Exhibit C.1
CONNECTICUT VALLEY ELECTRIC COMPANY INC. RESTRUCTURING
PURCHASE AND SALE AGREEMENT
by and between
Public Service Company of New Hampshire
and
Central Vermont Public Service Corporation/Connecticut Valley
Electric Company Inc.
This Purchase and Sale Agreement ("Agreement"), dated
as of the 31st of January, 2003, by and between Public
Service Company of New Hampshire, a New Hampshire
corporation ("PSNH" or the "Buyer"), Central Vermont Public
Service Corporation, a Vermont corporation ("CVPS"), and
Connecticut Valley Electric Company Inc., a New Hampshire
corporation ("CVEC") (CVPS and CVEC, where the context
permits, each individually also being a "Seller", and
collectively, the "Sellers").
W I T N E S S E T H :
WHEREAS, CVEC, a wholly-owned subsidiary of CVPS, has
been granted franchises to serve certain areas in the State
of New Hampshire with retail electric service; and
WHEREAS, CVEC and CVPS have been parties to lengthy and
complex litigation involving the State of New Hampshire
concerning, among other issues, the implementation of New
Hampshire's electric restructuring act, RSA Chapter 374-F;
and
WHEREAS, CVEC and CVPS have entered into a settlement
(the "CVEC Related Settlement") of such litigation with the
Governor's Office of Energy and Community Services, Staff of
the New Hampshire Public Utilities Commission, the Office of
Consumer Advocate, the City of Claremont, New Hampshire, and
New Hampshire Legal Assistance (the "State Parties")
contemporaneously with the execution of this Agreement; and
WHEREAS, pursuant to that settlement CVEC has agreed to
transfer its franchises and to sell substantially all of its
electric utility facilities to PSNH; and
WHEREAS, PSNH desires to receive the CVEC franchises,
to purchase assets from CVEC, and to provide electric
service, including delivery service to the New Hampshire
Electric Cooperative, Inc. ("NHEC"), in the areas presently
included in the franchises held by CVEC, all upon the terms
and conditions as set forth herein; and
WHEREAS, PSNH desires to purchase certain assets from
CVPS; and
WHEREAS, PSNH has entered into a settlement (the "PSNH
Related Settlement") with the State Parties concerning the
methodology for recovery of the costs incurred for the
transaction contemplated by this Agreement; and
WHEREAS, the area presently served by CVEC is
transmission-dependent upon CVPS for the delivery of
electric energy; and
WHEREAS, CVPS is willing to continue the provision of
transmission service to PSNH to deliver energy to the
CVPS/CVEC interface with the area presently served by CVEC
under authority of the Federal Energy Regulatory Commission
(the "FERC").
NOW, THEREFORE, in consideration of the premises and
the mutual agreements and covenants herein contained, the
Parties hereto have agreed and do hereby agree, subject to
the terms and conditions set forth herein, as follows:
1. ASSETS TO BE SOLD BY CVEC
a. CVEC agrees to sell and transfer to PSNH and PSNH
agrees to purchase and accept, at Closing, free and clear of
any liens and encumbrances, substantially all of CVEC's
electric utility facilities including lands and land rights,
easements, rights, franchises and personal property (the
"Acquired Assets"), all as more particularly described in
Exhibit 1.a attached hereto. Exhibit 1.a has been prepared
based upon facilities in existence as of the date noted
thereon, and at Closing there will be an adjustment to
include subsequently-acquired and exclude subsequently-
conveyed and retired property of CVEC.
b. CVEC shall retain the property and facilities described
in Exhibit 1.b. To the extent that any property owned by
CVEC is not included in either Exhibit 1.a or Exhibit 1.b,
it shall be assumed that such property is included in the
Acquired Assets to be transferred to and purchased by PSNH.
c. CVEC shall transfer to PSNH all licenses and permits
which are transferable by assignment or otherwise
(including, without limitation, upon request or application
to a governmental authority, or which will pass to PSNH as
successor in title to the assets and franchise by operation
of law), including, without limitation, those licenses and
permits set forth in Exhibit 1.c.
d. CVEC shall also transfer to PSNH, originals or copies
of all documents, correspondence, books, records, operating,
safety and maintenance manuals, inspection reports,
drawings, models, engineering designs, blueprints, as-built
plans, specifications, procedures, studies, reports, quality
assurance records, purchasing records and equipment repair
data, safety, maintenance or service records relating to the
acquisition, ownership, design, construction, licensing,
regulation, or operation of the Acquired Assets.
e. CVEC shall transfer or assign to PSNH certain
contracts, instruments or other agreements as set forth in
Exhibit 1.e relating to the operation and maintenance of the
CVEC electric system.
f. CVEC shall transfer to PSNH all claims, rights or
causes of action against any third parties to the extent
arising out of or relating to its right, title and interest
in and to any of the Acquired Assets or any portion thereof,
whether received as a payment or credit against future
liabilities, including, without limitation, insurance
proceeds, condemnation awards and cash payments under
warranties covering the Acquired Assets to the extent such
payments relate to the Acquired Assets, except for any claim
against any third party relating to the Acquired Assets
which arises prior to the Closing date. It is understood
that no claims resolved pursuant to the CVEC Related
Settlement shall be deemed to have been transferred as a
result of this assignment.
g. PSNH shall pay to CVEC for the Acquired Assets and
related items described herein the net book value of such
assets, (i.e., adjusted for accrued depreciation, as of the
date of closing. The final purchase price may be audited by
the New Hampshire Public Utilities Commission (the
"Commission") subsequent to the Closing, and the Parties may
participate in such audit. Payment shall be made at Closing
by wire transfer to an account designated by CVEC or CVPS,
or in such other manner acceptable to the Parties. PSNH and
CVEC shall determine the appropriate allocation of the
purchase price to items, including intangibles, listed on
Exhibits 1a, 1c, and 1e.
h. Real and personal property taxes as well as all
municipal assessments related to any of the property to be
transferred at Closing will be prorated between the Parties
based upon the tax year of the municipality or taxing
authority imposing the tax or assessment.
i. All conveyance taxes related to the transfer of
property at Closing shall be shared equally by the Parties.
j. Good and marketable title to all Acquired Assets and
other items shall be transferred to Buyer by CVEC by
warranty deed and ▇▇▇▇ of sale, free and clear of any and
all liens, security interests, and encumbrances of any kind,
except as specifically provided in Exhibit 1.j. Title
insurance, if any, shall be provided at PSNH's sole expense.
