AGREEMENT
This Agreement, entered into as of January 16, 1997, by
and among RW Power Partners, L.P., a Delaware limited
partnership ("RW Power"), Ridgewood Electric Power Trust I,
a Delaware business trust signing as the general partner of
RW Power ("Ridgewood Trust"), and Virginia Electric and
Power Company, a Virginia public service company ("Virginia
Power"), providers as follows:
RECITALS
1. Virginia Power entered into a contract with WE GEN
Inc., effective February 20, 1992 (the "PPA"), for the
purchase and sale of the electrical output from an electric
generating facility with a nameplate rating of 2900
kilowatts to be located near South Boston in Halifax County,
Virginia (the "Facility").
2. On October 16, 1992, WE GEN Inc. assigned to RW
Power, and RW Power assumed, the rights, duties and
obligations of WE GEN Inc. under the PPA.
3. On July 5, 1995, Virginia Power purported to
cancel the PPA based on RW Power's alleged breach of
contract.
4. Thereafter, on July 24, 1995, RW Power initiated
an action in the United States District Court for the
Eastern District of Virginia (the "District Court") seeking
a declaratory judgment and other relief as might be
appropriate, alleging Virginia Power's purported
cancellation of the PPA was not authorized by the PPA and
therefore was not effective (the "Lawsuit").
5. Virginia Power and RW Power now wish to cause the
Lawsuit to be dismissed, in consideration of which they
mutually agree to terminate the PPA and to forgo their
respective rights and obligations under the PPA with respect
to performance not yet due thereunder. RW Power and
Ridgewood Trust also make certain covenants respecting the
future use and operation of the Facility, in consideration
of which and conditioned on RW Power's and Ridgewood Trust's
adherence to which, Virginia Power agrees to pay RW Power
the sum of $3,750,000, all as provided hereinbelow.
NOW THEREFORE, the parties hereto, for good and
valuable consideration exchanged, the receipt of which is
hereby acknowledged, agree as follows:
ARTICLE I
The parties will instruct their counsel to endorse a
proposed order, in form as attached hereto as Exhibit A (the
"Dismissal Order"), and present it to the District Court for
entry. Thereafter, the parties shall take, or cause to be
taken, such further actions as may be reasonably necessary
to cause the District Court to enter the Dismissal Order.
Each party shall bear its own counsel fees and costs with
respect to the Lawsuit and efforts required to obtain entry
of the Dismissal Order.
ARTICLE II
The PPA shall be terminated effective as of the date
that the Dismissal Order is entered (the "Effective Date").
Thereafter, neither Virginia Power nor RW Power shall have
any obligation to the other with respect to any performance
or obligations under or in connection with the PPA that
shall be executory as of the Effective Date, except that RW
Power shall continue to have the obligation to indemnify
Virginia Power as required by Article II of EXHIBIT B,
General Terms and Conditions of the PPA, for matters that
occurred before the Effective Date. Except as otherwise
expressly provided herein, any unpaid amounts that Virginia
Power or RW Power may owe each other with respect to
performance received pursuant to, or obligations arising
under or in connection with, the PPA prior to the Effective
Date shall be payable in accordance with the terms of the
PPA and shall not be deemed to be waived, discharged or
released by or as a result of this Agreement. Except for
those obligations expressly reserved herein, Virginia Power
and RW Power hereby waive, discharge and release any and all
rights and claims each may have against the other as of the
Effective Date in connection with the PPA or the performance
or breach thereof, including but not limited to any
obligation of RW Power to refund the excess of levelized
capacity payments over non-levelized capacity payments which
is attributable to the early termination of the PPA, and the
matters that were the subject of the Lawsuit, whether known
or unknown, whether in contract, tort or otherwise, and
whether at law or in equity.
ARTICLE III
RW Power and Ridgewood Trust covenant as follows:
(a) From and after the Effective Date, and not
withstanding any other legal right or entitlement which RW
Power may have, RW Power shall not offer to sell or
otherwise tender to Virginia Power, or otherwise demand that
Virginia Power purchase, accept or pay for, any electrical
energy or capacity (or both) of the Facility (other than in
response to specific requests or offers of Virginia Power
made after the Effective Date or pursuant to other
arrangements which are satisfactory to Virginia Power in its
sole discretion).
(b) From and after the Effective Date, RW Power will
not deliver any electrical energy from the Facility to the
Virginia Power transmission system except as may be
permitted by paragraph (c) below. RW Power may, however,
operate the Facility for the purposes of carrying on non-
generating activities and may generate electrical energy in
sufficient quantities to meet the parasitic load of the
Facility.
(c) RW Power shall not sell, or offer to sell,
electrical energy or capacity (or both) produced from the
Facility to any person or entity except an investor-owned
utility that purchases such electricity for resale, on a
wholesale or retail basis, to customers for and use in areas
outside of those areas of Virginia or North Carolina served,
directly or indirectly, by Virginia Power transmission or
distribution facilities (i.e., outside the "Virginia Power
Control Area"). Nothing herein shall be deemed to prohibit
any sale by RW Power of electricity to an investor-owned
electric utility that may be interconnected with Virginia
Power, including such utilities that from time to time may
sell electricity for end use within the Virginia Power
Control Area, so long as such sales are not in furtherance
of particular transactions for resale of such electricity
for and use within the Virginia Power Control Area.
