Document:

EXHIBIT 10.13(b)

 

EXECUTION VERSION

 

SECOND AMENDED AND RESTATED

 

NUCLEAR MANAGING BOARD AGREEMENT

 

AMONG

 

GEORGIA POWER COMPANY

 

OGLETHORPE POWER CORPORATION (AN ELECTRIC
MEMBERSHIP CORPORATION)

 

MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA

 

AND

 

CITY OF DALTON, GEORGIA

 

DATED AS OF APRIL 21, 2006

 

 

Table of Contents

 

	
   

  	
   

  	
  Page No.

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  1.0

  	
  Definitions

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  	
  14

  
	
   

  	
   

  	
   

  
	
  2.0

  	
  Nuclear Managing Board

  	
  14

  
	
   

  	
  2.1

  	
  Establishment and Members of the Nuclear Managing Board

  	
  14

  
	
   

  	
  2.2

  	
  Authority of the Nuclear Managing Board

  	
  15

  
	
   

  	
  2.3

  	
  Functions of the Nuclear Managing Board

  	
  15

  
	
   

  	
  2.4

  	
  Actions of the Nuclear Managing Board

  	
  19

  
	
   

  	
  2.5

  	
  Chairman of the Nuclear Managing Board

  	
  19

  
	
   

  	
  2.6

  	
  Duties of the Chairman of the Nuclear Managing Board

  	
  19

  
	
   

  	
  2.7

  	
  Minutes of Meetings

  	
  21

  
	
   

  	
  2.8

  	
  Expenses

  	
  22

  
	
   

  	
  2.9

  	
  Procedures

  	
  22

  
	
   

  	
  2.10

  	
  Attendees at Meetings

  	
  22

  
	
   

  	
  2.11

  	
  Delegation of Authority

  	
  22

  
	
   

  	
  2.12

  	
  Subcommittees

  	
  22

  
	
   

  	
  2.13

  	
  Special Meetings

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  3.0

  	
  Responsibilities of the Participants’ Agent

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  4.0

  	
  Strategic Plans and Budgets

  	
  24

  
	
   

  	
  4.1

  	
  Strategic Plans

  	
  25

  
	
   

  	
  4.2

  	
  Fuel Plan

  	
  28

  
	
   

  	
  4.3

  	
  Operation and Maintenance Budget

  	
  28

  
	
   

  	
  4.4

  	
  New Investment Budget

  	
  29

  
	
   

  	
  4.5

  	
  Fuel Budget

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  	
  30

  
	
   

  	
   

  	
   

  
	
  5.0

  	
  Information and Access

  	
  30

  
	
   

  	
  5.1

  	
  Information to Be Provided to the Participants

  	
  30

  
	
   

  	
  5.2

  	
  Input from Participants

  	
  37

  
	
   

  	
  5.3

  	
  Access to Each Plant

  	
  38

  
	
   

  	
  5.4

  	
  Management Audits

  	
  40

  
	
   

  	
  5.5

  	
  Cost Audits

  	
  41

  
	
   

  	
  5.6

  	
  Civil Penalties and Meetings

  	
  42

  
	
   

  	
  5.7

  	
  Notification of Claims

  	
  42

  

 

i

 

	
  ARTICLE VI

  	
   

  	
  42

  
	
   

  	
   

  	
   

  
	
  6.0

  	
  Recovery of Costs

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  	
  43

  
	
   

  	
   

  	
   

  
	
  7.0

  	
  Relation To Existing Agreements

  	
  43

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  	
  46

  
	
   

  	
   

  	
   

  
	
  8.0

  	
  Term, Termination, and Effective Date

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  	
  46

  
	
   

  	
   

  	
   

  
	
  9.0

  	
  Miscellaneous

  	
  46

  
	
   

  	
  9.1

  	
  Required Approvals

  	
  46

  
	
   

  	
  9.2

  	
  Further Assurances

  	
  46

  
	
   

  	
  9.3

  	
  Governing Law

  	
  46

  
	
   

  	
  9.4

  	
  Notice

  	
  46

  
	
   

  	
  9.5

  	
  Section Headings Not To Affect Meaning

  	
  48

  
	
   

  	
  9.6

  	
  Time of Essence

  	
  48

  
	
   

  	
  9.7

  	
  Amendments

  	
  48

  
	
   

  	
  9.8

  	
  Successors and Assigns

  	
  48

  
	
   

  	
  9.9

  	
  Counterparts

  	
  49

  
	
   

  	
  9.10

  	
  Computation of Percentage Undivided Ownership Interest

  	
  49

  
	
   

  	
  9.11

  	
  Several Agreements

  	
  49

  
	
   

  	
  9.12

  	
  Confidentiality

  	
  49

  
	
   

  	
  9.13

  	
  Effect on Joint Committee Agreement

  	
  52

  
	
   

  	
  9.14

  	
  Dispute Resolution

  	
  52

  
	
   

  	
  9.15

  	
  Accounting Methodology

  	
  57

  
	
   

  	
  9.16

  	
  Remedies

  	
  58

  
	
   

  	
  9.17

  	
  Operating Agent Authority

  	
  59

  
	
   

  	
  9.18

  	
  Amended and Restated Nuclear Managing Board Agreement Superseded

  	
  59

  

 

ii

 

SECOND AMENDED AND RESTATED

NUCLEAR MANAGING BOARD AGREEMENT

FOR

PLANT HATCH AND PLANT VOGTLE

 

THIS SECOND AMENDED AND RESTATED NUCLEAR MANAGING BOARD AGREEMENT FOR
PLANT HATCH AND PLANT VOGTLE is made and entered into as of April 21, 2006
(“Effective Date”), among GEORGIA POWER COMPANY, a corporation organized and
existing under the laws of the State of Georgia; OGLETHORPE POWER CORPORATION
(AN ELECTRIC MEMBERSHIP CORPORATION), an electric membership corporation
organized and existing under the laws of the State of Georgia; the MUNICIPAL
ELECTRIC AUTHORITY OF GEORGIA, a public corporation and an instrumentality of
the State of Georgia; and the CITY OF DALTON, a municipal political subdivision
of the State of Georgia, acting by and through its Board of Water, Light and
Sinking Fund Commissioners (hereinafter collectively called the “Participants”
and individually sometimes called “Participant”).

 

W I T N E S S E T H:

 

WHEREAS, the Participants have previously entered into the
Participation Agreements concerning Plant Hatch and Plant Vogtle, pursuant to
which OPC, MEAG and Dalton have appointed GPC as their agent in connection with
the planning, licensing, design, construction, acquisition, completion,
startup, commissioning, management, control, operation, maintenance, renewal,
addition, replacement and decommissioning for Plant Hatch and Plant Vogtle
(hereinafter the “Agency Functions”); and

 

WHEREAS, the Participants have also previously entered into the Joint
Committee Agreement, dated as of August 27, 1976, for the purpose of
establishing a Joint Committee to

 

1

 

coordinate steps taken to implement and administer the agreements
identified in Attachment A to the Joint Committee Agreement including, among
others, the Participation Agreements; and

 

WHEREAS, the Participants have also previously entered into the Nuclear
Managing Board Agreement, dated as of November 12, 1990, which among other
things established a Nuclear Managing Board to coordinate the implementation
and administration of the Participation Agreements in lieu of the Joint
Committee; and

 

WHEREAS, the Participants replaced the Nuclear Managing Board Agreement
with the Amended and Restated Nuclear Managing Board Agreement in order to
institute Southern Nuclear as the Operating Agent, for GPC to enter into the
Nuclear Operating Agreement and to provide that the Nuclear Managing Board
shall have the authority to administer the Nuclear Operating Agreement in the
manner hereinafter set forth; and

 

WHEREAS, the Participants have entered into that certain Plant Vogtle
Owners Agreement Authorizing Development, Construction, Licensing and Operation
of Additional Generating Units dated as of May 13, 2005, as amended (the “Development
Agreement”), whereby the Participants authorized GPC (as Agent) to undertake
certain development activities on their behalf and made certain other consents and
grants with regard to the development, licensing, engineering, construction,
operation and maintenance of the Additional Units, among other things; and

 

WHEREAS, pursuant to Section 1.6 of the Development Agreement, the
Participants agreed to negotiate in good faith Definitive Agreements (as
defined in the Amended and Restated Operating Agreement), including this
Agreement; and

 

2

 

WHEREAS, the Participants now desire to enter into this Second Amended
and Restated Nuclear Managing Board Agreement in order to amend and restate the
Amended and Restated Nuclear Managing Board Agreement in its entirety as set
forth herein.

 

NOW THEREFORE, in consideration of the premises and the mutual
undertakings stated herein, the parties hereto intending to be legally bound do
hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

1.0                                 Definitions.
As used herein, the following terms and phrases shall have, respectively, the
following meanings:

 

1.1                                 “Accounting
Services Committee” means the subcommittee designated pursuant to Section 2.12.1
of this Agreement that shall report to the Nuclear Managing Board as described
in such Section.

 

1.2                                 “Additional
Unit” and “Additional Units” have the meaning given such terms in the
Additional Units Ownership Agreement.

 

1.3                                 “Additional
Units Ownership Agreement” means the Alvin W. Vogtle Additional Units Ownership
Participation Agreement among GPC, OPC, MEAG and Dalton dated April 21,
2006.

 

1.4                                 “Affiliate”
of any specified entity, means any other entity directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified entity. For purposes of this definition, “control” when used
with respect to any entity means the power to direct the management and the
policies of such entity, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

 

3

 

1.5                                 “Agency
Functions” means the functions of the Participants’ Agent described in the
first recital of this Agreement.

 

1.6                                 “Agreement”
means this Second Amended and Restated Nuclear Managing Board Agreement unless
the text clearly indicates otherwise.

 

1.7                                 “Amended
and Restated Operating Agreement” means the Plant Alvin W. Vogtle Nuclear Units
Amended and Restated Operating Agreement among GPC, OPC, MEAG and Dalton dated
as of April 21, 2006.

 

1.8                                 “Billing
Dispute” has the meaning given such term in the Additional Units Ownership
Agreement or the Amended and Restated Operating Agreement, as applicable.

 

1.9                                 “Dalton”
means the City of Dalton, Georgia, acting by and through its Board of Water,
Light and Sinking Fund Commissioners, and its respective successors and
assignees.

 

1.10                           “Designated
Representative” means the representative designated by a Participant to be its “Designated
Representative” for the purposes of coordinating inquiries of the Operating
Agent pursuant to Section 5.1 of this Agreement and Section 3.3 of
the Nuclear Operating Agreement and the representative of the Operating Agent
designated to respond to such inquiries. When this Agreement or the Nuclear
Operating Agreement provides that the supply of information or any request for
information is to be through a Designated Representative, the Operating Agent
or any Participant, as applicable, may identify a particular employee to
serve as its Designated Representative for any particular category of
information where the location or specialized nature of the information makes
reliance on a specialized delegate more efficient than relying on the primary
Designated Representative, and any such employee so designated shall be deemed
the Designated Representative for such purposes. In addition, when this
Agreement or the Nuclear Operating Agreement specifies that a Designated
Representative is to

 

4

 

have electronic access to information or is to be provided with reports
or other information, each Participant may identify a reasonable number of
employees to have such access (subject to the access requirements of this
Agreement and the Nuclear Operating Agreement) or to be provided with such
reports or other information, and any employees so designated shall be deemed
Designated Representatives for such purposes. If the Operating Agent or any
Participant reasonably finds it cumbersome or impractical to recognize such a
delegate or delegates, or determines there are an excessive number of delegates
for purposes of providing or receiving the information in question, then such
party’s Designated Representative may raise an objection to the
delegation(s) to the other party’s Designated Representative. If the Designated
Representatives of the affected Participant and Operating Agent are unable to
reach a mutually satisfactory resolution within thirty (30) days, the Operating
Agent or the affected Participant may submit the dispute for resolution
pursuant to the dispute resolution process set forth in Section 9.14.

 

1.11                           “Development
Agreement” has the meaning given such term in the recitals to this Agreement.

 

1.12                           “Each
Plant” means and refers to, as applicable, (a) Plant Hatch, provided
that should activities or actions concerning Plant Hatch be undertaken with
respect to one or more units of Plant Hatch individually, the phrase Each Plant
shall mean and refer to that unit and related facilities, equipment, inventory
and common facilities; (b) the Existing Units and related facilities,
equipment, inventory and common facilities, provided that should
activities or actions be undertaken with respect to one of the Existing Units
individually, the phrase Each Plant shall mean and refer to that unit and
related facilities, equipment, inventory and common facilities; and (c) the
Additional Units and related facilities, equipment, inventory and common
facilities,

 

5

 

provided that should activities or actions be
undertaken with respect to one of the Additional Units individually, the phrase
Each Plant shall mean and refer to that unit and related facilities, equipment,
inventory and common facilities.

 

1.13                           “Existing
Units” means Vogtle Unit No. 1 and Vogtle Unit No. 2, as defined in
the Existing Units Ownership Agreement.

 

1.14                           “Existing
Units Ownership Agreement” consists of The Alvin W. Vogtle Nuclear Units
Numbers One and Two Purchase and Ownership Participation Agreement among GPC,
OPC, MEAG, and Dalton, dated August 27, 1976, as amended January 18,
1977 and February 24, 1977, and a Purchase, Amendment, Assignment and
Assumption agreement between GPC and MEAG dated April 9, 1985 as amended.

 

1.15                           “Fuel
Budget” means the budget described in Section 4.5 hereof.

 

1.16                           “Fuel
Plan” means the plan described in Section 4.2 hereof.

 

1.17                           “Fuel
Services” means work related to supplying and managing the nuclear fuel for
Each Plant including, without limitation, planning, procurement, contract
administration, fuel cycle design, fuel core and assembly design, fuel quality
assurance, nuclear materials management and all activities relating to
procurement, conversion, enrichment, fabrication, transportation, installation,
monitoring, repairing, storage, reprocessing and disposal of uranium, nuclear
fuel, related materials and waste products.

 

1.18                           “Governmental
Authority” means any local, state, regional or federal legislative, regulatory,
administrative, legal, judicial, or executive agency, commission, department or
other entity, and any person acting on behalf of any such entity.

 

1.19                           “GPC”
means Georgia Power Company, a corporation organized and existing under the
laws of the State of Georgia, and its successors and assigns.

 

6

 

1.20                           “Joint
Committee Agreement” means the Joint Committee Agreement among GPC, OPC, MEAG
and Dalton, dated as of August 27, 1976, as amended.

 

1.21                           “Legal
Requirements” means all laws, codes, ordinances, orders, judgments, decrees,
injunctions, licenses, rules, permits, approvals, written agreements,
regulations and requirements of or issued by every Governmental Authority
having jurisdiction over the matter in question, whether federal, regional,
state or local, which may be applicable to the Operating Agent or any of
the Participants, or to Plant Hatch or Plant Vogtle or any of the real or
personal property comprising Plant Hatch or Plant Vogtle, or the Nuclear
Operating Services or the use, occupancy, possession, operation, maintenance,
construction, decommissioning, acquisition, installation, alteration,
replacement, reconstruction or disposal of Each Plant or any part thereof.

 

1.22                           “Major
Contract” means (i) any contract for the procurement of a firm supply
(excluding any options) of natural or enriched uranium (U3O8
or UF6) from foreign or domestic sources over a term of greater than
five years and in an aggregate amount of greater than $50 million, (ii) any
contract for the procurement from domestic or foreign sources of uranium
enrichment services or fuel fabrication services (which may or may not
include fuel core design services) over a term of greater than five years and
in an aggregate amount of greater than $50 million, (iii) any contract for
the procurement of major items of equipment (e.g., steam generators or reactor
coolant pumps) in an amount of greater than $30 million for any single item of
equipment, (iv) any contract for the procurement of outage services over a
term of greater than five years and in an aggregate amount of greater than $50
million, or (v) any contract which will require the expenditure by
Southern Nuclear (including any charges associated with a termination of such
contract by Southern Nuclear without cause) in an amount of $50 million in any
one year or an aggregate amount of $100 million; provided, however, that if any
contract

 

7

 

permits the Operating Agent to cancel such contract on less than one
year’s advance notice, and the Operating Agent is not obligated to pay a fee or
charge for the exercise of such cancellation alone, then the term of such
contract for purposes of determining whether such contract is a Major Contract
shall be the minimum term which could result if the Operating Agent were to
exercise such cancellation right.

