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HomeMy WebLinkAboutCC 2008-12-08 AgendasCITY OF NORTH RICHLAND HILLS CITY COUNCIL WORK SESSION AGENDA NORTH RICHLAND HILLS CITY HALL PRE-COUNCIL CHAMBERS 7301 NORTHEAST LOOP 820 NORTH RICHLAND HILLS, TEXAS Monday, December 8, 2008 5:45 P.M. A.1 Discuss Items from Regular City Council Meeting A.2 IR 2008-129 Discuss Cities Aggregation Power Project Long Term Power Contract (30 Minutes) A.3 IR 2008-128 Discuss 2009 State Legislative Program (10 Minutes) A.4 IR 2008-126 Explanation of Dangerous Dog Investigation (15 minutes) A.5 IR 2008-131 Iron Horse 2008 End of Season Report (10 Minutes) A.6 Adjournment Certification I do hereby certify that the above notice of meeting of the North Richland Hills City Council was posted at City Hall, City of North Richland Hills, Texas in compliance with Chapter 551, Texas Government Code on December 5, 2008 at ~-~~,~`~ ! ~ ,~'~. _ ~ ~ '~~ Wi ( A ... ~, 4,` ~~ ~s isfarit i y Secretary This facility is wheelchair accessible and accessible parking spaces are available. Requests for accommodations or interpretive services must be made 48 hours prior to this meeting. Please contact the City Secretary's office at 817-427-6060 for further information. The City Council may confer privately with its attorney to seek legal advice on any matter listed on the agenda or on any matter in which the duty of the attorney to the governmental body under the. Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551, Texas Government Code. December 8, 2008 -City Council Agenda Page 1 of 4 CITY OF NORTH RICHLAND HILLS CITY COUNCIL AGENDA CITY HALL COUNCIL CHAMBERS 7301 NORTHEAST LOOP 820 NORTH RICHLAND HILLS, TEXAS Monday, December 8, 2008 7:00 P.M. ------------------------------------------------------------------------------------------------------------------------- Copies of the full City Council agenda information packet are accessible prior to every regularly scheduled Monday Council meeting according to the following locations and schedule: ^ Library on the Friday prior to the meeting (available electronically) ^ City Hall on the day of the meeting (hard copy available) Additionally, the agenda packet is available for download from the City's web site at www.nrhtx.com after 5:00 p.m. on the Friday prior to every regularly scheduled Council meeting. ---------------------------------------------------------------------------------------------------------------------------- A.0 Call to Order -Mayor Trevino A.1 Invocation -Mayor Pro Tem Turnage A.2 Pledge -Mayor Pro Tem Turnage A.3 Special Presentation(s) and Recognitions) -Proclamation for North Texas Literacy Awareness Day presented by Councilman Barth A.4 Special Presentation(s) and Recognitions) - 2008 United Way Campaign presented by Councilman Lewis A.5 Citizens Presentation An opportunity for citizens to address the City Council on matters which are not scheduled for consideration by the City Council or another City Board or Commission at a later date. In order to address the Council, please complete a Public Meeting Appearance Card and present it to the City Secretary prior to the start of the Council meeting. The Texas Open Meetings Act prohibits deliberation by the Council of any subject which is not on the posted agenda, therefore the Council will not be able to discuss or take action on items brought up during the citizens presentation. A.6 Removal of Item(s) from Consent Agenda B.0 CONSIDER APPROVAL OF CONSENT AGENDA ITEMS December 8, 2008 -City Council Agenda Page 2 of 4 All consent agenda items listed below are considered to be routine items deemed to require little or no deliberation by the City Council and will be voted on in one motion. There will be no separate discussion of these items unless a Council Member so requests, in which event the item will be removed from the Consent Agenda and considered. B.1 Approval of Minutes of November 24, 2008 City Council Meeting B.2 FP 2008-07 Consideration of a Request from Roger & A. Jenisse Linebarger to Approve a Final Plat of Lot 1, Block 2, Park Oaks Addition (Located at 6432 Harmonson Road - 0.967 acres) B.3 RP 2008-07 Consideration of a Request from North Richland Hills Baptist Church to Approve a Replat of five lots in the Parchman Addition to Lot 1-R1, Parchman Addition and a Street Use License Agreement (Located at Boulevard 26 and Vance Road - 10.07 acres) C.0 PUBLIC HEARINGS C.1 ZC 2008-05 Public Hearing and Consideration of a Request from Terry Browning to Approve a Zoning Change of Tract 2S2A, Abstract 1520 from "U" Institutional to "R-1" Single Family Residential (Located at 6025 Riviera Drive - 0.277 acres) -Ordinance No. 3032 D.0 PLANNING AND DEVELOPMENT Items to follow do not require a public hearing. No items for this category. E.0 PUBLIC WORKS No items for this category. F.0 GENERAL ITEMS F.1 GN 2008-118 Approve an Economic Development Agreement with Texas Investors, LLC for 5142 and 5198 Rufe Snow Dr. -Resolution No. 2008-061 F.2 GN 2008-119 Approve an Electric Power Contract with Cities Aggregation Power Project, Inc. -Ordinance No. 3034 F.3 GN 2008-120 Revise the 2008/09 Operating Budget for Repairs to the Ace Park Mural G.0 EXECUTIVE SESSION ITEMS No items for this category. H.0 INFORMATION AND REPORTS December 8, 2008 -City Council Agenda Page 3 of 4 H.1 Announcements -Councilwoman Compton H.2 Adjournment All items on the agenda are for discussion and/or action. Certificafi~n I do hereby certify that the above notice of meeting of the North Richland Hills City Council was posted at City Hall, City of North Richland Hill ,Texas in compliance with Chapter 551, Texas ,. Government Code on December 5, 2008 at ?~,,~ (~ .~~ ~ . ~~~~ {~ ~ .. ~~ ~~~ sis ant City Secretary ~~.... This facility is wheelchair accessible and accessible parking spaces are available. Requests for accommodations or interpretive services must be made 48 hours prior to this meeting. Please contact the City Secretary's office at 817-427-6060 for further information. The City Council may confer privately with its attorney to seek legal advice on any matter listed on the agenda or on any matter in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551, Texas Government Code. December 8, 2008 -City Council Agenda Page 4 of 4 City of North Richland Hills City Council Work Session Meeting Agenda North Richland Hills City Hall Pre-Council Chambers 7301 Northeast Loop 820 North Richland Hills, TX 76180 Monday, December 8, 2008 5:45 P.M. A.1 Discuss Items from Regular City Council Meeting A.2 IR 2008-129 Discuss Cities Aggregation Power Project Long Term Power Contract (30 Minutes) A.3 IR 2008-128 Discuss 2009 State Legislative Program (10 Minutes) A.4 1R 2008-126 Explanation of Dangerous Dog Investigation (15 minutes) A.5 IR 2008-131 Iron Horse 2008 End of Season Report (10 Minutes) A.6 Adjournment CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 12-8-2008 Presented by: Agenda No. A.1 Subject: Discuss Items from Regular City Council Meeting INFORMAL REPORT TO MAYOR AND CITY COUNCIL No. IR 2008-129 Date: November 8, 2008 ~'`: -~ ~~~~~`~ ~~~° Subject: Discuss Cities Aggregation Power Project Long-Term Power Contract At the October 13 Council Work Session, participation in the Cities Aggregation Power Project (CAPP) Long-Term Power Contract was discussed. The long-term contract involves buying capacity from a power company to gain electric cost savings over a 24- year period. As you may recall, CAPP has entered into a Power Purchase Agreement ("PPA") with Luminant Generation Company LLC, Big Brown Power Company, LLC and Oak Grove Management Company, LLC (collectively, "Luminant") for approximately 150 MW of base load power from seven different units over a 24-year period. The source of the capacity commitment and energy will be provided from 7 units at three different locations with equal percentage energy from each unit. Two of the seven units are under construction and will incorporate best available technology. The five remaining units will be upgraded environmentally with no adverse impact on contract price. CAPP will hold a first lien position on all generating assets (nuclear, gas and coal) on an equal basis with other creditors. The long term contract will allow for additional investment by Luminant in lignite coal burning facilities. CAPP has entered into the contract on behalf of all CAPP members and South Texas Aggregation Project ("STAP") members that are willing to be allocated a portion of approximately 150 MW of power. This amount of power equals about 60% of participating members' power needs for 2009. The portion of the 150 MW allocated to each city will be based on the members' percentage of energy needs compared to the overall energy needs of participating cities. Since the PPA will cover about 60% of the cities power needs, the remaining 40% of power needs will be covered by a "wrap" contract. CAPP will issue bonds to raise the capital necessary for the prepayment of three-fifths of the total contract price of the PPA. The prepayment amount will be between $400 million and $525 million. The bonds will be backed by the individual cities property taxes via a Member Contract for each participating CAPP member. The monthly amount paid for electricity will include a debt service payment as well as an energy consumption component. ISSUED BY THE CITY MANAGER NORTH RICHLAND HILLS, TEXAS ~ At the time this item was previously discussed with Council, it was estimated that savings for North Richland Hills would be almost $192,000 in 2009 if we participated in the PPA. This savings would be the result of natural gas prices being higher than the amounts we would pay under the long-term contract. Since this was last discussed with Council, natural gas prices have dropped dramatically. CAPP was able to lock in a five year contract with FP&L with an average price of 7.665 cents/kWh. This is significantly lower than original estimates. As a result, the estimated savings previously discussed with Council are not there. It would actually cost the City more money to participate in the PPA for the first five years of the 24-year contract. In addition to the drop in gas prices, the bond market has also experienced dramatic changes. Credit is not very easy to come by and it could be that the market will not be favorable when it comes time to issue the debt associated with this long-term contract. However, CAPP believes the benefits of participating in the long-term contract are still there. Below are the reasons given by CAPP as to why the long-term contract still makes sense: • The recent collapse in electric prices is attributable to a global recession and the associated slack in demand for natural gas. But if a trend line were drawn through the volatility in daily prices for natural gas, the line is headed upward. • Governmental sources have not backed off forecasts for energy prices that were prepared earlier this year before the recession was obvious. • The pressure on the new federal administration to do something to transition from sources of power that pollute to clean energy will require near term substantial investment in gas fired generation which can be added to the grid within 18-36 months as opposed to new coal or nuclear construction that may take a decade or longer to bring on line. • The need to add clean sources of power will be complicated by the more pressing need to add new generation quickly. Texas will face a generation capacity shortage within five to ten years. As demand potentially outstrips supply in Texas and as the demand for natural gas increases, prices for electricity that were experienced during the Summer of 2008, in the 13 cent to 16 cent range, will again dominate ERCOT. • Price volatility and an inability to predict prices will return, making governmental financial planners and budgeters desire long-term, fixed energy prices. We already know that participating in the PPA over the next eve years will not result in any savings to the City. It will actually cost about $182,000 more to participate than not. Beyond five years is purely speculation as we do not know what gas prices will be at that time. Below are some pros and risks of participating in the long-term contract. Pros • Presents an opportunity for savings in the future on electrical costs • Provides for cost predictability and stability during budget process • Savings for CAPP cities over a 24-year contract period, assuming gas prices rise to their previous levels • CAPP's aggregation allows for joint purchasing from the wholesale market however, aggregation of power with CAPP is an option whether or not we participate in the PPA. Risks • Bankruptcy of Seller • Governmental assessments on emissions of greenhouse gases • Early termination of the PPA that leaves CAPP owing more than what assets are worth • Legislatively mandated changes to the energy market structure • Restructuring or refinancing by Seller that leaves CAPP with collateral of lesser value • Deliberate non-delivery by Seller of contracted power such that payment of liquidated damages to CAPP for replacement energy potentially exceeds the cap on damages provided in the PPA forcing CAPP to declare early termination of the PPA • Failure by one or more participating members to appropriate or pay amounts owed for power delivered under the PPA forcing Seller to declare CAPP in default and terminate the transaction • Technological advancements/availability of inexpensive natural gas Council consensus at the October 13 Work Session was for Staff to bring this item back for discussion closer to the date a decision needed to be made. The deadline for a decision is December 17. It looks like about 40 cities and government agencies are planning on participating in the long-term contract. This is out of over 140 organizations that are eligible to participate. Some of the large cities CAPP had hoped to sign up for this are not going to do so. The largest Cities in our area to sign up are Arlington and Grand Prairie. Other cities in North Texas that have signed up are Addison, Benbrook, Cedar Hill, Colleyville, Duncanville, Everman, Forest Hill, Sherman, Springtown, Terrell and The Colony. Due to the economy, market conditions and the unknowns about what savings will be achieved, Staff recommends that the City of North Richland Hills not participate in the long-term contract. As previously mentioned, there is now a cost to participate in the PPA over the next five years instead of the previously anticipated savings. Although savings might be achieved beyond five years, there is no guarantee of that savings. The number of years that the City would be indebted - 24 years - is exceedingly long. A number of changes in economy, markets, technologies, etc. could occur during that time that would provide cost savings for us that we would not be able to achieve because we were locked into along-term contract. Additionally, Staff is not comfortable using the City's property tax revenues to back this debt, and using debt capacity that could be used toward other projects. If Council consensus is to participate in the long-term contract, an item has been included on the regular agenda that would approve the contract between the City and CAPP to participate in the long-term contract. We look forward to discussing this with you further at Monday night's meeting. Respectfully Submitted, Karen Bostic Assistant City Manager INFORMAL REPORT TO MAYOR AND CITY COUNCIL No. IR 2008-128 £'~ -; Date: December 8, 2008 ~`::~ Subject: Discuss 2009 State Legislative Program 3 The 81St Legislature for the State of Texas convenes on Tuesday, January 13, 2009. Pre-filing of legislation began on November 10, 2008. The session will run for 140 days, ending on Monday, June 1, 2009. As in the past, we will use guiding principles to determine positions on city related issues we expect to come forward during the legislative session. The guiding principles are: • Local control • A predictable and sufficient level of revenue • Opposition to unfunded mandates, and • Quality of life The purpose of this item is to seek input from Council regarding the priorities for the City's 2009 State legislative program. On Monday night I will review the attached draft legislative program and then seek Council input on modifications or additions you'd like to make to the City's legislative program. I will make the suggested modifications and bring this item back to Council for approval at the December 22 City Council meeting. Thank you for your input in developing this very important legislative program. Respectfully Submitted, Karen Bostic Assistant City Manager ISSUED BY THE CITY MANAGER NORTH RICHLAND HILLS, TEXAS ~ 1~i ~~H Cify of North Richland Hills 81t" Texas Legislative Session Priority Legislative Issues December 2008 GENERAL LEGISLATIVE POLICY STATEMENT OF PRESERVATION As a general policy, the City of North Richland Hills seeks to preserve its current authority to govern the city, its citizens, and its property. As such, the City opposes any legislation that is contrary to the health, safety, and welfare of its citizens. Specifically, the City opposes legislation that: • mandates increased costs without adequate compensation; • forces a loss of revenues or a decrease in public services; • diminishes the fundamental authority of the City; • restricts the city's ability to regulate the location of manufactured or modular housing; • erodes municipal authority over rights-of-way; • erodes the requirement for reasonable and fair compensation for use of public land; • erodes municipal control of water system; • imposes mandatory staffing levels for fire personnel; • requires unrealistic response times from fire personnel; • requires the city to allow employees time away from work; • exempts builders or developers from impact or drainage fees; or • imposes costly health care benefits. STATEMENT OF SUPPORT Likewise, the City supports any legislation that advances its authority to conduct the public's business or that improves the health, safety, and welfare of its citizens. The City supports legislation designed to responsibly and fairly increases revenues to pay for needed services or reduces the cost of providing services or maintaining a strong municipal workforce. Lastly, the City supports legislation that responsibly promotes and increases economic development or that is designed to improve the economy or create jobs. COALITIONS & PARTNERSHIPS When necessary, the City will form strategic partnerships with other cities in the Metroplex and the surrounding County Commissioner's courts. The City will also work the other local political subdivisions like the hospital district and the school district when commonalities exist. Additionally, the City will work in coordination with organizations such as the Texas Municipal League when their adopted positions are in line with the legislative objectives and goals of the City. The formation of strategic partnerships and coordinated efforts is intended to provide the City with a stronger presence in the legislative process. GOALS OF THE CITY'S LEGISLATIVE ACTIVITIES The fundamental goal of the City of North Richland Hills' legislative activities is to produce positive outcomes for our citizens. Numerous proposals in the Texas Legislature have the potential to seriously impact the ability of the City to carryout its overall mission. By taking a proactive role in the legislative process, the City is accepting its responsibility to ensure the citizens of North Richland Hills can continue to enjoy the quality of life they have come to expect and deserve. Throughout the history of Texas, our legislators have created laws and policies that greatly affect the administrative and political decisions of municipalities within the state. As the next Texas State legislative session begins, City officials of North Richland Hills would like to state our position on some of the issues we expect our state legislators to face in the 81 th Legislative Session. This paper is intended to provide our positions as well as a small portion of background and reasoning for such positions. The City of North Richland Hills uses four primary guiding principles in rendering its opinions on legislative issues. These are: 1. We will vigorously oppose any legislation that erodes the authority to govern our own local affairs. 2. Cities represent the level of government closest to the people. We bear primary responsibility for the provision of capital infrastructure and for ensuring our citizens' health and safety. Thus, we must be assured of a predictable and sufficient level of revenue. 3. We will oppose the imposition of any state mandates, which do not provide for a commensurate level of compensation. 4. We will support any legislation that increases the quality of life for our citizens. This includes legislation that will not only provide an equitable amount of revenue for our city, but also provide equitable services that will encourage pride and growth in our community. Other issues will arise as the legislative session progresses. If an issue arises that is not included herein, we urge the legislature to keep our guiding principles in mind as they make important decisions concerning our future. SUMMARY OF PRIORITY LEISLATII/~ ISSUES 't . Preserve Local Revenue Sources • Oppose legislation that interferes with the City's ability to finance existing levels of public services. Specifically, the City opposes artificial limits on property tax revenues and significant changes to the sales tax system such as altering sourcing and point of sale laws. 2. Preserve Representative Form of Government • Oppose legislation that fundamentally alters the representative form of government and replaces it with a direct democracy form of government that calls for decision making by public referendum. 3. Preserve an equal, Fair, and Uniform Property Tax System • Oppose legislation that creates inequities in the property appraisal system, specifically appraisal caps that benefit certain property owners at the expense of other citizens or appraisal caps that place a disproportionate burden on certain types of properties. • Support legislation that improves the appraisal process, improves citizens' access to the dispute process, and protects property owners with a uniform and equal appraisal system. 4. Preserve Locat Control of Land Use Planning and Zoning • Oppose legislation that erodes local land use authority by restricting the ability of cities to zone or rezone properties. • SUppOrt legislation that provides for more local oversight of natural gas pipelines. • Support legislation that would amend the exemptions identified in the Texas Government Code under Chapter 245.004 that provide cities more control when the determination of vested rights is being reviewed and would support an exemption of zoning entirely. 5. Authorize Cities to Finance a Regional Commuter Rail System • Seek passage of legislation that authorizes cities in the DFW Metroplex to finance the creation of a regional commuter rail system with reliable sources of revenue. C. Municipal 'Water Main breaks and the Discharge of Treated 11U`ater • Support legislation that exempts treated water discharges from Texas Commission on Environmental Quality (TCEQ) enforcement actions. ?. Multi-City Participation in Local Re-Development efforts • Seek passage of legislation that authorizes a process for multiple cities to participate in the creation of public improvement district (PID) or a tax increment finance district (TIF) that crosses city limits. S. Road l~laintenance Funds • Support legislation that authorizes additional funding options to repair local roads damaged by heavy trucks. 9. Collection of Delinquent Fines • Support legislation that streamlines the current process of collecting delinquent fine amounts from liable parties or creates additional collection methods. 'I Q. Improve Public Park system • Support legislation that provides additional funding for municipal public park systems. B~CCCRt~UIVD C)F P'R1~7RIT'~( LEGISLATIVE ISSUES 1. Preserve focal Revenue Sources Cities are responsible for providing services that allow residents to feel safe, secure and appreciative of their quality of life. Service level demands do not decrease when times are bad, they often increase. There are already challenges in providing services as the result of flattening appraisal values and sales tax revenue losses. Cities need to have a reliable source of revenue available to them to fund the services their residents demand. Efforts to further diminish or reduce funding options for municipal services should be opposed. 2. Preserve Representative Form of Government Past legislative sessions have seen bills introduced that would require public referendum for many decisions that are currently made by City Council consensus. This type of "direct democracy" only allows for the loudest voices to be heard and does not govern to the true majority. City Council members are in contact with residents on a daily basis and are well aware of the will of the people. Requiring elections can not only slow down the decision making process it unnecessarily adds costs to already strained local government budgets. 3. Preserve an Equal, Fair, and Uniforr~n Property Ta~c System Property tax caps benefit homes that are rapidly rising in value which generally means a wealthier homeowner enjoys the greatest appreciation in value and therefore benefits most from appraisal caps. In addition, property tax caps that apply only to residential property essentially raise taxes on business. Such proposed caps can also recreate disparity in appraisal values and taxes in a neighborhood where new construction could be appraised for more than a house next door due to the timing of construction. Further, property tax caps ignore the differences between Texas cities. Cities have varied ways of paying for the services provided to citizens. While caps hurt all property taxing cities, they are especially hard on cities that have little or no sales tax base. 4. Preserve Local Control of Land Use Planning and Zoning Zoning regulation is an important and historic tool cities use to protect the health and safety of its residents. It is imperative that cities retain the right to zone parcels of land within their city limits. In addition, cities have the most direct knowledge of their localities and can best determine the safest local conditions on where gas pipelines can be placed. ~. ~4uthorize Cities to Finance a Regional Commuter Rail System Traffic is getting worse in North Texas as more residents arrive daily to an already overburdened system. A unified regional transportation plan that includes different modes of travel is needed. Currently many cities cannot participate in alternative transportation because of financing restrictions. New funding sources for alternative transportation such as rail must be created to help alleviate the burden that highways alone cannot fix. 6. I1Ilunicipal water l~llain breaks and the Discharge of Treafied water Cities currently treat the water they discharge back into nature. Treated water must already meet strict quality standards. It is unfair to hold treated water to the same standards as industry discharges. This creates an undo hardship on the consumer as they must not only pay for the treatment but the regulation costs as well. 7. Multi-city Participation in Local Re-Developmenfi Efforts Current state law prohibits neighboring cities from participating in joint tax increment financing districts. Legislation is needed to allow cities with contiguous city limits along major redevelopment corridors to participate in joint tax increment financing districts in order to coordinate public improvements and revitalize redevelopment corridors. 8. Road Maintenance Funds Cities need a mechanism for repairing roadways damaged by heavy trucks that does not place an additional burden on residents. The excess damage done to local roads should be paid for by those doing the damage -heavy trucks. A fee assessed on the trucking industry to pay for wear and tear on roadways from their heavy trucks would mean the cost of additional repairs needed because of the trucks would not be passed on to residents. ~. Collection of Delinquent I`ines Cities with a population of less than 100,000 are currently required to use third party to collect delinquent fines. It would be more efficient and cost effective if all cities, with no population restriction, could collect delinquent fines. 10. Improve Puk~Iic Park System Parks greatly enhance the quality of life for residents. Most park systems are funded from property and sales taxes which are a level if not shrinking revenue source. Cities need to assure that park funding is available in the future. Participation of park system improvements with State funding is a reasonable way to provide public parks for all citizens regardless of where they reside. CONTACTS City of North Richland Hills 7301 NE Loop 820 P. O. Box 820609 North Richland Hills, Texas 76180 (817) 427-6000 Fax: (817) 427-6016 htt~:f/~nnnrw. n rhtx. com Citv Manaaer's Office Larry J. Cunningham Jared Miller City Manager Assistant City Manager (817) 427-6007 (817) 427-6006 Email: Icunninghamnrhtx.com Email: ~miller~"'aa nrhtx.com Karen Bostic ** Jimmy Perdue Assistant City Manager Assistant City Manager (817) 427-6005 (817) 427-6009 Email: kbostic~"?a`nrhtx.com Email: ,~perdue~a.nrhtx.com Mike Curtis Managing Director (817) 427-6401 Email: mcurtis c(x~.nrhtx.com Mayor and City Council (817) 427-6061 Oscar Trevino, Mayor Scott Turnage, Mayor Pro Tem John H. Lewis -Place 1 Ken Sapp -Place 2 Suzy Compton. -Place 3 Tim Barth -Place 4 David Whitson -Place 5 Tim Welch -Place 7 ** Karen Bostic is the primary legislative contact for North Richland Hills INFORMAL REPORT TO MAYOR AND CITY COUNCIL No. IR 2008-126 x Date: December 9, 2008 ~:~~~ Subject: Explanation of Dangerous Dog Investigation t We have received several inquiries about the process we use to investigate and make a determination about a dangerous dog. This information is intended to aid the City Council in understanding the process and afford you the opportunity to ask any questions about the steps we take to protect our community, Many citizens within our city are pet owners. Occasionally we receive reports of unrestrained animals that may have charged a person or even inflict injuries. The City of North Richland Hills Humane Division takes these incidents very seriously and investigates all bite reports according to State Law. In a case where an animal was seriously injured or killed, the dog would not need to be quarantined for rabies observation. But if the animal was at large during the incident, the officer can impound the dog for safety reasons. At that point an investigation into the incident would begin. If injuries were inflicted to a human, the dog would need to be quarantined for 240 hours for rabies observation and an investigation would begin. Bite Investigation: The officer would gather the following information during the investigation: - Witness Statements - Photos of the injuries - Was the dog properly restrained? - Was the dog or their owners being threatened? - What is the dog/pet owner's prior history? - Would a reasonable person believe the dog was going to physically harm them? If the injuries are minor and there is no other bite history on the animal, typically staff does not pursue a dangerous dog determination. ISSUED BY THE CITY MANAGER NORTH RICHLAND HILLS, TEXAS ~ If staff feels the evidence is questionable to pursue a dangerous dog determination but the person who was bitten insists on action being taken, the file is sent to the city prosecutor for his input prior to closing the file. If an investigation finds sufficient evidence for a dangerous dog determination, the evidence would be presented to the Humane Division Supervisor for review and forwarded to the Neighborhood Services Director for a ruling. The director will look at all the facts and consult staff/prosecutor, as needed. Method & Requirements for a Dangerous Dop Ruling: A dangerous dog is defined in Ch. 14, Art. VII, Sec. 14-207 as: 1. Any dog which, when unprovoked, chases or approaches a person upon the streets, sidewalks, or any public or private property in an apparent attitude of attack such that the person reasonably believes that the animal will cause physical injury to the person; 2. Any dog that commits an unprovoked act in a place other than an enclosure in which the dog was being kept and that was reasonably certain to prevent the dog from leaving the enclosure on its own and the act causes a person to reasonably believe that the dog will attack and cause bodily injury to that person; 3. Any animal that has killed or seriously injured or caused to be seriously injured a domestic animal or person, without provocation while off the owner's property. Should the director deem the dog dangerous, the owner has a choice to 1) accept the determination and comply with the restrictions of having a dangerous dog; or, 2) the owner can surrender the dog; or, 3) the owner can appeal the determination and the case would be brought before a judge at Municipal Court. Should a dog be found to be dangerous, the following requirements must be met and inspected by the Humane Division prior to the animal being released back to its owner: 1. Proof of $100,000 home owners liability insurance 2. Dog current on vaccinations 3. Dog neutered and microchipped 4. At least two signs posted to warn of a dangerous dog on property 5. Proper enclosure to consist of a top on the kennel and a concrete floor to prevent escape from the enclosure 6. Proper shelter in the enclosure 7. The dog must wear a dangerous dog tag and collar 8. If the dog is removed from its enclosure, then it must be wearing a muzzle that will prevent it from biting but not interfere with it being able to breathe and see. 9. The Humane Division must be notified if the dog passes away or is removed from the City (the Humane Division will contact the animal control in the City they are moving to inform them) 10. The Humane Division will inspect the premises annually If the dog escapes from its enclosure or there is any violation of this ordinance, then the Humane Division would seize the dog and the dog would not be returned to the pet owners. In fiscal year 2007-2008, the Humane Division investigated 210 reports of animal bites/scratches inflicted to a person(s). One hundred seventeen (117) of these involved a dog and there were only five (5) dogs involved in dangerous dog investigations. One (1) pet owner accepted the determination and complied with the requirements, three (3) dogs were surrendered to the Center and one (1) was challenged in court and the judge made sufficient arrangements with the family to retain the dog. There are three (3) dogs currently registered in our city as Dangerous Dogs. In summary, each dog bite case is investigated to the fullest and when questions arise from the cases, staff works with the prosecutor on providing enough evidence to pursue a case. The process is in place to allow a dog owner to keep the animal under strict guidelines and if those guidelines are not being met, the animal is required to be surrendered to us or we obtain a seizure warrant and get possession of the animal. Staff feels this is an effective process and also feels that the current ordinance is strong enough to address these situations. Respectfully Submitted, Chun Mezger Humane Division Supervisor INFORMAL REPORT TO MAYOR AND CITY COUNCIL No. IR 2008-131 ,~ Date: December 8, 2008 ,F~ y ~.. ~~"~`Y~ '~ ` Subject: Iron Horse 2008 End of Season Report ,t. Iron Horse Golf Course has had a very positive year. The Fort Worth Star Telegram announced its 2008 Reader's Choice Awards and Iron Horse tied for the Best Public Golf Course. Iron Horse also had a banner year with regard to the number of rounds played at 56,192. Golf Course Revenues: Iron Horse had some big wins this past year, especially in the area of rounds-played. Actual rounds played exceeded budget by 7.13%, or 3,742 rounds. Ideal weather throughout the majority of the year, an aggressive a-mail campaign, a newly introduced EAGLE Card offering, and increased redemption of our Player Loyalty Program points all contributed to this increase in player participation. The increase in rounds played was paired with only a marginal increase in green fee revenue, which exceeded budget by 0.48%, or $6,918. The overall revenue per round was lower than anticipated primarily due to a shift in player "mix". Players are making increased use of discount and reduced rate opportunities. Off-peak rounds increased 61 %. Twilight rounds increased 26%. The number of 9-hole rounds played was increased 87%, however, this is the second full year to offer a 9-hole rate, which made projecting usage a challenge. Resident rounds, which are offered at a reduced rate, increased 17%. These increases in discount rounds were coupled with a reduction in the use of prime and full price rounds, which decreased by 23% and 11 % respectively. Also, an increase in competition for Event Rounds -Corporations, Charities and other fundraisers has required some aggressive pricing in order to secure some of these events. We also had several events this past year cut back on residual expenses and others eliminate them altogether. Golf cart rental revenue increased 8.08% this year, which is a function of the high number of rounds played. Due to substantial distance between some of the holes, players utilize the carts to avoid walking, making cart rental a very stable and predictable revenue source. ISSUED BY THE CITY MANAGER NORTH RICHLAND HILLS, TEXAS ~ Food and beverage revenue was down 16.2% in the clubhouse and down 2.2% from the beverage carts. Food and beverage operations present one of the most substantial opportunities to increase revenues at Iron Horse. One goal for FY 2009 will be to assess the clubhouse operations with regard to efficiency and customer service, with the objective of making the clubhouse a dining destination for the general public in addition to the golfing customer. Total revenues were 1.29%, or $29,847, less than budgeted. On the Expense side, Iron Horse managed to achieve combined savings of $62,003, vs. projections for the year. Some of the larger savings include: • Supplies - $7,500, Range Balls - $4,100, Food/Beverage Uniforms-Laundry - $3,600, • Course Maintenance - $14,220 overall due mainly to savings in Chemicals and Fertilizer, • General/Administrative - $41,000 in savings, due partially to Insurance and Workman's Comp savings, • Clubhouse savings of $34,000 due mainly to savings in electric charges (mild weather throughout much of the year). Food and beverage expenses exceeded budget by 5.2%, which highlights this operation as a main opportunity for efficiency and improvement in the future. Total expenditures were 3.35% or $62,003 less than budgeted. Projects/Programs completed at Iron Horse in 2008 include: • Leasing of the smaller Loop 820 Billboards, resulting in revenues of $12,000, • Re-grading and sodding of a large washout area on Hole #15, resulting in improved playing conditions and eliminating dangerous drop-offs on the cart path, • Added an additional target-green on the Practice Range, • Added a retaining wall in the pond on the left side of #8 green, resulting in improved playability, • Installed a 3-Ton HVAC Unit for the Caboose Snackbar, allowing the snackbar to remain open longer during the Summer months, • On holes 12 and 13, filled-in, leveled and re-sodded fairway areas adjacent to Singing Hills Creek, for improved drainage and playability, • Initiated and developed an Iron Horse Women's Golf Association, which was begun at ground- zero and has grown to 40-plus members, who have played in excess of 700 rounds this year. • While not quite completed, the installation of the Iron Horse drainage improvement project is nearing completion. This is a CIP project being implemented by the Public Works Department. This project consists of the engineering and installation of gabion walls to prevent erosion and improve drainage through the course. It will also prevent the loss of improvements like cart paths and playable areas. Contingency Plan /Adjustments: While we are anticipating a successful year in 2009, we need to have some alternative business practices and adjustments planned to allow for any potential challenges associated with current economic trends. An unstable or volatile economy could definitely have a major impact on rounds and revenues. The current staff at Iron Horse has faced these situations in the past is prepared for abnormal circumstances if they happen to occur. A recent exercise performed by each of the Eagle Golf facilities involved planning for these very situations and how to best handle them. We are well aware of weather- related situations that occur throughout the year, but these are typically short-term and are quickly followed by a sort of "make up" period. Our planning is related more to long- term situations. We currently have 5 (five) staff members who are "salaried" employees and each of these individuals is accustomed to long work weeks and being on-duty for extended hours on any given day. During slower times, most of the more routine tasks we perform each day can be handled by these individuals, thus eliminating some payroll expenses. We are also capable of crossover coverage into other areas of the facility. For instance, all shop employees are TABC Certified and quite capable of making rotations around the course in the Beverage Cart, to make certain that our customers are taken care of during their visit. It is also common for the Course Manager or Golf Assistants to arrive early and pull out the appropriate number of golf cars needed for the day, or set up the practice range in preparation for the day's business. We have also researched and analyzed previous year's activities by season and have discovered definite patterns related to certain times of the year. During the winter months, the golf course does not typically get busy until 10:OOam, when the temperature begins to climb. Since the early morning hours are slower, a salaried staff member can arrive at the course early, pull out carts, prepare coffee and answer the phones until it becomes necessary to bring in additional employees. We have also concluded that, since afrost-delay is likely in the mornings during these winter months, one way to get golfers on the course quicker once the frost clears, is to mow the greens and change the cups in the afternoons. This will allow us to tee golfers off 20 - 30 minutes earlier on these mornings. As part of Eagle Golf Management, we have 8 (eight) area facilities where the staffs at each are always willing to lend a hand to another Eagle course. This allows us to "borrow" employees from time-to-time, thus enabling us to get through busier times without additional payroll expenses. Also, Eagle management is constantly searching for better terms and pricing on supplies, food, drinks, insurance and any other items or services that we use on a regular basis. Some of the programs that we have in place at Iron Horse will provide income and activity even during the slower times: • Our Player Development Program is an affordable way for golfers to be able to practice at any time and play discounted golf during our slower times. This program generated over $150,000 last year on monthly dues alone. Coupled with the fees the PDP members to play, this program generated over $220,000 in revenue this past year. • The 2009 version of The Eagle Card will generate approximately $100,000 in revenue for Iron Horse, spread out over anine-month period. This card is being sold through Eagle on the Internet and creates no effort on our part, other than informing customers of the benefits. • Our Golfer's Rewards Program helps to create repeat customers, by offering "points" for paid rounds played and enabling participants to earn free golf, after spending appropriate amounts on money at Iron Horse. • Our partnership with Cybergolf allows us to send a-mails for announcements and promotions to thousands of golfers at any given time. We utilize this system to inform golfers about specials or upcoming events and it helps to fill slots that would have otherwise gone unused. We feel that we are set and poised for an exceptional year at Iron Horse and look forward to the coming season and our continued relationship with The City of North Richland Hills, its residents and all of our golfing customers. Respectfully Submitted, Jay Clements General Manager Iron Horse Golf Course CITY OF NORTH R/CHLAND HILLS Department: City Secretary Presented by: Council Meeting Date: 12-8-2008 Agenda No. A.6 Subject: Adjournment City of North Richland Hills City Council Regular Meeting Agenda North Richland Hills City Hall Council Chambers 7301 Northeast Loop 820 North Richland Hills, TX 76180 Monday, December 8, 2008 7:00 P.M. A.0 Call to Order -Mayor Trevino A.1 Invocation -Mayor Pro Tem Turnage A.2 Pledge -Mayor Pro Tem Turnage A.3 Special Presentation(s) and Recognitions) - Proclamation for North Texas Literacy Awareness Day presented by Councilman Barth A.4 Special Presentation(s) and Recognition s) - 2008 United Way Campaign presented by Councilman Lewis A.5 Citizens Presentation An opportunity for citizens to address the City Council on matters which are not scheduled for consideration by the City Council or another City Board or Commission at a later date. In order to address the Council, please complete a Public Meeting Appearance Card and present it to the City Secretary prior to the start of the Council meeting. The Texas Open Meetings Act prohibits deliberation by the Council of any subject which is not on the posted agenda, therefore the Council will not be able to discuss or take action on items brought up during the citizens presentation. A.6 Removal of Item(s) from Consent Agenda B.0 CONSIDER APPROVAL OF CONSENT AGENDA ITEMS All consent agenda items listed below are considered to be routine items deemed to require little or no deliberation by the City Council and will be voted on in one motion. There will be no separate discussion of these items unless a Council Member so requests, in which event the item will be removed from the Consent Agenda and considered. B.1 Approval of Minutes of November 24, 2008 City Council Meeting B.2 FP 2008-07 Consideration of a Request from Roger & A. Jenisse Linebarger to Approve a Final Plat of Lot 1, Block 2, Park Oaks Addition (Located at 6432 Harmonson Road - 0.967 acres) B.3 RP 2008-07 Consideration of a RecLuest from North Richland Hills Baptist Church to Approve a Replat of five lots in the Parchman Addition to Lot 1-R1, Parchman Addition and a Street Use License Aqreement (Located at Boulevard 26 and Vance Road - 10.07 acres) C.0 PUBLIC HEARINGS C.1 ZC 2008-05 Public Hearing and Consideration of a Request from Terry Browning to Approve a Zoning Change of Tract 2S2A, Abstract 1520 from "U" Institutional, to "R-1" Single Family Residential (Located at 6025 Riviera Drive - 0.277 acres) -Ordinance No. 3032 D.0 PLANNING AND DEVELOPMENT Items to follow do not require a public hearing. No items for this category. E.0 PUBLIC WORKS No items for this category. F.0 GENERAL ITEMS F.1 GN 2008-118 Approve an Economic Development Aqreement with Texas Investors, LLC for 5142 and 5198 Rufe Snow Dr. -Resolution No. 2008-061 F.2 GN 2008-119 Approve an Electric Power Contract with Cities Aggregation Power Project, Inc. -Ordinance No. 3034 F.3 GN 2008-120 Revise the 2008/09 Operating Budget for Repairs to the Ace Park Mural G.0 EXECUTIVE SESSION ITEMS No items for this category. H.0 INFORMATION AND REPORTS H.1 Announcements -Councilwoman Compton H.2 Adjournment CITY OF NORTH R/CHLAND HILLS Department: City Secretary Presented by: Council Meeting Date: 12-8-2008 Agenda No. A.0 Subject: Call to Order -Mayor Trevino CITY OF NORTH RICHLAND HILLS Department: City Secretary Council Meeting Date: 12-8-2008 Presented by: Mayor Pro Tem Scott Turnage Agenda No. A.1 Subject: Invocation -Mayor Pro Tem Turnage CITY OF NORTH R/CHLAND HILLS Department: City Secretary Council Meeting Date: 12-8-2008 Presented by: Mayor Pro Tem Scott Turnage Agenda No. A.2 Subject: Pledge -Mayor Pro Tem Turnage CITY OF NORTH R/CHLAND HILLS Department: Library Presented by: Councilman Tim Barth Council Meeting Date: 12-8-2008 Agenda No. A.3 Subject: Special Presentation(s) and Recognitions) -Proclamation for North Texas Literacy Awareness Day presented by Councilman Barth The widespread problem of adult illiteracy has a serious impact on every community in North Texas. In order to address the issue, representatives from governments across the region's many cities, including North Richland Hills, will meet together on December 15, 2008 for the Second Annual North Texas Literacy Summit. The summit is designed to raise awareness of the illiteracy problem in the region, and to identify strategies and programs that can be effective in helping to eradicate adult illiteracy. The attached proclamation, declaring the day of the North Texas Literacy Summit, December 15, 2008, as "North Texas Literacy Awareness Day", will help raise public awareness of this important issue. PROCLAMATION WHEREAS, illiteracy impacts every facet of society including the home, family, workplace, community, and region with significant economic implications at every level; and WHEREAS, studies show that 93 million adults out of a total adult population of approximately 221 million in the United States struggle to read a bus schedule; and WHEREAS, nationally, 43 percent of illiterate adults live in poverty and 65 percent of the children of illiterate adults become illiterate adults themselves; and WHEREAS, out of a 5,487,000 total population in Dallas, Tarrant, Collin and Denton counties, 12.6 % of the people have difficulty reading a newspaper; and WHEREAS, of the 499,734 people, 47.6% have no high school degree; 66.1 have an income of less than $20 thousand annually; and WHEREAS, continued high rates of illiteracy will mean the skilled labor force of Texas will be less educated, less skilled, earn lower salaries and wages, and be in greater need of labor force training with substantial additional costs unless sweeping, systemic change is made now in the areas of literacy and education. WHEREAS, the 2008 North Texas Literacy Summit, hosted by the North Texas Future Fund, will launch a regional literacy program that addresses the growing literacy needs in North Texas and incorporates sufficient vision and support to ensure a sustainable, regional literacy program. WHEREAS, the City of North Richland Hills recognizes the importance of the regional effort to reduce illiteracy in North Texas and supports this regional literacy initiative. NOW, THEREFORE, BE IT RESOLVED, that I Oscar Trevino, Mayor of the City of North Richland Hills do hereby proclaim December 15, 2008 as "NORTH TEXAS LITERACY AWARENESS DAY" in the City of North Richland Hills. IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the City of North Richland Hills to be affixed this the 8th day of December 2008. Oscar Trevino, Mayor CITY OF NORTH R/CHLAND HILLS Department: Communications Presented by: James Edwards Council Meeting Date: 12-8-2008 Agenda No. A.4 Subject: Special Presentation(s) and Recognitions) - 2008 United Way Campaign presented by Councilman Lewis The United Way of Tarrant County is dedicated to helping the citizens of Tarrant County through programs that focus on: • Child abuse and neglect • Early learning and development • Childhood obesity • Adult literacy • Senior isolation • Homelessness Employees of the City of North Richland Hills support the United Way's efforts and annually conduct a campaign to raise funds for the United Way. This year, the United Way Committee held several different functions to raise money for the campaign including akick-off lunch, raffle, silent auction, penny wars and pumpkin grams. With the money raised from these events and the generosity of employee pledge forms, we exceeded our goal of $33,000 and raised a total of $40,369.70. During the December 8, 2008 City Council Meeting Ms. Ebony Stevenson from the Untied Way will be present to accept a $40,369.70 check from the City's 2008 United Way Campaign. We would also like to thank our city employees and the Employee Campaign Committee for their hard work as well as their generosity in giving to this important effort that helps our entire community. CITY OF NORTH R/CHLAND HILLS Department: City Secretary Council Meeting Date: 12-8-2008 Presented by: Agenda No. A.5 Subject: Citizens Presentation An opportunity for citizens to address the City Council on matters which are not scheduled for consideration by the City Council or another City Board or Commission at a later date. In order to address the Council, please complete a Public Meeting Appearance Card and present it to the City Secretary prior to the start of the Council meeting. The Texas Open Meetings Act prohibits deliberation by the Council of any subject which is not on the posted agenda, therefore the Council will not be able to discuss or take action on items brought up during the citizens presentation. CITY OF NORTH R/CHLAND HILLS Department: City Secretary Presented by: Council Meeting Date: 12-8-2008 Agenda No. A.6 Subject: Removal of Item(s) from Consent Agenda CITY OF NORTH R/CHLAND HILLS Department: City Secretary Council Meeting Date: 12-8-2008 Presented by: Agenda No. B.0 Subject: CONSIDER APPROVAL OF CONSENT AGENDA ITEMS All consent agenda items listed below are considered to be routine items deemed to require little or no deliberation by the City Council and will be voted on in one motion. There will be no separate discussion of these items unless a Council Member so requests, in which event the item will be removed from the Consent Agenda and considered. CITY OF NORTH R/CHLAND HILLS Department: City Secretary Council Meeting Date: 12-8-2008 Presented by: Agenda No. B.1 Subject: Approval of Minutes of November 24, 2008 City Council Meeting Recommendation: To approve the minutes of the November 24, 2008 City Council meeting. MINUTES OF THE WORK SESSION AND REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, HELD IN THE CITY HALL, 7301 NORTHEAST LOOP 820 -NOVEMBER 24, 2008 WORK SESSION The City Council of the City of North Richland Hills, Texas met in work session on the 28tH day of November, 2008 at 5:30 p.m. in the Council Work Room prior to the 7:00 p.m. regular Council meeting. Present: Oscar Trevino Mayor Scott Turnage Mayor Pro Tem, Council Place 6 John Lewis Council, Place 1 Ken Sapp Council, Place 2 Suzy Compton Council Place 3 Tim Barth Council, Place 4 David Whitson Council, Place 5 Tim Welch Council, Place 7 Staff Members: Larry J. Cunningham City Manager Karen Bostic Assistant City Manager Jimmy Perdue Assistant City Manager Mike Curtis Managing Director Patricia Hutson City Secretary George Staples City Attorney Mary Peters Public Information Officer Elizabeth Reining Assistant to City Manager John Pitstick Director of Planning & Development Larry Koonce Finance Director Andy Jones Fire Chief Craig Hulse Economic Development Director Dave Pendley Building Official Eric Wilhite Chief Planner Greg VanNieuwenhuize Assistant Public Works Director Sean Hughes Emergency Management Coordinator Absent: Jared Miller Assistant City Manager Call to Order Mayor Trevino called the work session to order at 5:30 p.m. A.1 Discuss Items from Regular City Council Meeting There were no questions. A.2 IR 2008-122 Review and Update of Draft Environmental Impact Statement for Southwest to Northeast Rail Corridor Plan Mr. Mike Curtis, Managing Director, presented an overview of the draft environmental impact statement for the Southwest to Northeast Rail Corridor project. The environmental impact document has four primary purposes - 1) required for federal funding; 2) discloses the impact of the project; 3) improves decision-making; and 4) serves as a means for public comment. Public comments are due to the "T" on December 15. With the consensus of Council, the City will be submitting its comments and recommendations to the "T". Council was advised the environmental impact document identified three alternatives for providing transportation services in the southwest to northeast corridor - a no-build alternative, express bus service and regional rail along the Cotton Belt rail line. The preferred option is the regional rail, which will carry traffic from southwest Fort Worth through Downtown Fort Worth to the northern part of DFW Airport. The environmental document addressed several environmental issues. The only significant environmental impact for North Richland Hills is the train noise with horns being the primary source. Mr. Curtis discussed the noise impact to North Richland Hills and advised that the "T" is proposing to mitigate all severe impacts. Based on the environmental document, North Richland Hills has 269 properties with noise impacts with 164 being considered as severe and 105 as moderate. The "T" is proposing to mitigate all severe noise impacts and is indicating they will perform mitigation on all moderate impacts where the existing noise exposure exceeds 65 dBA. The "T" is proposing in the environmental document two primary mitigation tools -quiet zones and noise walls where practical. The quiet zones consist of making improvements at the railroad crossings to prevent cars from bypassing the gates to minimize the length and distance the horn is required to be sounded. The City is proposing the following comments: 1) Appreciation to the "T" for including the City in the Study and identifying the Smithfield and Iron Horse stations; 2) Appreciation to the "T" for allowing input from NRH staff and City Council at numerous public meetings and providing specific planning efforts including rail station site development and market demand studies for the Iron Horse and Smithfield Stations; 3) Support for commuter rail along the Cotton Belt line to provide alternative transportation to relieve congested roadways and provide improved access to citizens and employees; 4) Support for the establishment of quiet zones and recommend that all properties impacted in North Richland Hills be included in the mitigation