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Exhibit 10.1

 

ZION NUCLEAR POWER STATION, UNITS 1 AND 2

ASSET SALE AGREEMENT

 

 

BY AND AMONG

EXELON GENERATION COMPANY, LLC
as SELLER,

ZIONSOLUTIONS, LLC

as BUYER,

 

 

ENERGYSOLUTIONS, LLC

as BUYER’S PARENT

 

and

 

ENERGYSOLUTIONS, INC.

as GUARANTOR

 

 

DECEMBER 11, 2007

 

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TABLE OF CONTENTS

 

1.

    DEFINITIONS

2

 

 

 

 

 

1.1.

DEFINITIONS

2

 

1.2.

CERTAIN INTERPRETIVE MATTERS

19

 

 

 

 

2.

    PURCHASE AND SALE

20

 

 

 

 

 

2.1.

ZION ASSETS

20

 

2.2.

EXCLUDED ASSETS

22

 

2.3.

ASSUMED LIABILITIES AND OBLIGATIONS

24

 

2.4.

EXCLUDED LIABILITIES

26

 

2.5.

CONTROL OF LITIGATION

29

 

 

 

 

3.

    THE CLOSING

29

 

 

 

 

 

3.1.

CLOSING

29

 

3.2.

PAYMENT OF PURCHASE PRICE

29

 

3.3.

PRORATIONS

30

 

3.4.

DELIVERIES BY SELLER

31

 

3.5.

DELIVERIES BY BUYER AND BUYER’S PARENT

32

 

 

 

 

4.

    REPRESENTATIONS AND WARRANTIES OF SELLER

33

 

 

 

 

 

4.1.

ORGANIZATION

33

 

4.2.

AUTHORITY RELATIVE TO THIS AGREEMENT

33

 

4.3.

CONSENTS AND APPROVALS; NO VIOLATION

34

 

4.4.

REPORTS

34

 

4.5.

ABSENCE OF SELLER MATERIAL ADVERSE EFFECT

35

 

4.6.

TITLE AND RELATED MATTERS

35

 

4.7.

REAL PROPERTY AGREEMENTS

35

 

4.8.

INSURANCE

36

 

4.9.

ENVIRONMENTAL MATTERS

36

 

4.10.

CERTAIN CONTRACTS AND ARRANGEMENTS

38

 

4.11.

LEGAL PROCEEDINGS

38

 

4.12.

PERMITS

39

 

4.13.

NRC LICENSES

39

 

4.14.

REGULATION AS A UTILITY

39

 

4.15.

TAX MATTERS

40

 

4.16.

QDF

40

 

4.17.

NDF

41

 

4.18.

COMPLETE COPIES

41

 

4.19.

BUYER’S REPRESENTATIONS AND WARRANTIES

42

 

 

 

 

5.

    REPRESENTATIONS AND WARRANTIES OF BUYER AND BUYER’S PARENT

42

 

 

 

 

 

5.1.

ORGANIZATION; QUALIFICATION

42

 

5.2.

AUTHORITY RELATIVE TO THIS AGREEMENT

43

 

5.3.

CONSENTS AND APPROVALS; NO VIOLATION

43

 

5.4.

LEGAL PROCEEDINGS

44

 

5.5.

ABSENCE OF BUYER MATERIAL ADVERSE EFFECT; LIABILITIES

44

 

5.6.

TRANSFER OF DECOMMISSIONING FUNDS

44

 

5.7.

FOREIGN OWNERSHIP OR CONTROL

45

 

5.8.

SELLER’S REPRESENTATIONS AND WARRANTIES

45

 

5.9.

PERMIT QUALIFICATIONS

45

 

 

 

 

6.

    COVENANTS OF THE PARTIES

45

 

 

 

 

 

6.1.

SELLER’S CONDUCT OF BUSINESS RELATING TO THE ZION ASSETS

45

 

6.2.

BUYER’S AND BUYER’S PARENT CONDUCT OF BUSINESS RELATING TO THE ZION ASSETS

48

 

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6.3.

ACCESS TO INFORMATION; PROTECTION OF PROPRIETARY INFORMATION

49

 

6.4.

EXPENSES

52

 

6.5.

FURTHER ASSURANCES; COOPERATION

52

 

6.6.

PUBLIC STATEMENTS

54

 

6.7.

CONSENTS AND APPROVALS

54

 

6.8.

BROKERAGE FEES AND COMMISSIONS

56

 

6.9.

TAX MATTERS

56

 

6.10.

ADVICE OF CHANGES

58

 

6.11.

EMPLOYEES

59

 

6.12.

DECOMMISSIONING FUNDS

59

 

6.13.

SPENT NUCLEAR FUEL FEES

61

 

6.14.

DEPARTMENT OF ENERGY DECONTAMINATION AND DECOMMISSIONING FEES

61

 

6.15.

COOPERATION RELATING TO INSURANCE AND PRICE-ANDERSON ACT

62

 

6.16.

RELEASE OF SELLER

62

 

6.17.

NRC COMMITMENTS

62

 

6.18.

DECOMMISSIONING

62

 

6.19.

NUCLEAR INSURANCE POLICIES

62

 

6.20

Illinois Governmental Authorities

63

 

6.21

Project Budget and Schedule

63

 

6.22

Claims Against Buyer

69

 

 

 

 

7.

    CONDITIONS

70

 

 

 

 

 

7.1.

CONDITIONS TO OBLIGATIONS OF BUYER

70

 

7.2.

CONDITIONS TO OBLIGATIONS OF SELLER

71

 

 

 

 

8.

    INDEMNIFICATION

73

 

 

 

 

 

8.1.

INDEMNIFICATION

73

 

8.2.

DEFENSE OF CLAIMS

75

 

 

 

 

9.

    TERMINATION

77

 

 

 

 

 

9.1.

TERMINATION. THIS AGREEMENT MAY BE TERMINATED AS FOLLOWS:

77

 

9.2.

EFFECT OF TERMINATION

78

 

 

 

 

10.

       MISCELLANEOUS PROVISIONS

78

 

 

 

 

 

10.1.

AMENDMENT AND MODIFICATION

78

 

10.2.

WAIVER OF COMPLIANCE; CONSENTS

79

 

10.3.

SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND OBLIGATIONS

79

 

10.4.

NOTICES

79

 

10.5.

ASSIGNMENT

81

 

10.6.

GOVERNING LAW

81

 

10.7.

COUNTERPARTS

81

 

10.8.

SCHEDULES AND EXHIBITS

82

 

10.9.

ENTIRE AGREEMENT

82

 

10.10.

ACKNOWLEDGMENT; INDEPENDENT DUE DILIGENCE

82

 

10.11.

BULK SALES LAWS

83

 

10.12.

NO JOINT VENTURE

83

 

10.13.

CHANGE IN LAW

83

 

10.14.

SEVERABILITY

83

 

10.15.

SPECIFIC PERFORMANCE

83

 

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LIST OF EXHIBITS

 

EXHIBITS

 

Exhibit A

 

Form of Assignment and Assumption Agreement

Exhibit B

 

Form of Bill of Sale

Exhibit C

 

Form of Lease Agreement

Exhibit D

 

Form of Put Option Agreement

Exhibit E

 

Form of Pledge Agreement

Exhibit F

 

Form of Credit Support Agreement

Exhibit G

 

Form of Irrevocable Easement for Disposal Capacity

Exhibit H

 

Form of Disposal Services Agreement

Exhibit J

 

Form of Leased Personnel Agreement

Exhibit K

 

Form of Opinion of Counsel to Buyer, Buyer’s Parent and Guarantor

Exhibit L

 

Buyer Nuclear Decommissioning Trust Provisions

 

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ASSET SALE AGREEMENT

 

This ASSET SALE AGREEMENT, dated as of December 11, 2007 (the “Agreement”), is
by and among EXELON GENERATION COMPANY, LLC, a Pennsylvania limited liability
company (“Seller”), ZIONSOLUTIONS, LLC, a Delaware limited liability company
(“Buyer”), ENERGYSOLUTIONS, LLC, a Utah limited liability company (“Buyer’s
Parent”), and ENERGYSOLUTIONS, INC. a Delaware corporation (“Guarantor”). 
Seller, Buyer, Buyer’s Parent and Guarantor are referred to individually as a
“Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, Seller owns a one hundred percent (100%) undivided interest in the Zion
Energy Center, Units 1 and 2 (“Zion Units”), located in Zion, Illinois, and
certain facilities and other assets associated therewith and ancillary thereto,
and is the holder of NRC Operating License Nos. DPR-39 (for Zion Unit 1) and
DPR-48 (for Zion Unit 2);

 

WHEREAS, Buyer desires to purchase and assume, and Seller desires to sell and
assign, the Zion Assets (as defined below) and certain associated liabilities,
upon the terms and conditions set forth in this Agreement;

 

WHEREAS, upon Closing, Seller and Buyer shall execute a Lease Agreement and a
Put Option Agreement in the form of Exhibit C and Exhibit D, respectively;

 

WHEREAS, upon the execution of this Agreement, Buyer’s Parent has executed and
delivered a Performance Guaranty to provide additional assurances of the payment
and performance, when due, of all obligations of Buyer under this Agreement, the
Lease Agreement, the Put Option Agreement and other specified Ancillary
Agreements, and Guarantor has executed and delivered a Guaranty to provide
additional assurances of the payment and performance, when due, of all
obligations of Buyer under this Agreement, the Lease Agreement, the Put Option
Agreement and other specified Ancillary Agreements and the obligations of
Buyer’s Parent under this Agreement and the Ancillary Agreements to which
Buyer’s Parent is a party;

 

WHEREAS, upon Closing Buyer’s Parent shall execute and deliver to Seller a
Pledge Agreement, in the form of Exhibit E, to secure the obligations of Buyer’s
Parent under the Performance Guaranty;

 

WHEREAS, upon Closing, Buyer’s Parent and Guarantor shall execute and deliver to
Seller a Credit Support Agreement, in the form of Exhibit F, to secure the
obligations of Buyer’s Parent under the Performance Guaranty and the obligations
of Guarantor under the Guaranty;

 

WHEREAS, upon Closing Buyer’s Parent or Guarantor shall procure and deliver to
the Buyer Backup NDT an Irrevocable Letter of Credit, in the form required by
the Credit Support Agreement, and Buyer’s Parent shall execute and deliver to
the Backup NDT the Irrevocable Easement for Disposal Capacity, in the form of
Exhibit G, and the Disposal Services Agreement, in the form of Exhibit H, which,
together with the Irrevocable Letter of Credit will constitute the Disposal
Capacity Asset established to further secure the obligations of Buyer’s Parent
under the Performance Guaranty and the obligations of Guarantor under the
Guaranty.

 

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NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements hereinafter set forth, and intending to be legally
bound hereby, the Parties agree as follows:

 

1.             DEFINITIONS

 

1.1.         DEFINITIONS.

 

As used in this Agreement, the following terms have the meanings specified in
this Section 1.1.

 

(1)           “Affiliate” has the meaning set forth in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act.

 

(2)           “Agreement” means this Asset Sale Agreement together with the
Schedules and Exhibits hereto, as the same may be from time to time amended.

 

(3)           “Ancillary Agreements” means the Assignment and Assumption
Agreement, the Bill of Sale, the Lease Agreement, the Put Option Agreement, the
Guaranty, the Performance Guaranty, the Pledge Agreement, the Credit Support
Agreement, the Irrevocable Letter of Credit, the Irrevocable Easement for
Disposal Capacity, the Disposal Services Agreement, the Decommissioning Planning
Contract, and the Leased Personnel Agreement as the same may be amended from
time to time.

 

(4)           “ANI” means American Nuclear Insurers, or any successors thereto.

 

(5)           “Assignment and Assumption Agreement” means the Assignment and
Assumption Agreement between Seller and Buyer in the form of Exhibit A.

 

(6)           “Association” has the meaning set forth in Section 6.21.9.

 

(7)           “Assumed Liabilities” has the meaning set forth in Section 2.3.

 

(8)           “Atomic Energy Act” means the Atomic Energy Act of 1954, as
amended, 42 U.S.C. Section 2011 et seq.

 

(9)           “Authorized Officer” means the chief financial officer, the chief
accounting officer, or the principal project management officer of Buyer or any
other responsible officer or employee of Buyer reasonably satisfactory to
Seller.

 

(10)         “Bill of Sale” means the Bill of Sale, in the form of Exhibit B.

 

(11)         “Business Books and Records” has the meaning set forth in
Section 2.1.9.

 

(12)         “Business Day” shall mean any day other than Saturday, Sunday and
any day on which banking institutions in the State of Illinois are authorized by
law or other governmental action to close.

 

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(13)         “Buyer” has the meaning set forth in the preamble.

 

(14)         “Buyer Backup NDT” has the meaning set forth in Section 6.12.5.

 

(15)         “Buyer Indemnitee” has the meaning set forth in Section 8.1.2.

 

(16)         “Buyer Letter” means the letter from Buyer to Seller, dated the
date hereof, which refers to this Agreement and is designated therein as the
Buyer Letter and is organized in Schedules corresponding to Sections in
Article 5 of this Agreement.

 

(17)         “Buyer NDF” means the external trust fund, if any, maintained by
Buyer after the Closing with respect to the Facilities for purposes of
Decommissioning which does not meet the requirements of Code Section 468A and
Treas. Reg. § 1.468A-5.

 

(18)         “Buyer Material Adverse Effect” has the meaning set forth in
Section 5.3.1.

 

(19)         “Buyer QDF” means the external trust fund maintained by Buyer after
the Closing with respect to the Facilities for purposes of Decommissioning which
the IRS has determined prior to the Closing Date meets the requirements of Code
Section 468A and Treas. Reg. § 1.468A-5.

 

(20)         “Buyer’s Parent” has the meaning set forth in the preamble.

 

(21)         “Byproduct Material” means any radioactive material (except Special
Nuclear Material) yielded in, or made radioactive by, exposure to the radiation
incident to the process of producing or utilizing Special Nuclear Material.

 

(22)         “Class A Low Level Waste” means Low Level Waste whose physical form
and characteristics meet the minimum requirements set forth in 10 C.F.R. §
61.56(a) but are not Greater Than Class C Waste and not classified as Class B or
Class C Low Level Waste under 10 C.F.R. § 61.55(a)(2).

 

(23)         “Clive, Utah Facility” means the facility operated by Buyer’s
Parent in Clive, Utah, which is licensed to dispose of Class A Low Level Waste.

 

(24)         “Closing” has the meaning set forth in Section 3.1.

 

(25)         “Closing Date” has the meaning set forth in Section 3.1.

 

(26)         “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, and the rules and regulations promulgated thereunder.

 

(27)         “Code” means the Internal Revenue Code of 1986, as amended.

 

(28)         “ComEd” means Commonwealth Edison Company, an Illinois corporation,
and its successors and assigns.

 

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(29)         “Collective Bargaining Agreements” means the Collective Bargaining
Agreement among IBEW Local 15, Seller, ComEd and Exelon Business Services
Company and the Memorandum Regarding the Redeployment Related to the Closing of
Zion Generating Station dated June 2, 1998.

 

(30)         “Commercially Reasonable Efforts” mean efforts which are designed
to enable a Party, directly or indirectly, to expeditiously satisfy a condition
to, or otherwise assist in the consummation of, the transactions contemplated by
this Agreement and which do not require the performing Party to expend any funds
or assume Liabilities other than expenditures and Liability assumptions which
are customary and reasonable in nature and amount in the context of the
transactions contemplated by this Agreement; provided that any and all
requirements imposed by the NRC shall be deemed customary and reasonable.

 

(31)         “Confidentiality Agreements” means the Confidentiality and
Non-Disclosure Agreement, dated March 21, 2006, between Seller and Buyer’s
Parent, and the letter agreement, dated April, 17, 2006, between Exelon Nuclear
and Buyer’s Parent.

 

(32)         “Cost Escalation Factor” as of any date of determination of NDT
Rate of Return means the sum of (i) seventy percent (70%) of the simple average
annual percent change in the Inflation Index over the period of twenty (20)
consecutive calendar quarters ended prior to the date of determination, plus
(ii) thirty percent (30%) of the simple average annual percent change in the
Inflation Forecast over a period of twenty (20) consecutive calendar quarters
beginning with the calendar quarter immediately following the twenty (20)
calendar quarter period referred to in the preceding clause (i).

 

(33)         “Costs to Completion” as of any date of determination means the
aggregate projected costs and expenses, including contingency reserves, to
achieve the Site Restoration Milestones, the Target Completion Date, and End
State Conditions in accordance with the then current Project Schedule, without
giving effect to any further extension of the schedule for such work by reason
of conditions of Force Majeure or Schedule Extension Conditions that have not
yet occurred as of the date of determination.

 

(34)         “Credit Support Agreement” means the credit support agreement among
the Parties in the form of Exhibit F.

 

(35)         “Decommission” and “Decommissioning” mean (i) the dismantlement and
removal of the Facilities and any reduction or removal of radioactivity at the
Zion Station Site to a level that permits the release of all or any specified
portion of the Zion Station Site for unrestricted use, as specified in 10 CFR
20.1402;  (ii) all other activities necessary for the retirement, dismantlement,
decontamination and/or storage of the Facilities to comply with all applicable
Nuclear Laws and Environmental Laws, including the applicable requirements of
the Atomic Energy Act and the NRC’s rules, regulations, orders and
pronouncements thereunder; and (iii) any planning and administrative activities
incidental thereto; provided, however, that compliance with Environmental Laws
shall not be required for any activities described in  (ii) and (iii) relating
to the Switchyard.

 

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(36)         “Decommissioning Planning Contract” means the Decommissioning
Planning Contract, if any, between Seller and Buyer (or an Affiliate of Buyer).

 

(37)         “Deferred Receivables” as of any date of determination means the
aggregate of costs incurred by Buyer to achieve End State Conditions that are
not reimbursed to Buyer from the Buyer QDF or the Buyer NDF by reason of either:
(1) the requirements of clause (b) of Section 6.21.6; or (2) any election of
Buyer to defer or forego reimbursement of such costs.

 

(38)         “Department of Energy” or “DOE” means the United States Department
of Energy and any successor agency thereto.

 

(39)         “Department of Energy Decommissioning and Decontamination Fees”
means all fees related to the Department of Energy’s Special Assessment of
utilities for the Uranium Enrichment Decontamination and Decommissioning Funds
pursuant to Sections 1801, 1802 and 1803 of the Atomic Energy Act and the
Department of Energy’s implementing regulations at 10 C.F.R. Part 766, as those
statutes and regulations exist at the time of execution of this Agreement,
applicable to separative work units purchased from the Department of Energy in
order to decontaminate and decommission the Department of Energy’s gaseous
diffusion enrichment facilities.

 

(40)         “Department of Justice” means the United States Department of
Justice and any successor agency thereto.

 

(41)         “Direct Claim” has the meaning set forth in Section 8.2.4.

 

(42)         “Disposal Capacity Asset” means the Irrevocable Easement for
Disposal Capacity and the Disposal Services Agreement to be executed and
delivered on the Closing Date, which together provide for an assignable and
marketable asset created for the benefit of the Backup NDT through an
irrevocable right to capacity at the Clive, Utah Facility for the disposal of
any or all of the WAC-compliant Class A Low Level Waste situated in the Zion
Station Site as of the occurrence of any Event of Default, at the Clive, Utah
Facility without any payments or other obligation to Buyer, Buyer Parent or
their Affiliates.

 

(43)         “Disposal Services Agreement” means the disposal services agreement
in the form of Exhibit H.

 

(44)         “Easements” means, with respect to the Zion Assets, the easements,
licenses and access rights to be granted by the appropriate party by or pursuant
to the Facilities, Operation and Easement Agreement dated as of January 12,
2001, and recorded in the Office of the Recorder of Deeds, Lake County, Illinois
on January 23, 2001 as Document No. 4635121, and re-recorded on February 20,
2001, as Document No. 4647301, as amended by the Amendment to Easement to be
executed on or before the Closing Date, including, without limitation, easements
authorizing access, use, maintenance, construction, repair, replacement and
other activities by the parties thereto.

 

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(45)         “Encumbrances” mean any mortgages, pledges, liens, security
interests, conditional and installment sale agreements, conservation easements,
deed restrictions, easements, encumbrances and charges of any kind.

 

(46)         “End State Conditions” has the meaning set forth in the Put Option
Agreement.

 

(47)         “End State Date” has the meaning set forth in the Put Option
Agreement.

 

(48)         “Energy Reorganization Act” means the Energy Reorganization Act of
1974, as amended.

 

(49)         “Environment” means all soil, real property, air, water (including
surface waters, streams, ponds, drainage basins and wetlands), groundwater,
water body sediments, drinking water supply, stream sediments or land, including
land surface or subsurface strata, including all fish, plant, wildlife, and
other biota and any other environmental medium or natural resource.

 

(50)         “Environmental Claim” means any and all written communications
alleging potential Liability, administrative or judicial actions, suits, orders,
liens, notices alleging Liability, notices of violation, investigations which
have been disclosed in writing to Seller, complaints, requests for information
relating to the Release or threatened Release into the Environment of Hazardous
Substances, proceedings, or other written communication, whether criminal or
civil, pursuant to or relating to any applicable Environmental Law by any Person
(including any Governmental Authority) based upon, alleging, asserting, or
claiming any actual or potential (i) violation of, or Liability under any
Environmental Law; (ii) violation of any Environmental Permit; or
(iii) Liability for investigatory costs, cleanup costs, removal costs, remedial
costs, response costs, monitoring costs, natural resource damages, property
damage, personal injury, fines, or penalties arising out of, based on, resulting
from, or related to the presence, Release, or threatened Release into the
Environment of any Hazardous Substances at any location related to the Zion
Station Site, including, but not limited to, any off-Zion Station Site location
to which Hazardous Substances, or materials containing Hazardous Substances,
were sent.

 

(51)         “Environmental Clean-up Site” means any location which is listed or
formally proposed for listing on the National Priorities List, the Comprehensive
Environmental Response, Compensation and Liability Information System, or on any
similar state list of sites requiring investigation or cleanup, or which is the
subject of any action, suit, proceeding or investigation which has been
disclosed in writing to Seller for any alleged violation of any Environmental
Law, or at which there has been a Release, or, to the Knowledge of Seller, a
threatened or suspected Release, of a Hazardous Substance.

 

(52)         “Environmental Laws” means all Laws, other than Nuclear Laws, in
effect at any time prior to the earlier of the Put Option Closing or termination
of the NRC Licenses regarding pollution or protection of the Environment, the
conservation and management of land, natural resources and wildlife or human
health and safety or the Occupational Safety and Health Act (only as it relates
to Hazardous Substances), including, without limitation, Laws regarding

 

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Releases or threatened Releases of Hazardous Substances (including, without
limitation, Releases to ambient air, surface water, groundwater, land, surface
and subsurface strata) or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, Release, transport, disposal or handling
of Hazardous Substances.  “Environmental Laws” include, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C.
§§ 9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. §§ 1801
et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §§ 6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.), the
Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. §§ 2601 et seq.), the Oil Pollution Act (33 U.S.C. §§ 2701 et seq.), the
Emergency Planning and Community Right to-Know Act (42 U.S.C. §§ 11001 et seq.),
the Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.) only as it
relates to Hazardous Substances, and all other Laws, other than Nuclear Laws,
analogous to any of the above.

 

(53)         “Environmental Liabilities” means (i) any Liability relating to the
disposal, storage, transportation, discharge, release, recycling, or the
arrangement for such activities of Hazardous Substances from the Zion Station
Site; (ii) the presence of Hazardous Substances in, on or under the Zion Station
Site regardless of how the Hazardous Substances came to rest at, on or under the
Zion Station Site; (iii) the failure of the Zion Station Site to be in
compliance with any Environmental Laws; and (iv) any other act or omission, or
condition existing with respect to the Zion Assets or the Zion Station Site that
gives rise to any Liability under Environmental Laws.

 

(54)         “Environmental Permit” means any federal, state or local permits,
licenses, approvals, consents, registrations or authorizations required by any
Governmental Authority under or in connection with any Environmental Law
including any and all orders, consent orders or binding agreements issued or
entered into by a Governmental Authority under any applicable Environmental Law.

 

(55)         “ERISA” means the Employee Retirement Income Security Act of 1974,
as amended, and the applicable rules and regulations promulgated thereunder.

 

(56)         “ERISA Affiliate” has the meaning set forth in Section 2.4.17.

 

(57)         “Event of Default” has the meaning set forth in the Pledge
Agreement.

 

(58)         “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

 

(59)         “Excluded Assets” has the meaning set forth in Section 2.2.

 

(60)         “Excluded Environmental Liabilities” means (i) all Environmental
Liabilities existing as of the Closing Date and not disclosed to Buyer that are
known to, or should reasonably have been known (without independent
investigation or inquiry) by, the officers and employees of Seller or its
Affiliates listed in Schedule 4.9; (ii) all Environmental Liabilities relating
to the Switchyard, other than liabilities for Decommissioning; and (iii) all
Environmental Liabilities arising after the earlier of the Put Option Closing or
the termination of the NRC Licenses following completion of Decommissioning.

 

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(61)         “Excluded Liabilities” has the meaning set forth in Section 2.4.

 

(62)         “Facilities” means the plant, facilities, equipment, supplies and
improvements which are included in the Zion Assets, including, the Zion Units.

 

(63)         “Federal Trade Commission” means the United States Federal Trade
Commission or any successor agency thereto.

 

(64)         “Force Majeure” has the meaning set forth in the Lease Agreement.

 

(65)         “Good Utility Practices” means any of the practices, methods and
activities generally accepted in the electric utility industry in the United
States of America as good practices applicable to non-operating nuclear
generating facilities of similar design, size and capacity and consistent with
past practice at the Facilities or any of the practices, methods or activities
which, in the exercise of reasonable judgment by a prudent Person that owns or
possesses non-operating nuclear generating facilities in light of the facts
known at the time the decision was made (other than the fact that such Person is
in the process of selling the facility), could have been expected to accomplish
the desired result at a reasonable cost consistent with good business practices,
reliability, safety, expedition and applicable Laws including Nuclear Laws and
Laws relating to the protection of public health and safety.  Good Utility
Practices are not intended to be limited to the optimal practices, methods or
acts to the exclusion of all others, but rather to be practices, methods or acts
generally accepted in the electric utility industry in the United States of
America.

 

(66)         “Governmental Authority” means any federal, state, local,
provincial, foreign, international or other governmental, regulatory or
administrative agency, taxing authority, commission, department, board, or other
governmental subdivision, court, tribunal, arbitrating body or other
governmental authority.

 

(67)         “Greater Than Class C Waste” means all radioactive waste located at
the Zion Station Site that contains radionuclide concentrations exceeding the
values in Table 1 or Table 2 of 10 CFR 61.55, and therefore is currently not
generally acceptable for disposal at existing (near surface) low level
radioactive waste disposal facilities and any such radioactive waste created
during the course of Decommissioning.

 

(68)         “Guaranty” means the guaranty dated the date hereof, pursuant to
which Guarantor has guaranteed the payment and performance of the obligations of
Buyer under this Agreement and specified Ancillary Agreements and the
obligations of Buyer’s Parent under this Agreement and the Ancillary Agreements
to which Buyer’s Parent is a party.

 

(69)         “Guarantor” has the meaning set forth in the preamble.

 

(70)         “Hazardous Substances” means: (i) any petroleum, asbestos,
asbestos-containing material, and urea formaldehyde foam insulation and
transformers or other equipment that contains polychlorinated biphenyls;
(ii) any chemicals, materials or substances defined as or included in the
definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,”

 

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“hazardous constituents,” “restricted hazardous materials,” “extremely hazardous
substances,” “toxic substances,” “contaminants,” “pollutants,” “toxic
pollutants,” “hazardous air pollutants” or words of similar meaning and
regulatory effect under any applicable Environmental Law; and (iii) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any applicable Environmental Law; excluding, however, any Nuclear
Material.

 

(71)         “High Level Waste Repository” means a facility which is designed,
constructed and operated by or on behalf of the Department of Energy for the
storage and disposal of Spent Nuclear Fuel in accordance with the requirements
set forth in the Nuclear Waste Policy Act of 1982, as amended.

 

(72)         “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.

 

(73)         “ICC” means the Illinois Commerce Commission or any successor
agency thereto.

 

(74)         “Income Tax” means any Tax (i) based upon, measured by or
calculated with respect to net income, profits or receipts (including, without
limitation, capital gains Taxes and minimum Taxes); or (ii) based upon, measured
by or calculated with respect to multiple bases (including, without limitation,
corporate franchise Taxes) if one or more of the bases on which such Tax may be
based, measured by or calculated with respect to, is described in clause (i), in
each case together with any interest, penalties or additions to such Tax.

 

(75)         “Indemnifiable Loss” has the meaning set forth in Section 8.1.1.

 

(76)         “Indemnifying Party” has the meaning set forth in Section 8.1.3.

 

(77)         “Indemnitee” means either a Seller Indemnitee or a Buyer
Indemnitee.

 

(78)         “Independent Accounting Firm” has the meaning set forth in
Section 6.9.5.

 

(79)         “Inflation Forecast” for any calendar quarter means the most recent
available forecast of the Consumer Price Index, Services, CUSASNS, for such
calendar quarter, as published by Global Insight Company.  If the basis for such
index is changed, then the Inflation Forecast shall be adjusted in accordance
with the conversion factor published by Global Insight Company.  If such index
is discontinued or revised, the index used for purposes of this Agreement shall
be adjusted or replaced by the Parties in order to obtain substantially the same
result as would be obtained if the Inflation Forecast had not been so
discontinued or revised.

 

(80)         “Inflation Index” for any calendar quarter means the Consumer Price
Index, Services, CUSASNS, for such calendar quarter, as published by Global
Insight Company, as such index may be subsequently amended or adjusted by Global
Insight Company.  If the basis for such index is changed, then the Inflation
Index shall be adjusted in accordance with the conversion factor published by
Global Insight Company.  If such index is discontinued or revised, the index
used for purposes of this Agreement shall be adjusted or replaced by the

 

9

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Parties in order to obtain substantially the same result as would be obtained if
the Inflation Index had not been so discontinued or revised.

 

(81)         “Irrevocable Easement for Disposal Capacity” means the irrevocable
easement for disposal capacity at the Clive, Utah Facility in the form of
Exhibit G.

 

(82)         “Irrevocable Letter of Credit” means the irrevocable letter of
credit in the form attached to the Credit Support Agreement.

 

(83)         “IRS” means the United States Internal Revenue Service or any
successor agency thereto.

 

(84)         “ISFSI Island” has the meaning set forth in the Lease Agreement.

 

(85)         “Knowledge” means (i) with respect to Buyer, the actual knowledge
(based on a reasonable inquiry, except as otherwise provided in Section 5.8) of
appropriate employees of Buyer, Buyer’s Parent or Guarantor or the corporate
officers who are charged with responsibility for the particular function
relating to the specific matter of the inquiry; and (ii) with respect to Seller,
the actual knowledge (based on a reasonable inquiry except as otherwise provided
in the definition of  Excluded Environmental Liabilities, Section 4.9 and
Section 4.19) of the employees and  executive officers of Seller listed in the
Seller Letter who are charged with responsibility for the particular function
relating to the specific matter of the inquiry.

 

(86)         “Law or Laws” means all laws, rules, regulations, codes, statutes,
ordinances, decrees, treaties, and/or administrative orders of any Governmental
Authority including administrative and judicial interpretations thereof and
common law.

 

(87)         “Lease Agreement” means the lease agreement in the form of
Exhibit C.

 

(88)         “Leased Personnel Agreement” means the leased personnel agreement
among Seller, Buyer and Buyer’s Parent in the form of Exhibit J.

 

(89)         “Liability” or “Liabilities” means any liability or obligation
(whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due) other than any liability for Taxes.  Without
limiting the generality of the foregoing, in the case of the NRC License,
“Liabilities” shall include the NRC Commitments.

 

(90)         “Licenses” has the meaning set forth in Section 4.13.1.

 

(91)         “Loss” or “Losses” means any and all damages, fines, fees,
penalties, deficiencies, losses and expenses (including all Remediation costs,
fees of attorneys, accountants and other experts, or other expenses of
litigation or proceedings or of any claim, default or assessment).

 

(92)         “Low Level Waste” means radioactive material that: (i) is neither
Spent Nuclear Fuel as defined herein, nor Byproduct Material; and (ii) the NRC,
consistent with existing law and clause (i) above classifies as low-level
radioactive waste.

 

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(93)         “Major Budget Category” has the meaning set forth in
Section 6.21.1.

 

(94)         “Material Letter of Credit Default” has the meaning set forth in
the Credit Support Agreement.

 

(95)         “NDF” means the external trust fund maintained by Seller with
respect to the Facilities for purposes of Decommissioning which does not meet
the requirements of Code Section 468A and Treas. Reg. § 1.468A-5.

 

(96)         “NDT Rate of Return” as of any date of determination of Projected
NDT Value means the lesser of (a) 5.7%, (b) a rate equal to 2% plus the
applicable Cost Escalation Factor as of the date of determination, in either
case after giving effect to all applicable taxes and administrative expenses and
any disbursement request pending as of the date of determination; provided,
however, that the NDT Rate of Return as of any date of determination after the
first anniversary of the Closing Date shall not exceed the actual compound
annual rate of return earned by the Buyer QDF and Buyer NDF subsequent to the
Closing Date, after giving effect to all applicable taxes and administrative
expenses and any disbursement request pending as of the date of determination.

 

(97)         “NEIL” means Nuclear Electric Insurance Limited, or any successor
thereto.

 

(98)         “New VAR Facility” has the meaning set forth in the Lease
Agreement.

 

(99)         “Non-material Contracts” means those contracts, agreements,
personal property leases or other commitments incidental to the ownership,
possession, use or maintenance of the Zion Assets that have been entered into by
Seller in the ordinary course of business prior to the Closing which either
(i) are terminable, without penalty or any other termination related Liability,
upon notice of ninety (90) days or less by Seller; or (ii) require the payment
or delivery of goods or services with a value of less than One Hundred Thousand
Dollars ($100,000) per annum in the case of any individual contract or
commitment.

 

(100)      “NRC” means the United States Nuclear Regulatory Commission and any
successor agency thereto.

 

(101)      “NRC Commitments” means all written regulatory commitments identified
as such by Seller to the NRC prior to the Closing Date with respect to Zion Unit
1 or Zion Unit 2.

 

(102)      “NRC Licenses” means Operating License Nos. DPR-39 and DPR-48, on the
basis of which Seller is authorized to possess the Facilities and Nuclear
Material prior to the Closing Date, including embedded licenses for possession
of Byproduct Material and Special Nuclear Material, and on the basis of which
Buyer will be authorized to possess the Zion Units and Nuclear Material after
the Closing Date.

 

(103)      “Nuclear Insurance Policies” means all nuclear insurance policies
carried by or for the benefit of Seller with respect to the ownership, operation
or maintenance of the Facilities, including all nuclear liability, property
damage and business interruption policies in

 

11

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respect thereof.  Without limiting the generality of the foregoing, the term
“Nuclear Insurance Policies” includes all policies issued or administered by ANI
or NEIL.

 

(104)      “Nuclear Laws” means all Laws, other than Environmental Laws,
relating to the regulation of nuclear power plants, Source Material, Byproduct
Material and Special Nuclear Materials; the regulation of Low Level Waste and
Spent Nuclear Fuel; the transportation and storage of Nuclear Materials; the
regulation of Safeguards Information; the regulation of Nuclear Fuel; the
enrichment of uranium; the disposal and storage of Spent Nuclear Fuel; contracts
for and payments into the Nuclear Waste Fund; and the antitrust laws and the
Federal Trade Commission Act, as applicable to specified activities or proposed
activities of certain licensees of commercial nuclear reactors.  “Nuclear Laws”
include the Atomic Energy Act of 1954, as amended (42 U.S.C. Section 2011 et
seq.); the Price-Anderson Act (Section 170 of the Atomic Energy Act of 1954, as
amended); the Energy Reorganization Act of 1974 (42 U.S.C. Section 5801 et
seq.); Convention on the Physical Protection of Nuclear Material Implementation
Act of 1982 (Public Law 97 -351; 96 Stat. 1663); the Foreign Assistance Act of
1961 (22 U.S.C. Section 2429 et seq.); the Nuclear Non-Proliferation Act of 1978
(22 U.S.C. Section 3201); the Low-Level Radioactive Waste Policy Act (42 U.S.C.
Section 2021b et seq.); the Nuclear Waste Policy Act (42 U.S.C. Section 10101 et
seq. as amended); the Low-Level Radioactive Waste Policy Amendments Act of 1985
(42 U.S.C. Section 2021d, 471); the Energy Policy Act of 1992 (4 U.S.C.
Section 13201 et seq.); the provisions of 10 CFR Section 73.21, and any state or
local Laws, other than Environmental Laws, analogous to the foregoing.

 

(105)      “Nuclear Material” means Source Material, Byproduct Material, Special
Nuclear Material, Low Level Waste, and Spent Nuclear Fuel.

 

(106)      “Nuclear Waste Fund” means the fund established by Section 302(c) of
the Nuclear Waste Policy Act in which the Spent Nuclear Fuel Fees to be used for
the design, construction and operation of a High Level Waste Repository and
other activities related to the storage and disposal of Spent Nuclear Fuel is
deposited.

 

(107)      “Nuclear Waste Policy Act” means the Nuclear Waste Policy Act of
1982, as amended.

 

(108)      “Original Project Budget” has the meaning set forth in
Section 6.21.1.

 

(109)      “Original Project Schedule” has the meaning set forth in
Section 6.21.1.

 

(110)      “Party” (and the corresponding term “Parties”) has the meaning set
forth in the preamble.

 

(111)      “Performance Guaranty” means the guaranty dated the date hereof,
pursuant to which Buyer’s Parent has guaranteed the payment and performance of
the obligations of Buyer under this Agreement and specified Ancillary
Agreements.

 

(112)      “Permits” has the meaning set forth in Section 4.12.1.

 

(113)      “Permitted Encumbrances” means: (i) the easements to ComEd for the
Switchyard, and if applicable, the New VAR Facility; (ii) the Easements;
(iii) statutory liens for

 

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Taxes(other than income Taxes) or other governmental charges or assessments not
yet due or delinquent or the validity of which are being contested in good faith
by appropriate proceedings; (iv) mechanics’, materialmen’s, carriers’, workers’,
repairers’ and other similar liens arising or incurred in the ordinary course of
business relating to obligations as to which there is no default on the part of
Seller or the validity of which are being contested in good faith, and which do
not, individually or in the aggregate, exceed One Hundred Thousand Dollars
($100,000); (v) zoning, entitlement, conservation restriction and other land use
and environmental regulations imposed by Governmental Authorities; and (vi) such
other liens, imperfections in or failures of title, easements, leases, licenses,
restrictions, activity and use limitations, conservation easements, encumbrances
and encroachments, as do not, individually or in the aggregate, detract from the
value of the Zion Assets in an amount in excess of One Hundred Thousand Dollars
($100,000).

 

(114)      “Person” means any individual, partnership, limited liability
company, joint venture, corporation, trust, unincorporated organization,
association, or Governmental Authority.

 

(115)      “Plans” has the meaning set forth in Section 2.4.17.

 

(116)      “Pledge Agreement” means the pledge agreement made by Buyer’s Parent
in favor of Seller, in the form of Exhibit E.

 

(117)      “Post-Closing Decommissioning Trust Agreement” means the
decommissioning trust agreement between Buyer and the Trustee pursuant to which
any assets of any of the QDF and NDF to be transferred by Seller at Closing
pursuant to Section 6.12 will be held in trust.

 

(118)      “Price-Anderson Act” means Section 170 of the Atomic Energy Act and
related provisions of Section 11 of the Atomic Energy Act.

 

(119)      “Project Budget” shall mean the Original Project Budget or, as
applicable, a subsequent Project Budget established by Buyer (and approved by
Exelon if required) in accordance with Section 6.21.2.

 

(120)      “Project Schedule” shall mean the Original Project Schedule or, as
applicable, the Original Project Schedule as extended by conditions of Force
Majeure or Schedule Extension Conditions in accordance with the Lease Agreement.

 

(121)      “Projected NDT Value” as of any date of determination means the
aggregate funds projected to be available in the Buyer QDF and the Buyer NDF,
assuming the expenditure of funds in accordance with the then current Project
Budget and the then current Project Schedule (without giving effect to any
assets held by the Buyer QDF or Buyer NDF as a result of Deferred Receivables)
and assuming a compound annual rate of return on assets of the Buyer QDF and the
Buyer NDF equal to the NDT Rate of Return.

 

(122)      “Proprietary Information” (i) with respect to information provided by
or on behalf of Seller or its Representatives to Buyer or Buyer’s Parent or
their Representatives (“Seller Proprietary Information”), shall mean all
drawings, reports, data, software, materials or other information relating to
the operation and maintenance or Decommissioning, actual or

 

13

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proposed, of the Zion Assets, any financial, operational or other information
concerning Seller or its Affiliates or their respective assets and properties,
including geologic, geophysical, scientific or other technical information, and
know-how, inventions and trade secrets, whether furnished before or after the
date hereof, whether oral or written or in electronic or digital media, and
regardless of the manner in which it is furnished, including any such
information that may be included or reflected in reports, analysis or other
documents prepared by or on behalf of Buyer or Buyer’s Parent or their
Representatives and any information provided to or obtained by Buyer or Buyer’s
Parent or their Representatives pursuant to Section 6.1 or 6.3; but does not
include information which (a) is or becomes generally available to the public
other than as a result of a disclosure by Buyer or Buyer’s Parent or their
Representatives, (b) was available to Buyer or Buyer’s Parent or their
Representatives on a non-confidential basis prior to its disclosure by Seller or
its Representatives, (c) becomes available to Buyer or Buyer’s Parent or their
Representatives on a non-confidential basis from a Person other than Seller or
its Representatives who is not otherwise bound by a confidentiality agreement
with Seller or its Representatives, or is otherwise not under any obligation to
Seller or its Representatives not to transmit the information to Buyer or
Buyer’s Parent or their Representatives, or (d) was independently developed by
Buyer or Buyer’s Parent or their Representatives without reference to or
reliance upon Proprietary Information obtained from Seller or its
Representatives; and (ii) with respect to information provided by or on behalf
of Buyer or its Representative to Seller or its Representatives (“Buyer
Proprietary Information”), shall mean information relating to the possession and
maintenance, actual or proposed, of the Zion Assets and any financial,
operational or other information concerning Buyer or its Affiliates or their
respective assets and properties, whether provided before or after the date
hereof, whether oral or written, and regardless of the manner in which it is
furnished; but does not include information which (a) is or becomes generally
available to the public other than as a result of a disclosure by Seller or its
Representatives, (b) was available to Seller or its Representatives on a
non-confidential basis prior to its disclosure by Buyer or its Representatives,
(c) becomes available to Seller or its Representatives on a non-confidential
basis from a Person other than Buyer or its Representatives who is not otherwise
bound by a confidentiality agreement with Buyer or its Representatives, or is
otherwise not under any obligation to Buyer or its Representatives not to
transmit the information to Seller or its Representatives, or (d) was
independently developed by Seller or its Representatives without reference to or
reliance upon Proprietary Information obtained from Buyer or Buyer’s Parent or
their Representatives.

 

(123)      “PSDAR for the Zion Station” means the Post-Shutdown Decommissioning
Activities Report (PSDAR) for Zion submitted by Seller to the NRC on
February 14, 2000.

 

(124)      “Purchase Price” has the meaning set forth in Section 3.2.

 

(125)      “Put Option Agreement” means the put option agreement in the form of
Exhibit D.

 

(126)      “Put Option Closing” has the meaning set forth in the Put Option
Agreement.

 

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(127)      “QDF” means the external trust fund maintained by Seller with respect
to the Facilities for purposes of Decommissioning which meet the requirements of
Code Section 468A and Treas. Reg. § 1.468A-5.

 

(128)      “Qualified Institution” means a commercial bank or trust company
incorporated under the laws of the United States or any state thereof, with an
office or branch in the City of New York or the City of Chicago, with aggregate
capital and surplus in excess of $25 Billion, and with senior unsecured debt
rated at least “A” by Standard & Poors Corporation or “A2” by Moody’s Investors
Service.

 

(129)      “Released for Unrestricted Use” has the meaning set forth in the Put
Option Agreement.

 

(130)      “Real Property” has the meaning set forth in Section 2.2.1.

 

(131)      “Real Property Agreements” has the meaning set forth in Section 4.7.

 

(132)      “Release” means any actual or threatened spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing of a Hazardous Substance into the Environment or within any
building, structure, facility or fixture; provided, however, that “Release”
shall not include any release that is permissible under applicable Environmental
Permits.

 

(133)      “Remediation” means action of any kind required by any applicable Law
or order of a Governmental Authority to address a Release, the threat of a
Release or the presence of Hazardous Substances at the Zion Station Site or an
off-Zion Station Site location including, without limitation, any or all of the
following activities to the extent they relate to or arise from the presence of
a Hazardous Substance at the Zion Station Site or an off-Zion Station Site
location: (i) monitoring, investigation, assessment, treatment, cleanup,
containment, removal, mitigation, response or restoration work; (ii) obtaining
any permits, consents, approvals or authorizations of any Governmental Authority
necessary to conduct any such activity; (iii) preparing and implementing any
plans or studies for any such activity; (iv) obtaining a written notice from a
Governmental Authority with jurisdiction over the Zion Station Site or an
off-Zion Station Site location under Environmental Laws that no material
additional work is required by such Governmental Authority; (v) the use,
implementation, application, installation, operation or maintenance of remedial
action on the Zion Station Site or an off-Zion Station Site location, remedial
technologies applied to the surface or subsurface soils, excavation and off-Zion
Station Site treatment or disposal of soils, systems for long term treatment of
surface water or ground water, engineering controls or institutional controls;
and (vi) any other activities required under Environmental Laws to address the
presence or Release of Hazardous Substances at the Zion Station Site or an
off-Zion Station Site location.

 

(134)      “Representatives” of a Party means the Party and its Affiliates and
their directors, officers, employees, agents, partners, advisors (including,
without limitation, accountants, counsel, environmental consultants, financial
advisors and other authorized representatives) and direct and indirect parent
companies and other controlling Persons.

 

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(135)      “Required Regulatory Approvals” are the required regulatory approvals
listed in Schedules 4.3.2 and 5.3.2.

 

(136)      “Safeguards Information” means information that is required to be
protected under the terms of 10 C.F.R. § 73.21.

 

(137)      “SAFSTOR” means a method of decommissioning in which the nuclear
facility is placed and maintained in such condition that the nuclear facility
can be safely stored and subsequently decontaminated to levels that permit
release for unrestricted use.

 

(138)      “Schedule”, when used herein with reference to a Schedule number
corresponding to a particular Section in Article 4 or Article 5 of this
Agreement, means the corresponding Schedule of the Seller Letter or the Buyer
Letter, as the case may be; and otherwise shall mean the referenced Schedule
attached to this Agreement.

 

(139)      “Schedule Extension Conditions” has the meaning set forth in the
Lease Agreement.

 

(140)      “SEC” means the United States Securities and Exchange Commission and
any successor agency thereto.

 

(141)      “Securities Act” means the Securities Act of 1933, as amended.

 

(142)      “Seller” has the meaning set forth in the preamble.

 

(143)      “Seller Indemnitee” has the meaning set forth in Section 8.1.2.

 

(144)      “Seller Letter” means the letter from Seller to Buyer, dated the date
hereof, which refers to this Agreement and is designated therein as the Seller
Letter and is organized in Schedules corresponding to Sections in Article 4 of
this Agreement.

 

(145)      “Seller Material Adverse Effect” means: (i) any change or changes in,
or effect on, the Zion Assets or the Zion Station Site that individually or
cumulatively are or reasonably could be: (a) materially adverse to the value of
the Zion Assets, taken as a whole and considering their intended use by Buyer,
(b) materially impair Buyer’s intended ownership, possession, or use of the Zion
Assets; (c) materially adversely affect the intended lease, occupancy,
possession or use of the Zion Station Site by Buyer as provided in the Lease
Agreement, or (d) materially increase the Assumed Liabilities; or (ii) a
material adverse effect on the ability of Seller to perform its obligations
hereunder or under the Ancillary Agreements.  Notwithstanding the foregoing, a
“Seller Material Adverse Effect” shall not include (i) any change in any Law
generally applicable to similarly situated Persons; (ii) any change in the
application or enforcement of any Law, by any Governmental Authority, with
respect to the Facilities or to similarly situated Persons, unless such change
in application or enforcement prohibits consummation of the transactions
contemplated by this Agreement; or (iii) any changes resulting from or
associated with acts of war or terrorism or changes imposed by a Governmental
Authority associated with additional security to address concerns of terrorism,
arising out of the events of September 11, 2001, or otherwise;
provided, however, that such changes do not affect the Facilities or the Parties
in any manner or degree significantly different from or

 

16

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disproportionate compared to the effects of such changes on the industry as a
whole; and provided, further, that any loss, claim, occurrence, change or effect
that is cured or otherwise eliminated, or the effects of which are no longer
materially adverse,  prior to the Closing Date shall not be considered a Seller
Material Adverse Effect.

 

(146)      “Seller’s Agreements” mean those contracts, agreements, licenses and
leases relating to the ownership, possession and maintenance of the Zion Assets,
as more particularly described on Schedule 4.10.1, as such schedule is
supplemented and amended in accordance with the provisions of this Agreement.

 

(147)      “Seller’s Decommissioning Trust Agreements” means the Amended and
Restated Non-Tax Qualified Nuclear Decommissioning Master Trust Agreement, dated
as of October 29, 2003, effective November 1, 2003, by and between Seller,
Seller’s Affiliates and The Northern Trust Company, as Trustee, and the Amended
and Restated Tax Qualified Nuclear Decommissioning Master Trust Agreement, dated
as of October 29, 2003, effective November 1, 2003, by and between Seller,
Seller’s Affiliates, and The Northern Trust Company, as Trustee.

 

(148)      “Site Restoration Milestones” has the meaning set forth in the Lease
Agreement.

 

(149)      “Source Material” means:  (i) uranium or thorium or any combination
thereof, in any physical or chemical form, or (ii) ores which contain by weight
one-twentieth of one percent (0.05%) or more of (a) uranium, (b) thorium, or
(c) any combination thereof.  Source Material does not include Special Nuclear
Material.

 

(150)      “Special Nuclear Material” means plutonium, uranium-233, uranium
enriched in the isotope-233 or in the isotope-235, and any other material that
the NRC determines to be “Special Nuclear Material,” but does not include Source
Material.  Special Nuclear Material also refers to any material artificially
enriched by any of the above-listed materials or isotopes, but does not include
Source Material.

 

(151)      “Spent Nuclear Fuel” means all fuel located at the Zion Station Site
that has been permanently withdrawn from a nuclear reactor following
irradiation, and has not been chemically separated into its constituent elements
by reprocessing, and all Greater Than Class C Waste located at the Zion Station
Site.

 

(152)      “Spent Nuclear Fuel Fees” means those fees assessed on electricity
generated at Zion and sold pursuant to the Standard Spent Fuel Disposal
Contract, as provided in Section 302 of the Nuclear Waste Policy Act and 10
C.F.R. Part 961.

 

(153)      “Standard Spent Fuel Disposal Contract” means the contract for
Disposal of Spent Nuclear Fuel, No. DE-CR01-83NE44372, dated June 17, 1983,
entered into by ComEd and the United States of America, represented by the
Department of Energy, as assigned to Seller by ComEd on January 31, 2001.

 

(154)      “Substantial Completion” has the meaning set forth in the Put Option
Agreement.

 

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(155)      “Switchyard” has the meaning set forth in the Lease Agreement.

 

(156)      “Synchronous Condensers” has the meaning set forth in the Lease
Agreement.

 

(157)      “Tangible Personal Property” has the meaning set forth in
Section 2.1.5.

 

(158)      “Target Completion Date” has the meaning set forth in the Lease
Agreement.

 

(159)      “Tax” or “Taxes” means, all taxes, charges, fees, levies, penalties
or other assessments imposed by any federal, state, local, provincial or foreign
taxing authority, including income, gross receipts, excise, real or personal
property, sales, transfer, customs, duties, franchise, payroll, withholding,
social security, receipts, license, stamp, occupation, employment, or other
taxes, including any interest, penalties or additions attributable thereto, and
any payments to any state, local, provincial or foreign taxing authorities in
lieu of any such taxes, charges, fees, levies or assessments.

 

(160)      “Tax Return” means any return, report, information return,
declaration, claim for refund or other document (including any schedule or
related or supporting information) required to be supplied to any Governmental
Authority with respect to Taxes including amendments thereto, including any
information return filed by a tax exempt organization and any return filed by a
nuclear decommissioning trust.

 

(161)      “Termination Date” has the meaning set forth in Section 9.1.5.

 

(162)      “Third Party Claim” has the meaning set forth in Section 8.2.1.

 

(163)      “Transferable Permits” means those Permits and Environmental Permits
that are transferable to Buyer without application to, a filing with, notice to,
consent or approval of any Governmental Authority.

 

(164)      “Transferred Employees” means those persons, if any, employed by
Seller or its Affiliates at the Zion Station Site as of the Closing Date who are
offered employment by Buyer and accept such employment by Buyer for any period
on or after the Closing Date.

 

(165)      “Transfer Taxes” means any real property transfer, sales, use, value
added, stamp, documentary, recording, registration, conveyance, stock transfer,
intangible property transfer, personal property transfer, gross receipts,
registration, duty, securities transactions or fees, Taxes or governmental
charges of a similar nature (together with any interest or penalty, addition to
Tax or additional amount imposed) as levied by any Governmental Authority in
connection with the transfer of title to the Zion Assets to Buyer and the
assumption by Buyer of the Assumed Liabilities, including, without limitation,
any payments made in lieu of any such Taxes or governmental charges which become
payable in connection with the transactions contemplated by this Agreement.

 

(166)      “Treasury Regulations” means Treasury Regulations promulgated under
the Code.

 

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(167)      “Trustee” means with respect to Seller prior to the Closing the
trustee of the QDF and the NDF appointed by Seller pursuant to Seller’s
Decommissioning Trust Agreements and after the Closing to the extent any assets
of the QDF and NDF are transferred by Seller pursuant to Section 6.12, the
trustee appointed pursuant to the Post-Closing Decommissioning Trust Agreement.

 

(168)      “WAC” or “Waste Acceptance Criteria” means all applicable technical
requirements that ensure that all environmental, safety, and operational
standards are met before Low Level Waste is accepted for disposal.

 

(169)      “Zion Assets” has the meaning set forth in Section 2.1.

 

(168)      “Zion Employees” means any employee of Seller or its Affiliates,
other than Transferred Employees, employed, or to be employed, at Zion Station
on or after the Closing Date during the course of Buyer’s Decommissioning
activities at the Zion Station Site.

 

(169)      “Zion Station” means Zion Nuclear Power Station, Units 1 and 2,
located in Zion, Illinois and associated assets, in accordance with NRC
Operating Licenses DPR-39 (Zion 1) and DPR-48 (Zion 2).

 

(170)      “Zion Station Site” means the entire site subject to the NRC Licenses
for Zion Station.  Any reference to the Zion Station Site shall include, by
definition, the surface and subsurface elements, including the soils and
groundwater present at the Zion Station Site and any references to items “at the
Zion Station Site” shall include all items “at, in, on, upon, over, across,
under, and within” the Zion Station Site.

 

1.2.         CERTAIN INTERPRETIVE MATTERS.

 

1.2.1.      UNLESS OTHERWISE REQUIRED BY THE CONTEXT IN WHICH ANY TERM APPEARS:

 

(1)           Capitalized terms used in this Agreement shall have the meanings
specified in this Article.

 

(2)           The singular shall include the plural, the plural shall include
the singular, and the masculine shall include the feminine and neuter.

 

(3)           References to “Articles”, “Sections”, “Schedules” or “Exhibits”
shall be to articles, sections, schedules or exhibits of or to this Agreement,
and references to “paragraphs” or “clauses” shall be to separate paragraphs or
clauses of the section or subsection in which the reference occurs.

 

(4)           The words “herein”, “hereof” and “hereunder” shall refer to this
Agreement as a whole and not to any particular section or subsection of this
Agreement; and the words “include,” “includes” or “including” shall mean
“including, but not limited to.”

 

(5)           The term “day” shall mean a calendar day, commencing at 12:01 a.m.
(Central Time).  The term “week” shall mean any seven consecutive day period
commencing on a Sunday, and the term “month” shall mean a calendar month;
provided, however, that when a

 

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period measured in months commences on a date other than the first day of a
month, the period shall run from the date on which it starts to the
corresponding date in the next month and, as appropriate, to succeeding months
thereafter.  Whenever an event is to be performed or a payment is to be made by
a particular date and the date in question falls on a day which is not a
Business Day, the event shall be performed, or the payment shall be made, on the
next succeeding Business Day; provided, however, that all calculations shall be
made regardless of whether any given day is a Business Day and whether or not
any given period ends on a Business Day.

 

(6)           All references to a particular entity shall include such entity’s
permitted successors and permitted assigns unless otherwise specifically
provided herein.

 

(7)           All references herein to any Law or to any contract or other
agreement shall be to such Law, contract or other agreement as amended,
supplemented or modified from time to time unless otherwise specifically
provided herein.

 

1.2.2.      THE TITLES OF THE ARTICLES AND SECTIONS HEREOF AND EXHIBITS AND
SCHEDULES HERETO HAVE BEEN INSERTED AS A MATTER OF CONVENIENCE OF REFERENCE
ONLY, AND SHALL NOT CONTROL OR AFFECT THE MEANING OR CONSTRUCTION OF ANY OF THE
TERMS OR PROVISIONS HEREOF.

 

1.2.3.      THIS AGREEMENT WAS NEGOTIATED AND PREPARED BY ALL PARTIES WITH
ADVICE OF COUNSEL TO THE EXTENT DEEMED NECESSARY BY EACH PARTY; THE PARTIES HAVE
AGREED TO THE WORDING OF THIS AGREEMENT; AND NONE OF THE PROVISIONS HEREOF SHALL
BE CONSTRUED AGAINST ONE PARTY ON THE GROUND THAT SUCH PARTY IS THE AUTHOR OF
THIS AGREEMENT OR ANY PART HEREOF.

 

1.2.4.      THE EXHIBITS HERETO ARE INCORPORATED IN AND ARE INTENDED TO BE A
PART OF THIS AGREEMENT; PROVIDED, HOWEVER, THAT IN THE EVENT OF A CONFLICT
BETWEEN THE TERMS OF ANY EXHIBIT AND THE TERMS OF THIS AGREEMENT, THE TERMS OF
THIS AGREEMENT SHALL TAKE PRECEDENCE PRIOR TO THE CLOSING AND THE TERMS OF THE
EXHIBITS SHALL TAKE PRECEDENCE FROM AND AFTER THE CLOSING.

 

2.             PURCHASE AND SALE

 

2.1.         ZION ASSETS.

 

Upon the terms and subject to the satisfaction of the conditions contained in
this Agreement, at the Closing, pursuant to a Bill of Sale then delivered by
Seller to Buyer, Seller will sell, assign, convey, transfer and deliver to
Buyer, and Buyer will purchase, assume and acquire from Seller, free and clear
of all Encumbrances (except for Permitted Encumbrances), all of Seller’s right,
title and interest in and to the following assets (other than the Excluded
Assets), wherever located (collectively, the “Zion Assets”):

 

2.1.1.      ALL ASSIGNABLE RIGHT, TITLE AND INTEREST OF SELLER TO THE NRC
LICENSES, INCLUDING LICENSES TO POSSESS SPENT NUCLEAR FUEL, BUT EXCLUDING
SELLER’S GENERAL LICENSES TO OWN SPENT NUCLEAR FUEL;

 

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2.1.2.      THE ASSETS COMPRISING THE QDF AND THE NDF (AS PROVIDED IN
SECTION 6.12, INCLUDING ALL PROFITS, DIVIDENDS, INCOME, INTEREST AND EARNINGS
ACCRUED THEREON, TOGETHER WITH ALL RELATED TAX ACCOUNTING AND OTHER RECORDS FOR
SUCH ASSETS, INCLUDING ALL DECOMMISSIONING STUDIES, ANALYSES, COST ESTIMATES AND
ANY INFORMATION RELATING TO THE TAX BASIS OF THE TRANSFERRED ASSETS;

 

2.1.3.      ALL BUILDINGS, FACILITIES AND OTHER IMPROVEMENTS TO THE REAL
PROPERTY INCLUDING THE FACILITIES AND ALL APPURTENANCES THERETO;

 

2.1.4.      THE SYNCHRONOUS CONDENSERS (OR APPROPRIATE PORTIONS THEREOF) IF AND
WHEN SELLER GIVES WRITTEN NOTICE TO BUYER THAT THE SYNCHRONOUS CONDENSERS (OR
PORTIONS THEREOF) HAVE BEEN ABANDONED IN PLACE IN ACCORDANCE WITH SECTION 8.8 OF
THE LEASE AGREEMENT;

 

2.1.5.      ALL OTHER MACHINERY, MOBILE OR OTHERWISE, EQUIPMENT (INCLUDING
COMPUTER HARDWARE AND SOFTWARE AND TRANSFERABLE RIGHTS THERETO AND
COMMUNICATIONS EQUIPMENT), VEHICLES, TOOLS, SPARE PARTS, MATERIALS, WORKS IN
PROGRESS, FIXTURES, FURNITURE AND FURNISHINGS AND OTHER PERSONAL PROPERTY
RELATING TO OR USED IN THE ORDINARY COURSE OF BUSINESS TO OWN, POSSESS AND
MAINTAIN THE FACILITIES, INCLUDING, WITHOUT LIMITATION, ALL EMERGENCY WARNING
PROPERTY AND ASSETS AND THE ITEMS OF PERSONAL PROPERTY OWNED BY SELLER AND
LOCATED AT THE FACILITIES (COLLECTIVELY, “TANGIBLE PERSONAL PROPERTY”);

 

2.1.6.      ALL UNEXPIRED, TRANSFERABLE WARRANTIES AND GUARANTEES FROM THIRD
PARTIES WITH RESPECT TO ANY ITEM OF TANGIBLE PERSONAL PROPERTY;

 

2.1.7.      ALL RIGHTS OF SELLER UNDER THE NON-MATERIAL CONTRACTS AND THE
SELLER’S AGREEMENTS;

 

2.1.8.      ALL TRANSFERABLE PERMITS;

 

2.1.9.      ALL BOOKS, OPERATING RECORDS, LICENSING RECORDS, QUALITY ASSURANCE
RECORDS, PURCHASING RECORDS, AND EQUIPMENT REPAIR, MAINTENANCE OR SERVICE
RECORDS RELATING TO THE DESIGN, CONSTRUCTION, LICENSING, OPERATION OR
DECOMMISSIONING OF THE FACILITIES, OPERATING, SAFETY AND MAINTENANCE MANUALS,
INSPECTION REPORTS, ENVIRONMENTAL ASSESSMENTS, ENGINEERING DESIGN PLANS,
DOCUMENTS, BLUEPRINTS AND AS BUILT PLANS, SPECIFICATIONS, PROCEDURES AND OTHER
SIMILAR ITEMS OF SELLER, WHEREVER LOCATED, RELATING PRIMARILY TO THE FACILITIES
AND THE OTHER ZION ASSETS, WHETHER EXISTING IN HARD COPY OR MAGNETIC OR
ELECTRONIC FORM (SUBJECT TO THE RIGHT OF SELLER TO RETAIN COPIES OF SAME FOR ITS
USE) (COLLECTIVELY, THE “BUSINESS BOOKS AND RECORDS”);

 

2.1.10.    THE INTEREST OF SELLER, IF ANY, IN THE NAME “ZION” AS USED AS A
DESIGNATION ATTACHED TO OR ASSOCIATED WITH THE FACILITIES, OR ANY RELATED OR
SIMILAR TRADE NAMES, TRADEMARKS, SERVICE MARKS, NAMES OR LOGOS, OR ANY PART,
DERIVATIVE OR COMBINATION THEREOF;

 

2.1.11.    ALL NUCLEAR INSURANCE POLICIES WITH ANI RELATING TO THE FACILITIES,
TO THE EXTENT TRANSFERABLE, EXCEPT AS PROVIDED IN SECTION 2.2.7;

 

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2.1.12.    SUBJECT TO BUYER’S WRITTEN COMMITMENT TO SATISFY ITS INDEMNIFICATION
OBLIGATIONS UNDER SECTION 8.1, THE RIGHTS OF SELLER IN AND TO ANY CAUSES OF
ACTION, CLAIMS (INCLUDING, WITHOUT LIMITATION, RIGHTS UNDER INSURANCE POLICIES
TO PROCEEDS, REFUNDS OR DISTRIBUTIONS THEREUNDER PAID AFTER THE CLOSING DATE
WITH RESPECT TO PERIODS AFTER THE CLOSING DATE) AND DEFENSES AGAINST THIRD
PARTIES (INCLUDING INDEMNIFICATION AND CONTRIBUTION) RELATING TO ANY ASSUMED
LIABILITIES; AND

 

2.1.13.    ALL OTHER TANGIBLE ASSETS AND PROPERTIES OF EVERY KIND AND
DESCRIPTION AND WHEREVER LOCATED, OWNED BY SELLER AND RELATED SOLELY TO THE ZION
ASSETS.

 

2.2.         EXCLUDED ASSETS.

 

Notwithstanding anything to the contrary in this Agreement, nothing in this
Agreement shall be construed as conferring on Buyer, Seller is not selling, and
Buyer is not acquiring, any right, title or interest in or to the following
specific assets which are hereby excluded from the sale and the definition of
Zion Assets (the “Excluded Assets”):

 

2.2.1.      THE LAND DESCRIBED IN THE LEASE AGREEMENT AS THE PREMISES (THE “REAL
PROPERTY”);

 

2.2.2.      THE SPENT NUCLEAR FUEL;

 

2.2.3.      THE SWITCHYARD AND ALL FIXTURES, IMPROVEMENTS, EQUIPMENT AND
PERSONAL PROPERTY WITHIN THE SWITCHYARD AND ALL CONTROLS, CABLES AND OTHER
EQUIPMENT AND FIXTURES RELATING TO THE OPERATION OF THE SWITCHYARD BUT NOT
LOCATED WITHIN THE SWITCHYARD;

 

2.2.4.      THE SYNCHRONOUS CONDENSERS; PROVIDED THAT TITLE TO THE SYNCHRONOUS
CONDENSERS (OR APPROPRIATE PORTIONS THEREOF) SHALL PASS TO BUYER AS AND WHEN
SELLER GIVES WRITTEN NOTICE TO BUYER THAT THE SYNCHRONOUS CONDENSERS (OR
PORTIONS THEREOF) HAVE BEEN ABANDONED IN PLACE IN ACCORDANCE WITH SECTION 8.8 OF
THE LEASE AGREEMENT;

 

2.2.5.      THE NEW VAR FACILITY;

 

2.2.6.      CERTIFICATES OF DEPOSIT, SHARES OF STOCK, SECURITIES, BONDS,
DEBENTURES, EVIDENCES OF INDEBTEDNESS, SECURITY DEPOSITS, AND INTERESTS IN JOINT
VENTURES, PARTNERSHIPS, LIMITED LIABILITY COMPANIES AND OTHER ENTITIES RELATING
TO THE FACILITIES OR THE ZION STATION SITE, EXCEPT SUCH ASSETS COMPRISING THE
QDF OR THE NDF;

 

2.2.7.      ALL RIGHTS TO PREMIUM REFUNDS AND DISTRIBUTIONS MADE ON OR AFTER THE
CLOSING DATE WITH RESPECT TO PERIODS ON OR PRIOR TO THE CLOSING DATE UNDER
NUCLEAR INSURANCE POLICIES OF SELLER WITH ANI, INCLUDING ANY RIGHTS TO RECEIVE
PREMIUM REFUNDS, DISTRIBUTIONS AND CONTINUITY CREDITS WITH RESPECT TO PERIODS
PRIOR TO THE CLOSING DATE PURSUANT TO THE ANI NUCLEAR INDUSTRY CREDIT RATING
PLAN;

 

2.2.8.      SELLER’S POLICYHOLDER INTEREST UNDER ITS NEIL POLICIES, INCLUDING
RIGHTS TO ANY PREMIUM REFUNDS OR OTHER DISTRIBUTIONS MADE BEFORE, ON OR AFTER
THE CLOSING DATE;

 

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2.2.9.      ALL CASH, CASH EQUIVALENTS, BANK DEPOSITS, ACCOUNTS AND NOTES
RECEIVABLE (TRADE OR OTHERWISE), AND ANY INCOME, SALES, PAYROLL OR OTHER
RECEIVABLES RELATING TO TAXES, IN EACH CASE WHETHER OR NOT RELATING TO THE ZION
ASSETS, EXCEPT TO THE EXTENT SUCH ASSETS ARE INCLUDED IN THE QDF AND THE NDF
ASSETS TO BE TRANSFERRED, RESPECTIVELY, TO THE BUYER QDF AND THE BUYER NDF (AS
PROVIDED IN SECTION 6.12);

 

2.2.10.    THE RIGHTS OF SELLER AND ITS AFFILIATES TO THE NAMES “EXELON
GENERATION COMPANY” OR “EXELON” OR ANY RELATED OR SIMILAR TRADE NAMES,
TRADEMARKS, SERVICE MARKS, CORPORATE NAMES OR LOGOS, OR ANY PART, DERIVATIVE OR
COMBINATION THEREOF AND ANY REGISTRATIONS THEREOF;

 

2.2.11.    ALL TARIFFS, AGREEMENTS AND ARRANGEMENTS TO WHICH SELLER IS A PARTY
OR HAS AN INTEREST FOR THE PURCHASE OR SALE OF ELECTRIC CAPACITY AND/OR ENERGY
OR FOR THE PURCHASE OR SALE OF TRANSMISSION OR ANCILLARY SERVICES;

 

2.2.12.    THE RIGHTS OF SELLER IN AND TO ANY CAUSES OF ACTION, CLAIMS AND
DEFENSES AGAINST THIRD PARTIES (INCLUDING INDEMNIFICATION AND CONTRIBUTION)
ARISING OUT OF OR RELATING TO (I) ANY REAL PROPERTY OR PERSONAL PROPERTY,
PERMITS, TAXES, REAL PROPERTY AGREEMENTS, SELLER’S AGREEMENTS, OR THE
NON-MATERIAL CONTRACTS, IF ANY, INCLUDING ANY CLAIMS FOR REFUNDS (INCLUDING
REFUNDS OF PREVIOUSLY PAID DEPARTMENT OF ENERGY DECOMMISSIONING AND
DECONTAMINATION FEES), PREPAYMENTS, OFFSETS, RECOUPMENT, INSURANCE PROCEEDS,
INSURANCE PREMIUM REFUNDS, RETROSPECTIVE PREMIUM ADJUSTMENTS, REFUNDS, REBATES,
CONDEMNATION AWARDS, JUDGMENTS AND THE LIKE, WHETHER RECEIVED AS PAYMENT OR
CREDIT AGAINST FUTURE LIABILITIES, RELATING TO THE ZION ASSETS (INCLUDING,
WITHOUT LIMITATION, THE FACILITIES) OR THE ZION STATION SITE) AND TO THE EXTENT
RELATING TO ANY PERIOD (OR PORTION THEREOF) PRIOR TO THE CLOSING DATE; (II) THE
EXCLUDED ASSETS; OR (III) THE EXCLUDED LIABILITIES;

 

2.2.13.    ANY AND ALL OF SELLER’S RIGHTS IN ANY CONTRACT REPRESENTING AN
INTERCOMPANY TRANSACTION BETWEEN SELLER AND AN AFFILIATE OF SELLER, WHETHER OR
NOT SUCH TRANSACTION RELATES TO THE PROVISION OF GOODS AND SERVICES, PAYMENT
ARRANGEMENTS, INTERCOMPANY CHARGES OR BALANCES, OR THE LIKE;

 

2.2.14.    TO THE EXTENT NOT OTHERWISE PROVIDED FOR IN THIS SECTION 2.2, ANY
REFUND OR CREDIT (I) RELATED TO TAXES PAID BY SELLER WITH RESPECT TO PERIODS (OR
PORTIONS THEREOF) THAT END ON OR PRIOR TO THE CLOSING DATE WITH RESPECT TO THE
ZION ASSETS, WHETHER SUCH REFUND IS RECEIVED AS A PAYMENT OR AS A CREDIT AGAINST
FUTURE TAXES; OR (II) ARISING UNDER ANY AGREEMENT WHICH IS PART OF THE ZION
ASSETS AND RELATING TO A PERIOD (OR PORTION THEREOF) ENDING ON OR PRIOR TO THE
CLOSING DATE, BUT ONLY TO THE EXTENT PAID BY SELLER;

 

2.2.15.    ALL BOOKS, OPERATING RECORDS, LICENSING RECORDS, QUALITY ASSURANCE
RECORDS, PURCHASING RECORDS, AND EQUIPMENT REPAIR, MAINTENANCE OR SERVICE
RECORDS RELATING EXCLUSIVELY TO THE DESIGN, CONSTRUCTION, LICENSING OR OPERATION
OF THE FACILITIES, OPERATING, SAFETY AND MAINTENANCE MANUALS, INSPECTION
REPORTS, ENVIRONMENTAL ASSESSMENTS, ENGINEERING DESIGN PLANS, DOCUMENTS,
BLUEPRINTS AND AS BUILT PLANS,

 

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SPECIFICATIONS, PROCEDURES AND OTHER SIMILAR ITEMS OF SELLER, WHEREVER LOCATED,
RELATING PRIMARILY TO THE EXCLUDED ASSETS OR THE EXCLUDED LIABILITIES, WHETHER
EXISTING IN HARD COPY OR MAGNETIC OR ELECTRONIC FORM;

 

2.2.16.    ALL OTHER ASSETS OF SELLER AND ITS AFFILIATES NOT CONSTITUTING AN
INTEREST IN THE ZION ASSETS; AND

 

2.2.17.    THE OTHER ASSETS OF SELLER AND ITS AFFILIATES LISTED ON SCHEDULE
2.2.17.

 

2.3.         ASSUMED LIABILITIES AND OBLIGATIONS.

 

On the Closing Date, Buyer shall deliver to Seller the Assignment and Assumption
Agreement pursuant to which Buyer shall assume and agree to pay, perform and
discharge when due, all of the Liabilities of Seller that relate to the Zion
Assets or are otherwise specified below, other than the Excluded Liabilities
(collectively, “Assumed Liabilities”), including:

 

2.3.1.      ALL LIABILITIES FOR THE DECOMMISSIONING AND ACHIEVEMENT OF THE
END-STATE CONDITIONS OF ZION STATION, INCLUDING ANY OBLIGATIONS UNDER APPLICABLE
LAW;

 

2.3.2.      ALL ENVIRONMENTAL LIABILITIES (OTHER THAN EXCLUDED ENVIRONMENTAL
LIABILITIES);

 

2.3.3.      ALL LIABILITIES ARISING AFTER THE CLOSING DATE WITH RESPECT TO THE
QDF AND NDF, THE BUYER QDF AND THE BUYER NDF, INCLUDING TAX LIABILITIES, AND ANY
LIABILITIES FOR REFUND OBLIGATIONS OF COMED OR SELLER TO COMED RATEPAYERS FOR
EXCESS QDF, NDF, BUYER QDF OR BUYER NDF FUNDS;

 

2.3.4.      ALL LIABILITIES ARISING FROM ANY ACTUAL OR CLAIMED REFUND
OBLIGATIONS OF COMED OR SELLER TO COMED RATEPAYERS ARISING WITH RESPECT TO FUNDS
WITHDRAWN FROM THE QDF, OR THE NDF, FOR COSTS AND EXPENSES INCURRED BY OR PAID
TO BUYER OR BUYER’S PARENT OR THEIR AFFILIATES OR CONTRACTORS, WHETHER SUCH
EXPENSES WERE INCURRED OR PAID BEFORE OR AFTER THE CLOSING DATE (INCLUDING
REFUND OBLIGATIONS ARISING IF SUCH COSTS AND EXPENSES ARE DETERMINED TO NOT HAVE
BEEN PRUDENTLY INCURRED OR OTHERWISE TO BE INAPPROPRIATE);

 

2.3.5.      ALL LIABILITIES ARISING ON OR AFTER THE CLOSING DATE WITH RESPECT TO
THE OWNERSHIP, POSSESSION, USE OR MAINTENANCE OF THE ZION ASSETS OR THE
POSSESSION, USE OR MAINTENANCE OF THE ZION STATION SITE, INCLUDING ALL
DECOMMISSIONING ACTIVITIES RELATING TO THE ZION ASSETS OR THE ZION STATION SITE,
AND ALL LIABILITIES OF SELLER ARISING ON OR AFTER THE CLOSING DATE UNDER THE
SELLER’S AGREEMENTS, THE NON-MATERIAL CONTRACTS, THE REAL PROPERTY AGREEMENTS,
AND THE TRANSFERABLE PERMITS IN ACCORDANCE WITH THE TERMS THEREOF, INCLUDING ALL
LIABILITIES OF SELLER ARISING ON OR AFTER THE CLOSING DATE RELATING TO (I) THE
CONTRACTS, LICENSES, AGREEMENTS AND PERSONAL PROPERTY LEASES ENTERED INTO WITH
RESPECT TO THE ZION ASSETS OR UNDER SELLER’S AGREEMENTS AND THE NON-MATERIAL
CONTRACTS; AND (II) THE CONTRACTS, LICENSES, AGREEMENTS AND PERSONAL PROPERTY
LEASES ENTERED INTO WITH RESPECT TO THE ZION ASSETS AFTER THE DATE HEREOF
CONSISTENT WITH THE TERMS OF THIS AGREEMENT, EXCEPT IN EACH CASE TO THE EXTENT
SUCH LIABILITIES, BUT FOR A BREACH OR DEFAULT BY SELLER OR A RELATED WAIVER OR
EXTENSION, WOULD HAVE BEEN PAID, PERFORMED OR

 

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OTHERWISE DISCHARGED ON OR PRIOR TO THE CLOSING DATE OR TO THE EXTENT THE SAME
ARISE OUT OF ANY SUCH BREACH OR DEFAULT OR OUT OF ANY EVENT WHICH AFTER THE
GIVING OF NOTICE OR THE PASSAGE OF TIME WOULD CONSTITUTE A DEFAULT BY SELLER;

 

2.3.6.      ALL LIABILITIES ASSOCIATED WITH OR ARISING FROM THE ZION ASSETS WITH
RESPECT TO TAXES FOR WHICH BUYER IS LIABLE PURSUANT TO SECTION 3.3 OR 6.9;

 

2.3.7.      WITH RESPECT TO THE ZION ASSETS, ALL LIABILITIES FOR ANY TAXES THAT
MAY BE IMPOSED BY ANY GOVERNMENTAL AUTHORITY ON THE OWNERSHIP, SALE, POSSESSION,
LEASE, OR USE OF THE ZION ASSETS ON OR AFTER THE CLOSING DATE OR THAT RELATE TO
OR ARISE FROM THE ZION ASSETS WITH RESPECT TO TAXABLE PERIODS (OR PORTIONS
THEREOF) BEGINNING ON OR AFTER THE CLOSING DATE (EXCEPT FOR ANY INCOME TAXES
IMPOSED UPON SELLER ARISING FROM THE SALE OF THE ZION ASSETS AND ANY TAXES
IMPOSED UPON SELLER UNDER SECTION 6.9);

 

2.3.8.      ALL OBLIGATIONS OF SELLER ARISING ON OR AFTER THE CLOSING DATE TO
PAY TO ANI ANY ADDITIONAL PREMIUMS DUE TO AUDIT ASSESSMENTS PERFORMED ON OR
AFTER THE CLOSING DATE;

 

2.3.9.      ALL LIABILITIES ARISING UNDER OR RELATING TO NUCLEAR LAWS ARISING
OUT OF THE OWNERSHIP, LEASE, OCCUPANCY, POSSESSION, USE, OR DECOMMISSIONING OF
THE ZION ASSETS OR THE LEASE, OCCUPANCY, POSSESSION, USE, OR DECOMMISSIONING OF
THE ZION STATION SITE ON OR AFTER THE CLOSING DATE, INCLUDING ANY AND ALL
LIABILITIES TO THIRD PARTIES (INCLUDING EMPLOYEES) FOR PERSONAL INJURY, PROPERTY
DAMAGE OR TORT, OR SIMILAR CAUSES OF ACTION ARISING OUT OF THE OWNERSHIP, LEASE,
OCCUPANCY, POSSESSION, USE, OR DECOMMISSIONING OF THE ZION ASSETS OR THE LEASE,
OCCUPANCY, POSSESSION, USE, OR DECOMMISSIONING OF THE ZION STATION SITE ON OR
AFTER THE CLOSING DATE, ANY LIABILITIES ARISING OUT OF OR RESULTING FROM AN
“EXTRAORDINARY NUCLEAR OCCURRENCE,” A “NUCLEAR INCIDENT” OR A “PRECAUTIONARY
EVACUATION” (AS SUCH TERMS ARE DEFINED IN THE ATOMIC ENERGY ACT) AT THE ZION
STATION SITE, OR ANY OTHER LICENSED NUCLEAR REACTOR SITE IN THE UNITED STATES,
OR IN THE COURSE OF THE TRANSPORTATION OF RADIOACTIVE MATERIALS TO OR FROM THE
ZION STATION SITE OR ANY OTHER SITE ON OR AFTER THE CLOSING DATE, AND ANY
LIABILITY FOR ANY DEFERRED PREMIUMS ASSESSED IN CONNECTION WITH SUCH AN
EXTRAORDINARY NUCLEAR OCCURRENCE, A NUCLEAR INCIDENT OR PRECAUTIONARY EVACUATION
UNDER ANY APPLICABLE NRC OR INDUSTRY RETROSPECTIVE RATING PLAN OR INSURANCE
POLICY, INCLUDING ANY MUTUAL INSURANCE POOLS ESTABLISHED IN COMPLIANCE WITH THE
REQUIREMENTS IMPOSED UNDER SECTION 170 OF THE ATOMIC ENERGY ACT, 10 C.F.R.
PART 140;

 

2.3.10.    ANY LIABILITY FOR ANY PRICE-ANDERSON ACT SECONDARY FINANCIAL
PROTECTION RETROSPECTIVE PREMIUM OBLIGATIONS FOR (I) NUCLEAR WORKER LIABILITY
ATTRIBUTABLE TO EMPLOYMENT ON OR AFTER THE CLOSING DATE OR; (II) ANY THIRD-PARTY
LIABILITY ARISING OUT OF ANY NUCLEAR INCIDENT ON OR AFTER THE CLOSING DATE;

 

2.3.11.    ALL LIABILITIES RELATED TO SPENT NUCLEAR FUEL AND THE ISFSI ISLAND
AFTER THE CLOSING DATE AND PRIOR TO THE EARLIER OF (I) THE TRANSFER OFF SITE OF
THE SPENT NUCLEAR FUEL OR (II) THE PUT OPTION CLOSING, BUT NOT INCLUDING ALL
LIABILITIES RELATING TO THE ULTIMATE

 

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DISPOSITION OF SPENT NUCLEAR FUEL IN THE ISFSI ISLAND AND THE DECOMMISSIONING OF
THE ISFSI ISLAND, WHICH IS AN EXCLUDED LIABILITY IN ACCORDANCE WITH
SECTION 2.4.7;

 

2.3.12.    ANY LIABILITIES RESULTING FROM KNOWING AND INTENTIONAL ILLEGAL ACTS
OR WILLFUL MISCONDUCT OF BUYER OR BUYER’S PARENT OR THEIR RESPECTIVE EMPLOYEES,
AGENTS OR CONTRACTORS OCCURRING AFTER THE CLOSING;

 

2.3.13.    EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, ANY LIABILITIES OF
BUYER OR BUYER’S PARENT TO THE EXTENT ARISING FROM THE EXECUTION DELIVERY OR
PERFORMANCE OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY; AND

 

2.3.14.    ALL OTHER LIABILITIES EXPRESSLY ALLOCATED TO OR ASSUMED BY BUYER IN
THIS AGREEMENT OR THE ANCILLARY AGREEMENTS.

