A build transfer agreement is a document that transfers ownership of an existing building to the buyer. Both parties should sign the contract, and the contract should contain specific terms and provisions.
These terms include whether the seller will provide all necessary information required for the buyer to obtain a loan. Or if the property will be conveyed free and clear. It's essential to have this document in place before closing on a new home to settle into the new space quickly.
Below is a list of common sections included in Build Transfer Agreements. These sections are linked to the below sample agreement for you to explore.
THIS BUILD TRANSFER AGREEMENT (this “ Agreement ”), dated as of May 1, 2019 (the “ Execution Date ”), is made and entered into by and among NEW MEXICO RENEWABLE ENERGY TRANSMISSION AUTHORITY , a public body of the State of New Mexico, politic and corporate, separate and apart from the state, constituting a governmental instrumentality for the performance of essential public functions (“ RETA Seller ”), WESTERN SPIRIT TRANSMISSION LLC , a Delaware limited liability company (“ WST Seller ”, and together with RETA Seller, the “ Sellers ”, and each, a “ Seller ”) and PUBLIC SERVICE COMPANY OF NEW MEXICO , a New Mexico corporation (“ Buyer ”).
WHEREAS , as of the Execution Date, RETA Seller and WST Seller, as lessee of RETA Seller, are developing an approximately one hundred sixty-five (165) mile 345 kV transmission line, (a) commencing in Santa Fe County, routed south from Buyer’s existing Clines Corners Switching Station through Torrance, Socorro, Valencia and Bernalillo Counties, New Mexico, to (i) an interconnection point in Torrance County, which will be at a new 345 kV switching station, which will be built by WST Seller and known as the Western Spirit Switchyard, interconnecting the transmission line and wind generation project(s) and (ii) an interconnection point at Buyer’s new Pajarito Switching Station in Bernalillo County, interconnecting the transmission line to Buyer’s West Mesa-Sandia 345 kV line, which will be built by Buyer pursuant to the Wires-to-Wires Agreement and is expressly excluded from the definition of “Project” (as is the Pajarito Switching Station, for the avoidance of doubt) and (b) which will include a mid-point series compensation station to be built in Socorro County and known as the Abo Station, which will be built by WST Seller (the foregoing (except as set forth above), collectively, the “ Project ”, as further described on Annex 2 ); and
WHEREAS , on the Closing Date, each Seller desires to sell, and Buyer desires to purchase, the Project and the other Project Assets owned by such Seller, and Buyer desires to assume, and each Seller desires to assign, the Assumed Liabilities held by such Seller, in each case on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements, covenants, representations and warranties set forth herein, and intending to be legally bound hereby, the Parties agree as follows:
DEVELOPMENT AND CONSTRUCTION OF PROJECT
Section 1.1 WST Seller’s Development Obligations . As between Buyer and WST Seller, prior to the Closing Date, WST Seller shall be solely responsible for, and Buyer shall have no obligation or liability or responsibility for costs and expenses with respect to, the development, construction, financing, energization and testing of the Project. WST Seller shall use commercially reasonable efforts to perform or provide, or cause to be performed or provided, all necessary work and services required in connection with the development (which for the
avoidance of doubt includes permitting), construction, financing, energization and testing of the Project through the Closing Date and Buyer shall not have responsibility for such work and services prior to the Closing Date. All such work and services performed by WST Seller shall be performed in accordance with Prudent Utility Practice, the Specifications, the Master Lease Agreement, applicable conditions of the NMPRC Approval and FERC Approvals (including any conditions of the NMPRC Approval or FERC Approvals with respect to timing of construction, interconnection, the specifications of the as-built Project, the Project Site and the prudency of Project Costs) and otherwise in accordance with this Agreement and all applicable Laws and Permits.
Section 1.2 Project Milestones; Corrective Action Plans . (a) Project Milestones .(i) WST Seller shall use commercially reasonable efforts to (x) cause the development, construction, energization and testing of the Project to meet each Project Milestone set forth on the Project Schedule on or prior to the date corresponding thereto on the Project Schedule and (y) cause the EPC Contractors to perform the work pursuant to the applicable EPC Contract in accordance with a schedule that allows the Project Milestones to be achieved in accordance with the Project Schedule. WST Seller shall deliver written notice to Buyer promptly following the date on which any Project Milestone for which WST Seller is responsible has been achieved, together with reasonable supporting evidence thereof.
(ii) Buyer shall deliver written notice to WST Seller within ten (10) Business Days following Buyer’s receipt of WST Seller’s notification of proposed Project Milestone achievement which shall confirm or reject the achievement of the applicable Project Milestone and which in the case of a rejection shall contain reasonable supporting evidence thereof. Buyer shall be deemed to confirm any Project Milestone if it does not send any such written notice within such ten (10) Business Day period.
(iii) Within ten (10) Business Days following receipt of any such written notice from Buyer that rejects a Project Milestone identified in Annex 12 as reviewable by the Independent Engineer, WST Seller shall submit its original written notice and Buyer’s written rejection, along with all reasonable supporting evidence, to the Independent Engineer. The Independent Engineer shall, at the sole cost and expense of WST Seller, review the notices and evidence and determine, based on its professional judgement and all relevant facts (including any facts included by Buyer in its written rejection), whether the applicable Project Milestone has been achieved. Such determination by the Independent Engineer shall be deemed to be agreed to by the Parties and shall become final and binding upon the Parties for all purposes hereunder (with respect to the facts and circumstances at the time of such determination), subject to the exception in Section 1.2(a)(iv) for the determination regarding whether the conditions set forth in clause (a) of the definition of “Commercial Operation” have been satisfied (but in no event shall this provision apply to a determination regarding whether the conditions precedent for achievement of Development Completion Acknowledgement have been
achieved or whether the conditions set forth in clauses (b) through (d) of the definition of “Commercial Operation” have been satisfied).
(iv) Notwithstanding Section 1.2(a)(iii) or anything in this Agreement to the contrary, with respect to determining whether the conditions set forth in clause (a) of the definition of “Commercial Operation” have been satisfied, if Buyer disagrees with the decision of the Independent Engineer issued in accordance with Section 1.2(a)(iii) then Buyer may, within ten (10) Business Days, elect to have an independent engineer selected by Buyer from Section A1-IE of Sellers’ Disclosure Letter (which for the avoidance of doubt is a separate independent engineer than the Independent Engineer) make a determination as to whether the conditions set forth in clause (a) of the definition of “Commercial Operation” have been satisfied. Such independent engineer shall take into account all reasonable supporting evidence presented by WST Seller and Buyer. In the event that Buyer has made the foregoing election in this Section 1.2(a)(iv) , such determination by such independent engineer shall be deemed to be agreed to by the Parties and shall become final and binding upon the Parties for all purposes hereunder (with respect to the facts and circumstances at the time of such determination).
(v) In the event that Buyer has not made the election in Section 1.2(a)(iv) to use a second independent engineer within such ten (10) Business Day period, then the determination by the first Independent Engineer shall be deemed to be agreed to by the Parties and shall be final and binding upon the Parties for all purposes hereunder (with respect to the facts and circumstances at the time of such determination).
(b) Corrective Action Plans .(i) In the event that completion of a particular Project Milestone for which WST Seller is responsible is not achieved by the date set forth on the Project Schedule (other than as a result of a Force Majeure Event or Buyer-Caused Delay), WST Seller shall promptly (and in any event, within ten (10) Business Days) submit to Buyer a proposed Corrective Action Plan, including a revised completion date for such Project Milestone that will allow the Commercial Operation Date to be achieved before the Outside Closing Date. Buyer shall notify WST Seller of its approval (such approval not to be unreasonably withheld, conditioned or delayed) of any such Corrective Action Plan within ten (10) Business Days following Buyer’s receipt of such Corrective Action Plan.
(ii) If Buyer reasonably believes that any Corrective Action Plan proposed by WST Seller is not feasible, Buyer shall send WST Seller a written notice explaining why it believes such Corrective Action Plan is not feasible within ten (10) Business Days following Buyer’s receipt of such Corrective Action Plan. Buyer shall be deemed to accept any Corrective Action Plan if it does not send any such written notice within such ten (10) Business Day period. Within ten (10) Business Days following receipt of any such written notice from Buyer, WST Seller shall submit the Corrective Action Plan to the Independent Engineer. The Independent Engineer shall, at the sole cost and expense of WST Seller, review the Corrective Action Plan and determine whether such Corrective Action Plan proposed by WST Seller is feasible. Such
determination by the Independent Engineer shall be deemed to be agreed to by the Parties and shall become final and binding upon the Parties for all purposes hereunder.
(iii) WST Seller shall implement and diligently comply with any Corrective Action Plan approved by Buyer (or deemed accepted by Buyer) or determined to be feasible by the Independent Engineer.
(c) Termination Right . Notwithstanding any other provisions of this Agreement (but without limiting Section 1.3 ), Buyer shall have the right to terminate this Agreement pursuant to Section 9.1(g) , by delivery of thirty (30) days’ prior written notice thereof to Sellers, in the event that (i) WST Seller fails to achieve one or more Project Milestones for which WST Seller is responsible resulting in a projected Commercial Operation Date beyond the Outside Closing Date and (ii) WST Seller has failed to submit a Corrective Action Plan that has been approved under Section 1.2(b)(i) or 1.2(b)(ii) (including by determination of the Independent Engineer) under which the Commercial Operation Date would be achieved prior to the Outside Closing Date; provided , however , that such notice of termination shall be deemed to have been withdrawn if, prior to the termination date specified therein, the Independent Engineer certifies to Buyer, pursuant to the written request of WST Seller, at the sole cost and expense of WST Seller, that based on the professional judgment of the Independent Engineer and all relevant facts (including WST Seller’s commitment to a Corrective Action Plan and the feasibility thereof), the Commercial Operation Date is reasonably likely to be achieved on or prior to the Outside Closing Date notwithstanding such delay.
Section 1.3 Force Majeure; Buyer-Caused Delays .(a) Effect of Force Majeure and Buyer-Caused Delays . None of Buyer or Sellers shall be considered to be in default in the performance of their respective obligations hereunder, and the date for achievement of any Project Milestone specified on the Project Schedule and the Outside Closing Date shall be extended, to the extent the failure or delay of performance or of satisfaction of such Project Milestone, or to achieve the Closing, respectively, is due to a Force Majeure Event or Buyer-Caused Delay. The non-affected party shall be excused from its corresponding performance obligations to the extent due to the affected party’s failure or delay of performance. Notwithstanding the foregoing, any obligation to make payments accrued prior to the Force Majeure Event or Buyer-Caused Delay shall not be excused. The burden of proof for establishing the existence and consequences of a Force Majeure Event or Buyer-Caused Delay lies with the party initiating the claim.
(b) Notice of Force Majeure and Buyer-Caused Delays . As soon as possible following the occurrence of an event the affected party believes is a Force Majeure Event or Buyer-Caused Delay, the affected party desiring to invoke a Force Majeure Event or a Buyer-Caused Delay as a cause for delay in its performance of, or failure to perform, any obligation hereunder, shall provide the other party written notice describing in detail the Force Majeure Event or Buyer-Caused Delay, as applicable, including the expected duration and effect thereof. Promptly after a notice is given pursuant to the preceding sentence, Buyer and Sellers shall meet in person or telephonically to discuss the basis and terms upon which the arrangements set out in this Agreement shall be continued, taking into account the effects of such Force Majeure Event or Buyer-Caused Delay, as applicable.
(c) Mitigation of Force Majeure and Buyer-Caused Delays . The suspension of performance due to a Force Majeure Event or Buyer-Caused Delay shall be of no greater scope and of no longer duration than is required by the Force Majeure Event or Buyer-Caused Delay, as applicable. The party suffering a Force Majeure Event or Buyer-Caused Delay, as applicable, shall use commercially reasonable efforts to avoid or otherwise mitigate the effects of such Force Majeure Event or Buyer-Caused Delay, as applicable, and to resume normal performance under this Agreement promptly upon the cessation of such Force Majeure Event or Buyer-Caused Delay, as applicable.
(d) Termination for Force Majeure or Buyer-Caused Delay . Notwithstanding any other provisions of this Agreement, (i) Buyer shall have the right to terminate this Agreement pursuant to Section 9.1(g) , by delivery of thirty (30) days’ prior written notice thereof to Sellers prior to the resumption of performance by Sellers, in the event that Sellers’ performance has been impaired or delayed by one or more Force Majeure Events for a period of eighteen (18) consecutive months and (ii) WST Seller shall have the right to terminate this Agreement pursuant to Section 9.1(h) , by delivery of thirty (30) days’ prior written notice thereof to Buyer and RETA Seller, in the event that a Buyer-Caused Delay has impaired or delayed Sellers’ performance for a period of eighteen (18) consecutive months.
