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Exhibit 10.2
 
EXECUTION VERSION
 

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PURCHASE AGREEMENT
 
 
BY AND AMONG
 
 
CALPINE ACADIA HOLDINGS, LLC
 
 
AS SELLER
 
 
 
AND
 
 
ACADIA POWER HOLDINGS, LLC
 
 
AS BUYER
 
 
 
 
 
Dated as of April 23, 2007
 

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TABLE OF CONTENTS
Page
 

ARTICLE 1 PURCHASE AND SALE OF THE OWNERSHIP INTERESTS AND RELATED ASSETS
 6

 

     1.1. Transfer of Ownership Interests and Related Assets
6
     1.2. Excluded Assets
6
     1.3. Assumption of Liabilities
7
     1.4. Excluded Liabilities
8
     1.5. Non-Assignment of Assigned Contracts
8

 
ARTICLE 2 CONSIDERATION
 8

 

     2.1. Consideration
8
      2.2. Deposits   
8
     2.3. Signing Date Deliverables
9

 
ARTICLE 3 CLOSING AND DELIVERIES
 9

 

     3.1. Closing
9
      3.2. Seller’s Deliveries
9
     3.3. Buyer’s Deliveries
10

 
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER
 10

 

     4.1. Corporate Organization
10
     4.2. Authorization and Validity
10
     4.3. No Conflict or Violation
11
     4.4. Seller Consents
11
     4.5. Seller’s Ownership Interests
        11
     4.6. Corporate Organization
 11
     4.7. No Unauthorized Action
 12
     4.8. Ownership of Property at Power Plant Site
 12
     4.9. Capitalization of the Company
 12
     4.10. Compliance with Law
 12
     4.11. Litigation
 12
     4.12. Material Contracts
 13
     4.13. Permits
 13
     4.14. Environmental Matters
 13
     4.15. Owned Real Property
 13

 
 
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     4.16. Regulatory Status
14

 
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER
 14

 

     5.1. Corporate Organization
14
     5.2. Authorization and Validity
14
     5.3. No Conflict or Violation
14
     5.4. Consents, Approvals and Notifications
15
     5.5. Availability of Funds
        15
     5.6. Licenses, Permits, etc.
 15
     5.7. Investigation by Buyer
 15
     5.8. Acquisition as Investment
 16
     5.9. Adequate Assurances Regarding Assigned Contracts
 16
     5.10. Knowledge of Claims
 16

 

ARTICLE 6 COVENANTS OF SELLER
 16

 

     6.1. Actions Before Closing
16
     6.2. Conduct of Business Before the Closing Date
16
     6.3. Orders
17
     6.4. Consents and Approvals
17
     6.5. Access to Properties and Records; Confidentiality
        17
     6.6. Rejection of Assigned Contracts
 18
     6.7. Further Assurances
 18
     6.8. Notices
 18
     6.9. Provision of Data; Transfer of Software
 18

 
ARTICLE 7 COVENANTS OF BUYER
 18

 

     7.1. Actions Before Closing Date
18
     7.2. Consents, Approvals and Notifications
18
     7.3. Notices
19
     7.4. Payment Obligations; Claims   
19
     7.5. Settlement of Certain Claims
        19
     7.6. Reasonable Assistance
 19
     7.7. Waiver of Confidentiality
 19
     7.8. Metering Claim Payment
 20

 

ARTICLE 8 BANKRUPTCY PROCEDURES
 20

 

     8.1. Bankruptcy Actions
20

 
 
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     8.2. Bidding Procedures
20
     8.3. Review of Filings
20

 

ARTICLE 9 REGULATORY MATTERS
 21

 

     9.1. Regulatory Filings
21
      9.2. Cooperation; Confidentiality Agreement    
21
     9.3. Objections or Other Challenges
 22

 

ARTICLE 10 TAXES
 22

 

    10.1. Taxes Related to Purchase of Ownership Interests and Related Assets 
22
    10.2. Proration of Real and Personal Property Taxes
23
    10.3. Cooperation on Tax Matters
23
    10.4. Retention of Tax Records       
23
     10.5. Allocation of Purchase Price and Purchase Price Allocation Forms     
        24
    10.6. Unbilled Transactional Taxes
 24
    10.7. Aquila Termination Fee
24

 
ARTICLE 11 CONDITIONS PRECEDENT TO PERFORMANCE BY PARTIES
 24

 

     11.1. Conditions Precedent to Performance by Seller and Buyer
24
     11.2. Conditions Precedent to Performance by Seller
25
     11.3. Conditions Precedent to the Performance by Buyer
25

 

ARTICLE 12 TERMINATION AND EFFECT OF TERMINATION
 26

 

     12.1. Right of Termination
26
     12.2. Termination Without Default
26
     12.3. Effect of Failure of Seller’s Conditions to Closing
27
     12.4. Effect of Failure of Buyer’s Conditions to Closing
28
     12.5. Termination on Alternative Transaction
 28

 

ARTICLE 13 MISCELLANEOUS
30

 

     13.1. Successors and Assigns
30
     13.2. Governing Law; Jurisdiction
30
     13.3. Disclosure Schedule Supplements
30
     13.4. Warranties Exclusive
30
     13.5. Survival of Representations and Warranties
 31
     13.6. No Recourse Against Third Parties
 31
     13.7. Mutual Drafting
 31

 
 
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     13.8. Expenses
31
     13.9. Broker’s and Finder’s Fees
32
     13.10. Severability
32
     13.11. Notices
32
     13.12. Amendments; Waivers
 33
     13.13. Schedules
 34
     13.14. Public Announcements
 34
     13.15. Entire Agreement
 34
     13.16. Parties in Interest
 34
     13.17. Headings
 34
     13.18. Construction
 34
     13.19. Currency
 35
     13.20. Time of Essence
 35
     13.21. Counterparts
 35
     13.22. Damages
 35

 

ARTICLE 14 DEFINITIONS
35

 

     14.1. Certain Terms Defined
35
     14.2. All Terms Cross-Referenced
45

 
 
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EXHIBITS
 
 

 Exhibit A-1
 Form of Guaranty
 Exhibit A-2
 Form of Management Committee Resolutions
 Exhibit B-1
 Form of Membership Transfer Agreement
 Exhibit B-2 
 Form of Bill of Sale
 Exhibit B-3 
 Form of Assumption Agreement
 Exhibit B-4
 Non-Foreign Status Certificate
 Exhibit B-5
 Release Agreement
 Exhibit C
 [RESERVED]
 Exhibit D
 Form of Sale Order
 Exhibit E
 Form of Bidding Procedures Order
 Exhibit F  
 Claims Settlement Agreement
 Exhibit G
 O&M Transfer Agreement
 Exhibit H
 Confidentiality Agreement
 Exhibit I 
 Funding Side Letter
 Exhibit J
 Claims Settlement Order

 
    
DISCLOSURE SCHEDULES
 

 Schedule 1.1(a)  Related Assets  Schedule 1.1(b) Assigned Contracts  Schedule
1.2(b) Calpine Marks  Schedule 1.2(d)  Excluded Assets  Schedule 1.4  Excluded
Liabilities  Schedule 4.4 Seller Consents  Schedule 4.9 Capitalization of the
Company  Schedule 4.10  Compliance with Law  Schedule 4.11  Litigation  Schedule
4.12  Material Contracts  Schedule 4.13  Permits  Schedule 4.14  Environmental
Matters  Schedule 4.15  Owned Real Property  Schedule 5.4 Buyer Consents
 Schedule 10.5 Allocation of Purchase Price  Schedule 11.1(b) Antitrust and
Regulatory Approvals

 
 
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PURCHASE AGREEMENT
 
THIS PURCHASE AGREEMENT (this “Agreement”), dated as of April 23, 2007, is made
by and between Calpine Acadia Holdings, LLC, a Delaware limited liability
company (the “Seller”), and Acadia Power Holdings, LLC, a Louisiana limited
liability company (“Buyer”). Capitalized terms used in this Agreement are
defined or cross-referenced in Article 14.
 
BACKGROUND INFORMATION
 
WHEREAS, Seller is an indirect wholly owned subsidiary of Calpine Corporation
(“Calpine”), a Delaware corporation;
 
WHEREAS, on December 20, 2005, Calpine and its debtor Affiliates, including
Seller, filed voluntary petitions for relief under the Bankruptcy Code in the
Bankruptcy Court;
 
WHEREAS, on the terms and subject to the conditions set forth in this Agreement,
Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, the
Ownership Interests and Related Assets, in a sale authorized by the Bankruptcy
Court pursuant to, inter alia, sections 105, 363, and 365 of the Bankruptcy
Code;
 
WHEREAS, it is intended that the acquisition of the Ownership Interests and
Related Assets would be accomplished through the sale, transfer and assignment
of the Ownership Interests and Related Assets by Seller to Buyer;
 
WHEREAS, Buyer is willing to assume (or cause one of its Affiliates to assume),
and Seller desires to assign and transfer to Buyer (or one of its Affiliates),
the Assumed Liabilities;
 
NOW, THEREFORE, in consideration of the foregoing and of their respective
representations, warranties, covenants and undertakings herein contained, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller and Buyer hereby agree as follows:
 
 
ARTICLE 1  
PURCHASE AND SALE OF THE OWNERSHIP INTERESTS AND RELATED ASSETS
 
1.1.  Transfer of Ownership Interests and Related Assets. At the Closing, and
upon the terms and subject to the conditions set forth herein, Seller shall
sell, assign and transfer to Buyer free and clear of all Liens (other than
Permitted Liens and Assumed Liabilities), and Buyer shall acquire from Seller,
all of Seller’s right, title and interest in, to and under the Ownership
Interests and the Related Assets.
 
1.2.  Excluded Assets. Notwithstanding anything to the contrary in this
Agreement, the Ownership Interests and the Related Assets are the only
properties and assets transferred to Buyer under this Agreement. Without
limiting the generality of the foregoing, the Ownership Interests and Related
Assets do not include (i) any right, title or interest of any Person
 
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other than Seller in any property or asset, or (ii) the properties and assets of
Seller listed or described in this Section 1.2, any of which Seller may transfer
to its Affiliates prior to Closing (all properties and assets not being acquired
by Buyer are herein referred to as the “Excluded Assets”):
 
(a)  without in any way limiting the effect of, and subject to, the Release
Agreement, any and all rights, demands, claims, credits, allowances, rebates,
causes of action, known or unknown, pending or threatened (including all causes
of action arising under sections 510, 544 through 551 and 553 of the Bankruptcy
Code or under similar state Laws including fraudulent conveyance claims, and all
other causes of action of a trustee and debtor-in-possession under the
Bankruptcy Code) or rights of set-off (collectively, “Claims”), of Seller or any
Affiliate of Seller, including (i) Claims arising out of or relating in any way
to the Chapter 11 Case or any of the transactions contemplated thereby or
entered into as a consequence thereof, including any claims (as defined in
section 101(5) of the Bankruptcy Code) filed, scheduled or otherwise arising in
the Chapter 11 Case, and (ii) all rights and Claims of Seller against any
Affiliate of Seller, including, following the effectiveness of the Claims
Settlement Agreement, the Seller CES Claim and the Seller Calpine Claim;
 
(b)  all rights to or goodwill represented by or pertaining to all names, marks,
trade names, trademarks and service marks incorporating the name Calpine, the
Calpine “C” or any other name set forth on Schedule 1.2(b)(I) (the “Calpine
Marks”), including those in the locations set forth on Schedule 1.2(b)(II) and
any brand names or derivatives thereof no matter how used, whether as a
corporate name, domain name or otherwise and including the corporate design logo
associated with any Calpine Mark or variant of any Calpine Mark
 
(c)  all Retained Books and Records; and
 
(d)  all assets set forth on Schedule 1.2(d).
 
1.3.  Assumption of Liabilities. At the Closing, Buyer shall assume (or cause
one of its Affiliates to assume), and Buyer (or such Affiliate) shall thereafter
pay, perform and discharge when due the following liabilities (collectively, the
“Assumed Liabilities”):
 
(a)  without in any way limiting the effect of, and subject to, the Release
Agreement, all liabilities and obligations of Seller under the LLC Agreement and
of Calpine Central, L.P. and Calpine Operating Services Company, Inc. under the
other Assigned Contracts;
 
(b)  all liabilities and obligations of Seller for Transaction Taxes payable in
connection with the transactions contemplated by this Agreement;
 
(c)  all liabilities and obligations of Seller, any of its Affiliates or any of
their respective Related Persons, including vicarious liability, arising under
or relating to any environmental, health or safety matter (including any
liability or obligation arising under
 
7

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any Environmental Law) attributable to such Person’s ownership (directly or
indirectly) or operation of the Company and the Business; and
 
(d)  all liabilities and obligations relating to or arising from the operation
of the Business or the ownership of the Ownership Interests and Related Assets
after the Closing Date, including all liabilities and obligations for any Taxes
relating to the Ownership Interests and Related Assets for periods after the
Closing Date.
 
Effective upon the Release Effective Date, the parties acknowledge and agree
that all liabilities and obligations of the Company, including all liabilities
and obligations of the Company for real estate Taxes and assessments that are
not yet due and payable and all liabilities and obligations of the Company that
are assessed against Buyer or Seller on a theory of piercing the corporate veil,
shall, following the Release Effective Date, be retained by the Company (but,
for the avoidance of doubt, without limiting Seller’s obligations pursuant to
the last sentence of Section 10.2).
 
1.4.  Excluded Liabilities. Seller shall retain all liabilities and obligations
that are not Assumed Liabilities (the “Excluded Liabilities”), including those
listed on Schedule 1.4 of the Disclosure Schedules. 
 
1.5.  Non-Assignment of Assigned Contracts. Notwithstanding anything contained
herein to the contrary: (i) this Agreement shall not constitute an agreement to
assign any Assigned Contract if, after giving effect to the provisions of
sections 363 and 365 of the Bankruptcy Code, an attempted assignment thereof,
without obtaining a Consent, would constitute a breach thereof or in any way
negatively affect the rights of Seller or Buyer, as the assignee of such
Assigned Contract and (ii) no breach of this Agreement shall have occurred by
virtue of such nonassignment. Any assignment to Buyer of any Assigned Contract
that shall, after giving effect to the provisions of sections 363 and 365 of the
Bankruptcy Code, require the Consent of any third party for such assignment as
aforesaid shall be made subject to such Consent being obtained.
 
