Exhibit 10(b)
EQUITY CONTRIBUTION AGREEMENT
EQUITY CONTRIBUTION AGREEMENT (this "Agreement") dated as of
October 31, 1998 by and among PP&L Global, Inc. ("Purchaser"),
PP&L Resources, Inc. ("Parent"), and The Montana Power Company
("Seller").
R E C I T A L S
WHEREAS, Purchaser and Seller are parties to that certain
Asset Purchase Agreement, dated as of the date hereof (the
"Purchase Agreement");
WHEREAS, Purchaser is directly wholly-owned by Parent;
NOW, THEREFORE, in consideration of the premises and as an
inducement for Seller to enter into the Purchase Agreement, the
parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used herein and
not otherwise defined herein shall have the respective meanings
given to them in the Purchase Agreement.
Section 2. Equity Contribution.
(a) Seller may, in its sole discretion and without the
concurrence of Purchaser or any of its Affiliates, give written
notice to be received by Parent (i) on a date that is six (6)
Business Days prior to the Closing Date (the "Notice Date"),
which notice shall certify that, as of the Notice Date, the
Montana Conditions are satisfied and that, if the Closing were
to occur on the Notice Date, Seller would be prepared to satisfy
the conditions to Closing that are solely within the control of
Seller; and (ii) on a date that is six (6) Business Days prior
to the Closing Date under either of the Portland Purchase
Agreement or the Puget Purchase Agreement (as the term "Closing
Date" is defined under each of those agreements) (an "Additional
Notice Date"), which notice shall certify that Seller has been
notified by Portland and/or Puget, as applicable that, as of any
such Additional Notice Date, the Portland Conditions and/or the
Puget Conditions, as applicable, are satisfied and that, if the
Closing were to occur on the Notice Date, Portland and/or Puget,
as applicable, would be prepared to satisfy the conditions to
Closing that are solely within the control of such party.
Parent hereby irrevocably promises and agrees that, upon receipt
of the notice referred to in clause (i) of the preceding
sentence, Parent will make or cause to be made, on the date of
the Closing, a contribution in immediately available funds to
Purchaser in the amount of the Base Purchase Price, adjusted to
take into account additional Excluded Assets, if any, pursuant
to Section 1.10 of the Purchase Agreement and that, upon receipt
of any notice referred to in clause (ii) of the preceding
sentence, Parent will make or cause to be made, on the date of
the Closing under the Portland Purchase Agreement or the Puget
Purchase Agreement, as applicable, a contribution in immediately
available Funds in the amount of the Puget Payment Amount, the
Portland Payment Amount or the Combined Payment Amount, as
applicable, pursuant to Section 1.05(b) of the Purchase
Agreement (the amount required to be contributed by Parent
pursuant to each individual notice referred to in clauses (i)
and (ii) of the preceding sentence is sometimes hereinafter
referred to as the "Required Contribution Amount").
(b) If Purchaser breaches its obligation to effect the
Closing as and when required by the Purchase Agreement (or any
Closing under the Portland Purchase Agreement or the Puget
Purchase Agreement as and when required under such agreements),
and, if as a result thereof, Purchaser is the subject of a final
and binding order of a court of competent jurisdiction
obligating it to pay any damages, costs, and expenses incurred
by Seller (a "Liability"), Seller may, in its sole discretion
and without the concurrence of Purchaser or any of its
Affiliates, give written notice to Parent that such Liability
was incurred. Parent irrevocably promises and agrees that it
shall make or cause to be made a contribution in immediately
available funds to Purchaser within five (5) Business Days after
receipt of such notice in an amount sufficient for Purchaser to
fully satisfy and discharge the Liability up to but not to
exceed the applicable Required Contribution Amount.
(c) If a court of competent jurisdiction enters a final
and binding order to the effect that Seller was not entitled to
give any notice provided for in subsection (a) or (b) hereof,
then Seller shall be liable to pay Parent, as liquidated damages
and in full satisfaction of any claim of Purchaser or any of its
Affiliates arising out of such notice or order insofar as such
order relates to Seller giving such notice, an amount equal to
the documented out-of-pocket costs of Parent (including, without
limitation, Parent's cost of capital after giving effect to
related income taxes) incurred in connection with Parent's
contribution (or arrangements made to cause such contribution)
to Purchaser as a result of such wrongful notice by Seller.
(d) Notwithstanding any other provision of this Agreement
to the contrary, Parent shall have no obligation to make or
cause to be made any contribution to Purchaser under this
Agreement to the extent its aggregate contributions to Purchaser
made or cause to be made as a result of a notice given by Seller
hereunder or otherwise contributed (provided such funds have
been segregated in accordance with Section 4 hereunder or are
otherwise available for payment by Purchaser of the Purchase
Price under the Purchase Agreement) equal or exceed the
aggregate of the Required Contribution Amounts.
