAY LIMITING THE FOREGOING, (I) SELLERS MAKE NO REPRESENTATION
OR WARRANTY REGARDING ANY ENVIRONMENTAL MATTERS EXCEPT AS
EXPRESSLY SET FORTH IN SECTION 3.16, AND (II) SELLERS MAKE NO
REPRESENTATION OR WARRANTY TO PURCHASER WITH RESPECT TO THE
PROSPECTS, ANY FINANCIAL PROJECTIONS OR FORECASTS RELATING TO THE
PURCHASED ASSETS; PROVIDED, THAT THIS SENTENCE SHALL NOT LIMIT THE
EXPRESS REPRESENTATIONS AND WARRANTIES OF SELLERS CONTAINED IN
ARTICLE III AND ARTICLE IX.
(b)
EXCEPT FOR THOSE EXPRESS REPRESENTATIONS AND
WARRANTIES CONTAINED IN ARTICLE III AND ARTICLE IX, THE PURCHASED
ASSETS ARE BEING TRANSFERRED “AS IS, WHERE IS, WITH ALL FAULTS.”
(c)
Notwithstanding anything to the contrary contained in this Agreement, and
except in connection with the Sellers’ Parent Guaranty, no Related Person of a Seller will have
any personal liability to Purchaser or any other Person as a result of this Agreement or the breach
of any representation, warranty, covenant or agreement of such Seller contained in this
Agreement and no Related Person of Purchaser will have any personal liability to a Seller or any
other Person as a result of this Agreement or the breach of any representation, warranty,
covenant or agreement of Purchaser contained in this Agreement.
ARTICLE XI
DISPUTE RESOLUTION
11.1 Dispute Resolution. Any dispute or claim arising under this Agreement which is
not resolved in the ordinary course of business shall be referred to a panel consisting of a senior
executive (President or a Vice President) of Purchaser and of each Seller, with authority to
decide or resolve the matter in dispute, for review and resolution. Such senior executives shall
meet and in good faith attempt to resolve the dispute within thirty (30) days. If the Parties are
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unable to resolve a dispute pursuant to this Section 11.1, such dispute shall be resolved in
accordance with Section 11.2.
11.2 Venue. Each of the Parties hereby irrevocably and unconditionally submits to the
exclusive jurisdiction of any court of the State of Nevada and any federal court located in Clark
County, Nevada (or if no such court will accept jurisdiction, in any state or federal court of
general jurisdiction in the State of Nevada, or if no such court will accept jurisdiction, in any
court of competent jurisdiction in the United States) with respect to any proceeding relating to
this Agreement. Further, each of the Parties hereby irrevocably and unconditionally waives any
objection or defense that it may have based on improper venue or forum non conveniens to the
conduct of any such proceeding in any such courts. The Parties agree that any or all of them may
file a copy of this paragraph with any court as written evidence of the knowing, voluntary and
bargained agreement among the Parties irrevocably to waive any objections to venue or to
convenience of forum. Each of the Parties (on behalf of itself and its Affiliates) agrees that a
final judgment in any such action or proceeding will be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by applicable Law.
11.3 Waiver of Trial by Jury. TO THE FULLEST EXTENT PERMITTED BY LAW,
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY FURTHER
WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS
BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE
OR HAS NOT BEEN WAIVED.
ARTICLE XII LIMITED REMEDIES AND DAMAGES 12.1 Exclusive Remedies. EXCEPT FOR CLAIMS ARISING UNDER ARTICLE II
AND SECTION 5.6 RELATED TO PURCHASE PRICE ADJUSTMENTS, AND CLAIMS
FOR FRAUD OR WILLFUL MISCONDUCT WITH RESPECT TO A PARTY IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
THE EXPRESS REMEDIES SET FORTH IN SECTION 7.2(b) AND IN SECTION 12.3, AND
THE INDEMNITIES SET FORTH IN ARTICLES V, VIII AND IX, ARE THE SOLE AND
EXCLUSIVE REMEDIES FOR A PARTY UNDER OR RELATING TO THIS AGREEMENT,
WHETHER BASED ON STATUTE, IN TORT, COMMON LAW, STRICT LIABILITY,
CONTRACT OR OTHERWISE, AND ALL OTHER REMEDIES OR DAMAGES AT LAW
OR IN EQUITY ARE HEREBY WAIVED BY EACH PARTY. NOTWITHSTANDING THE
FOREGOING, NOTHING IN THIS ARTICLE XII SHALL LIMIT ANY PERSON’S RIGHT
TO SEEK AND OBTAIN ANY EQUITABLE RELIEF TO WHICH ANY PERSON SHALL
BE ENTITLED, OR TO SEEK ANY REMEDY ON ACCOUNT OF ANY PERSON’S
FRAUDULENT, CRIMINAL OR WILLFUL MISCONDUCT, OR ANY PERSON’S RIGHT
TO SEEK AND OBTAIN EQUITABLE OR MONETARY RELIEF PRIOR TO CLOSING.
12.2 Limitation of Liability. NOTWITHSTANDING ANY PROVISION OF THIS
AGREEMENT, NO PARTY SHALL, UNDER ANY CIRCUMSTANCES, BE LIABLE FOR
SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR EXEMPLARY
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DAMAGES, LOST PROFITS OR LOSS OF REVENUE, WHETHER BY STATUTE, IN
TORT, COMMON LAW, STRICT LIABILITY OR CONTRACT OR OTHERWISE. THE
LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES
SHALL BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO,
INCLUDING THE NEGLIGENCE, GROSS NEGLIGENCE, STRICT LIABILITY OR OTHER
FAULT OF ANY PARTY, AND WHETHER LIABILITY IS BASED ON CONTRACT,
TORT, STATUTE, COMMON LAW, STRICT LIABILITY OR OTHERWISE (“NON­
REIMBURSABLE DAMAGES”); PROVIDED, HOWEVER, THAT A PARTY SHALL BE
LIABLE FOR, AND NON-REIMBURSABLE DAMAGES SHALL NOT INCLUDE, ALL
SUCH DAMAGES ARISING FROM THIRD PARTY CLAIMS FOR WHICH AN
INDEMNIFIED PARTY SEEKS INDEMNIFICATION. THIS PROVISION SHALL SURVIVE
ANY TERMINATION, CANCELLATION OR SUSPENSION OF THIS AGREEMENT.
12.3 Specific Performance. EACH PARTY AGREES THAT DAMAGE REMEDIES
SET FORTH IN THIS AGREEMENT MAY BE DIFFICULT OR IMPOSSIBLE TO
CALCULATE OR OTHERWISE INADEQUATE TO PROTECT ITS INTERESTS AND
THAT IRREPARABLE DAMAGE MAY OCCUR IN THE EVENT THAT PROVISIONS OF
THIS AGREEMENT ARE NOT PERFORMED BY THE PARTIES IN ACCORDANCE WITH
THE SPECIFIC TERMS OF THIS AGREEMENT. ANY PARTY MAY SEEK TO REQUIRE
THE PERFORMANCE OF ANY OTHER PARTY’S OBLIGATIONS UNDER THIS
AGREEMENT THROUGH AN ORDER OF SPECIFIC PERFORMANCE RENDERED BY
THE FEDERAL COURT IN THE STATE OF NEVADA OR THE STATE COURTS IN THE
STATE OF NEVADA AS PROVIDED IN SECTION 11.2 OF THIS AGREEMENT.
ARTICLE XIII MISCELLANEOUS
13.1
Notices.
13.1.1 Notice Addresses. Unless this Agreement specifically requires otherwise,
any notice, demand or request provided for in this Agreement, or served, given or made in
connection with it, shall be in writing and shall be deemed properly served, given or made if
delivered in person or sent by fax, by registered or certified mail, postage prepaid, or by a
nationally recognized overnight courier service that provides a receipt of delivery, in each case,
to a Party at its address specified below:
If to Purchaser, to:
Nevada Power Company d/b/a NV Energy
6226 W. Sahara Avenue
Las Vegas, Nevada 89146
Facsimile No.: 702-402-2455
Email: [email protected]
Attn: Vincent Burton, Manager, Energy Supply Contract Management, M/S 26A
with a copy to:
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NV Energy
6226 W. Sahara Avenue
Las Vegas, Nevada 89146
Facsimile No.: 702-402-2069
Attn: Douglas A. Cannon, Senior Vice President, General Counsel & Corporate Secretary
Chief Compliance Officer
If to Sellers, to:
Las Vegas Cogeneration Limited Partnership
c/o Southwest Generation Operating Company, LLC
1200 17th Street, Suite 700
Denver, CO 80202
Facsimile No.: 303.928.4699
Attn: Maurice Klefeker
and
Las Vegas Cogeneration II, L.L.C.
c/o Southwest Generation Operating Company, LLC
1200 17th Street, Suite 700
Denver, CO 80202
Facsimile No.: 303.928.4699
Attn: Maurice Klefeker
with a copy to:
Southwest Generation Operating Company, LLC
1200 17th Street, Suite 700
Denver, CO 80202
Facsimile No.: 303.928.4699
Attn: Robert Witwer
with a copy to (which shall not constitute notice):
Morgan, Lewis & Bockius LLP
300 South Grand Avenue, Suite 2200
Los Angeles, CA 90071
Facsimile No.: 213.612.2501
Attn: Richard A. Shortz
13.1.2 Effective Time. Notice given by personal delivery, mail or overnight
courier pursuant to this Section 13.1.2 shall be effective upon physical receipt. Notice given by
fax pursuant to this Section 13.1.2 shall be effective as of (a) the date of confirmed delivery if
delivered before 5:00 p.m. local time on any Business Day, or (b) the next succeeding Business
Day if confirmed delivery is after 5:00 p.m. local time on any Business Day or during any nonBusiness Day.
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13.2 Payments. Except for Payments due at Closing, if a Party is required to make any
payment under this Agreement on a day other than a Business Day, the date of payment shall be
extended to the next Business Day. In the event a Party does not make any payment required or
approved by the Parties under this Agreement on or before the due date, interest on the unpaid
amount shall be due and paid at the Default Rate from the date such payment is due until the date
such payment is made in full. Any payment of such interest at the Default Rate pursuant to this
Agreement shall not excuse or cure any default hereunder. All payments shall first be applied to
the payment of accrued but unpaid interest.
13.3 Entire Agreement.
This Agreement, the Ancillary Agreements and the
Confidentiality Agreement, including, in each case, all schedules and exhibits thereto, supersede
all prior discussions and agreements between the Parties with respect to the subject matter hereof
and thereof, and contain the sole and entire agreement between the Parties hereto with respect to
the subject matter hereof and thereof.
13.4 Expenses. Except as otherwise expressly provided in this Agreement, whether or
not the transactions contemplated hereby are consummated, each Party will pay its own costs and
expenses incurred in connection with the negotiation, execution and performance under this
Agreement and the Ancillary Agreements and the transactions contemplated hereby and thereby.
13.5 Public Announcements. Prior to the Closing, Sellers and Purchaser will not issue
or make any press releases or similar public announcements concerning the transactions
contemplated hereby without the written consent of the other. If a Party is unable to obtain the
approval of its press release or similar public statement from the other Parties and such press
release or similar public statement is, in the opinion of legal counsel to such Party, required by
Law in order to discharge such Party’s disclosure obligations, then such Party may make or issue
the legally required press release or similar public statement and promptly furnish the other
Parties with a copy thereof. Sellers and Purchaser will also obtain the other Parties’ prior written
approval of any press release to be issued immediately following the execution of this
Agreement or the Closing announcing either the execution of this Agreement or the
consummation of the transactions contemplated by this Agreement.
13.6 Confidentiality. Purchaser hereby agrees that it shall be bound in all respects by
the Confidentiality Agreement. As between Purchaser and Sellers, the Confidentiality
Agreement shall continue to be in full force and effect for the term set forth therein
notwithstanding the execution and delivery of this Agreement or the occurrence of the Closing,
except that following the Closing the Confidentiality Agreement shall not apply to information
concerning any of the Purchased Assets which is available to Purchaser as owner of the
Purchased Assets after the Closing.
13.7
Waivers.
13.7.1 Grant of Waivers. Any term or condition of this Agreement may be
waived at any time by the Party that is entitled to the benefit thereof, but no such waiver shall be
effective unless set forth in a written instrument duly executed by or on behalf of the Party
waiving such term or condition. No waiver by any Party of any term or condition of this
Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the
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same or any other term or condition of this Agreement on any future occasion. All remedies,
either under this Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.
13.7.2 Exercise of Remedies. No failure or delay of any Party, in any one or
more instances, (a) in exercising any power, right or remedy (other than failure or unreasonable
delay in giving notice of default) under this Agreement or (b) in insisting upon the strict
performance by the other Parties of such other Parties’ covenants, obligations or agreements
under this Agreement, shall operate as a waiver, discharge or invalidation thereof, nor shall any
single or partial exercise of any such right, power or remedy or insistence on strict performance,
or any abandonment or discontinuance of steps to enforce such a right, power or remedy or to
enforce strict performance, preclude any other or future exercise thereof or insistence thereupon
or the exercise of any other right, power or remedy. Subject to Section 10.1, the covenants,
obligations and agreements of a defaulting Party and the rights and remedies of the other Parties
upon a default shall continue and remain in full force and effect with respect to any subsequent
breach, act or omission.
13.8 Amendment. This Agreement may be amended, supplemented or modified only
by a written instrument duly executed by the Parties.
13.9 No Construction Against Drafting Party. The language used in this Agreement is
the product of the Parties’ efforts and each Party hereby irrevocably waives the benefits of any
rule of contract construction that disfavors the drafter of a contract or the drafter of specific
words in a contract.
13.10 No Third Party Beneficiary. The terms and provisions of this Agreement are
intended solely for the benefit of each Party hereto and their respective successors or permitted
assigns, and it is not the intention of the Parties to confer third-party beneficiary rights upon any
other Person.
13.11 Headings. The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
13.12 Invalid Provisions. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under any present or future Law, and if the rights or obligations of any
Party hereto under this Agreement will not be materially and adversely affected thereby, (a) such
provision will be fully severable, (b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining
provisions of this Agreement will remain in full force and effect and will not be affected by the
illegal, invalid or unenforceable provision or by its severance herefrom and (d) Purchaser and
Sellers shall negotiate an equitable adjustment in the provisions of the Agreement with a view
toward effecting the purposes of the Agreement, and the validity and enforceability of the
remaining provisions, or portions or applications thereof, shall not be affected thereby.
13.13 Governing Law.
THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL BE GOVERNED BY, ENFORCED AND
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INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD APPLY
THE LAWS OF ANOTHER JURISDICTION.
13.14 No Assignment; Binding Effect. Neither this Agreement nor any right, interest or
obligation hereunder may be assigned by any Party hereto without the prior written consent of
the other Parties hereto and any attempt to do so will be void, except for assignments and
transfers by operation of Law. This Agreement is binding upon, inures to the benefit of and is
enforceable by the Parties and their respective successors and permitted assigns. Notwithstanding
the foregoing, the Sellers shall be permitted to assign this Agreement and all Ancillary
Agreements as collateral to their financing providers in connection with any financing.
13.15 Counterparts. This Agreement may be executed in any number of counterparts,
each of which will be deemed an original, but all of which together will constitute one and the
same instrument.
13.16 Time of Essence. Time is of the essence with respect to all obligations of the
Parties hereunder.
[Signature page follows.]
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EXHIBIT A
FORM OF SELLERS’ PARENT GUARANTY
[see attached]
Exhibit A
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SELLERS’ PARENT GUARANTY
This Guaranty (“Guaranty”), dated as of [___________], 20[14] (the “Effective Date”), is
entered into by Southwest Generation Holding Company II, LLC, a Delaware limited liability
company (“Guarantor”), in favor of Nevada Power Company d/b/a NV Energy, a Nevada
corporation (“Beneficiary”).
1.
Guaranty. For the value received and to induce the Beneficiary to enter into transactions
with Las Vegas Cogeneration Limited Partnership, a Nevada limited partnership, and Las Vegas
Cogeneration II, L.L.C., a Delaware limited liability company, each a subsidiary of the Guarantor
(the “Sellers”), the Guarantor unconditionally and irrevocably guarantees to the Beneficiary, as
primary obligor and not merely as surety, the complete, due and punctual payment and performance
of all present and future obligations of the Sellers of any kind, whether, due or to become due,
secured or unsecured, absolute or contingent, joint or several, created, incurred or arising under or
pursuant to that certain Asset Purchase Agreement, dated as of April 30, 2014 (the “Asset Purchase
Agreement”) between the Sellers and the Beneficiary, including, without limitation, the
performance by the Sellers of their indemnification obligations as set forth in Article VIII and
Article IX of the Asset Purchase Agreement, including, without limitation, the payment of any
amounts owed by the Sellers to Purchaser Indemnified Parties pursuant to the Asset Purchase
Agreement (the “Guaranteed Obligations”); provided, however, that in no event shall the
maximum liability of the Guarantor under this Guaranty for the Guaranteed Obligations, in the
aggregate, exceed
(the
“Cap”). Capitalized terms used herein which are not otherwise defined shall have the meanings
associated with them in the Asset Purchase Agreement.
2.
Nature of Guaranty.
(a)
This Guaranty is an absolute, unconditional, continuing and irrevocable guarantee of
the full and punctual payment (and not merely collectability) of the Guaranteed Obligations up to the
Cap and is in no way conditioned on or contingent upon any attempt to enforce in whole or in part
the Guaranteed Obligations or related liabilities of the Sellers under the Asset Purchase Agreement.
In furtherance and not in limitation of the foregoing, the Guarantor agrees that the Beneficiary may,
at any time and from time to time, and without notice to the Guarantor, make any agreement with the
Sellers or with any other person or entity liable on or in respect of any of the Guaranteed Obligations
or providing collateral as security for any of the Guaranteed Obligations, for the extension, renewal,
payment, compromise, discharge or release of the Guaranteed Obligations or any collateral (in whole
or in part), or for any modification or amendment of the terms thereof or of any instrument or
agreement evidencing all or any portion of the Guaranteed Obligations or the provision of collateral,
all without in any way impairing, releasing, discharging or otherwise affecting the obligations of the
Guarantor under this Guaranty. The Guarantor covenants that, except for the requirement of
exhaustion of the Escrow Amount as provided in the Asset Purchase Agreement, this Guaranty shall
not be conditional or contingent upon (and waives any right to require) the pursuit or exhaustion by
the Beneficiary of whatever remedies it may have against the Sellers or any other person or entity
and waives any right to enforce any remedy which the Beneficiary now has or may hereafter have
against any person or entity, including, without limitation, the Sellers, and waives any benefit of and
any right to participate in any security now or hereafter held by the Beneficiary. Further, the
Guarantor consents to the taking of, or failure to take, any action by the Beneficiary, or its
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employees, agents or representatives, which might in any manner or to any extent vary the risks of
the Guarantor under this Guaranty or which, but for this provision, might operate as a discharge of
the Guarantor. To the extent permitted by applicable law, the Guarantor waives the benefit of all
provisions of law which are or might be in conflict with the terms of this Guaranty.
(b)
For any Losses for which the Sellers are obligated to indemnify a Purchaser
Indemnified Party, such Purchaser Indemnified Party shall seek reimbursement for such Losses from
the Escrow Amount first. Once the Escrow Amount is exhausted, the Guarantor shall forthwith pay
such Guaranteed Obligations in immediately available funds to the extent not paid by the Sellers, up
to the Cap. The Beneficiary shall not be obligated to file any claim relating to the Guaranteed
Obligations owing to it in the event that the Sellers become subject to a bankruptcy, reorganization
or similar proceeding and the failure of the Beneficiary to so file shall not affect the Guarantor’s
obligations hereunder. The Guarantor reserves the right to assert defenses which the Sellers may
have to payment of any of the Guaranteed Obligations (including, inter alia, default by the
Beneficiary under the Asset Purchase Agreement), other than defenses arising from the bankruptcy
or insolvency of the Sellers and other defenses expressly waived hereby.
3.
Consents, Waivers and Renewals. The Guarantor agrees that the Beneficiary and the
Sellers may, without the consent of or prior notice to the Guarantor, mutually agree to modify the
Guaranteed Obligations or any agreement between the Beneficiary and the Sellers (including the
Asset Purchase Agreement), without in any way impairing or affecting this Guaranty. The
Guarantor hereby unconditionally waives (a) notice of acceptance hereof, (b) notice of any action
taken or omitted to be taken by the Beneficiary in reliance hereon, (c) any requirement that the
Beneficiary be diligent or prompt in making demands hereunder or giving notice to Guarantor of any
default by the Sellers, subject to any applicable statutes of limitation, (d) except for the requirement
of exhaustion of the Escrow Amount as provided in the Asset Purchase Agreement, any requirement
that the Beneficiary exhaust any right, power or remedy or proceed against the Sellers under the
Asset Purchase Agreement or any other agreement or instrument referred to therein, or against any
other person under any other guaranty of any of the Guaranteed Obligations or any security provided
in connection with the Asset Purchase Agreement, and (e) any event, occurrence or other
circumstance which might otherwise constitute a legal or equitable discharge of a surety, including
promptness, diligence, notice of acceptance and notice of any default under the Asset Purchase
Agreement, notice of presentment, demand, protest, and notice of dishonor or nonpayment, notice of
acceleration or other demand and any other notice with respect to this Guaranty. Notwithstanding the
foregoing, in the event the Beneficiary intends to call upon or exercise its rights under this Guaranty,
it shall not do so until it has provided written notice of such exercise or call to the Sellers and the
Guarantor at the addresses provided for in Section 10 below.
4.
Reinstatement. Notwithstanding anything in this Guaranty to the contrary, this Guaranty
shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any
portion of the Guaranteed Obligations is revoked, terminated, rescinded or reduced or must
otherwise be restored or returned whether upon the insolvency, bankruptcy, reorganization,
liquidation, sale or other disposition of all or substantially all of the assets of the Sellers, the
Guarantor or any other person or entity, or otherwise, as if such payment had not been made and
whether or not the Beneficiary is in possession of or has released this Guaranty and regardless of any
prior revocation, rescission, termination or reduction.
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5.
Subrogation. The Guarantor shall not exercise, and hereby irrevocably waives and
relinquishes, any right of subrogation, contribution or similar rights with respect to any payments it
makes under this Guaranty against the Sellers until all of the Guaranteed Obligations and any and all
amounts payable under this Guaranty are indefeasibly paid and performed in full.
6.
No Setoff or Deductions. All payments by the Guarantor hereunder shall be paid in full,
without setoff or counterclaim or any deduction or withholding of any kind whatsoever.
7.
Expenses. The Guarantor shall pay on demand all out-of-pocket expenses (including
reasonable attorneys’ fees and expenses and the reasonable allocated cost and disbursements of
internal legal counsel) in any way relating to the enforcement or protection of the Beneficiary’s
rights under the Asset Purchase Agreement and/or this Guaranty. The obligations of the Guarantor
under the preceding sentence shall survive the termination of this Guaranty.
8.
Governing Law. This Guaranty, which is binding on the Guarantor’s successors and
assigns, is a Guaranty of payment and not of collection and shall be construed in accordance with the
laws of the State of New York, without regard to its conflicts of law provisions that would apply the
laws of any other jurisdiction, other than Section 5-1401 of the General Obligations Law of the State
of New York. The state and federal courts located in New York County, New York, will have
exclusive jurisdiction over any case or controversy arising from or relating to this Agreement.
9.
Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF
THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT. EACH PARTY FURTHER WAIVES ANY RIGHT
TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH
ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED.
10.
Notices. Any notice, request, demand, waiver, consent, approval or other communication
which is required or permitted hereunder shall be in writing and shall be deemed given (a) on the
date delivered personally, (b) on the date delivered by a private courier, (c) on the date sent by
facsimile, with confirmation of transmission, if sent during normal business hours of the recipient, if
not, then on the next Business Day, or (d) on the fifth day after the date mailed, by certified or
registered mail, return receipt requested, postage prepaid. Such communications, to be valid, must
be addressed as follows:
If to Beneficiary:
Nevada Power Company d/b/a NV Energy
6226 W. Sahara Avenue
Las Vegas, Nevada 89146
Facsimile No.: 702-402-2455
Email: [email protected]
Attn: Vincent Burton, Manager, Energy Supply Contract
Management, M/S 26A
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Copy to:
NV Energy
6226 West Sahara Avenue
Las Vegas, NV 89146
Facsimile No.: 702-402-2069
Attn: Douglas A. Cannon, Senior Vice President
General Counsel & Corporate Secretary
Chief Compliance Officer If to Guarantor:
Southwest Generation Holding Company II, LLC
1200 17th Street, Suite 700
Denver, CO 80202
Facsimile No.: 303.928.4699
Attn: Maurice Klefeker
Copy to:
Southwest Generation Operating Company, LLC
1200 17th Street, Suite 700
Denver, CO 80202
Facsimile No.: 303.928.4699
Attn: Robert Witwer, General Counsel
11.
Representations and Warranties. Guarantor represents and warrants that:
(a)
it is a limited liability company duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the full limited liability company power, authority
and legal right to execute, deliver and perform its obligations under this Guaranty;
(b)
the execution, delivery and performance by the Guarantor of this Guaranty have been
duly authorized by all necessary limited liability company action on its part, and do not violate,
contravene, conflict with or result in a breach of the Guarantor’s organizational documents or any
applicable law or material contract or agreement applicable to or binding on the Guarantor or its
assets or properties;
(c)
no authorization, approval, consent or order of, or registration or filing with, any court
or other governmental body having jurisdiction over Guarantor, and no consent of any other person
or entity (including any creditor of the Guarantor), is required on the part of Guarantor for the
execution and delivery and the performance by Guarantor of this Guaranty, other than such
authorization, approval, or consent that has already been obtained;
(d)
this Guaranty, when executed and delivered, will constitute a valid and legally
binding agreement of Guarantor enforceable against Guarantor , except as the enforceability of this
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Guaranty may be limited by the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and by general principles of equity as
they apply to the Guarantor;
(e)
the Guarantor is solvent and there has been no: (i) assignment made for the benefit of
the creditors of the Guarantor; (ii) appointment of a receiver for the Guarantor or for the property of
the Guarantor; or (iii) bankruptcy, reorganization, or liquidation proceeding instituted by or against
the Guarantor;
(f)
the individual signing this Guaranty below is authorized to bind the Guarantor to its
obligations under this Guaranty; and
(g)
by virtue of its relationship with the Sellers, the execution, delivery and performance
by the Guarantor of this Guaranty is for the direct benefit of the Guarantor and the Guarantor has
received adequate consideration and reasonably equivalent value for this Guaranty.
12.
Termination. This Guaranty shall terminate without any further action of either Guarantor
or Beneficiary upon the later to occur of (a)
after the Effective Date (or if such
day is not a Business Day, on the first Business Day immediately following) and (b) the date on
which all claims asserted by a Purchaser Indemnified Party against one or both Sellers on or before
the
anniversary of the Effective Date in accordance with the terms of the Asset
Purchase Agreement have been paid or otherwise fully resolved in accordance with the terms of the
Asset Purchase Agreement.
13.
Miscellaneous.
(a)
Neither party may assign any of its rights or delegate any of its performance
obligations hereunder with the prior written approval of the other party. This Guaranty shall be
binding upon Guarantor, its permitted successors and assigns, and shall inure to the benefit of and be
enforceable by Beneficiary and its permitted successors and assigns.
(b)
The Guaranty embodies the entire agreement and understanding between Guarantor
and Beneficiary and supersedes all prior agreements and understandings relating to the subject
matter hereof.
(c)
All agreements, representations and warranties contained herein are made as of the
date of this Guaranty and shall survive for the term of this Guaranty but not otherwise.
(d)
If any provision of this Guaranty or any application thereof shall be invalid or
unenforceable, the remainder of this Guaranty and any other application of such provision shall not
be affected thereby.
(e)
Nothing in this Guaranty or any other document referred to herein is intended to
waive any rights not specifically waived in said documents nor is it intended to enlarge or modify the
obligations or duties of Beneficiary.
(f)
Neither this Guaranty nor any provision hereof may be changed, waived or
discharged or terminated except with the written consent of the Guarantor and Beneficiary.
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(g)
No failure by the Beneficiary to exercise, and no delay in exercising, any right,
remedy or power hereunder shall operate as a waiver thereof; nor shall any single or partial exercise
of any right, remedy or power hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy or power. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law or in equity.
(h)
The headings in this Guaranty are for purposes of reference only, and shall not affect
the meaning hereof.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date first
written above.
SOUTHWEST GENERATION HOLDING COMPANY II, LLC
By:
_____________________________
Name: _____________________________
Title: _____________________________
Accepted:
NEVADA POWER COMPANY D/B/A NV ENERGY
By:
_____________________________
Name: _____________________________
Title: _____________________________
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EXHIBIT B
FORM OF BILL OF SALE
(LV Cogen I)
BILL OF SALE
This BILL OF SALE (this “Bill of Sale”) is made and entered into effective as of
[_______], 20[__] (the “Effective Date”), by LAS VEGAS COGENERATION LIMITED
PARTNERSHIP, a Nevada limited partnership (“Seller”), in favor of and for the benefit of
NEVADA POWER COMPANY d/b/a NV ENERGY, a Nevada corporation (“Purchaser”).
Seller and Purchaser are sometimes referred to herein individually as a “Party” and collectively
as the “Parties.” Unless otherwise specifically defined in this Bill of Sale, capitalized terms used
but not defined in this Bill of Sale shall have the meanings given to such terms in the Asset
Purchase Agreement (defined below).
RECITALS
WHEREAS, Seller and Las Vegas Cogeneration II, L.L.C. (collectively, the “Selling
Entities”), and Purchaser have entered into an Asset Purchase Agreement dated as of April 30,
2014 (the “Asset Purchase Agreement”), pursuant to which, among other things, Selling Entities
have agreed to sell, assign and transfer to Purchaser the Purchased Assets, and Purchaser has
agreed to purchase and accept from Selling Entities the Purchased Assets, and to assume the
Assumed Liabilities, on the terms and subject to the conditions set forth in the Asset Purchase
Agreement; and
WHEREAS, the execution and delivery of this Bill of Sale by Seller and Purchaser is a
condition to the obligations of the Parties to complete the transactions contemplated by the Asset
Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual representations,
warranties, covenants and agreements set forth in this Bill of Sale and in the Asset Purchase
Agreement, and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows:
1.
Sale of Assets to Purchaser. Seller hereby sells, assigns, transfers, grants,
conveys and delivers to Purchaser and its successors and assigns forever all of Seller’s right, title
and interest in and to all personal property and fixtures comprising the LV Cogen I Project
(collectively, the “Personal Property”), which Personal Property includes, without limitation, the
LV Cogen I Facilities and all of its Improvements, Fixtures and Equipment, Stores and Inventory
and Books and Records, free and clear of all Liens (other than Permitted Liens). The Personal
Property does not include any Excluded Assets.
Exhibit B
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2.
Further Assurances. At any time from and after the date of this Bill of Sale, at
either Party’s request and without further consideration, the other Party shall execute and deliver
to such Party such other instruments of sale, transfer, conveyance, assignment and confirmation,
provide such materials and information, and take such other actions as may be required to carry
out the provisions of this Bill of Sale and complete and make effective the transactions
contemplated by this Bill of Sale.
3.
Miscellaneous.
(a)
Interpretation. Nothing in this Bill of Sale, whether express or implied, is
intended to or shall be construed to modify, expand or limit in any way the terms of the Asset
Purchase Agreement. To the extent that any provision of this instrument conflicts or is
inconsistent with the terms of the Asset Purchase Agreement, the Asset Purchase Agreement will
govern.
(b)
Amendment. This Bill of Sale may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each Party.
(c)
No Third Party Beneficiary. The terms and provisions of this Bill of Sale
are intended solely for the benefit of each Party and their respective successors or permitted
assigns, and it is not the intention of the Parties to confer third-party beneficiary rights upon any
other Person.
(d)
Headings. The headings used in this Bill of Sale have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
(e)
Governing Law. THIS BILL OF SALE AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL BE GOVERNED BY, ENFORCED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD APPLY
THE LAWS OF ANOTHER JURISDICTION.
(f)
Submission to Jurisdiction; Venue. The Parties hereby irrevocably submit
to the jurisdiction of the federal or state courts located in Clark County, Nevada over any dispute
arising out of or relating to this Bill of Sale or any of the transactions contemplated hereby and
each Party irrevocably agrees that all claims in respect of such dispute or proceeding shall be
heard and determined in such court. Each Party irrevocably waives, to the fullest extent
permitted by applicable Law, any objection which it may now or hereafter have to the laying of
venue of any such dispute brought in such court or any defense of inconvenient forum.
(g)
Waiver of Trial by Jury. TO THE FULLEST EXTENT PERMITTED BY
LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY
FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY
Exhibit B
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TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED.
(h)
Binding Effect. This Bill of Sale is binding upon, inures to the benefit of
and is enforceable by the Parties and their respective successors and permitted assigns.
(i)
Counterparts. This Bill of Sale may be executed in any number of
counterparts, each of which will be deemed an original, but all of which together will constitute
one and the same instrument.
[Signature page follows.]
Exhibit B
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IN WITNESS WHEREOF, each of the Parties has caused this Bill of Sale to be executed
by its duly authorized representative as of the date first above written.
LAS VEGAS COGENERATION LIMITED
PARTNERSHIP, a Nevada limited partnership
By: Desert Arc I, LLC, its General Partner
By: _______________________
Name: _____________________
Title: ______________________
NEVADA POWER COMPANY d/b/a NV ENERGY,
a Nevada corporation
By: ___________________________
Name: _________________________
Title: __________________________
Exhibit B
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FORM OF BILL OF SALE
(LV Cogen II)
BILL OF SALE
This BILL OF SALE (this “Bill of Sale”) is made and entered into effective as of
[_______], 20[__] (the “Effective Date”), by LAS VEGAS COGENERATION II, L.L.C., a
Delaware limited liability company (“Seller”), in favor of and for the benefit of NEVADA
POWER COMPANY d/b/a NV ENERGY, a Nevada corporation (“Purchaser”). Seller and
Purchaser are sometimes referred to herein individually as a “Party” and collectively as the
“Parties.” Unless otherwise specifically defined in this Bill of Sale, capitalized terms used but
not defined in this Bill of Sale shall have the meanings given to such terms in the Asset Purchase
Agreement (defined below).
RECITALS
WHEREAS, Seller and Las Vegas Cogeneration Limited Partnership (collectively, the
“Selling Entities”), and Purchaser have entered into an Asset Purchase Agreement dated as of
April 30, 2014 (the “Asset Purchase Agreement”), pursuant to which, among other things,
Selling Entities have agreed to sell, assign and transfer to Purchaser the Purchased Assets, and
Purchaser has agreed to purchase and accept from Selling Entities the Purchased Assets, and to
assume the Assumed Liabilities, on the terms and subject to the conditions set forth in the Asset
Purchase Agreement; and
WHEREAS, the execution and delivery of this Bill of Sale by Seller and Purchaser is a
condition to the obligations of the Parties to complete the transactions contemplated by the Asset
Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual representations,
warranties, covenants and agreements set forth in this Bill of Sale and in the Asset Purchase
Agreement, and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows:
1.
Sale of Assets to Purchaser. Seller hereby sells, assigns, transfers, grants,
conveys and delivers to Purchaser and its successors and assigns forever all of Seller’s right, title
and interest in and to all personal property and fixtures comprising the LV Cogen II Project
(collectively, the “Personal Property”), which Personal Property includes, without limitation, the
LV Cogen II Facilities and all of its Improvements, Fixtures and Equipment, Stores and
Inventory and Books and Records, free and clear of all Liens (other than Permitted Liens). The
Personal Property does not include any Excluded Assets.
2.
Further Assurances. At any time from and after the date of this Bill of Sale, at
either Party’s request and without further consideration, the other Party shall execute and deliver
to such Party such other instruments of sale, transfer, conveyance, assignment and confirmation,
Exhibit B
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provide such materials and information, and take such other actions as may be required to carry
out the provisions of this Bill of Sale and complete and make effective the transactions
contemplated by this Bill of Sale.
3.
Miscellaneous.
(a)
Interpretation. Nothing in this Bill of Sale, whether express or implied, is
intended to or shall be construed to modify, expand or limit in any way the terms of the Asset
Purchase Agreement. To the extent that any provision of this instrument conflicts or is
inconsistent with the terms of the Asset Purchase Agreement, the Asset Purchase Agreement will
govern.
(b)
Amendment. This Bill of Sale may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each Party.
(c)
No Third Party Beneficiary. The terms and provisions of this Bill of Sale
are intended solely for the benefit of each Party and their respective successors or permitted
assigns, and it is not the intention of the Parties to confer third-party beneficiary rights upon any
other Person.
(d)
Headings. The headings used in this Bill of Sale have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
(e)
Governing Law. THIS BILL OF SALE AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL BE GOVERNED BY, ENFORCED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD APPLY
THE LAWS OF ANOTHER JURISDICTION.
(f)
Submission to Jurisdiction; Venue. The Parties hereby irrevocably submit
to the jurisdiction of the federal or state courts located in Clark County, Nevada over any dispute
arising out of or relating to this Bill of Sale or any of the transactions contemplated hereby and
each Party irrevocably agrees that all claims in respect of such dispute or proceeding shall be
heard and determined in such court. Each Party irrevocably waives, to the fullest extent
permitted by applicable Law, any objection which it may now or hereafter have to the laying of
venue of any such dispute brought in such court or any defense of inconvenient forum.
(g)
Waiver of Trial by Jury. TO THE FULLEST EXTENT PERMITTED BY
LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY
FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY
TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED.
Exhibit B
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(h)
Binding Effect. This Bill of Sale is binding upon, inures to the benefit of
and is enforceable by the Parties and their respective successors and permitted assigns.
(i)
Counterparts. This Bill of Sale may be executed in any number of
counterparts, each of which will be deemed an original, but all of which together will constitute
one and the same instrument.
[Signature page follows.]
Exhibit B
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IN WITNESS WHEREOF, each of the Parties has caused this Bill of Sale to be executed
by its duly authorized representative as of the date first above written.
LAS VEGAS COGENERATION II, L.L.C., a
Delaware limited liability company
By: ___________________________
Name: _________________________
Title: __________________________
NEVADA POWER COMPANY d/b/a NV ENERGY,
a Nevada corporation
By: ___________________________
Name: _________________________
Title: __________________________
Exhibit B
8
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EXHIBIT C
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
(Assigned Facilities Agreements, Transferred Permits and Transferred Intellectual Property for
LV Cogen I)
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Assignment”) is made
and entered into effective as of [_______], 20[__] (the “Effective Date”), by and between LAS
VEGAS COGENERATION LIMITED PARTNERSHIP, a Nevada limited partnership
(“Assignor”), and NEVADA POWER COMPANY d/b/a NV ENERGY, a Nevada corporation
(“Assignee”). Assignor and Assignee are sometimes referred to herein individually as a “Party”
and collectively as the “Parties.” Unless otherwise specifically defined in this Assignment,
capitalized terms used but not defined in this Assignment shall have the meanings given to such
terms in the Asset Purchase Agreement (defined below).
RECITALS
WHEREAS, Assignor and Las Vegas Cogeneration II, L.L.C. (collectively, the
“Sellers”), and Assignee have entered into an Asset Purchase Agreement dated as of April 30,
2014 (the “Asset Purchase Agreement”), pursuant to which, among other things, Sellers have
agreed to sell, assign and transfer to Assignee the Purchased Assets, and Assignee has agreed to
purchase and accept from Sellers the Purchased Assets, and to assume the Assumed Liabilities,
on the terms and subject to the conditions set forth in the Asset Purchase Agreement; and
WHEREAS, the execution and delivery of this Assignment by Assignor and Assignee is
a condition to the obligations of the Parties to complete the transactions contemplated by the
Asset Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual representations,
warranties, covenants and agreements set forth in this Assignment and in the Asset Purchase
Agreement, and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows:
1.
Assignment of Assigned Facilities Agreements. Assignor hereby conveys and
assigns to Assignee, and Assignee hereby accepts the assignment of, as of the Effective Date, all
of Assignor’s right, title and interest in, to and under the Assigned Facilities Agreements
described in Schedule 1 attached hereto, free and clear of all Liens (other than Permitted Liens
and Permitted Encumbrances), together with the consent of all parties having a right to consent
to such assignment.
2.
Assignment of Transferred Permits. Assignor hereby conveys and assigns to
Assignee, and Assignee hereby accepts the assignment of, as of the Effective Date, all of
Exhibit C
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Assignor’s right, title and interest in, to and under the Transferred Permits described in Schedule
2 attached hereto, free and clear of all Liens (other than Permitted Liens and Permitted
Encumbrances).
3.
Assignment of Transferred Intellectual Property. Assignor hereby conveys and
assigns to Assignee, and Assignee hereby accepts the assignment of, as of the Effective Date, all
of Assignor’s right, title and interest in, to and under the Transferred Intellectual Property
described in Schedule 3 attached hereto, free and clear of all Liens (other than Permitted Liens
and Permitted Encumbrances), together with the consent of all parties having a right to consent
to such assignment.
4.
Assumption of Assumed Liabilities. Assignor hereby delegates to Assignee, and
Assignee does hereby assume, accept and agree to pay, perform or discharge, as applicable, as of
the Effective Date, the Assumed Liabilities with respect to the Assigned Facilities Agreements
described in Schedule 1, the Transferred Permits described in Schedule 2 and the Transferred
Intellectual Property described in Schedule 3 attached hereto.
5.
Further Assurances. At any time from and after the date of this Assignment, at
either Party’s request and without further consideration, the other Party shall execute and deliver
to such Party such other instruments of sale, transfer, conveyance, assignment and confirmation,
provide such materials and information, and take such other actions as may be required to carry
out the provisions of this Assignment and complete and make effective the transactions
contemplated by this Assignment.
6.
Miscellaneous.
(a)
Interpretation. Nothing in this Assignment, whether express or implied, is
intended to or shall be construed to modify, expand or limit in any way the terms of the Asset
Purchase Agreement. To the extent that any provision of this instrument conflicts or is
inconsistent with the terms of the Asset Purchase Agreement, the Asset Purchase Agreement will
govern.
(b)
Amendment. This Assignment may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each Party.
(c)
No Third Party Beneficiary. The terms and provisions of this Assignment
are intended solely for the benefit of each Party and their respective successors or permitted
assigns, and it is not the intention of the Parties to confer third-party beneficiary rights upon any
other Person.
(d)
Headings. The headings used in this Assignment have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
(e)
Governing Law. THIS ASSIGNMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL BE GOVERNED BY, ENFORCED AND
Exhibit C
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INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD APPLY
THE LAWS OF ANOTHER JURISDICTION.
(f)
Submission to Jurisdiction; Venue. The Parties hereby irrevocably submit
to the jurisdiction of the federal or state courts located in Clark County, Nevada over any dispute
arising out of or relating to this Assignment or any of the transactions contemplated hereby and
each Party irrevocably agrees that all claims in respect of such dispute or proceeding shall be
heard and determined in such court. Each Party irrevocably waives, to the fullest extent
permitted by applicable Law, any objection which it may now or hereafter have to the laying of
venue of any such dispute brought in such court or any defense of inconvenient forum.
(g)
Waiver of Trial by Jury. TO THE FULLEST EXTENT PERMITTED BY
LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY
FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY
TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED.
(h)
No Assignment; Binding Effect. Neither this Assignment nor any right,
interest or obligation hereunder may be assigned or delegated by any Party without the prior
written consent of the other Party and any attempt to do so will be void. This Assignment is
binding upon, inures to the benefit of and is enforceable by the Parties and their respective
successors and permitted assigns.
(i)
Counterparts. This Assignment may be executed in any number of
counterparts, each of which will be deemed an original, but all of which together will constitute
one and the same instrument.
[Signature page follows.]
Exhibit C
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IN WITNESS WHEREOF, each of the Parties has caused this Assignment to be executed
by its duly authorized representative as of the date first above written.
LAS VEGAS COGENERATION LIMITED
PARTNERSHIP, a Nevada limited partnership
By: Desert Arc I, LLC, its General Partner
By: _______________________
Name: _____________________
Title: ______________________
NEVADA POWER COMPANY d/b/a NV ENERGY,
a Nevada corporation
By: ___________________________
Name: _________________________
Title: __________________________
Exhibit C
4
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SCHEDULE 1 Assigned Facilities Agreements [to be listed] Exhibit C
5
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SCHEDULE 2
Transferred Permits
[to be listed]
Exhibit C
6
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SCHEDULE 3 Transferred Intellectual Property
[to be listed] Exhibit C
7
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FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT (Assigned Facilities Agreements, Transferred Permits and Transferred Intellectual Property for
LV Cogen II)
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Assignment”) is made
and entered into effective as of [_______], 20[__] (the “Effective Date”), by and between LAS
VEGAS COGENERATION II, L.L.C., a Delaware limited liability company (“Assignor”), and
NEVADA POWER COMPANY d/b/a NV ENERGY, a Nevada corporation (“Assignee”).
Assignor and Assignee are sometimes referred to herein individually as a “Party” and
collectively as the “Parties.” Unless otherwise specifically defined in this Assignment,
capitalized terms used but not defined in this Assignment shall have the meanings given to such
terms in the Asset Purchase Agreement (defined below).
RECITALS
WHEREAS, Assignor and Las Vegas Cogeneration Limited Partnership (collectively, the
“Sellers”), and Assignee have entered into an Asset Purchase Agreement dated as of April 30,
2014 (the “Asset Purchase Agreement”), pursuant to which, among other things, Sellers have
agreed to sell, assign and transfer to Assignee the Purchased Assets, and Assignee has agreed to
purchase and accept from Sellers the Purchased Assets, and to assume the Assumed Liabilities,
on the terms and subject to the conditions set forth in the Asset Purchase Agreement; and
WHEREAS, the execution and delivery of this Assignment by Assignor and Assignee is
a condition to the obligations of the Parties to complete the transactions contemplated by the
Asset Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual representations,
warranties, covenants and agreements set forth in this Assignment and in the Asset Purchase
Agreement, and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows:
1.
Assignment of Assigned Facilities Agreements. Assignor hereby conveys and
assigns to Assignee, and Assignee hereby accepts the assignment of, as of the Effective Date, all
of Assignor’s right, title and interest in, to and under the Assigned Facilities Agreements
described in Schedule 1 attached hereto, free and clear of all Liens (other than Permitted Liens
and Permitted Encumbrances), together with the consent of all parties having a right to consent
to such assignment.
2.
Assignment of Transferred Permits. Assignor hereby conveys and assigns to
Assignee, and Assignee hereby accepts the assignment of, as of the Effective Date, all of
Assignor’s right, title and interest in, to and under the Transferred Permits described in Schedule
Exhibit C
8
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2 attached hereto, free and clear of all Liens (other than Permitted Liens and Permitted
Encumbrances).
3.
Assignment of Transferred Intellectual Property. Assignor hereby conveys and
assigns to Assignee, and Assignee hereby accepts the assignment of, as of the Effective Date, all
of Assignor’s right, title and interest in, to and under the Transferred Intellectual Property
described in Schedule 3 attached hereto, free and clear of all Liens (other than Permitted Liens
and Permitted Encumbrances), together with the consent of all parties having a right to consent
to such assignment.
4.
Assumption of Assumed Liabilities. Assignor hereby delegates to Assignee, and
Assignee does hereby assume, accept and agree to pay, perform or discharge, as applicable, as of
the Effective Date, the Assumed Liabilities with respect to the Assigned Facilities Agreements
described in Schedule 1, the Transferred Permits described in Schedule 2 and the Transferred
Intellectual Property described in Schedule 3 attached hereto.
5.
Further Assurances. At any time from and after the date of this Assignment, at
either Party’s request and without further consideration, the other Party shall execute and deliver
to such Party such other instruments of sale, transfer, conveyance, assignment and confirmation,
provide such materials and information, and take such other actions as may be required to carry
out the provisions of this Assignment and complete and make effective the transactions
contemplated by this Assignment.
6.
Miscellaneous.
(a)
Interpretation. Nothing in this Assignment, whether express or implied, is
intended to or shall be construed to modify, expand or limit in any way the terms of the Asset
Purchase Agreement. To the extent that any provision of this instrument conflicts or is
inconsistent with the terms of the Asset Purchase Agreement, the Asset Purchase Agreement will
govern.
(b)
Amendment. This Assignment may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each Party.
(c)
No Third Party Beneficiary. The terms and provisions of this Assignment
are intended solely for the benefit of each Party and their respective successors or permitted
assigns, and it is not the intention of the Parties to confer third-party beneficiary rights upon any
other Person.
(d)
Headings. The headings used in this Assignment have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
(e)
Governing Law. THIS ASSIGNMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL BE GOVERNED BY, ENFORCED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA
Exhibit C
9
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WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD APPLY
THE LAWS OF ANOTHER JURISDICTION.
(f)
Submission to Jurisdiction; Venue. The Parties hereby irrevocably submit
to the jurisdiction of the federal or state courts located in Clark County, Nevada over any dispute
arising out of or relating to this Assignment or any of the transactions contemplated hereby and
each Party irrevocably agrees that all claims in respect of such dispute or proceeding shall be
heard and determined in such court. Each Party irrevocably waives, to the fullest extent
permitted by applicable Law, any objection which it may now or hereafter have to the laying of
venue of any such dispute brought in such court or any defense of inconvenient forum.
(g)
Waiver of Trial by Jury. TO THE FULLEST EXTENT PERMITTED BY
LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY
FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY
TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED.
(h)
No Assignment; Binding Effect. Neither this Assignment nor any right,
interest or obligation hereunder may be assigned or delegated by any Party without the prior
written consent of the other Party and any attempt to do so will be void. This Assignment is
binding upon, inures to the benefit of and is enforceable by the Parties and their respective
successors and permitted assigns.
(i)
Counterparts. This Assignment may be executed in any number of
counterparts, each of which will be deemed an original, but all of which together will constitute
one and the same instrument.
[Signature page follows.]
Exhibit C
10
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IN WITNESS WHEREOF, each of the Parties has caused this Assignment to be executed
by its duly authorized representative as of the date first above written.
LAS VEGAS COGENERATION II, L.L.C., a
Delaware limited liability company
By: ___________________________
Name: _________________________
Title: __________________________
NEVADA POWER COMPANY d/b/a NV ENERGY,
a Nevada corporation
By: ___________________________
Name: _________________________
Title: __________________________
Exhibit C
11
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SCHEDULE 1 Assigned Facilities Agreements [to be listed] Exhibit C
12
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SCHEDULE 2
Transferred Permits
[to be listed]
Exhibit C
13
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SCHEDULE 3 Transferred Intellectual Property
[to be listed] Exhibit C
14
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FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
(Easements and related interests in real property)
When recorded, return to:
Nevada Power Company
6226 W. Sahara Ave.
Las Vegas, NV 89146
(SPACE ABOVE RESERVED FOR RECORDING INFORMATION)
ASSIGNMENT AND ASSUMPTION AGREEMENT
Grantor/Assignor:
Grantee/Assignee:
SWG NEVADA REAL ESTATE HOLDINGS, LLC, a Delaware
limited liability company
NEVADA POWER COMPANY d/b/a NV ENERGY, a Nevada
corporation
Reference Numbers:
Exhibit C
15
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ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Assignment”) is made
and entered into effective as of [_______], 20[__] (the “Effective Date”), by and between SWG
NEVADA REAL ESTATE HOLDINGS, LLC, a Delaware limited liability company
(“Assignor”), and NEVADA POWER COMPANY d/b/a NV ENERGY, a Nevada corporation
(“Assignee”). Assignor and Assignee are sometimes referred to herein individually as a “Party”
and collectively as the “Parties.” Unless otherwise specifically defined in this Assignment,
capitalized terms used but not defined in this Assignment shall have the meanings given to such
terms in the Asset Purchase Agreement (defined below).
RECITALS
WHEREAS, Las Vegas Cogeneration II, L.L.C. and Las Vegas Cogeneration Limited
Partnership (collectively, the “Selling Entities”), and Assignee have entered into an Asset
Purchase Agreement dated as of April 30, 2014 (the “Asset Purchase Agreement”), pursuant to
which, among other things, Selling Entities have agreed to sell, assign and transfer to Assignee
the Purchased Assets, and Assignee has agreed to purchase and accept from Selling Entities the
Purchased Assets, and to assume the Assumed Liabilities, on the terms and subject to the
conditions set forth in the Asset Purchase Agreement; and
WHEREAS, Assignor is an affiliate of the Selling Entities and is the owner of that certain
real property more particularly described on Schedule 1 attached hereto (the “Property”), which
Property is being conveyed to Assignee by grant, bargain and sale deed contemporaneously
herewith pursuant to the Asset Purchase Agreement;
WHEREAS, Assignor is receiving substantial benefits from the transactions
contemplated by the Asset Purchase Agreement;
WHEREAS, Assignor is the beneficiary of certain [easements, licenses, rights-of-way,
and occupancy and encroachment permits] (collectively, the “Project Easements and Grants”),
which Project Easements and Grants are more particularly described on Schedule 2 attached
hereto;
WHEREAS, in connection with the conveyance of the Property to Assignee, Assignor
desires to assign to Assignee, and Assignee desires to accept from Assignor, all of Assignor’s
right, title and interest in, to and under the Project Easements and Grants; and
WHEREAS, the execution and delivery of this Assignment by Assignor and Assignee is
a condition to the obligations of the Selling Entities and Assignee to complete the transactions
contemplated by the Asset Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual representations,
warranties, covenants and agreements set forth in this Assignment and in the Asset Purchase
Agreement, and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows:
Exhibit C
16
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1.
Assignment of Project Easements and Grants. Assignor hereby conveys and
assigns to Assignee, and Assignee hereby accepts the assignment of, as of the Effective Date, all
of Assignor’s right, title and interest in, to and under the Project Easements and Grants described
on Schedule 2 attached hereto, subject to the terms and conditions thereof, including, without
limitation, Assignor’s interest as a grantee, permittee, or benefitted party under the Project
Easements and Grants, free and clear of all Liens (other than Permitted Liens and Permitted
Encumbrances), together with the consent of all parties having a right to consent to such
assignment.
2.
Further Assurances. At any time from and after the date of this Assignment, at
either Party’s request and without further consideration, the other Party shall execute and deliver
to such Party such other instruments of sale, transfer, conveyance, assignment and confirmation,
provide such materials and information, and take such other actions as may be required to carry
out the provisions of this Assignment and complete and make effective the transactions
contemplated by this Assignment.
3.
Miscellaneous.
(a)
Interpretation. Nothing in this Assignment, whether express or implied, is
intended to or shall be construed to modify, expand or limit in any way the terms of the Asset
Purchase Agreement. To the extent that any provision of this instrument conflicts or is
inconsistent with the terms of the Asset Purchase Agreement, the Asset Purchase Agreement will
govern.
(b)
Amendment. This Assignment may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each Party.
(c)
No Third Party Beneficiary. The terms and provisions of this Assignment
are intended solely for the benefit of each Party and their respective successors or permitted
assigns, and it is not the intention of the Parties to confer third-party beneficiary rights upon any
other Person.
(d)
Headings. The headings used in this Assignment have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
(e)
Governing Law. THIS ASSIGNMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL BE GOVERNED BY, ENFORCED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD APPLY
THE LAWS OF ANOTHER JURISDICTION.
Exhibit C
17
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(f)
Submission to Jurisdiction; Venue. The Parties hereby irrevocably submit
to the jurisdiction of the federal or state courts located in Clark County, Nevada over any dispute
arising out of or relating to this Assignment or any of the transactions contemplated hereby and
each Party irrevocably agrees that all claims in respect of such dispute or proceeding shall be
heard and determined in such court. Each Party irrevocably waives, to the fullest extent
permitted by applicable Law, any objection which it may now or hereafter have to the laying of
venue of any such dispute brought in such court or any defense of inconvenient forum.
(g)
Waiver of Trial by Jury. TO THE FULLEST EXTENT PERMITTED BY
LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY
FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY
TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED.
(h)
No Assignment; Binding Effect. Neither this Assignment nor any right,
interest or obligation hereunder may be assigned or delegated by any Party without the prior
written consent of the other Party and any attempt to do so will be void. This Assignment is
binding upon, inures to the benefit of and is enforceable by the Parties and their respective
successors and permitted assigns.
(i)
Counterparts. This Assignment may be executed in any number of
counterparts, each of which will be deemed an original, but all of which together will constitute
one and the same instrument.
[Signature page follows.]
Exhibit C
18
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IN WITNESS WHEREOF, each of the Parties has caused this Assignment to be executed
by its duly authorized representative as of the date first above written.
SWG NEVADA REAL ESTATE HOLDINGS, LLC,
a Delware limited liability company
By: ___________________________
Name: _________________________
Title: __________________________
NEVADA POWER COMPANY d/b/a NV ENERGY,
a Nevada corporation
By: ___________________________
Name: _________________________
Title: __________________________
Exhibit C
19
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STATE OF
COUNTY OF
}
LVC-1
ss.
This
instrument
was
acknowledged
before
me
on
_______,
____,
by
_____________________________________, as ____________________________________ of
SWG NEVADA REAL ESTATE HOLDINGS, LLC, a Delaware limited liability company, on
behalf of the limited liability company.
Notary Public – State of _____
STATE OF NEVADA COUNTY OF CLARK
}
ss.
This instrument was acknowledged before me on __________________, ____, by
_____________________________________, as ____________________________________ of
NEVADA POWER COMPANY d/b/a NV ENERGY, a Nevada corporation, on behalf of the
corporation.
