Document:

EX 10.8 10K 2013

Exhibit 10.8

EXECUTION COPY

TRANSFER AGREEMENT
between
BA LEASING BSC, LLC,
as Transferor,
and
PORTLAND GENERAL ELECTRIC COMPANY,
as Transferee

December 18, 2013

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TRANSFER AGREEMENT
This TRANSFER AGREEMENT (this “Agreement”) is made and entered into effective as of  December 18, 2013 (the “Effective Date”), by and between BA LEASING BSC, LLC, a Delaware limited liability company (“Transferor”), and PORTLAND GENERAL ELECTRIC COMPANY, an Oregon corporation (“Transferee”).  Transferor and Transferee are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, Transferor presently holds (as successor in interest to General Electric Credit Corporation), as Owner Participant under the Trust Agreement, all of the right, title and interest in and to one hundred percent (100%) of the beneficial interest in the Trust Estate, which includes the Facility Assets;
WHEREAS, pursuant to the Notice of Election of Termination dated as of November 14, 2013 (the “Notice of Election”), Owner Trustee (at the direction, and for the benefit, of Owner Participant under the provisions of the Trust Agreement) (i) has provided to Transferee written notice of Owner Trustee’s election of the “Termination” (as defined in the PGE Bill of Sale) with respect to the Facility Assets to be effective as of 11:59:59 p.m. (Pacific Time) on December 31, 2013 (the “Termination Time”), (ii) has paid to Transferee the sum of One Dollar ($1.00) in connection with such election, and (iii) has provided to Transferee written notice of Owner Trustee’s further election of clause (x) of the third paragraph of page 6 of the PGE Bill of Sale (the “Net Revenues Election”) because Transferee has not elected the “Disposition” (as defined in the PGE Bill of Sale) of the Facility Assets, all in accordance with the PGE Bill of Sale and as further described in the Notice of Election;
WHEREAS, pursuant to the Notice of Election, Transferee has confirmed that it will not elect the “Disposition” of the Facility Assets and, therefore, the “Termination” shall occur on, and the Net Revenues Election shall be in effect as of, the Termination Time, all in accordance with the PGE Bill of Sale;
WHEREAS, at or prior to the Termination Time, Transferor shall enter into a transaction or series of transactions pursuant to which the Owner Trustee shall distribute the Trust Estate, including the Facility Assets, to Transferor at the Termination Time (collectively, the “Trust Unwind Transaction”);
WHEREAS, after giving effect to the Trust Unwind Transaction, Transferor shall hold the Facility Assets, free and clear from all Liens in favor of, created by, or resulting from acts of, or any failure to act by, Transferor, the Owner Trustee or the Owner Participant or Persons claiming by or through Transferor, the Owner Trustee or the Owner Participant (including, without limitation, the Indenture Trustee), other than Permitted Liens, and with respect to interests in real property comprising the Facility Assets, Permitted Encumbrances; and
WHEREAS, notwithstanding the Notice of Election, Transferor desires to transfer, assign and delegate to Transferee, and Transferee desires to acquire, accept, assume and perform when 

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due, all of Transferor’s rights, title and interest in, to and under, and all of Transferor’s obligations, if any, with respect to, the Facility Assets, on the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, and obligations set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I
DEFINITIONS; RULES OF INTERPRETATION
1.1    Rules of Interpretation.  For purposes of this Agreement, the rules of interpretation set forth in Part A of Annex I shall apply.
1.2    Certain Definitions.  Capitalized terms used but not defined in this Agreement shall have the meanings specified in Part B of Annex I.
    
ARTICLE II
TRANSFER
2.1    Transfer; Assumed Liabilities; Transfer Price.
(a)    Transfer.  On the terms and subject to the conditions set forth in this Agreement, at the Closing, Transferor shall transfer, convey, assign and deliver to Transferee, free and clear from all Liens in favor of, created by, or resulting from acts of, or any failure to act by, Transferor, the Owner Trustee or the Owner Participant or Persons claiming by or through Transferor, the Owner Trustee or the Owner Participant (including, without limitation, the Indenture Trustee) (collectively, “Transferor Liens”), other than Permitted Liens and, with respect to interests in real property comprising the Facility Assets, Permitted Encumbrances, and without further representation or warranty except as specifically provided herein, and Transferee shall accept from Transferor, “as is, where is” without reliance on any representation or warranty except as specifically provided herein, all of Transferor’s right, title and interest in, to and under, the Facility Assets.  Pursuant to this Agreement, Transferee shall acquire no rights to any assets or property of Transferor except the Facility Assets.
(b)    Assumed Liabilities.  Effective as of the Effective Time and without further Liability of Transferor, Transferee shall accept and assume and agrees to observe and perform and to pay and discharge all Liabilities, if any, which are related to, arising from or associated with the interests under the Operating Agreement and the Transmission Related Agreements (which interests were assigned or delegated to Owner Trustee pursuant to the PGE Assets Sales Agreement, including Section 5 thereof), whether before or after the Effective Time (the “Assumed Liabilities”).
(c)    Transfer Price. The aggregate transfer price for the Facility Assets shall be an amount equal to One Dollar ($1.00) (the “Transfer Price”) payable to Transferee. The Parties 

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acknowledge and agree that the Transfer Price has been satisfied by Transferor’s payment to Transferee of One Dollar ($1.00) in connection with the Notice of Election.
2.2    Bill of Sale; Assignment and Assumption Agreement.  Prior to the Closing Date, Transferee and Transferor shall execute, and may place into escrow with Troutman Sanders LLP, for delivery as of the Effective Time, (a) the bill of sale in the form attached hereto as Exhibit A (the “Bill of Sale”), and (b) the Assignment and Assumption Agreement attached hereto as Exhibit B (the “Assignment and Assumption Agreement”), together with any other documents that either Party reasonably may request be executed and delivered by the other Party in order to accomplish the transfer of the Facility Assets in accordance with the terms of this Agreement.
2.3    Time and Place of Closing.  The closing of the transactions contemplated herein (the “Closing”) will take place upon satisfaction or waiver of all of the conditions to the Closing in accordance with Article III, including delivery of the fully executed Bill of Sale and Assignment and Assumption Agreement provided for therein, to be dated as of the Closing Date.  The Closing Date shall be a date agreed to by the Parties, upon which all the conditions to the Closing set forth in Article III (other than conditions to be satisfied by deliveries at the Closing) have been satisfied or waived (the “Closing Date”).  The Parties shall exchange email confirmations of Closing by each Party sending an email to the other at the following email addresses: for Transferor at mitchell.neider@bankofamerica.com, with a copy to stephanie.o.holland@baml.com, and for Transferee at Loretta.mabinton@pgn.com. Unless otherwise agreed by the Parties, such confirmations shall occur on or about 9:00 a.m. (Pacific Standard Time) on the Closing Date.  The Closing Date shall be December 31, 2013, unless a delay is required beyond that date to satisfy any conditions to the Closing set forth in Article III which have not been satisfied or waived by such date. The Closing shall be effective as of 11:59:59 p.m. (Pacific Time) on the Closing Date (the “Effective Time”).
2.4    Termination.  This Agreement, including the obligation to transfer the Facility Assets and to execute and deliver the Bill of Sale and the Assignment and Assumption Agreement, may be terminated, and the transactions contemplated hereby may be abandoned, at any time prior to the Closing Date:
(a)    by mutual written consent of the Parties;
(b)    by Transferee, upon written notice to Transferor, if:  (i) any of the conditions in Section 3.2 have not been satisfied by the Outside Date, other than through the failure of Transferee to comply with its obligations under this Agreement; or (ii) Transferor has breached any representation, warranty or obligation in this Agreement which would result in a failure of a condition set forth in Section 3.2, and which breach has not been cured within ten (10) Business Days after written notice thereof by Transferee.
(c)    by Transferor, upon written notice to Transferee, if:  (i) any of the conditions in Section 3.1 have not been satisfied by the Outside Date, other than through the failure of Transferor to comply with its obligations under this Agreement; or (ii) Transferee has breached any representation, warranty or obligation in this Agreement which would result in a failure of a condition 

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set forth in Section 3.1, and which breach has not been cured within ten (10) Business Days after written notice thereof by Transferor.
2.5    Effect of Termination; Effect of Closing; Closing After the Termination Time.  
(a)    Effect of Termination. If this Agreement, including the obligation to transfer the Facility Assets and to deliver the Bill of Sale and Assignment and Assumption Agreement, is validly terminated by either or both of the Parties prior to the Closing Date pursuant to Section 2.4, then (i) this Agreement shall become wholly void and of no further force or effect, and the Parties shall have no further obligations hereunder, without further action by either Party, (ii) each Party shall have no further Liability to the other Party hereunder, and (iii) each Party and its Affiliates shall be fully released and discharged from any Liability under or resulting from this Agreement; provided, however, that if this Agreement is terminated by a Party pursuant to Section 2.4(b)(ii) or Section 2.4(c)(ii), then the terminating Party’s right to pursue all legal remedies available to it at law or in equity will survive such termination.

(b)    Effect of Closing.  If the Closing occurs, then the Notice of Election and Net Revenues Election shall be superseded hereby effective as of the Closing Date.  If the Closing does not occur or this Agreement is terminated in accordance with its terms, then the Notice of Election and Net Revenues Election shall be unaffected by this Agreement.
(c)    Closing after Termination. If the Closing does not occur by the Termination Time, then Transferee shall exercise operational and managerial control over the Facility Assets as provided in the Operative Documents and all revenues, costs and expenses associated with the Facility Assets for the period from the Termination Time to the Closing shall be solely for Transferee’s account.
2.6    Further Assurances.  
(a)    Each Party shall use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under Applicable Law to complete and make effective the transactions contemplated by this Agreement and the Ancillary Agreements.  Such actions shall include each Party using its commercially reasonable efforts to ensure (i) satisfaction of the conditions precedent to its obligations hereunder, as soon as practicable after the Effective Date, and (ii) delivery of the items required pursuant to Section 3.1 or Section 3.2, as applicable.  
(b)    Each Party shall provide reasonable cooperation to the other Party in obtaining consents, approvals or actions of, making all filings with and giving all notices in connection with the FERC Approvals to complete the transactions contemplated by this Agreement and the Ancillary Agreements.  The Parties shall use their commercially reasonable efforts to respond promptly and accurately to any requests for additional information made by FERC.  The Parties agree that they shall consult with each other with respect to the obtaining by each Party of its respective FERC Approval.  Each Party shall cooperate in good faith with FERC and undertake promptly any and all commercially reasonable action required to lawfully complete the transactions contemplated by this Agreement and the Ancillary Agreements.