(e) Any payments made or cause to be made by Parent
directly to Seller in satisfaction of Parent's obligations to
make or cause to be made a contribution to Purchaser hereunder
shall be deemed to be on behalf of, and to satisfy the
obligations of, Purchaser to Seller under the Purchase Agreement
(to the extent of the amount paid or caused to be paid by
Parent).
(f) If, prior to receipt of a notice from Seller
requesting a contribution to Purchaser, Parent makes or causes
to be made a contribution to Purchaser as contemplated herein,
it shall promptly notify Seller in writing of such contribution,
which notice shall state that such contribution has been
segregated as provided in Section 4 herein.
(g) Upon written request of Seller given to Purchaser at
any time after Parent has made or caused to be made a
contribution to Purchaser contemplated herein, Purchaser agrees
to return such contribution to Parent.
(h) If, following the making by Parent of a Required
Contribution Amount hereunder, the Closing in respect of which
such contribution was made fails to occur as scheduled (other
than any such failure caused solely by a breach by Purchaser of
its obligation to effect such Closing), any Funds so contributed
to Purchaser may be returned to Parent; provided, that this
Agreement shall continue in effect until termination in
accordance with the provisions of Section 5 hereof.
Section 3. Representations and Warranties.
(a) Parent and Purchaser represent and warrant to Seller
as follows:
(i) Each of Parent and Purchaser is a corporation,
duly organized, validly existing and in good standing under the
laws of Commonwealth of Pennsylvania and has full corporate
power and authority to enter into this Agreement and to perform
its obligations hereunder.
(ii) The execution and delivery by each of Parent and
Purchaser of this Agreement, and the performance of its
obligations hereunder, have been duly authorized by all
necessary corporate action on the part of Parent and Purchaser,
as the case may be.
(iii) Each of Parent and Purchaser has duly executed
and delivered this Agreement. Assuming due authorization,
execution and delivery of this Agreement by Seller, this
Agreement constitutes the valid and binding obligation of each
of Parent and Purchaser, enforceable in accordance with its
terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws of general applicability affecting the enforcement
of creditors' rights and the application of general principles
of equity.
(iv) All consents, authorizations and other approvals
of any governmental authority which are necessary for the
execution and delivery by each of Parent and Purchaser of this
Agreement and the performance by it of its obligations hereunder
have been obtained and are in full force and effect, are final
and not subject to any appeal.
(v) Execution, delivery and performance by Parent of
this Agreement will not conflict with or result in a violation
or default under any contract, agreement or order of any court
or regulatory authority binding upon Parent or any of its
Affiliates.
(b) Seller represents and warrants to Parent as follows:
(i) Seller is a corporation, duly organized, validly
existing and in good standing under the laws of the State of
Montana, and has full corporate power and authority to enter
into this Agreement and to perform its obligations hereunder.
(ii) The execution an delivery by Seller of this
Agreement, and the performance of its obligations hereunder,
have been duly authorized by all necessary corporate action on
the part of Seller.
(iii) Seller has duly executed and delivered this
Agreement. Assuming due authorization, execution and delivery
of this Agreement by Purchaser and Parent, this Agreement
constitutes the valid and binding obligation of Seller,
enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general
applicability affecting the enforcement of creditors' rights and
the application of general principles of equity.
(iv) All consents, authorizations and other approvals
of any governmental authority which are necessary for the
execution and delivery by Seller of this Agreement and the
performance by Seller of its obligations hereunder have been
obtained and are in full force and effect, are final and not
subject to any appeal.
(v) Execution, delivery and performance by Seller of
this Agreement will not conflict with or result in a violation
or default under any contract, agreement or order of any court
or regulatory authority binding upon Seller or any of its
Affiliates.
Section 4. Restriction on Use. Purchaser shall segregate
from its general funds any contributions made or caused to be
made by Parent hereunder and shall use such funds for the
purpose, and only for the purpose, of satisfying its obligations
to Seller under the Purchase Agreement. Such contribution shall
be placed in a segregated account at an independent financial
institution, the name of which account makes reference to the
restrictions contained herein.
