ML20118B195
| ML20118B195 | |
| Person / Time | |
|---|---|
| Site: | Comanche Peak  |
| Issue date: | 07/05/1988 |
| From: | BRAZOS ELECTRIC POWER COOPERATIVE, INC., TEXAS UTILITIES ELECTRIC CO. (TU ELECTRIC) |
| To: | |
| Shared Package | |
| ML20106B138 | List: |
| References | |
| 2.206, NUDOCS 9210010022 | |
| Download: ML20118B195 (102) | |
Text
_ ______ _. _.__._.__._... _.
_ _ _ ~ _ _....,
4 I
J e
1 e
I s
}
AGREEMENT between URAZO6 ELECTRIC POWER COOPERATTVE, INC.
Bruce and TEXAS UTILITIES ELECTRIC COMPANY I
/,
TU Bactric I
Dated as of Aaly 5,1988 l
)
1 J
l 4
I 9210010022 920921 PDR ADOCK 0500044S C
TABLE OP CONTENTS 1
PAGE i
otrisiTioss 8
R eclT A Ls..........
A RTICLE !. SALE AND PURCH ASE.....
9 i
1.1 Properties and Assets Sold and Purchased 9
1.2 Closing 10 1.3 Transfer of Purchased Assets.
10 l
i 1.4 Method of Payment.
10 l.5 Payment of Total Payment.
10
( a ) P a y m e n t U po n S ig ni ng.....................
l0 I
(b) P a y m e n t a t t he Nsi ng................
10 (c) Deferred Payment.
10 ARTICLE U, REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF BRAZGS 11 i
2.1 Legal Status.
11 j
2.2 Authority for Agreement.
11 2.3 Approvals.
12 2.4 Liabilities.
13 I
2.5 Taxes.
14 7
2.6 Title to Re al P roperty....................
14 2.7 Title to Personal Property.................
15 2.8 Litigation.
15 2.9 C o n tr a c u...........................
16 2.10 Exclusion of Implied Warranties...
16 2.11 Accuracy of Representations and Warranties.
16 i
ARTICLE IU, REPRESENTATIONS, WARRAN. 'ES AND AGREEMENTS i
O F T U E L E CT RI C..........................
16 3.1 C orpora t e S ta tus.....................
16 1
3.2 Authority for Agreement.
17 I
3. 3 A pp r o v als........................
17 3.4 Authority for TUC Guaranty........
18 3.5 Accuracy of Representations and Warrantles.....
18 A RTICLE IV, PRE-CLOSING OBLIG ATIONS..............
19 i
/
4.1 Representations, Warranties and Covenants.............
19 j
4.2 Abatement of Participation in Per.11ng Litigation..........
19 j
4.3 A gree m ent to Obtain A pprovals..................
23
-i-J r
.e M
ARTICLE V, CONDITIONS TO OHLIG ATIONS TO CLOSE............
23 5.1 Cor.ditions to Obligation of Brazos to Close.....
23
)
(a) Representations and Werranties.................
23 (b) Compliance With Agreoment 24
'l (c) Receipt of Payment.
?4 (d) Receipt of Closing Documents..................
24 (c) Consent to Assignment Agreement.
24 (f) Rec eip t o f 1.R.S. De ter mina tion...............
24 A.2 Conditions to Obligation of TU Electric to Close 24 (a) Representations and Warranties...............
25 (b) Compliance with Agreement 25 (c) Delivery of Pending Litiga'.lon Documentation...........
25 (d) R ec e ip t o f Clo sin g Docu a',.9 s................
26 e
5.3 Conditions to Obugation of Both Parties to Close.
26 (a) No Adverse Proceeding..
26 (b) Waiver of Right of First Refusal.................
26 I
(c) Approval by PUC 28 (d) Approval by NRC.
29 (e) Approv al o f R E A, C F C and F F U...............
31 (f) Execution nf Transmission Services Agreerr.ent 32 I
ARTICLE VI. CLOSING DOCUMENTS FROM UR AZOS.
32 1
6.1 Deeds and Transfers, etc.
32 l
6.2 Lien Search 32
- 6. ')
Certificate of Secretarial Of ficer...............
32
/
6.4 Counsel Opinion 33 i
/
ARTICLE Vll. CLOSING DOCUMENTS 1.90M TU ELECTRIC.
33 4
7.1 Proof of Payment.
33 7.2 Other Instruments......
33 7.3 Certificate of Secretarial Officer.................
33 Co un s e l's Op in ion........................
34 7.4 I
ARTICLE V!H, CLOSING AND INDEMNIFIC ATION 34 i
8.1 Indemnifica tion by Drazos....................
34 I
8.2 Inde mnifica tien by TU Elec tric..................
34 I
8.3 Survival of Representation and Warranties.............
35
}
8.4 Notice and Opportunity to Participate in Defense........
35 ARTICLE 1X, SETTLEMENT OF PENDING LITIG ATION............
35 9.1 Dra zos R e le a se.........................
35
.I 9.2 Drazos Covenant Not to Sue 36 l
9.3 T U Elec tric Relea se.................,.....
40 9.4 TU Electric Covenant Not to Sue..................
41 9.5 Assumption of Liabilities and Obligations and Indemnification.....
44 i
9.6 Cov enan t o f Coopera tion.....................
46 i
9.7 Ter m ina tion o f Par ticipa tion...................
46 9.8 TU Electric Actions and Litigation Costs..............
48 9.9 Termination of Joint Ownership Agreement Relationship.......
49.. -. -
-.. =
ARTICLE X, TERMIN ATION OF AGREEMENT................
49 10.1 Termination of Agreement by TU Electric.............
49 6
10.2 Termination of Agreement by Brazos 50
.I 10.3 Automatic Termination 50 10.4 Termination of Covenants, Releases and Indemnifications.......
51 ARTICLE XI. MISCELL ANEOUS PROVISIONS 51 1 1.1 B ulk S al e s L a w W a i v e r......................
51 II.2 Further Assurance 51 11.3 No Third Party Beneficiaries......
51 11.4 Default 52 11.5 Property and Transfer Taxes.
52 (a) P ro pe r ty T ax es........................
52 i
(b) Transf er T axes.................
52 53 11.6 E xpenses.........
11.7 Governing Law...
53 I
11.8 Announcements.....
53 11.9 Entire Agreement, Amendments 53 11.10 A ssigns, e t c..............
53 11.11 Notices......................
53 11.12 H e a d i n gs...........................
54
! !.13 Execution and Counterparts 54 11.14 Interest on Past Due Payments.................
54 11.15 Use of Representations or Recitals 55 l
11.16 Separate Litigation..........
55 11.17 Construction of Comanche Peak 55
)
1 1.18 S eve rability..........................
- 5 11.19 Time of the Essence.
56 a
I a
1
)
I i
}
}
l J
).
i
- 111-L
Im OF EX1HBfrS 9
I PAGE I
Exhibit A -
Assignment Agreement 1
Exhibit 8 -
Guaranty 2
Exhibit C -
Brazos Members 3
Exhibit D -
Mortgage 3
i Exhibit E -
Note 4
I Exhibit F -
Special Wtteranty Deed With Vendor's Lien and Bill of Sale 7
Exhibit G -
Notice of Virst Right of Refusal 26 Exhibit H -
Joseph Robert Riley Opinion 33 i
Exhibit I -
Worsham, Forsythe, Sampels & Wooldridge Opinion 34 l
Eyhii>it J -
Brazos Release 36 Exhibit K -
Brazos Covenant Not to Sue 38 Exhibit L -
TU Electric Release 41 I
Exhibit M -
TU Electric Covenant Not to Sue 42 i
Exhibit N -
TU Electric Assumption and Indemnity Agreement 45
- l Exhibit 0 -
Brazos Indemnity Agreement 46 i
/
I I,
)
.l
~
J, 1
-iv-
THIS AGREEMENT is made and entered into this 5th day of July,1988 by and between the following parties:
f BRAZOS ELECTRIC POWER COOPERATTVE, INC., a Texas non-profit electric l
cooperative corporation, having its prircipal office at 2404 LaSalle Avenue, Waco, McLennan County, Texas ("Brazos"), and TEX AS UTILITIES ELECTRIC COMPANY, a Texas corporation, having its principal office at 2001 Bryan Street, Suite 1900, Dallas, Dallas County, Texas ("TU Electric", and where appropriate in the context of this Agreement, TU Electric may include TU Electric's corpcrate predecessors, Dallas Power j
i Light Company, Texa Electric Service Company and Texas Power & Light Company).
DEFINITIONS
[
As used in this Agreement and in the Exhibits attached hereto, unless otherwise specified therein, the following terms shall1. ave the following meanings:
(a)
" Agreement" means this Agreement and the Schedule and all Exhibits
()
attached to this Agreement.
j (b)
" Assignment Agreement" means the Assignment Agreement attached hereto as Exhibit A.
y (c)
"Brazos Comanche Peak Debt" means the aggregate of the indebtedness of I
Brazos to the R6A, the CFC and the FFB with respect only to Comanche j
r.ak, which at the date hereof is the unpaid principal amount of One Hundred Ninety Four Million, Six Hundred Ninety Thousand, Three Hundred Fifty and l
14/100 Dollars ($194,690,350.14), and is evidenced and represented by
)
documentation previously delivered by Brazos to TU Electric.
I (d)
" Business Day" means a day on which banks in Dallas, Texas are open for regular banking businesa.
J (e)
"CFC" means the Nati>nal Rural Utilities Cooperative Finance Corporation,
'}
or its successor.
t l l
(f)
" Closing" me:ns the consummation, pursuint to this Agreement, of the sale i
of the Purchased Assets by Grazos to TU Electric and the purchase of the Purchased Assets by TU Electric from Brazos, as described herein.
I (g)
" Closing Date" means such date as may be agreed upon by the parties for the l
Closing, which date shall be within thirty (30) days after the last to occur of the NRC Affirmative Date, the PUC Affirmative Date or the granting of the necessary approval; of the REA, the CFC and the FFB with respect to the Brazos Comanche Peak Debt referred to in Section 5.3(e) hereof.
(h)
" Closing Payment" means the aggregate of (i) Two Milljon, Four liundred i
Fifty Four Thousand, Eight liundred Ninety Dollars ($2,454,890), plus (ii) the I
amount of principal pild by Drazos with respect to the Brazos Comanche Peak Debt from (and including) March 1,1988 until the Closing Date and not previously paid as part of the Signing Payment, plus (iii) an incremental amount calculated at a rate equal to nine and one half percent (91/2%) per i
annum on said principal outstanding from time to time from (and including) l March 1,1988 until the Closing Date and not previously paid as part of the Signing Payment.
I (i)
~ Comanche Peak" means ne nuclear-fueled electric generating facility under construction on certain lands situated in llood and Somervell Counties, Texas, I
l and consisting of two units having a nominal capacity of 1,150 megawatts each, and related properties, and is 1:.e aggregate and combination of the I
Station, Fuel and Transmission Facilities, and all other rights and interests
.l associated with or relating to all of the same.
?
" Deferred Payment" shall have the meaning set out in Section 1.5(c) hereof.
1 (k)
"FFB" means the Federal Financing Bank, or its successor, j
(0
" Fuel" means the Comanche Peak nuclear fuel, irrespective of chemical and/or physical form, and the rights and interests related thereto.
(m)
" Guaranty" means the form of Guaranty of TUC attached hereto as Exhibit B.
(n)
" Joint Ownership Agreement" means that certain instrument entitled on the cover page thereof " Joint Ownership Agreement Between Dallas Power &
=
Ught Company, Texas Electric Service Company, Texas Power i Light Company, Texas Utilities Generating Company, Texas Municipal Power Agency and Brazos Electric Power Cooperative, Inc. for Comanche Peak
)
Steam Electric Station," executa) on January 2,1979, together with and as odified by that certain instrument entitled on the cover page thereof
" Modification of Joint Ownership Agreement Between Dallas Power & Light Company, Texas Electric Service Compsny, Texas Power & Ught Company, Texas Utilities Generating Company, Texas Municipal Power Age.ncy end Brazos Electric Power Cooperative, Inc. For Coman3e Peak Steam Electric Station," executed on June 1,1979, together with and as amended by (i) the I
Amendment of Jcsint Ownership Agreement, executed on December 9,1980, between Dallas Power & Light Company, Texas Electric Service Company, Texas Power & Light Company, Texas Utilities Generating Company, TMPA, t
j Brazos and Tex-La, together with and as amended by (ii) the Second g
Amendment of Joint Ownership Agreement, executed on February 12, 1982, f
between Dallas Power & Light Company, Texas Electric Service Company, Texas Power & Light Company, Texas Utilities Generating Company, TMPA, A
l Brazos and Tex-La.
j (o)
" Members" means the twenty (20) Texas non-profit electric cooperative corporatioru that are the members of Brazos, as set out in Exhibit C attached
~
I hereto.
)j (p)
" Mortgage" means the purchase money mortgage in the form of the Deed of
'l i
Trust and Security Agreement attached hereto as Exhibit J creating a first lien and granting to Brazos a first and prior security interest in the Purchased
)
Assets to secure payment of the Note.
1 (q)
"New Lawsult" means the lawsuit that, pursuant to Section 4.2(e) of this l
Agreement, may be filed by Brazos or TU Electrie, and if filed will be filed in J
}
Dallas County, Texas, in the event that nonsults are taken by Brazos and TU Electric in the Pending Dallas Suit pursuant to Section 4.2(d) of this Agreement or this Agreement is terminated under Article X hereof. 4
1 (r)
" Note" means the non-rsegotiable promissory note, in the form attached hereto u Exhibit E, to be made and delivered at Closing by TU Electric as f
provided in Section 1.5(c) of this Agreement.
j (s)
"NRC" means the L'nited states Nuclear Regulatory Commission, or its successcr.
(ti "NRC Affirrntive Date" shall have the meaning set out in Section 5.3(d)
[
hereof.
(u)
" Owners" means collectively TMPA, TU Electric, Tex-La and Brazos, as t
owners of Comanche Peak in accordance with the terms of the Joint I
Ownership Agreement, or singularly any of such parties.
(v)
"Pending Austin Suits" means Cause No. 399,482 - Brazos Electric Power Coopera tive, Inc.
v.
Texas Utilities Co mpany, Texas Utilities Electric Company, Texas Utilities Mining Co mpany, and Texas Utilities Services l
Incorporated. -in the District Court of Travis County, Texas, 345th Judicial f
Intrict, and Cause No. 399,336 -- Tex-La Electric Cooperative of Texah Inc., and Texas Municipal Power Agency v. Texas Utilities and Texas Utilities A
Electric Company. - in the District Court of Travis County, Texas, 98th Judicial District.
l (w)
"Pending Dallas Sult" means Cause No. 86-4809-A - Texas Utilities Electric Company v. Tex-La Electric Cooperative of Texas, ine., et al. - in the I
]
District Court of Dallas County, Texas,14th Judicial District.
(x)
"Pending Houston Suit" means Cause No. 83-29889 - Charlos A. Atchison, et al v. Brown & Root, Inc., et a3 - in the District Court of Harris County, I
l Texas, 215th Judicial District, removed in April,1988, to the United States l
District Court fee the Southern District of Texas, Houston Division, and numbered Civil Action No. H-88-1409, I
l (y)
"Pending Litigation" means the Pending Dallas Suit and ths Pending Austin Suits.
~4-
(z)
"Pending Somervell County Suit" means Cause No. 2692 - Clementine Mathews and her husband Dolphin Mathews v. Cory anche Peak Electric Steam Station, et al,, - in the District Court of Somervell County, Texaa, lath l
Judicial District.
(aa)
" Permitted Exceptions" means Matters affecting Brazos' title to all or any part of the Purchased l
Assets existing immediately prior to the time the same were acquired t
by Brazos from or through TU Electric or TU Electric's predecessors-I in-title f
Matters affecting Brazos' title to all or any part of the Purchased Assets created by the acts or omissions of (1) all parties owning interests in Comanene Peak at the time involved acting collectively, or (ii) the I'roject Manager or TU Electric or both l
The Uen for unpaid taxes and assessments relating to tares and I
assessments unpaid by parties other than Brazos or imposed with respect to the periods prior to which Brazos owned the property 1
f interest involved and after the Closing:
The righu of third parties in and to the l'urchased Assets created by l
the acte or omissions of parties other than Brazos and not arising by, g
through cr under Brazos
-I The Joint Ownership Agreement and all licenses, pernuts, leases, I
franchises and contracts relating to the Purchased Assets appued for, obtained or created by the acts or omissions of (i) any Owner other I
than Brazos, (11) all parties owning interests in Comanche Peak at the I
.)
time involved acting collectively, or (iii) the Project Mutager or
]
TU Electric or botht and
)
l IJens (existing or ir.choate) in favor of mechanics, materialmen, j
laborers and suppliers of materials, goods, servicas, equipment, inveatory (of sut> contractors) and labor to or for the Station, the Fuel
.5-
or the TrtSmission Facilities created by the acts or omissions of (i) any Owner other than Brazcs, (ii) all parties owning interests in I
g Comanche Petk at the time involved acting collectively, or (iii) the l
Project Manager or TU Electric or both.
I (bb)
" Project Manager" means TU Elect.rie deflgnated and acting as such in j
accordance (or purportedly in accordance) with the terms of the Joint i
Ownership Agreement, l
(ce)
"PUC" means the Public Utility Cominission of Texar, or its successor.
1 (dd)
"PUC Affirmative Date" shall have the meaning set out in Section 5.3(c)
.\\
hefeof.
(ee)
" Purchased Assets" means the aggregate of all that part of Comanche Peak 4
(as Comanche Peak exists and is constituted on the Closing Date) owned by
}
Etazos or to which Brazos has a right, title or interest, including without j
limitation the following, to the extent of Drazos' ownership interest therein:
l all real property and rights appurtenent thereto, and improvements thereon and fixtures thereto; that portion of Brazos' Certificate of Convenience and a
Necessity heretofore issued by the PUC relative to Drazos' ownership interest I
in the Station and the Transmission Facilities; all personal property and rights I
j therein, tangible or intangible, including all machinery, equipment, furniture l
and vehIcleq all rights and entitlements to electric power and energy that i
g may hwreafter be generated at Comanche Peak; all sights or claims with l
respect to charges, payments or prepaid items; all warranties and claims and proceeds therefrom; all rights ander all agreements, permits, licenses, 3
l franchises and authorizations; all intellectual property rights; all computer l
hardware and software and related rights and interests; all books and records l
in the possession of the Project Manager oc otherwise owned by all of the
.I l
Owners in combination; the Fuel; the Transmission Faellities; and all other properties and assets pertaining to Comanche Peak; but excluding, however, any Subject Claim of Drazos arising out of or under this Agreement or the I,1, i
.n other documents delivered to Brazos pursuant hereto; and exclucing all documents and other written material relating to Comanche Peak in the custody, control or possession of Brazos, and its agents, attorneys and l
contultants, except all such documents and other written material pertaining
)
l to or involving the Prending 1.itigation other than copies nf those which have Men filed !n the Pending 1.itigation or at the NRC or which are privileged or l
which may w the work product or the product of Brazos' attorneys' or conselta^ts';oint defense activities or correspondence to or frorr T11 Electric I
or its attorneys or other correspondence or documents copies of which have t
g bcen providd to TU Electric or its attorneys.
8 (ff) b "REA" means the Rural Electrific.ition Admmistration of the t;nited States Department of ;.griculture, er its successor.
'Jg)
" Signing Payment" means the aggregate of (i) Fifteen Million, Dree T.undred Twent/ Two Dousand, Five liundred Eighty One Dollars ($15,322 581), plus 3
i i
(ii) the amount of principal paid by Brazos with respect to the Brazos
}
Comanche Peak Debt during the period from tand including) March 1,1988 until the date hereof, plus (iii) an incremental amount calculated at a rate g
equal to nine and one-half percent (91/2%) per annum on said principal l
outstanding from time to time from (and !ncluding) March 1,1988 until the
.I l
date hereof.
)
(hh)
Site' means approximately 7,689 acres owned (in fee or other estate or interest) by the Owners, as tenants in common, and located in liood and l
Somervell Counties, Texes, and more particularly described on the Schedule attached hereto.
(ii)
"Special Warranty Deed with Vendor's Lien and Bill of Sale" means the form 2
l of Special Warranty Deed with Vendor % Ihn and Bill of Sale attached hereto es Exhibit F.
I (jj)
" Station" means the Site, all improvements thereon (includt.g Squaw Creek
.)
lake and Park) and all fixtures and attachments thereto, as well as (i) all personal property thereon and associated therewith or related thereto and owned by the Owners, and (11) all rights (tangible or intangible), and all -
easements and cther interests of any nature associated therewith or related thereto and owned by the Owners, excluding, however, the Fuel and Transmission Facilities.
I (kk)
" Subject Claims" means any and all claims, actions, controversies, causes of I
g action, dispates, demarMs and complaints of whatsoever kind or nature and whether known or unknown.
j (11)
" Tex-La" means Tex-Lr Electric Cooperative of Texas, Inc.
i I
(mm) "TNPA" means the Texas Nunicipal Power Agency.
i (nn)
" Total Payment" means the amount to be paid by TU Electri to Drazos i
hereunder in connection with the purchase of the Purchased Assets and in f
cor.nection with the settlement of the Pending Li'igation; which shall De the total of (i) the Signing Payment, (ii) the Closing Payment and (iii) the i
Deferred Payment, as descritied in Section 1.5 hereof.
i (oo)
" Transmission Facilities" means the Comanche Peak - DeCordova 345 kV electrical transmission line approximately 14.4 miles in length, and 4
associated rights-of-way, equipment, fixtures and personal property.