 

2.4.         EXCLUDED LIABILITIES.

 

Notwithstanding anything to the contrary in this Agreement, nothing in this
Agreement shall be construed to impose on Buyer, and Buyer shall not assume or
be obligated to pay, perform or otherwise discharge, the following Liabilities
of Seller (the “Excluded Liabilities”), with all of such Excluded Liabilities
remaining as obligations of Seller or an Affiliate of Seller, as applicable:

 

2.4.1.      ALL EXCLUDED ENVIRONMENTAL LIABILITIES;

 

2.4.2.      ALL SPENT NUCLEAR FUEL FEES AND ALL LIABILITIES UNDER THE STANDARD
SPENT FUEL DISPOSAL CONTRACT;

 

2.4.3.      ALL LIABILITIES ASSOCIATED WITH THE SALE OF ELECTRICITY GENERATED AT
THE ZION STATION AND SOLD ON OR PRIOR TO THE CLOSING DATE;

 

2.4.4.      ALL LIABILITIES, EXCEPT FOR THE PERFORMANCE OF DECOMMISSIONING,
RELATED TO THE SWITCHYARD;

 

2.4.5.      ALL LIABILITIES RELATED TO THE NEW VAR FACILITY AFTER COMPLETION OF
ALL REQUIRED DECOMMISSIONING AND OTHER REQUIRED WORK RELATED TO THAT PORTION OF
THE ZION STATION SITE;

 

2.4.6.      ALL LIABILITIES, EXCEPT FOR DECOMMISSIONING AND OTHER REQUIRED WORK,
RELATING TO ANY OTHER MUTUALLY AGREED-UPON IMPROVEMENTS RETAINED BY SELLER;

 

2.4.7.      ALL LIABILITIES RELATED TO SPENT NUCLEAR FUEL AND THE ISFSI ISLAND
AFTER THE EARLIER OF (I) THE TRANSFER OFF SITE OF THE SPENT NUCLEAR FUEL OR
(II) THE PUT OPTION CLOSING, AND ALL LIABILITIES RELATING TO THE ULTIMATE
DISPOSITION OF SPENT NUCLEAR FUEL IN THE ISFSI ISLAND AND THE DECOMMISSIONING OF
THE ISFSI ISLAND;

 

2.4.8.      ALL LIABILITIES, IF ANY, FOR THE REGULATORY, CONTRACTUAL AND
FINANCIAL RESPONSIBILITY FOR TRANSFERRING SPENT NUCLEAR FUEL TO ANOTHER SITE;

 

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2.4.9.      ALL POTENTIAL REFUND OBLIGATIONS OF COMED OR SELLER TO COMED
CUSTOMERS FOR QDF OR NDF FUNDS WITHDRAWN FOR COSTS AND EXPENSES INCURRED BY
SELLER AND/OR ITS AFFILIATES BEFORE THE CLOSING DATE, OTHER THAN FOR COSTS AND
EXPENSES PAID TO BUYER OR BUYER’S PARENT OR THEIR AFFILIATES OR CONTRACTORS
(INCLUDING REFUND OBLIGATIONS ARISING IF SUCH COSTS AND EXPENSES ARE DETERMINED
TO NOT HAVE BEEN PRUDENTLY INCURRED OR OTHERWISE TO BE INAPPROPRIATE);

 

2.4.10.    ALL LIABILITIES RELATING TO THE ZION ASSETS OR THE ZION STATION SITE
ARISING AFTER THE EARLIER OF THE PUT OPTION CLOSING OR THE TERMINATION OF THE
NRC LICENSES AFTER COMPLETION OF DECOMMISSIONING, OTHER THAN LIABILITIES
ATTRIBUTABLE TO ANY ACT OR OMISSION BY BUYER OR BUYER’S PARENT OR THEIR
AFFILIATES OR THEIR RESPECTIVE ITS CONTRACTORS IN THE PERFORMANCE OF WORK
REQUIRED TO ACHIEVE END-STATE CONDITIONS;

 

2.4.11.    ANY LIABILITIES IN RESPECT OF ANY EXCLUDED ASSETS OR OTHER ASSETS OF
SELLER WHICH ARE NOT ZION ASSETS;

 

2.4.12.    ANY LIABILITIES FOR TAXES ATTRIBUTABLE TO THE OWNERSHIP, SALE,
POSSESSION, OPERATION, MAINTENANCE OR USE OF THE ZION ASSETS OR THE ZION STATION
SITE (INCLUDING ANY WITHHOLDING TAXES IMPOSED ON SELLER WITH RESPECT TO THE
TRANSFERRED EMPLOYEES) FOR TAXABLE PERIODS, OR PORTIONS THEREOF, ENDING BEFORE
THE CLOSING DATE, AND INCOME TAXES IMPOSED ON SELLER ARISING FROM THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, EXCEPT FOR TAXES FOR WHICH BUYER IS
LIABLE PURSUANT TO SECTION 3.3 OR 6.9 AND TAXES FOR WHICH BUYER IS RESPONSIBLE
UNDER THE LEASE AGREEMENT;

 

2.4.13.    ANY LIABILITIES ARISING UNDER OR ATTRIBUTED TO PERFORMANCE, OR
FAILURE OF PERFORMANCE, BY SELLER UNDER ANY OF SELLER’S AGREEMENTS, REAL
PROPERTY AGREEMENTS, TRANSFERABLE PERMITS OR ANY OF THE NON-MATERIAL CONTRACTS
PRIOR TO THE CLOSING DATE;

 

2.4.14.    ANY LIABILITIES FOR ANY MONETARY FINES OR PENALTIES IMPOSED BY A
GOVERNMENTAL AUTHORITY WITH RESPECT TO THE ZION ASSETS TO THE EXTENT ATTRIBUTED
TO THE PERIOD PRIOR TO THE CLOSING DATE;

 

2.4.15.    ANY LIABILITIES RESULTING FROM ANY KNOWING AND INTENTIONAL ILLEGAL
ACTS OR WILLFUL MISCONDUCT OF SELLER OR ITS EMPLOYEES, AGENTS OR CONTRACTORS
OCCURRING PRIOR TO THE CLOSING DATE;

 

2.4.16.    ANY LIABILITIES ARISING PRIOR TO THE CLOSING DATE RELATING TO
SELLER’S OPERATIONS ON, OR USAGE OF, THE EASEMENTS, INCLUDING LIABILITIES
ARISING AS A RESULT OF OR IN CONNECTION WITH LOSS OF LIFE, INJURY TO PERSONS OR
PROPERTY OR DAMAGE TO NATURAL RESOURCES, OTHER THAN ENVIRONMENTAL LIABILITIES
INCLUDED IN THE ASSUMED LIABILITIES;

 

2.4.17.    ANY LIABILITIES RELATING TO ANY EMPLOYEE BENEFIT PLAN AS DEFINED IN
SECTION 3(3) OF ERISA, OR ANY OTHER PLAN, PROGRAM, ARRANGEMENT OR POLICY
ESTABLISHED OR MAINTAINED IN WHOLE OR IN PART BY SELLER OR BY ANY TRADE OR
BUSINESS (WHETHER OR NOT INCORPORATED) WHICH IS OR EVER HAS BEEN UNDER COMMON
CONTROL, OR WHICH IS OR

 

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EVER HAS BEEN TREATED AS A SINGLE EMPLOYER, WITH SELLER UNDER SECTION 414(B),
(C), (M) OR (O) OF THE CODE (“ERISA AFFILIATE”) OR TO WHICH SELLER; OR ANY ERISA
AFFILIATE CONTRIBUTES OR CONTRIBUTED, INCLUDING ANY MULTIEMPLOYER PLAN
CONTRIBUTED TO BY SELLER, OR ANY ERISA AFFILIATE OR TO WHICH SELLER, OR ANY
ERISA AFFILIATE IS OR WAS OBLIGATED TO CONTRIBUTE (THE “PLANS”), INCLUDING ANY
SUCH LIABILITY OF SELLER (I) FOR THE TERMINATION OR DISCONTINUANCE OF, OR
SELLER’S, OR AN ERISA AFFILIATE’S WITHDRAWAL FROM, ANY SUCH PLAN, (II) RELATING
TO BENEFITS PAYABLE UNDER ANY PLANS, (III) RELATING TO THE PBGC UNDER TITLE IV
OF ERISA, (IV) RELATING TO A MULTI-EMPLOYER PLAN, (V) WITH RESPECT TO
NONCOMPLIANCE WITH THE NOTICE REQUIREMENTS OF COBRA, (VI) WITH RESPECT TO ANY
NONCOMPLIANCE WITH ERISA OR ANY OTHER APPLICABLE LAWS, AND (VII) WITH RESPECT TO
ANY SUIT, PROCEEDING OR CLAIM WHICH IS BROUGHT AGAINST BUYER, ANY PLAN OR ANY
FIDUCIARY OR FORMER FIDUCIARY OF, ANY OF THE PLANS;

 

2.4.18.    ANY LIABILITIES RELATING TO THE FAILURE TO HIRE, THE EMPLOYMENT OR
SERVICES OR TERMINATION OF EMPLOYMENT OR SERVICES OF ANY INDIVIDUAL, INCLUDING
WAGES, COMPENSATION, BENEFITS, AFFIRMATIVE ACTION, PERSONAL INJURY,
DISCRIMINATION, HARASSMENT, RETALIATION, WRONGFUL DISCHARGE, UNFAIR LABOR
PRACTICES, OR CONSTRUCTIVE TERMINATION OF ANY INDIVIDUAL, OR ANY SIMILAR OR
RELATED CLAIM OR CAUSE OF ACTION ATTRIBUTABLE TO ANY ACTIONS OR INACTIONS PRIOR
TO THE CLOSING DATE WITH RESPECT TO THE ZION ASSETS, THE TRANSFERRED EMPLOYEES,
THE ZION EMPLOYEES, INDEPENDENT CONTRACTORS, APPLICANTS, AND ANY OTHER
INDIVIDUALS WHO ARE DETERMINED BY A COURT OR BY A GOVERNMENTAL AUTHORITY TO HAVE
BEEN APPLICANTS OR EMPLOYEES OF SELLER OR ANY AFFILIATE OF SELLER, OR THAT ARE
FILED WITH OR PENDING BEFORE ANY COURT, ADMINISTRATIVE AGENCY OR ARBITRATOR
PRIOR TO THE CLOSING DATE;

 

2.4.19.    EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, ANY LIABILITIES OF
SELLER TO THE EXTENT ARISING FROM THE EXECUTION, DELIVERY OR PERFORMANCE OF THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY;

 

2.4.20.    EXCEPT AS OTHERWISE PROVIDED HEREIN, ANY TAXES INCURRED BY THE NDF OR
THE QDF FOR TAXABLE PERIODS, OR PORTIONS THEREOF, ENDING ON OR PRIOR TO THE
CLOSING DATE;

 

2.4.21.    ALL LIABILITIES ARISING AS A RESULT OF OR IN CONNECTION WITH THE
DISPOSAL, STORAGE OR TRANSPORTATION OF NUCLEAR MATERIALS OFF-SITE PRIOR TO THE
CLOSING DATE IN CONNECTION WITH THE OWNERSHIP OR POSSESSION OF THE FACILITIES;

 

2.4.22.    ALL LIABILITIES FOR DEPARTMENT OF ENERGY DECOMMISSIONING AND
DECONTAMINATION FEES RELATING TO THE FACILITIES AND THE ZION STATION SITE
ARISING AND INCURRED ON, BEFORE OR AFTER THE CLOSING DATE, INCLUDING THE
LIABILITIES DESCRIBED IN SECTION 6.14;

 

2.4.23.    ANY LIABILITY FOR A THIRD PARTY CLAIM AGAINST OR RELATING TO SELLER,
THE ZION ASSETS OR THE ZION STATION SITE FOR PERSONAL INJURY, DEATH OR PROPERTY
DAMAGE (EXCEPT FOR PERSONAL INJURY, DEATH OR PROPERTY DAMAGE RELATING TO
LIABILITIES ARISING BY REASON OF ACTS OR OMISSIONS IN CONNECTION WITH WORK
PERFORMED UNDER THE DECOMMISSIONING PLANNING CONTRACT) SUFFERED BY SUCH THIRD
PARTY ARISING FROM OR

 

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RELATING TO THE USE, OWNERSHIP OR LEASE OF THE ZION ASSETS OR THE ZION STATION
SITE PRIOR TO THE CLOSING DATE;

 

2.4.24.    ALL OTHER LIABILITIES EXPRESSLY ALLOCATED TO OR RETAINED BY SELLER IN
THIS AGREEMENT; OR THE ANCILLARY AGREEMENTS; AND

 

2.4.25.    ALL OTHER LIABILITIES RELATING TO THE ZION ASSETS, THE FACILITIES OR
THE ZION STATION SITE, EXCEPT TO THE EXTENT THAT SUCH LIABILITIES CONSTITUTE
ASSUMED LIABILITIES.

 

2.5.         CONTROL OF LITIGATION.

 

2.5.1.      SUBJECT TO THE PROVISIONS OF ARTICLE 8, SELLER SHALL PAY FOR AND BE
ENTITLED EXCLUSIVELY TO CONTROL, DEFEND AND SETTLE ANY LITIGATION,
ADMINISTRATIVE OR REGULATORY PROCEEDING, AND ANY INVESTIGATION OR OTHER SIMILAR
ACTIVITIES ARISING OUT OF OR RELATED TO ANY EXCLUDED ASSETS OR EXCLUDED
LIABILITIES AND BUYER AGREES TO REASONABLY COOPERATE, AT SELLER’S EXPENSE, WITH
SELLER IN CONNECTION THEREWITH.

 

2.5.2.      SUBJECT TO THE PROVISIONS OF ARTICLE 8, BUYER SHALL PAY FOR AND BE
ENTITLED EXCLUSIVELY TO CONTROL, DEFEND AND SETTLE ANY LITIGATION,
ADMINISTRATIVE OR REGULATORY PROCEEDING, AND ANY INVESTIGATION OR OTHER SIMILAR
ACTIVITIES ARISING OUT OF OR RELATED TO ANY ZION ASSETS OR ASSUMED LIABILITIES,
AND SELLER AGREES TO REASONABLY COOPERATE, AT BUYER’S EXPENSE, WITH BUYER IN
CONNECTION THEREWITH.

 

3.             THE CLOSING

 

3.1.         CLOSING.

 

Upon the terms and subject to the satisfaction of the conditions contained in
Article 6, the sale, assignment, conveyance, transfer and delivery of the Zion
Assets to Buyer, the payment of the Purchase Price to Seller, and the
consummation of the other respective obligations of the Parties contemplated by
this Agreement shall take place at a closing (the “Closing”), to be held at the
offices of Seller in Warrenville, Illinois, at 10:00 a.m. local time, or another
mutually acceptable time and location, on the date that is five (5) Business
Days following the date on which the last of the conditions precedent to Closing
set forth in Article 7 have been either satisfied or waived by the Party for
whose benefit such conditions precedent exist (except with respect to those
conditions which by their terms are to be satisfied at Closing), but in any
event not after the Termination Date, unless the Parties mutually agree on
another date.  The date of Closing is herein called the “Closing Date.”  The
Closing shall be effective for all purposes as of 12:01 a.m. on the Closing
Date.

 

3.2.         PAYMENT OF PURCHASE PRICE.

 

Upon the terms and subject to the satisfaction of the conditions contained in
this Agreement, in consideration of the aforesaid sale, assignment, conveyance,
transfer and delivery of the Zion Assets, Buyer will, in consideration for the
Zion Assets, assume and agree to pay, perform and discharge as and when due, the
Assumed Liabilities (the “Purchase Price”).

 

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3.3.         PRORATIONS.

 

3.3.1.      BUYER AND SELLER AGREE THAT ALL OF THE ITEMS NORMALLY PRORATED,
INCLUDING THOSE LISTED BELOW (BUT NOT INCLUDING INCOME TAXES AND TRANSFER
TAXES), RELATING TO THE OWNERSHIP, USE OR POSSESSION OF THE ZION ASSETS SHALL BE
PRORATED AS OF THE CLOSING DATE, WITH SELLER LIABLE TO THE EXTENT SUCH ITEMS
RELATE TO ANY TIME PERIOD PRIOR TO THE CLOSING DATE, AND BUYER LIABLE TO THE
EXTENT SUCH ITEMS RELATE TO PERIODS COMMENCING WITH THE CLOSING DATE (MEASURED
IN THE SAME UNITS USED TO COMPUTE THE ITEM IN QUESTION, OTHERWISE MEASURED BY
CALENDAR DAYS):

 

3.3.1.1    TAXES, ASSESSMENTS AND OTHER CHARGES, IF ANY, RELATING TO THE
OWNERSHIP, USE OR POSSESSION OF THE ZION ASSETS, EXCEPT AS OTHERWISE PROVIDED IN
THE LEASE AGREEMENT;

 

3.3.1.2    ANY PREPAID EXPENSES (EXCLUDING SECURITY DEPOSITS) RELATING TO THE
ZION ASSETS;

 

3.3.1.3    RENT, TAXES AND ALL OTHER ITEMS (INCLUDING PREPAID SERVICES) PAYABLE
BY OR TO SELLER UNDER ANY OF SELLER’S AGREEMENTS OR THE NON-MATERIAL CONTRACTS;

 

3.3.1.4    ANY PERMIT, LICENSE, REGISTRATION, COMPLIANCE ASSURANCE FEES OR OTHER
FEES WITH RESPECT TO ANY TRANSFERABLE PERMIT;

 

3.3.1.5    SEWER RENTS AND CHARGES FOR WATER, TELEPHONE, ELECTRICITY AND OTHER
UTILITIES;

 

3.3.1.6    FEES OR CHARGES (OTHER THAN TAXES) IMPOSED BY ANY GOVERNMENTAL
AUTHORITY;

 

3.3.1.7    INSURANCE PREMIUMS WITH RESPECT TO THE NUCLEAR INSURANCE POLICIES
WITH ANI TRANSFERRED TO BUYER PURSUANT TO SECTION 2.1.8; AND

 

3.3.1.8    RENT AND TAXES AND OTHER ITEMS PAYABLE BY SELLER UNDER THE REAL
PROPERTY AGREEMENTS ASSIGNED TO BUYER.

 

3.3.2.      NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, (I) INTEREST
OR PENALTIES RELATING TO A TAX ALLOCATED PURSUANT TO THIS SECTION 3.3 SHALL BE
ALLOCATED (I) TO SELLER (WHETHER SUCH INTEREST OR PENALTIES ACCRUE OR ARE
IMPOSED OR ASSESSED ON, BEFORE OR AFTER THE CLOSING DATE) TO THE EXTENT THEY
RESULT FROM A FAILURE BY SELLER TO PAY A TAX OR FAILURE BY SELLER TO FILE A TAX
RETURN, IN EACH CASE, THAT WAS DUE ON OR BEFORE THE CLOSING DATE AND (II) TO
BUYER (WHETHER SUCH INTEREST OR PENALTIES ACCRUE OR ARE IMPOSED OR ASSESSED ON,
BEFORE OR AFTER THE CLOSING DATE) TO THE EXTENT THEY RESULT FROM A FAILURE BY
BUYER TO PAY A TAX OR FAILURE BY BUYER TO FILE A TAX RETURN, IN EACH CASE THAT
WAS DUE AFTER THE CLOSING DATE.

 

3.3.3.      IN CONNECTION WITH THE PRORATIONS REFERRED TO IN SECTION 3.3.1.1, IN
THE EVENT THAT ACTUAL FIGURES ARE NOT AVAILABLE AT THE CLOSING DATE, THE
PRORATION SHALL BE BASED UPON THE ACTUAL TAXES OR OTHER AMOUNTS ACCRUED THROUGH
THE CLOSING DATE OR PAID FOR THE MOST RECENT YEAR (OR OTHER APPROPRIATE PERIOD)
FOR WHICH ACTUAL TAXES OR

 

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OTHER AMOUNTS PAID ARE AVAILABLE.  SUCH PRORATED TAXES OR OTHER AMOUNTS SHALL BE
RE-PRORATED AND PAID TO THE APPROPRIATE PARTY WITHIN SIXTY (60) DAYS AFTER THE
DATE THAT THE PREVIOUSLY UNAVAILABLE ACTUAL FIGURES BECOME AVAILABLE. 
PRORATIONS MEASURED BY CALENDAR DAYS SHALL BE BASED ON THE NUMBER OF DAYS IN A
YEAR OR OTHER APPROPRIATE PERIOD (I) BEFORE THE CLOSING DATE AND (II) INCLUDING
AND AFTER THE CLOSING DATE.  SELLER AND BUYER AGREE TO FURNISH EACH OTHER WITH
SUCH DOCUMENTS AND OTHER RECORDS AS MAY BE REASONABLY REQUESTED IN ORDER TO
CONFIRM ALL ADJUSTMENT AND PRORATION CALCULATIONS MADE PURSUANT TO THIS
SECTION 3.3.

 

3.3.4.      TO THE EXTENT THAT THE PRORATION OF A TAX UNDER THIS SECTION 3.3
ALLOCATES SUCH TAX TO A PERIOD (OR PORTION THEREOF) ENDING BEFORE THE CLOSING
DATE, SUCH TAX SHALL CONSTITUTE AN EXCLUDED LIABILITY.  TO THE EXTENT THAT THE
PRORATION OF A TAX UNDER THIS SECTION 3.3 ALLOCATES SUCH TAX TO A PERIOD (OR
PORTION THEREOF) ENDING ON OR AFTER THE CLOSING DATE, SUCH TAX SHALL CONSTITUTE
AN ASSUMED LIABILITY.

 

3.4.         DELIVERIES BY SELLER.

 

At the Closing (or, in the case of those items contemplated by Section 3.4.10,
on or before the Closing Date), Seller will deliver, or cause to be delivered,
the following to Buyer:

 

3.4.1.      THE BILL OF SALE, DULY EXECUTED BY SELLER;

 

3.4.2.      COPIES OF ANY AND ALL GOVERNMENTAL AND OTHER THIRD PARTY CONSENTS,
WAIVERS OR APPROVALS OBTAINED BY SELLER WITH RESPECT TO THE TRANSFER OF THE ZION
ASSETS, OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT;

 

3.4.3.      ALL OTHER ANCILLARY AGREEMENTS DULY EXECUTED BY SELLER, AS
APPLICABLE;

 

3.4.4.      THE ASSETS OF THE QDF AND THE NDF TO BE TRANSFERRED PURSUANT TO
SECTION 6.12;

 

3.4.5.      COPIES, CERTIFIED BY THE SECRETARY OR ANY ASSISTANT SECRETARY OF
SELLER, OF CORPORATE RESOLUTIONS AUTHORIZING THE EXECUTION AND DELIVERY OF THIS
AGREEMENT AND ALL OF THE AGREEMENTS AND INSTRUMENTS TO BE EXECUTED AND DELIVERED
BY SELLER IN CONNECTION HEREWITH, AND THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY;

 

3.4.6.      A CERTIFICATE OF THE SECRETARY OR ANY ASSISTANT SECRETARY OF SELLER
IDENTIFYING THE NAME AND TITLE AND BEARING THE SIGNATURES OF THE OFFICERS OF
SELLER AUTHORIZED TO EXECUTE AND DELIVER THIS AGREEMENT AND THE OTHER AGREEMENTS
AND INSTRUMENTS CONTEMPLATED HEREBY;

 

3.4.7.      A CERTIFICATE OF GOOD STANDING WITH RESPECT TO SELLER, ISSUED BY THE
SECRETARY OF STATE OF THE COMMONWEALTH OF PENNSYLVANIA;

 

3.4.8.      TO THE EXTENT AVAILABLE, ORIGINALS OF THE SELLER’S AGREEMENTS,
NON-MATERIAL CONTRACTS, AND TRANSFERABLE PERMITS AND, IF NOT AVAILABLE, TRUE AND
CORRECT COPIES THEREOF, IN ALL CASES TOGETHER WITH NOTICES TO AND, IF REQUIRED
BY THE TERMS THEREOF AND SUBJECT TO THE TERMS OF THIS AGREEMENT, CONSENTS BY
OTHER PERSONS WHICH ARE

 

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PARTIES TO THE SELLER’S AGREEMENTS, NON-MATERIAL CONTRACTS, AND TRANSFERABLE
PERMITS;

 

3.4.9.      ALL SUCH OTHER INSTRUMENTS OF ASSIGNMENT, TRANSFER OR CONVEYANCE AS
SHALL, IN THE REASONABLE OPINION OF BUYER AND ITS COUNSEL, BE NECESSARY OR
DESIRABLE TO IMPLEMENT THE TRANSFER OF THE ZION ASSETS TO BUYER, IN ACCORDANCE
WITH THIS AGREEMENT AND WHERE NECESSARY OR DESIRABLE IN RECORDABLE FORM;

 

3.4.10.    SUCH OTHER AGREEMENTS, CONSENTS, DOCUMENTS, INSTRUMENTS AND WRITINGS
AS ARE REQUIRED TO BE DELIVERED BY SELLER AT OR PRIOR TO THE CLOSING DATE
PURSUANT TO THIS AGREEMENT OR THE ANCILLARY AGREEMENTS OR OTHERWISE REASONABLY
REQUIRED IN CONNECTION HEREWITH;

 

3.4.11.    A SCHEDULE SETTING FORTH THE SPENT NUCLEAR FUEL AT THE FACILITIES AS
OF THE CLOSING DATE;

 

3.4.12.    A SCHEDULE SETTING FORTH THE LOW LEVEL WASTE EXISTING AT THE
FACILITIES AS OF THE CLOSING DATE; AND

 

3.4.13.    A SCHEDULE SETTING FORTH THE MAJOR EQUIPMENT COMPONENTS AND PERSONAL
PROPERTY INCLUDED IN THE ZION ASSETS.

 

3.5.         DELIVERIES BY BUYER, BUYER’S PARENT AND GUARANTOR.

 

At the Closing, Buyer, Buyer’s Parent and Guarantor, as applicable, will
deliver, or cause to be delivered, the following to Seller:

 

3.5.1.      THE PURCHASE PRICE;

 

3.5.2.      ALL ANCILLARY AGREEMENTS, DULY EXECUTED AND DELIVERED, AS
APPLICABLE, BY BUYER AND/OR BUYER’S PARENT OR THIRD PARTIES, AS APPLICABLE;

 

3.5.3.      COPIES, CERTIFIED BY THE SECRETARY OR ANY ASSISTANT SECRETARY OF
BUYER, BUYER’S PARENT AND GUARANTOR, AS APPLICABLE, OF RESOLUTIONS AUTHORIZING
THE EXECUTION AND DELIVERY OF THIS AGREEMENT, AND ALL OF THE AGREEMENTS AND
INSTRUMENTS TO BE EXECUTED AND DELIVERED BY BUYER, BUYER’S PARENT AND GUARANTOR
IN CONNECTION HEREWITH, AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
HEREBY;

 

3.5.4.      A CERTIFICATE OF THE SECRETARY OR ANY ASSISTANT SECRETARY OF BUYER,
BUYER’S PARENT AND GUARANTOR, AS APPLICABLE, IDENTIFYING THE NAME AND TITLE AND
BEARING THE SIGNATURES OF THE OFFICERS OF BUYER, BUYER’S PARENT AND GUARANTOR
AUTHORIZED TO EXECUTE AND DELIVER THIS AGREEMENT, AND THE OTHER AGREEMENTS
CONTEMPLATED HEREBY;

 

3.5.5.      A CERTIFICATE OF GOOD STANDING WITH RESPECT TO EACH OF BUYER AND
GUARANTOR, ISSUED BY THE SECRETARY OF STATE OF THE STATE OF DELAWARE AND A
CERTIFICATE OF GOOD STANDING WITH RESPECT TO BUYER’S PARENT, ISSUED BY THE
SECRETARY OF STATE OF THE STATE OF UTAH;

 

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3.5.6.      A CERTIFICATE OF AUTHORITY OF BUYER TO DO BUSINESS IN ILLINOIS,
ISSUED BY THE SECRETARY OF STATE OF ILLINOIS;

 

3.5.7.      ALL SUCH OTHER INSTRUMENTS OF ASSUMPTION AS SHALL, IN THE REASONABLE
OPINION OF SELLER AND ITS COUNSEL, BE NECESSARY FOR BUYER TO ASSUME THE ASSUMED
LIABILITIES IN ACCORDANCE WITH THIS AGREEMENT;

 

3.5.8.      COPIES OF ANY AND ALL GOVERNMENTAL AND OTHER THIRD PARTY CONSENTS,
WAIVERS OR APPROVALS OBTAINED BY BUYER AND BUYER’S PARENT WITH RESPECT TO THE
TRANSFER OF THE ZION ASSETS, OR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT AND THE ANCILLARY AGREEMENTS;

 

3.5.9.      A COPY OF THE POST-CLOSING DECOMMISSIONING TRUST AGREEMENT;

 

3.5.10.    A LEGAL OPINION FROM PARSONS BEHLE & LATIMER, ADDRESSED TO SELLER TO
THE EFFECT SET FORTH IN EXHIBIT K AND OTHERWISE IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO SELLER; AND

 

3.5.11.    SUCH OTHER AGREEMENTS, DOCUMENTS, INSTRUMENTS AND WRITINGS AS ARE
REQUIRED TO BE DELIVERED BY BUYER AT OR PRIOR TO THE CLOSING DATE PURSUANT TO
THIS AGREEMENT, OR OTHERWISE REASONABLY REQUIRED IN CONNECTION HEREWITH.

 

4.             REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller hereby represents and warrants to Buyer as follows:

 

4.1.         ORGANIZATION.

 

Seller is a limited liability company duly organized, validly existing and in
good standing under the laws of the Commonwealth of Pennsylvania and has all
requisite corporate power and authority to own, lease, and operate its
properties and to carry on its business as is now being conducted.  Copies of
the Certificate of Formation and Operating Agreement of Seller, each as amended
to date, have heretofore been made available to Buyer.

 

4.2.         AUTHORITY RELATIVE TO THIS AGREEMENT.

 

Seller has full corporate power and authority to execute and deliver this
Agreement and the Ancillary Agreements and to consummate the transactions
contemplated hereby and thereby.  The execution and delivery of this Agreement
and the Ancillary Agreements and the consummation of the transactions
contemplated hereby and thereby will have been duly and validly authorized by
all necessary corporate action required on the part of Seller and no other
corporate proceedings on the part of Seller are necessary to authorize this
Agreement or the Ancillary Agreements or to consummate the transactions
contemplated hereby and thereby.  This Agreement has been duly and validly
executed and delivered by Seller and at Closing, the Ancillary Agreements will
be duly and validly executed and delivered by Seller, and assuming that this
Agreement and the applicable Ancillary Agreements constitute valid and binding
agreements of Buyer and/or Buyer’s Parent, as applicable, and subject to the
receipt of Seller’s

 

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Required Regulatory Approvals, this Agreement and the Ancillary Agreements
constitute the legal, valid and binding agreement of Seller, enforceable against
Seller in accordance with their respective terms.

 

4.3.         CONSENTS AND APPROVALS; NO VIOLATION.

 

4.3.1.      SUBJECT TO THE RECEIPT OF THE THIRD-PARTY CONSENTS SET FORTH IN
SCHEDULE 4.3.1 AND THE REQUIRED REGULATORY APPROVALS, NEITHER THE EXECUTION AND
DELIVERY OF THIS AGREEMENT OR THE ANCILLARY AGREEMENTS BY SELLER NOR THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY WILL
(I) CONFLICT WITH OR RESULT IN THE BREACH OR VIOLATION OF ANY PROVISION OF THE
CERTIFICATE OF FORMATION AND OPERATING AGREEMENT OF SELLER; (II) RESULT IN A
DEFAULT (OR GIVE RISE TO ANY RIGHT OF TERMINATION, CANCELLATION OR ACCELERATION)
UNDER ANY OF THE TERMS, CONDITIONS OR PROVISIONS OF ANY NOTE, BOND, MORTGAGE,
INDENTURE, LICENSE, AGREEMENT OR OTHER INSTRUMENT OR OBLIGATION TO WHICH SELLER
IS A PARTY OR BY WHICH SELLER, OR ANY OF THE ZION ASSETS, MAY BE BOUND, EXCEPT
FOR SUCH DEFAULTS (OR RIGHTS OF TERMINATION, CANCELLATION OR ACCELERATION) AS TO
WHICH REQUISITE WAIVERS OR CONSENTS HAVE BEEN OBTAINED OR WHICH WOULD NOT,
INDIVIDUALLY OR IN THE AGGREGATE, CREATE A MATERIAL ADVERSE EFFECT; OR
(III) VIOLATE ANY LAWS APPLICABLE TO SELLER, OR ANY OF ITS ASSETS, WHICH
VIOLATION, INDIVIDUALLY OR IN THE AGGREGATE, WOULD CREATE A SELLER MATERIAL
ADVERSE EFFECT.

 

4.3.2.      EXCEPT AS SET FORTH IN SCHEDULE 4.3.2, NO DECLARATION, FILING OR
REGISTRATION WITH, OR NOTICE TO, OR AUTHORIZATION, CONSENT OR APPROVAL OF ANY
GOVERNMENTAL AUTHORITY IS NECESSARY FOR THE EXECUTION AND DELIVERY OF THIS
AGREEMENT OR THE ANCILLARY AGREEMENTS OR THE CONSUMMATION BY SELLER OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ANCILLARY AGREEMENTS OTHER
THAN (I) SUCH DECLARATIONS, FILINGS, REGISTRATIONS, NOTICES, AUTHORIZATIONS,
CONSENTS OR APPROVALS WHICH, IF NOT OBTAINED OR MADE, WILL NOT, INDIVIDUALLY OR
IN THE AGGREGATE, CREATE A SELLER MATERIAL ADVERSE EFFECT, OR (II) SUCH
DECLARATIONS, FILINGS, REGISTRATIONS, NOTICES, AUTHORIZATIONS, CONSENTS OR
APPROVALS WHICH BECOME APPLICABLE TO SELLER AS A RESULT OF THE SPECIFIC
REGULATORY STATUS OF BUYER (OR ANY OF ITS AFFILIATES) OR THE RESULT OF ANY OTHER
FACTS THAT SPECIFICALLY RELATE TO THE BUSINESS OR ACTIVITIES IN WHICH BUYER (OR
ANY OF ITS AFFILIATES) IS OR PROPOSES TO BE ENGAGED.

 

4.4.         REPORTS.

 

Since January 1, 2005 Seller has filed or caused to be filed with the applicable
state or local utility commissions or regulatory bodies, the NRC, and the
Department of Energy, as the case may be, all material forms, statements,
reports and documents (including all exhibits, amendments and supplements
thereto) required to be filed by Seller with respect to the Zion Assets or the
ownership or operation thereof under each of the applicable state public utility
laws, the Atomic Energy Act, the Energy Reorganization Act, and the
Price-Anderson Act and the respective rules and regulations thereunder, except
for such filings the failure of which to make would not, individually or in the
aggregate, reasonably be expected to have a Seller Material Adverse Effect.  All
such filings complied in all material respects with all applicable

 

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requirements of the appropriate act and the rules and regulations thereunder in
effect on the date each such report was filed.

 

4.5.         ABSENCE OF SELLER MATERIAL ADVERSE EFFECT.

 

Since January 1, 2005, except as set forth in Schedule 4.5, there has not been
any Seller Material Adverse Effect.

 

4.6.         TITLE AND RELATED MATTERS.

 

EXCEPT AS SET FORTH IN SCHEDULE 4.6:

 

4.6.1.      SELLER HOLDS AN UNDIVIDED ONE HUNDRED PERCENT (100%) INTEREST IN
TITLE TO THE REAL PROPERTY.

 

4.6.2.      SELLER HOLDS AN UNDIVIDED INTEREST IN THE ZION ASSETS FREE AND CLEAR
OF ALL ENCUMBRANCES, EXCEPT PERMITTED ENCUMBRANCES.

 

4.6.3.      THERE ARE NO PENDING OR, TO SELLER’S KNOWLEDGE, THREATENED
GOVERNMENTAL PROCEEDINGS IN EMINENT DOMAIN WHICH WOULD MATERIALLY AFFECT THE
REAL PROPERTY, THE REAL PROPERTY AGREEMENTS OR ANY IMPROVEMENTS; TO SELLER’S
KNOWLEDGE, THE REAL PROPERTY AND ANY IMPROVEMENTS COMPLY IN ALL MATERIAL
RESPECTS WITH APPLICABLE LAW, OTHER THAN ENVIRONMENTAL LAWS AND NUCLEAR LAWS FOR
WHICH SELLER’S ONLY REPRESENTATIONS AND WARRANTIES ARE SET FORTH IN SECTIONS 4.9
AND 4.13, RESPECTIVELY; AND TO SELLER’S KNOWLEDGE, THERE ARE NO SPECIAL
ASSESSMENTS OR ENCUMBRANCES IMPOSED BY GOVERNMENTAL AUTHORITIES OR VIOLATIONS
THAT COULD BE REASONABLY BE EXPECTED TO RESULT IN ANY MATERIAL CHARGE BEING
LEVIED OR ASSESSED OR IN THE CREATION OF ANY MATERIAL ENCUMBRANCE.

 

4.6.4.      SELLER HAS NOT RECEIVED WRITTEN NOTICE OF, AND SELLER DOES NOT HAVE
ANY KNOWLEDGE THAT THERE IS ANY DEFECT OR CONDITION OF THE SOIL OR LAND,
INCLUDING ANY WETLANDS BUT EXCLUDING ENVIRONMENTAL LIABILITIES AND LIABILITIES
UNDER NUCLEAR LAWS, WHICH COULD REASONABLY BE EXPECTED TO MATERIALLY IMPAIR
BUYER’S QUIET ENJOYMENT OF THE REAL PROPERTY FOR ITS INTENDED USE AND BUYER’S
ABILITY TO PERFORM ITS OBLIGATIONS UNDER THE LEASE AGREEMENT.

 

4.7.         REAL PROPERTY AGREEMENTS.

 

Schedule 4.7 lists, as of the date of this Agreement, all real property leases,
mortgages, deeds of trust, easements, licenses and other rights in real property
including all material amendments thereto (exclusive of non-current term
extensions) (collectively, the “Real Property Agreements”) which affect all or
any part of any Real Property and are material to Buyer’s possession or
occupancy of, or Buyer’s intended use of, the Real Property.  Except as set
forth in Schedule 4.7, all such Real Property Agreements are valid, binding and
enforceable in accordance with their terms, and are in full force and effect;
there are no existing defaults by Seller that, individually or in the aggregate,
would reasonably be expected to have a Seller Material Adverse Effect, and, to
the Knowledge of Seller, no event has occurred which (whether

 

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with or without notice, lapse of time or both) would constitute a default by
Seller that would reasonably be expected to have a Seller Material Adverse
Effect.

 

4.8.         INSURANCE.

 

Except as set forth in Schedule 4.8, all material policies of property damage,
fire, liability, Nuclear Insurance Policies, worker’s compensation and other
forms of insurance relating to the Zion Assets are in full force and effect, all
premiums with respect thereto covering all periods up to and including the date
of this Agreement have been paid (other than retroactive premiums which may be
payable with respect to ANI or NEIL policies), and no written notice of
cancellation, non-renewal or termination has been received with respect to any
such policy which was not replaced on substantially similar terms prior to the
date of such cancellation.  Except as described in Schedule 4.8, as of the date
of this Agreement, to the Knowledge of Seller, no insurance with respect to the
Zion Assets has been refused nor has its coverage been limited by any insurance
carrier to which it has applied for any such insurance or with which it has
carried insurance during the past three (3) years, and all required notices have
been sent to insurers to preserve all material claims under the aforementioned
insurance policies.

 

4.9.         ENVIRONMENTAL MATTERS.

 

With respect to the Zion Station Site, the Zion Assets and the ownership or
operation thereof, except as disclosed in Schedule 4.9:

 

4.9.1.      TO THE KNOWLEDGE OF SELLER (WITH SUCH KNOWLEDGE LIMITED, FOR THE
PURPOSE OF THIS SECTION 4.9.1, TO THE OFFICERS AND EMPLOYEES OF SELLER AND ITS
AFFILIATES LISTED ON SCHEDULE 4.9, BUT WITHOUT INDEPENDENT INVESTIGATION OR
INQUIRY BY OR ON BEHALF OF SELLER OR ANY SUCH OFFICER OR EMPLOYEE) THERE ARE NO
ENVIRONMENTAL LIABILITIES;

 

4.9.2.      SELLER HAS OBTAINED AND HOLDS ALL MATERIAL ENVIRONMENTAL PERMITS
USED IN OR NECESSARY FOR THE OWNERSHIP AND POSSESSION OF THE ZION STATION SITE
AND THE ZION ASSETS AS CONDUCTED AS OF THE DATE HEREOF, WHICH ARE LISTED ON
SCHEDULE 4.9, AND EACH SUCH ENVIRONMENTAL PERMIT IS IN FULL FORCE AND EFFECT, TO
THE KNOWLEDGE OF SELLER (WITH SUCH KNOWLEDGE LIMITED, FOR THE PURPOSE OF THIS
SECTION 4.9.2, TO THE OFFICERS AND EMPLOYEES OF SELLER AND ITS AFFILIATES LISTED
ON SCHEDULE 4.9, BUT WITHOUT INDEPENDENT INVESTIGATION OR INQUIRY BY OR ON
BEHALF OF SELLER OR ANY SUCH OFFICER OR EMPLOYEE) SELLER IS IN MATERIAL
COMPLIANCE WITH ALL OF ITS OBLIGATIONS THEREUNDER, THERE ARE NO PROCEEDINGS
PENDING, OR TO THE KNOWLEDGE OF SELLER, THREATENED THAT WOULD REASONABLY BE
EXPECTED TO RESULT IN THE REVOCATION, TERMINATION, MODIFICATION OR AMENDMENT OF
ANY SUCH ENVIRONMENTAL PERMIT, AND SELLER HAS NOT FAILED TO MAKE IN A TIMELY
FASHION ANY APPLICATION OR OTHER FILING REQUIRED FOR THE RENEWAL OF ANY SUCH
ENVIRONMENTAL PERMIT WHICH FAILURE WOULD REASONABLY BE EXPECTED TO RESULT IN
SUCH ENVIRONMENTAL PERMIT’S TERMINATION OR BEING REVOKED, TERMINATED, SUSPENDED
OR ADVERSELY MODIFIED;

 

4.9.3.      TO THE KNOWLEDGE OF SELLER (WITH SUCH KNOWLEDGE LIMITED, FOR THE
PURPOSE OF THIS SECTION 4.9.3, TO THE OFFICERS AND EMPLOYEES OF SELLER AND ITS
AFFILIATES LISTED ON SCHEDULE 4.9, BUT WITHOUT INDEPENDENT INVESTIGATION OR
INQUIRY BY OR ON BEHALF

 

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OF SELLER OR ANY SUCH OFFICER OR EMPLOYEE) THE ZION STATION SITE AND THE ZION
ASSETS ARE IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH ALL TERMS, CONDITIONS AND
PROVISIONS OF, AND HAVE NOT RECEIVED ANY WRITTEN NOTICE FROM ANY GOVERNMENTAL
AUTHORITY THAT THEY ARE NOT OR HAVE NOT BEEN IN COMPLIANCE (EXCEPT FOR ANY SUCH
NON-COMPLIANCE THAT HAS BEEN CURED) WITH (I) ALL APPLICABLE ENVIRONMENTAL LAWS
AND (II) ALL ENVIRONMENTAL PERMITS;

 

4.9.4.      THERE ARE NO ENVIRONMENTAL CLAIMS PENDING OR, TO THE KNOWLEDGE OF
SELLER, THREATENED AGAINST SELLER, WITH RESPECT TO THE ZION STATION SITE OR THE
ZION ASSETS, AND SELLER DOES NOT HAVE KNOWLEDGE (WITH SUCH KNOWLEDGE LIMITED,
FOR THE PURPOSE OF THIS SECTION 4.9.4, TO THE OFFICERS AND EMPLOYEES OF SELLER
AND ITS AFFILIATES LISTED ON SCHEDULE 4.9, BUT WITHOUT INDEPENDENT INVESTIGATION
OR INQUIRY BY OR ON BEHALF OF SELLER OR ANY SUCH OFFICER OR EMPLOYEE) OF ANY
FACTS OR CIRCUMSTANCES WHICH ARE REASONABLY LIKELY TO FORM THE BASIS FOR ANY
MATERIAL ENVIRONMENTAL CLAIM AGAINST SELLER WITH RESPECT TO THE ZION ASSETS OR
THE ZION STATION SITE;

 

4.9.5.      TO THE KNOWLEDGE OF SELLER (WITH SUCH KNOWLEDGE LIMITED, FOR THE
PURPOSE OF THIS SECTION 4.9.5, TO THE OFFICERS AND EMPLOYEES OF SELLER AND ITS
AFFILIATES LISTED ON SCHEDULE 4.9, BUT WITHOUT INDEPENDENT INVESTIGATION OR
INQUIRY BY OR ON BEHALF OF SELLER OR ANY SUCH OFFICER OR EMPLOYEE), NO RELEASES
OF HAZARDOUS SUBSTANCES HAVE OCCURRED AT, THE ZION STATION SITE OR FROM, ON, OR
UNDER THE ZION ASSETS, AND NO HAZARDOUS SUBSTANCES ARE PRESENT ON OR MIGRATING
FROM THE ZION STATION SITE OR THE ZION ASSETS, THAT ARE REASONABLY LIKELY TO
GIVE RISE TO A ENVIRONMENTAL CLAIM AGAINST SELLER OR REQUIRE ANY REMEDIATION;

 

4.9.6.      NEITHER THE ZION STATION SITE NOR ANY PORTION THEREOF IS AN
ENVIRONMENTAL CLEAN-UP SITE AND, TO THE KNOWLEDGE OF SELLER (WITH SUCH KNOWLEDGE
LIMITED, FOR THE PURPOSE OF THIS SECTION 4.9.6, TO THE OFFICERS AND EMPLOYEES OF
SELLER AND ITS AFFILIATES LISTED ON SCHEDULE 4.9, BUT WITHOUT INDEPENDENT
INVESTIGATION OR INQUIRY BY OR ON BEHALF OF SELLER OR ANY SUCH OFFICER OR
EMPLOYEE), THERE HAS BEEN NO TRANSPORTATION OR ARRANGEMENT FOR TRANSPORTATION,
TREATMENT, STORAGE, HANDLING, OR DISPOSAL OF ANY HAZARDOUS SUBSTANCES OR NUCLEAR
MATERIAL FROM THE ZION STATION SITE TO ANY LOCATION WHICH IS AN ENVIRONMENTAL
CLEAN-UP SITE;

 

4.9.7.      TO THE KNOWLEDGE OF SELLER (WITH SUCH KNOWLEDGE LIMITED, FOR THE
PURPOSE OF THIS SECTION 4.9.7, TO THE OFFICERS AND EMPLOYEES OF SELLER AND ITS
AFFILIATES LISTED ON SCHEDULE 4.9, BUT WITHOUT INDEPENDENT INVESTIGATION OR
INQUIRY BY OR ON BEHALF OF SELLER OR ANY SUCH OFFICER OR EMPLOYEE), THERE ARE NO
(I) UNDERGROUND STORAGE TANKS, ACTIVE OR ABANDONED; OR
(II) POLYCHLORINATED-BIPHENYL-CONTAINING EQUIPMENT LOCATED AT THE ZION STATION
SITE;

 

4.9.8.      TO THE KNOWLEDGE OF SELLER (WITH SUCH KNOWLEDGE LIMITED, FOR THE
PURPOSE OF THIS SECTION 4.9.8, TO THE OFFICERS AND EMPLOYEES OF SELLER AND ITS
AFFILIATES LISTED ON SCHEDULE 4.9, BUT WITHOUT INDEPENDENT INVESTIGATION OR
INQUIRY BY OR ON BEHALF OF SELLER OR ANY SUCH OFFICER OR EMPLOYEE), THERE ARE NO
MATERIAL ENCUMBRANCES, OTHER THAN PERMITTED ENCUMBRANCES, ARISING UNDER OR
PURSUANT TO AN

 

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ENVIRONMENTAL LAW WITH RESPECT TO THE ZION STATION SITE OR THE ZION ASSETS AND,
TO THE KNOWLEDGE OF SELLER, THERE ARE NO FACTS, CIRCUMSTANCES, OR CONDITIONS
THAT ARE REASONABLY LIKELY TO MATERIALLY RESTRICT, ENCUMBER OR RESULT IN THE
IMPOSITION OF SPECIAL CONDITIONS UNDER ANY ENVIRONMENTAL LAW WITH RESPECT TO THE
OWNERSHIP, OCCUPANCY, DEVELOPMENT, USE, DECOMMISSIONING, OR TRANSFERABILITY, OF
THE ZION STATION SITE OR THE ZION ASSETS, EXCEPT THOSE FACTS, CIRCUMSTANCES OR
CONDITIONS RELATING TO THE STATUS OF THE ZION STATION SITE AND THE ZION ASSETS
AS A NUCLEAR FACILITY;

 

4.9.9.      SINCE JANUARY 1, 2002, THERE HAVE BEEN NO ENVIRONMENTAL AUDITS OR
ASSESSMENTS WITH RESPECT TO THE ZION STATION SITE OR THE ZION ASSETS BY, ON
BEHALF OF, OR WHICH ARE IN THE POSSESSION OF SELLER WHICH HAVE NOT BEEN MADE
AVAILABLE TO BUYER OR BUYER’S PARENT PRIOR TO THE DATE HEREOF; AND

 

4.9.10.    SINCE JANUARY 1, 2002, THERE HAVE BEEN NO CLAIMS BY SELLER AGAINST
COMPREHENSIVE GENERAL LIABILITY OR EXCESS INSURANCE CARRIERS FOR ANY LOSS
RESULTING FROM, RELATING TO OR ARISING FROM ENVIRONMENTAL CLAIMS WITH RESPECT TO
THE ZION STATION SITE OR THE ZION ASSETS.

 

4.10.       CERTAIN CONTRACTS AND ARRANGEMENTS.

 

4.10.1.    SELLER IS NOT, AS OF THE DATE OF THIS AGREEMENT, A PARTY TO ANY
WRITTEN CONTRACT, AGREEMENT, PERSONAL PROPERTY LEASE, COMMITMENT, UNDERSTANDING
OR INSTRUMENT WHICH IS MATERIAL TO THE OWNERSHIP, PRESENT USE, OR POSSESSION OF
THE ZION ASSETS OR THE PRESENT USE, OR POSSESSION OF THE ZION STATION SITE
EXCEPT FOR (I) THOSE PURCHASE ORDERS, CONTRACTS, AGREEMENTS, LICENSES AND LEASES
RELATING TO THE OWNERSHIP, PRESENT USE AND MAINTENANCE OF THE ZION ASSETS OR THE
ZION STATION SITE, WHICH ARE LISTED IN SCHEDULE 4.10.1 (THE “SELLER’S
AGREEMENTS”) OR THE OTHER SCHEDULES TO THIS AGREEMENT OR THAT ARE MADE AVAILABLE
TO BUYER; (II) CONTRACTS, AGREEMENTS, PERSONAL PROPERTY LEASES, COMMITMENTS,
UNDERSTANDINGS OR INSTRUMENTS IN WHICH ALL OBLIGATIONS OF SELLER WILL BE FULLY
PERFORMED OR TERMINATED PRIOR TO THE CLOSING DATE; (III) NON-MATERIAL CONTRACTS;
AND (IV) THE ANCILLARY AGREEMENTS.

 

4.10.2.    THERE IS NOT, UNDER ANY OF THE AGREEMENTS LISTED ON SCHEDULE 4.10.1,
ANY BREACH, VIOLATION, DEFAULT OR EVENT WHICH, WITH NOTICE OR LAPSE OF TIME OR
BOTH, WOULD CONSTITUTE A DEFAULT ON THE PART OF SELLER, OR TO THE KNOWLEDGE OF
SELLER, ON THE PART OF ANY OF THE PARTIES THERETO, EXCEPT FOR ANY SUCH BREACH OR
DEFAULT THAT, INDIVIDUALLY OR IN THE AGGREGATE WOULD NOT REASONABLY BE EXPECTED
TO HAVE A SELLER MATERIAL ADVERSE EFFECT.

 

4.11.       LEGAL PROCEEDINGS.

 

As of the date hereof, there are no claims, actions, proceedings or
investigations pending or, to the Knowledge of Seller, threatened against or
relating to Seller before any court, arbitrator, mediator or Governmental
Authority which, individually or in the aggregate, would reasonably be expected
to (i) result in a Seller Material Adverse Effect; (ii) prohibit or restrain

 

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the performance by Seller of this Agreement or any of the Ancillary Agreements
or the consummation of the transactions contemplated hereby or thereby; or
(iii) result in a material claim against Buyer for damages as a result of Seller
entering into this Agreement or any of the Ancillary Agreements, or of the
consummation of the transactions contemplated hereby or thereby.  Seller is not
subject to any outstanding judgment, rule, order, writ, injunction or decree of
any court, arbitrator or Governmental Authority which, individually or in the
aggregate, would reasonably be expected to have a Seller Material Adverse
Effect.

 

4.12.       PERMITS.

 

4.12.1.    SELLER HAS ALL MATERIAL PERMITS, LICENSES, REGISTRATIONS,
CERTIFICATES, FRANCHISES AND OTHER GOVERNMENTAL AUTHORIZATIONS, CONSENTS AND
APPROVALS, OTHER THAN WITH RESPECT TO PERMITS UNDER ENVIRONMENTAL LAWS REFERRED
TO IN SECTION 4.9.2 OR LICENSES ISSUED BY THE NRC REFERRED TO IN SECTION 4.13
(COLLECTIVELY, “PERMITS”), USED IN, OR NECESSARY FOR THE OWNERSHIP, USE, OR
POSSESSION OF, THE ZION ASSETS AS PRESENTLY CONDUCTED OR AS REQUIRED BY LAW.   
SELLER HAS NOT RECEIVED ANY WRITTEN NOTIFICATION WHICH REMAINS UNRESOLVED THAT
IT IS IN VIOLATION OF ANY OF SUCH PERMITS, OR ANY LAW APPLICABLE TO THE ZION
ASSETS.  SELLER IS IN COMPLIANCE WITH ALL PERMITS AND LAWS OF ANY GOVERNMENTAL
AUTHORITY APPLICABLE TO THE ZION ASSETS, EXCEPTING ANY SUCH FAILURE IN
COMPLIANCE THAT WOULD NOT REASONABLY BE EXPECTED TO HAVE A SELLER MATERIAL
ADVERSE EFFECT.

 

4.12.2.    SCHEDULE 4.12.2 SETS FORTH ALL MATERIAL PERMITS, OTHER THAN
TRANSFERABLE PERMITS APPLICABLE TO THE ZION ASSETS.

 

4.13.       NRC LICENSES.

 

4.13.1.    SELLER HAS ALL LICENSES, PERMITS, AND OTHER CONSENTS AND APPROVALS
APPLICABLE TO ZION STATION THAT ARE ISSUED BY THE NRC (COLLECTIVELY, “LICENSES”)
AND ARE NECESSARY TO THE OWNERSHIP AND POSSESSION OF THE ZION ASSETS AS
PRESENTLY CONDUCTED, PURSUANT TO THE REQUIREMENTS OF ALL NUCLEAR LAWS AND ALL
SUCH LICENSES ARE IN FULL FORCE AND EFFECT.  SELLER HAS NOT RECEIVED ANY WRITTEN
NOTIFICATION WHICH REMAINS UNRESOLVED THAT IT IS IN VIOLATION OF ANY OF SUCH
LICENSES, OR ANY ORDER, RULE, REGULATION, OR DECISION OF THE NRC WITH RESPECT TO
THE ZION ASSETS.  SELLER IS IN COMPLIANCE WITH ALL NUCLEAR LAWS AND ALL ORDERS,
RULES, REGULATIONS, OR DECISIONS OF NRC APPLICABLE TO IT WITH RESPECT TO THE
ZION ASSETS, EXCEPT FOR VIOLATIONS WHICH, INDIVIDUALLY OR IN THE AGGREGATE,
WOULD NOT REASONABLY BE EXPECTED TO HAVE A SELLER MATERIAL ADVERSE EFFECT.

 

4.13.2.    SCHEDULE 4.13.2 SETS FORTH ALL LICENSES ISSUED BY THE NRC APPLICABLE
TO THE ZION ASSETS.

 

4.14.       REGULATION AS A UTILITY.

 

Seller is not, as a result of its ownership or present use of the Zion Assets,
subject to regulation as a public utility or public service company (or similar
designation) by any state of the United States (other than Illinois) or any
foreign country.

 

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4.15.       TAX MATTERS.

 

Except with respect to the portion of the Zion Assets that are part of the QDF,
(i) all Tax Returns of Seller required to be filed for taxable periods ended
prior to the Closing Date regarding the ownership, possession or use of the Zion
Assets have been filed, and (ii) all Taxes attributable to the ownership,
possession or use of the Zion Assets have been paid, except where such Taxes are
being contested in good faith through appropriate proceedings.  No notice of
deficiency or assessment has been received from any taxing authority with
respect to any liabilities for Taxes of Seller in respect to the Zion Assets
that has not been fully paid or finally settled, except for matters that are
being contested in good faith through appropriate proceedings.

 

4.16.       QDF.

 

4.16.1.    WITH RESPECT TO ALL PERIODS PRIOR TO THE CLOSING DATE: (I) THE QDF IS
A TRUST, VALIDLY EXISTING UNDER THE LAWS OF THE STATE OF ILLINOIS WITH ALL
REQUISITE AUTHORITY TO CONDUCT ITS AFFAIRS AS IT NOW DOES; (II) THE QDF
SATISFIES ALL REQUIREMENTS NECESSARY FOR SUCH FUND TO BE TREATED AS A NUCLEAR
DECOMMISSIONING FUND AS DEFINED IN TREAS. REG. SECTION 1.468A-1(B)(3); (III) THE
QDF IS IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH ALL APPLICABLE LAWS OF THE
NRC AND ANY OTHER GOVERNMENTAL AUTHORITY AND HAS NOT ENGAGED IN ANY ACTS OF
“SELF-DEALING” AS DEFINED IN TREAS. REG. § 1.468A-5(B)(2); (IV) NO “EXCESS
CONTRIBUTION,” AS DEFINED IN TREAS. REG. § 1.468A-5(C)(2)(II), HAS BEEN MADE TO
THE QDF WHICH HAS NOT BEEN WITHDRAWN WITHIN THE PERIOD PROVIDED UNDER TREAS.
REG. § 1.468A-5(C)(2)(I); (V) SELLER HAS TIMELY MADE VALID ELECTIONS TO MAKE
ANNUAL CONTRIBUTIONS TO THE QDF SINCE THE FIRST TAXABLE YEAR AFTER THE
ESTABLISHMENT OF SUCH FUND AND HAS MADE COPIES OF SUCH ELECTIONS AVAILABLE TO
BUYER; AND (VI) SELLER HAS REQUESTED PRIVATE LETTER RULINGS FROM THE IRS
REQUESTING THAT SELLER MAY CONTRIBUTE AMOUNTS TO THE QDFS WITHOUT REGARD TO THE
COST-OF-SERVICE LIMITATION FOR THE 2006 TAX YEAR, AND SELLER HAS CONTRIBUTED
THIRTY-ONE MILLION DOLLARS ($31,000,000) TO THE QDFS WITH AMOUNTS WITHDRAWN FROM
THE NDFS FOR THE 2006 TAX YEAR.

 

4.16.2.    SELLER HAS HERETOFORE DELIVERED TO BUYER A COPY OF SELLER’S
DECOMMISSIONING TRUST AGREEMENTS AS IN EFFECT ON THE DATE OF THIS AGREEMENT.

 

4.16.3.    SUBJECT ONLY TO THE REQUIRED REGULATORY APPROVALS, SELLER AND THE
TRUSTEE HAVE, OR AS OF CLOSING WILL HAVE, ALL REQUISITE AUTHORITY TO CAUSE THE
ASSETS OF THE QDF TO BE TRANSFERRED TO THE TRUSTEE OF THE BUYER’S POST-CLOSING
DECOMMISSIONING TRUST AGREEMENT.

 

4.16.4.    WITH RESPECT TO ALL PERIODS PRIOR TO THE CLOSING DATE, (I) SELLER
AND/OR THE TRUSTEE OF THE QDF HAS/HAVE FILED OR CAUSED TO BE FILED WITH THE NRC
AND ANY OTHER GOVERNMENTAL AUTHORITY ALL MATERIAL FORMS, STATEMENTS, REPORTS,
DOCUMENTS (INCLUDING ALL EXHIBITS, AMENDMENTS AND SUPPLEMENTS THERETO) REQUIRED
TO BE FILED BY SUCH ENTITIES; AND (II) THERE ARE NO INTERIM RATE ORDERS THAT MAY
BE RETROACTIVELY ADJUSTED OR RETROACTIVE ADJUSTMENTS TO INTERIM RATE ORDERS THAT
MATERIALLY MAY AFFECT AMOUNTS THAT BUYER MAY CONTRIBUTE TO THE QDF OR MAY
REQUIRE DISTRIBUTIONS TO BE MADE FROM THE QDF.  SELLER HAS DELIVERED TO BUYER A
COPY OF THE REVISED

 

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SCHEDULE OF RULING AMOUNTS MOST RECENTLY ISSUED BY THE IRS FOR THE QDF AND A
COMPLETE COPY OF THE REQUEST THAT WAS FILED WITH THE IRS TO OBTAIN SUCH SCHEDULE
OF RULING AMOUNTS AND A COPY OF ANY PENDING REQUEST FOR REVISED SCHEDULE OF
RULING AMOUNTS, IN EACH CASE TOGETHER WITH ALL EXHIBITS, AMENDMENTS AND
SUPPLEMENTS THERETO.  ANY AMOUNTS CONTRIBUTED TO THE QDF WHILE SUCH RULING
REQUEST IS PENDING BEFORE THE IRS AND WHICH ARE FINALLY DETERMINED TO EXCEED THE
APPLICABLE AMOUNTS PROVIDED IN THE SCHEDULE OF RULING AMOUNTS ISSUED BY THE IRS
WILL BE WITHDRAWN FROM SUCH FUND WITHIN THE PERIOD PROVIDED IN TREASURY REG.
1.468A-5(C)(2)(I).

 

4.16.5.    SCHEDULE 4.16 SETS FORTH A STATEMENT OF ASSETS OF THE QDF AS OF AS OF
THE MOST RECENT AVAILABLE DATE AND SUCH STATEMENT PRESENTS FAIRLY IN ALL
MATERIAL RESPECTS AS OF SUCH DATE THE FAIR MARKET VALUE OF THE ASSETS OF THE
QDF.   THERE ARE NO ENCUMBRANCES FOR TAXES AFFECTING THE ASSETS OF THE QDF OTHER
THAN PERMITTED ENCUMBRANCES.

 

4.16.6.    WITH RESPECT TO ALL TAXABLE PERIODS ENDING PRIOR TO THE CLOSING DATE,
THE QDF HAS FILED ALL MATERIAL TAX RETURNS REQUIRED TO BE FILED, INCLUDING
RETURNS FOR ESTIMATED INCOME TAXES, SUCH TAX RETURNS ARE TRUE, CORRECT AND
COMPLETE IN ALL MATERIAL RESPECTS, AND ALL TAXES SHOWN TO BE DUE ON SUCH TAX
RETURNS HAVE BEEN PAID IN FULL.  EXCEPT AS SHOWN IN SCHEDULE 4.16, NO NOTICE OF
DEFICIENCY OR ASSESSMENT HAS BEEN RECEIVED FROM ANY TAXING AUTHORITY WITH
RESPECT TO ANY LIABILITY FOR TAXES OF THE QDF WHICH HAVE NOT BEEN FULLY PAID OR
FINALLY SETTLED, AND ANY SUCH DEFICIENCY SHOWN IN SUCH SCHEDULE 4.16 IS BEING
CONTESTED IN GOOD FAITH THROUGH APPROPRIATE PROCEEDINGS.

 

4.17.       NDF.

 

4.17.1.    WITH RESPECT TO ALL PERIODS PRIOR TO THE CLOSING DATE, THE NDF IS A
TRUST VALIDLY EXISTING UNDER THE LAWS OF THE STATE OF ILLINOIS WITH ALL
REQUISITE AUTHORITY TO CONDUCT ITS AFFAIRS AS IT NOW DOES. THE NDF IS IN FULL
COMPLIANCE IN ALL MATERIAL RESPECTS WITH ALL APPLICABLE LAWS OF THE NRC.  THE
NDF IS CLASSIFIED AS A GRANTOR TRUST OWNED BY SELLER UNDER SECTIONS 671 THROUGH
677 OF THE CODE.

 

4.17.2.    SUBJECT ONLY TO THE REQUIRED REGULATORY APPROVALS, SELLER HAS OR AS
OF THE CLOSING WILL HAVE ALL REQUISITE AUTHORITY TO CAUSE A PORTION OF THE
ASSETS OF THE NDF TO BE TRANSFERRED TO THE TRUSTEE OF THE POST-CLOSING
DECOMMISSIONING TRUST AGREEMENT PURSUANT TO SECTION 6.12.

 

4.17.3.    SCHEDULE 4.17 SETS FORTH A STATEMENT OF ASSETS OF THE NDFAS OF THE
MOST RECENT AVAILABLE DATE AND SUCH STATEMENT PRESENTS FAIRLY IN ALL MATERIAL
RESPECTS AS OF SUCH DATE THE FAIR MARKET VALUE OF THE ASSETS OF THE NDF.

 

4.18.       COMPLETE COPIES.

 

To the Knowledge of Seller, Buyer or Buyer’s Parent has been provided access to
true, complete and unredacted copies of the emergency preparedness assets and
agreements, Transferable Permits, NRC Commitments, Real Property Agreements and
Seller’s Agreements.

 

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4.19.       BUYER’S REPRESENTATIONS AND WARRANTIES.

 

As of the date hereof, Seller does not have any Knowledge (without independent
investigation of inquiry by or on behalf of Seller or any officer or employee of
Seller or its Affiliates) of any breaches of any of Buyer’s representations or
warranties.

 

5.             REPRESENTATIONS AND WARRANTIES OF BUYER AND BUYER’S PARENT

 

Buyer, Buyer’s Parent and Guarantor represent and warrant to Seller as follows:

 

5.1.         ORGANIZATION; QUALIFICATION.

 

5.1.1.      BUYER IS A LIMITED LIABILITY COMPANY DULY FORMED, VALIDLY EXISTING
AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF DELAWARE. BUYER’S PARENT IS
A LIMITED LIABILITY COMPANY DULY FORMED, VALIDLY EXISTING AND IN GOOD STANDING
UNDER THE LAWS OF THE STATE OF UTAH. GUARANTOR IS A CORPORATION DULY FORMED,
VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF DELAWARE. 
EACH OF BUYER, BUYER’S PARENT AND GUARANTOR HAS ALL REQUISITE CORPORATE POWER
AND AUTHORITY TO OWN, LEASE AND OPERATE ITS PROPERTIES AND TO CARRY ON ITS
BUSINESS AS IT IS NOW BEING CONDUCTED. BUYER HAS HERETOFORE DELIVERED OR MADE
AVAILABLE TO SELLER COMPLETE AND CORRECT COPIES OF ITS CERTIFICATE OF FORMATION
AND OPERATING AGREEMENT AS CURRENTLY IN EFFECT. BUYER’S PARENT HAS HERETOFORE
DELIVERED OR MADE AVAILABLE TO SELLER COMPLETE AND CORRECT COPIES OF ITS
CERTIFICATE OF FORMATION AND OPERATING AGREEMENT AS CURRENTLY IN EFFECT. BUYER
IS, OR ON THE CLOSING DATE WILL BE, QUALIFIED TO CONDUCT BUSINESS IN THE STATE
OF ILLINOIS.  BUYER AND BUYER’S PARENT CONFORM TO THE RESTRICTIONS ON FOREIGN
OWNERSHIP, CONTROL OR DOMINATION CONTAINED IN SECTIONS 103D AND 104D OF THE
ATOMIC ENERGY ACT OF 1954, AS APPLICABLE, AND THE NRC’S REGULATIONS IN 10 C.F.R.
§ 50.38

 

5.1.2.      BUYER, BUYER’S PARENT AND GUARANTOR ARE FINANCIALLY CAPABLE AND
PROPERLY QUALIFIED TO UNDERTAKE THEIR OBLIGATIONS UNDER THIS AGREEMENT AND THE
ANCILLARY AGREEMENTS, AND THEY ARE PROPERLY LICENSED, EQUIPPED, AND ORGANIZED TO
DO SO.  THE FINANCIAL STATEMENTS OF BUYER’S PARENT AND ITS CONSOLIDATED
SUBSIDIARIES AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2005 AND DECEMBER 31,
2006 HERETOFORE FURNISHED BY BUYER AND BUYER’S PARENT TO SELLER, ARE TRUE AND
CORRECT AND DO PRESENT FAIRLY, ACCURATELY, AND COMPLETELY THE FINANCIAL POSITION
OF BUYER AND BUYER’S PARENT, RESPECTIVELY, AS OF THE DATES AND FOR THE PERIODS
FOR WHICH THE SAME HAVE BEEN FURNISHED, AND ALL SUCH FINANCIAL STATEMENTS HAVE
BEEN PREPARED PURSUANT TO AND IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES APPLIED ON A CONSISTENT BASIS.  ALL OTHER FINANCIAL INFORMATION AND
STATEMENTS OF EXPERIENCE AND QUALIFICATIONS OF BUYER AND BUYER’S PARENT
HERETOFORE FURNISHED BY BUYER OR BUYER’S PARENT TO SELLER IN CONNECTION WITH THE
EVALUATION, NEGOTIATION, REVIEW AND APPROVAL OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT AND THE ANCILLARY AGREEMENTS ARE TRUE AND CORRECT IN ALL MATERIAL
RESPECTS.  BUYER HAS SUFFICIENT FINANCIAL RESOURCES, WHEN COMBINED WITH THE
ASSETS TO BE TRANSFERRED TO THE BUYER NDF AND THE BUYER QDF, AND SUFFICIENT
EXPERTISE AND KNOW-HOW TO PERFORM ITS OBLIGATIONS UNDER THE LEASE AGREEMENT,
INCLUDING

 

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DECOMMISSIONING AND SITE RESTORATION IN COMPLIANCE WITH THE LEASE AGREEMENT AND
APPLICABLE LAW ON OR BEFORE THE TARGET COMPLETION DATE AND TO ACHIEVE END STATE
CONDITIONS THEREAFTER.  THE DOCUMENTS FILED WITH OR FURNISHED TO THE SEC BY
GUARANTOR, AS OF THE DATES ON WHICH THEY WERE FILED OR FURNISHED, DID NOT
CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT
REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN, IN
LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING.

 

5.2.         AUTHORITY RELATIVE TO THIS AGREEMENT.

 

Each of Buyer, Buyer’s Parent and Guarantor has full corporate power and
authority to execute and deliver this Agreement and the Ancillary Agreements, as
applicable, and to consummate the transactions contemplated hereby or thereby.
The execution and delivery of this Agreement and the Ancillary Agreements as
applicable, and the consummation of the transactions contemplated hereby or
thereby, will have been duly and validly authorized by all necessary corporate
action required on the part of each of Buyer, Buyer’s Parent and Guarantor, and
no other corporate proceedings on the part of Buyer, Buyer’s Parent or Guarantor
are necessary to authorize this Agreement and the Ancillary Agreements, as
applicable, or to consummate the transactions contemplated hereby or thereby.
This Agreement has been duly and validly executed and delivered by each of
Buyer, Buyer’s Parent and Guarantor, and assuming that this Agreement
constitutes a valid and binding agreement of Seller and subject to the receipt
of the Required Regulatory Approvals, constitutes a valid and binding agreement
of each of Buyer, Buyer’s Parent and Guarantor, enforceable against each of
Buyer, Buyer’s Parent and Guarantor in accordance with its terms.  Each of the
Ancillary Agreements to which Buyer, Buyer’s Parent or Guarantor is a party,
when executed and delivered at the Closing by Buyer, Buyer’s Parent and/or
Guarantor, as applicable, will constitute a valid and binding agreement of
Buyer, Buyer’s Parent and/or Guarantor, as applicable, enforceable against
Buyer, Buyer’s Parent and Guarantor, as applicable, in accordance with its
terms.

 

5.3.         CONSENTS AND APPROVALS; NO VIOLATION.

 

5.3.1.      SUBJECT TO THE RECEIPT OF THE THIRD-PARTY CONSENTS SET FORTH IN
SCHEDULE 5.3.1 AND THE REQUIRED REGULATORY APPROVALS, NEITHER THE EXECUTION AND
DELIVERY OF THIS AGREEMENT AND THE ANCILLARY AGREEMENTS BY BUYER, BUYER’S PARENT
OR GUARANTOR, AS APPLICABLE, NOR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY WILL (I) CONFLICT WITH OR RESULT IN ANY BREACH OF
ANY PROVISION OF THE CERTIFICATE OF FORMATION OR LIMITED LIABILITY COMPANY
AGREEMENT OF BUYER OR BUYER’S PARENT OR THE CERTIFICATE OF INCORPORATION OR
BYLAWS OF GUARANTOR; (II) RESULT IN A DEFAULT (OR GIVE RISE TO ANY RIGHT OF
TERMINATION, CANCELLATION OR ACCELERATION) UNDER ANY OF THE TERMS, CONDITIONS OR
PROVISIONS OF ANY NOTE, BOND, MORTGAGE, INDENTURE, AGREEMENT, LEASE OR OTHER
INSTRUMENT OR OBLIGATION TO WHICH BUYER, BUYER’S PARENT OR GUARANTOR IS A PARTY
OR BY WHICH ANY OF ITS ASSETS MAY BE BOUND, EXCEPT FOR SUCH DEFAULTS (OR RIGHTS
OF TERMINATION, CANCELLATION OR ACCELERATION) AS TO WHICH REQUISITE WAIVERS OR
CONSENTS HAVE BEEN OBTAINED OR WHICH WOULD NOT, INDIVIDUALLY OR IN THE
AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT ON THE BUSINESS, ASSETS, OPERATIONS OR
CONDITION (FINANCIAL OR OTHERWISE) OF BUYER, BUYER’S PARENT OR GUARANTOR OR ON
THE ABILITY OF BUYER, BUYER’S PARENT OR

 

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GUARANTOR TO PERFORM ITS OBLIGATIONS HEREUNDER OR UNDER THE ANCILLARY AGREEMENTS
(“BUYER MATERIAL ADVERSE EFFECT”); OR (III) VIOLATE ANY LAWS APPLICABLE TO
BUYER, BUYER’S PARENT OR GUARANTOR, WHICH VIOLATIONS, INDIVIDUALLY OR IN THE
AGGREGATE, WOULD CREATE A BUYER MATERIAL ADVERSE EFFECT.

 

5.3.2.      EXCEPT AS SET FORTH IN SCHEDULE 5.3.2, NO DECLARATION, FILING OR
REGISTRATION WITH, OR NOTICE TO, OR AUTHORIZATION, CONSENT OR APPROVAL OF ANY
GOVERNMENTAL AUTHORITY IS NECESSARY FOR THE EXECUTION OF THIS AGREEMENT AND THE
ANCILLARY AGREEMENTS AND THE CONSUMMATION BY BUYER, BUYER’S PARENT OR GUARANTOR
OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ANCILLARY AGREEMENTS,
OTHER THAN (I) SUCH DECLARATIONS, FILINGS, REGISTRATIONS, NOTICES,
AUTHORIZATIONS, CONSENTS OR APPROVALS WHICH, IF NOT OBTAINED OR MADE, WILL NOT,
INDIVIDUALLY OR IN THE AGGREGATE, CREATE A BUYER MATERIAL ADVERSE EFFECT, OR
(II) SUCH DECLARATIONS, FILINGS, REGISTRATIONS, NOTICES, AUTHORIZATIONS,
CONSENTS OR APPROVALS WHICH BECOME APPLICABLE TO BUYER AS A RESULT OF THE
SPECIFIC REGULATORY STATUS OF SELLER (OR ANY OF ITS AFFILIATES) OR THE RESULT OF
ANY OTHER FACTS THAT SPECIFICALLY RELATE TO THE BUSINESS OR ACTIVITIES IN WHICH
SELLER (OR ANY OF ITS AFFILIATES) IS OR PROPOSES TO BE ENGAGED.

 

5.4.         LEGAL PROCEEDINGS.

 

There are no claims, actions, proceedings or investigations pending or, to the
Knowledge of Buyer, Buyer’s Parent or Guarantor, threatened against Buyer,
Buyer’s Parent or Guarantor before any court, arbitrator, mediator or
Governmental Authority which, individually or in the aggregate, would reasonably
be expected to (i) result in a Buyer Material Adverse Effect; (ii) prohibit or
restrain the performance by Buyer or Buyer’s Parent of this Agreement or any of
the Ancillary Agreements or the consummation of the transactions contemplated
hereby or thereby. Neither Buyer, Buyer’s Parent nor Guarantor is subject to any
outstanding Governmental Orders which would have a Buyer Material Adverse
Effect.

 

5.5.         ABSENCE OF BUYER MATERIAL ADVERSE EFFECT; LIABILITIES.

 

Since January 1, 2005 there has not been any Buyer Material Adverse Effect.
Except as disclosed in Schedule 5.5 or the financial statements described in
Section 5.1.2, neither Buyer, Buyer’s Parent nor Guarantor has incurred debt for
borrowed money or guaranteed the indebtedness of any other Person.   The real
estate described in the Irrevocable Easement for Disposal Capacity is not
subject to any Encumbrance, except as set forth in Schedule 5.5.  Buyer has no
assets or Liabilities, other than assets represented by capital contributed to
Buyer by Buyer’s Parent and assets and Liabilities existing by reason of this
Agreement or the Ancillary Agreements. Buyer has not incurred, created or
assumed any Encumbrance on any of its properties, revenues or rights, whether
now owned or hereafter acquired.

 

5.6.         TRANSFER OF DECOMMISSIONING FUNDS.

 

The Buyer QDF and the Post-Closing Decommissioning Trust Agreement will, upon
receipt of the private letter rulings described in Schedule 5.3.2 satisfy the
requirements of Section 468A of the Code and the regulations promulgated
thereunder.  The Post-Closing Trust Agreement for the Buyer QDF and the Buyer
NDF will satisfy the NRC’s requirements for

 

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decommissioning trust provisions in 10 C.F.R. 50.75(h)(i) and the requirements
under the Laws of the State of Illinois.

 

5.7.         FOREIGN OWNERSHIP OR CONTROL.

 

Buyer or, if applicable, Buyer’s Parent and Guarantor conform to the
restrictions on foreign ownership, control or domination contained in Sections
103d and 104d of the Atomic Energy Act of 1954, as applicable, and the NRC’s
regulations in 10 C.F.R. § 50.38. Neither Buyer, Buyer’s Parent nor Guarantor is
currently owned, controlled or dominated by a foreign entity and neither will
become owned, controlled, or dominated by a foreign entity before the Closing.

 

5.8.         SELLER’S REPRESENTATIONS AND WARRANTIES.

 

As of the date hereof, Buyer, Buyer’s Parent and Guarantor have no Knowledge
(without independent investigation or inquiry by or on behalf of any officer or
employee of Buyer, Buyer’s Parent, Guarantor or their Affiliates) of any
breaches of any of Seller’s representations or warranties.

 

5.9.         PERMIT QUALIFICATIONS.

 

Buyer will be, as the owner of the Zion Assets, qualified to hold any Permits
and Environmental Permits.

 

6.             COVENANTS OF THE PARTIES

 

6.1.         SELLER’S CONDUCT OF BUSINESS RELATING TO THE ZION ASSETS.

 

6.1.1.      DURING THE PERIOD FROM THE DATE HEREOF TO THE CLOSING DATE, SELLER
SHALL USE AND MAINTAIN, OR CAUSE TO BE USED AND MAINTAINED, THE ZION ASSETS IN
THE ORDINARY COURSE OF PRESENT USE CONSISTENT WITH GOOD UTILITY PRACTICES; IT
BEING UNDERSTOOD THAT ANY ACTIONS DEEMED REASONABLY NECESSARY IN THE USE AND
MAINTENANCE OF THE ZION ASSETS IN ACCORDANCE WITH GOOD UTILITY PRACTICES SHALL
BE DEEMED TO BE IN THE ORDINARY COURSE UNLESS SUCH ACTIONS (I) MATERIALLY IMPAIR
BUYER’S INTENDED OWNERSHIP, POSSESSION, OR USE OF THE ZION ASSETS,
(II) MATERIALLY IMPAIR BUYER’S INTENDED LEASE, OCCUPANCY, POSSESSION, USE, OF
THE ZION STATION SITE AS SET FORTH IN THE LEASE AGREEMENT; OR (III) MATERIALLY
INCREASE THE ASSUMED LIABILITIES.  WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, AND, EXCEPT AS CONTEMPLATED IN THIS AGREEMENT DURING THE PERIOD FROM
THE DATE HEREOF TO THE CLOSING DATE, WITHOUT THE PRIOR WRITTEN CONSENT OF BUYER
(UNLESS THE REQUIREMENT FOR SUCH CONSENT WOULD BE PROHIBITED BY LAW), WHICH
CONSENT WILL NOT BE UNREASONABLY WITHHELD, SELLER SHALL NOT DIRECTLY DO ANY OF
THE FOLLOWING WITH RESPECT TO THE ZION ASSETS:

 

6.1.1.1    SELL, LEASE, PLEDGE, MORTGAGE, ENCUMBER, RESTRICT, DISPOSE OF, GRANT
ANY RIGHT WITH RESPECT TO THE ZION ASSETS IF SUCH ACTION WOULD REASONABLY BE
EXPECTED TO HAVE A SELLER MATERIAL ADVERSE EFFECT; PROVIDED, HOWEVER, THE

 

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FOREGOING SHALL NOT BE CONSTRUED TO RESTRICT IN ANY WAY SELLER’S ABILITY TO SELL
NDF ASSETS AND WITHDRAW NDF FUNDS IN ORDER FOR SELLER TO MEET ITS OBLIGATIONS
HEREUNDER AND COMPLETE THE TRANSFERS CONTEMPLATED BY SECTION 6.12;

 

6.1.1.2    MATERIALLY AMEND, EXTEND OR VOLUNTARILY TERMINATE PRIOR TO THE
EXPIRATION DATE THEREOF ANY OF SELLER’S AGREEMENTS OR THE REAL PROPERTY
AGREEMENTS OR ANY MATERIAL PERMIT OR ENVIRONMENTAL PERMIT OR WAIVE ANY DEFAULT
BY, OR RELEASE, SETTLE OR COMPROMISE ANY CLAIM AGAINST, ANY OTHER PARTY THERETO,
OTHER THAN (A) IN THE ORDINARY COURSE OF BUSINESS, TO THE EXTENT CONSISTENT WITH
GOOD UTILITY PRACTICES, (B) WITH CAUSE, TO THE EXTENT CONSISTENT WITH GOOD
UTILITY PRACTICES, OR (C) AS MAY BE PERMITTED BY SECTION 6.10.1 OR OTHERWISE
REQUIRED IN CONNECTION WITH SELLER’S OBLIGATIONS TO BUYER UNDER THIS AGREEMENT;

 

6.1.1.3    AMEND IN ANY MATERIAL RESPECT OR CANCEL ANY PROPERTY, LIABILITY OR
CASUALTY INSURANCE POLICIES RELATED TO THE ZION ASSETS, OR FAIL TO USE
COMMERCIALLY REASONABLE EFFORTS TO MAINTAIN BY SELF INSURANCE OR WITH
FINANCIALLY RESPONSIBLE INSURANCE COMPANIES INSURANCE ON THE ZION ASSETS IN SUCH
AMOUNTS AND AGAINST SUCH RISKS AND LOSSES AS ARE CUSTOMARY FOR SUCH ASSETS AND
BUSINESSES;

 

6.1.1.4    MOVE TO THE ZION STATION SITE ANY NUCLEAR MATERIALS OR HAZARDOUS
MATERIALS;

 

6.1.1.5    INCUR ANY OBLIGATION OR COMMITMENT RELATED TO THE ZION ASSETS, OTHER
THAN EXCLUDED LIABILITIES AND THE REIMBURSEMENT OBLIGATION FROM THE NDF OF NOT
MORE THAN $1 MILLION PER MONTH AFTER DECEMBER 31, 2006 FOR SAFSTOR AND
DECOMMISSIONING PLANNING ACTIVITIES, OTHER THAN THOSE CONDUCTED BY BUYER’S
PARENT AND BUYER OR THEIR CONTRACTORS, AND EXIGENT OR EMERGENT EXPENSES INCURRED
BY SELLER IN ACCORDANCE WITH GOOD UTILITY PRACTICES AFTER DISCUSSION WITH BUYER;

 

6.1.1.6    OTHER THAN IN THE ORDINARY COURSE OF BUSINESS OR AS REQUIRED BY LAW
OR A COLLECTIVE BARGAINING AGREEMENT OR OTHER AGREEMENTS AS IN EXISTENCE THROUGH
THE CLOSING DATE OR AS PERMITTED UNDER THE LEASED PERSONNEL AGREEMENT, (I) HIRE
ANY ZION EMPLOYEE (OTHER THAN TO REPLACE A ZION EMPLOYEE WHO MAY HAVE RESIGNED
OR BEEN TERMINATED); (II) INCREASE THE COMPENSATION OR BENEFITS PAYABLE TO ANY
ZION EMPLOYEE; OR (III) TRANSFER OR TERMINATE ANY ZION EMPLOYEE (OTHER THAN FOR
CAUSE OR WITH CONSENT OF THE BUYER OR THROUGH VOLUNTARY TERMINATION OR
RETIREMENT);

 

6.1.1.7    OTHER THAN IN THE ORDINARY COURSE OF BUSINESS OR AS REQUIRED BY LAW
OR A COLLECTIVE BARGAINING AGREEMENT OR OTHER AGREEMENTS AS IN EXISTENCE THROUGH
THE CLOSING DATE OR AS PERMITTED UNDER THE LEASED PERSONNEL AGREEMENT, ENTER
INTO ANY NEW COLLECTIVE BARGAINING AGREEMENTS;

 

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6.1.1.8    SETTLE ANY CLAIM OR LITIGATION THAT RESULTS IN ANY MATERIAL
OBLIGATION IMPOSED ON THE ZION ASSETS THAT COULD REASONABLY BE LIKELY TO
CONTINUE PAST THE CLOSING DATE;

 

6.1.1.9    ENTER INTO ANY INDIVIDUAL REQUIREMENTS CONTRACT FOR GOODS OR ANY
COMMITMENT OR CONTRACT FOR NON-EMPLOYMENT RELATED SERVICES THAT WILL CONSTITUTE
AN ASSUMED LIABILITY AND BE DELIVERED OR PROVIDED AFTER THE CLOSING DATE OR SUCH
OTHER DATE AS THE PARTIES MUTUALLY AGREE TO BE THE DATE ON WHICH THE CLOSING IS
EXPECTED TO OCCUR THAT EXCEEDS  ONE HUNDRED THOUSAND DOLLARS ($100,000) PER
ANNUM, UNLESS SUCH COMMITMENT OR CONTRACT IS TERMINABLE BY SELLER (OR AFTER THE
CLOSING DATE BY BUYER) UPON NOT MORE THAN NINETY (90) DAYS NOTICE WITHOUT
PENALTY OR CANCELLATION CHARGE;

 

6.1.1.10            EXCEPT AS REQUIRED BY ANY LAW OR ACCOUNTING PRINCIPLES
GENERALLY ACCEPTED IN THE UNITED STATES, CHANGE, IN ANY MATERIAL RESPECT, ITS
TAX PRACTICE OR POLICY (INCLUDING MAKING NEW TAX ELECTIONS OR CHANGING TAX
ELECTIONS AND SETTLING TAX CONTROVERSIES NOT IN THE ORDINARY COURSE OF BUSINESS)
WITH RESPECT TO THE ZION ASSETS TO THE EXTENT SUCH CHANGE OR SETTLEMENT WOULD BE
BINDING ON BUYER AND HAVE A SELLER MATERIAL ADVERSE EFFECT;

 

6.1.1.11            KNOWINGLY ENGAGE IN ANY PRACTICE, TAKE ANY ACTION, FAIL TO
TAKE ANY ACTION, OR ENTER INTO ANY TRANSACTION THROUGH THE CLOSING DATE THAT
WILL RESULT OR MAY REASONABLY BE ANTICIPATED TO RESULT IN ANY MISREPRESENTATION
OR BREACH OF ANY WARRANTY OF SELLER HEREUNDER AS OF THE CLOSING DATE;

 

6.1.1.12            AMEND SELLER’S DECOMMISSIONING TRUST AGREEMENTS IN ANY WAY
THAT WOULD MATERIALLY ALTER THE BUSINESS AND INVESTMENT PRACTICES WITH RESPECT
TO THE QDF AND NDF; OR

 

6.1.1.13            AGREE TO ENTER INTO ANY OF THE TRANSACTIONS SET FORTH IN THE
FOREGOING PROVISIONS OF THIS SECTION 6.1.1.

