Document:

Exhibit 10.2

 

CONFIDENTIAL
SETTLEMENT AGREEMENT AND MUTUAL RELEASE

 

I.                                         Parties

 

The Parties to this Settlement Agreement and Mutual Release (“Agreement”)
are:

 

A.                                   Atlantic Richfield Company (“AR”), a corporation
incorporated in Delaware and having its principal place of business in
Illinois, and

 

B.                                     NorthWestern Corporation (“NOR”), a corporation
incorporated in Delaware and having its principal place of business in South
Dakota.

 

C.                                     Clark Fork and Blackfoot, LLC (the “LLC”), a
Delaware limited liability company having its principal place of business in
Montana.

 

II.                                     Effective Date

 

This Agreement is effective on September 10, 2003.

 

III.                                 Recitals

 

WHEREAS, NOR, or its wholly owned subsidiary, the LLC, has owned and
operated since February 15, 2002, a Federal Energy Regulatory Commission (“FERC”)
licensed hydroelectric dam at the confluence of the Clark Fork River and
Blackfoot River at Milltown, Montana, known both as the Milltown Dam and the
Milltown Project.

 

WHEREAS, in the period after the construction of the Milltown Dam,
which occurred between 1906 and 1908, several million cubic yards of sediments
from upstream sources, including without limitation mining and milling
operations, settled in the Milltown Reservoir, located behind the Milltown Dam.

 

WHEREAS, AR has been identified as a potentially responsible party (“PRP”)
by the United States Environmental Protection Agency (“EPA”) and the State of
Montana Department of Environmental Quality (“DEQ”) for the alleged release of
wastes containing hazardous substances from upstream mining and mineral
processing

 

 

operations near Butte and Anaconda, Montana, which are alleged to have
contaminated on a continuing basis, the Clark Fork River and the Milltown
Reservoir and associated alluvial groundwater with hazardous substances
including arsenic, cadmium, copper, lead and zinc.

 

WHEREAS, AR has denied it is liable for such alleged releases.

 

WHEREAS, the Milltown Reservoir and the Clark Fork River upstream of
the Milltown Reservoir were listed as a National Priorities List Site (the “Milltown
Site”) by publication in the Federal Register on September 8, 1983, at 48
Fed. Reg. 40658.  The Milltown Reservoir
Sediments Operable Unit and the Water Supply Operable Unit are separate,
operable units of the Milltown Site.

 

WHEREAS, since 1983, AR, at the direction of the EPA and DEQ, has
extensively studied the sediments, groundwater and surface water at and in the
vicinity of the Milltown Reservoir as part of a remedial investigation and
feasibility study that was issued in final form in November, 2002.  EPA issued the Proposed Plan for remediation
of the Milltown Reservoir Sediments Operable Unit on April 14, 2003, and
the proposed remedy requires, in part, removal of approximately 2.6 million
cubic yards of sediments from the Milltown Reservoir, removal of the spillway
and radial gate section of the Milltown Dam, and subsequent periodic
monitoring and review of remedy effectiveness. 
It is expected that EPA will issue a Record of Decision for the Milltown
Site during the first half of 2004.

 

WHEREAS, in the course of a repair project during 1988 and 1989 carried
out in compliance with the FERC Milltown Project license, Montana Power Company
removed contaminated sediments from the Milltown Reservoir and placed those
sediments in the Upland Disposal Area constructed by the Montana Power Company
for that purpose.

 

WHEREAS, AR and EPA have alleged that as a result of those activities,
NOR is a PRP with respect to the Milltown Site.

 

2

 

WHEREAS, AR has also alleged that NOR is liable as an owner and
operator of the Milltown Project and that, in particular, NOR’s periodic
drawdowns of the Milltown Reservoir to perform maintenance activities resulted
in the exacerbation of the Reservoir’s contamination and the release of
hazardous substances downstream of the Milltown Dam. NOR denies all such
allegations and asserts that it has performed all dam maintenance activities in
accordance with its FERC license and that section 118(G) of the
Superfund Amendments and Reauthorization Act provides it with an exemption from
CERCLA liability for releases related to the ownership and operation of the
Milltown Project, including liability based on such maintenance activities, and
that a similar provision of CECRA provides an exemption from liability for such
releases under that statute.

 

WHEREAS, both AR and NOR have asserted that the other Party is a party
liable for the costs of remediating the Milltown Site and for any other costs
or damages resulting from the presence of mine wastes in the Clark Fork River
or Milltown Reservoir and each has denied such liability.

 

WHEREAS, on April 12, 2002, FERC extended the term of NOR’s
license through December 31, 2007 (FERC Docket No. P-2543-053),
and NOR intends to continue operating the Milltown Project pursuant to the
terms and conditions of the existing license unless and until cessation is
required by the Milltown Site RD/RA and NOR surrenders that license.  On January 27, 2003, NOR requested that
FERC extend the termination date of its license from December 31, 2007, to
December 31, 2008.  This application
is currently pending (FERC Docket No. P-2543-059).

 

WHEREAS, AR and NOR believe that both EPA, in administering the CERCLA
remediation process, and FERC, in considering the fate of the Milltown Project
through the licensing process, should adopt a coordinated approach in
implementing the proposed partial removal of sediments from the Milltown
Reservoir, removal of the Milltown Dam spillway and radial gate, reclamation of
the reservoir lands and river channel areas, decommissioning of the Milltown
Project, and surrender of NOR’s license for the Milltown Project.

 

3

 

 

WHEREAS, at the time this Agreement is signed, AR and NOR are
negotiating the Milltown Consent Decree with the United States, the State and
The Confederated Salish and Kootenai Tribes of the Flathead Nation (“Tribes”)
to resolve issues related to AR’s and NOR’s alleged liability for the Milltown
Site, including claims for damages against NOR asserted by the State and the
Tribe, and to provide for coordination of implementation of the ROD at such
Site with FERC’s regulation of the Milltown Project and the State’s
implementation of its Draft Conceptual Plan for Restoration of the Clark Fork
River and Blackfoot River Near Milltown Dam (“Conceptual Restoration Plan”).

 

WHEREAS, AR and NOR wish to enter into this Agreement in order to
resolve their disagreements, including any claims for contribution, satisfy, in
full, NOR’s contribution to Milltown Site past and future RD/RA costs, and
establish norms for cooperation between themselves and with other parties
regarding the future of the Milltown Project, insurance coverage for Milltown
Site RD/RA and other related matters.

 

IV.                                Definitions

 

A.                                   “AIG” means American International Group, Inc.,
American International Specialty Lines Insurance Co. (“AISLIC”), and any parent
companies, subsidiaries, affiliates, predecessors, successors, transferees, or
assigns of American International Group, Inc.

 

B.                                     “Agreement” means this Confidential Settlement Agreement and Mutual Release
and all appendices attached hereto.

 

C.                                     “AR” means the Atlantic Richfield Company and any
affiliates, parent companies, predecessors, successors, transferees, assigns or
shareholders of Atlantic Richfield Company.

 

D.                                    “CECRA” means the Montana Comprehensive
Environmental Cleanup and Responsibility Act, as amended, MCA §§ 75-10-701
et seq.

