1988-0512212L
ORDINANCE NO U51
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS,
MAKING CERTAIN FINDINGS RELATING TO AND INVOLVING THE PROJECT OF
THE TEXAS MUNICIPAL POWER AGENCY KNOWN AS THE COMANCHE PEAK STEAM
ELECTRIC STATION AND ASSOCIATED FACILITIES, AUTHORIZING THE
EXECUTION AND DELIVERY OF A RELEASE AND COVENANT NOT TO SUE WITH
RESPECT TO SAID PROJECT AND THE JOINT OWNERSHIP AGREEMENT TO
WHICH SAID AGENCY IS A PARTY, CONSENTING TO, APPROVING, AUTH-
ORIZING AND RATIFYING TWO AGREEMENTS BETWEEN SAID AGENCY AND
TEXAS UTILITIES ELECTRIC COMPANY CONCERNING SAID PROJECT AND JOINT
OWNERSHIP AGREEMENT AND THE ELECTRIC POWER AND ENERGY GENERATED
AT SAID PROJECT, RELEASING ANY CLAIM AGAINST SAID AGENCY ON
ACCOUNT OF ITS EXECUTION OF EACH OF SAID TWO AGREEMENTS BETWEEN
SAID AGENCY AND TEXAS UTILITIES ELECTRIC COMPANY, APPROVING THE
WITHDRAWAL, UNDER CERTAIN CONDITIONS, OF SAID CITY'S APPROVAL OF
SAID PROJECT, MAKING CERTAIN REPRESENTATIONS AND WARRANTIES,
AGREEING TO BE BOUND BY, AND TO COMPLY WITH, THE NOTICE AND OTHER
REQUIREMENTS SET FORTH IN AN ASSUMPTION AND INDEMNITY AGREEMENT
EXECUTED BY TEXAS UTILITIES ELECTRIC COMPANY, AUTHORIZING THE
DELIVERY OF CERTAIN CERTIFICATES OF THE CITY SECRETARY, AND
PROVIDING FOR AN EFFECTIVE DATE OF THIS ORDINANCE
WHEREAS, the Texas Municipal Power Agency (the "Agency") was
duly and validly created and established as a joint powers agency
under Tex Rev Civ Stat Ann art 1435a (Vernon 1980) pursuant
to the adoption of concurrent ordinances of the Cities of Bryan,
Denton, Garland and Greenville, Texas (the "Cities") and the
concurrent ordinance heretofore duly adopted by the City of
Denton (the "City") in such connection has not been amended or
repealed, and
WHEREAS, the City has heretofore entered into a Power Sales
Contract, dated as of September 1, 1976, with the Agency (the
"Power Sales Contract"), which Power Sales Contract is valid and
binding upon, and legally enforceable against, the City, and
WHEREAS, pursuant to Section 13 of the Power Sales Contract,
the City has approved the Comanche Peak Steam Electric Station as
a Project and such approval has not been amended or repealed by
the City, and
WHEREAS, upon the approval of the Cities of the Comanche Peak
Steam Electric Station as a Project, the Agency, on January 2,
1979, entered into the Joint Ownership Agreement Between Dallas
Power & Light Company, Texas Electric Service Company, Texas
Power & Light Company, Texas Utilities Generating Company, Texas
Municipal Power Agency and Brazos Electric Power Cooperative,
Inc , which Joint Ownership Agreement was subsequently modified
in writing on June 1, 1979, and subsequently amended in writing
on December 9, 1980 and February 12, 1982 (as modified and
amended, the "Joint Ownership Agreement"), and
WHEREAS, certain litigation is currently pending among the
Agency, Texas Utilities Electric Company ("TU Electric") and
Texas Utilities Company, being Cause No 86-6809-A in the
District Court of Dallas County, Texas, 14th Judicial District,
styled "Texas Utilities Electric Company v Tex-La Electric
styled "Tex-La E
et al", Gause rqo s9y,3" in the
ty, texas, 98th Judicial District,
:rative of Texas. Inc . and Texas
Municipal Power A enc v Texas utilities electric uom an ana
Caus Ie o 8'3- n t e District ourt o Harris ounty, Texas,
215th Judicial District, styled "Charles A Atchison, et al v
Brown & Root, at al and
WHEREAS, the Agency and TU Electric have agreed to compromise
and settle all of the claims, actions, controversies, causes of
action, disputes, demands and complaints between them in the
above-referenced litigation as well as certain claims, actions,
controversies, causes of action, disputes, demands and complaints
concerning the Joint Ownership Agreement, the Comanche Peak Steam
Electric Station and certain properties associated with the
Comanche Peak Steam Electric Station, all in accordance with and
pursuant to that certain written Agreement between the Agency and
TU Electric dated February 12, 1988 (the "Agreement"), Providing
for the sale by the Agency to TU Electric of the Agency s owner-
ship interest in Comanche Peak (as said term is defined in the
Agreement), an executed copy of which has been reviewed by the
City prior to the adoption of this Ordinance, and
WHEREAS, as specified in Section 5 3(g) of the Agreement, the
Agency and TU Electric have approved the form and substance of,
and have agreed to enter into, a Power Purchase Agreement (the
"Power Purchase Agreement"), providing for the sale by the Agency
to TU Electric of the Capacity Entitlement and the Energy Entitle-
ment Share (as said terms are defined in the Power Purchase
Agreement) generated at the Comanche Peak Steam Electric Station,
a copy of which has been reviewed by the City prior to the
adoption of this Ordinance, and
WHEREAS, neither the Agency not the City is in default under
the provisions of the Power Sales Contract nor has any event
occurred nor does any condition exist which with the giving of
notice or passage of time (or both) may constitute a default,
which in either event would either adversely affect the Purchased
Assets, as said term is defined in the Agreement, or prevent the
consummation of any of the transactions provided for in the
Agreement and in the Power Purchase Agreement, and
PAGE 2
WHEREAS, for and in consideration of the agreements, under-
takings, promises and covenants set forth in the Agreement,
including without limitation TU Electric's agreement to deliver
to the City a Release releasing certain claims TU Electric, Texas
Utilities Company (the parent of TU Electric) and their
subsidiaries and affiliates have or may have against the Agency
and the City, and TU Electric's agreement to deliver to the City
an Assumption and Indemnity Agreement under which TU Electric
agrees assume certain obligations of the Agency under the Joint
Ownership Agreement and to indemnify the Agency and the City
against certain claims, the Agreement stipulates that as a
condition to the consummation of the Agreement the City will pass
this Ordinance and will execute and deliver to TU Electric a
Release And Covenant Not To Sue in substantially the form set
forth as Exhibit A to this ordinance and will otherwise consent
to, approve and ratify the Agency's execution and delivery of the
Agreement, the other documents to be executed and delivered by
the Agency as set forth in the Agreement, and the Power Purchase
Agreement, and
WHEREAS, the Assumption and Indemnity Agreement referred to
above (attached to the Agreement as an Exhibit, the form of which
has been reviewed by the City prior to the adoption of this
Ordinance) contains certain notice and other requirements to be
performed by the City in the event that the City is notified of
the commencement of any action or proceeding or the assertion of
any claim with respect to which the City may be entitled to
indemnification thereunder or under the Agreement, and
WHEREAS, the execution and delivery by the Agency of the
Agreement and the other documents to be executed and delivered by
the Agency as set forth in the Agreement and the adoption of this
Ordinance and the execution and delivery by the City of the
