Exhibit 10.1
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
ENRON CORP.
AND
SIERRA PACIFIC RESOURCES
NOVEMBER 5, 1999
TABLE OF CONTENTS
ARTICLE I
---------
SALE AND PURCHASE OF THE SHARES
-------------------------------
Section 1.1 Sale and Purchase of the PGE Shares.......................1
Section 1.2 Sale and Purchase of the PGH II Shares....................1
Section 1.3 PGE Purchase Price........................................1
Section 1.4 PGH II Purchase Price.....................................2
Section 1.5 Assumption of Enron Merger Payment........................2
ARTICLE II
----------
CLOSING
-------
Section 2.1 Closing...................................................2
Section 2.2. Closing Transactions......................................2
ARTICLE III
-----------
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Section 3.1 Organization and Qualification............................3
Section 3.2 Subsidiaries..............................................3
Section 3.3 Capitalization............................................3
Section 3.4 Authority; Non-Contravention; Statutory Approvals;
Compliance.............................................4
Section 3.5 Reports and Financial Statements..........................6
Section 3.6 Absence of Certain Changes or Events......................6
Section 3.7 Litigation................................................7
Section 3.8 Tax Matters...............................................7
Section 3.9 Employee Benefit Plans and Labor Agreements...............7
Section 3.10 Environmental Protection..................................9
Section 3.11 Regulation as a Utility..................................10
Section 3.12 Insurance................................................11
Section 3.13 Status of PGE Nuclear Facility...........................11
Section 3.14 Year 2000 Compliance.....................................12
Section 3.15 Contracts with Enron.....................................12
Section 3.16 Limitation of Representations and Warranties.............12
ARTICLE IV
----------
REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
Section 4.1 Organization and Qualification...........................12
Section 4.2 Authority; Non-Contravention; Statutory Approvals........13
Section 4.3 Availability of Funds....................................14
Section 4.4 Purchase for Investment..................................14
Section 4.5 Due Diligence............................................14
Section 4.6 No Knowledge of Breach...................................14
Section 4.7 Regulation as a Utility..................................14
ARTICLE V
---------
CONDUCT OF BUSINESS PENDING THE CLOSING
---------------------------------------
Section 5.1 Ordinary Course of Business..............................15
Section 5.2 Dividends and Repurchases................................15
Section 5.3 Issuance of Securities...................................17
Section 5.4 Charter Documents........................................17
Section 5.5 Acquisitions.............................................17
Section 5.6 No Dispositions..........................................17
Section 5.7 Indebtedness.............................................18
Section 5.8 Capital Expenditures.....................................18
Section 5.9 Compensation, Benefits...................................18
Section 5.10 Cooperation, Notification................................18
Section 5.11 Insurance................................................19
Section 5.12 Permits..................................................19
Section 5.13 Nuclear Operations.......................................19
Section 5.14 Discharge of Liabilities.................................19
Section 5.15 Contracts................................................20
Section 5.16 Certain Actions..........................................20
Section 5.17 Non-Solicitation.........................................20
Section 5.18 Accounting Matters.......................................20
ARTICLE VI
----------
ADDITIONAL AGREEMENTS
---------------------
Section 6.1 Access to Information....................................20
Section 6.2 Regulatory Matters.......................................21
Section 6.3 Cooperation..............................................22
Section 6.4 Public Announcements.....................................22
Section 6.5 Employee Benefit Plans...................................22
Section 6.6 Expenses.................................................24
Section 6.7 No Breach, Etc...........................................25
Section 6.8 Directors' and Officers' Indemnification.................25
Section 6.9 Insurance................................................25
Section 6.10 Corporate Name...........................................25
Section 6.11 Related Party Contracts..................................26
Section 6.12 PUHCA....................................................26
Section 6.13 Tax Matters..............................................26
Section 6.14 Evidence of Financing Availability.......................28
ARTICLE VII
-----------
CONDITIONS
----------
Section 7.1 Conditions to Obligations of Purchaser...................29
Section 7.2 Conditions to Obligations of Seller......................30
ARTICLE VIII
------------
TERMINATION
-----------
Section 8.1 Termination..............................................31
Section 8.2 Procedure and Effect of Termination......................32
ARTICLE IX
----------
MISCELLANEOUS
-------------
Section 9.1 Non-Survival of Representations, Warranties,
Covenants and Agreements...............................32
Section 9.2 Brokers..................................................32
Section 9.3 Notices..................................................32
Section 9.4 Miscellaneous............................................33
Section 9.5 Interpretation...........................................34
Section 9.6 Counterparts; Effect.....................................34
Section 9.7 Parties in Interest......................................34
Section 9.8 Specific Performance.....................................34
Section 9.9 Governing Law............................................34
Section 9.10 Disclosure Schedules.....................................34
STOCK PURCHASE AGREEMENT
------------------------
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated November 5,
1999 is by and between ENRON CORP., an Oregon corporation ("Seller"), and
SIERRA PACIFIC RESOURCES, a Nevada corporation ("Purchaser"). Capitalized
terms used herein shall have the meanings ascribed to them in Annex A
hereto, unless otherwise provided. Seller and Purchaser are referred to
individually as a "Party," and collectively as the "Parties."
W I T N E S S E T H :
WHEREAS, Seller owns all of the issued and outstanding common stock,
par value $3.75 per share (the "PGE Shares") of Portland General Electric
Company, an Oregon corporation ("PGE");
WHEREAS, Portland General Holdings, Inc., an Oregon corporation and a
wholly owned subsidiary of Seller ("PGH"), owns all of the issued and
outstanding common stock, par value $1.00 per share (the "PGH II Shares")
of PGH II, Inc., an Oregon corporation ("PGH II");
WHEREAS, Purchaser desires to purchase, and Seller desires to sell,
the PGE Shares, subject in all respects to the provisions of this
Agreement; and
WHEREAS, Purchaser desires to purchase, and Seller desires to cause
PGH to sell, the PGH II Shares, subject in all respects to the provisions
of this Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:
ARTICLE I
SALE AND PURCHASE OF THE SHARES
-------------------------------
Section 1.1 Sale and Purchase of the PGE Shares. Upon the terms and
subject to the satisfaction of the conditions contained in this Agreement,
at the Closing, Seller shall sell, transfer and deliver to Purchaser, and
Purchaser shall purchase and accept delivery from Seller of, the PGE
Shares.
Section 1.2 Sale and Purchase of the PGH II Shares. Upon the terms
and subject to the satisfaction of the conditions contained in this
Agreement, at the Closing, Seller shall cause PGH to sell, transfer and
deliver to Purchaser, and Purchaser shall purchase and accept delivery from
PGH of, the PGH II Shares.
Section 1.3 PGE Purchase Price. The purchase price for the PGE Shares
shall be $2,086,000,000 in cash, which shall be reduced as provided in
Section 1.5 and shall be paid as provided in Section 2.2(b) (the "PGE
Purchase Price").
Section 1.4 PGH II Purchase Price. The purchase price for the PGH II
Shares shall be $14,000,000 in cash, which shall be paid as provided in
Section 2.2(d) (the "PGH II Purchase Price").
Section 1.5 Assumption of Enron Merger Payment. Effective as of the
Closing Date, Purchaser shall assume from Seller, and shall indemnify
Seller for, all obligations in respect of the Enron Merger Payment for the
period from and after the Closing Date. Seller shall continue to be
responsible for the Enron Merger Payment obligations for periods prior to
the Closing Date and shall indemnify Purchaser for all such obligations.
The purchase price for the PGE Shares as set forth in Section 1.3 shall be
reduced by an amount equal to the book value of Seller's obligations
remaining under the Enron Merger Payment as of the Closing Date, which
shall be calculated in accordance with the Enron/PGE Order.
ARTICLE II
CLOSING
-------
Section 2.1 Closing. The closing of the purchase and sale of the
Shares (the "Closing") will take place at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇
L.L.P., 2300 First City Tower, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, as soon as
reasonably practicable, not to exceed 10 business days or such lesser
number of days as remain in the then current calendar year, following the
date on which the conditions specified in Article VII (other than the
conditions specified in Sections 7.1(e) and 7.2(e) which shall be satisfied
on the Closing Date) have been satisfied or waived, unless another time,
date and place is agreed to in writing by the Parties. The date of the
Closing is referred to in this Agreement as the "Closing Date."
Section 2.2.Closing Transactions. At the Closing the following events
shall occur, each event being deemed to have occurred simultaneously with
the other events:
(a) Seller will deliver to Purchaser the PGE Shares by
delivering the certificates representing the PGE Shares duly endorsed
for transfer or accompanied by appropriate stock powers, in favor of
Purchaser;
(b) Purchaser will pay the PGE Purchase Price by wire
transferring such amount, in lawful money of the United States of
America in immediately available funds, to such account as Seller
shall have designated by written notice to Purchaser;
(c) Seller will cause PGH to deliver to Purchaser the PGH II
Shares by delivering the certificates representing the PGH II Shares
duly endorsed for transfer or accompanied by appropriate stock
powers, in favor of Purchaser; and
(d) Purchaser will pay the PGH II Purchase Price by wire
transferring such amount, in lawful money of the United States of
America in immediately available funds, to such account as Seller
shall have designated, on behalf of PGH, by written notice to
Purchaser.
(e) Purchaser will deliver to Seller documentation regarding
the assumption of the obligations in respect of the Enron Merger
Payment for the period from and after the Closing Date pursuant to
Section 1.5 of this Agreement in form reasonably satisfactory to
Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller represents and warrants to Purchaser that:
Section 3.1 Organization and Qualification.
(a) Seller and PGH are each corporations duly organized,
validly existing, and in good standing under the laws of the State of
Oregon.
(b) Each of PGE, PGH II and their respective subsidiaries (i)
is a corporation or limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, (ii) has all requisite power and authority to own,
lease and operate its assets and properties and to carry on its
business as it is now being conducted, and (iii) is duly qualified,
licensed or admitted to do business and is in good standing to do
business in each jurisdiction in which the nature of its business or
the ownership or leasing of its assets and properties makes such
qualification necessary.
Section 3.2 Subsidiaries. Section 3.2 of the Seller Disclosure
Schedule contains a description as of the date hereof of all subsidiaries
and joint ventures of PGE and PGH II, including the name of each such
entity, the state or jurisdiction of its incorporation or organization and
PGE's or PGH II's interest therein, as the case may be. Except as disclosed
in Section 3.2 of the Seller Disclosure Schedule, all of the issued and
outstanding shares of capital stock or membership interests, as the case
may be, of each subsidiary of PGE and PGH II are validly issued, fully
paid, nonassessable and free of preemptive rights and are owned directly or
indirectly by PGE or PGH II, as the case may be, free and clear of any
liens, claims, encumbrances, security interests, equities, charges and
options of any nature whatsoever, and there are no outstanding
subscriptions, options, calls, contracts, voting trusts, proxies or other
commitments, understandings, restrictions, arrangements, rights or
warrants, including any right of conversion or exchange under any
outstanding security, instrument or other agreement, obligating any such
subsidiary to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of its capital stock or membership interests, as
the case may be, or obligating it to grant, extend or enter into any such
agreement or commitment.
Section 3.3 Capitalization.
(a) The authorized capital stock of PGE consists of 100,000,000
shares of PGE Common Stock and 30,000,000 shares of PGE Preferred
Stock. The authorized capital stock of PGH II consists of 10,000
shares of PGH II Common Stock. There are 42,758,877 shares of PGE
Common Stock issued and outstanding, all of which are owned by
Seller, and 300,000 shares of the 7.75% series of PGE Preferred Stock
issued and outstanding. There are 1,000 shares of PGH II Common Stock
issued and outstanding, all of which are owned by PGH. There are no
shares of capital stock held in the treasury of PGE or PGH II. All of
the outstanding shares of capital stock of PGE and PGH II are duly
authorized, validly issued, fully paid, nonassessable and free of
preemptive rights and are owned free and clear of any liens, claims,
mortgages, encumbrances, pledges, security interests, equities and
charges of any kind. There are no outstanding subscriptions, options,
calls, contracts, voting trusts, proxies or other commitments,
understandings, restrictions, arrangements, rights or warrants,
including any right of conversion or exchange under any outstanding
security, instrument or other agreement, obligating Seller, PGE, PGH
or PGH II to issue, deliver or sell, or cause to be issued, delivered
or sold, shares of the capital stock or other voting securities of PGE
or PGH II or their subsidiaries or obligating Seller, PGE, PGH or PGH
II to grant, extend or enter into any such agreement or commitment.
(b) As of the date of this Agreement, no bonds, debentures,
notes or other indebtedness of PGE, PGH II or any of their
subsidiaries having the right to vote (or which are convertible into
or exercisable for securities having the right to vote) (together,
"PGE Voting Debt") on any matters on which shareholders may vote are
issued or outstanding nor are there any outstanding options
obligating PGE, PGH II or any of their subsidiaries to issue or sell
any PGE Voting Debt or to grant, extend or enter into any option with
respect thereto.
Section 3.4 Authority; Non-Contravention; Statutory Approvals;
Compliance.
(a) Authority. Seller has all requisite power and authority to
enter into this Agreement and, subject to the Seller Required
Statutory Approvals, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation by Seller of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of
Seller and will be duly authorized prior to the Closing by all
necessary corporate action on the part of PGH. This Agreement has
been duly and validly executed and delivered by Seller and, assuming
the due authorization, execution and delivery of this Agreement by
Purchaser, constitutes the legal, valid and binding obligation of
Seller enforceable against Seller, in accordance with its terms.