Section 1.4 Reporting; Certain Deliverables; Coordination .(a) Monthly Development and Construction Report; Other Reporting Obligations . From the Execution Date until the Commercial Operation Date, on or prior to thirty (30) days following the end of each calendar month, WST Seller shall provide Buyer with a monthly development and construction report for such prior month with respect to the development and construction of the Project, in the form of Annex 4 , which for the avoidance of doubt will include a detailed report with respect to Project Costs WST Seller claims to have incurred in such calendar month, with respect to each Project Milestone and in the aggregate with respect to the Project. Notwithstanding the foregoing obligations of WST Seller in this Section 1.4(a) , from the Execution Date until the Closing Date, WST Seller shall use commercially reasonable efforts to (x) communicate with Buyer regarding the Project’s development and construction on an as-needed basis (which may be more frequently than a monthly basis) in WST Seller’s reasonable discretion, and (y) make available for consultation with Buyer, such representatives as may be necessary to respond to reasonable inquiries of Buyer, in each case, prior to the Closing Date. In addition, from the Execution Date until the Closing Date, WST Seller shall notify Buyer as soon as commercially practicable of any material occurrence related to the development and construction activities of the Project that has resulted in, will result in, or would reasonably be expected to result in (i) a failure of the Project to be developed and constructed in accordance with the Specifications, in accordance with Prudent Utility Practice and in accordance with the requirements of the NMPRC Approval and the FERC Approvals and other requirements of Governmental Entities, (ii) a failure, or any event that could reasonably be expected to result in the failure of the Project to achieve the Commercial Operation Date by the Outside Closing Date, (iii) a material violation or failure of the Project’s or Sellers’ compliance with applicable Laws and Permits or the Master Lease Agreement, (iv) the death, serious bodily injury or significant property damage of any Person, (v) any material claim, demand or action against the Project or either Seller related to the Project and (vi) any
other event that could reasonably be expected to result in a failure of Sellers to satisfy the requirements for Closing set forth in Article VII or a failure to consummate the Transactions.
(b) Notices and Communication . From the Execution Date until the Closing Date, WST Seller or where applicable, RETA Seller, shall promptly post to the Data Room copies of all notices, orders, inspection reports, material correspondence or other material communications, which, in each case, WST Seller or RETA Seller, as applicable, delivers to or receives from any Third Person in connection with the development and construction of the Project, including all material communications from Governmental Entities but excluding in all events any information delivered pursuant to any Excluded Contract or any information described in the definition of Excluded Books and Records.
(c) Monthly Updates . From the Execution Date until the Closing Date, on the fifth (5th) Business Day of each calendar month, WST Seller shall (i) provide Buyer with an update of all items subject to an update of the Sellers’ Disclosure Letter as of the last date of the preceding calendar month, as contemplated to be in effect on the Development Completion Acknowledgement Date or on the Closing Date, as applicable, and (ii) update the Data Room to include items referenced on the corresponding update of the Sellers’ Disclosure Letter.
(d) Reports and Reliance Letters . On the Development Completion Acknowledgement Date, WST Seller shall provide Buyer with a list of all studies and reports related to the Project that are in either Seller’s possession. Buyer shall identify any studies or reports for which it reasonably requires a letter or undertaking from the author of such study or report permitting Buyer to rely on the contents therein. WST Seller shall use commercially reasonably efforts to obtain and deliver any such letter or undertaking to Buyer prior to the Closing Date.
(e) Specifications . The Specifications for the Project, which for the avoidance of doubt include the commissioning and testing procedures and the QA/QC requirements related to the Project, are set forth in Annex 2 . WST Seller and Buyer shall use commercially reasonable efforts to agree on (i) additions to the Specifications where such additional information was not available for inclusion in the Specifications as of the Execution Date, and (ii) modifications to the Specifications to the extent necessary to accommodate the construction and development of the Project and interconnection of the Project with Buyer’s transmission system (in each case, consistent with the Specifications agreed to by the Parties at the Execution Date); provided that WST Seller and Buyer shall agree to any such additions or modifications reasonably requested by the other Party; provided , further , that WST Seller shall not be required to agree to any such additions or modifications proposed by Buyer that would lead to a material increase in Project Costs or be reasonably expected to materially delay the achievement of any Project Milestone. To the extent WST Seller and Buyer agree on any additional or modified specifications for the Project, including any commissioning and testing procedures, such additional specifications shall be deemed to be part of Annex 2 only if an authorized signatory of each of Buyer and WST Seller has executed a document evidencing the relevant Party’s agreement thereto.
(f) Coordination . Within thirty (30) days following the Execution Date, each of Buyer and WST Seller shall designate a representative and two (2) alternative appointees that
shall serve as such Party’s contact for consultation on design and construction activities. At least ninety (90) days prior to each Interconnection Date, WST Seller and Buyer shall use commercially reasonable efforts, consistent with Prudent Utility Practice, to initiate a process to (i) coordinate the installation of required equipment associated with the Project, (ii) complete any necessary switching procedures and operating procedures for the point of interconnection for the new transmission facilities, (iii) develop and finalize detailed energization procedures and (iv) convene a meeting of their designated representatives to finalize operating procedures for interim operational configurations and the final operational configuration.
(g) EPC Contract Certificates . Prior to the Closing Date, WST Seller shall, promptly following WST Seller’s receipt thereof, provide Buyer with the certificates set forth in Annex 14 that are received under any applicable EPC Contract. Provided that WST Seller has acted in accordance with the requirement of Annex 2 , Buyer shall provide WST Seller with any comments with respect to such certification within ten (10) Business Days following Buyer’s receipt of such certificate. WST Seller shall consider in good faith any comments provided by Buyer that relate to any issue which Buyer raises within such ten (10) Business Day period following Buyer’s receipt of such certificate.
(h) Private Letter Ruling; EPC Contracts .(i) WST Seller shall, or shall cause the applicable EPC Contractor(s) to, apply for the Private Letter Ruling within one hundred twenty (120) days following the Execution Date; provided , however , that WST Seller may, or may cause any such applicable EPC Contractor(s), to withdraw the Private Letter Ruling if, after submitting the proposed Private Letter Ruling to, and discussing the proposal with, NMTRD, the NMTRD indicates that it is unlikely to issue the Private Letter Ruling. WST Seller shall, or shall cause the applicable EPC Contractor(s) to, (x) permit Buyer to have reasonable time and opportunity (and in no event less than seven (7) Business Days) to review and comment on the application for the Private Letter Ruling and will consider in good faith the incorporation of any comments reasonably requested by Buyer and (y) provide Buyer the opportunity to participate in any in person meetings and teleconferences that WST Seller and/or such applicable EPC Contractor(s) has with NMTRD in connection with the Private Letter Ruling.
(ii) In the event that WST Seller or the applicable EPC Contractor(s) receive the Private Letter Ruling, WST Seller shall contract with a single EPC Contractor that will act as construction manager, as contracting agent for other EPC Contractors, and as the single point of contact for Buyer relating to all other EPC Contracts following the Closing. WST Seller shall require that such EPC Contractor coordinate the administration of all other EPC Contracts (including the administration of warranty claims thereunder) and take full responsibility for the design of the Project, all warranties related to the Project and all schedule obligations under all other EPC Contracts. WST Seller shall also use commercially reasonable efforts to maximize the transfer of any other risks to such EPC Contractor.
(iii) In the event that WST Seller or the applicable EPC Contractor(s), as applicable, do not receive the Private Letter Ruling (including if it or they withdraw
the Private Letter Ruling in accordance with Section 1.4(h)(i) ), WST Seller may, subject to the definition of “EPC Contract”, contract directly with an unlimited number of EPC Contractors; provided , however , that WST Seller shall contract with a single EPC Contractor that will act as construction manager, with the obligation to coordinate the administration of all other EPC Contracts (including the administration of warranty claims thereunder). Furthermore, such construction manager and one other EPC Contractor shall, between them, take full responsibility for the design of the Project, all warranties related to the Project and all schedule obligations under all other EPC Contracts. WST Seller shall also use commercially reasonable efforts to maximize the transfer of any other risks to such EPC Contractors.
Section 1.5 Development Completion Acknowledgement .(a) WST Seller shall send written notice to Buyer upon satisfaction (or written waiver by Buyer) of the following conditions (other than those conditions that by their nature are to be satisfied on the Development Completion Acknowledgement Date, but subject to the satisfaction or waiver of such conditions):
(i) NMPRC Approval and FERC Approvals . Buyer has received the NMPRC Approval and the FERC Approvals, and the NMPRC Approval and the FERC Approvals are validly issued and in full force and effect.
(ii) Critical Development Work . Sellers shall have performed the following actions related to development of the Project: (1) obtained, or initiated eminent domain proceedings to obtain (with the only unresolved issues outstanding, if any, being the compensation due to the condemnee(s) in connection with such eminent domain proceedings), Real Property sufficient for a contiguous route for the transmission line portion of the Project in accordance with Annex 3 ; (2) obtained all Transferred Permits and Construction Permits necessary to construct the Project (other than any ministerial Permits or Permits reasonably expected to be obtained before such Permit becomes required pursuant to applicable Law and in any event prior to the Closing Date) and the Bernalillo County Approvals; provided that, if the Bernalillo County Approvals have not been obtained, this condition shall be satisfied with respect to the Bernalillo County Approvals unless Buyer has a reasonable belief that the condition set forth in Section 7.1(n) will not be satisfied by the Closing Date, and (3) arranged for debt and equity financing in an amount sufficient to construct the Project (which financing may be subject to receipt of the Development Completion Acknowledgement).
(iii) Representations and Warranties . After giving effect to the Development Completion Disclosure Letter contemplated in Section 6.10 :
(1) each of the Seller Fundamental Representations is true and correct in all respects as of the Development Completion Acknowledgement Date, except to the extent that any such Seller Fundamental Representation (x) has been expressly made only as of an earlier date, in which case such Seller Fundamental Representation was true and correct in all respects as of such earlier date, or (y) will only be made as of the Closing Date; and
(2) each of the representations and warranties (other than the Seller Fundamental Representations and the Eminent Domain Property Representations) of each Seller in this Agreement (without giving effect to any materiality or Material Adverse Effect qualifiers contained therein) is true and correct in all material respects as of the Development Completion Acknowledgement Date, except for representations and warranties (x) which are as of a specific date, which shall be true and accurate as of such date, and (y) which will only be made as of the Closing Date.
(iv) WST Seller has delivered to Buyer a Phase I Environmental Site Assessment (“ ESA ”) for the Project Site, prepared in accordance with either ASTM E1527-13 or ASTM 2247-16 (ESA for Forestland or Rural Property) (and in the case of ASTM 2247-16, such use shall be in accordance with Section 1.1.1 thereof), that is (1) prepared prior to any construction on the Project Site and (2) not objected to in writing by Buyer by the earlier of (x) ten (10) Business Days following receipt of such ESA or (y) the deadline set forth in Section 1.5(b) to respond to a properly-submitted written notice from WST Seller in accordance with this Section 1.5(a) , which objection may only be issued as a result of (A) environmental conditions identified in the ESA at or adjacent to the Project Site that are reasonably likely to pose a risk of Liability (other than an immaterial Liability) or reasonably likely to impair (other than in an immaterial way) the use and operation of the Project Assets or (B) a failure to comply with the appropriate ASTM standard (other than in an immaterial way).
(v) WST Seller has delivered to Buyer each Real Property Agreement in effect as of the Development Completion Acknowledgement Date, and (i) each Real Property Agreement with respect to an easement or right-of-way granted by a private landowner (other than any easement or right-of-way granted to RETA Seller pursuant to a court order following an eminent domain proceeding) shall be substantially in the form of an agreement attached hereto as Annex 15 ; provided that any such Real Property Agreement may include any provision expressly approved by Buyer in writing, and (ii) each Real Property Agreement granted by a Governmental Entity that is required by applicable Law to use a prescribed form, including any easement or right-of-way granted by the New Mexico Commissioner of Public Lands, shall be in such form (unless otherwise agreed by the applicable Governmental Entity).
(vi) WST Seller has provided Buyer with a survey of the Real Property performed in accordance with the Minimum Standards for Surveying in New Mexico (as set forth in 12.8.2.12 NMAC) applicable to an “Easement Survey” (as defined therein) (the “ Survey ”).
(vii) An Affiliate of WST Seller shall have delivered to Buyer a counterpart to each LGIA, duly executed by such Affiliate; provided that, this Section 1.5(a)(vii) shall only be a condition with respect to an LGIA if Buyer has tendered such LGIA to such Affiliate no later than thirty (30) days prior to the expected Development Completion Acknowledgement Date.
(viii) WST Seller shall have delivered to Buyer a counterpart to the Wires-to-Wires Agreement, duly executed by WST Seller; provided that, this Section
1.5(a)(viii) shall only be a condition if Buyer has tendered the Wires-to-Wires Agreement to WST Seller no later than thirty (30) days prior to the expected Development Completion Acknowledgement Date.
(b) Within ten (10) Business Days following receipt of a properly-submitted written notice from WST Seller in accordance with Section 1.5(a) , Buyer shall deliver to WST Seller (i) the Development Completion Acknowledgement (the date on which the Development Completion Acknowledgement is actually delivered being referred to as the “ Development Completion Acknowledgement Date ”) or (ii) if Buyer reasonably believes that the conditions set forth in Section 1.5(a) have not been satisfied, a written notice explaining why Buyer believes such conditions set forth in Section 1.5(a) have not been satisfied.
(c) If Buyer delivers a written notice explaining why it believes such conditions set forth in Section 1.5(a) have not been satisfied, then WST Seller may resubmit a written notice to Buyer in accordance with Section 1.5(a) , and Buyer shall respond to such written notice in accordance with Section 1.5(b) .
