HAS
NOT RECEIVED ANY WRITTEN NOTICE OR ALLEGATION OF MATERIAL VIOLATION) OF ANY LAW
APPLICABLE TO THE PURCHASED ASSETS OR BY WHICH ANY OF THE PURCHASED ASSETS ARE
BOUND OR SUBJECT, EXCEPT AS SET FORTH IN SCHEDULE 7.12.
NOTWITHSTANDING THE
FOREGOING, COMPLIANCE WITH ENVIRONMENTAL LAWS IS EXCLUSIVELY AND SOLELY GOVERNED
BY SECTIONS 7.15 AND 7.16 HEREOF.
7.13
LABOR MATTERS.
ALL EMPLOYEES EMPLOYED AT THE FACILITY ("FACILITY
EMPLOYEES") ARE EMPLOYEES OF SELLER; PROVIDED, HOWEVER, THAT CERTAIN EMPLOYEES
OF DP&L MAY FROM TIME TO TIME WORK AT THE FACILITY IN CONNECTION WITH THEIR
PRIMARY RESPONSIBILITIES AT THE SUBSTATION OR ELSEWHERE.
NO LABOR ORGANIZATION
HAS REPRESENTATION RIGHTS WITH RESPECT TO THE FACILITY EMPLOYEES; AND THERE ARE
NO COLLECTIVE BARGAINING AGREEMENTS RELATING TO THE FACILITY EMPLOYEES.
TO
SELLER'S KNOWLEDGE, THERE ARE NO MATERIAL ORGANIZING EFFORTS PRESENTLY BEING
MADE INVOLVING ANY OF THE EMPLOYEES AT THE FACILITY.
7.14
TAXES.
EXCEPT AS SET FORTH IN SCHEDULE 7.14, SELLER HAS DULY AND
TIMELY FILED ALL FEDERAL, STATE AND LOCAL TAX REPORTS AND RETURNS REQUIRED TO BE
FILED BY IT IN RESPECT OF THE PURCHASED ASSETS AND SELLER'S TRADE OR BUSINESS
WITH RESPECT THERETO AND PAID ALL TAXES SHOWN THEREON TO BE DUE.
THERE ARE NOT
PENDING OR THREATENED IN WRITING ANY TAX AUDITS OR EXAMINATIONS OF, OR WITH
RESPECT TO, THE PURCHASED ASSETS, AND THERE ARE NO WRITTEN NOTICES OF
DEFICIENCY, PROPOSED DEFICIENCY, OR ASSESSMENT FROM ANY TAX AUTHORITY WITH
RESPECT TO TAXES OF, OR RELATING TO, THE PURCHASED ASSETS.
ALL MATERIAL
DEFICIENCIES ASSERTED OR ASSESSMENTS MADE FOR TAXES DUE WITH RESPECT TO THE
PURCHASED ASSETS AS A RESULT OF ANY COMPLETED AND SETTLED EXAMINATIONS OR ANY
CONCLUDED LITIGATION HAVE BEEN FULLY PAID.
SELLER IS DISREGARDED AS AN ENTITY
SEPARATE FROM ITS OWNER WITHIN THE MEANING OF TREASURY REGULATION SECTION
301.7701-3 AND NEITHER SELLER NOR SELLER'S FEDERAL TAX OWNER HAS MADE ANY
ELECTIONS TO THE CONTRARY.
NOTWITHSTANDING THE PRECEDING IN THIS SECTION 7.14,
SELLER IS CURRENTLY ENGAGED IN TAX PROCEEDINGS CONCERNING ITS ENTERPRISE ZONE
AGREEMENT.
7.15
LICENSES AND PERMITS.
SELLER HAS, OR HAS APPLIED FOR, ALL MATERIAL
PERMITS (INCLUDING PERMITS UNDER ENVIRONMENTAL LAWS) NECESSARY FOR THE
OWNERSHIP, LEASE, USE,
28
OPERATION, AND MAINTENANCE OF THE PURCHASED ASSETS, AND ALL OF SUCH PERMITS ARE
DESCRIBED IN SCHEDULE 7.15.
EACH SUCH PERMIT IS IN FULL FORCE AND EFFECT, AND
SELLER IS NOT IN VIOLATION OF ANY SUCH PERMIT IN ANY MATERIAL RESPECT.
THERE
ARE NO PENDING OR, TO SELLER'S KNOWLEDGE, THREATENED PROCEEDINGS CHALLENGING THE
VALIDITY OF, OR SEEKING TO REVOKE, WITHDRAW, SUSPEND, CANCEL, TERMINATE, OR
MODIFY ANY OF SUCH PERMITS.
7.16
ENVIRONMENTAL COMPLIANCE.
EXCEPT AS SET FORTH ON SCHEDULE 7.16,
(A) THE PURCHASED ASSETS AND THEIR OPERATION AND MAINTENANCE AS PRESENTLY
CONDUCTED ARE IN COMPLIANCE WITH ALL APPLICABLE ENVIRONMENTAL LAWS IN ALL
MATERIAL RESPECTS; (B) SELLER HAS NOT RECEIVED ANY WRITTEN NOTICE, DEMAND, OR
REQUEST FOR INFORMATION FROM ANY GOVERNMENTAL AUTHORITY INDICATING THAT THE
PURCHASED ASSETS OR THEIR OPERATION AND MAINTENANCE MAY BE IN VIOLATION OF ANY
ENVIRONMENTAL LAW; (C) TO SELLER'S KNOWLEDGE, SELLER HAS NOT DISPOSED OF,