1 (pp)
"TUC" means Texas Utilities Company, a Texas corporation, which is the I
corporate parent of TU Electric.
A RECITAIE
.I J
A.
TU Electric is an investor-owned utility which, pursuant to a statutory merger tiot l
occurred on January T.1984, succeeded to all the rights, title and interests and J
g assumed and became liable for all obligations of Dallas Power & Light Company, l
Texas Electric Service Company, Texas Power & Light Company, and Texas Utilities Generating Company under the Joint Ownership Agreement, and is engaged in the t
.I l
generatJon, purchase, transmission, distribution and sale of electric energy within
)
the State of Texas.
B.
Brazos is a Texas non-profit cooperative corporation, established pursuan' to Tex.
I l
l Rev. Civ. Stat. Ann. art.15286, which is engaged in the generation, transmission j
and sale of electric energy within the State of Texas.
-g.
d c,
Brezos and TU Electric have previously entered into tre Joint Ownership Agreement, p,
Brazos and TU Electrie each own an undivided interest in Comanche Peak, which in I
the case of Brazos consists of such interest in 'he Station and Fuel (stated to be an I
l undivided 3.8% interest in the conveyance involved) that was conveyed and j
transferred to Brazos by TU Electric (or its predecessors) and such interest in the 1Tansmission Faciuties (stated to be an undivided 32.2% interest in the relevant 1
instrument but is subject to adjustment) that was conveyed and transferred or
\\'
agreed to be conveyed and transferred to Brazos by TU Electric (or its I
j predecessors).
)
E.
Brazos and TU Electric have been involved in the Pending Litigation and would like to settle their disputes involved in the Pending Litigation and otherwise relating to Comanche Peak and Brazos would like to sellits interest in Comanche Peak and be 1
relieved of its obugations under the Joint Ownership Agreement and TU Electric would like to acquire such interest and is willing to relieve Brazos of such i
obligations under the Joint Ownership Agreement.
\\
F.
Brazos and TU Electric have concluded this Agreement in order to provide for the sale by Brazos and the purchase by TU Electric of all of Brazos' right, title and I
interet in Comanche Peak and the settlement cf all: ud*ct Claims between Brazos and TU Electric and between Bratos and TU Electric's affiliates pertaining to l
Comanche Peak, the Pending Litigation, and all matters in connection therewith, I
upon and subject to the terms and conditions set o.t herein.
I AR'llCLE I SALE AND PURCHASE l
l 1.1 Prperties and Assets Sold and Purchased.
Subject to the terms and
)
conditions of this Agreement, Brazos hereby agrees to sell, transfer, assign, convey and deliver to TU Electric and TU Electric hereby agrees to purchase from Brazos, and pay I
l j
,j Brazos for, the Purchtsed Assets in the mannar and at the times hereinafter described.
)
1.2 Closing. De Closing will occur at 10:00 a.m., Dallas, Texas time, on the closing Date. De Closing will be held at the offices of Worsham, Forsyths, Sampels &
i 9
gooldriMc, 2001 Bryan Street, Suite 3200, Dettlas Dallas County, Texas or at such othee address as the. parties may agree. The fact that the Closing is or was intended to be head in Dallas County shall not be used by TU Electric as evidence for venue purposes in any proceeding related to a Subject Claim arising out of or under this Agreement.
l 1.3 Transfer of Purchased Assets. At the Closing, Brazos will sell, convey, assign I
and transfer to TU Electric, and TU Electric will purchase, unser and pursuant to a form of the Special Warranty Decd with Vendor's Uen and Bill of Sale, the Purchased Assets.
I 1.4
\\1ethod of Payment. All payments made by TU Electric to Brazos under this Agreement shall be made by wire transfer of immediately available funds through the l
l federal reserve system to Brazos' bank designated in writing to TU Electric, if the due date of any payment under this Agreement falls on a day that is not a Business Day, such payment shall be paid on the first Business Day following the date on which such payment I
is due.
)
1.5 Payment of Total Payment.
TU Electric shall pay to Brazos the Total Payment as follows:
t' (a)
Payment Upon Signing.
On the date of execution of this Agreement,
\\
TU Electric will pay to Brazos the Signing Payment. Ite Signing Payment i
i shall be held in a separately segregated fund by Brazos until Closing, but h
Brazos may invest same in its sole discretion. The Sir..ag Payment will be I
~
q subject to refund prior to the Closing as provided in Article X of this Agreement. Upon the Closing, the Signing Payment will be deemod a part of I
the Total Payment.
I l
(b)
Payment at the Closing. At the Closing, TU Electric will pay to Brazos the Closing Payment.
(c)
Deferred Payment. At the Closing, TU Electric will execute and deliver to l
Brazos in payment of the remeining portion of the purchase price the Note, in an original principal amount equal to the total unpaid principal amount of die l
Brazos Comanche Peak Debt at the Closing Date, the payment of wh'.ch will be secured by the Mortgage given as a purchase money mortgage and the vendors lien provided for in the Special Warranty Deed with Vendors Uen and I
7
_u Bill of Scle, it being understood and egreed that Brazos will contemporaneously therewith assign and transfer the Note and the Mortgage together with the vendors lien retained in the Special Warranty Deed with
+
Vendors Lien and Bill of Sale to the REA pursuan' to and in accordance with l
the Assignment Agreement as a mechanism for payment of
'a Brazos j
comanche Peak Debt. The Note shall bear interest at the rate of nine and one-half percent (9-l/2%) per annum on the principal balance unpaid from time to time for tae period described therein and at the rate of eight and
)
one tialf percent (8-1/2%) per annum on the principal balance unpaid from l
l time to time for the remainder of the term thereof, which term shall be the same as the remaining term of the Brazos Comanche Peak Debt at the Closing Date.
ARTICLE !!
l REPRI'SENTATIONS, WARRANTIES AND AGREEMENTS OF BRAZOS i
l Brazos represents and warrants to, and agrees with, TU Electric as follows:
Y 2.1 Legal Status Brazos is a non-profit electric cooperative corporation, duly
\\
organized, validly existing and in good standing under the laws of the State of Texas, with k
l full, requisite corporate power and authority to carty on its business as now conducted and I
to own, sell and transfer the Purchased Assets as provided for in this Agreement.
I j
2.2 Authority for Agreement. Brazos has full, requisite corporate power and authority to execute, deliver ind perform this Agreement, the Special Warranty Deed I
with Vendor's Lien and Bill of Sale and each other agreement and instrument to be I
executed and delivered in connection with this Agreement, and to carry out its obligations hereunder and thereunder. Drazos has fuu, requisite corporate power and authority to act I
for itself and the other persons or entitles, private and governmental, acting by, through and under Grazos, in connection with this Agreement, the Special We,rranty Deed with Vendor's Lien and Bill of 3 ale and the other agreements and instruments to be executed and delivered by it pursuant hereto. This Agreement has been, and at the time of the Closing, the Special Warranty Deed with Vendor's Lien and Bl!! of Sale and such other agreements and instruments as are delivered by Brazos will have been, duly authorized,..
execeted and ce'ivered by Brazos and 'his Agreement does, and at the time of Closing, the Special Warranty Deed with Vendor's Lien and Bill of Sale and such other agreements and instruments as are delivered by Brazos will, constitute valid and legally binding
]
obligations of Brazos and the other persons or entities, private and governmental, acting f
by, through and under Brazos, enforceable against such parties in accordance with their l
respective terms. Except for the approvals set out in Section 2.3, the execution, delivery i
and performance of this Agreement, the Special Warranty Deed with Vendor's Lien and
)
Bill of Sale and such other agreements and instruments will not conflict with or result in l
l any violation of, or constitute a default under, (i) the Articles of Incorporation or by-laws
~
of Brazos, or (ii) any material provision of any mortgage, indenture, lease, agreement or other instrument, including any evidence of indebtedness, including without limitation the Drazos Comanche Peak Debt, to which Brazos, or any of Brazos' properties or assets, is subject or a party, or (iii) any permit, concession, grant, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Brazos or any of its property, including the Purchased Assets; or with the passage of time or the giving of
\\
notice or the taking of any action by any third party, have any of the c'fects described f
herein, except no representation is made with respect to any instrument, permit, I
concession, grant, franchise or license (and the laws and regulations with respect theretc)
.I
}
made or obtained by TU Electric or the Project Manager on behalf of the Owners.
l 2.3 Approvals. Drazos has obtained all necessary consents, approvp3, orders Lnd 1
authorizations of, and made all necessary registrations, declarations and filings with, each governmental authority or other entity required in connection with the execution, delivery, and performance by Brazos of this Agreement, the Special Warranty Deed with I
Vendor's Lien and Bill of Sale and the other agreements and instruments to be executed j
and delivered by Brazos hereunder, except (i) for any such required to be obtained by the Project Manager, (ii) with respect to the rights of first refusal referred to in Section 5.3(b) hereof, (iii) for any such required to be effected from the PUC and NRC referenced in Sections 5.3(c) and (d) hereof, and (iv) those that must be obtained from the REA, the CFC and the FFB referenced in Section 5.3(e). No other filing or registration with, and no l
i other consent, approval, authorization, permit, certificate or order of any court, tribunal or governmental agency or authority, Federal, state, county ce municipal, or any other entity is or will be required by any applicable statute or other an " by any judgment, j
order or decree or any rule or regulation of any court, tribunal or governmental agency or suthor
Federal, state, county or municipal, or agreement with any other entity to 1
permit Brazos to execute, deliver and perform this Agreement, the Special Warranty Deed with Vendor's Lien and Bill of Sale or any agreement or instrument required hereby to be i
)
executed and delivered by it at the Closing.
2.4 Liabilities. There are no obligations or liabilities or other obligations or
)
other evidence of indebtedness, of Brazos, including without limita tion the Brazos f
Comanche Peak Debt, whether necrued, absolute, con tingen t or otherwise, wnich I
TU Electric may become liable for or is assuming as a result of the purchase of assets f
provided for herein or which may apply with respect to the Purchased Assets, except such as currently exist with respect to Comanche Peak and which were entered into or incurred
)
by (i) all parties owning ir erests in Comanche Peak at the time involved acting f
collectively, or (ii) the Project Manager or TU Electric or both. Brazos has no debt for
[
financing its interest in Comanche Peak except for the Brazos Comanche Peak Debt and all mortgages, other tiens and security interests for all debt which applies to Drazos' interest in Comanche Peak will be released or terminated prior to or at the Closing, 'Ihe l
documentation previously delivered by Drazos to TU Electric with regard to the Brazos j
Comanche Peak Debt comprises all relevant information with respect thereto and om!ts I
no information which would be material to an understanding thereof.
The amounts i
specified by Brazcs to TU Electric as the amounts paid or payable by Drazos with respect J
to the Brazos Comanche Peak Labt during the periods of March 1, ?.988 until the date
}
hereof and from the date hereof until the Closing Date and the amount specified by Brazos to TU Electric as the unpaid principal balance of the Brazos Comanche Peak Debt at the Closing Date and the payment and other terms of such debt at such time are and will be at the Closing Date true and correct in all respects. _
^%
2.5 Taxes.
Apart from all taxes and similar charges owed by the Project Manager on behalf of all the Owners collectively, Brazos owes no taxes or similar charges s impositions with respect, or the nonpayment of which wou'd apply, to, or result in any l
lien or other encumbrance upon, the Purchased Assets to any taxing authority. No tax I
charge, tax expense or tax claim against the Purchased Assets originating with or caused l
by the action or inaction of Brazos individually or in combination with any of the Owners other than TU Electric or the Project Manager will attach to or affect any portion of the
)
Purchased Assets conveyed at the Closing.
y l
2.6 Title to Real Property. Brazos has such title in and to the Site and all real property interests therein and the real property interests included in the Transmission facilities as was conveyed to Brazos by or through TU Electric or by TU Electric's predecessors-in-title. Except in combination with, or in conjunction with action by, all of the Owners of the Site and the real property interests included in the hansmission l
l Facilities acting collectively either directly or through the Project Manager, Brazos has b
not encumbered the Site or any of the real property interests therein or the real property interests included in the Transmission Facilities with any mortgages, tiens, claims, f
charges, security interests or encumbrances, except in connection with the Brazas I
Comanche Peak Debt and other Brazos debt, all of which liens and security interests l
J pertaining to the Site or any of the real prop erty interests therein or the real property l
Interests included in the hansmission Facilities will be released prior to or at the Closing, J
g Brazos, separately or in combination with any or all of the Owners other than l
TU Electric or the Project Manager, has not taken any action which would result in the structures, improvements and firtures on such real property constituting a part of the Site I
l not being in conformity with all applicable Federal, state and local zoning, biallding, j
health, safety and environmental laws, ordinances, rules or regulations. No rotice from any governmental body, which has not otherwise been disclosed to TU Electric or the Project Manager in writing, has been served upon Brazos claiming any violation of any J
such law, ordinance, rule oc regulation or requiring any work, repairs, construction, alterations or installation on or in connection with such real property or the buildings,.
y
-- {
structures, fixtures or improvements thereon, nor to Brazos' knowledge has any such violation, which has not otherwise been disclosed to TU Electric or the Project Manager in writing, been claimed or action with respect thereto threatened.
l 2.7 Title to Personal Property.
Brazcs has the title to such interest as was conveyed to Brazos by or through TU Electric or TU Electric's predecessci-in-title in all g
of the equipment, vehicles, fixtures, machinery and other items of personal property, I
tangible and intangible, to the extent the same are parts of the Purchased Assets to be conveyed at the Closing.
Except in combination or in conjunction with action by I
l TU Electrie, the Project Manager or all of the Owners actlag collectively, and except in connection with the Brazos Comanche Peak Debt and other Brazos debt, the security interests in connection with which p rtaining to the equipm ent, vehicles, fix tures, I
machinery and other items of personal property, tangible and intangible, which are part of the Purchased Assets will be released prior to or at the Closing, Brazos has not, apart i
from any personal property and similar charges owed by the Project Manager on behalf of
{
all of the Owners collectively, encumbered the equipment, vehicles, fixtures, machinery h
'k and other items of personal property, tangible and intangible, which are part of the l
Purchased Asse ts, with any mortgages, tiens, claims, charges, security interests, a
I encumbrances or other restrictions or limitstions, and assuming payment by TU Electric
- I y
of any and all transfer taxes that may become due on account of the transfer of the l
Purchased Assets contemplated by this Agreement and az :ept for the llens for ad valorem I
taxes not yet due and payable.
I 2.8 g
Litigation. There are no Subject Claims, suits or proceedings, administrative or otherwise, pending (i.e. Brazos having been served with procew with ;4spect thereto or 3
I otherwise having knowledge thereof) against Brazos or, to the L st of Brazos' knowledge, threatened agsinst Brazos affecting the Purchased Assets, whether such be at law, in equity or in arbitration, or before or by any governmental department, commission, ooard, bureau, agency or instrumentality which, if adversely determined against Brazos, would affect Brazos' ability to perform its obligations under this Agreement, except the Pending Litigation, the licensing proceedings to which TU Electric is a party, the Pending Houston buit and the Pending Somervell County Suit; and Brazos, separately and apart from the Owners in combination or in conjunction with activa by all of the Owners acting collectively either directly or through the Project Manager (but without acknowledgment
\\
that such exists with reference to the Owners), is not in default with respect to any order, writ, injunction or dectte of any court, arbitrator or governmental department, j
coramission, board, bareau, agency or ins'~tmentality affecting the Purchased Assets.
2.9 Cor.tr ac ts. 'There is not in effect any executory contract, agreernent, order
)
or commitment to which Brazos is subject or a party, and to which TU Electric or the l
l Set Manager is not a party, which would bind TU Electric after the Closing with respect to the Purchased Assets and which would adversely afrect the value of the i
j Purchased Assets after the Closing, f
2.10 Exclusion of implied Warranties. THE PURCH ASED ASSETS ARE BEING SOLD
" AS-IS".
BRAZOS M AK ES NO W A RR A NTIES CONCERNING THE i
MERCH ANTABILITY OR CONDITION OF THE PURCH ASED ASSETS OR OF THEIR FITNESS FOR ANY P ARTICULAR PURPOSE, EXCEPT TO THE EXTENT OTHERWISE I
Y EXPRESSLY SET FORTH HEREIN.
i
{
2.11 Accuracy of Representations and Warrant!es.
All representations and I
warranties of Brazos contained herein are, and will be at the time of the Closing, I
)
accurate and complete in all material respects and all documents delivered by Brazos to l
TU Electric incident hereto are, and will be at such time, valid and authentic in all 1
respec ts.
g ARTICLE III REPRESENTATIONS, WARRAMTTES AND AGREEMENTS OF TU ELECTRIC
}
TU Electric represents and warrants to, and agrees with, Brazos as follows:
3.1 Corporate Statur.
TU Electric is a corporation duly organized, validly existing and in good standing under the laws of the State of Texas with full, requisite corporate power and authority to carry on its business as now conducted and to own, buy and accept the transfer of the Purchased Assets as provided for in this Agreement. j
3.2 Authority for Agreement. TU Electric has full, requisite corporate power and authority to -Jeute, deliver and perform this Agreement, to receive delivery of the Special Warranty Deed with Vendor's Lien and Bill of Sale, and to execute, deliver and perform the Note, the Mortgage and each other agreement and instrument to be executed and delivered by TU Electric in connection with this Agreement, and to carry out its
}
obligations hereunder and thereunder. TU Electric has full, requisite corporate power and authority to act for itself and the other persons or entities, private and governmental,
)
acting by, through and under TU Electric in connection with this Agreement, the Note, l
the Mortgage and the other agreements and instruments to be executed and delivered by 1
it pursuant hereto. This Agreement has been, and at the Closing the Note, the Mortgage I
and such other agreements and instruments will have been, duly authorized, executed and f
delivered by TU Electric, and this Agreement constitutes, and at the Closing the Note,
}
the Mot tgage and such other agreements and instruments will constitute, valid and legally I
binding obilgations of TU Electric enforceable against it in accordance with their
\\
respective terms. 'The execution, delivery and performance of C.b.4reement, the Note, I
the Mortgage and such other agreements and instruments will not conflict with or result in an'! violation of, or constitute a default under, (i) the Articles of incorporation or by-I laws of TU Electrie, or (ii) any material provision of any mortgage, indenture, lease, 1
l agreement or other instrument to which TU Electric is subject or a party, including any l
bonds or other obligation or other evidence of bdebtedness, or (iii) any permit,
]
concession, grant, franchise, license, judgment, order, decree, statute, law, ordinance, l
rule or regulation applicable to TU Electric or any of its property, including Comanche Peak; or with the passage of time or the giving of notice or the taking of any action by I
l any third party, have any of the effects described herein.
3.3
_ Approvals. TU Electric has obtained all necessary consents, approvals, orders and authorizations of, and has made all necessary registrations, declarations and filings with, each governmental authority or other entity required in connection with the execution, delivery, and performance by TU Electric of this Agreement, the Note, the -
,giortgage and the other agreements and instruments to be executed and delivered by TU Electric hereunder, except (i) with respect to the rights of first refusal referred to in section 5.3(b) and (ii) for the filings with the PCC and NRC referenced in Sections 5.3(c) and (d) of this Agreement. No other filing or registiation with, and no other consent, approval, authorization, permit, certifica te or order of any court, tribunal or governmental agency or authority, Federal, state, county or municipal, or other entity is I
or will be required by any applicable statute or other law or by any judgment, order or decree or any rule or regulation of any court, tribunal or governmental agency or 4
l authority, Federal, state, county or municipal, or agreement with any ot1er entity to
)
permit TU Electric to execute, deliver or perform this Agree m ent, the Note, the siort6 age or any agreement or instrument required hereby to be executed and delivered by
.I l
it at the Closing, except as referred to above.
f 3.4 Authority for TUC Guaranty. TUC has full, requisite corporate power and authority to execute, deliver end perform the Guaranty and to carry out its obligations 6
thereunder. At the Closing, the Guaranty will have been duly authorized, executed and I
delivered by TUC, and will constitute the valid and legally binding obligation of TUC r
enforceable against it in accordance with its ter ms.
The execution, delivery and I
performance of the Guaranty will not conflict with or result in any violation of, or I
constitute a default under, (i) the Articles of Incorporation or by-laws of TUC, or (ii) any material provision of any mortgage, indenture, lease, agreement or other instrument to I
which TUC is subject or a party, or (iii) any permit, concession, grant, franchise, license, I
~
judgment, order, decree, statute, law, ordinance, rule or regulation applicable to TUC or any of its property; or with the passage of time or the giving of notice or the 'aking of I
any action by any third party, have any of the effects described herein.
3.5 Accuracy of Representations and Warranties.
All representations and warranties of TU Electric contained here'.n are, and will be at the time of the Closing, accurate and complete in all material respects and all documents delivered by TU Electric to Brazos incident heretc are, and will be at such time, valid and authentic in all respects.
f' A RTIC LE IV PRE-CLOSING OBLIG ATIONS Brazos and TU Electric, as appropriate, covenant that between the date of this Agreement and the Closing Date:
4.1 Representations, Warranties and Covenants. Brazos shall not take any action which would result in the representations and warranties set forth in Article 11 hereof being inaccurate, incorrect or incomplete to the extent applicable as of the Closing Date and Brazos shall take all such action as may be necessary to insure that all covenants and agreements of Brazos set forth in this Agreement which are required to be performed by it at or prior to the Closing Date will have been so performed.