 

4

 

E.                                      “CERCLA” means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§ 9601-9675.

 

F.                                      “Clean-Up” shall have the same meaning as “Clean-Up”
is defined by the Milltown Policy, attached hereto as Attachment B to this
Agreement.

 

G.                                     “Conceptual Restoration Plan” means the Conceptual
Restoration Plan for Restoration of the Clark Fork River and Blackfoot River
Near Milltown Dam transmitted to NOR by the State of Montana on February 28,
2003.

 

H.                                    “Day” means a calendar day unless expressly stated
to be a working day.  In computing any
period of time under this Agreement, where the last day would fall on a
Saturday, Sunday, or State or Federal holiday, the period shall run until the
close of business of the next working day.

 

I.                                         “DEQ” means the Montana Department of Environmental
Quality and any predecessor or successor departments or agencies of the State
of Montana.

 

J.                                        “Downstream Response Costs” means costs associated
with any action related to environmental contamination or alleged environmental
contamination of the Clark Fork River, or other associated areas, located
downstream of the Milltown Site, including but not limited to, cleanup and
other costs of response, actual or punitive civil damages or criminal
penalties, and costs related to any other form of relief awarded by any
competent authority with jurisdiction over the Parties and such matters,
including injunctive relief.

 

K.                                    “Envirocon” means Envirocon, Inc., and any
predecessors, successors, transferees, or assigns.

 

L.                                      “EPA” means the United States Environmental
Protection Agency and any successor departments or agencies of the United
States.

 

5

 

M.                                 “FERC” means the Federal Energy Regulatory
Commission and any predecessor or successor commissions, agencies or
departments of the United States.

 

N.                                    “Milltown Additional Response Costs” means costs
associated with the Milltown Site RD/RA pursuant to any “round-robin” cost
sharing provisions of the Milltown CD or costs not within the coverage of any
cost cap insurance policy purchased by AR for the Milltown Site.  “Milltown Additional Response Costs” does not
include, among other things, costs incurred as a result of any violation by NOR
of any terms, conditions or requirements contained in the Milltown CD, nor does
the term include any costs for which there is not coverage under the residual
liability provisions of an insurance-based settlement where coverage for such
liability is not available and the lack of availability is due primarily to NOR’s
conduct.

 

O.                                    “Milltown CD Effective Date” means 60 days from the
date that the District Court for the District of Montana enters the Milltown
Consent Decree, unless an appeal of the entry and judgment is filed during the
60-day period; if an appeal is taken, the “Milltown CD Effective Date”
means the date on which the District Court’s judgment is affirmed, with no
right of further appeal.

 

P.                                      “Milltown Consent Decree” and “Milltown CD” means a
consent decree concerning the Milltown Site RD/RA and related issues, including
claims against NOR for natural resource damages (“NRD”), entered in the matter
of the United States v. Atlantic Richfield
Co., Civil Action No. CV-89-039-BU-SEH (D.
Mont.), among the United States, the State, the Tribes, AR, and NOR.

 

Q.                                    “Milltown Future Response Costs” means all costs,
other than Milltown Project Costs, paid or incurred by AR, NOR, EPA and DEQ on
or after August 1, 2002, related to Milltown Site response actions prior
to issuance

 

6

 

of the Milltown ROD, all response costs
incurred at or in connection with the Milltown Site by EPA and DEQ before the
Milltown CD Effective Date but paid after such Effective Date, and all costs
incurred in the performance of Milltown Site RD/RA, including wetland
mitigation required by the Milltown ROD.

 

R.                                     “Milltown Site” means the Water Supply Operable Unit
and the Milltown Reservoir Sediments Operable Unit of the Milltown
Reservoir/Clark Fork River National Priorities List Site, and any other
geographic area where Milltown Site RD/RA is required.

 

S.                                      “Milltown Past Response Costs” means all costs
incurred by AR, NOR, EPA and DEQ before August 1, 2002, to conduct
response actions at the Milltown Site.

 

T.                                     “Milltown Policy” means the insurance policy issued
by AIG related to the Milltown Site, attached hereto as Attachment B to this
Agreement.

 

U.                                    “Milltown Project” and “Project” means the
hydroelectric generating dam and associated facilities and appurtenant real and
personal property licensed by FERC under license No. 2543 located at the
confluence of the Clark Fork River and the Blackfoot River near Milltown,
Montana.

 

V.                                     “Milltown Project Costs” means all costs, including
any costs of financial assurance, associated with any activity required by
federal, state or local law relating to administration, operation and
maintenance of the Milltown Project, and appurtenant real and personal property
presently owned and operated by NOR, except activities listed on Attachment A
hereto.

 

W.                                “Milltown Record of Decision” and “Milltown ROD” means the record of
decision to be issued by EPA, in which the final remedial action for the
Milltown Site will be set forth, and all attachments, explanations of
significant differences, and amendments thereto.

 

7

 

X.                                    “Milltown Site RD/RA” means the remedial design and
remedial action required by the Milltown ROD and implementing documents and any
government mandated revision of the Milltown ROD.

 

Y.                                     “NOR” means NorthWestern Corporation, Clark Fork and
Blackfoot, LLC, and any affiliates, parent companies, predecessors, successors,
transferees, assigns or shareholders of Northwestern Corporation.

 

Z.                                     “Party” means either AR or NOR.  “Parties” means AR and NOR.

 

AA.                         “Remedial Plan” shall have the same meaning as “Remedial Plan” as defined
by the Milltown Policy, attached hereto as Attachment C to this Agreement.

 

BB.                             “State” means the State of Montana, including all of its departments, agencies
and instrumentalities.

 

CC.                             “Tribes” means The Confederated Salish and Kootenai Tribes of the      Flathead Nation.

 

DD.                           “Upland
Disposal Area” and “UDA” means that disposal facility, located approximately
one-half mile upstream from the Milltown Dam, which was constructed by Montana
Power Company and contains excavated sediments and debris from the Milltown
Reservoir.

 

V.                                    Circumstances in Which Agreement is Void or Voidable

 

A.                                   If either Party to this Agreement after good faith
negotiation does not sign the Milltown CD, or any signatory to the Milltown CD
exercises, pursuant to the CD’s terms, a right to void that CD, this Agreement
will be voidable by either AR or NOR.

 

VI.                                Commitments by AR and NOR

 

A.                                   NOR’s Contribution to Milltown Response Costs 

 

1.                                       Subject to the terms, conditions and reservations
set forth in this Agreement, NOR agrees to pay at least $7.5 million, but no
more

 

8

 

than $10
million to AR as its contribution for Milltown Past Response Costs and Milltown
Future Response Costs, the amount paid to ARCO above $7.5 million to be the
residual of the $2.5 million remaining after NOR’s payments to resolve its
obligations to the State and Tribe in this matter, including the integration of
the remedy selected by EPA for the Site and the implementation of the
Conceptual Restoration Plan whether imposed in connection with that ROD or
through the FERC decommissioning process. 
Beginning January 15, 2004, NOR shall pay $500,000 to an escrow
account, and shall make additional deposits of $500,000 the 12th business day
of each month thereafter until the entire sum due has been paid.  The parties acknowledge that such payment is
intended to be NOR’s total contribution to the estimated, as yet unknown, actual
costs of remedial design and remedial action for the Milltown Site, including
but not limited to removal of the spillway and radial gate section of
Milltown Dam and wetland mitigation required by the Milltown ROD.