 

6.1.2.      DURING THE PERIOD FROM THE DATE HEREOF TO THE CLOSING DATE, SELLER
SHALL ALSO:

 

6.1.2.1    MAKE ALL REQUIRED DEPOSITS TO THE QDF AND THE NDF AND CAUSE THE
TRUSTEE TO PAY ALL TAXES, EXPENSES AND FEES RELATING TO THE QDF AND THE NDF FOR
THE PERIOD THAT ENDS ON THE CLOSING DATE;

 

6.1.2.2    NOTIFY BUYER OF ANY MATERIAL AMENDMENTS TO SELLER’S DECOMMISSIONING
TRUST AGREEMENTS;

 

6.1.2.3    MAKE AVAILABLE TO BUYER MONTHLY STATEMENTS OF ASSETS OF THE QDF;

 

6.1.2.4    MAKE AVAILABLE TO BUYER MONTHLY STATEMENTS OF ASSETS OF THE NDF; AND

 

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6.1.2.5    TO THE EXTENT PERMITTED BY LAW, ACCOMMODATE BUYER’S REASONABLE
REQUESTS REGARDING THE INVESTMENTS (E.G., CATEGORIES OR SPECIFIC) TO BE HELD BY
THE NDF ASSETS TO BE TRANSFERRED TO THE BUYER NDF; PROVIDED, HOWEVER, THAT THE
NDF SHALL BE RESPONSIBLE FOR ANY TAXES RESULTING FROM SUCH REQUESTS WITHOUT
REIMBURSEMENT FROM SELLER.

 

6.2.         BUYER’S, BUYER’S PARENT AND GUARANTOR’S CONDUCT OF BUSINESS
RELATING TO THE ZION ASSETS.

 

6.2.1.      DURING THE PERIOD FROM THE DATE HEREOF TO THE CLOSING DATE BUYER,
BUYER’S PARENT AND GUARANTOR SHALL NOT:

 

6.2.1.1    AMEND BUYER’S CERTIFICATE OF FORMATION OR OPERATING AGREEMENT WITHOUT
THE PRIOR WRITTEN CONSENT OF SELLER;

 

6.2.1.2    ENGAGE IN ANY BUSINESS ACTIVITY OR INCUR ANY LIABILITY BY OR ON
BEHALF OF BUYER, EXCEPT AS NECESSARY IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT;

 

6.2.1.3    KNOWINGLY ENGAGE IN ANY PRACTICE, TAKE ANY ACTION, FAIL TO TAKE ANY
ACTION, OR ENTER INTO ANY TRANSACTION THAT WILL RESULT OR MAY REASONABLY BE
ANTICIPATED TO RESULT IN ANY MISREPRESENTATION OR BREACH OF ANY WARRANTY OR
COVENANT OF BUYER, BUYER’S PARENT OR GUARANTOR HEREUNDER OR UNDER THE ANCILLARY
AGREEMENTS;

 

6.2.1.4    BE OR BECOME OWNED, CONTROLLED OR DOMINATED BY A FOREIGN ENTITY; OR

 

6.2.1.5    AGREE TO TAKE ANY ACTION OR ENTER INTO ANY TRANSACTION THAT WOULD
VIOLATE THE FOREGOING PROVISIONS OF THIS SECTION 6.2.1.

 

6.2.2.      DURING THE PERIOD FROM THE DATE HEREOF TO THE CLOSING DATE, BUYER
AND BUYER’S PARENT, AS APPLICABLE, SHALL DELIVER TO SELLER:

 

6.2.2.1    AS SOON AS AVAILABLE AND IN ANY EVENT WITHIN SIXTY (60) DAYS AFTER
THE END OF EACH OF THE FIRST THREE QUARTERS OF EACH FISCAL YEAR OF BUYER’S
PARENT, A COPY OF BUYER’S PARENT’S QUARTERLY REPORT ON FORM 10-Q FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH QUARTER (OR, IF BUYER’S
PARENT IS NOT REQUIRED TO FILE A QUARTERLY REPORT ON FORM 10-Q, A COPY OF AN
UNAUDITED CONSOLIDATED BALANCE SHEET OF BUYER’S PARENT AS OF THE END OF SUCH
QUARTER AND THE RELATED CONSOLIDATED STATEMENT OF INCOME OF BUYER’S PARENT FOR
THE PORTION OF THE FISCAL YEAR OF BUYER’S PARENT ENDING ON THE LAST DAY OF SUCH
QUARTER, IN EACH CASE PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES, SUBJECT TO THE ABSENCE OF FOOTNOTES AND TO YEAR-END AUDIT
ADJUSTMENTS), TOGETHER WITH A CERTIFICATE OF THE CHIEF FINANCIAL OFFICER OF
BUYER’S PARENT TO THE EFFECT THAT SUCH FINANCIAL STATEMENTS FAIRLY PRESENT THE
CONSOLIDATED FINANCIAL CONDITION OF BUYER’S PARENT AS OF THE DATE THEREOF AND
RESULTS OF OPERATIONS FOR THE PERIOD THEN ENDED;

 

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6.2.2.2    AS SOON AS AVAILABLE AND IN ANY EVENT WITHIN ONE-HUNDRED FIVE (105)
DAYS AFTER THE END OF EACH FISCAL YEAR OF BUYER’S PARENT, A COPY OF BUYER’S
PARENT’S ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION WITH RESPECT TO SUCH FISCAL YEAR (OR, IF BUYER’S PARENT IS NOT
REQUIRED TO FILE AN ANNUAL REPORT ON FORM 10-K, AN AUDITED COPY OF A
CONSOLIDATED BALANCE SHEET OF BUYER’S PARENT AS OF THE LAST DAY OF SUCH FISCAL
YEAR AND THE RELATED AUDITED CONSOLIDATED STATEMENTS OF INCOME, RETAINED
EARNINGS AND CASH FLOWS OF BUYER’S PARENT FOR SUCH FISCAL YEAR, TOGETHER WITH AN
OPINION OF ERNST & YOUNG LLP OR OTHER CERTIFIED PUBLIC ACCOUNTANTS OF RECOGNIZED
NATIONAL STANDING); AND

 

6.2.2.3    AS PROMPTLY AS REASONABLY PRACTICABLE, SUCH OTHER INFORMATION
CONCERNING BUYER OR BUYER’S PARENT AS SELLER MAY REASONABLY REQUEST IN ORDER TO
VERIFY THE ACCURACY OF THE REPRESENTATIONS AND WARRANTIES OF BUYER AND BUYER’S
PARENT.

 

6.3.         ACCESS TO INFORMATION; PROTECTION OF PROPRIETARY INFORMATION.

 

6.3.1.      BETWEEN THE DATE OF THIS AGREEMENT AND THE CLOSING DATE, SELLER
WILL, DURING ORDINARY BUSINESS HOURS, UPON REASONABLE NOTICE AND SUBJECT TO
COMPLIANCE WITH ALL APPLICABLE NRC RULES AND REGULATIONS AND OTHER APPLICABLE
LAWS (I) GIVE BUYER AND BUYER’S REPRESENTATIVES REASONABLE ACCESS TO ALL
MANAGEMENT PERSONNEL ENGAGED IN THE MANAGEMENT OF THE ZION ASSETS AND ALL BOOKS,
DOCUMENTS, RECORDS, PLANTS, OFFICES AND OTHER FACILITIES AND PROPERTIES
CONSTITUTING THE ZION ASSETS; (II) PERMIT BUYER TO MAKE SUCH REASONABLE
INSPECTIONS THEREOF AS BUYER MAY REASONABLY REQUEST; (III) FURNISH BUYER WITH
SUCH FINANCIAL AND OTHER INFORMATION WITH RESPECT TO THE ZION ASSETS AS BUYER
MAY FROM TIME TO TIME REASONABLY REQUEST; (IV) FURNISH BUYER A COPY OF EACH
MATERIAL REPORT, SCHEDULE OR OTHER DOCUMENT FILED OR RECEIVED BY IT SINCE THE
DATE HEREOF WITH RESPECT TO THE ZION ASSETS WITH THE NRC OR ANY OTHER
GOVERNMENTAL AUTHORITY HAVING JURISDICTION OVER THE ZION ASSETS; PROVIDED,
HOWEVER, THAT (A) ANY SUCH INVESTIGATION SHALL BE CONDUCTED IN SUCH A MANNER AS
NOT TO INTERFERE UNREASONABLY WITH THE OWNERSHIP, USE OR MANAGEMENT OF THE ZION
ASSETS OR OTHER ACTIVITIES OF SELLER AT THE ZION STATION SITE; (B) SELLER SHALL
NOT BE REQUIRED TO TAKE ANY ACTION WHICH WOULD CONSTITUTE A WAIVER OF THE
ATTORNEY-CLIENT PRIVILEGE; AND (C) SELLER NEED NOT SUPPLY BUYER WITH ANY
INFORMATION THAT SELLER IS LEGALLY OR CONTRACTUALLY PROHIBITED FROM SUPPLYING.

 

6.3.2.      FROM AND AFTER THE DATE HEREOF, AND ENDING TWO YEARS AFTER THE
TERMINATION OF THIS AGREEMENT IF THIS AGREEMENT IS TERMINATED:  (I) BUYER,
BUYER’S PARENT AND GUARANTOR SHALL USE AND DISCLOSE, AND SHALL CAUSE THEIR
REPRESENTATIVES TO USE AND DISCLOSE, SELLER’S PROPRIETARY INFORMATION ONLY TO
THE EXTENT NECESSARY TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY, AND PERFORM
THEIR OBLIGATIONS UNDER, THIS AGREEMENT AND THE ANCILLARY AGREEMENTS; AND
(II) SELLER SHALL USE AND DISCLOSE, AND SHALL CAUSE ITS REPRESENTATIVES TO USE
AND DISCLOSE, BUYER’S PROPRIETARY INFORMATION ONLY TO THE EXTENT NECESSARY TO
CONSUMMATE THE

 

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TRANSACTIONS CONTEMPLATED BY, AND PERFORM ITS OBLIGATIONS UNDER, THIS AGREEMENT
AND THE ANCILLARY AGREEMENTS.

 

6.3.3.      FOLLOWING THE CLOSING DATE AND SUBJECT TO ALL APPLICABLE NRC
RULES AND REGULATIONS, EACH PARTY AND ITS RESPECTIVE REPRESENTATIVES SHALL HAVE
REASONABLE ACCESS TO ALL OF THE BUSINESS BOOKS AND RECORDS IN THE POSSESSION OF
THE OTHER PARTY OR PARTIES TO THE EXTENT THAT SUCH ACCESS MAY REASONABLY BE
REQUIRED BY SUCH PARTY IN CONNECTION WITH THE ASSUMED LIABILITIES OR THE
EXCLUDED LIABILITIES, OR OTHER MATTERS RELATING TO OR AFFECTED BY THE OWNERSHIP,
POSSESSION OR USE OF THE ZION ASSETS.  SUCH ACCESS SHALL BE AFFORDED BY THE
PARTY OR PARTIES IN POSSESSION OF SUCH BUSINESS BOOKS AND RECORDS UPON RECEIPT
OF REASONABLE ADVANCE NOTICE AND DURING NORMAL BUSINESS HOURS.  THE PARTY OR
PARTIES EXERCISING THIS RIGHT OF ACCESS SHALL BE SOLELY RESPONSIBLE FOR ANY
COSTS OR EXPENSES INCURRED BY IT OR THEM PURSUANT TO THIS SECTION 6.3.3.  THE
PARTY OR PARTIES IN POSSESSION OF SUCH BUSINESS BOOKS AND RECORDS SHALL RETAIN
SUCH BUSINESS BOOKS AND RECORDS FROM AND AFTER THE CLOSING DATE SO LONG AS MAY
BE REQUIRED BY LAW.  IF THE PARTY OR PARTIES IN POSSESSION OF SUCH BOOKS AND
RECORDS SHALL DESIRE TO DISPOSE OF ANY SUCH BUSINESS BOOKS AND RECORDS, SUCH
PARTY OR PARTIES SHALL, PRIOR TO SUCH DISPOSITION, GIVE THE OTHER PARTY OR
PARTIES A REASONABLE OPPORTUNITY AT SUCH OTHER PARTY’S OR PARTIES’ EXPENSE, TO
SEGREGATE AND REMOVE SUCH BUSINESS BOOKS AND RECORDS AS SUCH OTHER PARTY OR
PARTIES MAY SELECT.  NOTWITHSTANDING THE FOREGOING, THE RIGHT OF ACCESS TO
MEDICAL RECORDS AND OTHER CONFIDENTIAL EMPLOYEE RECORDS SHALL BE SUBJECT TO ALL
APPLICABLE LEGAL REQUIREMENTS.

 

6.3.4.      SELLER AGREES (I) NOT TO RELEASE ANY PERSON (OTHER THAN BUYER AND
BUYER’S PARENT) FROM ANY CONFIDENTIALITY AGREEMENT NOW EXISTING WITH RESPECT TO
THE ZION ASSETS, OR WAIVE OR AMEND ANY PROVISION THEREOF; AND (II) TO PROMPTLY
AFTER THE CLOSING DATE ASSIGN ANY RIGHTS ARISING UNDER ANY SUCH CONFIDENTIALITY
AGREEMENT (TO THE EXTENT ASSIGNABLE) TO BUYER AND BUYER’S PARENT.

 

6.3.5.      NOTWITHSTANDING THE TERMS OF SECTION 6.3.2, PRIOR TO THE CLOSING,
BUYER, BUYER’S PARENT AND GUARANTOR MAY REVEAL OR DISCLOSE PROPRIETARY
INFORMATION TO ANY OTHER PERSONS AS REASONABLY REQUIRED IN CONNECTION WITH
BUYER’S, BUYER’S PARENT’S OR GUARANTOR’S OBTAINING THE IRREVOCABLE LETTER OF
CREDIT OR CONSENTS FROM THIRD PARTIES, INCLUDING BUYER’S PARENT’S EXISTING
LENDERS, AND, TO THE EXTENT THAT SELLER CONSENTS, WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD, TO EXISTING AND POTENTIAL SUPPLIERS, AND TO SUCH PERSONS
WITH WHOM BUYER AND BUYER’S PARENT EXPECT IT MAY HAVE BUSINESS DEALINGS
REGARDING THE ZION ASSETS FROM AND AFTER THE CLOSING DATE OTHER THAN ANY PERSON
WHO IS A COMPETITOR OF SELLER; PROVIDED, HOWEVER, THAT ALL SUCH PERSONS AGREE IN
WRITING TO MAINTAIN THE CONFIDENTIALITY OF THE SELLER PROPRIETARY INFORMATION ON
SUBSTANTIALLY THE SAME TERMS AND CONDITIONS AS THOSE CONTAINED IN SECTION 6.2.2;
AND PROVIDED, FURTHER, THAT BUYER, BUYER’S PARENT AND GUARANTOR SHALL BE
RESPONSIBLE FOR ANY BREACH BY ANY SUCH PERSONS OF SUCH CONFIDENTIALITY
OBLIGATIONS.

 

6.3.6.      BUYER, BUYER’S PARENT AND GUARANTOR AGREE THAT, PRIOR TO THE CLOSING
DATE, THEY WILL NOT CONTACT ANY VENDORS, SUPPLIERS, EMPLOYEES, OR OTHER
CONTRACTING PARTIES OF

 

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SELLER OR SELLER’S AFFILIATES WITH RESPECT TO ANY ASPECT OF THE ZION ASSETS OR
THE TRANSACTIONS CONTEMPLATED HEREBY, WITHOUT THE PRIOR WRITTEN CONSENT OF
SELLER, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD.

 

6.3.7.      UPON BUYER’S, BUYER’S PARENT’S OR GUARANTOR’S OR SELLER’S (AS THE
CASE MAY BE) PRIOR WRITTEN APPROVAL (WHICH APPROVAL SHALL NOT BE UNREASONABLY
WITHHELD), SELLER, OR BUYER, BUYER’S PARENT OR GUARANTOR (AS THE CASE MAY BE)
MAY PROVIDE PROPRIETARY INFORMATION OF ANY OTHER PARTY TO THE NRC OR ANY OTHER
GOVERNMENTAL AUTHORITY HAVING JURISDICTION OVER THE ZION ASSETS OR ANY PORTION
THEREOF, AS MAY BE NECESSARY TO OBTAIN SELLER’S REQUIRED REGULATORY APPROVALS OR
BUYER’S OR BUYER’S PARENT’S REQUIRED REGULATORY APPROVALS, RESPECTIVELY.  THE
DISCLOSING PARTY SHALL SEEK CONFIDENTIAL TREATMENT FOR THE PROPRIETARY
INFORMATION PROVIDED TO ANY SUCH GOVERNMENTAL AUTHORITY AND THE DISCLOSING PARTY
SHALL NOTIFY THE OTHER PARTY WHOSE PROPRIETARY INFORMATION IS TO BE DISCLOSED,
AS FAR IN ADVANCE AS REASONABLY PRACTICAL, OF ITS INTENTION TO RELEASE TO ANY
GOVERNMENTAL AUTHORITY ANY SUCH PROPRIETARY INFORMATION. IN THE EVENT THAT
DISCLOSURE OF PROPRIETARY INFORMATION IS REQUIRED BY ORDER OF A COURT OR OTHER
GOVERNMENTAL AUTHORITY OR BY SUBPOENA OR OTHER SIMILAR LEGAL PROCESS, THE PARTY
SUBJECT TO SUCH ORDER, SUBPOENA OR OTHER LEGAL PROCESS SHALL, TO THE EXTENT
PERMITTED BY LAW, NOTIFY THE OTHER PARTY WHOSE PROPRIETARY INFORMATION IS TO BE
DISCLOSED AND THE PARTIES SHALL CONSULT AND COOPERATE IN SEEKING A PROTECTIVE
ORDER OR OTHER RELIEF TO PRESERVE THE CONFIDENTIALITY OF PROPRIETARY
INFORMATION.

 

6.3.8.      SELLER OR BUYER, BUYER’S PARENT OR GUARANTOR (AS THE CASE MAY BE)
MAY, WITHOUT THE PRIOR CONSENT OF THE OTHER PARTY, DISCLOSE PROPRIETARY
INFORMATION OF ANY OTHER PARTY AS MAY BE NECESSARY TO COMPLY GENERALLY WITH ANY
APPLICABLE LAWS OR WITH THE RULES OF ANY APPLICABLE STOCK EXCHANGE.  THE
DISCLOSING PARTY SHALL NOTIFY THE OTHER PARTY WHOSE PROPRIETARY INFORMATION IS
TO BE DISCLOSED, AS FAR IN ADVANCE AS REASONABLY PRACTICAL, OF ITS INTENTION TO
RELEASE TO ANY THIRD PARTY ANY SUCH PROPRIETARY INFORMATION.

 

6.3.9.      THE CONFIDENTIALITY AGREEMENTS SHALL BE TERMINATED AND BE OF NO
FURTHER FORCE OR EFFECT AFTER THE DATE HEREOF EXCEPT FOR REMEDIES FOR ANY BREACH
OF THE CONFIDENTIALITY AGREEMENTS ARISING PRIOR TO THE DATE HEREOF.    AFTER THE
CLOSING DATE, SELLER SHALL KEEP CONFIDENTIAL ALL PROPRIETARY INFORMATION
PROVIDED BY BUYER, BUYER’S PARENT OR GUARANTOR OR WHICH SELLER POSSESSES WITH
RESPECT TO THE ZION ASSETS, TO THE EXTENT PERMITTED BY LAW, AND TO THE SAME
EXTENT AND UNDER THE SAME CONDITIONS APPLICABLE TO THE OBLIGATIONS OF BUYER,
BUYER’S PARENT AND GUARANTOR WITH RESPECT TO SELLER’S PROPRIETARY INFORMATION AS
CONTAINED IN THIS AGREEMENT.  AFTER THE CLOSING DATE, BUYER, BUYER’S PARENT AND
GUARANTOR SHALL KEEP CONFIDENTIAL ALL PROPRIETARY INFORMATION PROVIDED BY SELLER
OR WHICH BUYER, BUYER’S PARENT OR GUARANTOR POSSESSES WITH RESPECT TO THE ZION
ASSETS, TO THE EXTENT PERMITTED BY LAW, AND TO THE SAME EXTENT AND UNDER THE
SAME CONDITIONS APPLICABLE TO THE OBLIGATIONS OF SELLER WITH RESPECT TO BUYER’S
PROPRIETARY INFORMATION AS CONTAINED IN THIS AGREEMENT.

 

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6.3.10.    FOLLOWING TERMINATION OF THIS AGREEMENT, BUYER, BUYER’S PARENT AND
GUARANTOR SHALL, WITHIN THIRTY (30) DAYS AFTER THE REQUEST OF SELLER, RETURN OR
DESTROY SELLER’S PROPRIETARY INFORMATION IN THE POSSESSION OR CONTROL OF BUYER,
BUYER’S PARENT OR GUARANTOR OR THEIR REPRESENTATIVES, AND SELLER SHALL, WITHIN
THIRTY (30) DAYS AFTER THE REQUEST OF BUYER, BUYER’S PARENT OR GUARANTOR, RETURN
OR DESTROY BUYER’S PROPRIETARY INFORMATION IN THE POSSESSION OR CONTROL OF
SELLER OR ITS REPRESENTATIVES.  NOTWITHSTANDING THE FOREGOING, A RECIPIENT OR
ANOTHER PARTY’S PROPRIETARY INFORMATION SHALL NOT BE REQUIRED TO RETURN OR
DESTROY SUCH OTHER PARTY’S PROPRIETARY INFORMATION TO THE EXTENT THAT (I) IT
DIRECTLY RELATES TO A MATTER THAT IS OR IS EXPECTED TO BE THE SUBJECT OF
LITIGATION OR CLAIMS, (II) IS COMMINGLED WITH OTHER ELECTRONIC RECORDS THAT ARE
COLLECTED AND MAINTAINED IN A SEPARATE SECURE FACILITY AS PART OF INFORMATION
TECHNOLOGY BACKUP PROCEDURES IN ACCORDANCE WITH THE NORMAL COURSE OF BUSINESS,
(III) IS INCLUDED IN A PARTY’S DISCLOSURES TO ITS OR ITS AFFILIATE’S BOARD OF
DIRECTORS OR SIMILAR GOVERNING BODY OR THE RECORDS OF DELIBERATIONS OF SUCH BODY
IN CONNECTION WITH THE CONSIDERATION OF THE AUTHORIZATION AND APPROVAL OF THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, (IV) THE RECIPIENT IS
REQUIRED TO RETAIN SUCH PROPRIETARY INFORMATION UNDER APPLICABLE LAW, OR (V) THE
RECIPIENT IS A LEGAL OR OTHER PROFESSIONAL ADVISOR TO A PARTY WITH PROFESSIONAL
RESPONSIBILITIES TO MAINTAIN CLIENT CONFIDENCES.

 

6.4.         EXPENSES.

 

6.4.1.      EXCEPT TO THE EXTENT SPECIFICALLY PROVIDED HEREIN, WHETHER OR NOT
THE TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED, EACH PARTY SHALL BEAR ITS
OWN COSTS AND EXPENSES INCURRED IN CONNECTION WITH THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING THE COST OF LEGAL, TECHNICAL AND
FINANCIAL CONSULTANTS, THE COSTS OF TRANSITION AS SET FORTH IN THE TRANSITION
PLAN TO BE ADOPTED BY THE PARTIES IN ACCORDANCE WITH SECTION 6.5.3, AND THE COST
OF FILING FOR AND PROSECUTING APPLICATIONS FOR REQUIRED REGULATORY APPROVALS.

 

6.4.2.      EXCEPT AS PROVIDED IN THE DECOMMISSIONING PLANNING CONTRACT, BUYER
SHALL BE RESPONSIBLE FOR ALL THIRD PARTY VENDOR COSTS AND EXPENSES INCURRED AND
RELATING TO WORK PERFORMED WITH RESPECT TO THE ZION ASSETS AT THE REQUEST OF
SELLER AFTER THE DATE HEREOF.

 

6.5.         FURTHER ASSURANCES; COOPERATION.

 

6.5.1.      SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, EACH OF THE
PARTIES WILL USE COMMERCIALLY REASONABLE EFFORTS TO TAKE, OR CAUSE TO BE TAKEN,
ALL ACTION, AND TO DO, OR CAUSE TO BE DONE, ALL THINGS NECESSARY, PROPER OR
ADVISABLE UNDER APPLICABLE LAWS TO CONSUMMATE AND MAKE EFFECTIVE THE SALE,
TRANSFER, CONVEYANCE AND ASSIGNMENT OF THE ZION ASSETS AND THE ASSIGNMENT OF THE
ASSUMED LIABILITIES  OR THE EXCLUSION OF THE EXCLUDED LIABILITIES PURSUANT TO
THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, USING COMMERCIALLY REASONABLE
EFFORTS TO ENSURE SATISFACTION OF THE CONDITIONS PRECEDENT TO EACH PARTY’S
OBLIGATIONS HEREUNDER, INCLUDING, WITHOUT LIMITATION, ALL REQUIRED REGULATORY
APPROVALS.  NOTWITHSTANDING ANYTHING IN THE PREVIOUS SENTENCE TO THE CONTRARY,
SELLER AND BUYER, BUYER’S PARENT AND

 

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GUARANTOR SHALL USE COMMERCIALLY REASONABLE EFFORTS TO OBTAIN ALL PERMITS AND
ENVIRONMENTAL PERMITS NECESSARY FOR BUYER TO ACQUIRE AND POSSESS THE ZION ASSETS
AND PERFORM DECOMMISSIONING ACTIVITIES AT THE ZION STATION SITE.  EXCEPT AS MAY
BE REQUIRED BY LAW, NEITHER BUYER, BUYER’S PARENT OR GUARANTOR NOR SELLER WILL,
WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHERS, ADVOCATE OR TAKE ANY ACTION
WHICH WOULD REASONABLY BE EXPECTED TO PREVENT OR MATERIALLY IMPEDE, INTERFERE
WITH OR DELAY THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR WHICH COULD
REASONABLY BE EXPECTED TO CAUSE, OR TO CONTRIBUTE TO CAUSING, THE OTHER PARTY OR
PARTIES TO RECEIVE LESS FAVORABLE REGULATORY TREATMENT THAN THAT SOUGHT BY THE
PARTY OR PARTIES.  EACH PARTY SHALL COOPERATE WITH THE OTHER PARTIES IN ALL
COMMERCIALLY REASONABLE EFFORTS TO LIFT ANY PRELIMINARY OR PERMANENT INJUNCTION
OR OTHER ORDER OR DECREE BY ANY FEDERAL OR STATE COURT OR GOVERNMENTAL AUTHORITY
THAT RESTRAINS OR PREVENTS THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
HEREBY. THE PARTIES SHALL COOPERATE AND EXERCISE COMMERCIALLY REASONABLE EFFORTS
TO ASSIST IN THE ESTABLISHMENT OF EFFECTIVE INTERFACES WITH LOCAL AND STATE OF
ILLINOIS AUTHORITIES IN AREAS SUCH AS EMERGENCY PLANNING AND SECURITY, AS WELL
AS IN THE GOVERNMENT RELATIONS ARENA

 

6.5.2.      FROM TIME TO TIME AFTER THE CLOSING DATE, SELLER WILL EXECUTE AND
DELIVER SUCH DOCUMENTS TO BUYER AS BUYER MAY REASONABLY REQUEST, AT BUYER’S
EXPENSE, IN ORDER TO MORE EFFECTIVELY CONSUMMATE THE SALE AND PURCHASE,
INCLUDING THE TRANSFER, CONVEYANCE AND ASSIGNMENT, OF THE ZION ASSETS OR TO MORE
EFFECTIVELY VEST IN BUYER SUCH TITLE TO THE ZION ASSETS, SUBJECT TO THE
PERMITTED ENCUMBRANCES.  FROM TIME TO TIME AFTER THE CLOSING DATE, WITHOUT
FURTHER CONSIDERATION, BUYER WILL, AT ITS OWN EXPENSE, EXECUTE AND DELIVER SUCH
DOCUMENTS TO SELLER AS SELLER MAY REASONABLY REQUEST IN ORDER TO EVIDENCE
BUYER’S ASSUMPTION OF THE ASSUMED LIABILITIES.

 

6.5.3.      DURING THE PERIOD FROM THE DATE HEREOF TO THE CLOSING DATE, THE
PARTIES SHALL COOPERATE WITH EACH OTHER TO DEVELOP A TRANSITION PLAN AND, AS
NECESSARY, MUTUALLY ACCEPTABLE AGREEMENTS, TO FACILITATE THE TRANSITION OF THE
INFORMATION SYSTEMS, COMPUTER APPLICATIONS AND PROCESSING OF DATA AT THE
FACILITIES ON AND FOLLOWING THE CLOSING DATE.

 

6.5.4.      TO THE EXTENT THAT SELLER’S RIGHTS UNDER ANY SELLER’S AGREEMENT MAY
NOT BE ASSIGNED WITHOUT THE CONSENT OF ANOTHER PERSON WHICH CONSENT HAS NOT BEEN
OBTAINED, THIS AGREEMENT SHALL NOT CONSTITUTE AN AGREEMENT TO ASSIGN THE SAME IF
AN ATTEMPTED ASSIGNMENT WOULD CONSTITUTE A BREACH THEREOF OR BE UNLAWFUL, AND
SELLER, SHALL USE COMMERCIALLY REASONABLE EFFORTS TO OBTAIN ANY SUCH REQUIRED
CONSENT(S) AS PROMPTLY AS POSSIBLE.  SELLER AND BUYER SHALL COOPERATE AND SHALL
EACH USE COMMERCIALLY REASONABLE EFFORTS FOR A REASONABLE PERIOD OF TIME AFTER
THE CLOSING TO OBTAIN AN ASSIGNMENT OF SUCH SELLER’S AGREEMENT TO BUYER.  IN THE
EVENT THAT ANY SUCH CONSENT TO ASSIGNMENT HAS NOT BEEN OBTAINED, THE PARTIES
AGREE TO PROCEED UNDER THIS AGREEMENT TO THE EXTENT PERMISSIBLE. THE PARTIES
SHALL EQUALLY SHARE THE EXPENSES INCURRED IN CONNECTION WITH THE ASSIGNMENT OF
SELLER’S AGREEMENTS; PROVIDED THAT BUYER SHALL BE SOLELY RESPONSIBLE FOR THE
PAYMENT OF

 

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ANY LICENSE FEE OR OTHER CHARGE REQUIRED TO BE PAID TO OBTAIN ANY REQUIRED
CONSENT FROM A THIRD PARTY IN CONNECTION WITH ANY SUCH ASSIGNMENT.

 

6.5.5.      DURING THE PERIOD FROM THE DATE HEREOF TO THE CLOSING DATE, BUYER
AND SELLER SHALL COOPERATE WITH EACH OTHER TO DEVELOP A TRANSITION PLAN AND, AS
NECESSARY, MUTUALLY ACCEPTABLE AGREEMENTS, TO PROVIDE SUCH SERVICES TO EACH
OTHER FOR A REASONABLE PERIOD OF TIME AFTER THE CLOSING DATE AS ARE REASONABLY
NECESSARY TO ENSURE THE CONTINUITY OF SUPPORT FOR ZION STATION OR OTHER
CONTINUING ACTIVITIES AT THE ZION STATION SITE AND THE ORDERLY COMPLETION OF
PROJECTS OR OTHER WORK IN PROGRESS THAT WOULD BE ADVERSELY AFFECTED IF THOSE
SERVICES WERE INTERRUPTED.

 

6.6.         PUBLIC STATEMENTS.

 

Upon or immediately following the execution and delivery of this Agreement, the
Parties will issue a joint press release or coordinated separate press releases
concerning this Agreement and the transactions contemplated hereby, in form and
substance to be mutually agreed.  Subsequent to the initial joint press release
or separate press releases contemplated by the preceding sentence and prior to
the Closing Date, the Parties shall not issue any further press release or other
public disclosure (other than required filings and other required public
statements or testimony before regulatory authorities) with respect to this
Agreement or the transactions contemplated hereby without first affording the
non-disclosing Party the opportunity to review and comment on such press release
or public disclosure, except as may be required by applicable Law or stock
exchange rules.   On or immediately following the Closing Date, the Parties will
issue a joint press release or coordinated separate press releases concerning
the consummation of the transactions contemplated hereby, in form and substance
to be mutually agreed.  The Parties shall reasonably cooperate in matters
relating to the content and timing of public announcements and other public
disclosures (other than required filings and other required public statements or
testimony before regulatory authorities) relating to this Agreement or the
transactions contemplated hereby.

 

6.7.         CONSENTS AND APPROVALS.

 

6.7.1.      SELLER AND BUYER SHALL EACH FILE OR CAUSE TO BE FILED WITH THE
FEDERAL TRADE COMMISSION AND THE DEPARTMENT OF JUSTICE ANY NOTIFICATIONS
REQUIRED TO BE FILED UNDER THE HSR ACT AND THE RULES AND REGULATIONS PROMULGATED
THEREUNDER WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY.  THE PARTIES
SHALL CONSULT WITH EACH OTHER, AS TO THE APPROPRIATE TIME OF FILING SUCH
NOTIFICATIONS AND SHALL AGREE UPON THE TIMING OF SUCH FILINGS, AND RESPOND
PROMPTLY TO ANY REQUESTS FOR ADDITIONAL INFORMATION MADE BY EITHER OF SUCH
AGENCIES.  THE PARTIES SHALL USE THEIR COMMERCIALLY REASONABLE EFFORTS TO CAUSE
THE WAITING PERIODS UNDER THE HSR ACT TO TERMINATE OR EXPIRE AT THE EARLIEST
POSSIBLE DATE AFTER THE DATE OF FILING. EACH PARTY WILL BEAR ITS OWN COSTS FOR
THE PREPARATION AND FILING OF ANY NOTIFICATION AND REPORT REQUIRED BY HSR OR
RESPONSE TO ANY REQUEST FOR ADDITIONAL INFORMATION.

 

6.7.2.      AS PROMPTLY AS PRACTICABLE AFTER THE DATE OF THIS AGREEMENT, BUYER
AND SELLER, AS APPLICABLE, SHALL MAKE THE FILINGS NECESSARY TO OBTAIN THE
REQUIRED REGULATORY APPROVALS.  IN FULFILLING THEIR RESPECTIVE OBLIGATIONS UNDER
THIS SECTION 6.7.2,

 

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BUYER AND SELLER SHALL EACH USE COMMERCIALLY REASONABLE EFFORTS TO EFFECT OR
CAUSE TO BE EFFECTED ANY SUCH FILINGS WITHIN THIRTY (30) DAYS AFTER THE DATE OF
THIS AGREEMENT.  PRIOR TO ANY PARTY’S SUBMISSION OF THE APPLICATIONS
CONTEMPLATED BY THIS SECTION 6.7.2, THE SUBMITTING PARTY SHALL PROVIDE A DRAFT
OF SUCH APPLICATION TO THE OTHER PARTY FOR REVIEW AND COMMENT AND THE SUBMITTING
PARTY SHALL IN GOOD FAITH CONSIDER ANY REVISIONS REASONABLY REQUESTED BY THE
REVIEWING PARTY.  EACH PARTY WILL BEAR ITS OWN COSTS OF THE PREPARATION AND
REVIEW OF ANY SUCH FILINGS.

 

6.7.3.      AS PROMPTLY AS PRACTICABLE AFTER THE DATE OF THIS AGREEMENT, BUYER
AND SELLER SHALL FILE WITH NRC AN APPLICATION REQUESTING CONSENT UNDER
SECTION 184 OF THE ATOMIC ENERGY ACT AND 10 C.F.R. § 50.80 FOR THE TRANSFER OF
THE NRC LICENSES FROM SELLER TO BUYER, AND APPROVAL OF ANY CONFORMING LICENSE
AMENDMENTS OR OTHER RELATED APPROVALS.  IN FULFILLING THEIR RESPECTIVE
OBLIGATIONS SET FORTH IN THE IMMEDIATELY PRECEDING SENTENCE, EACH OF BUYER AND
SELLER SHALL USE ITS COMMERCIALLY REASONABLE EFFORTS TO EFFECT ANY SUCH FILING
WITHIN SIXTY (60) DAYS AFTER THE DATE OF THIS AGREEMENT.  EACH PARTY WILL BEAR
ITS OWN COSTS OF THE PREPARATION OF ANY SUCH FILING AND NRC FEES SHALL BE
EQUALLY SHARED BY THE PARTIES.  THEREAFTER, BUYER AND SELLER SHALL COOPERATE
WITH ONE ANOTHER TO FACILITATE NRC REVIEW OF THE APPLICATION BY PROVIDING THE
NRC STAFF WITH SUCH DOCUMENTS OR INFORMATION THAT THE NRC STAFF MAY REASONABLY
REQUEST OR REQUIRE ANY OF THE PARTIES TO PROVIDE OR GENERATE.

 

6.7.4.      SELLER AND BUYER, BUYER’S PARENT AND GUARANTOR SHALL COOPERATE WITH
EACH OTHER AND, AS PROMPTLY AS PRACTICABLE AFTER THE DATE OF THIS AGREEMENT:
(I) PREPARE AND MAKE WITH ANY OTHER GOVERNMENTAL AUTHORITY HAVING JURISDICTION
OVER SELLER, BUYER, BUYER’S PARENT OR THE ZION ASSETS, ALL FILINGS REQUIRED TO
BE MADE WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY (INCLUDING THOSE
SPECIFIED ABOVE); (II) EFFECT ALL APPLICATIONS, NOTICES, PETITIONS AND FILINGS
AND EXECUTE ALL AGREEMENTS AND DOCUMENTS; (III) USE COMMERCIALLY REASONABLE
EFFORTS TO OBTAIN THE TRANSFER OR REISSUANCE TO BUYER OF ALL PERMITS,
ENVIRONMENTAL PERMITS, CONSENTS, APPROVALS AND AUTHORIZATIONS OF ALL
GOVERNMENTAL AUTHORITIES; AND (IV) USE COMMERCIALLY REASONABLE EFFORTS TO OBTAIN
ALL CONSENTS, APPROVALS AND AUTHORIZATIONS OF ALL OTHER PARTIES, IN THE CASE OF
EACH OF THE FOREGOING CLAUSES (I), (II) AND (III), NECESSARY OR ADVISABLE TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (INCLUDING THE
REQUIRED REGULATORY APPROVALS)  OR REQUIRED BY THE TERMS OF ANY NOTE, BOND,
MORTGAGE, INDENTURE, DEED OF TRUST, LICENSE, FRANCHISE, PERMIT, CONCESSION,
CONTRACT, LEASE OR OTHER INSTRUMENT TO WHICH SELLER OR BUYER, BUYER’S PARENT OR
GUARANTOR IS A PARTY OR BY WHICH ANY OF THEM IS BOUND.  THE PARTIES SHALL
RESPOND PROMPTLY TO ANY REQUESTS FOR ADDITIONAL INFORMATION MADE BY SUCH
AGENCIES, USE THEIR RESPECTIVE COMMERCIALLY REASONABLE EFFORTS TO PARTICIPATE IN
ANY HEARINGS, SETTLEMENT PROCEEDINGS OR OTHER PROCEEDINGS ORDERED WITH RESPECT
TO THE APPLICATIONS, AND USE THEIR RESPECTIVE COMMERCIALLY REASONABLE EFFORTS TO
CAUSE REGULATORY APPROVAL TO BE OBTAINED AT THE EARLIEST POSSIBLE DATE AFTER THE
DATE OF FILING.   EXCEPT AS OTHERWISE PROVIDED IN SECTION 6.7.1, THE PARTIES
SHALL EQUALLY SHARE COSTS OF THE PREPARATION AND REVIEW OF ANY FILING WITH ANY
GOVERNMENTAL AUTHORITY, AND THE PARTIES SHALL EQUALLY SHARE THE COST OF ANY
FILING FEES OR OTHER CHARGES PAYABLE TO ANY GOVERNMENTAL AUTHORITY IN CONNECTION
THEREWITH.  SELLER

 

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AND BUYER SHALL HAVE THE RIGHT TO REVIEW IN ADVANCE ALL CHARACTERIZATIONS OF THE
INFORMATION RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT WHICH
APPEAR IN ANY FILING MADE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED
HEREBY AND THE FILING PARTY SHALL CONSIDER IN GOOD FAITH ANY REVISIONS
REASONABLY REQUESTED BY THE NON-FILING PARTY.

 

6.7.5.      BUYER SHALL HAVE THE PRIMARY RESPONSIBILITY FOR SECURING THE
TRANSFER, REISSUANCE OR PROCUREMENT OF THE PERMITS AND ENVIRONMENTAL PERMITS
EFFECTIVE AS OF THE CLOSING DATE.  SELLER SHALL COOPERATE WITH BUYER’S EFFORTS
IN THIS REGARD AND ASSIST IN ANY TRANSFER OR REISSUANCE OF A PERMIT OR
ENVIRONMENTAL PERMIT HELD BY SELLER OR THE PROCUREMENT OF ANY OTHER PERMIT OR
ENVIRONMENTAL PERMIT WHEN SO REQUESTED BY BUYER.  IN THE EVENT THAT BUYER IS
UNABLE, DESPITE ITS COMMERCIALLY REASONABLE EFFORTS, TO OBTAIN A TRANSFER OR
REISSUANCE OF ONE OR MORE OF THE PERMITS OR ENVIRONMENTAL PERMITS AS OF THE
CLOSING DATE, BUYER MAY USE THE APPLICABLE PERMIT OR ENVIRONMENTAL PERMIT ISSUED
TO SELLER, PROVIDED (I) SUCH USE IS NOT UNLAWFUL; (II) BUYER NOTIFIES SELLER
PRIOR TO THE CLOSING DATE; (III) BUYER CONTINUES TO MAKE COMMERCIALLY REASONABLE
EFFORTS TO OBTAIN A TRANSFER OR REISSUANCE OF SUCH PERMIT OR ENVIRONMENTAL
PERMIT AFTER THE CLOSING DATE; AND (IV) BUYER INDEMNIFIES SELLER FOR ANY LOSSES,
CLAIMS OR PENALTIES SUFFERED BY SELLER IN CONNECTION WITH THE  PERMIT OR
ENVIRONMENTAL PERMIT THAT IS NOT TRANSFERRED OR REISSUED AS OF THE CLOSING DATE
RESULTING FROM BUYER’S OWNERSHIP, POSSESSION OR USE OF THE ZION ASSETS ON AND
FOLLOWING THE CLOSING DATE.

 

6.8.         BROKERAGE FEES AND COMMISSIONS.

 

Seller, on the one hand, and Buyer, Buyer’s Parent and Guarantor, on the other
hand, each represents and warrants to the other that no broker, finder or other
Person is entitled to any brokerage fees, commissions or finder’s fees in
connection with the transactions contemplated hereby by reason of any action
taken by the Party making such representation.  Seller, on the one hand, and
Buyer, Buyer’s Parent and Guarantor, on the other hand, will pay to the other or
otherwise discharge, and will indemnify and hold the other harmless from and
against, any and all claims or liabilities for all brokerage fees, commissions
and finder’s fees incurred by reason of any action taken by the indemnifying
party.

 

6.9.         TAX MATTERS.

 

6.9.1.      ALL TRANSFER TAXES INCURRED IN CONNECTION WITH THIS AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE SHARED EQUALLY BY BUYER AND
SELLER.  BUYER AND SELLER WILL FILE, TO THE EXTENT REQUIRED BY APPLICABLE LAW,
ALL NECESSARY TAX RETURNS AND OTHER DOCUMENTATION WITH RESPECT TO ALL SUCH
TRANSFER TAXES, AND, IF REQUIRED BY APPLICABLE LAW, WILL EACH JOIN IN THE
EXECUTION OF ANY SUCH TAX RETURNS OR OTHER DOCUMENTATION.  TO THE EXTENT BUYER
AND SELLER CANNOT AGREE WITH RESPECT TO ANY ITEM TO BE INCLUDED ON SUCH TAX
RETURN, SUCH DISPUTE SHALL BE RESOLVED IN THE MANNER PROVIDED FOR IN
SECTION 6.9.5.  PRIOR TO THE CLOSING DATE, BUYER WILL PROVIDE TO SELLER, TO THE
EXTENT POSSIBLE, AN APPROPRIATE EXEMPTION CERTIFICATE IN CONNECTION WITH THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, DUE FROM EACH APPLICABLE
TAXING AUTHORITY, AND THE PARTIES SHALL COMPLY

 

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WITH ALL REQUIREMENTS AND USE COMMERCIALLY REASONABLE EFFORTS TO SECURE
APPLICABLE SALES TAX EXEMPTIONS FOR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.

 

6.9.2.      WITH RESPECT TO TAXES TO BE PRORATED IN ACCORDANCE WITH SECTION 3.3,
BUYER SHALL PREPARE AND TIMELY FILE ALL TAX RETURNS REQUIRED TO BE FILED AFTER
THE CLOSING WITH RESPECT TO THE ZION ASSETS, IF ANY, AND SHALL DULY AND TIMELY
PAY ALL SUCH TAXES SHOWN TO BE DUE ON SUCH TAX RETURNS.  BUYER’S PREPARATION OF
ANY SUCH TAX RETURNS SHALL BE SUBJECT TO SELLER’S APPROVAL TO THE EXTENT THAT
SUCH RETURNS RELATE TO ANY PERIOD, ALLOCATION OR OTHER AMOUNT FOR WHICH SELLER
IS RESPONSIBLE.  BUYER SHALL MAKE SUCH TAX RETURNS AND ALL SCHEDULES AND WORKING
PAPERS SUPPORTING SUCH TAX RETURNS AVAILABLE FOR SELLER’S REVIEW AND APPROVAL NO
LATER THAN THIRTY (30) BUSINESS DAYS PRIOR TO THE DUE DATE FOR FILING SUCH TAX
RETURN.  SELLER SHALL RESPOND NO LATER THAN TEN (10) BUSINESS DAYS PRIOR TO THE
DUE DATE FOR FILING SUCH TAX RETURN.  SUBJECT TO SECTION 6.9.5, NOT LESS THAN
FIVE (5) BUSINESS DAYS PRIOR TO THE DUE DATE OF ANY SUCH TAX RETURN, SELLER
SHALL PAY TO BUYER ITS PROPORTIONATE SHARE OF THE AMOUNT SHOWN AS DUE ON SUCH
TAX RETURN AS DETERMINED IN ACCORDANCE WITH SECTION 3.3.  IN THE EVENT BUYER AND
SELLER CANNOT AGREE AS TO THE PREPARATION OR THE REPORTING OF ANY MATERIAL ITEM
ON A TAX RETURN TO BE FILED BY BUYER, THE DISPUTE SHALL BE SETTLED IN THE MANNER
PROVIDED BY SECTION 6.9.5 AND THE COST OF SUCH INDEPENDENT ACCOUNTING FIRM SHALL
BE BORNE EQUALLY BY THE PARTIES; PROVIDED, HOWEVER, THAT IF THE INDEPENDENT
ACCOUNTING FIRM HAS NOT MADE A DETERMINATION AS OF THE DATE THAT SUCH TAX RETURN
IS REQUIRED TO BE FILED, SUCH TAX RETURN SHALL BE FILED IN A MANNER CONSISTENT
WITH SELLER’S POSITION; PROVIDED, FURTHER, THAT WITH RESPECT TO ANY SUCH TAX
RETURN THAT IS FILED PRIOR TO A DETERMINATION BY THE INDEPENDENT ACCOUNTING
FIRM, SELLER AND BUYER SHALL TAKE ALL COMMERCIALLY REASONABLE STEPS TO AMEND
SUCH TAX RETURN, IF NECESSARY, TO REFLECT ANY MATERIAL DETERMINATION MADE BY THE
INDEPENDENT ACCOUNTING FIRM.

 

6.9.3.      SELLER SHALL CAUSE THE TRUSTEE OF THE QDF TO FILE THE TAX RETURNS
FOR THE QDF FOR ANY PERIODS ENDING ON OR BEFORE THE CLOSING DATE.   PRIOR TO THE
CLOSING DATE, SELLER SHALL CAUSE THE TRUSTEE OF THE QDF TO PAY ESTIMATED INCOME
TAXES FOR THE TAXABLE PERIOD THAT ENDS ON THE CLOSING DATE IN AN AMOUNT EQUAL TO
THE ESTIMATED INCOME TAX LIABILITY OF THE QDF FOR THE TAXABLE PERIOD THAT ENDS
ON THE CLOSING DATE.  TO THE EXTENT THE AMOUNT OF ESTIMATED INCOME TAXES PAID
PURSUANT TO THIS SECTION 6.9.3 IS LESS THAN THE INCOME TAX LIABILITY OF THE QDF
FOR THE TAXABLE PERIOD THAT ENDS ON THE CLOSING DATE, ANY SUCH DEFICIENCY WILL
BE PAID BY BUYER’S QDF.  TO THE EXTENT THE AMOUNT OF ESTIMATED INCOME TAXES IS
GREATER THAN THE INCOME TAX LIABILITY OF THE QDF FOR THE TAXABLE PERIOD THAT
ENDS ON THE CLOSING DATE, ANY REFUND OF SUCH OVERPAYMENT WILL BE TRANSFERRED BY
SELLER OR THE QDF TO BUYER’S QDF AND TREATED AS ADDITIONAL QDF DECOMMISSIONING
FUNDS TRANSFERRED TO BUYER.

 

6.9.4.      EACH OF THE PARTIES SHALL PROVIDE THE OTHER WITH SUCH ASSISTANCE AS
MAY REASONABLY BE REQUESTED BY THE OTHER PARTY IN CONNECTION WITH THE
PREPARATION OF ANY TAX RETURN, ANY AUDIT OR OTHER EXAMINATION BY ANY TAXING
AUTHORITY, OR ANY JUDICIAL OR ADMINISTRATIVE PROCEEDINGS RELATING TO LIABILITY
FOR TAXES OR EFFECTUATING THE TERMS

 

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OF THIS AGREEMENT, AND EACH WILL RETAIN AND PROVIDE THE REQUESTING PARTY WITH
ANY RECORDS OR INFORMATION WHICH MAY BE RELEVANT TO SUCH RETURN, AUDIT OR
EXAMINATION, PROCEEDINGS OR DETERMINATION.  ANY INFORMATION OBTAINED PURSUANT TO
THIS SECTION 6.9.4 OR PURSUANT TO ANY OTHER SECTION HEREOF PROVIDING FOR THE
SHARING OF INFORMATION OR REVIEW OF ANY TAX RETURN OR OTHER SCHEDULE RELATING TO
TAXES SHALL BE KEPT CONFIDENTIAL BY THE PARTIES, EXCEPT TO THE EXTENT SUCH
INFORMATION IS REQUIRED TO BE DISCLOSED BY LAW.

 

6.9.5.      IN THE EVENT THAT A DISPUTE ARISES BETWEEN SELLER AND BUYER AS TO
THE PREPARATION OR THE REPORTING OF ANY MATERIAL ITEM ON A TAX RETURN TO BE
FILED BY BUYER OR THE ALLOCATION OF SUCH TAXES BETWEEN SELLER AND BUYER, THE
PARTIES SHALL ATTEMPT IN GOOD FAITH TO RESOLVE SUCH DISPUTE, AND ANY AGREED
AMOUNT SHALL BE PAID TO THE APPROPRIATE PARTY WITHIN TEN (10) BUSINESS DAYS
AFTER THE DATE ON WHICH THE PARTIES REACH AGREEMENT.  IF A DISPUTE IS NOT
RESOLVED WITHIN THIRTY (30) DAYS AFTER A PARTY HAVING PROVIDED THE OTHER PARTY
WRITTEN NOTICE OF A DISPUTE, THE PARTIES SHALL SUBMIT THE DISPUTE FOR
DETERMINATION AND RESOLUTION TO DELOITTE & TOUCHE LLP OR SUCH OTHER MUTUALLY
AGREEABLE FIRM OF CPAS (WHICH IS NOT SELLER’S, BUYER’S OR BUYER’S PARENTS’
INDEPENDENT ACCOUNTANTS) OF RECOGNIZED NATIONAL STANDING (THE “INDEPENDENT
ACCOUNTING FIRM”), WHICH SHALL BE INSTRUCTED TO DETERMINE AND REPORT TO THE
PARTIES IN WRITING, WITHIN THIRTY (30) DAYS AFTER SUCH SUBMISSION, UPON SUCH
DISPUTED AMOUNT, AND SUCH WRITTEN REPORT SHALL BE FINAL, CONCLUSIVE AND BINDING
ON THE PARTIES.  THE INDEPENDENT ACCOUNTING FIRM SHALL ACT AS AN EXPERT AND NOT
AS AN ARBITRATOR AND SHALL MAKE FINDINGS ONLY WITH RESPECT TO THE REMAINING
DISPUTES SO SUBMITTED TO IT (AND NOT BY INDEPENDENT REVIEW).  NOTWITHSTANDING
ANYTHING IN THIS AGREEMENT TO THE CONTRARY, THE FEES AND EXPENSES OF THE
INDEPENDENT ACCOUNTING FIRM IN RESOLVING THE DISPUTE SHALL BE BORNE EQUALLY BY
BUYER AND SELLER.  ANY PAYMENT REQUIRED TO BE MADE AS A RESULT OF THE RESOLUTION
OF THE DISPUTE BY THE INDEPENDENT ACCOUNTING FIRM SHALL BE MADE WITHIN TEN
(10) DAYS AFTER SUCH RESOLUTION, TOGETHER WITH ANY INTEREST DETERMINED BY THE
INDEPENDENT ACCOUNTING FIRM TO BE APPROPRIATE.  SUBMISSION OF A DISPUTE TO THE
INDEPENDENT ACCOUNTING FIRM SHALL NOT RELIEVE ANY PARTY FROM ANY OBLIGATION
UNDER THIS AGREEMENT TO TIMELY FILE A TAX RETURN OR PAY A TAX.

 

6.9.6.      THE PARTIES SHALL FILE THEIR RESPECTIVE TAX RETURNS CONSISTENT WITH
(I) THE PRIVATE LETTER RULING RECEIVED BY THE PARTIES WITH RESPECT TO THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND (II) THE REPRESENTATIONS MADE BY
THE PARTIES TO THE IRS IN CONNECTION WITH THE REQUEST FOR SUCH PRIVATE LETTER
RULING.

 

6.10.       ADVICE OF CHANGES.

 

6.10.1.    PRIOR TO THE CLOSING DATE, SELLER WILL PROMPTLY ADVISE BUYER, BUYER’S
PARENT OR GUARANTOR, AND BUYER, BUYER’S PARENT OR GUARANTOR WILL PROMPTLY ADVISE
SELLER, IN WRITING OF ANY CHANGE OR CIRCUMSTANCE ARISING, OR BEING DISCOVERED,
AFTER THE DATE HEREOF THAT WOULD CONSTITUTE A MATERIAL BREACH OF ANY
REPRESENTATION, WARRANTY OR COVENANT OF THE ADVISING OR ANY OTHER PARTY UNDER
THIS AGREEMENT.  IF BUYER, BUYER’S PARENT OR GUARANTOR ADVISES SELLER, OR IF
SELLER ADVISES BUYER, BUYER’S PARENT OR GUARANTOR OF ANY MATERIAL BREACH OF A
REPRESENTATION, WARRANTY OR

 

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COVENANT OF SELLER CONTAINED IN THIS AGREEMENT, BUYER, BUYER’S PARENT OR
GUARANTOR SHALL HAVE THE RIGHT TO TERMINATE THIS AGREEMENT IN ACCORDANCE WITH
AND SUBJECT TO THE PROVISIONS OF SECTION 9.1.6.   IF SELLER ADVISES BUYER,
BUYER’S PARENT OR GUARANTOR, OF IF BUYER, BUYER’S PARENT OR GUARANTOR ADVISES
SELLER, OF ANY MATERIAL BREACH OF A REPRESENTATION, WARRANTY OR COVENANT OF
BUYER, BUYER’S PARENT OR GUARANTOR CONTAINED IN THIS AGREEMENT, SELLER SHALL
HAVE THE RIGHT TO TERMINATE THIS AGREEMENT IN ACCORDANCE WITH AND SUBJECT TO THE
PROVISIONS OF SECTION  9.1.7.  IF A PARTY FAILS TO EXERCISE ITS TERMINATION
RIGHT ON OR BEFORE THE CLOSING DATE, THE WRITTEN NOTICE UNDER THIS SECTION 6.10
WILL BE DEEMED TO HAVE AMENDED THIS AGREEMENT, INCLUDING THE APPROPRIATE
SCHEDULE, OR TO HAVE QUALIFIED THE REPRESENTATIONS AND WARRANTIES CONTAINED IN
ARTICLES 4 AND 5.  IN ADDITION TO THE ACTIONS PERMITTED BY SECTION 6.1, SELLER
SHALL BE ENTITLED TO AMEND, SUBSTITUTE OR OTHERWISE MODIFY ANY SELLER’S
AGREEMENT TO THE EXTENT THAT SUCH SELLER’S AGREEMENT EXPIRES BY ITS TERMS PRIOR
TO THE CLOSING DATE OR IS TERMINABLE WITHOUT LIABILITY TO BUYER ON OR AFTER THE
CLOSING DATE (OTHER THAN AN AMENDMENT THAT WOULD EXTEND THE TERM THEREOF FOR A
NEW TERM OF YEARS IN EXCESS OF THE THEN CURRENT TERM), OR IF THE TERMS AND
CONDITIONS OF SUCH MODIFIED SELLER’S AGREEMENT CONSTITUTING THE ASSUMED
LIABILITIES ARE ON TERMS AND CONDITIONS NOT LESS FAVORABLE TO BUYER THAN THE
ORIGINAL SELLER’S AGREEMENT.

 

6.10.2.    AS OF A DATE NO MORE THAN ONE (1) BUSINESS DAY PRIOR TO THE CLOSING,
EACH OF THE PARTIES SHALL PROVIDE EACH OTHER PARTY WITH ANY AND ALL REVISIONS,
MODIFICATIONS AND UPDATES TO THE SCHEDULES SUCH THAT THE SCHEDULES WILL BE TRUE
AND CORRECT AS OF SUCH DATE.  TO THE EXTENT THAT SUCH REVISIONS, MODIFICATIONS
AND UPDATES DO NOT, EITHER INDIVIDUALLY OR IN THE AGGREGATE, HAVE A SELLER
MATERIAL ADVERSE EFFECT OR A BUYER MATERIAL ADVERSE EFFECT, AS THE CASE MAY BE,
THEN SUCH REVISIONS, MODIFICATIONS AND UPDATES WILL BE DEEMED TO BE
AUTOMATICALLY INCORPORATED INTO THE SCHEDULES.

 

6.11.       EMPLOYEES.

 

ON OR BEFORE THE CLOSING DATE, BUYER MAY, IN ITS DISCRETION, MAKE OFFERS OF
EMPLOYMENT TO PERSONS EMPLOYED BY SELLER OR ITS AFFILIATES AT THE ZION STATION
SITE FOR EMPLOYMENT WITH BUYER TO COMMENCE ON OR FOLLOWING THE CLOSING DATE. 
ANY SUCH PERSON WHO RECEIVES AND ACCEPTS ANY SUCH OFFER OF EMPLOYMENT WITH BUYER
SHALL BECOME A TRANSFERRED EMPLOYEE AS OF THE CLOSING DATE.  ON OR BEFORE THE
CLOSING DATE, BUYER, BUYER’S PARENT AND SELLER SHALL EXECUTE AND DELIVER THE
LEASED PERSONNEL AGREEMENT, WHICH SHALL GOVERN MATTERS RELATING TO ZION
EMPLOYEES.

 

6.12.       DECOMMISSIONING FUNDS.

 

6.12.1.    BETWEEN THE DATE HEREOF AND THE CLOSING, SELLER WILL MAKE SUCH
DEPOSITS FROM TIME TO TIME TO ITS QDF AND ITS NDF OF THE AMOUNTS OF
DECOMMISSIONING COSTS, IF ANY, COLLECTED FROM CUSTOMERS AS DETERMINED BY THE
ICC; PROVIDED, HOWEVER, THAT ANY SUCH DEPOSITS TO THE QDF SHALL NOT EXCEED THE
MAXIMUM AMOUNTS PERMITTED TO BE CONTRIBUTED TO THE QDF UNDER CODE SECTION 468A
AND ANY TAX RULING ISSUED TO SELLER BY THE IRS.

 

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6.12.2.    PRIOR TO THE CLOSING DATE, SELLER WILL WITHDRAW FROM THE NDF
AGGREGATE AMOUNTS SUFFICIENT TO REIMBURSE SELLER FOR (I) COSTS OF SAFSTOR AND
DECOMMISSIONING PLANNING EXPENSES THROUGH THE CLOSING DATE, PROVIDED THAT SUCH
AMOUNT SHALL BE NOT MORE THAN FORTY-TWO MILLION DOLLARS ($42,000,000) AS OF
DECEMBER 31, 2006, AND NOT MORE THAN ONE MILLION DOLLARS ($1,000,000) PER MONTH
THEREAFTER, (II) COSTS INCURRED UNDER THE DECOMMISSIONING PLANNING CONTRACT,
(III) TAXES INCURRED ON GAINS REALIZED BY THE NDF ON OR PRIOR TO THE CLOSING
DATE, (IV) ANY EXPENSES INCURRED BY SELLER BY REASON OF REQUIREMENTS OF
APPLICABLE LAW THAT ARE REIMBURSABLE FROM THE NDF, AND  (V) ANY EXIGENT OR
EMERGING EXPENSES INCURRED BY SELLER ON OR BEFORE THE CLOSING DATE AND
REIMBURSABLE FROM THE NDF, SUBJECT TO PRIOR DISCUSSIONS WITH BUYER.   PRIOR TO
THE CLOSING DATE, AFTER GIVING EFFECT TO THE WITHDRAWALS CONTEMPLATED BY THE
PRECEDING SENTENCE, SELLER WILL TRANSFER ASSETS FROM THE NDF INTO THE QDF NOT TO
EXCEED THE MAXIMUM AMOUNT PERMITTED UNDER CODE SECTION 468A, THE TREASURY
REGULATIONS, AND ANY TAX RULING ISSUED TO SELLER BY THE IRS, SUBJECT TO THE
REQUIREMENTS OF SECTION 6.12.3.

 

6.12.3.    NOTWITHSTANDING THE PROVISIONS OF SECTION 6.12.2, SELLER SHALL RETAIN
IN THE NDF AS OF THE CLOSING (I) ASSETS HAVING AN AGGREGATE VALUE EQUAL TO THE
SUM OF TWENTY-FIVE MILLION DOLLARS ($25,000,000), PLUS AN AMOUNT EQUAL TO THE
TAXES INCURRED ON GAINS REALIZED BY THE NDF ON OR PRIOR TO THE CLOSING DATE, IF
NOT PREVIOUSLY WITHDRAWN PURSUANT TO SECTION  6.12.2, PLUS (II) IF AND TO THE
EXTENT THAT THE ASSETS DESCRIBED IN THE PRECEDING CLAUSE ARE ASSETS OTHER THAN
CASH, ADDITIONAL ASSETS HAVING A VALUE, AS DETERMINED BY SELLER, SUFFICIENT TO
COMPENSATE THE NDF FOR THE TAXES THAT WOULD BE PAID ON UNREALIZED GAINS ON SUCH
ASSETS IF THEY WERE LIQUIDATED BY THE NDF ON THE CLOSING DATE.  IF AND TO THE
EXTENT THAT THE ASSETS IN THE NDF ARE INSUFFICIENT TO SATISFY THE REQUIREMENTS
OF THE PRECEDING SENTENCE AND SECTION 6.12.2, SELLER MAY WITHDRAW THE DEFICIENCY
FROM THE QDF ON OR PRIOR TO THE CLOSING DATE AND CONTRIBUTE SUCH WITHDRAWN
ASSETS TO THE NDF TO THE EXTENT PERMITTED BY CODE SECTION 468A, THE TREASURY
REGULATIONS, AND SELLER’S DECOMMISSIONING TRUST AGREEMENTS.

 

6.12.4.    ON OR BEFORE THE CLOSING DATE, BUYER WILL ESTABLISH THE POST-CLOSING
DECOMMISSIONING TRUST AGREEMENT, WHICH SHALL INCLUDE THE PROVISIONS SET FORTH IN
EXHIBIT L.  BUYER SHALL NOT AMEND THE POST-CLOSING NUCLEAR DECOMMISSIONING TRUST
AGREEMENT AT ANY TIME BEFORE OR AFTER THE CLOSING DATE TO MODIFY THE PROVISIONS
SET FORTH IN EXHIBIT L WITHOUT THE PRIOR WRITTEN CONSENT OF SELLER, WHICH
CONSENT SHALL NOT BE UNREASONABLY WITHHELD. ON OR PRIOR TO THE CLOSING DATE,
BUYER WILL (A) CREATE AND MAINTAIN THE BUYER QDF IN ACCORDANCE WITH NRC
REQUIREMENTS AND IN COMPLIANCE WITH THE REQUIREMENTS OF SECTION 468A OF THE CODE
AND THE TREASURY REGULATIONS AND (B) CREATE AND MAINTAIN THE BUYER NDF IN
ACCORDANCE WITH NRC REQUIREMENTS.  ON THE CLOSING DATE, AFTER GIVING EFFECT TO
THE REQUIREMENTS OF SECTIONS 6.12.2 AND 6.12.3, SELLER SHALL CAUSE TO BE
TRANSFERRED TO THE BUYER QDF ALL OF THE ASSETS OF THE QDF.  IN THE EVENT THAT
ANY FUNDS REMAIN IN THE NDF AFTER GIVING EFFECT TO THE REQUIREMENTS OF SECTIONS
6.12.2 AND 6.12.3, SUCH FUNDS SHALL BE TRANSFERRED TO THE BUYER NDF.

 

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6.12.5.    ON OR PRIOR TO THE CLOSING DATE, BUYER SHALL CREATE AND MAINTAIN A
THIRD DECOMMISSIONING TRUST THAT IS SEGREGATED FROM THE BUYER NDF AND BUYER QDF
(THE “BUYER BACKUP NDT”).  THE BUYER BACKUP NDT SHALL SERVE AS AN ADDITIONAL OR
BACKUP DECOMMISSIONING FUNDING ASSURANCE FOR ZION STATION.  THE BUYER BACKUP NDT
WILL BE AN OBLIGEE OF THE IRREVOCABLE LETTER OF CREDIT AND WILL HOLD THE
DISPOSAL CAPACITY ASSET.  ANY PAYMENTS MADE PURSUANT TO THE IRREVOCABLE LETTER
OF CREDIT OR CASH COLLATERAL PROVIDED IN LIEU OF THE IRREVOCABLE LETTER OF
CREDIT ARE TO BE PAID TO AND HELD BY THE BUYER BACKUP NDT.

 

6.12.6.    BUYER SHALL TAKE ALL STEPS NECESSARY TO SATISFY ANY REQUIREMENTS
IMPOSED BY THE NRC REGARDING THE DECOMMISSIONING FUNDS, IN A MANNER SUFFICIENT
TO OBTAIN NRC APPROVAL OF THE TRANSFER OF THE NRC LICENSES FROM SELLER TO BUYER.

 

6.12.7.    THE PARTIES SHALL NOT TAKE ANY ACTIONS THAT WOULD CAUSE THE ACTUAL
TAX CONSEQUENCES OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT TO DIFFER
FROM OR BE INCONSISTENT WITH THE PRIVATE LETTER RULINGS SET FORTH IN THE
REQUIRED REGULATORY APPROVALS.  BUYER SHALL MAINTAIN THE BUYER QDF IN COMPLIANCE
WITH THE REQUIREMENTS OF CODE SECTION 468A AND THE APPLICABLE TREASURY
REGULATIONS THROUGHOUT THE PERIOD BEGINNING ON THE CLOSING DATE AND ENDING UPON
THE PUT OPTION CLOSING.

 

6.12.8.    SELLER SHALL CAUSE THE TRUSTEE OF THE QDF AND THE NDF TO PAY FINAL
EXPENSES FOR TRUSTEE AND INVESTMENT MANAGEMENT FEES AND OTHER ADMINISTRATIVE
EXPENSES OF THE QDF AND THE NDF RELATING TO TRANSACTIONS ON OR PRIOR TO THE
CLOSING DATE TO THE EXTENT PRACTICABLE BEFORE THE CLOSING DATE.  SELLER SHALL
CAUSE THE TRUSTEE OF THE QDF AND THE NDF TO NOTIFY BUYER IN WRITING OF ANY SUCH
QDF AND NDF EXPENSES DUE ON OR AFTER THE CLOSING DATE.  BUYER SHALL DIRECT THE
TRUSTEE OF THE BUYER QDF AND THE BUYER NDF TO PAY THE TAXES (OTHER THAN TAXES
FOR WHICH PROVISION HAS BEEN MADE THROUGH ASSETS RETAINED BY THE NDF PURSUANT TO
SECTION 6.12.3) AND EXPENSES IDENTIFIED IN THE PRECEDING SENTENCE TO THE EXTENT
NOT PAID BEFORE THE CLOSING DATE.  BUYER SHALL ENSURE THAT THE POST-CLOSING
DECOMMISSIONING TRUST AGREEMENT ALLOWS FOR THE PAYMENT OF SUCH EXPENSES.

 

6.13.       SPENT NUCLEAR FUEL FEES.

 

Between the date hereof and the Closing Date, and at all times thereafter,
Seller will remain liable for all Spent Nuclear Fuel Fees and any other fees
associated with electricity generated at Zion Station and sold prior to the
Closing Date, and Buyer shall have no Liability or responsibility therefor.

 

6.14.       DEPARTMENT OF ENERGY DECONTAMINATION AND DECOMMISSIONING FEES.

 

Seller will continue to pay all Department of Energy Decontamination and
Decommissioning Fees relating to Nuclear Fuel purchased and consumed at Zion
Station prior to the Closing Date, including all annual Special Assessment
invoices (if any) to be issued after the Closing Date by the Department of
Energy, as contemplated by its regulations at 10 C.F.R. Part 766 implementing
Sections 1801, 1802, and 1803 of the Atomic Energy Act.

 

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6.15.       COOPERATION RELATING TO INSURANCE AND PRICE-ANDERSON ACT.

 

Until the Closing, Seller will maintain, or cause to be maintained, in effect
(a) insurance in amounts and against such risks and losses as is customary in
the commercial nuclear power industry and (b) not less than the level of
property damage and liability insurance for the Facilities as in effect on the
date hereof.  Seller shall cooperate with Buyer’s efforts to obtain insurance,
including insurance required under the Price-Anderson Act or other Nuclear Laws
with respect to the Zion Assets.  In addition, subject to Buyer’s written
commitment to satisfy its indemnification obligations under Section 8.1.1,
Seller agrees to use Commercially Reasonable Efforts to assist Buyer in making
any claims against pre-Closing insurance policies that may provide coverage
related to Assumed Liabilities.  Buyer shall reimburse Seller for its reasonable
out-of-pocket expenses incurred in providing such assistance and cooperation and
shall not take any action which shall adversely affect any residual rights of
Seller in such insurance policies.

 

6.16.       RELEASE OF SELLER.

 

Buyer shall use Commercially Reasonable Efforts to support Seller’s efforts to
obtain a written release of Seller effective as of the Closing with respect to
obligations arising on or after the Closing Date under any of the Seller’s
Agreements assigned to Buyer hereunder.

 

6.17.       NRC COMMITMENTS.

 

Seller (until the Closing) and Buyer (after the Closing) shall maintain and use
the Facilities and the Zion Assets in accordance with the NRC Commitments, the
NRC Licenses, applicable NRC regulations and policies and with applicable Laws,
including Nuclear Laws.

 

6.18.       DECOMMISSIONING.

 

Buyer shall commit to the NRC, the ICC (if required) and other applicable
Governmental Authorities that Buyer will complete, at its expense, the
Decommissioning of the Facilities and the Zion Station Site (except for the
onsite storage of Spent Nuclear Fuel), and that it will complete all
Decommissioning activities in accordance with all Nuclear Laws and Environmental
Laws, including applicable requirements of the Atomic Energy Act and the NRC’s
rules, regulations, orders and guidance thereunder.  In the event that the NRC,
the ICC or other Governmental Authority requires Buyer to provide
Decommissioning funding assurance in an amount in excess of the Decommissioning
Funds, Buyer, Buyer’s Parent and/or Guarantor (or such other entity as shall be
acceptable to the NRC) shall post a guaranty or other financial assurances or
take such other action as is sufficient to cover such excess Decommissioning
funding in such form as required by the such Governmental Authority.

 

6.19.       NUCLEAR INSURANCE POLICIES.

 

In addition to any insurance that may be required under the Lease Agreement, on
and after the Closing Date, Buyer shall have and maintain in effect policies of
liability and property insurance with respect to the ownership, possession, use
and maintenance of the Facilities which shall afford protection against the
insurable hazards and risks with respect to which nuclear facilities of similar
size and type to the Facilities customarily maintain insurance, and which meets
the requirements of the NRC Licenses.  Such coverage shall include nuclear
liability

 

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insurance from ANI in such form and in such amount as will meet the financial
protection requirements of the Atomic Energy Act as provided in the NRC
Licenses, and an agreement of indemnification as contemplated by Section 170 of
the Atomic Energy Act. Buyer shall maintain Nuclear Liability Facility Form at
such limit as required by the NRC Licenses and Nuclear Liability Shippers &
Transporters coverage at a limit of $300 million during the Lease Term.   Buyer
shall maintain a NEIL property policy, or a similar policy, with limits of at
least $100 million to comply with NRC regulations.  Seller shall be included as
additional insured and loss payee on such insurance.  In the event that Buyer
can not acquire such insurance from NEIL, Seller will purchase the coverage at
Buyer’s expense. In the event that the nuclear liability protection system
contemplated by Section 170 of the Atomic Energy Act is repealed or changed,
Buyer shall have and maintain in effect, to the extent commercially available on
reasonable terms, alternate protection against nuclear liability.

 

6.20   Illinois Governmental Authorities.

 

If requested by the ICC or any other Illinois Governmental Authority (“Illinois
Authorities”), Buyer, Buyer’s Parent and Guarantor will appear before said
Illinois Authorities and present testimony, respond to interrogatories and
requests for discovery, or otherwise provide information requested by Illinois
Authorities regarding the management, financial condition and financial
resources, corporate structure, ownership and control, engineering systems,
designs, techniques, processes and know-how, costs of operation and
Decommissioning work, business relationships with Affiliates, contractual terms,
projections and other matters of interest identified by Illinois Authorities. 
Buyer, Buyer’s Parent and Guarantor will commit to any record-keeping and
record-retention requests that Illinois Authorities may impose or that ComEd may
reasonably request.  Seller and Buyer, Buyer’s Parent and Guarantor shall
cooperate in responding or dealing with Illinois Authorities on matters that
relate to the performance of this Agreement or the transactions contemplated
hereby.  Buyer, Buyer’s Parent and Guarantor shall keep Seller and ComEd
informed of any inquiries by, or communications with, Illinois Authorities
relating to the Zion Assets, Decommissioning the Zion Assets, or the Site.  The
Parties agree that Seller will take the lead in developing plans to address and
respond to matters raised by Illinois Authorities.

 

6.21   Project Budget and Schedule.

 

6.21.1  Not less than thirty (30) days prior to the Closing Date, Buyer will
deliver to Seller a detailed Project Budget (the “Original Project Budget”)
showing Buyer’s best estimates of project costs and expenses, including
contingency reserves, in order to achieve the Site Restoration Milestones, the
Target Completion Date, and End State Conditions according to the schedule for
the Decommissioning and other work contemplated by the Lease Agreement, without
giving effect to any potential extension of the schedule for such work by reason
of conditions of Force Majeure or Schedule Extension Conditions.  All estimated
project costs and expenses, including contingency reserves, shall be reflected
in the Original Project Budget for each of the major phases or categories of
work identified in the Original Project Budget as License Termination, Spent
Fuel Management, and Site Restoration (each referred to herein as a “Major
Budget Category”) detailed to a level 3 Work Breakdown Structure within each
such Major Budget Category.  The Original Project Budget shall show that Costs
to Completion do

 

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not exceed the Projected NDT Value and shall demonstrate to the satisfaction of
the NRC an allocation of budget resources sufficient for License Termination and
Spent Fuel Management.

 

6.21.2  Buyer may revise the Project Budget on or before the Closing Date with
the consent of Seller.  From time to time after the Closing Date, Buyer may
revise the Project Budget under the circumstances described below if Buyer, in
good faith, determines that changes are necessary because of actual or expected
changes in project costs and expenses, including contingency reserves.  Buyer
shall provide a copy of each revised Project Budget to Seller promptly following
completion of such revised Project Budget. Buyer may revise the Project Budget
without the consent of Seller by re-allocating budgeted costs and expenses,
including contingency reserves, among the detailed line items within any Major
Budget Category, provided that the aggregate budgeted costs and expenses,
including contingency reserves, for the detailed line items within that Major
Budget Category do not exceed the budgeted amount for that Major Budget Category
in the previous Project Budget.  Buyer may also revise the Project Budget
without the consent of Seller by re-allocating budgeted costs and expenses,
including contingency reserves, among the Major Budget Categories, provided that
the budgeted costs and expenses, including contingency reserves, for each Major
Budget Category do not exceed the amount budgeted for such Major Budget Category
in the Original Project Budget by more than 12%, and provided that such increase
is fully offset by reductions in the budgeted costs and expenses, including
contingency reserves, for one or more other Major Budget Categories.  Quarterly,
within thirty (30) days after each submission of a Disbursement Certificate,
Buyer may also revise the Project Budget up or down without the consent of
Seller if Buyer has fully complied with the provisions set forth in Sections
6.21.3, 6.21.4, 6.21.5, 6.21.6 and 6.21.7.  Notwithstanding the foregoing, the
Project Budget shall at all times demonstrate to the satisfaction of the NRC an
allocation of budget resources sufficient for License Termination and Spent Fuel
Management.

 

6.21.3  Annually, within thirty (30) days after each anniversary of the Closing
Date, Buyer shall present to Seller a report (the “Annual Status Report), signed
and certified as true and correct by Authorized Officers, setting forth as of a
date (not more than 30 days prior to delivery of such Annual Status Report)
specified in such Annual Status Report (a) cumulative project costs and expenses
budgeted for each Major Budget Category detailed to a level 3 Work Breakdown
Structure within each Major Budget Category, (b) cumulative project costs and
expenses incurred for each Major Budget Category detailed to a level 3 Work
Breakdown Structure within each Major Budget Category for which a disbursement
has been made from the Buyer QDF or Buyer NDF, (c) cumulative project costs and
expenses incurred for each Major Budget Category detailed to a level 3 Work
Breakdown Structure within each Major Budget Category for which a disbursement
has not been made from the Buyer QDF or Buyer NDF, (d) cost variances, (e) the
aggregate amount of any pending requests for  disbursement from the Buyer QDF or
Buyer NDF by Major Budget Category detailed to a level 3 Work Breakdown
Structure within each Major Budget Category, (f) Buyer’s good faith estimate of
Costs to Completion within each Major Budget Category detailed to a level 3 Work
Breakdown Structure within each Major Budget Category, (g) Buyer’s good faith
estimate of Projected NDT Value with reasonable supporting detail, and (h) the
aggregate amount of Deferred Receivables.

 

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6.21.4  In the third, sixth, ninth and twelfth full calendar months following
the Closing Date and in the corresponding calendar months of each successive
year thereafter, and at other times as Buyer may elect, Buyer shall submit to
Seller a certification and sworn statement of Authorized Officers (a
“Disbursement Certification”) which shall: (a) state that (1) all project work
and materials and services for which disbursement has been made or is being
requested from the Buyer QDF or Buyer NDF have been performed or delivered in
connection with the Decommissioning and other work required to achieve End State
Conditions, (2) disbursements requested to be made from the Buyer QDF or the
Buyer NDF to reimburse Buyer for expenses for materials or services purchased
will be used by Buyer to satisfy obligations to pay for such materials or
services that have been paid in cash or are due and payable in cash, and (3) all
costs and expenses related to such work and materials and services are
contemplated by the Project Budget, (4) there are no undisclosed costs in excess
of budgeted amounts for any Major Budget Category, and (5) there are no
undisclosed project costs to be funded from sources other than the Buyer QDF and
the Buyer NDF; and (b) set forth (1) Buyer’s good faith estimate of Costs to
Completion within each Major Budget Category detailed to a level 3 Work
Breakdown Structure within each Major Budget Category, (2) Buyer’s good faith
estimate of Projected NDT Value with reasonable supporting detail, and (3) the
aggregate amount of Deferred Receivables.

 

6.21.5  If at any time Buyer has reason to believe that Costs to Completion,
less Deferred Receivables, exceed Projected NDT Value and Buyer is not required
to deliver a Disbursement Certification within the immediately succeeding thirty
(30) calendar days, Buyer shall submit to Seller a certification and sworn
statement of Authorized Officers (a “Deficiency Certification”) which shall set
forth (a) Buyer’s good faith estimate of Costs to Completion within each Major
Budget Category detailed to a level 3 Work Breakdown Structure within each Major
Budget Category, (b) Buyer’s good faith estimate of Projected NDT Value with
reasonable supporting detail, and (c) the aggregate amount of Deferred
Receivables.  If, at any time after delivery of a Deficiency Certification,
Buyer has reason to believe that the amount by which Costs to Completion, less
Deferred Receivables, exceed Projected NDT Value has increased, Buyer shall
submit an additional Deficiency Certification (but not more frequently than
monthly), unless at the time such additional Deficiency Certification is
required to be delivered Buyer is required to deliver a Disbursement
Certification.

 

6.21.6  If any Disbursement Certification required by Section 6.21.4 or any
Deficiency Certification required by Section 6.21.5 discloses that Costs to
Completion, less Deferred Receivables, exceed Projected NDT Value, Buyer shall
have a period not to exceed ninety (90) days from the date of delivery of the
first such Disbursement Certification or Deficiency Certification to provide
satisfactory mitigation to the projected costs and schedule in order to achieve
End State Conditions in accordance with the Project Budget and Project
Schedule.   If after ninety (90) days Buyer does not deliver to Seller a
Disbursement Certification reflecting that Costs to Completion, less Deferred
Receivables, are less than or equal to Projected NDT Value, unless otherwise
agreed between Buyer and Seller, Buyer and/or Buyer’s Parent shall at its or
their option either (a) increase the amount of the Irrevocable Letter of Credit
to $200 million (or such lesser amount to which the amount of the Irrevocable
Letter of Credit has been reduced in accordance with the Credit Support
Agreement) plus the amount by which Costs to Completion, less Deferred
Receivables, exceed Projected NDT Value or (b) defer a portion of each
disbursement otherwise available to Buyer from the Buyer QDF and the Buyer NDF
by the lesser of (1) the amount by which Costs to Completion, less Deferred
Receivables, exceed

 

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Projected NDT Value or (2) the amount of the disbursement requested in any
pending disbursement request and each subsequent disbursement request until the
aggregate balance of Deferred Receivables is equal to or greater than the amount
by which Costs to Completion exceed Projected NDT Value.  If any subsequent
Disbursement Certification or Deficiency Certification discloses an increase in
the aggregate amount by which Costs to Completion exceed Projected NDT Value,
the requirements of the preceding sentence shall apply to such increased
amount.  If, in any subsequent Disbursement Certification, Authorized Officers
certify that Costs to Completion are less than or equal to Projected NDT Value,
such amounts that have been deferred in accordance with this Section 6.21.6 may
be disbursed, without interest, from the Buyer QDF or the Buyer NDF if Buyer
elected to defer distributions in accordance with the preceding clause (b), or
the face amount of the Irrevocable Letter of Credit may be reduced to $200
million (or such lesser amount to which the amount of the Irrevocable Letter of
Credit has been reduced in accordance with the Credit Support Agreement) if
Buyer and Buyer’s Parent elected to increase the face amount of the Irrevocable
Letter of Credit in accordance with the preceding clause (a).

