20091116Application.pdf

DONOVAN E. WALKER
Senior Counsel
dwalkerCâidahopower.com
eslDA~POR~
An IDACORP Company
November 13, 2009
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilties Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-09-32
IN THE MA TTER OF THE APPLICA TlON OF IDAHO POWER COMPANY
FOR AUTHORITY TO SELL TO PACIFICORP THE GOSHEN SERIES
CAPACITOR BANK.
Dear Ms. Jewell:
Enclosed please find for filing an original and seven (7) copies of Idaho Power
Company's Application in the above matter.
UYYOUÈtr~
Donovan E. Walker
DEW:csb
Enclosures
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise. ID 83702
DONOVAN E. WALKER (ISB No. 5921)
BARTON L. KLINE (ISB No. 1526)
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalkercæidahopower.com
bklinecæidahopower.com
cEcr-ij" .. ..! ,.. ,
2009 NOV 13 PM 4: 50
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO SELL TO PACIFICORP
THE GOSHEN SERIES CAPACITOR
BANK.
)
) CASE NO. IPC-E-09-32
)
) APPLICATION
)
)
Idaho Power Company ("Idaho Powet' or the "Company"), in accordance with
Idaho Code § 61-328 and RP 52, hereby respectfully makes Application to the Idaho
Public Utilties Commission ("IPUC" or the "Commission") for an Order approving the
sale of the Goshen Series Capacitor Bank to PacifiCorp.
In support of this Application, Idaho Power represents as follows:
I. BACKGROUND
1 . The Goshen Series Capacitor Bank ("Goshen Capacitor Bank") is a 345
kV, 3-phase, 60 Hz, 2 equal segment, outdoor series capacitor bank. It includes control
cabinets in a control building, a battery bank, three platforms that house the Series
APPLICATION -1
Capacitors, MOVs (metal oxide varistors), OCTs (optical current transducers), and
reactors. It also includes two independent pole bypass circuit breakers that are part of
the package. It also includes two combination air brake/grounding switches and one
bypass switch.
2. On July 31, 2009, Idaho Power and PacifiCorp entered into an Asset
Purchase Agreement for the sale of the Goshen Capacitor Bank from Idaho Power to
PacifiCorp. A copy of the Asset Purchase Agreement is included as Attachment No. 1
to this Application. The Goshen Capacitor Bank is part of the larger Jim Bridger
transmission system-owned jointly by Idaho Power and PacifiCorp. Idaho Power and
PacifiCorp built the Jim Bridger transmission system to deliver electricity produced by
the jointly owned Jim Bridger generating plant ("Jim Bridger Plant") to customers located
in their respective service territories. Generally, this transmission system consists of
several 345 kV transmission lines and substations, with series capacitor banks located
at the Goshen, Kinport, and Borah Substations in Idaho.
3. In 2002, as part of a general upgrade to the Jim Bridger transmission
system, Idaho Power and PacifiCorp entered into an agreement to replace the series
capacitors at the Goshen Substation. Idaho Power paid for the costs of the
replacement capacitor bank and entered into an agreement with PacifiCorp whereby
PacifiCorp would pay for its use of the bank under the general cost recovery mechanism
for the Jim Bridger transmission system.
4. In 2006, PacifiCorp commenced construction of the Three Mile Knoll
Substation ("Three Mile Knoll") on the Jim Bridger transmission system. The presence
of the new Three Mile Knoll Substation, with its new capacitor bank, was expected to
APPLICATION - 2
render the Goshen Capacitor Bank unnecessary. For this reason, Idaho Power and
PacifiCorp entered into an agreement to use the Goshen Capacitor Bank to replace the
capacitor bank located at one of two other substations on the Jim Bridger transmission
system-either the Kinport or Borah Substations. Prior to the completion of Three Mile
Knoll, PacifiCorp launched its Energy Gateway Transmission project. This is also a joint
project with Idaho Powets Gateway West Transmission project. As part of PacifiCorp's
Energy Gateway project, PacifiCorp will construct a new 345 kV substation in
southeastern Idaho called the Populus Substation.
5. PacifiCorp is currently in the process of constructing the Populus
Substation as part of its Energy Gateway project. The existing Borah-Bridger, Kinport-
Bridger, and Borah-Ben Lomond 345 kV lines wil be split and connected to the new
Populus Substation. Both PacifiCorp and Idaho Power own and operate transmission
facilties that wil affect and be affected by the construction of the Populus Substation.
Idaho Power owns, operates, and maintains a 345 kV transmission line between the
Goshen Substation south of Idaho Falls, Idaho, and the Jim Bridger Plant north of Point
of Rocks, Wyoming. The transmission systems of Idaho Power and PacifiCorp meet at,
among other places, the Goshen Substation where PacifiCorp's 345 kV Goshen to
Kinport transmission line meets Idaho Powets 345 kV line from Goshen to the Jim
Bridger Plant in Wyoming. PacifiCorp owns, operates, and maintains the 345/161 kV
Goshen Substation and the 345 kV line termination facilties, shunt reactors, and
associated facilties, while Idaho Power owns the series capacitors required for 345 kV
operation of the Bridger-Goshen-Kinport line. Because of the interconnected nature of
the Idaho Power and PacifiCorp transmission systems, the construction of the Populus
APPLICATION - 3
Substation wil require Idaho Power and PacifiCorp to construct, operate, and maintain
supporting facilties on their respective transmission systems.
6. The construction of the new Populus Substation, and the related
transmission improvements, wil require the installation of a capacitor bank at the Borah
Substation for use in the Borah-Ben-Lomond 345 kV line. The Borah-Ben-Lomond line
is part of PacifiCorp's transmission system, not the jointly owned Jim Bridger
transmission system. Since the existing Goshen Capacitor Bank wil no longer be
utilzed at its current location (due to the addition of the Three Mile Knoll substation), it
wil be relocated from the Goshen Substation and be reconfigured for use at Borah. To
effect this physical transfer, Idaho Power and PacifiCorp have executed the Asset
Purchase Agreement, Attachment No.1, for the sale of the Goshen Capacitor Bank
from Idaho Power to PacifiCorp.
II. APPROVAL OF THE SALE
7. Pursuant to Idaho Code § 61-328, an electric utility must obtain approval
from the Commission before it sells or transfers ownership in any generation,
transmission, or distribution plant.
Before authorizing the transaction, the public utilties commission
shall find: (a) That the transaction is consistent with the public
interest; (b) That the cost of and rates for supplying service wil not
be increased by reason of such transaction; and (c) That the
applicant for such acquisition or transfer has the bona fide intent
and financial abilty to operate and maintain said property in the
public service.
Idaho Code § 61-328(3).
8. This transaction meets the above-stated requirements of Idaho Code §
61-308. The sale of the capacitor bank is consistent with the public interest because it
APPLICATION - 4
allows the Company to receive value for an asset that is no longer required by the
Company and faciltates an upgrade to PacifiCorp's transmission system, which is
interconnected with Idaho Powets transmission system. Additionally, customers' rates
wil not increase as a result of this transaction. The sales price for the Goshen
Capacitor Bank is $6,698,610. This valuation was derived by evaluation of, among
other things, the accumulated depreciation and tax depreciation of the asset. The
purchase price is equal to the net book value of the asset, which wil result in no after
tax gain or loss to either Idaho Power or PacifiCorp. Lastly, PacifiCorp has the bona
fide intent and financial abilty to operate and maintain the propert in the public service.
9. Idaho Power is required to file the Asset Purchase Agreement for approval
by this Commission. Both Idaho Power and PacifiCorp are required to file the
Agreement for approval with the Oregon Public Utilty Commission. PacifiCorp is
required to file the Agreement for approval with the Federal Energy Regulatory
Commission (UFERC") and both Idaho Power and PacifiCorp are required to make
filings with the FERC for the purpose of amending certain existing agreements,
including the Restated and Amended Transmission Facilties Agreement ("RATFA"),
originally executed in 1974, and arising out of the joint ownership of the Jim Bridger
Plant, and the Restated Transmission Services Agreement (URTSA"), which governs the
provision of transmission services necessary for PacifiCorp to access its share of the
Jim Bridger Plant. Applications for these other approvals have either all ready been
submitted or wil be submitted soon after the instant filng.
APPLICATION - 5
II. MODIFIED PROCEDURE
10. Idaho Power believes that a hearing is not necessary to consider the
issues presented herein and respectully requests that this Application be processed
under Modified Procedure, Le., by written submissions rather than by hearing. RP 201
et seq. If, however, the Commission determines that a technical hearing is required, the
Company stands ready to present its testimony and support the Application in such
hearing.
IV. COMMUNCIATIONS AND SERVICE OF PLEADINGS
11. Communications and service of pleadings with reference to this
Application should be sent to the following:
Donovan E. Walker
Barton L. Kline
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
dwalkercæidahopower.com
bklinecæidahopower.com
GregoryW. Said
Director of State Regulation
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
gsaidcæidahopower.com
V. REQUEST FOR RELIEF
12. Idaho Power respectfully requests that the Commission issue an Order:
(1) authorizing that this matter may be processed by modified procedure; (2) approving
the Asset Purchase Agreement for the sale of the Goshen Series Capacitor Bank from
Idaho Power to PacifiCorp pursuant to Idaho Code § 61-328; (3) finding that the sale of
the asset is consistent with the public interest; (4) finding that the costs of and rates of
existing electric service in the state of Idaho will not be increased by reason of such
transaction; (5) finding that PacifiCorp has the bona fide intent and financial abilty to
operate and maintain the transferred assets in the public service; and (6) finding that
APPLICATION - 6
because no hydropower water rights wil be conveyed or assigned, a review by the
Department of Water Resources under § 42-1701 (6) Idaho Code is not required.
DATED this 13th day of November 2009g ~
DONOVAN E. WALKER
Attorney for Idaho Power Company
VERIFICATION
STATE OF IDAHO)
) ss.County of Ada )
DONOVAN E. WALKER, being duly sworn, deposes and states that he is an
attorney for Idaho Power Company, that he has read the foregoing Application and
knows the contents thereof, and that the same are true to the best of his knowledge and
belief.
¿;t:
DONOVAN E. WALKER
SUBSCRIBED AND SWORN TO before me, a notary public of the state of Idaho,
this 13th day of November 2009.
NARY PUBLIC FOR ID
Residing at Boise, Idaho
My commission expires: 02/04/2015
APPLICATION - 7
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-09-32
IDAHO POWER COMPANY
ATTACHMENT NO. ~
ASSET PURCHASE AGREEMENT
by and between
.