Notary Public – State of Nevada
Exhibit C
20
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SCHEDULE 1 Legal Description of Property [to be listed] Exhibit C
21
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SCHEDULE 2 Project Easements and Grants [to be listed] Exhibit C
22
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EXHIBIT D
FORM OF ESCROW AGREEMENT
[see attached]
Exhibit D
1
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ESCROW AGREEMENT THIS ESCROW AGREEMENT (this “Agreement”) is entered into as of _______,
201_, (the “Effective Date”) by and among Nevada Power Company d/b/a NV Energy, a Nevada
corporation (“Purchaser”), Las Vegas Cogeneration Limited Partnership, a Nevada limited
partnership, and Las Vegas Cogeneration II, L.L.C., a Delaware limited liability company
(collectively, “Sellers”, and together with Purchaser, sometimes referred to individually as
“Party” and collectively as the “Parties”), and JPMorgan Chase Bank, NA (the “Escrow Agent”).
WHEREAS, the Parties have entered into that certain Asset Purchase Agreement dated
as of April 30, 2014 (the “Purchase Agreement”);
WHEREAS, in accordance with the Purchase Agreement, the Parties have agreed that a
portion of the Purchase Price (as defined in the Purchase Agreement) shall be deposited by
Purchaser into escrow to be held and distributed by the Escrow Agent in accordance with the
terms and conditions set forth herein.
1.
Appointment. The Parties hereby appoint Escrow Agent as their escrow agent
for the purposes set forth herein, and Escrow Agent hereby accepts such appointment under the
terms and conditions set forth herein.
2.
Fund. Concurrently with the execution and delivery of this Agreement,
Purchaser shall deposit or cause to be deposited with Escrow Agent the sum of
(the “Escrow Deposit”). Escrow
Agent shall hold the Escrow Deposit in one or more demand deposit accounts and shall invest
and reinvest the Escrow Deposit and the proceeds thereof (collectively, the “Fund”) in an interest
bearing demand deposit account at JPMorgan Chase Bank, N.A., or a successor investment
offered by Escrow Agent. Interest bearing demand deposit accounts have rates of compensation
that may vary from time to time as determined by Escrow Agent. The Parties recognize and
agree that instructions to make any other investment (“Alternative Investment”), must be in
writing and jointly executed by an Authorized Representative (as defined in Section 3 below), of
Sellers and an Authorized Representative of Purchaser, and shall specify the type and identity of
the investments to be purchased and/or sold. The Escrow Agent is hereby authorized to execute
purchases and sales of investments through the facilities of its own trading or capital markets
operations or those of any affiliated entity. The Escrow Agent or any of its affiliates may receive
compensation with respect to any Alternative Investment directed hereunder including without
limitation charging any applicable agency fee or trade execution fee in connection with each
transaction. Escrow Agent will not provide supervision, recommendations or advice relating to
either the investment of moneys held in the Fund or the purchase, sale, retention or other
disposition of any investment described herein, and Escrow Agent shall not have any liability for
any loss in an investment made pursuant to the terms of this Agreement. Market values,
exchange rates and other valuation information (including without limitation, market value,
current value or notional value) of any Alternative Investment furnished in any report or
statement may be obtained from third party sources and is furnished for the exclusive use of the
Parties. Escrow Agent has no responsibility whatsoever to determine the market or other value
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of any Alternative Investment and makes no representation or warranty, express or implied, as to
the accuracy of any such valuations or that any values necessarily reflect the proceeds that may
be received on the sale of an Alternative Investment. Escrow Agent shall not have any liability
for any loss sustained as a result of any investment made pursuant to the terms of this Agreement
or as a result of any liquidation of any investment prior to its maturity or for the failure of an
Authorized Representative of Sellers and of Purchaser to give Escrow Agent joint instructions to
invest or reinvest the Fund. Escrow Agent shall have the right to liquidate any investments held
in order to provide funds necessary to make required payments under this Agreement. All
interest or other income earned under this Agreement shall be allocated to Sellers as set forth on
Schedule 3 and reported, by Escrow Agent to the IRS, or any other taxing authority, on IRS
Form 1099 or 1042S (or other appropriate form) as income earned from the Escrow Deposit by
Sellers whether or not said income has been distributed during such year. Escrow Agent shall
withhold any taxes it deems appropriate in the absence of proper tax documentation or as
required by law, and shall remit such taxes to the appropriate authorities. The Parties hereby
represent and warrant to the Escrow Agent that (i) there is no sale or transfer of an United States
Real Property Interest as defined under IRC Section 897(c) in the underlying transaction giving
rise to this Agreement; and (ii) such underlying transaction does not constitute an installment
sale requiring any tax reporting or withholding of imputed interest or original issue discount to
the IRS or other taxing authority. The Fund shall be held in escrow and shall not be subject to
any lien, attachment, trustee process or any other judicial process of any creditor of a Party or
Escrow Agent, except as expressly set forth in Section 7 and Section 9 below.
3.
Disposition and Termination.
(a)
From and after the Effective Date, the monies in the Fund, if any, shall be
held and disbursed out of the Fund by Escrow Agent as follows:
(i)
Escrow Agent shall hold the Fund in safekeeping and disburse
the Fund or any part thereof only in accordance with and upon: (x) the joint written
instructions (delivered in accordance with Section 3(a)(v) below) signed by the Authorized
Representative of Sellers and of Purchaser and in the form attached as Exhibit A (a “Joint
Disbursement Direction”); or (y) in accordance with and upon the order, decree,
determination, award or judgment entered by a court of competent jurisdiction setting forth
the amount of the Fund to be paid and the Party to whom such funds shall be paid (each, a
“Court Direction”), which Court Direction shall be accompanied by joint written
instructions from the respective Authorized Representatives of the Parties attesting that such
order is final and not subject to further proceedings or appeal along with instructions to
effectuate such Court Direction, and the Escrow Agent shall be entitled conclusively to rely
upon any such instructions and shall have no responsibility to review the order to which
such instruction refers or to make any determination as to whether such order is final.
(ii)
Upon receipt of a Joint Disbursement Direction or Court
Direction directing Escrow Agent to pay the Fund, or any part thereof, in accordance with
the terms and provisions of such Joint Disbursement Direction or Court Direction, Escrow
Agent shall disburse the Fund, or such part thereof, in accordance therewith and in
accordance with the terms of this Agreement.
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(iii) Any Joint Disbursement Direction or Court Direction may
instruct Escrow Agent to release all or any portion of the remainder of the Fund.
(iv)
Any remaining balance in the Fund shall be paid to Sellers
upon the later to occur of (a) the date that is
after the Effective Date (or
if such day is not a Business Day, on the first Business Day immediately following) and (b)
the Escrow Termination Date (as defined below). For purposes of this Section, if there is a
pending claim asserted by a Purchaser Indemnified Party (as defined in the Purchase
Agreement) against one or both Sellers on or before the
anniversary of
the Effective Date in accordance with the terms of the Purchase Agreement (a “Pending
Claim”), the amount of the Fund shall be maintained in the amount of any such Pending
Claim until the date on which such Pending Claim shall have been (x) paid from the Fund to
such Purchaser Indemnified Party or (y) otherwise fully resolved as between the Parties in
accordance with the terms of the Purchase Agreement (such date being the “Escrow
Termination Date”), after which date any remaining balance of the Fund shall be distributed
upon Escrow Agent’s receipt of a Joint Disbursement Direction confirming the occurrence
of all such events and directing the final distribution of the Fund.
(v)
Any instructions (including a Joint Disbursement Direction)
setting forth, claiming, containing, objecting to, or in any way related to the transfer or
distribution of the Fund must be in writing, set forth in a Portable Document Format
(“PDF”), executed by the appropriate Party or Parties as evidenced by the signatures of the
person or persons signing this Agreement or one of their respective designated persons as
set forth in Schedule 1 (each an “Authorized Representative”), and delivered to Escrow
Agent (with a contemporaneous copy to any non-instructing Party, although the Escrow
Agent need not verify receipt by the non-instructing Party) attached to an email on a
Business Day only at the email address set forth in Section 8 below. No instruction
(including a Joint Disbursement Direction) for or related to the transfer or distribution of the
Fund shall be deemed delivered and effective unless Escrow Agent actually shall have
received it on a Business Day as a PDF attached to an email only at the email address set
forth in Section 8 and as evidenced by a confirmed transmittal to the Parties’ respective
email addresses and Escrow Agent has been able to satisfy any applicable security
procedures as may be required hereunder. Escrow Agent shall not be liable to any Party or
other person for refraining from acting upon any instruction for or related to the transfer or
distribution of the Fund if delivered to any other email address, including but not limited to
a valid email address of any employee of Escrow Agent. The Parties each acknowledge that
Escrow Agent is authorized to use the following funds transfer instructions to disburse any
funds due to Sellers and/or Purchaser, respectively, without a verifying call-back as set forth
in Section 3(b) below:
Purchaser: Bank name:
Bank Address:
ABA number:
Account name:
Account number:
Sellers: Bank name:
Bank Address:
ABA number:
Account Name:
Account Number:
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A Party’s wiring instructions set forth in this Section may be revised by such Party by
delivery of written notice to Escrow Agent and the other Party in accordance with the terms and
conditions of Section 8 hereof.
(b)
In the event any other funds transfer instructions are set forth in a
permitted instruction from a Party or the Parties in accordance with Section 3(a) (including a
Joint Disbursement Direction), Escrow Agent shall seek confirmation of such funds transfer
instructions by a single telephone call-back to one of the Authorized Representatives of each of
the Parties, and Escrow Agent may rely upon the confirmation of anyone purporting to be that
Authorized Representative. The persons and telephone numbers designated for call-backs may
be changed only in a writing executed by Authorized Representatives of the applicable Party and
actually received by Escrow Agent via facsimile or as a PDF attached to an email. Except as set
forth in Section 3(a) above, no funds will be disbursed until an Authorized Representative is able
to confirm such instructions by telephone callback. Escrow Agent, any intermediary bank and
the beneficiary’s bank in any funds transfer may rely upon the identifying number of the
beneficiary’s bank or any intermediary bank included in a funds transfer instruction provided by
the Parties and confirmed by their respective Authorized Representatives. Further, the
beneficiary’s bank in the funds transfer instructions may make payment on the basis of the
account number provided in such Party’s or the Parties’ instruction and confirmed by their
respective Authorized Representatives even though it identifies a person different from the
named beneficiary.
(c)
The Parties acknowledge that there are certain security, corruption,
transmission error and access availability risks associated with using open networks such as the
Internet and the Parties hereby expressly assume such risks.
(d)
As used in this Section 3, “Business Day” shall mean any day other than a
Saturday, Sunday or any other day on which Escrow Agent located at the notice address set forth
below is authorized or required by law or executive order to remain closed. The Parties
acknowledge that the security procedures set forth in this Section 3 are commercially reasonable.
Upon delivery of the entire Fund by Escrow Agent in accordance with this Agreement, this
Agreement shall terminate, subject to the provisions of Section 6.
(e)
The Escrow Agent shall not distribute or release all or any part of the Fund
except in accordance with the express terms and conditions of this Agreement.
4.
Escrow Agent. Escrow Agent shall have only those duties as are specifically and
expressly provided herein, which shall be deemed purely ministerial in nature, and no other
duties, including but not limited to any fiduciary duty, shall be implied. Escrow Agent has no
knowledge of, nor any obligation to comply with, the terms and conditions of any other
agreement between the Parties, nor shall Escrow Agent be required to determine if any Party has
complied with any other agreement. Notwithstanding the terms of any other agreement between
the Parties, the terms and conditions of this Agreement shall control the actions of Escrow
Agent. Escrow Agent may conclusively rely upon any written notice, document, instruction or
request delivered by the Parties believed by it to be genuine and to have been signed by the
Party’s or Parties’ Authorized Representative(s),as applicable, without inquiry and without
requiring substantiating evidence of any kind and Escrow Agent shall be under no duty to inquire
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into or investigate the validity, accuracy or content of any such document, notice, instruction or
request. Escrow Agent shall not be liable for any action taken, suffered or omitted to be taken by
it in good faith except to the extent that Escrow Agent’s gross negligence or willful misconduct
was the cause of any direct loss to any Party. Escrow Agent may execute any of its powers and
perform any of its duties hereunder directly or through affiliates or agents. In the event Escrow
Agent shall be uncertain, or believes there is some ambiguity, as to its duties or rights hereunder
or receives instructions, claims or demands from any Party hereto which in Escrow Agent’s
judgment conflict with the provisions of this Agreement, or if Escrow Agent receives conflicting
instructions from the Parties, Escrow Agent shall be entitled either to: (a) refrain from taking
any action until it shall be given (i) a joint written direction executed by Authorized
Representatives of the Parties which eliminates such conflict or (ii) a court order issued by a
court of competent jurisdiction (it being understood that the Escrow Agent shall be entitled
conclusively to rely and act upon any such court order and shall have no obligation to determine
whether any such court order is final); or (b) file an action in interpleader. Escrow Agent shall
have no duty to solicit any payments which may be due it or the Fund, including, without
limitation, the Escrow Deposit, nor shall the Escrow Agent have any duty or obligation to
confirm or verify the accuracy or correctness of any amounts deposited with it hereunder.
Anything in this Agreement to the contrary notwithstanding, in no event shall Escrow Agent be
liable for special, incidental, punitive, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if Escrow Agent has been advised of
the likelihood of such loss or damage and regardless of the form of action.
5.
Resignation and Removal; Succession.
(a)
Escrow Agent may resign and be discharged from any further duties or
obligations hereunder by giving thirty (30) days advance notice in writing of such resignation to
the Parties. Escrow Agent’s sole responsibility after such thirty (30) day notice period expires
shall be to hold the Fund (without any obligation to reinvest the same) and to deliver the same to
a designated substitute escrow agent, if any, appointed by the Parties, or such other person
designated by the Parties, or in accordance with the directions of a final court order, at which
time of delivery, Escrow Agent’s obligations hereunder shall cease and terminate. If prior to the
effective resignation date, the Parties have failed to appoint a successor escrow agent, or to
instruct the Escrow Agent to deliver the Fund to another person as provided above, at any time
on or after the effective resignation date, Escrow Agent either: (i) may interplead the Fund with a
court located in New York County, New York and the costs, expenses and reasonable attorney’s
fees which are incurred in connection with such proceeding may be charged against and
withdrawn from the Fund; or (ii) appoint a successor escrow agent of its own choice. Any
appointment of a successor escrow agent shall be binding upon the Parties and no appointed
successor escrow agent shall be deemed to be an agent of Escrow Agent. Escrow Agent shall
deliver this Agreement together with the Fund and any and all requested instruments or
documents to any appointed successor escrow agent, at which time Escrow Agent’s obligations
under this Agreement shall cease and terminate. Any entity into which Escrow Agent may be
merged or converted or with which it may be consolidated, or any entity to which all or
substantially all the escrow business may be transferred, shall be the Escrow Agent under this
Agreement without further act.
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(b)
Escrow Agent may be removed (with or without cause) and a new escrow
agent may be appointed upon mutual agreement of the Parties. In such event, the Parties shall
deliver joint written notice to the Escrow Agent of such removal together with joint written
instructions authorizing delivery of this Agreement together with the Fund and any and all
requested instruments or documents to a successor escrow agent, at which time Escrow Agent
will be discharged from any further duties or obligations hereunder.
6.
Compensation. The Sellers agree to pay Escrow Agent upon execution of this
Agreement and from time to time thereafter reasonable compensation for the services to be
rendered hereunder, which unless otherwise agreed in writing, shall be as described in Schedule
2. Each of the Parties further agrees to the disclosures set forth in Schedule 2. As between
Sellers and Purchaser, such compensation shall be borne 100% by Sellers.
7.
Indemnification and Reimbursement. The Parties jointly and severally agree to
indemnify, defend, hold harmless, pay or reimburse Escrow Agent and its affiliates and their
respective successors, assigns, directors, agents and employees (the “Indemnitees”) from and
against any and all losses, damages, claims, liabilities, penalties, judgments, settlements,
litigation, investigations, costs or expenses (including, without limitation, the fees and expenses
of outside counsel and experts and their staffs and all expense of document location, duplication
and shipment) (collectively “Losses”), arising out of or in connection with (a) Escrow Agent’s
performance of this Agreement, except to the extent that such Losses are determined by a court
of competent jurisdiction to have been caused by the gross negligence, willful misconduct, or
bad faith of such Indemnitee; and (b) Escrow Agent’s following any instructions or directions,
whether joint or singular, from the Parties received in accordance with this Agreement. The
obligations set forth in this Section 7 shall survive the resignation, replacement or removal of
Escrow Agent or the termination of this Agreement. Notwithstanding the foregoing, as only
between the Parties, Sellers on the one hand, and Purchaser, on the other hand, shall each be
responsible for 50% of the obligations of the Parties under this Section 7.
8.
Notices. All communications hereunder shall be in writing or set forth in a PDF
attached to an email, and all instructions from a Party or the Parties to the Escrow Agent shall be
executed by an Authorized Representative, and shall be delivered in accordance with the terms
of this Agreement by facsimile, email or overnight courier only to the appropriate fax number,
email address, or notice address set forth for each party as follows:
If to Purchaser:
Nevada Power Company d/b/a NV Energy
6226 W. Sahara Avenue
Las Vegas, Nevada 89146
Facsimile No.: 702-402-2455
Email: [email protected]
Attn: Vincent Burton, Manager, Energy Supply Contract
Management, M/S 26A
With copies to:
Nevada Power Company d/b/a NV Energy
6226 W. Sahara Avenue
Las Vegas, Nevada 89146
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Facsimile No.: 702-402-2069
Attn: Douglas A. Cannon, Senior Vice President
General Counsel & Corporate Secretary
Chief Compliance Officer
If to Sellers: Las Vegas Cogeneration Limited Partnership c/o Southwest Generation Operating Company, LLC 1200 17th Street, Suite 700 Denver, CO 80202 Facsimile No.: 303.928.4699 Attn: Maurice Klefeker and
Las Vegas Cogeneration II, L.L.C.
c/o Southwest Generation Operating Company, LLC
1200 17th Street, Suite 700
Denver, CO 80202
Facsimile No.: 303.928.4699
Attn: Maurice Klefeker
With copies to: Southwest Generation Operating Company, LLC 1200 17th Street, Suite 700 Denver, CO 80202 Facsimile No.: 303.928.4699 Attn: Robert Witwer and
Morgan, Lewis & Bockius LLP
300 South Grand Avenue, Suite 2200
Los Angeles, CA 90071
Facsimile No.: 213.612.2501
Attn: Richard A. Shortz
If to Escrow Agent: JPMorgan Chase Bank, N.A.
Escrow Services
300 S. Grand Ave., 4th Floor, Suite 470
Los Angeles, CA 90071Attention: Nelia Lopez
Fax No.: 213.621.8090
Email Address:
(Los Angeles) [email protected]
9.
Compliance with Court Orders. In the event that a legal garnishment,
attachment, levy, restraining notice or court order is served with respect to any of the Fund, or
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the delivery thereof shall be stayed or enjoined by an order of a court, Escrow Agent is hereby
expressly authorized, in its sole discretion, to obey and comply with all such orders so entered or
issued, which it is advised by legal counsel of its own choosing is binding upon it, whether with
or without jurisdiction, and in the event that Escrow Agent obeys or complies with any such
order it shall not be liable to any of the Parties hereto or to any other person by reason of such
compliance notwithstanding such order be subsequently reversed, modified, annulled, set aside
or vacated.
10.
Miscellaneous. The provisions of this Agreement may be waived, altered,
amended or supplemented only by a writing signed by the Escrow Agent and the Parties.
Neither this Agreement nor any right or interest hereunder may be assigned by any Party without
the prior consent of Escrow Agent and the other Party. This Agreement shall be governed by
and construed under the laws of the State of New York, without regard to its conflicts of law
provisions that would apply the laws of any other jurisdiction, other than Section 5-1401 of the
General Obligations Law of the State of New York. Each Party and Escrow Agent irrevocably
waives any objection on the grounds of venue, forum non-conveniens or any similar grounds and
irrevocably consents to service of process by mail or in any other manner permitted by
applicable law and consents to the jurisdiction of the state and federal courts located in New
York County, New York. To the extent that in any jurisdiction either Party may now or hereafter
be entitled to claim for itself or its assets, immunity from suit, execution, attachment (before or
after judgment) or other legal process, such Party shall not claim, and hereby irrevocably waives,
such immunity. TO THE FULLEST EXTENT PERMITTED BY LAW, ESCROW AGENT
AND EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. ESCROW AGENT
AND EACH PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION
IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH
A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. No party to this Agreement
shall be liable to any other party for losses due to, or if it is unable to perform its obligations
under the terms of this Agreement because of, acts of God, fire, war, terrorism, floods, strikes,
electrical outages, equipment or transmission failure, or other causes reasonably beyond its
control. This Agreement and any joint instructions from the Parties may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument or instruction, as applicable. All signatures of the parties
to this Agreement may be transmitted by facsimile or as a PDF attached to an email, and such
facsimile or PDF will, for all purposes, be deemed to be the original signature of such party
whose signature it reproduces, and will be binding upon such party. If any provision of this
Agreement is determined to be prohibited or unenforceable by reason of any applicable law of a
jurisdiction, then such provision shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions thereof, and any
such prohibition or unenforceability in such jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction. The Parties represent, warrant and
covenant that each document, notice, instruction or request provided by such Party to Escrow
Agent shall comply with applicable laws and regulations. Except as expressly provided in
Section 7 above, nothing in this Agreement, whether express or implied, shall be construed to
give to any person or entity other than Escrow Agent and the Parties any legal or equitable right,
remedy, interest or claim under or in respect of the Fund or this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth above.
PURCHASER
ESCROW AGENT
NEVADA POWER COMPANY d/b/a
NV ENERGY, a Nevada corporation
JPMORGAN CHASE BANK, NA,
By:______________________________
Name:___________________________
Title: ____________________________
By:_______________________________
Name:_____________________________
Title:______________________________
SELLERS
LAS VEGAS COGENERATION LIMITED
PARTNERSHIP, a Nevada limited partnership
By: Desert Arc I, LLC, its General Partner
By:___________________________________
Name:___________________________ Title: ____________________________
LAS VEGAS COGENERATION II, L.L.C.,
a Delaware limited liability company
By:___________________________________
Name:___________________________ Title: ____________________________
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Schedule 1
Telephone Numbers and Authorized Signatures for
Person(s) Designated to Give Instructions and Confirm Funds Transfer Instructions
For Purchaser:
Name
Telephone Number
Signature
1. ________________________________________________________________
2. ________________________________________________________________
3. ________________________________________________________________
For Sellers:
Name
Telephone Number
Signature
1. ________________________________________________________________
2. ________________________________________________________________
3. ________________________________________________________________
FOR YOUR SECURITY, PLEASE CROSS OUT ALL UNUSED SIGNATURE LINES ON THIS
SCHEDULE 1. All instructions, including but not limited to funds transfer instructions, whether transmitted in
writing, by facsimile or set forth in a PDF attached to an email, must include the signature of the
Authorized Representative authorizing said instructions on behalf of such Party.
369922:v1 Form Basic Three Party Escrow Agreement
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SCHEDULE 2 Schedule
Fees for Escrow
Agent Services
Schedule of Fees
and of
Disclosures
for Escrow
Agent Services
Based upon our current understanding of your proposed transaction, our fee proposal is as follows: Account Acceptance Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . …...$ Waived Encompassing review, negotiation and execution of governing documentation, opening of the account, and completion of all due diligence documentation. Payable upon closing. Annual Administration Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,500
The Administration Fee covers our usual and customary ministerial duties, including record keeping, distributions, document compliance and such other duties and responsibilities expressly set forth in the governing documents for each transaction. Payable upon closing and annually in advance thereafter, without pro-ration for partial years.
Extraordinary Services and Out-of Pocket Expenses
Any additional services beyond our standard services as specified above, and all reasonable out-of-pocket
expenses including attorney’s or accountant’s fees and expenses will be considered extraordinary services
for which related costs, transaction charges, and additional fees will be billed at the Escrow Agent’s then
standard rate. Disbursements, receipts, investments or tax reporting exceeding 25 items per year may be
treated as extraordinary services thereby incurring additional charges. The Escrow Agent may impose,
charge, pass-through and modify fees and/or charges for any account established and services provided by
the Escrow Agent, including but not limited to, transaction, maintenance, balance-deficiency, and service
fees, agency or trade execution fees, and other charges, including those levied by any governmental
authority.
Fee Disclosure & Assumptions: Please note that the fees quoted are based on a review of the transaction
documents provided and an internal due diligence review. The Escrow Agent reserves the right to revise,
modify, change and supplement the fees quoted herein if the assumptions underlying the activity in the
account, level of balances, market volatility or conditions or other factors change from those used to set
our fees. Payment of the invoice is due upon receipt
The Fund shall be continuously invested in an interest bearing demand deposit account at JPMorgan
Chase Bank, N.A. Interest bearing demand deposit accounts have rates of interest or compensation that
may vary from time to time as determined by the Escrow Agent.
Disclosures and Agreements
Patriot Act Disclosure. Section 326 of the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT Act”) requires Escrow Agent to implement reasonable
procedures to verify the identity of any person that opens a new account with it. Accordingly, you acknowledge that Section 326
of the USA PATRIOT Act and Escrow Agent’s identity verification procedures require Escrow Agent to obtain information
which may be used to confirm your identity including without limitation name, address and organizational documents
(“identifying information”). You agree to provide Escrow Agent with and consent to Escrow Agent obtaining from third parties
369922:v1 Form Basic Three Party Escrow Agreement
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any such identifying information required as a condition of opening an account with or using any service provided by the Escrow
Agent.
OFAC Disclosure. Escrow Agent is required to act in accordance with the laws and regulations of various jurisdictions relating
to the prevention of money laundering and the implementation of sanctions, including but not limited to regulations issued by the
U.S. Office of Foreign Assets Control. Escrow Agent is not obligated to execute payment orders or effect any other transaction
where the beneficiary or other payee is a person or entity with whom the Escrow Agent is prohibited from doing business by any
law or regulation applicable to Escrow Agent, or in any case where compliance would, in Escrow Agent’s opinion, conflict with
applicable law or banking practice or its own policies and procedures. Where Escrow Agent does not execute a payment order or
effect a transaction for such reasons, Escrow Agent may take any action required by any law or regulation applicable to Escrow
Agent including, without limitation, freezing or blocking funds.
Abandoned Property. Escrow Agent is required to act in accordance with the laws and regulations of various states relating to
abandoned property and, accordingly, shall be entitled to remit dormant funds to any state as abandoned property in accordance
with such laws and regulations.
THE FOLLOWING DISCLOSURES ARE REQUIRED TO BE PROVIDED UNDER APPLICABLE U.S.
REGULATIONS, INCLUDING, BUT NOT LIMITED TO, FEDERAL RESERVE REGULATION D. WHERE
SPECIFIC INVESTMENTS ARE NOTED BELOW, THE DISCLOSURES APPLY ONLY TO THOSE INVESTMENTS
AND NOT TO ANY OTHER INVESTMENT.
Demand Deposit Account Disclosure. Escrow Agent is authorized, for regulatory reporting and internal accounting purposes,
to divide an escrow demand deposit account maintained in the U.S. in which the Fund is held into a non-interest bearing demand
deposit internal account and a non-interest bearing savings internal account, and to transfer funds on a daily basis between these
internal accounts on Escrow Agent’s general ledger in accordance with U.S. law at no cost to the Parties. Escrow Agent will
record the internal accounts and any transfers between them on Escrow Agent’s books and records only. The internal accounts
and any transfers between them will not affect the Fund, any investment or disposition of the Fund, use of the escrow demand
deposit account or any other activities under this Agreement, except as described herein. Escrow Agent will establish a target
balance for the demand deposit internal account, which may change at any time. To the extent funds in the demand deposit
internal account exceed the target balance, the excess will be transferred to the savings internal account, unless the maximum
number of transfers from the savings internal account for that calendar month or statement cycle has already occurred. If
withdrawals from the demand deposit internal account exceeds the available balance in the demand deposit internal account,
funds from the savings internal account will be transferred to the demand deposit internal account up to the entire balance of
available funds in the savings internal account to cover the shortfall and to replenish any target balance that Escrow Agent has
established for the demand deposit internal account. If a sixth transfer is needed during a calendar month or statement cycle, it
will be for the entire balance in the savings internal account, and such funds will remain in the demand deposit internal account
for the remainder of the calendar month or statement cycle.
MMDA Disclosure and Agreement. If MMDA is the investment for the escrow deposit as set forth above or anytime in the future,
you acknowledge and agree that U.S. law limits the number of pre-authorized or automatic transfers or withdrawals or
telephonic/electronic instructions that can be made from an MMDA to a total of six (6) per calendar month or statement cycle or
similar period. Escrow Agent is required by U.S. law to reserve the right to require at least seven (7) days notice prior to a withdrawal
from a money market deposit account.
Unlawful Internet Gambling. The use of any account to conduct transactions (including, without limitation, the acceptance or receipt
of funds through an electronic funds transfer, or by check, draft or similar instrument, or the proceeds of any of the foregoing) that are
related, directly or indirectly, to unlawful Internet gambling is strictly prohibited.
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Schedule 3
Sellers’ Allocation
Las Vegas Cogeneration Limited Partnership
[___]%
Las Vegas Cogeneration II, L.L.C.
[___]%
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EXHIBIT A
Joint Disbursement Direction
JPMorgan Chase Bank, N.A.
Escrow Services
300 S. Grand Ave., 4th Floor, Ste. 470 Los Angeles, CA 90071
Attention: Nelia Lopez
Email Address: (Los Angeles) [email protected]
RE: [Project Delta] Escrow Account #____________
Dear Nelia:
The undersigned hereby give notice (this “Joint Disbursement Direction”) pursuant to
Section 3(a)(i) of that certain Escrow Agreement (the “Agreement”), dated as of [__________],
201_, among JPMorgan Chase Bank, N.A., as escrow agent (“Escrow Agent”), Nevada Power
Company d/b/a NV Energy (“Purchaser”), and Las Vegas Cogeneration Limited Partnership and
Las Vegas Cogeneration II, L.L.C. (collectively, “Sellers”), and direct Escrow Agent to take the
actions set forth below.
Purchaser and Sellers hereby direct Escrow Agent to disburse the amount(s) set forth
below and in the manner set forth below:
Disbursement to Sellers:
Disbursement Amount:
[________________]
Wiring Instructions: [________________]
Disbursement to Purchaser:
Disbursement Amount:
[________________]
Wiring Instructions: [________________]
(signature page follows)
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PURCHASER
NEVADA POWER COMPANY d/b/a
NV ENERGY, a Nevada corporation
By:______________________________
Name:___________________________
Title: ____________________________
SELLERS
LAS VEGAS COGENERATION LIMITED PARTNERSHIP, a Nevada limited partnership By: Desert Arc I, LLC, its General Partner By:___________________________________
Name:___________________________ Title: ____________________________
LAS VEGAS COGENERATION II, L.L.C., a Delaware limited liability company By:___________________________________
Name:___________________________ Title: ____________________________
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EXHIBIT E
FORM OF PARCEL SEPARATION EASEMENT AGREEMENT
[see attached]
Exhibit E
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When recorded, return to:
Nevada Power Company
6226 W. Sahara Ave.
Las Vegas, NV 89146
(SPACE ABOVE RESERVED FOR RECORDING INFORMATION)
NOISE AND STEAM EASEMENT AGREEMENT
This NOISE AND STEAM EASEMENT AGREEMENT (this “Agreement”) is made
and entered into as of [________________], 2014 (the “Effective Date”) by and between SWG
NEVADA REAL ESTATE HOLDINGS, LLC, a Delaware limited liability company
(“Grantor”) and NEVADA POWER COMPANY d/b/a NV ENERGY, a Nevada corporation
(“Grantee”). Each of Grantor and Grantee is sometimes referred to as a “Party” and collectively
as the “Parties”.
RECITALS
A.
Grantee is an electric utility that desires to operate two natural gas-fired,
combined-cycle electric generation plants (collectively, the “Cogeneration Facilities”) on certain
real property located in North Las Vegas, Nevada, as described in the attached Exhibit A and
incorporated herein by this reference (the “Cogeneration Property”).
B.
Each of Las Vegas Cogeneration Limited Partnership and Las Vegas
Cogeneration II, L.L.C. (collectively, “Sellers”) and Grantee is a party to that certain Asset
Purchase Agreement, dated as of April 30, 2014 (the “Purchase Agreement”), pursuant to which,
among other things, Sellers (1) sold and assigned to Grantee substantially all of the assets used in
connection with, and certain specified liabilities associated with, the Cogeneration Facilities, and
(2) caused Grantor to convey to Grantee the Cogeneration Property, all on the terms and subject
to the conditions set forth therein.
C.
The Purchase Agreement requires, as a condition to the closing of the transactions
contemplated therein, the execution and delivery by Grantor of this Agreement.
D.
Grantor and Sellers are affiliates and Grantor has agreed to deliver this Agreement
to Purchaser as a condition to the closing of the transactions contemplated by the Purchase
Agreement.
E.
Grantor is the owner of certain real property contiguous with the Cogeneration
Property, upon a portion of which Grantor maintains a commercial greenhouse, as described in
the attached Exhibit B and incorporated herein by this reference (the “Greenhouse Property”).
The Cogeneration Property and the Greenhouse Property are referred to herein collectively, as
the “Property”, or individually where no distinction is required by the context in which such term
is used.
F.
The operation of the Cogeneration Facilities (the “Plant Operations”) will result in
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the generation of noises and noise levels that may exceed customary levels and which shall be
audible on the Greenhouse Property, and may cause water and steam, including minerals therein,
to spray or drift onto the Greenhouse Property.
G.
Grantor now desires to convey to Grantee, on the terms stated below, a
nonexclusive easement to allow the Plant Operations to generate increased noise levels, without
limitation, which may be audible on the Greenhouse Property, and to cause water and steam,
including minerals therein, to spray or drift onto the Greenhouse Property.
AGREEMENT
NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00), the mutual
covenants and agreements hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties do hereby covenant and
agree as follows:
1.
Grant of Easement. Grantor hereby conveys and grants to Grantee a nonexclusive
easement to allow Grantee (a) to generate on the Cogeneration Property noise and noise levels,
which may be audible on the Greenhouse Property, in all amounts and at all times as reasonably
necessary for the Plant Operations, including, without limitation, repairs and maintenance of the
Cogeneration Facilities; and (b) to cause water and steam, including any amounts of minerals
contained therein, to spray or drift from the Cogeneration Property onto the Greenhouse Property
in all amounts and at all times as reasonably necessary for the Plant Operations (collectively, the
“Noise and Steam Easement”). Without any limitation as to a future determination of what may
be “reasonable” in connection with the noise levels and the water and steam which are sprayed or
drift onto the Greenhouse Property, Grantor acknowledges and agrees that the noise levels and
the water and steam which have sprayed or drifted onto the Greenhouse Property in connection
with the Plant Operations during the two (2) years prior to the date of this Agreement shall be
deemed to be reasonable amounts of the same.
2.
Term of Easement. The Noise and Steam Easement shall be and remain in effect
until the date on which all Plant Operations are permanently discontinued.
3.
Waiver. Excluding any and all claims based upon the negligence or willful
misconduct of Grantee or any other Grantee Parties (as defined below), Grantor, and its
successors and assigns, hereby waives and releases any right, claim, or cause of action that
Grantor previously had, now has, or may have in the future against, and covenants not to sue,
Grantee or its past, present or future officers, directors, shareholders, partners, members,
managers, affiliates, employees, representatives, agents, invitees, mortgagees, lessees,
sublessees, predecessors, successors and assigns (collectively, “Grantee Parties”), as a direct or
indirect result of (a) any noise or noise levels audible on the Greenhouse Property as a result of
the Plant Operations; (b) any water or steam present on or affecting the Greenhouse Property as a
result of the Plant Operations; and (c) any minerals contained in the water or steam that may be
deposited or accumulate on the Greenhouse Property due to prolonged exposure to the water or
steam from the Plant Operations.
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4.
Indemnification. Grantor shall indemnify, defend and hold Grantee and its
officers, directors, shareholders, partners, members, managers, affiliates, employees,
representatives, agents, invitees, mortgagees, successors and assigns harmless from and against
any and all claims, actions, causes of action, demands, damages, liabilities, losses, judgments,
expenses or other costs of any kind or nature whatsoever (including, without limitation,
reasonable attorneys’ fees) by reason of injury to person or property sustained on the Greenhouse
Property arising from or relating to Plant Operations on the Cogeneration Property with respect
to the matters contemplated by the Noise and Steam Easement or this Agreement, except to the
extent caused by the negligence or willful misconduct of Grantee or any other Grantee Parties.
5.
Governing Law. This Agreement shall be governed by the laws of the State of
Nevada, without regard to its conflicts of law provisions.
6.
Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW,
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY FURTHER
WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS
BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE
OR HAS NOT BEEN WAIVED.
7.
Successors and Assigns. The Noise and Steam Easement shall bind Grantor, as
the owner of the Greenhouse Property, for the benefit of Grantee, as the owner of the
Cogeneration Property, and shall run with the land to bind the successor owners of the
Greenhouse Property and to benefit the successor owners of the Cogeneration Property. This
Agreement shall inure to the benefit of and be binding on the successors and assigns of the
Parties hereto. Grantee shall have the right, without Grantor’s consent, to (a) sell, convey, lease,
or assign all or any portion of its interests under this Agreement or the Noise and Steam
Easement to one or more persons or entities that acquire any right or interest in the Cogeneration
Facilities or the Cogeneration Property, and (b) encumber, mortgage, or hypothecate its interests
under this Agreement or the Noise and Steam Easement to one or more lenders or other
financing parties. If an Owner (defined below) transfers all or any portion of the Property owned
by such Owner, the transferee shall automatically be deemed to have assumed and agreed to be
personally bound by the covenants of such Owner contained in this Agreement, and if the
transferring Owner has by such transfer transferred all of such Owner’s ownership interest in
such Property, such transferring Owner shall be released and discharged from all obligations
under this Agreement with respect to such Property that accrue after (but not before) the date of
recordation in the land records of Clark County, Nevada (the “Land Records”) of the instrument
effecting such transfer. As used herein, the term “Owner” means the person that at the time
concerned is the legal owner of record (in the Land Records) of a whole or undivided fee interest
in any portion of any Property. If there is more than one Owner of a Property at the time
concerned, the obligations and liabilities of each such Owner for performance under, and
compliance with, the applicable provisions of this Agreement shall be joint and several.
Notwithstanding any applicable theory relating to a mortgage or deed of trust, the term “Owner”
shall not mean a mortgagee unless and until such mortgagee has acquired title to the Property
concerned pursuant to foreclosure or any arrangement or proceeding in lieu of foreclosure.
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8.
Amendments. This Agreement may be amended, modified or supplemented only
by a written document executed by all of the Parties (or their respective successors or assigns).
9.
No Third Party Beneficiaries. This Agreement is only for the benefit of the
Parties and their respective successors and assigns as set forth in Section 7 above. Except as set
forth in Section 4 above, no other person or entity or property shall be entitled to rely on this
Agreement, receive any benefit herefrom or enforce any provision hereof against any Party (or
their respective successors or assigns).
[Signature pages follow.]
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IN WITNESS WHEREOF, this Agreement has been executed by the Parties as of the
Effective Date.
GRANTOR:
SWG NEVADA REAL ESTATE HOLDINGS,
LLC, a Delaware limited liability company
By: ___________________________
Name: _________________________
Title: __________________________
STATE OF ______________________
)
) ss:
CITY/COUNTY OF ___________________)
The foregoing instrument was acknowledged before me on ________________ ____,
2014 by _______________________________, ____________________________________ of
SWG NEVADA REAL ESTATE HOLDINGS, LLC, a Delaware limited liability company, who
is personally known to me or has provided satisfactory identification, on behalf of the limited
liability company.
My commission expires: _______________________________ Notary Registration No. _____________ [SEAL]
Notary Public
Signature Page to Noise and Steam Easement Agreement
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GRANTEE:
NEVADA POWER COMPANY d/b/a NV
ENERGY, a Nevada corporation
By:
Name:
Title:
STATE OF ______________________
)
) ss:
CITY/COUNTY OF ___________________)
The foregoing instrument was acknowledged before me on ________________ ____,
2014 by _______________________________, ___________________________ of NEVADA
POWER COMPANY D/B/A NV ENERGY, a Nevada corporation, who is personally known to
me or has provided satisfactory identification, on behalf of the corporation.
My commission expires: _______________________________ Notary Registration No. _____________ [SEAL]
Notary Public
Signature Page to Noise and Steam Easement Agreement
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EXHIBIT A
(Description of Cogeneration Property) EXHIBIT A 1
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EXHIBIT B
(Description of Greenhouse Property) EXHIBIT B
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EXHIBIT F
FORM OF SUCCESSOR LIABILITY CERTIFICATE
[see attached]
Exhibit F
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EXHIBIT G
FORM OF GREENHOUSE PROPERTY ROFR
[see attached]
Exhibit G
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When recorded, return to:
Nevada Power Company
6226 W. Sahara Ave.
Las Vegas, NV 89146
(SPACE ABOVE RESERVED FOR RECORDING INFORMATION)
RIGHT OF FIRST REFUSAL AGREEMENT
This RIGHT OF FIRST REFUSAL AGREEMENT (this “Agreement”) is made and
entered into as of [________________], 2014 (the “Effective Date”), by and between SWG
NEVADA REAL ESTATE HOLDINGS, LLC, a Delaware limited liability company
(“Grantor”), to be indexed as a grantor; and NEVADA POWER COMPANY d/b/a NV
ENERGY, a Nevada corporation (“Grantee”), to be indexed as a grantee.
RECITALS
A.
Grantee is an electric utility that desires to operate two natural gas-fired,
combined-cycle electric generation plants (collectively, the “Cogeneration Facilities”) on certain
real property located in North Las Vegas, Nevada, as described in the attached Exhibit A and
incorporated herein by this reference (the “Cogeneration Property”).
B.
Each of Las Vegas Cogeneration Limited Partnership and Las Vegas
Cogeneration II, L.L.C. (collectively, “Sellers”) and Grantee are parties to that certain Asset
Purchase Agreement, dated as of April 30, 2014 (the “Purchase Agreement”), pursuant to which,
among other things, Sellers (1) sold and assigned to Grantee substantially all of the assets used in
connection with, and certain specified liabilities associated with, the Cogeneration Facilities, and
(2) caused Grantor to convey to Grantee the Cogeneration Property, all on the terms and subject
to the conditions set forth therein.
C.
Grantor is an Affiliate (as defined below) of Sellers and is the owner of certain
real property contiguous with the Cogeneration Property, upon a portion of which Grantor
maintains a commercial greenhouse, as described in the attached Exhibit B and incorporated
herein by this reference (the “Greenhouse Property”).
D.
The Purchase Agreement requires, as a condition to the closing of the transactions
contemplated therein, the execution and delivery by Grantor of this Agreement, which provides
to Grantee the Right of First Refusal, as defined below.
F.
Grantor has agreed to deliver this Agreement to Purchaser as a condition to the
closing of the transactions contemplated by the Purchase Agreement, and now desires to convey
to Grantee, on the terms stated below, the Right of First Refusal.
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AGREEMENT
NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00), the mutual
covenants and agreements hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties do hereby covenant and
agree as follows:
1.
Right of First Refusal.
a.
Grantor hereby grants to Grantee a right of first refusal with respect to any
sale or lease of all or any part of the Greenhouse Property (the “Right of First Refusal”), on the
terms and subject to the conditions set forth in this Agreement. The parties hereto agree that this
Agreement shall be filed with the Office of the County Recorder for Clark County, Nevada.
b.
If during the Term (as defined below) of this Agreement Grantor receives
a bona fide offer (an “Offer”) from a third party to purchase or lease all or any part of the
Greenhouse Property, Grantor shall promptly deliver to Grantee a description of the Offer and a
true, correct and complete copy of the written Offer (the “Offer Notice”). Thereafter, Grantee
shall have the right to purchase (if the Offer relates to a purchase of the Greenhouse Property) or
lease (if the Offer relates to a lease of the Greenhouse Property) the Greenhouse Property (or
applicable part thereof), upon the same terms and subject to the same conditions as set forth in
the Offer, by providing written notice to Grantor, within
days after the date of
Grantee’s receipt of the Offer Notice, of Grantee’s election to so purchase or lease the
Greenhouse Property (or applicable part thereof) (the “Notice of Acceptance”).
c.
In the event Grantee does not elect to purchase or lease the Greenhouse
Property (or applicable part thereof) within such
day period, then Grantor shall have
the right to sell or lease the Greenhouse Property (or applicable part thereof) upon the terms and
subject to the conditions set forth in the Offer; provided, however, that, in the event Grantor
shall not have completed such sale or lease within
days after the date
of Grantee’s receipt of the Offer Notice, then the Right of First Refusal shall again apply with
respect to any proposed sale or lease of all or any part of the Greenhouse Property. Further, until
the end of the Term, as set forth in Section 2 below, the Right of First Refusal shall apply to any
other future Offer for the Greenhouse Property.
d.
(i) In the event Grantee elects to purchase the Greenhouse Property (or
applicable part thereof), Grantor will prepare a purchase agreement to be entered into between
Grantor and Grantee for the purchase of the Greenhouse Property (or applicable part thereof)
pursuant to the terms and conditions of the Offer, with terms not set forth in the Offer as are
customary in transactions of this nature and as may be mutually agreed to by Grantor and
Grantee (the “Purchase Agreement”). Unless otherwise agreed to in writing by Grantor and
Grantee, (a) the closing of such purchase (the “Closing”) shall be completed within
days after Grantor’s receipt of the Notice of Acceptance, and (b) at the Closing, Grantor shall
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execute and deliver to Grantee a grant, bargain, sale deed conveying fee simple marketable
record title to such Greenhouse Property to Grantee.
(ii)
In the event Grantee elects to lease the Greenhouse Property (or
applicable part thereof), Grantor will prepare a lease to be entered into between Grantor and
Grantee for the lease of the Greenhouse Property (or applicable part thereof) pursuant to the
terms and conditions of the Offer, with terms not set forth in the Offer as are customary in
transactions of this nature and as may be mutually agreed to by Grantor and Grantee (the
“Lease”). Unless otherwise agreed to in writing by Grantor and Grantee, the parties shall
execute and deliver the Lease within
days after Grantor’s receipt of the Notice
Acceptance.
e.
Except as expressly provided in Section 1(d) above, any such Purchase
Agreement that attempts to change any written terms and conditions contained in the Offer shall
not be deemed a valid agreement to purchase for purposes of this Agreement.
2.
Term. The term of this Agreement (the “Term”) shall begin on the Effective Date
and shall expire on the date which is the earliest of (a) the
anniversary of the
Effective Date, (b) the date on which the Cogeneration Property ceases to be owned by Grantee
or an Affiliate of Grantee and (c) the date on which the Greenhouse Property ceases to be owned
by Grantor or an Affiliate of Grantor. For purposes of this Agreement, (x) an “Affiliate” of any
person means any other person directly or indirectly Controlling, directly or indirectly Controlled
by or under direct or indirect common Control with such person, and (y) “Control” of any person
means the possession, directly or indirectly, of the power either to (i) vote fifty percent (50%) or
more of the securities or interests having ordinary voting power for the election of directors (or
other comparable controlling body) of such person or (ii) direct or cause the direction of
management or policies of such person, whether through the ownership of voting securities or
interests, by contract or otherwise, excluding in each case, any secured lender of such person.
Notwithstanding the foregoing, the term “Affiliate” does not include Berkshire Hathaway Inc. or
any of its affiliates (other than Grantee and any direct or indirect subsidiaries of Grantee), and no
provision of this Agreement shall apply to, be binding on, create any liability of or otherwise
restrict the activities of Berkshire Hathaway Inc. or any of its affiliates (other than Grantee and
any direct or indirect subsidiaries of Grantee).
3.
Inspection; Cooperation. After its election to purchase or lease all or any part of
the Greenhouse Property and prior to the Closing or the execution of the Lease, upon three (3)
days’ written notice to Grantor and during reasonable business hours of Grantor, Grantee and its
agents, employees, designees, representatives and contractors, at Grantee’s sole cost and
expense, shall have the right to do the following: (a) enter upon the Greenhouse Property, to
perform such tests, inspections, surveys and examinations of the Greenhouse Property as Grantee
deems necessary or advisable, and (b) make investigations with regard to title to the Greenhouse
Property, matters of survey, zoning, and other applicable governmental requirements with regard
to the Greenhouse Property and the use thereof (collectively, the “Inspection Rights”). Grantor
shall cooperate with Grantee in Grantee’s activities hereunder, provided that Grantor shall not be
obligated to incur any out-of-pocket expense in connection with such cooperation. Grantor shall
cooperate with Grantee at all times in pursuing and obtaining, at no liability, cost or expense to
3
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Grantor, any and all licenses, permits and approvals necessary or desirable in connection with
Grantee’s intended use of the Greenhouse Property. Grantor further agrees to execute, or join
the execution of, any and all applications (including applications for rezoning, variances and/or
special land use permits), petitions, pleadings, and other instruments or documents pertaining to
such licenses, permits or approvals, provided that Grantor shall not be obligated to incur any
liability or out-of-pocket expense in connection with the foregoing.
4.
Governing Law. This Agreement shall be governed by the laws of the State of
Nevada, without regard to its conflicts of law provisions.
5.
Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW,
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY FURTHER
WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS
BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE
OR HAS NOT BEEN WAIVED.
6.
Successors and Assigns. This Agreement and the Right of First Refusal shall bind
Grantor, as the owner of the Greenhouse Property, for the benefit of Grantee, as the owner of the
Cogeneration Property. Neither party may assign this Agreement or the Right of First Refusal,
except (a) upon the prior written consent of the other Party or (b) to an Affiliate.
7.
Amendments. This Agreement may be amended, modified or supplemented only
by a written document executed by both Grantor and Grantee (or their permitted assigns).
8.
No Third Party Beneficiaries. This Agreement is only for the benefit of the
Grantor and Grantee and their permitted assigns as set forth in Section 6 above. Except as set
forth in Section 6 above, no other person or entity or property shall be entitled to rely on this
Agreement, receive any benefit herefrom or enforce any provision hereof against Grantor or
Grantee (or their permitted assigns).
[Signature pages follow.]
4
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IN WITNESS WHEREOF, this Agreement has been executed by Grantor and Grantee as
of the Effective Date.
GRANTOR:
SWG NEVADA REAL ESTATE HOLDINGS,
LLC, a Delaware limited liability company
By: ___________________________
Name: _________________________
Title: __________________________
STATE OF ______________________
)
) ss:
CITY/COUNTY OF ___________________)
The foregoing instrument was acknowledged before me on ________________ ____,
2014 by _______________________________, ____________________________________ of
SWG NEVADA REAL ESTATE HOLDINGS, LLC, a Delaware limited liability company, who
is personally known to me or has provided satisfactory identification, on behalf of the limited
liability company.
My commission expires: _______________________________ Notary Registration No. _____________ [SEAL]
Notary Public
Signature Page to Right of First Refusal Agreement
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GRANTEE:
NEVADA POWER COMPANY d/b/a NV
ENERGY, a Nevada corporation
By: _______________________
Name: _____________________
Title: ______________________
STATE OF ______________________
)
) ss:
CITY/COUNTY OF ___________________)
The foregoing instrument was acknowledged before me on ________________ ____,
2014 by _______________________________, ___________________________ of NEVADA
POWER COMPANY D/B/A NV ENERGY, a Nevada corporation, who is personally known to
me or has provided satisfactory identification, on behalf of the corporation.
My commission expires: _______________________________ Notary Registration No. _____________ [SEAL]
Notary Public
Signature Page to Right of First Refusal Agreement
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EXHIBIT A
(Description of Cogeneration Property)
EXHIBIT A
1
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EXHIBIT B
(Description of Greenhouse Property)
EXHIBIT B
1
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SELLER’S DISCLOSURE SCHEDULES TO
ASSET PURCHASE AGREEMENT Dated as of April 30, 2014 These disclosure schedules are delivered pursuant to the Asset Purchase Agreement by and
among LAS VEGAS COGENERATION LIMITED PARTNERSHIP, a Nevada limited
partnership, and LAS VEGAS COGENERATION II, L.L.C., a Delaware limited liability
company, and NEVADA POWER COMPANY d/b/a NV ENERGY, dated as of April 30, 2014
(the “Purchase Agreement”). Capitalized terms used herein but not otherwise defined shall have
the meaning ascribed to such terms in the Purchase Agreement.
Except as otherwise provided in the Purchase Agreement, all Schedules are intended to be and
hereby are specifically made a part of the Purchase Agreement. Each exception and other
response set forth in the Schedules is identified by reference to, or has been grouped under a
heading referring to, a specific individual section of the Purchase Agreement, and, except as
otherwise specifically stated with respect to such exception, relates only to such section and to
other sections to the extent that the application of such exception or other response to such other
sections is reasonably apparent on its face without further investigation.
Except as specifically set forth in the Purchase Agreement, the inclusion of any information on
these Schedules shall not be deemed to be an admission or acknowledgement by any Party that
such information is material to the business, financial condition or results of operations of such
Party or that such information includes any act or omission outside the ordinary course of
business of such Party. Nothing herein constitutes an admission of liability or obligation of any
Party or an admission against the interest of any Party.
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Section 1.1(a)
Sellers’ Knowledge
David Rhodes, Vice President of Business Development and Asset Management
Greg Trewitt, Vice President of Operations and Technical Services
Jeff Pangle, Plant Manager
Randy Fox, Director of Environmental Services and Safety
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Section 3.4
Sellers’ Consents
None.
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Section 3.5
Governmental Approvals and Filings
The Parcel Separation Approval.
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Section 3.7
Legal Proceedings
None.
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Section 3.10(a)(i) Real Property – Description of Project Property Las Vegas Cogen I (LV I Project)
The estate or interest in the land described or referred to in the title commitment and covered
therein is a leasehold as created by, and subject to the terms and conditions of the lease from
Black Hills Nevada Real Estate Holdings, LLC, a Delaware limited liability company, lessor, to
Las Vegas Cogeneration Limited Partnership, a Nevada limited partnership, lessee, dated August
31, 2001, which lease, or memorandum thereof, is recorded August 31, 2001 in Book 20010831,
Instrument No. 1563, Official Records, Clark County, Nevada, as to Parcel A; and Fee Simple as
to Parcel B, and Easement as to Parcel C.
Title to said estate or interest in said land is at the effective date of the title commitment vested
in: Las Vegas Cogeneration Limited Partnership, a Nevada limited partnership.
All that certain real property situated in the County of Clark, State of Nevada, described as
follows:
PARCEL A: (Original Construction Area)
A portion of the Northwest Quarter (NW ¼) of the Northeast Quarter (NE ¼) of Section 11,
Township 20 South, Range 61 East, M.D.B. & M., further described as follows:
That portion of Lot One (1) as shown by map thereof in File 73 of Parcel Maps, Page 28,
recorded August 13, 1992 in Book 920813 as Document No. 00934 in the Office of County
Recorder, Clark County, Nevada, described as follows:
Commencing at the Northwest (NW) corner of the Northwest Quarter (NW ¼) of the Northeast
Quarter (NE ¼) of said Section 11; thence North 89°44’28” East, along the North line of the
Northwest Quarter (NW ¼) of the Northeast Quarter (NE ¼) of said Section 11, a distance of
758.46 feet; thence South 00°15’32” East, departing said North line, 40.00 feet to the Point of
Beginning on the South right of way of Alexander Road, (80.00 foot wide ROW), the same
being on the North line of said Lot One (1), Parcel Map File 73, Page 28; thence North
89°44’28” East along said South right of way and said North line of Lot One (1), a distance of
392.64 feet to the Northeast (NE) corner of said Lot One (1); thence South 00°03’23” West,
departing said South right of way and along the East line of Lot One (1) a distance of 376.90
feet; thence South 89°50’58” West, departing said East line, 480.89 feet; thence North 00°15’32”
West, 240.30 feet; thence North 58°12’16” East, 105.98 feet; thence North 00°15’32” West,
80.25 feet to the Point of Beginning.
LESS AND EXCEPTING therefrom any improvements currently located thereon or to be
constructed in the future.
PARCEL B:
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The improvements located on a portion of Lot One (1) as shown by map thereof in File 73 of
Parcel Maps, Page 28, recorded August 13, 1992 in Book 920813 as Document No. 00934 in the
Office of the County Recorder, Clark County, Nevada described as follows:
Commencing at the Northwest (NW) corner of the Northwest Quarter (NW ¼) of the Northeast
Quarter (NE ¼) of said Section 11; thence North 89°44’28” East, along the North line of the
Northwest Quarter (NW ¼) of the Northeast Quarter (NE ¼) of said Section 11, a distance of
758.46 feet; thence South 00°15’32” East, departing said North line, 40.00 feet to the Point of
Beginning on the South right of way of Alexander Road, (80.00 foot wide ROW), the same
being on the North line of said Lot One (1), Parcel Map File 73, Page 28; thence North
89°44’28” East along said South right of way and said North line of Lot One (1), a distance of
392.64 feet to the Northeast (NE) corner of said Lot One (1); thence South 00°03’23” West,
departing said South right of way and along the East line of Lot One (1) a distance of 376.90
feet; thence South 89°50’58” West, departing said East line, 480.89 feet; thence North 00°15’32”
West, 240.30 feet; thence North 58°12’16” East, 105.98 feet; thence North 00°15’32” West,
80.25 feet to the Point of Beginning.
PARCEL C:
Non exclusive easements for the purposes of bringing all necessary utility services, without
limitation electrical power, gas pipelines, water and wastewater pipelines, telephone or other
communications facilities and for the purpose of utilizing the Common Facilities, as set forth in
that certain “Shared Facilities Agreement”, recorded August 31, 2001 in Book 20010831 as
Document No. 01566, Official Records, as amended by the “First Amendment to Shared
Facilities Agreement”, recorded August 27, 2002, in Book 20020827 as Document No. 01195, of
Official Records.
