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Exhibit 10.12
EXECUTION COPY
PROJECT COMMITTEE VOTE SHARING AGREEMENT
This PROJECT COMMITTEE VOTE SHARING AGREEMENT (this
"Agreement") is entered into as of December 17, 1999 (the "Effective Date") by
and between The Montana Power Company, a Montana corporation ("MPC" or a
"Party"), and PP&L Montana, LLC, a Delaware limited liability company ("PP&L
Montana" or a "Party").
R E C I T A L S:
A. 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").
B. Pursuant to that certain Asset Purchase Agreement, dated as
of October 31, 1998, by and among MPC and PP&L Global, Inc., a Delaware
corporation ("PP&L") (as amended, modified and supplemented from time to time,
the "Asset Purchase Agreement"), MPC has agreed to sell and PP&L has agreed to
purchase and accept through its affiliate, PP&L Montana, all of MPC's right,
title and interest in Colstrip 3 and a 15% Project Share (referred to herein,
even after such purchase and sale by PP&L Montana, as "MPC's Colstrip 3 Project
Share"). PP&L Montana also will become the Operator of the Project. MPC is
retaining all of its right, title and interest in Colstrip 4 and a 15% Project
Share ("MPC's Colstrip 4 Project Share").
C. Pursuant to Section 17(a) of the Ownership Agreement, (i)
MPC and its successors and assigns (including PP&L Montana) acting collectively
shall appoint one (1) Committee member and (ii) such shared member shall vote as
a unit MPC's Colstrip 3 Project Share and MPC's Colstrip 4 Project Share (the
"Shared Vote"). The Parties desire to enter into this Agreement to establish the
terms and conditions for the joint appointment of such shared member to the
Project Committee and the taking of action (including casting the Shared Vote)
by such member.
D. MPC's Colstrip 4 Project Share 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 United States
Trust Company of New York, a New York corporation ("USTC"), ▇▇▇▇▇ ▇. ▇▇▇▇▇, an
individual ("Young" and, together
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with USTC, "Owner Trustee" or "Lessor"), MPC, Bankers Trust Company (the
"Indenture Trustee"), Mellon Leasing Corporation (the "Owner Participant" as
assignee and successor to ▇▇▇▇▇▇▇ 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, together with all exhibits thereto, as separately executed, 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 as follows:
AGREEMENT
ARTICLE I
DEFINITIONS & INTERPRETATION
Section 1.1 Definitions. In this Agreement, the following capitalized
terms have the meanings assigned below.
(a) "Appointee" means any of a Chairman Appointee, an MPC
Appointee or a PP&L Appointee.
(b) "Authorized Officer" means, with respect to a Party, any
officer of such Party.
(c) "Cause" means a finding by an arbitrator that PP&L Montana
is in material breach of its obligations as Operator. Any such arbitration shall
be conducted pursuant to Section 18 of the Ownership Agreement.
(d) "Chairman Appointee" has the meaning assigned in Section
2.1(b).
(e) "Classification Objection" means an Objection on the
grounds that the other Party has incorrectly classified the subject matter of
the Proposal.
(f) "Colstrip 3" means such portion of the Project commonly
known as "Colstrip Unit 3" and the corresponding interest in the facilities the
use of which is common to Units 3 and 4 (only), the Common Facilities and
related facilities, real property and property rights.
(g) "Colstrip 3 Proposal" means a Proposal that relates solely
to Colstrip 3.
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(h) "Colstrip 4" means such portion of the Project commonly
known as "Colstrip Unit 4" and the corresponding interest in the facilities the
use of which is common to Units 3 and 4 (only), the Common Facilities and
related facilities, real property and property rights.
(i) "Colstrip 4 Proposal" means a Proposal that relates solely
to Colstrip 4.
(j) "Disapproval Statement" means the written statement
submitted to the other members of the Project Committee pursuant to Section
17(h) of the Ownership Agreement.
(k) "Lease Default Objection" means an Objection on the
grounds that the manner in which the Shared Vote is intended to be cast can
reasonably be expected to result in a Lease Default or Lease Event of Default
(each as defined in the Colstrip 4 Leveraged Lease Documents).