 

1.23                           “MEAG”
means the Municipal Electric Authority of Georgia, a public corporation and an
instrumentality of the State of Georgia, and its successors and assigns.

 

1.24                           “New
Investment Budget” means the budget described in Section 4.4 hereof.

 

1.25                           “New
Investment Services” means work undertaken with respect to Each Plant that
relates to the planning, design, licensing, acquisition, construction,
completion, renewal, improvement, addition, replacement, repair, enlargement or
modification of any Unit of Property as described in the Retirement Unit Manual
of the Southern Electric System, including any amendments thereof as may from
time to time be appropriate or necessary to comply with Legal Requirements,
under circumstances where expenditures for such work are to be capitalized in
accordance with the Electric Plant Instructions of the Uniform System of
Accounts prescribed for Class A and B Public Utilities and Licensees by
the Federal Energy Regulatory Commission.

 

1.26                           “NRC”
means the United States Nuclear Regulatory Commission or any successor agency
authorized to regulate and license utilization facilities pursuant to the
Atomic Energy Act of 1954 as amended.

 

1.27                           “Nuclear
Interface Procedure” has the meaning assigned in Section 2.5 of the
Nuclear Operating Agreement.

 

1.28                           “Nuclear
Managing Board” means the board established pursuant to Section 2.1 of
this Agreement.

 

8

 

1.29                           “Nuclear
Operating Agreement” means that certain Amended and Restated Nuclear Operating
Agreement Between Georgia Power Company and Southern Nuclear Operating Company, Inc.,
dated as of April 21, 2006, for the procurement of Nuclear Operating
Services for the operation and maintenance of Plant Hatch, the Existing Units
and Additional Units as it may be amended from time to time.

 

1.30                           “Nuclear
Operating Services” means New Investment Services, Fuel Services, and Operation
and Maintenance Services with respect to Each Plant.

 

1.31                           “OPC”
means Oglethorpe Power Corporation (An Electric Membership Corporation), an
electric membership corporation organized and existing under the laws of the
State of Georgia formerly known as Oglethorpe Electric Membership Corporation,
and its successors and assigns.

 

1.32                           “Operating
Agent” means the entity licensed by the NRC to operate and maintain Each Plant.
As of the Effective Date, Southern Nuclear is the Operating Agent hereunder.

 

1.33                           “Operation
and Maintenance Budget” means the budget described in Section 4.3 hereof.

 

1.34                           “Operation
and Maintenance Services” means work for the Participants relating to the
possession, management, control, start up, operation, availability, production
of energy, maintenance, modification, shutdown, retirements, and
decommissioning, including, but not limited to, any planning, design,
engineering, labor, procurement of materials and supplies, materials
management, quality assurance, training, security, environmental protection,
and handling of any source material, special nuclear material or by-product
material together with maintaining or obtaining licenses and regulatory
approvals related thereto, governmental affairs or regulatory relationships,
and all other activity that is not included in or performed as New

 

9

 

Investment Services or Fuel Services, but which is required for the
operation and maintenance of Each Plant or that may be required to comply
with Legal Requirements.

 

1.35                           “Operational
Information” has the meaning given such term in Section 5.1 hereof.

 

1.36                           “Ownership
Agreements” means the Existing Units Ownership Agreement and the Additional
Units Ownership Agreement.

 

1.37                           “Participant”
or “Participants” means with respect to Each Plant, any, some or all of the
parties to this Agreement owning an Undivided Ownership Interest in such plant.

 

1.38                           “Participating
Parties” means the Participants having an Undivided Ownership Interest in
either or both of the Additional Units.

 

1.39                           “Participants’
Agent” means GPC acting on its own behalf and as agent for the other
Participants in accordance with the Participation Agreements, or any successor
to that role appointed pursuant to the applicable Participation Agreements.

 

1.40                           “Participation
Agreements” means the following construction, purchase and ownership, and
operating contracts concerning Plant Hatch and Plant Vogtle:

 

The Edwin I. Hatch Nuclear Plant Purchase and
Ownership Participation Agreement between GPC and OPC, dated as of January 6,
1975, as heretofore or hereafter amended;

 

The Edwin I. Hatch Nuclear Plant Agreement of
Construction between GPC and MEAG, dated as of August 27, 1976, as
heretofore or hereafter amended;

 

The Edwin I. Hatch Nuclear Plant Purchase and
Ownership Participation Agreement between GPC and MEAG, dated August 27,
1976;

 

The Edwin I. Hatch Nuclear Plant Purchase and
Ownership Participation Agreement, dated as of August 27, 1976, between
GPC and Dalton, as heretofore or hereafter amended;

 

The Edwin I. Hatch Nuclear Plant Agreement of
Construction, dated as of August 27, 1976, between GPC and Dalton, as
heretofore or hereafter amended;

 

10

 

The Alvin W. Vogtle Nuclear Units Numbers One
and Two Purchase and Ownership Participation Agreement among GPC, OPC, MEAG and
Dalton, dated as of August 27, 1976, as heretofore or hereafter amended;

 

The Alvin W. Vogtle Nuclear Units Numbers One
and Two Purchase, Amendment, Assignment and Assumption Agreement between GPC
and MEAG, dated as of November 16, 1983, as amended by Amendment Number
One thereto dated as of April 9, 1985 as heretofore or hereafter amended;

 

The Plant Vogtle Owners Agreement Authorizing
Development, Construction, Licensing and Operation of Additional Generating
Units among GPC, OPC, MEAG and Dalton, dated as of May 12, 2005;

 

The Alvin W. Vogtle Additional Units Ownership
Participation Agreement between GPC, OPC, MEAG and Dalton, dated as of April 21,
2006, as heretofore or hereafter amended;

 

The Edwin I. Hatch Nuclear Plant Operating
Agreement between GPC and OPC, dated as of January 6, 1975, as heretofore
or hereafter amended;

 

The Edwin I. Hatch Nuclear Plant Operating
Agreement between GPC and Dalton, dated as of August 27, 1976, as
heretofore or hereafter amended;

 

The Edwin I. Hatch Nuclear Plant Operating
Agreement between GPC and MEAG, dated as of August 27, 1976, as heretofore
or hereafter amended; and

 

The Alvin W. Vogtle Nuclear Units Amended and
Restated Operating Agreement, dated as of April 21, 2006, among GPC, OPC,
MEAG and Dalton as heretofore or hereafter amended.

 

1.41                           “Plant
Hatch” means the Edwin I. Hatch Nuclear Plant, Units 1 and 2, as described more
fully in paragraph one and Exhibits B1 and B2 of that certain Edwin I. Hatch
Nuclear Plant Purchase and Ownership Participation Agreement between Oglethorpe
and GPC dated as of January 6, 1975.

 

1.42                           “Plant
Vogtle” has the meaning given such term in the Amended and Restated Operating
Agreement.

 

1.43                           “Plant
Vogtle Cost Allocation Procedures” or “Cost Allocation Procedures” means the
methods and procedures for tracking and allocating costs at Plant Vogtle in

 

11

 

accordance with the standards set forth in Section 5.0 of the
Development Agreement, as the same may be revised.

 

1.44                           “Prudent
Utility Practice” means at a particular time any of the practices, methods and
acts engaged in or approved by a significant portion of the electric utility
industry prior to such time, or any of the practices, methods and acts which,
in the exercise of reasonable judgment in light of the facts known at the time
the decision was made, could have been expected to accomplish the desired
result at the lowest reasonable cost consistent with good business practices,
reliability, safety and expedition. “Prudent Utility Practice” is not intended
to be limited to the optimum practice, method or act to the exclusion of all
others, but rather to be a spectrum of possible practices, methods or acts
having due regard for, among other things, manufacturers’ warranties and the
requirements of governmental agencies of competent jurisdiction.

 

1.45                           “Requisite
Owner Action” means, except as otherwise provided in Section 9.10 hereof, (a) with
respect to Plant Hatch or the Existing Units, the written approval or
disapproval, as the case may be, by those Participants which collectively
own Undivided Ownership Interests in Plant Hatch or the Existing Units, as
applicable, in the aggregate proportion of not less than eighty-five percent
(85%); and (b) with respect to the Additional Units, the written approval
or disapproval, as the case may be, by those Participants which
collectively own a Weighted Ownership Interest in the Additional Units (as
defined in the Additional Units Ownership Agreement) in the aggregate
proportion of not less than ninety percent (90%) provided, however, that as to
any activities or actions undertaken with respect to only one of the Additional
Units or any facilities, equipment, or inventory relating solely to one of the
Additional Units, then “Requisite Owner Action” shall mean the written approval
or disapproval, as the case may be, by

 

12

 

those Participants which collectively own an Undivided Ownership
Interest in such Additional Unit in the aggregate proportion of not less than
ninety percent (90%). In each case, such written approval or disapproval may be
signified by the signatures of the members of the Nuclear Managing Board who
represent such Participants and are not precluded in participating or taking
action pursuant to Section 9.10 hereof to any resolution or motion acted
upon by the Nuclear Managing Board pursuant to Section 2, or by approval
of the minutes of any Nuclear Managing Board meeting. The failure to obtain any
approval by Requisite Owner Action in any instance where such approval is
required by the terms of this Agreement shall constitute disapproval.

 

1.46                           “Services
Plan” has the meaning assigned in Section 2.5 of the Nuclear Operating
Agreement.

 

1.47                           “Southern
Electric System” means the electric utility operating company subsidiaries of
The Southern Company and Southern Services, collectively.

 

1.48                           “Southern
Nuclear” means Southern Nuclear Operating Company, Inc., a corporation,
organized and existing under the laws of the State of Delaware, and its
successors and assigns.

 

1.49                           “Southern
Services” means Southern Company Services, Inc., a corporation organized
and existing under the laws of the State of Alabama, and its successors and
assigns.

 

1.50                           “Strategic
Plan” means the plan containing the information described in Section 4.1
hereof.

 

1.51                           “The
Southern Company” means The Southern Company, a corporation organized and
existing under the laws of the State of Delaware, the subsidiaries of which
include, but are not limited to, GPC, Southern Nuclear and Southern Services.

 

13

 

1.52                           “Undivided
Ownership Interest” means the interest each Participant owns as a tenant in
common with the other Participants in Each Plant. As of the Effective Date, the
Undivided Ownership Interest of each of the Participants in Plant Hatch and the
Existing Units is as follows:

 

	
  Participant

  	
   

  	
  Plant Hatch

  	
   

  	
  Existing Units

  	
   

  
	
  GPC

  	
   

  	
   

  	
  50.1

  	
  %

  	
  45.7

  	
  %

  
	
  OPC

  	
   

  	
   

  	
  30.0

  	
  %

  	
  30.0

  	
  %

  
	
  MEAG

  	
   

  	
   

  	
  17.7

  	
  %

  	
  22.7

  	
  %

  
	
  Dalton

  	
   

  	
   

  	
  2.2

  	
  %

  	
  1.6

  	
  %

  

 

The Undivided Ownership Interest, if any, of each of the Participants
in the Additional Units will be the Weighted Ownership Interest in the
Additional Units (as defined in the Additional Units Ownership Agreement)
determined from time to time as set forth in the Additional Units Ownership
Agreement and the Development Agreement. The Undivided Ownership Interest, if
any, of each of the Participants in an Additional Unit will be the Ownership
Interest (as defined in the Additional Units Ownership Agreement) in such
Additional Unit determined from time to time as set forth in the Additional
Units Ownership Agreement and the Development Agreement.

 

ARTICLE II

 

2.0                                 Nuclear
Managing Board.

 

2.1                                 Establishment
and Members of the Nuclear Managing Board. There has been established a
Nuclear Managing Board, which consists of a member and an alternate designated
by each Participant. As of the effective date of this Agreement, the Nuclear
Managing Board shall have the authorities, powers, and functions hereinafter
provided. Each Participant having given written notice of its designated member
and alternate to all other Participants, each

 

14

 

Participant may change its designated member or alternate
effective upon delivery of written notice of such change to the other
Participants.

 

Each member of the Nuclear Managing Board shall be authorized to
represent the Participant which appointed him or her and shall have the
authority to obligate such Participant as hereinafter provided or as may otherwise
be granted by such Participant in writing, a copy of which writing shall be
furnished to all other members of the Nuclear Managing Board. In the event any
member of the Nuclear Managing Board is unable to attend any meeting of the
Nuclear Managing Board, the designated alternate for such member shall have the
full power and authority of such member to act for and obligate the Participant
which such member represents.

 

2.2                                 Authority
of the Nuclear Managing Board. The Nuclear Managing Board shall have all
authority and power necessary to perform the functions delegated to it by Section 2.3
hereof and any other authority explicitly delegated to it by this Agreement. Such
authority shall be exercised by the Nuclear Managing Board in the manner as
hereinafter provided in this Agreement.

 

2.3                                 Functions
of the Nuclear Managing Board. The Nuclear Managing Board shall perform the
following functions:

 

2.3.1                        Implement and administer the
Participation Agreements in accordance with the terms of such agreements,
respectively.

 

2.3.2                        Administer the Nuclear
Operating Agreement, which the Nuclear Managing Board has approved. Approve by
Requisite Owner Action i) any amendment of such agreement and any other
contract between the Participants’ Agent and Southern Nuclear whereby Southern
Nuclear performs Nuclear Operating Services for and on behalf of the
Participants’ Agent and all changes to any such contract, and ii) a consent by

 

15

 

the Participants’ Agent to any assignment made pursuant to Section 11.3
of the Nuclear Operating Agreement; provided that approval of any of the
foregoing which is necessary to comply with Legal Requirements shall not be
unreasonably withheld.

 

2.3.3                        Review and provide input to the
Operating Agent prior to execution of (and the Participants may audit from
time to time pursuant to Section 5.4 hereof) any of the following
agreements and any amendments thereof, provided that the Operating Agent shall
have full authority to execute such agreements or amendments in its sole
discretion after giving consideration to any comments of the Nuclear Managing
Board or any member thereof:

 

2.3.3.1               All Services Plans between Southern
Nuclear and the Participants’ Agent;

 

2.3.3.2               Except as to any agreement for which
Nuclear Managing Board approval is required hereunder, any agreement between
Southern Nuclear and any Affiliate entered into after the effective date of the
Nuclear Operating Agreement. Southern Nuclear shall give timely notice to each
Participant of the initiation of any proceeding before any Governmental
Authority having jurisdiction for the purpose of reviewing amendments to
existing contracts or any new contract between Southern Nuclear and any of its
Affiliates and shall not contest the standing of any Participant to intervene
in any such proceeding.

 

2.3.4                        Approve by Requisite Owner
Action the following actions or functions of the Operating Agent.

 

2.3.4.1               The execution of any Major Contract;
provided, however, that if approval by Requisite Owner Action is not obtained
after any such Major

 

16

 

Contract has been submitted to the Nuclear Managing Board, then any
Participant may request that such Major Contract be submitted to the chief
executive officers (CEOs) of the Participants for resolution by Requisite Owner
Action.

 

2.3.4.2               The taking of any action by the
Operating Agent with respect to the sale, lease or disposal of any real or
personal property owned individually or jointly by any or all of the
Participants; provided, however, that Nuclear Managing Board approval shall not
be required before the Operating Agent takes any action to replace any
facilities, equipment or materials with facilities, equipment or materials, as
the case may be, of like kind and of value at least equal to that of the
replaced facilities, equipment or materials; and provided further that this Section 2.3.4.2
shall not apply to actions taken pursuant to (a) NRC regulations
respecting decommissioning (i.e., 10 C.F.R. §§ 50.75 or 50.82, or any
successor regulations thereto), or (b) a decision to retire either or both
units of Each Plant made in accordance with the Participation Agreements. Nothing
in this Section 2.3.4.2 shall be construed as an authorization by the
Nuclear Managing Board for the Operating Agent to take any action inconsistent
with plans and budgets adopted in accordance with Article IV hereof.