Las Vegas Cogen II (LV II Property)
The estate or interest in the land described or referred to in the title commitment and covered
therein is a leasehold as created by and subject to the terms and conditions of the lease from Las
Vegas Cogeneration Limited Partnership, a Nevada limited partnership, lessor, and Las Vegas
Cogeneration II, L.L.C., a Delaware limited liability company, lessee, dated August 22, 2001,
which lease, or memorandum thereof is recorded August 24, 2001 in Book 20010824 as
Instrument No. 1172, Official Records, Clark County Nevada (as to Parcel A), as assigned to
Black Hills Nevada Real Estate Holdings, LLC, a Delaware limited liability company, pursuant
to that certain Assignment of Lease and Assumption Agreement recorded August 31, 2001 in
Book 20010831 as Instrument No. 01560, as amended and restated by that certain Amended and
Restated Lease and Shared Facilities Agreement dated August 31, 2001, as evidenced by that
certain Memorandum of Amendment to lease dated August 31, 2001 and recorded August 31,
2001 in Book 20010831, as Instrument No. 1564 of official records as to Parcel A; and Fee
Simple as to Parcel B; and Easement as to Parcel C.
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Title to said estate or interest in said land is at the effective date of the title commitment vested
in: Las Vegas Cogeneration II, L.L.C., a Delaware limited liability company.
All that certain real property situated in the County of Clark, State of Nevada, described as
follows:
PARCEL A: (New Construction Area)
A portion of the Northeast Quarter (NE ¼) of Section 11, Township 20 South, Range 61 East,
M.D.B. & M., further described as follows:
That portion of Lot One (1) as shown by map thereof in File 73 of Parcel Maps, Page 28
recorded August 13, 1992 in Book 920813 as Instrument No. 00934 in the Office of the County
Recorder, Clark County, Nevada, described as follows:
Commencing at the Northwest (NW) corner of the Northwest Quarter (NW ¼) of the Northeast
Quarter (NE ¼) of said Section 11; thence North 89°44’28” East along the North line of said
Northwest Quarter (NW ¼) of the Northeast Quarter (NE ¼) of said Section 11, a distance of
64.21 feet; thence South 00°15’32” East, departing said North line, 40.00 feet to the Point of
Beginning on the South right of way line of Alexander Road, (80 foot wide ROW), the same
being the North line of said Lot One (1), Parcel Map 73, Page 28; thence North 89°44’28” East,
along said South right of way line and said North line of Lot One (1), a distance of 694.25 feet;
thence South 00°15’32”East, departing said South right of way and said North line of said Lot
One (1), a distance of 80.25 feet; thence South 58°12’16” West, 105.98 feet; thence South
00°15’32” East 240.30 feet; thence South 89°50’58” West, 198.13 feet; thence North 00°09’03”
West, 81.04 feet; thence South 89°50’58” West, 434.21 feet to the West line of Lot One (1),
same being on the East right of way of Bruce Street (80’ wide ROW); thence North 00°26’15”
East, along the West line of Lot One (1), being the East right of way of Bruce Street, 269.07 feet
to the beginning of a curve concave Southeasterly, having a radius of 25.00 feet; thence
Northeasterly 38.97 feet along said curve, through a central angle of 89°18’13” to the Point of
Beginning.
LESS AND EXCEPTING THEREFROM ANY IMPROVEMENTS CURRENTLY LOCATED
THEREON OR TO BE CONSTRUCTED IN THE FUTURE.
PARCEL B:
THE IMPROVEMENTS located on a portion of Lot One (1) as shown by map thereof in File 73
of Parcel Maps, Page 28 recorded August 13, 1992 in Book 920813 as Instrument No. 00934 in
the Office of the County Recorder, Clark County, Nevada, described as follows:
Commencing at the Northwest (NW) corner of the Northwest Quarter (NW ¼) of the Northeast
Quarter (NE ¼) of said Section 11; thence North 89°44’28” East along the North line of said
Northwest Quarter (NW ¼) of the Northeast Quarter (NE ¼) of said Section 11, a distance of
64.21 feet; thence South 00°15’32” East, departing said North line, 40.00 feet to the Point of
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Beginning on the South right of way line of Alexander Road, (80 foot wide ROW), the same
being the North line of said Lot One (1), Parcel Map 73, Page 28; thence North 89°44’28” East,
along said South right of way line and said North line of Lot One (1), a distance of 694.25 feet;
thence South 00°15’32”East, departing said South right of way and said North line of said Lot
One (1), a distance of 80.25 feet; thence South 58°12’16” West, 105.98 feet; thence South
00°15’32” East 240.30 feet; thence South 89°50’58” West, 198.13 feet; thence North 00°09’03”
West, 81.04 feet; thence South 89°50’58” West, 434.21 feet to the West line of Lot One (1),
same being on the East right of way of Bruce Street (80’ wide ROW); thence North 00°26’15”
East, along the West line of Lot One (1), being the East right of way of Bruce Street, 269.07 feet
to the beginning of a curve concave Southeasterly, having a radius of 25.00 feet; thence
Northeasterly 38.97 feet along said curve, through a central angle of 89°18’13” to the Point of
Beginning.
PARCEL C:
Non exclusive easements for the purposes of bringing all necessary utility services, without
limitation electrical power, gas pipelines, water and wastewater pipelines, telephone or other
communications facilities and for the purpose of utilizing the Common Facilities, as set forth in
that certain “Shared Facilities Agreement”, recorded August 31, 2001 in Book 20010831 as
Document No. 01566, Official Records, as amended by the “First Amendment to Shared
Facilities Agreement”, recorded August 27, 2002, in Book 20020827 as Document No. 01195, of
Official Records.
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Section 3.10(a)(ii) Real Property – Setback Property (attached)
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Setback Property
Parcel Movement 50'
REDACTED PUBLIC VERSION
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Section 3.10(d)
Real Property – Agreements with Governmental Authorities
None.
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Section 3.10(e) Real Property – Agreements Prior to the Closing Date, the following agreements:
1.
Lease Agreement and Grant of Easement among SWG Nevada Real Estate
Holdings, LLC and Sunco, Ltd., as Lessor, and Windset Greenhouses (Nevada) Inc., as Lessee,
dated as of October 1, 2008, as amended from time to time.
2.
Ground Lease Agreement among SWG Nevada Real Estate Holdings, LLC (f/k/a
Black Hills Nevada Real Estate Holdings, LLC), as Lessor, and Sunco, Ltd, as Lessee dated
August 31, 2001.
3.
Ground Lease Agreement between SWG Nevada Real Estate Holdings, LLC
(f/k/a Black Hills Nevada Real Estate Holdings, LLC), as Lessor, and Las Vegas Cogeneration
Limited Partnership, as Lessee, dated August 31, 2001.
4.
Shared Facilities Agreement by and among Las Vegas Cogeneration Company,
Limited Partnership, Sunco, Ltd and Las Vegas Cogeneration II, L.L.C., dated August 31, 2001,
as modified by that certain First Amendment to the Shared Facilities Agreement, dated August
16, 2002.
5.
Amended and Restated Lease and Shared Facilities Agreement by and between
SWG Nevada Real Estate Holdings, LLC (f/k/a Black Hills Nevada Real Estate Holdings, LLC),
as Lessor, and Las Vegas Cogeneration II, L.L.C., as Lessee dated August 31, 2001.
6.
The Financing Liens described in Schedule 1.1(c) to the Purchase Agreement and
other documents securing the interests of the lenders to Sellers’ Affiliate under its credit facility.
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Section 3.10(f)
Real Property – Compliance
None.
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Section 3.11 Fixtures and Equipment - Exceptions Combustion turbines nos. 191-324, 185-163 and 191-336 will be temporarily removed from the Facilities from time to time in connection with the repair of such combustion turbines.
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Section 3.12(a) Warranty Matters Warranty rights associated with the repair of combustion turbines nos. 191-324, 185-163 and
191-336 under that certain Master Services Agreement, Agreement No. tct-13-MSA-6LM-004­
C, between Southwest Generation Operating Company, LLC and Transcanada Turbines, Ltd.,
dated as of February 1, 2013.
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Section 3.14(a) Transferred Permits 1.
Amended Authority to Construct Certificate Registration No. A329 (Modification 3,
Revision 5), issued by Air Pollution Control Division of the Clark County Health
District, dated May 21, 2009, and as modified through the Effective Date.
2.
Part 70 Operating Permit 329, issued by Clark County Department of Air Quality &
Environmental Management, issued on May 14, 2012 (Administrative Permit Revision
on November 20, 2013).
3.
Hazardous Material Permit No. A0638, issued by North Las Vegas Fire Department Fire
Prevention Division 2013 (issued annually). .
4.
Nevada Hazardous Materials Storage Permit No. 29905, issued by Nevada State Fire
Marshal, active as of February 28, 2014 (issued annually).
5.
Stormwater General Permit NVR050000, issued by Bureau of Water Pollution Control of
Nevada Division of Environmental Protection, effective on November 13, 2008.
6.
Class I Wastewater Contribution Permit No. CLV-8, issued by Department of Public
Works of City of North Las Vegas, effective August 1, 2008 through July 31, 2014).
7.
Waste Management Permit No. G3281-XXX-01, issued by Clark County Health District,
granted January 1, 2014 (issued annually).
8.
Conditionally Exempt Small Quantity Generator ID No. NVR000082040, issued by the
Environmental Protection Agency on January 10, 2008.
9.
Facility Spill, Prevention, Control and Countermeasures (SPCC) Plan, on September
2010.
10.
Facility Storm Water Pollution Prevention Plan (SWPPP), on June 2011.
11.
Boiler and Pressure Vessel operating permits for all units licensed from the state of
Nevada department of Business and Commerce.
12.
Acid Rain Permit.
13.
Agreement with the City of North Las Vegas to take Water from the Leavitt Well.
14.
Sewer Connection Permit dated April 21, 1993.
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Section 3.14(b)
Transferred Permits – Exceptions
None.
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Section 3.15 Insurance Policies 1. Commercial Auto Insurance Policy Number (13)7355-79-50 issued by Federal Insurance
Company; Policy Period from July 11, 2013 to July 11, 2014
2. Excess Liability Insurance Policy Number 1000049135-05 issued by Liberty Insurance
Underwriters Inc.; Policy Period from July 11, 2013 to July 11, 2014
3. Property Insurance Policy Number FN078 issued by Factory Mutual Insurance Company;
Policy Period from July 11, 2013 through July 11, 2014
4. General Liability Insurance Policy Number 3584-89-63 CHI issued by Federal Insurance
Company; Policy Period from July 11, 2013 to July 11, 2014
5. Premise Pollution Liability III Insurance Policy Number PPL G24646427002 issued by
ACE American Insurance Company; Policy Period from July 11, 2011 to July 11, 2014
6. Commercial Excess and Umbrella Insurance Policy Number 7985-13-58 issued by
Federal Insurance Company; Policy Period from July 11, 2013 to July 11, 2014
7. Workers Compensation and Employers Liability Policy Number (14)7839-04-85 issued
by Federal Insurance Company; Policy Period from July 11, 2013 to July 11, 2014
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Section 3.15 Insurance Policies PROPERTY LOSS SUMMARY - Valued 2/19/2014
CARRIER
POLICY
TERM
LOSS
LOCATION
London
2008 ­
2009
None
Reported
FM Global
2009 ­
2010
None
Reported
FM Global
2010 ­
2011
None
Reported
FM Global
2011 ­
2012
None
Reported
FM Global
2012 ­
2013
None
Reported
FM Global
2013 ­
2014
Las Vegas I
DATE
OF LOSS
11/4/2013
LOSS
DESCRIPTION
CARRIER
PAYMENT
Found Engine
Damage during
Outage
SOUTHWEST
GENERATION
OWNERSHIP
CLAIMS
Reported as
incident
Only
$0
TOTAL
NUMBER OF
CLAIMS
0
TOTAL
CLAIMS
$0
APPLICABLE
DEDUCTIBLE
$0
$0
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Section 3.16 Environmental Matters 1. LV I Seller received a letter dated February 6, 2008 from the Environmental Protection
Agency (EPA) stating that Unit 1 was subject to the Federal Acid Rain Program. A
consent decree was entered into for this noncompliance and the EPA assessed and LVI
Seller paid a fine of $35,183 to resolve this matter. The consent decree is closed.
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Section 3.16(d) Environmental Permits 1.
Amended Authority to Construct Certificate Registration No. A329 (Modification 3,
Revision 5), issued by Air Pollution Control Division of the Clark County Health
District, dated May 21, 2009, as modified through the Effective Date.
2.
Part 70 Operating Permit 329, issued by Clark County Department of Air Quality &
Environmental Management, issued on May 14, 2012 (Administrative Permit Revision
on November 20, 2013).
3.
Hazardous Material Permit No. A0638, issued by North Las Vegas Fire Department Fire
Prevention Division 2013 (issued annually).
4.
Nevada Hazardous Materials Storage Permit No. 29905, issued by Nevada State Fire
Marshal, active as of February 28, 2014 (issued annually).
5.
Stormwater General Permit NVR050000, issued by Bureau of Water Pollution Control of
Nevada Division of Environmental Protection, effective on November 13, 2008.
6.
Class I Wastewater Contribution Permit No. CLV-8, issued by Department of Public
Works of City of North Las Vegas, effective August 1, 2008 through July 31, 2014).
7.
Waste Management Permit No. G3281-XXX-01, issued by Clark County Health District,
granted January 1, 2014 (issued annually).
8.
Conditionally Exempt Small Quantity Generator ID No. NVR000082040, issued by the
Environmental Protection Agency on January 10, 2008.
9.
Facility Spill, Prevention, Control and Countermeasures (SPCC) Plan, on September
2010.
10.
Facility Storm Water Pollution Prevention Plan (SWPPP), on June 2011.
11.
Acid Rain Permit
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Section 3.18(b) Seller Plans
1. Operations Performance Bonus Plan – 2014, dated December, 2013.
2. Southwest Generation 401(k) Plan.
3. Severance policy which provides severance to each involuntarily terminated employee
equal to 4 weeks of base compensation plus one additional week of base compensation
for each year of service with either Seller or any of their Affiliates.
4. UnitedHealthcare Choice Plus Plan (PPO).
5. UnitedHealthcare Choice Plus Plan (HDHP).
6. United Healthcare Insurance Company Dental Insurance Plan.
7. Southwest Generation Health Reimbursement Arrangement (HRA) Plan.
8. The Southwest Generation Cafeteria Plan.
9. SW Generation EyeMed Vision Care Plan.
10. Southwest Generation Operating Company Accidental Death and Dismemberment,
Optional Life, LTD, Life, STD, and Critical Illness Insurance Plan.
11. Southwest Generation Operating Company Supplemental Accidental Death and
Dismemberment Insurance and Supplemental Dependents’ Accidental Death and
Dismemberment Insurance Plan.
12. Southwest Generation Operating Company Business Travel Accident Insurance Plan.
13. All policies and procedures in the Southwest Generation Operating Company LLC
Employee Handbook.
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Section 3.20
Transferred Intellectual Property – Exceptions
None.
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Section 9.1
Tax Matters
None.
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PURCHASER’S DISCLOSURE SCHEDULES TO
ASSET PURCHASE AGREEMENT Dated as of April 30, 2014 These disclosure schedules are delivered pursuant to the Asset Purchase Agreement by and
among LAS VEGAS COGENERATION LIMITED PARTNERSHIP, a Nevada limited
partnership, and LAS VEGAS COGENERATION II, L.L.C., a Delaware limited liability
company, and NEVADA POWER COMPANY d/b/a NV ENERGY, dated as of April 30, 2014
(the “Purchase Agreement”). Capitalized terms used herein but not otherwise defined shall have
the meaning ascribed to such terms in the Purchase Agreement.
Each exception and other response set forth in the Schedules is identified by reference to, or has
been grouped under a heading referring to, a specific individual section of the Purchase
Agreement, and, except as otherwise specifically stated with respect to such exception, relates
only to such section and to other sections to the extent that the application of such exception or
other response to such other sections is reasonably apparent on its face without further
investigation.
22038577v1
Page 173 of 393
REDACTED PUBLIC VERSION
LVC-1
Section 1.1(a)
Purchasers’ Knowledge
Stacey Kusters, Vice President, Renewable Energy and Origination
William K. Branch, Director, Energy Strategy & Utility Development
Kimberly Williams, Manager, Environmental Sciences
22038577v1
Page 174 of 393
REDACTED PUBLIC VERSION
LVC-1
Section 4.5
Governmental Approvals and Filings
Notice of Consummation to be filed with FERC after Closing.
22038577v1
Page 175 of 393
REDACTED PUBLIC VERSION
LVC-1
Section 4.6
Legal Proceedings
None
22038577v1
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REDACTED PUBLIC VERSION
LVC-1
SCHEDULES TO
ASSET PURCHASE AGREEMENT Dated as of April 30, 2014 DB2/ 24853992.10
Page 177 of 393
REDACTED PUBLIC VERSION
LVC-1
Schedule 1.1(a)
Assigned Facilities Agreements Las Vegas Cogeneration Limited Partnership
1. Large Generator Interconnection Agreement between Nevada Power Company d/b/a NV
Energy and Las Vegas Cogeneration Limited Partnership, dated December 20, 2007.
2. Southwest Gas Corporation Service Agreement for Transportation of Customer Secured
Natural Gas dated January 30, 2013.
3. Agreement between Las Vegas Cogeneration Limited Partnership and City of North Las
Vegas, dated April 5, 1995.
Las Vegas Cogeneration II, LLC
1. Service Agreement Transportation of Natural Gas Under Schedule No. ST-1, between
Southwest Gas Corporation and Las Vegas Cogeneration II, LLC dated April 30, 2001.
2. Interconnection and Operation Agreement, between Nevada Power Company d/b/a NV
Energy and Las Vegas Cogeneration II, LLC, dated May 2, 2001.
Other
Letter Agreement between Teledyne Monitor Labs and Las Vegas Cogeneration Limited
Partnership, dated as of January 20, 2014.
DB2/ 24853992.10
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REDACTED PUBLIC VERSION
LVC-1
Schedule 1.1(b)
Financing Liens Las Vegas Cogeneration Limited Partnership
Leasehold Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture
Filing to secure an indebtedness of the amount stated herein below
Dated
: July 18, 2008
Amount
:
Trustor
: Las Vegas Cogeneration Limited Partnership, a Nevada limited partnership
Trustee
: Chicago Title Agency of Nevada, Inc., a Nevada corporation
Beneficiary : The Royal Bank of Scotland plc, as Collateral Agent
Recorded
: July 18, 2008 in Book 20080718
Document No. : 01450, Official Records.
Jurisdiction
NV, Secretary of
State
Secured Party
Filing Type
The Royal Bank of UCC-1
Scotland PLC, as
Collateral Agent
Filing Number
2008022600-6
Filing Date
07/18/2008
Collateral
All assets of Debtor.
Las Vegas Cogeneration II, L.L.C.
Leasehold Deed of Trust, Security Agreement, Assignment, Fixture Filing, and Financing
Statement
Dated
: August 26, 2002
Trustor
: Las Vegas Cogeneration II, L.L.C., a Delaware limited liability company
Trustee
: Lawyers Title of Nevada, Inc., a Nevada corporation
Beneficiary : Nevada Power Company
Recorded
: June 25, 2004 in Book 20040625
Document No. : 05189, Official Records.
An Agreement (and the provisions contained therein) which states that said Lease is subordinate to the Deed of
Trust recorded July 18, 2008, in Book 20080718 as Document No. 01338, of Official Records.
Recorded
:July 24, 2008 in Book 20080724
Document No.
:01237, Official Records.
DB2/ 24853992.10
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REDACTED PUBLIC VERSION
LVC-1
Leasehold Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture
Filing to secure an indebtedness of the amount stated herein below
Dated
: July 18, 2008
Amount
:
Trustor
: Las Vegas Cogeneration II, L.L.C., a Delaware limited liability company
Trustee
: Chicago Title Agency of Nevada, Inc., a Nevada corporation
Beneficiary : The Royal Bank of Scotland plc, as Collateral Agent
Recorded
: July 18, 2008 in Book 20080718
Document No. : 01338, Official Records.
Jurisdiction
DE, Secretary of
State
Secured Party
Nevada Power
Company
Filing Type
UCC-1
DE, Secretary of
State
The Royal Bank of UCC-1
Scotland PLC, as
Collateral Agent
Filing Number
4164879
Filing Date
06/15/2004
20082486932
07/18/2008
Collateral
Collateral as set forth in
the Security Agreement by
and between Debtor and
Secured Party dated
December 19, 2003, and
as set forth in Exhibit A to
the UCC-1.
All assets of Debtor.
Filing Number
20082486809
Filing Date
07/18/2008
Collateral
All assets of Debtor.
Filing Number
20082486775
Filing Date
07/18/2008
Collateral
All assets of Debtor.
Filing Number
20082486759
Filing Date
07/18/2008
Collateral
All assets of Debtor.
Desert Arc I, LLC
Jurisdiction
DE, Secretary of
State
Secured Party
Filing Type
The Royal Bank of UCC-1
Scotland PLC, as
Collateral Agent
Desert Arc II, LLC
Jurisdiction
DE, Secretary of
State
Secured Party
Filing Type
The Royal Bank of UCC-1
Scotland PLC, as
Collateral Agent
SWG Nevada, LLC
Jurisdiction
DE, Secretary of
State
Secured Party
Filing Type
The Royal Bank of UCC-1
Scotland PLC, as
Collateral Agent
DB2/ 24853992.10
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REDACTED PUBLIC VERSION
LVC-1
SWG Nevada Real Estate Holdings, LLC
Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing to secure
an indebtedness of the amount stated herein below
Dated
: July 18, 2008
Amount
:
Trustor
: Black Hills Nevada Real Estate Holdings, LLC, a Delaware limited liability
company
Trustee
: Chicago Title Agency of Nevada, Inc., a Nevada corporation
Beneficiary : The Royal Bank of Scotland plc, as Collateral Agent
Recorded
: July 18, 2008 in Book 20080718
Document No. :01278, Official Records.
Affects: Fee Estate
Jurisdiction
DE, Secretary of
State
Secured Party
Filing Type
The Royal Bank of UCC-1
Scotland PLC, as
Collateral Agent
Filing Number
20082486924
Filing Date
07/18/2008
Collateral
All assets of Debtor.
Filing Number
20082486783
Filing Date
07/18/2008
Collateral
All assets of Debtor.
SWG Nevada Operations, LLC
Jurisdiction
DE, Secretary of
State
Secured Party
Filing Type
The Royal Bank of UCC-1
Scotland PLC, as
Collateral Agent
Las Vegas Cogeneration Energy Financing, L.L.C.
Security Agreement, dated as of December 19, 2003, by and between Las Vegas Cogeneration
Energy Financing Company, L.L.C. and Nevada Power Company
DB2/ 24853992.10
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REDACTED PUBLIC VERSION
LVC-1
Schedule 1.1(c) Permitted Liens Prior to the Closing Date, all liens and exceptions contained in that certain Preliminary Title
Report from Lawyers Title dated March 11, 2014. As of the Closing Date, only the standard
preprinted title exceptions that appear in the Title Insurance Commitment and the following
exceptions, subject to receipt by the Title Company of the Survey described in Section 5.1(e) of
the Purchase Agreement:
1. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance
thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b) or (c) are
shown by the Public Records, provided that the forgoing do not materially detract from the value of, or
materially interfere with the present use of the Purchased Assets in the aggregate.
2. Any taxes that may be due, but not assessed, for new construction on the Real Property which can be assessed
on the unsecured property rolls, in the Office of the Clark County Assessor, per Nevada Revised Statutes
361.260.
3. Mineral rights, reservations, easements and exclusions in patent from the United States of America.
Recorded
: January 10, 1921 in Book 7 of Deeds, Page 259
Document No. : 14918, Official Records.
4. An Easement affecting a portion of the Real Property for the purpose stated therein, and incidental purposes
In Favor of
: City of North Las Vegas
For
: sloping embankment
Recorded
: April 8, 1981 in Book 1382
Document No. : 1341680, Official Records.
5. Dedications and Easements as indicated or delineated on the Plat of said Parcel Map on file in File 73 of Parcel
Maps, Page 28, Official Records.
6. The terms, covenants, conditions, easements and provisions as contained in an instrument, entitled
"Construction Easement" executed by Al Levy and Las Vegas Cogeneration Limited Partnership
Recorded
: April 6, 1993 in Book 930406
Document No. : 01327, Official Records.
As affected by Amended Construction Easement recorded April 14, 1993, in Book 930414 as Document No.
00960, of Official Records.
7. An Easement affecting a portion of the Real Property for the purposes stated herein, and incidental purposes
In Favor of
: Nevada Power Company
For
: power lines
Recorded
: August 10, 1993 in Book 930810
Document No. : 00826, Official Records.
8. An Easement affecting a portion of the Real Property for the purposes stated herein, and incidental purposes
In Favor of
: Nevada Power Company
For
: power lines
Recorded
: September 3, 1993 in Book 930903
Document No. : 00852, Official Records.
DB2/ 24853992.10
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REDACTED PUBLIC VERSION
LVC-1
9. The terms, covenants, conditions, easements and provisions as contained in an instrument, entitled "Grant of
Easement Agreement" executed by Las Vegas Cogeneration Limited Partnership and Southwest Gas
Corporation
Recorded
: April 10, 1995 in Book 950410
Document No. : 00853, Official Records.
10. An Easement affecting a portion of the Real Property for the purpose stated herein, and incidental purposes
In Favor of
: City of North Las Vegas
For
: public utilities
Recorded
: April 10, 2001 in Book 20010410
Document No. : 00403, Official Records.
11. An Easement affecting a portion of the Real Property for the purpose stated herein, and incidental purposes
In Favor of
: City of North Las Vegas
For
: roadway and driveways
Recorded
: April 10, 2001 in Book 20010410
Document No. : 00404, Official Records.
12. A Right of Entry affecting a portion of the Real Property for the purposes stated herein, and incidental purposes
In Favor of
: Nevada Power Company
For
: power lines
Recorded
: September 12, 2001 in Book 20010912
Document No. : 01024, Official Records.
13. An Easement affecting a portion of the Real Property for the purpose stated herein, and incidental purposes
In Favor of
: City of North Las Vegas
For
: drainage
Recorded
: December 11, 2001 in Book 20011211
Document No. : 00868, Official Records.
14. An Easement affecting a portion of the Real Property for the purposes stated herein, and incidental purposes
In Favor of
: Nevada Power Company
For
: power lines
Recorded
: September 24, 2004 in Book 20040924
Document No. : 02404, Official Records.
DB2/ 24853992.10
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REDACTED PUBLIC VERSION
LVC-1
Schedule 1.1(d)
Requested Consents 1. Agreement between Las Vegas Cogeneration Limited Partnership and City of North Las
Vegas dated April 5, 1995.
2. Southwest Gas Corporation Service Agreement for Transportation of Customer Secured
Natural Gas dated January 30, 2013.
3. Service Agreement Transportation of Natural Gas Under Schedule No. ST-1, between
Southwest Gas Corporation and Las Vegas Cogeneration II, LLC dated April 30, 2001.
4. Letter Agreement between Teledyne Monitor Labs and Las Vegas Cogeneration Limited
Partnership, dated as of January 20, 2014.
DB2/ 24853992.10
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REDACTED PUBLIC VERSION
LVC-1
Schedule 1.1(e)
Transferred Intellectual Property
CEMSͲTeledyneMonitorLabsv.6.0
CEMSͲContinueEmissionMonitoringServer
DB2/ 24853992.10
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REDACTED PUBLIC VERSION
LVC-1
Schedule 1.1(f)
Project Employees
Name
JobTitle
PLANTADMINISTRATIVEASSISTANT
OPERATIONS&MAINTENANCE
TECHNICIANI
OPERATIONS&MAINTENANCE
TECHNICIAN
OPERATIONS&MAINTENANCE
TECHNICIANI
TURBINEMECHANIC
OPERATIONS&MAINTENANCEMANAGER
TURBINEMECHANIC
OPERATIONS&MAINTENANCE
TECHNICIANI
OPERATIONS&MAINTENANCE
TECHNICIANI
OPERATIONS&MAINTENANCE
TECHNICIANI
OPERATIONS&MAINTENANCE
TECHNICIANI
PLANTMANAGER
OPERATIONS&MAINTENANCE
TECHNICIANI
OPERATIONS&MAINTENANCE
TECHNICIANI
OPERATIONS&MAINTENANCE
TECHNICIANI
OPERATIONS&MAINTENANCE
TECHNICIANI
DB2/ 24853992.10
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REDACTED PUBLIC VERSION
Name
LVC-1
JobTitle
OPERATIONS&MAINTENANCE
TECHNICIANI
OPERATIONS&MAINTENANCE
TECHNICIANI
OPERATIONS&MAINTENANCE
TECHNICIANI
DB2/ 24853992.10
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REDACTED PUBLIC VERSION
LVC-1
Schedule 1.1(g)
SO2 Allowances
Eight (8) sulfur dioxide allowances pursuant to the United States Environmental Protection
Agency Acid Rain Program, Account No. 010761FACLTY.
DB2/ 24853992.10
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REDACTED PUBLIC VERSION
LVC-1
Schedule 2.1.3
Excluded Assets 1. Excluded Contracts set forth in Schedule 5.11.
2. All Intellectual Property other than Transferred Intellectual Property.
3. The Greenhouse Property and related facilities, other than (a) Setback Property as
described on Schedule 5.12(a) and (b) the Greenhouse Building located on the Setback
Property.
4. SWG trademarks and logos
5. The LM6000 Maintenance Dolly – S/N 6000-D-22
6. The LM6000 Shipping Container – S/N 0102
7. The following software and other information technology:
MicrosoftWindows7w/ServicePack1(Qty5)
MicrosoftOffice2007w/ServicePack3(Qty13)
MicrosoftOffice2013w/ServicePack1(Qty2)
AdobeAcrobatPro9(Qty4)
AvastAntiͲVirus
OSIsoftPII
MicrosoftVisio2007ͲStandard(Qty1)
MPLSProvider(Windstream)
InternetProvider(Comcast/TWTelecom)
CorpDomain
RiverBedTrafficOptimizer
IDS/IPSAppliances
SPAMFiltering
VendorVPNAccess
PIIͲRealtimeData&EventMonitoring
COINSAccounting/InventorySystem
mPulseͲCMMSSystem
eLogsͲDuty/MaintenanceLog
SharePointͲTaskManagement/ComplianceDocumentStorage
MicrosoftOffice2010
PIIͲRealtimeData&EventMonitoring(OSISoft)
MicrosoftExchange2010w/ServicePack2
MicrosoftServer2008Standardw/ServicePackR2(Qty1)
MicrosoftServer2008w/ServicePackR2(Qty1)
MicrosoftServer2003w/ServicePackR2(Qty1)
MSSQL2005
MSSQL2008R2
MSSQL2012
AvastAntiͲVirus
MSDSOnlinesoftwareandcontract
DB2/ 24853992.10
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REDACTED PUBLIC VERSION
LVC-1
Schedule 5.2(b)
Permitted Actions Sellers may enter into a refinancing of Sellers’ Parent Guarantor’s corporate credit facility.
Sellers may encumber, assign as collateral or otherwise grant a lien on or security interest in the
Purchased Assets from time to time to the collateral agent under such credit facility; provided,
that at the Closing, Sellers shall convey the Purchased Assets to Purchaser free and clear of all
Liens other than Permitted Liens.
Sellers may enter into an energy management agreement with a third party which agreement will
be an Excluded Contract.
DB2/ 24853992.10
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REDACTED PUBLIC VERSION
LVC-1
Schedule 5.2(b)(iii)
Material Assigned Facilities Agreements 1. Southwest Gas Corporation Service Agreement for Transportation of Customer Secured
Natural Gas dated January 30, 2013.
2. Service Agreement Transportation of Natural Gas Under Schedule No. ST-1, between
Southwest Gas Corporation and Las Vegas Cogeneration II, LLC dated April 30, 2001.
3. Letter Agreement between Teledyne Monitor Labs and Las Vegas Cogeneration Limited
Partnership, dated as of January 20, 2014
DB2/ 24853992.10
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REDACTED PUBLIC VERSION
LVC-1
Schedule 5.11(a)
Excluded Contracts Each of the contracts listed on Schedule 5.11(b) and the following contracts:
1. Software License and Services Agreement, Agreement # 1015136, dated as of October 15,
2009, between OSIsoft, LLC and Southwest Generation Operating Company, LLC.
2. Application of Agricultural Use Assessment" executed by Las Vegas Cogeneration Limited
Partnership and Sunco, Ltd., recorded: June 18, 1997 in Book 970618, Document No.: 01412,
Official Records.
3. Base Contract for Sale and Purchase of Natural Gas between Las Vegas Cogeneration Limited
Partnership and Enserco Energy Inc., dated May 5, 2009.
4. Lease Agreement and Grant of Easement by and among SWG Nevada Real Estate Holdings,
LLC, Sunco, Ltd., L.L.C. and Windset Greenhouses (Nevada), Inc. dated as of October 1,
2008.
5. Letter Amendment to Lease Agreement and Grant of Easement dated October 1, 2008 by and
among SWG Nevada Real Estate Holdings, LLC, Sunco, Ltd., L.L.C. and Windset
Greenhouses (Nevada), Inc. dated November 4, 2013.
6. Letter Amendment to Lease Agreement and Grant of Easement dated October 1, 2008 by and
among SWG Nevada Real Estate Holdings, LLC, Sunco, Ltd., L.L.C. and Windset
Greenhouses (Nevada), Inc. dated December 12, 2013.
7. Letter Amendment to Lease Agreement and Grant of Easement dated October 1, 2008 by and
among SWG Nevada Real Estate Holdings, LLC, Sunco, Ltd., L.L.C. and Windset
Greenhouses (Nevada), Inc. dated January 27, 2014.
8. Demineralized Water Supply and Thermal Energy Purchase and Sale Agreement between Las
Vegas Cogeneration Limited Partnership and Windset Greenhouses (Nevada) Inc. dated
October 1, 2008.
DB2/ 24853992.10
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REDACTED PUBLIC VERSION
LVC-1
Schedule 5.11(b)
Terminated Contracts
1. Confirmation Agreement by and between Nevada Power Company d/b/a NV Energy and Las
Vegas Cogeneration Limited Partnership, dated December 4, 2007.
a. First Amendment to Confirmation dated December 30, 2013.
b. Letter Amendment to First Amendment to Confirmation dated January 7, 2014.
2. Standby Service Agreement between Nevada Power Company d/b/a NV Energy and Las
Vegas Cogeneration Limited Partnership, dated October 13, 2011.
3. Confirmation Agreement between Nevada Power Company d/b/a NV Energy and Las Vegas
Cogeneration II, LLC, dated December 30, 2013 (provided pursuant to Western Systems
Power Pool Agreement, version effective October 13, 2013).
4. Standby Service Agreement between Nevada Power Company d/b/a NV Energy and Las
Vegas Cogeneration II, LLC, dated October 13, 2011.
5. Ground Lease Agreement between SWG Nevada Real Estate Holdings, LLC f/k/a Black Hills
Nevada Real Estate Holdings, LLC and Las Vegas Cogeneration Limited Partnership dated
August 31, 2001.
a. Memorandum of Lease between Black Hills Nevada Real Estate Holdings, LLC and
Las Vegas Cogeneration Limited Partnership recorded August 31, 2001 in Book
20010831 as Instrument No. 01563, Official Records, Clark County, Nevada.
6. Shared Facilities Agreement by and among Las Vegas Cogeneration Limited Partnership,
Sunco, Ltd., L.L.C. and Las Vegas Cogeneration II, L.L.C. dated August 31, 2001 and
recorded August 31, 2001 in Book 20010831 as Instrument No. 01566, Official Records,
Clark County, Nevada as amended by the First Amendment to the Shared Facilities
Agreement dated August 16, 2002 and recorded August 16, 2002 in Book 20020827 as
Instrument No. 01195, Official Records, Clark County, Nevada; including all easements
granted under the Shared Facilities Agreement, as amended.
a. First Amendment to the Shared Facilities Agreement dated August 16, 2002 and
recorded August 27, 2002 in Book 20020827 as Instrument No. 01195, Official
Records, Clark County, Nevada.
7. Memorandum of Lease by and between Las Vegas Cogeneration Limited Partnership, as
Landlord, and Las Vegas Cogeneration II, L.L.C., as Tenant, dated August 22, 2001 and
recorded August 24, 2001 in Book 20010824 as Instrument No. 01172, Official Records,
Clark County, Nevada.
8. Amended and Restated Lease and Shared Facilities Agreement by and between Las Vegas
Cogeneration II, L.L.C., as Lessee, and Black Hills Nevada Real Estate Holdings, LLV, as
Lessor, dated August 31, 2001.
DB2/ 24853992.10
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REDACTED PUBLIC VERSION
LVC-1
a. Memorandum of Amendment to Lease by and among Black Hills Nevada Real Estate
Holdings, L.L.C., Las Vegas Cogeneration Limited Partnership and Las Vegas
Cogeneration II, L.L.C. dated August 31, 2001 and recorded August 31, 2001 in Book
20010831 as Instrument No. 01564, Official Records, Clark County, Nevada.
9. Equipment Lease by and between Las Vegas Cogeneration Energy Financing Company,
L.L.C., as Lessor, and Las Vegas Cogeneration II, L.L.C., as Lessee, dated October 31, 2001.
10. Ground Lease Agreement by and between Black Hills Nevada Real Estate Holdings, LLC and
Sunco, Ltd., L.L.C. dated August 31, 2001.
c. Memorandum of Lease by and among Black Hills Nevada Real Estate Holdings,
L.L.C. and Sunco, Ltd., LLC dated August 31, 2001 and recorded August 31, 2001 in
Book 20010831 as Instrument No. 01565, Official Records, Clark County, Nevada.
11. Training Service License Agreement, between Vivid Learning Systems, Inc. and Las Vegas
Cogeneration Limited Partnership, effective November 1, 2003.
d. Training Service License Agreement Modification
12. Letter Agreement between Las Vegas Cogeneration Limited Partnership and El Rancherito
Lawn Maintenance, dated August 14, 2007.
13. Inspection Agreement, between Las Vegas Cogeneration II, L.L.C. and Desert Fire Protection,
L.P., dated as of February 13, 2014.
14. Purchase Order, between Canyon Compressor and Las Vegas Cogeneration II, L.L.C., dated
February 25, 2014.
15. Purchase Order, between WW Williams and Las Vegas Cogeneration Limited Partnership,
dated February 11, 2014.
16. Purchase Order, between NGH Power Systems Inc. and Las Vegas Cogeneration Limited
Partnership, dated February 25, 2014.
17. Purchase Order, between NGH Power Systems Inc. and Las Vegas Cogeneration II, L.L.C.,
dated February 25, 2014.
18. Priority Maintenance Service Agreement, between Southwest Air Conditioning Service, Inc.
and Las Vegas Cogeneration, dated as of January 17, 2011.
19. Cleaning Contract, between Coverall North America, Inc. d/b/a Coverall Cleaning Concepts
and Las Vegas Cogeneration, dated as of September 6, 2007, as amended.
20. Letter Agreement between Safe Electronics, Inc. and Southwest Generation Operating
Company, LLC, dated as of February 22, 2011.
DB2/ 24853992.10
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REDACTED PUBLIC VERSION
LVC-1
21. Agreement between Grove Madsen Industries and Las Vegas Cogeneration Limited
Partnership.
22. Letter of Agency between Las Vegas Cogeneration Limited Partnership and Las Vegas
Cogeneration Limited Partnership, dated September 23, 2013.
23. Letter of Agency between Las Vegas Cogeneration II, L.L.C. and Las Vegas Cogeneration II,
L.L.C., dated December 12, 2013.
DB2/ 24853992.10
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REDACTED PUBLIC VERSION
LVC-1
Schedule 5.12(a)
Parcel Separation Map
(attached)
DB2/ 24853992.10
Page 196 of 393
LVC-1
Parcel Movement 50'
REDACTED PUBLIC VERSION
Page 197 of 393
REDACTED PUBLIC VERSION
LVC-1
Schedule 5.12(b)
Parcel Separation Tasks 1) All utilities for the benefit of the Greenhouse Property, including but not limited to
electric, natural gas, water and sewer services, shall be completely removed from the
Real Property.
a. No easements for utilities for the benefit of Greenhouse Property shall encumber
the Real Property.
b. The Greenhouse Property shall not have any of its sewer or storm drain systems
located on the Real Property. The grading on the Real Property and the
Greenhouse Property shall be such that storm water runoff does not cross from the
Greenhouse Property to the Real Property or from the Real Property to the
Greenhouse Property. The Storm Water Pollution Prevention Plan for the Project
shall be updated and approved accordingly.
c. The storm water discharge and water discharge permits for the Facilities must be
modified to include the LV Cogen Plants only. Sellers shall provide Purchaser
with the opportunity to review and approve the proposed discharge permit
modifications prior to filing with the City of North Las Vegas, which approval
shall not be unreasonably withheld or delayed.
2) The existing reverse osmosis water treatment system shall remain with the Project. All
piping from the reverse osmosis water treatment system to service the greenhouse shall
be removed and property returned to a condition similar to surrounding surface area.
3) The greenhouse heat boiler and auxiliary boilers shall be removed from the Real
Property.
4) The emergency back-up generator shall be removed from the Real Property.
5) Sellers shall modify the air permit for the Project to reflect removal of the boilers and
back-up generator. Sellers shall provide Purchaser with the opportunity to review and
approve the proposed air permit modifications prior to filing with the Clark County
Department of Air Quality, which approval shall not be unreasonably withheld or
delayed.
6) Any greenhouse equipment located in Pump House A shall be removed from the Real
Property, including MCC associated with the greenhouse, and any holes or damage to
Pump House A because of such removal shall be repaired.
7) The greenhouse thermal storage tanks shall be included in the Facilities and remain on
the Real Property.
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LVC-1
8) The Greenhouse Building shall be included in the Facilities and remain on the Real
Property; provided, however, all associated equipment located in the building shall be
removed from the Real Property. The building shall be cleaned.
9) An eight foot high chain link fence topped with barbed wire and installed in accordance
with typical fencing practices, running from west to east along the line separating the
Project Property from Greenhouse Property.
DB2/ 24853992.10
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REDACTED PUBLIC VERSION
LVC-1
Schedule 5.16 Release of Credit Support Standby Letter of Credit Number
in the original amount of
issued
by Royal Bank of Scotland in favor of Southwest Gas Corporation pursuant to that certain
Service Agreement Transportation of Natural Gas Under Schedule No. ST-1, between Southwest
Gas Corporation and Las Vegas Cogeneration II, L.L.C. dated April 30, 2001.
DB2/ 24853992.10
Page 200 of 393
LVC-2
Page 201 of 393
ECONOMIC ANALYSIS
LVC-2
CONFIDENTIAL MATERIALS
FILED UNDER SEAL
Page 202 of 393
GEN-1
Page 203 of 393
REDACTED PUBLIC VERSION
NVE South Gen Unit Characteristics Table.xlsx
GEN-1
Nevada Power Generation Summary
Plant
Clark 1
Clark 2
Clark 3
Clark 4
Clark 5
Clark 6
Clark 7
Clark 8
Clark 9
Clark 10
Clark 11 - 22
Harry Allen 3
Harry Allen 4
Harry Allen CC
Lenzie CC 1
Lenzie CC 2
RG 1
RG 2
RG 3
RG 4
Silverhawk CC
Higgins CC
Sunrise 1
Sunrise 2
Navajo 1
Navajo 2
Navajo 3
I/S Date
1955
1957
1961
1973
1979
1979
1980
1982
1993
1994
2008
1995
2006
2011
2006
2006
1965
1968
1976
1983
2004
2004
1964
1974
1974
1975
1976
Projected
Retirement
Date
Retired
Retired
Retired
2020
2034
2034
2033
2033
2033
2034
2038
2025
2036
2046
2041
2041
2020
2020
2020
2023
2039
2039
Retired
Retired
2024
2025
2026
Heat Rate
(BTU/kWh)
Winter/Summer
Net Cap (MW)
42 / 42
69 / 66
70 / 67
63 / 55
84 / 73
84 / 73
84 / 73
84 / 73
250 / 230
250 / 230
57 / 52
84 / 74
84 / 74
524 / 510
601 / 585
601 / 585
100 / 100
100 / 100
100 / 100
257 / 257
599 / 560
600 / 550
85 (NPC share)
85 (NPC share)
85 (NPC share)
Type
STG/Gas
STG/Gas
STG/Gas
GTG/Gas
GTG/Gas
GTG/Gas
GTG/Gas
GTG/Gas
CC/Steam
CC/Steam
GTG/Gas
GTG/Gas
GTG/Gas
CC/Gas
CC/Gas
CC/Gas
STG/Coal
STG/Coal
STG/Coal
STG/Coal
CC/Gas
CC/Gas
STG/Gas
GTG/Gas
STG/Coal
STG/Coal
STG/Coal
* Nevada Power is proposing to retire Reid Gardner Units 1-3 and Unit 4 by December 31, 2014 and December 31, 2017, respectively.
Nevada Power is also proposing to eliminate its share in Navajo Generating Station by December 31, 2019.
Page 204 of 393
REDACTED PUBLIC VERSION
GEN-1
NVE South Gen Unit Characteristics Table.xlsx
Min. Net
Capacity (MW)
Unit
Assumed Net Capability
(MW)
Winter
Summer
Peak
Clark Complex
Clark 4
Clark 5
Clark 6
Clark 7
Clark 8
Clark 9 CC - (Ck 7,8 & 9)
Clark 10 CC - (Ck 5,6 & 10)
Clark 11-22
GT
GT
GT
GT
GT
CC
CC
GT
20
35
35
31
31
58/115
58/115
35
63
84
84
84
84
250
250
57
55
73
73
73
73
230
230
52
54
72
72
72
72
215
215
51.5
Reid Gardner Station
Reid Gardner 1
Reid Gardner 2
Reid Gardner 3
ST
ST
ST
50
50
50
100
100
100
100
100
100
100
100
100
ST
25 (NPC)
100 (Total)
25 (NPC)
257 (Total)
25 (NPC)
257 (Total)
25 (NPC)
257 (Total)
GT
GT
ST
100
100
CC
GT
GT
ST
300
100
100
CC
300
168
168
165
100
601
168
168
165
100
601
165
165
160
95
585
165
165
160
95
585
158
158
143
85
551
158
158
143
85
551
GT
GT
ST
100
100
170
170
159
100
157
157
151
95
145
145
140
90
170 (1x1) /
315 (2x1)
599
560
520
35
35
84
84
74
74
72
72
524
510
484
600
550
530
Reid Gardner 4
Chuck Lenzie Complex
Lenzie 1
Lenzie 2
Lenzie STG1
Lenzie 1 duct burn
Lenzie Power Block 1
Lenzie 3
Lenzie 4
Lenzie STG2
Lenzie 2 duct burn
Lenzie Power Block 2
Silverhawk Station
Silverhawk A
Silverhawk B
Silverhawk STG
Silverhawk duct burn
Silverhawk Combined Cycle CC
Harry Allen Station
Harry Allen 3
Harry Allen 4
GT
GT
135 (1x1) /
275 (2x1)
Harry Allen Power Block
CC
Higgins Station
Higgins Combined Cycle
CC
165 (1x1) /
350 (2x1)
RED indicates change from last version.
Page 205 of 393
REDACTED PUBLIC VERSION
GEN-1
NVE South Gen Unit Characteristics Table.xlsx
Unit
Min. Run
Time
(hrs)
Min. Down
Time
(hrs)
Minimum
Time from CS
to
On-Line
(Normal)
1
1
1
1
1
4
4
0.5
0.5
0.5
0.5
0.5
1
1
5 min
Clark Complex
Clark 4
Clark 5
Clark 6
Clark 7
Clark 8
Clark 9 CC - (Ck 7,8 & 9)
Clark 10 CC - (Ck 5,6 & 10)
Clark 11-22
-
AGC Range
(MW)
AGC Ramp
Rate (MW/Min)
Slow/Fast
Control
Operator
Ramp Rate
(MW/Min)
Slow/Fast
Forecasted
EFOR as
approved by
Aug 2013
ERC
12 min
34 min
34 min
34 min
34 min
4 hrs
4 hrs
20-53, 60-81
20-53, 60-81
20-53, 60-81
20-53, 60-81
52-250
52-250
3/11
3/11
3/11
3/11
10
10
10
10
10
7/25
9/36
9/36
9/36
9/36
58/123
58/123
10 min
35-50
10 (up)
5 (down)
25/31
300-550
10
220/550
Gross MVAR
Capability
Leading /
Lagging
Chuck Lenzie Complex
Lenzie Combined Cycle 1
Lenzie Combined Cycle 2
6 (actual) /
24 (model)
6 (actual) /
24 (model)
Harry Allen 3
10
220/550
0.5
18 min
35-76
4
n.a.
24/34
1
0.5
18 min (no
Fast Start)
35-76
4
n.a.
24/34
-
1
1
1
3
12 hrs
12 hrs
12 hrs
12 hrs
-
1.5-2
1.5-2
1.5-2
1.5-2
2/5
2/5
2/5
5/8
32/61
32/61
38/71
88/130
1
Harry Allen 4
Reid Gardner Station
Reid Gardner 1
Reid Gardner 2
Reid Gardner 3
Reid Gardner 4
300-550
Silverhawk Station
Silverhawk Combined Cycle
6 (actual) /
24 (model)
Harry Allen Station
Harry Allen 3
1
Harry Allen 4
1
320-460
0.5
18 min
35-76
0.5
18 min (no
Fast Start)
35-76
278/392
4
n.a.
24/34
4
n.a.
24/34
14 in 1x1
28 in 2x1
Harry Allen Power Block
Higgins Station
Higgins Combined Cycle
6 (actual) /
24 (model)
Co-Owned/Non-Operated Facilities
Navajo 1,2,3
-
260/350
-
-
-
-
-
-
RED indicates change from last version.
(model) indicates value suggested for use in production cost models
Page 206 of 393
Fixed O&M Total
(includes coal yard
DEAA$)
Fixed O&M Coal Yard
(DEA $ - These $
included in column D)
Variable O&M
(Consumables) per
MWh (2013$)
Maint $ / MWH
(2013$)
Maint $ / operating
hr (2013$)
Maint$ / start
(2013$)
USE ONLY ONE OF THESE METRICS
preferred for all
preferred for
least preferred except GE
peakers
GE peakers
alternative
Maintenance Cost Option
Variable O&M - Costs associated with Dispach of the units
RED indicates change from last version.
Reid Gardner Maintenance changes approved by Aug 2013 ERC as a result of SB123
Co-Owned/Non-Operated Facil
Navajo 1,2,3
Higgins 1x1
Higgins Station
Higgins Combined Cycle
Reid Gardner Station
Reid Gardner 1
Reid Gardner 2
Reid Gardner 3
Reid Gardner 4
Harry Allen Combined Cycle
Harry Allen 1x1
Harry Allen 3
Harry Allen 4
Silverhawk Combined Cycle
Silverhawk 1x1
Arrow Canyon Complex
Lenzie Combined Cycle 1
Lenzie Combined Cycle 2
Lenzie 1x1
Clark Complex
Clark 4
Clark 5
Clark 6
Clark 7
Clark 8
Clark 9 CC - (Ck 7,8 & 9)
Clark 10 CC - (Ck 5,6 & 10)
Clark CC 1x1
Clark 11-22
Unit
Fixed O&M per
KW-Yr (2013$)
Including Coal
Includes Coal Yard
FIXED O&M - 24 hr reserve status 24x7x365
NVE South Gen Unit Characteristics Table.xlsx
Single Generator
Cold Start
CC: 0 to 1x1
CC: 1x1 to 2x1
CC: 0 to 2x1
Single Generator
Hot Start
Consumable per start (2013$)
CC: 0 to 1x1
CC: 1x1 to 2x1
CC: 0 to 2x1
REDACTED PUBLIC VERSION
GEN-1
Page 207 of 393
REDACTED PUBLIC VERSION
GEN-1
NVE South Gen Unit Characteristics Table.xlsx
Unit
Start-UP
Energy
No-Load Heat
(MMBTU Only)
Input
Cold/Warm/
(MMBTU/hr)
Hot/Quick
Prime Mover/
Primary Fuel
Start-Up
Fuel
Secondary
Fuel
GTG/Gas
Gas
None
35/35/35
175
Gas
None
70/70/70
280
Gas
None
70/70/70
280
Gas
None
70/70/70
280
Gas
None
70/70/70
280
-
-
626/350/50
626/350/50
626/350/50
1302/700/10
240
240
240
-
30/30/30
TBD
30/30/30
TBD
-
-
Average
Net Heat Rate
or EtaPRO max*
Winter / Summer
(BTU/KWh)
Clark Complex
Clark 4
Clark 8
GTG/Gas and
HRSG
GTG/Gas and
HRSG
GTG/Gas and
HRSG
GT/Gas and
HRSG
Clark 9 CC - (Ck 7,8 & 9)
Clark 10 CC - (Ck 5,6 & 10)
CC/Steam
CC/Steam
-
None
None
GTG/Gas
Gas
None
Lenzie Combined Cycle 1
CTG/Steam - Gas
Gas
None
Lenzie Combined Cycle 2
CTG/Steam - Gas
Gas
None
STG/Coal
STG/Coal
STG/Coal
STG/Coal
Gas
Gas
Gas
Gas
None
None
None
None
Gas
None
Clark 5
Clark 6
Clark 7
Clark 11-22
Chuck Lenzie Complex
Reid Gardner Station
Reid Gardner 1
Reid Gardner 2
Reid Gardner 3
Reid Gardner 4
Silverhawk Station
Silverhawk Combined Cycle CTG/Steam - Gas
Harry Allen Station
Harry Allen 3
GTG/Gas
Gas
Harry Allen 4
GTG/Gas
Gas
None
Gas
None
Gas
None
Diesel #2
-
Harry Allen Combined Cycle CTG/Steam - Gas
Higgins Station
Higgins Combined Cycle
CTG/Steam - Gas
Co-Owned/Non-Operated Facilities
Navajo 1,2,3
STG/Coal
RED indicates change from last version.
Page 208 of 393
REDACTED PUBLIC VERSION
GEN-1
NVE South Gen Unit Characteristics Table.xlsx
HEAT INPUT = A(MW^2)+B(MW)+C
Unit
A
B
C
Clark Complex
Clark 4
Clark 5
Clark 6
Clark 7
Clark 8
Clark 9 CC - (Ck 7,8 & 9)
Clark 10 CC - (Ck 5,6 & 10)
Clark 11-22 (WINTER)
Clark 11-22 (SUMMER)
Reid Gardner Station
Reid Gardner 1
Reid Gardner 2
Reid Gardner 3
Reid Gardner 4
Chuck Lenzie Complex
LZ 1 CT1
LZ 1 CT2
Lenzie CC 1 (1x1)
Lenzie CC 1 (2x1)
Lenzie CC 1 (2x1 w/duct burn)
LZ 2 CT3
LZ 2 CT4
Lenzie CC 2 (1x1)
Lenzie CC 2 (2x1)
Lenzie CC 2 (2x1 w/duct burn)
Silverhawk Station
SH CTA
SH CTB
Silverhawk CC (1x1)
Silverhawk CC (2x1)
Silverhawk (2x1 w/ductburn)
Harry Allen Station
Harry Allen 3
Harry Allen 4
Harry Allen CC (1x1)
Harry Allen CC (2x1)
Harry Allen (2x1 w/duct burn)
Higgins Station
CT1
CT2
Higgins CC (1x1)
Higgins CC (2x1)
Higgins CC (2x1 w/ductburner)
RED indicates change from last version.
Page 209 of 393
REDACTED PUBLIC VERSION
NVE_North_Gen_Unit_Characteristics_Table.xlsx
GEN-1
Sierra Pacific Power Company - Generation Summary
Plant
Clark Mt. 1
Clark Mt. 2
Clark Mt. 3
Clark Mt. 4
Ft. Churchill 1
Ft. Churchill 2
Tracy 1
Tracy 2
Tracy 3
Tracy 4&5 (Pinon)
Tracy 8, 9, 10
Valmy 1
Valmy 2
Battle Mt
Brunswick
Gabbs
Kings Beach
Portola
Valley Road
Winemucca CT
I/S Date
1961
1963
1994
1994
1968
1971
1963
1965
1974
1996
2008
1981
1985
1960
1960
1969
2008
1960
1960
1970
Heat Rate
(BTU/kWh)
Winter/Summer
Net Cap (MW)
10 / 10
10 / 10
72 / 66
72 / 66
113 / 113
113 / 113
53 / 53
83 / 83
108 / 108
108 / 104
578 / 553
254 / 254
268 / 268
8
6
5.4
12
6
6
14/14
Type
GTG/Diesel
GTG/Diesel
GTG/Gas
GTG/Gas
STG/Gas
STG/Gas
STG/Gas
STG/Gas
STG/Gas
CC/Steam
CC/Steam
STG/Coal
STG/Coal
Projected Retirement
Date
Retired
Retired
2024
2024
2025
2028
2014
2014
2028
2031
2043
2025
2025
Recip/Oil
Recip/Oil
Recip/Oil
Recip/Oil
Recip/Oil
Recip/Oil
CT/Gas
Retired
BLACKSTART ONLY
Retired
2058
Retired
Retired
Retired
Page 210 of 393
Valmy 2
Valmy 1
Valmy Complex
Tracy Power Block
Clark Mountain 3
Clark Mountain 4
Tracy Complex
Tracy 1
Tracy 2
Tracy 3
Tracy 4
Tracy 5
Tracy 4/5 duct burn
Tracy 4/5 Power Block
Tracy 8
Tracy 9
Tracy 10
Tracy 8,9,10 duct burn
FT Churchill Complex
Ft. Churchill 1
Ft. Churchill 1
Unit
90 (Total)
85 (Total)
127 (SPPC)
254 (Total)
134 (SPPC)
268 (Total)
578
72
72
53
83
108
68
25
15
108
146
146
145
141
113
113
127 (SPPC)
254 (Total)
134 (SPPC)
268 (Total)
553
66
66
53
83
108
65
24
15
104
145
145
143
120
113
113
(MW)
Summer
541
66
66
53
83
108
65
24
15
104
144
144
140
113
113
113
Peak
127 (SPPC)
254 (Total)
134 (SPPC)
268 (Total)
Assumed Net Capability
Winter
RED indicates change from last version.