plan; and 5) encourage the placement of the Iron Horse platform to be located near the intersection of Iron Horse Boulevard and Boulder Drive to take advantage of a platform site that better allows for future transit oriented development. Councilman Barth questioned if the 65 dBA threshold was cumulative of all the potential sources or just the primary source. Staff advised the environmental document did not address his question, but staff will obtain the information and report back. Mayor Pro Tem Turnage questioned if it was known where the sound mitigation walls might be needed. Mr. Curtis advised that the "T" had not identified specific locations in the document, but had made a more general statement of what they are proposing. Mayor Trevino asked Council to support him in sending a letter to Jungus Jordan and Linda Koop, co-chairs of the Rail North Texas Group working to find a funding source for the project, thanking them for their time and commitment to the project. Mayor Trevino also asked Council to support a second letter to TxDOT and to the "T" requesting them to consider double tracking the rail that goes over the 820 bridge as part of the 820 expansion. Council concurred with Staff's recommended response to the SW2NE Rail Plan for the Environmental Document and with the two additional letters requested by the Mayor. A.3 IR 2008-123 Review of Citizens Survey Information and Comparative Data Ms. Mary Peters, Public Information Officer, advised the University of North Texas Survey Research Center has provided the City with a report comparing the City's most recent survey data with survey data from the DFW Metroplex, Tarrant County and Metroplex Suburbs. The findings of the report were reviewed with Council. The report found that North Richland Hills residents had higher favorable ratings for the following areas -Quality of Life, Police, Fire, Library, Parks, Recreation, Street Maintenance (non-residential), Recycling, and Animal Control. In response to questions from Council, Ms. Peters advised that the City's next survey would be conducted in the Fall of 2009 and that when comparing the City's most recent survey data with previous survey data, the numbers in the last survey were higher. A.4 IR 2008-124 Replacement Schedule of Fire Equipment Chief Andy Jones reviewed with Council the Fire Department's apparatus replacement schedule. Council was advised that because many factors influence the service life of fire apparatus equipment there is no national standard. Most fire departments in the area retire their front line service in 10 to 15 years. North Richland Hills retires its engines from front line service in 14 years and keeps them in reserve service for six more years. Plans are to retire the aerial ladder truck from front line service in 20 years and keep in reserve for five more years. Front line service for ambulances is six years with four years in reserve status. Chief Jones reviewed each of the replacement schedules used for future apparatus and small-wheeled vehicle acquisition and replacement. B.0 EXECUTIVE SESSION B.1 Executive Session: Pursuant to Section 551.071 Texas Government Code for Consultation with Attorney o~gation -City of Mesquite v PGK Contracting Inc. B.2 Executive Session: Pursuant to Section 551.072 Texas Government Code to Discuss Land Acquisition -Rufe Snow Drive B.3 Executive Session: Pursuant to Section 551.087 Texas Government Code to Discuss Potential Economic Development Incentives to Business Prospects in the Southeast and Midwest part of the City Mayor Trevino announced at 6:17 p.m. that the Council would adjourn into Executive Session pursuant to the provisions of Sections 551.071, 551.072 and 551.087 to consult with attorney on litigation regarding City of Mesquite v. PGK Contracting Inc, to discuss land acquisition in the area of Rufe Snow Drive and to discuss potential economic development incentives to business prospects in the southeast and midwest part of the City. C.0 Adjournment Mayor Trevino announced at 6:51 p.m. that the Council would adjourn to the regular Council meeting. REGULAR COUNCIL MEETING A.0 CALL TO ORDER Mayor Trevino called the meeting to order November 24, 2008 at 7:00 p.m. ROLL CALL Present: Oscar Trevino Scott Turnage John Lewis Ken Sapp Suzy Compton Tim Barth David Whitson Tim Welch Staff: Larry J. Cunningham Karen Bostic Mayor Mayor Pro Tem, Council Place 6 Council, Place 1 Council, Place 2 Council, Place 3 Council, Place 4 Council, Place 5 Council, Place 7 City Manager Assistant City Manager Jimmy Perdue Assistant City Manager Mike Curtis Managing Director Patricia Hutson City Secretary George Staples Attorney Absent: Jared Miller Assistant City Manager A.1 INVOCATION Councilman Barth gave the invocation. A.2 PLEDGE OF ALLEGIANCE Boy Scout Troop 310 led the pledge of allegiance. A.3 SPECIAL PRESENTATION(S) AND RECOGNITIONS) Special Presentation(s) and Recognitions) -Recognition of Police Department's Webber Seavey Award Jimmy Perdue, Assistant City Manager, recognized the Police Department for being selected as a finalist for the 2008 Webber Seavey Award. The Police Department's "Building Connections -Building Community" (BC2) Family Resource program was selected as one of the Top 25 Programs for the 2008 Webber Seavey Award. The BC2 program was recognized at the International Association of Chiefs of Police annual conference in November. The program is a collaborative project between the City, the school district and Tarrant County Youth Collaboration. Mr. Perdue and Councilwoman Compton presented the award to Sergeant Matt Clem, and Geny Court, Family Resource Coordinator. Mr. Perdue also recognized Tarrant County Youth Collaboration partner, Tacia Torres, who was not present. A.4 CITIZENS PRESENTATION None. Mayor Pro Tem Turnage recognized students from Dr. Hendrich's Texas Local Government Class at Tarrant County College. A.5 REMOVAL OF ITEM(S) FROM THE CONSENT AGENDA None. B.0 APPROVAL OF CONSENT AGENDA ITEMS ~PPR[~VF1~ B.1 APPROVAL OF MINUTES OF NOVEMBER 10, 2008 CITY COUNCIL MEETING B.2 PU 2008-031 AWARD BID 08-015 FOR DIGITAL IN-CAR VIDEO EQUIPMENT TO L-3 COMMUNICATIONS IN THE AMOUNT OF $350,126.00 B.3 PU 2008-033 APPROVE THE PURCHASE OF DATA STORAGE, BACKUP SOLUTION, WIRELESS HARDWARE AND INSTALLATION FOR THE POLICE DEPARTMENT MOBILE VIDEO SYSTEM (MVS) IN THE AMOUNT OF $93,265.57 B.4 GN 2008-115 AUTHORIZE THE CITY MANAGER TO SIGN STREET USE AGREEMENT FOR MEDIAN SIGNAGE IN THE DIAMOND LOCH SUBDIVISION ~OUNGILMAN WHITSON MOVEQ TO APPROVE THE CONSENT AGENDA. COUNCILMAN SAPP SECONDED THE MiOTION. MOTION TO APPROVE CARRIED 7-Q. PUBLIC HEARINGS C.1 GN 2008-114 PUBLIC HEARING BY THE CITY OF NORTH RICHLAND HILLS FOR PROPOSED AMENDMENTS TO THE PROJECT AND FINANCING PLANS FOR REINVESTMENT ZONE NUMBER 1 APPROVED Mayor Trevino opened the Public Hearing. Mr. Larry Koonce, Director of Finance, reviewed the history and background of the Tax Increment Finance (TIF) Number 1 district. Mr. John Pitstick, Director of Planning, presented the project plan and discussed the expansion plans for the district. The City has been working on plans to expand the boundaries from the existing 95 acres to 392 acres along the Boulevard 26 corridor. The proposed expansion includes $3.5 million for intersection improvements and the burial of utility lines along Boulevard 26. Concept drawings of the proposed improvements and the benefits of the proposed expansion were presented and discussed. Mr. Koonce presented the financing plan. The plan assumes 100% participation from all County entities and is a ten-year plan for the financing of the $3.5 million in public projects in the project plan. The City plans to issue certificates of obligation in the amount of $3.5 million that will be financed over the ten-year period. The TIF Board approved a resolution on November 6 recommending the expansion and approving the project and finance plans. Council was advised that Agenda Item C-2, Ordinance No. 3029 approves the expansion, finance and project plans and amends the 2008-09 Capital Projects Budget. Agenda Item C-3, Ordinance No. 3030, approves the actual TIF expansion including the metes and bounds. Mayor Trevino called for any one wishing to comment on the proposed amendments to the project and financing plans for Reinvestment Zone Number 1. There being no one wishing to speak Mayor Trevino closed the public hearing. C.2 GN 2008-116 CONSIDER ALL MATTERS INCIDENT AND RELATED TO APPROVING AND AUTHORIZING CERTAIN AMENDMENTS TO THE PROJECT PLAN AND REINVESTMENT ZONE FINANCING PLAN FOR REINVESTMENT ZONE NUMBER 1, CITY OF NORTH RICHLAND HILLS, INCLUDING THE ADOPTION OF ORDINANCE NO. 3029 AND AMENDING THE CITY OF NORTH RICHLAND HILLS FISCAL YEAR 2008-2009 CAPITAL PROJECTS BUDGET PERTAINING THERETO. (THIS ITEM IS NOT A PUBLIC HEARING BUT IS RELATED TO ITEM C.1) APPROVED The item was presented in conjunction with agenda item C-1. Mr. Koonce advised Agenda Item C-2 is to consider approval of the ordinance for the expansion finance plan and project plan and amends the Capital Projects Budget. MAYOR PRO TEM TURNAGE MOVED TO APPROVE ORDINANCE NO. 3029. COUNCILMAN WHITSON SECONDEQ THE MOTION. MOTION TO APPROVE CARRIED 7'-~. C.3 GN 2008-117 CONSIDER ALL MATTERS INCIDENT AND RELATED TO APPROVING AND AUTHORIZING THE EXPANSION OF REINVESTMENT ZONE NUMBER 1, CITY OF NORTH RICHLAND HILLS, INCLUDING THE ADOPTION OF ORDINANCE NO. 3030 PERTAINING THERETO (THIS IS NOT A PUBLIC HEARING BUT IS RELATED TO ITEM C.1) APPROVED The item was presented in conjunction with agenda item C-1. Mr. Koonce advised agenda item C-3 is to consider approval of ordinance approving the expansion and the metes and bounds of the expansion area. COUNCILMAN WHITSON' MOVED TO ORDINANCE NO. 3030. COUNCILMAN WELCH SECONDED THE MOTION. MOTION TO APPROVE CARRIED 7-0. PLANNING & DEVELOPMENT No items for this category. PUBLIC WORKS E.1 PW 2008-029 AWARD A PROFESSIONAL SERVICES AGREEMENT TO BAIRD, HAMPTON & BROWN IN THE AMOUNT OF $41,500.00 FOR THE WINTER PARK DRIVE AND AMUNDSON ROAD WATERLINE PROJECT APPROVED Mr. Greg VanNieuwenhuize, Assistant Public Works Director, presented the item. Item is to consider the award of a professional services agreement for the design of approximately 3,000 linear feet of water main along Winter Park and Newman Drive between Bridge Street and Emerald Hills Way and approximately 500 linear feet of water main along Amundson Road between Cardinal Lane and Mid-Cities Boulevard. Staff followed the City's policy for the procurement of professional services and is recommending the professional services agreement be awarded to Baird Hampton & Brown. COUNCILMAN LEWI'S MOVED TQ APPROVE PW 2008-029. COUNCILMAN EARTH SECONDED THE MOTION, MOTION TO APPROVE CARRIED 7-0. GENERAL ITEMS F.1 GN 2008-113 CONSIDER APPROVAL OF ORDINANCE AUTHORIZING THE APPOINTMENT OF CERTAIN PERSONS TO ENFORCE DISABLED PARKING REGULATIONS -ORDINANCE NO. 3033 APPROVED Mr. Jimmy Perdue, Assistant City Manager, presented the item. Item is to consider approval of an ordinance to allow Citizens on Patrol the ability to write Disabled Parking citations to violators. The Citizens on Patrol program was presented to Council in a previous work session. One of the activities authorized by State law is the issuance of citations for disabled parking violations. A city ordinance must be adopted to authorize the trained volunteers to enforce disabled parking regulations. Mr. Perdue advised that participants of the Citizens on Patrol program must be graduates of the North Richland Hills Citizen Police Academy and then be selected to complete the additional training. COUNCILMAN 1~ELCH MOVED TO APPROVE ORDINANCE NO. 3033,: COUNCILWOMAN COMPTON SECONDED THE MOTION, MOTION TO APPROVE CARRIED ~-0, EXECUTIVE SESSION ITEMS G.1 ACTION ON ANY ITEM DISCUSSED IN EXECUTIVE SESSION LISTED ON WORK SESSION AGENDA Item B.1 -City of Mesquite v. PGK Contracting Inc -Consider Joining in an Amicus Brief with other Cities in Support of the Position of Mesquite Attorney George Staples advised a request had been received from the City of Mesquite to join in an amicus brief in support of their position that cities cannot be sued for breach of an implied duty under recent amendments to the Local Government Code which establish jurisdiction for suits against cities for breach of certain contracts for goods and services. Attorney Staples recommended that Council authorize participation in the brief and pay $500 toward the cost of the brief. MAYOR PRO TEM TU'RNAG:E MOVED THAT THE. CITY OF NORTH' RICHLAND HILLS JOIN WITH OTHER CITIES IN AN AMICUS BRIEF IN SUPPORT OF THE POSITION OF THE CITY OF MESQUITE IN ITS APPEAL OF CITY Of MESQUITE V P'GK CONTRACTING INC AND THAT THE CITY OF NORTH RICHLAND HILLS PAY $500 TOWARD THE COST OF SUCH BRIEF. COUNCILMAN SAPP SECONDED THE MOTION. MOTION TO APPROVE CARRIED ~-0. INFORMATION AND REPORTS H.1 ANNOUNCEMENTS Councilman Lewis made the following announcements. City Hall and other non-emergency offices will be closed on Thursday and Friday, November 27 and 28 for the Thanksgiving holiday. Duncan Disposal will not provide garbage and recycling collections on Thanksgiving Day. Thursday's collections will be made on Friday and Friday's collections will shift to Saturday. The City of North Richland Hills is collecting donations of nonperishable food and new, unwrapped toys to help needy families during the holiday season. Donations are being accepted at City Hall and other City facilities through December 5th. Join us for the 9th annual Night of Holiday Magic from 4 p.m. to 8 p.m. on Saturday, December 6th. This year's event is moving to a new location at NRH20 Family Water Park. Activities will include photos with Santa, a snow tubing hill, the Christmas Tree lighting and firework show, children's activities, holiday music and more. Admission is free. Please bring a new, unwrapped toy for the Santa Cops toy drive and canned foods for the Community Enrichment Center. For more details, call 817-427-6600 or visit nrhtx.com. Kudos Korner -Officer Gwen Kasterke, Police Department - A letter was received commending Officer Kasterke's presence at a middle school campus. It stated that Officer Kasterke has assisted with many tasks over the past two years. She is patient with young people, has a superior dedication to duty and has the ability to solve problems. Officer Kasterke is proactive in preventing problems and steadfast in making sure every investigation is fully completed. H.2 ADJOURNMENT Mayor Trevino adjourned the meeting at 7:38 p.m. Oscar Trevino -Mayor ATTEST: Patricia Hutson, City Secretary CITY OF NORTH RICHLAND HILLS Department: Planning and Development Council Meeting Date: 12-8-2008 Presented by: Eric Wilhite Agenda No. B.2 Subject: FP 2008-07 Consideration of a Request from Roger & A. Jenisse Linebarger to Approve a Final Plat of Lot 1, Block 2, Park Oaks Addition (Located at 6432 Harmonson Road - 0.967 acres) Case Summary: The applicants, Roger and Jenisse Linebarger, are requesting approval of a final plat fora 0.967 acre tract. This particular tract has never been platted. Even though the width to length ratio is not typical for a residential lot, the proposed plat does meet the minimum lot width and the minimum lot size required for the current zoning classification. The Linebarger's are planning to construct a new single-family residential structure on the property. In order to do so the property must first be platted. The property was previously zoned R-3 (single-family). Current Zoning: R-3 (Single Family Residential) Thoroughfare Plan: The lot fronts Harmonson Road; a local street with 50 feet of right of way. Approximately 5.5 feet width of right-of-way is being dedicated. Comprehensive Plan: The Comprehensive Plan depicts low density residential uses for this area. The proposed lot corresponds to the plan. Staff Review: The Development Review Committee has reviewed the plat and has determined that it complies with both the Zoning and Subdivision Ordinances. Planning & Zoning Commission Recommendation: Approved by a 6-0 vote. Staff Recommendation: To approve final plat FP 2008-07. Review Schedule: Application: 6/2/08 Final Hearing: 12/8/08 Staff Review: 5 weeks Applicant Revision Time: 16 weeks Scheduling Time: 6 weeks Total Review Time: 27 weeks LOCATION MAP .. C ~~~ ~~~~ ~r~ns~n ~~d J Q W Q Plat Exhibit EXCERPT FROM THE MINUTES OF THE NOVEMBER 13, 2008 PLANNING AND ZONING COMMISSION MINUTES PP 2008-03 Consideration of a Request from Roger & A. Jenisse Linebarger to Approve a Preliminary Plat of Lot 1, Block 2, Park Oaks Addition (Located at 6432 Harmonson Road - 0.967 acres). Jenise Linebarger, 1725 Oak Knoll, Haltom City, Tx came forward. She and her husband, Roger Linebarger are wanting to build a home at 6432 Harmonson Road in North Richland Hills. Eric Wilhite stated this is a Preliminary Plat fora 0.967 acre tract of land. There was an older structure on this lot and the Linebarger's bought the home to plat in order to construct a new single family residence on the property. It is zoned R-3 and has additional right of way dedication along Harmonson that will be done as part of this plat. Staff has reviewed and it meets all the subdivision rules and regulations and recommends approval. APPROVED Steven Cooper, seconded by Kelly Gent, motioned to approve PP 2008-03. The motion was carried unanimously (6-0). FP 2008-07 Consideration of a Request from Roger & A. Jenisse Linebarger to Approve a Final Plat of Lot 1, Block 2, Park Oaks Addition (Located at 6432 Harmonson Road - 0.967 acres). Eric Wilhite came forward explaining this was the final plat for the previous case, PP2008-03. This case will go on to City Council for final approval and be filed with the county. Staff has reviewed and recommends approval. APPROVED Bill Schopper, seconded by Don Bowen, motioned to approve FP 2008-07. The motion was carried unanimously (6-0). CITY OF NORTH R/CHLAND HILLS Department: Planning and Development Council Meeting Date: 12-8-2008 Presented by: Eric Wilhite Agenda No. B.3 Subject: RP 2008-07 Consideration of a Request from North Richland Hills Baptist Church to Approve a Replat of five lots in the Parchman Addition to Lot 1-R1, Parchman Addition and a Street Use License Agreement (Located at Boulevard 26 and Vance Road - 10.07 acres) Case Summary: The applicant, North Richland Hills Baptist Church, is requesting a replat in order to combine one large lot and four smaller individually platted lots into a single lot. All of the lots are under the church's ownership. The church is currently undergoing an expansion that includes an increase to parking areas and site improvements that will upgrade and enhance the Boulevard 26 frontage. Combining all of the separate lots into a single lot provides the church flexibility in accomplishing this expansion. This replat will also allow the church to change their primary address from Vance to Boulevard 26. Along with the requested replat approval of a Street Use License Agreement is being requested. Within this development there is an existing parking lot at the northwest corner of the property that was not designed to current City criteria. Specifically, there are no existing sidewalks at the intersection of Vance Road and Glenview Drive and the parking stalls encroach into the parkway area of the street right-of-way. The current replat technically would trigger the need for sidewalks and the removal of parking stalls from within street right-of-way. The existing parking lot was constructed more than 25 years ago and the vehicular and pedestrian operations have not been negatively impacted by the parking encroachments or lack of sidewalks. As such, a Street Use License Agreement was drafted by the City Attorney, which if approved, would allow the church to continue operations for this parking lot in its current manner. The agreement would allow the church to delay construction of sidewalk facilities and the parking lot reconfiguration until such time as the City needs the right-of-way. In the event that handicap accessibility issues arise or the parking encroachments become a safety issue, the City retains the right to cancel such agreement and require the parking stalls to be relocated from within the street right-of-way and for the sidewalks to be installed at this intersection. The agreement is attached. Current Zoning: A zoning change request was recently approved for the smaller lots along Boulevard 26. The entire property is now zoned "U" Institutional. Thoroughfare Plan: The development has access on Vance Road and Parchman Street, 50 feet wide collector streets. There is frontage, but no direct access to Boulevard 26, a 6-lane, undivided principal arterial with 120 feet of Right Of Way (ROW). Comprehensive Plan: The Comprehensive Plan illustrates a mix of Public/Semi-Public uses and Retail uses for the proposed lot. Staff Review/Rough Proportionality Determination: The Development Review Committee has reviewed the plat and has determined that it complies with both the Zoning and Subdivision Ordinances. There are no public improvements required for this development. Planning & Zoning Commission Recommendation: Approved by a 6-0 vote. Staff Recommendation: To approve replat RP 2008-07 and the Street Use License Agreement Application: 6/9/08 Final Hearing: 12/8/08 Staff Review: 5 weeks Applicant Revision Time: 16 weeks Scheduling Time: 5 weeks Total Review Time: 26 weeks LOCATION MAP ~ ~~~'11~l~'!W a ~'1 VE' E j q 6 j> e~6 ~a ,a ~~e ~o City of Richland Hills Aerial Concept Drawing of NRH Baptist Church Improvements STREET USE LICENSE AGREEMENT The parties to this agreement are the City of North Richland Hills, herein "City" and h~orth Richland Hills Baptist Church of Fort worth, herein styled "the Church." The Church is in the process of platting its property to be known as Lot 1 - R1 which is located on the North East corner of public streets which Cit`• owns and maintains. The right of v~•ay of these streets, Parchman Drive and Glenview Drive, includes land which has been improved for driveways and parking by the Church and which the Church desires to continue to maintain and use for Church parking. City is willing to allow such use until such time as City needs such right of way. The Church's use of this right-of--way shall not prohibit franchise utility companies from utilizing the public right-of-~vay in accordance with the terms and conditions of the franchise agreements. ~VITNESSEI'H 1. City hereby grants the Church a Street Use License to occupy and use for dri~•eways and parking the existing driveways and parking areas located in the South ten (1U) feet of Glenview Drive and the East ten t14) feet of Parchrnan Drive adjacent to Lot l-Rl, Parchrnan Addition to the City of North Richland Hills, Texas, which drives and parking areas are depicted on Exhibit A hereto. 2. This license shall be valid for a period of fifty (50) years or anti! the City, acting through its City Coumcil, in its sole discretion terminates this license. This license shall be uncancellable for a period of three (3) years from the date of approval by the City. 3. V~hen tlfis license expires or is terminated, the Church agrees to remove asphalt parking within such right of ~~~ay, to construct a four foot wide concrete sidewalk in accordance with city standards and reestablish vegetation in the parkway area within 365 days after such expiration or termination. Agreed September ,~ a , 2008 CITY OF NORTH RICHLAND HILY,S By Larry J. Cunningham, City Manager ACKNOWLEDGMENT STATE OF TEXAS § COUNTY O-F TARRANT § This instrument was acknowledged before me on this date by LARRY .l. CUNNINGHAM, the Cit~_ ~ Manager of the City of North Richland Hills, Texas, who acknowledged to me that he executed same for the purposes and consideration, and in the capacity therein expressed. ~rIVEN UNDER MY HAND AND SEAL Op f)FFICE, this day of 20(]8. Notary Public in and for The State of Texas NORTH RICHLANU HILLS BAPTIS'X' CHURCH OF FORT WORTH $y: AC~IYOWLEDG11~iENT STATE DF TEXAS COUNTY Off' TAItRANT § This instrument was acl~a~aw°Iedged before me on this date by ~~ ~~3 authorized re resentative of ~1orth Richland Hills ~ fist Church of Fort Wo a Teas l~ ~ Corporation, wha acknowledged to nee that he executed same for the purposes and consideration, and in the capacity therein expressed. ~GIVEI~ UNDER MY HAND AND SEAL OF OFFICE, this ~ day of c.~ ~ , zao~. J~ Si'RON~ Nat b is in and N~~tary! P~lblic, State of Texas : ~Y F ~Y ~flmmissi~n Exp~tes The S to of Te EXHIBIT "A" LOCATION MAP FOR STREET USE LICENSE AGREEMENT N.T.S. -..~- ' ~p~ -•.- ~ GLENVlEW DRIVE 145' - +-- ~ - i ~ -- W Q Z Q ~..~ 4 a AREAS IN WHICH STREET USE LICENSE APPLIES D O U Z a IVI~f-1 Plat Exhibit EXCERPT FROM THE MINUTES OF THE NOVEMBER 13, 2008 PLANNING AND ZONING COMMISSION MEETING RP 2008-07 Consideration of a Request from North Richland Hills Baptist Church to Approve a RePlat of five lots in the Parchman Addition to Lot 1-R1, Parchman Addition (Located at Boulevard 26 and Vance Road - 10.07 acres). Ernest Hedgcoth with Ernest Hedgcoth Consulting Engineers came forward representing North Richland Hills Baptist Church. In an effort to clean up the property along Boulevard 26, the church is landscaping the frontage and adding amenities, cleared off buildings and eliminated easements necessary to transform the property into one lot. There is going to be a grand opening on December 7, 2008, "Christmas on the Boulevard" Mr. Hedgcoth invited the Planning and Zoning Commission to the event and thanked the staff for their help on this case. Eric Wilhite stated this is a replat of the parcels and lots that North Richland Hills Baptist Church owns totaling around ten acres. The parcels on the corner of Vance and Boulevard 26 were previously commercial lots which were recently rezoned "U" Institutional to match the back portion where the main sanctuary and existing parking lot is located. As Mr. Hedgcoth described, the church is expanding out into this area with more additional parking and a substantial amount of enhanced landscaping. It meets all the subdivision rules and regulations and staff recommends approval. Don Bowen stated he applauded the church for doing this in an effort for further redevelopment of Boulevard 26 and initiating the renovation. APPROVED Mark Haynes, seconded by Kelly Gent, motioned to approve RP 2008-07. The motion was carried unanimously (6-0). CITY OF NORTH RICHLAND HILLS Department: City Secretary Presented by: Council Meeting Date: 12-8-2008 Agenda No. C.0 Subject: PUBLIC HEARINGS CITY OF NORTH RICHLAND HILLS Department: Planning and Development Council Meeting Date: 12-8-2008 Presented by: Eric Wilhite Agenda No. C.1 Subject: ZC 2008-05 Public Hearing and Consideration of a Request from Terry Browning to Approve a Zoning Change of Tract 2S2A, Abstract 1520 from "U" Institutional to "R-1" Single Family Residential (Located at 6025 Riviera Drive - 0.277 acres) -Ordinance No. 3032 Case Summary: The applicant, Mr. Terry Browning, is requesting a zoning change for the property he owns at 6025 Riviera Drive. The property that Mr. Browning wants rezoned is currently an un-platted tract located next to his platted lot where his home is located. The un-platted tract is located at the end of Riviera Drive next to a large drainage channel. The drainage channel separates Mr. Browning's un-platted property from a portion of the Iron Horse Golf Course. This tract was never directly part of the golf course but as a result of existing tract lines was zoned "U" Institutional along with the golf course. Mr. Browning plans to reconfigure his garage entry and extend the current pool and deck area on his property. To make these improvements it will require the current lot line to be removed and the zoning of the un-platted tract to be changed so that it matches his existing residential lot. The property is also being replatted in order to combine it with the existing platted lot. This plat will be processed through the Planning and Zoning Commission and City Council on a future agenda. Plat Status: Currently the property being rezoned is not platted. But the property where Mr. Browning's home is located is platted in the Fossil Creek Trails Addition. Following the zoning approval, a replat will be processed at a future date for approval. Existing Site Conditions: No structures are located on the un-platted tract. Comprehensive Plan: The Comprehensive Plan depicts low density residential uses for this property. Thoroughfare Plan: The lot has access and frontage to Riviera Drive, a 60 feet wide collector. Surrounding Zoning /Land Use: North: U /golf course East: R-1 /residential structure South: R-1 /residential structure West: U/golf course Planning & Zoning Commission Recommendation: Approve Zone change request by a 6-0 vote. Staff Recommendation: To approve zoning change request ZC 2008-05, Ordinance 3032. Review Schedule: Application: 9/01 /08 Final Hearing: 12/8/08 Staff Review: 6 weeks Applicant Revision Time: 4 weeks Scheduling Time: 4 weeks Total Review Time: 14 weeks LOCATION MAP F a=tom City N ~ "~ zc 2008-05 honing Change: U Institiutional to R-1 single Family Residential 6025 Riviera Drive Feet Prepared b~ Planning ~Of30f08 0 0~ Aso 3eo X70 Aso Aerial PROPERTY OWNER NOTIFICATION f :~:";i~```-° NOTICE OF PUBLIC HEARING _, ~~: ; A '~ CITY OF NORTH RICHLAND HILLS ~~~'••~:_••~~'•~ PLANNING AND ZONING COMMISSION `'""- CITY COUNCIL Case #: ZC 2Q08-05 Zoning Change: U Institutional to R-1 Single Family Applicant: Terry Browning Location: 6025 Riviera Drive (0.277 acres) You are receiving this notice because you are a property owner of record within 200 feet of the property shown on the attached map. Purpose of Public Hearing: A public hearing is being held to consider a request from Terry Browning to rezone a 0.277 acre tract of land situated in the W.A. Trimble Survey, Tract 2S2A, from "U" Institutional to "R-1" Single Family Residential, located at 6029 Riviera Drive. Public Hearing Schedule: ~. Public Hearing Dates: PLANNING AND ZONING COMMISSION THURSDAY, NOVEMBER 13, 2008 If recommended for approval by the Planning and Zoning Commission, this zoning request will be heard by the City Council on: CITY COUNCIL: MONDAY, DECEMBER 8, 2008 Both Meetings Time: 7:00 P.M. Both Meetings Location: CITY COUNCIL CHAMBERS 7301 N. E. LOOP 820 NORTH RICHLAND HILLS, TEXAS If you have any questions or wish to submit a petition or letter concerning the above request, please contact: Planning Department City of North Richland Hills 7301 Northeast Loop 820 North Richland Hills, Texas 76180 Phone (817) 427-6300 Fax (817) 427-6303 LIST OF NOTIFIED PROPERTY OWNERS Terry E#ux Delores Browning Meadowiakes Com Imp Assn Don R Etux Kay H Waters 6029 Riviera Dr ~oSkylark Cir Community Impr 6028 Riviera Dr Fort Worth Tx X6184-8003 PO Box 820154 Fort Worth Tx 76180-8002 North Richland Hills Tx 761$2-0154 Beverly A Lasater Arthur F & Deborah H Tribble Michael ~ Catherine Garrison 6050 Circleview Dr 6033 Riviera Dr 6041 Riviera Dr North Richland Hills Tx 76180- Fort Worth Tx 7fi180-80x3 Fort Worth Tx 76180-8003 8012 ORDINANCE NO. 3032 ZONING CASE ZC 2008-05 AN ORDINANCE AMENDING THE COMPREHENSIVE PLAN AND THE COMPREHENSIVE ZONING ORDINANCE OF THE CITY OF NORTH RICHLAND HILLS; AMENDING THE ZONING MAP OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, AND REZONING A PARCEL OF LAND KNOWN AS 6025 RIVIERA DRIVE FROM U (INSTITUTIONAL) TO R-1 (SINGLE FAMILY RESIDENTIAL) ZONING; ESTABLISHING A PENALTY; PROVIDING FOR PUBLICATION; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, notice of a hearing before the Planning and Zoning Commission was sent to real property owners within 200 feet of the property herein described at least 10 days before such hearing; and, WHEREAS, notice of a public hearing before the City Council was published in a newspaper of general circulation in the City at least 15 days before such hearing; and, WHEREAS, public hearings to zone the property herein described were held before both the Planning and Zoning Commission and the City Council, and the Planning and Zoning Commission has heretofore made a recommendation concerning the zone change; and, WHEREAS, the City Council is of the opinion that the zone change herein effectuated furthers the purpose of zoning as set forth in the Comprehensive Zoning Ordinance and is in the best interest of the citizens of the City of North Richland Hills; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: Section 1: THAT the Comprehensive Plan, the Comprehensive Zoning Ordinance and the zoning map of the City of North Richland Hills are hereby amended by rezoning a parcel of land known as 6025 Riviera Drive located in the City of North Richland Hills, Tarrant County, Texas, more particularly described in the legal description attached hereto as Exhibit A and the site plan as Exhibit B from U (Institutional) to R-1 (Single Family Residential) zoning. Section 2: Any person, firm or corporation violating any provision of the Comprehensive Zoning Ordinance as amended hereby shall be deemed guilty of a misdemeanor and upon final conviction thereof fined in an amount not to exceed Two Thousand Dollars ($2,000.00). Each day any such violation shall be allowed to continue shall constitute a separate violation and punishable hereunder. Section 3: The City Secretary is hereby authorized and directed to cause the publication of the descriptive caption and penalty clauses of this ordinance as an alternative method of publication provided by law. Section 4: This ordinance shall be in full force and effect immediately after passage. AND IT IS SO ORDAINED. PASSED AND APPROVED on this 8th day of December, 2008. CITY OF NORTH RICHLAND HILLS By: Oscar Trevino, Mayor ATTEST: Patricia Hutson, City Secretary APPROVED AS TO FORM AND LEGALITY: George A. Staples, City Attorney APPROVED AS TO CONTENT: John Pitstick, Planning & Development Director EXHIBIT A BEING A TRACT OF lANO OUT OF THE WA. TRIt~ABLE SURVEY, ABSTRACT NO. i 520, 7ARRANT COUNTY. TEXA,S~ AND BEING THE SAME TRACT OF LAND AS DESCRIBED !N DEED RECORDED IN VOLUME 13426. PAGE 186, DEED RECORDS. TARRANT COUNTY. TEXAS: BEGINNING AT A 5/8" IRON PIN FOUND IN THE NORTHERLY R.O.W. UNE OF RMERA DRNE fOR THE SOUTHWAST CORNER OF TRACT' BEING DESCRIBED, SAID POINT BEING THE SOUTHWEST CORNER OF LOT 53, BLOCK 4. FOSSIL CREEK TRAILS AN ADDITION TO THE CITY OF NORTH RICHLAND HILLS, TARRANT COUNTY. TEXAS. ACC~dRDING T4 PLAT RECORDED IN VOLUME 385-~87, PAGE 45 AND 47. PLAT RECORDS, TARRANT COUNTY, TEXAS, SAID POINT BEING THE BEGINNING OF A CURVE TO THE EFfT WRH A RADIUS OF 60.00 FEET; THENCE NORTHWESTERLY ALONG SAID R.0.1Y. AND CURVE TO THE LEFT 151.89 FEET TO A CAPPED IRON PIN FOUND FOR THE END OF SAID GURVE~ WHOSE CHORD GEARS 114.48 FEET NORTH 74 DEGREES 13 lwtINUTES 58 SECO(YDS WEST, SAID POINT BEING LOCATED iN THE EASTERLY UNE OF A TRACT QF LAWD AS DESCRIBED IN DEED RECORDED IN VOLUME 10627, PAGE 124, DEED RECORflS, TARRANT COUNTY, TEXAS; THENCE NORTH 33 DEGREES 36 MINUTES 42 5ECONDS EAST 85.18 FEET ALONG THE EASTERLY LINE OF STUD TRACT OF LAND AS DESCRIBED iN DEED RECORDED IN VOLUt+AE 1x627, PAGE 120 TO AN 'X' FOUND CUT IN CONCRETE FOR CORNER OF TRACT BEING OESCR48ED: THENCE NORTH 27 DEGREES 44 MINUTES 15 SECONDS EAST 44.35 FEET ALONG THE EASTERLY LINE OF SAID TRAGT OF LAND AS DESCRIBED IN DEED RECORDED IN VOLUME 10fi27, PAGE 12a TO A CAPPED IRON SET FOR THE NORTHWEST GORNER OF TRACT BEING DESCRIBED, SAID POINT BEING THE BEGINNING QF A CURVE TO THE RIGHT WCrH A RADIUS OF 90.97 FEET; THENCE NORTHEASTERLY ALONG THE SOUTHERLY LINE OF SAID TRACT OF LAND AS DESCRIBED IN GEED RECORDED IN VOLUfaE 10627, PAGE 120 AND CURVE TO THE RIGHT 82.73 FEET TO A CAPPED IRON Plat FOUND FOR THE END OF SAID CURVE, WHOSE CHORD GEARS 79.91 FEET NORTH 88 DEGREES 40 IAINUTES 44 SECONDS EAST; THENCE SOUTH 65 dEGREES 22 MINUTES 54 SECONDS EAST 34.17 FEET TO A>V 'X' FOUND CUT IN CONCRETE FOR CORNER OF TRACT Bf ING DESCRIBED; THENCE SOL1Tl~t 27 DEGREES 5B 1rfIkUTES 45 SECONDS WEST ~ 6.02 FEET TO AN 'X' FOUND CUT FOR CORNER OF TRACT BEING aESCRIBED. SAID POINT BEING THE NORTHWEST CORNER OF SAID LOT 53, BLOCK ~4. FOSSIL CREEK TRAILS; THENCE SOUTH 28 DEGREES 01 MINUTES 28 SECONDS WEST 130.00 FEET ALONG THE NORTHWESTERLY UNE OF SAID LOT 53, BLOCK 4, FOSSIL CREEK TRAILS TD THE P41NT OF BEGINNING AND CONTAINING 12075.2{ SQUARE FEET OF LAND, MORE OR LESS Exhibit B EXCERPT FROM THE MINUTES OF THE NOVEMBER 13, 2008 PLANNING AND ZONING COMMISSION MEETING ZC 2008 -05 Public Hearing and Consideration of a Request from Terry Browning to Approve a Zoning Change of Tract 2S2A, Abstract 1520 from "U" Institutional to "R-1" Single Family Residential (Located at 6025 Riviera Drive - 0.277 acres). Chairman Shiftlet opened the Public Hearing at 7:03 p.m. Terry Browning, 6026 Riviera Drive, NRH, came forward requesting a zoning change. He stated they live at 6029 and own the lot next to it at 6025. They are trying to enlarge the garage and add a patio and in doing so realized the lot at 6025 was not zoned residential. Eric Wilhite came forward stating this is a request to rezone approximately 0.277 acre parcel of land directly next to the Brownings' property. There is a drainage channel behind it along with Iron Horse Golf Course. That property is zoned "U" Institutional because of the golf course and this parcel over the period of time stayed "U" Institutional. They have recently inquired about the expansion for the garage and patio area and in order to do that, the lot line must be removed and the property rezoned. There is also a Replat for this property that will be presented at the next meeting to replat into the R-1 lot. It meets the Comprehensive Land Use Plan in this area along with all the subdivision rules and regulations, staff recommends approval. Chairman Shiflet asked if anyone wished to speak for or against this case? Seeing none, he closed the Public Hearing and entertained a motion. APPROVED Don Bowen, seconded by Kelly Gent, motioned to approve ZC 2008-05. The motion was carried unanimously (6-0). CITY OF NORTH R/CHLAND HILLS Department: City Secretary Presented by: Council Meeting Date: 12-8-2008 Agenda No. D.0 Subject: PLANNING AND DEVELOPMENT Items to follow do not require a public hearing. No items for this category. CITY OF NORTH RICHLAND HILLS Department: City Secretary Presented by: Council Meeting Date: 12-8-2008 Agenda No. E.0 Subject: PUBLIC WORKS No items for this category. CITY OF NORTH R/CHLAND HILLS Department: City Secretary Presented by: Council Meeting Date: 12-8-2008 Agenda No. F.0 Subject: GENERAL ITEMS CITY OF NORTH R/CHLAND HILLS Department: Economic Development Presented by: Craig Hulse Council Meeting Date: 12-8-2008 Agenda No. F.1 Subject: GN 2008-118 Approve an Economic Development Agreement with Texas Investors, LLC for 5142 and 5198 Rufe Snow Dr. -Resolution No. 2008-061 Pursuant to Chapter 380 of the Texas Local Government Code, City Council is requested to authorize the City Manager to execute an agreement between the City of North Richland Hills and Texas Investors, LLC to redevelop the properties located at 5142 and 5198 Rufe Snow Dr. Backgrou nd: Built 25 years ago and situated near Loop 820, Crossroads Village shopping center contains two properties that are in need of revitalization as both structures are out of date and experiencing low levels of tenant occupancy . City Staff and the property's owner, Texas Investors, LLC agree that implementing a redevelopment plan will improve the shopping experience, resulting in increased retail tenant occupancy and increased quantities of shoppers. Aspects behind the redevelopment plan include: . Clad existing columns in architectural stone. . Complete masonry facade improvements, including architectural stone and stone tile. • New architectural light fixtures on facade and in parking areas. . New E.I.F.S. system (thick synthetic stucco) to enhance roof line with cornice and architectural detail. • Exterior balcony improvements with a metal cable railing system to enhance upper suite visibility. To encourage this and future redevelopment projects, City Staff feels it beneficial to provide an incentive package that drives toward a significant increase in retail based commerce. As such, Texas Investors, LLC has agreed to a partnership that will benefit both themselves and the City of North Richland Hil Is. Conditions of the agreement are as follows: . Texas Investors, LLC Obligations o Completion of project by October 16, 2009 o Minimum construction cost of $1,536,000 0 50% of square footage occupied on 1St floor of 5198 & 5142 be retail businesses by December 31, 2009; 60% by December 31, 2010; 70% by December 31, 2011 - December 31, 2013 . City of North Richland Hills Obligations o Rebate 100% of the property tax increment during the first 5 years after completion o Rebate 25% of the 1 % general sales tax paid to City through the state by businesses at 5198 Rufe Snow during the calendar years 2009-2013 o Forego 50% of the City construction fees In sum, this partnership is designed to occupy space with retail, drive incremental commerce, protect property values, and set the stage for future redevelopment. Recommendation: To approve Resolution No. 2008-061 RESOLUTION NO. 2008-061 WHEREAS, the City Staff has negotiated a proposed agreement for the grant of economic incentives to Texas Investors, LLC in order to promote local economic development and to stimulate business and commercial activity in the City through the redevelopment of property located at 5198 Rufe Snow and 5142 Rufe Snow, North Richland Hills, Tarrant County Texas; and WHEREAS, the City Council desires to approve such agreement; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS: Section 1: The Economic Development Agreement between the City and Texas Investors, LLC is hereby approved and its execution is hereby authorized. AND IT IS SO RESOLVED. PASSED AND APPROVED on the 8th day of December, 2008. CITY OF NORTH RICHLAND HILLS By: Oscar Trevino, Mayor ATTEST: Patricia Hutson, City Secretary APPROVED AS TO FORM AND LEGALITY: George A. Staples, City Attorney APPROVED AS TO CONTENT: Craig Hulse, Economic Development Director EXHIBIT A Grantee agrees to expend $1,536,000 for reconstruction improvements to its property as follows: 5198 Rufe Snow Dr, N Richland Hills Georeference: 39240-13-1 R Snow Heights North Addition BIk13Lot1R Current 2008 Appraised Value: $1,283,506 . Redevelopment Construction Cost: $1,246,000 5142 Rufe Snow Dr, N Richland Hills Georeference: 39240-13-2R3 Snow Heights North Addition Blk 13 Lot 2R3 . Current 2008 Appraised Value: $825,649 . Redevelopment Construction Cost: $290,000 Redevelopment Description Improvements to the exterior and outer shell to a more contemporary style with Texas influence. Elements included in the redevelopment are: . Additional windows on northwest side of 5198 Rufe Snow . Masonry screen wall behind 5198 Rufe Snow that faces Dick Lewis . Removal of all masonry walls on 2nd floor of 5198, replaced by steel cables Redesign of columns, stairs and landmark tower ECONOMIC DEVELOPMENT AGREEMENT The parties to this Agreement are the City of North Richland Hills ("City") and Texas Investors, LLC, a limited liability company of Springfield, Missouri, ("Grantee"). The purpose of this Agreement is to establish the terms of a program under Chapter 380, Texas Local Government Code under which City will, in order to promote local economic development and stimulate business and commercial activity in the municipality, rebate to the Grantee a portion of the ad valorem property taxes and reduce certain fees payable for development by Grantee on property known and described as Lots 3R and 2R3, Block 13, Snow Heights North Addition to the City of North Richland Hills, Tarrant County, Texas and also known as 5198 Rufe Snow and 5142 Rufe Snow, North Richland Hills, Texas. WITNESSETH Definitions: "Tax increment" means the amount of property taxes levied and collected each year on real property described above in excess of the amount levied and collected on that property during the year preceding the date the improvements described herein in Exhibit A hereto were placed on the tax rolls of the Grantor. "Retail business" means a business which sells goods or services subject to Texas sales tax. For and in consideration of the mutual undertakings and conditioned as hereinafter set forth, the parties agree as follows: 1. City agrees to rebate to Grantee 100% of the tax increment during the first five years after the improvements to the property described in Exhibit A are completed by Grantee. City further agrees to rebate 25% of the 1 % general sales tax paid to City through the state by businesses located on the property known as 5198 Rufe Snow during the calendar years 2009-2013. Such rebates shall be payable within 30 days after proof is submitted by Grantee of payment of such taxes. In this regard, Grantee agrees to either require all lessees of such property to agree to allow City access to the Texas Comptroller's sales tax records upon execution of anon-disclosure agreement or to provide copies of sales tax returns and copies of proof of payment of such sales taxes to the Texas Comptroller and to permit Grantee to provide such copies to the City during the period Grantee will be seeking rebates. City further agrees to forego 50% of the construction fees charged for such development. The obligations of City hereunder shall be null and void unless Grantee completes the improvements to the property described in Exhibit A by October 16, 2009. 2. Grantee agrees to construct the improvements described on Exhibit A hereto on or before October 16, 2009 and to pay all taxes on such property as they come due. Grantee further agrees and this grant is conditioned on development of the first floor of the property known as 5198 Rufe Snow and 5142 Rufe Snow, North Richland Hills, Tarrant County Texas for use for retail businesses and that a minimum of 50% of such first floor square footage shall be occupied by such retail businesses by December 31, 2009, 60% by December 31, 2010 and that 70% retail business occupancy shall be achieved by December 31, 2011 and maintained through December 31, 2013. Should Grantee fail to meet or maintain the required retail business occupancy, this Grant shall terminate and no further payments shall be payable by City to Grantee. 3. Any notice and/or statement required and permitted to be delivered shall be deemed delivered by depositing same in the United States mail, certified mail with return receipt requested, postage prepaid, addressed to the appropriate party at the following addresses, or at such other addresses provided by the parties in writing: City: City Manager 7301 N.E. Loop 820 North Richland Hills, TX 76180 with a copy to: George A. Staples, Esq. TAYLOR, OLSON, ADKINS, SRALLA $c SLAM, L.L.P. 6000 Western Place, Suite 200 Fort Worth, Texas 76107 Phone: 817/332-2580 Grantee: William A. Hunt, Jr. Vice President Texas Investors, LLC 1661 N. Boonville, Ste I Springfield, MO 65803 4. Regardless of the actual drafter(s) of this Agreement, this Agreement shall, in the event of a dispute over its meaning or application, be interpreted fairly and reasonably, and neither more strongly for or against any party. 5. This Agreement is made and shall be construed under the laws of the State of Texas, and venue shall lie in Tarrant County, Texas. 6. This Agreement may only be amended, altered or revoked by written instrument signed by City and Grantee. There are no other Agreements between the parties hereto. 7. As required by Texas law, this grant is conditioned upon the compliance by Grantee with laws prohibiting employment of undocumented workers. Should the Grantee employ a non citizen who lacks legal authority to work in this country during the five years immediately following the payment of the grant which is the subject of this agreement, such grant shall be deemed forfeited and shall be immediately repaid City. This Agreement is made and entered into this day of December, 2008, at North Richland Hills, Tarrant County, Texas. By: By: Texas Investors, LLC William A. Hunt, Jr. Vice President City of North Richland Hills Larry J. Cunningham, City Manager Current Elevation Future Elevation ~~ _ bi - ~f {' .. ..~ .. CITY OF NORTH R/CHLAND HILLS Department: City Manager's Office Presented by: Karen Bostic Council Meeting Date: 12-8-2008 Agenda No. F.2 Subject: GN 2008-119 Approve an Electric Power Contract with Cities Aggregation Power Project, Inc. -Ordinance No. 3034 There is a work session item to discuss the City's participation in the long-term power contract with CAPP. This regular agenda item has been included for Council approval if Council consensus is to participate in the long-term power contract with CAPP. If Council consensus is not to participate, then no action needs to be taken. The City is a member of the Cities Aggregation Power Project ("CAPP"), anon-profit political subdivision corporation aggregator. Created in 2001 in anticipation of the deregulation of the Texas retail electric market, CAPP pools members' electric power needs in order to negotiate lower, more stable prices through bulk purchasing. CAPP is run by a voluntary 10 member Board of Directors, comprised entirely of city employees and city officials. LAPP and its sister political subdivision corporation aggregator, South Texas Aggregation Project, Inc. ("STAP"), have more than 150 political subdivision members that purchase in excess of one billion kWh annually. Together CAPP and STAP have member savings that have surpassed $100 million since the Texas electric market deregulated in 2002. CAPP has entered into a Power Purchase Agreement ("PPA") with Luminant Generation Company LLC, Big Brown Power Company, LLC and Oak Grove Management Company, LLC (collectively, "Luminant") for approximately 150 MW of base load power from seven different units over a 24-year period. CAPP has entered into the contract on behalf of all CAPP members and STAP members that are willing to be allocated a portion of approximately 150 MW, corresponding to each participating member's energy consumption as a percentage of all participating members' consumption. The attached ordinance commits the City to purchasing electric power to satisfy a portion of its annual energy needs (approximately 60%) through the CAPP PPA for up to 24 years from CAPP and to pay a capacity payment equal to its proportionate amount of the debt service obligation associated with CAPP's prepayment of PPA capacity costs. The ordinance approves the Energy Sales Contract Between LAPP and the City (the "Member Contract") and authorizes the City officers and employees as may be appropriate to take all actions necessary to carry out the terms of this ordinance and the Member Contract. CAPP Long-Term, Contract Background: Although CAPP member savings are significant, the price volatility in the market makes it difficult for CAPP members to accurately budget for power expenditures from year to year. This is because power contract options made available to retail customers like CAPP, regardless of source, have been priced as if the energy was produced exclusively from natural gas-fired plants. The price of natural gas is extremely volatile. Energy experts, including the Chairman of the Public Utility Commission of Texas, agree that this trend will continue over the long term. In 2005, the CAPP Board authorized its consultants to find alternatives to purchasing the entirety of CAPP power requirements in a market that links the price of all energy to natural gas prices. The CAPP long-term contract to be approved by this ordinance is a result of these efforts. Contracting fora 24-year commitment of lignite/coal-fired capacity at a fixed price (with slight escalation over the term of the contract) to serve a portion of members' power requirements will lower overall energy costs and provide political subdivisions with an ability to more accurately predict and stabilize the impact of energy prices on annual budgets. The CAPP long-term contract allows for better, more fiscally responsible budgets resulting from the stable and predictable long term energy costs that will be available to CAPP members through the base load contract. Taxpayers benefit because CAPP member cities do not have to cut services or pass higher energy costs on through higher taxes when electricity prices experience volatility and spiking because of fluctuating market prices. Purpose of the Ordinance: This ordinance approves the CAPP Member Contract that commits the City to purchasing electric power to satisfy approximately 60% of its recent energy needs through the CAPP PPA for up to 24 years and to pay a capacity payment equal to its proportionate amount of the debt service obligation associated with CAPP's prepayment of PPA capacity costs. The ordinance acknowledges review of the Member Contract and the Disclosure Statement and authorizes the City Manager, city officer or city employee as may be appropriate to sign or modify the Member Contract and to take all necessary actions to carry out the terms of the ordinance, the Member Contract, and Disclosure Statement. The Member Contract approved by this ordinance makes certain that capacity payments (debt service obligation) payable by the City will be public property finance contractual obligations pursuant to Texas Local Government Code Chapter 271, Subchapter A, secured by a pledge of such member's ad valorem taxes, which will be assigned to support debt issued by CAPP to pay the capacity costs of the PPA Approval of the Ordinance Would: • Approve the CAPP Member Contract and holds the approval of the CAPP member contract necessary and desirable to meet the City's proprietary functions and basic governmental functions. • Acknowledges that certain capacity payments required by the Member Contract and payable by the City are public property finance contractual obligations pursuant to Texas Local Government Code Chapter 271, Subchapter A that are secured by a pledge of such member's ad valorem taxes. It further acknowledges that the fixed capacity component constitutes a long-term general obligation tax debt of the City, secured by a pledge of the City's ad valorem taxes. • Acknowledges that the City has reviewed the Member Contract and Disclosure Statement dated September 10, 2008. It authorizes the City Manager or other city employee or officer as may be appropriate to sign and return the Member Contract and Disclosure Statement to CAPP by the deadline provided. • Authorizes the City Manager or other city employee or officer as may be appropriate to approve modifications and corrections to the Member Contract. Modifications and corrections may be necessary once all CAPP members have taken final action regarding participation in the CAPP long- term contract to conform changes to the assigned cost in the PPA. Capacity payment obligations in any year are not to be changed from the amounts reflected in the Member Contract. • Authorizes the City Manager or other city employee or officer as may be appropriate to sign additional power agreements for the period of 2009 - 2011 that are arranged by CAPP to meet the City's power requirements exceeding base load needs addressed by the Member Contract with CAPP. • Authorizes City officers and employees as may be appropriate to take all such actions and deliver all such instruments that are necessary or desirable to carry out the provisions of this ordinance, Member Contract, or Disclosure Statement. • Authorizes City officers and employees as may be appropriate to make changes or corrections to this ordinance, Member Contract, or ancillary document as may be necessary to correct ambiguities or mistakes, to more fully document the approved transactions, to allow approved changes to the Member Contract, or to obtain approval from the Texas Attorney General's Office for the Member Contract and debt issuance by CAPP. • Provides that signatures of any City officers or employees that appear on the Member Contract will be valid and sufficient even if the officer or employee ceases to be employed and or represent the City before delivery of the Member Contract. • Provides that if any section(s) is later found to be unconstitutional or invalid, that finding shall not affect, impair or invalidate the remaining provisions of this ordinance. It further directs that the remaining provisions of the ordinance are to be interpreted as if the offending section or clause never existed. • Incorporates the statements set forth in the recitals of the ordinance and confirms that the statements are true and correct. In the Member Contract several exhibits are referenced. The only exhibit included is the Power Purchase Agreement between Luminant and CAPP. All other exhibits will need to be added at a later date as they cannot be determined until it is know which cities are going to participate in the long-term power agreement. As will be discussed in the work session prior to the regular meeting, Staff does not believe that entering into this agreement is in the City's best interest at this time. Recommendation: If Council consensus is to enter into an Energy Sales Contract with Cities Aggregation Power Project, approval of Ordinance No. 3034 is necessary. ORDINANCE NO. 3034 ORDINANCE OF THE CITY OF NORTH RICHLAND HILLS, TEXAS APPROVING AN ELECTRIC POWER CONTRACT WITH CITIES AGGREGATION POWER PROJECT, INC. ("CAPP") FOR ELECTRIC CAPACITY AND ENERGY, PROVIDING CAPACITY PAYMENTS AS PUBLIC PROPERTY FINANCE CONTRACTUAL OBLIGATIONS OF THE CITY, PLEDGING AND LEVYING AN AD VALOREM TAX TO SUCH PAYMENTS, PROVIDING FOR ENERGY PAYMENTS FOR ELECTRIC ENERGY SUBJECT TO ANNUAL APPROPRIATION BY THE CITY, PROVIDING FOR THE ASSIGNMENT OF SUCH CAPACITY PAYMENTS TO SUPPORT DEBT ISSUED BY CAPP INCURRED TO ACQUIRE ELECTRIC CAPACITY RIGHTS FROM LUMINANT GENERATION COMPANY AND RELATED ENTITIES PURSUANT TO A 24-YEAR POWER PURCHASE AGREEMENT ("PPA"); AUTHORIZING THE CITY MANAGER OR OTHER APPROPRIATE CITY OFFICER OR EMPLOYEE TO EXECUTE AND DELIVER THE MEMBER CONTRACT; FURTHER AUTHORIZING THE CITY MANAGER OR OTHER APPROPRIATE CITY OFFICER OR CITY EMPLOYEE TO SIGN ADDITIONAL AGREEMENTS ARRANGED BY CAPP FOR ELECTRIC POWER NEEDED BY THE CITY IN THE PERIOD 2009-2011 IN EXCESS OF THE AMOUNT OBTAINED UNDER THE MEMBER CONTRACT; ACKNOWLEDGING, AUTHORIZING AND DIRECTING THE CITY MANAGER OR APPROPRIATE CITY OFFICER OR CITY EMPLOYEE TO SIGN AND RETURN CAPP'S DISCLOSURE LETTER; FURTHER AUTHORIZING THE CITY MANAGER OR APPROPRIATE CITY OFFICER OR OTHER CITY EMPLOYEE TO ACCEPT CONFORMING CHANGES TO THE MEMBER CONTRACT DEPENDENT ON THE FINAL TERMS OF THE CAPP PPA; PROVIDING FOR VALIDITY AND SUFFICIENCY OF CITY EMPLOYEE'S OR CITY OFFICER'S SIGNATURE IF THE OFFICER OR EMPLOYEE LEAVES OFFICE OR EMPLOYMENT PRIOR TO THE DELIVERY OF THE MEMBER CONTRACT; ADOPTING A SAVINGS CLAUSE; DETERMINING THAT THIS ORDINANCE WAS PASSED IN ACCORDANCE WITH THE REQUIREMENTS OF THE TEXAS OPEN MEETINGS ACT. WHEREAS, the City of North Richland Hills must purchase electricity in order to perform its proprietary and governmental functions; and WHEREAS, the price of power sold in the deregulated retail market in Texas has been directly linked to the daily fluctuations for natural gas futures prices, regardless of the type of generation fuel; and WHEREAS, natural gas prices are extremely volatile, resulting in an upward cost trend and significant electric price instability; and WHEREAS, the City is a member of the non-profit political subdivision corporation Cities Aggregation Power Project, Inc. ("LAPP"), which has the legal authority to contract for the purchase of electricity on behalf of more than 100 political subdivision members; and WHEREAS, CAPP has endeavored to provide its members with the most favorable energy pricing available in the market, delivering more than $100 million in savings for its members since 2002; and WHEREAS, the CAPP Board of Directors is a voluntary ten-member board comprised entirely of city employees and city officials that directs the activities of CAPP's legal and energy advisors; and WHEREAS, the CAPP Board of Directors has investigated potential long-term contracting options to both lower and stabilize electric prices for member political subdivisions that must prepare annual budgets and require cost predictability for essential services like electricity; and WHEREAS, CAPP negotiated a Purchase Power Agreement ("PPA") with owners of non-gas fired generation for the long-term, fixed price supply of power, which will allow participating CAPP members to meet a portion of energy needs (approximately 60 percent) at a stable, known price fora 24-year period; and WHEREAS, the PPA calls for CAPP to contract with Luminant Generation Company LLC, Big Brown Power Company, LLC and Oak Grove Management Company, LLC (collectively, "Luminant") for approximately 150 MW of baseload power supplied by seven different units over 24 years and pre-paying a portion of the capacity costs associated with power purchased pursuant to the long-term contract; and WHEREAS, the City wishes to acquire a portion of its future electric energy pursuant to the PPA between CAPP and Luminant; and WHEREAS, to acquire power pursuant to the PPA, the City must enter into an electric power contract, the Energy Sales Contract Between CAPP and the City of North Richland Hills (the "Member Contract"), substantially in the form attached hereto; and WHEREAS, CAPP will issue general revenue bonds, with the bond proceeds used to pre-pay a portion of the 24-year capacity commitment pursuant to the PPA on behalf of the City and all participating CAPP members; and WHEREAS, bonds issued by CAPP will be backed by the individual Member Contracts of each participating CAPP city committing to pay a capacity payment equal to its proportionate amount of the debt service obligation associated with CAPP's prepayment of PPA capacity costs; and WHEREAS, the City's allocated total maximum capacity payment is $4,408,000 (total maximum monthly capacity payment is $30,000); and WHEREAS, the Member Contract requires that certain capacity payments payable by each participating CAPP member will be public property finance contractual obligations pursuant to Texas Local Government Code Chapter 271, Subchapter A, secured by a pledge of such member's ad valorem taxes, which will be assigned to support debt issued by CAPP to pay the capacity costs of the PPA; and WHEREAS, the fixed capacity component constitutes a long-term, general obligation tax debt of each participating member that is secured by a pledge of the member's ad valorem taxes; and WHEREAS, CAPP must secure an additional "wrap" agreement to arrange for power deliveries when needed to meet the remaining portion of the City's energy needs in excess of the base load power provided under the Member Contract, with said wrap agreement needing ratification/approval of the City; and WHEREAS, the resulting power supply blend adds to both stability and savings for the City; and WHEREAS, the total capacity and energy to be purchased under the long-term PPA cannot be known until all CAPP members have acted on their opportunity to participate in the transaction; and WHEREAS, a change in total capacity and energy obligated under the PPA will change the cost of the transaction and may change the percentage of debt service obligation and energy assigned to participating LAPP members; and WHEREAS, the PPA is an effort, initiated by CAPP pursuant to direction and support of its participating members, including the City, to diversify fuel sources and minimize the risk associated with complete reliance upon electric pricing linked to natural gas costs that are influenced by unpredictable weather, geo-political and global economic factors, but nonetheless the PPA involves a number of somewhat unique risks and uncertainties; and WHEREAS, CAPP has prepared and distributed a Disclosure Statement dated September 10, 2008, in the form attached hereto that identifies and describes certain risks (but may not describe all risks) associated with the transactions contemplated by the Member Contract and the PPA; and WHEREAS, the Disclosure Statement is to be acknowledged, signed, and returned to CAPP, prior to pricing of CAPP's bonds, if the Member Contract is approved; and WHEREAS, it is hereby officially found and determined that the meeting at which this ordinance was passed was open to the public, and public notice of the time, place and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code; and NOW, THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS: 1. The CAPP Member Contract, attached hereto and incorporated herein for all purposes is deemed necessary and desirable for the City to meet its proprietary functions and basic governmental responsibilities and is hereby approved. 