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(c)    Subject to the terms and conditions of this Agreement, at any time or from time to time after the Closing, at either Party’s request and without further consideration, the other Party shall execute and deliver to such Party such other instruments of transfer, conveyance, assignment and confirmation (without representation, warranty or recourse except as specifically provided herein), provide such materials and information, and take such other actions as such Party may reasonably deem necessary or desirable in order more effectively to transfer, convey and assign the Facility Assets to Transferee and otherwise to complete the transactions contemplated by this Agreement.
2.7    Transfer Taxes.  Transferor and Transferee shall be responsible and pay in equal proportions any sales, use, purchase, transfer, deed, stamp, or other similar taxes and recording charges due and which may be payable by reason of the transfer of the Facility Assets under this Agreement or the transactions contemplated herein (“Transfer Taxes”).  Transferor shall be responsible for all income, profit and similar taxes incurred or imposed on Transferor with respect to the transfer of the Facility Assets by Transferor.  Transferor and Transferee shall cooperate and consult with each other prior to filing any tax returns in respect of Transfer Taxes.

ARTICLE III
CONDITIONS TO CLOSING

3.1    Transferor’s Conditions Precedent.  The obligations of Transferor to complete the transactions contemplated hereby are subject to the fulfillment to the reasonable satisfaction of Transferor, at or before the Closing, of each of the following conditions (all or any of which may be waived in writing, in whole or in part, by Transferor in its sole discretion):
(a)    Representations and Warranties.  Each of the representations and warranties made by Transferee in this Agreement shall be true and correct in all material respects on and as of the date hereof and on and as of the Closing Date as though made on and as of the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case, as of such earlier date).
(b)    Performance.  Transferee shall have performed in all material respects its obligations required to be performed at or before the Closing.
(c)    Trust Unwind Transaction.  The Trust Unwind Transaction shall have been completed.
(d)    No Litigation.  There shall not be pending or threatened any Action seeking to enjoin or restrain completion of the transactions contemplated by this Agreement or seeking damages in connection with the transactions contemplated hereby, or questioning the validity or legality of this Agreement or the transactions contemplated hereby.
(e)    FERC Approvals.  The FERC Approvals shall have been obtained and shall be in full force and effect.

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(f)    Closing Deliveries.  Transferee shall have executed and delivered to Transferor counterpart signature pages to the Bill of Sale and the Assignment and Assumption Agreement.
3.2    Transferee’s Conditions Precedent.  The obligations of Transferee to complete the transactions contemplated hereby are subject to the fulfillment to the reasonable satisfaction of Transferee, at or before the Closing, of each of the following conditions (all or any of which may be waived in writing, in whole or in part, by Transferee in its sole discretion):
(a)    Representations and Warranties.  Each of the representations and warranties made by Transferor in this Agreement shall be true and correct in all material respects on and as of the date hereof and on and as of the Closing Date as though made on and as of the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case as of such earlier date).
(b)    Performance.  Transferor shall have performed in all material respects its obligations required to be so performed at or before the Closing.
(c)    No Litigation.  There shall not be pending or threatened any Action seeking to enjoin or restrain completion of the transactions contemplated by this Agreement or seeking damages in connection with the transactions contemplated hereby, or questioning the validity or legality of this Agreement or the transactions contemplated hereby.
(d)    FERC Approvals.  The FERC Approvals shall have been obtained and shall be in full force and effect.
(e)    Closing Deliveries.  Transferor shall have executed and delivered to Transferee counterpart signature pages to the Bill of Sale and the Assignment and Assumption Agreement.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1    Representations and Warranties of Transferor.  Transferor represents and warrants to Transferee that all of the statements contained in this Section 4.1 are true and correct as of the Effective Date and will be true and correct as of the Closing Date, except, in each case, to the extent such representations and warranties are specifically made as of a different date (in which case such representations and warranties will be true and correct as of such date):
(a)    Due Organization.  Transferor is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, and has the power and authority to own, operate and lease its properties and assets and to carry on its business as it is currently conducted, and to perform its obligations under this Agreement and the Ancillary Agreements to which it is a party.

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(b)    Authority.  The execution, delivery and performance by Transferor of its obligations under this Agreement and the Ancillary Agreements to which it is a party have been duly authorized by all necessary actions on the part of Transferor and this Agreement and each such Ancillary Agreement has been, or on the Closing Date will be, duly executed and delivered by Transferor and constitutes or, on the Closing Date will constitute (assuming due authorization, execution and delivery by Transferee), the legal, valid and binding obligation of Transferor enforceable against Transferor in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of rights of creditors generally, and general principles of equity.
(c)    Facility Assets.  If and to the extent good and marketable title to the Facility Assets was conveyed to the Owner Trustee pursuant to the PGE Bill of Sale and the PGE Assets Sales Agreement, then Transferor is the sole owner of such Facility Assets and, at the Closing, will transfer such Facility Assets to Transferee free and clear of all Transferor Liens, other than Permitted Liens and, with respect to interests in real property comprising the Facility Assets, Permitted Encumbrances.
(d)    Governmental Approvals.  Except for the Transferor FERC Approval and BPA Consent, no authorization, approval, order, consent, waiver, exception, variance, permit, license or exemption issued by a Governmental Authority is required for the execution, delivery and performance by Transferor of this Agreement and the Ancillary Agreements to which it is a party or the consummation by Transferor of the transactions contemplated hereby or thereby.

(e)    Brokers.  No Person acting on behalf of Transferor or any of its Affiliates is or will be entitled to any brokerage fee, commission, finder’s fee or financial advisory fee in connection with the transactions contemplated by this Agreement or the Ancillary Agreements.
4.2    Representations and Warranties of Transferee.  Transferee represents and warrants to Transferor that all of the statements contained in this Section 4.2 are true and correct as of the Effective Date and will be true and correct as of the Closing Date, except, in each case, to the extent such representations and warranties are specifically made as of a different date (in which case such representations and warranties will be true and correct as of such date):
(a)    Due Organization.  Transferee is a corporation duly organized and validly existing under the laws of the State of Oregon, and has the power and authority to own, operate and lease its properties and assets and to carry on its business as it is currently conducted, and to perform its obligations under this Agreement and the Ancillary Agreements to which it is a party.
(b)    Authority.  The execution, delivery and performance by Transferee of its obligations under this Agreement and the Ancillary Agreements to which it is a party have been duly authorized by all necessary actions on the part of Transferee and this Agreement and each such Ancillary Agreement has been, or on the Closing Date will be, duly executed and delivered by Transferee and constitutes or, on the Closing Date will constitute (assuming due authorization, execution and delivery by Transferor), the legal, valid and binding obligation of Transferee enforceable against Transferee in accordance with its terms, except as such enforceability may be 

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limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of rights of creditors generally, and general principles of equity.
(c)    Governmental Approvals.  Except for the Transferee FERC Approval, no authorization, approval, order, consent, waiver, exception, variance, permit, license or exemption issued by a Governmental Authority is required for the execution, delivery and performance by Transferee of this Agreement and the Ancillary Agreements to which it is a party or the consummation by Transferee of the transactions contemplated hereby or thereby.

(d)    Brokers.  No Person acting on behalf of Transferee or any of its Affiliates is or will be entitled to any brokerage fee, commission, finder’s fee or financial advisory fee in connection with the transactions contemplated by this Agreement or the Ancillary Agreements.
    
ARTICLE V
INDEMNIFICATION
5.1    Indemnification by Transferor.  Subject to the limitations set forth in Section 5.3 and Article VI, if the Closing occurs, Transferor agrees to indemnify and hold Transferee and its Related Persons (each, a “Transferee Indemnified Party”), harmless from and against any and all Losses incurred by any Transferee Indemnified Party resulting from any of the following: 
(a)    any breach of a representation or warranty made by Transferor in this Agreement; or
(b)    the breach by Transferor of any of its obligations in this Agreement or any of the Ancillary Agreements to which it is a party.
5.2    Indemnification by Transferee.  Subject to the limitations set forth in Article VI, if the Closing occurs, Transferee agrees to indemnify and hold Transferor and its Related Persons (each, a “Transferor Indemnified Party”), harmless from and against any and all Losses incurred by any Transferor Indemnified Party resulting from any of the following:
(a)    any breach of a representation or warranty made by Transferee in this Agreement;
(b)    the breach by Transferee of any of its obligations in this Agreement or any of the Ancillary Agreements to which it is a party; or 
(c)    the Assumed Liabilities, if any.
5.3    Effect of Knowledge as to Section 4.1(c).  Transferor shall not be liable under this Article V for any Losses based upon or arising out of any inaccuracy in or breach of any of the representations or warranties of Transferor contained in Section 4.1(c) of this Agreement if Transferee had Knowledge of such inaccuracy or breach prior to the Closing.

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ARTICLE VI    
SURVIVAL; NO OTHER REPRESENTATIONS; LIMITATION OF LIABILITY
6.1    Survival of Representations, Warranties and Obligations.  The representations, warranties and obligations of Transferor and Transferee contained in this Agreement shall survive indefinitely following the Closing.
6.2    No Other Representations.
(a)    NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, IT IS THE EXPLICIT INTENT OF EACH PARTY, AND THE PARTIES HEREBY AGREE, THAT NEITHER OF THE PARTIES NOR ANY OF THEIR AFFILIATES OR REPRESENTATIVES HAS MADE OR IS MAKING ANY REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WRITTEN OR ORAL, INCLUDING ANY IMPLIED REPRESENTATION OR WARRANTY INCLUDING AS TO THE CONDITION, MERCHANTABILITY, USAGE, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO THE FACILITY ASSETS, OR ANY PART THEREOF, EXCEPT THOSE EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE IV.
(b)    EXCEPT FOR THOSE EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE IV, THE FACILITY ASSETS ARE BEING TRANSFERRED “AS IS, WHERE IS, WITH ALL FAULTS.”
(c)    Notwithstanding anything to the contrary in this Agreement, no Related Person of Transferor will have any personal Liability to Transferee or any other Person as a result of this Agreement or the breach of any representation, warranty, or obligation of Transferor contained in this Agreement and no Related Person of Transferee will have any personal Liability to Transferor or any other Person as a result of this Agreement or the breach of any representation, warranty, or obligation of Transferee contained in this Agreement.
6.3    Exclusive Remedies.  THE EXPRESS REMEDIES SET FORTH IN THIS AGREEMENT AND THE ANCILLARY AGREEMENTS ARE THE SOLE AND EXCLUSIVE REMEDIES FOR A PARTY UNDER OR RELATING TO THIS AGREEMENT, WHETHER BASED ON STATUTE, IN TORT, COMMON LAW, STRICT LIABILITY, CONTRACT OR OTHERWISE, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE HEREBY WAIVED BY EACH PARTY.  NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 6.3 SHALL LIMIT A PARTY’S RIGHT TO SEEK AND OBTAIN ANY EQUITABLE RELIEF TO WHICH THE PARTY SHALL BE ENTITLED, OR TO SEEK ANY REMEDY ON ACCOUNT OF THE OTHER PARTY’S FRAUDULENT MISCONDUCT.
6.4    Limitation of Liability.
(a)    No Consequential Damages.  NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN THIS AGREEMENT, NO PARTY SHALL, UNDER ANY CIRCUMSTANCES, BE LIABLE FOR SPECIAL, INDIRECT, CONSEQUENTIAL, 