TU Electric shall not take any action which would result in the representations and warranties set forth in Article 111 hereof being inaccurate, incorrect or incomplete to the extent applicable as of the Closing Date and TU Electric shallicke all such action as may i
be necessary to insure that all cove.iants and agreements of TU Electric set forth in this Agreement which are required to be performed by it at or prior to the Closing Date will 1
have been so performed.
4.2 Abatement of Participation in Pending uttgation.
For purposes of this j
Section 4.2, the term "TU Electric" shall include not only TU Electric but TUC and its subsidiaries, Texas Utilities Mining Company and Texas Utilities Services Inc., all of which are parties to the Pending Utigation.
Immediately after the execution hereof and to the fullest extent that would not
)
violate court orders in effect in the Pending Dallas Suit, Brazos shall abate all of its voluntary activities in connection with the Pending utigation, including cessation of the
]i, d
furnishing of any assistance, finanetal or otherwise, to any party to such litigation and the retention and furnishlag of advice or direction to any attorneys of or consultants to any L
party to such litigation, and any other activity adverse to TU Electric pertaining thereto.
.I In such regard, Brazos agrees that it will immediately direct any attorneys and consultants retained solely by it in connection with the Pending uttgation to abate their work, and, consistent with any agreements Brazos may have with TStPA and/or Tex-La and consistent with any agreements Beszos may have with consultants hired jointly with l
TalP A and/or Tex-La (all of which agreements are terminable and will be abated by Brazos immediately after the date hereof and terminated by Brazos upon the Closing),
Brazos will as soon as possible withdraw its authorization to any other attorney or consultant employed jointly by it and any of the other parties to the Pending Litigation to I
incur fees or expenses chargeable to Brazos. Specifically with regard to the Pending I
l Litigation, Brazos (and TU Electric to the extent specified herein) agrees to take the following actions:
(a)
Brazos agrees to the continued abatement of the Pending Austin Suits and agrees not to revive such actions during the pendency of this Agreement and to take any action necessary to oppose such revival as to Brazos. In the i
event the Pending Dallas Suit is nonsuited ir. accordance with paragraphs (d)
{
and (e) hereof, Brazos shall not claim that such nonsuit utitles Brazos to revive the Pending Austin Suits; i
f (b)
Brazos and TU Electric agree to file within three (3) days after the date hereof and diligently pursue a joint motion to sever each of their respective l
1 Subject Claims against each other in the Pending Dallas Suit; l
(
)
(c)
Brazos and TU Electric agree as part of the joint motion required by l
paragraph (b) hereof to request jointly that the Court in the Pending Dallas l
1 l
Suit approve a standstill agreement with respect to the severed Subject Claims whereby the current scheduling order is withdrawn with respect to the I
severed Subject Claims and no new scheduling order or trial setting is made, l
.h and no discovery or any other steps to advance the litigation between Brazos and TU Electric t. hall be taken unless this Agreement is terminated or the transactions contemplated hereunder to be consummated prior thereto are J
not consummated on or prior to the Closing Date, provided, however, any I
I i
costs incurred and assessed against Brazos by the Court in the Pending Dallas l
Suit after approval of such standstill agreement shall be paid by TU Electric until such time as this Agreement is terminated or the transactions
}
contemplated hereunder to be consummated prior thereto are not l
consummated on or prior to the Closing Date; (d)
If for any reason the Court in the Pending Dallas Suit refuses to grant the l
severance or refuses to approve the standstill agreement referenced above prior to the end of three (3) weeks af ter the date hereof, Brazos and I
j TU Electric agree to immediately nonsuit each of their respective subject Claims against each other filed in the Pending Dallas Suit on such date which shall be three (3) weeks after the date hereof (or the next day the Court is I
open for business if such date is a holiday), provided that, as specified in f
Section 9.7 of this Agreement, TU Electric shall have the right to retain Brazos as a party to the Pcnding Dallas 3uit but only for the purposes l
specified in said Section 9.7; b
(e)
If it is necessary for Brazos and TU Electric to nonsult the Subject Claims h
filed against each other in the Pending Dallas Suit, Brazos and TU Electric agree that such nonsults will not operate to prejudice either party's position l
with respect to the Subject Claims they have made and legal positions they j
have taken in the Pending Litigation.
In the event this Agreement is terminated or the transactions conteuiplated hereunder to be consummated I
prior thereto are not consummated on or prior to the Closing Date, Brazos
(
and TU Electric agree that their Subject Claims in the Pending Dallas Suit shall be refiled in Dallas County in the New Lawsuit in the 14th Judicial l
[
District Court (and if such suit is not assigned initially to such Court, Brazos and TU Electric agree to thereafter file a Joint Motion to transfer such sult I
to such Court), within five (5) Business Days after such termination of this Agreement or failure to close hereunder on the Closing Date, with TU Electric as the plaintiff and Brazos as defendant and counter-plaintiff,,
and that Brazos will not oppose venue in Dallas County, Texas except to the extent that Brazos could on the date of this Agreement contest venue in Dallas County, Texas in the Pending Dt.llas Sult. In the event this Agreement j
is terminated or the transactions contemplated hereunder to be consumtrated prior thereto are not consummated on or prior to the Closing Date, Brazos g
will retain, without limitation, any and all rights Brazos may now have to appeal the order of the Court in the Pending Dallas Suit dated September 19, i
1986.
For all purposes, including, without limitation, (i) any statute of i
l limitations claim, (il) any claim concerning 516.069 of the Texas Civil
}
Practice and Remedies Code, and (iii) any claim asserted in the Pending i
Austin Suits (incNding without limitation, any Subject Claim concerning j
which suit was first filed), the New Lawsuit will be considered as having been filed by TU Electric on May 29, 1986, and Brazos' counterclaim in the New Lawsuit will be considered as having been filed by Brazos on June 20, 1986.
All discovery, including documents produced and depositions taken, which had i
been conducted in the Pending Dallas Suit up to the execution of this f
Agreement, shall be for all purposes considered as having been taken in the i
New lawsuit, and all orders issued by the Court in the Pending Dallar Suit up I
~
l to the execution of this Agreement (except the scheduling order) shall have I
the same force and effect as if they had been issued in the New Lawsuit; l
(f)
No efforts made or cooperation given by Brazos' officers, employees, agents, I,
consultants, experts or attorneys (including, without limitation, Joseph Robert Riley, Spiegel & McDiarmid and Locke Purnell Rain Harrell) pursuant i
to or under any provision of this Agreement shall create any conflict of t
interest which would prevent any such employees, agents, consultants or attorneys from participating adversely to TU Electric in any legal proceeding 6
brought by TU Electric against Brazos and/or by Brazos against TU Electric should this Agreement be terminated or should the transactions contemplated
-2 2 -
l l
i 1
under this Agreement to be consummated prior thereto not be consummated on or before the Closing Date. TU Electric hereby waives any such conflict of interest which might otherwise exist because of any such effort or cooperation; and l
(g)
If it is necessary to nonsult the current Subject Claims, as set forth in i
paragraphs (d) and (e) above, then in such event upon or at any time after the f
Closing, if TU Electric requests, Brazos and TU Electric agree that their I
Subject Claims in the Pending Dallas Suit shall be refiled in the New Lawsuit i
l in Dallas County and that the New lawsuit and all such Subject Claims shall I
then immediately be dismissed with prejudice.
l 4.3 Agreement to Obtain Approvals. Brazos shall use all reasonable efforts to obtain with respect to Brazos and TU Electric shall use all reasonable efforts to obtain with respect to TU Electric all necessary consents, approvals, authorizations, permits, 8
I
{
certificates or overs of any court, tribunal or governmental agency or authority, Federal,
.I, state, county or municipal, or other entity which are required by any applicable statute or f
other law or by any judgment, order or decree or any rule or regulation of any court, f
tribunal or governmental agency or authority, Federal, state, county or municipal, or any I
agreement or other requirement to permit each of them, respectively, to execute, deliver I
j or perform this Agreement and any agreement or instrument required hereby to be
[
executed and delivered by either of them at the Closing.
ARTICLE V CONDr!10N5 TO OBLIGA110NS TO CLOSE f
5.1
_ Conditions to Obligation of Brazos to Cbse. De obligation of Brazos to i
consummate and close the transactions contemplated by this Agreement at the Closing is l
subject to the satisfaction of each of the following ennditions at or prior to the Closing:
(a)
Representations and Warranties.
De representations and warranties of l
TU Electric contained in this Agreement shall have been true and correct on l
)
and as of the date hereof and shall be true and correct on and as of the Closing Date in all material respects as though such representations and
warranties had been made on and as of the Closing Date, and TU Electric shall have delivered to Brazos a certificate, dated as of the Closing Date, of its Chairman of the Board, a Division President or a Vice President to the s
foregoing effect; I'
(b)
Compliance with Agreemeat.
TU Bectric shall have fully performed and complied with all of the covenants, agreements and conditions to be performed or complied with by it at or prior to the Closing (including without limitation its assumption obligations with respect to the Joint Ownership-I i
Agreement), and TU Electric shall have delivered to Brazos a certificate, dated as of the Closing Date, of its Chairman of the Board, a Division y
l President or a Vice President to the foregoing effect; (c)
Receipt of Payment.
TU Dectric shall have delivered to Brazos the payments referenced in paragraphs (a) and (b) of Section 1.5 hereof; I
(d)
. Receipt of Closing Documents. Brazos shall have received the fully executsd Closing documents described in Article VII hereof to be delivered at the
{
Closing; and I
(e)
Consent to Assignment Agreement. The REA shall have entered into the I
f Consent to Assignment Agreement attached to the Assignment Agreement, j!
thereby accepting assignment of the Note as a mechanism for paying the k
Brazos Comanche Peak Debt and assignmer.t of the Mortgage and the vendors l
lien contained in the Special Warranty Deec with Vendors Lien and Bill of Sale as security for the payment of the Note.
(f)
Receipt of I.R.S. Determinatien. Brazos shall have received an acceptable Internal Revenue Service dstermination or Letter Ruling that no payments to f
be made under this Agreement and the Note will, when added to other nonmember revenuss of Brazos, 6dversely affect Brazos' tax-exempt status under Section 501(cdl2) of the Internal Revenue Code of 1986.
5.2 Conditions to Obligation of TU Doctric to Close.
The obligation of TU Dectric to consummate the transactions contemplated by this Agreement at the Closing is subject to the satisfaction of each of the following conditions at or prior to the Closing: -
=
k Representations and Warr anties.
'Ihe representations and warranties of (a)
Brazos contained in this Agreement shall have been true and correct on and l
as of the date hereof and shall be true and correct on and as of the Closing Date in all material respects as though such representations and warranties p
had been made on and as of the Closing Date, and Brazos shall have delivered l
to TU Electric a certificate, dated as of the Closing Date, of its President or i
g Executive Vice President and General Manager to the foregoing effect; f
(b)
Compliance with Agreement. Brazos shall have fully performed and complied I
with all of the covenants, agreements and conditions to be performed or I
l complied with by it at or prior to the Closing, and Brazos shall have delivered to TU Electric a certificate, dated as of the Closing Date, of its President or l
Executive Vice President and General Manager to the foregoing effect; (c)
Delivery of Pending Litigation Documentation. At the Closing, Braros shall o
have delivered to TU Electric the originals and all copies of all documents and other written material in its custody, control or possession (including d
without limitation those held by Brazos' agents, attorneys and consultants)
I i
pertaining to or involving the Pending Litigation, other than copies of those I
which are filed in the Pending Litigation or at the NRC or which are I
privileged or which may be the work product or the product of Brazos' l
attorney's or consultant's jo!nt defense activities, if any, prepared in l
connection with the Pending Litigation or correspondence to or from 1
TU Electric or itr attorneys or other correspondence or documents copies of which have been provided to TU Electric or its attorneys. Such documents or other written meterial which are essential to the conduct of Brazos' on-going business activities may be retained by Brazos except for one copy which will I
have been cellvered to TU Flectric prior to the Closing.
As concerns l
privileged or joint defense documents or written material, Brazos shall, to j
the full extent permitted by law, exercise such privileges and claims of I
confidentiality as ma,y be available to prevent disclosure thereof to any i
person or entity, private or governmental, rad l
l
-2 5 -
l l
(c)
Receipt of Closing Documents. TU Electric shall have received the Clowg documents described in Article Vi hereof to be delivered at the Closing.
5.3 Conditions to Obligation of Both Parties to Close. The coligation of the parties to consummate the transaction.; contemplated by this Agreement at the Closing pate is subject to t'.e satisfaction of each of the following cunditions at er prior to the Closing Date:
I (a)
No Adverse Proceedinq. There shall not be pending any suit, action or other
?
l proceeding by any person before any court or arbitrator or any governmental I
department, commission, board, bureau, egency or instrumentality in which it l
is sought to restrain or prohibit any of the transactions contemplated by this I
Agreement.
(b)
Waiver of Right of First Re fusal.
Immediately upon execution of this Agreement, Brazos will notify TMPA and Tex-la of the ".ecution of this 1
Agreement by means of the notice attached hereto as Exhibit G.
By the Closing Date TMPA and Tex-La will have executed an irrevocable waiver or
{
other sufficient relinquishment of any rights o' first refusal or consent to f
sale that TMPA and Tex-la may have under the Joint Ownership Agreement (it being agreed that failure to exercise such right iri accordance with the terms of the Joint Ownership Agreement by TMPA er Tex-14 in response to I
the notice from Brazos within the time period specified in the Joint I
l Ownership Agreement will constitute sufficient relinquishment of the rights of first refusal of TMPA or Tex-La as the case may be) with respect to any transaction provided for herein or such rights shall have been validly exercised, in whole or in part, by either or both of TMPA and Tex-la and the purchase which arises as a result of such exercise fully consummated. In the j
event that either or both of TMPA and Tex-la shall have exercised any such rights of first refusal to the extent that TMPA and/or Tex-La acquire all of a
Brazos' interest in the Purchased Assets, Brazos shall promptly refund to TU Electric the full amount of the Signing Payment less $15,322,581 and Brazos shall, in consideration for retaining said $15,322,581 of the Signing !
Payment, perform its obligations pursuant to Article IV, Sections 5.2(c),
)
Section 8.1, Section 9.1, Section 9.2, Section 9.5, Section 9.6 and Section 9.7 3
j l.ereof. It is agreed by &azos and TU Electric that the purchase price under f
this Agreement of the Purchased Assets includes an amount, in addition to the payment of cash and delivery of the Note by TU Electric, which I
represents the forgiveness of certain indebtednes of Brazos to TU Electric under the Joint Ownership Agreement which TU Electric contends Brazos I
owes it out which Brazor does not admit is owing to TU Electric (the "Brazos JO A Debt").
In such con.iection, it is understood that inasmuch as such forgiveness of the Brazog JOA Debt is part of the purchase price of the Purchased Assets, Erazos shall require either TMPA or Tex-la, as purchaser of Brazos' interest in the Purchased Assets pursuant to any rights of first i
refusal or consent to sale under the Joint Ownership Agreement to pay, and, therefore, such purchaser would be required to pay TU Electric and fully k
satisfy it with respect to the Brazos JOA Debt pertaining to Brazos' interest
{
in the Purchased Assets, purchased by TMPA and/or Tex-La. In the event i
i that TMPA and/or Tex-La exercise any such rights of first ' refusal to the extent that all of Brazos' interest in the Purchased Assets has not been acquired by TMPA and/or Tex-La, after consummation of the sale to TMPA and/or Tex-La, Brazos shall promptly refund to TU Electric a proportional amount of the Signing Payment (calculated after deducting $15,322,581).
(
equivalent to the proportion of the Purchased Assets which TMPA and/or Tex-14 has elected to acquire.
Brazos shall be entitled to retain the
$ 15,3 22,581, together with the balance of the Signing Payment not refunded to TU Electric and Brazos and TU Electric agree to perform this Agreement with respect to the portion of the Purchased Assets not acquired by TMPA and/or Tex-la in the manner set forth herein, with appropriate proportional modifications to the payment obligations of TU Electric herein, and to the
-2 7-
obligations of Brazos herein to deliver all of the Purchased Assets, as well as all of the other provisions of this Agreement. In addition, Brazos shall refund to TU Electric a proportional amount of the payments that TU Electric has l
made with respect to the Brazos Comanche Peak Debt equivalent to the proportion of the Purchased Ascets being acquired by TMPA and/or Tex-La, and TMP A or Tex-La shall pay TU Electric the Brazos JO A Debt to the l
extent set forth hereinbefore.
(c)
Approval by PUC. By final action subject to no further appeal, the PUC shall l
l have approved the transfer to TU Electric of Brazos' certificate of
)
convenience and necessity with respect to the Station and the Transmission Facilities permitting TU Electric's acquisition and ownership of Brazos' ownership interest in the Station and the Transmission Facilities in I
accordance with the terms hereof.
In such connection, TU Electric and Brazos will file within fifteen (15) Business Days of the date of this
{
Agreement and prosecute to the best of their ability a joint application for i
approval of the transfer of such certificate of convenience and necessity I
rights and such other applications or filings with the PUC as shall be necessary and essential in connection with the transactions contemplated under this Agreement. In conneration with all such proceedings, each party l
will bear its own cost and expense of prosecuting such applications or filings.
1 Upon the issuance by the PUC of any order or other document purporting i
to give the approval contemplated under this Agreement with t..
without conditions, the parties, with their respective attaneys and other consultants, f
shall promptly confer and endeavor in good faith to determine if such order or other document evidences the final approval contemplated by this Agreement without any condition that is deemed by either party to be i
inconsistent with the provisions of this Agreement.
It is understood and agreed that, in connection with such applications and filings, TU Electric will l
-2 8 -
a request the PUC not to prejudge either the reasonableness or the recoverability in TU Electric's rates of the consideration payable hereunder and to defer any such determinations to a subsequent TU Electric rate case; I
however, should the PUC refuse to defer such determination and determine in such certification proceedings that all or any portion of the consideration j
payable hereunder is unreasonable or shall not be recoverable in TU Electric's l
rates, such determination shall be deemed by TU Electric to be inconsistent I'
with the provisions of this Agreement and therefore shall be inconsistent for l
l the purposes hereof. If such determination is affirmative the parties shall I
promptly execute a stipulation dated currently to such effect.
If such l
determination is negative, the parties, at their own cost and expense, I
l respectively, will undertake to cause the PUC to issue such further order or I
document evidencing its approval as contemplated by this Agree ment, including the elimination of any such condition that was deemed by either
[
party to be inconsistent with this Agreement and upon the issuance of any l
further order or other document by the PUC in such proceedings the same procedures will be followed by the partier as provided in the case of the order or other document first issued by the PUC in such proceedings, including the execution of a sUpulation dated currently evidencing the affirmative action l
by the parties in respect of the order or other document issued by the PUC.
I The date of any stipulation executed by the parties under this paragraph is referred to as the "PUC Affirmativt Date." The provisions of this paragraph shall not affect or detract from the rights of Brazos or TU Llectric under l
Sections 10.1 or 10.2 hereof.
l (d)
Approval by NRC. 'Ihe NRC shall have granted all necessary and essential approvals and consents with respect to the transactions provided for herein, including without limitation the entry of a final non-appealable order approving the sale of Brazos' right, title and interest in the Station and Fuel
-2 9-l
to TU Electric in accordance with the terms hereof. In such connection, it is understood and agreed that TU Electric will file within fifteen (15) Business l
Days of the date of this Agreement and prosecute to the best of its ability all
,1 applications or filings with the NRC as shall, in its judgment, be necessary I
and essential in connection with the transactions contemplated under this l
l Agreement. TU Electric will deliver promptly to Brazos copies of all such applications and filings and will advise Brazos on a current basis with respect l
to the status of any such proceeding In connection with all such proceedings, g
Brazos will, at Brazos' reasonable cost and expense, at the request of TU Electric, render all such assistance as may be appropriate under the I
circumstances, including without limitation, providing such of its personnel as may be appropriate to testify and otherwise participate in any such I
proceedings in support of this Agreement, Upon the issuance by the NRC of any order or other document b
purporting to approve the transactions contemplated under this Agreement I
with or without conditions, TU Electric will promptly deliver to Brazos a reproduced legible copy of such order or other document, and the parties, with their respective attorneys and other consultants, shall promptly confer j
and endeavor in good faith to determine if such order or other document I
evidences the final approval of the NRC of such transactions contemplated I
l by this Agreement without any condition tnat is deemei by either party to be inconsistent with the provisions of this Agreement. If such determination is affirmative the parties shall promptly execute a stipulation dated currently t
I to such effect.
If such determination is negative, TU Electric, with the assistance of Brazos, which shall be at Jrazos' reasonable cost and expense, i
will undertake to cause the NRC to issue such further order or document a
evidencing its approval of such transactions including the elimination of any such condition that was deemed by either party to be inconsistent with this
-3 0-
l I
i Agreement and upon the issuance of any further order or other document by the NRC in such proceedings the same procedures will be followed by the y
parties as provided in the case of the order or other document first issued by the NRC m such proceedings, including the execution of a stipulation dated currently evidencing the affirmative action by the parties in respect to the 1
order or other document issued by the NRC. The date of any stipulation executed by the parties under this paragraph it 'eferred to as the "NRC Affirmative Date."
