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EXHIBIT 10.7
EXECUTION COPY
MPC/PP&L COLSTRIP UNITS 3&4 GENERATING PROJECT
RECIPROCAL SHARING AGREEMENT
This MPC/PP&L COLSTRIP UNITS 3&4 GENERATING PROJECT RECIPROCAL SHARING
AGREEMENT (this "Agreement"), is entered into as of December 17th, 1999, by and
between PP&L MONTANA, LLC, a Delaware limited liability company ("PP&L
Montana"), and THE MONTANA POWER COMPANY, a Montana corporation ("MPC" and,
collectively, with the PP&L Montana, the "Parties").
RECITALS:
1. The ownership, operation and maintenance of the Project is governed by
that certain Ownership and Operation Agreement, dated as of May 6, 1981
and amended on October 11, 1991 and July 13, 1998, by and between MPC,
Puget Sound Energy, Inc. (formerly named "Puget Sound Power & Light
Company"), a Washington corporation, Avista Corporation (formerly named
"Washington Water Power Company"), a Washington corporation, Portland
General Electric Company, an Oregon corporation, and PacifiCorp
(successor by merger to the Maine corporation named "Pacific Power &
Light Company"), an Oregon corporation (as amended, modified and
supplemented from time to time, the "Ownership Agreement"). Unless
otherwise defined in this Agreement (including the Recitals), all other
capitalized terms used in this Agreement have the meanings assigned to
such terms in the Ownership Agreement.
2. MPC holds interests in (a) that certain Power Sales Agreement (as
amended, modified and supplemented from time to time, the "PSE PSA"),
dated as of October 1, 1989, by and between MPC and Puget, and (b) that
certain Power Sales Agreement (as amended, modified and supplemented
from time to time, the "LADWP PSA"), dated July 17, 1989, by and
between MPC and Department of Water and Power of the City of Los
Angeles (the PSE PSA, the LADWP PSA and any of the replacement power
purchase agreements which MPC contemplates entering into in its sole
discretion to replace the PSE PSA or the LADWP PSA, collectively, the
"CS4 PSAs").
3. Colstrip 3 and Colstrip 4 are relied upon by MPC to serve its
customers.
4. The contractual provisions of the Ownership Agreement and the CS4 PSAs
require the coordinated operation of Colstrip 3 and Colstrip 4. In
furtherance of such coordination and cooperation, the Parties are
concurrently executing and delivering a Project Committee Vote Sharing
Agreement that will govern the voting of their Shared Vote (as defined
therein) that relates to their Project Shares in the Project.
5. MPC's Colstrip 4 Project Share (as defined in the Project Committee
Vote Sharing Agreement) is subject to (i) the Participation Agreement
dated as of December 16, 1985 (including all exhibits to same as
actually executed by the parties thereto), by and among
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United States Trust Company of New York, a New York corporation
("USTC"), Xxxxx X. Xxxxx, an individual ("Young" and together with
USTC, "Owner Trustee" or "Lessor"), MPC, Bankers Trust Company (the
"Indenture Trustee"), Mellon Leasing Corporation (the "Owner
Participant" as assignee and successor to Xxxxxxx Leasing Corporation,
the original Owner Participant)) and the Loan Participants identified
therein and (ii) the Participation Agreement, dated as of December 16,
1985 (including all exhibits to same as actually executed by the
parties thereto), by and among the Owner Trustee, MPC, the Indenture
Trustee, SGE (New York) Associates (the "Owner Participant") and the
Loan Participant identified therein (items (i) and (ii), collectively,
and as amended, modified and supplemented from time to time, the
"Colstrip 4 Leveraged Lease Documents").
NOW, THEREFORE, in consideration of the foregoing premises, and for
other consideration the sufficiency and receipt of which is hereby acknowledged,
the Parties agree to the following terms and conditions:
AGREEMENT
Section 1. Effective Date and Term. This Agreement shall become
effective as of the date first written above and shall continue in full force
and effect until the occurrence of the Lessor Possession Date (under any of the
Colstrip 4 Leveraged Lease Documents). Termination of this Agreement shall not
affect the Parties' respective rights and obligations under the Ownership
Agreement as Project Users with 15% Project Shares.