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INCIDENTAL, PUNITIVE OR EXEMPLARY DAMAGES, LOST PROFITS OR LOSS OF REVENUE, WHETHER BY STATUTE, IN TORT, COMMON LAW, STRICT LIABILITY OR CONTRACT OR OTHERWISE.  THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES SHALL BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE, GROSS NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF ANY PARTY, AND WHETHER LIABILITY IS BASED ON CONTRACT, TORT, STATUTE, COMMON LAW, STRICT LIABILITY OR OTHERWISE.  THIS PROVISION SHALL SURVIVE ANY TERMINATION, CANCELLATION OR SUSPENSION OF THIS AGREEMENT.
(b)    Liability Limitations.  Notwithstanding anything to the contrary in this Agreement, in no event shall either Party have liability to the other Party for Losses pursuant to this Agreement, including Section 5.1, in excess of Five Hundred Thousand Dollars ($500,000.00).  Notwithstanding the foregoing, nothing in this Section 6.4(b) shall limit a Party’s right to seek and obtain any equitable relief to which the Party shall be entitled, or to seek any remedy on account of the other Party’s fraudulent misconduct.
    
ARTICLE VII
MISCELLANEOUS PROVISIONS
7.1    Notices.
(a)    Any notice, demand, request or other communication required or permitted to be given pursuant to this Agreement shall be in writing and signed by the Party giving such notice, demand, request or other communication and shall be hand delivered or sent by a nationally or internationally recognized overnight courier or sent by certified mail, return receipt requested, to the other Party at the address set forth below:
If to Transferor:        BA Leasing BSC, LLC
555 California Street, 4th Floor 
San Francisco, CA 94104
Attn:  Jung N. Westover
Telephone:   (415) 765-7391

If to Transferee:        Portland General Electric Company
3WTC0306
121 SW Salmon Street
Portland, Oregon 97204
Attn:  Jim Barnes
Telephone:   (503) 464-8931

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With copy to:            Portland General Electric Company
1WTC1301
121 SW Salmon Street
Portland, Oregon 97204
Attn:  Office of General Counsel
Telephone:   (503) 464-7822
(b)    Each Party may change the place to which any notice, demand, request or other communication shall be sent or delivered by similar notice sent in like manner to the other Party.  The effective date of any notice, demand, request or other communication issued pursuant to this Agreement shall be when:  (i) delivered to the address of the Party personally, by messenger, by a nationally or internationally recognized overnight delivery service; or (ii) received or rejected by the Party, if sent by certified mail, return receipt requested, in each case, addressed to the Party at its address and marked to the attention of the person designated above (or to such other address or person as a Party may designate by notice to the other Party effective as of the date of receipt by such Party).
7.2    Entire Agreement.  This Agreement and the Ancillary Agreements, including, in each case, all Schedules and Exhibits hereto and thereto, supersede all prior discussions and agreements between the Parties with respect to the subject matter hereof and thereof, and contain the sole and entire agreement between the Parties with respect to the subject matter hereof and thereof; provided, however, that nothing in this Agreement shall affect in any respect the rights, obligations, covenants, indemnifications and liabilities of the Parties under the Operative Documents which  survive the termination of the relevant Operative Documents..
7.3    Expenses.  Except as expressly provided in Section 2.7 hereof, whether or not the transactions contemplated hereby are completed, each Party will pay its own costs and expenses incurred in connection with the negotiation and execution of and performance under this Agreement and the Ancillary Agreements and the transactions contemplated hereby and thereby. 
7.4    Amendment.  This Agreement may be amended, supplemented or modified only by a written instrument duly executed by both Parties. 
7.5    No Third Party Beneficiary.  The terms and provisions of this Agreement are intended solely for the benefit of each Party and their respective successors or permitted assigns, and it is not the intention of the Parties to confer third-party beneficiary rights upon any other Person.
7.6    Invalid Provisions.  If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future Applicable Law, and if the rights or obligations of any Party under this Agreement will not be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom, and (d) Transferee and Transferor shall negotiate an equitable adjustment in the provisions of this Agreement with a view toward effecting 

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the purposes of this Agreement, and the validity and enforceability of the remaining provisions, or portions or applications thereof, shall not be affected thereby.
7.7    Governing Law; Service of Process.
(a)    THIS AGREEMENT SHALL BE GOVERNED BY, ENFORCED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
(b)    Service of Process.  EACH PARTY AGREES THAT, IN ADDITION TO OTHER METHODS OF SERVICE PROVIDED BY LAW, SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING ARISING UNDER THIS AGREEMENT OR ANY ANCILLARY AGREEMENT SHALL BE EFFECTIVE IF PROVIDED IN ACCORDANCE WITH SECTION 7.1, AND THE EFFECTIVE DATE OF SUCH SERVICE OF PROCESS SHALL BE AS SET FORTH IN SECTION 7.1.
7.8    No Assignment; Binding Effect.  This Agreement, and any right, interest or obligation hereunder, may not be assigned or delegated by either Party without the prior written consent of the other Party, and any attempt to do so will be void; provided, however, that nothing in this Section 7.8 shall prohibit Transferee from assigning any of its rights, title and interest in, to and under the Facility Assets.  This Agreement is binding upon, inures to the benefit of and is enforceable by the Parties and their respective successors and permitted assigns. 
7.9    Counterparts.  This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
7.10    Time of Essence.  Time is of the essence with respect to all obligations of the Parties hereunder. 
[Signature page follows.]

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IN WITNESS WHEREOF, each of the Parties has caused this Transfer Agreement to be executed by its duly authorized representative as of the date first above written.

	
		
	BA LEASING BSC, LLC

	 
	 

	 
	 

	 
	 

	By:
	/s/ Stephanie Holland

	Name:
	Stephanie Holland

	Title:
	SVP, Remarketing Manager 

	 
	 

	 
	 

	 
	 

	 
	 

	PORTLAND GENERAL ELECTRIC

	COMPANY

	 
	 

	 
	 

	 
	 

	By:
	/s/ Maria M. Pope

	Name:
	Maria M. Pope

	Title:
	SRVP, Power Supply and Operations and Resource Strategy

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ANNEX I

PART A
RULES OF INTERPRETATION

Unless otherwise expressly provided in this Agreement, for purposes of this Agreement, the following rules of interpretation shall apply:
(a)    Calculation of Time Period.  When calculating the period of time before which, within which, or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period will be excluded.  If the last day of such period is a non-Business Day, the period in question will end on the next succeeding Business Day.
(b)    Dollars.  Any reference in this Agreement to “dollars” or “$” means U.S. dollars.
(c)    Exhibits and Schedules.  Unless otherwise expressly indicated, any reference in this Agreement to an “Annex”, “Exhibit” or a “Schedule” refers to an Annex, Exhibit or Schedule to this Agreement.  The Annexes and Exhibits to this Agreement are hereby incorporated and made a part hereof as if set forth in full herein and are an integral part of this Agreement.  Any capitalized terms used in any Annex or Exhibit but not otherwise defined therein are defined as set forth in this Agreement.
(d)    Gender and Number.  Any reference in this Agreement to gender includes all genders, and the meaning of defined terms applies to both the singular and the plural of those terms.
(e)    Headings.  The division of this Agreement into Articles, Sections, and other subdivisions, and the insertion of headings, are for convenience of reference only and do not affect, and will not be utilized in construing or interpreting, this Agreement.  All references in this Agreement to any “Section” are to the corresponding Section of this Agreement unless otherwise specified.
(f)    “Herein.”  The words such as “herein,” “hereinafter,” “hereof,” and “hereunder” refer to this Agreement (including the Annexes and Exhibits to this Agreement) as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.
(g)    “Including.”  The word “including” or any variation thereof means “including, without limitation” and does not limit any general statement that it follows to the specific or similar items or matters immediately following it.

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(h)    Agreements and Documents.  Each reference in this Agreement to any agreement or document or a portion or provision thereof shall be construed as a reference to the relevant agreement or document as amended, supplemented or otherwise modified from time to time.
(i)    Applicable Law.  Each reference in this Agreement to Applicable Law and to terms defined in, and other provisions of, Applicable Law shall be references to the same (or a successor to the same) as amended, supplemented or otherwise modified from time to time.
(j)    Days.  Each reference in this Agreement to “day” means a calendar day.

PART B
CERTAIN DEFINITIONS
“Action” means any demand, action, claim, suit, countersuit, arbitration, inquiry, subpoena, discovery request, proceeding or investigation by or before any court or grand jury, any Governmental Authority or any arbitration or mediation tribunal.
“Affiliate” means, with respect to a Person, any other Person which directly or indirectly controls, is controlled by or is under common control with such Person.  As used in this definition, “control” (including, its correlative meaning “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of more than fifty percent (50%) of outstanding voting securities or partnership or other ownership interests, by contract or otherwise).
“Agreement” has the meaning set forth in the preamble to the Agreement.
“Ancillary Agreements” means those documents, instruments, certificates or agreements as may be executed and delivered in connection with this Agreement and the transactions contemplated hereby.
“Applicable Law” means all applicable laws, including federal, state, local, county, municipal, foreign or international laws, treaties, rules, regulations, ordinances, codes, statutes, orders, judgments, writs, decrees, injunctions, interpretations, licenses, permits, decisions, or directives of any court, arbitrator or Governmental Authority, in each case, having jurisdiction over Transferor, Transferee, the Sites or the Facility Assets.
“Assignment and Assumption Agreement” has the meaning set forth in Section 2.2.
“Assumed Liabilities” has the meaning set forth in Section 2.1(b).
“Bill of Sale” has the meaning set forth in Section 2.2.