The provisions of this paragraph shall not affect or detract from the rights of Brazos or TU Electric under Sections 10.1 or 10.2 l
hereof.
(e)
Approval of REA, CFC and FFB. The REA, the CFC and the FFB shall have granted all necessary and essential approvals and consents with respect to the i
transactions provided for herein, including without limitation, their consent to the Assignment Agreement and the acceptance by them of the assignment
[
of the Note, the Mortgage and the vendors lien contained in the Special 1
Warranty Deed with Vendors Lien and Bill of Sale as a payment mechanism and security for such payment mechanism with respet to all promissory notes, mortgages, or other evidences of indebtedness and security agreements l
or arrangements with respect to the payment thereof, that Brazos may have 4
s l
in favor of the REA, the CFC and the FFB with respect to the Brazos Ij Comanche Peak Debt, so that at the Closing Date Brazos, TU Electric and the REA will enter into the Assignment Agreement and pursuant thereto deliver to the REA the Note and the Mortgage in return for which the REA, j
the CFC and the FFB will execute and deliver to Brazos all such receipts,
/
releases, termination statements and other documents as sell be necessary or appropriate in the estimation of Brazos and TU Electric to provide for and evidence the termination and release of all mortgages, liens and other security instruments in connection with the Brazos Comanche Peak Debt. In l a
--.---_.x..
-..__-_------x----.--
--_-----.---_------x
S such connection, it is understood and agreed that Brazos will carry on discucions with the REA, the CFC and the FFB in order to obtain their j
consent and agreement in the foregoing respects. in connection with all such l
undertakings, TU Electric will, at TU Electric's cost and expense, at the request of Brazos, render all such assistance as may be appropriate under the 6
I l
circumstances, including without limitation, providing such of its personnel as may be appropriate to participate in any such undcrtekings in support of this Agreemen t.
(f)
Execution of Transmission Services Agreement. Brazos and T1.' Electric shall have executed an appropriate amendment of the Transmission Agreement between Brazos and TU Electric's corporate predecessors, executed on July 25,1979, to reflect Brazos' sale of the Transmission Facilities to TU Electrie.
j ARTICLE VI CLO61NG DOCUMEN'IS FROM BRAZOS b
As a condition of Closing, Brazos and the referenced attorney, in each casa as appropriate, willdeliver to TU Electric on the Closing Date the following:
6.1 Deeds and Transfers, etc.
(i) An executed and acknowledged Special Warranty Deed with Vendor's Lien and Bill of Sale; (ii) duplicate counterparts of the amendment contemplated under Section 5.3(f) hereof; and (iii) the Release, Covenant Not
)
to Sue and Indemnity Agreement specified in Sections 9.1 9.2 and 9.5 hereof.
l 6.2 Lien Search.
Real property search certificates from a reputable title company and a UCC search certificate from the Secretary of State of Texas disclosing no security interests, judgments or other liens outstanding against Brazos' ownership interest I
in the Purchased Assets, other than the Permitted Exceptions and liens securing the Brazos Comanche Peak Debt and other Drazos debt to be released at or prior to the Closing.
6.3 Certificate of Secretarial Offleet. A certh.1cate of the Secretary or an Assistant Secretary of the Board of Directors of Brazos, dated the Closing Date, with
-3 2 -
n resi;ec t to the incumbency of officers and their signatures, the existence and good standing of Brr.zos, and the due adoption of resolutions by the Board of Directors of
{
g,aros and tr.e requisite number of the Members of Brazos authorizing the execution, delivery and performance of this Agreement and the other agreements and instruments to 8
be delivered to TU Electric at the Closing.
I 6.4 Counsel Opinion.
An opinion of Joseph Robert Riley, counsel for Brazos, dated the Closir.g Date and addressed to the TU Electric in the form set forth in Exhibit H attached hereto.
ARTICLE VU l
CLOSING DOCUMENTS PROM TU ELECTRIC As a condition of Closing, TU Electric and the referenced attorneys, in each case as I
appropriate, will deliver to Brazos on the Closing Date the following:
I 7.1 Proof of Payment. Proof of the payment to Brazos pursuant to Section 1.5(b) hereof.
k 7.2 Other Instru ments.
(i) The executed Note and Mortgage; (ii) duplicate y
counterparts of the amendment contemplated under Section 5.3(f) hereof; and (iii) the Release, Covenant Not to Sue, Assumption and Indemnity Agreement specified in Sections l
9.3, 9.4 and 9.5 hereof; and (iv) the executed Guaranty, f
7.3 Certifieste of Secretarial Officer.
A certificate of the Secretary or an I
Assistant Secretary of TU Electric and TUC, dated the Closing Date, with respect to the l
incumbency of officers and their signatures, corporate existence and good standing, and, in the case of TU Electric, the due adoption of resolutions of the Board of Directors of TU Electric authorizing the execution, delivery and performance of this Agreement and I
the other agreements and instruments to b< delivered by TU Electric to Brazos pursuant hereto at the Closing snd, in the case of TUC, the due adoption of resolutions of the i
Board of Directors of TUC authorizing the execution, delivery and performance of the Guaranty to t>e dslivered by TUC to Brazos pursuant herets at the Ckising.
- - - - : - _. : =--- -
_- :- :- c- : =
n-4 7.4 Counsel's Opinion. An opinion of Worsham, Forsythe, Sampels & Neoldridge, counsel for TU Electric and TUC, dated the Closing Date and addressed to Brazos in the form set forth in Exhibit I attached hereto.
i ARTICLE VIII CLOSING AND INDEMNIFICATION 8.1 Indemnification by 3razos. Brazos agrees to indemnify, hold bermless and defend TU Electric and anyoce related to or affiliated with TU Electric, inc!vding its i
parent, subsidiaries and affiliates and anyone related to or affiliated with such pacent, subsidiaries or affiliates, from and against any and all claims, demands, liabilities, losses, costs and expenses, including reasonable attorneys' fees, which TU Electric or anyone related to or affiliated with TU Electric, including its parent, subsidiaries and affiliates and anyor.e related to or affiliated wi' auch parent, subsidiaries or affiliates, may sustain and which arise out of or are based epon or relate to the inaccuracy or falsity of any rapresentation or warranty made by Brazos set forth in this Agreement or in any other bj agreement or instrument delivered pursuant hereto or the breach or nonperformance by Brazos of any covenant or agreement with TU Electric or anyone related to or affiliated with TU Electric, includirq its parent, subsidiaries arid affiliates and anyone related to or affiliated with such perent, subsidiaries or affiliates, made by Brazos set forth in this Agreement or in any other agreement or instrument delivered pursuant hereto.
8.2 Indemnification by TU Electric. TU Electric agrees to indemnify and hold
(
harmless and defend Brazos and Brazos' Members and anyone related to or affiliated with Brazos and Brazos' Members from and against any and <.11 claims, demands, liabilities, losses, costs and expenses, including reasonable attorneys' fees, which Brazos, its -
Members or anyone related to or affiliated with Brazos or its Members may sustain and which arise out of or are based upon or relate to the inaccuracy or falsity of any revesentation or warranty made by TU Electric set forth in this Agreement or in any ottier agreement or instrument delivered pursuant hereto oc the breach or nonperformance by TU Electric of any covenant or agreement with Brazos, its Members or anyone related
) _ - - _ - _ _ - _ -_ ___- -_-_- -- -- - ---- - ---- _-- --- -
- - ~_ _
or affiliated with Beazos or its Members made by TU Electric set forth in this to Agreernent or in any agreement or instrument delivered pursuant hereto.
8.3 Survival of Representation aJnWarrantiee. The representations, warranties, m
covenants and agreements of the parties hereto shdl aurvive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereunder for a i
period of four (41 years after the Closing Date or for such longer period as may be g
f commensurate ther ewith for any document delivered pursuant hereto which is in effect for a longer period than swh four years.
8.4 Notice and Ooportunity to Partlyipate in Defense in the event that Brazos, i
l its Members or TU Electric or any of its parent, suosidiaries or affiliates, or anyone l
related to or affiliated with any of them, receives notice of the commencement of any l
l action or proceeding or the hssertion of any claim in respeat of which Brazos, its Members I
or TU Electric or any of its parent, subsidiaries or affiliates, or anyor.e ralated to or affiliated with any of them, may be entitled to indemnification, the party receiving such notice shall give the indemnifying party written notice within ten (10) calendar days thereof (except that failure to so notify will not relieve the indemnifying party of its obligations hereunder except to the extent it has been prejudiced thereby) and the opportunity to participate in the defense thereof and in any settlement negotiations with respect thereto, and will cooperate with the other party in all reasonable respects and l
make available to the other party all records, evidence and personnel for consultation and testimony reasonably requested by the other party in connection therewith.
The settlement of any such action, proceeding or claim without the prior written approval of the indemnifying party shall relieve such party of any obligations to the indemnified party in respect of the subject matter of the settlement of such action, proceeding or claim.
AR11CLE IX SETTLEMENT OF PENDING LIT 1GATION 9.1 Brazos' Release. Upon the Closing, Brazos, for itself and on behalf of any person or entity, private or governmental, claiming by, through or under Brazos, including
4 w thout liraitation, to the extent it has the standing and ri ht under law to do so, its 6
yembers and customers (including the customers of Brazos' Members and other wholesale sstomers) and its or their respective insurers, agents, servants, employees, officers, j
directors, consultr.nts, attorneys and representatives, shall waive, release, d!scharge, renounce and relinquish any and al! Subject Claims relating to Comanche Peak it has or they have, or may have, whether known or unknown, contingent or absolute, including, f
without limitation, those based on common law, whether contract (expressed or implied, including express or implied warranty) or tort (including, without limitation, intentional tort, negligence or gross negligence, sole, joint or concurrent) or strict liability or fraud, i
l and those based upon any Federal, state or local statute, law, order or regulation, including, without limitation, the Atomic Energy Act of 1954, as amended, the regulations of the NRC, the Securities Act of 1933, as amended, or the Securities Act of 1934, as amended, and any rule or regulation under either, the Texas Securities Act (Title 19, Articles 581-1, et seq., V. A.T.S.) and the Texas Deceptive Trade Practices and Consumer Protection Act, against TU Electric or TUC, or both, in any capacity, whether individually, as Project Manager of Comanche Peak or otherwise, and their respective nsurers, agents, servants, employees, officers, direc tors, shareholders, consultants, i
attorneys and representatives, past and present, and any and all of their respective successors, subsidiaries and affiliates and their respective insurers, agents, servants, employees, officers, directors, shareholders, consultants, attornays and representatives, past and present, except Subject Claims arising out of or under this Agreement or any of
(
the other agreements or instruments to be delivered by TU Electric or TUC pursuant hereto. Brazos hereby covenants and warrants that it has not assigned any Subject Claims that are to be released at the Closing. At the Closing, Brazos will execute and deliver to TU Electric the form of Release attached hereto sa Exhibit J.
9.2 Brazos Covenant Not to Sue. Except as provided for in Section 4.2(g) hereof, upon the Closing, 8: azos, for itself and on behalf of any person oc entity, private or governmental, claiming by, through or under Brazos, including without limitation, to the
-3 6 -
=
= -
-- -- --- ^
~
- ^
4 extent it has the standing and right under law to do so, its Members and customers (including the customers of Beszos' Members and other wholesale customers) and its or their respective insurers, agents, servants, employees, officers, directors, consultants, l
l attorneys and representatives, shall agree and covenant that it and they, inbidually, collectively or in any combination, will forebear from asserting against, and never sue for or look for satisfaction with respect to, TU Electric and TUC and their respective insurers, agen ts, servants, employees, o f ficers, directors, shareholders 'onsultants, attorneys and reptr'entatives, past and present, and any and all of their respective successors, subsidiaries and affiliates and their respective insurers, agents, servants, employees, officers, directors, shareholders, consultants, attorneys and representatives, past and present, any Subject Claim (including withou' limitation any Subject Claim I
against any contractor, subcontractor, supplier, consultant, vendor or other person, firm I
or entity in privity in any manner with any of them which may therefor or as a result thereof have a right over or Subject Claim in subrogation) in any manner involving, concerning, arising out of, or relating to, the design, construction, management and licensing of, or any other matter relating to, Comanche Peak, and the management, procurement, conversion, enrichment, fabrication, shipping, transportation and storage of the Fuel, except for claims arising out of or under this Agreement or any of the other agreements or instruments to be celivered by TU Electric, or any of TU Electric's I
affiliates, subsidiaries or parent companv, pursuant hereto; and Brazos, for itself and on behalf of any person or entity, private oc governmental, claiming by, through or under
(
Brazos, including without limitation, to the extent it has the standing and right under law to do so, its Members and customers (including the customers of Brazos' Members and other wholesale customers) and its or their res,sective insurers, agents, servan ts, employees, officers, directort, consultants, attorneys and representatives hereby further agrees and covenants that, upon and af ter the Closing, neither it nor they, individually, collectively oc in any combination, will directly or indir wtly, challenge, contest or assert any complaint in any coun or before any administr.tive agency or body or in any other
-3 7-
)
I j
=
l
\\
forum whatsoever with respect to, or in any manner involving, concerning, arising out of, or relating to, Comanche Peak and the incidents and attributes thereof including, without limitation, the design, construction, management and licensing of Comanche Peak or any l
other aspect thereof, the costs and schedule of construction and completion of Comanche Peak, and the reasonLleness, prudency or efficiency of the planning, design, construction, d
management and licensing of Comanche Peak, and the reasonableness, prudency or
_o 1
efficiency of the managemen t, procure ment, conversion, enrichment, fabrication, shipping, transportation and storage of the Fuel, and the costs incurred in connection with the management, procurement, conversion, enrichm ent, fabrica tion,
- shipping, I
transportation and storage of the Fuel, and the breach of the Joint Ownership Agreement l
and any express or implied warranties arising out of the Joint Ownership Agreement, and any representation, misrepresentation, disclosure or non-disclosure in connection with the negotistions or preceding the execution by Brczos of the Joint Ownership Agreement, and in connection with the performance or nonperformanco by TU Electric of its duties, responsibilities or obligations under the Joint Ownership Agreement as Project Manager or otherwise, and the failure of TU Electric to pursue any remedies, either at la w or a
otherwise, that may be, or may have been, available against any and all contractorr, subcontractors, suppliers, consultants, vendors or others with respect to Comanche Peak (including separately the Station, Fuel or Transmission F cilities) and on account of anything that has occurred or may have occurred, in whole or in part, with respect to Comanche Peak, (including separately the Station, Fuel or Transmission Facilities) and the I
incidents and attributes thereof and any of the foregoing whether known or unknown, except with regard to Subject Claims arising out of w under this Agreement or any of the other agreements or instruments to be delivered by TU Dectric, or any of TU Electric's affiliates, subsidiaries oc parent company, pursuant hereto. At the Closing, Brazos will execute and deliver to TU Electric the form of Covenant Not to Sue attached hereto as Exhibit K.
Further, Ikazos covenants and agrees that it will cooperate and assist TU Electric in connection with all necessa.y approvals of this Agreement and that it will
-3 8 -
l
.1
encourage and sollelt its attorneys, including Joseph Robert Riley, Spiegel & McDiarmid and Locke Purne!! Rain Harrell, and Brazos' separately employed consultants, not to oppose or assist any third party in opposing TU Electric in connection with any matters I
relating to Co. nche Peak (except that nothing herein shall be construed to prohibit said attorneys and consultants from representing Brazos in connection with proceedings in f
which TU Electric's rates are being determined provided that no opposition, or assistance to any third party opposition, to Comanche Peak related costs is made); and, if necessary l
to. event a conflict of interest, i; being understood and agreed that Brazos' separately employed consultants and attorneys may have obtained or developed information I
I regarding Comanche Peak in the course of the Pending Litigation that arguably could be inequitable for them to otherwise utilize in view of the consideration being rendered by TU Electric hereunder in order to obtain a final settlement of the matters referred to in I
this Agreement, Brazos covenants and agrees that it will take all such action as may be necessary or appropriate in order to prevent the consultants and attorneys, including Joseph Robert Riley, Spiegel & McDiarmid and Locke Purnell Rain Harrell, separately employed by it in connection with, the Pendig Litigation, from participating or assisting in any manner adverse to Brazos' duty of cooperation herein or to TU Electric in connection with '.he Pending Litigation, the Pending Houston Suit, the Pending Somervell l
County Suit or any current or future proceedings or matter before the PUC (except that i
nothing herein shall be construed to prohibit said attorneys and consultants from j
representing Brazos in connection with proceedings in which TU Electric's rates are being I
determined provided that no opposition, or assistance to any third party opposition, to Comanche Peak related costs is made) or the NRC involving or relating to Comanche Peak, or any current or future proceedings (except that nothing herein shall be construed l
j to prohibit said attorneys and consultants from representing Brazos in connection with f
proceedings 'n which TU Electric's rates are being determined provided that no opposition, or assistance to any third party opposition, to Comanche Peak related costs is made) l before any court or befoce any administrative agency oc body oc in any other forum d
-3 9-
=-
whatsoever with respect to, or in any manner involving, concerning, arising out of, or relating to:(i) the acts or omissions of TU Electric or the Project Manager referred to or in question in the Pending Litigation or which could have been brought into question in the l
Pending Litigation; or (ii) the acts or omissions of TU Electric or the Project Manager with respect to Comanche Peak that occur, in whole or in part, prior to the Date of Commercial Operation (as said term is defined in the Joint Ownership Agreement). The covenant set forth in the prior sentence shall survive Closing hereunder and remain in force until the expiration of any Subject Claim covered thereby.
of its parent, TUC, and their subsidiaries and affiliates and on behalf of any person or i
entity, private or governmental, claiming by, through or under TU Electric or TUC, including without limitation, to the extent it has the standing and right under law to do so, I
their customers, and on behalf of their respective insurers, agents, servants, employees, officers, directors, consultants, attorneys and representatives shall waive, release, discharge, renounce and relinquish any and all Subject Claims relating to Comanche Peak (including separately the Station, Fuel or Transmission Facilities) it has or they have, or a
may have, whether known or unknown, contingent or absolute, including, without limitation, those based on common law, whether contract (express or implied, including express or implied warranty) or tort (including, without limitation, intentional tort, I
negligence or gross negligence, sole, joint or concurrent) or strict liability or fraud, and those based on any Federal, State or local statute, law, order or regulation, including, without limitation, the Atomic Energy Act of 1954, as amended, the regulations of the NRC, the Securities Act of 1933, as amended, or the Securities Act of 1934, as amended, and any rule or regulation under either, the Texas Securities Act (Title 19, Articles 581-1, j
et seq., V.A.T.S.) and the Texas Deceptive Trade Practices and Consumer Protection Act, against Brazos, its Members and customers (including the customers of Brazos' Members and other wholesale customers) in any capacity, whether individually or otherwise, and its and their respective insurers, agents, servants, employees, officers, directors, consultants,
-4 0 -
l attorneys and representatives, past and present, and any and all of their respective successors, subsidiaries and affiliates and their respectivo insurers, agents, servants, empl3yees, officers, directors, members, consultants, attorneys, and representatives, past l
and present, except Subject Claims arising out of or under this Agreement or the other agreements and instruments executed and delivered pursuant hereto and except that nothing herein shall prohibit TU Electric from charging Brazos for any electric power and energy purchased by Brazos from TU Electric in accordance with the rates set forth in TU Electric's tariff as same may be approved and in effect from time to time even though said rates may include costs related to Comanche Peak. TU Electric hereby covenants i
and warrants that it has not assigned any Subject Claims that are to be released at the l
Closing.
At the Clos!qg, TU Electric will execute and deliver to Biazos the form of Release attached hereto as Exhibit L.
9.4 TU Electric Covenant Not to Sue. Except as provided for in Section 4.2(g) hereof, upon the Closing, TU Electric, for itself and on behalf of its parent, TUC and their subsidiaries and affiliates, and any person or entity, private or governtrental, claiming by, j
through or under TU Electric or T ' ', including without limitation, to the extent it has a
the standing and right under law to do so, their customers, and their respective insurers,
- egents, servants, employees,
- officers, directors, consultants, attorneys and representatives shall agree and covenant that it and they, individually, collectively or in any combination, will forebear from asserting against, and never sue far or look for satisfaction with respect to, &azos and its Members and their respective insurers, agents, servan ts, employees, officers, direc tors, m embers, consultants, attorneys and representatives, past and present, and any and all of their respective successors, I
subsidiaries, and affiliates and their respective insurers, agents, servants, emp:oyees, officers, directors, shareholders, members, consultants, attorneys and representatives, l
past and present, any Subject Claim in any manner involving, concerning, arising out of, or l
l relating to Comanche Peak, and the management, procurement, conversion, enrichment, i
fabrication, shipping, transportation and storage of the Fuel, except for claims arising out,
1
of or under this Agreement or any of the other agreements or instrt>ments to be delivered by TU Electric ursuant hereto; and TU :ectric, for itself and on behalf of its parent, c
subsidiaries and affiliates, and any person or entity, private or governmental, claiming by, j
through or under them, including without limitation, to the extent it has the standing and right under law to do so, its or their customers, and its or their respective insurers,
- agents, servants, employees, o f ficers, directors, consultants, at torneys and representatives hereby further agrees and covenants that, upon and after the Closing, neither it nor they, individually, collectively or in any combination, will directly or indirectly challenge, contest or assert any complaint against Brazos or its Members in any court or before any administrativa agency or body or in any other forum whatsoever with l
respect to, or in any manner involving, concerning, arising out of, or relating to, Comanche Peak and the Joint Ownership Agreem ent and in connection with the l
performance or nonperformance by Brazos of its duties, responsibilities or obligations under the Joint Ownership Agreement, and on account of anything that has oesurred or i
may have occurred, in whole or in part, with respect to Comanche Peak, (ir.cludiiig
(
separately the Station, Fuel, or Transmission Facilities) and the incidents and attributes 4
thereof and any of the foregoing whether known cr unknown, except with regard to Subject Claims arising out of or under this Agreement or any of the other agreements or mstrume its to be delivered by TU Electric pursuant hereto and except that nothing herein shall prohibit TU Electric from charging Brazos for any electric power and energy purchased by Brazos from TU Electric in accordance with the rates set forth in TU Electric's tariff as same may be approved and in effect from time to time even though said rates may include costs related to Comanche Peak. At the Closing, TU Electric will execute and deliver to Brazos the form of Covenant Not to Sue attached hereto as
' Exhibit M.
