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Exhibit 10.10
ASSIGNMENT AND ASSUMPTION AGREEMENT
(COLSTRIP 1&2 AGREEMENTS)
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (Colstrip 1&2 Agreements)
(this "Assignment Agreement") is made and entered into as of the 17th day of
December, 1999, by and between THE MONTANA POWER COMPANY, a Montana corporation,
("MPC"), and PP&L MONTANA, LLC, a Delaware limited liability company (PP&L
Montana").
RECITALS
A. MPC and Puget Sound Power & Light Company (now Puget Sound Energy,
Inc.) ("Puget") are parties to that certain Construction and Ownership Agreement
dated July 30, 1971, as amended October 21, 1998 ("Colstrip 1&2 Ownership
Agreement");
B. MPC and Puget are parties to that certain Agreement for the
Operation and Maintenance of Colstrip Steam Electric Generating Plant, Rosebud
County, Montana, commonly referred to as the Colstrip Units 1 and 2 Operating
Agreement, made as of July 30, 1971 ("Colstrip 1&2 Operating Agreement");
C. MPC, Puget and Western Energy Company are parties to that certain
Coal Supply Agreement commonly referred to as the Colstrip 1&2 Coal Supply
Agreement, entered into on July 30, 1971, as amended by the Amendment Correcting
Coal Supply Agreement signed in December 1977, ("Colstrip 1&2 Coal Supply
Agreement"), such agreement subject to the Opinion of Arbitrator dated March 17,
1995;
D. MPC, Puget, Portland General Electric Company ("Portland"), The
Washington Water Power Company (now Avista Corp.), and Pacific Power & Light
Company (now PacifiCorp) are parties to that certain Common Facilities
Agreement, Colstrip Xxxxx #0, #0, #0, and #4, dated May 6, 1981, as amended
January 21, 1992 ("Common Facilities Agreement");
E. MPC and Puget are parties to that certain Agreement Relating to
Clean Air Act Compliance Colstrip Units 1&2, made as of October 31, 1994, as
amended April 2, 1996 ("Colstrip 1&2 CAA Compliance Agreement");
F. The Colstrip 1&2 Ownership Agreement, the Colstrip 1&2 Operating
Agreement, the Colstrip 1&2 Coal Supply Agreement, the Colstrip 1&2 CAA
Compliance Agreement, and the Common Facilities Agreement (but only insofar as
such agreement relates to the portion of the Common Facilities thereunder
allocated to Colstrip Units #1 And #2 as part of the "Project", as defined in
the Colstrip 1&2 Ownership Agreement) are collectively referred to herein as the
"Assigned Agreements";
G. MPC and PP&L Global, Inc., a Pennsylvania corporation ("PP&L
Global"), entered into that certain Asset Purchase Agreement dated as of October
31, 1998, as amended June 29,1999, and October 29, 1999 (as amended, the "Asset
Purchase Agreement"), pursuant to which MPC has agreed to sell to PP&L Global,
and PP&L Global has agreed to purchase from
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MPC, on the terms and subject to the conditions of the Asset Purchase Agreement,
MPC's interest in certain electric generation related assets, including the
Assigned Agreements;
H. The Asset Purchase Agreement provides that PP&L Global may assign
its interests in the Asset Purchase Agreement to subsidiaries, and PP&L Global
has formed PP&L Montana, LLC, ("PP&L Montana") a Delaware limited liability
company and an indirect wholly-owned subsidiary of PP&L Global, for the purpose
of assigning to PP&L Montana certain of PP&L Global's interests in the Asset
Purchase Agreement including, without limitation, such interests relating to the
Assigned Agreements;
I. Pursuant to this Assignment Agreement, subject nevertheless to the
Asset Purchase Agreement, PP&L Montana desires to assume and accept from MPC,
and MPC desires to sell, assign and transfer to PP&L Montana, all of MPC's
rights, title, interests, obligations and liabilities in, to and under the
Assigned Agreements that arise and are attributable to the period after the
Closing under the Asset Purchase Agreement (as used herein "Closing" has the
meaning set forth in the Asset Purchase Agreement), provided, however, that the
parties recognize and agree there are certain pre-Closing liabilities being
assumed by PP&L Montana as provided in the Asset Purchase Agreement;
J. The assignment and assumption of the Assigned Agreements provided
for by this Assignment Agreement is made pursuant to the respective assignment
provisions in such agreements, and all conditions required for the assignment of
such agreements have been satisfied, including, without limitation, a) the
waiver by Puget of its "right of first refusal" set forth in the Section 16(d)
of the Colstrip 1&2 Ownership Agreement, and b) the consent by Puget set forth
in that certain "Consent and Novation" dated November 1, 1998, entered into by
MPC, Puget, and Portland,
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
AGREEMENT
SECTION 1. EFFECTIVE DATE
This Assignment Agreement shall become effective upon the execution and
delivery of this Assignment Agreement by both parties at the Closing (the
"Effective Date").
