Document:

EXHIBIT 10.1

                            INDEMNIFICATION AGREEMENT

     This AGREEMENT,  effective as of  ____________,  200___,  is between Beacon
Power    Corporation,    a   Delaware    corporation   (the   "Company"),    and
___________________ ("Indemnitee").

     WHEREAS, it is essential to the Company to retain and attract as directors
the most capable persons available; the Company wishes to retain the services of
the Indemnitee as a director; and the Indemnitee is unwilling to serve the
Company as a director without assurances that indemnification and adequate
liability insurance is and will continue to be provided to the fullest extent
possible;

     WHEREAS, lawsuits seeking significant money judgments against publicly held
corporations and their officers and directors have become commonplace in recent
years and uncertainties about the possible judicial interpretations of
applicable statutes, regulations and corporate charter and by-law provisions
leave corporate officers and directors with inadequate reliable knowledge of the
legal risks to which they may be exposed by such lawsuits; whether or not the
case is meritorious, the cost of defending such lawsuits is significant with few
individual officers and directors having the resources to sustain such legal
costs and such lawsuits present individual officers and directors with the risk
of significant money judgments even in cases where the defendant was neither
culpable nor profited personally to the detriment of the Company;

     WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability in order to enhance Indemnitee's continued service to
the Company in an effective manner and in part to provide Indemnitee with
specific contractual assurance that the indemnification protection provided by
the Certificate of Incorporation and Bylaws of the Company will be available to
Indemnitee (regardless of, among other things, any amendment to or revocation of
such Certificate of Incorporation and Bylaws or any change in the composition of
the Company's Board of Directors (the "Board") or acquisition transaction
relating to the Company), and in order to induce Indemnitee to continue to
provide services to the Company as a director thereof, the Company wishes to
provide in this Agreement for the indemnification of and the advancing of
expenses to Indemnitee to the fullest extent (whether partial or complete)
permitted by law, and for the continued coverage of Indemnitee under the
Company's directors' and officers' liability insurance policies.

     NOW, THEREFORE, in consideration of the promises set forth herein and of
Indemnitee continuing to serve the Company as a director and intending to be
legally bound hereby, the parties agree as follows:

1.       Certain Definitions.

     (a) Change in Control: shall be deemed to have occurred if (i) any "person"
(as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended), other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act) directly or
indirectly of securities of the Company representing 40% or more of the total
voting power represented by the Company's then outstanding Voting Securities, or
of the then outstanding Voting Securities of the surviving entity in a merger or
consolidation which includes the Company, (ii) during any period of 24
consecutive whole months, individuals who at the beginning of such period
constitute the Board and any new directors whose election by the Board or
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who either were
officers or directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof, or (iii) the stockholders of the Company approve
a merger or consolidation of the Company with any other corporation, other than
a merger or consolidation which (X) would result in the persons who immediately
prior thereto hold outstanding Voting Securities of the Company then continuing
to hold Voting Securities immediately after such merger or consolidation which
represent (either by remaining outstanding or by being converted into Voting
Securities of the surviving entity, and by being combined with any additional
Voting Securities which such holder(s) may have received in such merger or
consolidation by reason of such holder(s) having held Voting Securities in the
other corporation) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of the
Company approve a plan of complete liquidation (as that term is used in the
Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder) of the Company or an agreement for the sale or
disposition by the Company (in one transaction or a series of transactions) of
all or substantially all of the Company's assets (as that phrase is used in the
General Corporation Law of the State of Delaware), and (Y) does not result in
the percentage total voting power of any stockholder of the company who
immediately prior to such transaction beneficially owned at least 5% of the
total voting securities of the company increasing by more than 100%.
Notwithstanding the foregoing, an event shall not be considered to be a Change
in Control for purposes of this Agreement if it has been prospectively or
retroactively determined not to constitute a Change in Control for purposes of
this Agreement, by a majority of the directors who are disinterested in the
event referenced in subclause (i) or (iii) above, and who also qualify under the
rules set forth in subclause (ii), above (either because they were directors at
the start of the 24 month period or because they were approved by the 2/3rds of
the directors described in such subclause).

     (b) Claim: any threatened, pending or completed action, suit, proceeding or
alternative dispute resolution mechanism, which arises by reason of or in part
out of an Indemnifiable Event, or any inquiry, hearing or investigation, whether
conducted by the Company or any other party, that Indemnitee in good faith
believes might lead to the institution of any such action, suit, proceeding or
alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other.

     (c) D&O Insurance: the directors' and officers' liability insurance
currently carried by the Company and any replacement or substitute policies
issued by one or more reputable insurers providing in all material respects
coverage at least comparable to and in the same amount as those policies
currently carried by the Company.

     (d) Expenses: include reasonable attorneys' fees, travel expenses, fees of
experts, transcript costs, filing fees, witness fees, telephone charges,
postage, delivery service fees, and all other expenses and obligations of any
nature whatsoever paid or incurred in connection with investigating, defending,
being a witness in or participating in (including on appeal), or preparing to
defend, be a witness in or participate in any Claim relating to any
Indemnifiable Event.

     (e) Expense Advance: a payment to Indemnitee pursuant to Section 2(b) of
Expenses in advance of the settlement of or final judgment in any action, suit,
proceeding or alternative dispute resolution mechanism, hearing, inquiry or
investigation which constitutes a Claim.

     (f) Indemnifiable Event: any event, occurrence or circumstance that takes
place either prior to or after the execution of this Agreement related to the
fact that Indemnitee is or was an officer or director of the Company, or is or
was serving at the request of the Company as a director, officer, partner,
employee, trustee, agent or fiduciary of another corporation, partnership, joint
venture, employee benefit plan, trust or other enterprise, or by reason of
anything done or not done by Indemnitee in any such capacity.

     (g) Potential Change in Control: shall be deemed to have occurred if (i)
the Company enters into an agreement or arrangement, the consummation of which
would result in the occurrence of a Change in Control; (ii) any person
(including the Company) publicly announces an intention to take or consider
taking actions which if consummated would constitute a Change in Control; (iii)
any person, other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company acting in such capacity or a corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
who is, or becomes, the beneficial owner, directly or indirectly, of securities
of the Company representing 10% or more of the combined voting power of the
Company's then outstanding Voting Securities, thereafter acquires additional
shares with the effect that his beneficial ownership of such securities
increases by five percentage points or more over the percentage so owned by such
person on the date hereof; or (iv) the Board adopts a resolution to the effect
that, for purpose of this Agreement, a Potential Change in Control has occurred.
Notwithstanding the foregoing, an event shall not be considered to be a
Potential Change in Control for purposes of this Agreement if it has been
prospectively or retroactively determined not to constitute a Potential Change
in Control for purposes of this Agreement, by a majority of the directors who
are disinterested in the event referenced above in (i), (ii), or (iii) and who
also qualify under the rules set forth in subclause (ii) of the definition of
Change of Control in Section 1(a) above (either because they were directors at
the start of the 24 month period or because they were approved by the 2/3rds of
the directors described in such subclause).