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“BPA Consent” means the written consent of BPA to the transfer and assignment by Transferor to Transferee of the Transmission Assets and the Lessor’s Percentage of PGE’s rights in the Transmission Related Agreements, attached hereto as Exhibit C.
“Business Day” means any day other than Saturday, Sunday, and any day which is a legal holiday or a day on which banking institutions in Portland, Oregon are authorized or obligated by Applicable Law to close.
“Claims” means any administrative, regulatory, or judicial actions or causes of action, suits, petitions, proceedings (including arbitration proceedings), investigations, hearings, demands, demand letters, claims, complaints, allegations of liability or potential liability or notices of noncompliance or violation delivered by any Governmental Authority or other Person.
“Closing” has the meaning set forth in Section 2.3.
“Closing Date” has the meaning set forth in Section 2.3.
“Effective Date” has the meaning set forth in the preamble to the Agreement.
“Effective Time” has the meaning set forth in Section 2.3.
“Facility Assets” has the meaning given to such term in the Participation Agreement.  For the avoidance of doubt, the Parties acknowledge and agree that the Facility Assets include the rights under the Operating Agreement and the Transmission Related Agreements which were assigned to Owner Trustee pursuant to Section 5 of the PGE Assets Sales Agreement.
“FERC” means the Federal Energy Regulatory Commission.
“FERC Approvals” means the Transferee FERC Approval and the Transferor FERC Approval.
“Governmental Authority” means any federal, state, local or municipal governmental body; any governmental, quasi-governmental, regulatory or administrative agency, commission, body or other authority exercising or entitled to exercise any administrative, executive, judicial, legislative, policy, regulatory or taxing authority or power.
“Indenture Trustee” means HSBC Bank USA, National Association (as successor-in-interest to The Bank of New York Mellon Trust Company, NA, as successor-in-interest to The Chase Manhattan Bank (National Association)).
“Knowledge” means, in respect of Transferee, the actual knowledge of Jim Barnes as of the Closing Date.
“Lessee” means Fale-Safe Incorporated.

“Lessor’s Percentage” has the meaning given to such term in the Participation Agreement.

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“Liability” means any debt, liability, obligation or commitment of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise.
“Lien” means any mortgage, pledges, security interest, encumbrance, lien or charge of any kind, including, without limitation, any conditional sale or other title retention agreement, any lease in the nature thereof or the filing of, or agreement to give, any financing statement under the Uniform Commercial Code of any jurisdiction.
“Losses” mean any and all damages, losses, deficiencies, Liabilities, taxes, obligations, penalties, judgments, settlements, claims, payments, fines, interest, costs and expenses, whether or not resulting from third party claims, including the costs and expenses of any and all Actions and demands, assessments, judgments, settlements and compromises relating thereto and the costs and expenses of attorneys’, accountants’, consultants’ and other professionals’ fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder.
“Net Revenues Election” has the meaning set forth in the recitals to the Agreement.
“Notice of Election” has the meaning set forth in the recitals to the Agreement.
“Operating Agreement” has the meaning given to such term in the Participation Agreement.
“Operative Documents” has the meaning given to such term in the Participation Agreement.
“Outside Date” means March 31, 2014, as such date may be extended by mutual written consent of the Parties. 
“Owner Participant” has the meaning given to such term in the Participation Agreement.
“Owner Trustee” means The Bank of New York Mellon Trust Company, NA (as successor-in-interest to J. Henry Schroder Bank & Trust Company and George Sievers (Co-Trustee)).
“Participation Agreement” means that certain Participation Agreement dated as of December 30, 1985, by and among PGE, Lessee, Owner Participant, Owner Trustee, Indenture Trustee, and the Loan Participants listed in Appendix B thereto.
“Party” has the meaning set forth in the preamble to the Agreement.
“Permitted Encumbrances” means (a) Liens set forth in the PGE Bill of Sale, and (b) such other Liens which do not materially detract from the value of, or materially interfere with the present use of the Facility Assets.
“Permitted Liens” means (a) Liens granted under, or created by, existing or pursuant to, the terms and conditions of the Operating Agreement or the Transmission Related Agreements; (b) statutory Liens for current taxes or assessments not yet due or payable; (c) mechanics’, carriers’, 

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workers’, repairers’, landlords’, and other similar Liens arising or incurred in the ordinary course of business which are not yet due and payable, or pledges, deposits, or other Liens securing the performance of statutory obligations; (d) Liens set forth in any state, local, or municipal franchise or governing ordinance under which any portion of the Facility Assets is being used or conducted; or (e) Liens, including zoning, entitlement, conservation restriction and other land use and environmental regulations, by Governmental Authorities.
“Person” means any individual, partnership, limited liability company, joint venture, corporation, trust, unincorporated organization, or Governmental Authority.
“PGE” means Portland General Electric Company, an Oregon corporation.
“PGE Assets Sales Agreement” means that certain Assets Sales Agreement, dated as of December 30, 1985, between PGE and Owner Trustee.
“PGE Bill of Sale” means that certain Bargain and Sale Deed, Bill of Sale and Grant of Easements and Licenses, dated as of December 30, 1985, between PGE and Owner Trustee.
“Related Person” means, with respect to each Party, its respective Affiliates, and the employees, officers and directors of such Party and its respective Affiliates.

“Sites” has the meaning set forth in the Participation Agreement.
“Termination Time” has the meaning set forth in the recitals to the Agreement.
“Transfer Price” has the meaning set forth in Section 2.1(c).
“Transferee” has the meaning set forth in the preamble to the Agreement.
“Transferee FERC Approval” means an order issued by FERC under Section 203 of the Federal Power Act approving the acquisition by Transferee from Transferor of the Facility Assets.
“Transferee Indemnified Person” has the meaning set forth in Section 5.1.
“Transferor” has the meaning set forth in the preamble to the Agreement.
“Transferor FERC Approval” means an order issued by FERC under Section 203 of the Federal Power Act approving the transfer by Transferor to Transferee of the Facility Assets.
“Transferor Indemnified Person” has the meaning set forth in Section 5.2.
“Transferor Liens” has the meaning set forth in Section 2.1(a). 
“Transfer Tax” has the meaning set forth in Section 2.7.
“Transmission Assets” has the meaning set forth in the Participation Agreement.

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“Transmission Related Agreements” has the meaning set forth in the Participation Agreement.
“Trust Agreement” means the Trust Agreement, dated as of December 30, 1985, between Owner Participant and Owner Trustee.
“Trust Estate” has the meaning given to such term in the Trust Agreement.
“Trust Unwind Transaction” has the meaning set forth in the recitals to the Agreement.

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 EXHIBIT A
FORM OF BILL OF SALE

This BILL OF SALE (this “Bill of Sale”) is made and entered into effective as of December  18, 2013, by and between BA LEASING BSC, LLC, a Delaware limited liability company (“Transferor”), and PORTLAND GENERAL ELECTRIC COMPANY, an Oregon corporation (“Transferee”).  Transferor and Transferee are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”  Unless otherwise specifically defined in this Bill of Sale, capitalized terms used but not defined in this Bill of Sale shall have the meanings given to such terms in the Transfer Agreement (as such term is defined below).

RECITALS

WHEREAS, Transferor and Transferee have entered into a Transfer Agreement dated as of December 18, 2013 (the “Transfer Agreement”), pursuant to which, among other things, Transferor has agreed to assign, transfer and convey to Transferee, and Transferee has agreed to accept the assignment, transfer and conveyance of, all of Transferor’s right, title and interest in, to and under the Facility Assets, on the terms and subject to the conditions set forth in the Transfer Agreement; and

WHEREAS, the execution and delivery of this Bill of Sale by Transferor and Transferee is a condition to the obligations of the Parties to consummate the transactions contemplated by the Transfer Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements set forth in this Bill of Sale and in the Transfer Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1.    Transfer of Facility Assets.  Transferor hereby assigns, transfers and conveys to Transferee, and Transferee hereby accepts the assignment, transfer and conveyance of, as of the Effective Time, all of Transferor’s right, title and interest in, to and under the Facility Assets, free and clear of all Transferor Liens, other than Permitted Liens and, with respect to interests in real property comprising the Facility Assets, Permitted Encumbrances.

2.    Further Assurances.  At any time from and after the date of this Bill of Sale, at either Party’s request and without further consideration, the other Party shall execute and deliver to such Party such other instruments of transfer, conveyance, assignment and confirmation, without representation, warranty or recourse except as specifically provided in the Transfer Agreement, provide such materials and information, and take such other actions as may be required to carry out the provisions of this Bill of Sale and consummate and make effective the transactions contemplated by this Bill of Sale.

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3.    Miscellaneous.

(a)    Interpretation.  Nothing in this Bill of Sale, whether express or implied, is intended to or shall be construed to modify, expand or limit in any way the terms of the Transfer Agreement.  To the extent that any provision of this Bill of Sale conflicts or is inconsistent with the terms of the Transfer Agreement, the Transfer Agreement will govern.

(b)    Amendment. This Bill of Sale may be amended, supplemented or modified only by a written instrument duly executed by or on behalf of both Parties.

(c)    No Third Party Beneficiary.  The terms and provisions of this Bill of Sale are intended solely for the benefit of each Party and their respective successors or permitted assigns, and it is not the intention of the Parties to confer third-party beneficiary rights upon any other Person.

(d)    Headings.  The headings used in this Bill of Sale have been inserted for convenience of reference only and do not define or limit the provisions hereof.

(e)    Governing Law.  THIS BILL OF SALE SHALL BE GOVERNED BY, ENFORCED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
(f)    Service of Process.  EACH PARTY AGREES THAT, IN ADDITION TO OTHER METHODS OF SERVICE PROVIDED BY LAW, SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING ARISING UNDER THIS BILL OF SALE SHALL BE EFFECTIVE IF PROVIDED IN ACCORDANCE WITH SECTION 7.1 OF THE TRANSFER AGREEMENT, AND THE EFFECTIVE DATE OF SUCH SERVICE OF PROCESS SHALL BE AS SET FORTH IN SECTION 7.1 OF THE TRANSFER AGREEMENT.

(g)    No Assignment; Binding Effect.  This Bill of Sale, and any right, interest or obligation hereunder, may not be assigned or delegated by any Party without the prior written consent of the other Party, and any attempt to do so will be void; provided, however, that nothing in this Section 3(g) shall prohibit Transferee from assigning any of its rights, title and interest in, to and under the Facility Assets.  This Bill of Sale is binding upon, inures to the benefit of and is enforceable by the Parties and their respective successors and permitted assigns.