(l) "Mixed Proposal" means a Proposal that is not a Colstrip 3
Proposal or a Colstrip 4 Proposal.
(m) "MPC Appointee" has the meaning assigned in Section
2.1(c).
(n) "Objection" means an objection by a Party (or such Party's
Appointee) to the manner in which the Other Party's Appointee intends to use the
Shared Vote. Only the following Objections may be asserted under this Agreement:
Classification Objections, Lease Default Objections or Prudency Objections.
(o) "Party Appointee" means either an MPC Appointee or a PP&L
Appointee.
(p) "Poll" has the meaning assigned in Section 3.2(b).
(q) "PP&L Appointee" has the meaning assigned in Section
2.1(c).
(r) "Proposal" means any proposal being considered for action
by the Project Committee. The subject matters of the Proposals are in one (only)
of three classes: Colstrip 3 Proposals, Colstrip 4 Proposals and Mixed
Proposals.
(s) "Prudency Objection" means an objection resulting from a
good faith determination by an Authorized Officer of such Party that approval of
the matter in question would be inconsistent with Prudent Generator Practice
(such determination to be made on the assumption that such Party is a long-term
owner (and not merely a lessee) of MPC's Colstrip 3 Project Share or MPC's
Colstrip 4 Project Share, as appropriate).
(t) "Prudent Generator Practice" shall mean, at a particular
time, any of those practices, methods, standards or acts engaged in or approved
by a significant portion (which need not be a majority) of independent power
producers at such time with respect to large fossil-generating facilities
similar to the Project and owned or held under long-term lease by such
independent power producers. Prudent Generator Practice is not intended to be
limited to the
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optimum practice, method or act to the exclusion of all others, but rather is a
spectrum of possible practices, methods, standards or acts having due regard
for, among other things, manufacturers' warranties, engineering and operating
considerations, equipment used and requirements of governmental authorities and
the requirements of the Project Agreements.
Section 1.2 Other Capitalization. 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.
Section 1.3 Interpretation. Unless the context of this Agreement
otherwise requires, (a) words of any gender include each other gender; (b) words
using the singular or plural number also include the plural or singular number,
respectively; (c) the terms "hereof," "herein," "hereby" and derivative or
similar words refer to this entire Agreement; (d) the terms "Article" or
"Section" refer to the specified Article or Section of this Agreement; and (e)
any reference to the entirety or any part of any agreement or document shall
refer to any amendment, supplement or replacement of the same. Whenever this
Agreement refers to a number of days, such number shall refer to calendar days
unless business days are specified.
ARTICLE II
APPOINTEES; GENERAL COVENANTS OF THE PARTIES
Section 2.1 Appointment Processes.
(a) Unless otherwise agreed in writing by PP&L Montana and
MPC, each Appointee appointed pursuant to this Agreement shall (i) have
sufficient financial and/or operational experience with electric energy plants
similar to the Project, (ii) be an individual who is an employee of one of the
Parties to this Agreement, and (iii) serve in accordance with the applicable
terms and provisions of this Agreement and the Ownership Agreement.
(b) Subject to Section 17(c) of the Ownership Agreement,
during any period in which PP&L Montana (which for purposes of this Section
2.1(b) does not include any of PP&L Montana's successors or assigns) is the
Operator, PP&L Montana shall have the sole right and power to appoint the
Chairman of the Project Committee (the "Chairman Appointee"). The Chairman
Appointee, as such, shall not have the power to vote regarding any portion of
the Shared Vote.
(c) PP&L Montana shall appoint the individual and alternates
(the "PP&L Appointee") who shall be entitled to use the Shared Vote on PP&L
Montana's behalf under this Agreement and MPC shall appoint the individual and
alternates who shall be entitled to use the Shared Vote on MPC's behalf under
this Agreement (the "MPC Appointee").
(d) Notice of any appointment made pursuant to this Section
2.1 shall be delivered in writing not later than one business day prior to the
effective date of such
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appointment. Nothing in this Section 2.1 is intended to limit the Parties'
ability to agree in writing to alter the selection process for any Appointee.