(h) Reviewing Party: any appropriate person or body consisting of a member or
members of the Company's Board of Directors, or any other person or body
appointed by the Board who is not a party to the particular Claim for which
Indemnitee is seeking indemnification, or Independent Legal Counsel. If there
has not been a Change in Control, the Reviewing Party shall be selected by the
Board of Directors, and if there has been such a Change in Control (other than
an event that does not constitute a Change in Control because it has been
approved by the applicable majority of the Board as referenced in the definition
of Change of Control in Section 1(a)), the Reviewing Party shall be the
Independent Legal Counsel referred to in Section 3 hereof.

(i) Independent Legal Counsel: shall refer to an attorney, selected in
accordance with the provisions of Section 3 hereof, who shall not have otherwise
performed services for the Company or Indemnitee within the last five years
(other than in connection with seeking indemnification under this Agreement).
Independent Legal Counsel shall not be any person who, under the applicable
standards of professional conduct then prevailing, would have conflict of
interest in representing either the Company or Indemnitee in an action to
determine Indemnitee's rights under this Agreement, nor shall Independent Legal
Counsel be any person who has been sanctioned or censured for ethical violations
of applicable standards of professional conduct.

(j) Voting Securities: any securities of the Company which vote generally in the
election of directors.

2. Basic Indemnification Agreement.

                  (a) General. Subject to Section 2(c), if Indemnitee was, is,
or becomes a party to or witness or other participant in, or is threatened to be
made a party to or witness or other participant in, a Claim, the Company shall
indemnify Indemnitee to the fullest extent not prohibited by law as soon as
practicable but in any event no later than thirty days after written demand is
presented to the Company, against any and all Expenses, judgments, fines,
penalties and amounts paid in settlement (including all interest, assessments
and other charges paid or payable in connection with or in respect of such
Expenses, judgments, fines, penalties or amounts paid in settlement) of such
Claim, and against any and all federal, state, local or foreign taxes imposed on
the Indemnitee as a result of the actual or deemed receipt of any payments under
this Agreement (including the creation of the trust referred to in Section 4
hereof). Notwithstanding anything in this Agreement to the contrary and except
as provided in Section 2(b) (with respect to indemnification for Expenses
incurred in obtaining indemnification or Expense Advances from the Company),
prior to a Change in Control, Indemnitee shall not be entitled to
indemnification pursuant to this Agreement in connection with any Claim
initiated by Indemnitee against the Company or any director or officer of the
Company unless the Company has joined in or consented to the initiation of such
Claim.

                  (b) Expense Advances, etc. Subject to Section 2(c), the
Company shall make Expense Advances for reasonable Expenses to Indemnitee,
within twenty business days of a request by Indemnitee. The parties agree that
for the purposes hereof all Expenses included in an Expense Advance request that
are certified by affidavit of Indemnitee's counsel as being reasonable shall be
presumed conclusively to be reasonable. The Company shall also indemnify
Indemnitee against any and all Expenses which are incurred by Indemnitee in
connection with any action brought by Indemnitee (i) for indemnification or
advance payment of Expenses by the Company under this Agreement or any other
agreement or Certificate of Incorporation or Bylaws of the Company now or
hereafter in effect relating to Claims for Indemnifiable Events, and/or (ii) for
recovery under the D&O Insurance policies maintained by the Company.

                  (c) Circumstances of No Indemnification; Reimbursement.
Notwithstanding the foregoing, the obligations of the Company under Section 2(a)
and 2(b) shall not apply if either the Reviewing Party has determined (in a
written opinion, in any case in which the Independent Legal Counsel referred to
in Section 3 hereof is involved), or a final judicial determination is made (as
to which all rights of appeal therefrom have been exhausted or lapsed), that
Indemnitee would not be permitted to be indemnified under this Agreement and
applicable law. In either such case, the Indemnitee shall reimburse the Company
for all amounts paid by the Company to Indemnitee under this Agreement with
respect to such Claim. Indemnitee's obligation to reimburse the Company for
Expense Advances shall be unsecured and no interest shall be charged thereon.
However, a determination by the Reviewing Party shall not be binding if the
Indemnitee or the Company has commenced legal proceedings to secure a judicial
determination whether Indemnitee should be indemnified under applicable law, and
Indemnitee shall not be required to reimburse the Company until a final judicial
determination is made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or lapsed, and herein, a "Final Adjudication").
Indemnitee and the Company shall each have the right to commence litigation
seeking an initial determination by a court or challenging any determination
made by a Reviewing Party or any aspect thereof, or the legal or factual bases
therefor, and the parties hereby consent to service of process and to appear in
any such proceeding.

                  No indemnification shall be paid by the Company with respect
to a Claim, if there is a Final Adjudication relating to such Claim (i) that
paying Indemnitee hereunder violates this Agreement or applicable law; (ii) that
Indemnitee is liable for an accounting of profits made from the purchase or sale
by Indemnitee of securities of the Company pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any federal, state or local statutory law, (iii) that Indemnitee's
conduct was knowingly fraudulent or deliberately dishonest, or constituted
willful misconduct, (iv) that Indemnitee willfully misappropriated corporate
assets, or knowingly disclosed the Company's confidential information in bad
faith.

3. Change in Control. The Company agrees that if there is a Change in Control of
the Company (other than an event that does not constitute a Change in Control
because it has been approved by the applicable majority of the Board as
referenced in the definition of Change of Control in Section 1(a)) then
Independent Legal Counsel shall be selected by Indemnitee and approved by the
Company (which approval shall not be unreasonably withheld) and such Independent
Legal Counsel shall determine whether the Indemnitee is entitled to indemnity
payments and Expense Advances under this Agreement or any other agreement or
Certificate of Incorporation or Bylaws of the Company now or hereinafter in
effect relating to Claims for Indemnifiable Events. Such Independent Legal
Counsel, among other things, shall render its written opinion to the Company and
Indemnitee as to whether and to what extent the Indemnitee will be permitted to
be indemnified. The Company agrees to pay the reasonable fees of the Independent
Legal Counsel and to indemnify fully such Independent Legal Counsel against any
and all expenses (including attorneys' fees), claims, liabilities and damages
arising out of or relating to this Agreement.