ST
ST
35
35
124 (1x1) /
285 (2x1)
51.5
100
100
CC
CT
CT
ST
CC
GT
GT
18.7
24.4
28
30
15
15
ST
ST
ST
CT
ST
ST
ST
Min. Net
Capacity (MW)
NVE_North_Gen_Unit_Characteristics_Table.xlsx
REDACTED PUBLIC VERSION
GEN-1
Page 211 of 393
4
4
0.5
0.5
1.5
1.5
1.5
-
1
1
Min. Down
Time
(hrs)
RED indicates change from last version.
-
-
Clark Mountain 4
Valmy Complex
Valmy 1
Valmy 2
-
Clark Mountain 3
Tracy 8, 9, 10
-
-
Ft. Churchill 2
Tracy Complex
Tracy 1
Tracy 2
Tracy 3
Tracy 4&5 without Duct
Tracy 4&5 with Duct
-
Min. Run Time
(hrs)
Ft. Churchill 1
Ft Churchill
Unit
18 hrs
18 hrs
145-215 for 1X1
300-430 for 2X1
30 min for CT only
6 hrs for blended ops
22 min.
(9 for Fast Start)
22 min.
(9 for Fast Start)
100-160, 160-270
100-180, 180-290
35-72
35-72
30-106
-
18-110
18-110
AGC Range (MW)
10 hrs
8 hrs
10 hrs
4 hrs
4 hrs
6 hrs (cold) /
12 hrs (drained)
6 hrs (cold) /
12 hrs (drained)
Minimum Time
from CS to
On-Line (Normal)
1/5
1/5
3/6
3/6
6/18 (1x1)
6/36 (2x1)
2/3
3/4
3/4
2/3
3/4
5/7
3/6
3/6
6/18 (1x1)
6/36 (2x1)
1/2
2
2/3
3/4
3/4
2/3
3/4
115/140
110/140
55/40
55/40
270/431
18/17
22/20
55/35
47/69
44/57
22/60
22/60
Control
AGC Ramp Rate
Forecast
Gross MVAR
Operator Ramp
(MW/Min)
approved by Capability Leading /
Rate (MW/Min)
Slow/Fast
Aug 2013 ERC
Lagging
Slow/Fast
NVE_North_Gen_Unit_Characteristics_Table.xlsx
REDACTED PUBLIC VERSION
GEN-1
Page 212 of 393
Valmy Complex
Valmy 1
Valmy 2
Tracy Complex
Tracy 1
Tracy 2
Tracy 3
Tracy 4&5
Tracy 8, 9, 10
Tracy CC 1x1
Clark Mountain 3
Clark Mountain 4
Ft Churchill
Ft. Churchill 1
Ft. Churchill 2
Unit
RED
Fixed O&M Total
(Including Coal Yard
DEAA)
indicates change from last version.
Fixed O&M per
KW-Yr (2013$)
Includes Coal
Yard DEAA
Includes Coal Yard
Fixed O&M Coal Yard
(DEA $ - These $
included in column D)
FIXED O&M - 24 hr reserve status 24x7x365
Variable O&M
(Consumables) per
MWh (2013$)
Maint $ / MWH
(2013$)
Maint $ / operating
hr (2013$)
Maint$ / start
(2013$)
USE ONLY ONE OF THESE METRICS
preferred for all
least preferred except GE
preferred for
alternative peakers
GE peakers
Maintenance Cost Option
Variable O&M - Costs associated with Dispatch of the units
NVE_North_Gen_Unit_Characteristics_Table.xlsx
Single
Generator
Cold Start
CC: 0 to 1x1
CC: 1x1 to
2x1
CC: 0 to
2x1
Single
Generator
Hot Start
CC: 0 to 1x1
Consumable per start (2013$)
CC: 1x1 to
CC: 0 to 2x1
2x1
REDACTED PUBLIC VERSION
GEN-1
Page 213 of 393
STG/Gas
STG/Gas
STG/Gas
STG/Gas
CC/Steam
CC/Steam
GTG/Gas
GTG/Gas
Ft. Churchill 2
Tracy Complex
Tracy 1
Tracy 2
Tracy 3
Tracy 4&5
Tracy 8,9,10
Clark Mountain 3
Clark Mountain 4
STG/Coal
Valmy 2
Diesel #2 Oil
Diesel #2 Oil
Gas
Gas
Gas
Gas
Gas
Gas
Gas
Gas
Gas
Start-Up Fuel
None
None
Diesel #2 Oil
Diesel #2 Oil
Secondary Fuel
RED indicates change from last version.
Oil firing removed from Ft. Churchill 1&2 and Tracy 3 due to BART
STG/Coal
Valmy 1
Valmy Complex
STG/Gas
Ft. Churchill 1
FT Churchill Complex
Unit
Prime Mover/
Primary Fuel
4,320 Cold
720 Hot
4,320 Cold
720 Hot
-
220/55
335/60
950/100
100
400 cold
120 hot
400 Cold
120 Hot
Start-UP Energy
(MMBTU Only)
Cold/Warm/
Hot/Quick
-
-
-
-
No-Load
Heat Input
(MMBTU/hr)
NVE_North_Gen_Unit_Characteristics_Table.xlsx
Average
Net Heat Rate
or EtaPRO max
Winter / Summer
(BTU/KWh)
REDACTED PUBLIC VERSION
GEN-1
Page 214 of 393
A
B
RED indicates change from last version.
Valmy Complex
Valmy 1 (full plant output)
Valmy 2 (full plant output)
Valmy 1 (SPPC portion only)
Valmy 2 (SPPC portion only)
Tracy Complex
Tracy 1
Tracy 2
Tracy 3
Tracy 4
Tracy 4&5
Tracy 4/5 duct burn
Tracy CC (1X1)
Tracy CC (2X1)
Clark Mountain 3
Clark Mountain 4
FT Churchill Complex
Ft. Churchill 1
Ft. Churchill 1
Unit
HEAT INPUT = A(MW^2)+B(MW)+C
NVE_North_Gen_Unit_Characteristics_Table.xlsx
C
REDACTED PUBLIC VERSION
GEN-1
Page 215 of 393
GEN-2
Page 216 of 393
NEW GENERATION PERFORMANCE AND COST SUMMARY
GEN-2
CONFIDENTIAL MATERIALS
FILED UNDER SEAL
Page 217 of 393
GEN-3
Page 218 of 393
GEN-3
Project No.:
REID GARDNER DEMOLITION AND
Document No.:
POND DECOMMISSIONING UPDATE Revision No.:
30577
12-05-100-003
1
NV ENERGY REID GARDNER PLANT DEMOLITION AND POND DECOMMISSIONING STUDY Project Number: 30577 Study Number: 30577-12-05-100-003 PREPARED FOR
NV Energy, Inc. URS Energy & Construction, Inc. 7800 East Union Ave Denver, CO 80237 Revision: 1
Status: Revised Final
Page 1 of 56
Page 219 of 393
GEN-3
Project No.:
30577
12-05-100-003
1
REID GARDNER DEMOLITION AND
Document No.:
POND DECOMMISSIONING UPDATE Revision No.:
STUDY REVISION PAGE
Project Name:
Reid Gardner Demolition and Pond
Discipline:
Decommissioning Update
NV Energy
Project Number:
Latest Revision:
1
Revision Signatures
Client:
Civil/CWC
30577
Prepared by
Date
Approved by (title)
Issue
Date
Checked by
Date
Approved by (if required) (title)
Date
Status
Rev.
No.
Preliminary
Date
Prepared By
Pages
Description of Changes
A
8/8/13
R. Keeth, D.
Hoffner, J.
Mann
49
Draft for Internal Review
First Draft
B
8/12/13
49
Draft Submitted for Client Review
Revised
Draft
C
8/19/13
R. Keeth, J.
Mann
56
Updated draft containing revised
summary and below grade estimates
Final
0
10/25/13
R. Keeth
56
Incorporated comments received from
NV Energy
Revised
Final
1
11/21/13
R. Keeth
56
Incorporated Final Edits from NV Energy
R. Keeth, D.
Hoffner, J.
Mann
Page 2 of 56
Page 220 of 393
GEN-3
Project No.:
REID GARDNER DEMOLITION AND
Document No.:
POND DECOMMISSIONING UPDATE Revision No.:
30577
12-05-100-003
1
TABLE OF CONTENTS
1.0
2.0
3.0
4.0
5.0
EXECUTIVE SUMMARY
INTRODUCTION
2.1
Background
2.2
Location
2.3
Site Description
STUDY DESIGN & ECONOMIC CRITERIA
3.1
Estimate Criteria and Basis
3.2
Estimate Scope Categories & Cost Factors
3.3
Key Estimate Assumptions and Exclusions
3.4
Decommissioning and Demolition Sequence and Logic
SCOPE OF DEMOLITION ESTIMATE
4.1
Demolition Labor Crew Mix
4.2
Allowances
4.3
Salvage Quantities & Credits
RESULTS OF STUDY
APPENDICES
Appendix 1 - Demolition and Decommissioning Cost Summary
Appendix 2 - Facility and Infrastructure Decommissioning and Demolition
Cost Breakdown
Appendix 3 – Reid Gardner Trip Report
Appendix 4 – Quotations for Scrap Prices & Fill Cost
Appendix 5 - Civil Works and Pond Decommissioning and Demolition
Cost Breakdown
Page 3 of 56
4
7
7
7
8
10
10
13
19
22
24
24
25
25
28
29
29
30
42
46
51
Page 221 of 393
GEN-3
Project No.:
REID GARDNER DEMOLITION AND
Document No.:
POND DECOMMISSIONING UPDATE Revision No.:
1.0
30577
12-05-100-003
1
EXECUTIVE SUMMARY
NV Energy (NVE) requested that URS update and add supporting documentation to the
decommissioning and demolition study for the Reid Gardner (RG) generating plant. This
analysis was previously included in the cost estimate for their southern fleet completed in 2011.
The analysis includes demolition of the associated ponds and material handling facilities at Reid
Gardner. The decommissioning of the Reid Gardner facilities is anticipated to take place
between 2013 and 2017. Unit 4 at Reid Gardner may remain in operation through 2017, so an
alternate case is included in the evaluation that considers making allowances for this continued
operation during the demolition of Units 1/2/3. The cost differential for this option, versus
demolition of all four units is included as a separate section of this study.
Site Visit - A site assessment and walk down of the Reid Gardner plant was performed the first
week of June 2013 (copy of trip report included as Attachment A). The site assessment and
walk downs of the Reid Gardner plant and ponds provided the project team with existing facility
drawings, documentation, and applicable field data to support the decommissioning estimates.
This will allow significant aspects of the estimate to be validated in the future. A copy of the trip
report from that site visit is included as an attachment to this report.
Demolition Scope - The power block and equipment portions of the demolition estimate were
completed jointly by URS E-C in Denver and staff from Cleveland Wrecking Company (CWC), a
wholly owned subsidiary of URS. The civil/site and pond decommissioning portion of the
estimate was completed by URS E-C in Denver. The demolition/decommissioning cost
estimates are based on current labor and demolition equipment costs, and include equipment,
building, pond berm, coal pile excavation, and commodity demolition, as well as concrete
removal and disposal. It is assumed that the coal pile will be reduced as much as practical prior
to the units ceasing operation. Usable coal will be removed by NVE prior to demolition. In
addition, these cost estimates include asset recovery credits in the form of salvage value
allowances for ferrous and non-ferrous metals, as well as an allowance for the sale of used
equipment based on historical experience. The potential market for and value of used
equipment at the time of demolition would be speculative, so this credit is only a small fraction of
the total salvage value from the Reid Gardner site.
Cost Estimates - All costs estimates are just that, an estimate of the costs incurred during a
future project based on the data available at the time the estimate was completed. Various
agencies have established criteria for assessing the risks associated with production of
estimates based on limited engineering and project design. To offset this risk of unknowns that
can impact the final project cost, a cost contingency is included in most estimates. This
contingency is a cost adder, typically based on a percentage of the total project cost. These
dollars are included in the estimate and are expected to be spent during the completion of the
future project.
Cost Contingency - The American Association of Cost Engineers (AACE) has established
criteria for the assessment of appropriate contingency values based on the level of project
design and scope certainty that has been completed at the time the estimate is assembled. For
the current Reid Gardner analysis, the actual level of design and project definition that has been
completed to-date is less than 5%. The AACE tables specify that an appropriate contingency at
this point in the design would range from 20-50% of the estimated project cost. Based on an
order received from the Nevada Public Utility Commission, a contingency factor of 15% was
applied in the current estimates. This contingency cost adder is included to account for the
variability in the estimate's assumptions at the time that the project occurs, and to account for
unforeseen circumstances and scope of work impact that are currently unknown. See Section
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3.1.10 for more details. See Table 1, shown on the following page, for a summary of the total
decommissioning and demolition costs, including asset credits/salvage, and contingency.
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$19,261,500
$19,261,500
1,2,3,4
Together
(2014)
Facility &
Infrastructure
Demolition
1,2,3 (2014)
& 4 (2017)
Unit No.
$17,540,000
$17,540,000
Civil & Pond
Demolition
(B)
$0
$2,159,000
Cost Adder
for Unit 4
Continued
Operation
(C)
$3,325,000
$3,325,000
Asbestos
Abatement &
Hazardous
Material
Allowances
(D)
Table 1. Demolition Cost Summary for Reid Gardner*
(A)
Project No.:
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$803,000
$846,000
Project
Management
Services
@2% of (A-D)
(E)
(F)
$2,809,000
$2,960,000
(G)
$2,006,000
$2,114,000
Engineering &
Design
Services
@ 5% of (A-D)
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NVE Operations,
Internal PM &
Contractor
Services
@ 7% of (A-D)
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$6,862,000
$7,231,000
Contingency
@ 15% of
Project Cost
(A-G)
(H)
($9,994,000)
($9,994,000)
Asset
Recovery
/Salvage
Credit
(I)
$42,612,000
$45,442,000
(Sum A-I)
Option Total
Cost
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2.0
INTRODUCTION
2.1.
Background
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NV Energy (NVE) has requested that URS E-C update the decommissioning and
demolition study for the Reid Gardner plant. This demolition cost estimate was
previously included as part of the cost analysis for decommissioning the NVE southern
fleet of generating stations (“NVE South Fleet Demolition and Pond Decommissioning
Study” No. 2872-12-05-100-001). The analysis includes removal of associated power
block and buildings, emissions control systems, pond berms, underground piping,
material handling facilities, coal pile soil removal, fill of excavations, and removal of other
utilities. Additional descriptions of the scope and boundary limits of the
decommissioning/demolition evaluation are included in following sections of this
document. The decommissioning of the Reid Gardner (RG) facilities is anticipated to
take place between 2013 and 2017.
2.2.
L
ocation
The Reid Gardner plant is located approximately 50 miles northeast of Las Vegas, NV.
These facilities are owned and operated by NV Energy, Inc. Refer to the map provided
in Figure 1 for the facility location (Ref.: NVE Website).
Figure 1. NV Energy Facilities Map
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Site Description
All units operating at NV Energy’s Reid Gardner plant fire pulverized coal in traditional
subcritical boilers. Shown below in Figure 2 is a photograph of the Reid Gardner plant.
This photo is followed by descriptive information and Table 2 that contains project design
criteria specific to the four units operating at NV Energy’s Reid Gardner generating
station.
Figure 2. Reid Gardner Generating Station
Location:
Peak Generating Capacity:
Customers Served:
Employment:
50 miles northeast of Las Vegas, NV
557 MW (four units)
Approximately 300,000 Nevada households
Approximately 150 employees
Plant Description: The Reid Gardner Generating Station is a coal-fueled, steam-electric
generating plant with four operating units. Additional plant description information is supplied in
Table 2.
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Table 2. Reid Gardner Facility Description
Unit
Number
Location
Nominal
Output
(gross MW)
Commercial
Operating
Date
Boiler
Vendor
Turbine
Vendor
Fuel Type
Ownership
Unit 1
Moapa,
NV
114
1965
Foster
Wheeler
GE
Western
Bituminous
Coal
NV Energy
Unit 2
Moapa,
NV
114
1968
Foster
Wheeler
GE
Unit 3
Moapa,
NV
114
1976
Foster
Wheeler
GE
Unit 4
Moapa,
NV
270
1983
Foster
Wheeler
Westinghouse
Western
Bituminous
Coal
Western
Bituminous
Coal
Western
Bituminous
Coal
NV Energy
NV Energy
NV Energy
& CDWR*
*California Department of Water Resources divesting ownership in RG 4 in 2013,
Unit
Number
SO2
Control
Absorber
Design
Particulate
Control
NOx
Control
Water
Table
Foundations
Unit 1
Wet Soda
Ash
Venturi
Fabric Filter –
Installed 2008
Boiler
Modifications
6-12 feet
Mats and
Piles
Fabric Filter –
Installed 2008
Fabric Filter –
Installed 2008
Boiler
Modifications
Boiler
Modifications
Fabric Filter –
Installed 1983
Boiler
Modifications
Unit 2
Unit 3
Unit 4
Wet Soda
Ash
Wet Soda
Ash
Wet Soda
Ash
Venturi
Venturi
Three
Spray/Tray
Towers
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6-12 feet
6-12 feet
6-12 feet
Mats and
Piles
Mats and
Piles
Mats and
Piles
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STUDY DESIGN AND ECONOMIC CRITERIA
3.1.
Estimate Criteria and Cost Basis
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Overview of Cost Basis
This analysis describes the approach, requirements, recommendations, and associated
costs, for budgetary purposes, to decommission and demolish the four units at Reid
Gardner. It includes the costs associated with:
x Planning, environmental issues, and demolition of components and ponds at the
facility
x Building and structure dismantling
x Utility and infrastructure removal
x Removal and disposal of waste materials
x Dismantling of pollution control equipment
x Demolition of the boilers and boiler support systems
x Concrete removal and site improvements to fill excavations
x Removal of pond berms, but not including pond reclamation, which is being
handled under a separate contract.
An option is also provided that estimates the added costs for demolition of Units1-3 while
leaving Unit 4 in operation for an additional four years (site and utility modifications
allowance plus added costs for one additional set of mobilization/demobilization activity
for demolition contractor).
All cost estimates for this demolition project are shown in 2013 dollars. No escalation or
inflation is included. Additionally, this estimate includes NV Energy’s 7% average
contract adder to cover NV Energy’s internal costs to administer all external services
contracts. The decommissioning costs are broken down into several cost areas. In
each case, engineering, planning and site preparation will be required to prepare for the
on-site demolition activities associated with the site closure. To meet NVE’s objectives
for the closure planning, this study is based upon the following primary cost categories:
x
x
x
x
x
x
Closure planning and preparation
Closure operating costs
Allowance for modifications to infrastructure to allow continued operation of
Unit 4
Demolition of plant equipment, structures and pond berms
Fill of voids created during foundation, utility and coal pile excavation
Site restoration will be covered under a separate contract
Further detail and descriptions of these categories are documented in Section 3.1.3.
Estimate Criteria
Table 3 summarizes the economic and design criteria that were used as the bases for
development of the decommissioning cost estimates. These criteria and scope
assumptions were developed in conjunction with NVE engineering staff and plant
personnel. Furthermore, lessons learned from the commentary supplied on the south
fleet PUCN filing, PUCN testimonial records, and other direction from NV Energy were
also used in the development of the economic assumptions used for the analyses.
Cost Factors and Analysis Approach
The demolition cost estimates are based on the assumptions and the closure
methodology as discussed in Section 3.3. These factors involve planning, management
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and preparation of the facility prior to and during the actual demolition process.
Furthermore, cost summaries were developed for two alternate closure projects based
upon the following plant/unit groups:
x
x
Reid Gardner Units 1, 2 & 3, then Unit 4 four years later
Reid Gardner Units 1, 2, 3, and 4 during a single project
During the site walk-downs, critical major equipment and demolition activities were
identified, including a general review of the modifications and relocations that would be
required to allow Unit 4 to remain on-line while Unit 1/2/3 were demolished. These
included demolition boundaries, equipment and structures for removal, depth of removal,
backfill sources, possible relocation of shared services, etc. The estimate analysis
consisted of a review of available documents, interviews with knowledgeable personnel
at the RG site, and review of drawings to establish material categories and rough
estimates of quantities of “material by type.” Based on the information obtained during
the site visit and subsequent reviews of drawings, an estimate was then compiled that
included the following items:
x
x
x
x
x
Quantity Summary Sheet
Breakdown and work up sheets of unit rates to apply to the estimated
quantities on the Quantity Summary sheet
Breakdown and takeoff of Ferrous and Non-Ferrous scrap metal, as well as
an estimate of the salvage credit for used equipment sales
Estimate of the costs for various engineering, environmental and demolition
subcontractors to support the closure analysis
Estimating summary tables that include the NV Energy markup for services
contracts and contingency.
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Table 3. Assumptions for Demolition Scope Definition and Cost Estimating Criteria
Scope Unit
Numbers
U/G
Structures
U/G Piping &
Duct Banks
Circ Water
Piping
Water Supply
Systems
Gas Supply System
1/2/3/4
Simultaneous
Removal to 10’
depth below
grade w/
Backfill
Complete
Removal to 6’
below grade w/
Backfill
Full Depth
Removal w/
Backfill
Well field, supply
piping and river intake
abandoned in place –
demolish piping within
plant to entry point
Supply line abandoned
in place & capped –
demolish piping within
plant to entry point
1/2/3 first,
then 4 later
Removal to 10’
depth below
grade w/
Backfill – Unit
4 later
Complete
Removal Units
1/2/3 to 6’
below grade w/
Backfill -then
Unit 4 later
Full Depth
Removal w/
Backfill
Units 1/2/3
only – then
Unit 4 later
Well field and supply
piping abandoned in
place – river intake
structure remains in
place until Unit 4
shutdown
Supply line abandoned
in place & capped –
relocate Unit 4 supply
lines within plant to
entry point, then
demolish with Unit 4
shutdown
Scope Unit
Numbers
Rail Access
Roads
Contingency*
Engineering Cost
Target
Shared Services
Leave spur to
plant in place –
demolish plant
coal loop
Leave spur to
plant in place –
demolish plant
coal loop with
Unit 4 shutdown
Leave site
access roads
– demolish all
others
15%
5%
Coal, gas, fresh
& fire water
supplies
5%
Coal, gas,
electrical supply
to Unit 4, fresh &
fire water supply
1/2/3/4
Simultaneous
1/2/3 first,
then 4 later
Leave site
access roads
– demolish all
others
15%
*Contingency includes a risk allowance, estimate uncertainty, and variation in data resources.
See DOEG413.3-21, Cost Estimating Guide and Section 3.10 of this document.
Scope Unit
Numbers
1/2/3/4
Simultaneous
1/2/3 first,
then 4 later
Cost Criteria
Excavation Fills
& Site
Remediation
Salvage
Ferrous
Salvage NonFerrous
Salvage Specific
Equipment
Excavations filled
- Coal pile
contaminated dirt
removal & fill
Excavations filled
- Coal pile
contaminated dirt
removal & fill
3
Fill = $15/yd
Iron from pipe,
rebar,
equipment,
ductwork, et al.
Iron from pipe,
rebar,
equipment,
ductwork, et al.
$212/2240 lbs
Calculated at 4%
of Ferrous –
includes copper,
aluminum & S.S.
Calculated at 4%
of Ferrous –
includes copper,
aluminum & S.S.
$3180/2000 lbs
Scrap value plus a
1% allowance for
used equipment
sales
Scrap value plus a
1% allowance for
used equipment
sales
$760/2000 lbs
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Water Rights
&
Environmental
Credits
None - See
report Sections
3.1.6 to 3.1.9
None - See
report Sections
3.1.6 to 3.1.9
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Estimate Scope Categories and Cost Factors
This section describes the requirements and factors that affect the demolition costs for
each RG unit. As previously listed in Section 3.1, the scope is divided into the following
cost categories to provide the demolition portion of the analysis:
1. Closure Planning and Preparation
2. Closure Operating Costs
3. Allowance for Modification to Infrastructure to Support Continued Operation
of Unit 4
4. Demolition of Plant
5. Site Reclamation Consisting of Fill of Excavations and Pond Berm Removal.
Based upon the cost categories and the scope of work, a project time line was
developed. The time line depicts the relationship of the estimated task durations
dependent upon cost elements for the closure project. NVE’s accounting practices,
operations schedule, and obligations to stakeholders will ultimately determine the basis
for these cost factors.
Estimate Cost Categories
The following is an explanation and summary of costs included in each of the five cost
categories:
x
Closure Planning and Preparation (Design and Engineering)
For the purpose of this analysis, we have assumed that NVE would obtain an
engineering services provider for the Closure Design and Project
Management. The scope of work will include planning, engineering,
management and oversight to develop the methodology and plans needed to
perform the plant closure and plant modifications. It includes the cost and
services of NVE management, procurement and operations, as well as outside contractors and other engineering service providers. The NVE portion
for subcontract management was calculated at 7% of the project cost as
required for services contracts at NVE facilities. The demolition contract
engineering subcontract was estimated to be 5% of the project cost based on
the limitations established by the Nevada Public Utilities Commission in their
order on the Southern Fleet Preliminary assessment. The engineering cost
for the relocation of shared services to maintain Unit 4 operation after the
demolition of Units 1/2/3 would be an additional engineering cost that would
likely exceed 25% of the shared services modification effort.
x Closure Operating Costs
Closure Operating Costs are related to NVE’s internal costs (home office and
plant employees) for operations and management of the facility during the
preparation, the actual shut-down of the Facility and closure process.
Prior to closure, the plant will go through the process of inventory reduction.
Coal, oil and other materials utilized at the facilities will be depleted. Staff
and contracted resources will perform modifications to the equipment and
infrastructure to prepare for closure. Once the facility is shut down, staff and
contracted resources will continue cleaning tanks and vessels, complete ash
removal from the operations process, and isolate / make-safe equipment and
generally prepare the facility for demolition. Office Staff will also participate in
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the closure planning activities. The operations and production work force will
be reduced during this period and will eventually be removed from the
facility’s cost account. Equipment and material transfer from the active plant
to the warehouse stores has not been considered.
For the purpose of this study, the following explanation and definition of
terms apply to Cost Category 2:
a. Closure Operating Costs - Cost associated with Production and
Operational Ramp-Down for Closure and Closure activities.
b. Ramp Down Planning and Management – (home office and
designated plant personnel) - These costs represent pre-closure
activities. This would include planning, engineering, management and
oversight to develop the methodology and ultimately perform the plant
modifications.
c. Operational Ramp-Down – (plant overhead and office staff personnel)
- Costs incurred prior to, and during closure to perform duties as they
relate to closure. Tasks may include planning and coordination of
inventory reduction, sale and reduction of “bone yard” equipment
inventory. Tasks will also include contractor evaluation, project
management and project coordinating efforts during the demolition
and site modification process.
d. Production Ramp-Down – (plant workers and contract labor) Activities, personnel and equipment required for make-ready,
inventory reduction, terminate production, shutdown and equipment
cleaning. Certain key individuals will participate in the closure
activities.
e. Collateral Closure Costs – These closure costs are figured as a
percent of project costs and include items such as site security, office
trailers energy consumed at site, insurance and taxes, certain
equipment, materials and consumables. Some of these costs are
period dependent costs and may be expressed in cost-per-unit / time.
x Modification to Infrastructure
Utility disconnect and isolation at the demolition areas, as well as, permanent
termination of equipment are considered in this category. An allowance for
Infrastructure modifications to allow future use of Unit 4 is included in this
option (see Appendix 5); maintenance of the facility was not considered in the
analysis.
The first phase of the modifications will include the disconnection of the
utilities and grounding grid that are currently utilized to operate the power
generation complex. The Unit 4 grid would be isolated prior to disconnection
of Units 1/2/3 for that alternative. This phase will also include the installation
of new and/or alternate equipment to support the plant during and after the
demolition, including relocation of the gas line, relocation of the controls
communication cables, EFPS effluent lines, fire water line relocations and
installation of a duct bank to supply power to the Unit 4 coal pile conveying
system. Note that switchyards will remain on-line and in service throughout
the demolition execution due to inter-ties between systems, as well as
transmission and distribution needs of the NVE grid system. The grounding
grid systems at the switchyards and substations will remain in service.
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Demolition of Plant
The estimate for facilities and infrastructure demolition considers Project
Management for the duration of this phase of the Project and 3rd party
asbestos abatement certification during asbestos removal. Demolition will
include the complete removal of all power generating equipment, above
ground support structures, power block sub-grade foundations and structures
to a depth of 12’ or the level of the water table, whichever comes first.
Additionally, piping and duct banks will be removed down to a depth of 6’
below grade. Demolition may commence after all equipment is cleaned,
process liquids are removed, and all asbestos has been removed and
disposed of in the on-site landfill. Any pre-existing hazardous waste spills or
past events are not considered in this analysis and will be remediated as part
of the Administrative Order on Consent (AOC) project.
x
Site Improvements
The estimate for the site improvements considers Project Management for
the duration of this phase of the Project. The site improvement scope
accounts for the final closure of the site (area) such as fill of power block
foundation excavations and the excavation of 2’ below grade for the existing
coal piles. Installation of new roadways, fencing, area lighting, etc., are not
included in the site reclamation cost estimates.
Civil Work and Pond Demolition
The civil work and pond decommissioning portion of this study is based on drawings,
reports, and details provided by NV Energy and their current contractors, as well as by
site visits made to the Reid Gardner plant. In it, URS considered each pond on an
individual basis, using the original design drawings to calculate pond berm volumes.
Generally, the ponds are bermed (built up from grade) with depths averaging between
10 and 15 feet. These areas and volumes were used to develop costs for excavation of
the berms to grade. With the exception of the Mesa ponds, no backfill, excavation of the
pond liner or interior volume, or other restoration activities such as fill and cover are
included in the current demolition cost estimate because this reclamation activity for the
existing ponds is included in the current AOC project.
All existing asbestos material is assumed to be suitable for placement in the asbestosapproved landfill on the Reid Gardner site, and all other solid waste and other
foundation/excavation materials will be considered common fill suitable for final disposal
in other on-site landfill areas. The haul of pond berms/embankments to this same onsite landfill area is also included in the current estimates. On site disposal and burial of
pond solids was excluded from the demolition cost estimate since that activity falls under
the AOC project scope. Pond berms are assumed to be acceptable material to backfill
the voids created by foundation excavations and the removal of potentially contaminated
soil below the coal piles.
The cost to remove the pond liners has been excluded from the current estimate
because this activity is included in the AOC project. Where fill and cover is required, a
1.15 compaction factor was applied to all backfill quantities to achieve 85% compaction,
using the modified proctor standard. It is assumed that the state approved closure plan
for all areas of the plant will not require capping in those areas where fill is placed in
excavations. Capping of the existing on-site landfill is included in the estimate since it is
not covered in the AOC contract.
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Quantities of imported common fill used for backfilling and site grading of excavation
areas were previously sent out for budgetary quotes in order to obtain current unit
pricing. In general, the materials currently available from previous excavations at the
Reid Gardner site are expected to meet some of the needs for the RG site. The
quotations obtained indicated that the cost to excavate, prepare, transport and place
materials from on-site fill sources would be approximately $15/cubic yard for common fill
delivered. The opportunity to reduce this cost exists by establishing or identifying a
facility closer to the RG plant as the source of the fill material.
It is assumed that the pond decommissioning will run concurrently with the facility /
equipment demolition and will finish within the allotted timeframes for each plant.
Therefore, project management costs are already included for the decommissioning of
the facility ponds. IT should be noted that the majority of the ponds will be
decommissioned during the demolition of the Unit 4 facilities, and the capping of the
landfill will occur after the majority of the site activities are completed.
Salvage value for land sales was not included as a credit to decommissioning costs in
this estimate since it is anticipated that the property owned by the company will be
reused for purposes of electrical generation or other purposes related to power
production and transmission. See Sections 3.2.3 and 3.2.4 for key assumptions and
exclusions addressed and considered within this portion of the study.
Water Rights
For the scope of this study, site water rights credits will not be considered in the
decommissioning price. Similar to the fuel supply, the raw water supply to the site is
considered a consumable for plant operations and will not be included as an asset
recovery credit in the decommissioning estimate. These water rights will be maintained
by NVE so that any future power generation facilities installed at the site will have water
available for plant operations. It will be at NVE’s sole discretion to include any site
specific water rights. In addition to being a valuable asset if considered, water rights can
provide substantial levels of offsetting salvage value. In contrast, if water rights are
retained, they could potentially have value beyond the life of the current installed
facilities and be used for future development:
1. Appropriative (Surface) Raw Water Rights:
a. Muddy River Water Rights
2. Groundwater (Sub-Surface) Raw Water Rights:
a. Well Field.
This estimate does not consider any of the primary valuation factors in costing
appropriation (surface) or groundwater water rights: Seniority, Amount of Legal
Diversion, Seasonal Consumption, Hydrologic Reliability, Optimal or Highest Use
factors. Water lines and well heads from these various sources will be left in place, with
only the demolition of the intake structure on the Muddy River included in the estimate.
Pollution Control And Environmental Credits
The Reid Gardner plant falls under the jurisdiction of the Nevada Division of
Environmental Protection (NDEP). The NDEP is responsible for controlling sources of
air pollution and assuring compliance with Federal, state, and local environmental laws
governing air quality. Nevada is in EPA Region IX. The value of any environmental
credits that might be generated by the shutdown of the Reid Gardner units has not been
included as a net salvage value since the current market value for emission credits is
near zero. Also, any future installation of new power generation facilities at the site
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could take advantage of any existing emissions allowances, specifically for NOx or SO2
emissions.
Asbestos and Hazardous Waste Removal - Allowance
Hazardous material removal/remediation was excluded from the previous preliminary
estimate for the Reid Gardner site. An effort was made to find any existing hazardous
material survey information during the site visit. However, the historic survey information
available did not provide existing quantities for any of these materials. Therefore, the
estimate for asbestos and other hazardous material removal was based on previous
plant demolition experience for units of similar age, with quantities factored based on
unit gross capacity.
An asbestos removal allowance is included for all the Reid Gardner Units. As previously
mentioned, a quantified asbestos survey was not available for any unit at Reid Gardner.
The asbestos remediation cost estimated for the current Sunrise Station demolition
project that is nearing completion was used to provide the cost allowance for Reid
Gardner Units 1, 2, and 3:
Sunrise Station Asbestos Survey:
Sunrise Station Asbestos Abatement Estimate:
$ 100,000 $ 937,500 Therefore, an allowance of $750,000 was assumed in the estimate for each of the three
units at Reid Gardner where asbestos remediation is required. An additional $100,000
was included for completion of the asbestos/hazardous material survey for the RG Units
1/2/3.
The hazardous material and waste removal allowance was estimated to be 10% of the
Asbestos Allowance = $225,000 for Units 1/2/3, including equipment gasket asbestos
and other hazardous materials. The Unit 4 estimate includes $175,000 for asbestos
removal and disposal since this a younger facility that is likely to have less asbestos
used during construction, and an additional $75,000 for removal and disposal of
universal & hazardous wastes. As was previously mentioned, a quantified hazardous
material and waste survey was not available for any of the units at the Reid Gardner site.
Additionally, It is assumed that demolition at all facilities will consider all paint to contain
lead and, therefore, the contractor will be required to take the necessary precautions for
handling, working with, and disposing of debris, as if all coatings contain lead.
Residual Consumables
Coal, fuels, soda ash will be consumed and fly ash removed during Owner’s production
and operations closure process, prior to demolition activities. Spare parts and equipment
that are stored on the property will be disposed of by the owner. In general, all storage
tanks and containment vessels should be reduced in volume to a minimum. The final
emptying of the tanks and disposal of their contents could be included in the scope of
work for the demolition contractor – costs for this effort are not included in the current
estimate because the scope is not defined. Allowance for NVE to develop a closure plan
and provide for the inventory reduction, warehouse, and tank clearing is included. The
demolition contractor will be required to triple rinse hazardous material containment
(tanks, piping, drains, etc.) prior to demolition and removal from the site. It is assumed
that the rinse material will be disposed of properly in on-site waste water ponds.
Tools and mobile equipment are not included in the estimate for credits or used
equipment value. It is assumed that these small equipment items will be sent to other
NVE facilities or dealt with by NVE’s closure team.
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Asset Recovery Credits
Demolition and dismantling projects include factors for scrap credit. The inherent value
of plant equipment may have no useful value in current form. These items do, however,
have potential monetary value based solely on the metal value in the scrap material
market. The current demolition cost estimates include the approximate salvage scrap
weights of ferrous and non-ferrous materials that will be generated during the demolition
of the RG plant.
Estimates for recovered weights of scrap materials are based on manufacturer’s
literature, historical experience from a demolition contractor for similar facilities, technical
manuals or the estimated sizes and weights of individual components. The total scrap
weights are then multiplied by the scrap value (obtained from public sources) to
determine the total scrap credit that is deducted from the demolition cost estimate.
The scrap that would result from the demolition of a facility is categorized based upon
the type of metal. The major categories are ferrous and non-ferrous. The value of the
salvage credit is determined by the market for scrap and can be obtained from updated
publications such as the “American Metal Market”. The scrap vendor pricing takes into
consideration the costs associated with preparation, present value, shipping and
handling costs.
Equipment and component salvage value on the after-market is extremely difficult to
quantify. Although the potential value of equipment beyond scrap value is recognized, it
is very market dependent and usually only quantifiable at the time of bidding for
demolition pricing. It is assumed that NVE will turn the entire Reid Gardner facility (or
area of the facility) over to the demolition contractor so that the contractor can execute
the project according to their procedures. Pricing at the time of award will define value
of equipment for either resale on the aftermarket or as scrap. NV Energy has
experienced reductions in demolition cost due to equipment salvage value in the past;
however, no attempt was made to determine individual component value for this project
given the undefined demolition period. The current estimates do include an allowance
for the sale of some equipment items during the demolition contract based on historical
experience. This allowance will be only a small fraction of the total decommissioning
contract, and this is recognized as a conservative assumption that may be adjusted
significantly when the demolition contract bidding occurs.
Estimate Contingency
A contingency factor of 15% was applied to the RG estimate due in part to the limited
level of engineering detail available when developing the economic analyses, and to
account for the variability of the estimate's assumptions and unforeseen circumstances.
Per the U.S. Department of Energy Estimating Guide (DOE G 413.3.21), §6.4.5.5, Table
6-2, page 56, this study is classified as a “CLASS 4 – Study or Feasibility” cost estimate.
Therefore, it is possible to justify using a low range contingency of 15% to 30% and a
high range contingency of 20% to 50%. Furthermore, per the DOE Guidelines, the
contingency percentage is based upon three main factors: Risk Allowance, Estimate
Uncertainty, and Resource Variance. Based on the classification of the estimate
accuracy, URS believes the contingency allowance to be very aggressive at 15% of the
project value given the level of design and project definition that was completed to-date.
This contingency value is in line with the order provided by the PUCN for
decommissioning and demolition studies. Additional efforts with more detail and
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clarification in estimating the scope will help reduce the overall contingency allowance
that is required.
Shared Services Modification Allowance for Unit 4 Continued Operation
This estimate includes costs for evaluating, engineering, and modifying the existing
interconnections of shared services between units at the RG site for the scenario where
Unit 4 remains in operation during the demolition of Units 1,2, and 3. When
decommissioning Units 1/2/3 at Reid Gardner, all shared services such as
communications, power supply, water supply, fire water, fuel supply, instrumentation and
controls, operations logic, etc., must be evaluated in more detailed during preparation of
the demolition specification. This will allow a more detailed assessment of the costs
associated with any modifications to existing utility and control systems that will be
required to allow continued operation of the existing Unit 4 during and after demolition of
Units 1/2/3. An allowance for these cost components of the differential between the two
options was included in the demolition cost estimate for the Unit4 continued operation
case. To this allowance for system modifications, URS added the cost for a second set
of mobilization/demobilization costs since the decommissioning project would be done
during two separate time periods. These values are shown within the cost breakdown
sheets.
3.3.
Key Estimate Assumptions and Exclusions
Facilities Decommissioning Estimate Assumptions:
x A gross asbestos removal allowance is included for Reid Gardner Units 1, 2, and
3. It is assumed that due to the commercial operating date for Unit 4, no
asbestos was used during its construction. A quantified asbestos survey was not
available for any of the units at the RG site. The asbestos removal
quantity/allowance was based on previous experience with demolition of coal
fired units of similar size and age. As previously noted, it was also assumed that
the asbestos contaminated materials from the Reid Gardner demolition activities
would be placed in the on-site landfill specifically designed to receive asbestos
for final disposal.
x All equipment, piping, and superstructures will be demolished to grade. The cost
estimate also includes removal of underground piping and duct banks to a depth
of 6 feet, except all circulating water piping. All circulating water lines will be
removed. Any piping or duct banks that are uncovered in the 6-foot target zone
that extend below 6 feet will be removed in their entirety. The raw water supply
lines will be left in place for potential future use at the site.
x Demolish and remove all below grade foundations. Deep foundations, such as
piles, drilled piers, etc., will be demolished down to a depth of 6-12 foot below
grade, depending upon the depth of the water table in various areas of the plant
power blocks.
x It is assumed that the demolition effort will include backfill of all voids created
during concrete and below grade piping and duct bank removal. Fill material will
be obtained from the crushed concrete that is removed, along with available
sources on the Reid Gardner plant site from recent pond construction activities.
Any additional clean fill that is required will be obtained from off-site suppliers;
quotations were obtained from local vendors. The fill will be compacted to 85%
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x
x
x
x
x
x
x
x
x
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of modified proctor standard at all locations and taper fill sites to existing ground
surface at all locations.
Concrete will be processed to remove rebar for salvage credit, loaded and
disposed of either as backfill material in excavations or placed in on-site landfills.
Dispose of all debris (except hazardous materials other than asbestos) in the onsite landfills previously constructed at Reid Gardner. It is assumed that these onsite locations will have sufficient capacity to receive all of the demolition waste
material.
After removal of the remaining coal by plant staff, the demolition effort will include
excavation of two feet below the existing coal stockpiles at Reid Gardner and
disposal of this material in the on-site landfill. The resulting excavation will then
be refilled with available fill material from on- or off-site sources.
Salvage credits are based on current scrap values for ferrous and non-ferrous
materials. An allowance was included in the demolition cost estimate for limited
sales of used equipment (1% of ferrous scrap). The remainder of the equipment
that is removed is assumed to have no salvage value other than the scrap value
of the materials given the uncertainty in the used equipment market.
In estimating the project duration, it is assumed that the facility or designated
units will be “ready” for demolition. The demolition contractor would have free
and un-obstructed access to all equipment and structures that are within the
closure scope. For the option of leaving Unit 4 in operation, it is assumed that
the plant will provide access to the site for any modifications to existing facilities
that might be required prior to the start of demolition.
The switchyards will remain in place, continue in operation and be maintained by
NVE staff.
All modifications to the NVE transmission system relevant to the demolition will
be made prior to demolition.
Boundary fencing and security will remain in place during and after demolition.
Rail spurs to the site that could be utilized for future industrial use will remain.
Lines within the plant will be removed.
Only buildings/property within the fenced area are included in the dismantling
costs. Reconstruction of the administration building and maintenance shops to
support the future combined cycle plant operation should be considered as part
of the future plant installation and are not included in the cost estimates for the
demolition contract.
Boiler structures and stacks may be dropped by controlled blasting.
The economic criteria assumed for the cost estimates are provided in Table 4.
Divert / capture dust suppression water – final disposal somewhere on site.
Facilities Decommissioning Estimate Exclusions:
x
x
x
Removal of unforeseen buried structures. These must be assumed to be
covered by contingency.
Removal of underground piping below a 6 foot depth, except all circulating water
piping and piping discovered in the 6 foot zone that extends below the 6 foot
zone. All circulating water lines will be removed.
Boundary and Control Surveying.
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Transportation and disposal of unidentified hazardous waste beyond the
allowance included in the cost estimate. A project contingency must be
maintained to address these elements of demolition.
Cost associated with a performance and payment bond.
Switchyard decommissioning / demolition.
NVE internal accounting loaders for outside contracts and services beyond the
7% NVE services project adder and the 2% adder for project management.
Dewatering
Table 4. Economic and Design Criteria Assumptions
Parameter
Units
Value
Earthwork Labor Rate
2013 $/hour
$50
Project Contingency
% of Project Cost
15%
Suspended Solids in Ponds
%
15%
Engineering
% of Project Cost
5%
Ferrous Scrap Salvage Value
$/metric ton
$212
Non-ferrous Scrap Salvage Value
$/ton
$3,180
Non-ferrous Scrap % of Ferrous
% of Steel
4%
Equipment Resale
% of Steel
1%
Equipment Value
$/ton
$760
Fill Cost (from On-site or Off-site)*
$/cubic yard
$15
* On-site fill cost is estimated to be the same as delivered cost of clean fill from off-site due to excavation,
preparation, cleaning and on-site movement costs associated with on-site fill sources.
Pond Decommissioning Assumptions
x Pond decommissioning will be handled under the AOC contract. The demolition
contract will only include removal of the berms around the ponds after drainage,
liner removal, excavation and reclamation by others.
x Information missing from drawings is supplemented with measurements taken
from Google Earth™ aerial imagery. On site survey data was not obtained
during this study.
x Liner removal is excluded from demolition cost estimates – by others. This does
not apply to Mesa ponds which are included in the current estimate.
x Assume no off-site hauling will be required for Reid Gardner pond berms. All
material will be disposed of at the on-site landfill or used as fill material for on-site
excavations.
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It will be assumed that all water content in ponds will have been evaporated at
the time of decommissioning/berm removal.
Costs for pond utility and pipeline removal are included.
Pond Decommissioning Exclusions
x
x
x
x
3.4.
Costs for hazardous material testing or disposal are not included.
Costs for liquid treatment are not included.
Additional costs for construction power, water and sufficient lay down space are
not included.
Permit and licensing costs are not included.
Decommissioning and Demolition Sequence and Logic
Demolition Site Activities
x The demolition process estimate is based upon: 1) what must be dismantled, sized
and transported off-site; 2) activities that must be performed prior to the dismantling;
and 3) site activities that occur during the demolition and excavations.
x Equipment modifications/cleaning, debris removal and infrastructure modifications
are activities that may be considered prior to and during the demolition process.
x Upon completion of the isolation of the Demolition Area, the Demolition Contractor
will have clear and un-obstructed access. The actual sequence of demolition will be
defined by the demolition contractor’s execution plan at the time of award. The work
activities may operate independently of each other and may require individual work
plans and considerations.
Demolition Sequence and Logic
The progression and sequence of the work will be directly related to (1) access to the
work area following isolation work (2) environmental issues and (3) Demolition
Contractor’s resources. In general, the major categories of the work logic are:
1. Utility and piping isolation
2. Asbestos and Hazardous Material removal
3. Removal of equipment and debris for access
4. Making the structures safe for dismantling
5. Installing temporary walks, stairs and overhead protection as required
6. Structure and equipment removal
7. Concrete removal
8. U/G piping and duct bank removal
9. Pond closure and berm removal
10. Backfill and compaction of excavations
11. Grading and site Work
Individual demolition work areas for projects may be comprised of:
o Coal Handling – to include all infrastructure and equipment
o Turbine and boiler structures and equipment
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o Pollution control structures and equipment
o Cooling tower, intake and chemical systems
o Infrastructure modifications.
Boilers and Equipment Demolition
x
x
x
x
x
x
x
x
The design of a structure and support system(s) will determine the process for
demolition.
The majority of the structures on the facility may be dismantled by weakening the
support system and pulling or pushing the structure to the ground utilizing grappling
methods.
After portions of the structure are on the ground, the demolition contractor will utilize
mechanical methods to complete the demolition and sizing of scrap metal.
Utilizing hydraulic excavators equipped with specialized attachments including
shears, grapples, and buckets, the contractor will cut and segregate the demolition
material.
Laborers with cutting torches may assist in sizing and segregating the demolition
material.
The boiler and stack may be dismantled by utilizing explosive charges.
The boiler design and support system shall determine the location of the charges
and sequence of dismantling.
Blast monitoring and documentation may be required. These services may include
the following:
o Vibration Monitoring
Third-party vibration monitoring of each blast from three (3) positions,
using seismographs capable of recording three independent particlevelocity channels and one air-overpressure channel.
o Pre-Blast Structure Inspections Inspect and photograph the exterior of various structures adjacent to the jobsite using high-resolution digital photography. All images should be kept on file for future use. Formal reports may be required for specific
structures.
o Video/Photo Explosive-Event Coverage The actual blasts should be documented with a minimum of three video
positions using high-resolution broadcast-quality digital cameras, and two
motor-driven still photo positions.
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SCOPE OF DEMOLITION ESTIMATE
Demolition may commence after all utilities have been cut/capped, equipment is cleaned,
process liquids are removed, and other hazardous waste spills or past events have been
properly cleaned and disposed. These pre-demolition costs are NOT included in this estimate.
It is assumed that these costs are captured elsewhere (Operation, Management & Contractor
Services).
Also, prior to demolition, an asbestos survey needs to be completed, along with asbestos
removal and disposal and universal waste removal and disposal. Since no surveys have been
completed, this estimate includes allowances for:
x Asbestos surveys
x Asbestos abatement and;
x Universal and hazardous waste removal.
Facility and infrastructure demolition will include the complete removal of all power generating
equipment and its above ground support structures. Below grade demolition will include subgrade foundations and structures to 12 foot below grade or to the top of groundwater, whichever
comes first. Additionally, piping and duct banks will be demolished and removed down to a
depth of 6 feet below grade.
If groundwater is encountered during any below grade demolition, it is assumed that the water
can be pumped somewhere on-site without treatment and/or disposal costs.
All demolished building components that are not ferrous or non-ferrous metals will be disposed
of in the on-site landfill. This includes asbestos, concrete, roofing materials and other
demolition trash.
Voids created by removing slabs and foundations will be backfilled to grade with clean fill from
off-site sources or from borrow areas located on-site. On-site sources could include crushed
concrete from foundations that are demolished, berm materials that are removed from existing
ponds, or use of the new pond excavation materials after preparation (crushing, cleaning, etc.).
A 2-foot excavation of underlying soil beneath the coal pile areas is included in the scope. The
soil will be excavated and transported to the on-site landfill. The 2-foot void will be backfilled to
grade with clean fill from off-site sources or from borrow areas located on-site as previously
discussed.
4.1.
Demolition Labor Crew Mix
Crews vary for different operations. The following are the average crew mixes and
major equipment assumed for pricing the work:
x
Above Grade Demolition –
o 5 Heavy Equipment Operators
o 4 Laborers
o 4 Large Excavators with Demolition Attachments
o 1 Track Loader
o Torch Cutting Equipment
o Rigging Supplies
o 1 Supervisor
o Trucks, Trailers and Other General condition items
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x
Below Grade Demolition –
o 6 Heavy Equipment Operators
o 4 Laborers
o 4 Large Excavators with Demolition & Digging Attachments
o 2 Track Loaders
o 4 Dump Trucks
o Torch Cutting Equipment
o 1 Supervisor
o Trucks, Trailers and Other General Condition Items
x
Backfilling Excavations –
o 2 Heavy Equipment Operators
o 2 Laborers
o 4 Large Dozer
o 1 Compactor
o 1 Supervisor
o Trucks, Trailers and Other General Condition Items
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Allowances
An asbestos removal allowance per unit is included. A quantified asbestos survey was
not available for any of the RG units. The asbestos allowance is based on CWC's
knowledge of past removal projects on power plants of similar size. Also included is an
allowance for an asbestos survey. The estimated cost for the survey is based on NV
Energy's knowledge of past survey costs on power plants of similar size:
x
x
x
x
x
Asbestos Survey Allowance Units 1-3: $100,000/unit = $300,000
Asbestos Survey Allowance Units 4: $50,000 (likely done at different time than
1-3 due to option for Unit 4 to remain in service longer)
Asbestos Abatement Allowance - Units 1-3: $2,250,000 ($750,000/unit)
Asbestos Abatement Allowance - Units 4: $125,000 (allowance for gaskets &
other miscellaneous non-friable materials – more recent plant construction date)
3rd party asbestos abatement certification during demolition (Units 1,2,3 =
$300,000)
A universal and hazardous material/waste removal allowance per unit is included for all
units within this scope. A quantified hazardous material and waste survey was again not
available. This allowance is to cover fluorescent lights, bulbs, ballasts, miscellaneous
lab chemicals and other hazardous materials:
x
x
4.3.
Universal & Hazardous Waste Allowance Units 1-3: $225,000
Universal & Hazardous Waste Allowance Units 4: $75,000
Salvage Quantities and Credits
This estimate includes an approximate scrap weight of carbon steel, copper, stainless
steel and aluminum. Weight estimates were developed based upon manufacturer’s
literature, technical manuals, a field inspection and the estimator’s historical knowledge.
Historical knowledge is based on comparison of power plants with similar physical
dimensions and similar generating capacity. A summary of the salvage weights is
included. The details of the weight calculation are not supplied as this is a proprietary
estimating process.
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Salvage Credit
All demolition and dismantling contractors will view the value of the demolished materials
differently. Most will include some form of averaging or other credit/deduction factors for
valuing scrap credit.
The scrap that would result from the demolition of a facility is categorized based upon
the type of metal. The major categories are ferrous and non-ferrous. The value of
ferrous material ($/metric or gross tonne (GT)) is determined by the current market for
scrap and can be obtained from updated publications such as the “American Metal
Market” publications. The actual scrap vendor pricing will take into consideration the
costs associated with present value, less the costs for preparation, shipping and
handling. The costs associated with scrap vendor pricing are quantified by a deduct
factor; this deduct factor is based on the historical knowledge of the demolition
contractor:
x
x
Ferrous – 65%
Non-ferrous – 80%
The total scrap weights are then multiplied by the calculated scrap value to determine
the total scrap credit.
As a check on the process, a vendor quote was obtained for Plate, Structural and Heavy
Melt Scrap from Ecology Auto Parts, a Las Vegas vendor. An additional quote was
obtained from American Metals Market publications. The current price quoted for
ferrous scrap delivered to the scrap facility was approximately $212 per gross tonne,
taking into consideration the preparation and transport of the material to the buyer.
Equipment for Resale
It is assumed that NVE will turn the entire facility (or area of the facility) over to the
demolition contractor at the start of the demolition effort. The contractor’s execution
procedures and pricing at the time of award will define the value of equipment for either
resale on the aftermarket or as scrap.
The inherent value of plant equipment for reuse in its current form may be considered by
some to have value greater than scrap value and by others to have value no higher than
scrap. As scrap, these items have potential monetary value that is based solely on the
metal value on the scrap material market. This estimate assumes that some limited
amounts of equipment will have value greater than scrap value.
Equipment and component salvage value on the after-market is extremely difficult to
quantify. Although the potential value of equipment beyond scrap value is recognized, it
is very market dependent (i.e. potential buyers must have a specific need at the same
time when the piece becomes available).
An allowance, based on total ferrous weight for equipment after-market salvage, such as
pumps, motors, transformers, valves and other miscellaneous equipment, has been
provided based on CWC's historical experience in selling equipment taken from power
plant projects of similar size. This estimate uses a value of 1% of the total ferrous
weight as a quantity for resalable equipment. The equipment is then priced at 4 times
scrap value (based on historical knowledge).
Backfill
Voids created by removal of concrete slabs and foundations will be backfilled to grade
with clean fill from off-site sources or from borrow areas located on-site. A local vendor,
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Direct Grading and Paving, was contacted to provide import fill material pricing. The
quoted pricing was $10 - $15/CY delivered to the site assuming a 60 minute round trip
hauling distance. This current cost estimate uses the low end estimate of $15/CY
delivered.
Lead-Based Paint
Additionally, it is assumed that demolition at all facilities will consider all paint to contain
lead and, therefore, the contractor will be required to take the necessary precautions as
if all coatings contain lead when handling and working with steel and other building
materials. It is assumed that NO lead paint abatement will be required to demolish the
facilities.
It is assumed that lead based paint coating on steel can be handled by the recycling
facilities without prior removal of the coatings. It is also assumed that any debris that
may have lead based paint is not hazardous and does not need to be disposed off-site.
Demolition of Units 1, 2 & 3 First – Unit 4 Remains in Operation
The cost estimates provided in this report considered two cases:
x
x
Demolition of all four units during one project
Units 1, 2 & 3 demolished first, followed by Unit 4 at a later date.
Both cost estimates include mobilization/demobilization, with the “Unit 4 later” case
requiring two periods of mobilization/demobilization. Maintaining Unit 4 in operation may
also require the relocation of some utilities (natural gas and power supply lines, et al.).
The costs for this relocation/modification activity are included in the decommissioning
estimate for this scenario at $2,009,000.
When demolishing all units at the same time, the other significant area of savings would
be in the elimination of the second set of costs for mobilization/demobilization. Doing
both projects at the same time would create mobilization/demobilization cost savings of
approximately $150,000.
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RESULTS OF STUDY
In support of NV Energy’s Southern Fleet Depreciation Study filing with the Public Utilities
Commission of Nevada (PUCN), URS updated the decommissioning and demolition study
specific to the Reid Gardner generating station. Table 5, below, provides a rollup
summary of the total decommissioning and demolition costs, including asset credits, and
contingency.