Section 2.2 Appointee Obligations. During his or her term each
Appointee shall serve in good faith and act in accordance with this Agreement,
and the Chairman Appointee shall promptly provide each Party Appointee with
copies of all documents sent to members of the Project Committee regarding the
Project. If an Appointee breaches any of its material obligations under this
Agreement, such Appointee shall be removed by the appointing Party promptly
after receipt of written notice from the non-appointing Party, which notice
shall describe the breach. A replacement Appointee shall be selected in the
manner of selecting the Appointee set forth in Section 2.1.
Section 2.3 General Acknowledgments and Agreements. The Parties hereby
make the following acknowledgements and agreements:
(a) Wherever either Party's approval, consent or agreement is
required under this Agreement, it is understood that such approval,
consent or agreement shall not be unreasonably withheld, delayed or
conditioned unless this Agreement specifically provides that a
different standard should apply; provided that waivers shall not be
bound by this Section 2.3(a).
(b) Neither Party shall cause a Party Appointee to vote to
take or omit to take any action that would be likely to have the direct
or indirect effect of (i) conferring a benefit on Colstrip 3 without
also conferring a proportionate benefit on Colstrip 4 or (ii) imposing
a burden on Colstrip 4 without proportionately burdening Colstrip 3.
(c) The Parties shall maintain in confidence the
communications, discussions and deliberations with the Appointees and
between the Parties regarding the advice to, consultation with, and the
establishment of strategy and casting of votes with respect to the
Shared Vote; provided that (i) the obligation set forth herein shall
not be construed to prohibit disclosure to a Party's employees,
shareholders, directors, officers, advisors, agents, representatives or
lenders and (ii) the Parties may mutually agree to disclose some or all
of the communications, discussions or deliberations addressed hereby.
Nothing in this Section 2.3(c) shall constitute a waiver of, or
agreement not to assert, any attorney-client, work product, or other
privilege unless otherwise available with respect to a Party, its
Appointees (and, in the case of PP&L Montana, the Chairman Appointee)
and their separate deliberations and consultations.
(d) The Parties shall cooperate with one another in good faith
regarding the advice of and consultation with the Appointees, the
correct subject matter classification of Proposals hereunder and the
establishment of strategy and casting of votes with respect to MPC's
Colstrip 3 Project Share and MPC's Colstrip 4 Project Share. If any
Proposal can reasonably be expected to adversely affect either Party's
rights or obligations under this Agreement, then the Parties shall
consult in good faith and attempt to agree on a course of action to
take with respect to the Proposal. This covenant
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to cooperate includes, without limitation, the obligation to provide
the other Party with notice of any conflict or disagreement as soon as
reasonably practicable.
(e) Nothing contained herein shall prohibit an Appointee from
advancing any argument or taking any position at a Project Committee
meeting inconsistent with the official vote being cast by the Shared
Vote, and the Parties shall not interfere with an Appointee's efforts
to communicate with the Project Committee on any matter properly before
the Project Committee.
(f) Until PP&L Montana shall no longer be the Operator, the
Party Appointees selected pursuant to this Agreement, when casting the
Shared Vote, shall be considered the Operator's Committee member under
the Ownership Agreement (particularly Section 17 thereof).
(g) MPC's Colstrip 4 Project Share is subject to the terms and
provisions of the Colstrip 4 Leveraged Lease Documents and the Parties
acknowledge that pursuant to Section 24.1(b) of the Lease (as defined
in each of the Colstrip 4 Leveraged Lease Documents), the lessors
thereunder may, in certain instances, direct voting of the Shared Vote
if a Lease Default or Lease Event of Default has occurred and is
continuing.
(h) This Agreement does not apply to rights, votes, approvals,
consents, waivers or the like that are to be made or exercised directly
by Owners or Project Users under the Ownership Agreement (as opposed to
rights, votes, approvals, consents, waivers or the like designed to be
made or exercised by the members of Project Committee or the Project
Committee as a whole). The Party Appointees shall not have the power to
bind the Parties beyond their ability to cast the Shared Vote
hereunder; it being understood that Appointees may waive Objections but
do not, in capacities as such, have the power to waive any other rights
under this Agreement.