 
ARTICLE 2 
CONSIDERATION
 
2.1.  Consideration If the Closing occurs, the aggregate consideration for the
sale, assignment and transfer of the Ownership Interests and Related Assets
shall be (a) $60,000,000.00 in cash (the “Closing Purchase Price”) which amount
is payable and deliverable at the Closing in accordance with Section 3.3 plus
(b) the RFP Success Payment, if applicable, and (c) the Asset Transfer Payment,
if applicable (clauses (a) through (c) collectively the “Purchase Price”), plus
(d) the Priority Present Value plus (e) the assumption by Buyer of the Assumed
Liabilities.
 
2.2.  Deposits. On the date hereof, Buyer and Seller have executed and delivered
the Purchase Notice, and Buyer has deposited with the Escrow Agent $5,000,000.00
(the “Initial Deposit”). Upon the Bankruptcy Court’s entry of the Sale Order, or
if a qualifying bid has been received in accordance with the Bidding Procedures,
no later than the Business Day prior to the Auction, Buyer shall deposit with
the Escrow Agent an additional $5,000,000.00, (the
 
8

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“Additional Deposit,” and together with the Initial Deposit, the “Deposits”).
The Deposits and interest thereon shall be held and disbursed pursuant to the
terms of the Master Escrow Agreement, the Purchase Notice, and this Agreement.
 
2.3.  Signing Date Deliverables. On the date hereof, (a) the Guarantor shall
execute and deliver to Seller the Guaranty substantially in the form of Exhibit
A-1 hereto; (b) each of Buyer and Seller shall execute and deliver and have
caused the Company and their Affiliates to execute, as applicable, a copy of (i)
the Management Committee Resolutions, in the form attached hereto as Exhibit
A-2, (ii) the Claims Settlement Agreement, in the form attached hereto as
Exhibit F, (iii) the O&M Transfer Agreement, in the form attached hereto as
Exhibit G; and (iv) the Funding Side Letter, in the form attached hereto as
Exhibit I (the “Funding Side Letter”) and (c) each of Calpine Corporation and
Cleco Corporation shall have executed and delivered and have caused the Company
and their respective Affiliates, as applicable, to execute and deliver a copy of
the Release Agreement in the form attached hereto as Exhibit B-5 (the “Release
Agreement”).
 
 
ARTICLE 3
CLOSING AND DELIVERIES
 
3.1.  Closing. The consummation of the transactions contemplated hereby (the
“Closing”) shall take place at the offices of Kirkland & Ellis LLP, 153 East
53rd Street, New York, New York at 9:00 a.m. on the third Business Day following
the satisfaction or waiver by the appropriate party of all the conditions
contained in Article 11 hereof, or on such other date or at such other place and
time as may be agreed to by the parties hereto (the “Closing Date”).
 
3.2.  Seller’s Deliveries. On the Closing Date, Seller shall deliver to Buyer
the following items:
 
(a)   a membership transfer agreement for the Ownership Interests, duly executed
by Seller and in the form attached hereto as Exhibit B-1;
 
(b)  a bill of sale with respect to the Related Assets, duly executed by Seller
and in the form attached hereto as Exhibit B-2.
 
(c)  an assumption agreement, duly executed by Seller and in the form attached
hereto as Exhibit B-3;
 
(d)  an affidavit of non-foreign status that complies with section 1445 of the
Code, duly executed by CPN Acadia, Inc. and in the form attached hereto as
Exhibit B-4; and
 
(e)  the Business Records (it being understood that any Business Records located
at the Power Plant need not be physically delivered, but shall be deemed
delivered at the Closing).
 
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3.3.  Buyer’s Deliveries. On the Closing Date, in payment for the Ownership
Interests and Related Assets (other than the Metering Claims Payment, which is
for the consideration described in the definition thereof):
 
(a)  the Escrow Agent shall pay to Seller the Deposits in accordance with the
terms of the Master Escrow Agreement and the Purchase Notice, by wire transfer
of immediately available funds to a bank account designated by Seller in writing
to the Escrow Agent and Buyer (the “Seller’s Account”) (with interest on the
Deposit being paid by the Escrow Agent to Buyer according to the Master Escrow
Agreement);
 
(b)  Buyer shall pay to Seller the Closing Purchase Price, reduced by the amount
of the Deposits paid pursuant to Section 3.3(a) and by the amount payable by
Seller under Section 10.2, by wire transfer of immediately available funds to
Seller’s Account;
 
(c)  Buyer shall deliver to Seller (i) a membership transfer agreement with
respect to the Ownership Interests, duly executed by Buyer and substantially in
the form attached as Exhibit B-1 hereto, and (ii) an assumption agreement, duly
executed by Buyer and substantially in the form attached hereto as Exhibit B-3;
and
 
(d)  Buyer shall pay to Seller the Metering Claims Payment by wire transfer of
immediately available funds to Seller’s Account.
 
 
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
 
Seller hereby represents and warrants to Buyer as follows, except in all cases
as disclosed in the Disclosure Schedules, as the same may be amended or modified
in accordance with Section 13.3 hereof:
 
4.1.  Corporate Organization. Seller is duly organized and validly existing
under the Laws of the jurisdiction of its organization. Subject to any necessary
authority from the Bankruptcy Court, Seller has all requisite power and
authority to own its properties and assets and to conduct its business as now
conducted.
 
4.2.  Authorization and Validity. Subject to the Bankruptcy Court’s entry of the
Sale Order and the receipt of the Consents set forth on Schedule 4.4 of the
Disclosure Schedules, Seller has all requisite power and authority to enter into
this Agreement and the Transaction Documents to which it is or will be a party
and to carry out its obligations hereunder and thereunder. Subject to the entry
of the Sale Order, the execution and delivery of this Agreement and the
Transaction Documents and the performance by Seller of its obligations hereunder
and thereunder have been duly authorized by all necessary action by the board of
managers of Seller, and no other proceedings on the part of Seller are necessary
to authorize such execution, delivery and performance. This Agreement and the
Transaction Documents have been or will be duly executed by Seller and, subject
to the Bankruptcy Court’s entry of the Sale Order, constitutes or will
constitute, when executed, its valid and binding obligation, enforceable against
it in accordance with the terms herein and therein.
 
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4.3.  No Conflict or Violation. Subject to (a) the receipt of all Consents set
forth on Schedule 4.4 of the Disclosure Schedules, (b) the Bankruptcy Court’s
entry of the Sale Order and (c) the receipt of the Antitrust Approvals, the
execution, delivery and performance by Seller of this Agreement and the
Transaction Documents do not and will not (i) violate or conflict with any
provision of the certificate of incorporation or by-laws (or equivalent
organizational documents) (collectively, the “Organizational Documents”) of
Seller or (ii) violate any provision of law, regulation, rule or other legal
requirement of any Government (“Law”) or any order, judgment or decree of any
court or Government (“Order”) applicable to Seller, or (iii) violate or result
in a breach of or constitute (with due notice or lapse of time or both) a
default under any Assigned Contract, which violation, conflict, breach or
default in any such case would constitute, individually or in the aggregate, a
Material Adverse Effect.
 
4.4.  Seller Consents. Schedule 4.4 of the Disclosure Schedules sets forth a
true and complete list of each Consent and each declaration to or filing or
registration with any Government that is required in connection with the
execution and delivery of this Agreement and the Transaction Documents by Seller
or the performance by Seller of its obligations hereunder or thereunder, the
failure of which to obtain would constitute, individually or in the aggregate, a
Material Adverse Effect.
 
4.5.  Seller’s Ownership Interests. At Closing, Seller shall hold of record and
own beneficially good and valid title to the Ownership Interests (which shall
constitute a 50% membership interest) and Related Assets, free and clear of any
restrictions on transfer (other than restrictions under the 1933 Act and state
securities laws), taxes, Liens, options, warrants, purchase rights, contracts,
commitments, equities, claims, and demands. Seller is not a party to any option,
warrant, purchase right, or other contract or commitment (other than this
Agreement) that could require Seller to sell, transfer, or otherwise dispose of
the Ownership Interests or Related Assets (or restrict Seller from doing so).
Seller is not a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of the Ownership Interests. All of the
Ownership Interests shall be duly authorized, validly issued and fully paid and
nonassessable. None of the Ownership Interests was or will be issued in
violation of applicable Laws or any third-party preemptive or subscription
rights, rights of first refusal or offer, options, put or call rights, warrants,
consent rights, restrictive covenants or any other agreements or arrangements
with any third party, it being understood that the Seller must obtain Bankruptcy
Court approval of this Agreement and the proposed sale of the Ownership
Interests and Related Assets as contemplated in Article 8. Except for the
Ownership Interests, the Related Assets or the rights and assets being conveyed
to the Buyer under the O&M Transfer Agreement, none of Seller nor any of its
Related Persons has any legal or beneficial interest in the Company or any of
its assets except for de minimis assets.
 
Furthermore, Seller makes the following representations regarding the Company,
except in all cases as disclosed in the Disclosure Schedules, as the same may be
amended or modified in accordance with Section 13.3 hereof:
 
4.6.  Corporate Organization The Company is duly organized and validly existing
under the Laws of the jurisdiction of its organization. The Company has all
requisite corporate power and authority to own its properties and assets and to
conduct its business as now conducted.
 
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4.7.  No Unauthorized Action To Seller’s Knowledge, none of Seller nor any of
its Related Persons has caused the Company to take any action that is not in
compliance with the Company’s Organizational Documents, the LLC Agreement or any
other agreement between the parties or to fail to take any action which is
required by the Company’s Organizational Documents, the LLC Agreement or any
other agreement between the parties except to the extent such action or failure
to act would not constitute, individually or in the aggregate, a Material
Adverse Effect.
 
4.8.  Ownership of Property at Power Plant Site Except as set forth on the
Disclosure Schedules or in the Transaction Documents, neither the Seller nor any
of its Affiliates has any legal or beneficial interests in the Power Plant site
or any personal property or improvements located at the Power Plant site, except
to the extent such legal or beneficial interests are not, individually or in the
aggregate, a Material Adverse Effect (including because the legal or beneficial
interests are in an asset that is not material to the operation of the Power
Plant or that is replaceable without undue delay or expense).
 
4.9.  Capitalization of the Company. Schedule 4.9 sets forth the percentage
interests of all Persons holding interests in the Company. Except for the
interests set forth on Schedule 4.9, there are no Equity Securities of the
Company issued, reserved for issuance or outstanding. All outstanding membership
interests of the Company have been duly authorized and validly issued and are
fully-paid and nonassessable, and are held of record and owned beneficially as
set forth on Schedule 4.9. All of the issued and outstanding membership
interests of the Company were issued in compliance with all applicable federal
and state securities laws. There are no outstanding or authorized options,
warrants, subscriptions, rights, calls, commitments, conversion rights, rights
of exchange, plans or other agreements of the Company providing for the
purchase, issuance or sale of any Equity Securities of the Company, other than
the transactions contemplated by this Agreement. There are no outstanding stock
appreciation, phantom stock or similar rights with respect to the Company. The
Company has no obligation of any kind to issue any additional Equity Securities
to any Person other than as set forth in the LLC Agreement. There are no voting
trusts, proxies or other agreements, or understandings with respect to the
voting of the Equity Securities of the Company.
 
4.10.  Compliance with Law. Except as set forth on Schedule 4.10 of the
Disclosure Schedules and as may result from the Chapter 11 Case, since January
1, 2006, Seller has not received written notice of any violation of any Law by
the Company (other than with respect to Environmental Law, as to which the only
representations and warranties made by Seller are those contained in
Section 4.14 of the Disclosure Schedules), nor is the Company in default with
respect to any Order, applicable to the Business or any of the Company’s assets,
properties or operation of the Power Plant, other than violations and defaults
the consequences of which would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
 
4.11.  Litigation. As of the date of this Agreement and except as set forth on
Schedules 4.11 of the Disclosure Schedules, there are no Claims, suits or
proceedings pending or, to the Knowledge of Seller, threatened in writing,
before any Government brought by or against the Company that, if adversely
determined, could reasonably be expected to have,
 
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individually or in the aggregate, a Material Adverse Effect or materially impair
the ability of Seller to consummate the transactions contemplated by this
Agreement.
 
4.12.  Material Contracts. Schedule 4.12 of the Disclosure Schedules sets forth
a complete and correct list of each contract of the Company that the
consequences of a default under or termination of such contract would reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
(collectively, the “Material Contracts”). Other than as set forth on Schedule
4.12 of the Disclosure Schedules, neither the Company nor, to Seller’s
Knowledge, any other party to any of the Material Contracts has commenced any
action against any of the parties to such Material Contracts or given or
received any written notice of any material default or violation under any
Material Contract that was not withdrawn or dismissed. To Seller’s Knowledge,
each of the Material Contracts is, or will be at the Closing, valid, binding and
in full force and effect against the Company, except as otherwise set forth on
Schedule 4.12 of the Disclosure Schedules.
 
4.13.  Permits. Schedule 4.13(a) of the Disclosure Schedules sets forth a
complete and correct list of all material Permits and all pending applications
therefor obtained by the Company in connection with the Business. As of the date
of this Agreement, except as set forth on Schedule 4.13(b) and as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, each such Permit is valid and in full force and effect, and is
not subject to any pending or, to Seller’s Knowledge, threatened administrative
or judicial proceeding to revoke, cancel, suspend or declare such Permit invalid
in any respect.
 
