Exhibit 10.2

EXECUTION COPY
Privileged and Confidential
 
PURCHASE AND SALE AGREEMENT
 
BY AND BETWEEN
 
PPL GENERATION, LLC
 
and
 
HARBOR GEN HOLDINGS, LLC
 
Dated as of September 9, 2010

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LIST OF EXHIBITS AND SCHEDULES
 
EXHIBITS
 
Exhibit A
Form of Assignment and Assumption Agreement
Exhibit B
Form of Membership Interest Transfer Agreement
Exhibit C
Form of Transition Services Agreement
Exhibit D
Estoppel Certificate
Exhibit E
Restructuring Agreements
Exhibit F
Form of Bill of Sale
Exhibit G
Inventory
 
SCHEDULES
 
1.1(13)
Assigned Agreements
1.1(42)
Excluded Liabilities
1.1(56)
Initial Amount
1.1(59)(a)
Seller’s Knowledge
1.1(59)(b)
Buyer’s Knowledge
1.1(68)
Newco Specified Payables Adjustment Amount
1.1(74)
Permitted Encumbrances
1.1(96)
Specified Credit Support
1.1(97)
Specified Credit Support Beneficiaries
1.1(98)
Specified Credit Support Parties
1.1(102)
Specified Regulatory Condition
1.1(123)
Wallingford Specified Payables Adjustment Amount
3.2
Companies Corporate Organization Information
3.3
Companies Changes and Events
3.4
Companies Legal Proceedings
3.5
Companies Compliance with Laws; Sufficiency of Assets
3.6(a)
Companies Material Contracts
3.6(c)
Companies Defaults under Material Contracts
3.7
Companies Liens
3.8(a)(i)
Benefit Plans
3.8(a)(ii)
Company Benefit Plans
3.8(d)
Companies Other Employee Benefit Matters
3.9
Companies Environmental Matters
3.10
Companies Insurance
3.11(c)
Tax Actions
3.11(e)
Further Tax Representations
3.11(g)
Tax Waivers
3.12
Companies Intellectual Property
3.13
Companies Personal Property
3.14
Companies Undisclosed Liabilities
4.3(a)
Conflicts or Violations; Consents and Approvals
4.3(b)
Seller’s Required Regulatory Approvals
4.5(b)
Defaults etc. under Assigned Agreements
4.7
Brokers; Finders
5.3(a)
Buyer’s Defaults and Violations
5.3(b)
Buyer’s Required Regulatory Approvals
6.4(d)
Buyer Restrictions
6.7(a)(i)
Specified Credit Support Replacements
6.7(a)(ii)
Specified Credit Support Releases
6.7(b)
Seller’s Letters of Credit, Guarantees or Other Credit Support
6.8(a)
Conduct of Business Pending the Closing
6.9(a)
Termination of Affiliate Contracts
6.10(e)
Severance
6.10(j)
Third Party Operator
7.1(c)(i)
Certain Buyer’s Required Regulatory Approvals
7.1(c)(ii)
Certain Seller’s Required Regulatory Approvals
7.1(i)
Buyer Third Party Consents
7.2(g)
Third Party Consents, Waivers or Approvals
8.3
Straddle Period Tax Returns

 

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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
2
       
1.1
 
Definitions
2
1.2
 
Construction
11
1.3
 
U.S. Dollars
12
   
ARTICLE II PURCHASE AND SALE
12
       
2.1
 
Closing
12
2.2
 
Payment of Purchase Price
12
2.3
 
Adjustment to Purchase Price
12
2.4
 
Deliveries by Seller
13
2.5
 
Deliveries by Buyer
15
2.6
 
Allocation of Purchase Price
15
   
ARTICLE III REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANIES
16
       
3.1
 
Organization and Existence
16
3.2
 
Company
16
3.3
 
Absence of Certain Changes or Events
16
3.4
 
Legal Proceedings
16
3.5
 
Compliance with Laws; Sufficiency of Permits and Assets
17
3.6
 
Material Contracts
17
3.7
 
Properties; No Liens
17
3.8
 
Employee Benefits
17
3.9
 
Environmental Matters
18
3.1
 
Insurance
19
3.11
 
Taxes
19
3.12
 
Intellectual Property
20
3.13
 
Personal Property
20
3.14
 
Absence of Undisclosed Liabilities
20
3.15
 
Regulatory Status
20
3.16
 
Exclusive Representations and Warranties
20
   
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER
21
       
4.1
 
Organization; Qualification
21
4.2
 
Authority
21
4.3
 
Consents and Approvals; No Violation
21
4.4
 
Title and Related Matters
22
4.5
 
Assigned Agreements
22
4.6
 
Legal Proceedings
23
4.7
 
Brokers; Finders
23
   
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER
23
       
5.1
 
Organization; Qualification
23
5.2
 
Authority
23
5.3
 
Consents and Approvals; No Violation
24
5.4
 
Buyer’s Permits
24
5.5
 
Availability of Funds
24
5.6
 
Legal Proceedings
24
5.7
 
Inspections
24
5.8
 
Brokers; Finders
25
5.9
 
Investment Intent
25
   
ARTICLE VI COVENANTS OF THE PARTIES
25
       
6.1
 
Access to Information
25
6.2
 
Public Statements
27
6.3
 
Further Assurances
27
6.4
 
Governmental Consents and Approvals
27
6.5
 
PJM and ISO New England
30
6.6
 
Assignment
30
6.7
 
Release of Credit Support
31
6.8
 
Conduct of Business Pending the Closing
32
6.9
 
Termination of Affiliate Contracts; Restructuring
34
6.1
 
Employee Benefits
34
6.11
 
Seller Marks
37
6.12
 
Insurance
37
6.13
 
Casualty
37
6.14
 
Condemnation
38
6.15
 
Turbine Transfers
38
6.16
 
RGGI
38
   
ARTICLE VII CONDITIONS
39
       
7.1
 
Conditions to Obligation of Buyer
39
7.2
 
Conditions to Obligation of Seller
40
7.3
 
Failure Caused by Party’s Failure to Comply
41
   
ARTICLE VIII TAX MATTERS
41
       
8.1
 
Tax Indemnification
41
8.2
 
Straddle Period
42
8.3
 
Responsibility for Filing Tax Returns
42
8.4
 
Tax Proceedings
43
8.5
 
Cooperation
43
8.6
 
Purchase Price Adjustment
44
8.7
 
Transfer Taxes and Restructuring Costs
44
8.8
 
Refunds
44
8.9
 
Exclusivity
44
   
ARTICLE IX INDEMNIFICATION AND DISPUTE RESOLUTION
44
       
9.1
 
Indemnification
44
9.2
 
Defense of Claims
46
   
ARTICLE X TERMINATION
47
       
10.1
 
Termination
47
10.2
 
Effect of Termination
49
   
ARTICLE XI MISCELLANEOUS PROVISIONS
49
       
11.1
 
Amendment and Modification
49
11.2
 
Expenses
49
11.3
 
Waiver of Compliance; Consents
49
11.4
 
Survival
49
11.5
 
Disclaimers, As-Is Sale; Release
49
11.6
 
Notices
51
11.7
 
Assignment
52
11.8
 
Governing Law; Forum; Service of Process
52
11.9
 
Counterparts
53
11.1
 
Interpretation
53
11.11
 
Schedules and Exhibits
53
11.12
 
Disclosure
53
11.13
 
Entire Agreement
53
11.14
 
Severability
54

 
 

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PURCHASE AND SALE AGREEMENT
 
PURCHASE AND SALE AGREEMENT, dated as of September 9, 2010 (this “Agreement”),
by and between PPL Generation, LLC, a Delaware limited liability company
(“Seller”), and Harbor Gen Holdings, LLC, a Delaware limited liability company
(“Buyer”). Seller and Buyer may each be referred to herein individually as a
“Party,” and together as the “Parties.”
 
W I T N E S S E T H
 
WHEREAS, Seller owns 100% of the issued and outstanding membership interests of
PPL University Park, LLC, a Delaware limited liability company (“University
Park”), PPL Wallingford Energy LLC, a Connecticut limited liability company
(“Wallingford”), and PPL Leasing Company, LLC, a Connecticut limited liability
company (“Leasing”), and in connection with the Restructuring, Seller will form
a new Delaware limited liability company (“Newco”, which once formed, together
with Leasing, University Park and Wallingford, and for actions to be taken after
the Restructuring, solely Newco and Wallingford, shall be referred to as the
“Companies”);
 
WHEREAS, in accordance with this Agreement, Buyer desires to purchase and
assume, and Seller desires to sell and assign, or cause to be sold and assigned,
after the consummation of the Restructuring, 100% of the issued and outstanding
membership interests of Newco (the “Newco Interests”) and 100% of the issued and
outstanding membership interests of Wallingford (the “Wallingford Interests”,
and together with the Newco Interests, the “Seller’s Interests”), and the
Assigned Agreements upon the terms and conditions hereinafter set forth in this
Agreement;
 
WHEREAS, Seller and certain of its Affiliates are parties to certain agreements
relating to the Companies and the Seller’s Interests (as further defined below,
the “Assigned Agreements”);
 
WHEREAS, LS Power Equity Partners II, L.P., a Delaware Limited Partnership
(“Buyer Parent”), has executed and delivered the Buyer Parent Guarantee (as
defined below);
 
WHEREAS, PPL Energy Supply, LLC, a Delaware limited liability company (“PPL
Energy Supply”), has executed and delivered the PPL Energy Supply Guarantee (as
defined below); and
 
WHEREAS, in connection with this Agreement, pursuant to that certain Purchase
and Sale Agreement, dated as of the date hereof, by and between PPL Holtwood,
LLC, an Affiliate of Seller, and LSP Safe Harbor Holdings, LLC, an Affiliate of
Buyer (the “Affiliate PSA”), upon the terms and subject to the conditions
therein, the parties thereto have agreed to the purchase and sale of certain
capital stock together with the assignment of certain agreements to be
consummated simultaneously with the Closing (as defined below).
 
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants,
representations, warranties and agreements set forth herein, and intending to be
legally bound hereby, the Parties hereby agree as follows:
 
ARTICLE I

 
DEFINITIONS
 
1.1 Definitions.  As used in this Agreement, the following capitalized terms
have the meanings specified in this Section ‎1.1.
 
1. “Action” means a suit, claim, action, administrative, arbitral, litigation or
other proceeding, inquiry, audit, hearing, petition, grievance, complaint or
governmental or regulatory investigation.
 
2. “Actual Specified Payables Adjustment Amount” has the meaning set forth in
Section ‎2.3.
 
3. “Additional Agreements” means the Buyer Parent Guarantee, the PPL Energy
Supply Guarantee, the Assignment and Assumption Agreement and the Membership
Interest Transfer Agreements.
 
4. “Affiliate” has the meaning set forth in Rule 12b-2 of the General Rules and
Regulations promulgated under the Exchange Act.
 
5. “Affiliate PSA” has the meaning set forth in the recitals to this Agreement.
 
6. “Affiliate PSA Closing” means the closing of the transactions contemplated by
the Affiliate PSA.
 
7. “Affiliate PSA Outside Date” means the “Outside Date” as defined in the
Affiliate PSA.
 
8. “Affiliate PSA Purchase Price” means the purchase price set forth in the
Affiliate PSA.
 
9. “Agreement” means this Purchase and Sale Agreement together with the
Schedules and Exhibits hereto.
 
10. “Allocation Schedule” has the meaning set forth in Section ‎2.6.
 
11. “Antitrust Authorities” has the meaning set forth in Section ‎6.4(a).
 
12. “Assets” means assets, properties, rights, claims, contracts and interests
of every type and description, real, personal or mixed, tangible and intangible.
 
13. “Assigned Agreements” means the agreements listed on Schedule ‎1.1(‎13),
which will be assigned pursuant to the Assignment and Assumption Agreement.
 
14. “Assignment and Assumption Agreement” means the assignment and assumption
agreement between Seller and one or more of Seller’s Affiliates and Buyer, to be
delivered at the Closing, substantially in the form of Exhibit A hereto,
pursuant to which Seller or its Affiliates shall assign the Assigned Agreements
and Buyer shall accept such assignment and assume the Assumed Liabilities.
 
15. “Assumed Liabilities” means any and all Liabilities of Seller or its
Affiliates arising under the Assigned Agreements, other than the Excluded
Liabilities.
 
16. “Benefit Plans” has the meaning set forth in Section ‎3.8(a).
 
17. “Business” means the business of ownership, operation and maintenance of the
Stations by the Companies.
 
18. “Business Day” means any day other than Saturday, Sunday and any day on
which banking institutions in the State of New York are authorized or required
by Law to close.
 
19. “Buyer” has the meaning set forth in the preamble to this Agreement.
 
20. “Buyer Material Adverse Effect” has the meaning set forth in Section
‎5.3(a).
 
21. “Buyer Parent” has the meaning set forth in the recitals to this Agreement.
 
22. “Buyer Parent Guarantee” means the guarantee dated as of the date hereof of
Buyer Parent, for the benefit of Seller.
 
23. “Buyer’s Indemnitee” has the meaning set forth in Section ‎9.1(b).
 
24. “Buyer’s Required Regulatory Approvals” has the meaning set forth in Section
‎5.3(b).
 
25. “Closing” has the meaning set forth in Section 2.1.
 
26. “Closing Date” has the meaning set forth in Section ‎2.1.
 
27. “Closing Payment” has the meaning set forth in Section ‎2.2(a).
 
28. “Code” means the Internal Revenue Code of 1986, as amended.
 
29. “Companies” has the meaning set forth in the recitals to this Agreement.
 
30. “Company Benefit Plans” has the meaning set forth in Section ‎3.8(a).
 
31. “Company Employee” has the meaning set forth in Section ‎3.8(a).
 
32. “Condemnation Value” has the meaning set forth in Section ‎6.14.
 
33. “Confidentiality Agreement” means the Confidentiality Agreement, dated June
1, 2010, between PPL Services Corporation and LS Power Equity Advisors, LLC.
 
34. “Consent” means consent, approval or authorization of any Person.
 
35. “Contract” means any contract, lease, license, evidence of Indebtedness,
mortgage, indenture, purchase order, binding bid, letter of credit, security
agreement, undertaking or other agreement that is legally binding.
 
36. “DEP” has the meaning set forth in Section 6.4(f)(i).
 
37. “Encumbrances” means any and all mortgages, pledges, liens, claims, security
interests, easements, deed restrictions, conditional and installment sale
agreements, activity and use limitations, restrictions, defects of title or
encumbrances of any kind.
 
38. “Environmental Laws” means all applicable Laws relating to pollution or
protection of the environment.
 
39. “ERISA” has the meaning set forth in Section 3.8(a).
 
40. “Estimated Specified Payables Adjustment Amount” has the meaning set forth
in Section ‎2.2(b).
 
41. “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
 
42. “Excluded Liabilities” means all Liabilities (i) of Seller (and all
Non-Company Affiliates), including all Liabilities under the Assigned Agreements
arising prior to the Closing Date, but excluding all Liabilities under the
Assigned Agreements arising on or after the Closing Date or (ii) set forth on
Schedule ‎1.1(42).
 
43. “Federal Power Act” means the Federal Power Act, as amended, and the rules
and regulations promulgated thereunder.
 
44. “FERC” means the U.S. Federal Energy Regulatory Commission, and any
successor agency thereto.
 
45. “FERC Waiver Filing” has the meaning set forth in Section ‎6.6(d).
 
46. “Filing” means any registration, declaration, notice or filing with any
Governmental Authority.
 
47. “Final Order” means an action by a Governmental Authority as to which (i) no
request for stay of the action is pending, no such stay is in effect and if any
time period is permitted by statute or regulation for filing any request for
such stay, such time period has passed, (ii) no petition for rehearing of the
action is pending and the time for filing any such petition or application has
passed, (iii) such Governmental Authority does not have the action under
reconsideration on its own motion and (iv) no appeal to a court or a request for
stay by a court of the Governmental Authority’s action is pending or in effect
and the deadline for filing any such appeal or request has passed; provided that
an order of any Governmental Authority granting approval of the transactions
contemplated by this Agreement may be deemed a Final Order during the pendency
of any reconsideration or rehearing, application or request for review, or
notice of appeal or other judicial petition for review if Buyer’s and Seller’s
respective regulatory counsel in good faith agree that such proceedings are not
reasonably likely to result in a reversal of such order.
 
48. “Governmental Authority” means any executive, legislative, judicial,
regulatory, tribal or administrative agency, body, commission, department,
board, court, tribunal or authority of the U.S. or any foreign country, or any
entity properly delegated authority by such entities, or any state, local or
other governmental subdivision thereof, or any entity acting by duly delegated
authority granted from the foregoing, including without limitation any regional
transmission organization such as PJM and ISO New England, and the North
American Electric Reliability Corporation (including any applicable regional
authorities thereof).
 
49. “Hazardous Substances” means any petroleum, friable asbestos,
polychlorinated biphenyls or materials or substances defined as or included in
the definition of “hazardous substances,” “hazardous wastes,” “hazardous
materials,” “toxic substances,” or words of similar meaning and regulatory
effect under any applicable Environmental Law.
 
50. “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
 
51. “Indebtedness” means any of the following: (a) any indebtedness for borrowed
money and accrued but unpaid interest, premiums, penalties and similar amounts
relating thereto; (b) any obligations evidenced by bonds, debentures, notes or
other similar instruments; (c) any obligations to pay in installments, or for
the deferred purchase price, of property or services, except trade accounts
payable and other current liabilities arising in the ordinary course of business
consistent with past practices; (d) any obligations as lessee under capitalized
leases; (e) any indebtedness created or arising under any conditional sale or
other title retention agreement with respect to acquired property; (f) any
obligations, contingent or otherwise, under acceptance, letters of credit or
similar facilities; and (g) any guaranty, security interest or Encumbrance upon
any property or Asset related to any of the foregoing.
 
52. “Indemnifiable Loss” has the meaning set forth in Section 9.1(a).
 
53. “Indemnifying Party” has the meaning set forth in Section ‎9.1(d).
 
54. “Indemnitee” has the meaning set forth in Section ‎9.1(b).
 
55. “Independent Accounting Firm” means such nationally recognized, independent
accounting firm as is mutually appointed by Seller and Buyer for purposes of
this Agreement.
 
56. “Initial Amount” means the portion of the Total Purchase Price allocated to
the transactions contemplated by this Agreement as set forth on Schedule
1.1(56).
 
57. “ISO New England” means ISO New England, Inc. or its successor organization.
 
58. “ISO New England Transfer Date” means such date as the transfer to Buyer of
Seller’s and/or its Affiliates’ entitlement to the capacity (including
locational forward reserve), energy and ancillary services of the Wallingford
Station is reflected in all applicable ISO New England systems and databases.
 