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
Section 2.1 Purchase and Sale of the Project Assets . Subject to and upon the terms and conditions contained herein and excluding the Excluded Assets, at the Closing, each Seller shall sell, assign and transfer to Buyer, and Buyer shall purchase, acquire and accept from such Seller, all rights, title and interest of such Seller in and to all of the following properties, assets and rights of any kind, whether real, personal or mixed, tangible or intangible, owned, licensed or otherwise held by such Seller, wherever located (all such properties, assets and rights, collectively, the “ Project Assets ”), free and clear of any Liens other than Permitted Liens:
(a) (i) the Real Property primarily used, or primarily held for use, in, or necessary for, the ownership, operation, maintenance, leasing, development or construction of the Project, all of which is set forth in Sections 3.10(a) and 3.10(c) of Sellers’ Disclosure Letter (but excluding, for the avoidance of doubt, the Eminent Domain Property) and (ii) all Improvements to and on the Real Property and all Improvements to and on the Eminent Domain Property, a preliminary accounting of which is set forth in Annex 13 ;
(b) the machinery, equipment, materials, supplies, fixed assets and other tangible personal property owned or by such Seller which are (i) located at the Project, (ii) in transit to the Project and primarily used, or held primarily for use, in, or necessary for, the ownership, operation, maintenance, leasing, development or construction of the Project or (iii) otherwise primarily used, or held primarily for use, in, or necessary for, the ownership, operation, maintenance, leasing, development or construction of the Project, a preliminary accounting of which is set forth in Annex 13 ;
(c) (i) all Permits of such Seller primarily used, or held primarily for use, in, or necessary for, the ownership, operation, maintenance, leasing, development or construction of the Project by such Seller, all of which are set forth in Section 3.7(b) of Sellers’ Disclosure
Letter (but excluding the Bernalillo County Approvals, collectively, the “ Transferred Permits ”) and (ii) all applications for any such Permits filed on or before the Closing Date by such Seller (the “ Permit Applications ”); provided that in no event shall Permits that were required for the development and/or construction of the Project and will no longer be used, or held for use, in, or necessary for, the ownership, operation, maintenance, leasing, development or construction of the Project from and after the Closing Date (the “ Construction Permits ”) constitute Transferred Permits;
(d) all Contracts of such Seller relating primarily to or necessary for, the ownership, operation, maintenance, leasing, development or construction of the Project, all of which are set forth in Section 3.9(a) of Sellers’ Disclosure Letter (including the Real Property Agreements, but excluding any such Contracts that have expired, terminated, or been substantially performed (with only immaterial obligations remaining outstanding), or which are reasonably expected to have expired, terminated or been substantially performed (with only immaterial obligations remaining outstanding), in each case, in accordance with their respective terms (without any further rights accruing to such Seller (other than any immaterial rights)) on or before the Closing Date and excluding any Excluded Contracts to which WST Seller is a party, collectively, the “ Assigned Contracts ”) and including all original or later issued warranties or ancillary warranties (including warranties provided by Subcontractors and other contractors, manufacturers, suppliers and vendors, and including all workmanship warranties and guaranties) related to such Contracts applicable to the Project or the Project Assets (the “ Assigned Warranties ”);
(e) all Books and Records of such Seller;(f) (i) all Intellectual Property owned by such Seller and primarily used, or held primarily for use, in, or necessary for, the ownership, operation, maintenance, leasing, development or construction of the Project, and (ii) all licenses and other use rights of such Seller to third-party Intellectual Property under Contracts to the extent transferrable pursuant to applicable Law (except to the extent that such Contracts are Assigned Contracts, which are in all cases included in the Project Assets);
(g) all rights of such Seller in and to any studies and reports relating to the Project with such reliance letters obtained in accordance with Section 1.4(d) ; and
(h) subject to Sections 2.2(d) and 2.2(f) , all rights to causes of action, lawsuits, judgments, claims and demands of any nature, whether mature, contingent or otherwise, whether in tort, contract or otherwise, in favor of such Seller or any of its Affiliates and to the extent arising out of or relating to the Project Assets or Assumed Liabilities, whether by way of counterclaim or otherwise, including applicable rights of indemnity, applicable warranty rights (including applicable rights under Subcontractor warranties), applicable rights of contribution, applicable rights to refunds, applicable rights of reimbursement and other applicable rights of recovery (regardless of whether such rights are currently exercisable), but excluding, for the avoidance of doubt and subject to Section 6.20 , any rights to the RETA Eminent Domain Proceedings.
Section 2.2 Excluded Assets . Notwithstanding anything contained in this Agreement to the contrary, no Seller shall sell, assign or transfer to Buyer, and Buyer shall not purchase from such Seller, any rights, title or interest of such Seller or any of its Affiliates in or to any of any properties, assets or rights of any kind, whether tangible or intangible, owned, licensed, leased or otherwise held by such Seller or any of its Affiliates that are not expressly referenced in Section 2.1 , including the following (collectively, the “ Excluded Assets ”):
(a) all Excluded Books and Records;(b) all equity interests of such Seller or any of its Affiliates or owned by such Seller or any of its Affiliates;
(c) all rights to (i) causes of action, lawsuits, judgments, claims and demands of any nature, whether mature, contingent or otherwise, whether in tort, contract or otherwise, in favor of such Seller or any of its Affiliates and to the extent arising out of or relating to any Excluded Asset or any Excluded Liability, whether by way of counterclaim or otherwise, including applicable rights of indemnity, applicable warranty rights (including applicable rights under Subcontractor warranties), applicable rights of contribution, applicable rights to refunds, applicable rights of reimbursement and other applicable rights of recovery (regardless of whether such rights are currently exercisable) and (ii) subject to Section 6.20 , the RETA Eminent Domain Proceedings;
(d) all rights to Tax refunds, credits or similar benefits or Tax attributes to the extent relating to or attributable to any Excluded Liabilities;
(e) all cash, cash equivalents, certificates of deposit, bank deposits, commercial paper, securities, accounts receivable and any similar current assets of such Seller or any of its Affiliates;
(f) all rights to any refunds, deposits, credits or similar benefits, to the extent Buyer has not reimbursed such Seller for such refund, deposit, credit or similar benefit;
(g) all Permits of such Seller or any of its Affiliates, other than the Transferred Permits or the Permit Applications;
(h) all Contracts of such Seller or any of its Affiliates other than the Assigned Contracts, including the Excluded Contracts;
(i) all casualty, liability and other insurance policies maintained by such Seller or any of its Affiliates and all rights of any nature relating thereto, including all rights to insurance recoveries thereunder and to assert claims thereunder;
(j) all rights of such Seller and its Affiliates under this Agreement and the Ancillary Agreements; and
(k) all rights of such Seller in real property not primarily used, or primarily held for use, in, or necessary for, the ownership, operation, maintenance, leasing, development or construction of the Project, and all Improvements thereon and thereto.
Section 2.3 Assumed Liabilities . Subject to and upon the terms and conditions contained herein, at the Closing, Buyer shall assume from each Seller, and such Seller shall assign and delegate to Buyer (and thereafter Buyer shall pay, perform or discharge), the following Liabilities (collectively, the “ Assumed Liabilities ”):
(a) all Liabilities of such Seller arising from the applicable Project Assets, including, for the avoidance of doubt, the Specified Land Payments;
(b) all Taxes relating to the ownership, operation, maintenance, leasing, development or construction of any of the Project Assets attributable to a Post-Closing Period, including Property Taxes to the extent specifically allocated to Buyer pursuant to Section 2.6 ;
(c) such Seller’s Asset Retirement Obligation.For the avoidance of doubt, in all events the Buyer shall retain the rights and remedies otherwise included in this Agreement, including with respect to the representations and warranties, indemnification rights, closing conditions and termination rights provided by Buyer under this Agreement.
Section 2.4 Excluded Liabilities . Buyer shall not assume or be liable for any Liabilities of either Seller, other than the applicable Assumed Liabilities (the “ Excluded Liabilities ”). For the avoidance of doubt, Excluded Liabilities shall include:
(a) all Liabilities of either Seller that do not relate to the Project;(b) all Liabilities arising out of or relating to the execution and delivery by either Seller or any of their Affiliates of this Agreement and the Ancillary Agreements and the consummation by either Seller and any of their Affiliates of the Transactions, including any Liabilities of either Seller for payments of fees and/or expenses to a broker or finder;
(c) all Indebtedness of either Seller or any of its Affiliates;(d) all Liabilities with respect to any claims of third parties (including any current or former direct or indirect equity holders of the applicable Seller) relating to the ownership of any equity interests, participation rights or any other agreements of any nature to purchase or acquire any equity interests or participation rights, or any other interest or participation that confers the right to receive a share of the profits and losses of, or distribution of assets of, either Seller, whether arising before, on or after the Closing Date;
(e) all Liabilities arising from any Excluded Asset, including, for the avoidance of doubt, any Liabilities of Pattern Wind under the Letter Agreement; and
(f) all (i) Taxes imposed on either Seller and (ii) Taxes relating to the ownership, operation, maintenance, leasing, development or construction of any of the Project Assets attributable to a Pre-Closing Period, including Property Taxes to the extent specifically allocated to either Seller pursuant to Section 2.6 .
Section 2.5 Purchase Price .(a) The aggregate consideration for the purchase of the Project Assets and the Assumed Liabilities payable by Buyer to WST Seller (the “ Purchase Price ”) shall be equal to the sum of the aggregate amount of Project Costs, plus or minus (as applicable) the Prorated Differences. Notwithstanding anything in this Agreement to the contrary, absent the written consent of Buyer, the Purchase Price shall in no event exceed Four Hundred Million Dollars ($400,000,000) (the “ Maximum Purchase Price ”).
(b) On the Closing Date, following receipt by Buyer of a written invoice from WST Seller, Buyer shall pay to WST Seller, by wire transfer of immediately available funds to the account designated by WST Seller prior to the Closing Date, an amount (the “ Closing Payment ”) equal to the aggregate amount of Project Costs incurred prior to and on the Closing Date (the “ Base Purchase Price ”), plus or minus (as applicable) the Estimated Prorated Adjustment Amount, minus , unless WST Seller has delivered the Post-Closing Security, Twenty Million Dollars ($20,000,000) (the “ Indemnity Holdback Amount ”). Buyer agrees and acknowledges that Pattern Wind (or its successors or assigns) shall be entitled to fund customer-funded amounts pursuant to the Transmission Service Agreements (however so defined or described under the Transmission Service Agreements) in an amount equal to Seventy-Five Million Dollars ($75,000,000); provided , however , that such customer-funded amount shall be reduced on a dollar-for-dollar basis if the aggregate sum of the Base Purchase Price, Buyer’s expected costs to complete the Punch List Items and the Buyer-funded amounts under the Wires-to-Wires Agreement and the LGIAs is less than Three Hundred Forty Five Million Dollars ($345,000,000).
(c) Within ten (10) Business Days after the Final Completion Date, WST Seller shall prepare and deliver to Buyer a calculation of the actual amount of the Project Costs incurred between the Closing Date and the Final Completion Date that WST Seller determines should be included in the Purchase Price (and if such Project Costs are not included, they shall be treated as Excluded Liabilities and remain the responsibility of WST Seller) (such actual amount, the “ Final Completion Amount ”). Within ten (10) Business Days after calculation of the Final Completion Amount, Buyer shall pay to WST Seller, following receipt by Buyer of a written invoice from WST Seller, an amount equal to the Final Completion Amount. Payment of such amount shall be made by wire transfer of immediately available funds to the account designated by Buyer prior to the date of such payment.
(d) Within ten (10) Business Days after the one (1) year anniversary of the Final Completion Date (the “ One Year Anniversary ”), WST Seller shall prepare and deliver to Buyer a calculation of the amount of the Project Costs incurred between the Final Completion Date and the One Year Anniversary that WST Seller determines should be included in the Purchase Price (and if such Project Costs are not included, they shall be treated as Excluded Liabilities and remain the responsibility of WST Seller) (such actual amount, the “ One Year Anniversary Amount ”). Notwithstanding the foregoing, to the extent any RETA Eminent Domain Proceedings exist and are continuing at the time of the One Year Anniversary, the calculation of the One Year Anniversary Amount shall be postponed and extended until to the earlier of (x) the conclusion of all RETA Eminent Domain Proceedings and (y) the two (2) year anniversary of the Final Completion Date. The costs for preparing such calculation shall be borne by WST Seller. Within ten (10) Business Days after calculation of the One Year Anniversary Amount, Buyer shall pay to WST Seller, following receipt by Buyer of a written
invoice from WST Seller, an amount equal to the One Year Anniversary Amount. Payment of such amount shall be made by wire transfer of immediately available funds to the account designated by Buyer prior to the date of such payment.
(e) If an Indemnity Holdback Amount was subtracted from the Closing Payment, on the later of (i) the eighteenth (18th) month anniversary of the Closing Date and (ii) sixty (60) days following the last Eminent Domain Property Transfer Date ( provided that, for the avoidance of doubt, this clause (ii) shall only be applicable in the event that any RETA Eminent Domain Proceedings exist and are continuing as of the Closing Date), or on any date that WST Seller delivers to Buyer the Post-Closing Security, Buyer shall pay to WST Seller, following receipt by Buyer of a written invoice from WST Seller, by wire transfer of immediately available funds to the account designated by WST Seller prior to the date of such payment, an amount equal to the remaining amount of the Indemnity Holdback Amount, minus (ii) any payments due and unpaid with respect to any indemnified Claims under Section 10.2(a) or 10.2(b) , including any payments with respect to any Claim being contested pursuant to Section 10.4 ; provided that, upon resolution of any such contested Claim in favor of either Seller, Buyer shall pay to WST Seller, following receipt by Buyer of a written invoice from WST Seller, by wire transfer of immediately available funds to the account designated by WST Seller prior to the date of such payment, all amounts held back in connection with such contested Claim within five (5) Business Days of such resolution.