4. Establishment of Trust. In the event of a Potential Change in Control (other
than an event that does not constitute a Potential Change in Control because it
has been approved by the applicable majority of the Board as referenced in the
definition of Potential Change of Control in Section 1(g)), the Company shall,
upon written request by Indemnitee, create a trust for the benefit of Indemnitee
and from time to time upon written request of Indemnitee shall fund such trust
in an amount sufficient to satisfy any and all Expenses reasonably anticipated
at the time of each such request to be incurred in connection with
investigating, preparing for and defending any Claim relating to an
Indemnifiable Event, and any and all judgments, fines, penalties and settlement
amounts of any and all Claims relating to an Indemnifiable Event from time to
time actually paid or claimed, reasonably anticipated or proposed to be paid.
The amount or amounts to be deposited in the trust pursuant to the foregoing
funding obligation shall be determined by the Reviewing Party, in any case in
which the Independent Legal Counsel referred to above is involved. The terms of
the trust shall provide that upon a Change in Control (other than an event that
does not constitute a Change in Control because it has been approved by the
applicable majority of the Board as referenced in the definition of Change of
Control in Section 1(a)) (i) the trust shall not be revoked or the principal
thereof invaded, without the written consent of Indemnitee and the Company,
which shall not be unreasonably withheld, (ii) the trustee shall advance, within
twenty business days of a request by Indemnitee, any and all Expenses to
Indemnitee (and Indemnitee hereby agrees to reimburse the trust under the
circumstances under which Indemnitee would be required to reimburse the Company
under Section 2(c) of this Agreement, (iii) the trust shall continue to be
funded by the Company in accordance with the funding obligation set forth above,
(iv) absent a judicial order to the contrary, the trustee shall promptly pay to
Indemnitee all amounts for which Indemnitee shall be entitled to indemnification
pursuant to this Agreement or otherwise, and (v) all unexpended funds in such
trust shall revert to the Company upon a final determination by a court of
competent jurisdiction (or the Reviewing Party, in the case that no court has so
determined) that Indemnitee has been fully indemnified under the terms of this
Agreement. The trustee shall be a bank or trust company or other individual or
entity chosen by the Indemnitee and approved by the Company. Nothing in this
Section 4 shall relieve the Company of any of its obligations under this
Agreement. All income earned on the assets held in the trust shall be reported
as income by the Company for federal, state, local and foreign tax purposes.

5. Certain Procedures. If any Claim shall be brought or asserted against
Indemnitee in respect of which indemnification may be sought hereunder,
Indemnitee shall promptly notify the Company in writing, and the Company shall
have the right to assume the defense thereof, including the employment of
counsel reasonably satisfactory to Indemnitee and the payment of all expenses.
Indemnitee shall have the right to employ separate counsel in any such action
and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of Indemnitee unless (i) the Company agrees to
pay such fees and expenses, or (ii) the Company has failed promptly to assume
the defense of such action or proceeding and employ counsel reasonably
satisfactory to Indemnitee in any such action or proceeding, or (iii) the named
parties to any such action or proceeding include both Indemnitee and Company,
and Indemnitee has been advised by counsel that there may be one or more legal
defenses available to him which are different from or additional to those
available to the Company, in which case, if Indemnitee notifies the Company in
writing that he elects to employ separate counsel at the expense of the Company,
the Company shall not have the right to assume the defense of such action or
proceeding on behalf of Indemnitee and shall pay all Expenses including
attorneys' fees incurred by Indemnitee in such defense.

         Neither the Company nor Indemnitee may settle or compromise any Claim
as to which Indemnitee has notified the Company that he seeks indemnification
under this Agreement, without the prior written consent of the other party
hereto, provided that consent to such settlement or compromise shall not be
unreasonably withheld by any of the parties hereto and shall be deemed to have
been given by the Company if Indemnitee provides the Company with a written
notice setting forth the material terms of such settlement or compromise and the
Company does not object thereto in a written notice delivered to Indemnitee
within 30 calendar days after the Company's receipt of such notice from
Indemnitee. Notwithstanding the foregoing, Indemnitee shall not be required to
consent to any settlement or compromise that does not include a complete, full
and absolute release of the Indemnitee, in form and substance satisfactory to
the Indemnitee in his or her sole discretion, from any liability under such
claim.

6. Maintenance of D&O Insurance.

         (a) The Company hereby covenants and agrees that, so long as Indemnitee
shall continue to serve as an officer or director of the Company and thereafter
for a period of three years, the Company, subject to Section 6(c), shall
maintain in full force and effect D&O Insurance.

         (b) In all policies of D&O Insurance, Indemnitee shall be named as an
insured in such a manner as to provide Indemnitee the same rights and benefits,
subject to the same limitation, as are accorded to the Company's directors or
officers most favorably insured by such policies.

         (c) The Company shall have no obligation to maintain D&O Insurance if
the Company determines in good faith that such insurance is not reasonably
available, the premium costs for such insurance is disproportionate to the
amount of coverage provided, or the coverage provided by such insurance is
limited by exclusions so as to provide an insufficient benefit.

         (d) Upon receipt by the Company of notice of a Claim, the Company shall
give prompt notice of the commencement of such Claim to its liability insurers
in accordance with the procedures set forth in the respective D&O Insurance
policies. The Company shall thereafter take all necessary or desirable action to
cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a
result of such Claim in accordance with the terms of such policies.

7. Partial Indemnity, Etc. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the
Expenses, judgment, fines, penalties and amounts paid in settlement of a Claim
but not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is
entitled. Moreover, notwithstanding any other provision of this Agreement, to
the extent that Indemnitee has been successful on the merits otherwise in
defense of any or all Claims relating in whole or in part to an Indemnifiable
Event or in defense of any issue or matter therein, including dismissal without
prejudice, Indemnitee shall be indemnified against all Expenses incurred in
connection therewith.