 

6.21.7  Buyer shall not request a disbursement from the Buyer QDF or the Buyer
NDF at any time that Buyer has reason to believe that Costs to Completion, less
Deferred Receivables, exceed Projected NDT Value, unless Buyer has complied with
the requirements of Section 6.21.6.  Buyer shall provide Seller a copy of each
request for disbursement from the Buyer QDF and the Buyer NDF and each
certificate and sworn statement that Buyer presents to the Trustee under the
Post-Closing Nuclear Decommissioning Trust Agreement in support of a request for
disbursement of funds from the Buyer QDF or the Buyer NDF and each material
communication between Buyer and the Trustee relating to disbursements.  Buyer
shall not request a disbursement from the Buyer QDF or the Buyer NDF in the
third, sixth, ninth or twelfth full calendar month following the Closing Date or
in the corresponding calendar months of each successive year thereafter unless
Buyer has provided Seller with the Disbursement Certification for such month as
required by Section 6.21.4. Buyer shall not request a disbursement from the
Buyer QDF or the Buyer NDF to reimburse Buyer for any expense for materials or
services purchased if Buyer has not paid for such materials or services or
Buyer’s obligation to pay for such materials or services is not due and payable
in cash.  At the request of Seller from time to time, but not more frequently
than once in any period of twelve (12) consecutive calendar months, Buyer and
Buyer’s Parent will allow Seller, through its own personnel or through its
independent auditors, to examine books and records of Buyer and Buyer’s Parent
that contain financial information (including supporting information) relating
to or disclosing Costs to Completion, Deferred Receivables, disbursements from
the Buyer QDF and the Buyer NDF, and other matters, including costs incurred and
accounts payable, relevant to compliance with this Section 6.21 or the accuracy
of information provided to Seller pursuant to this Section 6.21.

 

6.21.8  If, based on reasonable supporting detail Seller disagrees with Buyer’s
calculation of Costs to Completion, as set forth in any Annual Status Report
delivered to Seller pursuant to Section 6.21.3, any Disbursement Certification
delivered to Seller pursuant to Section 6.21.4, or any Deficiency Certification
delivered to Seller pursuant to Section 6.21.5, Buyer and Seller will first
attempt to resolve the disagreement through discussions among the appropriate
personnel, including their senior officers as necessary.  If such discussions
are not productive in resolving the dispute within fifteen (15) days after the
dispute is raised by Seller, Buyer and Seller will

 

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engage a mutually agreed upon professional dispute resolution mediator with
expertise in the subject matter of the dispute to assist in mediating the
disagreement.  All discussions and communications relating to the resolution of
any such disagreement shall be treated as compromise and settlement negotiations
for purposes of the Federal Rules of Evidence and applicable state rules of
evidence and shall not be admissible as evidence in any arbitration proceeding
pursuant to Section 6.21.9 or any other legal proceeding.   If (a) Seller’s
estimate of Costs to Completion exceed Buyer’s calculation of Costs to
Completion (in each case as of the date of determination specified in the Annual
Status Report, Disbursement Certification, or Deficiency Certification to which
the dispute relates) by more than 5% and (b) Seller’s estimate of Costs to
Completion, less Deferred Receivables, exceeds Projected NDT Value (in each case
as of the date of determination specified in the Annual Status Report,
Disbursement Certification, or Deficiency Certification to which the dispute
relates) and (c)Buyer and Seller are unable to resolve their disagreement
(including resolution by a mutually agreed increase in Deferred Receivables)
through discussions or mediation within thirty (30) days after the dispute is
raised by Seller, Seller will have the right to invoke arbitration pursuant to
Section 6.21.9 to resolve the disagreement.

 

6.21.9   If (a) the procedures referenced in Section 6.21.8 are invoked but do
not result in resolution of the dispute within thirty (30) days after the
dispute is raised and (b) Seller’s estimate of Costs to Completion exceed
Buyer’s calculation of Costs to Completion (in each case as of the date of
determination specified in the Annual Status Report, Disbursement Certification,
or Deficiency Certification to which the dispute relates) by more than 5% and
(c) Seller’s estimate of Costs to Completion, less Deferred Receivables, exceeds
Projected NDT Value (in each case as of the date of determination specified in
the Annual Status Report, Disbursement Certification, or Deficiency
Certification to which the dispute relates), Seller may, at its option, submit
the dispute to binding arbitration by giving notice to the Buyer and  the
American Arbitration Association (the “Association”), whereupon such dispute
shall be resolved by binding arbitration according to the following provisions. 
For any dispute to be resolved by binding arbitration, Buyer and Seller shall
each have the right to designate an arbitrator of its choice, who need not be
from the Association panel of arbitrators, but who shall not have been
previously an employee of either Buyer or Seller or their respective Affiliates
and shall not have any direct or indirect interest in Buyer or Seller or their
respective Affiliates or the subject matter of the arbitration.   Such
designations shall be made by notice to the other party and to the Association
within ten (10) days after Seller gives notice of the demand for arbitration. 
The arbitrators designated by Buyer and Seller shall, within ten (10) days after
the designation of the last of the two arbitrators to be designated by Buyer and
Seller, designate a third arbitrator who shall act as chairman of the panel of
three arbitrators.  If either Buyer or Seller fails to designate an arbitrator
of its choice within ten (10) days after Seller gives notice of the demand for
arbitration, the first designated arbitrator shall select the remaining two
arbitrators.  If the arbitrators designated by Buyer and Seller cannot or do not
select a third arbitrator within such ten (10) day period, either Buyer or
Seller may apply to the Association for the purpose of appointing any person
listed with the Association as the third independent arbitrator under the
expedited rules of the Association. The resulting panel of three arbitrators
shall hear and make a decision with respect to the dispute submitted to such
arbitration.   The arbitration shall be held in Chicago, Illinois, or in any
other location established by mutual agreement of Buyer and Seller.  The
rules of the Association shall apply to the arbitration to the extent not
inconsistent

 

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with the requirements of this Section 6.21.9.  Buyer and Seller shall provide
each other reasonable access to their respective files and records and the files
and records of their respective Affiliates, to the extent those files and
records are relevant to the dispute, at all times prior to the arbitration
hearing, and Buyer and Seller shall be entitled to conduct discovery as provided
in the Federal Rules of Civil Procedure for a period of forty-five (45) days
after Seller gives notice of the demand for arbitration. In the event of any
dispute related to the scope of discovery, either Buyer or Seller may request
resolution of such dispute by the arbitrators.  Not less than ten (10) days
prior to the arbitration hearing, Buyer and Seller shall exchange briefs and
documents to be submitted into evidence at the hearing.   The arbitrators shall
hold a two-day hearing on the dispute within twenty (20) days after the later of
the appointment of the third arbitrator or the conclusion of discovery.  At such
hearing, Buyer and Seller each shall be allowed a period of eight (8) hours to
present its case and closing and rebuttal arguments to the arbitrators, unless
otherwise mutually agreed between Buyer and Seller or as may otherwise be
determined by the arbitrators upon application of Buyer or Seller.  The
arbitrators shall render their decision in writing within ten (10) days after
the conclusion of the hearing solely on the basis of the documents, testimony
and arguments presented at the hearing.  Each of Buyer and Seller and their
respective Affiliates will bear their own expenses with respect to the
arbitration; provided, however, that (a) the arbitrators, upon application of
Seller, may assess costs and expenses against Buyer if (1) the arbitrators
determine that Costs to Completion exceed Buyer’s calculation of Costs to
Completion (in each case as of the date of determination specified in the Annual
Status Report, Disbursement Certification, or Deficiency Certification to which
the dispute relates) by more than 5% and (2) Seller’s estimate of Costs to
Completion, less Deferred Receivables, exceeds Projected NDT Value (in each case
as of the date of determination specified in the Annual Status Report,
Disbursement Certification, or Deficiency Certification to which the dispute
relates); (b) the arbitrators, upon application of Buyer, may assess costs and
expenses against Seller if (1) the arbitrators determine that Costs to
Completion are less than 105% of Buyer’s calculation of Costs to Completion (in
each case as of the date of determination specified in the Annual Status Report,
Disbursement Certification, or Deficiency Certification to which the dispute
relates) or (2) Costs to Completion, less Deferred Receivables, are less than
Projected NDT Value (in each case as of the date of determination specified in
the Annual Status Report, Disbursement Certification, or Deficiency
Certification to which the dispute relates); and (c) upon application of Buyer
or Seller, the arbitrators may assess costs and expenses against either Buyer or
Seller if the arbitrators shall deem such assessment just and equitable.  Any
award of the arbitrators may be enforced in any court of competent jurisdiction
by a party in whose favor such award is made. If the arbitrators determine that
Costs to Completion exceed Buyer’s calculation of Costs to Completion (in each
case as of the date of determination specified in the Annual Status Report,
Disbursement Certification, or Deficiency Certification to which the dispute
relates) by more than 5% and Costs to Completion as determined by the
arbitrators, less Deferred Receivables, exceeds Projected NDT Value (in each
case as of the date of determination specified in the Annual Status Report,
Disbursement Certification, or Deficiency Certification to which the dispute
relates), the arbitrators’ determination of Costs to Completion within any Major
Budget Category detailed to a level 3 Work Breakdown Structure within each such
Major Budget Category shall be binding on Buyer in any subsequent calculation by
Buyer of Costs to Completion, in the absence of any subsequent experience or
other objective facts that would serve as a basis for Buyer to revise such Costs
to Completion as determined by the arbitrators.

 

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6.21.10  If at any time the aggregate amount of Deferred Receivables exceeds $50
million, Buyer’s Parent will contribute cash to the capital of Buyer from time
to time in an aggregate amount equal to such excess, plus additional sums
necessary from time to time to enable Buyer to pay vendors for materials and
services within established terms of trade payables and otherwise meet current
operating expenses of Buyer as and when such expenses are incurred and become
due and payable.   In lieu of making all or any portion of such capital
contributions, Buyer’s Parent may (a) make unsecured loans or advances to Buyer
in like amounts that (1) are expressly subordinated to all other obligations of
Buyer, including contingent obligations of Buyer to Seller, and (2) are not due
and payable at any time when the aggregate of Deferred Receivables exceed $50
million, or (b) defer the payment of claims for money due from Buyer to Buyer’s
Parent or any Affiliates of Buyer’s Parent if (1) such deferred claims for money
due are expressly subordinated to all other obligations of Buyer, including
contingent obligations of Buyer to Seller, and (2) such deferred claims for
money due will not be due and payable at any time when the aggregate of Deferred
Receivables exceeds $50 million.  Without limiting the preceding requirements of
this Section 6.21.10, Buyer’s Parent will, from time to time, contribute to the
capital of Buyer or make unsecured loans and advances to Buyer in order to
assure that Buyer has adequate cash resources (in addition to the available
resources of the Buyer QDF and the Buyer NDF) to pay its vendors for materials
and services within established terms of trade payables and otherwise meet
current operating expenses of Buyer as and when such expenses are incurred and
become due and payable, except for any claims for money due from Buyer to
Buyer’s Parent or any Affiliates of Buyer’s Parent that are deferred in
accordance with the preceding sentence. Within thirty (30) days after the close
of each calendar month following the Closing Date, Buyer shall deliver to Seller
a schedule setting forth, as of the end of the preceding calendar month, an
aging of accounts payable of Buyer to vendors other than Buyer’s Parent or any
Affiliates of Buyer’s Parent, which shall show that not less than ninety-five
percent (95%) of such accounts payable (by dollar volume) are within applicable
trade terms, excepting any such accounts payable that may be disputed in good
faith by Buyer; provided that Buyer shall not be required to provide such aging
schedule at any time when the aggregate of all such accounts payable to vendors
other than Buyer’s Parent or any Affiliates of Buyer’s Parent do not exceed
$10,000,000.

 

6.22   Claims Against Buyer.  Until End State Conditions are achieved and the
Put Option Closing occurs, Buyer’s Parent shall not, in its capacity as a
creditor of Buyer or as the holder of membership interests in Buyer, petition or
otherwise invoke or cause Buyer to invoke, or acquiesce in any action to invoke,
the process of any court or governmental authority for the purpose of commencing
or sustaining a case against Buyer under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of Buyer or any
substantial part of the property of Buyer, or ordering the winding up or
liquidation of the affairs of Buyer.  Until End State Conditions are achieved
and the Put Option Closing occurs, Guarantor shall not, in its capacity as a
creditor of Buyer’s Parent or as the holder of membership interests in Buyer’s
Parent, petition or otherwise invoke or cause Buyer’s Parent to invoke, or
acquiesce in any action to invoke, the process of any court or governmental
authority for the purpose of commencing or sustaining a case against Buyer’s
Parent under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of Buyer’s

 

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Parent or any substantial part of the property of Buyer’s Parent, or ordering
the winding up or liquidation of the affairs of Buyer’s Parent.  Until End State
Conditions are achieved and the Put Option Closing occurs, Buyer’s Parent and
Guarantor shall not cause or permit an Affiliate of Buyer’s Parent or Guarantor,
in its capacity as a creditor of Buyer, to petition or otherwise invoke or cause
Buyer or Buyer’s Parent to invoke, or acquiesce in any action to invoke, the
process of any court or governmental authority for the purpose of commencing or
sustaining a case against Buyer under an federal or state bankruptcy, insolvency
or similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of Buyer or Buyer’s Parent or
any substantial part of the property of Buyer or Buyer’s Parent, or ordering the
winding up or liquidation of the affairs of Buyer or Buyer’s Parent.

 

7.             CONDITIONS

 

7.1.         CONDITIONS TO OBLIGATIONS OF BUYER.

 

The obligations of Buyer to purchase the Zion Assets and to consummate the other
transactions contemplated by this Agreement shall be subject to the fulfillment
at or prior to the Closing Date (or the waiver by Buyer) of the following
conditions:

 

7.1.1.      NO PRELIMINARY OR PERMANENT INJUNCTION OR OTHER ORDER OR DECREE BY
ANY GOVERNMENTAL AUTHORITY WHICH RESTRAINS OR PREVENTS THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ANCILLARY AGREEMENTS SHALL
HAVE BEEN ISSUED AND REMAIN IN EFFECT AND NO STATUTE, RULE OR REGULATION SHALL
HAVE BEEN ENACTED BY ANY GOVERNMENTAL AUTHORITY WHICH PROHIBITS THE CONSUMMATION
OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ANCILLARY AGREEMENTS;

 

7.1.2.      ALL REQUIRED REGULATORY APPROVALS SHALL HAVE BEEN RECEIVED, IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO BUYER AND SUCH APPROVALS SHALL BE IN
FULL FORCE AND EFFECT AND EITHER (I) SHALL BE FINAL AND NON-APPEALABLE OR
(II) IF NOT FINAL AND NON-APPEALABLE, SHALL NOT BE SUBJECT TO THE POSSIBILITY OF
APPEAL, REVIEW OR RECONSIDERATION WHICH, IN THE REASONABLE OPINION OF BUYER, IS
LIKELY TO BE SUCCESSFUL AND, IF SUCCESSFUL, WOULD HAVE A SELLER MATERIAL ADVERSE
EFFECT OR A BUYER MATERIAL ADVERSE EFFECT;

 

7.1.3.      SELLER SHALL HAVE PERFORMED AND COMPLIED IN ALL MATERIAL RESPECTS
WITH THE COVENANTS AND AGREEMENTS CONTAINED IN THIS AGREEMENT WHICH ARE REQUIRED
TO BE PERFORMED AND COMPLIED WITH BY SELLER ON OR PRIOR TO THE CLOSING DATE;

 

7.1.4.      THE REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH IN THIS
AGREEMENT THAT ARE QUALIFIED BY MATERIALITY SHALL BE TRUE AND CORRECT AS OF THE
CLOSING DATE, AND ALL OTHER REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH
IN THIS AGREEMENT SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AS OF THE
CLOSING DATE, IN EACH CASE AS THOUGH MADE AT AND AS OF THE CLOSING DATE;

 

7.1.5.      BUYER SHALL HAVE RECEIVED A CERTIFICATE FROM AN AUTHORIZED OFFICER
OF SELLER, DATED THE CLOSING DATE, TO THE EFFECT THAT, TO SUCH OFFICER’S
KNOWLEDGE, THE CONDITIONS SET FORTH IN SECTIONS 7.1.3, 7.1.4, AND 7.1.7 HAVE
BEEN SATISFIED BY SELLER;

 

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7.1.6.      SELLER SHALL HAVE DELIVERED, OR CAUSED TO BE DELIVERED, TO BUYER AT
THE CLOSING, SELLER’S CLOSING DELIVERIES DESCRIBED IN SECTION 3.4;

 

7.1.7.      SINCE THE DATE HEREOF, NO SELLER MATERIAL ADVERSE EFFECT SHALL HAVE
OCCURRED AND BE CONTINUING;

 

7.1.8.      SELLER SHALL HAVE WITHDRAWN FROM THE NDF AND REMITTED TO BUYER AN
AMOUNT SUFFICIENT TO SATISFY BUYER RECEIVABLES ARISING UNDER THE DECOMMISSIONING
PLANNING CONTRACT THROUGH THE CLOSING DATE;

 

7.1.9.      BUYER SHALL HAVE RECEIVED AN UNAUDITED STATEMENT OF ASSETS AND
ACCRUED LIABILITIES FOR THE QDF AS OF THE LAST BUSINESS DAY BEFORE CLOSING;

 

7.1.10.    BUYER SHALL HAVE RECEIVED AN UNAUDITED STATEMENT OF ASSETS AND
ACCRUED LIABILITIES FOR THE NDF AS OF THE LAST BUSINESS DAY BEFORE CLOSING;

 

7.1.11.    SELLER SHALL HAVE COMPLETED AN INDIRECT TRANSFER OF ASSETS FROM THE
NDF TO THE QDF AS REQUIRED BY SECTION 6.12.2, SUBJECT TO THE REQUIREMENTS OF
SECTION 6.12.3;

 

7.1.12.    SELLER SHALL HAVE TAKEN ALL STEPS REQUIRED TO COMPLETE THE TRANSFER
OF ASSETS FROM THE NDF AND QDF TO BUYER’S NDF AND BUYER’S QDF, RESPECTIVELY, AS
REQUIRED BY SECTION 6.12.4, EFFECTIVE AS OF THE CLOSING;

 

7.1.13.    ALL APPLICABLE WAITING PERIODS UNDER THE HSR ACT RELATING TO THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY SHALL HAVE EXPIRED OR BEEN
TERMINATED; AND

 

7.1.14.    THE ANCILLARY AGREEMENTS SHALL BE IN FULL FORCE AND EFFECT AS OF THE
CLOSING DATE.

 

7.2.         CONDITIONS TO OBLIGATIONS OF SELLER.

 

The obligation of Seller to sell the Zion Assets and to consummate the other
transactions contemplated by this Agreement shall be subject to the fulfillment
at or prior to the Closing Date (or the waiver by Seller) of the following
conditions:

 

7.2.1.      NO PRELIMINARY OR PERMANENT INJUNCTION OR OTHER ORDER OR DECREE BY
ANY GOVERNMENTAL AUTHORITY WHICH RESTRAINS OR PREVENTS THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ANCILLARY AGREEMENTS SHALL
HAVE BEEN ISSUED AND REMAIN IN EFFECT AND NO STATUTE, RULE OR REGULATION SHALL
HAVE BEEN ENACTED BY ANY GOVERNMENTAL AUTHORITY WHICH PROHIBITS THE CONSUMMATION
OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ANCILLARY AGREEMENTS;

 

7.2.2.      ALL REQUIRED REGULATORY APPROVALS SHALL HAVE BEEN RECEIVED, IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO SELLER AND SUCH APPROVALS SHALL BE IN
FULL FORCE AND EFFECT AND EITHER (I) SHALL BE FINAL AND NON-APPEALABLE; OR
(II) IF NOT FINAL AND NON-APPEALABLE, SHALL NOT BE SUBJECT TO THE POSSIBILITY OF
APPEAL, REVIEW OR RECONSIDERATION WHICH, IN THE REASONABLE OPINION OF SELLER IS
LIKELY TO BE SUCCESSFUL AND, IF SUCCESSFUL, WOULD HAVE A SELLER MATERIAL ADVERSE
EFFECT OR BUYER MATERIAL ADVERSE EFFECT;

 

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7.2.3.      BUYER, BUYER’S PARENT AND GUARANTOR SHALL HAVE PERFORMED AND
COMPLIED IN ALL MATERIAL RESPECTS WITH THE COVENANTS AND AGREEMENTS CONTAINED IN
THIS AGREEMENT WHICH ARE REQUIRED TO BE PERFORMED AND COMPLIED WITH BY BUYER,
BUYER’S PARENT OR GUARANTOR ON OR PRIOR TO THE CLOSING DATE;

 

7.2.4.      THE REPRESENTATIONS AND WARRANTIES OF BUYER, BUYER’S PARENT AND
GUARANTOR SET FORTH IN THIS AGREEMENT THAT ARE QUALIFIED BY MATERIALITY SHALL BE
TRUE AND CORRECT AS OF THE CLOSING DATE, AND ALL OTHER REPRESENTATIONS AND
WARRANTIES OF BUYER, BUYER’S PARENT AND GUARANTOR SET FORTH IN THIS AGREEMENT
SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS AS OF THE CLOSING DATE, IN
EACH CASE AS THOUGH MADE AT AND AS OF THE CLOSING DATE;

 

7.2.5.      SELLER SHALL HAVE RECEIVED A CERTIFICATE FROM AN AUTHORIZED OFFICER
OF BUYER, BUYER’S PARENT AND GUARANTOR, DATED THE CLOSING DATE, TO THE EFFECT
THAT, TO SUCH OFFICER’S OR OFFICERS’ KNOWLEDGE, THE CONDITIONS SET FORTH IN
SECTIONS 7.2.3, 7.2.4, AND 7.2.9 HAVE BEEN SATISFIED BY BUYER AND BUYER’S
PARENT;

 

7.2.6.      BUYER, BUYER’S PARENT AND GUARANTOR SHALL HAVE DELIVERED, OR CAUSED
TO BE DELIVERED, TO SELLER AT THE CLOSING, BUYER’S, BUYER’S PARENT’S AND
GUARANTOR’S CLOSING DELIVERIES DESCRIBED IN SECTION 3.5;

 

7.2.7.      SELLER SHALL HAVE WITHDRAWN FROM THE NDF THE FUNDS SELLER IS
PERMITTED TO WITHDRAW PURSUANT TO SECTION 6.12.2;

 

7.2.8.      THE NDF SHALL RETAIN AGGREGATE ASSETS EQUAL TO THE SUM REQUIRED BY
SECTION 6.12.3 AFTER GIVING EFFECT TO THE TRANSFERS CONTEMPLATED BY
SECTION 6.12.4;

 

7.2.9.      SINCE THE DATE HEREOF, NO BUYER MATERIAL ADVERSE EFFECT SHALL HAVE
OCCURRED AND BE CONTINUING; NO OTHER EVENT SHALL HAVE OCCURRED OR OTHER
CONDITION SHALL EXIST THAT CONSTITUTES AN EVENT OF DEFAULT OR, BUT FOR THE
GIVING OF NOTICE OR THE PASSAGE OF TIME OR DETERMINATION OF ARBITRATOR, COULD
CONSTITUTE AN EVENT OF DEFAULT.

 

7.2.10.    A PERSON DESIGNATED BY SELLER SHALL HAVE BEEN APPOINTED TO THE BOARD
OF MANAGERS OF BUYER;

 

7.2.11.    BUYER’S PARENT SHALL HAVE PLEDGED ITS EQUITY INTEREST IN BUYER,
PURSUANT TO THE PLEDGE AGREEMENT, AS SECURITY FOR ITS OBLIGATIONS UNDER THE
PERFORMANCE GUARANTY, AND IT SHALL HAVE OBTAINED ANY CONSENTS AS MAY BE REQUIRED
FOR THE CREATION OF THIS SECURITY INTEREST, AND SELLER’S SECURITY INTEREST SHALL
HAVE ATTACHED AND SHALL BE A PERFECTED SECURITY INTEREST IN THE ENTIRE EQUITY
INTEREST IN BUYER;

 

7.2.12.    THE IRREVOCABLE LETTER OF CREDIT IN AN AMOUNT NOT LESS THAN $200
MILLION (I) SHALL BE IN THE FORM OF THE ATTACHMENT TO THE CREDIT SUPPORT
AGREEMENT OR A FORM OTHERWISE ACCEPTABLE TO SELLER, AND (II) SHALL BE ISSUED BY
A QUALIFIED INSTITUTION;

 

7.2.13.    BUYER SHALL HAVE CREATED THE BUYER BACKUP NDT, AND THE DISPOSAL
CAPACITY ASSET SHALL HAVE BEEN CONTRIBUTED TO THE BUYER BACKUP NDT;

 

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7.2.14.    ALL APPLICABLE WAITING PERIODS UNDER THE HSR ACT RELATING TO THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY SHALL HAVE EXPIRED OR BEEN
TERMINATED; AND

 

7.2.15.    THE ANCILLARY AGREEMENTS SHALL BE IN FULL FORCE AND EFFECT AS OF THE
CLOSING DATE.

 

8.             INDEMNIFICATION

 

8.1.         INDEMNIFICATION.

 

8.1.1.      FOLLOWING THE CLOSING, BUYER, BUYER’S PARENT AND GUARANTOR, JOINTLY
AND SEVERALLY, SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS SELLER, ITS OFFICERS,
DIRECTORS, EMPLOYEES, AFFILIATES (INCLUDING COMED) AND AGENTS (EACH, A “SELLER
INDEMNITEE”) FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, SUITS, LOSSES,
LIABILITIES, DAMAGES, OBLIGATIONS, PAYMENTS, COSTS AND EXPENSES (INCLUDING,
WITHOUT LIMITATION, THE COSTS AND EXPENSES OF ANY AND ALL ACTIONS, SUITS,
PROCEEDINGS, ASSESSMENTS, JUDGMENTS, SETTLEMENTS AND COMPROMISES RELATING
THERETO AND REASONABLE ATTORNEYS’ FEES AND REASONABLE DISBURSEMENTS IN
CONNECTION THEREWITH) (EACH, AN “INDEMNIFIABLE LOSS”), ASSERTED AGAINST OR
SUFFERED BY ANY SELLER INDEMNITEE RELATING TO, RESULTING FROM OR ARISING OUT OF
(I) ANY BREACH BY BUYER, BUYER’S PARENT OR GUARANTOR OF ANY OF THE
REPRESENTATIONS AND WARRANTIES OF BUYER, BUYER’S PARENT OR GUARANTOR CONTAINED
IN THIS AGREEMENT, BUT ONLY TO THE EXTENT THAT SUCH INDEMNIFIABLE LOSSES EXCEED
ONE MILLION DOLLARS ($1,000,000) INDIVIDUALLY OR TEN MILLION DOLLARS
($10,000,000) IN THE AGGREGATE; (II) ANY BREACH BY BUYER, BUYER’S PARENT OR
GUARANTOR OF ANY OF THE COVENANTS OF BUYER, BUYER’S PARENT OR GUARANTOR
CONTAINED IN THIS AGREEMENT; (III) THE ASSUMED LIABILITIES; OR (IV) ANY THIRD
PARTY CLAIMS AGAINST A SELLER INDEMNITEE ARISING OUT OF OR IN CONNECTION WITH
BUYER’S OWNERSHIP, POSSESSION, USE, OR DECOMMISSIONING OF THE ZION ASSETS OR THE
FACILITIES FOLLOWING THE CLOSING DATE (OTHER THAN ANY THIRD PARTY CLAIMS THAT
ARE EXCLUDED LIABILITIES) INCLUDING CONTRACTORS’ MECHANICS’, MATERIALMEN’S AND
SIMILAR LIENS AND CLAIMS ARISING OUT OF THE PERFORMANCE OF SERVICES OR THE
FURNISHING OF MATERIALS RELATING TO THE ZION STATION SITE.  WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, BUYER, BUYER’S PARENT AND GUARANTOR, JOINTLY AND
SEVERALLY, SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS COMED, ITS OFFICERS,
DIRECTORS, EMPLOYEES, AFFILIATES AND AGENTS (EACH, ALSO A “SELLER INDEMNITEE”)
FROM AND AGAINST ANY AND ALL INDEMNIFIABLE LOSSES ASSERTED AGAINST OR SUFFERED
BY ANY SUCH SELLER INDEMNITEE RELATING TO, RESULTING FROM, OR ARISING OUT OF
(I) THE MANAGEMENT, WITHDRAWAL OR USE OF DECOMMISSIONING FUNDS HELD AT ANY TIME
IN THE BUYER QDF OR THE BUYER NDF, (II) ANY REFUND OBLIGATIONS OF COMED OR
SELLER TO COMED RATEPAYERS OR OTHER CLAIM WITH RESPECT TO EXCESS DECOMMISSIONING
FUNDS HELD IN THE BUYER QDF OR THE BUYER NDF, OR (III) ANY CLAIM ASSERTED FOR
REFUND TO COMED RATEPAYERS ARISING WITH RESPECT TO FUNDS WITHDRAWN AT ANY TIME
FROM THE QDF, THE NDF, THE BUYER QDF, OR THE BUYER NDF FOR COSTS AND EXPENSES
INCURRED BY OR PAID TO BUYER OR BUYER’S PARENT OR THEIR AFFILIATES OR
CONTRACTORS (INCLUDING REFUND OBLIGATIONS ARISING IF SUCH COSTS AND EXPENSES ARE
ALLEGED OR DETERMINED TO NOT HAVE BEEN PRUDENTLY INCURRED OR OTHERWISE TO BE
INAPPROPRIATE).

 

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8.1.2.      FOLLOWING THE CLOSING, SELLER SHALL INDEMNIFY, DEFEND AND HOLD
HARMLESS BUYER, ITS OFFICERS, DIRECTORS, MEMBERS, EMPLOYEES, AFFILIATES AND
AGENTS (EACH, A “BUYER INDEMNITEE”) FROM AND AGAINST ANY AND ALL INDEMNIFIABLE
LOSSES ASSERTED AGAINST OR SUFFERED BY ANY BUYER INDEMNITEE RELATING TO,
RESULTING FROM OR ARISING OUT OF (I) ANY BREACH BY SELLER OF THE REPRESENTATIONS
AND WARRANTIES OF SELLER CONTAINED IN THIS AGREEMENT, BUT ONLY TO THE EXTENT
THAT SUCH INDEMNIFIABLE LOSSES EXCEED ONE MILLION DOLLARS ($1,000,000)
INDIVIDUALLY OR TEN MILLION DOLLARS ($10,000,000) IN THE AGGREGATE;  (II) ANY
BREACH BY SELLER OF ANY COVENANTS OF SELLER CONTAINED IN THIS AGREEMENT;
(III) THE EXCLUDED LIABILITIES; (IV) ANY THIRD PARTY CLAIMS AGAINST A BUYER
INDEMNITEE ARISING OUT OF OR IN CONNECTION WITH SELLER’S OWNERSHIP, POSSESSION,
USE, OR OPERATION OF THE ZION ASSETS ON OR PRIOR TO THE CLOSING DATE (OTHER THAN
ANY THIRD PARTY CLAIMS THAT ARE ASSUMED LIABILITIES); AND (V) ANY THIRD PARTY
CLAIMS AGAINST A BUYER INDEMNITEE ARISING OUT OF OR IN CONNECTION WITH SELLER’S
OWNERSHIP, POSSESSION, USE, OR OPERATION OF THE EXCLUDED ASSETS.

 

8.1.3.      THE EXPIRATION OR TERMINATION OF ANY REPRESENTATION OR WARRANTY
SHALL NOT AFFECT THE PARTIES’ OBLIGATIONS UNDER THIS SECTION 8.1 IF THE
INDEMNITEE PROVIDED THE PERSON REQUIRED TO PROVIDE INDEMNIFICATION UNDER THIS
AGREEMENT (THE “INDEMNIFYING PARTY”) WITH NOTICE OF THE CLAIM OR EVENT FOR WHICH
INDEMNIFICATION IS SOUGHT IN ACCORDANCE WITH THIS AGREEMENT PRIOR TO SUCH
EXPIRATION, TERMINATION OR EXTINGUISHMENT.

 

8.1.4.      EXCEPT TO THE EXTENT OTHERWISE PROVIDED IN ARTICLE 9 OR IN
SECTION 6.9.5, THE RIGHTS AND REMEDIES OF SELLER AND BUYER UNDER THIS ARTICLE 8
ARE EXCLUSIVE AND IN LIEU OF ANY AND ALL OTHER RIGHTS AND REMEDIES WHICH SELLER
AND BUYER MAY HAVE UNDER THIS AGREEMENT OR OTHERWISE (INCLUDING ENVIRONMENTAL
LAWS AND NUCLEAR LAWS) FOR MONETARY RELIEF, WITH RESPECT TO (I) ANY BREACH OF OR
FAILURE TO PERFORM ANY COVENANT, AGREEMENT, OR REPRESENTATION OR WARRANTY SET
FORTH IN THIS AGREEMENT AFTER THE OCCURRENCE OF THE CLOSING, OR (II) THE ASSUMED
LIABILITIES OR THE EXCLUDED LIABILITIES, AS THE CASE MAY BE.  THE
INDEMNIFICATION OBLIGATIONS OF THE PARTIES SET FORTH IN THIS ARTICLE 8 APPLY
ONLY TO MATTERS ARISING OUT OF THIS AGREEMENT, EXCLUDING THE ANCILLARY
AGREEMENTS.  ANY INDEMNIFIABLE LOSS ARISING UNDER OR PURSUANT TO AN ANCILLARY
AGREEMENT SHALL BE GOVERNED BY THE INDEMNIFICATION OBLIGATIONS, IF ANY,
CONTAINED IN THE ANCILLARY AGREEMENT UNDER WHICH THE INDEMNIFIABLE LOSS ARISES. 
THE MAXIMUM AGGREGATE LIABILITY OF BUYER, BUYER’S PARENT AND GUARANTOR UNDER
CLAUSE (I) OF SECTION.8.1.1 FOR INDEMNIFIABLE LOSSES BY SELLER SHALL BE
TWENTY-FIVE MILLION DOLLARS ($25,000,000), AND THE MAXIMUM AGGREGATE LIABILITY
OF SELLER UNDER CLAUSE (I) OF SECTION 8.1.2 FOR INDEMNIFIABLE LOSSES BY BUYER
SHALL BE TWENTY-FIVE MILLION DOLLARS ($25,000,000); PROVIDED, HOWEVER, THAT ANY
INTENTIONAL MISREPRESENTATION OR FRAUDULENT BREACH OF ANY REPRESENTATION OR
WARRANTY OF SELLER OR BUYER, BUYER’S PARENT OR GUARANTOR CONTAINED IN THIS
AGREEMENT SHALL NOT BE SUBJECT TO THE FOREGOING LIMIT ON INDEMNITY (IT BEING
UNDERSTOOD THAT THE PARTY SEEKING INDEMNITY IN EXCESS OF SUCH LIMIT SHALL BEAR
THE BURDEN OF PROOF OF ESTABLISHING THE EXISTENCE OF THE INTENTIONAL
MISREPRESENTATION OR FRAUDULENT BREACH).

 

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8.1.5.      NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, NO PARTY (INCLUDING
AN INDEMNITEE) SHALL BE ENTITLED TO RECOVER FROM ANY OTHER PARTY (INCLUDING AN
INDEMNIFYING PARTY) FOR ANY LIABILITIES, DAMAGES, OBLIGATIONS, PAYMENTS, LOSSES,
COSTS OR EXPENSES UNDER THIS AGREEMENT ANY AMOUNT IN EXCESS OF THE ACTUAL
COMPENSATORY DAMAGES, COURT COSTS AND REASONABLE ATTORNEY’S AND OTHER ADVISOR
FEES SUFFERED BY SUCH PARTY.  BUYER AND SELLER WAIVE ANY RIGHT TO RECOVER
PUNITIVE, INCIDENTAL, SPECIAL, EXEMPLARY AND CONSEQUENTIAL DAMAGES ARISING IN
CONNECTION WITH OR WITH RESPECT TO THIS AGREEMENT INCLUDING, BUT NOT LIMITED TO,
LOSSES OR DAMAGES CAUSED BY REASON OF LOSS OF USE, PROFITS OR REVENUE, INVENTORY
OR USE CHARGES, INTEREST CHARGES OR COST OF CAPITAL, EXCEPT TO THE EXTENT ANY
SUCH PUNITIVE, INCIDENTAL, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES ARE PAID
OR PAYABLE TO A PERSON NOT A PARTY OR ANY AFFILIATE OF A PARTY BY REASON OF A
THIRD PARTY CLAIM.

 

8.2.         DEFENSE OF CLAIMS.

 

8.2.1.      IF ANY INDEMNITEE RECEIVES NOTICE OF THE ASSERTION OF ANY CLAIM OR
OF THE COMMENCEMENT OF ANY CLAIM, ACTION, OR PROCEEDING MADE OR BROUGHT BY ANY
PERSON WHO IS NOT A PARTY OR ANY AFFILIATE OF A PARTY (A “THIRD PARTY CLAIM”),
INCLUDING AN INFORMATION DOCUMENT REQUEST OR A NOTICE OF PROPOSED DISALLOWANCE
ISSUED BY THE IRS RELATING TO A MATTER COVERED BY SECTION 5.6, WITH RESPECT TO
WHICH INDEMNIFICATION IS TO BE SOUGHT FROM AN INDEMNIFYING PARTY, THE INDEMNITEE
SHALL GIVE SUCH INDEMNIFYING PARTY REASONABLY PROMPT WRITTEN NOTICE THEREOF, BUT
IN ANY EVENT SUCH NOTICE SHALL NOT BE GIVEN LATER THAN TWENTY (20) CALENDAR DAYS
AFTER THE INDEMNITEE’S RECEIPT OF NOTICE OF SUCH THIRD PARTY CLAIM, EXCEPT AS
OTHERWISE PROVIDED BY SECTION 8.2.6.  SUCH NOTICE SHALL DESCRIBE THE NATURE OF
THE THIRD PARTY CLAIM IN REASONABLE DETAIL AND SHALL INDICATE THE ESTIMATED
AMOUNT, IF PRACTICABLE, OF THE INDEMNIFIABLE LOSS THAT HAS BEEN OR MAY BE
SUSTAINED BY THE INDEMNITEE.  THE INDEMNIFYING PARTY WILL HAVE THE RIGHT TO
PARTICIPATE IN OR, BY GIVING WRITTEN NOTICE TO THE INDEMNITEE, TO ELECT TO
ASSUME THE DEFENSE OF ANY THIRD PARTY CLAIM AT SUCH INDEMNIFYING PARTY’S EXPENSE
AND BY SUCH INDEMNIFYING PARTY’S OWN COUNSEL; PROVIDED, HOWEVER, THAT THE
COUNSEL FOR THE INDEMNIFYING PARTY WHO SHALL CONDUCT THE DEFENSE OF SUCH THIRD
PARTY CLAIM SHALL BE REASONABLY SATISFACTORY TO THE INDEMNITEE.  THE INDEMNITEE
SHALL COOPERATE IN GOOD FAITH IN SUCH DEFENSE AT SUCH INDEMNITEE’S OWN EXPENSE. 
IF AN INDEMNIFYING PARTY ELECTS NOT TO ASSUME THE DEFENSE OF ANY THIRD PARTY
CLAIM, THE INDEMNITEE MAY COMPROMISE OR SETTLE SUCH THIRD PARTY CLAIM OVER THE
OBJECTION OF THE INDEMNIFYING PARTY, WHICH SETTLEMENT OR COMPROMISE SHALL
CONCLUSIVELY ESTABLISH THE INDEMNIFYING PARTY’S LIABILITY PURSUANT TO THIS
AGREEMENT; PROVIDED, HOWEVER, THAT THE INDEMNITEE PROVIDES WRITTEN NOTICE TO THE
INDEMNIFYING PARTY OF ITS INTENT TO SETTLE AND SUCH NOTICE REASONABLY DESCRIBES
THE TERMS OF SUCH SETTLEMENT AT LEAST TEN (10) BUSINESS DAYS PRIOR TO ENTERING
INTO ANY SETTLEMENT.

 

8.2.2.      IF, WITHIN TWENTY (20) DAYS AFTER AN INDEMNITEE PROVIDES WRITTEN
NOTICE TO THE INDEMNIFYING PARTY OF ANY THIRD PARTY CLAIM, THE INDEMNITEE
RECEIVES WRITTEN NOTICE FROM THE INDEMNIFYING PARTY THAT SUCH INDEMNIFYING PARTY
HAS ELECTED TO ASSUME THE DEFENSE OF SUCH THIRD PARTY CLAIM AS PROVIDED IN
SECTION 8.2.1, THE INDEMNIFYING PARTY WILL NOT BE LIABLE FOR ANY LEGAL EXPENSES
SUBSEQUENTLY

 

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INCURRED BY THE INDEMNITEE IN CONNECTION WITH THE DEFENSE THEREOF; PROVIDED,
HOWEVER, THAT IF THE INDEMNIFYING PARTY SHALL FAIL TO TAKE REASONABLE STEPS
NECESSARY TO DEFEND DILIGENTLY SUCH THIRD PARTY CLAIM WITHIN TWENTY (20) DAYS
AFTER RECEIVING NOTICE FROM THE INDEMNITEE THAT THE INDEMNITEE BELIEVES THE
INDEMNIFYING PARTY HAS FAILED TO TAKE SUCH STEPS, THE INDEMNITEE MAY ASSUME ITS
OWN DEFENSE AND THE INDEMNIFYING PARTY SHALL BE LIABLE FOR ALL REASONABLE
EXPENSES THEREOF.

 

8.2.3.      WITHOUT THE PRIOR WRITTEN CONSENT OF THE INDEMNITEE, WHICH CONSENT
SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED, THE INDEMNIFYING PARTY SHALL NOT
ENTER INTO ANY SETTLEMENT OF ANY THIRD PARTY CLAIM WHICH WOULD LEAD TO LIABILITY
OR CREATE ANY FINANCIAL OR OTHER OBLIGATION ON THE PART OF THE INDEMNITEE FOR
WHICH THE INDEMNITEE IS NOT ENTITLED TO INDEMNIFICATION HEREUNDER.  IF A FIRM
OFFER IS MADE TO SETTLE A THIRD PARTY CLAIM WITHOUT LEADING TO LIABILITY OR THE
CREATION OF A FINANCIAL OR OTHER OBLIGATION ON THE PART OF THE INDEMNITEE FOR
WHICH THE INDEMNITEE IS NOT ENTITLED TO INDEMNIFICATION HEREUNDER AND THE
INDEMNIFYING PARTY DESIRES TO ACCEPT AND AGREE TO SUCH OFFER, THE INDEMNIFYING
PARTY SHALL GIVE WRITTEN NOTICE TO THE INDEMNITEE TO THAT EFFECT.  IF THE
INDEMNITEE FAILS TO CONSENT TO SUCH FIRM OFFER WITHIN TWENTY (20) DAYS AFTER ITS
RECEIPT OF SUCH NOTICE, THE INDEMNIFYING PARTY SHALL BE RELIEVED OF ITS
OBLIGATIONS TO DEFEND SUCH THIRD PARTY CLAIM AND THE INDEMNITEE MAY CONTEST OR
DEFEND SUCH THIRD PARTY CLAIM.  IN SUCH EVENT, THE MAXIMUM LIABILITY OF THE
INDEMNIFYING PARTY AS TO SUCH THIRD PARTY CLAIM WILL BE THE AMOUNT OF SUCH
SETTLEMENT OFFER PLUS REASONABLE COSTS AND EXPENSES PAID OR INCURRED BY
INDEMNITEE UP TO THE DATE OF SAID NOTICE.

 

8.2.4.      ANY CLAIM BY AN INDEMNITEE ON ACCOUNT OF AN INDEMNIFIABLE LOSS WHICH
DOES NOT RESULT FROM A THIRD PARTY CLAIM (A “DIRECT CLAIM”) SHALL BE ASSERTED BY
GIVING THE INDEMNIFYING PARTY REASONABLY PROMPT WRITTEN NOTICE THEREOF, STATING
THE NATURE OF SUCH CLAIM IN REASONABLE DETAIL AND INDICATING THE ESTIMATED
AMOUNT, IF PRACTICABLE, BUT IN ANY EVENT SUCH NOTICE SHALL NOT BE GIVEN LATER
THAN TWENTY (20) DAYS AFTER THE INDEMNITEE BECOMES AWARE OF SUCH DIRECT CLAIM,
AND THE INDEMNIFYING PARTY SHALL HAVE A PERIOD OF TWENTY (20) DAYS WITHIN WHICH
TO RESPOND TO SUCH DIRECT CLAIM.  IF THE INDEMNIFYING PARTY DOES NOT RESPOND
WITHIN SUCH TWENTY (20) DAY PERIOD, THE INDEMNIFYING PARTY SHALL BE DEEMED TO
HAVE ACCEPTED SUCH CLAIM.  IF THE INDEMNIFYING PARTY REJECTS SUCH CLAIM, THE
INDEMNITEE WILL BE FREE TO SEEK ENFORCEMENT OF ITS RIGHT TO INDEMNIFICATION
UNDER THIS AGREEMENT.

 

8.2.5.      THE AMOUNT OF ANY INDEMNIFIABLE LOSS SHALL BE REDUCED TO THE EXTENT
THAT THE INDEMNITEE RECEIVES ANY INSURANCE PROCEEDS WITH RESPECT TO AN
INDEMNIFIABLE LOSS.  IF THE AMOUNT OF ANY INDEMNIFIABLE LOSS, AT ANY TIME
SUBSEQUENT TO THE MAKING OF AN INDEMNITY PAYMENT IN RESPECT THEREOF, IS REDUCED
BY RECOVERY, SETTLEMENT OR OTHERWISE UNDER OR PURSUANT TO ANY INSURANCE
COVERAGE, OR PURSUANT TO ANY CLAIM, RECOVERY, SETTLEMENT OR PAYMENT BY, FROM OR
AGAINST ANY OTHER ENTITY, THE AMOUNT OF SUCH REDUCTION, LESS ANY COSTS, EXPENSES
OR PREMIUMS INCURRED IN CONNECTION THEREWITH (TOGETHER WITH INTEREST THEREON
FROM THE DATE OF PAYMENT THEREOF TO THE DATE OR REPAYMENT AT THE “PRIME RATE” AS
PUBLISHED IN THE WALL

 

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STREET JOURNAL) SHALL PROMPTLY BE REPAID BY THE INDEMNITEE TO THE INDEMNIFYING
PARTY.

 

8.2.6.      A FAILURE TO GIVE TIMELY NOTICE AS PROVIDED IN THIS SECTION 8.2
SHALL NOT AFFECT THE RIGHTS OR OBLIGATIONS OF ANY PARTY HEREUNDER EXCEPT IF, AND
ONLY TO THE EXTENT THAT, AS A RESULT OF SUCH FAILURE, THE PARTY WHICH WAS
ENTITLED TO RECEIVE SUCH NOTICE WAS ACTUALLY PREJUDICED AS A RESULT OF SUCH
FAILURE.

 

9.             TERMINATION

 

9.1.         TERMINATION. THIS AGREEMENT MAY BE TERMINATED AS FOLLOWS:

 

9.1.1.      AT ANY TIME PRIOR TO THE CLOSING DATE BY MUTUAL WRITTEN CONSENT OF
SELLER AND BUYER;

 

9.1.2.      BY SELLER OR BUYER, IF (I) ANY FEDERAL OR STATE COURT OF COMPETENT
JURISDICTION SHALL HAVE ISSUED AN ORDER, JUDGMENT OR DECREE PERMANENTLY
RESTRAINING, ENJOINING OR OTHERWISE PROHIBITING THE CLOSING, AND SUCH ORDER,
JUDGMENT OR DECREE SHALL HAVE BECOME FINAL AND NON-APPEALABLE; OR (II) ANY
STATUTE, RULE, ORDER OR REGULATION SHALL HAVE BEEN ENACTED OR ISSUED BY ANY
GOVERNMENTAL AUTHORITY WHICH, DIRECTLY OR INDIRECTLY, PROHIBITS THE CONSUMMATION
OF THE CLOSING;

 

9.1.3.      BY SELLER OR BUYER IF (I) THE IRS SHALL ADVISE IN WRITING SELLER OR
BUYER THAT THE IRS WILL NOT ISSUE ANY ONE OR MORE OF THE PRIVATE LETTER RULINGS
LISTED ON SCHEDULE 4.3.2 OR 5.3.2, OR (II) ANY OTHER REQUIRED REGULATORY
APPROVAL HAS BEEN DENIED IN A NON-APPEALABLE ORDER, OR (III) THE COMBINED
EFFECTS OF REQUIREMENTS OR CONCERNS OF THE ICC OR OTHER GOVERNMENTAL AUTHORITIES
MAKE IT COMMERCIALLY, ECONOMICALLY OR POLITICALLY UNFEASIBLE, IN THE OPINION OF
SELLER OR BUYER, TO COMPLETE THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT;

 

9.1.4.      BY SELLER OR BUYER IF CLOSING DOES NOT OCCUR WITHIN THREE (3) MONTHS
FOLLOWING RECEIPT OF ALL REQUIRED REGULATORY APPROVALS, UNLESS THE PARTY SEEKING
TO TERMINATE IS RESPONSIBLE FOR ANY FAILURE TO MEET ANY OTHER CONDITION TO
CLOSING;

 

9.1.5.      BY SELLER OR BUYER IF CLOSING DOES NOT OCCUR WITHIN TWO (2) YEARS
FOLLOWING THE DATE OF THIS AGREEMENT (THE “TERMINATION DATE”), UNLESS SUCH PARTY
IS RESPONSIBLE FOR ANY FAILURE TO MEET ANY CONDITION TO CLOSING;

 

9.1.6.      BY BUYER IF THERE HAS BEEN A MATERIAL VIOLATION OR BREACH BY SELLER
OF ANY APPLICABLE COVENANT, REPRESENTATION OR WARRANTY CONTAINED IN THIS
AGREEMENT AND SUCH VIOLATION OR BREACH (I) IS NOT CURED BY THE EARLIER OF THE
CLOSING DATE OR THIRTY (30) DAYS AFTER RECEIPT BY SELLER OF WRITTEN NOTICE
SPECIFYING PARTICULARLY SUCH VIOLATION OR BREACH (PROVIDED THAT IN THE EVENT
SELLER IS ATTEMPTING TO CURE THE VIOLATION OR BREACH IN GOOD FAITH, THEN BUYER
MAY NOT TERMINATE PURSUANT TO THIS PROVISION UNLESS THE VIOLATION OR BREACH IS
NOT CURED WITHIN THIRTY (30) DAYS AFTER ALL OTHER CONDITIONS PRECEDENT TO
CLOSING SET FORTH IN ARTICLE 7 HAVE BEEN EITHER

 

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SATISFIED OR WAIVED); AND (II) SUCH VIOLATION OR BREACH HAS NOT BEEN WAIVED BY
BUYER;

 

9.1.7.      BY SELLER IF THERE HAS BEEN A MATERIAL VIOLATION OR BREACH BY BUYER
OR BUYER’S PARENT OF ANY COVENANT, REPRESENTATION OR WARRANTY CONTAINED IN THIS
AGREEMENT AND SUCH VIOLATION OR BREACH (I) IS NOT CURED BY THE EARLIER OF THE
CLOSING DATE OR THIRTY (30) DAYS AFTER RECEIPT BY BUYER OR BUYER’S PARENT OF
WRITTEN NOTICE SPECIFYING PARTICULARLY SUCH VIOLATION OR BREACH (PROVIDED THAT
IN THE EVENT BUYER OR BUYER’S PARENT, AS THE CASE MAY BE, IS ATTEMPTING TO CURE
THE VIOLATION OR BREACH IN GOOD FAITH, THEN SELLER MAY NOT TERMINATE PURSUANT TO
THIS PROVISION UNLESS THE VIOLATION OR BREACH IS NOT CURED WITHIN THIRTY (30)
DAYS AFTER ALL OTHER CONDITIONS PRECEDENT TO CLOSING SET FORTH IN ARTICLE 7 HAVE
BEEN EITHER SATISFIED OR WAIVED); AND (II) SUCH VIOLATION OR BREACH HAS NOT BEEN
WAIVED BY SELLER; AND

 

9.1.8.      BY SELLER IF A MATERIAL LETTER OF CREDIT DEFAULT OR EVENT OF DEFAULT
HAS OCCURRED AND IS CONTINUING SUBJECT TO NOTICE AND CURE AS DESCRIBED IN THE
CREDIT SUPPORT AGREEMENT.

 

9.1.9.      NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, (I) IF EITHER BUYER
OR BUYER’S PARENT IS IN MATERIAL BREACH OF ANY AGREEMENT, COVENANT,
REPRESENTATION OR WARRANTY IN THIS AGREEMENT, THEN BUYER MAY NOT EXERCISE ANY
RIGHT IT MAY OTHERWISE HAVE TO ELECT TO TERMINATE THIS AGREEMENT UNTIL SUCH
MATERIAL BREACH HAS BEEN CURED, AND (II) IF SELLER IS IN MATERIAL BREACH OF ANY
AGREEMENT, COVENANT, REPRESENTATION OR WARRANTY IN THIS AGREEMENT, THEN SELLER
MAY NOT EXERCISE ANY RIGHT IT MAY OTHERWISE HAVE TO ELECT TO TERMINATE THIS
AGREEMENT UNTIL SUCH MATERIAL BREACH HAS BEEN CURED.

 

9.2.         EFFECT OF TERMINATION.

 

In the event of termination of this Agreement by Seller or Buyer pursuant to
Section 9.1, written notice thereof shall promptly be given by the terminating
Party to the other Party or Parties, and this Agreement shall immediately become
void and there shall be no liability on the part of any Party; provided,
however, that nothing in this Agreement shall relieve a Party from liability for
any willful breach of or willful failure to perform under this Agreement, it
being understood that the provisions of this Agreement requiring each Party to
use Commercially Reasonable Efforts to secure approvals of Governmental
Authorities shall not diminish the rights of any Party to terminate this
Agreement under Section 9.1.3.

 

10.          MISCELLANEOUS PROVISIONS

 

10.1.       AMENDMENT AND MODIFICATION.

 

Subject to applicable law, this Agreement may be amended, modified or
supplemented only by written agreement of Seller and Buyer; provided, however,
that the written consent of ComEd shall be required to amend Sections 2.3.3,
2.3.5 and 8.1.1 under which ComEd is a third-party beneficiary.

 

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10.2.        WAIVER OF COMPLIANCE; CONSENTS.

 

Except as otherwise provided in this Agreement, any failure of any of the
Parties to comply with any obligation, covenant, agreement or condition herein
may be waived by the Party entitled to the benefits thereof only by a written
instrument signed by the Party granting such waiver, but such waiver of such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent failure to comply therewith.

 

10.3.        SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND OBLIGATIONS.

 

10.3.1.    The representations and warranties given or made by any Party to this
Agreement or in the certificates required by Section 7.1.5 or 7.2.5 shall
survive the Closing for a period of twelve (12) months except that (i) the
representations and warranties relating to Taxes and Tax Returns shall survive
the Closing for the period of the applicable statutes of limitation plus any
extensions or waivers thereof; and (ii) all representations and warranties set
forth in Sections 4.1, 4.2, 4.9, 4.16, 5.1, 5.2, 5.6,  5.7 and 6.8 hereof shall
survive the Closing indefinitely.  Notwithstanding the foregoing, no such
limitation of the survival period shall apply in the event of the intentional
misrepresentation or fraudulent breach of any representation or warranty of
Buyer, Buyer’s Parent or Guarantor or Seller contained in this Agreement (it
being understood that the Party seeking indemnity shall bear the burden of
establishing the existence of the intentional misrepresentation or fraudulent
breach).  Each Party shall be entitled to rely upon the representations and
warranties of the other Party or Parties set forth herein, notwithstanding any
investigation or audit conducted before or after the Closing Date or the
decision of any Party to complete the Closing.

 

10.3.2.    EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, THE
COVENANTS AND OBLIGATIONS OF THE PARTIES SET FORTH IN THIS AGREEMENT, INCLUDING
WITHOUT LIMITATION THE INDEMNIFICATION OBLIGATIONS OF THE PARTIES UNDER
ARTICLE 8, SHALL SURVIVE THE CLOSING INDEFINITELY, AND THE PARTIES SHALL BE
ENTITLED TO THE FULL PERFORMANCE THEREOF BY THE OTHER PARTIES HERETO WITHOUT
LIMITATION AS TO TIME OR AMOUNT (EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH
HEREIN).

 

10.4.        NOTICES.

 

All notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally or by facsimile transmission, or mailed by
overnight courier or registered or certified mail (return receipt requested),
postage prepaid, to the recipient Party at its address (or at such other address
or facsimile number for a Party as shall be specified by like notice; provided,
however, that notices of a change of address shall be effective only upon
receipt thereof):

 

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10.4.1.    IF TO SELLER, TO:

 

Exelon Nuclear

Exelon Generation Company, LLC

4300 Winfield Road

Warrenville, Illinois 60555

Attention: Thomas O’Neill

 

with copies to:

 

Exelon Nuclear

Exelon Generation Company, LLC

4300 Winfield Road

Warrenville, Illinois 60555

Attention: Bradley Fewell

 

and

 

Exelon Corporation

10 South Dearborn Street

Chicago, Illinois 60603

Attention: Bruce G. Wilson

 

10.4.2.    IF TO BUYER, TO:

 

ZionSolutions, LLC

423 West 300 South, Suite 200

Salt Lake City, Utah 84101

Attention: John Christian

 

with a copy to:

 

ZionSolutions, LLC

423 West 300 South, Suite 200

Salt Lake City, Utah 84101

Attention: Val Christensen

 

10.4.3.    IF TO BUYER’S PARENT OR GUARANTOR, TO:

 

EnergySolutions, LLC

423 West 300 South, Suite 200

Salt Lake City, Utah 84101

Attention: John Christian

 

with a copy to:

 

EnergySolutions, LLC

423 West 300 South, Suite 200

 

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Salt Lake City, Utah 84101

Attention: Val Christensen

 

10.5.        ASSIGNMENT.

 

This Agreement and all of the provisions hereof shall be binding upon and inure
to the benefit of the Parties and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by Buyer, Buyer’s Parent or Guarantor,
including by operation of law, without the prior written consent of Seller, such
consent not to be unreasonably withheld, nor is this Agreement intended (except
as specifically provided herein) to confer upon any other Person except the
Parties any rights, interests, obligations or remedies hereunder.  Any
assignment in contravention of the foregoing sentence shall be null and void and
without legal effect on the rights and obligations of the Parties.  No provision
of this Agreement shall create any third party beneficiary rights in any
employee or former employee of Seller (including any beneficiary or dependent
thereof) in respect of continued employment or resumed employment, and no
provision of this Agreement shall create any rights in any such Persons in
respect of any benefits that may be provided, directly or indirectly, under any
employee benefit plan or arrangement except as expressly provided for
thereunder.  In the event Buyer assigns this Agreement with the consent of
Seller pursuant to this Section 10.5, such assignee shall be defined as “Buyer”
for all purposes hereunder thereafter.

 

10.6.        GOVERNING LAW.

 

This Agreement shall be governed by and construed in accordance with the law of
the State of Illinois (without giving effect to conflict of law principles) as
to all matters, including matters of validity, construction, effect, performance
and remedies, except to the extent the Federal Arbitration Act would otherwise
apply to the provisions of Section 6.21.9.  THE PARTIES AGREE THAT VENUE IN ANY
AND ALL ACTIONS AND PROCEEDINGS RELATED TO THE SUBJECT MATTER OF THIS AGREEMENT
SHALL BE IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS (EASTERN DIVISION) OR ANY STATE COURT SITUATED THEREIN.  THE FOREGOING
COURTS SHALL HAVE EXCLUSIVE JURISDICTION FOR SUCH PURPOSE AND THE PARTIES
IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS AND IRREVOCABLY
WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH ACTION
OR PROCEEDING.  SERVICE OF PROCESS MAY BE MADE IN ANY MANNER RECOGNIZED BY SUCH
COURTS.  EACH OF THE PARTIES IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

10.7.        COUNTERPARTS.

 

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

 

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10.8.        SCHEDULES AND EXHIBITS.

 

Except as otherwise provided in this Agreement, all Exhibits and Schedules
referred to herein are intended to be and hereby are specifically made a part of
this Agreement. Any fact or item disclosed on any Schedule to this Agreement
shall be deemed disclosed on all other Schedules to this Agreement to which such
fact or item may reasonably apply so long as such disclosure is in sufficient
detail to enable a Party to identify the facts or items to which it applies. 
Any fact or item disclosed on any Schedule hereto shall not by reason only of
such inclusion be deemed to be material and shall not be employed as a point of
reference in determining any standard of materiality under this Agreement.

 

10.9.        ENTIRE AGREEMENT.

 

This Agreement, the Confidentiality Agreements and the Ancillary Agreements,
including the Exhibits, Schedules, documents, certificates and instruments
referred to herein or therein, and any other documents that specifically
reference this Section 10.9, embody the entire agreement and understanding of
the Parties in respect of the transactions contemplated by this Agreement and
shall supersede all previous oral and written and all contemporaneous oral
negotiations, commitments and understandings including, without limitation, all
letters, memoranda or other documents or communications, whether oral, written
or electronic, submitted or made by (i) either Buyer, Buyer’s Parent or
Guarantor or their Representatives to Seller or its Representatives, or
(ii) Seller or its Representatives to either Buyer, Buyer’s Parent or Guarantor
or their Representatives, in connection with the sale process that occurred
prior to the execution of this Agreement or otherwise in connection with the
negotiation and execution of this Agreement.  No communications by or on behalf
of Seller, including responses to any questions or inquiries, whether orally, in
writing or electronically, and no information provided in any data room or any
copies of any information from any data room provided to Buyer or Buyer’s Parent
or any other information shall be deemed to (i) constitute a representation,
warranty, covenant, undertaking or agreement of Seller or (ii) be part of this
Agreement.

 

10.10.      ACKNOWLEDGMENT; INDEPENDENT DUE DILIGENCE.

 

Buyer, Buyer’s Parent and Guarantor acknowledge that Seller has not made any
representation or warranty, express or implied, as to the accuracy or
completeness of any information regarding the Facilities not included in this
Agreement and the Schedules hereto.  Buyer and Buyer’s Parent further
acknowledge that:  (i) Buyer, Buyer’s Parent and Guarantor, either alone or
together with any individuals or entities that Buyer, Buyer’s Parent or
Guarantor has retained to advise it with respect to the transactions
contemplated by this Agreement, has knowledge and experience in transactions of
this type and in the business to which the Facilities relate and is therefore
capable of evaluating the risks and merits of acquiring the Facilities;
(ii) Buyer has relied on its own independent investigation, and has not relied
on any information or representations furnished by Seller or any representative
or agent of Seller (except as specifically set forth in this Agreement), in
determining to enter into this Agreement; (iii) neither Seller nor any
representative or agent of Seller has given any investment, legal or other
advice or rendered any opinion as to whether the purchase of the Facilities is
prudent, and Buyer, Buyer’s Parent and Guarantor are not relying on any
representation or warranty by Seller or any Affiliate, representative or agent
of Seller except as set forth in this Agreement; (iv) Buyer, Buyer’s Parent

 

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and Guarantor have made independently and without reliance on Seller (except to
the extent that Buyer, Buyer’s Parent and Guarantor have relied on the
representations and warranties of Seller in this Agreement) their own analysis
of the Zion Assets and of Seller for the purpose of acquiring the Zion Assets as
Buyer, Buyer’s Parent and Guarantor considered appropriate to make their
evaluation.

 

10.11.      BULK SALES LAWS.

 

Buyer acknowledges that, notwithstanding anything in this Agreement to the
contrary, Seller will not comply with the provision of the bulk sales laws of
any jurisdiction in connection with the transactions contemplated by this
Agreement.  Buyer hereby waives compliance by Seller with the provisions of the
bulk sales laws of all applicable jurisdictions.

 

10.12.      NO JOINT VENTURE.

 

Nothing in this Agreement creates or is intended to create an association,
trust, partnership, joint venture or other entity or similar legal relationship
among the Parties, or impose a trust, partnership or fiduciary duty, obligation,
or liability on or with respect to the Parties.  Except as expressly provided
herein, no Party is or shall act as or be the agent or representative of any
other Party.

 

10.13.      CHANGE IN LAW.

 

If and to the extent that any Laws or regulations that govern any aspect of this
Agreement shall change, so as to make any aspect of this transaction unlawful,
then the Parties agree to make such modifications to this Agreement as may be
reasonably necessary for this Agreement to accommodate any such legal or
regulatory changes, without materially changing the overall benefits or
consideration expected hereunder by any Party.

 

10.14.      SEVERABILITY.

 

Any term or provision of this Agreement that is held invalid or unenforceable in
any situation shall not affect the validity or enforceability of the remaining
terms and provisions hereof or the validity or enforceability of the offending
term or provision in any other situation; provided, however, that the remaining
terms and provisions of this Agreement may be enforced only to the extent that
such enforcement in the absence of any invalid terms and provisions would not
result in (i) deprivation of a Party of a material aspect of its original
bargain upon execution of this Agreement or any of the Ancillary Agreements,
(ii) unjust enrichment of a Party, or (iii) any other manifestly unfair or
inequitable result.

 

10.15.      SPECIFIC PERFORMANCE.

 

Each Party acknowledges and agrees that the other Party or Parties would be
damaged irreparably in the event any of the provisions of this Agreement are not
performed in accordance with their specific terms or otherwise are breached. 
Accordingly, each Party agrees that the other Parties shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in addition to any other remedy to which it may be entitled,
at law or in equity.

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their
respective duly authorized officers as of the date first above written.

 

 

 

EXELON GENERATION COMPANY, LLC

 

 

 

 

By:

/s/ THOMAS S. O’NEILL

 

Name:

THOMAS S. O’NEILL

 

Title:

VP New Plant Development

 

 

 

 

 

ZION SOLUTIONS, LLC

 

 

 

 

By:

/s/ JOHN A. CHRISTIAN

 

Name:

JOHN A. CHRISTIAN

 

Title:

President

 

 

 

 

 

ENERGYSOLUTIONS, LLC

 

 

 

 

By:

/s/ R. STEVE CREAMER

 

Name:

R. STEVE CREAMER

 

Title:

Chief Executive Officer

 

 

 

 

 

ENERGYSOLUTIONS, INC.

 

 

 

 

By:

/s/ R. STEVE CREAMER

 

Name:

R. STEVE CREAMER

 

Title:

Chief Executive Officer

 

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EXHIBIT A

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are
hereby acknowledged, and pursuant to the Asset Sale Agreement dated as of
December 11, 2007 (the “Agreement”) by and among EXELON GENERATION COMPANY, LLC,
a Pennsylvania limited liability company (“Seller”), ZIONSOLUTIONS, LLC, a
Delaware limited liability company (“Buyer”), ENERGYSOLUTIONS, LLC, a Utah
limited liability company, and ENERGYSOLUTIONS, INC., a Delaware corporation,
the Seller, intending to be legally bound, hereby assigns and delegates to the
Buyer, and the Buyer, intending to be legally bound, hereby assumes and agrees
to pay, perform, and otherwise discharge, when due, all of the Assumed
Liabilities.

 

Terms used and not defined herein have the meanings given to them in the
Agreement.  Nothing herein is intended to augment, limit or supersede in any way
the representations, warranties or covenants of the Seller or the Buyer set
forth in the Agreement.

 

Notwithstanding anything to the contrary contained in this Assignment and
Assumption Agreement, the Assumed Liabilities do not include, and the Seller
does not hereby assign or delegate to the Buyer, and the Buyer does not hereby
agree to pay, perform, or otherwise discharge, any of the Excluded Liabilities.

 

IN WITNESS WHEREOF, the Seller and the Buyer have caused this Assignment and
Assumption Agreement to be executed this          day of                     
200  .

 

 

EXELON GENERATION COMPANY, LLC

 

 

 

 

 

 

By:

 

 

Title:

 

 

 

 

 

ZIONSOLUTIONS, LLC

 

 

 

 

By:

 

 

Title:

 

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EXHIBIT B

 

BILL OF SALE

 

FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are
hereby acknowledged, and pursuant to the Asset Sale Agreement dated December 11,
2007  (the “Agreement”) by and among EXELON GENERATION COMPANY, LLC, a
Pennsylvania limited liability company (“Seller”), ZIONSOLUTIONS, LLC, a
Delaware limited liability company (“Buyer”), ENERGYSOLUTIONS, LLC, a Utah
limited liability company, and ENERGYSOLUTIONS, INC., a Delaware corporation,
and intending to be legally bound hereby, the Seller does hereby unconditionally
and irrevocably sell, convey, grant, assign and transfer to the Buyer, its
successors and assigns, all of the Seller’s right, title and interest in and to
the Zion Assets.

 

Terms used and not defined herein have the meanings given to them in the
Agreement.  Nothing herein is intended to augment, limit or supersede in any way
the representations and warranties of the Seller set forth in the Agreement.

 

Notwithstanding anything to the contrary contained in this Bill of Sale, the
Zion Assets do not include, and the Seller does not hereby sell, convey, assign
or transfer to the Buyer, any of the Seller’s right, title or interest in or to
the Excluded Assets.

 

IN WITNESS WHEREOF, the Seller has caused this Bill of Sale to be executed this
         day of                      200  .

 

 

 

EXELON GENERATION COMPANY, LLC

 

 

 

 

 

 

By:

 

 

Title:

 

 

 

 

ACCEPTED AND AGREED:

 

 

 

ZIONSOLUTIONS, LLC

 

 

 

 

By:

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

EXHIBIT C

 

 

LEASE AGREEMENT

 

 

BY AND BETWEEN

 

 

EXELON GENERATION COMPANY, LLC

 

 

(as Landlord)

 

 

AND

 

 

ZIONSOLUTIONS, LLC

 

 

(as Tenant)

 

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TABLE OF CONTENTS

 

 

Page

 

 

ARTICLE I DEFINITIONS

1

 

 

ARTICLE II PREMISES

6

 

 

ARTICLE III LEASE TERM

7

 

 

ARTICLE IV BASE RENT

8

 

 

ARTICLE V NET LEASE; IMPOSITIONS; UTILITIES AND SERVICES

9

 

 

ARTICLE VI USE OF PREMISES

10

 

 

ARTICLE VII ASSIGNMENT AND SUBLETTING

12

 

 

ARTICLE VIII CONDITION; ALTERATIONS

12

 

 

ARTICLE IX INSPECTION

17

 

 

ARTICLE X INSURANCE

17

 

 

ARTICLE XI DAMAGE OR DESTRUCTION

20

 

 

ARTICLE XII CONDEMNATION

21

 

 

ARTICLE XIII DEFAULT

21

 

 

ARTICLE XIV REPRESENTATIONS, WARRANTIES AND COVENANTS OF LANDLORD

22

 

 

ARTICLE XV GENERAL PROVISIONS

23

 

 

EXHIBIT A — Legal Description of Premises

 

EXHIBIT B — Plan Showing Premises, Switchyard and Synchronous Condenser Area

 

EXHIBIT C — Plans and Specifications for ISFSI Island

 

EXHIBIT D — List of Major Equipment to be Removed from the Premises

 

 

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LEASE AGREEMENT

 

THIS LEASE AGREEMENT (this “Lease”) is dated as of the          day of
                                 200   (the “Lease Commencement Date”), by and
between EXELON GENERATION COMPANY, LLC, a Pennsylvania limited liability company
(“Landlord”), and ZIONSOLUTIONS, LLC, a Delaware limited liability company
(“Tenant”).

 

RECITALS:

 

A. Landlord owns the land legally described on Exhibit A attached hereto on
which there is located two nuclear generating stations and other associated and
ancillary facilities (collectively, the “Zion Station”).

 

B. Landlord, Tenant and EnergySolutions LLC, a Utah limited liability company
and Tenant’s parent (“EnergySolutions”), are parties to the Asset Sale Agreement
(as hereinafter defined) pursuant to which, among other things, Tenant agreed to
purchase certain assets and assume certain liabilities related to the Zion
Station for the purpose of Tenant performing radiological decommissioning,
environmental remediation and other activities relating to the decommissioning
of the Zion Station.

 

C. The Asset Sale Agreement contemplates that Landlord and Tenant shall enter
into this Lease.

 

ARTICLE I

DEFINITIONS

 

ALL TERMS NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANING ASCRIBED TO THEM
IN THE ASSET SALE AGREEMENT OR THE PUT OPTION AGREEMENT (AS DEFINED BELOW).

 

1.1 AGGREGATE BENCHMARK RATE OF RETURN: AS OF ANY DATE OF DETERMINATION, MEANS
THE PERCENT CHANGE IN THE FAIR MARKET VALUE OF THE ASSETS OF THE BENCHMARK FUND
DETERMINED ON A CUMULATIVE BASIS FROM THE LEASE COMMENCEMENT DATE TO THE MOST
RECENT ANNIVERSARY OF THE LEASE COMMENCEMENT DATE.

 

1.2 AGGREGATE INFLATION RATE: AS OF ANY DATE OF DETERMINATION, MEANS THE PERCENT
CHANGE IN THE INFLATION INDEX DETERMINED ON A CUMULATIVE BASIS FROM THE LEASE
COMMENCEMENT DATE THROUGH THE MOST RECENT ANNIVERSARY OF THE LEASE COMMENCEMENT
DATE.

 

1.3 ANNUAL BENCHMARK RATE OF RETURN: AS OF ANY DATE OF DETERMINATION, MEANS THE
PERCENT CHANGE IN THE FAIR MARKET VALUE OF THE ASSETS OF THE BENCHMARK FUND
DURING THE TWELVE-MONTH PERIOD ENDED ON THE MOST RECENT ANNIVERSARY OF THE LEASE
COMMENCEMENT DATE.

 

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1.4 ANNUAL INFLATION RATE: AS OF ANY DATE OF DETERMINATION, MEANS THE PERCENT
CHANGE IN THE INFLATION INDEX AS OF THE MOST RECENT ANNIVERSARY OF THE LEASE
COMMENCEMENT DATE OVER THE INFLATION INDEX AS OF THE PRECEDING ANNIVERSARY OF
THE LEASE COMMENCEMENT DATE.

 

1.5 ASSET SALE AGREEMENT: THAT CERTAIN ASSET SALE AGREEMENT DATED AS OF
DECEMBER 11, 2007, BY AND AMONG LANDLORD, TENANT, ENERGYSOLUTIONS, AND
ENERGYSOLUTIONS, INC., AS AMENDED FROM TIME TO TIME.

 

1.6 ASSIGN:  AS DEFINED IN SECTION 7.1.

 

1.7 BASE RENT:  ONE DOLLAR ($1) PER LEASE YEAR.

 

1.8 BENCHMARK FUND: A HYPOTHETICAL FUND OF INVESTED ASSETS CONSISTING OF
(A) $7,500,000 INVESTED IN THE S&P 500 INDEX AS OF THE LEASE COMMENCEMENT DATE,
AND (B) $92,500,000 INVESTED IN THE LEHMAN AGGREGATE BOND INDEX AS OF THE LEASE
COMMENCEMENT DATE.

 

1.9 CLAIMS:  AS DEFINED IN SECTION 10.4.

 

1.10 CLASS B WASTE:  MEANS LOW LEVEL WASTE CLASSIFIED BY THE NRC AS CLASS B LOW
LEVEL WASTE IN ACCORDANCE WITH THE PROVISIONS OF 10 C.F.R. §61.55 AND 10 C.F.R.
§61.56.

 

1.11 CLASS C WASTE:  MEANS LOW LEVEL WASTE CLASSIFIED BY THE NRC AS CLASS C LOW
LEVEL WASTE IN ACCORDANCE WITH THE PROVISIONS OF 10 C.F.R. §61.55 AND 10 C.F.R.
§61.56.

 

1.12 CONDEMNED:  AS DEFINED IN SECTION 12.1.

 

1.13 DELAY LEASE YEAR:  A PERIOD OF TWELVE (12) CONSECUTIVE MONTHS COMMENCING ON
THE TARGET COMPLETION DATE, AND EACH SUCCESSIVE TWELVE (12) MONTH PERIOD
THEREAFTER.

 

1.14 DELAY RENT:  AS DEFINED IN SECTION 4.2.

 

1.15 DELAY RENT PERIOD:  AS DEFINED IN SECTION 4.2.

 

1.16 EDISON EASEMENT:  AS DEFINED IN SECTION 2.2.

 

1.17 ENERGYSOLUTIONS:  AS DEFINED IN RECITAL B.

 

1.18 EVENT OF DEFAULT:  AS DEFINED IN THE CREDIT SUPPORT AGREEMENT.

 

1.19 EXCLUSION AREA:  AS DEFINED IN 10 C.F.R. §50.2.

 

1.20 FORCE MAJEURE:  ACTS OF GOD; WAR; ACTS OF CIVIL DISOBEDIENCE; ACTS OF
TERRORISM; FIRES; EXPLOSIONS; EARTHQUAKES; EPIDEMICS; LANDSLIDES; HURRICANES OR
WINDSTORMS; RIOTS; FLOODS; SABOTAGE OR OTHER MALEVOLENT ACTS; LABOR STRIKES OR
OTHER SIMILAR ACTS OF INDUSTRIAL DISTURBANCE (OTHER THAN ACTS OF EMPLOYEES OF
THE NONPERFORMING PARTY OR ITS AFFILIATES); AND/OR ACTS, DELAYS IN ACTING, OR
FAILURE TO ACT OF A GOVERNMENTAL BODY (INCLUDING, WITHOUT LIMITATION, A TAKING
OR CONDEMNATION) OR PJM INTERCONNECTION LLC; PROVIDED, HOWEVER, AN EVENT SHALL
ONLY BE CONSIDERED AN EVENT OF FORCE MAJEURE TO THE EXTENT (A) SUCH EVENT IS
BEYOND THE REASONABLE CONTROL OF THE NON-PERFORMING PARTY; (B) THE
NON-PERFORMING PARTY IS UNABLE TO PREVENT, AVOID, OVERCOME OR CURE

 

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SUCH EVENT THROUGH THE EXERCISE OF DILIGENT EFFORTS; (C) SUCH EVENT IS NOT THE
PROXIMATE RESULT OF THE NON-PERFORMING PARTY’S ACT, OMISSION, FAULT OR
NEGLIGENCE, INCLUDING, BUT NOT LIMITED TO, FAILURE TO MAINTAIN EQUIPMENT IN GOOD
WORKING ORDER, FAILURE TO COMPLY WITH ANY CONTRACT, OR FAILURE TO COMPLY WITH
ALL APPLICABLE LAWS; AND (D) SUCH EVENT RESULTS IN A MATERIAL IMPAIRMENT OF THE
PARTY’S ABILITY TO PERFORM.  FOR THE AVOIDANCE OF DOUBT, IT IS EXPRESSLY AGREED
THAT THE UNAVAILABILITY OF A DISPOSAL FACILITY FOR CLASS B AND CLASS C WASTE IS
NOT AN EVENT OF FORCE MAJEURE.

 

1.21 IMPOSITIONS:  ALL PRESENT AND FUTURE REAL ESTATE TAXES AND ASSESSMENTS
(INCLUDING GENERAL AND SPECIAL ASSESSMENTS, IF ANY) WHICH BECOME DUE AND PAYABLE
DURING ANY CALENDAR YEAR IN WHICH ANY PORTION OF THE LEASE TERM FALLS THAT ARE
IMPOSED UPON LANDLORD OR TENANT OR ASSESSED AGAINST THE PREMISES, THE FIXTURES,
MACHINERY, EQUIPMENT OR SYSTEMS USED IN CONNECTION WITH THE PREMISES, THE
BUSINESS BEING OPERATED ON THE PREMISES, OR THE ACTIVITIES CONDUCTED BY TENANT
OR ITS AFFILIATES OR SUBCONTRACTORS AT THE PREMISES, INCLUDING WITHOUT
LIMITATION, TAXES IN THE NATURE OF A SALES, USE, GROSS RECEIPTS OR OTHER TAX OR
LEVY ON THE RENTS PAYABLE BY TENANT; PROVIDED, HOWEVER, THAT IMPOSITIONS SHALL
NOT INCLUDE LANDLORD’S INCOME TAXES.

 

1.22 INFLATION INDEX: AS OF ANY ANNIVERSARY OF THE LEASE COMMENCEMENT DATE,
MEANS THE CONSUMER PRICE INDEX, SERVICES, CUSASNS, AS PUBLISHED FOR THE MOST
RECENT AVAILABLE CALENDAR QUARTER BY GLOBAL INSIGHT COMPANY.  IF THE BASIS FOR
SUCH INDEX IS CHANGED, THEN THE INFLATION INDEX SHALL BE ADJUSTED IN ACCORDANCE
WITH THE CONVERSION FACTOR PUBLISHED BY GLOBAL INSIGHT COMPANY.  IF SUCH INDEX
IS DISCONTINUED OR REVISED, THE INDEX USED FOR PURPOSES OF THIS LEASE SHALL BE
ADJUSTED OR REPLACED BY THE PARTIES HERETO IN ORDER TO OBTAIN SUBSTANTIALLY THE
SAME RESULT AS WOULD BE OBTAINED IF THE INFLATION INDEX HAD NOT BEEN SO
DISCONTINUED OR REVISED

 

1.23 ISFSI ISLAND:  AS DEFINED IN SECTION 8.2.

 

1.24 ISFSI CAMPAIGN:  AS DEFINED IN SECTION 8.3.

 

1.25 LANDLORD GROUP: AS DEFINED IN SECTION 8.10.

 

1.26 LANDLORD’S INCOME TAXES:  ANY FEDERAL, STATE, OR LOCAL INCOME TAX IMPOSED
ON LANDLORD.

 

1.27 LANDLORD INDEMNIFIED PARTIES: AS DEFINED IN SECTION 8.10.

 

1.28 LEASE: AS DEFINED IN THE PREAMBLE.

 

1.29 LEASE DEFAULT: AS DEFINED IN SECTION 13.1.

 

1.30 LEASE COMMENCEMENT DATE: AS DEFINED IN THE PREAMBLE.

 

1.31 LEASE TERM:  THE PERIOD COMMENCING ON THE LEASE COMMENCEMENT DATE AND
EXPIRING ON THE EARLIER OF (A) THE DATE OF THE PUT OPTION CLOSING (AS DEFINED IN
THE PUT OPTION AGREEMENT), OR (B) THE DATE OF THE TERMINATION OF THE NRC
LICENSES FOLLOWING COMPLETION OF ALL WORK REQUIRED TO BE PERFORMED BY TENANT
UNDER THIS LEASE.  FOR PURPOSES OF THIS LEASE, THE NRC LICENSES SHALL BE DEEMED
TO HAVE BEEN TERMINATED IF AND WHEN THE FOOTPRINT OF THE NRC LICENSES HAS BEEN
REDUCED TO THE ISFSI ISLAND.

 

3

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1.32 LEASE YEAR:  A PERIOD OF TWELVE (12) CONSECUTIVE MONTHS COMMENCING ON THE
LEASE COMMENCEMENT DATE, AND EACH SUCCESSIVE TWELVE (12) MONTH PERIOD
THEREAFTER.

 

1.33 MARKET EVENT: OCCURS WHEN (A) THE ANNUAL BENCHMARK RATE OF RETURN MINUS THE
ANNUAL INFLATION RATE IS LESS THAN TWO PERCENT, AND (B) THE AGGREGATE BENCHMARK
RATE OF RETURN MINUS THE AGGREGATE INFLATION RATE IS ALSO LESS THAN TWO PERCENT;
PROVIDED THAT NO MORE THAN TWO MARKET EVENTS SHALL OCCUR DURING THE LEASE TERM
UNLESS OTHERWISE AGREED BY THE PARTIES TO THIS LEASE.

 

1.34 MARKET EVENT EXTENSION: THE TWELVE-MONTH PERIOD BEGINNING WITH THE
OCCURRENCE OF A MARKET EVENT; PROVIDED THAT NO MORE THAN TWO MARKET EVENT
EXTENSIONS SHALL OCCUR DURING THE LEASE TERM UNLESS OTHERWISE AGREED BY THE
PARTIES TO THIS LEASE.

 

1.35 MATERIAL LETTER OF CREDIT DEFAULT: AS DEFINED IN THE CREDIT SUPPORT
AGREEMENT.

 

1.36 MORTGAGE:  AS DEFINED IN SECTION 15.15(A).

 

1.37 NEW CONTROL AREA:  AS DEFINED IN SECTION 8.8(C).

 

1.38 NEW VAR FACILITY:  A NEW FACILITY, IF LANDLORD OR AN AFFILIATE ELECTS TO
CONSTRUCT SUCH FACILITY PURSUANT TO SECTION 8.6, FOR THE PRODUCTION OF VARS
(I.E., ELECTRIC REACTIVE POWER DELIVERED BY MEANS OF AN ALTERNATING CURRENT
SOURCE) OR A FACILITY PROVIDING SIMILAR FUNCTIONALITY THROUGH OTHER MEANS.