 

2.                                       In the event this Agreement is voided by either
Party,  payments made by NOR to the
escrow account with accrued interest less any reasonable administrative costs
incurred for management of the escrow account shall be returned by the escrow
agent to NOR by wire transfer not later than thirty (30) days following receipt
of a notice of voiding of this Agreement.

 

3.                                       The entire balance of the escrow account shall be
paid to AR within ten (10) working days following the Milltown CD
Effective Date.  In the event the
Milltown CD Effective Date occurs prior to the escrow’s receipt of the entire
payment due under Paragraph VI.A.1 above, the unpaid balance shall be
accelerated and paid to the escrow such that the unpaid balance is received by
AR within ten (10) working days following the Milltown CD Effective Date
and

 

9

 

the amount
received in escrow shall be released to AR. 
In the event such accelerated payment is not timely made to the escrow
by NOR as provided by this Paragraph VI.A.3 or NOR defaults and fails to make
any payment required by this Paragraph VI.A, the balance of the remainder due
to AR shall accrue interest at a rate equal to 5 percentage points above
the prime rate in effect on the Milltown CD Effective Date or the default date,
said interest to be compounded monthly until the entire sum due under Paragraph
VI.A.1 is paid by NOR.

 

B.                                     Payment of Milltown Past Response Costs, Milltown
Future Response Costs, Milltown Additional Response Costs and UDA Costs

 

1.                                       AR agrees to pay all Milltown Future Response Costs,
Milltown and UDA Past Response Costs, and Milltown Additional Response Costs,
if any, required by the Milltown CD.

 

C.                                     Payment of Project Costs 

 

1.                                       NOR agrees to pay all Milltown Project Costs.  AR and NOR agree jointly to make all
reasonable good faith efforts to convince the United States to include a
provision in the Milltown CD providing that any Milltown Project Costs incurred
by NOR after December 31, 2010, shall be reimbursed from the Hazardous
Substances Superfund without recourse for recovery of such costs from AR.

 

2.                                       NOR
acknowledges that Project Costs that it will pay pursuant to this Agreement are
reasonable and necessary costs to be incurred by it in resolution of its
alleged liability as a PRP with respect to the Milltown Site and as an owner
and operator of the Milltown Project.

 

10

 

D.                                    Cooperation

 

1.                                       AR and NOR agree to cooperate in preparation of a
draft Milltown CD for submittal to the United States.  The AR/NOR draft Milltown CD will include
provisions intended to create strong incentives for completion of spillway and
radial gate removal as part of the Milltown Site RD/RA before the filing
deadline for submittal of an application to re-license the Milltown Project under
the current FERC-approved schedule.  As
of the date of this Agreement, the current FERC-approved schedule requires
an application for relicensing to be filed on January 1, 2011.

 

2.                                       NOR agrees to use commercially reasonable efforts to
cooperate with AR and Envirocon on Milltown Site RD/RA, including, without
limitation:

 

a.                                       by providing access to the Milltown Project and
appurtenant real and personal property owned or controlled by NOR to AR, AIG,
Envirocon and its subcontractors, the United States and the State and placing
use restrictions on said property, as required by the Milltown CD and the
Milltown ROD;

 

b.                                      by facilitating Milltown RD/RA through alteration,
suspension or termination of Milltown Project operations as required by the
Record of Decision, the Statement of Work for Milltown Site RD/RA, the
Biological Assessment or other requirements of EPA, and as approved or required
by  FERC ;

 

c.                                       by granting to AR and its designees access across
the easement granted in favor of The Montana Power Company (Book 131 of Deeds
at Page 625, Missoula County), for the purpose of removing soil and rock
as necessary for Milltown Site RD/RA from the easement property and adjacent
lands.  NOR waives any claim to
compensation for its grant of access across said easement and the removal of
borrow materials therefrom.  In the event
NOR holds a fee simple interest in lands from which borrow materials are
required for Milltown RD/RA, NOR shall be entitled to compensation

 

11

 

at the prevailing market rate for borrow
materials from said lands, and

 

d.                                      by participating in community relations activities
as required by the Milltown CD and the Milltown ROD and implementing documents.

 

3.                                       NOR agrees to use commercially reasonable efforts to
name AR as an additional insured under its catastrophic release policy issued
by AIG.  In the event removal of the
Milltown Dam does not occur before the expiration of the term of the current
insurance policy providing such coverage, and NOR is required pursuant to the
Milltown CD to renew the policy or provide similar coverage from a different
insurer, NOR will use commercially reasonable efforts to name AR as an
additional insured party for such insurance.

 

4.                                       Given the likelihood that the radial gate and
spillway of the Milltown Dam will be removed pursuant
to the Milltown Site RD/RA, AR agrees to cooperate with and support NOR in NOR’s
efforts to obtain FERC approval to delay capital improvements and dam upgrades
for the Milltown Project, for so long as the United States and the State
support a dam removal remedy.

 

5.                                       AR agrees that all costs for the Milltown Site
Policy, including increased costs of the Remedial Plan covered under
Endorsement No. 3, are to be borne by AR and that it shall direct AIG to
name NOR as an additional Insured under its Milltown Site Policy issued by AIG.

 

6.                                       AR and NOR agree to cooperate by participating in
the initiation and/or defense of, or participation in any appropriate
administrative or judicial proceedings in which they are named as plaintiffs,
defendants, third parties or otherwise are necessary parties regarding the
subject matter of this Agreement.  AR and
NOR each will bear its own costs of participating in such proceedings.

 

12

 

E.                                      Releases and Reservations of Rights

 

1.                                       AR releases all of its claims against NOR, including
claims for contribution, for all costs, loss or damages whatsoever, including
Milltown Past Response Costs, Milltown Future Response Costs, Milltown
Additional Response Costs, and Milltown Project Costs, relating to the Milltown
Site RD/RA and the Milltown Site and past and future Upland Disposal Area
Costs, but not including Downstream Response Costs; provided, however, that if
NOR breaches any material term of this Agreement (including, specifically,
Sections VI A and VI C hereof), such release shall be null and void.

 

2.                                       AR reserves, and this Agreement is without prejudice
to, the right to institute proceedings against NOR for Downstream Response
Costs and any other costs, loss or damages relating to areas downstream or
downgradient from the boundary of the Milltown Site as that term is defined in
the Milltown CD.

 

3.                                       NOR releases all claims against AR, including claims
for contribution, for all costs, loss or damages whatsoever, including Milltown
Past Response Costs, past and future Upland Disposal Area Costs, Milltown
Future Response Costs, Milltown Additional Response Costs, and Milltown Project
Costs, relating to the Milltown Site RD/RA and the Milltown Site, but not
including Downstream Response Costs; provided, however, that if AR breaches any
material term of this Agreement, such release shall be null and void.

 

4.                                       NOR reserves and this Agreement is without prejudice
to, the right to institute proceedings against AR for Downstream Response Costs
and any other costs, loss or damages relating to areas

 

13

 

downstream
or downgradient from the boundary of the Milltown Site as that term is defined
in the Milltown CD.