2. The City acknowledges that the Member Contract requires that certain capacity payments payable by the City will be public property finance contractual obligations pursuant to Texas Local Government Code Chapter 271, Subchapter A, secured by a pledge of such member's ad valorem taxes, which will be assigned to support debt issued by CAPP to pay the capacity costs of the PPA; and the City further acknowledges that the fixed capacity component constitutes along-term, general obligation tax debt of the City that is secured by a pledge of the City's ad valorem taxes. 3. The City of North Richland Hills hereby acknowledges that it has reviewed the Member Contract and the Disclosure Statement dated September 10, 2008, and the City Manager, or other appropriate officer or staff person of the City, is authorized and directed to sign, date, and return by December 17, 2008, to CAPP both the Member Contract and such Disclosure Statement. 4. The City Manager, or other appropriate officer or staff person of the City, is authorized to approve modifications and corrections to the Member Contract that are necessary to conform to changes to the assigned cost in the PPA after all CAPP members have made decisions regarding participation in the long-term PPA, so long as no such changes increase the City's capacity payment obligations in any year from the amounts reflected in the Member Contract attached hereto. 5. The City Manager, or other appropriate officer or staff person of the City, is authorized to sign additional agreements arranged by CAPP for the provision of electricity during the period 2009-2011 that are necessary to meet the City's power needs that exceed the power arranged through the Member Contract with CAPP, with the understanding that any agreement for energy beyond 2009 is subject to the right of annual appropriation. 6. The City Manager, or other appropriate officer or staff person of the City, is hereby authorized, empowered and directed from time to time and at any time to do and perform all such acts and things and to execute, acknowledge and deliver in the name and under the corporate seal and on behalf of the City all such instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this ordinance, the Member Contract and the Disclosure. 7. The City Manager, or other appropriate officer or staff person of the City, is hereby authorized and directed to approve any changes or corrections necessary to this ordinance, the Member Contract or any ancillary agreement, certificate or document, prior to the initial delivery of the Member Contract in order to (i) correct any ambiguity or mistake or properly or more completely document the transactions contemplated and approved by this ordinance, (ii) approve any changes to the Member Contract as contemplated in the recitals hereto and Section 3 hereto, or (iii) obtain the approval of the Member Contract (and the debt issued by CAPP relating to the PPA) by the Texas Attorney General's office. 8. In case any officer of the City whose signature shall appear on the Member Contract shall cease to be such officer before the delivery of such Member Contract, such signature shall nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office until such delivery. 9. That if any one or more sections or clauses of this ordinance is adjudged to be unconstitutional or invalid, such judgment shall not affect, impair or invalidate the remaining provisions of this ordinance and the remaining provisions of the ordinance shall be interpreted as if the offending section or clause never existed. 10. The City hereby finds that the statements set forth in the recitals of this ordinance are true and correct, and the City hereby incorporates such recitals as a part of this ordinance. PASSED AND APPROVED on this the 8th day of December, 2008. By: CITY OF NORTH RICHLAND HILLS Oscar Trevino, Mayor ATTEST: Patricia Hutson, City Secretary APPROVED AS TO FORM AND LEGALITY: George A. Staples, City Attorney APPROVED AS TO CONTENT: Karen Bostic, Assistant City Manager ENERGY SALES CONTRACT BETWEEN CITIES AGGREGATION POWER PROJECT AND CITY OF NORTH RICHLAND HILLS, TEXAS ENERGY SALES CONTRACT BETWEEN CITIES AGGREGATION POWER PROJECT AND CITY OF NORTH RICHLAND HILLS, TEXAS TABLE OF CONTENTS Table of Contents Page ARTICLE 1 DEFINITIONS AND PRINCIPLES OF INTERPRETATION .....................4 1.1 Definitions .......................................................................................................... .4 1.2 Principles of Interpretation ............................................................................... 12 ARTICLE 2 CAPP'S OBLIGATIONS CONTINGENT UPON PERFORMANCE BY FACILITY OWNERS UNDER THE PPA; ASSUMPTION BY MEMBER ....... 12 2.1 Nature of CAPP's obligations to Member ......................................................... 12 2.2 CAPP's duty to exercise remedies under the PPA and Guaranty; power coupled with an interest .................................................................................... 13 2.3 Assumption of PPA by Member ....................................................................... 13 ARTICLE 3 TERM OF CONTRACT AND DELIVERY OF PRODUCTS 3.1 Term .................................................................................................................. 13 3.2 Delivery of Products ......................................................................................... 13 ARTICLE 4 PAYMENT OF CAPACITY PREPAYMENT TO FACILITY OWNERS ............................................................................................................... 14 ARTICLE 5 DELIVERY OF CONTRACT ENERGY ..... 5.1 Acquisition and Delivery of Product ................................................................ 14 5.2 Title and Risk of Loss ....................................................................................... 14 5.3 Member's Failure to Accept Product ................................................................ 14 5.4 Failure of Facility Owners to Schedule or Deliver Product to CAPP ............... 15 ARTICLE 6 PRICING OF AND PAYMENT FOR ENERGY ........................................ 15 6.1 Payment of Member's Monthly Aggregated Energy Payment ......................... 15 6.2 Payments through Retail Electric Provider and Designated Agent(s) .............. 18 6.3 Payments from Available Funds ....................................................................... 18 6.4 Intent to Continue Payments ............................................................................. 19 6.5 Failure to Appropriate Available Funds ........................................................... 19 6.6 Assignment Upon Failure to Appropriate ......................................................... 19 6.7 Appropriated Energy Payments to be Unconditional ....................................... 20 6.8 CAPP as Third Party Beneficiary ..................................................................... 20 6.9 Member's Default of the Energy Payment Covenants and CAPP's Remedies ........................................................................................................... 20 ARTICLE 7 CAPACITY PREPAYMENT, MEMBER' S MONTHLY CAPACITY PAYMENT AND PLEDGE OF AD VALOREM TAXES BY MEMBER.......... 22 7.1 Capacity Prepayment ........................................................................................ 22 7.2 Capacity Payment ............................................................................................. 22 7.3 Interest and Sinking Fund; Tax Levy for Monthly Capacity Payments........... 23 7.4 Prepayments based upon Early Termination under the PPA ............................ 23 7.5 LAPP and Trustee as Third Party Beneficiaries ............................................... 24 7.7 Member's Default on Capacity Prepayment and CAPP's Remedies ............... 24 ARTICLE 8 BILLING AND PAYMENT ......................................................................... 25 8.1 Invoice and Payment Schedules ........................................................................ 26 8.2 Method of Payment ........................................................................................... 26 8.3 Netting ............................................................................................................... 26 8.4 Disputed Charges .............................................................................................. 26 8.5 Audits ................................................................................................................ 27 8.6 ERCOT Barred Issue ........................................................................................ 27 ARTICLE 9 DESIGNATION OF MEMBER'S DELIVERY POINTS ............................27 9.1 Designation of Member's Delivery Points ........................................................ 27 ARTICLE 10 SECURITY .................................................................................................28 10.1 Security from Facilities Owners ....................................................................... 28 10.2 Collateral Assignment of the Contract to Trustee for Bonds ............................ 28 ARTICLE 11 DEFAULT ..................................................................................................28 11.1 Defaults by Facility Owners; Defaults by Participating Members ................... 28 11.2 Default by CAPP ............................................................................................... 28 11.3 Default by Member ........................................................................................... 29 11.4 Remedies of CAPP in the event of default by Member .................................... 30 11.5 Remedies of Member in the Event of Default by CAPP .................................. 31 11.6 No Waiver in Event of Default ......................................................................... 31 ARTICLE 12 INDEMNIFICATION; LIMITATION OF LIABILITY ............................32 12.1 Member's Indemnification of CAPP ................................................................ 32 12.2 Claims arising on Facility Owners side of the Facility Owners' Delivery Point .................................................................................................................. 3 2 12.3 Indemnified Claims ........................................................................................... 32 12.4 Limitation of Remedies, Liability and Damages .............................................. 32 ARTICLE 13 REPRESENTATIONS ............................................................................... .33 13.1 Mutual representations and warranties ............................................................. 33 ARTICLE 14 NOTICES ................................................................................................... .34 14.1 Notices .............................................................................................................. 34 ARTICLE 15 CONFIDENTIALITY ................................................................................ .35 15.1 Confidential Information .................................................................................. 35 ARTICLE 16 ASSIGNMENT .......................................................................................... .35 16.1 Assignment ....................................................................................................... 36 ARTICLE 17 CONTINUING DISCLOSURE ................................................................. .36 17.1 Continuing Disclosure Undertaking of Members ............................................. 36 17.2 Financial Statements ......................................................................................... 36 17.3 Change of Fiscal Year ....................................................................................... 36 17.4 Failure to Provide Continuing Disclosure ......................................................... 37 17.5 Amendment of Continuing Disclosure ............................................................. 37 ARTICLE 18TAX-EXEMPT BONDS ............................................................................ .37 18.1 Tax-Exempt Bonds ........................................................................................... 37 18.2 Agreement to Pay Beneficiary .......................................................................... 38 18.3 Financing ...........................................................................................................38 ARTICLE 19 MISCELLANEOUS ...................................................................................39 19.1 Applicable Law ................................................................................................. 39 19.2 Counterparts ......................................................................................................39 19.3 Waiver ...............................................................................................................39 19.4 Modification ......................................................................................................39 19.5 Severability ....................................................................................................... 39 19.6 Requirements ....................................................................................................39 19.7 Entirety ..............................................................................................................40 19.8 Captions, Titles and Headings .......................................................................... 40 19.9 Forward Contract .............................................................................................. 40 19.10 Further Assurances ............................................................................................ 40 19.11 Survival .............................................................................................................40 ENERGY SALES CONTRACT BETWEEN CITIES AGGREGATION POWER PROJECT AND CITY OF NORTH RICHLAND HILLS, TEXAS This Energy Sales Contract ("Contract") is executed on the date set opposite each signature below, effective, however, on December 17, 2008 ("Effective Date"), by and between the Cities Aggregation Power Project, Inc. ("CAPP"), a political subdivision corporation incorporated in the State of Texas, and the City of North Richland Hills ("Member''). CAPP and Member are collectively referred to herein as the "Parties", and individually as a "Party". RECITALS: Capitalized terms used herein not otherwise defined shall have the meanings set forth in Article 1 hereof. Member is a political subdivision of the State of Texas. Member is a member of CAPP. As the result of adoption of Senate Bill 7, enacted as Chapter 405, Acts of the 76th Legislature, Regular Session, 1999, municipalities now have the opportunity to competitively acquire electricity on more advantageous terms. This opportunity was the impetus for the creation of CAPP. CAPP was created to assist Member and the Participating Members in obtaining electricity used in such Members' own buildings and facilities by aggregating each Participating Member's electric load, and negotiating the best electric price based on the aggregated load. Recognizing that all retail sales in the Texas deregulated electric market have been based on the price of natural gas on the Nymex Futures Market, Member desires to diversify the sources of its electric supplies in order to mitigate potential price volatility associated with a single fuel source supply of electric energy. Member has a need for reliable electric energy at favorable and stable rates to fulfill its proprietary needs and governmental responsibilities in said buildings and facilities. Member desires to increase its bargaining power in the deregulated market for Energy by relying upon and combining with other participating CAPP member cities ("Participating Members") to negotiate for future sources of electricity. The Participating Members are listed on Exhibit "A" attached hereto and incorporated by this reference herein for all purposes. Member has determined to utilize the CAPP aggregation method of electric energy procurement for meeting the electric energy needs of governmental facilities that are located within its deregulated jurisdictional boundaries, as provided in this Contract. CAPP has identified a source of Energy from selected units in the Big Brown generating station in Freestone County, Texas ("Big Brown Facility'), Martin Lake generating station located in Rusk County, Texas ("Martin Lake Facility"), and Oak Grove generating station located in Robertson County, Texas ("Oak Grove Facility") that are owned, respectively, by Big Brown Power Company, LLC, Luminant Generation Company LLC and Oak Grove Management Company, LLC (collectively, the "Facility Owners"), and that CAPP believes will assist Member in (i) mitigating potential price volatility of Energy, and (ii) accessing a wholesale power supply to meet the base load requirements of Member and Participating Members for twenty-four (24) years, commencing on January 1, 2009 at 12:00:00 a.m. CPT ("Service Commencement Date") and ending at one minute before 12:01 a.m. on January 1, 2033 unless the agreement for the procurement of such Energy is terminated sooner as therein provided ("Term"). The Big Brown Facility, Martin Lake Facility, and Oak Grove Facility are collectively called the "Facilities". CAPP has entered into a Power Purchase Agreement with the Facility Owners in substantially the form attached hereto as Exhibit "B" and incorporated by this reference herein for all purposes ("PPA"), pursuant to which PPA, CAPP will contract to obtain 150 megawatts of Contract Capacity ("Contract Capacity") in the Facilities and access to wholesale power supplies to meet base load Energy needs of Member and Participating Members throughout the Term of the PPA. Certain obligations of the Facility Owners under the PPA have been partially guaranteed by Texas Competitive Electric Holdings Company, LLC ("TCEH") through execution of a Guaranty substantially in the form attached to the PPA, and TCEH and its subsidiaries have guaranteed the original leveraged buyout ("LBO") documents and the PPA is a secured obligation under such LBO documents and as such is subject to the guaranty provided therein. Member desires to acquire its Member Contract Energy Allocation in the Project from CAPP ("Member Capacity'). All Participating Members, including Member, have collectively contracted for and reserved the full Contract Capacity in the Facilities from CAPP. The PPA provides the terms for CAPP's purchase of all Contract Capacity from the Facility Owners for the benefit and on behalf of Member and Participating Members. As a result of negotiations with the Facility Owners it has been determined that substantial savings in energy costs based upon today's energy market and current forecasts of future market prices can be realized by purchasing capacity rights in the Facilities from the Facility Owners as provided in the PPA on or before the Service Commencement Date. CAPP has determined that it is in the best interests of Member and the Participating Members to prepay Facility Owners for Contract Capacity in the Facilities ("Capacity Prepayment") out of the proceeds of Bonds issued for such purpose by CAPP. Member and each of the other Participating Members in their respective Participant Contracts, agree to pay Member's Energy Allocation Percentage of the costs incurred by CAPP to issue the Bonds, pay the Capacity Prepayment to the Facility Owners, pay interest costs, establish a reserve, and pay all other costs, fees and charges that CAPP incurs under the Bonds directly to the Trustee, as hereinafter defined, until the Bonds are paid in full according to the payment schedule set forth in the Bonds. The Bonds shall be secured by the collateral assignment of this Contract and all Participant Contracts, as provided in this Gontract, including all rights of collection thereon, to the Trustee. A copy of the payment schedule is attached hereto as Exhibit "C" and incorporated by this reference herein for all purposes. Member acknowledges that CAPP shall additionally provide to Member at Member's expense, through Designated Agent(s), all services required and necessary to deliver the Energy from the Facility Owners Delivery Point to Member's Delivery Points, including all costs of transmission, distribution, and including all necessary tariffs, and fees as provided herein. Member agrees to the terms of this Contract, and consents to the terms of the PPA. In reliance thereon, and in reliance upon the acceptance and agreement of all other Participating Members, CAPP (i) has entered or shall enter the PPA for the benefit of Member and Participating Members, (ii) shall cause the Bonds to be issued, and (iii) shall cause the Capacity Prepayment to be paid to the Facility Owners as provided in the PPA. Accordingly, CAPP and Member have determined that it is in their mutual best interests to enter into this Contract as the means of providing Member with the Member Contract Energy Allocation for its base load needs during the Delivery Period described in Section 3.2, below. Other Participating Members have respectively entered or have committed to enter into contracts with CAPP that, when aggregated with this Contract, collectively account for all Contract Energy associated with the Contract Capacity in the Facilities during the Delivery Period that has or will be acquired by CAPP for the benefit of all Participating Members under the PPA. The Public Property Finance Act, Subchapter A, Chapter 271, Local Government Code, as amended (the "Act's, authorizes Member to execute, perform and make payments under contracts with any person for the use, acquisition or purchase of personal property as described in the Act, including the electricity provided for in this Contract. The Act permits the governing body of Member to execute contracts in any form deemed appropriate by said governing body in connection with the use, acquisition or purchase of personal property. Member desires to acquire electricity property pursuant to this Contract as described herein from CAPP, and such personal property is deemed by the governing body of Member to be necessary, useful, and/or appropriate for the purposes of Member as contemplated by Section 304.001, Government Code, as amended. In consideration of the mutual undertakings contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confessed, the Parties agree as follows: ARTICLE 1 DEFINITIONS AND PRINCIPLES OF INTERPRETATION 1.1 Definitions. The following capitalized terms shall have the following meanings assigned to them under this Contract unless the context shall clearly indicate otherwise: "Aggregated Expenses" shall mean the sum of charges to CAPP that are payable under the PPA to the Facility Owners and under a Wrap Contract for: (a) adjustments to the Capacity Prepayment under Section 4.2(b) of the PPA, (b) sums charged to CAPP under Section 3.3 of the PPA, (c) the amount of Disputed Charges that are payable by CAPP under Section 8.3 of the PPA or as a result of an Audit under Section 8.4 of the PPA, (d) sums payable by CAPP under Article 10 of the PPA, (e) sums, if any, required for the indemnity of the Facility Owners under Section 13.1 of the PPA, (f) Governmental Charges payable by CAPP pursuant to Section 20.1 of the PPA, (g) New Governmental Charges payable by CAPP pursuant to Section 20.2 of the PPA, (h) the cost of environmental improvements that are required to be paid by CAPP under the PPA, (i) any unforeseen non-recurring expenses approved by CAPP, and (j) the amount of any Seller Termination Payment due by CAPP to the Facility Owners pursuant to Article 12 of the PPA. The amount of Aggregated Expenses shall be reduced by (i) credits to the Capacity Prepayment under Section 4.2(a) of the PPA, (ii) credits under Section 3.4 of the PPA on account of the failure of the Facility Owners to deliver the Products to CAPP, and (iii) the amount of Disputed Charges that are payable by the Facility Owners to CAPP under Section 8.3 of the PPA or as a result of an Audit under Section 8.4 of the PPA. "Alternate Energy' has the meaning set forth in the PPA. "Appropriate", "Appropriated", and/or "Appropriation" means, with respect to any Energy Payment that Member is obligated to make under this Contract during a Fiscal Year, the adoption by the governing body of Member of a budget for such Fiscal Year that includes such payment. "Available Funds" means, when used to describe funds of Member, those funds of the Member which have been lawfully Appropriated, within the sole and uncontestable discretion of the Member, from current revenues and which may be expended, during the Fiscal Year for which Appropriated, for the purpose expressed in such Appropriation. "Bankrupt" means a Party that: (i) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar law, or has any such petition filed or commenced against it, (ii) makes an assignment or any general arrangement for the benefit of creditors, (iii) otherwise becomes bankrupt or insolvent (however evidenced and regardless of whether the bankruptcy or insolvency is voluntary or involuntary), (iv) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (v) is generally unable to pay its debts as they fall due. "Base Year" means an annual period determined by CAPP as of the Effective Date to be representative of the typical total current Energy requirements of all Participating Members. "Big Brown Facilit,~' means Unit 1 and Unit 2 of the Big Brown generating station located in Freestone County, Texas, with an appropriate cumulative Net Rated Capacity of 1203 megawatts as of the Effective Date. "Bonds" shall mean all contract revenue bonds issued by CAPP for the purpose of prepaying and funding the Capacity Prepayment plus cost of issuance of and reserve funds required to be maintained under such contract revenue bonds, said bonds to be secured by the pledge and assignment by CAPP to a trustee, pursuant to a trust agreement between CAPP and such trustee of the Capacity Prepayment Component of each Participating Member's contract, it being stipulated and agreed that this Contract and each Participant Contract constitutes a contract under Subchapter A of Chapter 271, Local Government Code, State of Texas, as amended, payable from such respective Participating Member's ad valorem taxes within the limits prescribed by law. "Business Dad' means any Day except a Saturday, Sunday, or a Federal Reserve Bank holiday. A Business Day shall open at 8:00 a.m. CPT and close at 5:00 p.m. CPT. "Capacity Prepayment'' has the meaning set forth in Section 7.1, below. "CAPP" shall mean the Cities Aggregation Power Project, a political subdivision corporation in Texas organized pursuant to Local Government Code Chapter 304 for the purpose of contracting for electric power for Participating Members and for assisting in procurement of REP and QSE services for governmental electric accounts of Participating Members. "Code" means Texas Local Government Code, Title 7, Chapter 271, Subchapter 1, Sections 271.151 through 271.160. "Contract" shall mean this Energy Sales Contract and all related exhibits, as same may be amended from time to time by the mutual written agreement of the Parties. "Contract Capacit}~' means 150 megawatts, being the Contract Capacity acquired by CAPP in the Facilities under the PPA on behalf of Member and the Participating Members. "Contract Energy' has the meaning set forth in the PPA. Additionally, the Parties understand that if, in any Settlement Interval, the output of one or more of the Facilities is less than its Net Rated Capacity, due to a Planned Outage or Forced Outage as provided in the PPA, the Contract Energy may be reduced. In such an event, CAPP shall only receive a share of the output as provided in the PPA. In such event, the reduced amount of output received by CAPP will be delivered to and apportioned between Member and the other Participating Members based on their respective Member's Energy Allocation Percentages. "Contract Price" has the meaning set forth in Section 6.1. "CPT' means central prevailing time. "Da,~' means the consecutive twenty-four (24) hour period beginning at 12:00:00 a.m. CPT on any calendar day and ending at 12:00:00 p.m. CPT on such calendar day. "Default'' has the meaning set forth in Article 11 hereof. "Defaulting Member" shall mean one or more Participating Members that default under a Participant Contract that has been collaterally assigned in whole or in part as security for the repayment of the Bonds. "Delivery Month" has the meaning set forth in the PPA. "Delivery Period" means that period of time in which Energy shall be delivered to CAPP as agent for Member as the Energy is delivered by the Facility Owners under the PPA, commencing on January 1, 2009 at 12:01:00 a.m. CPT and ending on the earlier of: (i) 12:01:00 a.m. CPT on January 1, 2033, (ii) the date and time that the PPA is terminated in accordance with its terms, or (iii) the date and time that this Contract is rightfully terminated in accordance with its terms. "Designated Agent(s)" means service providers such as, but not limited to, REPs, QSEs, and other market service product providers that are engaged from time-to-time by CAPP to act as agents for and representatives of CAPP, Member, and/or Participating Members for the purposes of: (i) receiving and accounting for Products delivered by Facility Owners under the PPA, and Energy that is delivered to Member and Participating Members under this Contract and Participant Contracts, (ii) remitting payments, including payments of ERGOT fees, transmission fees, congestion fees, QSE fees, REP charges, and tariffs, (iii) allocating costs between Member and Participating Members, and/or (iv) billing, netting, and collecting sums due under this Contract. "Effective Date" has the meaning set forth in the preamble of this Contract. "Energy' has the meaning set forth in the PPA. Energy Payment" means the product of the Energy Price times the number of megawatt hours delivered to Member . "Energy Price" has the meaning set forth in Section 6.1(a)(i). "ERGOT" shall mean the Electric Reliability Council of Texas, or its successor in function. "ERGOT Guides" means the then-current ERGOT Operating Guides, Market Guides, Protocols, Nodal Protocols, Transaction Guides, and/or ISO procedures, as they may be amended from time to time. "ESI-IDs" shall mean Electric Service Identifiers as defined in ERGOT Protocols, or their successor in function, same being the basic identifier assigned to each service delivery point used in the registration and settlement systems managed by ERCOT. "Facilities" means the Big Brown Facility, Martin Lake Facility, and upon COD of the Oak Grove Unit 1 and Oak Grove Unit 2, the Oak Grove Facility as defined and described in the PPA, including, with respect to each, the land, structures, fixtures, equipment, machinery, lignite, and related auxiliary equipment required to operate each such facility. "Facility Owner Delivery Points" means the point at a Facility at which Contract Energy is capable of being injected for the credit of CAPP into the ERCOT high voltage transmission system with Member and other Participating Members being fully responsible for reimbursing CAPP for any and all charges and assessments by ERCOT related to delivery of energy from the Facility Owner's Delivery Points into the ERCOT high voltage transmission system. "Facility Owners" shall mean Big Brown Power Company, LLC, Oak Grove Management Company, LLC, Luminant Generation Company, LLC, and their respective successors and assigns. "Fiscal Year" means the fiscal year of Member. "Forced Outage" has the meaning set forth in the PPA. "Governmental Authority' has the meaning set forth in the PPA. "Governmental Charges" has the meaning set forth in the PPA and which are charged to or payable by CAPP, including those Governmental Charges that survive the termination of the PPA. "Guarantor" shall mean Texas Competitive Electric Holdings Company, LLC, a Delaware limited liability company. "Guaranty" shall mean that certain Guaranty Agreement executed by Guarantor and delivered to CAPP at closing. "Interest and Sinking Fund" means that a special fund or account designated as the "City of North Richland Hills Electric Public Property Finance Contractual Obligation Interest and Sinking Fund", authorized, established and maintained in a depository bank of the Member, so long as the contractual obligation to make Monthly Capacity Payments hereunder are outstanding and unpaid. "kW' means kilowatt(s). "Lave' means (i) any law, legislation, statute, act, rule, ordinance, decree, treaty, regulation, order, judgment, or other similar legal requirement, and (ii) any legally binding announcement, directive or published practice or interpretation thereof, including but not limited to, ERCOT Guides, enacted, issued or promulgated by any Governmental Authority having jurisdiction over this Contract, the Facilities, and the delivery of Energy pursuant to this Contract. "Martin Lake Facility" means Unit 1, Unit 2, and Unit 3 of the Martin Lake generating station located in Rusk County, Texas, with an approximate cumulative Net Rated Capacity of 2,345 megawatts as of the Effective Date of the PPA. "Member Contract Energy Allocation" shall equal the product of the Member's Energy Allocation Percentage and the Contract Energy during each Delivery Month of the Delivery Period. "Member's Monthly Aggregated Energy Payment" has the meaning set forth in Section 6.1(a). "Member's Energy Allocation Percentage" is .76%, being calculated by multiplying 100 by a fraction, the numerator of which is Member estimated energy required during the Base Year, and the denominator of which is the estimated total energy requirement of all Participating Members during the Base Year. "Member's Delivery Points" shall be all ESI-IDs accounts that Member has for receipt of energy to the revenue meters of such Member that are metered and the light fixtures for street/outdoor lights or other accounts of such Member that are not metered. "Member's Unique Delivery Costs" shall have the meaning set forth in Section 6.1(b) hereof. "Monthly Capacity Payment" shall have the meaning set forth in Article 7 below. "Monthly Energy Payment" means the product of the Monthly Energy Price times Member's Energy Allocation Percentage times the megawatt hours delivered to CAPP by the Facility Owners during the Delivery Month. "Monthly Energy Price" means the price per megawatt hour as set forth in the PPA. "MW' means megawatt. "MWh" means megawatt hour. "New Governmental Charges" means (i) any Governmental Charges enacted and effective after the Effective Date, including without limitation, that portion of any Governmental Charges or New Governmental Charges that constitutes an increase or that cause the Facility or Facilities to incur additional or new expenses less Governmental Charges enacted or imposed prior to the Effective Date that are replaced by the New Governmental Charge and that become payable by CAPP under the PPA, (ii) any Law or interpretation thereof, enacted and effective after the Effective Date resulting in a new or additional expense to the Facility or the Facilities or the application of any Governmental Charges to a new or different class of parties and that become payable by CAPP under the PPA. "Oak Grove Facility" means, when the first commercial operation date is reached, Oak Grove Unit 1 and Oak Grove Unit 2 of the lignite coal- fired power generation facility known as the Oak Grove Generating Station located in Robertson County, Texas. "Ordered Backdown" has the meaning set forth in Section 5.2 of the PPA. "Participant Contracts" means those individual contracts between CAPP and a Participating Member under which such Participating Member is acquiring a portion of the Contract Energy that CAPP is acquiring for the benefit of all Members under the PPA. Such term has the same meaning as the term "Member Output Contract" in the PPA. This Contract is one of the Participant Contracts. "Participating Members" shall mean those members of CAPP that enter into contracts with CAPP for the procurement of electric energy from the Facilities. A list of Participating Members is attached to this Contract as Exhibit "A" and incorporated by this reference herein for all purposes. Member is one of the Participating Members. "Person" means a natural person, corporation, electric cooperative, partnership, trust, association, joint venture, real estate investment trust or business trust (including any beneficiary thereof), unincorporated association, Governmental Authority, and any other form of business or legal entity. "Planned Outage" has the meaning set forth in Section 6.1 of the PPA. "PPA" shall mean that certain Power Purchase Agreement between CAPP and the Facility Owners, a copy of which is attached hereto as Exhibit "B" and incorporated by this reference herein for all purposes. "Product" or "Products" means Contract Capacity, Contract Energy and Alternate Energy, if any, received by CAPP from the Facility Owners under the PPA. "QSE' means the entity which is responsible for performing the responsibilities defined for a Qualified Scheduling Entity under the ERCOT Guides, or their successor in function. "Regulatory Authorities" has the meaning found in the Utilities Code Vernon's Texas Codes Annotated. "REP" means Retail Electric Provider, as defined in ERCOT Protocols. "REP Services" shall mean all services that a REP provides that are associated with the provision of electric service to a retail customer by a REP in ERCOT. "Replacement Price" has the meaning in the PPA. "Resale Price" has the meaning in the PPA. "Service Commencement Date" has the meaning set forth in Section 3.2 hereof and shall be one minute before 12:01 a.m. CPT on January 1, 2009. "Settlement Interval" has the meaning as set forth in the ERCOT Guides. "Term" has the meaning set forth in Section 3.1 hereof. "Transmission Losses" means losses associated with the transmission of Energy under this Contract and under the PPA from resources used by (a) the Facility Owners to the Delivery Points for the respective Facility Owners, and (b) the Designated Agent(s) from the Facility Owners' Delivery Point to Member's Delivery Points as determined in accordance with the ERCOT Guides. "Transmission Service Provider" has the meaning found in the Utilities Code. "Trustee" means the trustee related to the Bonds pursuant to an indenture of trust with CAPP. "Unit" means each of the generating units at the Big Brown Facility, the Oak Grove Facility and the Martin Lake Facility that are then the subject of the PPA. "Unit Contingent Energy" means the Contract Energy supplied to CAPP for delivery to Participating Members from the Facilities under the terms of the PPA, for which non-delivery is excused if: (i) a Facility is unavailable as a result of a Forced Outage or a Planned Outage; (ii) CAPP fails to perform any of its obligations under the PPA; or (iii) an event of Force Majeure prevents delivery of such Energy to CAPP. "Wrap Contract" means any energy service contract executed by CAPP on behalf of Participating Members for electrical service requirements in addition to the PPA and other associated and ancillary services necessary to fulfill the full requirements for each of the Members electric power needs. 1.2 Principles of Interpretation. Unless the context requires otherwise, any reference in this Contract to any document means such document and all schedules, exhibits, and attachments thereto as amended and in effect from time to time. Unless otherwise stated, any reference in this Contract to any Person or Party includes its permitted successors and assigns and, in the case of any Governmental Authority, any Person succeeding to its functions and capacities. The words "hereof', "herein" and "hereunder" and words of similar import when used in this Contract, unless otherwise expressly specified, refers to this Contract as a whole and not to any particular provision of this Contract. The singular includes the plural, and the masculine includes the feminine and neuter genders. Whenever the term "including" is used herein in connection with a listing of items included within a prior reference, such listing shall be interpreted to be illustrative only, and shall not be interpreted as a limitation on or exclusive listing of the items included within the prior reference. The language used in this Contract is deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party. All times set forth in this Contract shall be construed to be CPT. ARTICLE 2 CAPP'S OBLIGATIONS CONTINGENT UPON PERFORMANCE BY FACILITY OWNERS UNDER THE PPA; ASSUMPTION BY MEMBER 2.1 Nature of CAPP's obligations to Member. Member agrees and understands that CAPP has entered or shall enter the PPA on behalf of Member and all Participant Members for the purpose of achieving the benefits set forth in the Recitals, above, including contracting for less than market prices for energy. Member understands that CAPP is not a power provider or power deliverer. Member agrees and understands that CAPP's obligation to perform its covenants under this Contract is absolutely contingent upon the performance of obligations of the Facility Owners and Guarantor to CAPP under the PPA, including, but not limited to, timely delivery of the Products in the quantities required under the PPA. 2.2 CAPP's duty to exercise remedies under the PPA and Guaranty; power coupled with an interest. In the event that the Facility Owners, without an excuse or right permitted under the PPA, fail to deliver the Products and/or fail to perform their obligations to CAPP as required under the PPA and Guaranty, then LAPP, on behalf of itself, Member, and the Participating Members, may exercise one or more of the remedies available to it under the PPA, the Guaranty, or both, as the Board of Directors of CAPP shall determine in its sole judgment and discretion. Ta the fullest extent necessary, Member hereby irrevocably appoints CAPP as its agent and attorney-in-fact to exercise such of the remedies available to CAPP under the PPA, that CAPP, in the sole judgment and discretion of its Board of Directors, believes to be the best interests of the Parties and Participating Members. Member agrees and understands that the power granted by it to CAPP in this Section 2.2 is and shall be construed to be a power coupled with an interest that cannot be revoked during the Term of this Contract. It is further agreed and understood that Member's obligation to pay the sums set forth in Article 6 and Article 7 on the dates set forth in Article 8, below, shall not be excused, offset, or mitigated on account of a default by Facility Owners under the PPA or by the failure of Facility Owners to deliver the Products. 2.3 Assumption of PPA by Member. Member agrees and understands that CAPP has entered or will enter into the PPA for the benefit of Member and Participating Members to the extent of their respective Member's Energy Allocation Percentages. For the consideration set forth in this Contract, Member assumes CAPP's obligations under the PPA, to the extent of Member's Energy Allocation Percentage, provided, however, that such rights and obligations shall be exercised on Member's behalf as the Board of Directors of CAPP shall determine in its sole and absolute discretion. ARTICLE 3 TERM OF CONTRACT AND DELIVERY OF PRODUCTS 3.1 Term. The term ("Term") of this Contract shall commence on the Effective Date, and shall continue until the later of: (a) January 1, 2033 at 12:00:00 a.m., or (b) the date that the Bonds have been repaid in full and all covenants required to be performed and all interest and costs required to be paid by CAPP under the Bonds have been performed and paid in full by CAPP. 3.2 Delivery of Products. A Member's Contract Energy Allocation of the Products shall be provided by CAPP to Member as set forth herein at 12:00:00 a.m. CPT on January 1, 2009 (the "Service Commencement Date") provided that the Products are then commenced to be delivered by Facility Owners to CAPP under the PPA. Thereafter, the Products shall be received by CAPP or its Designated Agent(s) for the benefit of and as agent for Member as the Products are delivered by Facility Owners under the PPA until the earlier of: (a) one second following 11:59:59 p.m. CPT on December 31, 2032, (b) the date that the PPA is terminated in accordance with its terms, or (c) the date that this Contract is terminated in accordance with its terms ("Delivery Period"). In the event that the Facility Owners fail to deliver all of the Products they are required to deliver under the PPA, Member shall be entitled to receive only Member's Energy Allocation Percentage of the Products actually delivered to and received by CAPP, net of Transmission Losses ARTICLE 4 PAYMENT OF CAPACITY PREPAYMENT TO FACILITY OWNERS Provided that the PPA has not been terminated by CAPP or by the Facility Owners prior to the Service Commencement Date pursuant to Article 11 of the PPA, CAPP shall pay or cause the Capacity Prepayment to be paid to Facility Owners on or before the date described in said Section 4.1(b) of the PPA. CAPP and Member stipulate and agree that the Capacity Prepayment shall be paid to the Facility Owners as required by the PPA, in whole or in part, from the proceeds of the Bonds, interest earned while such Bond proceeds are escrowed, and, as CAPP may elect, funds paid to CAPP by Member and Participating Members. ARTICLE 5 DELIVERY OF CONTRACT ENERGY 5.1 Acquisition and Delivery of Product. Upon the Service Commencement Date, CAPP shall require (i) Facility Owners to provide and deliver the Contract Energy described in the PPA to the Designated Agent(s) at the Facility Owners' Delivery Point, and (ii) the Designated Agent(s) to deliver Energy to Member at the Member's Delivery Points, in both cases from Products generated from the Facilities or acquired by the Facility Owners for delivery under the PPA as Alternate Energy pursuant to Section 5.3 of the PPA. 5.2 Title and Risk of Loss. Risk of loss of the Energy provided in accordance with this Contract shall transfer to CAPP as agent for Member and Participating Members at the Facility Owners' Delivery Points. Title to the Energy (subject to loss) shall be held by CAPP as agent for Member and Participating Members between the Facility Owners' Delivery Points and Member's Delivery Points. 5.3 Member's Failure to Accept Product. If Member fails to accept all or part of the Product under this Contract and such failure is not excused under the terms of this Contract or by failure of the Facility Owners to deliver same under the PPA, then Member shall pay to CAPP or to the Designated Agent(s) from time-to-time designated by CAPP, on the date payment would otherwise be due with respect to the month in which the failure occurred, an amount for each MWh of such deficiency equal to the positive difference, if any, obtained by subtracting the Resale Price from the Contract Price. The invoice for such amount shall include reasonable detail as to the calculation of such amount. 