59. “Knowledge” means (i) in the case of Seller, the actual knowledge, after
reasonable inquiry, of the individuals listed on Schedule ‎1.1 (‎59)(a), and
(ii) in the case of Buyer, the actual knowledge, after reasonable inquiry, of
the individuals listed on Schedule ‎1.1(‎59)(b).
 
60. “Laws” means all laws, statutes, rules, regulations, ordinances and Orders
of any Governmental Authority.
 
61. “Leasing” has the meaning set forth in the recitals to this Agreement.
 
62. “Leasing Interests” means, prior to the Restructuring, 100% of the issued
and outstanding membership interests of Leasing.
 
63. “Liability” or “Liabilities” means any liability or obligation (whether
known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated and
whether due or to become due), including Indebtedness and any liability for
Taxes.
 
64. “Material Adverse Effect” means any change in or effect on the Business that
is materially adverse to the properties, results of operations or condition
(financial or otherwise) of the Business, taken as a whole, other than (a) any
change or effect affecting the international, national, regional or local
electric industry as a whole and not specific to the Business, (b) any change or
effect resulting from changes in the international, national, regional or local
wholesale or retail markets for electricity, including any change in or effect
on the structure, operating agreements, operations or procedures of PJM or ISO
New England, (c) any change or effect resulting from changes in the
international, national, regional or local electricity transmission or
distribution systems or operations thereof, (d) changes in general economic
conditions, interest rates or credit or securities markets in the U.S. or
elsewhere, (e) changes in Law, or any judgments, orders or decrees that apply
generally to similarly situated Persons, (f) changes in international, national,
regional or local markets for fuel used or usable in the Business, (g) any
change or effect resulting from any condition imposed on any Party or the
Business by a Governmental Authority in connection with the grant of such
Governmental Authority’s Consent or approval of the transactions contemplated
hereby, (h) any acts of war or terrorist activities, (i) strikes, work stoppages
or other labor disturbances that are not specific to the Business, (j) any
matter to the extent that (I) it is disclosed in reasonable detail in any
Schedule delivered by Seller on the date hereof and (II) such disclosed matter
does not worsen in a material manner, (k) any change or effect arising directly
by reason of the announcement of the transactions provided for in this
Agreement, and (l) any change in or effect on the Business which is cured
(including by payment of money), without any material adverse impact, before the
earlier of the Closing and the termination of this Agreement pursuant to Section
‎10.1; provided, that in each of clauses (a), (b), (c), (e), (f) and (h), only
to the extent such changes or effects do not have a disproportionate effect on
the Business that is adverse to the properties, results of operations or
condition (financial or otherwise) of the Business (taken as a whole) as
compared to other similarly situated businesses.
 
65. “Material Contracts” means all Contracts to which any of the Companies is a
party or by which their respective Assets are bound (i) requiring or
guaranteeing (including by collateral signature, surety, or joint and several
debt) payments to or by any of the Companies in excess of $250,000 per annum or
$750,000 in the aggregate, (ii) for the sale, purchase, interconnection, supply
or transmission of fuel, energy, capacity, or any ancillary services, (iii) that
are employment or collective bargaining agreements, (iv) that are partnership,
joint venture or limited liability company agreements, (v) for the creation,
incurrence, assumption or guarantee of any outstanding Indebtedness, or under
which any of the Companies has imposed a security interest on any of its Assets,
which security interest secures outstanding Indebtedness, (vi) for the
acquisition, ownership, or leasing of any real property, and for which any
material obligations are outstanding , or (vii) which contain any covenant
restricting the ability of any of the Companies to compete or to engage in any
activity or business, except, in each case, for Contracts with respect to which
the Companies will not be bound or have liability from or after the Closing or
which are terminable on less than ninety (90) days’ notice without penalty or
payment.
 
66. “Newco” has the meaning set forth in the recitals to this Agreement.
 
67. “Newco Interests” has the meaning set forth in the recitals to this
Agreement.
 
68. “Newco Specified Payables Adjustment Amount” means the sum of the amounts
payable by Newco as of the Closing Date relating to the accounts payable
specified on Schedule ‎1.1(‎68) allocable to periods prior to the Closing Date
(whether or not then due and payable, but excluding any amounts actually paid by
Newco, Seller or its Affiliates in respect of such accounts payable prior to the
Closing Date), as determined in accordance with the methodology set forth on
Schedule ‎1.1(‎68).
 
69. “Non-Company Affiliate” means any Affiliate of Seller other than the
Companies.
 
70. “Order” means any award, decision, injunction, judgment, order, writ,
decree, ruling, subpoena, or verdict entered, issued, made, or rendered by any
Governmental Authority that possesses competent jurisdiction.
 
71. “Outside Date” has the meaning set forth in Section ‎10.1(b).
 
72. “Party” and “Parties” have the respective meanings set forth in the preamble
to this Agreement.
 
73. “Permit” means any permit, certificate, license, franchise, Consent,
approval, registration, franchise or similar authorization issued, made or
rendered by any Governmental Authority that possesses competent jurisdiction.
 
74. “Permitted Encumbrances” means: (a) statutory liens for Taxes or other
charges or assessments of Governmental Authorities not yet due or delinquent, or
which are being contested in good faith by appropriate proceedings and are set
forth on Schedule ‎1.1(‎74); (b) mechanics’, carriers’, workers’, repairers’ and
other similar liens arising or incurred in the ordinary course of business
consistent with past practices; (c) zoning, entitlement, conservation
restriction and other land use and environmental restrictions and regulations of
Governmental Authorities that are made public; (d) Encumbrances created by Buyer
or its Representatives on Buyer’s behalf; (e) Encumbrances of record (other than
Encumbrances securing Indebtedness of Seller or its Affiliates) or as set forth
on the ALTA/ACSM Land Title Survey for University Park, dated August 9, 2002;
and (f) imperfections or irregularities of title and such other Encumbrances
that are, individually or in the aggregate, not reasonably likely to materially
detract from the value or use and enjoyment thereof in the Business as currently
conducted.
 
75. “Person” means any individual, partnership, limited liability company, joint
venture, corporation, trust, unincorporated organization, other entity, business
association or Governmental Authority.
 
76. “PJM” means PJM Interconnection, L.L.C., and any successor entity thereto.
 
77. “PJM Transfer Date” means such date as the transfer to Buyer of Seller’s
and/or its Affiliates’ entitlement to the capacity, energy and ancillary
services of the University Park Station is reflected in all applicable PJM
systems and databases.
 
78. “PPL Energy Supply” has the meaning set forth in the recitals to this
Agreement.
 
79. “PPL Energy Supply Guarantee” means the guarantee dated as of the date
hereof of PPL Energy Supply, for the benefit of Buyer.
 
80. “Pre-Closing Tax Period” has the meaning set forth in Section 8.1(a).
 
81. “Purchase Price” has the meaning set forth in Section ‎2.2(a).
 
82. “Redevelopment Agreement” means the Redevelopment Agreement Pertaining to
Redevelopment Site No. 38 in the Governors Gateway Industrial Park Redevelopment
Project Area, dated as of June 12, 2001 by and between the Village of University
Park and PPL University Park, LLC.
 
83. “Release” means any release, spill, leak, discharge, disposal of, pouring,
emptying, injecting, or dumping of a Hazardous Substance into the environment.
 
84. “Representatives” of a Person means, collectively, such Person’s Affiliates
and its and their respective directors, managers, officers, partners, members,
employees, representatives, agents and advisors (including accountants, legal
counsel, environmental consultants, engineering consultants and financial
advisors).
 
85. “Restoration Cost” has the meaning set forth in Section 6.13.
 
86. “Restructuring” means the consummation of the transactions contemplated by
the Restructuring Agreements.
 
87. “Restructuring Agreements” means those agreements attached hereto as Exhibit
E.
 
88. “RGGI” means the Regional Greenhouse Gas Initiative.
 
89. “Securities Act” means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
 
90. “Seller” has the meaning set forth in the preamble to this Agreement.
 
91. “Seller Benefit Plans” has the meaning set forth in Section 6.10(a).
 
92. “Seller Marks” has the meaning set forth in Section ‎6.11.
 
93. “Seller’s Indemnitee” has the meaning set forth in Section ‎9.1(a).
 
94. “Seller’s Interests” has the meaning set forth in the recitals to this
Agreement.
 
95. “Seller’s Required Regulatory Approvals” has the meaning set forth in
Section ‎4.3(b).
 
96. “Specified Credit Support” has the meaning set forth on Schedule 1.1(96).
 
97. “Specified Credit Support Beneficiaries” has the meaning set forth on
Schedule 1.1(97).
 
98. “Specified Credit Support Parties” has the meaning set forth on Schedule
1.1(98).
 
99. “Specified Credit Support Releases” has the meaning set forth in Section
6.7(a).
 
100. “Specified Credit Support Replacements” has the meaning set forth in
Section 6.7(a).
 
101. “Specified Payables Adjustment Amount” means the sum of the Newco Specified
Payables Adjustment Amount and the Wallingford Specified Payables Adjustment
Amount.
 
102. “Specified Regulatory Condition” has the meaning set forth on Schedule
1.1(102).
 
103. “Stations” means, together, the Wallingford Station and the University Park
Station.
 
104. “Straddle Period” has the meaning set forth in Section ‎8.1(a).
 
105. “Straddle Period Tax Return” has the meaning set forth in Section ‎8.3(b).
 
106. “Subsidiary”, when used in reference to any Person, means any entity of
which outstanding securities or interests having ordinary voting power to elect
a majority of the board of directors or other governing body performing similar
functions of such entity are owned directly or indirectly by such Person.
 
107. “Tax” or “Taxes” means all taxes, charges, fees, levies, penalties and
other assessments imposed by any Governmental Authority, including income, gross
receipts, gross earnings, gross revenue, gas, excise, property, sales, transfer,
use, franchise, payroll, withholding, social security and other taxes, together
with any interest, penalties or additions attributable thereto.
 
108. “Tax Proceedings” has the meaning set forth in Section ‎8.4(b).
 
109. “Tax Return” means any return, report, information return or other
document, together with all amendments and supplements thereto (including any
related or supporting information), required to be supplied to any Governmental
Authority responsible for the administration of Laws governing Taxes.
 
110. “Terminated Contracts” has the meaning set forth in Section ‎6.9(a).
 
111. “Third-Party Claim” has the meaning set forth in Section ‎9.2(a).
 
112. “Total Purchase Price” means the sum of the Initial Amount plus the
“Initial Amount” (as defined in the Affiliate PSA), which in all cases shall
equal $381,000,000.
 
113. “Transfer Act” has the meaning set forth in Section 6.4(f).
 
114. “Transfer Taxes” has the meaning set forth in Section 8.7.
 
115. “Transition Services Agreement” has the meaning set forth in Section
‎6.9(b).
 
116. “University Park” has the meaning set forth in the recitals to this
Agreement.
 
117. “University Park Interests” means, prior to the Restructuring, 100% of the
issued and outstanding membership interests of University Park.
 
118. “University Park Station” means the simple cycle, natural gas-fired
generating facility known as the PPL University Park generating station, located
in University Park, Illinois.
 
119. “U.S.” means the United States of America.
 
120. “Wallingford” has the meaning set forth in the recitals to this Agreement.
 
121. “Wallingford Interests” has the meaning set forth in the recitals to this
Agreement.
 
122. “Wallingford Site Lease” means the Lease, dated as of March 8, 2000, by and
between the Town of Wallingford and PPL Wallingford Energy LLC, as amended.
 
123. “Wallingford Specified Payables Adjustment Amount” means the sum of the
amounts payable by Wallingford as of the Closing Date relating to the accounts
payable specified on Schedule ‎1.1(123) allocable to periods prior to the
Closing Date (whether or not then due and payable, but excluding any amounts
actually paid by Wallingford, Seller or its Affiliates in respect of such
accounts payable prior to the Closing Date), as determined in accordance with
the methodology set forth on Schedule ‎1.1(‎123).
 
124. “Wallingford Station” means the simple cycle, natural gas-fired generating
facility known as PPL Wallingford Energy generating station, located near
Wallingford, Connecticut.
 
125. “WARN” has the meaning set forth in Section ‎6.10(b)(ii).
 
1.2 Construction.  In construing this Agreement, together with the Schedules and
Exhibits hereto, the following principles shall be followed:
 
(a) the terms “herein,” “hereof,” “hereby,” “hereunder” and other similar terms
refer to this Agreement as a whole and not only to the particular Article,
Section or other subdivision in which any such terms may be employed;
 
(b) except as otherwise set forth herein, references to Articles, Sections,
Schedules, Exhibits and other subdivisions refer to the Articles, Sections,
Schedules, Exhibits and other subdivisions of this Agreement;
 
(c) a reference to any Person shall include such Person’s predecessors;
 
(d) all accounting terms not otherwise defined herein have the meanings assigned
to them in accordance with U.S. generally accepted accounting principles;
 
(e) no consideration shall be given to the captions of the Articles, Sections,
Schedules, Exhibits, subdivisions, subsections or clauses, which are inserted
for convenience in locating the provisions of this Agreement and not as an aid
in its construction;
 
(f) examples shall not be construed to limit, expressly or by implication, the
matter they illustrate;
 
(g) the word “includes” and “including” and their syntactical variants mean
“includes, but is not limited to” and “including, without limitation,” and
corresponding syntactical variant expressions;
 
(h) a defined term has its defined meaning throughout this Agreement, regardless
of whether it appears before or after the place in this Agreement where it is
defined; and
 
(i) the plural shall be deemed to include the singular and vice versa.
 
1.3 U.S. Dollars. When used herein, the term “dollars” and the symbol “$” refer
to the lawful currency of the U.S.
 
ARTICLE II
 
PURCHASE AND SALE
 
2.1 Closing. The purchase and sale of the Seller’s Interests, and the
consummation of the other transactions contemplated hereby (including the due
execution and delivery of the Assignment and Assumption Agreement), shall take
place at a closing (the “Closing”) to be held at the offices of Simpson Thacher
& Bartlett LLP, 425 Lexington Avenue, New York, NY 10017, on the same date and
simultaneously with the Affiliate PSA Closing, on the date that is five (5)
Business Days after the date on which the last of the conditions precedent to
the Closing set forth in ‎Article VII of this Agreement (other than the
Affiliate PSA Closing and those other conditions that by their very nature are
to be satisfied at the Closing, but subject to the fulfillment or waiver of such
conditions) shall have been satisfied (provided that such Closing shall not
occur until the earlier of (i) the date that is five (5) Business Days after the
“Closing Date” as such term is defined in the Purchase and Sale Agreement, dated
as of April 28, 2010, by and among E.ON US Investments Corp., PPL Corporation
and E.ON AG and (ii) December 20, 2010) or, to the extent permitted by
applicable Law, waived by the Party for whose benefit such conditions precedent
exist, or at such other date, time and location as may be agreed upon in writing
between Buyer and Seller. The date on which the Closing actually occurs is
hereinafter called the “Closing Date.” The Closing shall be effective for all
purposes as of 12:01 a.m., New York City time, on the Closing Date.
 
2.2 Payment of Purchase Price.
 
(a) Upon the terms and subject to the conditions set forth in this Agreement, in
consideration of the aforesaid sale, assignment, conveyance, transfer and
delivery of the Seller’s Interests and the due execution and delivery of the
Assignment and Assumption Agreement, Buyer shall pay to Seller cash in an
aggregate amount equal to (A) the Initial Amount minus (B) the Specified
Payables Adjustment Amount (collectively, the “Purchase Price”). At the Closing,
Buyer shall pay to Seller the Initial Amount minus the Estimated Specified
Payables Adjustment Amount in accordance with Section ‎2.2(b), without deduction
or withholding of any kind, by wire transfer of immediately available funds in
U.S. Dollars to such account or accounts specified by Seller to Buyer in writing
at least two (2) Business Days prior to the Closing (the “Closing Payment”).
 
(b) At least three (3) Business Days prior to the Closing Date, Seller shall
provide to Buyer a worksheet setting forth its good faith reasonable estimate of
the Specified Payables Adjustment Amount (the “Estimated Specified Payables
Adjustment Amount”), such Estimated Specified Payables Adjustment Amount being
an absolute value. The Initial Amount payable at the Closing will be decreased
by an amount equal to the absolute value of such Estimated Specified Payables
Adjustment Amount.
 
2.3 Adjustment to Purchase Price.  Within sixty (60) days after the Closing,
Seller will prepare and deliver to Buyer a computation of the actual Specified
Payables Adjustment Amount (the “Actual Specified Payables Adjustment Amount”),
such Actual Specified Payables Adjustment Amount being an absolute value.  If
within thirty (30) days following delivery of such computation Buyer does not
object in writing thereto to Seller, then the Actual Specified Payables
Adjustment Amount shall be as reflected on the computation provided by Seller
pursuant to the immediately preceding sentence.  If within such thirty (30) days
Buyer objects to Seller in writing to such computation, then Buyer and Seller
shall negotiate in good faith and attempt to resolve their disagreement.  Should
such negotiations not result in an agreement within thirty (30) days after
receipt by Seller of such written objection from Buyer, then the disputed items
of the Actual Specified Payables Adjustment Amount (such items, the “disputed
items”) shall be submitted to the Independent Accounting Firm, and all other
items on the Actual Specified Payables Adjustment Amount shall be final, binding
and conclusive on the Parties.  The Independent Accounting Firm will deliver to
Buyer and Seller written determinations of the disputed items (such
determination to include a worksheet setting forth all material calculations
used in arriving at such determination and to be based solely on information
provided to the Independent Accounting Firm by Buyer and Seller) within thirty
(30) days of the submission of the dispute to the Independent Accounting Firm,
which determination will be final, binding and conclusive on the Parties.  In
resolving any disagreement, the Independent Accounting Firm may not assign any
value to a disputed item greater than the greatest value claimed for such
disputed item by any Party or lesser than the lowest value claimed for such
disputed item by any Party. All fees and expenses relating to the work, if any,
to be performed by the Independent Accounting Firm pursuant to this Section ‎2.3
will be allocated between Seller and Buyer in inverse proportion as each shall
prevail in respect of the dollar amount of disputed items so submitted (as
finally determined by the Independent Accounting Firm).  If, following the
determination of the Actual Specified Payables Adjustment Amount (as agreed
between the Parties or as determined by the Independent Accounting Firm), the
Estimated Specified Payables Adjustment Amount minus the Actual Specified
Payables Adjustment Amount is a positive number, then Buyer shall be obligated
to pay Seller a cash payment equal to the positive number.  If the Estimated
Specified Payables Adjustment Amount minus the Actual Specified Payables
Adjustment Amount is a negative number, then Seller shall be obligated to pay
Buyer a cash payment equal to the absolute value of such negative number.  Any
such payment will be due and payable within three (3) Business Days after the
Actual Specified Payables Adjustment Amount is finally determined as provided in
this Section ‎2.3, and will be payable by wire transfer of immediately available
funds to such account or accounts as shall be specified by Buyer or Seller, as
applicable.  For the avoidance of doubt, after taking into account the payment
of the Estimated Specified Payables Adjustment Amount, the aggregate adjustment
made with respect to the Specified Payables Adjustment Amount shall be an amount
equal to the Actual Specified Payables Adjustment Amount.
 