(h)    Counterparts.  This Bill of Sale may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

[Signature page follows.]

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    IN WITNESS WHEREOF, each of the Parties has caused this Bill of Sale to be executed by its duly authorized representative as of the date first above written.

	
		
	BA LEASING BSC, LLC

	 
	 

	 
	 

	 
	 

	By:
	/s/ Stephanie Holland

	Name:
	Stephanie Holland

	Title:
	SVP, Remarketing Manager 

	 
	 

	 
	 

	 
	 

	 
	 

	PORTLAND GENERAL ELECTRIC

	COMPANY

	 
	 

	 
	 

	 
	 

	By:
	/s/ Maria M. Pope

	Name:
	Maria M. Pope

	Title:
	SRVP, Power Supply and Operations and Resource Strategy

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EXHIBIT B
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

This ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) is made and entered into effective as of December 18, 2013, by and between BA LEASING BSC, LLC, a Delaware limited liability company (“Transferor”), and PORTLAND GENERAL ELECTRIC COMPANY, an Oregon corporation (“Transferee”).  Transferor and Transferee are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”  Unless otherwise specifically defined in this Agreement, capitalized terms used but not defined in this Agreement shall have the meanings given to such terms in the Transfer Agreement (as such term is defined below).

RECITALS

WHEREAS, Transferor and Transferee have entered into a Transfer Agreement dated as of December 18, 2013 (the “Transfer Agreement”), pursuant to which, among other things, Transferor has agreed to transfer to Transferee, and Transferee has agreed to accept, all of the Facility Assets, and  Transferor has agreed to delegate to Transferee, and Transferee has agreed to accept and assume and to observe and perform and to pay and discharge, all of the Assumed Liabilities, if any, on the terms and subject to the conditions set forth in the Transfer Agreement; and

WHEREAS, the execution and delivery of this Agreement by Transferor and Transferee is a condition to the obligations of the Parties to consummate the transactions contemplated by the Transfer Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements set forth in this Agreement and in the Transfer Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1.    Assignment and Assumption.
(a)    Transferor hereby assigns to Transferee, and Transferee hereby accepts, as of the Effective Time, all of Transferor’s right, title and interest in the Facility Assets, including, without limitation, all of Transferor’s right, title and interest in, to and under the Operating Agreement and the Transmission Related Agreements which were assigned to Owner Trustee pursuant to Section 5 of the PGE Assets Sales Agreement.
(b)    Transferor hereby assigns to Transferee, and Transferee hereby accepts, as of the Effective Time, all of Transferor’s right, title and interest in, to and under the subeasements, licenses and other rights and interests granted to Owner Trustee by PGE pursuant to the PGE Bill of Sale or the PGE Assets Sales Agreement.

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(c)    Transferor hereby assigns and delegates to Transferee, and Transferee hereby accepts and assumes and agrees to observe and perform and to pay and discharge, as of the Effective Time, all of the Assumed Liabilities, if any.
    
2.    Further Assurances.  At any time from and after the date of this Agreement, at either Party’s request and without further consideration, the other Party shall execute and deliver to such Party such other instruments of sale, transfer, conveyance, assignment and confirmation, without representation, warranty or recourse except as specifically provided in the Transfer Agreement, provide such materials and information, and take such other actions as may be required to carry out the provisions of this Agreement and consummate and make effective the transactions contemplated by this Agreement.

3.    Miscellaneous.

(a)    Interpretation.  Nothing in this Agreement, whether express or implied, is intended to or shall be construed to modify, expand or limit in any way the terms of the Transfer Agreement.  To the extent that any provision of this Agreement conflicts or is inconsistent with the terms of the Transfer Agreement, the Transfer Agreement will govern.

(b)    Amendment. This Agreement may be amended, supplemented or modified only by a written instrument duly executed by or on behalf of both Parties.

(c)    No Third Party Beneficiary.  The terms and provisions of this Agreement are intended solely for the benefit of each Party and their respective successors or permitted assigns, and it is not the intention of the Parties to confer third-party beneficiary rights upon any other Person.

(d)    Headings.  The headings used in this Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof.

(e)    Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, ENFORCED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

(f)    Service of Process.  EACH PARTY AGREES THAT, IN ADDITION TO OTHER METHODS OF SERVICE PROVIDED BY LAW, SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING ARISING UNDER THIS AGREEMENT SHALL BE EFFECTIVE IF PROVIDED IN ACCORDANCE WITH SECTION 7.1 OF THE TRANSFER AGREEMENT, AND THE EFFECTIVE DATE OF SUCH SERVICE OF PROCESS SHALL BE AS SET FORTH IN SECTION 7.1 OF THE TRANSFER AGREEMENT.

(g)    No Assignment; Binding Effect.  This Agreement, and any right, interest or obligation hereunder, may not be assigned or delegated by any Party without the prior written

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 consent of the other Party, and any attempt to do so will be void; provided, however, that nothing in this Section 3(g) shall prohibit Transferee from assigning any of its rights, title and interest in, to and under the Facility Assets.  This Agreement is binding upon, inures to the benefit of and is enforceable by the Parties and their respective successors and permitted assigns.

(h)    Counterparts.  This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

[Signature page follows.]

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    IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed by its duly authorized representative as of the date first above written.

	
		
	BA LEASING BSC, LLC

	 
	 

	 
	 

	 
	 

	By:
	/s/ Stephanie Holland

	Name:
	Stephanie Holland

	Title:
	SVP, Remarketing Manager 

	 
	 

	 
	 

	 
	 

	 
	 

	PORTLAND GENERAL ELECTRIC

	COMPANY

	 
	 

	 
	 

	 
	 

	By:
	/s/ Maria M. Pope

	Name:
	Maria M. Pope

	Title:
	SRVP, Power Supply and Operations and Resource Strategy

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EXHIBIT C
BPA CONSENT
[see attached]

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Active 21541400v310.1 HBB LT Incentive Compensation Plan

Exhibit 10.1

HAMILTON BEACH BRANDS, INC.
LONG-TERM INCENTIVE COMPENSATION PLAN
(Amended and Restated Effective as of January 1, 2014)

		
	1.
	Effective Date

The effective date of this amended and restated Hamilton Beach Brands, Inc. Long-Term Incentive Compensation Plan (the “Plan”) is January 1, 2014.
		
	2.
	Purpose of the Plan

The purpose of this Plan  is to further the long-term profits and growth of Hamilton Beach Brands, Inc. (the “Company”) by enabling the Employers to attract and retain key management employees by offering long-term incentive compensation to those key management employees who will be in a position to make significant contributions to such profits and growth.  This incentive is in addition to all other compensation.

		
	3.
	Application of Code Section 409A

It is intended that the compensation arrangements under the Plan be in full compliance with the requirements of Code Section 409A.  The Plan shall be interpreted and administered in a manner to give effect to such intent.  Notwithstanding the foregoing, the Employers do not guarantee any particular tax result to Participants or Beneficiaries with respect to any amounts deferred or any payments provided hereunder, including tax treatment under Code Section 409A.
		
	4.
	Definitions

(a)“Account” shall mean the record maintained by the Employer in accordance with Section 7 to reflect the Participants’ Awards under the Plan (plus interest thereon).  The Account shall be further sub-divided into various Sub-Accounts as described in Section 8.
(b)“Award” shall mean the cash awards granted to a Participant under this Plan for the Award Terms.   
(c)“Award Term” shall mean the period of one or more years on which an Award is based, as established by the Committee and specified in the Guidelines.  Any Award Term(s) applicable to a Qualified Performance-Based Award shall be established by the Committee not later than 90 days after the commencement of the Award Term on which such Qualified Performance-Based Award will be based and prior to the completion of 25% of such Award Term.
(d)“Beneficiary” shall mean the person(s) designated in writing (on a form acceptable to the Committee) to receive the payment of all amounts hereunder in the event of the death of a Participant.  In the absence of such a designation and at any time when there is no existing Beneficiary hereunder, a Participant’s Beneficiary shall be his surviving legal spouse or, if none, his estate.
(e)“Change in Control” shall mean the occurrence of an event described in Appendix 1 hereto.
(f)“Code” shall mean the Internal Revenue Code of 1986, as amended.
(g)“Committee” shall mean the Compensation Committee of the Board of Directors of the Company, any other committee appointed by such Board of Directors, or any sub-committee appointed by the Compensation Committee to administer this Plan in accordance with Section 5; provided that such committee or sub-committee 

consists of not less than two directors of the Company and so long as each such member of the committee or sub-committee is an “outside director” for purposes of Code Section 162(m).
(h)“Covered Employee” shall mean any Participant who is a “covered employee” for purposes of Code Section 162(m) or any Participant who the Committee determines in its sole discretion is likely to become such a covered employee.
(i)“Disability” or “Disabled.”  A Participant shall be deemed to have a “Disability” or be “Disabled” if the Participant is determined to be totally disabled by the Social Security Administration or if the Participant  (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an Employer-sponsored accident and health plan.
(j)“Final Payout Percentage.”  For each Plan Year, the Final Payout Percentage shall mean the percentage of the Target Payout that is paid out under this Plan, as determined by the Committee, in its sole discretion.
(k)“Grant Date” shall mean the effective date of an Award, which is the January 1st following the end of the Award Term.
(l)“Guidelines” shall mean the guidelines that are approved by the Committee for each Award Term for the administration of the Awards granted under the Plan.  To the extent that there is any inconsistency between the Guidelines and the Plan on matters other than the time and form of payment of the Awards, the Guidelines shall control.  If there is any inconsistency between the Guidelines and the Plan regarding the time and form of payment of the Awards, the Plan shall control. 
(m)“Hay Salary Grade” shall mean the salary grade or Salary Points assigned to a Participant by the Employers pursuant to the Hay Salary System, or any successor salary system subsequently adopted by the Employers; provided, however, that for purposes of determining Target Awards for U.S. Participants, the midpoint of the national salary ranges (unadjusted for geographic location) shall be used.
(n)“Key Employee.”  A Participant shall be classified as a Key Employee if he meets the following requirements:
		
	•
	The Participant, with respect to the Participant’s relationship with the Employers and their affiliates, met the requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code (without regard to Section 416(i)(5) thereof) and the Treasury Regulations issued thereunder at any time during the 12-month period ending on the most recent Identification Date (defined below) and his Termination of Employment occurs during the 12-month period beginning on the most recent Effective Date (defined below).  When applying the provisions of Code Sections 416(i)(1)(A)(i), (ii) or (iii) for this purpose:  (i) the definition of “compensation” (A) shall be as defined in Treasury Regulation Section 1.415(c)-2(d)(4) (i.e., the wages and other compensation for which the Employer is required to furnish the Employee with a Form W-2 under Code Sections 6041, 6051 and 6052, plus amounts deferred at the election of the Employee under Code Sections 125, 132(f)(4) or 401(k)) and (B) shall apply the rule of Treasury Regulation Section 1.415(c)-2(g)(5)(ii) which excludes compensation of non-resident 

alien employees and (ii) the number of officers described in Code Section 416(i)(1)(A)(i) shall be 60 instead of 50.
		
