EXHIBIT 10.1

 

Execution Document

 

PARTNERSHIP INTEREST

PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE AGREEMENT dated as of May 19, 2003 (this “Agreement”) is
by and among TPS GP, Inc. (the “GP Purchaser”), a Florida corporation, TPS LP,
Inc. (the “LP Purchaser”), Panda GS V, LLC (the “GP Seller”), a Delaware limited
liability company, Panda GS VI, LLC (the “LP Seller”), a Delaware limited
liability company. The LP Purchaser and the GP Purchaser are collectively
referred to herein as the “Purchasers.” The GP Seller and the LP Seller are
collectively referred to herein as the “Sellers.”

 

RECITALS

 

A.    The Purchasers and the Sellers are party to that certain Amended and
Restated Limited Partnership Agreement dated as of June 12, 2001, as amended by
a First Amendment dated as of October 3, 2001, a Second Amendment dated as of
November 30, 2001, a Third Amendment dated as of January 16, 2002, a Fourth
Amendment dated as of February 6,2002, a Fifth Amendment dated as of February 7,
2002 and a Sixth Amendment dated as of April 9, 2003 (collectively, the
“Partnership Agreement,” and such Sixth Amendment, the “Sixth Amendment”). The
partnership governed by the Partnership Agreement is TECO-PANDA Generating
Company, L.P. (the “Partnership”), a Delaware limited partnership.

 

B.    The GP Seller holds a 0.5% general partnership interest in the Partnership
(the “GP Interest”). The LP Seller hold a 49.5% limited partnership interest in
the Partnership (the “LP Interest”). The GP Interest and the LP Interest are
collectively referred to herein as the “Partnership Interests.”

 

C.    In accordance with and after the effectiveness of the Sixth Amendment, the
Sellers wish to transfer to the Purchasers, and the Purchasers wish to acquire
from the Sellers, the Partnership Interests, with the LP Purchaser acquiring the
LP Interest and the GP Purchaser acquiring the GP Interest.

 

D.    The Purchasers and Sellers are also party to that certain Consent and
Acceleration Agreement dated as of February 7,2002 by and among the Purchasers,
the Sellers, Panda Energy International, Inc., TECO Power Services Corporation
(“TPS”), TECO Energy, Inc. (“TECO”) and Bayerische Hypo-Und Vereinsbank AG, New
York Branch (the “Bank”), as amended by the First Amendment to Consent and
Acceleration Agreement dated April 9, 2003 (the “Consent and Acceleration”). In
accordance with the Sixth Amendment and the Consent and Acceleration, the
Purchase Price (as defined below) is to be paid as provided herein.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
of other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

 

1)  

Purchase and Sale.    At the Closing (defined in Section 2 below), the Sellers
will sell to the Purchasers, and the Purchasers will purchase from the Sellers,
the Partnership Interests, for a

 

--------------------------------------------------------------------------------

 

purchase price of $49,000,000.00, payable in cash (the “Purchase Price”) as
specified in Section 2 below.

 

2)   The Closing.    The Closing of the transactions contemplated in Section 1
(the “Closing”) shall take place, subject to the satisfaction of the conditions
contained in Sections 7 and 8 hereof, at the offices of New York counsel to TPS
(or such other place as the parties may mutually agree), on June 30, 2003 or
such other date as the Sellers and the Purchasers shall mutually agree (the
“Closing Date”) and at such time as the Sellers and the Purchasers shall
mutually agree. At the Closing, the Sellers shall deliver to the Purchasers good
and sufficient instruments of sale, transfer, assignment and conveyance, in form
reasonably satisfactory to the Purchasers, selling, transferring, assigning and
conveying to the Purchasers good and valid title to the Partnership Interests,
against payment of the Purchase Price to the Bank by wire transfer to the extent
required by the Consent and Acceleration and the balance to be credited against
the outstanding principal of the loan made pursuant to the Credit Agreement
dated as of April 9, 2003 among the Sellers, as borrowers, and TPS, as lender.
The Partnership Interests shall be delivered free and clear of any and all
liens, charges, encumbrances and adverse claims (“Liens”).