2.4 Deliveries by Seller.  At the Closing, Seller shall deliver, or cause to be
delivered, the following to Buyer:
 
(a) The Assignment and Assumption Agreement, duly executed by Seller or the
applicable Affiliate(s) of Seller;
 
(b) Except as otherwise required in accordance with applicable Law, Buyer and
Seller shall duly deliver to each other executed counterparts of the Membership
Interest Transfer Agreements in respect of the Seller’s Interests substantially
in the form attached as Exhibit B, and Seller shall attach thereto any
certificates representing the Seller’s Interests or other documents necessary to
transfer the Seller’s Interests to Buyer;
 
(c) A letter of resignation for each of the officers and directors of the
Companies;
 
(d) Evidence, in form and substance reasonably satisfactory to Buyer,
demonstrating that Seller has obtained the Seller’s Required Regulatory
Approvals set forth on Schedule ‎7.1(c)(ii);
 
(e) An affidavit, duly executed by the appropriate Affiliate of Seller,
certifying facts as necessary to exempt the transactions hereunder from
withholding under Section 1445 of the Code;
 
(f) An estoppel certificate relating to the Wallingford Site Lease in the form
attached hereto as Exhibit D;
 
(g) Evidence of the consummation of the Restructuring Agreements in accordance
with the terms thereof to effect the merger of (i) Leasing with and into
Wallingford and (ii) University Park with and into Newco;
 
(h) All books and records of the Companies and any other books and records in
Seller’s or its other Affiliates’ possession and directly related to the
Business and the Assigned Agreements, including books and records relating to
operations, regulatory matters, and as necessary to make, prepare or file any
Tax Return of the Companies; provided such books and records shall not include
(A) duplicate copies of all records transferred to Buyer pursuant to this
Agreement, (B) documents or files relating to employees of Seller or its
Affiliates as of the date hereof who are not employees of Buyer or its
Affiliates after Closing, (C) employee documents or files afforded confidential
treatment under any applicable Laws, except to the extent the affected employee
consents in writing to the disclosure of the same to Buyer, (D) all records
prepared in connection with the sale of the Companies (including bids received
from third parties and analyses relating to the Companies), or (E) financial or
other projections, other than internal projections prepared by the Companies,
relating to the Business;
 
(i) Copies, certified by the Secretary or Assistant Secretary of Seller, of
resolutions authorizing the execution, delivery and performance of this
Agreement, each Additional Agreement to which Seller is a party and all of the
other agreements and instruments, in each case, to be executed, delivered and
performed by Seller in connection herewith;
 
(j) A bill of sale evidencing transfer from Seller or one of its Affiliates to
the Person designated by Buyer pursuant to Section 6.15 of two spare turbines
held for use at University Park Station or similar facilities in substantially
the form attached hereto as Exhibit F; and
 
(k) Such other agreements, documents, instruments and writings as are reasonably
required to be delivered by Seller at or prior to the Closing Date pursuant to
this Agreement or otherwise reasonably required in connection herewith.
 
2.5 Deliveries by Buyer.  At the Closing, Buyer shall deliver, or cause to be
delivered, the following to Seller:
 
(a) The Closing Payment, by wire transfer of immediately available funds in
accordance with Seller’s instructions to the account of Seller as designated by
Seller pursuant to Section ‎2.2(a);
 
(b) The Assignment and Assumption Agreement, duly executed by Buyer;
 
(c) Evidence, in form and substance reasonably satisfactory to Seller,
demonstrating that Buyer has obtained the Buyer’s Required Regulatory Approvals
set forth on Schedule ‎7.1(c)(i);
 
(d) The Specified Credit Support Replacement and the Specified Credit Support
Release;
 
(e) Copies, certified by the Secretary or Assistant Secretary of Buyer, of
resolutions authorizing the execution, delivery and performance of this
Agreement, each Additional Agreement to which Buyer is a party, and all of the
other agreements and instruments, in each case, to be executed, delivered and
performed by Buyer in connection herewith; and
 
(f) Such other permits, agreements, documents, instruments and writings as are
reasonably required to be delivered by Buyer at or prior to the Closing Date
pursuant to this Agreement or otherwise reasonably required in connection
herewith.
 
2.6 Allocation of Purchase Price.  Seller and Buyer agree to allocate the
Purchase Price (and all other capitalizable costs) among the Seller’s Interests
for all Tax purposes in accordance with an allocation schedule (the “Allocation
Schedule”) prepared by Buyer within 120 days after the Closing Date or, if
later, 15 days following the determination of the final Actual Specified
Payables Adjustment Amount pursuant to Section 2.3, such Allocation Schedule
subject to Seller’s review and consent and prepared in accordance with Section
1060 of the Code and Treasury Regulations promulgated thereunder; provided,
however, that in the event that Seller and Buyer cannot reach agreement with
respect to the Allocation Schedule within thirty (30) days after Buyer provides
the Allocation Schedule to Seller, the Independent Accounting Firm shall resolve
any disputed portion of the Allocation Schedule in a manner similar to Section
‎2.3.  The Allocation Schedule shall be consistent with the allocation of a
portion of the Purchase Price to the turbines pursuant to Schedule 1.1(56).  The
costs related to having the Independent Accounting Firm resolve disputes
relating to the Allocation Schedule shall be borne equally by Buyer and Seller.
Seller and Buyer agree to file or cause to be filed all Tax Returns in respect
of the Seller’s Interests in a manner consistent with the Allocation Schedule
and to take no position for Tax purposes inconsistent with the Allocation
Schedule, in each case unless required otherwise by a final determination of a
competent taxing authority.
 
ARTICLE III

 
REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANIES
 
As an inducement to Buyer to enter into this Agreement and consummate the
transactions contemplated hereby, Seller hereby represents and warrants to Buyer
as follows:
 
3.1 Organization and Existence.  Each of the Companies (except for Newco) are
and Newco will be validly existing and in good standing under the laws of the
jurisdiction in which each was formed and each has all requisite limited
liability company power and authority to own, lease and operate its properties
and to carry on its business as it is now being conducted.  Each of the
Companies (except for Newco) are and Newco will be duly qualified or licensed to
do business in each other jurisdiction where the actions required to be
performed by it hereunder makes such qualification or licensing necessary,
except in those jurisdictions where the failure to be so qualified or licensed
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
 
3.2 Company.  The legal name, place of organization and respective ownership
interest of each of the Companies is accurately and completely set forth on
Schedule ‎3.2, except as a result of the Restructuring with respect to Leasing
and University Park (which will cease to exist).  None of the Companies owns any
direct or indirect equity ownership, participation or voting right or interest
in any other Person or any options, warrants, convertible securities,
exchangeable securities, subscription rights, conversion rights, exchange
rights, stock appreciation rights, phantom stock, profit participation or other
similar rights in or issued by any other Person.  Other than as set forth on
Schedule 3.2, no Person owns any direct or indirect equity ownership,
participation or voting right or interest in any of the Companies or any
options, warrants, convertible securities, exchangeable securities, subscription
rights, conversion rights, exchange rights, stock appreciation rights, phantom
stock, profit participation or other similar rights in or issued by any of the
Companies.
 
3.3 Absence of Certain Changes or Events.  Except (a) as set forth on Schedule
‎3.3, and (b) for any action taken by the Companies that would be permitted
without Buyer’s consent under Section ‎6.8, since December 31, 2009, the
Business has been conducted in accordance with the ordinary course of business
consistent with past practices, except in connection with any process relating
to the sale of the Companies.  Since December 31, 2009, there has not been any
change, event or effect that, individually or in the aggregate with other
changes, events or effects, has resulted in, or would reasonably be expected to
result in, a Material Adverse Effect.
 
3.4 Legal Proceedings.  Except as disclosed on Schedule ‎3.4, there are no
suits, claims or other litigation, or any other material Actions pending or, to
Seller’s Knowledge, threatened against or otherwise relating to any of the
Companies before any Governmental Authority or any arbitrator.  Except as
disclosed on Schedule ‎3.4, none of the Companies are subject to any Order of
any Governmental Authority or any arbitrator that would, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect. This
Section 3.4 does not relate to (i) matters related to employee benefits, which
matters are the subject of Section ‎3.8, (ii) environmental matters, which
matters are the subject of Section 3.9, or (iii) matters related to Taxes, which
matters are the subject of Section 3.11.
 
3.5 Compliance with Laws; Sufficiency of Permits and Assets.  Each of the
Companies is in compliance in all material respects with any Law applicable to
it or its Business or properties.  All Permits and all equipment, services,
intellectual property, real property and other Assets, that the Companies
require in order to own, lease, maintain, operate and conduct the Business in
all material respects as currently conducted (including, as of July 28, 2010,
the inventory levels set forth on Exhibit G), are held by the Companies, except
(i) such equipment, services, intellectual property and other assets that are
obtained by the Companies prior to the Closing, and (ii) as set forth on
Schedule 3.5.  The Companies are in compliance in all material respects with the
terms of all Permits applicable to the Business.  Neither Seller nor the
Companies has received notice of any material violation of Law with respect to
the Companies or their respective Businesses or properties during the last five
(5) years. This Section ‎3.5 does not relate to (i) matters related to employee
benefits, which matters are the subject of Section 3.8, (ii) environmental
matters, which matters are the subject of Section ‎3.9, or (iii) matters related
to Taxes, which matters are the subject of Section ‎3.11.
 
3.6 Material Contracts.
 
(a) The contracts listed in Schedule ‎3.6(a) include all Material Contracts as
of the date hereof.
 
(b) Each Material Contract constitutes the valid and binding obligation, in full
force and effect, of the Companies party thereto and, to Seller’s Knowledge, the
other parties thereto, except that in each case (i) such enforceability may be
subject to any bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other Laws now or hereafter in effect affecting or relating to
enforcement of creditors’ rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
 
(c) Except as set forth on Schedule ‎3.6(c), none of the Companies are in
default and, to Seller’s Knowledge, no other party is in default in the
performance or observance in any material respect of any terms or provisions of,
and no event has occurred which, with lapse of time or action by a third party,
would result in such a default under, any Material Contract.
 
3.7 Properties; No Liens.  Except as set forth in Schedule 3.7, the Companies
each have good and marketable title to, or valid leasehold interests in, all
real property owned or leased by it to permit the operation of its Business as a
whole substantially as such Business has been operated heretofore.  None of such
properties or any other Assets of the Companies (whether real or personal) are
subject to any Encumbrance, except for (i) Encumbrances set forth on Schedule
3.7 and (ii) Permitted Encumbrances.
 
3.8 Employee Benefits.
 
(a) Schedule 3.8(a)(i) sets forth a complete and accurate list of each material
“employee benefit plan” (within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”)), and each material
severance, change in control, vacation, bonus, and equity incentive plan,
program, policy or agreement, in each case that is sponsored, contributed to or
maintained by Seller, its Affiliates, or the Companies and in which any employee
of the Companies (each a “Company Employee”) participates (collectively, the
“Benefit Plans”). True and correct copies of each Benefit Plan sponsored or
maintained solely by one of the Companies (the “Company Benefit Plans”) have
been made available to Buyer or its Representatives and are set forth on
Schedule 3.8(a)(ii).
 
(b) Except as would not, individually or in the aggregate, be reasonably likely
to have a Material Adverse Effect or material adverse effect on Buyer or its
Affiliates: (x) the Company Benefit Plans are in compliance with all applicable
requirements of ERISA, the Code, and other applicable Law and are administered
in accordance with their terms and (y) each Company Benefit Plan that is
intended to be qualified within the meaning of Section 401 of the Code has (A)
received a favorable determination letter as to its qualification or (B) been
established under a standardized master and prototype or volume submitter plan
for which a current favorable Internal Revenue Service advisory letter or
opinion letter has been obtained by the plan sponsor and is valid as to the
adopting employer, and in either case, to the Knowledge of the Seller, nothing
has occurred that would reasonably be expected to result in the loss of such
qualification.
 
(c) As of the date of this Agreement, there is no pending or, to Seller’s
Knowledge, threatened litigation with respect to any Company Benefit Plan, other
than ordinary and usual claims for benefits by participants and beneficiaries.
 
(d) Except as set forth on Schedule 3.8(d), or as would not, individually or in
the aggregate, be reasonably likely to have a Material Adverse Effect:
 
(i) no Company Employees are represented by a union or other collective
bargaining representative;
 
(ii) there are no pending, nor to Seller’s Knowledge threatened, labor strikes,
requests for representation, work stoppages or lockouts involving Company
Employees;
 
(iii) Seller has not received notice of any pending charges against the
Companies before any Governmental Authority responsible for the prevention of
unlawful employment practices;
 
(iv) the Companies are in compliance with all Laws affecting the employment of
labor; and
 
(v) neither Seller nor the Companies have received notice of any pending
investigation by a Governmental Authority relating to the Company Employees or
the Companies’ employment practices.
 
3.9 Environmental Matters.  Except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect and except
as disclosed on Schedule 3.9: (a) the Companies are in compliance with all
Environmental Laws, (b) there are no claims pending or, to Seller’s Knowledge,
threatened against any of the Companies relating to any violation of, or
liability under, any Environmental Law, and (c) no Hazardous Substance has been
Released at any real property owned by any of the Companies or to Seller’s
Knowledge used by any of them in the operation of the Stations in an amount or
condition that would reasonably be expected to result in liability under any
Environmental Law.  None of the Companies transports any Hazardous Substance off
of its properties for disposal in a manner that would reasonably be expected to
result in any material liability under any Environmental Law.  This Section 3.9
contains the sole and exclusive representations and warranties of Seller
relating to Environmental Laws, Hazardous Substances or other environmental
matters.
 
3.10 Insurance.  The Companies and their respective businesses or properties are
insured as specified under the insurance policies and in the amounts listed on
Schedule ‎3.10.  No written notice of cancellation or termination has been
received by Seller or any of the Companies with respect to any of such material
policies that has not been replaced on substantially similar terms prior to the
date of such cancellation or termination.
 
3.11 Taxes.
 
(a) All material Tax Returns required to be filed by or with respect to the
Companies have been filed when due in accordance with all applicable Laws and
all such Tax Returns are true, correct and complete in all material respects to
the extent such Tax Returns relate to the Companies.
 
(b) All material Taxes in respect of the Companies shown as due and payable on
such Tax Returns have been timely paid in full.
 
(c) Except as set forth on Schedule ‎3.11(c), there is no action, suit,
proceeding, investigation, audit or claim now pending with respect to any
material Tax with respect to the Companies and none of the Companies have
received any written notice of deficiency or assessment from any Governmental
Authority with respect to Taxes which has not been fully paid or finally settled
or which is being contested in good faith through appropriate proceedings and
for which adequate reserves have been established in accordance with GAAP.
 
(d) The Companies have timely and properly collected, withheld and remitted to
the taxing authority to whom such payment is due all amounts required to be
collected or withheld by the Companies for the payment of material Taxes.
 
(e) Except as set forth on Schedule 3.11(e), (i) no Company is a member of a
consolidated, combined or unitary aggregate group and (ii) no Company is liable
for the Taxes of any other Person, whether by Law, by contract or as successor
or as transferee in interest and no Company is a party to any Tax sharing, Tax
indemnity or Tax allocation agreement.
 
(f) There are no Liens for Taxes (other than Permitted Encumbrances) on any
assets of any Company.
 
(g) Except as set forth on Schedule 3.11(g), there are no waivers or outstanding
agreements extending the applicable statutory period of limitations of Taxes of
the Companies.
 
(h) Each of Wallingford and Leasing are, and have been since inception, and, at
the Closing, Newco is, and since its inception has been, a disregarded entity
for federal income tax purposes.
 
3.12 Intellectual Property.  Except as set forth on Schedule 3.12, the Companies
possess or have adequate rights to use all trademarks, trade names, patents,
service marks, brand marks, brand names, computer programs, databases,
industrial designs and copyrights necessary for the operation of the Business in
the manner in which it is currently being conducted by the Companies, except for
the failure to possess or have adequate rights to use such properties that would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  Except as set forth on Schedule 3.12, Seller has no Knowledge
of (a) any infringement or claimed infringement by the Companies of any patent,
trademark, service mark or copyright of others or (b) any infringement of any
patent, trademark, service mark or copyright owned by or under license to any of
the Companies, except for any such infringements of the type described in clause
(a) or (b) that are not, individually or in the aggregate, reasonably likely to
have a Material Adverse Effect.
 
3.13 Personal Property.  Except as set forth on Schedule 3.13, the machinery and
equipment included as part of the Assets of the Companies are in normal
operating condition and in a state of reasonable maintenance and repair and are
suitable in all material respects for the purposes for which they are now being
used in the conduct of the Business.
 
3.14 Absence of Undisclosed Liabilities.  Except as disclosed on Schedule 3.14,
the Companies do not have any Liabilities (whether accrued, absolute, contingent
or otherwise), except (a) Liabilities under any Contracts listed in Schedule
3.6(a) (excluding any breach or default thereunder), (b) Liabilities under any
Permitted Encumbrance, Order, Permit or Law (excluding any violations thereof),
(c) Liabilities pursuant to this Agreement, including with respect to the
Specified Payables Adjustment Amount, (d) Liabilities to be cancelled or paid at
or before Closing, with no ongoing Liabilities or obligations of the Companies
or Buyer, or (e) other Liabilities not in excess of $100,000 individually or
$500,000 in the aggregate.
 
3.15 Regulatory Status.  Wallingford and University Park are each an “exempt
wholesale generator” as such term is defined in the Public Utility Holding
Company Act of 2005, as amended, and the regulations of the FERC promulgated
thereunder.  Wallingford and University Park have each been authorized by the
FERC under the Federal Power Act to make sales of electric capacity and energy
at market-based rates.  Seller has no Knowledge of any facts that are reasonably
likely to cause either Wallingford or University Park to lose its status as an
“exempt wholesale generator” or its market-based rate authorization.
 
3.16 Exclusive Representations and Warranties.  It is the explicit intent of
each Party hereto that Seller is not making any representation or warranty
whatsoever, express or implied, except those representations and warranties
expressly set forth in this ‎Article III and ‎Article IV.
 