4.14.  Environmental Matters. To Seller’s Knowledge, except as set forth on
Schedule 4.14 of the Disclosure Schedules:
 
(a)  The Company is in compliance with applicable Environmental Laws, except
where such non-compliance would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
 
(b)  Since January 1, 2006, the Company has not received a written complaint,
Order, directive, Claim, citation or notice of violation from any Government or
any other Person with respect to any release, spill, leak, discharge or emission
of any Hazardous Materials to the air, surface water, groundwater or soil of the
real Property, except where such matter would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
 
(c)  The representations and warranties contained in this Section 4.14 are the
only representations and warranties made by Seller with respect to matters
arising under Environmental Laws or relating to Hazardous Materials.
 
4.15.  Owned Real Property. Schedule 4.15 of the Disclosure Schedules sets forth
a complete and correct list of all material real property owned in whole or in
part (and states the ownership percentage of all partially owned real property)
by the Company and used in connection with the operation of the Power Plant.
Seller has used commercially reasonable efforts to make available to Buyer, to
the extent within Seller’s possession or control, a copy of all certificates of
occupancy for such real property and a copy of any variance granted with
 

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respect to such real property pursuant to applicable zoning laws or ordinances,
all of which documents are true and complete copies thereof. Seller has used
commercially reasonable efforts to make available to Buyer all material existing
surveys or topographical maps for the real property, title policies, engineering
reports and Environmental Reports in Seller’s possession or control.
 
4.16.  Regulatory Status. The Company has authorization from the FERC to sell
power at market based rates and such authorization is in full force and effect,
subject to proceedings of general applicability relating to sellers of power in
the geographic location where the Power Plant is located.
 
 
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
 
Buyer hereby represents and warrants to Seller as follows, except in all cases
as disclosed in the Disclosure Schedules.
 
5.1.  Corporate Organization. Buyer is duly organized, validly existing and in
good standing under the Laws of the jurisdiction of its organization, and has
all requisite limited liability company power and authority to own its
properties and assets and to conduct its business as now conducted.
 
5.2.  Authorization and Validity. Buyer has all requisite limited liability
company power and authority to enter into this Agreement and the Transaction
Documents to which it is a party and to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the Transaction
Documents and the performance of Buyer’s obligations hereunder and thereunder
have been duly authorized by all necessary action by the board of managers of
Buyer, and no other proceedings on the part of Buyer are necessary to authorize
such execution, delivery and performance. This Agreement and the Transaction
Documents to which Buyer is or will be a party have been or will be duly
executed by Buyer and constitute or will, when executed, constitute its valid
and binding obligation, enforceable against it in accordance with the terms
herein and therein, except that such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws affecting or relating to the enforcement of creditors’ rights
generally and subject, as to enforceability, to general principles of equity.
 
5.3.  No Conflict or Violation. Subject to (a) the receipt of all Consents set
forth on Schedule 5.4 and (b) the receipt of the Antitrust Approvals, the
execution, delivery and performance by Buyer of this Agreement and the execution
and delivery of the Transaction Documents and the operation of the Business by
Buyer do not and will not (i) violate or conflict with any provision of the
Organizational Documents of Buyer, or (ii) violate any provision of Law, or any
Order applicable to Buyer or (iii) violate or result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
material contract to which Buyer is a party or by which it is bound or to which
any of its properties or assets is subject, which violation, conflict, breach or
default in any such case would reasonably be expected to have a material adverse
effect on Buyer’s ability to consummate the transactions contemplated by this
Agreement.
 
 

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5.4.  Consents, Approvals and Notifications. The execution, delivery and
performance by Buyer of this Agreement and the Transaction Documents to which it
is a party and the operation of the Business by Buyer do not require the Consent
of, or filing with or notification of, any Government or any other Person
except: (a) as required under any Antitrust Law; (b) for entry of the Sale Order
by the Bankruptcy Court; (c) for the Consents set forth on Schedule 5.4 and
(d) for such Consents and filings, the failure to obtain or make would not
reasonably be expected to have a material adverse effect on the ability of Buyer
to consummate the transactions contemplated hereby.
 
5.5.  Availability of Funds. Buyer has, and on the Closing Date will have,
sufficient funds available to finance and consummate the transactions
contemplated by this Agreement.
 
5.6.  Licenses, Permits, etc.  Subject to (a) the receipt of all Consents set
forth on Schedule 5.4 and (b) the receipt of the Antitrust Approvals, if
applicable, Buyer has, or will have as of the Closing Date, all licenses,
permits, franchises and authority, whether from a Government or otherwise,
including Regulatory Approvals, and has provided any requisite notice to
customers necessary to purchase the Ownership Interests and Related Assets and
to assume the Assumed Liabilities and to operate the Business, except for any
license, permit, franchise, authority or notice the failure to obtain or make
would not reasonably be expected to have a material adverse effect on the
ability of Buyer to consummate the transactions contemplated hereby.
 
5.7.  Investigation by Buyer. Buyer has conducted its own independent review and
analysis of the Ownership Interests, Related Assets and the Assumed Liabilities,
of the value of such Ownership Interests and Related Assets and of the business,
operations, technology, assets, liabilities, financial condition and prospects
of the Business and Buyer acknowledges that Seller has provided Buyer with
access to the personnel, properties, premises and records of the Business for
this purpose. Buyer has conducted its own independent review of all Orders of,
and all motions, pleadings, and other submissions to, the Bankruptcy Court in
connection with the Chapter 11 Case. In entering into this Agreement, Buyer has
relied solely upon its own investigation and analysis, and Buyer acknowledges
that (a) neither Seller nor any of its Related Persons or Affiliates makes or
has made any representation or warranty, either express or implied, as to the
accuracy or completeness of any of the information provided or made available to
Buyer or any of its Related Persons or Affiliates, except as and only to the
extent expressly set forth in Article 4 (which are subject to the limitations
and restrictions contained in this Agreement), and (b) to the fullest extent
permitted by Law, neither Seller nor any of its Related Persons or Affiliates
shall have any liability or responsibility whatsoever to Buyer or its Related
Persons or Affiliates on any basis (including in contract or tort, under
securities Laws or otherwise) based upon any information provided or made
available, or statements made, to Buyer or Related Persons or Affiliates (or any
omissions therefrom), including in respect of the specific representations and
warranties of Seller set forth in this Agreement, except, with regard to Seller,
as and only to the extent expressly set forth in Article 4 (which are subject to
the limitations and restrictions contained in this Agreement). To the best of
Buyer’s Knowledge, except as notified to Seller pursuant to Section 7.3, it does
not know of any condition, event or circumstance that constitutes a breach of
any representation, warranty or covenant of Seller in this Agreement.
 
 

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5.8.  Acquisition as Investment. Buyer is acquiring the Ownership Interests for
its own account as an investment without the present intent to engage in any
distribution of the same to any other Person. Buyer acknowledges that the
Ownership Interests are not registered pursuant to the 1933 Act and that none of
the Ownership Interests may be transferred, except pursuant to an applicable
exception under the 1933 Act. Buyer is an “accredited investor” as defined under
Rule 501 promulgated under the 1933 Act.
 
5.9.  Adequate Assurances Regarding Assigned Contracts. Buyer is and will be
capable of satisfying the conditions contained in sections 365(b)(1)(C) and
365(f) of the Bankruptcy Code with respect to the Assigned Contracts.
 
5.10.  Knowledge of Claims. To Buyer’s Knowledge, other than the claim relating
to the Metering Claim Payment and claims that may be made with respect to
amounts due for goods sold or services provided to the Company in the ordinary
course of business, Buyer is not aware of any claims or causes of action that
the Company has against Acadia Power Holdings, LLC (“APH”) or Cleco Corporation
or their respective Affiliates.
 
 
ARTICLE 6
COVENANTS OF SELLER
 
Seller hereby covenants to Buyer as follows:
 
6.1.  Actions Before Closing. Seller shall use commercially reasonable efforts
to perform and satisfy all conditions to either party’s obligations to
consummate the transactions contemplated by this Agreement that are to be
performed or satisfied by Seller under this Agreement.
 
6.2.  Conduct of Business Before the Closing Date. Except as may be required by
the Bankruptcy Court, from the date hereof until the Closing, Seller shall vote
the Ownership Interests in favor of the Company operating the Power Plant and
conducting the Business in the ordinary course; provided that, except as
otherwise provided in the Funding Side Letter, nothing herein shall require
Seller to contribute any capital to the Company. Seller agrees that Buyer shall
have the right, but not the obligation, to provide to the Company advances of
funds from time to time necessary or appropriate to conduct operations or
maintenance of the Business in the ordinary course, consistent with the
historical operation and maintenance of the Power Plant. If Buyer so provides
one or more advances to the Company, the Seller hereby agrees to vote the
Ownership Interest to cause the Company to repay each such advance to Buyer with
any cash on-hand at the Company, each time there is cash on-hand, after payment
of then-due operating expenses and liabilities and reservation of $500,000 for
working capital and, for the avoidance of doubt, prior to payment of any
distributions to the members of the Company.
 
6.3.  Orders. Seller shall use commercially reasonable efforts to obtain entry
by the Bankruptcy Court of Orders in substantially the form of Exhibit D hereto
(the “Sale Order”), Exhibit E hereto (the “Bidding Procedures Order”), and
Exhibit J hereto (the “Claims Settlement Order”).
 
 

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6.4.  Consents and Approvals. Seller shall use commercially reasonable efforts
to obtain all Consents required to be obtained by Seller in connection with the
execution, delivery and performance by Seller and its Affiliates of this
Agreement and the Transaction Documents.
 
6.5.  Access to Properties and Records; Confidentiality. 
 
(a)  Seller shall use commercially reasonable efforts to afford to Buyer, and to
the accountants, counsel and representatives of Buyer, reasonable access during
normal business hours throughout the period prior to the Closing Date (or the
earlier termination of this Agreement pursuant to Article 12) to all books and
records of the Company relating to the Business if (w) permitted under Law (x)
such books and records are not subject to confidentiality agreements, (y)
disclosing such books and records would not adversely affect any attorney
client, work product or like privilege and (z) such books and records do not
relate to any confidential proprietary models or other information of Seller or
any of its Affiliates pertaining to energy project evaluation, energy or natural
gas price curves or projections or other economic or other predictive models.
Upon reasonable prior notice, Seller shall also use commercially reasonable
efforts to afford Buyer reasonable access, during normal business hours, to the
Business, all operations of the Business and to any Related Assets throughout
the period prior to the Closing Date. The rights of access contained in this
Section 6.5(a) are granted subject to, and on, the following terms and
conditions: (A) any such investigation shall not include physical testing or
samplings of the Power Plant or the real property associated with the Plant, and
shall be exercised in such a manner as not to interfere unreasonably with the
operation of the Business; (B) during the period from the date hereof to the
Closing Date, all information provided to Buyer or its agents or representatives
by or on behalf of Seller, the Company or their agents or representatives
(whether pursuant to this Section 6.5(a) or otherwise) shall be governed by and
subject to the Confidentiality Agreement, dated as of April 23, 2007, by and
among Buyer, Calpine and Seller (the “Confidentiality Agreement”); (C) such
rights of access shall not affect or modify the conditions set forth in Article
11 in any way; and (D) all such rights of access shall be at Buyer’s sole cost,
expense and risk; and Buyer shall indemnify Seller and the Company for any
Losses that Seller, the Company or any third party may suffer as a result of
Buyer’s exercise of its rights under this Section 6.5(a) except to the extent
such Losses are due to Seller’s gross negligence or willful misconduct; and (E)
Buyer shall comply with and adhere to all of the Company’s safety policies and
procedures.
 
(b)  Notwithstanding the foregoing, consistent with past practices and to
facilitate Seller’s and APH’s joint business relationship, Seller shall, and
shall cause its Affiliates to, continue to afford to APH, and to the
accountants, counsel and representatives of APH, reasonable access during normal
business hours to all books, records, personnel, accountants, offices,
properties and facilities of the Company and, to the extent exclusively relating
to the Company, the Business, the Related Assets or the Assumed Liabilities, of
Seller, its Affiliates and the subcontractors (of any tier) of Seller and its
Affiliates and shall, consistent with past practices, promptly provide to APH
such information relating to the Company, the Business, the Related Assets or
the Assumed Liabilities as APH may reasonably request.
 
 

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6.6.  Rejection of Assigned Contracts. Seller shall not reject any Assigned
Contracts pursuant to the Chapter 11 Case without the prior written consent of
Buyer.
 
6.7.  Further Assurances. Upon the request and at the sole expense of Buyer at
any time on or after the Closing Date, Seller shall execute and deliver such
documents, and take such actions, as Buyer or its counsel may reasonably request
to effectuate the purposes of this Agreement.
 
6.8.  Notices. Seller shall provide Buyer with prompt written notice of Seller’s
Knowledge of (i) any breach of any representation or warranty by Buyer or (ii)
any other material failure by Buyer to comply with the obligations of this
Agreement.
 
6.9.  Provision of Data; Transfer of Software. Seller agrees to cooperate with
such reasonable requests during normal business hours as Buyer may make prior to
and following the Closing (which requests shall not interfere in any material
respect with the responsibilities of Seller’s employees) so as to assist Buyer
with the integration from and after the Closing of the existing operational
data, software and systems relating to the Power Plant into Buyer’s software and
systems. Notwithstanding the foregoing, the parties acknowledge and agree that
Buyer is not acquiring any software on any computer or other electronic
equipment transferred to the Buyer as part of the Related Assets unless and only
to the extent that Buyer or the Company shall have obtained prior to the Closing
any necessary licenses or rights to use such software from and after the
Closing. Seller also agrees to cooperate with such reasonable requests during
normal business hours as Buyer may make in order to facilitate Buyer’s
acquisition of such licenses or rights.
 
 
ARTICLE 7
COVENANTS OF BUYER
 
Buyer hereby covenants to Seller as follows:
 
7.1.  Actions Before Closing Date. Buyer shall use commercially reasonable
efforts to perform and satisfy all conditions to either party’s obligations to
consummate the transactions contemplated by this Agreement that are to be
performed or satisfied by Buyer under this Agreement.
 
