20140814Notice of Affiliate Transaction.pdf

YPacl F I ConP nr o r :! J. il
August 14,2014
VA OVERNIGHT DELIVERY
Idaho Public Utilities Commission
472West Washington
Boise,ID 83702-5983
Attention:Jean D. Jewell
Commission Secretary
PacifiCorp Notice of Affiliate Transaction
Case No. PAC-E-05-8
Dear Ms. Jewell:
This letter will serve as notice pursuant to Commitment I l7(2), incorporated in the
Idaho Public Utilities Commission Order No. 29973 issued February 13,2006, as supplemented
by Order No. 29998 March 14, 2006, in the above-referenced proceeding, approving the
acquisition of PacifiCorp by MidAmerican Energy Holdings Company (MEHC)I, of an affiliate
interest transaction with BNSF Railway Company (BNSF) for a license allowing PacifiCorp to
relocate certain distribution facilities located in Sunnyside, Washington. A copy of the License
For Electric Supply Line Across or Along Railway Property, Tracking #14-3007 is included with
this Notice as Attachment A.
PacifiCorp is a wholly-owned indirect subsidiary of Berkshire Hathaway Energy
Company (BHE). BHE is a subsidiary of Berkshire Hathaway, Inc. (Berkshire Hathaway). As of
March 31,2010, Warren E. Buffet (an individual who may be deemed to control Berkshire
Hathaway), Berkshire Hathaway, various subsidiaries of Berkshire Hathaway and various
employee benefit plans of Berkshire Hathaway subsidiaries together held an interest in excess of
5 percent in BNSF. Therefore, Berkshire Hathaway's ownership interest in BNSF may create an
affiliated interest in some PacifiCorp jurisdictions.
PacifiCorp needs to relocate a distribution pole to accommodate a road improvement
project in Sunnyside, Washington, which will require a new crossing on BNSF's property.
PacifiCorp will pay BNSF $3,000 for the license, $1,600 for railroad protective liability
insurance, and $600 in processing fees. Obtaining the license is in the public interest because it
allows PacifiCorp to install and maintain facilities necessary to provide electric service and to
meet its obligation to provide safe and reliable electric service. Not having the license would
mean that PacifiCorp would not be able to meet its obligation to provide electric service. As the
property owner, BNSF is the only entity that can provide this license to the Company.
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R. Jeff Richards
Vice President and General Counsel
201 S. Main Street, Suite 2400
SaltLokeCily,aT 84111
801-220-4734 Office
801-2201058 Fax
jeff.richard@1tocifi corp.com
Re:
I As of April 30,2O|4,MEHC was renamed Berkshire Hathaway Energy.
Jean D. Jewell
Notice of Affi liate Transaction
August 14,2014
Please do not hesitate to contact me if you have any questions.
Best Regards,@
R. JeffRichards
Vice President and General Counsel
PacifiCorp
Enclosures
Attachment A
License for Electric Supply Line
Across or Along Railway Property
Law Department Approved Contract No. 14-3007
LICENSE FOR ELECTRIC SUPPLY LINE
ACROSS OR ALONG RAILWAY PROPERTY
(Electric Light, Power Supply, Irrespective of Voltage, Overhead or Underground)
THIS LICENSE ("License"), made as of the l$ day of July, 2014 ('Effective Date") by
and between BNSF RAILWAY COMPANY, a Delaware corporation ("Licensor") and
PACIFICORP, an Oregon corporation ( " Licensee " ).
NOW THEREFORE, in consideration of the mutual covenants contained herein, the
parties agree to the following:
GENERAL
l. Licensor hereby grants Licensee a non-exclusive license, subject to all rights, interests,
and estates of third parties including, without limitation, any leases, use rights,
easements, liens or other encumbrances, and upon the terms and conditions set forth
below, to construct, maintain, ffid use in strict accordance with the drawings and
specifications approved by Licensor as part of Licensee's application process ("the
Drawings and Specifications") an electric supply line containing a ma:<imum of four (4)
conductors, together with its supporting or containing structures ("Electric Supply Line")
across or along the premises of Licensor at or near the station of Sunnyside, County of
Yakima, State of Washington, Line Segment 0448, Mile Post 53.53, shown by bold line
upon the print No. 61169, dated 6/25/2014 marked "Exhibit A", attached hereto and
made a part hereof ("Premises").
2. Licensee shall not disfurb any improvements of Licensor or Licensor's existing lessees,
Licensees, easement beneficiaries or lien holders, if any, or interfere with the use of such
improvements.
3. Licensee shall use the Premises solely for construction, maintenance, and use of an
Electric Supply Line in accordance with the Drawings and Specifications. Licensee shall
not use the Premises for any other purpose. Licensee shall not use or store hazardous
substances, as defined by the Comprehensive Environmental Response, Cornpensation,
and Liability Act, as amended (*CERCLA") or petroleum or oil as defined by applicable
Environmental Laws on the Premises.
4. In case of the eviction of Licensee by anyone owning or claiming title to or any interest
in the Premises, Licensor shall not be liable to refund Licensee any compensation paid
hereunder or for any damage Licensee sustains in connection therewith.