ARTICLE IV

 
REPRESENTATIONS AND WARRANTIES OF SELLER
 
As an inducement to Buyer to enter into this Agreement and consummate the
transactions contemplated hereby, Seller hereby represents and warrants to Buyer
as follows:
 
4.1 Organization; Qualification.  Seller is a limited liability company validly
existing and in good standing under the laws of the State of Delaware and has
all requisite limited liability company power and authority to enter into this
Agreement and consummate the transactions contemplated hereby. Seller is duly
qualified or licensed to do business in each other jurisdiction where the
actions required to be performed by it hereunder makes such qualification or
licensing necessary, except in those jurisdictions where the failure to be so
qualified or licensed would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on Seller’s ability to consummate the
transactions contemplated hereby.
 
4.2 Authority.  Seller has full limited liability company power and authority to
execute and deliver this Agreement and each Additional Agreement to which it is
a party and to consummate the transactions contemplated hereby. The execution
and delivery by Seller of this Agreement and each Additional Agreement to which
it is a party and the consummation by Seller of the transactions contemplated
hereby have been duly authorized by all necessary limited liability company
action required on the part of Seller. This Agreement has been duly executed and
delivered by Seller; and this Agreement constitutes, and upon the execution and
delivery by Seller of each Additional Agreement to which it is a party, each
such Additional Agreement will constitute, the valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, except that (a)
such enforceability may be subject to any bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other Laws now or hereafter
in effect affecting or relating to enforcement of creditors’ rights generally
and (b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
 
4.3 Consents and Approvals; No Violation.
 
(a) Except as set forth on Schedule 4.3(a), subject to obtaining or making all
Seller’s Required Regulatory Approvals and obtaining or making all Consents and
Filings under the HSR Act, neither the execution and delivery by Seller of this
Agreement and the Additional Agreements to which it is a party nor the
consummation by Seller of the transactions contemplated hereby or thereby will
(i) conflict with or result in any breach of any provision of the certificates
of formation or operating agreements of Seller or the Companies; (ii) result in
a default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, material Contract or other instrument or obligation
to which Seller is a party or by which it may be bound or any Material Contract,
except for such defaults (or rights of termination, cancellation or
acceleration) (A) as to which requisite Consents have been, or will be prior to
the Closing, obtained, or (B) which would not be material to the Companies and
which would not, individually or in the aggregate, materially impair Seller’s
ability to consummate the transactions contemplated hereby, or to perform its
material obligations hereunder or under any Additional Agreement; or (iii)
constitute a violation of any Law applicable to Seller or the Companies which
violation, individually or in the aggregate, would be material to the Companies
or would materially impair Seller’s ability to consummate the transactions
contemplated hereby, or to perform its material obligations hereunder or under
any Additional Agreement.
 
(b) Except for Consents and Filings (i) required under the HSR Act or (ii) set
forth on Schedule 4.3(b) (the Consents and Filings referred to in clause (ii) of
this sentence are collectively referred to herein as the “Seller’s Required
Regulatory Approvals”), no Consent or Filing with any Governmental Authority is
necessary for the execution and delivery by Seller of this Agreement and the
Additional Agreements to which it is a party or the consummation by Seller of
the transactions contemplated hereby or thereby, other than (i) such Consents
and Filings which, if not obtained or made, would not be material to the
Companies or materially impair Seller’s ability to perform its material
obligations under this Agreement; and (ii) such Consents and Filings which
become applicable to the Companies or Seller as a result of the status of Buyer
(or any of its Affiliates) or as a result of any other facts that specifically
relate to the business or activities in which Buyer (or any of its Affiliates)
is or proposes to be engaged.
 
4.4 Title and Related Matters.  Seller is directly the legal and beneficial
owner of, and has good and marketable title to, the Wallingford Interests, the
Leasing Interests and the University Park Interests (except as a result of the
Restructuring with respect to the Leasing Interests and the University Park
Interests, which shall no longer exist) and Seller will be directly the legal
and beneficial owner of, and will have good and marketable title to, the Newco
Interest, in each case free and clear of all Encumbrances other than those
arising pursuant to this Agreement, and the Wallingford Interests, the Leasing
Interests and the University Park Interests are, and the Newco Interest will be,
duly authorized and validly issued.  There are no outstanding options, warrants
or other rights of any kind including any restrictions on transfers, relating to
the sale, or voting of, such Seller’s Interests, the subscription of additional
membership interests of the Companies or any securities convertible into or
evidencing the right to purchase additional membership interests of the
Companies.  Upon Closing, Buyer shall have good and marketable title to Seller’s
Interests, free and clear of any Encumbrances, restrictions on transfer and
voting or preemptive rights.  Seller has no outstanding claims for expenses or
reimbursement from the Companies that will remain outstanding from and after the
Closing.
 
4.5 Assigned Agreements.
 
(a) Each Assigned Agreement constitutes the valid and binding obligation, in
full force and effect, of Seller and/or its Affiliates party thereto and, to
Seller’s Knowledge, the other parties thereto, except that in each case (i) such
enforceability may be subject to any bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other Laws now or hereafter in effect
affecting or relating to enforcement of creditors’ rights generally and (ii) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
 
(b) Except as set forth on Schedule ‎4.5(b), neither Seller nor any of its
Affiliates is in default and, to Seller’s Knowledge, no other party is in
default in the performance or observance in any material respect of any terms or
provisions of, and no event has occurred which, with lapse of time or action by
a third party, would result in such a default under any Assigned Agreement.
 
4.6 Legal Proceedings.  There are no suits, actions or proceedings pending or
threatened against Seller by or before any Governmental Authority, which would,
individually or in the aggregate, impair Seller’s ability to consummate the
transactions contemplated hereby. Seller is not subject to any Order of any
Governmental Authority which would, individually or in the aggregate, impair
Seller’s ability to consummate the transactions contemplated hereby.
 
4.7 Brokers; Finders.  Except as set forth on Schedule ‎4.7, Seller has not, and
none of Seller’s Affiliates have, retained any financial advisor, broker, agent,
or finder or paid or agreed to pay any financial advisor, broker, agent, or
finder on account of this Agreement or the transactions contemplated
hereby.  None of Buyer and its Affiliates (including, following the Closing, the
Companies) shall have any such responsibility or liability with respect to any
Person set forth on Schedule 4.7.
 
ARTICLE V

 
REPRESENTATIONS AND WARRANTIES OF BUYER
 
As an inducement to Seller to enter into this Agreement and consummate the
transactions contemplated hereby, Buyer hereby represents and warrants to Seller
as follows:
 
5.1 Organization; Qualification.  Buyer is a limited liability company, validly
existing and in good standing under the laws of Delaware and has all requisite
limited liability company power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted.  Buyer has
heretofore delivered to Seller true and correct copies of its certificate of
formation and limited liability company agreement as currently in effect.
 
5.2 Authority.  Buyer has full limited liability company power and authority to
execute and deliver this Agreement and each Additional Agreement to which it is
a party and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and each such Additional Agreement by
Buyer and the consummation by Buyer of the transactions contemplated hereby have
been duly authorized by all necessary limited liability company action required
on the part of Buyer. This Agreement has been duly executed and delivered by
Buyer; and this Agreement constitutes, and upon the execution and delivery by
Buyer of each Additional Agreement to which it is a party, each such Additional
Agreement will constitute, the valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, except that (a) such
enforceability may be subject to any bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other Laws now or hereafter in effect
affecting or relating to enforcement of creditors’ rights generally and (b) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
 
5.3 Consents and Approvals; No Violation.
 
(a) Except as set forth on Schedule ‎5.3(a), and subject to obtaining or making
all Buyer’s Required Regulatory Approvals and obtaining or making all Consents
and Filings under the HSR Act, neither the execution and delivery by Buyer of
this Agreement and the Additional Agreements to which it is a party nor the
consummation by Buyer of the transactions contemplated hereby will (i) conflict
with or result in any breach of any provision of the certificate of formation
and limited liability company agreement of Buyer or any of its Subsidiaries;
(ii) result in a default (or give rise to any right of termination, cancellation
or acceleration) under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, material agreement or other instrument or obligation
to which Buyer or any of its Subsidiaries is a party or by which Buyer, any such
Subsidiary or any of their respective Assets may be bound, except for such
defaults (or rights of termination, cancellation or acceleration) as to which
requisite consents, approvals or waivers have been or will be prior to the
Closing obtained, or which would not, individually or in the aggregate,
materially impair Buyer’s ability to consummate the transactions contemplated
hereby, or to perform its material obligations hereunder or under any Additional
Agreement (a “Buyer Material Adverse Effect”); or (iii) constitute a violation
of any Law applicable to Buyer or any of its Subsidiaries, which violation,
individually or in the aggregate, would have a Buyer Material Adverse Effect.
 
(b) Except for Consents and Filings (i) required under the HSR Act or (ii) set
forth on Schedule ‎5.3(b) (the Consents and Filings referred to in clause (ii)
of this sentence are collectively referred to herein as the “Buyer’s Required
Regulatory Approvals”), no Consent or Filing with any Governmental Authority is
necessary for the execution and delivery by Buyer of this Agreement and the
Additional Agreements to which it is a party or the consummation by Buyer of the
transactions contemplated hereby, other than such Consents and Filings which, if
not obtained or made, would not have a Buyer Material Adverse Effect.
 
5.4 Buyer’s Permits.  All Permits that Buyer requires in order to own and
exercise the rights and obligations with respect to the Seller’s Interests and
to perform the Assumed Liabilities are, or will be at or prior to the Closing,
held by Buyer.
 
5.5 Availability of Funds.  Buyer, together with Buyer Parent, has sufficient
funds available to it to permit Buyer on the Closing Date to pay the Purchase
Price, all other amounts payable by Buyer hereunder, and all fees and expenses
incurred by Buyer in connection with the transactions contemplated hereby, and
to permit Buyer to timely pay or perform all of its other obligations under this
Agreement and the Additional Agreements.
 
5.6 Legal Proceedings.  There are no suits, actions or proceedings pending or to
Buyer’s Knowledge threatened against Buyer by or before any Governmental
Authority, which would, individually or in the aggregate, have a Buyer Material
Adverse Effect. Buyer is not subject to any Orders of any Governmental Authority
which would, individually or in the aggregate, have a Buyer Material Adverse
Effect.
 
5.7 Inspections.  Buyer is a sophisticated entity, is knowledgeable about the
industry in which the Companies operate, experienced in investments in such
business and able to bear the economic risk associated with the purchase of the
Seller’s Interests.  Buyer has such knowledge and experience as to be aware of
the risks and uncertainties inherent in the purchase of the type contemplated in
this Agreement, as well as the knowledge of the Companies and their operations
in particular, and has independently, based on such information, made its own
analysis and decision to enter into this Agreement.  Buyer had access to the
books, records, facilities and personnel of the Companies for purposes of
conducting its due diligence investigation of the Companies.
 
5.8 Brokers; Finders.  Buyer has not, and none of Buyer’s Affiliates have,
retained any financial advisor, broker, agent, or finder or paid or agreed to
pay any financial advisor, broker, agent, or finder on account of this Agreement
or the transactions contemplated hereby.
 
5.9 Investment Intent.  Buyer is acquiring the Seller’s Interests for its own
account for investment and not with a view to, or for sale or other disposition
in connection with, any distribution of all or any part thereof in violation of
federal or state securities law. In acquiring the Seller’s Interests, Buyer is
not offering or selling, and will not offer or sell, for Seller or otherwise in
connection with any distribution of the Seller’s Interests, and Buyer will not
participate in any such undertaking or in any underwriting of such an
undertaking except in compliance with applicable federal and state securities
laws. Buyer acknowledges that it is able to fend for itself, can bear the
economic risk of its investment in the Seller’s Interests, and has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of an investment in the Seller’s Interests.
Buyer is an “accredited investor” as such term is defined in Regulation D under
the Securities Act. Buyer understands that the Seller’s Interests will not be
registered pursuant to the Securities Act or any applicable state securities
laws, that the Seller’s Interests will be characterized as “restricted
securities” under federal securities laws and that under such laws and
applicable regulations the Seller’s Interests cannot be sold or otherwise
disposed of without registration under the Securities Act or an exemption
therefrom.
 
ARTICLE VI

 
COVENANTS OF THE PARTIES
 
6.1 Access to Information.
 
(a) Between the date of this Agreement and the Closing Date: (i) Seller shall
provide Buyer and its Representatives with information as to the Business, the
Seller’s Interests, the Assigned Agreements and the Companies as reasonably
requested by Buyer and to the extent such information is readily available to
Seller or could readily be obtained by Seller without any material cost or
expense or material interference with the Business; provided that.
notwithstanding the foregoing, Seller shall not be required to provide any
information (A) which Seller reasonably believes it, its Affiliates or any of
the Companies is prohibited from providing to Buyer by reason of applicable Law
or Permit, (B) which constitutes or allows access to information protected by
attorney/client privilege, or (C) which Seller, its Affiliates or any of the
Companies is required to keep confidential or prevent access to by reason of any
contract or agreement with a third party; and (ii) Seller shall provide Buyer
and its Representatives with reasonable access to the facilities, properties and
management of the Companies as may be requested by Buyer, provided (A) such
access shall be conducted at a time and in a manner so as not to unreasonably
interfere with the operation of the Business, (B) Seller shall have the right to
have one or more of its Representatives present at all times during any such
access, and (C) any such access shall not include any invasive or destructive
environmental testing or sampling.
 
(b) All information furnished to or obtained by Buyer and Buyer’s
Representatives pursuant to this Section 6.1 shall be kept confidential in
accordance with the terms of the Confidentiality Agreement. Nothing in this
Section ‎6.1 is intended to or shall be deemed to amend, supplement or otherwise
modify the obligations of Buyer, its Representatives or its Affiliates under the
Confidentiality Agreement, all of which remain in effect until termination of
such agreement in accordance with its terms. Buyer shall be subject to and bound
by all obligations of LS Power Equity Advisors, LLC under the Confidentiality
Agreement as though Buyer were a party thereto.
 
(c) From and after the Closing Date, Buyer shall, and shall cause its
Representatives to, afford to Seller, including its Representatives and
Affiliates, reasonable access to all books, records, files and documents to the
extent they are related to the Companies in order to permit Seller and its
Affiliates to prepare and file their Tax Returns and to prepare for and
participate in any investigation with respect thereto, to prepare for and
participate in any other investigation and defend any Actions relating to or
involving Seller or its Affiliates, to discharge its obligations under this
Agreement, to comply with financial reporting requirements, and for other
reasonable purposes, and will afford Seller and its Affiliates reasonable
assistance in connection therewith. Buyer will cause such records to be
maintained for not less than seven years from the Closing Date and will not
dispose of such records without first offering in writing to deliver them to
Seller; provided, however, that in the event that Buyer transfers all or a
portion of the business of the Companies to any third party during such period,
Buyer may transfer to such third party all or a portion of the books, records,
files and documents related thereto, provided such third party transferee
expressly assumes in writing the obligations of Buyer under this Section 6.1(c).
In addition, on and after the Closing Date, at Seller’s request, Buyer shall
make available to Seller and its Affiliates and Representatives those employees
of Buyer requested by Seller in connection with any Actions, including to
provide testimony, to be deposed, to act as witnesses and to assist counsel;
provided, however, that (i) such access to such employees shall not unreasonably
interfere with the normal conduct of the operations of Buyer or the Companies
and (ii) Seller shall reimburse Buyer for the out-of-pocket costs reasonably
incurred by Buyer in making such employees available to Seller and its
Affiliates and Representatives.
 
(d) From and after the Closing, Seller and its Affiliates shall be entitled to
retain copies (at Seller’s sole cost and expense) of all books and records
relating to its ownership or operation of the Companies and the Business and the
Assigned Agreements.  For a period of two (2) years from and after the Closing
Date, Seller and its Affiliates shall keep confidential all nonpublic
information in any form or medium, written or oral, concerning the Companies,
the Business and the Assigned Agreements, and shall not disclose such
information to any third parties, except those of Seller’s Representatives who
reasonably require access to such nonpublic information in connection with the
transactions contemplated by this Agreement, including in connection with the
enforcement hereof or for financial reporting, legal or regulatory compliance or
tax purposes (provided Seller shall be responsible for any breach of this
provision by any such Representative).  If Seller is requested pursuant to, or
required by, applicable law, regulation, or by legal or regulatory process or
governmental investigation, to disclose any such nonpublic information, Seller
shall provide Buyer, unless restricted by applicable law, with prompt notice of
such request or requirement in order to enable Buyer to (i) seek an appropriate
protective order or other remedy, (ii) consult with Seller with respect to
Seller taking steps to resist or narrow the scope of such request or legal
process, or (iii) waive compliance, in whole or in part, with the terms of this
Section 6.1(d).  In any such event, Seller shall use its commercially reasonable
efforts to ensure that all such nonpublic information will be accorded
confidential treatment and shall furnish only that portion of the nonpublic
information which is legally required.  This Section 6.1(d) shall not apply to
any information, documents or materials which are in the public domain or shall
come into the public domain, other than by reason of a breach by Seller of its
obligations hereunder.  Furthermore, nothing herein shall be deemed to limit or
restrict Seller from disclosing any information in any action or proceeding by
Seller or its Affiliates to the extent necessary to enforce any rights or
remedies against Buyer or its Affiliates in connection with the transactions
contemplated by this Agreement.
 
(e) Buyer shall not, prior to the Closing Date, contact any customer, vendor or
supplier of, or director, officer, partner, member or employee of, or any other
Person having business dealings with, the Companies or Seller or its Affiliates
with respect to the Business or the transactions contemplated hereby, including
any Governmental Authority, without the prior written consent of Seller, which
shall not be unreasonably withheld or delayed.
 
6.2 Public Statements.  Except as required by applicable Law or by applicable
rules of any national securities exchange, in which event the Parties shall
consult with each other in advance, prior to the Closing Date, no press release
or other public announcement, statement or comment relating to the transactions
contemplated by this Agreement shall be issued, made or permitted to be issued
or made by any Party or its Representatives without the prior written consent of
the other Party.
 
6.3 Further Assurances.  Subject to the terms and conditions of this Agreement,
each of the Parties hereto 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, proper or advisable under applicable Laws to consummate and
make effective the purchase and sale of the Seller’s Interests pursuant to this
Agreement and the assumption of the Assumed Liabilities, including using its
commercially reasonable efforts to ensure satisfaction of the conditions
precedent to each Party’s obligations hereunder, including obtaining all
necessary Consents, and making all required Filings with, third parties required
to be obtained or made in order to consummate the transactions hereunder.
 