Table 5. Reid Gardner Demolition & Decommissioning Cost Rollup – Two Options
Option Demolition
Scope
Costs
NV
Utility/Road
Asbestos Operations
Modifications for
Asset
Survey & Management,
Continued Unit 4
Contingency
Recovery
Hazardous Engineering,
Operation +
@15%
Credit
Materials Design & PM
Mob/Demob
Allowance Consulting
Adders
Services
Total Cost
By Option
1/2/3 &
4 later $36,801,000
$2,159,000
$3,325,000 $5,920,000
$7,231,000 ($9,994,000)
$45,442,000
1/2/3/4 $36,801,000
$0
$3,325,000 $5,618,000
$6,862,000 ($9,994,000)
$42,612,000
The cost breakdowns for the various cost categories can be found in the appendices
listed below:
o APPENDIX 1 – Demolition and Decommissioning Cost Summary
o APPENDIX 2 – Facility and Infrastructure Decommissioning and Demolition
Cost Breakdown
o APPENDIX 3 – Reid Gardner Trip Report
o APPENDIX 4 – Quotations for Scrap Prices and Fill Costs
o APPENDIX 5 – Civil Work and Pond Berm Demolition Cost Breakdown
Page 28 of 56
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Document No.:
POND DECOMMISSIONING UPDATE Revision No.:
30577
12-05-100-003
1
APPENDICES
APPENDIX 1 – Demolition and Decommissioning Cost Summary – Units 1-4 in 2014
Description
AsbestosSurvey&AbatementAllowance
Universal&HazardousWasteAllowance
Facility&InfrastructureDemolition
AssetRecoveryCredit:
ͲFerrous
ͲNonͲFerrous
ͲEquipmentResale
AssetSalvageCredit
Units1Ͳ3
Unit4
TOTALCOST
2,850,000
225,000
3,336,000
175,000
75,000
3,278,000
3,025,000
300,000
6,614,000
(2,974,000)
(1,994,000)
(119,000)
(5,087,000)
___________
(2,868,000)
(1,924,000)
(115,000)
(4,907,000)
___________
(5,842,000)
(3,918,000)
(234,000)
(9,994,000)
___________
$1,324,000
($1,379,000)
($55,000)
5,576,000
2,835,000
2,937,000
___________
2,261,000
1,975,000
14,603,000
___________
7,837,000
4,810,000
17,540,000
___________
$17,759,000
$22,367,000
$40,126,000
355,000
888,000
1,243,000
___________
447,000
1,118,000
1,566,000
___________
803,000
2,006,000
2,809,000
___________
ABOVEGRADEDEMOLITIONSUBTOTALW/CREDITS
FacilityBelowGradeDemolition
BackfillFacilityExcavations
CivilWork&PondDemolition
SUBTOTALDEMOLITIONCOST(W/OCREDITS)
%
Demo
OTHERPROJECTCOSTS:
Cost
ProjectManagement
2%
Engineering&Design
5%
7%
NVOperation,Management&ContractorServices
SUBTOTALSW/OCREDITS
15%
CONTINGENCYW/OCREDITS
GRANDTOTAL(INCLUDINGCREDITS)
$20,245,000 $25,498,000 $45,744,000
3,037,000
3,825,000
6,862,000
___________ ___________ ___________
$18,195,000
$24,416,000
$42,612,000
Note: Added Cost for Unit 4 Continued Operation (including markups) = $2,830,000
- Includes utility relocations and two mobilization/demobilization activities.
Page 29 of 56
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Project No.:
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REID GARDNER DEMOLITION AND
Document No.:
POND DECOMMISSIONING UPDATE Revision No.:
APPENDIX 2 – Reid Gardner Facility and Infrastructure Decommissioning/Demolition
Cost Breakdown
Reid Gardner Below-Grade Demolition –
Takeoff Quantities for Footings/Foundations/Grade Beams Quantity
Length
(ft)
Width or
Height (ft)
Depth or
Thickness (ft)
Square
Feet/set
Total Cubic
Yards
Total Tons
Power Block, FF,
Scrubber & Boiler
Slab/Mat
3 sets
520’
206’
8’
107,120
95,217
190,445
Cooling Tower Walls
3 sets
542’
4’
1’
2,168
240
483
Cooling Tower Slab
3
220’
51’
1’
11,220
1248
2,493
Stack Foundation
3
40’
40’
5’
1600
888
1779
Total Units 1,2,3
---
---
---
---
---
97,593
195,200
Power Block Slab/Mat
1
220’
100’
7’
22,000
5,704
11,407
Boiler Mat
1
150’
172’
7’
25,800
6,689
13,378
Cooling Tower Walls
1 set
970’
1’
4’
970
144
287
Cooling Tower Slab
1
425’
60’
1’
25,500
944
1889
Baghouse & Scrubber
1
220’
220’
7’
48,400
12,548
25,096
Stack Foundation
1
40’
40’
7’
1600
415
830
Total Unit 4
---
---
---
---
---
26,444
52,887
Description
Units 1,2,3
Unit 4
Page 30 of 56
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REID GARDNER DEMOLITION AND
Document No.:
POND DECOMMISSIONING UPDATE Revision No.:
Reid Gardner Below-Grade Coal Pile Excavations and Fill Quantities
Description
Length (ft)
Width or
Height (ft)
Depth or
Thickness (ft)
Square
Feet
Total Cubic
Yards
Total Tons
3
(@100lbs/ft )
Coal Pile Excavations – Fill
Requied
---
---
---
---
---
---
Units 1,2,3 Coal Pile
Excavation
675’
450’
2’
304,000
22,500
30,375
Unit 4 Coal Pile Excavation
1100’
650’
2’
715,000
52,960
71,500
RG Coal Pile Excavations –
Total Fill Required
---
---
---
---
75,460
101,875
Backfill Foundations/Voids
to Grade
---
---
---
---
---
---
Units 1,2,3
---
---
---
---
97,593
131,800
Unit 4
---
---
---
---
26,444
35,700
RG Foundation Excavations
– Total Fill Required
---
---
---
---
124,037
167,500
Description
---
---
$/Cubic
Yard
---
Total
Yards
Fill Cost ($)
RG Total Fill Required & Fill
Cost
---
---
$15*
---
199,500
$2,992,500
* Fill cost taken from multiple phone and email quotes obtained in July/August 2013:
x
x
x
Direct Grading & Paving – Don Mayhall 702-636-5377
o Trucking from 30 min away = $10-15/yd3
o On-site dig/prep/haul/dump = $10-15/yd3
o Union requirement = add 30%
Alternate quote from Impact Sand & Gravel/Wadley Construction provided in Appendix 4
$15/yd3 fill cost delivered to RG site assumed for demolition cost estimate
Page 31 of 56
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REID GARDNER DEMOLITION AND
Document No.:
POND DECOMMISSIONING UPDATE Revision No.:
Reid Gardner Above-Grade Hard Demolition – Takeoff Quantity Sheet
Quantity
Length
(ft)
Width or
Height (ft)
Depth or
Thickness (ft)
Square
Feet/unit
Total Cubic
Yards 1,2,3
Total Tons
Turbine Generator Legs
18
26’
7.6-16.7’
6-7.8’
1703
1264
2530
Beams
21
12-20’
4-7’
3-6’
608
344
689
Generation Building –
Deck
3
133’
84’
0.7’
11,172
827
1654
Miscellaneous
Equipment Pads
---
---
---
---
---
630
1260
Baghouse Pads/Slab
---
---
---
---
---
525
1047
Stack & Liner
---
---
---
---
---
3,634
7,270
Total Units 1,2,3
---
---
---
---
---
7,224
14,450
Turbine Generator Legs
8
5-15.5’
40’
6.5-7’
3,373
836
1672
Beams
12
5’
22’
5’
1320
244
489
Beams
2
2’
100’
7.5’
1500
389
778
Generation Building –
Top Floor
1
100’
220’
0.8’
22,000
679
1358
Coal Pulverizers
4
20’
30’
3’
2,400
267
533
Baghouse Pads
40
3’
3’
1’
360
13
27
Stack & Liner
1
---
---
---
---
3,208
6,415
Miscellaneous Buildings
1 set
---
---
---
---
3,176
6,351
Total Unit 4
---
---
---
---
---
8,812
17,623
Description
Units 1,2,3
Unit 4
Page 32 of 56
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REID GARDNER DEMOLITION AND
Document No.:
POND DECOMMISSIONING UPDATE Revision No.:
Reid Gardner Above-Grade Soft/Trash Demolition – Takeoff Quantities
Quantity
/unit
Length
(ft)
Width
(ft)
Height
(ft)
Square
Feet/unit
Pounds/ft
Total Tons
Turbine Generator Cover –
Built-up Roof
1
58’
40’
---
2,320
3.5
12
Insulated Panel Walls
1 lot
196’
13’
0.3’
2,548
5
18
Cooling Tower
1
215’
65’
---
13,975
78*
1638
Control Room
1
93’
27’
---
2,511
7
27
Tripper Structure Roof
1
133’
25’
---
3,325
3.5
18
Conveyor Belt
2
266’
4’
---
2,128
5
15
Miscellaneous Insulation
1 lot
---
---
---
31,400
3
140
Boiler Refractory
1 lot
---
---
---
17,400
125
1632
Baghouse Insulation – Walls
Hoppers & Roof
1 lot
---
---
---
17,047
5
129
Total Units 1,2,3
---
---
---
---
---
---
3,630
Office Building – Roof,
Internal Walls and Floors
1
65’
60’
24’
85,700
7-14
371
General Services Building
Roof & Walls
1
100’
220’
97’
84,800
3
127
Coal Bunker Roof & Deck
1
120’
60’
---
7,200
---
278
Baghouse Insulation
1 lot
---
---
---
68,400
2
69
Cooling Tower
1
425’
60’
---
25,500
78*
997
Conveyor Belt
1
5700’
4’
---
45,500
5
114
Total Unit 4
---
---
---
---
---
---
1966
Description
2
Units 1,2,3
Unit 4
2
* Based on Unit #3 cooling tower @ 733,000 lbs. & 145’ long x 65’ wide = 78 lbs/ft
Page 33 of 56
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Document No.:
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30577
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1
RG Units 1/2/3 Take-off Summary - Above-Grade Steel Demolition &
Salvage
Quantity
for 3
Units
Length
(ft)
Width
(ft)
Height, Depth
or Thickness
(ft)
Per Unit
(tons)
Total for 3
Units
(tons)
120 MW Steam Generator
3
---
---
---
437
1311
Generator Condenser
3
---
---
---
155
465
Deaerator and Heaters
3 sets
---
---
---
47
141
Bottom Ash Handling Equipment
3
---
---
---
375
1125
Misc. Pumps, Equipment & Tanks
3 sets
---
---
---
119
357
3
---
---
---
171
513
Generator Cover Columns
3 sets
---
---
---
2
6
Generator Cover Beams
3 sets
---
---
---
5
15
General Building Siding/Structure
3
133’
84’
26’
39
117
Support Beams – 24 WF & 18 WF
3 sets
84’133’
---
---
89
267
Boiler
3
71’
52’
130’
2,880
8,640
Boiler Coal Bunker
3
133’
25’
---
44
132
Bunker Support Beams
3 sets
25’
---
---
70
210
Tipper Structure Above Silos and Beams
3 sets
16’
---
---
9
27
3
133’
---
---
2
6
3 sets
133’
---
---
20
60
Coal Silo Bottom Structure
12
100’
---
---
46
138
Coal Feeders
12
---
---
---
16
48
Feeder Deck
3
133’
25’
---
25
75
Fans & Duct to Stack
3 sets
---
---
---
120
360
Baghouse Structure
3
83’
52’
45’
236
708
Coal Conveyor
1
232’
---
---
40
124
Description
Units 1,2,3 (equip. weights from PO books)
Transformer
Units 1,2,3 (estimated equip. weights)
Roof Beams
Double Conveyor
Page 34 of 56
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Document No.:
POND DECOMMISSIONING UPDATE Revision No.:
Description
Coal Silos & Scrubbers
30577
12-05-100-003
1
Quantity
for 3
Units
Length
(ft)
Width
(ft)
Height, Depth
or Thickness
(ft)
Per Unit
(tons)
Total for 3
Units
(tons)
3 sets
---
---
---
279
837
---
---
---
5,226
15,678
4,666
13,998
Units 1,2,3 Total Tons
Units 1,2,3 Total Gross (Metric) Tons
Salvage Quantities Units 1,2,3
Non-ferrous
4% of
total
---
---
---
---
627
Equipment Resale
1% of
total
---
---
---
---
157
Page 35 of 56
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Document No.:
POND DECOMMISSIONING UPDATE Revision No.:
30577
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1
RG Unit 4 Take-off Summary Above-Grade Steel Demolition & Salvage
Quantity
for Unit 4
Length
(ft)
Width
(ft)
Height, Depth
or Thickness
(ft)
Plan Area
2
(ft )
Total Tons
for Unit 4
1
65’
60’
24’ (2 story)
7800
27
1 set
---
---
---
81,800
286
1
220’
100’
97’
22,000
770
1 set
---
---
---
---
400
Condenser
1
37’
23’
20’
---
400
Heat Exchangers
3
---
---
---
---
53
Turbine Generator
1
---
---
---
---
865
Boiler
1
---
---
---
---
9289
Coal Bunker Building
1
120’
60’
170’
---
432
Baghouse Structure
1 set
71’
115’
---
---
931
Scrubber System and Ductwork to
Stack
1 set
---
---
---
---
400
Miscellaneous Tasks
1 set
---
---
---
---
414
Coal Conveyor
1 set
---
---
---
---
501
8
---
15’ dia.
80’
---
352
Unit 4 Total Tons
---
---
---
---
15,112
Unit 4 Total Gross (Metric) Tons
---
---
---
---
13,501
Description
Unit 4 Steel/Building Demolition
Office Building
Miscellaneous Buildings
Turbine Building
Miscellaneous Pipe and Materials
Silos
Page 36 of 56
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POND DECOMMISSIONING UPDATE Revision No.:
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1
RG Unit 1,2,3,4 Demolition Labor Estimate Summary
Labor
Hours
Total
Labor Cost
($)
Subcontract
($)
Equipment
($)
Indirects
($)
Total Cost ($)
Asbestos Abatement
---
---
2,350,000
---
---
2,350,000
Universal & Hazardous Waste
---
---
225,000
---
---
225,000
Demo Above Grade Structures
18,460
1,010,000
180,000
741,400
236,200
2,167,600
Trash Load/Haul/Dump
180
12,400
15,800
22,000
6,100
56,300
Demo Above Grade Concrete
2,510
144,200
105,200
159,800
50,000
459,200
Demo Below Grade Foundations
20,500
1,188,400
843,200
1,806,000
469,400
4,307,000
Excavate Coal Pile
630
38,200
75,000
45,500
19,400
178,100
Backfill Foundations to Grade
1950
115,800
---
209,800
159,200
484,800
Backfill Coal Pile Area
450
26,700
---
48,500
36,700
111,900
Total Labor/Equipment Units
1,2,3
44,680
2,535,700
3,794,200
3,033,000
977,000
$10,340,000
Asbestos Abatement
---
---
175,000
---
---
175,000
Universal & Hazardous Waste
---
---
75,000
---
---
75,000
Demo Above Grade Structures
17,370
949,900
65,000
686,200
329,400
2,030,500
Trash Load/Haul/Dump
100
6,900
8,800
12,200
5,400
33,300
Demo Above Grade Concrete
3,090
178,000
95,000
198,200
91,300
562,500
Demo Below Grade Foundations
5,560
322,000
332,400
489,400
221,500
1,365,300
Excavate Coal Pile
1470
90,000
176,700
107,100
72,400
446,200
Backfill Foundations to Grade
530
31,400
---
56,900
68,300
156,600
Backfill Coal Pile Area
1060
62,800
---
113,800
136,700
313,300
Total Labor/Equipment Unit 4
29,180
1,641,000
927,900
1,663,800
925,000
$5,158,000
Description
Units 1,2,3
Unit 4
Page 37 of 56
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REID GARDNER DEMOLITION AND
Document No.:
POND DECOMMISSIONING UPDATE Revision No.:
Salvage Credit Calculations
Salvage Quantities Units 1,2,3
Factor - % of Ferrous
Value
Quantity
Salvage
Credit
Non-ferrous
4% of total
$1.59/lb
1,254,000 lb.
$1,994,200
Equipment Resale
1% of total
$760/ton
157 tons
$119,100
100% of total
$212.44/
gross ton
13,998 gross tons
$2,973,700
Ferrous
Units 1,2,3 Total Salvage Credit
Salvage Quantities Unit 4
$5,087,000
Factor - % of Ferrous
Value*
Quantity
Salvage
Credit
Non-ferrous
4% of total
$1.59/lb
1,210,000 lb.
$1,924,000
Equipment Resale
1% of total
$760/ton
151 tons
$114,800
100% of total
$212.44/
gross ton
13,501 gross tons
$2,868,200
Ferrous
Unit 4 Total Salvage Credit
$4,907,000
*See salvage value summary table that follows for value calculations and sources
Page 38 of 56
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Document No.:
POND DECOMMISSIONING UPDATE Revision No.:
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1
Salvage Value Summary*
Average
Value
Used in
Cost
Estimates
Gross
Value
Units
Adjustment
Factor** - %
Net
Value
Estimated
% of
Quantity
Calculated*
$326.83
/Gross
Ton
65%
$212.44
100%
$212.44
No.2 Heavy
Copper & Wire
(fob LA)
$2.75
/Lb
80%
$2.20
65%
$1.43****
AMM
7/2/13***
Old Aluminum
Sheet & Cast
(fob LA)
$0.58
/Lb
80%
$0.46
30%
$0.14****
Non-Ferrous –
Stainless Steel
AMM
7/2/13***
304 Solids/
Clips (fob LA)
$0.56
/Lb
80%
$0.45
5%
$0.02****
Used Equipment
Sales
Historical
Data
Resale
Equipment
$0.38
/Lb
100%
$0.38
100%
$0.38
Salvage
Materials - Value
Source
Ferrous Scrap
AMM
7/2/13***
Heavy Scrap
(fob LA)
Non-Ferrous –
Copper/Brass
AMM
7/2/13***
Non-Ferrous Aluminum
Description*
* Descriptions, factors, and estimated breakdown of non-ferrous material is based on
historical data/experience
** Adjustment Factor – Includes deductions for preparation, handling and freight
*** AMM = American Metals Scrap Metal Values Publication 7/2/13 – copy attached for
reference
**** Weighted Average Value for Non-ferrous Material = $1.43 + $0.14 + $0.02 =
$1.59/lb
Page 39 of 56
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Document No.:
POND DECOMMISSIONING UPDATE Revision No.:
30577
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1
Assumptions and Design Basis for Reid Gardner Decommissioning Assessment:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Demolitionmaycommenceafterallutilitieshavebeencut/cappedfortheunitstobe
demolished,asbestoshasbeenremovedanddisposedofintheonͲsitelandfill,
equipmentiscleaned,processliquidsareremoved,andotherhazardouswastespillsor
pasteventshavebeenproperlycleanedanddisposed.
Facilityandinfrastructuredemolitionwillincludethecompleteremovalofallpower
generatingequipment,abovegroundsupportstructures,andsubͲgradefoundations
andstructuresto12footbelowgradeortothetopofgroundwater,whichevercomes
first.Additionally,pipingandductbankswillbedemolishedremoveddowntoadepth
of6footbelowgrade.AlldemolishedbuildingcomponentsthatarenotferrousornonͲ
ferrousmetalswillbedisposedofintheonͲsitelandfill.
Voidscreatedbyremovingslabsandfoundationswillbebackfilledtogradewithamix
ofcrushedconcrete,bermmaterialsandpreviousexcavationfillfromonͲsitepond
construction.FillfromoffͲsitewillbeprocuredasneeded.
A2Ͳfootexcavationofunderlyingsoilinthecoalpileareasisincludedinthescope–
materialtransportedtotheonͲsitelandfill.
AnasbestosremovalallowanceisincludedforUnits1Ͳ4.Aquantifiedasbestossurvey
wasnotavailableforanyoftheunits.TheasbestosallowanceisbasedonCleveland
WreckingCompany's(CWC)knowledgeofpastremovalprojectsonpowerplantsof
similarsize.Alsoincludedisanallowanceforanasbestossurvey.Theestimatedcost
forthesurveyisbasedonNVEnergy'sknowledgeofpastsurveycostsonpowerplants
ofsimilarsize.
Auniversalandhazardousmaterialandwasteremovalallowanceperunitisincludedfor
allfourunits;thisincludesfluorescentlights,bulbs,ballasts,miscellaneouslabchemicals
andotherhazardousmaterials.Aquantifiedhazardousmaterialandwastesurveywas
notavailable.ThismaterialwouldbetakentoanappropriatelandfilllocatedoffͲsite.
Additionally,itisassumedthatdemolitionwillconsiderallpainttocontainleadand,
therefore,thecontractorwillberequiredtotakethenecessaryprecautionsforhandling
andworkingwithsteelandotherbuildingmaterialsasifallcoatingscontainlead.Itis
assumedthatleadbasedpaintcoatingonsteelcanbehandledbytherecyclingfacilities
withoutpriorremovalofthecoatings.Itisalsoassumedthatanydebristhatmayhave
leadbasedpaintisnothazardousanddoesnotneedtobedisposedoffͲsite.
DemolitionanddismantlingprojectsincludescrapcreditforferrousandnonͲferrous
metals.Theinherentvalueofplantequipmentmayhavenousefulvaluebeyondscrap
intheircurrentformandthemarketconditionsatthetimeofdemolition.Forthis
analysis,ithasbeenassumedthatmostoftheequipmentitemswillhavepotential
monetaryvaluebasedsolelyonthemetalvalueinthescrapmaterialmarket.The
estimateincludesanallowancedforasmallfractionofusedequipmentsalesbasedon
1%ofthescrapweightofferroussalvagedmaterials.
Estimatesforequipmentweightsmaybebaseduponmanufacturer’sliterature,
technicalmanualsortheestimatedsizeandweightofindividualcomponentsbasedon
historicalexperienceofthedemolitioncontractor.Thetotalscrapweightsarethen
multipliedbythecalculatedscrapvalue(quotationslessexpensesforpreparationand
shipment)todeterminethetotalcredit.
Thescrapthatwouldresultfromthedemolitionofafacilityiscategorizedbasedupon
thetypeofmetal.ThemajorcategoriesareferrousandnonͲferrous,withnonͲferrous
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brokendownintocopper,aluminumandstainlesssteelfractions.Thevalueis
determinedbythemarketforscrapandcanbeobtainedfromupdatedpublications
suchasthe“AmericanMetalMarket”.Thescrapvendorpricingwilltakeinto
considerationthecostsassociatedwithpresentvalue,shippingandhandlingcosts.
EquipmentandcomponentsalvagevalueontheafterͲmarketisextremelydifficultto
quantify.Althoughvalueofequipmentbeyondscrapvalueisrecognizedtobepossible,
itisverymarketdependentandusuallyonlyquantifiableatthetimeofbiddingfor
demolitionpricing.ItisassumedthatNVEwillturntheentirefacility(orareaofthe
facility)overtotheselecteddemolitioncontractoratthestartoftheproject.Theactual
costfordemolitionwillbebasedonthecontractor’sexecutionproceduresandpricing
atthetimeofaward,includingtheassessedvalueofequipmenteitherinthe
aftermarketorasscrap.Anallowancefortypicalequipmentsalvage,suchaspumps,
motors,transformers,valvesandothermiscellaneousequipment,hasbeenprovidedin
theestimatebasedonCWC'sexperienceinsellingequipmentcomponentstakenfrom
powerplantprojectsofsimilarsize.
CostAllowances:
A.
Universal&HazardousWasteDisposalAllowanceUnits1Ͳ3:$225,000
B.
Universal&HazardousWasteDisposalAllowanceUnits4:$75,000
C.
AsbestosSurveyAllowanceUnits1Ͳ3:$100,000
D.
AsbestosSurveyAllowanceUnits4:$50,000(likelydoneatdifferenttimethan
units1Ͳ3–remainsinservicelonger)
E.
AsbestosAbatementAllowanceͲUnits1Ͳ3:$2,812,500($937,500/unit)Ͳ
includesdemolitioncontractormarkup
F.
AsbestosAbatementAllowanceͲUnits4:$125,000(allowanceforgaskets&
othermiscellaneousnonͲfriableasbestos)Ͳincludesdemolitioncontractor
markup.
REID GARDNER DEMOLITION CONTRACT SCHEDULE – All Units During One Project –
(Note: May be aggressive – need confirmation from demolition contractors)
ACTIVITYDURATIONS
(inMonths)
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APPENDIX 3 - Reid Gardner Trip Report – June 11-14, 2013
URS E&C staff travelled to the Reid Gardner site for discussions with NV Energy and contractor
staff. The trip occurred 6/11-6/14/2013.
Attendees:
URS:
Dan Hoffner – Cleveland Wrecking Demolition Manager
Jason Mann – URS Civil Engineer
Bob Keeth – Project Manager
CH2M Hill:
Matt Johns – Pond Reclamation
Ron ______ - Pond Reclamation
NV Energy:
John Lescenski – Project Manager
Jason Hammons – Plant Engineer
Bill Slade – Sunrise Demolition Project Manager
Darren Patten – Plant Director
Debbie Jones – Document/Drawing System Specialist
The specific issues addressed during these meetings and site walk downs included the following:
1. Scope and Goals - Previous study of the South Fleet was critiqued based on use of high
contingency allowances, high engineering costs, low salvage credits, and the methods
used to calculate depreciation. The purpose of this updated study is to resolve these
issues for the Reid Gardner (RG) plant demolition estimate through a more detailed
assessment of plant data and drawings. One major assumption is that all
demolition/reclamation below grade, except where associated with equipment or
utilities, will fall under the scope of the Administrative Order of Consent (AOC) project.
AOC only applies to the Reid Gardner plant.
2. Ponds – CH2M Hill has been on site for 5 years assisting NV Energy with pond designs
and shutdowns. They will direct the AOC activities that will address the liner removals
and all below grade reclamation and any ground water contamination issues.
Responsibility for pond solids disposal varied during the discussions – consensus of the
notes taken by URS staff was that movement of these solids to the landfill was to be
included in the AOC project scope. All ponds located north of the rail tracks are used by
Unit 4 and their demolition should be included in that cost estimate.
3. Pond Transfer Piping – Removal of all slurry transfer piping from plant to the ponds is in
the demolition scope of work and cost estimates.
4. Other Underground Piping – To the extent that information is available, removal of
underground piping should be included in the Reid Gardner demolition cost estimates
(previously excluded). This includes scrubber underground piping and foundations.
5. Hg and NOx Emissions – The plant already meets the Hg emission requirements, except
for the required addition of a monitoring methodology. The plant expects to meet NOx
emission requirements using combustion tuning.
6. Sunrise Experience – Costs for the Sunrise demolition varied widely from the initial
estimate through the completion of site activities. The transformers were cut up and sent
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8.
9.
10.
11.
12.
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14.
15.
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to China. The plan for the resale of the CT was cancelled when it was found that it
would cost $13 million to refurbish the machine for resale. It was scrapped.
The Sunrise costs for leaving common systems in place for continued operation of some
units on site added more than $5 million to the demolition cost at the site (included
utility and underground relocations). This demolition did not chase pedestals more than
10’ below ground and did not remove the thick concrete pad more than 20 feet below
grade. A similar approach should be assumed for RG.
Ground Water Level at RG – The ground water levels at Reid Gardner vary from 6-12
feet across the site. It is typically at 10’ below the Unit 1/2/3 plant. The depth varies
approximately 1’ throughout the year.
Plant Operation – Units 1/2/3 vs. Unit 4 at RG have been operated as separate entities in
the past. This limits that number of cross ties and shared services that will need to be
addressed during the demolition planning for the scenario where Unit 4 is done later than
Units 1/2/3.
Coal Pile Removal – Cost estimate will assume that any remaining coal will be moved
by NV Energy over to the Unit 4 pile. The demolition estimate will include the removal
of the contaminated soil down 2 feet below grade, with final disposal into the on-site
landfill. All close-in piles are used for Units 1/2/3. The 25,000 cubic yards of coal ash
located below the coal piles will be left in place for purposes of the estimate.
Shared Services Allowance – Plant staff estimated that based on Item 6., the cost
allowance for utility relocations, etc. should be $500,000 or less. This line item should
include the following:
o Isolation of water fire loops (a new project is planned to upgrade the Unit 1/2/3
fire water loop)
o Relocate underground shared pipe lines and utility services/duct banks
o Move a power supply line to the coal yard for Unit 4
o Relocation of the natural gas line for Unit 4 that currently runs behind Units 1/2/3
in the demolition area. Approximately 300 MW supply capacity.
o Potable water comes from the City of Moapa and enters the plant below the South
Gate.
o Other process water, circulating water and plant instrument air lines.
Future Brown Field Planning – NV Energy may install a new combustion turbine in the
brownfield area left after the removal of the Unit 1/2/3 coal pile. This could occur as
early as 2016.
Raw Water Ponds – All of these ponds will stay intact.
Fly Ash Storage Pile – Removal and reclamation of this pile located near the water pond
is in the AOC scope.
Switchyard – No demolition of the switchyard should be included in the cost estimate.
This equipment may be reused for future generation. The boundary limits of the
estimate are the removal of the overhead transmission cables form the plant to bus in the
switchyard.
Mesa Ponds – The current plan is to abandon the mesa ponds in place. They were
designed for this to occur. The glauber salt removal and final disposal in the new on-site
landfill should be included in our scope and cost estimates. Costs should be addressed as
a dollars/ton disposal cost. (see conflict with scope description in Item 2.) Discussion of
the placement of 2 feet of soil after salt removal was also brought up for M5 and M7, but
not confirmed.
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16. Asbestos Removal and Disposal – An allowance will be included in the demolition cost
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
estimate for asbestos removal based on historical experience. The asbestos survey
documents provided for RG did not quantify the asbestos present on the RG site. Final
asbestos disposal will occur in the designated landfill located on-site southwest of the
plant. Sources of asbestos include window caulking, tiles, mortar and duct gaskets. It
should be assumed that Units 1 & 2 are mostly asbestos insulation, etc., Unit 3 has less,
and asbestos in Unit 4 is minimal, confined to the ductwork gaskets. ACM = asbestos
containing material.
Other Hazardous Waste - All other hazardous wastes encountered during the demolition
effort will be moved to a proper disposal facility off site (previously excluded). The
hazardous material disposal costs will again be based on previous experience at other
sites since no survey information was available.
Concrete Disposal – Concrete foundations will be broken up to remove rebar for salvage
(approximately 1 ton of rebar per 10 cubic yards of concrete valued at approximately
$250/ton). The broken concrete will be considered to be clean fill and used to fill
excavations below the ground water level. Any excess will be moved to the on-site
storage pile for future use.
Fill Material – It is expected that approximately 2-3 million yards of fill dirt will be
required for the site. Fill dirt may be taken from existing sources at the site (berms
removed during demolition or brought in from off-site under existing contracts for this
material.
Flood Control Ponds – It was noted that these ponds are located in the 100 year flood
plain. July and August are the monsoon season where flooding is possible.
Landfill Closure – The closure of the on-site landfills is included in the demolition scope
of work. Will include placement of 2 feet of fill dirt cover and spray of palliatives to
stabilize soil.
Water Supplies – Demolition scope should include the removal of the water intake
structure used by RG for raw water supplies. The three water lines running from the
well sites and the river intake were to be left in place for future potential use. The well
sites can be left in place. The river water intake is 12 miles away, and the line is 14”
diameter and buried 10 feet deep, used by Unit 4. The final inclusion of these water line
removals is not confirmed, but a cost should be included as an option.
Water Rights – These rights will not be included in the salvage value of the plant – may
need to use these rights for future development of the RG brownfield site.
Valmy Status – The Valmy plant is not included in the NVision Plan. Valmy is owned
and operated by Sierra Pacific and Idaho Power, and it is not part of the plan.
Power Block Foundation Removal – The demolition estimate will include concrete
foundation removal to a depth of 12 feet below the entire power block for all units. This
excavation will then be backfilled to grade.
Ground Water – Ground water cannot be used directly during the demolition effort. It
must be stored at least temporarily in a lined pond – impacted by water rights and
permitting issues. All dewatering wells on site go directly to raw water ponds.
Engineering Costs – For this updated analysis, a value of 5% of project cost should be
used. It is recognized that this value may be higher, especially in the case where Unit 4
remains is service during Unit 1/2/3 demolition and for 2-3 years after.
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28. Drawing Transmittals – Jason Hammons (plant equipment), Matt Johns (ponds) and
Debbie Jones (foundations, etc.) will transmit drawings to URS via an .ftp site available
to NV Energy. The site available to URS was found to not be user friendly.
29. Fabric Filter Potential Salvage Value – The FFs at Reid Gardner were installed since
2008 (estimated cost at $50 million for Units 1/2/3). Design was modular and may be
able to disassemble and ship to another site. NV to contact KBR for rough estimate of
this potential value.
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APPENDIX 4 – Quotations for Scrap Metal Prices and Fill Cost
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From: Bob Motis [mailto:[email protected]]
Sent: Friday, August 09, 2013 12:03 PM
To: Mann, Jason
Subject: Budget numbers
Jason,
Sorry I forgot to send an estimate of costs to import up to 200,000 cy of fill dirt to Reid Gardner substation.
9” minus pit run = $2.00 per ton = $3.4 per CY 6” minus Granular Backfill = $ 2.75 per Ton = $4.68 per CY 3” minus Structural Fill = $3.25 per ton = $5.50 per CY.
Trucking in Double Belly would be $4.25 – $4.50 per ton or $ 7.20 to 7.65 per CY. These are worst case from Commercial Pit.
I know of an option to rent a Pit in Moapa that could cut the trucking in Half for a site much closer. Depends how conservative you want to be. Call with any questions.
Sorry for the delay. Check out our web sites for our capabilities.
Thanks
Bob Motis
Wadley Construction, Inc.
dba, Impact Sand and Gravel
A SERVICE DISABLED VETERAN OWNED SMALL BUSINESS (SDVOSB)
145 E. Warm Springs, Las Vegas, NV 89119 | Office/Fax 702.853.9511 | Cell 702.355.2401
www.wadleyconstruction.com
www.impactsandandgravel.com
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APPENDIX 5 – Civil Work and Pond Decommissioning/Demolition Cost Breakdown
REIDGARDNERPONDBERMEXCAVATIONLABOR/MATERIALESTIMATE
SUMMARY
WORKͲ
HOURS
LABOR
COST($)
4A
2,299
114,959
Ͳ
34,488
27,590
177,036
C1+C2
TOTALUNITS
1,2,3
1,493
74,654
Ͳ
22,396
17,917
114,967
3,792
189,612
Ͳ
56,884
45,507
$292,003
B1+B2
2,397
119,861
Ͳ
35,958
28,767
184,586
B3
1,524
76,222
Ͳ
22,867
18,293
117,382
E1+E2
2,161
108,025
Ͳ
32,408
25,926
166,359
F+G
1,274
63,700
Ͳ
19,110
15,288
98,098
MESA5
4,127
206,374
Ͳ
61,912
49,530
317,816
MESA7
RAWWATER
1,2,3ͲA,B,4
STORMWATER
TREATED
WATER
GLAUBERSALT
(MESA5)
GLAUBERSALT
(MESA7)
TOTALUNIT4
3,301
165,046
Ͳ
49,514
39,611
254,171
3,658
182,882
Ͳ
54,865
43,892
281,638
154
7,722
Ͳ
2,317
1,853
11,892
202
10,111
Ͳ
3,033
2,427
15,571
2,253
112,667
Ͳ
33,800
27,040
173,507
2,278
113,889
Ͳ
34,167
27,333
175,389
23,330
1,166,499
Ͳ
349,950
279,960
$1,796,409
DESCRIPTION
MATERIAL EQUIPMENT INDIRECTS TOTALCOST
COST($)
COST($)
($)
($)
UNITS1,2,3
UNIT4
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REIDGARDNERUTILITYREMOVALLABOR/MATERIALESTIMATESUMMARY
WORKͲ
HOURS
LABOR
COST($)
3,062
153,115
Ͳ
45,934
36,747
235,796
5’x2’
1,500
75,000
Ͳ
22,500
18,000
115,500
2’x2’
6,780
339,000
Ͳ
101,700
81,360
522,060
MISC.UTILITYCORRIDOR
ASSUME2–6”LINES
3,724
186,198
Ͳ
55,859
44,688
286,745
ASSUME4–6”LINES
4,738
236,912
Ͳ
71,074
56,859
364,844
583
2,314
29,150
115,675
Ͳ
Ͳ
8,745
34,703
6,996
27,762
44,891
178,140
ROADS
917
45,867
Ͳ
13,760
11,008
70,635
PARKING
320
16,000
Ͳ
4,800
3,840
24,640
359,075
287,260
$1,843,251
DESCRIPTION
EQUIPMENT INDIRECTS TOTALCOST
COST($)
($)
($)
UNITS1,2,3
FIREWATER
8"Line
DUCTBANK
CIRC.WATER
42"Line
60"Line
TOTALUNITS1,2,3
23,938
1,196,916 Ͳ
UNIT4
FIREWATER
8"Line
2,118
105,924
Ͳ
31,777
25,422
163,123
5’x2’
500
25,000
Ͳ
7,500
6,000
38,500
2’x2’
2,260
113,000
Ͳ
33,900
27,120
174,020
MISC.UTILITYCORRIDOR
ASSUME2x6”LINES
4,008
200,402
Ͳ
60,121
48,096
308,619
ASSUME4x6”LINES
4,456
222,775
Ͳ
66,833
53,466
343,074
54"Line
105
5,250
Ͳ
1,575
1,260
8,085
90"Line
1,262
63,113
Ͳ
18,934
15,147
97,193
6"Line
9,112
455,609
Ͳ
136,683
109,346
701,638
8"Line
2,078
1835
103,887
91,733
Ͳ
Ͳ
31,166
27,520
24,933
22,016
159,986
141,269
PARKING
667
33,333
Ͳ
10,000
8,000
51,333
RAILROAD
5,261
263,025
Ͳ
78,908
63,126
405,059
DUCTBANK
CIRC.WATER
PONDTRANSFERPIPING
ROADS
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MESA5LINER
353
17,640
5,292
4,234
27,166
MESA7LINER
355
17,745
5,324
4,259
27,327
PIPETOMESAPONDͲ8"
MetalComp.PipeLine
8,861
443,048
Ͳ
132,914
106,331
682,293
TOTALUNIT4
43,230
2,161,484 Ͳ
648,445
518,756
$3,328,685
REIDGARDNERBACKFILLLABOR/MATERIALESTIMATESUMMARY
WORKͲ
HOURS
LABOR
COST($)
42"
567
28,329
5,345
8,499
6,799
48,972
60"
DUCTBANK
3,966
198,286
36,052
59,486
47,589
341,412
5'X2'
1,164
58,219
97,031
17,466
13,973
186,688
2'X2'
TOTALUNITS
1,2,3
1,403
70,173
116,955
21,052
16,842
225,021
7,100
355,006
255,383
106,502
85,202
$802,093
54"
192
9,602
1,778
2,881
2,305
16,566
90"
4,890
244,501
41,914
73,350
58,680
418,446
5'X2'
388
19,406
32,344
5,822
4,658
62,229
2'X2'
LANDFILLCAP
(2'FILL)
LANDFILLCAP
(6"TOPSOIL)
468
23,391
38,985
7,017
5,614
75,007
818,608
654,887
6,930,884
204,652
165,086
1,975,120
1,112,331
891,229
$9,478,252
DESCRIPTION
MATERIAL EQUIPMENT INDIRECTS TOTALCOST
COST($)
COST($)
($)
($)
UNITS1,2,3
CIRC.WATER
UNIT4
CIRC.WATER
DUCTBANK
TOTALUNIT4
54,574
13,643
74,155
2,728,694 2,728,694
695,817
909,565
3,721,412 3,753,281
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COSTIMPACTSTOMAINTAINUNIT4INSERVICEͲ
REIDGARDNERINSTALLATIONLABOR/MATERIALSUMMARY
DESCRIPTION
NaturalGasLine
RelocatedͲ6"
DuctBankto
Unit4CoalPile
SprayͲon
Palliative
CoatingonFill
NativeSeeding
FireWater
Relocation
Add2nd
Mob/Demob
TOTAL
WORKͲ
HOURS
LABOR
COST($)
MATERIAL EQUIPMENT INDIRECTS TOTALCOST
COST($)
COST($)
($)
($)
1,000
50,000
100,000
15,000
12,000
177,000
7,500
375,000
295,000
112,500
90,000
872,500
1,223
61,158
183,474
18,347
14,678
277,657
3,777
188,842
214,021
56,653
45,322
504,838
1,000
50,000
100,000
15,000
12,000
177,000
ͲͲͲ
ͲͲͲ
ͲͲͲ
ͲͲͲ
ͲͲͲ
150,000
14,500
725,000
892,495
217,500
174,000
$2,159,000
REIDGARDNERPONDBERMEXCAVATIONLABOR/MATERIALESTIMATESUMMARY
DESCRIPTION
UNITS1,2,3
LENGTH
WIDTHOR HEIGHTOR
DIAMETER
DEPTH
AREA(SF)
QUANTITY
UNITS
4A
5,969
10
16
208
45,983
C1+C2
6,202
10
10
130
29,861
YD3
YD3
75,845
YD3
TOTALUNITS1,2,3
UNIT4
B1+B2
3,425
18
18
378
47,945
YD3
B3
2,450
18
16
336
30,489
YD3
E1+E2
5,609
10
16
208
43,210
YD3
F+G
3,780
10
14
182
25,480
YD3
MESA5
3,126
28
23
713
82,550
YD3
MESA7
2,500
28
23
713
66,019
YD3
RW1,2,3ͲA,B,4
3,435
20
25
575
73,153
YD3
STORMWATER
1,283
10
5
65
3,089
YD3
TREATEDWATER
1,400
10
6
78
4,044
YD3
GLAUBERSALT(MESA5)
Ͳ
Ͳ
3
405,600
45,067
YD3
GLAUBERSALT(MESA7)
TOTALUNIT4
Ͳ
Ͳ
3
410,000
45,556
466,600
YD3
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REIDGARDNERUTILITYREMOVALLABOR/MATERIALESTIMATESUMMARY
DESCRIPTION
LENGTH
WIDTHOR HEIGHTOR
DIAMETER
DEPTH
AREA
(SF)
QUANTITY
UNITS
UNITS1,2,3
FIREWATER
8"
4,510
Ͳ
Ͳ
Ͳ
4,510
FT
5’x2’
375
5
3
Ͳ
375
YD3
2’x2’
1,695
2
2
Ͳ
1,695
YD3
DUCTBANK
MISC.UTILITYCORRIDOR
Ͳ
ASSUME2–6”LINES
3,605
Ͳ
Ͳ
Ͳ
3,605
FT
ASSUME4–6”LINES
3,536
Ͳ
Ͳ
Ͳ
3,536
FT
42"
1,000
Ͳ
Ͳ
Ͳ
1,000
FT
60"
3,305
Ͳ
Ͳ
Ͳ
3,305
FT
ROADS
3,440
20
Ͳ
Ͳ
7,644
YD2
PARKING
TOTALUNITS1,2,3
UNIT4
400
60
Ͳ
Ͳ
2,667
YD2
FIREWATER
8"
3,120
Ͳ
Ͳ
Ͳ
3,120
FT
DUCTBANK
5’x2’
125
5
3
Ͳ
125
YD3
2’x2’
565
2
2
Ͳ
565
YD3
MISC.UTILITYCORRIDOR
ASSUME2–6”LINES
3,880
Ͳ
Ͳ
Ͳ
3,880
FT
ASSUME4–6”LINES
3,325
Ͳ
Ͳ
Ͳ
3,325
FT
CIRCULATINGWATER
54"
90"
PONDTRANSFERPIPING
6"
8"
ROADS
175
1,485
13,420
3,060
6,880
Ͳ
Ͳ
Ͳ
Ͳ
20
Ͳ
Ͳ
Ͳ
Ͳ
Ͳ
Ͳ
Ͳ
Ͳ
Ͳ
Ͳ
175
1,485
13,420
3,060
15,289
FT
FT
FT
FT
YD2
PARKING
200
250
Ͳ
Ͳ
5,556
YD2
RAILROAD
11,690
Ͳ
Ͳ
Ͳ
11,690
FT
MESA5LINER
MESA7LINER
Ͳ
Ͳ
13,050
Ͳ
Ͳ
Ͳ
Ͳ
Ͳ
Ͳ
635,040
638,820
Ͳ
70,560
70,980
13,050
YD2
YD2
FT
CIRCULATINGWATER
8"MCPPIPETOMESAPONDS
Page 55 of 56
Page 273 of 393
GEN-3
Project No.:
30577
12-05-100-003
1
REID GARDNER DEMOLITION AND
Document No.:
POND DECOMMISSIONING UPDATE Revision No.:
REIDGARDNERBACKFILLLABOR/MATERIALESTIMATESUMMARY
DESCRIPTION
LENGTH
(Ft)
WIDTHOR
DIAMETER
(Ft)
HEIGHTOR
DEPTH(Ft)
AREA(Ft2)
QUANTITY
UNITS1,2,3
CIRC.WATER
UNITS
42"
1,000
4
Ͳ
10
356
YD3
60"
3,305
5
Ͳ
20
2,403
YD3
5'X2'
375
5
3
Ͳ
6,469
YD3
2'X2'
1,695
2
2
Ͳ
7,797
YD3
TOTALUNITS1,2,3
6,375
16
5
29
17,026
YD3
54"
175
5
Ͳ
16
119
YD3
90"
1,485
8
Ͳ
44
2,794
YD3
5'X2'
125
5
3
Ͳ
2,156
YD3
2'X2'
565
2
2
Ͳ
2,599
YD3
LANDFILLCAP(2')
Ͳ
Ͳ
2
2,135,500
181,913
LANDFILLCAP(6"
TOPSOIL)
Ͳ
Ͳ
1
2,135,500
45,478
YD3
235,059
YD3
DUCTBANK
UNIT4
CIRC.WATER
DUCTBANK
TOTALUNIT4
REIDGARDNERINSTALLATIONLABOR/MATERIALSUMMARY(MAINTAININGUNIT4OPERATION)
DESCRIPTION
LENGTH
(Ft)
NATURALGASͲ6"
500
DUCTBANK(TO
UNIT4COAL)
PALLIATIVE(SPRAYͲ
ON)
NATIVESEEDING
FIREWATER
WIDTHOR
HEIGHTOR
DIAMETER
DEPTH(Ft)
(Ft)
Ͳ
Ͳ
AREA(Ft2)
QUANTITY
UNITS
Ͳ
500
FT
250
2
2
Ͳ
1,000
YD3
Ͳ
Ͳ
Ͳ
3,669,480
407,720
YD2
Ͳ
Ͳ
Ͳ
11,330,520
1,258,947
YD2
500
Ͳ
Ͳ
Ͳ
500
FT
Page 56 of 56
Page 274 of 393
GEN-4
Page 275 of 393
Coal
Coal
Coal
Coal
Coal
North Valmy Unit 1
North Valmy Unit 2
Navajo Unit 1
Navajo Unit 2
Navajo Unit 3
SOX
lbs/mmbtu
NOX
lbs/mmbtu
CO
lbs/mmbtu
PM
lbs/mmbtu
VOC
lbs/mmbtu
Hg
lbs/mmbtu
Revised 2/6/14 by TDG
CO2
lbs/mmbtu
The basis of the emission rates shown is 2013 emission inventories, emissions compliance testing, AP-42 and/or
CEMs data & EDRs
1
Coal
Coal
Coal
Coal
FUEL
Reid Gardner Unit 1
Reid Gardner Unit 2
Reid Gardner Unit 3
Reid Gardner Unit 4
UNIT
2013 AVERAGE EMISSION RATES1
REDACTED PUBLIC VERSION
GEN-4
Page 276 of 393
REDACTED PUBLIC VERSION
GEN-4
2013 GAS PLANT EMISSION RATES 1
UNIT
Fort Churchill 1
Fort Churchill 1
Fort Churchill 1 after BART
Fort Churchill 2
Fort Churchill 2
Fort Churchill 2 after BART
Tracy 1
Tracy 1
Tracy 2
Tracy 2
Tracy 3
Tracy 3
Tracy 3 after BART
Tracy 4 (CM3)
Tracy 4 (CM3)
Tracy 5 (CM4)
Tracy 5 (CM4)
Tracy 6 (Pinon)
Tracy 8
Tracy 9
Clark 4
Clark 5
Clark 6
Clark 7
Clark 8
Clark Unit 11
Clark Unit 12
Clark Unit 13
Clark Unit 14
Clark Unit 15
Clark Unit 16
Clark Unit 17
Clark Unit 18
Clark Unit 19
Clark Unit 20
Clark Unit 21
Clark Unit 22
Higgins 1
Higgins 2
Harry Allen 3
Harry Allen 4
Harry Allen 5
Harry Allen 6
Chuck Lenzie 1
Chuck Lenzie 2
Chuck Lenzie 3
Chuck Lenzie 4
Silverhawk 1
Silverhawk 3
FUEL
SOX
lbs/mmbtu
Revised 2/12/14 by KLW
CO2
NOX
CO
PM
VOC
Hg
lbs/mmbtu lbs/mmbtu lbs/mmbtu lbs/mmbtu lbs/mmbtu lbs/mmbtu
Natural Gas
No. 2 and 6 Blended Oil
Natural Gas
Natural Gas
No. 2 and 6 Blended Oil
Natural Gas
Natural Gas
No. 6 Oil
Natural Gas
No. 6 Oil
Natural Gas
No. 6 Oil
Natural Gas
Natural Gas
No. 2 Oil
Natural Gas
No. 2 Oil
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
Natural Gas
1
The basis of the rates shown is 2013 emission inventories, CEMS data, most recent emissions compliance testing, default emission factors,
and, if no other source of data is available, back-calculations from permitted potential to emit or AP-42.
The Brunswick units have been removed from the table because, as of 5/3/13, they are no longer dispatchable and are only allowed to be
operated for the purpose of black starting a gas turbine (and for testing/maintenance limited to 100 hrs/yr)
The following units hve been retired and therefore removed from the table: Sunrise 1 and 2 and Gabbs.
Page 277 of 393
SP-1
Page 278 of 393
REDACTED PUBLIC VERSION
SP-1
ASSET PURCHASE AGREEMENT
by and between
NEVADA SUN-PEAK LIMITED PARTNERSHIP
as Seller,
and
NEVADA POWER COMPANY d/b/a NV ENERGY,
as Purchaser
April 30, 2014
Sun Peak Power Project
Las Vegas, Nevada
Page 279 of 393
REDACTED PUBLIC VERSION
ARTICLE I
SP-1
DEFINITIONS; USAGE ................................................................................. 1 Section 1.1
Definitions............................................................................................ 1 Section 1.2
Rules as to Usage ............................................................................... 12 Section 1.3
Schedules and Exhibits ...................................................................... 13 ARTICLE II
PURCHASE AND SALE; PURCHASE PRICE; CLOSING ....................... 13 Section 2.1
Purchase and Sale; Assigned Facilities Agreements; Excluded Assets ................................................................................................. 13 Section 2.2
Purchase Price.................................................................................... 15 Section 2.3
Allocation of Purchase Price.............................................................. 16 Section 2.4
The Closing ........................................................................................ 16 Section 2.5
Closing Deliveries.............................................................................. 17 Section 2.6
Further Assurances; Post-Closing Cooperation ................................. 19 ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER ........................ 20 Section 3.1
Existence ............................................................................................ 20 Section 3.2
Authority............................................................................................ 20 Section 3.3
Binding Agreement............................................................................ 20 Section 3.4
No Conflicts ....................................................................................... 21 Section 3.5
Approvals and Filings ........................................................................ 21 Section 3.6
No Seller Material Adverse Effect ..................................................... 21
Section 3.7
Legal Proceedings .............................................................................. 21 Section 3.8
Compliance with Laws ...................................................................... 22 Section 3.9
Title to Purchased Assets ................................................................... 22 Section 3.10
Real Property ..................................................................................... 22 Section 3.11
Sufficiency of Purchased Assets ........................................................ 22 Section 3.12
Warranty Matters ............................................................................... 23 Section 3.13
Contracts ............................................................................................ 23 Section 3.14
Permits ............................................................................................... 24 Section 3.15
Insurance ............................................................................................ 24 Section 3.16
Environmental Matters....................................................................... 25 Section 3.17
Labor Matters..................................................................................... 26 Section 3.18
Employee Matters .............................................................................. 27 Section 3.19
Brokers............................................................................................... 27 i
Page 280 of 393
REDACTED PUBLIC VERSION
SP-1
Section 3.20
Intellectual Property........................................................................... 28 Section 3.21
Regulatory Status ............................................................................... 28 Section 3.22
Disclosure .......................................................................................... 28 ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER ............... 28 Section 4.1
Existence ............................................................................................ 28 Section 4.2
Authority............................................................................................ 29 Section 4.3
Binding Agreement............................................................................ 29 Section 4.4
No Conflicts ....................................................................................... 29 Section 4.5
Approvals and Filings ........................................................................ 29 Section 4.6
Legal Proceedings .............................................................................. 30 Section 4.7
Brokers............................................................................................... 30 Section 4.8
Financial Resources ........................................................................... 30 Section 4.9
Due Diligence .................................................................................... 30 ARTICLE V
COVENANTS ............................................................................................... 30 Section 5.1
Efforts to Close and Fulfillment of Conditions.................................. 30 Section 5.2
Operation and Maintenance of Purchased Assets .............................. 32 Section 5.3
Purchaser’s Inspection Right; Due Diligence .................................... 33 Section 5.4
Cooperation with Facilities Takeover and Transition of Operations .......................................................................................... 34 Section 5.5
Employee and Benefit Matters........................................................... 34 Section 5.6
Casualty; Condemnation.................................................................... 34 Section 5.7
Interim Reports .................................................................................. 36 Section 5.8
Update of Seller’s Disclosure Schedule............................................. 36 Section 5.9
No Solicitation of Competing Transaction ........................................ 37 Section 5.10
Letter of Credit................................................................................... 37 Section 5.11
Termination of Certain Seller Services .............................................. 39 Section 5.12
Termination of Certain Project Contracts .......................................... 40 Section 5.13
Termination of Site Lease; Recordation of Termination ................... 40 Section 5.14
Mutual Releases; Effect of this Agreement on Rights under PPA and Site Lease............................................................................ 40 Section 5.15
Operating Permit Matters................................................................... 40 ARTICLE VI
CONDITIONS TO CLOSING ...................................................................... 40 ii
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REDACTED PUBLIC VERSION
SP-1
Section 6.1
Purchaser’s Conditions Precedent...................................................... 40 Section 6.2
Seller’s Conditions Precedent ............................................................ 41 ARTICLE VII
TERMINATION............................................................................................ 42 Section 7.1
Termination Prior to Closing ............................................................. 42 Section 7.2
Effect of Termination or Breach Prior to Closing ............................. 43 ARTICLE VIII
INDEMNIFICATION.................................................................................... 44 Section 8.1
Indemnification by Seller................................................................... 44 Section 8.2
Indemnification by Purchaser ............................................................ 44 Section 8.3
Method of Asserting Claims .............................................................. 45 Section 8.4
Limitations of Liability ...................................................................... 46 Section 8.5
Indemnification in Case of Strict Liability ........................................ 47 Section 8.6
Determination of Losses .................................................................... 47 ARTICLE IX
TAX MATTERS ............................................................................................ 48 Section 9.1
Representations and Warranties......................................................... 48 Section 9.2
Transfer Taxes ................................................................................... 49 Section 9.3
Property Taxes ................................................................................... 49 Section 9.4
Seller’s Tax Indemnification.............................................................. 49 Section 9.5
Purchaser Tax Indemnification .......................................................... 50 Section 9.6
Refunds .............................................................................................. 50 Section 9.7
Contests .............................................................................................. 50 Section 9.8
Assistance and Cooperation ............................................................... 51 Section 9.9
Information ........................................................................................ 51 Section 9.10
Tax Returns ........................................................................................ 51 Section 9.11
Survival of Obligations ...................................................................... 51 Section 9.12
Adjustments to Purchase Price........................................................... 51 ARTICLE X
SURVIVAL; NO OTHER REPRESENTATIONS ....................................... 51 Section 10.1
Survival of Representations, Warranties, Covenants and Agreements ........................................................................................ 51 Section 10.2
No Other Representations .................................................................. 52 ARTICLE XI
DISPUTE RESOLUTION ............................................................................. 53 Section 11.1
Dispute Resolution............................................................................. 53 Section 11.2
Jurisdiction; Venue ............................................................................ 53 iii
Page 282 of 393
REDACTED PUBLIC VERSION
Section 11.3
ARTICLE XII
SP-1
Waiver of Trial by Jury...................................................................... 53 LIMITED REMEDIES AND DAMAGES.................................................... 53 Section 12.1
Exclusive Remedies ........................................................................... 53 Section 12.2
Limitation of Liability........................................................................ 54 Section 12.3
Specific Performance ......................................................................... 54 ARTICLE XIII
MISCELLANEOUS ...................................................................................... 54 Section 13.1
Notices ............................................................................................... 54 Section 13.2
Payments ............................................................................................ 55 Section 13.3
Entire Agreement ............................................................................... 56 Section 13.4
Expenses ............................................................................................ 56 Section 13.5
Public Announcements ...................................................................... 56 Section 13.6
Confidentiality ................................................................................... 56 Section 13.7
Waivers .............................................................................................. 58 Section 13.8
Amendment ........................................................................................ 58 Section 13.9
No Construction Against Drafting Party............................................ 58 Section 13.10
No Third Party Beneficiary................................................................ 58 Section 13.11
Headings ............................................................................................ 58 Section 13.12
Invalid Provisions .............................................................................. 58 Section 13.13
Governing Law .................................................................................. 59 Section 13.14
No Assignment; Binding Effect......................................................... 59 Section 13.15
Counterparts....................................................................................... 59 Section 13.16
Time of Essence................................................................................. 59 EXHIBITS
Exhibit A – Form of Letter of Credit
Exhibit B – Form of Bill of Sale
Exhibit C – Form of Site Lease Termination
SCHEDULES
Schedule 1.1(a) – Assigned Facilities Agreements
Schedule 1.1(b) – Financing Liens
Schedule 1.1(c) – Permitted Liens
Schedule 1.1(d) – Transferred Intellectual Property
Schedule 1.1(e) – Transferred Permits
Schedule 2.1.3 – Excluded Assets
iv
Page 283 of 393
REDACTED PUBLIC VERSION
SP-1
Schedule 5.12 – Terminated Contracts
SELLER’S DISCLOSURE SCHEDULE
Section 1.1(a) – Persons for purposes of determining Seller’s Knowledge
Section 3.4 – Consents and Actions Required to Avoid Conflicts
Section 3.5 – Required Consents, Approvals, Filings and Notices
Section 3.7 – Legal Proceedings
Section 3.11(b) – Fixtures and Equipment
Section 3.12 – Warranties
Section 3.14(a) – Transferred Permits (other than Environmental Permits)
Section 3.14(b) – Instances of Non-compliance with Transferred Permits
Section 3.15 – Insurance
Section 3.16 – Environmental Representations and Warranties
Section 3.16(d) – Environmental Permits
Section 3.17(a) – Project Employees
Section 3.20– Intellectual Property
Section 9.1 – Exceptions to Tax Representations and Warranties
PURCHASER’S DISCLOSURE SCHEDULE
Section 1.1(a) – Purchaser’s Knowledge
Section 4.5 – Governmental Approvals and Filings
Section 4.6 – Legal Proceedings
Section 4.9 – Due Diligence
v
Page 284 of 393
REDACTED PUBLIC VERSION
SP-1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the “Agreement”) is made and entered
into effective as of April 30, 2014 (the “Effective Date”), by and among NEVADA SUN-PEAK
LIMITED PARTNERSHIP, a Nevada limited partnership (“Seller”), and NEVADA POWER
COMPANY d/b/a NV ENERGY, a Nevada corporation (“Purchaser”). Seller and Purchaser are
also each referred to herein as a “Party” and collectively as the “Parties.”
