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MUTUAL GENERAL RELEASE AND AGREEMENT
THIS MUTUAL GENERAL RELEASE AND AGREEMENT ("Release") dated as of July
1, 1998, by and between NIAGARA MOHAWK POWER CORPORATION, a New York corporation
("NMPC"), and SELKIRK COGEN PARTNERS, L.P., a Delaware limited partnership
("Selkirk"). Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to such terms in the Master Restructuring
Agreement (as hereinafter defined). (Selkirk and NMPC are collectively referred
to herein as the "Parties" and individually referred to as a "Party.")
RECITALS
(A) NMPC and Selkirk are parties to, among other agreements, a certain
power purchase agreement described on Schedule 1 hereto (referred to herein as
the "Existing PPA") pursuant to which NMPC purchases power produced by Selkirk's
approximately 79.9 MW co-generation facility located in Selkirk, New York (the
"Project"); and
(B) NMPC and Selkirk, among others, have entered into a certain Master
Restructuring Agreement, dated as of July 9, 1997, as amended (the "Master
Restructuring Agreement" or "MRA"), pursuant to Sections 8.8 and 9.8 of which
NMPC and the Selkirk have agreed to execute and deliver this Release; and
(C) NMPC and Selkirk have modified the terms of the Existing PPA by
entering into an Amended and Restated Agreement dated as of July 1, 1998
("Restated Contract") in accordance with Section 3.2 of the MRA, effective as of
the Effective Time (subject to Selkirk's right to delay the effectiveness of the
Restructuring with respect to it pursuant to Section 8.15 of the MRA) (the
Effective Time as it may be extended with respect to Selkirk, the "Selkirk
Effective Time").
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the Parties hereby agree as follows, in each case effective
as of the Selkirk Effective Time:
1. Release by the Parties. NMPC and Selkirk hereby agree that
effective as of Selkirk Effective Time, without any further notice or action on
the part of NMPC or Selkirk and except as set forth in Section 2 hereof, (a) the
Existing PPA shall be irrevocably amended and restated by the Restated
Agreement; (b) all rights and privileges granted, accruing or inuring to each
Party pursuant to the Existing PPA shall be irrevocably superseded by the
Restated Agreement; (c) all obligations and duties owed or required by the
Existing PPA to be performed for or on behalf of one Party by any other Party
thereto shall be irrevocably waived and released; and (d) each Party to the
Existing PPA and its respective predecessors and successors in interest, agents,
directors, officers, partners, trustees, employees and affiliates, shall be
irrevocably released and forever discharged from
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all manner of actions, causes of action, suits, debts, sums of money, accounts,
reckonings, bonds, bills, covenants, contracts, controversies, agreements,
judgments claims and demands whatsoever, in law or equity, known or unknown,
which any other Party ever had, now has or hereafter can, shall or may have,
based upon or by reason of any matter, cause or thing related to or arising out
of the Existing PPA. NMPC hereby acknowledges and agrees that the Consent and
Agreement, dated as of October 23, 1992 (the "Consent"), among NMPC, Selkirk and
the bank party thereto, as confirmed by the Confirmation Agreement, effective
May 9, 1994 (the "Confirmation"), among NMPC, Selkirk and the entities thereto,
shall continue in effect with respect to the Restated Agreement and NMPC shall
execute and deliver such further documentation as Selkirk may reasonably request
evidencing the foregoing in connection with the effectiveness of the
Restructuring for Selkirk. NMPC hereby consents to the assignment of those
provisions of the MRA which by the terms of the MRA survive the Consummation
Date until fully performed (the "MRA Surviving Provisions") and this Release by
Selkirk to Banker's Trust Company, as Collateral Agent, as security under
Selkirk's financing agreements and agrees, for the benefit of the Collateral
Agent and for the purposes of the Consent and the Confirmation, that each of the
MRA Surviving Provisions and this Release shall be deemed to be an Assigned
Agreement (as defined in the Consent and the Confirmation). Selkirk hereby
represents and warrants to NMPC that, upon Selkirk's delivery of notice to NMPC
that the Indenture Approval has been obtained, the amendment and restatement of
the Existing PPA by the Restated PPA and the termination of the License
Agreement, dated October 23, 1992, between Selkirk and NMPC will not be in
conflict with and will not constitute, with or without the passage of time or
giving of notice, or both, a default under Selkirk's Trust Indenture and the
other financing agreements related thereto.