Further, TU Electric covenants and agrees that it will encourage and solicit
)'
its attorneys, including Worsham, Forsythe, Sampels & Wooldridge, Jackson, Walker, i
j Winstead, Cantwell & Miller, Hunton & Williams, Ackles, Ackles & Ackles and Roy Minton, and TU Electric's consultants, not to oppose or assist any third party in opposing
-4 2 -
l I
,=.
s Brazos in connection with any matters relating to Comanche Peak (except that nothing herein shall be construed to prohibit said attorneys and consultants from representing TU Electric in connection with proceedings in which TU Electric's rates are being I
determined even though said rates may include costs related to Comanche Peak and Brazos may purchase electric power and energy pursuant to said rates); and, if necessary to prevent a conflict of interest, it being understood and agreed that TU Electric's separately employed consultants and a ttorneys may have obtained or developed information regarding Brazos in the course of the Pending Litigation that arguably could De inequitable for them to otherwise utilize in view of the consideration being rendered by i
l Brazos hereunder in order to obtain a final settlement of the matters referred to in this Agreement, TU Electric covenants and agrees that it will take all such action as may be necessary or appropriate in order to prevent the consultants and attorneys, including I
Worsham, Forsythe, Sampels & Wmidridge, Jackson, Walker, Winstead, Cantwell & Miller, Hunton & Williams, Ackles, Ackles & Ackles and Roy Minton, separately employed by it in 1
connection with the Pending Litigation or otherwise, from participating or assisting in any
(
manner adverse to TU Electric's duty of cooperation herein or to Brazos in connection 4
with any current or future proceedings or matter before the PUC (except that nothing herein shall be construed to prohibit said attorneys and consultants from representing TU Electric in connection with proceedings in which TU Electric's rates are being determined even though said rates may include costs related to Comanche Peak and Brazos may purchase electric power and energy pursuant to said rates) involving or relating to Comanche Peak, or any current or future proceedings (except that nothing herein shall be construed to prohibit said attorneys and consultants from representing TU Electric in connection with proceedings in which TU Electric's rates are being determined even though said rates may include costs re. lated to Camanche Peak and Brazos may purchase electric power and energy oursuant to said rates) before any court or before any administrative agency or body or w other forum whatsoever with respect to, or in any manner involving, concerning, sng out of, oc relating to the acts or I
-4 3 -
l 4
ynissions of Brazos referred to or in question in the Pending Litigation or which could have been brought into questiori in the Pending Litigation. The covenant set forth in the prior sentence shall survive the Closing and remain in force until the expiration of any l
Subject Claim covered thereby, 9.5 3ssumption of _ liabilities and Obligations and Indemni,fication.
Effect4ve upon the Closing, TU Electric agrees to assume cl! of the duties, responsibilities, j
lipilities and obligations of Brazos under the Joint Ownership Agreement.
- Further, i
effective upon the Closing, TU Electric agrees to indemnify, hold harmless and defend l
13razos and its Members and customers (including the customers of Bra os' Nembers and I
l einer wholesale customers) from and against all Subject Claims or any alleged willful or intentivnal acts of the Project Manager, its agents, servants, employees or independent contractors acting on behalf of tne Project Manager which may be asserted against Brazos l
and its Members and customers (including the customers of Brazos' Members and other wholesale customers) by any third party (other than Brazos' Members and customers and i
the customers of Brazos' Memtiers or other wholesale customers acting in such capacity),
including without limitation Subject Claims predicated upon the alleged actual or imputed negligence or gross negligence of Brazos and its Mein 0ers and customers (inctild!ng the customers of Brazos' Members and other wholesale cushmerp o ; sing out of or connneted l
with, the location, planning, design, construction, Le:ensiq, cond..lon, m
.ance, I
operation and decommissioning of Comanche Peak, includL.g but not limited to
~ claims asserted or which might have been or might hereafter be asserted in the Pending Houston Suit and in the Pending Somervell County Sulti provided, however, that TU Electric specifically shall not indemnify Brazos and its Members or customers in connection with any Subject Claims which may be asserted by Drazos' Members and customers, and the customers of Brazos' Members or other wholesale customers, or crWitors, actind in such capacity, which in any manner relate to Drazos' participation as an Owner of Comanche i
Peak or as a party to the Joint Ownership Agreement, or by reason of Brazos'involycment in the Pending Litigation, or by reason of the execution of th!s Agreement and
-4 4 -
l
participation in the transactions provided for herein, and provided further, that Tt) Elcettic specifically shall not indemnify Brazos in connection with any Subject Claims wnich may be asserted by Tex-La or TMPA or others which in any way relate to Brazos' execution of the Joint Ownership Agreement, or which a"se t,y reason of Brazos' g
l pst ticipa tion in the Pending Litigation, or by reason of Brazos' execution of this Agreement and participation in the transactions provided for herein. TU Electric will, in addition to providing och indemnity, assume the defense of Brazos end its Members and customers (and the customers of Brazos' Members and other wholesale custorr.erM in eny tribunal where any such claim is asserted. Pursuant hereto, at the Closing TU Electric will execute and deliver to Brezos the form of Assumption and Indernnity Agreement pitsched hereto as Exhibit N.
EffectlVe upon the Closing, Br6zos agrees to indemnify, l
hold harmless and defend TU Electric, TUC and their respective subsidiaries, affiliates l
l and customers from and against any and all Subject Claims of Brazos or anyone related to t
or affiliated with Brazos, including Brazos' Members, customers (including the customers l
of Brazos' Members and other wholesale customers) and creditors, acting in such capacity, relating to Brazos' execution of, or participation in, the Joint Ownership Agreement, I
Brazos' execution of this Agreement and participation in the transactions provided herein, I
l and Brazos' activities as an Owner separate and apart from joint activities with all other i
Owners or activities by, through and under the Project Manager. Further, effective upon
{
I the Closing, Brazos agrees to indemnify, hold harmless and defend TU Electric, TUC and their respective subsidiaries, affiliates and customers from and against any and all Subject l
Claims of Brazos or anyone related to or affiliated with Brazos, including Brazos' Members and, to the extent they are acting in such capacity, Brazos' customers (including the customers of Brazos' Members and other wholesale customers) and creditors, with respect to, or in any manner involving, concerning, arising out of, or relating to (i) the acts or omissions of TU Electric or the Project Manager referred to or in questhn in the Pending Litigation or which could have been brought into question in the Pending Litigat m, including without limitation Subject Claims based upon the negligence or gross
-4 5 -
- --~~
' -~ ~~~ ~ ~ ~
ggence, sole, joint or concurrent, of TU Electric or the Project Manager; and (10 the sets or omissions of TU Electric or the Project Menager with respect to Comanche Peak that occur, in whole or in part, prior to the Date of Commercial Operation (as said term is defined in the Joint Ownership Agreement), including without limitation Subject Claims cased upon the negligence or gross negligence,5o5, joint or concurrent, of TU Electric or the Project Manager. Pursuant hereto, ai the Closing Brazos will execute and deliver to
}
g Electric the form of Indemnity Agreement attsched hereto as Exhibit O.
- 9. 6 covenant of Cooperation. The pcrties hereby covenant and agree to assist, cooperate with, and support each other (other than financial support) in the event that
- third party institutes any action against either of them with respect to Comanche Peak and any incident cr attribute thereof, except that neither of them shall be required to tske any position which it believes is contrary to its material pecuniary interests or
)
contrary to the truths provided, however, that in any event, Brazos shall not cooperate with or support any party in the Pending Litigation with regard to the Subject Claims being made therein by Tex-La and TMP A.
9.7 Termination of Participation. To the extent that Brazos can, and not be in violation of Section 210 of the Energy lleorganization Act, 42 USC Section 5851 (1983),
upon the execution of this Agreement, Brazos, for itself and on behalf of any person or entity, private or governmental, claiming by, through or unCer Brazos, including without l
Limitation, to the extent it has the standing and right under law to do so, its Members and customers (including the customers of Brazos' Members and other wholesale customers) i j
and its or their respective insurers, agents, servants, employees, officers, directors, eunsultants, attorneys and representatives, agrees and covenants to immediately abate any and all currently pending actions whatsoever, directly or indirectly, involving or relating to the prosecution or processing of any Subject Claims in any way relating to Coma 3che Peak against TU Electric or TUC, or thir respective directors, officers, employees, agents, insurers, consultants or attorneys, past or present, and any and all of their respective successors, subsidiaries and affiliates and their respective insurers, 1
l
-4 6 -
4 aients, servants, employees, officers, directors, shareholders, consultants, attorneys and representatives, past and present, presently or hereafter pending m any court or before any administrative agency or body (except Subject Claims being made in the Pending ut;gation, which sh:11 be governed by the provisions of Article IV of this Agreement). In ch capacity and to the extent Brazos can and not be in.olation of Section 210 of the g,7gy Reorganization Act, 42 USC Section 5851 (1983) (Brazos hereby representing and I
arranting that it knows of no violation, actual or alleged, of Section 210 of the Energy I
gecrganization Act, 42 USC Section 5851 (1983) which has not heretofore been disclosed I
j to TU Electrie in writing), Brazos agrees and covenants that Brazos for itself and on i
i eehalf of any person or entity, private or governmental, claiming by, through or under Brazos, including without limitation, to the extent it has the standing and right under law to do so, its Members and customers (including the customers of Brazos' Members and l
other wholesale customers) and its or their respective insurers, agen ts, servants, employees, officers, directors, consultants, attorneys and representatives, shall not prosecute, directly or indirectly, any Subject Claims, objections, motions or other actions adverse to TU Electric in connection with appucutions for granting the requisite licenses
/
and approvals for Comanche Peak pending before the NRC and its Atomic Safety and 1.icensing Boards and Atomic Safety and Licensing Apper.1 Boards, including, without limitation, in NRC Dockets Nos. 50-445-OL, 50-446-OL and 50-445-CPA, the ongoing f
I antitrust review relative to the licensing of Comanche Peak, and any and all appeals from rulings and orders of the NRC related to, or growing out of, said Dockets which are pending before any court. Within three (3) Business Days after the Closing, Brazot shall cause the dismissal, with prejudice to the refiling of same in any forum ud in any form l
whatsoever, of all of its Subject Claims against TU Electric, TUC and their subsidiaries and affiliates in the Pending Litigation, and shall withdraw all of its Subject Claims adverse to TU Electric in connection with the granting of the requisite licenses and approvals for C:manche Peak pending in the NRC Dockets Nos. 50-445-OL, 50-446-OL and 50-445.CPA and any and all proceedings in any manner related to, or arising out of, said Dockets.
-4 7 -
,p__
0 Brazos agrees and covenants, from and af ter the Closing, to fully cooperate with TU Electric and provide all reasonably requested assistance, including providing the legal assistance of its attorneys (including Joseph Robert Riley, Spiegel & \\leDiarmid and l
geLe Purnell Rain Ifarrell), in a timely manner in connection with any legal proceedings (excluding the Pending Litigation) involving Comanche Peak, including the beensmg of cynanche Peak by the NRC, including without limitation the ongoing antitrust review in 3
connection therewith, and all proceedings involving Comanche Peak before the PCC to the extent of not opposing, or assisting any third party in opposing, the position being advocated by TU Electrie. Except as specifically provided otherwise in this Agreement, TU Elcetric shall promptly reimburse Brazos for any end all reasonable ou t-o f toc k e t expenses and any and all reasonable outside professional fees, including, without limitation, attorneys fees, incurred by Bra ',es in providing such cooperation.
9.8 TU Electric Actions and Litigation Costs. Within three (3) Business Days after the Closing, TU Electric shall cause the dismissal, with prejudice to the refiling of same in any forum and in any form wr.atsoever, of all of its Subject Claims against Brazos in the Pending Litigation; provided, however, that TU Electric shall have the right to retain Brazos as a party to the Pending Dallas Suit, not for the purpose of seeking any affirmative rehef against or from Brazos, but for the purpose of defeating a possible contention on the part of the other parties thereto with respect to the absence of a l
necessary party to TU Dectric's Subject Claims against the other parties in said case (it being understood that TU Dectric's position is that any such contention would not be valid). TU Doctric shall promptly reimburse Brazos for any and all expenses reasonably incurred because of any such retention of Brazos by TU Doctric in the Pending Dallas Suit. It is expressly understood that nothing herein shallin any manner affect, diminish or impair TU Electric's right to fully prosecute any and all of its Subject Claims against the other parties in the Pending Litigation. Except as provided otherwise above, all costs and l
expenses related to or incurred in contmetion with the rending Litigation shall be borne i
l and paid by the party by whom incurred oc to which they are related.
l l
-4 8 -
I k
9,9 Termination of _ Joint Ownership Agreement Relationship.
E.xcept as merwise provided in Section 9.5 hereof with respect to TU Electric's assumption of Brazov obligations under the Joint Ownership Agreement, Brazos and TU Electric hereby I
agree that, upon the Closing, the Joint Ownership Agreement, as between Brazos and 1
k TU Lle:tric, shall be deemed terminated and of no further force and effect as between
. hem, it being understood that under the circumstances described in Article !!, Section 6 of the Deed of Trt,3t the Joint Ownership Agreement may be reinstated.
ARTICLE X i
TERMINATION OF AGREEMENT 10.1 prmination of Agreement by TU Electrie. In the event at any time after TU Electric's having given written notice of intent to terminate this Agreement and the lapse of two (2) Business Days of discussion (which shall take place within five (5) days of I
said written notice of intent) between Brazos and TU Electric with respect thereto, TU Llectric reasonably determines that the Closil.g cannot occur for reasons that are beyond TU Electric's control, TU Electric may terminate this Agreement upon seven (7) l Business Days' written notice of termination from TU Electric to Brazos, and Brazos agrees to promptly refund and pay to TU Electric the Signing Payment, plus in addition thereto an increraental amount calculated from the date of receipt of the Signing l
Payment by Brazos at the rate of eight and one-half percent (8-1/2%) per annum. Brazos I
agrees that it shall have no right to withhold payment of any amounts it agrees to pay herein in respect to or on the basis of its alleged claims in the Pending Litigation.
Payment by Drazos of such funds to TU Electric shall constitute acceptance by Brazos of TU Electric's right to terminate this Agreement under the circumstances. In the event of such termination, the rights of the parties with respect to Comanche Peak shall be 1
i governed by the Joint Ownership Agreement, the Transmission Agreement executed on July 25,1979, and the applicable law as determined and applied in the-Pending Litigation i
or the New Lawsuit.
I
-4 9-
.]
k ___
1 10.2 Termination of Agreement by Brazos. In the event at any time af ter brazos' naving given written notice of intent to terminate this Agreement and the lapse of two (2)
Business Days of discussion (which shall take place within five (5) days of said written stice of intent) between Brazos and TU Electric with respect thereto, Brazos reasonably k
determines tha t the Closing cannot occur for reasons that are beyond Brazos' control.
grazes may terminate this Agreement upon seven (") 13 Jsiness Days' written notice of termination from Brazos to TU Electric and brazos will immecietely refund and pay to TU Electric the Signing Paym ent plus in addition thereto an incremental amount esiculated from the date of receipt of the Signing Payment by Brazos at the rate of eight i
and one-half percent (8-l/2%) per annum. Brazos agrees that it shall have no right to I
withhold payment of any amounts it agrees to pay herein in respect to or on the basis of its aljeged claims in the Pending Litigetion. Acceptance by TU Electric of the return of such funds from Brazos shall constitute acceptance by TU Electric of Brazos' right to terminate this Agreement under the circumstances. In the event of such termination, the rignts of the parties with respect to Comanche Peak shall be governed by the Joint Ownership Agreement, the Transmission Agreement executed on July 25, 1979, and the applicable law as determined and applied in the Pending Litigation or the New Lawsuit, 10.3 Automatic Termination. Unless either the Closing has occurred or there is a written agreement signed by TU Electric and Brazos to extend the date set out in this i
I paragraph, this Agreement shall automatically terminate at 5:00 p.m., Dallas, Texas time, on the date which is at the end of nine (9) months after the date hereof, without any need for the giving of notice or any other action by either TU Electric or Brazos, in the event such termination occurs, Brazos will immediately refund and pay to TU Electric the Signing Payment, plus in addition thereto an incremental amount cateulated from the date of receipt of the Signing Payment by Brazos at the rate of eight and one-half percent (8-1/2%) per annum. Payment by Brazos and acceptance by TU Electric of the amount set forth in this paragraph shall constitute acceptance by TU Electric and Brazos of termination of this Agreement. In the event of such termination, the rights of the parties
, _ )L
r with respect to Comanche Peak shall be governed by the Joint Ownership Agreement. the Transmission Agreement executed on July 25,1979, and the applicable law as determined and applied in the Pending Litigation or the New Lawsuit, g
10.4 Termination of Covenants, Releases and indemnifications. If this Agreement terminated pursuant to the provisions of Article X hereof and all amounts specified i3 therein are refunded and paid by Brazos to TU Electric, all releases, covenants not to sue, inde nnifications, assu.nptions and guarantles hereunder or contained in any exhibit hereto shall be void and of no effect whatsoever.
ARTICLE XI
~
.(
MISCELLANEOUS PROVISIONS I
11.1 Bulk Sales Law Waiver. To the extent it may lawfully do so, TU Electric hereby waives compliance by Brazos with the bulk sales law of any jurisdiction, if applicable, with respect to the transactions contemplated hereby, and Brazos agrees to hold TU Electric harmless from and against any liability, loss, cost or expense, including reasonable attorneys' fees, which TU Electric may sustain by reason of such noncompliance. TU Electric agrees to give Brazos prompt notice of the assertion of any claim resulting from such noncompliance, 11.2 Further Assurance. Brazos agrees th:t, af ter the Closing, it will from time to time, upon the reasonable request of TU Electric, execute, acknowledge and deliver in I
proper form any instrument of conveyance or further assurance necessary for perfecting in TU Electric or its successors and assigns, as the case may be, the title to the Purchased Assets or for carrying out the purpose and intent of this Agreement.
11.3 No Bird Party Benefletaries. We parties hereto acknowledge and agree that this Agreement is entered into for the sole benefit of TU Electrie, TU(.:, Brazos ard Brazos' Members, their respective successors and assigns (to the extent permitted) and, to the extent specifically and expressly set forth elsewhere in this Agreement, their respective insurers, agen ts, servants, employees, officers, directors, subsidiaries, affiliates, representatives and customers, and that nothing in this Agreement s5all be 1
e construed as giving any right, benefit, remedy or claim to any person, firm, corporation or other entity, other than TU Electrie, TUC, Brazos and Brazos' Members, their respective successors and assigns (to the extent permitted) and, to the extent specifically and l
capressly set forth elsewhere in this Agreement, their respective insurers, egents, ser v an ts, e mploy ees, officers, directors, subsidiaries, affiliates, representatives and customers.
Without in any way limiting the foregoing provisions, it is expressly
?
understcoo that nothing in this Agreement shall affect any of tne rights, obligstions und remedies among TU Electric and TMPA and Tex.ta under the Joint Ownership Agreement or otherwise.
11.4 De f a u lt, in the event of default in performance hereunder by either Brazos o, TU Electrie, the non-defaulting party shall be entitled to ell remedies legally available to it including the remedy of specific performance, the parties hereto agreeing that no adequate remedy at law exists.
11.5 Property and Transfer Taxes.
1 (a)
Property Taxes.
All real and personal property taxes, and other i
similar taxes, charges, and fees imposed on or with respect to or measured by the Purchased Assets not heretofore paid by Brazos shall be the responsibility and liability of TU Electrie, except for such taxes, charges and fees caused by the action or inaction of Brazos I
individually or in combination with any of the Owners other than TU Dectric or the Project Manager.
(b) 1Tansfer Taxes.
The payment of any and all real estate transfer, stamp, documentary, deed and recording taxes and fees, and all sales and excise taxes imposed in connection with the Purchased Assets or the sale x transfer of the Purchased Assets shall be the responsibility i
and liability of TU Dectric.
l
-5 2 -
-..w.
11.6 Expenses. Brazos and TU Electric shall each pay all expenses incurred by enem respectively in connection with this Agreement, including the fees of their respective counsel h.td accountants, if any, except as may be otherwise provided.
1.7 Governing Law. This Agreement shall be construed, and the provisions hereof shall bc enforced, in accordance with the laws of the State of Texas.