2. ASSETS TO BE SOLD BY CVPS
a. CVPS agrees to sell and transfer to PSNH and PSNH
agrees to purchase and accept, at Closing, certain assets
owned by CVPS, all as more particularly described in Exhibit
2.a attached hereto. Exhibit 2.a has been prepared as of
the date noted thereon, and may be revised prior to Closing.
b. PSNH shall pay to CVPS the fair market value of each
item described in Exhibit 2.a, with such fair market value
to be included on Exhibit 2.a. Payment shall be made at
Closing in a manner acceptable to the Parties.
c. Real and personal property taxes as well as all
municipal assessments related to any of the property to be
transferred at Closing will be prorated between the Parties
based upon the tax year of the municipality or taxing
authority imposing the tax or assessment.
d. All conveyance taxes related to the transfer of
property at Closing shall be shared equally by the Parties.
e. Good and marketable title to all assets and other items
shall be transferred to Buyer by CVPS by warranty deed and
▇▇▇▇ of sale, free and clear of any and all liens, security
interests, and encumbrances of any kind except as
specifically provided in Exhibit 2.e. Title insurance, if
any, shall be provided at PSNH's sole expense.
3. POWER PURCHASE OBLIGATIONS
a. CVEC shall transfer to PSNH, and PSNH shall accept, all
of CVEC's going-forward responsibilities concerning
purchases (mandated by Commission order, contract, or
otherwise) from the following qualifying facilities:
i. NH/VT Refuse Facility (Wheelabrator)
ii. Pettyboro
iii. Bath Electric
iv. ▇▇▇▇▇ ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ Brook
b. CVEC shall pay to PSNH the Net Present Value (using a
discount factor of the Prime Rate as published in the
Federal Reserve Statistical Release H.15 on the fifth (5th)
business day prior to the closing date) of all remaining
credits required of CVEC under the Stipulation of Settlement
with Wheelabrator Claremont Company L.P. as filed with the
New Hampshire Public Utilities Commission in its Docket No.
DE 00-110.
c. CVEC shall assign to PSNH its rights and obligations
under its wholesale requirements contract with CVPS entitled
"Rate RS-2 for Reserve System Capacity Service by Central
Vermont Public Service Corporation to Connecticut Valley
Electric Company Inc.", as filed with the FERC under CVPS
Rate Schedule No. 135. CVPS hereby consents to this
assignment by CVEC to PSNH. CVPS agrees that PSNH may
terminate the RS-2 contract immediately upon acceptance of
the assignment thereof from CVEC and receipt by CVPS of the
"RS-2 Stranded Cost Payment" and the payments for "Recovery
of CVEC's Restructuring Costs, Regulatory Assets, Certain
Litigation Costs and Other Outstanding Balances" as
quantified in the Related Settlement between CVEC/CVPS and
the State Parties. The Parties agree that any such
termination payment shall be subject to adjustment and
reconciliation pursuant to the provisions set forth in the
Related Settlement between CVEC/CVPS and the State Parties.
The Parties recognize and agree that the mechanics of this
subsection c are subject to modification by mutual consent
of the Parties (not to be unreasonably withheld) in order to
effectuate beneficial tax treatment of the transactions
described herein, provided that no such modification shall
adversely affect New Hampshire customers.
d. CVPS shall retain the obligation to purchase the output
of the following facilities located in New Hampshire
pursuant to the terms and conditions of their respective
existing contracts:
i. Lafayette Street Hydro
ii. Lower Valley
iii. Sweetwater Hydro
iv. Woodsville Hydro
4. DELIVERY POINTS AND TRANSMISSION SERVICE
a. As long as PSNH shall require such transmission
service, CVPS or its successors or assigns will provide
transmission service to PSNH pursuant to the terms and
conditions of this paragraph 4.
b. On and after closing of the transaction, PSNH will be
responsible for all costs incurred by the transmission
providers for the transmission of power to PSNH to serve the
former CVEC load through rates approved by the applicable
regulatory agency, as follows:
i. PSNH will pay for NEPOOL Regional Network Service
(RNS), either by way of the VELCO Open Access Tariff or
the NU Open Access Tariff according to the terms of the
NEPOOL Open Access Tariff. (Delivery Service A in
Exhibit 4.c)
ii. PSNH will directly take Local Network Service (LNS) by
way of the VELCO Open Access Tariff. (Delivery Service
B in Exhibit 4.c)
iii. PSNH will take Network Service by way of the CVPS Open
Access Transmission Tariff for transmission service
(Delivery Service C in Exhibit 4.c) and will take
distribution service for an allocated portion of
specific distribution facilities by way of the CVPS
Open Access Transmission Tariff. (Delivery Service
D in Exhibit 4.c)
iv. PSNH shall be responsible for provision of delivery
service and billing to NHEC for use of the PSNH system.