 

1.39 NEW VAR FACILITY AREA:  THAT PORTION OF THE PREMISES, IF ANY, IDENTIFIED AS
THE NEW VAR FACILITY AREA IN A WRITTEN NOTICE FROM LANDLORD TO TENANT; PROVIDED,
HOWEVER, THAT THE LOCATION AND SIZE OF THE NEW VAR FACILITY AREA SHALL BE
REASONABLY SATISFACTORY TO TENANT; AND PROVIDED, FURTHER, THAT IF AND TO THE
EXTENT THAT THE CONTEMPLATED LOCATION OF THE ISFSI ISLAND IS REQUIRED TO BE
MODIFIED ON ACCOUNT OF ENVIRONMENTAL AND/OR GEOLOGICAL FACTORS, AND THE
RELOCATION OF THE ISFSI ISLAND NECESSITATES A CORRESPONDING RELOCATION OF THE
NEW VAR FACILITY AREA, THEN THE NEW VAR FACILITY AREA SHALL BE ANOTHER PORTION
OF THE PREMISES, AS REASONABLY DETERMINED BY LANDLORD AND TENANT.

 

1.40 PREMISES:  THAT CERTAIN PIECE OR PARCEL OF LAND LOCATED IN ZION, LAKE
COUNTY, ILLINOIS, AS MORE FULLY DESCRIBED ON EXHIBIT A ATTACHED HERETO AND MADE
A PART HEREOF, TOGETHER WITH ALL IMPROVEMENTS, FIXTURES AND OTHER ITEMS OF REAL
PROPERTY NOW OR HEREAFTER LOCATED THEREUPON AND ALL APPURTENANCES, RIGHTS,
PRIVILEGES, EASEMENTS AND OTHER PROPERTY INTERESTS EXISTING THEREON AND
BENEFITING, BELONGING OR PERTAINING THERETO, SUBJECT TO POSSIBLE REDUCTION
PURSUANT TO SECTION 12.1.

 

1.41 PUT OPTION AGREEMENT:  THAT CERTAIN PUT OPTION AGREEMENT DATED AS OF EVEN
DATE HEREWITH BY AND BETWEEN TENANT AND LANDLORD, AS AMENDED FROM TIME TO TIME.

 

1.42 SCHEDULE EXTENSION CONDITIONS: (A) DELAYS CAUSED BY, OR RESULTING FROM
COMPLIANCE WITH REQUESTS (OTHER THAN REQUESTS FOR PERFORMANCE IN ACCORDANCE WITH
THE ASSET SALE AGREEMENT, THIS LEASE OR OTHER ANCILLARY AGREEMENTS OR
REQUIREMENTS OF LAW) BY, LANDLORD OR ITS AFFILIATES, INCLUDING, BUT NOT LIMITED
TO, DELAYS IN CONNECTION WITH THE PREPARATION FOR TRANSPORTATION AND
TRANSPORTATION OF SPENT NUCLEAR FUEL OFF-SITE (IF LANDLORD DETERMINES TO
TRANSFER SPENT NUCLEAR

 

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FUEL OFF-SITE AND PURSUANT TO AN ARRANGEMENT AGREED UPON BETWEEN TENANT AND
LANDLORD), OR DELAYS CAUSED BY THE CONSTRUCTION OF A NEW VAR FACILITY, EXCEPT
DELAYS BEYOND ANY AGREED UPON SCHEDULE FOR SUCH ADDITIONAL WORK REQUESTS SUBJECT
TO A SEPARATE SCHEDULE EXTENSION CONDITION; (B) DELAYS CAUSED BY THE DISCOVERY
OF MATERIAL UNDISCLOSED ENVIRONMENTAL LIABILITIES; (C) DELAYS CAUSED BY MATERIAL
CHANGES IN APPLICABLE LAWS; (D) DELAY IN PERFORMANCE BY (I) VENDORS THAT PROVIDE
SERVICES OR EQUIPMENT RELATED TO THE STORAGE OR TRANSPORTATION OF SPENT NUCLEAR
FUEL, (II) VENDORS THAT PROVIDE LIFTING, RIGGING AND SEGMENTING SERVICES OR
EQUIPMENT RELATED TO THE REMOVAL OF REACTOR VESSELS AND INTERNALS AND
CONTAINMENT STRUCTURE, AND (III) RAILROADS THAT ARE INTENDED TO PROVIDE RAIL
ACCESS, RAIL CARS AND GONDOLAS; (E) DELAYS CAUSED BY THE ISSUANCE OF A
PRELIMINARY INJUNCTION OR OTHER ORDER OR DECREE, WHICH INJUNCTION IS
SUBSEQUENTLY LIFTED; (F) THE OCCURRENCE OF A MARKET EVENT; AND/OR (G) DELAYS
CAUSED BY, OR RESULTING FROM, LANDLORD’S FAILURE TIMELY TO PERFORM ITS
OBLIGATIONS UNDER THIS LEASE, INCLUDING, WITHOUT LIMITATION, ITS OBLIGATIONS
UNDER SECTIONS 8.8(B) AND (C); PROVIDED, HOWEVER, THAT EXCEPT WITH RESPECT TO
CLAUSE (F), AN EVENT THAT CAUSES DELAYS SHALL ONLY BE A SCHEDULE EXTENSION
CONDITION TO THE EXTENT (1) SUCH EVENT IS BEYOND THE REASONABLE CONTROL OF
ENERGYSOLUTIONS AND TENANT; (2) ENERGYSOLUTIONS AND TENANT ARE UNABLE TO
PREVENT, AVOID OR OVERCOME SUCH EVENT THROUGH THE EXERCISE OF DILIGENT EFFORTS
AND PROCEED WITH WORK NOT AFFECTED BY THE SCHEDULE EXTENSION CONDITION; AND
(3) SUCH EVENT IS NOT THE RESULT OF ENERGYSOLUTIONS’ OR TENANT’S OR ANY
AFFILIATE’S ACT, OMISSION, FAULT OR NEGLIGENCE.  A SCHEDULE EXTENSION CONDITION
WILL CONTINUE ONLY SO LONG AS TENANT OR ENERGYSOLUTIONS IS USING DILIGENT
EFFORTS TO OVERCOME SUCH SCHEDULE EXTENSION CONDITION AND ONLY UNTIL IT HAS BEEN
REMEDIATED, RESOLVED OR COMPLIED WITH OR, IN THE CASE OF CLAUSE (F), ONLY FOR
THE DURATION OF THE MARKET EVENT EXTENSION.  FOR THE AVOIDANCE OF DOUBT, IT IS
EXPRESSLY AGREED THAT DELAY DUE TO THE UNAVAILABILITY OF A DISPOSAL FACILITY FOR
CLASS B AND CLASS C WASTE IS NOT A SCHEDULE EXTENSION CONDITION.

 

1.43 SITE RESTORATION MILESTONE:  AS DEFINED IN SECTION 6.2.

 

1.44 SWITCHYARD:  THAT PORTION OF THE PREMISES IDENTIFIED AS THE SWITCHYARD ON
EXHIBIT B.

 

1.45 SYNCHRONOUS CONDENSER AREA:  THAT PORTION OF THE PREMISES IDENTIFIED AS THE
SYNCHRONOUS CONDENSER AREA ON EXHIBIT B.

 

1.46 SYNCHRONOUS CONDENSERS:  THE TWO WESTINGHOUSE 800 MVAR SYNCHRONOUS
CONDENSERS AND THE ASSOCIATED EQUIPMENT, EXCITATION SYSTEMS, STARTING MOTORS,
COOLING AND LUBRICATION EQUIPMENT, SUPPORT SYSTEMS, CONDUITS, CONTROLS, CABLES,
FIXTURES AND OTHER IMPROVEMENTS LOCATED WITHIN THE SYNCHRONOUS CONDENSER AREA.

 

1.47 SUBSTANTIAL COMPLETION: THE DATE UPON WHICH:  (A) ALL MATERIAL TENANT
PHYSICAL WORK AT THE PREMISES IS SUBSTANTIALLY COMPLETED AS REQUIRED BY THIS
LEASE, AND (B) EITHER THE AMENDED NRC LICENSES ARE APPROVED BY THE NRC, OR IF
THE PARTIES HAVE AGREED UPON AND ARRANGED FOR THE TRANSFER OF SPENT NUCLEAR FUEL
AWAY FROM THE PREMISES, THE NRC LICENSES ARE TERMINATED.

 

1.48 TARGET COMPLETION DATE:  THE DATE THAT IS 120 MONTHS FROM THE LEASE
COMMENCEMENT DATE, AS EXTENDED ON A DAY BY DAY BASIS FOR EVENTS OF FORCE MAJEURE
AND/OR SCHEDULE EXTENSION CONDITIONS.

 

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1.49 TENANT DELAY:  SUBJECT TO THE OTHER PROVISIONS OF THIS SECTION 1.46, ANY
ACT OR OMISSION OF ENERGYSOLUTIONS, TENANT OR THEIR RESPECTIVE CONTRACTORS THAT
DELAYS LANDLORD IN THE PERFORMANCE OF ITS OBLIGATIONS UNDER SECTION 8.8(B);
PROVIDED, HOWEVER, THAT AN ACT OR OMISSION OF ENERGYSOLUTIONS, TENANT OR THEIR
RESPECTIVE CONTRACTORS SHALL ONLY BE A TENANT DELAY TO THE EXTENT (A) THE DELAY
RESULTING THEREFROM IS BEYOND THE REASONABLE CONTROL OF LANDLORD; (B) LANDLORD
IS UNABLE TO PREVENT, AVOID OR OVERCOME THE DELAY RESULTING FROM SUCH ACT OR
OMISSION THROUGH THE EXERCISE OF DILIGENT EFFORTS; AND (C) THE APPLICABLE ACT OR
OMISSION IS NOT THE RESULT OF LANDLORD’S ACT, OMISSION, FAULT OR NEGLIGENCE.

 

1.50 TENANT GROUP:  AS DEFINED IN SECTION 8.10.

 

1.51 TENANT INDEMNIFIED PARTIES: AS DEFINED IN SECTION 8.10.

 

1.52 THIRD PARTY CLAIM:  AS DEFINED IN SECTION 8.10.

 

1.53 TRANSFER TAXES: MEANS ANY TAX IMPOSED BY THE STATE OF ILLINOIS PURSUANT TO
THE REAL ESTATE TRANSFER TAX LAW (35 ILCS 200/31-1 TO 31-70) WHICH BECOMES
PAYABLE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS LEASE.

 

1.54 UTILITIES AND SERVICES:  AS DEFINED IN SECTION 5.4.

 

1.55 ZION STATION:  AS DEFINED IN RECITAL A.

 

ARTICLE II

PREMISES

 

2.1 LEASE OF PREMISES.  LANDLORD LEASES THE PREMISES TO TENANT WITHOUT ANY
WARRANTIES OF TITLE OTHER THAN THOSE SET FORTH IN THE ASSET SALE AGREEMENT, AND
TENANT LEASES THE PREMISES FROM LANDLORD, FOR THE TERM AND UPON THE CONDITIONS
AND COVENANTS SET FORTH IN THIS LEASE, SUBJECT TO PERMITTED ENCUMBRANCES AND
SUBJECT TO THE RIGHTS OF LANDLORD AND COMED AND THEIR CONTRACTORS (A) TO ACCESS
THE SWITCHYARD, SYNCHRONOUS CONDENSER AREA, NEW VAR FACILITY AREA AND NEW
CONTROL AREA, (B) TO OPERATE AND MAINTAIN THE SWITCHYARD AND SYNCHRONOUS
CONDENSERS, AND (C) TO CONSTRUCT AND OPERATE THE NEW VAR FACILITY AND A NEW
CONTROL FACILITY; FOR ALL MATTERS DESCRIBED IN CLAUSES (A), (B) AND (C), TO THE
SAME EXTENT AS COMED HAS UNDER THE EDISON EASEMENT.

 

2.2 EASEMENTS.

 

(A) TENANT HEREBY ACKNOWLEDGES THAT THE LEASE IS SUBJECT TO THE PERMITTED
ENCUMBRANCES WHICH INCLUDE THAT CERTAIN FACILITIES, OPERATION AND EASEMENT
AGREEMENT DATED AS OF JANUARY 12, 2001, AND RECORDED IN THE OFFICE OF THE
RECORDER OF DEEDS, LAKE COUNTY, ILLINOIS ON JANUARY 23, 2001 AS DOCUMENT
NO. 4635121, AND RE-RECORDED ON FEBRUARY 20, 2001, AS DOCUMENT NO. 4647301, AS
AMENDED BY THAT CERTAIN AMENDMENT TO EASEMENT DATED                 , 2007 (AS
SO AMENDED, THE “EDISON EASEMENT”), WHICH GRANTS COMED, AMONG OTHER THINGS,
CERTAIN EASEMENTS OVER THE PREMISES (I) TO ACCESS THE SWITCHYARD, SYNCHRONOUS
CONDENSER AREA, NEW VAR FACILITY AREA AND NEW CONTROL AREA, (II) TO OPERATE AND
MAINTAIN THE SWITCHYARD AND

 

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SYNCHRONOUS CONDENSERS, AND (III) TO CONSTRUCT AND OPERATE THE NEW VAR FACILITY
AND A NEW CONTROL FACILITY, ALL AS MORE FULLY PROVIDED IN THE EDISON EASEMENT.

 

(B) THE EDISON EASEMENT IS SUBJECT TO THE REQUIREMENTS OF THE NRC LICENSES, THE
ACCESS CONTROL REQUIREMENTS IMPLEMENTED THEREUNDER AND TENANT’S RIGHT FROM TIME
TO TIME TO ESTABLISH REASONABLE RULES AND REGULATIONS CONCERNING THE USE AND
ENJOYMENT OF SUCH EASEMENT, INCLUDING TO THE EXTENT REQUIRED BY 10 CFR PART 100,
THE ABILITY TO EXCLUDE PERSONNEL AND PROPERTY FROM THE EXCLUSION AREA BUT
LIMITED TO THOSE CIRCUMSTANCES WHEN TENANT IS REQUIRED TO HAVE THE ABILITY TO
EXERCISE SUCH AUTHORITY.  LANDLORD AND COMED SHALL BE RESPONSIBLE FOR THE ACTS
AND OMISSIONS OF THEIR DESIGNEES UNDER SUCH EASEMENT AS IF THE ACTS AND
OMISSIONS OF SUCH DESIGNEES CONSTITUTED THE ACTS AND OMISSIONS OF LANDLORD OR
COMED.   LANDLORD AND ITS DESIGNEES SHALL, UPON TENANT’S REQUEST FROM TIME TO
TIME, CAUSE COMED TO PROVIDE TENANT AND ITS DESIGNEES SAFE AND REASONABLE ACCESS
TO THE SWITCHYARD (INCLUDING, WITHOUT LIMITATION, DE-POWERING THE SAME) AS
REASONABLY NECESSARY TO PERMIT TENANT TO PERFORM ITS OBLIGATIONS UNDER THIS
LEASE, BUT SUBJECT IN ALL CASES TO GOOD UTILITY PRACTICES.

 

(C) LANDLORD ACKNOWLEDGES AND AGREES THAT THE NEW VAR FACILITY SHALL NOT BE
CONNECTED TO ANY SEWER, WATER, OR OTHER UTILITIES LOCATED ON OR DIRECTLY SERVING
THE BALANCE OF THE PREMISES, OTHER THAN THE SWITCHYARD AND THE NEW CONTROL AREA,
AND THAT LANDLORD SHALL ARRANGE TO OBTAIN ALL UTILITIES DIRECTLY FROM
THIRD-PARTY SERVICE PROVIDERS.  THE NEW VAR FACILITY AREA WILL BE LOCATED
OUTSIDE OF THE CURRENT PLANT SECURITY AREA AND WILL BE FENCED OFF FROM THE
REMAINING PREMISES.  ACCESS TO THE NEW VAR FACILITY AREA AND THE SWITCHYARD WILL
BE CONTROLLED BY LANDLORD AND/OR COMED AUTHORIZED PERSONNEL. LANDLORD FURTHER
ACKNOWLEDGES AND AGREES THAT LANDLORD SHALL PROCURE A SEPARATE NPDES PERMIT FOR
THE NEW VAR FACILITY AND THE SWITCHYARD.

 

ARTICLE III

LEASE TERM

 

3.1 LEASE TERM.  ALL OF THE PROVISIONS OF THIS LEASE SHALL BE IN FULL FORCE AND
EFFECT FROM AND AFTER THE LEASE COMMENCEMENT DATE.  THE LEASE TERM SHALL
COMMENCE ON THE LEASE COMMENCEMENT DATE AND SHALL CONTINUE FOR THE DURATION OF
THE LEASE TERM (UNLESS TERMINATED EARLY PURSUANT TO THIS LEASE).

 

3.2 Excess NDT Assets.  If, at the termination of the Lease Term, Tenant has
completed all Decommissioning, site restoration and other work required by this
Lease but Tenant has not exercised the Put Option within thirty (30) days after
the date on which the Put Option first becomes exercisable, Tenant shall take
all actions required by Law or otherwise required by the ICC to return, as
promptly as reasonably practicable, any funds or other assets remaining in the
Buyer QDF and the Buyer NDF that are no longer required for Decommissioning
expenses.

 

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ARTICLE IV

BASE RENT; DELAY RENT

 

4.1 BASE RENT.  FROM AND AFTER THE LEASE COMMENCEMENT DATE, TENANT SHALL PAY THE
BASE RENT IN ADVANCE ON THE FIRST DAY OF EACH LEASE YEAR.

 

4.2 DELAY RENT.  IF SUBSTANTIAL COMPLETION HAS NOT OCCURRED PRIOR TO THE TARGET
COMPLETION DATE, THEN, WITH RESPECT TO THE PERIOD COMMENCING ON THE TARGET
COMPLETION DATE AND EXPIRING ON THE DATE ON WHICH SUBSTANTIAL COMPLETION OCCURS
(THE “DELAY RENT PERIOD”), TENANT SHALL PAY ADDITIONAL RENT (“DELAY RENT”) IN
ARREARS ON THE DAY OF EACH CALENDAR MONTH WHICH IS THE SAME DAY OF THE MONTH AS
THE TARGET COMPLETION DATE (OR THE LAST DAY OF THE CALENDAR MONTH IF THE TARGET
COMPLETION DATE IS THE LAST DAY OF A CALENDAR MONTH), AS FOLLOWS:

 

(A) DURING THE FIRST DELAY LEASE YEAR (IF APPLICABLE), THE MONTHLY INSTALLMENTS
OF DELAY RENT SHALL EACH BE IN AN AMOUNT EQUAL TO TWO HUNDRED THOUSAND DOLLARS
($200,000);

 

(B) DURING THE SECOND DELAY LEASE YEAR (IF APPLICABLE), THE MONTHLY INSTALLMENTS
OF DELAY RENT SHALL EACH BE IN AN AMOUNT EQUAL TO EIGHT HUNDRED THOUSAND DOLLARS
($800,000);

 

(C) DURING THE THIRD DELAY LEASE YEAR (IF APPLICABLE), THE MONTHLY INSTALLMENTS
OF DELAY RENT SHALL EACH BE IN AN AMOUNT EQUAL TO ONE MILLION TWO HUNDRED FIFTY
THOUSAND DOLLARS ($1,250,000);

 

(D) DURING THE FOURTH DELAY LEASE YEAR (IF APPLICABLE), THE MONTHLY INSTALLMENTS
OF DELAY RENT SHALL EACH BE IN AN AMOUNT EQUAL TO ONE MILLION SEVEN HUNDRED
FIFTY THOUSAND DOLLARS ($1,750,000); AND

 

(E) ON THE FIRST DAY OF THE FIFTH DELAY LEASE YEAR AND ON THE FIRST DAY OF EACH
DELAY LEASE YEAR THEREAFTER (IF APPLICABLE), THE DELAY RENT SHALL INCREASE BY AN
AMOUNT EQUAL TO THE PRODUCT OF (I) THE DELAY RENT IN EFFECT IMMEDIATELY PRIOR TO
SUCH INCREASE MULTIPLIED BY (II) THE PERCENTAGE INCREASE BETWEEN THE INFLATION
INDEX AS OF THE ANNIVERSARY OF THE LEASE COMMENCEMENT DATE PRECEDING THE FIRST
DAY OF THE PRIOR DELAY LEASE YEAR AND THE INFLATION INDEX AS OF THE ANNIVERSARY
OF THE LEASE COMMENCEMENT DATE PRECEDING THE FIRST DAY OF THEN CURRENT DELAY
LEASE YEAR.

 

If the Delay Rent Period expires on a day other than a day on which Delay Rent
is due, then Tenant’s liabilities for Delay Rent pursuant to this Section 4.2
for such period for which Delay Rent would otherwise be due shall be prorated by
multiplying the applicable monthly installment of Delay Rent for the applicable
full period by a fraction, the numerator of which is the number of days falling
within the Delay Rent Period since the previous installment of Delay Rent was
due, and the denominator of which is the number of days since the previous
installment of Delay Rent was due through and including the date of the next
scheduled installment of Delay Rent.

 

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ARTICLE V
NET LEASE; IMPOSITIONS; UTILITIES AND SERVICES

 

5.1 NET LEASE.  EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, THIS LEASE SHALL
BE AN ABSOLUTE NET LEASE.  ACCORDINGLY, SUBJECT TO SECTION 5.5, TENANT SHALL PAY
ALL TAXES, INSURANCE AND OTHER COSTS, EXPENSES AND OBLIGATIONS OF EVERY KIND AND
NATURE WHATSOEVER RELATING TO THE PREMISES, INCLUDING WITHOUT LIMITATION, COSTS
WITH RESPECT TO THE OWNERSHIP, POSSESSION, USE AND OPERATION THEREOF, WHICH
ACCRUE PRIOR TO THE EXPIRATION OF THE LEASE TERM. TRANSFER TAXES, IF ANY, SHALL
BE SHARED EQUALLY BY LANDLORD AND TENANT.  TENANT’S OBLIGATION TO PAY ALL
AMOUNTS DESCRIBED IN THIS SECTION 5.1 SHALL SURVIVE THE EXPIRATION OR EARLIER
TERMINATION OF THE LEASE TERM.

 

5.2 PAYMENT OF IMPOSITIONS.  ON OR BEFORE THE LEASE COMMENCEMENT DATE, TENANT
SHALL NOTIFY THE APPROPRIATE TAXING AUTHORITIES TO DELIVER DIRECTLY TO TENANT
ALL STATEMENTS AND INVOICES FOR THE IMPOSITIONS, EFFECTIVE AS OF THE LEASE
COMMENCEMENT DATE.  TENANT SHALL PAY ALL IMPOSITIONS PRIOR TO THE DATE THEY
BECOME DUE, SUBJECT TO REIMBURSEMENT PURSUANT TO SECTION 5.5, TO THE EXTENT
PERMITTED THEREBY.  TO THE EXTENT THAT ANY SUCH IMPOSITIONS ARE IMPOSED UPON
LANDLORD AND PAID BY LANDLORD, TENANT SHALL REIMBURSE LANDLORD FOR SUCH
IMPOSITIONS.  IF THE LEASE TERM BEGINS OR EXPIRES ON A DAY OTHER THAN THE FIRST
DAY OR THE LAST DAY OF A CALENDAR YEAR, THEN TENANT’S LIABILITY FOR IMPOSITIONS
FOR SUCH CALENDAR YEAR SHALL BE APPORTIONED BY MULTIPLYING THE AMOUNT OF THE
IMPOSITIONS FOR THE FULL CALENDAR YEAR BY A FRACTION, THE NUMERATOR OF WHICH IS
THE NUMBER OF DAYS DURING SUCH CALENDAR YEAR FALLING WITHIN THE LEASE TERM, AND
THE DENOMINATOR OF WHICH IS THREE HUNDRED SIXTY-FIVE (365).

 

5.3 CONTEST OF IMPOSITIONS.  IF THE SWITCHYARD AND THE NEW VAR FACILITY AREA ARE
TAXED AS A SEPARATE TAX PARCEL(S) AS PROVIDED IN SECTION 5.5, TENANT MAY CONTEST
OR REVIEW THE EXISTENCE, AMOUNT OR APPLICABILITY OF ANY IMPOSITIONS ON THAT
PORTION OF THE PREMISES THAT DOES NOT INCLUDE THE SWITCHYARD OR NEW VAR FACILITY
AREA BY APPROPRIATE LEGAL OR ADMINISTRATIVE PROCEEDINGS, AT TENANT’S SOLE COST
AND EXPENSE; PROVIDED, HOWEVER, THAT SUCH CONTESTS ARE ACCOMPLISHED IN THE
MANNER EXPRESSLY PERMITTED THEREFOR IN THE JURISDICTION IN WHICH THE PREMISES IS
LOCATED, SUCH THAT IN NO EVENT WHATSOEVER SHALL THE FAILURE TO PAY THE
IMPOSITION BEING CONTESTED IMPAIR IN ANY MANNER THE PREMISES.  IN NO EVENT MAY
TENANT ENTER INTO ANY AGREEMENT CONCERNING THE TAXATION OF THE PREMISES THE TERM
OF WHICH EXTENDS BEYOND THE LEASE TERM WITHOUT LANDLORD’S PRIOR WRITTEN
CONSENT.  LANDLORD SHALL EXECUTE SUCH DOCUMENTS AS ARE REASONABLY NECESSARY IN
CONNECTION WITH ANY SUCH CONTEST.  TENANT SHALL BE ENTITLED TO ANY REFUND
RECEIVED WITH RESPECT TO IMPOSITIONS PAID BY TENANT.

 

5.4 UTILITIES AND SERVICES.  TENANT, AT ITS OWN EXPENSE, SHALL ARRANGE WITH THE
APPROPRIATE UTILITY COMPANIES AND SERVICE PROVIDERS FOR THE PROVISION TO THE
PREMISES OF WATER, SEWER, TRASH COLLECTION, ELECTRICITY, GAS, TELEPHONE,
LANDSCAPING, SNOW REMOVAL, ACCESS CONTROL AND ALL OTHER UTILITIES AND SERVICES
DESIRED BY TENANT (EXCLUDING ANY AND ALL SUCH UTILITIES AND SERVICES DESIRED AND
OBTAINED BY LANDLORD OR COMED IN CONNECTION WITH THE SWITCHYARD, SYNCHRONOUS
CONDENSER AREA (UNTIL LANDLORD OR COMED GIVES WRITTEN NOTICE TO TENANT THAT THE
SYNCHRONOUS CONDENSERS HAVE BEEN RELOCATED OR ABANDONED IN PLACE), AND NEW VAR
FACILITY WHICH SHALL BE SEPARATELY METERED AND BILLED TO LANDLORD OR COMED)
(“UTILITIES AND SERVICES”).  ON OR BEFORE THE LEASE COMMENCEMENT DATE, TENANT
SHALL NOTIFY THE APPROPRIATE UTILITY AND SERVICE PROVIDERS TO DELIVER DIRECTLY
TO TENANT ALL STATEMENTS AND INVOICES FOR THE AMOUNTS FOR WHICH TENANT IS
RESPONSIBLE PURSUANT TO THIS SECTION 5.4, EFFECTIVE AS OF THE LEASE COMMENCEMENT
DATE.  TENANT SHALL PAY DIRECTLY TO THE APPROPRIATE UTILITY COMPANIES AND
SERVICE PROVIDERS ALL CHARGES FOR ALL UTILITIES CONSUMED IN AND SERVICES
PERFORMED FOR THE PREMISES, AS AND WHEN SUCH CHARGES BECOME DUE

 

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AND PAYABLE.  TO THE EXTENT THE INVOICES FOR ANY SUCH UTILITIES AND SERVICES ARE
RECEIVED AND PAID BY LANDLORD, TENANT SHALL REIMBURSE LANDLORD FOR SUCH CHARGES.

 

5.5  REIMBURSEMENT BY LANDLORD.  LANDLORD SHALL BE RESPONSIBLE FOR IMPOSITIONS
THAT RELATE TO THE SWITCHYARD AND SYNCHRONOUS CONDENSER AREA (PRIOR TO THE DATE
ON WHICH LANDLORD OR COMED GIVES WRITTEN NOTICE TO TENANT THAT THE SYNCHRONOUS
CONDENSERS HAVE BEEN RELOCATED OR ABANDONED IN PLACE) AS PROVIDED BELOW IN THIS
SECTION 5.5.  IN THE EVENT THE SWITCHYARD IS NOT CURRENTLY TAXED AS SEPARATE TAX
PARCELS, LANDLORD SHALL PETITION THE APPROPRIATE GOVERNMENTAL AUTHORITIES TO
CAUSE THE SWITCHYARD  TO BE TAXED AS A SEPARATE TAX PARCEL FOR PROPERTY TAX
PURPOSES.  TENANT SHALL REIMBURSE LANDLORD UPON DEMAND FOR ANY OUT-OF-POCKET
COSTS NOT TO EXCEED $10,000 INCURRED BY LANDLORD IN OBTAINING SUCH PROPERTY TAX
DIVISION, INCLUDING A LAND SURVEY, LEGAL DESCRIPTION AND ACREAGE CALCULATION.
PRIOR TO THE DATE THAT THE SWITCHYARD IS TAXED AS A SEPARATE TAX PARCEL FOR
PROPERTY TAX PURPOSES, LANDLORD SHALL REIMBURSE TENANT FOR IMPOSITIONS
ATTRIBUTABLE TO THE LAND UNDER THE SWITCHYARD IN AN AMOUNT EQUAL TO * PERCENT
(*%) OF THE PROPERTY TAXES ALLOCABLE TO THE LAND IN TAX PARCEL 04-23-100-003 AND
* PERCENT (*%) OF THE PROPERTY TAXES ALLOCABLE TO THE LAND IN TAX PARCEL
04-22-401-020.  PRIOR TO THE DATE THAT THE SWITCHYARD IS TAXED AS A SEPARATE TAX
PARCEL FOR PROPERTY TAX PURPOSES, LANDLORD SHALL REIMBURSE TENANT $2,297 PER
YEAR FOR IMPOSITIONS ATTRIBUTABLE TO IMPROVEMENTS IN THE SWITCHYARD. AFTER THE
SWITCHYARD IS TAXED AS A SEPARATE TAX PARCEL FOR PROPERTY TAX PURPOSES, LANDLORD
SHALL PAY THE IMPOSITIONS THAT RELATE TO THE SWITCHYARD.  PRIOR TO THE DATE ON
WHICH LANDLORD OR COMED GIVES WRITTEN NOTICE TO TENANT THAT THE SYNCHRONOUS
CONDENSERS HAVE BEEN RELOCATED OR ABANDONED IN PLACE, LANDLORD SHALL REIMBURSE
TENANT $183,431 PER YEAR FOR IMPOSITIONS ATTRIBUTABLE TO IMPROVEMENTS IN USE BY
LANDLORD OR COMED IN THE SYNCHRONOUS CONDENSER AREA.   ALL OF LANDLORD’S
OBLIGATIONS TO REIMBURSE TENANT IN RESPECT OF PROPERTY TAXES AS SET FORTH IN
THIS SECTION 5.5 SHALL BE PRORATED FOR PARTIAL YEARS AND SHALL BE PAYABLE IN TWO
INSTALLMENTS ON MARCH 1 AND OCTOBER 1 IN EACH YEAR DURING THE LEASE TERM.  IF
LANDLORD OR ITS AFFILIATE ELECTS TO CONSTRUCT THE NEW VAR FACILITY ON THE
PREMISES, LANDLORD SHALL PETITION THE APPROPRIATE GOVERNMENTAL AUTHORITIES TO
CAUSE THE NEW VAR FACILITY AREA TO BE TAXED AS A SEPARATE TAX PARCEL FOR
PROPERTY TAX PURPOSES, AND LANDLORD SHALL REIMBURSE TENANT FOR IMPOSITIONS
ATTRIBUTABLE TO THE NEW VAR FACILITY AREA AND IMPROVEMENTS IN THE NEW VAR
FACILITY AREA.

 

[* PERCENTAGES WILL BE DETERMINED ON THE BASIS OF SURVEYS BEFORE THE LEASE
COMMENCEMENT DATE.]

 

ARTICLE VI
USE OF PREMISES

 

6.1  USE OF PREMISES.  TENANT SHALL USE AND OCCUPY THE PREMISES ONLY FOR THE
PERFORMANCE OF TENANT’S OBLIGATIONS UNDER THIS LEASE, THE ASSET SALE AGREEMENT
AND THE OTHER DOCUMENTS CONTEMPLATED BY THE ASSET SALE AGREEMENT.

 

6.2  SITE RESTORATION MILESTONES.  TENANT SHALL USE DILIGENT EFFORTS TO PERFORM
REQUIRED DECOMMISSIONING WORK ON A SCHEDULE CALCULATED TO ACHIEVE EACH OF THE
FOLLOWING ON OR BEFORE THE RESPECTIVE DATES INDICATED BELOW (EACH A “SITE
RESTORATION MILESTONE”), IT BEING UNDERSTOOD

 

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THAT THE APPLICABLE DEADLINE FOR ANY PARTICULAR SITE RESTORATION MILESTONE SHALL
BE SUBJECT TO EXTENSION FOR EVENTS OF FORCE MAJEURE AND SCHEDULE EXTENSION
CONDITIONS THAT AFFECT THE PERFORMANCE OF WORK REQUIRED UNDER THIS LEASE TO
ACHIEVE THAT SITE RESTORATION MILESTONE:

 

(A) TENANT SHALL SUBMIT TO THE NRC INFORMATION SUPPORTING A “LICENSE TERMINATION
PLAN” (E.G. SITE RELEASE CRITERIA, SURVEY PLANS, AND OTHER RELEVANT DATA) WITHIN
54 MONTHS AFTER THE LEASE COMMENCEMENT DATE;

 

(B) TENANT SHALL COMPLETE REMOVAL OF THE MAJOR EQUIPMENT LISTED ON EXHIBIT D
FROM THE PREMISES WITHIN 66 MONTHS AFTER THE LEASE COMMENCEMENT DATE; AND

 

(C) TENANT SHALL COMPLETE THE ISFSI CAMPAIGN WITHIN 72 MONTHS AFTER THE LEASE
COMMENCEMENT DATE.

 

6.3  DEFERRAL OF RECEIVABLES.  FOR EACH MONTH IN WHICH TENANT FAILS TO ACHIEVE
ANY SITE RESTORATION MILESTONE BY THE APPLICABLE DEADLINE, TENANT SHALL DEFER,
AND SHALL CAUSE ITS AFFILIATES TO DEFER, RECEIVABLES DUE AND PAYABLE FROM THE
BUYER QDF, THE BUYER NDF OR THE BUYER BACKUP NDT IN AN AMOUNT EQUAL TO
$5,000,000 PER MONTH (PRORATED FOR PARTIAL MONTHS) OR SUCH LESSER AMOUNT AS MAY
BE DUE TO TENANT AND ITS AFFILIATES IN SUCH MONTH.  SUCH MONTHLY DEFERRALS OF
RECEIVABLES SHALL CONTINUE UNTIL COMPLETION OF THE APPLICABLE SITE RESTORATION
MILESTONE, AT WHICH POINT SUCH RECEIVABLES MAY BE PAID, WITHOUT INTEREST, FROM
THE BUYER QDF, THE BUYER NDF OR THE BUYER BACKUP NDT.

 

6.4  TARGET COMPLETION DATE.  TENANT SHALL USE DILIGENT EFFORTS TO PERFORM
REQUIRED DECOMMISSIONING AND OTHER WORK REQUIRED UNDER THIS LEASE ON A SCHEDULE
CALCULATED TO ACHIEVE SUBSTANTIAL COMPLETION BY THE TARGET COMPLETION DATE.

 

6.5  NOTICE OF FORCE MAJEURE AND SCHEDULE EXTENSION CONDITIONS.  TENANT SHALL
GIVE PROMPT WRITTEN NOTICE TO LANDLORD IF ANY EVENT OF FORCE MAJEURE OR SCHEDULE
EXTENSION CONDITION SHALL OCCUR OR EXIST, STATING THE EVENTS OR CONDITIONS THAT
CONSTITUTE THE EVENT OF FORCE MAJEURE OR SCHEDULE EXTENSION CONDITION AND THE
STEPS TENANT IS TAKING OR INTENDS TO TAKE TO OVERCOME SUCH EVENTS OR CONDITIONS,
IF ANY.  FAILURE OF TENANT TO PROVIDE LANDLORD THE NOTICE REQUIRED BY THE
PRECEDING SENTENCE WITHIN NINETY (90) DAYS AFTER THE DATE ON WHICH THE EVENT OF
FORCE MAJEURE OR SCHEDULE EXTENSION CONDITION FIRST OCCURS, OR, IF LATER, FIRST
BECOMES REASONABLY APPARENT, SHALL BE DEEMED A WAIVER OF TENANT’S RIGHTS
RELATING TO OR ARISING FROM SUCH EVENT OR CONDITION.  TENANT SHALL USE DILIGENT
EFFORTS TO OVERCOME EVENTS OF FORCE MAJEURE AND SCHEDULE EXTENSION CONDITIONS. 
TENANT SHALL GIVE PROMPT WRITTEN NOTICE TO LANDLORD UPON THE TERMINATION OF ANY
EVENT OF FORCE MAJEURE OR SCHEDULE EXTENSION CONDITION.  NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, FAILURE OR DELAY OF TENANT TO
PROVIDE LANDLORD ANY OF THE NOTICES REQUIRED BY THE PRECEDING SENTENCE SHALL NOT
WAIVE TENANT’S RIGHTS RELATING TO OR ARISING FROM AN EVENT OF FORCE MAJEURE OR
SCHEDULE EXTENSION CONDITION, UNLESS SUCH FAILURE CAUSES MATERIAL PREJUDICE TO
LANDLORD.

 

6.6  PSDAR.  TENANT SHALL NOT, WITHOUT LANDLORD’S CONSENT, WHICH SHALL NOT BE
UNREASONABLY WITHHELD, AMEND THE PSDAR FOR THE ZION STATION IN ANY MANNER THAT
WOULD REASONABLY BE EXPECTED TO RESULT IN THE ACHIEVEMENT OF SUBSTANTIAL
COMPLETION AFTER THE TARGET COMPLETION DATE.

 

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6.7  SECURITY.  TENANT SHALL BE RESPONSIBLE FOR THE PROVISION OF SECURITY AND
ACCESS CONTROL FOR THE SITE IN ACCORDANCE WITH APPLICABLE LAWS AND GOOD UTILITY
PRACTICES.

 

6.8  LANDLORD ACCESS.  WITH ADVANCE NOTICE, LANDLORD SHALL HAVE REASONABLE
ACCESS TO THE PREMISES, SUBJECT TO THE REQUIREMENTS OF THE NRC LICENSES AND THE
ACCESS CONTROL AND SITE SECURITY PROGRAMS IMPLEMENTED THEREUNDER AND TO TENANT’S
AND ITS AFFILIATES’ MANAGEMENT PERSONNEL FOR PURPOSES OF MONITORING (AT
LANDLORD’S EXPENSE) THE PERFORMANCE BY TENANT OF ITS OBLIGATIONS UNDER THIS
LEASE, BUT SHALL HAVE NO RIGHT TO DIRECT OR MANAGE SUCH SERVICES, DICTATE THE
SCHEDULING OF SUCH SERVICES OR TO MAKE DETERMINATIONS AS TO WHETHER OR WHAT
PORTION OF BUYER QDF OR BUYER NDF FUNDS SHOULD  BE RELEASED TO REIMBURSE TENANT
OR ITS AFFILIATES FOR COSTS AND EXPENSES INCURRED IN THE PERFORMANCE OF SUCH
OBLIGATIONS.

 

ARTICLE VII
ASSIGNMENT AND SUBLETTING

 

7.1  NO ASSIGNMENT OR SUBLETTING.  TENANT SHALL NOT ASSIGN, SUBLET, MORTGAGE OR
OTHERWISE TRANSFER OR ENCUMBER (COLLECTIVELY, “ASSIGN”) THIS LEASE OR SUBLET THE
PREMISES OR ANY PART THEREOF WITHOUT THE EXPRESS WRITTEN CONSENT OF LANDLORD,
WHICH CONSENT MAY BE GIVEN OR WITHHELD IN LANDLORD’S SOLE AND ABSOLUTE
DISCRETION.

 

7.2  RESTRICTIONS AND OBLIGATIONS EXTEND TO TRANSFEREES.  PROVIDED LANDLORD
CONSENTS TO TENANT ASSIGNING THIS LEASE, WHICH SUCH CONSENT MAY BE GIVEN OR
WITHHELD IN LANDLORD’S SOLE AND ABSOLUTE DISCRETION, ALL RESTRICTIONS AND
OBLIGATIONS IMPOSED PURSUANT TO THIS LEASE ON TENANT SHALL BE DEEMED TO EXTEND
TO ANY SUBTENANT, ASSIGNEE OR OTHER TRANSFEREE AND TENANT SHALL CAUSE SUCH
PERSON OR ENTITY TO COMPLY WITH SUCH RESTRICTIONS AND OBLIGATIONS AND TENANT
SHALL REMAIN LIABLE UNDER THIS LEASE TO THE SAME EXTENT AS IF IT HAD NOT
ASSIGNED THIS LEASE.

 

ARTICLE VIII
CONDITION; ALTERATIONS; DECOMMISSIONING AND OTHER WORK

 

8.1  AS-IS CONDITION.  TENANT ACKNOWLEDGES THAT IT HAS BEEN GIVEN AN OPPORTUNITY
TO EXAMINE THE PREMISES.  EXCEPT AS EXPRESSLY SET FORTH IN THE ASSET SALE
AGREEMENT OR THIS LEASE, TENANT HEREBY ACCEPTS THE CONDITION OF THE PREMISES IN
ITS AS-IS, WHERE-IS CONDITION, WITH ALL FAULTS.  EXCEPT AS EXPRESSLY SET FORTH
IN THE ASSET SALE AGREEMENT OR THIS LEASE, NO REPRESENTATIONS AS TO THE
CONDITION, REPAIR OR COMPLIANCE WITH APPLICABLE LAWS, AND NO AGREEMENTS TO MAKE
ANY ALTERATIONS, REPAIRS OR IMPROVEMENTS IN OR ABOUT THE PREMISES HAVE BEEN MADE
BY OR ON BEHALF OF LANDLORD.  TENANT ACKNOWLEDGES AND AGREES THAT ITS SOLE
REMEDY FOR BREACH OF ANY REPRESENTATION OR WARRANTY OF LANDLORD IN THE ASSET
SALE AGREEMENT CONCERNING THE CONDITION OF THE PREMISES SHALL BE PURSUANT TO THE
APPLICABLE PROVISIONS OF THE ASSET SALE AGREEMENT.

 

8.2  ISFSI ISLAND.  TENANT SHALL, AT ITS EXPENSE, CONSTRUCT IN A GOOD AND
WORKMANLIKE MANNER AN INDEPENDENT SPENT FUEL STORAGE INSTALLATION (THE “ISFSI
ISLAND”) IN ACCORDANCE IN ALL MATERIAL RESPECTS WITH THE PLANS AND
SPECIFICATIONS ATTACHED HERETO AS EXHIBIT C. TENANT SHALL BE RESPONSIBLE, AT ITS
EXPENSE, FOR THE MAINTENANCE AND OPERATION OF THE ISFSI ISLAND DURING THE

 

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PERIOD COMMENCING ON THE DATE ON WHICH THE SAME IS SUBSTANTIALLY COMPLETED AND
EXPIRING AT THE EXPIRATION OR EARLIER TERMINATION OF THE LEASE TERM.

 

8.3  ISFSI CAMPAIGN.  UPON THE SUBSTANTIAL COMPLETION OF THE ISFSI ISLAND,
TENANT SHALL, AT ITS EXPENSE AND IN COMPLIANCE WITH APPLICABLE LAWS, PLACE ALL
SPENT NUCLEAR FUEL AND GREATER THAN CLASS C WASTE LOCATED AT THE PREMISES AS OF
THE LEASE COMMENCEMENT DATE INTO CASKS AND PLACE AND STORE SUCH CASKS AT THE
ISFSI ISLAND SO AS TO PERMIT THE NRC LICENSES TO BE AMENDED TO COVER ONLY THE
ISFSI ISLAND (COLLECTIVELY, THE “ISFSI CAMPAIGN”).  TENANT SHALL USE DILIGENT
EFFORTS TO PERFORM REQUIRED DECOMMISSIONING AND OTHER WORK REQUIRED UNDER THIS
LEASE AND CONSTRUCT THE ISFSI ISLAND AND COMPLETE THE ISFSI CAMPAIGN ON A
SCHEDULE ESTABLISHED BY TENANT TO ACHIEVE THE APPLICABLE SITE RESTORATION
MILESTONE FOR COMPLETION OF THE ISFSI CAMPAIGN.

 

8.4  DECOMMISSIONING.  TENANT SHALL, AT ITS EXPENSE, PERFORM ALL DECOMMISSIONING
WORK AT THE PREMISES REQUIRED BY LAW.  THE PREMISES AND IMPROVEMENTS AND ALL
TANGIBLE ZION ASSETS LOCATED AT THE PREMISES SHALL BE RADIOLOGICALLY RELEASED
MEETING NRC MARISSM GUIDANCE AND ANY OTHER APPLICABLE LAWS.  NOTWITHSTANDING THE
FOREGOING PROVISIONS OF THIS SECTION 8.4 TO THE CONTRARY, TENANT SHALL HAVE NO
OBLIGATION TO PERFORM ANY ENVIRONMENTAL DECONTAMINATION (OTHER THAN RADIOLOGICAL
DECONTAMINATION) TO THE SWITCHYARD.

 

8.5  REMOVAL OF IMPROVEMENTS; SITE RESTORATION.  TENANT SHALL NOT CONSTRUCT ANY
STRUCTURES OR INSTALL ANY EQUIPMENT ON THE PREMISES EXCEPT AS REASONABLY
NECESSARY TO PERFORM ITS OBLIGATIONS UNDER THIS LEASE.  TENANT SHALL, AT ITS
EXPENSE, REMOVE ALL IMPROVEMENTS (OTHER THAN (A) THE ISFSI ISLAND, (B) THE NEW
VAR FACILITY, (C) ANY IMPROVEMENTS LOCATED AT THE SWITCHYARD OR THE NEW CONTROL
AREA, (D) ROADWAYS AND RAIL LINES, (E) FENCES AND OTHER ACCESS CONTROL MEASURES
AND (F) SUCH OTHER IMPROVEMENTS AS LANDLORD AND TENANT MAY MUTUALLY DETERMINE)
LOCATED AT THE PREMISES AS OF THE LEASE COMMENCEMENT DATE TO A MINIMUM OF THREE
FEET (3’) BELOW THE EXPECTED FINISHED GRADE FOLLOWING SITE RESTORATION OR AS
OTHERWISE REQUIRED BY LAW, PERMITS OR ENVIRONMENTAL PERMITS AND, EXCEPT AS
OTHERWISE REQUIRED BY APPLICABLE LAW, PERMITS OR ENVIRONMENTAL PERMITS,
BACK-FILL SUCH AREAS; PROVIDED, HOWEVER, THAT TENANT SHALL NOT REMOVE THE
IMPROVEMENTS LOCATED WITHIN THE SYNCHRONOUS CONDENSER AREA PRIOR TO THE DATE ON
WHICH LANDLORD OR COMED GIVES WRITTEN NOTICE TO TENANT THAT THE SYNCHRONOUS
CONDENSERS HAVE BEEN RELOCATED OR ABANDONED IN PLACE.  UNDERGROUND STORAGE TANKS
AND LARGE DIAMETER PIPES NOT REQUIRED BY LAW OR THIS LEASE TO BE REMOVED SHALL
BE FILLED.  LARGE DIAMETER PIPING WITHIN LAKE MICHIGAN AND THE LAKE MICHIGAN
INTAKE STRUCTURE WILL BE ABANDONED IN PLACE OR WILL BE REMOVED IF REQUIRED BY
LAW.  EXCAVATED PORTIONS OF REMOVED STRUCTURES, WHEN BACKFILLED AND RELEASED BY
THE NRC, WILL BE CONTOURED TO BLEND IN WITH THE ADJOINING PROPERTY.  AFFECTED
AREAS WILL BE SEEDED TO PREVENT EROSION.

 

8.6  NEW VAR FACILITY.  LANDLORD, OR ITS AFFILIATE, MAY, AT ITS OPTION AND AT
ITS EXPENSE, CONSTRUCT THE NEW VAR FACILITY.  LANDLORD, OR ITS AFFILIATE, SHALL
BE RESPONSIBLE, AT ITS EXPENSE, FOR THE MAINTENANCE AND OPERATION OF THE NEW VAR
FACILITY DURING THE PERIOD COMMENCING ON THE DATE ON WHICH THE SAME IS
SUBSTANTIALLY COMPLETED AND EXPIRING AT THE EXPIRATION OR EARLIER TERMINATION OF
THE LEASE TERM.

 

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8.7  SWITCHYARD.  SUBJECT TO THE TENANT’S OBLIGATIONS REGARDING MAINTENANCE OF
ACCESS IN ACCORDANCE WITH THE EDISON EASEMENT, DURING THE LEASE TERM, TENANT
SHALL NOT BE RESPONSIBLE FOR THE MAINTENANCE AND OPERATION OF THE SWITCHYARD.

 

8.8  SYNCHRONOUS CONDENSER AREA.

 

(A)  DURING THE PERIOD COMMENCING ON THE LEASE COMMENCEMENT DATE AND EXPIRING ON
THE DATE ON WHICH LANDLORD OR COMED GIVES WRITTEN NOTICE TO TENANT THAT THE
SYNCHRONOUS CONDENSERS HAVE BEEN RELOCATED OR ABANDONED IN PLACE, LANDLORD SHALL
BE RESPONSIBLE, AT ITS EXPENSE, FOR THE MAINTENANCE AND OPERATION OF THE
SYNCHRONOUS CONDENSER AREA (INCLUDING, WITHOUT LIMITATION, THE SYNCHRONOUS
CONDENSERS LOCATED THEREIN).  UNTIL THE SYNCHRONOUS CONDENSERS HAVE BEEN
RELOCATED OR ABANDONED IN PLACE, THE PHYSICAL SYSTEMS REQUIRED FOR THE SUPPORT
AND OPERATION OF THE SYNCHRONOUS CONDENSERS WILL BE CLEARLY IDENTIFIED BY NAME
AND OTHER MARKINGS, SUCH AS PAINT, STICKERS OR TAGS, AND, TO THE EXTENT
PRACTICABLE, WILL BE SECURED WITH BARRIERS, FENCING, LOCKS OR OTHER ENTRY
CONTROLS.  LANDLORD SHALL NOTIFY TENANT FROM TIME TO TIME OF THE STATUS OF THE
RELOCATION OR ABANDONMENT IN PLACE OF THE SYNCHRONOUS CONDENSERS AND, IN ANY
EVENT, SHALL NOTIFY TENANT OF SUCH STATUS ON THE DATE ON WHICH LANDLORD IN GOOD
FAITH BELIEVES NINETY (90) DAYS REMAIN PRIOR TO THE RELOCATION OR ABANDONMENT IN
PLACE OF THE SYNCHRONOUS CONDENSERS.  PROVIDED LANDLORD PROVIDES REASONABLE
PRIOR WRITTEN NOTICE OF ITS ACTIVITIES IN THE SYNCHRONOUS CONDENSER AREA FROM
TIME TO TIME, TENANT SHALL USE REASONABLE EFFORTS NOT TO DISRUPT OR INTERFERE
WITH LANDLORD’S OR COMED’S ACCESS TO OR OPERATION OF THE SYNCHRONOUS CONDENSERS.

 

(B)  PRIOR TO THE DATE THAT IS 18 MONTHS FOLLOWING THE LEASE COMMENCEMENT DATE
(AS SUCH DATE MAY BE EXTENDED ON A DAY-FOR-DAY BASIS ON ACCOUNT OF TENANT DELAY
OR FORCE MAJEURE), LANDLORD SHALL, AT ITS EXPENSE (I) DEACTIVATE THE SYNCHRONOUS
CONDENSERS, (II) DRAIN THE SYNCHRONOUS CONDENSER SYSTEMS AND REMOVE ANY HYDROGEN
AND LUBE OIL ATTRIBUTABLE THERETO, (II) DISCONNECT THE SYNCHRONOUS CONDENSERS
FROM THE SWITCHYARD AND (IV) REMOVE THE SYNCHRONOUS CONDENSERS AND/OR ABANDON
THEM IN PLACE.  LANDLORD SHALL GIVE PROMPT WRITTEN NOTICE TO TENANT IF ANY EVENT
OF FORCE MAJEURE OR TENANT DELAY SHALL OCCUR OR EXIST THAT WILL IMPACT
LANDLORD’S REMOVAL OR ABANDONMENT OF THE SYNCHRONOUS CONDENSERS, STATING THE
EVENTS OR CONDITIONS THAT CONSTITUTE THE EVENT OF FORCE MAJEURE OR TENANT DELAY
AND THE STEPS LANDLORD IS TAKING OR INTENDS TO TAKE TO OVERCOME SUCH EVENTS OR
CONDITIONS, IF ANY.  LANDLORD SHALL USE DILIGENT EFFORTS TO OVERCOME EVENTS OF
FORCE MAJEURE AND TENANT DELAY IMPACTING ITS REMOVAL OR ABANDONMENT OF THE
SYNCHRONOUS CONDENSERS.  TENANT’S SOLE REMEDY FOR DELAY IN THE PERFORMANCE BY
LANDLORD OF ITS OBLIGATIONS IN THE PRECEDING CLAUSES (I) THROUGH (IV) SHALL BE
THE EXTENSION OF THE TIME FOR PERFORMANCE OF TENANT’S OBLIGATIONS BY REASON OF
THE SCHEDULE EXTENSION CONDITION.

 

(C)  CONCURRENTLY WITH, OR PRIOR TO, THE REMOVAL AND/OR ABANDONMENT OF THE
SYNCHRONOUS CONDENSERS, LANDLORD SHALL, AT ITS EXPENSE, RELOCATE THE CONTROLS
FOR THE SWITCHYARD AND OIL COOLED BUSSES NOW LOCATED IN THE SYNCHRONOUS
CONDENSER AREA TO A SPACE WITHIN OR NEAR THE SWITCHYARD OR NEW VAR FACILITY
AREA.  IF SUCH SPACE IS LOCATED WITHIN THE PREMISES BUT OUTSIDE THE SWITCHYARD
AND THE NEW VAR FACILITY AREA, THEN THE PARTICULAR LOCATION OF SUCH SPACE SHALL
BE SUBJECT TO TENANT’S PRIOR WRITTEN CONSENT, WHICH SHALL NOT BE UNREASONABLY
WITHHELD, CONDITIONED OR DELAYED, AND SUCH SPACE SHALL BE KNOWN AS THE “NEW
CONTROL AREA.”

 

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8.9  COVENANT AGAINST LIENS.  TENANT SHALL NOT CAUSE OR PERMIT ANY ENCUMBRANCE
(INCLUDING ANY MECHANIC’S OR MATERIALMAN’S LIEN) TO BE ASSERTED AGAINST THE
PREMISES OR ANY INTEREST THEREIN (INCLUDING THE LEASEHOLD INTEREST CREATED BY
THIS LEASE) AS A RESULT OF ANY ACT OR OMISSION OF TENANT, ITS AGENTS,
CONTRACTORS AND EMPLOYEES.   IN THE EVENT ANY SUCH ENCUMBRANCE IS FILED, TENANT
WILL WITHIN THIRTY (30) DAYS AFTER RECEIVING WRITTEN NOTICE THEREOF CAUSE SUCH
ENCUMBRANCE TO BE RELEASED OR BONDED OVER. IN THE EVENT SUCH ENCUMBRANCE IS NOT
TIMELY RELEASED OR BONDED OVER, LANDLORD, AT ITS SOLE OPTION AND IN ADDITION TO
ANY OF ITS OTHER RIGHTS AND REMEDIES, MAY BOND OVER THE SAME, AND TENANT SHALL
PROMPTLY UPON NOTICE THEREOF REIMBURSE LANDLORD FOR THE COST OF SUCH BOND AND
OTHER DIRECT COSTS RELATED TO SUCH ACTION.  TENANT SHALL INDEMNIFY, DEFEND AND
HOLD HARMLESS LANDLORD FROM AND AGAINST ANY AND ALL ENCUMBRANCES ARISING OUT OF
OR IN ANY WAY CONNECTED WITH TENANT’S USE AND OCCUPANCY OF THE PREMISES (EXCEPT
TO THE EXTENT SUCH ENCUMBRANCES RESULT FROM THE ACT OR OMISSION OF LANDLORD
AND/OR LANDLORD’S AFFILIATES).  ANY RIGHTS AND OBLIGATIONS CREATED UNDER OR BY
THIS SECTION 8.9 SHALL SURVIVE TERMINATION OR EXPIRATION OF THIS LEASE.  WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, TENANT SHALL, TO THE FULLEST EXTENT
PERMITTED BY LAW, CAUSE ALL CONTRACTORS, SUBCONTRACTORS, MATERIAL SUPPLIERS,
SERVICE PROVIDERS, AND OTHER VENDORS PERFORMING WORK OR PROVIDING MATERIALS OR
SERVICES AT THE PREMISES ON BEHALF OF TENANT TO PROVIDE LIEN WAIVERS AS AND WHEN
COMMERCIALLY REASONABLE.

 

8.10   ENVIRONMENTAL PROTECTION.

 

(A)  TENANT SHALL CONDUCT ITS OPERATIONS ON THE PREMISES IN COMPLIANCE WITH ALL
APPLICABLE ENVIRONMENTAL LAWS AND ENVIRONMENTAL PERMITS, AND NEITHER TENANT NOR
ANY OF TENANT’S EMPLOYEES, REPRESENTATIVES, AFFILIATES, AGENTS, CONTRACTORS,
SUBCONTRACTORS, LICENSEES, LESSEES, GUESTS, INVITEES, SUCCESSORS AND ASSIGNS
(COLLECTIVELY, “TENANT GROUP”) SHALL USE, BRING UPON, TRANSPORT, STORE, KEEP OR
CAUSE OR ALLOW THE DISCHARGE, SPILL OR RELEASE (OR ALLOW A THREATENED RELEASE)
IN EACH CASE OF ANY HAZARDOUS SUBSTANCES IN, ON, UNDER OR FROM THE PREMISES IN
VIOLATION OF ENVIRONMENTAL LAW.  WITHOUT LIMITING ANY OTHER INDEMNIFICATION
OBLIGATIONS OF TENANT CONTAINED HEREIN, TENANT SHALL PROTECT, INDEMNIFY, DEFEND
(WITH COUNSEL REASONABLY ACCEPTABLE TO LANDLORD) AND HOLD HARMLESS LANDLORD AND
ITS DIRECT AND INDIRECT PARENTS, SUBSIDIARIES AND AFFILIATES, AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, REPRESENTATIVES,
AGENTS, CONTRACTORS, LICENSEES, LESSEES, GUESTS, INVITEES, SUCCESSORS AND
ASSIGNS (COLLECTIVELY, THE “LANDLORD INDEMNIFIED PARTIES”), FROM AND AGAINST ANY
AND ALL LOSSES AND CLAIMS (INCLUDING, WITHOUT LIMITATION, (I) REASONABLE
ATTORNEYS’ FEES, (II) LIABILITY TO THIRD PARTIES FOR TOXIC TORTS AND/OR PERSONAL
INJURY CLAIMS, (III) FINES, PENALTIES AND/OR ASSESSMENTS LEVIED OR RAISED BY ANY
GOVERNMENTAL AUTHORITY OR COURT, AND (IV) ASSESSMENT, REMEDIATION AND MITIGATION
COSTS AND EXPENSES AND NATURAL RESOURCE DAMAGE CLAIMS) ARISING OUT OF, RESULTING
FROM OR CONNECTED WITH ANY VIOLATION OF ENVIRONMENTAL LAWS OR ENVIRONMENTAL
PERMITS BY TENANT OR ANY MEMBER OF THE TENANT GROUP OR ANY HAZARDOUS SUBSTANCES
USED, BROUGHT UPON, TRANSPORTED, STORED, KEPT, DISCHARGED, SPILLED OR RELEASED
BY TENANT OR ANY MEMBER OF THE TENANT GROUP IN, ON, UNDER OR FROM THE PREMISES,
EXCEPT TO THE EXTENT SUCH LOSSES AND CLAIMS WERE INCREASED AS A RESULT OF
LANDLORD’S FAILURE TIMELY TO GIVE THE NOTICE, IF ANY, REQUIRED BY THIS
SECTION 8.10(A).  LANDLORD SHALL CONDUCT ITS OPERATIONS ON AND ADJACENT TO THE
PREMISES IN COMPLIANCE WITH ALL APPLICABLE ENVIRONMENTAL LAWS AND ENVIRONMENTAL
PERMITS, AND NEITHER LANDLORD NOR COMED NOR ANY OF THEIR RESPECTIVE EMPLOYEES,
REPRESENTATIVES, AGENTS, CONTRACTORS, LICENSEES, LESSEES, GUESTS, INVITEES,
SUCCESSORS AND ASSIGNS (COLLECTIVELY, “LANDLORD GROUP”) SHALL USE, BRING UPON,
TRANSPORT, STORE, KEEP OR CAUSE OR ALLOW THE DISCHARGE, SPILL OR RELEASE (OR
ALLOW A THREATENED

 

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RELEASE) IN EACH CASE OF ANY HAZARDOUS SUBSTANCES IN, ON, UNDER OR FROM THE
PREMISES OR THE AREAS ADJACENT THERETO (INCLUDING, WITHOUT LIMITATION, THE
SWITCHYARD AND THE NEW VAR FACILITY AREA) IN VIOLATION OF ENVIRONMENTAL LAW. 
WITHOUT LIMITING ANY OTHER INDEMNIFICATION OBLIGATIONS OF LANDLORD CONTAINED
HEREIN, LANDLORD SHALL PROTECT, INDEMNIFY, DEFEND (WITH COUNSEL REASONABLY
ACCEPTABLE TO TENANT) AND HOLD HARMLESS TENANT AND ITS DIRECT AND INDIRECT
PARENTS, SUBSIDIARIES AND AFFILIATES, AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
SHAREHOLDERS, EMPLOYEES, REPRESENTATIVES, AGENTS, CONTRACTORS, LICENSEES,
LESSEES, GUESTS, INVITEES, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE “TENANT
INDEMNIFIED PARTIES”), FROM AND AGAINST ANY AND ALL LOSSES AND CLAIMS
(INCLUDING, WITHOUT LIMITATION, (1) REASONABLE ATTORNEYS’ FEES, (2) LIABILITY TO
THIRD PARTIES FOR TOXIC TORTS AND/OR PERSONAL INJURY CLAIMS, (3) FINES,
PENALTIES AND/OR ASSESSMENTS LEVIED OR RAISED BY ANY GOVERNMENTAL AUTHORITY OR
COURT, AND (4) ASSESSMENT, REMEDIATION AND MITIGATION COSTS AND EXPENSES AND
NATURAL RESOURCE DAMAGE CLAIMS) ARISING OUT OF, RESULTING FROM OR CONNECTED WITH
ANY VIOLATION OF ENVIRONMENTAL LAWS OR ENVIRONMENTAL PERMITS BY LANDLORD OR ANY
MEMBER OF THE LANDLORD GROUP DURING THE LEASE TERM OR ANY HAZARDOUS SUBSTANCES
USED, BROUGHT UPON, TRANSPORTED, STORED, KEPT, DISCHARGED, SPILLED OR RELEASED
BY LANDLORD OR ANY MEMBER OF THE LANDLORD GROUP IN, ON, UNDER OR FROM THE
PREMISES, EXCEPT TO THE EXTENT SUCH LOSSES AND CLAIMS WERE INCREASED AS A RESULT
OF TENANT’S FAILURE TIMELY TO GIVE THE NOTICE, IF ANY, REQUIRED BY THIS
SECTION 8.10(A).  IF ANY LANDLORD INDEMNIFIED PARTY OR TENANT INDEMNIFIED PARTY
RECEIVES NOTICE OF THE ASSERTION OF ANY SUCH CLAIM OR OF THE COMMENCEMENT OF ANY
CLAIM, ACTION, OR PROCEEDING MADE OR BROUGHT BY ANY PERSON WHO IS NOT A TENANT
INDEMNIFIED PARTY OR A LANDLORD INDEMNIFIED PARTY, AS APPLICABLE (A “THIRD PARTY
CLAIM”), THE APPLICABLE PARTY SHALL GIVE THE OTHER PARTY REASONABLY PROMPT
WRITTEN NOTICE THEREOF, BUT IN ANY EVENT SUCH NOTICE SHALL NOT BE GIVEN LATER
THAN FIVE (5) CALENDAR DAYS AFTER THE APPLICABLE PARTY’S RECEIPT OF NOTICE OF
SUCH THIRD PARTY CLAIM.  SUCH NOTICE SHALL DESCRIBE THE NATURE OF THE THIRD
PARTY CLAIM IN REASONABLE DETAIL AND SHALL INDICATE THE ESTIMATED AMOUNT, IF
PRACTICABLE, OF THE THIRD PARTY CLAIM.

 

(B) TENANT SHALL COMPLY WITH AND OBSERVE ALL APPLICABLE LAWS RELATED TO THE USE
AND PROTECTION OF WETLANDS.  TENANT SHALL NOT CHANGE THE PHYSICAL
CHARACTERISTICS OF ANY WETLAND AREAS LOCATED ON THE PREMISES OR ANY ADJOINING
LAND, WITHOUT IN EACH INSTANCE OBTAINING LANDLORD’S PRIOR WRITTEN CONSENT (WHICH
MAY BE GRANTED OR WITHHELD IN LANDLORD’S SOLE DISCRETION), AND ONLY THEN IN
COMPLIANCE WITH APPLICABLE LAWS.

 

(C) TENANT SHALL PROVIDE LANDLORD WITH PROMPT WRITTEN NOTICE UPON TENANT’S
OBTAINING KNOWLEDGE OF THE EXISTENCE OR ANY THREATENED RELEASE OF ANY HAZARDOUS
SUBSTANCES ON, IN OR UNDER THE PREMISES IN VIOLATION OF ENVIRONMENTAL LAWS.

 

(D) THIS SECTION 8.10 SHALL SURVIVE THE EXPIRATION OR OTHER TERMINATION OF THIS
LEASE.

 

8.11  WORK IN THE SYNCHRONOUS CONDENSER AREA, THE NEW VAR FACILITY AREA, THE NEW
CONTROL AREA AND THE SWITCHYARD.  TENANT SHALL MAKE REASONABLE EFFORTS, WHENEVER
IT WORKS IN OR IMMEDIATELY ADJACENT TO THE SYNCHRONOUS CONDENSER AREA (PRIOR TO
THE DATE ON WHICH LANDLORD OR COMED GIVES WRITTEN NOTICE TO TENANT THAT THE
SYNCHRONOUS CONDENSERS HAVE BEEN RELOCATED OR ABANDONED IN PLACE), THE NEW VAR
FACILITY AREA, THE NEW CONTROL AREA AND THE SWITCHYARD, NOT TO DISRUPT ANY OF
LANDLORD’S OR ITS AFFILIATES’ OPERATIONS IN THESE AREAS OR DISTURB OR DAMAGE ANY
OF LANDLORD’S, COMED’S OR ANY OF THEIR AFFILIATES’ EQUIPMENT AND FACILITIES
LOCATED IN THESE AREAS.  PRIOR TO COMMENCING ANY WORK IN OR IMMEDIATELY ADJACENT
TO THESE AREAS TENANT SHALL

 

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NOTIFY LANDLORD AND COOPERATE WITH LANDLORD TO AVOID ANY SUCH DISRUPTION,
DISTURBANCE OR DAMAGE.

 

8.12   COMPLIANCE WITH LAWS AND PERMITS.  EACH PARTY SHALL IMMEDIATELY NOTIFY
THE OTHER IN WRITING UPON OBTAINING KNOWLEDGE OF ANY MATERIAL VIOLATIONS OF ANY
APPLICABLE LAWS RELATING TO THE PREMISES AND UPON RECEIVING ANY WRITTEN NOTICE,
CORRESPONDENCE, WRITTEN DEMAND OR WRITTEN COMMUNICATION FROM ANY GOVERNMENTAL
AUTHORITY ALLEGING A MATERIAL VIOLATION OF ANY LAWS OR PERMITS RELATING TO THE
PREMISES.  EACH PARTY SHALL OBTAIN AND MAINTAIN, AT ITS SOLE COST AND EXPENSE,
ANY AND ALL PERMITS, LICENSES, AUTHORIZATIONS AND OTHER SIMILAR APPROVALS
NECESSARY TO PERFORM ITS OBLIGATIONS UNDER THIS LEASE.

 

8.13   COOPERATION AND COMMUNICATION.  LANDLORD AND TENANT SHALL (AND LANDLORD
SHALL CAUSE COMED TO) REASONABLY COOPERATE AND COMMUNICATE REGARDING THEIR
RESPECTIVE OPERATIONS AROUND THE SYNCHRONOUS CONDENSERS, SWITCHYARD, NEW VAR
FACILITY AND NEW CONTROL AREA.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING
SENTENCE, IT IS SPECIFICALLY AGREED THAT (A) THE NEW VAR FACILITY SHALL BE
(I) LOCATED OUTSIDE OF THE CURRENT PLANT SECURITY AREA,  (II) FENCED OFF FROM
THE BALANCE OF THE PREMISES AT LANDLORD’S EXPENSE AND (III) ACCESS CONTROLLED BY
LANDLORD AT ITS EXPENSE, (B) ACCESS INTO THE SWITCHYARD WILL BE CONTROLLED BY
LANDLORD AND/OR COMED AT NO EXPENSE TO TENANT AND (C) AT NO EXPENSE TO TENANT,
THE SYSTEMS REQUIRED FOR THE SUPPORT AND OPERATION OF THE SYNCHRONOUS CONDENSERS
WILL BE CLEARLY IDENTIFIED BY NAME AND OTHER MARKINGS SUCH AS PAINT WITHIN THE
SYNCHRONOUS CONDENSER AREA AND SECURED WITH BARRIERS, FENCING, LOCKS OR OTHER
CONTROLS TO PREVENT DISTURBANCE.

 

ARTICLE IX
INSPECTION

 

9.1      INSPECTION OF PREMISES.  UPON REASONABLE PRIOR WRITTEN NOTICE, AND
SUBJECT TO SUCH REASONABLE ACCESS CONTROL MEASURES AS FROM TIME TO TIME ARE
IMPLEMENTED UNDER THE NRC LICENSES OR OTHERWISE INSTITUTED BY TENANT, TENANT
SHALL PERMIT LANDLORD, ITS AGENTS AND REPRESENTATIVES TO ENTER THE PREMISES IN
ORDER TO MONITOR, AT LANDLORD’S EXPENSE, TENANT’S AND ITS DESIGNEES’ PERFORMANCE
OF TENANT’S OBLIGATIONS UNDER THIS LEASE AND THE OTHER DOCUMENTS ENTERED INTO IN
CONNECTION WITH THE ASSET SALE AGREEMENT.  WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING SENTENCE, IT IS SPECIFICALLY AGREED THAT LANDLORD SHALL HAVE NO
RIGHT TO DIRECT OR MANAGE THE PERFORMANCE OF TENANT’S OBLIGATIONS OR TO DICTATE
THE SCHEDULING OF SUCH PERFORMANCE.  LANDLORD SHALL USE BEST EFFORTS TO MINIMIZE
DISRUPTION TO TENANT’S OPERATIONS AT THE PREMISES IN CONNECTION WITH ANY SUCH
ENTRY.

 

ARTICLE X
INSURANCE

 

10.1   TYPES AND AMOUNTS OF REQUIRED INSURANCE COVERAGE.   TENANT SHALL OBTAIN
AND MAINTAIN (A) THROUGHOUT THE LEASE TERM COMMERCIAL GENERAL LIABILITY
INSURANCE (WRITTEN ON AN OCCURRENCE BASIS) AND (B) FROM AND AFTER THE DATE ON
WHICH THE ISFSI ISLAND IS SUBSTANTIALLY COMPLETE, ALL-RISK PROPERTY INSURANCE. 
SUCH COMMERCIAL GENERAL LIABILITY INSURANCE SHALL BE IN AN

 

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AMOUNT NOT LESS THAN TEN MILLION DOLLARS ($10,000,000) COMBINED SINGLE LIMIT PER
OCCURRENCE WITH A TEN MILLION DOLLAR ($10,000,000) ANNUAL AGGREGATE.  TENANT’S
PROPERTY INSURANCE SHALL BE IN AN AMOUNT NOT LESS THAN THAT REQUIRED TO REPLACE
THE ISFSI ISLAND. TO THE EXTENT PERMITTED BY APPLICABLE LAWS, ALL INSURANCE
POLICIES REQUIRED TO BE MAINTAINED BY TENANT UNDER THIS LEASE SHALL BE PRIMARY
TO ANY OTHER INSURANCE CARRIED BY LANDLORD OR ITS AFFILIATES; CONTAIN STANDARD
CROSS-LIABILITY PROVISIONS; AND PROVIDE FOR A WAIVER OF ALL RIGHTS OF
SUBROGATION WHICH TENANT’S INSURANCE CARRIER MIGHT EXERCISE AGAINST LANDLORD OR
ITS AFFILIATES.   TENANT SHALL REQUIRE ALL CONTRACTORS AND SUBCONTRACTORS
BROUGHT ONTO THE PREMISES BY TENANT TO PROCURE AND MAINTAIN COMMERCIAL GENERAL
LIABILITY INSURANCE COVERAGE AT THE LIMITS DETERMINED BY TENANT TO BE
APPROPRIATE UNDER THE CIRCUMSTANCES.  LANDLORD AND LANDLORD’S OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, REPRESENTATIVES, SUBSIDIARIES, SUCCESSORS AND
ASSIGNS UNDER THIS LEASE SHALL BE NAMED AS ADDITIONAL INSUREDS ON ALL INSURANCE
REQUIRED TO BE MAINTAINED BY TENANT OR ITS CONTRACTORS AND SUBCONTRACTORS.   
THROUGHOUT THE LEASE TERM, LANDLORD OR AN AFFILIATE OF LANDLORD SHALL OBTAIN AND
MAINTAIN ALL-RISK PROPERTY INSURANCE IN AN AMOUNT NOT LESS THAN THAT REQUIRED TO
REPLACE THE SWITCHYARD AND, FROM AND AFTER THE DATE ON WHICH THE NEW VAR
FACILITY AND NEW CONTROL FACILITY ARE SUBSTANTIALLY COMPLETE, THE NEW VAR
FACILITY AND NEW CONTROL FACILITY.  LANDLORD AND TENANT SHALL EACH HAVE THE
RIGHT TO MAINTAIN THE INSURANCE COVERAGES SET FORTH IN THIS ARTICLE UNDER A
BLANKET INSURANCE POLICY COVERING OTHER PREMISES OWNED OR OPERATED BY LANDLORD
OR TENANT (AS APPLICABLE), PROVIDED THAT (X) THE PREMISES IS COVERED
INDEPENDENTLY BY SUCH BLANKET INSURANCE POLICY TO THE FULL EXTENT REQUIRED BY
THIS ARTICLE, AND (Y) SUCH COVERAGE FOR THE PREMISES SHALL NOT BE DIMINISHED FOR
ANY REASON WHATSOEVER (INCLUDING WITHOUT LIMITATION A CLAIM MADE WITH RESPECT TO
ANY OTHER PREMISES) DURING THE LEASE TERM.  LANDLORD HEREBY WAIVES ITS RIGHT OF
RECOVERY AGAINST TENANT AND RELEASES TENANT FROM ANY AND ALL LIABILITIES, CLAIMS
AND LOSSES FOR WHICH TENANT MAY OTHERWISE BE LIABLE TO THE EXTENT LANDLORD IS
COVERED (OR REQUIRED TO BE COVERED) BY PROPERTY INSURANCE THEREFOR.  TENANT
HEREBY WAIVES ITS RIGHT OF RECOVERY AGAINST LANDLORD AND RELEASES LANDLORD FROM
ANY AND ALL LIABILITIES, CLAIMS AND LOSSES FOR WHICH LANDLORD MAY OTHERWISE BE
LIABLE TO THE EXTENT TENANT IS COVERED (OR REQUIRED TO BE COVERED) BY PROPERTY
INSURANCE THEREFOR.  TENANT WAIVES ALL RIGHTS OF SUBROGATION AGAINST LANDLORD
UNDER THE INSURANCE POLICIES PROCURED BY TENANT IN ACCORDANCE WITH THIS LEASE.

 

10.2   CONDITIONS OF INSURANCE COVERAGE.  ALL SUCH INSURANCE SHALL (A) BE ISSUED
BY A COMPANY THAT IS LICENSED TO DO BUSINESS IN THE JURISDICTION IN THE STATE OF
ILLINOIS AND THAT HAS A RATING EQUAL TO OR EXCEEDING A-:VIII FROM BEST’S
INSURANCE GUIDE, AND (B) WITH RESPECT TO SUCH LIABILITY INSURANCE, NAME THE
OTHER PARTY AS AN ADDITIONAL INSURED.  EACH PARTY SHALL DELIVER TO THE OTHER, ON
THE LEASE COMMENCEMENT DATE AND AT LEAST ANNUALLY THEREAFTER, A CERTIFICATE OF
ALL INSURANCE REQUIRED TO BE MAINTAINED BY SUCH PARTY PURSUANT TO THIS LEASE.

 

10.3   Nuclear Insurance.  In addition to any insurance that may be required
under Section 10.1, Tenant shall procure and maintain in effect nuclear
liability insurance from ANI in such form and in such amount as will meet the
financial protection requirements of the Atomic Energy Act as provided in the
NRC Licenses, and an agreement of indemnification as contemplated by Section 170
of the Atomic Energy Act.  Tenant shall maintain Nuclear Liability Facility
Form at such limit as required by the NRC Licenses and Nuclear Liability
Shippers & Transporters coverage at a limit of $300 million during the Lease
Term and thereafter until the Put Option Closing.  Tenant shall maintain NEIL
property policy, or similar policy, with limits of at least $100 million to
comply with the NRC Licenses.  Landlord shall be included as additional insured
and loss payee on such insurance.  In the event that Tenant can not acquire

 

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SUCH INSURANCE FROM NEIL, LANDLORD WILL PURCHASE THE COVERAGE AT TENANT’S
EXPENSE.  IN THE EVENT THAT THE NUCLEAR LIABILITY PROTECTION SYSTEM CONTEMPLATED
BY SECTION 170 OF THE ATOMIC ENERGY ACT IS REPEALED OR CHANGED, TENANT SHALL
HAVE AND MAINTAIN IN EFFECT, TO THE EXTENT COMMERCIALLY AVAILABLE ON REASONABLE
TERMS, ALTERNATE PROTECTION AGAINST NUCLEAR LIABILITY.

 

10.4   Indemnity.

 

(A)  EXCEPT TO THE EXTENT RESULTING FROM THE NEGLIGENCE OR WILLFUL MISCONDUCT OF
A LANDLORD INDEMNIFIED PARTY, AND EXCEPT TO THE EXTENT COVERED BY PROPERTY
INSURANCE CARRIED BY A LANDLORD INDEMNIFIED PARTY OR REQUIRED BY THIS LEASE TO
BE CARRIED BY A LANDLORD INDEMNIFIED PARTY, TO THE MAXIMUM EXTENT PERMITTED
UNDER APPLICABLE LAW, TENANT SHALL PROTECT, INDEMNIFY, DEFEND (WITH COUNSEL
REASONABLY ACCEPTABLE TO LANDLORD) AND HOLD HARMLESS THE LANDLORD INDEMNIFIED
PARTIES FROM AND AGAINST ANY AND ALL LOSSES, COSTS, DAMAGES, LIABILITIES,
EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES) AND/OR
INJURIES (INCLUDING, WITHOUT LIMITATION, DAMAGE TO PROPERTY AND/OR PERSONAL
INJURIES) SUFFERED OR INCURRED BY ANY OF THE LANDLORD INDEMNIFIED PARTIES
(REGARDLESS OF WHETHER CONTINGENT, DIRECT, CONSEQUENTIAL, LIQUIDATED OR
UNLIQUIDATED), INCLUDING, WITHOUT LIMITATION, ANY DAMAGE TO THE SYNCHRONOUS
CONDENSERS PRIOR TO THE DATE ON WHICH COMED OR LANDLORD GIVES WRITTEN NOTICE
THAT THE SYNCHRONOUS CONDENSERS HAVE BEEN RELOCATED OR ABANDONED IN PLACE, THE
NEW VAR FACILITY OR EQUIPMENT OR FACILITIES LOCATED IN THE SWITCHYARD OR THE NEW
CONTROL AREA) CAUSED BY TENANT OR ANY MEMBER OF THE TENANT GROUP, AND ANY AND
ALL CLAIMS, DEMANDS, SUITS AND CAUSES OF ACTION BROUGHT OR RAISED AGAINST ANY OF
THE LANDLORD INDEMNIFIED PARTIES (COLLECTIVELY, “CLAIMS”), ARISING OUT OF,
RESULTING FROM, RELATING TO OR CONNECTED WITH ANY ACT OR OMISSION OF TENANT OR
ANY MEMBER OF THE TENANT GROUP AT, ON OR ABOUT THE PREMISES CAUSED BY TENANT OR
ANY MEMBER OF THE TENANT GROUP, AND NOTWITHSTANDING ANYTHING TO THE CONTRARY IN
THIS LEASE, SUCH OBLIGATION TO INDEMNIFY, DEFEND AND HOLD HARMLESS THE LANDLORD
INDEMNIFIED PARTIES SHALL SURVIVE ANY TERMINATION OF THIS LEASE.  THIS
INDEMNIFICATION SHALL INCLUDE, WITHOUT LIMITATION, CLAIMS MADE UNDER ANY
WORKMAN’S COMPENSATION LAW OR UNDER ANY PLAN FOR EMPLOYEE’S DISABILITY AND DEATH
BENEFITS (INCLUDING, WITHOUT LIMITATION, CLAIMS AND DEMANDS THAT MAY BE ASSERTED
BY EMPLOYEES, AGENTS, CONTRACTORS AND SUBCONTRACTORS).

 

(B)  EXCEPT TO THE EXTENT RESULTING FROM THE NEGLIGENCE OR WILLFUL MISCONDUCT OF
A TENANT INDEMNIFIED PARTY, AND EXCEPT TO THE EXTENT COVERED BY PROPERTY
INSURANCE CARRIED BY A TENANT INDEMNIFIED PARTY OR REQUIRED BY THIS LEASE TO BE
CARRIED BY A TENANT INDEMNIFIED PARTY, TO THE MAXIMUM EXTENT PERMITTED UNDER
APPLICABLE LAW, LANDLORD SHALL PROTECT, INDEMNIFY, DEFEND (WITH COUNSEL
REASONABLY ACCEPTABLE TO TENANT) AND HOLD HARMLESS THE TENANT INDEMNIFIED
PARTIES FROM AND AGAINST ANY AND ALL LOSSES, COSTS, DAMAGES, LIABILITIES,
EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES) AND/OR
INJURIES (INCLUDING, WITHOUT LIMITATION, DAMAGE TO PROPERTY AND/OR PERSONAL
INJURIES) SUFFERED OR INCURRED BY ANY OF THE TENANT INDEMNIFIED PARTIES
(REGARDLESS OF WHETHER CONTINGENT, DIRECT, CONSEQUENTIAL, LIQUIDATED OR
UNLIQUIDATED), AND ANY AND ALL CLAIMS BROUGHT OR RAISED AGAINST ANY OF THE
TENANT INDEMNIFIED PARTIES, ARISING OUT OF, RESULTING FROM, RELATING TO OR
CONNECTED WITH ANY ACT OR OMISSION OF LANDLORD OR ANY MEMBER OF THE LANDLORD
GROUP AT, ON OR ABOUT THE PREMISES CAUSED BY LANDLORD OR ANY MEMBER OF THE
LANDLORD GROUP DURING THE LEASE TERM, AND NOTWITHSTANDING ANYTHING TO THE
CONTRARY IN THIS LEASE, SUCH OBLIGATION TO INDEMNIFY, DEFEND AND HOLD HARMLESS
THE TENANT INDEMNIFIED PARTIES SHALL SURVIVE ANY TERMINATION OF THIS LEASE. 
THIS INDEMNIFICATION SHALL INCLUDE, WITHOUT LIMITATION, CLAIMS MADE UNDER ANY
WORKMAN’S COMPENSATION LAW OR UNDER ANY

 

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PLAN FOR EMPLOYEE’S DISABILITY AND DEATH BENEFITS (INCLUDING, WITHOUT
LIMITATION, CLAIMS AND DEMANDS THAT MAY BE ASSERTED BY EMPLOYEES, AGENTS,
CONTRACTORS AND SUBCONTRACTORS).

 

(C)  NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, (I) NO LANDLORD
INDEMNIFIED PARTY SHALL BE ENTITLED TO RECOVER FROM TENANT OR ANY MEMBER OF THE
TENANT GROUP FOR ANY LIABILITIES, DAMAGES, OBLIGATIONS, PAYMENTS, LOSSES, COSTS
OR EXPENSES UNDER THIS LEASE ANY AMOUNT IN EXCESS OF THE ACTUAL COMPENSATORY
DAMAGES, COURT COSTS AND REASONABLE ATTORNEY’S AND OTHER ADVISOR FEES SUFFERED
BY SUCH LANDLORD INDEMNIFIED PARTY AND (II) NO TENANT INDEMNIFIED PARTY SHALL BE
ENTITLED TO RECOVER FROM LANDLORD OR ANY MEMBER OF THE LANDLORD GROUP FOR ANY
LIABILITIES, DAMAGES, OBLIGATIONS, PAYMENTS, LOSSES, COSTS OR EXPENSES UNDER
THIS LEASE ANY AMOUNT IN EXCESS OF THE ACTUAL COMPENSATORY DAMAGES, COURT COSTS
AND REASONABLE ATTORNEY’S AND OTHER ADVISOR FEES SUFFERED BY SUCH TENANT
INDEMNIFIED PARTY.  LANDLORD AND TENANT EACH WAIVE ANY RIGHT TO RECOVER
PUNITIVE, INCIDENTAL, SPECIAL, EXEMPLARY AND CONSEQUENTIAL DAMAGES ARISING IN
CONNECTION WITH OR WITH RESPECT TO THIS AGREEMENT INCLUDING, BUT NOT LIMITED TO,
LOSSES OR DAMAGES CAUSED BY REASON OF LOSS OF USE, PROFITS OR REVENUE, INVENTORY
OR USE CHARGES, INTEREST CHARGES OR COST OF CAPITAL.