Section 5. Termination. The obligation of Parent under
this Agreement shall terminate upon the earliest to occur of:
(a) contribution made or caused to be made by Parent
to Purchaser of an amount equal to or exceeding the aggregate of
the Required Contribution Amounts in response to a notices given
by Seller hereunder or otherwise contributed (provided such
funds have been segregated in accordance with Section 4 or are
otherwise available for payment by Purchaser of the Purchase
Price under the Purchase Agreement and any necessary notice has
been given pursuant to Section 2(f));
(b) five business days after notice of termination of
the Purchase Agreement is given pursuant to Article XI thereof,
unless prior to the close of business on the fifth business day
after such notice Parent receives written notice from Purchaser
or Seller that either of them in good faith believes that the
Purchase Agreement is still in full force and effect or has been
improperly terminated, and that Seller is actively pursuing a
Liability claim, in which case this Agreement shall terminate
upon the settlement or other determination of such claim in
accordance with Section 2(b) hereof and the making of the
required contribution by or caused by Parent; or
(c) the occurrence of the Closing under the Purchase
Agreement.
Section 6. Miscellaneous
(a) This Agreement shall be binding upon, shall inure
to the benefit of, and shall be enforceable by, the parties
hereto and their respective successors and permitted assigns.
In the event that Purchaser assigns its rights under the
Purchase Agreement to a special purpose corporation, then the
term "Purchaser" herein shall refer to such special purpose
corporation and Parent shall make or cause to be made its
required contribution hereunder directly to such special purpose
corporation. Seller shall be entitled to enforce the
obligations of Parent hereunder without the concurrence of
Purchaser and regardless of any claims by Purchaser against
Seller, including any claims under, or the satisfaction or non-
satisfaction of any obligations of Seller under the Purchase
Agreement. Neither this Agreement nor any right hereunder may
be assigned by any party without the prior written consent of
the parties hereto, which consent (except in the case of a
transfer by Parent of its obligations hereunder) shall not be
unreasonably withheld.
(b) This Agreement contains the entire understanding
of the parties with respect to the matters herein and supersedes
all prior agreements and understandings between the parties with
respect to the subject matter hereof.
(c) All notices and other communications required or
permitted by this Agreement or by law to be served upon or given
to a party hereto by any other party hereto shall be addressed
as provided in the Purchase Agreement and, if to Parent, to the
address for notices set forth beneath Parent's signature below.
(d) This Agreement may not be amended or otherwise
modified except by a written agreement signed by each party
hereto.
(e) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH, AND GOVERNED BY, THE LAWS OF THE NEW YORK EXCLUDING ITS
CONFLICTS OF LAWS PROVISIONS.
(f) If any provision of this Agreement shall be
unenforceable, void or otherwise contrary to law, such provision
shall in no manner operate to render any other provision of the
Agreement unenforceable, invalid or contrary to law, and this
Agreement shall continue to be operative and enforceable in
accordance with the remaining terms and provisions hereof.
(g) The terms, conditions, covenants, representations
and warranties hereof may be waived only by a written instrument
executed by the party waiving compliance. The failure of a
party at any time or from time to time to require performance of
any provisions hereof shall in no manner affect its rights at a
later time to enforce the same. No waiver by a party of any
condition or any breach of term, covenant, representation or
warranty contained in this Agreement in any one or more
instances shall be deemed to be, or be construed as, a further
or continuing waiver of any such condition or breach of any
term, covenant, representation or warranty.
(h) No person other than the parties hereto, or their
successors or permitted assigns shall have any rights hereunder.
(i) The term "Montana Conditions" means all
conditions to the obligations of Seller and Purchaser to
consummate the Closing as set forth in Articles VI and VII of
the Purchase Agreement (except those conditions solely within
the control of the Seller or Purchaser). The term "Puget
Conditions" means all conditions to the obligations of Puget and
Purchaser under the Puget Asset Purchase Agreement (except those
conditions solely within the control of the Puget or Purchaser).
The term "Portland Conditions" means all conditions to the
obligations of Portland and Purchaser under the Portland Asset
Purchase Agreement (except those conditions solely within the
control of the Portland or Purchaser).
(j) This Agreement may be signed in counterparts,
each of which shall be deemed an original and all of which
together shall constitute one and the same Agreement.
PP&L RESOURCES, INC.
By: ___________________________
Name: Xxxx X. Xxxxxx
Title: Senior Vice-President &
Chief Financial Officer
Address for Notices: Xxx Xxxxx Xxxxx
Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
PP&L GLOBAL, INC.
By: ____________________________
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
Address for Notices: 00000 Xxxxxx
Xxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
MONTANA POWER COMPANY
By: ____________________________
Name: Xxxxx X. Xxxx
Title: Vice President
Address for Notices: 00 Xxxx Xxxxxxxx
Xxxxxx
Xxxxx, Xxxxxxx 00000-0000