(b) Non-Contravention. Except as disclosed in Section 3.4(b) of
the Seller Disclosure Schedule, the execution and delivery by Seller
of this Agreement do not, and the consummation of the transactions
contemplated hereby will not, violate, conflict with or result in a
breach of any provision of, or constitute a default (with or without
notice or lapse of time or both) under, or result in the termination
of, or accelerate the performance required by, or result in a right
of payment, termination, cancellation, modification or acceleration
of any obligation under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties
or assets of PGE or PGH II or any of their respective subsidiaries,
or, to the knowledge of any of Seller, PGE, PGH II or any subsidiary
of PGE or PGH II, any of PGE's or PGH II's joint ventures (any such
violation, conflict, breach, default, right of termination,
cancellation or acceleration, loss or creation, a "PGE Violation")
under, any provisions of (i) the articles of incorporation, bylaws or
similar governing documents of Seller, PGE or PGH II or any of their
respective subsidiaries or joint ventures, (ii) subject to obtaining
the Seller Required Statutory Approvals, any statute, law, ordinance,
rule, regulation, judgment, decree, order, injunction, writ, permit
or license of any Governmental Authority applicable to Seller, PGE,
PGH II or any of their respective subsidiaries or, to the knowledge of
any of Seller, PGE, PGH II or any subsidiary of PGE or PGH II, any of
their respective joint ventures or any of their respective properties
or assets, or (iii) subject to obtaining the third-party consents or
other approvals disclosed in Section 3.4(b) of the Seller Disclosure
Schedule (the "PGE Required Consents"), any note, bond, mortgage,
indenture, deed of trust, license, franchise, permit, concession,
contract, lease or other instrument, obligation or agreement of any
kind to which Seller, PGE, PGH II or any of their respective
subsidiaries or, to the knowledge of any of Seller, PGE, PGH II or any
subsidiary of PGE or PGH II, any of their respective joint ventures,
is now a party or by which any of them or any of their respective
properties or assets may be bound or affected, excluding from the
foregoing clauses (ii) and (iii) such PGE Violations as would not
have, in the aggregate, a PGE Material Adverse Effect.
(c) Statutory Approvals. Except as disclosed in Section 3.4(c)
of the Seller Disclosure Schedule, no declaration, filing or
registration with, or notice to or authorization, consent, finding by
or approval of, any Governmental Authority is necessary for the
execution and delivery of this Agreement by Seller or the
consummation by Seller of the transactions contemplated hereby, the
failure to obtain, make or give which would have, in the aggregate, a
PGE Material Adverse Effect (the "PGE Required Statutory Approvals"),
it being understood that references in this Agreement to "obtaining"
such PGE Required Statutory Approvals shall mean making such
declarations, filings or registrations; giving such notice; obtaining
such consents or approvals; and having such waiting periods expire as
are necessary to avoid a violation of law.
(d) Compliance. Except as disclosed in Section 3.4(d) of the
Seller Disclosure Schedule or as disclosed in the PGE SEC Reports
filed prior to the date hereof, neither PGE nor PGH II nor any of
their respective subsidiaries nor, to the knowledge of any of Seller,
PGE, PGH II or any subsidiary of PGE or PGH II, any of PGE's or PGH
II's joint ventures, is in violation of, or has been given notice or
been charged with, or, to the knowledge of any of Seller, PGE, PGH II
or any subsidiary of PGE or PGH II, under investigation with respect
to, any violation of, any law, statute, order, rule, regulation,
ordinance or judgment (including, without limitation, any applicable
Environmental Laws) of any Governmental Authority, except for
violations that, in the aggregate, do not have a PGE Material Adverse
Effect. Except as disclosed in Section 3.4(d) of the Seller Disclosure
Schedule, PGE, PGH II, their respective subsidiaries and, to the
knowledge of any of Seller, PGE, PGH II or any subsidiary of PGE or
PGH II, PGE's and PGH II's respective joint ventures have all Permits
necessary to conduct their respective businesses as currently
conducted, except those which the failure to obtain would not, in the
aggregate, have a PGE Material Adverse Effect.
Section 3.5 Reports and Financial Statements.
(a) PGE SEC Reports and Financial Statements. The filings
required to be made by PGE since January 1, 1997 under the Securities
Act, PUHCA, the Atomic Energy Act, the Exchange Act, applicable
Oregon laws and regulations and the Power Act have been filed with
the SEC, the OPUC, the FERC, or the NRC, as the case may be, and such
filings complied in all material respects with all applicable
requirements of the appropriate act and the rules and regulations
thereunder. The PGE SEC Reports, including without limitation
any financial statements or schedules included therein, at the time
filed did not, and any forms, reports or other documents filed by PGE
with the SEC after the date hereof will not, contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading. The PGE Financial Statements have been prepared in
accordance with GAAP (except as may be indicated therein and except
with respect to unaudited statements as permitted by Form 10-Q of the
Exchange Act) and fairly present the consolidated financial position
of PGE as of the respective dates thereof and the consolidated
results of operations and cash flows for the respective periods then
ended, as the case may be, subject, in the case of the interim
financial statements, to normal, recurring audit adjustments.
(b) PGH II Pro Forma Financial Statements. The pro forma
consolidated financial statements of PGH II set forth in Schedule
3.5(b) of the Seller Disclosure Schedule (the "PGH II Pro Formas")
have been properly presented to reflect the PGH Contribution and (for
1999 pro forma financial statements) the matters contemplated in
Section 6.5(i) of this Agreement. The PGH II Pro Formas fairly
present the information contained therein and reflect all adjustments
consisting of normal recurring entries, which are in the opinion of
management necessary for a fair statement of results. The assumptions
used in the preparation of the PGH II Pro Formas are reasonable, and
the adjustments used therein are appropriate, to give effect to the
transactions referred to therein. The PGH II Pro Formas have been
prepared on the basis of the historical financial statements of the
subsidiaries of PGH II which have been prepared in accordance with
GAAP (except that such subsidiary financial statements do not include
footnote disclosure and are subject, in the case of interim periods,
to normal recurring adjustments) and fairly present the financial
position and results of operations of such entities as of and for the
periods presented.
Section 3.6 Absence of Certain Changes or Events. Except as disclosed
in the PGE SEC Reports filed prior to the date hereof or as disclosed in
Section 3.6 or 3.7 of the Seller Disclosure Schedule, since June 30, 1999
with respect to PGE and its subsidiaries and September 30, 1999 with
respect to PGH II and its subsidiaries (i) PGE, PGH II and their respective
subsidiaries have conducted their business only in the ordinary course of
business consistent with past practice and no event has occurred that has
had, and no fact or condition exists that would have or, to the knowledge
of any of Seller, PGE, PGH II or any subsidiary of PGE or PGH II, is
reasonably likely to have, a PGE Material Adverse Effect, and (ii) none of
PGE, PGH II nor any of their respective subsidiaries has taken any action
that would have been prohibited by Article V hereof had this Agreement been
in effect at the time of such action.
Section 3.7 Litigation. Except as disclosed in the PGE SEC Reports
filed prior to the date hereof or as disclosed in Sections 3.7, 3.8, 3.10
or 3.13 of the Seller Disclosure Schedule, (i) there are no claims, suits,
actions or proceedings pending or, to the knowledge of any of Seller, PGE,
PGH II or any subsidiary of PGE or PGH II, threatened, nor, to the
knowledge of any of Seller, PGE, PGH II or any subsidiary of PGE or PGH II,
are there any investigations pending or threatened against, relating to or
affecting PGE, PGH II or any of their respective subsidiaries, and (ii)
there are no judgments, decrees, injunctions, rules or orders of any court,
governmental department, commission, agency, instrumentality or authority
or any arbitrator applicable to PGE, PGH II or any of their respective
subsidiaries, except for any of the foregoing under clauses (i) and (ii)
that individually or in the aggregate would not have a PGE Material Adverse
Effect.
Section 3.8 Tax Matters. Except as disclosed in Section 3.8 of the
Seller Disclosure Schedule and except for such matters as would not have a
PGE Material Adverse Effect: (i) all Tax Returns that are required to be
filed on or before the Closing Date by or with respect to PGE, PGH II or
any of their respective subsidiaries have been or will be duly and timely
filed and all such Tax Returns were (or if such returns have not been
filed, will be) true, correct and complete; (ii) all Taxes that are shown
to be due on such Tax Returns have been or will be timely paid in full;
(iii) all Tax withholding requirements imposed on or with respect to PGE,
PGH II or any of their respective subsidiaries have been satisfied in full
in all respects; (iv) there are no Tax liens upon the assets of PGE, PGH II
or any of their respective subsidiaries, except for liens for Taxes not yet
due; (v) no assessment, deficiency or adjustment has been asserted in
writing with respect to any such Tax Return; (vi) there is not in force any
extension of time with respect to the due date for the filing of any such
Tax Return or any waiver or agreement for any extension of time for the
assessment or payment of any Tax due with respect to the period covered by
any such Tax Return; and (vii) none of PGE, PGH II or any of their
respective subsidiaries is a party to any agreement that could obligate it
to make any payments that would not be deductible under Section 280G of the
Code.
Section 3.9 Employee Benefit Plans and Labor Agreements.
(a) Each Benefit Plan is listed in Section 3.9(a) of the Seller
Disclosure Schedule. Seller has made available to Purchaser true and
correct copies of each of the following, to the extent applicable,
with respect to each Benefit Plan: the most recent annual report
(Form 5500) filed with the IRS, the plan document, the trust
agreement, if any, the most recent summary plan description, the most
recent actuarial report, and the most recent determination letter, if
any, issued by the IRS.
(b) Each Benefit Plan has been administered in accordance with
its terms and provisions and in compliance with ERISA, the Code and
any other applicable laws except for such noncompliance as would not,
in the aggregate, have a PGE Material Adverse Effect. Since September
1, 1999, there has been no material change to any Benefit Plan.
(c) Each Benefit Plan intended to be qualified under Code
Section 401 satisfies in form the requirements of such section except
to the extent of amendments which are not required by law to be made
until a date after the date hereof.
(d) There are no actions, suits, or claims pending (other than
routine claims for benefits) or, to the knowledge of any of Seller,
PGE, PGH II or any subsidiary of PGE or PGH II, threatened against,
or with respect to, any Benefit Plan or its assets that could
reasonably be expected, in the aggregate, to have a PGE Material
Adverse Effect.
(e) To the knowledge of any of Seller, PGE, PGH II or any
subsidiary of PGE or PGH II, there is no matter pending (other than
routine qualification determination filings) with respect to any
Benefit Plan before the IRS, the Department of Labor, the PBGC or any
other Governmental Authority.
(f) As to each Benefit Plan subject to Title IV of ERISA, (i)
no notice of intent to terminate such Benefit Plan has been given
under Section 4041 of ERISA, (ii) no proceeding has been instituted
under Section 4042 of ERISA to terminate such Benefit Plan, (iii) no
liability to the PBGC has been incurred (other than with respect to
required premium payments), and (iv) the assets of the Benefit Plan
equal or exceed the actuarial present value of the benefit
liabilities, within the meaning of Section 4041 of ERISA, under the
Benefit Plan, based upon reasonable actuarial assumptions and the
asset valuation principles established by the PBGC.
(g) With respect to any employee benefit plan, within the
meaning of Section 3(3) of ERISA, that is not listed in Section
3.9(a) of the Seller Disclosure Schedule but that is sponsored,
maintained, or contributed to, or has been sponsored, maintained, or
contributed to within six years prior to the date hereof, by Seller
or any Commonly Controlled Entity, (i) no withdrawal liability,
within the meaning of Section 4201 of ERISA, has been incurred, which
withdrawal liability has not been satisfied, and (ii) no liability to
the PBGC has been incurred by any Commonly Controlled Entity, which
liability has not been satisfied.
(h) Except as set forth in Section 3.9(h) of the Seller
Disclosure Schedule, no Benefit Plan provides retiree medical or
retiree life insurance benefits to any Person upon retirement or
termination of employment, other than as required by the provisions
of Sections 601 through 608 of ERISA and Section 4980B of the Code.
(i) None of PGE, PGH II or any of their respective subsidiaries
contributes to or has an obligation to contribute to, and has not
within six years prior to the date of this Agreement contributed or
had an obligation to contribute to, a multiemployer plan within the
meaning of Section 3(37) of ERISA.
(j) The vacation policies of PGE and PGH II provide for
carryover of vacation from one calendar year to the next as described
in Section 3.9(j) of the Seller Disclosure Schedule.
(k) Other than as set forth in or disclosed in Section 3.9(k)
of the Seller Disclosure Schedule, the consummation or announcement
of any transaction contemplated by this Agreement will not (either
alone or upon the occurrence of any additional or further acts or
events) result in any (i) payment (whether of severance pay or
otherwise) becoming due from PGE, PGH II or any of their respective
subsidiaries under any applicable Benefit Plans to any officer,
employee, former employee or director thereof or to the trustee under
any "rabbi trust" or similar arrangement, or (ii) benefit under any
Benefit Plan being established or becoming accelerated, vested or
payable, except for a payment or benefit that would have been payable
under the same terms and conditions without regard to the
transactions contemplated by this Agreement.