Release and Covenant Not To Sue in the form set forth in Exhibit
A to this Ordinance and the execution and delivery by the Agency
of the Power Purchase Agreement will not conflict with or result
in any violation of, or constitute a default under, the City
Charter of the City, any prior Ordinance of the City, or any
material provision of any mortgage, indenture, lease, agreement
(including without limitation the Power Sales Contract) or other
instrument, including any revenue or other bonds or other
obligation or other evidence of indebtedness, to which the City,
or any of the City's properties or assets, is subject or a party,
or any permit, concession, grant, franchise, license, ,judgment,
order, decree, statute, law, rule or regulation applicable to the
City of any of its properties or assets, or with the passage of
time or the giving of notice (or both) may constitute a default
thereunder, and the City has full, requisite power and authority
to adopt this Ordinance and to execute, deliver and perform the
Release and Covenant Not to Sue attached as Exhibit A to this
Ordinance, and
PAGE 3
WHEREAS, other than the adoption of this Ordinance, no other
consent, approval, authorization, permit, certificate or order of
any court, tribunal or governmental agency or authority, Federal,
state, county or municipal, is or will be required to permit the
City to consent to, approve and ratify the Agency's execution and
delivery of the Agreement and the other documents to be executed
and delivered by the Agency as set forth in the Agreement and the
Agency's execution and delivery of the Power Purchase Agreement
and the City Council's adoption of this Ordinance and the City's
execution and delivery of the Release And Covenant Not To Sue in
the form set forth as Exhibit A to this Ordinance, and
WHEREAS, there are no obligations or liabilities, including
with respect to any revenue or other bonds or other obligations
or other evidence of indebtedness, of the City, whether accrued,
absolute, contingent or otherwise, which TU Electric may become
liable for or is assuming as a result of the purchase of assets
provided for in the Agreement or in the Power Purchase Agreement
or which may apply with respect to any of the said assets, and
WHEREAS, the City Council has been advised that (i) reports
of R W Beck and Associates, consulting engineers to the Agency,
dated July 21, 1987, and February , 1988, include forecasts
(based in part upon projections made k the City's Director of
Electric Utilities) that the existing generating capacity of the
Cities and the Agency, exclusive of the Comanche Peak Steam
Electric Station, is expected to be sufficient to satisfy the
peak demand and the reserve requirements of the Cities own
electric distribution system through 1995, that additional
generating capacity in lieu of the interest of the Agency in the
Comanche Peak Steam Electric Station may be constructed or
acquired by the time required to satisfy projected future
increases in the requirements of the Cities' own electric
distribution systems, and in essence that the substitution of
such replacement capacity for the interest of the Agency in the
Comanche Peak Steam Electric Station is not expected to result in
any increase in annual combined carrying and operating costs of
the electric generating facilities of the Cities and the Agency
during the forecasted 10 year period, and (ii) that the
disposition of the interest of the Agency in the Comanche Peak
Steam Electric Station and any entitlements to electric power and
energy generated therefrom will reduce the amount of surplus
energy available for sale to others by the Cities during periods
of peak demand, unless additional generating capacity is acquired
or contracted for by the Agency,
WHEREAS, the Agency has also represented to the City Council
that, subsequent to the disposition of its interest in the
Comanche Peak Steam Electric Station, any entitlements to electric
power and energy generated therefrom, and associated transmission
facilities, it would be possible for the Agency to construct,
PAGE 4
acquire, or contract for additional electric generating and
transmission capacity in the amounts and by the time required to
satisfy the projected requirements of the electric system of the
City as well as the other Cities as contained in the aforesaid
forecasts, provided that the facilities required to provide such
capacity, or contracts for the purchase of power, if of the type
which would be classed as a "Project" under clause (iii) of the
definition of such term in the Power Sales Contracts, are
approved by the Cities pursuant to Section 13 of the Power Sales
Contract, and
WHEREAS, the Agency has further represented to the City
Council that at such time as TU Electric has performed its obli-
gations under the Agreement and Power Purchase Agreement,
including the payments of all amounts due thereunder, that the
Agency will, with the consent of the Cities, withdraw its prior
approval of the Comanche Peak Steam Electric Station Project (it
being understood that if the Agreement and the Power Purchase
Agreement are terminated, the Agency may be required to resume
payments under the Joint Ownership Agreement in order to avoid a
default under the Agency's bond resolutions), and
WHEREAS, the City Council has been advised that the provisions
of the Power Sales Contract, which have been considered as having
primary bearing upon the Agreement and the Power Purchase Agree-
ment, are as follows
Section 3 Sale and Purchase of Power and Energy
(a) Each City during the time this Section is applicable
shall
(1) Purchase and receive from the Agency all Power
and Energy which it shall require for the
operation of its electric system in excess of
the amount (i) supplied by any generation and
transmission facilities owned by it on the
effective date of this Contract, including
generating and transmission facilities under
construction on such date, and improvements or
extensions of generating facilities which
increase the Rated Capacity of same so long as
the increase during any period of two successive
Contract Years do not exceed 10% of the same's
Rated Capacity at the beginning of such period,
provided the Cities and the Agency may, in
writing, waive such 10% limit, and (ii) supplied
from any generation facility primarily fueled
from and the construction and operation of which
is incidental to the disposal of solid waste
that is hereafter constructed and owned by one
PAGE 5
or more of the Cities, together with any transmis-
sion facilities that are necessary for the transmis-
sion of Power and Energy therefrom, and * * *
Section 7 Rates and Charges
(a) The rates and charges of the Agency to the Cities
for Power and Energy and for services supplied shall
be
(1) non discriminatory, and
(2) fair and reasonable, and be based upon the cost
of providing the Power and Energy or providing
the service with respect to which the rate or
charge is based, and
(3) adequate (after taking into consideration other
monies received or anticipated to be received)
in each Contract Year to pay or make provision
for paying Annual System Costs
Section 12 Covenants of the Agency
* * *
(b) The Agency shall use reasonable diligence to provide