IDAHO POWER COMPANY
"Seller"
and
PACIFICORP
"Buyer"
dated as of July 31, 2009
TABLE OF CONTENTS
ARTICLE i. DEFINITIONS AND INTERPRETATION...............................................................1
1.1 Defintions................................................................... .............................................1
1.2 Interpretation........... .................. .............. .................... ..... ........... ........... ..... .... .........1
ARTICLE II. PURCHASE AND SALE .........................................................................................2
2.1 Purchased Assets......................................................................................................2
2.2 Liabilities Not Assumed ..........................................................................................2
2.3 Purchase Price ..........................................................................................................3
2.4 Payment.. ......... ................. ........... .... ............. ...... ............. ............. ....... ............ .........3
2.5 Closing ... ........ .................. .......... .... ............ ........ ............ .............. ...... ............ ..........3
2.6 Closing Deliveries by Seller ...... ..... ............ ....... ........................... ...... ............ .........3
2.7 Closing Deliveres by Buyer ........................................... .............. ...... ............ .........4
2.8 Closing Costs ...........................................................................................................4
2.9 Tax Matters. .............................. ................................ ............................ .... .......... .....4
2.10 Prorations .................................................................................................................4
2.11 Furher Assurances...... ........... .............. ............ ................ ........... ..... ....... .......... .......4
ARTICLE III. REPRESENTATIONS AND WARNTIES OF SELLER..................................5
3.1 Organzation and Good Standing; Authority...........................................................5
3.2 No Conflict...............................................................................................................5
3.3 Title..........................................................................................................................6
3.4 Condition of Purchased Assets ................................................................................6
3.5 Suffciency of Assets ...............................................................................................6
3.6 No Material Adverse Effect .....................................................................................6
3.7 Compliance with Laws; Governental Authorizations...........................................6
3.8 Legal Proceedings; Orders. ......................................................................................6
3.9 Insurance..................................................................................................................6
3.10 Tax Matters..............................................................................................................7
3.11 Full Disclosure. ........................................................................................................ 7
3.12 Solvency...................................................................................................................7
3.13 Brokers or Finders....................................................................................................8
3.14 Environmental Matters............................................................................................. 8
ARTICLE IV. REPRESENTATIONS AND WARTIES OF BUYER...................................9
4.1 Organization and Good Standing; Authority...........................................................9
4.2 No Confict......... ................................ ........ ........ .............. ........................ ............ ....9
4.3 Certain Proceedings .... ... .......... .......... ........ .................. .......... ...... ...... .................. ....9
4.4 Brokers or Finders.... ...... ... ........ ......... ................ ................ .......... ..... .................. .....9
ARTICLE V. COVENANTS...........................................................................................................9
5.1 Regulatory Approvals. ............................................................................................. 9
5.2 Additional Affrmative Covenants of Seller ..........................................................11
5.3 Negative Covenants ...............................................................................................12
i
5 .4 No Duty to Accept Changes ................................................................................ ..12
5.5 Access and Investigation........................................................................................12
5.6 Notification ............................................................................................................13
5.7 Exclusivity .............................................................................................................13
5.8 Best Efforts........................................................................................................... .13
ARTICLE VI. ADDITIONAL AGREEMENTS ............... ..... ............. ................................... .......13
6.1 Expenses ................................................................................................................13
6.2 Risk of Loss ...........................................................................................................13
6.3 Delivery and Installation of Purchased Assets....................................................... 13
ARTICLE VII. CONDITIONS TO OBLIGATIONS OF BUYER...............................................14
7.1 Accuracy of Representations .................................................................................14
7.2 Seller's Performance............................................................................................. .14
7.3 Deliveries ........ .... ... ..................... ....... ........................... ......................... ............... .14
7.4 Consents and Approvals ........................................................................................14
7.5 Readiness of Purchased Assets .... ....... ................ .......... .............. ......... ... ............ ...14
7.6 Approvals of Governental Authorities................................................................14
7.7 No Prohibition........................................................................................................14
7. 8 No Proceedings..................................................................................................... .15
7.9 No Material Adverse Effect...................................................................................15
ARTICLE VIII. CONDITIONS TO OBLIGATIONS OF SELLER............................................15
8.1 Accuracy of Representations .................................................................................15
8.2 Buyer's Performance. ............................................................................................15
8.3 No Injunction.........................................................................................................16
ARTICLE IX. TERMINATION....................................................................................................16
9.1 Termnation............................................................................................................16
9.2 Effect of Termination.......................................... ..................................................16
ARTICLE X. SURVIVAL AND INDEMNIFICATION ..............................................................16
10.1 Survval.......... ........ ......... .......... ...... ............................... ..................... ............. ..... .16
10.2 Indemnfication. . .......... ............. .......... ......... ................. ..... .......... .................... ......17
10.3 Time Limitations. ......... ................. ...................... ...... ... ...... .......... ...................... ....17
10.4 Procedure for Indemnification - Thid~Party Claims. ...........................................17
ARTICLE XI. DISPUTE RESOLUTION .....................................................................................19
ARTICLE XII. GENERAL PROVISIONS ...................................................................................19
12.1 Notices ...................................................................................................................19
12.2 Disclosure Schedules .............................................................................................20
12.3 Entire Agreement; No Third Par Beneficiaries...................................................20
12.4 Amendment............................................................................................................20
12.5 Assignent ............................................................................................................20
12.6 Severability ............................................................................................................20
12.7 Governng Law ......................................................................................................21
11
12.8 Conditions..............................................................................................................21
12.9 Remedies................................................................................................................21
12.10 No Waiver..............................................................................................................21
12.11 Counterpars; Facsimiles........................................................................................21
EXHIBIT A. DEFINED TERMS.........................................................................24
SCHEDULES
Schedule 2.1
Schedule 3.3
Schedule 3.9
Schedule 3.14(b)
Schedule 5.1(a)
Purchased Assets
Encumbrances
Insurance
Environmental Matters
Required Consents
11
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") dated as of July 31,2009,
(the "Agreement Date") is made and entered into by and between PacifiCoip, an Oregon
coiporation ("Buyer") and Idaho Power Company, an Idaho coiporation ("Seller"). Seller and
Buyer are sometimes referred to in this Agreement individually as a "Party" and, collectively, as
the "Partes," in each case as the context may require.
RECITALS
A. Seller is the owner of the Purchased Assets (as defined herein).
B. Buyer and Seller are paries to the Restated and Amended Transmission Facilties
Agreement, dated Februar 15, 2007 ("RATFA"), pursuant to which Buyer makes
an anual use of facilities payment to Seller associated with the Purchased
Assets..
C. Seller and Buyer executed the Populus Constrction Agreement dated as of
March 2, 2009, which describes the terms and conditions associated with the
installation and delivery of the Purchased Assets to Seller's Borah substation on
the Borah to Ben-Lomond 345 kV line located in southeast Idaho.
D. Seller desires to sell and assign to Buyer, and Buyer desires to purchase from
Seller, the Purchased Assets on the terms and subject to the conditions set fort
herein.
NOW, THEREFORE, in consideration of the premises and the mutual representations,
waranties, covenants and agreements set forth in this Agreement, and for other good and
valuable consideration, the receipt and suffciency of which are hereby acknowledged, the
Paries agree as follows:
ARTICLE i.
DEFINITIONS AND INTERPRETATION
1.1 Definitions. Capitalized terms used herein or in any Seller Related Documents or
Buyer Related Documents have the meanngs set fort in this Agreement or Exhibit A hereto.
1.2 Intemretation. The following rules of inteipretation apply throughout this
Agreement and in any Seller Related Documents and Buyer Related Documents:
(a) The word "or" is used in the inclusive sense of "and/or." The word "including"
(and "include" and varations thereof) means including without limiting the generality of any
description preceding such term. The words "hereof," "herein," "hereby," "hereunder," and
similar terms in ths Agreement refer to ths Agreement as a whole and not to any paricular
provision of this Agreement.
(b) The headings in ths Agreeent are for reference puroses only and shall not
affect in any way the meanng or interpretation of ths Agreement. Except as otherwise
indicated, all references in ths Agreement to "Aricles," "Sections," "Exhbits" and "Schedules"
are intended to refer to Aricles or Sections of ths Agreement and Exhbits or Schedules to ths
Agreement.
(c) Whenever used herein, the singular number shall include the plural, the plural
shall include the singular, and the use of any gender shall be applicable to both genders.
(d) Unless otherwise specified, all references to monetar amounts are to curency of
the United States of America.
(e) Whenever Seller agrees to take or refrain from takng action, such provision shall
be read to include the agreement of each Affliate of Seller to take or refrain from taking such
action.
(t) When calculating the perod of time before which, within which or following
which any act is to be done or step is to be taken under this Agreement, the reference date in
calculating such period shall be excluded. If the last day of such period is not a Business Day,
the period in question shall end on the next succeeding Business Day.
(g) This Agreement is the result of negotiations between, and has been reviewed by,
the Paries and their respective legal counsel. Accordingly, ths Agreement shall be deemed to
be the product of each Pary, and there shall be no presumption that an ambiguity should be
constred in favor of or against a Pary solely as a result of such Party's actual or alleged role in
the drafting of this Agreement and any law, regulation, or rule of constrction to the effect that
ambiguities are to be resolved against the drafting Pary shall not be applied in the constrction
or interpretation of this Agreement, the Seller Related Documents and Buyer Related
Documents.
ARTICLE II.
PURCHASE AND SALE
2.1 Purchased Assets. Pursuant to the RATFA, Buyer shall continue to pay the
anual use of facilities charges associated with the Purchased Assets as invoiced by Seller in the
Interim Period. On the terms and subject to the conditions set fort in ths Agreement, at the
Closing, Seller shall sell, assign, convey, tranfer and deliver to Buyer, and Buyer shall purchase
and acquire from Seller, free and clear of all Encumbrances, all of Seller's right, title and interest
in and to the propert, tangible or intangible, constituting the Purchased Assets set fort on
Schedule 2.1.
2.2 Liabilities Not Assumed. Buyer does not assume, and shall have no responsibility
for, any Liability of Seller, including without limtation any Liabilty relating to the Purchased
Assets which have arisen, been accrued or incurred, or are otherwise based on events tag
place, prior to and as of the Closing including Liability for Taxes arsing as a result of the
Contemplated Transaction. Seller shall remain fully responsible for all Liabilities. Buyer shall
be entitled to forward to Seller all invoices or other claims or evidences of Liability for which
2
Seller is responsible which Buyer shall receive and Buyer shall have no obligation to make any
payment thereon. If Buyer has, at its election, made any such payments, Buyer shall be entitled
to reimbursement therefor.
2.3 Purchase Price. The total consideration for the Purchased Assets wil be
$6,698,610 (the "Purchase Price").
2.4 Payment. On the Closing Date (defined below), Buyer shall pay to Seller the
Purchase Price, in cash by wire transfer to an account or accounts designated by Seller.