6.4 Governmental Consents and Approvals.  Without limiting the generality of
Section ‎6.3:
 
(a) As promptly as practicable, but in no event later than forty-five (45) days
after the date of this Agreement, Seller and Buyer shall each file or cause to
be filed with the U.S. Federal Trade Commission and the U.S. Department of
Justice (the “Antitrust Authorities”) all notifications required to be filed
under the HSR Act and the rules and regulations promulgated thereunder, as
amended, with respect to the transactions contemplated hereby. Buyer and Seller
shall supply as promptly as practicable any additional information or
documentary material that may be requested pursuant to the HSR Act and shall
take all other actions necessary to cause the expiration or termination of the
applicable waiting periods under the HSR Act as soon as practicable.  Buyer and
Seller shall comply substantially with any additional requests for information,
including requests for production of documents and production of witnesses for
interviews or depositions, made by any Antitrust Authority and take all other
reasonable actions to obtain clearance from the Antitrust Authorities.  Buyer
and Seller shall each exercise commercially reasonable efforts to prevent the
entry in any proceeding brought by an Antitrust Authority or any Governmental
Authority of an order that would prohibit, make unlawful or delay the
consummation of the transactions contemplated by this Agreement. Each of Buyer
and Seller shall pay one-half of all Filing fees payable under the HSR Act but
each Party shall bear its own costs and expenses of the preparation of any such
Filing and any such response.
 
(b) As promptly as practicable, but in no event later than forty-five (45) days
after the date of this Agreement, Seller and Buyer shall take, or cause to be
taken, all actions, and do, or cause to be done, all things necessary, proper or
advisable under applicable Laws to obtain all required Consents of all other
Governmental Authorities, and make all other Filings required to be made prior
to the Closing with respect to the transactions contemplated hereby, including
with respect to the Seller’s Required Regulatory Approvals and Buyer’s Required
Regulatory Approvals.  Each Party shall bear its own costs and expenses of the
preparation of any such Filing.  Buyer and Seller will diligently pursue and use
their commercially reasonable efforts to obtain such Consents and will cooperate
with each other in seeking such Consents. To such end, the Parties agree to make
available the personnel and other resources of their respective organizations in
order to obtain all such Consents. Each Party will promptly inform the other
Party of any material communication received by such Party from, or given by
such party to, any Governmental Authority from which any such Consent is
required 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 (unless prohibited by Law or by such
Governmental Authority), and will permit the other Party to review any
communication given by it to, and consult with each other in advance of any
meeting or conference with, any such Governmental Authority or, in connection
with any proceeding by a private party, with such other Person, and to the
extent permitted by such Governmental Authority or other Person, give the other
Party the opportunity to attend and to participate in such meetings and
conferences.
 
(c) Without limiting the generality of Section ‎6.4(b), each Party shall use its
reasonable best efforts to make all Filings required by such Party under Section
203 of the Federal Power Act as are required in connection with the consummation
of the transactions contemplated hereby as promptly as possible but in no event
later than forty-five (45) days after the date of this Agreement. Prior to
filing any application with the FERC, both Parties shall prepare such
application and shall incorporate into such application all revisions reasonably
requested by the other Party. Each Party shall be solely responsible for its own
cost of preparing and filing such application, as well as all petitions for
rehearing and all reapplications; provided, however, that Buyer shall bear all
costs and expenses associated with experts and consultants reasonably necessary
for the preparation of any required market power study or report. If any
required approval is denied by the FERC, the Parties shall petition the FERC for
rehearing or permission to re-submit an application with the FERC.
 
(d) Notwithstanding anything in this Agreement to the contrary, each of Buyer
and Seller agrees that the making of any required Filings or the obtaining of
any required Consents with or from any Governmental Authority are the equal
responsibility of both Parties, and that each Party shall use commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable to make such Filings
or obtain such Consents with or from any Governmental Authority as are required
in connection with the consummation of the transactions contemplated hereby and
the parties shall comply with Schedule 6.4(d).
 
(e) The Parties agree that, to the greatest extent practicable, all Filings
required to be made and Consents required to be obtained under this Agreement
will be combined with the Filings and Consents required under the terms of the
Affiliate PSA, including through joint applications for all Consents under
Section 203 of the Federal Power Act and a single HSR Act Filing.

(f) Connecticut Transfer Act Responsibilities.  The Parties acknowledge that
consummation of the transaction contemplated by this Agreement will constitute a
“transfer of an establishment” as that term is defined by the Connecticut
Property Transfer Act (the “Transfer Act”), Connecticut General Statutes §
22a-134.  As a result of the application of the Transfer Act to this Agreement,
the Parties agree as follows:

(i)           Seller shall prepare the appropriate Transfer Act forms with the
Connecticut Department of Environmental Protection (“DEP”), including without
limitation a properly completed and certified Form III, Environmental Condition
Assessment Form, and Fee Payment Form.  Buyer shall assist Seller in the
completion of such Transfer Act forms, where necessary;

(ii)           Prior to Closing, Seller shall conduct, at its own expense, an
investigation in accordance with, as closely as reasonably possible, the
requirements of DEP’s Remedial Standard Regulations, Regulations of Connecticut
State Agencies §§ 22a-133k-1 through 3 in order to identify any required
remediation thereunder, and thereafter shall prepare a good faith estimate of
the total remediation costs, if any, that would be applicable under the
foregoing regulations based on the findings of such investigation;

(iii)           Seller shall be responsible for filing all appropriate Transfer
Act forms with the DEP, which shall be filed within 10 days following the
Closing Date, and for the payment of all associated filing fees pursuant to the
provisions of the Transfer Act; and

(iv)           Wallingford shall act as the Certifying Party, as that term is
defined in the Transfer Act, in connection with the transactions contemplated by
this Agreement.  As Certifying Party, Wallingford will conduct any required
investigations and undertake any required remediation in accordance with DEP’s
Remedial Standard Regulations, Regulations of Connecticut State Agencies §§
22a-133k-1 through 3; provided that, Buyer shall (and shall cause Wallingford
to) (A) keep Seller informed of any material developments with respect to
activities relating to the Transfer Act, including investigation and any
remediation thereunder and (B) give Seller (i) reasonable advance notice of and
opportunity to participate in material meetings and conferences with
Governmental Authorities and licensed environmental professionals responsible
for any such investigation or remediation and (ii) the right to review, comment
and Consent with respect to material Actions and decisions with respect to such
investigations and remediations, including material communications and Filings
with any Governmental Authority (such consent not to be unreasonably withheld,
delayed or conditioned).

 
6.5 PJM and ISO New England.  Seller and Buyer shall cooperate and use their
commercially reasonable efforts to cause the PJM Transfer Date and the ISO New
England Transfer Date to occur as of the Closing Date or as promptly as
practicable thereafter.  If the PJM Transfer Date and/or the ISO New England
Transfer Date is not the Closing Date, Buyer and Seller (and, as applicable,
their respective Affiliates) will enter into appropriate arrangements designed
to provide that Buyer will receive all appropriate proceeds (net of any directly
related expenses, if any, including fuel costs) from the sale of capacity
(including locational forward reserve payments), energy and ancillary services
from the applicable Station(s) following Closing.  Any such proceeds received by
Seller or its Affiliates attributable to post-Closing periods shall be promptly
paid to Buyer, and any proceeds received by Buyer or its Affiliates attributable
to the sale of capacity and energy from the Stations prior to Closing shall be
promptly paid to Seller or its Affiliates.
 
6.6 Assignment.
 
(a) Subject to Section ‎6.6(b) and Section ‎6.6(c) and pursuant to the terms and
conditions of the Assignment and Assumption Agreement, effective as of the
Closing, (i) Seller and its Affiliates will transfer and assign to Buyer all of
their rights and obligations under the Assigned Agreements arising following the
Closing, and (ii) Buyer will accept the transfer and assignment of and agree to
assume, pay, perform and discharge from and after the Closing all of the rights
and obligations of the Assigned Agreements arising following the Closing.
 
(b) Prior to the Closing, Seller and its Affiliates and Buyer will, in order to
consummate the transactions contemplated in this Section 6.6, (i) proceed
diligently and in good faith and use all commercially reasonable efforts, as
promptly as practicable, to obtain any required Consents and, if applicable,
make any required Filings in connection with the assignments contemplated by
Section ‎6.6(a), and (ii) reasonably cooperate in good faith with the applicable
counterparties to the Assigned Agreements and provide promptly such other
information and communications to such counterparties to the Assigned Agreements
as such counterparties to the Assigned Agreements may reasonably request in
connection therewith.  For the avoidance of doubt, it is specifically
acknowledged and agreed that neither Party nor any of its Affiliates shall be
obligated to pay, reimburse or provide, or cause any of their respective
Affiliates to pay, reimburse or provide, any compensation, consideration or
charge to obtain any such Consent.  Seller and its Affiliates and Buyer will
provide prompt notification to each other when any such Consent is obtained (or
refused) and will advise each other of any material communications with any
counterparties to the Assigned Agreements regarding any of the transactions
contemplated by this Agreement.
 
(c) Notwithstanding anything to the contrary in this Agreement, this Section 6.6
shall not constitute an agreement to assign or assume any obligation, claim,
right or benefit arising under any Assigned Agreement or resulting therefrom if
an attempted assignment or assumption thereof, without the Consent of a third
party thereto, would constitute a breach thereof.  Any transfer or assignment to
Buyer by Seller and its Affiliates of any provision of any Assigned Agreement
that requires the Consent of any third party shall be made subject to such
Consent being obtained.
 
(d) Without limiting the generality of Section ‎6.4(b), as promptly as
practicable, but in no event later than ten (10) days after the date of this
Agreement, the Parties shall jointly make a filing (the “FERC Waiver Filing”)
with FERC seeking to obtain an approval under, or waiver of, FERC’s capacity
release requirements, as may be necessary to effectuate the permanent release
and assignment to Buyer, or its designee, of the firm gas transportation service
agreement(s) included within the Assigned Agreements.  Seller shall cause its
affiliate, PPL EnergyPlus, LLC, as the holder of such firm gas transportation
service agreement(s), to join in such filing.
 
(e) Buyer and Seller agree that amounts payable to Seller or its Affiliates and
amounts payable and obligations to be performed by Seller or its Affiliates
under the Assigned Agreements for periods prior to Closing shall be for the
account of Seller or its Affiliates, and amounts payable and obligations to be
performed for periods following Closing shall be for the account of Buyer. Buyer
and Seller will instruct each applicable counterparty to pay amounts owed
thereunder for pre-Closing periods to Seller, and to pay amounts owed thereunder
for post-Closing periods to Buyer.  In any event, however, any such proceeds
received by Seller or its Affiliates attributable to post-Closing periods shall
be promptly paid to Buyer, and any such proceeds received by Buyer or its
Affiliates attributable to pre-Closing periods shall be promptly paid to Seller.
 
6.7 Release of Credit Support.
 
(a) Prior to the Closing, Buyer and Seller shall cooperate, and each shall use
its commercially reasonable efforts, (i) to effect the full and unconditional
release, effective as of the Closing Date, of the Specified Credit Support
Parties from their respective obligations under the applicable Specified Credit
Support and Buyer or its Affiliate shall issue replacement credit support,
effective as of the Closing Date, in form and substance satisfactory to each of
the Specified Credit Support Beneficiaries as set forth on Schedule 6.7((a))(i)
(the “Specified Credit Support Replacements”) and (ii) to cause the Specified
Credit Support Beneficiaries to terminate, surrender and redeliver to Seller or
Seller’s designee each original copy of the respective Specified Credit Support
and any other instrument constituting or evidencing Seller’s or the Specified
Credit Support Parties’ obligations to provide such Specified Credit Support as
set forth on Schedule 6.7((a))(ii) (the “Specified Credit Support Releases”);
provided, however, that no Party nor any of its Affiliates shall be obligated to
pay, reimburse or provide, or cause any of their respective Affiliates to pay,
reimburse or provide, any compensation, consideration or charge to obtain the
Specified Credit Support Replacements and the Specified Credit Support Releases.
 
(b) Schedule ‎6.7(b) sets forth all outstanding letters of credit, guarantees or
other forms of credit support posted by Seller or any of its Affiliates relating
to the Companies, the Stations or the Business.
 
6.8 Conduct of Business Pending the Closing.
 
(a) Between the date of this Agreement and the Closing Date, Seller shall cause
each of the Companies to (x) operate and maintain its Assets in the ordinary
course of business consistent with past practices, and (y) use commercially
reasonable efforts to preserve, maintain and protect its Assets in material
compliance with applicable Permits, Orders and Laws. Without limiting the
foregoing, and except as set forth on Schedule ‎6.8(a) or as contemplated by the
Restructuring, between the date of this Agreement and the Closing Date, except
as otherwise expressly contemplated by this Agreement or as consented to by
Buyer, which consent shall not be unreasonably withheld, conditioned or delayed,
Seller shall not (with respect to the Business), and shall not permit the
Companies to:
 
(i) sell or dispose of (x) any material Business assets or any material Assets
or (y) any Assets in excess of $100,000 individually (or $500,000 in the
aggregate) of the Companies, other than sales or dispositions of obsolete or
surplus Assets, sales and dispositions in connection with the normal and prudent
repair or replacement of Assets, or sales or dispositions in accordance with any
Material Contract (other than, for the avoidance of doubt, any Contract that
would be a Terminated Contract);
 
(ii) create, incur or assume any Indebtedness (except Indebtedness repaid prior
to Closing);
 
(iii) merge or consolidate with any other Person or acquire all or substantially
all of the assets of any other Person or enter into any joint venture,
partnership or similar venture with any other Person;
 
(iv) grant, issue, sell, or otherwise dispose of any of its equity interests,
including granting options, warrants or other rights to acquire such equity
interests;
 
(v) effect any recapitalization, reclassification or like change in its
capitalization;
 
(vi) liquidate, dissolve, reorganize or otherwise wind up its business or
operations;
 
(vii) purchase any equity securities of any Person, except for short-term
investments or cash equivalents made in the ordinary course of business
consistent with past practices;
 
(viii) amend or modify its organizational documents;
 
(ix) engage in any new line of business;
 
(x) enter into, assign, amend, terminate or waive any material term under any
Material Contract;
 
(xi) discharge, settle or satisfy any material Actions;
 
(xii) defer the payment, discharge, settlement or satisfaction of any Liability
outside the ordinary course of business consistent with past practices;
 
(xiii) assign, terminate or amend in any respect, or give any waiver or consent
with respect to, any Permit or Order;
 
(xiv) enter into or amend any employment agreement;
 
(xv) enter into any agreement with any labor union or association representing
any employee, except as required by applicable Law;
 
(xvi) make any loan, advance or capital contribution to or investment in any
Person;
 
(xvii) enter into any Contract with any Affiliate of Seller which will not be
terminated pursuant to Section 6.9;
 
(xviii) commence any litigation, arbitration or administrative or other
proceeding;
 
(xix) make, change or rescind any Tax election of the Companies, amend any
material Tax Return of the Companies, extend the statute of limitations with
respect to any Tax of the Companies, settle or compromise any Tax audit or enter
into or amend any real or personal property Tax agreement, treaty or settlement
that would affect the Tax liability of the Companies (for the avoidance of
doubt, the foregoing limitations shall not apply to any Taxes or Tax Returns in
respect of any consolidated, combined, unitary or aggregate group of which any
Company is a member); or
 
(xx) agree or commit to do any of the foregoing.
 
(b) Between the date of this Agreement and the Closing Date, except as otherwise
expressly contemplated by this Agreement or as consented to by Buyer, which
consent shall not be unreasonably withheld, conditioned or delayed, Seller shall
cause its Affiliate(s) that are parties to the Assigned Agreements not to
assign, amend, terminate or waive any material term under any Assigned
Agreement.
 
(c) Notwithstanding Section ‎6.8(a) and Section ‎6.8(b) or any other provision
herein, Seller may cause the Companies or its Affiliates, as the case may be, to
take commercially reasonable actions with respect to emergency situations or to
comply with applicable Laws or Permits; provided, however, that Seller shall
provide Buyer with notice of such action as soon as reasonably practicable.
 
6.9 Termination of Affiliate Contracts; Restructuring.
 
(a) Except as contemplated by this Agreement or as set forth on
Schedule ‎6.9(a), prior to the Closing, Seller shall, and shall cause the
Non-Company Affiliates to, take such actions as may be necessary to terminate,
sever, or assign from the Companies to Seller or a Non-Company Affiliate (in
each case with appropriate mutual releases) effective upon or before the Closing
all Contracts and services between any of the Companies, on the one hand, and
Seller or any Non-Company Affiliate, on the other hand, including the
termination or severance of insurance policies (including those policies
referred to in Section ‎6.12), Tax indemnity, Tax allocation, Tax sharing, Tax
services, legal services, banking services (to include the severance of any
centralized clearance accounts) and power purchase agreements (collectively such
Contracts, the “Terminated Contracts”).  On and after the Closing, none of
Buyer, the Companies or any of their Affiliates shall have any further
obligations or liabilities pursuant to the Terminated Contracts and all
intercompany receivables and payables shall be cancelled or paid as of the
Closing.
 
(b) Concurrently with the Closing, Buyer and Seller shall enter into a
Transition Services Agreement in the form attached hereto as Exhibit C (the
“Transition Services Agreement”). Between the date hereof and the Closing, Buyer
shall use commercially reasonable efforts to minimize the scope of transition
services to be provided under the Transition Services Agreement.
 
(c) On or prior to the Closing, Seller shall form Newco, and prior to the
Restructuring Newco shall not conduct any business or take any material actions
other than as contemplated in and in connection with the Restructuring.  Seller
shall consummate the Restructuring prior to the Closing.
 
6.10 Employee Benefits.
 
(a) General; Seller Benefit Plans.  From and after the Closing Date, each
Company Employee shall cease to have any right to accrue any benefits, and cease
to have any right to continue as or become an active participant under any
Benefit Plan other than a Company Benefit Plan (“Seller Benefit Plans”), or any
other incentive, compensation and benefits arrangements that are sponsored,
entered into, contributed to or maintained by Seller or any of its Affiliates,
except to the extent of any claim incurred prior to Closing under any group
disability, medical, dental, prescription drug or vision care benefits under any
Seller Benefit Plans or to the extent such benefits continue to be available, by
their express terms, through the end of the calendar month in which the Closing
Date occurs.  From and after the Closing Date, Buyer shall be responsible for
all obligations and liabilities, incurred on or after the Closing Date, under
all Company Benefit Plans and any other incentive, compensation and benefits
arrangements that are sponsored, entered into, contributed to or maintained by
the Companies, and, except for Excluded Liabilities, no obligations or
liabilities under the Companies Benefit Plans shall be retained by Seller or any
of its Affiliates.
 
(b) Continuity of Employment at Closing.
 
