Exhibit 10.2

EXECUTION VERSION

ZEC STANDARD CONTRACT

BY AND BETWEEN

THE NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY

AND

R.E. GINNA NUCLEAR POWER PLANT, LLC

DATED: NOVEMBER 18, 2016

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EXECUTION VERSION

TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS

     2   

ARTICLE II PURCHASE AND SALE OF RIGHTS TO ZECS

     7   

ARTICLE III ZEC QUALIFICATION; OPERATING CONDITION

     8   

ARTICLE IV PAYMENT

     9   

ARTICLE V ADJUSTMENTS

     10   

ARTICLE VI RECORDS AND REPORTS

     12   

ARTICLE VII AUDIT; ALTERNATIVE PRICING SOURCE

     12   

ARTICLE VIII ASSIGNMENTS

     13   

ARTICLE IX SELLER’S REPRESENTATIONS AND WARRANTIES

     13   

ARTICLE X NYSERDA’S REPRESENTATIONS AND WARRANTIES

     14   

ARTICLE XI INDEMNIFICATION

     15   

ARTICLE XII EVENTS OF DEFAULT

     16   

ARTICLE XIII TERMINATION

     17   

ARTICLE XIV FORCE MAJEURE

     19   

ARTICLE XV ADDITIONAL PROVISIONS

     20   

ARTICLE XVI NOTICES, ENTIRE AGREEMENT, AMENDMENT, COUNTERPARTS, GOOD FAITH
NEGOTIATION

     22   

ARTICLE XVII PUBLICITY

     23   

ARTICLE XVIII CONFIDENTIALITY

     24   

 

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NYSERDA Agreement No.             

This Agreement is entered into as of November 18, 2016 (the “Contract Date”) by
and between the New York State Energy Research and Development Authority
(“NYSERDA”), a public benefit corporation, having a principal business address
of 17 Columbia Circle, Albany, New York 12203, and R. E. Ginna Nuclear Power
Plant, LLC (“Seller”), a Maryland limited liability company, having a principal
business address of 1310 Point Street, Baltimore, MD 21231. NYSERDA and Seller
are each referred to herein as a “Party” and are collectively referred to herein
as the “Parties.” All capitalized terms shall have the meanings ascribed to them
in this Agreement.

RECITALS

WHEREAS, on August 1, 2016 the New York State Public Service Commission (“PSC”
or the “Commission”) adopted a Clean Energy Standard (“CES”) program that is
intended to achieve the State of New York’s environmental, public health,
climate policy and economic goals, and to preserve carbon-free attributes of
certain existing nuclear generation resources as a bridge to the clean energy
future (Case 15-E-0302; Proceeding on Motion of the Commission to Implement a
Large-Scale Renewable Program and a Clean Energy Standard, “Order Adopting a
Clean Energy Standard,” issued and effective August 1, 2016) (the “CES Order”);
and

WHEREAS, the CES Order established, as part of the CES, a ZEC Program (as
defined below), and established a mechanism for the purchase by NYSERDA of the
ZECs (as defined below) of eligible nuclear zero-carbon electric generating
facilities that elect to participate in the ZEC Program where a public necessity
to encourage the continued creation of the attributes is demonstrated; and

WHEREAS, in accordance with criteria set forth in the CES Order, the Commission
has found that there is a public necessity to provide ZEC payments to three
nuclear facilities, including the Facility (as defined below); and

WHEREAS, Seller has elected for the Facility to participate in the ZEC Program;
and

WHEREAS, the CES Order provides a price to be paid by NYSERDA to Seller for each
ZEC delivered to NYSERDA during Tranche 1 (as defined below), and a methodology
for the calculation and determination of the price in subsequent Tranches; and

WHEREAS, the CES Order imposes an obligation on each Load Serving Entity to
invest in the preservation of certain existing at-risk nuclear zero-emissions
attributes to serve their retail customers and accordingly directs LSEs to enter
into a contractual relationship with NYSERDA for the purchase of ZECs during
each ZEC Program year based on initial forecasts of load and a balancing
reconciliation at the end of each program year; and

WHEREAS, NYSERDA anticipates that it will enter into backstop agreements (each,
a “Backstop Agreement”) with each electric distribution company (“EDC”), as
proposed in NYSERDA’s Petition filed with the Commission on August 25, 2016 and
any Commission order related to that Petition, to guarantee that each LSE covers
its obligation to buy from NYSERDA the quantity of ZECs required by the CES
Order such that NYSERDA is assured that each ZEC purchased from Seller will be
sold to LSEs; and

 

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WHEREAS, Seller agrees to sell to NYSERDA, and NYSERDA agrees to purchase from
Seller, ZECs associated with the generation of energy by the Facility and
pursuant to the ZEC Program, on the terms and subject to the conditions set
forth herein; and

WHEREAS, the Parties recognize that the 12-year Contract Term (as defined below)
is an essential item of this Agreement and that Seller has made and will make
significant investments in the Facility in reliance upon the existence of such
Contract Term.

NOW, THEREFORE, for and in consideration of the premises, the mutual promises
and agreements set forth herein and other good and valuable consideration, the
receipt, sufficiency and adequacy of which are hereby acknowledged, NYSERDA and
Seller, each intending to be legally bound, agree as follows:

Article I

Definitions

The terms defined in this Article I, whenever used in this Agreement (including
in any Exhibit hereto), shall have the respective meanings indicated below for
all purposes of this Agreement (each such meaning to be equally applicable to
the singular and the plural forms of the respective terms so defined). All
references herein to a Section, Article or Exhibit are to a Section, Article or
Exhibit of or to this Agreement, unless otherwise indicated. The words “hereby”,
“herein”, “hereof”, “hereunder” and words of similar import refer to this
Agreement as a whole (including any Exhibit) and not merely to the specific
section, paragraph or clause in which such word appears. The words “include”,
“includes”, and “including” shall be deemed, in every instance, to be followed
by the phrase “without limitation.” Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
Except as otherwise expressly provided herein, all references to “dollars” and
“$” shall be deemed references to the lawful money of the United States of
America.

“Agreement” means this ZEC Standard Contract, including Exhibits A (Standard
Terms and Conditions For All NYSERDA Agreements); B (NYSERDA Prompt Payment
Policy Statement); C (Certification Form); and D (Zero Emissions Credit
Pricing), all of which are incorporated herein and made part hereof.

“Annual ZEC Cap Amount” means either (i) 20,603,028 ZECs, if the FitzPatrick
Facility is in Commercial Operation but is not included in the Nuclear Group,
and the Nuclear Group consists of the Facility and the Nine Mile Facility,
(ii) 18,412,000 ZECs, if a Permanent Cessation of Operations occurs with respect
to the FitzPatrick Facility prior to the FitzPatrick Facility becoming included
in the Nuclear Group and the Nuclear Group consists of only the Facility and the
Nine Mile Facility, or (iii) 27,618,000 ZECs, if the Nuclear Group consists of
the Facility, the Nine Mile Facility and the FitzPatrick Facility, subject to
adjustment pursuant to Section 5.2.

 

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“Annual ZEC Cap Reduction Amount” means 666,666 ZECs, if the Nuclear Group
consists of the Facility and the Nine Mile Facility, and 1,000,000 ZECs, if the
Nuclear Group consists of the Facility, the Nine Mile Facility and the
FitzPatrick Facility.

“Applicable Law” means all applicable provisions of all constitutions, treaties,
statutes, laws (including the common law), rules, regulations, ordinances, and
codes and any order, writ, injunction, decree, judgment, award, decision or
determination of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency, authority or
instrumentality, including the NYISO tariff.

“Backstop Agreement” has the meaning set forth in the recitals to this
Agreement.

“Business Day” means a day on which Federal Reserve member banks are open for
business. A Business Day will begin at 8:00 a.m. and end at 5:00 p.m. Eastern
Prevailing Time.

“Certificate” means a certificate as defined in the NYGATS Operating Rules.

“Cessation Tranche Reduction Amount” means 18,412,000 ZECs reduced for a full
Tranche which shall be pro-rated for the remaining facilities within a Tranche
from the date any facility undergoes a Permanent Cessation of Operations.

“Cessation ZEC Reduction Amount” means 9,206,000 ZECs reduced for a full
Contract Year which shall be pro-rated for the remaining facilities within a
Contract Year from the date any facility undergoes a Permanent Cessation of
Operations.

“Claiming Party” has the meaning set forth in Section 14.2.

“Commercial Operation” means a state of operations under which the Facility is
physically generating electric energy, consistent with Good Utility Practice,
subject to outages that are consistent with Good Utility Practice, including
refueling, planned, and forced outages.

“Common Ownership” means two or more generation facilities being owned, in whole
or in part, directly or indirectly, by the same ultimate parent entity or
entities.

“Contract Date” has the meaning set forth in the preamble of this Agreement.

“Contract Term” means a term commencing on April 1, 2017 and continuing through
March 31, 2029, subject to adjustments pursuant to Article IV (Payment) and
Article V (Adjustments).

The Contract Term will be administered in six two-Contract Year Tranches, as
follows:

Tranche     1:     April     1,     2017     – March     31,     2019

Tranche     2:     April     1,     2019     – March     31,     2021

Tranche     3:     April     1,     2021     – March     31,     2023

Tranche     4:     April     1,     2023     – March     31,     2025

Tranche     5:     April     1,     2025     – March     31,     2027

Tranche     6:     April     1,     2027     – March     31,     2029

 

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“Contract Year” means a 12-month period commencing on April 1, 2017 and each
subsequent 12-month period commencing on an anniversary thereof during the
Contract Term.

“EDC” has the meaning set forth in the recitals to this Agreement.

“Effective Date” means the date on which ZEC Standard Contracts have been
executed by NYSERDA and each of the owners of the Facility, the FitzPatrick
Facility and the Nine Mile Facility.

“Enjoined” or “Enjoinment” means if any court issues a final, non-appealable
order, writ, injunction, decree, judgment, award, decision or determination that
invalidates or permanently terminates the ZEC Program or otherwise permanently
enjoins, impedes or prevents any Party from participating in the ZEC Program or
fulfilling its material obligations under this Agreement, as applicable.

“ESCO” means an “energy service company” making sales of electricity in the
State of New York.

“Extended Force Majeure Event” has the meaning set forth in Section 14.3(a).

“Facility” means the R.E. Ginna nuclear facility located in Ontario, New York
(PTID 23603).

“Facility Revenue Meter” means the meter on the high side of the main generator
step-up transformer of the busbar of the Facility (Gen PTID: 23603), which is
the meter for the Facility designated by the NYISO for measuring the output of
the Facility that is referenced in Article V of the NYGATS Operating Rules as
the Facility’s “Revenue-Quality Meter.”

“Final CES Order” has the meaning set forth in Section 13.3.

“FitzPatrick Facility” means the James A. FitzPatrick nuclear generation
facility located in Scriba, New York (PTID 23598).

“Force Majeure Event” has the meaning set forth in Section 14.1.

“Force Majeure Remedy Plan” has the meaning set forth in Section 14.3(a).

“Good Utility Practice” means any of the practices, methods or acts engaged in
or approved by a significant portion of the electric utility or the nuclear
electric power generation industry in the United States during the relevant time
period, or any of the practices, methods or 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 a reasonable
cost consistent with good business practices, reliability, safety and
expedition. Good Utility Practice is not intended to be limited to the optimum
practice or method, or act to the exclusion of all others, but rather to
delineate acceptable practices, methods, or acts generally accepted in the
region.

 

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“Governmental Authority” Any federal, state, local, municipal, judicial or other
government or any other governmental, quasi-governmental, regulatory or
administrative agency, commission, court or other authority (including for
federal purposes the NYISO) lawfully exercising or entitled to exercise any
administrative, executive, judicial, legislative, police, policy, regulatory or
taxing authority or power.

“Load-Serving Entity” or “LSE” means any entity or individual that sells retail
commodity electricity supply to an end-use customer located in New York State,
including any ESCO and each electric distribution company regulated by the PSC,
serving in their roles as electric commodity supplier of last resort,
jurisdictional municipal utilities, community choice aggregators not otherwise
served by an ESCO, customers purchasing power directly from the NYISO, and the
Long Island Power Authority and the New York Power Authority to the extent the
Long Island Power Authority and the New York Power Authority have voluntarily
agreed to act as LSEs.

“LSE Agreement” means a contract between NYSERDA and an LSE as contemplated in
the CES Order, pursuant to which NYSERDA shall sell, and LSEs shall purchase,
ZECs.

“MWh” means a unit for measuring power that is equivalent to 1,000 kilowatts of
electricity used continuously for one hour.

“Nine Mile Facility” means the Nine Mile Point nuclear generation facility,
consisting of the Nine Mile Unit 1 and Unit 2 facilities, located in Oswego, New
York (PTID 23575 and 23744, respectively).

“NRC” means the U.S. Nuclear Regulatory Commission and any successor agency
thereto.

“Nuclear Group” means a group of nuclear generating facilities in New York
State, consisting of the Facility and the Nine Mile Facility; provided that the
“Nuclear Group” shall also include the FitzPatrick Facility if the FitzPatrick
Facility comes under Common Ownership with the Facility and the Nine Mile
Facility.

“NYGATS” means the New York Generation Attribute Tracking System, established by
NYSERDA pursuant to the Public Authorities Law.

“NYGATS Operating Rules” means the rules, as may be amended from time to time,
that govern the operation of the NYGATS by NYSERDA and its designated NYGATS
Administrator, and the participation in and use of the NYGATS by users.

“NYISO” means the New York Independent System Operator, Inc.

“NYISO Rules” means the NYISO tariff, and all NYISO manuals, rules, procedures,
agreements or other documents governing the participation of market participants
in the NYISO markets as in effect from time to time.

“NYSERDA Prompt Payment Policy” has the meaning set forth in Exhibit B.

 

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“NYSERDA ZEC Account” means the account established in NYGATS into which Seller
shall deliver (by designation for transfer in accordance with the NYGATS
Operating Rules) ZECs under the terms and conditions of this Agreement.

“Non-Claiming Party” has the meaning set forth in Section 14.2.

“Permanent Cessation of Operations” means the date upon which the Facility
actually permanently shuts down and ceases operations following the filing of a
Notice of Permanent Cessation of Operations with respect to a specific nuclear
generation facility with the NRC pursuant to 10 C.F.R. Section 50.82(a)(1)(i).

“Public Authorities Law” means the Public Authority Act codified in the
Consolidated Laws of New York at Public Authorities Law Sec. 1000 et seq.

“Seller ZEC Account” means the account established in the NYGATS for the deposit
with NYGATS of ZECs created under the NYGATS Operating Rules for the Facility
from which account Seller shall deliver ZECs(by designation for transfer in
accordance with the NYGATS Operating Rules) to the NYSERDA ZEC Account under the
terms and conditions of this Agreement.

“Threshold Amount” has the meaning set forth in Section 5.2(a).

“Tranche” means a two-Contract Year period for the sale of the ZECs, as set
forth in the definition of “Contract Term” above.

“Tranche Cap Amount” means: (i) 41,206,056 ZECs, if the FitzPatrick Facility is
in Commercial Operation and the Nuclear Group consists of the Facility and the
Nine Mile Facility, (ii) 36,824,000 ZECs, if a Permanent Cessation of Operations
occurs with respect to the FitzPatrick Facility prior to the FitzPatrick
Facility becoming part of the Nuclear Group, and (iii) 55,236,000 ZECs, if the
Nuclear Group consists of the Facility, the Nine Mile Facility and the
FitzPatrick Facility.

“Tranche Cap Reduction Amount” means 1,333,333 ZECs, if the Nuclear Group
consists of the Facility and the Nine Mile Facility, and 2,000,000 ZECs, if the
Nuclear Group consists of the Facility, the Nine Mile Facility and the
FitzPatrick Facility.

“ZEC Price” means the price that NYSERDA shall pay for each ZEC delivered by
Seller (by designation for transfer in accordance with the NYGATS Operating
Rules) to the NYSERDA ZEC Account during the Contract Term. The ZEC Price shall
be as provided in Exhibit D.

“ZEC Program” means the zero-emissions credit requirement program as established
by the PSC through the CES Order and administered by NYSERDA and its designated
NYGATS administrator in accordance with the NYGATS Operating Rules.

“ZEC Quantity” means, with respect to any Contract Year, the lesser of (a) the
quantity of ZECs produced by the Nuclear Group in such Contract Year and (b) the
Annual ZEC Cap Amount that applies to the Nuclear Group for such Contract Year,
subject to adjustments pursuant to Article IV (Payment) and Article V
(Adjustments).

 

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“Zero Carbon Electric Generating Facility” means an electric generating facility
that uses energy released in the course of nuclear fission to generate
electricity.

“Zero Emissions Credit” or “ZEC” means a credit for the zero-emissions
attributes of one (1) MWh of electric energy production by an eligible Zero
Carbon Electric Generating Facility, such as the Facility, represented by a
Certificate, which credit is purchased by NYSERDA or a LSE from Seller to reduce
carbon consumption by retail electric consumers in New York State, such
purchases to be accomplished through NYGATS pursuant to the NYGATS Operating
Rules.

Article II

Purchase and Sale of Rights to ZECs

Section 2.1. Eligibility. The Parties’ respective obligations under this
Agreement are expressly conditioned on the eligibility of Seller’s Facility
under the ZEC Program, as of the Effective Date.

Section 2.2. ZEC Sales. On the terms and subject to the conditions and
provisions of this Agreement, Seller shall sell, assign, transfer, convey, and
deliver to NYSERDA, and NYSERDA shall purchase, confirm transfer, and receive
from Seller, all right, title and interest in ZECs measured at the Facility
Revenue Meter and created in the Seller ZEC Account by NYGATS during the
Contract Term at the ZEC Price and in accordance with the NYGATS Operating
Rules. With respect to each Contract Year during the Contract Term, NYSERDA
shall purchase from Seller such ZECs, up to the ZEC Quantity among the
applicable Nuclear Group for such Contract Year, but shall not be obligated to
purchase such ZECs over and above such ZEC Quantity. Seller shall, for the
duration of the Contract Term, and subject to the terms and conditions of this
Agreement, produce zero-emissions attributes, and, upon receipt of ZECs in the
Seller ZEC Account, transfer such ZECs to the NYSERDA ZEC Account. For the
avoidance of doubt, and except as set forth in Section 2.5, ZECs are the only
product Seller is selling and NYSERDA is buying from Seller under this
Agreement. Seller is not selling and NYSERDA is not purchasing any electricity
or any capacity, energy, or ancillary services or other products or attributes
(other than ZECs) associated with the Facility.

Section 2.3. ZEC Rights and Use. Such right, title and interest shall include
perpetual and exclusive rights to all ZECs transferred under this Agreement,
including the exclusive rights to claim or represent, consistent with New York
State Environmental Disclosure rules: (a) that the ZECs are associated with
energy that was generated by the Facility; and (b) that New York State and or
the ZEC Program is responsible for the environmental benefits including
reductions in emissions and/or other pollution or any other environmental
benefit resulting from the generation of the energy associated with ZECs
purchased hereunder.

Section 2.4. Risk of Loss. Title and risk of loss of ZECs will transfer from
Seller to NYSERDA upon completion of (a) delivery by Seller of such ZECs into
the NYSERDA ZEC Account (by designation for transfer in accordance with the
NYGATS Operating Rules) and (b) receipt by NYSERDA of such ZECs into the NYSERDA
ZEC Account (by confirmation of the transfer in accordance with the NYGATS
Operating Rules). Each Party is responsible for completing all actions it is
required to undertake in NYGATS to establish its respective ZEC

 

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account and to cause the transfer of each ZEC in accordance with the NYGATS
Operating Rules. Seller shall deliver all right, title and interest in and to
the ZECs (by designation for transfer in accordance with the NYGATS Operating
Rules) free and clear of all liens, judgments, encumbrances and restrictions
created by or on behalf of Seller or any party claiming through Seller.

Section 2.5. Other Attributes. In the event that the Facility becomes eligible
for credits under any emission-trading, emissions recordation or other carbon
emissions reduction regime other than the CES, NYSERDA may request that Seller
take reasonable actions necessary to apply for and secure such title to such
credits, to the maximum extent to which the Facility is entitled. Seller shall
provide NYSERDA with evidence of taking such actions. NYSERDA and Seller shall
reasonably cooperate to cause title to such credits to be conveyed to NYSERDA
after such title is secured by Seller.

Section 2.6. Equivalent Programs. This Agreement may be modified or terminated
by the Commission if there is a national, NYISO, or other program instituted
that pays for or internalizes the value of the Facility’s zero-emissions
attributes in a manner that adequately replicates the economics of the ZEC
Program such that the Commission in its sole discretion is satisfied that the
zero-emissions attributes are no longer at risk and that discontinuing the ZEC
Program can be done in a manner that is fair to both the Facility owners and the
New York State ratepayers. Nothing herein shall require NYSERDA or Seller to
take any action violative of Applicable Law or an order of court of competent
jurisdiction.

Section 2.7. NYSERDA Assignment of ZECs. NYSERDA shall be free to sell, assign
or transfer to any entity, or otherwise encumber, any of the ZECs NYSERDA has
acquired under this Agreement, at any time and from time to time, and on such
terms and conditions as NYSERDA may desire; provided, however, NYSERDA’s actions
must at all times be in accordance with the CES Order.

Section 2.8. Opinions. Within thirty (30) days after the Seller receives written
notice from NYSERDA stating that the Effective Date has been achieved, each
Party shall deliver to the other Party an opinion of counsel (which may be an
opinion of its in-house counsel) containing the opinions supporting the Seller’s
and NYSERDA’s representations and warranties set forth in Sections 9.1(a),
(b) and (c) and Sections 10.1(a), (b), (c) and (d), respectively, subject to
customary assumptions, qualifications and exceptions.

Section 2.9. ZEC Sales to LSEs. To the extent permitted by the Commission and
the CES Order, Seller may sell ZECs directly to LSEs. The Parties shall
undertake good faith efforts to negotiate required amendments to this Agreement
to account for such ZEC sales by Seller to LSEs.

Article III

ZEC Qualification; Operating Condition

Section 3.1. ZEC Qualification. The Facility’s electric generation production
shall be measured by the Facility Revenue Meter. Such measurement shall be used
as a basis for

 

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determining pursuant to the ZEC Program the amount of ZECs related to such
generation to be created and recorded in NYGATS. NYSERDA shall track (a) ZECs
through NYGATS and NYSERDA’s program administrator and (b) the contribution of
such ZECs toward reducing carbon consumption by retail electric consumers in New
York State.

Section 3.2. Obligation to Maintain Good Operating Condition. For the duration
of the Contract Term, Seller shall: (a) comply with applicable NRC requirements
(including insurance requirements); (b) maintain the Facility in Commercial
Operation in good operating condition in accordance with Good Utility Practice;
and (c) operate the Facility in compliance with the NYISO Rules.

Article IV

Payment

Section 4.1. Invoices. Seller shall submit invoices to NYSERDA on a quarterly
basis throughout the Contract Term for ZECs created in the Seller ZEC Account by
NYGATS for the preceding three (3) month period in accordance with the NYGATS
Operating Rules and delivered (by designation for transfer in accordance with
the NYGATS Operating Rules) to the NYSERDA ZEC Account. Each invoice shall be
accompanied by a CERTIFICATION FORM, the form of which is set forth as Exhibit
C, setting forth the ZECs to be delivered. Invoices shall not be submitted
before the fifteenth (15) day of the month following the close of each quarter;
invoices submitted prior to the fifteenth (15) day of the month following the
close of each quarter shall not be considered proper invoices for purposes of
NYSERDA’s Prompt Payment Policy. Invoices shall be submitted electronically to
NYSERDA’s online invoice system at https://services.nyserda.ny.gov/Invoices/
with a copy to the Office of the General Counsel at
general.counsel@nyserda.ny.gov. Such invoices shall make reference to the
Agreement number shown on page 1 of this Agreement. Such invoices shall include
a statement of the amount due and payable by NYSERDA to Seller, which amount
shall be calculated in accordance with Section 4.2.

Section 4.2. Payment. NYSERDA will confirm receipt of ZECs in accordance with
the NYGATS Operating Rules and make payment to Seller for ZECs delivered,
subject to true-up pursuant to Article V. NYSERDA will not confirm receipt and
will not pay, with respect to any Contract Year, for ZECs in excess of the
applicable ZEC Quantity. The amounts payable shall be calculated as the
multiplicative product of (a) the applicable ZEC Price; and (b) the number of
ZECs delivered by Seller up to the applicable ZEC Quantity (by designation for
transfer in accordance with the NYGATS Operating Rules) to the NYSERDA ZEC
Account prior to the date on invoice.

Section 4.3. Prompt Payment Policy. NYSERDA will make payments to the Seller in
accordance with and subject to its Prompt Payment Policy Statement, attached
hereto as Exhibit B. Such payments shall be made by wire transfer to an account
designated by the Seller.

 

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Section 4.4. Limitation on ZEC Purchase Obligation. Notwithstanding any other
provision in this Agreement to the contrary, Seller acknowledges that NYSERDA’s
ability to make payments hereunder is limited to the amount NYSERDA realizes
from ZEC sales transactions to LSEs, which obligations will be guaranteed by
agreements NYSERDA anticipates entering into with each EDC, in accordance with
the CES Order; provided, however, that if so authorized by the Commission,
NYSERDA shall use available funds which NYSERDA has rights to use, in accordance
with the Commission’s authorization to make payments hereunder if the proceeds
from such ZEC sales transactions are not sufficient to cover NYSERDA’s payment
obligations hereunder. Notwithstanding NYSERDA’s obligation pursuant to
Section 4.5 to enforce agreements to ensure that it can meet its obligations
hereunder, NYSERDA shall not be obligated to purchase ZECs to the extent it does
not have sufficient funds (from those referenced in the immediately preceding
sentence) to do so, including in the event that NYSERDA, LSEs or EDCs are
precluded by a court of competent jurisdiction from fulfilling their respective
obligations under the ZEC Program. In the event that NYSERDA suffers a cash
shortfall in the manner described in this Section 4.4, NYSERDA shall, subject to
Applicable Law, use its sole discretion in purchasing reduced ZECs pro rata
across all of the facilities to the extent possible.

Section 4.5. LSE Agreements. NYSERDA shall use commercially reasonable efforts,
as authorized by the Commission, to enter into and maintain LSE Agreements in
sufficient numbers and with sufficient pricing and on such other terms and
conditions as NYSERDA may determine necessary or appropriate to enable NYSERDA
to fulfill its payment obligations under this Agreement. Subject to Applicable
Law, NYSERDA shall use commercially reasonable efforts to enforce its rights and
remedies under each of its LSE Agreements and under any related EDC guarantee
commitments.

Article V

Adjustments

Section 5.1. True-Up Adjustments. NYSERDA may adjust, including by means of
set-off, payments to subsequent invoices consistent with adjustments by NYGATS
based on actual metered electric energy production data from the Facility
Revenue Meter, associated ZEC creation data and the number of ZECs delivered and
received; provided, however, NYSERDA’s right to a specific payment adjustment
under this Section 5.1 shall expire three (3) years after the issuance of
Seller’s invoice to which such payment adjustment relates.

Section 5.2. Other Adjustments. NYSERDA may also make the following adjustments
under the following circumstances:

 

  (a)

Failure to Produce. If during any Tranche, the Nuclear Group fails to generate
in the aggregate an amount of electric energy sufficient to support the creation
of ZECs pursuant to the ZEC Program in an amount equal to at least eighty-five
percent (85%) of the applicable Tranche Cap Amount (the “Threshold Amount”),
then the Annual ZEC Cap Amount and the Tranche Cap Amount applicable to the
Nuclear Group in the immediately subsequent Tranche shall decrease by the
applicable Annual ZEC Cap Reduction Amount and the applicable Tranche Cap

 

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  Reduction Amount, respectively. If, during any subsequent Tranche, the Nuclear
Group generates in the aggregate an amount of electric energy sufficient to
support the creation of ZECs pursuant to the ZEC Program in an amount at or
above the new lower cap and obligation, the Annual ZEC Cap Amount and Tranche
Cap Amount will be restored for the Nuclear Group in subsequent Tranches.
Subject to Sections 2.2, 3.2 and 12.1(b), but notwithstanding any other
provision in this Agreement to the contrary, the cap reductions described in
this Section 5.2(a) shall be NYSERDA’s sole remedy for Seller’s failure to
produce the Threshold Amount and transfer ZECs to the NYSERDA ZEC Account, in
accordance with the terms of this Agreement, through the Contract Term;

 

  (b) Permanent Cessation of Operations. As of the Contract Date, the Nuclear
Group consists of the Facility and the Nine Mile Facility. If, during the
Contract Term, a Permanent Cessation of Operations occurs with respect to
(a) the FitzPatrick Facility or (b) the Nine Mile Facility, then, NYSERDA shall
make any payments due to such facility in accordance with obligations hereunder
already performed by such facility. If a Permanent Cessation of Operations
occurs with respect to the FitzPatrick Facility prior to the FitzPatrick
Facility becoming part of the Nuclear Group, then, effective on the date of the
facility’s Permanent Cessation of Operations, the Annual ZEC Cap Amount and the
Tranche Cap Amount shall be modified in accordance with their respective
definitions in Article I. If a Permanent Cessation of Operations occurs with
respect to (a) the FitzPatrick Facility after the FitzPatrick Facility becomes
part of the Nuclear Group or (b) the Nine Mile Facility, then effective on the
date of the facility’s Permanent Cessation of Operations, the Annual ZEC Cap
Amount and the Tranche Cap Amount shall be reduced by the Cessation ZEC
Reduction Amount and Cessation Tranche Reduction Amount, respectively. For the
purposes of this Section 5.2(b), the Permanent Cessation of Operations of either
Unit 1 or Unit 2 of the Nine Mile Facility shall constitute the Permanent
Cessation of Operations of the entire Nine Mile Facility;

 

  (c) Other Programs. This Agreement may be modified or terminated if there is a
national, NYISO, or other program instituted that pays for or internalizes the
value of the Facility’s zero-emissions attributes in a manner that adequately
replicates the economics of the ZEC Program such that the Commission in its sole
discretion is satisfied that the zero-emissions attributes are no longer at risk
and that discontinuing the mechanism can be done in a manner that is fair to
both the Facility owners and the New York State ratepayers. Nothing herein shall
require NYSERDA or Seller to take any action violative of Applicable Law or an
order of court of competent jurisdiction; and

 

  (d) LSE Agreements. If, during the Contract Term, the Seller enters into an
agreement with an LSE for the sale of ZECs, the Annual ZEC Cap Amount and the
Tranche Cap Amount, as the case may be, shall be reduced by the same number of
ZECs that Seller contracts to sell to the LSE; provided that, for the Tranche in
which the effective date of such contract occurs, such modifications shall be
made on a pro rata basis.

 

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Article VI

Records and Reports

Section 6.1. Additional Documents. Within ten (10) Business Days after Seller
receives written notice from NYSERDA stating that the Effective Date has been
achieved, Seller shall provide to NYSERDA:

 

  (a) certificates, dated as of the most recent practicable date prior to
delivery of the opinion referenced in Section 2.8, issued by the Maryland
Secretary of State confirming the corporate good standing of the Seller; and

 

  (b) a certificate of an appropriate officer of the Seller in form and
substance reasonably satisfactory to NYSERDA and certifying: (i) the names and
signatures of the officers of the Seller authorized to sign any documents to be
delivered hereunder; and (ii) the accuracy and completeness of resolutions of
the Seller, authorizing and approving all matters in connection with the
transactions contemplated thereby.

Seller shall promptly provide NYSERDA with updated and corrected versions of the
above-referenced certificates upon any change in the information provided
therein.

Section 6.2. Maintenance of Records. The Seller shall keep, maintain, and
preserve at its principal office throughout the term of the Agreement and for a
period of seven (7) years following the expiration of this Agreement, full and
detailed books, accounts, and records pertaining to Seller’s performance under
the Agreement.

Article VII

Audit; Alternative Pricing Source

Section 7.1. Audit. NYSERDA shall have the right from time to time and at all
reasonable times during the Contract Term and such period thereafter, upon
reasonable notice to Seller, to inspect and audit any and all books, accounts
and records pertaining to Seller’s performance under this Agreement, at the
office or offices of the Seller where they are then being kept, maintained and
preserved. If such books, accounts and records are not kept at an office within
the State of New York, within a reasonable time of a request by NYSERDA, Seller
shall make such books, accounts and records available to NYSERDA at NYSERDA’s
offices or at an agreed upon location within the State of New York. Any payment
made under this Agreement shall be subject to retroactive adjustment (reduction
or increase) regarding amounts included therein which are found by NYSERDA on
the basis of any audit of the Seller by an agency of the United States, the
State of New York or NYSERDA not to constitute a properly invoiced amount.

Section 7.2. Alternative Pricing Source. If any of the prices utilized in
Exhibit D of this Agreement fail to be announced or published by the relevant
provider, or are otherwise

 

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unavailable on a temporary or permanent basis, promptly upon becoming aware of
such circumstances, the Parties shall negotiate in good faith to agree upon a
mutually acceptable alternative pricing source, index or calculation method that
most closely approximates the discontinued prices, subject to Commission
authorization as necessary.

Article VIII

Assignments

Section 8.1. General Restrictions. Except as specifically provided under
Section 8.2, the assignment, transfer, conveyance, subcontracting or other
disposal of this Agreement or any of the Seller’s rights, obligations, interests
or responsibilities hereunder, in whole or in part, without the express prior
consent (not to be unreasonably withheld, conditioned or delayed) in writing of
NYSERDA shall be void and of no effect as to NYSERDA. Seller agrees to
compensate NYSERDA for NYSERDA’s reasonable costs and expenses incurred by its
use of outside attorneys, consultants, accountants and advisors in connection
with this Agreement in response to Seller’s requests made pursuant to this
Section 8.1. NYSERDA shall provide an invoice to Seller for such charges, with
appropriate documentation, and Seller shall pay such invoice within thirty
(30) Days.

Section 8.2. Permitted Assignments. Notwithstanding the general restriction in
Section 8.1:

(a) Seller may, without NYSERDA’s prior written consent, grant a security
interest in or conditionally assign this Agreement as collateral in connection
with financing arrangements; provided that Seller provides prompt notice to
NYSERDA of such collateral assignment;

(b) Seller may, without NYSERDA’s prior written consent, assign, transfer or
convey Seller’s rights, obligations, interests or responsibilities hereunder
pursuant to an assignment or transfer of Seller’s license to operate approved by
the NRC; and

(c) any change in ownership or control of Seller or a direct or indirect parent
of Seller shall not require the prior written consent of NYSERDA; provided that
Seller shall provide NYSERDA with any NRC or Commission filings with respect to
such change in ownership or control promptly after such filings have been
submitted to the NRC or the Commission.

Article IX

Seller’s Representations and Warranties

Section 9.1. As a material inducement to NYSERDA to enter into this Agreement,
Seller makes the following representations and warranties, as of the Effective
Date, all of which shall survive the execution and delivery of this Agreement
and any termination:

 

  (a)

(1) that Seller is a limited liability company duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization;
(2) has all requisite limited liability company power, and has all material
governmental permits necessary to own its assets or lease and operate its
properties and carry on

 

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  its business as now being or as proposed to be conducted, to construct,
finance, own, maintain and operate the Facility, to execute and deliver this
Agreement, and to consummate the transactions contemplated herein; and (3) is
qualified to do business and is in good standing in all jurisdictions in which
the nature of the business conducted by it makes such qualification necessary;

 

  (b) that the execution, delivery and performance by Seller, the entry into
this Agreement by Seller, and the consummation of the transactions contemplated
by this Agreement: (1) have been duly authorized by all requisite limited
liability company action (including any required action of its members); and
(2) will not (i) violate any applicable provision of law, statute, rule,
regulation or order of any governmental agency or any provision of the limited
liability company agreement or other governing documents of Seller;
(ii) violate, conflict with, result in a breach of or constitute (alone or with
notice or lapse of time or both) a default or an event of default under any
indenture, agreement (including the respective limited liability company
agreements of Seller), mortgage, deed of trust, note, lease, contract or other
instrument to which Seller is a party or by which it or any of its property is
bound; or (iii) result in the creation or imposition of any lien upon any
property or assets of the Seller;

 

  (c) that this Agreement has been duly executed and delivered by Seller and
constitutes the legal, valid and binding obligation of Seller enforceable
against Seller in accordance with the terms thereof; and

 

  (d) that Seller is in compliance with Applicable Law that may in any way
affect the performance of this Agreement, except where the failure to so comply
would not result in a material adverse effect on Seller’s ability to perform its
material obligations hereunder.

Article X

NYSERDA’s Representations and Warranties

Section 10.1. As a material inducement to Seller to enter into this Agreement,
NYSERDA makes the following representations and warranties, as of the Effective
Date, all of which shall survive the execution and delivery of this Agreement
and any termination:

 

  (a) that NYSERDA is an instrumentality of the State of New York and a public
authority and public benefit corporation, created under the New York State
Public Authorities Law, validly existing and in good standing under the laws of
the State of New York;

 

  (b)

that NYSERDA has all necessary power and authority to execute and deliver this
Agreement and all other agreements contemplated herein and hereby and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery by NYSERDA of this Agreement and all other agreements contemplated
herein and hereby and the consummation of the transactions

 

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  contemplated hereby and thereby have been or, if not yet executed and
delivered, will be when executed and delivered, and no other actions or
proceedings on the part of NYSERDA are necessary to authorize this Agreement or
any other agreement contemplated herein and hereby or the consummation of the
transactions contemplated hereby and thereby;

 

  (c) that the execution, delivery and performance by NYSERDA of this Agreement
will not (1) violate any applicable provision of law, statute, rule, regulation
or order of any governmental agency or, any provision of the Public Authorities
Law; (2) violate, conflict with, result in a material breach of or constitute
(alone or with notice or lapse of time or both) a material default or event of
default under any indenture, agreement, mortgage, deed of trust, note, lease,
contract or other instrument to which NYSERDA is a party or by which NYSERDA or
any of its property is bound; (3) result in the creation or imposition of any
lien upon any property or assets of NYSERDA; or (4) require any consent or
approval of, registration or filing with, or any other action by, any
Governmental Authority, except such as have been obtained or made and are in
full force and effect. This Agreement will not conflict with any other agreement
or contract to which NYSERDA is a party;

 

  (d) that this Agreement has been duly executed and delivered by NYSERDA and
constitutes the legal, valid and binding obligation of NYSERDA enforceable
against NYSERDA in accordance with the terms thereof;

 

  (e) that NYSERDA is familiar with and in compliance with Applicable Law,
except where the failure to so comply would not result in a material adverse
effect on NYSERDA’s ability to perform its material obligations hereunder; and

 

  (f) that there is no action, suit or claim at law or in equity, or before or
by a Governmental Authority pending or, to the best knowledge of NYSERDA after
due inquiry, threatened against NYSERDA or affecting any of its properties or
assets which could reasonably be expected to result in a material adverse effect
on NYSERDA’s ability to perform its obligations.

Article XI

Indemnification

Section 11.1. Indemnification. Seller shall protect, indemnify and hold harmless
NYSERDA and their respective officials, trustees, officers, directors,
employees, agents, representatives and contractors from and against all
liabilities, losses, claims, damages, judgments, penalties, causes of action,
costs and expenses (including reasonable attorneys’ and/or experts’ fees and
expenses) imposed upon or incurred by or asserted against NYSERDA resulting
from, arising out of or relating to Seller’s material breach of this Agreement.
The obligations of Seller under this Article shall survive any expiration or
Termination of this Agreement, and shall not be limited by any enumeration
herein of required insurance coverage.

 

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Article XII

Events of Default

Section 12.1. Event of Default. For the purposes of this Agreement, “Event of
Default” shall mean any of the following:

 

  (a) Representations and Warranties. Any representation or warranty made in
this Agreement that shall prove to have been false or misleading in any material
respect as of the time made or deemed to be made;

 

  (b) Other Obligations. A Party shall default in the performance of any of its
obligations under Sections 2.2, 2.4, 3.2, 4.2, 6.2 and 7.1 of this Agreement and
such default shall continue unremedied for a period of thirty (30) days after
the defaulting Party receives notice thereof;

 

  (c) Voluntary Proceedings. A Party shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of all or a substantial part of its property;
(ii) make a general assignment for the benefit of its creditors; (iii) commence
a voluntary case under the United States Bankruptcy Code; (iv) file a petition
seeking to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or readjustment of debts; (v) fail to
convert in a timely and appropriate manner, or acquiesce in writing to, any
petition filed against it in an involuntary case under the United States
Bankruptcy Code; (vi) cancel this Agreement, or sell ZECs to a third party
(whether by a Party or a receiver, custodian, trustee or liquidator) other than
NYSERDA or (subject to Section 2.9) an LSE; or (vii) take any corporate action
for the purpose of effecting any of the foregoing;

 

  (d) Involuntary Proceedings. A proceeding or case shall be commenced against a
Party, without its application or consent, in any court of competent
jurisdiction, seeking (i) its liquidation, reorganization, dissolution or
winding-up, or the composition or readjustment of its debts; (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of all or
any substantial part of its assets; (iii) similar relief under any law relating
to bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, and such proceeding or case shall continue undismissed, or
an order, judgment or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of sixty (60) or more
days; or an order for relief against a Party, shall be entered in an involuntary
case under the Bankruptcy Code; or (iv) as part of such a proceeding, a Party,
receiver, custodian, trustee or liquidator shall cancel this Agreement, or sell
ZECs to a third party other than NYSERDA or (subject to the terms of
Section 2.9) an LSE;

 

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  (e) Unauthorized Transfer. The transfer of any ZEC included in the ZEC
Quantity by Seller to any transferee other than NYSERDA or an LSE as permitted
by the Commission; or

 

  (f) Abandonment/Cessation of Commercial Operation. Seller’s failure to
maintain Commercial Operation, Seller’s abandonment of the Facility or a
Permanent Cessation of Operations with respect to the Facility.

Section 12.2. Effect of an Event of Default. In addition to any other remedy
available to it under this Agreement or under Applicable Law, upon any
occurrence of an Event of Default, the non-defaulting Party shall be entitled to
suspend performance of its obligations under this Agreement until the earlier of
such time as (a) such Event of Default has been cured or (b) the non-defaulting
Party has elected to terminate this Agreement pursuant to Article XIII below.

Article XIII

Termination

Section 13.1. Termination. This Agreement may be terminated:

 

  (a) at any time by the non-defaulting Party if an Event of Default occurs and
continues unremedied following any applicable notice and cure period;

 

  (b) at any time by the mutual written consent of Seller and NYSERDA;

 

  (c) unless otherwise mutually agreed upon by NYSERDA and Seller in writing, on
the expiration of the Contract Term (subject to Section 15.3 of this Agreement);

 

  (d) by Seller, in the event that the ZEC Price becomes zero dollars ($0) at
any time during the Contract Term; or

 

  (e) by Seller or NYSERDA upon Enjoinment.

Section 13.2. Sale of FitzPatrick Facility. Unless the Commission orders
otherwise prior to the commencement of Tranche 2, should Seller fail to
reasonably demonstrate to NYSERDA, on or before September 1, 2018, that the
FitzPatrick Facility has been purchased and that title to the FitzPatrick
Facility has passed to a third party licensee unaffiliated with the current
owner of the FitzPatrick Facility, this Agreement may be terminated by NYSERDA
by providing written notice thereof to Seller on or at any time after
September 2, 2018, but before April 1, 2019, pursuant to which the Parties’
respective obligations shall terminate at the end of Tranche 1 with no further
payment or performance obligation; provided that NYSERDA shall make any payments
due in accordance with obligations hereunder already performed (such termination
right defined herein as the “FitzPatrick Condition”). Seller has requested
clarification or rehearing from the Commission that the FitzPatrick Condition
does not apply to the procurement of ZECs from the Facility.

Section 13.3. Final Order. If one or more proceedings are commenced or pending
by or before any Governmental Authority seeking to modify, terminate, amend,
alter, avoid or

 

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invalidate any of the CES Order related to this Agreement or this Agreement, or
any material provision thereof, the Parties shall continue to perform all of
their respective obligations hereunder until such time that the Commission’s
decision on the CES Order and ZEC Program is final and non-appealable (“Final
CES Order”). If a Final CES Order by the Commission has the effect of materially
changing the original economic benefits of the ZEC Program or this Agreement for
a Party (but not Enjoining the ZEC Program), the Parties shall negotiate in good
faith to amend this Agreement to conform to the Final CES Order in order to
effectuate as closely as reasonably possible the intent of the Parties hereunder
on the Effective Date and preserve the original economic benefit to the Parties
under this Agreement, subject to Commission approval as necessary. In the event
that the Parties are not able to reach a mutually acceptable agreement, either
Party, at its reasonable discretion, may terminate this Agreement. In the event
the ZEC Program is Enjoined, either Party may terminate this Agreement pursuant
to Section 13.1(e) and neither Party shall be required thereafter to perform any
of the obligations under this Agreement. Notwithstanding any provision of this
Section 13.3 to the contrary, nothing in this Section 13.3 shall affect the
authority of the Commission to take any action pursuant to Sections 2.6 and
5.2(c) of this Agreement.

Section 13.4. Change in Law. Except as provided in Section 13.3 of this
Agreement, the Parties agree that their respective obligations under this
Agreement shall continue unmodified in full force and effect for the Contract
Term in the event that a non-judicial Governmental Authority of the State of New
York, including the Commission, modifies, terminates, amends, alters, avoids or
invalidates the CES Order or the Final CES Order. Further, if any other
Applicable Law has the effect of materially changing the original economic
benefits of this Agreement for a Party or the economics of owning and operating
the Facility, the Parties shall negotiate in good faith to amend this Agreement
to conform to such new Applicable Law in order to effectuate as closely as
reasonably possible the intent of the Parties hereunder on the Effective Date
and preserve the original economic benefit to the Parties under this Agreement,
subject to Commission approval as necessary. In the event that the Parties are
not able to reach a mutually acceptable agreement, either Party, at its
reasonable discretion, may terminate this Agreement. Notwithstanding any
provision of this Section 13.4 to the contrary, nothing in this Section 13.4
shall affect the authority of the Commission to take any action pursuant to
Sections 2.6 and 5.2(c) of this Agreement.

Section 13.5. Material Adverse Change. Seller shall promptly notify NYSERDA if
it becomes aware of any damage to or loss of use of the Facility that could
reasonably be expected to materially adversely affect the Facility and its
ability to generate electricity and pursuant to the ZEC Program the subsequent
creation of ZECs related to such generation. In the event of (a) the
unavailability, interruption, breakdown or failure of equipment at the Facility
or (b) other similar material adverse change to the operating condition of the
Facility that, with respect to either or both of the events or conditions
described in the preceding clause (a) or (b), could reasonably be expected to
cost more than Forty Million Dollars ($40,000,000), as demonstrated by an
independent engineering report provided by Seller, to repair or replace in
accordance with Good Utility Practice and Seller’s standard operating
procedures, Seller may, at its sole option, terminate this Agreement with no
further payment or performance obligation; provided that NYSERDA shall make any
payments due in accordance with obligations hereunder already performed. For the
avoidance of doubt, the Forty Million Dollar ($40,000,000) threshold set forth
above must be for costs above Seller’s previously forecasted budget and must
pertain to capital costs, including costs associated with construction, repair,
parts and equipment.

 

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Article XIV

Force Majeure

Section 14.1. Force Majeure. Neither Party hereto shall be liable for any
failure or delay in the performance of its respective obligations hereunder
(other than payment obligations) if and to the extent that such delay or failure
is due to a cause or circumstance beyond the reasonable control of such party,
including acts of God or the public enemy, expropriation or confiscation of land
or facilities, acts of war, rebellion or sabotage or damage resulting therefrom,
fires, floods, storms or weather of unusual severity, unavailability of NYGATS,
explosions, accidents, riots, or strikes (a “Force Majeure Event”). Compliance
with Applicable Law shall not constitute a Force Majeure Event and shall be
addressed in Section 13.4. The suspension of performance due to a Force Majeure
Event shall be of no greater scope or amount and of no longer duration than is
required by such Force Majeure Event and the Claiming Party shall not be
construed to be in default with respect to any obligation hereunder for so long
as, but only to the extent that, failure to perform such obligation is due to a
Force Majeure Event. No Force Majeure Event shall extend this Agreement beyond
the Term.

Section 14.2. Due Diligence. A Party claiming a Force Majeure Event (“Claiming
Party”) shall: (a) provide oral notice as promptly as practicable followed by
written notice to the other Party (“Non-Claiming Party”) within two (2) Business
Days after such Claiming Party becomes aware of such Force Majeure Event, giving
the Non-Claiming Party a detailed written explanation of the event and an
estimate of its expected duration and probable effect on the performance of the
Claiming Party’s obligations hereunder; (b) use commercially reasonable efforts
in accordance with Good Utility Practice to remedy the condition that prevents
performance and to mitigate the effects of same in order to continue to perform
its obligations under this Agreement; and (c) provide the Non-Claiming Party
with weekly status reports of all efforts to mitigate and remedy the Force
Majeure Event.

Section 14.3. Extended Force Majeure Events.

(a) If the Claiming Party has reason to believe that a Force Majeure Event will
prevent it from performing its obligations under this Agreement for one
(1) month or longer (“Extended Force Majeure Event”), it shall notify the
Non-Claiming Party in writing within fifteen (15) days from the beginning of
said Force Majeure Event and shall submit a plan to remedy the impact of such
Force Majeure Event(s) (a “Force Majeure Remedy Plan”) to the Non-Claiming Party
within ten (10) days of such notification.

(b) While the Force Majeure Remedy Plan is in effect, the Claiming Party shall
provide (i) weekly status reports notifying the Non-Claiming Party of the steps
which have been taken to remedy the Extended Force Majeure Event, and (ii) the
expected remaining duration of its inability to perform hereunder.

 

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Section 14.4. Right to Terminate or Discontinue Obligations.

Either Party upon written notice to the other Party may terminate this Agreement
if the Claiming Party remains unable to perform its material obligations
hereunder due to a Force Majeure Event for twenty-four (24) consecutive months
following the date of such Force Majeure Event; provided, that neither Party
shall be entitled to terminate this Agreement until twenty four (24) months
after the date of such Force Majeure Event provided that the Party affected by
the Force Majeure Event (a) has commenced to remedy the Force Majeure Event and
(b) is diligently pursuing such remedy; and (c) if such remedy can be reasonably
completed within twenty four (24) consecutive Months following the date of such
Force Majeure Event.

Section 14.5. Liability Following Termination.

Upon termination of this Agreement as provided in Section 14.4, the Parties
shall have no further liability or obligation to each other as a consequence of
such termination, except for any obligation accruing prior to the occurrence of
such Force Majeure Event.

Article XV

Additional Provisions

Section 15.1. Forward Contract. Each Party represents and warrants to the other,
as of the date of each sale and purchase of ZECs (each “transaction”) hereunder
that it is a “forward contract merchant” within the meaning of the United States
Bankruptcy Code, that this Agreement and each transaction is a “forward
contract” or a “commodity contract” within the meaning of the United States
Bankruptcy Code, and that the remedies identified in this Agreement shall be
“contractual rights” as provided for in 11 U.S.C. § 556 as that provision may be
amended from time to time. Each Party represents to the other, as of the date of
each transaction, that: (a) it is a commercial market participant with respect
to ZECs and is entering into the transaction in connection with its commercial
business; (b) it intends, as of the date of the transaction, to make or take
physical delivery of ZECs, which are nonfinancial commodities; and (c) that the
transaction is not a “swap” under the Commodity Exchange Act and the CFTC
regulations, interpretations and guidance promulgated thereunder.

Section 15.2. Taxes. Seller shall be responsible for and obligated to pay all
present and future taxes, fees and levies that may be assessed by any entity
upon the Seller’s delivery of ZECs to NYSERDA, or with respect to the creation
of the ZECs and/or the energy with which they are associated, and, if any, for
the registration of the Facility in the NYGATS and the delivery of the ZEC
Certificates.

Section 15.3. Term. Unless earlier terminated pursuant to the terms hereof, this
Agreement shall commence on the Effective Date and expire upon the expiration of
the Contract Term, provided that payment has been made for all ZECs for which
payment is properly due. Upon such date or upon earlier termination of this
Agreement under Article XIII, neither Party shall have any further obligation to
the other, except that Sections 15.1, 18.1, 18.2, 18.3, 18.4, and NYSERDA’s
payment obligation under Article IV shall survive.

 

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Section 15.4. Waiver. Either Party to this Agreement may (a) extend the time for
the performance of any of the obligations or other acts of the other Party,
(b) waive any inaccuracies in the representations and warranties of the other
Party contained herein or in any document delivered by the other Party pursuant
hereto or (c) waive compliance with any of the agreements or conditions of the
other party contained herein. Any such extension or waiver shall be valid only
if set forth in an instrument in writing signed by the Party to be bound
thereby. Any waiver of any term or condition shall not be construed as a waiver
of any subsequent breach or a subsequent waiver of the same term or condition,
or a waiver of any other term or condition, of this Agreement. No provision of
this Agreement will be deemed to have been waived unless the waiver is in
writing, and no delay by either Party in exercising its rights hereunder,
including the right to terminate this Agreement, shall be deemed to constitute
or evidence any waiver by either Party of any right hereunder. The rights
granted in this Agreement are cumulative of every other right or remedy that the
enforcing Party may otherwise have at law or in equity or by statute.

Section 15.5. Independent Contractor. The status of the Seller under this
Agreement shall be that of an independent contractor and not that of an agent,
and in accordance with such status, Seller and its respective officers, agents,
employees, representatives and servants shall at all times during the term of
this Agreement conduct themselves in a manner consistent with such status and by
reason of this Agreement shall neither hold themselves out as, nor claim to be
acting in the capacity of, officers, employees, agents, representatives or
servants of NYSERDA nor make any claim, demand or application for any right or
privilege applicable to NYSERDA, including rights or privileges derived from
workers’ compensation coverage, unemployment insurance benefits, social security
coverage and retirement membership or credit.

Section 15.6. Severability. If any provision of this Agreement shall be declared
by any court of competent jurisdiction to be illegal, void or unenforceable, all
other provisions of this Agreement shall not be affected and shall remain in
full force and effect. If any provision of this Agreement is so broad as to be
unenforceable, that provision shall be interpreted to be only so broad as will
enable it to be enforced.

Section 15.7. Seller Expense. Seller shall, at its own expense, make all
arrangements necessary to register the Facility and transfer ZECs to NYSERDA
through NYGATS in accordance with the NYGATS Operating Rules.

Section 15.8. Further Assurances. Each Party shall execute and deliver to the
other Party any instrument or other document reasonably requested by the other
Party to give effect to the agreement of the Parties reflected herein.

Section 15.9. Waiver of Relief from Contract. Neither Party shall unilaterally
seek to obtain from any Governmental Authority any relief changing the ZEC
Price, each Party’s obligations or any other economic terms and conditions of
this Agreement. To the extent that any non-Party shall seek such relief, the
Parties further covenant not to support such action.

Section 15.10. Governing Law; Venue. This Agreement shall be governed by, and
construed in accordance with the laws of the State of New York applicable to
contracts executed and to be performed in New York State without regard to its
conflicts of laws principles. The parties irrevocably acknowledge and accept
that all actions arising under or relating to this

 

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Agreement, and the transactions contemplated hereby and thereby shall be brought
exclusively in a United States District Court or New York State Court located in
Albany, New York having subject matter jurisdiction over such matters, and each
of the Parties hereby consents to and accepts such personal jurisdiction of, and
waives any objection as to the laying of venue in, such courts for purposes of
such action.

Section 15.11. Laws of the State of New York. Seller shall comply with all of
the requirements set forth in Exhibit A hereto.

Section 15.12. No Third Party Beneficiaries. Nothing herein is intended to or
should be construed to create any rights of any kind whatsoever in third persons
not parties to this Agreement.

Article XVI

Notices, Entire Agreement, Amendment, Counterparts, Good Faith Negotiation

Section 16.1. Notices.

 

  (a) All notices, requests, consents, approvals and other communications which
may or are required to be given by either party to the other under this
Agreement shall be in writing and shall be transmitted either:

 

  (1) via certified or registered United States mail, return receipt requested;

 

  (2) by personal delivery;

 

  (3) by expedited delivery service; or

 

  (4) by e-mail, return receipt requested.

Such notices shall be addressed as follows, or to such different addresses as
the Parties may from time-to-time designate as set forth in paragraph (c) below:

 

To Seller:   

R. E. Ginna Nuclear Power Plant, LLC

c/o Exelon Generation Company, LLC

1310 Point Street

Baltimore, MD 21231

Attn: General Counsel

E:mail Address: david.dardis@constellation.com

 

To NYSERDA:   

NYSERDA

Attn: Office of the General Counsel

17 Columbia Circle

Albany, New York 12203-6399

E:mail address: pete.keane@nyserda.ny.gov

 

With a copy to:   

NYSERDA

Attn: Peter Keane

17 Columbia Circle

Albany, New York 12203-6399

 

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EXECUTION VERSION

 

  (b) Any such notice shall be deemed to have been given either at the time of
personal delivery or, in the case of expedited delivery service or certified or
registered United States mail, as of the date of first attempted delivery at the
address and in the manner provided herein, or in the case of facsimile
transmission or email, upon receipt of an email acknowledgement of receipt.

 

  (c) The Parties may, from time to time, specify any new or different address
in the United States as their address for purpose of receiving notice under this
Agreement by giving fifteen (15) days’ written notice to the other Party sent in
accordance herewith. The Parties agree to mutually designate individuals as
their respective representatives for the purposes of receiving notices under
this Agreement. Additional individuals may be designated in writing by the
Parties for purposes of implementation and administration/billing, resolving
issues and problems and/or for dispute resolution.

Section 16.2. Entire Agreement; Amendment. This Agreement embodies the entire
agreement and understanding between NYSERDA and the Seller and supersedes all
prior agreements and understandings relating to the subject matter hereof.
Except as otherwise expressly provided for herein, this Agreement may be
amended, modified, changed, waived, discharged or terminated only by an
instrument in writing, signed by the Party against which enforcement of such
amendment, modification, change, waiver, discharge or termination is sought.

Section 16.3. Counterparts. This Agreement may be executed in counterparts each
of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.

Section 16.4. Good Faith Negotiation. Both Parties agree that, should any
dispute arise during the term of this Agreement, the Parties will make a good
faith though non-binding effort to reconcile any difference or dispute before
the filing of an action in any court.

Article XVII

Publicity

Section 17.1. Publicity. On or prior to the Effective Date, the Parties will
collaborate with regard to the preparation and issuance of any initial press
release or public announcement with respect to the Parties’ entry into this
Agreement.

 

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Article XVIII

Confidentiality

Section 18.1. Seller will be required to waive confidentiality, as to NYSERDA
and the NYGATS, for the direct transfer to NYSERDA of data pertinent to the
verification of ZEC creation.

Section 18.2. Freedom of Information Law. Seller acknowledges that NYSERDA is
subject to and must comply with the requirements of New York’s Freedom of
Information Law (“FOIL;” see Public Officers’ Law Article 6).

Section 18.3. Claim of Confidentiality. Information of any tangible form
including any document that Seller wishes to be protected from disclosure to
third parties, must be marked “Confidential” or “Proprietary” at the time such
information is provided to NYSERDA.

Section 18.4. Trade Secrets/Commercial Information. The FOIL Law (Public
Officers Law § 87(d)(2)) provides an exception to disclosure for records or
portions thereof that “are trade secrets or are submitted to an agency by a
commercial enterprise or derived from information obtained from a commercial
enterprise and which if disclosed would cause substantial injury to the
competitive position of the subject enterprise.” If NYSERDA receives a request
from a third party for information or a document received from Seller and which
has been marked “Confidential” or “Proprietary,” NYSERDA will process such
request under the procedures provided by NYSERDA’s FOIL regulations.

[Signature Page Follows]

 

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EXECUTION VERSION

 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
and delivered by their duly authorized representatives.

 

R. E. Ginna Nuclear Power Plant, LLC    

New York State Energy Research And

Development Authority

By:   /s/ Bruce Wilson     By:   /s/ John B. Rhodes Name:   Bruce Wilson    
Title   President and CEO Title   Secretary      

STATE OF                     )

) SS:

COUNTY OF                     )

On the              day of                 , 20    , before me, the undersigned,
personally appeared                     , personally known to me or proved to me
on the basis of satisfactory evidence to be the individual(s) whose name(s) is
(are) subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person
on behalf of which the individual(s) acted, executed the instrument.

 

 

Notary

[Signature Page to ZEC Standard Agreement (Ginna)]

 

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EXECUTION VERSION

 

EXHIBIT A

REVISED 5/12

STANDARD TERMS AND CONDITIONS

FOR ALL NYSERDA AGREEMENTS

(Based on Standard Clauses for New York State Contracts and Tax Law Section 5-a)

The parties to the Agreement agree to be bound by the following clauses which
are hereby made a part of the Agreement:

1. NON-DISCRIMINATION REQUIREMENTS. To the extent required by Article 15 of the
Executive Law (also known as the Human Rights Law) and all other State and
Federal statutory and constitutional non-discrimination provisions, the
Contractor will not discriminate against any employee or applicant for
employment because of race, creed, color, sex, national origin, sexual
orientation, age, disability, genetic predisposition or carrier status, or
marital status. Furthermore, in accordance with Section 220-e of the Labor Law,
if this is an Agreement for the construction, alteration or repair of any public
building or public work or for the manufacture, sale or distribution of
materials, equipment or supplies, and to the extent that this Agreement shall be
performed within the State of New York, Contractor agrees that neither it nor
its subcontractors shall, by reason of race, creed, color, disability, sex or
national origin: (a) discriminate in hiring against any New York State citizen
who is qualified and available to perform the work; or (b) discriminate against
or intimidate any employee hired for the performance of work under this
Agreement. If this is a building service Agreement as defined in Section 230 of
the Labor Law, then, in accordance with Section 239 thereof, Contractor agrees
that neither it nor its subcontractors shall, by reason of race, creed, color,
national origin, age, sex or disability: (a) discriminate in hiring against any
New York State citizen who is qualified and available to perform the work; or
(b) discriminate against or intimidate any employee hired for the performance of
work under this contract. Contractor is subject to fines of $50.00 per person
per day for any violation of Section 220-e or Section 239 as well as possible
termination of this Agreement and forfeiture of all moneys due hereunder for a
second subsequent violation.

2. WAGE AND HOURS PROVISIONS. If this is a public work Agreement covered by
Article 8 of the Labor Law or a building service Agreement covered by Article 9
thereof, neither Contractor’s employees nor the employees of its subcontractors
may be required or permitted to work more than the number of hours or days
stated in said statutes, except as otherwise provided in the Labor Law and as
set forth in prevailing wage and supplement schedules issued by the State Labor
Department. Furthermore, Contractor and its subcontractors must pay at least the
prevailing wage rate and pay or provide the prevailing supplements, including
the premium rates for overtime pay, as determined by the State Labor Department
in accordance with the Labor Law. Additionally, effective April 28, 2008, if
this is a public work contract covered by Article 8 of the Labor Law, the
Contractor understands and agrees that the filing of payrolls in a manner
consistent with Subdivision 3-a of Section 220 of the Labor Law shall be a
condition precedent to payment by NYSERDA of any NYSERDA-approved sums due and
owing for work done upon the project.

 

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EXECUTION VERSION

 

3. NON-COLLUSIVE BIDDING REQUIREMENT. In accordance with Section 2878 of the
Public Authorities Law, if this Agreement was awarded based upon the submission
of bids, Contractor warrants, under penalty of perjury, that its bid was arrived
at independently and without collusion aimed at restricting competition.
Contractor further warrants that, at the time Contractor submitted its bid, an
authorized and responsible person executed and delivered to NYSERDA a
non-collusive bidding certification on Contractor’s behalf.

4. INTERNATIONAL BOYCOTT PROHIBITION. If this Agreement exceeds $5,000, the
Contractor agrees, as a material condition of the Agreement, that neither the
Contractor nor any substantially owned or affiliated person, firm, partnership
or corporation has participated, is participating, or shall participate in an
international boycott in violation of the Federal Export Administration Act of
1979 (50 USC App. Sections 2401 et seq.) or regulations thereunder. If such
Contractor, or any of the aforesaid affiliates of Contractor, is convicted or is
otherwise found to have violated said laws or regulations upon the final
determination of the United States Commerce Department or any other appropriate
agency of the United States subsequent to the Agreement’s execution, such
Agreement, amendment or modification thereto shall be rendered forfeit and void.
The Contractor shall so notify NYSERDA within five (5) Business Days of such
conviction, determination or disposition of appeal. (See and compare
Section 220-f of the Labor Law, Section 139-h of the State Finance Law, and 2
NYCRR 105.4).

5. SET-OFF RIGHTS. NYSERDA shall have all of its common law and statutory rights
of set-off. These rights shall include, but not be limited to, NYSERDA’s option
to withhold for the purposes of set-off any moneys due to the Contractor under
this Agreement up to any amounts due and owing to NYSERDA with regard to this
Agreement, any other Agreement, including any Agreement for a term commencing
prior to the term of this Agreement, plus any amounts due and owing to NYSERDA
for any other reason including, without limitation, tax delinquencies, fee
delinquencies or monetary penalties relative thereto.

6. PROPRIETARY INFORMATION. Notwithstanding any provisions to the contrary in
the Agreement, Contractor and NYSERDA acknowledge and agree that all
information, in any format, submitted to NYSERDA shall be subject to and treated
in accordance with the NYS Freedom of Information Law (“FOIL,” Public Officers
Law, Article 6). Pursuant to FOIL, NYSERDA is required to make available to the
public, upon request, records or portions thereof which it possesses, unless
that information is statutorily exempt from disclosure. Therefore, unless the
Agreement specifically requires otherwise, Contractor should submit information
to NYSERDA in a non-confidential, non-proprietary format. FOIL does provide that
NYSERDA may deny access to records or portions thereof that “are trade secrets
or are submitted to an agency by a commercial enterprise or derived from
information obtained from a commercial enterprise and which if disclosed would
cause substantial injury to the competitive position of the subject
enterprise.” [See Public Officers Law, § 87(2)(d)]. Accordingly, if the
Agreement specifically requires submission of information in a format Contractor
considers a proprietary and/or confidential trade secret, Contractor shall fully
identify and plainly label the information “confidential” or “proprietary” at
the time of disclosure. By so marking such information, Contractor represents
that the information has actual or potential specific commercial or competitive
value to the competitors of Contractor. Without limitation, information will not
be considered confidential or proprietary if it is or has been (i) generally
known or available from other sources without obligation concerning its
confidentiality; (ii) made available by the owner

 

A - 2

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EXECUTION VERSION

 

to others without obligation concerning its confidentiality; or (iii) already
available to NYSERDA without obligation concerning its confidentiality. In the
event of a FOIL request, it is NYSERDA’s policy to consider records as marked
above pursuant to the trade secret exemption procedure set forth in 21 New York
Codes Rules & Regulations § 501.6 and any other applicable law or
regulation. However, NYSERDA cannot guarantee the confidentiality of any
information submitted. More information on FOIL, and the relevant statutory law
and regulations, can be found at the website for the Committee on Open
Government (http://www.dos.state.ny.us/coog/foil2.html) and NYSERDA’s
Regulations, Part 501
(http://www.nyserda.ny.gov/About/New-York-State-Regulations.aspx ).

7. IDENTIFYING INFORMATION AND PRIVACY NOTIFICATION. (a) FEDERAL EMPLOYER
IDENTIFICATION NUMBER and/or FEDERAL SOCIAL SECURITY NUMBER. As a condition to
NYSERDA’s obligation to pay any invoices submitted by Contractor pursuant to
this Agreement, Contractor shall provide to NYSERDA its Federal employer
identification number or Federal social security number, or both such numbers
when the Contractor has both such numbers. Where the Contractor does not have
such number or numbers, the Contractor must give the reason or reasons why the
payee does not have such number or numbers.

(b) PRIVACY NOTIFICATION. The authority to request the above personal
information from a seller of goods or services or a lessor of real or personal
property, and the authority to maintain such information, is found in Section 5
of the State Tax Law. Disclosure of this information by Contractor to the State
is mandatory. The principal purpose for which the information is collected is to
enable the State to identify individuals, businesses and others who have been
delinquent in filing tax returns or may have understated their tax liabilities
and to generally identify persons affected by the taxes administered by the
Commissioner of Taxation and Finance. The information will be used for tax
administration purposes and for any other purpose authorized by law.

8. CONFLICTING TERMS. In the event of a conflict between the terms of the
Agreement (including any and all attachments thereto and amendments thereof) and
the terms of this Exhibit A, the terms of this Exhibit A shall control.

9. GOVERNING LAW. This Agreement shall be governed by the laws of the State of
New York except where the Federal supremacy clause requires otherwise.

10. NO ARBITRATION. Disputes involving this Agreement, including the breach or
alleged breach thereof, may not be submitted to binding arbitration (except
where statutorily required) without the NYSERDA’s written consent, but must,
instead, be heard in a court of competent jurisdiction of the State of New York.

11. SERVICE OF PROCESS. In addition to the methods of service allowed by the
State Civil Practice Law and Rules (“CPLR”), Contractor hereby consents to
service of process upon it by registered or certified mail, return receipt
requested. Service hereunder shall be complete upon Contractor’s actual receipt
of process or upon NYSERDA’s receipt of the return thereof by the United States
Postal Service as refused or undeliverable. Contractor must promptly notify
NYSERDA, in writing, of each and every change of address to which service of

 

A - 3

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EXECUTION VERSION

 

process can be made. Service by NYSERDA to the last known address shall be
sufficient. Contractor will have thirty (30) calendar days after service
hereunder is complete in which to respond.

12. CRIMINAL ACTIVITY. If subsequent to the effectiveness of this Agreement,
NYSERDA comes to know of any allegation previously unknown to it that the
Contractor or any of its principals is under indictment for a felony, or has
been, within five (5) years prior to submission of the Contractor’s proposal to
NYSERDA, convicted of a felony, under the laws of the United States or Territory
of the United States, then NYSERDA may exercise its stop work right under this
Agreement. If subsequent to the effectiveness of this Agreement, NYSERDA comes
to know of the fact, previously unknown to it, that Contractor or any of its
principals is under such indictment or has been so convicted, then NYSERDA may
exercise its right to terminate this Agreement. If the Contractor knowingly
withheld information about such an indictment or conviction, NYSERDA may declare
the Agreement null and void and may seek legal remedies against the Contractor
and its principals. The Contractor or its principals may also be subject to
penalties for any violation of law which may apply in the particular
circumstances. For a Contractor which is an association, partnership,
corporation, or other organization, the provisions of this paragraph apply to
any such indictment or conviction of the organization itself or any of its
officers, partners, or directors or members of any similar governing body, as
applicable.

13. PERMITS. It is the responsibility of the Contractor to acquire and maintain,
at its own cost, any and all permits, licenses, easements, waivers and
permissions of every nature necessary to perform the work.

14. PROHIBITION ON PURCHASE OF TROPICAL HARDWOODS. The Contractor certifies and
warrants that all wood products to be used under this Agreement will be in
accordance with, but not limited to, the specifications and provisions of State
Finance Law Section 165 (Use of Tropical Hardwoods), which prohibits purchase
and use of tropical hardwoods, unless specifically exempted by NYSERDA.

15. OMNIBUS PROCUREMENT ACT OF 1992. It is the policy of New York State to
maximize opportunities for the participation of New York State business
enterprises, including minority and women-owned business enterprises as bidders,
subcontractors and suppliers on its procurement contracts.

Information on the availability of New York State subcontractors and suppliers
is available from:

NYS Department of Economic Development

Division for Small Business

625 Broadway

Albany, New York 12207

Telephone: 518-292-5200

Fax: 518-292-5884

http://www.esd.ny.gov

http://www.esd.ny.gov

 

A - 4

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EXECUTION VERSION

 

A directory of certified minority and women-owned business enterprises is
available from:

NYS Department of Economic Development

Division of Minority and Women’s Business Development

625 Broadway

Albany, New York 12207

Telephone: 518-292-5200

Fax: 518-292-5803

http://www.empire.state.ny.us

The Omnibus Procurement Act of 1992 requires that by signing this Agreement,
Contractors certify that whenever the total amount is greater than $1 million:

(a) The Contractor has made reasonable efforts to encourage the participation of
New York State Business Enterprises as suppliers and subcontractors, including
certified minority and women-owned business enterprises, on this project, and
has retained the documentation of these efforts to be provided upon request to
the State;

(b) The Contractor has complied with the Federal Equal Opportunity Act of 1972
(P.L. 92-261), as amended;

(c) The Contractor agrees to make reasonable efforts to provide notification to
New York State residents of employment opportunities on this project through
listing any such positions with the Job Service Division of the New York State
Department of Labor, or providing such notification in such manner as is
consistent with existing collective bargaining contracts or agreements. The
Contractor agrees to document these efforts and to provide said documentation to
the State upon request; and

(d) The Contractor acknowledges notice that the State may seek to obtain offset
credits from foreign countries as a result of this contract and agrees to
cooperate with the State in these efforts.

16. RECIPROCITY AND SANCTIONS PROVISIONS. Bidders are hereby notified that if
their principal place of business is located in a country, nation, province,
state or political subdivision that penalizes New York State vendors, and if the
goods or services they offer will be substantially produced or performed outside
New York State, the Omnibus Procurement Act 1994 and 2000 amendments (Chapter
684 and Chapter 383, respectively) require that they be denied contracts which
they would otherwise obtain. NOTE: As of May 15, 2002, the list of
discriminatory jurisdictions subject to this provision includes the states of
South Carolina, Alaska, West Virginia, Wyoming, Louisiana and Hawaii. Contact
NYS Department of Economic Development for a current list of jurisdictions
subject to this provision.

17. COMPLIANCE WITH NEW YORK STATE INFORMATION SECURITY BREACH AND NOTIFICATION
ACT. Contractor shall comply with the provisions of the New York State
Information Security Breach and Notification Act (General Business Law
Section 899-aa; State Technology Law Section 208).

 

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EXECUTION VERSION

 

18. PROCUREMENT LOBBYING. To the extent this Agreement is a “procurement
contract” as defined by State Finance Law Sections 139-j and 139-k, by signing
this Agreement the Contractor certifies and affirms that all disclosures made in
accordance with State Finance Law Sections 139-j and 139-k are complete, true
and accurate. In the event such certification is found to be intentionally false
or intentionally incomplete, NYSERDA may terminate the agreement by providing
written notification to the Contractor in accordance with the terms of the
agreement.

19. COMPLIANCE WITH TAX LAW SECTION 5-a. The following provisions apply to
Contractors that have entered into agreements in an amount exceeding $100,000
for the purchase of goods and services:

(a) Before such agreement can take effect, the Contractor must have on file with
the New York State Department of Taxation and Finance a Contractor Certification
form (ST-220-TD).

(b) Prior to entering into such an agreement, the Contractor is required to
provide NYSERDA with a completed Contractor Certification to Covered Agency form
(Form ST-220-CA).

(c) Prior to any renewal period (if applicable) under the agreement, the
Contractor is required to provide NYSERDA with a completed Form ST-220-CA.

Certifications referenced in paragraphs (b) and (c) above will be maintained by
NYSERDA and made a part hereof and incorporated herein by reference.

NYSERDA reserves the right to terminate this agreement in the event it is found
that the certification filed by the Contractor in accordance with Tax Law
Section 5-a was false when made.

20. IRANIAN ENERGY SECTOR DIVESTMENT. In accordance with Section 2879-c of the
Public Authorities Law, by signing this contract, each person and each person
signing on behalf of any other party certifies, and in the case of a joint bid
or partnership each party thereto certifies as to its own organization, under
penalty of perjury, that to the best of its knowledge and belief that each
person is not on the list created pursuant to paragraph (b) of subdivision 3 of
section 165-a of the State Finance Law (See www.ogs.ny.gov/about/regs/ida.asp).

 

A - 6

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EXHIBIT B

NYSERDA PROMPT PAYMENT POLICY STATEMENT

504.1. Purpose and Applicability. (a) The purpose of this Exhibit is to provide
a description of Part 504 of NYSERDA’s regulations, which consists of NYSERDA’s
policy for making payment promptly on amounts properly due and owing by NYSERDA
under this Agreement. The section numbers used in this document correspond to
the section numbers appearing in Part 504 of the regulations.1

(b) This Exhibit applies generally to payments due and owing by the NYSERDA to
the Contractor pursuant to this Agreement. However, this Exhibit does not apply
to Payments due and owing when NYSERDA is exercising a Set-Off against all or
part of the Payment, or if a State or Federal law, rule or regulation
specifically requires otherwise.

504.2. Definitions. Capitalized terms not otherwise defined in this Exhibit
shall have the same meaning as set forth earlier in this Agreement. In addition
to said terms, the following terms shall have the following meanings, unless the
context shall indicate another or different meaning or intent:

(a) “Date of Payment” means the date on which NYSERDA requisitions a check from
its statutory fiscal agent, the Department of Taxation and Finance, to make a
Payment.

(b) “Designated Payment Office” means the Office of NYSERDA’s Controller,
located at 17 Columbia Circle, Albany, New York 12203.

(c) “Payment” means payment properly due and owing to Contractor pursuant to
Article IV, Exhibit B of this Agreement.

(d) “Prompt Payment” means a Payment within the time periods applicable pursuant
to Sections 504.3 through 504.5 of this Exhibit in order for NYSERDA not to be
liable for interest pursuant to Section 504.6.

(e) “Payment Due Date” means the date by which the Date of Payment must occur,
in accordance with the provisions of Sections 504.3 through 504.5 of this
Exhibit, in order for NYSERDA not to be liable for interest pursuant to
Section 504.6.

(f) “Proper Invoice” means a written request for Payment that is submitted by a
Contractor setting forth the description, price or cost, and quantity of goods,
property or services delivered or rendered, in such form, and supported by such
other substantiating documentation, as NYSERDA may reasonably require, including
but not limited to any requirements set forth in Exhibits A or B to this
Agreement; and addressed to NYSERDA’s Controller, marked “Attention: Accounts
Payable,” at the Designated Payment Office.

(g)(1) “Receipt of an Invoice” means:

 

 

1  This is only a summary; the full text of Part 504 can be accessed at:
http://www.nyserda.ny.gov/en/About/~/media/Files/About/Contact/NYSERDARegulations.ashx

 

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EXECUTION VERSION

 

(i) if the Payment is one for which an invoice is required, the later of:

(a) the date on which a Proper Invoice is actually received in the Designated
Payment Office during normal business hours; or

(b) the date by which, during normal business hours, NYSERDA has actually
received all the purchased goods, property or services covered by a Proper
Invoice previously received in the Designated Payment Office.

(ii) if the Agreement provides that a Payment will be made on a specific date or
at a predetermined interval, without having to submit a written invoice the 30th
calendar day, excluding legal holidays, before the date so specified or
predetermined.

(2) For purposes of this subdivision, if the Agreement requires a multifaceted,
completed or working system, or delivery of no less than a specified quantity of
goods, property or services and only a portion of such systems or less than the
required goods, property or services are working, completed or delivered, even
though the Contractor has invoiced NYSERDA for the portion working, completed or
delivered, NYSERDA will not be in Receipt of an Invoice until the specified
minimum amount of the systems, goods, property or services are working,
completed or delivered.

(h) “Set-off” means the reduction by NYSERDA of a payment due a Contractor by an
amount equal to the amount of an unpaid legally enforceable debt owed by the
Contractor to NYSERDA.

504.3. Prompt Payment Schedule. Except as otherwise provided by law or
regulation or in Sections 504.4 and 504.5 of this Exhibit, the Date of Payment
by NYSERDA of an amount properly due and owing under this Agreement shall be no
later than thirty (30) calendar days, excluding legal holidays, after Receipt of
a Proper Invoice.

504.4. Payment Procedures.

(a) Unless otherwise specified in this Agreement, a Proper Invoice submitted by
the Contractor to the Designated Payment Office shall be required to initiate
payment for goods, property or services. As soon as any invoice is received in
the Designated Payment Office during normal business hours, such invoice shall
be date-stamped. The invoice shall then promptly be reviewed by NYSERDA.

(b) NYSERDA shall notify the Contractor within fifteen (15) calendar days after
Receipt of an Invoice of:

(1) any defects in the delivered goods, property or services;

(2) any defects in the invoice; or

(3) suspected improprieties of any kind.

(c) The existence of any defects or suspected improprieties shall prevent the
commencement of the time period specified in Section 504.3 until any such
defects or improprieties are corrected or otherwise resolved.

 

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EXECUTION VERSION

 

(d) If NYSERDA fails to notify a Contractor of a defect or impropriety within
the fifteen (15) calendar day period specified in subdivision (b) of this
section, the sole effect shall be that the number of days allowed for Payment
shall be reduced by the number of days between the 15th day and the day that
notification was transmitted to the Contractor. If NYSERDA fails to provide
reasonable grounds for its contention that a defect or impropriety exists, the
sole effect shall be that the Payment Due Date shall be calculated using the
original date of Receipt of an Invoice.

(e) In the absence of any defect or suspected impropriety, or upon satisfactory
correction or resolution of a defect or suspected impropriety, NYSERDA shall
make Payment, consistent with any such correction or resolution and the
provisions of this Exhibit.

504.5. Exceptions and Extension of Payment Due Date. NYSERDA has determined
that, notwithstanding the provisions of Sections 504.3 and 504.4 of this
Exhibit, any of the following facts or circumstances, which may occur
concurrently or consecutively, reasonably justify extension of the Payment Due
Date:

(a) If this Agreement provides Payment will be made on a specific date or at a
predetermined interval, without having to submit a written invoice, if any
documentation, supporting data, performance verification, or notice specifically
required by this Agreement or other State or Federal mandate has not been
submitted to NYSERDA on a timely basis, then the Payment Due Date shall be
extended by the number of calendar days from the date by which all such matter
was to be submitted to NYSERDA and the date when NYSERDA has actually received
such matter.

(b) If an inspection or testing period, performance verification, audit or other
review or documentation independent of the Contractor is specifically required
by this Agreement or by other State or Federal mandate, whether to be performed
by or on behalf of NYSERDA or another entity, or is specifically permitted by
this Agreement or by other State or Federal provision and NYSERDA or other
entity with the right to do so elects to have such activity or documentation
undertaken, then the Payment Due Date shall be extended by the number of
calendar days from the date of Receipt of an Invoice to the date when any such
activity or documentation has been completed, NYSERDA has actually received the
results of such activity or documentation conducted by another entity, and any
deficiencies identified or issues raised as a result of such activity or
documentation have been corrected or otherwise resolved.

(c) If an invoice must be examined by a State or Federal agency, or by another
party contributing to the funding of the Contract, prior to Payment, then the
Payment Due Date shall be extended by the number of calendar days from the date
of Receipt of an Invoice to the date when the State or Federal agency, or other
contributing party to the Contract, has completed the inspection, advised
NYSERDA of the results of the inspection, and any deficiencies identified or
issues raised as a result of such inspection have been corrected or otherwise
resolved.

 

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EXECUTION VERSION

 

(d) If appropriated funds from which Payment is to be made have not yet been
appropriated or, if appropriated, not yet been made available to NYSERDA, then
the Payment Due Date shall be extended by the number of calendar days from the
date of Receipt of an Invoice to the date when such funds are made available to
NYSERDA.

504.6. Interest Eligibility and Computation. If NYSERDA fails to make Prompt
Payment, NYSERDA shall pay interest to the Contractor on the Payment when such
interest computed as provided herein is equal to or more than ten dollars
($10.00). Interest shall be computed and accrue at the daily rate in effect on
the Date of Payment, as set by the New York State Tax Commission for corporate
taxes pursuant to Section 1096(e)(1) of the Tax Law. Interest on such a Payment
shall be computed for the period beginning on the day after the Payment Due Date
and ending on the Date of Payment.

504.7. Sources of Funds to Pay Interest. Any interest payable by NYSERDA
pursuant to Exhibit shall be paid only from the same accounts, funds, or
appropriations that are lawfully available to make the related Payment.

504.8. Incorporation of Prompt Payment Policy Statement into Contracts. The
provisions of this Exhibit shall apply to all Payments as they become due and
owing pursuant to the terms and conditions of this Agreement, notwithstanding
that NYSERDA may subsequently amend its Prompt Payment Policy by further
rulemaking.

504.9. Notice of Objection. Contractor may object to any action taken by NYSERDA
pursuant to this Exhibit that prevents the commencement of the time in which
interest will be paid by submitting a written notice of objection to NYSERDA.
Such notice shall be signed and dated and concisely and clearly set forth the
basis for the objection and be addressed to the Vice President, New York State
Energy Research and Development Authority, at the notice address set forth in
Exhibit B to this Agreement. The Vice President of NYSERDA, or his or her
designee, shall review the objection for purposes of affirming or modifying
NYSERDA’s action. Within fifteen (15) working days of the receipt of the
objection, the Vice President, or his or her designee, shall notify the
Contractor either that NYSERDA’s action is affirmed or that it is modified or
that, due to the complexity of the issue, additional time is needed to conduct
the review; provided, however, in no event shall the extended review period
exceed thirty (30) working days.

504.10. Judicial Review. Any determination made by NYSERDA pursuant to this
Exhibit that prevents the commencement of the time in which interest will be
paid is subject to judicial review in a proceeding pursuant to Article 78 of the
Civil Practice Law and Rules. Such proceedings shall only be commenced upon
completion of the review procedure specified in Section 504.9 of this Exhibit or
any other review procedure that may be specified in this Agreement or by other
law, rule, or regulation.

504.11. Court Action or Other Legal Processes.

(a) Notwithstanding any other law to the contrary, the liability of NYSERDA to
make an interest payment to a Contractor pursuant to this Exhibit shall not
extend beyond the date of a notice of intention to file a claim, the date of a
notice of a claim, or the date commencing a legal action for the payment of such
interest, whichever occurs first.

 

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EXECUTION VERSION

 

(b) With respect to the court action or other legal processes referred to in
subdivision (a) of this section, any interest obligation incurred by NYSERDA
after the date specified therein pursuant to any provision of law other than
Public Authorities Law Section 2880 shall be determined as prescribed by such
separate provision of law, shall be paid as directed by the court, and shall be
paid from any source of funds available for that purpose.

 

B - 5

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EXECUTION VERSION

 

EXHIBIT C

CERTIFICATION FORM

NYSERDA Agreement No.             

Name of Seller:                                                      

Name of Facility:                                                      

Invoice Number:                                                      

Serial Number(s):                                                  

Total Number of ZECs:                                                  

Terms used in this Certificate are used with the meanings given to such terms in
the referenced NYSERDA Agreement.

Seller certifies that, to Seller’s knowledge, all of the information provided on
the attached invoice requesting payment from NYSERDA is true and accurate; that
the ZECs delivered by Seller (identified by the serial number(s) above) by
designation for transfer to NYSERDA in accordance with the NYGATS Operating
Rules are free and clear of all liens, judgments, encumbrances and similar
restrictions created by or on behalf of Seller or any party claiming through
Seller, and have not otherwise been, nor will be, sold, retired, claimed or
represented by or on behalf of Seller or any party claiming through Seller, as
part of electricity output or sales, or used by or on behalf of Seller or any
party claiming through Seller, to satisfy obligations in any other jurisdiction.

Seller further certifies that all representations and warranties of the Seller
set forth in Section 15.1 of the NYSERDA Agreement are true and correct on the
date hereof as though made on the date hereof, other than such representations
and warranties that are expressly effective as of an earlier date, in which
case, such representations and warranties continue to be true and correct as of
such date.

Quarterly Invoice Date:                         

By:                                                              

 

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EXECUTION VERSION

 

EXHIBIT D

ZERO EMISSIONS CREDIT PRICING

The ZEC Price will be determined in six, 2-year Tranches, as follows:

Tranche 1: April 1, 2017 – March 31, 2019

Tranche 2: April 1, 2019 – March 31, 2021

Tranche 3: April 1, 2021 – March 31, 2023

Tranche 4: April 1, 2023 – March 31, 2025

Tranche 5: April 1, 2025 – March 31, 2027

Tranche 6: April 1, 2027 – March 31, 2029

For Tranche 1, the ZEC Price shall be $17.48.

For Tranches 2 through 6, the ZEC Price shall be as calculated by NYSERDA in
consultation with DPS staff, calculated for the relevant Tranche t using the
following formula:

ZEC Pricet = Max(0, Base ZEC Pricet – Max(0, (Energy Forward Indext + Capacity
Forward Indext – Zone A Reference Pricet))); where

 

  •   Base ZEC Pricet shall be determined as follows for each Tranche:

 

  •   For Tranche 2, the Base ZEC Price shall be $19.59

 

  •   For Tranche 3, the Base ZEC Price shall be $21.38

 

  •   For Tranches 4 through 6, the Base ZEC Price shall be determined using the
following formula:

Base ZEC Pricet = Net CO2 Externalityt x (0.53846 - (0.00491 x Max(0,
Min(26.704, (Incremental Renewable Generationt /1,000,000)) – 8.704))); where

Net CO2 Externality shall be equal to 44.26 for Tranche 4, 49.13 for Tranche 5,
and 54.13 for Tranche 6

Incremental Renewable Generation shall be the total amount, denominated in
megawatt-hours, of Renewable Energy Credits (“RECs”) qualified to serve Tier 1
of the New York Renewable Energy Standard (i.e. new renewable resources of all
types beginning commercial operation on or after January 1st, 2015 that are
eligible to satisfy the Renewable Energy Standard) generated in calendar years
2022, 2024, and 2026 as reported by the New York Generation Attribute Tracking
System. The Incremental Renewable Generation for calendar year 2022 will be
utilized in determining the Base ZEC Price for Tranche 4, the Incremental
Renewable Generation for calendar year 2024 will be utilized in determining the
Base ZEC Price for Tranche 5, and the Incremental Renewable Generation for
calendar year 2026 will be utilized in determining the Base ZEC Price for
Tranche 6.

 

D - 1

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EXECUTION VERSION

 

  •   Energy Forward Indext shall be the average NYISO Zone A energy price
forecast for the period covered by the Tranche, developed using futures prices
reported on the Intercontinental Exchange (“ICE”) as follows:

 

  1) for each trading day during the calendar year preceding each Tranche,
On-Peak Monthly Forward Energy Prices and Off-Peak Monthly Forward Energy Prices
for the 24 months of the Tranche will be separately averaged, yielding separate
average on-peak and off-peak Tranche energy prices for each trading day;

 

  2) each trading day’s average Tranche on-peak and off-peak energy prices
(developed in step 1) will be time-weight averaged based on the number of
on-peak and off peak hours in the Tranche, yielding a single average all-hours
energy price for the Tranche for each trading day;

 

  3) the average Tranche all-hours energy prices for each of the trading days
during the calendar year preceding each Tranche (developed in step 2) will be
averaged, yielding the NYISO Zone A energy price forecast for the Tranche
expressed in dollars per MWh.

 

  •   Capacity Forward Indext shall be the average NYISO Rest of the State
capacity price forecast for the period covered by the Tranche, developed using
futures prices reported on the New York Mercantile Exchange (“NYMEX”) as
follows:

 

  1) for each trading day during the final 6 months of the calendar year
preceding each Tranche, NYMEX Rest of the State Capacity Calendar-Month settled
futures prices for the first 12 months of the Tranche will be averaged, yielding
a separate average annualized capacity price for each trading day

 

  2) the average annualized capacity prices for each of the trading days during
the final six months of the calendar year preceding each Tranche (developed in
step 1) will be averaged, yielding a single average annualized capacity price
for the Tranche, expressed in dollars per kilowatt-month

 

  3) the average annualized capacity price developed in step 2 will be
multiplied by 1.3699 to yield an average annualized capacity price for the
Tranche expressed in dollars per MWh.

 

D - 2

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EXECUTION VERSION

 

  •   Zone A Reference Pricet shall be determined as follows for each Tranche:

 

  •   For Tranche 2, the Zone A Reference Price shall be $39

 

  •   For Tranche 3, the Zone A Reference Price shall be $39

 

  •   For Tranches 4 through 6, the Zone A Reference Price shall be determined
using the following formula:

Zone A Reference Pricet = $39 + Energy Basis Adjustment; where

Energy basis adjustment is determined as follows:

 

  1) the simple average hourly day-ahead energy price over the six-year period
covering calendar years 2017 through 2022 will be calculated using historic
price data reported by the New York ISO for New York Zone A (“WEST (ZONE A)”),
the R.E. Ginna nuclear unit generation bus (“GINNA            ”), the R.A.
FitzPatrick nuclear unit generation bus (“FITZPATRICK            ”), the Nine
Mile Point 1 nuclear unit generation bus (“NINE_MILE_1”), and the Nine Mile
Point 2 nuclear unit generation bus (“NINE_MILE_2”)

 

  2) each of the five six-year historical average nuclear unit generation bus
energy prices will be subtracted from the six-year historical average Zone A
energy price to calculate five unit-specific historic energy price basis
differentials with Zone A

 

  3) the five unit-specific historic energy price basis differentials calculated
in step 2 will be weighted by their actual six-year cumulative energy output
over the 2017 through 2022 period to determine a single weighted-average
historic energy basis differential, denominated in dollars per MWh.

 

  4) if the weighted-average historic energy basis differential calculated in
step 3 is between $5 per MWh and $7 per MWh, the Energy Basis Adjustment shall
be $0 per MWh

 

  5) If the weighted-average historic energy basis differential calculated in
step 3 is less than $5 per MWh, the Energy Basis Adjustment shall be equal to
the weighted-average historic energy basis differential minus $5 per MWh

 

  6) If the weighted-average historic energy basis differential calculated in
step 3 is greater than $7 per MWh, the Energy Basis Adjustment shall be equal to
the weighted-average historic energy basis differential minus $7 per MWh.

If the foregoing calculation yields a negative number, the ZEC Price shall be
deemed to equal zero ($0).

 

D - 3

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EXECUTION VERSION

 

Example Calculations:

Example 1:

Assumptions

Tranche 2

Energy Forward Index = $42

Capacity Forward Index = $7

Resulting ZEC Price

Base ZEC Price = $19.59

ZEC Price = $19.59 – ($42 + $7 – $39) = $9.59

Example 2:

Assumptions

Tranche 4

Energy Forward Index = $42

Capacity Forward Index = $7

Incremental Renewable Generation = 8,000,000

Energy Basis Adjustment = $0

Resulting ZEC Price

Base ZEC Price = 44.26 x (0.53846 – (.00491 x 0)) = $23.83

ZEC Price = $23.83 – ($42 + $7 – $39) = $13.83

Example 3:

Assumptions

Tranche 4

Energy Forward Index = $42

Capacity Forward Index = $7

Incremental Renewable Generation = 13,000,000

Energy Basis Adjustment = $0

Resulting ZEC Price

Base ZEC Price = 44.26 x (0.53846 – (.00491 x (13,000,000 / 1,000,000 – 8.704))
= $22.90

ZEC Price = $22.90 – ($42 + $7 – $39) = $12.90

 

D - 4