 

3)   Representations and Warranties of the Sellers.    Each of the Sellers
represents and warrants to the Purchasers that:

 

  a)   Organization: Good Standing.    Such Seller is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware, and has all requisite power and authority to own its
properties, including the Partnership Interests, and to enter into this
Agreement and consummate the transactions contemplated hereby.

 

  b)   Title to Partnership Interests.    Such Seller has good and valid title
to the Partnership Interests attributed to such Seller in Recital B above, free
and clear of any and all Liens, other than those Liens held by the Bank that
shall be fully discharged immediately upon receipt of the Purchase Price by the
Bank. Except as provided in the Partnership Agreement or as contemplated by this
Agreement, no person has any right, agreement or understanding (whether by
option, warrant, call, commitment, conversion, exchange, plan or otherwise) with
respect to the acquisition, purchase, sale, transfer or assignment of the
Partnership Interests or any portion thereof, and the consummation of the
transfer of the Partnership Interests shall not conflict with or result in a
default under any instrument or other agreement to which either Seller is a
party. Upon transfer of the Partnership Interests to the Purchasers and payment
of the Purchase Price as contemplated by this Agreement, the Purchasers will
have good and valid title to the Partnership Interests, free and clear of any
and all Liens.

 

  c)   Authorization.    Such Seller has taken all action required by law, its
operating agreement or otherwise to authorize the execution and delivery of this
Agreement and the transactions contemplated hereby, and this Agreement is the
valid and binding agreement of such Seller enforceable against it in accordance
with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws now or hereafter in effect
relating to creditor’s rights and by general principles of equity.

 

4)   Representations and Warranties of the Purchasers.    Each of the Purchasers
represents and warrants to the Sellers with respect to itself as follows:

 

2

--------------------------------------------------------------------------------

  a)   Organization: Good Standing.    Such Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida, and has all requisite corporate power and authority to enter into this
Agreement and consummate the transactions contemplated hereby.

 

  b)   Authorization.    Such Purchaser has taken all actions required by law,
its charter, by-laws or otherwise to authorize the execution and delivery of
this Agreement and the transactions contemplated hereby, and this Agreement is
the valid and binding agreement of such Purchaser enforceable against it in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws now or hereafter in effect
relating to creditor’s rights and by general principles of equity.

 

5)   Covenants of the Sellers.    Each of the Sellers covenants and agrees that
such Seller shall use all reasonable efforts to perform and fulfill all
conditions and obligations to be performed and fulfilled by it under this
Agreement and, subject to satisfaction of the conditions set forth in Section 7,
to cause the transfer and sale of the Partnership Interests contemplated by this
Agreement to be consummated, and, without limiting the generality of the
foregoing, to obtain all consents and authorizations of third parties and to
make all filings with and give all notices to third parties which may be
necessary or reasonably required in order to effect the transactions
contemplated hereby. Subsequent to the Closing, the Sellers shall use all
reasonable efforts to cooperate with the Purchasers in preparing the Partnership
tax returns relating to any period in which both the Sellers and the Purchasers
had an interest in the Partnership.

 

6)   Covenants of the Purchasers.    Each of the Purchasers covenants and agrees
that prior to the Closing, such Purchaser shall use all reasonable efforts to
perform and fulfill all conditions and obligations to be performed and fulfilled
by it under this Agreement and, subject to satisfaction of the conditions set
forth in Section 8, to cause the transfer and sale contemplated by this
Agreement to be consummated by the Purchasers, and, without limiting the
generality of the foregoing, to make all filings with and give all notices to
third parties which may be necessary or reasonably required in order to effect
the transactions contemplated hereby. Each Purchaser will cooperate with the
Sellers to the extent necessary to aid the Sellers in obtaining any consents or
making any filing required of the Sellers in connection with the transactions
contemplated by this Agreement, provided the Purchasers are not required to make
any unreimbursed disbursements in connection therewith. Subsequent to the
Closing, the Purchasers shall use all reasonable efforts to cooperate with the
Sellers in connection with any Partnership tax returns relating to any period in
which both the Sellers and the Purchasers had an interest in the Partnership.