11.8 Announce m en ts. All press releases or other announcements by TU Electric or Brazos prict to or in connection with the execution of this Agreement shall be approved by Brazos and TU Electric prior to the issuance thereof, which approval shall not be unreasonably withheld, i
11.9 Entire Agreement, Amendments. This Agreement, and the other documents delivered pursuant hereto, constitute the entire agreement between Brazos and TU Electric relatirq to the subject matter hereof and supersede all other prior agreements, representations and understandings between the parties. No supplement to, or moulfication or amendment of, this Agreement shall be binding, unless executed in writing by both Brazos and TU Electric.
I 11.10 Assigns, etc. This Agreement shall be binding upon and inure to the benefit of Brazos and its Members, and TU Electric and TUC, and their respective suceessors and assigns but shall not confer any rights upon any third persons excet to the extent expressly provide <.erein. TNs Agreement may not be assigned by Brazos without the I
written consent of TU Electric or by TU Electric without the written consent of Brazos.
11.11 Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (a) if served personally cn the party to whom notice is to be given at the addrenes and to the attention of the persons named as follows, or (b) if sent by telex or nationally recognized overnight delivery service, or (c) by first class mail, postage prepald, certified and return receipt requested, and properly addressed as follows:
i
-$3-1
i (a)
To Brazos att Brazos Electric Power Cooperative, Inc.
P. O. Box 2585 Waco, Texas 76702-2585 Attention: Richard E. McCaskill
[
ror federal Express:
Drazos Electric Power Cooperative, Inc.
2404 LaSalle Avenue waco, Texas 76700 Attention: Richard E. McCaskill (with copy to)
(
Joseph Robert Riley law Offices of Joseph Robert Riley 500 RepublicBank Tower P. O. Ibx 153 Waco, Texas 76703 (b)
To TU Electric att Texas Utilities Electric Company 2001 Bryan Street Suite 1900 Dallas, Texas 75201 Attention: Erle Nye (with copy to)
Worsham, Forsythe, Sampels & Wooldridge 2001 Bryan Street j
Suite 3200 a.
Dallas, Texas 75201 l
Attention: Robert A. Wooldridge 11.12 Headings. The division of this Agreement into Articles and Sections and the l
l Insertion of headings are for convenience of reference only and shall not affect the l
i construction or interpretation of this Agreement.
l 11.13 Execution and Counterparts. This Agreement may be executed in any number of counterparts, each and all of which shall be deemed for all purposes to be one agreement.
11.14 Interest on Past Due Payments. h the event that Brazos or TU Electric fails to timely make any payments to the other which become dus under this Agreement, the
-5 4 -
t l
7 incremental amount due on the past due payment for the period between and including the due date and the date actually paid shall be calculated at the rate of twelve and one-half percent (12-1/2%) per annum.
g 11.15 Use of Representations or Recitals. Any representations or recitals made by k
g,azos and TU Electric in this Agreement are for the purposes of this Agreement only, in the event that this Agreement is terminated or does not timely close at the Closing Date, neither Brazos nor TU Electric shall use, as evidence or otherwise, any such representations or recitals against the other in any way in the New Lawsuit or any other lawsuit concerning any Subject Claims which have been made in the Pending Litigation.
11.16 Separate Litig a tion.
Any Subject Claims arising out of or under this agreement shall be prosecuted in a lawsuit separate from the lawsuit in which any Subject Claims which have been made in the Pending LitigLtion are prosecuted, 11.17 Construction of Comanche Peak, if TU Electric continues to believe that the completion of Comanche Peak is economically and otherwise feasible, TU Electric j
covenants that it will use its best efforts to complete, or cause to be completed, the construction of Comanche Peak and placing the same in operation.
11.18 Severability.
The parties hereto agree that the various obligations and undertakings specified in this Agreement and in the other agreements or instruments referred to herein are each mutually dependent upon one another and, in the event that any fundamental or essentialprovision of this Agreement or any of such other agreements or instruments is finally determined to be invalid, illegal or unenforceable by a court or
(
administrative body having jurisdiction, TU Electric and Brazos hereby agree to conduct good faith negotiations for the purpose of reaching a mutually acceptable written agreement to replace the deleted provision with a provision which will most nearly accomplish the purpose and intent of the deleted provision.
Falling to reach such a mutually acceptable agreement, the partius shall rescind the transactions provided for herein and therein.
-5 5 -
-~
11.19 Time of the Essenc e.
Time is of the essence in the performance of this y,gr ee ns en t.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date :et forth at the outset hereof.
TEX AS UTILITIES ELECTRIC COMPANY (Corporate Scal)
Dy*(
~
'A its:C5airrEan of the Board and (
ATTEST 8 Chief Executive Wg a 4 %
y,g Corpora *e Secretary lus i
i
(
BRAZOS ELECTRIC POWER COOPERATIVE, INC.
i.
(Corporate Seat)
U t.
A f
/
l Its:
Executive V.P./ G.M.
i ATTEST:
u,
/
rerretayy l
ts
-6 6 -
EXHIBfT J RELEASE STATE OF TEX AS S
S COUNTY OF MC LENN AN S 1
For and in consideration of the agreements, undertakings, promises, and covenants
[.
of TU Electric, TUC, and their subsidiaries e.nd affi'Jates set forth in the Agreement, I
including without limitation the contemporaneous delivery to Brazos by TU Electric of (1) a Release releasing certair$ claims which TU Electric TUC, and their subsidiaries and 4
f affiliates have or may have against Brazos, its Members and customers (including the l
customers of Brazos' Members and other wholesale customers), (2) a Cove-ant Not to Sue r
under which TU Electrie, for itself and on behalf of TUC, and their subsidiaries and l
affiliates and on behalf of any person or entity, private or governmental, claiming by, through or under TU Electric or TUC, covenants not to sue upon certain claims which they I
may have against Brazos or its Members, and (3) an Assumption and Indemnity Agreement I
under which TU Electric assumes certain duties, responsibilities, liabilities and obligations l
I I
of Brazos, its Members and customers (including the customers of Bravos' Members and I
other wholesale customers), and agrees to indemnify Brazos, its Members and customers i
(including the customers of Brazos' Members and other wholasale customers), against l
I certain claims, the adequacy and sufficiency of such consideration being hereby 1
acknowledged and confessed, Brazos hereby agrees to the followings i
Definitions. As used herein, tne following terms have the fouowing meanings:
)
A.
" Agreement" means that certain Agreement dated Juny 5,1988, by and h
between Brazos and TU Electric.
5)
B.
"Brazos" means Brazos Electric Power Cooperativa, he.
C.
" Comanche Peak" means the nuclear-fueled electric generating facility J
under construction on certain lands situated in Hood and Somervell Counties, Tezas, and J
consisting of two units taving a reminal capacity of 1,150 megawatts each, and related
.g.
_ Mk n
n properties, snd is the aggregate and combination of the Station, Fuol, and Transmtssion paeilities, and all other rights and interests associated with or relating thereto.
D.
" Fuel" means the Comanche Peak nuclea? fuel, irrespective of chemleal and/or physical form, and the rights and interests related thereto.
I E.
"JOA" means that certain instrument entitled on the cover page thereof jo!NT OWNERSHIP AGREEMENT BETWEEN DALLAS POWER & LIGHT COMPANY, TEXAS ELECTRIC SERVICE COMPANY TEXAS POWER & LIGHT COMPANY, TEXAS L'TILITIES GENERATING COMPANY, TEXA3 MUNICIPAL POWER AGENCY AND BRAZOS ELECTRIC POWEP COOPERATIVE, INC. FOR COMANCHE PEAK STEAM ELECTRIC STATION," executed on January 2,1979, together with and as modified by that certain instrument entitled on the cover page thereof " Modification of Joint Ownership Agreement Between Dallas Power & Light Company, Texas Electric Service I
Company, Texas Power & Light Company, Texas Utilities Generating Company, Texas g
Municipal Power Agency and Brazos Electric Power Cooperative, Inc.: For Comanche Peak Steam Electric Station," executed on June 1,1979, together with and as amended by l
(i) the Amendment of Joint Ownership Agreement, executed on December 9, 1980, between Dallas Power & Light Company, Texas Electric Service Company, Texas Power &
l Light Company, Texas Utilities Generating Company, TMPA, BrazN, and Tex-La, J
together with and as amended by (ii) the Second Amendment of Joint Ownership Agreement, executed on February 12, 1982, between Dallas Power & Light Company, I
Texas Electric Service Company, Texas Power & Light Company, Texu Utilities I
Generating Company, TMPA, Brazos, and Tex-La.
I P.
" Members" means the twenty (20) Texas non-profit electrie cooperative I
corporations that are members of Brazos, u set out in Exhibit C to the Agreement.
l G.
" Owners" means collectively TU Electric, Brazos, TMPA and Tex-La, as
]
owners of Comanche Peak in accordance with the terms of the JOA, or singularly any of
]
such parties.
.I i i
=
H.
"Pending Litigation" means Cause No. 399,482 - Brazos Electric Power gperative, Inc. v. Texas Utilities Company, Texas Utilities Electric Company, Texas L.til_ities Mining Company, and Texas l'tilities Servlees Incorporated. - in the District i
court of TTavis County, Texas, 345th Judicial District; Cause No. 3 99,336 -Tex-la Electric Cooperative of Texas, Inc., and Texas Municipal Power vency v. Texas Utilities i
g Texas Utilities Electric Company, - in the District Court of Travis County, Texas, 98th Judicial District; and Cause No. 86-6809-A -- Texas Utilities Electric Company v.
pr,ta Electric Cooperative of Texas, Inc., et al. - in the District Court of Dallas j
County, Texas,14th Judicial District.
L
" Project Manager" means TU Electric designated and acting as such in accordance (or purportedly in accordance) with the terms of the JOA.
j J.
" Site" means approximately 7,669 acres owned (in fee or other estr.te or interest) by the Owners, as tenants in common, and located in Hood and Somervell Counties, Texas.
K.
" Station" means the 3ite, all improvements thereon (including Squaw I
Creek Lake and Park) and all fixtures and attachments thereto, as well as (i) all personal I
property thereon and associated therewith or related thereto and owned bj the Owriers, and (ii) all rights (tangible or intangible), and all casements and other interests of any 6
nature associated therewith or related thereto and owned by the Owners, excluding, however, the rust, and the Transmission Facilities.
1 L
" Subject Claims" means any and all claims, actions, controversies, causes of action, disputes, demands, and complaints of whatsoever kind or nature and whether known or unknown.
)
J M.
" Tex-La" means Tex-14 Electric Cooperative of Texas, Inc.
N.
"TMPA" means Texas Municipal Power Agency.
O.
'-Transmission Facilities" means the Comancho Peak - DeCordova 345 kV electrical transmission line approximately 14.4 miles in length, and asscelated rightt-of-way, equipment, fixtures and personal property.
3
4 p.
"TUC" means Texas Utilities Company, which is a Texas corporation and he parent of TU Dectric.
Q, "TU Dectric" means Texas Utilities Electric Company, which is a Texas
)
gepors tion.
Brazos, except as provided in paragraph !!! herein, for itself and on 31, Release.
Def.alf of any peMon or enuty, pate or gownmental, claWng W, Wo$ or Wer Drs20s, inclu;ing without limitation, to the extent it has the standing and right under law do so, its Members and customers (including the customers to j
of Brazos' Members and other wholesale customers) and its or their respective insurers, l
ag en ts, serv ants, e mployees, o ffic ers, dir ec tors, consultan ts, a t torneyJ, and representatives does hereby waive, release, discharge, renounce, and relinquish any and all l
$adject Claims relating to Comanche Peak which it has or they have, or may have, whether known or ranknown, contingent or absolute, including, without limitation, those based on common law, whether contract (expressed or implied, including express or implied warranty) or tort (including, without limitation, intentional tort, negligence or i
gross negligence, sole, joint, or concurrent) or strict liability or fraud, and thess cased J
upon any Federal, state, or local statute, law, order or regulation, including without I
timitation, the Atomic Energy Act of 1954, as amended, the regulations of the United i
States Nuclear Regulatory Commission, the Securities Act of 1933, as smended, or the Securities Act of 1934, as amended, and any rule or regulation under either, the Texas
!j Securities Act (Title 19, Articles 581-1, et seq., V. A.T.S.) and the Texas Deceptive Trade I
Practices and Consumer Protection Act, against TU Dectric or TUC, or both, in any capacity, whether individually, as the Project Manager, or otherwise, and thstr respective J
insurers, agents, servants, employees, officers, directors, shareholders, consultants, l
attornOs and representatives, past and present, and any and all of their respective successors, subsidiaries, and affilletes, and their respective insurers, agents, servants, d
employees, officers, directors, shareholders, consultants, attorneys, and representatives, past ud present. w...
Exceptions to Release. Ikazos specifically does not release the following:
(a)
Any Subject Claims arising out of or under the Agreement or any of the agreements or instruments to be delivered by TU Electric or TUC pursuant to the t
Agreement.
J (b)
Any Subject Claims which could not have been brought in the Pending i
I Latigation and which accrue on or after the Date of Commercial Operation (as that i
I term is defined in the J0A) and which are based upon the acts or omissions of i
TU Electric or the Project Manager other than acts or omissions in connection with
')
the planning, design or construction (or the management thereof) of Comanche Peak.
IV.
Covenant.
Brazos hereby covenants and warrants that it has not assigned any I
Subject Claims that are hereby released.
V.
Con trol.
To the extent any provision of this Release conflicts with any provision in Section 9.1 of the Agreement, this Release shall control as to the agreement of the parties.
I EX ECUTED t'lis the day of
,1988, as duly authorized I
by an appropriate resolution of its Board of Directors.
1 BRAZOS ELECTRIC POWER COOP ER ATIV E, IN C.
t i
l (Corporata Scal)
Dy A M ST:
Its:
,i Its:
I k..
l l
EXHIBIT K COYEN, ANT NOT TO SDE TATE OF TEX AS S
S i
cocNTY F MC LENNAN 5 For and in consideration of the agreements, undertakings, promites, and covenants of TU Electric, TUC, and their subsidiaries and afflUstes set forth in the Agreement, including without limitation the cor.temporaneous delivery to Brazos by TU Electric of (1) a Release releasing certain ulaims which TU Electric, TUC, and their subsidiaries and I
affiliates have or may have against Brazos, its Members and customers (including the customers of Brazos' Members and other wholesale customers), (2) a Covenant Not to Sue under which TU Electric, for itself and on behalf of TUC, and their subsidiaries and I
affiliates and on behalf of any person or entity, private or governmental, claiming by, through or under TU Dectric or TUC, covenants not to sue upon certain claims which they may have against Brazos or its Members, and (3) an Assumption and indemnity Agreement J
under which TU Dectric assumes certain duties, responsibilities, liabilities and obligations of Brazos, its Members and customers (including the customers of Brazos' Members and i
other wholesale customers), and agrees to indemnify Brazos, its Members and customers 1
(including the customers of Brazos' Members and other wholesale customers), against certain claims, the adequacy and sufficiency of such considerna being hereby l
acknowledged and confessed, kazos hereby agrees to the following:
L Definitions. As used herein, the following terms have the following meanings:
A.
" Agreement" means that certain Agreement dated July 5,1988, by and 1
I between Brazos and TU Doctrie.
B.
"Brazos" means Brazos Doctric Power Cooperative, Inc.
C.
" Comanche Peak" means the nuclear-fueled electric generating facility 4
under construction on certain lands situated in Hood and Somervell Counties, Texas, and i
consisting of two units having a nominal capacity of 1,150 megawatts each, and related _U k
operties, and ts the aggregats end combination of th] Station. Fuel, and Trarumission p,cilities, and all other rights and interests associated with or relating thereto.
D.
" Fuel" means the Comanche Peak nuclear fuel, irrespective of chemical and/or physical form, and the rights and intertsts related thereto.
E.
"JOA" means that certain instrument entitled on the cover page thereof l
,1 10!NT UWNERSHIP AGREEMENT BETWEEN DALLAS POWER & LIGHT COMPANY.
TEXAS ELECTRIC SERVICE COMPANY, TEXAS POWER & LIGHT COMPANY, TEXAS 5
L'TILITIES GEN ER ATING COMPANY, TEXAS M UNICIP A L POWER AGENCY AND 3RAZOS ELECTRIC POWER COOPERATIVE, lNC. FOR CO'dANCHE PE AK STEA \\1 ELECTRIC STATION." executed on January 2,1979, together with ad as modified by that certain instrument entitled on the cover page thereof " Modification of Joint Ownership Agreement Between Dallas Power & Light Company, Texas Electric Service l
Company, Texas Power & Light Company, Texas Utilities Generating Company, Texas I
stameipal Power Agency and Brazos Electric Power Cooperative, inca Por Comanche Peak Steam Electric Station," executed on June 1,1979, together with ard as amended by (i) the Amendment of Joint Ownership Agreement, executed on December 9, 1980 between Dallas Power & Light Company, Texas Electric Service Company, Texas Power &
I Light Company Texas Utilities Generating Company, TMPA, Breos, and Tex-La, together with and m amended by (ii) the Second Amendment of Joint ownersnip Agreement, executed on February 12, 1982, between Dallas Power & Light Company, Texas Electric Service Company, Texas Power & Light Company, Texas Utilities Generating Company, TMP A, Brazos, and Tex-La.
h P.
" Members" means the twenty (20) Texas non-profit electric cooperative d
corporations that are members of Brazos, as set out in Exhibit C to the Agreement.
(
G.
" Owners" means collectively TU Electric, Brazos, TMPA and Tex-La, as owners of Comanche Peak in accordance with the terms of the JOA, or singularly any of e
such parties.
l H.
"P:nding Litiption" msans Causa No. 399,482 - Brazos Electric Power C32'!ative. Inc. v. Texas Utilities Company, Texas Utilities Electrie Com,p_any_. Texas bties Mining Company, and Texas Utilities Sa vices Incorporated, - in the District court of Travis County, Texas, 345th Judicial District; Cause No. 399,336 -Tex-La M. etric Cooperative of Texas, Inc., and 'luas \\iunicipal Power Agency v. Texas Uttlities i
l a J Texas Utilities Electric Company. - in the District Court of T avts County, Texas, p
38th Judicial District; and Cause No. 36-6809-A - Texas Utilities Electric Company v.
I t,a Electric Cooperative of _ Texas, Inc., et al. - in the Distrtet Court of Dallas County, Texas,14th Judicial District.
l
" Project Manager" means TU Electric designated and acting as suen in accordance (or purportedly in accordance) with the terms of the JOA.
J.
" Site" means approximately 7,669 acres owned (in fee et other estate or I
interest) by the Owners, as tenants in common, and located in Hood and Somervell Counties, Texas.
K.
" Station" means the Site, all improvements thereon (including Squaw Creek Lake and Park) and all fixtures and attachments thereto, as well as (i) all personal property thereon and associated therewith or related thereto and owned by the Owners, and (ii) all rights (tangible or intangible), and all casements and other interests of any
)
nature associated therewith or related thereto and owned by the Owners e xcluding, however, the Fuel, and the Transmission Facilities.
L.
" Subject Claims" means any and all claims, setions, controversier, causes of action, disputes, demands, and complaints of whatsoever k nd or nature and whether known or unknown.
I M.
' Tex-La" means Tex-La F.lectric Cooperative of Teru, Inc.
N.
"TMPA" means Texas Munic! pal Power Agency.
O.
' Transmission Facilities" means the Comanche Peak - CeCordova i
345 kV electrical transmission line approximately 14.4 miles in length, and associated l
rights-of-way, equipment, fixtures and personal property.
3 l
~~
--..-- i M-K~
9 P.
"TUC" means Texas Utilities Company, which is a Texas corporation and the Parent of TU E:ectric.
Q.
"TU Electric" means Texas Utilities Electric Company, which is a Texas i
corpora tion.
j Covenant Not to Sue and Agreement Not to Challenge. Drazos, except as
)
)
provided in paragraph 111 herein, for itself and on behalf of any person or entity, private or I
governmmtal, claiming by, through, or under Drazos, including without limitation, to the I
extent it has the standing and right under law to do so, its Members and customers (including the customers of Brazos' Members and other wholesale customers) and its or their respective insurers, agents, servants, employees, officers, directors, consultants, attorneys, and representatives, does hereby covenant and agree:
I (a)
"Ihat it and they, individually, collectively, or in any combination, will forebear from asserting against, and never sue for or look for satisfaction with respect to, TU Electrie, TUC, and their respective insurers, agents, servants, I
employees,
- officers, directors, shareholders, consultants, attorneys, and J
representatives, past and present, and any and all of their respective successors, subsidiaries, and affiliates and their respective insurers, agen ts, servants, employees,
- officers, directors, shareholders, consultants, a t torneys, and i
representatives, past and present, with respect to any Subject Claims (including 1
without limitation any Subject Claim against any contractor, subcontractor, supplief, consultant, vendor or other person, firm or entity in privity in any manner 1
with any of them which may therefor or as a result thereof have a right over or hbject Claim in subtogation)in any manner inyolving, eoncerning, arising out of, or relating to, the design, construction, management, and licensing of, or any other
)'
matter relating to, Comanche Peak, and the management, procurement, conversion, enrichment, fabrication, shipping, transportatiott, and storage of the Fuel.
l 4
(e)
That neither it nor thsy, individually, collectively, or in any combination, wdl directly or indirectly chauenge, contest, or assert any complaint in any court or eefore any administrative agency x body or in any other forum whatsoever with respect to, or in any manner involving, concerning, arising out of, or relating to, l
Conianche Peak and the incidents and attributes thereof including, witnout limitation: (1) the design, construction, management, and licensing of Comanene Peak or any other aspect thereof, (2) the costs and schedule of construction and completion of Comanche Peak, (3) the reasonableness, prudency, or efficiency of the planning, design, constr"ction, management, and licensing of Comanche Peak, (4) the reasonableness, prudency, or efficiency of the management, procurement, t
conversion, enrichment, fabrication, shipping, transportation, and storage of the Fuel, (5) the costs incurred in connection with the management, procurement, conversion, enrichment, fabrication, shipping, transportation, and storage of the Fuel, (6) the breach of the JOA and any express or implied warrantles arising out of the JOA, (7) any representation, misrepresentation, disclosure, or non-disclosure in connection with the negotiations, or preceding the execution by Brazos of the JOA,
.i (8) in connection with the performance or nonperformance by TU Electric of its duties, responsibilities or obligattor.s under the JOA as Project Manager or i
otherwise, (9) the failure of TU Electric to pursue any remedies, either at law or otherwise, that may be, or may have been, available against any and all contractors, subcontractors, stppliers, consultants, vendors, or others with respect to Comanche Peak (including separately the Station, Fuel or Tratuimission Pacilities), and (10) on l
account of anything that has occurred or may have occurred, in whole or in part with respect to Comanche Peak (including separately the Station, Puel or 3
Transmission Facilities) and the incidents and attributes,thereof, and any of the foregoing whether known or unknown.
i
gJ, Exemptions to Coverent Not to Su1 rnd Agreement Not to Challenge. Brazos jetticaDy does not covenant not to sue, and specifically does not agree to not assert, en311enge or contest, with regard to:
(a)
Any Subject Claims arising out of or under the Agreement or any of tne l
other agreements or instruments delivered pursuant to the Agreement.
