PPA TRANSFER AGREEMENT
This PPA TRANSFER AGREEMENT ("Agreement") is dated as of April 7, 1998 and is
made by and between MONTAUP ELECTRIC COMPANY, a Massachusetts corporation
("Seller"), and TRANSCANADA POWER MARKETING LTD., a Delaware corporation
("Asset Purchaser"). This Agreement set forth the terms and conditions under
which Seller transfers to Asset Purchaser the economic benefits and performance
obligations, subject to Seller's continuing obligations to make certain
payments, associated with the power purchase agreements herein after described
("the Power Purchase Agreement") between seller and third party power supplier
("the Power Seller"), to Asset Purchaser pursuant to the Asset Purchase
Agreement dated as of April 7, 1998 ("the APA"), by and between Seller and
Asset Purchaser.
1. The following Power Purchase Agreement (as amended or supplemented, a
"Commitment") is attached as an exhibit hereto and is incorporated into this
Agreement by reference.
Date Power Supplier
5/14/86 Ocean State Power (Montaup)
9/28/88 Ocean State Power II (Montaup)
5/14/86 Ocean State Power (Montaup
7/12/88 Ocean State Power II (Montaup)
A Commitment shall be automatically deleted from the above Commitment list (the
"Commitment List"} without further action by the parties: (i) on the effective
date of any amendment and assignment of the Commitment pursuant to Section 7,
below, (ii) upon the expiration of such Commitment pursuant to its terms, or
(iii) upon the termination of such Commitment pursuant to the written agreement
of the parties thereto.
2. This Agreement shall become effective on the Effective Date (as defined
in Section 12) and shall remain in effect until Asset Purchaser has made
payment to Seller of amounts owed pursuant to Section 4, below, for the last
month in which a Commitment is listed on the Commitment List, and Seller has
made payment to Asset Purchaser of amounts owned pursuant to Section 8 below,
for the last month in which such a payment is due.
3. Commencing as of the Effective Date, each month Seller agrees to
provide to Asset Purchaser all capacity, energy and any other benefits it
receives under each Conunitment as of the first day of the month. All electric
energy shall be deliver ed to Asset Purchaser at the point at which the Power
Seller makes delivery to Seller as established under such Commitment. Asset
Purchase shall be responsible for making all arrangements necessary for the
further transmission of such energy.
4. (a) Commencing as of the month following the Effective Date, Asset
Purchaser agrees to Pay to Seller each month all amounts properly due from
Seller to the Power Seller for the preceding month associated with capacity,
energy and any other benefits made available to it by Seller from each
Commitment on the preceding month's Commitment List, less the amount of
Seller's payment obligation specified in Section 8 below. In turn, each month,
Seller shall timely pay the Power Seller an amount equal to all amounts
properly due to the Power Seller for the preceding month under each Commitment.
For purposes of the first monthly payment due from Asset Purchaser to Seller
under this Agreement in connection with each Commitment, energy payments shall
be based on meter readings taken on the first day for which Asset Purchaser has
a payment obligation under this Agreement and capacity payments shall be based
on the ratio of the number of days in the month for which Asset Purchaser has a
payment obligation under this Agreement to the total number of days in the
month. Asset Purchaser shall make such payment sufficiently in advance of the
time that such payment is due by Seller to the Power Seller as to allow Seller
to make timely payment under such Commitment, which includes the amount Seller
receives from Asset Purchaser in connection with such Commitment and the amount
of Seller's payment obligation specified in Section 8 below.
(b) Upon the -Effective Date, Seller shall irrevocably and unconditionally
assign and thereafter hold for the benefit of and/or credit to Asset Purchaser
against payments due from it to Seller under Section 4(a) hereof or, at the
termination of t his Agreement pay to Asset Purchaser, any and all amounts
which are then or thereafter received by Seller from the Power Sellers under
the Commitments, including, without limitation, any aggregate differential
balances under any Commitment and the benefit of and proceeds from any security
deposits, letters of credit or other similar instruments or accounts
established for the benefit of Seller by the Power Seller, but excluding any
credits or refunds received by Seller after the Effective Date which relate to
billing errors or reconciliations of pre-Effective Date bills, and any amounts
paid by the Power Sellers to Seller with respect to disputes arising before the
Effective Date that are attributable to a period prior to the Effective Date .
5. (a) Effective as of the Effective Date, Seller hereby irrevocably
and unconditionally appoints Asset Purchaser as its agent for all purposes
under each Commitment. Asset Purchaser is authorized to take all actions that
Seller may lawfully take under such Commitment without further approval by
Seller, except that Seller's prior written consent shall be required for (i)
actions that materially increase the costs to be incurred or the quantity of
power to be purchased by Seller under such Commitment (such as the approval of
facility expansions or fuel supply arrangements) and (ii) Commitment option
exercises, term extensions or amendments. Seller shall not unreasonably
withold such consent.
(b) Seller shall not agree to any amendment to or waiver of rights under a
Commitment without Asset Purchaser's consent, which Asset Purchaser may grant
or withhold in its sole discretion, and will not take any actions inconsistent
with the provisions of this Section 5.
6. Each party shall be entitled to indemnification under this Agreement to
the extent and in the manner set forth in Article 9 of the APA which is
hereby incorporated herein by reference.
7. (a) Seller and Asset Purchaser agree to work cooperatively and use
all reasonable efforts to amend each Commitment and assign the amended
Commitment to Asset Purchaser so that Seller will be released of all further
liabilities and obligations under each Commitment and Asset Purchaser will be
directly in contract with the Power Seller (a "Novation"). Any such amendment
shall include all modifications necessary to reflect the substitution of Asset
Purchaser for Seller as the purchasing party under such Commitment (including
modifications to Commitment price indices, where appropriate) and to properly
describe interconnection, delivery point and transmission system references in
such Commitment. It is intended by the parties that such Commitment amendment
and assignment preserve the economic benefit of a Commitment to the Asset
Purchaser while continuing to afford to Seller the protections for its or its
Affiliates transmission system embodied in the Commitment, provided that
nothing in this Agreement is intended to limit the ability of Asset Purchaser
to direct the dispatch, availability, quantity of timing of capacity or
electrical output of a facility that is the subject of a Commitment in
accordance with the terms of such Commitment. Seller and Asset Purchaser
agree to execute all agreements and documents reasonably requested by the other
in connection with a Novation. The provisions of Section 8(d) shall apply in
respect of a Novation.
(b) Notwithstanding the provisions of 7(a) the Seller and Asset Purchaser
agree that, as a condition of any Novation, the Asset Purchaser will require
Seller to provide, either (i) payment of a lump sum pursuant to the provisions
of Section 8(d) which reduces the Seller's continuing obligation to zero ($0);
or, if Seller and Buyer do not mutually agree to payment of a lump sum, (ii) a
security interest to the Asset Purchaser in a portion of the Seller's Contract
Termination Charge revenues a nd related service agreements with Eastern Edison
Company, Blackstone Valley Electric Company and Newport Electric Corporation
which is equal to the continuing obligation of the Seller under 8(b) and is
acceptable to the Asset Purchaser acting reasonably.
8. (a) In the month during which this Agreement is executed, Seller shall
pay the Power Seller an aggregate amount equal to the amount as set out in
Schedule "A" attached hereto (the "Monthly Support Payment"), multiplied by a
fraction, the numerator of which is the total number of days in the month in
which this Agreement is executed, less the number of days in such month up to
and including the date of the execution of this Agreement, and the denominator
of which is the total number of days in the month in which this Agreement is
executed, and such amount shall be deducted by Asset Purchaser from the amount
due Seller under Section 4 above for such month.
(b) Commencing as of the month following the Effective Date of this Agreement
and continuing for each succeeding month through and including January 2008,
Seller shall pay to the Power Seller each month an aggregate amount equal to
the Monthly Support Payment, and such amount shall be deducted by Asset
Purchaser from the amount due Seller under Section 4 above.
(c) In the event that the amount of the Monthly Support Payment set forth is
Section 8(b) (as adjusted to reflect any increase pursuant to this Section
8(c)) shall in any month exceed the amount due Seller from Asset Purchaser
under Section 4, Seller shall increase the amount of its Monthly Support
Payment in the next month (in addition to its obligation set forth in Section
8(b)) by the amount of such excess and Asset Purchaser shall also be allowed to
deduct such excess from the amount due Seller under Section 4 for such month.
(d) To the extent that a Novation is executed with respect to a Commitment
pursuant to Section 7 and Asset Purchaser and Seller agree to a lump-sum
payment, Seller and Asset Purchaser agree to amend this Agreement to
equitability provide for a lump-sum payment to either Asset Purchaser or the
Power Seller to reduce the amount of Seller's retained obligation set forth in
Section 8(b). Such lump-sum payment and such reduction in the amount of
Seller's retained obligation shall be in amounts to b e negotiated in good
faith by Asset Purchaser and Seller. It is the intention of the parties that
the lump-sum payment shall be based on the net present value of the amounts set
out in Schedule "A" calculated using a discount rate acceptable to Asset
Purchaser and Seller acting reasonably and which is reasonable given the
remaining term of the amounts payable by the Seller to the Asset Purchaser as
set out in Schedule "A", prevailing interest rates for similar financings done
at the time of payment of the lump sum and the creditworthiness of Seller at
the time of payment of the lump sum.
9. This Agreement and all rights, obligations, and performances of the
parties hereunder, are subject to all applicable Federal and state laws, and to
all promulgated orders and other duly authorized action of governmental
authority having jurisdiction.
10. This Agreement, the APA and any other agreement entered into by the
parties pursuant to the APA constitute the entire agreement between the
parties, and supersede all previous offers, negotiations, discussions,
communications and correspondence. This Agreement may be amended only a
written agreement signed by the parties. Except as otherwise set forth in
Section 5 hereof, this Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any
party hereto, including by operation of law without the prior written consent
of the other party, nor is this Agreement intended to confer upon any other
person except the parties hereto any rights or remedies hereunder.
Notwithstanding the foregoing,
(i) the Asset Purchaser may assign all of its rights and obligations
hereunder to any wholly owned subsidiary (direct or indirect) of TransCanada
Pipelines Limited ("TransCanada") and upon Seller's receipt of notice from
Asset Purchaser of any such assignment, the Asset Purchaser will be released
from all liabilities and obligations hereunder, accrued and unaccrued, such
assignee will be deemed to have assumed, ratified, agreed to be bound by and
perform all such liabilities and obligations, and all references herein to
Asset Purchaser shall thereafter by deemed references to such assignee, in each
case without the necessity for further act or evidence by the parties hereto or
such assignee; provided, however, that no such assignment an d assumption shall
release the Asset Purchaser from its liabilities and obligations hereunder
unless the assignee shall have acquired all or substantially all of the Asset
Purchaser's assets; provided, further, however, that no such assignment and
assumption shall relieve or in any way discharge TransCanada from the
performance of its duties and obligations under the Guaranty dated as of the
date of this Agreement executed by TransCanada; and (ii) the Asset Purchaser or
its permitted assignee ma y assign, transfer, pledge or otherwise dispose of
its rights and interests hereunder to a trustee or lending institutions) for
the purpose of financing or refinancing the Commitment including upon or
pursuant to the exercise of remedies under a financing or refinancing, or by
way of assignments, transfers, conveyances or dispositions in lieu thereof,
provided, however, the no such assignment or disposition shall relieve or in
any way discharge the Asset Purchaser or such assignee from the performance of
its duties and obligations under this Agreement. Seller agrees to execute and
deliver such documents as may be reasonably necessary to accomplish any such
assignment, transfer, conveyances, pledge or disposition of rights hereunder so
long as Sellers rights under this Agreement are not thereby otherwise altered,
amended, diminished or otherwise impaired. The interpretation and performance
of this Agreement shall be according to and controlled by the laws of The
Commonwealth of Massachusetts (regardless of the laws that might otherwise
govern under applicable Massachusetts principles of conflicts of laws). This
Agreement may be executed in one or more counterparts and each such counterpart
shall constitute one and the same instrument.
11. All payments required under this Agreement shall be paid in cash by
federal or other wire transfer of immediately available funds to an account
designated by the party to receive such such payment.
12. This Agreement shall be of no force and effect until the Effective Date.
If the APA shall have been terminated before the occurrence of the Closing Date
(as defined in the APA), this Agreement shall, without any action of the
parties hereto, terminate as of the time of the termination of the APA. As
used in this Agreement, "Effective Date" shall mean the Effective Date (as
defined in the APA).
13. In the event that TransCanada Power Marketing, Ltd. or successor is in
default of the Wholesale Standard Offer Agreement between TransCanada Power
Marketing, Ltd. and Eastern Edison Company, Blackstone Valley Electric Company
and Newport Electric Corporation and, having been given notice has failed to
cure such default within the time specified in the Wholesale Standard Offer
Agreement, Seller's obligation to make support payments under Section 8(a) will
be suspended until such default i s fully cured.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement on their behalf as of the date first
above written.
MONTAUP ELECTRIC COMPANY
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Vice President
TRANSCANADA POWER MARKETING LTD.
By: /s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: Vice President
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Senior Vice President