7.2.  Consents, Approvals and Notifications. Buyer shall use all commercially
reasonable efforts to obtain all Consents required to be obtained by Buyer and
provide notifications to all Persons required to be notified by Buyer to effect
the transactions contemplated by this Agreement. Buyer shall, as promptly as
practicable, take all actions as are reasonably requested by Seller to assist in
obtaining the Bankruptcy Court’s entry of the Sale Order, including furnishing
affidavits, financial information or other documents or information for filing
with the Bankruptcy Court and making Buyer’s employees and representatives
available to testify before the Bankruptcy Court.
 
7.3.  Notices. Buyer shall provide Seller with prompt written notice of Buyer’s
Knowledge of (i) any breach of any representation or warranty by Seller or (ii)
any other material failure by Seller to comply with the obligations of this
Agreement.
 
 

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7.4.  Payment Obligations; Claims. Notwithstanding anything to the contrary in
this Agreement and for the avoidance of doubt, Buyer’s obligations to make the
RFP Success Payment (if applicable) and the Asset Transfer Payment (if
applicable) shall survive the Closing. If the Closing occurs, (a) upon execution
of a Qualifying PPA, Buyer shall become obligated to make the first $2,000,000
RFP Success Payment six (6) months after executing the Qualifying PPA and shall
make the subsequent $2,000,000 payments on each anniversary of such date for the
subsequent four (4) years and (b) upon closing of a Qualifying Entergy Sale,
Buyer shall become obligated to make the Asset Transfer Payment within five (5)
days after closing the Qualifying Entergy Sale. Seller agrees that Buyer has the
right to pursue or not pursue a Qualifying PPA and/or a Qualifying Entergy Sale
in its sole discretion.
 
7.5.  Settlement of Certain Claims. Notwithstanding anything else to the
contrary in this Agreement, Buyer agrees to the following obligations and
requirements set forth in the Bidding Procedures Order in connection with being
selected as the stalking horse purchaser at the Auction, all of which shall
survive termination of this Agreement and all of which shall be binding on the
Purchaser in accordance with the Bidding Procedures Order irrespective of
whether the Purchaser is the successful bidder at the Auction: Paragraphs 2
(Buyer’s obligation to direct the Company to transfer to Seller the Seller
Calpine Claim and the Seller CES Claim) 10,11, 16, 17, 18, 19, 21 and 23 of the
Bidding Procedures Order.
 
7.6.  Reasonable Assistance . Buyer shall use its commercially reasonable
efforts to assist Seller in obtaining entry of the Bidding Procedures Order and
the Sale Order, including providing testimony as required at any hearing before
the Bankruptcy Court. Buyer shall undertake such actions, or refrain from taking
action, as applicable, and shall vote its interests in the Company so that the
Company shall do the same, so as not to intentionally cause a default under or
violation of, any of the Material Contracts. In the event of an objection or
threatened objection to the transactions set forth herein and to the Sale Order
by a taxing authority asserting a lien on the Ownership Interests or the Related
Assets, Buyer shall use its commercially reasonable efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary to
resolve such objection in order to consummate the transactions contemplated by
this Agreement, including to effectuate the intent of the parties hereto that
any Liens for Taxes, assessments and Government or other similar charges that
are not yet due and payable or that, although due and payable, are being
contested in good faith, would attach to the Ownership Interests and Related
Assets if and only to the extent Buyer is responsible for such Taxes
post-Closing under this Agreement.
 
7.7.  Waiver of Confidentiality. Buyer shall be deemed to, and shall be deemed
to have voted its interests in the Company to, subject only to the execution of
a confidentiality agreement which names the Company and APH as third party
beneficiaries, substantially in the form attached hereto as Exhibit H, have
waived any confidentiality provisions in any agreements executed by the Company
and/or Buyer that Seller desires to provide to prospective bidders in the
Auction and sale of the Ownership Interests and Related Assets. Buyer shall
assist Seller in obtaining waivers of confidentiality from any counterparty to
an agreement with the Company, and Seller shall obtain such counterparty waiver
before it provides any such agreement executed by the Company to a prospective
purchaser.
 
 

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7.8.  Metering Claim Payment. Buyer shall make the Metering Claim Payment on the
Release Effective Date. If the Claims Settlement Order is not final and
non-appealable on the first Business Day following the 10th day after entry of
the Claims Settlement Order on the Bankruptcy Court’s docket (the “Appeal Period
Expiration Date”), the Metering Claim Payment shall be reduced by $8,333.33 per
day for each day starting on the first day following the Appeal Period
Expiration Date until such time as the Claims Settlement Order becomes final and
non-appealable; provided that, the Metering Claim Payment shall not be reduced
below $500,000. Buyer covenants that (i) it shall not cause, directly or
indirectly, an appeal of the Claims Settlement Order to be filed; and (ii) if an
appeal of the Claims Settlement Order is filed, that it shall use all
commercially reasonable efforts to assist Seller in timely opposing and
dismissing such appeal.
 
 
ARTICLE 8
BANKRUPTCY PROCEDURES
 
8.1.  Bankruptcy Actions. Seller shall use its reasonable best efforts to obtain
the entry of the Bidding Procedures Order, the Claims Settlement Order and the
Sale Order on the Bankruptcy Court’s docket. Seller shall file all pleadings
with the Bankruptcy Court as are necessary or appropriate to secure entry of the
Bidding Procedures Order, the Claims Settlement Order and the Sale Order, shall
serve all parties entitled to notice of such pleadings under applicable
provisions of the Bankruptcy Code and Rules and shall diligently pursue the
obtaining of such orders. Seller covenants that (i) it shall not cause, directly
or indirectly, an appeal of the Bidding Procedures Order, the Claims Settlement
Order or the Sale Order to be filed; and (ii) if an appeal of the Bidding
Procedures Order, the Claims Settlement Order or the Sale Order is filed, that
it shall use reasonable efforts to cause the timely opposing and dismissing of
such appeal and to cause such Order to become a Final Order. This Section 8.1,
as it relates to the Claims Settlement Order, shall survive any termination of
this Agreement.
 
8.2.  Bidding Procedures. The bidding procedures (the “Bidding Procedures”) to
be employed with respect to this Agreement shall be those reflected in the
Bidding Procedures Order. Buyer acknowledges that the Bidding Procedures may be
supplemented by other customary procedures not inconsistent with the matters
otherwise set forth therein and the other terms of this Agreement.
 
8.3.  Review of Filings To the extent practicable, Seller shall provide Buyer,
at least three (3) days in advance of filing with the Bankruptcy Court, a draft
of any motions, orders or other pleadings that Seller proposes to file with the
Bankruptcy Court seeking approval of this Agreement and the Transaction
Documents, including the motions to approve the Bidding Procedures Order, the
Claims Settlement Order and the Sale Order. To the extent practicable, Seller
shall reasonably cooperate with Buyer, and consider in good faith the views of
Buyer, with respect to all such filings.
 
 
ARTICLE 9
REGULATORY MATTERS
 
Buyer hereby covenants to Seller, and Seller hereby covenants to Buyer, as
follows:
 
 

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9.1.  Regulatory Filings. Subject to the terms and conditions of this Agreement,
each party shall use its reasonable best efforts to (a) take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary under
applicable Laws to consummate the transactions contemplated by this Agreement,
which shall include each party’s reasonable best efforts to obtain any consents
required pursuant to Section 203 of the FPA, including filing the Section 203
application with FERC within thirty days after the date hereof; (b) if
applicable, file a Notification and Report Form pursuant to the HSR Act with
respect to the transactions contemplated hereby within five Business Days after
the date hereof; (c) supply as promptly as practicable any additional
information and documentary material that may be requested or required pursuant
to any Antitrust Law, including the HSR Act (if applicable), and (d) cause the
expiration or termination of the applicable waiting periods (if applicable)
under the HSR Act or any other Antitrust Law as soon as practicable. Buyer and
Seller agree that (i) Seller shall prepare and file with FERC the application
required under Section 203 of the FPA, (ii) Buyer will be given ample time to
review and comment on the application before the planned date of filing, and
(iii) Seller will not file the application with FERC until Buyer has given its
approval.
 
9.2.  Cooperation; Confidentiality Agreement. In connection with the efforts
referenced in Section 9.1 to obtain all requisite approvals and authorizations
for the transactions contemplated by this Agreement under the FPA, the HSR Act
(if applicable), any other Antitrust Law, or any state law, each of the parties
shall use reasonable best efforts to (a) cooperate with each other in connection
with any filing or submission and in connection with any investigation or other
inquiry, including any proceeding initiated by a private party; (b) keep the
other party informed in all material respects of any material communication
received by such party from, or given by such party to, any Government and of
any material communication received or given in connection with any proceeding
by a private party, in each case regarding any of the transactions contemplated
hereby and (c) permit the other party to review any material communication given
to it by, and consult with the other party advance of any written communication
to or meeting or conference with any Government, including in connection with
any proceeding by a private party regarding any of the transactions contemplated
hereby and, to the extent permitted by such Government, give the other party the
opportunity to attend and participate in such meeting or conference. The
obligations in this Section 9.2 shall be subject to the Confidentiality
Agreement and any attorney-client, work product or other privilege, and each of
the parties shall coordinate and cooperate fully with the other parties hereto
in exchanging such information and providing such assistance as such other
parties may reasonably request in connection with the foregoing and in seeking
early termination of any applicable waiting periods under Antitrust Law. The
parties will not take any action that will have the effect of delaying,
impairing or impeding the receipt of any required authorizations, consents,
Orders or approvals. “Antitrust Law” means the Sherman Act, as amended, the
Clayton Act, as amended, the HSR Act, the Federal Trade Commission Act, as
amended, and all other Laws and Orders that are designed or intended to
prohibit, restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade or lessening of competition through merger
or acquisition.“Antitrust Approval” means any approval or consent of any
Government required under any applicable Antitrust Law or the expiration or
termination of any applicable waiting period under any applicable Antitrust Law.
 
9.3.  Objections or Other Challenges. If any objections are asserted with
respect to the transactions contemplated hereby under any Antitrust Law or if
any suit is instituted by any Government or any private party challenging any of
the transactions contemplated hereby as 
 
 

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violative of any Antitrust Law or if the filing pursuant to Section 9.1 is
reasonably likely to be rejected or conditioned by the FERC or a state
Government, each of the parties shall use reasonable best efforts to resolve
such objections or challenge as such Government or private party may have to
such transactions, including to vacate, lift, reverse or overturn any Order,
whether temporary, preliminary or permanent, so as to permit consummation of the
transactions contemplated by this Agreement. Without limiting the generality of
the foregoing, Buyer shall promptly take and diligently pursue any or all of the
following actions to the extent necessary to eliminate any concerns on the part
of, or to satisfy any conditions imposed by, any Government with jurisdiction
over the enforcement of any applicable Law, including any Antitrust Law, the FPA
and applicable state Law, regarding the legality of Buyer’s acquisition of the
Business or any portion thereof, the Ownership Interests and Related Assets or
the Assumed Liabilities: (a) using its reasonable best efforts to prevent the
entry in a judicial or administrative proceeding brought under any Law,
including any Antitrust Law, the FPA or applicable state Law, by any Government
or any other Person of any permanent, temporary or preliminary injunction or
other Order that would make consummation of the acquisition of the Business or
any portion thereof, the Ownership Interests and Related Assets or the Assumed
Liabilities in accordance with the terms of this Agreement unlawful or that
would prevent or delay such consummation; (b) to the extent required by
reasonable best efforts, taking promptly and diligently pursuing, in the event
that an injunction or Order has been issued as referred to in Section 9.3(a),
any and all steps, including the appeal thereof, the posting of a bond and/or
the steps contemplated by Section 9.3(a), necessary to vacate, modify or suspend
such injunction or Order so as to permit such consummation as promptly as
possible and (c) to the extent required by reasonable best efforts, promptly
taking and diligently pursuing all other actions and do all other things
necessary and proper to avoid or eliminate each and every impediment under any
Law, including any Antitrust Law and the FPA, that may be asserted by any
Government or any other Person to the consummation of the acquisition of the
Business or any portion thereof, the Ownership Interests and Related Assets or
the Assumed Liabilities by Buyer in accordance with the terms of this
Agreement. 
 
 
ARTICLE 10
TAXES
 
10.1.  Taxes Related to Purchase of Ownership Interests and Related Assets. All
state and local sales, use, gross-receipts, transfer, excise, value-added or
other similar Taxes on the transfer of the Ownership Interests and Related
Assets and the assumption of the Assumed Liabilities (but excluding (i) capital
gains of Seller or its Affiliates and (ii) other Taxes based on or measured by
income or revenues), and all recording and filing fees that may be imposed by
reason of the sale, transfer, assignment and delivery of the Ownership Interests
and Related Assets (collectively, “Transaction Taxes”), shall be paid by Buyer
on or prior to their due date.
 
10.2.  Proration of Real and Personal Property Taxes. All real and personal
property taxes and assessments on the Ownership Interests and Related Assets
(not including taxes of the Company) for any taxable period commencing prior to
the Closing Date and ending on or after the Closing Date (a “Straddle Period”)
shall be prorated between Buyer and Seller as of the Closing Date based on the
best information then available, with (a) Seller being liable for such Taxes
attributable to any portion of a Straddle Period ending prior to the Closing
Date and (b)
 

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Buyer being liable for such Taxes attributable to any portion of a Straddle
Period beginning on or after the Closing Date. Information available after the
Closing Date that alters the amount of Taxes due with respect to the Straddle
Period will be taken into account and any change in the amount of such Taxes
shall be prorated between Buyer and Seller as set forth in the next sentence.
All such prorations shall be allocated so that items relating to the portion of
a Straddle Period ending prior to the Closing Date shall be allocated to Seller
based upon the number of days in the Straddle Period prior to the Closing Date
and items related to the portion of a Straddle Period beginning on or after the
Closing Date shall be allocated to Buyer based upon the number of days in the
Straddle Period from and after the Closing Date; provided, however, that the
parties shall allocate any real property Tax in accordance with Section 164(d)
of the Code. The amount of all such prorations shall be calculated and paid on
the Closing Date; prorations resulting from information after the Closing shall
be calculated and paid as soon as practicable thereafter. Upon receiving
information confirming the Company’s tax liability under the Acadia Parish sales
and use tax audit described in the letter from Gary W. Lambert and Company to
the Company dated April 3, 2006, Seller shall pay to the Company one half of the
Company’s obligation regarding any such tax liability on the Closing or as soon
as practicable thereafter.
 