(c)
Any Subject Claims which could not have been brought in the Pending Latigation and which accrue on or after the Date of Commercial Operation (as that I
term is defined in the JOA) and which are based upon the acts or omissions of TU Electric or the Project Manager other than acts or omissions in connection with i
the planning, design or construction (or the management thereof) of Comanene i
Peak.
(c)
Any defenses which Brazos has or may have to Subject Claims asserted i
against Brazos by any persons or parties whomsoever, provided that Brazos may not seek any tyoe of affirmative relief hereunder against TU Electric, TUC, or both, their successors, subsidiaries and affiliates, or its or their respective insurers, agents, servants, employees, officers, directors, shareholders, consultants, attorneys and representatives.
(d)
Any counterclaims which Brazos has or may have against any party otor tnan TU Electric, TUC, or both, their successors, subsidiaries and affiliates, or its or j
their respective insurers, agents, servants, employees, officers, directors, shareholders, consultants, attorneys and representatives, acting in such capacity, with respect to any Subject Claims being asserted against Brazos by anyone other 1
than TU Electric, TUC, or both, their successors, subsidiaries and affiliates, or its or h
their respective insurers, agents, servants, employees, officers, directors,
)
snareholders, consultants, attorneys and representatives.
t n
l 1
(e)
Any proending in r!hich 10 El:ctric's rates Ue being determined, provided that Brazos shall not oppose, or assist any *ttird party opposittor4 to, the inclusion in TU Electric's rates of any and all costs related to Comanche Peak.
ry.
Control. To the extent any provision of this Covenant Not to Sue conflicts ith any provision in Section 9.2 of the Agreement, this Covenant Not to Sue shall control as to the agreement of the parties.
EXECUTED this the day of
,1988, as duly authorized g
g, an appropriate resolution of its Board of Directors.
i f
{
BRAZOS ELECTRIC POWER COOPE R ATIV E, IN C.
I I
f (Corporate Seal)
By:
7 EST:
Its:
I By:
Its:
i s
l 1
\\
1 f
T-
EXHIBfT L RELEASE STATE OF TEX AS j
COcNTY Of DAMAS S
for and in consideration of the agreements, undertakings, promises, and covenants of Brazos, inclui *tg without Umitation the contemporaneous deuvery to TU Electric by Drazo5 of (1) a ' olease releasing certain claims which Brazos and any other person or l
l entity, privat sr.;overnme.tal, claiming by, through, or under Brazos, including, to the extent it has the standing and right under law to do so, Brazos' Members and customers (and the customer; of Urazos' Members and other wholesale customers), have or may have against TU Electric, TUC, or their subsidiaries and affiuntes, (2) a Covenant Not To Sue under which Brazos, for itself and on behalf of any person or entity, private or governmental, claiming by, through or under Drazos, including, to the extent it has the standing and right under law to do so, Brazos' Members and customers (and the customers of Brazos' Members and other wholesale customers), covenants not to sue upon certa:n claims which they have or may have against TU Electric, TUC, or their subsidiaries and affiUates, and (3) an Indemnity Agreement under which Bresos indemnifies TU Electric against certain claims, the adequacy and sufficiency of such consideration being hereby acknowledged and confessed, TU Dectric hereby ag*ees to the following:
L Definitions. As used herein, the following terms have the following meanings:
A.
" Agreement" means that certain Agreement dated July 5,1988, by and l
between Drazos and TU Electric.
B.
'Brazos" means Brazos Electric Power Cooperative, Inc.
C.
" Comanche Peak" means the nuclear-fueled electric generating facility under construction on certain lands situated in Hood and Somesvell Counties, Texas, and consisting of two units having a nominal capacity of 1,150 megawatts each, and related -
perties, and is the eggregate and combination of tho Stction Fu:1, and Transmission g,etlities, and su other rights and interests associated with or relating thereto.
D.
" Fuel" means the Comanche Peak nuclear fuel, irrespective of chemical got physical form, and the rights and interests related thereto.
E.
"JOA" means that certain instrument entitled on the cover page thereof
..yo[NT OWNERSHIP AGREEMENT BETWEEN DALLAS POWER & LIGHT COMPANY, I
7gxAS ELECTRIC SERV E COMPANY, TEXAS POWER & LIGHT COMPANY, TEXAS UTILITIES GEN E R ATING COMP AN Y, TEXAS M U NICIP A L POWER AGENCY AND l
gaAZOS ELECTRIC POWER COOPERATIVE, INC. FOR COMANCHE PEAK L : 2AM ELECTRIC STATION " executed on January 2,1979, together with and as modified by l
tnat certain instrument entitled on the cover page thereof " Modification of Joint Ownership Agreement Between Dallas Power & Light Company, Texas Electric Service company, Texas Power & Light company, Texas Utdities Generating Company, Texas
'tunicipal Power Agency and Brazos Electric Power Cooperative, Inc.: For Comanche Peak Steam Electric Station," executed on June 1,1979, tog' with and as amended by (i) the Amendment of Joint Ownership Agreement, execute ' on December 9,
- 1980, I
detween Dallas Power & Light Company, Texas Electric Service Company, Texas Power &
I Light Company, Texas Utilities Generating Company, TMPA, Brazos, and Tex-L6, together with and as amended by (ll) the Second Amendment of Joint Ownership Agreement, executed on Februarj 12, 1982, between Dallas Power & Light Company,
}
Texas Electric Service Compviy, Texas Power & Light Company, Texas Utilities Generating Company, TMP A, Brazos, and Tax-La.
1 P.
" Members" nisans the twenty (20) Texas non profit electrie cooperative corporations that are members of Brazos, u set out in Exhibit C to the Agreement.
G.
" Owners" means collectively TU Electric, Brazos, TMPA and Tex-La, as owners of Comanche Peak in accordance with the terms of the JOA, or singularly any of 4
such parties. -
H.
" Project Manager" rnocats TU Electric designeted and acting as suen in
,ecordance (or purportedly in accordance) witt ;.1e terms of the JOA.
I
" Site" means approximately 7,669 acret owneo (in fee or other estate or interest) Dy the Owners, as tenants in common, and located in Hood and Somervell Counties, Tuas.
]
J.
" Station" means the Site, all improvements thereon (including Squaw I'
Creek Lake and Park) and all fixtures and attachments thereto, as well as (i) all personal property thereon and associated therewith or related thereto and owned by the Owners, and (ii) all rights (tangible or intangible), and all easements and other interests of any I
nature associated therewith or related thereto and owned by the Owners, excluding, l
bowever, the Fuel, and the Transmission Facilities.
K.
" Subject Claims" means any and all clair-s, actions, controversies, causes of action, disputes, demands, and complaints of whatsoever kind or natu'e and whether known or unknown.
L.
" Tex-La" means Tex-La Electric Cooperative of Texas, Inc.
M.
'TMPA" means Texas Munleipal Power Agency.
1 8
N.
" Transmission Pacilities" means the Comanche Peak - DeCordova I
345 kV electrical transmission line approximately 14.4 miles in length, and associated i
rights-of-way, equipment, fixtures and personal property.
O.
"TUC" means Texas Utilities Company, which is a Texas corporation and the parent of TU Electric.
P.
'TU Electric" means Texas Utilities Electric Company, which is a Texas corporation.
i
)
II.
Release. TU Electric, except as set out in paragraph III herein, on behalf of itself, TUC, their subaldlaries and affiliates, and on behalf of thy. person or endty, private or governmental, claiming by, through or tmder TU Electric ce TUC, beluding without
<l limitation, to the extent it has the standing and right under law to do so, their customers,.
_~
~ :=.-:
= _. --
and on behalf of their respective insurers, agents, servants, irmployees, officers, directors, consultants, a t torneys, and representatives, does hereby waive, release, discharge, renounce, and relinquish any and all Subject Claims relating to Comanche Peak which it or r,ey have, or may have, whether known or unknown, contingent or absolute, including without limitation those based s.7 common law, whett
- ontract (expressed or 1
.npbed, including express or implied wartaaty) or tort (including, without limitation, k
intentional tort, negligence or grou negligence, sole, joint, or concurrent) or strict i
goility or fraud, and those based upon any Federal, Statt leeal statute, law, orcer or w
.egulation, including, without Jmitation, the Atomic Eni t of 1954, as amended, the g
regulations of the United States Nuclear Replatory Cornmission, the Securities Act of 1933, as amended, or the Securities Act of 1934, as amended, and any rule or regulation I
under either, the Texas Securities Act (Title 19, Articles 581-1, et seq., V. A.T.S.) and the 1
l Texas Deceptive Trade Practices and Consumer Protection Act, against Brazos, its l
Members and customers (including the customers of Brazos' Members and other wholesale eusto mers), whether individually or otherwise, and their respective insurers, agents, I
l servants, employees, officers, directors, consultants, attorneys and representatives, past i
l i
and present, and any and all of their respective successors, subsidiaries, a..
affiliates, and their respective insurers, agents, servants, employees, officers, directors, members, consu,';uts, attorneys, and representatives, past and present.
l III.
F egtjons to Release. TU Electric specifically does not release with regard to:
l (a)
Any Subbet Claltns etiring out of or under the Agreement or any othe*
h agreement or in:'rument executed and deUvered pursuant to the.Veement.
(b)
Any right or authority to charge Brazos, its Members and customers for I
any electric power and energy purchased by any of them from TU Electric in i
I acccedance with the rates i forth in TU Elsetric's tariff as same may be approved i
'~
1 and in effect from time to time even though said rates may include costs related to Comanche Peak.
(c)
Any defenses which TU Electric has or may have to Subject Claims asserted against TU Electric by any persons or parties whomsoever, provided that TU Ele:tric may not seek any type of affirmative relief hereunder (other than rate
-I relief pursuant to the provtsions of the Public Utility Regulatory Act, Article 1446c, V.A.T.S.) against Brazos, its Members and customersdinetuding the customers of l
Brazos' Members and other wholesale customers), their respective. insurers, agents, l
employees, officers, dirutors, consultants, attorneys and representatives.
(d' Any counterclaims which TU Electric has or may have against any party l
other tnan Bre os, its Members and customers (including the customers of Brazos' Members and other wholesale customers), their respective insurers, agents, employees, officers, directors, consultants, attorneys and representatives, acting in such capacity (other than in connection with rate relief pursuant to the provisions of the Public Utility Regulatory Act, Article 1446c, V.A.T.S.) with respect to any Subject Claims being asserted against TU Electric by anyone other than Brazos, its M abers and customers (including the customers of Brazos' Members and other wholesale customers), individually or otherwise, their respective insurers, agents, employees, officers, directors, consultants, attorneys and representatives.
i IV.
Coverutnt. TU Electric hereby covenants and warrants that n has not assigned I
any Subject Claims that are hereby released.
l V.
Control.
To the extent any provision of this Release conflicts with any j
provision in Section 9.3 of the Agreement, this Release shall control as to the agreement l
j of the parties.
1 i
EXECUTED this the day of
,1988, as duly authorized 1
by an appropriate resolution of its Board of Directors.
1
.,_.m
...,, y,7 TEXAS UTILITIES ELECTRIC COMPANY i
seal)
By:
(C # F "
tu:
i i
gn.st:
I l
By: -
i lUI -
I I
i l
l i
l i
I I
1
__.__--mm,---
-~~
^
=. _ - -
. t EXHIBIT M COVEN ANT NOT TO SUE i
STATE OF TEX AS S
5 COUNTY OF DALLAS S
l
}
For and in consideration of the agreements, undertakings, promises, and covenants l
of Brazos, including without limitation the contemporaneous delivery to TU Electric by Brazes of (1) a Release releasing certain claims which Brazos and any other person or s
l entity, private or governmental, claiming by, through, or under Brazos, including, to the extent it has the standing and rignt under law to do so, Brazos' Members and customers (and the customers of Brazos' Members and other wholesale customers), have or may have against TU Electric, TUC, or their subsidiaries and affiliates, (0) a Covenant Not To Sue under which Brazos, for itself and on behalf of any person or entity, private or governmental, claiming by, through or under Brazos, including, to the extent it has the standing and right under law to do so, Brazos' Members and customers (and the customers of Brazos' Members and other wholesale customers), covenants not to sue upon certain g
claims which they have or may have against TU Electric, TUC, or their subsidiaries and affiliates, and (3) an Indemnity Agreement Lnder which Brazos indemnifies TU Electric against certain claims, the adequacy and suffielency of such consideration being hereby acknowledged and confessed, TU Electric hereby agrees to the following:
1 L
Definitions. As used herein, the following terms have the following meanings:
A.
" Agreement" means that certain Agt eement dated July 5,1988, by and between Brazos and TU Electric.
l B.
"Brazos" means Brazos Electric Power Cooperative, Inc.
C.
" Comanche Peak" means the nuclear-fueled electric generating fac lity-under constructior to certain lands situated in Hood and Somervell Counties, Texr',.1 consisting of two units having a nominal capacity of 1,150 megawatts each, and wluie,
operties, and is the aggregato and combination of the Station, Puel, and Transmtssion peilities, and all other rights and interests associated with or relating thereto.
D.
" Fuel" means the Comanche Peak nuclear fuel, irrespective of chemical and/or physical form, and the rights and interests related thereto.
E.
"JOA" means that certain instrument entitled on the cover page thereof
" JOINT OWNERSHIP AGREEMENT BETWEEN DALLAS POWEP. & LIGHT COMPANY, TEXAS ELECTRIC SERVICE COMPANY, TEXAS POWER & LIGHT COMPANY, TEXAS L'TILITIES GENERATING COMPAN Y, TEXAS MUNICIPAL POWER AGENCY AND SgAZOS ELECTRIC POWER COOPERATIVE, INC. FOR COMANCHE PEAK STEAM i
gLECTRIC STATION," executed on January 2.1979, together with and as modified by j
that certain instrument entitled on the cover page thereof " Modification of Joint Ownership Agreement Between Dallas Power & Li ht Company, Texas Electric Service I
I l
Company, Texas Power & Light Company, Texas Utilities Generating Company, Texas Municipal Power Agency and Brazos Electric Power Cooperative, Inc.: For Comanche peak Steam Electric Station," executed on June 1,1979, together with and as amended by (i) the Amendment of Joint Ownership Agreement, executed on December 9, 1980, between Dallas Power & Light Company, Texas Electric Service Company, Texas Power &
Light Company, Texas Utilities Generating Company, TMPA, Btc.zos, and Tex-La, together with and as amended by (ii) the Second Amendment of Joint Ownership Agreement, eyeeuted on February 12, 1982, between Dallas Power & Light Company, Texas Electrie Service Company, Texas Power & Light Company, Texas Utilities Generating Company, TMPA, Brazos, and Tex-La.
F.
" Members
- means the twenty (20) Texas non-yofit electric cooperative I
corporations that are members of Brazos, as set out in Exhib!t C to the Agreement.
G.
" Owners" means collectively TU Electric, Brazos, TMPA and Tex-La, as owners of Comanche Peak in accordance with the terms of the JOA, or singularly any of such parties.
l l l
l
. = _:
H.
" Project Manager" means TU Electrie designated and acting as such in cordance (or purportedly in accordance) with the terms of the JOA.
" Site" means approximately ",669 acres owned (in fee or other estate or interest) by the Owners, as tenants in common, and located in Hood and Somervell
.(
Counties. Texas.
J J.
" Station" means the Site, all improvements thereon (including Squaw l
Creek Lake and Park) and all fixtures and atta'chments thereto, as well as (i) all personal property thereon and associated therewith or related thereto and owned by the Owners, and (ii) all rights (tangible or intangible), and all easements and other interests of any nature associated therewith or related thereto and owned by the Owners, excluding, l
however, the Fuel, and the Transmission Facilities, i
K.
" Subject Claims" means any and all claims, actions, controversies, causes of action, disputes, demands, and complaints of whatsoever kind or nature and whether known or unknown.
L.
" Tex-La" means Tex-La Electric Cooperative of Texas, Inc.
M.
"TMP A" means Texas Municipal Power Agency.
N.
" Transmission Facilities" means the Comanche Peak DeCordova 345 kV electrical transmission line approximately 14.4 miles in length, and associated rights-of-way, equipment, fixtures and personal property.
O.
"TUC" means Texas Utilities Company, which is a Texas corporation and the parent of TU Electrie.
P.
"TU Electrie" means Texas Utilities Electric Company, which is a Texas corpara tion.
II.
Covenant Not to Sue and Agreement Not to Challenge. TU Electrie, except as W.ovided in paragraph III hereof, for itself and on behalf of TUC and their subsidiaries and affiliates and any person or entity, private or governmental, claiming by, through or under TU Electric or TUC, including without limitation, to the extent it has the standing and -
Hght under law to do So, tht~ir customers, and their respective insurers, agents, servants, employees, officers, directors, consultants, attorneys and representatives, does hereby covennnt and agrees i
(a)
That it and they, individually, collectively, or in any combination, will 1
forebear from asserting against, and never sue for or look for satisfaction with I
respect to, Brazos, its Members, and their respective insurers, agents, servants, employees, o fficers, directors, m e mbers, consultan ts, a t torneys, and I
representatives, past and present, and any and all of their respective successors, i
l I
subsidiaries, and a ffiliates and their respective insurers, agents, servan ts, employees, officers, directors, shareholders, members, consultants, attorneys, and representatives, past and present, with respect to any Subject Claims (including i
without limitation any Subject Claim against any contractor, subcontractor, supplier, consultant, vendor or other person, firm or entity in privity in any manner with any of them which may therefor or as a result thereof have a right over or Subject Claim in subrogation) in any manner involving, concerning, arising out of, or relating to, the design, construction, management, *.nd licensing of, or any other matter relating to, Comanche Peak, and the management, procurement, conversion, enrichment, fabrication, shipping, transportation, and storage of the Fuel.
(b)
That neither it '1or they, individually, collectively, or in any combination, will directly or indirectly challenge, contest or assert any complaint against Brazos or its Members in any court or before any administrative agency or body or in any other forum whatsoever with respect to, or in any manner involving, concerning, arising out of, or relating to, Comanche Peak and the JOA and in connection with the performance or nonperformance by Brar.os of its duties, responsibilities or i
obligations under the JOA, and on account of anything that has occurred or may have occurred, in whole or in part, with respect to Comanche Peak (including 4-
y4 separately the Station, Fuel or Transmission Facilities) and the incidents and attributes thereof, and any of the foregoing whether known or unknown.
gl, Exceptions to Covenant Not to Sue and Acreement Not to Challence.
I TU Electric specifically does not covenant not to sue, and specif!cally does not not assert, challenge or contest, with regard to:
(a)
Any Subject Claims arising out of or under the Agreement or any ot agreement or instrument executed and delivered pursuant to the Agreement.
I (b)
Any right or authority to charge Brazos, its Members and customers any electrie power and energy purchased by any of them from TU Electr accordance with the rates set forth in TU Electric's tariff as same ma l
and in effect from time to time even though said rates may include co Comanche Peak.
i
)
(c)
Any defenses which TU Electric has or may have to Subject Claim asserted against TU Electric by any persons or parties whomsoever pro TU Electric may not seek any type of affirmative relief hereunder (other th an rate relief pursuant to the provisions of the Public Utility Regulatory Act, A 1
I V. A.T.S.) against Brazos, its Members and customers (including th e customers of Brazos' Members and other wholesale customers), their respective insure i
, agents.
employees, officers, directors, consultants, attorneys and representatives.