	•
	The Identification Date for Key Employees is each December 31st and the Effective Date is the following April 1st.  As such, any Employee who is classified as a Key Employee as of December 31st of a particular Plan Year shall maintain such classification for the 12-month period commencing on the following April 1st. 

		
	•
	Notwithstanding the foregoing, a Participant shall not be classified as a Key Employee unless the stock of NACCO Industries, Inc. (or a related entity) is publicly traded on an established securities market or otherwise on the date of the Participant’s Termination of Employment. 

(o)“Maturity Date” shall mean the date established under Section 10(a)(i) of the Plan. 
(p)“Non-U.S. Participant” shall mean a Participant who is classified by the Committee as a non-resident alien with no U.S.-earned income.  Such classification shall be determined as of the Grant Date of a particular Award.  Once a Participant is classified by the Committee as a Non-U.S. Participant with respect to a particular Award, such classification shall continue in effect until the Sub-Account holding such Award is paid, regardless of any subsequent change in classification.
(q)“Participant” shall mean any person who meets the eligibility criteria set forth in Section 6 and who is granted an Award under the Plan or a person who maintains an Account balance hereunder.
(r)“Performance Objectives” shall mean the performance objectives established pursuant to the Plan for Participants.  Performance Objectives may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual Participant or any Subsidiary, division, business unit, department or function of the Company.  Performance Objectives may be measured on an absolute or relative basis.  Relative performance may be measured by a group of peer companies or by a financial market index.  Any Performance Objectives applicable to a Qualified Performance-Based Award shall be based on one or more, or a combination, of the following criteria, or the attainment of specified levels of growth or improvement in one or more of the following criteria: return on equity, return on total capital employed, diluted earnings per share, total earnings, earnings growth, return on capital, return on assets, return on sales, earnings before interest and taxes, revenue, revenue growth, gross margin, return on investment, increase in the fair market value of shares, share price (including, but not limited to, growth measures and total stockholder return), profit, net earnings, cash flow (including, but not limited to, operating cash flow and free cash flow), inventory turns, financial return ratios, market share, earnings measures/ratios, economic value added, balance sheet measurements (such as receivable turnover), internal rate of return, customer satisfaction surveys or productivity, net income, operating profit or increase in operating profit, market share, increase in market share, sales value increase over time, economic value income, economic value increase over time, new project development, adjusted standard margin or net sales.
(s)“Plan Year” shall mean the calendar year.
(t)“Qualified Performance-Based Award” shall mean any Award or portion of an Award granted to a Covered Employee that is intended to satisfy the requirements for “qualified performance-based compensation” under Code Section 162(m).
(u)“Retirement” or “Retire” shall mean the termination of a Participant’s employment with the Employers after the Participant has reached age 55 and completed at least 5 years of service.

(v)“Salary Points” means the salary points assigned to a Participant by the Committee for the applicable Award Term pursuant to the Hay salary point system, or any successor salary point system adopted by the Committee.
(w)“Subsidiary” shall mean any corporation, partnership or other entity, the majority of the outstanding voting securities of which is owned, directly or indirectly, by the Company.  The Company and the Subsidiaries shall be referred to herein collectively as the “Employers.”
(x)“Target Award” shall mean a dollar amount calculated by multiplying (i) the designated salary midpoint that corresponds to a Participant’s Hay Salary Grade by (ii) the long-term incentive compensation target percent for that Hay Salary Grade for the applicable Award Term, as determined by the Committee.  The Target Award is the Award that would be paid to a Participant under the Plan if each Performance Objective is  met at exactly target.
(y)“Target Payout.” For each Plan Year, the Target Payout shall mean the total amount that would be paid out under the Plan if each Performance Objective is met exactly at target level, as determined by the Committee, in its sole discretion.
(z)“Termination of Employment” shall mean, with respect to any Participant’s relationship with the Company and its affiliates, a separation from service as defined in Code Section 409A (and the regulations and guidance issued thereunder).
(aa)  “True-Up Interest Rate.” Beginning in 2014, the True-Up Interest Rate shall mean the interest rate determined under an annual “True-Up Interest Rate Table” and related interpolation chart that is adopted and approved by the Committee within the first 90 days of each Plan Year and is based on the Final Payout Percentage of the Plan for such Plan Year.
(bb)    U.S. Participant” shall mean, with respect to any Award, any Participant who is not a Non-U.S. Participant.

5.Administration
(a)This Plan shall be administered by the Committee.  A majority of the Committee shall constitute a quorum, and the action of members of the Committee present at any meeting at which a quorum is present, or acts unanimously approved in writing, shall be the act of the Committee.  All acts and decisions of the Committee with respect to any questions arising in connection with the administration and interpretation of this Plan, including the severability of any or all of the provisions hereof, shall be conclusive, final and binding upon the Company and all present and former Participants, all other employees of the Company, and their respective descendants, successors and assigns.   No member of the Committee shall be liable for any such act or decision made in good faith.
(b)The Committee shall have complete authority to interpret all provisions of this Plan, to prescribe the form of any instrument evidencing any Award granted under this Plan, to adopt, amend and rescind general and special rules and regulations for its administration (including, without limitation, the Guidelines), and to make all other determinations necessary or advisable for the administration of this Plan.  Notwithstanding the foregoing, no such action may be taken by the Committee that would cause any Qualified Performance-Based Awards to be 

treated as “applicable employee remuneration” of such Participant, as such term is defined in Code Section 162(m) (i.e., to no longer qualify for the exception for “qualified performance-based compensation” under Code Section 162(m)).

6.Eligibility
Any person who is classified by the Employers as a salaried employee of the Employers generally at a Hay Salary Grade of 17 or above (or a compensation level equivalent thereto), who in the judgment of the Committee occupies an officer or other key executive position in which his efforts may significantly contribute to the profits or growth of the Employers, may be eligible to participate in the Plan; provided, however, that (a) directors of the Company who are not classified as salaried employees of the Employers and (b) leased employees (as such term is defined in Code Section 414) shall not be eligible to participate in the Plan.  A person who satisfies the requirements of this Section 6 shall become a Participant in the Plan when granted an Award under Section 8(b)(ii).

		
	7.
	Accounts and Sub-Accounts

Each Employer shall establish and maintain on its books an Account for each Participant who is or was employed by the Employer which shall reflect the Awards described in Section 8 hereof.  Such Account shall also (a) reflect credits for the interest described in Section 10(b) and debits for any distributions therefrom and (b) be divided into the Sub-Accounts specified in Section 8(d).   
		
	8.
	Granting of Awards/Crediting to Sub-Accounts

The Committee may, from time to time and upon such conditions as it determine, authorize the granting of Awards to Participants for each Award Term, which shall be consistent with, and shall be subject to all of the requirements of, the following provisions:

(a)The Committee shall approve (i) a Target Award to be granted to each Participant and (ii) a formula for determining the amount of each Award for such Award Term, which formula is based upon the Company’s achievement of Performance Objectives, as set forth in the Guidelines; provided, however, that with respect to any Qualified Performance-Based Award, the Committee shall approve the foregoing not later than the ninetieth day of the applicable Award Term and prior to the completion of 25% of such Award Term.  At such time, the Committee shall designate whether the Award is a Qualified Performance-Based Award.

(b)Effective no later than April 30th of the Plan Year following the end of the Award Term, the Committee shall approve (i) a preliminary calculation of the amount of each Award based upon the application of the formula and actual Company performance to the Target Awards previously determined in accordance with Section 8(a) and (ii) a final calculation and approval of the amount of each Award to be granted to each Participant for the Award Term (with the specified Grant Date of such Award being January 1st of the Plan Year following the end of the Award Term).  Such approval shall be certified in writing by the Committee before any amount is paid for any Award granted with respect to an Award Term.  Notwithstanding the foregoing, (1) the Committee shall have 

the power to decrease the amount of any Award below the amount determined in accordance with the foregoing provisions and (2) the Committee shall have the power to increase the amount of any Award above the amount determined in accordance with the foregoing provisions and/or adjust the amount thereof in any other manner determined by the Committee, in its sole and absolute discretion.  Further notwithstanding the foregoing, (A) no such decrease may occur following a Change in Control; (B) no such increase, adjustment or other change may be made that would cause any Qualified Performance-Based Award to be includable as “applicable employee remuneration” of such Participant, as such term is defined in Code Section 162(m) (i.e., to no longer qualify for the exception for “qualified performance-based compensation” under Code Section 162(m)) and (C) no Award, including any Award equal to the Target Award, shall be payable under the Plan to any Participant except as determined and approved by the Committee.
(c)Calculations of Target Awards for U.S. Participants for an Award Term shall initially be based on a Participant’s Hay Salary Grade as of January 1st of the first year of the Award Term.  Calculations of Target Awards for Non-U.S. Participants for an Award Term shall be determined in accordance with the Guidelines in effect for such Award Term.  However, such Target Awards may be changed during or after the Award Term under the following circumstances:  (i) if a Participant receives a change in Hay Salary Grade, salary midpoint and/or long-term incentive compensation target percentage during an Award Term, such change will be reflected in a pro-rata Target Award, (ii) employees hired into or promoted to a position eligible to participate in the Plan (as specified in Section 6 above) during an Award Term will, if designated as a Plan Participant by the Committee, be assigned a pro-rated Target Award based on their length of service during an Award Term and (iii) the Committee may increase or decrease the amount of the Target Award at any time, in its sole and absolute discretion; provided, however, that  (1) no such decrease may occur following a Change in Control and (2) no such increase, adjustment or other change may be made that would cause any Qualified Performance-Based Award to be includable as “applicable employee remuneration” of such Participant, as such term is defined in Code Section 162(m) (i.e., to no longer qualify for the exception for “qualified performance-based compensation” under Code Section 162(m)).  In order to be eligible to receive an Award for an Award Term, the Participant must be employed by the Employers and must be a Participant on December 31st of the last year of the Award Term.  Notwithstanding the foregoing, if a Participant dies, becomes Disabled or Retires during the Award Term, the Participant shall be entitled to a pro-rata portion of the Award for such Award Term, calculated based on actual Company performance for the entire Award Term in accordance with Section 8(b)(ii) above and based on the number of days the Participant was actually employed by the Employers during the Award Term.
(d)After approval by the Committee, each Award shall be credited to the Participant’s Account in accordance with the following rules.  The cash value of each Award for each Award Term shall be credited to a separate Sub-Account for each Participant.  Such Sub-Accounts shall be classified based on the Grant Date of the particular Award.  For example, the cash value of the Awards with a Grant Date of 1/1/14 shall be credited to the 2014 Sub-Account, the cash value of the Awards with a Grant Date of 1/1/15 shall be credited to the 2015 Sub-Account, etc.