a constant and uninterrupted supply of Power and
Energy hereunder If the supply of Power and Energy
shall fail, or be interrupted, or become defective
by reason of force majeure as hereinafter provided,
the Agency shall not be liable therefor or for
damages caused thereby
* * *
(d) The Agency covenants and agrees that it will operate,
maintain and manage its System or cause the same to
be operated, maintained and managed in an efficient
and economical manner, consistent with sound utility
practice and in accordance with standards normally
used by utilities owning like properties
WHEREAS, it is now proper for the City Council to proceed
with the adoption of its Ordinance, NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I The recitals of fact contained in the preamble of
this Or nance are found to be true and are adopted as a part of
this Ordinance and the judgment of the City Council
PAGE 6
SECTION II (a) That the City Manager is hereby authorized
and directed to immediately execute the Release And Covenant Not
to Sue in the form attached as Exhibit A to this Ordinance and
made a part of this Ordinance for all purposes The performance
of the obligations of the City under said Release and Covenant
Not to Sue is hereby accepted as an obligation of the City The
City Manager shall cause the executed original of said Release
And Covenant Not To Sue to be delivered to the General Counsel to
the Agency to be held in escrow by him until the Initial Closing
Date referred to in the Agreement (the "Closing Date") as may be
established (i) in the Agreement or (ii) by subsequent agreement
of the parties thereto, that the General Counsel to the Agency is
authorized to deliver said Release And Covenant Not To Sue to TU
Electric on the Closing Date when all of the other prerequisites
for closing other than the delivery of such Releases and Covenants
Not to Sue of the Cities of Bryan, Denton, Garland and Greenville
have been met or waived by TU Electric and the Agency, and, upon
delivery thereof, the same shall constitute the act and deed of
the City Council and the City for all purposes
(b) The acceptance of the responsibilities imposed upon the
General Counsel to the Agency, as set forth in the preceding
paragraph, shall be noted at the bottom of this Ordinance and
shall be a condition precedent to the delivery of such Release
And Covenant Not to Sue It is provided, however, that such
General Counsel shall refuse to deliver said Release And Covenant
Not To Sue unless supplied with a certificate, dated the Closing
Date, by the City Secretary of the City that this Ordinance has
not been repealed or amended, which the City Secretary is hereby
authorized and directed to deliver
SECTION III (a) It is hereby found and determined that the
execution ot~e Agreement and the Power Purchase Agreement by
the parties and the performance of the obligations of the Agency
thereunder, including the series of sale transactions whereby all
of its ownership interest in Comanche Peak and associated
facilities, including without limitation the Fuel and Transmission
Facilities (as said terms are defined in the Agreement) and the
sale of the Capacity Entitlement and the Energy Entitlement Share
(as said terms are defined in the Power Purchase Agreement), will
not cause the A ency to be in violation of its obligations under
Sections 3(a)(1~, 7(a), 12(b) or 12(d) of the Power Sales
Contract with the City, these being the only pertinent Sections
of the Power Sales Contract, and the City does hereby consent to,
approve and ratify the Agency's execution and delivery of the
Agreement and the Power Purchase Agreement to TU Electric, the
consummation of the sales of the Purchased Assets (as defined and
provided for in the Agreement) by the Agency to TU Electric and
the consummation of the other transactions provided for in the
Agreement and the consummation of the sale of the Capacity
Entitlement and the Energy Entitlement Share (as defined and
PAGE 7
provided for in the Power Purchase Agreement) by the Agency to TU
Electric
(b) The City hereby releases any claims that it has or may
hereafter have against the Agency that the execution of the
Agreement and the Power Purchase Agreement by the Agency and the
performance of its obligations thereunder would cause the Agency
to violate the provisions of the Power Sales Contract, and
warrants and stipulates that the Agency's execution of the
Agreement and the Power Purchase Agreement and performance of its
obligations thereunder will not cause a violation of any of the
aforesaid provisions of the Power Sales Contract or any other
agreement or instrument to which the City is a party
(c) Nothing herein shall be construed as (i) releasing any
claims against the Agency except as provided in paragraph (b) of
this section, (ii) interfering with the discretion vested in the
Board of Directors of the Agency, or (iii) approving any proposed
Project under the Power Sales Contract
SECTION IV The City Council hereby approves the withdrawal
by the Agency of its approval of the Project known as the Comanche
Peak Steam Electric Station and associated facilities at such
time as TU Electric has performed its obligations under the
Agreement and the Power Purchase Agreement, including the
payments of all amounts due thereunder, (it being understood that
if the Agreement and the Power Purchase Agreement are terminated
the Agency may be required to resume payments under the Joint
Ownership Agreement in order to avoid a default under the
Agency's bond resolutions)
SECTION V The City hereby represents and warrants that it
has not assigned and, as of the Initial Closing provided for in
the Agreement, will not have assigned any of the claims, actions,
controversies, causes of action, disputes, demands and complaints
which are subject to the Release And Covenant Not To Sue provided
for in Section II of this Ordinance
SECTION VI The City Secretary is hereby authorized and
directed to deliver or cause to be delivered, at the Initial
Closing provided for in the Agreement, a certified copy of this
Ordinance certifying that this Ordinance has not been amended or
repealed and a certificate with respect to (i) the incumbency of
the City officials and their signatures to (a) this Ordinance and
(b) the Release And Covenant Not To Sue and (ii) the due adoption
of this Ordinance
SECTION VII It is hereby officially found and determined
that the meeting at which this Ordinance is passed is open to the
public as required by law and that public notice of the time,
place and purpose of said meeting was given as required
PAGE 8
SECTION VIII The City hereby agrees to be bound by, and to
comply with, the notice and other requirements pertaining to the
City as set forth in the Assumption and Indemnity Agreement
SECTION IX That this ordinance shall become effective
imme ate y upon its passage and approval
PASSED AND APPROVED this the 1st day of March, 1988
RAY S HENS, MAYOR
ATTEST
J A RS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
DEBRA A DRAYOVITCH, CITY ATTORNEY
BY N
The undersigned, General Counsel to the Texas Municipal Power
Agency, hereby accepts the responsibility imposed upon him in
Section II of the foregoing Ordinance