Section 2.6 Allocation of Purchase Price; Proration .(a) Not later than ninety (90) days after the Closing, Buyer shall provide WST Seller with an allocation of the Purchase Price, plus any Liabilities deemed assumed for U.S. federal Income Tax purposes, among the Project Assets as of the Closing Date (the “ Purchase Price Allocation ”). The Purchase Price Allocation shall be conclusive and shall be binding on Buyer and WST Seller unless WST Seller objects in writing within thirty (30) days of receipt of such allocation. In the event that WST Seller objects in writing within thirty (30) days, Buyer and WST Seller shall negotiate in good faith to resolve the dispute. If Buyer and WST Seller fail to agree on such allocation within thirty (30) days following WST Seller’s written objection, such allocation shall be determined, within a reasonable time, by an independent, nationally recognized accounting firm mutually agreed upon by WST Seller and Buyer (the “ Independent Appraiser ”) to determine the resolution of solely those items in dispute. WST Seller and Buyer shall each bear and pay one-half of the fees and other costs charged by the Independent Appraiser. The Purchase Price Allocation as finally determined pursuant to this Section 2.6(a) , shall be binding upon Buyer and WST Seller. Buyer and WST Seller agree to file all U.S. federal, state, local and foreign Tax Returns in accordance with such agreed allocation (giving effect to mutually agreed upon adjustments as a result of adjustments to the Purchase Price). Except as otherwise required by applicable Law, no Party nor its respective Affiliates shall take a Tax position that is inconsistent with the allocation; provided , however , that nothing in this Section 2.6(a) shall prevent Buyer, WST Seller or their respective Affiliates from settling, or require any of them to litigate, any challenge, proposed deficiency, adjustment or other similar proceeding by any Taxing Authority with respect to the Purchase Price Allocation. Buyer and WST Seller shall notify and provide the other with reasonable assistance in the event of an examination, audit or other proceeding regarding the agreed upon allocation of the Purchase Price.
(b) Buyer and Sellers agree that (i) Property Taxes, (ii) assessments, (iii) rents, fees or payments under the Real Property Agreements, including payments to Counterparties under the Real Property Agreements, and (iv) annual Permit or registration fees, if any, directly attributable to the Project Assets (collectively, the “ Prorated Items ”) shall, with respect to any Straddle Period, be apportioned between Buyer and WST Seller based on the number of days of such Straddle Period included in the Pre-Closing Period and the number of days of such Straddle Period included in the Post-Closing Period. WST Seller shall be liable to the extent such items are attributable to any Pre-Closing Period, and Buyer shall be liable to the extent such items are attributable to any Post-Closing Period.
(c) At least three (3) Business Days prior to the anticipated Closing Date, WST Seller shall deliver to Buyer WST Seller’s good faith calculation of (i) the Prorated Amount (if any) for each Prorated Item (with respect to each Prorated Item, as WST Seller’s calculation may be modified upon incorporation of any comments by Buyer to which WST Seller has agreed prior to the Closing, the “ Estimated Prorated Amount ”), together with reasonable supporting detail of WST Seller’s calculation thereof, and (ii) the sum of all Estimated Prorated Amounts (if any) (such sum, which may be a negative or a positive number, the “ Estimated Prorated Adjustment Amount ”). In providing its good faith calculation, WST Seller shall take into account (as applicable) the actual fee, cost or amount of the Prorated Item for the most recent preceding year (or appropriate period) for which an actual fee, cost or amount paid is available. WST Seller shall consider in good faith any comments on WST Seller’s good faith calculation submitted by Buyer at least one (1) Business Day prior to the Closing Date. If the Estimated Prorated Adjustment Amount is a positive number, then the Base Purchase Price payable at Closing will be increased by an amount equal to such Estimated Prorated Adjustment Amount, as contemplated by Section 2.5(b) . If the Estimated Prorated Adjustment Amount is a negative number, then the Base Purchase Price payable at Closing will be decreased by an amount equal to the absolute value of such Estimated Prorated Adjustment Amount, as contemplated by Section 2.5(b) .
(d) Promptly upon receipt of any invoice for such Prorated Item or other information confirming the actual Prorated Amount for such Prorated Item (the “ Actual Prorated Amount ”), Buyer or WST Seller, as applicable, shall send written notice to the other Party thereof (such notice, the “ Reimbursement Notice ”), which Reimbursement Notice shall set forth the absolute value of the difference between the Estimated Prorated Amount and the Actual Prorated Amount for each Prorated Item identified in the Reimbursement Notice (the “ Prorated Difference ”), together with the invoice for such Prorated Item or other information confirming the Actual Prorated Amount. Within two (2) Business Days after the date of delivery of the Reimbursement Notice, (i) if the Actual Prorated Amount (whether a positive or a negative number) is greater than the Estimated Prorated Amount (whether a positive or a negative number) for such Prorated Item, Buyer shall pay an amount equal to the Prorated Difference to WST Seller, and (ii) if the Estimated Prorated Amount (whether a positive or a negative number) is greater than the Actual Prorated Amount (whether a positive or a negative number) for such Prorated Item, then WST Seller shall pay to Buyer the Prorated Difference. Following the Closing, WST Seller and Buyer shall cooperate and provide each other with such documents and other records as may be reasonably requested in order to confirm all calculations made pursuant to this Section 2.6 . Absent manifest error, the Prorated Difference set forth in the
Reimbursement Notice shall be conclusive and shall be binding on Buyer and WST Seller with respect to the Prorated Items identified therein.
Section 2.7 Withholding . Buyer shall be entitled to deduct and withhold from any cash amounts payable pursuant to this Agreement such amounts as Buyer may be required to deduct and withhold with respect to the making of such payment under United States federal, state or local or foreign Tax laws; provided that, for the avoidance of doubt, Buyer may not deduct or withhold from any cash amounts payable pursuant to this Agreement any amounts required under New Mexico’s gross receipts and compensating tax. To the extent that such amounts are so withheld and paid over to the appropriate Tax authority by Buyer, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the person in respect of which such deduction and withhold was made.
Section 2.8 Closing . The closing of the purchase and sale of the Project Assets and the assignment and assumption of the Assumed Liabilities (the “ Closing ”) shall take place at 10:00 a.m., local time, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 1440 New York Avenue, Washington, DC (or such other location as the Parties may agree) on a date that is no later than three (3) Business Days following the satisfaction or waiver of the last of the conditions set forth in Article VII and Article VIII (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions) or at such other time, date and place as the Parties may mutually agree in writing (the date on which the Closing actually occurs being referred to as the “ Closing Date ”). All actions and deliverables set forth in Section 2.9 , Section 2.10 , Article VII or Article VIII that occur or are delivered, as the case may be, on the Closing Date shall be deemed to occur simultaneously at the Closing.
Section 2.9 Sellers’ Deliverables . At or prior to the Closing, Sellers shall deliver, or cause to be delivered, to Buyer each of the following:
(a) (i) a counterpart, duly executed and acknowledged by the applicable Seller, to one or more Deeds conveying the Owned Real Property and all Improvements to and on the Owned Real Property to Buyer and (ii) solely in the event that any RETA Eminent Domain Proceedings exist and are continuing as of the Closing Date, a counterpart, duly executed and acknowledged by RETA Seller, to the Eminent Domain License, for any Eminent Domain Property;
(b) a counterpart, duly executed by the applicable Seller, to one or more bills of sale and assignment and assumption agreements, substantially in the form attached hereto as Annex 5 , to effect the assignment of Project Assets not otherwise conveyed pursuant to Section 2.9 , and the assumption of the related Assumed Liabilities by, Buyer (subject to Section 6.3 and Section 6.4 ) (each, a “ Bill of Sale and Assignment ”), which for the avoidance of doubt will effectuate the assignment of warranties from Subcontractors and other contractors, manufacturers, suppliers and vendors, and including all workmanship warranties and guaranties related to the Project and the Project Assets;
(c) (i) written confirmation from the Financing Agent or other applicable holders of all Indebtedness of WST Seller for borrowed money secured by any of the Project
Assets, in customary form, that all Liens on the Project Assets with respect to all outstanding Indebtedness of WST Seller for borrowed money secured by any of the Project Assets have been, or concurrently with the Closing will be, terminated and released (including by delivery of UCC-3 termination statements, if applicable) and (ii) copies of UCC lien searches dated no earlier than three (3) days prior to the Closing, establishing the lack of any Liens other than Permitted Liens as to any personal property being transferred at Closing;
(d) (i) a counterpart, duly executed and acknowledged by the applicable Seller, to one or more assignment agreements, substantially in the form attached hereto as Annex 6 , to effect the assignment of each Real Property Agreement (other than any easements or rights-of-way granted by the New Mexico Commissioner of Public Lands or as set forth in clause (ii) ), and all Improvements to and on the Easement Real Property that is the subject of such Real Property Agreement, to, and the assumption of related Assumed Liabilities by, Buyer (each, a “ Non-State Lands Real Property Assignment Agreement ”) and (ii) to the extent prescribed forms are required by any Governmental Entity to effect the assignment of any particular Real Property Agreement to, and the assumption of related Assumed Liabilities by, Buyer, counterpart(s), duly executed and acknowledged by the applicable Seller, to such prescribed forms;
(e) a counterpart, duly executed and acknowledged by the applicable Seller, to one or more assignment agreements, substantially in the form attached hereto as Annex 7 (or such other form required by the New Mexico Commissioner of Public Lands), to effect the assignment of each easement or right-of-way granted by the New Mexico Commissioner of Public Lands to, and the assumption of related Assumed Liabilities by, Buyer (each, a “ State Lands Assignment Agreement ” and together with the Non-State Lands Real Property Assignment Agreements, the “ Real Property Assignment Agreements ”);
(f) certifications of each Seller (or if it is a disregarded entity for U.S. federal Income Tax purposes, the Person treated for U.S. federal Income Tax purposes as the owner of its assets) to Buyer, substantially in the form attached hereto as Annex 8A or Annex 8B , as applicable, as to its non-foreign status as set forth in Section 1445 of the Code and the Treasury Regulations promulgated thereunder and any similar forms required under state law;
(g) (i) an ESA for the Project Site, prepared in accordance with either ASTM E1527-13 or ASTM 2247-16 (ESA for Forestland or Rural Property) (and in the case of ASTM 2247-16, such use shall be in accordance with Section 1.1.1 thereof), dated no more than one hundred eighty (180) days prior to the Closing Date (and including elements required to be completed no earlier than one hundred eighty (180) days prior to the Closing Date), which ESA (1) documents information provided by Buyer as the user of the ESA, in accordance with whichever ASTM standard is used to prepare the ESA, (2) is in material compliance with the appropriate ASTM standard and (3) either (A) does not identify any environmental conditions at or adjacent to the Project Site that are reasonably likely to pose a risk of material Liability or reasonably likely to materially impair the use and operation of the Project Assets, or (B) is substantially consistent with the ESA provided to Buyer pursuant to Section 1.5(a)(iv) , and (ii) a letter from the environmental consultant that prepared the ESA allowing Buyer to rely on the ESA as if it were the recipient of the ESA, subject to the same terms and conditions that apply to WST Seller;
(h) any other ESAs prepared with respect to the Project in the possession of either Seller (to the extent not previously delivered pursuant to Section 1.5(a)(iv) ); and
(i) a list of the Assigned Warranties, copies of all of the Assigned Warranties and a written certification from WST Seller identifying the disposition of any prior warranty claims with respect to the Project.
Section 2.10 Buyer’s Deliverables . At or prior to the Closing, Buyer shall deliver, or cause to be delivered, each of the following:
(a) to WST Seller or its designee, the Closing Payment by wire transfer of immediately available funds to the account designated by WST Seller to Buyer prior to the Closing (it being understood and agreed, for the avoidance of doubt, that receipt by WST Seller of the entire Closing Payment in accordance with this Section 2.10(a) is a condition to Sellers’ obligation to deliver the Project Assets and Assumed Liabilities to Buyer);
(b) to the applicable Seller, a counterpart, duly executed by Buyer to the applicable Bills of Sale and Assignment (subject to Section 6.3 and Section 6.4 );
(c) to the applicable Seller, (i) a counterpart, duly executed and acknowledged by Buyer, to the applicable Real Property Assignment Agreements and (ii) to the extent prescribed forms are required by any Governmental Entity as set forth in Section 2.9(d)(ii) , counterpart(s), duly executed and acknowledged by Buyer, to such prescribed forms; and
(d) solely in the event that any RETA Eminent Domain Proceedings exist and are continuing as of the Closing Date, a counterpart, duly executed and acknowledged by Buyer, to the Eminent Domain License, for any Eminent Domain Property.
REPRESENTATIONS AND WARRANTIES RELATING TO WST SELLER , THE PROJECT ASSETS AND REAL PROPERTY
WST Seller hereby represents and warrants to Buyer as of the Execution Date, the Development Completion Acknowledgement Date and the Closing Date, except for those representations and warranties that are made as of a specific date, as follows:
Section 3.1 Organization and Existence . WST Seller is a limited liability company duly formed, validly existing and in good standing under the Laws of the State of Delaware. WST Seller is duly qualified or licensed to do business in each other jurisdiction where the actions to be performed by it under this Agreement or any Ancillary Agreement to which it is a party makes such qualification or licensing necessary, except in any jurisdiction where the failure to be so qualified or licensed would not reasonably be expected to be material.
Section 3.2 Authorization . WST Seller has all requisite limited liability company power and authority to enter into this Agreement and the Ancillary Agreements to which it is a party, to perform its obligations hereunder and thereunder and to consummate the Transactions. The execution, delivery and performance by WST Seller of this Agreement and the Ancillary
Agreements to which it is a party and the consummation by WST Seller of the Transactions have been duly authorized by all necessary limited liability company action on the part of WST Seller. Each of this Agreement and each Ancillary Agreement (a) have been duly and validly executed and delivered by WST Seller and (b) constitute (assuming the due execution and delivery by Buyer and RETA Seller, as applicable) a valid and legally binding obligation of WST Seller, enforceable against WST Seller in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other Laws relating to or affecting creditors’ rights generally and general equitable principles.