RECITALS
A.
Seller holds tangible and intangible assets, personal properties and real property
rights, contracts, permits and other rights associated with a dual-fuel simple cycle peaking
electric plant located in Las Vegas, Nevada and known as Nevada Sun Peak Power Project which
is nominally rated at approximately 222 MW the “Sun-Peak Plant.”
B.
Seller wishes to sell and assign to Purchaser, and Purchaser wishes to purchase
and assume from Seller, substantially all of the assets that are used in connection with, and
certain specified liabilities associated with, the Sun-Peak Plant, subject to the terms and
conditions set forth herein.
C.
As an inducement to Purchaser entering into this Agreement, Seller has agreed to
provide the Letter of Credit (as defined herein) guaranteeing certain of Seller’s performance
obligations under this Agreement, subject to the terms and conditions set forth herein.
AGREEMENTS
Now, therefore, in consideration of the premises and the mutual representations,
warranties, covenants and agreements set forth in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows.
ARTICLE I
DEFINITIONS; USAGE
Section 1.1 Definitions. Unless the context shall otherwise require, capitalized terms
used in this Agreement shall have the meanings assigned to them in this Section 1.1.
“2014 Budget” has the meaning set forth in Section 5.2(a) of this Agreement.
“Acceptable LC Bank” means any financial institution whose unsecured and
unguaranteed rating is at least A2 from Moody’s Investors Service, Inc. or A from Standard &
Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.
1
Page 285 of 393
REDACTED PUBLIC VERSION
SP-1
“Action” means any suit, claim, proceeding, arbitration, audit or investigation by or
before any Governmental Authority or arbitral tribunal.
“Affiliate” of any Person means any other Person directly or indirectly Controlling,
directly or indirectly Controlled by or under direct or indirect common Control with such Person;
provided, however, with respect to Purchaser, the term “Affiliate” does not include Berkshire
Hathaway Inc. or any of its affiliates (other than Purchaser and any direct or indirect subsidiaries
of Purchaser), and no provision of this Agreement shall apply to, be binding on, create any
liability of or otherwise restrict the activities of Berkshire Hathaway Inc. or any of its affiliates
(other than Purchaser and any direct or indirect subsidiaries of Purchaser).
“Agreement” has the meaning given to it in the Preamble of this Agreement.
“Ancillary Agreements” means those other documents, instruments, certificates or
agreements as may be executed and delivered in connection with this Agreement and the
transactions contemplated hereby and thereby.
“Assigned Facilities Agreements” means the Contracts, if any, which are listed on
Schedule 1.1(a) of this Agreement.
“Assignment and Assumption Agreement” has the meaning given to it in Section 2.5.1(b)
of this Agreement.
“Assumed Liabilities” has the meaning given to it in Section 2.1.4(b) of this Agreement.
“Benefit Plan” has the meaning given to it in Section 3.18(a) of this Agreement.
“Bill of Sale” has the meaning given to it in Section 2.5.1(a) of this Agreement.
“Books and Records” means books, records, files, documents, instruments, papers,
correspondence that can be reasonably and practically provided, deeds, licenses, Permits,
supplier, contractor and subcontractor lists, supplier design interface information, computer files
and programs (other than Seller’s enterprise-wide computer programs), retrieval programs,
environmental studies, environmental reports, construction reports, operating plans, operating
logs, operations and maintenance records, purchase orders, safety and maintenance manuals,
incident reports, standard OSHA logs, engineering design plans, blue prints and as-built plans,
records drawings, drawings, specifications, test reports, quality documentation and reports, and
hazardous waste disposal records, in each case, if they are reasonably and practically available,
including in electronic format, where applicable; and in each case, in the possession of Seller or
its Affiliates and to the extent the same relates to the Purchased Assets and the transactions
contemplated hereby; provided, however, that any such data contained in computer systems shall
be provided in electronic format as either fixed form or character delimited data and shall include
record descriptions, to the extent the computer systems of Purchaser and Seller is compatible in
allowing such data provision; in each case excluding (a) documents subject to attorney-client
privilege, (b) information from third parties subject to confidentiality restrictions binding on
Seller or its Affiliates; provided that Seller has used commercially reasonable efforts to procure
waivers of such confidentiality provisions, (c) documents relating to the sale process of the
2
Page 286 of 393
REDACTED PUBLIC VERSION
SP-1
Project, (d) price curves, power curves or other proprietary information of Seller or its Affiliates,
(e) personnel records, and (f) financial records and financial statements of the Seller; provided,
further, that in no event shall Books and Records include the minute books or other corporate
records of Seller or any of its Affiliates.
“Business Day” means any day except Saturday, Sunday or a weekday that banks in Las
Vegas, Nevada or New York, New York are closed.
“Claim Threshold” has the meaning given to it in Section 8.4.1 of this Agreement.
“Closing” has the meaning given to it in Section 2.4 of this Agreement.
“Closing Date” has the meaning given to it in Section 2.4 of this Agreement.
“Code” means the Internal Revenue Code of 1986, as amended.
“Confidentiality Agreement” means the Confidentiality Agreement, dated as of March
17, 2014, by and between Purchaser and ArcLight Capital Partners, LLC.
“Contract” means agreement, lease, license (other than a Permit), note, bond, evidence of
Indebtedness, mortgage, indenture, security agreement, purchase order, binding bid, letter of
credit or other instrument or contract, whether written or oral.
“Control” of any Person means the possession, directly or indirectly, of the power either
to (a) vote fifty percent (50%) or more of the securities or interests having ordinary voting power
for the election of directors (or other comparable controlling body) of such Person or (b) direct or
cause the direction of management or policies of such Person, whether through the ownership of
voting securities or interests, by contract or otherwise, excluding in each case, any secured lender
of such Person.
“Default Rate” means the lesser of (i) the prime rate under “Money Rates” as reported in
the Wall Street Journal on the first Business Day of the month during which interest is payable
plus two percent (2%) and (ii) the maximum rate of interest permitted to be charged by
applicable Law.
“Deferred Claim Amount” has the meaning given to it in Section 5.10.2(a) of this
Agreement.
“Draw Approval” has the meaning given to it in Section 5.10.2(a) of this Agreement.
“Due Diligence Cut-Off Date” means April 30, 2014.
“Effective Date” has the meaning given to it in the Preamble of this Agreement.
“Employing Entity” means Consolidated Asset Management Services (Nevada), LLC.
3
Page 287 of 393
REDACTED PUBLIC VERSION
SP-1
“Environmental Condition” means the presence or Release to the environment of
Hazardous Materials, including any migration of Hazardous Materials through air, soil or water.
“Environmental Law” means any applicable statute, law, rule, regulation, ordinance,
order or other legally enforceable directive of any Governmental Authority that is in effect as of
the Closing Date and relates to pollution, safety or protection of human health or the
environment, including, without limitation, (a) the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601 et seq. (“CERCLA”), (b) the Resource
Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., (c) the Federal Water Pollution
Control Act, 33 U.S.C. § 1251 et seq., (d) the Clean Air Act, 42 U.S.C. § 7401 et seq., (e) the
Hazardous Materials Transportation Authorization Act of 1994, 49 U.S.C. § 5101 et seq., (f) the
Occupational Safety and Health Act, 29 U.S.C. § 651 et seq., (g) the Toxic Substances Control
Act, 15 U.S.C. §§ 2601 through 2629, (h) the Oil Pollution Act, 33 U.S.C. § 2701 et seq., (i) the
Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11001 et seq., (j) the Safe
Drinking Water Act, 42 U.S.C. §§ 300f through 300j, (k) the Federal Insecticide, Fungicide, &
Rodenticide Act, 7 U.S.C. §§ 136 et seq., (l) the Endangered Species Act, 16 U.S.C. §§ 1531 et
seq, and (m) state equivalents to items (a) through (l), each as amended and in effect on the
Closing Date.
“Environmental Permits” means any Permits required by Environmental Law.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” means any entity that, together with Seller, would be deemed a single
employer within the meaning of Code Section 414 or ERISA Section 4001(b).
“Excluded Assets” has the meaning given to it in Section 2.1.3 of this Agreement.
“Excluded Liabilities” has the meaning given to it in Section 2.1.4(a) of this Agreement.
“Facilities” means the Sun-Peak Plant, consisting of an operating dual fuel simple cycle
combustion turbine peaking unit with a nominal nameplate output of approximately 222 MW
located on the Premises, together with all their respective Improvements, electrical transformers,
pipeline and electrical interconnections, metering facilities and all ancillary and associated
facilities and equipment that are located on the Premises.
“Federal Power Act” means the Federal Power Act of 1935, as amended.
“FERC” means the Federal Energy Regulatory Commission or any successor agency.
“FERC Approval” means a final order issued by FERC under Section 203 of the Federal
Power Act approving the transactions contemplated hereby that does not contain any conditions,
modifications or terms that adversely and materially affect Purchaser’s decision to acquire the
Facilities, determined in its sole discretion.
“Financing Liens” means the Liens set forth on Schedule 1.1(b).
4
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REDACTED PUBLIC VERSION
SP-1
“Fixtures and Equipment” means the fixtures, equipment (including major equipment
such as the combustion turbines, air-cooled condenser, transformers and other auxiliaries;
various balance of plant equipment; and storage tanks); furniture, office equipment,
communications equipment, furnishings, computer hardware, air conditioning ventilation and
heating equipment and control stations, tools (including special tools), and other tangible
personal property used, or to be used, by Seller for or in connection with the operation or
maintenance of the Facilities, whether or not located on the Premises.
“GAAP” means generally accepted accounting principles in the United States of America
applied on a consistent basis.
“Good Operating Practices” means, with respect to the Facilities, the practices, methods
and acts generally engaged in or approved by a significant portion of the independent electric
power industry in the United States for similarly situated facilities in the United States during a
particular period, or any of such practices, methods and acts, which, in the exercise of reasonable
judgment in light of the facts known at the time a decision is made, would be expected to
accomplish the desired result in a manner consistent with applicable Law, reliability, safety,
environmental protection, economy and expedition, any Assigned Facilities Agreements and the
other Contracts affecting the operation of the Facilities, and which practices, methods and acts
are consistent in all material respects with any applicable operation and maintenance standards
recommended by the Facilities’ equipment suppliers and manufacturers, and operational limits.
Without limiting the foregoing, Good Operating Practices are not intended to be limited to the
optimum practices, methods or acts, to the exclusion of all others, but rather to include a
spectrum of possible practices, methods or acts generally acceptable in the region during the
relevant period in light of the circumstances.
“Governmental Authority” means any federal, state or local governmental entity,
authority or agency, court, tribunal, regulatory commission or other body, whether legislative,
judicial or executive (or a combination or permutation thereof).
“Hazardous Materials” means (a) any substance, emission or material defined as or listed
in any Environmental Law as a “regulated substance,” “hazardous substance,” “toxic substance,”
“pesticide,” “hazardous waste,” “hazardous material,” “waste,” “pollutant,” “contaminant” or
words of similar import in any Environmental Law; or (b) any products or substances containing
petroleum, friable asbestos, polychlorinated biphenyls or radioactive materials.
“Improvements” means all buildings, structures, fixtures and improvements located on
the Premises, including those under construction as of the Closing Date.
“Indebtedness” means any of the following: (a) any indebtedness for borrowed money,
whether secured or unsecured; (b) any obligations evidenced by bonds, debentures, notes or
other similar instruments; (c) any obligations to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of business, consistent with
past practice; (d) any obligations as lessee under capitalized leases; (e) any obligations,
contingent or otherwise, under acceptances, letters of credit or similar facilities; (f) any
obligations created or arising under conditional sale or title retention agreements; (g) any net
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obligations payable under any rate, currency, commodity or other swap, option or derivative
agreement, (h) any obligations secured by (or for which the holder of such obligation has an
existing right, contingent or otherwise, to be secured by) any Lien on property (other than
Permitted Liens); and (i) any guaranty of any of the foregoing.
“Indemnified Party” has the meaning given to it in Section 8.3.1 of this Agreement.
“Indemnifying Party” has the meaning given to it in Section 8.3.1 of this Agreement.
“Independent Accountant” has the meaning given to it in Section 2.3.2 of this Agreement.
“Initial LC Stated Amount” has the meaning given to it in Section 5.10.1(b).
“Initial LC Stated Expiry Date” means
.
“Intellectual Property” means (a) patents and industrial designs (including any
continuations, divisionals, continuations-in-part, renewals, reissues and applications for any of
the foregoing), (b) copyrights (including any registrations and applications for any of the
foregoing), (c) trademarks, service marks, trade names, logos, slogans, trade dress and
applications for registration of the foregoing, and (d) trade secrets and confidential information,
including confidential know-how, processes, formulae, algorithms, models or methodologies.
“Law” means any applicable statute, law, treaty, rule, code, common law, ordinance,
regulation, certificate or order of any Governmental Authority, or any judgment, decision,
decree, injunction, writ, order or like action of any court, arbitrator or other Governmental
Authority, including each Environmental Law.
“LC Reduction Date” means the date that is
after the Closing Date.
“Letter of Credit” means one or more irrevocable standby letters of credit in the
aggregate amount provided for in Section 5.10.1, as such amount may be reduced in accordance
with Section 5.10.1, and in substantially the form attached hereto as Exhibit A, provided by an
Acceptable LC Bank.
“Liability” means any Indebtedness and other obligations of a Person (whether absolute,
accrued, contingent, fixed or otherwise, or whether due or to become due).
“Lien” shall mean any mortgage, pledge, deed of trust, hypothecation, assignment,
deposit arrangement, charge, security interest, encumbrance, lien (statutory or other) or
preference, priority or other security agreement of any kind or nature whatsoever, any
conditional sale or other title retention agreement, any financing lease having substantially the
same effect as any of the foregoing or the filing of any financing statement or similar instrument
under the Uniform Commercial Code as in effect in any relevant jurisdiction or comparable Law
of any jurisdiction, domestic or foreign.
“Loss” means any judgment, amount paid in settlement, damage, fine, penalty,
deficiency, replacement power cost, Liability, loss or expense (including interest, court costs,
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reasonable fees and expenses of attorneys, accountants and other experts or other reasonable
expenses of litigation or other proceedings or of any claim, default or assessment).
“NAC” means the Nevada Administrative Code, as amended through the date hereof.
“NRS” means the Nevada Revised Statutes, as amended through the date hereof.
“Outside Date” has the meaning given to it in Section 7.1(g) of this Agreement.
“Overlap Period” means any taxable period beginning on or before and ending after the
Closing Date.
“Overlap Period Taxes” means any Taxes (other than Seller Income Taxes) imposed on
or with respect to the Purchased Assets or Seller for an Overlap Period.
“Party” or “Parties” has the meaning given to it in the Preamble of this Agreement.
“Pending Claim” means a claim for Losses for which Seller has indemnification
obligations pursuant to ARTICLE VIII or ARTICLE IX, which claim is pending on the
applicable date and of which written notice has been given to the Seller by Purchaser in
accordance with this Agreement not later than the LC Reduction Date.
“Pending Claim Determination Date” has the meaning given to it in Section 5.10.2(b).
“Permits” means registrations, permits, licenses, authorizations, consents, approvals,
grants, franchises, variances, certificates of authority, letter rulings, orders, decrees, judgments,
writs, injunctions or similar rights and privileges granted by or obtained from any Governmental
Authority, as well as applications for any of the foregoing.
“Permitted Liens” means (a) those Liens set forth on Schedule 1.1(c), (b) zoning,
entitlement, conservation restriction and other land use and environmental regulations by any
Governmental Authority, (c) Liens for Taxes not yet delinquent, (d) mechanics’, carriers’,
workers’, repairers’ and other similar Liens arising or incurred in the ordinary course of business
which are not yet due and payable, (e) Liens expressly granted under, or created by, existing or
pursuant to, the terms and conditions of any Assigned Facilities Agreements, (f) prior to Closing,
the Financing Liens, (g) Liens created pursuant to, or as a result of the existence of, this
Agreement or any Ancillary Agreement, (h) any Liens approved or consented to in writing by
Purchaser, (i) such other easements, restrictions and encumbrances which do not materially
detract from the value of, or materially interfere with the present use of, or the reasonably
anticipated use of, the Purchased Assets in the aggregate; and (j) Liens relating to any Excluded
Liability.
“Person” means any individual, corporation, partnership, joint venture, association, joint
stock company, trust, limited liability company, unincorporated organization, Governmental
Authority or any other form of entity.
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“PPA” means the Amended and Restated Power Purchase Contract, dated October 29,
1998, between Seller and Purchaser.
“PPA Side Agreement” means the Final Payment Agreement, dated as of the Closing
Date, between Purchaser and Seller in form and substance satisfactory to Purchaser and Seller.
“Pre-Closing Books and Records” has the meaning given to it in Section 2.6.2(a) of this
Agreement.
“Pre-Closing Taxes” has the meaning given to it in Section 9.4 of this Agreement.
“Pre-Closing Tax Period” shall mean any taxable period ending on or before the Closing
Date, or with respect to any taxable period that begins on or before the Closing Date and ends
after the Closing Date, the portion of such taxable period ending on the Closing Date.
“Premises” means the real property of which the Project is a part or on which the Project
is located, together with all rights, privileges, easements and rights-of-way appurtenant to such
real property and Improvements on such real property, which is leased to Seller under the Site
Lease.
“Project” means the Facilities and all Fixtures and Equipment, Stores and Inventory,
Books and Records, any Assigned Facilities Agreements, Transferred Permits, Transferred
Intellectual Property and, to the extent transferable without consent or requisite consent has been
obtained, all third-party warranties and related assignments and, to the extent operated, owned or
leased by Seller, any other assets used in connection with the operation and maintenance of the
Facilities.
“Project Employees” has the meaning given to it in Section 3.17(a) of this Agreement.
“Property Taxes” has the meaning given to it in Section 9.3 of this Agreement.
“PUCN” means the Public Utilities Commission of Nevada.
“PUCN Approval” means a final order issued by the PUCN pursuant to NRS Section
704.751 accepting an amendment to Purchaser’s plan to increase its supply of electricity or
decrease the demands made on its system by its customers, which order (a) approves Purchaser’s
acquisition of the Purchased Assets, (b) does not contain conditions, modifications or terms that
adversely and materially affect Purchaser’s decision to acquire the Facilities or Purchaser’s
preferred supply side plan, determined in its sole discretion, and (c) is not the subject of (i) a
petition for reconsideration or rehearing filed pursuant to NAC Section 703.801, (ii) a petition
for judicial review filed pursuant to NRS Section 704.373, or (iii) a petition for a preliminary
injunction filed pursuant to NRS Section 703.374.
“Purchase Price” has the meaning given to it in Section 2.2.1 of this Agreement.
“Purchase Price Allocation Schedule” has the meaning given to it in Section 2.3 of this
Agreement.
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“Purchased Assets” means all of the assets, properties, rights and interest of every kind,
nature, character and description (whether tangible or intangible, and wherever situated),
operated, owned or leased by Seller, in each case, that are used in connection with the operation
and maintenance of the Facilities, including the Project, but excluding the Excluded Assets.
“Purchaser” has the meaning given to it in the Preamble of this Agreement.
“Purchaser Consent Representative” means the Person appointed by Purchaser and
notified to Seller with appropriate contact information for the purpose of giving consents and
receiving notices required pursuant to Section 5.2(c) of this Agreement.
“Purchaser Exceptions” has the meaning given to it in Section 8.4.1 of this Agreement.
“Purchaser Indemnified Party” has the meaning given to it in Section 8.1 of this
Agreement.
“Purchaser Material Adverse Effect” means a material adverse effect on (a) the ability of
Purchaser to perform its obligations under this Agreement or (b) the validity or enforceability of
the rights and remedies of Seller under this Agreement or under any of the Ancillary
Agreements.
“Purchaser’s Disclosure Schedule” means the schedule delivered to Seller by Purchaser
herewith and dated as of the Effective Date, containing all lists, descriptions, exceptions and
other information and materials as are required to be included therein by Purchaser pursuant to
this Agreement.
“Purchaser’s Knowledge” means the actual knowledge, after due inquiry, of the Persons
listed on Section 1.1(a) of Purchaser’s Disclosure Schedule; provided, however, that each such
Person shall be deemed to have knowledge of a matter of which such Person has received written
notice.
“Reduced LC Stated Amount” has the meaning given to it in Section 5.10.1(c).
“Related Person” means with respect to Seller and Purchaser, their respective Affiliates,
and the employees, officers and directors of Seller, Purchaser and their respective Affiliates.
“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, seeping, or disposing to the environment
(including the abandonment or discarding of barrels, containers, and receptacles containing
Hazardous Materials).
“Remediation” means actions required under Environmental Laws or by a Governmental
Authority, or a claim by a third party against a Purchaser Indemnified Party where remediation in
connection with such claim would be in accordance with Good Operating Practices, in each case
to address an Environmental Condition, including any monitoring, investigation, assessment,
characterization, treatment, cleanup, containment, removal, mitigation, response or restoration
work.
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“Restoration Cost” means, with respect to any Purchased Asset, the cost of restoring a
damaged, lost or destroyed Purchased Asset to a condition reasonably comparable to its preCasualty Loss condition.
“Restoration Outside Date” has the meaning given to it in Section 5.6.1(b) of this
Agreement.
“Retained Information” has the meaning given to it in Section 2.6.2(b) of this Agreement.
“Returnable L/C” has the meaning given to it in Section 5.10 of this Agreement.
“Sales Taxes” means all sales, use or other similar Taxes assessed, levied or imposed by
any Nevada Taxing Authority.
“Seller” has the meaning given to it in the Preamble to this Agreement.
“Seller Exceptions” has the meaning given to it in Section 8.4.1 of this Agreement.
“Seller Income Taxes” means any franchise or similar Taxes imposed on, or Taxes
imposed on, or measured by reference to, the net income of Seller or Affiliates of Seller.
“Seller Indemnified Party” has the meaning given to it in Section 8.2 of this Agreement.
“Seller Material Adverse Effect” means a material adverse effect on (a) the Facilities or
the Purchased Assets or the operation or condition thereof, taken as a whole, or (b) the ability of
Seller to perform its obligations under this Agreement or any of the Ancillary Agreements to
which Seller is a party, provided, however, that the term Seller Material Adverse Effect shall not
include (i) any change resulting from changes in general international, national, regional or local
economic, financial or market conditions, (ii) changes in general regulatory or political
conditions, including any acts of war or terrorist activities not directed at the Project, (iii) strikes,
work stoppages or other labor disturbances other than those involving only the Project
workforce, (iv) increases in costs of commodities or supplies, including fuel, (v) weather or
meteorological events (other than short-term events such as tornados and storms), (vi) any
change of Law that does not disproportionately affect the Project relative to similarly-situated
projects, or (vii) any effect having a disproportionate impact on the Facilities compared to other
generating facilities in Purchaser’s control area, to the extent resulting from the voluntary action
of Purchaser relating to the transmission of power from the Facilities.
“Seller’s Disclosure Schedule” means the schedule prepared by Seller and delivered to
Purchaser in conjunction with the execution of this Agreement.
“Seller’s Knowledge” means the actual knowledge, after due inquiry, of the Persons
listed on Section 1.1(a) of Seller’s Disclosure Schedule; provided, however, each such Person
shall be deemed to have knowledge of a matter of which such Person received written notice.
“Site Lease” means the Site Lease Agreement entered into by Purchaser and Seller dated
October 29, 1998, and amended April 12, 2007.
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“Site Lease Termination” means the Agreement of Lease Termination, dated as of the
Closing Date, between Seller and Purchaser, in the form attached hereto as Exhibit C.
“Stores and Inventory” means supplies (excluding fuel), inventories, materials,
lubricants, chemicals, filters, fittings, connectors, seals, gaskets, and repair and replacement
parts, which are located at the Facilities or in transit to the Facilities, and used in connection with
the operation and maintenance of the Facilities.
“Sun-Peak Plant” has the meaning given to it in the Recitals.
“Target Approval Date” means October 28, 2014.
“Tax” or “Taxes” means any and all taxes, including any interest, penalties or other
additions to tax that may become payable in respect thereof, imposed by any foreign, federal,
state or local government or any agency or political subdivision of any such government, which
taxes shall include all income taxes, profits taxes, taxes on gains, alternative minimum taxes,
estimated taxes, payroll and employee withholding taxes, unemployment insurance taxes, social
security taxes, welfare taxes, disability taxes, severance taxes, taxes on stock, sales and use taxes,
ad valorem taxes, value added taxes, excise taxes, franchise taxes, gross receipts taxes, business
license taxes, occupation taxes, real or personal property taxes, stamp taxes, environmental taxes,
transfer taxes, workers’ compensation taxes and other taxes, fees, duties, levies, customs, tariffs,
imposts, assessments, obligations and charges of the same or of a similar nature to any of the
foregoing.
“Tax Claim” has the meaning given to it in Section 9.7 of this Agreement.
“Tax Returns” means any return, report, rendition, information return, claim for refund or
other document (including any related or supporting information) supplied to or required to be
supplied to any Taxing Authority with respect to Taxes, including any attachments, amendments
and supplements thereto.
“Taxing Authority” means, with respect to any Tax, the governmental entity or political
subdivision thereof that imposes such Tax and the agency (if any) charged with the collection of
such Tax for such entity or subdivision.
“Terminated Contract” has the meaning given to it in Section 5.12 of this Agreement.
“Transfer Taxes” means all transfer, sales, use, goods and services, value added,
documentary, recording, stamp duty, gross receipts, excise, and conveyance Taxes and other
similar Taxes, duties, fees or charges.
“Transferred Intellectual Property” means the Intellectual Property and licenses to use
such owned by Seller and used exclusively in the Project to the extent identified on
Schedule 1.1(d).
“Transferred Permits” means those Permits set forth on Schedule 1.1(e), and any Permits
obtained by Seller after the Effective Date that are transferable to Purchaser and designated as
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Transferred Permits by Purchaser, interests in which are to be conveyed by Seller to Purchaser as
part of the Purchased Assets.
“Unresolved Sales Tax Claim” has the meaning given to it in Section 5.10.3(b).
Section 1.2 Rules as to Usage. Except as otherwise expressly provided herein, the
following rules shall apply to the usage of terms in this Agreement:
(a)
The terms defined above have the meanings set forth above for all purposes, and
such meanings are equally applicable to both the singular and plural forms of the terms defined.
If a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning
when used as another part of speech (such as a verb).
(b)
“Include,” “includes” and “including” shall be deemed to be followed by “without
limitation” whether or not they are in fact followed by such words or words of like import.
(c)
“Writing,” “written” and comparable terms refer to printing, typing, and other
means of reproducing in a visible form.
(d)
Any Law defined or referred to herein means such Law as from time to time
amended, modified or supplemented, including by succession of comparable successor Law and
any rules and regulations promulgated thereunder.
(e)
References to a Person are also to its permitted successors and assigns.
(f)
“Hereof,” “herein,” “hereunder” and comparable terms refer, unless otherwise
expressly indicated, to the entire agreement or instrument in which such terms are used and not
to any particular article, section or other subdivision thereof or exhibit or schedule or other
attachment thereto. References in an instrument to “Article,” “Section” or another subdivision or
to an exhibit, schedule or other attachment are, unless the context otherwise requires, to an
article, section, subsection or subdivision of or an exhibit or schedule or other attachment to such
agreement or instrument.
(g)
Pronouns, whenever used in any agreement or instrument that is governed by this
Agreement and of whatever gender, shall include all Persons. References to any gender include,
unless the context otherwise requires, references to all genders.
(h)
The word “or” will be deemed to be disjunctive but not necessarily exclusive (i.e.,
unless the context dictates otherwise, “or” will be interpreted to mean “and/or” rather than
“either/or”). “Shall” and “will” have equal force and effect.
(i)
Whenever the consent or approval of any Party is required pursuant to this
Agreement, unless expressly stated that such consent or approval is to be given in the sole
discretion of such Party, such consent or approval shall not be unreasonably withheld or delayed.
(j)
Whenever this Agreement refers to a number of days, such number shall refer to
calendar days unless Business Days are specified. Whenever any action must be taken hereunder
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on or by a day that is not a Business Day, then such action may be validly taken on or by the next
day that is a Business Day.
(k)
All accounting terms used herein and not expressly defined herein shall have the
meanings given to them under GAAP.
Section 1.3
Schedules and Exhibits. This Agreement consists of the Articles
contained herein and the Schedules and Exhibits attached hereto, all of which comprise part of
one and the same agreement with equal force and effect.
ARTICLE II
PURCHASE AND SALE; PURCHASE PRICE; CLOSING Section 2.1
Purchase and Sale; Assigned Facilities Agreements; Excluded Assets.
Section 2.1.1 Purchase and Sale. On the terms and subject to the conditions set
forth in this Agreement, at the Closing, Seller shall sell, transfer, convey, assign and deliver to
Purchaser, free and clear of all Liens (other than Permitted Liens), and Purchaser will purchase
and pay for, all of Seller’s right, title and interest in and to the Purchased Assets, but not the
Excluded Assets.
Section 2.1.2 Assignment and Assumption of Assigned Facilities Agreements.
On the terms and subject to the conditions set forth in this Agreement, effective as of the
Closing, Seller shall assign to Purchaser and Purchaser shall assume (a) all of Seller’s rights
under the Assigned Facilities Agreements, if any, solely to the extent arising after the Closing
and (b) all of Seller’s obligations arising under such Assigned Facilities Agreements, if any,
solely to the extent such obligations arise after the Closing and do not constitute Liabilities
arising out of any failure to perform, improper performance, warranty or other breach, default or
violation by Seller or any of its Affiliates prior to the Closing. For the avoidance of doubt, with
respect to indemnity obligations under any Assigned Facilities Agreements, Purchaser shall
assume liability only for events that occur after the Closing and Seller shall remain liable only
for events that occur prior to the Closing.
Section 2.1.3 Retention of Certain Assets. Seller shall have no obligation to, and
does not, transfer any interest or rights in those agreements, assets and properties described in
Schedule 2.1.3 attached hereto (the “Excluded Assets”), and Purchaser shall have no Liability
with respect thereto. The Parties acknowledge and agree that Seller shall have the right on or
prior to the Closing Date to retain or to transfer and assign to one or more of Seller’s Affiliates
its interests in the Excluded Assets.
Section 2.1.4 Excluded Liabilities; Assumed Liabilities.
(a)
Excluded Liabilities. Purchaser shall not assume and shall not be
responsible to pay, perform, satisfy or discharge any Liabilities of Seller or any of its Affiliates
of any kind or nature whatsoever, whether direct or indirect, known or unknown, absolute or
contingent, other than the Assumed Liabilities (collectively, the “Excluded Liabilities”). On and
after the Closing, Seller shall, and shall cause each of its Affiliates to, retain, pay, perform,
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satisfy and discharge all Excluded Liabilities for which they are respectively obligated,
including, without limitation, the following:
(i)
all Liabilities to the extent arising from any violation of applicable
Environmental Law by Seller or its Affiliates or any other Person acting on behalf of Seller or its
Affiliates (excluding, for the avoidance of doubt, Purchaser and any of its Affiliates and any
other Person acting on behalf of Purchaser or any of its Affiliates), in each case, in connection
with the construction, operation or maintenance of the Facilities or the Premises by Seller or its
Affiliates or any other Person acting on behalf of Seller or its Affiliates (excluding, for the
avoidance of doubt, Purchaser and any of its Affiliates and any other Person acting on behalf of
Purchaser or any of its Affiliates) from the date of the Site Lease through the Closing;
(ii)
all Liabilities arising from any Environmental Condition caused by
Seller or its Affiliates or any other Person acting on behalf of Seller or its Affiliates (excluding,
for the avoidance of doubt, Purchaser and any of its Affiliates and any other Person acting on
behalf of Purchaser or any of its Affiliates) on, under, or near the Premises from the date of the
Site Lease through the Closing, including any such Liabilities related to Remediation, natural
resource damages, bodily injury or property damage;
(iii) all Liabilities arising from the off-site transportation, disposal,
recycling or storage, or arrangement for same, of Hazardous Materials, from the Facilities by
Seller or its Affiliates or any Person acting on behalf of Seller or its Affiliates (excluding for the
avoidance of doubt, Purchaser and its Affiliates and any other Person acting on behalf of
Purchaser or any of its Affiliates) from the date of the Site Lease through the Closing, including
any such Liabilities related to Remediation, natural resource damages, bodily injury or property
damage;
(iv)
all Liabilities that have arisen or may arise with respect to (A) any
Benefit Plan or any other benefit plan or employment agreement or other arrangement providing
any type of compensation or benefits to any former or current employee of the Employing Entity,
Seller, or any of their respective Affiliates or ERISA Affiliates and (B) any Project Employee
and any other current or former employee of the Employing Entity, Seller, or any of their
respective Affiliates or ERISA Affiliates;
(v)
all Liabilities of Seller and its Affiliates under the Assigned
Facilities Agreements, if any, not expressly assumed by Purchaser pursuant to Section 2.1.2 and
all Liabilities under Contracts relating to the Project which are not Assigned Facilities
Agreements;
(vi)
all Pre-Closing Taxes and Seller Income Taxes; and
(vii)
all Liabilities in any way relating to any Excluded Asset.
(b)
Assumed Liabilities. On and after the Closing and without further
Liability of Seller or its Affiliates, Purchaser shall assume, and Purchaser hereby agrees to pay,
satisfy and discharge when due, only the following Liabilities of Seller and its Affiliates (the
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“Assumed Liabilities”), and no other Liabilities: All Liabilities of Seller and its Affiliates under
any Assigned Facilities Agreements expressly assumed by Purchaser pursuant to, and subject to
the conditions set forth in, Section 2.1.2.
Section 2.2
Purchase Price.
Section 2.2.1 Amount. The total consideration for the Purchased Assets shall be
an amount equal to Eleven Million Dollars ($11,000,000) which shall be paid by or caused to be
paid by Purchaser to Seller at Closing (subject to adjustment in Section 5.6, the “Purchase
Price”), plus the assumption by Purchaser of the Assumed Liabilities.
Section 2.2.2 Method of Payment of Purchase Price. Payment of the Purchase
Price shall be made in United States Dollars, by wire transfer of immediately available federal
funds, without set-off or deduction, to an account located in the United States as Seller or, if
applicable, Purchaser may specify by notice.
Section 2.2.3 Proration. Purchaser and Seller agree that the following items
relating to the Purchased Assets shall be prorated without duplication of any such items as of the
Closing Date and without duplication for the adjustments made pursuant to Section 2(b) of the
PPA Side Agreement, with Seller liable to the extent such items relate to any time period through
the Closing Date, and Purchaser liable to the extent such items relate to periods commencing
after the Closing Date (measured in the same units used to compute the item in question,
otherwise measured by calendar days):
(i)
any real and personal property ad valorem Taxes imposed on tangible or
intangible property with respect to the Purchased Assets as provided in Section 9.3, Section 9.4
and Section 9.5;
(ii)
any rent payments or fees made or paid prior to the Closing in respect of
the Premises;
(iii) any charges for water, telephone, electricity and other utilities and any
other payment for goods and services; and
(iv)
(A) any annual Permit, license and registration fees associated with the
Purchased Assets and (B) any prepayments under any Assigned Facilities Agreements.
In connection with the proration referred to in this Section 2.2.3, in the event that actual
figures are not available at the Closing Date, the proration shall be based upon the amounts
accrued through the Closing Date or paid for the most recent year (or other appropriate period)
for which actual amounts paid are available. Such prorated amounts shall be re-prorated and
paid to the appropriate Party within sixty (60) days of the date that the previously unavailable
actual figures become available. Seller and Purchaser agree to furnish each other with such
documents and other records as may be reasonably requested in order to confirm all adjustment
and proration calculations made pursuant to this Section 2.2.3.
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Allocation of Purchase Price.
Section 2.3.1 Not later than forty-five (45) days after the Closing, Purchaser
shall provide Seller with an allocation of the Purchase Price, plus any Assumed Liabilities, to the
extent properly taken into account under Section 1060 of the Code, among the Purchased Assets
as of the Closing Date using the allocation method provided by Section 1060 of the Code and the
Treasury regulations thereunder (the “Purchase Price Allocation Schedule”). Within twenty (20)
days after its receipt of Purchaser’s proposed Purchase Price Allocation Schedule, Seller shall
propose to Purchaser any changes thereto, or otherwise shall be deemed to have agreed with
Purchaser’s proposed Purchase Price Allocation Schedule.
Section 2.3.2 If Seller proposes changes to Purchaser’s proposed Purchase Price
Allocation Schedule within the twenty (20) day period described above, Seller and Purchaser
shall use commercially reasonable efforts to mutually agree upon a revised Purchase Price
Allocation Schedule as soon as practicable and, in any event, within twenty (20) days of
Purchaser’s receipt of Seller’s proposed changes. In the event that the Parties are unable to agree
on a revised Purchase Price Allocation Schedule after such twenty (20) day period, the Parties
shall refer the dispute to a firm of independent public accountants that is mutually acceptable to
the Parties (the “Independent Accountant”), which firm shall make a final and binding
determination as to all matters in dispute with respect to the Purchase Price Allocation Schedule
(and only such matters) on a timely basis and shall promptly notify the Parties in writing of its
resolution. The Independent Accountant shall not have the power to modify or amend any term
or provision of this Agreement. Each Party shall bear and pay one-half of the fees and other
costs for services rendered by the Independent Accountant pursuant to this Section 2.3.2.
Notwithstanding the foregoing, the determination of the Independent Accountant shall not be
inconsistent with any Tax Returns in respect of Transfer Taxes.
Section 2.3.3 The Parties shall cooperate to comply with all substantive and
procedural requirements of Section 1060 of the Code and the Treasury regulations thereunder,
and except for any adjustment to the Purchase Price, the Purchase Price Allocation Schedule
shall be adjusted only if and to the extent necessary to comply with such requirements. The
Parties agree that they will not take nor will they permit any Affiliate to take, for Tax purposes,
any position inconsistent with such Purchase Price Allocation Schedule except as may be
required by a Taxing Authority under applicable Tax Law; provided, however, that
(a) Purchaser’s cost may differ from the total amount allocated hereunder to reflect the inclusion
in the total cost of items (for example, capitalized acquisition costs) not included in the total
amount so allocated, and (b) the amount realized by Seller may differ from the amount allocated
to reflect transaction costs that reduce the amount realized for federal income Tax purposes.
Each Party shall notify the other Party, within twenty (20) days after notice or commencement of
an examination, audit or other proceeding regarding the allocation determined under this Section
2.3.
Section 2.4 The Closing. The closing of the transactions contemplated herein (the
“Closing”) will take place at the offices of Nevada Power Company, 6226 W. Sahara, Las
Vegas, Nevada, at 10:00 a.m. local time on the date as soon as practicable but in no event longer
than five (5) Business Days (subject to an extension of up to ten (10) Business Days if requested
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by Purchaser to the extent there is a Schedule Update pursuant to Section 5.8 which occurs less
than ten (10) days prior to the Closing Date) after the conditions to the Closing set forth in
Section 6.1 and Section 6.2 have been satisfied or waived, or at such other place, time or date as
Purchaser and Seller mutually agree (the “Closing Date”); provided that in no event shall the
Closing Date occur prior to November 30, 2014. The Closing shall be deemed effective as of
12:01 a.m. local time on the day after the Purchase Price has been paid to Seller and the Bill of
Sale and the Assignment and Assumption Agreement (if any) have been executed and delivered
to Purchaser.
Section 2.5
Closing Deliveries.
Section 2.5.1 Purchaser’s Closing Deliveries. At the Closing, Purchaser will pay
to Seller the Purchase Price in accordance with Section 2.2.2, and execute and deliver or pay (as
applicable) the following items to Seller:
(a)
a counterpart signature page to the Bill of Sale in substantially the
form attached hereto as Exhibit B (the “Bill of Sale”), executed by an authorized representative
of Purchaser;
(b)
if any Assigned Facilities Agreements will be transferred at
Closing, a counterpart signature page to an assignment and assumption agreement in form and
substance reasonably acceptable to the Parties (the “Assignment and Assumption Agreement”),
executed by an authorized representative of Purchaser;
(c)
a certificate, dated as of the Closing Date, executed by an
authorized officer of Purchaser, certifying that attached thereto is: (i) a true, accurate and
complete copy of a Certificate of Good Standing with respect to Purchaser, issued by the
Secretary of State of the State of Nevada as of a recent date; (ii) a true, accurate and complete
copy of the resolutions of the board of directors of Purchaser, authorizing the execution, delivery
and performance by Purchaser of this Agreement and all of the other agreements and
instruments, in each case, to be executed and delivered by Purchaser in connection herewith; and
(iii) the name, title and signature of each of the officers of Purchaser authorized to execute and
deliver this Agreement and the other agreements and instruments contemplated hereby.
(d)
a certificate, dated as of the Closing Date, executed by an
authorized officer of Purchaser, certifying as to the matters set forth in Section 6.2.1 and Section
6.2.2;
(e)
any amounts for which Purchaser is liable pursuant to Section 2.2.3
of this Agreement, to the extent not already paid;
(f)
a counterpart signature page to the Site Lease Termination,
executed by an authorized representative of Purchaser;
(g)
a counterpart signature page to the PPA Side Agreement, executed
by an authorized representative of Purchaser; and
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(h)
such other documents and instruments as may be reasonably
requested by Seller to consummate the transactions contemplated by this Agreement.
Section 2.5.2 Seller’s Closing Deliveries. At the Closing, Seller will execute and
deliver, or will cause to be executed and delivered (as applicable), to Purchaser the following
items:
(a)
the Letter of Credit;
(b)
a counterpart signature page to the Bill of Sale, executed by an authorized
representative of Seller;
(c)
if any Assigned Facilities Agreements will be transferred at Closing, a
counterpart signature page to the Assignment and Assumption Agreement, executed by an
authorized representative of Seller;
(d)
a certification of non-foreign status of ArcLight Sun-Peak Holdings, LLC,
as the indirect owner of 100% of the equity interests of Nevada Sun-Peak Limited Partnership, in
the form and manner which complies with the requirements of Section 1445(b)(2) of the Code
and Treasury Regulation Section 1.1445-2(b)(2) and in form and substance reasonably
satisfactory to Purchaser;
(e)
a certificate, dated as of the Closing Date, executed by an authorized
officer of Seller, certifying that attached thereto is: (i) a true, accurate and complete copy of a
Certificate of Good Standing with respect to Seller, issued by the Secretary of State of the State
of Nevada as of a recent date; (ii) true, accurate and complete copies of the resolutions of the
partners of Seller, authorizing the execution, delivery and performance by Seller of this
Agreement and all of the other agreements and instruments, in each case, to be executed and
delivered by Seller in connection herewith; and (iii) the name, title and signature of each of the
authorized officers of Seller authorized to execute and deliver this Agreement and the other
agreements and instruments contemplated hereby;
(f)
a certificate, dated as of the Closing Date, executed by an authorized
officer of Seller, certifying as to the matters set forth in Section 6.1.1 and Section 6.1.2;
(g)
record drawings (if any) in Seller’s possession that include the as-built
drawings reflecting the design of the Facilities;
(h)
any amounts for which Seller is liable pursuant to Section 2.2.3 of this
Agreement, to the extent not already paid;
(i)
documents suitable for recording, releasing or terminating, as applicable,
the Financing Liens;
(j)
a counterpart signature page to the Site Lease Termination, executed by an
authorized representative of Seller;
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(k)
a counterpart signature page to the PPA Side Agreement, executed by an
authorized representative of Seller; and
(l)
such other documents and instruments as may be reasonably requested by
Purchaser to consummate the transactions contemplated by this Agreement.
Section 2.6
Further Assurances; Post-Closing Cooperation.
Section 2.6.1 Further Assurances. Subject to the terms and conditions of this
Agreement, at any time or from time to time after the Closing, at either Party’s request and
without further consideration, the other Party shall execute and deliver to such Party such other
instruments of sale, transfer, conveyance, assignment and confirmation, provide such materials
and information and take such other actions as such Party may reasonably deem necessary or
desirable in order more effectively (a) to transfer, convey and assign to Purchaser, and to confirm
Purchaser’s title to, the Purchased Assets, (b) to effectuate the assumption by Purchaser of the
any Assigned Facilities Agreements, and (c) otherwise to consummate the transactions
contemplated by this Agreement. Purchaser shall provide to Seller all invoices and supporting
documentation received with respect to any Assigned Facilities Agreements, which relate to any
obligations arising thereunder prior to the Closing Date or any other obligation that remains with
Seller.
Section 2.6.2 Pre-Closing Books and Records.
(a)
Following Closing, each Party and its Affiliates will afford each other
Party, its counsel and its accountants, during normal business hours, reasonable access to the
Books and Records with respect to periods prior to Closing (the “Pre-Closing Books and
Records”) and the right to make copies and extracts therefrom, to the extent that such access may
be reasonably required by the requesting Party in connection with (i) the preparation of Tax
Returns, (ii) compliance with the requirements of any Governmental Authority, (iii) any
Excluded Liabilities or (iv) any rights and obligations arising under ARTICLE VIII, ARTICLE
IX or ARTICLE XI hereof. Each Party shall maintain Pre-Closing Books and Records
reasonably expected to be required in connection with the matters described in items (i) through
(iv) of the preceding sentence in accordance with the ordinary course document retention
policies of such Party; provided, however, that nothing in this Agreement shall be deemed to
obligate either Party to maintain the Pre-Closing Books and Records for longer than two (2)
years after Closing.
(b)
Purchaser acknowledges and consents to the retention by Seller of
information made available to Purchaser relating to the Purchased Assets (the “Retained
Information”). From and after the Closing Date, Seller shall, and shall cause its representatives
to, treat the Retained Information as strictly confidential (except to the extent compelled to
disclose by judicial or administrative process or by other requirements of Law, any stock
exchange or any other self-regulatory organization or as reasonably required by Seller in
connection with the matters described in clauses (i) through (iv) of Section 2.6.2(a)).
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Section 2.6.3 Delivery of Books and Records. No later than the Closing Date (or
in the case of Books and Records not immediately required for the operation and maintenance of
the Facilities that cannot be reasonably and practicably delivered at the Closing, as soon as
reasonably practicable thereafter, but no later than forty-five (45) days after the Closing Date),
Seller shall deliver any Books and Records (to the extent providing such to Purchaser does not
violate any Law) that are not located at the Facilities to Purchaser at Purchaser’s offices in Las
Vegas, Nevada, the Facilities or another location as designated by Purchaser in or near Las
Vegas, Nevada.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser that, except as set forth in Seller’s
Disclosure Schedule, all of the statements contained in this ARTICLE III are true and correct as
of the Effective Date, except to the extent such representations and warranties are specifically
made as of a particular date (in which case such representations and warranties will be true and
correct as of such date). Each exception and other response to this Agreement set forth in Seller’s
Disclosure Schedule is identified by reference to, or has been grouped under a heading referring
to, a specific individual section of this Agreement, and, except as otherwise specifically stated
with respect to such exception, relates only to such section and to other sections to the extent that
the application of such exception or other response to such other sections is reasonably apparent
from a reading of such exception or other response.
Section 3.1
Existence. Seller is a limited partnership duly formed, validly existing and
in good standing under the Laws of the State of Nevada. Seller has the requisite limited liability
company power and authority to own, operate and lease its properties and assets and to carry on
its business as now being conducted. Seller is duly qualified or licensed to do business and is in
good standing in all jurisdictions in which the character of the properties owned or held under
lease by it or the nature of the business transacted by it makes qualification necessary, except
where the failure to be so qualified, licensed or in good standing would not reasonably be
expected to have a Seller Material Adverse Effect.
Section 3.2
Authority. Seller has full limited partnership power and authority to
execute and deliver this Agreement and all other agreements (the “Ancillary Agreements”) to be
executed by Seller at Closing and all other instruments to which it is or will be a party in
connection with the transactions contemplated hereby, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby. The execution
and delivery by Seller of this Agreement and the Ancillary Agreements, and the performance by
Seller of its obligations hereunder and thereunder, have been duly and validly authorized by all
necessary limited liability company action.
Section 3.3
Binding Agreement. This Agreement and the Ancillary Agreements to
which Seller is or will be a party have been or will be when delivered duly executed and
delivered by Seller and, assuming due and valid authorization, execution and delivery thereof by
Purchaser and each other party thereto, this Agreement and the Ancillary Agreements to which it
is or will be a party are or will be when delivered valid and binding obligations of Seller
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enforceable against Seller in accordance with their terms (subject to applicable bankruptcy,
insolvency or other similar Laws relating to or affecting the enforcement of creditors’ rights
generally and to general principles of equity).
Section 3.4 No Conflicts. Subject to the receipt of the FERC Approval and receipt of
the other consents and actions listed in Section 3.4 of Seller’s Disclosure Schedule, the execution
and delivery by Seller of this Agreement do not, and the execution and delivery by such Seller of
the Ancillary Agreements to which it is or will be a party, the performance by such Seller of its
obligations under this Agreement and such Ancillary Agreements and the consummation of the
transactions contemplated hereby and thereby shall not:
(a)
conflict with or result in a violation or breach of any of the terms,
conditions or provisions of such Seller’s organizational documents;
(b)
result in a default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any Assigned Facilities
Agreement (with or without notice or lapse of time or both) with respect to the Purchased Assets
to which such Seller or any of its Affiliates is a party or by which such Seller, any of its
Affiliates or any of the Purchased Assets may be bound, except for such defaults (or rights of
termination, cancellation or acceleration) as to which requisite waivers or consents have been
obtained in writing (true and correct copies of which waivers or consents have been furnished to
Purchaser);
(c)
conflict with or result in a violation or breach in any material respect of
any term or provision of any Law applicable to such Seller or the Purchased Assets; or
(d)
result in the imposition or creation of any Lien (other than a Permitted
Lien) upon any of the Purchased Assets, other than in favor of Purchaser.
Section 3.5 Approvals and Filings. Except for the FERC Approval and as set forth in
Section 3.5 of Seller’s Disclosure Schedule, no material consent or approval of, filing with or
notice to, any Governmental Authority or other Person by Seller is required in connection with
the execution, delivery and performance by Seller of this Agreement or any of the Ancillary
Agreements to which it is or will be a party or the consummation of the transactions
contemplated hereby or thereby.
Section 3.6
No Seller Material Adverse Effect. From December 31, 2013 to the
Effective Date, no change, event or development has had, or would reasonably be expected to
have, a Seller Material Adverse Effect.
Section 3.7 Legal Proceedings. Except as set forth in Section 3.7 of Seller’s
Disclosure Schedule, there are no Actions (a) outstanding or pending to which Seller is a party or
(b) to Seller’s Knowledge, threatened against Seller or any of its assets and properties, in each
case which would be reasonably expected to (i) result in the issuance of an order restraining,
enjoining or otherwise prohibiting or making illegal the consummation of the transactions
contemplated by this Agreement or any of the Ancillary Agreements, (ii) adversely affect the
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ownership, operation, maintenance or use of the Project or the Purchased Assets, or
(iii) individually or in the aggregate, have a Seller Material Adverse Effect.
Section 3.8
Compliance with Laws. Seller is not in violation of or in default under
any Law applicable to it (excluding any Environmental Laws which are addressed in Section
3.16) and employment-related Laws which are addressed in Section 3.17 and Section 3.18), the
Project or the Purchased Assets, in each case, in any material respect. Seller has not received
notification alleging that it is in violation of any Law (excluding any Environmental Laws which
are addressed in Section 3.16 and employment-related Laws which are addressed in Section 3.17
and Section 3.18) applicable to the Project or the Purchased Assets, in each case, in any material
respect.
Section 3.9 Title to Purchased Assets. As of the Effective Date, Seller has good and
marketable title to the Purchased Assets, free and clear of all Liens, except for Permitted Liens.
At the Closing, Purchaser will acquire good and marketable title to the Purchased Assets, free
and clear of all Liens, except for Permitted Liens.
Section 3.10 Real Property.
(a)
Owned Real Property. Neither Seller nor any of its Affiliates has an
ownership interest in any real property that relates to, is used or is occupied by any of them, in
each case, in connection with the operation and maintenance of the Facilities or the Project.
(b)
Leased Real Property.
(i)
Except for the Site Lease, there is no real property leased or
subleased by Seller or any of its Affiliates from a third party that relates to, is used or is occupied
by any of them, in each case, in connection with the operation and maintenance of the Facilities
or the Project.
(ii)
Except for collateral assignments granted with the consent of
Purchaser and which have been discharged, neither Seller nor any of its Affiliates has assigned,
sublet, transferred or conveyed any interest in the Premises or any portion of the real property
leased to Seller pursuant to the Site Lease.
(iii) Neither Seller nor, to Seller’s Knowledge, any other Person, is in
default in any material respect in the performance or observance of any term or provision of, and
no event has occurred which, with lapse of time or action by a third party, would result in such a
default under, the Site Lease, and Seller has no claim against Purchaser under the Site Lease.
Section 3.11
Sufficiency of Purchased Assets.
(a)
The Purchased Assets and the Excluded Assets constitute all of the assets,
properties, rights, privileges, claims and contracts of every kind and nature, real or personal,
tangible or intangible, absolute or contingent, wherever located (including those necessary to
access and utilize any common use facilities), operated, owned or leased by Seller that are used
in connection with the operation and maintenance of the Facilities. As of April 15, 2014, Seller
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has an amount of Stores and Inventory in a quantity sufficient to allow Seller to operate the
Facilities in the ordinary course of business as of the Effective Date and in accordance with
Good Operating Practices. Seller has provided Purchaser with a list, as of April 15, 2014, of all
material consumable supplies for which less than a sixty (60) day supply is normally maintained
by Seller.
(b)
Except as set forth in Section 3.11(b) of Seller’s Disclosure Schedule, (i)
all Fixtures and Equipment are located at the Facilities, and no Fixtures and Equipment intended
for the Facilities are being held by third parties pending payment by or on behalf of Seller, and
(ii) all Fixtures and Equipment (other than spare parts and other equipment not in service) and all
Improvements constituting part of the Facilities have been in Seller’s judgment maintained and
operated by Seller in accordance with Good Operating Practices, except for ordinary wear and
tear.
Section 3.12 Warranty Matters. Section 3.12 of Seller’s Disclosure Schedule identifies
all warranties in effect by any vendor, materialman, supplier, contractor or subcontractor relating
to the Purchased Assets or any component thereof with a value of $50,000 or more. To Seller’s
Knowledge, there are no events that have occurred or conditions applicable that constitute or
may constitute a defense to the continuing effectiveness of each such warranty.
Section 3.13 Contracts.
(a)
Except for any Assigned Facilities Agreements, any Benefit Plans and any
Contracts with respect to which none of the Purchased Assets will be bound or have Liability
after the Closing, there are no Contracts of the following types to which Seller is a party or by
which the Purchased Assets may be bound or relating to the employment at the Project of any
Project Employee:
(i)
Contracts for the future purchase, exchange or sale of electric
power or ancillary services or fuel;
(ii)
Contracts for the future transmission of electric power or fuel or
(iii)
interconnection Contracts;
for the storage of fuel;
(iv)
other than Contracts of the nature addressed by Section 3.13(a)(i)
and Section 3.13(a)(ii), Contracts for the future provision of goods or services requiring
payments in excess of $100,000 for each individual Contract;
(v)
outstanding agreements of guaranty, surety or indemnification,
direct or indirect, by Seller or any of its Affiliates for the benefit of the Purchased Assets;
(vi)
Contracts with Seller or any of its Affiliates relating to the future
provision of goods or services;
(vii)
employment and consulting Contracts;
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(viii) Contracts providing severance benefits;
(ix)
any collective bargaining agreement;
(x)
outstanding futures, swap, collar, put, call, floor, cap, option or
other Contracts that are intended to benefit from or reduce or eliminate the risk of fluctuations in
the price of commodities, including electric power, fuel or securities;
(xi)
partnership, joint venture or limited liability company agreements;
(xii)
Contracts relating to Indebtedness;
(xiii) Contracts relating to the use of the Facilities; and
(xiv)
operation of the Facilities.
