ML023180316

Notice of Entry of Order on Motion for Order Approving Entry Into Rescission Agreement

ML023180316
Person / Time
Site:	Diablo Canyon
Issue date:	11/05/2002
From:	Zapparoni C Howard, Rice, Nemerovski, Canady, Falk & Rabkin, Pacific Gas & Electric Co
To:	Office of Nuclear Reactor Regulation, US Federal Judiciary, Bankruptcy Court, Northern District of California
References
01-30923 DM, 94-0742640
Download: ML023180316 (9)

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'.. 15 16 17 In re PACIFIC GAS AND ELECTRIC COMPANY, a California corporation, Debtor.

Federal I.D. No. 94-0742640 Case No. 01-30923 DM Chapter 11 Case NOTICE OF ENTRY OF ORDER ON MOTION FOR ORDER APPROVING ENTRY INTO RESCISSION AGREEMENT NOTICE OF ENTRY OF ORDER JAMES L. LOPES (No. 63678)

WILLIAM J. LAFFERTY (No. 120814)

CEIDE ZAPPARONI (No. 200708)

HOWARD, RICE, NEMEROVSKI, CANADY, FALK & RABKIN A Professional Corporation Three Embarcadero Center, 7th Floor San Francisco, California 94111-4065 Telephone:

415/434-1600 Facsimile:

415/217-5910 Attorneys for Debtor and Debtor in Possession PACIFIC GAS AND ELECTRIC COMPANY UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION 18 19 20 21 22 23 24 25 26 27 28

PLEASE TAKE NOTICE that on November 5, 2002, the above-captioned Bankruptcy Court filed its "Order On Motion For Order Approving Entry Into Rescission Agreement," a copy of which is attached as Exhibit 1.

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15 16 17 18 19 20 21 22 23 24 25 26 27 DATED: November 5,2002.

HOWARD, RICE, NEMEROVSKI, CANADY, FALK & RABKIN A Prossiona Corporation By:

"--ýCEIDE ZAPPARONI Attorneys for Debtor and Debtor in Possession PACIFIC GAS AND ELECTRIC COMPANY WD 1!0502/1-1419909/1034770/vl NOTICE OF ENTRY OF ORDER 1 2

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9 10 11 JAMES L. LOPES (No. 63678)

WILLIAM J. LAFFERTY (No. 120814)

CEIDE ZAPPARONI (No. 200708)

HOWARD, RICE, NEMEROVSKI, CANADY, FALK & RABKIN A Professional Corporation Three Embarcadero Center, 7th Floor San Francisco, California 94111-4024 Telephone:

415/434-1600 Facsimile:

415/217-5910 Attorneys for Debtor and Debtor in Possession PACIFIC GAS AND ELECTRIC COMPANY UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION 12 13

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,15 16 In re PACIFIC GAS AND ELECTRIC COMPANY, a California corporation, Debtor.

Federal I.D. No. 94-0742640 Case No. 01-30923 DM Chapter 11 Case Date:

November 5, 2002 Time:

9:30 a.m.

Place:

235 Pine St., 22nd Floor San Francisco, California Judge:

Hon. Dennis Montali ORDER ON MOTION FOR ORDER APPROVING ENTRY INTO RESCISSION AGREEMENT The Court, having considered the Motion of Pacific Gas and Electric Company

("PG&E") For Order Approving Entry Into Rescission Agreement (the "Motion"), the Memorafidum Of Points And Authorities In Support Of Debtor's Motion, and the Declaration of Lori I. Austin in support thereof, any opposition to the Motion, the record in this case, and any admissible evidence and argument presented to the Court, hereby finds as follows:

A.

Adequate notice of the Motion was given to parties in interest as appropriate under the circumstances; B.

The "Rescission Agreement and Mutual Release" between the Debtor and ORDER ON MOTION FOR ORDER APPROVING ENTRY INTO RESCISSION AGREEMENT EXHIBIT 1 FILED NOV 0 5 2002 UNITED STATES BANKRUPTCY COURT SAN FRANCISCO, CA 17 18 19 20 21 22 23 24 25 26 27 28

1 RCN Telecom Services ("RCN") (the "Rescission Agreement"), a true and correct copy of 2

which is attached hereto as Exhibit A, is based upon sound business justifications and is fair, 3

reasonable and in the best interests of the Debtor's Chapter 11 estate; 4

C.

There is good cause for granting the Motion.

5 Based on the foregoing, IT IS HEREBY ORDERED that:

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1.

The Motion is GRANTED; 7

2.

PG&E is authorized to enter into the Rescission Agreement, a true and 8

correct copy of which is attached hereto as Exhibit A, and the Rescission Agreement is 9

hereby approved; 10

3.

PG&E and RCN shall be bound by all the terms of the Rescission 11 Agreement and all terms and conditions therein; 12

4.