CVPS shall be responsible for provision of delivery
service and billing to NHEC for use of the CVPS system.
v. Woodsville Fire District Water and Light Department
(Woodsville) will continue to be served by CVPS/CVEC
including service over the present CVEC transmission
line which will not be sold to PSNH.
c. The points of delivery shall be as detailed in Exhibit
4.c attached hereto.
d. CVPS and PSNH establish the following clearly defined
demarcations of ownership at each delivery point. It is
agreed that the 12.5 kV delivery point demarcation (see
Exhibit 4.c) is at the first pole located in-New Hampshire
(east side of Connecticut River). In addition, 46 kV
delivery points (Interconnection Points 8 through 13 in
Exhibit 4.c) are at each radial 46 kV tap on the CVPS 46 kV
facilities from Charlestown, New Hampshire to Windsor and
Ascutney, Vermont. The Lafayette Street 46kV delivery point
(Interconnection Point 7 in Exhibit 4.c) shall be on the
load side of switch 406 and 389, subject to site review.
e. CVPS shall have the right to revise the transmission
service and the terms and conditions thereof from time to
time in accordance with applicable law and PSNH shall have
the right to seek remedies or modification under such
applicable law.
f. Termination by PSNH of delivery at any delivery point
described in Exhibit 4.c, will be subject to the following
provision to be included as Paragraph 5 in the Service
Agreement For Network Integration Transmission Service:
"This Service Agreement shall become effective on January 1,
2004 and shall continue in effect thereafter until
terminated with one year's written notice by either party;
provided that, unless this service agreement is superseded
by another service agreement providing for the Transmission
Customer to take and pay for transmission service over the
facilities specified in this paragraph, the Transmission
Customer shall pay to the Transmission Provider, within
thirty (30) days of the rendering of the ▇▇▇▇, (a) the net
book value as of the termination date of (i) the
transmission and distribution facilities of the Transmission
Provider designated in Specification No. 2 to this Service
Agreement that are no longer used and useful for the
provision of electric utility service, and (ii) the specific
meter and meter-related plant that are the basis for the
Delivery Point Cost charged by the Transmission Provider to
the Transmission Customer as provided under Attachment H-3
to the Tariff and that are no longer used and useful for the
provision of electric utility service; and (b) the actual
cost of dismantling and removing the facilities and plant
listed in (a). The ▇▇▇▇ shall include the cost of
dismantling and removing all meter and meter-related plant."
Specification No. 2 will be drafted by CVPS and provided to
PSNH no less than one-hundred and twenty (120) days before
the Effective Date of the Service Agreement and PSNH does
not waive any rights to comment on Specification No. 2 or
contest the inclusion of any transmission or distribution
facilities in the document.
g. PSNH and CVPS shall cooperate in establishing metering
at each interconnection point sufficient to allow accurate
billing of transmission services listed in section 3(a) and
3(b) above and to accurately report hourly load information
to VELCO and the Independent System Operator New England, or
successor organizations, as required for regional energy
markets. Other than as provided in Exhibit 4.g., CVPS will
own and maintain all delivery point metering providing
service to the PSNH delivery points listed in Exhibit 4.c.
PSNH will own and maintain all delivery point metering
providing service to the four NHEC delivery points. CVPS
and PSNH will share, at no cost charged to each other,
access to meter information as required by each company.
h. PSNH shall continue to deliver power to CVPS from the
following IPP's denoted below at no charge to CVPS through
the remaining terms of CVPS's current power purchase
obligations: Lafayette Street Hydro, Lower Valley,
Sweetwater Hydro, and Woodsville Hydro.
i. As part of the Standard Network Operating Agreement
under CVPS' Open Access Transmission Tariff, the Parties
will negotiate and include provisions relating to land
rights, joint use of facilities, meter and plant relocations
and additions, easements and licenses as may be necessary to
effectuate the transactions herein. Pursuant to paragraph
2, above, PSNH shall be responsible to pay CVPS the fair
market value of any land rights, easements and licenses and
the actual incremental make-ready/relocation costs for
meters and plant relocations and additions.
5. CUSTOMER TRANSITION
a. At least 60 days prior to closing, CVEC will provide to
PSNH sufficient data for PSNH to prepare its systems to
receive CVEC customers including but not limited to service
addresses, meter information, meter reading routes, circuit
information, etc. The data to be transferred will be
mutually agreed upon between CVEC and PSNH and described
prior to closing in Exhibit 5.a. Such data will be
transferred in a format and manner also to be described
prior to closing in Exhibit 5.a.
b. On the closing date, CVEC will prepare a computer file
in the format described in Exhibit 5.a that contains the
specific customer data on all parties who are active CVEC
customers. If a customer is enrolled in a CVEC program
where PSNH offers an equivalent program, the file will
contain sufficient information to allow PSNH to enroll the
customer in the PSNH program on initiation of their PSNH
account. Examples would be PSNH's Level Payment Program,
the statewide Electric Assistance Program, LIHEAP, etc.
c. The CVEC customer meters will be read by PSNH (with
assistance from CVPS if so requested) using CVPS-supplied
hand-held meter reading recording devices on their regularly
scheduled cycle meter read date after closing. Such hand-
held meter reading recording devices shall be supplied by
CVPS for such purpose at no charge to PSNH, and shall be
returned, in good working condition, to CVPS as soon as
commercially reasonable following use as contemplated
herein. CVEC will prorate the difference between the meter
reading obtained after the closing and the customer's prior
meter reading based solely on the number of days during the
reading period that occurred before and after the closing
date. CVEC will on a daily basis transfer to PSNH in a
format and method to be mutually agreed upon, the prorated
meter reading which CVEC calculated attributable to the
closing date and the reading obtained on the cycle read
date. For customers with demand billing, CVEC and PSNH
agree to use best efforts to obtain actual meter readings as
of the day of closing. At least the 100 largest demand
customers will be read on the closing date. For CVEC
accounts that have interval metering, CVEC will transfer the
detailed 15 minute interval data recorded on or after the
closing date to PSNH for use in preparing the PSNH billing
for the period after the closing date. CVEC will use the
prorated meter reading difference attributable to the period
prior to the closing to prepare a final ▇▇▇▇ for the
customer. CVEC will use its normal final billing protocols
to prepare the final ▇▇▇▇ including the crediting of
deposits and accrued interest to the customer's accounts.