(i) Buyer and Seller intend that there shall be continuity of provision of
services to the Companies with respect to all Company Employees, immediately
before and immediately after the Closing.  Buyer shall ensure that each Company
Employee shall have the opportunity to continue to provide services to the
Companies on and immediately after the Closing Date on such terms as comply with
applicable Law, and on terms that comply with the requirements of this Section
‎6.10.
 
(ii) Buyer shall indemnify, defend, and hold Seller and its Affiliates harmless
from and against any and all liabilities, claims and obligations (including
attorney’s fees and other costs of defense) arising out of or otherwise in
respect of (A) any severance obligations with respect to any Company Employee
whose employment does not continue after the Closing Date, (B) Buyer’s failure
to comply with the provisions of this Section 6.10, (C) any severance or
termination liabilities resulting from the consummation of the transactions
contemplated by this Section ‎6.10 or this Agreement, or (D) any suit or claim
of violation brought against Seller or any of its Affiliates under the Worker
Adjustment and Retraining Notification Act (together with any similar state or
local law or regulation, “WARN”) for any actions taken by the Companies, the
Buyer or any of their Affiliates on or after the Closing Date with regard to any
site of employment, facility, operating unit or employee affected by this
Agreement.
 
(c) Post-Closing Compensation and Benefits.  Effective on the Closing Date, and
for a period of not less than 12 months following the Closing Date, Buyer shall
provide each Company Employee with (x) base salary and incentive compensation
opportunities that are no less favorable in the aggregate than those provided
(not including equity-based opportunities) to such Company Employee as of the
date hereof, and (y) employee benefits (including without limitation defined
contribution savings and retirement (and rate of company contributions
thereunder), severance, health, vision, dental, disability and life insurance
benefits, as well as vacation, time off, sick and holiday pay programs) that are
substantially similar in the aggregate to those provided to such Company
Employee as of the date hereof.
 
(d) Annual Cash Incentive. Without limiting the generality of the provisions of
Section 6.10(c), Buyer shall provide incentive plans, including target incentive
levels, to Company Employees which are no less favorable in the aggregate to the
incentive plans and target incentive levels in place immediately prior to the
Closing Date, from and after Closing and through December 31 of the calendar
year following the calendar year in which the Closing Date occurs.  Seller shall
retain and be responsible for a pro rata portion of the annual cash incentive
bonuses for hourly and salaried Company Employees in respect of the year in
which the Closing occurs, payable at the normal time such bonuses are paid,
based on actual performance for the full year.
 
(e) Severance.  Without limiting the generality of the provisions of
Section ‎6.10(c), from and after the Closing Date, Buyer shall provide severance
pay and benefits to each Company Employee whose employment terminates or is
terminated on or during the 12 month period following the Closing Date which are
substantially similar in the aggregate to those described in Schedule ‎6.10(e)
(taking into account increases in compensation and service through the date of
such termination).  As a condition of any such severance benefits, Buyer shall
require that affected employees execute (and not revoke) a general release of
all claims against Seller, Buyer and their respective Affiliates.
 
(f) Service Credit.  With respect to any incentive, compensation or employee
benefit arrangements as may be maintained for Company Employees from time to
time following the Closing Date by Buyer or any of its Affiliates (including
without limitation plans or policies providing severance benefits, vacation
entitlement, and sick pay), service by such Company Employees performed for
Seller, the Companies, or any of their Affiliates (or a predecessor to either
such entity’s business or assets) shall be treated as service with Buyer and its
Affiliates, for purposes of determining eligibility to participate, vesting and
benefit accruals (other than with respect to any defined benefit plan);
provided, however, that such service need not be recognized to the extent that
such recognition would result in a duplication of benefits or was not recognized
under a comparable Benefit Plan.
 
(g) Medical and Welfare Plan Obligations.
 
(i) Buyer agrees to waive any waiting periods or limitations for preexisting
conditions for each Company Employee under the welfare benefit programs of Buyer
made available to such Company Employee on or following the Closing Date, to the
same extent such periods or limitations would have been or were waived under a
Benefit Plan for the same purpose under the comparable type of welfare benefit
program in which such Company Employee was participating or eligible to
participate immediately prior to the Closing Date.  Buyer further agrees to
credit each Company Employee for amounts paid by such Company Employee under the
welfare benefit program in which such Company Employee was participating
immediately prior to the Closing Date towards satisfaction of the applicable
deductibles and out-of-pocket limits under the comparable type of welfare
benefit program of Buyer or its Affiliates in which such Company Employee first
participates on or after the Closing Date, to the same extent such credit was
given under the applicable welfare benefit program, and in each case in respect
of the plan year in which occurs the Closing Date.
 
(ii) Buyer also shall honor all vacation, personal and sick days accrued by such
Company Employees under the plans, policies, programs and arrangements of the
Companies, Seller or its Affiliates (or a predecessor to either such entity’s
business or assets) immediately prior to the Closing Date.
 
(iii) Buyer shall provide continuation health care coverage to Company Employees
and their qualified beneficiaries who incur a qualifying event, in accordance
with the continuation health care coverage requirements of Section 4980B of the
Code and Title I, Subtitle B, Part 6 of ERISA and any similar state or local law
on or after the Closing Date.
 
(h) Facility Closings; Employee Layoffs.  Buyer shall not terminate the
employment of any Company Employees in such numbers or at such times as would
trigger any liability under WARN to Seller or any of its Affiliates.
 
(i) No Amendments; No Third Party Beneficiaries.  All provisions contained in
this Section 6.10 are included for the sole benefit of the Parties to this
Agreement, and nothing herein, whether express or implied, shall create any
third party beneficiary or other rights (i) in any other Person, including,
without limitation, any current or former employee, any participant in any
incentive, compensation or benefit plan, policy, program or arrangement, or any
dependent, alternative payee or beneficiary thereof, or (ii) to continued
employment with Seller, Buyer, the Companies, or any of their respective
Affiliates, or continued participation in any incentive, compensation or benefit
plan, policy, program or arrangement.  Nothing here shall constitute an
amendment or modification of any Benefit Plan.
 
(j) Use of Third Party Operator.  The parties hereto agree that Buyer may
designate a third party operator in accordance with Schedule 6.10(j); provided
that in all events Buyer shall be responsible for any breach or failure to
comply with any of its obligations under this Section 6.10.
 
6.11 Seller Marks.  As soon as reasonably practicable, but in no event more than
thirty (30) days after the Closing Date, Buyer shall, and shall cause the
Companies to: (i) cease using any names, marks, trade names, trademarks and
corporate symbols and logos incorporating “PPL” and any word or expression
similar thereto or constituting an abbreviation or extension thereof
(collectively and together with all other names, marks, trade names, trademarks
and corporate symbols and logos owned by Seller or any of its Affiliates, the
“Seller Marks”); and (ii) remove from the Assets any and all Seller Marks and
amend the relevant organizational documents of the Companies to change the names
of the Companies to names that do not include any Seller Mark or any name or
term confusingly similar to any Seller Mark. Thereafter, Buyer shall not use any
Seller Mark or any name or term confusingly similar to any Seller Mark in
connection with the sale of any products or services, in the corporate or doing
business name of any of its Affiliates or otherwise in the conduct of its or any
of its Affiliates’ businesses or operations. In the event that Buyer breaches
this Section ‎6.11, Seller shall be entitled to specific performance of this
Section ‎6.11 and to injunctive relief against further violations, as well as
any other remedies at law or in equity available to Seller.
 
6.12 Insurance.  Seller shall maintain or cause to be maintained in full force
and effect the insurance policies described on Schedule ‎3.10 from the date of
this Agreement through the Closing.  In the event that the Companies or their
successors incur losses which are covered by such insurance policies, if prior
to Closing, Seller shall promptly notify Buyer in writing and, if after Closing,
Buyer shall promptly notify Seller in writing, and in either case from and after
Closing upon Buyer’s direction at Buyer’s sole cost and expense, Seller shall
(and shall cause its Affiliates to) reasonably cooperate with Buyer in pursuing
any claim with the relevant insurance carrier.  Seller shall (and shall cause
its Affiliates to) assign or otherwise remit the insurance proceeds therefrom to
Buyer at Closing or if received after the Closing Date, promptly upon receipt of
such payment.
 
6.13 Casualty.  Notwithstanding anything to the contrary contained in the
Uniform Vendor and Purchaser Risk Act (765 ILCS 65), if any of the Assets are
damaged or destroyed by casualty loss after the date hereof but prior to the
Closing, and the cost of restoring such damaged or destroyed Assets,
individually or in the aggregate, to a condition reasonably comparable to their
prior condition (as estimated by a qualified engineering firm reasonably
acceptable to Buyer and Seller, taking into account any lost profits and after
giving effect to any insurance proceeds available to Buyer or any of the
Companies therefor) (such cost with respect to such Assets, taking into account
any lost profits and after giving effect to any such insurance proceeds, the
“Restoration Cost”) is greater than $1,000,000 but does not exceed 15% of the
Purchase Price, Seller may elect, by notice to Buyer, to reduce the amount of
the Purchase Price by such Restoration Cost, or to replace the damaged or
destroyed Assets prior to Closing with assets in substantially the same
condition as the damaged or destroyed Assets prior to the casualty, and such
casualty loss shall not affect the Closing.  If Seller does not make either such
election within forty-five (45) days after the date of such casualty loss, Buyer
may elect to terminate this Agreement within ten (10) Business Days after the
end of such forty-five (45) day period by written notice to Seller.  If the
Restoration Cost is in excess of 15% of the Purchase Price, Seller may, by
notice to Buyer within forty-five (45) days after the date of such casualty
loss, elect to (a) reduce the Purchase Price by the Restoration Cost, (b)
replace the damaged or destroyed Assets prior to Closing with assets in
substantially the same condition as the damaged or destroyed Assets prior to the
casualty, or (c) terminate this Agreement, in each case by providing written
notice to Buyer; provided, that if Seller does not elect to terminate this
Agreement as provided in this sentence, then Buyer may, by written notice to
Seller, terminate this Agreement within ten (10) Business Days of receipt by
Buyer of Seller’s notice regarding its election.  If the Restoration Cost is
$1,000,000 or less, (i) neither Buyer nor Seller shall have the right or option
to terminate this Agreement and (ii) there shall be no reduction in the amount
of the Purchase Price.
 
6.14 Condemnation.  If any of the Assets is taken by condemnation during the
period between the date of this Agreement and the Closing Date and the
condemnation value of such Assets, individually or in the aggregate with other
condemned Assets (taking into account any lost profits and after giving effect
to any condemnation award proceeds paid or payable to Buyer or any of the
Companies) (as determined by a qualified firm reasonably acceptable to Buyer and
Seller) (such value with respect to such Assets, taking into account any lost
profits and after giving effect to any such condemnation award proceeds, the
“Condemnation Value”) is greater than $1,000,000 but is not in excess of 15% of
the Purchase Price, Seller may elect to reduce the Purchase Price by such
Condemnation Value by notice to Buyer, and such condemnation shall not affect
the Closing.  If Seller does not make such an election within 45 days after the
award of the condemnation proceeds, Buyer may elect to terminate this Agreement
within ten (10) Business Days after the end of such forty-five (45) day period
by written notice to Seller.  If the Condemnation Value is in excess of 15% of
the Purchase Price, Seller may, by notice to Buyer within forty-five (45) days
after the award of the condemnation proceeds, elect to (a) reduce the Purchase
Price by such Condemnation Value or (b) terminate this Agreement, in each case
by providing written notice to Buyer; provided that if Seller does not elect to
terminate this Agreement as provided in this sentence, then Buyer may, by
written notice to Seller, terminate this Agreement within ten (10) Business Days
of receipt by Buyer of Seller’s notice regarding its election.  If the
Condemnation Value is $1,000,000 or less, (i) neither Buyer nor Seller shall
have the right or option to terminate this Agreement and (ii) there shall be no
reduction in the amount of the Purchase Price.
 
6.15 Turbine Transfers.  Buyer shall provide to Seller, at least five (5)
Business Days prior to the Closing Date, a written notice of the legal entity or
entities (including Newco) into which the two spare turbines shall be
transferred.  The two spare turbines shall remain on site at the University Park
Station.
 
6.16 RGGI.  On or before thirty (30) days after the Closing Date, Seller shall
transfer or cause to be transferred to the Wallingford compliance account RGGI
emissions credits equal to the amount of CO2 emissions at the Wallingford
Station from January 1, 2009, up to and including the date of the Closing.
 

 
ARTICLE VII

 
CONDITIONS
 
7.1 Conditions to Obligation of Buyer.  The obligation of Buyer to effect the
transactions contemplated by this Agreement shall be subject to the satisfaction
(or the waiver, to the extent permitted by applicable Law, by Buyer) at or prior
to the Closing of the following conditions:
 
(a) The waiting period under the HSR Act applicable to the consummation of the
transactions contemplated hereby shall have expired or been terminated;
 
(b) No preliminary or permanent injunction or other Order by any Governmental
Authority which prevents the consummation of the transactions contemplated
hereby or by the Additional Agreements shall have been issued and remain in
effect (Buyer agreeing to use commercially reasonable efforts to have any such
injunction or Order lifted), and no applicable Law shall be in effect which
prohibits the consummation of the transactions contemplated hereby;
 
(c) The Consents set forth (i) in the case of the Buyer’s Required Regulatory
Approvals on Schedule 7.1(c)(i) and (ii) in the case of Seller’s Required
Regulatory Approvals on Schedule 7.1(c)(ii), shall have been duly obtained by
Final Order, all terminations or expirations of applicable waiting periods
imposed by any Governmental Authority with respect to the transactions
contemplated hereby (including under the HSR Act) shall have occurred, and none
of such Consents shall impose additional terms or conditions that would
reasonably be expected to result in any material and adverse impact on Buyer,
its Affiliates or the Business, or would impose any material change or
modification to this Agreement;
 
(d) Seller shall have performed and complied in all material respects with the
covenants and agreements contained in this Agreement which are required to be
performed and complied with by Seller at or prior to the Closing;
 
(e) The representations and warranties of Seller set forth in ‎Article III and
‎Article IV hereof shall be true and correct in all material respects as though
made at and as of the Closing Date (other than such (i) representations and
warranties that are made as of a specific date, which shall have been true and
correct as of such date, and (ii) representations and warranties that are
qualified by reference to materiality or Material Adverse Effect, which shall be
true and correct in all respects);
 
(f) Between the date hereof and the Closing Date, no Material Adverse Effect
shall have occurred and be continuing;
 
(g) Seller shall have delivered or shall stand ready to deliver all of the items
required to be delivered by Seller hereunder, including pursuant to Section
‎2.4;
 
(h) Each of the Assigned Agreements shall have been assigned to Buyer or its
designee in accordance with the terms and conditions of Section 6.6(a) and the
Assignment and Assumption Agreements;
 
(i) Buyer shall have received all third party consents, waivers or approvals
with respect to the sale of the Seller’s Interests, assignment of the Assigned
Agreements or the consummation of the transactions contemplated by this
Agreement as set forth on Schedule ‎7.1((i));
 
(j) Buyer shall have received a certificate from an authorized officer of
Seller, dated the Closing Date, to the effect that, to Seller’s Knowledge, the
conditions set forth in Sections ‎7.1(d), (e) and (f) have been satisfied;
 
(k) The Affiliate PSA Closing shall occur simultaneously with the Closing on the
Closing Date; and
 
(l) The Restructuring shall have been consummated.
 
7.2 Conditions to Obligation of Seller.  The obligation of Seller to effect the
transactions contemplated by this Agreement shall be subject to the satisfaction
(or the waiver, to the extent permitted by applicable Law, by Seller) at or
prior to the Closing of the following conditions:
 
(a) The waiting period under the HSR Act applicable to the consummation of the
transactions contemplated hereby shall have expired or been terminated;
 
(b) No preliminary or permanent injunction or other Order by any Governmental
Authority which prevents the consummation of the transactions contemplated
hereby or by the Additional Agreements shall have been issued and remain in
effect (Seller agreeing to use its commercially reasonable efforts to have any
such injunction or Order lifted), and no applicable Law shall be in effect which
prohibits the consummation of the transactions contemplated hereby;
 
(c) The Consents set forth (i) in the case of the Buyer’s Required Regulatory
Approvals on Schedule 7.1(c)(i) and (ii) in the case of Seller’s Required
Regulatory Approvals on Schedule ‎7.1(c)(ii), shall have been duly obtained by
Final Order, all terminations or expirations of applicable waiting periods
imposed by any Governmental Authority with respect to the transactions
contemplated hereby (including under the HSR Act) shall have occurred, and none
of such Consents shall impose additional terms or conditions that would
reasonably be expected to result in any material and adverse impact on the
Seller or any Non-Company Affiliate, or would impose any material change or
modification to this Agreement;
 
(d) Buyer shall have performed and complied in all material respects with the
covenants and agreements contained in this Agreement which are required to be
performed and complied with by Buyer at or prior to the Closing;
 
(e) The representations and warranties of Buyer set forth in ‎Article V hereof
shall be true and correct in all material respects as though made at and as of
the Closing Date (other than such (i) representations and warranties that are
made as of a specific date, which shall have been true and correct as of such
date, and (ii) representations and warranties that are qualified by reference to
materiality, Material Adverse Effect or Buyer Material Adverse Effect, which
shall be true and correct in all respects);
 
(f) Seller shall have received a certificate from an authorized officer of
Buyer, dated the Closing Date, to the effect that, to Buyer’s Knowledge, the
conditions set forth in Sections 7.2(d) and (e) have been satisfied;
 
(g) Seller shall have received all third party consents, waivers or approvals
with respect to the sale of the Seller’s Interests, assignment of the Assigned
Agreements or the consummation of the transactions contemplated by this
Agreement as set forth on Schedule 7.2(g);
 
(h) Buyer shall have delivered or shall stand ready to deliver all of the items
required to be delivered by Buyer hereunder, including pursuant to Section ‎2.5;
and
 
(i) The Affiliate PSA Closing shall occur simultaneously with the Closing on the
Closing Date.
 
7.3 Failure Caused by Party’s Failure to Comply.  Neither Seller nor Buyer may
terminate the Agreement in reliance on the failure of any condition set forth in
Sections ‎7.1 or ‎7.2, as the case may be, if such failure was caused directly
by such Party’s or its Affiliate’s failure to comply with any provision of this
Agreement or the Affiliate PSA.
 