 

7)   Conditions Precedent to the Obligations of the Sellers.    All obligations
of the Sellers under this Agreement are subject to the satisfaction or waiver,
at or prior to the Closing Date, of each of the following conditions:

 

  a)   Panda Cancellation Right.    The Panda Cancellation Right (as defined in
the Sixth Amendment) shall have expired or been waived.

 

  b)   Representations and Warranties.    The representations and warranties of
the Purchasers herein contained shall be true on and as of the Closing Date with
the same force and effect as though made on and as of said date.

 

3

--------------------------------------------------------------------------------

  c)   Performance.    The Purchasers shall have performed all their respective
obligations and agreements and complied with all their covenants contained in
this Agreement to be performed and complied with by the Purchasers prior to the
Closing Date.

 

  d)   Closing Certificate.    The Sellers shall have received a certificate
executed by the Purchasers, dated the Closing Date, in form and substance
satisfactory to the Sellers and their counsel, certifying as to the fulfillment
of the conditions set forth in Sections 7(b) and 7(c).

 

  e)   Required Consents.    The Sellers shall have received all consents from
any persons or governmental entities required for the consummation of the
transactions contemplated hereby.

 

  f)   Purchase Price Payment.    The Purchasers shall deliver or cause to be
delivered to the Sellers evidence of payment of the full Purchase Price in
accordance with Section 2.

 

8)   Conditions Precedent to the Obligations of the Purchasers.    All
obligations of the Purchasers under this Agreement are subject to the
satisfaction or waiver, at or prior to the date of the Closing, of each of the
following conditions:

 

  a)   Panda Cancellation Right.    The Panda Cancellation Right shall have
expired or been waived.

 

  b)   Representations and Warranties.    The representations and warranties of
the Sellers herein contained shall be true in all material respects on and as of
the date of the Closing with the same force and effect as though made on and as
of said date, except as affected by the transactions contemplated hereby.

 

  c)   Performance.    The Sellers shall have performed all of their respective
obligations and agreements and complied with all of their covenants contained in
this Agreement to be performed and complied with by them prior to the date of
Closing.

 

  d)   Closing Certificate.    The Purchasers shall have received a certificate
of the Sellers dated the Closing Date, in form and substance satisfactory to the
Purchasers and their counsel, certifying as to the fulfillment of the conditions
set forth in Sections 8(b) and 8(c).

 

  e)   Financing.    TECO shall have entered into an agreement for financing a
portion of the Purchase Price in an amount up to $42,000,000.00 on terms
satisfactory to TECO in its sole discretion.

 

  f)   Consents.    The Purchasers shall have received evidence, satisfactory to
the Purchasers and their counsel, that all of the required consents and
authorizations from persons or governmental entities required for the
consummation of the transactions contemplated hereby shall have been obtained,
and that the Partnership Interests are being acquired by the Purchasers free and
clear of all Liens (assuming payment of the Purchase Price to the Bank).

 

  g)   Amendment of Partnership Agreement.    The Partnership Agreement shall be
amended by an amendment in form and substance reasonably satisfactory to the
Purchasers.

 

4

--------------------------------------------------------------------------------

  h)   Closing Documents.    The Sellers shall have delivered or caused to be
delivered to the Purchasers on or prior to the Closing Date, in form and
substance satisfactory to the Purchasers:

 

  i)   Good and sufficient instruments of sale, transfer, assignment and
conveyance, in form reasonably satisfactory to the Purchasers, selling,
transferring, assigning and conveying to the Purchasers good and valid title to
the Partnership Interests free and clear of all Liens;

 

  ii)   Copies of duly adopted resolutions of the members, managers or directors
of each of the Sellers authorizing and approving the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby in
accordance with the terms of this Agreement, each certified as of the Closing
Date by an officer of such Seller; and

 

  iii)   A certificate of incumbency of each Seller, dated the Closing Date, as
to officers and other personnel of such Seller executing this Agreement and any
certificate, instrument or document to be delivered at the Closing.

 

  i)   Other Matters.    The Purchasers shall have received such certificates
from the Sellers relating to the transactions contemplated by this Agreement as
shall be reasonably requested by the Purchasers.