(l) To the knowledge of any of Seller, PGE, PGH II or any
subsidiary of PGE or PGH, as of the date hereof, there is no current
labor union representation issue involving employees of PGE or PGH II
or any of their respective subsidiaries, nor does Seller know of any
activity or proceeding of any labor organization (or representative
thereof) or employee group (or representative thereof) to organize
any such employees. Except as disclosed in the PGE SEC Reports or as
disclosed in Section 3.9(l) of the Seller Disclosure Schedule: (i)
neither PGE, PGH II nor any of their respective subsidiaries is a
party to any collective bargaining agreement or other labor agreement
with any union or labor organization; (ii) there is no unfair labor
practice charge or grievance arising out of a collective bargaining
agreement or other grievance procedure against PGE, PGH II or any of
their respective subsidiaries pending, or to the knowledge of any of
Seller, PGE, PGH II or any subsidiary of PGE or PGH II, threatened,
that has, or reasonably may be expected to have, a PGE Material
Adverse Effect; and (iii) there is no strike, dispute, slowdown, work
stoppage or lockout pending, or to the knowledge of any of Seller,
PGE, PGH II or any subsidiary of PGE or PGH II, threatened, against or
involving PGE, PGH II or any of their respective subsidiaries that has
or, reasonably may be expected to have, a PGE Material Adverse Effect.
(m) There is no act, omission or condition that could result in
liability for PGE, PGH II or Purchaser, or any of their respective
subsidiaries, with respect to any plan sponsored, maintained,
contributed to or required to be contributed to by Seller or by any
entity (other than PGE, PGH II or their respective subsidiaries)
under common control with Seller within the meaning of Section
414(b)(c) or (m) of the Code or Section 4001 of ERISA that would be a
Benefit Plan if it was sponsored, maintained or contributed to or
required to be contributed to by PGE, PGH II or any of their
respective subsidiaries.
Section 3.10 Environmental Protection.
------------------------
(a) Compliance. Except as disclosed in Section 3.10 of the
Seller Disclosure Schedule or as disclosed in the PGE SEC Reports,
PGE, PGH II and each of their respective subsidiaries has been and is
in compliance with all applicable Environmental Laws, except where
the failure to be so in compliance would not have a PGE Material
Adverse Effect. Except as disclosed in Section 3.10 of the Seller
Disclosure Schedule or as disclosed in the PGE SEC Reports, neither
PGE, PGH II nor any of their respective subsidiaries has received any
written notice from any Person or Governmental Authority that alleges
that PGE, PGH II or any of their respective subsidiaries is not in
compliance with applicable Environmental Laws, except where the
failure to be so in compliance would not have a PGE Material Adverse
Effect.
(b) Environmental Permits. Except as disclosed in Section 3.10
of the Seller Disclosure Schedule or as disclosed in the PGE SEC
Reports, each of PGE, PGH II and their respective subsidiaries has
obtained or has applied for all Environmental Permits necessary for
the construction of their facilities and the conduct of their
operations, and all such required Environmental Permits are in good
standing or, where applicable, a renewal application has been timely
filed and is pending agency approval, and PGE, PGH II and their
respective subsidiaries are in compliance with all terms and
conditions of all such Environmental Permits, except where the
failure to obtain or be in such compliance would not have a PGE
Material Adverse Effect. Except as disclosed in Section 3.10 of the
Seller Disclosure Schedule or as disclosed in the PGE SEC Reports, to
the knowledge of any of Seller, PGE, PGH II or any subsidiary of PGE
or PGH II, there are no pending Environmental Permit proceedings or
Environmental Permit renewal proceedings that are reasonably likely to
result in the imposition of more stringent terms or conditions in said
Environmental Permits that would have a PGE Material Adverse Effect.
(c) Environmental Claims. Except as disclosed in Section 3.10
of the Seller Disclosure Schedule or as disclosed in the PGE SEC
Reports, there is no Environmental Claim pending, or to the knowledge
of any of Seller, PGE, PGH II or any subsidiary of PGE or PGH II,
threatened against PGE, PGH II or any of their respective
subsidiaries that, if adversely determined, would have a PGE Material
Adverse Effect.
(d) Orders. Except as disclosed in Section 3.10 of the Seller
Disclosure Schedule or as disclosed in the PGE SEC Reports, neither
PGE, PGH II or any of their respective subsidiaries is subject to any
judicial or administrative orders or decrees pursuant to any
Environmental Law that would have a PGE Material Adverse Effect.
(e) Releases. Except as disclosed in Section 3.10 of the Seller
Disclosure Schedule or as disclosed in the PGE SEC Reports, there has
been no Release of any Hazardous Material that would be reasonably
likely to form the basis of any Environmental Claim against PGE, PGH
II or any subsidiary of PGE or PGH II, except for Releases of
Hazardous Materials the liability for which would not have a PGE
Material Adverse Effect.
(f) Predecessors. Except as disclosed in Section 3.10 of the
Seller Disclosure Schedule or as disclosed in the PGE SEC Reports,
there are no Environmental Claims pending or threatened, or any
Releases of Hazardous Materials that would be reasonably likely to
form the basis of any Environmental Claims with respect to any
predecessor of PGE, PGH II or any subsidiary of PGE or PGH II, that
would have a PGE Material Adverse Effect.
Section 3.11 Regulation as a Utility. PGE is subject to regulation as
a "public utility" by the OPUC pursuant to the law of the State of Oregon
and is subject to regulation as a "public utility" by the FERC pursuant to
Part II of the Power Act. PGE is not subject to regulation as a public
utility, public utility holding company or public service company (or
similar designation) by any other state in the United States or by any
foreign country. PGE is a subsidiary of Seller, which is exempt, pursuant
to Section 3(a)(1) of PUHCA, and SEC Rule 2, from regulation under PUHCA
and the SEC's rules thereunder, except Section 9(a)(2) of PUHCA. Neither
PGH II or any subsidiary thereof is subject to regulation as a public
utility, public utility holding company or public service company (or
similar designation) by the federal government of the U.S. or any state or
political subdivision thereof or any foreign country.
Section 3.12 Insurance. Each of PGE, PGH II and each of their
respective subsidiaries is, and has been continuously since the later of
January 1, 1997 and the date of its formation, insured in such amounts and
against such risks and losses as are customary for companies conducting the
respective businesses conducted by PGE, PGH II and their respective
subsidiaries during such time period. Neither PGE, PGH II nor any of their
respective subsidiaries has received any notice of cancellation or
termination with respect to any material insurance policy. All material
insurance policies covering the respective businesses conducted by PGE, PGH
II and their respective subsidiaries are valid and enforceable policies.
Section 3.13 Status of PGE Nuclear Facility. Except as set forth in
Section 3.13(2) of the Seller Disclosure Schedule, the operation of the PGE
Nuclear Facility and the operations related to decommissioning of the PGE
Nuclear Facility have at all times been conducted in compliance with
applicable health, safety, regulatory and other legal requirements, except
where the failure to be so in compliance would not have a PGE Material
Adverse Effect. Such legal requirements include, but are not limited to,
the NRC license for the Trojan Nuclear Plant pursuant to 10 C.F.R. Part 50,
the NRC license for the Trojan Independent Storage of Spent Nuclear Fuel
and High-Level Radioactive Waste (ISFSI) pursuant to 10 C.F.R. Part 72 and
Siting Statutes of the State of Oregon at ORS 469.320 (formerly Section 4
of Chapter 609, Oregon Laws of 1971) (the term "PGE Nuclear Facility"
includes both the Trojan Nuclear Plant and the Trojan ISFSI Facility).
Except as set forth in Section 3.13(2) of the Seller Disclosure Schedule,
neither the operations of the PGE Nuclear Facility nor the operations
related to decommissioning of the PGE Nuclear Facility are the subject of
any outstanding notices of violation or requests for information from the
NRC or any other agency with jurisdiction over such facility. PGE
maintains, and is in compliance with, emergency plans designed to protect
the health and safety of the public in the event of an unplanned release of
radioactive materials from the PGE Nuclear Facility, and the NRC has
determined that such plans are in compliance with its requirements.
Liability insurance to the full extent required by law for non-operating
nuclear facilities and consistent with Seller's view of the risks inherent
in the decommissioning of the PGE Nuclear Facility remains in full force
and effect regarding such facility, and the amount of such liability
insurance has been approved by the NRC. Plans for the decommissioning of
the PGE Nuclear Facility, and for the storage of spent nuclear fuel,
conform with the requirements of applicable law, and PGE has funded such
plans to the extent required by law. The Decommissioning Plan is a true and
correct copy of the decommissioning plan approved by the NRC, which plan
has been amended through Revision 6 as permitted by NRC regulations. The
Trojan co-owners, PGE, the City of ▇▇▇▇▇▇ (acting by and through the Eugene
Water & Electric Board) and PacifiCorp (collectively, the "Trojan
Co-Owners"), have severally agreed to fund their shares of all
decommissioning costs relating to Trojan, and neither Seller nor PGE, PGH
II or their respective subsidiaries has any reason to believe that the
Trojan Co-Owners will not fund such decommissioning costs in the future.
The Trojan ISFSI final Safety Analysis Report is a true and correct copy of
the safety plan submitted to the NRC in accordance with NRC requirements.
Except as disclosed in Section 3.13 of the Seller Disclosure Schedule,
Seller has no intention of varying PGE's operations from those described in
the Decommissioning Plan and the Trojan ISFSI SAR and neither Seller nor
PGE has any other material commitments (whether written or oral) to
Governmental Authorities with respect to the PGE Nuclear Facility.
Section 3.14 Year 2000 Compliance. Each of PGE and PGH II has (i)
initiated a review and assessment of all material areas within its and each
of its subsidiaries' business and operations (including those affected by
major suppliers, vendors and customers) that could be adversely affected by
the risk that computer applications used by PGE, PGH II or any of their
respective subsidiaries (or any of their respective major suppliers,
vendors and customers) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date
after December 31, 1999 (the "Year 2000 Problem"), (ii) developed a plan
and timeline for addressing the Year 2000 Problem on a timely basis each as
described in the Form 10-Q filed by PGE for the quarter ended June 30,
1999, and (iii) to date, implemented that plan in accordance with that
timetable. PGE reasonably believes that its mission-critical internal
systems (meaning internal systems that are necessary for PGE to reliably
and safely deliver electric service, which includes embedded systems) are
capable of providing or being adapted to provide uninterrupted millennium
functionality to record, store, process and present calendar dates falling
on or after January 1, 2000 in substantially the same manner and with the
same functionality as such systems record, store, process and present such
calendar dates falling on or before December 31, 1999, other than such
interruptions in millennium functionality that could not, individually or
in the aggregate, reasonably be expected to result in a PGE Material
Adverse Effect. Seller and PGE reasonably believe as of the date hereof
that the remaining cost of adaptations referred to in the foregoing
sentence will not exceed the amounts reflected in the Form 10-Q filed by
PGE for the quarter ended June 30, 1999.
Section 3.15 Contracts with Enron. Section 3.15 of the Seller
Disclosure Schedule sets forth, as of the date hereof, a correct and
complete list of all material contracts between PGE, PGH II or any of their
respective subsidiaries and Seller and its subsidiaries (other than any
subsidiary of Seller that is a subsidiary of Seller only by virtue of being
a subsidiary of PGE or PGH II) (the "Related Party Contracts").
Section 3.16 Limitation of Representations and Warranties. EXCEPT FOR
THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE III, SELLER IS
NOT MAKING ANY OTHER REPRESENTATIONS OR WARRANTIES, WRITTEN OR ORAL,
STATUTORY, EXPRESS OR IMPLIED, CONCERNING THE SHARES OR THE BUSINESS,
ASSETS, OR LIABILITIES OF PGE AND PGH II.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller that:
Section 4.1 Organization and Qualification. Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of Nevada.
Section 4.2 Authority; Non-Contravention; Statutory Approvals.
(a) Authority. Purchaser has all requisite power and authority
to enter into this Agreement and, subject to the Purchaser Required
Statutory Approvals, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation by Purchaser of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the
part of Purchaser. This Agreement has been duly and validly executed
and delivered by Purchaser and, assuming the due authorization,
execution and delivery of this Agreement by Seller, constitutes the
legal, valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms.