10.3.  Cooperation on Tax Matters. Seller and Buyer shall (and shall cause their
respective Affiliates to) cooperate fully with each other and make available or
cause to be made available to each other for consultation, inspection and
copying (at such other party’s expense) in a timely fashion such personnel, Tax
data, relevant Tax Returns or portions thereof and filings, files, books,
records, documents, financial, technical and operating data, computer records
and other information as may be reasonably required (a) for the preparation by
such other party of any Tax Returns or (b) in connection with any Tax audit or
proceeding including one party (or an Affiliate thereof) to the extent such Tax
audit or proceeding relates to or arises from the transactions contemplated by
this Agreement.
 
10.4.   Retention of Tax Records. After the Closing Date and until 4 years after
the Closing Date, Buyer shall retain possession of all accounting, business,
financial and Tax records and information in Buyer’s possession that (a) relate
to the Ownership Interests and Related Assets and are in existence on the
Closing Date and (b) come into existence after the Closing Date but relate to
the Ownership Interests and Related Assets before the Closing Date, and Buyer
shall give Seller notice and a reasonable opportunity to retain any such records
in the event that Buyer determines to destroy or dispose of them during such
period. In addition, from and after the Closing Date, Buyer shall provide to
Seller and their Related Persons (after reasonable notice and during normal
business hours and without charge to Seller) access to the books, records,
documents and other information relating to the Ownership Interests and Related
Assets as Seller may reasonably deem necessary to (i) properly prepare for,
file, prove, answer, prosecute and defend any Tax Return, claim, filing, tax
audit, tax protest, suit, proceeding or answer or (ii) administer or complete
any cases under chapter 11 of the Bankruptcy Code of or including Seller. Such
access shall include access to any computerized data regarding the Ownership
Interests and Related Assets (to the extent relating to the period before the
Closing Date).
 
10.5.  Allocation of Purchase Price and Purchase Price Allocation Forms. The
Purchase Price, the Assumed Liabilities and other relevant items shall be
allocated among the Ownership Interests and Related Assets as provided in
Schedule 10.5 (the “Allocation Schedule”). Each of Buyer and Seller agrees that
it will report the federal, state, local and other
 
 

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Tax consequences of the purchase and sale hereunder (including in filings on IRS
Form 8594) in a manner consistent with such allocation and that it will not take
any position inconsistent therewith in connection with any Tax Return, refund
claim, litigation or otherwise, unless and to the extent required to do so
pursuant to applicable Law. Notwithstanding any other provision of this
Agreement, this Section 10.5 shall survive any termination or expiration of this
Agreement.
 
10.6.  Unbilled Transactional Taxes. If a Tax assessment is levied upon any
party by an authorized tax jurisdiction for unbilled Transaction Taxes that are
the obligation of the other party under this Agreement, then the non-assessed
party shall reimburse the assessed party for those taxes including any interest
and penalty.
 
10.7.  Aquila Termination Fee.  For the avoidance of doubt, Buyer and Seller
agree that for U.S. federal income tax purposes the sale of the Ownership
Interests pursuant to this Agreement shall cause the Company to recognize income
with respect to the unamortized balance of the Aquila Termination Fee and that
all such income shall be allocated to and reported by Seller.
 
 
ARTICLE 11
CONDITIONS PRECEDENT TO PERFORMANCE BY PARTIES
 
11.1.  Conditions Precedent to Performance by Seller and Buyer. The respective
obligations of Seller and Buyer to consummate the transactions contemplated by
this Agreement are subject to the satisfaction or waiver by both parties (other
than the condition contained in Section 11.1(a), the satisfaction of which
cannot be waived), on or prior to the Closing Date, of the following conditions:
 
(a)  Sale Order. The Bankruptcy Court shall have entered the Sale Order, and no
Order staying, reversing, modifying or amending the Sale Order shall be in
effect on the Closing Date.
 
(b)  Antitrust and Regulatory Approvals. The applicable waiting periods for the
transactions contemplated by this Agreement under the HSR Act (if applicable),
and any other Antitrust Law shall have expired or terminated and the Regulatory
Approvals on Schedule 11.1(b) shall have been obtained and requisite notice has
been provided by Buyer to relevant Government authorities.
 
(c)  No Violation of Orders. No preliminary or permanent injunction or other
Order that declares this Agreement, the Master Escrow Agreement, or the Purchase
Notice invalid or unenforceable in any respect or that prevents the consummation
of the transactions contemplated hereby or thereby shall be in effect.
 
(d)  Bidding Procedures Order. The Bankruptcy Court shall have entered the
Bidding Procedures Order, which shall provide for, among other things, the
approval of the Priority Present Value Payment, the Break-Up Fee and the Expense
Reimbursement, and no Order staying, reversing, modifying or amending the
Bidding Procedures Order shall be in effect on the Closing Date.
 
 

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(e)  Claims Settlement Order. The Bankruptcy Court shall have entered the Claims
Settlement Order and such order shall have become a Final Order.
 
11.2.  Conditions Precedent to Performance by Seller. The obligations of Seller
to consummate the transactions contemplated by this Agreement are subject to the
satisfaction, on or before the Closing Date, of the following conditions, any
one or more of which may be waived by Seller in its sole discretion:
 
(a)  Representations and Warranties of Buyer. All representations and warranties
made by Buyer in this Agreement shall be true and correct in all material
respects on and as of the Closing Date as if again made by Buyer on and as of
such date (or, if made as of a specific date, at and as of such date), and
Seller shall have received a certificate dated the Closing Date and signed by
the President or a Vice President of Buyer to that effect.
 
(b)  Performance of the Obligations of Buyer. Buyer shall have performed in all
material respects all obligations required under this Agreement to be performed
by it on or before the Closing Date (except with respect to the obligation to
pay the Closing Purchase Price and the other payments to be made in accordance
with the terms of this Agreement, which obligations shall be performed in all
respects as required under this Agreement), and Seller shall have received a
certificate dated the Closing Date and signed by a Manager of Buyer to that
effect.
 
(c)  Buyer’s Deliveries. Buyer shall have delivered, and Seller shall have
received, all of the items set forth in Section 3.3.
 
11.3.  Conditions Precedent to the Performance by Buyer. The obligations of
Buyer to consummate the transactions contemplated by this Agreement are subject
to the satisfaction, on or before the Closing Date, of the following conditions,
any one or more of which may be waived by Buyer in its sole discretion:
 
(a)  Representations and Warranties of Seller. The representations and
warranties made by Seller in Article 4 of this Agreement shall be true and
correct as of the Closing, in each case as though made at and as of such time
(or, if made as of a specific date, at and as of such date), except to the
extent such failures to be true and correct do not constitute a Material Adverse
Effect; provided, however, that representations and warranties made by Seller
and qualified as to Material Adverse Effect shall be true and correct as of the
Closing Date, and Buyer shall have received a certificate dated the Closing Date
and signed by the President or a Vice President of Seller to that effect.
 
(b)  Performance of the Obligations of Seller. Seller shall have performed in
all respects all obligations required under this Agreement to be performed by it
on or before the Closing Date, except for such failures to perform that do not
constitute a Material Adverse Effect, and Buyer shall have received a
certificate dated the Closing Date and signed by the President or a Vice
President of Seller to that effect.
 
 

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(c)  Seller’s Deliveries. Seller shall have delivered, and Buyer shall have
received, all of the items set forth in Section 3.2, except such Business
Records which Seller's failure to deliver would not constitute, individually or
in the aggregate, a Material Adverse Effect.
 
(d)  Material Adverse Effect. No Material Adverse Effect shall have occurred and
be continuing.
 
Promptly after the Closing Date, Seller shall deliver to Buyer any Business
Records not delivered to Buyer on or prior to the Closing Date.
 
 
ARTICLE 12
TERMINATION AND EFFECT OF TERMINATION
 
12.1.  Right of Termination.» Notwithstanding anything to the contrary contained
herein, this Agreement may be terminated only as provided in this Article 12. In
the case of any such termination, the terminating party shall give notice to the
other party specifying the provision pursuant to which the Agreement is being
terminated.
 
12.2.  Termination Without Default
 
(a)  This Agreement may be terminated at any time before Closing:
 

(i)  
by mutual written consent of Seller and Buyer;

 

(ii)  
by Buyer, if the Claims Settlement Order has not been entered within the earlier
of (A) 60 days after the date hereof or (B) within 48 hours of the entry of the
Bidding Procedures Order;

 

(iii)  
by Buyer, if the Bidding Procedures Order has not been entered within 60 days
after the date hereof;

 

(iv)  
by Buyer, if a Sale Order has not been entered within 90 days after the entry of
the Bidding Procedures Order;

 

(v)  
if the Auction takes place, by Buyer, on any date that is more than 120 days
after the entry of the Sale Order or, if the Auction does not take place, by
Buyer, on any date that is more than 365 days after the date hereof (in either
case, the “Buyer’s Termination Date”), if any condition contained in
Section 11.1 is not satisfied or waived as of such date; provided, however, that
Buyer shall not have the right to terminate this Agreement under this Section
12.2(a)(v) if Buyer’s failure to fulfill any of its obligations under this
Agreement is the reason that the relevant condition is not satisfied as of such
date;

 

(vi)  
if the Auction takes place, by Seller, on any date that is more than 30 days
after the entry of the Sale Order, or, if the Auction does not take place, by
Seller, on any date that is more than 365 days after the date hereof (in either

 
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case, the “Seller’s Termination Date”), if any condition contained in Section
11.1 is not satisfied or waived as of such date; provided, however, that Seller
shall not have the right to terminate this Agreement under this Section
12.2(a)(vi) if Seller’s failure to fulfill any of its obligations under this
Agreement is the reason that the relevant condition is not satisfied as of such
date; or

 

(vii)  
 by either Buyer or Seller, immediately upon an Order becoming final and
non-appealable that declares this Agreement or any of the Transaction Documents
invalid or unenforceable in any material respect or that prevents the
consummation of the transactions contemplated hereby or thereby (a “Termination
Order”); provided, however, that neither Seller nor Buyer shall have the right
to terminate this Agreement pursuant to this Section 12.2(a)(vii) if such party
or any of its Affiliates has sought entry of, or has failed to use all
commercially reasonable efforts to oppose entry of, such Termination Order.

 
(b)  If this Agreement is terminated pursuant to Section 12.2(a), (i) the
Deposits, together with any interest accrued thereon less Buyer’s share of the
fees and expenses of the Escrow Agent, pursuant to the Master Escrow Agreement,
shall be returned to Buyer, (ii) this Agreement shall become null and void and
have no effect (other than Section 7.5, Section 7.7, Section 7.8, Section 8.1,
this Article 12, Article 13 and Article 14, which shall survive termination;
provided, however, that Seller’s obligation to pay the Expense Reimbursement
pursuant to Section 12.5(c) shall not survive such termination) and (iii) except
pursuant to such surviving provisions, none of Seller, Buyer or any of their
respective Related Persons shall have any liability or obligation arising under
or in connection with this Agreement. 
 
12.3.  Effect of Failure of Seller’s Conditions to Closing.
 
(a)  Seller may terminate this Agreement at any time after the Seller’s
Termination Date and before Closing if any condition contained in Section 11.2,
except for those obligations to be performed at Closing, which are not capable
of satisfaction until Closing, is not satisfied or waived by Seller as of such
time; provided, however, that Seller shall not have the right to terminate this
Agreement under this Section 12.3 if Seller’s failure to fulfill any of its
obligations under this Agreement is the reason that the relevant condition is
not satisfied as of such date.
 
(b)  If this Agreement is terminated pursuant to this Section 12.3, Buyer
acknowledges that a monetary remedy may be inadequate or impracticable and that
Seller may have been caused irreparable harm and, if Seller so determines,
Seller shall have the right, subject to the waiver by Seller or satisfaction of
the conditions contained in Section 11.1, to obtain an Order requiring Buyer to
specifically perform all of its obligations under this Agreement.
 
(c)   If Seller determines that a monetary remedy is adequate and practicable,
Seller may terminate this Agreement, retain the Deposits, together with any
interest accrued thereon and pursue any other remedies available to Seller at
Law; provided that,
 
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(i) if Seller’s actual direct damages are less than the Deposit, plus accrued
interest, Seller shall return any amounts in excess of its actual direct damages
plus the interest accrued on such excess to Buyer and (ii) such monetary remedy
shall be limited to actual direct damages, not to exceed the amount of the
Closing Purchase Price. In the case of such termination, (i) this Agreement
shall become null and void and have no effect (other than Section 7.5, Section
7.7, Section 7.8, Section 8.1, this Article 12, Article 13 and Article 14, which
shall survive termination; provided, however, that Seller’s obligation to pay
the Expense Reimbursement pursuant to Section 12.5(c) shall not survive such
termination) and (iii) except pursuant to such surviving provisions, none of
Seller, Buyer or any of their respective Related Persons shall have any
liability or obligation arising under or in connection with this Agreement.
 

12.4.  
Effect of Failure of Buyer’s Conditions to Closing. (a) Buyer may terminate this
Agreement at any time after the Buyer’s Termination Date and before Closing if
any condition contained in Section 11.3 is not satisfied or waived as of such
time, except for those obligations to be performed at Closing, which are not
capable of satisfaction until Closing; provided, however, that Buyer shall not
have the right to terminate this Agreement under this Section 12.4 if Buyer’s
failure to fulfill any of its obligations under this Agreement is the reason
that the relevant condition is not satisfied as of such date. 