PSNH will use the closing date and cycle read date readings
to generate ▇▇▇▇▇▇▇▇ to the customers for such initial ▇▇▇▇
period.
d. CVEC will continue to own all active and inactive
accounts receivable generated prior to the closing and
pursue collection of such receivables in the normal course
for "final billed" customers. Any deposits and interest
remaining after successful collection of any outstanding
accounts receivable will be refunded under current NHPUC
regulations.
e. CVPS, or its appropriate affiliate, will retain the
water heater rental program currently available to CVEC
customers through CVPS's unregulated subsidiary SmartEnergy
Services and will generate its own ▇▇▇▇▇▇▇▇ for that program
after the closing date.
f. On the closing date, CVEC will also transfer to PSNH
all service orders, requests for line work, and meter-
related service requests with effective dates after the
closing date in a format and manner to be mutually agreed
upon and described prior to closing in Exhibit 5.f. The
Parties shall cooperate in advance of closing to provide
this information in a manner and on a schedule that will
permit the uninterrupted provision of service to customers
immediately following the closing date. CVEC will continue
to pursue the finalization of service orders commenced prior
to the closing date and send the results to PSNH in the
format and method to be described in Exhibit 5.f as they are
finalized by CVEC.
g. CVPS will cooperate with PSNH to provide metering
equipment and spares at fair market value following closing
as requested by PSNH.
6. EMPLOYEE PROTECTIONS
a. PSNH will offer qualified CVPS employees who are
working in the CVEC franchise area at the time of closing
similar positions with PSNH, which positions, if
represented, will be covered under the terms and conditions
of the collective bargaining agreement then in effect
between PSNH and IBEW Local 1837. Such employees are
designated on Exhibit 6.a attached hereto. (Exhibit 6.a may
be completed at a reasonable time prior to the closing).
Such designated employees who are not represented by a union
will be offered similar positions with PSNH. These
designated employees (both represented and non-represented)
will be eligible to participate in the same employee
benefits (health, life insurance, disability, 401(k),
vacation, holiday, pension and post-retirement health and
life insurance, etc.) that are made available to, and under
the same terms and conditions as, PSNH employees generally.
Specific details relating to the merging, bridging and/or
offsetting of benefits and service will be provided once all
of the benefit plan and other related information specified
in the data requests have been received and fully reviewed.
b. To the extent permitted by applicable law, CVPS shall
provide to PSNH all employee records pertaining to its
employees who are offered positions with PSNH pursuant to
this paragraph.
7. INDEMNIFICATION AND HOLD HARMLESS
a. PSNH shall not be liable for injury or damages to
person (including death) or property or any claims, demands,
causes of action and contentions whatsoever, including those
which the New Hampshire Department of Environmental Services
("NHDES"), the United States Environmental Protection Agency
("USEPA"), any other governmental entity or potentially
responsible party ("PRP") or other person has or might have
against PSNH, its respective successors, affiliates,
parents, subsidiaries, and assigns (collectively, the "PSNH
Entities"), on account of, with respect to, or in any way
connected with or arising solely out of from or in
connection with CVEC's, CVPS's, their agents', employees',
customers', subcontractors' or invitees' use or ownership of
the Property prior to Closing or otherwise occurring within
the Property prior to Closing, including, without
limitation, study costs, remediation costs, response costs,
governmental oversight costs, contribution costs, costs of
operation and maintenance of any remedy, damages, or
attorneys' fees taken at or in respect of the Property under
applicable Federal or State statutory or common law
including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980, as amended, 42 U.S.C. 9601 et seq. ("CERCLA" or
"Superfund"), the New Hampshire Hazardous Waste Clean-Up
Fund, RSA Chapter 147-B (the "NH Hazardous Waste Act"), as
amended, or any successor statutes thereto (together, the
"Pre-Closing Covered Claims"). To the maximum extent this
agreement may be made effective according to law, CVPS
agrees to defend, indemnify and save harmless the PSNH
Entities from and against the Pre-Closing Covered Claims.
b. In like manner neither CVEC nor CVPS shall be liable
for injury or damages to person (including death) or
property or any claims, demands, causes of action and
contentions whatsoever, including those which the NHDES,
the USEPA, any other governmental entity or PRP or other
person has or might have against CVEC, CVPS, their
respective successors, affiliates, parents, subsidiaries,
and assigns (collectively, the "CVPS Entities"), on account
of, with respect to, or in any way connected with or arising
solely out of from or in connection with PSNH's, its
agents', employees', customers', subcontractors' or
invitees' use or ownership of the Property following Closing
or otherwise occurring within the Property following
Closing, including study costs, remediation costs, response
costs, governmental oversight costs, contribution costs,
costs of operation and maintenance of any remedy, damages,
or attorneys' fees taken at or in respect of the Property
under applicable Federal or State statutory or common law
including, without limitation, CERCLA, the NH Hazardous
Waste Act, as amended, or any successor statutes thereto
(together, the "Post-Closing Covered Claims"). To the
maximum extent this agreement may be made effective
according to law, PSNH agrees to defend, indemnify and save
harmless the CVPS Entities from and against the Post-Closing
Covered Claims.
c. The Parties believe they are not required to comply
with any bulk sales law of the State of New Hampshire. In
lieu of such compliance, CVPS agrees to indemnify and hold
PSNH harmless from and against all claims of every
description which the creditors of CVEC may assert against
any of the assets to be conveyed hereunder.