(i) With respect to Proposals that it may make in it its role
as Operator, PP&L Montana agrees that it shall promptly consult with
MPC in advance and in good faith regarding any Proposal to be
considered for action by the Project Committee.
(j) The Appointees have the full authority to act on behalf of
the Party that designated such Appointee; the action of an Appointee at
a Project Committee meeting (or through a written consent) shall bind
the Party and hold such Party responsible for all liabilities and
obligations arising out of such action (whether intentional,
unintentional or derivative) and the other Party shall be entitled to
rely on such action without further inquiry or investigation as to the
actual authority (or lack thereof) of such Appointee.
Section 2.4 Rights of Protected Persons. Each Appointee (collectively,
the "Protected Persons") may rely and shall be protected in acting and
refraining from action upon any
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instruction from the Party appointing such Protected Person. Each Protected
Person may consult with counsel (who may be internal counsel to the Party
appointing such Protected Person) and any advice of such counsel shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted to be taken by such Protected Person hereunder in good faith
and believed by such Protected Person to be authorized or within his or her
discretion, rights or powers conferred upon him or her by this Agreement.
Furthermore, each Party agrees that its exclusive remedy for a breach of this
Agreement shall be an action against the other Party in the manner permitted by
this Agreement.
ARTICLE III
THE VOTING PROCESS
Section 3.1 Voting Rights and Objections Generally.
(a) The Shared Vote shall be cast strictly in accordance with
this Agreement and furthermore shall be cast by one of the Party Appointees
depending on the subject matter of each Proposal. Objections shall be
communicated as soon as possible but in any event prior to the casting of an
official vote by the Project Committee as follows: (i) the Objection shall be
communicated verbally by telephone or in person to the other Party Appointee for
any Proposal received on the day of the Project Committee meeting in which such
Proposal is to be considered and (ii) the Objection shall be communicated in
writing delivered via facsimile or in person and verbally by telephone or in
person to the other Party Appointee for any Proposal received prior to the day
of the Project Committee meeting in which such Proposal is to be considered.
Subject to Section 3.1(c), the types of Objections which may be raised and the
manner in which the Shared Vote may be cast are set forth on the chart below. If
a Party Appointee is absent from a Project Committee meeting and appropriate
alternate arrangements consistent with the Ownership Agreement have not been
made (except for such absences due to an emergency or similar circumstances
beyond such Appointee's control), the other Party may cast the Shared Vote.
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VOTING RIGHTS IF NO
SUBJECT MATTER OBJECTION IS RAISED PERMITTED OBJECTIONS DEFAULT RESOLUTION AFTER AN OBJECTION IS RAISED
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Colstrip 3 PP&L Appointee casts Classification If a Classification Objection: The Proposal shall
Proposal the Shared Vote. Objection or Lease be re-classified as a Colstrip 4 Proposal or a
Default Objection. Mixed Proposal pursuant to MPC's instructions and
the Shared Vote shall be cast by the Party
entitled thereto, unless PP&L Montana contests the
Classification Objection under Article IV.
If a Lease Default Objection: MPC Appointee casts
the Shared Vote unless PP&L Montana contests the
Lease Default Objection under Article IV.
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VOTING RIGHTS IF NO
SUBJECT MATTER OBJECTION IS RAISED PERMITTED OBJECTIONS DEFAULT RESOLUTION AFTER AN OBJECTION IS RAISED
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Colstrip 4 MPC Appointee casts Classification The Proposal shall be re-classified as a Colstrip
Proposal the Shared Vote. Objection. 3 Proposal or a Mixed Proposal pursuant to PP&L
Montana's instructions and the Shared Vote shall
be cast by the Party entitled thereto, unless MPC
contests the Classification Objection under
Article IV.
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Mixed Proposal PP&L Appointee casts Classification If a Classification Objection: The Proposal shall
the Shared Vote. Objection, Lease be re-classified as a Colstrip 3 Proposal or a
Default Objection or Colstrip 4 Proposal pursuant to MPC's instructions
Prudency Objection. and the Shared Vote shall be cast by the Party
entitled thereto, unless PP&L Montana contests the
Classification Objection under Article IV.