 
(b)  If this Agreement is terminated pursuant to this Section 12.4 and Seller
does not consummate an Alternative Transaction: (i) the Deposits, together with
any interest accrued thereon less Buyer’s share of any fees and expenses of the
Escrow Agent pursuant to the Master Escrow Agreement, shall be returned to
Buyer, (ii) this Agreement shall become null and void and have no effect (other
than Section 7.5, Section 7.7, Section 7.8, Section 8.1, this Article 12,
Article 13 and Article 14, which shall survive termination; provided, however,
that Seller’s obligation to pay the Expense Reimbursement pursuant to Section
12.5(c) shall not survive such termination) and (iii) except pursuant to such
surviving provisions, none of Seller, Buyer or any of their respective Related
Persons shall have any liability or obligation arising under or in connection
with this Agreement.
 
12.5.  Termination on Alternative Transaction.  
 
(a)  This Agreement may be terminated at any time before Closing by either Buyer
or Seller, upon Seller’s entering into any Alternative Transaction.
 
(b)  If this Agreement is terminated pursuant to Section 12.4, provided that
Seller consummates an Alternative Transaction, including an Alternative
Transaction with a Back-up Bidder (as that term is defined in the Bidding
Procedures Order), or Section 12.5(a): (i) the Deposits, together with any
interest accrued thereon less Buyer’s share of the fees and expenses of the
Escrow Agent pursuant to the Master Escrow Agreement, shall be returned to
Buyer, (ii) upon consummation of an Alternative Transaction, Seller shall pay
Buyer the Expense Reimbursement in accordance with Section 12.5(c), (iii)
provided that Seller consummates an Alternative Transaction, the Break-Up Fee
and the Priority Present Value Payment shall be paid to Buyer in accordance with
Paragraph 13 of the Bidding Procedures Order, and (iv) this Agreement
 
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shall become null and void and of no effect (other than Sections 7.5 through
7.8, Section 8.1, Article 12, Article 13 and Article 14, which shall survive
termination, provided that Section 7.6 shall only survive termination until the
earlier of termination of each Alternative Transaction or consummation of an
Alternative Transaction), and (v) except as provided in such surviving
provisions, this Section 12.5(b) and Section 12.5(c), none of Buyer, Seller or
their respective Related Persons shall have any liability or obligation arising
under or in connection with this Agreement. 
 
(c)  Termination Fees.
 

(i)  
If this Agreement is terminated pursuant to Section 12.4, provided that Seller
consummates an Alternative Transaction, including an Alternative Transaction
with a Back-up Bidder (as that term is defined in the Bidding Procedures Order),
or Section 12.5(a), provided that Seller later consummates an Alternative
Transaction, then: (y) $2,900,000.00 (the “Break-Up Fee”) and the Priority
Present Value Payment shall be paid to Buyer in accordance with Paragraph 13 of
the Bidding Procedures Order and (z) Seller shall pay to Buyer, from the sale
proceeds of such Alternative Transaction, reasonable and documented attorney’s
fees and out-of-pocket expenses actually incurred by or on behalf of Buyer after
January 5, 2007 in connection with the negotiation of this Agreement and the
Auction, not to exceed $350,000.00 (the “Expense Reimbursement”). 

 

(ii)  
Without limiting Section 12.5(b), Seller’s obligation to pay the Expense
Reimbursement pursuant to this Section 12.5(c) shall survive termination of this
Agreement and shall constitute an administrative expense of Seller.

 

(iii)  
The Expense Reimbursement, paid under the circumstances provided in Section
12.5(c)(i) shall be the exclusive remedy of Buyer and its Affiliates against
Seller or any of its respective Affiliates or Related Persons for any
termination of this Agreement pursuant to Section 12.5. In no event shall Seller
or any of its respective Affiliates or Related Persons have any liability to
Buyer or its Affiliates in excess of the Expense Reimbursement in the event that
this Agreement terminates pursuant to Section 12.5, and any claim, right or
cause of action by Buyer or any of its Affiliates against Seller or its
respective Affiliates or Related Persons for any termination of this Agreement
pursuant to Section 12.5 in excess of the Expense Reimbursement is hereby fully
waived, released and forever discharged. This Section 12.5(c)(iii) does not in
any way limit Buyer’s rights to the Break-Up Fee and the Priority Present Value
Payment in accordance with Paragraph 13 of the Bidding Procedures Order.

 
 
ARTICLE 13
MISCELLANEOUS
 
13.1.  Successors and Assigns. Except as otherwise provided in this Agreement,
no party hereto shall assign this Agreement or any rights or obligations
hereunder without the prior
 
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written consent of the other party hereto, and any such attempted assignment
without such prior written consent shall be void and of no force and effect;
provided that, Buyer may assign this Agreement to a purchaser of all of its
interests in the Company with the prior written consent of Seller, such consent
not to be unreasonably withheld. This Agreement shall inure to the benefit of
and shall be binding upon the successors and permitted assigns of the parties
hereto.
 
13.2.  Governing Law; Jurisdiction. This Agreement shall be construed, performed
and enforced in accordance with, and governed by, the Laws of the State of New
York (without giving effect to the principles of conflicts of Laws thereof),
except to the extent that the Laws of such State are superseded by the
Bankruptcy Code. For so long as Seller is subject to the jurisdiction of the
Bankruptcy Court, the parties hereto irrevocably elect as the sole judicial
forum for the adjudication of any matters arising under or in connection with
the Agreement, and consent to the exclusive jurisdiction of, the Bankruptcy
Court. After Seller is no longer subject to the jurisdiction of the Bankruptcy
Court, any legal action or proceeding with respect to this Agreement or the
transactions contemplated hereby may be brought in the courts of the State of
New York sitting in Manhattan or of the United States for the Southern District
of New York, and by execution and delivery of this Agreement, each of the
Parties consents to the non-exclusive jurisdiction of those courts. Each of the
Parties irrevocably waives any objection, including any objection to the laying
of venue or based on the grounds of forum non conveniens, which it may now or
hereafter have to the bringing of any action or proceeding in such jurisdiction
in respect of this Agreement or the transactions contemplated hereby.
 
13.3.  Disclosure Schedule Supplements. From time to time prior to the Closing,
Seller shall supplement or amend the Disclosure Schedules to this Agreement with
respect to any matter that, if existing, occurring or known at the date of this
Agreement, would have been required to be set forth or described in the
Disclosure Schedules. The Disclosure Schedules shall be deemed amended by all
such supplements and amendments for all purposes, unless the facts described in
such supplement or amendment will constitute, individually or in the aggregate,
a Material Adverse Effect.
 
13.4.  Warranties Exclusive. The representations and warranties contained herein
and in the Transaction Documents are the only representations or warranties
given by Seller and all other express or implied warranties are disclaimed.
Without limiting the foregoing, Buyer acknowledges that, except for the
representations and warranties contained herein and in the Transaction
Documents, the Ownership Interests and Related Assets are conveyed “AS IS,’’
“WHERE IS” and “WITH ALL FAULTS” and that, except for the representations and
warranties contained herein and in the Transaction Documents, all warranties of
merchantability, usage or suitability or fitness for a particular purpose are
disclaimed. Without limiting the foregoing, Buyer further acknowledges that,
except for and limited to the specific representations and warranties contained
herein and in the Transaction Documents, no material or information provided by
or communications made by Seller or its agents will create any representation or
warranty of any kind, whether express or implied, with respect to the Ownership
Interests and Related Assets and the title thereto, the operation of the
Business, or the prospects (financial and otherwise), risks and other incidents
of the Business, including the actual or rated generating capability of the
Power Plant or the ability of Buyer to generate or sell electrical energy.
 
13.5.  Survival of Representations and Warranties.
 
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None of the representations or warranties of Seller set forth in this Agreement,
the Transaction Documents, or in any certificate delivered pursuant to Section
11.3(a) or Section 11.3(b) shall survive the Closing.
 
13.6.  No Recourse Against Third Parties.
 
Each of Buyer and Seller agrees for itself, its Related Persons and any other
parties making any claim by, through or under the rights of such persons (each
collectively, the “Buyer Group” or “Seller Group” as applicable) that no member
of the Buyer Group or the Seller Group shall have any rights against a Related
Person of the other party or any Affiliate of the other party (including, for
Seller, Calpine), (each, individually, a “Non-Recourse Person”) for any Losses
that any member of the Buyer Group or the Seller Group may suffer in connection
with this Agreement. If any member of the Buyer Group or the Seller Group makes
a claim against any person or entity that is not a Non-Recourse Person (a “Third
Person”) that in any way gives rise to a claim by such Third Person against any
Non-Recourse Person asserting that such Non-Recourse Person is or may be liable
to such Third Person with respect to any Losses arising in connection with this
Agreement (whether by way of indemnification, contribution, or otherwise on any
theory whatever) (a “Claim Over”), such member of the Buyer Group or the Seller
Group shall reduce or credit against any judgment or settlement such member of
the Buyer Group or the Seller Group may obtain against such Third Person the
full amount of any judgment or settlement such Third Person may obtain against
the Non-Recourse Person on such Claim Over, and shall, as part of any settlement
with such Third Person, obtain from such Third Person for the benefit of such
Non-Recourse Person a satisfaction in full of such Third Person’s Claim Over
against the Non-Recourse Person.
 
13.7.  Mutual Drafting. This Agreement is the result of the joint efforts of
Buyer and Seller, and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of the parties and there is to be no
construction against either party based on any presumption of that party’s
involvement in the drafting thereof.
 
13.8.  Expenses. Except as otherwise provided herein, each of the parties hereto
shall pay its own expenses in connection with this Agreement and the
transactions contemplated hereby, including any legal and accounting fees,
whether or not the transactions contemplated hereby are consummated. Buyer shall
pay all Transaction Taxes and all filing fees required to be paid in connection
with any filings made or notices given pursuant to any Antitrust Law for
purposes of the transactions contemplated by this Agreement.
 
13.9.  Broker’s and Finder’s Fees. Each of the parties represents and warrants
that it has not dealt with any broker or finder in connection with any of the
transactions contemplated by this Agreement in a manner so as to give rise to
any claims against the other party for any brokerage commission, finder’s fees
or other similar payout, except that Seller has retained Miller Buckfire & Co.,
LLC and will pay Miller Buckfire & Co. LLC such fees as are approved by the
Bankruptcy Court.
 
13.10.  Severability. In the event that any part of this Agreement is declared
by any court or other judicial or administrative body to be null, void or
unenforceable, said provision shall survive to the extent it is not so declared,
and all of the other provisions of this Agreement
 
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shall remain in full force and effect only if, after excluding the portion
deemed to be unenforceable, the remaining terms shall provide for the
consummation of the transactions contemplated hereby in substantially the same
manner as originally set forth at the later of the date this Agreement was
executed or last amended.
 
13.11.  Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given:
(a) on the date of service if served personally on the party to whom notice is
to be given; (b) on the day of transmission if sent via facsimile transmission
to the facsimile number given below and confirmation of successful transmission
is obtained (for this purpose, an activity report of the sender’s facsimile
machine showing the confirmation of successful transmission is sufficient);
(c) on the day after delivery to Federal Express or similar overnight courier or
the Express Mail service maintained by the United States Postal Service or (d)
on the fifth day after mailing, if mailed to the party to whom notice is to be
given, by first class mail, registered or certified, postage prepaid and
properly addressed, to the party as follows:
 
If to Seller:

c/o Calpine Corporation
50 West San Fernando Street
San Jose, California 95113
Attention: General Counsel
Facsimile: (408) 794-2434

Copy to:

Kirkland & Ellis LLP
655 Fifteenth Street, NW Suite 1200
Washington, DC 20005
Attention: Mitchell F. Hertz
Facsimile: (202) 879-5200
 
Kirkland & Ellis LLP
777 South Figueroa Street
Los Angeles, CA 90017
Attention: Bennett L. Spiegel
Facsimile: (213) 680-8500

If to Buyer:

Acadia Power Holdings, LLC
2030 Donahue Ferry Road
Pineville, LA 71361-5226
Attention: W. Keith Johnson
Facsimile: (318) 484-7685
 
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Copy to:

Pillsbury Winthrop Shaw Pittman LLP
2 Houston Center
909 Fannin, Suite 2000
Houston, TX 77010-1018
Attention: Sergio Pozzerle
Facsimile: 281-667-3893

King & Spalding LLP
1185 Avenue of the Americas
New York, NY 10036
Attention: Barry N. Seidel
Facsimile: (212) 556-2222

Any party may change its address for the purpose of this Section 13.11 by giving
the other party written notice of its new address in the manner set forth above.
 
13.12.  Amendments; Waivers. This Agreement may be amended or modified, and any
of the terms, covenants, representations, warranties or conditions hereof may be
waived, only by a written instrument executed by the parties hereto, or in the
case of a waiver, by the party waiving compliance. Any waiver by any party of
any condition, or of the breach of any provision, term, covenant, representation
or warranty contained in this Agreement, in any one or more instances, shall not
be deemed to be nor construed as a furthering or continuing waiver of any such
condition, or of the breach of any other provision, term, covenant,
representation or warranty of this Agreement.
 
13.13.  Schedules. Seller may, at its option, include in the Disclosure
Schedules items that are not material, and any such inclusion, or any references
to dollar amounts, shall not be deemed to be an acknowledgment or representation
that such items are material or would cause a Material Adverse Effect, to
establish any standard of materiality or to define further the meaning of such
terms for purposes of this Agreement. Information disclosed in the Disclosure
Schedules shall constitute a disclosure for all purposes of the Section for
which such disclosure was made and each other section for which such disclosure
is readily apparent.
 
13.14.  Public Announcements. No party shall make any press release or public
announcement concerning the transactions contemplated by this Agreement without
the prior written approval of the other parties, unless a press release or
public announcement is required by Law or Order of the Bankruptcy Court. If any
such announcement or other disclosure is required by Law or Order of the
Bankruptcy Court, the disclosing party shall give the nondisclosing party or
parties prior notice of, and an opportunity to comment on, the proposed
disclosure. The parties acknowledge that Seller shall file this Agreement and
the Claims Settlement Agreement with the Bankruptcy Court in connection with
obtaining the Sale Order and Bidding Procedures Order.
 