Section 3.14
Contracts relating to the use of Intellectual Property used in the
Permits.
(a)
Except for those Permits required under Environmental Law (which are
addressed in Section 3.16), Section 3.14(a) of Seller’s Disclosure Schedule sets forth a list of all
Transferred Permits.
(b)
All Transferred Permits are properly in the name of the Facilities or Seller.
Except as set forth in Section 3.14(b) of Seller’s Disclosure Schedule, Seller is in compliance in
all material respects with each Transferred Permit, and each Transferred Permit is in full force
and effect.
Section 3.15 Insurance. Section 3.15 of Seller’s Disclosure Schedule sets forth a true
and complete list and description of all material insurance policies in force on the Effective Date
with respect to the Purchased Assets, together with a statement of the aggregate amount of
claims paid out and claims pending under each such insurance policy, in each case, relating to
the Purchased Assets. All policies are in full force and effect, all premiums due thereon have
been paid and Seller is in compliance in all material respects with the terms and provisions of
such policies. Furthermore, as of the Effective Date, as they relate to the Purchased Assets,
(a) Seller has not received any notice of cancellation or non-renewal of any policy in effect on
the Effective Date nor, to Seller’s Knowledge, is the termination of any such policy threatened,
(b) there is no claim pending under any of such policies as to which coverage has been
questioned, denied or disputed by the underwriters of such policies, and (c) Seller has not
received notice that the Facilities, or any Fixtures and Equipment or the operation thereof, will
not be insurable or will be subject to exclusions arising from actual or potential defects in the
Purchased Assets.
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Environmental Matters.
Except as set forth in Section 3.16 of Seller’s Disclosure Schedule:
(a)
Seller has made available to Purchaser all of the environmental site
assessment reports, Environmental Permits and other studies, audits and reports that are in the
possession of Seller and that relate to environmental, health and safety matters in connection
with Seller’s ownership, construction, operation or maintenance of the Facilities or the Premises.
(b)
Seller (i) has not entered into or agreed to any judicial or administrative
consent decree or order, and (ii) is not subject to any judgment, decree, or judicial or
administrative order, relating to compliance with any Environmental Law or to investigation or
cleanup of Hazardous Materials or Environmental Conditions, in each case relating to the
Facilities or the Premises.
(c)
There are no Actions pending nor, to Seller’s Knowledge, are there any
Actions threatened, under any Environmental Law relating to the Facilities.
(d)
All Environmental Permits issued to Seller and in effect with respect to the
Facilities or the Premises are set forth in Section 3.16(d) of Seller’s Disclosure Schedule. All
Environmental Permits required for the ownership, construction, operation or maintenance of the
Facilities (i) are in effect to the extent required under any Environmental Law or (ii) a complete
and timely application has been submitted such that an application shield would apply. No
appeal or any other Action is pending, or to Seller’s Knowledge, threatened, to revoke, suspend
or modify any such Environmental Permits.
(e)
To Seller’s Knowledge, Seller is and has been in compliance with all
Environmental Laws in all material respects with respect to the Facilities and the Premises.
(f)
To Seller’s Knowledge, Seller has not Released Hazardous Materials on,
beneath or from the Premises, except for Releases of Hazardous Materials that would not
reasonably be expected to result in a claim by a Governmental Authority or other Person not
affiliated with Purchaser or a requirement to engage in a Remediation.
(g)
To Seller’s Knowledge, there are no facts, circumstances or conditions
related to Seller’s operation of the Facilities that exist that would make it reasonably likely that
the Facilities are in violation of Environmental Law.
Notwithstanding any other provision of this Agreement to the contrary (except for
Environmental Permits that may require filing with, or approval by, Governmental Authorities
under Section 3.5), this Section 3.16 contains the sole and exclusive representations and
warranties of Seller with respect to compliance with Environmental Laws, Environmental
Permits, Hazardous Materials and Remediation.
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Section 3.17 Labor Matters.
(a)
The Seller has no employees. No individual performs services in respect
of the Facilities or otherwise in respect of the Purchased Assets other than those listed on Section
3.17(a) of Seller’s Disclosure Schedule (each, a “Project Employee”). All of the Project
Employees are employed by the Employing Entity. Seller has disclosed to Purchaser, with
respect to each Project Employee (including any Project Employee who is on a leave of absence
or on layoff status): (i) the name and title of the Project Employee; and (ii) a description of
his/her job.
(b)
None of the Employing Entity, Seller or any of their respective Affiliates
is party to or bound by any labor agreement, collective bargaining agreement, work rules or
practices or any other labor-related agreements or arrangements with any labor union or labor
organization pertaining to the Project Employees. There are no labor agreements, collective
bargaining agreements, work rules or practices or any other labor-related agreements or
arrangements with any labor union or labor organization that pertain to any Project Employee’s
employment with Employing Entity, Seller or any of their respective Affiliates.
(c)
No labor union, labor organization or Project Employee has made a
pending demand for recognition or certification to Employing Entity, Seller or any of their
respective Affiliates with respect to the Facilities or Project Employees. There are no
representation or certification proceedings or petitions seeking a representation proceeding
presently pending or threatened in writing to be brought or filed with the National Labor
Relations Board or any other labor relations tribunal or authority with respect to Project
Employees. To Seller’s Knowledge, there have been no labor union organizing activities with
respect to any Project Employees.
(d)
From January 1, 2009, there have been no actual or, to Seller’s
Knowledge, threatened arbitrations, grievances, labor disputes, strikes, lockouts, slowdowns or
work stoppages against or affecting the Project. From January 1, 2009, there have been no actual
or, to Seller’s Knowledge, threatened, arbitrations, grievances, labor disputes, strikes, lockouts,
slowdowns or work stoppages against or affecting the Project.
(e)
Employing Entity, Seller and any of their respective Affiliates, with
respect to the Project Employees, are in compliance in all material respects with all applicable
Laws relating to employment and employment practices, including, without limitation, all Laws
respecting terms and conditions of employment, health and safety, wages and hours, child labor,
immigration, employment discrimination, worker classification, disability rights or benefits,
equal opportunity, plant closures and layoffs, affirmative action, workers compensation, labor
relations, employee leave issues and unemployment insurance.
(f)
Except as would not, individually or in the aggregate, if resulting in a
judgment against Seller or an Affiliate of Seller, reasonably be expected to have a Seller Material
Adverse Effect, there are no claims pending or, to Seller’s Knowledge, threatened against,
Employing Entity, Seller or any of their respective Affiliates that pertain to any current or former
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Project Employee or any current or former employee of Employing Entity, Seller or any of their
respective Affiliates.
Section 3.18
Employee Matters.
(a)
Neither Purchaser nor any of its Affiliates will incur, and no condition or
set of circumstances exists under which Purchaser or any of its Affiliates could incur, directly or
indirectly, any Tax, penalty, fine, Liability, Loss or expense under ERISA, the Code or any other
applicable Law, or pursuant to any indemnification or similar agreement, under the terms of or
otherwise in respect of any employee compensation or benefit plan, program, agreement or
arrangement, providing retirement, incentive compensation, health, disability, severance, life,
change in control or equity compensation or benefits (including any employee benefit plan
within the meaning of ERISA Section 3(3)), established or maintained by the Employing Entity,
Seller or any of their respective ERISA Affiliates (each such plan, program, agreement or
arrangement is a “Benefit Plan”).
(b)
Each Benefit Plan is, and at all times since inception has been, maintained,
operated, administered and funded in material compliance with its terms and all applicable Law.
(c)
Each Benefit Plan that is intended to be qualified under Section 401(a) of
the Code is so qualified and its related trust and/or group annuity contract is exempt from
taxation under Section 501(a) of the Code. Nothing has occurred that could reasonably be
expected to adversely affect the qualified status of any such Benefit Plan.
(d)
Except for routine claims for benefits in the normal operation of the
Benefit Plans, there are no claims against or involving any Benefit Plan or asserting any rights or
claims to benefits under any Benefit Plan, nor, to Seller’s Knowledge, is any such claim
threatened nor is there a reasonable basis for any such claim. There are no audits, inquiries or
proceedings pending or, to Seller’s Knowledge, threatened by any Governmental Authority with
respect to any Benefit Plan.
(e)
None of the Employing Entity, Seller and any of their respective ERISA
Affiliates sponsors, maintains or contributes to, or has ever sponsored, maintained or contributed
to (or been obligated to sponsor, maintain or contribute to) (i) a “multiemployer plan,” as defined
in Sections 3(37) or 4001(a)(3) of ERISA or 414(f) of the Code, (ii) a multiple employer plan
within the meaning of Section 4063 or 4064 of ERISA or Section 413(c) of the Code, or (iii) an
employee benefit plan that is subject to Section 302, 303, 304 or 305 of ERISA, Title IV of
ERISA or Section 412, 430, 431, 432 or 436 of the Code, or (iv) a “multiple employer welfare
arrangement,” as defined in Section 3(40) of ERISA.
Section 3.19 Brokers. All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by Seller directly with Purchaser without the
intervention of any Person on behalf of Seller in such manner as to give rise to any valid claim
by any Person against Purchaser for a finder’s fee, brokerage commission or similar payment.
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Section 3.20 Intellectual Property. Except as set forth on Section 3.20 of Seller’s
Disclosure Schedule, (i) Seller owns or has the right to use all the Transferred Intellectual
Property used in the operations of the Facilities as owned, operated and maintained for the last
twenty-four (24) months by Seller, and (ii) to Seller’s Knowledge, no Person has or is infringing
or misappropriating (whether directly or indirectly) any Transferred Intellectual Property. No
Person has asserted against Seller or any of its Affiliates a claim in writing that the operation of
the Facilities as owned, operated and maintained for the last twenty-four (24) months by Seller
infringes or misappropriates the Intellectual Property of such Person and, to Seller’s Knowledge,
there is no valid basis for any such claim.
Section 3.21 Regulatory Status. Seller (a) is an “exempt wholesale generator” as
defined in the Public Utility Holding Company Act of 2005, (b) is subject to regulation under the
Federal Power Act as a “public utility” and (c) has been authorized by FERC to make sales of
energy and capacity under the PPA, which has been accepted for filing by FERC as just and
reasonable pursuant to Section 205 of the Federal Power Act. Seller is not subject to regulation
as a franchised public utility or public service company (or similar designation reflecting an
obligation to offer retail electric service to the public) by any State of the United States or any
municipality or any political subdivision of the foregoing.
Section 3.22 Disclosure. No representation or warranty made by Seller in this
Agreement, and no statement contained in Seller’s Disclosure Schedule (as modified by any
Schedule Update delivered to Purchaser in accordance with Section 5.8) or any certificate
delivered by or on behalf of Seller pursuant to Section 2.5.2, contains any untrue statement of a
material fact or omits any material fact necessary to make the statements herein or therein (taken
as a whole) not misleading when taken together in light of the circumstances in which they were
made.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER Purchaser hereby represents and warrants to Seller that, except as set forth in Purchaser’s
Disclosure Schedule, all of the statements contained in this ARTICLE IV are true and correct as
of the Effective Date, except to the extent such representations and warranties are specifically
made as of a particular date (in which case such representations and warranties will be true and
correct as of such date). Each exception and other response to this Agreement set forth in
Purchaser’s Disclosure Schedule is identified by reference to, or has been grouped under a
heading referring to, a specific individual section of this Agreement, and, except as otherwise
specifically stated with respect to such exception, relates only to such section and to other
sections to the extent that the application of such exception or other response to such other
sections is reasonably apparent on its face without further investigation.
Section 4.1
Existence. Purchaser is a corporation, duly formed, validly existing and in
good standing under the Laws of the State of Nevada and has full corporate power and authority
to conduct its business as it is now being conducted and to own, lease and operate its assets and
properties. Purchaser is duly qualified or licensed to do business and is in good standing in all
jurisdictions in which the character of the properties owned or held under lease by it or the nature
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of the business transacted by it makes qualification necessary, except where the failure to be so
qualified, licensed or in good standing would not be reasonably expected to have a Purchaser
Material Adverse Effect.
Section 4.2 Authority. Purchaser has full corporate power and authority to execute
and deliver this Agreement and all other agreements or instruments to which it is or will be a
party in connection with the transactions contemplated hereby, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby and thereby.
The execution and delivery by Purchaser of this Agreement and all other agreements or
instruments to which it is or will be a party in connection with the transactions contemplated
hereby, and the performance by Purchaser of its obligations hereunder and thereunder, have been
duly and validly authorized by all necessary corporate action.
Section 4.3
Binding Agreement. This Agreement and the Ancillary Agreements to
which Purchaser is or will be a party have been or will be when delivered duly and validly
executed and delivered by Purchaser and, assuming due and valid authorization, execution and
delivery thereof by Seller and each other party thereto, this Agreement and the Ancillary
Agreements to which Purchaser is or will be a party are or will be when delivered valid and
binding obligations of Purchaser enforceable against Purchaser in accordance with their terms
(subject to applicable bankruptcy, insolvency or other similar Laws relating to or affecting the
enforcement of creditors’ rights generally and to general principles of equity).
Section 4.4
No Conflicts. Subject to the receipt of the PUCN Approval and FERC
Approval, the execution and delivery by Purchaser of this Agreement do not, and the execution
and delivery by Purchaser of the Ancillary Agreements to which Purchaser is or will be a party,
the performance by Purchaser of its obligations under this Agreement and such Ancillary
Agreements and the consummation of the transactions contemplated hereby and thereby shall
not:
(a)
conflict with or result in a violation or breach of any of the terms,
conditions or provisions of Purchaser’s articles of incorporation and by-laws;
(b)
result in a default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any material Contract or other
material obligation (with or without notice or lapse of time or both) to which Purchaser or any of
its Affiliates is a party or by which any of their respective assets and properties may be bound,
except for such defaults (or rights of termination, cancellation or acceleration) as to which
requisite waivers or consents have been obtained in writing (true and correct copies of which
waivers and consents have been furnished to Seller); or
(c)
conflict with or result in a violation or breach in any material respect of
any term or provision of any Law applicable to Purchaser or any of its Affiliates or any of their
respective assets and properties.
Section 4.5 Approvals and Filings. Except for the PUCN Approval, FERC Approval
and as set forth in Section 4.5 of Purchaser’s Disclosure Schedule, no material consent or
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approval of, filing with or notice to, any Governmental Authority or other Person is required in
connection with the execution, delivery and performance by Purchaser of this Agreement or any
of the Ancillary Agreements to which Purchaser is or will be a party or the consummation by
Purchaser of the transactions contemplated hereby or thereby.
Section 4.6 Legal Proceedings. Except as set forth in Section 4.6 of Purchaser’s
Disclosure Schedule, there are no Actions (a) outstanding or pending to which Purchaser is a
party or (b) to Purchaser’s Knowledge, threatened against Purchaser or any of its assets and
properties, which would be reasonably expected to (i) result in the issuance of an order
restraining, enjoining or otherwise prohibiting or making illegal the consummation of the
transactions contemplated by this Agreement or any of the Ancillary Agreements, or (ii)
individually or in the aggregate, have a Purchaser Material Adverse Effect.
Section 4.7
Brokers. All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by Purchaser directly with Seller without the
intervention of any Person on behalf of Purchaser in such manner as to give rise to any valid
claim by any Person against Seller for a finder’s fee, brokerage commission or similar payment.
Section 4.8
Financial Resources. Purchaser has and will, at Closing, have unrestricted
cash sufficient to satisfy its obligations required to be performed at Closing.
Section 4.9
Due Diligence. Purchaser has completed all of its due diligence
investigation related to the Purchased Assets, except for those matters listed in Section 4.9 of the
Purchaser’s Disclosure Schedule.
ARTICLE V
COVENANTS
Section 5.1 Efforts to Close and Fulfillment of Conditions. After the Effective Date
and prior to Closing:
(a)
Each Party shall diligently and in good faith use commercially reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable under Law to consummate and make effective the transactions
contemplated by this Agreement. Such actions shall include each Party using its commercially
reasonable efforts to ensure satisfaction of the conditions precedent to its obligations hereunder,
as soon as practicable after the Effective Date.
(b)
Each Party shall provide reasonable cooperation to the other Party in
obtaining consents, approvals or actions of, making all filings with and giving all notices to
Governmental Authorities or other Persons required of the other Party to consummate the
transactions contemplated hereby and by the Ancillary Agreements. The Parties shall use their
commercially reasonable efforts to respond promptly and accurately to any requests for
additional information made by any such Governmental Authority or other Person. The Parties
agree that they shall consult with each other with respect to the transfer to Purchaser or the
obtaining by Purchaser or Seller of FERC Approval, PUCN Approval and applicable Permits,
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consents, approvals and authorizations of all third parties and Governmental Authorities;
provided, that for the avoidance of doubt, such filings and attachments thereto need not be
exchanged or preapproved by the non-filing Parties. Purchaser shall use commercially reasonable
efforts to file with the PUCN, on or before May 1, 2014 an emission reduction and capacity
replacement plan pursuant to NRS Sections 704.7316 and 704.741, which filing includes the
Facilities. Subject to Section 5.1(h), each Party shall cooperate in good faith with the
Governmental Authorities and undertake promptly any and all commercially reasonable action
required to complete lawfully the transactions contemplated by this Agreement.
(c)
On or before May 1, 2014, Purchaser shall file with the PUCN all
documents reasonably required to obtain the PUCN Approval. Purchaser shall use commercially
reasonable efforts to respond promptly and accurately to any requests for additional information
made by the PUCN, and Seller shall use commercially reasonable efforts to cooperate with
Purchaser in connection therewith. Purchaser shall consult with Seller on all principal filings
submitted by Purchaser to the PUCN in connection with the PUCN Approval; provided, that
such PUCN filings and attachments thereto need not be exchanged with, or preapproved by,
Seller. For the avoidance of doubt, Seller shall not be entitled to receive any proprietary data
related to current and forecasted operations of Purchaser, including production models, operating
costs and other similar information in connection with the preparation of the filing to the PUCN.
Each Party shall bear its own costs and expenses of the preparation of such filing.
(d)
Each Party shall prepare, as soon as is practical following the execution of
this Agreement, all necessary filings in connection with the transactions contemplated by this
Agreement that may be required by FERC or under any other federal, state or local Laws. Each
Party shall use commercially reasonable efforts to submit such filings with the FERC as
promptly as practicable and, in any event, not later than sixty (60) days after the Effective Date.
The Parties shall promptly furnish each other with copies of any notices, correspondence or other
written communication from the relevant Governmental Authority, shall promptly make any
appropriate or necessary subsequent or supplemental filings and shall cooperate in the
preparation of such filings as is reasonably necessary and appropriate (provided that any
exchange of information between Seller and Purchaser in connection with any filings shall be
done in a manner that complies with applicable antitrust laws).
(e)
Each of Seller and Purchaser agree to use commercially reasonable efforts
to refrain from taking any action which could reasonably be expected to materially delay the
consummation of the transactions contemplated by this Agreement; provided, however, that
neither (i) the filing by Seller of a petition for leave to intervene or notice of intent to comment in
any proceeding(s) initiated by Purchaser in accordance with Section 5.1(b), or otherwise, nor (ii)
Purchaser’s inclusion in its application for PUCN Approval requests or action plan items
unrelated to the Purchased Assets, shall be deemed to be an action which could reasonably be
expected to materially delay the consummation of the transactions contemplated by this
Agreement.
(f)
No separate consent by Purchaser under any agreement to which
Purchaser and Seller is a party that is required to complete the transactions contemplated by this
Agreement and the assignment and assumption of any Assigned Facilities Agreements shall be
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required from Purchaser, and by its execution and delivery of this Agreement Purchaser hereby
grants each such consent.
(g)
Notwithstanding the foregoing, nothing in this Section 5.1 shall require, or
be construed to require, Purchaser or Seller or any of their respective Affiliates to agree to (i)
sell, hold, divest, discontinue or limit, before or after the Closing Date, any assets, businesses or
interests of Purchaser or Seller or any of their respective Affiliates (other than pursuant to this
Agreement); (ii) waive their respective conditions to Closing set forth in Section 6.1 and Section
6.2; or (iii) any modification or waiver of the terms and conditions of this Agreement.
(h)
In order to permit Seller to properly manage the transition of ownership of
the Purchased Assets and the termination of services by the Project Employees, Purchaser will
promptly notify Seller of the status of the PUCN Approval (using the notice provisions in
Section 13.1).
Section 5.2
Operation and Maintenance of Purchased Assets.
(a)
After the Effective Date and prior to Closing, Seller shall operate and
maintain the Facilities in accordance with Good Operating Practices in compliance in all material
respects with Law and in the ordinary course of business consistent with past practices. Seller
shall provide Purchaser with a copy of its maintenance and capital improvements budget for the
Project for the fiscal year ending December 31, 2014 (the “2014 Budget”). Seller shall provide
notice to Purchaser if Seller’s actual expenditures for maintenance and capital improvements for
the Project for the fiscal year ending December 31, 2014 are materially less than the amounts set
forth in the 2014 Budget, and Seller shall provide information related thereto reasonably
requested by Purchaser.
(b)
Except for (x) any action contemplated by this Agreement, (y) any action
taken to avoid any impairment to the Facilities (or any part thereof) or to respond to an
emergency, and (z) any action consented to in writing by Purchaser, after the Effective Date and
prior to Closing, Seller shall not, without the written consent of Purchaser:
(i)
dispose of or assign any of the Purchased Assets except for
obsolete and unneeded assets in the ordinary course of business and in accordance with Good
Operating Practices;
(ii)
incur or permit to exist any Lien on any of the Purchased Assets,
other than the Permitted Liens;
(iii) enter into, amend, modify, terminate, grant any waiver under, give
any consent or settle or compromise any claim with respect to: (A) the PPA, or (B) any other
Assigned Facilities Agreements or Contracts entered into after the Effective Date, except in the
case of this clause (B) for any Contracts, amendments, modifications, terminations, waivers,
consents, settlements or compromises entered into or made in the ordinary course of business,
consistent with past practices, and without any cost to or Liability of Purchaser or adverse effect
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on the Purchased Assets. At the election of Seller, Contracts entered into in accordance with
Section 5.2(b)(iii)(B) shall become Assigned Facilities Agreements;
(iv)
permit to lapse any rights to any Transferred Intellectual Property,
except to the extent such rights are not required to fulfill Seller’s obligations pursuant to this
Section 5.2;
(v)
make any material modification to the Facilities or the Premises;
(vi)
settle or compromise any litigation or other Action which could
result in any obligation, cost to or Liability of Purchaser or which could constrain the future
operation of the Project;
(vii) make any material change in the levels of Stores and Inventory
maintained at the Facilities for the applicable time of the year, except in the ordinary course of
business, consistent with past practices and Good Operating Practices;
(viii) apply for or obtain any Permit, or modify or amend in any material
respect any Permit associated with the Purchased Assets, except for timely renewal of any
Permits in the ordinary course of business; or
(ix)
enter into any agreement to do or engage in any of the foregoing.
(c)
All notices of Seller and requests by Seller for consent or other action by
Purchaser pursuant to this Section 5.2, and all responses of Purchaser pursuant thereto, shall be
made in writing to or by a Purchaser Consent Representative.
(d)
Seller shall promptly notify Purchaser, by a Schedule Update in
accordance with Section 5.8, if, after the Effective Date, (i) Seller receives any notice of
cancellation or non-renewal of any insurance policy in effect on the Effective Date, (ii) Seller
acquires Seller’s Knowledge that termination of any such insurance policy is threatened, (iii) any
claim is made and pending under any of such insurance policies as to which coverage has been
questioned, denied or disputed by the underwriters of such insurance policies or (iv) Seller
receives notice that the Facilities, or any Fixtures and Equipment or the operation thereof, will
not be insurable or will be subject to exclusions arising from actual or potential defects in the
Purchased Assets.
Section 5.3
Purchaser’s Inspection Right; Due Diligence.
Section 5.3.1 After the Effective Date and prior to Closing, Purchaser, its
Related Persons and its and their agents and representatives shall have reasonable access, upon
reasonable prior notice, to the Facilities and to the Books and Records, all for purposes of
inspection and review to the extent necessary to consummate the transactions contemplated
hereunder at Closing; provided, however, that (a) any investigation shall be conducted in such
manner as not to interfere unreasonably with the operation of the Purchased Assets or involve the
Project Employees other than with Seller’s prior consent, (b) Purchaser shall require each Person
conducting or participating in any such investigation to comply with Seller’s reasonably adopted
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procedures relating to safety and security, (c) Purchaser shall indemnify Seller for any damage to
property or persons resulting from any such investigation that is the result of the negligence or
willful misconduct of Purchaser, its Related Persons or its or their agents or representatives and
is not covered by insurance, (d) Seller shall be entitled to have a representative present during the
course of any such investigation and (e) Seller shall not be required to take any action that would
constitute a waiver of the attorney-client privilege.
Section 5.3.2 Purchaser shall complete all of its due diligence investigation of
the Project and the Purchased Assets (as outlined in Section 4.9 of Purchaser’s Disclosure
Schedule) by the Due Diligence Cut-Off Date and shall deliver a written confirmation to such
effect to Seller.
Section 5.4
Cooperation with Facilities Takeover and Transition of Operations. Not
earlier than the date that is thirty (30) days prior to the Target Approval Date, Seller shall
provide to Purchaser such transition serves as may be reasonably requested by Purchaser in order
to transfer control of the Purchased Assets at Closing, which services shall be provided on terms
reasonably acceptable to Purchaser and Seller. From and after Closing, Purchaser shall permit
Seller reasonable access to the Premises to permit Seller to vacate the premises in an orderly
fashion following the termination of the Site Lease pursuant to Section 5.13 of this Agreement.
Section 5.5
Employee and Benefit Matters
(a)
Purchaser and its Affiliates are not obligated to interview or hire any
Project Employees, but may interview any Project Employees. Within seven (7) days of
Purchaser’s request, if any, Seller shall provide Purchaser with copies of the resume, job
application or other relevant data containing a summary of a Project Employee’s employment
history with the Employing Entity and shall provide, or cause the Employing Entity to provide,
Purchaser with reasonable access to any Project Employee within normal working hours.
(b)
Purchaser and its Affiliates shall have no obligations, responsibilities or
Liability arising out of or relating to the Project Employees or the employment or termination of
any current or former employees of the Employing Entity, Seller or any of their respective
Affiliates (including, without limitation, any Liability for continuation of coverage of any Project
Employee required under Section 4980B of the Code and Part 6 of Title I of ERISA (and any
applicable state Law) or compliance with any applicable requirements under the Worker
Adjustment and Retraining Notification Act (or any similar state Law)), or any employee
compensation or benefits provided to any such current or former employees of the Employing
Entity, Seller or any of their respective ERISA Affiliates, including the Project Employees.
Section 5.6
Casualty; Condemnation.
Section 5.6.1 Casualty.
(a)
If any part of the Purchased Assets is damaged, lost or
destroyed (whether by fire, theft, vandalism or other casualty, ordinary wear and tear excepted)
in whole or in part prior to the Closing (a “Casualty Loss”), Seller shall provide Purchaser
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written notice of the Casualty Loss and the details thereof (a “Casualty Notice”) promptly after
Seller becomes aware thereof.
(b)
If the Restoration Cost of the Purchased Assets that were
damaged, lost or destroyed, as estimated by a qualified independent engineer of recognized
national standing reasonably acceptable to Purchaser and Seller (the “Qualified Firm”), which
estimate shall be provided to Purchaser not later than thirty (30) days after the Casualty Notice is
received by Purchaser, is an amount equal to or less than
, Seller shall restore, prior
to the Outside Date (or such later date as shall be reasonably required to permit Seller or its
agents to complete such restoration, as estimated by the Qualified Firm, which estimate shall be
provided to Purchaser not later than thirty (30) days after the Casualty Notice is received by
Purchaser) and to a pre-Casualty Loss condition, any such damage, loss or destruction to the
Purchased Assets, unless the Parties agree to a reduction in the Purchase Price in an amount
equal to the Restoration Cost (provided that no such reduction shall reduce the Purchase Price
below zero) (a “Casualty Reduction”). Notwithstanding the foregoing, in the event that the time
to complete the restoration, as estimated by the Qualified Firm, would be reasonably likely to
result in the Closing occurring later than
(the “Restoration Outside Date”),
Purchaser may, in its sole discretion, within fifteen (15) days after receipt of such estimations,
receive a Casualty Reduction.
(c)
If the Restoration Cost of the Purchased Assets that were
damaged, lost or destroyed, as estimated by a Qualified Firm, which estimate shall be provided
to Purchaser not later than thirty (30) days after the Casualty Notice is received by Purchaser, is
an amount greater than
, Seller shall restore, prior to the Outside Date (or such later
date as shall be reasonably required to permit Seller or its agents to complete such restoration, as
estimated by the Qualified Firm), which estimate shall be provided to Purchaser not later than
thirty (30) days after the Casualty Notice is received by Purchaser) and to a pre-Casualty Loss
condition, any such damage, loss or destruction to the Purchased Assets. Notwithstanding the
foregoing, in the event that the time to complete the restoration, as estimated by the Qualified
Firm, would be reasonably likely to result in the Closing occurring later than the Restoration
Outside Date, Purchaser may, in its sole discretion, within fifteen (15) days after receipt of such
estimations, either (x) terminate this Agreement, or (y) receive a Casualty Reduction, provided
that no such reduction shall reduce the Purchase Price below zero.
(d)
In the event that Seller undertakes a restoration following a
Casualty Loss in accordance with this Section 5.6.1 which continues after the Closing, the
Parties agree that Seller, its Affiliates and its and their agents shall have reasonable access, upon
reasonable prior notice to Purchaser, to the Premises and the Facilities during the period in which
such restoration work occurs; provided, however, that (i) any restoration shall be conducted in
such manner as not to interfere unreasonably with the use of the Premises or the other operations
of the Facilities, (ii) Seller shall require each Person conducting or participating in any such
restoration to comply with Purchaser’s procedures relating to safety and security, (c) Seller shall
indemnify Purchaser for any damage to property or persons resulting from any such restoration
that is the result of the negligence or willful misconduct of Seller, its Affiliates or its or their
agents or representatives and is not covered by insurance, and (d) Purchaser shall be entitled to
have one or more representatives present during the course of any such restoration.
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(e)
Except as set forth in this Section 5.6 and ARTICLE VII, in
no event shall a Casualty Loss affect the Closing or be a basis for a claim for indemnification
under ARTICLE VIII or ARTICLE IX of this Agreement or for a claim that a condition to
Closing has not occurred. The Seller shall be entitled to retain any insurance proceeds received
in respect of a Casualty Loss.
Section 5.6.2 Condemnation. If any part of the Purchased Assets (other than the
Premises) becomes subject to or is threatened with any condemnation action, eminent domain
proceeding or other similar action (other than in connection with the PUCN Approval) (each, a
“Condemnation Action”), Seller shall provide Purchaser prompt written notice of the
Condemnation Action and the details thereof. If the Purchased Assets subject to the
Condemnation Action have a Condemnation Value (as defined below), as estimated reasonably
and in good faith by Seller, equal to or less than
, and the Condemnation Action
occurs, the Purchase Price shall be reduced by the Condemnation Value. If the Purchased Assets
subject to the Condemnation Action have a Condemnation Value, as estimated reasonably and in
good faith by Seller, greater than
, Purchaser may, at its sole election, within fifteen
(15) days after receipt of such estimation, either (a) terminate this Agreement, or (b) receive a
reduction in the Purchase Price in an amount equal to the Condemnation Value (but not to an
amount less than zero). For purposes of this Section 5.6.2, “Condemnation Value” means, with
respect to any Purchased Asset, the amount payable (whether by condemnation award or
otherwise) with respect to the Purchased Asset that is subject to a Condemnation Action after the
Effective Date and prior to the Closing. Seller shall be entitled to retain any Condemnation
proceeds or other compensation from a Condemnation Award. If the Condemnation Value
cannot reasonably be estimated as of the Closing and a reduction in the Purchase Price occurs or
has been elected under this Section 5.6.2, for purposes of the Closing, the Purchase Price shall
not be adjusted and the reduction in Purchase Price will be effected by the assignment from
Seller to Purchaser of all right, title and interest in and to the Condemnation Value (including all
rights to contest the amount of, and to collect, the Condemnation Value).
Section 5.7 Interim Reports. In connection with the continuing operation of the
Facilities, Seller shall use commercially reasonable efforts between the Effective Date and
Closing to provide Purchaser copies of periodic operational reports regularly prepared by Seller.
Section 5.8
Update of Seller’s Disclosure Schedule. Prior to Closing, Seller shall
promptly supplement or amend Seller’s Disclosure Schedule previously delivered by Seller, with
respect to any matter existing, occurring or of which it becomes aware after the Effective Date
which, if existing, occurring or known on or before the Effective Date, would have been required
to be set forth or described in Seller’s Disclosure Schedule (each, a “Schedule Update”). Seller
shall deliver any such Schedule Update to Purchaser promptly and, in any event, no later than ten
(10) Business Days after the discovery of any such matter by Seller. Any disclosure in a
Schedule Update shall be deemed to have been disclosed solely for purposes of determining
whether the condition precedent set forth in Section 6.1.1 has been satisfied. If the Closing
occurs, the making of any such disclosure in any such Schedule Update shall be deemed to have
cured the breach of any representation, warranty, covenant or agreement relating to the matter set
forth in the Schedule Update for purposes of Seller’s right to indemnification as set forth in
Section 8.1(a) and Section 8.1(b).
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Section 5.9
No Solicitation of Competing Transaction. After the Effective Date and
prior to Closing, Seller shall not, directly or indirectly, solicit, initiate or participate in
discussions or negotiations with any Person or group (other than Purchaser, any of its Affiliates
or representatives) concerning any proposal to acquire all or a substantial part of the Project.
Seller shall not, and shall cause each Affiliate not to, enter into any agreement with respect to
any such proposal.
Section 5.10
Letter of Credit
Section 5.10.1 Tenor and Stated Amount.
(a)
At the Closing, Seller shall deliver to Purchaser, and, subject to the terms
of this Section 5.10, shall cause to remain outstanding until the Initial LC Stated Expiry Date (as
such date may be extended pursuant to Section 5.10.3), the Letter of Credit.
(b)
The aggregate initial stated amount of the Letter of Credit shall be
(the “Initial LC Stated Amount”).
(c)
The Initial LC Stated Amount shall reduce automatically on the LC
Reduction Date to an aggregate stated amount equal to the lesser of (x) (I)
minus (II) any amount paid for Losses in respect of a
breach of the representation and warranty in Section 9.1(j) plus (III) the value of any Pending
Claims (excluding any Pending Claims for Losses in respect of a breach of the representation
and warranty in Section 9.1(j)), and (y) the undrawn portion of the Letter of Credit immediately
prior to the LC Reduction Date (the “Reduced LC Stated Amount”). Seller shall be entitled to
issue a reduction certificate under the Letter of Credit to reflect such reduction.
Section 5.10.2 Drawings.
(a)
Prior to the LC Reduction Date, the Letter of Credit may be drawn upon
by Purchaser in the event that any Purchaser Indemnified Party is entitled to indemnification for
Losses pursuant to the provisions of ARTICLE VIII or ARTICLE IX as evidenced by either the
written agreement as to such drawing between Seller and Purchaser or the final, non-appealable
decision that Purchaser is entitled to indemnification of a court of competent jurisdiction in
accordance with ARTICLE XI hereof (each, a “Draw Approval”). Purchaser may elect to defer
drawing all or a portion of the amount it is entitled to draw under this Section 5.10.2(a) (such
deferred amount being a “Deferred Claim Amount”). For any Deferred Claim Amount,
Purchaser may draw on the Letter of Credit at any time after the LC Reduction Date in an
amount up to the lesser of (i) the Deferred Claim Amount and (ii) the undrawn amount of the
Letter of Credit at the time of the draw.
(b)
If on the LC Reduction Date one or more Pending Claims remain pending,
then from the LC Reduction Date to the date of the final determination of such Pending Claim
(the “Pending Claim Determination Date”) the Letter of Credit may be drawn upon by Purchaser
in respect of the amount of such Pending Claim in the amount finally determined to be owed by
Seller as evidenced by a Draw Approval.
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(c)
To the extent of any Loss by Purchaser arising from a breach of the
representation and warranty in Section 9.1(j), the Letter of Credit may be drawn upon by
Purchaser in an amount not to exceed
as evidenced by a Draw Approval.
(d)
Notwithstanding anything to the contrary in this Section 5.10, it is the
express intent of the Parties that Purchaser shall have the right (but not the obligation) to make
drawings under the Letter of Credit in respect of all amounts finally determined to be owed by
Seller as evidenced by a Draw Approval, (i) prior to the LC Reduction Date, in an amount up to
and including the Initial LC Stated Amount, less any Deferred Claim Amount, and (ii) as of and
after the LC Reduction Date, in an amount up to and including the Reduced LC Stated Amount.
Section 5.10.3 Extensions and Replacements.
(a)
If on the Initial LC Stated Expiry Date there are unresolved Pending
Claims (other than claims for Losses addressed in Section 5.10.3(b) below), Seller covenants and
agrees that it will provide Purchaser with an extension or replacement of the Letter of Credit with
a stated face amount equal to the lesser of (x) the amount of such Pending Claim and (y) the
undrawn portion of the Letter of Credit immediately prior to such extension or replacement. Any
such extended or replacement Letter of Credit (a “Replacement LC”) shall be issued by an
Acceptable LC Bank on or prior to the 10th Business Day preceding the expiration date of the
Letter of Credit (the “Letter of Credit Expiration Date”).
(b)
If on the Initial LC Stated Expiry Date there is any unresolved claim for
Losses in respect of a breach of the representation and warranty in Section 9.1(j) (an
“Unresolved Sales Tax Claim”), then Seller covenants and agrees that it will provide Purchaser
with an extension or replacement of the Letter of Credit with a stated face amount equal to the
least of (x) the amount of such Unresolved Sales Tax Claim, (y) the undrawn portion of the
Letter of Credit immediately prior to such extension or replacement and (z)
. Any such Replacement LC shall be issued by an
Acceptable LC Bank on or prior to the 10th Business Day preceding the Letter of Credit
Expiration Date.
(c)
If on the Initial LC Stated Expiry Date there is both a Pending Claim and
an Unresolved Sales Tax Claim, then Seller covenants and agrees that it will provide Purchaser
with an extension or replacement of the Letter of Credit with a stated face amount equal to the
least of (x) the amount of such Pending Claim and, without duplication, Unresolved Sales Tax
Claim, (y) the undrawn portion of the Letter of Credit immediately prior to such extension or
replacement and (z)
. Any such
Replacement LC shall be issued by an Acceptable LC Bank on or prior to the 10 Business Day
preceding the Letter of Credit Expiration Date.
Section 5.10.4 Failure to Provide Replacement LC; Conditional Draw; Holdback.
(a)
In the event that the Letter of Credit expires on a date earlier than the
Pending Claim Determination Date and neither the expiry of such Letter of Credit is extended
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nor a Replacement LC is issued on or prior to the Letter of Credit Expiration Date in accordance
with Section 5.10.3(a), then, at any time thereafter, Purchaser shall have the right to draw (a
“Conditional Draw”) the amount then available under the Letter of Credit up to but not
exceeding the amount of such Pending Claim and retain such amount as a holdback (the
“Holdback”) pending final resolution of such Pending Claim. On the Pending Claim
Determination Date, Seller shall be entitled to receive from Purchaser and Purchaser shall pay to
Seller (without deduction or set-off) the amount of the Conditional Draw less the amount that
Purchaser is entitled to retain as evidenced by either the written agreement as to such retention
between Seller and Purchaser or the final, non-appealable decision that Purchaser is entitled to
indemnification of a court of competent jurisdiction in accordance with ARTICLE XI hereof
(each, a “Retention Approval”).
(b)
In the event that the Letter of Credit expires prior to the resolution of any
Unresolved Sales Tax Claim and neither the expiry of such Letter of Credit is extended nor a
Replacement LC is issued on or prior to the Initial LC Stated Expiry Date in accordance with
Section 5.10.3(b), then, at any time thereafter, Purchaser shall have the right to draw the amount
then available under the Letter of Credit up to but not exceeding the lesser of (x) the amount of
such Unresolved Sales Tax Claim and (y)
as a Conditional Draw and retain such amount as Holdback pending final resolution
of such claim. On the date of final resolution of such claim, Seller shall be entitled to receive
from Purchaser and Purchaser shall pay to Seller (without deduction or set-off) the amount of the
Conditional Draw less the amount that Purchaser is entitled to retain as evidenced by a Retention
Approval.
(c)
In the event that the Letter of Credit expires prior to the resolution of both
a Pending Claim and an Unresolved Sales Tax Claim and neither the expiry of such Letter of
Credit is extended nor is a Replacement LC issued on or prior to the Initial LC Stated Expiry
Date in accordance with Section 5.10.3(c), then, at any time thereafter, Purchaser shall have the
right to draw the amount then available under the Letter of Credit up to but not exceeding the
lesser of (x) the amount of such Pending Claim and (without duplication) Unresolved Sales Tax
Claim and (y)
as a Conditional Draw
and retain such amount as Holdback pending final resolution of such claim. On the date of final
resolution of such claim, Seller shall be entitled to receive from Purchaser and Purchaser shall
pay to Seller (without deduction or set-off) the amount of the Conditional Draw less the amount
that Purchaser is entitled to retain as evidenced by a Retention Approval.
Section 5.10.5 Pro Rata Drawings. To the extent that the Purchaser is entitled to
make a drawing on the Letter of Credit in accordance with this Section 5.10, the Purchaser shall
give a drawing notice under each letter of credit for 50% of the amount that it is entitled to draw
in the aggregate.
Section 5.11 Termination of Certain Seller Services. Notwithstanding anything in this
Agreement to the contrary, during the period between the date hereof and Closing, Seller may
take such actions as may be necessary to terminate or sever as to the Facilities (with appropriate
mutual releases) upon the Closing any services provided by Seller or its Affiliates, including any
joint Tax services and joint legal services.
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Section 5.12 Termination of Certain Project Contracts. At the Closing, Seller and
Purchaser, as applicable, shall terminate the Contracts set forth on Schedule 5.12 (each, a
“Terminated Contract”), without any Liability to Purchaser or Seller, or their respective
Affiliates, or the Project.
Section 5.13 Termination of Site Lease; Recordation of Termination. At the Closing,
Seller and Purchaser will terminate the Site Lease, without any Liability to Purchaser, Seller or
the Project, and Purchaser and Seller shall execute, and Seller shall record in the real property
records of the Office of the County Recorder for Clark County, Nevada, the Site Lease
Termination as evidence thereof.
Section 5.14
Mutual Releases; Effect of this Agreement on Rights under PPA and Site
Lease.
(a)
If the Closing occurs, effective upon the Closing, the Parties, on
behalf of themselves and their respective Affiliates and each of their respective directors,
officers, employees, contractors, agents, partners, members, managers, shareholders, successors
and assigns, hereby release and forever discharge each other, and each of their respective past
and present Affiliates, directors, officers, employees, contractors, agents, partners, members,
managers, shareholders, successors and assigns from any and all claims, disputes, demands,
causes of action, suits, costs and expenses and any other Liabilities, whether known or unknown,
of whatever nature, character of description, which the Parties had, now have or may have
relating to the PPA or the Site Lease, or any of the matters which arise out of, have been
asserted, or which could have been asserted in connection with any dispute with respect to the
PPA or the Site Lease, from the beginning of time through the Closing Date. For the avoidance
of doubt, the foregoing release shall not affect any of the Parties’ respective obligations under the
PPA Side Agreement or this Agreement, including with respect to indemnification under
ARTICLE VIII and ARTICLE IX.
(b) If the Closing does not occur, the representations, warranties and
statements made by a Party pursuant to this Agreement shall not be construed to limit any of the
rights of such Party under or pursuant to the PPA or Site Lease.
Section 5.15 Operating Permit Matters. Prior to Closing, Seller shall use commercially
reasonable efforts to revise the NSP Title V Operating Permit (the “Operating Permit”) for the
Facilities to increase the annual sulfur dioxide emissions limit for gas-fired operation to at least
0.89 tons/year. Seller shall not make application to renew the Operating Permit prior to Closing,
without Purchaser’s consent.
ARTICLE VI
CONDITIONS TO CLOSING Section 6.1 Purchaser’s Conditions Precedent.
The obligations of Purchaser
hereunder to execute or deliver the items it is required to deliver pursuant to Section 2.5.1 and to
consummate the Closing are subject to the fulfillment to the reasonable satisfaction of Purchaser,
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at or before the Closing, of each of the following conditions (all or any of which may be waived
in whole or in part by Purchaser in its sole discretion):
Section 6.1.1 Representations and Warranties. Each of the representations and
warranties made by Seller in this Agreement shall be true and correct on and as of the Closing
Date as though made on and as of the Closing Date, except to the extent such representations and
warranties expressly relate to an earlier date (in which case as of such earlier date), except for
failures to be true and correct that would not reasonably be expected to have, in the aggregate, a
Seller Material Adverse Effect.
Section 6.1.2 Performance. Seller shall have performed and complied in all
material respects with the agreements, covenants and obligations required by this Agreement to
be so performed or complied with by Seller at or before the Closing.
Section 6.1.3 Law. There shall not be in effect on the Closing Date any Law
restraining, enjoining or otherwise prohibiting or making illegal the consummation of the
transactions contemplated by this Agreement.
Section 6.1.4 PUCN Approval; FERC Approval. The PUCN Approval and the
FERC Approval shall have been duly obtained, made or given and shall be in full force and
effect, and no adverse action shall have been threatened or instituted in connection therewith.
Section 6.1.5 Deliveries. Seller shall have executed and delivered to Purchaser
the items set forth in Section 2.5.2 of this Agreement.
Section 6.1.6 Transferred Permits. The Transferred Permits required to be
transferred as of the Closing, under applicable Law, shall have been so transferred.
Section 6.1.7 Due Diligence. Purchaser shall have been satisfied, in its sole
discretion, acting reasonably, and by the Due Diligence Cut-Off Date, with the results of its due
diligence investigation of the Purchased Assets as outlined in Section 4.9 of Purchaser’s
Disclosure Schedule.
Section 6.1.8 Terminated Contracts. Each of the Terminated Contracts shall
have been terminated contemporaneously with the Closing, without Liability to Purchaser or the
Project.
Section 6.2 Seller’s Conditions Precedent. The obligations of Seller hereunder to
execute or deliver the items it is required to deliver pursuant to Section 2.5.2 of this Agreement
are subject to the fulfillment, to the reasonable satisfaction of Seller at or before the Closing, of
each of the following conditions (all or any of which may be waived in whole or in part by Seller
in its sole discretion):
Section 6.2.1 Representations and Warranties. Each of the representations and
warranties made by Purchaser in this Agreement shall be true and correct on and as of the
Closing Date as though made on and as of the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date (in which case as of such earlier
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date), except for failures to be true and correct that would not reasonably be expected to have, in
the aggregate, a material adverse effect on Purchaser’s ability to perform its obligations
hereunder.
Section 6.2.2 Performance. Purchaser shall have performed and complied in all
material respects with the agreements, covenants and obligations required by this Agreement to
be so performed or complied with by Purchaser at or before the Closing.
Section 6.2.3 Law. There shall not be in effect on the Closing Date any Law
restraining, enjoining or otherwise prohibiting or making illegal the consummation of the
transactions contemplated by this Agreement.
Section 6.2.4 PUCN Approval; FERC Approval. The PUCN Approval and the
FERC Approval shall have been duly obtained, made or given and shall be in full force and
effect, and no adverse action shall have been threatened or instituted in connection therewith.
Section 6.2.5 Deliveries. Purchaser shall have executed and delivered to Seller
the items set forth in Section 2.5.1 of this Agreement and shall have paid the Purchase Price
Section 6.2.6 Terminated Contracts. Each of the Terminated Contracts shall have
been terminated contemporaneously with the Closing, without Liability to Seller.
ARTICLE VII
TERMINATION
Section 7.1
Termination Prior to Closing. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned:
(a)
at any time before the Closing, by mutual written consent of the Parties;
(b)
at any time before the Closing, by Seller or Purchaser upon notice to the
other Party, in the event that any non-appealable Law becomes effective or final order is issued
restraining, enjoining or otherwise prohibiting or making illegal the consummation of the
transactions contemplated by this Agreement;
(c)
at any time before the Closing, by Purchaser upon notice to Seller in the
event that Purchaser receives notice from the applicable Governmental Authority that the FERC
Approval or the PUCN Approval will not be satisfied or obtained, in each case, in the sole
discretion of Purchaser;
(d)
at any time before the Closing as provided in Section 5.6.1 and Section
5.6.2;
(e)
at any time before the Closing, by Purchaser upon notice to Seller, if (i)
there has been a material breach by Seller of any representation, warranty, covenant or
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agreement contained in this Agreement that was not caused by Purchaser and that would result in
a failure of, or inability of Seller to satisfy, any condition set forth in Section 6.1, (ii) a Schedule
Update is delivered to Purchaser that discloses a Seller Material Adverse Effect has occurred,
which Seller Material Adverse Effect (A) was not caused by a breach by Purchaser of any
provision of this Agreement, (B) would result in a failure of, or inability of Seller to satisfy, any
condition set forth in Section 6.1, and (C) the condition or event giving rise to such Seller
Material Adverse Effect is not remedied within thirty days after Seller’s delivery of such
Schedule Update or, if the Target Approval Date is more than 30 days from such date of
delivery, and the condition or event is capable of cure by the Target Approval Date, then within
such longer period not to exceed the Target Approval Date as may be reasonably necessary for
such condition to be remedied, or (iii) any condition to Seller’s obligations under this Agreement
becomes impossible as a matter of law to satisfy, provided such impossibility was not caused by
a breach hereof by Seller;
(f)
at any time before the Closing, by Seller upon notice to Purchaser, if (i)
there has been a material breach by Purchaser of any representation, warranty, covenant or
agreement contained in this Agreement that was not caused by Seller and that would result in a
failure of, or inability of Purchaser to satisfy, any condition set forth in Section 6.2, (ii) a
Purchaser Material Adverse Effect has occurred, which Purchaser Material Adverse Effect (A)
was not caused by a breach by Seller of any provision of this Agreement, (B) would result in a
failure of, or inability of Purchaser to satisfy, any condition set forth in Section 6.2, and (C) has
not been cured to Seller’s reasonable satisfaction prior to the Target Approval Date, or (iii) any
condition to Purchaser’s obligations under this Agreement becomes impossible as a matter of
law to satisfy, provided such impossibility was not caused by a breach hereof by Purchaser; or
(g)
Except as provided in Section 5.6.1 with respect to the Restoration
Outside Date, at any time following
(the “Outside Date”), by Seller or
Purchaser upon notice to the other Party if the Closing shall not have occurred on or before such
date and such failure to consummate the Closing is not caused by a breach of this Agreement by
the terminating Party.
Section 7.2
Effect of Termination or Breach Prior to Closing.
(a)
If this Agreement is validly terminated pursuant to Section 7.1(a), Section
7.1(b), Section 7.1(c), Section 7.1(d), Section 7.1(e)(iii), Section 7.1(f)(iii) or Section 7.1(g),
there shall be no liability or obligation on the part of Seller or Purchaser (or any of their
respective Related Persons), except that the provisions of Section 3.19 (Brokers — Seller),
Section 4.7 (Brokers — Purchaser), Section 5.3(c) (Purchaser’s Inspection Rights), Section
5.14(b) (Effect of Agreement on Rights under PPA and Site Lease), ARTICLE XI (Dispute
Resolution), ARTICLE XII (Limited Remedies and Damages), Section 13.1 (Notices), Section
13.2 (Payments), Section 13.3 (Entire Agreement), Section 13.4 (Expenses), Section 13.5 (Public
Announcements), Section 13.6 (Confidentiality), Section 13.9 (No Construction Against
Drafting Party), Section 13.10 (No Third Party Beneficiary), Section 13.11 (Headings), Section
13.12 (Invalid Provisions), Section 13.13 (Governing Law), Section 13.14 (No Assignment;
Binding Effect), and this Section 7.2 shall continue to apply following any such termination.
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(b)
If this Agreement is validly terminated pursuant to Section 7.1(e)(i),
Section 7.1(e)(ii), Section 7.1(f)(i) or Section 7.1(f)(ii) by Purchaser or Seller, as applicable, as a
result of a breach by the non-terminating Party, then, subject to Section 12.2 and notwithstanding
any other provision of this Agreement to the contrary, the terminating Party shall be entitled to
all rights and remedies available to it with respect to such breach.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Indemnification by Seller. Subject to the limitations set forth in Section
8.4 (Limitations of Liability), Section 8.5 (Indemnification in Case of Strict Liability), Section
9.4 (Seller’s Tax Indemnification), Section 10.1 (Survival), Section 10.2 (No Other
Representations) and ARTICLE XII (Limited Remedies and Damages) of this Agreement, if the
Closing occurs, Seller agrees to indemnify and hold Purchaser and its Related Persons (each, a
“Purchaser Indemnified Party”), harmless from and against (and to reimburse each Purchaser
Indemnified Party as the same are incurred for) any and all Losses incurred by any Purchaser
Indemnified Party resulting from any of the following:
(a)
any breach of a representation or warranty made by Seller in this
Agreement;
(b)
the breach by Seller of, or default in the performance by Seller of, any
covenant, agreement or obligation to be performed by Seller pursuant to this Agreement or any
of the Ancillary Agreements; or
(c)
the Excluded Assets or the Excluded Liabilities; provided, that any
Purchaser Indemnified Party shall have the right, at such party’s sole discretion, to elect to
pursue recovery for any such Losses under either Section 8.1(a) (with respect to Section 3.16
(Environmental Matters)) or this Section 8.1(c) (with respect to Section 2.1.4(a)(i)-(iii) inclusive
(Excluded Liabilities)) regardless of whether remedies for such Losses may also be available
pursuant to any provision of this Agreement other than the one so elected by Purchaser
Indemnified Party.
Section 8.2 Indemnification by Purchaser. Subject to the limitations set forth in
Section 8.4 (Limitations of Liability), Section 8.5 (Indemnification in Case of Strict Liability),
Section 9.5 (Purchaser’s Tax Indemnification), Section 10.1 (Survival), Section 10.2 (No Other
Representations) and ARTICLE XII (Limited Remedies and Damages) of this Agreement, if the
Closing occurs, Purchaser hereby agrees to indemnify and hold Seller and its Related Persons
(each, a “Seller Indemnified Party”), harmless from and against (and to reimburse each Seller
Indemnified Party as the same are incurred for) any and all Losses incurred by any Seller
Indemnified Party resulting from any of the following:
(a)
any breach of a representation or warranty made by Purchaser in this
Agreement;
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(b)
the breach by Purchaser of, or default in the performance by Purchaser of,
any covenant, agreement or obligation to be performed by Purchaser pursuant to this Agreement
or any of the other agreements or instruments to which Purchaser is a party and which is being
delivered in connection with this Agreement; or
(c)
Section 8.3
the Assumed Liabilities.
Method of Asserting Claims.
Section 8.3.1 Notification of Claims. If any Purchaser Indemnified Party or
Seller Indemnified Party (each, an “Indemnified Party”) asserts that a Party has become
obligated to the Indemnified Party pursuant to this Agreement other than pursuant to ARTICLE
IX (as so obligated, an “Indemnifying Party”), or if any suit, action, investigation, claim or
proceeding is begun, made or instituted as a result of which the Indemnifying Party may become
obligated to the Indemnified Party hereunder, the Indemnified Party shall notify the
Indemnifying Party promptly and shall cooperate with the Indemnifying Party, at the
Indemnifying Party’s expense, to the extent reasonably necessary for the resolution of such claim
or in the defense of such suit, action or proceeding, including making available any information,
documents and things in the possession of the Indemnified Party. Notwithstanding the foregoing
notice requirement, the right to indemnification hereunder shall not be affected by any failure to
give, or delay in giving, notice, unless, and only to the extent that, the rights and remedies of the
Indemnifying Party shall have been prejudiced as a result of such failure or delay. Any assertion
by an Indemnified Party that an Indemnifying Party is liable to the Indemnified Party for
indemnification pursuant to Section 8.1 or Section 8.2 above must be delivered to the
Indemnifying Party prior to the expiration date (if applicable) of the representation, warranty,
covenant or agreement giving rise to such indemnification obligation, as provided in Section
10.1.
Section 8.3.2 Defense of Claims. In fulfilling its obligations under this Section
8.3, after the Indemnifying Party has provided each Indemnified Party with a written notice of its
agreement to indemnify each Indemnified Party under this Section 8.3, as between such
Indemnified Party and the Indemnifying Party, the Indemnifying Party shall have the right to
investigate, defend, settle or otherwise handle, with the aforesaid cooperation, any claim, suit,
action or proceeding brought by a third party in such manner as the Indemnifying Party may
reasonably deem appropriate; provided, that (a) the Indemnifying Party will not consent to any
settlement or entry of judgment imposing any obligations on any Indemnified Parties, other than
financial obligations for which such Person will be indemnified hereunder, unless such Person
has consented in writing to such settlement or judgment (which consent may be given or
withheld in its sole discretion), and (b) the Indemnifying Party will not consent to any settlement
or entry of judgment unless, in connection therewith, the Indemnifying Party obtains a full and
unconditional release of the Indemnified Party from all liability with respect to such suit, action,
investigation, claim or proceeding. Notwithstanding the Indemnifying Party’s election to assume
the defense or investigation of such claim, action or proceeding, the Indemnified Party shall have
the right to employ separate counsel (at its own cost except as provided below) and to reasonably
participate in the defense or investigation of such claim, action or proceeding, which
participation shall be at the expense of the Indemnifying Party, (a) if on the advice of counsel to
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the Indemnified Party use of counsel of the Indemnifying Party’s choice could reasonably be
expected to give rise to a material conflict of interest, (b) if the Indemnifying Party shall
authorize the Indemnified Party to employ separate counsel at the Indemnifying Party’s expense,
or (c) if separate counsel is retained to represent the Indemnifying Party in any action which
seeks relief other than monetary damages against the Indemnified Party to the extent such
representation is related to such relief.