 

2.3.5                        Conduct or undertake such
studies, investigations or audits which the Nuclear Managing Board determines
are appropriate or useful in carrying out its responsibilities or functions. The
Nuclear Managing Board may employ independent consultants or utilize the
personnel or other resources of any Participant or the Operating Agent for such
studies, investigations

 

17

 

or audits. The costs of such studies, investigations or audits
allocable to Each Plant shall be borne by the Participants in the proportion of
their respective ownership shares of such plant.

 

2.3.6                        Review and approve, disapprove
or revise and approve the Strategic Plan, the Fuel Plan, the Operation and
Maintenance Budget, the New Investment Budget and the Fuel Budget to be
submitted annually by the Operating Agent, all pursuant to Sections 4.0 through
4.5 hereof.

 

2.3.7                        Perform those functions
described in Sections 4.0, 4.1, 4.3, 4.4, 4.5, 5.1, 5.2, 9.14, and 9.15 hereof.

 

2.3.8                        Approve any change from the
existing plant basis of allocation of costs in the Southern Nuclear Cost
Allocation Manual or the Plant Vogtle Cost Allocation Procedures by Requisite
Owner Action; provided, however, that approval of changes caused by Legal
Requirements shall not be unreasonably withheld.

 

2.3.9                        Approve the decommissioning
plan for Each Plant, filed by the Operating Agent with the NRC, pursuant to 10
C.F.R. § 50.75(f) or 10 C.F.R. § 50.82, or any successor NRC
regulation or pursuant to any other Legal Requirements, by Requisite Owner
Action; provided, however, that approval of a decommissioning plan that meets
Legal Requirements shall not be unreasonably withheld.

 

2.3.10                  Approve by Requisite Owner Action the
Nuclear Interface Procedure whereby GPC or any other Affiliate of Southern
Nuclear will provide support services as shall be described in written Services
Plans, which shall be subject to Nuclear Managing Board review and input
pursuant to Section 2.3.3 hereof.

 

2.3.11                  Perform such other functions as
the Participants may in writing delegate to the Nuclear Managing Board.

 

18

 

2.4                                 Actions
of the Nuclear Managing Board. In performing the functions described in Section 2.3
hereof, the Nuclear Managing Board shall act by unanimous vote of all members
not ineligible to participate in any action pursuant to Section 9.10
hereof except as otherwise provided (i) in Sections 2.3.2, 2.3.3, 2.3.4,
2.3.8, 2.3.9, 2.3.10, 4.0, 4.1, 4.3, 4.4 and 4.5 hereof or (ii) by any of
the Participation Agreements, or (iii) any other written agreements as may hereinafter
be entered into by all of the Participants. If at any time all Participants do
not have Undivided Ownership Interests in Each Plant, then action taken
(including any votes or reviews) by the Nuclear Managing Board with respect to
any such plant shall only be taken by the Participants with an Undivided
Ownership Interest in such plant.

 

2.5                                 Chairman
of the Nuclear Managing Board. The Chairman of the Nuclear Managing Board
shall be a member of the Nuclear Managing Board elected by a majority of the
members of the Nuclear Managing Board for a term of twelve consecutive months. On
the expiration of such term, the succeeding Chairman shall be a member of the
Nuclear Managing Board elected by a majority vote of the members of the Nuclear
Managing Board. There shall be no restriction upon the number of terms to which
any member of the Nuclear Managing Board may be elected to serve as
Chairman; provided that no member or no member and his or her predecessor
representing a single Participant shall be eligible for election as Chairman
for more than two successive terms without the consent of all members of the
Nuclear Managing Board.

 

2.6                                 Duties
of the Chairman of the Nuclear Managing Board. The Chairman of the Nuclear
Managing Board shall have the following duties:

 

2.6.1                        Schedule meetings of the
Nuclear Managing Board at such time and place as the Chairman may determine
but not less frequently than once every two months unless all members of the
Nuclear Managing Board shall otherwise agree. With the

 

19

 

consent of all members, any meeting of the Nuclear Managing Board may be
conducted by telephone conference and any members of the Nuclear Managing Board
may participate in any meeting by telephone.

 

2.6.2                        Provide notice to all other
members of the Nuclear Managing Board of each scheduled Nuclear Managing Board
meeting thirty (30) days in advance of such meeting except in emergencies or
unless all members consent to any shorter notice.

 

2.6.3                        Provide all other members of
the Nuclear Managing Board with a copy of each resolution or motion which the
Chairman or any other member proposes to submit to the Nuclear Managing Board
for action at any meeting of the Nuclear Managing Board at least five (5) business
days prior to such meeting, provided such time requirement may be waived
by the unanimous vote of all Nuclear Managing Board members at such meeting.

 

2.6.4                        Preside at each Nuclear
Managing Board meeting and conduct all Nuclear Managing Board meetings in
accordance with the procedures and rules established in accordance with Section 2.9
hereof.

 

2.6.5                        Establish the agenda for each
Nuclear Managing Board meeting, including such items or matters as the Chairman
shall deem appropriate or as may be requested by any other member of the
Nuclear Managing Board.

 

2.6.6                        Notify all members of the
Nuclear Managing Board of the agenda for each meeting as much in advance of
such meeting as may be possible, but in any event not less than five (5) business
days before such meeting.

 

2.6.7                        Appoint a secretary for the
Nuclear Managing Board who shall (i) prepare a draft of the minutes of
each Nuclear Managing Board meeting and deliver or mail a

 

20

 

copy of such draft minutes to each member of the Nuclear Managing Board
within five (5) business days after the close of each meeting of Nuclear
Managing Board and (ii) take custody of and maintain the records of all
Nuclear Managing Board meetings.

 

2.7                                 Minutes
of Meetings. The minutes of each Nuclear Managing Board meeting shall
record the following:

 

2.7.1                        The date, time and place of the
meeting;

 

2.7.2                        The agenda of the meeting and
the items or matters discussed;

 

2.7.3                        The resolutions and motions
approved, actions approved, agreements reached and decisions made by the
Nuclear Managing Board, including the votes of the members of the Nuclear
Managing Board on each of such resolutions, motions, actions, agreements and
decisions;

 

2.7.4                        The date, time and place of the
next meeting of the Nuclear Managing Board to be scheduled.

 

Provided, (1) the minutes of any meeting
of the Nuclear Managing Board shall not include any position advanced by any
member on any matter which was not adopted by the Nuclear Managing Board at
such meeting for any reason, and (2) any written resolution or motion
respecting a budget or Strategic Plan submitted to and approved by the Nuclear Managing
Board shall be immediately effective and binding upon the Participants when the
requisite number of members have affixed their signatures to such resolution or
motion. At the next succeeding regular meeting at which each Participant is
represented, the members of the Nuclear Managing Board in attendance shall
consider the minutes of the preceding regular or called meeting and if they are
found in order, shall signify approval of the minutes by affixing their
signatures to same.

 

21

 

2.8                                 Expenses.
Each Participant shall be responsible for the personal expenses of its member
and alternate of the Nuclear Managing Board at any Nuclear Managing Board
meeting. General meeting expenses shall be the responsibility of the
Participant whose member is serving as Chairman at the time the meeting is held.
All other expenses necessary in the performance of the Nuclear Managing Board
functions shall be allocated and paid as determined by the Nuclear Managing
Board.

 

2.9                                 Procedures.
The Nuclear Managing Board shall develop and adopt and from time to time modify
manuals or procedures as may be appropriate for the conduct of its
meetings and the performance of its functions.

 

2.10                           Attendees
at Meetings. Attendance at meetings of the Nuclear Managing Board shall not
be limited to members of the Nuclear Managing Board, but the Participants
recognize the practical necessity of limiting the participation of attendees at
any Nuclear Managing Board meeting who are not members to those who are
expected to take an active part on the agenda for such meeting. Subject to
Legal Requirements, the Chairman, on his own motion or at the request of any
member may conduct any portion of any meeting in executive session at
which attendance may be restricted to members or their respective
alternates and persons invited by the Chairman.

 

2.11                           Delegation
of Authority. The Nuclear Managing Board shall not delegate its authority
to others.

 

2.12                           Subcommittees.
The Nuclear Managing Board shall have the authority to appoint and charge
subcommittees to study and make recommendations on any subject. The purpose,
charge and duty of each subcommittee so appointed shall not exist for more than
one year unless reappointed by the Nuclear Managing Board.

 

22

 

2.12.1                  Accounting Services Committee.
The Nuclear Managing Board hereby designates the Accounting Services Committee
(established pursuant to the Plant Vogtle Cost Allocation Procedures) as a
subcommittee under this Agreement to (a) oversee the continued application
and suggested revision of the Plant Vogtle Cost Allocation Procedures and (b) review
Billing Disputes submitted to the Accounting Services Committee pursuant to the
Additional Units Ownership Agreement or the Amended and Restated Operating
Agreement. With respect to the Cost Allocation Procedures, the Accounting
Services Committee is a forum for reviewing such procedures and discussing the
appropriate cost allocation practices that are consistent with the general
principles stated therein, and does not have the authority to make decisions
with regard to cost allocation, such authority resting solely with the Nuclear
Managing Board pursuant to Section 2.3.8.

 

2.13                           Special
Meetings. The Chairman shall call a special meeting of the Nuclear Managing
Board (a) at least once after February 1 of each year, and on or
prior to March 1 of such year, for review and discussion of the proposed
Strategic Plan and any progress toward finalizing the Strategic Plan to be
submitted to the Nuclear Managing Board; (b) to be held within fifteen
(15) days following the date that each Strategic Plan, Operation and
Maintenance Budget, New Investment Budget and Fuel Budget, as applicable, was
submitted to the Nuclear Managing Board for approval, for review and discussion
of each proposed Strategic Plan, Operation and Maintenance Budget, New
Investment Budget and Fuel Budget, as applicable; and (c) upon the request
of any member of the Nuclear Managing Board to review a new matter of imminent,
substantial importance to Plant Hatch or Plant Vogtle (or any unit thereof),
provided the Chairman concurs in the necessity and appropriateness of such
special meeting. The

 

23

 

Chairman shall provide not less than seven (7) days notice of any
special meeting to the members of the Nuclear Managing Board unless the members
of the Nuclear Managing Board consent to shorter notice or an unanticipated
exigency arises (and in such exigent circumstances the members of the Nuclear
Managing Board will be provided as much advance notice as possible).

 

ARTICLE III

 

3.0                                 Responsibilities
of the Participants’ Agent. GPC shall continue to be the Participants’
Agent and responsible for its Agency Functions under the Participation
Agreements for so long as they shall remain in effect or until GPC has been
removed as the Participants’ Agent pursuant to the terms of such agreements.

 

Upon request from any member of the Nuclear Managing Board, the
Participants’ Agent shall advise the Nuclear Managing Board if additional
amounts or scope of coverage of nuclear decontamination and property damage
insurance are available to an individual Participant beyond that obtained by
the Participants’ Agent for Each Plant pursuant to the Participation
Agreements; and, at the request of any Participant’s member of the Nuclear
Managing Board, the Participants’ Agent shall obtain such additional amount or
greater scope of coverage for such Participant as may be requested and
available; provided that any increase in cost, including without limitation
premiums or retrospective premium calls, arising from such additional amount or
greater scope of coverage shall be for the account of such Participant.

 

ARTICLE IV

 

PLANS AND BUDGETS

 

4.0                                 Strategic
Plans and Budgets. Strategic Plans, Fuel Plans and budgets shall be
prepared and shall be submitted by the Operating Agent to the Nuclear Managing
Board as

 

24

 

provided in this Article IV. Plans and budgets shall conform to
the requirements and guidelines stated in Appendix “A” attached hereto and made
a part hereof and any revisions of such appendix as may be approved
by the Nuclear Managing Board. Within thirty (30) days after submittal, each
Strategic Plan, Fuel Plan, Operation and Maintenance Budget, New Investment
Budget, and Fuel Budget shall be approved, or revised and approved, by
Requisite Owner Action or disapproved by the Nuclear Managing Board. In the
event that the Nuclear Managing Board disapproves any plan or budget (except
when such disapproval is by Requisite Owner Action) within thirty (30) days
after submittal, then the item(s) in dispute respecting any plan or budget
shall be submitted to the dispute resolution process set forth in Section 9.14.

 

4.1                                 Strategic
Plans. A Strategic Plan for the following calendar year for Each Plant
consisting of six elements described in Sections 4.1.1 through 4.1.6 shall be
submitted by the Operating Agent to the Nuclear Managing Board by April 15
of each year. The Nuclear Managing Board shall separately consider, and
following such consideration, separately approve by Requisite Owner Action, or
separately disapprove, any individual project which is classified as a planned
improvement project pursuant to Section 4.1.4 below, but shall otherwise
approve or disapprove each Strategic Plan in its entirety. In the event the
Nuclear Managing Board shall by Requisite Owner Action disapprove any Strategic
Plan in its entirety, the Operating Agent shall as promptly as possible, submit
a revised Strategic Plan to the Nuclear Managing Board for approval or
disapproval. In the event the Nuclear Managing Board shall by Requisite Owner
Action disapprove separately one or more planned improvement projects of any
Strategic Plan, the Operating Agent may submit to the Nuclear Managing
Board for approval or disapproval a revision of such Strategic Plan with
adjustments in any other element that may be affected by the

 

25

 

deletion of such disapproved planned improvement projects. The six
elements of each Strategic Plan are described in the following Sections 4.1.1
through 4.1.6.

 

4.1.1                        Five-year Operating and
Planned Outage Schedule. This schedule shall identify the scheduled operating
cycles and planned outages for refueling, maintenance and other work during the
succeeding five years. The schedule shall describe in reasonable detail
the time and duration of each planned outage and the maintenance and other work
planned to be performed during such outage.

 

4.1.2                        Availability and Performance
Goals and Strategic Objectives. This section shall contain overall
performance goals which have been established for Each Plant, including,
without limitation, goals relating to unit availability. This section shall
also include a discussion of strategic objectives for Each Plant and progress
toward such objectives.

 

4.1.3                        Planned Mandatory Projects.
A mandatory project is any project with a total estimated cost in excess of one
million dollars or such greater amount as the Nuclear Managing Board may establish,
including any modification, addition or program, which is needed in order to
support normal operations (including, without limitation, facilities for spent
fuel storage) in accordance with Prudent Utility Practice or in order to comply
with regulatory or safety requirements. The associated schedule and
estimated annual funding requirements shall be included.

 

4.1.4                        Planned Improvement Projects.
An improvement project is any project with a total estimated cost in excess of
one million dollars or such greater amount as the Nuclear Managing Board may establish,
including any

 

26

 

modification, addition, or program, which is not mandatory as defined
in Section 4.1.3 hereof. Examples of such projects include efforts to
improve plant performance or conditions such as improved plant capacity or
efficiency, enhanced working conditions, and appearance. The associated schedule and
estimated annual funding requirements shall be included. No expenditures or
contractual commitments with respect to planned improvement projects shall be
made until the Participants have had an opportunity to review such planned
improvement project and, if necessary, the dispute resolution process of Section 9.14
arising from failure to approve such project by Requisite Owner Action shall
have been completed.

 

4.1.5                        Authorized Level of Staffing.
This section shall provide the current authorized number and actual
previous year end number of permanent staff positions in the organization of
the Operating Agent which are assigned to Each Plant. Such number of positions
shall be broken down by functional areas (e.g., operations, maintenance,
administrative, technical, corporate support), shall include positions which
are located either on-site or off-site, and shall include all positions
regardless of the actual employer. This section shall also show any
planned changes in such authorized number of positions over the succeeding five
years.

 

4.1.6                        Low Level Radioactive Waste
Disposal. This section shall provide information respecting plans for
disposal or reduction, or both, of low level radioactive wastes generated at
Each Plant, including any plans for onsite disposal.