5. Any contractors or subcontractors performing work on the Electric Supply Line
entering the Premises on behalf of Licensee, shall be deemed servants and agents
Licensee for purposes of this License.
or
of
Form 421; Rev. 04/26105
Law Department Approved
TERM
Contract No. 14-3007
6. This License shall commence on the Effective Date and shall continue for a period of
twenty-five (25) years, subject to prior termination as hereinafter described.
COMPENSATION
7. (a) Licensee shall pay Licensor, prior to the Effective Date, the sum of Three
Thousand Dollars ($3,000.00) as compensation for the use of the Premises.
(b) Licensee agrees to reimburse Licensor (within thirty (30) days after receipt of
bills therefor) for all costs and expenses incurred by Licensor in connection with
Licensee's use of the Premises or the presence, construction, maintenance, and use
of the Electric Supply Line, including but not limited to the fumishing of
Licensor's Flagman and any vehicle rental costs incurred. The cost of flagger
services provided by the Railway, when deemed necessary by the Railway's
representative, will be borne by the Licensee. The estimated cost for one (l)
flagger is $800.00 for an eight (8) hour basic day with time and one-half or double
time for overtime, rest days and holidays. The estimated cost for each flagger
includes vacation allowance, paid holidays, Railway and unemployment
insurance, public liability and property damage insurance, health and welfare
benefits, transportation, meals, lodging and supervision. Negotiations for
Railway labor or collective bargaining agreements and rate changes authorized by
appropriate Federal authorities may increase actual or estimated flagging rates.
The flagging rate in effect at the time of performance by the Contractor hereunder
will be used to calculate the actual costs of flagging pursuant to this paragraph.
(c) All invoices are due thirty (30) days after the date of invoice. In the event that
Licensee shall fail to pay any monies due to Licensor within thirty (30) days after
the invoice date, then Licensee shall pay interest on such unpaid sum from thirty
(30) days after its invoice date to the date of payment by Licensee at an annual
rate equal to (i) the greater of (a) for the period January i through June 30, the
prime rate last published in The Wall Street Journal in the preceding December
plus two and one-half percent (2 ll2%), and for the period July 1 through
December 31, the prime rate last published in The Wall S*eet Journal in the
preceding June plus two and one-half percent (2 112%), or (b) twelve percent
(12%), or (ii) the maximum rate permitted by law, whichever is less.
COMPLIANCE WITH LAWS
8. (a) Licensee shall observe and comply with any and all laws, statutes, regulations,
ordinances, orders, covenants, restrictions, or decisions of any court of competent
jurisdiction ("Legal Requirements") relating to the construction, maintenance and
use of the Electric Supply Line and the use of the Premises.
(b) Prior to entering the Premises, Licensee shall and shall cause its contractor to
Form 42 I ; Rev. 04/26/05
10.
Law Departrnent Approved Contract No. 14-3007
comply with all Licensor's applicable safety rules and regulations. Prior to
commencing any work on the Premises, Licensee shall complete and shall require
its contractor to complete the safety-training prograrn at the following Internet
Website "http:llconffactororientation.com". This training must be completed no
more than one year in advance of Licensee's entry on the Premises.
DEFINITION OF COST AND EXPENSE
9. For the pulpose of this License, "cost'or "costs" "expense" or "expenses" includes, but is
not limited to, actual labor and material costs including all assignable additives, and
material and supply costs at current value where used.
RIGHT OF LICENSOR TO USE
Licensor excepts and reserves the right, to be exercised by Licensor and any other parties
who may obtain written permission or authority from Licensor:
(a) to maintain, renew, use, operate, change, modify and relocate any existing pipe,
power, communication lines and appurtenances and other facilities or structures
of like character upon, over, under or across the Premises;
to construct, maintain, renew, use, operate, change, modify and relocate any
tracks or additional facilities or structures upon, over, under or across the
Premises; or
(c) to use the Premises in any manner as the Licensor in its sole discretion deems
appropriate, provided Licensor uses all commercially reasonable efforts to avoid
material interference with the use of the Premises by Licensee for the purpose
specified in Section 3 above.
LICENSEE'S OPERATIONS
I 1. (a)Licensee shall notify Licensor's Roadmaster, Andy Vulgas at 602 West 3'd Street,
Ellensburg, WA 98926, telephone [phone], at least five (5) business days
prior to construction of the Electric Supply Line and prior to entering the
Premises for any subsequent maintenance thereon.
In performing the work described in Section 3, Licensee shall use only public
roadways to cross from one side of Licensor's tacks to the other.
Licensee shall, at its sole cost and expense, construct and at all times maintain the
Electric Supply Line in accordance with the National Electric Code.
If the operation or maintenance of said Electric Supply Line shall at any time
cause interference, including but not limited to physical interference from
electromagnetic induction, electrostatic induction, or from stray or other currents,
(b)
(b)
(a)12.
(b)
Form 421; Rev. 04/26105
Law Deparhnent Approved
(a)13.