8. CONDITIONS TO PSNH'S OBLIGATION TO CLOSE
The obligations of PSNH hereunder shall be subject to the
fulfillment on or prior to Closing of each of the following
conditions:
a. Compliance with Agreement: All the terms, covenants
and conditions of this Agreement to be complied with and
performed by CVEC and CVPS, as appropriate, on or before
Closing shall have been complied with and performed.
b. Opinion of counsel: PSNH shall have received a
favorable opinion dated the date of Closing from New
Hampshire counsel for CVEC and CVPS (for issues pertaining
to New Hampshire law) and from in-house counsel to CVEC and
CVPS, in form and substance satisfactory to PSNH, addressed
to PSNH and covering the matters set forth in Exhibit 8.b
hereto.
c. Title Commitment: PSNH shall have received, at its
sole expense, a title report and commitment issued by a
reputable title insurance company licensed to do business in
the State of New Hampshire and acceptable to PSNH,
committing to the issuance to PSNH at time of closing of a
current standard form American Land Title Association (ALTA)
owner's title insurance policy, with coverage in the amount
of the purchase price or such other amount as shall be
satisfactory to PSNH, insuring good and marketable title in
and to the Acquired Assets and to any assets owned by CVPS,
consisting of the real property and real property rights and
interests, together with the improvements thereon, to be
transferred to PSNH at closing, free and clear of any and
all liens and encumbrances, and subject only to such real
property taxes for the current tax year as are a lien but
are not yet due and payable, to the standard printed
exceptions contained in the ALTA form owner's title policy,
and to no other material exceptions other than those as PSNH
shall have expressly approved in writing prior to closing.
d. No action or other proceeding: No action or other
proceeding before any court or any governmental agency or
body shall have been be pending in which the validity or
legality of this Agreement (in either case, in whole or in
part), or the consummation of the transactions contemplated
hereby is questioned or to obtain damages in connection with
the Agreement or the consummation of the transactions
contemplated hereby, and no investigation shall be pending
by a person, legal entity or agency having legal standing to
petition any court to restrain or prohibit consummation of
the transactions, or any of them, contemplated herein.
e. Representations of CVPS and CVEC: The representations
of CVPS and CVEC in this Agreement shall be true and correct
in all material respects on and as of the date of Closing
with the same effect as though all such representations had
been made on and as of such date; each and all of the
agreements by CVPS and CVEC to be performed at or before
Closing pursuant to the terms hereof shall have been duly
performed; CVPS and CVEC shall have delivered to PSNH a
certificate dated the date of Closing stating that all
representations of CVPS and CVEC contained in this Agreement
are true in all material respects; and PSNH shall have
received all of the documents and executed agreements to be
delivered to it hereunder.
f. Approvals: This transaction is conditioned upon
receipt of necessary regulatory approvals. Such approvals
must be final and unconditional or with conditions
acceptable to PSNH in its sole discretion, and must include,
without limitation, approval of recovery of the costs of
this transaction and payment of the amounts contemplated
herein to CVPS by PSNH, as more fully set forth in the "PSNH
Related Settlement." Regulatory agencies from which
approvals are required include, but are not limited to, the
New Hampshire Public Utilities Commission and the Federal
Energy Regulatory Commission.
g. Lender consents: This transaction is conditioned upon
receipt by PSNH of necessary lender consents under credit
agreements granted to PSNH or Northeast Utilities.
9. CONDITIONS TO CVPS'S AND CVEC'S OBLIGATIONS TO CLOSE
The obligations of CVPS and CVEC hereunder shall be subject
to the fulfillment on or prior to Closing of each of the
following conditions:
a. Compliance with Agreement: All the terms, covenants
and conditions of this Agreement to be complied with and
performed by PSNH, on or before Closing shall have been
complied with and performed.
b. Opinion of counsel: CVPS shall have received a
favorable opinion dated the date of Closing from New
Hampshire counsel for PSNH, in form and substance
satisfactory to CVPS, addressed to CVPS and covering the
matters set forth in Exhibit 9.b hereto.
c. No action or other proceeding: No action or other
proceeding before any court or any governmental agency or
body shall be pending in which the validity or legality of
this Agreement (in either case, in whole or in part), or the
consummation of the transactions contemplated hereby is
questioned or to obtain damages in connection with the
Agreement or the consummation of the transactions
contemplated hereby, and no investigation shall be pending
by a person, legal entity or agency having legal standing to
petition any court to restrain or prohibit consummation of
the transactions, or any of them, contemplated herein.
d. Representations of PSNH: The representations of PSNH
in this Agreement shall be true and correct in all material
respects on and as of the date of Closing with the same
effect as though all such representations had been made on
and as of such date; each and all of the agreements by PSNH
to be performed at or before Closing pursuant to the terms
hereof shall have been duly performed; PSNH shall have
delivered to CVPS a certificate dated the date of Closing
stating that all representations of PSNH contained in this
Agreement are true in all material respects; and CVPS shall
have received all of the documents and executed agreements
to be delivered to it hereunder.
e. Approvals: This transaction is conditioned upon
receipt of necessary regulatory approvals. Such approvals
must be final and unconditional or with conditions
acceptable to CVPS and CVEC in their sole discretion, and
must include, without limitation, approval of the matters
set forth in the CVEC Related Settlement". Regulatory
agencies from which approvals are required include, but are
not limited to the New Hampshire Public Utilities Commission
and the Federal Energy Regulatory Commission.
f. Lender consents: This transaction is conditioned upon
receipt by CVEC and CVPS of necessary lender consents under
credit agreements.
g. CVPS shall have received the "RS-2 Stranded Cost
Payment" and "Restructuring Costs, Regulatory Assets,
Certain Litigation Costs and Other Outstanding Balances"
payment as defined in the CVPS/CVEC "Related Settlement."
10. THE PRESERVATION OF BUSINESS
CVEC's business shall continue to operate in accordance with
customary utility practice through the date of closing,
including the preservation of franchises, licenses, property
rights, insurance, etc.