 

F.                                      Effect of Bankruptcy of AR or NOR

 

NOR and AR acknowledge that they have each exercised reasonable
business judgment in entering into this Agreement.  They further agree that should either of them
file a petition for bankruptcy under Title 11 of the U.S. Code, each will use
best efforts to assume or have assumed the terms of this Agreement in its
entirety pursuant to 11 U.S.C. § 365.

 

G.                                     Dispute Resolution

 

1.                                       AR and NOR agree that if any disputes arise between
them concerning matters covered by this Agreement, then those disputes shall:

 

a.                                       First, be subject to informal dispute resolution
between the Parties’ designated project managers for a period of 7 days from
the date on which one Party notifies the other Party in writing of the dispute;

 

b.                                      Second, be subject to informal dispute resolution
between the Parties’ designated senior managers for a period of 7 days
following the expiration of the period set forth in paragraph G(1)(a) above;

 

c.                                       Third, be subject to mediation by a mediator
acceptable to AR and NOR during the course of a 30-day dispute resolution
period immediately following the period of dispute resolution set forth in
paragraph G(1)(b) above.  AR and NOR
shall share equally the costs of mediation.

 

2.                                       The Parties may by mutual written agreement extend
any of the periods of dispute resolution provided for in paragraph G(1).  If a dispute concerning a matter covered by
this Agreement is not resolved through

 

14

 

such mechanisms,
then either Party may file an action seeking adjudication of such matter
consistent with the terms of this Agreement in a court located in the State of
Montana having jurisdiction of the Parties and such matters.

 

H.                                    Confidentiality

 

1.                                       The Parties agree to hold in confidence, and not to
disclose this Agreement to third parties. 
The Agreement may only be disclosed by a party with the prior written
consent of the other party, which consent shall not be unreasonably withheld;
provided however, nothing herein precludes either party from disclosure of this
Agreement to the extent such disclosure is compelled by applicable laws, rules or
regulation of any federal or state agency or agencies.

 

VII.                            Notices and Submissions

 

Whenever under the terms of this Agreement, written notice is required
to be given, or a document is required to be sent, by one Party to another
Party, it shall be directed to the individual at the addresses specified below,
unless those individuals or their successors give notice of a change to the
other Party in writing.  All notices and
submissions shall be considered effective upon receipt.  Written notice specified in this Section VII
shall constitute complete satisfaction of any written notice requirements of
this Agreement.

 

	
  As to AR:

  	
   

  	
  Stephen A. Elbert

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
  GEM

  
	
   

  	
   

  	
  801 Warrenville Road

  
	
   

  	
   

  	
  Mail Code 80

  
	
   

  	
   

  	
  Lisle, IL 60532

  

 

15

 

	
   

  	
   

  	
  Robin J. Bullock

  
	
   

  	
   

  	
  Portfolio
  Manager, OBC

  
	
   

  	
   

  	
  Atlantic
  Richfield Company

  
	
   

  	
   

  	
  317 Anaconda
  Rd.

  
	
   

  	
   

  	
  Butte, MT 59701

  
	
   

  	
   

  	
  Tel: 406-782-9964
  x414

  
	
   

  	
   

  	
  Fax: 406-782-9980

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  David L. Bell

  
	
   

  	
   

  	
  Senior Legal
  Counsel

  
	
   

  	
   

  	
  Atlantic
  Richfield Company

  
	
   

  	
   

  	
  4101 Winfield
  Road

  
	
   

  	
   

  	
  Mail Code 4
  West

  
	
   

  	
   

  	
  Warrenville, IL
  60555

  
	
   

  	
   

  	
  Tel: 630-434-6164

  
	
   

  	
   

  	
  Fax: 630-821-3406

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  As to NOR:

  	
   

  	
  Michael J. Hanson

  
	
   

  	
   

  	
  President and CEO

  
	
   

  	
   

  	
  125 S. Dakota Avenue

  
	
   

  	
   

  	
  Sioux Falls, SD 57104-6403

  
	
   

  	
   

  	
  Tel: 605-978-2903

  
	
  Fax: 605-978-2963

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lee Graves

  
	
   

  	
   

  	
  Principal Attorney

  
	
   

  	
   

  	
  619 W. Water Street, Suite 3C

  
	
   

  	
   

  	
  Peoria, IL 60602

  
	
   

  	
   

  	
  Tel: 309-673-8422

  
	
   

  	
   

  	
  Fax: 309-673-8432

  

 

VIII.                        Miscellaneous

 

A.                                   AR and NOR each acknowledge that they have read and
understand this Agreement and that they have been represented in the
negotiation of this Agreement by counsel of their own choosing.

 

B.                                     This Agreement represents and expresses the entire
agreement of the Parties and may be modified only by written instrument signed
on behalf

 

16

 

of the Parties.  No promises or inducements have been offered
or made except as set forth in this Agreement.

 

C.                                     No waiver by either Party of any of the provisions
of this Agreement constitute a continuing waiver or prevent such Party from
enforcing all provisions of this Agreement.

 

D.                                    If any part, term or provision of this Agreement,
other than a provision upon which this Agreement is expressly made contingent
or voidable, is held by a court to be illegal or unenforceable, the validity of
the remaining provisions of this Agreement shall not be affected and the rights
and obligations of the Parties shall be construed as if this Agreement did not
contain the part, term or provision held to be invalid.  If any provision on which this Agreement is
made contingent, void or voidable is held to be illegal or unenforceable, then
this entire Agreement shall be voidable at the election of either Party.

 

E.                                      This Agreement shall be governed by the laws of
Montana.

 

F.                                      This Agreement may be simultaneously executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument. 
A fax copy shall be accepted by each party as binding the other to all
rights and obligations arising under this Agreement.

 

G.                                     The execution, delivery and performance of this
Agreement by NOR and AR has been duly authorized by all necessary corporate
action, and by their signature below constitutes a legal, valid and binding
obligation of NOR and AR, enforceable in accordance with its terms.

 

17

 

	
   

  	
   

  	
  For: Atlantic Richfield Company

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September           ,
  2003

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Joan L. Wales

  
	
   

  	
   

  	
   

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
   

  	
  Operating Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For: NorthWestern Corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September           ,
  2003

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Michael J. Hanson

  
	
   

  	
   

  	
   

  	
  Chief Operating Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For: Clark Fork and Blackfoot,
  L.L.C.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September           ,
  2003

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Michael J. Young

  
	
   

  	
   

  	
   

  	
  Assistant Secretary

  

 

 

 

Attachment A

 

Work Activities Which are Not Milltown
Project Costs

 

Design and Removal
of Milltown Dam Spillway and Radial Gate as required by the USEPA Remedial Plan
including:

 

•                  Engineering design.

 

•                  All activities, studies, and designs associated with
dam removal as required by the USEPA Remedial Plan.

•                  Conversion of powerhouse inlets to low-level
outlets.

•                  Over excavation of radial gate, and installation of
diversion culverts, as necessary.

•                  Trash Boom Removal.

•                  Installation and removal of cofferdams upstream of
the spillway and radial gate.

•                  Removal and onsite disposal of panel gate spillway,
spillway bridge, radial gate and radial gate bay.

•                  Spillway removal to existing downstream channel
grade, including channel excavation and/or backfilling where necessary.