 

27

 

4.2                                 Fuel
Plan. A ten (10) year Fuel Plan for Plant Hatch, the Existing Units
and the Additional Units shall be submitted to the Nuclear Managing Board by September 15
of each year. Each Fuel Plan shall describe in reasonable detail each action or
contemplated action and payment and the dates thereof, core usage and design
burn up, estimated fueling dates and the energy expected to be generated by
each unit for each fuel period of the Fuel Plan, a cash flow analysis of forecasted
expenditures and credits for each Participant for each major component of the
fuel cycle by years, and cash flow by months for the first five (5) years.
Each Fuel Plan will provide the ten (10) year forecasted nuclear fuel burn
rate in dollars per megawatt-hour ($/MWh) electric, not including spent fuel
disposal or other such fees, for each unit. Each Fuel Plan will also provide
the following information with respect to the spent fuel at Each Plant: the
existing spent fuel storage capacity; the current spent fuel inventory; the
projected date when the spent fuel storage capacity will be fully utilized; the
projected dates when shipments of spent fuel for disposal will commence; and
the projected date when additional spent fuel storage capacity may have to
be provided.

 

4.3                                 Operation
and Maintenance Budget. By August 15 of each year, the Operating Agent
shall submit to the Nuclear Managing Board a written Operation and Maintenance
Budget estimate of the costs of Operation and Maintenance Services for Each
Plant for the next calendar year, with a forecast of budget requirements for
the succeeding four calendar years. Such budget estimate and forecast shall be
based on the Strategic Plan unless the Operating Agent determines that
deviations from the Strategic Plan are appropriate, in which case, the
Operating Agent shall identify such deviations to the Nuclear Managing Board. The
budget estimate shall separately enumerate non-outage and outage Operation and
Maintenance costs and also the Operating Agent’s and Participants’ Agent’s
administrative and general costs. The Nuclear Managing

 

28

 

Board may, by Requisite Owner Action, approve or disapprove each budget
in its entirety. In the event the Nuclear Managing Board shall by Requisite
Owner Action disapprove an entire budget, the Operating Agent shall as promptly
as possible, submit a revised budget to the Nuclear Managing Board for approval
or disapproval. Each budget shall be supported by detail reasonably adequate
for the purpose of review by the Nuclear Managing Board.

 

4.4                                 New
Investment Budget. By August 15 of each year, the Operating Agent
shall submit to the Nuclear Managing Board a written New Investment Budget
estimate of the cost of New Investment Services for Each Plant for the next
calendar year, with a forecast of budget requirements for the succeeding four
calendar years. Such budget estimate and forecast shall be based on the
Strategic Plan unless the Operating Agent determines that deviations from the
Strategic Plan are appropriate, in which case, the Operating Agent shall
identify such deviations to the Nuclear Managing Board. The Nuclear Managing
Board may, by Requisite Owner Action, approve or disapprove each budget in its
entirety. In the event the Nuclear Managing Board shall by Requisite Owner
Action disapprove an entire budget, the Operating Agent shall as promptly as
possible, submit a revised budget to the Nuclear Managing Board for approval or
disapproval. Each budget shall be supported by detail reasonably adequate for
the purpose of review by the Nuclear Managing Board.

 

4.5                                 Fuel
Budget. By August 15 of each year, the Operating Agent shall submit to
the Nuclear Managing Board a written Fuel Budget estimate of the costs of Fuel
Services for Each Plant for the next calendar year, with a forecast of budget
requirements for the succeeding four calendar years. The Nuclear Managing Board
may, by Requisite Owner Action, approve or disapprove each budget in its
entirety. In the event the Nuclear Managing Board shall by Requisite Owner
Action disapprove an entire budget, the Operating Agent shall as promptly as

 

29

 

possible, submit a revised budget to the Nuclear Managing Board for
approval or disapproval. Each budget shall be supported by detail reasonably
adequate for the purpose of review by the Nuclear Managing Board.

 

ARTICLE V

 

INFORMATION

 

5.0                                 Information
and Access. The Participants’ Agent shall furnish or cause to be furnished
information, access to information and access to Each Plant and the offices of
the Operating Agent as follows:

 

5.1                                 Information
to Be Provided to the Participants. Each of the Participants’ Agent and the
Operating Agent, as appropriate, will provide the Participants with all
information in its possession or control relating to the operation,
maintenance, renewal, addition, replacement, modification, decommissioning
and/or disposal of Each Plant, and the cost of New Investment Services,
Operation and Maintenance Services, and Fuel Services to be paid by the
Participants (the “Operational Information”), with the objective of assuring
that the Participants remain fully informed in a timely manner with respect to
matters that could impact decisions made or to be made by the Nuclear Managing
Board, the Operating Agent, the Participants’ Agent or the Participants under
this Agreement or any applicable Participation Agreement. In furtherance of
such objective, three categories of information, i.e., Formal Routine,
Formal Non-routine, and Informal, shall be provided to each member of the
Nuclear Managing Board or to the Participants, which to the maximum extent
possible shall be provided electronically as provided in Section 5.1.4.

 

30

 

5.1.1                        Formal Routine Information.
In addition to the Strategic Plan and budget information provided routinely
pursuant to Article IV, information in this category includes:

 

5.1.1.1 
Energy Estimate - By August 15 of each year, the Operating
Agent will furnish a written energy estimate for Each Plant and unit projecting
the estimated generation for each unit during the succeeding five calendar
years, using the best available data at the time.

 

5.1.1.2 
Benchmark Performance Data - At the time of submittal of each
Strategic Plan, the Operating Agent will also furnish a comparison of the
performance of Each Plant and unit relative to other similar units and plants
in the United States using performance indicators, including, without
limitation, the unit cost of generation, in common use in the nuclear industry
or as may be specified by the Nuclear Managing Board. Each month, the
Operating Agent will furnish a comparison of the performance of Each Plant and
unit for the preceding month relative to the Institute of Nuclear Power
Operations (“INPO”) performance index (both component and aggregate) to the
extent such index is available for such month at such time.

 

5.1.1.3 
Plant Budget Reports - The Operating Agent will furnish monthly
data showing actual costs for Operation and Maintenance Services (broken out by
outage and non-outage expense and Operating Agent administrative and general
expense), New Investment Services, and Fuel Services at Each Plant and unit
with comparisons to the respective budgets for such services. These reports
will

 

31

 

normally be provided on an electronic database (pursuant to Section 5.1.4)
at the Operating Agent transaction level by the end of the succeeding month.

 

5.1.1.4 
Plant and Unit Specific Strategic Plan Reports - The Operating
Agent will furnish monthly data showing actual performance for Each Plant or
unit (as appropriate) compared to goals and strategic objectives contained in
the Strategic Plan for Each Plant or unit (as appropriate) on at least a
bimonthly basis; provided, that the Operating Agent will endeavor to
provide such reports on a monthly basis. These reports normally will be
provided using e-mail by the end of the succeeding month.

 

5.1.1.5 
INPO Evaluations and Assessments - The Operating Agent will make
available for review by the Designated Representatives of each Participant
copies of evaluations and assessments of Each Plant by the INPO.

 

5.1.1.6 
NRC and INPO Meetings - Each member of the Nuclear Managing Board
will be notified by the Operating Agent and appropriate representatives of each
Participant may attend executive exit meetings of INPO and the NRC as
observers. Attendance by Participant representatives as observers at other NRC &
INPO meetings with the Operating Agent will be permitted unless (i) such
attendance is contrary to the policies of NRC or INPO, or (ii) the
management of the Operating Agent requests that Participant representatives not
attend in which event any Participant may invoke the procedures specified
in Section 5.3.3 hereof.

 

5.1.1.7 
Audit Reports - The Operating Agent will make available for
review by the Participants copies of financial or accounting reports concerning

 

32

 

Each Plant containing the results of audits by or for GPC, Southern
Nuclear, Southern Services or any Affiliate of The Southern Company, for any
Participant or its Affiliates, or by any regulatory agency.

 

5.1.1.8 
Correspondence to and from NRC - The Operating Agent shall
furnish to any Participant’s Designated Representative at his or her request
copies of all correspondence to and from the NRC concerning Each Plant.

 

5.1.1.9 
Correspondence to and from Georgia Environmental Protection Division
– The Operating Agent shall furnish to any Participant’s Designated
Representative at his or her request all correspondence to and from the Georgia
Environmental Protection Division concerning Each Plant.

 

5.1.1.10 
Meetings with the Nuclear Managing Board - In order to assure
that the members of the Nuclear Managing Board are informed as to the status of
operations at Each Plant, an officer of the Operating Agent, together with any
employees or consultants of the Operating Agent as such officer may designate,
shall attend each meeting of the Nuclear Managing Board. At such meetings the
Operating Agent shall present information concerning plant performance, the
status and condition of Each Plant and unit (if appropriate), including review
of problem status reports, events that are significant to plant operations,
capital projects and year to date budget performance and end of year
projections, to convey an overview of Each Plant and its operations and to
address items on the agenda for the meeting of the Nuclear Managing Board. The
Operating Agent will inform the Nuclear Managing Board of events which are
affecting or may affect the availability of any unit at Each Plant.

 

33

 

5.1.1.11 
Incentive Compensation Plan – The Operating Agent shall provide
to each member of the Nuclear Managing Board a copy of the incentive
compensation plan for its employees described in Section 2.6.1 of the
Nuclear Operating Agreement and, with respect to each amendment or revision of
such plan, Operating Agent shall consider any comments as may be offered
by the Nuclear Managing Board or such member respecting such plan, but shall
have full authority to implement such plan when in its sole discretion it
decides it is appropriate to do so.

 

Notwithstanding any other provision of this Agreement, the Operating
Agent shall not provide copies of or access to Safeguards Information, as
defined in 10 CFR § 73.2, to any member of the Nuclear Managing Board, or
to any Participant or its employees, agents or contractors unless the Operating
Agent is reasonably assured that the provision of such copies or access will
not violate 10 CFR § 73.21 and the person receiving such copies or access
can and will comply with paragraphs (b) through (i) of 10 CFR § 73.21.
Information supplied to any member under this Agreement shall not be used in
any manner that (a) would compromise any part of the safeguards plan
for Each Plant, or (b) would be in contravention of applicable
governmental regulations. Information requested by a Participant may not
be refused on the grounds that a vendor, contractor or consultant claims such
information to be proprietary if such Participant agrees to execute an
agreement satisfactory to any such vendor, contractor or consultant to protect
such information from unwarranted disclosure.

 

5.1.2                        Formal Non-routine
Information.

 

5.1.2.1               Information in this category which is
time sensitive and shall be promptly provided by the Operating Agent to the
Participants includes:

 

34

 

information on work disruptions or stoppages, and Notices of an Unusual
Event, Alert, Site Area Emergency, or General Emergency (as such terms are
defined in the emergency plan for Each Plant). The Operating Agent shall also
inform the Participants and the dispatcher of the power and energy
generated by Each Plant as soon as practical, or in accordance with guidelines
acceptable to the Nuclear Managing Board, after the occurrence at Each Plant of
any unplanned outage of a unit, any significant extension of a planned unit
outage, any unplanned reduction in the capacity of a unit for an extended
period, or any event or regulatory action which may substantially affect
the operation of Each Plant. Information in this category also includes informal
reports concerning events which the Operating Agent believes may result in
public interest or may lead to inquiries to Participants by members of the
public, and news releases issued by the Participants’ Agent or the Operating
Agent.

 

5.1.2.2               Southern Nuclear shall inform the
Nuclear Managing Board of any plan to change the organizational structure of
Southern Nuclear to the extent that such change in any way affects the Southern
Nuclear personnel who are dedicated to Each Plant and will consider any comments
made by the Nuclear Managing Board, or any member of the Nuclear Managing
Board, respecting such plans, but shall have full authority to implement such
plans when in its sole discretion it decides it is appropriate to do so.

 

5.1.2.3               Southern Nuclear shall also inform the
Nuclear Managing Board of any plans to replace (1) the individual
occupying the position of General Manager of Each Plant, and the successors of
such replacement, and (2) any Southern

 

35

 

Nuclear officer having responsibility for Each Plant or any combination
of Each Plant, and the successors of such replacement. The Nuclear Managing
Board shall review and the Nuclear Managing Board, or any member of the Nuclear
Managing Board, may provide input to Southern Nuclear prior to the
replacement of such individuals and shall be afforded access, on request, to
Southern Nuclear’s chief executive and senior nuclear operations officers and
its Board of Directors or any of them; provided, however, that Southern Nuclear
shall have full authority, in its sole discretion, to make such replacements as
it deems appropriate following such review, input and access by the Nuclear
Managing Board; and provided further that such review, input and access shall
not be required with respect to any replacement made on a temporary or interim
basis to fill any vacancy which arises as a result of any occurrence (e.g.,
injury, promotion, dismissal or resignation).

 

5.1.2.4               To the extent a Participant requires
additional Operational Information not otherwise available or provided pursuant
to this Section 5.1, such Participant may make a formal request for
additional information to the Operating Agent’s Designated Representative. Such
request will be in writing and will be sent by such Participant’s Designated
Representative to the Operating Agent’s Designated Representative. The
Operating Agent will diligently respond to such requests. The Operating Agent’s
response to such additional information request shall be in substance and in a
format as reasonably determined by the Operating Agent.

 

36

 

5.1.3                        Informal Information. Information
in this category includes informal communications between representatives of
any Participant and the Operating Agent’s employees of a general nature and
access by such representatives to routine reports and records on plant
operations and conditions that are readily available at Each Plant.

 

5.1.4                        Electronic
Access to Operational Information. The Operating Agent will develop and
maintain a system to permit the Participants (through their Designated
Representatives and Site Representatives, as appropriate) to have electronic
access to Operational Information related to Each Plant except to the extent
access thereto is limited by Section 5.1.1 with regard to Safeguards
Information, as defined in 10 CFR § 73.2, or NRC, Department of Labor or
related requirements and the practicalities and cost-effectiveness of such
electronic information management and access. The cost directly associated with
the development and implementation of such systems, such as software programming
and hardware costs dedicated to the system, shall be treated as a cost of New
Investment Services. The information provided on such system shall be in a
format and safeguarded as may be reasonably determined by the Operating
Agent. The Operating Agent, after the receipt of input from the Participants,
shall establish and distribute reasonable data exchange and protection
protocols with respect to the access given to the Designated Representatives of
the Participants, which such protocols shall include actions in the case of
improper access, user identification and password requirements and similar
provisions.

 

5.2                                 Input
from Participants. Each Participant shall be permitted to provide initial
input with regard to the Strategic Plan and budgets for the subsequent year on
or prior to February 1 of each year. Thereafter, each Participant may provide
additional input on such Strategic Plans and budgets at subsequent Nuclear
Managing Board meetings (including any

 

37

 

special meeting related to such Strategic Plan or budgets scheduled
pursuant to Section 2.13). The Participants’ Agent shall give due regard
to the input, observations and recommendations of the Participants’ members on
the Nuclear Managing Board, including in particular requests regarding the
implementation of outage schedules and fuel cycle schedules.

 

5.3                                 Access
to Each Plant.

 

5.3.1                        Each Participant shall be given
the opportunity to have a reasonable number of representatives located at Each
Plant (“Site Representatives”) for the purpose of observing and reporting to
such Participant on plant conditions and activities. Reasonable office space
and facilities will be made available to such Site Representatives at Each
Plant. If a Participant elects to place representatives on site, such
Participant will re-evaluate periodically the need for such onsite
representation, and if the Participant determines that there is no longer a
need for such onsite representation, the Participant will suspend its onsite
representation.

 

5.3.2                        It is a mutual objective of the
parties to create and maintain a harmonious working environment so that plant
management attention is not diverted from the responsibilities of safe and
efficient operations of the plant. Since a Participant can unilaterally
exercise its right to have a reasonable number of Site Representatives at Each
Plant, it shall be the duty of any Participant that exercises such right to
assure that each of its Site Representatives shall cooperate fully with plant
management in achieving such mutual objective. In the event that plant
management reasonably considers that the conduct of any Site Representative is
not conducive to achieving such mutual objective, the Operating Agent may bring
such matters to the attention of the management of the Participant which has
designated such Site Representative and request that appropriate

 

38

 

measures be taken by such Participant to achieve such mutual objective.
The management of such Participant in response to any such request shall
thereupon take such measures, including at its discretion replacement of such
Site Representative, as it deems appropriate to achieve such mutual objective. If
issues of a continuing nature arise involving any Site Representative, the
Nuclear Managing Board will review the circumstances and make recommendations
as appropriate to the Site Representative’s Participant or to the Operating
Agent.