PG&E and RCN are authorized and directed to take such actions as are HOWARD 13 reasonably necessary to perform their respective obligations under the Rescission m

14 Agreement. Specifically, pursuant to Section 363(b)(1) of the Bankruptcy Code, PG&E is tALK 15 authorized to pay to RCN the amount of $873,170.72 as provided for in the Rescission 16 Agreement.

17 DATED: November 5_2002 DENNIS MONTALI 18 19 HONORABLE DENNIS MONTALI UNITED STATES BANKRUPTCY JUDGE 20 21 22 23 24 25 26 27 28 ORDER ON MOTION FOR ORDER APPROVING ENTRY INTO RESCISSION AGREEMENT

-RECISSION AGREEMENT AND MUTUAL RELEASE This Rescission Agreement and Mutual Release ("Rescission Agreement") is entered into as of this,-L' day of May, 2002 by and between Pacific Gas and Electric Company, a California corporation located at 77 Beale Street, San Francisco, CA 94105 ("PG&E") and RCN Telecom Services, Inc., a Delaware corporation located at 1400 Fashion Island Blvd., Suite 100, San Mateo, CA 94404 ("RCN") (collectively, the "Parties").

RECITALS A.

WHEREAS, the Parties entered into a Master Conduit and Facilities License and Lease

-Agreement, dated November 20, 2000 (the "License Agreement"); and B.

WHEREAS,PG&E filed a Chapter 1 1 bankruptcy petition pursuant to Title 11 United States Codes §§ 101 et seq. in the United States Bankruptcy Court for the Northern District of California, San Francisco Division ("Bankruptcy Court") on April 6, 2001; and C.

WHEREAS, a dispute has arisen regarding the Parties' respective obligations under the Agreement ("Dispute"); and D.

WHEREAS, by this Rescission Agreement, the Parties desire to rescind the License Agreement and fully and finally resolve and settle their dispute in accordance with the terms and conditions set forth herein;

.THEREFORE, the Parties agree as follows:

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EFFECTIVE DATE

a.

The effectiveness of this Agreement is contingent upon Bankruptcy Court approval of this Rescission Agreement.

b.

The Parties shall seek Bankruptcy Court approval in accordance with the procedures described below:

1.

As soon as practicable, upon execution and delivery of this Rescission Agreement by the Parties, PG&E shall file and serve a motion in Bankruptcy Court for approval to resolve all disputes between the Parties arising from the Ucense Agreement through the Rescission Agreement ("Motion");

2.

The Parties shall use their best efforts to obtain from the Bankruptcy Court an order granting the Motion ("Approval Order"),

c.

The Agreement shall be effective the day the Approval Order is final, the time for appeal has expired, and no one has timely filed a notice of appeal. ("Effective Date").

EXHIBIT A

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2.

RECISSION OF ENSE AGREEMENT The License Agreement, including RCN's license of and right to license PG&E's facilities, is rescinded, null, and void.

3.

RETURN OF CONSIDERATION.

a.

Within ten (10) business days of the Effective Date, PG&E shall return to RCN

$873,170.72, which is the amount RCN paid pursuant to Section 8.1 of the License Agreement without interest, $876,553.92, minus the costs PG&E has incurred to review RCN's Facility Application Notices pursuant to Section 3.8 of the License Agreement, $3,383.20.

b.

Within ten (10) business days of the Effective Date, RCN shall return to PG&E all maps of PG&E's facilities that PG&E provided to RCN ("PG&E Maps").

4.

RELEASE OF ALL CLAIMS AND KNOWING WAIVER

a.

Each Party hereby releases and forever discharges the other from all actions, causes of action, claims and demands that it, its affiliates, subsidiaries, officers, partners, directors, agents, employees or legal representatives may now have, or that may subsequently accrue, against the other, its affiliates, subsidiaries, officers, directors, agents, employees or legal representatives in any way relating to, or arising from, the License Agreement, including, but not limited to, claims for breach of contract, breach of the implied covenant of good faith and fair dealing, performance and monies owed, waiver, estoppel, misrepresentation, and contract termination.

b.

Each Party hereby expressly acknowledges that there is a risk that, subsequent to the execution of this Rescission Agreement, it may incur, suffer or sustain injuries, losses, damages, costs, attorneys fees, expenses or any of these which are in some way caused by or are connected with the released matters encompassed in this Rescission Agreement which are unknown or unanticipated at the time this Rescission Agreement is signed, or which are presently not capable of being

• ascerfained. It further acknowledges that there is a risk that such damages as are known may become more serious than now anticipated or expected. Nevertheless, each Party hereby expressly acknowledges that this Rescission Agreement has been negotiated and agreed upon in light of these realizations, and each of them,

-and hereby waives all rights which it may have had in these unsuspected claims.