•                  Powerhouse, Powerhouse Forebay and Right abutment
embankment stabilization.

•                  Closure of powerhouse inlets.

•                  Providing site security and restricting public
access on the Milltown Site RD/RA work areas located within the NOR property
during all aspects of dam removal activities. 
NOR will continue to maintain its standard maintenance and security
measures throughout its property. 
Coordination will be undertaken to ensure management of site security
where those requirements overlap.

 

Mitigation of
rivers and associated property resulting from removal of Milltown Dam Spillway
and Radial Gate as required by the Remedial Plan including:

 

•                  Engineering Design.

 

•                  All required activities, studies and designs related
to mitigation resulting from dam removal, as required by the USEPA Remedial
Plan, excluding FERC PME requirements. 

•                  CFR and BFR channel excavation and routing.

•                  Grade control and drop structure construction.

 

 

•                  Design, installation and removal of sheetpile and
turbidity curtains around Area 1.

•                  Floodplain backfill haul and placement/contouring.

•                  Streambank construction/stabilization/armoring in
areas affected by excavation and other remedial activities.

•                  Clark Fork and Blackfoot River Floodplain
Re-vegetation, including wetland mitigation, within the Milltown Site RD/RA
work areas.EXHIBIT 10.1

 

TERM LOAN
TERMINATION AGREEMENT

 

THIS AGREEMENT (the “Agreement”),
made and entered into as of this 9th day of May 2005, by and
between Freemantle
Limited, a corporation organized in the Isle of Man (“Lender”), the Seneca
Nation of Indians, a federally recognized Indian Tribe and native American
sovereign nation (the “Nation”), and Seneca Niagara Falls Gaming
Corporation (the “Borrower”), a wholly-owned governmental instrumentality
of the Nation with its principal place of business in the Niagara Territory of
the Nation (collectively, the “Parties”).

 

W I T N E S
S E T H

 

WHEREAS, Borrower and Lender
have previously entered into a Term Loan Agreement dated November 22, 2002, as
amended by that certain Amendment No. 1 to Term Loan Agreement dated December
6, 2002 and that certain Amendment No. 2 to Term Loan Agreement dated April 22,
2004 (as so amended, the “Loan Agreement”), together with certain collateral
agreements related thereto listed on Schedule A hereto (the “Collateral
Agreements,” and together with the Loan Agreement, the “Loan Documents”),
whereby Lender has provided to Borrower sums in the aggregate amount of eighty
million dollars ($80,000,000) (the “Loan”) to finance the development of Seneca
Niagara Falls Casino (the “Casino”);

 

WHEREAS, each of the
representations and warranties made by the Borrower, the Nation or both in any
of the Loan Documents are true and correct, and no material default of any of
the provisions of the Loan Documents has occurred;

WHEREAS, Lender and Borrower
have come to a mutual agreement to terminate the Loan Agreement, and to permit
the Borrower to prepay the Loan pursuant to the terms set forth herein;

 

WHEREAS, prior to or
concurrently with its execution of this Agreement, the Nation and the Borrower
have adopted the resolutions set forth in Exhibit A hereto;

 

NOW, THEREFORE, for and in
consideration of the mutual promises, covenants and obligations contained
herein, the Parties agree as follows:

 

 

ARTICLE I

 

                Conditions

 

1.             Capitalized
terms used but not defined herein shall have the meanings set forth in the Loan
Agreement.

2.             The
parties agree that the Loan Documents are in full force and effect and are
enforceable according to their terms, and, except as specifically modified by
this Agreement, the rights of the Lender as set forth therein have not been
released, waived, modified, altered or in any way diminished by agreement,
course of conduct or otherwise.  The Loan
Documents shall remain in full force and effect and, except as specifically
modified by this Agreement, (i) the Loan Documents shall not be modified,
waived, impaired, released, or otherwise altered by this Agreement and (ii)
this Agreement shall not operate to release or impair any security, right,
power, interest, or remedy of the Lender. 
In the event that the conditions set forth herein are not satisfied in
full and the closing of this Agreement does not occur as contemplated herein,
the Loan Documents shall remain in full force and effect, fully enforceable in
accordance with their original terms, and shall be unmodified by this
Agreement.

3.             Neither
termination of the Loan Agreement nor release of the Collateral Agreements
shall become effective unless and until each of the following conditions are
satisfied:

(a)   Borrower and the Nation shall have both
executed, delivered and fully performed their obligations under this Agreement;

(b)   The resolutions set forth in Exhibit A shall remain
in full force and effect through the closing of this Agreement as set forth
herein; and the press release set forth in Exhibit B hereto shall have been
issued by the Nation and the Borrower to the customary press contacts utilized
by the Nation and the Borrower; and

(c)   All sums due and payable by Borrower to Lender
pursuant to this Agreement shall have been paid in full in immediately
available funds.

ARTICLE II

 

                Prepayment

Lender
and Borrower agree that Borrower shall prepay the Loan on the Closing Date in
accordance with the terms contained in this Agreement.

 

1.             The amount to be prepaid (the “Prepayment
Amount”) shall be an amount equal to (i) the outstanding Loan principal of $80
million; plus (ii) the aggregate
amount of interest on such principal at the Interest Rate (as defined below)
that would otherwise be payable,

 

2

 

if the Loan were not being
prepaid, in respect of the Prepayment Period, as defined in paragraph 3 of this
Article II.

 

2.             The “Interest Rate” shall be equal
to (1) one-month LIBOR
(as determined in accordance with the definition set forth in the Loan
Agreement) as in effect three London banking days prior
to the Closing Date (which interest determination date the parties anticipate
will be May 18, 2005, plus (2)
twenty-nine (29 %) per cent per annum, and shall be calculated in accordance
with the Loan Agreement.

 

3.             The “Prepayment Period” shall equal
(a) the period extending from the Closing Date (i.e., the date of prepayment)
until the Maturity Date, minus
(b) 8.5 months (calculated from the Maturity Date).

 

4.             The “Closing Date” shall be May 23,
2005.

 

5.             On the Closing Date, the Borrower
shall, (i) pay the Prepayment Amount by wire transfer of immediately available
funds in U.S. dollars to an account designated by the Lender, (ii) pay any of
Lender’s expenses then due, (iii) enter into a Marketing Side Letter Agreement
with Whiteswan Limited, an Isle of Man company, addressing the matters
described in Exhibit D and (iv) furnish the legal opinions described in
paragraph 5 of Article V hereof (collectively, the “Closing Deliveries”).  Upon receipt thereof, Lender shall execute
one or more instruments, in form reasonably satisfactory to the parties,
terminating the Loan Documents, releasing all collateral for the Loan,
including amounts on deposit in the Sinking Fund, and shall instruct First
American Title Insurance Company to release to Borrower all funds and documents
currently held by it in escrow, net of such escrow agent’s fees and expenses.  At its option, the Borrower may
elect to apply amounts on deposit in the Sinking Fund toward payment of the
Prepayment Amount on the Closing Date.

 

6.             The Borrower shall deliver the Closing Deliveries, and
otherwise satisfy the conditions set forth in this Agreement, provided,
however, that the obligation to pay the Prepayment Amount shall be an
obligation solely of the Borrower and shall not be a recourse obligation of the
Nation, its assets and revenues.