(b) Non-Contravention. Except as disclosed in Section 4.2(b) of
the Purchaser Disclosure Schedule, the execution and delivery by
Purchaser of this Agreement do not, and the consummation of the
transactions contemplated hereby will not, violate, conflict with or
result in a breach of any provision of, or constitute a default (with
or without notice or lapse of time or both) under, or result in the
termination of, or accelerate the performance required by, or result
in a right of payment, termination, cancellation, modification or
acceleration of any obligation under, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the
properties or assets of Purchaser or any of its subsidiaries or, to
Purchaser's knowledge, any of its joint ventures (any such violation,
conflict, breach, default, right of termination, cancellation or
acceleration, loss or creation, a "Purchaser Violation"), under, any
provisions of (i) the articles of incorporation, bylaws or similar
governing documents of Purchaser or any of its subsidiaries or joint
ventures, (ii) subject to obtaining the Purchaser Required Statutory
Approvals, any statute, law, ordinance, rule, regulation, judgment,
decree, order, injunction, writ, permit or license of any Governmental
Authority, applicable to Purchaser or any of its subsidiaries or, to
Purchaser's knowledge, any of its joint ventures, or any of their
respective properties or assets or (iii) subject to obtaining the
third-party consents or other approvals disclosed in Section 4.2(b) of
the Purchaser Disclosure Schedule (the "Purchaser Required Consents"),
any note, bond, mortgage, indenture, deed of trust, license,
franchise, permit, concession, contract, lease or other instrument,
obligation or agreement of any kind to which Purchaser or any of its
subsidiaries or, to Purchaser's knowledge, any of its joint ventures,
is now a party or by which any of them or any of their respective
properties or assets may be bound or affected, excluding from the
foregoing clauses (ii) and (iii) such Purchaser Violations that would
not have, in the aggregate, a material adverse effect on the ability
of Purchaser to perform its obligations under this Agreement or
reasonably be expected to delay or otherwise interfere with the
obtaining of the Purchaser Required Statutory Approvals or the Seller
Required Statutory Approvals.
(c) Statutory Approvals. Except as disclosed in Section 4.2(c)
of the Purchaser Disclosure Schedule, no material declaration, filing
or registration with, or notice to or authorization, consent, finding
by or approval of, any Governmental Authority is necessary for the
execution and delivery of this Agreement by Purchaser or the
consummation by Purchaser of the transactions contemplated hereby
(the "Purchaser Required Statutory Approvals"), it being understood
that references in this Agreement to "obtaining" such Purchaser
Required Statutory Approvals shall mean making such declarations,
filings or registrations; giving such notice; obtaining such consents
or approvals; and having such waiting periods expire as are necessary
to avoid a violation of law.
Section 4.3 Availability of Funds. Purchaser will have sufficient
funds available to it to pay the Purchase Price on the Closing Date and to
enable Purchaser to timely perform all of its obligations under this
Agreement. Purchaser has delivered to Seller evidence of the availability
of such funds, including copies of binding commitments in form and
substance acceptable to Seller.
Section 4.4 Purchase for Investment. Purchaser is acquiring the
Shares for its own account, for investment only, without a view to
distribution, as that phrase has meaning under the Securities Act and rules
and regulations of the SEC. Purchaser understands that the effect of the
representation and warranty made herein is that the Shares must be held by
it indefinitely unless subsequently registered under the Securities Act or
unless an exemption from registration is available at the time of any
proposed sale or other transfer thereof.
Section 4.5 Due Diligence. Purchaser is experienced in the evaluation
and purchase of companies such as PGE and PGH II. In making the decision to
enter into this Agreement and consummate the transactions contemplated
hereby, Purchaser has relied solely on its own independent investigation of
PGE and PGH II and upon the representations and warranties and covenants in
this Agreement.
Section 4.6 No Knowledge of Breach. Purchaser does not know of any
breach of warranty or any misrepresentation by Seller hereunder.
Section 4.7 Regulation as a Utility. As of the date hereof, Purchaser
is exempt from the registration and all other regulations and requirements
of PUHCA and the rules and regulations promulgated thereunder, other than
from Section 9(a)(2) thereof, pursuant to the rules of the SEC under
Section 3(a)(1) of PUHCA. Sierra Pacific Power Company, a wholly-owned
subsidiary of Purchaser, is regulated as a public utility in the States of
Nevada and California and in no other state. Nevada Power Company, a
wholly-owned subsidiary of Purchaser, is regulated as a public utility in
the State of Nevada and in no other state. Except as set forth in this
Section 4.7, neither Purchaser nor any "subsidiary company" or "affiliate"
(as each such term is defined in PUHCA) of Purchaser is subject to
regulation as a public utility or public service company (or similar
designation) by any other state in the United States or any foreign
country. Tuscarora Gas Pipeline Company, a wholly-owned subsidiary of
Purchaser, is a general partner in Tuscarora Gas Transmission Company,
which is a general partnership that owns and operates a FERC-regulated
interstate natural gas pipeline.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE CLOSING
After the date hereof and prior to the Closing or earlier termination
of this Agreement, Seller agrees, except as expressly contemplated or
permitted in this Agreement, or to the extent Purchaser shall otherwise
consent in writing, which consent shall not be unreasonably
withheld, as follows:
Section 5.1 Ordinary Course of Business. Seller shall cause PGE, PGH
II and each of PGE's and PGH II's respective subsidiaries to, carry on
their respective businesses in all material respects in the usual, regular
and ordinary course, consistent with past practice, and shall cause PGE,
PGH II and each of their respective subsidiaries to, use all reasonable
efforts to (i) preserve intact their present business organizations and
goodwill, preserve the goodwill and relationships with customers, suppliers
and others having business dealings with them, (ii) subject to prudent
management of workforce needs, keep available the services of their present
officers and employees as a group, (iii) maintain and keep their material
properties and assets in as good repair and condition as at present,
subject to ordinary wear and tear, and maintain supplies and inventories in
quantities consistent with past practice, (iv) with respect to wholesale
power and energy trading and transactions, comply with prudent policies,
practices and procedures with respect to risk management and trading
limitations, all to the end that their goodwill and ongoing businesses
shall not be impaired in any material respect at the Closing, and (v)
comply with all applicable laws and orders of Governmental Authorities
except for violations that, in the aggregate, would not have a PGE Material
Adverse Effect.
Section 5.2 Dividends and Repurchases.
(a) Restrictions on Dividends and Repurchases. Seller shall not
permit PGE, PGH II or any of PGE's and PGH II's respective
subsidiaries to: (i) declare or pay any dividends on or make other
distributions in respect of any of their capital stock other than (A)
dividends by a direct or indirect wholly-owned subsidiary of PGE or
PGH II to PGE or PGH II, as the case may be, or another direct or
indirect wholly-owned subsidiary of PGE or PGH II, (B) dividends by a
less than a wholly-owned subsidiary of PGE or PGH II consistent with
past practice, (C) dividends on the PGE Preferred Stock outstanding
on the date hereof, (D) dividends on the PGE Common Stock in an
amount equal to the lesser of (x) the aggregate amount of
consolidated net income after income taxes (for this purpose income
taxes shall mean any book provision for income taxes consistent with
the manner reported in the PGE SEC Reports) available to common stock
of PGE and its subsidiaries (for purposes of this Section 5.2, "net
income") for the period from January 1, 1999 through the Closing Date
or (y) an amount equal to the aggregate of $129.1 million for 1999,
$142.6 million for 2000 and, if applicable, $143.8 million for 2001
(irrespective of when such dividends are actually declared or paid
and prorated for the year in which the Closing occurs based upon the
number of days in such year before and after the Closing Date) less,
in the case of (x) or (y), any dividends on the PGE Common Stock
declared and paid by PGE during the period from January 1, 1999 to
the date hereof, and (E) the transactions contemplated by Section
6.5(i); provided, however, that the provisions of this Section
5.2(a)(i) shall not limit or restrict payments by any of PGE, PGH II
or their respective subsidiaries to Seller in respect of intercompany
payables or accounts or their liability to Seller on account of PGE
or PGH II and their respective subsidiaries being a member or members
of Seller's affiliated group for federal income tax purposes and, if
applicable, any similar combined or unitary group for state income
tax purposes other than any liability arising by virtue of Treasury
Regulations ss.1.1502-6 or any similar state provision (the "Tax
Sharing Payment"); and provided, further, that PGE will not pay
dividends (not including payments in respect of intercompany payables
or accounts or Tax Sharing Payments) in 1999 in an amount in excess
of $129.1 million; (ii) split, combine or reclassify any of PGE's or
PGH II's capital stock or the capital stock of any subsidiary of PGE
or PGH II or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of, or in substitution for, shares
of PGE's or PGH II's capital stock or the capital stock of any
subsidiary of PGE or PGH II; or (iii) redeem, repurchase or otherwise
acquire any shares of PGE's or PGH II's capital stock or the capital
stock of any subsidiary of PGE or PGH II other than intercompany
acquisitions of capital stock. For purposes of this Section 5.2(a),
any gain on the sale of the assets referred to in Sections 5.6(6) and
5.6(12) of the Seller Disclosure Schedule shall be excluded from net
income of PGE.
Notwithstanding anything herein to the contrary, any Tax
Sharing Payment to be made by PGE or PGH II with respect to any
taxable period shall not exceed an amount equal to the hypothetical
Tax liability of each such entity with respect to such taxable period
calculated on a separate company basis as if PGE and PGH II were not
members of Seller's consolidated group or, if applicable, any
combined or unitary state group. If PGE or PGH II makes any Tax
Sharing Payment in respect of Taxes that are calculated on an
estimated basis (an "Estimated Tax Payment") and the aggregate of
such Estimated Tax Payment with respect to a taxable period exceeds
the actual Tax Sharing Payment that would have been payable with
respect to such taxable period, Seller shall pay to Purchaser an
amount equal to such excess; if the amount of the aggregate of such
Estimated Tax Payment with respect to a taxable period is less than
the actual Tax Sharing Payment that would have been payable with
respect to such taxable period, Purchaser shall pay to Seller an
amount equal to such difference.
(b) Stub Period Dividend. At least five business days before the
anticipated Closing Date, Seller will provide Purchaser with Seller's
calculation of the net income of PGE for the period commencing on the
date after the date of the most recent historical financial statements
filed by PGE with the SEC and ending on the Closing Date (as estimated
by Seller with respect to the operations through the Closing Date and
any other portion of such period for which historical financial
information is unavailable) (the "Stub Period"). In addition to any
amount of dividends that may otherwise be paid to Seller in accordance
with the terms of Section 5.2(a) for periods on or prior to the date
of the most recent historical financial statements filed by PGE with
the SEC, Seller may, subject to the limitations set forth in Section
5.2(a)(i)(D)(y) above, cause PGE to pay a dividend to it prior to
Closing in an amount equal to the amount of net income reflected in
such calculation. If Purchaser disagrees with Seller's calculation of
net income for the Stub Period, its sole remedy in respect thereof
shall be to refer the matter to PGE's auditors who shall, upon
Purchaser's request, provided that such request is made to Seller
within 15 business days after the Closing Date, calculate PGE's net
income for the Stub Period. The auditor's sole inquiry under such
circumstances will be with respect to the net income of PGE for the
Stub Period. The calculation of PGE's net income for the Stub Period
by its auditors shall be made within 45 days of such request and shall
be final and binding on the Parties. If such auditors determine that
PGE's net income for the Stub Period is more than 1% less than the
amount calculated by Seller, Seller will pay the amount of such
difference to Purchaser (provided that the amount of such difference
was included in a dividend paid by PGE to Seller prior to Closing). If
such auditors determine that PGE's net income is more than 1% greater
than the amount calculated by Seller, Purchaser will, subject to the
limitations set forth in Section 5.2(a)(i)(D) above, pay the amount of
the difference to Seller. Payments required pursuant to this Section
5.2(b) will be made within two business days of the delivery of the
auditors report. Purchaser will be responsible for all out of pocket
costs and expenses relating to the accounting review process unless
Seller is determined to have overstated net income for the Stub Period
by an amount equal to or greater than 5% of the net income reported by
Seller for the Stub Period in which case Seller shall be responsible
for such costs and expenses.
Section 5.3 Issuance of Securities. Except as disclosed in Section
5.3 of the Seller Disclosure Schedule, Seller shall not permit PGE, PGH II
or any of PGE's or PGH II's respective subsidiaries to, issue, deliver or
sell, or authorize or propose the issuance, delivery or sale of, any shares
of PGE's or PGH II's capital stock or the capital stock of any subsidiary
of PGE or PGH II or any class or any securities convertible into or
exchangeable for, or any rights, warrants or options to acquire, any such
shares of capital stock, other than issuances by direct or indirect
wholly-owned subsidiaries of PGE or PGH II of securities to PGE or PGH II
or to other direct or indirect wholly-owned subsidiaries of PGE or PGH II.
Section 5.4 Charter Documents. Neither PGE nor PGH II shall amend or
propose to amend its certificate or articles of incorporation or by-laws in
any way that would adversely affect the consummation of the transactions
contemplated by this Agreement.
Section 5.5 Acquisitions. Except as disclosed in Section 5.5 of the
Seller Disclosure Schedule, Seller shall not permit PGE, PGH II or any of
PGE's or PGH II's subsidiaries to, acquire or agree to acquire, by merging
or consolidating with, or by purchasing a substantial equity interest in or
a substantial portion of the assets of, or by any other manner, any
business or any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree to acquire
any assets material to such companies taken as a whole, other than in the
ordinary course of business consistent with past practice, not to exceed
$20 million in the aggregate.
Section 5.6 No Dispositions. Except as disclosed in Section 5.6 of
the Seller Disclosure Schedule, Seller shall not permit PGE, PGH II or any
of PGE's or PGH II's subsidiaries to, sell, lease, license, encumber or
otherwise dispose of, any assets material to such companies taken as a
whole, other than in the ordinary course of business consistent with past
practice, not to exceed $20 million in the aggregate.