Section 8.4
Limitations of Liability.
Section 8.4.1 Claim Threshold. Notwithstanding anything to the contrary
contained in this Agreement, (a) Seller shall have no liability for its obligations under Section 8.1
until the aggregate amount of all Losses incurred by the Purchaser Indemnified Parties
(excluding in respect of the Purchaser Exceptions) equals or exceeds
(the “Claim
Threshold”), in which event Seller shall become liable for the aggregate Losses under Section
8.1, and not just amounts in excess of the Claim Threshold; it being understood and agreed that
the Claim Threshold shall not apply in the event of fraud, willful misconduct or to claims for
indemnification relating to Excluded Liabilities under Section 2.1.4(a)(i), (v) and (vii), Excluded
Assets, Section 2.2 (Purchase Price), Section 3.1 (Existence), Section 3.2 (Authority), Section
3.3 (Binding Agreement), Section 3.19 (Brokers), or ARTICLE IX (Tax Matters) (collectively,
the “Purchaser Exceptions”), in each case for which Seller shall become liable for all such
Losses, whether or not the Claim Threshold has been reached (and the amount of such Losses
shall not be counted toward the Claim Threshold), and (b) Purchaser shall have no liability for its
obligations under Section 8.2 until the aggregate amount of all Losses incurred by Seller’s
Indemnified Parties (excluding in respect of the Seller Exceptions) equals or exceeds the Claim
Threshold, in which event Purchaser shall become liable for the aggregate Losses under Section
8.1, and not just amounts in excess of the Claim Threshold; it being understood and agreed that
the foregoing Claim Threshold shall not apply in the event of fraud, willful misconduct or to
claims for indemnification relating to Assumed Liabilities, Section 2.2 (Purchase Price), Section
4.1 (Existence), Section 4.2 (Authority), Section 4.3 (Binding Agreement), Section 4.7 (Brokers)
or ARTICLE IX (Tax Matters) (collectively, the “Seller Exceptions”), in each case for which
Purchaser shall become liable for all such Losses, whether or not the Claim Threshold has been
reached (and the amount of such Losses shall not be counted toward the Claim Threshold).
Section 8.4.2 Cap Amount. In no event shall (a) Seller’s aggregate liability
arising out of their indemnification obligations under Section 8.1 or otherwise in any respect of
or relating to this Agreement, exceed
; it being understood and agreed that the foregoing limitation shall not apply in the
event of fraud or willful misconduct committed by Seller or its Related Persons, or to claims for
indemnification relating to the Purchaser Exceptions or to any claim under Section 2.1.1
(Purchase and Sale), Section 3.9 (Title to Purchased Assets), or Section 12.3 (Specific
Performance), provided that any such excluded indemnifiable Losses shall not be deemed to
count against or otherwise reduce such limitation on Seller’s aggregate liability, and provided,
further, that, except with respect to fraud or willful misconduct committed by Seller or its
Related Persons, all claims for indemnification under Section 8.1 or otherwise in any respect of
or relating to this Agreement shall not, under any circumstances, in the aggregate, exceed the
Purchase Price; and (b) Purchaser’s aggregate liability arising out of its indemnification
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obligations under Section 8.2 exceed
;
it being understood and agreed that the foregoing limitation shall not apply in the event of fraud
or willful misconduct committed by Purchaser or its Related Persons, or to claims for
indemnification relating to the Seller Exceptions or to any claim under Section 12.3 (Specific
Performance), provided that any such excluded indemnifiable Losses shall not be deemed to
count against or otherwise reduce such limitation on Purchaser’s aggregate liability, and
provided, further, that, except with respect to fraud or willful misconduct committed by
Purchaser or its Related Persons, all claims for indemnification pursuant to Section 8.2 or
otherwise in any respect of or relating to this Agreement shall not, under any circumstances, in
the aggregate, exceed the Purchase Price.
Section 8.4.3 Effect of Purchaser’s Knowledge. A Purchaser Indemnified
Party’s right to indemnification, payment, reimbursement or other remedy based on a breach by
Seller of any of its representations, warranties, covenants or obligations hereunder shall be
deemed waived to the extent that Seller can reasonably demonstrate that Purchaser had actual
knowledge of such breach or the facts, circumstances or conditions giving rise to such breach
prior to the Effective Date or, in the case of a Schedule Update, that Purchaser had actual
knowledge of such breach or the facts, circumstances or conditions giving rise to such breach
prior to the Closing Date and the Closing occurs notwithstanding such breach. For purposes of
demonstrating Purchaser’s “actual knowledge” in accordance with the preceding sentence,
Purchaser shall be deemed to have “actual knowledge” of a breach if such breach, or the facts,
circumstances or conditions giving rise to such breach, is or are reasonably apparent from the
materials (i) made available in writing to Purchaser or contained within the folders to which
Purchaser has been granted access in the electronic data room established by Seller, in each case,
between March 14, 2014 and April 15, 2014, inclusive, and as determined by Purchaser’s
contemporaneously dated documentation, or (ii) pursuant to any Schedule Update. For the
avoidance of doubt, Purchaser shall not be deemed to have “actual knowledge” of a breach or the
facts, circumstances or conditions giving rise to a breach based on materials provided to
Purchaser, in any form, prior to March 14, 2014.
Section 8.5 Indemnification in Case of Strict Liability. THE INDEMNIFICATION
PROVISIONS IN THIS ARTICLE VIII AND ARTICLE IX SHALL BE ENFORCEABLE IN
ACCORDANCE WITH THEIR EXPRESS TERMS REGARDLESS OF WHETHER THE
LIABILITY IS BASED ON PAST, PRESENT OR FUTURE ACTS, CLAIMS OR LAWS
(INCLUDING ANY PAST, PRESENT OR FUTURE ENVIRONMENTAL LAW,
FRAUDULENT TRANSFER ACT, OCCUPATIONAL SAFETY AND HEALTH LAW OR
PRODUCTS LIABILITY, SECURITIES OR OTHER LAW), AND REGARDLESS OF
WHETHER ANY PERSON (INCLUDING THE PERSON FROM WHOM
INDEMNIFICATION IS SOUGHT) ALLEGES OR PROVES THE SOLE, JOINT, OR
CONCURRENT STRICT LIABILITY IMPOSED ON THE PERSON SEEKING
INDEMNIFICATION.
Section 8.6 Determination of Losses. For purposes of this ARTICLE VIII and
ARTICLE IX, the amount of Losses arising out of any inaccuracy in or breach of any
representations or warranties of Seller or Purchaser in ARTICLE III (other than Section 3.6),
ARTICLE IV or ARTICLE IX for which Seller or Purchaser is entitled to indemnification under
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this ARTICLE VIII and ARTICLE IX shall be calculated as if the terms “material” and
“Material Adverse Effect” (and variations thereof) were omitted from such representations and
warranties.
ARTICLE IX
TAX MATTERS Section 9.1 Representations and Warranties. Seller represents and warrants to
Purchaser, except as set forth in Section 9.1 of Seller’s Disclosure Schedule, that:
(a)
(i) Seller has timely filed or will timely file when due with the proper
Taxing Authority all Tax Returns that are required to be filed by Seller on or before the Closing
Date (including all Tax Returns with respect to the Purchased Assets) and has timely paid or will
timely pay in full all Taxes (whether or not due on such Tax Returns) required to be paid by
Seller for any Pre-Closing Tax Period (including all Taxes with respect to the Purchased Assets
except for Property Taxes that are the responsibility of Purchaser pursuant to Section 9.3) and
(ii) such Tax Returns were prepared or will be prepared in the manner required by applicable
Law and were or will be true and complete in all material respects at the time of filing. With
respect to the Purchased Assets, Seller has not received any written notice that any Taxes relating
to any Pre-Closing Tax Period are owing or delinquent that have not been paid.
(b)
Seller has withheld and paid all Taxes required to have been withheld and
paid by Seller (with respect to the Purchased Assets) in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder, or other third party.
(c)
There is no dispute or claim concerning any Tax liability of Seller or with
respect to the Purchased Assets either (A) claimed or raised by any Taxing Authority in writing
or (B) as to which any of the equity holders, directors and officers (and employees responsible
for Tax matters) of Seller has Knowledge based upon personal contact with any agent of such
Taxing Authority.
(d)
Seller is not a party to any Tax allocation or sharing agreement.
(e)
Seller (A) has not been a member of an affiliated group filing a
consolidated US federal income Tax Return, and (B) does not have any Liability for the Taxes of
any Person (other than Seller) under IRS Regulation Section 1.1502-6 (or any similar provision
of applicable Law), as a transferee or successor, by contract, or otherwise.
(f)
Since the date of its inception, Seller has been treated as a disregarded
entity for United States federal income Tax purposes.
(g)
Seller has not extended or waived the application of any statute of
limitations of any jurisdiction regarding the assessment or collection of any Tax with respect to
the Purchased Assets.
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(h)
Seller, with respect to the Purchased Assets, is not a party to any joint
venture, partnership or other arrangement or contract which is or has been qualified as, and
treated as, a partnership for United States federal and state income Tax purposes.
(i)
No claim has ever been made in writing by a Taxing Authority in a
jurisdiction where a Tax Return is not filed by, or with respect to, Seller or the Purchased Assets,
that either Seller (with respect to the Purchased Assets) or any of the Purchased Assets is or may
be subject to Tax in that jurisdiction.
(j)
No Sales Taxes will be due in connection with, or arising from, the sale of
the Purchased Assets by Seller pursuant to this Agreement.
Section 9.2 Transfer Taxes.
Seller shall, if applicable, file all necessary
documentation and Tax Returns with respect to any Transfer Taxes due in connection with the
sale to Purchaser of the Purchased Assets and cause such Taxes, if any, to be paid to the relevant
Taxing Authorities on a timely basis. The Parties shall cooperate to comply with all Tax Return
requirements for any and all Transfer Taxes and shall provide such documentation and take such
other reasonable actions as may be necessary to minimize the amount of any Transfer Taxes.
Section 9.3
Property Taxes. Real and personal property ad valorem taxes with respect
to the Purchased Assets (“Property Taxes”) for the Overlap Period shall be prorated on a daily
basis to the Closing Date. Seller shall be liable only for the portion of such Property Taxes
attributable to the portion of such Overlap Period ending on the Closing Date. Following the
Closing, Seller and Purchaser shall cooperate and consult with each other with respect to the
determination of such Property Taxes and Seller shall have the right to participate (at their own
expense) in any proceedings or disputes with the applicable Taxing Authority concerning the
determination of the amount of such Property Taxes (including the determination of the value of
the property with respect to which such Property Taxes are assessed).
Section 9.4 Seller’s Tax Indemnification. Seller shall indemnify and hold harmless
Purchaser from and against (a) any and all Seller Income Taxes, (b) any and all Taxes (other than
Seller Income Taxes) imposed on or with respect to the Purchased Assets or Seller attributable to
any Pre-Closing Tax Period (“Pre-Closing Taxes”), and (c) without duplication of any amount
that may be recovered under any other clause of this Section 9.4, any Taxes arising from a
breach by Seller of its representations, warranties and covenants in this ARTICLE IX. For
purposes of determining the amount of Taxes attributable to the period deemed to end on the
Closing Date for an Overlap Period: (x) Property Taxes shall be apportioned in accordance with
Section 9.3, (y) in the case of Taxes (other than Property Taxes) imposed on a periodic basis,
such amount shall be equal to the product of such Taxes for the entire period (or, in the case of
such Taxes determined on an arrears basis, the amount of such Taxes for the immediately
preceding period), multiplied by a fraction the numerator of which is the number of days in the
Pre-Closing Tax Period and the denominator of which is the number of days in the entire taxable
period; and (z) in the case of all other Taxes, shall be the amount of such Taxes that would be
payable if the taxable year ended on the Closing Date. Notwithstanding anything to the contrary
in this Agreement, no claim for Taxes shall be permitted under this ARTICLE IX unless such
claim is first made not later than ninety (90) days after the expiration of the applicable statute of
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limitations (including extensions or waivers) with respect to such Taxes and Purchaser has
complied with its obligations under Section 9.7, provided that failure of Purchaser to comply
with its obligations under Section 9.7 shall not prevent a claim for Tax indemnification under
this Section 9.4 to the extent that Seller’s ability to contest any such Tax was not adversely
affected by such failure. For the avoidance of doubt, the limitations of liability contained in
Section 8.4 shall not apply with respect to any indemnification claim under this Section 9.4.
Section 9.5
Purchaser Tax Indemnification. Purchaser shall indemnify and hold
harmless Seller from and against (a) any Taxes with respect to the Purchased Assets attributable
to the time period after the Closing Date, and (b) any Liability arising from a breach by
Purchaser of its covenants set forth in this ARTICLE IX.
Section 9.6 Refunds. If, after the Closing Date, Purchaser actually receives a refund
or actually utilizes a credit of any Tax attributable to a Pre-Closing Tax Period or paid by Seller
pursuant to a Tax claim under Section 9.4, Purchaser shall pay to Seller within fifteen
(15) Business Days after such receipt or utilization an amount equal to such refund actually
received or credit actually utilized (with respect to any Overlap Period, only so much of such
refund or credit as relates to the portion of the taxable period ending on or before Closing Date),
together with any interest actually received or actually credited thereon. Purchaser shall take
such action to obtain a refund or credit attributable to a Pre-Closing Tax Period or to mitigate,
reduce or eliminate any Taxes that could be imposed for a Pre-Closing Tax Period (including
with respect to the transactions contemplated hereby) as is reasonably requested by Seller. Seller
shall reimburse Purchaser for any reasonable, out-of-pocket costs that are incurred by Purchaser
in providing such assistance.
Section 9.7 Contests. In the event Purchaser or Seller receives written notice of any
examination, claim, settlement, proposed adjustment, administrative or judicial proceeding or
other matter (“Tax Claim”) related to any Pre-Closing Taxes (other than entity-level Taxes, such
as employment or wage Taxes or sales Taxes that are not material in amount) or Transfer Taxes,
Purchaser or Seller, as the case may be, shall notify the other Parties in writing as soon as
reasonably practical (but in no event more than fifteen (15) Business Days) after receipt of such
notice. In the case of any Tax Claim relating to any Pre-Closing Taxes that, if determined
adversely to Seller would be grounds for a claim for indemnity pursuant to Section 9.4 hereof,
Seller (at its sole cost and expense) shall have the right to control the conduct of such Tax Claim
and shall have the right to settle such Tax Claim; provided, however, that (a) Purchaser may
participate in the dispute of such Tax Claim at its own expense, (b) Seller shall not settle,
compromise or dispose of any Tax Claim in a manner that would reasonably be expected to
adversely affect Purchaser (or any of its Affiliates) without the consent of Purchaser, which
consent shall not be unreasonably withheld, conditioned or delayed, and (c) Seller shall keep
Purchaser reasonably informed with respect to the commencement, status and nature of any such
Tax Claim. In the case of any Tax Claim relating to any Overlap Period Taxes, Purchaser and
Seller may each participate, at their own expense, in the Tax Claim, and the Tax Claim shall be
controlled by Purchaser or Seller according to whichever would bear the burden of the greatest
portion of the adjustment; provided, however, that the Party controlling the Overlap Period Tax
Claim (1) shall not settle such Tax Claim without the consent of each other Party, which consent
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shall not be unreasonably withheld, conditioned or delayed, and (2) shall keep each other Party
timely informed with respect to the commencement, status and nature of any such Tax Claim.
Section 9.8 Assistance and Cooperation. After the Closing Date, each of Seller and
Purchaser shall (and shall cause their respective Affiliates to) (a) assist the other Party in
preparing any Tax Returns which such other Party is responsible for preparing and filing in
accordance with the terms of this Agreement, and (b) cooperate fully in preparing for any audits
of, or disputes with any Taxing Authority regarding, any Tax Returns of Seller with respect to
the Purchased Assets.
Section 9.9 Information. After the Closing, Seller and Purchaser will make available
to each other as reasonably requested all information, records or documents relating to liability
or potential liability for Pre-Closing Taxes, Overlap Period Taxes and Transfer Taxes and will
preserve such information, records or documents until thirty (30) days after the expiration of the
applicable statute of limitations (including extensions or waivers thereof) with respect to the
particular Tax to which the information, records or documents relate.
Section 9.10 Tax Returns. Seller shall be responsible for preparing and timely filing all
Tax Returns with respect to the Purchased Assets relating to Pre-Closing Tax Periods with the
appropriate Taxing Authority. Purchaser shall be responsible for preparing and timely filing all
other Tax Returns with respect to the Purchased Assets.
Section 9.11 Survival of Obligations. The representations, warranties and obligations
of the Parties set forth in this ARTICLE IX shall remain in effect until ninety (90) days after
expiration of the applicable statutes of limitation (giving effect to any extensions or waivers
thereof) relating to the Tax or Tax Return in question.
Section 9.12 Adjustments to Purchase Price. The Parties hereby agree that any and all
indemnity payments made pursuant to this Agreement shall, to the maximum extent permitted by
applicable Law, be treated for all Tax purposes as an adjustment to the Purchase Price.
ARTICLE X
SURVIVAL; NO OTHER REPRESENTATIONS
Section 10.1 Survival of Representations, Warranties, Covenants and Agreements. The
representations, warranties, covenants and agreements of Seller and Purchaser contained in this
Agreement shall survive the Closing and shall expire
from the Closing Date.
Notwithstanding the preceding sentence, (a) (i) the representations and warranties contained in
Section 3.1 (Existence), Section 3.2 (Authority), Section 3.9 (Title to Purchased Assets), Section
3.3 (Binding Agreement), Section 3.16 (Environmental Matters), Section 3.18 (Employee
Matters), Section 3.19 (Brokers), Section 4.1 (Existence), Section 4.2 (Authority), Section 4.3
(Binding Agreement) and Section 4.7 (Brokers), and (ii) the covenants in Section 2.1.2
(Assignment and Assumption of Assigned Facilities Agreements), Section 2.1.3 (Excluded
Assets), Section 2.1.4(a) (Excluded Liabilities), Section 2.1.4(b) (Assumed Liabilities),
ARTICLE X (Survival, No Other Representations), ARTICLE XI (Dispute Resolution) and
ARTICLE XII (Limited Remedies and Damages), shall survive until
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(giving effect to any extensions or waivers
thereof, as applicable), (b) Section 2.6.2(b) (Pre-Closing Books and Records) with respect to
Retained Information, shall survive for so long as Seller retains the Retained Information but in
no case less than
following the Closing, (c) the survival of
representations, warranties, covenants and agreements contained in ARTICLE IX (Tax Matters)
and Section 13.6 (Confidentiality) shall be governed solely by the terms therein, and
(d) ARTICLE VIII (Indemnification) shall survive the Closing in accordance with its terms.
Section 10.2 No Other Representations.
(a)
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE
CONTRARY, IT IS THE EXPLICIT INTENT OF EACH PARTY HERETO, AND THE
PARTIES HEREBY AGREE, THAT NONE OF THE PARTIES OR ANY OF THEIR
AFFILIATES OR REPRESENTATIVES HAS MADE OR IS MAKING ANY
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED,
WRITTEN OR ORAL, INCLUDING ANY IMPLIED REPRESENTATION OR WARRANTY
INCLUDING AS TO THE CONDITION, MERCHANTABILITY, USAGE, SUITABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO ANY OF THE
PURCHASED ASSETS, OR ANY PART THEREOF, EXCEPT THOSE EXPRESS
REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE III, ARTICLE IV
AND ARTICLE IX, RESPECTIVELY. IN PARTICULAR, AND WITHOUT IN ANY WAY
LIMITING THE FOREGOING, (i) SELLER MAKES NO REPRESENTATION OR
WARRANTY REGARDING ANY ENVIRONMENTAL MATTERS EXCEPT AS
EXPRESSLY SET FORTH IN SECTION 3.16, (ii) SELLER MAKES NO
REPRESENTATION OR WARRANTY TO PURCHASER WITH RESPECT TO THE
PROSPECTS, ANY FINANCIAL PROJECTIONS OR FORECASTS RELATING TO THE
PURCHASED ASSETS, AND (iii) SELLER MAKES NO REPRESENTATION OR
WARRANTY TO PURCHASER WITH RESPECT TO INFORMATION PROVIDED TO
PURCHASER IN RESPONSE TO QUESTIONS PRESENTED BY PURCHASER OR OTHER
INFORMATION PROVIDED TO PURCHASER RELATING TO THE PURCHASED
ASSETS; PROVIDED, THAT THIS SENTENCE SHALL NOT LIMIT THE EXPRESS
REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE III AND ARTICLE
IX.
(b)
EXCEPT FOR THOSE EXPRESS REPRESENTATIONS AND
WARRANTIES CONTAINED IN ARTICLE III AND ARTICLE IX, THE PURCHASED
ASSETS ARE BEING TRANSFERRED “AS IS, WHERE IS, WITH ALL FAULTS.”
(c)
Notwithstanding anything to the contrary contained in this Agreement, and
except in connection with the Letter of Credit, no Related Person of Seller will have any personal
liability to Purchaser or any other Person as a result of this Agreement or the breach of any
representation, warranty, covenant or agreement of Seller contained in this Agreement and no
Related Person of Purchaser will have any personal liability to Seller or any other Person as a
result of this Agreement or the breach of any representation, warranty, covenant or agreement of
Purchaser contained in this Agreement.
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ARTICLE XI
DISPUTE RESOLUTION Section 11.1 Dispute Resolution. Any dispute or claim arising under this Agreement
which is not resolved in the ordinary course of business shall be referred to a panel consisting of
a senior executive (President or a Vice President) of each of Purchaser and Seller, with authority
to decide or resolve the matter in dispute, for review and resolution. Such senior executives shall
meet and in good faith attempt to resolve the dispute within thirty (30) days. If the Parties are
unable to resolve a dispute pursuant to this Section 11.1, such dispute shall be resolved in
accordance with Section 11.2.
Section 11.2 Jurisdiction; Venue. Each of the Parties hereby irrevocably and
unconditionally submits to the exclusive jurisdiction of any court of the State of New York and
any federal court located in the Borough of Manhattan, New York, New York (or if no such
court will accept jurisdiction, in any state or federal court of general jurisdiction in the State of
New York, or if no such court will accept jurisdiction, in any court of competent jurisdiction in
the United States) with respect to any proceeding relating to this Agreement. Further, each of the
Parties hereby irrevocably and unconditionally waives any objection or defense that it may have
based on improper venue or forum non conveniens to the conduct of any such proceeding in any
such courts. The Parties agree that any or all of them may file a copy of this paragraph with any
court as written evidence of the knowing, voluntary and bargained agreement among the Parties
irrevocably to waive any objections to venue or to convenience of forum. Each of the Parties (on
behalf of itself and its Affiliates) agrees that a final judgment in any such action or proceeding
will be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by applicable Law.
Section 11.3 Waiver of Trial by Jury. TO THE FULLEST EXTENT PERMITTED BY
LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY
FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY
TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED.
ARTICLE XII
LIMITED REMEDIES AND DAMAGES
Section 12.1 Exclusive Remedies. EXCEPT FOR CLAIMS ARISING UNDER
ARTICLE II AND SECTION 5.6 RELATED TO PURCHASE PRICE ADJUSTMENTS, AND
CLAIMS FOR FRAUD OR WILLFUL MISCONDUCT WITH RESPECT TO A PARTY IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
THE EXPRESS REMEDIES SET FORTH IN SECTION 7.2(B) AND IN SECTION 12.3, AND
THE INDEMNITIES SET FORTH IN ARTICLE VIII AND ARTICLE IX, ARE THE SOLE
AND EXCLUSIVE REMEDIES FOR A PARTY UNDER OR RELATING TO THIS
AGREEMENT, WHETHER BASED ON STATUTE, IN TORT, COMMON LAW, STRICT
LIABILITY, CONTRACT OR OTHERWISE, AND ALL OTHER REMEDIES OR
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DAMAGES AT LAW OR IN EQUITY ARE HEREBY WAIVED BY EACH PARTY.
NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS ARTICLE XII SHALL
LIMIT ANY PERSON’S RIGHT TO SEEK AND OBTAIN ANY EQUITABLE RELIEF TO
WHICH ANY PERSON SHALL BE ENTITLED, OR TO SEEK ANY REMEDY ON
ACCOUNT OF ANY PERSON’S FRAUDULENT, CRIMINAL OR WILLFUL
MISCONDUCT, OR ANY PERSON’S RIGHT TO SEEK AND OBTAIN EQUITABLE OR
MONETARY RELIEF PRIOR TO CLOSING.
Section 12.2 Limitation of Liability. NOTWITHSTANDING ANY PROVISION OF
THIS AGREEMENT, NO PARTY SHALL, UNDER ANY CIRCUMSTANCES, BE LIABLE
FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR
EXEMPLARY DAMAGES, LOST PROFITS OR LOSS OF REVENUE, WHETHER BY
STATUTE, IN TORT, COMMON LAW, STRICT LIABILITY OR CONTRACT OR
OTHERWISE. THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE
MEASURE OF DAMAGES SHALL BE WITHOUT REGARD TO THE CAUSE OR CAUSES
RELATED THERETO, INCLUDING THE NEGLIGENCE, GROSS NEGLIGENCE, STRICT
LIABILITY OR OTHER FAULT OF ANY PARTY, AND WHETHER LIABILITY IS BASED
ON CONTRACT, TORT, STATUTE, COMMON LAW, STRICT LIABILITY OR
OTHERWISE (“NON-REIMBURSABLE DAMAGES”); PROVIDED, HOWEVER, THAT A
PARTY SHALL BE LIABLE FOR, AND NON-REIMBURSABLE DAMAGES SHALL NOT
INCLUDE, ALL SUCH DAMAGES ARISING FROM THIRD PARTY CLAIMS FOR
WHICH AN INDEMNIFIED PARTY SEEKS INDEMNIFICATION. THIS PROVISION
SHALL SURVIVE ANY TERMINATION, CANCELLATION OR SUSPENSION OF THIS
AGREEMENT.
Section 12.3 Specific Performance. EACH PARTY AGREES THAT DAMAGE
REMEDIES SET FORTH IN THIS AGREEMENT MAY BE DIFFICULT OR IMPOSSIBLE
TO CALCULATE OR OTHERWISE INADEQUATE TO PROTECT ITS INTERESTS AND
THAT IRREPARABLE DAMAGE MAY OCCUR IN THE EVENT THAT PROVISIONS OF
THIS AGREEMENT ARE NOT PERFORMED BY THE PARTIES IN ACCORDANCE WITH
THE SPECIFIC TERMS OF THIS AGREEMENT. ANY PARTY MAY SEEK TO REQUIRE
THE PERFORMANCE OF ANY OTHER PARTY’S OBLIGATIONS UNDER THIS
AGREEMENT THROUGH AN ORDER OF SPECIFIC PERFORMANCE RENDERED BY
THE FEDERAL COURT IN THE STATE OF NEVADA OR THE STATE COURTS IN THE
STATE OF NEVADA AS PROVIDED IN SECTION 11.2 OF THIS AGREEMENT.
ARTICLE XIII
MISCELLANEOUS Section 13.1
Notices.
Section 13.1.1 Notice Addresses. Unless this Agreement specifically requires
otherwise, any notice, demand or request provided for in this Agreement, or served, given or
made in connection with it, shall be in writing and shall be deemed properly served, given or
made if delivered in person or sent by fax, by registered or certified mail, postage prepaid, or by
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a nationally recognized overnight courier service that provides a receipt of delivery, in each case,
to a Party at its address specified below:
If to Purchaser, to:
NV Energy
6226 W. Sahara Avenue
Las Vegas, Nevada 89146
Facsimile No.: 702-402-2455
Email: [email protected]
Attn: Vincent Burton, Manager, Energy Supply Contract Management, M/S 26A
with a copy to:
NV Energy
6226 W. Sahara Avenue
Las Vegas, Nevada 89146
Facsimile No.: 702-402-2069
Attn: Douglas A. Cannon, Senior Vice President
General Counsel & Corporate Secretary
Chief Compliance Officer
If to Seller, to:
Nevada Sun-Peak Limited Partnership
Section 13.1.2 Effective Time. Notice given by personal delivery, mail or
overnight courier pursuant to this Section 13.1.2 shall be effective upon physical receipt. Notice
given by fax pursuant to this Section 13.1.2 shall be effective as of (a) the date of confirmed
delivery if delivered before 5:00 p.m. local time on any Business Day, or (b) the next succeeding
Business Day if confirmed delivery is after 5:00 p.m. local time on any Business Day or during
any non-Business Day.
Section 13.2 Payments. Except for Payments due at Closing, if either Party is required
to make any payment under this Agreement on a day other than a Business Day, the date of
payment shall be extended to the next Business Day. In the event a Party does not make any
payment required or approved by the Parties under this Agreement on or before the due date,
interest on the unpaid amount shall be due and paid at the Default Rate from the date such
payment is due until the date such payment is made in full. Any payment of such interest at the
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Default Rate pursuant to this Agreement shall not excuse or cure any default hereunder. All
payments shall first be applied to the payment of accrued but unpaid interest.
Section 13.3 Entire Agreement. This Agreement, the Ancillary Agreements (including
the PPA Side Agreement) and the Confidentiality Agreement, including, in each case, all
schedules and exhibits thereto, supersede all prior discussions and agreements between the
Parties with respect to the subject matter hereof and thereof, and contain the sole and entire
agreement between the Parties hereto with respect to the subject matter hereof and thereof.
Section 13.4 Expenses. Except as otherwise expressly provided in this Agreement,
whether or not the transactions contemplated hereby are consummated, each Party will pay its
own costs and expenses incurred in connection with the negotiation, execution and performance
under this Agreement and the Ancillary Agreements and the transactions contemplated hereby
and thereby.
Section 13.5 Public Announcements. Prior to the Closing, Seller and Purchaser will not
issue or make any press releases or similar public announcements concerning the transactions
contemplated hereby without the written consent of the other. If either Party is unable to obtain
the approval of its press release or similar public statement from the other Party and such press
release or similar public statement is, in the opinion of legal counsel to such Party, required by
Law in order to discharge such Party’s disclosure obligations, then such Party may make or issue
the legally required press release or similar public statement and promptly furnish the other Party
with a copy thereof. Seller and Purchaser will also obtain the other Party’s prior written approval
of any press release to be issued immediately following the execution of this Agreement or the
Closing announcing either the execution of this Agreement or the consummation of the
transactions contemplated by this Agreement.
Section 13.6
Confidentiality.
Section 13.6.1 Maintenance of Confidentiality. Each Party hereto will hold, and
will use commercially reasonable efforts to cause its Related Persons, agents, representatives,
licensees, invitees, lenders, advisors and subcontractors to hold, in strict confidence from any
Person (other than any such Related Persons, agents, representatives, licensees, invitees, lenders,
advisors and subcontractors), unless (a) compelled to disclose by judicial or administrative
process (including in connection with obtaining the necessary approvals of this Agreement and
the transactions contemplated hereby of Governmental Authorities) or by other requirements of
applicable Law or as necessary or desirable to disclose in order to obtain the PUCN Approval or
the FERC Approval or (b) disclosed in an action or proceeding brought by a Party in pursuit of
its rights or in the exercise of its remedies hereunder, all Confidential Information (as such terms
are defined in the Confidentiality Agreement) concerning any other Party or any of its Related
Persons, agents, representatives, licensees, invitees, lenders, advisors and subcontractors
furnished to it by any other Party or such other Party’s Related Persons, agents, representatives,
licensees, invitees, lenders, advisors and subcontractors in connection with this Agreement or the
transactions contemplated hereby and, in the case of Purchaser prior to Closing and Seller after
Closing, any Confidential Information relating to the Purchased Assets, except to the extent that
such Confidential Information can be shown to have been (i) previously known by the Party
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receiving the Confidential Information (the “Receiving Party”), (ii) in the public domain (either
prior to or after the furnishing of the Confidential Information hereunder) through no fault of the
Receiving Party, (iii) later acquired by the Receiving Party from another source if to the
Receiving Party’s knowledge such source is not under an obligation to another Party to keep the
Confidential Information confidential, (iv) not unique to the Purchased Assets or the Facilities
but instead related to the design or construction of one or more types of power plants generally,
without regard to fuel source, configuration or location, or (v) was developed by the Receiving
Party employees, agents or other contractors independently of the Confidential Information.
Section 13.6.2 Termination. In the event this Agreement is terminated, upon the
request of any Party, each other Party will, and will use commercially reasonable efforts to cause
its Related Persons, agents, representatives, licensees, invitees, lenders, advisors and
subcontractors to, promptly (and in no event later than five (5) Business Days after such request)
destroy or cause to be destroyed all copies of confidential documents and information furnished
by the other Party in connection with this Agreement or the transactions contemplated hereby
and destroy or cause to be destroyed all notes, memoranda, summaries, analyses, compilations
and other writings related thereto or based thereon prepared by the Party furnished such
documents and information or its Related Persons, agents, representatives, licensees, invitees,
lenders, advisors and subcontractors. Notwithstanding the foregoing, Receiving Party may retain:
(a) one (1) copy of the Confidential Information in a secure archive file; (b) Confidential
Information to the extent required by its internal records retention policies or Applicable Law;
and (c) electronic copies of Confidential Information that have been created pursuant to
Receiving Party’s regularly generated automatic electronic archiving and back-up procedures;
provided that in either (a) or (b) Receiving Party shall maintain such Evaluation Materials and
Confidential Information in confidence in accordance with the terms of this Agreement even
after expiration of this Agreement
Section 13.6.3 Disclosure. In the event that Purchaser is requested by any
Governmental Authority to disclose any Confidential Information of Seller, Purchaser will use
commercially reasonable efforts to obtain reasonable assurances from the Governmental
Authority that the Confidential Information will be afforded reasonable confidentiality
protections by the Governmental Authority. In the event that Purchaser becomes legally required
(by deposition, interrogatory, request for documents, subpoena, civil investigative demand or
similar process) to disclose any Confidential Information, Purchaser will (to the extent legally
permitted) give Seller prompt written notice of such requirement so that Seller may attempt to
seek a protective order or other assurance that confidential treatment will be accorded to any
portion of the Confidential Information as may be required to be disclosed (and Purchaser will
cooperate reasonably with any efforts by Seller to do so at Seller’s expense to the extent
permitted by applicable Law) or waive compliance with the terms of this Section 13.6.
Section 13.6.4 Survival. The obligations contained in this Section 13.6 shall
survive the Closing or, if this Agreement is terminated pursuant to ARTICLE VII, such
obligations shall survive for one (1) year following the termination of this Agreement. The
obligations in this Section 13.6 shall supersede the provisions of the Confidentiality Agreement.
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Section 13.7
SP-1
Waivers.
Section 13.7.1 Grant of Waivers. Any term or condition of this Agreement may
be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver shall
be effective unless set forth in a written instrument duly executed by or on behalf of the Party
waiving such term or condition. No waiver by any Party of any term or condition of this
Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the
same or any other term or condition of this Agreement on any future occasion. All remedies,
either under this Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.
Section 13.7.2 Exercise of Remedies. No failure or delay of any Party, in any one
or more instances, (a) in exercising any power, right or remedy (other than failure or
unreasonable delay in giving notice of default) under this Agreement or (b) in insisting upon the
strict performance by the other Party of such other Party’s covenants, obligations or agreements
under this Agreement, shall operate as a waiver, discharge or invalidation thereof, nor shall any
single or partial exercise of any such right, power or remedy or insistence on strict performance,
or any abandonment or discontinuance of steps to enforce such a right, power or remedy or to
enforce strict performance, preclude any other or future exercise thereof or insistence thereupon
or the exercise of any other right, power or remedy. Subject to Section 10.1, the covenants,
obligations and agreements of a defaulting Party and the rights and remedies of the other Party
upon a default shall continue and remain in full force and effect with respect to any subsequent
breach, act or omission.
Section 13.8 Amendment. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by both Parties.
Section 13.9 No Construction Against Drafting Party. The language used in this
Agreement is the product of both Parties’ efforts and each Party hereby irrevocably waives the
benefits of any rule of contract construction that disfavors the drafter of a contract or the drafter
of specific words in a contract.
Section 13.10 No Third Party Beneficiary. The terms and provisions of this Agreement
are intended solely for the benefit of each Party hereto and their respective successors or
permitted assigns, and it is not the intention of the Parties to confer third-party beneficiary rights
upon any other Person.
Section 13.11 Headings. The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
Section 13.12 Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future Law, and if the rights or obligations
of any Party hereto under this Agreement will not be materially and adversely affected thereby,
(a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and will not be
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affected by the illegal, invalid or unenforceable provision or by its severance herefrom and
(d) Purchaser and Seller shall negotiate an equitable adjustment in the provisions of the
Agreement with a view toward effecting the purposes of the Agreement, and the validity and
enforceability of the remaining provisions, or portions or applications thereof, shall not be
affected thereby.
Section 13.13 Governing Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL BE GOVERNED BY, ENFORCED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD APPLY
THE LAWS OF ANOTHER JURISDICTION, OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK.
Section 13.14 No Assignment; Binding Effect. Neither this Agreement nor any right,
interest or obligation hereunder may be assigned by any Party hereto without the prior written
consent of the other Party hereto and any attempt to do so will be void, except for assignments
and transfers by operation of Law. This Agreement is binding upon, inures to the benefit of and
is enforceable by the Parties and their respective successors and permitted assigns.
Section 13.15 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which together will constitute
one and the same instrument.
Section 13.16 Time of Essence. Time is of the essence with respect to all obligations of
the Parties hereunder.
[Signature page follows.]
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EXHIBIT A
Form of Letter of Credit
Exhibit A
1
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Exhibit A 2
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Exhibit A 3
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Exhibit A 4
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Exhibit A 5
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Exhibit A 6
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Exhibit A 7
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EXHIBIT B
Form of Bill of Sale
BILL OF SALE
This BILL OF SALE (this “Bill of Sale”) is made and entered into effective as of
[_______], 20[__], by NEVADA SUN-PEAK LIMITED PARTNERSHIP, a Nevada limited
partnership (“Seller”), in favor of and for the benefit of NEVADA POWER COMPANY d/b/a
NV ENERGY, a Nevada corporation (“Purchaser”). Seller and Purchaser are sometimes referred
to herein individually as a “Party” and collectively as the “Parties.” Unless otherwise
specifically defined in this Bill of Sale, capitalized terms used but not defined in this Bill of Sale
shall have the meanings given to such terms in the Asset Purchase Agreement (defined below).
RECITALS
WHEREAS, Seller and Purchaser have entered into an Asset Purchase Agreement dated
as of April 30, 2014 (the “Asset Purchase Agreement”), pursuant to which, among other things,
Seller has agreed to sell, assign and transfer to Purchaser the Purchased Assets, and Purchaser
has agreed to purchase and accept from Seller the Purchased Assets, and to assume the Assumed
Liabilities, on the terms and subject to the conditions set forth in the Asset Purchase Agreement;
and
WHEREAS, the execution and delivery of this Bill of Sale by Seller and Purchaser is a
condition to the obligations of the Parties to complete the transactions contemplated by the Asset
Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual representations,
warranties, covenants and agreements set forth in this Bill of Sale and in the Asset Purchase
Agreement, and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows:
1.
Sale of Assets to Purchaser. Seller hereby sells, assigns, transfers, grants,
conveys and delivers to Purchaser and its successors and assigns forever all of Seller’s right, title
and interest in and to the Purchased Assets on an as is, where is, with all faults, basis and without
representation or warranty of any kind except as expressly set forth in the APA.
2.
Further Assurances. At any time from and after the date of this Bill of Sale, at
either Party’s reasonable request and without further consideration, the other Party shall execute
and deliver to such Party such other instruments of sale, transfer, conveyance, assignment and
confirmation, provide such materials and information, and take such other actions as may be
reasonably required to carry out the provisions of this Bill of Sale and complete and make
effective the transactions contemplated by this Bill of Sale.
3.
Miscellaneous.
(a)
Interpretation. Nothing in this Bill of Sale, whether express or implied, is
intended to or shall be construed to modify, expand or limit in any way the terms of the Asset
Exhibit B
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Purchase Agreement. To the extent that any provision of this instrument conflicts or is
inconsistent with the terms of the Asset Purchase Agreement, the Asset Purchase Agreement will
govern.
(b)
Amendment. This Bill of Sale may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each Party.
(c)
No Third Party Beneficiary. The terms and provisions of this Bill of Sale
are intended solely for the benefit of each Party and their respective successors or permitted
assigns, and it is not the intention of the Parties to confer third-party beneficiary rights upon any
other Person.
(d)
Headings. The headings used in this Bill of Sale have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
(e)
Governing Law. THIS BILL OF SALE AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THE TRANSACTIONS
CONTEMPLATED HEREBY SHALL BE GOVERNED BY, ENFORCED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD APPLY
THE LAWS OF ANOTHER JURISDICTION, OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK.
(f)
Submission to Jurisdiction; Venue. Each of the Parties hereby irrevocably
and unconditionally submits to the exclusive jurisdiction of any court of the State of New York
and any federal court located in the Borough of Manhattan, New York, New York (or if no such
court will accept jurisdiction, in any state or federal court of general jurisdiction in the State of
New York, or if no such court will accept jurisdiction, in any court of competent jurisdiction in
the United States) with respect to any proceeding relating to this Bill of Sale. Further, each of the
Parties hereby irrevocably and unconditionally waives any objection or defense that it may have
based on improper venue or forum non conveniens to the conduct of any such proceeding in any
such courts. The Parties agree that any or all of them may file a copy of this paragraph with any
court as written evidence of the knowing, voluntary and bargained agreement among the Parties
irrevocably to waive any objections to venue or to convenience of forum. Each of the Parties (on
behalf of itself and its Affiliates) agrees that a final judgment in any such action or proceeding
will be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by applicable Law.
(g)
Waiver of Trial by Jury. TO THE FULLEST EXTENT PERMITTED BY
LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY
FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY
TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED.
Exhibit B
2
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(h)
Binding Effect. This Bill of Sale is binding upon, inures to the benefit of
and is enforceable by the Parties and their respective successors and permitted assigns.
(i)
Counterparts. This Assignment may be executed in any number of
counterparts, each of which will be deemed an original, but all of which together will constitute
one and the same instrument.
[Signature page follows.]
Exhibit B
3
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IN WITNESS WHEREOF, each of the Parties has caused this Assignment to be executed by its
duly authorized representative as of the date first above written.
NEVADA SUN-PEAK LIMITED PARTNERSHIP, a
Nevada limited partnership
By: ________________________________
Name: ______________________________
Title: _______________________________
NEVADA POWER COMPANY d/b/a NV ENERGY, a
Nevada corporation
By:
_______________________________ Name:
Title:
Exhibit B
4
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EXHIBIT C
Form of Site Lease Termination
Recording requested by, and when recorded, return to:
Nevada Power Company
6226 W. Sahara Ave.
Las Vegas, NV 89146
(SPACE ABOVE RESERVED FOR RECORDING INFORMATION)
AGREEMENT OF LEASE TERMINATION
This AGREEMENT OF LEASE TERMINATION (this “Termination Agreement”) is
made and entered into as of __________________________, 201__ (the “Effective Date”), by
and between NEVADA POWER COMPANY d/b/a NV ENERGY, a Nevada corporation
(“Lessor”), and NEVADA SUN-PEAK LIMITED PARTNERSHIP, a Nevada limited
partnership (“Lessee”).
RECITALS
A.
Lessor and Lessee are parties to a Site Lease dated March 1, 1991, a
memorandum of which was recorded on March 29, 1998 in the Office of the County Clerk of
Clark County, Nevada (the “Official Records”) at Book 910329, Document No. 00686, which
Site Lease was amended and restated pursuant to an Amended and Restated Site Lease dated
October 29, 1998 between Lessor and Lessee, a memorandum of which was recorded on
December 7, 2000 in the Official Records at Book 20001207, Document No. 01510 (the
“Memorandum”), all as amended by that certain unrecorded Amendment I to Site Lease
Agreement dated April 12, 2007 between Lessor and Lessee (collectively, the “Lease”).
B.
Lessor and Lessee are parties to that certain Asset Purchase Agreement, dated as
of April 30, 2014 (the “Purchase Agreement”), pursuant to which, among other things, Lessee
sold and assigned to Lessor substantially all of the assets used in connection with, and certain
specified liabilities associated with, a dual-fuel simple cycle peaking electric plant located in Las
Vegas, Nevada and known as the Nevada Sun Peak Power Project, all on the terms and subject to
the conditions set forth therein.
C.
The Purchase Agreement requires, as a condition to the closing of the transactions
contemplated therein, the termination of the Lease and the execution and delivery by Lessor and
Lessee of this Agreement.
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D.
Lessor and Lessee now desire to terminate and cancel the Lease, and to execute
and deliver this Termination Agreement as a condition to the closing of the transactions
contemplated by the Purchase Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00), the mutual
covenants and agreements hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties do hereby covenant and
agree as follows:
1.
Termination of Lease.
Effective Date.
The Lease is terminated and has expired as of the
2.
Termination of Easement. Section 2(b) of the Memorandum provides that the
Easement, as defined in the Memorandum, shall terminate concurrently with the expiration or
earlier termination of the Lease. Accordingly, the Easement is terminated as of the Effective
Date.
3.
Release and Surrender. Lessee releases any and all rights and interest of any
nature or kind under the Lease, and the fixtures, equipment, furniture, or other goods or materials
left on the premises granted under the Lease (the “Premises”). This release, however, will not
affect, limit, or otherwise impair Lessee’s obligations to surrender the Premises in the condition
required by the Lease.
4.
Governing Law. This Agreement shall be governed by the laws of the State of
Nevada, without regard to its conflicts of law provisions.
5.
Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW,
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY FURTHER
WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS
BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE
OR HAS NOT BEEN WAIVED.
6.
Counterparts. This Agreement may be executed in any number of counterparts,
each of which will be deemed an original, but all of which together will constitute one and the
same instrument.
(Signatures on the following pages.)
2
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IN WITNESS WHEREOF, this Agreement has been executed by Lessor and Lessee as of
the Effective Date.
LESSOR:
NEVADA POWER COMPANY d/b/a NV ENERGY,
a Nevada corporation
By: ___________________________
Name: _________________________
Title: __________________________
STATE OF ______________________
)
) ss:
CITY/COUNTY OF ___________________)
The foregoing instrument was acknowledged before me on ________________ ____,
2014 by _______________________________, ___________________________ of NEVADA
POWER COMPANY D/B/A NV ENERGY, a Nevada corporation, who is personally known to
me or has provided satisfactory identification, on behalf of the corporation.
My commission expires: _______________________________ Notary Registration No. _____________ [SEAL]
Notary Public
Page 359 of 393
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LESSEE:
NEVADA SUN-PEAK LIMITED PARTNERSHIP, a
Nevada limited partnership
By: ______________________________
Name: ____________________________
Title: _____________________________
STATE OF ______________________
)
) ss:
CITY/COUNTY OF ___________________)
The foregoing instrument was acknowledged before me on ________________ ____,
2014 by _______________________________, as________________ of
___________________, a __________________which is the general partner of NEVADA SUNPEAK LIMITED PARTNERSHIP, a Nevada limited partnership, who is personally known to
me or has provided satisfactory identification, on behalf of the ___________________.
My commission expires: _______________________________ Notary Registration No. _____________ [SEAL]
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7357-49-03
7988-65-08
9989-32-52
Federal
Insurance
Company
Pacific Indemnity
Company
Vigilant
Insurance
Company
Commercial Auto
Umbrella Liability
Pollution Liability
Page 377 of 393
4/1/20144/1/2015
4/1/20144/1/2015
4/1/20144/1/2015
4/1/20144/1/2015
Term
A++ XV
A++ XV
A++ XV
A++ XV
Best’s
Rating
1,000,000
10,000
$
$
Liability symbol 1
UM/UIM symbol 2
Each Occurrence
General Aggregate
Products/Completed Operations
Aggregate Personal & Advertising Injury
Aggregate Damage to Premises Rented to you
Medical Expenses
Excess Coverage Other Aggregate
Umbrella Coverage Aggregate
Products/Completed Operations
Aggregate
Each Occurrence
30 day Discovery
90 day Reporting
Limits:
$ 1,000,000
$ 2,000,000
Deductibles
$
25,000
Each Pollution Incident
Each Pollution Incident
Aggregate
$ 14,000,000
Lesser of 3% or
$
300,000 Crisis Assistance
Limits:
$ 14,000,000
$ 14,000,000
$ 14,000,000
Deductibles- Hired Car Physical Damage: symbol 8
$
1,000 Comprehensive
$
1,000 Collision
Deductibles- Physical Damage symbol 2
$
1,000 Comprehensive
$
1,000 Collision
Limits:
$ 1,000,000
$ 1,000,000
1,000,000
$
Limits:
$ 1,000,000
$ 2,000,000
$ 1,000,000
Coverage
$
$
$
$
5,000
4,554
(Excluding Terrorism)
18,046
(Excluding Terrorism)
4,155
(Excluding Terrorism)
(Excluding Terrorism)
Premium
1
Lockton Companies thanks you for the opportunity to discuss your insurance and risk management program. This summary is a brief overview of that program and is based on the exposure information
you provided. Please refer to the policies for complete terms, conditions, limitations, definitions, and exclusions. Higher limits may be available upon request. Lockton Companies does not guarantee, or
make any representation in regard to, and expressly disclaims responsibility for, the financial condition of insurance companies with which we place business. Any rating information contained in this
document has been obtained by a third-party rating agency, and we do not represent or warrant its accuracy
3597-16-24
Policy
Number
Federal
Insurance
Company
Carrier
Commercial
General Liability
Line of
Coverage
SCHEDULE OF INSURANCE POLICIES
Nevada Sun-Peak LP
REDACTED PUBLIC VERSION
SP-1
Property
Line of
Coverage
Page 378 of 393
PWG 9242889 02
Policy
Number
4/1/20144/1/2015
Term
A+ XV
Best’s
Rating
2,500,000
Policy Limit includes Time Element
Named Storm (Aggregate for Period of
Insurance)
Earthquake Annual Aggregate
Flood Annual Aggregate (Excl. Flood
Zones A&V and Subzones)
Extra Expense (Excludes Replacement
Power)
Contingent Business Interruption
Contingent Extra Expense
Accounts Receivable
Valuable Papers
or 25% of loss whichever is greater as
respects Debris Removal
Errors and Omissions
Demolition and Increased Cost of
Construction
Fine Arts
Miscellaneous Unnamed Locations
Service Interruption
Incidental Course of Construction (Excl.
ALOP/DSU)
Mobile Equipment
All Perils
Gas Turbine Generator Sets
Steam Turbine Generator
Office Locations
Transit
of Property Values of location involved
in the loss at time of loss minimum
$1,000,000
as respects Earthquake
Waiting Periods:
Time Element & Contingent Time Element – 30 day
waiting period except; 45 days as respects Gas & Steam
Turbine Generator Sets
48 Hour Civil Authority
48 Hour Ingress/Egress
72 Hours Service Interruption
$
500,000
Deductibles:
$
250,000
$
500,000
$
500,000
$
25,000
$
100,000
5%
$
500,000
$ 10,000,000
$ 5,000,000
$ 10,000,000
$ 5,000,000
$ 10,000,000
$ 5,000,000
$ 2,500,000
$ 5,000,000
$ 5,000,000
$ 10,000,000
$
$ 20,000,000
$ 50,000,000
Limits:
$ 91,850,454
$ 91,850,454
Coverage
$
(Excluding Terrorism)
230,500.00
Premium
2
Lockton Companies thanks you for the opportunity to discuss your insurance and risk management program. This summary is a brief overview of that program and is based on the exposure information
you provided. Please refer to the policies for complete terms, conditions, limitations, definitions, and exclusions. Higher limits may be available upon request. Lockton Companies does not guarantee, or
make any representation in regard to, and expressly disclaims responsibility for, the financial condition of insurance companies with which we place business. Any rating information contained in this
document has been obtained by a third-party rating agency, and we do not represent or warrant its accuracy
Zurich American
Insurance
Company
Carrier
Nevada Sun-Peak LP
REDACTED PUBLIC VERSION
SP-1
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FINAL PAYMENT AGREEMENT
This FINAL PAYMENT AGREEMENT (this “Agreement”) is made and entered into effective
as of April 30, 2014 (the “Effective Date”), by and among NEVADA SUN-PEAK LIMITED
PARTNERSHIP, a Nevada limited partnership (“Sun-Peak”), and NEVADA POWER
COMPANY d/b/a NV ENERGY, a Nevada corporation (“NVE”). Sun-Peak and NVE are also
each referred to herein as a “Party” and collectively as the “Parties.”
RECITALS
A.
Sun-Peak and NVE are parties to the Amended and Restated Power Purchase
Contract dated as of October 29, 1998 (as amended, supplemented or otherwise modified and in
effect immediately prior to the effectiveness of this Agreement, the “PPA”).
B.
Sun-Peak and NVE are parties to the Asset Purchase Agreement dated as of April
30, 2014 (the “APA”), which provides for, among other things, (x) the sale of the Purchased
Assets (as defined in the APA) by Sun-Peak to NVE, and (y) the termination of the PPA
contemporaneously with the Closing (as defined in the APA).
C.
In connection with the transactions contemplated by the APA, the Parties wish to
provide for final payments under the PPA for which Sun-Peak shall not have been paid as of the
Closing.
AGREEMENT
Now, therefore, in consideration of the premises and the mutual representations, warranties,
covenants and agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:
1.
DEFINITIONS
Capitalized terms used but not defined herein shall have the respective meanings ascribed to such
terms in the APA.
2.
AGREEMENT
(a)
Not later than three (3) Business Days prior to the anticipated date of Closing, Sun-Peak
shall be entitled to deliver a statement of estimated amount due (the “Estimated Final
Invoice”) to NVE for payment as provided under the PPA (such estimate to be calculated
in accordance with the following clause (b)) with respect to (x) any prior full calendar
month to the extent not previously invoiced and (y) any partial month up to, and
including, the Closing Date on a per diem basis (collectively, the “Final PPA Payment”).
(b)
Sun-Peak shall calculate amounts due under the Estimated Final Invoice in accordance
with Section 12 and Exhibits D, F, and K to the PPA, subject only to adjustment to
provide for per diem payment calculations and an estimation of payments up to, and
including, the Closing Date.
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(c)
At Closing NVE shall pay to Sun-Peak the amount set forth in the Estimated Final
Invoice, together with the amount of any other payments previously invoiced by SunPeak under the provisions of the PPA but not yet paid by NVE.
(d)
Not later than ten (10) days after Closing, Sun-Peak shall deliver to NVE a final invoice
(“Final Invoice”) in respect of the Final PPA Payment, which payment amount will be
recalculated for such purposes in accordance with clause (b) above. If such recalculated
Final PPA Payment amount as set forth in the Final Invoice exceeds the amount set forth
in the Estimated Final Invoice, NVE shall pay to Sun-Peak the difference in such
amounts within five (5) Business Days of delivery of such invoice. If the amount set forth
in the Final Invoice is less than that set forth in the Estimated Final Invoice, Sun-Peak
shall reimburse NVE the amount of overpayment within (5) Business Days of delivery of
such invoice.
(e)
Notwithstanding the effectiveness of termination of the PPA in accordance with Section
5.12 of the APA, the Parties’ obligations under Sections 12.4, 12.5 and 13.3 of the PPA
shall remain in effect until ninety (90) days after Closing occurs.
(f)
This Agreement shall be effective as of Closing only if Closing occurs. The Parties agree
that this Agreement constitutes an Ancillary Agreement (as defined in the APA) and shall
be enforceable and, subject to the immediately preceeding sentence, shall be in full force
and effect notwithstanding Section 3.13 of the APA or Section 5.12 of the APA.
3.
DOCUMENTS OTHERWISE UNCHANGED
Except as herein provided, the PPA shall remain unchanged and in full force and effect, and each
reference to the PPA and words of similar import in the PPA, as amended hereby, shall be a
reference to the PPA as amended hereby and as the same may be further amended, supplemented
or otherwise modified and in effect from time to time.
4.
COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which will be deemed
an original, but all of which together will constitute one and the same instrument.
5.
NO ASSIGNMENT; BINDING EFFECT
Neither this Agreement nor any right, interest or obligation hereunder may be assigned by any
Party hereto without the prior written consent of the other Party hereto and any attempt to do so
will be void, except for assignments and transfers by operation of Law. This Agreement is
binding upon, inures to the benefit of and is enforceable by the Parties and their respective
successors and permitted assigns.
6.
GOVERNING LAW
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE
GOVERNED BY, ENFORCED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
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OF THE STATE OF NEVADA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION.
7.
WAIVER OF TRIAL BY JURY
TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT. EACH PARTY FURTHER WAIVES ANY
RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS BEEN
WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS
NOT BEEN WAIVED.
[Signature page follows.]
.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the day and year first above written.
NEVADA SUN-PEAK LIMITED PARTNERSHIP,
a Nevada limited partnership By:
_________________________________ Name:
Title:
NEVADA POWER COMPANY
ENERGY, a Nevada corporation d/b/a
NV
By:
_________________________________ Name:
Title:
[Signature Page to Final Payment Agreement]
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ECONOMIC ANALYSIS
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CONFIDENTIAL MATERIALS
FILED UNDER SEAL
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