UNIT (OR ANY
PARTICIPATING AREA THEREIN);
(M)
MAKE ANY SETTLEMENT OF, OR COMPROMISE, ANY TAX LIABILITY, ENTER INTO
ANY CLOSING AGREEMENT, SURRENDER ANY RIGHT TO A REFUND OF TAXES, CONSENT TO ANY
WAIVER OF THE LIMITATION PERIOD APPLICABLE TO ANY TAX CLAIM OR ASSESSMENT,
CHANGE IN ANY MATERIAL RESPECT ANY TAX ELECTION OR TAX METHOD OF ACCOUNTING OR
MAKE ANY NEW TAX ELECTION OR ADOPT ANY NEW TAX METHOD OF ACCOUNTING BUT ONLY IF,
WITH RESPECT TO EACH OF THE FOREGOING, DOING SO WOULD INCREASE THE LIABILITY OF
THE COMPANY OR ANY OF THE SUBSIDIARIES FOR TAX FOR ANY PERIOD AFTER THE CLOSING
DATE; OR
35
(N)
AUTHORIZE OR PROPOSE, OR AGREE IN WRITING OR OTHERWISE TO TAKE, ANY
OF THE ACTIONS DESCRIBED IN THIS SECTION 6.2.
6.3
CONVERSION OF VAUGHAN. PRIOR TO CLOSING, PFC WILL, OR WILL CAUSE
THE COMPANY, VAUGHAN OR WINCHESTER TO, CONVERT A PORTION OF VAUGHAN'S OWNERSHIP
INTEREST IN WINCHESTER INTO LIMITED PARTNERSHIP INTEREST. THE CONVERTED LIMITED
PARTNERSHIP INTEREST OF VAUGHAN WILL BE CONTRIBUTED TO A NEWLY FORMED DELAWARE
LIMITED LIABILITY COMPANY. THE NEWLY FORMED SUBSIDIARY WILL CONDUCT NO BUSINESS
OTHER THAN HOLDING THE INTEREST CONTRIBUTED TO IT. IF AND WHEN SUCH CONVERSION
IS PERFORMED, THE RECITALS SET FORTH IN THIS AGREEMENT WILL BE DEEMED TO BE
AUTOMATICALLY AMENDED TO TAKE SUCH CONVERSION INTO ACCOUNT.
6.4
RETAINED LEGACY HEDGES. WITH RESPECT TO THE RETAINED LEGACY
HEDGES, ONE OF THE FOLLOWING ALTERNATIVES SHALL OCCUR PRIOR TO THE CLOSING:
(A)
ALL OF THE RETAINED LEGACY HEDGES SHALL BE TERMINATED AND
CONCURRENTLY THEREWITH, SUCH TRANSACTIONS SHALL BE REPLACED WITH TWO NEW
TRANSACTIONS WHEREBY THE COMPANY WILL ENTER INTO A HEDGING TRANSACTION (WHICH
SUCH TRANSACTION IS CONSISTENT WITH THE TYPES OF TRANSACTIONS SET FORTH IN THE
DEFINITION OF "HEDGE" HEREIN), WITH A THIRD PARTY THAT IS NOT AFFILIATED WITH
EITHER COMPANY OR BUYER (THE "THIRD PARTY"), AND PROGRESS VENTURES, INC. WILL
ENTER INTO A HEDGING TRANSACTION (WHICH SUCH TRANSACTION IS CONSISTENT WITH THE
TYPES OF TRANSACTIONS SET FORTH IN THE DEFINITION OF "HEDGE" HEREIN), WITH SUCH
THIRD PARTY, IN EACH CASE, UNDER TERMS AND CONDITIONS THAT ARE ACCEPTABLE TO THE
RESPECTIVE PARTIES, AND WITH RESPECT TO THE THIRD PARTY, SUCH PARTY SHALL BE
ACCEPTABLE TO BOTH COMPANY AND BUYER; OR
(B)
IN THE EVENT THAT THE ALTERNATIVE IN CLAUSE (A) ABOVE CANNOT BE
EFFECTUATED FOR ANY REASON, THEN ALL OF THE RETAINED LEGACY HEDGES SHALL REMAIN
IN PLACE BETWEEN THE COMPANY AND PROGRESS VENTURES, INC. AND BUYER SHALL PROVIDE
TO PROGRESS ENERGY, INC. CREDIT SUPPORT IN AN AMOUNT AND IN A FORM THAT IS
ACCEPTABLE TO PROGRESS VENTURES, INC. IN ITS REASONABLY EXERCISED DISCRETION AND
CONSISTENT WITH INDUSTRY STANDARDS, TO COVER PROGRESS VENTURES, INC.'S POTENTIAL
EXPOSURE ARISING UNDER SUCH TRANSACTIONS.
As soon as practicable after the date of this Agreement, Buyer shall determine
which one of the aforementioned alternatives shall occur and, prior to the
Closing, Company and Buyer shall take all necessary actions to effectuate such
alternative.
ARTICLE VII
ADDITIONAL AGREEMENTS OF THE PARTIES
7.1
ACCESS. SUBJECT TO