(d)
Any counterclaims which TU Electric has or may have against a other than Brazos, its Members and customers (including the customers M embers and other wholesale custom ers), their respective insur employees, officers, directors, consultants, attorneys and represent such capacity (other than in connection with rate relief pursuant to the p o
the Public Utility Regulatory Act, Article 1446e, V. A.T S ) with respe t t
{
c o any Subject Claims being asserted against TU Electric by anyone other t
, s Members and customers (including the customers of Brazos' Members L
i
wholesale customers), individually or otherwise, their respective insurers, agents, employees, officers, directors, consultants, attorneys and representatives.
IV.
Control To the extent any provision of this Covenant Not to Sue conflicts with any provision in Section 9.4 of the Agreement, this Covenant Not to Sue shall control as to the agreement of the parties.
EXECUTED this the day of
.1988, as duly authorized by an i
appropriate resolution of its Board of Directors.
l TEX AS UTILITIES ELECTRIC COMP ANY I
i 8
(Corporate Seal)
By:
t Its:
}
ATTEST:
By:
.ts:
l l
i...
-c-EX111 BIT N ASSUMPTION AND INDEMNITY AGREEMENT STATE OF TEX AS S
S i
COUNTY OF DAILAS S
For and in consideration of the agreements, undertakings, promises, and covenants cf Brar.os as set forth in the. Agre em en t, including without limitation the contempoianeous delivery to TU Electric by Brazos of (1) a Release releasing certain claims which Brazos and any other person or entity, private or governmental, claiming by, i
through, or under Brazos, including, to the extent it has the standing and right under law to do so, Brazos' Members and customers 'and the customers of Brazos' Members and other wholesale customers), have or may have against TU Electric, TUC and their subsidiaries and affiliates, (2) a Covenant Not To Sue under which Brazos, for itself and on behalf of any person or entity, private or governmental, claiming by, through or under Brazos, including, to the extent it has the standing and right under law to do so, Brazos' Members and customers (and the customers of Brazos' Members and other wholesale customers), covenants not to sue upon certain claims which they have or may have against TU Electric, TUC and their subsidiaries and affiliates, and (3) an indemnity Agreement l
under which Brazos indemnifies TU Doctric against certain claims, the adequacy and sufficiency of such consideration being hereby acknowledged and confessed, TU Electric hereby agrees to the following:
L Definitions. As used herein, the following terms have the following meanings:
}
A.
" Agreement" means that certAin Agreement dated July 5,1988, by and I
between Brazos and TU Electric.
B.
"Brazos" means Brazos Electric Power Cooperative, Inc.
C.
" Comanche Peak" means the nuclear-fueled electric generating facility under construction on certain lands situated in Hood and Somervell Counties, Texas, and consisting of two un!ts naving a ncminal capacity of 1,150 megawatts each, and related l
l l ;
I
l properties, and is the aggregate and combination of the Station, Puel, and Transmission 1
pseilities, and all other rights and interests associated with or relating thereto.
D.
" Fuel" means the Comanche Peak nuclear fuel, irrespective of chemical and/or physical form, and the rights and interests related thereto.
E.
"JOA" means that certain instrument, entitled on the cover page thereof
,,yoINT OWNERSHIP AGREEMENT BETWEEN DALLAS POWER & LIGHT COMPANY, rSXAS ELECTRIC SERVICE COMPANY. TEXAS POWER & LIGHT COMPANY, TEXAS UTILITIES GENERATINO COMPANY, TEXAS MUNICIPAL POWER AGENCY AND BRAZOS ELECTRIC POWER COOPERATIVE, INC. FOR COMANCHE PEAK STEAM ELECTRIC STATION," executed on January 2,1979, together with and as modified by l
that certain instrument entitled on the cover page thereof " Modification of Joint Ownership Agreement Between Dallas Power & Light Company, Texas Electric Service 1
l Company, Texas Power & Light Company, Texas Utilities Generating Company, Texas Municipal Power Agency and Brazos Electric Power Cooperative, Inc.: For Comanche Peak Steam Electric Station," executed on June 1,1979, together with and as amended by j
(i) the Amendment of Joint Ownership Agreement, executed on December 9,
b Light Company, Texas Utilities Generating Company, TMPA, Brazos, and Tex-La, together with and as amended by (ii) the Second Amendment of Joint Ownership Agreement, executed on February 12, 1982, between Dallas Power & Light Company, l
l Texas Electric Service Company, Texas Power & Light Company, Texas Utilities Generating Company, TMPA, Brazos, and Tex-La.
P.
" Members" means the twenty (20) Texas non-profit electric cooperative corporations that are members of Brazos, as set out in Exhibit C to the Agreement.
G.
" Owners" means collectively TU Electric Br zos TMPA and Tex-La, as a
owners of Comanche Peak in accordance with the terms of the JOA, or singularly any of such parties. 4 m
H.
"Pending Litigation" means Cause No. 399,482 - Brazos Electric Power perative, Inc. v. Texas Utilities Company, Texas Utilities Electric Company, Texas gies Mining Company, and Texas Utilities Services Incorporated, - in the District Court of Travis County, Texas, 345th Judicial District; Cause No. 399,336 -Tex-La ytric Cooperative of Texas, Inc., and Texas Municipal Power Agency v. Texas Utilities E
and Texas Utilities Electric Company, - in the District Court of Travis County, Texas, i
ggtn Judicial District; and Cause No. 86-6809-A -- Texas Utilities Electric Company v.
Tex-La Electric Cooperative of Texas, Inc., et al. - in the District Court of Dallas t
County, Texas,14th Judicial District.
1.
" Project Manager" means TU Electric designated and acting as such in accordance (or purportedly in accordance) with the terms of the JOA.
l J.
" Site" means approximately 7,669 acres owned (in fee or other estate or interest) by the Owners, as tenants in common, and located in Hood and Somervell Counties, Texas.
K.
" Station" means the Site, all improvements thereon (including Squaw Creek Lake and Park) and all fixtures and attachments thereto, as well as (i) all personal property thereon and associated therewith or related thereto and owned by the Owners, and (ii) ell rights (tang'ble or intangible), and all easements and other interests of any nature associated therewith or related thereto and owned by the Owners, excluding, however, the Fuel, and the Transmisalon Paellities.
L.
"Sub}ect Claims" means any and all claims, actions, controversies, causes of action, disputes, demands, and complaints of whatsoever kind or nature and whether known or unknown.
M.
" Tex-La" means Tex-La Electric Cooperative of Texas, Inc.
N.
"rMPA" means Texas Munleipal Power Agency...
O.
" Transmission Facilities" means the Comanche Peak - DeCordova 345 ky electrical transmission line approximately 14.4 miles in length, and associated ghts.of-way, equipment, fixtures and personal property.
P.
"TUC" means Texas Utilities Company, which is a Texas corporation and tne parent of TU Electric.
Q.
"TU Electric" means Texas Utilities Electric Company, which is a Texas t
corporation.
g.
Assumption of Liabilities. TU Electric assumes all the duties, responsibilities, liabilities, and obligations of "razos under the JOA and under the Atomic Energy Act of 1954, as amended, and the rules and regulations of the Nuclear Regulatory Commission thereunder pertairaing to Comanche Peak.
(
ID.
Indemidfication. TU Electric further agrees to indemnify, hold harmless, and I
defend Brazos and its.vlembers and customers (including the customers of Brazos' l
Mem::,c-s and other wholesale customers) from and against any and all liability, loss, cost, l
damage, or expense (including without limitation reasonable attorneys' fees, court costs, ensts of appea.1, supersedeas tends, and costs of investigating, defending, attempting to settle, and, if TU Electric approves the settlement, settling any claim, demand, or cause
(
of action) arising out of the following:
1 (a) all Subject Claims (INCLUDING WITHOUT LIMITATION SUBJECT l
CLAIMS PREDICATED UPON THE ALLEGED ACTUAL OR IMPUTED NEGLIGENCE, GROfl8 NEGLIGENCE OR STRICT LIABILITY OF BRAZOS AND ITS l
MEMBERS) arising out of or connected with the location, planning, design, construction, licensing, condition, maintenance, operation, and decommissioning of Comanche Peak, including without limitation all claims asserted or which might l
have been or might hereafter be asserted in Cause No. 83-29889 in District Court of Harris County, Texas, 215th Judicial District, removed in April,1988, to the United States District Court for the Southern District of Texas, Houston Division, l _
~
numbered Civil Action No. H-68-140 9, and styled Charles A. Atchisc.', et al v.
Brown & floot. Inc., et al., and in Cause No. 2692 in the District Court of Somervell County, Texas, 18th Judicial District, and styled Clementine Mathews and her husband Dolphin Mathews v. Comanche Peak Electric Steam Station, et al.
(c) all Subject Claims aching out of any alleged act (including willful or intentional acts) of the said Project Manager, its predecessors, agents, servants, employees or independen". contractors acting for or on behalf of the Project Manager or its predecessors.
[V.
Exceptions to Indemnification.
Without limitation, TU Electric specifically does not agree to indemnify Brazos, its Members or customers in connection with the following:
\\
(e)
Any Jubject Claims which may be asserted by Brazos' Members, customers, the customers of Brazos' Members or other wholesale customers, or creditors, acting in such capacity, which relate to Brazos' decision to participate as an Owner of Comanche Peak, or which relate to Brazos' decision to become a party to the JOA, or which relate to Brazos' involvement in the Pending Litigation, or which relate to Brazos' execution of the Agreement and participation in the transactions provided for in the Agreement.
(b)
Any Subject Claims which may be asserted by Tex-la, (MPA, or others l
(except TU Electrie, TUC, and their affiliates, subsidiaries, successors and assigns, and except for their insurers, agents, servants, employees, officers, directors, shareholders, consultanta, attorneys, and representatives, past and peesent, acting in such capeelties) which relate to Brazos' decision to become a party to the JOA, or which arise by reason of &azos' participation in the Pending uttgation, or which arise by reason of Bramos' azecution of the Agreement and participation in the transactions provided for in the Agreement.
5-e
4 (c)
Any liability, cost or expense pursuant to TU Doctric's rates set fortn in 79 glectric's tariff as same may be approved and in Ufect from time to time, even i
though said rates may include costs related to Comanche Peak, for electric power and energy purchased by Brazos, its Members and customers from TU Electrie.
(d)
Any Subject Claims relating to Brazos' performance under the Agreement or any other agreement or instrument executed or delivered pursuant to the Agreement.
V.
Assumption of Defense.
TU Electric will, in addition to providing the foregoing indemnity, assume the defense of Brazos and its Members and customers (including the customers of Brazos' Members and other wholesale customers) in any tribunal where any claim set out in paragrapn G, and not excepted in paragraph IV, is asserted.
Provid<rJ, however, that, in the event Brazcs or any of its Members or customers (including the customers of Brazos' Members or other wholesale customers) receive notice of the commencement of any action oc proceeding or the a3sertion of any j
i claim with respect to which any of them may be entitled to indemnification hereunder or under the Agreement, the party receiving such notice shall give TU Electric written notice within ten (10) calendar days of such notice (the failure to so notify will not relieve TU Electric of its obligations hereunder except to the extent it has been prejudiced by a i
failure to so notify) and shall give TU Electric the opportunity to participate in the defense and in any settlerr. tnt negotiations with respect thereto, and will cooperate with t
TU Electric in all reasonsble respects and make available to TU Electric all records, j
evidence and personnel fer consultation and testimony reasonably requested by i
TU Electric la connection therewith. The settlement of any such action, proceeding or i
claim without the prior written approval of TU Electrie shall relieve TU Electric of s.ny obligations to the indemnified party in respect of the subject matter of the settlement of l
such action, proceeding,.t claim.
l VI.
Control.
To the extent any provision of this Assumption and Indemnity 3peement conflicts with any provision in Section 9.5 of the Agreement, this Assumption
.nd indemnity Agreement shall control as to the ag eement'of the parties.
i EXECUTED this the day of
,1988, as duly authorized cy an appropriate resolution of its Beard of Directors.
TEXAS UTILITIES ELECTRIC COMPANY (Corporate Seal)
By:
ATTEST:
Its:
i By:
Its:
1
/
i I 1 l
no numbered Civil Action No.
H-6 8 -14 0 9, and styled Charles A. Atchison, et al v.
Brown & Root, Inc., et al., and in Cause No. 2692 in the District Court of Somervell County, Texas, 18th Judicial District, and styled Clementine Mathews and her husband Dolphin Mathews v. Comanche Peek Electric Steam Station, et al.
i (b) all Subject Claims arising out of any alleged act (including willful or l
intentional acts) of the said Project Manager, its predecessors, agents, servants, employees or independent contractors acting for or on behalf of the Projec t Manager or its predecessors.
- V.
Exceptions to Indemnification.
Without limitation, TU Electric specifically does not agree to indemnify &azos, its Members or customers in connection with the fcilowing:
+
s (a)
Any Subject Claims which may be asserted by &azos' Me mbers, customers, the customers of &azos' Members or other wholesale customers, or creditors, acting in such capacity, which relate to &azos' decision to participate as i
an Owner of Comanche Peak, or which relate to &azos' decision to become a party to the JOA, or which relate to &azos' involvement in the Pending Litigation, or which relate to &azos' execution of the Agreement and participation in the transactions proviN for in the Agreement.
(b)
Any Subject Claims which may be asserted by Tet-La, TMPA, or others (except TU Doctric, TUC, and their affiliates, subsidiaries, successors and assigns, and except for their insurers, agents, servants, employees, officers, directors, shareholders, consultanta, attorneys, and representatives, past ard present, acting in such capacities) which rotate to &azos' decision to become a party to the JOA, or l
which arise by reason of &azos' participation in the Pending Iltigation, or which arise by reason of &azos' execution of the Agreement and participation in the transactions provided for in the Agreement.
1 I,
(e)
Any liability, cost or expense pursuant to TU Electric's rates set fortn in TU Electric's tariff as same may be approved and in effect from time to time, even f
tnough said rates may include costs related to Comanche Peak, for electric power and energy purchased by Brazos, its Members and customers from TU Electric.
(d)
Any Subject Claims relating to Brazos' performance under the Agreement or any other agreement or instrument executed or delivered pursuant to the Agreement.
V.
Assumption of Defense.
TU Electric wiU, in addition to providing the foregoing indemnity, assume the defense of Brazos and its Members and customers (including the customers of r*azos' Members and other wholesale customers) in any tribung where any claim set out in paragrapn III, and not excepted in paragraph IV, is ssserted.
Provided, however, that, in the event Brazos or any of its Members or customers (including the customers of Brazos' Members er other wholesale customers) receive notice of the commencement of any action ce proceeding or the assertion of any i
claim with respect to which any of them may be entitled to indemnification hereunder or under the Agreement, the party receiving such notice shall give TU Electric written notice within ten (10) calendar days of such notice (the failure to so notify will not relieve TU Electric of its obilgations hereunder except to the extent it has been prejudiced by a i
fatlure to so notify) and shall give TU Electric the opportunity to participate in the i
defense and in any settlement negotiations with respect thereto, and will cooperate with TU Electric in all reasonth respects and make available to TU Electric all recards, evidence and personnel for corsultation and testimony reasonably requested by TU Electric in connection therewith. The settlement of any such action, proceeding or i
I claim without the prior writtea appenval of TU Electric shall rouevo TU Electric of any obugatiens to the indemnified party in respect of thi subject matter of the settlement of such action, proceeding, or claim..
yg, Control.
To the extent any provision of this Assumption and Indemnity Agreement conflicts with any provision in Section 9.5 of the Agreement, this Assumption and Indemnity Agreement shall control as to the agreement of the parties.
EXECUTED this the day of
,1988, as duly authorized oy an approp ute resolution of its Board of Directors.
)
TEXAS UTILITIES ELECTRIC COMPANY (Corporate Seal)
By:
ATTEST:
Its:
I i
By:
l Its:
l l
1 1
1
...--v --.-
-. ~.
.....~..._,_. _..___._..._-___ _ _ _____ _ _ _ _
..,n-EXHIBIT O INDEMNITY AGREEMENT STATE OF TEX AS S
COUNTY OF MC LENNAN S For and in consideration of the agreements, undertakings, promises, and covenants of TU Electric, TUC and their subsidiaries, and affiliates, set forth in the Agreement, including without Limitation the (1) contemporaneous delivery to Brazos by TU Electric of a Release releasing certain claims which TU Electric, TUC, and their subsidiaries and affiuates have or may have against Brazos, (2) a Covenant Not to Sue under which TU Electric, for itself and on behalf of TUC, and their subsidiaries and affiliates and on behalf of any person or entity, private or governmental, claiming by, through or under i
TU Dectric or TUC, covenants not to sue upon certain claims which they may have I
against Brazos or its Members, (3) the contemporaneous delivery to Brazos by TU Electric i
of an Assumption and Indemnity Agreement under which TU Dectric assumes certain duties, responsibilities, liabilities, and obligations of Brazos and agrees to indemnify Brazos against certain claims and (4) the payment by TU Dectric to Brazos of the Signing l
Payment and the Closing Payment (as those terms are defined in the Agreement), the adequacy and sufficiency of such consideration being hereby acknowledged and confessed, j
Brazos hereby agrees to the following:
4 l
L Definitiona. As used herein, the following teams have the following meanings:
A.
" Agreement" means that certain Agreement date.e settlement, settling any claim, demand or cause of action) arising out of Subject Claims cf Brazos, or anyone related to or affiliated with Brazos, including Brazos' Members and, to the extent they are acting in such capacity, j
Brazos' customers (including the customers of Brazoe' Members and other wholesale f
.f.
- L
- ~
I i
customers) and creditors, with respect to, or in any menner involving, concerning, arising out of, or relating to (1) the acts or omissions of TU Electric or the Project Manager i
referred to or in question in the Pending Litigation or which could have been brought into question in the Pending Litigation, INCLUDING WITHOUT LIMITATION SUBJECT l
CLAIMS BASED UPON THE NEGLIGENCE OR GROSS NEGLIGENCE, SOLE, JOINT OR I
j CONCURRENT, OF TU ELECTRIC OR THE PROJECT MANAGER; and (2) the acts or omissions of TU Electric or the Project Manager with respect to Comanche Peak that occur, in whole or in part, prior to the Date of Commercial Operation (as said term is t
I defined in the Joint Ownership Agreem en t), INCLUDING WITHOUT LIMITATION I
SUBJECT CLAIMS BASED UPON THE NEGLIGENCE OR GROSS NEGLIGENCE, SOLE, JOINT OR CONCURRENT, OF TU ELECTRIC OR THE PROJECT MANAGER.
!!L Exceptions to Indemnification. Without limitation, Brazos specifically does not agree to indemnify TU Electric, TUC, and their subsidiaries, affiliates and customers in connection with the following:
1 (a)
Any Subject Claims which may be asserted by TUC's or TU Electric's shareholders, customers or creditors, acting in such capacity, which relate to TU Electric's decision to become a party to the JOA, or which i
relate to TU Electric's involvement in the Pending Litigation, or which relate to TU Electric's execution of the Agreement and participation by TU Electric and TUC in the transactions provided for in the Agreement.
i (b)
Any Sub}ect Claims whleh may be asserted by Tex-IA, TMPA, or others (except Brazos, its Members and their affiliates, subsidiaries, successors and assigns, and except for their insurers, agents, servants, employees, officers, directors, members, consultants, attorneys,- and representatives, past and present, acting in such especities) which relate to TU Electric's decision to become a party to the JOA, or which arise by reason of TU Electric's participation in the Pending Litigation, or which arise by_ l L
~
~'
~
reason of TU Electric's execution of the Agreement and partleipation by TU Electric and TUC in the transactions provided for in the Agreement, (c)
Any liability, cost or expense pursuant to Brazos' rates set forth in Brazos' tariff as same may be approved and in effect from time to time, even though said rates may include costs related to Comanche Peak, for electric power and energy purchased by TU Electric frora Brazos.
(d)
Any Subject Claims relating to TU Electric's or TUC's performance under the Agreement or any other agreement or instrument executed and i
delivered pursuant to the Agreement.
IV.
Assumption of Defense. Brazos will, in addition to providing the foregoing l
l indemnities, assume the defense of TU Electric, TUC, and their subsidiariet, affiliates and i
q customers, in any tribunal where any claim set out in paragraph II, and not excepted in I
paragraph III, is asserted. Provided, however, that in the event TU Electric, TUC, or their subsidiaries, affiliates or customers, receive notice of the commencement of any action or proceeding or the assertion of any claim with respect to which any of them may be entitled to indemnification hereunder or under the Agreement, the party receiving such notice shall give Brazos written notice within ten (10) calendar days of receiving such i
notice (the failure to so notify will not relieve Brazos of its obligations hereunder except to the extent Brazos has been prejudiced by a failure to so notify) and the opportunity to participate in the defense and in any settlement negotiations with respect thereto, and i
will cooperate with Brazoo in all reasonable respects and make available to Brazos all records, evidence, and personnel for consultation and testimony reasonably requested by Brazos in connection therewith. The settlement of any such action, proceeding, or claim without the prior written approval of dazos shall relleve Brazos of any obligations to the l
indemnified party in respect of the subject matter of the settlement of such action, proceeding, or claim.
I t
i l !
y.
Conteol.
To the extent any provision of this Indemnity Agreement ecnflicts w in any provision of See", 9.5 of 'he Agreement, this Indemnity Agreement shall control as to the areement of the parties.
EXECUTED this the day of
,1988, as duly authorized 3y an appropriate resolution of its Board of Directors.
j BRAZOS ELECTRIC POWER COOPER ATIVE, IN C.
(Corporate Seal)
By:
ATTEST:
Its:
\\
j By:
i It3:
1 I
i - - -
-.