(e)Notwithstanding any other provision of the Plan, (i) the maximum cash value of the Awards granted to a Participant under this Plan for any Award Term shall not exceed $5,000,000 and (ii) the maximum cash value of the payment from the Sub-Account that holds the Awards for any Award Term (including interest) shall not exceed $7,000,000.
(f)Multiple Awards may be granted to a Participant; provided, however, that no two Awards to a Participant may have identical performance periods.
(g)All determinations under this Section shall be made by the Committee.  Each Qualified Performance-Based Award shall be granted and administered to comply with the requirements of Code Section 162(m).

9.Vesting
All Awards granted hereunder shall be immediately 100% vested as of the Grant Date.  Participants shall be 100% vested in all amounts credited to their Accounts hereunder.    
		
	10.
	Payment of Sub-Account Balances/Interest

(a)Payment Dates.
(i)Maturity Date.  The Maturity Date of each Sub-Account shall be the third anniversary of the Grant Date of the Award that was credited to such Sub-Account.  For example, the Maturity Date of the 2015 Sub-Account (containing Awards with a Grant Date of 1/1/15) shall be 1/1/18.  Subject to the provisions of clause (ii) below, the balance of each Sub-Account shall be paid to the Participant on the Maturity Date of such Sub-Account. 
(ii)Other Payment Dates.  Notwithstanding the foregoing, but subject to the provisions of Section 11 hereof, (1)  the payment date of amounts that were credited to a particular Sub-Account while a Participant was a Non-U.S. Participant may be any earlier date determined by the Committee and (2) in the event a Participant dies, becomes Disabled, or incurs a Termination of Employment on account of Retirement prior to the applicable Maturity Date, (A) the payment date of all amounts credited to the Participant’s pre-2015 Sub-Accounts as of the date of death, Disability, or Termination of Employment on account of Retirement shall be the date of such death, Disability, or Termination of Employment on account of Retirement, (B) the payment date of all amounts credited to the Participant’s post-2014 Sub-Accounts as of the date of death, Disability, or Termination of Employment on account of Retirement shall be a date during the period from January 1st through April 30th of the Plan Year following the year in which such death, Disability, or Termination of Employment on account of Retirement occurs and (C) the Award earned for the Award Term in which the date of death, Disability, or Termination of Employment on account of Retirement occurs shall be paid during the period from January 1st through April 30th of the Plan Year following the last day of the Award Term; provided, however, that if a Participant who incurs a Termination of Employment on account of Retirement is a Key Employee, the Participant’s payment date shall not be any earlier than the 1st day of the 7th month following the date of his Termination of Employment on account of Retirement (or, if earlier, the date of the Participant’s death). 

(b)Interest.  The Participant’s Sub-Accounts shall be credited with interest as follows; provided, however, that (1) no interest shall be credited to a Sub-Account after the Maturity Date of the Sub-Account, (2) no interest shall be credited to a particular Sub-Account following a Participant’s first Termination of Employment prior to the Maturity Date for that Sub-Account (except as described in Section 10(c)(ii) with respect to delayed payments made to Key Employees on account of a Termination of Employment on account of Retirement), (3) no interest shall be credited to the Sub-Accounts after the last day of the month preceding the payment date of such Sub-Account and (4) no interest in excess of 14% shall be credited to any Sub-Account.
		
	(i)
	Interest Rate for Non-Covered Employees.  At the end of each calendar month during a Plan Year, the Sub-Accounts of Participants who are not Covered Employees shall be credited with an amount determined by multiplying the Participant’s Sub-Account balances during such month by 2%.  In addition, as of the end of each Plan Year commencing on or after January 1, 2014 in which the True-Up Interest Rate for such Plan Year exceeds 2%, the Sub-Accounts shall also be credited with an additional amount determined by multiplying the Participant’s Sub-Account balances during each month of such Plan Year by the excess of the True-up Interest Rate over 2%, compounded monthly.  If a Participant incurs a Termination of Employment for any reason prior to December 31 of a Plan Year, the foregoing interest calculations shall be calculated as of the last day of the month coincident with or prior to the Participant’s termination date.  Notwithstanding the foregoing, in the event that, prior to an applicable Maturity Date, a Participant who is not a Covered Employee incurs a Termination of Employment (other than on account of death, disability or Retirement), the interest credited to such Participant’s Sub-Accounts for the year in which such Termination of Employment occurs shall be capped at 2%.

		
	(ii)
	Interest Rate for Covered Employees.  At the end of each calendar month during a Plan Year, the Sub-Accounts of Participants who are Covered Employees shall be credited with an amount determined by multiplying the Participant’s Sub-Account balances during such month by 14%; provided, however, that the Committee shall have the power to decrease such interest to such lower amount determined by the Committee in its sole discretion based on the True-Up Interest Rate for such Plan Year, but no less than 2%. If a Participant incurs a Termination of Employment for any reason prior to December 31 of a Plan Year, the foregoing interest calculations shall be calculated as of the last day of the month coincident with or prior to the Participant’s termination date. Notwithstanding the foregoing, in the event that, prior to an applicable Maturity Date, a Participant who is a Covered Employee incurs a Termination of Employment (other than on account of death, disability or Retirement), the interest credited to such Participant’s Sub-Accounts for the year in which such Termination of Employment occurs shall be capped at 2%.  

		
	(iii)
	Prior Plan Years.  Notwithstanding anything in the Plan to the contrary, any interest credited to a Participant’s Sub-Accounts with respect to 2013 or prior Plan Years will be provided under the terms and conditions of the Plan as it existed on December 31, 2013.  Moreover, in the event that, prior to an applicable Maturity Date, a Participant becomes eligible for a payment of amounts 

credited to his pre-2015 Sub-Accounts prior to December 31 of a Plan Year, the foregoing interest calculations shall be made as of the last day of the month prior to such payment date. When making such calculations, the True-Up Interest Rate shall be equal to the year-to-date True-Up Interest Rate as of the last day of the prior month, as determined by the Committee in its sole discretion.
		
	(iv)
	Changes.  The Committee may change (or suspend) the interest rate credited on Accounts hereunder at any time.  Notwithstanding the foregoing, no such change may be made in a manner that would cause any Qualified Performance-Based Award to be includable as “applicable employee remuneration” of such Participant, as such term is defined in Code Section 162(m) (i.e., to no longer qualify for the exception for “qualified performance-based compensation” under Code Section 162(m)).

(c)Payment Date, Form of Payment and Amount.
(i)Payment Date and Form.  Except as otherwise described in Section 11 hereof, the Participant’s Employer or former Employer shall deliver to the Participant (or, if applicable, his Beneficiary), a check in full payment of each Sub-Account within 90 days of the applicable payment date of such Sub-Account.
(ii)Amount.  Each Participant shall be paid the entire balance of each Sub-Account (including interest).  If a Participant who incurs a Termination of Employment on account of Retirement is a Key Employee whose payment is delayed until the 1st day of the 7th month following such Termination of Employment on account of Retirement, such Participant’s Sub-Accounts shall continue to be credited with interest (in accordance with the rules specified in Section 10(b) but at the rate of 2%) from the date the payment would have been made if the Participant was not a Key Employee through the last day of the month prior to the actual payment date.  Any amounts that would otherwise be payable to the Key Employee prior to the 1st day of the 7th month following Termination of Employment on account of Retirement shall be accumulated and paid in a lump sum make-up payment within 30 days following such delayed payment date.  Amounts that are payable to the Non-U.S. Participants shall be converted from U.S. dollars to local currency in accordance with the terms of the Guidelines.

11.Change in Control
(a)The following provisions shall apply notwithstanding any other provision of the Plan to the contrary.
(b)Amount of Award for Year of Change In Control.  In the event of a Change in Control during an Award Term, the amount of the Award payable to a Participant who is employed on the date of the Change in Control (or who died, became Disabled or Retired during such Award Term and prior to the Change in Control) for such Award Term shall be equal to the Participant’s Target Award for such Award Term multiplied by a fraction, the numerator of which is the number of days during the Award Term during which the Participant was employed by the Employers prior to the Change in Control and the denominator of which is the number of days in the Award Term.

(c)Time of Payment.  In the event of a Change in Control, the payment date of all amounts credited to the Participant’s Sub-Accounts (including, without limitation, the pro-rata Target Award for the Award Term during which the Change in Control occurred) shall be the date that is between two days prior to, or within 30 days after, the date of the Change in Control, as determined by the Committee in its sole and absolute discretion. Notwithstanding anything in the Plan to the contrary, the interest credited to the Participant’s Sub-Accounts under Section 10(b) for the year in which the Change in Control occurs shall be calculated as of the last day of the month prior to the date of the Change in Control. When making such calculation, the True-Up Interest Rate shall be equal to the year-to-date True-Up Interest Rate as of the last day of the month prior to the date of the Change in Control, as determined by the Committee in its sole discretion. 