Section 3.3 Noncontravention . Except as set forth on Section 3.3 of Sellers’ Disclosure Letter (the “ WST Seller Consents ”), the execution, delivery and performance of this Agreement and the Ancillary Agreements to which WST Seller is a party by WST Seller do not, and the consummation by WST Seller of the Transactions will not (a) contravene or violate any provision of the Organizational Documents of WST Seller; (b) subject to obtaining the consents and approvals set forth in Section 3.4 of Sellers’ Disclosure Letter , materially conflict with or result in a material violation of any term or provision of any Law applicable to WST Seller; (c) contravene or violate any provision of, or result in the termination or acceleration of, or entitle any party to accelerate any obligation or Indebtedness under, any Assigned Contract or Transferred Permit to which WST Seller is a party or by which WST Seller is bound; or (d) result in the imposition or creation of any Lien upon or with respect to any of the Project Assets (other than Permitted Liens).
Section 3.4 Governmental Approvals . Except as set forth in Section 3.4 of Sellers’ Disclosure Letter (the “ WST Seller Approvals ”), and unless one or more notification filings, and the observance of any applicable waiting period, is required by the HSR Act, no material consent or approval of any Governmental Entity is required for or in connection with the execution, delivery and performance by WST Seller of this Agreement or the Ancillary Agreements to which WST Seller is a party, or the consummation by WST Seller of the Transactions.
Section 3.5 Absence of Certain Changes or Events . Except as set forth in Section 3.5 of Sellers’ Disclosure Letter , (a) WST Seller’s business with respect to the Project and the other Project Assets has been conducted in all material respects in accordance with Prudent Utility Practice and (b) there has not been any Material Adverse Effect.
Section 3.6 Legal Proceedings . Except as set forth in Section 3.6 of Sellers’ Disclosure Letter , there are (a) no Claims pending or (b) to WST Seller’s Knowledge, no material Claims threatened, in each case, against WST Seller with respect to the Project Assets or Assumed Liabilities before any Governmental Entity.
Section 3.7 Compliance with Laws; Permits .(a) Except as set forth in Section 3.7(a) of Sellers’ Disclosure Letter , WST Seller is in material compliance with all Laws applicable to the Project Assets, Assumed Liabilities, and WST Seller’s ownership, leasing, development, construction, operation and maintenance thereof.
(b) As of the Execution Date, to WST Seller’s Knowledge, (i) all Transferred Permits that have been obtained by either Seller are set forth on Part I of Section 3.7(b) of Sellers’ Disclosure Letter and (ii) assuming the accuracy of the representations and warranties of Buyer in Section 5.9 , all Transferred Permits not yet obtained but that are required to be obtained for, the ownership, operation, maintenance, development and construction of the Project as currently designed (including Buyer’s future use) are set forth on Part II of Section 3.7(b) of Sellers’ Disclosure Letter (excluding in each case, for the avoidance of doubt, any Construction Permits and the Bernalillo County Approvals). As of the Development Completion Acknowledgement Date and as of the Closing Date, (x) all Transferred Permits that have been obtained by either Seller are set forth on Part I of Section 3.7(b) of Sellers’ Disclosure Letter and (y) assuming the accuracy of the representations and warranties of Buyer in Section 5.9 , all Transferred Permits not yet obtained but that are required to be obtained for, the ownership, operation, maintenance, development and construction of the Project as currently designed (including Buyer’s future use) are set forth on Part II of Section 3.7(b) of Sellers’ Disclosure Letter (excluding in each case, for the avoidance of doubt, any Construction Permits and the Bernalillo County Approvals); provided that each Transferred Permit listed on Part II of Section 3.7(b) of Sellers’ Disclosure Schedule that has been obtained by either Seller as of the Development Completion Acknowledgement Date or the Closing Date, as applicable, shall be deemed to be listed on Part I of Section 3.7(b) of Sellers’ Disclosure Letter for purposes of the representations in this Section 3.7(b) and Section 3.7(c) as of the Development Completion Acknowledgement Date and as of the Closing Date.
(c) Except as set forth in Section 3.7(c) of Sellers’ Disclosure Letter , (i) all Transferred Permits set forth in Part I of Section 3.7(b) of Sellers’ Disclosure Letter are properly in the name of WST Seller or RETA Seller except where any such Transferred Permit has been obtained by a contractor in connection with its work on the construction of the Project; (ii) the applicable Seller (or where applicable and to its Knowledge, a relevant contractor) is in compliance in all material respects with the terms of all Transferred Permits set forth in Part I of Section 3.7(b) of Sellers’ Disclosure Letter ; (iii) each Transferred Permit set forth in Part I of Section 3.7(b) of Sellers’ Disclosure Letter is in full force and effect or not needed for the ownership, leasing, development, construction, operation or maintenance of the Project; (iv) WST Seller has not received written notice of any material violation of any Transferred Permit set forth in Part I of Section 3.7(b) of Sellers’ Disclosure Letter that has not been appropriately addressed, and (v) WST Seller reasonably believes that each Transferred Permit set forth in Part II of Section 3.7(b) of Sellers’ Disclosure Letter not yet obtained will be obtained before such Transferred Permit becomes required pursuant to applicable Law and in any event prior to the Closing Date.
(d) As of the Execution Date, to WST Seller’s Knowledge, all material Construction Permits and the Bernalillo County Approvals that have been obtained by either Seller are set forth on Part I of Section 3.7(d) of Sellers’ Disclosure Letter and all material Construction Permits and the Bernalillo County Approvals not yet obtained but that are required to be obtained for, the development and construction of the Project as currently designed are set forth on Part II of Section 3.7(d) of Sellers’ Disclosure Letter . As of the Development Completion Acknowledgement Date, all material Construction Permits and the Bernalillo County Approvals that have been obtained by either Seller are set forth on Part I of Section 3.7(d) of Sellers’ Disclosure Letter and all material Construction Permits and Bernalillo County
Approvals not yet obtained but that are required to be obtained for, the development and construction of the Project as currently designed are set forth on Part II of Section 3.7(d) of Sellers’ Disclosure Letter .
(e) WST Seller has provided Buyer with a true and correct copy of each Transferred Permit, each Construction Permit and each Bernalillo County Approval currently in effect in the Data Room.
Section 3.8 Title to Project Assets .(a) As of the Closing Date, WST Seller or RETA Seller (i) owns and has good and marketable title to all of the personal property comprising the Project Assets and (ii) has good and marketable title to the Owned Real Property and a valid, binding and enforceable right-of-way, easement, land use permit or license in the Easement Real Property, in each case of clauses (i) and (ii) free and clear of all Liens, other than Permitted Liens. As of the Closing Date, no Person other than Sellers (x) owns or has any leasehold interest in, or option or other right to acquire an interest in (contingent or otherwise) any of the Project Assets or the Real Property, including a right of first refusal or a right of first offer (other than immaterial rights, such as grazing rights), or (y) has any Lien on the Project Assets or the Real Property, in each case of clauses (x) and (y) , other than any Permitted Lien.
(b) As of the Closing Date, other than the Project Assets, any Eminent Domain Property, or as set forth on Section 3.8 of Sellers’ Disclosure Letter , there are no other assets that are held by Sellers or any other Affiliate of Sellers that are necessary for Buyer’s ownership, maintenance and operation of the Project.
Section 3.9 Assigned Contracts; Master Lease Agreement .(a) Section 3.9(a) of Sellers’ Disclosure Letter sets forth a list of all Assigned Contracts currently in effect.
(b) WST Seller has provided Buyer with true and complete copies of all Assigned Contracts currently in effect by the posting of such Assigned Contracts to the Data Room.
(c) Each Assigned Contract is in full force and effect and constitutes the legal, valid and binding obligation of WST Seller (if applicable) and, to WST Seller’s Knowledge, the other parties thereto, enforceable against WST Seller (if applicable) and, to WST Seller’s Knowledge, each other party thereto, as applicable, in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other Laws relating to or affecting creditors’ rights generally and general equitable principles.
(d) Except as set forth in Section 3.9(d) of Sellers’ Disclosure Letter , (i) WST Seller is not in material breach under any Assigned Contract to which it is a party and (ii) to WST Seller’s Knowledge, no other party is in material breach under any Assigned Contract.
(e) Each Seller has complied, in all material respects, with the provisions of the Master Lease Agreement applicable to the Project.
Section 3.10 Real Property .(a) Section 3.10(a) of Sellers’ Disclosure Letter sets forth the legal description of all parcels of real property (or portions thereof, to the extent applicable) owned in fee simple by either Seller and (i) primarily used, or held primarily for use, in, or (ii) necessary for, the ownership, leasing, development, construction, operation and maintenance of the Project (including Buyer’s future use) (such real property, collectively, the “ Owned Real Property ”). The applicable Seller has fee simple title to the Owned Real Property, free and clear of all Liens other than Permitted Liens.
(b) [Reserved](c) Section 3.10(c) of Sellers’ Disclosure Letter sets forth (i) all easements and rights-of-way of which either Seller is the beneficiary (including any easement or right-of-way granted to RETA Seller pursuant to a court order following an eminent domain proceeding), (ii) all land use permits currently held by either Seller and (iii) all licenses (excluding, for the avoidance of doubt, the Eminent Domain License) for the occupancy and use of real property currently held by either Seller, in each case, which are primarily used, held primarily for use in, or necessary for, the ownership, leasing, development, construction and operation of the Project (each such easement, right-of-way, land use permit and license, together with any documentation with respect to the Owned Real Property described in Section 3.10(a) , a “ Real Property Agreement ”). As of the Closing Date, the portion of the Project constituting the 345 kV transmission line is only located on Owned Real Property or real property that is the subject of any such easement, right-of-way, land use permit or license (such real property, the “ Easement Real Property ” and together with the Owned Real Property, the “ Real Property ”), except for any portion of the Project that is located on Eminent Domain Property.
(d) WST Seller has provided Buyer with true and complete copies of all Real Property Agreements currently in effect by the posting of such Real Property Agreements in the Data Room.
(e) Each Real Property Agreement is in full force and effect and constitutes the legal, valid and binding obligation of the applicable Seller and, to WST Seller’s Knowledge, the other parties thereto, enforceable against the applicable Seller and, to WST Seller’s Knowledge, each other party thereto, as applicable, in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other Laws relating to or affecting creditors’ rights generally and general equitable principles. Except as set forth in Section 3.10(e) of Sellers’ Disclosure Letter , neither Seller is in material breach under any Real Property Agreement to which it is a party, and, as of the Closing Date, no consideration is due or will become due in the ordinary course from and after the Closing under any Real Property Agreements (other than Specified Land Payments).
(f) Except as set forth in Section 3.10(f) of Sellers’ Disclosure Letter and pursuant to the Master Lease Agreement, (i) the applicable Seller has not granted any Person the right to use or occupy any Real Property or any portion thereof, (ii) the applicable Seller has not granted any outstanding options, rights of first refusals, rights of first offer or other third-party rights to sell, assign or dispose of any interest in such Real Property and (iii) the applicable Seller
has not granted any right or interest which has or will limit, alter or restrict any right of Buyer to use or occupy any Real Property or any portion thereof.
(g) There are no (i) pending or, to WST Seller’s Knowledge and RETA Seller’s Knowledge, threatened proceedings to condemn the Real Property or to take by power of eminent domain or other governmental power the Real Property, which if successful, would reasonably be expected to materially detract from the value of or use of such Real Property for use and operation of the Project or (ii) pending challenges to the statutory authority of RETA Seller to acquire and utilize rights-of-way, easements and other real property, which would not reasonably be expected to be resolved or settled prior to the Outside Closing Date and if successful, would reasonably be expected to result in a non-contiguous route for the Project (after giving effect to any reasonably available alternative routes).
Section 3.11 Environmental Matters .(a) Except as set forth in Section 3.11(a) of Sellers’ Disclosure Letter , as of the Closing Date: (i) the construction of the Project has been completed in material compliance with all Environmental Laws applicable to the Project Assets, such compliance including material compliance with all Permits required under Environmental Law in order to own, lease, develop or construct the Project Assets as of the Closing Date (the “ Environmental Permits ”), which are set forth in Section 3.11(a)(i) of Sellers’ Disclosure Letter ; (ii) WST Seller has not received written notice of any potential or existing material violation of such Environmental Law or such Environmental Permit that remains unresolved; and (iii) all such Environmental Permits are properly in the name of the applicable Seller except where such Environmental Permit has been obtained by a contractor in connection with its work on the construction of the Project, and all such Environmental Permits are in full force and effect, excluding any such Environmental Permit that is no longer necessary for the ownership, leasing, development, construction, maintenance or operation of the Project or the Project Assets.
(b) Except as set forth in Section 3.11(b) of Sellers’ Disclosure Letter :(i) there are no Claims pending or, to WST Seller’s Knowledge, material Claims threatened, in each case, against WST Seller with respect to the Project Assets asserting any violation of, or Liability under, any Environmental Law, including any such Claims challenging WST Seller’s compliance with, or the validity of, any Environmental Permit or seeking the termination or adverse modification of any Environmental Permit; and
(ii) no Hazardous Substance has been Released at any Real Property that would reasonably be expected to result in material Liability to WST Seller under any Environmental Law or that would otherwise materially impair the use, operation or maintenance of the Project Assets.
Section 3.12 Taxes . Except as set forth in Section 3.12 of Sellers’ Disclosure Letter :(a) all material Tax Returns required to be filed with respect to the Project Assets have been filed when due in accordance with all applicable Laws (taking into account
applicable extensions) and all such Tax Returns are true, correct and complete in all material respects;
(b) WST Seller has paid in full all material Taxes required to be paid with respect to the Project Assets (regardless of being shown as due and payable on any Tax Return);
(c) there is no action, suit, proceeding, investigation, audit or claim by any Taxing Authority now pending or threatened in writing with respect to any Tax with respect to the Project Assets;
(d) there are no Liens for Taxes upon any of the Project Assets other than Liens for Taxes not yet due and payable; and
(e) there are no outstanding agreements or waivers extending the statutory period of limitation for the assessment and collection of any Non-Income Taxes with respect to the Project Assets.