11. ACCESS TO PROPERTY
CVPS and CVEC shall cooperate with PSNH through the date of
closing to allow PSNH to have access at mutually agreeable
and reasonable times during normal business hours to CVEC
facilities, books and records to make such due diligence
investigations as PSNH deems necessary. PSNH will perform
any such investigations, and shall keep information received
during such investigations confidential to the extent set
forth in the confidentiality agreement that is a part of
this transaction
12. POST CLOSING
The Parties agree to cooperate with each other post-closing
to provide assistance concerning the provision of electric
service to CVEC's customers and evidence and testimony as
necessary before regulatory, administrative and judicial
bodies as may reasonably be necessary and requested by PSNH
for a period of two (2) years from date of closing. PSNH
shall be responsible for reimbursing CVPS for all costs,
including reasonable legal fees, associated with these
matters.
13. CHOICE OF LAW
New Hampshire law shall govern this transaction.
14. TERMINATION
Termination shall be in accordance with the provisions of
the Related Settlements. In the event that all the
regulatory approvals and lender consents are not obtained by
June 30, 2004, this Agreement and the transaction
contemplated herein shall terminate.
15. BREACH
Damages for claims of breach of contract shall be limited to
direct costs related to the breach and shall not include
consequential damages.
16. DISPUTE RESOLUTION
In the event that it becomes necessary, the Parties agree to
pursue resolution first through mediation and share the cost
of a mutually acceptable mediator. If the Parties are
unable to resolve the issues through mediation within a
reasonable period of time, the Parties will jointly select
an arbitrator or panel of arbitrators to resolve the matter
through binding arbitration and shall share the cost of such
mutually acceptable arbitrator(s). Each party shall bear
its own direct costs of such dispute resolution, including,
without limitation, attorneys' fees and costs.
17. CLOSING
a. Closing shall take place at a mutually acceptable time
and place as necessary to ensure an effective date of the
transaction of January 1, 2004, or such other date as
adjusted by mechanisms agreed to by the Parties hereto and
the State Parties in the other Related Settlements.
b. At closing, CVPS shall present PSNH with all bills of
sale, assignments, deeds, certificates of title for
vehicles, customer lists, service records, maps, diagrams,
equipment records, inventory accounts, etc., in its or
CVEC's possession required by this Agreement or otherwise
reasonably necessary for the operation and maintenance of
the CVEC system by PSNH or for the billing and management of
CVEC's customer accounts by PSNH.
c. At closing, CVEC and CVPS shall provide an affidavit
regarding the Foreign Investment in Real Property Tax Act of
1980 ("FIRPTA") in the form attached as Exhibit 17.c,
together with such additional affidavits and documents in
form satisfactory to PSNH's title insurer as shall be
reasonably required to convey good and marketable title free
and clear of liens and encumbrances.
d. At closing, the Parties shall provide each other with
certificates of good standing issued on or near the date of
Closing by the appropriate Secretary of State.
e. At closing, CVEC and CVPS shall each deliver to PSNH
(1) warranty deeds in recordable form conveying to PSNH good
and marketable title to the Acquired Assets and to any
assets owned by CVPS being transferred to PSNH, consisting
of the real property and real property rights and interest,
together with the improvements thereon, free and clear of
all liens and encumbrances except as provided herein, (2)
bills of sale conveying, transferring and selling to PSNH
all right, title and interest of CVEC and CVPS in and to all
of the Acquired Assets and any assets owned by CVPS being
transferred to PSNH, consisting of the facilities, equipment
and all other personal property, which bills of sale shall
contain a warranty that such property is free and clear of
all liens and encumbrances except as provided herein, and
(3) such other assignments, conveyances and transfer
instruments, in form and substance acceptable to PSNH, as
shall be reasonably required or necessary to effectuate the
lawful transfer to PSNH of the assets of CVEC and CVPS
covered by this Agreement.
18. REPRESENTATIONS AND WARRANTIES
a. CVEC and CVPS hereby represent and warrant to PSNH:
i. Each Seller is duly organized, validly existing and in
good standing under the laws of its jurisdiction of
incorporation and has all requisite corporate power and
authority to own, lease, and operate its properties and
to carry on its business as it is now being conducted.
CVPS is qualified to do business in New Hampshire.
ii. Each Seller has the full power and authority to execute
and deliver this Agreement and the Related Settlements
with the State Parties and, subject to receipt of
required regulatory approvals, to perform its obligations
hereunder and thereunder. All necessary actions or
proceedings to be taken by or on the part of each Seller
to authorize and permit the due execution and valid
delivery by such Seller of this Agreement and the Related
Settlement and the instruments required to be duly
executed and validly delivered by such Seller pursuant
hereto and thereto, the performance by such Seller of its
obligations hereunder and thereunder, and the
consummation by such Seller of the transactions
contemplated herein and therein, have been duly
and properly taken. This Agreement has been duly
executed and validly delivered by each Seller, and
assuming due execution and delivery by PSNH and receipt
of all regulatory approvals, constitutes the valid and
legally binding obligation of such Seller, enforceable
in accordance with its terms and conditions, subject to
applicable bankruptcy, insolvency, moratorium and other
Laws affecting the rights of creditors generally and the
application of general principles of equity (regardless
of whether such enforceability is sought in equity or at
law). The Sellers acknowledge the receipt and
sufficiency of consideration with respect to this
Agreement and the Related Settlement.
iii. Subject to each Seller obtaining the required
regulatory approvals, neither the execution and delivery
by such Seller of this Agreement or the Related
Settlement, nor the consummation of the transactions
contemplated hereby and thereby will (i) violate any law
to which such Seller or any of its property is subject
or any provision of the charter or by-laws of such
Seller, or (ii) conflict with, result in a breach or
forfeiture of, constitute a default under, result in the
acceleration of, create in any person the right to
accelerate, terminate, modify, revoke, suspend or cancel,
or require any notice under any agreement,
contract, lease, permit, license, instrument, or other
arrangement to which such Seller is bound or to which any
of its assets is subject (or result in the imposition of
any Lien upon any of the Acquired Assets).