JIM BAILEY
GENERAL COUNSEL TO THE TEXAS
MUNICIPAL POWER AGENCY
PAGE 9
2244L
EXHIBIT A
THE STATE OF TEXAS §
RELEASE AND COVENANT NOT TO SUE
COUNTY OF DENTON §
For and in consideration of the agreements, undertakings,
promises, and covenants of TU Electric, TUC, and their subsi-
diaries, and affiliates set forth in the Agreement, including
without limitation the contemporaneous delivery to the City by
TU Electric of (1) a Release releasing certain claims which TU
Electric, TUC, and their subsidiaries and affiliates, have or
may have against TMPA and the City, and (2) an Assumption and
Indemnity Agreement under which TU Electric agrees to indemnify
the City against certain claims, the adequacy and sufficiency of
such consideration being hereby acknowledged and confessed, the
City, for itself and on behalf of any person or entity, private
or governmental, claiming by, through, or under the City,
including without limitation its or their respective insurers,
agents, servants, employees, officers, directors, consultants,
attorneys, and representatives, does hereby agree to the
following
I DEFINITIONS
As used herein, the following terms have the following
meanings
A "Agreement" means that certain Agreement dated February
12, 1988, by and between TMPA and TU Electric
B "BEPC" means Brazos Electric Power Cooperative, Inc
C "City" means the City of Denton, Texas
D "Comanche Peak" means the nuclear-fueled electric gene-
rating facility under construction on certain lands situated in
Hood and Somervell Counties, Texas, and consisting of two units
having a nominal capacity of 1,150 megawatts each, and related
properties, and is the aggregate and combination of the Station,
Fuel, and Transmission Facilities, and all other rights and
interests associated with or relating thereto
E "Fuel" means the Comanche Peak nuclear fuel, irrespective
of chemical and/or physical form, and the rights and interests
related thereto
F "JOA" means that certain instrument entitled on the cover
page thereof "JOINT OWNERSHIP AGREEMENT BETWEEN DALLAS POWER &
LIGHT COMPANY, TEXAS ELECTRIC SERVICE 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
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 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 Agree-
ment, executed on December 9, 1980, between Dallas Power & Light
Company, Texas Electric Service Company, Texas Power & Light
Company, Texas Utilities Generating Company, TMPA, BEPC, and
Tex-La, together with and as amended by (ii) the Second Amend-
ment of Joint Ownership Agreement, executed on February 12,
1982, between Dallas Power & Light Company, Texas Electric
Service Company, Texas Power & Light Company, Texas Utilities
Generating Company, TMPA, BEPC, and Tex-La
G "Owners" means collectively TMPA, TU Electric, Tex-La,
and BEPC, as owners of Comanche Peak in accordance with the
terms of the JOA, or singularly any of such parties
H "Project manager" means TU Electric designated and acting
as such in accordance with the terms of the JOA
I "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
J "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 easements and other interests of any nature associated
therewith or related thereto and owned by the Owners, excluding,
however, the Fuel, and the Transmission Facilities
K "Subject Claims" means any and all claims, actions, con-
troversies, 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 "TMPA" means Texas Municipal Power Agency
PAGE 2
N "Transmission Facilities" means the Comanche Peak--Parker
Switching Station 345 kV electrical transmission line approxi-
mately 41 miles in length, and associated rights-of-way, equip-
ment, fixtures and personal property
0 "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
II RELEASE
The City, except as provided in paragraph V herein, for
itself and on behalf of any person or entity, private or govern-
mental, claiming by, through, or under the City, including
without limitation its or their respective insurers, agents,
servants, employees, officers, directors, consultants, attorneys,
and representatives does hereby waive, release, discharge,
renounce, and relinquish any and all Subject Claims relating to
Comanche Peak which it has or they have or may have, whether
known or unknown, contingent or absolute, including without limi-
tation those based on common law, whether contract (expressed or
implied including express or implied warranty) or tort (includ-
ing, without limitation, intentional tort, negligence or gross
negligence, sole, joint, or concurrent) or strict liability or
fraud, 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
United States Nuclear Regulatory Commission, the Securities Act
of 1933, as amended or the Securities Act of 1934, as amended,
and any rule or regulation thereunder, the Texas Securities Act
(Title 19, Articles 581-1, et se , V A T S ) and the Texas
Deceptive Trade Practices an onsumer Protection Act, against
TU Electric or TUC, or both, in any capacity, whether indivi-
dually, as the Project Manager of Comanche Peak, or otherwise,
and their respective insurers, agents, servants, employees,
officers, directors, shareholders, consultants, attorneys, and
representatives, past and present, and any and all of their
respective successors, subsidiaries, and affiliates and their
respective agents, servants, employees, officers, directors,
shareholders, consultants, attorneys, and representatives, past
and present
III COVENANT
The City hereby covenants and warrants that it has not
assigned any Subject Claims that are hereby released
PAGE 3
IV COVENANT NOT TO SUE AND AGREEMENT NOT TO CHALLENGE
The City, except as provided in paragraph V herein, for
itself and on behalf of any person or entity, private or govern-
mental, claiming by, through, or under the City, including
without limitation its or their respective insurers, agents,
servants, employees, officers, directors, consultant, attorneys,
and representatives, does hereby covenant
(a) That 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 Electric or
TUC, or both, in any capacity, whether individually, as Project
Manager or otherwise, and their respective insurers, agents,
servants, employees, officers, directors, shareholders, consul-
tants, attorneys, and representatives, past and present, and any
and all of their respective successors, subsidiaries, and
affiliates and their respective agents, servants, employees,
officers, directors, shareholders, consultants, attorneys, and
representatives, past and present, with respect to any Subject
Claim (including 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, 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
(b) That neither it nor they, individually, collectively, or
in any combination, will directly or indirectly challenge, con-
test, or assert any complaint in any court or before any admini-
strative 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 incident and attributes
thereof including, without limitation (1) the design, construc-
tion, management, and licensing of Comanche 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, desi~n, construction, management,
and licensing of Comanche Peak, (4 the costs of construction
