SETTLEMENT AGREEMENT
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THIS SETTLEMENT AGREEMENT is made as of the 9th day of March, 1994, between
Mountain Coal Company and Atlantic Richfield Company ("Plaintiffs") and Nevada
Power Company ("Defendant").
RECITALS
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1. The parties are engaged in litigation before the United States
District Court for the District of Utah (Civil No. 92-C-522-S)
concerning three coal supply agreements (the "1980 Agreement,
"the "1982 Agreement," and the "1985 Agreement") and one
agreement for loading services ("Loading Agreement") (the "Utah
Action");
2. The parties have agreed to compromise and settle their pending
disputes upon the terms set out below.
NOW, THEREFORE, Plaintiffs and Defendant agree in compromise and settlement
of their claims as follows:
1. Defendant shall pay Plaintiff ARCO $25,000,000 for coal not sold
under the 1985 Agreement from December 31, 1992, through the
expiration of the term of the 1985 Agreement, and for loading
services not performed under the Loading Agreement, according to
the terms of a promissory note annexed hereto as Exhibit A, which
note shall be executed by Defendant concurrently with execution
by Defendant of this Settlement Agreement.
2. Defendant shall pay Plaintiff ARCO $310,552 in satisfaction of
certain price adjustments for past deliveries under the 1985
Agreement, made over the period 1987-1991, which sum is included
in the annexed Promissory Note.
3. The parties shall cause their legal counsel to do the
following(except as may be required to preserve the pricing
approach approved by the court in Civil No. 92-C-522-S as
contained in paragraph 9 of its July 30, 1993, Order) within
ten (10) days of the date of this Agreement:
a. Defendant shall dismiss with prejudice its appeal pending
before the United States Court of Appeals for the Tenth
Circuit, Case No. 93-4165;
b. Defendant shall dismiss with prejudice all claims pending
against Plaintiffs in the Utah Action;
c. Plaintiffs shall dismiss with prejudice all claims pending
by Plaintiffs against Defendant in the Utah Action;
d. All parties shall dismiss the Utah action.
4. The parties specifically exclude from this Settlement Agreement
the retroactive adjustment amounts on the 1980 and 1982
Agreements as detailed in ARCO's letter of January 6, 1994, which
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amounts are subject to ongoing audit and possible adjustment.
The parties further understand that performance under these
Agreements is ongoing and that NPC has not completed its audits
for deliveries under these agreements for the years 1991 to date.
These audits will be completed in the ordinary course, using West
Elk actual costs as approved by the Court in Civil No. 92-C-522-S
in paragraph 9 of its July 30, 1993, Order.
5. The parties acknowledge and agree that the 1985 Agreement and
Loading Agreement are at an end as of midnight, December 31,
1992. The parties confirm and agree that the 1980 and 1982
Agreements are in full force and effect and that, apart from
price adjustments, including without limitation any applicable
retroactive adjustments as may be required thereunder: (1) no
party has any claim against the other under either the 1980 or
1982 Agreements, (2) no party is in default thereunder as of the
date hereof, and (3) except for possible retroactive adjustments
as described in paragraph 4 above, each party hereby releases any
and all claims, known or unknown, which each may have against the
other party based upon any action or inaction occurring prior to
the date of this Agreement arising out of or in consequence of
any of the three Coal Supply agreements or the Loading Services
Agreement.
6. Each party shall bear its own costs and attorneys' fees for or in
connection with this litigation.
7. This Settlement Agreement contains the entire agreement between
the parties respecting settlement of the disputes between them
and there exists no other covenant, representation or agreement
respecting the subject matter hereof between the parties.
NEVADA POWER COMPANY MOUNTAIN COAL COMPANY
By: David G. Barneby By: Anthony G. Fernandes
An Authorized Representative An Authorized Representative
Title: Vice President - Power Delivery Title: Chairman
Dated: March 11, 1994 Dated: March 9, 1994
ATLANTIC RICHFIELD COMPANY
By: Anthony G. Fernandes
An Authorized Representative
Title: Senior Vice President
Dated: March 9, 1994
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EXHIBIT A
PROMISSORY NOTE
Pursuant to a Settlement Agreement of even date herewith, Nevada Power
Company, a Nevada corporation ("Nevada Power"), for value received, hereby
promised to pay to the order of ATLANTIC RICHFIELD COMPANY, a Delaware
corporation ("ARCO"), or ARCO's assigns, the sum of Twenty-five Million three
Hundred Ten Thousand, Five Hundred Fifty-two Dollars ($25,310,552.00) in
immediately available funds on or before June 11, 1994, at 555 Seventeenth
Street, Suite 2100, Denver, Colorado 80202.
Payment shall be made without interest if made on or before the close of
business on the thirtieth day after execution of the Settlement Agreement by
Plaintiffs. If payment is made after the thirtieth day, interest shall be paid
at a rate of ten percent (10%) annually ($6,934.40 per day), calculated from
April 13, 1994.
If unpaid, in whole or in part, on June 11, 1994, Nevada Power agrees to
confess judgment in any court of competent jurisdiction which ARCO may choose,
in favor of ARCO and against Nevada Power with interest accruing on said sum as
from April 13, 1994, at the rate of Ten Percent (10%) per annum. Nevada Power
hereby consents to jurisdiction and venue in any such court.
Nevada Power hereby waives presentment for payment, demand, notice of
dishonor and protest of this promissory note.
This instrument shall be governed in all respects by the law of the State
of Utah.
Any expense incurred by ARCO in the collection of this note by suit or
otherwise, including, but not limited to, attorneys' fees and court costs, shall
be borne by Nevada Power.
NEVADA POWER COMPANY
By: David G. Barneby
An Authorized Representative
Dated: March 9, 1994