Notwithstanding the generality of any other representations and warranties contained in this Agreement, (i) this Section 3.12 contains the sole and exclusive representations and warranties of WST Seller with respect to Tax matters; and (ii) the representations and warranties made in this Section 3.12 refer only to the past activities of WST Seller and are not intended to serve as representations with respect to Taxes attributable to any periods after the Closing or with respect to Tax positions taken after the Closing.
Section 3.13 Intellectual Property .(a) Section 3.13(a) of Sellers’ Disclosure Letter sets forth all of the registered, issued or applied for trademarks, patents, service marks and copyrights owned by WST Seller and primarily used, or held primarily for use, in, or necessary for, WST Seller to lease, develop, construct and sell the Project, and otherwise conduct its business related to the Project Assets, as currently conducted, consistent with Prudent Utility Practice. Other than the Excluded Assets, the items set forth in Section 3.13(a) of Sellers’ Disclosure Letter , and any rights and services to be provided to Sellers pursuant to Subcontracts, (i) no material Intellectual Property has been licensed or made available to WST Seller that is primarily used, or held primarily for use, in, or necessary for, WST Seller to lease, develop, construct and sell the Project, and otherwise conduct its business related to the Project Assets, as currently owned and conducted, consistent with Prudent Utility Practice and (ii) no Intellectual Property included in the Project Assets has been licensed by WST Seller to any third party.
(b) Except as set forth in Section 3.13(b) of Sellers’ Disclosure Letter , to WST Seller’s Knowledge (i) WST Seller’s ownership, leasing, development, construction, energization, operation and maintenance of the Project Assets as currently conducted does not infringe or otherwise violate any third-party Intellectual Property rights and (ii) no third party is infringing or otherwise violating any Intellectual Property rights owned by WST Seller for use in the ownership, leasing, development, construction, energization, operation or maintenance of the Project Assets (including Buyer’s future use) and included in the Project Assets.
Section 3.14 Credit Support . Other than as set forth on Section 3.14 of Sellers’ Disclosure Letter , there is no Credit Support provided by or on behalf of WST Seller or any of its Affiliates relating to the ownership, leasing, development, construction, energization, operation or maintenance of the Project or the Project Assets.
Section 3.15 Affiliate Arrangements . Except as set forth in Section 3.15 of Sellers’ Disclosure Letter , no Affiliate of WST Seller, or any director, officer or employee of any such Affiliate, is a party to any Contract with WST Seller related to the Project Assets or Assumed Liabilities that will not be terminated prior to the Closing Date or that is necessary for, the ownership, leasing, development, construction, operation and maintenance of the Project and the Project Assets by Buyer.
Section 3.16 Brokers . Neither WST Seller nor any of its Affiliates has any Liability or obligation to pay fees or commissions to any broker, finder or agent with respect to the Transactions for which Buyer or any of its Affiliates would become liable or obliged.
Section 3.17 Insurance . Section 3.17 of Sellers’ Disclosure Letter sets forth a true, complete and correct list and description of all insurance policies in force and held by WST Seller or any of its Affiliates with respect to the Project Assets, together with a statement of the aggregate amount of claims relating to the Project, the Project Site or the Project Assets paid out since the applicable insurance policy was obtained and claims relating to the Project, the Project Site or the Project Assets pending under each such insurance policy. As of the Development Completion Acknowledgement Date, all such insurance policies are in full force and effect, all premiums due thereon have been paid and WST Seller is in compliance in all material respects with the terms and provisions of such insurance policies. Furthermore, solely as they relate to the Project, the Project Site and the Project Assets, as of the Development Completion Acknowledgement Date: (a) there is no claim pending under any of such insurance policies as to which coverage has been questioned, denied or disputed by the underwriters of such insurance policies; and (b) WST Seller has received no written notice that the Project, the Project Site, or any Project fixtures, equipment or improvements, or the operation thereof, will not be insurable or will be subject to exclusions arising from actual or potential defects in the Project, Project Site or Project Assets.
Section 3.18 Data Room . The copies of documents, instruments, Contracts and reports in the Data Room conform to the originals thereof, and in the case of Contracts, include all written amendments, waivers, supplements, schedules and exhibits thereto. Without limiting the representations and warranties set forth in Sections 3.7(e) , 3.9(b) and 3.10(d) , and, if applicable, Section 3.19(b) , WST Seller has posted to the Data Room true and correct copies of (a) all contracts and agreements (i) executed by either Seller in connection with the development and construction of the Project and (ii) for which the expected cost of performing such contract in the ordinary course by such Seller, or the annual revenue expected to be received in the ordinary course by such Seller exceeds One Hundred Thousand Dollars ($100,000) in the aggregate, (b) all studies and reports in either Seller’s possession or control commissioned or issued in connection with the development and construction of the Project and (c) all notices, orders, inspection reports, material correspondence or other material communications, which, in each case, WST Seller or RETA Seller, as applicable, has delivered to or received from any Third Person in connection with the development and construction of the Project, including all material
communications from Governmental Entities, but excluding in all events any Excluded Contracts (and any information delivered pursuant thereto) and any information described in the definition of Excluded Books and Records.
Section 3.19 Eminent Domain Property . Solely in the event that any RETA Eminent Domain Proceedings exist and are continuing as of the Closing Date:
(a) As of each Eminent Domain Property Transfer Date, RETA Seller has (i) good and marketable title to any fee interest (if any) in the applicable Eminent Domain Property and (ii) a valid, binding and enforceable right-of-way or easement in any such Eminent Domain Property that is the subject of a right-of-way or easement (if any), in each case of clauses (i) and (ii) free and clear of all Liens, other than Permitted Liens. As of each Eminent Domain Property Transfer Date, no Person other than RETA Seller (or Buyer) (x) owns or has any leasehold interest in, or option or other right to acquire an interest in (contingent or otherwise) any of the applicable Eminent Domain Property, including a right of first refusal or a right of first offer (other than immaterial rights, such as grazing rights), or (y) has any Lien on Eminent Domain Property, in each case of clauses (x) and (y) , other than any Permitted Lien.
(b) As of each Eminent Domain Property Transfer Date, WST Seller has provided Buyer with true and complete copies of all Real Property Agreements related to the applicable Eminent Domain Property by the posting of such Real Property Agreements in the Data Room.
(c) As of each Eminent Domain Property Transfer Date, each Real Property Agreement related to the applicable Eminent Domain Property is in full force and effect and constitutes the legal, valid and binding obligation of RETA Seller and, to WST Seller’s Knowledge, the other parties thereto, enforceable against RETA Seller and, to WST Seller’s Knowledge, each other party thereto, as applicable, in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other Laws relating to or affecting creditors’ rights generally and general equitable principles. As of each Eminent Domain Property Transfer Date, RETA Seller is not in material breach under any such Real Property Agreement to which it is a party, and, as of each Eminent Domain Property Transfer Date, no consideration is due or will become due in the ordinary course from and after such Eminent Domain Property Transfer Date under any applicable Real Property Agreements.
(d) As of each Eminent Domain Property Transfer Date (after giving effect to any amendment or termination of the Eminent Domain License on such Eminent Domain Property Transfer Date), (i) RETA Seller has not granted any Person the right to use or occupy the applicable Eminent Domain Property or any portion thereof, (ii) RETA Seller has not granted any outstanding options, rights of first refusals, rights of first offer or other third-party rights to sell, assign or dispose of any interest in such Eminent Domain Property and (iii) RETA Seller has not granted any right or interest which has or will limit, alter or restrict any right of Buyer to use or occupy such Eminent Domain Property or any portion thereof.
Section 3.20 Eminent Domain License . Solely in the event that any RETA Eminent Domain Proceedings exist and are continuing as of the Closing Date:
(a) As of the Closing Date, RETA Seller has all requisite power and authority under Law to enter into the Eminent Domain License and to perform all of its obligations thereunder, including the granting to Buyer of the right to enter upon and use the Eminent Domain Property.
(b) As of the Closing Date, pursuant to the Eminent Domain License, RETA Seller’s grant to Buyer of the right to enter upon and use the Eminent Domain Property includes the granting of all rights necessary and sufficient to allow for Buyer’s uninterrupted use of the Eminent Domain Property for all purposes related to the ownership, operation, maintenance, leasing, development and construction of the Project, subject in all cases to the applicable RETA Eminent Domain Proceedings. As of the Closing Date, RETA Seller has not granted any Person other than Buyer the right to use or occupy the applicable Eminent Domain Property or any portion thereof.
Section 3.21 No Other Representations or Warranties . Except for the representations and warranties contained in this Article III and Article IV , neither WST Seller nor any other Person has made any other express or implied representation or warranty to Buyer with respect to WST Seller, the Project Assets, the Transactions or otherwise, and WST Seller disclaims any other representations or warranties, whether made by WST Seller, or any of its officers, directors, managers, employees, agents or representatives. Except for the representations and warranties contained in this Article III , WST Seller hereby disclaims all liability and responsibility for any representation, warranty, projection, forecast, statement or information made, communicated or furnished (orally or in writing) to Buyer or its Affiliates or representatives (including any information, projection or advice that may have been or may be provided or made available to Buyer or its Affiliates by any director, officer, manager, member, employee, agent, consultant or representative of WST Seller).
REPRESENTATIONS AND WARRANTIES RELATING TO RETA SELLER
RETA Seller hereby represents and warrants to Buyer as of the Execution Date, the Development Completion Acknowledgement Date and the Closing Date, except for those representations and warranties that are made as of a specific date, as follows:
Section 4.1 Organization and Existence . RETA Seller is a public body of the State of New Mexico, politic and corporate, separate and apart from the state, constituting a governmental instrumentality for the performance of essential public functions.
Section 4.2 Authorization . RETA Seller has all requisite power and authority to enter into this Agreement and the Ancillary Agreements to which it is a party, to perform its obligations hereunder and thereunder and to consummate the Transactions. The execution, delivery and performance by RETA Seller of this Agreement and the Ancillary Agreements to which it is a party and the consummation by RETA Seller of the Transactions have been duly authorized by all necessary action on the part of RETA Seller. This Agreement and each Ancillary Agreement (a) have been duly and validly executed and delivered by RETA Seller and (b) constitute (assuming the due execution and delivery by Buyer and RETA Seller, as
applicable) a valid and legally binding obligation of RETA Seller, enforceable against RETA Seller in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other Laws relating to or affecting creditors’ rights generally and general equitable principles.
Section 4.3 Noncontravention . Except as set forth on Section 4.3 of Sellers’ Disclosure Letter (the “ RETA Seller Consents ”), the execution, delivery and performance of this Agreement and the Ancillary Agreements to which RETA Seller is a party by RETA Seller do not, and the consummation by RETA Seller of the Transactions will not (a) contravene or violate any statutory power of RETA Seller; (b) subject to obtaining the consents and approvals set forth in Section 4.4 of Sellers’ Disclosure Letter , conflict with or result in a material violation or breach of any term or provision of any Law applicable to RETA Seller; (c) contravene or violate any provision of, or result in the termination or acceleration of, or entitle any party to accelerate any obligation or Indebtedness under, any Assigned Contract or Transferred Permit to which RETA Seller is a party or by which RETA Seller is bound; or (d) result in the imposition or creation of any Lien upon or with respect to any of the Project Assets (other than Permitted Liens), except, in the case of clauses (c) and (d) , as would not, individually or in the aggregate, reasonably be expected to prevent or materially impair or delay the ability of RETA Seller to perform its obligations hereunder or consummate the Transactions.
Section 4.4 Governmental Approvals . (x) Except as set forth in Section 4.4 of Sellers’ Disclosure Letter (the “ RETA Seller Approvals ”), (y) other than consents and approvals that, if not obtained or made, would not, individually or in the aggregate, reasonably be expected to prevent or materially delay the ability of RETA Seller to perform its obligations hereunder or consummate the Transactions, and (z) and unless one or more notification filings, and the observance of any applicable waiting period, is required by the HSR Act, no consent or approval of any Governmental Entity is required for or in connection with the execution, delivery and performance by RETA Seller of this Agreement or the Ancillary Agreements to which RETA Seller is a party, or the consummation by RETA Seller of the Transactions.
Section 4.5 Legal Proceedings . Except as would not, individually or in the aggregate, reasonably be expected to prevent or materially impair or delay the ability of RETA Seller to perform its obligations hereunder or consummate the Transactions, as of the Execution Date, there are (i) no Claims pending or (ii) to RETA Seller’s Knowledge, no material Claims threatened, in each case, against RETA Seller with respect to the Project Assets or Assumed Liabilities before any Governmental Entity.
Section 4.6 Compliance with Laws . Except as set forth in Section 4.6 of Sellers’ Disclosure Letter , RETA Seller is in compliance, in all material respects, with all Laws applicable to the Project Assets or Assumed Liabilities or RETA Seller’s ownership, leasing, development, construction, energization, operation and maintenance thereof.
Section 4.7 Brokers . RETA Seller has no Liability or obligation to pay fees or commissions to any broker, finder or agent with respect to the Transactions for which Buyer or any of its Affiliates would become liable or obliged.
Section 4.8 No Other Representations or Warranties . Except for the representations and warranties contained in this Article IV , RETA Seller has not made any other express or implied representation or warranty to Buyer with respect to RETA Seller, the Project Assets, the Transactions or otherwise, and RETA Seller disclaims any other representations or warranties, whether made by RETA Seller, or any of its officers, directors, managers, employees, agents or representatives. Except for the representations and warranties contained in this Article IV , RETA Seller hereby disclaims all liability and responsibility for any representation, warranty, projection, forecast, statement or information made, communicated or furnished (orally or in writing) to Buyer or its Affiliates or representatives (including any information, projection or advice that may have been or may be provided or made available to Buyer or its Affiliates by any director, officer, manager, member, employee, agent, consultant or representative of RETA Seller).