 

5.3.3                        As a matter of professional
respect and courtesy, and in order to promote good relations with the personnel
on site, Site Representatives of any Participant will be invited to attend
training, educational, professional and team building functions at Each Plant. Site
Representatives will not attend a training function if the plant manager
reasonably determines that attendance by Site Representatives would interfere
with training of the Operating Agent’s personnel or is otherwise inappropriate.
In order to assure that they are kept informed about management activities,
Site Representatives will be provided access (pursuant to Section 5.1.4)
or copies of daily, weekly and monthly reports on plant operations that are
routinely distributed to all plant management level personnel at substantially
the same time such reports are distributed to such personnel. Upon initial
assignment, a new Site Representative will be invited by the plant manager to
attend as an observer, one of each type of routine management meetings, except
those devoted to personnel matters and staff working meetings involving
conflict resolution activities where Site Representative presence would be
obviously inappropriate that may be held on site, including without
limitation meetings of any oversight group such as the Plant Review Board, Independent
Safety Engineering Group, Safety Review Board and

 

39

 

ALARA Committee. Thereafter, such Site Representative may attend
any meeting other than (i) such personnel or conflict resolving meetings,
and (ii) any other meetings that the General Manager at Each Plant or his
senior management shall reasonably request such Site Representative not attend.
If the management of the Participant represented by Site Representatives
disagrees that the closure of meetings or types of meetings was reasonable,
then the management of such Participant may request the management of the
Operating Agent to review the matter. If the management of the Operating Agent
concludes that the closure of such meetings was not based on reasonable
grounds, the Participant’s Site Representative shall be permitted to attend
such meetings. If the management of the Operating Agent concludes that the
closure was reasonable, and the management of such Participant still disagrees,
the matter may be referred to the Nuclear Managing Board for review and
recommendations.

 

5.3.4                        Any Participant shall have the
additional right to have its representatives and guests visit Each Plant, with
prior approval of the Operating Agent, to tour the facilities and observe plant
activities; provided that such visit and tour will not interfere with the
operation of the plant, plant safety, or security. Such representatives and
guests shall comply with all applicable rules and regulations in effect at
the plant whether imposed by Governmental Authority or by the Operating Agent.

 

5.4                                 Management
Audits. Each Participant shall have the right to conduct management audits,
at its own cost, of the performance of the Participants’ Agent and the
Operating Agent either by such Participant’s own officers and employees or by
its duly authorized agents or representatives, including without limitation any
auditor utilized by such Participant, or any nationally recognized accounting
firm designated by such Participant or by

 

40

 

the Administrator of the Rural Utilities Service. The Participants’
Agent and the Operating Agent shall cooperate with such Participant in the
conduct of such audits and, subject to the applicable regulations of the NRC
and the requirements of vendors, give such Participant’s representatives
reasonable access to all contracts, records, and other documents relating to
Each Plant. Following any such management audit, the Participants’ Agent and
the Operating Agent shall respond to the findings of such audit if requested to
do so by such Participant. Management audits by individual Participants shall
be coordinated and scheduled through the Participants’ Agent so as to minimize
the number of audits required.

 

5.5                                 Cost
Audits. In addition to the right to conduct management audits pursuant to Section 5.4
hereof, each Participant shall have the right to conduct, at its own expense,
audits of the costs of Agency Functions, Operation and Maintenance Services,
New Investment Services and Fuel Services and any other costs charged to and
paid by such Participant. To enable each Participant to conduct such audits,
the Participants’ Agent and the Operating Agent will provide, during normal
business hours and subject to conditions consistent with the conduct by the
Participants’ Agent and the Operating Agent of their respective
responsibilities, any Participant, its officers, employees, agents or
representatives, including without limitation any auditor utilized by such
Participant, or any nationally recognized accounting firm designated by such
Participant or by the Administrator of the Rural Utilities Service, with access
to books, records, contracts and other documents of the Participants’ Agent and
the Operating Agent related to their respective performance (including, without
limitation, all Services Plans, the Nuclear Interface Procedure and agreements
between Southern Nuclear and any of its Affiliates, and any amendments to the
foregoing) and, upon such Participant’s reasonable request, copies thereof,
which set forth (a) costs applicable to Operation and Maintenance
Services, New Investment

 

41

 

Services, Fuel Services, and other costs for Each Plant to the extent
necessary to enable the auditors of such Participant to verify that the costs
have been properly billed to the Participants’ Agent or to such Participant
pursuant to the provisions of applicable agreements, and (b) matters
relating to the design, construction and operation and retirement of Each Plant
in proceedings before any Governmental Authority having jurisdiction.

 

5.6                                 Civil
Penalties and Meetings. In each case when a civil penalty is assessed
against the Operating Agent, the Operating Agent shall provide the members of
the Nuclear Managing Board with a description of the violation, the root cause
determination of the violation, and the corrective action taken and to be taken
to avoid repeat violations. The Nuclear Managing Board upon its request will be
provided the opportunity to meet with the Operating Agent’s chief executive and
senior nuclear operations officers, its Board of Directors or both.

 

5.7                                 Notification
of Claims. In each case where a person or entity has made a claim against
the Operating Agent relating to Plant Hatch or Plant Vogtle, the Operating
Agent shall notify the Participants in writing within thirty (30) days,
provided, however that the Operating Agent need only advise of the general
nature of the claim rather than reporting any detail. The Operating Agent will
advise the Participants in writing within thirty days following settlement or
entry of judgment with respect to any such claim.

 

ARTICLE VI

 

6.0                                 Recovery
of Costs. Any costs incurred by Southern Nuclear as the Operating Agent
that would have been recoverable from the Participants by GPC under any
applicable Participation Agreement shall be recoverable from the Participants
subject to the rights of the Participants under such agreement and this
Agreement to audit and contest such costs incurred

 

42

 

by Southern Nuclear and all remedies provided therein shall be
available in the event any Participant shall default in the payment of such
costs.

 

ARTICLE VII

 

7.0                                 Relation
To Existing Agreements. Neither this Agreement nor the Nuclear Operating
Agreement are intended to nor do they modify, amend, or terminate any of the
Participation Agreements and do not otherwise alter or impact rights and
obligations of the Participants under any such agreements, including, without
limitation, the obligations to make payments; the remedies for defaults; the
authority and obligation to insure Each Plant; the authority to establish
levels of output, to schedule and meter output; entitlements to output;
authority to establish retirement dates for Each Plant; authority to repair
(following substantial damage or destruction), replace or make additions to
Each Plant; the authority to salvage, dispose and decommission Each Plant; the
property rights established by the applicable Participation Agreements; and GPC’s
responsibility and authority as agent of the Participants under such agreements.
Specifically, nothing in this Agreement or the Nuclear Operating Agreement or
any other contract between GPC and Southern Nuclear shall be construed or
applied to impair GPC’s capacity to carry out its Agency Functions or to
diminish or add to (i) the liabilities of GPC, or (ii) the remedies
of OPC, MEAG and Dalton or any of them established by any of the several
Participation Agreements. Therefore, the acts or omissions of employees of
Southern Nuclear, including without limitation acts or omissions which
constitute a breach of the Nuclear Operating Agreement, as the case may be,
shall be deemed to be, and treated as though they were, acts and omissions of
employees of GPC and subject to (i) the same defenses which GPC would have
under applicable laws respecting acts and omissions of its employees, and (ii) the
same defenses as GPC may have or remedies that OPC, MEAG or Dalton have under
the

 

43

 

Participation Agreements that would have been applicable if such acts
or omissions had been performed by employees of GPC. Nevertheless, the audit,
observation and information provisions herein and the budget and plan review
and approval procedures contained herein shall supersede the equivalent
provisions of and procedures established by the Participation Agreements (other
than the provisions of the Additional Units Ownership Agreement with respect to
each Additional Unit prior to Commercial Operation of such unit). Accordingly,
the Participants agree that the provisions hereof supersede the following
sections of the following agreements:

 

1)                                      Edwin I. Hatch
Nuclear Plant Agreement of Construction dated as of August 27, 1976
between GPC and MEAG, as heretofore amended: Sections 2(h), 2(n), 3(c) and
3(f);

 

2)                                      Alvin W. Vogtle
Nuclear Units Numbers One and Two Purchase and Ownership, Participation
Agreement dated as of August 27, 1976 among GPC, OPC, MEAG and Dalton, as
heretofore amended: Sections 4(d), 5(e), and 9(m);

 

For as long as they are in effect, the provisions herein respecting
Fuel Plans and Fuel Budgets, qualify and take precedence over The Edwin I.
Hatch Nuclear Plant Purchase and Ownership Participation Agreement, dated as of
January 6, 1975, between GPC and OPC, as heretofore amended: Section 5(i).
For as long as they are in effect, the provisions herein respecting agreements
and contracts between the Participants’ Agent and the Operating Agent qualify
and take precedence over the following:

 

The Edwin I. Hatch Nuclear Plant Purchase and Ownership Participation
Agreement, dated as of January 6, 1975, between GPC and OPC, as heretofore
amended: Section 5(c) insofar as it authorizes GPC to contract with
itself or any of its affiliates;

 

The Edwin I. Hatch Nuclear Plant Operating Agreement, dated as of January 6,
1975, between GPC and OPC, as heretofore, amended: Section l(d) insofar
as it authorized GPC to contract with itself or any of its affiliates;

 

44

 

The Edwin I. Hatch Nuclear Plant Purchase and Ownership Participation
Agreement between Georgia Power Company and Municipal Electric Authority of
Georgia dated as of August 27, 1976 as heretofore amended: Section 5(c) insofar
as it authorizes GPC to contract with itself or any of its affiliates;

 

The Edwin I. Hatch Nuclear Plant Operating Agreement between Georgia
Power Company and Municipal Electric Authority of Georgia, dated as of August 27,
1976 as heretofore amended: Section l(d) insofar as it authorizes GPC
to contract with itself or any of its affiliates;

 

The Edwin I. Hatch Nuclear Plant Purchase and Ownership Participation
Agreement between Georgia Power Company and City of Dalton, Georgia dated as of
August 27, 1976 as heretofore amended: Section 5(c) insofar as
it authorizes GPC to contract with itself or any of its affiliates;

 

The Edwin I. Hatch Nuclear Plant Operating Agreement between Georgia
Power Company and City of Dalton, Georgia dated as of August 27, 1976 as
heretofore amended: Section i(d) insofar as it authorizes GPC to
contract with itself or any of its affiliates; and

 

The Alvin W. Vogtle Nuclear Unit Numbers One and Two Purchase and
Ownership Participation Agreement, dated as of August 27, 1976, among GPC,
OPC, MEAG and Dalton, as heretofore amended: Section 4(b)(v).

 

No portion of any costs paid by GPC to the Operating Agent pursuant to
the Nuclear Operating Agreement as a result of a judgment of any court with
competent jurisdiction against the Operating Agent, as the case may be,
for any breach of its no adverse distinction obligations under the Nuclear
Operating Agreement, respectively, shall be recoverable from OPC, MEAG and
Dalton.

 

No portion of any payment made by GPC to Southern Nuclear for costs
incurred by Southern Nuclear for participation in industry groups shall be
payable by OPC, MEAG or Dalton unless such participation costs when incurred
were reasonably expected to yield a present or future benefit, whether direct,
indirect, general or specific, to Plant Hatch, the Existing Units or the
Additional Units, or Plant Hatch, the Existing Units and the Additional Units.

 

45

 

ARTICLE VIII

 

8.0                                 Term,
Termination, and Effective Date. Subject to Section 9.1 hereof, this
Second Amended and Restated Nuclear Managing Board Agreement shall become
effective upon the Effective Date and shall remain in effect to coincide with
the later of (a) the expiration of the last effective operating license or
possession-only license for any of Plant Hatch, the Existing Units and the
Additional Units, issued by any Governmental Authority having jurisdiction over
Plant Hatch, the Existing Units or the Additional Units, as applicable, or (b) the completion of Decommissioning (as defined in the Amended and Restated
Operating Agreement) for the last unit of Plant Hatch and Plant Vogtle to be decommissioned.

 

ARTICLE IX

 

9.0                                 Miscellaneous.

 

9.1                                 Required
Approvals. Notwithstanding anything in this Agreement to the contrary, this
Agreement shall have no force and effect until it is approved by the
Administrator of the Rural Utilities Service.

 

9.2                                 Further
Assurances. From time to time the Participants will execute such
instruments, upon the request of another Participant, as may be necessary
or appropriate to carry out the intent of this Agreement.

 

9.3                                 Governing
Law. The validity, interpretation, and performance of this Agreement and
each of its provisions shall be governed by the laws of the State of Georgia.

 

9.4                                 Notice.
Any notice, request, consent or other communication permitted or required by
this Agreement shall (a) be made in writing signed by the party making it;
(b) specify the Section to which it relates; (c) be delivered (i) in
person, (ii) by a nationally recognized next business day delivery service
electing, and being timely delivered to such

 

46

 

service for,
next business day delivery, or (iii) by fax and with a confirming copy
sent by a nationally recognized next business day delivery service electing,
and being timely delivered to such service for, next business day delivery; (d) unless
given in person, be given to the address specified below; and (e) be
deemed given or received (i) if delivered in person, on the date of
personal delivery, (ii) if sent by a nationally recognized next business
day delivery service electing, and being timely delivered to such service for,
next business day delivery, on the first business day after so sent, or (iii) if
sent by fax with a copy sent by a nationally recognized business day delivery
service electing, and being timely delivered to such service for, next business
day delivery, on the first business day after so sent. The party giving the
notice or other communication will pay all delivery costs. The addresses and
the requirements for copies are as follows:

 

If to GPC:

 

Georgia Power Company

241 Ralph McGill Boulevard

Atlanta, Georgia 30308

Facsimile No.: 404-506-7985

Attention:  President

 

If to OPC:

 

Oglethorpe Power Corporation

2100 East Exchange Place

Tucker, Georgia  30084-5336

Facsimile No.: 770-270-7872

Attention: President and CEO

 

If to MEAG:

 

Municipal Electric Authority of Georgia

1470 Riveredge Pkwy, NW

Atlanta, Georgia 30328-4686

Facsimile No.: 770-661-2812

Attention:  President and CEO

 

47

 

If to Dalton:

 

The City of Dalton, Georgia

1200 V.D. Parrott, Jr. Parkway

Dalton, Georgia 30721

Facsimile No.: 706-278-7230

Attention:  CEO

 

If to Southern Nuclear:

 

Southern Nuclear Operating Company, Inc.

10 Inverness Center Parkway

Birmingham, Alabama 35242-4809

Facsimile No.: 205-992-6165

Attention: President

 

unless a different address shall have been designated by the respective
Participant by notice in writing.

 

9.5                                 Section Headings
Not To Affect Meaning. The descriptive headings of the various Sections of
this Agreement have been inserted for convenience of reference only and shall
in no way modify or restrict any of the terms and provisions thereof.

 

9.6                                 Time
of Essence. Time is of the essence of this Agreement.

 

9.7                                 Amendments.
This Agreement may be amended by and only by a written instrument duly
executed by each of the Participants.

 

9.8                                 Successors
and Assigns. This Agreement shall inure to the benefit of and be binding
upon each of the Participants and its respective successors and assigns. The
Participants’ Agent may not assign or delegate any of its rights or
obligations as such under this Agreement, other than to a successor agent
appointed pursuant to the applicable Participation Agreements. No Participant may assign
or delegate any of its rights or obligations as such under this Agreement,
except in connection with a sale, transfer or assignment of all or any portion
of the assignor’s ownership interest in Plant Hatch, the Existing Units or the
Additional Units pursuant to the applicable Participation Agreements.