2.5 Closing. Unless this Agreement is termnated pursuant to its terms, the closing
(the "Closing") of the purchase and sale of the Purchased Assets (the "Contemplated
Transaction") shall take place at the offces of PacifiCorp located at 825 NE Multnomah Street,
Suite 2000, Portland, Oregon 97232, or at such other place as Buyer and Seller mutually agree
on, at 10:00 a.m., local time, on a date ("Closing Date") mutually agreed on by the Paries but
that is no more than ten (10) Business Days after satisfaction or waiver of the conditions
specified in ARTICLE VII and ARTICLE VII (other than conditions that by their terms are to
be satisfied on the Closing Date).
2.6 Closing Deliveries by Seller. At Closing, Seller shall deliver to Buyer (in form
and substance acceptable to Buyer) each of the following, duly executed:
(a) This Agreement and all Seller Related Documents necessar or desirable to
convey the Purchased Assets to Buyer, in accordance with Section 2.1 hereof, all duly executed
by Seller and duly acknowledged or executed by any required thrd parties, where applicable.
(b) A certificate duly executed by an authorized offcer of Seller, dated the Closing
Date, stating that each of the conditions set forth in ARTICLE VII, other than the condition set
fort in Section 7.9, has been satisfied.
( c) A certificate duly executed by an authorized offcer of Seller, dated the Closing
Date, setting forth and certifying (i) the text of the resolutions of the board of directors (or
similar body) of Seller authorizing the execution, delivery, and performance of this Agreement
and each Seller Related Document to which such Seller is a part; (ii) the text of the resolutions
of the board of directors (or similar body) of Seller authorizing the release of any mortgages
associated with the Purchased Assets; (iii) the incumbency and signatue of the officer(s) of
Seller executing this Agreement and the Seller Related Documents and (iv) the Original Cost and
the Accumulated Provision for Depreciation and Amortization for the Purchased Assets as of the
Closing Date.
(d) All Seller Required Consents, duly executed by all appropriate paries thereto.
( e) Each Seller Related Document.
(f) Such other certificates, documents and instrents as Buyer reasonably requests
for the purose of (i) evidencing the accuracy of Seller's representations and waranties
contained in ths Agreement and any Seller Related Document, (ii) evidencing the performance
3
and compliance by Seller with its covenants, obligations and agreements contaied in this
Agreement and any Seller Related Document, (iii) evidencing the satisfaction of any condition
referred to in ARTICLE VII, or (iv) otherwise facilitating the consumation of the
Contemplated Transaction.
2.7 Closing Deliveries by Buyer. At Closing, Buyer shall deliver to Seller (in form
and substance acceptable to Seller) each of the following, duly executed:
( a) Ths Agreement;
(b) A certificate duly executed by an authorized offcer of Buyer, dated the Closing
Date, stating that the conditions set forth in ARTICLE VIII have been satisfied.
(c) A certificate duly executed by an authorized officer of Buyer, dated the Closing
Date, setting forth and certifying (i) the text of the resolutions of the board of directors of Buyer
authorizing the execution, delivery, and pedormance of ths Agreement and each Buyer Related
Document, if applicable and (ii) the signatues and incumbency of the offcers of Buyer.
(d) Such other Buyer Related Documents as Seller reasonably requests for the
purose of (i) evidencing the accuracy of Buyer's representations and waranties, (ii) evidencing
the performance and compliance by Buyer with its agreements contained in this Agreement, (iii)
evidencing the satisfaction of any condition referred to in ARTICLE VIII, or (iv) otherwise
facilitating the consumation of the Contemplated Transaction.
2.8 Closing Costs. The Paries shall each be responsible for payment of their
respective costs and fees incured in connection with activities required or related to completion
of the Contemplated Transaction.
2.9 Tax Matters. Notwithstanding any other provision of this Agreement,
responsibility for payment of any and all Transfer Taxes incured in connection with ths
Agreement and the transactions contemplated hereby shall be borne by Seller. Seller shall, at its
own expense, file, to the extent required by Law, all necessar Tax Retus and other
documentation with respect to all such Transfer Taxes, and Buyer wil be entitled to review such
return in advance and, if required by applicable Law, Buyer shall join in the execution of any
such Tax Retus or other required documentation.
2.10 Prorations. Buyer and Seller agree that, except as otherwise set fort in this
Agreement, all of the items normally prorated relating to the Purchased Assets, including any
Taxes and other items payable by or to Seller under any of the Transferred Contracts to be
assigned to and assumed by Buyer hereunder, shall be prorated as of the effective time of the
Closing on the Closing Date, with Seller liable to the extent such items relate to any time period
though the effective time of the Closing on the Closing Date, and Buyer liable to the extent such
items relate to any time period subsequent to the effective time of the Closing on the Closing
Date.
2.11 Furer Assurances. From time to time, whether before, at or after Closing, Buyer
and the Seller' wil execute and deliver such fuer instrents, in form and substance
4
reasonably satisfactory to the other, and take such other action as may be reasonably necessar to
car out the puroses and intent of this Agreement, including to assure that Buyer has acquired
the Purchased Assets free and clear of Encumbrances.
ARTICLE III.
REPRESENTATIONS AND WARRTIES OF SELLER
The Seller represents and waranties to Buyer that the statements contained in ths
ARTICLE III are tre and correct as of the date hereof and wil be tre and correct as of the
Closing Date.
3.1 Organzation and Good Standing; Authority. Seller is duly organized, validly
existing, and in good standing under the laws of its jursdiction of formation. Seller has all
requisite power and authority to enter into this Agreement and each of the Seller Related
Documents, to pedorm its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by Seller of ths
Agreement and each of the Seller Related Documents and the pedormance by Seller of its
obligations hereunder and thereunder have been duly and validly authorized by all necessar
action on behalf of Seller. This Agreement and each of the Seller Related Documents have been
duly and validly executed and delivered by Seller and constitute the legal, valid and binding
obligation of Seller enforceable against Seller in accordance with their respective terms except
that the enforcement hereof and thereof may be limted by bankptcy, insolvency,
reorganzation, arangement, moratorium or other similar Laws relating to or affecting the rights
of creditors generally, or by general equitable priciples.
3.2 No Conflct.
(a) Neither the execution and delivery of ths Agreement nor the consumation or
pedormance of the Contemplated Tranaction wil, directly or indirectly (with or without notice
or lapse of time): (i) contravene, confict with, or result in a violation of (A) any provision of the
Organzational Documents of Seller, or (B) any resolution adopted by the governg body of
Seller; (ii) contravene, confict with, or result in a violation of, or give any Governental
Authority or other Person the right to challenge the Contemplated Transaction or to exercise any
remedy or obtain any relief under, any Law or any Order to which Seller, or any of the Purchased
Assets, may be subject; (iii) contravene, conflct with, or result in a violation of any of the terms
or requirements of, or give any Governental Authority the right to revoke, withdraw, suspend,
cancel, terminate, or modify, any Governental Authorization included in the Purchased Assets;
(iv) contravene, conflict with, or result in a violation or breach of any provision of, or give any
Person the right to declare a default or exercise any remedy under, or to accelerate the matuty
or performance of, or result in the importing, acceleration or increase of any payments or
amounts due under, or to cancel, termnate, or modify, any Transferred Contract; or (v) result in
the imposition or creation of any Encumbrance upon or with respect to any of the Purchased
Assets.
(b) Schedule 5.1(a) contains a complete and accurate list of all Required Notices and
Seller Required Consents. Seller has given all Required Notices and obtained all Seller Required
Consents.
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3.3 Title. Subject to the Encumbrance specified in Schedule 3.3 Seller has good,
valid and marketable title to all of the Puchased Assets, free and clear of all Encumbrances, and
wil effectively convey to Buyer at Closing, good and marketable title to all of the Purchased
Assets, free and clear of all Encumbrances (whether or not disclosed to Buyer).
3.4 Condition of Puchased Assets. Schedule 2.1 contains a complete and accurate
list of all Purchased Assets and (i) all Purchased Assets are in good condition (ordinar wear and
tear excepted), no Purchased Asset is in need of any repair or maintenance (other than normal
and routine repair and maintenance), and (ii) there are no facts or conditions affecting the
Purchased Assets which could intedere in any material respect with the use or operation thereof
or their adequacy for such use.
3.5 Sufficiency of Assets. The Purchased Assets comprise all the properties and
assets necessar or desirable to use and operate the Capacitor Ban after Closing in substantially
the same maner as conducted prior to Closing or, if the Capacitor Ban was not in use or being
operated prior to the Closing, in the maner in which Capacitor Banks are customarly used and
operated.
3.6 No Material Adverse Effect. There has not been a Material Adverse Effect, and
no event has occured or circumstance exists that may result in a Material Adverse Effect.
3.7 Compliance with Laws; Governental Authorizations. (i) Seller is, and has at all
times been, in full compliance with each Law that is or was applicable to the Purchased Assets;
(ii) no event has occurred or circumstance exists that (with or without notice or lapse of time)
(A) may constitute or result in a violation or failure to comply with, any Law affecting the
Purchased Assets, or (B) may require undertaking or bearng any cost of remedial action of any
natue in connection with the Purchased Assets; and (iii) in connection with the Purchased
Assets, Seller has not received at any time any notice or other communcation (whether oral or
written) from any Governental Authority or any other Person regarding (A) any actual, alleged,
possible, or potential violation of, or failure to comply with, any Law, or (B) any actual, alleged,
possible, or potential obligation to undertake, or bear any cost of, any remedial action of any
natue.
3.8 Legal Proceedings; Orders.
(a) There is no pending Proceeding (i) that has been commenced by or against Seller
or that otherwise relates to or may affect the Purchased Assets; or (ii) that challenges, or that may
have the effect of preventing, delayig, makg ilegal, or otherwise interfering with, the
Contemplated Transaction. To Seller's knowledge, (1) no such Proceeding has been theatened
and (2) no event has occured or circumstance exists that may give rise to or serve as a basis for
the commencement of any such Proceeding.
(b) (i) There is no Order to which any of the Purchased Assets is subject; and (ii)
Seller is not subject to any Order that relates to the Purchased Assets.
3.9 Insurance. Seller maintains and has at all times during which it has owned the
Purchased Assets maintained without any gaps in coverage, (a) insurance on all of the Purchased
6
Assets covering propert damage and by fire or other casualty and (b) adequate insurance
protection againt all liabilities, claims and risks relating to the Purchased Assets which it is
customar and appropriate to insure, including general liability, professional liability, fire, theft,
casualty, workmen's compensation, employee fidelity and other casualty and liability insurance.
Schedule 3.9 contains a complete and accurate list (including type of coverage, limits of
liability, and deductibles) of all insurance policies, currently in effect and covering the Puchased
Assets. All such policies are in full force and effect, Seller has paid all premiums due thereon in
a timely maner, there were no misrepresentations in the applications for such policies, Seller is
in compliance with each such policy, and no insurer thereunder has given notice of cancellation
or premium increase with respect to any such insurance policy. There is no claim by Seller
relating to the Purchased Assets pending under any such insurance policy as to which the insurer
has questioned, dened, or disputed coverage.