If a Lease Default Objection: MPC Appointee casts
the Shared Vote unless PP&L Montana contests the
Lease Default Objection under Article IV.
If a Prudency Objection: MPC Appointee casts the
Shared Vote unless a valid Poll overrules the
Objection under Section 3.2. So long as a Poll
may be conducted, Article IV does not apply to
Prudency Objections.
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(b) If, despite the good faith efforts of both Parties
(including, without limitation, attempts by the Chairman Appointee, PP&L Montana
in its capacity as the Operator, the MPC Appointee and the PP&L Appointee to
delay the Project Committee vote and to hasten the dispute resolution process)
the Project Committee vote occurs prior to resolution of the validity of an
Objection pursuant to Article IV, the Shared Vote shall not be cast.
(c) If PP&L Montana (which, for purposes of this Section
3.1(c), does not include any of PP&L's successors or assigns) shall not be
entitled to participate in the selection or direction of the Chairman Appointee
or the PP&L Appointee under the terms and provisions of any financing documents
that encumber any of PP&L Montana's interest in the Shared Vote (except for the
Colstrip 4 Leveraged Lease Documents), Proposals shall be voted in accordance
with the provisions and chart set forth in Section 3.1(a) except that Mixed
Proposals shall be voted in accordance with the following chart:
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VOTING RIGHTS IF NO
SUBJECT MATTER OBJECTION IS RAISED PERMITTED OBJECTIONS DEFAULT RESOLUTION AFTER AN OBJECTION IS RAISED
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Mixed Proposal MPC Appointee casts Classification If a Classification Objection: The Proposal shall
the Shared Vote. Objection or Prudency be re-classified as a Colstrip 3 Proposal or a
Objection. Colstrip 4 Proposal pursuant to PP&L Montana's
instructions and the Shared Vote shall be cast by
the Party entitled thereto, unless MPC contests
the Classification Objection under Article IV.
If a Prudency Objection: PP&L Montana casts the
Shared Vote unless a valid Poll overrules the
Objection under Section 3.2. So long as a Poll
may be conducted, Article IV does not apply to
Prudency Objections.
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(d) Notwithstanding any other provision of this Agreement, the
Parties agree that, from the effectiveness of PP&L Montana's appointment as
Operator through the tenth anniversary date of such effectiveness, the Shared
Vote shall not be used in a manner to remove or substitute PP&L Montana as
Operator other than for Cause.
Section 3.2 The Conduct and Results of a Prudency Objection Poll.
(a) If a Party asserts a Prudency Objection, the non-objecting
Party shall request that the Project Committee conduct a Poll regarding such
Proposal as follows: (i) if the Prudency Objection is asserted on the day of or
during the Project Committee meeting in which the Proposal is to be considered,
the non-objecting Party shall request during the Project Committee meeting that
a Poll be conducted during such meeting and (ii) if the Prudency Objection is
asserted prior to the day of the Project Committee meeting in which the Proposal
is to be considered, the non-objecting Party shall give notice both
telephonically and by facsimile to the objecting Party that it will request that
a Poll be taken at the Project Committee meeting.
(b) A valid "Poll" is one in which the requisite Project
Committee members (including the Appointees selected pursuant to this Agreement)
together representing sufficient Project Shares to meet the minimum percentage
voting requirements under the Ownership Agreement present their good faith
indication of how they intend to vote on the Proposal being considered. For
purposes of conducting the Poll, (i) the Project Shares of MPC and PP&L Montana
shall be separately tallied for purposes of the Poll and not counted as a single
combined Shared Vote and (ii) for so long as PP&L Montana (which for purposes of
this clause (ii) does not include any of PP&L Montana's successors or assigns)
is the Operator, the PP&L Appointee (who shall be casting a Poll vote on behalf
of MPC's Colstrip 3 Project Share) shall be deemed the "Operator's member" under
the Ownership Agreement. Therefore, the results of a valid Poll shall present a
pure tally of the Project Users' positions with respect to a Proposal based on
each Project User's actual Project Share.