and the schedule of construction and completion of Comanche
Peak, (5) the reasonableness, prudency, or efficiency of the
management, procurement, conversion, enrichment, fabrication,
shipping, transportation, and storage of the Fuel, (6) the costs
incurred in connection with the management, procurement,
conversion, enrichment, fabrication, shipping, transportation,
PAGE 4
and storage of the fuel, (7) the breach of the JOA and any
express or implied warranties arising out of the JOA, (8) any
representation, misrepresentation, disclosure, or non-disclosure
in connection with the negotiations, or preceding the execution
of the JOA, (9) in connection with the performance or nonper-
formance by TU Electric of its duties, responsibilities, or
obligations under the JOA as Project Manager or otherwise, (10)
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, suppliers, consultants,
vendors, or others with respect to Comanche Peak (including
separately the Station, Fuel, or Transmission Facilities), and
(11) on account of anything that has occurred or may have
occurred, in whole or in part, with respect to Comanche Peak (in-
cluding separately the Station, Fuel, or Transmission Facilities)
and the incidents and attributes thereof, and any of the fore-
going whether known or unknown
V EXCEPTIONS TO RELEASE, COVENANT NOT TO
SUE, AND AGREEMENT NOT TO CHALLENGE
The City specifically does not release, and specifically
does not covenant not to sue with regard to, and specifically
does not agree to not assert, challenge or contest with regard
to
(a) Any Subject Claims arising out of or under the Agreement
or any of the other agreements or instruments delivered by TU
Electric pursuant to the Agreement
(b) Any Subject Claims which could not have been brought in
the Pending Litigation and which accrue on or after the Date of
Commercial Operation (as that 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
the planning, design or construction (or the management thereof)
of Comanche Peak
(c) Any defenses which the City has or may have to Subject
Claims asserted against the City by any persons or parties whom-
soever, provided that the City may not seek any type of affir-
mative relief hereunder against TU Electric, TUC, or both, their
successors, subsidiaries and affiliates, or its or their respec-
tive insurers, agents, servants, employees, officers, directors,
shareholders, consultants, attorneys and representatives
(d) Any counterclaims which the City has or may have against
any party other than TU Electric, TUC, or both, their successors,
PAGE 5
subsidiaries and affiliates, o
agents, servants, employees,
consultants, attorneys and
capacity, with respect to a
against the City by anyone of
their successors, subsidiarie
respective insurers, agents,
directors, shareholders,
representatives
r its or their respective insurers,
officers, directors, shareholders,
representatives, acting in such
ny Subject Claims being asserted
her than TU Electric, TUC, or both,
s and affiliates, or its or their
servants, employees, officers,
consultants, attorneys and
EXECUTED this the day of 1988, as duly
00
authorized by Ordinance No 00 6S finally passed and approved
on the 1st day of March, 1988
THE CITY OF DENTON
BY ~
LLOYD HARRELL
CITY MANAGER
ATTEST
1L
J I ERIWAZ RS CRE NY
APPROVED AS TO LEGAL FORM
DEBRA A DRAYOVITCH, CITY ATTORNEY
BY
PAGE 6
Serving the cities of Bryan Denton Garland & Greenville
march 10, 1988
Ms Debra Drayovitch
City Attorney
215 E. McKinney
Denton, Texas 76201
Re Comanche Peak Settlement
Dear Debra
>6.
This is to acknowledge receipt of the city ordinance of the Denton City
Council, the Release and Covenant Not to Sue, plus the other doc=ents which
you recently sent me. Enclosed is a copy of the city ordinance which I have
signed on the last page. I will hold the Release and Covenant Not to Sue in
escrow as instructed by the city ordinance.
Again, I want to thank you for your tremendous assistance in the pursuit
of the litigation and the settlement
sincerely,
MUNICIPAL POWR AGENCY
J Elai] ey
Agency Attorney
JB sw
Enclosure
RUHEIV 1"AR 1 4 1988 CITY OF DENTON
LEGAL DEPT
Texas Municipal Power Agency P 0 Box 7000 Bryan, Texas 77905
(409) 873 2013
27311
CERTIFICATE OF CITY SECRETARY
THE STATE OF TEXAS §
COUNTY OF DENTON §
The undersigned, City Secretary of the City of Denton,
Texas (the "City"), HEREBY CERTIFIES that the attached and
foregoing Ordinance is a true and correct copy of the Ordinance
having the following caption
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON,
TEXAS, MAKING CERTAIN FINDINGS RELATING TO AND
INVOLVING THE PROJECT OF THE TEXAS MUNICIPAL POWER
AGENCY KNOWN AS THE COMANCHE PEAK STEAM ELECTRIC
STATION AND ASSOCIATED FACILITIES, AUTHORIZING THE
EXECUTION AND DELIVERY OF A RELEASE AND COVENANT NOT
TO SUE WITH RESPECT TO SAID PROJECT AND THE JOINT
OWNERSHIP AGREEMENT TO WHICH SAID AGENCY IS A PARTY,
CONSENTING TO, APPROVING, AUTHORIZING AND RATIFYING
TWO AGREEMENTS BETWEEN SAID AGENCY AND TEXAS UTILITIES
ELECTRIC COMPANY CONCERNING SAID PROJECT AND JOINT
OWNERSHIP AGREEMENT AND THE ELECTRIC POWER AND ENERGY
GENERATED AT SAID PROJECT, RELEASING ANY CLAIM AGAINST
SAID AGENCY ON ACCOUNT OF ITS EXECUTION OF EACH OF
SAID TWO AGREEMENTS BETWEEN SAID AGENCY AND TEXAS
UTILITIES ELECTRIC COMPANY, APPROVING THE WITHDRAWAL,
UNDER CERTAIN CONDITIONS, OF SAID CITY'S APPROVAL OF
SAND PROJECT, MAKING CERTAIN REPRESENTATIONS AND
WARRANTIES, AGREEING TO BE BOUND BY, AND TO COMPLY
WITH, THE NOTICE AND OTHER REQUIREMENTS SET FORTH IN
AN ASSUMPTION AND INDEMNITY AGREEMENT EXECUTED BY
TEXAS UTILITIES ELECTRIC COMPANY, AUTHORIZING THE
DELIVERY OF CERTAIN CERTIFICATES OF THE CITY SECRETARY,
AND PROVIDING FOR AN EFFECTIVE DATE OF THIS ORDINANCE
1 That such Ordinance was adopted at a regular meeting of
the City Council of the City held on or the date of the
execution hereof after consideration of the same, upon a motion
being made by Councilmember Alexander, a second of such motion
by CoWncilmember McAdams, and upon a vote being called for, 7
Councilmembers voted for the adoption thereof, none voted
against, and none was absent, such Ordinance was adopted and is
in full force and effect
I DO ALSO CERTIFY that according to the records of my
office, each Member of the City Council was given actual notice
of the time, place and purpose of the meeting, the same being a
regular meeting, and each Councilmember had actual notice that
the aforesaid Ordinance would be considered, that all meetings
of the City Council, including the meeting at which the
foregoing Ordinance was adopted, are open to the public (except
in instances where a part of the meeting may, under applicable
law, be conducted as an executive session), that the foregoing
Ordinance was not adopted at an executive session, that notice
of such meeting had been given in advance thereof in such
manner so as to be in compliance with the provisions of Article
6252-17, Section 3A, V A T C S
TO CtERTIFY WHICH, witness my hand and seal of office,
this day of march, 1988
TY S CRETARY
CITY OF DENTON, TEXAS
PAGE 2
2212L
ORDINANCE NO 2-051
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS,
MAKING CERTAIN FINDINGS RELATING TO AND INVOLVING THE PROJECT OF