Section 5.7 Indebtedness. Except as disclosed in Section 5.7 of the
Seller Disclosure Schedule, Seller shall not permit PGE or PGH II or any of
PGE's or PGH II's subsidiaries to, incur or guarantee any indebtedness
(including any debt borrowed or guaranteed or otherwise assumed, including,
without limitation, the issuance of debt securities or warrants or rights
to acquire debt) other than (a) short-term indebtedness in an amount not to
exceed the amount of indebtedness provided for in PGE's current short term
credit facilities (b) long-term indebtedness incurred in connection with
the refinancing of existing indebtedness either at its stated maturity or
at a lower cost of funds and (c) up to $200 million in additional
indebtedness, including not more than $100 million in additional
indebtedness, having maturities of five years or less from its date of
incurrence.
Section 5.8 Capital Expenditures. Except as disclosed in Section 5.8
of the Seller Disclosure Schedule or as required by law, Seller shall not
permit PGE, PGH II or any of PGE's or PGH II's subsidiaries to, make any
capital expenditures, other than (i) capital expenditures previously
budgeted for the remainder of 1999, and (ii) capital expenditures to repair
or replace facilities destroyed or damaged due to casualty or accident
(whether or not covered by insurance to the equivalent state prior to such
casualty or accident).
Section 5.9 Compensation, Benefits. Except as disclosed in Section
5.9 of the Seller Disclosure Schedule, Seller shall not permit PGE or PGH
II or any of PGE's or PGH II's subsidiaries to, (a) enter into, adopt,
amend or renew (except as may be required by applicable law), accept
assignment of or increase the amount or accelerate the payment or vesting
of any benefit or amount payable under, any employee benefit plan or other
contract, agreement, commitment, arrangement, plan or policy maintained by,
contributed to or entered into by PGE, PGH II or any of their respective
subsidiaries, or increase, or enter into any contract, agreement,
commitment or arrangement to increase in any manner, the compensation or
fringe benefits, or otherwise to extend, expand or enhance the engagement,
employment or any related rights, of any director, officer or other
employee of PGE or PGH II or any of their respective subsidiaries, except
(i) pursuant to binding legal commitments and (ii) other than with respect
to executive officers of PGE or PGH II (including without limitation ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇) for whom this
clause (ii) shall not apply, for normal (including incentive) increases,
extensions, expansions, enhancements, amendments or adoptions, renewals or
assignments in the ordinary course of business consistent with past
practice that, in the aggregate, do not result in a material increase in
benefits or compensation expense to PGE, PGH II and their respective
subsidiaries taken as a whole or (b) enter into, amend, accept assignment
of or renew any employment, severance, special pay arrangement with respect
to termination of employment or other similar contract, agreement or
arrangement with any director or officer of PGE or PGH II or any of their
respective subsidiaries except, other than with respect to executive
officers of PGE or PGH II (including without limitation ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇) for whom this exception
shall not apply, in the ordinary course of business consistent with past
practice.
Section 5.10 Cooperation, Notification. Seller shall: (a) confer on a
regular and frequent basis with one or more representatives of Purchaser to
discuss the general status of PGE's and PGH II's ongoing operations; (b)
promptly notify Purchaser of any significant changes in PGE's or PGH II's
business, properties, financial condition or results of operations; and (c)
advise Purchaser of any change or event that has had or, insofar as
reasonably can be foreseen, is reasonably likely to result in, a PGE
Material Adverse Effect.
Section 5.11 Insurance. Seller shall cause PGE, PGH II and each of
PGE's and PGH II's subsidiaries to, maintain with financially responsible
insurance companies insurance in such amounts and against such risks and
losses as are customary for companies engaged in their respective
businesses.
Section 5.12 Permits. Seller shall cause PGE, PGH II and each of PGE's
and PGH II's subsidiaries to use commercially reasonable efforts to
maintain in effect all existing Permits pursuant to which PGE, PGH II or
any of their respective subsidiaries operate.
Section 5.13 Nuclear Operations. Seller shall not permit PGE or any of
its subsidiaries to (i) breach any existing contract or arrangement for the
disposal or storage of spent nuclear fuel or components of the PGE Nuclear
Facility; or (ii) obligate itself to the payment of decommissioning
expenses for the PGE Nuclear Facility, or propose or adopt a budget for
such decommissioning expenses, which exceeds the decommissioning forecast
set forth in Section 5.13 of the Seller Disclosure Schedule, by an amount
sufficient to produce a PGE Material Adverse Effect when measured over the
life of the payment obligation or budget for such expenses. Seller shall
not permit PGE to engage in, or enter into the business of undertaking to
engage in, the transportation, treatment or disposal of radioactive waste
generated by third parties. To the extent not prohibited by applicable
laws, regulations, facility licenses, permits and agreements with third
parties existing as of the date of this Agreement, at all times prior to
the Closing, Seller shall make available to Purchaser, upon its request,
any existing information relevant to the operation or decommissioning of
the PGE Nuclear Facility, and shall inform Purchaser promptly of any
proposed material changes to the Decommissioning Plan. If Seller is
prohibited by agreement with a third party from providing information to
Purchaser, Seller shall use reasonable efforts (including taking into
account Purchaser's willingness to execute appropriate confidentiality
agreements) to obtain the consent of such third party to the release of
such information. In addition, upon reasonable notice, Seller shall allow
access by two individuals designated by Purchaser, to all portions of the
PGE Nuclear Facility, affording those Persons the same degree of access to
facilities and information to the same extent afforded the Vice President
of Nuclear and Thermal Operations. Access by the individuals selected
by Purchaser shall be pursuant to existing procedures for access to the PGE
Nuclear Facility, including any security clearance and training normally
required of PGE nuclear personnel.
Section 5.14 Discharge of Liabilities. Seller shall not permit PGE,
PGH II and each of PGE's and PGH II's subsidiaries to pay, discharge or
satisfy any material claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction, in the ordinary course of business consistent
with past practice (which includes the payment of final and unappealable
judgments) or in accordance with their terms, of liabilities reflected or
reserved against in, or contemplated by, the most recent consolidated
financial statements (or the notes thereto) of such party included in PGE
SEC Reports or the September 30, 1999 balance sheet included in the PGI II
Pro Formas, as the case may be, or incurred in the ordinary course of
business consistent with past practice.
Section 5.15 Contracts. Seller shall not permit PGE, PGH II and each
of PGE's and PGH II's subsidiaries to, except in the ordinary course of
business consistent with past practice, (i) to modify, amend, terminate or
fail to use commercially reasonable efforts to renew any material contract
to which PGE, PGH II or any of PGE's or PGH II's subsidiaries is a party or
waive, release or assign any material rights or claims or (ii) to enter
into any new material contracts except as otherwise expressly permitted by
this Agreement. For purposes of the restrictions in this Section 5.15 on
modifications, amendments or terminations of contracts, a contract will be
deemed to be a material contract if the modification, amendment or
termination of such contract shall result in an incremental payment or
payments during the 12 month period immediately following such
modification, amendment or termination to any of PGE, PGH II or their
respective subsidiaries of $1.0 million or more, or, in the case of
contracts with a term extending beyond the Closing Date, $5.0 million or
more in the aggregate.
Section 5.16 Certain Actions. Seller will not permit PGE, PGH II or
any of their respective subsidiaries to adopt a plan of complete or partial
liquidation or resolutions providing for or authorizing such liquidation or
a dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization.
Section 5.17 Non-Solicitation. Seller agrees that, during the period
beginning on the date hereof and ending one year after the Closing Date,
neither it nor any of its subsidiaries (excluding PGE, PGH II and their
respective subsidiaries) will, directly or indirectly, solicit for
employment or attempt to hire or hire for employment any Person who is
employed by PGE, PGH II or any of their respective subsidiaries on the date
of this Agreement or at any time prior to the Closing Date; provided,
however, that the restrictions in this Section 5.17 shall not be applicable
to any Person that is terminated without cause by PGE, PGH II or any of
their respective subsidiaries after the Closing Date; and, provided,
further, that general advertising of employment opportunities and posting
of employment opportunities on Seller's internal employee bulletin board
shall be permitted hereunder and such activities shall be deemed not to
violate the non-solicitation or attempt to hire provisions of this Section
5.17.
Section 5.18 Accounting Matters. Seller shall not permit PGE, PGH II
or any of their respective subsidiaries to make any material changes in any
of their accounting methods, policies or procedures, including without
limitation, in calculating net income, except as required by law, rule,
regulation or GAAP. In addition, neither Seller, PGE, PGH II or any of
their respective subsidiaries will seek any regulations or rulings from any
Governmental Authority regarding accounting methods, policies or procedures
of PGE or its subsidiaries without the prior written consent of Purchaser.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Access to Information. Upon reasonable notice and during
normal business hours, Seller shall cause PGE, PGH II and each of PGE's and
PGH II's respective subsidiaries to, afford to the Purchaser
Representatives reasonable access, during normal business hours throughout
the period prior to the Closing Date, to all of their properties, books,
contracts, personnel, commitments and records; provided, however, that (A)
any such access shall not interfere unreasonably with the operation of the
business of PGE, PGH II or any of their respective subsidiaries, (B)
neither PGE, PGH II nor any of their respective subsidiaries shall be
required to take any action which would constitute a waiver of the
attorney-client privilege and (C) neither PGE, PGH II nor any of their
respective subsidiaries shall be required to supply Purchaser with any
information which PGE, PGH II or any of their respective subsidiaries is
under a legal obligation not to supply. During such period, Seller and
Purchaser shall furnish promptly to the other Party (i) a copy of each
report, schedule and other document filed or received by it or any of its
subsidiaries pursuant to the requirements of the FERC, the NRC, the
Department of Justice, the Federal Trade Commission or any other federal or
state regulatory agency or commission with respect to the transactions
contemplated hereby and (ii) all information concerning themselves, their
subsidiaries, directors and officers and such matters as may be reasonably
requested by the other Party in connection with any filings, applications
or approvals required or contemplated by this Agreement. All documents and
information furnished pursuant to this Section 6.1 shall be subject to the
Confidentiality Agreement. The Party requesting copies of any documents
from the other Party shall be responsible for all out-of-pocket expenses
incurred by the Party to whom such request is made in complying with such
request, including any cost of reproducing and delivering any required
information.
Section 6.2 Regulatory Matters.
(a) As promptly as practicable but in any event not later than
120 days after the date of this Agreement, Seller and Purchaser shall
each file with the Federal Trade Commission and the Department of
Justice any notifications required to be filed under the HSR Act and
the rules and regulations promulgated thereunder with respect to the
transactions contemplated hereby. The Parties shall consult with each
other as to the appropriate time of filing such notifications and
shall use their best efforts to make such filings at the agreed upon
time, to respond promptly to any requests for additional information
made by either of such agencies and to cause the waiting periods
under the HSR Act to terminate or expire at the earliest possible
date after the date of filing.
(b) Seller and Purchaser shall cooperate with each other to (i)
promptly (but in any event not later than 75 days after the date of
this Agreement with respect to filings with the OPUC and the Public
Utility Commission of Nevada, 90 days after the date of this
Agreement with respect to filings with the SEC and 120 days after the
date of this Agreement with respect to filings with FERC) prepare and
file all necessary documentation, (ii) effect all necessary
applications, notices, petitions and filings and execute all
agreements and documents, (iii) use their respective best efforts to
obtain all necessary permits, consents, approvals and authorizations
of all Governmental Authorities and (iv) use their respective best
efforts to obtain all necessary permits, consents, approvals and
authorizations of all other parties, in the case of each of the
foregoing clauses (i), (ii), (iii) and (iv), necessary or advisable to
consummate the transactions contemplated by this Agreement (including,
without limitation, the Seller Required Statutory Approvals and the
Purchaser Required Statutory Approvals) or required by the terms of
any note, bond, mortgage, indenture, deed of trust, license,
franchise, permit, concession, contract, lease or other instrument to
which PGE, PGH II or Purchaser or any of their respective subsidiaries
is a party or by which any of them is bound. Each of Seller and
Purchaser shall have the right to review in advance all filings to be
made by the other Party with any Governmental Authority in connection
with the transactions contemplated hereby.
Section 6.3 Cooperation. Subject to the terms and conditions of this
Agreement, each of the Parties hereto will use its respective best efforts
to take, or cause to be taken, all action, and to do, or cause to be done,
all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the sale of the Shares
pursuant to this Agreement, including without limitation, using best
efforts to ensure satisfaction of the conditions precedent to each Party's
obligations hereunder. Neither of the Parties hereto will, without the
prior written consent of the other Party, take or fail to take any action,
which would reasonably be expected to prevent or materially impede,
interfere with or delay the transactions contemplated by this Agreement.
Purchaser further agrees that it shall not, and shall not permit any of its
subsidiaries to, and Seller further agrees to cause PGE, PGH II and each
subsidiary of PGE or PGH II not to, enter into any transaction, including
any merger, acquisition, joint venture, disposition, lease, contract or
financing, if the entering into of a definitive agreement relating to or
the consummation of such transaction could reasonably be expected to delay
the obtaining of, or significantly increase the risk of not obtaining, any
authorizations, consents, orders, declarations or approvals of any
Governmental Authority necessary to consummate the transactions
contemplated hereby or the expiration or termination of any applicable
waiting period, significantly increase the risk of any Governmental
Authority entering an order prohibiting the consummation of the
transactions contemplated hereby or significantly increase the risk of not
being able to remove any such order on appeal or otherwise.