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(c) The official Shared Vote shall be cast to dispose of the
Proposal in a manner reflected by the Poll in light of the minimum percentage
voting requirements under the Ownership Agreement. The fact that a Project
Committee member casts an official vote that differs from its Poll vote shall
have no bearing on the official Shared Vote cast in accordance with this Section
3.2(c). The Shared Vote cast may be changed only upon the concurrence of both
Party Appointees and in accordance with the terms and provisions of the
Ownership Agreement.
(d) Where, through the successful exercise of an Objection, a
Party has cast the Shared Vote to reject a Proposal, such Party shall have the
sole right and responsibility to submit a Disapproval Statement, and the other
Party shall have no right to submit a Disapproval Statement representing the
Shared Vote relating to such rejected proposal. If in accordance with Section
3.1(b) the Shared Vote was not cast, the Parties shall attempt to submit a
Disapproval Statement that contains both Parties' positions on, and alternatives
with respect to, the Proposal. In all other situations, the Parties shall
cooperate in good faith to prepare and submit Disapproval Statements on behalf
of the Shared Vote that present positions and alternative proposals that are
agreeable to both Parties; it being the express preference of this Agreement
that a Disapproval Statement actually be submitted within the time periods
required under the Ownership Agreement.
ARTICLE IV
DISPUTE RESOLUTION
Section 4.1 Resolution of Disputes. All disputes between the Parties
shall be resolved in accordance with this Article IV; provided that although a
Party's assertion of an Objection shall not be considered a dispute subject to
this Article IV, the other Party may contest the validity of an Objection
(except for Prudency Objections, contests of which shall be resolved exclusively
pursuant to Section 3.2) asserted hereunder. The Parties agree to make a
diligent, good faith attempt to resolve all disputes before demanding
arbitration hereunder. Such good faith attempt shall include a meeting between
representatives of both Parties that are authorized to resolve the dispute,
which meeting shall occur no later than two (2) business days after receipt by
the intended Party of written notice of the dispute hereunder. The Parties
acknowledge that time is of the essence in resolving all disputes under this
Agreement.
Section 4.2 Binding Arbitration.
(a) If the dispute remains unresolved for two (2) business
days following the meeting described in Section 4.1, then either Party may
request the commencement of binding arbitration to resolve such dispute by
delivering written notice to the other Party. Subject to this Article IV, the
arbitration shall be conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association then in effect.
(b) No later than five (5) business days before the
arbitration, each Party shall submit to the arbitrator such Party's proposed
resolution of the dispute in writing, and the
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arbitrator shall be limited to selecting only one of the two proposed
resolutions. No arbitration shall last longer than one (1) business day and the
arbitrator shall be required to issue his or her final decision no later than
two (2) business days prior to the Project Committee meeting of which the
underlying Proposal will be considered. The arbitrator shall not have the power
to award any other damages, grant any other relief or vary the provisions of
this Agreement, and any decision or other order rendered by the arbitrator in
contravention of this Agreement shall be invalid and constitute grounds for
demanding a new arbitration.
(c) Each Party shall pay its own costs associated with the
arbitration, but the Parties shall share the costs of the arbitration proceeding
equally.
(d) Evidence concerning details of any settlement negotiations
prior to arbitration shall not be permitted. The Parties further undertake to
carry out without delay the provisions of any arbitral decision, and each agrees
that any such decision may be enforced by any competent tribunal.
(e) Unless otherwise agreed in writing, MPC and PP&L Montana
shall continue to perform their respective obligations hereunder during the
pendency of any proceeding by the Parties in accordance with this Article IV.
ARTICLE V
TERM & TERMINATION
Section 5.1 Term. This Agreement shall become effective as of the date
first written above and, subject to periodic suspension pursuant to Section 5.2,
shall continue in full force and effect until (a) the effective date of an
amendment to the Ownership Agreement that permits MPC's Colstrip 4 Project Share
to be voted separately and independently from MPC's Colstrip 3 Project Share or
(b) the occurrence of the Lessor Possession Date (under any of the Colstrip 4
Leveraged Lease Documents).