 

9)   Survival of Representations and Warranties; Indemnification.

 

  a)   Survival.    The respective representations and warranties made herein by
the parties hereto shall survive the execution and delivery of this Agreement
and the consummation of the transactions contemplated herein for a period of two
years from the Closing Date, after which no claim for a breach of these
representations and warranties may be asserted.

 

  b)   Indemnification by the Sellers.    The Sellers shall jointly and
severally indemnify, defend and hold harmless the Purchasers and their
stockholders, directors, officers, employees, agents and assignees
(collectively, the “Purchaser Indemnified Parties”) from and against any and all
losses, liabilities, damages, claims or expenses, including without limitation
reasonable attorneys’ fees (collectively, “Losses”), suffered or incurred by any
Purchaser Indemnified Party by reason of or resulting from the inaccuracy of any
representation or warranty (without regard to any materiality or monetary
limitation contained therein) or breach, nonfulfillment or nonperformance of any
warranty, covenant or agreement of the Sellers contained in this Agreement.
Notwithstanding the foregoing, the Sellers shall have no obligation to indemnify
any Purchaser Indemnified Party for any such Losses to the extent such Losses
arise from the willful misconduct or gross negligence of the Purchasers or from
the breach or inaccuracy of a representation or warranty of the Purchasers
contained herein.

 

  c)  

Notice and Defense of Claims.    Promptly after receipt of notice of any
third-party claim that could result in Losses for which a party may seek
indemnification under this Section 9, such party shall give written notice
thereof to the indemnifying party, but such notification shall not be a
condition to indemnification hereunder except to the extent of actual prejudice
to the indemnifying party. The notice shall state the information then

 

5

--------------------------------------------------------------------------------

 

available regarding the amount and nature of such claim and such Losses and
shall specify the provision or provisions of this Agreement under which the
liability or obligation is asserted. If within 30 days after receiving such
notice the indemnifying party gives written notice to the indemnified party (i)
stating that it intends to defend against such claim and such Losses at its own
cost and expense, and (ii) acknowledging that the indemnifying party is
obligated to provide indemnification with respect to any such claim then, so
long as such matter does not involve any risk of criminal liability to such
indemnified party, then defense of such matter, including selection of counsel
(subject to the consent of the indemnified party, which consent shall not be
unreasonably withheld), shall be by the indemnifying party and the indemnified
party shall make no payment on such claim or such Losses so long as the
indemnifying party is conducting a good faith and diligent defense. Subject to
the foregoing, the indemnified party shall have the right to participate in such
defense at its own expense directly or through counsel.

 

10)   Tax Determinations.    The Sellers and the Purchasers agree to take such
actions as are necessary to cause the Sellers’ and the Purchasers’ respective
allocable shares of the items of income, gain, loss, deduction or credit of the
Partnership for the taxable year of the Partnership that includes the Closing to
be determined by closing the Partnership books as of the Closing Date (i.e., the
“interim closing of the books” method).

 

11)   Termination.    This Agreement may be terminated by any party upon the
delivery of written notice to the others if the Closing of the transactions
contemplated hereby has not occurred by July I, 2004 through no fault of the
terminating party. Upon any termination referred to in this Section, no party
shall have any further obligation to the others hereunder other than for their
own willful breach of this Agreement.

 

12)   Notices.    All notices, requests or other communications required or
desired to be given hereunder shall be deemed to have been duly given if in
writing and either delivered by hand or by overnight courier, or mailed
first-class pre-paid, by registered or certified mail, return receipt requested,
or sent by telex, telegram, cable or facsimile transmission (with receipt
confirmed by telephone or automatic transmission report), addressed to the
parties at their respective addresses set forth below.

 

If to the Sellers (by overnight courier) to

 

Panda GS V, LLC and Panda GS VI, LLC

4100 Spring Valley, Suite 1001

Dallas, Texas 75244

Attn: General Counsel

 

With a copy to:

 

Panda Energy International. Inc.