 

ARTICLE XI
DAMAGE OR DESTRUCTION

 

11.1        TENANT’S RESTORATION OBLIGATIONS.  IF THE ISFSI ISLAND IS TOTALLY OR
PARTIALLY DAMAGED OR DESTROYED FOR ANY REASON PRIOR TO THE EXPIRATION OR EARLIER
TERMINATION OF THE LEASE TERM EXCEPT TO THE EXTENT CAUSED BY AN ACT OR OMISSION
OF THE LANDLORD GROUP OR THE NEGLIGENCE OR WILLFUL MISCONDUCT OF THE LANDLORD
GROUP, THEN, PROMPTLY AFTER SUCH DAMAGE OR DESTRUCTION, TENANT SHALL, AT ITS
EXPENSE, REPAIR, REBUILD, OR RESTORE THE SAME.  IF, DURING THE COURSE OF
PERFORMANCE OF ANY DECOMMISSIONING OR OTHER WORK AT THE PREMISES RELATED TO
DECOMMISSIONING, ANY IMPROVEMENTS IN THE SYNCHRONOUS CONDENSER AREA ARE DAMAGED
OR DESTROYED BY AN ACT OR OMISSION OF TENANT OR ANY MEMBER OF THE TENANT GROUP
PRIOR TO THE DATE ON WHICH LANDLORD OR COMED GIVES WRITTEN NOTICE TO TENANT THAT
THE SYNCHRONOUS CONDENSERS HAVE BEEN RELOCATED OR ABANDONED IN PLACE, THEN,
PROMPTLY AFTER SUCH DAMAGE OR DESTRUCTION, TENANT SHALL, AT ITS EXPENSE, REPAIR,
REBUILD, OR RESTORE THE SAME IN ACCORDANCE WITH INSTRUCTIONS FROM LANDLORD OR
COMED, BUT ONLY TO THE EXTENT SUCH DAMAGE IS CAUSED BY AN ACT OR OMISSION OF THE
TENANT GROUP OR THE NEGLIGENCE OR WILLFUL MISCONDUCT OF THE TENANT GROUP. IF ANY
IMPROVEMENTS IN THE SWITCHYARD, NEW CONTROL AREA OR NEW VAR FACILITY AREA ARE
DAMAGED OR DESTROYED BY AN ACT OR OMISSION OF TENANT OR ANY MEMBER OF THE TENANT
GROUP, THEN, PROMPTLY AFTER SUCH DAMAGE OR DESTRUCTION, TENANT SHALL, AT ITS
EXPENSE, REPAIR, REBUILD, OR RESTORE THE SAME, BUT ONLY TO THE EXTENT SUCH
DAMAGE IS CAUSED BY AN ACT OR OMISSION OF THE TENANT GROUP OR THE NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE TENANT GROUP.   IF ANY OTHER IMPROVEMENTS ARE TOTALLY
OR PARTIALLY DAMAGED OR DESTROYED, THEN TENANT SHALL HAVE NO OBLIGATION TO
REPAIR, REBUILD, OR RESTORE THE SAME.

 

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ARTICLE XII
CONDEMNATION

 

12.1        PERMANENT TAKING.  IF THE ENTIRE PREMISES, OR THE USE OR OCCUPANCY
THEREOF, SHALL BE PERMANENTLY TAKEN OR CONDEMNED BY ANY GOVERNMENTAL OR
QUASI-GOVERNMENTAL AUTHORITY FOR ANY PUBLIC OR QUASI-PUBLIC USE OR PURPOSE OR
SOLD UNDER THREAT OF SUCH A TAKING OR CONDEMNATION (COLLECTIVELY, “CONDEMNED”)
SO AS TO RENDER TENANT UNABLE TO PERFORM ITS DECOMMISSIONING OBLIGATIONS WITH
RESPECT TO THE ENTIRE PREMISES, THEN THIS LEASE SHALL TERMINATE ON THE DAY PRIOR
TO THE DATE THAT TENANT IS REQUIRED TO CEASE PERFORMANCE OF SUCH DECOMMISSIONING
OBLIGATIONS, AND RENT SHALL BE APPORTIONED AS OF SUCH DATE.  IF LESS THAN THE
ENTIRE PREMISES OR OCCUPANCY THEREOF IS PERMANENTLY CONDEMNED, AND SUCH PARTIAL
CONDEMNATION RENDERS TENANT UNABLE TO PERFORM ITS DECOMMISSIONING OBLIGATIONS
WITH RESPECT TO A PORTION OF THE PREMISES, THEN THIS LEASE SHALL CONTINUE IN
FULL FORCE AND EFFECT WITH RESPECT TO THE PORTION OF THE PREMISES WITH RESPECT
TO WHICH TENANT IS ABLE TO CONTINUE DECOMMISSIONING OBLIGATIONS, AND RENT SHALL
BE APPORTIONED AS OF THE DATE ON WHICH TENANT IS REQUIRED TO CEASE PERFORMANCE
OF DECOMMISSIONING OBLIGATIONS WITH RESPECT TO A PORTION OF THE PREMISES.  IF
ALL OR ANY PORTION OF THE PREMISES OR OCCUPANCY THEREOF IS PERMANENTLY CONDEMNED
AND SUCH CONDEMNATION DOES NOT RENDER TENANT UNABLE TO PERFORM ITS
DECOMMISSIONING OBLIGATIONS OR DELAY THE PERFORMANCE OF SUCH OBLIGATIONS, THEN
THIS LEASE SHALL REMAIN IN FULL FORCE AND EFFECT.   IF AND TO THE EXTENT THAT
ANY SUCH CONDEMNATION PREVENTS OR DELAYS PERFORMANCE OF DECOMMISSIONING
OBLIGATIONS WITH RESPECT TO THE PREMISES OR ANY PORTION OF THE PREMISES, SUCH
CONDEMNATION SHALL BE DEEMED A FORCE MAJEURE CONDITION WITH RESPECT TO THE
PORTION OF THE PREMISES AFFECTED BY SUCH CONDEMNATION.   FOR PURPOSES OF THIS
SECTION, THE PREMISES OR PORTION THEREOF, AS APPLICABLE, SHALL BE DEEMED TO BE
PERMANENTLY CONDEMNED IF CONDEMNED FOR A PERIOD IN EXCESS OF THIRTY-SIX (36)
CONSECUTIVE CALENDAR MONTHS.

 

12.2        TEMPORARY TAKING.  IF ALL OR ANY PORTION OF THE PREMISES IS
CONDEMNED FOR A PERIOD OF THIRTY-SIX (36) CONSECUTIVE CALENDAR MONTHS OR LESS,
ALL OF THE TERMS AND CONDITIONS OF THIS LEASE SHALL REMAIN IN FULL FORCE AND
EFFECT, NOTWITHSTANDING SUCH CONDEMNATION. IF AND TO THE EXTENT THAT ANY SUCH
CONDEMNATION PREVENTS OR DELAYS PERFORMANCE OF DECOMMISSIONING OBLIGATIONS WITH
RESPECT TO THE PREMISES OR ANY PORTION OF THE PREMISES, SUCH CONDEMNATION SHALL
BE DEEMED A FORCE MAJEURE CONDITION WITH RESPECT TO THE PORTION OF THE PREMISES
AFFECTED BY SUCH CONDEMNATION.

 

12.3        AWARDS.  ALL AWARDS, DAMAGES AND OTHER COMPENSATION PAID ON ACCOUNT
OF CONDEMNATION SHALL BELONG TO LANDLORD, AND TENANT ASSIGNS TO LANDLORD ALL
RIGHTS TO SUCH AWARDS, DAMAGES AND COMPENSATION.  TENANT SHALL NOT MAKE ANY
CLAIM AGAINST LANDLORD OR SUCH AUTHORITY FOR ANY PORTION OF SUCH AWARD, DAMAGES
OR COMPENSATION, INCLUDING, WITHOUT LIMITATION, ANY SUCH AWARD, DAMAGE OR
COMPENSATION ATTRIBUTABLE TO DAMAGE TO THE PREMISES, VALUE OF THE UNEXPIRED
PORTION OF THE LEASE TERM, LOSS OF PROFITS OR GOODWILL, LEASEHOLD IMPROVEMENTS
OR SEVERANCE DAMAGES.

 

ARTICLE XIII
DEFAULT

 

13.1        LEASE DEFAULTS.  EACH OF THE FOLLOWING SHALL CONSTITUTE A “LEASE
DEFAULT”:  (A) TENANT’S FAILURE TO MAKE ANY PAYMENT OF THE BASE RENT OR DELAY
RENT, WHICH FAILURE CONTINUES FOR FIVE (5) BUSINESS DAYS AFTER LANDLORD DELIVERS
WRITTEN NOTICE THEREOF TO TENANT;  (B) TENANT’S FAILURE TO PERFORM OR OBSERVE
THE COVENANT OF TENANT IN SECTION 6.3; (C) TENANT’S FAILURE TO PERFORM OR
OBSERVE IN ANY MATERIAL RESPECT ANY COVENANT OF TENANT IN SECTIONS 5.2, 6.6,
7.1, 8.9,

 

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10.1, 10.2 OR 10.3, WHICH FAILURE CONTINUES FOR THIRTY (30) DAYS AFTER LANDLORD
DELIVERS WRITTEN NOTICE THEREOF TO TENANT (OR, IF SUCH FAILURE CANNOT REASONABLY
BE CURED WITHIN SUCH THIRTY (30) DAY PERIOD, SUCH LONGER PERIOD (NOT TO EXCEED
THIRTY (30) ADDITIONAL DAYS) AS IS REASONABLY NECESSARY TO EFFECT SUCH CURE
PROVIDED TENANT COMMENCES SUCH CURE PROMPTLY AND DILIGENTLY PURSUES SUCH CURE
CONTINUOUSLY THEREAFTER); (D) TENANT’S FAILURE TO PERFORM OR OBSERVE IN ANY
MATERIAL RESPECT ANY COVENANT OR CONDITION OF THIS LEASE NOT OTHERWISE
SPECIFICALLY DESCRIBED IN THIS SECTION, OTHER THAN SECTIONS 6.2 AND 6.4, WHICH
FAILURE CONTINUES FOR THIRTY (30) DAYS AFTER LANDLORD DELIVERS WRITTEN NOTICE
THEREOF TO TENANT (OR, IF SUCH FAILURE CANNOT REASONABLY BE CURED WITHIN SUCH
THIRTY (30) DAY PERIOD, SUCH LONGER PERIOD AS IS REASONABLY NECESSARY TO EFFECT
SUCH CURE PROVIDED TENANT COMMENCES SUCH CURE PROMPTLY AND DILIGENTLY PURSUES
SUCH CURE CONTINUOUSLY THEREAFTER); (E) THE LEASEHOLD INTEREST OF TENANT IS
LEVIED UPON OR ATTACHED UNDER PROCESS OF LAW; OR (F) AN EVENT OF DEFAULT OR A
MATERIAL DEFAULT OCCURS.

 

13.2        LANDLORD’S REMEDIES.  IF THERE SHALL BE A LEASE DEFAULT, THEN
LANDLORD SHALL HAVE THE RIGHT BUT NOT THE OBLIGATION, AT ITS SOLE OPTION, TO
TERMINATE THIS LEASE BY WRITTEN NOTICE TO TENANT GIVEN PRIOR TO THE CURE OF SUCH
LEASE DEFAULT AND/OR PURSUE ANY OTHER REMEDY PROVIDED BY LAW OR EQUITY,
INCLUDING SPECIFIC PERFORMANCE, OR ANY OTHER REMEDY PROVIDED IN THE ASSET SALE
AGREEMENT OR THE ANCILLARY AGREEMENTS. TO THE FULLEST EXTENT PERMITTED BY LAW,
LANDLORD MAY PROCEED TO RECOVER POSSESSION OF THE PREMISES UNDER APPLICABLE LAWS
AND TENANT AGREES TO COOPERATE WITH LANDLORD TO THE FULLEST EXTENT NECESSARY IN
CONNECTION WITH LANDLORD’S RECOVERY OF POSSESSION OF THE PREMISES AND THE
TRANSFER OF ANY LICENSES OR PERMITS THAT MAY BE REQUIRED TO DO SO, INCLUDING IN
CONNECTION WITH OBTAINING ANY REGULATORY APPROVAL, LICENSE OR PERMIT REQUIRED TO
PERMIT LANDLORD TO RECOVER POSSESSION OF THE PREMISES.  TENANT HEREBY WAIVES
ANY  NOTICE  OF LANDLORD’S INTENTION TO RE-ENTER THE PREMISES OR TERMINATE THIS
LEASE OTHER THAN ANY NOTICE EXPRESSLY REQUIRED BY THIS LEASE.

 

ARTICLE XIV
REPRESENTATIONS, WARRANTIES AND COVENANTS OF LANDLORD

 

14.1        QUIET ENJOYMENT.  LANDLORD COVENANTS THAT IT HAS THE RIGHT TO ENTER
INTO THIS LEASE, AND THAT IF TENANT SHALL PERFORM ALL OF ITS OBLIGATIONS
HEREUNDER PRIOR TO THE EXPIRATION OF ANY NOTICE AND/OR CURE PERIOD APPLICABLE
THERETO, THEN, SUBJECT TO THE PROVISIONS OF THIS LEASE, TENANT SHALL DURING THE
LEASE TERM PEACEABLY AND QUIETLY OCCUPY AND ENJOY THE FULL POSSESSION OF THE
PREMISES WITHOUT HINDRANCE BY LANDLORD OR ANY PARTY CLAIMING THROUGH OR UNDER
LANDLORD.

 

14.2        ENCUMBRANCES.    LANDLORD COVENANTS THAT, DURING THE LEASE TERM, IT
SHALL NOT CAUSE OR PERMIT ANY ENCUMBRANCES TO ENCUMBER THE PREMISES OR ANY
PORTION THEREOF, EXCEPT FOR PERMITTED ENCUMBRANCES.

 

14.3        CONVEYANCE.  LANDLORD COVENANTS THAT, DURING THE LEASE TERM, IT
SHALL NOT CAUSE OR PERMIT THE CONVEYANCE, SALE OR OTHER TRANSFER OF THE PREMISES
OR ANY PORTION THEREOF, EXCEPT AS PART OF A CONVEYANCE OF ALL OR SUBSTANTIALLY
ALL OF LANDLORD’S ASSETS, WITHOUT THE PRIOR WRITTEN CONSENT OF TENANT, WHICH
CONSENT SHALL NOT BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED.  ANY
CONVEYANCE, SALE OR OTHER TRANSFER IN VIOLATION OF THE FOREGOING RESTRICTION
SHALL, AT TENANT’S OPTION, BE VOID AND WITHOUT FORCE OR EFFECT.

 

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ARTICLE XV
GENERAL PROVISIONS

 

15.1        RELATIONSHIP BETWEEN LANDLORD AND TENANT.  NOTHING CONTAINED IN THIS
LEASE SHALL BE CONSTRUED AS CREATING ANY RELATIONSHIP BETWEEN LANDLORD AND
TENANT OTHER THAN THAT OF LANDLORD AND TENANT.

 

15.2        BROKERS.  LANDLORD AND TENANT EACH REPRESENTS AND WARRANTS TO THE
OTHER THAT IN CONNECTION WITH THIS LEASE IT HAS NOT EMPLOYED OR DEALT WITH ANY
THIRD PARTY BROKER, AGENT OR FINDER.  LANDLORD SHALL INDEMNIFY AND HOLD TENANT
HARMLESS FROM AND AGAINST ANY CLAIM FOR BROKERAGE OR OTHER COMMISSIONS ASSERTED
BY ANY BROKER, AGENT OR FINDER EMPLOYED BY LANDLORD OR WITH WHOM LANDLORD HAS
DEALT.  TENANT SHALL INDEMNIFY AND HOLD LANDLORD HARMLESS FROM AND AGAINST ANY
CLAIM FOR BROKERAGE OR OTHER COMMISSIONS ASSERTED BY ANY BROKER, AGENT OR FINDER
EMPLOYED BY TENANT OR WITH WHOM TENANT HAS DEALT.

 

15.3        NOTICES.  ALL NOTICES OR OTHER COMMUNICATIONS REQUIRED UNDER THIS
LEASE SHALL BE IN WRITING AND SHALL BE DEEMED DULY GIVEN AND RECEIVED WHEN
DELIVERED IN PERSON (WITH RECEIPT THEREFOR), ON THE DATE SENT IF SENT BY
FACSIMILE WITH A COPY SENT BY ONE OF THE OTHER METHODS OF DELIVERY DESCRIBED IN
THIS SECTION, ON THE NEXT BUSINESS DAY AFTER DEPOSIT WITH A RECOGNIZED OVERNIGHT
DELIVERY SERVICE, OR ON THE DAY DELIVERED IF SENT BY CERTIFIED OR REGISTERED
MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, TO THE RESPECTIVE ADDRESS(ES)
SET FORTH IN THE ASSET SALE AGREEMENT.

 

15.4        VALIDITY.  EACH PROVISION OF THIS LEASE SHALL BE VALID AND
ENFORCEABLE TO THE FULLEST EXTENT PERMITTED BY LAW.  IF ANY PROVISION OF THIS
LEASE OR THE APPLICATION THEREOF TO ANY PERSON OR CIRCUMSTANCE SHALL TO ANY
EXTENT BE INVALID OR UNENFORCEABLE, THEN SUCH PROVISION SHALL BE DEEMED TO BE
REPLACED BY THE VALID AND ENFORCEABLE PROVISION MOST SUBSTANTIVELY SIMILAR TO
SUCH INVALID OR UNENFORCEABLE PROVISION, AND THE REMAINDER OF THIS LEASE AND THE
APPLICATION OF SUCH PROVISION TO PERSONS OR CIRCUMSTANCES OTHER THAN THOSE AS TO
WHICH IT IS INVALID OR UNENFORCEABLE SHALL NOT BE AFFECTED THEREBY.

 

15.5        PRONOUNS.  FEMININE, MASCULINE OR NEUTER PRONOUNS SHALL BE
SUBSTITUTED FOR THOSE OF ANOTHER FORM, AND THE PLURAL OR SINGULAR SHALL BE
SUBSTITUTED FOR THE OTHER NUMBER, IN ANY PLACE IN WHICH THE CONTEXT MAY REQUIRE
SUCH SUBSTITUTION.

 

15.6        SUCCESSORS AND ASSIGNS.  THE PROVISIONS OF THIS LEASE SHALL BE
BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES AND EACH OF THEIR
RESPECTIVE REPRESENTATIVES, SUCCESSORS AND ASSIGNS, SUBJECT TO THE PROVISIONS
HEREIN RESTRICTING ASSIGNMENT, SUBLETTING AND ENCUMBRANCES.

 

15.7        ENTIRE AGREEMENT.  THIS LEASE CONTAINS AND EMBODIES THE ENTIRE
AGREEMENT OF THE PARTIES HERETO WITH REGARD TO THE SUBJECT MATTER HEREOF AND
SUPERSEDES ALL PRIOR AGREEMENTS, NEGOTIATIONS, LETTERS OF INTENT, PROPOSALS,
REPRESENTATIONS, WARRANTIES, UNDERSTANDINGS, SUGGESTIONS AND DISCUSSIONS,
WHETHER WRITTEN OR ORAL, BETWEEN THE PARTIES HERETO WITH REGARD TO THE SUBJECT
MATTER HEREOF.  ANY REPRESENTATION, INDUCEMENT, WARRANTY, UNDERSTANDING OR
AGREEMENT THAT IS NOT EXPRESSLY SET FORTH IN THIS LEASE, THE ASSET SALE
AGREEMENT (TO THE EXTENT SURVIVING) OR THE ANCILLARY AGREEMENTS SHALL BE OF NO
FORCE OR EFFECT.  THIS LEASE MAY BE AMENDED, MODIFIED OR CHANGED IN ANY MANNER
ONLY BY AN INSTRUMENT SIGNED BY BOTH PARTIES; PROVIDED, HOWEVER, THAT IF

 

23

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AS A RESULT OF THE EXERCISE OF REMEDIES UNDER THE PLEDGE AGREEMENT, LANDLORD
CONTROLS TENANT BY REASON OF THE OWNERSHIP OF A CONTROLLING EQUITY INTEREST IN
TENANT OR THE APPOINTMENT OF A MAJORITY OF THE MEMBERS OF THE BOARD OF DIRECTORS
OR BOARD OF MANAGERS OF TENANT, ANY AMENDMENT, MODIFICATION OR CHANGE IN THE
TERMS OF THIS LEASE MADE AFTER THE DATE ON WHICH LANDLORD ACQUIRED SUCH CONTROL
SHALL NOT BE EFFECTIVE WITHOUT THE WRITTEN CONSENT OF ENERGYSOLUTIONS, WHICH
CONSENT SHALL NOT BE UNREASONABLY WITHHELD, DELAYED OR CONDITIONED.  THIS LEASE
INCLUDES AND INCORPORATES ALL EXHIBITS ATTACHED HERETO.

 

15.8        GOVERNING LAW.  THIS LEASE SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF ILLINOIS.  THERE SHALL BE NO PRESUMPTION THAT THIS LEASE BE CONSTRUED
MORE STRICTLY AGAINST THE PARTY WHO ITSELF OR THOUGH ITS AGENT PREPARED IT, IT
BEING AGREED THAT ALL PARTIES HERETO HAVE PARTICIPATED IN THE PREPARATION OF
THIS LEASE AND THAT EACH PARTY HAD THE OPPORTUNITY TO CONSULT LEGAL COUNSEL
BEFORE THE EXECUTION OF THIS LEASE.

 

15.9        HEADINGS.  HEADINGS ARE USED FOR CONVENIENCE AND SHALL NOT BE
CONSIDERED WHEN CONSTRUING THIS LEASE.

 

15.10      EXECUTION AND DELIVERY.  THE SUBMISSION OF AN UNSIGNED COPY OF THIS
DOCUMENT TO TENANT SHALL NOT CONSTITUTE AN OFFER OR OPTION TO LEASE THE
PREMISES.  THIS LEASE SHALL BECOME EFFECTIVE AND BINDING ONLY UPON EXECUTION AND
DELIVERY BY BOTH LANDLORD AND TENANT.

 

15.11      COUNTERPARTS.  THIS LEASE MAY BE EXECUTED IN MULTIPLE COUNTERPARTS,
EACH OF WHICH SHALL BE DEEMED AN ORIGINAL AND ALL OF WHICH TOGETHER CONSTITUTE
ONE AND THE SAME DOCUMENT.  FAXED SIGNATURES SHALL HAVE THE SAME BINDING EFFECT
AS ORIGINAL SIGNATURES.

 

15.12      WAIVER OF JURY TRIAL.  LANDLORD AND TENANT EACH WAIVES TRIAL BY JURY
IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT IN CONNECTION WITH ANY
MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE RELATIONSHIP
OF LANDLORD AND TENANT HEREUNDER, TENANT’S USE OR OCCUPANCY OF THE PREMISES,
AND/OR ANY CLAIM OF INJURY OR DAMAGE.  LANDLORD AND TENANT EACH WAIVES ANY
OBJECTION TO THE VENUE OF ANY ACTION FILED IN ANY COURT SITUATED IN THE STATE OF
ILLINOIS, AND WAIVES ANY RIGHT, CLAIM OR POWER, UNDER THE DOCTRINE OF FORUM NON
CONVENIENS OR OTHERWISE, TO TRANSFER ANY SUCH ACTION TO ANY OTHER COURT.

 

15.13      REPRESENTATIONS REGARDING ORGANIZATION AND AUTHORIZATION.

 

(A) LANDLORD AND THE PERSON EXECUTING AND DELIVERING THIS LEASE ON LANDLORD’S
BEHALF EACH REPRESENTS AND WARRANTS THAT SUCH PERSON IS DULY AUTHORIZED TO SO
ACT; THAT LANDLORD IS DULY ORGANIZED, IS QUALIFIED TO DO BUSINESS IN THE STATE
OF ILLINOIS, IS IN GOOD STANDING UNDER THE LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA AND THE LAWS OF THE STATE OF ILLINOIS, AND HAS THE POWER AND
AUTHORITY TO ENTER INTO THIS LEASE; AND THAT ALL ACTION REQUIRED TO AUTHORIZE
LANDLORD AND SUCH PERSON TO ENTER INTO THIS LEASE HAS BEEN DULY TAKEN.

 

(B) TENANT AND THE PERSON EXECUTING AND DELIVERING THIS LEASE ON TENANT’S BEHALF
EACH REPRESENTS AND WARRANTS THAT SUCH PERSON IS DULY AUTHORIZED TO SO ACT; THAT
TENANT IS DULY ORGANIZED, IS QUALIFIED TO DO BUSINESS IN THE STATE OF ILLINOIS,
IS IN GOOD STANDING UNDER THE LAWS

 

24

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OF THE STATE OF DELAWARE AND THE LAWS OF THE STATE OF ILLINOIS, AND HAS THE
POWER AND AUTHORITY TO ENTER INTO THIS LEASE AND TO CONDUCT ITS BUSINESS IN THE
MANNER BEING CONDUCTED; AND THAT ALL ACTION REQUIRED TO AUTHORIZE TENANT AND
SUCH PERSON TO ENTER INTO THIS LEASE AND TO CONDUCT ITS BUSINESS IN THE MANNER
BEING CONDUCTED HAS BEEN DULY TAKEN.

 

15.14      PREVAILING PARTY.  IN THE EVENT OF ANY LEGAL PROCEEDING BROUGHT BY
EITHER PARTY AGAINST THE OTHER UNDER THIS LEASE, THE PREVAILING PARTY SHALL BE
ENTITLED TO RECOVER ALL REASONABLE COSTS AND EXPENSES INCURRED IN CONNECTION
WITH SUCH PROCEEDING, INCLUDING REASONABLE ATTORNEYS’ FEES, DISBURSEMENTS AND
ACTUAL COSTS.

 

15.15      SUBORDINATION; ESTOPPEL.

 

(A) TENANT AGREES, AT ANY TIME AND FROM TIME TO TIME (BUT NOT MORE OFTEN THAN
TWICE IN ANY TWELVE (12) MONTH PERIOD), AS REQUESTED BY LANDLORD, UPON NOT LESS
THAN TEN (10) BUSINESS DAYS’ PRIOR NOTICE, TO EXECUTE AND DELIVER TO LANDLORD A
WRITTEN STATEMENT, (A) STATING THAT THIS LEASE IS THEN IN FULL FORCE AND EFFECT
AND HAS NOT BEEN MODIFIED (OR IF MODIFIED, SETTING FORTH ALL MODIFICATIONS),
(B) SETTING FORTH THE THEN CURRENT BASE RENT AND/OR DELAY RENT, (C) SETTING
FORTH THE DATE TO WHICH THE BASE RENT OR DELAY RENT HAS BEEN PAID, (D) STATING
WHETHER OR NOT, TO THE BEST KNOWLEDGE OF THE TENANT, LANDLORD IS IN DEFAULT
UNDER THIS LEASE, AND IF SO, SETTING FORTH THE SPECIFIC NATURE OF ALL SUCH
DEFAULT, (E) STATING WHETHER THERE ARE ANY SUBLEASES AFFECTING THE PREMISES,
(F) STATING THE ADDRESS OF TENANT TO WHICH ALL NOTICES AND COMMUNICATION UNDER
THE LEASE SHALL BE SENT, AND (G) CONTAINING ANY OTHER FACTUAL MATTERS REASONABLY
REQUESTED BY LANDLORD.  TENANT ACKNOWLEDGES THAT ANY STATEMENT DELIVERED
PURSUANT TO THIS PARAGRAPH MAY BE RELIED UPON BY OTHERS WITH WHOM LANDLORD MAY
BE DEALING, INCLUDING ANY PURCHASER OR OWNER OF THE PREMISES, OR OF LANDLORD’S
INTEREST IN THE PREMISES OR ANY LENDER OR MORTGAGEE OF LANDLORD.

 

(B) LANDLORD AGREES, AT ANY TIME AND FROM TIME TO TIME (BUT NOT MORE OFTEN THAN
TWICE IN ANY TWELVE (12) MONTH PERIOD), AS REQUESTED BY TENANT, UPON NOT LESS
THAN TEN (10) BUSINESS DAYS’ PRIOR NOTICE, TO EXECUTE AND DELIVER TO TENANT A
WRITTEN STATEMENT, (A) STATING THAT THIS LEASE IS THEN IN FULL FORCE AND EFFECT
AND HAS NOT BEEN MODIFIED (OR IF MODIFIED, SETTING FORTH ALL MODIFICATIONS),
(B) SETTING FORTH THE THEN CURRENT BASE RENT AND/OR DELAY RENT, (C) SETTING
FORTH THE DATE TO WHICH THE BASE RENT OR DELAY RENT HAS BEEN PAID, (D) STATING
WHETHER OR NOT, TO THE BEST KNOWLEDGE OF LANDLORD, TENANT IS IN DEFAULT UNDER
THIS LEASE, AND IF SO, SETTING FORTH THE SPECIFIC NATURE OF ALL SUCH DEFAULT,
(E) STATING THE ADDRESS OF LANDLORD TO WHICH ALL NOTICES AND COMMUNICATION UNDER
THE LEASE SHALL BE SENT, AND (F) CONTAINING ANY OTHER FACTUAL MATTERS REASONABLY
REQUESTED BY TENANT.  LANDLORD ACKNOWLEDGES THAT ANY STATEMENT DELIVERED
PURSUANT TO THIS PARAGRAPH MAY BE RELIED UPON BY OTHERS WITH WHOM TENANT MAY BE
DEALING.

 

15.16      COMPLIANCE WITH LAWS AND PERMITS.  TENANT, AT ITS SOLE EXPENSE, SHALL
COMPLY, AND CAUSE THE PREMISES TO COMPLY, WITH ALL APPLICABLE LAWS AND PERMITS.
TENANT SHALL IMMEDIATELY PROVIDE LANDLORD WITH WRITTEN NOTICE: (A) UPON TENANT’S
OBTAINING KNOWLEDGE OF ANY POTENTIAL OR KNOWN VIOLATIONS OF ANY APPLICABLE LAWS
RELATING TO THE PREMISES, AND/OR (B) OF TENANT’S RECEIPT OF ANY NOTICE,
CORRESPONDENCE, DEMAND OR COMMUNICATION OF ANY NATURE FROM ANY GOVERNMENTAL
AUTHORITY RELATED TO ANY ALLEGED OR ACTUAL VIOLATION OF ANY LAWS OR PERMITS
RELATING TO THE PREMISES.  TENANT SHALL OBTAIN AND MAINTAIN, AT ITS SOLE COST
AND EXPENSE, ANY AND ALL PERMITS, LICENSES, AUTHORIZATIONS AND OTHER SIMILAR
APPROVALS NECESSARY FOR TENANT TO PERFORM

 

25

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ITS DUTIES UNDER THIS LEASE, INCLUDING THOSE APPROVALS NECESSARY TO PERFORM THE
DECOMMISSIONING OF THE ZION STATION AS CONTEMPLATED BY THIS LEASE.

 

15.17 GUARANTY.  TENANT’S OBLIGATIONS UNDER THIS LEASE ARE ABSOLUTELY,
UNCONDITIONALLY AND IRREVOCABLY GUARANTEED BY ENERGYSOLUTIONS PURSUANT TO THAT
CERTAIN PERFORMANCE GUARANTY OF BUYER’S PARENT AND THAT CERTAIN GUARANTY OF
ENERGYSOLUTIONS, INC., EACH DATED AS OF DECEMBER 11, 2007, AND EXECUTED AND
DELIVERED IN CONNECTION WITH THE ASSET SALE AGREEMENT.

 

[Signatures follow on next page]

 

26

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease under seal as
of the day and year first above written.

 

 

 

LANDLORD:

 

 

 

EXELON GENERATION COMPANY, LLC,
a Pennsylvania limited liability company

 

 

 

 

 

By:

 

[Seal]

 

Name:

 

 

 

Title:

 

 

 

 

 

 

TENANT:

 

 

 

ZIONSOLUTIONS, LLC,
a Delaware limited liability company

 

 

 

 

 

By:

 

[Seal]

 

Name:

 

 

 

Title:

 

 

27

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EXHIBIT A

 

LEGAL DESCRIPTION OF PREMISES

 

PARCEL 1: BLOCK 8 INCLUDING VACATED ALLEY, TOGETHER WITH THAT PART OF THE WEST
HALF OF VACATED DEBORAH AVENUE LYING SOUTH OF TWENTY-NINTH STREET AND NORTH OF
THE CENTERLINE OF THIRTIETH STREET AND THE NORTH HALF OF VACATED THIRTIETH
STREET, LYING EAST OF THE EAST LINE OF EBENEZER AVENUE AND WEST OF THE
CENTERLINE OF DEBORAH AVENUE (EXCEPTING THEREFROM THAT PART THEREOF CONDEMNED
FOR RAILWAY PURPOSES BY PROCEEDINGS HAD IN THE CIRCUIT COURT OF LAKE COUNTY,
ILLINOIS (CASE NO. 1152) ENTITLED: CHICAGO, WAUKEGAN AND NORTH SHORE RAILWAY
COMPANY VS. JOHN ALEXANDER DOWIE, ET AL) IN ZION CITY SUBDIVISION IN SECTION 27,
TOWNSHIP 46 NORTH, RANGE 12 EAST OF THE THIRD PRINCIPAL MERIDIAN, IN LAKE
COUNTY, ILLINOIS.

 

PARCEL 2:  THAT PART OF THE NORTH HALF OF VACATED TWENTY-NINTH STREET LYING EAST
OF THE EAST LINE OF DEBORAH AVENUE AND WEST OF THE CENTERLINE OF VACATED
DAMASCUS AVENUE IN SECTION 22, TOWNSHIP 46 NORTH, RANGE 12 EAST OF THE THIRD
PRINCIPAL MERIDIAN, IN LAKE COUNTY, ILLINOIS.

 

PARCEL 3:  ALL THAT PART OF THE NORTH HALF OF SECTION 22, TOWNSHIP 46 NORTH,
RANGE 12 EAST OF THE THIRD PRINCIPAL MERIDIAN, LYING EAST OF THE EAST LINE OF
THE RIGHT OF WAY OF THE CHICAGO, WAUKEGAN AND NORTH SHORE RAILWAY COMPANY AS
CONDEMNED IN CASE NO. 1152, CIRCUIT COURT OF LAKE COUNTY, ILLINOIS AND SOUTH OF
THE NORTH 1590.26 FEET THEREOF AND NORTH OF THE NORTH LINE OF SHILOH BOULEVARD
WHICH NORTH LINE IS MORE PARTICULARLY DESCRIBED AS A LINE EXTENDING EAST FROM A
POINT ON THE EAST LINE OF SAID FORMER RIGHT OF WAY WHICH IS 8.60 FEET NORTH OF
THE SOUTH LINE OF THE NORTH HALF OF SAID SECTION 22, TO A POINT ON SAID WESTERLY
LINE OF THE ILLINOIS BEACH STATE PARK NORTH ENTRANCE ROAD, WHICH IS 9.94 FEET
NORTH OF THE SOUTH LINE OF THE NORTH HALF OF SAID FRACTIONAL SECTION 23, IN LAKE
COUNTY, ILLINOIS. EXCEPTING THEREFROM THAT PART THEREOF FALLING WITHIN THE STRIP
LAND, 66 FEET WIDE, SITUATED IN THE NORTH HALF OF SECTION 22 AND IN THE NORTH
HALF OF FRACTIONAL SECTION 23, BOTH IN TOWNSHIP 46 NORTH, RANGE 12 EAST OF THIRD
PRINCIPAL MERIDIAN, DEDICATED FOR ROAD PURPOSES BY INSTRUMENT DATED MARCH 14,
1968 AND RECORDED IN THE RECORDER’S OFFICE OF LAKE COUNTY, ON MAY 24, 1968 AS
DOCUMENT NO. 1379370, SAID STRIP OF LAND IS BOUNDED AND DESCRIBED AS FOLLOWS:
BEGINNING ON THE

 

A-1

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SOUTH LINE OF THE NORTH 1590.26 FEET OF SAID NORTH HALF OF FRACTIONAL
SECTION 23, AT A POINT WHICH IS 696 FEET, MEASURED ALONG SAID SOUTH LINE, EAST
FROM THE WEST LINE OF SAID NORTH HALF OF FRACTIONAL SECTION 23, AND RUNNING;
THENCE SOUTH ALONG THE EAST LINE OF THE WEST 696 FEET OF SAID NORTH HALF OF
FRACTIONAL SECTION 23, A DISTANCE OF 124.72 FEET; THENCE SOUTHWESTWARDLY ALONG
THE ARC OF A CIRCLE, CONVEX TO THE SOUTHEAST AND HAVING A RADIUS OF 1000 FEET, A
DISTANCE OF 1070.60 FEET TO A POINT ON THE PRESENT NORTH LINE OF SHILOH
BOULEVARD, WHICH IS 108.19 FEET; MEASURED ALONG SAID NORTH LINE, EAST FROM THE
WEST LINE OF SAID NORTH HALF OF FRACTIONAL SECTION 23; THENCE WEST ALONG SAID
PRESENT NORTH OF SHILOH BOULEVARD, (WHICH IS DESCRIBED AS A STRAIGHT LINE
EXTENDING FROM A POINT ON THE EAST LINE OF THE FORMER RIGHT OF WAY OF THE
CHICAGO, WAUKEGAN AND NORTH SHORE RAILWAY, WHICH IS 8.60 FEET NORTH FROM THE
SOUTH LINE OF THE NORTH HALF OF SAID SECTION 22, TO A POINT ON THE WESTERLY LINE
OF ILLINOIS BEACH STATE PARK NORTH ENTRANCE ROAD, WHICH IS 9.94 FEET NORTH FROM
THE SOUTH LINE OF SAID NORTH HALF OF FRACTIONAL SECTION 23), A DISTANCE OF
204.24 FEET; THENCE NORTHEASTWARDLY ALONG THE ARC OF A CIRCLE, CONVEX TO THE
SOUTHEAST, HAVING A RADIUS OF 934 FEET AND BEING 66 FEET NORTHWESTERLY FROM AND
CONCENTRIC WITH THE FIRST HEREIN DESCRIBED ARC, A DISTANCE OF 1257.41 FEET TO A
POINT WHICH IS 630 FEET EAST FROM SAID WEST LINE OF THE NORTH HALF OF FRACTIONAL
SECTION 23 AND 124.94 FEET SOUTH FROM SAID SOUTH LINE OF THE NORTH 1590.26 FEET
OF SAID NORTH HALF OF FRACTIONAL SECTION 23; THENCE NORTH ALONG THE EAST LINE OF
THE WEST 630 FEET OF SAID NORTH HALF OF FRACTIONAL SECTION 23, SAID DISTANCE OF
124.94 FEET TO THE SOUTH LINE OF THE NORTH 1590.26 FEET AFORESAID, AND THENCE
EAST ALONG SAID SOUTH LINE OF THE NORTH 1590.26 FEET TO THE NORTH HALF OF
FRACTIONAL SECTION 23, A DISTANCE OF 66 FEET TO THE POINT OF BEGINNING.

 

PARCEL 4:  THE EAST HALF OF THE SOUTHEAST QUARTER OF SECTION 22, TOWNSHIP 46
NORTH, RANGE 12 EAST OF THE THIRD PRINCIPAL MERIDIAN, (EXCEPT THAT PART LYING
NORTH OF THE SOUTH LINE OF SHILOH BOULEVARD). ALSO THAT PART OF SAID SHILOH
BOULEVARD VACATED BY ORDINANCE PASSED BY THE CITY COUNCIL OF THE CITY OF ZION,
ILLINOIS ON AUGUST 20, 1968, AND RECORDED IN THE RECORDER’S OFFICE OF LAKE
COUNTY, ILLINOIS, ON AUGUST 22, 1968, AS DOCUMENT NUMBER 1390407, FALLING WITHIN
SAID EAST HALF OF THE SOUTHEAST QUARTER OF SECTION 22, AFORESAID, IN LAKE COUNTY
ILLINOIS.

 

PARCEL 5:  THE EAST 33 FEET OF THE SOUTH 1525.89 FEET OF THE WEST HALF OF SAID
SOUTHEAST QUARTER OF SECTION 22, TOWNSHIP 46 NORTH, RANGE 12 EAST OF THE THIRD
PRINCIPAL MERIDIAN, IN LAKE COUNTY, ILLINOIS.

 

PARCEL 6:  THAT PART OF THE WEST HALF OF THE SOUTHEAST QUARTER OF SAID
SECTION 22, TOWNSHIP 46 NORTH, RANGE 12 EAST OF THE THIRD

 

A-2

--------------------------------------------------------------------------------

 

PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:  BEGINNING AT THE NORTHWEST CORNER OF
SAID SOUTHEAST QUARTER; THENCE EAST ALONG THE NORTH LINE OF SAID SOUTHEAST
QUARTER TO THE EAST LINE OF SAID WEST HALF, 1323.11 FEET; THENCE SOUTH ALONG THE
EAST LINE OF SAID WEST HALF 1111.83 FEET; THENCE WEST TO THE WEST LINE OF SAID
SOUTHEAST QUARTER TO A POINT 1112.06 FEET SOUTH OF THE NORTHWEST CORNER OF SAID
SOUTHEAST QUARTER; THENCE NORTH ALONG THE WEST LINE OF SAID SOUTHEAST QUARTER TO
THE PLACE OF BEGINNING, (EXCEPT THAT PART THEREOF LYING WEST OF THE CENTERLINE
OF VACATED DAMASCUS AVENUE AND EXCEPT THAT PART THEREOF LYING NORTH OF THE SOUTH
LINE OF SHILOH BOULEVARD), IN LAKE COUNTY, ILLINOIS.

 

PARCEL 7:  ALL OF THE NORTH HALF OF FRACTIONAL SECTION 23, TOWNSHIP 46 NORTH,
RANGE 12 EAST OF THE THIRD PRINCIPAL MERIDIAN, EXCEPTING THEREFROM THE FOLLOWING
DESCRIBED LAND; THAT PART OF THE NORTH HALF OF FRACTIONAL SECTION 23, TOWNSHIP
46 NORTH, RANGE 12 EAST OF THE THIRD PRINCIPAL MERIDIAN, LYING SOUTH OF THE
NORTH 1590.26 FEET, AND NORTH OF THE SOUTH 237.00 FEET OF SAID NORTH HALF OF
FRACTIONAL SECTION 23, AND LYING EAST OF THE FOLLOWING DESCRIBED BOUNDARY LINE:
BEGINNING ON THE SOUTH LINE OF THE NORTH 1590.26 FEET AFORESAID, AT A POINT
WHICH IS 696.00 FEET, MEASURED ALONG SAID SOUTH LINE, EAST FROM THE WEST LINE OF
SAID NORTH HALF OF FRACTIONAL SECTION 23, AND RUNNING THENCE SOUTH ALONG THE
EAST LINE OF THE WEST 696 FEET OF SAID NORTH HALF OF FRACTIONAL SECTION 23, A
DISTANCE OF 124.72 FEET; THENCE SOUTHWARDLY ALONG THE ARC OF A CIRCLE, CONVEX TO
THE SOUTHEAST AND HAVING A RADIUS OF 1000.00 FEET, A DISTANCE OF 75.34 FEET TO A
POINT WHICH IS 200.00 FEET SOUTH FROM THE SOUTH LINE OF THE NORTH 1590.26 FEET
AFORESAID, AND 693.16 FEET, MEASURED PARALLEL WITH SAID SOUTH LINE, EAST FROM
THE WEST LINE OF SAID NORTH HALF OF FRACTIONAL SECTION 23; AND THENCE SOUTH
ALONG A STRAIGHT LINE, A DISTANCE OF 610.27 FEET TO A POINT ON THE NORTH LINE OF
THE SOUTH 237.00 FEET AFORESAID WHICH IS 693.16 FEET, MEASURED ALONG SAID NORTH
LINE EAST FROM THE WEST LINE OF SAID NORTH HALF OF FRACTIONAL SECTION 23, IN
LAKE COUNTY, ILLINOIS.

 

PARCEL 8:  THE WEST 750 FEET OF THE SOUTH HALF OF FRACTIONAL SECTION 23,
TOWNSHIP 46 NORTH, RANGE 12 EAST OF THE THIRD PRINCIPAL MERIDIAN, EXCEPTING
THEREFROM THAT PART THEREOF FALLING WITHIN THAT PART OF SHILOH BOULEVARD (AS
DEDICATED BY INSTRUMENT RECORDED IN THE RECORDER’S OFFICE OF LAKE COUNTY,
ILLINOIS, ON DECEMBER 4, 1958 AS DOCUMENT NO. 1013021), LYING NORTHERLY AND
NORTHWESTERLY OF THAT PART OF SAID SHILOH BOULEVARD VACATED BY ORDINANCE PASSED
BY THE CITY COUNCIL OF THE CITY OF ZION, ILLINOIS, ON AUGUST 20, 1968 AND
RECORDED IN THE RECORDER’S OFFICE OF LAKE COUNTY, ILLINOIS ON AUGUST 22, 1968 AS
DOCUMENT NO. 1390407, ALSO THE EAST 50 FEET OF THE WEST 800 FEET OF THE NORTH
640.37 FEET OF SAID SOUTH HALF OF SAID FRACTIONAL SECTION 23, ALSO THAT PART OF
SAID SOUTH HALF OF SAID FRACTIONAL

 

A-3

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SECTION 23 LYING SOUTH OF THE NORTH 1981.87 FEET THEREOF AND EAST OF THE WEST
750 FEET THEREOF, ALL IN LAKE COUNTY, ILLINOIS.

 

PARCEL 9:  THE NORTH 183 FEET OF THE NORTHWEST FRACTIONAL QUARTER OF SECTION 26,
TOWNSHIP 46 NORTH, RANGE 12 EAST OF THE THIRD PRINCIPAL MERIDIAN, IN LAKE
COUNTY, ILLINOIS.

 

PARCEL 10:  THE NORTH 183 FEET OF THE NORTHEAST QUARTER OF SECTION 27, TOWNSHIP
46 NORTH, RANGE 12 EAST OF THE THIRD PRINCIPAL MERIDIAN, IN LAKE COUNTY,
ILLINOIS, EXCEPTING THEREFROM THE WEST 33 FEET OF THE NORTH 33 FEET THEREOF.

 

PARCEL 11:  THAT PART OF THE WEST HALF OF THE SOUTHEAST QUARTER OF SECTION 22,
TOWNSHIP 46 NORTH, RANGE 12 EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS
FOLLOWS: BEGINNING AT A POINT ON THE EAST LINE OF SAID WEST HALF OF THE
SOUTHEAST QUARTER 1111.83 FEET SOUTH OF THE NORTHEAST CORNER OF THE SAID WEST
HALF OF THE SOUTHEAST QUARTER OF SECTION 22; THENCE WEST ON A LINE DRAWN FROM
THE POINT OF BEGINNING OF THIS TRACT TO A POINT ON THE WEST LINE OF THE WEST
HALF OF THE SOUTHEAST QUARTER OF SECTION 22, 1112.06 FEET SOUTH OF THE NORTHWEST
CORNER THEREOF, A DISTANCE OF 495.02 FEET TO A POINT; THENCE SOUTHEASTERLY IN A
STRAIGHT LINE TO A POINT IN A LINE 33 FEET WEST OF AND PARALLEL TO THE SAID EAST
LINE, WHICH POINT IS 175.6 FEET SOUTH OF THE LINE FIRST HEREINABOVE DESCRIBED;
THENCE SOUTH ON THE SAID LINE 33 FEET WEST OF AND PARALLEL WITH THE SAID EAST
LINE TO ITS INTERSECTION WITH A LINE DRAWN FROM A POINT ON THE EAST LINE,
1978.28 FEET SOUTH OF THE NORTHEAST CORNER OF THE WEST ALF OF THE SOUTHEAST
QUARTER OF SECTION 22 TO A POINT ON THE WEST LINE, 1978.33 FEET SOUTH OF THE
NORTHWEST CORNER THEREOF; THENCE EAST ALONG THE LAST DESCRIBED LINE TO THE EAST
LINE OF THE WEST HALF OF THE SOUTHEAST QUARTER OF SECTION 22; THENCE NORTH ALONG
THE SAID EAST LINE TO THE POINT OF BEGINNING, EXCEPTING THEREFROM THAT PORTION
HEREINABOVE DESCRIBED AS PARCEL 5, ALL SITUATED IN THE COUNTY OF LAKE AND STATE
OF ILLINOIS.

 

PARCEL 12:  THAT PART OF THE SOUTH FRACTIONAL HALF OF SECTION 23, TOWNSHIP 46
NORTH, RANGE 12 EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS: 
BEGINNING AT A POINT 441 FEET EAST AND 60 FEET NORTH OF THE NORTHWEST CORNER OF
HOSAH SUBDIVISION (SAID NORTHWEST CORNER BEING 750 FEET EAST OF THE WEST LINE OF
FRACTIONAL SECTION 23 AND 640.7 FEET SOUTH OF EAST AND WEST QUARTER SECTION LINE
OF FRACTIONAL SECTION 23); THENCE NORTH, 360.7 FEET; THENCE EAST TO THE WATER’S
EDGE OF LAKE MICHIGAN; THENCE SOUTHERLY ALONG THE WATER’S EDGE OF SAID LAKE
MICHIGAN TO A POINT 60 FEET NORTH OF TE NORTH LINE OF SAID HOSAH SUBDIVISION;
THENCE WEST TO THE POINT OF BEGINNING (EXCEPTING THEREFROM THAT PART THEREOF
DESCRIBED AS FOLLOWS: COMMENCING AT A POINT ON THE NORTH LINE OF THE SOUTH HALF
OF SAID

 

A-4

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FRACTIONAL SECTION 23, WHICH IS 1,724.65 FEET EAST OF THE WEST LINE OF SAID
SECTION 23 AND WHICH IS 924.65 FEET EAST OF THE WEST LINE OF THE CITY OF ZION,
BEACH PARK PROPERTY, SAID NORTH LINE OF THE SOUTH HALF OF SAID FRACTIONAL
SECTION 23, HAVING A BEARING OF NORTH 90 DEGREES 00 MINUTES EAST; THENCE SOUTH
00 DEGREES 00 MINUTES EAST, 365.00 FEET TO THE PLACE OF BEGINNING OF THIS
DESCRIPTION; THENCE NORTH 90 DEGREES 00 MINUTES EAST ALONG A LINE DRAWN PARALLEL
TO THE NORTH LINE OF THE SOUTH HALF OF SAID FRACTIONAL SECTION 23, A DISTANCE OF
47.0 FEET, MORE OR LESS, TO THE SHORE LINE OF LAKE MICHIGAN; THENCE SOUTHERLY
ALONG THE SHORE LINE OF LAKE MICHIGAN TO A POINT WHICH IS 395.00 FEET SOUTH FROM
THE NORTH LINE OF SOUTH HALF OF SAID FRACTIONAL SECTION 23, THENCE SOUTH 90
DEGREES 00 MINUTES WEST ALONG A LINE WHICH IS PARALLEL TO AND 395.00 FEET SOUTH
FROM THE NORTH LINE OF SOUTH HALF OF SAID FRACTIONAL 23, 47.00 FEET, MORE OR
LESS, TO A POINT WHICH IS 30.00 FEET, SOUTH 00 DEGREES 00 MINUTES EAST FROM THE
PLACE OF BEGINNING, AND THENCE NORTH 00 DEGREES 00 MINUTES EAST, 30.00 FEET TO
THE PLACE OF BEGINNING), ALL IN LAKE COUNTY, ILLINOIS.

 

PARCEL 13: THAT PART OF THE PRIVATE PARKWAY WITHIN SHILOH BOULEVARD, IN ZION
CITY SUBDIVISION OF PART OF SECTIONS 22 AND 27, IN TOWNSHIP 46 NORTH, RANGE 12
EAST OF THE THIRD PRINCIPAL MERIDIAN, (THE PLAT OF WHICH WAS RECORDED MARCH 29,
1902 AS DOCUMENT NUMBER 85517 IN BOOK “E” OF PLATS, AT PAGES 76 AND 77), LYING
EAST OF THE EASTERLY LINE OF THE RIGHT OF WAY OF THE CHICAGO AND NORTHWESTERN
RAILWAY, AND WEST OF THE WEST LINE OF THE FORMER RIGHT OF WAY OF THE CHICAGO,
WAUKEGAN AND NORTH SHORE RAILWAY COMPANY, IN LAKE COUNTY, ILLINOIS.

 

PARCEL 14:  THE SOUTH 220.0 FEET (EXCEPT THE WEST 800.0 FEET THEREOF) OF THE
NORTH HALF OF FRACTIONAL SECTION 23, TOWNSHIP 46 NORTH, RANGE 12 EAST OF THE
THIRD PRINCIPAL MERIDIAN, IN LAKE COUNTY ILLINOIS.

 

PARCEL 15:  THAT PART OF THE SOUTH HALF OF FRACTIONAL SECTION 23, TOWNSHIP 46
NORTH, RANGE 12 EAST OF THE THIRD PRINCIPAL MERIDIAN, LYING EAST OF THE EAST
LINE OF PATMOS AVENUE, (BEING A LINE 800 FEET EAST FROM AND PARALLEL WITH THE
WEST LINE OF SAID SOUTH HALF OF FRACTIONAL SECTION 23) AND LYING NORTH OF A LINE
WHICH IS 60 FEET NORTH FROM AND PARALLEL WITH THE NORTH LINE OF HOSAH
SUBDIVISION, PRIVATE, BEING A SUBDIVISION OF PART OF THE SOUTH HALF OF
FRACTIONAL SECTION 23, TOWNSHIP 46 NORTH, RANGE 12 EAST OF THE THIRD PRINCIPAL
MERIDIAN, ZION, LAKE COUNTY, ILLINOIS; EXCEPTING THEREFROM THAT PART OF SAID
SOUTH FRACTIONAL HALF OF SECTION 23, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT
441 FEET EAST AND 60 FEET NORTH OF THE NORTHWEST CORNER OF HOSAH SUBDIVISION
(SAID NORTHWEST CORNER BEING 750 FEET EAST OF THE WEST LINE OF FRACTIONAL
SECTION 23 AND 640.7 FEET SOUTH OF THE EAST AND WEST QUARTER SECTION LINE OF
FRACTIONAL SECTION 23);

 

A-5

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THENCE NORTH, 360.7 FEET; THENCE EAST TO THE WATER’S EDGE OF LAKE MICHIGAN;
THENCE SOUTHERLY ALONG THE WATER’S EDGE OF SAID LAKE MICHIGAN TO A POINT 60 FEET
NORTH OF THE NORTH LINE OF SAID HOSAH SUBDIVISION; THENCE WEST TO THE POINT OF
BEGINNING, IN LAKE COUNTY, ILLINOIS.

 

PARCEL 16: THAT PART OF THE SOUTH HALF OF FRACTIONAL SECTION 23, TOWNSHIP 46
NORTH, RANGE 12 EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT WHICH IS 640.37 FEET SOUTH AND 760 FEET EAST OF THE WEST
QUARTER SECTION CORNER OF SAID SECTION 23; THENCE RUNNING EAST PARALLEL WITH THE
EAST AND WEST QUARTER SECTION LINE THROUGH SAID SECTION 50 FEET; THENCE NORTH
PARALLEL WITH THE WEST LINE OF SAID SECTION 23, 60 FEET, THENCE RUNNING EAST
PARALLEL TO SAID EAST AND WEST QUARTER SECTION LINE TO THE SHORES OF LAKE
MICHIGAN; THENCE SOUTHERLY FOLLOWING THE MEANDERS OF SAID LAKE TO A POINT WHICH
IS 1981.87 FEET SOUTH OF THE EAST AND WEST QUARTER SECTION LINE THROUGH SAID
SECTION 23; THENCE WEST PARALLEL WITH SAID QUARTER SECTION LINE TO A POINT WHICH
IS 750 FEET EAST OF THE WEST LINE OF SAID SECTION 23; THENCE NORTH PARALLEL WITH
THE WEST LINE OF SAID SECTION 23, 1341.5 FEET TO A POINT BEING THE POINT OF
BEGINNING, IN LAKE COUNTY, ILLINOIS.

 

PARCEL 17: LOT 2 IN BLOCK 66 IN ZION CITY SUBDIVISION IN SECTION 22 AFORESAID
TOGETHER WITH THE EAST HALF OF THE VACATED ALLEY IN SAID BLOCK AND THE SOUTH
HALF OF VACATED TWENTY-FIFTH PLACE NORTH AND ADJOINING SAID LOT 2 AND EAST HALF
VACATED ALLEY AFORESAID AND THE NORTH HALF OF VACATED TWENTY-SIXTH STREET SOUTH
AND ADJOINING SAID LOT 2 AND EAST HALF VACATED ALLEY AFORESAID, IN LAKE COUNTY,
ILLINOIS.

 

PARCEL 18:  THE NORTH HALF OF LOTS 1 AND 2 IN BLOCK 67 (EXCEPT THAT PART OF THE
NORTH HALF OF LOT 1 CONDEMNED FOR RAILWAY PURPOSES BY PROCEEDINGS HAD IN THE
CIRCUIT COURT OF LAKE COUNTY, ILLINOIS, ENTITLED: CHICAGO, WAUKEGAN AND NORTH
SHORE RAILWAY COMPANY VS. JOHN ALEXANDER DOWIE, ET AL, CASE NO. 1152), IN ZION
CITY SUBDIVISION IN SECTION 22 AFORESAID, TOGETHER WITH VACATED ALLEY IN THE
NORTH HALF OF SAID BLOCK AND THE SOUTH HALF OF VACATED TWENTY-SIXTH STREET LYING
NORTH AND ADJOINING LOTS 1 AND 2 AND VACATED ALLEY, IN LAKE COUNTY, ILLINOIS.

 

PARCEL 19:  BLOCK 93 (EXCEPT THAT PART THEREOF LYING NORTH OF A LINE 99 FEET
SOUTH OF AND PARALLEL TO THE CENTERLINE OF TWENTY-EIGHT STREET), TOGETHER WITH
THAT PART OF THE WEST HALF OF VACATED DAMASCUS AVENUE LYING SOUTH OF A LINE 99
FEET SOUTH OF THE CENTERLINE OF TWENTY-EIGHT STREET AND NORTH OF THE NORTH LINE
OF VACATED TWENTY-NINTH, IN LAKE COUNTY, ILLINOIS.

 

A-6

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PARCEL 20:  LOT 1 IN BLOCK 66 (EXCEPT THAT PART OF SAID LOT 1 CONDEMNED FOR
RAILWAY PURPOSES BY PROCEEDING HAD IN THE CIRCUIT COURT OF LAKE COUNTY, ILLINOIS
ENTITLED: CHICAGO, WAUKEGAN AND NORTH SHORE RAILWAY COMPANY VS. JOHN ALEXANDER
DOWIE, ET AL, CASE NO 1152) IN ZION CITY SUBDIVISION IN SECTION 22, TOWNSHIP 46
NORTH, RANGE 12 EAST OF THE THIRD PRINCIPAL MERIDIAN, TOGETHER WITH THE WEST
HALF OF THE VACATED ALLEY IN SAID BLOCK AND THE SOUTH HALF OF VACATED
25TH STREET LYING NORTH AND ADJOINING SAID LOT 1, AND WEST HALF VACATED ALLEY
AFORESAID AND THE NORTH HALF OF VACATED 26TH STREET SOUTH AND ADJOINING SAID LOT
1, AND WEST HALF VACATED VALLEY AFORESAID IN LAKE COUNTY, ILLINOIS.

 

PARCEL 21: THAT PART OF THE WEST ½ OF THE SOUTHEAST ¼ OF SECTION 22, TOWNSHIP 46
NORTH, RANGE 12 EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHWEST CORNER OF SAID SOUTHEAST ¼ THENCE EAST ALONG THE
NORTH LINE OF SAID SOUTHWEST ¼ TO THE EAST LINE SAID WEST ½, 1323.11 FEET;
THENCE SOUTH ALONG THE EAST LINE OF SAID WEST ½, 1111.83 FEET; THENCE WEST TO
THE WEST LINE OF SAID SOUTHEAST ¼ TO A POINT 1112.06 FEET SOUTH OF THE NORTHWEST
CORNER OF SAID SOUTHEAST ¼; THENCE NORTH ALONG THE WEST LINE OF SAID SOUTHEAST ¼
TO THE PLACE OF BEGINNING, INCLUDING VACATED STREETS AND ALLEYS ADJOINING
(EXCEPT THE WEST 33 FEET THEREOF; AND ALSO EXCEPT THAT PART THEREOF LYING EAST
OF THE CENTERLINE OF VACATED DAMASCUS AVENUE AND SAID CENTERLINE EXTENDED NORTH;
AND ALSO EXCEPT THAT PART THEREOF LYING NORTH OF THE CENTERLINE OF VACATED
TWENTY-FIFTH PLACE AND WEST OF THE CENTERLINE AND SAID CENTER LINE EXTENDED
NORTH OF VACATED DAMASCUS AVENUE), IN LAKE COUNTY, ILLINOIS.

 

PARCEL 22: THAT PART OF THE SECTIONS 15, 22 AND 27, TOWNSHIP 46 NORTH, RANGE 12
EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOW, TO WIT: A STRIP OF
LAND 100 FEET WIDE, LYING 50 FEET WIDE ON EACH SIDE OF THE CENTERLINE THEREOF,
WHICH IS DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTH LINE OF THE
SOUTH HALF OF THE SOUTHWEST QUARTER OF SECTION 15, 50 FEET EAST OF THE EAST LINE
OF THE RIGHT OF WAY OF THE CHICAGO AND NORTH WESTERN RAILWAY COMPANY; RUNNING
THENCE SOUTHERLY ON A LINE PARALLEL WITH AND 50 FEET EASTERLY FROM SAID EASTERLY
RIGHT OF WAY LINE, A DISTANCE OF 2356.6 FEET; THENCE CURVING TO THE EAST ON A
CURVE OF 3820 FOOT RADIUS, A DISTANCE OF 734.5 FEET; THENCE ON A TANGENT TO SAID
CURVE 71.6 FEET; THENCE CURVING TO THE WEST ON A CURVE OF 3820 FOOT RADIUS, A
DISTANCE OF 533.3 FEET; THENCE SOUTH ON A TANGENT TO SAID LAST CURVE AND ON A
LINE PARALLEL WITH AND 364 FEET WEST OF THE EAST LINE OF THE WEST HALF OF
SECTION 22 AND THE EAST LINE OF THE NORTHWEST QUARTER OF SECTION 27, A DISTANCE
OF 4839 FEET; THENCE CURVING TO THE WEST ON A CURVE OF 3820 FOOT RADIUS, A
DISTANCE OF 709 FEET, MORE OR LESS, TO A POINT ON THE SOUTH

 

A-7

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LINE OF THE NORTHWEST QUARTER OF SAID SECTION 27, SAID POINT BEING 429.75 FEET
WEST OF THE SOUTHEAST CORNER OF SAID QUARTER SECTION, EXCEPTING THEREFROM THAT
PART THEREOF LYING NORTH OF THE SOUTH LINE OF THE  NORTH 1590.26 FEET OF THE
NORTH HALF OF SAID SECTION 23 AND EXCEPTING THEREFROM THAT PART THEREOF LYING
SOUTH OF THE SOUTH LINE OF THE NORTH 627 FEET OF THE NORTHWEST QUARTER OF SAID
SECTION 27; AND EXCEPT THAT PART LYING SOUTH OF THE NORTH LINE OF 27TH STREET
AND NORTH OF THE CENTER LINE OF 29TH STREET.

 

PARCEL 23: THAT PART OF SECTION 22, TOWNSHIP 46 NORTH, RANGE 12 EAST OF THE
THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS: TO-WIT: BEGINNING AT THE
INTERSECTION OF THE NORTH LINE OF SHILOH BOULEVARD IN THE CITY OF ZION WITH THE
EASTERLY LINE OF THE RIGHT OF WAY OF THE CHICAGO AND NORTHWESTERN RAILWAY
COMPANY; THENCE NORTHERLY ALONG THE SAID EASTERLY RIGHT OF WAY LINE TO THE
INTERSECTION THEREOF WITH THE WESTERLY LINE OF THE RIGHT OF WAY LINE OF THE
CHICAGO, WAUKEGAN AND NORTH SHORE RAILWAY COMPANY; THENCE SOUTHEASTERLY ALONG
SAID WESTERLY RIGHT OF WAY LINE TO THE NORTH LINE OF SHILOH BOULEVARD AND THENCE
WEST ON THE NORTH LINE OF SHILOH BOULEVARD TO THE PLACE OF BEGINNING; EXCEPTING
THEREFROM THAT PART THEREOF LYING NORTH OF THE SOUTH LINE OF THE NORTH 1590.26
FEET OF THE NORTH ½ OF SAID SECTION 22.

 

PARCEL 24: THAT PART OF THE SOUTH FRACTIONAL HALF OF SECTION 23, TOWNSHIP 46
NORTH, RANGE 12, EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:
COMMENCING AT A POINT ON THE NORTH LINE OF THE SOUTH HALF OF SAID FRACTIONAL
SECTION 23, WHICH IS 1724.65 FEET EAST OF THE WEST LINE OF SECTION 23 AND WHICH
IS 924.65 FEET EAST OF THE WEST LINE OF THE CITY OF ZION, BEACH PARK PROPERTY,
SAID NORTH LINE OF THE SOUTH HALF OF SAID FRACTIONAL SECTION 23; HAVING A
BEARING OF NORTH 90 DEGREES 00 MINUTES EAST; THENCE SOUTH 00 DEGREES 00 MINUTES
EAST, 365.00 FEET TO PLACE OF BEGINNING OF THIS DESCRIPTION; THENCE NORTH 90
DEGREES 00 MINUTES EAST ALONG A LINE DRAWN PARALLEL TO THE NORTH LINE OF THE
SOUTH HALF OF SAID FRACTIONAL SECTION 23 A DISTANCE OF 47 FEET, MORE OR LESS, TO
THE SHORE LINE OF LAKE MICHIGAN; THENCE SOUTHERLY ALONG THE SHORE LINE OF LAKE
MICHIGAN TO A POINT WHICH IS 395 FEET SOUTH FROM THE NORTH LINE OF THE SOUTH
HALF OF FRACTIONAL SECTION 23; 47 FEET, MORE OR LESS, TO A POINT WHICH IS 30
FEET, SOUTH 00 DEGREES 00 MINUTES EAST, FROM THE PLACE OF BEGINNING, AND THENCE
NORTH 00 DEGREES 00 MINUTES EAST, 30 FEET TO THE PLACE OF BEGINNING, IN LAKE
COUNTY, ILLINOIS.

 

A-8

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EXHIBIT B

 

PLAN SHOWING PREMISES, SWITCHYARD AND SYNCHRONOUS CONDENSER AREA

 

[PLAN SHOWING PREMISES, SWITCHYARD, AND SYNCHRONOUS CONDENSER AREA WILL BE
COMPLETED BY LANDLORD PRIOR TO THE LEASE COMMENCEMENT DATE AND WILL BE ATTACHED
TO THIS LEASE AT THE TIME OF EXECUTION.]

 

B-1

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EXHIBIT C

 

PLANS AND SPECIFICATIONS FOR ISFSI ISLAND

 

General Requirements:

 

The cask system will be dual purpose system fully licensed by the NRC for dual
purpose use to handle all fuel and other waste at the Premises intended for
storage in the ISFSI, including intact, damaged and fuel debris assemblies.  The
ISFSI Island will be constructed in accordance with all applicable Laws and
licensing requirements including standards set forth in the Zion Station
Defueled Safety Analysis Report (“DSAR”).

 

All cask components shall comply fully with the contractor’s CoCs, FSAR, and the
NRC SER. The cask system must be licensed by the NRC under 10CFR72 prior to
commencement of construction and must be licensed by the NRC under 10CFR71 prior
to expiration or termination of the Lease Term.

 

The cask system must provide the required containment, confinement, shielding,
criticality control and passive heat removal capacity independent of any other
facility, structures, or components.  Heat transfer shall be totally passive, by
natural convection, radiation and conduction, without any moving parts.  Maximum
allowable temperatures of adjacent concrete surfaces (casks or pads) shall be in
accordance with the limits of ACI 349-97.  Storage units shall be arranged on
the ISFSI pad to allow ease of placement and removal.

 

Tornado and Tornado Missile Requirements:

 

The cask system shall be able to withstand a Design Basis tornado in accordance
with the Zion Station DSAR.

 

Flood Design Requirements:

 

The cask system shall meet the flood design requirements of the Zion Station
DSAR.

 

Seismic Design Requirements:

 

The cask system shall be capable of withstanding a horizontal ground
acceleration and a simultaneous vertical acceleration meeting the seismic design
requirements of the DSAR.

 

C-1

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Facility Support Structures:

 

The facility must include one or more buildings suitable for office space for
security and site maintenance and monitoring and testing functions and related
communications and other security and maintenance and monitoring and testing
equipment, including storage space for vehicles such as tractors, lifts, and
grounds-keeping equipment.

 

Other Requirements:

 

Other detailed specifications and requirements for the facility will be prepared
by Tenant with input from Landlord.  Landlord will be given a reasonable
opportunity to review and comment on each of Tenant’s final requests for
proposals for major equipment, materials and services related to construction of
the ISFSI, provided that such review and comment will be performed by Landlord
as soon as reasonably possible, not to exceed thirty (30) calendar days.

 

Location:

 

Prior to the Lease Commencement Date, Tenant will present to Landlord an
engineering study identifying suitable locations for the ISFSI and the required
buffer zone.  Landlord will select the desired location of the ISFSI and the
required buffer zone from the alternatives presented in the engineering study.

 

C-2

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EXHIBIT D

 

LIST OF MAJOR EQUIPMENT TO BE REMOVED FROM THE PREMISES

 

REACTOR VESSELS

REACTOR VESSEL INTERNALS

PRIMARY LOOP PIPING, VALVES AND PUMPS (INCLUDING REACTOR COOLANT PUMPS AND
MOTORS)

STEAM GENERATORS

PRESSURIZERS

TURBINE/GENERATORS

MAIN CONDENSERS

SECONDARY LOOP PIPING, VALVES AND PUMPS (INCLUDING FEEDWATER PUMPS AND MOTORS)

TURBINE STOP VALVES

HEAT EXCHANGERS

SECONDARY LOOP HEAT EXCHANGERS (MOISTURE SEPARATOR REHEATERS AND FEEDWATER
REHEATERS)

4 MAIN POWER TRANSFORMERS

4 RESIDUAL HEAT REMOVAL HEAT EXCHANGERS AND RELATED PIPING

 

D-1

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EXHIBIT D

 

 

PUT OPTION AGREEMENT

 

 

BY AND BETWEEN

 

EXELON GENERATION COMPANY, LLC

 

AND

 

ZIONSOLUTIONS, LLC

 

 

                       , 200  

 

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EXHIBIT D

TABLE OF CONTENTS

 

1.

DEFINITIONS

3

 

 

 

1.1.

DEFINITIONS

3

1.2.

CERTAIN INTERPRETIVE MATTERS

13

 

 

 

2.

OPTION

14

 

 

 

2.1.

GRANT OF OPTION; EXERCISE OF OPTION

14

2.2.

PUT OPTION ASSETS

14

2.3.

PUT OPTION LIABILITIES

16

2.4.

END STATE CONDITIONS FOR EXERCISE OF PUT OPTION

19

 

 

 

3.

THE PUT OPTION CLOSING

19

 

 

 

3.1.

PUT OPTION CLOSING

19

3.2.

PAYMENT OF PURCHASE PRICE

20

3.3.

PRORATIONS

20

3.4.

DELIVERIES BY ZION SOLUTIONS

21

3.5.

DELIVERIES BY EXELON

22

 

 

 

4.

REPRESENTATIONS AND WARRANTIES OF ZION SOLUTIONS

22

 

 

 

4.1.

TITLE TO PUT OPTION ASSETS

22

 

 

 

5.

COVENANTS OF THE PARTIES

23

 

 

 

5.1.

CONDUCT OF ZION SOLUTIONS

23

5.2.

CONDUCT OF EXELON

24

5.3.

CONDUCT OF PARTIES

24

5.4.

EXPENSES

25

5.5.

PUBLIC STATEMENTS

25

5.6.

TAX MATTERS

25

 

 

 

6.

CONDITIONS

28

 

 

 

6.1.

CONDITIONS TO OBLIGATIONS OF ZION SOLUTIONS

28

6.2.

CONDITIONS TO OBLIGATIONS OF EXELON

29

 

 

 

7.

INDEMNIFICATION

30

 

 

 

7.1.

INDEMNIFICATION

30

7.2.

DEFENSE OF CLAIMS

32

 

 

 

8.

MISCELLANEOUS PROVISIONS

34

 

 

 

8.1.

AMENDMENT AND MODIFICATION

34

8.2.

WAIVER OF COMPLIANCE; CONSENTS

34

8.3.

SURVIVAL OF WARRANTIES, COVENANTS AND OBLIGATIONS

34

8.4.

NOTICES

34

8.5.

ASSIGNMENT

35

8.6.

GOVERNING LAW

36

8.7.

COUNTERPARTS

36

8.8.

ATTACHMENTS AND SCHEDULES

36

8.9.

ENTIRE AGREEMENT

36

8.10.

ACKNOWLEDGMENT; INDEPENDENT DUE DILIGENCE

37

8.11.

BULK SALES LAWS

37

8.12.

NO JOINT VENTURE

37

8.13.

CHANGE IN LAW

38

8.14.

SEVERABILITY

38

8.15.

SPECIFIC PERFORMANCE

38

 

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LIST OF ATTACHMENTS AND SCHEDULES

 

ATTACHMENTS

 

 

 

Attachment D-1

Form of Assignment and Assumption Agreement

Attachment D-2

Form of Bill of Sale

Attachment D-3

Form of Put Option Exercise Notice

 

 

SCHEDULES

 

 

 

1.1 (80)

Required Regulatory Approvals

 

 

1.1 (97)

Zion Solutions’ Agreements

 

2

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PUT OPTION AGREEMENT

 

This PUT OPTION AGREEMENT, dated as of                        , 200    (the
“Agreement”), is by and between EXELON GENERATION COMPANY, LLC, a Pennsylvania
limited liability company (“Exelon”), and ZIONSOLUTIONS, LLC, a Delaware limited
liability company (“Zion Solutions”). Exelon and Zion Solutions are referred to
individually as a “Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, pursuant to that Asset Sale Agreement, dated as of   December 11, 2007
(the “Asset Sale Agreement”) by and among Exelon, Zion Solutions and
EnergySolutions, LLC, a Utah limited liability company and the parent Company of
Zion Solutions (“Zion Solutions’ Parent”), and EnergySolutions, Inc., a Delaware
corporation, Exelon has agreed, subject to the terms and conditions of the Asset
Sale Agreement, to sell, assign, convey, transfer and deliver all of its right,
title and interest to the Zion Assets (as defined in the Asset Sale Agreement)
to Zion Solutions, and Zion Solutions has agreed, subject to the terms and
conditions of the Asset Sale Agreement, to assume and discharge the Assumed
Liabilities (as defined in the Asset Sale Agreement);

 

WHEREAS, pursuant to that Lease Agreement, dated as of                     ,
200    (the “Lease Agreement”) by and between Exelon and Zion Solutions, Exelon
has agreed to lease the Premises (as defined in the Lease Agreement) to Zion
Solutions; and

 

WHEREAS, Exelon has agreed to grant to Zion Solutions the Put Option (as defined
below) on the terms and subject to the conditions of this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements hereinafter set forth, and intending to be legally
bound hereby, the Parties agree as follows:

 

1.                                       DEFINITIONS

 

1.1.                              DEFINITIONS.

 

As used in this Agreement, the following terms have the meanings specified in
this Section 1.1.  All terms not otherwise defined herein shall have the
meanings ascribed to them in the Asset Sale Agreement or the Lease Agreement.

 

(1)           “Affiliate” has the meaning set forth in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act.

 

(2)           “Agreement” means this Put Option Agreement, together with the
Schedules and Attachments hereto, as the same may be from time to time amended.

 

(3)           “Amended NRC Licenses” means the NRC Part 50 Operating Licenses
for the ISFSI Island, including embedded licenses for possession of byproduct
and special nuclear material.

 

3

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(4)           “Asset Sale Agreement” has the meaning set forth in the preamble.

 

(5)           “Atomic Energy Act” means the Atomic Energy Act of 1954, as
amended, 42 U.S.C. Section 2011 et seq.

 

(6)           “Business Books and Records” has the meaning set forth in
Section 2.2.4.

 

(7)           “Business Day” shall mean any day other than Saturday, Sunday and
any day on which banking institutions in the State of Illinois are authorized by
law or other governmental action to close.

 

(8)           “Buyer Backup NDT” has the meaning set forth in the Asset Sale
Agreement.

 

(9)           “Buyer NDF” means the trust fund, if any, maintained by Zion
Solutions after the Closing with respect to the Facilities for purposes of
Decommissioning which does not meet the requirements of Code Section 468A and
Treas. Reg. § 1.468A-5.

 

(10)         “Buyer QDF” means the trust fund maintained by Zion Solutions after
the Closing with respect to the Facilities for purposes of Decommissioning which
the IRS has determined prior to the Closing Date meets the requirements of Code
Section 468A and Treas. Reg. § 1.468A-5.

 

(11)         “Byproduct Material” means any radioactive material (except Special
Nuclear Material) yielded in, or made radioactive by, exposure to the radiation
incident to the process of producing or utilizing Special Nuclear Material.

 

(12)         “Class A Low Level Waste” means Low Level Waste whose physical form
and characteristics meet the minimum requirements set forth in 10 C.F.R. §
61.56(a) but are not Greater Than Class C Waste and not classified as Class B or
Class C Low Level Waste under 10 C.F.R. § 61.55(a)(2).

 

(13)         “Class B Low Level Waste” means Low Level Waste classified by the
NRC as Class B low level waste in accordance with the provisions of 10 C.F.R. §
61.55 and 10 C.F.R. § 61.56.

 

(14)         “Clive, Utah Facility” means the facility operated by Zion
Solutions’ Parent in Clive, Utah, which is licensed to dispose of Class A Low
Level Waste.

 

(15)         “Closing Date” means the date of the closing of the Asset Sale
Agreement.

 

(16)         “Code” means the Internal Revenue Code of 1986, as amended.

 

(17)         “Commercially Reasonable Efforts” mean efforts which are designed
to enable a Party, directly or indirectly, to expeditiously satisfy a condition
to, or otherwise assist in the consummation of, the transactions contemplated by
this Agreement and which do not require the performing Party to expend any funds
or assume Liabilities other than expenditures and

 

4

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Liability assumptions which are customary and reasonable in nature and amount in
the context of the transactions contemplated by this Agreement.

 

(18)         “Decommission” and “Decommissioning” mean (i) the dismantlement and
removal of the Facilities and any reduction or removal of radioactivity at the
Zion Station Site to a level that permits the release of all or any specified
portion of the Zion Station Site for unrestricted use, as specified in 10 CFR
20.1402; (ii) all other activities necessary for the retirement, dismantlement,
decontamination and/or storage of the Facilities to comply with all applicable
Nuclear Laws and Environmental Laws, including the applicable requirements of
the Atomic Energy Act and the NRC’s rules, regulations, orders and
pronouncements thereunder; and (iii) any planning and administrative activities
incidental thereto; provided, however, that compliance with Environmental Laws
shall not be required for any activities described in clause (i) or
(ii) relating to the Switchyard.

 

(19)         “Direct Claim” has the meaning set forth in Section 7.2.4.

 

(20)         “Encumbrances” means any mortgages, pledges, liens, security
interests, conditional and installment sale agreements, conservation easements,
deed restrictions, easements, encumbrances and charges of any kind.

 

(21)         “End State Conditions” has the meaning set forth in Section 2.4.

 

(22)         “Energy Reorganization Act” means the Energy Reorganization Act of
1974, as amended.

 

(23)         “Environment” means all soil, real property, air, water (including
surface waters, streams, ponds, drainage basins and wetlands), groundwater,
water body sediments, drinking water supply, stream sediments or land, including
land surface or subsurface strata, including all fish, plant, wildlife, and
other biota and any other environmental medium or natural resource.

 

(24)         “Environmental Laws” means all Laws, other than Nuclear Laws, in
effect at any time prior to the earlier of the Put Option Closing or termination
of the NRC Licenses regarding pollution or protection of the Environment, the
conservation and management of land, natural resources and wildlife or human
health and safety or the Occupational Safety and Health Act (only as it relates
to Hazardous Substances), including, without limitation, Laws regarding Releases
or threatened Releases of Hazardous Substances (including, without limitation,
Releases to ambient air, surface water, groundwater, land, surface and
subsurface strata) or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, Release, transport, disposal or handling
of Hazardous Substances.  “Environmental Laws” include, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C.
§§ 9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. §§ 1801
et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §§ 6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.), the
Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. §§ 2601 et seq.), the Oil Pollution Act (33 U.S.C. §§ 2701 et seq.), the
Emergency Planning and Community Right to-Know Act (42 U.S.C. §§ 11001 et seq.),
the Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.) only as it

 

5

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relates to Hazardous Substances, and all other state and federal Laws (including
common law) analogous to any of the above.

 

(25)         “Environmental Liabilities” means: (i) any liability, to the extent
relating to the disposal, storage, transportation, discharge, release,
recycling, or the arrangement for such activities of Hazardous Substances from
the Zion Station Site; (ii) the presence of Hazardous Substances in, on or under
the Zion Station Site regardless of how the Hazardous Substances came to rest
at, on or under the Zion Station Site; (iii) the failure of the Zion Station
Site, to be in compliance with any Environmental Laws; and (iv) any other act or
omission, or condition existing with respect to the Put Option Assets or the
Zion Station Site that gives rise to any liability under Environmental Laws.

 

(26)         “Environmental Permit” means any federal, state or local permits,
licenses, approvals, consents, registrations or authorizations required by any
Governmental Authority under or in connection with any Environmental Law
including any and all orders, consent orders or binding agreements issued or
entered into by a Governmental Authority under any applicable Environmental Law.

 

(27)         “Event of Default” has the meaning set forth in the Pledge
Agreement.

 

(28)         “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

 

(29)         “Excluded Liabilities” has the meaning set forth in Section 2.3.

 

(30)         “Exelon” has the meaning set forth in the preamble.

 

(31)         “Exelon Indemnitee” has the meaning set forth in Section 7.1.1.

 

(32)         “Good Utility Practices” means any of the practices, methods and
activities generally accepted in the electric utility industry in the United
States of America as good practices applicable to non-operating nuclear
generating facilities of similar design, size and capacity and consistent with
past practice at the Facilities or any of the practices, methods or activities
which, in the exercise of reasonable judgment by a prudent Person in light of
the facts known at the time the decision was made (other than the fact that such
Person is in the process of selling the facility), could have been expected to
accomplish the desired result at a reasonable cost consistent with good business
practices, reliability, safety, expedition and applicable Laws including Nuclear
Laws and Laws relating to the protection of public health and safety.  Good
Utility Practices are not intended to be limited to the optimal practices,
methods or acts to the exclusion of all others, but rather to be practices,
methods or acts generally accepted in the electric utility industry in the
United States of America.

 

(33)         “Governmental Authority” means any federal, state, local,
provincial, foreign, international or other governmental, regulatory or
administrative agency, taxing authority, commission, department, board, or other
governmental subdivision, court, tribunal, arbitrating body or other
governmental authority.

 

(34)         “Greater Than Class C Waste” means all radioactive waste located at
the Zion Station Site that contains radionuclide concentrations exceeding the
values in Table 1 or

 

6

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Table 2 of 10 CFR 61.55, and therefore is currently not generally acceptable for
disposal at existing (near surface) low level radioactive waste disposal
facilities and any such radioactive waste created during the course of
Decommissioning.

 

(36) “Hazardous Substances” means: (i) any petroleum, asbestos,
asbestos-containing material, and urea formaldehyde foam insulation and
transformers or other equipment that contains polychlorinated biphenyls;
(ii) any chemicals, materials or substances defined as or included in the
definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,”
“hazardous constituents,” “restricted hazardous materials,” “extremely hazardous
substances,” “toxic substances,” “contaminants,” “pollutants,” “toxic
pollutants,” “hazardous air pollutants” or words of similar meaning and
regulatory effect under any applicable Environmental Law; and (iii) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any applicable Environmental Law; excluding, however, any Nuclear
Material.

 

(37)  “Income Tax” means any Tax (i) based upon, measured by or calculated with
respect to net income, profits or receipts (including, without limitation,
capital gains Taxes and minimum Taxes); or (ii) based upon, measured by or
calculated with respect to multiple bases (including, without limitation,
corporate franchise Taxes) if one or more of the bases on which such Tax may be
based, measured by or calculated with respect to, is described in clause (i), in
each case together with any interest, penalties or additions to such Tax.

 

(38)   “Indemnifiable Loss” has the meaning set forth in Sections 7.1.1 and
7.2.2.

 

(39)  “Indemnitee” means either an Exelon Indemnitee or a Zion Solutions
Indemnitee.