Contract No. l4-3007
with the facilities of the Licensor or of any lessee or Licensee of the Licensor, or
in any manner interfere with the operation, maintenance, or use by the Licensor of
its right-of-way, tracks, structures, pole lines, signal and communication lines,
radio, or other equipment, devices, other property or appurtenances thereto,
Licensee agrees immediately to make such changes in its Electric Supply Line
and furnish such protective devices and/or replacement equipment to Licensor and
its lessees or Licensees as shall be necessary, in the judgement of the Licensor's
representative, to eliminate such interference. The cost of such protective devices
and their installations shall be bome solely by Licensee. If any of the interference
covered by this paragraph shall be, in the judgement of the Licensor, of such
importance to the safety of the Licensor's operations as to require immediate
corrective action, Licensee, upon notice from the Licensor, shall either, at the
Licensor's election, cease using said Electric Supply Line for any purpose
whatsoever and remove sElme, or reduce the voltage or load on said Electric
Supply Line, or take such other interim protective measures as the Licensor may
deem advisable, until the protective devices and/or replacement equipment
required by this paragraph have been installed, put in operation, tested, and found
to be satisfactory to correct the interference.
Under no conditions shall Licensee be permiued to conduct any tests,
investigations or any other activity using mechanized equipment and/or
machinery, or place or store any mechanized equipment, tools or other materials,
within twenty-five (25) feet of the centerline of any railroad track on the Premises
unless Licensee has obtained prior written approval from Licensor. Licensee
shall, at its sole cost and expense, perform all activities on and about the Premises
in such a manner as not at any time to be a source of danger to or interference
with the existence or use of present or future tracks, roadbed or property of
Licensor, or the safe operation and activities of Licensor. If ordered to cease
using the Premises at any time by Licensor's personnel due to any hazardous
condition, Licensee shall immediately do so. Notwithstanding the foregoing right
of Licensor, the parties agree that Licensor has no duty or obligation to monitor
Licensee's use of the Premises to determine the safe nature thereof, it being solely
Licensee's responsibility to ensure that Licensee's use of the Premises is safe.
Neither the exercise nor the failure by Licensor to exercise any rights granted in
this Section will alter the liability allocation provided by this License.
Licensee shall, at its sole cost and expense, and subject to the supervision of
Licensor's Roadmaster, locate, construct and maintain the Electric Supply Line in
such a manner and of such material that it will not at any time be a source of
danger to or interference with the existence or use of present or future tracks,
roadbed or property of Licensor, or the safe operation and activities of its railroad.
Further, the Electric Supply Line shall be constructed, installed and maintained in
conformity with the plans and specifications shown on the print attached hereto as
Exhibit A and made a part hereof (which, if present, are to be deemed part of the
Drawings and Specifications). Licensor may direct one of its field engineers to
observe or inspect the construction and/or maintenance of the Electric Supply
o)
4
Form 42 I ; Rev. 04/26105
Law Department Approved Contract No. 14-3007
Line at any time for compliance with the Drawings and Specifications. If ordered
at any time to halt construction or maintenance of the Electric Supply Line by
Licensor's personnel due to non-compliance with the same or any other hazardous
condition, Licensee shall immediately do so. Notwithstanding the foregoing right
of Licensor, the parties agree that Licensor has no duty or obligation to observe or
inspect, or to halt work on, the Electric Supply Line, it being solely Licensee's
responsibility to ensure that the Electric Supply Line is constructed in strict
accordance with the Drawings and Specifications and in a safe and workmanlike
manner in compliance with all terms hereof, Neither the exercise nor the failure
by Licensor to exercise any right granted by this Section will alter in any way the
liability allocation provided by this License. If at any time Licensee shall, in the
sole judgment of Licensor, fail to properly perform its obligations under this
Section, Licensor may, at its option and at Licensee's sole expense, arrange for
the performance of such work as it deems necessary for the safety of its
operations and activities. Licensee shall promptly reimburse Licensor for all costs
and expenses of such work, upon receipt of an invoice for the same. Licensor's
failure to perform any obligations of Licensee shall not alter the liability
allocation hereunder.
Licensee shall, at its sole cost and expense, remove all combustible material from around
wooden poles and will at all times keep the space around such poles free of such material,
and if removal of such combustible material shall not be attended to with fifteen (15)
days after having been requested by Licensor to do so, Licensor shall have the right itself
to perform the work and Licensee hereby agrees to reimburse Licensor for the expense so
incurred.
During the construction and any subsequent maintenance performed on Electric Supply
Line, Licensee shall perform such work in a manner to preclude damage to the property
of Licensor, and preclude interference with the operation of its railroad. The construction
of the Electric Supply Line shall be completed within one (1) year of the Effective Date.
Upon completion of the construction of the Electric Supply Line and after performing
any subsequent maintenance thereon, Licensee shall, at Licensee's own cost and expense,
restore Licensor's premises to their fonner state as of the Effective Date of this License.
If at any time during the term of this License, Licensor shall desire the use of its rail
corridor in such a manner as would, in Licensor's reasonable opinion, be interfered with
by the Electric Supply Line, Licensee shall, at its sole expense, within thirty (30) days
after receiving written notice from Licensor to such effect, make such changes in the
Electric Supply Line as in the sole discretion of Licensor may be necessary to avoid
interference with the proposed use of Licensor's rail corridor, including, without
limitation, the relocation of the existing or the construction of new a Electric Supply
Line.
17. (a) Prior to Licensee conducting any boring work on or about any portion of the
Premises, Licensee shall explore the proposed location for such work with hand
tools to a depth of at least three (3) feet below the surface of the ground to
14.
15.
16.