 

48

 

9.9                                 Counterparts.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.

 

9.10                           Computation
of Percentage Undivided Ownership Interest. Except as may be provided
by any Participation Agreement and notwithstanding any other provision of this
Agreement, whenever, pursuant to any provision of this Agreement, any action is
required to be agreed to or taken by the Nuclear Managing Board or the
Participants as to Each Plant (i) only those Participants not in default
in the payment of any amounts (together with interest, if appropriate) required
under any provisions of any applicable Participation Agreement at the time such
action is to be agreed to or taken shall have the right to participate in such
agreement or the taking of such action, and (ii) wherever it is provided
in this Agreement for approval or disapproval by Requisite Owner Action, the
approval or disapproval, as the case may be, of those Participants not in
default which collectively own Undivided Ownership Interests in such plant in
the aggregate proportion of not less than the applicable percentage (as set
forth in the definition of Requisite Owner Action) of the sum of the Undivided
Ownership Interests of all non-defaulting Participants in such plant shall be
required.

 

9.11                           Several
Agreements. Notwithstanding anything to the contrary set forth herein, the
agreements and obligations of the Participants set forth in this Agreement
shall be the several, not the joint, agreements and obligations of the
Participants.

 

9.12                           Confidentiality.

 

(a)                                  The
Participants recognize that there are, or may be in the future, certain
contracts, records, drawings, data or other documents or information relating
to the operation, maintenance, renewal, addition, replacement, modification
decommissioning or disposal of Each

 

49

 

Plant, which is labeled by the party providing such information as
proprietary, confidential or privileged (the “Confidential Information”), and,
in some cases, is subject to a contractual obligation to another person which
requires that such information not be disclosed without the express approval of
such other person. Information provided orally shall be deemed “Confidential
Information” if the disclosing party states that such information is
confidential at the time of such disclosure and, within ten (10) days
thereafter, provides the receiving party written confirmation of the
confidential nature of the information so disclosed.

 

(b)                                 Each
of the Participants agrees, notwithstanding any other provision of this
Agreement, that it shall use any Confidential Information only in the exercise
of its respective rights and obligations hereunder, and that any Confidential
Information which is disclosed to it shall not be disclosed other than as
permitted under this Section 9.12 to any other entity or to any person who
is not an officer, director, employee or attorney, respectively, of the
Participant; provided, however, that the respective lessors, mortgagees
and security deed holders, including prospective lessors, mortgagees or
security deed holders, of any of the Participants and any credit rating
agencies and other financing entities that need to know such information in
connection with the financing of a Participant’s Undivided Ownership Interest
shall be entitled to examine (but not to copy) at the offices of the Operating
Agent or the Participant whose lessor, mortgagee or security deed holder or any
such credit rating agency or financing entity desires to examine such
information, any Confidential Information; and provided further, however,
that the Participants may disclose any such information as required by any
Governmental Authority (including the Rural Utilities Service) having
jurisdiction or as necessary to comply with Legal Requirements.

 

50

 

(c)                                  Each
of the Participants agrees to take all reasonable steps to protect the
proprietary, privileged or confidential nature of all Confidential Information
furnished to it, including, without limitation: (i) limiting access to and
disclosure of such Confidential Information only to: (A) its officers,
directors, employees or attorneys who have a need for access to such
Confidential Information reasonably related to the exercise of any rights of
the Participants hereunder, (B) the respective lessors, mortgagees and
security deed holders, including prospective lessors, mortgagees and security
deed holders, and credit rating agencies and financing parties, of the Participants
only as permitted by the provisions of Section 9.12(b), and (C) to
those persons to which access is required by any Governmental Authority or as
necessary in order to comply with Legal Requirements; and (ii) ensuring
that those persons receiving any such Confidential Information understand the
proprietary, confidential or privileged nature of such Confidential
Information.

 

(d)                                 In
the event that a Participant considers it necessary or desirable to disclose or
provide copies or summaries of or access to any Confidential Information to any
person not its employee, director, officer or attorney, and such disclosure is
not otherwise permitted by this Section 9.12 and such disclosure is to a
contractor, agent, representative or consultant of such Participant which
reasonably requires such Confidential Information to assist the Participant in
the exercise of its rights as a Participant or to perform its
responsibilities with regard to the operation, maintenance, renewal, addition,
replacement, modification, decommissioning or disposal of Each Plant, then the
Participant may provide such information to such person only when such
person shall have signed an agreement obligating such person to: (i) safeguard
the confidentiality of such Confidential Information; (ii) use such
Confidential Information only for the purpose of executing its responsibilities
regarding such plant; and (iii)

 

51

 

return or destroy all copies of any documents containing such
Confidential Information upon the completion of its responsibilities. The
Participant shall advise the person or persons designated by the party
originally furnishing such Confidential Information, by telephone or otherwise,
of the Confidential Information to be disclosed and shall provide such
furnishing party a copy of each such executed confidentiality agreement within
ten (10) days of execution, together with a list of all documents provided
by the Participant containing Confidential Information which have been given to
such person, which such Participant shall update each time additional documents
are provided to such person.

 

(e)                                  The
obligations of the Participants pursuant to the provisions of this Section 9.12
shall survive the termination of this Agreement and continue to bind the
Participants, in the case of Confidential Information which is not a trade
secret, for a period of five years following the termination of this Agreement,
and, in the case of trade secrets, for so long as they remain trade secrets.

 

(f)                                    The
restrictions of this Section 9.12 shall be in addition to any restrictions
imposed by law upon the Participants in the absence of contract.

 

9.13                           Effect
on Joint Committee Agreement. As of the effective date of this Agreement
and while this Agreement is in effect, this Agreement shall supersede the Joint
Committee Agreement, as amended, with respect to all matters affecting Plant
Hatch or Plant Vogtle.

 

9.14                           Dispute
Resolution. Unless otherwise mutually agreed to by the Participants, any
dispute, controversy or claim arising out of, under, or relating to this
Agreement (a “Dispute”), other than Billing Disputes to be resolved pursuant to
the Additional Units Ownership Agreement or Amended and Restated Operating
Agreement, as applicable, shall be negotiated in good faith and resolved in
accordance with the provisions of this Section 9.14. The Participants

 

52

 

shall first submit the dispute to the Nuclear Managing Board to resolve
any Dispute through discussions among the members of the Nuclear Managing Board.
If, after thirty (30) days (or any time earlier if the disputing Participant or
the Participants’ Agent wishes to have the CEOs consider the issue) such
discussions are unsuccessful, then the CEOs of the Participants shall consider
the issue. A Review Group may be appointed by the Nuclear Managing Board
to review all sides of the items in dispute and make a presentation to the CEOs
concerning various viewpoints and aspects of such items in dispute.

 

9.14.1                  The process of “good-faith
negotiations” requires that each Participant set out in writing to the other
its reason(s) for adopting a specific conclusion or for selecting a particular
course of action, together with the subordinate facts supporting such
conclusion or course of action.

 

9.14.2                  The good faith negotiation process
shall also include at least two meetings of the CEOs. Unless otherwise mutually
agreed, the first meeting shall take place within ten (10) calendar days
after the Nuclear Managing Board has failed to resolve the Dispute. Unless
otherwise mutually agreed, the second meeting shall take place no more than ten
(10) calendar days later.

 

9.14.3                  In the event the Participants remain
unsuccessful in resolving a Dispute for a period of fifty (50) days after the
initiation of the good faith negotiation process, then such unresolved item in
dispute shall be resolved by the Participants’ Agent in a manner consistent
with Prudent Utility Practice and all other elements of such plan or budget shall
be deemed approved by the Nuclear Managing Board and binding on the
Participants; provided, that any Participant may proceed immediately to
non-binding arbitration (if desired by any Participant) or litigation
concerning the Dispute; provided,

 

53

 

further that if the sum of GPC’s and its Affiliates’ Weighted Ownership
Interest in the Additional Units is at any time below 10%, then actions of the
Nuclear Managing Board with respect to planned improvement projects related to
the Additional Units pursuant to this Agreement shall be conducted on the basis
of Requisite Owner Action.

 

9.14.4                  Each Participant hereby agrees that
all statements made in the course of dispute resolution, as contemplated in
this Section 9.14, shall be confidential and shall not be disclosed to or
shared with any third parties (other than any person whose presence is
necessary to facilitate the dispute resolution process). Each Participant
agrees and acknowledges that no statements made in or evidence specifically
prepared for dispute resolution under Section 7.9 shall be admissible for
any purpose in any subsequent litigation.

 

9.14.5                  Non-binding arbitration shall be
conducted as set forth below:

 

9.14.5.1                                                         The
Participant calling for arbitration shall give written notice to all other
Participants, setting forth in such notice in adequate detail the nature of the
dispute, the amount or amounts, if any, involved in such dispute, and the
recommendation sought by such arbitration proceedings, and, within twenty (20)
days from receipt of such notice, any other Participant may, by written
response to the first Participant and all other Participants, submit its
statement of the matter at issue and set forth in adequate detail additional
related matters or issues to be arbitrated. Thereafter, the Participant first
submitting its notice of the matter at issue shall have ten (10) days in
which to submit a written rebuttal statement, copies of which shall be given to
all other Participants. Within forty (40) days following delivery of the
written notice pursuant to Section 9.14.5.1 hereof, the Nuclear Managing
Board shall meet for the purpose of

 

54

 

selecting arbitrators. Each member of the Nuclear Managing Board shall
designate one arbitrator (hereinafter “Designated Arbitrator”). The Designated
Arbitrators shall meet within twenty (20) days following their designation and
shall select an additional independent arbitrator (hereinafter the “Independent
Arbitrator”). If the Designated Arbitrators shall fail to select an Independent
Arbitrator within said twenty day period, then the Designated Arbitrators shall
request from the American Arbitration Association (or a similar organization if
the American Arbitration Association should not at the time exist) a list of
arbitrators who are qualified and eligible to serve as hereinafter provided. The
Designated Arbitrators selected by the Participants shall take turns striking
names from the list of arbitrators furnished by the American Arbitration
Association, and the last name remaining on said list shall be the Independent
Arbitrator. The Independent Arbitrator shall be a person skilled and
experienced in the field which gives rise to the dispute, and no person shall
be eligible for appointment as the Independent Arbitrator who is an officer,
employee, or agent of any of the parties or any affiliate of any of the parties
to the dispute or is otherwise interested in the matter to be arbitrated.

 

9.14.5.2                                                         Except
as otherwise provided in this Section 9.14, the arbitration shall be
governed by the rules and practice of the American Arbitration Association
(or the rules and practice of a similar organization if the American
Arbitration Association should not at that time exist) from time to time in
force, except that if such rules and practice, as modified herein, shall
conflict with state or Federal law then in force which are specifically
applicable to such arbitration proceedings, such law shall govern.

 

55

 

9.14.5.3                                                         The
arbitrators shall hear evidence submitted by the respective Participants and
the Independent Arbitrator may call for additional information, which
additional information shall be furnished by the Participant having such
information. The recommendation of the arbitrators respecting the dispute shall
be determined by the Independent Arbitrator with the concurrence of not less
than one of the Designated Arbitrators if there are only two of them or two of the
Designated Arbitrators if there are more than two of them.

 

9.14.5.4                                                         The
recommendation of the arbitrators shall not be binding upon the Nuclear
Managing Board or the Participants, nor shall the participation of any member
of the Nuclear Managing Board or any Participant in the arbitration be deemed
to constitute a waiver of any right, authority, obligation or remedy of such
Participant, under this Agreement or any Participation Agreement.

 

9.14.5.5                                                         Costs
incurred by all of the arbitrators in conduct of any arbitration and the
compensation paid to the Independent Arbitrator shall be paid as follows:

 

9.14.5.5.1                                                In the
event the recommendations of the Independent Arbitrator are adverse to the
Participant or Participants that initiated the arbitration then all of such
costs and compensation shall be paid by such Participant or Participants;
provided that if two or more Participants have joined in the initiation of such
arbitration, they shall share in the payment of such costs and compensation as
they shall agree.

 

9.14.5.5.1                                                In the
event the recommendations of the Independent Arbitrator are favorable to the
Participant or Participants that initiated the

 

56

 

arbitration, then each of the Participants that would be affected by
the implementation of such recommendations shall pay a proportionate share of
such costs equal to its joint ownership share in Each Plant divided by sum of
the joint ownership shares in Each Plant of all Participants that are so affected.

 

9.14.5.6                                                         All
costs incurred by any Participant in participating in any arbitration shall be
borne and paid by such Participant without recourse against any other
Participant, except in the event that the Independent Arbitrator shall find
that any claim of the Participant or Participants that initiated such claim was
frivolous or totally without merit, then such initiating Participant or
Participants shall reimburse each other Participant for its costs reasonably
incurred in its defense against such claim.

 

9.14.5.7                                                         No
arbitration shall delay performance in accordance with the Nuclear Operating
Agreement, any Participation Agreement, this Agreement or any successor
agreements with respect to Plant Hatch, the Existing Units or the Additional
Units, or otherwise affect rights arising under any such agreements.

 

9.15                           Accounting
Methodology. The current accounting methodology and practices in effect
among some or all of the Participants as of the Effective Date of this
Agreement, including the agreements reached by the Joint Committee with some or
all of the Participants, as reflected in (i) the minutes of the Joint
Committee meetings held on August 20, 1984, respecting the methodology for
computing GPC’s A&G expenses, and on April 18, 1983 and April 15,
1985 (and the April 1, 1985 minutes of the Joint Subcommittee for Finance
and Accounting incorporated therein), respecting the 180-Day Rule, (ii) the
minutes of the Joint Subcommittee for Power Generation meeting on February 27,
1988, respecting Joint Owners Revenue Allocations and Plant Hatch inventory
accounting methodology, (iii) the January 18, 1990,

 

57

 

revision to the A&G methodology, (iv) the May 8, 1979,
Compromise and Settlement Agreement between GPC and MEAG, (v) the minutes
of the Joint Subcommittee for Finance and Accounting meeting on February 12,
1991, respecting A&G methodology, (vi) the letter dated February 29,
1992, from Eugene Heckl to Rick Cook respecting the agreed A&G methodology
from the February 12, 1991 agreement, (vii) the minutes of the Joint
Subcommittee for Finance and Accounting on February 2, 1981, respecting
depository accounts, and (viii) the letter dated July 9, 2003, from
Gregg Cook to Mary Jackson concerning the use of the DMG A&G methodology
for MEAG, shall all remain in effect insofar as they apply to Plant Hatch or
Plant Vogtle until such time as such methodology, practices or agreements shall
be amended, modified or revoked by the Nuclear Managing Board, or by GPC and
the affected Participants, as appropriate.

 

Section 9.16                                Remedies.

 

(a)                                  Notwithstanding
the provisions of Section 9.14 of this Agreement, each Participant
acknowledges, understands and agrees that a breach of the requirements on the part of
any Participant, including the Agent, to provide information to another
Participant or Participants pursuant to the terms of this Agreement will result
in irreparable damage and harm to the non-breaching Participant and that the
non-breaching Participant will not have an adequate remedy at law in the event
of any such breach. Each Participant, therefore, agrees that in the event of a
breach or threatened breach of any such requirements, the non-breaching
Participant may at its election and in any court of competent
jurisdiction: (a) obtain specific performance by the breaching Participant
of such requirements to provide information; (b) obtain temporary,
preliminary and permanent injunctive relief to prevent noncompliance with or
breaches of such requirements to provide information; or (c) pursue any
one or more of the foregoing or any other

 

58

 

remedy available to it. Each Participant hereby waives any requirement
that a non-breaching Participant post any bond or other security in connection
with the enforcement of such requirements to provide information. In the event
that any action should be brought to enforce the provisions of such
requirements to provide information, no Participant will allege, and each
Participant hereby waives, the defense or counterclaim that there is an
adequate remedy at law.

 

(b)                                 A
non-breaching Participant will not, by seeking or obtaining any particular
relief, be deemed to have precluded itself from obtaining any other relief to
which it may be entitled.

 

(c)                                  No
delay or failure to exercise any right or remedy shall impair the right to
exercise any such right or remedy or be construed to be a waiver of such right
or remedy or of any default by a Participant.