3.10 Tax Matters. All Tax Retus that are required to be filed on or before the
Closing Date by, on behalf of or relating to Seller or its financial results have been or wil be
duly and timely filed or are the subject of a timely fied and valid extension. All Taxes that are
shown to be due on such Tax Retus with respect to the Purchased Assets have been or wil be
timely paid in full. Seller does not have in force any waiver of any statute of limitations in
respect of Taxes or any extension of time with respect to a Tax assessment or deficiency. There
are no pending or active audits or, to Seller's knowledge, threatened audits or proposed
deficiencies or other claims for unpaid Taxes of Seller.
3. i i Full Disclosure.
(a) No representation or warranty of Seller in ths Agreement and no statement in the
Schedules omits to state a material fact necessary to make the statements herein or therein, in
light of the circumstances in which they were made, not misleading.
(b) No notice given pursuant to Section 5.6 wil contain any untre statement or omit
to state a material fact necessar to make the statements therein or in this Agreement, in light of
the circumstances in which they were made, not misleading.
3.12 Solvency
(a) Seller is not now insolvent, and Seller wil not be rendered insolvent by the
Contemplated Transaction. As used in ths Section, "insolvent" means that the sum such
Seller's debts and other probable Liabilities exceeds the present fair saleable value of such
Seller's assets.
(b) Imediately after giving effect to the consummation of the Contemplated
Transaction, (i) Seller wil be able to pay its Liabilities as they become due in the usual course of
its business, (ii) Seller wil not have uneasonably small capital with which to conduct its present
or proposed business, (iii) Seller wil have assets (calculated at fair market value) that exceed its
Liabilities and (iv) takng into account all pending and theatened litigation, final judgments
against Seller in actions for money damages are not reasonably anticipated to be rendered at a
time when, or in amounts such that, such Seller wil be unable to satisfy any such judgments
promptly in accordance with their terms (taking into account the maximum probable amount of
7
such judgments in any such actions and the earliest reasonable time at which such judgments
might be rendered) as well as all other obligations of such Seller. The cash available to Seller,
after takng into account all other anticipated uses of the cash, wil be suffcient to pay all such
debts and judgments promptly in accordance with their ters.
3.13 Brokers or Finders. Neither Seller nor any of its respective agents have incured
any Liability, contingent or otherwise, for brokerage or finders' fees or agents' commssions or
other similar payment in connection with ths Agreement or the Contemplated' Transaction and
wil indemnfy and hold Buyer haness from any such payment alleged to be due.
3. i 4 Environmental Matters.
(a) Seller has made available to Buyer, tre and complete copies of all environmental
site assessment reports, studies and related documents in the possession of, or available to, Seller
or its Affliates and that relate to environmental matters in connection with the operation of the
Purchased Assets.
(b) Except as set fort on Schedule 3.14(b):
(i) Seller has not been served with notice of any Environmental
Claims and, to Seller's Knowledge, no Environmental Claims are threatened
against Seller by any Governental Authority or other Person (including any
private citizen's group) under any Environmental Laws;
(ii) there has been no event or occurence related to the Purchased
Assets that has caused or reasonably would be expected to cause Seller to fail to
comply with any applicable Environmental Laws in any material respect;
(iii) there has been no Release of any Hazardous Material at or from the
Purchased Assets that could reasonably be expected to result in an Environmental
Claim;
(iv) there are not outstanding, nor have there been issued, any
judgments, decrees or judicial orders relating to the Purchased Assets regarding
(A) compliance with any Environmental Law or (B) the investigation or cleanup
of Hazardous Materials under any Environmental Law;
(v) Seller is, and at all times has been, in compliance with, in all
material respects, and has not been and is not in violation of or liable in any
material respect under, any Environmental Law in connection with the Purchased
Assets; and
(vi) To Seller's Knowledge, there are no Environmental Liabilities
associated with the Purchased Assets that would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
8
ARTICLE IV.
REPRESENTATIONS AND WARNTIES OF BUYER
Buyer represents and warts to Seller that the statements contained in this ARTICLE
IV are tre and correct as of the date hereof and wil be tre and correct as of the Closing Date.
4.1 Organization and Good Standing; Authority. Buyer is a corporation duly
organzed, validly existing, and in good standing under the laws of the State of Oregon. Buyer
has all corporate power and authority to enter into ths Agreement and each of the Buyer Related
Documents, to perform its obligations hereunder and thereunder and to consumate the
transactions contemplated hereby and thereby. The execution and delivery by Buyer of this
Agreement and each of the Buyer Related Documents and the performance by Buyer of its
obligations hereunder and thereunder have been duly and validly authorized by all necessa
action on behalf of Buyer. This Agreement and each of the Buyer Related Documents have been
duly and validly executed and delivered by Buyer and constitute the legal, valid and binding
obligation of Buyer enforceable against Buyer in accordance with their respective terms except
that the enforcement hereof and thereof may be limited by banptcy, insolvency,
reorganzation, arangement, moratorium or other similar Laws relating to or affecting the rights
of creditors generally, or by general equitable principles.
4.2 No Conflct. Neither the execution and delivery of ths Agreement by Buyer nor
the consumation or performance of the Contemplated Transaction by Buyer wil give any
Person the right to prevent, delay, or otherwise interfere with the Contemplated Transaction
pursuant to (i) any provision of Buyer's Organzational Documents; (ii) any resolution adopted
by the governng body or shareholders of Buyer, if applicable; (ii) any Law or Order to which
Buyer may be subject; or (iii) any Contract to which Buyer is a party or by which Buyer may be
bound.
4.3 Certain Proceedings. There is no pending Proceeding that has been commenced
against Buyer and that challenges, or may have the effèct of preventing, delaying, makg ilegal,
or otherwise interfering with, the Contemplated Transaction. To Buyer's knowledge, no such
Proceeding has been theatened.
4.4 Brokers or Finders. Buyer has incured no obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or other similar payment in
connection with this Agreement or the Contemplated Transaction and wil indemnfy and hold
Seller haress from any such payment alleged to be due.
ARTICLE V.
COVENANTS
5.l Regulatory Approvals.
(a) From the date of this Agreement until the earlier of the Closing or termnation of
this Agreement in accordance with its terms (the "Interim Period"), Seller wil, in order to
consumate the Contemplated Tranaction (including the transfer of the Transferred Contracts
to Buyer), take such reasonable steps as are necessar or desirable, and proceed diligently and in
9
good faith and use all reasonable efforts to expedite and obtain the Required Consents, and to
make all fiings with, and to give all notices to, Governental Authorities, and provide such
other information and communcations to such Governental Authorities or other Persons, as
such Governental Authorities or other Persons may reasonably request in connection therewith.
Buyer covenants that, durng the Interim Period, Buyer wil, in order to consummate the
Contemplated Transaction (including the transfer of the Transferred Contracts to Buyer), take
such reasonable steps as are necessar or desirable, and proceed diligently and in good faith and
use all reasonable efforts to expedite and obtain the Required Consents, and to make all fiings
with, and to give all notices to, Governental Authorities, and provide such other information
and communcations to such Governental Authorities or other Persons, as such Governental
Authorities or other Persons may reasonably request in connection therewith. Schedule 5.1(a)
contains a complete and accurate list of each Required Consent to be obtained in connection with
consumation of the Contemplated Transaction. Without limting the generality of the
foregoing, each Party shall provide, and cause its respective Affliates to provide, tre and
accurate information in a tiely maner with respect to all fiings with and notices to
Governental Authorities. Nothig in ths Section 5.I(a) shall be constred to require Buyer to
take any action with respect to fiings with or notices to Governental Authorities that in
Buyer's discretion could materially adversely affect any other proceeding with such
Governental Authority. Each Par wil cooperate fully in good faith with the other Party with
respect to all fiings that are required by Law or that such other Pary elects to make in
connection with the Contemplated Transaction. Each Par wil also cooperate fully in good
faith with the other in obtaig all materal consents and approvals required under this
Agreement.
(b) Each Pary wil provide the other Pary with a reasonable opportnity to review
and provide prior comment upon any notices, fiings or other submissions that the Part plans to
deliver or submit to any Governental Authority, and wil promptly provide to such other Pary
a copy of any such notices or fiings. Each Pary will provide prompt notification to the other
Par when any approval referred to in Section 5.l(a) is obtained, taken, made or given, as
applicable, and wil advise the other Pary of any material communications with any
Governental Authority from which such approval is required regarding any pending
application or request for approval by such Governental Authority of any of the transactions
contemplated by this Agreement.
(c) Buyer shall prepare, as soon as is reasonably practicable following the execution
of ths Agreement, all necessar fiings in connection with the Contemplated Transaction
required to be made by Buyer with FERC, under Section 203 of the Federal Power Act of 1935,
and Par 33 of the FERC Regulations (18 CFR Par 33), for the approval of the Contemplated
Transaction. The Paries shall promptly make any appropriate or necessar subsequent or
supplemental filings and shall cooperate in the preparation of such fiings as is reasonably
necessar and appropriate.
(d) To the extent that any Transferred Contract is not assignable without the consent
of another party, then ths Agreement shall not constitute an assignent or attempted assignment
thereof if such assignent or attempted transfer thereof would constitute a breach thereof or a
default thereunder. Without limting the provisions of Section 5.l(a), if any such consent shall
10
not be obtained, or if any attempted assignent of a Transferred Contract would be ineffective or
would impair Buyer's rights and obligations such that Buyer would not in effect acquire the
benefit of substantially all of such rights and obligations, Seller shall cooperate with Buyer in
any reasonable arangement, to the extent legally permssible, designed to provide for Buyer the
benefits intended to be assigned to Buyer under the Transferred Contract, including enforcement
at the cost and for the account of Buyer of any and all rights of Seller against the other par
thereto arsing out of the breach or cancellation thereof by such pary or otherwise. If and to the
extent that such arangement is not made in a manner reasonably satisfactory to Buyer, Buyer
shall have no obligation with respect to such Transferred Contract. The provisions of this
Section 5.1(d) shall not affect the right of Buyer not to consumate the Contemplated
Transaction if the conditions to Buyer's obligations set forth in ARTICLE VII have not been
fulfilled.
shall:
5.2 Additional Affrmative Covenants of Seller. During the Interim Period, Seller
( a) Use its best efforts to preserve intact the Purchased Assets;
(b) Operate and maintain the Purchased Assets in the usual and ordinary course
consistent with Good Operating Practices, including maintaining all services, personnel, and
agreements with suppliers and others related to the Purchased Assets;
(c) Maintain or cause to be maintained all insurance policies (or reasonably
equivalent renewals or replacements thereof) coverig the Purchased Assets until the Closing;
(d) Take any and all commercially reasonable actions necessar or appropriate to
ensure that Seller Required Notices are given and that all Required Consents and Seller Required
Consents are obtained on or before the Closing. Seller shall otherwise cooperate with Buyer and
use its best efforts to make all registrations, fiings, and applications and to cause the other
conditions to Buyer's obligation to close to be satisfied;
(e) Take all actions that are reasonably necessar or appropriate to ensure that the
representations and waranties in ARTICLE III remain true and correct in all respects at the
Closing;
(f) Bring about, as soon as practical after the date hereof, the satisfaction of all the
conditions set fort in ARTICLE VII;
(g) Supplement or amend the Schedules to this Agreement (1) to correct any matter
that, if not so supplemented or amended, would constitute a breach of any representation or
warranty of Seller, and (2) with respect to any matter arsing after the Agreement Date, to
include any matter that if existing at, or occurng on, the Agreement Date, would have been
required to be set fort or described on any such Schedule; and
(h) Confer with Buyer concerning matters of a material natue affecting the
Purchased Assets; and otherise report periodically to Buyer concerning the status of the
Purchased Assets.