Form 421; Rev.04/26/05
Law Department Approved Contract No. 14-3007
determine whether pipelines or other structures exist below the surface, ry(!e([,
however, that in lieu of the foregoing, the Licensee shall have the right to use
suitable detection equipment or other generally accepted industry practice (e.9.,
consulting with the Underground Services Association) to determine the existence
or location of pipelines and other subsurface structures prior to drilling or
excavating with mechanized equipment. Upon Licensee's written request, which
shall be made thirty (30) business days in advance of Licensee's requested
construction of the Electric Supply Line, Licensor will provide Licensee any
information that Licensor's Engineering Department has in its possession
concerning the existence and approximate location of Licensor's underground
utilities and pipelines at or near the vicinity of the proposed Electric Supply Line.
Prior to conducting any such boring work, the Licensee will review all such
material. Licensor does not warrant the accuracy of information relating to
subsurface conditions and Licensee's operations will be subject at all times to the
liability provisions herein.
(b) For all bores greater than 26-inch diameter and at a depth less than 10.0 feet
below bottom of rail, a soil investigation will need to be performed by the
Licensee and reviewed by Licensor prior to construction. This study is to
determine if granular material is present, and to prevent subsidence during the
installation process. If the investigation determines in Licensor's reasonable
opinion that granular material is present, Licensor may select a new location for
Licensee's use, or may require Licensee to furnish for Licensor's review and
approval, in its sole discretion a remedial plan to deal with the granular material.
Once Licensor has approved any such remedial plan in writing, Licensee shall, at
its sole cost and expense, carry out the approved plan in accordance with all terms
thereof and hereof.
18. Any open hole, boring or well constructed on the Premises by Licensee shall be safely
covered and secured at all times when Licensee is not working in the actual vicinity
thereof. Following completion of that portion of the work, all holes or borings
constructed on the Premises by Licensee shall be:
(a) filled in to surrounding ground level with compacted bentonite grout; or
(b) otherwise secured or retired in accordance with any applicable Legal
Requirement. All excavated materials shall not remain on Licensor's property for
more than ten (10) days and shall be properly disposed of by Licensee in
accordance with applicable Legal Requirements.
Upon termination of this License, Licensee shall, at its sole cost and expense:
(a) remove all of its equipment from the Premises;
O) remove the Electric Supply Line at Licensor's sole discretion;
19.
Form 421; Rev.04/26/05
Law Department Approved Contract No. 14-3007
(c) report and restore any damage to the Premises arising from, growing out of, or
connected with Licensee's use of the Premises;
(d)
(e)
remedy any
and
unsafe conditions on the Premises created or aggravated by
leave the Premises in the condition which existed as of the Effective Date of this
License.
20.Licensee's on-site supervision shall retain/maintain a fully-executed copy of this License
at all times while on the Premises.
LIABILITY
21, (a) TO THE FULLEST EXTENT PERMITTED BY LAW' LICENSEE SHALL
RELEASE, INDEMNIFY, DEFEND AND HOLD HARMLESS LICENSORAND LICENSOR'S AFFILIATED COMPANIES, PARTNERS,
SUCCESSORS, ASSIGNS, LEGAL REPRESENTATIVES, OFFICERS,
DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS
(CoLLECTIVELY, "INDEMNITEES") FOR, FROM AND AGAINST
ANY AND ALL CLAIMS, LIABILITfES, FINES, PENALTIES, COSTS,
DAMAGES, LOSSES, LIENS, CAUSES OF ACTION, SUTTS, DEMANDS,
JUDGMENTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION,
COURT COSTS, ATTORNEYS' FEES AND COSTS OF
INVESTIGATION, REMOVAL AND REMEDIATION AND
GOVERNMENTAL OVERSIGHT COSTS) ENVIRONMENTAL OR
OTHERWISE (COLLECTTVELY "LIABILTTIES") OF ANY NATURE,
KIND OR DESCRIPTION OF AI{Y PERSON OR ENTITY DIRECTLY
OR INDIRECTLY ARISING OUT OF, RESULTING FROM OR
RELATED TO (IN WHOLE OR IN PART):
(r) THIS LICENSE, INCLUDING, WITHOUT LIMITATION' ITS
ENVIRONMENTAL PROVISIONS,
(ii) ANY RTGHTS OR TNTERESTS GRANTED PURSUAI\T TO
THIS LICENSE,
(iii) LTCENSEE'S occUPATION AND USE OF THE
PREMISES,
(iv) THE EIWIRONMENTAL CONDITION AND STATUS
THE PREMISES CAUSED BY OR CONTRIBUTED
LICENSEE, OR
(v) ANY ACT OR OMISSION OF LICENSEE OR LICENSEE'S
EMPLOYEES, OR
Form 421; Rev. M/26l05
OF
BY
OFFICERS, AGENTS, INVITEES,
Law Department Approved
(c)
(b)
Contract No. 14-3007
CONTRACTORS, OR AI\TYONE DIRECTLY OR INDIRECTLY
EMPLOYED BY ANY OF THEM, OR AI{YONE TI{EY CONTROL
oR EXERCTSE CONTROL OVER,
EVEN IF SUCH LIABILITIES ARISE FROM OR ARE ATTRIBUTED
TO, IN WHOLE OR IN PART, ANY NEGLIGENCE OF ANY
INDEMNITEE. TIIE ONLY LIABILITIES WITH RESPECT TO WHICH
LICENSEE'S OBLIGATION TO INDEMNIFY THE INDEMNITEES
DOES NOT APPLY ARE LIABILITIES TO THE EXTENT
PROXIMATELY CAUSED BY THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF AN INDEMNITEE.