Section 5.2 Suspension. This Agreement shall be suspended automatically
for any period during which the lessors under the Colstrip 4 Leveraged Lease
Documents have exercised their rights pursuant to Section 24.1(b) of the Lease
(as defined thereunder); provided that (i) the Chairman Appointee's obligation
to deliver copies of documents as described in Section 2.2 (with the
understanding that during the suspension period, the term "Chairman Appointee"
is intended to describe the chairman of the Project Committee so long as such
Person has been appointed by PP&L Montana or MPC) and Article VII shall continue
in full force and effect during such suspension period and (ii) the remaining
provisions of this Agreement shall continue in full force and effect as such
provisions relate to performance by the Parties under this Agreement prior to
the commencement of such suspension period.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Each Party represents and warrants to the other Party that, as
of the Effective Date:
(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 obligation 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;
(d) such Party is in material compliance with all
laws and legal requirements applicable to its business; and
(e) such Party holds a fifteen percent (15%) Project
Share in the Project.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Assignment; Third Party Beneficiaries. A 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 non-assigning Party's
receipt of written evidence that each of the following conditions has been
satisfied: (a) the assigning Party shall be simultaneously transferring or
assigning a corresponding portion of its Project Share to such Assignee, (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 and (c) if a partial (but not
a full) assignment of this Agreement is being effected, arrangements regarding
the casting of the Shared Vote acceptable to the non-assigning Party shall be
agreed upon in writing
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(including, without limitation, by amending this Agreement). Except as
explicitly provided herein, 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 7.2 Specific Performance. The Parties hereby declare that it is
impossible to measure in money the damages that will accrue to a Party hereto by
reason of a failure to perform any of the obligations under this Agreement and
agree that the terms of this Agreement shall be specifically enforceable. If any
Party hereto institutes any action or proceeding to specifically enforce the
provisions hereof, the Party against whom such action or proceeding is brought
hereby waives the claim or defense therein that such Party has an adequate
remedy at law, and such Party shall not offer in any such action or proceeding
the claim or defense that such remedy at law exists.
Section 7.3 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 7.4 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 7.5 Notices and Communications.
(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 prior written notice to the other Party pursuant to this Section 7.5.
Section 7.6 Amendments and Waivers. This Agreement may be amended,
supplemented or otherwise modified only by a writing executed and delivered by
each Party. 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
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Agreement preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.
Section 7.7 Further Assurances; Cooperation in Seeking Amendment.
(a) Each of the Parties agrees to perform all such acts
(including executing and delivering such instruments and documents) as
reasonably may be requested by the other Party to fully effect the intent and
each and all of the purposes of this Agreement.
(b) The Parties agree to cooperate and use commercially
reasonable efforts to seek an amendment of the Ownership Agreement that will
permit MPC's Colstrip 4 Project Share to be voted separately and independently
from MPC's Colstrip 3 Project Share.
Section 7.8 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 7.9 Headings. The article and section headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 7.10 Survival. The representations and warranties set forth in
Article VI shall survive the Effective Date.
Section 7.11 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be considered an original, but all of which
together shall constitute a single instrument.
Section 7.12 Contract Only, etc. This Agreement creates a contractual
relationship between the Parties and does not give rise to any fiduciary,
quasi-fiduciary, partnership or other special relationship which would result in
the implication of rights, duties or standards of care or performance other than
such rights, duties and standards as would attend a contract between
sophisticated commercial parties each represented by separate counsel. Except as
expressly set forth herein, nothing in this Agreement is intended to limit or
abridge PP&L Montana's rights, interests, responsibilities and liabilities as
Operator.
[SIGNATURES FOLLOW]
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IN WITNESS WHEREOF, each of the Parties has executed this
Project Committee Vote Sharing Agreement as of the Effective Date.
THE MONTANA POWER COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Title: Executive Vice President
---------------------------------
Addresses for Notices:
The Montana Power Company
Energy Supply Division
▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Executive Vice President and
Chief Operating Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
With a copy of written notices to:
The Montana Power Company
▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
PP&L MONTANA, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Title: President
---------------------------------
Address for Notices:
PP&L Montana, LLC
US Bank Building
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