Section 6.4 Public Announcements. Seller and Purchaser shall
cooperate with each other in the development and distribution of all news
releases and other public information disclosures with respect to this
Agreement or any of the transactions contemplated hereby and, subject to
each Party's disclosure obligations imposed by law or any applicable
national securities exchange, (a) shall consult with each other with
respect to any public announcements or statements and (b) shall not issue
any public announcement or statement with respect to the transactions
contemplated by this Agreement that is inconsistent with any public
announcement or statement previously made by either Party without the
consent of the other Party.
Section 6.5 Employee Benefit Plans.
(a) Prior to Closing, Seller shall have caused sponsorship of the
Portland General Holdings, Inc. Pension Plan and Portland General
Holdings, Inc. Voluntary Employees' Beneficiary Association and any
related trusts or other funding vehicles to be transferred to and
assumed by PGH II and PGE and PGH shall thereupon cease to be a
sponsor of such plans. From and after Closing, Seller and Seller's
affiliates and subsidiaries (including PGH) shall have no rights,
duties, responsibilities or liabilities with respect to the Portland
General Holdings, Inc. Pension Plan and Portland General Holdings,
Inc. Voluntary Employees' Beneficiary Association or any related
trusts or other funding vehicles and Purchaser agrees that, pursuant
to their assumption of sponsorship of such plans, PGH II and PGE shall
assume all rights, duties, responsibilities and liabilities with
respect to such plans, and any related trusts or other funding
vehicles.
(b) The account balances (both vested and unvested) under the
Enron Corp. Savings Plan of the PGE Employees and of any other
individuals whose accounts were transferred into the Enron Corp.
Savings Plan pursuant to the merger into such plan of the Portland
General Holdings, Inc. Retirement Savings Plan shall be transferred
to a qualified defined contribution plan of the Purchaser as soon as
practicable after Closing following receipt from the IRS of
confirmation that such transfer will not adversely affect the
qualified status under applicable provisions of the Code of the Enron
Corp. Savings Plan. Such transfer shall be in cash except that any
outstanding participant loans shall be transferred in kind.
(c) The account balances under the Enron Corp. Employee Stock
Ownership Plan of the PGE Employees shall be distributed to them in
lump sum payments in cash or in kind as soon as practicable after
Closing after receipt by Seller from the IRS of confirmation that
effecting such distributions will not adversely affect the qualified
status of such plan under applicable provisions of the Code.
(d) After Closing, the Enron Corp. Medical Plan for Active
Employees, the Enron Corp. Medical Plan for Inactive Participants,
the Enron Corp. Dental Plan for Active Employees and the Enron Corp.
Dental Plan for Inactive Participants shall thereafter be liable for
and only for the payment of claims incurred prior to Closing by the
PGE Employees and the PGE Former Employees who were covered by such
plans prior to Closing.
(e) From and after Closing, the PGE Employees shall no longer
be permitted to make pre-tax contributions under the Enron Corp.
Flexible Benefit Plan but they shall be permitted to submit claims
against their medical reimbursement and dependent care flexible
spending accounts under such plan through the remainder of the
calendar year including Closing but not for any amounts in excess of
the Closing date balances of such accounts.
(f) For a period of not less than two years following the
Closing Date, Purchaser shall provide or shall cause PGH II and PGE
and their subsidiaries to provide the PGE Employees and the PGE
Former Employees with employee benefits that are not materially less
favorable in the aggregate than those provided (a) immediately prior
to Closing to such individuals under the Benefit Plans disclosed on
Seller's Disclosure Schedule at Section 3.9(a) or (b) to similarly
situated United States employees of Purchaser and its subsidiaries;
provided, however, that the foregoing shall not require the continued
maintenance of or prevent the amendment or termination of any
particular benefit plan except that during such two year period
Purchaser shall provide or cause PGH II and PGE to provide severance
benefits for the PGE Employees in amounts and upon terms and
conditions that are no less favorable than those that were in effect
under the Portland General Holdings, Inc. Involuntary Severance Plan
as in effect on September 5, 1997 and the Portland General Holdings,
Inc. Outplacement Assistance Plan as in effect on September 5, 1997,
and provided, further, that Purchaser's right to negotiate successor
collective bargaining agreements shall not be limited by this Section
6.5(f).
(g) Each PGE Employee and PGE Former Employee shall be given
credit for all purposes under the Replacement Plans for all service
prior to the Closing with Seller and its affiliates and subsidiaries
(including, specifically, service with PGH, PGH II, PGE and their
affiliates and subsidiaries prior to their acquisition by Seller), to
the extent such credit was given under the Benefit Plans disclosed on
Seller's Disclosure Schedule at Section 3.9(a).
(h) No preexisting condition exclusion or limitation that was
inapplicable under the applicable Benefit Plan immediately prior to
closing shall be applicable with respect to the participation of any
PGE Employee or PGE Former Employee in any Replacement Plan that is a
medical benefit plan, but (i) the medical expenses incurred by a PGE
Employee or PGE Former Employee (or their spouses and dependents)
during the portion of the year prior to Closing shall be counted for
purposes of the annual deductible of any such medical benefit plan to
the extent such expenses were similarly counted under the applicable
Benefit Plan prior to the closing and (ii) the medical expenses paid
by a Benefit Plan of Seller and its affiliates and subsidiaries that
is a medical plan during the year in which Closing occurs for any PGE
Employee or PGE Former Employee (and their spouses or dependents)
shall be counted for purposes of any annual limits of such medical
benefit plan.
(i) Prior to Closing, Seller shall have caused PGH or Seller to
assume any and all obligations (including benefit liability
obligations and allocated assets) of PGE with respect to and under
each of the Portland General Holdings, Inc. Umbrella Trust for
Outside Directors, the Portland General Holdings, Inc. Umbrella Trust
for Management (jointly, the "Trusts"), the Portland General
Holdings, Inc. Outside Directors' Life Insurance Benefit Plan, the
Portland General Holdings, Inc. Senior Officers' Life Insurance
Benefit Plan, the Portland General Holdings, Inc. Management Deferred
Compensation Plan, the Portland General Holdings, Inc. Outside
Directors' Deferred Compensation Plan, the Portland General Holdings,
Inc. Supplemental Executive Retirement Plan and the Portland General
Holdings, Inc. Retirement Plan for Outside Directors (jointly, the
"Executive and Director Plans") and shall have caused the subtrusts
in the Trusts to be adjusted to reflect the transfer from PGE to PGH
of liabilities under the Executive and Director Plans as described
above. In connection with the assumption by PGH or Seller of such
obligations, at or prior to Closing, PGH shall transfer to PGH II and
PGH II shall assume from PGH the $20,607,214 payable to PGE incurred
by PGH on July 31, 1999 and all accrued interest thereon and PGE
shall release PGH in respect thereof. Section 6.5 of the Seller
Disclosure Schedule provides certain information regarding the
regulatory status of the Executive and Director Plans.
Section 6.6 Expenses. Subject to Section 5.2, Section 6.1, Section
6.15 and Section 8.2, (a) all costs and expenses incurred by Seller, PGE or
PGH II in connection with this Agreement and the transactions contemplated
hereby shall be paid by Seller, and (b) all costs and expenses incurred by
Purchaser in connection with this Agreement and the transactions
contemplated hereby shall be paid by Purchaser.
Section 6.7 No Breach, Etc. No Party shall, nor shall any Party
permit any of its subsidiaries to, take any action that would or is
reasonably likely to result in a material breach of any provision of this
Agreement or in any of its representations and warranties set forth in this
Agreement being untrue on and as of the Closing Date.
Section 6.8 Directors' and Officers' Indemnification.
(a) Survival of Indemnification. To the fullest extent not
prohibited by law, from and after the Closing Date, all rights to
indemnification now existing in favor of the employees, agents,
directors or officers of PGE, PGH II and their respective
subsidiaries with respect to their activities as such prior to or on
the Closing Date, as provided in their respective articles of
incorporation, bylaws, other organizational documents or
indemnification agreements in effect on the date of such activities
or otherwise in effect on the date hereof, shall survive the Closing
and shall continue in full force and effect for a period of not less
than six years from the Closing Date, provided that, in the event any
claim or claims are asserted or made within such six year period, all
such rights to indemnification in respect of any claim or claims
shall continue until final disposition of such claim or claims.
(b) Successors. In the event Purchaser, PGE, PGH II or any of
their respective successors or assigns (i) consolidates with or
merges into any other Person and shall not be the continuing or
surviving corporation or entity of such consolidation or merger or
(ii) transfers all or substantially all of its properties and assets
to any Person, then and in either such case, proper provision shall
be made so that the successors and assigns of Purchaser, PGE or PGH
II, as the case may be, shall assume the obligations set forth in
this Section 6.8.
Section 6.9 Insurance. Purchaser shall cause to be put in place as of
the Closing Date insurance policies covering PGE and PGH II and their
respective subsidiaries to the extent such entities are included in
Seller's policies as of such date. Purchaser shall cause all surety bonds
and letters of credit that Seller or its affiliates (other than PGE, PGH II
and their respective subsidiaries) have entered into or provided on behalf
of PGE, PGH II or their respective subsidiaries and that remain outstanding
on the Closing Date to be replaced as of the Closing Date with no further
obligation to Seller or such affiliates. A list of the types of insurance
coverage provided by Seller for PGE and PGH II and their respective
subsidiaries and the surety bonds and letters of credit entered into or
provided on their behalf, in each case as of the date hereof,
is set forth on Schedule 6.9 of the Seller Disclosure Schedule.
Section 6.10 Corporate Name. Purchaser shall not acquire, nor shall
PGE, PGH II or any of PGE's or PGH II's subsidiaries retain, any rights to
the name "Enron" (and all derivations therefrom) and any trademarks, trade
names or symbols related thereto. As soon as reasonably practicable after
the Closing (and in any event, within 60 days after the Closing Date)
Purchaser will cause PGE, PGH II and each of their respective subsidiaries
to remove the "Enron" name (and all derivations therefrom), and all
trademarks, trade names and symbols related thereto from the properties and
assets of PGE, PGH II and each of their respective subsidiaries (including
changing all signage relating thereto). In addition, within 10 business
days of the Closing Date, Purchaser will change all of the legal names of
the subsidiaries of PGE and PGH II to delete from the name thereof the word
"Enron".
Section 6.11 Related Party Contracts. Except as set forth on Schedule
6.11 of the Seller Disclosure Schedule, Seller shall cause all of the
Related Party Contracts, including those entered into after the date of
this Agreement, to be terminated prior to the Closing.
Section 6.12 PUHCA. Purchaser shall comply with any and all
requirements of PUHCA. If Purchaser is required to register under Section 5
of PUHCA in connection with the transactions contemplated by this
Agreement, Purchaser shall comply with the notification and registration
requirements of Section 5 of PUHCA and the SEC's regulations thereunder.
Purchaser shall take any and all actions necessary to comply with Sections
10 and 11 of PUHCA as such provisions relate to the integration of the
utility assets of Purchaser, its subsidiaries and PGE.
Section 6.13 Tax Matters.
(a) Consolidated Returns. Seller shall cause to be included in
the consolidated federal income Tax Returns (and in the state income
Tax Returns of any state in which consolidated, combined or unitary
income Tax Returns are filed) of the affiliated group of corporations
of which Seller is the common parent (the "Seller Group") for any
period beginning on or after the date on which PGE was first included
in the consolidated federal income Tax Return of the Seller Group
(the "Beginning Tax Date") and ending on or before the Closing Date,
all items of income, gain, loss, deduction and credit and other tax
items ("Tax Items") of PGE, PGH II and their respective subsidiaries
which are required to be included therein (taking into account the
provisions of Treas. Reg. ss. 1.1502-76(b)(1)(ii)(B)), and shall
cause such Tax Returns to be timely filed with the appropriate taxing
authorities, and shall be responsible for the timely payment (and
entitled to any refund) of all Taxes (except for Taxes resulting from
any transaction not in the ordinary course of business occurring on
the Closing Date after the Closing) due with respect to the periods
covered by such Tax Returns.
(b) Separate Returns. With respect to any Tax Return covering a
taxable period beginning on or after the Beginning Tax Date and
ending on or before the Closing Date that is required to be filed
after the Closing Date with respect to any of PGE, PGH II and their
respective subsidiaries and that is not described in paragraph (a)
above, Purchaser shall cause such Tax Return to be prepared, shall
cause to be included in such Tax Return all Tax Items required to be
included therein, and shall cause such Tax Return to be filed timely
with the appropriate taxing authority. Seller shall provide Purchaser
with the information necessary to prepare all such Tax Returns.
Purchaser shall deliver a copy of each such Tax Return to
Seller at least 30 days prior to the due date for the filing of each
such Tax Return to permit Seller to review and comment on each such
Tax Return prior to filing and shall make such revisions as are
reasonably requested by Seller. Seller shall pay to Purchaser, at
least five days prior to the due date for any such Tax Return, all
amounts (except for Taxes resulting from any transaction not in the
ordinary course of business occurring on the Closing Date after the
Closing) which are shown as due on such Tax Return, and Purchaser
shall pay the amount shown as due on such Tax Return and remit such
amounts to the appropriate taxing authorities. Seller shall be
entitled to any refund for Taxes for any period covered by any such
Tax Return.