FURTHER, TO THE FULLEST EXTENT PERMITTED BY LAW,
NOTWITHSTANDING THE LIMITATION IN SECTION Zr(a),
LICENSEE SHALL NOW AND FOREVER WAIVE ANY ANID ALL
CLAIMS, REGARDLESS WHETHER BASED ON THE STRICT
LIABILITY, NEGLIGENCE OR OTHERWISE, THAT RAILROAD IS AN
"owNER", "OPERATOR"T "ARRANGER", OR "TRANSPORTER,
WITH RESPECT TO THE ELECTRIC SUPPLY LINE FOR TTTE
PURPOSES OF CERCLA OR OTHER EIWIRONMENTAL LAWS.
LICENSEE WILL INDEMNIFY, DEFEND AI\[D HOLD THE
INDEMNITEES HARMLESS FROM ANY AND ALL SUCH CLAIMS
REGARDLESS OF THE NEGLIGENCE OF THE INDEMNITEES.
LICENSEE FURTHER AGREES THAT THE USE OF THE PREMISES
AS CONTEMPLATED BY THIS LICENSE SHALL NOT IN ANY WAY
SUBJECT LICENSOR TO CLAIMS THAT LICENSOR IS OTHER THAN
A COMMON CARRIER FOR PURPOSES OF ENVIRONMENTAL LAWS
AND EXPRESSLY AGREES TO INDEMNIFY, DEFEND, AND HOLD
THE INDEMNITEES HARMLESS FOR ANY AND ALL SUCH CLAIMS.IN NO EVENT SHALL LICENSOR BE RESPONSIBLE FOR THE
ENVIRONMENTAL CONDITION OF THE PREMISES.
TO THE FULLEST EXTENT PERMITTED BY LAW, LICENSEE
FURTHER AGREES, REGARDLESS OF ANY NEGLIGENCE OR
ALLEGED NEGLIGENCE OF ANY INDEMNITEE, TO INDEMNIFY,
AND HOLD HARMLESS THE INDEMNITEES AGAINST AND ASSUME
THE DEFENSE OF ANY LIABILITIES ASSERTED AGAINST OR
SUFFERED BY ANY INDEMNITEE UNDER OR RELATED TO THE
FEDERAL EMPLOYERS' LIABILITY ACT ("FELA") WHENEVER
EMPLOYEES OF LICENSEE OR AN"Y OF ITS AGENTS, INVITEES, OR
CONTRACTORS CLAIM OR ALLEGE THAT THEY ARE EMPLOYEES
OF ANY INDEMI\"ITEE OR OTHERWISE. THIS INDEMNITY SHALL
ALSO EXTEND, ON THE SAME BASIS, TO FELA CLAIMS BASED ON
ACTUAL OR ALLEGED VIOLATIONS OF ANY FEDERAL, STATE OR
LOCAL LAWS OR REGULATIONS, INCLUDING BUT NOT LIMITED
TO TITE SAFETY APPLIANCE ACT, THE BOILER INSPECTION ACT,
Form 421; Rev.04/26105
Law Department Approved Contract No. 14-3007
THE OCCUPATIONAL HEALTH AND SAFETY ACT, THE RESOURCE
CONSERVATION AND RECOYERY ACT, AND AIIY SIMILAR STATE
OR FEDERAL STATUTE.
(d) Upon written notice from Licensor, Licensee agrees to assume the defense of any
lawsuit or other proceeding brought against any Indemnitee by any entity, relating
to any matter covered by this License for which Licensee has an obligation to
assume liability for and/or save and hold harmless any Indemnitee. Licensee shall
pay all costs incident to such defense, including, but not limited to, attomeys' fees,
investigators' fees, litigation and appeal expenses, settlement payments, and
amounts paid in satisfaction ofjudgments.
PERSONAL PROPERTY WAIVER
22. ALL PERSONAL PROPERTY OF LICENSEE, INCLUDING, BUT NOT
LIT,IITED TO, FIXTURES, EQUIPMENT, OR RELATED MATERIALS UPON
THE PREMISES WILL BE AT THE RISK OF LICENSEE ONLY, AND NO
INDEMNITEE WILL BE LIABLE FOR ANY DAMAGE THERETO OR THEFT
THEREOF, WHETHER OR NOT DUE IN WHOLE OR IN PART TO THE
NEGLIGENCE OF ANY INDEMNITEE.
INSURANCE
23. Licensee shall, at its sole cost and expense, procure and maintain during the life of this
Agreement the following insurance coverage:
A. Commercial General Liability Insurance. This insurance shall contain broad form
contractual Iiability with a combined single limit of a minimum of $2,000,000
each occurrence and an aggregate limit of at least $ 4,000,000. Coverage must be
purchased on a post 1998 ISO occurrence or equivalent and include coverage for,
but not limited to, the following:
l Bodily Iqi,ry and Property Damage
a Personal Injury and Advertising Injury
. Fire legal liability
a Products and completed operations
This policy shall also contain the following endorsements, which shall be indicated on the
certificate of insurance:
a It is agreed that any workers' compensation exclusion does not apply to
Licensor's payments related to the Federal Employers Liability Act or a
Licensor Wage Continuation Program or similar programs and any payments
made are deemed not to be either payments made or obligations assumed
under any Workers Compensation, disability benefits, or unemployment
compensation law or similar law.
o The definition of insured conffact shall be amended to remove any exclusion
or other limitation for any work being done within 50 feet of railroad property.