Section 2. Confirmation and Agreement. Consistent with Section 2(c) of
the Ownership Agreement, the Parties hereby confirm and agree as follows:
(a) subject to the provisions of the Ownership Agreement, each
Party holds a fifteen percent (15%) Project Share in the Project;
(b) subject to the provisions of this Agreement and the
Ownership Agreement, each Party shall be (i) entitled to schedule and
take an amount of generation from the Project up to but not to exceed
such Parties' respective Project Shares of Net Generating Capability
and (ii) obligated to take or otherwise dispose of a percentage of the
minimum energy production from the Project in accordance with such
Party's Project Share in the Project and Section 13(d) of the Ownership
Agreement irrespective of whether a particular cost is specific to Xxxx
0 xx Xxxx 0; and
(c) except for (i) charges payable by the Parties pursuant to
Section 12 of the Ownership Agreement, (ii) coal transportation charges
payable by the Parties pursuant to the Coal Transportation Agreement,
and (iii) other Costs of Operation the Project Users pay based on each
Project User's allocation of generation (e.g., lime and diesel fuel),
the Parties shall be responsible for their respective Project Shares of
Costs of Operation and Costs of Construction irrespective of whether a
particular cost is specific to Unit 3 or Unit 4.
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Section 1. Representations and Warranties. Each Party represents and
warrants to the other as of the date of this Agreement that:
(a) such Party is duly formed and validly existing under the
laws of the jurisdiction of its organization and is duly authorized to
do business in each other jurisdiction in which it is required to be so
qualified with full power and authority to perform its obligations
hereunder and that the execution, delivery and performance of this
Agreement has been duly authorized by such Party;
(b) this Agreement has been duly executed and delivered by
such Party and constitutes the legal, valid, binding and enforceable
agreement of such Party enforceable in accordance with its terms
against such Party subject to the effect of bankruptcy, insolvency,
moratorium and other similar laws relating to creditors' rights
generally, whether existing at law or in equity, by general equitable
principles and by an implied covenant of good faith and fair dealing;
(c) no consent, approval or authorization of, or filing,
registration or qualification with, any court or governmental authority
on the part of such Party is required for the execution and delivery of
this Agreement by such Party and the performance of its obligations and
duties hereunder, other than those that have been made or obtained; and
(d) such Party is in material compliance with all laws and
legal requirements applicable to its business.
Section 1. Assignment; Third Party Beneficiaries. Any transfer or
assignment by either Party of any part of its interest under this Agreement to
any other Person (an "Assignee") shall be subject to the satisfaction of each of
the following conditions: (a) the assigning Party under this Agreement shall be
simultaneously transferring or assigning a corresponding portion of its Project
Share to such Assignee and (b) such Assignee shall have assumed in writing the
corresponding duties and obligations of the assigning Party which arise and are
attributable to the period after the effective date of the assignment. Nothing
in this Agreement, express or implied, is intended to confer on any person or
entity other than the Parties and their successors and assigns permitted
hereunder any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
Section 2. Governing Law. This agreement shall be governed by and
construed in accordance with the laws of the State of Montana without regard to
conflicts of laws principles.
Section 3. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 4. Notices and Communications.
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(a) Unless otherwise specified herein, all notices under this
Agreement shall be in writing and shall be (i) delivered personally; (ii) sent
by a recognized overnight mail or courier service, with delivery receipt
requested; or (iii) sent by facsimile transmission, followed by written
confirmation, to the Parties at the addresses, telephone and facsimile numbers
set forth on the signature pages hereto.
(b) All notices sent under this Agreement shall be effective
when received by the other Party, except that any facsimile which is received
after 5:00 p.m. at the location of the receiving Party shall be deemed to be
effective on the next business day.
(c) Each Party may change its notice information set forth
above by written notice to the other Party pursuant to this Section 7.
Section 1. Counterparts. This Agreement may be executed in any number
of counterparts, all of which together shall constitute a single instrument.
Section 2. Conflicts. In the event of a conflict between the Asset
Purchase Agreement, on the one hand, and this Agreement on the other hand, the
terms and provisions of this Agreement shall govern.
Section 3. Amendments and Waivers. This Agreement may be amended,
supplemented or otherwise modified only in writing executed and delivered by
each Party. Notwithstanding the foregoing, the Parties shall not enter into any
amendment, supplement, or modification to this Agreement which conflicts with
the terms and conditions of the CS4 PSAs or the Ownership Agreement. No waiver
of any right under this Agreement shall be binding unless such waiver is in a
writing by the Party to be bound. No failure to exercise and no delay in
exercising, on the part of any Party, any right, remedy, power or privilege
under this Agreement, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
[SIGNATURES FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this MPC/PP&L Colstrip
Units 3&4 Generating Project Reciprocal Sharing Agreement as of the date first
above written.
THE MONTANA POWER COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
Addresses for Notices:
The Montana Power Company
Energy Supply Division
00 X. Xxxxxxxx
Xxxxx, XX 00000
Attn: Executive Vice President and Chief
Operating Officer
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
With a copy of written notices to:
Montana Power Company
00 X. Xxxxxxxx
Xxxxx, XX 00000
Attn: General Counsel
Facsimile Number: (000) 000-0000
PP&L MONTANA, LLC
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: President
Address for Notices:
PP&L Montana, LLC
US Bank Building
000 Xxxxx Xxxxxxxx,
Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxx, General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