8. Defense to Indemnification, Burden of Proof and Presumptions. It shall be a
defense to any action brought by Indemnitee against the Company to enforce this
Agreement (other than an action brought to enforce a claim for Expenses incurred
in defending a Claim in advance of its final disposition where the required
undertaking for any applicable contingent reimbursement has been tendered to the
Company) that Indemnitee has not met the standards of conduct that make it
permissible under the Delaware General Corporation Law for the Company to
indemnify Indemnitee for the amount claimed. It shall be presumed that
Indemnitee was acting in good faith within the scope of his employment or
authority, as he could reasonably have perceived it under the circumstances and
for a purpose he could reasonably have believed under the circumstances was in
or not opposed to the best interests of the Company. In connection with any
determination by the Reviewing Party or otherwise as to whether the Indemnitee
is entitled to be indemnified hereunder, the burden of proof shall be on the
Company to establish that Indemnitee is not so entitled. Upon the commencement
of legal proceedings by Indemnitee to secure a judicial determination that
Indemnitee should be indemnified under the Agreement under applicable law,
neither the failure of any Reviewing Party to have made a determination as to
whether Indemnitee has met any particular standard of conduct nor an actual
determination by any Reviewing Party that Indemnitee has not met such standard
of conduct, shall be a defense to Indemnitee's claim or create a presumption
that Indemnitee has not met any particular standard of conduct. For purposes of
this Agreement, the termination of any claim, action, suit or proceeding, by
judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law.

9. Non-exclusivity, Etc. The rights of Indemnitee hereunder shall be in addition
to any other rights Indemnitee may have under the Certificate of Incorporation
or Bylaws of the Company or the Delaware General Corporation law or otherwise.
To the extent that a change in the Delaware General Corporation Law (whether by
stature or judicial decision) permits greater indemnification by agreement than
would be afforded currently under the Certificate of Incorporation and Bylaws of
the Company and this Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change immediately upon the occurrence of such change without further
action by the Company or Indemnitee. In the event of any change in any
applicable law, statute or rule which narrows the right of a Delaware
corporation to indemnify a member of its board of directors or an officer,
employee, agent or fiduciary, such change, to the extent not otherwise required
by such law, statute or rule to be applied to this Agreement, shall have no
effect on this Agreement or the parties' rights and obligations hereunder.

10. Period of Limitations. No legal action shall be brought and no cause of
action shall be asserted by or in the right of the Company or any affiliate of
the Company against Indemnitee, Indemnitee's spouse, heirs, executors,
administrators or personal or legal representatives after the expiration of two
years from the date of accrual of such cause of action, and any claim or cause
of action of the Company or its affiliate shall be extinguished and deemed
released unless asserted by the timely filling of a legal action within such
two-year period; provided however, that if any shorter period of limitations is
otherwise applicable to any such cause of action such shorter period shall
govern.

11. Amendments, Etc. No supplement, modification nor amendment of this Agreement
shall be binding unless executed in writing by both of the parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver.

12. Subrogation. In the event of payment under this Agreement, the Company shall
be subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and shall do everything that
may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.

13. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, Certificate of Incorporation or Bylaws of the
Company or otherwise) of the amounts otherwise indemnifiable hereunder.

14. Binding Effects, Etc. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Company, spouses, heirs, and personal and legal
representatives. The Company shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all, or a substantial part, or the business and/or assets of the
Company, by written agreement in form and substance satisfactory to Indemnitee,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform if no such
succession had taken place. This Agreement shall continue in effect regardless
of whether Indemnitee continues to serve as an officer or director of the
Company or of any other enterprise at the Company's request.

15. Notice. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed duly given (i) if delivered by
hand and signed for by the party addressed, on the date of such delivery, or
(ii) if mailed by domestic certified or registered mail with postage prepaid, on
the third business day after the date postmarked. Addresses for notice to either
party are as shown on the signature page of this Agreement, or as subsequently
modified by written notice.

16. Severability. The provisions of this Agreement shall be severable in the
event that any of the provisions hereof (including any provision within a single
section, paragraph or sentence) are held by a court of competent jurisdiction to
be invalid, void or otherwise unenforceable, and the remaining provisions shall
remain enforceable to the fullest extent permitted by law. Furthermore, to the
fullest extent possible, the provisions of this Agreement (including without
limitations, each portion of this Agreement containing any provision held to be
invalid, void or otherwise unenforceable, that is not itself invalid, void or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.

17. Consent to Jurisdiction. The Company and Indemnitee each hereby irrevocably
consent to the jurisdiction of the courts of the State of Delaware for all
purposes in connection with any action or proceeding which arises out of or
relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the Court of
Chancery of the State of Delaware in and for New Castle County, which shall be
the exclusive and only proper forum for adjudicating such a claim.

18. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws.

         IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the _____ day of ___________, 200___.

___________________________            BEACON POWER CORPORATION

__________________________________     By: ___________________________
         Signature                     Name:
                                       Title:
Address:___________________________    Address: 234 Ballardvale Street
                                                Wilmington, Massachusetts 01887Exhibit 10.1

 

IN THE UNITED STATES BANKRUPTCY
COURT

FOR THE DISTRICT OF DELAWARE

 

	
  In re:

  	
   

  	
  :    Chapter 11

  
	
   

  	
   

  	
  :    

  
	
  NORTHWESTERN CORPORATION,

  	
   

  	
  :    Case No. 03-12872 (CGC)

  
	
   

  	
   

  	
  :    

  
	
   

  	
  Debtor.

  	
   

  	
  :    Hearing Date:  

  
	
   

  	
   

  	
  :    Objection Deadline: 

  
	
   

  	
   

  	
  :    

  
	
   

  	
   

  	
  :    

  
				

 

DEBTOR’S MOTION FOR
ORDER APPROVING STIPULATION AMONG DEBTOR, CLARK FORK AND BLACKFOOT, LLC,
ATLANTIC RICHFIELD COMPANY, UNITED STATES, STATE OF MONTANA, AND THE
CONFEDERATED SALISH AND KOOTENAI TRIBES

 

NorthWestern Corporation (the “Debtor” or “NOR”), as
debtor and debtor-in-possession, hereby moves the Court, pursuant to Section
105(a) of Title 11 of the United States Code (the “Bankruptcy Code”) and
Rule 9019 of the Federal Rules of Bankruptcy Procedure, for the entry of an
order approving the stipulation among the Debtor, Clark Fork and Blackfoot, LLC
(“Clark Fork”), Atlantic Richfield Company, the United States, the State of
Montana and the Confederated Salish and Kootenai Tribes (the “Stipulation”). In
support of this Motion, the Debtor respectfully represents as follows:

 

JURISDICTION

 

1.             This
Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. This
is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). Venue is proper
before this Court pursuant to 28 U.S.C. §§ 1408 and 1409.