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5.3 Negative Covenants. Dug the Interi Period, Seller wil not, without the prior
consent of Buyer:
(a)
Assets;
Permit, allow, or suffer to exist any Encumbrance against any of the Purchased
(b) Sell, lease (as lessor), transfer, conveyor otherwise dispose of any Purchased
Assets (including by way of merger, liquidation or dissolution);
(c) Make any material change in the operations of the Purchased Assets;
(d) Prohibit payment of or delay payment of or prohibit or delay discharge of any
Assumed Liability;
(e) Grant any waiver of any material term under, or give any material consent with
respect to, any Transferred Contract;
(f) Take or omit to take any action which, individually or in the aggregate, has or
could be reasonably anticipated to have a Material Adverse Effect or the rights of Buyer under
ths Agreement;
(g) Take or omit to take any action that would require notification under Section 5.6
if each representation and waranty herein were remade as of the time of such action or omission;
or
(h) Agree or commit to do any of the foregoing.
Notwithstanding the foregoing, Seller may take commercially reasonable actions with respect to
emergency situations affecting the Purchased Assets so long as Seller shall, upon receipt of
notice of any such actions, promptly inform Buyer of any such emergency actions taken outside
the ordinar course of business.
5.4 No Duty to Accept Changes. Notwithstanding anytng to the contrary contained
in this Agreement (including obligations to act commercially reasonably), Buyer shall not be
required to accept or honor (nor shall any Seller be permitted to accept or honor except with
Buyer's prior written consent) any conditions, changes, modifications or additions to, or in
connection with, any Transferred Contracts or the Purchased Assets (or any portion thereof),
other than modifications of a ministerial nature.
5.5 Access and Investigation. Durg the Interi Period, Seller and its
Representatives wil (a) afford Buyer and its Representatives (collectively, "Buyer's Advisors")
full and free access to the Purchased Assets and all of Seller's contracts, books and records, and
documents and data related to the Purchased Assets, (b) fush to Buyer and Buyer's Advisors
copies of all such contracts, books and records, and other existing documents and data related to
the Purchased Assets as Buyer may reasonably request, and (c) furnsh to Buyer and Buyer's
Advisors such additional financial, operating, and other data and information related to the
Purchased Assets as Buyer may reasonably request.
12
5.6 Notification. Durg the Interim Period, Seller wil promptly notify Buyer in
writing if Seller becomes aware of any fact or condition that causes or constitutes a breach of any
of Seller's representations and waranties as of the Agreement Date, or if Seller becomes aware
of the occurence after the Agreement Date of any fact or condition that would (except as
expressly contemplated by this Agreement) cause or constitute a breach of any such
representation or warranty had such representation or warranty been made as of the time of
occurence or discovery of such fact or condition. Durg the Interim Perod, Seller wil
promptly notify Buyer of the occurence of any breach of any covenant of the Seller in ths
Agreement or of the occurence of any event that may make the satisfaction of the conditions in
ARTICLE VII and ARTICLE VII of this Agreement impossible or unikely. Notwithstanding
anyting to the contrary, no such notice or disclosure shall be deemed to amend or supplement
the Schedules or to prevent or cure any misrepresentation or breach.
5.7 Exclusivitv. Until such time, if any, as this Agreement is terminated in
accordance with its terms, Seller wil not directly or indirectly, through any Representative or
otherwise, enter into or agree to enter into any transaction with respect to, or solicit or entertain
offers from, negotiate with or in any maner encourage, discuss, accept or consider any proposal
of any other person relating to, the acquisition of the Purchased Assets, in whole or in par.
Seller shall promptly notify Buyer of any such inquiry or proposal.
5.8 Best Efforts. Durng the Interi Period, Seller shall use its best efforts to cause
the conditions in ARTICLE VII and ARTICLE VIII to be satisfied.
ARTICLE VI.
ADDITIONAL AGREEMENTS
6.1 Expenses. Each Part shall pay its own, fees, costs and expenses (including fees
and expenses of legal counsel, investment baners, brokers or other representatives and
consultants and appraisal fees and expenses) incurred in connection with or related to the sales
process, the negotiation of this Agreement, the Seller Related Documents, and the Buyer Related
Documents, the performance of its obligations hereunder and thereunder, and the consumation
of the Contemplated Transaction, including all fees, costs and expenses arsing from any breach
of any provision of ths Agreement; provided however, that if (a) Seller breaches any provision
of this Agreement, whether or not the Contemplated Transaction is consumated or (b) before
May 1, 2010, or such later date as may be agreed to by the Parties pursuant to Section 9.1(e),
Seller consumates a transaction described in Section 5.7 (Exclusivity) with a Person other than
Buyer, in addition to any other rights and remedies that Buyer may have, Seller shall pay the
fees, costs and expenses of Buyer and its Affliates incured in connection with the due diligence
review, negotiation, documentation, pursuit and closing of the Contemplated Transaction as well
as all fees, costs and expenses arsing from any such breach.
6.2 Risk of Loss. Dug the Interim Period, all risk of loss or damage to the propert
included in the Purchased Assets shall be borne by Seller.
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6.3 Delivery and Installation of Puchased Assets. Seller shall perform all work
necessar to disconnect and transport the Capacitor Ban and Related Equipment from Seller's
substation and install and reconnect the Capacitor Ban and Related Equipment at such location
as Buyer may direct, all in accordance with the terms of the Populus Constrction Agreement,
dated as of March 2,2009, by and between Buyer and Seller.
ARTICLE VII.
CONDITIONS TO OBLIGATIONS OF BUYER
Buyer's obligation to purchase the Puchased Assets and to take the other actions
required to be taken by Buyer at the Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may be waived in writing only by
Buyer, in whole or in par):
7.1 Accuracy of Representations. All of Seller's representations and waranties in
this Agreement (considered collectively), and each of these representations and warranties
(considered individually), shall be tre and correct as of the Agreement Date, and shall be tre
and correct as of the Closing Date as if made on the Closing Date.
7.2 Seller's Performance. All of the covenants and obligations that Seller is required
to perform or to comply with pursuant to ths Agreement at or prior to the Closing (considered
collectively), and each of the covenants and obligations (considered individually), shall have
been duly performed and complied with in all material respects.
7.3 Deliveries. Each document required to be delivered pursuant to Section 2.6 shall
have been delivered.
7.4 Consents and Approvals. Each of the Required Consents shall have been
obtained and be in full force and effect and such actions as Buyer's counsel may reasonably
require wil have been taken in connection therewith.
7.5 Readiness of Purchased Assets. Buyer shall be satisfied that all Purchased Assets
which are tangible propert are available and ready for pick-up and transport. Buyer shall have
the right to enter the site for the purpose of verification of Purchased Assets readiness.
7.6 Approvals of Governental Authorities. All Required Consents of Governental
Authorities shall have been obtained with such terms and conditions as shall have been imposed
by the Governental Authority issuing such Consents, and such terms or conditions in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
7.7 No Prohibition. Neither the consumation nor the performance of the
Contemplated Transaction wil, directly or indirectly (with or without notice or lapse of time),
materially contravene, or conflct with, or result in a material violation of, or cause Buyer or any
Person affliated with Buyer to suffer any materal adverse consequence under, (a) any applicable
14
Law or Order, or (b) any Law or Order that has been published, introduced, or otherwise
proposed by or before any Governental Authority.
7.8 No Proceedings. Buyer wil have received evidence reasonably acceptable to it
that no Litigation is pending or theatened (i) involving any challenge to, or seeking damages or
other relief in connection with the Purchased Assets or the Contemplated Transaction, (ii) that
may have the effect of preventing, delaying, makng ilegal, or otherwise intedering with the
Contemplated Transaction, (iii) seeking to prohibit direct or indirect ownership or operation by
Buyer of the Purchased Assets, or to compel Buyer or any of its Affiiates to dispose of, or to
hold separately, or to make any change in any portion of the business or assets of Buyer or its
Affliates as a result of the Contemplated Transaction, (iv) seekig to require direct or indirect
transfer or sale by Buyer of, or to impose material limitations on the ability of Buyer to exercise
full rights of ownership of, any of the Purchased Assets or (v) imposing or seekig to impose
material damages or sanctions directly arsing out of the Contemplated Transaction on Buyer or
Seller or any of their respective offcers or directors.
7.9 No Material Adverse Effect. There shall have been no change in or event relating
to Seller that has had or that Buyer expects to have a Material Adverse Effect or a material
adverse effect on the Contemplated Transaction.
ARTICLE VIII.
CONDITIONS TO OBLIGATIONS OF SELLER
Seller's obligation to sell the Purchased Assets and to take the other actions required to
be taken by Seller at the Closing is subject to the satisfaction, at or prior to the Closing, of each
of the following conditions (any of which may be waived in writing only by Seller, in whole or
in par):
8.1 Accuracy of Representations. All of Buyer's representations and waranties in
this Agreement (considered collectively), and each of these representations and waranties
(considered individually), shall be tre and correct as of the date of ths Agreement, and shall be
tre and correct as of the Closing Date as if made on the Closing Date.
8.2 Buyer's Performance.
(a) All of the covenants and obligations that Buyer is required to pedorm or to
comply with pursuant to this Agreement at or prior to the Closing (considered collectively), and
each of these covenants and obligations (considered individually), shall have been dily
pedormed and complied with in all material respects.
(b)
delivered.
Each document required to be delivered pursuant to Section 2.7 shall have been
15
8.3 No Injunction. There shall not be in effect any Law or any injunction or other
Order that (a) prohibits the sale of the Purchased Assets by Seller to Buyer and (b) has been
adopted or issued, or has otherwise become effective, since the date of this Agreement.