7.             Prior
to and including the Closing Date, the Borrower shall continue to make all
interest payments and sinking fund deposits due and payable at the times and
otherwise in accordance with the terms of the Loan Agreement.  All interest that is accrued and unpaid as of
the Closing Date shall be paid on the Closing Date, and shall be calculated in
accordance with the terms of the Loan Agreement.

 

8.             Unless
otherwise advised by the Lender by notice to the Borrower, all payments due to
Lender shall be made to the following account by wire transfer:

 

JP Morgan Chase Bank, New
York Office

For account of:

 

3

 

Westpac Banking
Corporation, Singapore

77 Robinson Road

#19-00, SIA Building

Singapore 068896

Account No. 001-1-910213
CHIPS UID 142544

Swift Code: CHASUS 33

 

For subsequent credit to

Freemantle Limited

Account No. 306845

(Attention: Mr. Mervin
Ho/Ms. Jaslyn Lim)

 

ARTICLE III

 

                Indemnification

Borrower and the Nation, subject to the proviso at the
end of this paragraph, hereby jointly and severally indemnify and hold harmless
Lender and its Affiliates, directors, officers, agents, attorneys
and employees (collectively the “Indemnitees”) from and against all losses, damages, costs and
expenses (including reasonable attorneys’ fees and disbursements) which may be
incurred by Lender in connection with the Loan, the Loan Documents or this
Agreement and the transactions contemplated therein or herein, including (a) any and all
claims, demands, actions or causes of action that are asserted against any
Indemnitee by any third party, if the claim, demand, action or cause of action
directly or indirectly relates to a claim, demand, action or cause of action
that such Person asserts or may assert against Borrower (or, to the extent
related to the Loan, the Loan Documents or this Agreement or the transactions
contemplated hereby or thereby, any Affiliate of Borrower or any officer of
Borrower); (b) any and all claims, demands, actions or causes of action by a
third party if the claim, demand, action or cause of action arises out of or
relates to the Loan, the Loan Documents or this Agreement or the relationship
of Borrower and/or the Nation and the Lender under the Loan Documents or this
Agreement or any transaction contemplated herein or therein, including any
action by any party seeking to interfere with the purposes of this Agreement,
whether arising before or after the Closing Date; (c) any administrative or
investigative proceeding by any Governmental Agency arising out of or related
to a claim, demand, action or cause of action described in clauses (a) or (b)
above; and (d) any and all liabilities, losses, costs or expenses (including
reasonable attorneys’ fees and disbursements and other professional services)
that any Indemnitee suffers or incurs as a result of the assertion of any
foregoing claim, demand, action or cause of action; provided that no Indemnitee
shall be entitled to indemnification for any loss caused by its own gross
negligence or willful misconduct.  If any
claim, demand, action or cause of action is asserted against any Indemnitee,
such Indemnitee shall promptly notify Borrower, but the failure to so promptly
notify shall not affect Borrower’s obligations under this Section unless
Borrower is materially prejudiced thereby (and then only to the extent
prejudiced).  Each Indemnitee may

 

4

 

contest the validity,
applicability and amount of such claim, demand, action or cause of action with
counsel selected by such Indemnitee. 
Each Indemnitee is authorized to employ counsel in enforcing its rights
hereunder and in defending any claim, demand, action or cause of action covered
by this Section; provided that each Indemnitee shall endeavor in connection
with any matter covered by this Section which also involves other Indemnitees,
to use reasonable efforts to avoid unnecessary duplication of effort by counsel
for all Indemnitees.  Any obligation or
liability of Borrower to any Indemnitee under this Section shall survive the
expiration or termination of this Agreement, the prepayment of the Loan
contemplated hereby and the payment and performance of all other obligations
under the Loan Documents owed to the Lender. Notwithstanding the foregoing, the
indemnification obligations of the Nation under this paragraph shall only apply
if Borrower is no longer owner and operator of the Casino.

 

ARTICLE IV

 

                Waivers, Consents and Jurisdiction 

Lender shall not by any
act, delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in writing, signed by
Lender, and then only to the extent therein set forth.  A waiver by Lender of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy that Lender would otherwise have had on any future occasion.  Neither failure to exercise nor any delay in
exercising on the part of Lender, any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.

1.             Waiver by Borrower of Immunity and Consent to Suit.  In accordance with the resolution of the
Borrower dated May __, 2005, a copy of which is attached in Exhibit A hereto,
the Borrower hereby, and solely in favor of Lender, irrevocably waives its sovereign
immunity (and any defense based thereon) from any suit, action or proceeding or
from any legal process (whether through service of notice, attachment prior to
the judgment, attachment in aid of execution, execution, exercise of contempt
powers or otherwise) in any forum with respect to this Agreement and any of the
agreements or transactions contemplated hereby or thereby, and Lender with
respect thereto shall have all available legal and equitable remedies,
including, without limitation, the right of Lender to specific performance,
money damages and/or injunctive and declaratory relief, and Borrower, and
solely in favor of Lender, expressly consents to the exercise of jurisdiction
over such action and over Borrower, and to the extent permitted by Federal law,
the exercise of in rem jurisdiction over the available assets and income, of
Borrower, by the courts of the State of New York and the courts of any other
state or of the United States which may have jurisdiction over the subject
matter.  Furthermore, Borrower, and solely in
favor of Lender, waives any requirement of exhaustion of tribal remedies, and
agrees that Borrower will not present any affirmative defense in any dispute
based on any alleged failure to exhaust such remedies.  Without in any way limiting the generality of
the foregoing,

 

5

 

Borrower expressly authorizes
any governmental authorities who have the right and duty under applicable law
to take any action authorized or ordered by any court, to take such action,
including, without limitation, giving effect to any judgment entered.

2.             Waiver by Nation of Immunity and Consent to Suit.  In accordance with the resolution of the
Nation dated April __, 2005, a copy of which is attached in Exhibit A hereto,
the Nation hereby, and solely in favor of Lender, irrevocably waives its sovereign
immunity (and any defense based thereon) from any suit, action or proceeding or
from any legal process (whether through service of notice, attachment prior to
the judgment, attachment in aid of execution, exercise of contempt powers or
otherwise) in any forum with respect to this Agreement and any of the
agreements or transactions contemplated hereby or thereby, and Lender with
respect thereto shall have all available legal and equitable remedies,
including, without limitation, the right of Lender to specific performance
and/or injunctive and declaratory relief, and the Nation, and solely in favor
of Lender, expressly consents to the exercise of jurisdiction over such action
and over the Borrower and the Nation, and to the extent permitted by Federal
law, the exercise of in rem jurisdiction over the available assets and income,
of the Borrower, by the courts of the State of New York and the courts of any
other state or of the United States which may have jurisdiction over the
subject matter.  Furthermore, the Nation, and solely in
favor of Lender, waives any requirement of exhaustion of tribal remedies, and
agrees that the Nation will not present any affirmative defense in any dispute
based on any alleged failure to exhaust such remedies.  Without in any way limiting the generality of
the foregoing, the Nation expressly authorizes any governmental authorities who
have the right and duty under applicable law to take any action authorized or
ordered by any court, to take such action, including, without limitation,
giving effect to any judgment entered.