 

BACKGROUND

 

2.             On
September 14, 2003 (the “Petition Date”), the Debtor filed a voluntary petition
for relief under Chapter 11 of the Bankruptcy Code. The Debtor continues
to operate its

 

 

 

businesses and manage its properties as a debtor-in-possession pursuant
to Sections 1107 and 1108 of the Bankruptcy Code.

 

3.             No
request has been made for the appointment of a trustee or examiner in this
case. The Official Committee of Unsecured Creditors was appointed by the
Office of the United States Trustee on September 30, 2003.

 

4.             NOR is a publicly traded Delaware corporation which was
incorporated in 1923. NOR and its direct and indirect non-Debtor energy
subsidiaries comprise one of the largest providers of electricity and natural
gas in the upper Midwest and Northwest regions of the United States, serving
approximately 608,000 customers throughout Montana, South Dakota and Nebraska.[(1)

 

RELIEF REQUESTED

 

5.             By
this motion (the “Motion”), NOR seeks an order approving the Stipulation in
connection with the Debtor’s Motion for Order Pursuant to Bankruptcy Rule 9019
Approving Settlement Agreement Among Debtor, Clark Fork and Blackfoot, LLC and
Atlantic Richfield Company dated October 17, 2003 (Dkt. No. 256) (the “ARCO
Motion”). As set forth more fully in the Stipulation, the United States,
on behalf of U.S. Environmental Protection Agency and the U.S. Department
of the Interior, the State of Montana (the “State”) and the Confederated Salish
and Kootenai Tribes(2) (the “Tribes,” collectively with the United States
and the State, the “Government Parties”) agree to withdraw their objections to the
ARCO Motion, subject to the

 

(1) A more detailed overview is set forth in the Affidavit of
William M. Austin in Support of First Day Motions filed with the Court on
the Petition Date (Docket Entry No. 2).

 

(2) Under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. §§ 9601 et seq. (“CERCLA”), as
amended by the Superfund Amendments and Reauthorization Act of 1986, Pub.L. No.
99-49, 100 Stat. 1613, the Tribes are granted the authority and responsibility
to act as natural resource trustees.

 

 

2

 

conditions set forth in, and the Court’s approval of, the Stipulation
and the Settlement Agreement (as defined below).

 

BASIS FOR RELIEF

 

6.             On
February 13, 2002, The Montana Power Company merged into The Montana Power
Company, LLC, a Montana Limited Liability Company (“MPC LLC”). At the
time of the merger, MPC LLC acquired the assets and liabilities of The
Montana Power Company’s natural gas and electric utility businesses, which
included a small, hydroelectric dam located approximately five miles southeast
of Missoula, Montana at the confluence of the Clark Fork River and Blackfoot
River at Milltown, Montana, known as the Milltown Dam (the “Dam” or “Milltown
Dam”).

 

7.             The
Milltown Dam was built in the period 1906 to 1907 to provide hydroelectric
power to a nearby lumber-mill. The Milltown Dam continues to be operated
as a run-of-the-river dam. Run-of-the-river means that outflow from the dam
equals inflow to the reservoir from the two rivers, to the extent possible. The
dam is presently comprised of five discrete sections with a total crest length
of 668 feet. These include a 220-feet-long spillway section, a
54-feet-long radial gate section, a 26-feet-long divider block, a 126-feet-long
intake/powerhouse structure, and a 244-feet-long non-overflow right abutment. Three
of the sections, the spillway, radial gate, and powerhouse, are capable of
passing water under normal circumstances. Each of these sections, however,
has a different outlet elevation. Along the full length of the spillway is
a flashboard structure equipped with 44 five-feet wide by eight-feet high slide
panel assemblies. Each of the slide panels can be raised and lowered
independently. The panels allow the reservoir to rise to the normal pool
level and provide control of spill over the spillway section of the Dam. The
radial gate is 42.5 feet wide by 16.75 feet high.

 

 

3

 

8.             Historic
mine operations along the Clark Fork River and its tributary streams began in
the late nineteenth century. It was the common practice of these early
mine operators to place mine wastes in or adjacent to the streams. Mine
wastes may contain heavy metals, and the movement of the river waters caused
these mine wastes to move downstream and settle in the Dam reservoir. Approximately
7 million cubic yards of sediments contaminated with heavy metals now reside in
the Dam reservoir (the “Milltown Site”). The Anaconda Company was an owner
and operator of mine properties near Butte and Anaconda. The Atlantic Richfield
Company (“Atlantic Richfield”) acquired The Anaconda Company in 1977 and merged
with The Anaconda Company in 1981.

 

9.             In
1983, the Milltown Site was listed by the Environmental Protection Agency (“EPA”)
on the National Priorities List by publication in the Federal Register on
September 8, 1983, at 48 Fed. Reg. 40658 pursuant to the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended (“CERCLA”). EPA
claims that contaminated sediments in the reservoir should be removed to
protect human health and the environment. EPA identified Atlantic Richfield
Company as one party that is potentially responsible for contamination in the
reservoir, based, in part, on its acquisition of and merger with The Anaconda
Company (“Anaconda”). Anaconda once owned and operated mine properties upstream
from the Milltown Site, and allegedly placed mine waste in areas where it could
flow downstream into the reservoir. EPA also named The Montana Power Company (“MPC”)
as a potentially responsible party (“PRP”) for the reservoir. MPC operated the
Dam in compliance with its Federal Energy Regulatory Commission (“FERC”)
license. As part of its FERC license compliance, MPC periodically dredged the
Milltown Dam reservoir, depositing

 

 

4

 

sediments on the land around the reservoir. NOR assumed MPC’s PRP status
when NOR completed its acquisition of MPC LLC in February 2002.(3)

 

10.           On
November 15, 2002, NOR entered into that certain Environmental Liabilities
Support Agreement (the “Environmental Support Agreement”) (a copy of which is
annexed to the ARCO Motion as Exhibit A) with NorthWestern Energy,
LLC (“NOR LLC”), its wholly-owned subsidiary and operator of the Milltown
Dam.

 

11.           The
Environmental Support Agreement attempts to limit NOR’s maximum liability to
NOR LLC in respect of Environmental Liabilities (as such term is defined
in the Environmental Support Agreement) to a maximum cumulative amount of
$10 million. NOR LLC was subsequently renamed Clark Fork and
Blackfoot LLC.

