1 / 16

Critical Issues in Joint Development and Joint Ownership Projects: Avoiding Acquisition Pitfalls

Critical Issues in Joint Development and Joint Ownership Projects: Avoiding Acquisition Pitfalls. Lori B. Green Nixon Peabody LLP 1100 Clinton Square Rochester, NY 14604 lgreen@nixonpeabody.com 585-263-1236. Recipe for Effective Transaction. Clear goals – aligned (check regularly)?

velvet
Download Presentation

Critical Issues in Joint Development and Joint Ownership Projects: Avoiding Acquisition Pitfalls

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Critical Issues in Joint Development and Joint Ownership Projects:Avoiding Acquisition Pitfalls Lori B. Green Nixon Peabody LLP1100 Clinton SquareRochester, NY 14604 lgreen@nixonpeabody.com585-263-1236

  2. Recipe for Effective Transaction • Clear goals – aligned (check regularly)? • Clear strategy – group dynamics/coordination • Sub-groups (benefit? detriment?) • Divide and Conquer?

  3. Recipe for Effective Transaction • Successful execution • Coordinated negotiation • Ongoing due diligence • Financing coordination • Closing coordination

  4. Due Diligence – What Is It and Why Do It • Physical investigation of project assets/liabilities/status • Understand and evaluate project/assets • Identify legal and operational issues • Draft/negotiate transaction documents • Allocate risks • Understand approval process/timing

  5. Due Diligence – How to Conduct • Site visits • Real or virtual data room • Independent experts – engineers, attorneys • Operations personnel

  6. Purpose of Asset Purchase Agreement • Roadmap to get to financial closing • Identify assets and liabilities • Economic arrangements • Reps and warranties • Covenants between signing and closing • Conditions precedent to closing • Termination/Withdrawal rights and remedies • Indemnification and survival

  7. Assets and Liabilities • Permits • Real property interests • Coal or other fuel • Contracts • Personal Property • Assumed liabilities – known, unknown, contingent?

  8. Economic Arrangements • Purchase price • Development fee/success/completion fee? • Reimbursement/sharing of development costs • Timing of payments

  9. Reps and Warranties • Disclosure of and about what selling/buying • Disclosure about seller/buyer – authority/consents/litigation • Knowledge and materiality qualifiers • Risk allocation • Relationship to due diligence

  10. Covenants • Exclusivity • Most favored party • Disclosure of changes • Consents, proceedings, cooperation

  11. Conditions Precedent to Closing • Financing • Authorization to construct • Full NTP under EPC Contract • No MAC – project or project documents • Consents/approvals • No litigation • Equity

  12. Termination/Withdrawal Rights • Mutual agreement • Law or order • Breach (notice and cure rights) • MAC • No financing • Drop dead date • Sponsor abandonment • Participant convenience

  13. Refund of development fees (or loss) Liquidated damages different depending on breach Out of pocket costs Actual damages Equitable remedies ROFR Limitation of liability Exclusive remedy Remedies Upon Termination

  14. Post-closing remedy for breaches Reps, warranties and covenants Basket and cap Who pays and controls defense? Exclusive remedy Survival – how long? General – 1-3 years (from when?) Statute of limitations No limit (title, authorization, etc.) Indemnification and Survival

  15. Guaranty • If Sponsor/Participant is SPE • APA and development obligations between signing and closing • Including termination damages • Indemnification obligations • Alternative: credit-worthy entity as a party

  16. Lori B. Green Nixon Peabody LLP 1100 Clinton SquareRochester NY, 14604 lgreen@nixonpeabody.com 585-263-1236

More Related