5.4 Failure of Facility Owners to Schedule or Deliver Product to CAPP. If one or more of the Facility Owners fail to schedule and/or deliver all or part of the Product as required by it under the PPA, and such failure is not excused under the terms of the PPA or by CAPP's failure to perform, then CAPP or the then- designated Designated Agent(s) shall, on behalf of all Participating Members, at the expense of and in the proportion of their respective Member's Energy Allocation Percentages, seek to collect sums from the Facility Owners that are recoverable pursuant to Section 3.4 of the PPA; provided, however, that any obligation by CAPP or by the Designated Agent(s), as the case may be, to pay Member in such event is limited to the amount that CAPP or the Designated Agent(s) actually collect from the Facility Owners and the Guarantor, net of costs of collection. For the avoidance of doubt, CAPP shall not be required to pay damages under this Section 5.4 when the failure to schedule and/or deliver is excused under the definition of Unit Contingent Energy. ARTICLE 6 PRICING OF AND PAYMENT FOR ENERGY 6.1 Payment of Member's Monthly Aggregated Energy Payment. In consideration for the Energy received by it under this Contract, Member shall pay Member's Monthly Aggregated Energy Payment to CAPP, or to the Designated Agent(s), as the case may be, on or before the dates for payment set forth in Article 8, below, and calculated as follows: (a) Calculation of Member's Monthly Energy Payment. Commencing on the Service Commencement Date, and continuing during each Delivery Month during the Term, but subject to annual appropriation therefore by Member during such Member's Fiscal Year, Member shall pay to LAPP, or to the Designated Agent(s) from time-to-time designated by it, the Member's Monthly Energy Payment, as computed monthly pursuant to the provisions of this Section 6.1(a). The Member's Monthly Energy Payment shall be the sum of (i) the Energy Component of Member's Energy Payment and (ii) the Aggregated Expenses Component of Member's Energy Payment, both determined as follows: (i) Energy Component of Member's Monthly Energy Payment. The price of Energy deliverable to CAPP under the PPA at the Facility Owners' respective Delivery Points during the Delivery Month as provided in the PPA is set forth in the schedule attached hereto as Exhibit "D" and incorporated herein by reference herein for all purposes. The Parties recognize that the PPA calls for the Contract Energy to be delivered to CAPP at the Facility Owners' respective Delivery Points at which points the Energy Payment is measured and calculated pursuant to Section 4.1(a) of the PPA. The Wrap Contracts shall provide that the cost of energy delivered to Member will be measured at Member's Delivery Points. The price of energy deliverable to CAPP under the Wrap Contracts shall be at a price determined by negotiations at that time. Member recognizes that the Energy Component in the monthly invoices will reflect a blended rate per MWh taking into account the Energy provided to all Participating Members under all energy procurement contracts and shall include (1) the cost of Contract Energy; (2) ancillary services under Section 3.5 of the PPA; (3) the cost of engaging a QSE under Section 7.1 of the PPA or under any Wrap Contracts; (4) the cost of engaging a REP under the PPA or under any Wrap Contracts; (5) the cost of delivering the Contract Energy to the Delivery Points of all Participating Members from the Facility Owners' respective Delivery Points; and (6) the cost of energy and other expenses associated with one or more Wrap Contract. The Energy Component of Member's Monthly Energy Payment shall be computed as the product of such blended rate and the total Energy delivered to Member's Points of Delivery during the billing month. (ii) Aggregated Expenses Component of Member's Monthly Energy Payment. The total Aggregated Expenses for each Delivery Month shall be allocated and apportioned between Member and each of the other Participating Members based upon each Member's Energy Allocation Percentage. The total amount so allocated to Member shall be billed to Member on a monthly basis by CAPP or its Designated Agent(s) as they shall determine appropriate. (b) Member's Unique Delivery Costs. The Parties further recognize that Member and each of the Participating Members require delivery of the Energy by the Designated Agent(s) from the Facility Owners Delivery Point to their respective Member's Delivery Points, the cost of which may vary between Participating Members based on a number of factors, including, but not limited to, distance from the Facility Owners Point of Delivery, differing zones into which Energy shall be delivered, different tariffs that may change from time to time as ordered by Regulatory Authorities, loss of Energy during transmission, and differing contractual arrangements that must be made to effect the delivery of Energy to the required points of delivery. In this connection, CAPP shall, as agent for Participating Members (including Member) (i) enter into one or more contracts with Designated Agent(s) for delivery of the Products to all Participating Members from the Facility Owners Delivery Point to each of their respective Member's Delivery Points, and (ii) require the Designated Agent(s) to separately account to and bill each Participating Member for the unique costs that are associated with delivery of the Energy from the Facility Owners Point of Delivery. Commencing on the Service Commencement Date, and continuing during each Delivery Month during the Term, but subject to annual appropriation therefore by Member during such Member's Fiscal Year, Member shall pay to CAPP or to the Designated Agent(s) from time-to-time designated by it the Member's Unique Delivery Costs. The Member's Unique Delivery Costs shall be due and payable at the same time that the Member's Aggregated Monthly Energy Payment is due.Governmental Charges and New Governmental Charges. Member shall pay or cause to be paid all Governmental Charges on or with respect to the Product at and from the Facility Owners' Delivery Points. In the event CAPP and/or the Designated Agent(s) are required by Law to remit or pay Governmental Charges which are Member's responsibility hereunder, or in the event that LAPP must remit or pay to Facility Owners for Governmental Charges that it may pass through to CAPP for reimbursement under the PPA, CAPP shall notify Member of the amount of Governmental Charges owed, whether such payment is to Facility Owners or to the governmental entities that made such Governmental Charges, on Member's behalf. Such notice shall be provided in a commercially practicable manner and may be provided by a Designated Agent. Notwithstanding any other provision of this Contract to the contrary, if a New Governmental Charge (as defined in the PPA) is passed through to CAPP for reimbursement, including but not limited to New Governmental Charges imposed on all coal and lignite generating facilities in ERCOT, including the Product, and CAPP's share of any such New Governmental Charge is greater than the Materiality Threshold set forth in the PPA (after taking into account the application of any entitlements and the extent of old charges that are replaced by the New Governmental Charge), such charges shall be treated as though they were incurred by CAPP for the benefit of all Participating Members (including Member). All Governmental Charges and New Governmental Charges shall be apportioned between Member and the Participating Members as an energy charge reflected on monthly bills from a Designated Agent. If, as, and when CAPP pays Governmental Charges and New Governmental Charges, it shall be deemed to have paid same on behalf of Member and all Participating Members in the proportion stated immediately above, and Member shall pay CAPP and/or the Designated Agent(s) its proportionate share, subject, however, to Appropriation by Member during Member's Fiscal Year. The obligation to pay such Governmental Charges and New Governmental Charges shall continue until such time as reimbursement of Facility Owners therefore are no longer required by the PPA. (d) Adjustments. Section 4.2 of the PPA provides for monthly adjustments if the Equivalent Availability Factor for such month is greater or less than 90%. It is the intention of the Parties to this Contract that (i) such credits and supplemental payments shall be allocated and passed through to Member and each of the other Participating Members, on a pro rata basis, in the month payable or credited against the Energy Payment based on an energy basis and (ii) the Designated Agent responsible for billing shall net the adjustments under Section 4.2 of the PPA against other amounts owed. It is understood that Member's obligation to pay any adjustments under this Section 6.1(d), as part of an Energy Payment or Payments, is subject to appropriation by Member during Member's Fiscal Year. (e) Other Adjustments. In the event that inequities arise between Participating Members or between Member and Participating Members in energy based allocation of credits and supplemental charges under this or other energy contracts, the Board of Directors of CAPP, in its sole discretion, may direct further adjustments as necessary to preserve the integrity of the allocation process and relative economic position of Member and Participating Members; provided, however, no adjustments shall affect the obligation to make Capacity Payments under Article 7 of this Contract. 6.2 Payments through Retail Electric Provider and Designated Agent(s). LAPP reserves the right to bill and invoice Member and Participating Members for the Contract Price, collect sums due by Member and Participating Members under Article 6, pay sums to Facility Owners that CAPP is required to pay pursuant to the terms of the PPA, collect payments and credits due to CAPP by the Facility Owners, and allocate and distribute credits and payments received from Facility Owners and third parties to Member and Participating Members as their respective interests appear through a REP or through Designated Agent(s). Notwithstanding the foregoing, it is expressly agreed and understood that (a) the Capacity Payments required to be paid by Member pursuant to Section 7, below, must be paid by Member directly to CAPP or the Trustee, and (b) payments received by CAPP or by Member from the Facility Owners, Guarantor, or any of same as a result of Early Termination of the PPA as defined in and calculated under Article 12 of the PPA must be paid by the recipient of such payments directly to CAPP or the Trustee for application to the Bonds. 6.3 Payments from Available Funds. Notwithstanding any provision herein to the contrary, the obligations of Member under this Contract to make Energy Payments shall be payable solely from the Available Funds received in each Fiscal Year during the Term of this Contract. The obligation of the Member to make any Energy Payments pursuant to this Contract shall constitute a current expense of Member during each Fiscal Year and shall not constitute an indebtedness of Member within the meaning of the laws of the State of Texas. Nothing in this Contract shall constitute a pledge by the Member of any taxes or other money, other than such funds so Appropriated and received in each Fiscal Year during the Term of this Contract and constituting Available Funds, to the payment of any Energy Payment due or to become due hereunder. 6.4 Intent to Continue Payments. Member presently intends to continue this Contract for the entire Term and to pay all Energy Payments required hereunder. Member presently intends to Appropriate, from lawfully Available Funds received in each Fiscal Year, money sufficient to pay the Energy Payments required hereunder. However, Member has no obligation to, and makes no representation that it will, Appropriate or seek to Appropriate in any Fiscal Year Available Funds for the payment of Energy Payments due pursuant to this Contract. 6.5 Failure to Appropriate Available Funds. If, for any Fiscal Year of the Member, the Member does not Appropriate Available Funds received during such Fiscal Year to pay the Energy Payments required under this Contract due and payable by Member during the succeeding Fiscal Year, and if the Member provides CAPP with written notice of such failure to Appropriate thirty (30) days prior to the expiration of Member's then-current Fiscal Year, the obligation to take electric Energy from CAPP under this Contract and make Energy Payments for such electric energy shall terminate and be canceled at the end of such current Fiscal Year for the period of the next Fiscal Year for which the Member has failed to Appropriate Available Funds. The written notice shall be accompanied by a statement as to whether or not Member has made an assignment to another Participating Member under Section 6.6 hereof. The Member may Appropriate Available Funds for any subsequent Fiscal Year for Energy Payments due during such subsequent Fiscal Year and then shall be entitled to receive electric Energy from CAPP under this Contract for such Fiscal Year. 6.6 Assignment Upon Failure to Appropriate. For any Fiscal Year which the Member has failed to Appropriate for Energy Payments (or portion thereof), the Member may assign to another Participating Member all or a portion of such non-appropriating Member's right to receive electric energy for such Fiscal Year provided the Participating Member certifies to CAPP that the assigned electric energy will be utilized by such Participating Member for its buildings and facilities, in compliance with the Local Government Code Chapter 304. The Energy Payments associated to such assigned right to such electric energy shall be calculated according to the terms of this Contract (assuming the Member was receiving such electric energy). At such time the Member provides written notice of its failure to Appropriate for Energy Payments for any Fiscal Year, the Member may also give written notice to LAPP of its assignment of all or a portion of its right to receive electric energy under this Contract, including a written agreement between the Member and the Participating Member reflecting the terms and conditions of such assignment. Prior to the beginning of the relevant Fiscal Year, the assuming Participating Member must provide CAPP written notice of (i) its Appropriation for the Energy Payments associated with the assumed electric energy for the period of the non-appropriating member's Fiscal Year which such non-appropriation is applicable (or portion thereof), (ii) certification that such assumed electric energy will be utilized by such Participating Member for its buildings and facilities, in compliance with the Local Government Code Chapter 304 and (iii) a valid and binding assignment agreement between the Member and the Participating Member. If the Member failing to appropriate for Energy Payments does not assign the Energy to another Participating Member within 30 days following the failure to Appropriate, Member shall assign the Energy to CAPP, and CAPP shall have the right to assign to a Participating Member, or to otherwise dispose of the Energy in a commercially practicable manner. 6.7 Appropriated Energy Payments to be Unconditional. Except as provided herein, including Section 6.3 hereof, the obligation of Member to make Energy Payments each Fiscal Year from funds that have been appropriated for such purpose when due shall be absolute and unconditional. Notwithstanding any dispute between Member and CAPP or any other Participating Member or person, the Member shall make all Energy Payments required hereunder when due and shall not withhold any such payments pending final resolution of such dispute, nor shall Member assert any right of set-off or counterclaim against its obligation to make such payments required under this Contract. Member's obligation to make Energy Payments during the Term shall not be abated because of accident or unforeseen circumstances. However, nothing herein shall be construed to release CAPP from the performance of its obligations hereunder; if CAPP should fail to perform any such obligation, Member may institute such legal action against CAPP as Member may deem necessary to compel the performance of such obligation. Notwithstanding anything to the contrary above, Member's obligation to pay Energy Payments shall not require it to pay Energy Payments from any source other than Available Funds specifically appropriated by Member for payment of the Energy Payments. 6.8 CAPP as Third Party Beneficiary. Member acknowledges that CAPP is an intended third party beneficiary of all Appropriations made by Member for sums described in this Article 6. As part of the consideration for this Contract, Member grants to CAPP and to any Designated Agent(s) appointed by CAPP all rights to enforce, by a mandamus action against Member and its governing body, such provisions for each Fiscal Year of Member for which there has been an Appropriation as contemplated in this Article. 6.9 Member's Default of the Energy Payment Covenants and CAPP's Remedies. (a) Events of Default. Each of the following occurrences or events for the purpose of this Contract is hereby declared to be a Default: (i) The failure to make payment of the Energy Payment when the same becomes due and payable; or (ii) Default in the performance or observance of any other covenant, agreement or obligation of the Member, the failure to perform which materially, adversely affects CAPP, including, but not limited to, its prospect or ability to be repaid in accordance with this Contract, and the continuation thereof for a period of 30 days after notice of such default is given by CAPP or Trustee to the Member. (b) Remedies for Default. (i) Upon the occurrence of a Default, then and in every case, CAPP or an authorized representative thereof may proceed against the Member, or any official, officer or employee of the Member in their official capacity, for the purpose of protecting and enforcing the rights of CAPP under this Contract, by mandamus or other suit, action or special proceeding in equity or at law, in any court of competent jurisdiction, for any relief permitted by law, including the specific performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right of CAPP hereunder or any combination of such remedies. (ii) It is provided that all such proceedings shall be instituted and maintained for the benefit of CAPP. (c) Remedies Not Exclusive. (i) No remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other provision of this Contract, the right to accelerate the Energy Payments shall not be available as a remedy under this Contract. (ii) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. The failure to exercise a remedy upon a Default shall not be deemed to be a waiver of the right to exercise such remedy in the future. (iii) By accepting the delivery of Energy Payment authorized under this Contract, CAPP agrees that the certifications required to effectuate any covenants or representations contained in this Contract do not and shall never constitute or give rise to a personal or pecuniary liability or charge against the officers, employees or trustees of the Member. (iv) No official or officer, agent, or employee of the Member, shall be charged personally by CAPP or the Trustee with any liability, or be held personally liable under any term or provision of this Contract, or because of a Default or Default under this Contract. ARTICLE 7 CAPACITY PREPAYMENT, MEMBER'S MONTHLY CAPACITY PAYMENT AND PLEDGE OF AD VALOREM TAXES BY MEMBER 7.1 Capacity Prepayment. In order to procure Energy at favorable rates produced in the Facilities by the Facility Owners under the PPA, CAPP, at the request of Member and the other Participating Members, shall (i) prepay to Facility Owners the sum of $465,000,000.00 (the "Capacity Prepayment's from the proceeds of the Bonds (ii) establish a reserve fund under the Bonds as may be required for issuance of the Bonds, and (iii) pay costs and charges associated with issuance of the Bonds, including legal fees, accounting fees, and consultant's fees engaged by the bond issuer, bond counsel, and CAPP. The Capacity Prepayment shall be paid to Facility Owners as provided in Section 4.1 hereof and as provided in Section 4.1(b) of the PPA. Once the actual amount of the Bonds and the interest rate established thereunder are known, this Contract shall be amended by CAPP and Member to reflect such facts, and to stipulate the amount of Member's Monthly Capacity Payment. It is the intention of the Parties that CAPP shall receive from Member and each Participating Member through the Monthly Capacity Payment set forth in Section 7.2(a), based upon the Member's Energy Allocation Percentage of each, the amount sufficient to pay: (i) CAPP's costs to issue the Bonds, (ii) the principal and redemption premium, if any, of and interest on the Bonds, (iii) trustee and other administrative fees, and (iv) other costs associated therewith. 7.2 Capacity Payment. (a) Member shall pay CAPP, its Designated Agent or the Trustee, as CAPP shall direct, upon the assignment of all or a portion of this Contract by CAPP to such trustee, a Monthly Capacity Payment for each Delivery Month throughout the remainder of the Term, or until such earlier date as such Monthly Capacity Payments have been prepaid or otherwise fully defeased as provided in Section 7.4 hereof, in an amount equal to the amount shown in Exhibit "E" times the Member Energy Allocation Percentage. (b) It is hereby certified and covenanted that the contractual obligation to make the Monthly Capacity Payments when due, as described in subsection (a) above, has been duly and validly authorized and delivered; that all acts, conditions and things required or proper to be performed, exist and be done precedent to or in the authorization and delivery of this Contract have been performed, existed and been done in accordance with law; that the contractual obligation to make the Monthly Capacity Payments herein is a limited tax obligation of Member; and that annual ad valorem taxes, within the limits prescribed by law, sufficient to provide for the payment of the Monthly Capacity Payments, as such payments come due, have been levied and ordered to be levied against all taxable property in Member, and have been pledged from Member's annual ad valorem maintenance tax for such payment, within the limit prescribed by law. (c) It is understood and agreed that all Monthly Capacity Payments payable by the Member under this Article 7 are assigned by CAPP to the Trustee for the benefit of the Owners of the Bonds. The Member assents to such assignment. 7.3 Interest and Sinking Fund; Tax Levy for Monthly Capacity Payments. The Interest and Sinking Fund shall be kept separate and apart from all other funds and accounts of Member, and shall be used only for paying the Monthly Capacity Payments when due. All ad valorem taxes levied and collected for and on account of the Monthly Capacity Payments shall be deposited, as collected, to the credit of the Interest and Sinking Fund. During each Fiscal Year while a Monthly Capacity Payment is outstanding and unpaid, the governing body of the Member shall compute and ascertain a rate and amount of ad valorem tax which together with any other lawfully available funds that are on deposit in the Interest and Sinking Fund at the time of such levy will be sufficient to provide and maintain a sinking fund adequate to pay the Monthly Capacity Payments as such payments become due (but never less than 2% of the original aggregate amount of the Monthly Capacity Payments as a sinking fund each year); and said tax shall be based on the latest approved tax rolls of the Member, with full allowance being made for tax delinquencies and the cost of tax collection. Said rate and amount of ad valorem tax is hereby levied and is hereby ordered to be levied, against all taxable property in the Member for each year while any of the Monthly Capacity Payments are outstanding and unpaid; and said tax shall be assessed and collected each such year and deposited to the credit of the aforesaid Interest and Sinking Fund. Said ad valorem taxes to be sufficient to provide for the payment of the Monthly Capacity Payments, as such payments come due, are hereby pledged for such payment, within the limit prescribed by law. 7.4 Prepayments based upon Early Termination under the PPA. In the event that CAPP shall receive a Buyer Termination Payment under Article 12 of the PPA, such amount shall be assigned and paid to the Trustee for payment on the Bonds with such payment to be applied to a prorata redemption of all outstanding maturities of such Bonds. Such prorata redemption on the Bonds shall similarly be applied prorata to reduce Member's Monthly Capacity Payments and the Monthly Capacity payments of other Participating Members. If any balance of the Bonds remains unpaid after application of the Buyer Termination Payment, then notwithstanding the obligation to pay the Monthly Capacity Payment under Section 7.2 above, Member shall pay Member's Energy Allocation Percentage of such balance within thirty (30) days following receipt of notice from CAPP. 7.5 CAPP and Trustee as Third Party Beneficiaries. Member acknowledges that CAPP and Trustee are intended third party beneficiaries of the obligation to pay Monthly Capacity Payments and to make provision for payment from ad valorem tax revenues. As part of the consideration for this Contract, Member grants to CAPP and to Trustee all rights to enforce, by a mandamus action against Member and its governing body, the provisions and obligations of this Article 7. 7.6 Monthly Capacity Payments to be Unconditional. Except as provided herein, including Section 6.3 hereof, the obligation of Member to make Monthly Capacity Payments when due shall be absolute and unconditional. Notwithstanding any dispute between Member and CAPP or any other Participating Member or person, the Member shall make all Monthly Capacity Payments required hereunder when due and shall not withhold any such payments pending final resolution of such dispute, nor shall Member assert any right of set-off or counterclaim against its obligation to make such payments required under this Contract. Member's obligation to make Monthly Capacity Payments during the Term shall not be abated because of accident or unforeseen circumstances. However, nothing herein shall be construed to release CAPP from the performance of its obligations hereunder; if CAPP should fail to perform any such obligation, Member may institute such legal action against CAPP as Member may deem necessary to compel the performance of such obligation. 7.7 Member's Default on Capacity Prepayment and CAPP's Remedies. (a) Events of Default. Each of the following occurrences or events for the purpose of this Contract is hereby declared to be a Default: (i) The failure to make payment of the Capacity Prepayment when the same becomes due and payable; or (ii) Default in the performance or observance of any other covenant, agreement or obligation of the Member, the failure to perform which adversely affects CAPP, including, but not limited to, its prospect or ability to be repaid in accordance with this Contract, and the continuation thereof for a period of 30 days after notice of such default is given by CAPP or Trustee to the Member. (b) Remedies for Default. (i) Upon the happening of a Default, then and in every case, CAPP or an authorized representative thereof, including, but not limited to, the Trustee, may proceed against the Member, or any official, officer or employee of the Member in their official capacity, for the purpose of protecting and enforcing the rights of CAPP under this Contract, by mandamus or other suit, action or special proceeding in equity or at law, in any court of competent jurisdiction, for any relief permitted by law, including the specific performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right of CAPP hereunder or any combination of such remedies. (ii) It is provided that all such proceedings shall be instituted and maintained for the benefit of CAPP and/or owners of the Bonds. (c) Remedies Not Exclusive. (i) No remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other provision of this Contract, the right to accelerate the PPA Capacity Payments shall not be available as a remedy under this Contract. (ii) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. The failure to exercise a remedy upon a Default shall not be deemed to be a waiver of the right to exercise such remedy in the future. (iii) By accepting the delivery of the Capacity Prepayment authorized under this Contract, CAPP agrees that the certifications required to effectuate any covenants or representations contained in this Contract do not and shall never constitute or give rise to a personal or pecuniary liability or charge against the officers, employees or trustees of the Member. (iv) No official or officer, agent, or employee of the Member, shall be charged personally by CAPP or the Trustee with any liability, or be held personally liable under any term or provision of this Contract, or because of a Default or Default under this Contract. ARTICLE 8 BILLING AND PAYMENT 8.1 Invoice and Payment Schedules. CAPP shall cause the Designated Agent(s) to submit invoices to Member for the Contract Price. All such invoices under this Contract shall be due and payable in accordance with the invoice instructions of the Designated Agent(s) consistent with ERCOT protocols, Rules of the Public Utility Commission of Texas, and contractual agreements between LAPP and Designated Agents. LAPP will cause the Designated Agent(s) to render to Member a separate invoice for the Contract Price for each ESI-ID on a billing month basis. All Monthly Capacity Payment invoices under this Contract pursuant to Article 7, shall be separately due and payable directly to CAPP or the Trustee in accordance with the invoice instructions of CAPP, Trustee or Designated Agent. 8.2 Method of Payment. Each Party will make payments by electronic funds transfer, or by other mutually agreeable method(s), to the account designated by the other Party. Any amounts not paid by the due date will be deemed delinquent and will accrue interest at the Interest Rate, such interest to be calculated from and including the due date, but excluding the date the delinquent amount is paid in full. Because certain charges are aggregated between Member and Participating Members, Member understands that a failure to timely pay an invoice may result in additional costs, interest charges, and damages that CAPP may be required to pay to Facility Owners under the PPA and that are disproportionate to the default by Member. Member agrees, in the event of its default, to reimburse CAPP for all costs, interest charges, and damages that it may be required to pay to Facility Owners that result from Member's default under this Contract. Except for Capacity Payments that are required to be paid by Member directly to CAPP or the Trustee, CAPP may require Member to pay all or any of the payments required to be paid by Member under this Contract to Designated Agent(s) appointed by LAPP. 8.3 Netting. Member understands that CAPP and Facility Owners have agreed to discharge mutual debts and payment obligations due and owing to each other on the same payment due date pursuant to the PPA through netting, so that only the excess amount remaining due shall be paid by the Party who owes such excess amount. All payment obligations of the Parties and all rights to receive payment under this Contract are subject to the netting provisions contained in the PPA. Additionally, it is understood that Designated Agents may net credits and supplemental payments in monthly invoices of the Contract Price. 8.4 Disputed Charges. A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice, rendered under this Contract or adjust any invoice for any arithmetic or computational error within twenty-three (23) months of the date the invoice, or adjustment to an invoice, was rendered, except when a dispute is limited by ERCOT protocols, Rules of the Public Utility Commission or contracts between CAPP and Designated Agents. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due, with notice of the objection given to the other Party. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved unless CAPP is required to pay the disputed amount to Facility Owners under the PPA. Upon resolution of the dispute, any required payment shall be made within five (5) Business Days of such resolution (along with interest accrued, if any, on account thereof under the PPA). Inadvertent overpayments shall be returned upon request or deducted by the Party receiving such overpayment from subsequent payments, with interest accrued only to the extent it accrues under the PPA. Any dispute with respect to an invoice is waived unless the other Party is notified in accordance with this Section 8.4 within twenty-three (23) months or shorter period if required by ERGOT protocols, Rules of the Public Utility Commission or contracts between CAPP and Designated Agents after the invoice is rendered or any specific adjustment to the invoice is made. 8.5 Audits. Each Party has the right, at its sole expense and during normal working hours, to examine copies of the relevant portions of the records of the other Party to the extent reasonably necessary to verify the accuracy of any invoice, charge or calculation made pursuant to this Contract. If any such examination reveals any inaccuracy in any invoice or calculation, the necessary adjustments in such invoice or calculation, and the payment of any adjustment thereto, shall be paid, with interest at the Interest Rate calculated from the date the overpayment or underpayment was made until paid, by the responsible Party pursuant to the terms of the PPA, the Wrap Contract or the applicable contract between CAPP and Designated Agents. 8.6 ERGOT Barred Issue. It is recognized by the Parties that ERGOT has some established time periods for disputing certain matters and the Parties expressly desire to be bound by such periods in their performance under this Contract. Therefore, notwithstanding any provisions in Article 7 of this Contract to the contrary, in the event CAPP is barred from disputing and correcting or adjusting with ERGOT any matter of any nature whatsoever affecting any matter covered by this Contract (an "ERGOT Barred Issue"), then Member shall be barred for all purposes from disputing any portion of any statement, invoice, notice or other matter hereunder to the extent that CAPP is unable to receive adjustment from or dispute such matter with ERGOT because such statement, invoice, notice or other matter is an ERGOT Barred Issue, even if Member's notice is given within the twenty-three (23) months' period set forth in this Article 8. ARTICLE 9 DESIGNATION OF MEMBER'S DELIVERY POINTS 9.1 Designation of Member's Delivery Points. Member has designated its initial Member's Delivery Points by identifying the ESI-IDs and providing that information to CAPP's Designated Agent(s). Such Member's Delivery Points are all points of receipt for electric service that are subject to retail choice. Member shall have a continuing obligation to provide CAPP and Designated Agent(s) with an updated listing of ESI-IDs by location and profile type. ARTICLE 10 SECURITY 10.1 Security from Facilities Owners. The Facility Owners and Guarantor have agreed under Article 9 of the PPA to provide CAPP a first lien on certain collateral on a pari passu basis with other creditors. Member acknowledges that it has no direct right to enforce the lien, nor does it have any individual interest in the Facilities in the event of foreclosure of the first lien, nor may it exercise remedies available to CAPP under the PPA. To the extent that CAPP shall determine that it is in CAPP's interest to (i) agree to renewals, modifications, amendments, and refinancing of the first lien indebtedness described in the PPA, (ii) exercise or fail to exercise one or more remedies available to it under the PPA, or (iii) terminate or modify the PPA, Member irrevocably appoints the Board of Directors of CAPP as its agent and attorney in fact to enter into agreements appropriate to the situation, including, but not limited to, agreements to substitute collateral, and agreements to release or partially release liens. The power herein granted to LAPP and its Board of Directors by Member is a power coupled with an interest that may not be revoked while all or any portion of the Bonds is unpaid. 10.2 Collateral Assignment of the Contract to Trustee for Bonds. This Contract and the Participant Contracts shall be collaterally assigned to the Trustee under the Bonds as security for the repayment of the Bonds to the extent of the Capacity Payment payable pursuant to Article 7 of this Contract and each of Participant Contracts. ARTICLE 11 DEFAULT 11.1 Defaults by Facility Owners; Defaults by Participating Members. In the event of default by Facility Owners under the PPA, or in the event of a default by Member or by a Participating Member under a Participant Contract, the Parties agree and stipulate that decisions as to the exercise or non-exercise of remedies upon such default shall be solely vested in CAPP, as its Board of Directors may determine from time to time. Member acknowledges that CAPP's rights to elect remedies may be subject and subordinate to rights granted to or reserved by the holders and owners of the Bonds or the Trustee thereof. 11.2 Default by CAPP. Except as otherwise excused under this Contract, the occurrence of any of the following shall constitute an event of default by CAPP: (a) Failure of CAPP to pay the Capacity Prepayment as required under the PPA; (b) Failure by CAPP to timely perform its covenants under the Bonds, including payments required by it, unless such failure is caused by the failure of Member under this Contract or of one or more Participating Members under the Participant Contracts to pay CAPP sums required under Article 6; or (c) CAPP breaches any material contractual obligation under this Contract and such breach continues for a period of thirty (30) Days after the date on which written notice thereof is received from Member by CAPP. 11.3 Default by Member. Except as otherwise excused under this Contract, the occurrence of any of the following shall constitute an event of default by Member: (a) Member fails to accept delivery of the Products, or any portion thereof from CAPP. In the event of such failure, CAPP may, in addition to other remedies available to it under this Contract, provide the unaccepted Products to another Participating Member or, if no Participating Member elects to accept such Products, to a third party at such price as CAPP may negotiate in the marketplace. If the price obtained in the marketplace is less than the price Member would have been required to pay for such Products, Member shall pay CAPP and CAPP may recover from Member (i) the positive difference, if any, obtained by subtracting what was received from the Participating Member or third party from what would have been received from Member had Member accepted the full delivery of Products required of it, and (ii) all costs of collection incurred by LAPP, including reasonable attorney's fees; (b) Except for disputed charges arising under Section 8.4, Member fails to pay amounts due to CAPP as and when required under this Contract, which failure continues for a period of three (3) Business Days after the date on which written notice of a prospective Default is received by Member from CAPP; (c) Failure by Member to levy the rate and amount of ad valorem taxes out of the maintenance tax of Member, and failure by Member to establish and maintain a sinking fund for the Monthly Capacity Payments and CAPP fees as required under Section 7.3, above; (d) Failure by Member to pay to CAPP any sum of money required to be paid by Member under this Contract; (e) Member breaches any material contractual obligation under this Contract and such breach continues for a period of twenty-eight (28) Days after the date on which written notice thereof is received by the breaching Party; (f) Member becomes Bankrupt. 11.4 Remedies of CAPP in the event of default by Member. Unless otherwise limited by the terms of this Contract, in the event that Member shall default in the performance of its obligations under this Contract, CAPP may: (a) Suspend delivery of Products to Member, and provide such Products to one or more Participating Members or third parties until such default is cured; (b) Then and in every case, CAPP or an authorized representative thereof may proceed against the Member, or any official, officer or employee of the Member in their official capacity, for the purpose of protecting and enforcing the rights of CAPP under this Contract, by mandamus or other suit, action or special proceeding in equity or at law, in any court of competent jurisdiction, for any relief permitted by law, including the specific performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right of CAPP hereunder or any combination of such remedies; (c) Suspend performance of CAPP's obligations to Member under this Contract until the earlier of (i) the Day the Default has been cured in accordance with the terms of this Contract, except for Member's obligations to make Monthly Capacity payments under Article 7 hereof which shall not be affected by any such action; (d) Exercise any other remedy available to CAPP at law or in equity. In addition to all of the rights and remedies provided to LAPP by the laws of the State of Texas, and in addition to the remedies set forth above, the Member covenants and agrees that in the event of its default under this Contract, including failure to pay Monthly Capacity Payments and payments under Section 7.5 when due or Energy Payments when due after the Member has Appropriated for such payments, or, in the event it fails to make the payments required to be made into the Interest and Sinking Fund or defaults in the observance or performance of any other of the contracts, covenants, conditions or obligations set forth in this Contract, the following remedies shall also be available: (e) CAPP, the trustee if CAPP has assigned all or part of this Contract to a trustee for the benefit of bond owners, shall be entitled to a writ of mandamus issued by a court of competent jurisdiction compelling and requiring Member and the officials thereof to observe and perform all agreements, covenants, obligations and conditions prescribed in this Contract; (f) Any delay or omission to exercise any right or power accruing upon any default shall not impair any such right or power nor be construed to be a waiver of any such default or acquiescence therein, and every such right and power may be exercised from time to time and as often as may be deemed expedient; and (g) Any other remedies available to CAPP at law or in equity. 11.5 Remedies of Member in the Event of Default by CAPP. Unless otherwise limited by the terms of this Contract, in the event that CAPP shall default in the performance of its obligations under this Contract, Member may: (a) Then and in every case, Member may proceed against CAPP, or any official, officer or employee of CAPP in their official capacity, Sue for the purpose of protecting and enforcing the rights of Member under this Contract, by mandamus or other suit, action or special proceeding in equity or at law, in any court of competent jurisdiction, for any relief permitted by law, including the specific performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right of Member hereunder or any combination of such remedies; (b) Terminate this Contract, except for Member's obligations to make Monthly Capacity Payments under Article 7 hereof which shall survive any termination of this Contract; (c) Exercise any other remedies available to Member at law or in equity. 11.6 No Waiver in Event of Default. Pursuit by either Party of any remedy for default pursuant to Article 11 of this Contract shall not constitute a forfeiture or waiver of any amount due by the defaulting Party or of any damages occurring by reason of the violation of any terms, provisions, or conditions of this Contract, provided however, that in no event shall CAPP be required to return to Member any sums paid by Member to CAPP for Capacity Prepayment. No waiver of any default or breach of this Contract shall be deemed or construed to constitute a waiver of any other violation or breach of any of the terms, provisions, or conditions of this Contract. Forbearance to enforce one or more of the remedies available upon the occurrence of an event of default shall not constitute a waiver of that or any subsequent default or breach. ARTICLE 12 INDEMNIFICATION; LIMITATION OF LIABILITY 12.1 Member's Indemnification of CAPP. To the extent permitted by the Constitution and laws of the State of Texas, and with full reservation of all defenses and immunities available under the Law, Member agrees to and shall indemnify, defend, and hold harmless CAPP and all of CAPP's officers, directors, shareholders, representatives, and employees, from and against all Indemnified Claims, including Indemnified Claims for personal injury, death, or damages to property, occurring after the Facility Owners' Delivery Points, arising out of or related to the Products. Notwithstanding the foregoing, CAPP agrees and understands that Member cannot indemnify CAPP, Facility Owners, or any individual associated with either of them from and against their own gross negligence and willful misconduct. To the extent that CAPP has agreed to indemnify Facility Owners pursuant to Article 13 of the PPA, then Member agrees to and shall indemnify, defend, and hold harmless CAPP and all of CAPP's officers, directors, shareholders, representatives, and employees, from and against all Indemnified Claims that CAPP has made to Facility Owners, but only to the extent permitted by the Constitution and laws of the State of Texas, and with full reservation of all defenses and immunities available under the Law. 12.2 Claims arising on Facility Owners side of the Facility Owners' Delivery Point. To the extent that claims for personal injury, death, or damages to property: (a) occur at and/or before the Facility Owners' Delivery Point, (b) arise out of or are related to the Product and Products, and (c) are covered as an Indemnified Claim by Facility Owners for the benefit of CAPP, Member and Participating Members, and each of their respective officers, officials, directors, and employees, then CAPP, on behalf of itself, Member, and Participating members, agrees to enforce the indemnity and duty of defense that Facility Owners have granted to CAPP and Member under Article 12 of the PPA. 12.3 Indemnified Claims. "Indemnified Claims", as used in Sections 12.1 and 12.2, above, means all third party claims or actions, threatened or filed and, whether groundless, false, fraudulent or otherwise, that directly or indirectly relate to the subject matter of an indemnity, and the resulting losses, damages, expenses, attorneys' fees and court costs, whether incurred by settlement or otherwise, and whether such claims or actions are threatened or filed prior to or after the termination of this Contract. 12.4 Limitation of Remedies, Liability and Damages. EXCEPT AS SET FORTH IN THIS AGREEMENT, THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGE IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED EXCEPT AS SET FORTH IN ARTICLE 11 OF THIS AGREEMENT. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR'S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. UNLESS EXPRESSLY HEREIN PROVIDED, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE IS SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND THE DAMAGES CALCULATED HEREUNDER CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS. ARTICLE 13 REPRESENTATIONS 13.1 Mutual representations and warranties. Each Party represents and warrants to the other Party that: (a) Such Party has the power and authority to execute, deliver and perform its obligations under this Contract. Such Party has authorized the execution and delivery of this Contract by the person(s) executing this Contract below. (b) No provision contained in Member's charter or enabling legislation, as the case may be, if any, prohibits Member from entering into this Contract and performing the obligations required of Member under this Contract. (c) This Contract constitutes a legal, valid and binding obligation of such Party, except as the enforceability of this Contract may be limited by the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditor's rights generally and by general principles of equity which permit the exercise of judicial discretion. (d) Neither the execution or delivery of this Contract results in any breach of or constitutes any default under any material agreement to which such Party is bound or causes such Party to be in violation of any Law, regulation, administrative or judicial order or process or decision to which such Party is a party or by which it or its properties are bound or affected. (e) It is not Bankrupt and there are no proceedings pending or being contemplated by it or, to its knowledge, threatened against it which would result in it being or becoming Bankrupt. (f) It is duly organized and validly existing under the laws of the jurisdiction of its organization or incorporation and, if relevant under such laws, in good standing. (g) All governmental and other authorizations, approvals, consents, notices and filings that are required to have been obtained or submitted by it with respect to this Contract or other document relating hereto or thereto to which it is a party have been obtained or submitted and are in full force and effect and all conditions of any such authorizations, approvals, consents, notices and filings have been complied with. (h) No Default with respect to it, or event which with notice and/or lapse of time would constitute such a Default, has occurred and is continuing and no such event or circumstance would occur as a result of its entering into or performing its obligations under this Contract or other document relating hereto or thereto to which it is a party. There is not pending or, to its knowledge, threatened against it or any of its Affiliates any action, suit or proceeding at law or in equity or before any court, tribunal, governmental body, agency or official or any arbitrator that is likely to affect the legality, validity or enforceability against it of this Contract, or other document relating hereto or thereto to which it is a party or its ability to perform its obligations under the same. ARTICLE 14 NOTICES 14.1 Notices. All notices and other communications required or permitted by this Contract or by Law to be served upon or given to a Party by the other Party shall be deemed duly served and given when received after being delivered by hand, or courier service, or sent by confirmed facsimile or certified mail, return receipt requested, postage prepaid, to the following address. To Member: City of North Richland Hills Attention: Karen Bostic Telephone: (817) 427-6005 Facsimile: (817) 427-6016 To CAPP: Attention: Telephone: Facsimile: Notices shall, unless otherwise specified herein, be in writing and may be delivered by hand delivery, United States mail, overnight courier service or facsimile. Notice by facsimile or hand delivery shall be effective at the close of business on the Day actually received, if received during business hours on a Business Day, and otherwise shall be effective at the close of business on the next Business Day. Notice by overnight United States mail or courier shall be effective on the next Business Day after it was sent. A Party may change its addresses by providing notice of it in accordance herewith. ARTICLE 15 CONFIDENTIALITY 15.1 Confidential Information. Parties to this Contract acknowledge that they are obligated to protect the confidentiality of certain information provided by Luminant to CAPP in the course of negotiating the PPA pursuant to Article 17 of the PPA. Member agrees to be bound by the provisions of Article 17 of the PPA regarding any information that counsel to LAPP indicates in writing should be kept confidential and to promptly advise counsel to CAPP of any request for Public Information pursuant to Chapter 552 of the Texas Government Code for public revelation of confidential information provided to Member in its consideration of this Contract and related documents. ARTICLE 16 ASSIGNMENT 16.1 Assignment. Except as provided otherwise in this Contract, neither Party shall assign this Contract or its rights hereunder without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed; provided, however, that the assignee is at the time of assignment a Member of CAPP. In no event shall the assigning Party be relieved from liability under this Contract upon assignment. ARTICLE 17 CONTINUING DISCLOSURE 17.1 Continuing Disclosure Undertaking of Members. At such time that Member's aggregated unpaid Monthly Capacity Payments equals at least ten percent (10%) of the outstanding principal amount of the Bonds, Member agrees to provide annually to each Nationally Recognized Municipal Securities Information Depositories ("NRMSIR") and any State Information Depositories ("SID") financial information and operating data with respect to the Member of the general type hereinafter described. Subject to the foregoing sentence Member agrees to provide, within 195 days after the end of each Fiscal Year thereof ending in or after 2009, financial information and operating data with respect the Member. Any financial statements so to be provided shall be prepared in accordance with the accounting principles as Member may be required to employ from time to time pursuant to state law or regulation. 17.2 Financial Statements. If Member is required to file financial information pursuant to Section 17.1 and Member commissions an audit of such statements and the audit is completed within the period during which they must be provided, the financial statements to be provided shall be audited. If the audit of such financial statements is not complete within such period, then Participating Member shall provide unaudited financial statements and thereafter audited financial statements for the applicable fiscal year to CAPP, each NRMSIR and any SID, when and if the audit report on such statements become available. 17.3 Change of Fiscal Year. If Member is required to file financial information pursuant to Section 17.1 and Member changes its Fiscal Year, it shall be the duty of such Member to notify each NRMSIR and any SID of the change (and of the date of the new Fiscal Year end) prior to the next date by which such Member otherwise would be required to provide financial information and operating data pursuant to this Article. The financial information and operating data to be provided pursuant to this Article may be set forth in full in one or more documents or may be provided pursuant to this Article may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the Municipal Securities Rulemaking Board ("MSRB") that theretofore has been provided to each NRMSIR and any SID or filed with the SEC. 17.4 Failure to Provide Continuing Disclosure. Member shall notify CAPP, any SID and either each NRMSIR or the MSRB , in a timely manner, of any failure of such Member to provide financial information or operating data in accordance with this Article by the time required thereby and hereby. No default by Member in observing or performing its obligations as described in this Article shall constitute a breach of or default under this Contract for purposes of any other provision of this Contract. Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit the duties of any Member under federal and state securities laws. If Member fails to provide such continuing disclosure required under this Article, CAPP shall use its best efforts to obtain relevant financial information and operating data with respect to any such Participating Member and to provide the same annually to each NRMSIR and any SID within 195 days after the end of each Fiscal Year of any such Member. 17.5 Amendment of Continuing Disclosure. Member's undertaking under this Article may be amended by Member, with the consent of CAPP, from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of any Member, but only if (1) the undertaking, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of such Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule since such offering as well as such changed circumstances and (2) either (a) the holders of a majority in aggregate principal amount of the outstanding Bonds consent to such amendment or (b) a person that is unaffiliated with Member (such as nationally recognized bond counsel) determined that such amendment will not materially impair the interest of the holders and beneficial owners of the Bonds. If Member amends its undertaking herein, it shall include with any amended financial information or operating data next provided in accordance with this Article an explanation, in narrative form, of the reason for the amendment and of the impact of any change in the type of financial information or operating data so provided. Member shall be obligated to observe and perform the covenants specified in this Article for so long as, but only for so long as, Member remains an "obligated person" with respect to the Bonds within the meaning of the Rule. The provisions of this Article are for the sole benefit of the holders and beneficial owners of the Bonds, and nothing in this Article, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. ARTICLE 18 TAX-EXEMPT BONDS 18.1 Tax-Exempt Bonds. The Parties understand and agree that LAPP will use commercially reasonable efforts to provide for, but will not be liable for a failure to produce, the lowest overall debt service cost for the Bonds. In connection therewith, the parties intend that CAPP may, with the approval of the Member, issue refunding bonds to refund the Bonds, if possible, the interest on which is excludable from the gross income of the owners thereof for federal income tax purposes. The Parties acknowledge that, under current federal tax laws, such tax-exempt financing of the Capacity Prepayment is not permitted. The Parties further acknowledge their understanding that the federal income tax laws impose certain restrictions on the use and investment of proceeds of tax- exempt bonds and on the use of the property financed therewith and the output produced therefrom. Accordingly, the Parties agree and covenant that if any refunding bonds are offered to investors with the understanding that the interest thereon will be exempt from federal income taxation, then the Parties, their assigns and agents, will take such action to assure, and refrain from such action which will adversely affect, the treatment of such refunding bonds as obligations described in Section 103 of the Internal Revenue Code of 1986. Should either Party fail to comply with such covenant, the effect of which being that such refunding bonds no longer qualify as obligations described in the Internal Revenue Code of 1986, such defaulting party shall be liable for all costs resulting from the loss of the tax-exempt status of such bonds. The Parties hereby agree and covenant to comply with all of the representations and covenants relating to such exemption which are set out in any relevant trust indenture or bond resolution. The Parties further agree and covenant that in the event any refunding bonds issued are to be tax-exempt, they will modify such agreements, make such filings, restrict the yield on investments, and take such other action necessary to fulfill the applicable provisions of the Internal Revenue Code of 1986. For these purposes, the Parties may rely on the respective opinion of any firm of bond attorneys selected by CAPP. 18.2 Agreement to Pay Beneficiary. In the event that tax-exempt refunding bonds are issued with the consent of the Members as provided in the immediately preceding paragraph above, Member hereby covenants and agrees to pay its proportionate share of any deficiency to CAPP for deposit into the appropriate rebate fund at the times and as described in the indenture of trust related to the Bonds to comply with the provisions of Section 148(f)(2) of the Internal Revenue Code of 1986. 18.3 Financing. Member agrees to cooperate with CAPP in connection with the issuance of the Bonds. Without limiting the foregoing, CAPP and Member acknowledge that this Contract may be an integral part of the documentation securing the Bonds. At CAPP's request, Member shall agree to amend this Contract to include any provision which may reasonably be requested by the issuer of the Bonds, and to include any provision that may be required to correspond to an amendment of the PPA; provided, however, that no such amendment shall increase the burdens or obligations of Member hereunder with respect to the price and purchase obligations set forth herein. Upon the request of CAPP, Member agrees to negotiate in good faith and shall execute additional documents, opinions and instruments reasonably requested by the proposed issuer of the Bonds including (i) a consent and agreement that provides an additional reasonable period of time to remedy any Default, and (ii) a legal opinion of counsel for Member affirming the enforceability of this Contract against Member and other matters reasonably requested, subject to customary exceptions and qualifications. ARTICLE 19 MISCELLANEOUS 19.1 Applicable Law. This Contract is governed by and shall be construed under the Laws of the State of Texas excluding any conflict of laws rules. The Parties submit to the exclusive jurisdiction of the state and federal courts in Dallas County, Texas in connection with any litigation arising hereunder. 19.2 Counterparts. This Contract may be executed in more than one counterpart, each of which shall be deemed to be an original, but all of which together shall constitute one and the same document. 19.3 Waiver. No waiver of any breach of the terms of this Contract shall be effective unless such waiver is in writing and signed by the Party against whom such waiver is claimed. No waiver of any breach shall be deemed to be a waiver of any subsequent breach. 19.4 Modification. The provisions of this Contract, including any exhibits, may only be modified by written agreement duly executed by each Party. 