iv. Except for required regulatory approvals, no
declaration, filing or registration with, or notice to,
or authorization, consent or approval of any
governmental authority is necessary for the execution
and delivery of this Agreement or the Related Settlement
by such Seller, or the consummation of the transactions
contemplated hereby or thereby.
v. Each Seller represents and warrants that it holds good
and marketable title to the Acquired Assets and to any
assets owned by CVPS being transferred to PSNH,
respectively.
vi. The Sellers have not received any written notice from
any Governmental Authority that such Seller is not in
compliance with all laws applicable to the Acquired
Assets and such Seller is not in violation of such Laws.
vii. The Sellers warrant and represent that all Permits
which are required in connection with the business of
owning and/or operating the Acquired Assets have been
obtained, and (A) all of such Permits are in full force
and effect and no proceedings for the suspension or
cancellation of any of them is pending or threatened;
(B) no notice of violation of any of such Permits has
been received; and (C) all Permits are being complied
with.
viii. All tax returns of such Seller required to be
filed regarding the ownership or operation of the
Acquired Assets have been filed, and all taxes due as
indicated thereon have been paid, except where such
taxes are being contested in good faith by appropriate
proceedings. There is no unpaid tax on such Seller's
ownership, operation or use of the Acquired Assets for
which the Buyer could reasonably be expected to become
liable.
ix. Except as disclosed in Exhibit 18.a, there does not
exist any violation of any environmental laws applicable
to the Acquired Assets. Except as disclosed in Exhibit
18.a, there are no underground storage tanks, active
or abandoned or polychlorinated-biphenyl containing
equipment located on any of the properties to be
transferred as part of the Acquired Assets. All
environmental audits or assessments regarding the
Acquired Assets conducted on or after January 1,
1996 by, or on behalf of, or which are in the
possession of such Seller or its Affiliates, have been
made available to the Buyer prior to execution of this
Agreement and all environmental audits or assessments
regarding the Site conducted prior to such date by,
on behalf of, or which are in the possession of such
Seller or its Affiliates have also been made available
to the Buyer prior to execution of this Agreement.
x. During the period between the execution of this
Agreement and Closing, the Acquired Assets shall be
operated and maintained in accordance with customary
utility practice, including the preservation of
franchises, licenses, property rights, insurance, etc.
b. PSNH hereby represents to the Sellers:
i. It is duly organized, validly existing and in good
standing under the laws of New Hampshire and has all
requisite corporate power and authority to own, lease,
and operate its properties and to carry on its business
as it is now being conducted.
ii. It has the full power and authority to execute and
deliver this Agreement and the Related Settlement with
the State Parties and, subject to receipt of required
regulatory approvals and lender consents, to perform its
obligations hereunder and thereunder. All necessary
actions or proceedings to be taken by or on
the part of PSNH to authorize and permit the due
execution and valid delivery by it of this Agreement
and the Related Settlement and any instruments required
to be duly executed and validly delivered by PSNH
pursuant hereto and thereto, the performance by PSNH of
its obligations hereunder and thereunder, and the
consummation by PSNH of the transactions contemplated
herein and therein, have been duly and properly
taken. This Agreement has been duly executed and validly
delivered by PSNH, and assuming due execution and
delivery by the Sellers and receipt of all regulatory
approvals and lender consents, constitutes the valid and
legally binding obligation of PSNH, enforceable in
accordance with its terms and conditions, subject to
applicable bankruptcy, insolvency, moratorium and other
Laws affecting the rights of creditors generally and the
application of general principles of equity (regardless
of whether such enforceability is sought in equity or at
law). PSNH acknowledges the receipt and sufficiency of
consideration with respect to this Agreement and the
Related Settlement.
iii. Subject to PSNH obtaining the required regulatory
approvals and lender consents, neither the execution and
delivery by PSNH of this Agreement or the Related
Settlement, nor the consummation of the transactions
contemplated hereby and thereby will (i) violate any law
to which PSNH or any of its property is subject or any
provision of the charter or by-laws of PSNH, or (ii)
conflict with, result in a breach or forfeiture of,
constitute a default under, result in the acceleration of,
create in any person the right to accelerate, terminate,
modify, revoke, suspend or cancel, or require any notice
under any agreement, contract, lease, permit, license,
instrument, or other arrangement to which PSNH is bound.
iv. Except for required regulatory approvals, no
declaration, filing or registration with, or notice to,
or authorization, consent or approval of any governmental
authority is necessary for the execution and delivery of
this Agreement or the Related Settlement by PSNH, or the
consummation of the transactions contemplated hereby or
thereby.
c. The Parties mutually agree:
i. to cooperate and use all commercially reasonable
efforts with respect to their respective obligations to
(A) promptly prepare and file all necessary
documentation, (B) effect all necessary applications,
notices, petitions and filings and execute all
agreements and documents, (C) obtain the transfer,
issuance or reissuance to the Buyer of all necessary
Permits, (D) facilitate the substitution of the Buyer
for the Sellers where appropriate on pending Permits
and (E) obtain all necessary consents, waivers, approvals
and authorizations of all other parties necessary or
advisable to consummate the transactions contemplated
by this Agreement or any of the Related Settlements
(including, without limitation, required regulatory
approvals and lender consents) or approvals
required by the terms of any note, bond, mortgage,
indenture, deed of trust, license, franchise, Permit,
concession, contract, lease, warranty or other instrument
to which Sellers or Buyer is a party or by which any
of them is bound. Without limiting the generality
of the foregoing, each of the Sellers and the Buyer
shall, as promptly as practicable after the execution of
this Agreement and in any event by no later than
forty-five (45) days after such date, make the necessary
filings and pursue receipt of the required regulatory
approvals and lender consents.
ii. The Buyer and the Sellers each shall have the right to
review and comment in advance on all filings relating to
the transactions contemplated by this Agreement or any
of the Related Settlements made by any Party in
connection with the transactions contemplated hereby
or thereby. The Parties shall in good faith consider
such comments before making any such filings.
iii. To cooperate to facilitate the orderly transition of
the franchised electric business of CVEC to PSNH in a
manner that ensures the continued provision of public
utility service in accordance with RSA 374:1. During
the period between the execution of this Agreement and
Closing, the Sellers shall assist the Buyer with its
efforts to plan for and implement the transition of
ownership and operation of the Acquired Assets from
the Sellers to the Buyer. After the Closing date,
PSNH shall have reasonable access to the
employees of the CVPS, for purposes of consultation or
otherwise, to the extent that such access may reasonably
be required in connection with matters relating to the
operations of the Acquired Assets.