ARTICLE IX.
TERMINATION
9.1 Termination. This Agreement may be terminated by wrtten notice at any time
prior to the Closing Date only in one of the following ways:
(a) By the mutual written consent of Buyer and Seller.
(b) By Buyer if a material breach of any provision of this Agreement has been
commtted by Seller or (ii) by Seller if a material breach of any provision of ths Agreement has
been committed by Buyer.
(c) By Buyer if any of the conditions in ARTICLE VII has not been satisfied as of the
Closing Date or if satisfaction of such a condition is or becomes impossible (other than through
Buyer's breach of ths Agreement) or (ii) by Seller if any of the conditions in ARTICLE VIII has
not been satisfied as of the Closing Date or if satisfaction of such a condition is or becomes
impossible (other than though Seller's breach of this Agreement).
(d) By Buyer or Seller if Closing has not occurred (other than through the failure of
any par seeking to terminate this Agreement to comply fully with its obligations under this
Agreement) on or before May 1, 2010, or such later date as the Paries may agree in writing.
9.2 Effect of Termnation. If ths Agreement is termnated pursuant to Section 9.1,
neither Par shall have any continuing obligation hereunder, except that (a) Sections 6.1
(Expenses), ARTICLE XII (General Provisions), and ths Section wil surive any termination
hereof and (b) if this Agreement is terminated due to a breach of a Pary, then the other Par
shall retain full rights to pursue all legal remedies notwithstanding termination.
ARTICLEX.
SURVIVAL AND INDEMNIFICATION
10.1 SurivaL. All representations, warranties, covenants, and obligations in ths
Agreement, the Schedules, the certificates delivered pursuant to Sections 2.6 and 2.7, and any
other certificate or document delivered pursuant to this Agreement wil survive the Closing. The
right to indemnification, payment of Damages or other remedy based on such representations,
waranties, covenants, and obligations wil not be affected by any investigation conducted with
respect to, or any knowledge acquired (or capable of being acquired) at any time, whether before
or after the execution and delivery of this Agreement or the Closing Date, with respect to the
accuracy or inaccuracy of or compliance with, any such representation, waranty, covenant, or
obligation. The waiver of any condition based on the accuracy of any representation or
waranty, or on the performance of or compliance with any covenant or obligation, wil not
affect the right to indemnfication, payment of Damages, or other remedy based on such
representations, warranties, covenants, and obligations.
16
10.2 Indemnfication.
(a) From and after the Closing, Seller hereby agrees to indemnfy, defend and hold
haress Buyer and its Representatives and Affliates from and against any and all Damages,
whether or not involving a thid-pary Claim, resulting from or arsing out of or in connection
with:
i. any breach of a representation or warranty made by Seller in this
Agreement or any Seller Related Document;
ii. the breach by Seller of, or default in the pedormance by Seller of, any
covenant, agreement or obligation to be performed by Seller pursuant to ths Agreement or in
any Seller Related Document;
iii. any Environmental Liabilities that accrue, arise or occur prior to the
Closing; and
iv. Liabilties which arise out of or are related to Seller's ownership of the
Purchased Assets prior to Closing;
(b) From and after the Closing, Buyer hereby agrees to indemnfy, defend and hold
haress Seller and its Representatives and Affiiates from and against any and all Damages,
whether or not involving a thrd-pary Claim, resulting from or arising out of or in connection
with:
i. any breach of a representation or waranty made by Buyer in this
Agreement or any Buyer Related Document; and
ii. the breach by Buyer of, or default in the pedormance by Buyer of, any
covenant, agreement or obligation to be pedormed by Buyer pursuant to this Agreement or in
any Buyer Related Document; and
10.3 Time Limtations.
(a) If the Closing occurs, Seller wil have Liability (for indemfication or otherwise)
with respect to any breach of a representation or waranty in ARTICLE III (other than those in
Sections 2.10,3.3 and 3.10, as to which a claim may be made at any time), only if on or before
the second anversar of the Closing Date, Buyer notifies Seller of a clai specifyng the
factual basis of the claim in reasonable detail to the extent then known by Buyer.
(b) If the Closing occurs, Buyer wil have Liability (for indemnfication or otherise)
with respect to any breach of a representation or waranty in ARTICLE N only if on or before
the second anversar of the Closing Date, Seller notifies Buyer of a claim specifyg the
factual basis of the claim in reasonable detail to the extent then known by Seller.
lOA Procedure for Indemnfication - Third-Pary Claims.
17
(a) If any Pary shall claim indemnfication hereunder arsing from any Claim of a
third pary, the Pary seeking indemnfication (the "Indemnified Party") shall notify in writing
the Par from which indemfication is sought (the "Indemnifying Party") of the basis for such
Claim, setting forth the natue of the Claim in reasonable detaiL. The failure of the Indemnfied
Par to so notify the Indemnifyig Party shall not relieve the Indemnifyg Pary of any
indemnification obligation hereunder except to the extent that the defense of such Claim is
materially prejudiced by the failure to give such notice.
(b) If any proceedig is brought by a thd par against an Indemnfied Par and the
Indemnfied Pary gives notice to the Indemnfyng Par pursuant to Section 10.4(a), the
Indemfyig Pary shall be entitled to paricipate in such proceeding and, to the extent that it
wishes, to assume the defense of such proceeding, if (i) the Indemnfyng Part provides written
notice to the Indemnfied Par that the Indemnfyg Par intends to undertake such defense,
(ii) the Indemnfyng Par conducts the defense of the thid-pary Claim actively and diligently
with counsel reasonably satisfactory to the Indemnfied Pary and (iii) if the Indemnfying Pary
is a pary to the proceeding, the Indemnfying Par has not determined in good faith that joint
representation would be inappropriate because of a confict in interest. The Indemnfied Pary
shall, in its sole discretion, have the right to employ separate counel (who may be selected by
the Indemnified Pary in its sole discretion) in any such action and to paricipate in the defense
thereof, and the fees and expenses of such counsel shall be paid by such Indemnfied Pary. The
Indemnfied Party shall fully cooperate with the Indemfyig Par and its counsel in the
defense or compromise of such Claim. If the Indemnfyg Part assumes the defense of a
proceeding, no compromise or settlement of such Claims may be effected by the Indemnfying
Par without the Indemnfied Pary's consent uness (A) there is no finding or admission of any
violation of Law or any violation of the rights of any Person and no effect on any other Claims
that may be made against the Indemnfied Pary and (B) the sole relief provided is monetar
damages that are paid in full by the Indemnfying Par.
(c) If (i) the Indemnfied Par gives notice to the Indemnfyig Pary of the
commencement of any third-pary legal proceeding and the Indemnfyig Pary does not, within
ten (10) days after the Indemnfied Party's notice is given, give notice to the Indemnfied Party
of the Indemnfying Par's election to assume the defense of such legal proceeding, (ii) any of
the conditions set fort in clauses (i) through (iii) of Section 1 O.4(b) above become unsatisfied or
(iii) an Indemnified Pary determines in good faith that there is a reasonable probability that a
legal proceeding may adversely affect it other than as a result of monetar damages for which it
would be entitled to indemnification from the Indemnfyig Party under ths Agreement, the
Indemnfied Pary shall (upon notice to the Indemnfyg Pary) have the right to undertake the
defense, compromise or settlement of such Claim; provided that the Indemnifyig Part shall
reimburse the Indemnified Pary for the Indemnfied Party's costs of defending against the thid-
pary Claim (including reasonable attorneys' fees and expenses) and the Indemnfying Pary shall
remain responsible for any indemnfiable amounts arsing from or related to such thd-pary
Claim to the fullest extent provided in this ARTICLE X. The Indemnfyig Party may elect to
paricipate in such legal proceedigs, negotiations or defense at any time at its own expense.
18
ARTICLE XI.
DISPUTE RESOLUTION
Except as may be expressly provided elsewhere in ths Agreement to the contrar, any
dispute arsing out of or in connection with this Agreement or its performance, including but not
limited to its validity, constrction, or enforcement shall, to the extent possible, be resolved
amicably by negotiation between the Parties represented by the signatories to ths Agreement or
their assigned agent or successor, prior to either par intiating legal action. Both Buyer and
Seller agree to make good faith efforts to resolve any dispute under this Agreement as provided
in this Aricle XI. If a Part believes a dispute exists that is subject to ths Aricle XI, the Pary
shall provide the other Pary with notice of such dispute. If the Parties have failed to resolve a
dispute under this Aricle XI with thiy (30) days of such notice of dispute, either Pary may
seek any remedy that it may have in law or equity. Negotiations and meetings conducted
pursuant to this Aricle XI shall be confidential and shall be treated as compromise and
settlement discussions not admissible in any legal proceeding involving ths Agreement, in
accordance with state and federal Rules of Evidence.
ARTICLE XII.
GENERAL PROVISIONS
12.1 Notices. All notices and other communcations hereunder shall be in writing and
shall be deemed given if delivered personally or by commercial messenger or courer service, or
mailed by registered or certified mail (retu receipt requested) or sent via facsimile (with
acknowledgment of complete transmission) to the Paries at the following addresses (or at such
other address for a Pary as shall be specified by like notice); provided, however, that notices
sent by mail will not be deemed given until received:
If to Buyer, to:
PacifiCoip
825 NE Multnomah Street, Suite 1600
Portland, Oregon 97232
Attention: John Cupparo, Vice President, Transmission
Telephone No.: 503-813-7017
Email: John.Cupparo~PacifiCoip.com
If to Seller, to:
Idaho Power
P.O. Box 70
1221 West Idaho
Boise, Idaho 83707
Attention: Lisa A. Grow, Vice President, Engineerig and
Operations
Telephone No.: 208-388-2243
Email: LGrow~ldahopower.com
19
12.2 Disclosure Schedules. Inormation set fort in the Schedules to this Agreement
specifically refers to the section of this Agreement to which such inormation is responsive and
such information shall not be deemed to have been disclosed with respect to any other article or
section of this Agreement or for any other purpose, unless specifically cross-referenced to
another schedule. The Schedules shall not var, change or alter the language of the
representations and waranties contained in this Agreement and, to the extent the language in the
Schedules does not conform in every respect to the language of such representations and
warranties, such language shall be disregarded and be of no force or effect. The right to
indemnification or other remedy based on any representation, waranty, covenant or obligation
herein or in any document delivered hereunder wil not be affected by any investigation
conducted with respect to or any knowledge acquired (or capable of being acquired) at any time,
whether before, at or after the execution and delivery of ths Agreement or the Closing Date,
with respect to the accuracy or inaccuracy of or compliance with any such representation,
waranty, covenant or obligation.