ARTICLE VIII

 
TAX MATTERS
 
8.1 Tax Indemnification.
 
(a) The Seller shall indemnify, defend and hold harmless the Buyer’s Indemnitees
and its Affiliates from and against any and all Indemnifiable Losses
attributable to (i) any Taxes of the Companies with respect to any taxable
period that ends prior to the Closing Date (a “Pre-Closing Tax Period”) and with
respect to any taxable period that begins on or before and ends after the
Closing Date (a “Straddle Period”), for the portion thereof ending on the
Closing Date; (ii)  any and all liability (as a result of Treasury Regulation
Section 1.1502-6 or otherwise) for Taxes of Seller or any other Person which is
affiliated with the Companies or with whom any of the Companies otherwise joins
in filing any consolidated, combined, unitary or aggregate Tax Return
immediately prior to the Closing or the Restructuring; and (iii) any breach of
any representation or warranty contained in Section 3.11 or covenant set forth
in Sections 6.8(a)(xix) or 8.7, except in each case , any such Taxes for which
Buyer is responsible pursuant to Section 8.7.
 
(b) Notwithstanding any provision in this Agreement to the contrary, the
obligations of the Seller to indemnify and hold harmless the Buyer’s Indemnitees
pursuant to this Section 8.1 shall terminate at the close of business on the
30th day following the expiration of the applicable statute of limitations with
respect to the Tax liabilities in question (giving effect to any waiver,
mitigation or extension thereof).
 
8.2 Straddle Period.  In the case of any Straddle Period, the amount of Taxes
allocable to the portion of the Straddle Period ending on the Closing Date shall
be deemed to be:
 
(a) In the case of Taxes imposed on a periodic basis (such as real or personal
property Taxes), the amount of such Taxes for the entire period (or, in the case
of such Taxes determined on an arrears basis, the amount of such Taxes for the
immediately preceding period) multiplied by a fraction, the numerator of which
is the number of calendar days in the Straddle Period ending on and including
the Closing Date and the denominator of which is the number of calendar days in
the entire relevant Straddle Period (for illustrative purposes, and for the
avoidance of doubt, all Illinois real property Tax  bills for 2010 shall cover
the calendar year beginning January 1, 2010 and ending December 31, 2010 and the
Parties shall allocate the Taxes based upon their respective ownership periods
during that calendar year; all Connecticut real and personal property Tax bills
for 2010 shall cover the fiscal year beginning October 1, 2009 and ending
September 30, 2010 and the Parties shall allocate the Taxes based upon their
respective ownership periods during that fiscal year); and
 
(b) In the case of Taxes not described in Section ‎8.2(a) above (such as
franchise Taxes, Taxes that are based upon or related to income or receipts,
based upon occupancy or imposed in connection with any sale or other transfer or
assignment of property (real or personal, tangible or intangible)), the amount
of any such Taxes shall be determined as if such taxable period ended as of the
close of business on the Closing Date.
 
8.3 Responsibility for Filing Tax Returns.
 
(a) Seller shall prepare or cause to be prepared, and file or cause to be filed
(in a manner consistent with past practices) with the appropriate Governmental
Authority (i) all consolidated, combined, unitary or aggregate Tax Returns in
respect of University Park that include Seller or any of its Affiliates and (ii)
all Tax Returns in respect of the Companies that are required to be filed in
respect of a Pre-Closing Tax Period, and shall pay all Taxes due with respect to
such Tax Returns. All such Tax Returns described in clause (ii) of the preceding
sentence shall be prepared in a manner consistent with past practice except as
required by applicable Law.
 
(b) Buyer shall prepare or cause to be prepared and file or cause to be filed
when due all other Tax Returns with respect to the Companies and shall remit any
Taxes due in respect of such Tax Returns; provided that any such Tax Return in
respect of a Straddle Period (a “Straddle Period Tax Return”) shall be prepared
in a manner consistent with past practice except as required by applicable Law;
provided further, that Seller shall prepare or cause to be prepared and file or
cause to be filed any such Straddle Period Tax Return that is required to be
filed within thirty (30) days of the Closing Date and shall remit any Taxes due
in respect of such Tax Returns. Except as set forth on Schedule 8.3, with
respect to each Straddle Period Tax Return to be filed by a Party hereunder,
such Party shall deliver a copy of such Straddle Period Tax Return, in the case
of a Straddle Period Tax Return filed by Buyer,  at least thirty (30) days and,
in the case of a Straddle Period Tax Return filed by Seller, at least ten (10)
days prior to the due date for filing such Straddle Period Tax Return (including
valid extensions) together with a statement setting forth the amount of Tax
allocated to the other Party pursuant to Section ‎8.2 in respect of such
Straddle Period Tax Return.  The Party not preparing a Straddle Period Tax
Return shall have the right to review such Straddle Period Tax Return and such
allocation and, within 10 days after the date of receipt thereof, to request in
writing any reasonable changes to such Straddle Period Tax Return.  Seller and
Buyer agree to consult and resolve in good faith any issue arising as a result
of the review of such Straddle Period Tax Return and allocation.  In the event
the Parties are unable to resolve any dispute within ten (10) days after a Party
has received the other Party’s written request for changes, then any disputed
issues shall be immediately submitted to the Independent Accounting Firm to
resolve in a final binding matter prior to the due date for such Straddle Period
Tax Return.  The fees and expenses of the Independent Accounting Firm shall be
shared equally between Seller and Buyer. Each of Buyer and Seller shall
reimburse the other party no later than ten (10) Business Days following the due
date for any Straddle Period Tax Return (taking into account any valid
extensions thereof) to be filed by the other party for any Taxes due in respect
of such Straddle Period Tax Return for which such first party is responsible
pursuant to this Agreement.
 
8.4 Tax Proceedings.
 
(a) If a claim shall be made by any taxing authority, which, if successful,
might result in an indemnity payment to a Buyer’s Indemnitee pursuant to Section
‎8.1, then the Buyer shall give notice to the Seller in writing of such claim
and of any counterclaim the Buyer proposes to assert.
 
(b) Seller shall control the conduct of all audits, contests, claims for refunds
or other administrative or judicial proceedings (a “Tax Proceeding”) in respect
of Taxes for which Seller is solely responsible pursuant to this Agreement and
may make all decisions taken in connection with such Tax Proceeding (including
selection of counsel).  Notwithstanding the foregoing, Seller shall not settle
such Tax Proceeding without the prior written consent of Buyer, which consent
shall not be unreasonably withheld, if such Tax Proceeding could have a material
adverse impact on the Taxes of the Buyer or any of its Affiliates (including,
for any period after the Closing Date, University Park).  For purposes of this
Agreement, any request for reimbursement pursuant to ‎Article III of the
Redevelopment Agreement shall be considered a claim for refund in respect of
Taxes.
 
(c) The Seller and Buyer shall jointly control and participate in all Tax
Proceedings in respect of Taxes for which both Seller and Buyer are responsible
pursuant to this Agreement and shall bear their own respective costs and
expenses. Neither the Seller nor Buyer shall settle any such Tax Proceeding
without the prior written consent of the other.
 
(d) Buyer shall control all other Tax Proceedings in respect of Taxes relating
to the Companies.
 
8.5 Cooperation.  Seller, the Companies and Buyer shall reasonably cooperate,
and shall cause their respective Representatives to reasonably cooperate, in
preparing and filing all Tax Returns and in resolving all disputes, audits,
claims for refunds or reimbursement claims with respect to all taxable periods
relating to Taxes, including by maintaining and making available to each other
all records necessary in connection with Taxes and making employees available on
a mutually convenient basis to provide additional information or explanation of
any material provided hereunder or to testify at proceedings relating to such
Tax Proceeding.
 
8.6 Purchase Price Adjustment.  The Parties agree that any indemnification
payment made pursuant to this Agreement shall be treated as an adjustment to the
Purchase Price for Tax purposes, unless otherwise required by applicable law.
 
8.7 Transfer Taxes and Restructuring Costs.
 
(a) All transfer, sales and similar Taxes (“Transfer Taxes”) incurred in
connection with this Agreement and the Additional Agreements, and the
transactions contemplated hereby and thereby other than the Restructuring shall
be borne equally by Buyer and Seller.  Buyer, at its expense, shall prepare and
file, to the extent required by, or permissible under, applicable Law, all
necessary Tax Returns and other documentation with respect to all such Transfer
Taxes, and, if required by applicable Law, Seller shall join in the execution of
all such Tax Returns and other documentation; provided, however, that prior to
the Closing Date, to the extent applicable, Buyer shall provide to Seller
appropriate certificates of Tax exemption from each applicable Governmental
Authority.
 
(b) All out of pocket costs, expenses and Taxes incurred in connection with the
Restructuring (including Taxes of Seller or its Affiliates that are accelerated
as a result of the Restructuring) shall be borne by Seller.
 
8.8 Refunds.  The amount or economic benefit of any refunds, reimbursements,
credits or offsets of Taxes for which Seller is responsible pursuant to this
Agreement, including reimbursements in respect of the Redevelopment Agreement,
shall be for the account of Seller.  For the avoidance of doubt, reimbursements
pursuant to the Redevelopment Agreement in respect of a Straddle Period shall be
allocated between the Buyer and Seller pursuant to the principles of Section
8.2(a).  Buyer agrees to use its reasonable best efforts to promptly obtain any
such refund, reimbursement, credit or offset of Taxes.  Buyer shall forward, and
shall cause its Affiliates to forward, to the Seller the amount or economic
benefit of any such refund, credit or offset within ten days after such refund
is received or after such credit or offset is allowed or applied against another
Tax liability, as the case may be.
 
8.9 Exclusivity.  Notwithstanding any other provision of this Agreement, any
matter related to Taxes shall be governed solely by this ‎Article VIII.
 
ARTICLE IX

 
INDEMNIFICATION AND DISPUTE RESOLUTION
 
9.1 Indemnification.
 
(a) From and after the Closing Date, Buyer shall indemnify, defend and hold
harmless Seller and its Representatives (each, a “Seller’s Indemnitee”) from and
against any and all claims, demands, suits, losses, liabilities, penalties,
Actions, damages, obligations, payments, costs and expenses (including
reasonable attorneys’ fees and expenses in connection therewith) (each, an
“Indemnifiable Loss”), asserted against or suffered by any Seller’s Indemnitee
relating to, resulting from or arising out of (i) any breach by Buyer of any (A)
representation and warranty set forth in ‎Article V, or (B) any covenant or
agreement of Buyer contained in this Agreement, or (ii) the Assumed Liabilities
and Liabilities of the Companies (other than the Excluded Liabilities);
provided, however, that Buyer shall be liable to the Seller’s Indemnitees
pursuant to clause (i) of this Section ‎9.1(a) only for Indemnifiable Losses for
which any Seller’s Indemnitee gives written notice to Buyer (setting forth with
reasonable specificity the nature of the Indemnifiable Loss) during the period
for which such representations, warranties, covenants or agreements survive the
Closing in accordance with Section 11.4.
 
(b) From and after the Closing, Seller shall indemnify, defend and hold harmless
Buyer and its Representatives (which, for the avoidance of doubt, includes the
Companies) (each, a “Buyer’s Indemnitee” and, together with Seller’s
Indemnitees, an “Indemnitee”) from and against any and all Indemnifiable Losses
asserted against or suffered by any Buyer’s Indemnitee relating to, resulting
from or arising out of (i) any breach by Seller of any (A) representation and
warranty set forth in ‎Article III or ‎Article IV (other than any representation
or warranty set forth in Section ‎3.11 and without giving effect to clause (e)
of Section 3.14), or (B) any covenant or agreement of Seller set forth in this
Agreement, (ii) the Excluded Liabilities, or (iii) any investigation or
remediation required to comply with the Transfer Act pursuant to Section
6.4(f)(iv); provided, however, that Seller shall be liable to the Buyer’s
Indemnitees pursuant to clause (i) of this Section ‎9.1(b) only for
Indemnifiable Losses for which any Buyer’s Indemnitee gives written notice to
Seller (setting forth with reasonable specificity the nature of the
Indemnifiable Loss) during the period for which such representations,
warranties, covenants or agreements survive the Closing in accordance with
Section ‎11.4; and provided further that Seller shall be liable to the Buyer’s
Indemnitees pursuant to clause (i)(A) of this Section ‎9.1(b) for breaches of
representations and warranties (y) only after Indemnifiable Losses for such
breaches, in the aggregate, exceed one and a half percent (1.5%) of the Purchase
Price (provided, however, that once such threshold amount is exceeded, Buyer’s
Indemnitees may recover all Indemnifiable Losses for such breaches incurred from
and after the Closing Date without regard to such threshold amount), and (z)
only for Indemnifiable Losses for such breaches, in the aggregate, up to, but
not in excess of, twenty percent (20%) of the Purchase Price (other than, in
each case, for breaches of the representations and warranties set forth in
Sections ‎3.1, ‎3.2, ‎‎4.1, ‎4.2, 4.4 and 4.7, as to which no such limitations
in this proviso shall be applicable); provided, further, that Seller’s
obligation to indemnify pursuant to clause (iii) in this Section 9.1(b) shall
not exceed fifty percent (50%) of the out-of-pocket costs incurred by or on
behalf of Wallingford pursuant to Section 6.4(f)(iv).
 
(c) The rights and remedies of Seller and Buyer set forth in this ‎Article IX
are (except in cases of fraud) exclusive and in lieu of any and all other rights
and remedies which Seller and Buyer may have under this Agreement, under
applicable Law, whether at common law or in equity, including Environmental Laws
and including for declaratory, injunctive or monetary relief, in each case, with
respect to any Indemnifiable Loss. Notwithstanding anything else in this
Agreement, each of Seller and Buyer agree that this Agreement shall not limit or
otherwise affect any non-monetary right or remedy which Seller or Buyer may have
under this Agreement or otherwise limit or affect either Seller’s or Buyer’s
right to seek equitable relief to enforce this Agreement, including the remedy
of specific performance.
 
(d) Notwithstanding anything to the contrary herein, no Person (including an
Indemnitee) shall be entitled to recover from any other Person (including any
Party required to provide indemnification under this Agreement (an “Indemnifying
Party”)) any amount in excess of the actual compensatory damages, court costs
and reasonable attorneys’ fees suffered by such Party. In furtherance of the
foregoing, Buyer and Seller hereby irrevocably waive any right to recover
punitive, indirect, special, exemplary and consequential damages arising in
connection with or with respect to this Agreement (other than with respect to
indemnification for a Third-Party Claim and except as provided for in Sections
6.13 and 6.14).
 
(e) Any Indemnitee shall use commercially reasonable efforts to mitigate all
losses, damages and the like relating to a claim under the indemnification
provisions in this Section ‎9.1, including availing itself of any defenses,
limitations, rights of contribution, claims against third Persons and other
rights at law or equity. For purposes of this Section ‎9.1(e), the Indemnitee’s
commercially reasonable efforts shall include the reasonable expenditure of
money to mitigate or otherwise reduce or eliminate any Indemnifiable Loss for
which indemnification would otherwise be due, and, in addition to its other
obligations hereunder, the Indemnifying Party shall reimburse the Indemnitee for
the Indemnitee’s reasonable costs and expenses incurred in undertaking any
mitigation, reduction or elimination.
 
9.2 Defense of Claims.
 
(a) If any Indemnitee receives notice of the assertion of any Indemnifiable Loss
or of the commencement of any Action made or brought by any Person who is not an
Indemnitee (a “Third-Party Claim”) with respect to which indemnification is to
be sought from an Indemnifying Party, the Indemnitee shall give such
Indemnifying Party prompt written notice thereof, but in no event later than
twenty (20) Business Days after the Indemnitee’s receipt of notice of such
Third-Party Claim; provided the failure to do so shall not relieve the
Indemnifying Party from any liability except to the extent that it is prejudiced
by the failure or delay in giving such notice. Such notice shall describe the
nature of the Third-Party Claim in reasonable detail and shall indicate (in each
case, to the extent known) (i) the bases of the claim for indemnification, (ii)
the amount or the method of computation of the amount of the Indemnifiable Loss
that has been or may be incurred by the Indemnitee and (iii) a reference to the
provision or provisions in this Agreement upon which such claim is based. Within
ten (10) Business Days after receiving such notice, the Indemnifying Party shall
have the right to participate in or, by giving written notice to the Indemnitee,
to elect to assume the defense of any Third-Party Claim at such Indemnifying
Party’s own cost and expense and by such Indemnifying Party’s own counsel.
 
(b) Pursuant to the notice requirement in the final sentence of Section ‎9.2(a),
in the case of a claim by a Buyer’s Indemnitee, Seller, and in the case of a
claim by a Seller’s Indemnitee, Buyer, shall be entitled to direct the defense
against a Third-Party Claim for which indemnification is sought hereunder, with
counsel selected by it and reasonably acceptable to the other and, in the case
of a claim by a Buyer’s Indemnitee, Seller, and in the case of a claim by a
Seller’s Indemnitee, the Buyer, shall (and shall cause its respective Affiliates
to) provide reasonable assistance in such defense at the direction of the Party
so defending, including taking reasonable actions related to such defense
(including making filings with Governmental Authorities) at the direction of
such Party, provided that (i) Buyer or Seller (as applicable) is conducting a
good faith defense, (ii) Buyer (in the case of a claim by a Seller’s
Indemnitee), or Seller (in the case of a claim by a Buyer’s Indemnitee), has
irrevocably acknowledged in writing its obligation to provide indemnification
for such claim and (iii) the only relief sought by such Third-Party Claim is
monetary (rather than equitable) in nature, and provided, further, that such
party directing the defense shall not compromise or settle it without receiving
a release of the indemnified parties and the indemnified parties not becoming
subject to non-monetary penalties, obligations or restrictions as a result
thereof; in all other events, the indemnified parties (acting through the Buyer,
in the case of a Buyer’s Indemnitee, or through Seller, in the case of a
Seller’s Indemnitee) shall have the exclusive right to direct the defense
against such Third-Party Claim (at the expense of the Indemnifying Party), with
counsel selected by it and reasonably acceptable to the Indemnifying Party,
provided, that the indemnified parties shall not compromise or settle such
Third-Party Claim without receiving a release of the Indemnifying Party and the
Indemnifying Party not becoming subject to non-monetary penalties, obligations
or restrictions as a result thereof.  Parties who are not directing the defense
shall at all times have the right to participate in the defense of a Third-Party
Claim in reasonable respects and at their own expense directly or through
counsel of their choosing that is reasonably acceptable to the party directing
the defense; provided that if the named parties to the Action include both the
Indemnifying Party and one or more indemnified parties, the Indemnifying Party
is directing the defense, and an indemnified party is advised by counsel in
writing that representation of both parties by the same counsel would be
inappropriate under applicable standards of professional conduct, the
indemnified parties may engage one separate counsel to represent them at the
expense of the Indemnifying Party.
 