 

12.           The
remedial action proposed by the EPA for the Milltown Site includes removal of
the spillway and radial gate section of the Milltown Dam, and related
reclamation of Milltown Project lands. Current estimates with respect to the
total cost of the remedy of the Milltown Site range from a low of approximately
$90 million to an amount in excess of $150 million, exclusive of any
state-imposed restoration plan and FERC license surrender costs. Since NOR, due
to its status as a PRP at the Milltown Site, is subject to CERCLA joint and
several liability, NOR could be exposed to funding 100% of the remedy costs.

 

13.           On
October 17, 2003, the Debtor filed the ARCO Motion requesting entry of an order
approving the settlement agreement among the Debtor, Clark Fork and Atlantic
Richfield Company (the “Settlement Agreement”). Under the Settlement Agreement,
the Debtor would pay Atlantic Richfield a sum of money and in exchange Atlantic
Richfield would arrange to

 

(3) Following NOR’s acquisition of MPC LLC, NOR changed the name
of this acquired entity to NorthWestern Energy, LLC.

 

 

5

 

remove the spillway and radial gate and remove or otherwise respond to
contaminated sediments associated with the Milltown Dam. The terms of the
Settlement Agreement are set forth in detail in the ARCO Motion and the Settlement
Agreement.(4) On January 8, 2004, Atlantic Richfield Company filed its
proof of claim, Claim No. 488, with the Debtor’s claims agent, asserting a
claim in an unliquidated amount, based on remedial costs estimated to be
between $104,200,000 and $164,200,000.  That claim would be resolved by
the Settlement Agreement, consistent with the Stipulation.

 

14.           In
November 2003, the United States and the State each filed objections to the
Settlement Agreement (the “Objections”). The Objections asserted, inter alia: (a) that since the Government Parties did not
participate in the Settlement Agreement, even though the Government Parties had
claims and rights against the Debtor that were allegedly affected by the
Settlement Agreement, the Settlement Agreement should not be approved; (b) that
the Settlement Agreement implied that the Debtor’s liability to the Government
Parties is limited to no more than $2.5 million when its liability had in fact
not yet been determined or capped as to such parties; and (c) that the Debtor
and Clark Fork are not separate entities but are alter-egos of each other.

 

15.           On
April 14, 2004, the United States filed its proof of claim, Claim No. 1054,
with the Debtor’s claims agent in an amount in excess of $100,000,000 which
amount includes at least $14,053,436.40 for unreimbursed response costs and
approximately $95,000,000 in connection with additional response activities and
the cost of implementing additional response actions under CERCLA. On April 8,
2004, the State filed its proof of claim, Claim No. 1047,

 

(4) A copy of the Settlement Agreement is attached to the ARCO
Motion as Exhibit B. Any capitalized terms used herein but not otherwise
defined shall have the meaning ascribed to such terms in the Stipulation.

 

 

6

 

with the Debtor’s claims agent in an approximate amount of
$135,280,000.00. On April 12, 2004, the Tribes filed their proof of claim,
Claim No. 1053, with the Debtor’s claims agent in the amount of $60,000,000. The
United States, the State, and the Tribes reserved their rights to amend their
claims.

 

16.           Prior
and subsequent to the filing of the Objections, the Government Parties engaged
in negotiations for a resolution of their natural resource restoration claims (“Restoration
Claims”) and other rights against the Debtor pertaining to the Milltown Site. The
parties have reached a framework for resolving these claims and rights and
intend to continue negotiations to finalize the specific terms of settlement as
part of the Consent Decree (as defined in the Stipulation) to be entered by the
U.S. District Court for the District of Montana.

 

THE STIPULATION

 

17.           Pursuant
to the terms of the Stipulation (a copy of which is annexed hereto as Exhibit A),
the Debtor, with some anticipated funding from Clark Fork, shall contribute
$3.9 million for restoration work within a certain area of the Milltown Site
known by the parties as the “Project Area.” The $3.9 million shall be paid to
the State, which will complete certain restoration work at the Milltown Site as
the lead natural resource trustee for the Milltown Site. As more fully
described in the Stipulation, of the $3.9 million for restoration work, $2.5
million shall be obtained from the $2.5 million set aside in the Settlement Agreement
to partially satisfy the Restoration Claims and rights of the State and Tribes.
The remaining $1.4 million contribution is anticipated to be obtained through
the proceeds of an insurance premium refund and the sale of certain lands in
and around the Milltown Site owned by Clark Fork. In the event that the
insurance premium refund and the sale of certain lands owned by Clark Fork does
not satisfy the $1.4 million contribution, any remaining funds needed may be
obtained from the sale

 

 

7

 

of specific Clark Fork water rights. Clark Fork shall also offer the
State, or the State’s designee, Clark Fork’s remaining Milltown Site land
holdings and water rights which are not sold in accordance with the Stipulation
within two and one half years following the Effective Date of the Consent
Decree for the Milltown Site, plus ten days, as a contribution toward the
restoration work outside of the Project Area, and as partial consideration for
liability releases to be defined in the Consent Decree for the Milltown Site.

 

18.           The
Debtor shall make the payment of $2.5 million, described in Paragraph 17
above, to the State and shall make the $7.5 million payment under the
Settlement Agreement to Atlantic Richfield (notwithstanding any provision in
the Settlement Agreement to the contrary) on the same day, which day shall be
within thirty (30) days after the effective date of the Consent Decree (as
defined in the Stipulation).

 

19.           In
the event the insurance premium refund and the sale of certain Clark Fork
assets are insufficient to satisfy the $1.4 million contribution as described
in Paragraph 17 above, the Debtor shall guarantee payment of this contribution.

 

20.           In
addition, under the Stipulation, the Debtor and/or Clark Fork shall pay $50,000
in satisfaction of all of their historical mitigation obligations arising from
demolition of FERC-licensed structures at the Milltown Reservoir Site in
accordance with the terms and conditions established in the Consent Decree for the
Milltown Site.(5) FERC is not a party to the Stipulation, however, and
will not be a party to the Consent Decree. While FERC is not a party to the
Stipulation, the Stipulation, Settlement Agreement and any Consent Decree
contemplate entry of a FERC order addressing the Debtor’s obligations arising
from the FERC-licensed structures at

 

(5) While the EPA’s initial proposed remedy (announced to the
public in April 2003) did not involve removal of the Milltown Dam powerhouse,
subsequent public hearings disclosed a desire on the part of the public to
remove the entire Milltown Dam generation facility. As a result, ARCO, NOR and
the Government Parties have agreed to a modification of the proposed remedy to
incorporate removal of he Milltown Dam powerhouse.

 

 

8

 

the Milltown Site. The Consent Decree for the Milltown Site will
incorporate the FERC’s order issued in response to the Clark Fork’s FERC
Operating License Surrender Application.