THE TEXAS MUNICIPAL POWER AGENCY KNOWN AS THE COMANCHE PEAK STEAM
ELECTRIC STATION AND ASSOCIATED FACILITIES, AUTHORIZING THE
EXECUTION AND DELIVERY OF A RELEASE AND COVENANT NOT TO SUE WITH
RESPECT TO SAID PROJECT AND THE JOINT OWNERSHIP AGREEMENT TO
WHICH SAID AGENCY IS A PARTY, CONSENTING TO, APPROVING, AUTH-
ORIZING AND RATIFYING TWO AGREEMENTS BETWEEN SAID AGENCY AND
TEXAS UTILITIES ELECTRIC COMPANY CONCERNING SAID PROJECT AND JOINT
OWNERSHIP AGREEMENT AND THE ELECTRIC POWER AND ENERGY GENERATED
AT SAID PROJECT, RELEASING ANY CLAIM AGAINST SAID AGENCY ON
ACCOUNT OF ITS EXECUTION OF EACH OF SAID TWO AGREEMENTS BETWEEN
SAID AGENCY AND TEXAS UTILITIES ELECTRIC COMPANY, APPROVING THE
WITHDRAWAL, UNDER CERTAIN CONDITIONS, OF SAID CITY'S APPROVAL OF
SAID PROJECT, MAKING CERTAIN REPRESENTATIONS AND WARRANTIES,
AGREEING TO BE BOUND BY, AND TO COMPLY WITH, THE NOTICE AND OTHER
REQUIREMENTS SET FORTH IN AN ASSUMPTION AND INDEMNITY AGREEMENT
EXECUTED BY TEXAS UTILITIES ELECTRIC COMPANY, AUTHORIZING THE
DELIVERY OF CERTAIN CERTIFICATES OF THE CITY SECRETARY, AND
PROVIDING FOR AN EFFECTIVE DATE OF THIS ORDINANCE
WHEREAS, the Texas Municipal Power Agency (the "Agency") was
duly and validly created and established as a joint powers agency
under Tex Rev Civ Stat Ann art 1435a (Vernon 1980) pursuant
to the adoption of concurrent ordinances of the Cities of Bryan,
Denton, Garland and Greenville, Texas (the "Cities") and the
concurrent ordinance heretofore duly adopted by the City of
Denton (the "City") in such connection has not been amended or
repealed, and
WHEREAS, the City has heretofore entered into a Power Sales
Contract, dated as of September 1, 1976, with the Agency (the
"Power Sales Contract"), which Power Sales Contract is valid and
binding upon, and legally enforceable against, the City, and
WHEREAS, pursuant to Section 13 of the Power Sales Contract,
the City has approved the Comanche Peak Steam Electric Station as
a Project and such approval has not been amended or repealed by
the City, and
WHEREAS, upon the approval of the Cities of the Comanche Peak
Steam Electric Station as a Project, the Agency, on January 2,
1979, entered into the Joint Ownership Agreement Between Dallas
Power & Light Company, Texas Electric Service Company, Texas
Power & Light Company, Texas Utilities Generating Company, Texas
Municipal Power Agency and Brazos Electric Power Cooperative,
Inc , which Joint Ownership Agreement was subsequently modified
in writing on June 1, 1979, and subsequently amended in writing
on December 9, 1980 and February 12, 1982 (as modified and
amended, the "Joint Ownership Agreement"), and
WHEREAS, certain litigation is currently pending among the
Agency, Texas Utilities Electric Company ("TU Electric") and
Texas Utilities Company, being Cause No 86-6809-A in the
District Court of Dallas County, Texas, 14th Judicial District,
styled "Texas Utilities Electric Company v Tex-La Electric
Soo erative or Texas Inc et a1*,, Cause No 399,33b in the
str ct ourt _o1
rav s ounty, exas, 98th Judicial District,
styled "Tex-La Electric Cooperative of Texas Inc and Texas
Municipal ower aencv v Texas Util~t eP ei crTc Zo anv"- and
yause No of-zloov in the uiatrict Court of Harris County, Texas,
215th Judicial District, styled "Charles A Atchison, et al v
Brown 6 Root, et al and
WHEREAS, the Agency and TU Electric have agreed to compromise
and settle all of the claims, actions, controversies, causes of
action, disputes, demands and complaints between them in the
above-referenced litigation as well as certain claims, actions,
controversies, causes of action, disputes, demands and complaints
concerning the Joint Ownership agreement, the Comanche Peak Steam
Electric Station and certain properties associated with the
Comanche Peak Steam Electric Station, all in accordance with and
pursuant to that certain written Agreement between the Agency and
TU Electric dated February 12, 1988 (the "Agreement"), providing
for the sale by the Agency to TU Electric of the Agency s owner-
ship interest in Comanche Peak (as said term is defined in the
Agreement), an executed copy of which has been reviewed by the
City prior to the adoption of this Ordinance, and
WHEREAS, as specified in Section 5 3(g) of the Agreement, the
Agency and TU Electric have approved the form and substance of,
and have agreed to enter into, a Power Purchase Agreement (the
"Power Purchase Agreement"), providing for the sale by the Agency
to TU Electric of the Capacity Entitlement and the Energy Entitle-
ment Share (as said terms are defined in the Power Purchase
Agreement) generated at the Comanche Peak Steam Electric Station,
a copy of which has been reviewed by the City prior to the
adoption of this Ordinance, and
WHEREAS, neither the Agency not the City is in default under
the provisions of the Power Sales Contract nor has any event
occurred nor does anq condition exist which with the giving of
notice or passage of time (or both) may constitute a default,
which in either event would either adversely affect the Purchased
Assets, as said term is defined in the Agreement, or prevent the
consummation of any of the transactions provided for in the
Agreement and in the Power Purchase Agreement, and
PAGE 2
WHEREAS, for and in consideration of the agreements, under-
takings, promises and covenants set forth in the Agreement,
including without limitation TU Electric 'a agreement to deliver
to the City a Release releasing certain claims TU Electric, Texas
Utilities Company (the parent of TU Electric) and their
subsidiaries and affiliates have or may have against the Agency
and the City, and TU Electric's agreement to deliver to the City
an Assumption and Indemnity Agreement under which TU Electric
agrees assume certain obligations of the Agency under the Joint
Ownership Agreement and to indemnify the Agency and the City
against certain claims, the Agreement stipulates that as a
condition to the consummation of the Agreement the City will pass
this Ordinance and will execute and deliver to TU Electric a
Release And Covenant Not To Sue in substantially the form set
forth as Exhibit A to this ordinance and will otherwise consent
to, approve and ratify the Agency's execution and delivery of the
Agreement, the other documents to be executed and delivered by
the Agency as set forth in the Agreement, and the Power Purchase
Agreement, and
WHEREAS, the Assumption and Indemnity Agreement referred to
above (attached to the Agreement as an Exhibit, the form of which
has been reviewed by the City prior to the adoption of this
Ordinance) contains certain notice and other requirements to be
performed by the City in the event that the City is notified of
the commencement of any action or proceeding or the assertion of
any claim with respect to which the City may be entitled to
indemnification thereunder or under the Agreement, and
WHEREAS, the execution and delivery by the Agency of the
Agreement and the other documents to be executed and delivered by
the Agency as set forth in the Agreement and the adoption of this
Ordinance and the execution and delivery by the City of the
Release and Covenant Not To Sue in the form set forth in Exhibit