Each Party specifically waives its right under California Civil Code Section 1542, which provides as follows:

"A GENERAL RELEASE DOES NOT EXTEND TO THE CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTION OF THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."

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Each Party also expressly waives any equivalent or similar provision of any statute or other law of the United States, or any state or jurisdiction.

c.

Each Party represents, warrants and covenants that no other person or entity has or claims to ha-)e any interest in the claims, demands, damages, policies, actions or causes of action which are the subject of controversy as set forth above; that it has the sole rights and exclusive authority to ehter into and execute this Rescission Agreement, subject to Bankruptcy Court approval; that it has not sold, signed, _

transferred, conveyed, encumbered or otherwise disposed of any of the claims, demands, damages, actions or causes of action; and that it will hold the other harmless in the event that any person or entity contends otherwise.

d.

• The Parties acknowledge that this Rescission Agreement represents a compromise settlement of disputed claims and that neither the contents of this Rescission Agreement, nor the fact of its execution, nor any other fact, matter or thing concerning or in any way connected with the making or execution of this Rescission Agreement, is intended to be, nor shall it be construed as, an admission of liability, obligation or responsibility, which liability, obligation and responsibility is, and continues to be, denied.

5.

NO REJECTION The Parties expressly agree and acknowledge that the rescission of the Licensing Agreement accomplished through this Agreement heither constitutes a "rejection" of the Licensing Agreement by PG&E pursuant to the provisions of section 365 of the Bankruptcy Code, nor may be deemed a rejection of the Licensing Agreement. RCN hereby waives and releases any claim to damages against PG&E based upon a rejection or deemed rejection of the Licensing Agreement by PG&E.

6.

AUTHORITY Each person executing this Rescission Agreement warrants and represents that he has the authority to bind the Party on whose behalf his or her signature appears. PG&E's authority is subject to Bankruptcy Court approval. The parties to this Rescission Agreement acknowledge that they have read, and that they fully understand the terms of this Rescission Agireement, and that they each have been advised of the legal effect and consequences of this Rescission Agreement by their respective legal counsel.

7.

BINDING EFFECT This Rescission Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective past, present, and future officers, directors, shareholders, owners, partners, trustees, trustors, agents, assigns. fiduciaries, employees, insurers, heirs, executors, administrators, and all parent, subsidiary or affiliated business entities, and their predecessors and successors in interest.

8.

REPRESENTA'.,,JNS

a.

Each Party hereby represents and warrants to each of the other that (1) the execution of this Rescission Agreement has been duly authorized by all necessary corporate, shareholder and similar actions; (?) this Agreement has been duly executed and delivered and constitutes the legal valid and binding obligation of such Party, enforceable against such Party is in accordance with its terms; and (3) the execution and delivery of this Agreement and the performance by such Party of its obligations hereunder do not and will not conflict with, contravene or breach, and law, judgment, order or material contract applicable to or binding on such Party or any of its properties or assets.

b.

RCN represents and warrants that it (1) has not filed a proof of claim in PG&E's bankruptcy proceeding; (2) has not shown, displayed, or provided any PG&E Maps to any third party; and (3) will not show, display, or provide any PG&E Maps to any third party prior to returning the PG&E Maps as specified in Paragraph 3.b. above.

9.

INTEGRATION This Rescission Agreement expressly supersedes all previous discussions, negotiations, understandings; and agreements, written or otherwise relating to the Rescission Agreement and the License Agreement. This Rescission Agreement may only be amended in a writing executed by all parties.

10.

CONSTRUCTION OF AGREEMENT Counsel for the respective Parties.have reviewed and participated in the drafting of this Agreenment. Consequently, the principle of construction of contracts that ambiguities shall be resolved against the drafter shall not be used or applied in the interpretation of this Agreement.

11.

EXPENSES Each Party shall pay its own expenses, professional fees and other costs connected with or associated with the negotiation and execution of this Agreement. I6 the event any Party breaches this Agreement, the breaching Party shall pay all costs and expenses (including attomeys' fees and expenses) incurred by the other Party or Parties in connection with or arising out of such breach.

12.

GOVERNING LAW This Rescission Agreement shall be governed by the laws of the State of California, without regard to principles of conflicts of law. The Bankruptcy Court shall retain sole and exclusive jurisdiction to adjudicate disputes regarding this Rescission Agreement.

13.

COUNTERPARTS This Rescission Agreement may be executed in counterparts, each of which, taken I

together shall cL.itute one 0ocument.

14.

COOPERATION The parties to this Rescission Agreement agree to cooperate fully and execute any and all supplemental documents and to take all additional actions necessary or appropriate to give full force and effect to the terms and intent of this Rescission Agreement.

PACIFIC GAS AND ELECTRIC COMPANY By:

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