Form 421; Rev.04/26105
Law Deparfrnent Approved Contract No. 14-3007
o Any exclusions related to the explosion, collapse and underground hazards
shall be removed.
No other endorsements limiting coverage may be included on the policy.
B. Business Automobile lnsurance. This insurance shall contain a combined single
limit of at least $1,000,000 per occrurence, and include coverage for, but not
limited to the following:
a Bodily injury and property damage
a Any and all vehicles owned, used or hired
C. Workers Compensation and Employers Liability Insurance. This insurance shall
include coverage for, but not limited to:
o Licensee's statutory liability under the worker's compensation laws of the
state(s) in which the work is to be performed. If optional under State law, the
insurance must cover all employees anyway.
a Employers' Liability (Part B) with limits of at least $500,000 each accident,
$500,000 by disease policy limit, $500,000 by disease each employee.
D. Railroad Protective Liability Insurance. This insurance shall name only the
Licensor as the Insured with coverage of at least $2,000,000 per occurrence and
$6,000,000 in the aggregate. The coverage obtained under this policy shall only
be effective during the initial installation and/or construction of the Electric
Supply Line. THE CONSTRUCTION OF THE ELECTRIC SUPPLY LINE
SHALL BE COMPLETED WITHIN ONE (1) YEAR OF THE EFFECTIVE
DATE. If further maintenance of the Electric Supply Line is needed at a later
date, an additional Railroad Protective Liability Insurance Policy shall be
required. The policy shall be issued on a standard ISO form CG 00 35 10 93 and
include the following:
I Endorsed to include the Pollution Exclusion Amendment (ISO form CG 28 31
10 e3)
t Endorsed to include ttre Limited Seepage and Pollution Endorsement.
t Endorsed to include Evacuation Expense Coverage Endorsement.
o No other endorsements restricting coverage may be added.
a The original policy must be provided to the Licensor prior to performing any
work or services under this Agreement
In lieu of providing a Railroad Protective Liability Policy, Licensee may participate in
Licensor's Blanket Railroad Protective Liability lnsurance Policy available to Licensee or
its contractor. The limits of coverage are the sztme as above. The cost is $_
B I elect to participate in Licensor's Blanket Policy;
tr I elect not to participate in Licensor's Blanket Policy.
Other Requirements:
t0
Form 421; Rev. 04/26/05
Law Department Approved Contract No. 14-3007
Where allowable by law, all policies (applying to coverage listed above) shall contain no
exclusion for punitive damages and certificates of insurance shall reflect that no
exclusion exists.
Licensee agrees to waive its right of recovery against Licensor for all claims and suits
against Licensor. In addition, its insurers, through policy endorsement, waive their right
of subrogation against Licensor for all claims and suits. The certificate of insurance must
reflect waiver of subrogation endorsement. Licensee further waives its right of recovery,
and its insurers also waive their right of subrogation against Licensor for loss of its
owned or leased property or property under its care, custody or control.
Licensee's insurance policies through policy endorsement must include wording which
states that the policy shall be primary and non-contributing with respect to any insurance
carried by Licensor. The certificate of insurance must reflect that the above wording is
included in evidenced policies.
All policy(ies) required above (excluding Workers Compensation and if applicable,
Railroad Protective) shall include a severability of interest endorsement and shall name
Licensor and Iron Horse Development, LLC as an additional insured with respect to work
performed under this agreement. Severability of interest and naming Licensor and Iron
Horse Development, LLC as additional insureds shall be indicated on the certificate of
insurance.
Licensee is not allowed to self-insure without the prior written consent of Licensor. If
granted by Licensor, any deductible, self-insured retention or other financial
responsibility for claims shall be covered directly by Licensee in lieu of insurance. Any
and all Licensor liabilities that would otherwise, in accordance with the provisions of this
Agreement, be covered by Licensee's insurance will be covered as if Licensee elected not
to include a deductible, self-insured retention, or other financial responsibility for claims.
Prior to commencing the Work, Licensee shall furnish to Licensor an acceptable
certificate(s) of insurance including an original signature of the authorized representative
evidencing the required coverage, endorsements, and amendments and referencing the
contract audit/folder number if available. The policy(ies) shall contain a provision that
obligates the insurance company(ies) issuing such policy(ies) to notifu Licensor in
writing at least 30 days prior to any cancellation, non-renewal, substitution or material
alteration. This cancellation provision shall be indicated on the certificate of insurance.
Upon request from Licensor, a certified duplicate original of any required policy shall be
furnished.
Any insurance policy shall be written by a reputable insurance company acceptable to
Licensor or with a current Best's Guide Rating of A- and Class VII or better, and
authorized to do business in the state(s) in which the service is to be provided.