 

(40)  “Independent Accounting Firm” has the meaning set forth in Section 5.6.4.

 

(41)  “Irrevocable Letter of Credit” means the irrevocable letter of credit in
the form of Exhibit A to the Credit Support Agreement.

 

(42)  “IRS” means the United States Internal Revenue Service or any successor
agency thereto.

 

(43)  “ISFSI Island” has the meaning set forth in the Lease Agreement.

 

(44)  “Knowledge” means with respect to Zion Solutions, the actual knowledge
(based on a reasonable inquiry) of appropriate employees of Zion Solutions or
the corporate officers who are charged with responsibility for the particular
function relating to the specific matter of the inquiry.

 

(45)  “Law or Laws” means all laws, rules, regulations, codes, statutes,
ordinances, decrees, treaties, and/or administrative orders of any Governmental
Authority including administrative and judicial interpretations thereof and
common law.

 

(46)  “Lease Agreement” has the meaning set forth in the preamble.

 

7

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(47)  “Liability” or “Liabilities” means any liability or obligation (whether
known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due) other than any liability for Taxes.

 

(48)  “Loss” or “Losses” means any and all damages, fines, fees, penalties,
deficiencies, losses and expenses (including all Remediation costs, fees of
attorneys, accountants and other experts, or other expenses of litigation or
proceedings or of any claim, default or assessment).

 

(49)  “Low Level Waste” means radioactive material that: (i) is neither Spent
Nuclear Fuel as defined herein, nor Byproduct Material; and (ii) the NRC,
consistent with existing law and clause (i) above classifies as low-level
radioactive waste.

 

(50)  “Material Adverse Effect” means: (i) any change in, or effect on, the
Option Assets that is or reasonably could be materially adverse to the value of
the Put Option Assets, taken as a whole; or (ii) a material adverse effect on
the ability of Zion Solutions to perform its obligations hereunder. 
Notwithstanding the foregoing, a “Material Adverse Effect” shall not include:
(i) any change in any Law generally applicable to similarly situated Persons;
(ii) any change in the application or enforcement of any Law, by any
Governmental Authority, with respect to the Facilities or to similarly situated
Persons, unless such change in application or enforcement prohibits consummation
of the transactions contemplated by this Agreement; or (iii) any changes
resulting from or associated with acts of war or terrorism or changes imposed by
a Governmental Authority associated with additional security to address concerns
of terrorism, arising out of the events of September 11, 2001, or otherwise;
provided, however, that such case does not affect the Facilities or the Parties
in any manner or degree significantly different than the industry as a whole;
and provided, further, that any loss, claim, occurrence, change or effect that
is cured  prior to the Put Option Closing Date shall not be considered a
Material Adverse Effect.

 

(51)  “NEIL” means Nuclear Electric Insurance Limited, or any successor thereto.

 

(52)  “New VAR Facility” has the meaning set forth in the Lease Agreement.

 

(53)  “Non-material Contracts” means those contracts, agreements, personal
property leases or other commitments incidental to the operation or maintenance
of the Put Option Assets that have been entered into by Zion Solutions in the
ordinary course of business after the Closing and prior to the Put Option
Closing which either: (i) are terminable, without penalty or any other
termination related Liability, upon notice of ninety (90) days or less by
Exelon; or (ii) require the payment or delivery of goods or services with a
value of less than One Hundred Thousand Dollars ($100,000) per annum in the case
of any individual contract or commitment.

 

(54)  “NRC” has the meaning set forth in the Asset Sale Agreement.

 

(55)  “NRC Licenses” means NRC Part 50 Operating Licenses for Zion Units 1 and
2, Nos. DPR-39 and DPR-48, including embedded licenses for possession of
Byproduct Material and Special Nuclear Material.

 

8

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(56)  “Nuclear Insurance Policies” means all nuclear insurance policies carried
by or for the benefit of Zion Solutions with respect to the ownership, operation
or maintenance of the Facilities, including all nuclear liability, property
damage and business interruption policies in respect thereof.  Without limiting
the generality of the foregoing, the term “Nuclear Insurance Policies” includes
all policies issued or administered by ANI or NEIL.

 

(57)  “Nuclear Laws” means all Laws, other than Environmental Laws, relating to
the regulation of nuclear power plants, Source Material, Byproduct Material and
Special Nuclear Materials; the regulation of Low Level Waste and Spent Nuclear
Fuel; the transportation and storage of Nuclear Materials; the regulation of
Safeguards Information; the regulation of Nuclear Fuel; the enrichment of
uranium; the disposal and storage of Spent Nuclear Fuel; contracts for and
payments into the Nuclear Waste Fund; and as applicable, the antitrust laws and
the Federal Trade Commission Act to specified activities or proposed activities
of certain licensees of commercial nuclear reactors.  “Nuclear Laws” include the
Atomic Energy Act of 1954, as amended (42 U.S.C. Section 2011 et seq.); the
Price-Anderson Act (Section 170 of the Atomic Energy Act of 1954, as amended);
the Energy Reorganization Act of 1974 (42 U.S.C. Section 5801 et seq.);
Convention on the Physical Protection of Nuclear Material Implementation Act of
1982 (Public Law 97 -351; 96 Stat. 1663); the Foreign Assistance Act of 1961 (22
U.S.C. Section 2429 et seq.); the Nuclear Non-Proliferation Act of 1978 (22
U.S.C. Section 3201); the Low-Level Radioactive Waste Policy Act (42 U.S.C.
Section 2021b et seq.); the Nuclear Waste Policy Act (42 U.S.C. Section 10101 et
seq. as amended); the Low-Level Radioactive Waste Policy Amendments Act of 1985
(42 U.S.C. Section 2021d, 471); the Energy Policy Act of 1992 (4 U.S.C.
Section 13201 et seq.); the provisions of 10 CFR Section 73.21, and any state or
local Laws analogous to the foregoing.

 

(58)  “Nuclear Material” means Source Material, Byproduct Material, Special
Nuclear Material, Low Level Waste, and Spent Nuclear Fuel.

 

(59)  “Party” (and the corresponding term “Parties”) has the meaning set forth
in the preamble.

 

(60)  “Permitted Encumbrances” means: (i) the easements to Commonwealth Edison
Company, an Affiliate of Exelon, for the Switchyard, and if applicable, the New
VAR Facility; (ii) the Easements; (iii) statutory liens for Taxes (other than
income Taxes) or other governmental charges or assessments not yet due or
delinquent or the validity of which are being contested in good faith by
appropriate proceedings; (iv) mechanics’, materialmen’s, carriers’, workers’,
repairers’ and other similar liens arising or incurred in the ordinary course of
business relating to obligations as to which there is no default on the part of
Zion Solutions or the validity of which are being contested in good faith, and
which do not, individually or in the aggregate, exceed One Hundred Thousand
Dollars ($100,000); (v) zoning, entitlement, conservation restriction and other
land use and environmental regulations imposed by Governmental Authorities; and
(vi) such other liens, imperfections in or failures of title, easements, leases,
licenses, restrictions, activity and use limitations, conservation easements,
encumbrances and encroachments, as do not, individually or in the aggregate,
detract from the value of the Put Option Assets in an amount in excess of One
Hundred Thousand Dollars ($100,000).

 

9

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(61)   “Person” means any individual, partnership, limited liability company,
joint venture, corporation, trust, unincorporated organization, association, or
Governmental Authority.

 

(62)  “Pledge Agreement” means the Pledge Agreement dated as of
                , 200  , between Zion Solutions’ Parent and Exelon.

 

(63)  “Price-Anderson Act” means Section 170 of the Atomic Energy Act and
related provisions of Section 11 of the Atomic Energy Act.

 

(64)   “PSDAR for the Zion Station” means the Post-Shutdown Decommissioning
Activities Report (PSDAR) as amended as of the Closing Date.

 

(65)  “Purchase Price” has the meaning set forth in Section 3.2.

 

(66)  “Put Option” has the meaning set forth in Section 2.1.

 

(67)  “Put Option Agreement” means this Agreement.

 

(68)  “Put Option Assets” has the meaning set forth in Section 2.2.

 

(69)  “Put Option Assignment and Assumption Agreement” means the Assignment and
Assumption Agreement in the form of Attachment D-1 hereto.

 

(70)  “Put Option Bill of Sale” means the Bill of Sale, in the form of
Attachment D-2 hereto.

 

(71)  “Put Option Closing” has the meaning set forth in Section 3.1.

 

(72)  “Put Option Closing Date” has the meaning set forth in Section 3.1.

 

(73)  “Put Option Exercise Notice” has the meaning set forth in Section 2.1.

 

(74)  “Put Option Liabilities” has the meaning set forth in Section 2.3.

 

(75)  “Real Property” has the meaning set forth in the Asset Sale Agreement.

 

(76)  “Release” means any actual or threatened spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing of a Hazardous Substance into the Environment or within any
building, structure, facility or fixture; provided, however, that “Release”
shall not include any release that is permissible under applicable Environmental
Permits.

 

(77)  “Released for Unrestricted Use” means the written approval granted by NRC
pursuant to 10 CFR 50.83 to release all portions of the Zion Station Site (other
than the ISFSI Island) by demonstrating compliance with the radiological
criteria for unrestricted use specified in 10 CFR 20.1402.

 

(78)  “Remediation” means action of any kind required by any applicable Law or
order of a Governmental Authority to address a Release, the threat of a Release
or the presence

 

10

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of Hazardous Substances at the Site or an off-Site location including, without
limitation, any or all of the following activities to the extent they relate to
or arise from the presence of a Hazardous Substance at the Site or an off-Site
location: (i) monitoring, investigation, assessment, treatment, cleanup,
containment, removal, mitigation, response or restoration work; (ii) obtaining
any permits, consents, approvals or authorizations of any Governmental Authority
necessary to conduct any such activity; (iii) preparing and implementing any
plans or studies for any such activity; (iv) obtaining a written notice from a
Governmental Authority with jurisdiction over the Site or an off-Site location
under Environmental Laws that no material additional work is required by such
Governmental Authority; (v) the use, implementation, application, installation,
operation or maintenance of remedial action on the Site or an off-Site location,
remedial technologies applied to the surface or subsurface soils, excavation and
off-Site treatment or disposal of soils, systems for long term treatment of
surface water or ground water, engineering controls or institutional controls;
and (vi) any other activities required under Environmental Laws to address the
presence or Release of Hazardous Substances at the Site or an off-Site location.

 

(79)  “Representatives” of a Party means the Party and its Affiliates and their
directors, officers, employees, agents, partners, advisors (including, without
limitation, accountants, counsel, environmental consultants, financial advisors
and other authorized representatives) and parents and other controlling Persons.

 

(80)  “Required Regulatory Approvals” are the required regulatory approvals
listed in Schedule 1.1 (80).

 

(81)  “Site” means the parcels of land included in the Real Property.  Any
reference to the Site shall include, by definition, the surface and subsurface
elements, including the soils and groundwater present at the Site and any
references to items “at the Site” shall include all items “at, in, on, upon,
over, across, under, and within” the Site.

 

(82)  “Source Material” means:  (i) uranium or thorium or any combination
thereof, in any physical or chemical form, or (ii) ores which contain by weight
one-twentieth of one percent (0.05%) or more of (a) uranium, (b) thorium, or
(c) any combination thereof.  Source Material does not include Special Nuclear
Material.

 

(83)  “Special Nuclear Material” means plutonium, uranium-233, uranium enriched
in the isotope-233 or in the isotope-235, and any other material that the NRC
determines to be “Special Nuclear Material,” but does not include Source
Material.  Special Nuclear Material also refers to any material artificially
enriched by any of the above-listed materials or isotopes, but does not include
Source Material.

 

(84)  “Spent Nuclear Fuel” means all fuel located at the Zion Station Site that
has been permanently withdrawn from a nuclear reactor following irradiation, and
has not been chemically separated into its constituent elements by reprocessing.

 

(85)  “Spent Nuclear Fuel Fees” means those fees assessed on electricity
generated at Zion Station Site and sold pursuant to the Standard Spent Fuel
Disposal Contract, as provided in Section 302 of the Nuclear Waste Policy Act
and 10 C.F.R. Part 961.

 

11

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(86)  “Substantial Completion” means the date upon which:  (i) all material Zion
Solutions physical work at the Zion Station Site is completed as required by the
Lease Agreement, and (ii) either the Amended NRC Licenses are approved by the
NRC, or if the Parties have agreed upon and arranged for the transfer of Spent
Nuclear Fuel and Greater Than Class C Waste away from the Zion Station Site, the
NRC Licenses are terminated.

 

(87)  “Switchyard” has the meaning set forth in the Lease Agreement.

 

(88)  “Target Completion Date” has the meaning set forth in the Lease Agreement.

 

(89)  “Tax” or “Taxes” means, all taxes, charges, fees, levies, penalties or
other assessments imposed by any federal, state, local, provincial or foreign
taxing authority, including income, gross receipts, excise, real or personal
property, sales, transfer, customs, duties, franchise, payroll, withholding,
social security, receipts, license, stamp, occupation, employment, or other
taxes, including any interest, penalties or additions attributable thereto, and
any payments to any state, local, provincial or foreign taxing authorities in
lieu of any such taxes, charges, fees, levies or assessments.

 

(90)  “Tax Return” means any return, report, information return, declaration,
claim for refund or other document (including any schedule or related or
supporting information) required to be supplied to any Governmental Authority
with respect to Taxes including amendments thereto, including any information
return filed by a tax exempt organization and any return filed by a nuclear
decommissioning trust.

 

(91)  “Third Party Claim” has the meaning set forth in Section 7.2.1.

 

(92)  “Transferable Permits” means those Permits and Environmental Permits that
are transferable to Exelon without application to, a filing with, notice to,
consent or approval of any Governmental Authority.

 

(93)  “Transfer Taxes” means any real property transfer, sales, use, value
added, stamp, documentary, recording, registration, conveyance, stock transfer,
intangible property transfer, personal property transfer, gross receipts,
registration, duty, securities transactions or similar fees or Taxes or
governmental charges (together with any interest or penalty, addition to Tax or
additional amount imposed) as levied by any Governmental Authority in connection
with the transactions contemplated by this Agreement, including, without
limitation, any payments made in lieu of any such Taxes or governmental charges
which become payable in connection with the transactions contemplated by this
Agreement.

 

(94)  “Treasury Regulations” means Treasury Regulations promulgated under the
Code.

 

(95)  “WAC” or “Waste Acceptance Criteria” means all applicable technical
requirements that ensure that all environmental, safety, and operational
standards are met before Low Level Waste is accepted for disposal.

 

(96)  “Zion Solutions” has the meaning set forth in the preamble.

 

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(97)  “Zion Solutions’ Agreements” mean those contracts, agreements, licenses
and leases relating to the ownership, operation and maintenance of the Put
Option Assets, as more particularly described on Schedule 1.1(97), as such
schedule is supplemented and amended in accordance with the provisions of this
Agreement.

 

(98)  “Zion Solutions Indemnitee” has the meaning set forth in Section 7.1.1.

 

(99)  “Zion Solutions’ Parent” has the meaning set forth in the preamble.

 

(100)  “Zion Station” means Zion Nuclear Power Station, Units 1 and 2, located
in Zion, Illinois and associated assets, in accordance with NRC Operating
Licenses DPR-39 (Zion 1) and DPR-48 (Zion 2).

 

(101)  “Zion Station Site” means the parcels of land included in the Real
Property. Any reference to the Zion Station Site shall include, by definition,
the surface and subsurface elements, including the soils and groundwater present
at the Zion Station Site and any references to items “at the Zion Station Site”
shall include all items “at, in, on, upon, over, across, under, and within” the
Zion Station Site

 

1.2.                             CERTAIN INTERPRETIVE MATTERS.

 

1.2.1.                   UNLESS OTHERWISE REQUIRED BY THE CONTEXT IN WHICH ANY
TERM APPEARS:

 

(1)                                 Capitalized terms used in this Agreement
shall have the meanings specified in this Article.

 

(2)                                 The singular shall include the plural, the
plural shall include the singular, and the masculine shall include the feminine
and neuter.

 

(3)                                 Unless otherwise specified herein,
references to “Articles”, “Sections”, “Schedules” or “Attachments” shall be to
articles, sections, schedules or attachments of or to this Agreement, and
references to “paragraphs” or “clauses” shall be to separate paragraphs or
clauses of the section or subsection in which the reference occurs.

 

(4)                                 The words “herein”, “hereof” and “hereunder”
shall refer to this Agreement as a whole and not to any particular section or
subsection of this Agreement; and the words “include”, “includes” or “including”
shall mean “including, but not limited to.”

 

(5)                                 The term “day” shall mean a calendar day,
commencing at 12:01 a.m. (Central Time).  The term “week” shall mean any seven
consecutive day period commencing on a Sunday, and the term “month” shall mean a
calendar month; provided, however, that when a period measured in months
commences on a date other than the first day of a month, the period shall run
from the date on which it starts to the corresponding date in the next month
and, as appropriate, to succeeding months thereafter.  Whenever an event is to
be performed or a payment is to be made by a particular date and the date in
question falls on a day which is not a Business Day, the event shall be
performed, or the payment shall be made, on the next succeeding Business Day;
provided, however, that all calculations shall be made regardless of

 

13

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whether any given day is a Business Day and whether or not any given period ends
on a Business Day.

 

(6)                                 All references to a particular entity shall
include such entity’s permitted successors and permitted assigns unless
otherwise specifically provided herein.

 

(7)                                 All references herein to any Law or to any
contract or other agreement shall be to such Law, contract or other agreement as
amended, supplemented or modified from time to time unless otherwise
specifically provided herein.

 

1.2.2.                   THE TITLES OF THE ARTICLES, SECTIONS AND SCHEDULES
HEREIN HAVE BEEN INSERTED AS A MATTER OF CONVENIENCE OF REFERENCE ONLY, AND
SHALL NOT CONTROL OR AFFECT THE MEANING OR CONSTRUCTION OF ANY OF THE TERMS OR
PROVISIONS HEREOF.

 

1.2.3.                   THIS AGREEMENT WAS NEGOTIATED AND PREPARED BY ALL
PARTIES WITH ADVICE OF COUNSEL TO THE EXTENT DEEMED NECESSARY BY EACH PARTY; THE
PARTIES HAVE AGREED TO THE WORDING OF THIS AGREEMENT; AND NONE OF THE PROVISIONS
HEREOF SHALL BE CONSTRUED AGAINST ONE PARTY ON THE GROUND THAT SUCH PARTY IS THE
AUTHOR OF THIS AGREEMENT OR ANY PART HEREOF.

 

1.2.4.                   THE ATTACHMENTS AND SCHEDULES HERETO ARE INCORPORATED
IN AND ARE INTENDED TO BE A PART OF THIS AGREEMENT; PROVIDED, HOWEVER, THAT IN
THE EVENT OF A CONFLICT BETWEEN THE TERMS OF ANY ATTACHMENT AND THE TERMS OF THE
REMAINDER OF THIS AGREEMENT, THE TERMS OF THE REMAINDER OF THIS AGREEMENT SHALL
TAKE PRECEDENCE.

 

2.                                      OPTION.

 

2.1.                            GRANT OF OPTION; EXERCISE OF OPTION

 

Exelon unconditionally and irrevocably grants to Zion Solutions the right and
option to sell to Exelon, and require Exelon to purchase, the Put Option Assets
and to assign to Exelon, and require Exelon to assume, the Put Option
Liabilities, all on the terms and conditions set forth in this Agreement (the
“Put Option”), which shall be exercisable by delivering a written notice to
Exelon substantially in the form of Attachment D-3 hereto (a “Put Option
Exercise Notice”) at any time within thirty (30) days following satisfaction of
End State Conditions.

 

2.2.                            PUT OPTION ASSETS

 

If the Put Option is duly exercised in accordance with Section 2.1, at the Put
Option Closing Exelon shall, on the terms and subject to the conditions set
forth in this Agreement, purchase for One Dollar ($1) all of the Zion-related
assets in existence as of the date on which the End State Conditions were met
(the “Put Option Assets”), including:

 

2.2.1.                   ALL ASSIGNABLE RIGHT, TITLE AND INTEREST OF ZION
SOLUTIONS IN THE AMENDED NRC LICENSE;

 

2.2.2.                   ALL RIGHTS OF ZION SOLUTIONS UNDER THE NON-MATERIAL
CONTRACTS AND THE ZION SOLUTIONS’ AGREEMENTS;

 

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2.2.3.                   ALL TRANSFERABLE PERMITS;

 

2.2.4.                   ALL BOOKS, OPERATING RECORDS, LICENSING RECORDS,
QUALITY ASSURANCE RECORDS, PURCHASING RECORDS, AND EQUIPMENT REPAIR, MAINTENANCE
OR SERVICE RECORDS RELATING TO THE DESIGN, CONSTRUCTION, LICENSING, OPERATION OR
DECOMMISSIONING OF THE FACILITIES, OPERATING, SAFETY AND MAINTENANCE MANUALS,
INSPECTION REPORTS, ENVIRONMENTAL ASSESSMENTS, ENGINEERING DESIGN PLANS,
DOCUMENTS, BLUEPRINTS AND AS BUILT PLANS, SPECIFICATIONS, PROCEDURES AND OTHER
SIMILAR ITEMS OF ZION SOLUTIONS, WHEREVER LOCATED, RELATING TO THE FACILITIES
AND THE OTHER PUT OPTION ASSETS, WHETHER EXISTING IN HARD COPY OR MAGNETIC OR
ELECTRONIC FORM (SUBJECT TO THE RIGHT OF EXELON TO RETAIN COPIES OF SAME FOR ITS
USE) (COLLECTIVELY, THE “BUSINESS BOOKS AND RECORDS”);

 

2.2.5.                   THE INTEREST OF ZION SOLUTIONS, IF ANY, IN THE NAME
“ZION” AS USED AS A DESIGNATION ATTACHED TO OR ASSOCIATED WITH THE FACILITIES,
OR ANY RELATED OR SIMILAR TRADE NAMES, TRADEMARKS, SERVICE MARKS, CORPORATE
NAMES OR LOGOS, OR ANY PART, DERIVATIVE OR COMBINATION THEREOF;

 

2.2.6.                   ALL NUCLEAR INSURANCE POLICIES WITH ANI RELATING TO THE
FACILITIES, TO THE EXTENT TRANSFERABLE;

 

2.2.7.                   SUBJECT TO EXELON’S WRITTEN COMMITMENT TO SATISFY ITS
INDEMNIFICATION OBLIGATIONS UNDER SECTION 7.1, THE RIGHTS OF ZION SOLUTIONS IN
AND TO ANY CAUSES OF ACTION, CLAIMS (INCLUDING, WITHOUT LIMITATION, RIGHTS UNDER
INSURANCE POLICIES TO PROCEEDS, REFUNDS OR DISTRIBUTIONS THEREUNDER PAID AFTER
THE PUT OPTION CLOSING DATE WITH RESPECT TO PERIODS AFTER THE PUT OPTION CLOSING
DATE) AND DEFENSES AGAINST THIRD PARTIES (INCLUDING INDEMNIFICATION AND
CONTRIBUTION) RELATING TO ANY PUT OPTION LIABILITIES;

 

2.2.8.                   THE REMAINING ASSETS, IF ANY, COMPRISING THE BUYER QDF
AND, THE BUYER NDF, INCLUDING ALL PROFITS, DIVIDENDS, INCOME, INTEREST AND
EARNINGS ACCRUED THEREON, TOGETHER WITH ALL RELATED TAX ACCOUNTING AND OTHER
RECORDS FOR SUCH ASSETS, INCLUDING ALL DECOMMISSIONING STUDIES, ANALYSES, COST
ESTIMATES AND ANY INFORMATION RELATING TO THE TAX BASIS OF THE TRANSFERRED
ASSETS;

 

2.2.9.                   THE ISFSI ISLAND, FREE AND CLEAR OF ALL ENCUMBRANCES
OTHER THAN ENCUMBRANCES ARISING THROUGH EXELON;

 

2.2.10.             POSSESSION OF THE SPENT NUCLEAR FUEL AND SPENT NUCLEAR FUEL
CASKS AT THE ZION STATION SITE;

 

2.2.11.             POSSESSION OF THE GREATER THAN CLASS C WASTE AT THE ZION
STATION SITE; AND

 

2.2.12.             ALL OTHER ASSETS AND PROPERTIES OF EVERY KIND AND
DESCRIPTION AND WHEREVER LOCATED, OWNED BY ZION SOLUTIONS AND PRIMARILY USED IN
OR RELATED TO THE PUT OPTION ASSETS.

 

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2.3.                            PUT OPTION LIABILITIES

 

If the Put Option is duly exercised in accordance with Section 2.1, at the Put
Option Closing, Exelon shall assume all liabilities arising under or relating to
the Put Option Assets, other than Excluded Liabilities (the “Put Option
Liabilities”). Notwithstanding anything to the contrary in this Agreement,
nothing in this Agreement shall be construed to impose on Exelon, and Exelon
shall not assume or be obligated to pay, perform or otherwise discharge, the
following Liabilities of Zion Solutions or Zion Solutions’ Parent (the “Excluded
Liabilities”), except to the extent that any such Excluded Liabilities may be
legally satisfied from the remaining assets, if any, contained in the Buyer QDF
and the Buyer NDF transferred to Exelon at the Put Option Closing:

 

2.3.1  All Liabilities that are directly attributable to an act or omission by
Zion Solutions, Zion Solutions’ Parent or their contractors in the performance
of work required to achieve the End State Conditions;

 

2.3.2  All Liabilities for the Decommissioning and achievement of the End-State
Conditions of Zion Station, including any obligations under applicable Law,
other than Decommissioning of the ISFSI Island;

 

2.3.3  All Liabilities arising after the Closing Date and on or before the Put
Option Closing Date with respect to the Buyer QDF and the Buyer NDF, including
Tax liabilities;

 

2.3.4  All Liabilities arising from any actual or claimed refund obligations of
ComEd or Exelon to ComEd ratepayers arising with respect to funds withdrawn from
the Buyer QDF or the Buyer NDF for costs and expenses incurred by or paid to
Zion Solutions or Zion Solutions’ Parent or their Affiliates or contractors
(including refund obligations arising if such costs and expenses are determined
to not have been prudently incurred or otherwise to be inappropriate);

 

2.3.5  All Liabilities arising on or after the Closing Date and before the Put
Option Closing Date with respect to the ownership, possession, use or
maintenance of the Zion Assets or the possession, use or maintenance of the Zion
Station Site, including all Decommissioning activities relating to the Zion
Assets or the Zion Station Site, and all Liabilities arising on or after the
Closing Date and on or before the Put Option Closing Date under the Seller’s
Agreements, the Non-material Contracts, the Real Property Agreements, and the
Transferable Permits in accordance with the terms thereof, including all
Liabilities arising on or after the Closing Date and on or before the Put Option
Closing Date relating to (i) the contracts, licenses, agreements and personal
property leases entered into with respect to the Zion Assets or under Seller’s
Agreements and the Non-material Contracts; and (ii) the contracts, licenses,
agreements and personal property leases entered into with respect to the Zion
Assets after the date hereof consistent with the terms of this Agreement, to the
extent such Liabilities, but for a breach or default by Zion Solutions or a
related waiver or extension, would have been paid, performed or otherwise
discharged on or prior to the Put Option Closing Date or to the extent the same
arise out of any such breach or default or out of any event which after the
giving of notice or the passage of time would constitute a default by Zion
Solutions;

 

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2.3.6  All Liabilities for any Taxes that may be imposed by any Governmental
Authority on the ownership, sale, possession, lease, or use of the Zion Assets
beginning on the Closing Date and ending on the Put Option Closing Date or that
relate to or arise from the Zion Assets with respect to taxable periods (or
portions thereof) beginning on or after the Closing Date and ending on or before
the Put Option Closing Date, except as otherwise provided in the Lease
Agreement;

 

2.3.7  Any Liabilities arising under or attributed to performance, or failure of
performance, by Zion Solutions under any of the Seller’s Agreements, Zion
Solutions Agreements, Real Property Agreements, Transferable Permits or
Non-material Contracts on or after the Closing Date and on or before the Put
Option Closing Date;

 

2.3.8  Any Liabilities for any monetary fines or penalties imposed by a
Governmental Authority with respect to the Zion Assets to the extent attributed
to the period on or after the Closing Date and on or before the Put Option
Closing Date;

 

2.3.9  Any Liabilities arising on or after the Closing Date and on or before the
Put Option Closing Date relating to Zion Solutions’ operations on, or usage of,
the Zion Station Site, including Liabilities arising as a result of or in
connection with loss of life, injury to persons or property or damage to natural
resources;

 

2.3.10  Any Liabilities relating to any employee benefit plan as defined in
Section 3(3) of ERISA, or any other plan, program, arrangement or policy
established or maintained in whole or in part by Zion Solutions or by any trade
or business (whether or not incorporated) which is or ever has been under common
control, or which is or ever has been treated as a single employer, with Zion
Solutions under Section 414(b), (c), (m) or (o) of the Code (“ERISA Affiliate”)
or to which Zion Solutions or any ERISA Affiliate contributes or contributed,
including any multiemployer plan contributed to by Zion Solutions, or any ERISA
Affiliate or to which Zion Solutions or any ERISA Affiliate is or was obligated
to contribute (the “Plans”), including any such Liability of Zion Solutions
(i) for the termination or discontinuance of, or Zion Solutions’ or an ERISA
Affiliate’s withdrawal from, any such Plan, (ii) relating to benefits payable
under any Plans, (iii) relating to the PBGC under Title IV of ERISA,
(iv) relating to a multi-employer plan, (v) with respect to noncompliance with
the notice requirements of COBRA, (vi) with respect to any noncompliance with
ERISA or any other applicable Laws, and (vii) with respect to any suit,
proceeding or claim which is brought against Zion Solutions, any Plan or any
fiduciary or former fiduciary of, any of the Plans;

 

2.3.11  Any Liabilities relating to the failure to hire, the employment or
services or termination of employment or services of any individual, including
wages, compensation, benefits, affirmative action, personal injury,
discrimination, harassment, retaliation, wrongful discharge, unfair labor
practices, or constructive termination of any individual, or any similar or
related claim or cause of action attributable to any actions or inactions on or
after the Closing Date and on or before the Put Option Closing Date with respect
to the Zion Assets, employees of Zion Solutions, independent contractors,
applicants, and any other individuals who are determined by a court or by a
Governmental Authority to have been applicants or employees of Zion Solutions or
any

 

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Affiliate of Zion Solutions, or that are filed with or pending before any court,
administrative agency or arbitrator on or after the Closing Date and on or
before the Put Option Closing Date;

 

2.3.12  Any Liabilities of Zion Solutions to the extent arising from the
execution, delivery or performance of this Agreement and the transactions
contemplated hereby;

 

2.3.13  Any Taxes incurred by the Buyer NDF or the Buyer QDF for taxable
periods, or portions thereof, ending on or before the Put Option Closing Date;

 

2.3.14  All Liabilities arising as a result of or in connection with the
disposal, storage or transportation of Nuclear Materials off-site on or after
the Closing Date and on or before the Put Option Closing Date in connection with
the ownership or possession of the Facilities;

 

2.3.15  Any Liability for a Third Party Claim against or relating to Zion
Solutions, the Zion Assets or the Zion Station Site for personal injury, death
or property damage suffered by such third party arising from or relating to the
use, ownership or lease of the Zion Assets or the Zion Station Site on or after
the Closing Date and on or before the Put Option Closing Date;

 

2.3.16   All Liabilities arising under or relating to Nuclear Laws arising out
of the ownership, lease, occupancy, possession, use, or Decommissioning of the
Zion Assets or the lease, occupancy, possession, use, or Decommissioning of the
Zion Station Site on or after the Closing Date and on or before the Put Option
Closing Date, including any and all Liabilities to third parties (including
employees) for personal injury, property damage or tort, or similar causes of
action arising out of the ownership, lease, occupancy, possession, use, or
Decommissioning of the Zion Assets or the lease, occupancy, possession, use, or
Decommissioning of the Zion Station Site on or after the Closing Date and on or
before the Put Option Closing Date, any Liabilities arising out of or resulting
from an “extraordinary nuclear occurrence,” a “nuclear incident” or a
“precautionary evacuation” (as such terms are defined in the Atomic Energy Act)
at the Zion Station Site, or in the course of the transportation of radioactive
materials to or from the Zion Station Site on or after the Closing Date and on
or before the Put Option Closing Date, and any Liability for any deferred
premiums assessed in connection with such an extraordinary nuclear occurrence, a
nuclear incident or precautionary evacuation under any applicable NRC or
industry retrospective rating plan or insurance policy, including any mutual
insurance pools established in compliance with the requirements imposed under
Section 170 of the Atomic Energy Act, 10 C.F.R. Part 140;

 

2.3.17  All Liabilities related to Spent Nuclear Fuel and the ISFSI Island after
the Closing Date and prior to the earlier of (a) the transfer off-site of the
Spent Nuclear Fuel, and (b) the Put Option Closing Date;

 

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2.3.18  Any Liabilities resulting from knowing and intentional illegal acts or
willful misconduct of Zion Solutions or Zion Solutions’ Parent or their
respective employees, agents or contractors; and

 

2.3.19  All liabilities for insurance premiums, including any retrospective
premium adjustments, accrued, assessed or attributable to the period on or after
the Closing Date and on or before the Put Option Closing Date for insurance
maintained by Zion Solutions, or maintained by Exelon on behalf of Zion
Solutions under the terms of Section 10.3 of the Lease Agreement.

 

2.4.                            END STATE CONDITIONS FOR EXERCISE OF PUT OPTION

 

2.4.1.                   THE PUT OPTION MAY ONLY BE EXERCISED UPON THE
ACHIEVEMENT OF ALL OF THE FOLLOWING CONDITIONS (THE “END STATE CONDITIONS”):

 

2.4.1.1             ZION SOLUTIONS SHALL HAVE BEEN REIMBURSED FROM THE BUYER
QDF, BUYER NDF AND BUYER BACKUP NDT (TO THE EXTENT THAT FUNDS IN THE BUYER QDF,
BUYER NDF AND BUYER BACKUP NDT ARE AVAILABLE) FOR ALL OF ITS COSTS AND EXPENSES
FOR DECOMMISSIONING THE ZION STATION SITE;

 

2.4.1.2             ZION SOLUTIONS SHALL HAVE COMPLIED IN ALL MATERIAL RESPECTS
WITH ITS OBLIGATIONS UNDER THE LEASE AGREEMENT;

 

2.4.1.3             THE NRC SHALL HAVE APPROVED THE AMENDED NRC LICENSES, WHICH
SHALL ONLY COVER THE ISFSI ISLAND, OR, IF THE SPENT NUCLEAR FUEL AND GREATER
THAN CLASS C WASTE HAVE BEEN TRANSPORTED OFF THE ZION STATION SITE, THE NRC
SHALL HAVE APPROVED THE TERMINATION OF THE NRC LICENSES; AND

 

2.4.1.4             THE NRC SHALL HAVE RELEASED FOR UNRESTRICTED USE THE ZION
STATION SITE (OTHER THAN THE ISFSI ISLAND IF THE SPENT NUCLEAR FUEL AND GREATER
THAN CLASS C WASTE HAS NOT BEEN TRANSPORTED OFF THE ZION STATION SITE).

 

3.                                      THE PUT OPTION CLOSING

 

3.1.                            PUT OPTION CLOSING.

 

Upon the terms and subject to the satisfaction of the conditions contained in
Article 2 and Article 6 of this Agreement, the sale, assignment, conveyance,
transfer and delivery of the Put Option Assets to Exelon, the payment of the
Purchase Price by Exelon, and the consummation of the other respective
obligations of the Parties contemplated by this Agreement shall take place at a
Put Option closing (the “Put Option Closing”), to be held at a mutually
agreeable location at 10:00 a.m. local time, or another mutually acceptable
time, on the date that is five (5) Business Days following the date on which
Exelon receives the Put Option Exercise Notice or, if later, five (5) Business
Days following the date on which  the last of the conditions precedent to Put
Option Closing set forth in Article 6 have been either satisfied or waived by
the

 

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Party for whose benefit such conditions precedent exist (except with respect to
those conditions which by their terms are to be satisfied at Put Option
Closing).  The date of Put Option Closing is herein called the “Put Option
Closing Date.”  The Put Option Closing shall be effective for all purposes as of
12:01 a.m. on the Put Option Closing Date.

 

3.2.                            PAYMENT OF PURCHASE PRICE.

 

Upon the terms and subject to the satisfaction of the conditions contained in
this Agreement, in consideration of the aforesaid sale, assignment, conveyance,
transfer and delivery of the Put Option Assets, Exelon will pay or cause to be
paid to Zion Solutions, at the Put Option Closing in consideration of the Put
Option Assets the sum of One Dollar ($1) plus the assumption of the Put Option
Liabilities (the “Purchase Price”).

 

3.3.                            PRORATIONS.

 

3.3.1.                   ZION SOLUTIONS AND EXELON AGREE THAT ALL OF THE ITEMS
THAT RELATE TO A PERIOD OF TIME BEFORE AND AFTER THE PUT OPTION CLOSING DATE AND
ARE NORMALLY PRORATED, INCLUDING THOSE LISTED BELOW (BUT NOT INCLUDING INCOME
TAXES AND TRANSFER TAXES), RELATING TO THE OWNERSHIP, USE OR POSSESSION OF THE
PUT OPTION ASSETS SHALL BE PRORATED AS OF THE PUT OPTION CLOSING DATE, WITH ZION
SOLUTIONS AND THE BUYER QDF LIABLE TO THE EXTENT SUCH ITEMS RELATE TO ANY TIME
PERIOD ON OR AFTER THE CLOSING DATE AND ON OR BEFORE THE PUT OPTION CLOSING
DATE, AND EXELON LIABLE TO THE EXTENT SUCH ITEMS RELATE TO PERIODS BEFORE THE
CLOSING DATE AND AFTER THE PUT OPTION CLOSING DATE (MEASURED IN THE SAME UNITS
USED TO COMPUTE THE ITEM IN QUESTION, OTHERWISE MEASURED BY CALENDAR DAYS):

 

3.3.1.1             TAXES, ASSESSMENTS AND OTHER CHARGES, IF ANY, RELATING TO
THE OWNERSHIP, USE OR POSSESSION OF THE PUT OPTION ASSETS, EXCEPT AS OTHERWISE
PROVIDED IN THE LEASE AGREEMENT;

 

3.3.1.2             ANY PREPAID EXPENSES (EXCLUDING SECURITY DEPOSITS) RELATING
TO THE PUT OPTION ASSETS;

 

3.3.1.3             RENT, TAXES AND ALL OTHER ITEMS PAYABLE UNDER ANY OF THE
ZION SOLUTIONS AGREEMENTS OR THE NON-MATERIAL CONTRACTS;

 

3.3.1.4             ANY PERMIT, LICENSE, REGISTRATION, COMPLIANCE ASSURANCE FEES
OR OTHER FEES WITH RESPECT TO ANY TRANSFERABLE PERMIT;

 

3.3.1.5             SEWER RENTS AND CHARGES FOR WATER, TELEPHONE, ELECTRICITY
AND OTHER UTILITIES;

 

3.3.1.6             FEES OR CHARGES (OTHER THAN TAXES) IMPOSED BY ANY
GOVERNMENTAL AUTHORITY; AND

 

3.3.1.7             INSURANCE PREMIUMS WITH RESPECT TO THE NUCLEAR INSURANCE
POLICIES WITH ANI.

 

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3.3.2.                   NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT,
INTEREST OR PENALTIES RELATED TO A TAX ALLOCATED PURSUANT TO THIS SECTION 3.3
SHALL BE ALLOCATED: (I) TO ZION SOLUTIONS OR THE BUYER QDF, AS THE CASE MAY BE
(WHETHER SUCH TAXES ACCRUE OR ARE IMPOSED OR ASSESSED ON, BEFORE OR AFTER THE
PUT OPTION CLOSING DATE) TO THE EXTENT THEY RESULT FROM A FAILURE BY ZION
SOLUTIONS OR THE BUYER QDF, AS THE CASE MAY BE, TO PAY A TAX OR FAILURE BY ZION
SOLUTIONS OR THE BUYER QDF, AS THE CASE MAY BE, TO FILE A TAX RETURN, IN EACH
CASE, THAT WAS DUE BEFORE THE PUT OPTION CLOSING DATE; AND (II) TO EXELON
(WHETHER SUCH INTEREST AND PENALTIES ACCRUE OR ARE IMPOSED OR ASSESSED ON,
BEFORE OR AFTER THE PUT OPTION CLOSING DATE) TO THE EXTENT THEY RESULT FROM A
FAILURE BY EXELON TO PAY A TAX OR FAILURE BY EXELON TO FILE A TAX RETURN, IN
EACH CASE THAT WAS DUE ON OR AFTER THE PUT OPTION CLOSING DATE.

 

3.3.3.                   IN CONNECTION WITH THE PRORATIONS REFERRED TO IN
SECTION 3.3.1, IN THE EVENT THAT ACTUAL FIGURES ARE NOT AVAILABLE AT THE PUT
OPTION CLOSING DATE, THE PRORATIONS SHALL BE BASED UPON THE ACTUAL TAXES OR
OTHER AMOUNTS ACCRUED THROUGH THE PUT OPTION CLOSING DATE OR PAID FOR THE MOST
RECENT YEAR (OR OTHER APPROPRIATE PERIOD) FOR WHICH ACTUAL TAXES OR OTHER
AMOUNTS PAID ARE AVAILABLE.  SUCH PRORATED TAXES OR OTHER AMOUNTS SHALL BE
RE-PRORATED AND PAID TO THE APPROPRIATE PARTY WITHIN SIXTY (60) DAYS AFTER THE
DATE THAT THE PREVIOUSLY UNAVAILABLE ACTUAL FIGURES BECOME AVAILABLE. 
PRORATIONS MEASURED BY CALENDAR DAYS SHALL BE BASED ON THE NUMBER OF DAYS IN A
YEAR OR OTHER APPROPRIATE PERIOD: (I) BEFORE THE PUT OPTION CLOSING DATE; AND
(II) INCLUDING AND AFTER THE PUT OPTION CLOSING DATE.  EXELON AND ZION SOLUTIONS
AGREE TO FURNISH EACH OTHER WITH SUCH DOCUMENTS AND OTHER RECORDS AS MAY BE
REASONABLY REQUESTED IN ORDER TO CONFIRM ALL ADJUSTMENT AND PRORATION
CALCULATIONS MADE PURSUANT TO THIS SECTION 3.3.

 

3.3.4.                   TO THE EXTENT THAT THE PRORATION OF A TAX UNDER THIS
SECTION 3.3 ALLOCATES SUCH TAX TO A PERIOD (OR PORTION THEREOF) ENDING BEFORE
THE PUT OPTION CLOSING DATE, SUCH TAX SHALL CONSTITUTE AN EXCLUDED LIABILITY. 
TO THE EXTENT THAT THE PRORATION OF A TAX UNDER THIS SECTION 3.3 ALLOCATES SUCH
TAX TO A PERIOD (OR PORTION THEREOF) ENDING ON OR AFTER THE PUT OPTION CLOSING
DATE, SUCH TAX SHALL CONSTITUTE A PUT OPTION LIABILITY.

 

3.4.                            DELIVERIES BY ZION SOLUTIONS.

 

At the Put Option Closing, Zion Solutions will deliver, or cause to be
delivered, the following to Exelon:

 

3.4.1.                   THE PUT OPTION ASSETS;

 

3.4.2.                    COPIES OF ANY AND ALL GOVERNMENTAL AND OTHER THIRD
PARTY CONSENTS, WAIVERS OR APPROVALS OBTAINED BY ZION SOLUTIONS WITH RESPECT TO
THE TRANSFER OF THE PUT OPTION ASSETS, OR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT;

 

3.4.3.                   TO THE EXTENT AVAILABLE, ORIGINALS OF THE ZION
SOLUTIONS’ AGREEMENTS, NON-MATERIAL CONTRACTS, AND TRANSFERABLE PERMITS AND, IF
NOT AVAILABLE, TRUE AND CORRECT

 

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COPIES THEREOF, IN ALL CASES TOGETHER WITH NOTICES TO AND, IF REQUIRED BY THE
TERMS THEREOF AND SUBJECT TO THE TERMS OF THIS AGREEMENT, CONSENTS BY OTHER
PERSONS WHICH ARE PARTIES TO THE ZION SOLUTIONS’ AGREEMENTS, NON-MATERIAL
CONTRACTS, AND TRANSFERABLE PERMITS;

 

3.4.4.                   THE PUT OPTION BILL OF SALE AND ALL SUCH OTHER
INSTRUMENTS OF ASSIGNMENT, TRANSFER OR CONVEYANCE AS SHALL, IN THE REASONABLE
OPINION OF EXELON AND ITS COUNSEL, BE NECESSARY OR DESIRABLE TO TRANSFER THE PUT
OPTION ASSETS IN ACCORDANCE WITH THIS AGREEMENT AND WHERE NECESSARY OR DESIRABLE
IN RECORDABLE FORM; AND

 

3.4.5.                   SUCH OTHER AGREEMENTS, CONSENTS, DOCUMENTS, INSTRUMENTS
AND WRITINGS AS ARE REQUIRED TO BE DELIVERED BY ZION SOLUTIONS AT OR PRIOR TO
THE PUT OPTION CLOSING DATE PURSUANT TO THIS AGREEMENT OR OTHERWISE REASONABLY
REQUIRED IN CONNECTION HEREWITH.

 

3.5.                            DELIVERIES BY EXELON.

 

At the Put Option Closing, Exelon will deliver, or cause to be delivered, the
following to Zion Solutions:

 

3.5.1.                   THE PURCHASE PRICE;

 

3.5.2.                   THE PUT OPTION ASSIGNMENT AND ASSUMPTION AGREEMENT AND
ALL SUCH OTHER INSTRUMENTS OF ASSUMPTION AS SHALL, IN THE REASONABLE OPINION OF
ZION SOLUTIONS AND ITS COUNSEL, BE NECESSARY FOR EXELON TO ASSUME THE PUT OPTION
LIABILITIES IN ACCORDANCE WITH THIS AGREEMENT; AND

 

3.5.3.                   COPIES OF ANY AND ALL GOVERNMENTAL AND OTHER THIRD
PARTY CONSENTS, WAIVERS OR APPROVALS OBTAINED BY EXELON WITH RESPECT TO THE
TRANSFER OF THE PUT OPTION ASSETS, OR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.

 

4.                                       REPRESENTATIONS AND WARRANTIES OF ZION
SOLUTIONS

 

4.1.                            TITLE TO PUT OPTION ASSETS

 

Zion Solutions represents and warrants to Exelon that at the Put Option Closing
Date, Zion Solutions will hold an undivided interest in the Put Option Assets
free and clear of all Encumbrances, except Permitted Encumbrances.

 

4.2                               Buyer QDF

 

With respect to all periods prior to the Put Option Closing Date: (i) the Buyer
QDF is a trust, validly existing under the laws of the State of Illinois with
all requisite authority to conduct its affairs as it now does; (ii) the Buyer
QDF satisfies all requirements necessary for such fund to be treated as a
nuclear decommissioning fund as defined in Treas. Reg. Section 1.468A-1(b)(3);
(iii) the Buyer QDF is in compliance in all material respects with all
applicable Laws of the NRC and any other Governmental Authority and has not
engaged in any acts of “self-dealing” as defined in Treas. Reg. §
1.468A-5(b)(2); and (iv) no “excess contribution,” as

 

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defined in Treas. Reg. § 1.468A-5(c)(2)(ii), has been made to the QDF which has
not been withdrawn within the period provided under Treas. Reg. §
1.468A-5(c)(2)(i). Subject only to the Required Regulatory Approvals, Zion
Solutions and the Trustee of the Buyer QDF have, or as of the Put Option Closing
will have, all requisite authority to cause the assets of the Buyer QDF to be
transferred to the Trustee of a QDF or NDF established by Exelon.

 

5.                                      COVENANTS OF THE PARTIES

 

5.1.                            CONDUCT OF ZION SOLUTIONS.

 

DURING THE PERIOD FROM THE CLOSING DATE TO THE PUT OPTION CLOSING DATE, ZION
SOLUTIONS SHALL:

 

5.1.1.                   MAINTAIN THE BUYER QDF TO BE IN COMPLIANCE WITH THE
REQUIREMENTS OF SECTION 468A OF THE CODE AND THE TREASURY REGULATIONS; AND

 

5.1.2.                   AT ITS OWN COST AND IN COMPLIANCE WITH ALL APPLICABLE
LAW AND REGULATIONS AND PURSUANT TO THE TERMS, PLANS AND SPECIFICATIONS
ESTABLISHED IN THE LEASE AGREEMENT (ASSUMING THE SPENT NUCLEAR FUEL AND GREATER
THAN CLASS C WASTE HAVE NOT BEEN TRANSPORTED OFF THE ZION STATION SITE),
(I) BUILD THE ISFSI ISLAND; (II) MOVE THE SPENT NUCLEAR FUEL TO THE ISFSI
ISLAND; (III) STORE THE GREATER THAN CLASS C WASTE IN THE ISFSI ISLAND; AND
(IV) MAINTAIN THE ISFSI ISLAND UNTIL THE EARLIER OF THE PUT OPTION CLOSING OR
THE TIME WHEN THE SPENT NUCLEAR FUEL AND THE GREATER THAN CLASS C WASTE IS
TRANSFERRED AWAY FROM THE ZION STATION SITE.

 

DURING THE PERIOD FROM THE CLOSING DATE TO THE PUT OPTION CLOSING DATE, ZION
SOLUTIONS SHALL NOT:

 

5.1.3.                   AMEND THE PSDAR FOR THE ZION STATION, BEYOND SUCH
AMENDMENT AS IS REQUIRED IN CONNECTION WITH THE TRANSFER OF THE NRC LICENSES AT
THE CLOSING DATE WITHOUT EXELON’S CONSENT, WHICH SHALL NOT BE UNREASONABLY
WITHHELD, IN ANY MANNER THAT WOULD REASONABLY BE EXPECTED TO RESULT IN THE
ACHIEVEMENT OF SUBSTANTIAL COMPLETION TO OCCUR AFTER THE TARGET COMPLETION DATE;

 

5.1.4.                   SELL, LEASE, PLEDGE, MORTGAGE, ENCUMBER, RESTRICT,
DISPOSE OF, GRANT ANY RIGHT WITH RESPECT TO THE PUT OPTION ASSETS; PROVIDED,
HOWEVER, THE FOREGOING SHALL NOT BE CONSTRUED TO RESTRICT IN ANY WAY ZION
SOLUTIONS’ ABILITY TO PERFORM THE DECOMMISSIONING WORK REQUIRED BY THE LEASE
AGREEMENT OR WITHDRAW BUYER NDF, BUYER QDF, OR BACKUP NDT FUNDS FOR
REIMBURSEMENT OF COSTS AND EXPENSES OF DECOMMISSIONING;

 

5.1.5.                   MATERIALLY AMEND, EXTEND OR VOLUNTARILY TERMINATE PRIOR
TO THE EXPIRATION DATE THEREOF ANY OF THE SELLER AGREEMENTS, ZION SOLUTIONS’
AGREEMENTS OR ANY MATERIAL PERMIT OR ENVIRONMENTAL PERMIT OR WAIVE ANY DEFAULT
BY, OR RELEASE, SETTLE OR COMPROMISE ANY CLAIM AGAINST, ANY OTHER PARTY THERETO,
OTHER THAN: (I) IN THE ORDINARY COURSE OF BUSINESS, TO THE EXTENT CONSISTENT
WITH GOOD UTILITY PRACTICES; OR (II) WITH CAUSE, TO THE EXTENT CONSISTENT WITH
GOOD UTILITY PRACTICES;

 

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5.1.6.                   AMEND IN ANY MATERIAL RESPECT OR CANCEL ANY PROPERTY,
LIABILITY OR CASUALTY INSURANCE POLICIES RELATED THERETO, OR FAIL TO USE
COMMERCIALLY REASONABLE EFFORTS TO MAINTAIN WITH FINANCIALLY RESPONSIBLE
INSURANCE COMPANIES INSURANCE IN SUCH AMOUNTS AND AGAINST SUCH RISKS AND LOSSES
AS ARE CUSTOMARY FOR SUCH ASSETS AND BUSINESSES; PROVIDED, HOWEVER, THAT ZION
SOLUTIONS SHALL MAINTAIN THE INSURANCE REQUIRED BY THE LEASE AGREEMENT DURING
THE LEASE TERM;

 

5.1.7.                   MOVE TO THE ZION STATION SITE ANY NUCLEAR MATERIALS OR
HAZARDOUS MATERIALS;

 

5.1.8.                   SETTLE ANY CLAIM OR LITIGATION THAT RESULTS IN ANY
MATERIAL OBLIGATION IMPOSED ON THE PUT OPTION ASSETS THAT COULD REASONABLY BE
LIKELY TO CONTINUE PAST THE PUT OPTION CLOSING DATE;

 

5.1.9.                   ENTER INTO ANY INDIVIDUAL REQUIREMENTS CONTRACT FOR
GOODS OR ANY COMMITMENT OR CONTRACT FOR NON-EMPLOYMENT RELATED SERVICES THAT
WILL BE DELIVERED OR PROVIDED AFTER THE PUT OPTION CLOSING DATE OR SUCH OTHER
DATE AS THE PARTIES MUTUALLY AGREE TO BE THE DATE ON WHICH THE PUT OPTION
CLOSING IS EXPECTED TO OCCUR, UNLESS SUCH COMMITMENT OR CONTRACT IS TERMINABLE
BY ZION SOLUTIONS (OR AFTER THE PUT OPTION CLOSING DATE BY EXELON) UPON NOT MORE
THAN THIRTY (30) DAYS NOTICE WITHOUT PENALTY OR CANCELLATION CHARGE;

 

5.1.10.             EXCEPT AS REQUIRED BY ANY LAW OR ACCOUNTING PRINCIPLES
GENERALLY ACCEPTED IN THE UNITED STATES, CHANGE, IN ANY MATERIAL RESPECT, ITS
TAX PRACTICE OR POLICY (INCLUDING MAKING NEW TAX ELECTIONS OR CHANGING TAX
ELECTIONS AND SETTLING TAX CONTROVERSIES NOT IN THE ORDINARY COURSE OF BUSINESS)
TO THE EXTENT SUCH CHANGE OR SETTLEMENT WOULD BE BINDING ON EXELON; OR

 

5.1.11.             AGREE TO ENTER INTO ANY OF THE TRANSACTIONS SET FORTH IN THE
FOREGOING SECTIONS 5.1.3 THROUGH 5.1.10.

 

5.2.                            CONDUCT OF EXELON.

 

During the period from the Closing Date to the Put Option Closing Date Exelon,
upon thirty (30) days notice by Zion Solutions of its anticipated schedule for
achieving the End State Conditions (which schedule shall provide that achieving
the End State Conditions shall occur within nine (9) months after the date of
such notice, subject to receiving all Required Regulatory Approvals) and its
intent to exercise the Put Option, shall cooperate in good faith with Zion
Solutions, in obtaining the Required Regulatory Approvals for the Put Option
Closing, including (assuming the Spent Nuclear Fuel and Greater Than Class C
Waste have not been transported off the Zion Station Site) applying for NRC
approval of the transfer of control of the Amended NRC Licenses back to Exelon.

 

5.3.                            CONDUCT OF PARTIES.

 

During the period from the Closing Date to the Put Option Closing Date the
Parties shall:

 

5.3.1.                   COOPERATE AND USE DILIGENT EFFORTS TO RECEIVE ALL
REQUIRED REGULATORY APPROVALS;

 

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5.3.2.                   PROMPTLY PREPARE AND FILE ALL APPLICATIONS TO SECURE
THE TRANSFERS, REISSUANCE OR PROCUREMENT OF ALL PERMITS AND COOPERATE TO OBTAIN
APPROVAL OF SAME;

 

5.3.3.                   ADVISE EACH OTHER OF CHANGES, EVENTS OR CONDITIONS THAT
WOULD CONSTITUTE A BREACH OF ANY REPRESENTATION, WARRANTY OR COVENANT; AND

 

5.3.4.                   MAINTAIN THEIR EXISTING ARRANGEMENTS WITH RESPECT TO
CONFIDENTIALITY OF INFORMATION RELATING TO THIS TRANSACTION.

 

5.4.                            EXPENSES.

 

5.4.1.                   EXCEPT TO THE EXTENT SPECIFICALLY PROVIDED HEREIN,
WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED, ALL COSTS
AND EXPENSES INCURRED IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY, INCLUDING THE COST OF LEGAL, TECHNICAL AND FINANCIAL
CONSULTANTS AND THE COST OF FILING FOR AND PROSECUTING APPLICATIONS FOR THE
REQUIRED REGULATORY APPROVALS, SHALL BE BORNE BY THE PARTY INCURRING SUCH COSTS
AND EXPENSES.

 

5.4.2.                   EXELON SHALL BE RESPONSIBLE FOR ALL THIRD PARTY VENDOR
COSTS AND EXPENSES INCURRED AND RELATING TO WORK PERFORMED WITH RESPECT TO THE
PUT OPTION ASSETS AT THE REQUEST OF EXELON AFTER THE DATE HEREOF, OTHER THAN
WORK REQUIRED BY THE LEASE AGREEMENT.

 

5.5.                            PUBLIC STATEMENTS.

 

The Parties shall not issue any press release or other public disclosure with
respect to this Agreement or the transactions contemplated hereby without first
affording the non-disclosing Party the opportunity to review and comment on such
press release or public disclosure, except as may be required by applicable Law
or stock exchange rules. The Parties shall reasonably cooperate in matters
relating to the content and timing of public announcements and other public
disclosures (other than required filings and other required public statements or
testimony before regulatory authorities) relating to this Agreement or the
transactions contemplated hereby.

 

5.6.                            TAX MATTERS.

 

5.6.1.                   ALL TRANSFER TAXES INCURRED IN CONNECTION WITH THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE SHARED EQUALLY BY
EXELON AND ZION SOLUTIONS.  EXELON AND ZION SOLUTIONS WILL FILE, TO THE EXTENT
REQUIRED BY APPLICABLE LAW, ALL NECESSARY TAX RETURNS AND OTHER DOCUMENTATION
WITH RESPECT TO ALL SUCH TRANSFER TAXES, AND, IF REQUIRED BY APPLICABLE LAW,
WILL EACH JOIN IN THE EXECUTION OF ANY SUCH TAX RETURNS OR OTHER DOCUMENTATION. 
TO THE EXTENT EXELON AND ZION SOLUTIONS CANNOT AGREE WITH RESPECT TO ANY ITEM TO
BE INCLUDED ON SUCH TAX RETURN, SUCH DISPUTE SHALL BE RESOLVED IN THE MANNER
PROVIDED FOR IN SECTION 5.6.4.  PRIOR TO THE PUT OPTION CLOSING DATE, EXELON
WILL PROVIDE TO ZION SOLUTIONS, TO THE EXTENT POSSIBLE, AN APPROPRIATE EXEMPTION
CERTIFICATE IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY, DUE FROM EACH APPLICABLE TAXING AUTHORITY, AND THE PARTIES SHALL COMPLY
WITH ALL

 

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REQUIREMENTS AND USE COMMERCIALLY REASONABLE EFFORTS TO SECURE APPLICABLE SALES
TAX EXEMPTIONS FOR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

5.6.2.                   WITH RESPECT TO TAXES TO BE PRORATED IN ACCORDANCE WITH
SECTION 3.3, EXELON SHALL PREPARE AND TIMELY FILE ALL TAX RETURNS REQUIRED TO BE
FILED AFTER THE PUT OPTION CLOSING WITH RESPECT TO THE PUT OPTION ASSETS, IF
ANY, AND SHALL DULY AND TIMELY PAY ALL SUCH TAXES SHOWN TO BE DUE ON SUCH TAX
RETURNS.  EXELON’S PREPARATION OF ANY SUCH TAX RETURNS SHALL BE SUBJECT TO ZION
SOLUTIONS’ APPROVAL TO THE EXTENT THAT SUCH RETURNS RELATE TO ANY PERIOD,
ALLOCATION OR OTHER AMOUNT FOR WHICH ZION SOLUTIONS IS RESPONSIBLE.  EXELON
SHALL MAKE SUCH TAX RETURNS AND ALL SCHEDULES AND WORKING PAPERS SUPPORTING SUCH
TAX RETURNS AVAILABLE FOR ZION SOLUTIONS’ REVIEW AND APPROVAL NO LATER THAN
THIRTY (30) BUSINESS DAYS PRIOR TO THE DUE DATE FOR FILING SUCH TAX RETURN. 
ZION SOLUTIONS SHALL RESPOND NO LATER THAN TEN (10) BUSINESS DAYS PRIOR TO THE
DUE DATE FOR FILING SUCH TAX RETURN.  SUBJECT TO SECTION  5.6.4, NOT LESS THAN
FIVE (5) BUSINESS DAYS PRIOR TO THE DUE DATE OF ANY SUCH TAX RETURN, ZION
SOLUTIONS SHALL PAY TO EXELON ITS PROPORTIONATE SHARE OF THE AMOUNT SHOWN AS DUE
ON SUCH TAX RETURN AS DETERMINED IN ACCORDANCE WITH SECTION 3.3.  IN THE EVENT
EXELON AND ZION SOLUTIONS CANNOT AGREE AS TO THE PREPARATION OR THE REPORTING OF
ANY MATERIAL ITEM ON A TAX RETURN TO BE FILED BY EXELON, THE DISPUTE SHALL BE
SETTLED IN THE MANNER PROVIDED BY SECTION 5.6.4 AND THE COST OF SUCH INDEPENDENT
ACCOUNTING FIRM SHALL BE BORNE EQUALLY BY THE PARTIES; PROVIDED, HOWEVER, THAT
IF THE INDEPENDENT ACCOUNTING FIRM HAS NOT MADE A DETERMINATION AS OF THE DATE
THAT SUCH TAX RETURN IS REQUIRED TO BE FILED, SUCH TAX RETURN SHALL BE FILED IN
A MANNER CONSISTENT WITH ZION SOLUTIONS’ POSITION; PROVIDED, FURTHER, THAT WITH
RESPECT TO ANY SUCH TAX RETURN THAT IS FILED PRIOR TO A DETERMINATION BY THE
INDEPENDENT ACCOUNTING FIRM, ZION SOLUTIONS AND EXELON SHALL TAKE ALL
COMMERCIALLY REASONABLE STEPS TO AMEND SUCH TAX RETURN, IF NECESSARY, TO REFLECT
ANY MATERIAL DETERMINATION MADE BY THE INDEPENDENT ACCOUNTING FIRM.

 

5.6.3.                   EACH OF THE PARTIES SHALL PROVIDE THE OTHER WITH SUCH
ASSISTANCE AS MAY REASONABLY BE REQUESTED BY THE OTHER PARTY IN CONNECTION WITH
THE PREPARATION OF ANY TAX RETURN, ANY AUDIT OR OTHER EXAMINATION BY ANY TAXING
AUTHORITY, OR ANY JUDICIAL OR ADMINISTRATIVE PROCEEDINGS RELATING TO LIABILITY
FOR TAXES OR EFFECTUATING THE TERMS OF THIS AGREEMENT, AND EACH WILL RETAIN AND
PROVIDE THE REQUESTING PARTY WITH ANY RECORDS OR INFORMATION WHICH MAY BE
RELEVANT TO SUCH RETURN, AUDIT OR EXAMINATION, PROCEEDINGS OR DETERMINATION. 
ANY INFORMATION OBTAINED PURSUANT TO THIS SECTION OR PURSUANT TO ANY OTHER
SECTION HEREOF PROVIDING FOR THE SHARING OF INFORMATION OR REVIEW OF ANY TAX
RETURN OR OTHER SCHEDULE RELATING TO TAXES SHALL BE KEPT CONFIDENTIAL BY THE
PARTIES, EXCEPT TO THE EXTENT SUCH INFORMATION IS REQUIRED TO BE DISCLOSED BY
LAW.

 

5.6.4.                   IN THE EVENT THAT A DISPUTE ARISES BETWEEN ZION
SOLUTIONS AND EXELON AS TO THE PREPARATION OR THE REPORTING OF ANY MATERIAL ITEM
ON A TAX RETURN TO BE FILED BY EXELON OR THE ALLOCATION OF SUCH TAXES BETWEEN
ZION SOLUTIONS AND EXELON, THE PARTIES SHALL ATTEMPT IN GOOD FAITH TO RESOLVE
SUCH DISPUTE, AND ANY AGREED AMOUNT SHALL BE PAID TO THE APPROPRIATE PARTY
WITHIN TEN (10) BUSINESS DAYS AFTER THE DATE ON WHICH THE PARTIES REACH
AGREEMENT.  IF A DISPUTE IS NOT RESOLVED WITHIN THIRTY

 

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(30) DAYS AFTER A PARTY HAVING PROVIDED THE OTHER PARTY WRITTEN NOTICE OF A
DISPUTE, THE PARTIES SHALL SUBMIT THE DISPUTE FOR DETERMINATION AND RESOLUTION
TO DELOITTE & TOUCHE LLP OR SUCH OTHER MUTUALLY AGREEABLE FIRM OF CPAS (WHICH IS
NOT EXELON’S, ZION SOLUTIONS’ OR ZION SOLUTIONS’ PARENT’S INDEPENDENT
ACCOUNTANTS) OF RECOGNIZED NATIONAL STANDING (THE “INDEPENDENT ACCOUNTING
FIRM”), WHICH SHALL BE INSTRUCTED TO DETERMINE AND REPORT TO THE PARTIES IN
WRITING, WITHIN THIRTY (30) DAYS AFTER SUCH SUBMISSION, UPON SUCH DISPUTED
AMOUNT, AND SUCH WRITTEN REPORT SHALL BE FINAL, CONCLUSIVE AND BINDING ON THE
PARTIES.  THE INDEPENDENT ACCOUNTING FIRM SHALL ACT AS AN EXPERT AND NOT AS AN
ARBITRATOR AND SHALL MAKE FINDINGS ONLY WITH RESPECT TO THE REMAINING DISPUTES
SO SUBMITTED TO IT (AND NOT BY INDEPENDENT REVIEW).  NOTWITHSTANDING ANYTHING IN
THIS AGREEMENT TO THE CONTRARY, THE FEES AND EXPENSES OF THE INDEPENDENT
ACCOUNTING FIRM IN RESOLVING THE DISPUTE SHALL BE BORNE EQUALLY BY EXELON AND
ZION SOLUTIONS.  ANY PAYMENT REQUIRED TO BE MADE AS A RESULT OF THE RESOLUTION
OF THE DISPUTE BY THE INDEPENDENT ACCOUNTING FIRM SHALL BE MADE WITHIN TEN
(10) DAYS AFTER SUCH RESOLUTION, TOGETHER WITH ANY INTEREST DETERMINED BY THE
INDEPENDENT ACCOUNTING FIRM TO BE APPROPRIATE.  SUBMISSION OF A DISPUTE TO THE
INDEPENDENT ACCOUNTING FIRM SHALL NOT RELIEVE ANY PARTY FROM ANY OBLIGATION
UNDER THIS AGREEMENT TO TIMELY FILE A TAX RETURN OR PAY A TAX.

 

5.7   DECOMMISSIONING FUNDS.

 

5.7.1                      FOR ALL PERIODS PRIOR TO THE PUT OPTION CLOSING DATE,
ZION SOLUTIONS WILL MAINTAIN THE BUYER QDF IN ACCORDANCE WITH NRC REQUIREMENTS
AND IN COMPLIANCE WITH THE REQUIREMENTS OF SECTION 468A OF THE CODE AND THE
TREASURY REGULATIONS.  ON THE PUT OPTION CLOSING DATE, ZION SOLUTIONS SHALL
CAUSE TO BE TRANSFERRED TO EITHER A QDF OR NDF ESTABLISHED BY EXELON, AS
DIRECTED BY EXELON, ALL OF THE ASSETS OF THE BUYER QDF.  IN THE EVENT THAT ANY
FUNDS REMAIN IN THE BUYER NDF, SUCH FUNDS SHALL BE TRANSFERRED TO AN NDF
ESTABLISHED BY EXELON.

 

5.7.2                      EXELON SHALL TAKE ALL STEPS NECESSARY TO SATISFY ANY
REQUIREMENTS IMPOSED BY THE NRC REGARDING THE DECOMMISSIONING FUNDS, IN A MANNER
SUFFICIENT TO OBTAIN NRC APPROVAL OF THE TRANSFER OF THE AMENDED NRC LICENSES
FROM ZION SOLUTIONS TO EXELON.

 

5.7.3                      THE PARTIES SHALL NOT TAKE ANY ACTIONS THAT WOULD
CAUSE THE ACTUAL TAX CONSEQUENCES OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT TO DIFFER FROM OR BE INCONSISTENT WITH THE PRIVATE LETTER RULINGS SET
FORTH IN THE REQUIRED REGULATORY APPROVALS.

 

5.7.4                      ZION SOLUTIONS SHALL CAUSE THE TRUSTEE OF THE BUYER
QDF TO FILE THE TAX RETURNS FOR THE BUYER QDF FOR ANY PERIODS ENDING ON OR
BEFORE THE PUT OPTION CLOSING DATE.   PRIOR TO THE PUT OPTION CLOSING DATE, ZION
SOLUTIONS SHALL CAUSE THE TRUSTEE OF THE BUYER QDF TO PAY ESTIMATED INCOME TAXES
FOR THE TAXABLE PERIOD THAT END ON THE PUT OPTION CLOSING DATE IN AN AMOUNT
EQUAL TO THE ESTIMATED

 

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INCOME TAX LIABILITY OF THE BUYER QDF FOR THE TAXABLE PERIOD THAT ENDS ON THE
PUT OPTION CLOSING DATE.  TO THE EXTENT THE AMOUNT OF ESTIMATED INCOME TAXES
PAID PURSUANT TO THIS SECTION 5.7.4 IS LESS THAN THE INCOME TAX LIABILITY OF THE
BUYER QDF FOR THE TAXABLE PERIOD THAT ENDS ON THE PUT OPTION CLOSING DATE, ANY
SUCH DEFICIENCY WILL BE PAID BY THE BUYER QDF TO THE EXTENT THE BUYER QDF HOLDS
SUFFICIENT ASSETS OR BY ZION SOLUTIONS IF THE BUYER QDF HOLDS INSUFFICIENT
ASSETS.  TO THE EXTENT THE AMOUNT OF ESTIMATED INCOME TAXES IS GREATER THAN THE
INCOME TAX LIABILITY OF THE BUYER QDF FOR THE TAXABLE PERIOD THAT ENDS ON THE
PUT OPTION CLOSING DATE, ANY REFUND OF SUCH OVERPAYMENT WILL BE TRANSFERRED BY
ZION SOLUTIONS OR THE BUYER QDF TO A QDF ESTABLISHED BY EXELON AND TREATED AS
ADDITIONAL BUYER QDF DECOMMISSIONING FUNDS TRANSFERRED TO EXELON OR TREATED AS
ADDITIONAL BUYER NDF DECOMMISSIONING FUNDS TRANSFERRED TO EXELON, AS THE FACTS
MAY SUPPORT, ON THE PUT OPTION CLOSING DATE.

 

5.7.5                      ZION SOLUTIONS SHALL CAUSE THE TRUSTEE OF THE BUYER
QDF AND THE BUYER NDF TO PAY FINAL EXPENSES FOR TRUSTEE AND INVESTMENT
MANAGEMENT FEES AND OTHER ADMINISTRATIVE EXPENSES OF THE BUYER QDF AND BUYER NDF
RELATING TO TRANSACTIONS ON OR PRIOR TO THE PUT OPTION CLOSING DATE TO THE
EXTENT PRACTICABLE BEFORE THE PUT OPTION CLOSING DATE.  ZION SOLUTIONS SHALL
CAUSE THE TRUSTEE OF THE BUYER QDF AND THE BUYER NDF TO NOTIFY EXELON IN WRITING
OF ANY SUCH BUYER QDF AND BUYER NDF EXPENSES DUE ON OR AFTER THE PUT OPTION
CLOSING DATE.  EXELON SHALL DIRECT THE TRUSTEE OF A QDF OR NDF ESTABLISHED BY
EXELON TO PAY THE TAXES AND EXPENSES IDENTIFIED IN THE PRECEDING SENTENCE TO THE
EXTENT NOT PAID BEFORE THE PUT OPTION CLOSING DATE.  EXELON SHALL ENSURE THAT
THE EXELON DECOMMISSIONING TRUST AGREEMENT ALLOWS FOR THE PAYMENT OF SUCH
EXPENSES.

 

6.                                      CONDITIONS

 

6.1.                            CONDITIONS TO OBLIGATIONS OF ZION SOLUTIONS.

 

The obligations of Zion Solutions to sell the Put Option Assets and to
consummate the other transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to the Put Option Closing Date (or the
waiver by Zion Solutions) of the following conditions:

 

6.1.1.                   NO PRELIMINARY OR PERMANENT INJUNCTION OR OTHER ORDER
OR DECREE BY ANY GOVERNMENTAL AUTHORITY WHICH RESTRAINS OR PREVENTS THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY SHALL HAVE BEEN ISSUED AND
REMAIN IN EFFECT AND NO STATUTE, RULE OR REGULATION SHALL HAVE BEEN ENACTED BY
ANY GOVERNMENTAL AUTHORITY WHICH PROHIBITS THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY;

 

6.1.2.                   ALL REQUIRED REGULATORY APPROVALS SHALL HAVE BEEN
RECEIVED, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO ZION SOLUTIONS AND
SUCH APPROVALS SHALL BE IN FULL FORCE AND EFFECT AND EITHER (I) SHALL BE FINAL
AND NON-APPEALABLE OR (II) IF NOT

 

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FINAL AND NON-APPEALABLE, SHALL NOT BE SUBJECT TO THE POSSIBILITY OF APPEAL,
REVIEW OR RECONSIDERATION WHICH, IN THE REASONABLE OPINION OF ZION SOLUTIONS IS
LIKELY TO BE SUCCESSFUL AND, IF SUCCESSFUL, WOULD HAVE A MATERIAL ADVERSE
EFFECT; AND

 

6.1.3.                   EXELON SHALL HAVE DELIVERED, OR CAUSED TO BE DELIVERED,
TO ZION SOLUTIONS AT THE PUT OPTION CLOSING, EXELON’S PUT OPTION CLOSING
DELIVERIES DESCRIBED IN SECTION 3.5.

 

6.2.                            CONDITIONS TO OBLIGATIONS OF EXELON.

 

The obligation of Exelon to purchase the Put Option Assets and to consummate the
other transactions contemplated by this Agreement shall be subject to the
fulfillment at or prior to the Put Option Closing Date (or the waiver by Exelon)
of the following conditions:

 

6.2.1.                   ZION SOLUTIONS SHALL HAVE PERFORMED ALL OBLIGATIONS
UNDER THE LEASE AGREEMENT, END STATE CONDITIONS SHALL HAVE BEEN ACHIEVED, AND
EXELON SHALL HAVE RECEIVED THE PUT OPTION EXERCISE NOTICE;

 

6.2.2.                   NO PRELIMINARY OR PERMANENT INJUNCTION OR OTHER ORDER
OR DECREE BY ANY GOVERNMENTAL AUTHORITY WHICH RESTRAINS OR PREVENTS THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY SHALL HAVE BEEN ISSUED AND
REMAIN IN EFFECT AND NO STATUTE, RULE OR REGULATION SHALL HAVE BEEN ENACTED BY
ANY GOVERNMENTAL AUTHORITY WHICH PROHIBITS THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY;

 

6.2.3.                   ALL REQUIRED REGULATORY APPROVALS SHALL HAVE BEEN
RECEIVED, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO EXELON AND SUCH
APPROVALS SHALL BE IN FULL FORCE AND EFFECT AND EITHER (I) SHALL BE FINAL AND
NON-APPEALABLE; OR (II) IF NOT FINAL AND NON-APPEALABLE, SHALL NOT BE SUBJECT TO
THE POSSIBILITY OF APPEAL, REVIEW OR RECONSIDERATION WHICH, IN THE REASONABLE
OPINION OF EXELON IS LIKELY TO BE SUCCESSFUL AND, IF SUCCESSFUL, WOULD HAVE A
MATERIAL ADVERSE EFFECT;

 

6.2.4.                   ZION SOLUTIONS SHALL HAVE PERFORMED AND COMPLIED IN ALL
MATERIAL RESPECTS WITH THE COVENANTS AND AGREEMENTS CONTAINED IN THIS AGREEMENT
WHICH ARE REQUIRED TO BE PERFORMED AND COMPLIED WITH BY ZION SOLUTIONS ON OR
PRIOR TO THE PUT OPTION CLOSING DATE;

 

6.2.5.                   THE REPRESENTATIONS AND WARRANTIES OF ZION SOLUTIONS
SET FORTH IN THIS AGREEMENT SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS
AS OF THE PUT OPTION CLOSING DATE, IN EACH CASE AS THOUGH MADE AT AND AS OF THE
PUT OPTION CLOSING DATE;

 

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6.2.6.                   EXELON SHALL HAVE RECEIVED A CERTIFICATE FROM AN
AUTHORIZED OFFICER OF ZION SOLUTIONS, DATED THE PUT OPTION CLOSING DATE, TO THE
EFFECT THAT, TO SUCH OFFICER’S KNOWLEDGE, THE CONDITIONS SET FORTH IN SECTIONS
6.2.1, 6.2.4 AND 6.2.5 HAVE BEEN SATISFIED BY ZION SOLUTIONS;

 

6.2.7.                   ZION SOLUTIONS SHALL HAVE DELIVERED, OR CAUSED TO BE
DELIVERED, TO EXELON AT THE PUT OPTION CLOSING, ZION SOLUTIONS’ PUT OPTION
CLOSING DELIVERIES DESCRIBED IN SECTION 3.4.

 

6.2.8.                   EXELON SHALL HAVE RECEIVED AN UNAUDITED STATEMENT OF
ASSETS AND ACCRUED LIABILITIES FOR THE BUYER QDF AND THE BUYER NDF AS OF THE
LAST BUSINESS DAY BEFORE PUT OPTION CLOSING; AND

 

6.2.9.                   ZION SOLUTIONS SHALL HAVE TAKEN ALL STEPS REQUIRED TO
COMPLETE THE TRANSFER OF ASSETS FROM THE BUYER NDF AND BUYER QDF TO A QDF OR NDF
ESTABLISHED BY EXELON, AS REQUIRED BY SECTION 5.7, EFFECTIVE AS OF THE PUT
OPTION CLOSING.

 

7.                                     INDEMNIFICATION

 

7.1.                            INDEMNIFICATION.

 

7.1.1.                   FOLLOWING THE PUT OPTION CLOSING, EXELON SHALL
INDEMNIFY, DEFEND AND HOLD HARMLESS ZION SOLUTIONS, ITS OFFICERS, DIRECTORS,
EMPLOYEES, AFFILIATES, SHAREHOLDERS AND AGENTS (EACH, A “ZION SOLUTIONS
INDEMNITEE”) FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, SUITS, LOSSES,
LIABILITIES, DAMAGES, OBLIGATIONS, PAYMENTS, COSTS AND EXPENSES (INCLUDING,
WITHOUT LIMITATION, THE COSTS AND EXPENSES OF ANY AND ALL ACTIONS, SUITS,
PROCEEDINGS, ASSESSMENTS, JUDGMENTS, SETTLEMENTS AND COMPROMISES RELATING
THERETO AND REASONABLE ATTORNEYS’ FEES AND REASONABLE DISBURSEMENTS IN
CONNECTION THEREWITH) (EACH, AN “INDEMNIFIABLE LOSS”), ASSERTED AGAINST OR
SUFFERED BY ANY ZION SOLUTIONS INDEMNITEE RELATING TO, RESULTING FROM OR ARISING
OUT OF: (I) ANY BREACH BY EXELON OF THE COVENANTS CONTAINED IN THIS AGREEMENT;
(II) THE PUT OPTION LIABILITIES; OR (III) ANY THIRD PARTY CLAIMS AGAINST A ZION
SOLUTIONS INDEMNITEE ARISING OUT OF OR IN CONNECTION WITH EXELON’S OWNERSHIP OF
THE PUT OPTION ASSETS OR THE FACILITIES FOLLOWING THE PUT OPTION CLOSING DATE 
INCLUDING CONTRACTORS’ MECHANICS’, MATERIALMEN’S AND SIMILAR LIENS AND CLAIMS
ARISING AFTER THE PUT OPTION CLOSING DATE OUT OF THE PERFORMANCE OF SERVICES OR
THE FURNISHING OF MATERIALS RELATING TO THE ZION STATION SITE.

 

7.1.2.                   IN THE EVENT THE END STATE CONDITIONS CANNOT BE
SATISFIED OR THE PUT OPTION CLOSING CANNOT OCCUR BECAUSE EITHER: (I) THERE IS AN
INJUNCTION, ORDER OR DECREE AGAINST EXELON RESTRAINING CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT; OR (II) THE NRC HAS NOT APPROVED
THE AMENDED NRC LICENSE AND TRANSFER TO EXELON BECAUSE OF AN ISSUE RELATED
SOLELY TO EXELON’S ABILITY TO QUALIFY FOR THE AMENDED NRC LICENSE, THEN EXELON
SHALL INDEMNIFY AND HOLD HARMLESS THE ZION SOLUTIONS INDEMNITEES FOR ANY COSTS
OR LIABILITIES INCURRED BY THE ZION SOLUTIONS INDEMNITEES, TO THE EXTENT NOT
REIMBURSED BY THE BUYER QDF, THE BUYER

 

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NDF OR THE BUYER BACKUP NDT, RELATING DIRECTLY OR INDIRECTLY TO THE POSSESSION
AND MAINTENANCE OF THE ZION STATION SITE, INCLUDING THE ISFSI ISLAND, THE SPENT
NUCLEAR FUEL AND THE GREATER THAN CLASS C WASTE, EXCLUDING PUNITIVE,
CONSEQUENTIAL OR SPECIAL DAMAGES (ALSO, AN “INDEMNIFIABLE LOSS”).

 

7.1.3.                   FOLLOWING THE PUT OPTION CLOSING, ZION SOLUTIONS SHALL
INDEMNIFY, DEFEND AND HOLD HARMLESS EXELON, ITS OFFICERS, DIRECTORS, MEMBERS,
EMPLOYEES, SHAREHOLDERS, AFFILIATES AND AGENTS (EACH, AN “EXELON INDEMNITEE”)
FROM AND AGAINST ANY AND ALL INDEMNIFIABLE LOSSES ASSERTED AGAINST OR SUFFERED
BY ANY EXELON INDEMNITEE RELATING TO, RESULTING FROM OR ARISING OUT OF: (I) ANY
BREACH BY ZION SOLUTIONS OF ANY OF THE REPRESENTATIONS AND WARRANTIES OF ZION
SOLUTIONS CONTAINED  IN THIS AGREEMENT, BUT ONLY TO THE EXTENT THAT SUCH
INDEMNIFIABLE LOSSES EXCEED ONE MILLION DOLLARS ($1,000,000) INDIVIDUALLY OR TEN
MILLION DOLLARS ($10,000,000) IN THE AGGREGATE; (II) ANY BREACH BY ZION
SOLUTIONS OF ANY OF THE COVENANTS OF ZION SOLUTIONS CONTAINED IN THIS AGREEMENT;
AND (III) ANY THIRD PARTY CLAIMS AGAINST AN EXELON INDEMNITEE ARISING OUT OF OR
IN CONNECTION WITH ZION SOLUTIONS’ OWNERSHIP OR OPERATION OF THE PUT OPTION
ASSETS ON OR PRIOR TO THE PUT OPTION CLOSING DATE (OTHER THAN ANY THIRD PARTY
CLAIMS THAT ARE PUT OPTION LIABILITIES) INCLUDING CONTRACTORS’ MECHANICS’,
MATERIALMEN’S AND SIMILAR LIENS AND CLAIMS ARISING BEFORE THE PUT OPTION CLOSING
DATE OUT OF THE PERFORMANCE OF SERVICES OR THE FURNISHING OF MATERIALS RELATING
TO THE ZION STATION SITE.

 

7.1.4.                   EXCEPT TO THE EXTENT OTHERWISE PROVIDED IN
SECTION 5.6.4, THE RIGHTS AND REMEDIES OF EXELON AND ZION SOLUTIONS UNDER THIS
ARTICLE 7 ARE EXCLUSIVE AND IN LIEU OF ANY AND ALL OTHER RIGHTS AND REMEDIES
WHICH EXELON AND ZION SOLUTIONS MAY HAVE UNDER THIS AGREEMENT OR OTHERWISE FOR
MONETARY RELIEF, WITH RESPECT TO: (I) ANY BREACH OF OR FAILURE TO PERFORM ANY
COVENANT, OR AGREEMENT SET FORTH IN THIS AGREEMENT AFTER THE OCCURRENCE OF THE
PUT OPTION CLOSING; OR (II) THE PUT OPTION LIABILITIES OR THE EXCLUDED
LIABILITIES, AS THE CASE MAY BE.  THE INDEMNIFICATION OBLIGATIONS OF THE PARTIES
SET FORTH IN THIS ARTICLE 7 APPLY ONLY TO MATTERS ARISING OUT OF THIS
AGREEMENT.  THE MAXIMUM AGGREGATE EXPOSURE FOR INDEMNIFIABLE LOSSES BY ZION
SOLUTIONS UNDER CLAUSE (I) OF SECTION 7.1.3 SHALL BE TWENTY-FIVE MILLION DOLLARS
($25,000,000); PROVIDED, HOWEVER, THAT ANY INTENTIONAL MISREPRESENTATION OR
FRAUDULENT BREACH OF ANY REPRESENTATION OR WARRANTY OF ZION SOLUTIONS CONTAINED
IN THIS AGREEMENT SHALL NOT BE SUBJECT TO THE FOREGOING CAP ON INDEMNITY (IT
BEING UNDERSTOOD THAT THE PARTY SEEKING INDEMNITY IN EXCESS OF SUCH CAP SHALL
BEAR THE BURDEN OF PROOF OF ESTABLISHING THE EXISTENCE OF THE INTENTIONAL
MISREPRESENTATION OR FRAUDULENT BREACH).