SECTION 2. ASSIGNMENT AND ASSUMPTION
(a) As of the Effective Date, MPC hereby transfers, assigns and
delegates to PP&L Montana, and PP&L Montana hereby accepts and assumes from MPC,
subject to the terms and provisions of this Assignment Agreement, and the Asset
Purchase Agreement, all of MPC's rights, title, interests, obligations and
liabilities in, to and under the Assigned Agreements that arise and are
attributable to the period after the Effective Date; provided that for purposes
of clarification, (a) PP&L Montana shall not assume any obligations or
liabilities of MPC under the
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Assigned Agreements that arise or are attributable to the period on and prior to
the Effective Date, and (b) MPC shall remain liable only for such obligations
and liabilities of MPC under the Assigned Agreements that arise or are
attributable to the period on and prior to the Effective Date. Notwithstanding
the foregoing, the parties recognize and agree there are certain pre-Closing
liabilities being assumed by PP&L Montana as provided in the Asset Purchase
Agreement.
(b) Without limiting the generality of the foregoing, MPC and PP&L
Montana acknowledge and agree that encompassed within the scope of such
assignment and assumption is MPC's rights, interests, responsibilities, and
liabilities as the "Operator" of the "Project" (as each such term is defined in
the Colstrip 1&2 Operating Agreement).
(c) This Assignment Agreement is delivered pursuant to and is subject
to the Asset Purchase Agreement, and shall not be construed to add to or
subtract from the parties' respective rights and responsibilities under the
Asset Purchase Agreement. In the event of any conflict between the terms of the
Asset Purchase Agreement and the terms of this Assignment Agreement, the terms
of the Asset Purchase Agreement shall prevail.
SECTION 3. MISCELLANEOUS
(a) Headings to the sections of this Assignment Agreement are solely
for the convenience of the parties, are not part of this Assignment Agreement,
and shall not be used for the interpretation of, or determination of the
validity of, this Assignment Agreement or any of its provisions.
(b) No Person (as defined in the Asset Purchase Agreement) other than
the parties to this Assignment Agreement, or such parties' successors and
assigns, shall have any rights under this Assignment Agreement or the provisions
contained herein.
(c) This Assignment Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
(d) This Assignment Agreement is binding upon, inures to the benefit
of, and is enforceable by the parties hereto and their respective successors and
assigns. Neither this Assignment Agreement nor any right, interest or obligation
hereunder may be assigned by any party hereto without the prior written consent
of the other party hereto, and any attempt to do so shall be void.
(e) This Assignment Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts
executed and performed in such State without giving effect to the conflicts of
laws principles thereof, except that if it is necessary in any other
jurisdiction to have the law of such other jurisdiction govern this Assignment
Agreement in order for this Assignment Agreement to be effective in any respect,
then the law of such other jurisdiction shall govern this Assignment Agreement
to such extent.
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IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption Agreement (Colstrip 1&2 Agreements) to be executed as of the date
first above written.
PP&L MONTANA, LLC
By: /s/ Xxxxx Xxxxxxxx
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Signature
Xxxxx Xxxxxxxx
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Printed Name
President
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Title
12/17/99
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Date
THE MONTANA POWER COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Signature
Xxxxxxx X. Xxxxxxxxx
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Printed Name
Vice President & General Counsel
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Title
12/17/99
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Date
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