 

21.           On
or before confirmation of the Debtor’s plan of reorganization,(6) the
Debtor shall assume its obligations under its executory contract with Five
Valleys Land Trust involving the sale of the Alberton Gorge property along the
Clark Fork River in northwestern Montana, and its ultimate transfer to the
State. The Debtor shall not reject or disclaim this property sale contract in
bankruptcy and will grant, without additional payment, such extensions of the
executory contract to Five Valleys Land Trust as are reasonably necessary to
finalize and close this transaction.

 

22.           In
addition to the provisions described above, the parties to the Stipulation
agree that the Settlement Agreement shall be construed and operate as follows:

 

                a.             The Debtor’s contribution to the
State for implementation of the Government Parties’ restoration activities in
the Project Area shall be $2.5 million; this amount is separate and apart from
the Debtor’s $1.4 million guarantee of additional funding to the State for such
restoration, as set forth in detail in Paragraph 17 above and Paragraph 6(C) of
the Stipulation, and the consideration to be provided by Clark Fork by way of
offering to the State, or the State’s designee, Clark Fork’s remaining Milltown
Dam land holdings and water rights which are not sold in accordance with the
Stipulation within two and one half years following the Effective Date of the
Consent Decree for the Milltown Site, plus ten days, as a contribution toward
the restoration work outside of the Project Area, and as partial consideration
for liability releases to be defined in the Consent Decree for the Milltown
Site.

 

(6) On March 11, 2004, the Debtor filed its proposed plan of
reorganization with the Court (the “Plan”).

 

 

9

 

                b.             The contribution to be paid by the
Debtor to Atlantic Richfield under the Settlement Agreement shall be the
remaining $7.5 million.

 

                c.             The $500,000 monthly payments to be
paid by the Debtor into the $10.0 million escrow account under the Settlement
Agreement shall be paid in alternating $500,000 installments, with the first
installment being paid into an escrow fund for the State’s benefit, the second
installment being paid into an escrow account for Atlantic Richfield’s benefit,
and the payments alternating between those accounts until the full $2.5 million
payment has been made into the escrow account for the State. Unless otherwise
ordered by this Court, the Debtor shall continue making such payments until it
has sufficiently funded its monetary obligations to the State and Atlantic
Richfield under this Stipulation and the Settlement Agreement. Notwithstanding
any provision in the Settlement Agreement to the contrary, the Debtor shall
begin to make these monthly payments within thirty (30) days of the Court’s approval
of this Stipulation.

 

23.           Notwithstanding
any provision in the Settlement Agreement to the contrary, Atlantic Richfield
shall instruct American Specialty Lines Insurance Company to designate the
Debtor and Clark Fork as additional insureds under coverage A of the policy of
insurance issued to Atlantic Richfield on June 30, 2003.

 

24.           Upon
Court approval of the Stipulation, the Government Parties withdraw their
objections to the Settlement Agreement, consistent with the Stipulation, and to
the Debtor’s ARCO Motion, subject to the Stipulation. It is contemplated that
after entry of the Consent Decree for the Milltown Site and upon said Consent
Decree becoming final and entry of a final FERC order, the United States and
the State shall withdraw their respective claims relating to the Milltown Site
in the Debtor’s bankruptcy proceeding.

 

 

10

 

25.           In
the event, the parties fail to obtain judicial approval of this Stipulation and
the Settlement Agreement, or if the Consent Decree for the Milltown Site does
not become fully effective pursuant to the conditions in the Consent Decree,
then neither the Debtor nor Atlantic Richfield shall use the Stipulation, the
Settlement Agreement or the Court’s approval of either document as a basis for
claims of estoppel or waiver of any right, claim, argument, or objection
asserted by the Government Parties.

 

26.           In
the event that (a) the Consent Decree is not entered after it is lodged with
the court; (b) the Consent Decree does not become fully effective pursuant to
the conditions in the Consent Decree; or (c) after entry of the Consent Decree,
the Consent Decree is overturned on appeal and subsequent negotiations are
required, and any of the parties to this Stipulation assert that the
negotiations have irretrievably broken down then the Settlement Agreement shall
be deemed void ab initio, and all funds in the escrow account shall continue to
be held in trust in the escrow account pending further order of this Court.

 

27.           Furthermore,
in the event that (a) the Consent Decree is not entered after it is lodged with
the court; (b) the Consent Decree does not become fully effective pursuant to
the conditions in the Consent Decree; or (c) after entry of the Consent Decree,
the Consent Decree is overturned on appeal and subsequent negotiations are
required, and any of the parties to this Stipulation assert that the
negotiations have irretrievably broken down then the Government Parties may
assert their prior objections and other objections to the Settlement Agreement
or any similar agreement, and all of their claims, rights and arguments
regarding the Settlement Agreement shall be preserved.

 

28.           In
the event that the Debtor’s Plan is confirmed and becomes effective before a
Consent Decree is entered or becomes fully effective, and if such Consent
Decree subsequently

 

 

11

 

is not entered or does not become fully effective, then all of the
Government Parties’ rights, claims, arguments and objections shall be
preserved.

 

LEGAL BASIS FOR RELIEF

 

29.           This
Court may authorize the Debtor to resolve the objections filed by the
Governmental Parties and the environmental liability claims with Atlantic
Richfield on the basis set forth in the Stipulation and Settlement Agreement. A
compromise that involves a disposition of property of the estate must be
approved by the Bankruptcy Court if it is outside the ordinary course of
business. See 11 U.S.C. § 363(b) ; Myers
v. Martin (In re Martin), 91 F.3d 389, 394 (3d Cir. 1996). Bankruptcy
Rule 9019 sets forth the standard for Bankruptcy Court approval of
compromises, providing that “[o]n motion by the [debtor-in-possession] and
after notice and a hearing, the court may approve a compromise or settlement.” Bankruptcy
Rule 9019(a). “[T]he decision whether to approve a compromise under
Rule 9019 is committed to the sound discretion of the Court, which must
determine if the compromise is fair, reasonable, and in the interest of the
estate.” In re Louise’s, Inc., 211 B.R. 798, 801 (D. Del. 1997)
(declining to approve settlement found to be sub  rosa plan); see  In re Marvel Entertainment Group, Inc., 222 B.R.
243 (D. Del. 1998) (proposed settlement held in best interest of the estate).