19.5 Severability. If any provision of this Contract shall be determined to be unenforceable, void or otherwise contrary to Law, such condition shall in no manner operate to render any other provision of this Contract unenforceable, void or contrary to Law, and this Contract shall continue in force in accordance with the remaining terms and provisions hereof, unless such condition invalidates the purpose or intent of this Contract. In the event that any of the provisions, or portions or applications thereof, of this Contract are held unenforceable or invalid by any court of competent jurisdiction, Buyer and Seller shall negotiate in good faith to attempt to implement an equitable adjustment in the provisions of this Contract with a view toward effecting the purposes of this Contract by replacing the provision that is unenforceable, void, or contrary to Law with a valid provision the economic effect of which comes as close as possible to that of the provision that has been found to be unenforceable, void, or contrary to Law. 19.6 Requirements. Each Party shall timely comply with all then-current PUCT and ERCOT requirements (including, without limitation, the ERCOT Guides) that are applicable to it and shall reasonably cooperate upon reasonable notice with the other Party to the extent necessary for the other Party to timely comply with then-current PUCT and ERCOT requirements (including, without limitation, the ERCOT Guides) that are applicable to it. 19.7 Entirety. It is the intention of the Parties that this Contract shall contain all terms, conditions, and protections in any way related to, or arising out of, the sale and purchase of the Products as contemplated herein, and supersedes all prior agreements regarding the subject matter hereof, whether written or oral. 19.8 Captions, Titles and Headings. Captions, titles and headings used in this Contract are for ease of reference only and do not constitute a part of this Contract. 19.9 Forward Contract. The Parties acknowledge and agree that this Contract constitutes a "forward contract" within the meaning of the United States Bankruptcy Code. 19.10 Further Assurances. Each Party shall, from time to time, upon the written request of any other Party, execute and deliver such further instruments and documents as shall be necessary to perform its obligations hereunder. 19.11 Survival. The confidentiality and audit provisions, indemnities, releases from liability, and limitations on liability or damages expressed in this Contract shall, unless otherwise provided herein, survive without limitation the termination, cancellation or expiration of this Contract, and shall apply whether in contract, equity, or otherwise. Notwithstanding the foregoing, the statute of limitations for bringing any action with respect to this Contract or either Party's performance hereunder is not extended by the provisions of this Section 19.11. IN WITNESS WHEREOF, the Parties have caused this Contract to be executed in their respective names by their duly authorized officers. MEMBER: CITY OF NORTH RICHLAND HILLS By: Printed name: Date Its: ATTEST: CAPP: CITIES AGGREGATION POWER PROJECT By: Printed name: Date Its: ATTEST: SCHEDULE OF EXHIBITS "A" List of Participating Members "B" P PA "C" Payment Schedule "D" Total Monthly Contract Payment Schedule. "E" CAPP Capacity Payment Schedule L:\CLIENTS\1813\02 -Long Term Contract\2008 PPA CAPP-Cities\WBC Drafts\agr080814WBCdraft-version20.doc .....:. EXECUTION COPY POWER PURCHASE AGREEIVIENT BETWEEN BIG $ROWN POWER COMPANY LLC, OAI~ GROVE MANAGEMENT COIVIPANY LLC, LUMINANT GENERATION COMPANY LLC AND CITIES AGGREGATION POWER PROJECT, INC. HAVING AN EFFECTIVE DATE OF SEPTEMBER 10, 2008 C:IDocuments acid Settingslxh2alLocal SettingslTem~Qrary Internet Filesl(~LK1071CAPP PPA CXI;CUTI~N VERSI4N.dvc E~CUTION CQPY TABLE OF CONTENTS ARTICLE 1 DEFINITIONS ............................................................................................................3 1.1 Def nitions .................................................................................................... ............3 1.2 Principles of Interpretation .......................................................................... ..........15 ARTICLE 2 TERM; COMMERCIAL OPERATION DATE ............................................. ..........15 2.1 Term of Agreement and Commencement of Service .................................. ..........IS 2.2 Facility Status Update .................................................................................. ..........15 ARTICLE 3 PURCHASE AND SALE ............................................................................... ..........16 3.1 Capacity and Energy .................................................................................... ..........16 3.2 Title and Risk of Loss .................................................................................. ..........16 3.3 Buyer Failure ............................................................................................... ..........16 3.4 Seller Failure ................................................................................................ ..........17 3.5 Ancillary Service Responsibi.lity . .............................................................. ..........17 ARTICLE 4 PRICING ......................................................................................................... ..........17 4.1 Payment for Contract Energy ....................................................................... ..........17 4.2 Adjustment to Capacity Payment ................................................................. ..........18 4.3 Payment through Retail Electric Provider ................................................... ..........20 ARTICLE 5 AVAILABILITY ............................................................................................ ..........20 S.l. Availability Plan .......................................................................................... ..........20 5.2 Availability Reduced by Ordered Backdown .............................................. ..........20 5.3 Availability Reduced by Other ERGOT Dispatch Instructions ................... ..........20 ARTICLE 6 OUTAGES; OPERATION AND MAINTENANCE ..................................... ..........21 G.1 Planned Outages ........................................................................................... ..........21 G.Z Forced Outages ............................................................................................ ..........21 G.3 ......................................................... Operation and Maintenance ................ .......... ARTICLE 7 SCHEDULING AND TRANSMISSION ....................................................... ..........21 7.1 Qualified Scheduling Entity ......................... ............................................... ..........21 7.2 Transrniss~on Service ................................................................................... .......... 7.3 Scheduiing .................................................................................................... ..........21 ARTICLE 8 BILLING AND PAYMENT ........................................................................... ..........22 8.1 Invoice and Payment Schedules ................................................................... ..........22 8.2 Netting .......................................................................................................... ..........22 $.3 Disputed Charges ......................................................................................... ..........22 8.4 Audits ........................................................................................................... ..........23 8.5 ERGOT Barred Issue ................................................................................... ..........23 ARTICLE 9 SECURITY ...............................................................................................................23 9.1 Buyer's Security .....................................................................................................23 9.2 Substitute Collatexal ...............................................................................................24 ARTICLE 10 DEFAULT ................................. . ............................................................................2 5 10.1 Default By Seller .................................................................................................... 25 I0.2 ' . Remedies on Seller Default .................................................................................. 26 10.3 Default $y Bu.yer ................................................................................................... 27 X0.4 Remedies on Buyer Defaul.t .............................................................................:..... 27 1(1.5 No Waiver in Event of Default .............................................................................. 28 EXECUTION COPY ARTICLE 11 TERMINATION PRIOR TO SERVICE COMMENCEMENT DATE ................. 28 11.1 Riglat o#' Termination Prior to the Service Commencement Date .......................... 28 11.2 Notice to Seller Concerning Obligations of Participating Members ..................... 30 ARTICLE I2 EARLY 'I'ERMINATION ....................................................................................... 30 ARTICLE 13 INDEMNIFICATION; LIMITATION OF LIABILITY ........................................ 33 13.1 Buyer's Indemnif cation of Seller .......................................................................... 33 13.2 Seller's Indemnification of Buyer .......................................................................... 13.3 Indemnified Claims ................................................................................................ 34 13.4 Limitation of Remedies, Liability anal Damages ................................................... 34 ARTICLE 14 FORCE MAJEURE ................................................................................................ 34 ARTICLE 15 REPRESENTATIONS, WARRANTIES, OBLIGATIONS AND ACI~NOWLEDGMENTS ............................................................................................................. 35 15.1 Representations and. Warranties Made by Eacla Party ........................................... 3 5 15.2 Seller's Representations and 'VV'a~Yanties to Buyer ................................................. 36 15.3 Buyer's Representations and Warranties to Seller ................................................. 15.4 Buyer and Se11er Obligations ................................................................................. 37 15.5 A.cknow.ledgements ................................................................................................ 37 15.6 Seller Obligations ................................................................................................... 38 ARTICLE 16 NOTICES ................................................................................................................ 3 8 ARTICLE 17 CONFIDENTIALITY ............................................................................................. 39 17.1 Confidential lnformation ....................................................................................... 39 17.2 Associated Parties .................................................................................................. 39 1.7.3 Exceptions .............................................................................................................. 40 17.4 Remedies ................................................................................................................ 41 17.5 Exclusions .............................................................................................................. 41 ARTICLE 1$ JOINT AND SEVERAL LIABILITY .................................................................... 4I ARTICLE 19 AS STGNMENT ....................................................................................................... 41 ARTICLE 2U GOVERNMENTAL, CHARGES ............................................................................ 42 20.1 Governmental Charges ........................................................................................... 42 20.2 New Governmental Charges .................................................................................. 42 Article 21 MISCELLANEOUS ..................................................................................................... 43 2X.1 Applicable Law ...................................................................................................... 43 21.2 Adequate Assurance ............................................................................................... 44 21.3 Counterparts ........................................................................................................... 44 21.4 Waiver .................................................................................................................... 44 21.5 Evergreen Provision ............................................................................................... 44 21.6 Modification ........................................................................................................... 44 21.7 Severability ............................................................................................................ 44 21.8 Incorporation of Exhibits by Reference ................................................................. 45 21.9 Entirety ................................................................................................................... 45 21.10 Captions, Titles and. Headings ............................................................................... 45 21.11 Attorneys' Fees ...................................................................................................... 45 21.12 Forward Contract ................................................................................................... 45 21.13 Further Assurances .................................................................................................45 21.14 Survival ..................................................................................................................45 INDEX OF EXHIBITS ..................................................................................................................63 2 EXECUTION COPY POWER PURCHASE AGREEMEN'T' This Power Purchase Agreement, is executed on the date set opposite each signature below, effective, however, on September l 0, 200$ t"Ef, festive Date"), by and between Cities Aggregation Power Project, Inc. ("Buyer"),apolitical subdivision corporation incorporated in the State of Texas, $ig Brown Power Company LLC, a lizn.ited liability company organized and existing under the laws of the State of Texas (".Big Brown', Luminant Generation Company LLC, a limited liability company organized and existing under the laws of the State of Texas ("Lut~zitrant Generation"), Oak Grove Management Company LLC, a limited liability company organized and existing under the laws of the State of Texas {"Dak Grove"). Seller, as defined below, and Buyer are collectively called the ".Parties", and singularly as a "Party." Big Brown, Luminant Generation, and Oak Grove are collectively called the "Facility Owners". RECITALS 1. WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase from Seller th.e Products (as defined below), on the terms and conditions set forth herein; 2. WHEREAS, Seller desires to sell the Products to Buyer from the Martin Lake - Facility and the Big Brown Facility on the Service Commencement Date and, upon COD of Oak Grove Unit I, Seller desires to sell from the Martin Lake Facility, the Big Brown Facility and Oak Grove Unit 1. Upon COD of Oak Grove Unit 2, Seller desires to sell the Products from the Martin Lake Facility, the Big Brown Facility and the Oak Grove Facility, all on the terms and conditions set forth herein (the Martin Lake Facility, Big Brown Facility, and the Oak Grove Facility being collectively referred to herein as the "Facilities"}; and 3. NOW THEREFORE, in consideration of the foregoing, the mutual agreements set forth l~erein and. other good and valuable consideration the receipt and sufficiency of which is .hereby acknowledged and confessed, Seller and Buyer agree as follows: ARTICLE 1. DEFINITIONS 1..1 Definitions. The capitalized terms in this Agreement shall have the meaning set forth below. In the event a capitalized term is not defined herein, such capitalized term shall have the meaning set forth in the ERGOT Guides or rules, regulations or statutes of the state of Texas. "Accession Agreement" has the meaning set forth in the Intercreditor Agreement. A copy of the Accession Agreement to be used in this Agreement is attached hereto as Exhibit "4" hereto and. incorporated by this reference herein for all purposes. "Additional. Capacity" has the meaning set forth in Section 3.1(b}. "Additional Energy" has the meaning set forth in Section 3.1(b}. 3 EXECUTION COPY "Afflinte" shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with such Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise. The terms "controlling" and "controlled" shall have meanings correlative thereto . "Agreement" means this document and. all related exhibits attached hereto, as same may be amended from time to time by the mutual agreement of the Parties. "Alternate Energy" means Energy produced from any source other than from the Facilities as set fort1~ in this Agreement that: (i) is scheduled in accordance with the ERCOT Guides; and {ii) is delivered by Seller to Buyer at one or more of the Delivery Points. Unless Seller receives prior authorization from Buyer or its QSE, Alternate Energy shall not exceed during any Settlement Interval an amount measured in MWhs greater than Buyer's allocation of a Facility's Net Rated Capacity divided by the number of Settlement Intervals within the hour at the Delivery Point(s) for that Facility as outlined in Section 4.2{e) and as required under Section 5.3. "ASSOCIated Party" means, with respect to any Party, any Affiliate of such Party, and any officer, director, trustee, fiduciary, employee, agent, attorney or representative of such Party, provided that same are acting within the scope of their authority and, in the case of employees, in the course of their employment. "AVRlla~llllty .Plai1" has the meaning set forth in Section 5.1. "Bankrupt" means a Party, or Guarantor: (i} f les a petition or otherwise commences, authorizes or acquiesces ixa the commencement of a :proceeding or cause of action under any bankruptcy, insolvency, reorganization. or similar law, or has any such petition f led or commenced against it, (ii) makes an assignment or any general arrangement for the benefit of creditors, (iii) otherwise becomes bankrupt or insolvent (however evidenced. and. regardless of whether the bankruptcy or insolvency is voluntary or involuntary}, {iv} has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (v) is generally unable to pay its debts as they fall due. "Baseload Units" shall mean the Big Brown Facility, the Oak Grove Facility, the 1Vlonticello facility located near Monticello, Texas, the Martin Lake Facility, the Sandow facility located. in. Rockdale, Texas and the Comanche Peak nuclear facility located near Glen Rose, Texas. "Big Brown .Facility" means Unit 1 and Unit 2 of the Big Brown generating station located in Freestone County, Texas with an approximate cumulative Net Rated Capacity of` 1203 megawatts as of the Effective Date. 4 "Business Day" means any Day except a Saturday, Sunday, or a Federal Reserve Bank holiday. A Business Day shall open at 8:00 a.m. and close at 5:00 p.rn. CPT. ",buyer" has the meaning sefi forth in the introductory paragraph of this Agreement. "Buyer's Loss" has the meaning set forth in Article 12. "Buyer Terminatioft Payment" has the meaning set forth in Article 12. "Capacity Prepayment" has the meaning set forth in Section 4.1(b). "Capitalization Rate" means the ten (10) year Treasury rate plus 400 basis points. "Carbon Reme~iation" shall mean the process of removing Greenhouse Gasses from, or preventing the emission of Greenhouse Gasses into, air and/or water. "Code" means Texas :Local Government Code, Title 8, Chapter 271, Subchapter I, Sections 271.1 S 1 through 271.160. "COD of Oak Grove r1'nit 1" means the first commercial operation date of Oak Grove Unit 1,being the date on which ERGOT accepts Oak Grove Unit 1 for its dispatch control . "COD of Oak Grove Unit 2" means the first commercial operation date of Oak Grove Unit 2, being the date on which ERGOT accepts Oak Grove Unit 2 far its dispatch control. "Collateral" shall have the meaning set forth. in the Credit Agreement. "Collateral. Tliresliold" means the amount set forth on the table below opposite the higher of the Credit Rating for Guarantor. 5 EXECUTIOI~I COPY Threshold S&P Moody's $70,000,000 $7o,ooa,ooo $70,000,000 $60,000,00 $3G,000,000 $25,000,000 $9,000 000 $5,000,000 $2,000,000 $2,000,000 $1,000,000 $o AAA AA+, AA, AA- A,A,A- BBB+ BBB BB~B- BB+ BB BB- B+ B B- or Below or Unrated "Contract Capacity" means 150 megawatts. Aaa Aa1, Aa2, Aaa A 1, A2, A3 Baa 1 Baal Baa3 Bal Bat Baa B] B2 B3 or .Below or Unrated "Contract Energy" means (i} the Unit Contingent Energy associated with the Contract Capacity, which is scheduled and ratably delivered to Buyer at the Delivery Points throughout the applicable Settlement Interval during the Term plus (ii} any Alternate Energy, if delivered in Seller's sole discretion except as required to be delivered. pursuant to Section 5.3 delivered to Buyer; provided, however, if in any Settlement Interval the output of one or moire of fihe Facilities is less than the Net Rated Capacity due solely to Planned Outage or Forced Outage for such Facility, Buyer shall receive a share of such actual output from the affected Facility equal to, at a minimum, the product of such actual output and the Minimum Allocation Percentage then applicable to such Facility under Section 4.2(c} below. Unless Seller receives prior authorization from Buyer or its QSE, Contract Energy shall not exceed during any Settlement Interval an amount measured in M~Vhs greater than the Contract Capacity divided. by the number of .Settlement Intervals within that hour. "Costs" means, with respect to the non-defaulting Party, brokerage fees, commissions and other similar third party transaction costs and expenses reasonably incurred by the non--defaulting Party either in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements which replace the terminated Agreement; and all reasonable attorneys' fees and expenses incurred. by the non-- defaulting Party in connection with. the termination o.f this Agreement. "Covered Contract" means a "Contract subject to this subchapter," as such phrase is defined. in Section 271.151(2} ofthe Code. "C,PT"' means central :prevailing time_ "Credit Agreement" means that certain Credit Agreement, dated as of October 10, 2007, among Energy Future Competitive Holdings Company, a Texas corporation ("~C_IS Poldings"), Texas Competitive Electric Holdings Company LLC, a Delaware limited 6 EXECUTION COPY liability company ("TCEH" or the "Borrower"}, the lending institutions from time to time parties thereto (each a "Lender" and, collectively, the "Lenders"}, Citibank, N.A., as Administrative Agent, Collateral Agent, Swingline Lender, Revolving Letter of Credit Issuer and Deposit Letter of Credit Issuer, Goldman Sachs Credit Partners L.P., as Posting Agent, Posting Syndication Agent and Posting Documentation Agent, JPMorgan Chase Bank, N.A., as Syndication Agent and. Revolving Letter of Credit Issuer, Citigroup Global Markets Inc., J.P. Morgan Securities Inc., Goldman Sachs Credit Partners L.P., Lehman Brothers Inc., Morgan Stanley Senior Funding, Inc. and Credit Suisse Securities (USA} LLC, as Joint Lead Arrangers anal Bookrunners, Goldman Sachs Credit Partners L.P., as Posting Lead. Arranger and Sole Bookrunner, Credit Suisse, Goldman Sachs Credit Partners L.P., Lehman Commercial Paper Inc. and Morgan Stanley Senior Funding, Inc., as Co-Documentation Agents, and J. Aron & Company, as Posting Calculation Agent. "Credit. Rating" means, with respect to any entity, the rating then assigned to such entity's unsecured, senior long--term debt obligations (not supported. by third party credit enhancements} or if such entity does not have a rating for its senior unsecured long-term debt, then the rating then assigned to such entity as an issuer rating by S&P, Moody's or any other rating agency agreed. by the Parties. "Day" means the consecutive twenty-four (24} hour period beginning at 12:00:01 a.m. " CPT on any calendar day and ending at 12:00:00 p.m. CPT on such calendar day. "Defarilt" has the meaning set forth in Section 10.1 hereof with respect to Seller Default, and the meaning set forth i.n Section 10.3 hereof respect to Buyer Default. "Delivery Montle" means the period beginning at 12:01 a.m. CPT on the first Day of a calendar month and ending at 12:01 a.m. CPT on the first Day of the next succeeding month. "Delivery Point" means the point at a Facility at which Contract Energy is capable of being injected. for the credit of the Buyer into the ERGOT high voltage transmission system with Buyer being fully responsible for any charges or assessments by ERGOT related to delivery of energy from the Plant Bus or Plant Buses} into the ERGOT high voltage transmission system. "Disclosing Party" has the .meaning set forth in Section 17.1 hereof. "Discount Rate" shall mean the Treasury Rate plus the greater of {i} 12.5 basis points or (ii} as otherwise set forth in the Bonds. "Early T'ermin~rtion Date" has the meaning set forth in Article 12 hereof. "Effective Date" has the meaning set .forth in the preamble of this Agreement. "Emergency Conditiota"has the meaning set forth in the ERGOT Guides. 7 EXECUTYON COPY " Energy" means electrical energy expressed in MWh of the character commonly known as three (3} phase, sixty (60} hertz electric energy. "Energy Trade" has the meaning set forth in the ERCt)T Guides. "Environmental Entitlements" shall mean, as attributable to a Facility, an explicit, governmentally-conveyed right to emit effluents, or subsidy reducing the economic ramifications of emitting effluents, resulting from the generation of electricity, or handling or transportation of fuel prior to, or disposal of byproducts resulting firom, the generation of electricity. "ERGOT' means the Electric Reliability Council of Texas or .its successor in function. "ERGOT ,barred Issue" has the meaning set forth in Section 8.5. "EIZCOT Guides" means the then-current ERGOT Operating Guides, Market Guides, Protocols, Nodal Protocols, Transaction Guides, and/or ISO procedures, as they may be amended from time to time. "Equivalent Availability Factor-Contract" has the meaning set forth in Section 4.2(c}. "Equivalent Availability Factor-Facility" has the meaning set forth in Section 4.2(c}. "Expected ~1?'ontlily Quantity{s~"has the meaning set forth on Exhibit "1" "Facilities" has the meaning set forth in the recitals of this Agreement, including, with respect to each, all land, structures, fixtures, equipment, machinery, lignite, and all related auxiliary equipment required to operate each such Facility. "FiERC" means the Federal Energy Regulatory Commission or any successor thereto. ".~'inancittg Parties" means one or more Persons providing debt or equity f nancing in connection with the construction, ownership, operation or maintenance of the Facility or Facilities, or any part thereof. "First Lien" has the meaning specified in the Intercreditor Agreement. "Floor Amount" has the meaning set forth in the Intercred.itor Agreement. "Force Majeure" has the meaning set forth in Article 14 below. "Forced Outage" means an interruption of a U.nit's generating capability which is not the result of (i} Planned Outage; (ii} an event or occurrence of Force Majeure; {iii} a breach of this Agreement by Buyer (including Seller's exercise of its remedies under Section E~CUTION CUPY 10.4); or {iv) an instruction from ERGOT or an interruption in transmission by the Transmission Service Provider on Bu.yer's side of the Delivery Point. "Governmental Authority" means any nation, state, sovereign, or government, any federal, regional, state, local or political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory o.r administrative functions of or pertaining to government and any of the foregoing that has jurisdiction over the Facility or Facilities and the delivery of Energy under this Agreement and any reliability organization with oversight in the ERGOT market, including, but not limited. to, ERGOT. "Governmental Charges" means taxes (other than income taxes, margin taxes, employment taxes and ad valorem taxes}, assessments or other govel-nmental impositions or costs of compliance with requirements imposed by any Government Authority affecting a Facility, on a Facility by Facility basis, specifically excluding Preexisting Environmental Commitments. "Greenhouse Gasses" means any such gas emission as inventoried by the US Environmental Protection Agency (EPA} in the INVENTORY OF L1.S. GREENHOUSE GAS EMISSIONS AND SINKS including, Carbon dioxide (C02}, Methane (CH4}, Nitrous Oxide (N20}, Hydrofluorocarbons (HFCs), Perfluorocarbons (PFCs) & Sulfur Hexafluoride (SF6), or other such gas emission that the EPA may otherwise inventory as " a Greenhouse Gas Emission. "Guarantor" means Texas Competitive Electric Holdings Company LLC, a limited liability company organized and existing under the laws of the State of Delaware. "I,~~fM" means the Independent Market Monitor. "Indenzn~ed Claims" shall have the meaning set forth i.n Section 13.3. ".Intercreditor Agree~rtent" means the Collateral Agency and. Intercreditor Agreement dated as of October I0, 2007, among Energy Future Competitive Holding Company, Texas Competitive Electric Holdings Company LLC, tlae Subsidiary Guarantors (as defined therein}, Citibank, N.A., as Administrative Agent and Collateral Agent, Lehman Brothers Commodity Services Inc., J. Aron & Company, Morgan Stanley Capital Group Inc., Citigroup Energy Inc. and each other Secuxed Commodity Hedge Counterparty (as defined therein) from time to time a party thereto, as the same may be amended, restated, supplemented, replaced or otherwise modified from time to time. "Interest Rate" means, for any date, the lesser of (a} the per annum rate of interest equal to the prime lending rate as may f`rorn time to time be published in 7'he Wall Street Journal under "Money Rates" on such day (or if not published on such day on the most recent preceding day on which published), plus two percent {2%} and (b) the maximum rate permitted by applicable law. 9 EXECUTION COPY "Investment. Grade" means a Credit Rating of BBB and Baa3 (or their equivalents, should rating designations change} or higher by S&P or Moody's, respectively, provided, that, if the Credit Ratings by S&P and Moody's are not equivalent, then the higher of the Credit Ratings shall control for purposes of determining whether the Person's Credit Rating is Investment Grade, unless the higher of the Credit Ratings of such Person has been placed on Credit ~Vatch• with negative implications by S&P or '~'atchlist (DNG} by Moody's, in which event the lower rating shall control.. "Law" means (i} any law, legislation, statute, act, rule, ordinance, decree, treaty, regulation, order, judgment, or other similar legal requirement, and (ii) any legally binding announcement, directive or published practice or interpretation thereof, inclu.d.ing but not limited to, ERGOT Guides, enacted, issued or promulgated by any Governmental Authority having jurisdiction over this Agreement, the Facility, and the delivery of Energy pursuant to this Agreement. ".ender" has the meaning set forth in the Credit Agreement. "Loss" has the meaning set forth in Article 12. "1Vlake YYltole Premium" has the meaning set forth in Article 12 hereof. "1Vfartin Lake Facility" means Unit 1, Unit 2, and. Unit 3 of the Martin Lake generating station located i.n Rusk County, Texas with an approximate cumulative Net Rated Capacity of 2,345 megawatts as of the Effective Date. "Materiality T'liresliold" means with respect to Buyer's Prorata share of expenses, the sum of one million dollars ($1,000,000.00} for capital expenses and one hundred thousand dollars ($100,000.00) for annual operating expenses to be applied across all Facilities. "1Vlember Contract Deadline" has the meaning set forth in Section 1 I.1. ".Member Output. Contract" means the individual output contract between Buyer and a Participating Member under which such, Participating Member is acquiring a portion of the Products Buyer is acquiring under this Agreement. "Minimxrm Allocation ,Percentage" is the percentage of the Energy physically produced at a Facility that is scheduled for delivery to Buyer at the Delivery Point of that Facility during a Settlement Interval. The Minimum. Allocation Percentage of the energy that is attributable to Buyer, from time to time is set forth in Section 4.2(c). "Moody's" means Moody's Investor Services, Inc. or its successor. ".Monthly aEnergy Payment" .means the product of the Monthly Energy Price times the megawatt hours delivered to Buyer for the Delivery Month. 10 EXECUTION COPY "1Vfontlily Fnergy Price" means the price per megawatt hour as set forth in Exhibit "1" for such corresponding Delivery Month prior to application of any Governmental Charges or New Governix~ental Charges. "llli~" means megawatt. "MWIi" means megawatt hour. "11TERC"means the North American Electric Reliability Corporation. "1Vet Rated Capacity" shall be equal to the Net Dependable Capability of each Facility as periodically reported to ERCOT by Seller for the Facilities from which Seller is delivering th.e Product; provided, however, for the Oak Grove Facility, the Net Rated Capacity shall refer specifically to the pro rata share of the Net Dependable Capability of Seder's undivided equity interest in such Facility. Seller shall provide Buyer with written notice of each report to ERCOT made by Seller modifying or confirming a Facility's Net Dependable Capability, accompanied by any and all documentation identifying the reasons for maternal changes to the Net Dependable Capability of each individual unit. "11Tet Dependable Capability" has the meaning set forth in the ERCOT Guides. "Neiv Collateral" has the meaning set forth in Section 9.2. "11Tew Governmental Charges" means (.i} any Governmental Charges enacted and effective after the Effective Date, including without limitation, that portion of any Governmental Charges or New Governmental Charges that constitutes an increase or that cause the Facility or Facilities to incur additional or new expenses less Governmental Charges enacted or imposed. prior to the Effective Date that are replaced by the New Govei-nmen.tal Charge, or (ii} any Law or interpretation thereof, enacted and effective after the Effective Date resulting in a new or additional expense to the Facility or the .Facilities or the application of any Governmental Charges to a new or different class of parties; provided, however, that in n.o event shall the term "New Governmental Charges" include the cost of Preexisting Environmental Commitments. For the avoidance of doubt, New Governmental Charges shall include, without limitation, costs associated with Carbon Remediation. "Oak Grove Facility" means Oalc Grove Unit 1 and Oak Grove Unit 2 of the lignite coal-fired power generation facility known as the Oak Grove Generating Station located in Robertson County, Texas with an approximate planned cumulative Net Rated Capacity of equal to the lesser of (i} 1,654 megawatts and (ii} Seller's undivided. equity interest in the Oak Grove Facility. "Dak Grope Unit 1" means Unit 1 of the Oak Crrove Generating Station with an approximate planned cumulative Net Rated Capacity of equal to the lesser of (i} 817 megawatts and (ii} Seller's undivided equity interest in Oak Grove Unit 1. 11 ~cxEOUTZaIV Copy "Oak Grove Unit. 2" means Unit 2 of the Oak Grove Generating Station with an approximate planned cu.~nulative Net Rated Capacity of equal to the lesser of (i) 837 megawatts and. (ii} Seller's undivided equity Interest in Oak Grove Unit 2. "ordered Backdown" has the meaning set forth in Section 5.2. "Participating 1Vlember" means a member of Buyer that has entered into a Member Output Contract. "Party" and "Parties" have the meaning set forth in the preamble of this Agreement, and. shall ine:iude the successors and assigns thereof. "Person" means a natural person, corporation, electric cooperative, partnership, trust, association, joint venture, real estate investment trust or business trust (including any beneficiary thereof), unincorporated association, Governmental Authority and. any other form of business or legal entity. "Planned Outage" has the meaning set forth in Section 6.1. "Plant Bus" or "Plant .Buses" means the point or points at which the 345kV bus at the units at the Martin Lake Facility, Big Brown Facility and Oak Grove Facility connect to the ERCOT transmission system. "Preexisting Environmental Comn-iitments" means the twenty percent (20%} reduction of NOx, SO2 and mercury output below 2005 levels that Seller, Guarantor, or their Affiliates committed to on or before October 10, 2007 on a portfolio basis. The expense of the Preexisting Environmental Commitments shall be paid by Seller or its Affiliates, and no portion of such expense shall be charged to ar payable by Buyer. "Product" or "Froducts" means Contract Capacity, Contract Energy and Alternate Energy, if any. "Prorr~ta" means Buyer's proportionate share of Capacity in a Facility or Facilities calculated by dividing the Contract Capacity by the Net Rated Capacity of the Facilities. "Prudent Industry Practice" means any of the spectrum of practices, methods, standards and acts engaged in or adopted by a significant portion of the electric power industry that, at a pa~~ticular tinge, in the exercise of reasonable judgment in light of the facts known or that should reasonably have been known at the time a decision was made, could have been expected to accomplish the desired result consistent with good business practices, reliability, economy, safety and expedition, and which practices, methods, standards and acts reflect due regard. for operation and maintenance standards recommended by the Facility's equipment suppliers and manufacturers, operational limits, and all thenWcurrent and then-applicable Laws. Prudent Industry Practice is not intended to be limited to the optimum practice, method, standard or act to the exclusion of all othexs but rather to be a spectrum of acceptable practices, methods, standards or acts. 12 "QSL~'" means the entity which is responsible for performing the responsibilities defined For a Qualified Scheduling Entity under the ERCaT Guides, or their successor in function. "Receiving Party" has th.e meaning set forth in Section 17.1 hereof "Refrnn~rce'; "Refinanced" and. "Refrnancing" has the meaning set forth in the Intercreditor Agreement or. in any succeeding intercreditor agreement with respect to the New Collateral as set forth in Section 9.2. "REP" means Retail Electric Provider as defined in the ERC4T Protocols. "Replacement Agreement" has the meaning set forth in Article 12. "Replaee~nej:t Price" means the price at which Buyer, acting in a commercially reasonable manner, purchases at the Delivery Point{s} or, absent the ability to purchase at the Delivery Point(s) after using commercially reasonable efforts, a delivery point chosen by the Buyer in a commercially reasonable manner, a replacement for the Product not delivered by Seller, plus {i) costs reasonably incurred by Buyer in purchasing such substitute Product and {ii) additional transmission charges, if any, reasonably incurred by Buyer to the Delivery Point{s}, or absent a purchase, the market price at the Delivery Point{s} for such Product not delivered. as determined. by Buyer in a commercially reasonable manner; provided, however, in no event shall Buyer be required to utilize or change its utilization of its owned or controlled assets or market positions to minimize Seller's liability. "Resale Price" means the price at which Seller, acting in a commercially reasonable manner, resells at the Delivery Poi.nt(s} or, absent the ability to resell at the Delivery Point{s) after using commercially reasonable efforts, a delivery point as chosen by the Seller in a commercially reasonable manner, the Product not received by Buyer, deducting from such proceeds any (i} costs reasonably incurred. by Seller in reselling such Product, and {ii) additional transmission charges, if any, reasonably incurred by Seller in delivering such Product to the third party purchaser, or absent a sale, the market price at the Delivery Point{s} for such Product not received as determined by Seller in a commercially reasonable manner; provided, however, in no event shall Seller be required to utilize or change its utilization o:~ its owned or controlled assets, including contractual assets, or market positions to minimize Buyer's liability. "SB~P" means the Standard 8~ Poor's Rating Group {a division of The McGraw-Hill Companies, Inc.) o.r its successor. 13 i EXECUTION COPY "Secured Commodity I~'edge and Power Sales Agreement" has the meaning specified in the Intercreditor Agreement. This Agreement is stipulated to be Secured Commodity Hedge and. Power Sales Agreement. "Secured obligation" or "Buyer's Secured obligation" is the value of this lien as calculated from time to time pursuant to Section 9.1(a}. "Security Documents" shall have the meaning set forth in the Credit Agreement. "Seller" means Big Brown (to the extent that Contract Energy and Contract Capacity are to be provided from the Big Brown Facility as hereinafter provided}, Oak Grove (to the extent that Contract Energy and Contract Capacity are to be provided from the Oak Grove Facility as hereinafter provided}, and Luminant Generation (to the extent that Contract Energy and Contract Capacity are to be provided from the Martin Lake Facility as hereinafter provided.}, and with respect to each, their respective successors and assigns. "Seller's Loss" has the meaning set forth in Article 12. "Seller Representative" shall mean Luminant Generation Company LLC. "Seller Termination Payment" has the meaning set forth in Article 12. " "Service Commencement Date" means one {1}minute before 12:01 a.m. CPT on January 1, 2ao9. "Settlement Ir~tterva~' has the meaning as set forth in the ERGOT Guides. "Term" has the meaning set forth in Section 2.1(a) hereof. "Termination Payment" has the meaning set forth in Article 12. "Transmissio~i Losses" means losses associated. with the transmission of Energy hereunder from resources used by Seller to the Delivery Point as determined in accordance with the ERC~T Guides. "Transmission Service Provider" shall mean, as defined in the ERGOT Protocols (both Zonal and Nodal}, an entity under the jurisdiction of the PUCT that owns or operates Transmission Facilities used for the transmission of electricity and provides transmission service in the ERGOT Transmission Grid. for the Facilities. "TRE" means the Texas Regional Entity. "U~teartted ,Portion" means the amount calculated by taking the Capacity Prepayment divided by the number of months in the Term times the months remaining in the Term. 14 . ....: ...:........... ..:.e.:.. :yn W: :~'.: i~rn ~:rK~:~~ •Y..~.. ... .. .. .... ... ..._.._ .. _.. ..... ...-r.rvr~..:vr.. s. sl' .X s..../.../....t~/„~1'w:......i. bi ....:t. ......... r.n.~w.... iY..r, v. n ..... ..... .. ... ....... ..a. ... ..e..w. ~. ...s<vn....r......,r, r.. ..>~.~. .._.+..a r, .... a.f .r 4 EXECU'T'YOl~ COPX "Unit" means each of the generating units at the Big Brown Facility, the Oak Grove Facility and the Martin Lake Facility. "Unit Contingent Energy" means the Energy to be supplied by Seller to Buyer from the Facilities under the terms of this Agreement, for which nondelivery is excused to the extent that: {i) a Facility is ~ unavailable as a result of a Forced Outage or a Planned Outage; (ii} Buyer fails to perform any of its obligations under this Agreement or ane or more of its Participating Members prevents Seller from delivering the Products; or (iii) an event of Force Majeure prevents delivery of such Energy. 1.2 Principles of Interpretation. Unless the context requires otherwise, any reference in this Agreement to any document means such document and ail schedules, exhibits, and attachments thereto as amended and in effect from time to time. Unless otherwise stated, any reference in this Agreement to any Person or Party includes its permitted successors and assigns and, in the case of any Governmental Authority, any Person succeeding to its functions anal capacities. The words "hereof", "herein" and "hereunder" and. words of similar import when used in this Agreement, unless otherwise expressly specified, refers to this Agreement as a whole and not to an.y particular provision of this Agreement. The singular includes the plural, and the masculine includes th.e feminine and neuter genders. Whenever the term "including" is used herein in connection with a listing of items included within a prior reference, such listing shall be interpreted to be illustrative only, and shall not be interpreted as a limitation on or exclusive listing of the items included within the prior reference. The language used in this Agreement is deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party. All times set forth in this Agreement shall be construed to be CPT. ARTICLE 2 TERTVI; COMNYERCIAL OPERA'T'ION DATE 2.1 Term of Agreement and Commencement of Service. [Jnless a Party shall have terminated this Agreement on or before the Member Contract Deadline as provided in Section 11.1, below, Seller shall begin providing and Buyer shall begin receiving the Products as set forth herein on the "Service Commencerrtent Date ", and shall. terminate at one { 1) minute before 12:41 a.m. (CPT) on January 1, 2033, unless earlier terminated in accordance with the terms of this Agreement {"~'erm"). 2.2 Facility Status Update. Seller shall use commercially reasonable efforts to keep Buyer informed of material milestones and/or material setbacks during the construction phase of the Oak Grove Facility prior to COD of Oalc Grove Unit l and COD of Oak Grove Unit 2. 15 EXECUTION COP'S AItTxCLE 3 PIJI7CHASE AND SALE 3.1 Capacity and Ener (a) Seller shall supply, sell and deliver the Products from the Martin Lake Facility and the Big Brown Facility on the Service Commencement Date and until the COD of Oak Grove Unit 1 as set forth l~erein. Upon COD of Oak Grove Unit 1, Seller shall supply, sell and deliver the Products from the Martin Lake Facility, the Big Brown Facility and Oak Grove Unit 1 until COD of Oak Grove Unit 2 as set forth herein. Upon the COD of Oak Grove Unit 2, Seller shall supply, sell and deliver the Products from the Martin Lake Facility, the Big Brown Facility and the Oak Grove Facility as set forth herein. (b} At all times during the Term, Seller shall have the right to sell any capacity in the Facilities in excess of the Contract Capacity ("Additional Capacity") andlor Energy produced by the Facilities in excess of the Contract Energy ("Additional Energy"} to a third party without Bu.yer's approval if Seller has not otherwise agreed to sell such Additional Capacity and/o.r Additional Energy to Buyer. (c) Subject to the Laws o.f the State of Texas, Buyer reserves for itself and. for - Buyer's REP andlor QSE and Seller grants to Buyer and Buyer's REP andlor QSE the right to sell all or any portion of the Contract Energy not consumed by the Participating Members to third parties on such terms as Buyer maybe able to negotiate. 3.2 Title and Risk of Loss. Title to and risk of loss of the Products provided in accordance with this Agreement shall transfer from Seller to Buyer at the Delivery Points}. Big Brown warrants that it will deliver the Products required in this Agreement to be delivered from the Big Brown Facility to Buyer at the Delivery Point free and clear of all liens, security interests, claims, encumbrances, and adverse interests therein or thereto. Oak Grove warrants that it will deliver the Products required. in this Agreement to be delivered from th.e Oak Grove Facility to Buyer at tl~e Delivery Point tiree and clear of a1i liens, security interests, claims, encumbrances, and. adverse interests therein or thereto. Lurn.inant Generation warrants that it will deliver the Products required in this Agreement to be delivered from the Martin Lake Facility to Buyer at the Delivery Paint free and clear of all liens, security interests, claims, encumbrances, and adverse interests therein. or thereto. 3,3 Buyer. Failure. If Buyer fails to schedule andlor receive all or part of the Product under this Agreement and such failure is not excused under the terms of this Agreement or by Seller's failure to perform, then Buyer shall pay Seller, on the date payment would otherwise be due with respect to the month in which the failure occurred, an amount for each MWh of such deficiency equal to the positive difference, if any, obtained by subtracting the Resale Price from the Monthly Energy Price (which such Monthly Energy Price shall include charges under Article 20). If Buyer is required to pay Seller damages under this Section 3.3, then Buyer's failure to receive andlor schedule the Energy for which the damages were paid shall be deemed to have been Energy received andlor scheduled for purposes of calculating the Equivalent Availability Factor -Contract. The invoice for such amount shall include reasonable detail as to the 16 EXECUTIaN COPY calculation of such amount. Notwithstanding any provision in this Agreement, this Section 3.3, or Section 10.3(a} to the contrary, Buyer shall not be deemed to be excused. from receiving the Products from Seller by the payment of damages under this Section 3.3. In no event shall. Buye~• be required to pay damages under this Section 3.3 in excess o1'the Seller's Loss. 3.4 Seller Failure. If Seller fails to schedule and/or deliver to Buyer all or part of the Product under this Agreement and such failure is not excused. by the terms of this Agreement, then Seller shall pay Buyer, on the date payment would otherwise be due to Seller with respect to the month in which the failure oceuned, an amount (i) for each MWh of such deficiency equal to the positive difference, if any, obtained by subtracting the Monthly Energy Price (which such Monthly Energy Price shall include charges under Article 20) from the Replacement Price. The invoice for such. amount shall include reasonable detail as to the calculation of such amount. Notwithstanding any provision in this Agreement, this Section 3.4, or Section 10.1(a) to the contrary, Seiler shall not be deemed to be excused from supplying and delivering the Products to Buyer by the payment of damages under this Section 3.4; provided, however, if Seller is required to pay Buyer damages under this Section 3.4, the Energy Seller failed to deliver andlor schedule for which the damages were paid shall be deemed to have been delivered. and/or scheduled for purposes of calculating the Equivalent Availability Factor-Contract. For the avoidance of doubt, Seller shall .not be required to pay damages under this Section 3.4 when the failure to schedule and/or deliver is excused under the definition of Unit Contingent Energy or Ordered. Backdown. In no event shall Seller be required to pay damages under this Section 3.4 in excess of Buyer's - Loss. 3.5 Ancillary Service Responsibility. Notwithstanding the designation of the Delivery Point of a Facility, Seller shall not be responsible for providing any Ancillary Service required by Buyer for the delivery of Contract Energy into and through the ERCOT transmission system. In the event Ancillary Services are provided to Buyer by Seller, then Buyer shall reimburse Seller for the Prorata share of such services at Seller's cost. ARTICLE 4 PRICING 4.1 Payment for Contract Energy (a) Commencing on the Service Commencement Date, and. continuing throughout the Term, Buyer shall pay or cause to be paid through a Retail Service Provider or QSE perrrzitted under Section 4.3 to the Seller Representative on behalf of` each Seller Party, to be divided among them as they may internally agree and as their respective interests may appear, the Monthly Energy Payment. Payments made to the Seller Representative shall be deemed to be in satisfaction of Buyer's obligations to all Seller Parties, regardless of whether or not the Seller Representative remits funds to any of the other Seller Parties. (b) Prenavxnent for Contract Capacity. On or before December 23, 200$, Buyer shall prepay $465,000,000.00 (the "Crrpnrcity Prepayfneti~'~ to the Seller Representative on behalf of each Seller Party as they may internally agree and. as their respective interests may appear, for capacity in the Facilities as provided in this Agreement. Payments made to the Seller Representative shall be deemed to be in satisfaction of Bu.yer's obligations to all Seller Parties, 17 E~ECUTZUN COPY regardless of whether or not the Seller Representative remits funds to any of the other Seller Parties. 4.2 Ad,~ustment to Capacity Payment. (a) For each 1 % by which the Equivalent Availability Factor -- Contract during any month. is calculated to be below 90%, Buyer shall receive a credit calculated as follows: Capacity Prepayment 1 total number of months in the Term x 1.00% per percent below 90%. (b) For each 1 % by which Equivalent Availability Factor -Contract during any month is calculated to be above 90%, Seller shall receive a supplemental payment calculated as follows: Capacity Prepayment /total number of months in the Term x 0.50% per percent above 90%. ~c) The "Er~uivalent Availability Factor -Contract" shall be calculated at the end oI' each month using a rolling, weighted-average of the Equivalent Availability Factor-Facility of all Facilities over the most recent 1,095 Days. This weighted average shall be based on the proportion of Contract Capacity represented by Buyer's Allocation of Net Rated Capacity in each Facility as stated below in this Section 4.2 (c). The "ErluivaleutAvailability .Factor -Facility" shall be calculated for each Facility as follows: Equivalent Availability Factor -Facility = [~s> > o9s Min { C, (M + Alt Energy + FM + OB} } ~~~ ~ s r .1 o9s Cst] C =Buyer's allocation of a Facility's Met Rated Capacity during any Settlement Interval set forth as fo:l.l ows Prior to the COD of Oak Grove Unit 1 and COD of Oak Grove Unit 2: Big Brown 51 MW divided by the number of Settlement Intervals in an hour Martin Lake 99 MW divided by the number of Settlement Intervals in an hour Oak Grove 0 MW divided by the number of. Settlement Intervals in an hour Upon COD of Oak Grove Unit 1: Big Brown 41 NxW divided by the number of Settlement Intervals in an hour Martin Lake $0 MW divided by tlae number of Settlement Intervals in are hour Oalc Grove 29 MW divided by the number of Settlement Intervals in an hour 18 ~~CUTIQN COPY Upon COD of Oak Grove Unit 1 and the COD Of Oak Grove Unit 2: Big Broom 3S MW divided by the number. of Settlement Tntervals in an hour Martin. Lake 68 MW divided by the number of Settlement Intervals in an hour Oak Grove 47 MW divided by the number of Settlement Intervals in an hour *As the Net Rated. Capacity of any Facility{s) may change, the megawatts listed above shall be adjusted to equal the product of (i}{a} ISM and {b} the Net Rated Capacity at the Facility divided by (ii} the Net Rated Capacity of all Facilities M = P *HSL or, any greater amount delivered by Seller, but in no event greater than C HSL =High Sustainable Limit as defined by ERCOT P = Buyer's Minimum Allocation Percentage of the Energy physically produced at a Facility and available to be scheduled for delivery to the Buyer at the Delivery Point of that Facility during a Settlement Interval. Buyer's Minimum Allocation Percentage may be adjusted from. time to time throughout the Term to reflect changes in the Net Rated Capacity of a Unit{s}. Should the Net Rated Capacity of a Units} change, Minimum Allocation Percentages will be calculated as follows: - Prior to the COD of Oak Grove Unit 1 and the COD of Oak Grove Unit 2: Minimum Allocation Percentage Big Brown 51 1VI~V Divided by the total Net Rated Capacity of Big Brown Units 1Vlaz~tin Lake 99 MW Divided by the total Net Rated Capacity of Martin Lake Units Oak Grove Zero Upon. COD of Oak Grove Unit 1: Minimum Allocation Percentage Big Brown 41 M'V~ Divided. by the total Net Rated Capacity of Big Brown Units Martin Lake 80 MW Divided by the total Net Rated Capacity of Martin Lake Units Oak Grove 29 MW Divided by tl~e total Net Rated Capacity of Oak Grove Unit I Unon COD of Oak Grove Unit 1 and the COD of Oak Grove Unit 2: Minimum Allocation Percentage Big Brown 3S MW Divided by the total Net Rated Capacity of Big Brown Units Martin Lake 68 MTV Divided by the total Net Rated Capacity of Martin Lake Units Oalc Grove 47 M`JV Divided. by the total Net Rated Capacity of Oak Grove Units 19 EXECTJTTUN CUPY AIt Energy w Energy not physically produced at a Facility but otherwise scheduled for delivery to the .Buyer at the Delivery Point corresponding to that Facility during a Settlement Interval. FM -The megawatts where delivery was excused due to Force Majeure. OB =The megawatts lost due to the Ordered Backdown ~Si1095 ~ All ERGOT Settlement Intervals during the most recent 1,095 Days (d) Tlie Equivalent Availability Factor -- Facility shall be deemed to be ninety ,percent (90%) for purposes of determining any payment to Buyer and ninety percent (90%} far purposes of determining any additional payment to Seller for each Settlement Interval included. in the calculation above that is a Settlement Interval prior to the Service Commencement Date. 4.3 Payment through Retail Electric Provider. Buyer reserves the right to make payments required of it under this Agreement through a REP and/or through a QSE subject to Seder's prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed. For the avoidance of doubt, a failure by the REP and/or QSE to pay amounts to Seller as set forth herein shall be considered a Buyer Default under Section 10.3(b}. ARTTCLE 5 AVAILABILITY 5.]