12.3 Entire Agreement; No Thid Par Beneficiares. Ths Agreement, the Exhibits,
Schedules, and other documents among the Paries referenced herein (a) constitute the entire
agreement by and among the Parties with respect to the subject matter hereof and supersede all
prior agreements and understandings both written and oral, among the Paries with respect to the
subject matter hereof and (b) shall be binding upon and inure solely to the benefit of each Party,
and nothng in herein or therein, express or implied, is intended to or shall confer upon any other
person any other right, benefit or remedy of any natue whatsoever under or by reason of this
Agreement. The exhbits and schedules attached to ths Agreement are hereby incorporated into
and form a par of ths Agreement. If any term or condition, express or implied, of any exhibit or
schedule conflcts or is at variance with any term or condition in the body of ths Agreement, the
term or condition in the body of this Agreement shall control and prevaiL.
12.4 Amendment. No amendment or varation of the provisions of this Agreement
shall be binding upon the Paries uness evidenced in a writing which indicates that such writing
is intended to amend the terms of this Agreement and is signed by duly authorized offcers of
each Pary. The Paries agree that this Agreement shall not be amended in any maner by any
course of dealing among the Paries.
12.5 Assignent. Neither Part may assign any of its rights or duties hereunder
without the prior written consent of the other Pary; provided, however, that Buyer may, without
consent, assign any or all of its rights under ths Agreement to any Affiiate of Buyer and may
designate any such Affliate to acquire any of the Purchased Assets.
12.6 Severability. In the event that any provision of this Agreement or the application
thereof becomes or is declared by a court of competent jurisdiction to be ilegal, void or
unenforceable, the remainder of ths Agreement wil continue in full force and effect and the
application of such provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the Parties. The Paries further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision that wil
achieve, to the extent possible, the economic, business and other puroses of such void or
unenforceable provision.
20
12.7 Governng Law. Ths Agreement shall be governed by and constred in
accordance with the laws of the State of New York, regardless of the laws that might otherwise
govern under applicable principles of conficts of laws thereof. Each Pary irevocably consents
to the exclusive jursdiction and venue of any cour withi State of New York, in connection
with any matter based upon or arising out of ths Agreement or the matters contemplated herein,
agrees that process may be served upon them in any maner authorized by the laws of the State
of New York for such persons and waives and covenants not to assert or plead any objection
which they might otherwise have to such jursdiction, venue or process.
12.8 Conditions. To the extent that this Agreement provides that the rights of a Pary
are conditioned upon satisfaction of conditions, such conditions wil be deemed satisfied if the
Par responsible therefor has taken the steps necessar to act and is prepared to perform and to
tender documents required to be performed or tendered by such Pary, it being understood that
actual performance or tendering of documents shall not be required if the other Pary has not
satisfied its obligations and is not wiling or able to perform or other conditions have not been
met.
12.9 Remedies. The Paries recognize that, in the event that a Pary should refuse to
perform any provisions of this Agreement, monetar damages alone wil not be adequate. The
non-defaulting Party shall therefore be entitled, in addition to any other remedies which may be
available, including money damages, to obtain specific performance of the terms of this
Agreement. In the event of any action to enforce this Agreement specifically, the defaulting
Par hereby waives the defense that there is an adequate remedy at law. No remedy conferred
by any specific provision of this Agreement (including termination under Section 9.1) is intended
to be exclusive of any other remedy, and each and every remedy shall be cumulative and shall be
in addition to every other remedy given hereunder or now or hereafter existing at law or in equity
or by statute or otherwise. The election of anyone or more remedies by a Pary shall not
constitute a waiver of the right to pursue other available remedies at any time.
12.10 No Waiver. No delay or forbearance by a Pary in exercising any right or remedy
accruing to such Pary upon the occurence of any breach or default by the other Pary under ths
Agreement shall impair any such right or remedy of such Par, nor shall it be constred to be a
waiver of any such breach or default, or an acquiescence therein, or of any similar breach or
default thereafter occurng, nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurg. Any waiver on the part
of either Pary of any provision or condition of this Agreement must be in writing signed by the
Pary to be bound by such waiver and shall be effective only to the extent specifically set fort in
such writing and shall not limit or affect any rights with respect to any other or futue
circumstance.
12.11 Counterpars; Facsimles. Ths Agreement may be executed in one or more
counterpars, each of which shall be an original, and all of which together shall constitute one
agreement. Facsimile transmission of any signed original document, and retransmission of any
signed facsimile transmission, shall be the same as delivery of an original. At the request of
either Pary, the Paries wil confirm facsimile transmitted signatues by signig an original
document.
21
***
(Signature lines are on the next page.)
22
IN WITNESS WHREOF, this Agreement has been duly executed and delivered by the
duly authonzed offcer of each Pary as of the Agreement Date.
SELLER:
IDAHO POWER COMPAN
By: I;
Name: . a A. Grow
Title: ice President, Engineerig and Operations
BUYR:
PACIFICORP
23
EXHffIT A
DEFINED TERMS
"Accumulated Provision for Depreciation and Amortiation" means the net
accumulated credit balance arsing from provisions for depreciation or amortization of assets.
The net balance reflects curent and prior credits less charges.
"Affliate" means any Person that directly, or indirectly though one or more
intermediaries, controls, is controlled by or is under common control with the Person specified.
For purposes of ths defintion, control of a Person means the power, directly or indirectly, to
direct or cause the direction of the management and policies of such Person whether though
ownership of voting securities or ownership interests, by contract or otherwise, and specifically
with respect to a corporation, parership or limted liabilty company, means direct or indirect
ownership of more than 50% of the voting securities in such corporation or of the voting interests
in a parnership or limited liabilty company.
"Agreement" means this Asset Purchase Agreement, as amended in accordance with its
terms.
"Agreement Date" means the date set forth in the first paragraph of this Agreement.
"Buyer" is defined in the first paragraph of ths Agreement.
"Buyer's Advisors" is defined in Section 5.5 hereof.
"Buyer Related Document" means any certificate, agreement or other document to be
delivered by Buyer in connection with ths Agreement or the Contemplated Transaction.
"Capacitor Bank" means the Goshen Capacitor Bank as fuher defined in Schedule 2.1
hereof.
"Claim" means any demand, claim, action, investigation, legal proceeding (whether at
law or in equity) or arbitration.
"Closing" is defined in Section 2.5 hereof.
"Closing Date" is defined in Section 2.5 hereof.
"Contemplated Transaction" is defined in Section 2.5 hereof.
"Contract" means any agreement, contract, lease obligation, promise, or undertakng
(whether written or oral and whether express or implied) that is legally binding.
"Damages" means the amount of, any loss, liability, claim, damage (including incidental
and consequential damages), expense (including costs of investigation and defense and
reasonable attorneys' fees) or dimution of value, whether or not involving a thd-pary claim.
24
"Encumbrance" means any charge, claim, communty property interest, condition,
equitable interest, lien, option, pledge, securty interest, right of first refusal, or restrction of any
kind, including any restriction on use, voting, trnsfer, receipt of income, or exercise of any other
attbute of ownership.
"Environmental Claim" means any Claim arising out of or related to any violation of
Environmental Law, or in respect of any Environmental Conditions or Hazardous Materals.
"Environmental Law" means any Law relating to (i) land use and environmental
matters, (ii) the control of any pollutant, or protection of the air, water, or land, (iii) solid,
gaseous or liquid waste generation, handling, treatment, storage, disposal or tranportation, (iv)
exposure to hazardous, toxic or other harful substances, and (v) the protection and
enhancement of the environment.
"Environmental Liabilties" mean all Liabilities with respect to the Purchased Assets,
including settlements, judgments, costs and expenses, including reasonable attorney's fees,
whether based on common law or Environmental Laws.
"FERC" means the Federal Energy Regulatory Commission, or its successor.
"Good Operating Practices" means the practices, methods and acts generally engaged
in or approved by a significant portion of the independent electrc power industr in the WECC
for simlarly situated facilities in the WECC durng a paricular time period, or any of such
practices, methods, and acts, which, in the exercise of reasonable judgment in light of the facts
known or that reasonably should be known at the time a decision is made, would be expected to
accomplish the desired result in a manner consistent with applicable Law, reliability, safety,
environmental protection, economy and expedition, and takig into consideration the
requirements of this Agreement, the Transferred Contracts and the other Contracts affecting the
operation of the Purchased Assets. Good Operating Practices are not intended to be limited to
the optimum practices, methods or acts, to the exclusion of all others, but rather to include a
spectru of possible practices, methods or acts generally acceptable in the region durg the
relevant period in light of the circumstances.
"Governmental Authorization" means any approval, consent, license, permt, waiver,
franchise, ruling, certification, exemption, filing, varance, order, judgment, decree or other
authorization issued, granted, given, or otherwise made available by or under the authority of any
Governental Authority or pursuant to any Law.
"Governmental Authority" means any federal, provincial, state, county, municipal or
local governent and any political subdivision thereof, or any other governental, quasi-
governental, executive, legislative, administrative, regulatory, judicial, public or statutory
deparent, body, instrmentality, agency, minstr, cour, commssion, bureau, board, or other
governental authority.
"Hazardous Material" means any chemicals, materials, substances, or items in any
form, whether solid, liquid, gaseous, semisolid, or any combination thereof, whether waste
materials, raw materials, chemicals, finished products, by-products, or any other materials or
25
aricles, which are listed or regulated as hazardous, toxic or dangerous or as waste or a
contaminant, or are otherwise listed or regulated, or for which liability or standards of care are
imposed, under any Environmental Law, including petroleum products, asbestos, PCBs, coal
combustion by-products, urea formaldehyde foam insulation, lead-containig paints or coatings,
and any substances included in the defintion of "hazardous debris," "hazardous substances,"
"hazardous materials," "hazardous wastes," "toxic substances," "pollutants," "contaminants" or
words of similar import, under any Envionmental Law.
"Indemnified Party" is defmed in Section IO.4(a) hereof.
"Indemnifying Part" is defined in Section IO.4(a) hereof.
"Intellectual Property" means the following intellectual propert rights, both statutory
and common law rights, if applicable: (a) copyrghts, and registrations and applications for
registration thereof, (b) trademarks, trademark rights, service marks, service mark rights, trade
names, trade name rights, slogans, domai names, logos and trade dress, and registrations and
applications for registrations thereof, (c) patents, as well as any reissued and reexamined patents
and extensions corresponding to the patents, and any patent rights and patent applications, as
well as any related continuation, continuation in par and divisional applications and patents
issuing therefrom and (d) trade secrets and confidential information, including ideas, designs,
concepts, inventions, compilations of information, methods, technques, procedures, processes
and other know-how, whether or not patentable.
"Interim Period" is defined in Section 5.I(a) hereof.
"Law" means any federal, state, local, muncipal, foreign, international, multinational, or
other administrative order, constitution, law, ordinance, principle of common law, regulation,
statute, or treaty.