(c) Straddle Returns. With respect to any Tax Return covering a
taxable period beginning on or before the Closing Date and ending
after the Closing Date that is required to be filed after the Closing
Date (a "Straddle Period Return") with respect to any of PGE, PGH II
and their respective subsidiaries, Purchaser shall cause such Tax
Return to be prepared, shall cause to be included in such Tax Return
all Tax Items required to be included therein and shall furnish a
copy of such Tax Return to Seller. Seller shall pay to Purchaser at
least five days prior to the due date for the filing of any Straddle
Period Return an amount equal to the portion of the Taxes shown on
such return which relates to the portion of such taxable period
ending on the Closing Date (a "Pre-Closing Straddle Period"). For
purposes of this Section 6.13(c), in the case of any Taxes that are
imposed on a periodic basis and are payable with respect to a taxable
period that includes (but does not end on) the Closing Date, the
portion of such Tax which relates to the portion of such taxable
period ending on the Closing Date shall (1) in the case of any Taxes
other than Taxes based upon or related to income, receipts, sales or
payroll, be deemed to be the amount of such Tax for the entire
taxable period multiplied by a fraction the numerator of which is the
number of days in the taxable period ending on the Closing Date and
the denominator of which is the number of days in the entire taxable
period, and (2) in the case of any Tax based upon or related to
income, receipts, sales or payroll, be deemed equal to the amount
which would be payable if the relevant taxable period ended on the
Closing Date.
(d) Consistency. Any Tax Return to be prepared pursuant to the
provisions of Section 6.13(b) or (c) shall be prepared in a manner
consistent with practices followed in prior years with respect to
similar Tax Returns, except for changes required by changes in law or
fact.
(e) Access to Tax Records. Seller shall grant to Purchaser (or
its designees) access at all reasonable times to all of the
information, books and records relating to PGE, PGH II and their
respective subsidiaries within the possession of Seller or any member
of the Seller Group (including workpapers and correspondence with
taxing authorities), and shall afford Purchaser (or its designees)
the right (at Purchaser's expense) to take extracts therefrom and to
make copies thereof, to the extent reasonably necessary to permit
Purchaser (or its designees) to prepare Tax Returns and to conduct
negotiations with taxing authorities. Purchaser shall grant or cause
PGE, PGH II and their respective subsidiaries to grant to Seller (or
its designees) access at all reasonable times to all of the
information, books and records relating to PGE, PGH II and their
respective subsidiaries within the possession of Purchaser, PGE, PGH
II or their respective subsidiaries (including workpapers and
correspondence with taxing authorities), and shall afford Seller (or
its designees) the right (at Seller's expense) to take extracts
therefrom and to make copies thereof, to the extent reasonably
necessary to permit Seller (or its designees) to prepare Tax Returns
and to conduct negotiations with taxing authorities.
(f) Transfer Taxes. Purchaser shall be responsible for the
payment of all state and local transfer, sales, use or other similar
Taxes resulting from the transactions contemplated by this Agreement.
(g) No Section 338 Election. No election shall be made under
section 338 of the Code or the corresponding provisions of any state
Tax law with respect to the purchase of the PGE Shares or the PGH II
Shares.
(h) Indemnification for Taxes. From and after the Closing Date
Seller shall protect, defend, indemnify and hold harmless Purchaser,
PGE, PGH II and their respective subsidiaries from any and all Taxes
imposed on PGE, PGH II or any of their respective subsidiaries (i)
for any taxable period beginning on or after the Beginning Tax Date
and ending on or before the Closing Date (except for Taxes resulting
from any transaction not in the ordinary course of business occurring
on the Closing Date after the Closing), (ii) with respect to any
Pre-Closing Straddle Period; or (iii) resulting by reason of the
several liability of PGE, PGH II or any of their respective
subsidiaries for Taxes pursuant to Treas. Reg. ss. 1.1502-6 or any
analogous state, local or foreign law or regulation for periods
beginning on or after the Beginning Tax Date and ending on or before
the Closing Date; provided, however, that Seller's liability under
this paragraph shall be reduced with respect to any item to the
extent of the amount for which such item was specifically identified
and reserved in the financial statements referred to in Section 3.5
and not taken into account in computing any Tax Sharing Payment.
Purchaser shall protect, defend, indemnify and hold harmless Seller
and each member of the Seller Group from any and all other Taxes
imposed on PGE, PGH II or any of their respective subsidiaries.
(i) Tax Proceedings. In the case of any audit, examination or
other proceeding ("Proceeding") with respect to Taxes for which
Seller would be liable pursuant to this Agreement, Purchaser shall
promptly inform Seller, and shall afford Seller, at its expense, the
opportunity to control the conduct of such Proceedings. Seller shall
have the right to initiate any claim for refund, file any amended Tax
Return or take any other action which it deems appropriate with
respect to such Taxes; provided that such action does not adversely
affect Purchaser or PGE, PGH II or the respective subsidiaries of PGE
and PGH II for any taxable year beginning after the Closing Date. Any
Proceeding with respect to Taxes for a period which includes but does
not end on the Closing Date shall be controlled jointly by Seller and
Purchaser.
(j) Tax Sharing Agreements. All tax sharing agreements with
respect to or involving PGE, PGH II and their respective subsidiaries
shall be terminated as of the Closing Date and, after the Closing
Date, PGE, PGH II and their subsidiaries shall not be bound thereby
or have any liability thereunder.
Section 6.14 Evidence of Financing Availability. If the Closing has
not occurred on or before November 3, 2000, Purchaser will obtain, and will
provide Seller with a copy of, either (i) an extension of the commitment
letter received by Purchaser on the date hereof, a copy of which has been
provided to Seller, providing for a commitment of at least the same amount
of financing and including funding conditions and other terms and
conditions no less favorable than the terms of the original commitment
letter, or (ii) a new commitment letter or letters that provides for an
amount of financing and including funding conditions and other terms and
conditions no less favorable than the terms of the original commitment
letter from a bona fide lender, in the case of each of (i) and (ii)
including a termination date not before May 5, 2001.
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Obligations of Purchaser. The obligations
of Purchaser to purchase the Shares and to consummate the other
transactions contemplated by this Agreement shall be subject to the
fulfillment on or prior to the Closing Date (or the waiver by Purchaser) of
the following conditions:
(a) No Injunction. No preliminary or permanent injunction or
other order, judgment or decree by any federal or state court of
competent jurisdiction that prevents the consummation of the sale of
the Shares contemplated herein shall have been issued and remain in
effect (each Party agreeing to use its best efforts to have any such
injunction, order, judgment or decree lifted), and the sale of the
Shares shall not have been prohibited under any applicable federal or
state law or regulation.
(b) Statutory Approvals. All Seller Required Statutory
Approvals and all Purchaser Required Statutory Approvals shall have
been made or obtained and become Final Orders, and such Final Orders
shall not, in the aggregate, impose terms or conditions that would
have a PGE Material Adverse Effect or a materially adverse effect or
change on the business, condition (financial or otherwise) or results
of operations of the Purchaser, PGE and their respective subsidiaries
taken as a whole.
(c) Performance of Obligations of Seller. Seller shall have
performed and complied with, in all material respects, the covenants
and agreements contained in this Agreement that are required to be
performed and complied with by Seller on or prior to the Closing
Date.
(d) Representations and Warranties. The representations and
warranties of Seller set forth in this Agreement shall be true and
correct (i) on and as of the date hereof and (ii) on and as of the
Closing Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date (except for
representations and warranties that expressly speak only as of a
specific date or time other than the date hereof or the Closing Date,
which need only be true and correct as of such date or time) except
in each of clauses (i) and (ii) above for such failures of
representations and warranties to be true and correct (without regard
to any materiality qualifications contained therein) that,
individually or in the aggregate, would not result in a PGE Material
Adverse Effect.
(e) Closing Certificate. Purchaser shall have received a
certificate from an authorized officer of the Seller, dated the
Closing Date, to the effect that, to such officer's knowledge, the
conditions set forth in Section 7.1(c) and Section 7.1(d) have been
satisfied.
(f) No PGE Material Adverse Effect. Since the date of this
Agreement, no PGE Material Adverse Effect shall have occurred and be
continuing.
Section 7.2 Conditions to Obligations of Seller. The obligations of
Seller to sell the Shares and to consummate the other transactions
contemplated by this Agreement shall be subject to the fulfillment on or
prior to the Closing Date (or the waiver by Seller) of the following
conditions:
(a) No Injunction. No preliminary or permanent injunction or
other order, judgment or decree by any federal or state court of
competent jurisdiction that prevents the consummation of the sale of
the Shares contemplated herein shall have been issued and remain in
effect (each Party agreeing to use its best efforts to have any such
injunction, order, judgment or decree lifted), and the sale of the
Shares shall not have been prohibited under any applicable federal or
state law or regulation.
(b) Statutory Approvals. All Purchaser Required Statutory
Approvals and all Seller Required Statutory Approvals shall have been
made or obtained and become Final Orders, and such Final Orders shall
not impose any liability, loss, cost, expense, restriction,
encumbrance or obligation on Seller or any of its subsidiaries or
affiliates.
(c) Performance of Obligations of Purchaser. Purchaser shall
have performed and complied with, in all material respects, the
covenants and agreements contained in this Agreement that are
required to be performed and complied with by Purchaser on or prior
to the Closing Date.
(d) Representations and Warranties. The representations and
warranties of Purchaser set forth in this Agreement shall be true and
correct (without regard to any materiality qualifications contained
therein) in all material respects on and as of the date hereof and on
and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing
Date.
(e) Closing Certificate. Seller shall have received a
certificate from an authorized officer of Purchaser dated the Closing
Date, to the effect that, to such officer's knowledge, the conditions
set forth in Section 7.2(c) and Section 7.2(d) have been satisfied.
ARTICLE VIII
TERMINATION
Section 8.1 Termination.
(a) Mutual Consent. This Agreement may be terminated at any
time prior to the Closing Date by the mutual consent of Seller and
Purchaser.
(b) Permanent Injunction. This Agreement may be terminated by
Seller or Purchaser, if any federal or state court of competent
jurisdiction shall have issued an order, judgment or decree
permanently restraining, enjoining or otherwise prohibiting the
Closing, and such order, judgment or decree shall have become final
and nonappealable.
(c) Termination Date. This Agreement may be terminated by
Seller or Purchaser if the Closing contemplated hereby shall have not
occurred on or before the day that is 12 months from the date of this
Agreement (the "Initial Termination Date"); provided that the right
to terminate this Agreement under this Section 8.1(c) shall not be
available to any Party whose failure to fulfill any obligation under
this Agreement has been the cause of, or resulted directly or
indirectly in, the failure of the Closing to occur on or before such
date; and provided, further, that if on the Initial Termination Date
the conditions to the Closing set forth in Sections 7.1(b) or 7.2(b)
shall not have been fulfilled, but all other conditions to the
Closing have been fulfilled or are capable of being fulfilled, then
the Initial Termination Date shall be extended to the day that is 18
months from the date of this Agreement.
(d) Required Statutory Approvals. This Agreement may be
terminated by Purchaser or Seller if any of the Purchaser Required
Statutory Approvals or Seller Required Statutory Approvals, the
receipt of which are conditions to the obligations of Purchaser and
Seller to consummate the Closing as set forth in Sections 7.1(b) and
7.2(b), shall have been denied by a final and nonappealable order,
judgment or decree.
(e) Breach by Seller. This Agreement may be terminated by
Purchaser if there has been a violation or breach by Seller of any
covenant, representation or warranty contained in this Agreement
which has resulted in a PGE Material Adverse Effect and such
violation or breach is not cured by the earlier of the Closing Date
or the date sixty (60) days after receipt by Seller of written notice
specifying particularly such violation or breach, and such violation
or breach has not been waived by Purchaser.
(f) Breach by Purchaser. This Agreement may be terminated by
Seller if there has been a material violation or breach by Purchaser
of any covenant, representation or warranty contained in this
Agreement and such violation or breach is not cured by the earlier of
the Closing Date or the date sixty (60) days after receipt by
Purchaser of written notice specifying particularly such violation or
breach, and such violation or breach has not been waived by Seller.
(g) Financing. This Agreement may be terminated by Seller if
Purchaser has violated or breached its covenant in Section 6.14, and
such violation or breach has not been
waived by Seller.
Section 8.2 Procedure and Effect of Termination. In the event of
termination of this Agreement by either or both of the Parties pursuant to
this Article VIII, written notice thereof shall forthwith be given by the
terminating Party to the other Party, whereupon, if this Agreement is
terminated pursuant to any of Sections 8.1(a) through (d), the liabilities
of the Parties hereunder will terminate, except as otherwise expressly
provided in this Agreement, and thereafter neither Party shall have any
recourse against the other by reason of this Agreement. In the event of a
termination of this Agreement pursuant to Section 8.1(e), Section 8.1(f) or
Section 8.1(g), the breaching Party shall promptly (but no later than five
business days after receipt of notice from the non-breaching Party) pay to
the non-breaching Party an amount in cash equal to all documented
out-of-pocket expenses and fees incurred by the non-breaching Party
(including without limitation, fees and expenses payable to all legal,
accounting, financial, public relations and other professional advisors
arising out of, in connection with or related to, the transactions
contemplated by this Agreement). The reimbursement of expenses provided in
the immediately preceding sentence shall be in addition to any rights that
any Party may have at common law or otherwise.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Non-Survival of Representations, Warranties, Covenants
and Agreements. No representation, warranty, covenant or agreement in this
Agreement shall survive the Closing or termination of the Agreement, except
the covenants and agreements contained in Section 1.5 (Enron Merger
Payment), Section 5.2(b) (Stub Period Dividend), Section 5.17
(Non-Solicitation) Section 6.5 (Employee Benefit Plans), Section 6.6
(Expenses), Section 6.8 (Directors' and Officers' Indemnification), Section
6.10 (Corporate Name), Section 6.13 (Tax Matters), Section 8.2 (Procedure
and Effect of Termination), and this Article IX, each of which shall
survive in accordance with its terms.