. Availability Plan. By 8:30 a.m. (CPT} of each Day and as otherwise additionally required. to comply with the ERGOT Guides during the Term, Seller shall deliver to Buyer's QSE a schedule of the estimated amounts of Contract Energy that the Facilities wi.l.l be available to produce for each Settlement Interval in the following Day (an "Availability ,Plan"}. Seller shall notify Buyer of updates to the Availability Plan. as same are made. Seller shall also include in its Availability Plan any Alternate Energy that Seller anticipates delivering as ,part of the Contract Energy. 5.2 Availability Reduced b~Ordered. Backdown. In the event that ERGOT directs a reduction in generation by any or all of the Facilities as a result of an Emergency Condition during any Settlement Interval(s), Buyer and Seller agree that, to the extent of and during such directed reduction, the delivery of Contract Energy from Seller to Buyer shall be reduced in accordance with ERCOT's instruction by a percentage equal to the applicable Minimum Allocation Percentage set forth. in. Section 4.2 (c} (such instructions by ERGOT being referred to herein as an "4rrlered ~8ackrlown"). 5.3 Availabilit~Reduced by Wither ERGOT Dispatch Instructions. It is the intent of the Parties that Buyer shall be credited by ERGOT for Energy delivered at the Delivery Point for all Unit Contingent Energy capable of being produced in each Settlement Interval at each Facility. In the event that a Facility is not operating at its cumulative Net Rated Capacity in any Settlement Interval due to dispatch instructions (other than an Ordered. Backdown} by ERGOT, zo EXECUTION CfJPY Seller shall deliver Alternate Energy in a quantity that when combined with the Prorata share of the Unit Contingent Energy actually produced at that Facility shall be equal to but not exceed the Buyer's allocation of a Facility's Net Rated Capacity during any Settlement Interval as specified in Section 4.2(e}. • ARTICLE G OUTAGES; OPERATION AND MAIN'T'ENANCE G.1 Planned Outages. For each calendar year during the Term, n.o later than October 1st of the preceding calendar year, Seller shall provide Buyer with a proposed schedule of Planned Outages of each unit of the Facilities for the following year. For each calendar year during the Term, Planned Outages shall in no event occur during the time periods including June 15 through September 15 nor during the months of December, January and February. Seller shall: (i} use commercially reasonable efforts to finalize the proposed schedule of Planned Outages at least three (3) months prior to the first Planned Outage planned for any calendar year during the Term, and (ii) provide Buyer with written notice o:~ such schedule as soon as is practicable, but in no event later than ninety (90) Days prior to the first Planned outage of such calendar year. G.2 Forced Outages. Seller and Buyer shall give notice as soon as practicable to the other Party's QSE of any Forced Outage affecting delivery or receipt of the Contract Energy. 6.3 Operation and Maintenance. Seller shall cause the Facilities to be operated and maintained in accordance with Prudent Industry Practice. Seller shall use all commercially reasonable efforts to operate the Facilities so that each Facility complies with the Law and all applicable Legal and regulatory requirements. ARTICLE 7 SCHEDULING AND TRANSIVIISSION 7.1 aualified Scheduling Entity. Seller and Buyer shall each engage a QSE that shall be responsible for scheduling the Products produced and delivered hereunder or performing Energy Trades in accordance with the ERGOT Guides. 7.2 Transmission Service. Seller shall arrange and be responsible for the costs of delivering the Products, including any associated Transmission Losses from the resources used by Seller to the Delivery Points. Buyer shall arrange and be responsible for the costs of delivering the Products from the Delivery Points to its load. 7.3 Scheduling. The Parties shall con~frm expected. deliveries and receipts of Contract Energy via the submission of schedules, or Energy Trades, in. accordance with. the ERCOT Guides. Should. one Party fail to accurately submit or confirm a schedule or Energy Trade, and should the other Party incur charges due to said failure, th.e failing Party shall be responsible for reimbursing the affected Partly for such charges in addition to any charges under Section 3.3 or 3.4, as applicable. Should, due to no fault of either Party, a schedule or Energy Trade not be recognized by ERCOT, the Parties shall cooperate to correct the circumstances in such a manner as to, to the extent possible, leave both Parties economically indifferent as to the failure. 21 ExECVTION copy ARTICLE 8 BILLING AND PAYMENT 8.1 Invoice anal Payment Schedules. (a) The calendar month shall be the standard period far all payments under this Agreement. As soon as practicable after the end of each month, Seller will render to Buyer an invoice for the Monthly Energy Payment net of appropriate adjustments (whether positive or negative), charges and credits as provided in Section 3.3, Section 3.4, Section 4.2 and Article 20, above, for Energy delivered. to Buyer during the preceding month. All such invoices under this Agreement shall be due and payable in accordance with Seller's invoice instructions on or before the Iaer of: (i) the twentieth (20th) Day of each month, or (ii} the tenth (10th) Day after Buyer's receipt of the invoice or, if such Day is not a Business Day, then on the next Business Day. (b) Each Party will make payments by electronic funds transfer, or by other mutually agreeable method(s), to the account designated by the other Party. Any amounts not paid by the due date will be deemed delinquent and will accrue interest at the Interest Rate, such interest to be calculated from and including the due date to but excluding the date the delinquent amount is paid in full. 8.2 Netting. The Parties hereby agree that they shall discharge mutual debts and payment - obligations due and owing to each other on the same payment due date pursuant to this Agreement through netti.n.g, in which case all amounts owed by each Party to the other Party and due on the same payment due date under this Agreement, shall be netted so that only the excess amount remaining due shall be paid by the Party who owes such excess amount; provided, however, no amounts under this Agreement shall be subject to diminution or recou.pment by set- ol~: 8.3 Disputed Charges. A Pa~•ty may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice, rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twenty-four (24} months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due, with notice of the objection given to the other Party. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment o:f the disputed amount shall not be required until the dispute is resolved.. Upon resolution of the dispute, any required payment shall be made within five (5) Business Days of such resolution along with interest accrued at the Interest Rate from and including the due date to but excluding the date paid. Inadvertent or incorrect overpayments shall be returned within five (5) Business Days after request of the Party adversely affected by the overpayment. In the absence of such a request for return, the Party receiving such overpayment shall credit the amount thereof to the invoices} next becozning due. In either case, interest shall be paid or credited to the overpaying Party at the Interest Rate from and including the date of such overpayment to but excluding the date repaid or the date of the invoice, as the case m.ay be. Any dispute with respect to an invoice is waived unless the other Party is notified in accordance with this Section 8.3 within twenty-four (24) months after the invoice is rendered or any specific adjustment to the invoice is made. 22 EXECUTION COPY 8.4 Audits. Each Party has the right, at its sole expense and during normal working hours, to examine copies of the relevant portions of the records of the other Party to the extent reasonably necessary to verify the accuracy of any invoice, charge or calculation nnade pursuant to this Agreement. If any such examination reveals any inaccuracy in any invoice or calculation, the necessary adjustments i.n such invoice or calculation, and the payment of any adjustment thereto, shall be paid, with interest at the Interest Rate calculated from the date the overpayment or underpayment was made until paid, by the responsible Party within ten {1 a) Days after it receives an invoice from the other Party setting forth in reasonable detail the calculation of such adjustments; provided, however, that no adjustment for any invoice or payment will be made unless the objection to the accuracy thereof was made within twenty-fou.r {24) months after the date of the invoice which is the subject of the dispute, and thereafter any objection shall be deemed waived. S.5 ERGOT Barred Issue. It is recognized by the Parties that ERGOT has some established time periods for disputing certain matters and the Parties expressly desire to be bound. by such periods in their performance under this Agreement. Therefore, notwithstanding any provisions in Article 8 of this Agreement to the contrary, in the event either Party is barred from disputing and correcting or adjusting with ERGOT any matter of any nature whatsoever affecting any matter covered by this Agreement {an "ERGOT Bnrrerl Issue"), then either Party shall be barred for all purposes from disputing any portion of any statement, invoice, notice or other matter hereunder to the extent that either Farty is unable to receive adjustment from or dispute Bach - matter with ERGOT because such statement, invoice, notice or other matter is an ERGOT Barred Issue, even if such Party's notice is given within the twenty~four {24) months' period set forth in Article 8. ARTYCLE 9 SECUI~T'Y 9.1 Buffer's Securit . {a) Once Seller has received the Capacity Prepayment from Buyer and subject to the prior execution and delivery by Buyer of an Accession Agreement in accordance with Section 5.6 of the Interereditor Agreement, SeI.ler will contemporaneously secure its obligations under this Agreement by granting to Buyer a First Lien in accordance with the terms of the Intercreditor. Agreement, including, without limitation, by designating this Agreement as a Secured. Commodity Hedge and Power Sales Agreement and. its obligations under this Agreement as Secured Obligations. Throughout the Term, Buyer's First Lien {or the amount of any Substitute Collateral or New Collateral) amount shall automatically adjust to the Buyer Termination Payment less any applicable Collateral Threshold amount. {b) Subject to Section 9.2 below, in no event may Seller sell assets or permit the release of the liens on the Collateral, individually or in the aggregate and whether in one or a series of transactions, on. assets comprising alI or substantially all of the Collateral. Subject to Section 9.2 below, if the Credit Agreement is terminated, including in connection with any amendment, restatement, supplement, replacement, Refinancing, waiver or other modification from time to time, the liens securing Seller's {and each guarantor's) obligations to Buyer shall survive. Subject to the foregoing, Buyer agrees that it shall, at Seller's sole cost and expense, 23 EXECUTIUI~ COPY release .its liens on anal security interests in the Collateral (and. Buyer shall promptly execute such releases and other documentation as may be necessary or, in the reasonable opinion of Seller, desirable to effect such release) on the date on which no obligations in respect of this Agreement remain outstanding (other than contingent and unasserted obligations in respect of indemnities and similar provisions}. (c} The fu1•ther assurances terms, in the form contained in Section 9.9 of the Intercreditor Agreement giving effect to any amendment, restatement, supplement, replacement, Refinancing, waiver or other modification from time to time, shall be incorporated by reference herein or by supplement hereto. (d) For purposes of the Intercreditor Agreement, the Floor Amount of Buyer in respect of this Agreement shall be $0. 9.2 (a} Substitute Collateral. At any time during the Term (including upon a Refinancing} and upon three (3} Business Days' prior written notice, Seller may substitute any collateral provided hereunder (including the First Lien} with (i) a letter of credit, from Investment Grade banks (with expiring Letters of Credit to be replaced with a new letter of credit not less than 30 days prior to expiration} (ii} cash and/or cash equivalents (iii} guaranty from a guarantor that is investment Grade, or (iii) other collateral reasonably acceptable to Buyer {(i), (ii} and {iii} referred to as the "Substitute Collateral"). Upon the transfer by Seller to Buyer of the Substitute Collateral, Buyer shall, at Seller's sole cost and expense, release its liens on and security interests in the Collateral or New Collateral, as applicable (and Buyer shall promptly execute such releases and other documentation as may be necessary or, in the reasonable opinion of Seller, desirable to et'fect such release and/or relinquish any rights to make claims on the First Lien}. (b} Replacement Collateral Upon Refinancing. Seller may, upon a Refinancing, replace the First Lien with the new collateral package (the "New Collateral"} under such Refinancing provided that Buyer continues to be pari passu with the lenders under such Refinancing on a first lien basis (subject to other liens which are permitted by the terms of the documentation governing such Refinancing). The New Collateral shall be substantially similar in substance to the First Lien (as constituted on the Business Day prior to the Refinancing} as reasonably determined by Seller in good faith. The Parties agree that the New Collateral shall automatically be deemed to be substantially similar so long as {A} (i) the assets and other property subject to the New Collateral are identical to the assets and property subject to the First Lien as of the Business Day prior to the Refinancing and (ii} after giving effect to the Refinancing, the amount of Secured Obligations in the form of debt for borrowed money outstanding after giving effect to such Refinancing shall not exceed. 110°/a of the amount of such obligations outstanding immediately preceding such Refinancing; provided however that if the amount of Secured Obligations in the form of debt for borrowed money outstanding after giving effect to such Refinancing exceeds lI0°/a of the amount of such obligations outstanding immediately preceding sucl~ Refinancing, then the New Collateral shall still automatically be deemed substantially similar so long as, after giving effect to the Refinancing, the ratio of the fair market value (as determined by an independent valuation or appraisal firm selected. by Seller} of the New Collateral divided by the amount of Secured Obligations in the form of debt for borrowed. money outstanding after giving effect to such Ref nancing shall not be less than 24 EXECUTYON COPY 1.15:1.00 or (B} (i) it is secured by Baseload Units that have the nameplate capacity in the aggregate of at least 3,000 megawatts and (ii) after giving effect to the Refinancing, the amount of Secured Obligations in the form of debt for borrowed money outstanding after giving effect to such Refinancing shall not exceed 110% of the amount of such obligations outstanding immediately preceding such Refinancing; provided however that if the amount of Secured Obligations in the form of debt for borrowed money outstanding after giving effect to such Refinancing exceeds 110% of the amount of such obligations outstanding immediately preceding such Refinancing, then the New Collateral shall still automatically be deemed substantially similar so long as, after giving effect to the Refinancing, the ratio of the fair market value (as determined by an independent valuation or appraisal firm selected by Seller} of the New Collateral divided by the amount of Secured Obligations in the form of debt for borrowed money outstanding after giving effect to such Refinancing shall not be less than 1.15:1.00 For the avoidance of doubt, should the New Collateral be subject to multiple secured liens, Buyer's lien sl~all be governed by any new intercreditor agreement entered into at the time of such Refinancing and Buyer agrees to execute any such new intercreditor agreement. Upon the transfer by Seller to Buyer of the New Collateral, Buyer shall, at Seller's sole cost and expense, release its liens on and security interests in the Collateral (and Buyer shall promptly execute such releases and other documentation as may be necessary or, in the reasonable opinion of Seller, desirable to effect such release and/or relinquish any rights to make claims on the First Lien). 9.3 Guarani. In addition to the security provided above, Seller shall provide to - Buyer, and Guarantor shall execute and deliver to Buyer on the date set forth in Section 11.1 {c) and maintain throughout the Term a guaranty substantially in the form attached. hereto as Exhibit "S" and in the amount, which such amount shall automatically adjust, equal to the Buyer Termination Payment Tess any applicable Collateral Threshold amount. ARTICLE I0 DEFAULT 10.1 Default By Seller. Except as otherwise excused under this Agreement, the occurrence of any of the following shal l constitute an event of default by Seller ("Seller Default"): (a) Seller fails to supply or deliver the Contract Energy (including Alternate Energy under Section 5.3} to Buyer as required .hereunder for five (5) consecutive Days and such failure continues for two {2) Days after written notice provided by Buyer to Seller; or Seller fails to supply or deliver the Contract Energy (including Alternate Energy under Section 5.3) and such failure exceeds the equivalent number of Settlement Intervals of seven (7} days total in any ninety (90) day period., or ten (10} days in any twelve (12} month period; provided, however, this Section 10.1(x) shall not apply if such supply or delivery is excused by other provisions in this Agreement; (b} If the security provided hereunder is a First Lien or the New Collateral, any lender under the First Lien, as same may have been renewed, extended, modified, Refinanced or secured by the New Collateral as provided in Section 9.2 from time to time (including any new lender to the New Collateral), has accelerated. the debt, or otherwise caused 25 EXECUTION COPY amounts owing to be immediately d.ue and payable under the Credit Agreement then in eFfect, and/or a foreclosure proceeding is coxn.menced by the Collateral Agent against a secured asset; (c} Seller fails to provide and continuously maintain security to Buyer as required in Article 9, above; (d} Seller breaches any material contractual obligation (except to the extent constituting a separate Seller Default) to Buyer under this Agreement and such breach continues for a period. o~f'thirty (30} Days after the date on which written notice thereof is given to Seller by Buyer; (e} A representation or warranty furnished by Seller in. connection with. this Agreement was false or misleading in any material respect when made, unless (i} the fact, circumstance or condition that is the subject of such representation or warranty is made true within thirty (30} Days after the Buyer has given notice thereof to Seller, or Seller has timely undeY-taken action to make such. representation or warranty true within said thirty (30} Days and thereafter diligently continues its efforts to make same true, provided that the warranty or representation is made true and. correct within ninety (90} Days thereafter; and (ii) such cure removes any adverse affect on the Buyer of such fact, circumstance or condition being otherwise than as first represented, or such fact, circumstance or condition being otherwise than as first represented does not materially adversely affect the Buyer; and " (1} Any Seller or Guarantor becomes Bankrupt. 10.2 Remedies on Seller Default. Unless otherwise limited by the terms of this Agreement, the Buyer shall have the right, but not the obligation, to elect to puxsue any one or more of its remedies against Seller., which shall consist of, but not be limited to, the following: (a} Buyer may immediately suspend performance of its obligations under this Agreement, including without limitation its obligations to pay the Monthly Energy Payment and adjustments, .i:F any, to the Capacity Payment as provided in Article 4, until the earlier of (i} the Day the Seller Default has been cured i.n accordance with the terms of this Agreement or (ii) ten (10} Business Days; (b) Buyer may terminate this Agreement, so long as Buyer tex:cninates within ninety (90} days of the Seller Default (if Buyer fails to terminate within such 90 day period, Buyer waives its right to terminate for such Seller Default), and calculate a Termination Payment in accordance with Article 12; and/or (c) Buyer may exercise any other remedy available to it at law or in equity, provided, however, that in the event that any remedy of damages awarded by a court shall exceed the amount of damages that Buyer would be entitled to receive from Seller under Article 12 of this Agreement, then Seller and Buyer agree between themselves that Seller's obligation to perform under such award shall be limited to the amount of damages for such default contractually provided for under Article 12 of this Agreement, plus reasonable attorney's fees. 26 EXECUTION CUPY 1Q.3 Default By Buyer. Except as otherwise excused under this Agreement, the occurrence of any of the following shall constitute an event of default by Buyer ("Buyer De, fault"): (a) Buyer fails to accept delivery of the Contract Energy from Seller as required hereunder for five (5) consecutive Days and such failure continues for two (2) Days after written notice provided by Seller to Buyer; or Buyer fails to accept delivery of the Contract Energy and such failure exceeds the equivalent number of Settlement Intervals of seven {7) days total in any ninety {90} day period, or ten (10} days in any twelve { 12} month period; provided, however, tliis Section 10.3(a) shall not apply if such acceptance is excused by other provisions of this Agreement; or (b} Except :for disputed charges arising under Section 8.3 and permitted withholding of payments under Section 10.2(b}, {i) Bu.yer (or its affiliated REP and/or QSE) fails to pay any amounts due hereunder, and such failure continues for a period of five {S) Business Days after the date on which written notice of a such default and failure has been received by Buyer or, (ii) in the event Buyer has paid its independent third party REP or QSE, as applicable, and such REP or QSE fails to pay Seller and Buyer fails to (A) contract with a new REP or QSE within. thirty (30) days after receiving written notice from Seller of such failure to pay or (B} make Seller whole for the missed monthly payment plus interest at the Interest Rate (for the period of time from the date the payment was originally due to th.e date the payment is made) within 180 days of the original d.ue date. In addition, it sla.all be considered a Buyer Default if, - after contracting with a new REP or QSE, if such REP or QSE or Buyer fails to pay any amounts due hereunder and such failure continues for a period of five {S} Business Days after the date on which written notice of such default and failure has been received by Buyer; or (c} Buyer breaches any material contractual obligation (except to the extent constituting a separate Seller Default} to Seller under this Agreement and such breach continues for a period of thirty {30) Days after th.e date on which written notice thereof is given to Buyer by Seller; (d.} A representation or warranty furnished by Buyer in connection with this Agreement was false or misleading in any material respect when made, unless {i) the fact, circumstance or condition that is the subject of such representation or warranty is made true within thirty (30} Days after th.e Seller has given notice thereof to Buyer, ox Buyer has timely undertaken action to make such representation or warranty true within said thirty (30) Days and. thereafer diligently continues its efforts to make same true, provided that the warranty or representation is made true and correct within ninety t90) Days thereafter; and (ii) such cure removes any adverse affect on the Seller o.f such fact, circumstance or condition being otherwise than as first represented, or such fact, circumstance or condition being otherwise than as first represented does not .materially adversely affect the Seller; or (e) Buyer becomes Bankrupt. ~Q.4 Remedies on Buyer Default. Unless otherwise limited by the terms of this Agreement, the Seller sha11 have the right, but not the obligation, to elect to pursue any one or more of its remedies against Buyer, which shall consist of, but not be limited. to, the following: 27 EXECUTION COPY (a} Seller may immediately suspend performance of its obligations under this Agreement, including without limitation its obligations to deliver Products, until the earlier of (i) the Day the Buyer Default has been cured by payment in accordance with the terms of this Agreement or (ii) ten (10} Business Days; (b) Seller may terminate this Agreement, so Long as Seller terminates within ninety (90) days of the Buyer Default (if Seller fails to terminate within such 90 day period, Seller waives its right to terminate for such Buyer Default}, and calculate a Termination Payment in accordance with Article 12; (c} Seller may exercise any other remedy available to it at law or in equity provided, l~owever, that in the event any remedy of damages awarded by a court shall exceed the amount of damages that Seller would be entitled to receive from Buyer under Article 12 of this Agreement, then Seller and Buyer agree between themselves that Buyer's obligation to perform under such award shall be limited to the amount of damages for such default contractually provided for under Article 12 of this Agreement, .plus reasonable attorney's fees; 10.5 No Waiver in Event of Default. Pursuit by either Party of any remedy for Default pursuant to Section 10.2 or Section 10.4 of this Agreement, as the case may be, shall not constitute a forfeiture or waiver of any amount due by the defaulting Party or of any damages occurring by reason of the violation of. any terms, provisions, or conditions of this Agreerr~ent. - No waiver of any Seller Default, Buyer Default, ar breach of this Agreement shall be deemed or construed to constitute a waiver by the non defaulting Party of any other violation or breach of any of the terms, provisions, or conditions of this Agreement. Forbearance by Seller to enforce one or more of the remedies available upon. the occurrence of an event of $uyer Default shall not constitute a waiver of the tight to fully pursue any and all available remedies upon a subsequent Buyer Default or breach. Forbearance by Buyer to enforce one or more of the remedies available upon the occurrence of an event of Seller Default shall not constitute a waiver of the right to fully pursue any and all available remedies upon a subsequent Seller Default or breach. ARTICLE 11 TERMINATION PRIOR TO SERVICE COMMENCEMENT DATE 11.1 Right of Termination Prior to the Se.rv.ice Commen.cem.ent Date. Each Party grants to the other Party, the right to terminate this Agreement on or before 5:00 p.m. CPT of the last deadline Day set forth in this Section 11.1 as hereinafter provided ("1Vlember Contract. Deadline"}. Each Party's obligations to the other Party under this Agreement are expressly conditioned upon the timely occurrence of each of'the following events: (a) Adoption by Participating Members on or before November 5, 2008, of ordinances or other appropriate action (i} approving the Energy such Participating Member elects to take, (ii) ratifying the form. of Member Output Contract between Buyer and the Participating Member, (iii) agreeing to pay .Buyer for its share of Energy and. charges as outlined in Article 20 delivered to Buyer by Seller, and {iv} authorizing a designated off cial to execute the 1Vlember Output Contract on behalf of the Participating Member; 28 EXEC~CJTION COPY' (b} Buyer's receipt, on or before November 5, 2008, of executed Member Output Contracts for 150 megawatts pursuant to which Participating Members collectively commit to contract for the full Contract Capacity, and containing provisions for (i} an Energy price component and charges under Article 20 associated. with each respective Participating Member's share of the Energy received to be paid as an annual, budgeted expense of such Participating Member subject to annr~al appropriation, (ii) with the right of Buyer to enforce, by a mandamus action against the governing body of the particular defaulting Participating Member, such provisions for any fiscal year for which there has been an appropriation, and {iii) the representations, warranties and. covenants set forth in Section 15.3(d} of this Agreement; (c) Issuance, on or before December 23, 2008, by Buyer of debt in the form of contract revenue bonds, in the amount of not Tess than the Capacity Prepayment plus costs of issuance of and reserves required. to be maintained under such. contract revenue bonds ("Bonds"}, such Bonds to be secured by the pledge and assignment by Buyer to a trustee, pursuant to a trust agreement between Buyer and such trustee, of the capacity payment component of each Member Output Contract constituting a contract under Subchapter A of Chapter 271, Local Government Code, as amended, payable from such respective Participating Member's ad valorem taxes within the limits prescribed by law; (d) Buyer's .payment, on or before December 23, 2008, of the Capacity Prepayment. {e} Seiler delivers a guaranty substantially in the form of Exhibit "5" to Buyer by December 23, 2008. (f} As soon as reasonably practicable, but in no event later than December 23, 2008, Seller shall deliver (i} a reliance letter. from Simpson Thacker & Bartlett ("STB"} expressly allowing Buyer to rely on the opinion of ST$ that was delivered. on October I0, 2007 to the lenders under the Credit Agreement ("STB Opinion"}, (ii} a reliance letter from Vinson & Elkins ("VB~E"} expressly allowing Buyer to rely on the opinion of V&E delivered on October 10, 2007 to the lenders under the Credit Agreement ("V&E Opinion," and together with the STB Opinion, the "Financing Opinions"}, and. (iii} a legal opinion from external counsel selected by Seller containing substantially the provisions set forth in Exhibit "6" with such qualifications and changes made by Seller or its external counsel and approved by Buyer {such approval not to be unreasonably withheld, conditioned or delayed}. For the avoidance of doubt, (a} with respect to the reliance letter contemplated in {i) and (ii} of this paragraph, it is understood that such reliance shall be only as of the date of the STB and V&E opinions and that STB and V&E shall not be under any obligation to update such opinions and {b} with respect to the opinion contemplated in (iii) of this paragraph, it is understood that (y} such opinion can be delivered in one or more opinions by one or more external counsel and {z) if any such opinion. is delivered by STB or V&E such opinion may be in the form of. such Ii.rm's respective Financing Opinion and may contain any .relevant qualification or exception contained in such f rm's respective Financing Opinion (including any qualification or exception that would be applicable to the Agreement). 11.2 Termination Right. If the events set forth in Section 11.1{a) through 11.1(f}, inclusive, have not been met by the Member Contract Deadline, either Party may terminate this Agreement 29 . ... •. ...:;. ..... . .. .. • ... v :.. • .. ~ : . ..~.:: i~r.; ;.'. ....... ... .:..+. ~y r .. .' -Mn Jam .. ... .......... i EXECUTION COPY , by delivering written notice thereof to the other Party, whereupon th.e rights, obligations and liabilities of Seller and Buyer hereunder shall thereupon cease. 11.3 Notice to Seller Concerning Obligations of Participating_ Members. The obligation of a Participating Member to make any payn~.ents pursuant to the energy price component of the Member Output Contract (including• Governmental Charges and New Governmental Charges} shall constitute a current expense of the Participating Member during each fiscal year and. shall not constitute an indebtedness of the Participating Member within the meaning of Texas law. zf, for any fiscal year during the term of the Member. Ou.tpu.t Contract, a Participating Member does not appropriate available funds during such fiscal year to pay the Energy price component of the Member Output Contract required under the Member Output Contract due during the succeeding f scal year, and if such Participating Member provides Buyer with written notice of such failure to appropriate :fifteen (15} days prior to the expiration of the then current fiscal year, there shall be n.o obligation of such Participating Member to make energy price component payments and to .receive Energy under the Member Output Contract for such fiscal year. Except as set forth in ,Article 12, Seller shall not be required to pay any portion of the Capacity Prepayment for any non-appropriation. Any Participating Member may, for any other succeeding f seal year during the term of the Member Output Contract, elect to appropriate available funds of the Participating Member during such other fiscal year to pay the Energy price component of the Member Output Contract required under the Member Output Contract d.ue during such succeeding fiscal year and receive Energy under the Member Output Contract for such fiscal year. Notwithstanding the foregoing, Buyer remains obligated to receive and pay, as set forth herein, far the Products delivered hereunder. ARTICLE 12 .EARLY TERMINATION If a Default occurs with respect to a defaulting .Party at any time during the Term, the non-defaulting Party may (i} establish a date not less than ten (10} days after such notice is effective and no later than thirty (30) Days after such notice is effective, as an early termination date (the "Early Termination Date"} on which this Agreement shall terminate and. (ii) accelerate all amounts owing between the Parties and (iii.) suspend performance of any obligations and withhold any payments due in respect of this Agreement. If an Early Termination Date has been designated, the non-defaulting Party shall calculate in a commercially reasonable mariner the present value of its economic loss as set forth below, if any, to the non-defaulting Party related to the delivery or receipt of Contract Energy as set forth in this Article 12 fo:r th.e remaining Term of the Agreement. If Seller is non-defaulting Party, Buyer shall pay Seller a termination payment (the "Seller Termination Payment") equal to the sum of {i} any outstanding amounts owed by Buyer to Seller far Energy delivered (includi.ng charges under Article 20}, but unpaid; {ii} Seller's Lass (as defined below); and (iii) the present value of unpaid New Governmental Charges for Energy {discounted at the Discount Rate) that would have been delivered had this Agreement continued until the end. of the Term with no early termination, less (iv) any amounts paid by Buyer to Seller under Section 3.3 for the :immediately preceding three (3} year period prior to Refinancing or, 30 E~CU'~I~'IQN COPY following a Refinancing, for the immediately preceding five (5} year period. "If the Seller Termination Payment is less than the present value (discounted at the Discount Rate) of any not- yet-Earned Portions} of the Capacity Prepayment as set :~o~-th in. Exhibit " 3" as of the Early Term.i.nation Date, Seller shall return to Buyer the positive difference. If the present value (discounted at the Discount Rate) of any not-yet-Earned Portion(s) of the Capacity Prepayment as set forth in Exhibit " 3" as of the Early Termination Date is less than the Seller Termination Payment, Buyer shall pay Seller the difference. "Seller's Loss" shall equal the positive difference, if any, of {i} (a) the Early Termination Reference Replacement Price as specified within Exhibit " 2" times (b} the Yet-to-be-Delivered Quantity (MWh) as specified within Exhibit " 2" less (ii} the Energy revenue streams} related to a replacement sales agreement (the "Replacement Agreement") whether or not a Replacement Agreement is actually entered into by Seller. Seller's Loss shall be capped at $120,000,000 declining ratably throughout the Term. If Buyer is non defaulting Party, Seller shall pay Buyer a termination payment (the "Buyer Termination Payment"} equal to the sum of (i} the Seller's prorata share, in the event Buyer's Bonds exceed $465,000,000, of the remaining principal balance on the Bonds (Seller is only responsible for the principal amount remaining from the $465,400,000}; and {ii} the greater of (a} Buyer's Loss (as defined. below) and (b} the Make Whole Premium (as defined. below), less {iii) any amounts paid by Seller to Buyer under Section 3.4 for the immediately preceding three (3) year period prior to Refinancing or, following a Relxnancing, for the immediately preceding f ve {5} years. The Seller shall. pay Buyer the Buyer Termination Payment less any " unpaid amount outstanding for Energy delivered. {including charges under Article 20}. "Buyer's Loss" shall equal the positive difference, if any, of (i) (a} the costs} associated with replacing the Contract Energy through a Replacement Agreement whether or not Buyer actually enters into a Replacement Agreement less the {i} (a} the Early Termination Reference Replacement Price as specified within Exhibit "2" times (b) the Yet-to-be-Delivered Quantity (MWh) as specified within Exhibit "2". Buyer.'s Loss shall be capped at $120,000,000 declining ratably throughout the Term. Replacement Agreement revenue streams and costs shall be determined under then current market conditions with respect to an assumed .Replacement Agreement for amulti-unit- contingent energy agreement which shall have characteristics similar to this Agreement including all of its terms and conditions as determined by the non-defaulting Party in a commercially reasonable manner. Factors used in determining any revenue stream(s) or cost{s} under a Replacement Agreement may include, without limitation, a comparison of comparable transactions, third party quotations from leading dealers in Energy contracts, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs {e.g. NYMEX), the remaining Term of the Agreement, and current discount rates. As soon as practicable after the occurrence of an Early Termination Date, nati.ce shall be given by the n.o.n-defaulting Party to the defaulting Party of the amount of the Seller Termination Payment or Buyer Termination Payment, as applicable as set forth above. The notice shall include a written statement explaining in reasonable detail the calculation of such amount. The net amount of the Seller Termination Payment or Buyer Termination Payment, as appli.cab.le, shall be made by the defaulting Party within five (5} Business Days after such notice is effective. 31 EXECUTION COPY The "Make 'hole Premium" means the redemption premium calculated under the "make whole" redemption provision contained in the Buyer's Bonds, as described in Section 11.1(c} hereof, being that portion of the Redemption Price less the outstanding principal amount of the Bonds thereof, substantially similar to the following terms: `The Bonds shall be subject to redemption at the option of Buyer, in whole or in part, on any date from any legally available funds, at the Redemption Price equal to the greater of: (i} 100% of the principal amount of Seller's pro.rata share, in the event Buyer's Bonds exceed $465,000,000, of all outstanding Bonds to be redeemed (Seller is only responsible for the principal amount renr~aining associated with $465,000,000}; or (ii} the sum of the present values of the remaining scheduled. payments of principal (taking into account any mandatory sinking fund provisions associated with term bonds) and interest on all outstanding Bonds to be redeemed (exclusive of interest accrued to the date fixed for redemption) discounted to the date of redemption on a semiannual basis] (assuming a 3G0-day year consisting of twelve 30-day months} at the Discount Rate, plus accrued and unpaid. interest on the Bonds being redeemed to the date fixed for redemption. " For purposes of determining the Treasury Rate, the following definitions will apply: "Treasury Rate" means, with respect to any redemption date for a particular Bond, the rate per annum, expressed as a percentage of the principal amount equal to the [semiannual equivalent yield] to maturity or interpolated. maturity of the Comparable Treasury Issue, assuming that the Comparable Treasury is purchased on the redemption date for a price equal to the Comparable Treasury Price, as calculated by the Designated. Investment Banker. "Comparable Treasury Issue" means, with respect to any redemption date for a particular Bond, the United States Treasury security or securities selected by the Designated Investment Banker which has an actual or interpolated maturity comparable to the remaining average life of the applicable Bond to be redeemed, and that would. be utilized in accordance with customary financial practice in pricing new issues of debt securities of comparable maturity to the remaining average Fife of the Bond to be redeemed. "Compar~cble Treasury p"rice" means, with respect to any redemption date for a particular Bond, (1) if the Designated Investment Banker receives at least four Reference Treasury Dealer Quotations, the average of such quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2} if the Designated Investment Banker. obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such 32 Ex.~CV~TION COPY quotations. "Designated Investment .Banker" means one of the Reference Treasury Dealers appointed by Buyer. "Reference Treasury• Dealer" means the senior managing underwriter of the Bonds to be selected by Buyer with respect to the initial sale and delivery of the Bonds and its respective successors and three other Primary Treasury Dealers, as defined below, specified by Buyer from time to time, that are in the top five {as measured by the lower of such dealers S&P and Moody's credit ratings at the time of termination) primary U.S. Government securities dealers in the City of New York {each a "Primary Treasury Dealer"}; provided, however, that if any of them ceases to be a Primary Treasury Dealer, Buyer shall substitute another Primary Treasury Dealer. "Reference Treasury Dealer Quotations" .means, with respect to each Reference Treasury Dealer and any redemption date for a particular Bond, the average, as determined by the Designated Investment Banker, of the bid anti asked prices for the Comparable Treasury Issue {expressed in each case as a percentage of its principal amount) quoted in writing to the Designated Investment Banker by such Reference Treasury Dealer at 3:30 p.m., New York City time, on the third business day preceding such redemption date.' ARTICLE 13 INDEMNIFICATION; LIMITATION OF LIABII.~ITY 13.1 Buyer's Indemnification of Seller. To the extent permitted by the Constitution and laws oI` the State of Texas, and with fu.11 reservation of all defenses and immunities available under the Law, Buyer agrees to and. shall in.demrufy, defend, and hold harmless Seller, and all of their respective officers, directors, shareholders, employees, servants, and. agents, from and against all Indemnified Claims, including Indemnified Claims fox personal injury, death, or damages to property, occurring on Buyer's side of the Delivery Point or arising out of or related to the Products except fio the extent caused by the gross negligence or willful misconduct of Seller. 13.2 Seller's Indemnification of Buyer. Seiler agrees to and shall indemnify, defend, and hold harmless Buyer and its respective officers, officials, directors, employees, servants and agents from and against all Indemniled Claims, including Ind.ernnified Claims for personal injury, death, or damages to property occurring on Seller's side of the Delivery Point and at the Delivery Point, arising out of or related to the Facilities, the Products, or both except to the extent caused 6y the grass negligence or willful misconduct of Buyer; provided, however, Seller shall only be required to indemnify, defend, and hold harmless Buyer, its respective officers, officials, directors, employees, servants and agents to the same extent as Buyer would be allowed to indemnify, defend and hold harmless Seller and all of its respective officers, directors, shareholders, employees, servants and agents if Buyer were the indemnifying Party. 33 EXECUTION COPY x3.3 Indemnified Claims. "~ndemnifieri Claims", as used in Section 13.1 and Section 13.2, above, means all third party claims or actions, threatened or filed and, whether groundless, false, fraudulent or otherwise, that directly or indirectly relate to the subject matter of an indemnity during the Term, and the resulting losses, damages, expenses, attorneys' fees and court costs, whether incurred. by settlement or otherwise, and whether such claims or actions are threatened or filed prior to or alfier the termination of this Agreement. 13.4 Limitation of Remediest Liability and Damages. EXCEPT AS SET FORTH IN THIS AGREEMENT, THERE IS NO WARRANTY OF MERCHANTABTLITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ANY' AND ALL IMPLIED WAI~:RANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT TIDE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGE TS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDTES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED EXCEPT AS SET FORTH IN SECTION 10.2(c} AND SECTION 10.4{c} OF THIS AGREEMENT. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR'S LIABILITY SHALL BE LIMITED TO DTRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSTVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR - IN EQUITY ARE WATVED. UNLESS EXPRESSLY HEREIN PROVIDED, NEITHER PARTY SHALL BE LIABLE FOR CONSEQI.JENTTAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND TIDE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE IS SOLE, .TOINT OR CONCURRENT, OR ACTIVE OR PASSTVE. TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND THE DAMAGES CALCULATED HEREUNDER CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS. ARTTCLE 14 FORCE MAJEYJRE Force Majeure means an event or circumstance beyond the reasonable control of and without the fault or negligence of the Party claiming Force Majeure. It may include, without limitation, failure or interruption of the operation or maintenance of the Facility or the production, delivery ar acceptance hereunder due to an act of God; war (declared or undeclared}; sabotage; riot; insurrection; Clvil unrest or disturbance; military or guerilla action; banditry; terrorist activity or a threat of terrorist activity which, under the circumstances, would be 34 ExECUTION COPY considered a precursor to actual terrorist activity; economic sanction or embargo; civil strike, work stoppage, slow-down, or lock-out; explosions that are not the result of Seller failing to operate the Facility in accordance with Prudent Industry Practice; .fire that is not the result of equipment malfunction, boiler explosion, or malfunction of the control panel, and for which neither the manufacturer is liable nor the operator is responsible; earthquake; abnormal weather conditions that exceed weather criteria used in design of the Facility; hurricane; flood; wind at or exceeding those generated in Fl tornadoes as measured by the Fujita Scale of Tornadoes; the binding order of any Governmental Authority other than a Governmental Authority affiliated with the Party claiming Force Majeure (provided that such order has been resisted in good faith by all reasonable legal means); the failure to act on the part of any Governmental Authority other than a Governmental Authority affiliated with the Party claiming Force Majeure (provided that such action has been timely requested and diligently pursued); general market unavailability of equipment, products or critical supplies (inclu.ding, but not limited to an unavailability at a Facility of both coal and. lignite). Neither the lack of money nor changes in market conditions nor changes in the delivered fuel prices (including, without limitation, all transportation costs} to a Facility shall constitute an event of Force Majeure. Seller's obligation to fulfill the Preexisting Environrnen.tal. Commit~rnents to the Martin Lake Facility and Big Brown Facility shall not be deemed an event of Force Majeure. If either Party is rendered unable by Force Majeure to carry out, in whole or in part, its obligations under this Agreement and such Party gives notice and full details of the event to the _ other Party as soon as practicable after the occurrence of the event, then during the pendency of such Force Majeure but for no longer period, the obligations of the Party affected by the event (other than the obligation to make payments as required hereunder) shall be suspended to the extent required. The Party affected by the Force Majeure shall remedy the Force Majeure with all reasonable dispatch. Notwithstanding anything to the contrary herein, the Parties agree that the setl:lement of strikes, lockouts or other industrial disturbances shall be within the sole discretion of the Party experiencing such disturbance. A1tTICLE 15 R:EPR:ESENTATIONS, V~A-liRANTIES, OBLIGATIONS AND ACKNO'~LEDGMENTS 15.1. Representations and Warranties Made by Each Party. Each Party represents and warrants to the other Party that: (a} Sucli Party has the ,power and authority to execute, deliver and perform its obligations under this Agreement and the execution, delivery and performance of this Agreement has been duly authorized by such Party. (b) This Agreement constitutes a legal, valid and binding obligation of such Party, except as the enforceability of this Agreement may be limited by the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditor's rights generally and by general principles of equity which permit the exercise of judicial discretion. 35 EXECUTION COPY {c} Neither the execution or delivery of this Agreement results in any breach of o.r constitutes any default under any material agreement to which such Party is bound, including without limitation the Security Documents, or causes such Party to be in violation of any Law, regulation, administrative or judicial order or process or decision to which such Party is a party or by which it or its properties are bound or affected. {d) It is not Bankrupt and there are no proceedings pending or being contemplated by it or, to its knowledge, threatened against it which would result in it being or becoming Bankrupt. {e) It is duly organized and validly existing under the laws of the jurisdiction of its organization or incorporation and, if relevant under such laws, in good standing. (f} All governmental and other authorizations, approvals, consents, notices and filings that are required to have been obtained or submitted. by it with respect to this Agreement or other document relating hereto or thereto to which it is a party have been obtained or submitted and are in full force and effect and all conditions of any such authorizations, approvals, consents, notices and dings have been complied. with. {g) No Default with respect to it, or event which with notice and/or lapse of time would constitute such a Default, has occurred and is continuing and no such event or circumstance would occur as a result of its entering into or performing its obligations under this Agreement or other document relating hereto or thereto to which it is a party. (h) There is not pending or, to its knowledge, threatened against it or any of its Affiliates any action, suit or proceeding at law or in equity or before any court, tribunal, goverrunental body, agency or official or any arbitrator that is likely to al~ect the legality, validity or enforceability against it of this Agreement, or other document relating hereto or thereto to which it is a party or its ability to perform its obligations under the same. 15.2 Seller's Representations and. Warranties to Buyer. Seller additionally represents and warrants to Buyer that: {a) upon execution of the Accession Agreement, Buyer shall become a Secured Commodity Hedge Counterparty under the Security Documents, entitled to share in the First Lien, Collateral and Proceeds thereof as provided in the Security Documents to the extent of Buyer's Secured Obligations (as therein def.~ned}; and (b} it has determined in good faith that this Agreement has not been entered into for speculative purposes and is entered into in the ordinary course of business consistent with past and current practice. 15.3 Buyer's Representations and Warranties to Seller. Buyer additionally represents and wa~~ants to Seller that: 36 ~XECUTIUN COPY {a} Buyer is authorized by law to enter into this Agreement; (b} As of December 1, 2008, Buyer will have a fully executed Member Output Contract in place with each Participating Member for at least the length of the Term, that cumulatively provides for the purchase of the Contract Capacity by the Participating Members from Buyer; {c) Buyer shall use all reasonable efforts fio meet the deadlines set forth in Section 11.1 {a}, {b}, (c) and (d}; and {d} Buyer represents and warrants that it will have the following provisions in each of its Member Output Contracts: (i} A representation from the Participating Member that there are no circumstances presently affecting such Participating Member that could reasonably be expected to adversely affect the ability to budget funds for the payment of all sums due under the Member Output Contract; (ii} A provision. requiring the Participating Member to notify Buyer in writing of such non-appropriation at the earliest practicable time subsequent to the failure to appropriate; - _ (iii}To the extent permitted by the Constitution and laws of the State of Texas, a provision whereby the Participating Member agrees not to use its inherent powers as a Governmental Authority in any other manner to circumvent the tex-ms and provisions of the Member Output Contract or the terms of this Agreement; and (iv}To the extent permitted by the Constitution and the laws of the State of Texas, a provision granting to Buyer the right to enforce the Member Output Contract against the Participating Member. 15.4 Buyer and Seller Obligations. Each Party agrees to abide by all ERGOT Guides, and any rules and/or directives of ERGOT, the P~CJCT, the IMM, the TRE, the NERC, the FERC, as applicable, or any successor thereto that are applicable to it with respect to fulfilling its responsibilities under this Agreement. Each such Party shall reasonably cooperate with the other Party (upon reasonable notice anal at the other Party's cost} to the extent necessary for the other Party to timely comply with such requirements that are applicable to it. Additionally, Buyer hereby agrees to pursue all reasonable actions to ensure that Buyer fulfills the intent of the obligations necessary to make Seller whole for Energy provided under this Agreement. 15.5 Acknowledgements. The Parties hereby acknowledge and agree that this Agreement is a Covered Contract and shall be subject to all applicable provisions of the Code. 37 EXECUTION COPY 15.6 Seller Obligations. (a) Seller agrees that it will operate and n~.aintain its respective Facility(ies) throughout the Term in accordance with Prudent Industry Practice and required permits. (b} Each Seller agrees to design all future improvements with respect to such Seller's Facility(ies} in accordance with Prudent Industry Practice. ARTICLE 1G NOTICES Ali notices and. other communications required or permitted by this Agreement or by Law to be served upon or given to a Party by the other Party shall be deemed duly served. and. given when received after being delivered by hand, or courier service, or sent by conf rmed facsimile or certif ed mail, return receipt requested, postage prepaid, to the following address. To Buyer: Cities Aggregation Power Project, Inc. Lloyd Gosselink 816 Congress, Suite 1904 Austin, Texas 78701 Attention: Geoffrey M. Gay, General Counsel Telephone: 512-3 225 875 :facsimile: 512-472-0532 To Seller: To Big .Brawn: To Luminant Generation: To Oak Grove: in care of: Contract Administration s o a North Akara Dallas, TX 75201 Telephone: (214)875-9211 Facsimile: (214)875-9264 Notices shall, unless otherwise specified herein, be in writing and may be delivered by hand delivery, United States mail, overnight courier service or facsimi.Ie. Notice by facsimile or hand delivery shall be effective at the close of business on the Day actually received, i'f' received during business hours on a Business Day, and otherwise shall be effective at the close of business on the next Business Day. Notice by overnight United States mail or courier shall be 38 EXECUTIOI~T COPY effective on the next Business Day after it was sent. A Party may change its addresses by providing notice of same in accordance herewith. ARTICLE 17 CUNFIDENTYAL~C'I'Y 17.1 Confidentiallnformativn. For purposes of this Article 17, the term "Con~defrtial .