3.             Personal Jurisdiction and Service of Process. 
Borrower, the Nation and Lender hereby irrevocably consent to personal
jurisdiction and venue in any court of the State of New York or any federal court
sitting in the State of New York, and hereby waive any claim either may have
that such court is an inconvenient forum for the purposes of any suit, action
or other proceeding arising out of this Agreement, the other Loan Documents or
any of the agreements or transactions contemplated hereby or thereby, which is
brought by the Lender against the Borrower and/or the Nation, or by the
Borrower and/or the Nation against the Lender, as the case may be, and hereby
agree that all claims in respect of any such suit, action or proceeding may be
heard or determined in any such court; and each of Borrower, the Nation and the
Lender further consent to the service of process of any of the aforementioned
courts in any such suit, action or proceeding by the mailing of copies thereof
by registered or certified mail, postage prepaid, to the Borrower, the Nation
or the Lender at its address (including the addresses of their respective
attorneys) set forth herein for the giving of notices, such service to become
effective ten (10) business days after such mailing.

4.             Jurisdiction and Governing Law. 
Except as otherwise provided by applicable federal law, this Agreement
shall be governed by the law of the State of New York (including without
limitation the UCC).  The courts of the
State of New York and (to the extent jurisdiction over the subject matter is
vested in them by the laws of the United States) any federal

 

6

 

court sitting in the State of New York, may exercise
jurisdiction over any action, suit or proceeding arising with respect to
enforcement, construction, termination or modification of this Agreement.  Borrower and the Nation are expressly and
irrevocably prohibited from asserting that any of the Nation’s tribal courts
(whether now or hereafter existing) or other forums (whether now or hereafter
existing) of the Nation should exercise jurisdiction over any suit, action or
proceeding, and Borrower and the Nation hereby waive any claim or right to
assert such jurisdiction and any requirement that tribal remedies be exhausted
is hereby waived.

5.             Waiver of Trial by Jury. 
EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL
BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS
AGREMENT OR ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTY HERETO OR ANY OF THEM WITH RESPECT TO
THIS AGREEMENT OR ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.

6.             Effect of Waivers and Consents. 
THE WAIVERS AND CONSENTS DESCRIBED IN THIS ARTICLE IV SHALL INURE TO THE
BENEFIT OF THE LENDER AND EACH OTHER PERSON WHO IS ENTITLED TO THE BENEFITS OF
THIS AGREEMENT AND THE LOAN DOCUMENTS (INCLUDING WITHOUT LIMITATION THE
INDEMNITEES).  THE LENDER AND THE
INDEMNITEES SHALL HAVE AND BE ENTITLED TO ALL AVAILABLE LEGAL AND EQUITABLE
REMEDIES, INCLUDING THE RIGHT TO SPECIFIC PERFORMANCE, MONEY DAMAGES AND
INJUNCTIVE OR DECLARATORY RELIEF.  THE
WAIVERS OF SOVEREIGN IMMUNITY AND CONSENTS TO JURISDICTION CONTAINED IN THIS
ARTICLE IV ARE IRREVOCABLE AND ARE SOLELY IN FAVOR OF AND WITH RESPECT TO
SUITS, ACTIONS, PROCEEDINGS OR PROCESSES BROUGHT BY LENDER.

 

ARTICLE
V

                Miscellaneous

1.             Costs.  All
costs, expenses and fees incurred by Lender in the preparation, execution,
delivery and implementation of this Agreement shall be paid by the Borrower to
the

 

7

 

Lender upon the Closing Date, including without
limitation, fees due to Cleary Gottlieb Steen and Hamilton LLP and Monteau
& Peebles LLP.

2.             Relationship between the Parties.  Nothing contained herein is intended to
modify the relationship of Lender and Borrower as creditor and debtor.  Borrower and the Nation acknowledge that the
Borrower and Lender are not partners or joint venturers, nor has Lender
provided financial or other advice to the Borrower or the Nation with respect
to this Agreement or the Loan Documents. 
Each of Borrower and the Nation have acted independently and have sought
their own legal, financial and other counsel with respect to the transactions
reflected in the Loan Documents and this Agreement.

3.             Scope of Authority:  The Chairman of the Board of Directors of the
Borrower and the President of the Nation are each authorized to execute this
Agreement pursuant to the resolutions attached in Exhibit A.  The Chairman of the Board of Directors of the
Borrower and the President of the Nation each exercise his authority in this
instance because each of them believes that the Agreement is in the best
interests of Borrower and the Nation, respectively.

4.             Regulatory
Matters.  The Borrower on the Closing
Date shall by written correspondence to the Bureau of Indian Affairs (“BIA”)
request that the BIA cease any pending review of the Loan Documents.

 

5.             Tribal
Legal Matters.           Counsel to
the Nation and the Borrower shall furnish opinions of counsel to the Lender
addressing the matters set forth in Exhibit C, in form and substance
satisfactory to Lender and its counsel.

 

6.             Public Statements.  At such time as the parties may agree, but no
later than the date such disclosure would be required to be made by the Seneca
Gaming Corporation as a public reporting company, the Nation and the Borrower
shall issue a press release in the form attached in Exhibit B hereto.

7.             Amendments. 
The terms of this Agreement shall not be altered, modified, amended or
supplemented in any manner whatsoever except by written instrument signed by the
party against which such alteration, modification, amendment or supplement is
sought.

8.             Joint Drafting. 
The parties acknowledge and agree that this Agreement was jointly
drafted by the Lender on one side and by the Borrower and the Nation on the
other side.  Neither party, nor any party’s
counsel, shall be deemed the drafter of this Agreement in any proceeding that
may hereafter arise between them.

9.             Counterparts. 
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original
for all purposes, but all such counterparts shall together constitute but one
and the same instrument.

 

8

 

10.           Severability. 
If any term or provision hereof or the application thereof to any
circumstance shall, in any jurisdiction and to any extent, be invalid or
unenforceable, such term or such provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable any remaining terms and provisions
hereof or the application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable.  To the extent permitted by applicable law,
the parties hereto hereby waive any provision of law that renders any term or
provision hereof invalid or unenforceable in any respect.

11.           Nation undertakings.  The Nation understands the Borrower’s
obligations under this Agreement and has granted the Borrower with the power
and authority to so enter into this Agreement, including the terms and
conditions of same, including without limitation, the waiver of sovereign
immunity, consent to jurisdiction, waiver of certain defenses and consent to
security and leasehold encumbrances.  The
Nation hereby agrees to the Borrower’s undertakings and obligations set forth
herein.  The Nation shall take such
actions as are necessary to cause the Borrower to fulfill its undertakings and
obligations as set forth herein.

                12.           Limited recourse.  Lender’s recourse for money damages under
this Agreement shall be against Borrower only. 
Except as set forth in the foregoing indemnity provision (and then only if Borrower is
no longer owner and operator of the Casino), under no other circumstances whatsoever shall the
Nation be liable for any money damages of any kind.  Lender’s sole recourse against the Nation
under this Agreement shall be for injunctive relief and/or specific
performance.

13.           Notices.  Any notice required or permitted to be given
under this Agreement, to be effective, shall be in writing (including by
facsimile), and shall be deemed to have been duly given or made (a) when
delivered by hand or by internationally recognized overnight carrier, or (b) in
the case of notice by fax, when sent and electronically confirmed, addressed as
set forth below, with a copy of such notice sent by any other means provided in
clause (a) above.