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13.15.  Entire Agreement. This Agreement and the Transaction Documents contain
the entire understanding among the parties hereto with respect to the
transactions contemplated hereby and supersede and replace all prior and
contemporaneous agreements and understandings, oral or written, with regard to
such transactions. All Disclosure Schedules and Exhibits hereto and any
documents and instruments delivered pursuant to any provision hereof are
expressly made a part of this Agreement as fully as though completely set forth
herein.
 
13.16.  Parties in Interest. Nothing in this Agreement is intended to confer any
rights or remedies under or by reason of this Agreement on any Persons other
than Seller and Buyer and their respective successors and permitted assigns,
except the rights of the Buyer Entities and Seller Entities (as applicable) to
the indemnities and other releases and the waivers, allocations and disclaimers
of, and limitations on, liability or remedies set forth in this Agreement.
Nothing in this Agreement is intended to relieve or discharge the obligations or
liability of any third Persons to Seller or Buyer. No provision of this
Agreement shall give any third Persons any right of subrogation or action over
or against Seller or Buyer.
 
13.17.  Headings. The article and section headings in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
 
13.18.  Construction. Unless the context of this Agreement otherwise requires,
(i) words of any gender include the other gender, (ii) words using the singular
or plural number also include the plural or singular number, respectively, (iii)
the terms “hereof,” “herein,” “hereby,” and derivative or similar words refer to
this entire Agreement as a whole and not to any other particular Article,
Section or other subdivision, (iv) the words “include,” “includes” and
“including” shall be deemed to be followed by the phrase “without limitation,”
(v) “shall,” “will,” or “agrees” are mandatory, and “may” is permissive, and
(vi) “or” is not exclusive.
 
13.19.  Currency. Except where otherwise expressly provided, all amounts in this
Agreement are stated and shall be paid in United States currency.
 
13.20.  Time of Essence. Time is of the essence in this Agreement.
 
13.21.  Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which shall constitute the same
agreement. The delivery of an executed counterpart of this Agreement by
facsimile or .pdf shall be deemed to be valid delivery thereof. It shall be
sufficient in making proof of this Agreement to produce or account for a
facsimile or .pdf copy of an executed counterpart of this Agreement.
 
13.22.  Damages.
 
IN NO EVENT SHALL BUYER OR ITS RELATED PERSONS BE LIABLE TO SELLER OR ANY OF ITS
RELATED PERSONS, NOR SHALL SELLER OR ITS RELATED PERSONS BE LIABLE TO BUYER OR
ANY OF ITS RELATED PERSONS, FOR SPECIAL, PUNITIVE, INCIDENTAL, INDIRECT,
EXEMPLARY OR CONSEQUENTIAL DAMAGES OF ANY NATURE WHATSOEVER ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT, NOTWITHSTANDING THE FAULT, STRICT LIABILITY,
BREACH OF CONTRACT OR NEGLIGENCE, WHETHER SOLE, JOINT OR CONCURRENT, ACTIVE
 
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OR PASSIVE, OF THE BENEFICIARY OF THIS LIMITATION OR WHETHER ASSERTED IN
CONTRACT, IN WARRANTY, IN TORT, BY STATUTE OR OTHERWISE. ANY SUCH CLAIM, RIGHT
OR CAUSE OF ACTION FOR ANY DAMAGES THAT ARE SPECIAL, PUNITIVE, INCIDENTAL,
INDIRECT, EXEMPLARY, OR CONSEQUENTIAL DAMAGES IS HEREBY FULLY WAIVED, RELEASED
AND FOREVER DISCHARGED.
 

 
 
ARTICLE 14
DEFINITIONS
 
14.1.  Certain Terms Defined. As used in this Agreement, the following terms
shall have the following meanings:
 
“1933 Act” means the Securities Act of 1933.
 
“2001 PPA Payment Agreement” means the 2001 PPA Payment Agreement dated as of
August 9, 2005, between Calpine Energy Services, L.P. and Acadia Power Holdings
LLC.
 
“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such first Person where “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
policies of a Person, through the ownership of voting securities, by contract,
as trustee, executor or otherwise.
 
“Allowed Calpine Claim” has the meaning set forth in the Claims Settlement
Agreement.
 
“Allowed CES Claim” has the meaning set forth in the Claims Settlement
Agreement.
 
“Alternative Transaction” means a sale or other transfer or disposition
(including by sale of the ownership interest in Seller or Persons directly or
indirectly owning or controlling Seller) of all or part of the Ownership
Interests and Related Assets to a purchaser or purchasers (other than Buyer)
arising out of the Auction in which the Buyer is the stalking horse purchaser.
 
“Aquila Termination Fee” means the $105 million special distribution to the
Seller that Aquila Long Term, Inc. paid on May 12, 2003 to be released from any
and all obligations under the Aquila Power Purchase Agreement, dated October 9,
2000, as amended on January 31, 2001, and all associated guarantees.
 
“Asset Transfer Payment” means, if and only if the Closing occurs, the Company
executes an agreement for a Qualifying Entergy Sale within 12 months after the
Closing and such Qualifying Entergy Sale closes, a payment by Buyer to Seller of
(a) $10,000,000.00 plus (b) 25% of the difference equal to (i) the proceeds of
the Qualifying Entergy Sale multiplied by a fraction, the numerator of which is
50% and the denominator of which is the percentage of the assets of the Company
sold in such Qualifying Entergy Sale, minus (ii) the higher of $155,000,000.00
or the final sale price of the Ownership Interests and Related Assets to Buyer
at the Auction.
 
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“Assigned Contracts” means those agreements listed on Schedule 1.1(b).
 
“Assumption Agreement” means the agreement substantially in the form of Exhibit
B hereto.
 
“Auction” means the auction conducted by Seller pursuant to the Bidding
Procedures Order.
 
“Bankruptcy Code” means Title 11 of the United States Code.
 
“Bankruptcy Court” means the United States Bankruptcy Court for the Southern
District of New York or such other court having jurisdiction over the Chapter 11
Case originally administered in the United States Bankruptcy Court of the
Southern District of New York.
 
“Business” means the business of generating and selling electric power from the
Power Plant to the Company’s customers and any business activities of the
Company incidental to the foregoing.
 
“Business Day” means any day other than Saturday, Sunday and any day that is a
legal holiday or a day on which banking institutions in New York, New York are
authorized by Law or other Governmental action to close.
 
“Business Records” means (a) the following items to the extent they are
currently in existence and are in the possession or reasonable control of Seller
or its Affiliates and to the extent Seller or its Affiliates do not possess
originals but have a copy of the same, such copy shall be provided:
 

(i)  
all original copies of contracts currently in effect between the Company and any
counterparty;

 

(ii)  
all management committee meeting minutes;

 

(iii)  
to the extent currently located at the Power Plant, copies of all purchase
orders issued by the Company for which the work has not yet been fully
performed, and those for which the Company has not fully paid;

 

(iv)  
all (A) annual audited financial statements, and quarterly unaudited financial
statements, (B) tax filings (Federal, State, property, etc.), and (C) current
budgets;

 

(v)  
the following information to the extent currently located at the Power Plant:
project performance data, test data, environmental data, operating data and
reports;

 

(vi)  
the following information to the extent currently located at the Power Plant:
original Power Plant construction contracts, drawings, test results, warranty
data, correspondence, change orders and engineering files;

 
36

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(vii)  
all material correspondence between the Company and any governmental or
regulatory agency relating to the project;

 

(viii)  
all outstanding invoices issued by or received by the Company;

 

(ix)  
all permits and licenses of the Company;

 

(x)  
a description of the Company’s insurance policies and a list of any outstanding
insurance claims;

 

(xi)  
inventory listing for the Power Plant;

 

(xii)  
operating manuals; and

 

(xiii)  
all right of way and easement agreements for the Power Plant and/or the
pipeline;

 
and (b) other records to the extent they apply exclusively to the Company, the
Business, the Ownership Interests, the Related Assets or the Assumed
Liabilities, excluding any Retained Books and Records.
 
“Buyer Entities” means (i) Buyer, (ii) its Related Persons and (iii) the
Company.
 
“Buyer’s Knowledge” means the present actual knowledge of Sam Charlton or W.
Keith Johnson.
 
“Chapter 11 Case” means, collectively, the cases commenced by Seller and its
debtor affiliates under chapter 11 of the Bankruptcy Code in the Bankruptcy
Court being jointly administered as Case No. 05-60200.
 
“Claims Settlement Agreement” means the agreement attached to this Agreement as
Exhibit F.
 
“Clayton Act” means Title 15 of the United States Code §§ 12-27 and Title 29 of
the United States Code §§ 52-53, as amended.
 
“Code” means the Internal Revenue Code of 1986, as amended.
 
“Company” means Acadia Power Partners, LLC.
 
“Consent” means any consent, approval, authorization, qualification, waiver or
notification of a Government or other Person.
 
“Contract” means any written or oral contract, agreement, license, sublicense,
lease, sublease, mortgage, instruments, guaranties, commitment, undertaking or
other similar arrangement, whether express or implied.
 
“Disclosure Schedules” means the disclosure schedules attached hereto.
 
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“Entergy” means Entergy Services, Inc, as agent for the Entergy Operating
Companies, or its Affiliate.
 
“Entergy 2006 Long Term RFP” means Long-Term Tolling PPA, Load-Following CCGT
for 2006 Request For Proposal (RFP) for Long-Term Supply-Side Resources dated
April 17, 2006 and Ownership Acquisition of Load-Following CCGT for 2006 Request
For Proposals (RFP) for Long-Term Supply-Side Resources dated April 17, 2006.
 
“Environmental Laws” means all currently existing and future federal, state,
provincial, municipal, local and foreign statutes, ordinances, rules, Orders,
regulations, remediation standards, and other provisions having the force of law
for protection of the environment, including the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. Sec.
9601 et seq., as amended, the federal Resource Conservation and Recovery Act, 42
U.S.C. Sec. 6901 et seq., as amended, and related state statutes.
 
“Environmental Reports” means any environmental sampling or report performed
specifically to test compliance with any Environmental Laws, and any and all
Phase I or II environmental assessments, in each case which Seller has received
from an un-Affiliated third party within the last thee (3) years with respect to
the Power Plant and its associated real property; provided, Environmental
Reports shall not include any safety, health and environmental audit reports, or
internal investigation reports, prepared under the direction of Seller’s legal
department and privileged under the attorney-client privilege, attorney
work-product privilege, or state or federal environmental self-auditing
privilege or policy.
 
“Equity Securities” means (a) any of the Company’s membership interests and (b)
options, warrants or other rights convertible into, or exercisable or
exchangeable for, directly or indirectly, or otherwise entitling any Person to
acquire, directly or indirectly, any such membership interest.
 
“Escrow Agent” means Union Bank of California, N.A., the escrow agent under the
Master Escrow Agreement.
 
“Federal Trade Commission Act” means the Federal Trade Commission Act (15 U.S.C.
§ 41 et seq.), as amended, and the rules and regulations promulgated thereunder.
 
“FERC” means the Federal Energy Regulatory Commission, or any successor agency
thereto.
 
“Final Order” means an order of the Bankruptcy Court (a) as to which no appeal
or notice of appeal shall have been timely filed and no motion to amend or make
additional findings of fact, motion to alter or amend judgment, motion for
rehearing or motion for new trial, request for stay, motion or petition for
reconsideration, application or request for review, or other similar motion,
application, notice or request shall have been filed within the time for appeal
or notice of appeal (collectively, a “challenge”), or, if there has been a
challenge, it has been disposed of in a manner that upholds and affirms the
subject order in all respects without the possibility for any further appeal
therefrom; (b) as to which the time for instituting or filing an appeal shall
have expired; and (c) as to which no stay, reversal, modification or amendment
is in effect.
 
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“FPA” means the Federal Power Act (16 U.S.C. § 791a et seq.), as amended, and
the rules and regulations promulgated thereunder.
 
“Government” means any agency, division, subdivision, audit group, procuring
office or governmental or regulatory authority in any event or any adjudicatory
body thereof, of the United States, any state thereof or any foreign government.
 
“Guarantor” means Cleco Corporation.
 
“Guaranty” means the Guaranty of the Guarantor substantially in the form of
Exhibit A hereto.
 
“Hazardous Materials” means and includes any hazardous or toxic substance or
waste or any contaminant or pollutant regulated under Environmental Laws,
including, but not limited to, “hazardous substances” as currently defined by
the Federal Comprehensive Environmental Response Compensation and Liability Act
of 1980, as amended, “hazardous wastes” as currently defined by the Resource
Conservation and Recovery Act, as amended, natural gas, petroleum products or
byproducts.
 
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (15
U.S.C. §§ 15c-15h, 18a), as amended.
 
“IRS” means the United States Internal Revenue Service.
 
“Knowledge of Seller”, “Seller’s Knowledge” or any other similar term or
knowledge qualification means the present actual knowledge of William Valagura,
Billy Miller or Thomas (Mark) Johnson.
 
“Lien” means any mortgage, pledge, charge, security interest, encumbrance, lien
(statutory or other) or conditional sale agreement.
 
“LLC Agreement” means the Second Amended and Restated Limited Liability Company
Agreement of Acadia Power Partners, LLC between Seller and Buyer dated as of May
9, 2003.
 
“Losses” means damages, suits, claims, proceedings, fines, judgments, costs or
expenses (including attorneys’ fees).
 
“Master Escrow Agreement” means the escrow agreement by and between Calpine,
acting on behalf of Seller, and Union Bank of California, N.A., dated as of June
22, 2006, as amended.
 