"Liabilty" means any debt, liability, obligation or commitment of any kind, character or
description, whether known or unown, absolute or contingent, accrued or unaccrued, disputed
or undisputed, liquidated or uniquidated, secured or unsecured, joint or several, due or to
become due, vested or unvested, executory, determined, determnable or otherwise.
"Lien" means any mortgage; deed of trst; pledge; security interest; adverse possessory
right; mechanc's, materialmen's or other lien; covenant, condition or restrction; charge or
assessment; lease; easement; license; purchase option; right of first refusal; or any other matter
affecting title of any natue whatsoever.
"Material Adverse Effect" means a material adverse effect upon the condition of the
Purchased Assets.
"Order" means any award, decision, injunction, judgment, order, ruling, subpoena, or
verdict entered, issued, made, or rendered by any cour, administrative agency, or other
Governental Authority or by any arbitrator
26
"Organizational Documents" means (a) the aricles or certificate of incorporation and
the bylaws of a corporation; (b) the parership agreement and any statement of parership of a
general parership; (c) the limted parership agreement and the certificate of limited
parnership of a limited parership; (d) any charer or similar document adopted or fied in
connection with the creation, formation, or organzation of a Person; and (e) any amendment to
any of the foregoing.
"Original Cost" means the cost of utility propert at the time such propert was brought
into service.
"Party" and "Parties" are defined in the first paragraph of this Agreement.
"Person" whether or not capitalized, means any individual, corporation (including any
non-profit corporation), general or limited parership, limted liability company, joint ventue,
estate, trst, association, organzation, labor unon, or other entity or Governental Authority.
"Proceeding" means any action, arbitration, audit, hearg, investigation, litigation, or
suit (whether civil, criminal, adminstrative, investigative, or informal) commenced, brought,
conducted, or heard by or before, or otherwise involving, any Governental Authority or
arbitrator.
"Purchase Price" is defined in Section 2.3.
"Purchased Assets" means all of the right, title and interest in and to the assets, tangible
or intangible, including the following: (i) the Capacitor Ban, including any control panels or
other appurtenant assets for its installation and operation; (ii) all Waranty Rights; (iii) all
Transferred Contracts; (iv) all Transferred Intellectual Property; (v) all Related Inventories; (vi)
all Related Equipment; (vii) all Records; and (viii) all Thid Pary Claims associated with the
Purchased Assets.
"Records" means all fmancial records and all records of repair work or work in
progress, spare pars, materials and supplies in inventory records owned and held by Seller and
principally relating to the Capacitor Ban on the Closing Date.
"Related Equipment" means all fixtues, and equipment owned, used or held for use
primarly in connection with the Capacitor Ban, including all handling equipment, machiery,
tools, supplies, computer hardware, appliances, vehicles and rollng stock.
"Related Inventories" means all inventories of supplies, materials and spare pars owned
and held for use by Seller principally in connection with the Capacitor Ban on the Closing Date.
"Release" means any release, spil, emission, migration, leakg, pumping, injection,
deposit, disposal or discharge of any Hazardous Materials into the environment, to the extent
prohibited under applicable Environmental Laws.
27
"Representative" means respect to a paricular Person, any director, offcer, employee,
agent, consultant, advisor, accountant, fmancial advisor, legal counelor other representative of
that Person.
"Required Consent" means each approval, consent, ratification, waiver, or other
authorization (including any Governental Authorization) required to be obtained in order to
consumate the Contemplated Transaction in accordance with this Agreement.
"Required Notice" means each notice required to be given (including to any
Governental Authority) in connection with the execution and delivery of this Agreement and
the consumation and performance of the Contemplated Traaction in accordance with this
Agreement.
"Schedules" means the disclosure schedules to be delivered by Seller to Buyer
concurently with the execution and delivery of ths Agreement.
"Seller Related Document" means any certificate, agreement or other document
delivered by Seller in connection with this Agreement or the Contemplated Transaction.
"Seller Required Consent" means each Required Consent required to be obtained by
Seller in connection with the execution and delivery of ths Agreement and the consummation
and performance of the Contemplated Tranaction in accordance with this Agreement.
"Seller" is defined in the first paragraph of ths Agreement.
"Tax Return" means any retu (including any information retu), report, statement,
schedule, notice, form, or other document or information filed with or submitted to, or required
to be fied with or submitted to, any Governental Authority in connection with the
determnation, assessment, collection, or payment of any Tax or in connection with the
administration, implementation, or enforcement of or compliance with any Law relating to any
Tax.
"Taxes" means any and all taxes, fees, witholdings, levies, duties, tarffs, imposts, and
other charges of any kind (together with any and all interest, penalties, additions to tax and
additional amounts imposed with respect thereto) imposed by any governent or taxing
authority (foreign or domestic), including taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, GST, property, sales, use, capital stock,
payroll, employment, social security, workers' compenation, unemployment compensation, or
net worth, taxes or other charges in the natue of excise, witholding, ad valorem, stamp,
transfer, value added or gains taxes, license, registration and documentation fees, and customs
duties, tarffs and similar charges.
"Third Party Claims" means all rights, privileges, claims, causes of action and options
against any third parties (including indemnfication, contrbution and insurance claims) relating
to any Purchased Assets.
28
"Transferred Contracts" means only such Contracts expressly identified on Schedule
2.1 of this Agreement as "Transferred Contracts", subject to receipt of necessar consents and
approvals.
"Transferred Intellectual Property" means the Intellectual Property identified on
Schedule 2.1 as "Transferred Intellectual Propert," subject to receipt of necessary consents and
approvals, and any plant drawings, equipment performance data, design criteria or maintenance
records collected by the Seller's data collection or other information technology systems or
softare and relating to the Purchased Assets, whether or not identified on Schedule 2.1 as
"Transferred Intellectual Property."
"Transfer Taxes" means all transfer, sales, transaction privilege, use, goods and
services, value added, documentar, stamp duty, gross receipts, excise, transfer and conveyance
Taxes and other similar Taxes, duties, fees or charges.
"Warranty Rights" means all waranties, express and implied, against manufactuers or
vendors relating to the Purchased Assets, to the extent that such waranties are unexpired as of
the Closing Date and are transferable, including those warranties set forth on Schedule 2.1.
29
SCHEDULE 2.1
PURCHASED ASSETS
1. The Goshen Capacitor Bank.
The Goshen series Capacitor ban is a 345kV, 3-phase, 60 Hz, 2 equal segment,
outdoor series capacitor ban. The ban provides up to approximately 45% (57
Ohms) line reactance compensation for the 225.88-mile, 345kV transmission line
between PacifiCorp's Goshen Transmission Substation and the Jim Bridger
Power Plant in Point of Rocks, Wyoming. It includes (4) control cabinets in a
control building, a battery ban, three (3) platforms that house the Series
Capacitors, MOV's OCT's, and reactors. There are two independent pole bypass
circuit breakers, serial numbers 8666375A, 8666375B, 8666375C and 8666376A,
8666376B, 8666376C that are par of the package. It also includes two (2)
combination air brake/groundig switches and one (1) bypass switch.
2. Warranty Rights.
None.
3. Transferred Contracts.
None.
4. Transferred Intellectual Propert.
None.
5. Related Equipment
None.
6. Related Inventories
Spare Parts:
One fiber optic column
One set of insulators
One parial set of MACH 2 circuit boards
One close and trp coil for bypass breaker
One set of gaskets for bypass breaker
One drve unt for bypass breaker
One auxiliar contacts for bypass breaker
One main contacts for bypass breaker
Tools:
One capacitor lifting device
One relay test device, type Sverker 750
One laptop
7. Records
Original set of manuals that include:
Installation Documentation 1: Main Drawings
Installation Documentation 2: Equipment & Cable Tables
Manual AI: Functional System Description, Operation, Plant Overview
and Preventative Maintenance
Manual A2: Functional System Description, Operation, Plant Overview
and Preventative Maintenance
Manual B 1 : Equipment Description - Control and Protection system
Hardware
Manual B2: Equipment Description - Components and Accessories
Manual B3: Equipment Description - Main Circuit Equipment
Manual B4: Equipment Description - Main Circuit Equipment
Manual C 1: Plant Documents, Mechancal Station Design and Civil
Drawings
Manual D 1: Technical Reports
Manual EI: Test Records
Appendix AI: Softare Overview Documents
Appendix A2: Softare Overview Documents
Appendix A3: Softare Overview Documents
IPC maintenance records
CD containing IPC drawings
8. Third Party Claims
None.
SCHEDULE 3.3
ENCUMBRACES
Idaho Power Company's Mortgage and Deed of Trust, dated as of October 1, 1937, and
indentues supplemental thereto, made to Deutsche Ban Trust Company Americas,
formerly known as Baners Trust Company, and Stanley Burg, as Trustees.
SCHEDULE 3.9
INSURNCE
Property "All Risk" Program including Boiler & Machinery
Carrier:
Policy Term:
Peris:
IDACORP and any subsidiar, and IDACORP's interest in any parnership or joint venture in
which IDACORP has management control or ownership as now constituted or hereafter is
acquired, as the respective interest of each may appear.
Factory Mutual Insurance Company Policy #UW324
May 1, 2009 to May 1,2010
All Risks of direct physical loss or damage including the perils of earthquake
and flood, including boiler and machinery, and vehicle physical damage.
Power Generation GE 112008
$ 2,000,000,000 Policy Limit
The Company will pay up to the following sublimits of liability in anyone occurence.
These sub limits are par of, and do not serve to increase, the limits of liability above
or the aggregate limits ofliability below:
$ 200,000,000 Annual aggregate Earthquake
$ 200,000,000 Annual aggregate Flood
$ 200,000,000 Annual aggregate Dams and Dikes Except;
$ 1,000,000 Combined all coverage's Including CT's, except:
Replacement cost, except on Transformers 25 years or older, or have not
been completely rewound within the past 25 years and mobile equipment, ACV
Named Insured:
Policy Form:
Limits of Liabilty:
Sub limits of Liabilty:
Deductibles:
Valuation:
SCHEDULE 3.l4(b)
ENVIRONMENTAL MATTERS
None.
SCHEDULE 5.1 (a)
REQUIRD CONSENTS
PacifiCorp Idaho Power Company
Federal Energy Regulatory Yes, by vire of being a Not required.
Commssion Section 203 purchaser of jursdictional
assets.
Federal Energy Regulatory Yes, for the purpose of Yes, for the purpose of
Commssion Section 205 amending certain existing amending certain existing
agreements.agreements.
Californa Public Utilities Not required.Not required.
Commission
Idaho Public Utilities Not required.Yes
Commission
Oregon Public Utility Yes, pursuant to ORS Yes, pursuant to ORS
Commission 757.485(1).757.480(a).
Utah Public Service Not required Not required
Commission
Washington Utilities and Not required Not required
Transportation Commission
Wyoming Public Service Not required Not required
Commission