(d) Virginia Power may disconnect the Facility from
the Virginia Power transmission system, and any contracts
between Virginia Power and RW Power respecting such
interconnection and related services shall be terminated.
RW Power shall not request, and Virginia Power shall have no
obligation to respond to a request by RW Power, that the
Facility be reconnected to the Virginia Power transmission
system except to facilitate a transaction permitted pursuant
to (c) above and then only after Virginia Power and RW Power
shall have executed and delivered such interconnection and
transmission services agreement(s) as are customary.
(e) In order to obtain for Virginia Power the
continued benefits of this Agreement:
(i) Ridgewood Trust agrees it will not directly or
indirectly sell or otherwise transfer, whether
voluntarily or involuntarily, or permit to be
transferred to any other person or entity any of
its general partnership interests in RW Power or
any controlling interest in Ridgewood Trust unless
Ridgewood Trust obtains from such transferee a
covenant expressly for the benefit of Virginia
Power that such transferee will be bound by and
liable for the breach of this Agreement;
(ii) RW Power agrees it will not (and Ridgewood
Trust agrees not to permit RW Power to) take on
any additional or replacement general partner in
RW Power, or directly or indirectly transfer,
whether voluntarily or involuntarily, or permit to
be transferred to any other person or entity
ownership or control of RW Power, in whole or in
part, unless RW Power obtains from such general
partner or transferee a covenant expressly for the
benefit of Virginia Power that such general
partner or transferee will be bound by and liable
for the breach of this Agreement;
(iii) RW Power agrees it will not (and
Ridgewood Trust agrees not to permit RW Power to)
transfer, either directly or indirectly, all or
substantially all of the assets of the Facility or
the rights to the site on which the Facility is
located, whether or not as an intact electrical
generating facility, to any person or entity
unless such person or entity shall provide a
covenant expressly for the benefit of Virginia
Power to be bound by and liable for breaches of
this Agreement; provided, however, that the
foregoing prohibition shall not apply to any sales
of one or more pieces of equipment constituting
the Facility so long as such items are removed
from the site on which the Facility is located.
(f) In any action, suit or proceeding for equitable
relief to enforce the provisions of Article III of this
Agreement, RW Power and Ridgewood Trust agree that Virginia
Power will be excused from demonstrating any actual or
prospective injury or irreparable harm that it otherwise
might be required to demonstrate in order to obtain such
equitable relief.
ARTICLE IV
Upon the Effective Date, Virginia Power shall deliver
to RW Power the following: (a) a check in the amount of
$3,750,000 payable to RW Power and (b) the letter of credit
drawn on NatWest Bank N.A. that RW Power delivered to
Virginia on or about July 10, 1995 (the "Documents").
Ridgewood Trust and RW Power acknowledge that Virginia
Power's obligation to make the $3,750,000 payment referenced
in this Article IV is in consideration of Ridgewood Trust's
and RW Power's covenants as stated in Article III above.
Further, Virginia Power's obligation to make such $3,750,000
payment is conditioned upon Ridgewood Trust's and RW Power's
strict adherence to such covenants. If Ridgewood Trust or
RW Power shall breach any such covenant, RW Power shall
forfeit all right to such $3,750,000 payment, and RW Power
and its general and limited partners who shall receive
proceeds or other benefits (cash or otherwise) from such
payment, and their successors and assigns, shall be liable
to Virginia Power, jointly and severally, for the repayment
of such amount to Virginia Power together with interest on
such amount from the date of payment through the date of
repayment computed at the legal rate of interest in
Virginia.
ARTICLE V
This Agreement shall be binding on the parties and the
successors and assigns of each.
ARTICLE VI
Nothing in this Agreement is intended to convey or
create any right or benefit in favor or any person or entity
not a party hereto.
ARTICLE VII
This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia,
without regard to conflict of laws provisions. The parties
agree that the Circuit Court of the City of Richmond,
Virginia (the "Richmond Circuit Court") shall have exclusive
jurisdiction to resolve any dispute that may arise hereunder
and that the Richmond Circuit Court has personal
jurisdiction over the parties for that purpose.
ARTICLE VIII
This Agreement states the entire agreement of the
parties with respect to its subject matter and supersedes
any prior or contemporaneous understandings or agreements
with respect to such subject matter. The prior agreement
between RW Power and Virginia Power entered into as of
December 16, 1996 is hereby cancelled, terminated and
abrogated by the mutual agreement of the parties.
ARTICLE IX
This Agreement may be executed in multiple copies, each
of which shall be considered an original.
In Witness Whereof the parties have caused their duly
authorized representatives to sign this Agreement as
indicated below, intending to be legally bound by the terms
hereof.
Virginia Electric and Power Company [seal]
By: ______________________________
Title: ______________________________
RW Power Partners, L.P. [seal]
By: ______________________________
Title: ______________________________
for and on behalf of Ridgewood Electric Power Trust I
Ridgewood Electric Power Trust I [seal]
By: /s/Xxxxxx X. Swanson________
Title: President______________