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to each Seller, as of the Execution Date and the Closing Date, except for those representations and warranties that are made as of a specific date, as follows:
Section 5.1 Organization and Existence . Buyer is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of New Mexico. Buyer is duly qualified or licensed to do business in each other jurisdiction where the actions to be performed by it under this Agreement or any Ancillary Agreement to which it is a party makes such qualification or licensing necessary, except in any jurisdiction where the failure to be so qualified or licensed would not reasonably be expected to be material.
Section 5.2 Authorization . Buyer has all requisite corporate power and authority to enter into this Agreement and the Ancillary Agreements to which it is a party, to perform its obligations hereunder and thereunder and to consummate the Transactions. The execution, delivery and performance by Buyer of this Agreement and the consummation by Buyer of the Transactions have been duly authorized by all necessary action on the part of Buyer. This Agreement and each other Ancillary Agreement to which it is a party (a) have been duly and validly executed and delivered by Buyer and (b) constitute (assuming the due execution and delivery by each Seller) a valid and legally binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar Laws relating to or affecting creditors’ rights generally and general equitable principles.
Section 5.3 Noncontravention . Except as set forth on Section 5.3 of Buyer’s Disclosure Letter (the “ Buyer Consents ”), the execution, delivery and performance of this Agreement and the Ancillary Agreements to which Buyer is a party by Buyer do not, and the consummation by Buyer of the Transactions will not (a) contravene or violate any provision of the Organizational Documents of Buyer; (b) subject to obtaining the consents and approvals set forth in Section 5.4 of Buyer’s Disclosure Letter , conflict with or result in a violation or breach of any term or provision of any Law applicable to Buyer; or (c) contravene or violate any
provision of, or result in the termination or acceleration of, or entitle any party to accelerate any obligation or Indebtedness under, any material Contract or Permit to which Buyer is a party or by which Buyer is bound.
Section 5.4 Governmental Approvals . (x) Except as set forth in Section 5.4 of Buyer’s Disclosure Letter (the “ Buyer Approvals ”) and (y) unless one or more notification filings, and the observance of any applicable waiting period, is required by the HSR Act, no consent or approval of any Governmental Entity is required for or in connection with the execution, delivery and performance by Buyer of this Agreement or the Ancillary Agreements to which Buyer is a party, or the consummation by Buyer of the Transactions.
Section 5.5 Compliance with Laws . Buyer is not in violation of any applicable Law, except for violations that would not, individually or in the aggregate, reasonably be expected to prevent or materially delay or impair Buyer’s ability to perform its obligations under this Agreement and the Ancillary Agreements or consummate the Transactions.
Section 5.6 Legal Proceedings . Except as would not, individually or in the aggregate, reasonably be expected to prevent or materially impair or delay the ability of Buyer to perform its obligations hereunder or consummate the Transactions, as of the Execution Date, there are no Claims pending or, to Buyer’s Knowledge, threatened, against Buyer or otherwise affecting any of its assets or properties before any Governmental Entity.
Section 5.7 Brokers . Neither Buyer nor any of its Affiliates has any Liability or obligation to pay fees or commissions to any broker, finder or agent with respect to the Transactions for which either Seller or their respective Affiliates would become liable or obliged.
Section 5.8 Available Funds . At the Closing, Buyer will have all immediately available funds necessary for its payment in cash of the Purchase Price and the satisfaction of all of Buyer’s obligations under this Agreement. Buyer acknowledges and agrees that the receipt or availability of funds or financing by Buyer or any of its Affiliates will not be a condition to any of Buyer’s obligations hereunder. To Buyer’s Knowledge, no funds to be paid to WST Seller have derived or will have been derived from, or constitute, either directly or indirectly, proceeds of any criminal activity under any applicable anti-money laundering Laws.
Section 5.9 Buyer Ownership, Operations and Maintenance Permits . All Permits that are required to be obtained for the ownership, operation and maintenance of the Project Assets (including Buyer’s future use), including any Permits required under Environmental Laws, are set forth on Section 5.9 of Buyer’s Disclosure Letter .
Section 5.10 Information . Buyer (either alone or together with its advisors) has such knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its purchase of the Project Assets and Assumed Liabilities and is capable of bearing the economic risks of such purchase. Buyer’s acceptance of the Project Assets and Assumed Liabilities at the Closing shall be based upon its own investigation, examination and determination with respect thereto as to all matters and without reliance upon any express or implied representations or warranties of any nature made by or on behalf of or imputed to either Seller, except as expressly set forth in this Agreement or the Ancillary Agreements, and Buyer
specifically acknowledges and agrees that no representation or warranty has been made, and that Buyer has not relied on any representation or warranty as to any of the Project Assets or Assumed Liabilities, or the accuracy of any estimates or budgets, except as expressly set forth in this Agreement or the Ancillary Agreements, or any other information or documents made available to Buyer, its Affiliates or its or its Representatives. Buyer has engaged and relied on its own legal, tax and financial advisers for its evaluation of its decision to purchase the Project Assets and Assumed Liabilities and to enter into this Agreement and has not relied on the advice of either Seller’s legal, tax or financial advisers in connection therewith.
Section 6.1 Access to Information and Ongoing Diligence .(a) During the Interim Period, upon reasonable advance notice to Sellers and at reasonable times (subject to reasonable safety precautions), each Seller shall provide Buyer and its Representatives with access to, and the opportunity to make inspections of (i) such Seller’s premises and properties (including the Project) and (ii) the Books and Records and other information (including Tax records) held by such Seller, in each case, related to the Project Assets or the Assumed Liabilities, in each case, as reasonably requested by Buyer; provided , that neither Buyer nor any of its Affiliates or Representatives shall conduct any subsurface investigation or invasive inspection or testing of any environmental media without the prior written consent of each Seller (it being understood and agreed that (x) such consent may be withheld by either Seller in its sole discretion and (y) such Seller may have no such authority, whether contractual or otherwise, to consent to such undertakings with respect to such property); provided , further , that Buyer shall have the right to be present at the Project to observe all activities related to start-up, synchronization, testing and commissioning as well as the activities related to “Quality Control” in Annex 2 and pursuant to Section 1.2.1 of Annex 11 . Notwithstanding the foregoing, and without limiting the generality of the confidentiality provisions set forth in this Agreement or any Ancillary Agreement, no Seller shall be required to provide any information if (1) such disclosure would be reasonably likely to contravene any applicable Laws, Permits, Contracts, fiduciary duty or other binding obligation of such Seller, (2) such disclosure would be reasonably likely to jeopardize any attorney-client privilege or attorney work product protection or (3) such information is pertinent to any litigation in which such Seller or any of its Affiliates, on the one hand, and Buyer or any of its Affiliates, on the other hand, are adverse parties; provided , further , that nothing herein shall limit any Party’s rights to discovery in connection with any litigation. Any access to the Representatives, premises, properties, Books and Records and other information of each Seller shall be subject to the following additional limitations: (A) a Representative of such Seller shall have the right to be present when Buyer, any of its Affiliates or any of its Representatives conducts its inspection, (B) Buyer and its Representatives shall comply with all Laws and all safety rules of which WST Seller makes Buyer aware or has posted at the applicable premises or property and (C) Buyer shall (and shall cause its Affiliates and Representatives to) (I) use commercially reasonable efforts to perform all on-site due diligence reviews and all communications with any Person on an expeditious and efficient basis and (II) indemnify, defend and hold harmless the applicable Seller and its Affiliates and its Representatives from and against all losses incurred by such Seller, directly or
indirectly, resulting from physical damage to Persons or property arising out of the activities of Buyer, any of its Affiliates or any of its Representatives under this Section 6.1(a) ; provided that if a Seller receives any Recoveries in respect of any amounts paid by Buyer pursuant to this clause (II) , the amount of such Recoveries shall be repaid by the applicable Seller within twenty (20) days after receipt thereof (or credit therefor) by the applicable Seller, up to the aggregate amount of the payments made by Buyer to the applicable Seller pursuant to this clause (II) . The applicable Seller shall use commercially reasonable efforts to recover any losses for any physical damage to Persons or property arising out of the activities of Buyer, any of its Affiliates or any of its Representatives under this Section 6.1(a) pursuant to any insurance policy held by such Seller. The foregoing indemnification obligation in favor of the Sellers and their respective Affiliates shall survive the Closing or termination of this Agreement for a period of twelve (12) months. In addition to Buyer’s right of access to the Books and Records pursuant to Section 6.1(a)(ii) , WST Seller shall provide copies of the full set of Books and Records to Buyer for review no later than thirty (30) days prior to the anticipated Closing Date.
(b) None of Buyer, any of its Affiliates or any of its Representatives shall, prior to the Closing Date, initiate contact with any of the known employees, customers, suppliers, distributors, contractors, lenders, agents or parties (or Representatives of any of the foregoing) that have material business relationships with WST Seller or any of its Affiliates, or any Governmental Entity or Representative thereof, in connection with the Transactions, whether in person or by telephone, mail or other means of communication, without the prior written consent of WST Seller, not to be unreasonably withheld, conditioned or delayed; provided that, notwithstanding anything to the contrary in Section 11.1 , e-mail consent from any Representative of WST Seller shall suffice to satisfy the requirement hereunder that consent be given in writing and Buyer shall be entitled to rely on such e-mail consent for all purposes of this Section 6.1(b) ; provided , further , that nothing in this Section 6.1(b) shall prevent (i) contacts by Buyer in the ordinary course of business not specifically for purposes relating to the Transactions and (ii) contacts contemplated by this Agreement, including in connection with seeking Assigned Contract Consents, the transfer or reissuance of Transferred Permits, the FERC Approvals, the NMPRC Approval and the other Governmental Approvals.
Section 6.2 Conduct of Business Pending the Closing .(a) During the Interim Period, WST Seller shall use commercially reasonable efforts to perform or provide, or cause to be performed or provided, all necessary work and services required in connection with the development (which for the avoidance of doubt includes permitting), construction, financing, energization and testing of the Project. All such work and services performed by WST Seller shall be performed in accordance with Article I and otherwise in accordance with this Agreement.
(b) During the Interim Period, WST Seller shall use commercially reasonable efforts to (i) ensure that any warranties with respect to the Project are enforced to the fullest extent necessary to maintain the Project in accordance with Prudent Utility Practice and (ii) own and operate the Project in accordance with Prudent Utility Practice.
(c) During the Interim Period, RETA Seller shall act at all times in accordance with all applicable Laws and Permits and the terms and conditions of the Master Lease Agreement.
(d) During the Interim Period, except (w) as set forth on Section 6.2 of Sellers’ Disclosure Letter , (x) as contemplated by this Agreement, (y) as required by applicable Law, Permit or Assigned Contract or (z) as consented to in writing by Buyer, neither Seller shall:
(i) liquidate, dissolve, reorganize or otherwise wind up its business or operations; (ii) grant, impose or permit to exist any Liens on any Project Asset (other than Permitted Liens);(iii) enter into any Additional Assigned Contract, except for any EPC Contract, any Pre-Approved Real Property Agreement and Additional Assigned Contracts entered into with the consent of Buyer in accordance with Section 6.2(f) ;
(iv) amend, waive any material term of or terminate any Assigned Contract, or Additional Assigned Contract, in each case, except for:
(1) amendments and change orders that do not amend or modify (A) the Specifications in any material respect (or, if they do amend or modify the Specification in any material respect, unless the Independent Engineer has confirmed that any such amendment or modification does not impair the operation and maintenance of the Project relative to the Specifications), (B) any warranty rights or obligations under the applicable agreement or (C) any other material rights or obligations under the applicable agreement that survive the Closing Date;
(2) ministerial or immaterial amendments or waivers, in each case, that would not reasonably be expected to have an adverse impact on Buyer or its rights thereunder following the Closing; and
(3) amendments expressly required by the terms thereof as of the Execution Date or, in the case of Additional Assigned Contracts, as of the date of execution; or
(v) agree or commit to do any of the foregoing.(e) With respect to any Transferred Permits for which the date for renewal is reasonably expected to occur prior to the Closing Date, the applicable Seller shall file by the Closing Date all Permit Applications necessary to renew such Transferred Permits in a timely fashion without any material modifications to the terms of such Permits, except as may be required by applicable Law.
(f) Except for any EPC Contract, any Pre-Approved Real Property Agreement and the telecom and electric station service agreements as set forth in Items 1.a. and 1.b. on Section 6.2 of Sellers’ Disclosure Letter as of the Execution Date, neither Seller shall enter into
any Contract that would constitute an Assigned Contract and that (i) would result in a material change to the Project Assets or Assumed Liabilities expected to be transferred and assumed by Buyer, in a manner that is adverse to Buyer, measured against (1) the definition of the Project in the Recitals, (2) the Project Scope and Specifications set forth in Annex 2 , and (3) the Project Site as set forth in Annex 3 , including any change that would reasonably be expected to result in the failure of Sellers to acquire indefeasible and perpetual rights to a contiguous route for the transmission line portion of the Project (a material change adverse to Buyer being deemed to have occurred if entering into such Contract is intended to or would result in a change to the route for the transmission line set forth on Annex 3 (other than immaterial changes to the route) not previously approved in writing by Buyer); or (ii) includes material continuing liabilities or obligations after Closing that Buyer will be obligated to assume (and which liabilities or obligations would not reasonably be expected to be recoverable through the incremental rates approved, or expected to be approved, in the FERC 205 Approval) (each such Contract, an “ Additional Assigned Contract ”) without the prior written consent of Buyer (not to be unreasonably withheld, conditioned or delayed). Within five (5) Business Days following the Execution Date, Buyer shall designate to the Sellers in writing two (2) of its Representatives as the point of contact for any such requests relating solely to entering into any Contract involving Real Property, which Representatives may be replaced by Buyer from time to time by written notice to Sellers (such designated Representatives and any replacements, the “ Designated Representatives ”). Notwithstanding anything to the contrary in Section 11.1 , e-mail consent from any Designated Representative of Buyer relating solely to entering into any Contract involving Real Property shall suffice to satisfy the requirement hereunder that consent to entering into such Contracts involving Real Property be given in writing and each Party shall be entitled to rely on such e-mail consent for all purposes of this Section 6.2(f) .