12.Amendment, Termination and Adjustments
(a)The Committee, in its sole and absolute discretion, may alter or amend this Plan from time to time; provided, however, that no such amendment shall, without the written consent of a Participant, (i) reduce a Participant’s Account balance as in effect on the date of the amendment, (ii) reduce the amount of any outstanding Award that was previously approved by the Committee but not yet paid as of the date of the amendment, (iii) modify Section 11(b) hereof or (iv) alter the time of payment provisions described in Sections 10 and 11 of the Plan except for any amendments that accelerate the time of payment as permitted under Code Section 409A or are required to bring such provisions into compliance with the requirements of Code Section 409A and, in either case are permitted by Code Section 409A and the regulations issued thereunder.  
(b)The Committee, in its sole and absolute discretion, may terminate this Plan (or any portion thereof) at any time; provided that, such termination is permitted under Code Section 409A and, without the written consent of a Participant, no such termination shall (i) reduce a Participant’s Account balance as in effect on the date of the termination, (ii) reduce the amount of any outstanding Award that was previously approved by the Committee but not yet paid as of the date of the termination or (iii) alter the time of payment provisions described in Sections 10 or 11 of the Plan, except for modifications that accelerate the time of payment or are required to bring such provisions into compliance with the requirements of Code Section 409A and, in either case, are permitted under Code Section 409A.  
(c)Notwithstanding the foregoing, upon a complete termination of the Plan, the Committee, in its sole and absolute discretion, shall have the right to change the time of distribution of Participants’ Sub-Accounts under the Plan, including requiring that all such Sub-Accounts be immediately distributed in the form of lump sum cash payments (but only to the extent such change is permitted by Code Section 409A).
(d)No amendment may cause any Qualified Performance-Based Award to be includable as “applicable employee remuneration” of such Participant, as such term is defined in Code Section 162(m) (i.e., to no longer qualify for the exception for “qualified performance-based compensation” under Code Section 162(m)).
(e)Any amendment or termination of the Plan shall be in the form of a written instrument executed by an officer of the Company on the order of the Committee.  Such amendment or termination shall become effective as of the date specified in the instrument or, if no such date is specified, on the date of its execution. 

13.General Provisions

(a)No Right of Employment.  Neither the adoption or operation of this Plan, nor any document describing or referring to this Plan, or any part thereof, shall confer upon any employee any right to continue in the employ of the Employers, or shall in any way affect the right and power of the Employers to terminate the employment of any employee at any time with or without assigning a reason therefor to the same extent as the Employers might have done if this Plan had not been adopted.
(b)Governing Law.  The provisions of this Plan shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, except when preempted by federal law.
(c)Expenses.  Expenses of administering the Plan shall be paid by the Employers, as directed by the Company.
(d)Assignability.  No Award granted to a Participant under this Plan and no Account balance of a Participant under this Plan shall be transferable by him for any reason whatsoever or be subject to alienation, anticipation, sale, pledge, encumbrance or other legal process or in any manner be liable for or subject to the debts or liabilities of the Participant or Beneficiary; provided, however, that upon the death of a Participant, any amounts payable hereunder shall be paid to the Participant’s Beneficiary.
(e)Taxes.  There shall be deducted from each payment under the Plan the amount of any tax required by any governmental authority to be withheld and paid over to such governmental authority for the account of the person entitled to such payment.
(f)Limitation on Rights of Participants; No Trust.  No trust has been created by the Employers for the payment of any benefits under this Plan; nor have the Participants been granted any lien on any assets of the Employers to secure payment of such benefits.  This Plan represents only an unfunded, unsecured promise to pay by the Employer or former Employer of the Participant, and the Participants and Beneficiaries are merely unsecured creditors of the Participant’s Employer or former Employer.
(g)Payment to Guardian.  If a Sub-Account balance is payable to a minor, to a person declared incompetent or to a person incapable of handling the disposition of his property, the Committee may direct payment of such Sub-Account to the guardian, legal representative or person having the care and custody of such minor, incompetent or person.  The Committee may require such proof of incompetency, minority, incapacity or guardianship as it may deem appropriate prior to the distribution of such Sub-Account.  Such distribution shall completely discharge the Employers from all liability with respect to such Sub-Account.
(h)Miscellaneous.
(i)Headings.  Headings are given to the sections of this Plan solely as a convenience to facilitate reference.  Such headings, numbering and paragraphing shall not in any case be deemed in any way material or relevant to the construction of this Plan or any provisions thereof.  
(ii)Construction.  The use of the masculine gender shall also include within its meaning the feminine.  The use of the singular shall also include within its meaning the plural, and vice versa.

(iii)Acceleration of Payments.  Notwithstanding any provision of the Plan to the contrary, to the extent permitted under Code Section 409A and the Treasury regulations issued thereunder, payments of amounts due hereunder may be accelerated to the extent necessary to (1) comply with federal, state, local or foreign ethics or conflicts of interest laws or agreements or (2) pay the FICA taxes imposed  under Code Section 3101, and the income withholding taxes related thereto.  Payments may also be accelerated if the Plan (or a portion thereof) fails to satisfy the requirements of Code Section 409A; provided that the amount of such payment may not exceed the amount required to be included as income as a result of the failure to comply with Code Section 409A.
(iv)Delayed Payments due to Solvency Issues.  Notwithstanding any provision of the Plan to the contrary, an Employer shall not be required to make any payment hereunder to any Participant or Beneficiary if the making of the payment would jeopardize the ability of the Employer to continue as a going concern; provided that any missed payment is made during the first Plan Year in which the funds of the Employer are sufficient to make the payment without jeopardizing the going concern status of the Employer.
(v)Payments Violating Applicable Law.    Notwithstanding any provision of the Plan to the contrary, the payment of all or any portion of the amounts payable hereunder will be deferred to the extent that the Company reasonably anticipates that the making of such payment would violate Federal securities laws or other applicable law (provided that the making of a payment that would cause income taxes or penalties under the Code shall not be treated as a violation of applicable law).  The deferred amount shall become payable at the earliest date at which the Company reasonably anticipates that making the payment will not cause such violation.
14.Liability of Employers.   The Employers shall each be liable for the payment of the Awards/Sub-Account balances that are payable hereunder to or on behalf of the Participants who are (or were) its employees.  

15.Approval by Stockholders
The Plan was approved by the Stockholders of NACCO Industries, Inc. on May 12, 2010.

        

                

 Appendix 1.    Change in Control. 

Change in Control.  The term “Change in Control” shall mean the occurrence of any of the events listed in I or II, below; provided that such occurrence meets the requirements of Treasury Regulation Section 1.409A-3(i)(5) (or any successor or replacement thereto) with respect to a Participant:
		
	I.  i.
	Any “Person” (as such term is used in Sections 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than one or more Permitted Holders (as defined below), is or becomes the “beneficial owner”(as defined in Rules 13d-3 and 13d-5 of the Exchange Act), directly or indirectly, of more than 50% of the combined voting power of the then outstanding voting securities of a Related Company (as defined below) entitled to vote generally in the election of directors (the “Outstanding Voting Securities”), other than any direct or indirect acquisition, including but not limited to an acquisition by purchase, distribution or otherwise, of voting securities by any Person pursuant to an Excluded Business Combination (as defined below); or

		
	ii.
	The consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of any Related Company or the acquisition of assets of another corporation, or other transaction involving a Related Company (“Business Combination”) excluding, however, such a Business Combination pursuant to which either of the following apply (such a Business Combination, an “Excluded Business Combination”) (A) a Business Combination involving Housewares Holding Co. (or any successor thereto) that relates solely to the business or assets of The Kitchen Collection, Inc. (or any successor thereto) or (B) a Business Combination pursuant to which the individuals and entities who beneficially owned, directly or indirectly, more than 50% of the combined voting power of any Related Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then Outstanding Voting Securities of the entity resulting from such Business Combination (including, without limitation, an entity that as a result of such transaction owns any Related Company or all or substantially all of the assets of any Related Company, either directly or through one or more subsidiaries).

II.    i.    Any “Person” (as such term is used in Sections 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than one or more Permitted Holders, is or becomes the “beneficial owner”(as defined in Rules 13d-3 and 13d-5 of the Exchange Act), directly or indirectly, of more than 50% of the combined voting power of the then Outstanding Voting Securities of NACCO Industries, Inc. (“NACCO”), other than any direct or indirect acquisition, including but not limited to an acquisition by purchase, distribution or otherwise, of voting securities: 

    (A) directly from NACCO that is approved by a majority of the Incumbent Directors (as defined below); or

(B) by any Person pursuant to an Excluded NACCO Business Combination (as defined below); 

provided, that if at least a majority of the individuals who constitute Incumbent Directors determine in good faith that a Person has become the “beneficial owner”(as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of more than 50% of the combined voting 

power of the Outstanding Voting Securities of NACCO inadvertently, and such Person divests as promptly as practicable a sufficient number of shares so that such Person is the “beneficial owner”(as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of 50% or less of the combined voting power of the Outstanding Voting Securities of NACCO, then no Change in Control shall have occurred as a result of such Person’s acquisition; or

		
	ii.
	a majority of the Board of Directors of NACCO ceases to be comprised of Incumbent Directors; or

		
	iii.
	the consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of NACCO or the acquisition of assets of another corporation, or other transaction involving NACCO (“NACCO Business Combination”) excluding, however, such a Business Combination pursuant to which both of the following apply (such a Business Combination, an “Excluded NACCO Business Combination”):

(A) the individuals and entities who beneficially owned, directly or indirectly, NACCO immediately prior to such NACCO Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then Outstanding Voting Securities of the entity resulting from such NACCO Business Combination (including, without limitation, an entity that as a result of such transaction owns NACCO or all or substantially all of the assets of NACCO, either directly or through one or more subsidiaries); and

(B) at the time of the execution of the initial agreement, or of the action of the Board of Directors of NACCO, providing for such NACCO Business Combination, at least a majority of the members of the Board of Directors of NACCO were Incumbent Directors.

III.  Definitions.  The following terms as used herein shall be defined as follow:

1.  “Incumbent Directors” means the individuals who, as of December 31, 2013, are Directors of NACCO and any individual becoming a Director subsequent to such date whose election, nomination for election by NACCO’s stockholders, or appointment, was approved by a vote of at least a majority of the then Incumbent Directors (either by a specific vote or by approval of the proxy statement of NACCO in which such person is named as a nominee for director, without objection to such nomination); provided, however, that an individual shall not be an Incumbent Director if such individual’s election or appointment to the Board of Directors of NACCO occurs as a result of an actual or threatened election contest (as described in Rule 14a‐12(c) of the Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board of Directors of NACCO.

2.  “Permitted Holders” shall mean, collectively, (i) the parties to the Stockholders’ Agreement, dated as of March 15, 1990, as amended from time to time, by and among National City Bank, (Cleveland, Ohio), as depository, the Participating Stockholders (as defined therein) and NACCO; provided, however, that for purposes of this definition only, the definition of Participating Stockholders contained in the Stockholders’ Agreement shall be such definition in effect of the date of the Change in Control, (ii) any direct or indirect subsidiary of NACCO and (iii) any employee benefit plan (or related trust) sponsored or maintained by NACCO or any direct or indirect subsidiary of NACCO.   

3.  “Related Company” means Hamilton Beach Brands, Inc.  and its successors (“HB”), any direct or indirect subsidiary of HB and any entity that directly or indirectly controls HB.

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