“Material Adverse Effect” means a state of facts, event, change, effect or other
circumstance that has had or could reasonably be expected to have a material
adverse effect on the Business and Assumed Liabilities (including cure amounts
in respect of the Assigned Contracts) taken as a whole, but excluding any state
of facts, event, change or effect caused by events, changes or developments
relating to: (i) changes of Laws, including those governing national, regional,
state or local electric transmission or distribution systems, unless such Law
specifically affects the transmission or distribution service attached to the
Power Plant; (ii)
 
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strikes, work stoppages or other labor disturbances; (iii) increases in costs of
commodities or supplies, including fuel; (iv) effects of weather or
meteorological events other than such events that cause physical damage to the
Power Plant, transmission service to the Power Plant or the gas lateral attached
to the Power Plant; (v) the transactions contemplated by this Agreement or the
announcement thereof; (vi) changes or conditions generally affecting the
industries of which the Business is a part (including any change or condition
(x) generally affecting the international, national or regional or local
electric generating, transmission or distribution industry (y) generally
affecting the international, national, regional or local wholesale or retail
markets for electric power or (z) resulting from changes in the international,
national, regional or local fuel markets for the type of fuel used at the Power
Plant); (vii) changes in economic, regulatory or political conditions generally;
(viii) changes resulting from the Chapter 11 Case or any motion, application,
pleading or Order filed by any Government applicable to providers of generation,
transmission or distribution of electricity generally; (ix) any act(s) of war or
of terrorism other than such events that cause physical damage to the Power
Plant, transmission service to the Power Plant or the gas lateral attached to
the Power Plant; (x) the effects or costs associated with planned maintenance at
the Power Plant and its associated facilities, or (xi) the consequences of
Seller, in the exercise of its reasonable business judgment and good faith,
voting its interests in the Company to enter into or reject any agreements or
other obligations.
 
“Metering Claim Payment” means the payment by Buyer to Seller of $1,250,000
(subject to reduction in accordance with Section 7.8) in consideration of Seller
assigning to Buyer (pursuant to the Release Agreement) the portion of any claims
the Company may have to assert claims against Cleco Power LLC relating to
inaccurate metering equipment that is transferred to Seller pursuant to the
Release Agreement.
 
“Notification and Report Form” means the Notification and Report Form of the HSR
Act.
 
“Ownership Interests” means Seller’s ownership interest in the Company, but
shall exclude the Excluded Assets.
 
“Permits” means permits, authorizations, approvals, registrations, and licenses
relating exclusively to the Business issued by any Government (and pending
applications for the foregoing) listed on Schedule 4.13 of the Disclosure
Schedules
 
“Permitted Liens” means: (i) Liens included in the Assumed Liabilities; (ii)
mechanics, materialmen’s, warehousemen’s and similar Liens on the Related
Assets; (iii) restrictions and regulations imposed by any Government authority
or any local, state, regional, national or international reliability council, or
any independent system operator or regional transmission organization with
jurisdiction over Seller or the Power Plant and (iv) exceptions, restrictions,
easements, charges, rights-of-way and monetary and non-monetary encumbrances
which are set forth in any license.
 
“Person” means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, limited liability company
unincorporated organization, Government or other entity.
 
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“Power Plant” means the nominal 1000 MW (tested to 1160 MW) gas-fired combined
cycle electric generating facility primarily located in Acadia Parish,
Louisiana including all equipment, electrical transformers, pipeline and
electrical interconnection facilities (including water discharge facilities and
water injection facilities) related thereto.
 
“Priority Present Value” means the waiver and release set forth in Paragraphs 11
of the Bidding Procedures Order by Buyer of its right to priority distributions
under the LLC Agreement and its claims under the 2001 PPA Payment Agreement and
any guarantees thereof, valued at $85,000,000.
 
“Priority Present Value Payment” means the payment of $85,000,000 as
consideration for the waiver and release set forth in Paragraphs 11 of the
Bidding Procedures Order by Buyer of its right to priority distributions under
the LLC Agreement and its claims under the 2001 PPA Payment Agreement and any
guarantees thereof.
 
“Purchase Notice” means Exhibit A of the Master Escrow Agreement, as executed
and delivered by Buyer and Seller.
 
“Qualifying Entergy Sale” means a sale, directly or indirectly (including by
sale of the ownership interests in entities owning or controlling Buyer’s
interest in the Company), of 50% or more of the assets of or equity in the
Company to Entergy for which an agreement is entered into with Entergy within 12
months after the Closing.
 
“Qualifying PPA” means a power purchase agreement with Entergy for at least 40%
of the Power Plant’s output (determined for this purpose to be 1160 MW) (i)
based on Entergy’s 2006 Long Term RFP or (ii) pursuant to the displacement
analysis following Entergy’s LPSC 2006 Transmission Study utilizing the
Company’s bid into Entergy’s 2006 Long Term RFP, as described in the letter to
Cleco Midstream Services LLC dated January 31, 2007.
 
“Regulatory Approvals” means state public utility commission and the FERC
approvals and/or notifications of other related Government authorities with
respect to the consummation of the transactions contemplated hereby.
 
“Related Assets” means all right, title and interest of Seller in, to and under
the Assigned Contracts and those assets listed on Schedule 1.1(a).
 
“Related Person” means, with respect to any Person, all past, present and future
directors, officers, members, managers, stockholders, employees, controlling
persons, agents, professionals, attorneys, accountants, investment bankers,
Affiliates or representatives of any such Person.
 
“Release Effective Date” means the Closing Date or the closing of an Alternative
Transaction, provided that, as of such date, (a) the Claims Settlement Order
(approving, among other things, the Release Agreement) shall have been entered
by the Bankruptcy Court and shall have become a Final Order, (b) the Bidding
Procedures Order (approving, among other things, the O&M Transfer Agreement)
shall have been entered by the Bankruptcy Court, (c) the Sale Order or an order
approving the sale of the Ownership Interests and Related Assets to an
Alternative Transaction purchaser (either, a “Sale Approval Order”) shall have
been entered by
 
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the Bankruptcy Court and (d) no Order staying, reversing, modifying or amending
the Bidding Procedures Order or the Sale Approval Order shall be in effect.
 
“Retained Books and Records” means (i) all corporate seals, minute books,
charter documents, corporate stock record books, original tax and financial
records and such other files, books and records to the extent they relate to any
of the Excluded Assets or Excluded Liabilities or the organization, existence,
capitalization or debt financing of Seller or of any Affiliate of Seller, (ii)
all books, files and records that would otherwise constitute a Business Record
but for the fact that disclosure of books, files or records could (w) violate
any legal constraints or obligations regarding the confidentiality thereof, (x)
waive any attorney client, work product or like privilege, (y) disclose
information about Seller or any of its Affiliates that is unrelated to the
Company, Power Plant or the Business or (z) disclose information about Seller or
any of its Affiliates pertaining to energy or project evaluation, energy or
natural gas price curves or projections or other economic predictive models, or
(iii) all books and records prepared in connection with or relating in any way
to the transactions contemplated by this Agreement, including bids received from
other parties and analyses relating in any way to the Ownership Interests and
Related Assets and the Assumed Liabilities.
 
“RFP Success Payment” means a payment from Buyer to Seller of $2,000,000 per
year for five years (totaling $10,000,000) payable according to Section 7.4 if
and only if the Closing occurs and the Company enters into a Qualifying PPA.
 
“Rule” or “Rules” means the Federal Rules of Bankruptcy Procedure.
 
“Seller Calpine Claim” means $100,000,000.00 of the Allowed Calpine Claim to be
transferred to Seller from the Company.
 
“Seller CES Claim” means $100,000,000.00 of the Allowed CES Claim to be
transferred to Seller from the Company.
 
“Seller Entities” means (i) Seller and (ii) its Related Persons, but does not
include the Company.
 
“Sherman Act” means title 15 of the United States Code §§ 1-7, as amended.
 
“Subsidiary” means, with respect to any Person, any corporation, partnership,
limited liability company, association or other business entity of which (a) if
a corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or (b) if a partnership, limited
liability company, association or other business entity, a majority of the
partnership or other similar ownership interest thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more Subsidiaries of
that Person or a combination thereof. For purposes hereof, a Person or Persons
shall be deemed to have a majority ownership interest in a partnership, limited
liability company, association or other business entity if such Person or
Persons shall be allocated a majority of partnership, limited liability company,
association or other business entity
 
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gains or losses or shall be or control the managing director or general partner
of such partnership, limited liability company, association or other business
entity.
 
“Tax Return” means any report, return, information return, filing or other
information, including any schedules, exhibits or attachments thereto, and any
amendments to any of the foregoing required to be filed or maintained in
connection with the calculation, determination, assessment or collection of any
Taxes (including estimated Taxes).
 
“Taxes” means all taxes, fees, levies, duties and charges, however denominated,
including any interest, penalties or additions to such taxes, fees, levies,
duties and charges that may become payable in respect thereof, imposed by any
Government, which taxes, fees, levies, duties and charges shall include all
income taxes, Transaction Taxes, payroll and employee withholding, unemployment
insurance, social security (or similar), sales and use, excise, franchise, gross
receipts, occupation, real and personal property, stamp, transfer, workmen’s
compensation, customs duties, registration, documentary, value added,
alternative or add-on minimum, estimated, environmental (including taxes under
section 59A of the Code) and other obligations of the same or a similar nature,
whether arising before, on or after the Closing Date.
 
“Transaction Documents” means the Guaranty, Management Committee Resolutions,
Membership Transfer Agreement, Bill of Sale, Assumption Agreement, Non-Foreign
Investment Status Affidavit, Release Agreement, Claims Settlement Agreement, O&M
Transfer Agreement, Confidentiality Agreement, Funding Side Letter, Purchase
Notice and any other agreements, instruments, documents and other writings
required to be executed and delivered by Buyer and/or Seller under this
Agreement.
 

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14.2.  All Terms Cross-Referenced. Each of the following terms is defined in the
Section set forth opposite such term:
 

Term
 Section
 
 
1933 Act
 
14.1
 
2001 PPA Payment Agreement
 
14.1
 
Additional Deposit
 
2.2
 
Affiliate
 
14.1
 
Agreement
 
Preamble
 
Allocation Schedule
 
10.5
 
Allowed Calpine Claim
 
14.1
 
Allowed CES Claim
 
14.1
 
Alternative Transaction
 
14.1
 
Antitrust Approval
 
9.2
 
Antitrust Law
 
9.2
 
Appeal Period Expiration Date
 
7.8
 
Asset Transfer Payment
 
14.1
 
Assigned Contracts
 
14.1
 
Assumed Liabilities
 
1.3
 
Assumption Agreement
 
14.1
 
Auction
 
14.1
 
Bankruptcy Code
 
14.1
 
Bankruptcy Court
 
14.1
 
Bidding Procedures
 
8.2
 
Bidding Procedures Order
 
1.2
 
Break-Up Fee
 
12.5(c)(i)
 
Business
 
14.1
 
Business Day
 
14.1
 
Business Records
 
14.1
 
Buyer
 
Preamble
 
Buyer Entities
 
14.1
 
Buyer Group
 
13.6
 
Buyer’s Knowledge
 
14.1
 
Buyer’s Termination Date
 
12.2(a)(iii)

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Calpine
 
Preamble
 
Calpine Marks
 
1.2(b)
 
Chapter 11 Case
 
14.1
 
Claim Over
 
13.6
 
Claims
 
1.2(a)
 
Claims Settlement Agreement
 
14.1
 
Clayton Act
 
14.1
 
Closing
 
3.1
 
Closing Date
 
3.1
 
Closing Purchase Price
 
2.1
 
Code
 
14.1
 
Confidentiality Agreement
 
6.5
 
Consent
 
14.1
 
Contract
 
14.1
 
Deposits
 
2.2
 
Disclosure Schedules
 
14.1
 
Entergy
 
14.1
 
Entergy Long Term RFP
 
14.1
 
Environmental Laws
 
14.1
 
Environmental Reports
 
14.1
 
Equity Securities
 
14.1
 
Escrow Agent
 
14.1
 
Excluded Assets
 
1.2
 
Excluded Liabilities
 
1.4
 
Expense Reimbursement
 
12.5(c)
 
Federal Trade Commission Act
 
14.1
 
FERC
 
14.1
 
FPA
 
14.1
 
Government
 
14.1
 
Guarantor
 
14.1
 
Guaranty
 
14.1
 
Hazardous Materials
 
14.1
 
HSR Act
 
14.1
 
Initial Deposit
 
2.2

 
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IRS
 
14.1
 
Knowledge of Seller
 
14.1
 
Law
 
4.3
 
Lien
 
14.1
 
Losses
 
14.1
 
Master Escrow Agreement
 
14.1
 
Material Contracts
 
4.12
 
Metering Claim Payment
 
14.1
 
Non-Recourse Person
 
13.6
 
Notification and Report Form
 
14.1
 
Order
 
4.3
 
Organizational Documents
 
4.3
 
Ownership Interests
 
14.1
 
Partnership
 
14.1
 
Partnership Agreement
 
14.1
 
Permit
 
14.1
 
Permitted Liens
 
14.1
 
Person
 
14.1
 
Power Plant
 
14.1
 
Priority Present Value
 
14.1. 14.1
 
Purchase Notice
 
14.1
 
Purchase Price
 
2.1
 
Regulatory Approvals
 
14.1
 
Related Assets
 
14.113.1
 
Related Person
 
14.1
 
Retained Books and Records
 
14.1
 
RFP Success Payment
 
14.1
 
Rule
 
14.1
 
Rules
 
14.1
 
Sale Order
 
6.3
 
Seller
 
Preamble
 
Seller Calpine Claim
 
14.1
 
Seller CES Claim
 
14.1
 
Seller Entities
 
14.1

 
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Seller Group
 
13.6
 
Seller’s Account
 
3.3
 
Seller’s Knowledge
 
14.1
 
Seller’s Termination Date
 
12.2(a)(vii)
 
Sherman Act
 
14.1
 
Straddle Period
 
10.2
 
Subsidiary
 
14.1
 
Tax Return
 
14.1
 
Taxes
 
14.1
 
Termination Order
 
12.2(a)(vii)
 
Third Person1
 
3.6
 
Transaction Documents
 
14.1
 
Transaction Taxes
 
10.1

 

 
 
(Signatures are on the following page.)
 

 
47

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the date first
above written.
 

 

 
CALPINE ACADIA HOLDINGS, LLC
 

 
By: /s/ James J. Shield                                       
 
Name: James J. Shield                                        
 
Title: Senior Vice President                                
 

 

 
ACADIA POWER HOLDINGS, LLC
 

 
By: /s/ Samuel H. Charlton III                           
 
Name: Samuel H. Charlton III                            
 
Title: Board of Managers                                    
 

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