(g) Notwithstanding anything to the contrary in this Section 6.2 , either Seller shall be permitted to take such actions as it reasonably deems necessary to prevent the occurrence of, or mitigate the effects of, damage to property or injury to persons under emergency circumstances; provided that such Seller shall provide Buyer with notice of such action as soon as reasonably practicable.
(h) During the Interim Period, each Party shall promptly (but in any event within five (5) Business Days) notify the other Party of any Claim from any Person (including any Governmental Entity) against such Party or affecting any of its respective assets, in each case, that has resulted or would reasonably be expected to result in the failure of any conditions set forth in Article VII to be satisfied.
(i) In the event that any eminent domain proceedings, condemnation proceedings or similar proceedings are reasonably expected to be commenced with respect to any property that may become a part of the Real Property, the Project or the Project Site, WST Seller and RETA Seller shall, as soon as commercially practicable, confer in good faith with Buyer regarding the handling of such proceedings and their effects prior to implementing such proceedings; provided , however , for the avoidance of doubt, Buyer shall not have any approval right over RETA Seller’s decision to exercise its eminent domain, condemnation or similar powers with respect to any such property or the handling of such proceedings by either Seller.
Section 6.3 Assigned Contracts .(a) During the Interim Period, WST Seller and RETA Seller, at WST Seller’s sole cost and expense, shall obtain the WST Seller Consents and RETA Seller Consents and any other consents required of any party to an Assigned Contract that are required in order for consummation of the transactions contemplated by Section 2.1 not to contravene or violate any provision of any Assigned Contract (collectively, the “ Assigned Contract Consents ”), and Buyer shall provide reasonable cooperation related thereto. With respect to any Assigned Contract to which Buyer is the Counterparty, Buyer hereby consents to the assignment of such Assigned Contract by the applicable Seller to Buyer. For the avoidance of doubt, any payment required to be made to any Counterparty or to any other party in connection with obtaining the WST Seller Consents and RETA Seller Consents shall be at the sole cost and expense of WST Seller.
(b) Notwithstanding WST Seller’s obligations pursuant to Sections 2.1(d) , 6.3(a) and 7.1(g) , if WST Seller reasonably believes that any Assigned Contract Consent may not be obtained at or prior to the Closing, WST Seller and Buyer shall discuss and Buyer shall consider in good faith entering into a commercially reasonable alternative arrangement that will place Buyer and the applicable Seller in the same or substantially similar position, and provide Buyer with the same or substantially similar rights, privileges and benefits, in each case, as if such Assigned Contract Consent had been obtained.
(c) Following the Closing, Sellers shall reasonably cooperate with Buyer in Buyer’s efforts to provide any notices to Counterparties to any Assigned Contracts as Buyer (acting reasonably) may deem necessary, including notices providing Counterparties with updated notice information and updated bank account information to which any applicable payments should be made by such Counterparties.
Section 6.4 Permits .(a) During the Interim Period, to the extent that the consent or approval of any Governmental Entity is required in order for the consummation of the transactions contemplated by Section 2.1(c) not to contravene or violate any provision of any Transferred Permit or Permit Application or applicable Law (for the avoidance of doubt, excluding any Construction Permit), the applicable Seller(s) shall either transfer to Buyer, or obtain the reissuance in Buyer’s name of, each such Transferred Permit or Permit Application at the Closing (and Buyer shall provide reasonable cooperation related thereto). Sellers and Buyer shall have the right to review in advance all characterizations of the information relating to the Transactions which appear in any document to be submitted in connection with any filings to transfer any Transferred Permit or Permit Application, and the filing Party shall consider in good faith any comments reasonably requested by the non-filing Parties.
(b) Notwithstanding WST Seller’s obligations pursuant to Sections 2.1(c) , 6.4(a) and 7.1(h) , if WST Seller reasonably believes that it may be unable to obtain the transfer or reissuance of any Transferred Permit or Permit Application to Buyer at or prior to the Closing, WST Seller and Buyer shall discuss and Buyer shall consider in good faith entering into a commercially reasonable alternative arrangement that, to the extent permitted by applicable Law and without violating the terms of such Transferred Permit or Permit Application, will place Buyer and the applicable Seller in the same or substantially similar position, and provide Buyer
with the same or substantially similar rights, privileges and benefits, in each case, as if such Transferred Permit or Permit Application had been transferred or reissued to Buyer.
(c) If the applicable Governmental Entity requires that Buyer apply for the Bernalillo County Approvals, rather than WST Seller, Buyer shall apply for the Bernalillo County Approvals as soon as practicable and on a timeline consistent with obtaining such Bernalillo County Approvals prior to the expected Commercial Operation Date. In furtherance of the foregoing, if applicable, Buyer shall include WST Seller in the process of obtaining the Bernalillo County Approvals and any similar Permits required for the Pajarito Switching Station, including (i) promptly informing WST Seller of any material communication received from such applicable Governmental Entity with respect to the Bernalillo County Approvals and/or such Permits, (ii) permitting WST Seller to have reasonable time and opportunity (and in no event less than ten (10) Business Days) to review and comment on the application (including accompanying exhibits and amendments thereto) and any other filings or statements in connection with the Bernalillo County Approvals and/or such Permits and will consider in good faith the incorporation of any comments reasonably requested by WST Seller, and (iii) providing WST Seller the opportunity (if permitted by applicable Law) to participate in any in person meetings, teleconferences, or other correspondence that Buyer has with such applicable Governmental Entity in connection with the Bernalillo County Approvals and/or such Permits. If WST Seller applies for the Bernalillo County Approvals, WST Seller shall include Buyer in the process of obtaining such approvals, including with respect to the topics covered in clauses (i) through (iii) above.
(d) For the avoidance of doubt, the NMPRC Approval, the FERC Approvals and the other Governmental Approvals shall be governed by Section 6.6 and not this Section 6.4 .
Section 6.5 Publicity; Confidentiality .(a) Neither Buyer nor either Seller or any of their respective Affiliates will disseminate any press release or other public announcement or disclosure concerning this Agreement, the Transactions or the Closing without the prior written consent of each of the other Parties (which consent shall not be unreasonably withheld, conditioned or delayed), except as may be required by applicable Law, Governmental Entity or Permit (including any rules of an applicable securities exchange); provided that, notwithstanding anything to the contrary in Section 11.1 , e-mail consent from any Representative of any Party shall suffice to satisfy the requirement hereunder that consent be given in writing and each Party shall be entitled to rely on such e-mail consent for all purposes of this Section 6.5(a) . Notwithstanding the foregoing, without prior written consent of the other Parties, each Party may disseminate information substantially consistent with information included in a press release or other document previously approved for external distribution by the other Parties pursuant to the first sentence of this Section 6.5(a) , and each Party may make disclosures concerning this Agreement or the other Transactions in connection with its communications to such Governmental Entities pursuant to and in accordance with Section 6.6 .
(b) From and after the Execution Date and for a period of two (2) years after the Closing Date, each Party shall maintain the confidentiality of any information provided by or on behalf of any other Party, whether in oral or written form, in connection with this Agreement,
any Ancillary Agreement and the Transactions, including this Agreement itself and any Ancillary Agreement, or that relates to the Project, the Project Assets or the Assumed Liabilities (collectively, “ Confidential Information ”); provided that the restrictions in this Section 6.5(b) shall not apply to any information that (i) is or becomes publicly available through no act of the receiving Party or its Representatives in breach hereof; (ii) was in receiving Party’s or its Representatives possession prior to its disclosure hereunder or under the MOU; (iii) is independently developed by receiving Party or its Representatives; (iv) is received by receiving Party or its Representatives from an outside source without any restriction on use or disclosure; (v) is required by applicable Law to be disclosed, but then only to the extent required by applicable Law, including with respect to information required to be disclosed in connection with any regulatory proceeding or for U.S. Securities and Exchange Commission disclosure purposes, or (vi) has been specifically identified by disclosing Party as not being Confidential Information; provided , further , that nothing in this Section 6.5(b) shall limit any disclosures by any Party to the extent that such disclosure is reasonably deemed necessary by such Party to comply with such Party’s obligations under Section 6.3 , Section 6.4 and Section 6.6 . No Party shall use Confidential Information for any purpose other than in connection with the Transaction or in connection with the acquisition, development, construction, energization, operation and maintenance of the Project. The receiving Party agrees to return, or at its option, destroy, all originals and all copies of all documents or other media containing disclosing Party’s Confidential Information (or any work product derived therefrom) to the disclosing Party upon written request, other than to the extent stored as part of customary computer back up procedures, or as retained in accordance with its customary reasonable document retention policies, in which case such retained Confidential Information shall remain subject to this Section 6.5 . The receiving Party may disclose Confidential Information to those of its Representatives, its Affiliates’ Representatives and current or prospective financing parties and investors as is necessary in connection with the Transactions or the development or construction of the Project; provided that any such Representative (other than any Representative bound by professional obligations of confidentiality), financing party or investor is bound by substantially similar confidentiality terms as those herein. The receiving Party shall be liable for any breach of confidentiality by its Representatives.
(c) The Parties understand that pursuant to NMSA 1978, Section 62-16A-16, proprietary technical or business information is exempt from inspection pursuant to the Inspection of Public Records Act (“ IPRA ”), NMSA 1978, Section 14-2-1 et. seq., and pursuant to 17.8.2.9 NMAC, RETA Seller is authorized to enter into confidentiality agreements with other parties as necessary. Each Party acknowledges and agrees that if a receiving Party of Confidential Information hereunder is served with any notice or request that disclosure of any Confidential Information is required by applicable Law, including but not limited to subpoenas requiring that Party to produce, release or disclose Confidential Information, or requests to produce Confidential Information under IPRA to RETA Seller or, in Buyer’s case, in connection with a matter subject to the jurisdiction of the NMPRC, that receiving Party shall immediately notify the disclosing Party of the specified Confidential Information and allow that disclosing Party, at its sole expense and cost, to challenge the process of law, including any subpoena, or assist with resisting the production of any documents by RETA Seller in response to an IPRA request.
Section 6.6 Regulatory Approvals .(a) It is agreed and acknowledged by Buyer, the Sellers, Pattern Wind and its successors and assigns and any Affiliate of WST Seller that is a party to the Transmission Service Agreements that on a timeline consistent with the Project Schedule but in no event earlier than execution of the Transmission Service Agreements by Buyer and Pattern Wind, Buyer, shall file with FERC an application to obtain an order from FERC pursuant to Section 205 of the Federal Power Act authorizing Buyer to use incremental rates for the Transmission Service Agreements that will account for (i) the costs of any network upgrades required pursuant to the LGIAs and the Wires-to-Wires Agreement, (ii) the Project Costs to be paid by Buyer pursuant to this Agreement and (iii) subject to Section 6.21(c) , the costs to be paid by Buyer to complete the Punch List Items (such order, the “ FERC 205 Approval ” and the date of application, the “ FERC 205 Filing Date ”), provided that the prudently anticipated and reasonably estimated Projects Costs as of the FERC 205 Filing Date would result in a rate that is above Buyer’s embedded transmission rates as of the FERC 205 Filing Date. For the avoidance of doubt, for purposes of this Agreement, a FERC 205 Approval shall only be considered to have been obtained if the applicable order(s) from FERC is final and non-appealable under Section 313 of the Federal Power Act and accepts Transmission Service Agreements with the requested incremental rates described above.
(b) Sellers and Buyer shall draft and file with FERC, on the FERC 205 Filing Date, a mutually-agreed upon joint application to obtain an order pursuant to Section 203 of the Federal Power Act authorizing Buyer’s acquisition of the Project which includes the costs underlying the incremental rates as approved pursuant to the FERC 205 Approval (such order, the “ FERC 203 Approval ” and together with the FERC 205 Approval, the “ FERC Approvals ”). For the avoidance of doubt, for purposes of this Agreement, a FERC 203 Approval shall only be considered to have been obtained if the applicable order(s) from FERC is final and non-appealable under Section 313 of the Federal Power Act.
(c) If necessary to lawfully consummate the Transactions, at least sixty (60) days prior to the expected Closing Date, Sellers and Buyer shall make any notification filings, and observe any applicable waiting periods, as may be required pursuant to the HSR Act (“ HSR Clearance ”).
(d) It is agreed and acknowledged by Buyer, the Sellers, Pattern Wind and its successors and assigns and any Affiliate of WST Seller that is a party to the Transmission Service Agreements that on a timeline consistent with the Project Schedule, Buyer, with assistance from Sellers, shall apply to the NMPRC for the NMPRC Approval to acquire or operate the Project Assets pursuant to this Agreement.
(e) Each Party shall, in order to consummate the Transactions, provide commercially reasonable cooperation to the other Parties, and proceed diligently and in good faith and use commercially reasonable efforts, as promptly as practicable, to take, or cause to be taken, and to do, or cause to be done, all things necessary or advisable to obtain the NMPRC Approval, the FERC Approvals, the HSR Clearance (if required) and the other Governmental Approvals, and cooperate in good faith with the applicable Governmental Entities, abide by the directives (from NMPRC or otherwise) of the applicable Governmental Entities and provide promptly such other information and communications to such Governmental Entities as such Governmental Entities may request in connection therewith. Any filing fees required in