 

9.17                           Operating
Agent Authority. Notwithstanding any other provisions of this Agreement,
the Participants acknowledge that for so long as the Nuclear Operating
Agreement is in effect the Operating Agent has the exclusive authority to
operate and maintain Each Plant pursuant to Article II of the Nuclear Operating
Agreement.

 

9.18                           Amended
and Restated Nuclear Managing Board Agreement Superseded. This Agreement
amends and restates in its entirety the Amended and Restated Nuclear Managing
Board Agreement among GPC, OPC, MEAG and Dalton dated as of July 1, 1993. Upon
the execution and effectiveness of this Agreement, the Amended and Restated
Nuclear Managing Board Agreement among GPC, OPC, MEAG and Dalton dated as of July 1,
1993 will be superseded and replaced by this Agreement and will have no further
force or effect.

 

59

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers and their respective
seals to be affixed as of the day and year first above written.

 

 

	
   

  	
  GEORGIA POWER COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael D. Garrett

  	
   

  
	
  Attest:

  	
  Its:

  	
  President and CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/  Daniel Lowery

  	
   

  	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OGLETHORPE POWER CORPORATION

  
	
   

  	
  (AN ELECTRIC MEMBERSHIP

  
	
   

  	
  CORPORATION)

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas A. Smith

  	
   

  
	
  Attest:

  	
  Its:

  	
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Patricia N. Nash

  	
   

  	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MUNICIPAL ELECTRIC AUTHORITY OF 

  GEORGIA

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert P. Johnston

  	
   

  
	
  Attest:

  	
  Its:

  	
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ James E. Fuller

  	
   

  	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CITY OF DALTON, GEORGIA

  
	
   

  	
  BOARD OF WATER, LIGHT AND SINKING 

  FUND COMMISSIONERS

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Don Cope

  	
   

  
	
  Attest:

  	
  Its:

  	
  President & CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Pam Witherow

  	
   

  	
   

  	
   

  	
   

  
	
  Clerk

  	
   

  	
   

  	
   

  

 

60

 

APPENDIX “A”

 

STANDARDIZED GUIDELINES FOR MAINTENANCE

AND REFUELING OUTAGE SCHEDULES

 

On or before August 15 of each calendar year, the Operating Agent
shall prepare and submit to each Participant a written scheduled outage plan
for each unit of Each Plant to be used in the Fuel Optimization and Evaluation
System process for the ensuing five calendar years.

 

Each plan shall describe in reasonable detail the estimated time and
duration of each outage.

 

Should any major changes be made to the maintenance and refueling
schedules within a calendar year, the Operating Agent shall solicit input from
each Participant pursuant to Section 5.2 and provide each Participant with
a revised schedule.

 

1

 

STANDARDIZED GUIDELINES FOR

ENERGY ESTIMATES BY UNIT

 

On or before August 15 of each calendar year, the Operating Agent
shall prepare and submit to each Participant a written energy estimate for each
unit of Each Plant as currently presented in the energy budget. This energy
estimate shall be for the ensuing five calendar years for such units. The
energy estimate shall project the estimated operating level of each unit during
such period based on economic dispatch. The estimate will be developed
utilizing the best available data at the time.

 

2

 

STANDARDIZED GUIDELINES FOR OPERATION

AND MAINTENANCE BUDGET

 

On or before August 15 of each calendar year, the Operating Agent
shall prepare and submit to each Participant a written budget estimate of the
costs of Operation and Maintenance Services (other than fuel) anticipated to be
incurred for the ensuing five calendar years for each unit of Each Plant. Each
budget estimate shall contain those expected costs which are anticipated to be
chargeable, under the terms of one or more of the Participation Agreements, to
such units including outage costs. Each budget also shall separately identify
those costs which are anticipated to be incurred by Southern Nuclear pursuant
to agreements with any of its Affiliates. Each budget estimate to be submitted
under this subsection shall be based on information reasonably available.

 

Each budget shall be supported by detail reasonably adequate for the
purpose of each party’s review thereof and shall be formatted such that for the
next calendar year each month’s estimated costs are listed by applicable FERC
account numbers.

 

In addition, a report on materials and supplies purchases should be
provided for the next calendar year.

 

3

 

STANDARDIZED GUIDELINES FOR NEW INVESTMENT
BUDGETS

 

On or before August 15 of each calendar year, the Operating Agent
shall prepare and submit to each Participant of such jointly-owned plants and
associated switchyards a written budget estimate of the costs of New Investment
Services (other than nuclear fuel) anticipated to be incurred during the next
calendar year at such plant. Also to be included in the New Investment Budget
estimate are any associated projects which may be charged to a Participant
on the basis of its ownership pursuant to one or more of the Participation
Agreements. This budget estimate is to consist of project expenditure (“PE”)
sheets for each project and a FERC distribution table for each PE. For the five-year
forecast period, a summary of estimates of capital expenditures and retirements
will be provided.

 

Each budget estimate to be submitted under this subsection shall
be based on information reasonably available. Each budget estimate shall be
supported by detail reasonably adequate for the purpose of each party’s review
thereof. The budget shall be formatted such that each month’s estimated costs
are listed by applicable FERC account number.

 

4

 

STANDARDIZED GUIDELINES FOR FUEL PLANS

 

On or before
September 15 of each calendar year, the Operating Agent shall prepare and
submit to each of the Participants a ten-year fuel management plan for each
unit of Each Plant. Each Fuel Plan shall describe in reasonable detail each
action or contemplated action and payment and the dates thereof, core usage and
design burnup, estimated fueling dates and the energy expected to be generated
by each unit for each fuel period of the Fuel Plan, a cash flow analysis of
forecasted expenditures and credits for each Participant for each major
component of the fuel cycle by years, for the ten-year period covered by the
Fuel Plan, and cash flow by months for the first five years of such ten-year
plan period. The Operating Agent may amend the Fuel Plan from time to time as
it deems appropriate shall solicit input from each Participant pursuant to
Section 5.2 and shall deliver to each of the Participants a copy of such
amended Fuel Plan.

 

A narrative of
expected activity for the ensuing calendar year at Plants Hatch, the Existing
Units and Additional Units should be provided.

 

5Exhibit 10.1

 

Separation Agreement and General Release

 

This Agreement is made by and between ArQule, Inc.,
a Delaware corporation, with its principal place of business at 19 Presidential
Way, Woburn, MA 01801 (the “Company”) and Louise Mawhinney (“Employee”). In
consideration of the mutual covenants contained herein, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.                                       Separation of Employment. Employee hereby resigns her
employment with the Company effective as of a date no later than Friday, October 13,
2006 (“Separation Date”), provided, however, that if Employee obtains other
employment prior to October 13, 2006, Employee may resign and shorten
the Separation Date to such earlier date as Employee shall notify the Company
in writing, and provided further that if the Company hires a new Chief
Financial Officer prior to October 13, 2006, the Company may shorten
the Separation Date to such earlier date as the Company shall notify Employee
in writing. However, in no event shall the Separation Date be later than October 13,
2006. In addition, Employee shall resign her position as an officer of the
Company effective as of the Separation Date by executing a letter in the form attached
as Exhibit A.

 

2.                                       Severance Payment. Employee acknowledges that, as of the
Separation Date, Employee will be paid in full for any and all wages, including
accrued but unused vacation time. Provided that Employee first signs this
Agreement and returns it to the Company, the Company will continue to pay
Employee’s then-current base salary (the “Severance Payment”) for a period
beginning on the Separation Date and ending on October 13, 2006 (the “Severance
Period”). For example, if Separation Date is August 1, 2006 (whether by
Employee’s or Company’s election), the Severance Period will run from August 1,
2006 through October 13, 2006. The Severance Payment will be paid out in
substantially equal bi-weekly installments and will be subject to legally
required and voluntarily authorized deductions. Employee specifically
acknowledges that the Severance Payment and the employment period afforded
Employee under this Agreement exceed any legal payment obligation of the
Company and provide valid consideration for the General Release contained in
this Agreement.

 

3.                                       Insurance and Other Benefits. Unless otherwise provided for
expressly in this Agreement, all benefits provided by the Company to Employee
will cease as of the Separation Date.

 

a.                                       Group Health, Dental and Vision
Coverage. A COBRA notice will
issue on the Separation Date. If Employee is eligible for and elects to
continue health and/or dental insurance coverage through COBRA, the Company
will pay 80% of the monthly premium for such insurance, as applicable, through
the Severance Period. Any continuing coverage after that date will be at
Employee’s sole expense as provided by federal COBRA law. Eligibility to
continue insurance coverage ceases upon the termination of any period allowed
by law and is at all times subject to the terms and conditions of the
applicable plan(s).

 

 

b.                                      Life Insurance Coverage. Upon the Separation Date, Employee may apply
to convert the existing group life insurance to an individual policy at
Employee’s own expense.

 

c.                                       Retirement Plans. Employee shall be entitled to Employee’s vested benefit in the Company’s 401(k) plan as of the
Separation Date, as determined by the plan provision. Service credit, salary
reduction and Company contribution shall cease as of the Separation Date.

 

d.                                      Disability Insurance. Disability insurance coverage will
cease as of the Separation Date, and there is no right of individual
conversion.

 

e.                                       Vacation Pay. Employee will receive full payment for all
accrued but unused vacation as of the Separation Date. Accrual of vacation time
shall cease as of the Separation Date.

 

f.                                         Unemployment. The Company shall not contest Employee’s
claim, if any, for unemployment insurance benefits, it being understood and
agreed that Employee’s entitlement to unemployment insurance benefits shall be
determined solely by the Massachusetts Division of Unemployment Assistance.

 

g.                                      Stock, Options, Payments. Whatever Employee
is entitled to, if anything, by way of Company stock, restricted stock, stock
options or repayment of salary deductions for fractional shares purchased shall
be governed by the terms of those Company stock option plan(s), and for all
such purposes Employee will be considered an employee of the Company until the
Separation Date.

 

h.                                      Outplacement. The Company will provide to Employee outplacement
support, as described in the materials distributed by the Company to Employee
on the Separation Date.

 

4.                                       Return of Property. On the Separation Date, Employee shall
return all property belonging to the Company, including but not limited to
papers, files and documents (physical or electronic), computers, telephones,
PDAs, reference guides, equipment, keys, identification cards, credit cards,
software, computer access codes, disks and institutional manuals. Employee
shall not retain any copies, duplicates, reproductions or excerpts thereof. In
addition, Employee warrants that Employee has deleted any information belonging
to the Company from any personal computer that Employee may have at home
or elsewhere (other than the Company’s offices) without retaining any copies of
any such information, in electronic or other format, and will permit the
Company to have access to such computer on reasonable notice to confirm such
deletion.

 

5.                                             Nondisclosure of Confidential Information. Employee
acknowledges that during the course of Employee’s employment
with the Company Employee has become
acquainted with and/or developed confidential information belonging to the
Company and its customers. Employee agrees not to use to Employee’s own advantage or to disclose, except as required by law, to
any person or entity any confidential information of the Company or of any past
or present customer of the Company, including but not limited to

 

 

financial
data or projections, customer lists, projects, economic information, systems,
plans, methods, procedures, operations, techniques, know-how, trade secrets or
merchandising or marketing strategies. Moreover, Employee acknowledges and
affirms that Employee continues to be bound by the terms of the Employee
Non-Disclosure and Inventions Agreement which Employee executed
at the commencement of Employee’s employment with the Company or its subsidiary
(“Employee Non-Disclosure and Inventions Agreement”), a copy of which is
attached as Exhibit B, and the terms of which are incorporated herein by
reference.

 

6.                                             Cooperation. Employee
agrees and covenants as a material term of this Agreement to provide reasonable
cooperation to the Company, including but not limited to, with respect to
matters previously within Employee’s scope or course of employment with the
Company. The Company will reimburse Employee for any time expended on behalf of
the Company at the request of the Company after the Severance Period at an
agreed-to per diem or per hour rate (or pro-rata share thereof) and reimburse
Employee for out-of-pocket expenses related thereto. In the event that the
Company determines that such expense reimbursement is or would be prohibited by
law, the Company promptly shall notify Employee to such effect, and such
reimbursement shall not be made to Employee.

 

7.                                             Current General Release. Except with respect to any rights,
obligations or duties arising out of this Agreement, and in consideration of
the Severance Payment and other benefits set forth in this Agreement, Employee
hereby releases and discharges the Company and its officers, directors,
partners, stockholders, trustees, attorneys, insurers, representatives, agents
and employees, in both their individual and corporate capacities (collectively,
the “Releasees”), of and from any and all complaints, charges, lawsuits or
claims for relief of any kind by Employee that Employee now
has or ever had against the Releasees or any one of them, whether known or
unknown, arising out of any matter or thing that has happened before the
signing of this Agreement, including but not limited to (i) claims for
tort or contract, or relating to salary, wages, bonuses, severance,
commissions, stock, and stock options, the breach of any oral or written
contract or promise, misrepresentation, defamation, and interference with
prospective economic advantage, interference with contract, intentional and
negligent infliction of emotional distress, negligence, breach of the covenant
of good faith and fair dealing, medical, disability or other leave; (ii) claims
arising out of, based on, or connected with Employee’s employment,
including terms and conditions of employment, by the Company and the
termination of that employment, including but not limited to claims arising
under Section 806 of the Sarbanes-Oxley Act of 2002, and any other claims
alleging retaliation of any nature; (iii) claims under G.L. c. 93A or in
any way related to restricted stock, stock options, or vesting or exercise of
the same, or for alleged securities violations; and (iv) claims for
unlawful employment discrimination of any kind, including discrimination due to
age, sex, disability or handicap, including failure to offer reasonable
accommodations, race, color, religion, pregnancy, sexual orientation, national
origin, or sexual or other unlawful harassment arising under or based on the
following, all as amended: Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act of 1967 (“ADEA”), the Americans with
Disabilities Act (“ADA”), the Equal Pay Act of 1963, the Fair Labor Standards
Act of 1938, the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”),
the Family and Medical Leave Act, the

 

 

Massachusetts
Fair Employment Practices Act, the Massachusetts Civil Rights Act, the
Massachusetts Equal Rights Law, the Massachusetts or United States
Constitution, including any right of privacy thereunder, and any other state or
federal equal employment opportunity or anti-discrimination law, policy, order,
regulation or guidelines affecting or relating to claims or rights of employees.
It is further expressly agreed and understood by Employee that
the release contained herein is a GENERAL RELEASE.

 

8.                                             Covenant Not to Sue. Employee represents and warrants that
Employee has not filed any complaints, charges, or claims for relief against
the Releasees, or any one of them, with any local, state or federal court or
administrative agency, any professional or regulatory board, or any other
agency or entity. Employee further
warrants that Employee has not previously assigned or transferred any of the claims
that are the subject of the General Release contained herein. Employee agrees
and covenants not to sue or bring any claims or charges against the Releasees,
or any one of them, with respect to matters subject to the General Release
contained herein. Employee further agrees not to institute any claim, charge,
complaint or lawsuit to challenge the validity of the General Release or the
circumstances surrounding its execution. In the event that Employee institutes any action covered by this Section, that action
shall be dismissed upon presentation of this Agreement and Employee shall
reimburse the affected Releasees for all legal fees and expenses incurred in
defending such claim and obtaining its dismissal.

 

9.                                             Exclusion. Nothing in this Agreement shall preclude Employee
from filing a charge or complaint, including a challenge to the validity of
this Agreement, with the Equal Employment Opportunity Commission, the
Massachusetts Commission Against Discrimination or any other state
anti-discrimination agency or from participating or cooperating in any
investigation or proceeding conducted by any of governmental agency. In the
event that a charge or complaint is filed with any administrative agency by
Employee or in the event of an authorized investigation, charge or lawsuit
filed by any administrative agency, Employee expressly waives and shall not
accept any monetary award or damages, costs or attorneys’ fees of any sort
therefrom against the Company or any of the Releasees.

 

10.                                       Execution of Second General Release. Employee acknowledges
that her right to receive the severance payments and benefits specified in this
Agreement is explicitly conditioned on her execution and delivery on the
Separation Date with no revocation thereafter of a second general release in
the form attached hereto as Exhibit C. By execution of this Agreement, Employee acknowledges and agrees that
the severance payments and benefits specified herein are and shall be good and
sufficient consideration for such second general release.

 

11.                                       Nonadmissions Clause. It is understood and agreed that this
Agreement does not constitute any admission by the Company that any action
taken with respect to Employee was unlawful or wrongful, or that such action
constituted a breach of contract or violated any federal or state law, policy, rule or
regulation.

 

 

12.                                       Nondisclosure of this Agreement. Except as set forth in Section 9,
Employee expressly agrees that the nature and terms of this Agreement are
confidential, and expressly agrees not to discuss or disclose them, or the
facts and contentions contained therein, without the prior written consent of
the Company, with or to any person, except to Employee’s accountant, tax
advisor, attorney, immediate family, therapist or healthcare provider, if any,
the Internal Revenue Service, state tax authorities, or as required by law. If
Employee makes any disclosure authorized by this Section, Employee shall apprise the person or entity to whom such disclosure
is made of the confidential nature of the terms and conditions of the Agreement
and shall use reasonable and good faith efforts to secure the confidentiality
of the information so disclosed. In particular, if Employee is compelled to
disclose the terms or conditions of this Agreement in response to a subpoena or
discovery request issued in litigation, Employee shall
provide the Company with a copy of the subpoena or discovery request
immediately following receipt by the Employee in order to provide the Company
with the opportunity to seek a protective order from the appropriate court.

 

13.                                       Nondisparagement. Employee agrees not to disparage or make
negative statements about the Company or any of the Company’s programs or
products. The Company agrees to instruct all key members of the Company’s
executive management team not to disparage or make negative statements about
Employee, provided that nothing in this paragraph shall be construed in any way
to restrict or prevent Employee or the Company from providing truthful
information to, or truthful responses to requests from, their respective
auditors, accountants, investment bankers, insurers, potential purchasers,
successors, acquirers, or any other persons or entities as required by business
necessity or for a legitimate business reason. Nothing in this Agreement shall
bar Employee or the Company from providing truthful testimony in any legal
proceeding, or in responding to any request from any governmental agency, or as
required by law, or by court order or other legal process.

 

14.                                       References. Any reference request on Employee will be
directed to Anthony S. Messina, or his successor as Vice President of Human
Development, who will respond in accordance with Company practice with only
Employee’s dates of employment and job titles and by stating that Company
policy precludes the provision of any further information to the inquirer.

 

15.                                       Breach. Employee agrees that the consideration contained in
this Agreement which flows to Employee from the
Company is subject to termination, reduction, disgorgement or cancellation in
the event that Employee takes any
action or engages in any conduct, including failure to perform, deemed by the
Company to be in violation of this Agreement. In the event that Employee
institutes legal proceedings to enforce this Agreement, Employee agrees that the sole remedy available to Employee shall be enforcement of the terms of this Agreement, but
that under no circumstances shall Employee be entitled to receive or collect
any damages for Claims that Employee has released under this Agreement in accordance
with the General Release contained in Section 7 of this Agreement.

 

 

16.                                       Governing Law. This
Agreement shall be governed by the laws of the Commonwealth of Massachusetts
applicable to contracts made and to be performed entirely within such jurisdiction
and without giving effect to its choice or conflict of laws rules or
principles. Each of the parties irrevocably submits to the exclusive
jurisdiction of the courts of the Commonwealth of Massachusetts and of any
United States federal court sitting in the Commonwealth of Massachusetts in any
action or proceeding arising out of or relating to this Agreement, and
irrevocably agrees that all claims in respect of such action or proceedings
shall be heard and determined in any such Massachusetts or United States
federal court.

 

17.                                       Time to Consider Agreement.

 

a.                                       Employee
acknowledges that Employee has been given
the opportunity to consult an attorney of Employee’s choice before signing this
Agreement.

 

b.                                      Employee
acknowledges that Employee has been given the opportunity to review and
consider this Agreement for at least twenty-one (21) days before signing it and
that, if Employee has signed this Agreement in less than that time, Employee has done so voluntarily in order to obtain sooner the
benefits of this Agreement.

 

c.                                       Employee
further acknowledges that Employee may revoke
this Agreement within seven (7) days of signing it, provided that this
Agreement will not become effective until such seven day period has expired. To
be effective, any such revocation must be in writing and delivered to the
Company’s principal place of business (as set forth in the preamble to this
Agreement) to the attention of Anthony S. Messina by close of business on the
seventh day after signing and must expressly state Employee’s intention to
revoke the Agreement. The eighth day following Employee’s execution hereof
shall be deemed the “Effective Date” of this Agreement.

 

d.                                      The
parties also agree that the release provided by Employee in this Agreement does
not include claims under the ADEA arising after the date Employee signs this
Agreement.

 

e.                                       Employee
further acknowledges and agrees that the consideration Employee is to receive under this Agreement exceeds the
consideration to which Employee would
otherwise be entitled to upon her termination from employment with the Company.

 

18.                                 Representations. Employee acknowledges that in exchange for
entering into this Agreement Employee has received
good and valuable consideration in excess of that to which Employee would otherwise have been entitled in the absence of this
Agreement. This consideration includes, but is not limited to, the Severance
Payment described in Section 2 and benefits set forth in Section 3. Employee
further acknowledges the sufficiency of that consideration. The Company and
Employee attest that no other representations were made regarding this
Agreement other than those contained herein.

 

 

19.                                 Severability. If any of the terms of this Agreement shall be
held to be invalid and unenforceable, the remaining terms of this Agreement are
severable and shall not be affected thereby. However, should the General
Release or Covenant Not to Sue provisions of this Agreement be declared or
determined by any tribunal, administrative agency or court of competent
jurisdiction to be illegal or invalid, and should Employee thereupon seek to
institute any claims that would have been within the scope of the General
Release or Covenant Not to Sue, the Company shall be entitled to immediate
repayment, and Employee shall immediately return, the Severance Payment.

 

20.                                 Entire Agreement. This Agreement and its Exhibits constitute
the entire agreement between the parties about or relating to the Company’s
obligations to Employee with respect to Employee’s terms
and conditions of employment, and termination of employment, and fully
supersedes any and all prior agreements or understandings between the parties
other than the Employee Non-Disclosure and Inventions Agreement, referenced in Section 5
above. The terms of this Agreement are contractual in nature and not a mere
recital, and they shall take effect as a sealed document. This Agreement may not
be modified orally, but only by agreement in writing signed by both parties.

 

21.                                 Interpretation. Each party agrees that in any dispute
regarding the interpretation or construction of this Agreement, no presumption
shall operate in favor of or against any party by virtue of such party’s role
in drafting, or not drafting, the terms and conditions set forth herein.

 

22.                                 Notice. Any notice under this Agreement given to Employee,
shall be by certified mail, return receipt requested, to the address set forth
in the preamble to this Agreement.

 

Any notice under this Agreement given to
Company, shall be to:

 

Anthony S. Messina

Vice President, Human Development

ArQule, Inc.

19 Presidential Way

Woburn, MA 01801

 

23.                                 Counterparts. This Agreement may be executed in two or
more of counterparts, each of which when executed and delivered constitutes an
original of this Agreement, but all the counterparts shall together constitute
one and the same agreement. No counterpart shall be effective until each
party has executed at least one counterpart.

 

24.                                 Access to Legal Counsel. EMPLOYEE REPRESENTS, WARRANTS AND
ACKNOWLEDGES THAT EMPLOYEE HAS CAREFULLY
READ ALL OF THIS AGREEMENT, THAT EMPLOYEE HAS HAD THE
OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL CONCERNING THE LEGAL EFFECT OF THIS
AGREEMENT AND THE ADVISABILITY OF ENTERING INTO THIS AGREEMENT AND GIVING THE
GENERAL RELEASE PROVIDED FOR HEREIN, AND THAT EMPLOYEE FULLY
UNDERSTANDS THE SAME. EMPLOYEE FURTHER REPRESENTS, WARRANTS AND ACKNOWLEDGES
THAT

 

1

 

EMPLOYEE IS EXECUTING THIS AGREEMENT WITH THE INTENT TO GRANT THE
GENERAL RELEASE SET FORTH HEREIN, WITHOUT RELIANCE UPON ANY STATEMENT OR
REPRESENTATION OF THE COMPANY OR ANY REPRESENTATIVE, EMPLOYEE, DIRECTOR OR
ATTORNEY OF THE COMPANY OTHER THAN AS SET FORTH HEREIN, AND THAT EMPLOYEE HAS SIGNED THIS AGREEMENT ON EMPLOYEE’S OWN
BEHALF AND OF EMPLOYEE’S OWN FREE WILL.

 

[the remainder of this page is
left blank intentionally]

 

 

IN WITNESS WHEREOF, the
Company and Employee have duly
executed this Agreement as of the day and year written below.

 

 

	
  ArQule, Inc.

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Anthony S. Messina

  	
   

  
	
  Name:

  	
  Anthony S. Messina

  
	
  Title:

  	
  Vice President, Human Development

  
	
  Date: 

  	
  April 20, 2006

  
				

 

 

Louise Mawhinney

 

	
  /s/ Louise A. Mawhinney

  	
   

  
	
  Date: April 21, 2006

  

 

 

Exhibit A

 

             ,
2006

 

ArQule, Inc.

19 Presidential Way

Woburn, MA 01801

 

To Whom it May Concern:

 

This letter is to notify you that I, Louise
Mawhinney, do hereby resign from all officer positions that I hold with the
ArQule, Inc., effective immediately.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  Louise Mawhinney

  

 

 

Exhibit B

 

(copy of Employee
Non-Disclosure and Inventions Agreement)

 

 

Exhibit C

 

General
Release and Covenant Not to Sue

 

This General Release and Covenant Not to Sue
(“General Release”) is made by and between ArQule, Inc., a Delaware
corporation, with its principal place of business at 19 Presidential Way,
Woburn, MA 01801 (the “Company”) and Louise Mawhinney (“Employee”). As a
condition of the payment of severance benefits identified in the Separation
Agreement and General Release between the Company and Employee (the “Agreement”),
and in consideration of such severance benefits, the parties agree as follows:

 

1.                                       General Release. Except with respect to any rights,
obligations or duties arising out of the Agreement, and in consideration of the
Severance Payment and other benefits set forth in the Agreement, Employee
hereby releases and discharges the Company and its officers, directors,
partners, stockholders, trustees, attorneys, insurers, representatives, agents
and employees, in both their individual and corporate capacities (collectively,
the “Releasees”), of and from any and all complaints, charges, lawsuits or
claims for relief of any kind by Employee that Employee now
has or ever had against the Releasees or any one of them, whether known or
unknown, arising out of any matter or thing that has happened before the signing
of this General Release, including but not limited to (i) claims for tort
or contract, or relating to salary, wages, bonuses, severance, commissions,
stock, and stock options, the breach of any oral or written contract or
promise, misrepresentation, defamation, and interference with prospective
economic advantage, interference with contract, intentional and negligent
infliction of emotional distress, negligence, breach of the covenant of good
faith and fair dealing, medical, disability or other leave; (ii) claims
arising out of, based on, or connected with Employee’s employment,
including terms and conditions of employment, by the Company and the
termination of that employment, including but not limited to claims arising
under Section 806 of the Sarbanes-Oxley Act of 2002, and any other claims
alleging retaliation of any nature; (iii) claims under G.L. c. 93A or in
any way related to restricted stock, stock options, or vesting or exercise of
the same, or for alleged securities violations; and (iv) claims for
unlawful employment discrimination of any kind, including discrimination due to
age, sex, disability or handicap, including failure to offer reasonable
accommodations, race, color, religion, pregnancy, sexual orientation, national
origin, or sexual or other unlawful harassment arising under or based on the
following, all as amended: Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act of 1967 (“ADEA”), the Americans with
Disabilities Act (“ADA”), the Equal Pay Act of 1963, the Fair Labor Standards
Act of 1938, the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”),
the Family and Medical Leave Act, the Massachusetts Fair Employment Practices
Act, the Massachusetts Civil Rights Act, the Massachusetts Equal Rights Law,
the Massachusetts or United States Constitution, including any right of privacy
thereunder, and any other state or federal equal employment opportunity or
anti-discrimination law, policy, order, regulation or guidelines affecting or
relating to claims or rights of employees. It is further expressly agreed and
understood by Employee that the
release contained herein is a GENERAL RELEASE.

 

 

2.                                       Covenant Not to Sue. Employee represents and warrants that
Employee has not filed any complaints, charges, or claims for relief against
the Releasees, or any one of them, with any local, state or federal court or
administrative agency, any professional or regulatory board, or any other
agency or entity. Employee further
warrants that Employee has not previously assigned or transferred any of the
claims that are the subject of the General Release contained herein. Employee
agrees and covenants not to sue or bring any claims or charges against the
Releasees, or any one of them, with respect to matters subject to the General
Release contained herein. Employee further agrees not to institute any claim,
charge, complaint or lawsuit to challenge the validity of the General Release
or the circumstances surrounding its execution. In the event that Employee institutes any action covered by this Section, that action
shall be dismissed upon presentation of this General Release and Employee shall
reimburse the affected Releasees for all legal fees and expenses incurred in
defending such claim and obtaining its dismissal.

 

3.                                       Exclusion. Nothing in this General Release shall preclude
Employee from filing a charge or complaint, including a challenge to the
validity of this General Release, with the Equal Employment Opportunity
Commission, the Massachusetts Commission Against Discrimination or any other
state anti-discrimination agency or from participating or cooperating in any
investigation or proceeding conducted by any of such agencies. In the event
that a charge or complaint is filed with any administrative agency by Employee
or in the event of an authorized investigation, charge or lawsuit filed by any
administrative agency, Employee expressly waives and shall not accept any
monetary award or damages, costs or attorneys’ fees of any sort therefrom
against the Company or any of the Releasees.

 

4.                                       Time to Consider General Release.

 

a.                                       Employee
acknowledges that Employee has been given
the opportunity to consult an attorney of Employee’s choice before signing this
General Release.

 

b.                                      Employee
acknowledges that Employee has been given the opportunity to review and
consider this General Release for at least twenty-one (21) days before signing
it and that, if Employee has signed this General Release in less than that
time, Employee has done so voluntarily in order
to obtain sooner the benefits of this General Release.

 

c.                                       Employee
further acknowledges that Employee may revoke
this General Release within seven (7) days of signing it, provided that
this General Release will not become effective until such seven day period has
expired. To be effective, any such revocation must be in writing and delivered
to the Company’s principal place of business (as set forth in the preamble to
this General Release) to the attention of Anthony S. Messina by close of
business on the seventh day after signing and must expressly state Employee’s
intention to revoke the General Release. The eighth day following Employee’s
execution hereof shall be deemed the “Effective Date” of the General Release.

 

 

d.                                      The
parties also agree that the release provided by Employee in this General
Release does not include claims under the ADEA arising after the date Employee
signs this General Release.

 

e.                                       Employee
further acknowledges and agrees that the consideration Employee is to receive under the Agreement exceeds the consideration
to which Employee would otherwise be entitled to
upon her termination from employment with the Company and provides valid
consideration for this General Release.

 

5.                                       Governing Law. This General Release shall be governed by the
laws of the Commonwealth of Massachusetts applicable to contracts made and to
be performed entirely within such jurisdiction and without giving effect to its
choice or conflict of laws rules or principles. Each of the parties
irrevocably submits to the exclusive jurisdiction of the courts of the
Commonwealth of Massachusetts and of any United States federal court sitting in
the Commonwealth of Massachusetts in any action or proceeding arising out of or
relating to this General Release, and irrevocably agrees that all claims in
respect of such action or proceedings shall be heard and determined in any such
Massachusetts or United States federal court.

 

IN WITNESS WHEREOF, the
Company and Employee have duly
executed this General Release as of the day and year written below.

 

 

ArQule, Inc.

 

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
  Anthony S. Messina

  
	
  Title:

  	
  Vice President, Human Development

  
	
  Date:

  	
   

  
				

 

 

	
  Louise Mawhinney

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

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