~nformation" means any and all confidential, proprietary, or secret information (including, without limitation, forecasts, components, parts, drawings, sketches, flow charts, plans, reports, handbooks, documentation, programs, data, feedback, features, tecluaiques, processes, algorithms, inventions, financial information and analysis, marketing plans and studies, proposed and actual pricing information, and the identity of actual or potential customers) which is disclosed by one Party to the other Party. All Confidential Information of a Farty ("Disclosing Party") which is disclosed to or otherwise received or obtained. by the other Party ("Receiving Party") incident to this Agreement shall. be held, in confidence, and the Receiving Party shall not publish. or otherwise disclose any Confidential Information to any Person for any reason or purpose whatsoever, or use any Gonfidential Information for its own purposes or for the benefit of any Person, without the prior written approval of the Disclosing Party. Without limiting the generality of the fi'oregoing, each Party shall observe the same safeguards and precautions with regard to Confidential Information, _ which such Party observes with respect to its own information of the same or similar kind. If the Receiving Party or any of its Associated Parties are requested or required to disclose any Confidential Information pursuant to a subpoena, court order, civil investigative demand or similar judicial process or other oral or written request issued by a court of competent jurisdiction or by an international, national, state or local governmental or regulatory body, the Receiving Party will provide the Disclosing Party with prompt written notice of any such request or requirement so that the Disclosing Paz-ty or any of its Associated Parties may seek an appropriate protective order or other appropriate remedy or waive compliance with the provisions of this Agreement. If such order or other remedy is not obtained, or the Disclosing Party waives compliance with the provisions of this Section 17.1(b), the Receiving Party or its Associated Parties, as the case may be, will disclose only that portion of the Confidential Information which it is advised by counsel that it is legally required to so disclose and will exercise reasonable efforts to obtain reliable assurance that confidential treatment will be accorded the information so disclosed. 17.2 Associated Parties. Each Party agrees that it will make available Confidential Information received. from the other Party to its own. Associated. Parties only on a need~to-know basis, and that all Persons to whom such Confidential Information is made available will be made aware of the confidential nature of such Confidential Information, and will be required to agree to hold such Confidential Information in confidence under terms substantially identical to the teaYns hereof: Notwithstanding the foregoing, a Receiving Party may provide any Confidential. Information to any Governmental Authority having jurisdiction over or asserting a right to obtain such informatio~a, provided that (i) such Governmental Authority orders such Confidential Information be provided, and (ii) the Receiving Party promptly advises the Disclosing Party of any request for such information by such Governmental Authority and 39 EXECUTION CUPS' cooperates in giving the 1~3isclosing Party an opportunity to present objections, requests for limitation, andlor requests for confidentiality or other restrictions on disclosure or access, to such Governmental Authority. I7.3 Exceptions. (a} Seller may, without violating this Article 17, disclose matters that are made confidential by this Agreement: (i) to actual or prospective, Financing Parties, underwriters, contractors, suppliers, and others involved in construction, operation, and f nancing transactions and arrangements for Seller or its subsidiaries, Aff liates, or parent, if the disclosure is subject to a confidentiality agreement with the person, corporation, or other entity to whom the disclosure is being made; (Il} to government officials and parties involved in any proceeding in which Seller is seeking a permit, certificate, or other regulatory approval or order necessary or appropriate to carry out this Agreement, but Seller shall make reasonable efforts to restrict .pu.blic access to the information disclosed, by protective order or otherwise; to governmental officials or the public as required by any Law, regulation, or order, including without limitation laws or regulations requiring disclosure of financial _ inforlxzati.on, information material to financial matters, and. filing of financial reports, but Seller shall make reasonable efforts to restrict public access to the information disclosed, by protective order or otherwise; andlor (iii) in litigation to enforce this Agreement or pursue any remedies granted to or reserved by Seller under this Agreement. (b) Buyer may, without violating this Article l7, disclose matters that are made conf dential by this Agreement: (i) if required by Chapter SS2 Texas Government Code or as a matter of law to those persons who are entitled to view such information; (ii) to lenders, underwriters, accountants, auditors, bankers, and attorneys involved. in financing transactions and arrangements for Buyer, andlor for any city or municipality that is a member of Buyer, provided that the disclosure is subject to a confidentiality agreement with the Person to wham the disclosure is being made to th.e extent permitted by Law; (Ill) to government officials or the public as required by any law, regulation, o.r order, including without limitation laws or regulations requiring disclosure of financial information, information material to financial matters, and filing of financial reports (iv) between Buyer and its Participating Members; provided, however, such Participating Members are required to keep such information confidential to the extent pet7nitted by Law; and 40 EXECUTION COPY (v} in litigation to enforce this Agreement or to pursue any remedies granted to ox reserved by Buyer under this Agreement. 17.4 Remedies. ~n the event of a breach or threatened breach of the provisions of Section 17.I by any Receiving Party (unless excused under the provisions of Section 17.3}, the Disclosing Party shall be entitled to an injunction restraining such Party From such breach, Nothing contained. herein shall be construed as prohibiting the Disclosing Party from pursuing any other remedies available at law or equity for such breach or threatened breach. of this Agreement. 17.5 Exclusions. Confidential Information shall exclude information falling into any of the following categories: (a) Information that is or becomes generally available to the public other than as a result of a disclosure by either Party in violation of this Agreement; {b) Information that was already known by either Party on anon-confidential basis prior to this Agreement; (c) :[reformation that becomes available to either Party on anon-confidential basis from a source other than the other Party if such source was not known by the receiving Party to be subject to any prohibition against disclosing the information to such Party; or {d) Information a Party is required to disclose in connection with any administrative or regulatory approval or filing process in connection with the conduct of its business. ARTICLE 18 SELLER LIABILITY Big Brown shall be severally liable to Buyer for the Products to be delivered from the Big Brown Facility to Buyer at the Delivery Point(s), including delivery of title thereto free and clear of all liens, security interests, claims, encumbrances, and adverse interests therein or thereto. Luminant Generation shall be severally liable to Buyer for the Products to be delivered from the 1VXartin Lake Facility to Buyer at the Delivery Point(s), including delivery of title thereto free and clear of all liens, security interests, cI.aims, encumbrances, and adverse interests therein or thereto. Oalc Grove shall be severally liable to Buyer for the Products to be delivered from the Oak Grove Facility to Buyer at the Delivery Point{s}, including delivery of title thereto free and clear of all liens, security interests, claims, encumbrances, and adverse interests therein or thereto. ARTICLE 19 ASSIGNMENT Neither Party shall assign this Agreement or its rights hereunder without the prior written 41 EXECUTION COPY consent of the other Party, which consent shall not be unreasonably withheld or delayed; provided, however, either Party may, without the consent of the other Party, (i} transfer, sell, pledge, encumber or assign this Agreement or the accounts, revenues or proceeds hereof in connection with any financing or other financial arrangements, {ii) transfer or assign this Agreement to an Affiliate{s} of such Party which Affiliate's creditworthiness at the time of such assignment is equal to or higher than~that of such Party, or {iii) transfer or assign this Agreement to any Person or entity succeeding to all or substantially all of the assets of such transferring or assigning Party and such Person's creditworthiness at the ti:~ne of such assignment is equal to or higher than that of such Party; provided, however, that in each such case, any such. assignee shall agree in writing to be bound. by the terms and conditions hereof and so long as the transferring Party delivers such flax and enforceability assurance as the non-transferring Party may reasonably request. For assignments pursuant to {ii) and (iii) above, the assigning Party shall be relieved. from liability hereunder. Upon an assignment, the security as set forth in Article 9 shall be provided by Seller unless the Parties agree otherwise. ARTICLE 20 GOVERNMENTAL CI~ARGES 20.1 Governmental Charges. Except as otherwise provided in this Article 20, Seller shall pay or cause to be paid all Governmental Charges on or with respect to this Agreement arising prior to the Delivery Point and Buyer shall pay or cause to be paid. all Governmental Charges on or - with respect to the Product at and. from the Delivery Point (other than ad valorem, excise, franchise, margin, employment taxes, income taxes, or both which are related to the sale of the Product or ownership of the Facilities {except as set forth in Section 20.2 below), and are, therefore, the responsibility of the Seller}. In the event Seller is required by Law to remit or pay Governmental Charges which. are Buyer's responsibility hereunder, Buyer shall promptly reimburse Seller for such Governmental Charges. If Buyer is required by Law to remit or pay Governmental Charges which are Seller's responsibility hereunder, Buyer may deduct the amount of any such Governmental Charges from the sums du.e to Seller under this Agreement. Nothing shall obligate or cause a Party to pay or be liable to pay any Governmental Charges for which it is exempt under the Law. 20.2 New Governmental Charges. {a) General. If a New Governmental Charge is imposed upon or borne by the Facilities, excluding costs for Preexisting Environmental Commitments, Buyer's Prorata share of all such charges shall be paid by Buyer except as noted in Section 20.2(c}. The Parties agree that it is in Seller's sole discretion to choose how Seller complies with any New Governmental Charge. For the avoidance of doubt, New Governmental Charges shall include, without (imitation and in addition to any other New Governmental Charges, any costs associated with Carbon Remediation and. Buyer shall be responsible for its percentage share. (b} Buyer's Costs. If Buyer's Prorata share (at the time the New Governmental Charge is incurred with respect to the affected Facility) of any such New Governmental Charge incurred after October 10, 2007 is greater than the Materiality Threshold, Buyer shall be responsible for such Prorata share of such New Governmental Charge (as calculated in Section 20.2{d)) and such responsibility shall continue until. the earlier of (i) the date such New 42 EXECUTION COPY Governmental Charge is no longer applicable, (ii} the date that capital or operating costs related to its remediation are no longer incurred. by Seller, {iii} the Early Termination Date designated by Buyer under this Agreement due to a Seller Default, or (iv) the end of the Term (c} Seller's Costs. In the event Seller incurs any Governmental Charges due to Seller's non-compliance with environmental• Taws existing (and as written} as of the Effective Date, Seller shall be responsible for such charges. Buyer is not required to pay, nor shall it be charged for any share of the charges, costs, or expenses for the Preexisting Environmental Commitments for the Facilities. The Preexisting Environmental Commitments for N4x and S02 shall each be met by Seller or its Aff liates, as applicable, on the date in which the NOx or SC)2 emission level has been posted on th.e Environmental Protection. Agency's Clean Air Markets Division CEMS data WebSite at http: //camddataandmaps .epa . gov/gdm/index. cfm and such posted. level is 20% below the 2Q05 N4x or S02 emission level, as applicable, posted on such website. The Preexisting Environmental Commitments far mercury shall be met by Seller or its Affiliates, as applicable, on the date in which the mercury emission level has been pasted on the Environmental Protection Agency's TRI Explorer website at http: //www. epa .~ov/triexp~.orer/ and such posted level is 20% below the 2005 mercury emission level posted. on such website. (d) Calculation of New Governmental Charge. Any New Governmental Charge that Buyer is responsible for shall be offset by the value of Buyer's Prorata share of any Environmental Entitlements after the Effective Date with Buyer being responsible for a proportional net di#ference, if any. To the extent that the New Governmental Charges are capitalized by Seller over the lessor of (i} the reasonably estimated useful and economic Life of the Facilities or (ii} the reasonably estimated useful and economic life of the improvements made as a result of the New Governmental Charges, then Buyer's Prorata share of the New Governmental Charges for any calendar year while this Agreement is in effect shall be based on Buyer's Proxata share of the straight-lined amortized cost for such year as so capitalized at the Capitalization Rate. Furthermore, (i} if controls or equipment are added to another facility located in Texas in order to comply with a New Governmental Charge and such controls or equipment benefit o.ne or more of the Facilities with respect to compliance with a New Governmental Charge, Buyer shall be responsible for its percentage of the portion. of the controls or equipment that are beneficial to the Facility(ies} and (ii} if controls or equipment are added to one of the Facilites in order to comply with a New Governmental Charge and such controls or equipment benefit other facilities with respect to compliance with a New Governmental Charge, Buyer shall only be responsible for its percentage of the portion of the controls or equipment that are beneficial to the Faeility(ies} . ARTICLE 21 I1~ISCELLAI~IEOITS 21.1 Applicable Law. This Agreement is governed by and. shall be construed under the Laws of the State of Texas excluding any conflict of laws rules. The Parties submit to the exclusive jurisdiction of the state and federal courts in Dallas County, Texas in connection with any litigation arising hereunder. 43 EX~CUT1t~N CUPY' 21.2 Adequate Assurance. Article 9 of this Agreement sets forth the entirety of the agreement between the Parties regarding credit, collateral and. adequate assurances. Except as expressly set forth in this Agreement, neither Party {a) has or will have any obligation to post margin, provide letters of credit, pay deposits, make any other prepayments or provide any other financial assurances, in any form whatsoever, or (b} will have reasonable grounds for insecurity with respect to the creditworthiness of a Party that is complying with the relevant provisions of this Agreement {c) and all implied rights relating to financial assurances arising from Section 2-609 of the Uniform Commercial Code or case law applying similar doctrines, are hereby waived. 21.3 Counterpa~~ts. This Agreement may be executed in more than one counterpart, each of which shall be deemed to be an original, but all of which together shall constitute one and the same document. 21.4 Waiver. No waiver of any breach of the terms of this Agreement shall be effective unless such waiver is in writing and signed by the Party against whom such waiver is claimed. No waiver of any breach shall be deemed. to be a waiver of any subsequent breach. 21.5 Evergreen Provision The Parties agree that if there is a significant material change in the market structure from the paradigm in effect, or as forecasted, on the Effective Date, the Parties agree that they will negotiate in good. faith to amend. this Agreement to take such new market structure into account to address operational differences {including scheduling, dispatch instructions and instructed backdowns, deliveries of Alternate Energy} between the market structure in effect just prior to the material change in market structure and the new market structure. 21.6 ModiFcation. This Agreement, including an.y exhibits attached hereto, may only be modified by written agreement duly executed by each Party. 21.7 Severability. If any provision of` this Agreement shall be determined to be unenforceable, void or otherwise contrary to Law, such condition shall in no manner operate to render any other provision of this Agreement unenforceable, void or contrary to Law, and this Agreement shall continue in force in accordance with the remaining terms and provisions hereof, unless such condition invalidates the .purpose or intent of this Agreement. In the event that any of the provisions, or portions or applications thereof., of this Agreement are held unenforceable or invalid by any court of competent jurisdiction, Buyer and Seller shall negotiate in good faith to attempt to implement an equitable adjustment in the provisions of this Agreement with a view toward effecting the .purposes of this Agreement by replacing the provision that is unenforceable, void, or contrary to Law with a valid provision the economic effect of which comes as close as possible to that of the provision that has been found to be unenforceable, void, or contrary to Law. 44 E~CUTIUN COPY 21.8 Incorporation of Exhibits by Reference. A11 exhibits recited to be attached to this Agreement are incorporated. by reference into this Agreement. 21.9 Entirety__ It is the intention of the Parties that this Agreement shall contain all terms, conditions, and protections in any way related to, or arising ou.t of, the sale and purchase of the Products as contemplated herein, •and supersedes all prior agreements regarding the subject matter hereof, whether written ox oral. 21.10 Captions, Titles and Headings. Captions, titles and headings used in this Agreement are for ease of reference only and do not constitute a part of this Agreement. 21.11 Attorneys' Fees. Pursuant to Section 271.150 of the Code, in any litigation to enforce the terms of the Agreement, the prevailing pa~~ty is entitled to recover its reasonable and necessary attorneys' fees from the non-prevailing party. 21.12 Forward Contract. The Parties acknowledge and agree that this Agreement constitutes a "forward contract" within the meaning of the United States Bankruptcy Code. 21.13 Further Assurances. Each Party shall, from time to time, upon the written request of any other Party, execute and. deliver such further instruments and documents as shall be necessary to perform its obligations hereunder. 'Without limiting the foregoing, Buyer agrees to cooperate in _ good faith in executing and delivering such further instruments and documents necessary in connection with the substitution of collateral and/or release of discharged collateral pursuant to Section 9.2 of this Agreement. 21.X4 Survival. The confidentiality and audit provisions, indemnities, releases from liability, and limitations on liability or damages expressed in this Agreement shall, unless otherwise provided herein, survive without limitation the termination, cancellation or expiration of this Agreement, and shall apply whether in contract, equity, or at law. Notwithstanding the foregoing, the statute of limitations for bringing any action with respect to this Agreement or either Party's performance hereunder zs not extended by the provisions of this Section 21.14. 21.15 Amendment. This Agreement contains the entire agreement between the Parties with respect to the matters herein and cannot be amended except by mutual written agreement. Guarantor, by execution of this Agreement acknowledges and agrees that it shall be bound by any and all amendments of this Agreement that are executed by Seller and Buyer, with or without notice to Guarantor, and such amendments shall not be construed in any way to diminish or to terminate its agreements with Seller under the Guaranty. 21.1b No Third. Party Benef ciaries. This Agreement is intended. only for the Parties' benefit. Notlung in this Agreement may be construed to create any duty to, any standard of care concerning, or any liability to, any Person not a Party to this Agreement. Except as specifically provided herein, no Person shall have any rights or interest, direct or indirect, in this Agreement or the services to be provided hereunder, or both, except $uyer and Seller. 45 C~ECUTIQN C[DP1r iI~I ~iTITNESS WHEREUF, ktye Parties have caused t1~is A~reenlent #o be txecutcd in (heir respective names by their duly authorixed officers. c~T~l~s AG~RECAT~oIv PaVt~ER PRUJECT, XN~. Dat`~~ Name Printed: 'l'itle_ C1~~;,~ SIG BRU'~N PO'~U'~+~i CalV7[PAl,IY ]LLC ~~ ~ ~j ~ By: ~~ Date Name Printed: -~i ~=!'°~~~ ~''~~`'~,~~ ~ Title: -s~~L ~~~ ~ ~~"'~ ~.~ ~~.,-!' ~" LU11'I~l~1ANT GENFR~-TI(]N Calirl[PANY LLC Dat Name Printed: -~7c~~r~r=-.~ ~~L=~J s ~ ~.. 'Title. •~~ ~~t ~r ,~.~'G`-~"r/.~~-~,r ~ - . OAI~ GRAVE 1t~ANACEl1-XEI~JT C~MPAIt(~ LLC Rafe Name Printed: ~ ~ ~~,~~~r,~ .,~1~i``~`,,-~ ~ T ~. Title: ~r~' ~~ ~ ~~'.~''~-~ t.~zs~ ~ .~-- 4Ei ~x.~cuTYON coa~~ .EXHIBIT {9j .................._..._..--------._.........__ --- -.i MGNTHLY ENERGY PRICE{Sj AND EXPECTED MGNTHLY QUANTITY{Sj _ ____ , . ,•. ~ ....... 1 ---- MONTHLY E1~ECTED MONTHLY D(PECTED MON7FiLY IXPECTED MONTHLY EXPEGTED ENERGY MONTHLY ENERGY MONTHLY 1 EiHERGY MONTHLY ENERGY MONTF~Y DELIVERY PRICE QUANTITY' DELVERY PRICE QUANTITY' OELNERY PRICE QUANTITY' OELNERY PRICE QIiANTCTY' MONTH (NMWh)^ (MWh) ----MONTH (SlMWh)" ~ij_„-- . .. MONTFt (SIMWh~" (MWh) MONTH (SJM1Nh)^ (h1Wh~ January-09 521.20 100,440 January-15 325.31 100,440 January21 530.23 100,440 ~ January-27 535.173 ~ 100,440 Fabrvary.09 521.20 90,720 February'15.... ....525._31.._.. ... _._•`_~?~~ ~ - FebruarY-Z1 . f3D.23 .. _-90,720 - _FabnlarY-27-- - - 536,09 i•~•90,7~0 _._ ___-. _ ---- -- March•09 -- - __-- ~ - 521,20 _-. _ _-- 100,440 ... March•15 525 31 100,440 March-21 530.23 100,440 March•27 536.09 ; 100,440 _-_ 97,200 52120 April_04 ... • _ . April•15.....:.... ..... 325.31...... ..........97,200....... .._. Aprii-21.......... .. 130.23 ... . .......... ... ~7~__.. ._~,..AP_riE27 _„-.. _.., , 536_09_ __ .._ i 97 z(1D .... . t _• May-09 _ .... ---.._ _..... 521.20 100,440.... .. ... .. _ .......... ...:.... May~fS-_-- --525.31••_;__100,440-- _- MaY_21 530..23 _•..-. 100 440 -._~ _ May27 _ 536:09 _._.._.____ i 100,440 _._.-.._....._.._1 -_ - June-09 ------ 521.20 ....... . - _ 97,200 .lune•15 525.31 i 97,200 June-21 530.23 97,200 .June-27 536.09 i 97,200 Ju1Y'>~ 521.20 1D0.,440 _ _,Jul7_1~___._- ._-525.31_- -' 900440 ____July:21.....,_._._L _S_30_23-- -_-900,440__ JJuly27 _` _ -••„5311.09 _ ! _100440-i ....._...._.. August-09 ..... _.. S2f.20 .. ._ 100,440 . August-15 325 31 100,440 ~ Auyust~21,• _ , ~ 530.23 _.-- 100.440 _ - __,Augusi-27 __ - __136.09 ~~ 100 440 . . _- ---. Septem6er•09 , - _ 331.20 ... 97,20f1 ____ _ .September-1.5. •__ __ ......525:31. . _ - ......97,200..... ...... Saptemisar2l 130.23__... ... 97,200-_- _,Saptember•27 _ 536.09 1 972(X1 .. Oclober09 .. - .. 521.20 ....... 700,440 October•t5 S?5_91 . _ I00,44D., . Ottobor2l 530?3 100,440 October-27 536.09 100,440 I -.___- November-09 _- , •, S2i,20 _7 97,200 ___ __- November-15 ~ - 52591 . _ 97,200 , November_Zt -_ _530.?3_- _ 97,200 --.November-27 53609 9200 December-09 521.20 100,440 December•15 525.31 100,44D „Docember-21 .530,23. 100,440 Oeaembar-27 336.09. _ 9004440 January~l0 ; 321.84 100,440 January-96 - [ - _ S26.U7_ ... _ _• 100,440 January-22 531.13 ..100,440 - __ Jenuary_28_-_ _ 537.17. 1 W~440 __I ' ' ____ Febru~•1D _--_- __. 521.84 _ _ __- 9072(1 ~ _ -_- -, February16 .52607 •.,..93,960 _• __ ,February-22 _ . ._331.13.. ,-.90,720,_„_ _,-February^28,7, _ 537.17 .-..~.-. 93,9 0 0 _,_.....~.......... _ -k T.~.. March•1D ..-._.. -~ . _... 521_94 r .-...... .... 100,440 . _ , March-16 _ 326:07. - _, ._ 100.440__.._. ____ March-22_ ___ _ _531.13.__ _- 100,440 March-28 -537.17 100,440 _i - Apnl-10 521.84 97.200 . _. • ,-_...- Apnl 16 _•_ . ._,• 326:07 .. ... 97,70(1-- -_ Apnl-?2 ___-_ -- 331.13. .97.200 Apnl-2$ 337.17 97.2m Mayi0 521.734 100,440 ... May_16-__ __-- --- 526.07- _- __ _-_100,440___- ..May-22 531,13 100,440 .....May-28 - 537:17.. .; 100,440 June-10 521.84 . .. 97 ___ June-16 526.07 97 June•22 531,13_-_-_ 97,200-__ _-_--June-28, 537.17 I ,,.97 .....................:. July-1D 521.84 100,440 Jufy-16 526 07 100,440 Juty-22 S3i.13 100,440 Juty-Z8 537.17 r 100,440 August_10-__ _ 521.84 100440 August-lfi . ...,.526:07•_.. ..._„100,440 _.-Auqust•22 _ 331.13 900.440 , Arrguat•28 _ 2 - 537,97 17 37 ~ 100,440- 7 20E1 Septembar_10 321:84 97200 1 ;September••16 .....,.328;07 _., .,.__97.,200.-_ 5e i~emher-22y_ 531.13 _ 97 2D0 __ __~September- 8 ___ , ___--9 . _ 5 October-10 _ _- __ 521.84 _ -•_. 100,440 i October-16 526.07• .. ...100,440 _ October-22 131.13 .100,440_-__ October•28-_-._- _-537.17_- __100,440 November-10 521.84 97 200 November•16 . 526.07 97,200 November•?Z 531.13 97,20() November-28 S37.97 97 200 Oecember•10 521.84 ____ 100.440 _ -_____ December-16 526.07 I 100,440 Oecember-7.2 331-13 100,440 Docember-Z8 S37.i7 , 100,440 January_11 522.49 100,440 ,~_.Jararary17 . S2b.86 .• •......,,.1.00.4440_•._ ____ January-23 _~ - 532.07 _ 10D,d40 January~29 , _ -.._538^29 ! 100,440 _____- February-11__--- - ------ _ ___ _-•- 522.49- - - ___ _ - - 90.720-- {--_ February-l7 _._3'2!;:06...... 6 ....._-,,.90,720 - ____ Februar •23 _~ 332.07 D7 ~ 32 90.720 4 0 ~ 100 Februa7-~_._. _-530.29 538 29 Merch•29 i 90 74_7A- 440 100 March-91 522.49 900,440 i March•17 526.8 , , 1004440 •••, . -- March•23 . .. , . S 4 _ -. . ,, _..__ . __,-__ - . __ , , _. . April-l1 522:49 9700 Apri4.17 ------ E . -----X6:86---.--57'200--- --Agri{-23 ~_..__..S32,U7 _. 97,20Q _-A nP b?9 -- 539.29 I 97,200.- ............... May11 ..... ... 322.49 . . 100,440 . ~ May-17 526.86 3 100,440 May-23 332A7 100,440 May-29 538.23 ~ 100,440 June~11 322,49 97~ June•17 j 526.86_ 97~D0 -June-23 532.07 --- ---_97,300--- ---Juno-29 _538.29 ;•-J~1,200.,- • :.........:. Ju1y.11 ..... ..,_„ 522.45 -_ ^•, 100,440 f July-17 126.66 1 100,440 ____-July 23 . - _ •, 532.07-___• __._100,x40•- -_ July-29 538:23 - ~ 100,,440 Augusi~ll _.-_ 522.49 - 100,440 August-17 _ ,336.86 _, _ . •_1110-,440. -• ,August-23.-_-_ _ • 533,117_-,__ _ .,100,440 ... Avgust•29 . . _,.338.23_,... . _.100,440 .. Sepiember•11 ~ .. __S22_A9_ _ . _97,2()0 _ ~ _ -September-17 ____$2686,._ ..,-..,97,,200...,.. • _,_5eptember•23 532:07 97200 ~.Seplamber-29 _•.338.23 _• 97,20D. -, . October-11 _ 52.49 _-_ - • 100,440 _._- October-17 526.86 100,440 October-23 532,07 100,440 October•29 (38.24 ~ 100,440 November•11 522.49 97 ~ November•tl .. 326.136, .. . . ........ _ _. __ 9?.4200...•_ . ^_ Nav_ember•23-- -• --- 531:07.-- __.97,27)E1. _ .:: tJorembeF29 . __ 338,29_„_ -? 97 200 r--- ' - December-11 322.49 .- 100,d4p ...... _ _.......... _... _........... December•97 . . . _ 326,86 100,440 December-23 532,07 100,440 December-29 538.29 i 100,44D January~t2 523.17 10D,440 ~ . . JanuarY'1t3 -._ . ._ S27.S6 t00,440 ____ January_Z4_ __ ... .....633.03...... 100 440 January_30 __ . .~ 539.44 . - _ 100 440 ! .: February _12 523.17 . .... 93 960 _. Febmary-l8- _ 527 t~ - 90~720_I t February-24_•_ _ --- ... _ __• 533;03-_ ____ 93,960 ___ __-Feb%ar7-30__ _-539.44 - ~ 90,77A -_-, Marclrl2 _ 523.17 - _ _ 10D,440 - March•18 3'2]'.66 100,440 i March-2A ._....._...._..._ .w .__ 333.Q3 .-_.- -100,4IIp Mazch-3D --------- 539.44 ------ 100,410 . April.l2 523.17 97,200 _ April•t0 .- 527.6& . 97200.. Apr%I-24. _ 333.03-----_ .._ ..97,200---- --- Apri!•30 -- -.-- -- 539;44.... ' 97,2W . _ ..... May_12 . . 523.17 .. . 100,440 J May-18 527.66.... .......100,440.,... _ -_ May _24 -- -- 533.03 ~ 100,4411 •_,-•, MaY30.,_„-,_ ____539,,;,44.~j~ 100,440 - __- •_-- June-1Z _ 523.17 97 . ~ ~ ~June•98 527.66 97 June-24 133.03 97,200 June•30 539.44 i 97 200 Juy_12 . 523.17 100,440 J~_18_-_- -1001440 ; S27:fiS _ July_24 _- , -333,03...... 9.00,440 July-30.,....-_ 539,44 100,440 . . _ , August-12 523.17 100,440 August•18 _ . 527_t~ : --t--100,44D _ _ August•24 J 333.03. _ _ 1W,440 ..August-30 _ 539,44__ 1,_-900,440 _ . _ September l2 . - - 523.17 _ 97,2D0 - ;September-t0 _ 327.66 _- __-__.974200 -__ • September-24 333.113-_._ _.- 9700_____ -____September-_30 _-S39,d4_ _ 97,200 -_- . October•92 i~3.1T 100,440 ,October-18 527:65 , _ _ 100,440,-• _ _ October-24 _ _ 333.43 '!!)0,440 Q~tober•30 639.!14 100,440 Navembar-12 ___ 623,t7 _- _ _._ 97,200 __ _ _ --- November-t8 _- 5270 _ 97,200 Novamher.24 ;33:03 97,ZD0 Novombsr-30 539.44 i 97200 E December•12• ,, ..,.523._57. ,- 100,440-_ _-_:pecember-l8_ -_527.66- _-_ _ 100,440-i - Decemberr-24 _ -_333:03 _ _,.•.100,440__.__ 1 0 4 0 _ _,Qecember-30 J 3 _••,539•TM44 4 2 ? 100 440 1 A40 0 January-l3 523,88 100,440 January-l9___ - -___529.49_-_ _ -_ tOQ 440 -t ___ January-25__- _ 534:02 0 , 4 anuary~ 1 M 0.6 0 , _ 5 • , FebruarY-13 • • _ 323.86 90,720 --February-l9-- - ----528.49-•---- 90.,72[1.---- -Feb~uary'26 534.D2 9D,720 ....February-31.. 540.62 I . 90,72D ... _ ..... March-13 _-- .. 523,66 -•-• -•.__- 100,440 - - March-l9 528.49 100,440 - „~ March-?5 _•,. _ •., _,.534.02____ .___100,440__ _ Mlarclr•31_-_ - 540_62 j 100,440 _ April-13 523.06 97200 _ April-19 528.49 97,200 April-25 334.02 97,200 April-31 540.62 j 97,200 May~13 ... 523.$6 100,440 .,. , , , ,-,,May-19 _••,~ 328.49 100 440 1.25 534.02 100_„440__ ____:_M~•31~~ 54062 1 100,440 . , _ ,_ - June-13 •. ,. __•_ 529.06 . .•..,., , 97,200 June-19 528.49 97,200 I :lune•25 S3d.02 97,200 Jwse•31 540:62 97,200 ...:.. July-13 ..•-_ _- ..,___ - .. 523.66 100,44D July-99 528.49 100,440 Jury-25 534.02 100,44D • ~ ~ Jute-39 _ __ 540.62___ _. -___100 440 -- Augus1~13 523.86 100,440 August-l9 . 528.49 . 100 440 .......~........... August-Z5 - .- T 594,02 100,440 August•31 540.62 100,440 _ September-13 529.86 .. .. _ 91,200 ..... . September-14 ..... 528.49 97,200 Seplember•25 534.02 97,200 Sepivmber•31 540.62 ( 97,200 October 13 673;86 100 440 October-19 528.A9 _ 100,440 October•25 , S34.OZ , _-. , 1,W 440 October-31. S4D.62 I• 1D0 440 -_-_,_ November-13 ___ ._-_ iz3.8ti _ --_ _ 97200 November-19 52849 -__37,2D0 Novernber•25 334.02 _97,200 _ November•31 ^' 540.62 97,20(} Oecember-13 523.86 100,440 December~l9, .528.49 , . , f .. ,.,1004440_.,.., ._, Qecember_25 _ _ ,_534.02,Y _ Y100,4k0~ Docember-31 _ TSAE1T62 100,440 -•_ Januarytd . 4,58 32 _ ,••_• 1fJ0,440 . _ _ ,lanuary-2(1___ __ _ _, 529 35•~ 100.4440 _- _ January-26 - 135_04 _- -100,440- _ Janua~•32 541 D4 1D0 A40 . . _ February14 _ _ -._ . 524.56 90,720 February20 329.35 93,960 ~ February-26 535.04 90,720 February-32 541.@4 43,960 March~l4 524.58 100,440 .March-24 _529,35 _ •__ __ 100,440__F _- March-26_-__ - S35_04~, ~ 100,440 _,___March•32 •~ 541.84 i_ _ 100,440 _ _, --...., April-l4 : _ _. . 534.58- . _ - .._..97,200.. _ _...____ _ -___ A~rril-ZO _ --• _ 329_35 _. ..._--97'200_.. _~ Apri1-26 ---- - --535.04..-_ _.. 97~.... _. ..._.__aprii-32 -_. , _S41.84 • _ 97,200 _ ...... Mai-f 4 ... 524.58 100,440 _ -May_20-. ---- --- 529.35_ -- -_100,440_ _ MaYr26 535 04 10D,440 - ..MaY•32. 541 $4 100,440 -... ----.. June•14 _- .- 124-58 _ _ 97,200 June-20 329.35 97200 June-2& . S35.Od_ _ • ,._.__97,200 _•.~June-32______ ____541 $4^~ ~__97~D0~ ) July_74 524.58 100 440 JuEy 20-- 529.35 100,440 July_26- 335.04 100,440 July-32 _._,141.84 100,440 ! ____-_ August-14 524.58 100,440 _ .August-20 329.35. • 100,440.. August-26 . ..535:O~f_•___ •__100,440___ August_32 __-_- - _ 541.$!1_-• _ _ 100,440 ~ Septembei-94 • ___ _524.513 ___97,200 __ _ _:Seplembet•20 529,35 _ 97200..__, - _ September-26 b S35.D4 04 35 97200 440 100 Se~ember-32 t h 32 O 541.84 84 341 97,200 I 440 100 4 Oclober•1 5?4,58 100,440 ......,October-20 . 52935,.,. ..... ,. ,,,_,100 44D, ,( er-26 . _ _- Octo : _5 ..,.. , _._... _.. ..._._ o er• c .T._ ................ ....._. . ._.._ ......,... , ....._...._.. ._, _ . November-l4 -- ..... 524 38 .... .... 9700 Novombar-20 32335 97200_? _ Nwernber-Z6_ 535 Od __ _-97200___ -NoYember_32 S41.D4 9721X1 _ - ~ .-, -. , _, „ December-14 524.58 100,440 December-20 - 529.35 100,440 t ~ December-26 535 04 _ _ , _ 100 440 ~Oecember-32 149,$4 100,440 _, 'guanlilies (MV Yh) to be delivered / r +cetved foreca st to decline on a ratable bz9is acros s all days wit hin Qach respec Month DQlivery tive __ i ~r ~~_ ! 1 _ , ~ 1 - I ------- ------ ---- ----------- --------------- -------___ _--"net of Now Gwornmental Charges, if anY ...-.-. ..-._ ~ 47 EXEGUTIaN CQPY . EXHIBIT {Z) .. ......................._.. MONTHLY ENERGY PRICE(S) AND EXPECTED MONTHLY QUANTITY(S) EXPECTED .-- - EXPECTED EXPECTED Dd'ECTEO MDNTHLY MONTFg.Y MONTHLY MONTHLY MONThSLY MONTHLY MONTHLY 1v10NTHLY DELNERY ;ENERGY PRICE OllAt+1T1TY' DEWERY ;ENERGY PRICE QUANTITY' DELIVERY ENERGY PRICE gUANT1TY• DEI.NERY ENERGY PRICE OUANTTTY' MONTH (SlMWtr-" (MVVhL MOhtTkt {S/h11Nh}" (MWh) MONTH ! (f1MWh}+ (MWhI I MONTH (f1MWhY' (MVVh) January09 ~ • 521.20 100,440 'January•15 525.31 100,440 ~ JanuerY•21 -530.23-- -- - 10D,440 January-277 S36.D9 10D,140 Februaryi3.9 ? 521.20 90720 FabNary-15 ! 525.31 90.720 1 'sFebruary•2 530.23 90.720 44 Febnury-2 hl h 2T 536.D9 53 09 90,720 440 100 March•09 ~ f21_20 100,440 'Much•15 i Y15.3S 100,440 ~March•~_1_.......,_. 590.28.~._ 0.._-- ...__t00, atc - __-- --_~ 6: ..._. _- - .T , . _ . _.... __-• _-- FD9 ; :21_20 ~± ..,... 97 ~ n1-15 . . ...;._... : . AE ...525,31...._.. -- 97200 - __. ... t___tApriE2t _.. _ _ - _.- ._. 530.23 ... ... 97200 ...... __. riF27__ --lam 536.09 97,200 _ ._ May •D9~ -_- __-_ fQ0,d4D fS21,20 . . . _... ........ . May15 __-,--- - -525.31 100,440 rMa -21 . _.i ,....Y - S30.23 -- -- 101]4411 - - _-_ IMa •27 .~... _...- _.._Y ... ___ 536.09 _ ' .- 100440 ~ _ . June-09 ___ i21 2Q __..._ ,_ 97~U0 _ .--- ;June-15 : !; 5~:3t _._97,~._.,.._ 't~June-21 ! ~ _530.23 _ ~ 97 _ ^ ~ June•27_~ --536_09 _... ~ _._ . _ ---- ----- ---- July-09 521.20 . _ . --.. 100,4ap _ .. -'Juty15 _ _', -_ _.:25.3{ _ __ 100,440 ;July-21 :30.23 100,440 Julr•27 536.09 ... . 1W~440__-- August-09 .. . .... :21..20 ..100,440... ;August-15 ..._-- --.525.31.. _. 3 ... 100x440... 97 200 fAUgust•21 ~ .. t b 21 i 5 .530.23 23 f30 100,440 --- 97 200 -- August•7r _. tamhor-27 Sa . ----536:09 :36 09 100,440..... 9700 Septembor•09 October•09 521.20 521.2(1 9744 100.440 i~ptember•15~ ;October-15 525. 5 525.31 , 100,440 er- em ap ` October•21 y . 530.23 , 100,440 p Octaber•77 . 536.09 100,440 Novemba-•09 :21.20 Decemtrer•09 ~ 521.20 97,200 440 1D0 .!Novamber•SS .. lDer:embervlS ....325.31 325.31 97200- 10D,440 i___ Navember_2i ,December-21 r -S30.Z3 _. , 530.23 .1,,,_97200 November-27 ;__ 100,A40 •_ _~rDerxmberr27 • •• _536.09 536.03 µ • •~ •~~ ~ 97200 100,440_ __ • ~ Janua 10_-__ ~__ -----rye ~ . , 321.84 100,940 - ~ --------- -----------. - _...._ _ __ ____-_ ~ ~Janua 1S__-; _• f2S-07 ..... ... rye. ._.__...--•---- _ _ . V 10D,44i1 --`- ~-~,lanuar ~•22 M r-~331.13 - ~'_-_._...... ................ t3 22 } ! e ~ 100,440 _ _ .... _911 72(1 __ ,farina -28 -!T!---- Februa -26 537,17 --------- 17 537 100,440 93 Februa~•10 ~ - 321,84_ _-90,720 Febtuary~l6_-._ ,.,. S26.D7 93,980..._ bruary• •_~__ F ~ , .__ . _____~. ••_S3 ry ,. . 3 0 March-10 52184 100,A40 ;MarcM16 ~ ; 526_07---- --_-10x,440- i_-MprCh-Z2 ~: _ 531,13 100440 - lArlareSr2B-_ T,17 ._ ._ S _.__ X00,< - ...... ApriF•10 . .... 521.84 • ....... -, ......97,200 --- -•- _._ Apri!•f6 - 176.07. .97,200... , 1• _ - AprihZ2 _... :.. • ..531.13 ' { 9T~200 iApri•28 M 137,17.. 7 1 97,200.. 4 100 0 May~10......_._., 521..84, 100,14D MaY_}~_.:...... I_.. ..S28.D7. _..__ ....._10D.!i4Q._.... May-2?....... ........ .>..... ~1.13....._. .....3 ~._...~~,44Q__-. 200 ?]r~~.........._. ._....! 2ti J . 7...... ...__._.. 17 537 4 , _ 97 ZOD June•10 3218b 97,2017 June•16 526.07 97,200 ;June•22 331.13 j 97 uno- . , Juiy10 5~1.8d 1OQ440 i ~Juy16 ; 526.07 ._ 100.440 ._-.-. _____ . . July22,_____.{..... ... ..33L13 .. .. -- ` "' 1 _.. 100,440_ __ . July28_,.•_, •• _-•., 537.17 -~- • 100,,440 ' ..._..._. _ August•1D _ _._.. - 521 84 _. 100.440. ^_ - ; ---fwgust•16_ -•-!---- - ~_ -S~=D7------ . _ - 100,440 - ~ - --iAugu,,122 _ ; . ..531:13 ; 100,440 ;Air s4-28 ~9u 537.17 17 37 100 440 ._... ,.........._ 9 Soplembor-10 __ _521:84 _ __ _ 97,200...- ____ Seplernber•16 ~ _.526:07 - ~ _r~tambvr•221 :31.13 ~ 9~~200 •__ _ -Seplembcr•28 --- b 2B 0 4 ' O ~ ___ _ _ 5 . 17 537 _ - ~_~_ 440 100 October•SO 52`84 100,440 ': ;Oclabor 16._• 1•T ..526.07 •• _ _ 100,4407 -{October•22 - _ ____ __531:13 _ _ 0,4 0 _ .1 s clo er- 28 N 6 . 17 537 , 9700 Nvromtrer-{0_,_ S21Bd •-_ • . _-_97,200_ ! __,SYmamher56-__----•-526 07---- ---._97~..._._ ._..iNowmber22 • f31 t3_-- I --9~~ sr _ arem { ....._ __ . _ - Oooember-10. i . . :21.84 100-~4D Qecomhvr•16., , _,. i , , 526.07..,.., .____100,440____ 4 , -_.. ~Derembe~•22 ~ . 2 .531.13. 100,440 _ _- 440 100 ( ~Oecember-28 J 29 _ 537.17 _ 29 :38 fOp,44p )00440 Janyary11 _--- 5.. .....572.!9..._..__ .._.1~.'~40_.. ...JpnuerY•17 S26:B6 100, 40 3 .. ..._.;Januory- .:32.07 , . .. angary- ; 2 ,.__.-- .. 29 38 --- - --- 907x0 Fvbruary-11 522.49 90,720 ;February-17 ~ 526.86 90,720 February•23 532.07 90,720 iFebruary- 9 5 . March•11 • 522.49 100440 Merclrl7 ; 526.85 100,440 hlarcir23 I 532.07 100,440 ;March-29 538.29 100,440 97 ApriF11__~ (22.49 -- ---97'x-- ~ oF17 i •--sp'p. ~ ................. 526.85 . 97x()0...... 1.23 Ap"...- -- (32,07 - --- -- 97200 0 _i ri•29 Ap.._......_...__. 53829 ..._.......... • ____ 38 29 . ~- 440 100 May-11 ..522.<9 . ._ -100.440 _~ ___-rlay-l7 ----:- f28.©6 0,440 100ti440~[~,{h1ax:23 _____;_ 532.07 1 -Ma~'_Z9_...-. . . . 5 .._._ __.-.. , .._....~ ..... .._ June~11 ; . . _.__. 522.!19 97 200 1June-17 x 526.86 472!10 _!Junl:•23„ I , 532.137 -. .- - ----57200___ _-1June•29 - ~-~ ---- -- ._ ~ • ......... .. Ju1y'11 ~ ....... ._.__._ :22:49 ~ --- 100,440 -_ ______ -_-_-- July 17 . _.._;..-_136 86,__--- - _ -- --100,440 _ {Ju~r43-_(, -532.07 -- _ 100,,,_44© -iJy~-29 538-29 100,4 ~ _ _. _. . ... Augusl•11 ...... ..__. 522.x9 _ . ... 100,440 .. August-17 ~ :26.86 100,440 • . , uat-23 _ ~ _ S (32.07 ~.. 100,440 jAugust•24 538.29 100 440 . . September-ll 522:49 , 97,2(A Se,plembar•11;.,.._. , . .__- 526:86., .. -_ , 97,200__..- ptember-23 ~ _ .. 532:07 97,20(} . iSepSember-29 - - 538.29. _ ... _ 9700 Octvber•11 • • _ .... 322.49 , ,_ . 100,440 - ___• :October-17 526.86 100,440 Oclober-23 532-07 100,440 jOctaber-29 536.29 100,440 Nmember•11 ; 522.49 97,200 ?November•17 526.86 97200 %Navember-23 ~ 532.07 97,200 !Nwrember•29 :38.29 97200 December•il i 522,49 100,440 becember-17 ; 52696 100,440 ~Oacember-23•i,_ I ~_,f32.07 •-~ 100,440 -' ~Decemher•29 _538.29 100,140 Jariuar •12__ ._i r . • ~ 523,17 _ ----. ..-- ~ tOD,440 - -- - _ -- - ;January-18 { ._ _____ __ 52766 6 ..... ___ ___ •__ 100 440 ;January-24 _ ~ . Feb 2d ....0:17 13303 53303 _ 1D0,440 93 n60 'January30 Fehniar 30 539.44 _.__ 53414 .. __ 100,440 ___ - 90 72 0 FQbruaTl2.. ;.. MarcSi•12 j ......523.17 ................ 123 17 93960 ..._... ~_.._..__ 440 100 !Fehruaryt9 + :_--~--_-- Marclrl4 ~ 5276 527.66 rua - ~ .. 20 I ~ Marc1~24 i00,441) ~ _._ ..._ 59303 ~ -----. _ .._ --- 100,440 __ y- -- --- _-,IMarch•30_•_, ----- ..._..__.i38.44~ , . 10p 44~- April-12 ! , S23,tT , 97,200 Aprihl8 527.66 ._ , 97200 ___-___ .___ i (April•2d _..____ __ 533.03 • _- 97 40---- -- I riL30 M ------ --- 539.44 - ---- _ _ 9T J. ~ May12 ~ 523.17 . 100,d4D May-18 .. ; 527.66 ..... • .. 10D,440,..- _1•---jMay?4•,_••_., ., . . 533.03. ~ 100, ay-30. I _539,44 1{JO June-12 ~ 523,17 97200 June•18 527.66 972(10 !, duno-24 ~ 533.03 97,200 IJune-30 539:44 97,200 July12 1 523.]7 100,440 ;July-18 527,66 100,440 d0 i July-24 I t 24 533.03 533 03 iD0,440 440 100 iJtdy30 usb30 Au 539:44 A4 539 100,440 440 100 August-l2___-_1_ i im ____523_:17 _ 17 2 _ 100,440 7 20 __~Augus618 -;- ber 18 t IS 327.611 _,~ 66 527 , _- • --•-. _-- : __-- ---- t__. Angus _ 1D0,4 97 xD0 lember•24 533 03 Se 97200 ---1 g ISeptember•30 . 339,44 . -_- 87,200 ber•52 I Se t Oeiobo%12 ~ •_.. __ 5 3. S23 t7 ~ •-• _9 , 0_ - 100 !140 em _ ~ ep ;-_ ~ ;October•18 __ _ _ 527.66 _- 440 100 p ._ -_ i Oclobor-24 i . . 533.03 -_ _ 1D0440 - • _ IOctoher-30 - ~~~ 539.44 10D,440 __ _ November-12 i , _.. _ ---_ _ 200 123-t7 97 ~Norombcr-lB ~ . ••••...... . 527.68 ._ , 97,200 1~{Noramber-24 {_ _ _:3303_ _ _97,200 . ~N_a+rembar3E? _, (39.44 _ _ ._ 91,200- __ -- --- 17 Doeembor-12 ~ 523 , -- x40 100 ~ _. ------ -- DoceMber-18 -.. __._.. 527.66 100,440 t0ocomber-2d ! ? 53303 • _ 10E],440 _ _~Dseem_ber•30 _539 d4~_ ____1170,410 January•13 ~ --_ -___ - __ _,_ , ; 100,4411 jJanuary59 528.49 523-86 __ _ ... 100440 -. ___ _j._-.--FJanuary25. _...1_._. ._..534.02 ... ~ . ...100,440 _ -_ ~Janyary-31 .... _ __ 540.62.--.- ---.- 100,10-._, . Februar X13 Y ~ • f23.86__ . , _ . .90,720 . , ..'Feluuary13 . ,. ! . .. ,528A9 .... .....90,720...... ~ EFehrua!Y•25__L_... _ 534.02.-• _-- .. 90,720 .. Febnrary-31 ~ 540.82 90,720.... March•13 i 523-86 SD0,/40 March-19 S28.d9 100,140 F ~MarcM25 534.02 100,440 March•31 140.62 100,440 Apn413 i :23.86 97,200 ;Apri1•f9 i 528,49 49 28 97,200 100 4/D ? !Aprib25 Ma 25 534.02 534 02 ~ 97,200 440 100 April-31 IMa 31 540.82 540.62 97200 100 440 May-13 - i 523.86 86 - e 23 J 13 100,440 • 97 --~ ~ May59 ; _ :luna-i9 . .... 3 49 528 _-__; _ y_ , .• __ _• _i.__. ~ ; 97 Juno-25 _ _ . ___ 534-02 , : 1 97,200 y _ - -IJrrne•31 ____, ~•• •,,,, , i40.ti2 97,200 un - . _-.._-_._;_. --5 523 86 Jul 13 I 100 440 'Jul -i9 r ~ r . 528.49 ______ 100,440 July25 ~ 334.02 100 440 . . . ---- Jul -31 _ -~ - • _ f 0.62 100 440 ----- -- ---- '---- . y~ _._.-..._ f23.86 100440 August;l3 ------- -- i Auyusl-l9 -! 520:49..,._.... ,, .__~~.440---,.---August_25----;-- .. _ - --_534.02^. ~ . --__.. _ _ __..100,440.__ . _~August-31.. -_ S40.S2~ _ 10Q44, 0 _- _•- Seplember-13 ; (23.86 972D0 ; iSeptember•59 528.49 97200 I September-25 536.02.__- .1___ 97 ___ _r~ -__ iSepternber•31 -__ 14Q.1i2 9T~00 - -- October•t3 I . 523.86 107,440 i O[lo6er-19 _ :28.49-___. ,-__ 10Q A40_-__. nc5ober_25-. __ -. , ..• -534,02... I 100,440 !October-31 540,62... ,. 100,440. . ~- , 13 November ! ~ ~ . 97x04 _.,--___ l+tovember~i9 , _ 528.49 97,200 1 1Norember25 :... 534.02 .. . ...,..97x00 ... .. Novamber-31 -•- 34062_-, 97 .. _. - • ._, _.. Oecemlier•13 1 _•_. ._...._.. : 523.86 _..... 440 100 ~ ;December-19 , . 520.49 . ... 100,410 _ December 25 534.02 ~ 100,440 December•3l 540.52 100,440 January•14 February•t4 ? 524.58 52458 , 100,440 90.720 :January-20 ;February-20 _1. ' 529.35 __329._35 100,44D _ 9360- ? IJanvary-26 j_-lFebruar1r-26 ; 335.04 _335.04 t 100,440 ~_ 90,720. _._ 1January-32 ......_iFebrua7.~~_.. f41,84 .._.__~1.84 104,440 93x960 . March-14 f2d.58 100,440_•__ .,. , _ __;ivtarclr20 _!_... • ..._529,35.....__ 29 100,4!EO_- 7 ~'March•?6_ ! --~ --- 335.04 __- - ~_- 100440 2pQ --- I 97 ':MarcF+-32___-- _ ~nl•3'2 -- f41~84 - 341 84 • 100,dA0 ._ 97 200 ~ ApnF14----'---~4.-s`'-3--------- ~r~--- 1004<0 _ MaY-14 ! 524:58 .35--- -!--:'4ExiN20------------6 ^;tvlay2tJ ;_529.35-, xOD-- - }~!r1M26..._.......~._. --9 100,`40 -!May26 _! _ , ..-. ~5.Od_~ .. .. X35:04._..-i 100,440 ~ ,May-32 . 541.84_ , . 1001440 ._..T• Juno-14 ; . _m 524,58 _ _ 97 200 ;June-20 r { 129.35 , , 97 June-26 ~ 535.04 87,200 !June-32 141.84 87 . Ju1y14 .... _ • . , 524.58 ,. 100,4<0 iJu 20 1Y' { . 529.35 100 Jul 26 Y.- .{-- (35.04 -- -.. .. 100 440 .... , .-. ':.Jul -32........ .._ Y ... 541,84 _ _ .... .. 100,440 .... Augusl-Id ~ 524.58 100,440 i August•20 j 529.35 100,440 August-26 ~ 535.De E 100,440 'August-32 541.84 100,140 September•54 ' 524.58 97200 Seplember•2D~ 529.35 97,200 September-26 S3S.04 I 97,,200 E 'sSeplember•32 54184 97.200 Octotrer•14 ' f2A.68 100,440 '.OctoberQO I 529.35 100440 Octaber•2S 26 b 100,440 S35.Dd_ - 9700 D4 535 Oclvber•32 ------ November-32 541.84 541 84 100,440 _ 97 200_ November-14 ! _ Oecembvr•SA ! 524,58_ 524:58 _ 9724D 100,440 ?-;November-ZIJ ! December-20 i 1529_35 529.35-___-_ er. 97,200 - -_. Novem . .___100,440 __ - Decomber•26 (_, ___ - 535-04 _ - __ ~ tb4_„4dp _-; - _December-32 , ---- (41.84 , 100 td0 ' quantiGe /received forecast !o dealing on a fa(abi~ basis-acrost_ efl days within each re_spaclive_Oelive Month_ a (tv1Wh) to be d¢li±ered _._... - , ry - _-__ ______ _.-_ ~.._- ----------- - - - ! "neSofNewGovrrnmentatCharges, i(any.. .. 4S EXECUTION COPrY ........................EXHIBIT.~3~_........................................................................ -.._. _.....-....._. EARNED PORTION OF THE CAPACITY PREPAYMENT I ~.. _.._..~...~ EARNED" EARNED" >~AF2NED" EARNED" PORTION OF PORTION OF PORTION OF PORTION OF ;HE 'D{E THE THE DELNERY ~ CAPACITY Ol~LNERY CAPACITY DELNERY CAPACITY DELNERY CAPACITY MONTH PREPAYMENT MONTH PREPAYMENT MONTH PREPAYMENT MONTH PREPAYMENT JanuarY_04______ _ 51,634,583_ January_15 _ __ __31,614683_, __- -:January-21 _•1,614,583 Jeniiiiry-27~-- 51,614,583 .__v-- --"--- ------~--- lFebrua 27 51,614.583 February-09 _- - _ -3'i.~14,583_- -_--- February-l5 __- -- 51,614,583.._ _. _. FebruatY'2t 51.,614,583---;.----_ry-- ---.------ -- - Maroh-09 51,614,5@3 March-15 51,614,683.__,-_ March-21 51,614,583 . _~March-27~_ -51,614,583 ApnFU3 _ .. 5114,583... Apri1.15. 51,614.,563,.._ -_-April-21--- ~1,614,5t3;3_,._ April•27 _ 51,614,583 May-09_________ _ 51614583 __ - MaY•15 331,614,583 _ MayW21.-- ~1,ti14,583 _-.May-27 __-_ .__51,614,583..•, June•09 51,614,683 June-15 i. 51.,614,583. _ „ „June-21. 51,61,4,583.._- Jilne-27_ _ - - ..51,514,583 July-09. ,___- S1,6t4,563 -,July-15 _~ 51,614,583 -J~-21 •,........,51,614,583.,_..,___ July-~7 _ -51,61b,593! ...... August-09 S1,G14,583 Rugusi-l5 _ ~ 51,814,583_-__ ___ August-21 51,614,583 August•27 51,614,583 , ~Septernber-09 , _ _51,614.,583 September. l5 5153A,583. „_,Septemben2l __31,614,583 __ Septemberr-27 • ,51614,5133 October,09_ __ ...51.614,583 October l5 11614,583 Oclober•28 51,614,683 October-27 . _ f1,6i4,583 _ f~ovember-03 _,_._51,614,563..__ _-___ November•15__f __51,614,563 _ _ _JNavember•21 .51,614,583_ - November-27 _ _x11614,583 __ December-09 ~ 51,614,583 December 15, !.. S1 61.4,583. __ -, _ :December 21 51,614,583 _ ___ December-27_ _ 51.,614,563___. January-10 I 51614,5'83 ?January-16~~ S1,ti14,583 _ January 22 St,614,583•_ _--__-January.28____31~1d,583-. February-10 ,•,_1,_ 51,=61~5.,~3__ ~r:bruary_•16 I Sl 614,583 -,--February 22 31.,614,563,_, , - February-28 • . •_511614,583.._. March 10 51,614,583.. - ,._ 3March•16 __-_- _51,614,583 _ _-_•March-2Z ____ _51,614.,583, March 28 .__ _Si,614~583 - - April-10 51,614,583 lAprrl-16 f1 ,614,583 Apol-22 51,614,563 April-2B 51,614,583 May-18_..... ....... S1,614,583 May16 ..................31,614,583. _ May-22 SJ614 83 - MaY-2B_._..._._. _. St 514,583 June-10 ! 51,614,583 (June-16 51,614,583 June-22 $1,614,583_ -June-26 51,614,563 July-1U--------•-51,634,x13.3 „July-i6_.___. 51,614,583 ____,July22 ......._.__...$1,614,583-----.July=28-.----- St.614,583_. August-l0- 61,6iA583 August-tfi_ 51,614,583__ August•22 X1,614,583-. ___,_i0.ugust-28 __ S1,61A,'S83_ _5eplember_10_ _ 51,614,583 _ ___ September-t6„_51,614,583 _ -,.:September-22 51,,614,583 -September-28 S1 6, 14,583 October-10 __ __$i ,~14~583 _ ____ October•16 _ __S1,ti1b,583_ Qctaber-7Z_ b1,674,58~ Ottnber-26 51,614,583 -November•10 51,614,583__ ___ November 16 _51_614,689 ~Navember-2z 51,SiA,563,_ ~ November•28 51,614,583 December.l0_ 51,614,583 December-16 : 51 G14 83 Decembar•22 _ 81,514,58`1- -_ Oecember.28 51,614,563 'January-11 31 X14,583. . __,-- January~l7 . _, ..31.,614583 _ ____;January_23 _ ...._.31,6~4,583 January-29 51,614,583 February!!- __51,614,583 ..,February-i7 51,614,583...,... ,February-23 -__.33,6~+4,~a_83___ .___ February-29 51,614,583 March-1.1______ _ -..51.,614,583 .- March-17 51,614,583...._ ...:March 23 _ $1,614,583... ....!March-29 #1,6141583,.... --' ~April•11 51614,583 A ri!•17 ____ 51,614 83 nl•23 S1 ,614,583--_ ____ April-29 51,614,583 ---- - ----- --p - -~. _...-. _ ..... 6- ----- --•~ -- ........._. ....... . (May-1.? ................51,61A,683 ...... May-17,..........(....51 ,614.583........ __May-23........_......1..614,x83..... -..... MaY~29._..._.-__s1~14,583 T !June-i 1 ~ 51=614x583__ ^ Jrine-17 ! i~1 51_4 5,83-_ June-23 51,614,583_ _. =June•29. _ . 51,614,583 _._ ;Jul -31 ~_ _ 51,6'14,583.___. _ JutY•17 51 E14583 JulyZ3 51 614583 Jul -29 St 14,583._.. lAugust•11 ~ 51,614,583 ____#August-17 _ 51,614,583 ____-August-23 31,,614,583__ __-~AUgust-29____ 61,614{5'93 !September-ti 51,614,593 ~Septr:mber-17 i1 ,614,583 Septemben23 51,614,583 September•29 51,614,583 October-11 51,614.583- ___ October-l7-.____ __ f~614.583 _ --October`-23 __ -_-51_,614,583.., . - October•29 51,61A 583 l .............---- - November-11 51,61.4,583 November-17 Si ,614,583 November•23 51,614,583 November-23 S1,6i , December-11__ _ St,61d1583 December-l7- 61,614,583__ ._ ;December-23,.....11,614,583- _- December-29 x1614,583 January__12 __1 St ti14 583 January 16 ___ _ 51,614583 -____•January 24 4- 51,614,583 ,_ _ January-30 •~ -51,614,5$3 February12 51,614,583 (February 1B ;1.,614,583 _. ___ February-24_ 51,614,503 February-30, 31,61,4,583._. March-l2_ ,. j , 51.,614,583 ~_lMarch^16_____- -51,614,583 ----March-2d 51,614,583 y ~ March~30 _ S1 b14~583. April_12 ... i ..51.,614 5$3 ..IAprrl•18 . _. _ ~1•,61~83~ April-24 -51,614.,563_ .- Aprr130 .. 5.1.514,583.,._. ~. May_12 ~ 511614,583 fMay-1.8_......... 31,61.4,583._._._-,~!'~ay-24•--__ a1,61d,58:~ __Mey-30 $i~14,583 June-12 I....51 X14,583 (June•t8. Si 614,5.83........._...... June.-2A........ ~ ._.51,614.,583__. __... June.3© .~_ .__51,614,583__ JuE7_12______l__S1,6i4,583__.__,,-July-18_ r-_51,614,683_ Jaly-24 _____51,614,583 fJulY-30 51,614,583 August-12 33j634,583 August-18 51,614,583 r-•-.August-24 51,614,~v63 `August-30 S1,614,583 September-i2 St X614,583 ~ September-18 51,614,683 September_24 S1,614,563 _ _ Seetember•30 _„ 51,614,583.._. Oclober•12 51,614583 Qctaber-18 51,614,583___ ____ October-24 __ _ -_51,614 583...:._ _ October 30, __ r 51:614,563,.._. November-12 $1,614,583_ _ _ -_ Noyemberl8 __51,614,683 ,•Novembe_r-24. • 51,,614,583 -INavember•30 -S1 614~583~ I_...-------------- ---- .- .. !December-12 3t,614,5133 December-1B , 51,614 December-24 51,614,583 December 30 51,614,583 ... January-l3-_-.-,- _ 31,61.4,5133.___ ______IJanuary-l9_..-__!___51,61463__-___3anuary_25_- -.51.,6#4,583_,._ January-31 ......,S1,614,583.... February-13_____ ___S1 614 583 _- __--f~'ebruary-l5__ --51,614,583 _ __February_2r-- -53,634,583.,_ .,_3February-31- 51,614,583 __ March-13 5114,583 March-19 _ 11,614 B3 March-25 53,614,583 -March•31.,..........51,614,583,...... .April-13________51-,614,503 ----April-19_-~ 51,614,583 April-25 51,634583 ____•A_pril-31 11,614,583 •May-13 51614,583 May-19 51,614,''x83 May25 51,614,583 May-31 51,614,583 ~June•13 516141583 June•19 51,614,563 dune-25 51,614,503 June-31 51614,583 IJuI i3 - - -- 51,614,583... 1Ju1y-19 31,514,589 July-25 51,614,583 ~July_31_____- _4_1,614,5x33___ I .. Y- ................. ..... 1 ............ .....; .. ..........--•--- ----- -- - August-l3 ....,,.51,614583.......- _. IAu us1-19 , 51,614583 __August-25_ - __, _ 51,614583 _ ,__tAugust_31 __ ~1 614,583 9. ..........~....... She tembar-13 31,614,583 _ _~Sepiember-19 11,514,583 Se ieP tuber-25 __31,614,583 ;September-31 51,614,583 ,October:l3 .51,614,583. October-l9 51,614,503 _ Octobera5 31,61.4.,589., October-31 b1,614 593 November-13 51,$14,583 INovember•19 I 51,614,~aB3 tVavembar•25 51.614583 _ lNoverr:ber-31 51 614,583 December~l3 ! 51,614,563 -,-!December 19 _ 51,6_1_4,583 December-25 - _.S(,61d,599.......,.. pecember-3i 5.1.514.,583_- _ ~.. ,....... January-l4 _ __!_ 51,614,583 .__ __ _ -.January-20~. _ _51_,614,583 __ _~ Janua_ry_26 ___ __ S1 61 4,583-___ -_,January_32 -__ _ 51,614,583 -- -------- February-14....3 51.,614,583... February-20. _ 5114,583 -February-26..,,....51,614,583 EFebruary-32 11,614,583 _. -. .. - March•14 ! 31,61!!,583......,... March-20 11,614,583__. ~_-March•26, ,,. 51_,614 ~ 3 March-32 x1 14,583.._ April-14 € 51614,583 Aprit-2[l 11,614,583 April-26 51,614,583 ;April-3Z 51614,583 May~14,. _ ,r 51,614,583 ._iMay,20 _ 51614,583 May--26 ...._..__.~1,614.583_--sMaY:32.......... bi,614,583 ._r _r._..-._-.._....._..~ June-14 51163 A,583 ___ ____ June_20 -______ _ X1614,583 _ ~June_26 ____ __ S1,614,583-~ ~June_32_-__ Si 614,583_ (July-14_ - ---_--_-- ---51_,614,583_-- _.._ July-ZQ-- --_-__-- ---1,614,x83-- - July-28-- ----- - --- 1,614,583 _ _ tJuty_3~---------- -- 1_,6141583 ,4t~gust-14 __ S1~i4,5'83 ~.ugust-20 51,614,583.., .,August-26 __ 61,614,583 iAugust-32 _ fi~14,583 ,September-t4 51,614,583 Septembet•20 51,614,583 September-26 51,614,583 ._ {September-32 51 ,61A,583 October-14 511614,583 October2a~ __51,614583 _ ~ October26 _ _•51,614,583 __fOctober-3z ~51~;~614,583~ _ .................. ....,..._. _ _ . I -- November-14 $t 5,14,583.. November•20 31,614,583 __ _ , ,November-26 .$1,614,56:3, November•32 St 614 583 December 14 51614,583 December-20__ _ 51,614,583 _ _,_-December-26 51,6.14,563 • .. December-32 .51,614,583 amounts deemed !o decline on a ratable basis across all days within each respective Delivery Month 49 EXECUTION COPY EXHIBIT 4 ACCESSION AGREEMENT THIS ACCESSION AGREEMENT (this "Agreements'}, dated. as of December 23, 2008, is entered into by CITIES AGGREGATION POWER PROJECT, INC., a ,political subdivision corporation incorporated in the State of Texas, as an Additional Secured Party {as defined below), and. acknowledged by TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC, a Delaware limited liability company (the "Borrower"}, and. CITIBANK, N.A. ("Citibank"), in its capacity as Collateral Agent far the Secured Parties, under the Intercreditor Agreement (as def ned below). Reference is made to that certain Collateral Agency and Intercreditor Agreement (as amended, modified, restated or supplemented froze time to time, the "Intercreditor Agreement"), dated as of October 10, 2007, by and among the Borrower, Energy Future Competitive Holding Company, a Texas Corporation ("US Holdings"), the Subsidiary Cruarantors party thereto from time to time, the Collateral Agent, the Secured. Commodity Hedge Counterparties, and certain other Persons party thereto from time to time. Capitalized terms used herein without definition shall have the meaning assigned to them in the Intercreditor Agreement. Pursuant to Section 5.6 of the Intercreditor Agreement, the Borrower may designate under the Intercreditor Agreement additional obligations as Secured Obligations on the terms and conditions set forth therein. The Intercreditor Agreement requires that any holder of additional obligations that are designated as Secured Obligations must become a party to the Intercreditor Agreement by executing and delivering this Agreement. The undersigned. is entering into this Agreement pursuant to Section 5.6 of the Intercreditor Agreement in order to became a Secured Party under the Intercreditor Agreement and the Security Documents, and to benefit from the Collateral under and in accordance with the terms of the Intercreditor Agreement and the Security Documents (an "Additional Secured Party"}. The undersigned is a Secured Commodity Hedge Counterparty under the Purchase Power Agreexxzent dated the 10th day of September, 2008, and stipulated to be a Secured Commodity Hedge and Power Sales Agreement, executed between Big Brown Power Company LLC, Oak Grove Management Company LLC, and Luminant Generation Company LLC, as Seller and Facility Owners, and Cities Aggregation Power Project, Inc., as Buyer, (the "Additional Document"}. Pursuant to Section 5.6, attached hereto as Annex 1 is a copy of the certificate to be delivered by a Responsible Off cer of the Borrower in accordance with Section 5.6(b}(1) of the Intercreditor Agreement. The Additional Secured Panty hereby becomes a Secured Party as a Secured. Commodity Hedge Counterparty. The Additional Secured Party hereby agrees for the benefit of the Collateral Agent and 54 ExECUTION coPY the Secured. Parties as follows: The Additional Secured Pa1-ty hereby acknowledges, agrees and confsrms that, by its execution of this Agreement, th.e Additional Secured Party will. be deemed to be a party to the Intercreditor Agreement, and, from and after the date hereof, shall have all of the obligations of a Secured. Commodity Hedge Gounterparty thereunder as if it had executed the Intercreditor Agreement. The Additional Secured Party hereby ratifies, as of the date hereof, and accedes to and agrees to be bound by all of the terms, provisions and conditions applicable to a Secured Party and a Secured Commodity Hedge Counterparty contained in the Intercreditor Agreement and the other Security Documents. To the extent the Additional Secured Party is an agent or trustee for one or more Secured Parties, the Additional Secured. Party acknowledges that it has th.e authority to bind such Secured Parties to the Intercreditor Agreement and such Secured Parties are hereby bound by the terms and conditions of the Intercreditor Agreement. The Additional Secured Party hereby agrees (an behalf of itself and any Secured Party claiming through it} to comply with the terms of the Intercreditor Agreement. As of the date hereof, Schedule 1 sets forth the "Floor 14.mount" of the ,A.dditional Secured Party. The address of the Additional Secured Party hand any Secured. Debt Representative for such Additional Secured Party} for purposes of alI notices and other communications is ,Attention of __ (Facsimile No. ,electronic mail address: ). The amount of the obligations incurred by the Borrower or the applicable Subsidiary Guarantor under the Additional Document are as provided in the Additional Document. This Agreement may be executed. in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute one contract. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED UNDER, THE LAWS of T.HE STATE OF NEW YORK. TI~I WITNESS WHEREOF, the Additional Secured Party has caused this Accession Agreement to be duly executed by its authorized representative, and each of the Borrower and the Collateral Agent have caused the same to be accepted by its authorized representative, as oi' the day and year above written. CITIES AGGREGATIO~C PO'V~ER PROJECT, INC. By: Name: Title: Acknowled ed: 51 EXECIJTI4N~ CQPY TEXAS ELEC'T'RIC I3f~LDINGS CUMPANY LLC BY: Name: Title: Acknowledged and accepted: CITIBANK, N.A., as Collateral Agent By: Name: Title: 52 ~~CUT~ON COPY ANNEX 1 Borrower's Certifcate/New Debt Notice 200_ Dear Luminant Generation. Company LLC ("Luminant Generation"), Big Brown Power Company LLC ("Big Brown"} and Oak Grove Management Company LLC {"Oak Grove") (Luminant Generation, Big Brown and Oak Grove collectively referred. to as "Subsidiary Guarantor"} have entered into an additional Secured Commodity Hedge and Power Sales Agreement, and. that such Additional Obligations will be Secured Obligations and are permitted (if addressed therein, ox, _ otherwise, not prohibited} by the terms of the Credit Agreement and by the terms of the other applicable Financing Documents to be incurred. by the relevant Loan Party and secured by a First Lien equally and ratably with all previously existing and future Security Obligations. Sincerely, 53 EXECUTION COP'u' 200_ Dear The new Secured Debt Representative (Secured Commodity Hedge Counterparty} is Cities Aggregation Power Project, Inc., 816 Congress, Suite 1900, Austin, Texas 78701. Sincerely, 54 Floor Amount The Floor Amount shall be $0. E~ECU'I'YON COPY SCHEDULE I 55 ~x~cUTYON copy 1~~cr~~T s SELLER' S FORM OF GUARANTY GUARANTY This Guaranty is executed on this day of 2008, by Texas Competitive Electric Holdings Company LLC, a limited liability company organized and existing under the laws of the State of Delawaxe ("Grcarantor"}, for the benef t of Cities Aggregation Power Project, Inc., a political subdivision corporation incorporated in the State of Texas, its successors and. assigns ("Counterparty"), and is as follows: BACKGROUND Big Brown Power Company, LLC, Oak Grove Management Company, LLC, and Luminant Generation Company, LLC, and their respective successors and. assigns (collectively called the "Companies", and. individually as a "Company"} have executed and entered into that certain Power Purchase Agreement dated September 10, 2008 ('Power Purchase Agreement"). The Companies are Subsidiary Guarantors under that certain Collateral Agency and Intercreditor Agreement dated as of October 10, 2007, by and among the Guarantor herein, Energy Future Competitive Holding Company, various other Subsidiary Guarantors named therein, Citibank, N.A. as Collateral Agent for creditors, various creditors therein named, and Secured Commodity Hedge Counterparties. Pursuant to Section 5.6 of the Intercreditor Agreement, Guarantor may designate under the Intercreditor Agreement additional obligations, including guaranties and Secured Commodity and Power Sales Agreements, as Secured. Obligations. Pursuant to the Power Purchase Agreement {i} Counterparty has extended $465,000,000.00 to the Companies, for the benefit of the Companies and Guarantor, (ii} the Companies have agreed to provide Products, as therein defined, for the Term at predetermined rates to Counterparty, and (iii} the Com.pani.es have agreed to certain financial obligations to Counterparty as therein provided ("obligations"}. The Companies are subsidiaries of Guarantor. Guarantor and the Companies have stipulated that: (i} the said Power Purchase Agreement is a Secured Commodity Hedge and Power Sales Agreement under the Intercreditor Agreement, and (ii} Counterparty is a Secured Commodity Hedge Counterparty under the Intercreditor Agreement, entitled to a first lien on the Collateral named therein and in other documents referenced therein that evidence and secure the indebtedness of Guarantor on a pari passe basis with other creditors, as same may from time to time be renewed, extended, modified, amended, refinanced., or both. 56 ..... ...... .._ ....: ........ ..............._ .................:............. ,,.....n _,.._,.......... .....,...,_........_....._....__. , ,.......................__,._.._._...,....__..._.....___.............,..._._._..._._..__..._.~......_ EXECUTIDI~I CGPY 1 AGREEMENT In order to induce Counterparty to extend the sum of $45,000,000.00 as provided in the Power Purchase Agreement, Guarantor, intending to be legally bound, hereby agrees as follows: Guarantor hereby irrevocably and. unconditionally guarantees the punctual payment when due of (i} all Obligations of the Companies to Counterparty now or hereafter existing or arising in connection with Power Purchase Agreement, {ii} interest as set forth in the Power Purchase Agreement, if any, on such Obligations, and (iii} any and all expenses (including, but not limited to, attorneys' fees and costs associated. with enforcement of this Agreement} reasonably incurred by Counterparty in enforcing i.ts rights under this Guaranty; provided, that fihe Guarantor shall not be liable for any expenses of CounterpaZ-ty if no payment under this Guaranty is due and Guarantor's liability hereunder shall be limited to the amount calculated in accordance with Section. 9.3 of the Power Purchase Agreement {the "Guaranteed Amount"}. This Guaranty is a guaranty of payment and not merely of collection. This Guaranty is a continuing guaranty of .payment when any amount is owing or when the Power Purchase Agreement is breached, without regard to whether such payment obligation is contingent or absolute, liquidated or unliquidated, or whether recovery may be or has become barred by any statute of limitations or othei~vvise may be unenforceable. The Guarantor's obligation to make a guarantee payment may be satisfied by payment in full of the required amounts by the Guarantor or by causing the Companies to pay such amounts to Counterparty. The obligations of Guarantor hereunder. are independent of the Gbligations of the Companies. The liability of Guarantor hereunder is independent o#' any security for the Gbligations of the Companies to Counterparty and is not affected or impaired by (a) any dissolution, reorganization, or insolvency of one or more of the Companies, or (b} any payment to Counterparty by one or more of the Companies that is subsequently xeturned to o.ne or more of said Companies pursuant to eou~-t order in any bankruptcy or other debtor-relief proceeding, or {c} any insurance that may be available to cover any loss. Guarantor waives any right to the deferral or modification of Guarantor's obligations hereunder by viz-tue of any debtor-relief proceeding. The obligations of the Companies to Counterpat~ty under the Power Purchase Agreement that are guaranteed by Guarantor, subject to the Guaranteed Amount, under tlus Agreement specifically include, but are not limited to: 1. The payment of any credit for Capacity Payment due to Counterparty under Section 4.2(a} of the Power Purchase Agreement; 2. Amounts due to Counterparty by one or more of the Companies on account of a Seller Failure under Section 3.4 of the Power Purchase Agreement; 3. Amounts due to Counterparty by one or more of the Companies for additional charges incurred by Counte~party as a result of failure to submit or confirm a schedule or Energy Trade as required under Section 7.3 of the Power Purchase Agreement; 57 I{~XECUTIUN CUFY 4. Interest charges payable to Countelparty pursuant to Section 8.1(b) o.f the Power Purchase Agreement; 5. Amounts due to Counterparty under Section 8.4 of the Power Purchase Agreement as a result of an audit; 6. Amounts due to Counterparty as a result of a Seller Default under Article I o of the Power Purchase Agreement; 7. Amounts due to Counterparty for any Buyer Termination Payment under Article 12 of the Power Purchase Agreement; and. 8. Amounts due to Counterparty by one or more of the Companies with respect to indemnities and duties to defend and hold harmless set forth in Section 13.1 and Section 13.2 of the Power Purchase Agreement, limited, however as set forth in Section i3.4 of the Power Purchase Agreement. The liability of the Guarantor under this Cruaranty shall be unconditional irrespective of (i) any lack of enforceability of any Obligations, {ii} any change of the time, manner or place of payment, or any other term, of any Obligations (including renewals, extensions, modifications, and amendments thereof, regardless of whether or not Guarantor has agreed to or approved the - terms of same), (iii) any law, regulation or order of any jurisdiction affecting any term of any Obligations or Counterparty's rights with respect thereto, (iv} the insolvency, receivership, reorganization or bankruptcy of one or more of the Companies, (v) the merger or consolidation of one or more of the Companies with or into another entity, the loss of the Company's separate legal identity or the cessation of the Company's existence, or (vi) defenses that one or more of the Companies may have to such Obligations (other than the defense of payment). Except as specifically provided for herein, the Guarantor waives promptness, diligence, and notices with respect to any Obligations in this Guaranty and any requirement that Counterparty exhaust any right or remedy or take any action against one or more of the Companies. In the event that any payment by one or more of the Companies in respect of any Obligations is .rescinded or recovered from Counterparty as a preference or fraudulent transfer under the Federal Bankruptcy Code, or any applicable state law, the Guarantor shall remain liable hereunder in respect to such Obligations as if such payment had. not been made. Guarantor waives, to the fullest extent permitted by law, the benef t of any statute of limitations affecting its liability under this Guaranty. Guarantor waives any right to require Counterparty to (i) proceed against the Companies, (ii} proceed against or exhaust any security held .frond the Companies or any other party acting under a separate agreemenfi, or (iii} pursue any other remedy available to Counterparty. Guarantor waives any defense based on or arising out of any defense of the Companies other than payment in full of the amount(s) owed or full and satisfactory performance of obligations of the Companies under the Power Purchase Agreement, including without limitation any defense based on or arising out of the disability of the Companies, the unenforceability of the indebtedness from any cause, or the cessation from any cause of the liability of the Companies other than payment in full of the amount(s) owed or full and satisfactory performance of the obligations of the Companies. Counterparty may, at its 58 EXECUTYOI~ COPY election, foreclose on any security held by Cou.nterparty, whether or not the means of foreclosure is commercially reasonable, or exercise any other right or remedy available to Counterparty without affecting or impairing in any way the liability of Guarantor under this Guaranty, except to the extent the amount(s) owed to Counterparty by the Companies have been paid. Guarantor assumes all responsibility for keeping itself informed of the financial condition of the Companies and all other factors affecting the risks and liability assumed by Guarantor hereunder, and Counterparty shall have no duty to advise Guarantor of information known to it regarding such risks. This Guaranty shall remain in full force and effect until the obligations of the Companies to Counterparty under the Power Purchase Agreement have been satisfied. L7pon failure of one or more of the Companies to perform under the .Power Purchase Agreement, Counterparty may provide Guarantor with a written demand for payment, but the failure to provide Guarantor with a written demand shall not extinguish. the guaranty herein made. If written demand for payment is made by Counterparty to Guarantor, such payment shall be paid to Counterparty within f ve (5} days foI lowing receipt of written demand therefor. The Guarantor shall be subrogated to all of Counterparty's rights against the Companies in respect of any amounts paid by the Guarantor pursuant to the provisions of this Guaranty. Notwithstanding the foregoing, Guarantor will. not exercise any rights which it may acquire by way of subrogation until alI the Obligations shall have been performed in full. No failure or delay on the ,part of Counterparty to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof., nor shall any single or partial exercise by Counterparty of any right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power. Each and. every right, remedy and power hereby granted to Counterparty or allowed it by law or othex agreement shall be cumulative and not exclusive of any other, and maybe exercised by Counterparty from time to time. fihe Guarantar may not assign its rights, interest or obligations hereunder to any other person without the prior written consent of the Counterparty and any purported assignment absent such consent is void. All notices or other communications given or required to be given hereunder shall be in writing at the addresses below either by certified mail with return receipt requested, in person, or by overnight courier service, each of which shall be effective upon receipt. The Guarantor's address for notices is as follows: Texas Competitive Electric Holdings Company f.LC Attention: Treasurer 1601 Bryan Street, 7ti' Floor Dallas, TX 75201-3411 59 ~cxlccuT~orr cony The Counterparty's address for notices is as follows: Cities Aggregation Power Project, Inc. Attention: Geoffrey M. Gay, General Counsel S 16 Congress, Suite 1900 Austin, TX 78701 . Guarantor and Counterparty may change its address for notices by giving notice to the other party in accordance with the provisions stated above. This Guaranty shall be governed by the laws of the State of Texas without regard to principles of conflicts of. laws. IN WITNESS WHEREOF, the Guarantor has caused two duly authorized representatives to execute and deliver this Guaranty. 'Texas Competitive Electric Moldings Company LLC Guarantor By: By: Reviewed Michael T. McCall, Executive Vice President Anthony Horton, Attorney-In-Fact Date b0 EXECV~TroN coPY EXHIBIT 6 I..,EGAL OPINION PROVISIONS With respect to each Seller, the .legal opinion shall include the following: 1. Each Seller is a limited liability company duly created, organized, and validly existing under the laws of the State of Texas, and is duly qualified. to ca~Ty on and conduct business in the State of Texas, with full power and authority to conduct, the business now being conducted by it, and to carry out and perform its obligations under the Agreement and the Intercreditor Agreement. 2. The Agreement and the Intercreditor Agreement constitute tl~e legal, valid and. binding obligations of each Seller, enforceable against each Seller in accordance with their terms; and the Agreement has been d.u.ly authorized, executed, and delivered by each Seller. 3. Each Seller has duly authorized the taking of any and all action necessary to execute, carry out, and give effect to the Agreement and the Intercreditor Agreement and the transactions contemplated thereby. 4. The execution and delivery of the Agreement and the Intercreditor Agreement and the performance by each Seller of its obligations thereunder, do not and will not ta} violate such Seller's organizational documents, (b) constitute a default under [agreements to be agreed upon by Seller and Buyer, but shall at least include the Credit Agreement and TCEH's Senior Notes indentures] or (c) violate in any material respect any court or administrative order or decree. 5. No approval, consent or other action by any governmental authority or agency is required in connection wifih fihe Agreement, other than those which have been previously given or taken. 6. The execution and delivery of the Agreement and the Intercreditor Agreement and the performance by each Seller of its obligations thereunder, do not and will not violate any federal law, state law, rule or regulation, as applicable. With xespect to TCEH, the legal opinion shall include the following: 1. TCEI~ .is a limited liability company duly created, organized, and validly existing under the laws of the State of Delaware, and. is duly qualified to carry on and conduct business in the State of Texas, with full power and authority to conduct the business now being conducted by it, and to carry out and perform its obligations under the Guarantee and the Intercreditor Agreement. 2. The Guarantee and the Intercreditor Agreement constitute legal, valid and binding obligations of TCEH, enforceable against TCEH in accordance with their terms; and. the Guarantee has been duly authorized, executed, and delivered by TCEH. 61 EXECUTIaN COPY 3. TCEH has duly authorized the taking of any and all action necessary to execute, carry out, and give effect to the Guarantee and the Intercreditor Agreement and the transactions contemplated thereby. 4. The execution and delivery of the Guarantee and the Intercreditor Agreement and the performance by TCEH of its obligations thereunder, do not and will not (a) violate TCEH's organizational documents, {b) constitute a default under [agreements to be agreed upon by Seller and Buyer, but shall at least include the Credit Agreement and TCEH's Senior Notes indentures] or {c) violate in any material respect any court or administrative order or decree. S. No approval, consent or other action by any governmental authority or agency is required in connection therewith, other than those which have been previously given or taken. 6. The execution and delivery of the Guarantee and the Intercreditor Agreement and the performance by TCEI i of its obligations thereunder, d.o not and will not violate any federal law, state law, rule or regulation, as applicable. 62 EXECUTIQN COPY INDEX 4F EXHIBITS Exhibit 1 Monthly Energy Prices) and Expected Monthly Quantities Exhibit 2 Reference Replacement Prices} and Yet-to-fie Determined Delivered Quantities in the event of an Early Termination Date Exhibit 3 Earned Portion of the Capacity Prepayment Exhibit 4 Accession Agreement Exhibit 5 Seller's form of Guaranty Exhibit b Legal opinion Provisions 63 MEMORANDUM TO: Members of Cities Aggregation Power Project, Inc. and South Texas Aggregation Power Project, Inc. FROM: Board of Directors, Cities Aggregation Power Project, Inc. ("CAPP") Board of Directors, South Texas Aggregation Power Project, Inc. ("STAP") DATE: September 10, 2008 SUBJECT: Risks and Considerations Disclosure to CAPP and STAP Members Potentially Participating in the Long Term Power Purchase Agreement -- MUST BE ACKNOWLEDGED BY EACH PARTICIPATING MEMBER This disclosure memorandum is intended to discuss some of the risks and considerations involved in (i) the proposed long term power purchase agreement ("PPA") between CAPP and Luminant Generation Company, LLC, Big Brown Power Company LLC and Oak Grove Management Company, LLC (collectively, "Seller") to provide electric capacity and energy to the members of CAPP who choose to participate in the financing of the PPA ("Participating Members") and (ii) the proposed CAPP- Participating Member Energy Sales Contract (the "Member Contract"), by which a Participating Member participates in the PPA. Such risks and considerations are not organized in any particular order of importance and each potential Participating Member must review and assess the whole of this memorandum. THIS MEMORANDUM IS NOT INTENDED TO PROVIDE A DETAILED EXPLANATION OF THE PPA MEMBER CONTRACT OR CAPP CONTRACT REVENUE BOND TRANSACTION OR TO PROVIDE AN ECONOMIC AND BUSINESS ANALYSIS OF SUCH TRANSACTION. THIS MEMORANDUM IS NOT, AND IS NOT INTENDED TO BE, A COMPLETE DISCUSSION OF ALL MATERIAL RISKS AND CONSIDERATIONS INVOLVED WITH THE PPA AND THE MEMBER CONTRACT. NO REPRESENTATION IS MADE BY CAPP, STAP OR THEIR RESPECTIVE LEGAL COUNSELS AND OTHER CONSULTANTS THAT ALL MATERIAL RISKS AND CONSIDERATIONS ARE DISCUSSED OR DESCRIBED IN THIS MEMORANDUM. Each potential Participating Member is advised to undertake its own assessment of the PPA, the Member Contract and the contemplated transactions described therein and herein. Copies of the most current forms of the PPA and the Member Contract are available from CAPP. In addition, this memorandum references certain external documents, reports and filings which CAPP will assist any potential Participating Member in obtaining; however, neither CAPP, STAP, their respective legal counsel and other consultants make any representation or warranty with respect to the information, statements or analysis contained in any such sources, as of the date of any such source or as of the date of this memorandum. RISKS AND CONSIDERATIONS PPA Seller's Leveraged Buyout and Security for. Seller's Obligations under PPA Seller's ultimate parent entity, Energy Future Holdings Company ("EFH"), Energy Future Competitive Holdings Company ("EFCH") and Texas Competitive Electric Holdings Company, LLC ("TCEH"), borrowed approximately $46 billion in October 2007 to privately purchase, through a leveraged buyout, the publicly traded TXU Corp. ("TXU"), formerly the largest electric utility holding company within ERCOT (the "EFH LBO"). Approximately $26 billion was borrowed from Citibank, N.A., Goldman Sachs Credit Partners L.P., J. Aron & Company, JPMorgan Chase Bank, N.A., Credit Suisse and other lenders and parties who were provided a first lien security interest in the assets (excluding assets related to Oncor Electric Delivery Company, LLC), Seller and the certain other TCEH affiliates and subsidiaries (collectively, "TCEH Pledged Entities"), including all generation assets formerly owned by TXU. Another approximately $20 billion was borrowed through unsecured debt of EFH and TCEH. EFH, TCEH and EFCH each have credit ratings below investment grade or "junk" ratings. For a more complete description of the EFH LBO, EFCH and the associated credit ratings, see the presentation entitled "Energy Future Holdings Post Merger Overview," dated January 7, 2008; the publicly available filings of EFH with the U.S. Securities and Exchange Commission (www.energyfutureholdings.com/financial/) (the "SEC Filings"); and the Standard and Poor's Ratings Service ("S&P") reports of July 15, 2008 and March 21, 2008 (to the extent not superseded by the July 15, 2008 report) relating to EFH and the S&P report of October 11, 2007 (to the extent not superseded by the July 15, 2008 and March 21, 2008 reports) relating to TCEH (collectively, the "S&P Reports"). As to the S&P Reports, such reports reflect only the view of S&P, and CAPP makes no representation as to the appropriateness of such reports. There is no assurance that any of the facts, views or opinions reflected therein will continue for any given period of time or that they will not be revised or withdrawn entirely by S&P, if in the judgment of S&P, circumstances so warrant. The first lien security interest of the secured lenders/parties are governed by the various documents related to the EFH LBO financing, including the Credit Agreement, the Intercreditor Agreement, the Security Agreement, the Guarantee and the Pledge Agreement as well as other documents (collectively, the "LBO Financing Documents"). The PPA provides, as it relates to CAPP's rights and security with Seller, as follows (for purposes of this paragraph, undefined capitalized terms will have the meanings set forth in the aforementioned Intercreditor Agreement): 1. The PPA is a Secured Commodity Hedge and Power Sales Agreement under the Intercreditor Agreement and, under the LBO Financing Documents, the PPA is a Secured Obligation having a first lien security interest in the pledged assets of the TCEH Pledged Entities pari passu (on equal footing) with the other secured lenders. Thus, CAPP will have a first lien on all pledged assets of the TCEH Pledged Entities including the Martin Lake, Big Brown and Oak Grove electric generation plants (the three electric generation facilities from which the unit contingent electric energy under the PPA are to be provided and collectively referred to as the "PPA Facilities") as well as Comanche Peak, the two unit nuclear electric generation plant near Glen Rose, Texas and other electric generating facilities owned by the TCEH Pledged Entities. 2. Each TCEH Pledged Entity has executed the Guarantee, guaranteeing the Secured Obligations of any other TCEH Pledged Entity, and such guarantee obligation is also a Secured Obligation. The PPA, as a Secured Obligation, is entitled to the benefits of the Guarantee. 3. The obligations of Seller under the PPA will be secured by an additional guaranty from TCEH. If Seller defaults under the PPA, LAPP would have a right to allege a default (under the LBO Financing Documents, e.g., the Credit Agreement) pursuant to the Intercreditor Agreement. (A payment default by Seller under the PPA is an event of default under the Credit Agreement to the extent such default exceeds $200 million; it is assumed that a Seller default under the PPA would exceed such amount through the term of the Credit Agreement of October 2014.) The Intercreditor Agreement provides, however, that it will be up to the Collateral Agent to declare a default. The Collateral Agent could be overruled or as the case may be, directed to initiate proceedings, by a majority of the secured lenders, but CAPP will likely have no real influence over such vote. If Seller defaults under the PPA, CAPP, it is assumed, may proceed against Seller, and against TCEH under its guaranty as an unsecured claim. The Credit Agreement provides certain protections to the various secured parties under the LBO Financing Documents, including CAPP, wherein the TCEH Pledged Entities have covenanted and agreed to certain borrowing and lien structure restrictions giving the secured parties (and permitted future secured parties) some degree of anti-dilution protection. Reference is made to Article 10 of the Credit Agreement for the various negative covenants of the TCEH Pledged Entities relating to future borrowings and lien structures. The remaining term of the Credit Agreement is approximately six (6) years and ends in October 2014. Therefore, prior to October 2014, the EFH LBO must be refinanced and the secured parties paid (or otherwise participate in such refinancing), with the exception of CAPP. CAPP, through the PPA, will be the sole secured party under the LBO Financing Documents whose agreement extends past October 2014 (the term of the PPA is through December 2032). TCEH has represented that, under the LBO Financing Documents, the TCEH Pledged Entities have an obligation to repay at least one percent (1 %) of the secured debt annually. It is not known how much additional debt the TCEH Pledged Entities may incur between now and 2014, and CAPP can make no assurances with respect thereto. If CAPP and Seller each meet their respective obligations under the PPA, the security provisions related to the Seller's obligations under the PPA should not be an issue, other than security to CAPP for Seller's future performance under the PPA. The security for the Seller's obligations under the PPA becomes critically important if Seller fails to perform under the PPA or otherwise defaults under the PPA. Article 9 of the PPA addresses the security for Seller's obligations under the PPA and reference is made to that article. Within Section 9.2 of the PPA, Seller may, in certain circumstances, substitute the pledged collateral with other collateral such as letters of credit, cash or a guaranty from an investment grade rated guarantor ("Substitute Collateral"). Additionally, Section 9.2 of the PPA provides for Seller to refinance the existing LBO Financing Documents and replace the existing collateral pursuant to a new financing package with new collateral ("New Collateral Refinancing") which permits some dilution from value of the security under the LBO Financing Documents existing immediately prior to such refinancing, and which provides CAPP with a first lien on equal footing with other lenders (subject to other liens which may be permitted by the documents related to the New Collateral Refinancing). Seller's Financial Strength and Resources through the Term of the PPA Fundamental to any decision to participate in the transactions contemplated in the PPA and the Member Contract is the financial viability of Seller and the TCEH Pledged Entities over the term of the PPA. While Seller's obligations under the PPA are secured by a first lien security interest in certain assets of the TCEH Pledged Entities, Seller's ability to meet its obligations under the PPA are dependent on its financial resources and viability to perform (as well as its willingness to do so). No assurances can be given regarding the financial strength or viability of Seller, TCEH or the other TCEH Pledged Entities or the ability of such entities to meet their obligations with respect to the PPA and the LBO Financing Documents. Limitation of Remedies; Damages Available under the PPA The PPA does not provide for the agreement to be enforced by specific performance against either party thereto (i.e., a court directing (i) Seller to meet their obligations to provide electric energy and capacity under the terms of the agreement or (ii) CAPP to accept and pay for electric energy under the terms of the agreement). To the extent a default is declared and such default is not cured, Seller and CAPP have limited remedies. It should be noted that if Seller fails to schedule energy for CAPP from the PPA Facilities when such facilities are available or to otherwise provide alternate energy, Seller is required to pay CAPP "liquidated damages" equal to the cost of any replacement energy acquired by CAPP to replace the electric energy withheld by Seller less the energy price as provided in the PPA ("Replacement Damages"); provided, however, Seller's withholding energy, for extended or repeated occasions, is a default under the PPA and LAPP may terminate the PPA in such an event. The PPA provides a similar provision if CAPP fails to take and pay for electric energy. CAPP is required to pay Seller "Resale Damages" equal to the positive difference, if any, between the energy price as provided in the PPA less the sales price realized by Seller selling such electric energy; provided, however, CAPP's failure to pay for such electric energy, for extended or repeated occasions, is a default under the PPA and Seller may terminate the PPA in such an event. As CAPP will have paid 3/5 of the total electric cost under the PPA as a capacity payment, CAPP believes it is a remote possibility that Resale Damages will ever occur. Seller and CAPP have also agreed on liquidated damages that do not reflect the actual economic loss of either party at the time of termination of the PPA as a result of a default. The amount of such liquidated damages is explained below. Upon a Seller default under the PPA and CAPP's election to terminate the PPA, the parties have agreed to liquidated damages through the payment of a Buyer Termination Payment (provided in Article 12 of the PPA and reference is made to such article). Liquidated damages, being the Buyer Termination Payment, is provided to be the amount equal to (i) the percentage of the principal amount of the outstanding CAPP contract revenue bonds from the initial capacity payment made to Seller under the PPA related to the total initial principal amount of the CAPP contract revenue Bonds (Seller is not responsible for any costs of issuance or reserve fund portions of the CAPP contract revenue bond issue) (such percentage amount is referred to as "Seller's Bond Portion"), (ii) plus the greater of (a) the "make whole premium" related to the Seller's Bond Portion or (b) CAPP's economic damages, capped at $120 million ratably declining over the term of the PPA and (iii) less the aggregate amount of any Replacement Damages paid by Seller to CAPP over (1) the immediately preceding three (3) year period prior to any New Collateral Refinancing or (2) the immediately preceding five (5) year period following a New Collateral Refinancing. Under the PPA, Seller has the ability to make termination of the agreement more likely by defaulting if it determines that it can enter a more economically advantageous transaction by paying CAPP the Buyer Termination Payment. Upon a CAPP default under the PPA (presumably related to unmitigated non- appropriations by Participating Members resulting in CAPP's inability to pay Seller for electric energy under the PPA) and Seller's election to terminate the PPA, the parties have agreed to liquidated damages through the payment of a Seller Termination Payment (provided in Article 12 of the PPA). Liquidated damages, being the Seller Termination Payment, is provided to be the amount equal to (i) Seller's economic damages, capped at $120 million ratably declining over the term of the PPA, (ii) plus the present value of unpaid New Governmental Charges (as defined below) for which LAPP is responsible, (iii) less the aggregate amount of any Resale Damages paid by CAPP to Seller over certain time periods in the PPA, and (iv) plus an amount equal to the unearned portion of the CAPP capacity payment to Seller, determined on a monthly straight line amortization (as opposed to the actual bond amortization schedule) over the term of the PPA. In such an event of CAPP default, CAPP would not be able to defease all of its contract revenue bonds and a portion of each Participating Member's capacity payments under the CAPP-Participating Member Contract will remain, even though such Participating Members will not receive any electric energy through the then terminated PPA. Value of Seller's First Lien Security Interest Assets CAPP is not aware of any asset valuation of the TCEH Pledged Entities' collateral undertaken with respect to the EFH LBO financing and there has been no current valuation relating to the PPA. CAPP cannot make any representation regarding the current or future value of collateral pledged under the LBO Financing Documents. Because the cost of electricity within ERCOT has historically been based on the cost of natural gas as a fuel source, it is assumed the value of the electric generation facilities comprising a substantial portion of the collateral pledged under the LBO Financing Documents, at any point in time, will depend heavily upon the price of natural gas and the assumptions related to the future prices of natural gas. Natural gas prices have been historically volatile and no prediction or estimate can be made regarding the future value of pledged collateral of the TCEH Pledged Entities. If the value of Seller's assets pledged as security under the PPA decreases, there is no requirement in the PPA for Seller to provide additional collateral to CAPP, and CAPP could experience the situation where the value of the collateral under the LBO Financing Documents is insufficient to cover the Secured Obligations under the LBO Financing Documents, including the PPA. If in the event of Bankruptcy, CAPP decides to terminate the PPA and collateral is insufficient to cover CAPP's security, CAPP would not be able to defease all of its contract revenue bonds and a portion of each Participating Member's capacity payments under the Member Contract will remain, even though such Participating Member will not receive any electric energy through the then terminated PPA. New Governmental Charges Under Article 20 of the PPA, CAPP and the Participating Members will be responsible for new governmental charges (taxes and required capital improvements at the PPA Facilities), which include the cost of potential carbon and green house gas remediation and taxes, assessments and other governmental impositions and compliance costs imposed on the PPA Facilities ("New Governmental Charges"). Certain taxes, such as income, employment and margin taxes are excluded. To the extent these charges are imposed on the PPA Facilities (all of which will be providing electricity to CAPP under the PPA), LAPP and the Participating Members will be responsible for a proportionate share of the cost of any such New Governmental Charges in excess of operating expenses of $100,000 annually or capital expenses greater than $1,000,000 over the term of the PPA. Such share of the PPA Facilities allocated to CAPP is approximately three percent (3%). To the extent these New Governmental Charges are imposed, the annual energy cost for which each Participating Member is responsible will increase to cover the proportionate share of such charges. In the event of a default by CAPP and the PPA's termination, part of the Seller Termination Payment CAPP will be required to pay will be an amount relating to New Governmental Charges. It is important to understand that a termination of the PPA under circumstances of a CAPP default may result in a substantial portion of the CAPP bonds remaining outstanding. In the event of a default by Seller and the PPA's termination, CAPP will not be responsible for any continuing New Governmental Charges. Risk of Non-Appropriation by Participating Members The capacity payment from CAPP to Seller under the PPA purchases the electric capacity associated with the contract electricity and is approximately 3/5 of the total cost of electricity under the agreement. The annual capacity charge paid by each Participating Member under the Member Contract will be used to support the CAPP contract revenue bonds. These annual capacity charges will be secured by a pledge of the Participating Member's ad valorem taxes, will be debt under State law and will not be subject to non-appropriation. The annual energy payment, that is the remaining approximately 2/5 of the total cost of electricity under the PPA, is not secured by taxes, but is subject to annual appropriation by each Participating Member. Under the PPA, CAPP is obligated to purchase electric energy on an annual basis and pay for such electric energy. Under the Member Contract, a Participating Member will make its annual determination whether to purchase such electric energy to which it is entitled (pursuant to its acquisition of a portion of the electricity rights CAPP has obtained under the PPA). This purchase is subject to annual appropriation and dependent on each Participating Member appropriating funds in its annual budget for its share of electric energy under the Member Contract. If a Participating Member fails to appropriate in any year, CAPP should have three options to either mitigate or eliminate the potential negative consequences of any such non-appropriation. CAPP presently believes its options include: (i) selling the available electric energy to other Participating Members (or the non-appropriating Participating Member assigning its rights to a willing and appropriating Participating Member); (ii) selling the electric energy into the ERCOT wholesale market through a series of short-term sales; or (iii) requesting Seller to resell the energy. It is anticipated that these options should effectively mitigate the risk of isolated non-appropriation of a small amount of CAPP's electric energy load (recognizing that only 2/5 of the electric energy's cost needs to be realized through such mitigating options). These mitigating options, however, only contemplate isolated non-appropriation by a small number of Participating Members. If non-appropriation occurs by a significant number of the Participating Members affecting a significant portion of CAPP's aggregated electric load under the PPA, such occurrence may result in CAPP defaulting under the PPA. The most likely reason for such wide scale non-appropriations would be that the cost of the electric energy portion under the PPA and the CAPP-Participating Member Contract is more than the then projected market price for electric energy for an extended period. In the event that CAPP defaults under the PPA as a result of the failure by some Participating Members to appropriate funds for the purchase of electricity, Seller may declare a default under the PPA and terminate the agreement. In such event, none of the Participating Members will receive electricity under the PPA, without regard to whether a particular member appropriated or non-appropriated for electric energy. Further, no Participating member will have a claim for damages against CAPP. If CAPP could not sell the electric energy, as described above, TCEH would have the ability to terminate the PPA and demand a Buyer Termination Payment from CAPP, as explained above in the section "PPA -Limitation of Remedies; Damages Available Under the PPA." This situation would leave the Participating Members with some portion of their debt under the CAPP Participating Member Contract remaining outstanding and the Participating Members would not receive any electric energy under the PPA. Defeasance of CAPP's Bonds Will Not Be Realized if Seller Defaults in Certain Events In the event of a Seller default, the Seller will only be responsible for the Seller Bond Portion and, at least the "make whole redemption premium" related thereto. Funds from a Buyer Termination Payment will only partially defease the CAPP contract revenue bonds -the portion of CAPP bonds issued relating to any reserve fund for the CAPP bonds or the portion issued to pay costs of issuance of the CAPP contract revenue bonds will remain outstanding. Under this scenario, the Participating Members could be in a situation where they are levying and collecting an ad valorem tax to make their capacity payment (debt service obligation) to CAPP under the CAPP-Participating Member Contract, although they may no longer be receiving any energy under the PPA. If this were to occur, there is the potential for Participating Members to collectively be responsible for up to approximately $12 million of CAPP's remaining contract revenue bonds. Seller has the ability to offset a portion of the Buyer Termination Payment under the PPA by paying Replacement Damages to CAPP when Seller fails to schedule energy from the units when such energy is available. Such Replacement Damages paid (1) the immediately preceding three (3) year period prior to any New Collateral Refinancing or (2) the immediately preceding five (5) year period following a New Collateral Refinancing will be subtracted from any Buyer Termination Payment owed by Seller. Seller receives a rolling three to five year credit for such Replacement Damages payment, while reducing the potential Buyer Termination Payment to LAPP. As TCEH~s credit ratings improve, a portion of the amount secured by the first lien security interest decreases in an amount equal to the Credit Threshold (as defined in the PPA). Therefore, if TCEH, as guarantor, were to become more credit-worthy and yet still declare bankruptcy and CAPP terminates the PPA, a portion of the Buyer Termination Payment due to CAPP (the make-whole price of CAPP's contract revenue bonds) will be an unsecured claim (i.e., not secured by the first lien security interest under the LBO Financing Documents) and CAPP will not have the benefit of the other secured creditors. While the Credit Threshold gives Seller an economic incentive to improve its financial integrity and thus reduce the financial risk to CAPP, it could also serve to expose CAPP to unsecured credit risk by reducing the amount of CAPP's first lien security. New Collateral Refinancinc~/Substitute Collateral As discussed earlier, CAPP cannot control or predict the future ownership or structure of Seller or the TCEH Pledged Entities. As the LBO Financing Documents expire in October 2014 and will likely be refinanced in some fashion (otherwise the PPA will have been terminated or otherwise secured by Substitute Collateral), no assurances can be given regarding the financing structure related to the New Collateral Refinancing, the value and nature of any related new collateral or the amount and nature of any related debt secured by such collateral. While provisions relating to Substitute Collateral seem to contemplate substitution that is applicable only to LAPP, the PPA does not specifically require such. The New Collateral Refinancing provision in the PPA, Section 9.2(b), provides that the EFH LBO and the LBO Financing Documents will be refinanced and collateral under the LBO Financing Documents may be replaced with "substantially similar" collateral (to the collateral existing immediately prior to such refinancing) on a continuing "pari passu" first lien basis with other lenders. The PPA provides, however, that such lien may be subject to other liens provided for in the documents related to the New Collateral Refinancing. The PPA provides that the collateral related to a New Collateral Refinancing shall be substantially similar in substance to the collateral existing immediately prior to such refinancing as reasonably determined by Seller in good faith. Further, collateral meeting prescribed dilution tests will be automatically deemed to be "substantially similar." While the dilution tests obligate Seller to maintain an asset valuation to debt ratio equivalent to the ratio in play today, it must be noted that the test functionally excludes swap and hedge transactions of TCEH Pledged Entities. Various TCEH Pledged Entities may continuously and actively engage in such transactions. With such swap and hedge transactions excluded, the protection provided to CAPP by the dilution test cannot be determined until a New Collateral Refinancing occurs. CAPP may be obligated to accept the New Collateral Refinancing securing Seller's obligations under the PPA that may be of less value than the collateral under the LBO Financing Documents immediately prior to such refinancing. Additionally, the TCEH guaranty of the Seller's obligations under the PPA is required to be in place for the entire term of the PPA and it is anticipated such guaranty will be secured by the collateral relating to the New Collateral Refinancing Substitute Collateral or other acceptable collateral. However, if such guaranty is not secured, CAPP has potential unsecured credit exposure to the extent CAPP must rely on such TCEH guaranty for payment of the PPA. Unit Contingent Nature of PPA; Extended Force Majeure May Prevent Realization of Economic Benefits Under the PPA, CAPP is entitled to a portion of the electric capacity from each plant comprising the PPA Facilities. Seller's obligation to provide such capacity and electric energy is conditioned on the respective PPA Facilities plants being capable of operating. To the extent there are planned outages or unplanned outages which constitute an event of Force Majeure under the PPA, Seller is not obligated to provide electric energy to CAPP from such affected plants. Sellers are required under the PPA (sections 6.3, 12 and 15.6) to operate and maintain the PPA Facilities according to Prudent Industry Practices, which includes all existing and future Laws. However, CAPP has not undertaken any examination or inspection of the PPA Facilities. If an event of Force Majeure occurs, such as the destruction of a portion of the PPA Facilities contracted for electric supply under the PPA, Seller is partially excused from performing under the PPA and the rights and obligations under the PPA will be suspended. The Participating Members would not be receiving a portion of the contract energy under the CAPP-Participating Member Contract since Seller is not required to provide electric energy to LAPP under the PPA, and CAPP and the Participating Members would have to find other sources of electric energy (including a "wrap" contract) in the event of an extended Force Majeure, while still being liable to pay for its portion of the capacity payment pursuant to the CAPP-Participating Member Contract. TCEH/Seller Bankruptcy If Seller files bankruptcy, this will not happen in a vacuum. It likely will be preceded by months of negotiation with threats of filing bankruptcy. There likely will be ample time to renegotiate the PPA if CAPP so desires. In the event of bankruptcy, the PPA will remain in effect unless it is specifically set aside. Electricity should continue to be provided by the facilities under contract. The risks of bankruptcy include: 1. Adequacy of collateral in the event of termination. The PPA contains an ipso facto clause providing that bankruptcy is a default, giving CAPP the right to terminate the agreement if it desires. The decision of whether to terminate would depend upon the value of assets and market prices for electricity at the time, neither of which can be predicted by CAPP. 2. Whether the PPA will be regarded as a forward contract or an executory agreement. The PPA specifies on its face that it is a "forward contract," but such statement does not bind a Bankruptcy Court. However, if the contract terms are not honored because the Court concludes the PPA is "executory," the likely result would be a renegotiated price closer to the then market rate. CAPP cannot predict what a future judge with broad discretion may rule. 3. The forum for bankruptcy may be Delaware, rather than Texas. TCEH is a Delaware corporation, but venue for pledged entities may be elsewhere. Competing courts will likely have to resolve a venue contest. 4. Whether the Court will apply a "business judgment" test (favoring Seller) or a "public interest" test (favoring CAPP). It is unknown whether courts would apply a heightened public interest standard for electrical energy supply to political subdivisions. Other Risks and Considerations There are other events or developments that could impact the transactions contemplated in the PPA and Member Contract including: • future regulatory changes, including actions of the State legislature, Public Utility Commission of Texas and ERCOT affecting the competitive electric utility industry; • future technological advances in electric generation and transmission such as development of new electric generation resources, including new nuclear power plants, higher efficiency coal and natural gas generation plants, high efficiency electric transmission and/or advances in alternative sources of electricity (wind, solar and etc.); • discovery of additional large scale natural gas reserves or the development of large scale liquefied natural gas ("LNG") facilities in the United States to utilize overseas LNG supplies and transportation facilities and/or a sustained long-term decrease of the price of natural gas; • future environmental regulation of coal-fired electric generation facilities generally could impact the transaction contemplated in the PPA, including New Governmental Charges; and • financial markets react to various factors that CAPP can neither predict nor control. Savings protections related to the PPA are dependent upon financing and debt issuance costs that in turn will be influenced by interest rates that will depend upon risk perceptions of financial markets. CAPP can offer no assurances regarding what rates will be applicable when debt is issued or ultimately repaid. MEMBER CONTRACT Effect on a Citv's Debt/Bondinp Capacit There is a possibility that the contract could have negative credit rating implications on Participating Members. General discussions with the various credit rating agencies have occurred and will continue taking place to inform them of the transaction so they can make educated credit rating decisions regarding the Participating Members. It is possible that the capacity payment (debt obligation) of the Participating Members under the Member Contract will adversely impact any given Participating Member's bonding capacity and credit rating by any or all of the rating agencies. Each rating agency will have questions and analysis regarding the structure and there has been no definitive answer regarding how each rating agency will view this obligation. It is possible that each rating agency may view this obligation differently. Subject to Annual Appropriation Obligation May Be Viewed as a General Obligation In the event of anon-appropriation by a Participating Member, rating agencies may view the provision of energy to a Participating Member's electric accounts as a governmental function. The Participating Member's failure to appropriate may be considered a default by one or more credit rating agency on the Participating Member's general obligation debt, regardless of the fact that a Participating Member has the choice to appropriate or not. Further risks regarding non-appropriation were addressed in section "PPA -Risk of Non-Appropriation by Participating Members" above. Obligation to Levy Ad Valorem Tax As discussed in prior sections above, the Member Contract obligates each Participating Member to pledge ad valorem taxes to pay for its portion of the capacity payment that CAPP is paying to Seller to acquire energy capacity over the 24 year term of the PPA. The capacity payment under the Member Contract is a debt of the Participating Member municipality which is subject to enforcement by a mandamus action brought by the trustee related to CAPP's contract revenue bonds against a Participating Member municipality to levy taxes sufficient within the limits prescribed by law to make such payments. - In the event of a termination of the PPA, there are a number of situations in which CAPP would not be able to defease all of its contract revenue bonds and a portion of each Participating Member's capacity payments under the CAPP-Participating Member Contract would remain, even though such Participating Member will not receive any electric energy through the then terminated PPA. Such situations are discussed above. Acknowledgment This Disclosure Memorandum dated September 10, 2008 is acknowledged and accepted by the undersigned on behalf of the Participating Member indicated below. The governing body of such Participating Member has taken official action acknowledging its understanding of the risks and considerations discussed or described in this Disclosure Memorandum and has formally authorized and directed the undersigned to execute this Disclosure Memorandum on behalf of the Participating Member. Participating Member By: Title: Date: CITY OF NORTH RICHLAND HILLS Department: Parks and Recreation Presented by: Vickie Loftice Council Meeting Date: 12-8-2008 Agenda No. F.3 Subject: GN 2008-120 Revise the 2008/09 Operating Budget for Repairs to the Ace Park Mural Over the past several months staff has been working with the insurance company to remedy the damage to the "I Luv New York" mural at Ace Park. The City's claim has been recently approved and staff is moving forward with the replacement process. The original cost of the mural was $20,000, a bargain given the scope of the project and the portfolio of the artist. Understanding the replacement value, staff insured the mural at $75,000. The cost to remedy the damage is $52,077. The City's insurance policy includes a provision of a $25,000 deductable per occurrence. Given the deductible, the total reimbursement from the insurance claim will be $27,077. The remaining amount is suggested to be funded through the Self Insurance Fund. Damage to the mural occurred on April 24t" by two young men kicking a soccer ball repeatedly into the mural. The 50 feet mural, comprised of 20 separate acrylic hand painted 4 feet x 5 feet panels cannot be returned to its original condition; however, the remedy will retain the artist's composition while protecting the mural from future vandalism and deterioration. While the damage to the mural is disappointing, minor vandalism has occurred to our public art inventory. The remedy provides for the 20 panels to be professionally photographed. Using these images, a digital design artist will Photoshop in the broken panel pieces using original photos of the mural. The digital photos will then be fabricated into 20 panels, ~/2" thick and made from phenolic resin (impenetrable plastic) with UV and anti-graffiti molded into the process. This is the same process used for the legacy signs at the parks and comes with a 30 year guarantee. The new panels will be installed at Ace Park and the original art work will be retained. The process will take approximately 16 weeks to complete. Funding for the $25,000 deductible can be provided by an appropriation of fund balance in the Self Insurance Fund. These funds will be transferred to the Park Development Fund, where the cost associated with this repair will be incurred. The total impact on the Self Insurance Fund will be an increase in both revenue and expenditures of $25,000. Upon transfer of the $25,000, revenue in the Park Development Fund will be increased. A reimbursement from TML in the amount of $16,662 was received during Fiscal Year 2008. These funds are proposed to be appropriated from fund balance within the Park Development Fund for use on this repair in Fiscal Year 2009. The balance of $10,415 will be reimbursed by TML upon completion of the project. The total impact on the Park Development Fund will be an increase in revenue of $52,077 and an increase in expenditures $52,077. Recommendation: Approve Revisions to the 2008/09 Operating Budget for Repairs to the Ace Park Mural. CITY OF NORTH R/CHLAND HILLS Department: City Secretary Presented by: Council Meeting Date: 12-8-2008 Agenda No. G.0 Subject: EXECUTIVE SESSION ITEMS No items for this category. CITY OF NORTH R/CHLAND HILLS Department: City Secretary Presented by: Council Meeting Date: 12-8-2008 Agenda No. H.0 Subject: INFORMATION AND REPORTS CITY OF NORTH R/CHLAND HILLS Department: City Secretary Presented by: Councilwoman Suzy Compton Subject: Announcements -Councilwoman Compton Announcements Council Meeting Date: 12-8-2008 Agenda No. H.1 Bring your pets and pose with Santa from 6:30 p.m. to 8:00 p.m. on Thursday, December 11, at the NRH Animal Adoption and Rescue Center. The cost is $7 and up, with proceeds benefiting the Shelter Fund. Dogs and cats must be currently vaccinated for rabies and wearing their tags. For more details, please call 817-427-6570. If the holiday season seems a bit overwhelming, the North Richland Hills Public Library can help. A free program on managing holiday stress will be presented in the Library Community Room at 7 p.m. on Thursday, December 18. For more information, contact the Reference Department at 817-427-6814. NRH2O's 2009 Season Passes are now on sale. Purchase your pass before December 24th and receive $10 off, plus an entertainment package including a souvenir bottle and free tickets for friends. For more information, please call 817-427-6500 or visit www.nrh2o.com. Kudos Korner Every Council Meeting, we spotlight our employees for the great things they do. Kevin Carrothers, NRH Public Library A comment card was recently received from a Library patron thanking Kevin for his help with a project. Kevin was resourceful and patient and took extra time to troubleshoot a problem. The patron appreciated Kevin's guidance and said it was a very rewarding experience to work with him. CITY OF NORTH R/CHLAND HILLS Department: City Secretary Presented by: Council Meeting Date: 12-8-2008 Agenda No. H.2 Subject: Adjournment