Licensee WARRANTS that this License has been thoroughly reviewed by Licensee's
insurance agent(s)/broker(s), who have been instructed by Licensee to procure the
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Form 421; Rev. 04/26/05
Law Department Approved Contract No. 14-3007
insurance coverage required by this Agreement. Allocated Loss Expense shall be in
addition to all policy limits for coverages referenced above.
Not more frequently than once every five years, Licensor may reasonably modify the
required insurance coverage to reflect then-current risk management practices in the
railroad industry and underwriting practices in the insurance industry.
If any portion of the operation is to be subcontracted by Licensee, Licensee shall require
that the subcontractor shall provide and maintain insurance coverages as set forth herein,
naming Licensor as an additional insured, and shall require that the subcontractor shall
release, defend and indemnifu Licensor to the same extent and under the same terms and
conditions as Licensee is required to release, defend and indemnify Licensor herein.
Failure to provide evidence as required by this section shall entitle, but not require,
Licensor to terminate this Lieense immediately. Acceptance of a certificate that does not
comply with this section shall not operate as a waiver of Licensee's obligations
hereunder.
The fact that insurance (including, without limitation, self-insurance) is obtained by
Licensee shall not be deemed to release or diminish the liability of Licensee including,
without limitation, liability under the indemnity provisions of this License. Damages
recoverable by Licensor shall not be limited by the amount of the required insurance
coverage.
For purposes of this section, Licensor shall mean "Burlington Northem Santa Fe
Corporation", "BNSF Railway Company" and the subsidiaries, successors, assigns and
affiliates of each.
ENYIRONMENTAL
24. (a) Licensee shall strictly comply with all federal, state and local environmental laws
and regulations in its use of the Premises, including, but not limited to, the
Resource Conservation and Recovery Act, as amended (RCRA), the Clean Water
Act, the Oil Pollution Act, theHazardous Materials Transportation Act, CERCLA
(collectively referred to as the "Environmental Laws"). Licensee shall not
maintain a treafinent, storage, transfer or disposal facility, or underground storage
tank, as defined by Environmental Laws on the Premises. Licensee shall not
release or suffer the release of oil or hazardous substances, as defined by
Environmental Laws on or about the Premises.
(b) Licensee shall give Licensor immediate notice to Licensor's Resource Operations
Center at [phone] ofany release ofhazardous substances on or from the
Premises, violation of Environmental Laws, or inspection or inquiry by
governmental authorities charged with enforcing Environmental Laws with
respect to Licensee's use of the Premises. Licensee shall use the best efforts to
promptly respond to any release on or from the Premises. Licensee also shall give
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Form 421; Rev. 04/26105
Law Department Approved
(c)
(d)
Contract No. 14-3007
Licensor immediate notice of all measures undertaken on behalf of Licensee to
investigate, remediate, respond to or otherwise cure such release or violation.
ln the event that Licensor has notice from Licensee or otherwise of a release or
violation of Environmental laws arising in any way with respect to the Electric
supply Line which occurred or may occur during the term of this License,
Licensor may require Licensee, at Licensee's sole risk and expense, to take timely
measures to investigate, remediate, respond to or otherwise cure such release or
violation affecting the Premises or Licensor's right-of-way.
Licensee shall promptly report to Licensor in writing any conditions or activities
upon the Premises known to Licensee which create a risk of harm to persons,
property or the environment and shall take whatever action is necessary to prevent
injury to persons or property arising out of such conditions or activities; provided,
however, that Licensee's reporting to Licensor shall not relieve Licensee of any
obligation whatsoever imposed on it by this License. Licensee shall promptly
respond to Licensor's request for information regarding said conditions or
activities.
ALTERATIONS
25. Licensee may not make any alterations to the Premises or permanently affix anything to
the Premises or any buildings or other structures adjacent to the Premises without
Licensor's prior written consent.
NO WARRANTIES
26. LICENSOR'S DUTIES AND WARRANTIES ARE LIMITED TO THOSE
EXPRESSLY STATED IN THIS LICENSE AND SHALL NOT INCLUDE ANY
IMPLIED DUTIES OR IMPLIED WARRANTIES, NOW OR IN THE FUTURE.
NO REPRESENTATIONS OR WARRANTIES HAVE BEEN MADE BY
LICENSOR OTHER THAN THOSE CONTAINED IN THIS LICENSE.
LICENSEE HEREBY WAIVES ANY AND ALL WARRANTIES, EXPRESS OR
IMPLIED, WITH RESPECT TO THE PREMISES WHICH MAY EXIST BY
OPERATION OF LAW OR IN EQUITY, INCLUDING, WITHOUT
LIMITATION, AI{Y WARRANTY OF MERCHANTABILITY, HABITABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
OUIET ENJOYMENT
27. LICENSOR DOES NOT WARRANT ITS TITLE TO THE PROPERTY NOR
UNDERTAKE TO DEFEND LICENSEE IN THE PEACEABLE POSSESSION
oR usE THEREOF. NO COVENANT OF QUrET ENJOYMENT rS MADE.