4100 Spring Valley, Suite 1001

Dallas, Texas 75244

Attn: General Counsel

 

6

--------------------------------------------------------------------------------

If to the Purchasers (by overnight courier) to:

 

TECO Power Services Corporation

702 North Franklin Street

Tampa, Florida 33602

Attention: President

Phone: (813) 228-1311

Facsimile: (813) 228 1289

 

With a copy to:

 

TECO Energy, Inc.

Legal Department

702 North Franklin Street, Tampa, Florida 33602

Post Office Box Ill, Tampa, Florida 33601-0111

Attention: Sheila M. McDevitt, Senior Vice President – General Counsel

Phone: (813) 228-1804

Facsimile: (813) 228-1328

 

or such address as any of the parties may have furnished to the other parties in
writing in accordance herewith, except that notices of changes of address shall
only be effective upon receipt.

 

13)   Transaction Expenses.    Each party hereto shall bear its own expenses
incurred in connection with the negotiation, preparation, execution and
performance of this Agreement and the transactions contemplated thereby,
including without limitation all fees and expenses of agents, representatives,
legal counsel and accountants.

 

14)   Miscellaneous.

 

  a)   Binding Agreement: Assignment.    This Agreement shall be binding upon,
shall inure to be benefit of, and shall be enforceable by, the parties hereto
and their respective successors and permitted assigns, provided that, except as
expressly provided, no party to this Agreement may assign its rights or delegate
its duties hereunder without the prior consent of the other parties hereto.

 

  b)   Entire Agreement: Amendments.    This Agreement contains the entire
understanding of the parties with respect to the matters herein and supersedes
all prior agreements and understandings among the parties with respect to its
subject matter. This Agreement may not be amended or otherwise modified except
by a written agreement signed by all of the parties hereto.

 

  c)  

Waiver.    The terms, conditions, covenants, representations and warranties
hereof may be waived only by a written instrument executed by the party waiving
compliance. The failure of a party at any time or from time to time to require
performance of any provisions hereof shall in no manner affect its rights at a
later time to enforce the same. No waiver by a party of any condition or any
breach of any term, covenant, representation or warranty contained in this
Agreement in anyone or more instances shall

 

7

--------------------------------------------------------------------------------

 

be deemed to be, or be construed as, a further or continuing waiver of any such
condition or breach of any other term, covenant, representation or warranty.

 

  d)   Governing Law: Consent to Jurisdiction.    This Agreement shall be
construed and enforced in accordance with, and governed by, the laws of the
State of New York, excluding its conflicts of law provisions (other than Section
5-1401 of the General Obligation Law of the State of New York).

 

  e)   Severability.    If any provision of this Agreement shall be determined
to be unenforceable, void or otherwise contrary to law, such provision shall in
no manner operate to render any other provision of the Agreement unenforceable,
invalid or contrary to law, and this Agreement shall continue to be operative
and enforceable in accordance with the remaining terms and provisions hereof.

 

  f)   Further Assurances.    Each party agrees to execute and deliver any
instruments and to perform any acts that may be necessary or reasonably
requested in order to give full effect to this Agreement.

 

  g)   Captions.    Captions and paragraph headings of this Agreement are solely
for the convenience of the parties. They are not a part of this Agreement or any
provision hereof.

 

  h)   Counterparts.    This Agreement may be signed in counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same Agreement.

 

[Remainder of page intentionally left blank.]

 

8

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have executed this Agreement under seal as of
the date first written above.

 

THE GP PURCHASER:      

TPS GP, Inc.

            By:  

/S/    RICHARD E. LUDWIG

--------------------------------------------------------------------------------

                Richard E. Ludwig, President

 

 

THE LP PURCHASER:      

TPS LP, Inc.

            By:  

/S/    RICHARD E. LUDWIG

--------------------------------------------------------------------------------

                Richard E. Ludwig, President

 

 

THE GP SELLER:      

Panda GS V, LLC

            By:  

/S/    BRYAN J. URBAN

--------------------------------------------------------------------------------

               

Name: Bryan J. Urban

Title: Senior Vice President

 

 

THE LP SELLER:      

Panda GS VI, LLC

            By:  

/S/    BRYAN J. URBAN

--------------------------------------------------------------------------------

               

Name: Bryan J. Urban

Title: Senior Vice President

 

 

9