 

30.           The
“best interest” test requires the Debtor to show that the settlement or
compromise is “fair and equitable.” In re Woodson, 839 F.2d 610, 620
(9th Cir. 1988); see also  Protective Comm. for
Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414,
424 (1968); Tindall v. Mavrode (In re Mavrode), 205 B.R. 716, 721
(Bankr. D.N.J. 1997).

 

31.           In
determining whether a proposed settlement is fair and equitable, the Court
should consider “(a) the probability of success in the litigation; (b) the
difficulties, if any, to be encountered in the matter of collection;
(c) the complexity of the litigation involved, and the

 

 

12

 

expense, inconvenience and delay necessarily attending it; (d) the
paramount interest of the creditors. . . “. Woodson, 839 F.2d at
620; In re Martin, 91 F.3d at 393 (3d Cir. 1996); see also
In re Columbia Gas Sys., Inc., Nos. 91-803, 91-804, 1995 WL 404892, at
*1 (Bankr. D. Del. June 16, 1995) (“Relevant factors to consider in evaluating
the settlement include the probability of success in the claims litigation,
complexity of litigation, expense, inconvenience and delay attending to the
litigation, interests of creditors, and the extent to which the settlement is
truly the product of arm’s length bargaining and not of fraud and collusion.”).

 

32.           The
Debtor submits that upon approval of the Stipulation, Settlement Agreement,
entry of a final Consent Decree for the Milltown Site and FERC order issued in
response to the Clark Fork’s FERC Operating License Surrender Application, the
Debtor’s financial liability to Atlantic Richfield and the Governmental Parties
will be limited satisfying the standards set forth above.

 

33.           Consistent
with the terms of the Settlement Agreement and the Stipulation and upon entry
of a final Consent Decree for the Milltown Site and FERC order, the Debtor will
be liquidating any remaining financial exposure to the Government Parties at
the Milltown Site under relevant statutes.

 

34.           Consistent
with the Environmental Support Agreement, the Debtor will continue to comply
with any remaining FERC administrative orders and dam safety and operating
requirements relating to ongoing site operations, including dam operation,
which shall continue until the removal of the dam and related structures is
completed.

 

35.           Further,
the Stipulation and the Settlement Agreement provide a mechanism to resolve
actual and potential disputes and controversies that, if permitted to continue,
could involve time-consuming and expensive proceedings for the Debtor. Pursuant
to the Stipulation

 

 

13

 

and the Settlement Agreement, the Government Parties have agreed to
work with the Debtor in good faith and on an expedited basis to obtain a final
Consent Decree for the Milltown Site and FERC order. Absent approval of the
Settlement Agreement and Stipulation, the Debtor could be forced to engage in
protracted litigation with Atlantic Richfield and the Governmental Parties and
face potential financial exposure far in excess of $10 million.

 

36.           Because
of the importance of the Settlement Agreement and the Stipulation to NOR and
the bankruptcy estate, NOR is requesting Court approval at this time in order
to provide assurance that it is authorized to rely on and proceed with the
Settlement Agreement and the Stipulation and the final negotiations of a
Consent Decree for the Milltown Site and FERC order.

 

37.           The
Stipulation is in the estate’s best interest because it resolves the
Governmental Parties objections to the Settlement Agreement which resolves all
claims between Atlantic Richfield and NOR. This, in turn, will save NOR
substantial administrative expenses (including attorneys’ fees) and preserves
the assets of the estate.

 

38.           Accordingly,
the Debtor submits that there is more than sufficient business justification
for Court approval of the Stipulation. The Debtor will benefit greatly from
resolving the dispute with Atlantic Richfield and the Governmental Parties in
an expeditious and cost-effective manner. The Debtor therefore believes that
the Stipulation is appropriate in light of the relevant factors and its terms
should be approved.

 

NOTICE

 

39.           Notice
of this Motion has been provided to: (i) the Office of the United States
Trustee; (ii) counsel for the Debtor’s Pre-Petition Lenders;
(iii) counsel for the Debtor’s Post-Petition Lenders; (iv) counsel
for the Official Committee of Unsecured Creditors; (v) the

 

 

14

 

Securities and Exchange Commission; (vi) the Federal Energy Regulatory
Commission; (vii) the Montana Public Service Commission; (viii) the
South Dakota Public Utilities Commission; (ix) the Nebraska Public Service
Commission; (x) counsel for Atlantic Richfield; (xi) the
Environmental Protection Agency; (xii) the United States Department of
Justice; (xiii) the Montana Department of Environmental Quality; (xiv) the
State of Montana Department of Justice, Natural Resource Damage Program; (xv)
counsel for the Confederated Salish and Kootenai Tribes; and (xvi) all
parties that have requested special notice in this Chapter 11 case
pursuant to Bankruptcy Rule 2002. In light of the nature of the relief
requested herein, the Debtor submits that no other or further notice is
required.

 

PRIOR RELIEF

 

40.           No
previous motion for the relief requested herein has been made to this or any
other court.

 

[CONCLUDED ON NEXT PAGE]

 

 

15

 

WHEREFORE, the Debtor respectfully requests that the
Court enter an order (i) approving the Stipulation in substantially the
form annexed hereto, (ii) authorizing the Debtor to execute any documents
and take any action necessary or desirable to consummate the Stipulation, and
make the payments into escrow as described therein and (iii) granting such
other and further relief as is just and proper.

 

 

	
  Dated: 

  	
  Wilmington, Delaware

  	
   

  
	
   

  	
  May      , 2004

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Respectfully submitted,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PAUL, HASTINGS, JANOFSKY & WALKER LLP

  
	
   

  	
   

  	
  600 Peachtree Street

  
	
   

  	
   

  	
  Suite 2400

  
	
   

  	
   

  	
  Atlanta, GA 30308

  
	
   

  	
   

  	
  Jesse H. Austin, III

  
	
   

  	
   

  	
  Karol K. Denniston

  
	
   

  	
   

  	
  Telephone: (404) 815-2400

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  And

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GREENBERG TRAURIG, LLP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Scott D. Cousins (No. 3079)

  
	
   

  	
   

  	
  Victoria Watson Counihan (No. 3488)

  
	
   

  	
   

  	
  William E. Chipman, Jr. (No. 3818)

  
	
   

  	
   

  	
  The Brandywine Building

  
	
   

  	
   

  	
  1000 West Street, Suite 1540

  
	
   

  	
   

  	
  Wilmington, DE 19801

  
	
   

  	
   

  	
  Telephone: (302) 661-7000

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Co-Counsel for the Debtor and
  Debtor-in-Possession

  

 

 

16

 

EXHIBIT A

 

[Stipulation]

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