(a)   If to Lender, at:

Freemantle Limited

C/o Kien Huat Realty Sdn. Bhd.

22nd Floor- Wisma Genting

Jalan Sultan Ismail

Kuala Lumpur, Malaysia 50250

Facsimile No. (011 60 3) 2162 4951

Attention:  E.S. Teo

with a copy to:

 

Cleary, Gottlieb, Steen & Hamilton, LLP

 

9

 

One Liberty Plaza

New York, New York 10006

Facsimile No. (212) 225 3999

Attention:  Steven G. Horowitz,
Esq.

(b)   If to Borrower, at:

Seneca Niagara Falls Gaming Corporation

P.O. Box 777

Niagara Falls, NY 
14303-0777

Facsimile No. (716) 299 1200

Attention:  Barry W. Brandon,
Esq.

with a copy to:

 

Akin Gump Strauss Hauer & Feld, LLP

Robert S. Strauss Building

1333 New Hampshire Avenue, N.W.

Suite 400

Washington, D.C. 20036-1564

Facsimile No. (202) 887 4288

Attention:  Donald R. Pongrace

 

(c)   If to the Nation, at:

Seneca Nation of Indians

William Seneca
Administration Building,

1490 Route 438,

Cattaraugus Reservation,

Irving, New York 14081

Facsimile No. (716) 532 6272

Attention: 
Barry Snyder, Sr., President

with a copy to:

Akin, Gump, Strauss, Hauer
& Feld, L.L.P.

Robert S. Strauss Building

1333 New Hampshire Avenue,
N.W.

Suite 400

Washington, D.C. 20036-1564

Facsimile No. (202) 887 4288

Attention:  Donald R. Pongrace

 

(d)   If to any of the foregoing parties, at such
other address as such party shall from time to time designate in writing to the
other parties hereto.

 

10

 

In the event any notice shall be given by facsimile,
the party giving such notice shall confirm such notice by a writing delivered
by hand or international courier (specifying the fastest delivery method
available); provided, however, that for all purposes hereunder notice shall be
deemed effective at the time given by facsimile.

 

11

 

This Agreement shall be
binding upon, and shall accrue to the benefit of, the Parties’ respective
heirs, successors and assigns.

EXECUTED as of the date first written above.

	
   

  	
   

  	
   

  
	
   

  	
  SENECA NIAGARA FALLS GAMING CORPORATION:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   /s/ Barry E. Snyder, Sr.

  	
   

  
	
   

  	
  By: Barry E. Snyder, Sr.

  	
   

  
	
   

  	
  Its: Chairman of the Board of
  Directors

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE SENECA NATION OF INDIANS:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   /s/ Barry E. Snyder, Sr.

  	
   

  
	
   

  	
  By: Barry E. Snyder, Sr.

  	
   

  
	
   

  	
  Its: President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FREEMANTLE LIMITED:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ E. S. Teo

  	
   

  
	
   

  	
  By: Eng Siong Teo

  	
   

  

 

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SCHEDULE “A”

LOAN
DOCUMENTS

1.                                      Interim Term Loan
Agreement, dated
as of October 23, 2002, by and between Freemantle, as Lender, and SNFGC, as
borrower.

2.                                      Term Loan Agreement, dated as of November 22, 2002, by and between
Freemantle, as lender, and SNFGC, as borrower.

3.                                      Amendment No. 1 to Term
Loan Agreement,
dated as of December 6, 2002, by and between Freemantle, as lender, and SNFGC,
as borrower.

4.                                      Amendment No. 2 to Term
Loan Agreement,
dated as of April 22, 2004, by and between Freemantle, as lender, and SNFGC, as
borrower.

5.                                      Nation Agreement, dated as of November 22, 2002, by and
between Freemantle and the Nation.

6.                                      Amendment No. 1 to
Nation Agreement,
dated as of April 22, 2004, by and between Freemantle and the Nation.

7.                                       Amended
and Restated Promissory Note, dated as of November 22, 2002, by
SNFGC for the benefit of Freemantle.

8.                                      Security Agreement and
General Assignment,
dated as of October 23, 2002, by and between Freemantle and SNFGC.

9.                                      First Amendment to
Security Agreement and General Assignment, dated as of November 22, 2002, by and between
Freemantle and SNFGC.

10.                               Affidavit, notarized on November 19, 2002,
pursuant to Section 22 of the Lien Law of the State of New York.

11.                               Cash Collateral Account
Agreement, dated
as of December 6, 2002, by and among Freemantle, SNFGC and Fleet National Bank.

12.                               Sinking Fund Account
Agreement, dated
as of December 11, 2003, by and among HSBC Bank USA, SNFGC and Freemantle.

13.                               Amendment No. 1 to
Sinking Fund Account Agreement, dated as of January 30, 2004, by and among HSBC,
SNFGC and Freemantle.

14.                               Building Loan Agreement, dated as of November 22, 2002, by and
between Freemantle and SNFGC.

 

13

 

15.                               Junket Letter Agreement, dated as of November 22, 2002, by and
between Whiteswan Limited and the Borrower.

16.                               Amendment No. 1 to
Junket Letter Agreement, dated as of November 26, 2003, by and between Whiteswan Limited and
the Borrower.

MORTGAGES AND RELATED DOCUMENTS THAT HAVE BEEN RELEASED

1.                                      Building Loan Leasehold
Mortgage, Assignment of Rents and Leases, Security Agreement and Fixture Filing
(Construction Costs),
dated as of November 22, 2002, by SNFGC for the benefit of Freemantle.

2.                                      Amendment No. 1 to
Building Loan Leasehold Mortgage, Assignment of Rents and Leases, Security
Agreement and Fixture Filing (Construction Costs), dated as of April 22, 2004, by SNFGC
for the benefit of Freemantle.

3.                                      Leasehold Mortgage,
Assignment of Rents and Leases, Security Agreement and Fixture Filing (Indirect
Costs), dated as
of November 22, 2002, by SNFGC for the benefit of Freemantle.

4.                                      Mortgage Spreader
Amendment to Leasehold Mortgage, Assignment of Rents and Leases, Security
Agreement and Fixture Filing (Indirect Costs), dated as of February 7, 2003, by SNFGC for the
benefit of Freemantle.

5.                                      Amendment No. 1 to
Leasehold Mortgage, Assignment of Rents and Leases, Security Agreement and
Fixture Filing (Indirect Costs), dated as of April 22, 2004, by SNFGC for the benefit
of Freemantle.

6.                                      Non-Disturbance and
Attornment Agreement (Head Lease), dated as of November 19, 2002 and effective as of
November 22, 2002, by and among Freemantle, as lender, SNFGC, as tenant, and
the Nation, as landlord (the “Head Lease NDA”).

7.                                       Non-Disturbance and
Attornment Agreement (Sub-Sublease), dated as of November 19, 2002 and effective as of
November 22, 2002, by and among Freemantle, as lender, SNFGC, as tenant, and
ESD, as landlord (the “Sub-Sublease NDA” and, together with the Head
Lease NDA, the “NDAs”).

 

14

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