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Form 421; Rev.04/26105
Law Department Approved
DEFAULT
Contract No. 14-3007
28. If default shall be made in any of the covenants or agreements of Licensee contained in
this document, or in case of any assignment or transfer of this License by operation of
law, Licensor may, at its option, terminate this License by serving five (5) days'notice in
writing upon Licensee. Any waiver by Licensor of any default or defaults shall not
constitute a waiver of the right to terminate this License for any subsequent default or
defaults, nor shall any such waiver in any way affect Licensor's ability to enforce any
Section of this License. The remedy set forth in this Section 28 shall be in addition to,
and not in limitation of, any other remedies that Licensor may have at law or in equity.
LIENS AND CHARGES
29. Licensee shall promptly pay and discharge any and all liens arising out of any
construction, alterations or repairs done, suffered or permitted to be done by Licensee on
Premises. Licensor is hereby authorized to post any notices or take any other action upon
or with respect to Premises that is or may be permitted by law to prevent the attachment
of any such liens to Premises; provided, however, that failure of Licensor to take any
such action shall not relieve Licensee of any obligation or liability under this Section 29
or any other Section of this License. Licensee shall pay when due any taxes, assessments
or other charges (collectively, "Taxes") levied or assessed upon the Improvements by any
governmental or quasi-governmental body or any Taxes levied or assessed against
Licensor or the Premises that are attributable to the Improvements.
TERMINATION
This License may be terminated by Licensor, at any time, by serving thirty (30) days'
written notice of termination upon Licensee. This License may be terminated by
Licensee upon execution of Licensor's Mufual Termination Letter Agreement then in
effect. Upon expiration of the time specified in such notice, this License and all rights of
Licensee shall absolutely cease.
If Licensee fails to surrender to Licensor the Premises, upon any termination of this
License, all liabilities and obligations of Licensee hereunder shall continue in effect until
the Premises are surrendered. Termination shall not release Licensee from any liability or
obligation, whether of indemnity or otherwise, resulting from any events happening prior
to the date of termination.
ASSIGNMENT
Neither Licensee, nor the heirs, legal representatives, successors, or assigns of Licensee,
nor any subsequent assignee, shall assign or transfer this License or any interest herein,
without the prior written consent and approval of Licensor, which may be withheld in
Licensor's sole discretion.
30.
31.
JZ.
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Form 421; Rev. 04/26/05
Law Departrnent Approved Contract No. 14-3007
NOTICES
33. Any notice required or permitted to be given hereunder by one party to the other shall be
in writing and the same shall be given and shall be deemed to have been served and given
if (i) placed in the United States mail, certified, retum receipt requested, or (ii) deposited
into the custody of a nationally recognized overnight delivery service, addressed to the
party to be notified at the address for such party specified below, or to such other address
as the party to be notified may designate by giving the other party no less than thirty (30)
days'advance written notice of such change in address.
If to Licensor:BNSF Railway Company
2500 Lou Menk Dr. - AOB-3
Fort Worth,TX 76131
Attn:- Land Revenue Management
with a copy to:
If to Licensee:
Iron Horse Development, LLC
c/o Iron Horse Real Estate
111 University Parkway, Suite 200
Yakima, WA 98901
PacifiCorp
825 NE Multnomah St, Ste 1700
Portland, OR 97232
SURVIVAL
34. Neither termination nor expiration will release either party from any liability or
obligation under this License, whether of indemnity or otherwise, resulting from any acts,
omissions or events happening prior to the date of termination or expiration, or, if later,
the date when the Electric Supply Line and improvements are removed and the Premises
are restored to its condition as of the Effective Date.
RECORDATION
35. It is understood and agreed that this License shall not be placed on public record.
APPLICABLE LAW
36. All questions concerning the interpretation or application of provisions of this License
shall be decided according to the substantive Iaws of the state of Texas without regard to
conflicts of law provisions.
SEVERABILITY
37. To the maximum extent possible, each provision of this License shall be interpreted in
such manner as to be effective and valid under applicable law, but if any provision of this
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Form 421; Rev.04/26105
Law Department Approved Contract No. 14-3007
License shall be prohibited by, or held to be invalid under, applicable law, such provision
shall be ineffective solely to the extent of such prohibition or invalidity, and this shall not
invalidate the remainder of such provision or any other provision of this License.
INTEGRATION
38. This License is the full and complete agreement between Licensor and Licensee with
respect to all matters relating to Licensee's use of the Premises, and supersedes any and
all other agreements between the parties hereto relating to Licensee's use of the Premises.
However, nothing herein is intended to terminate any surviving obligation of Licensee or
Licensee's obligation to defend and hold Licensor harmless in any prior written
agreement between the parties.
MISCELLANEOUS
39. In the event that Licensee consists of two or more parties, all the covenants and
agreements of Licensee herein contained shall be the joint and several covenants and
agreements of such Parties.
40. The waiver by Licensor of the breach of any provision herein by Licensee shall in no way
impair the right of Licensor to enforce that provision for any subsequent breach thereof.
Iron Horse Development, LLC is acting as representative for BNSF Railway Company.
IN WITNESS WHEREOF, this License has been duly executed, in duplicate, by the parties
hereto as of the day and year first above written.
BNSF RAILWAY COMPAI\IY
By:
PACIFICORP
825 NE Multromah St, Ste 1700
Portland, OR 97232
By:
Title:
t6
Form 421; Rev. 04/26/05
COORDINATE SYSTEM. WA S
DRAWING NO.61169
TRACKING NO. 14.3007
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