Section 9.2 Brokers. Seller represents and warrants that, except for
Credit Suisse First Boston Corporation and ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, no broker,
finder or investment banker is entitled to any brokerage, finder's or other
fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Seller, PGE or
PGH II. Purchaser represents and warrants that, except for ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by
or on behalf of Purchaser.
Section 9.3 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given (a) if delivered personally,
or (b) if sent by overnight courier service (receipt confirmed in writing),
or (c) if delivered by facsimile transmission (with receipt confirmed), to
the Parties, in each case to the following addresses (or at such other
address for a Party as shall be specified by like notice):
(i) If to Purchaser, to:
Sierra Pacific Resources
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.:General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to Seller, to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President and General Counsel
Enron Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Corporate Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Enron Corp. ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ 1001 ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Section 9.4 Miscellaneous. This Agreement (including the documents
and instruments referred to herein): (a) constitutes the entire agreement
and supersedes all other prior agreements and understandings, both written
and oral, among the Parties, or any of them, with respect to the subject
matter hereof other than the Confidentiality Agreement; (b) shall not be
assigned by operation of law or otherwise by any Party without the prior
written consent of the other Party; and (c) may be modified, amended or
supplemented in any manner and at any time only by a written instrument
executed by the Purchaser and Seller. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain
in full force and effect. The Parties hereto shall negotiate in good faith
to replace any provision of this Agreement so held invalid or unenforceable
with a valid provision that is as similar as possible in substance to the
invalid or unenforceable provision.
Section 9.5 Interpretation. When reference is made in this Agreement
to Articles or Sections, such reference shall be to an Article or Section
of this Agreement, as the case may be, unless otherwise indicated. The
table of contents and headings contained in this Agreement are for
reference purposes and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes",
or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." Whenever reference is made to
the "knowledge" of any Person or entity in this Agreement or to information
"known" to any Person or entity in this Agreement, such terms shall refer
to information actually known to the Person, in a case of an individual, or
in the case of a corporation or other entity, information actually known to
an executive officer of such corporation or entity.
Section 9.6 Counterparts; Effect. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original,
but all of which shall constitute one and the same agreement.
Section 9.7 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each Party hereto and, except for rights
of Indemnified Parties as set forth in Section 6.8 (Directors' and
Officers' Indemnification) nothing in this Agreement, express or implied,
is intended to confer upon any other Person any rights or remedies of any
nature whatsoever under or by reason of this Agreement.
Section 9.8 Specific Performance. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that the Parties
hereto shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.
Section 9.9 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, other than
any conflict of laws rules thereof that would direct the application of the
laws of another jurisdiction to this Agreement.
Section 9.10 Disclosure Schedules. The Seller Disclosure Schedule and
the Purchaser Disclosure Schedule are collectively referred to herein as
the "Disclosure Schedules". The Disclosure Schedules constitute an integral
part of this Agreement and modify the respective representations,
warranties, covenants or agreements of the Parties contained herein to the
extent that such representations, warranties, covenants or agreements
expressly refer specifically to the applicable section of the Disclosure
Schedules. Any and all statements, representations, warranties or
disclosures set forth in the Disclosure Schedules shall be deemed to have
been made on and as of the date of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be executed as of the date first above written.
ENRON CORP.
By: /s/ J. ▇▇▇▇ ▇▇▇▇▇
------------------------------
J. ▇▇▇▇ ▇▇▇▇▇
Executive Vice President,
Corporate Development
SIERRA PACIFIC RESOURCES
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman and Chief Executive Officer
ANNEX A
DEFINITIONS
-----------
As used herein, the following terms have the following meanings:
Atomic Energy Act: The Atomic Energy Act of 1954, as amended.
Benefit Plan: Any employee pension benefit plan (whether or not
insured), as defined in Section 3(2) of ERISA, any employee welfare benefit
plan (whether or not insured) as defined in Section 3(1) of ERISA, any plan
that would be employee pension benefit plans or employee welfare benefit
plans if they were subject to ERISA, such as foreign plans and plans for
directors, any stock bonus, stock ownership, stock option, stock purchase,
stock appreciation rights, phantom stock, or other stock plan (whether
qualified or nonqualified), and any bonus or incentive compensation plan
sponsored, maintained, contributed to or required to be contributed to by
PGE, PGH II or any of their subsidiaries for the benefit of any of the
present or former directors, officers, employees, agents, consultants, or
other similar representatives; provided, however, that such term shall not
include (a) routine employment policies and procedures developed and
applied in the ordinary course of business and consistent with past
practice, including wage, vacation, holiday, and sick or other leave
policies, (b) workers compensation insurance, and (c) directors and
officers liability insurance.
Code: The Internal Revenue Code of 1986, as amended, or any successor
thereto.
Commonly Controlled Entity: Any corporation, trade, business or
entity under common control with Seller, within the meaning of Section
414(b), (c) or (m) of the Code or Section 4001 of ERISA.
Confidentiality Agreement: Confidentiality Agreement, dated as of
August 3, 1999, between Seller and Purchaser.
Decommissioning Plan: The PGE Decommissioning Plan relating to PGE
Nuclear Facility as approved by the NRC on April 15, 1996, and revisions
thereto, all of which have been delivered by Seller to Purchaser.
Enron Merger Payment: Seller's obligations set forth in Condition 20
to the Stipulation dated April 29, 1997 adopted by the OPUC and
incorporated by reference into the Enron/PGE Order.
Enron/PGE Order: OPUC's Order dated June 4, 1997 approving Seller's
application to acquire the power to exercise influence over PGE.
Environmental Claim: Any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims,
liens, investigations, proceedings or notices of noncompliance or violation
by any Person or entity (including, without limitation, any Governmental
Authority) alleging potential liability (including, without limitation,
potential liability for enforcement costs, investigatory costs, cleanup
costs, response costs, removal costs, remedial costs, natural resources
damages, property damages, personal injuries, fines or penalties) arising
out of, based on or resulting from (A) the presence, or Release or
threatened Release of any Hazardous Materials at any location, whether or
not owned, operated, leased or managed by PGE, PGH II or any of their
respective subsidiaries or joint ventures, (B) circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law or
(C) any and all claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting
from the presence or Release of any Hazardous Materials.
Environmental Laws: All foreign, federal, state and local laws,
rules, regulations, ordinances, orders, judgments, decrees and common law
rules relating to Hazardous Materials relating to pollution or protection
of human health or the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) as in
effect on the date hereof including, without limitation, laws and
regulations relating to Releases or threatened Releases of Hazardous
Materials or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials.
Environmental Permits: Permits required under or pursuant to
Environmental Laws.
ERISA: The Employee Retirement Income Security Act of 1974, as amended
from time to time, or any successor thereto..
Exchange Act: The Securities Exchange Act of 1934, as amended.
FERC: The Federal Energy Regulatory Commission.
Final Orders: A judgment, order or decree of the relevant regulatory
authority that has not been reversed, stayed, enjoined, set aside, annulled
or suspended, with respect to which any waiting period prescribed by law
before the transactions contemplated hereby may be consummated has expired
(but without the requirement for expiration of any applicable rehearing or
approval period), and as to which all conditions to the consummation of
such transactions prescribed by law, regulation or order have been
satisfied.
GAAP: Generally accepted accounting principles applied on a consistent
basis.
Governmental Authority: A court, governmental or regulatory body
(including a stock exchange or other self regulatory body) or authority,
domestic or foreign.
Hazardous Materials: Any (A) petroleum or petroleum products or
petroleum wastes (including crude oil or any fraction thereof), radioactive
materials, friable asbestos or friable asbestos-containing material, urea
formaldehyde foam insulation, and transformers or other equipment that
contain dielectric fluid containing polychlorinated biphenyls, (B)
chemicals, materials or substances which are now defined as or included in
the definition of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous wastes", "restricted hazardous wastes",
"toxic substances", "toxic pollutants", or words of similar import, under
any Environmental Law and (C) other chemicals, materials, substances or
wastes, exposure to which is now prohibited, limited or regulated under any
applicable Environmental Law.
HSR Act: The ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended.
IRS: The United States Internal Revenue Service.
joint venture: Other than with respect to Section 3.2, references to
a "joint venture" of a Person means any corporation or other entity
(including partnerships and other business associations and joint ventures)
in which such Person or one or more of its subsidiaries owns an equity
interest that is less than a majority of any class of the outstanding
voting securities but at least 10% of such voting securities.
NRC: The Nuclear Regulatory Commission.
OPUC: The Oregon Public Utilities Commission, and any successor
commission or agency.
Oregon Restructuring Legislation: Senate ▇▇▇▇ 1149 that was signed
into law by the Governor of Oregon on July 23, 1999 and regulations or
orders promulgated thereunder.
PBGC: Pension Benefit Guaranty Corporation.
Permits: Any permits, licenses, franchises and other governmental
authorizations, consents and approvals.
Person: An individual, corporation, limited liability company,
partnership, joint venture, bank, trust, unincorporated organization and/or
a government or any department or agency thereof.
PGE Common Stock: Common stock, par value $3.75 per share, of PGE.
PGE Employee: Any individual who is actively employed by any of PGE,
PGH II or any of their subsidiaries as of and after Closing.
PGE Financial Statements: The audited consolidated financial
statements and unaudited interim consolidated financial statements of PGE
that are included in the PGE SEC Reports.
PGE Former Employee: Any individual who is not actively employed by
any of PGE, PGH II, Seller or any of their subsidiaries as of Closing but
who was at some time prior to Closing employed by PGH or PGE or any
subsidiary of PGH or PGE or of any predecessor of any of them and who is as
a result of such prior employment eligible for coverage under one or more
Benefit Plans disclosed on Seller's Disclosure Schedule 3.9(a) and/or one
or more of the Replacement Plans.
PGE Material Adverse Effect: Any change or effect that is materially
adverse to the business, condition (financial or otherwise) or results of
operations of PGE, PGH II and their respective subsidiaries, taken as a
whole; provided, however, that a PGE Material Adverse Effect shall not be
deemed to have occurred as a result of changes or effects resulting from
(i) general economic, financial or electric utility conditions in the
Pacific Northwest or nationally, (ii) the announcement or consummation of
the transactions contemplated by this Agreement, (iii) adverse hydro
conditions in the Pacific Northwest or (iv) the Oregon Restructuring
Legislation.
PGE Preferred Stock: Cumulative preferred stock, no par value, of PGE.
PGE SEC Reports: Each report, schedule, registration statement and
definitive proxy statement, if any, filed by PGE with the SEC since January
1, 1997 and through the date hereof (as such documents have since the time
of the filing been amended).
PGH II Common Stock: Common stock, par value $1.00 per share, of
PGH II.
PGH Contribution: The contribution by PGH to PGH II and the
assumption by PGH II from PGH of certain assets and liabilities pursuant to
that certain Contribution and Assumption Agreement between PGH and PGH II
dated as of August 31, 1999.
Power Act: The Federal Power Act of 1935, as amended.
PUHCA: The Public Utility Holding Company Act of 1935, as amended.
Purchase Price: The PGE Purchase Price and the PGH II Purchase Price,
taken together.
Purchaser Representatives: The officers, directors, employees,
accountants, counsel, investment bankers, financial advisers and other
representatives of Purchaser chosen by Purchaser to represent Purchaser
with respect to the transactions contemplated by this Agreement.
Release: Any release, spill, emission, leaking, injection, deposit,
disposal, discharge, dispersal, leaching or migration into the atmosphere,
soil, surface water, groundwater or property (indoors or outdoors).
Replacement Plans: The plans maintained by Purchaser and/or PGE or PGH
II and their subsidiaries in accordance with Section 6.5(f) of this
Agreement.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended.
Shares: The PGE Shares and the PGH II Shares, taken together.
subsidiary: Other than with respect to Section 3.2, references to a
"subsidiary" of a Person means any corporation or other entity (including
limited liability companies, partnerships and other business associations)
in which such Person, directly or indirectly owns outstanding capital stock
or other voting securities having the power, under ordinary circumstances,
to elect a majority of the directors or similar members of the governing
body of such corporation or other entity, or otherwise to direct the
management and policies of such corporation or other entity.
Taxes: Any federal, state, county, local or foreign taxes, charges,
fees, levies, or other assessments, including all net income, gross income,
sales and use, ad valorem, transfer, gains, profits, excise, franchise,
real and personal property, gross receipts, capital stock, production,
business and occupation, disability, employment, payroll, license,
estimated, stamp, custom duties, severance or withholding taxes or charges
imposed by any governmental entity, and includes any interest and penalties
(civil or criminal) on or additions to any such taxes.
Tax Return: A report, return or other information required to be
supplied to a governmental entity with respect to Taxes including, where
permitted or required, combined or consolidated returns for any group of
entities that includes PGE, PGH II or any of their respective subsidiaries.