(c) If no such notice of intent to dispute and defend a Third-Party Claim is
given by Buyer or Seller (whichever is authorized to act on behalf of the
Indemnifying Party in accordance with the immediately preceding paragraph), or
if such good faith defense is not being, or ceases to be, conducted by Buyer or
Seller (as applicable), the other shall have the right, on behalf of the
indemnified parties and at the expense of the Indemnifying Party, to undertake
the defense of such claim (with counsel selected by it and reasonably acceptable
to the Indemnifying Party) and to compromise or settle it (at the Indemnifying
Party’s expense), subject to receipt of a release of the Indemnifying Party and
the Indemnifying Party not becoming subject to non-monetary penalties,
obligations or restrictions as a result thereof.  If the Third-Party Claim is
one that by its nature cannot be defended solely by the party directing the
defense, then the other party hereto shall make available such information and
assistance (including without limitation its officers, employees and agents) as
the party directing the defense may reasonably request and shall cooperate with
such party directing the defense in such defense (at the expense of the
Indemnifying Party).
 
ARTICLE X

 
TERMINATION
 
10.1 Termination.
 
(a) This Agreement may be terminated at any time prior to the Closing by mutual
written consent of the Parties.
 
(b) This Agreement may be terminated by Seller, on the one hand, or Buyer, on
the other hand, upon written notice to the other Party, (i) at any time prior to
the Closing if any court of competent jurisdiction shall have issued an Order
permanently restraining, enjoining or otherwise prohibiting the Closing, and
such Order shall have become final and non-appealable; provided that the Party
seeking to terminate this Agreement pursuant to this Section ‎10.1(b)(i) shall
have used its commercially reasonable efforts to seek relief from such Order;
(ii) at any time prior to the Closing if any Law shall have been enacted or
issued by any Governmental Authority which prohibits the consummation of the
transactions contemplated by this Agreement; or (iii) if the Closing shall not
have occurred or is not reasonably likely to occur within six (6) months after
the date of this Agreement (the “Outside Date”) (provided, that (x) if on the
Outside Date all the Consents required in order to satisfy the conditions set
forth in Section ‎7.1(c) or Section‎ 7.2(c) have not been obtained and such
Consents are being diligently pursued by the appropriate Party, and all of the
other conditions to Closing contained in ‎Article VII have been fulfilled or are
capable of being fulfilled, then, at the option of either Buyer or Seller (which
shall be exercised by written notice on or before the Outside Date), the Outside
Date shall be extended to nine (9) months after the date of this Agreement, and
(y) in all events, if the Affiliate PSA Outside Date is extended under the terms
of the Affiliate PSA, then the Outside Date shall automatically be extended to
the same date as the Affiliate PSA Outside Date); provided, however, that the
right to so terminate this Agreement under this Section ‎10.1(b)(iii) shall not
be available to any Party whose breach (or Affiliate’s breach) of this Agreement
or the Affiliate PSA has caused, or resulted in, the failure of the Closing to
occur on or before such date.
 
(c) This Agreement may be terminated by Seller upon written notice to Buyer if
the Buyer Parent Guarantee, duly executed by Buyer Parent as of the date hereof,
does not remain in full force and effect from and after the date hereof and
through the Closing.
 
(d) This Agreement may be terminated by Buyer upon written notice to Seller if
the PPL Energy Supply Guarantee, duly executed by PPL Energy Supply as of the
date hereof, does not remain in full force and effect from and after the date
hereof and through the Closing.
 
(e) Except as provided in Section 7.3, this Agreement may be terminated by
Buyer, upon written notice to Seller, if there has been a material breach by
Seller of any covenant, agreement, representation or warranty contained in this
Agreement, which breach causes the closing condition in Sections 7.1(d) or
7.1(e) to not be capable of being satisfied (absent waiver by Buyer) and such
breach is not cured (if subject to cure) by the earlier of the Closing Date or
the date that is thirty (30) days after receipt by Seller of notice specifying
in reasonable detail the nature of such breach, unless Buyer shall have
previously waived such breach in writing.
 
(f) Except as provided in Section 7.3, this Agreement may be terminated by
Seller, upon written notice to Buyer, if there has been a material breach by
Buyer of any covenant, agreement, representation or warranty contained in this
Agreement, which breach causes the closing condition in Sections 7.2(d) or
7.2(e) to not be capable of being satisfied (absent waiver by Seller) and such
breach is not cured (if subject to cure) by the earlier of the Closing Date or
the date that is thirty (30) days after receipt by Buyer of notice specifying in
reasonable detail the nature of such breach, unless Seller shall have previously
waived such breach in writing.
 
(g) This Agreement may be terminated by Seller, on the one hand, or Buyer, on
the other hand, upon written notice to the other Party at any time prior to
Closing, if the Affiliate PSA has been terminated for any reason.
 
(h) This Agreement may be terminated by Seller, on the one hand, or Buyer, on
the other hand, upon written notice to the other Party pursuant to the terms and
conditions of Section 6.13 and Section 6.14.
 
(i) Either Buyer or Seller may terminate this Agreement solely with respect to
the provisions specified in, and under the terms and conditions set forth in,
Schedule 1.1(102).
 
10.2 Effect of Termination.  Upon termination of this Agreement prior to the
Closing in accordance with and pursuant to Section ‎10.1, this Agreement shall
be of no further force or effect (except that the provisions set forth in
Section 6.1(b), Section ‎6.2, this Section ‎10.2 and Article ‎XI, and the
Confidentiality Agreement, shall remain in full force and effect in accordance
with their respective terms); and no Party shall have any further Liability
under this Agreement.
 
ARTICLE XI

 
MISCELLANEOUS PROVISIONS
 
11.1 Amendment and Modification.  This Agreement may be amended, supplemented or
otherwise modified only by written agreement entered into by both Parties.
 
11.2 Expenses.  Except to the extent provided herein, whether or not the
transactions contemplated hereby are consummated, all costs, fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be borne by the Party incurring such costs, fees and expenses.
 
11.3 Waiver of Compliance; Consents.  To the extent permitted by applicable Law,
any failure of any of the Parties to comply with any representation, warranty,
covenant, agreement or condition set forth herein may be waived by the Party
entitled to the benefit thereof only by a written instrument signed by such
Party, but any such waiver shall not operate as a waiver of, or estoppel with
respect to, any prior or subsequent failure to comply therewith or of any other
provision set forth herein.
 
11.4 Survival.  Other than Section ‎3.1 (Organization and Existence), Section
‎3.2 (Company), Section ‎3.11 (Taxes), Section ‎4.1 (Organization;
Qualification), Section ‎4.2 (Authority), Section ‎4.4 (Title and Related
Matters), and Section 4.7 (Brokers; Finders), which shall survive indefinitely,
the representations and warranties of Seller set forth in this Agreement shall
survive the Closing until the first anniversary of the Closing Date.  The
covenants and agreements of the Parties contained in this Agreement shall not
terminate on the Closing Date and shall survive indefinitely until performed in
accordance with this Agreement.
 
11.5 Disclaimers, As-Is Sale; Release.  (a)  EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES, COVENANTS AND AGREEMENTS EXPRESSLY SET FORTH HEREIN, THE SELLER’S
INTERESTS ARE SOLD “AS IS, WHERE IS”, AND SELLER EXPRESSLY DISCLAIMS ALL OTHER
REPRESENTATIONS AND WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS TO
SELLER OR ITS AFFILIATES, THE SELLER’S INTERESTS, THE BUSINESS, THE COMPANIES OR
THE ASSIGNED AGREEMENTS.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS
AGREEMENT: SELLER EXPRESSLY DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES
REGARDING LIABILITIES, OWNERSHIP, LEASE, MAINTENANCE OR OPERATION OF THE
BUSINESS, THE TITLE, CONDITION, VALUE OR QUALITY OF THE BUSINESS, THE SELLER’S
INTERESTS OR THE ASSIGNED AGREEMENTS OR THE PROSPECTS (FINANCIAL AND OTHERWISE),
RISKS AND OTHER INCIDENTS OF THE BUSINESS; AND SELLER EXPRESSLY DISCLAIMS ALL
REPRESENTATIONS AND WARRANTIES OF MERCHANTABILITY, USAGE, SUITABILITY OR FITNESS
FOR ANY PARTICULAR PURPOSE WITH RESPECT TO THE BUSINESS, THE SELLER’S INTERESTS
OR THE ASSIGNED AGREEMENTS, OR ANY PART THEREOF, OR AS TO THE WORKMANSHIP
THEREOF, OR THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT, OR
COMPLIANCE WITH ENVIRONMENTAL REQUIREMENTS, OR THE APPLICABILITY OF ANY
GOVERNMENTAL AUTHORITY, INCLUDING ANY ENVIRONMENTAL LAWS. EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED HEREIN, SELLER FURTHER EXPRESSLY DISCLAIMS ALL
REPRESENTATIONS AND WARRANTIES REGARDING THE ABSENCE OF HAZARDOUS SUBSTANCES OR
LIABILITY OR POTENTIAL LIABILITY ARISING UNDER ENVIRONMENTAL LAWS WITH RESPECT
TO THE BUSINESS OR THE ASSIGNED AGREEMENTS. WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, SELLER EXPRESSLY
DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES OF ANY KIND REGARDING THE CONDITION
OF THE BUSINESS OR THE SUITABILITY OF THE BUSINESS FOR OPERATION AS A POWER
PLANT OR OTHERWISE, AND NO SCHEDULE OR EXHIBIT TO THIS AGREEMENT, NOR ANY OTHER
MATERIAL OR INFORMATION PROVIDED, OR COMMUNICATIONS MADE, BY SELLER OR ITS
REPRESENTATIVES, INCLUDING ANY BROKER OR INVESTMENT BANKER, SHALL CONSTITUTE OR
CREATE ANY SUCH REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
CONDITION, VALUE OR QUALITY OF THE BUSINESS.
 
(b) Except for the obligations of Seller under this Agreement (including,
without limitation, the provisions of Article IX), for and in consideration of
the transfer of the Seller’s Interests, effective as of the Closing Date, Buyer
hereby absolutely and unconditionally releases, acquits and forever discharges,
and shall cause each of its Affiliates (including the Companies) to absolutely
and unconditionally release, acquit and forever discharge, Seller and its
Affiliates, each of their present and former officers, directors, managers,
employees and agents and each of their respective heirs, executors,
administrators, successors and assigns, from any and all costs, expenses,
damages, debts, or any other obligations, liabilities and claims whatsoever,
whether known or unknown, both in law and in equity, including any claims under
Environmental Laws, in each case to the extent arising out of or resulting from
the ownership or operation of the Companies, or the Assets, Business, conduct,
services, products or employees (including former employees) of any of the
Companies (and any predecessors), whether related to any period of time before
or after the Closing Date, except for criminal actions or fraud; provided,
however, that in the event Buyer’s Affiliates are sued by Seller or its
Affiliates for any matter subject to this release, Buyer’s Affiliates shall have
the right to raise any defenses or counterclaims in connection with such
lawsuits.
 
(c) Except for the obligations of Buyer under this Agreement (including without
limitation the provisions of Article IX), for and in consideration of the
payment of the Purchase Price, effective as of the Closing Date, Seller hereby
absolutely and unconditionally releases, acquits and forever discharges, and
shall cause each of its Affiliates to absolutely and unconditionally release,
acquit and forever discharge, Buyer and its Affiliates (including the
Companies), each of their present and former officers, directors, managers,
employees and agents and each of their respective heirs, executors,
administrators, successors and assigns, from any and all costs, expenses,
damages, debts, or any other obligations, liabilities and claims whatsoever,
whether known or unknown, both in law and in equity, including any claims under
Environmental Laws, in each case to the extent arising out of or resulting from
(i) the transactions contemplated hereby, whether related to any period of time
before or after the Closing Date or (ii) the ownership or operation of the
Companies, or the Assets, Business, conduct, services, products or employees
(including former employees) of any of the Companies (and any predecessors),
solely related to any period of time before the Closing Date, except for
criminal actions or fraud; provided, however, that in the event Seller’s
Affiliates are sued by Buyer or its Affiliates for any matter subject to this
release, Seller’s Affiliates shall have the right to raise any defenses or
counterclaims in connection with such lawsuits.
 
11.6 Notices.  All notices and other communications hereunder shall be in
writing and shall be deemed given on the day when delivered personally or by
facsimile transmission (with confirmation), on the next Business Day when
delivered to a nationally recognized overnight courier or five (5) Business Days
after deposited as registered or certified U.S. mail (return receipt requested),
in each case, postage prepaid, addressed to the recipient Party at its address
set forth below (or at such other address or facsimile number for a Party as
shall be specified by like notice; provided, however, that any such notice of a
change of address or facsimile number shall be effective only upon receipt
thereof):
 
(a)
If to Seller, to:
     
PPL Generation, LLC
c/o PPL Services Corporation
Office of General Counsel
Two North Ninth Street
Allentown, PA 18101
Attention: General Counsel
Facsimile: (610) 774-4455
     
and a copy (which shall not constitute notice) to:
 
 
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Attention: David Lieberman, Esq.
Facsimile: (215) 455-2502
   
(b)
If to Buyer or Buyer Parent, to:
 
 
LS Power Development, LLC
1700 Broadway, 35th Floor
New York, New York  10019
Attention: General Counsel
Facsimile: (212) 615-3440
     
with a copy (which shall not constitute notice) to:
     
Latham & Watkins LLP
885 Third Avenue
New York, New York 10022-4802
Attn: David A. Kurzweil
Facsimile No.: (212) 751-4864

11.7 Assignment.  This Agreement shall be binding upon and inure solely to the
benefit of the Parties and their respective successors and permitted assigns,
but neither this Agreement nor any of the rights, interests, obligations or
remedies hereunder shall be assigned by any Party hereto, including by operation
of law, without the prior written consent of the other Party, nor is this
Agreement intended to confer upon any other Person any rights, interests,
obligations or remedies hereunder.  Notwithstanding the foregoing, Buyer may
transfer or assign (including by way of a pledge), in whole or from time to time
in part, any or all of its rights and obligations under this Agreement (i) to
one or more of its Affiliates or (ii) to its lenders or other financing sources
as collateral security; provided that no such transfer or assignment will
relieve Buyer of its obligations hereunder.
 
11.8 Governing Law; Forum; Service of Process.  This Agreement shall be governed
by and construed in accordance with the laws of the State of New York as to all
matters, including validity, construction, effect, performance and remedies.
Each of the Parties hereto irrevocably submits to the exclusive jurisdiction of
the United States District Court for the Southern District of New York located
in the borough of Manhattan in the City of New York, or if such court does not
have jurisdiction, the Supreme Court of the State of New York, New York County,
for the purposes of any Action arising out of this Agreement or any transaction
contemplated hereby.  Each of the Parties hereto further agrees that service of
any process, summons, notice or document by U.S. certified mail to such Party’s
respective address set forth in Section ‎11.6 shall be effective service of
process for any Action in New York with respect to any matters to which it has
submitted to jurisdiction as set forth above in the immediately preceding
sentence.  Each of the Parties hereto irrevocably and unconditionally waives any
objection to the laying of venue of any Action arising out of this Agreement or
the transactions contemplated hereby in (a) the United States District Court for
the Southern District of New York or (b) the Supreme Court of the State of New
York, New York County, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such Action brought
in any such court has been brought in an inconvenient forum.  EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
 
11.9 Counterparts.  This Agreement may be executed by facsimile transmission
(with confirmation) and in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
 
11.10 Interpretation.  The Article and Section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the Parties and shall not in any way affect the meaning or construction of
this Agreement. Ambiguities and uncertainties in the wording of this Agreement
shall not be construed for or against any Party, but shall be construed in the
manner that most accurately reflects the Parties’ intent as of the date of this
Agreement. Each Party acknowledges that it has been represented by counsel in
connection with the review and execution of this Agreement, and, accordingly,
there shall be no presumption that this Agreement or any provision hereof be
construed against the Party that drafted this Agreement. Notwithstanding any
provision of any Additional Agreement to the contrary, the provisions of this
Agreement shall govern and control any conflict or inconsistency between or
among the provisions of this Agreement and the provisions of any such Additional
Agreement.
 
11.11 Schedules and Exhibits.  Except as otherwise provided in this Agreement,
all Exhibits and Schedules referred to herein are intended to be and hereby are
made a part of this Agreement.
 
11.12 Disclosure.  Except as otherwise provided in this Agreement, all Schedules
referred to herein are intended to be and hereby are made a part of this
Agreement. Any disclosure in any Party’s Schedule under this Agreement
corresponding to and qualifying a specific numbered Schedule or Section hereof
shall be deemed to correspond to and qualify any other numbered Schedule or
Section relating to such Party to which the applicability of the disclosure is
reasonably apparent on its face from a reading of such disclosure. Certain
information set forth on the Schedules is included solely for informational
purposes, is not an admission of liability or materiality with respect to the
matters covered by the information, and may not be required to be disclosed
pursuant to this Agreement. The specification of any dollar amount in the
representations and warranties contained in this Agreement or the inclusion of
any specific item in the Schedules is not intended to imply that such amounts
(or higher or lower amounts) or such items are or are not material, and no Party
shall use the fact of the setting of such amounts or the fact of the inclusion
of any such item in the Schedules in any dispute or controversy among the
Parties as to whether any obligation, item or matter not described herein or
included in a Schedule is or is not material for purposes of this Agreement.
 
11.13 Entire Agreement.  This Agreement and the Affiliate PSA (including the
Schedules and Exhibits hereto and thereto), together with the Additional
Agreements (when executed and delivered by the Parties) and the Confidentiality
Agreement, constitute a single integrated agreement between the Parties and,
together, embody the entire agreement and understanding of the Parties hereto in
respect of the transactions contemplated hereby and thereby, and supersede all
prior agreements and understandings between the Parties with respect to such
transactions.
 
11.14 Severability.  The provisions of this Agreement shall be deemed severable
and the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.  If any provision of
this Agreement, or the application thereof to any Person or any circumstance, is
found to be invalid or unenforceable in any jurisdiction, (a) a suitable and
equitable provision shall be substituted therefor in order to carry out, so far
as may be valid or enforceable, such provision and (b) the remainder of this
Agreement and the application of such provision to other Persons or
circumstances shall not be affected by such invalidity or unenforceability, nor
shall such invalidity or unenforceability affect the validity or enforceability
of such provision, or the application thereof, in any other jurisdiction.
 
SIGNATURE PAGE FOLLOWS
IN WITNESS WHEREOF, Seller and Buyer have caused this Purchase and Sale
Agreement to be duly executed and delivered by their respective duly authorized
officers as of the date first above written.
 

 
PPL GENERATION, LLC
 
 
By:
 
   
Name:
Title:

 
HARBOR GEN HOLDINGS, LLC
 
 
By:
 
   
Name:
Title: