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Exhibit 10.11
ASSIGNMENT AND ASSUMPTION AGREEMENT
(COLSTRIP 3&4 AGREEMENTS)
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (COLSTRIP 3&4 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, Puget Sound Power & Light Company (now Puget Sound Energy,
Inc.) ("Puget"), Portland General Electric Company ("Portland"), The Washington
Water Power Company (now Avista Corp.) ("Avista") and Pacific Power & Light
Company (now PacifiCorp)("PacifiCorp") are parties to that certain Ownership and
Operation Agreement Colstrip Units #3 and #4 made as of May 6, 1981, as amended
October 11, 1991 and July 13, 1998 ("Colstrip 3&4 Ownership Agreement")
(capitalized terms used in this Assignment Agreement without definition having
the respective meanings specified in the Colstrip 3&4 Ownership Agreement).
B. MPC, Puget, Portland, Avista, PacifiCorp and Western Energy Company
are parties to that certain Amended and Restated Coal Supply Agreement dated
August 24, 1998 ("Colstrip 3&4 CSA").
C. MPC, Puget, Portland, Avista, PacifiCorp and Western Energy Company
are parties to that certain coal transportation agreement dated July 10, 1981,
as amended September 14, 1987, and August 24, 1998 ("Colstrip 3&4 CTA").
D. MPC, Puget, Portland, Avista, PacifiCorp and United States Trust
Company of New York are parties to that certain Agreement Regarding Clean Air
Act Compliance Colstrip Units 3&4, dated November 1, 1994, as amended March 20,
1996 ("Colstrip 3&4 CAA Compliance Agreement").
E. MPC, Puget, Portland, Avista and PacifiCorp are parties to that
certain Common Facilities Agreement, Colstrip Units #1, #2, #3, and #4, dated
May 6, 1981 as amended January 21, 1992 ("Common Facilities Agreement").
F. The Colstrip 3&4 Ownership Agreement, Colstrip 3&4 CSA, Colstrip 3&4
CTA, Colstrip 3&4 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 #3 and #4 as part of the
Project) 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
A&A Agmt (Colstrip 3&4) Execution Copy
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which MPC has agreed to sell to PP&L Global, and PP&L Global has agreed to
purchase from MPC, on the terms and subject to the conditions of the Asset
Purchase Agreement, MPC's interest in certain electric generation related
assets, including MPC's Colstrip 3-related interest in the Assigned Agreements
(which interests include a Project Share of 15% and ownership of a 30% undivided
interest in Unit 3, a 15% undivided interest in facilities common to both Unit 3
and Unit 4 (only), and a 15% undivided interest in the Common Facilities).
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, 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, MPC's Colstrip
3-related interests in the Assigned Agreements.
I. This Assignment Agreement shall not serve to assign (i) MPC's
Colstrip 4-related interests in the Assigned Agreements, (ii) MPC's interest as
Operator (as defined in the Colstrip 3&4 Ownership Agreement) under the Colstrip
3&4 Ownership Agreement; or (iii) MPC's interest as Common Facilities Operator
(as defined in the Common Facilities Agreement) under the Common Facilities
Agreement.
J. 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 which correspond to MPC's Colstrip 3-related interests in
such 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.
K. All conditions required for assignment of the Assigned Agreements
have been satisfied, including, without limitation, the waivers by Puget,
Portland, Avista and PacifiCorp, of the respective "rights of first refusal" set
forth in such Assigned Agreements.
L. MPC entered into a sale-leaseback transaction completed in 1985
between MPC and other parties, whereby MPC sold its interest in Colstrip Unit #4
and leased back such interest, pursuant to the agreements listed under subparts
III.A and III.B on the list of Colstrip Contracts attached to the Asset Purchase
Agreement as Disclosure Schedule 1.01(a)(xi) (the "Unit 4 Sale and Leaseback
Transaction Documents"), and the assignment of MPC's Colstrip 3-related
interests in the Assigned Agreements will be subject to the Unit 4 Sale and
Leaseback Transaction Documents insofar as such documents apply to interests in
both Unit 3 and Unit 4.
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:
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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, the Asset
Purchase Agreement, and the applicable terms and provisions of the Unit 4 Sale
and Leaseback Transaction Documents (but only insofar as such documents apply to
interests in both Unit 3 and Unit 4), all of MPC's rights, title, interests,
obligations and liabilities in, to and under the Assigned Agreements (including,
but without limitation, a Project Share of 15%) which correspond to MPC's
Colstrip 3-related interests under such 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 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) This Assignment Agreement shall not operate to assign (i) MPC's
Colstrip 4-related interests in the Assigned Agreements, (ii) MPC's interest as
Operator (as defined in the Colstrip 3&4 Ownership Agreement) under the Colstrip
3&4 Ownership Agreement; or (iii) MPC's interest as Common Facilities Operator
(as defined in the Common Facilities Agreement) under the Common Facilities
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.
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(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 3&4 Agreements) to be executed as of the date
first above written.
PP&L Montana, LLC
By: /s/ Roger Petersen
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Signature
Roger Petersen
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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/ Perry J. Cole
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Signature
Perry J. Cole
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Printed Name
Vice-President
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Title
12/17/99
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Date
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