19. NOTICES
Any notices or communication required or performed hereunder
shall be sufficiently given if sent to:
a. To PSNH:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Secretary & Assistant General Counsel
Public Service Company of New Hampshire
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
P. O. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
b. To CVPS/CVEC:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President Customer Services, Secretary, and
General Counsel
Central Vermont Public Service Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
IN WITNESS WHEREOF, the Parties have executed this Agreement
as of the day and year first written above.
PUBLIC SERVICE COMPANY CENTRAL VERMONT PUBLIC
OF NEW HAMPSHIRE SERVICE CORPORATION
By its Assistant Secretary By its Senior Vice President
and Assistant General Counsel Customer Services, Secretary,
and General Counsel
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
CONNECTICUT VALLEY ELECTRIC
COMPANY INC.
By its Senior Vice President
Customer Services, Secretary,
and General Counsel
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Exhibit 1.a
DETAILED LISTING OF ASSETS TO BE SOLD BY CVEC
Exhibit 1.b
LISTING OF PROPERTY TO BE RETAINED BY CVEC
Exhibit 1.c
PERMITS TO BE TRANSFERRED
Exhibit 1.e
CONTRACTS TO BE TRANSFERRED TO PSNH BY CVEC
Exhibit 1.j
PERMITTED ENCUMBRANCES ON CVEC PROPERTY
Exhibit 2.a
DETAILED LISTING OF ASSETS TO BE SOLD BY CVPS
Exhibit 2.e
PERMITTED ENCUMBRANCES ON CVPS PROPERTY
Exhibit 4.c
TRANSMISSION SERVICE SPECIFICATIONS
INTER- VERMONT NEW VOLTAGE NHEC GEN. DELIVERY
CONNECT SOURCE HAMPSHIRE (kV) CONNECTION (see below) SERVICES
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇ ▇▇▇ ▇▇▇▇▇▇ 12.5 ▇, ▇, ▇, ▇
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 12.5 * ▇, ▇, ▇, ▇
▇ ▇▇▇▇▇ ▇▇▇▇ 12.5 ▇, ▇, ▇, ▇
▇▇▇▇▇
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 12.5 X ** ▇, ▇, ▇, ▇
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ 12.5 X A, B, C, D
6 Windsor Cornish 12.5 X ▇, ▇, ▇, ▇
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 46 *** ▇, ▇, ▇
▇▇.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇. 46 A, B, C
9 Ascutney Claremont 46 A, B, C
(Inactive) Foundry (Joy)
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇. 46 X A, B, C
(Temple
Eastex)
11 Ascutney ▇▇▇ ▇▇ **** ▇, ▇, ▇
(Sweetwater
Hydro)
12 Ascutney Grissom 46 A, B, C
River
(▇▇▇▇▇▇▇▇)
13 Ascutney Wheelabrator ▇▇ ***** ▇, ▇, ▇
(NH/VT Solid
Waste)
Generators Delivery Services Required
* ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ A. VELCO as agent for ISO-NE RNS
** Bath Electric, Pettyboro, service (69 kV, 115 kV, 230 kV,
Woodsville Hydro and 345 kV facilities).
*** Lafayette St. Hydro (Lower B. VELCO LNS service (mostly ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇), ▇▇▇▇▇ ▇▇▇▇▇▇ kV).
**** Sweetwater Hydro C. CVPS Network Service (34.5 kV,
***** Wheelabrator (NH/VT Solid 46 kV, 69 kV, and 115 kV).
Waste) Includes certain allocated
charges from National Grid for
network service.
D. CVPS distribution delivery
facility charge (local
distribution 12.5 kV).
Exhibit 4.g
Ownership of Metering Facilities
Exhibit 4.i
FACILITIES OPERATING AGREEMENT
Exhibit 5.a
CUSTOMER DATA TRANSFER SPECIFICATIONS
Exhibit 5.f
SERVICE ORDER TRANSFER SPECIFICATIONS
Exhibit 6.a
DESIGNATED EMPLOYEES
Exhibit 8.b
OPINION OF COUNSEL TO PSNH
Exhibit 9.b
OPINION OF COUNSEL TO CVPS
Exhibit 17.c
FORM OF FIRPTA AFFIDAVIT
Section 1445 of the Internal Revenue Code provides that a
transferee of a U.S. real property interest must withhold tax if the
transferor is a foreign person. To inform the transferee that
withholding tax is not required upon the disposition of U.S. real
property interest by [___NAME OF SELLER____], a [_______________]
corporation (the "Company"), the undersigned hereby certifies the
following on behalf of the Company:
1. The Company is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the
Internal Revenue Code and the Income Tax Regulations);
2. The Company's U.S. employer identification number is
[__________________];
3. The Company's office address is [_____________________];
The Company understands that this certification may be disclosed
to the Internal Revenue Service by a transferee and that any false
statement contained herein could be punished by fine, imprisonment or
both.
Under penalties of perjury, I declare that I have examined this
certificate and to the best of my knowledge and belief it is true,
correct and complete, and I further declare that I have authority to
sign this document on behalf of the Company.
[______________NAME OF SELLER________________]
By:_________________________________
Its:_________________________________
Date:_______________________________
Exhibit 18.a
ENVIRONMENTAL DISCLOSURES