A to this Ordinance and the execution and delivery by the Agency
of the Power Purchase Agreement will not conflict with or result
in any violation of, an constitute tOrdinanceof default the under, City the City any
Charter of the City, any prior
material provision of any mortgage, indenture, lease, agreement
(including without limitation the Power Sales Contract) or other
instrument, including any revenue or other bonds or other
obligation or other evidence of indebtedness, to which the City,
or any of the City's properties or sets franchise, subject orja party,
or any permit, concession, grant, order, decree, statute, law, rule or regulation applicable to the
City of any of its properties or assets, or with the passage of
time or the giving of notice (or both) may constitute a default
thereunder, and the City has full, requisite power and authority
to adopt this Ordinance and to execute, deliver and perform the
Release and Covenant Not to Sue attached as Exhibit A to this
Ordinance, and
PAGE 3
WHEREAS, other than the adoption of this Ordinance, no other
consent, approval, authorization, permit, certificate or order of
any court, tribunal or governmental agency or authority, Federal,
state, county or municipal, is or will be required to permit the
City to consent to, approve and ratify the Agency's execution and
delivery of the Agreement and the other documents to be executed
and delivered by the Agency as set forth in the Agreement and the
Agency's execution and delivery of the Power Purchase Agreement
and the City Council's adoption of this Ordinance and the City's
execution and delivery of the Release And Covenant Not To Sue in
the form set forth as Exhibit A to this Ordinance, and
WHEREAS, there are no obligations or liabilities, including
with respect to any revenue or other bonds or other obligations
or other evidence of indebtedness, of the City, whether accrued,
absolute, contingent or otherwise, which TU Electric may become
liable for or is assuming as a result of the purchase of assets
provided for in the Agreement or in the Power Purchase Agreement
or which may apply with respect to any of the said assets, and
WHEREAS, the City Council has been advised that (i) reports
of R W Beck and Associates, consulting engineers to the Agency,
dated July 21, 1987, and February 11 , 1988, include forecasts
(based in part upon projections made by the City's Director of
Electric Utilities) that the existing generating capacity of the
Cities and the Agency, exclusive of the Comanche Peak Steam
Electric Station, is expected to be sufficient to satisfy the
peak demand and the reserve requirements of the Cities own
electric distribution system through 1995, that additional
generating capacity in lieu of the interest of the Agency in the
Comanche Peak Steam Electric Station may be constructed or
acquired by the time required to satisfy projected future
increases in the requirements of the Cities own electric
distribution systems, and in essence that the substitution of
such replacement capacity for the interest of the Agency in the
Comanche Peak Steam Electric Station is not expected to result in
any increase in annual combined carrying and operating costs of
the electric generating facilities of the Cities and the Agency
during the forecasted 10 year period, and (ii) that the
disposition of the interest of the Agency in the Comanche Peak
Steam Electric Station and any entitlements to electric power and
energy generated therefrom will reduce the amount of surplus
energy available for sale to others by the Cities during periods
of peak demand, unless additional generating capacity is acquired
or contracted for by the Agency,
WHEREAS, the Agency has also represented to the City Council
that, subsequent to the disposition of its interest in the
Comanche Peak Steam Electric Station, any entitlements to electric
power and energy generated therefrom, and associated transmission
facilities, it would be possible for the Agency to construct,
PAGE 4
acquire, or contract for additional electric generating and
transmission capacity in the amounts and by the time required to
satisfy the projected requirements of the electric system of the
city as well as the other Cities as contained in the aforesaid
forecasts, provided that the facilities required to provide such
capacity, or contracts for the purchase of power, if of the type
which would be classed as a "Project" under clause (iii) of the
definition of such term in the Power Sales Contracts, are
approved by the Cities pursuant to Section 13 of the Power Sales
Contract,
WHEREAS, the Agency has further represented to the City
Council that at such time as TU Electric has performed its obli-
gations under the Agreement and Power Purchase Agreement,
including the payments of all amounts due thereunder, that the
Agency will, with the consent of the Cities, withdraw its prior
approval of the Comanche Peak Steam Electric Station Project (it
being understood that if the Agreement and the Power Purchase
Agreement are terminated, the Agency may be required to resume
payments under the Joint Ownership Agreement in order to avoid a
default under the Agency's bond resolutions),
WHEREAS, the City Council has been advised that the provision
of the Power Sales Contract, which have been considered as having
primary bearing upon the Agreement and the Power Purchase
Agreement, are as follows
Section 3 Sale and Purchase of Power and Energy
(a) Each City during the time this Section is applicable
shall
(1) Purchase and receive from the Agency all Power
and Energy which it shall require for the
operation of its electric system in excess of
the amount (i) supplied by any generation and
transmission facilities owned by it on the
effective date of this Contract, including
generating and transmission facilities under
construction on such date, and improvements or
extensions of generating facilities which
increase the Rated Capacity of same so long as
the increase during any period of two successive
Contract Years do not exceed 10% of the same's
Rated Capacity at the beginning of such period,
provided the Cities and the Agencyy may, in
writing, waive such 10% limit, and (ii) supplied
from any generation facility primarily fueled
from and the construction and operation of which
is incidental to the disposal of solid waste
that is hereafter constructed and owned by one
PAGE 5
or more of the Cities, together with any transmis-
sion facilities that are necessary for the transmis-
sion of Power and Energy therefrom, and * * *
Section 7 Rates and Charges
(a) The rates and charges of the Agency to the Cities
for Power and Energy and for services supplied shall
be
(1) non discriminatory, and
(2) fair and reasonable, and be based upon the cost
of providing the Power and Energy or providing
the service with respect to which the rate or
charge is based, and
(3) adequate (after taking into consideration other
monies received or anticipated to be received)
in each Contract Year to pay or make provision
for paying Annual System Costs
Section 12 Covenants of the Agency
* * *
(b) The Agency shall use reasonable diligence to provide
a constant and uninterrupted supply of Power and
Energy hereunder If the supply of Power and Energy