2. Certain Claims Not Released. Nothing contained herein shall
constitute a waiver or release of any claims, liabilities or obligations (i)
arising out of or in connection with this Release, (ii) arising out of or in
connection with any litigation or regulatory proceedings which are not to be
dismissed and withdrawn (or effectively withdrawn) by NMPC or Selkirk pursuant
to Sections 8.8(b) and 9.8(b) of the MRA, (iii) unless dismissed or withdrawn
pursuant to the Section 8.8(b) or 9.8(b) of the MRA, arising out of or in
connection with any payment due to Selkirk whether or not disputed, for any
power or services purchased by NMPC, or any payment due to NMPC whether or not
disputed, for any services provided by NMPC, pursuant to the Existing PPA,
provided that if such payment relates to any period prior to May 10, 1997,
Selkirk's or NMPC's, as the case may be, entitlement to such payment shall have
been set forth in a writing given to NMPC or Selkirk, as the case may be, on or
before June 15, 1997 and (iv) arising pursuant to Section 8.15 and Section
12.4(d) or any other provision of the MRA which by the terms of the MRA survive
the Consummation Date until fully performed. NMPC and Selkirk acknowledge and
agree that in accordance with Section 1 hereof all claims, liabilities and
obligations relating to tracking, adjustment or advance payment account
provisions under the Existing PPA (including without limitation the Adjustment
Account, the Tax Carrying Charge Account or the Performance Account (as each
such term is defined in the Existing PPA)) shall be extinguished as of the
Selkirk Effective Time, any and all letters of credit provided by Selkirk in
connection with the Existing PPA shall be returned to Selkirk on the
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Selkirk Effective Time, and the License Agreement, dated as of October 23, 1992,
entered into by Selkirk and NMPC in accordance with the Existing PPA shall be
deemed terminated as of the Selkirk Effective Time.
3. Reconciliation of Certain Amounts. Pursuant to Section 8.15 of the
MRA, the Parties shall use the methodology set forth in Schedule 2, to
simultaneously reconcile between them in cash on and as of the Selkirk Effective
Time any payments made pursuant to the Existing PPA which are in excess of or
less than payments that would have been made pursuant to the Restated Contract
had such Restated Contract been in effect from July 1, 1998 until the Selkirk
Effective Time.
4. Amendments. This Release may not be amended except by an instrument
in writing and signed by the Party against whom such amendment is sought to be
enforced.
5. Successors and Assigns. The terms and conditions of this Release
shall inure to the benefit of and be binding upon the respective successors and
assigns of the Parties hereto.
6. Governing Law. This Release, including the validity hereof and the
rights and obligations of the Parties hereunder, and all amendments and
supplements hereof and all waivers and consents hereunder, shall be construed in
accordance with and governed by the domestic substantive laws of the State of
New York without giving effect to any choice of law or conflicts of law
provision or rule that would cause the application of the domestic substantive
laws of any other jurisdiction.
7. Severability. If any provisions of this Release as applied to any
part or to any circumstance shall be adjudged by a court to be invalid or
unenforceable, the same shall in no way affect any other provision of this
Release, the application of such provision in any other circumstances or the
validity or enforceability of this Release.
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IN WITNESS WHEREOF, the Parties hereto have entered into this Mutual
General Release and Agreement as of the date first above written.
NIAGARA MOHAWK POWER CORPORATION
By: /s/Clement E. Nadeau
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Its: Vice President
SELKIRK COGEN PARTNERS, L.P.
By: JMC Selkirk, Inc., managing general partner
By: /s/George J. Grunbeck
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Its: Vice President
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