shall fail, or be interrupted, or become defective
by reason of force majeure as hereinafter provided,
the Agency shall not be liable therefor or for
damages caused thereby
* * *
(d) The Agency covenants and agrees that it will operate,
maintain and manage its System or cause the same to
be operated, maintained and managed in an efficient
and economical manner, consistent with sound utility
practice and in accordance with standards normally
used by utilities owning like properties
WHEREAS, it is now proper for the City Council to proceed
with the adoption of its Ordinance, NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I The recitals of fact contained in the preamble of
this r nance are found to be true and are adopted as a part of
this Ordinance and the judgment of the City Council
PAGE 6
SECTION II (a) That the City Manager is hereby authorized
and recce to immediately execute the Release And Covenant Not
to Sue in the form attached as Exhibit A to this Ordinance and
made a part of this Ordinance for all purposes The performance
of the obligations of the City under said Release and Covenant
Not to Sue is hereby accepted as an obligation of the City The
City Manager shall cause the executed original of said Release
And Covenant Not To Sue to be delivered to the General Counsel to
the Agency to be held in escrow by him until the initial Closing
Date referred to in the Agreement (the "Closing Date") as may be
established (i) in the Agreement or (ii) by subsequent agreement
of the parties thereto, that the General Counsel to the Agency is
authorized to deliver said Release And Covenant Not To Sue to TU
Electric on the Closing Date when all of the other prerequisites
for closing other than the delivery of such Release and Covenant
Not to Sue of the Cities of Bryan, Denton, Garland and Greenville
have been met or waived by TU Electric and the Agency, and, upon
delivery thereof, the same shall constitute the act and deed of
the City Council and the City or all purposes
(b) The acceptance of the responsibilities imposed upon the
General Counsel to the Agency, as set forth in the preceding
paragraph, shall be noted at the bottom of this Ordinance and
shall be a condition precedent to the delivery of such Release
And Covenant Not to Sue. It is provided, however, that such
General Counsel shall refuse to deliver said Release And Covenant
Not To Sue unless supplied with a certificate, dated the Closing
Date, by the City Secretary of the City that this Ordinance has
not been repealed or amended, which the City Secretary is hereby
authorized and directed to deliver
SECTION III (a) It is hereby found and determined that the
execution o the Agreement and the Power Purchase Agreement by
the parties and the performance of the obligations of the Agency
thereunder, including the series of sale transactions whereby all
of its ownership interest in Comanche Peak and associated
facilities, including without limitation the Fuel and Transmission
Facilities (as said terms are defined in the Agreement) and the
sale of the Capacity Entitlement and the Energy Entitlement Share
(as said terms are defined in the Power Purchase Agreement), will
not cause the Agency to be in violation of its obligations under
Sections 3(a)(1), 7(a), 12(b) or 12(d) of the Power Sales
Contract with the City, these being the only pertinent Sections
of the Power Sales Contract, and the City does hereby consent to,
approve and ratify the Agency's execution and delivery of the
Agreement and the Power Purchase Agreement to TU Electric, the
consummation of the sales of the Purchased Assets (as defined and
provided for in the Agreement) by the Agency to TU Electric and
the consummation of the other transactions provided for in the
Agreement and the consummation of the sale of the Capacity
Entitlement and the Energy Entitlement Share (as defined and
PAGE 7
provided for in the Power Purchase Agreement) by the Agency to TU
Electric
(b) The City hereby releases any claims that it has or may
hereafter have against the Agency that the execution of the
Agreement and the Power Purchase Agreement by the Agency and the
performance of its obligations thereunder would cause the Agency
to violate the provisions of the Power Sales Contract, and
warrants and stipulates that the Agency's execution of the
Agreement and the Power Purchase Agreement and performance of its
obligations thereunder will not cause a violations of any of the
aforesaid provisions of the Power Sales Contract or any other
agreement or instrument to which the City is a party
(c) Nothing herein shall be construed as (i) releasing any
claims against the Agency except as provided in paragraph (b) of
this section, (ii) interfering with the discretion vested in the
Board of Directors of the Agency, or (iii) approving any proposed
Project under the Power Sales Contract
SECTION IV The City Council hereby approves the withdrawal
by the Agency of its approval of the Project known as the Comanche
Peak Steam Electric Station and associated facilities at such
time as TU Electric has performed its obligations under the
Agreement and the Power Purchase Agreement, including the
payments of all amounts due thereunder, (it being understood that
if the Agreement and the Power Purchase Agreement are terminated
the Agency may be required to resume payments under the Joint
Ownership Agreement in order to avoid a default under the
Agency's bond resolutions)
SECTION V The City hereby represents and warrants that it
has not~ asked and, as of the Initial Closing provided for in
the Agreement, will not have assigned any of the claims, actions,
controversies, causes of action, disputes, demands and complaints
which are subject to the Release And Covenant Not To Sue provided
for in Section II of this Ordinance
SECTION VI. The City Secretary is hereby authorized and
directed to deliver or cause to be delivered, at the Initial
Closing provided for in the Agreement, a certified copy of this
Ordinance certifying that this Ordinance as not been amended or
repealed and a certificate with respect to (i) the incumbency of
the City officials and their signatures to (a) this Ordinance and
(2) the Release And Covenant Not To Sue provided for in Section 2
of this Ordinance and (ii) the due adoption of this Ordinance
SECTION VII It is hereby officially
that t 4e meet ng at which this Ordinance is
public as required by law and that public
place and purpose of said meeting was given
found and determined
passed is open to the
notice of the time,
is required
PAGE 8
SECTION VIII The City hereby agrees to be bound by, and to
comply w t -t-Fe- notice and other requirements pertaining to the
City as set forth in the Assumption and Indemnity Agreement
SECTION IX That this ordinance shall become effective
imme ate y upon its passage and approval
PASSED AND APPROVED this the 1st day of March, 1988
M
AYOR
ATTEST
AAA4
J S, CITY SECRETARY
APPROVED AS TO LEGAL FORM
DEBRA A DRAYOVITCH, CITY ATTORNEY
BY LAo
The undersigned, General Counsel to the Texas Municipal Power
Agency, hereby accepts the responsibility imposed upon him in
Section II of the foregoing Ordinance
JI BAILEY
GENERAL COUNSEL TO THE TEXAS
MUNICIPAL POWER AGENCY
PAGE 9