 

7.1.5.                   NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, NO
PARTY (INCLUDING AN INDEMNITEE) SHALL BE ENTITLED TO RECOVER FROM ANY OTHER
PARTY (INCLUDING AN INDEMNIFYING PARTY) FOR ANY LIABILITIES, DAMAGES,
OBLIGATIONS, PAYMENTS, LOSSES, COSTS OR EXPENSES UNDER THIS AGREEMENT ANY AMOUNT
IN EXCESS OF THE ACTUAL COMPENSATORY DAMAGES, COURT COSTS AND REASONABLE
ATTORNEY’S AND OTHER ADVISOR FEES SUFFERED BY SUCH PARTY.  ZION SOLUTIONS AND
EXELON WAIVE ANY RIGHT TO RECOVER PUNITIVE, INCIDENTAL, SPECIAL, EXEMPLARY AND
CONSEQUENTIAL DAMAGES ARISING IN CONNECTION WITH OR WITH RESPECT TO THIS
AGREEMENT INCLUDING, BUT NOT

 

31

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LIMITED TO, LOSSES OR DAMAGES CAUSED BY REASON OF PLANT SHUTDOWNS OR SERVICE
INTERRUPTIONS, LOSS OF USE, PROFITS OR REVENUE, INVENTORY OR USE CHARGES, COST
OF PURCHASED OR REPLACEMENT POWER, INTEREST CHARGES OR COST OF CAPITAL, EXCEPT
TO THE EXTENT ANY SUCH PUNITIVE, INCIDENTAL, SPECIAL, EXEMPLARY OR CONSEQUENTIAL
DAMAGES ARE PAID OR PAYABLE TO  A PERSON NOT A PARTY OR ANY AFFILIATE OF A PARTY
BY REASON OF A THIRD PARTY CLAIM.

 

7.2.                            DEFENSE OF CLAIMS.

 

7.2.1.                   IF ANY INDEMNITEE RECEIVES NOTICE OF THE ASSERTION OF
ANY CLAIM OR OF THE COMMENCEMENT OF ANY CLAIM, ACTION, OR PROCEEDING MADE OR
BROUGHT BY ANY PERSON WHO IS NOT A PARTY OR ANY AFFILIATE OF A PARTY (A “THIRD
PARTY CLAIM”), WITH RESPECT TO WHICH INDEMNIFICATION IS TO BE SOUGHT FROM AN
INDEMNIFYING PARTY, THE INDEMNITEE SHALL GIVE SUCH INDEMNIFYING PARTY REASONABLY
PROMPT WRITTEN NOTICE THEREOF, BUT IN ANY EVENT SUCH NOTICE SHALL NOT BE GIVEN
LATER THAN TWENTY (20) CALENDAR DAYS AFTER THE INDEMNITEE’S RECEIPT OF NOTICE OF
SUCH THIRD PARTY CLAIM EXCEPT AT OTHERWISE PROVIDED BY SECTION 7.2.6.  SUCH
NOTICE SHALL DESCRIBE THE NATURE OF THE THIRD PARTY CLAIM IN REASONABLE DETAIL
AND SHALL INDICATE THE ESTIMATED AMOUNT, IF PRACTICABLE, OF THE INDEMNIFIABLE
LOSS THAT HAS BEEN OR MAY BE SUSTAINED BY THE INDEMNITEE.  THE INDEMNIFYING
PARTY WILL HAVE THE RIGHT TO PARTICIPATE IN OR, BY GIVING WRITTEN NOTICE TO THE
INDEMNITEE, TO ELECT TO ASSUME THE DEFENSE OF ANY THIRD PARTY CLAIM AT SUCH
INDEMNIFYING PARTY’S EXPENSE AND BY SUCH INDEMNIFYING PARTY’S OWN COUNSEL;
PROVIDED, HOWEVER, THAT THE COUNSEL FOR THE INDEMNIFYING PARTY WHO SHALL CONDUCT
THE DEFENSE OF SUCH THIRD PARTY CLAIM SHALL BE REASONABLY SATISFACTORY TO THE
INDEMNITEE.  THE INDEMNITEE SHALL COOPERATE IN GOOD FAITH IN SUCH DEFENSE AT
SUCH INDEMNITEE’S OWN EXPENSE.  IF AN INDEMNIFYING PARTY ELECTS NOT TO ASSUME
THE DEFENSE OF ANY THIRD PARTY CLAIM, THE INDEMNITEE MAY COMPROMISE OR SETTLE
SUCH THIRD PARTY CLAIM OVER THE OBJECTION OF THE INDEMNIFYING PARTY, WHICH
SETTLEMENT OR COMPROMISE SHALL CONCLUSIVELY ESTABLISH THE INDEMNIFYING PARTY’S
LIABILITY PURSUANT TO THIS AGREEMENT; PROVIDED, HOWEVER, THAT THE INDEMNITEE
PROVIDES WRITTEN NOTICE TO THE INDEMNIFYING PARTY OF ITS INTENT TO SETTLE AND
SUCH NOTICE REASONABLY DESCRIBES THE TERMS OF SUCH SETTLEMENT AT LEAST TEN
(10) BUSINESS DAYS PRIOR TO ENTERING INTO ANY SETTLEMENT.

 

7.2.2.                   IF, WITHIN TWENTY (20) DAYS AFTER AN INDEMNITEE
PROVIDES WRITTEN NOTICE TO THE INDEMNIFYING PARTY OF ANY THIRD PARTY CLAIM, THE
INDEMNITEE RECEIVES WRITTEN NOTICE FROM THE INDEMNIFYING PARTY THAT SUCH
INDEMNIFYING PARTY HAS ELECTED TO ASSUME THE DEFENSE OF SUCH THIRD PARTY CLAIM
AS PROVIDED IN SECTION 7.2.1, THE INDEMNIFYING PARTY WILL NOT BE LIABLE FOR ANY
LEGAL EXPENSES SUBSEQUENTLY INCURRED BY THE INDEMNITEE IN CONNECTION WITH THE
DEFENSE THEREOF; PROVIDED, HOWEVER, THAT IF THE INDEMNIFYING PARTY SHALL FAIL TO
TAKE REASONABLE STEPS NECESSARY TO DEFEND DILIGENTLY SUCH THIRD PARTY CLAIM
WITHIN TWENTY (20) DAYS AFTER RECEIVING NOTICE FROM THE INDEMNITEE THAT THE
INDEMNITEE BELIEVES THE INDEMNIFYING PARTY HAS FAILED TO TAKE SUCH STEPS, THE
INDEMNITEE MAY ASSUME ITS OWN DEFENSE AND THE INDEMNIFYING PARTY SHALL BE LIABLE
FOR ALL REASONABLE EXPENSES THEREOF.

 

32

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7.2.3.                   WITHOUT THE PRIOR WRITTEN CONSENT OF THE INDEMNITEE,
WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED, THE INDEMNIFYING
PARTY SHALL NOT ENTER INTO ANY SETTLEMENT OF ANY THIRD PARTY CLAIM WHICH WOULD
LEAD TO LIABILITY OR CREATE ANY FINANCIAL OR OTHER OBLIGATION ON THE PART OF THE
INDEMNITEE FOR WHICH THE INDEMNITEE IS NOT ENTITLED TO INDEMNIFICATION
HEREUNDER.  IF A FIRM OFFER IS MADE TO SETTLE A THIRD PARTY CLAIM WITHOUT
LEADING TO LIABILITY OR THE CREATION OF A FINANCIAL OR OTHER OBLIGATION ON THE
PART OF THE INDEMNITEE FOR WHICH THE INDEMNITEE IS NOT ENTITLED TO
INDEMNIFICATION HEREUNDER AND THE INDEMNIFYING PARTY DESIRES TO ACCEPT AND AGREE
TO SUCH OFFER, THE INDEMNIFYING PARTY SHALL GIVE WRITTEN NOTICE TO THE
INDEMNITEE TO THAT EFFECT.  IF THE INDEMNITEE FAILS TO CONSENT TO SUCH FIRM
OFFER WITHIN TWENTY (20) DAYS AFTER ITS RECEIPT OF SUCH NOTICE, THE INDEMNIFYING
PARTY SHALL BE RELIEVED OF ITS OBLIGATIONS TO DEFEND SUCH THIRD PARTY CLAIM AND
THE INDEMNITEE MAY CONTEST OR DEFEND SUCH THIRD PARTY CLAIM.  IN SUCH EVENT, THE
MAXIMUM LIABILITY OF THE INDEMNIFYING PARTY AS TO SUCH THIRD PARTY CLAIM WILL BE
THE AMOUNT OF SUCH SETTLEMENT OFFER PLUS REASONABLE COSTS AND EXPENSES PAID OR
INCURRED BY INDEMNITEE UP TO THE DATE OF SAID NOTICE.

 

7.2.4.                   ANY CLAIM BY AN INDEMNITEE ON ACCOUNT OF AN
INDEMNIFIABLE LOSS WHICH DOES NOT RESULT FROM A THIRD PARTY CLAIM (A “DIRECT
CLAIM”) SHALL BE ASSERTED BY GIVING THE INDEMNIFYING PARTY REASONABLY PROMPT
WRITTEN NOTICE THEREOF, STATING THE NATURE OF SUCH CLAIM IN REASONABLE DETAIL
AND INDICATING THE ESTIMATED AMOUNT, IF PRACTICABLE, BUT IN ANY EVENT SUCH
NOTICE SHALL NOT BE GIVEN LATER THAN TWENTY (20) DAYS AFTER THE INDEMNITEE
BECOMES AWARE OF SUCH DIRECT CLAIM, AND THE INDEMNIFYING PARTY SHALL HAVE A
PERIOD OF TWENTY (20) DAYS WITHIN WHICH TO RESPOND TO SUCH DIRECT CLAIM.  IF THE
INDEMNIFYING PARTY DOES NOT RESPOND WITHIN SUCH TWENTY (20) DAY PERIOD, THE
INDEMNIFYING PARTY SHALL BE DEEMED TO HAVE ACCEPTED SUCH CLAIM.  IF THE
INDEMNIFYING PARTY REJECTS SUCH CLAIM, THE INDEMNITEE WILL BE FREE TO SEEK
ENFORCEMENT OF ITS RIGHT TO INDEMNIFICATION UNDER THIS AGREEMENT.

 

7.2.5.                   THE AMOUNT OF ANY INDEMNIFIABLE LOSS SHALL BE REDUCED
TO THE EXTENT THAT THE INDEMNITEE RECEIVES ANY INSURANCE PROCEEDS WITH RESPECT
TO AN INDEMNIFIABLE LOSS.  IF THE AMOUNT OF ANY INDEMNIFIABLE LOSS, AT ANY TIME
SUBSEQUENT TO THE MAKING OF AN INDEMNITY PAYMENT IN RESPECT THEREOF, IS REDUCED
BY RECOVERY, SETTLEMENT OR OTHERWISE UNDER OR PURSUANT TO ANY INSURANCE
COVERAGE, OR PURSUANT TO ANY CLAIM, RECOVERY, SETTLEMENT OR PAYMENT BY, FROM OR
AGAINST ANY OTHER ENTITY, THE AMOUNT OF SUCH REDUCTION, LESS ANY COSTS, EXPENSES
OR PREMIUMS INCURRED IN CONNECTION THEREWITH (TOGETHER WITH INTEREST THEREON
FROM THE DATE OF PAYMENT THEREOF TO THE DATE OR REPAYMENT AT THE “PRIME RATE” AS
PUBLISHED IN THE WALL STREET JOURNAL) SHALL PROMPTLY BE REPAID BY THE INDEMNITEE
TO THE INDEMNIFYING PARTY.

 

7.2.6.                   A FAILURE TO GIVE TIMELY NOTICE AS PROVIDED IN THIS
SECTION 7.2 SHALL NOT AFFECT THE RIGHTS OR OBLIGATIONS OF ANY PARTY HEREUNDER
EXCEPT IF, AND ONLY TO THE EXTENT THAT, AS A RESULT OF SUCH FAILURE, THE PARTY
WHICH WAS ENTITLED TO RECEIVE SUCH NOTICE WAS ACTUALLY PREJUDICED AS A RESULT OF
SUCH FAILURE.

 

33

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8.                                       MISCELLANEOUS PROVISIONS

 

8.1.                            AMENDMENT AND MODIFICATION.

 

Subject to applicable law, this Agreement may be amended, modified or
supplemented only by written agreement of Zion Solutions and Exelon; provided,
however, that if as a result of the exercise of remedies under the Pledge
Agreement, Exelon controls Zion Solutions by reason of the appointment of a
majority of the members of the board of directors of Zion Solutions (but does
not otherwise control Zion Solutions through ownership of limited liability
company membership interests in Zion Solutions), any amendment, modification or
change in the terms of this Agreement made after the date on which Exelon
acquired such control shall not be effective without the written consent of Zion
Solutions’ Parent, which consent shall not be unreasonably withheld, delayed or
conditioned.

 

8.2.                            WAIVER OF COMPLIANCE; CONSENTS.

 

Except as otherwise provided in this Agreement, any failure of any of the
Parties to comply with any obligation, covenant, agreement or condition herein
may be waived by the Party entitled to the benefits thereof only by a written
instrument signed by the Party granting such waiver, but such waiver of such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent failure to comply therewith.

 

8.3.                            SURVIVAL OF WARRANTIES, COVENANTS AND
OBLIGATIONS.

 

Except as otherwise expressly provided in this Agreement, the warranties,
covenants and obligations of the Parties set forth in this Agreement, including
without limitation the indemnification obligations of the Parties under
Article 7 hereof, shall survive the Put Option Closing indefinitely, and the
Parties shall be entitled to the full performance thereof by the other Party
hereto without limitation as to time or amount (except as otherwise specifically
set forth herein).

 

8.4.                            NOTICES.

 

All notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally or by facsimile transmission, or mailed by
overnight courier or registered or certified mail (return receipt requested),
postage prepaid, to the recipient Party at its address (or at such other address
or facsimile number for a Party as shall be specified by like notice; provided,
however, that notices of a change of address shall be effective only upon
receipt thereof):

 

8.4.1.                   IF TO ZION SOLUTIONS, TO:

 

ZionSolutions, LLC

423 West 300 South, Suite 200

Salt Lake City, Utah 84101

 

34

--------------------------------------------------------------------------------

 

Attention: John Christian

 

with copies to:

 

ZionSolutions, LLC

423 West 300 South, Suite 200

Salt Lake City, Utah 84101

Attention: Val Christensen

 

8.4.2.                   IF TO EXELON, TO:

 

Exelon Nuclear

Exelon Generation Company, LLC

4300 Winfield Road

Warrenville, Illinois 60555

Attention: Thomas O’Neill

 

with a copy to:

 

Exelon Nuclear

Exelon Generation Company, LLC

4300 Winfield Road

Warrenville, Illinois 60555

Attention: Bradley Fewell

 

and

 

Exelon Corporation

10 South Dearborn Street

Chicago, Illinois 60603

Attention: Bruce G. Wilson

 

8.5.                            ASSIGNMENT.

 

This Agreement and all of the provisions hereof shall be binding upon and inure
to the benefit of the Parties and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any Party, including by operation of
law, without the prior written consent of each other Party, such consent not to
be unreasonably withheld, nor is this Agreement intended (except as specifically
provided herein) to confer upon any other Person except the Parties any rights,
interests, obligations or remedies hereunder.  Any assignment in contravention
of the foregoing sentence shall be null and void and without legal effect on the
rights and obligations of the Parties hereunder.  No provision of this Agreement
shall create any third party beneficiary rights in any employee or former
employee of Zion Solutions (including any beneficiary or dependent thereof) in
respect of continued employment or resumed employment, and no provision of this
Agreement shall create any rights in any such Persons in respect of any benefits
that may be

 

35

--------------------------------------------------------------------------------

 

provided, directly or indirectly, under any employee benefit plan or arrangement
except as expressly provided for thereunder.  In the event Exelon assigns this
Agreement with the consent of Zion Solutions pursuant to this Section 8.5, such
assignee shall be defined as “Exelon” for all purposes hereunder thereafter.

 

8.6.                            GOVERNING LAW.

 

This Agreement shall be governed by and construed in accordance with the law of
the State of Illinois (without giving effect to conflict of law principles) as
to all matters, including but not limited to matters of validity, construction,
effect, performance and remedies.  THE PARTIES HERETO AGREE THAT VENUE IN ANY
AND ALL ACTIONS AND PROCEEDINGS RELATED TO THE SUBJECT MATTER OF THIS AGREEMENT
SHALL BE IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS (EASTERN DIVISION) OR ANY STATE COURT SITUATED THEREIN.   THE FOREGOING
COURTS SHALL HAVE EXCLUSIVE JURISDICTION FOR SUCH PURPOSE AND THE PARTIES HERETO
IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS AND IRREVOCABLY
WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH ACTION
OR PROCEEDING.  SERVICE OF PROCESS MAY BE MADE IN ANY MANNER RECOGNIZED BY SUCH
COURTS.  EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL
WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION
WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

8.7.                            COUNTERPARTS.

 

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

 

8.8.                            ATTACHMENTS AND SCHEDULES.

 

Except as otherwise provided in this Agreement, all Attachments and Schedules
referred to herein are intended to be and hereby are specifically made a part of
this Agreement. Any fact or item disclosed on any Schedule to this Agreement
shall be deemed disclosed on all other Schedules to this Agreement to which such
fact or item may reasonably apply so long as such disclosure is in sufficient
detail to enable a Party to identify the facts or items to which it applies. 
Any fact or item disclosed on any Schedule hereto shall not by reason only of
such inclusion be deemed to be material and shall not be employed as a point of
reference in determining any standard of materiality under this Agreement.

 

8.9.                            ENTIRE AGREEMENT.

 

This Agreement including the Attachments, Schedules, documents, certificates and
instruments referred to herein or therein, and any other documents that
specifically reference this Section 8.9, embody the entire agreement and
understanding of the Parties hereto in respect of the transactions contemplated
by this Agreement and shall supersede all previous oral and written and all
contemporaneous oral negotiations, commitments and understandings including,
without limitation, all letters, memoranda or other documents or communications,
whether oral,

 

36

--------------------------------------------------------------------------------

 

written or electronic, submitted or made by: (i) Exelon or its Representatives
to Zion Solutions or its Representatives; or (ii) Zion Solutions or its
Representatives to Exelon or its Representatives, in connection with the sale
process that occurred prior to the execution of this Agreement or otherwise in
connection with the negotiation and execution of this Agreement.  No
communications by or on behalf of Zion Solutions, including responses to any
questions or inquiries, whether orally, in writing or electronically, and no
information provided in any data room or any copies of any information from any
data room provided to Exelon or any other information shall be deemed to:
(i) constitute a representation, warranty, covenant, undertaking or agreement of
Zion Solutions; or (ii) be part of this Agreement.

 

8.10.                      ACKNOWLEDGMENT; INDEPENDENT DUE DILIGENCE.

 

Exelon acknowledges that Zion Solutions has not made any representation or
warranty, express or implied, as to the accuracy or completeness of any
information regarding the Put Option Assets or Put Option Liabilities not
included in this Agreement and the Schedules hereto.  Exelon further
acknowledges that: (i) Exelon, either alone or together with any individuals or
entities that Exelon has retained to advise it with respect to the transactions
contemplated by this Agreement, has knowledge and experience in transactions of
this type and in the business to which the Put Option Assets or Put Option
Liabilities relate and is therefore capable of evaluating the risks and merits
of acquiring the Put Option Assets and the Put Option Liabilities; (ii) Exelon
has relied on its own independent investigation, and has not relied on any
information or representations furnished by Zion Solutions or any Representative
of Zion Solutions (except as specifically set forth in this Agreement), in
determining to enter into this Agreement; (iii) neither Zion Solutions nor any
Representative of Zion Solutions has given any investment, legal or other advice
or rendered any opinion as to whether the purchase of the Put Option Assets or
the assumption of the Put Option Liabilities is prudent, and Exelon is not
relying on any representation or warranty by Zion Solutions or any
representative or agent of Zion Solutions except as set forth in this Agreement;
(iv) Exelon has made independently and without reliance on Zion Solutions
(except to the extent that Exelon has relied on the representations and
warranties of Zion Solutions in this Agreement) its own analysis of the Put
Option Assets, the Put Option Liabilities and of Zion Solutions for the purpose
of acquiring the Put Option Assets and assuming the Put Option Liabilities as it
considered appropriate to make its evaluation.

 

8.11.                      BULK SALES LAWS.

 

Exelon acknowledges that, notwithstanding anything in this Agreement to the
contrary, Zion Solutions will not comply with the provision of the bulk sales
laws of any jurisdiction in connection with the transactions contemplated by
this Agreement.  Exelon hereby waives compliance by Zion Solutions with the
provisions of the bulk sales laws of all applicable jurisdictions.

 

8.12.                      NO JOINT VENTURE.

 

Nothing in this Agreement creates or is intended to create an association,
trust, partnership, joint venture or other entity or similar legal relationship
among the Parties, or impose a trust, partnership or fiduciary duty, obligation,
or liability on or with respect to the

 

37

--------------------------------------------------------------------------------

 

Parties.  Except as expressly provided herein, neither Party is or shall act as
or be the agent or representative of the other Party.

 

8.13.                      CHANGE IN LAW.

 

If and to the extent that any Laws or regulations that govern any aspect of this
Agreement shall change, so as to make any aspect of this transaction unlawful,
then the Parties agree to make such modifications to this Agreement as may be
reasonably necessary for this Agreement to accommodate any such legal or
regulatory changes, without materially changing the overall benefits or
consideration expected hereunder by any Party.

 

8.14.                      SEVERABILITY.

 

Any term or provision of this Agreement that is held invalid or unenforceable in
any situation shall not affect the validity or enforceability of the remaining
terms and provisions hereof or the validity or enforceability of the offending
term or provision in any other situation; provided, however, that the remaining
terms and provisions of this Agreement may be enforced only to the extent that
such enforcement in the absence of any invalid terms and provisions would not
result in: (i) deprivation of a Party of a material aspect of its original
bargain upon execution of this Agreement; (ii) unjust enrichment of a Party; or
(iii) any other manifestly unfair or inequitable result.

 

8.15.                      SPECIFIC PERFORMANCE.

 

Each Party acknowledges and agrees that the other Party would be damaged
irreparably in the event any of the provisions of this Agreement are not
performed in accordance with their specific terms or otherwise are breached. 
Accordingly, each Party agrees that the other Party shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in addition to any other remedy to which it may be entitled,
at law or in equity.

 

[Signatures appear on the following page]

 

38

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their
respective duly authorized officers as of the date first above written.

 

 

 

ZIONSOLUTIONS, LLC

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

 

 

 

EXELON GENERATION COMPANY, LLC

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

39

--------------------------------------------------------------------------------

 

ATTACHMENTS

 

40

--------------------------------------------------------------------------------

 

ATTACHMENT D-1

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are
hereby acknowledged, and pursuant to the Put Option Agreement dated as of
                , 200    (the “Agreement”) by and between EXELON GENERATION
COMPANY, LLC, a Pennsylvania limited liability company (“Exelon”), and
ZIONSOLUTIONS, LLC, a Delaware limited liability company (“Zion Solutions”),
Zion Solutions, intending to be legally bound, hereby assigns and delegates to
Exelon, and Exelon, intending to be legally bound, hereby assumes and agrees to
pay, perform, and otherwise discharge, when due, all of the Put Option
Liabilities.

 

Terms used and not defined herein have the meanings given to them in the
Agreement.  Nothing herein is intended to augment, limit or supersede in any way
the representations, warranties or covenants of Zion Solutions or Exelon set
forth in the Agreement.

 

Notwithstanding anything to the contrary contained in this Assignment and
Assumption Agreement, the Put Option Liabilities do not include, and Zion
Solutions does not hereby assign or delegate to Exelon, and Exelon does not
hereby agree to pay, perform, or otherwise discharge, any Excluded Liabilities.

 

IN WITNESS WHEREOF, Zion Solutions and Exelon have caused this Assignment and
Assumption Agreement to be executed this          day of                     
200  .

 

 

ZIONSOLUTIONS LLC

 

 

 

 

 

By:

 

 

Title:

 

 

 

 

 

EXELON GENERATION COMPANY, LLC

 

 

 

By:

 

 

Title:

 

41

--------------------------------------------------------------------------------

 

ATTACHMENT D-2

 

BILL OF SALE

 

FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are
hereby acknowledged, and pursuant to the Put Option Agreement dated as of
                  , 200   (the “Agreement”) by and between EXELON GENERATION
COMPANY, LLC, a Pennsylvania limited liability company (“Exelon”), and
ZIONSOLUTIONS, LLC, a Delaware limited liability company (“Zion Solutions”), and
intending to be legally bound hereby, Zion Solutions does hereby unconditionally
and irrevocably sell, convey, grant, assign and transfer to Exelon, its
successors and assigns, all of the Zion Solutions’ right, title and interest in
and to the Put Option Assets.

 

Terms used and not defined herein have the meanings given to them in the
Agreement.  Nothing herein is intended to augment, limit or supersede in any way
the representations and warranties of Zion Solutions set forth in the Agreement.

 

Notwithstanding anything to the contrary contained in this Bill of Sale, the Put
Option Assets do not include, and Zion Solutions does not hereby sell, convey,
assign or transfer to Exelon, any of Zion Solutions’ right, title or interest in
or to any properties other than the Put Option Assets.

 

IN WITNESS WHEREOF, Zion Solutions has caused this Bill of Sale to be executed
this          day of                      200  .

 

 

 

 

ZIONSOLUTIONS, LLC

 

 

 

 

 

 

 

 

By:

 

 

 

Title:

 

 

 

 

 

 

ACCEPTED AND AGREED:

 

 

 

 

 

EXELON GENERATION COMPANY, LLC

 

 

 

 

 

 

By:

 

 

 

Title:

 

 

 

42

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ATTACHMENT D-3

 

PUT OPTION EXERCISE NOTICE

 

[Date]

 

Exelon Generation Company, LLC

4300 Winfield Road

Warrenville, Illinois 60555

Attention:  Thomas O’Neill

 

Ladies and Gentlemen:

 

Reference is made to the Put Option Agreement, dated as of                 
      , 200   (the “Agreement”), by and between Exelon Generation Company, LLC,
a Pennsylvania limited liability company (“Exelon”), and ZionSolutions, LLC, a
Delaware limited liability company (“Zion Solutions”).  Terms used and not
defined herein have the meanings given to them in the Agreement.

 

This letter is the Put Option Exercise Notice contemplated by Section 2.1 of the
Agreement, which constitutes the election by Zion Solutions to exercise the Put
Option.  The exercise of the Put Option is unconditional and irrevocable,
excepting only conditions to the Put Option Closing set forth in the Agreement.

 

 

 

 

ZIONSOLUTIONS, LLC

 

 

 

By:

 

 

Title:

 

 

Copy to:

 

Exelon Generation Company, LLC

 

4300 Winfield Road

 

Warrenville, Illinois 60555

 

Attention: Bradley Fewell

 

 

43

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EXHIBIT E

 

 

ZION NUCLEAR POWER STATION, UNITS 1 AND 2

PLEDGE AGREEMENT

 

made by

ENERGYSOLUTIONS, LLC

in favor of

 

EXELON GENERATION COMPANY, LLC

 

 

                       , 2007

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

1.                            DEFINITIONS

 

2

 

 

 

 

 

1.1.

 

DEFINITIONS

 

2

1.2.

 

CERTAIN INTERPRETIVE MATTERS

 

5

 

 

 

 

 

2.                            PLEDGE

 

6

 

 

 

 

 

2.1.

 

GRANT OF SECURITY INTEREST

 

6

 

 

 

 

 

3.                            REPRESENTATIONS AND WARRANTIES

 

6

 

 

 

 

 

3.1.

 

TITLE; NO OTHER ENCUMBRANCES

 

6

3.2.

 

PERFECTED FIRST PRIORITY ENCUMBRANCES

 

6

3.3.

 

CHIEF EXECUTIVE OFFICE

 

7

3.4.

 

INVESTMENT PROPERTY

 

7

 

 

 

 

 

4.                            COVENANTS

 

7

 

 

 

 

 

4.1.

 

MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER DOCUMENTATION

 

7

4.2.

 

CHANGES IN LOCATIONS, NAME, ETC.

 

7

 

 

 

 

 

5.                            REMEDIAL PROVISIONS

 

8

 

 

 

 

 

5.1.

 

RIGHTS UPON EVENT OF DEFAULT

 

8

5.2.

 

[PROCEEDS TO BE TURNED OVER TO PLEDGEE

 

9

5.3.

 

APPLICATION OF PROCEEDS

 

9

5.4.

 

CODE AND OTHER REMEDIES

 

9

5.5.

 

RELEASE OF PROCEEDS

 

9

 

 

 

 

 

6.                            ADMINISTRATION OF COLLATERAL

 

10

 

 

 

 

 

6.1.

 

PLEDGEE’S APPOINTMENT AS ATTORNEY-IN-FACT, ETC.

 

10

6.2.

 

DUTY OF PLEDGEE

 

11

6.3.

 

FINANCING STATEMENTS

 

11

 

 

 

 

 

7.                            MISCELLANEOUS PROVISIONS

 

12

 

 

 

 

 

7.1.

 

AMENDMENT AND MODIFICATION

 

12

7.2.

 

WAIVER OF COMPLIANCE; CONSENTS

 

12

7.3.

 

NOTICES

 

12

7.4.

 

ASSIGNMENT

 

13

7.5.

 

GOVERNING LAW

 

13

7.6.

 

COUNTERPARTS

 

14

7.7.

 

ENTIRE AGREEMENT

 

14

7.8.

 

CHANGE IN LAW

 

14

7.9.

 

SEVERABILITY

 

14

 

 

 

 

 

SCHEDULES

 

 

 

 

 

 

 

 

 

Schedule 3.1-

 

FILINGS AND OTHER ACTIONS REQUIRED TO PERFECT SECURITY INTERESTS

 

 

 

 

 

 

 

Schedule 3.2-

 

LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE

 

 

 

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PLEDGE AGREEMENT

 

This PLEDGE AGREEMENT, dated as of                        , 200   (the
“Agreement”) made by ENERGYSOLUTIONS, LLC (“Pledgor”), a Utah limited liability
company, in favor of EXELON GENERATION COMPANY, LLC (“Pledgee”) a Pennsylvania
limited liability company.  Pledgee and Pledgor are referred to individually as
a “Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, the Parties, along with ZionSolutions, LLC (“Zion Solutions”) and
EnergySolutions, Inc. (“Guarantor”), have entered into that Asset Sale
Agreement, dated as of   December 11, 2007 (the “Asset Sale Agreement”),
pursuant to which Pledgee agreed, subject to the terms and conditions of the
Asset Sale Agreement, to, among other things, sell, assign, convey, transfer and
deliver all of its right, title and interest to the Zion Assets to Zion
Solutions;

 

WHEREAS, Pledgee and Zion Solutions have entered into that Lease Agreement,
dated as of                     , 200   (the “Lease Agreement”) pursuant to
which Pledgee has agreed to Lease the Premises (as defined in the Lease
Agreement) to Zion Solutions;

 

WHEREAS, Pledgee and Zion Solutions have entered into that Put Option Agreement,
dated as of                     , 200   (the “Put Option Agreement”) pursuant to
which Pledgee has agreed to grant Zion Solutions the Put Option (as defined in
the Put Option Agreement);

 

WHEREAS, Pledgor has entered into that Performance Guarantee dated as of
December 11, 2007 (the “Performance Guarantee”) pursuant to which Pledgor has
agreed to guarantee certain obligations of Zion Solutions under the Asset Sale
Agreement, the Lease Agreement, the Assignment and Assumption Agreement, and the
Put Option Agreement;

 

WHEREAS, the Parties, along with Zion Solutions and Guarantor have entered into
that Credit Support Agreement, dated as of                     , 200   (the
“Credit Support Agreement”) pursuant to which Pledgor or Guarantor will provide
Pledgee with an irrevocable letter of credit, the proceeds of which shall be
payable only to the Buyer Backup NDT, to support certain of the obligations of
Zion Solutions and Pledgor under the Asset Sale Agreement, the Lease Agreement
and the Performance Guarantee;

 

WHEREAS, Zion Solutions is a wholly-owned subsidiary of Pledgor; and

 

WHEREAS, Pledgor has agreed to pledge 100% of its equity interests in Zion
Solutions as collateral for its obligations under the Performance Guarantee;

 

NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements hereinafter set forth, and intending to be legally
bound hereby, the Parties agree as follows:

 

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1.                                      DEFINITIONS

 

1.1.                            DEFINITIONS.

 

As used in this Agreement, the following terms have the meanings specified in
this Section 1.1.  All terms not otherwise defined herein shall have the meaning
ascribed to them in the Asset Sale Agreement.

 

(1)                                 “Affiliate” has the meaning set forth in the
Asset Sale Agreement.

 

(2)                                 “Agreement” means this Pledge Agreement
together with the Schedules hereto, as the same may be from time to time
amended.

 

(3)                                 “Asset Sale Agreement” has the meaning set
forth in the recitals.

 

(4)                                 “Bankruptcy Event” has the meaning set forth
in the Credit Support Agreement.

 

(5)                                 “Buyer Backup NDT” has the meaning set forth
in the Asset Sale Agreement.

 

(6)                                 “Clive, Utah Facility” has the meaning set
forth in the Asset Sale Agreement.

 

(7)                                 “Collateral” has the meaning set forth in
Section 2.1.

 

(8)                                 “Collateral Account” is defined in
Section 5.2.

 

(9)                                 “Credit Support Agreement” has the meaning
set forth in the recitals.

 

(10)                          “Encumbrances” has the meaning set forth in the
Asset Sale Agreement.

 

(11)                          “Event of Default” means:

 

(i)                                     any Material Letter of Credit Default
shall occur and be continuing, following the expiration of any applicable cure
period described in with section 3.2 of the Credit Support Agreement;

 

(ii)                                  any action by Pledgor reasonably likely to
result in the sale, liquidation, or transfer of the Clive, Utah Facility to a
Person which is not an Affiliate of Pledgor;

 

(iii)                               any action by Pledgor reasonably likely to
result in the sale, liquidation or transfer of its assets, together with
distribution to its shareholders of proceeds received from such transaction, in
an amount equal to or in excess of twenty percent (20%) of its consolidated book
value or fair value at the time of the transaction without the prior written
consent of Pledgee, such consent not to be unreasonably withheld;

 

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(iv)                              either (A) at any time during any calendar
year, Pledgor’s Net Worth declines from Pledgor’s Net Worth as of the close of
the immediately preceding calendar year by an amount equal to the greater of
$30,000,000 or 20% of Pledgor’s Net Worth as of the close of the immediately
preceding calendar year, without giving effect to any increase or decrease in
Intangible Assets subsequent to the close of the immediately preceding calendar
year, or (B) at any time Pledgor’s Net Worth is less than 80% of Pledgor’s Net
Worth as of the close of the calendar quarter ended immediately prior to the
date of this Agreement,  without giving effect to any increase or decrease in
Intangible Assets subsequent to the end of such calendar quarter;

 

(v)                                 an event of Force Majeure or Schedule
Extension Condition shall continue without being cured for a period of more than
seven hundred thirty (730) consecutive days, unless otherwise agreed by the
Parties, or any events of Force Majeure or Schedule Extension Conditions shall
cumulatively exceed one thousand ninety five (1095) days (whether or not
consecutive) in any period of one thousand eight hundred twenty-six (1,826)
consecutive days, except to the extent any such event of Force Majeure or
Schedule Extension Condition is attributable to events or conditions described
in clause (a) or (g) of section 1.42 of the Lease Agreement or is otherwise
attributable to acts or omissions of Pledgee or its Affiliates other than the
enforcement of its rights under any agreement with Pledgor or Zion Solutions;

 

(vi)                              the failure of Zion Solutions to defer
receivables as required upon failure to meet a Site Restoration Milestone in
accordance with section 6.3 of the Lease Agreement;

 

(vii)                           Pledgor or Zion Solutions shall fail to perform
any other material term, covenant or agreement contained herein or the Credit
Support Agreement, the Performance Guarantee, or the Lease Agreement on its part
to be performed or observed if such failure shall remain unremedied for ten
(10) days after which written notice of such failure is given by Pledgee to the
Pledgor or Zion Solutions; or

 

(viii)  Pledgor shall fail to make capital contributions or subordinated loans
to Zion Solutions when, as and to the extent required under section 6.21.10 of
the Asset Sale Agreement, Pledgor or Zion Solutions shall fail to defer
receivables when, as and to the extent required under section 6.21.6 of the
Asset Sale Agreement or repeatedly fail to comply in any material respect with
section 6.21 of the Asset Sale Agreement, including but not limited to
submission of a materially inaccurate Annual Status Report, Disbursement
Certification or Deficiency Certification (each as defined in the Asset Sale
Agreement).

 

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(12)                          “Force Majeure” has the meaning set forth in the
Lease Agreement.

 

(13)                          “Intangible Assets” means all assets which would
be classified as intangible assets under generally accepted accounting
principles, including without limitation, goodwill, licenses, patents,
trademarks, trade names, copyrights, capitalized software and organizational
costs, licenses and franchises.

 

(14)                          “Law” has the meaning set forth in the Asset Sale
Agreement.

 

(15)                          “Lease Agreement” has the meaning set forth in the
recitals.

 

(16)                          “Material Letter of Credit Default” has the
meaning set forth in the Credit Support Agreement.

 

(17)                          “Net Worth” means the excess of the Pledgor’s
consolidated total assets (including Intangible Assets) over its consolidated
total liabilities, determined in accordance with generally accepted accounting
principles applied on a consistent basis from period to period.

 

(18)                          “Obligations” means all obligations of the Pledgor
under the Performance Guarantee.

 

(19)                          “Party” (and the corresponding term “Parties”) has
the meaning set forth in the preamble.

 

(20)                          “Performance Guarantee” has the meaning set forth
in the recitals.

 

(21)                          “Person” has the meaning set forth in the Asset
Sale Agreement.

 

(22)                          “Pledged LLC Interests” has the meaning set forth
in Section 2.1.1.

 

(23)                          “Pledgee” has the meaning set forth in the
preamble.

 

(24)                          “Pledgor” has the meaning set forth in the
preamble.

 

(25)                          “Proceeds” means “proceeds” as such term is
defined in section 9-102(64) of the Uniform Commercial Code.

 

(26)                          “Put Option Agreement” has the meaning set forth
in the recitals.

 

(27)                          “Schedule Extension Conditions” has the meaning
set forth in the Lease.

 

(28)                          “Uniform Commercial Code” means any of a number of
uniform acts promulgated to harmonize the law of commercial transactions in the
United States.

 

(29)                          “Zion Solutions” has the meaning set forth in the
recitals.

 

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1.2.                            CERTAIN INTERPRETIVE MATTERS.

 

1.2.1.                  UNLESS OTHERWISE REQUIRED BY THE CONTEXT IN WHICH ANY
TERM APPEARS:

 

(1)                                 Capitalized terms used in this Agreement
shall have the meanings specified in this Article.

 

(2)                                 The singular shall include the plural, the
plural shall include the singular, and the masculine shall include the feminine
and neuter.

 

(3)                                 References to “Articles”, “Sections” or
“Schedules” shall be to articles, sections or schedules of or to this Agreement,
and references to “paragraphs” or “clauses” shall be to separate paragraphs or
clauses of the section or subsection in which the reference occurs.

 

(4)                                 The words “herein”, “hereof” and “hereunder”
shall refer to this Agreement as a whole and not to any particular section or
subsection of this Agreement; and the words “include,” “includes” or “including”
shall mean “including, but not limited to.”

 

(5)                                 The term “day” shall mean a calendar day,
commencing at 12:01 a.m. (Central Time).  The term “week” shall mean any seven
consecutive day period commencing on a Sunday, and the term “month” shall mean a
calendar month; provided, however, that when a period measured in months
commences on a date other than the first day of a month, the period shall run
from the date on which it starts to the corresponding date in the next month
and, as appropriate, to succeeding months thereafter.  Whenever an event is to
be performed or a payment is to be made by a particular date and the date in
question falls on a day which is not a Business Day, the event shall be
performed, or the payment shall be made, on the next succeeding Business Day;
provided, however, that all calculations shall be made regardless of whether any
given day is a Business Day and whether or not any given period ends on a
Business Day.

 

(6)                                 All references to a particular entity shall
include such entity’s permitted successors and permitted assigns unless
otherwise specifically provided herein.

 

(7)                                 All references herein to any Law or to any
contract or other agreement shall be to such Law, contract or other agreement as
amended, supplemented or modified from time to time unless otherwise
specifically provided herein.

 

1.2.2.                  THE TITLES OF THE ARTICLES, SECTIONS AND SCHEDULES
HEREIN HAVE BEEN INSERTED AS A MATTER OF CONVENIENCE OF REFERENCE ONLY, AND
SHALL NOT CONTROL OR AFFECT THE MEANING OR CONSTRUCTION OF ANY OF THE TERMS OR
PROVISIONS HEREOF.

 

1.2.3.                  THIS AGREEMENT WAS NEGOTIATED AND PREPARED BY ALL
PARTIES WITH ADVICE OF COUNSEL TO THE EXTENT DEEMED NECESSARY BY EACH PARTY; THE
PARTIES HAVE AGREED TO THE WORDING OF THIS AGREEMENT; AND NONE OF THE PROVISIONS
HEREOF SHALL BE CONSTRUED AGAINST ONE PARTY ON THE GROUND THAT SUCH PARTY IS THE
AUTHOR OF THIS AGREEMENT OR ANY PART HEREOF.

 

1.2.4.                  THE SCHEDULES HERETO ARE INCORPORATED IN AND ARE
INTENDED TO BE A PART OF THIS AGREEMENT; PROVIDED, HOWEVER, THAT IN THE EVENT OF
A CONFLICT BETWEEN THE TERMS

 

5

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OF ANY SCHEDULE AND THE TERMS OF THIS AGREEMENT, THE TERMS OF THIS AGREEMENT
SHALL TAKE PRECEDENCE.

 

2.                                      PLEDGE.

 

2.1.                            Grant of Security Interest.  As collateral
security for the prompt and complete payment and performance when due (whether
at stated maturity, by acceleration or otherwise) by the Pledgor of all of the
Obligations, the Pledgor hereby pledges and grants to the Pledgee a pledge of
and a first priority continuing security interest in, all of the Pledgor’s
right, title and interest in, to and under the following property, whether now
owned by the Pledgor or hereafter acquired and whether now existing or hereafter
coming into existence (all being collectively referred to herein as the
“Collateral”):

 

2.1.1.                  ALL LIMITED LIABILITY COMPANY INTERESTS IN ZION
SOLUTIONS (THE “PLEDGED LLC INTERESTS”), THE CERTIFICATES REPRESENTING THE
PLEDGED LLC INTERESTS (IF ANY), ANY INTEREST OF THE PLEDGOR IN THE BOOKS AND
RECORDS OF ZION SOLUTIONS, AND ALL DIVIDENDS, INSTRUMENTS, CHATTEL PAPER,
SECURITIES, WARRANTS, OPTIONS AND OTHER RIGHTS, PROPERTY OR PROCEEDS AND
PRODUCTS FROM TIME TO TIME RECEIVED, RECEIVABLE OR OTHERWISE DISTRIBUTED IN
RESPECT OF OR IN EXCHANGE FOR ANY OR ALL OF THE PLEDGED LLC INTEREST NOW OR
HEREAFTER OWNED BY THE PLEDGOR, PROVIDED THAT ANY DIVIDENDS MADE IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 5.1.1 SHALL BE EXCLUDED FROM THE COLLATERAL; AND

 

2.1.2.                  ALL PROCEEDS OF AND TO ANY OF THE PROPERTY OF THE
PLEDGOR DESCRIBED IN SECTION 2.1.1.

 

3.                                      REPRESENTATIONS AND WARRANTIES.

 

3.1.                            Title; No Other Encumbrances.  Except for the
security interest granted to the Pledgee pursuant to this Agreement, the Pledgor
owns each item of the Collateral free and clear of any and all Encumbrances or
claims of others.  No financing statement or other public notice with respect to
all or any part of the Collateral is on file or of record in any public office,
except such as have been filed in favor of the Pledgee pursuant to this
Agreement.

 

3.2.                            Perfected First Priority Encumbrances.  The
security interests granted pursuant to this Agreement upon completion of the
filings and other actions specified on Schedule 3.2 (which, in the case of all
filings and other documents referred to on such Schedule 3.2, have been
delivered to the Pledgee in completed and duly executed form) will:
(i) constitute valid and enforceable perfected security interests in all of the
Collateral in favor of the Pledgee as collateral security for the Obligations to
the extent that a security interest may be perfected by filing and/or the other
actions specified on Schedule 3.2 and (ii) are prior to all other Encumbrances
on the Collateral in existence on the date hereof except for Encumbrances which
have priority over the Encumbrances on the Collateral by operation of law.

 

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3.3.                            Chief Executive Office. On the date hereof, the
Pledgor’s jurisdiction of organization and the location of the Pledgor’s chief
executive office or sole place of business are specified on Schedule 3.3.

 

3.4.                            Investment Property.

 

3.4.1.                  THE PLEDGED LLC INTERESTS PLEDGED BY THE PLEDGOR
HEREUNDER CONSTITUTE ALL THE ISSUED AND OUTSTANDING LIMITED LIABILITY COMPANY
INTERESTS OF ZION SOLUTIONS.

 

3.4.2.                  THE PLEDGOR IS THE RECORD AND BENEFICIAL OWNER OF, AND
HAS GOOD AND MARKETABLE TITLE TO, THE COLLATERAL PLEDGED BY IT HEREUNDER, FREE
OF ANY AND ALL ENCUMBRANCES OR OPTIONS IN FAVOR OF, OR CLAIMS OF, ANY OTHER
PERSON, EXCEPT THE SECURITY INTEREST CREATED BY THIS AGREEMENT.

 

4.                                      COVENANTS.

 

4.1.                            Maintenance of Perfected Security Interest;
Further Documentation.

 

4.1.1.                  THE PLEDGOR SHALL (I) DELIVER TO PLEDGEE ALL
CERTIFICATES, IF ANY, EVIDENCING THE PLEDGED LLC INTERESTS, TOGETHER WITH AN
UNDATED INSTRUMENT OF ASSIGNMENT FOR SUCH CERTIFICATE DULY EXECUTED IN BLANK BY
THE PLEDGOR AND APPOINTING PLEDGEE AS PLEDGOR’S AGENT AND ATTORNEY IN FACT WITH
POWER TO TRANSFER THE SAME, AND (II) TAKE ANY AND ALL ACTIONS THAT MAY BE
NECESSARY OR, IN THE REASONABLE DISCRETION OF THE PLEDGEE, PRUDENT TO MAINTAIN
THE SECURITY INTEREST CREATED BY THIS AGREEMENT AS A PERFECTED SECURITY INTEREST
HAVING AT LEAST THE PRIORITY DESCRIBED IN SECTION 3.2 AND SHALL DEFEND SUCH
SECURITY INTEREST AGAINST THE CLAIMS AND DEMANDS OF ALL PERSONS WHOMSOEVER.

 

4.1.2.                  AT ANY TIME AND FROM TIME TO TIME, UPON THE WRITTEN
REQUEST OF THE PLEDGEE, AND AT THE SOLE EXPENSE OF THE PLEDGOR, THE PLEDGOR WILL
PROMPTLY AND DULY EXECUTE AND DELIVER, AND HAVE RECORDED, SUCH FURTHER
INSTRUMENTS AND DOCUMENTS AND TAKE SUCH FURTHER ACTIONS AS THE PLEDGEE MAY
REASONABLY REQUEST FOR THE PURPOSE OF OBTAINING OR PRESERVING THE FULL BENEFITS
OF THIS AGREEMENT AND OF THE RIGHTS AND POWERS HEREIN GRANTED, INCLUDING:
(I) FILING ANY FINANCING OR CONTINUATION STATEMENTS UNDER THE UNIFORM COMMERCIAL
CODE (OR OTHER SIMILAR LAWS) IN EFFECT IN ANY JURISDICTION WITH RESPECT TO THE
SECURITY INTERESTS CREATED HEREBY AND (II) IN THE CASE OF THE PLEDGED LLC
INTERESTS AND ANY OTHER RELEVANT COLLATERAL, TAKING ANY ACTIONS NECESSARY TO
ENABLE THE PLEDGEE TO OBTAIN “CONTROL” (WITHIN THE MEANING OF THE APPLICABLE
UNIFORM COMMERCIAL CODE) WITH RESPECT THERETO.

 

4.2.                            Changes in Locations, Name, etc.  The Pledgor
will not, except upon thirty (30) days’ prior written notice to the Pledgee and
delivery to the Pledgee of all additional executed financing statements and
other documents reasonably requested by the Pledgee to maintain the validity,
perfection and priority of the security interests provided for herein:

 

4.2.1.                  CHANGE ITS JURISDICTION OF ORGANIZATION; OR

 

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4.2.2.                  CHANGE ITS NAME, IDENTITY OR CORPORATE STRUCTURE TO SUCH
AN EXTENT THAT ANY FINANCING STATEMENT FILED BY THE PLEDGEE IN CONNECTION WITH
THIS AGREEMENT WOULD BECOME MISLEADING.

 

4.3  OWNERSHIP OF ZION SOLUTIONS.  PLEDGOR SHALL OWN FREE AND CLEAR OF ALL
ENCUMBRANCES, 100% OF THE ISSUED AND OUTSTANDING EQUITY INTERESTS OF ZION
SOLUTIONS, SUBJECT ONLY TO THE PLEDGE OF SUCH INTEREST IN FAVOR OF PLEDGEE
PURSUANT TO THIS AGREEMENT.

 

4.4  NOTICE OF EVENTS OF DEFAULT.  PLEDGOR SHALL GIVE WRITTEN NOTICE TO PLEDGEE
PROMPTLY, AND IN ANY EVENT WITHIN FIVE (5) BUSINESS DAYS, OF THE OCCURRENCE OF
ANY EVENT OR CONDITION THAT CONSTITUTES AN EVENT OF DEFAULT OR, BUT FOR THE
GIVING OF NOTICE, THE PASSAGE OF TIME, OR BOTH, WOULD CONSTITUTE AN EVENT OF
DEFAULT, TOGETHER WITH A STATEMENT OF PLEDGOR SETTING FORTH DETAILS OF SUCH
EVENT OR CONDITION AND THE ACTION THAT PLEDGOR PROPOSES TO TAKE WITH RESPECT
THERETO.

 

4.5  CHANGE IN CAPITAL STRUCTURE.  PLEDGOR SHALL NOT CAUSE OR PERMIT ZION
SOLUTIONS TO DISSOLVE, LIQUIDATE, RETIRE OR REDEEM ANY OF ITS MEMBER INTERESTS,
REDUCE ITS CAPITAL (OTHER THAN DISTRIBUTIONS OF EARNINGS, EXCEPT AS HEREINAFTER
PROVIDED), OR MERGE OR CONSOLIDATE WITH ANY OTHER ENTITY.

 

4.6  ISSUANCE OF ADDITIONAL SECURITIES.  PLEDGOR SHALL NOT CAUSE OR PERMIT ZION
SOLUTIONS TO ISSUE ANY ADDITIONAL OWNERSHIP OR MEMBER INTERESTS OR OTHER
SECURITIES, OPTIONS, WARRANTS, OR ANY RIGHT TO RECEIVE SAME, OR ANY RIGHT TO
RECEIVE EARNINGS, UNLESS PLEDGOR SHALL ACCEPT AND RECEIVE THE SAME AS AGENT OF
PLEDGEE, HOLD THE SAME IN TRUST FOR PLEDGEE, AND PROMPTLY DELIVER TO PLEDGEE ANY
CERTIFICATES OR PHYSICAL SECURITIES EVIDENCING THE SAME, DULY ENDORSED TO BY
PLEDGOR TO PLEDGEE, IF REQUIRED, TOGETHER WITH AN UNDATED INSTRUMENT OF
ASSIGNMENT FOR SUCH CERTIFICATE OR SECURITY DULY EXECUTED IN BLANK BY PLEDGOR
AND APPOINTING PLEDGEE AS PLEDGOR’S AGENT AND ATTORNEY IN FACT WITH POWER TO
TRANSFER THE SAME.

 

5.                                      REMEDIAL PROVISIONS.

 

5.1.                            Rights upon Event of Default.

 

5.1.1.                  UNLESS AN EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING AND THE PLEDGEE SHALL HAVE GIVEN WRITTEN NOTICE TO THE PLEDGOR OF THE
PLEDGEE’S INTENT TO EXERCISE ITS CORRESPONDING RIGHTS PURSUANT TO SECTION 5.1.2,
THE PLEDGOR SHALL BE PERMITTED TO RECEIVE ALL CASH DIVIDENDS PAID IN RESPECT OF
THE PLEDGED LLC INTERESTS AND , EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT,
TO EXERCISE ALL VOTING AND OTHER RIGHTS OF PLEDGOR AS A MEMBER OF ZION SOLUTIONS
AND HOLDER OF THE PLEDGED LLC INTERESTS AT ANY MEETING OF MEMBERS OF ZION
SOLUTIONS, IN CONNECTION WITH ANY ACTION OR MEMBERS BY WRITTEN CONSENT, OR
OTHERWISE.

 

5.1.2.                  IF AN EVENT OF DEFAULT SHALL OCCUR AND BE CONTINUING AND
THE PLEDGEE SHALL GIVE NOTICE OF ITS INTENT TO EXERCISE SUCH RIGHTS TO THE
PLEDGOR (PROVIDED THAT NO SUCH NOTICE SHALL BE REQUIRED IF AT SUCH TIME A
BANKRUPTCY EVENT HAS OCCURRED AND IS CONTINUING WITH RESPECT TO THE PLEDGOR):
(I) THE PLEDGEE SHALL HAVE THE RIGHT TO RECEIVE ANY AND ALL CASH DIVIDENDS,
DISTRIBUTIONS, PAYMENTS OR OTHER PROCEEDS PAID IN RESPECT OF THE PLEDGED LLC
INTERESTS AND MAKE APPLICATION THEREOF TO THE

 

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OBLIGATIONS IN SUCH ORDER AS THE PLEDGEE MAY DETERMINE; (II) AT THE ELECTION OF
THE PLEDGEE, ANY OR ALL OF THE PLEDGED LLC INTERESTS SHALL BE REGISTERED IN THE
NAME OF THE PLEDGEE OR ITS NOMINEE; AND (III) THE PLEDGEE OR ITS NOMINEE MAY
EXERCISE ALL VOTING, MEMBER AND OTHER RIGHTS PERTAINING TO THE PLEDGED LLC
INTERESTS AT ANY MEETING OF THE MEMBERS OF ZION SOLUTIONS, ACTION BY WRITTEN
CONSENT, OR OTHERWISE; PROVIDED, HOWEVER, THAT IN NO EVENT SHALL PLEDGEE TAKE
POSSESSION OF OR EXERCISE CONTROL OVER THE PLEDGED LLC INTERESTS OR ANY NRC
LICENSED FACILITY UNTIL FIRST HAVING RECEIVED ISSUANCE OF A LICENSE BY NRC
AUTHORIZING SUCH POSSESSION OR NRC’S PRIOR WRITTEN CONSENT TO THE TRANSFER OF
CONTROL OF THE EXISTING NRC LICENSES.

 

5.2.                            Proceeds to be Turned Over To Pledgee.  If an
Event of Default shall occur and be continuing, all Proceeds received by the
Pledgor consisting of cash, checks and other near-cash items shall be held by
the Pledgor in trust for the Pledgee, segregated from other funds of the
Pledgor, and shall, forthwith upon receipt by the Pledgor, be turned over to the
Pledgee in the exact form received by the Pledgor (duly indorsed by the Pledgor
to the Pledgee, if required).  All Proceeds received by the Pledgee hereunder
shall be held by the Pledgee in a collateral account (the “Collateral Account”)
maintained under its sole dominion and control.

 

5.3.                            Application of Proceeds.  If an Event of Default
shall have occurred and be continuing, at any time thereafter at the Pledgee’s
election, the Pledgee may apply all or any part of Proceeds held in the
Collateral Account in payment of expenses of Decommissioning of the Zion Station
and other amounts due to Pledgee in respect of the Obligations, and any part of
such funds which the Pledgee elects not so to apply and deems not required as
collateral security for any Obligations shall be paid over from time to time by
the Pledgee to the Pledgor or to whomsoever may be lawfully entitled to receive
the same.  Any balance of such Proceeds remaining after the Obligations shall
have been paid in full shall be paid over to the Pledgor or to whomsoever may be
lawfully entitled to receive the same.  It is acknowledged and agreed that sums
on deposit in the Collateral Account shall be held for the benefit of the
Pledgee.

 

5.4.                            Code and Other Remedies.  If an Event of Default
shall occur and be continuing, the Pledgee may exercise, in addition to all
other rights and remedies granted to it in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the Obligations, all
rights and remedies of a secured party under the Uniform Commercial Code or any
other applicable Law; provided, however, that in no event shall Pledgee take
possession of or exercise control over the Pledged LLC Interests or any NRC
licensed facility until first having received issuance of a license by NRC
authorizing such possession or NRC’s prior written consent to the transfer of
control of the existing NRC licenses.

 

5.5.                            Release of Proceeds.  Any amounts received by
the Pledgee during the continuance of an Event of Default and not applied
against the Obligations or expenses of Decommissioning of Zion Station shall be
paid over to the Pledgor.

 

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6.                                      ADMINISTRATION OF COLLATERAL.

 

6.1.                            Pledgee’s Appointment as Attorney-in-Fact, etc.

 

6.1.1.                  THE PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS
THE PLEDGEE AND ANY OFFICER OR AGENT THEREOF, WITH FULL POWER OF SUBSTITUTION,
AS ITS TRUE AND LAWFUL ATTORNEY-IN-FACT WITH FULL IRREVOCABLE POWER AND
AUTHORITY IN THE PLACE AND STEAD OF THE PLEDGOR AND IN THE NAME OF THE PLEDGOR
OR IN ITS OWN NAME, FOR THE PURPOSE OF CARRYING OUT THE TERMS OF THIS AGREEMENT,
TO TAKE ANY AND ALL APPROPRIATE ACTION AND TO EXECUTE ANY AND ALL DOCUMENTS AND
INSTRUMENTS WHICH MAY BE NECESSARY OR DESIRABLE TO ACCOMPLISH THE PURPOSES OF
THIS AGREEMENT, AND, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE
PLEDGOR HEREBY GIVES THE PLEDGEE THE POWER AND RIGHT, ON BEHALF OF THE PLEDGOR,
WITHOUT NOTICE TO OR ASSENT BY THE PLEDGOR, TO DO ANY OR ALL OF THE FOLLOWING:

 

6.1.1.1           IN THE NAME OF THE PLEDGOR OR ITS OWN NAME, OR OTHERWISE, FILE
ANY CLAIM OR TAKE ANY OTHER ACTION OR PROCEEDING IN ANY COURT OF LAW OR EQUITY
OR OTHERWISE DEEMED APPROPRIATE BY THE PLEDGEE FOR THE PURPOSE OF COLLECTING ANY
AND ALL SUCH MONEYS DUE WITH RESPECT TO ANY OTHER COLLATERAL WHENEVER PAYABLE;

 

6.1.1.2           PAY OR DISCHARGE TAXES AND ENCUMBRANCES LEVIED OR PLACED ON OR
THREATENED AGAINST THE COLLATERAL, EFFECT ANY REPAIRS OR ANY INSURANCE CALLED
FOR BY THE TERMS OF THIS AGREEMENT AND PAY ALL OR ANY PART OF THE PREMIUMS
THEREFOR AND THE COSTS THEREOF;

 

6.1.1.3           (I) DIRECT ANY PARTY LIABLE FOR ANY PAYMENT UNDER ANY OF THE
COLLATERAL TO MAKE PAYMENT OF ANY AND ALL MONEYS DUE OR TO BECOME DUE THEREUNDER
DIRECTLY TO THE PLEDGEE OR AS THE PLEDGEE SHALL DIRECT; (II) ASK OR DEMAND FOR,
COLLECT, AND RECEIVE PAYMENT OF AND RECEIPT FOR, ANY AND ALL MONEYS, CLAIMS AND
OTHER AMOUNTS DUE OR TO BECOME DUE AT ANY TIME IN RESPECT OF OR ARISING OUT OF
ANY COLLATERAL; (III) COMMENCE AND PROSECUTE ANY SUITS, ACTIONS OR PROCEEDINGS
AT LAW OR IN EQUITY IN ANY COURT OF COMPETENT JURISDICTION TO COLLECT THE
COLLATERAL OR ANY PORTION THEREOF AND TO ENFORCE ANY OTHER RIGHT IN RESPECT OF
ANY COLLATERAL; (IV) DEFEND ANY SUIT, ACTION OR PROCEEDING BROUGHT AGAINST THE
PLEDGOR WITH RESPECT TO ANY COLLATERAL; (V) SETTLE, COMPROMISE OR ADJUST ANY
SUCH SUIT, ACTION OR PROCEEDING AND, IN CONNECTION THEREWITH, GIVE SUCH
DISCHARGES OR RELEASES AS THE PLEDGEE MAY DEEM APPROPRIATE; AND (VI) GENERALLY,
SELL, TRANSFER, PLEDGE AND MAKE ANY AGREEMENT WITH RESPECT TO OR OTHERWISE DEAL
WITH ANY OF THE COLLATERAL AS FULLY AND COMPLETELY AS THOUGH THE PLEDGEE WERE
THE ABSOLUTE OWNER THEREOF FOR ALL PURPOSES, AND DO, AT THE PLEDGEE’S OPTION AND
THE PLEDGOR’S EXPENSE, AT ANY TIME, OR FROM TIME TO TIME, ALL ACTS AND THINGS
WHICH THE PLEDGEE DEEMS NECESSARY TO PROTECT, PRESERVE OR REALIZE UPON THE
COLLATERAL AND THE PLEDGEE’S SECURITY INTERESTS THEREIN AND TO EFFECT THE INTENT
OF THIS AGREEMENT, ALL AS FULLY AND EFFECTIVELY AS THE PLEDGOR MIGHT DO; AND

 

10

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6.1.1.4           FOLLOWING AN EVENT OF DEFAULT, TAKE ANY ACTION UNDER THE
LIMITED LIABILITY COMPANY AGREEMENT UNDER WHICH THE PLEDGED INTERESTS ARE ISSUED
THAT MAY BE TAKEN BY THE HOLDER OF THE PLEDGED INTERESTS OR THE HOLDER OF A
PROXY OR POWER OF ATTORNEY WITH RESPECT TO THE PLEDGED INTERESTS.

 

Anything in this Section 6.1.1 to the contrary notwithstanding, the Pledgee
agrees that it will not exercise any rights under the power of attorney provided
for in this Section 6.1.1 (a) unless an Event of Default shall have occurred and
be continuing; or (b) other than as necessary to seek authorization from NRC for
Pledgee to take possession of or exercise control over the Pledged LLC Interests
or its NRC licensed facility, until first having received issuance of a license
by NRC authorizing such possession or NRC’s prior written consent to the
transfer of control of the existing NRC licenses.

 

6.1.2.                  IF THE PLEDGOR FAILS TO PERFORM OR COMPLY WITH ANY OF
ITS AGREEMENTS CONTAINED HEREIN, THE PLEDGEE, AT ITS OPTION, BUT WITHOUT ANY
OBLIGATION SO TO DO, MAY PERFORM OR COMPLY, OR OTHERWISE CAUSE PERFORMANCE OR
COMPLIANCE, WITH SUCH AGREEMENT.

 

6.1.3.                  THE PLEDGOR HEREBY RATIFIES ALL THAT SAID ATTORNEYS
SHALL LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.  ALL POWERS,
AUTHORIZATIONS AND AGENCIES CONTAINED IN THIS AGREEMENT ARE COUPLED WITH AN
INTEREST AND ARE IRREVOCABLE UNTIL THIS AGREEMENT IS TERMINATED AND THE SECURITY
INTERESTS CREATED HEREBY ARE RELEASED.

 

6.2.                            Duty of Pledgee.  The Pledgee’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under section 9-207 of the Uniform Commercial Code or
otherwise, shall be to deal with it with the same degree of care as the Pledgee
deals with similar property for its own account.  Neither the Pledgee, nor any
of its officers, directors, employees or agents shall be liable for failure to
demand, collect or realize upon any of the Collateral or for any delay in doing
so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Pledgor or any other Person or to take any
other action whatsoever with regard to the Collateral or any part thereof.  The
powers conferred on the Pledgee hereunder are solely to protect the Pledgee’s
interests in the Collateral and shall not impose any duty upon the Pledgee to
exercise any such powers.  The Pledgee shall be accountable only for amounts
that it actually receives as a result of the exercise of such powers, and
neither it nor any of its officers, directors, employees or agents shall be
responsible to the Pledgor for any act or failure to act hereunder, except for
(i) its own gross negligence or willful misconduct or (ii) breach of its
obligations under this Agreement.

 

6.3.                            Financing Statements.  Pursuant to any
applicable Law, the Pledgor authorizes the Pledgee to file or record financing
statements and other filing or recording documents or instruments with respect
to the Collateral without the signature of the Pledgor in such form and in such
offices as the Pledgee determines appropriate to perfect the security interests
of the Pledgee under this Agreement.  A photographic or other

 

11

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reproduction of this Agreement shall be sufficient as a financing statement or
other filing or recording document or instrument for filing or recording in any
jurisdiction.

 

7.                                      MISCELLANEOUS PROVISIONS.

 

7.1.                            AMENDMENT AND MODIFICATION.

 

Subject to applicable Law, this Agreement may be amended, modified or
supplemented only by written agreement of Pledgee and Pledgor.

 

7.2.                            WAIVER OF COMPLIANCE; CONSENTS.

 

Except as otherwise provided in this Agreement, any failure of any of the
Parties to comply with any obligation, covenant, agreement or condition herein
may be waived by the Party entitled to the benefits thereof only by a written
instrument signed by the Party granting such waiver, but such waiver of such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent failure to comply therewith.

 

7.3.                            NOTICES.

 

All notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally or by facsimile transmission, or mailed by
overnight courier or registered or certified mail (return receipt requested),
postage prepaid, to the recipient Party at its address (or at such other address
or facsimile number for a Party as shall be specified by like notice; provided,
however, that notices of a change of address shall be effective only upon
receipt thereof):

 

7.3.1.                  IF TO PLEDGEE, TO:

 

Exelon Nuclear

Exelon Generation Company, LLC

4300 Winfield Road

Warrenville, Illinois 60555

Attention: Thomas O’Neill

 

with copies to:

 

Exelon Nuclear

Exelon Generation Company, LLC

4300 Winfield Road

Warrenville, Illinois 60555

Attention: Bradley Fewell

 

and

 

12

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Exelon Corporation

10 South Dearborn Street

Chicago, Illinois 60603

Attention: Bruce G. Wilson

 

7.3.2.                  IF TO PLEDGOR, TO:

 

EnergySolutions, LLC

423 West 300 South, Suite 200

Salt Lake City, Utah 84101

Attention: John Christian

 

with a copy to:

 

EnergySolutions, LLC

423 West 300 South, Suite 200

Salt Lake City, Utah 84101

Attention: Val Christensen

 

7.4.                            ASSIGNMENT.

 

This Agreement and all of the provisions hereof shall be binding upon and inure
to the benefit of the Parties hereto and their respective successors and
permitted assigns, but neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any Party hereto, including by
operation of law, without the prior written consent of each other Party, such
consent not to be unreasonably withheld, nor is this Agreement intended (except
as specifically provided herein) to confer upon any other Person except the
Parties hereto any rights, interests, obligations or remedies hereunder.  Any
assignment in contravention of the foregoing sentence shall be null and void and
without legal effect on the rights and obligations of the Parties hereunder.

 

7.5.                            GOVERNING LAW.

 

This Agreement shall be governed by and construed in accordance with the law of
the State of Illinois (without giving effect to conflict of law principles) as
to all matters, including matters of validity, construction, effect, performance
and remedies.  THE PARTIES HERETO AGREE THAT VENUE IN ANY AND ALL ACTIONS AND
PROCEEDINGS RELATED TO THE SUBJECT MATTER OF THIS AGREEMENT SHALL BE IN THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS (EASTERN
DIVISION) OR A STATE COURT SITUATED THEREIN.  THE FOREGOING COURTS SHALL HAVE
EXCLUSIVE JURISDICTION FOR SUCH PURPOSE AND THE PARTIES HERETO IRREVOCABLY
SUBMIT TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS AND IRREVOCABLY WAIVE THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR
PROCEEDING.  SERVICE OF PROCESS MAY BE MADE IN ANY MANNER RECOGNIZED BY SUCH
COURTS.  EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL
WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN

 

13

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CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

7.6.                            COUNTERPARTS.

 

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

 

7.7.                            ENTIRE AGREEMENT.

 

This Agreement, including the Schedules, documents, certificates and instruments
referred to herein or therein, and any other documents that specifically
reference this Section 7.7, embody the entire agreement and understanding of the
Parties hereto in respect of the transactions contemplated by this Agreement and
shall supersede all previous oral and written and all contemporaneous oral
negotiations, commitments and understandings including, without limitation, all
letters, memoranda or other documents or communications.

 

7.8.                            CHANGE IN LAW.

 

If and to the extent that any Laws that govern any aspect of this Agreement
shall change, so as to make any aspect of this transaction unlawful, then the
Parties agree to make such modifications to this Agreement as may be reasonably
necessary for this Agreement to accommodate any such legal or regulatory
changes, without materially changing the overall benefits or consideration
expected hereunder by any Party.

 

7.9.                            SEVERABILITY.

 

Any term or provision of this Agreement that is held invalid or unenforceable in
any situation shall not affect the validity or enforceability of the remaining
terms and provisions hereof or the validity or enforceability of the offending
term or provision in any other situation.

 

7.10       Right to Specific Performance.

 

Pledgor agrees that a breach of any of its covenants contained in this Agreement
will cause irreparable harm to Pledgee and Pledgee has no adequate remedy at law
in respect of any such breach and, as a consequence, that each and every
covenant contained in this Agreement shall be specifically enforceable against
Pledgor, and Pledgor hereby waives and agrees not to assert any defense that
Pledgee has an adequate remedy at law in an action for specific performance of
any such covenants in the event of a breach thereof.

 

[Signatures appear on the following page]

 

14

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their
respective duly authorized officers as of the date first above written.

 

 

 

EXELON GENERATION COMPANY, LLC

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

 

 

 

ENERGYSOLUTIONS, LLC

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

15

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SCHEDULE 3.1 to

Pledge Agreement

 

FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS

 

Uniform Commercial Code Filings

 

Pledgor

 

UCC Filing Offices

 

 

 

EnergySolutions, LLC

 

Utah

 

Actions with Regard to Pledged Shares

 

1)                                     Deliver of membership interest
certificates (if any), accompanied by undated powers duly indorsed in blank, of
Zion Solutions, LLC

 

16

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SCHEDULE  3.2 to

Pledge Agreement

 

LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE

 

Pledgor

 

Jurisdiction

 

Location

 

 

 

 

 

EnergySolutions, LLC

 

Utah

 

[                    ]

 

17

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EXHIBIT F

 

 

ZION NUCLEAR POWER STATION, UNITS 1 AND 2

CREDIT SUPPORT AGREEMENT

 

by and among

EXELON GENERATION COMPANY, LLC,

ZIONSOLUTIONS, LLC,

 

 

ENERGYSOLUTIONS, LLC

 

 

and

 

ENERGYSOLUTIONS, INC.

 

 

                       , 200  

 

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TABLE OF CONTENTS

 

1.                                      DEFINITIONS

2

 

 

 

1.1.

DEFINITIONS

2

1.2.

CERTAIN INTERPRETIVE MATTERS

4

 

 

 

2.                                      CREDIT SUPPORT

5

 

 

 

2.1.

LETTER OF CREDIT

5

2.2.

REDUCTION OF AMOUNT OF LETTER OF CREDIT

6

 

 

 

3.                                      MATERIAL LETTER OF CREDIT DEFAULTS

7

 

 

 

3.1.

NOTICE OF DEFAULT

7

3.2.

CURE OF MATERIAL LETTER OF CREDIT DEFAULTS

8

 

 

 

4.                                      LETTER OF CREDIT DRAWS

8

 

 

 

4.1.

EXELON LETTER OF CREDIT DRAWS

8

4.2.

USE OF PROCEEDS OF LETTER OF CREDIT DRAWS

9

 

 

 

5.                                      TERM OF AGREEMENT

9

 

 

 

6.                                      COVENANT OF EXELON AND ZION SOLUTIONS

9

 

 

 

7.                                      ARBITRATION

11

 

 

 

8.                                      MISCELLANEOUS PROVISIONS

12

 

 

 

8.1.

AMENDMENT AND MODIFICATION

12

8.2.

WAIVER OF COMPLIANCE; CONSENTS

12

8.3.

NOTICES

12

8.4.

ASSIGNMENT

14

8.5.

GOVERNING LAW

14

8.6.

COUNTERPARTS

14

8.7.

ENTIRE AGREEMENT

14

8.8.

CHANGE IN LAW

15

8.9.

SEVERABILITY

15

 

 

 

EXHIBITS

 

 

 

 

Exhibit A

FORM OF IRREVOCABLE LETTER OF CREDIT

 

 

1

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CREDIT SUPPORT AGREEMENT

 

This CREDIT SUPPORT AGREEMENT, dated as of                        , 200   (the
“Agreement”) is by and among EXELON GENERATION COMPANY, LLC, a Pennsylvania
limited liability company (“Exelon”), ZIONSOLUTIONS, LLC, a Delaware limited
liability company (“Zion Solutions”), ENERGYSOLUTIONS LLC, a Utah limited
liability company (“ZionSolutions’ Parent”), and ENERGYSOLUTIONS, INC, a
Delaware corporation (“Guarantor”).  Exelon, Zion Solutions, Zion Solutions’
Parent, and Guarantor are referred to individually as a “Party” and collectively
as the “Parties.”

 

RECITALS

 

WHEREAS, the Parties have entered into that Asset Sale Agreement, dated as of
December 11, 2007 (the “Asset Sale Agreement”) by and among Exelon, Zion
Solutions, Zion Solutions’ Parent, and Guarantor, pursuant to which Exelon
agreed, subject to the terms and conditions of the Asset Sale Agreement, to,
among other things, sell, assign, convey, transfer and deliver all of its right,
title and interest to the Zion Assets to Zion Solutions;

 

WHEREAS, Exelon and Zion Solutions have entered into that Lease Agreement, dated
as of                     , 200   (the “Lease Agreement”) pursuant to which
Exelon has agreed to lease the Premises (as defined in the Lease Agreement) to
Zion Solutions;

 

WHEREAS, Exelon and Zion Solutions have entered into that Put Option Agreement,
dated as of                     , 200   (the “Put Option Agreement”) pursuant to
which Exelon has agreed to grant Zion Solutions the Put Option (as defined in
the Put Option Agreement);

 

WHEREAS, Zion Solutions’ Parent has entered into that Performance Guaranty,
dated as of December 11, 2007 (the “Performance Guaranty”) pursuant to which
Zion Solutions’ Parent has agreed to guarantee, when due, all obligations of
Zion Solutions under the Asset Sale Agreement, the Lease Agreement, the Put
Option Agreement, and the Assignment and Assumption Agreement;

 

WHEREAS, Guarantor has entered into that Guaranty, dated as of Deember 11, 2007
(the “Guaranty”) pursuant to which Guarantor has agreed to guarantee, when due,
all obligations of Zion Solutions under the Asset Sale Agreement, the Lease
Agreement, the Put Option Agreement, and the Assignment and Assumption Agreement
and all obligations of Zion Solutions’ Parent under the Asset Sale Agreement and
other agreements described in the Guaranty;

 

WHEREAS, the Parties desire that Zion Solutions’ Parent or Guarantor provide for
the support of certain of the obligations of Zion Solutions and Zion Solutions’
Parent under the Asset Sale Agreement, the Lease Agreement and the Performance
Guarantee; and

 

WHEREAS, in order to provide such support, Zion Solutions’ Parent and Guarantor
have agreed, as a condition precedent to the Closing under the Asset Sale
Agreement, to provide Exelon with an irrevocable letter of credit in the form of
Exhibit A hereto (the “Initial Letter of

 

1

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Credit”) from a Qualified Institution, the proceeds of which shall be payable
only to the Buyer Backup NDT;

 

NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements hereinafter set forth, and intending to be legally
bound hereby, the Parties agree as follows:

 

1.                                       DEFINITIONS

 

1.1.                              DEFINITIONS.

 

As used in this Agreement, the following terms have the meanings specified in
this Section 1.1.  All terms not otherwise defined herein shall have the
meanings ascribed to them in the Asset Sale Agreement.

 

(1)                                  “Affiliate” has the meaning set forth in
the Asset Sale Agreement.

 

(2)                                  “Agreement” means this Credit Support
Agreement together with Exhibit A hereto, as the same may be from time to time
amended.

 

(3)                                  “Ancillary Agreements” has the meaning set
forth in the Asset Sale Agreement.

 

(4)                                  “Asset Sale Agreement” has the meaning set
forth in the preamble.

 

(5)                                  “Association” means the American
Arbitration Association.

 

(6)                                  “Bankruptcy Code” means Title 11,
Section 101 et seq. of the United States Code titled “Bankruptcy”, as amended
from time to time, and any successor statute thereto.

 

(7)                                  “Bankruptcy Event” means, with respect to
any Person, the occurrence of the following events:

 

(i)  such Person shall commence a voluntary case concerning itself under the
Bankruptcy Code;

 

(ii) an involuntary case is commenced against such Person under the Bankruptcy
Code and the petition is not controverted within ten (10) days, or is not
dismissed within forty-five (45) days after commencement of the case;

 

(iii) a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or any substantial part of the property of such Person;

 

(iv) such Person commences any other proceedings under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to such Person;

 

2

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(v) there is commenced against such Person any proceeding of the type described
in clause (iv) above and such proceeding is not controverted within ten
(10) days or remains undismissed for a period of forty-five (45) days;

 

(vi) any order of relief or other order approving any case or proceeding of the
types described in clauses (ii) or (iv) above is entered;

 

(vii) such Person is adjudicated insolvent or bankrupt;

 

(viii) such Person makes a general assignment for the benefit of creditors; or

 

(ix) such Person shall admit in writing its inability to pay its debts when due
or shall, by any act consent to, approve of or acquiesce in any of the
foregoing.

 

(8)                                  “Buyer Backup NDT” has the meaning set
forth in the Asset Sale Agreement.

 

(9)                                  “Buyer NDF” has the meaning set forth in
the Asset Sale Agreement.

 

(10)                            “Buyer QDF” has the meaning set forth in the
Asset Sale Agreement.

 

(11)                            “Closing” has the meaning set forth in the Asset
Sale Agreement.

 

(12)                            “Decommissioning” has the meaning set forth in
the Asset Sale Agreement.

 

(13)                            “Default Notice” has the meaning set forth in
Section 3.1.

 

(14)                            “Disposal Capacity Asset” has the meaning set
forth in the Asset Sale Agreement.

 

(15)                            “End State Conditions” has the meaning set forth
in the Put Option Agreement.

 

(16)                            “Exelon” has the meaning set forth in the
preamble.

 

(17)                            “Expiration Date” means the date specified in
the Letter of Credit as the Expiration Date, as such date may be extended from
time to time by the issuer of the Letter of Credit.

 

(18)                            “Force Majeure” has the meaning set forth in the
Lease Agreement.

 

(19)                            “Guarantor” has the meaning set forth in the
preamble.

 

(20)                            “Guaranty” has the meaning set forth in the
preamble.

 

(21)                            “Initial Letter of Credit” has the meaning set
forth in the preamble.

 

(22)                            “Lease Agreement” has the meaning set forth in
the preamble.

 

3

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(23)                            “Letter of Credit” has the meaning set forth in
Section 2.1.1.

 

(24)                            “Material Letter of Credit Default” has the
meaning set forth in Section 3.1.

 

(25)                            “Party” (and the corresponding term “Parties”)
has the meaning set forth in the preamble.

 

(26)                            “Performance Guaranty” has the meaning set forth
in the preamble.

 

(27)                            “Person” has the meaning set forth in the Asset
Sale Agreement.

 

(28)                            “Put Option Agreement” has the meaning set forth
in the preamble.

 

(29)                            “Qualified Institution” has the meaning set
forth in the Asset Sale Agreement.

 

(30)                            “Representatives” has the meaning set forth in
the Asset Sale Agreement.

 

(31)                            “Schedule Extension Conditions” has the meaning
set forth in the Lease Agreement.

 

(32)                            “Site Restoration Milestones” has the meaning
set forth in the Lease Agreement.

 

(33)                            “Substantial Completion” has the meaning set
forth in the Put Option Agreement.

 

(34)                            “Target Completion Date” has the meaning set
forth in the Lease Agreement.

 

(35)                            “Zion Assets” has the meaning set forth in the
Asset Sale Agreement.

 

(36)                            “Zion Solutions” has the meaning set forth in
the preamble.

 

(37)                            “Zion Solutions’ Parent” has the meaning set
forth in the preamble.

 

(38)                            “Zion Station Site” has the meaning set forth in
the Asset Sale Agreement

 

1.2.                              CERTAIN INTERPRETIVE MATTERS.

 

1.2.1.                     UNLESS OTHERWISE REQUIRED BY THE CONTEXT IN WHICH ANY
TERM APPEARS:

 

(1)                                  Capitalized terms used in this Agreement
shall have the meanings specified in this Article.

 

(2)                                  The singular shall include the plural, the
plural shall include the singular, and the masculine shall include the feminine
and neuter.

 

(3)                                  References to “Articles”, “Sections” or
“Exhibits” shall be to articles, sections or exhibits of or to this Agreement,
and references to “paragraphs” or “clauses” shall be to separate paragraphs or
clauses of the section or subsection in which the reference occurs.

 

4

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(4)                                  The words “herein”, “hereof” and
“hereunder” shall refer to this Agreement as a whole and not to any particular
section or subsection of this Agreement; and the words “include,” “includes” or
“including” shall mean “including, but not limited to.”

 

(5)                                  The term “day” shall mean a calendar day,
commencing at 12:01 a.m. (Central Time).  The term “week” shall mean any seven
consecutive day period commencing on a Sunday, and the term “month” shall mean a
calendar month; provided, however, that when a period measured in months
commences on a date other than the first day of a month, the period shall run
from the date on which it starts to the corresponding date in the next month
and, as appropriate, to succeeding months thereafter.  Whenever an event is to
be performed or a payment is to be made by a particular date and the date in
question falls on a day which is not a Business Day, the event shall be
performed, or the payment shall be made, on the next succeeding Business Day;
provided, however, that all calculations shall be made regardless of whether any
given day is a Business Day and whether or not any given period ends on a
Business Day.

 

(6)                                  All references to a particular entity shall
include such entity’s permitted successors and permitted assigns unless
otherwise specifically provided herein.

 

(7)                                  All references herein to any Law or to any
contract or other agreement shall be to such Law, contract or other agreement as
amended, supplemented or modified from time to time unless otherwise
specifically provided herein.

 

1.2.2.                     THE TITLES OF THE ARTICLES AND SECTIONS HEREIN HAVE
BEEN INSERTED AS A MATTER OF CONVENIENCE OF REFERENCE ONLY, AND SHALL NOT
CONTROL OR AFFECT THE MEANING OR CONSTRUCTION OF ANY OF THE TERMS OR PROVISIONS
HEREOF.

 

1.2.3.                     THIS AGREEMENT WAS NEGOTIATED AND PREPARED BY ALL
PARTIES WITH ADVICE OF COUNSEL TO THE EXTENT DEEMED NECESSARY BY EACH PARTY; THE
PARTIES HAVE AGREED TO THE WORDING OF THIS AGREEMENT; AND NONE OF THE PROVISIONS
HEREOF SHALL BE CONSTRUED AGAINST ONE PARTY ON THE GROUND THAT SUCH PARTY IS THE
AUTHOR OF THIS AGREEMENT OR ANY PART HEREOF.

 

1.2.4.                     THE EXHIBIT HERETO IS INCORPORATED IN AND IS INTENDED
TO BE A PART OF THIS AGREEMENT; PROVIDED, HOWEVER, THAT IN THE EVENT OF A
CONFLICT BETWEEN THE TERMS OF THE EXHIBIT AND THE TERMS OF THIS AGREEMENT, THE
TERMS OF THE EXHIBIT SHALL TAKE PRECEDENCE; AND PROVIDED, FURTHER, THAT IN THE
EVENT OF A CONFLICT BETWEEN THE TERMS OF EITHER OR BOTH OF THIS AGREEMENT AND
THE EXHIBIT AND THE TERMS OF THE LETTER OF CREDIT, THE TERMS OF THE LETTER OF
CREDIT SHALL TAKE PRECEDENCE.

 

2.                                       CREDIT SUPPORT.

 

2.1.                              LETTER OF CREDIT.

 

2.1.1.                     ZION SOLUTIONS’ PARENT OR GUARANTOR SHALL DELIVER OR
CAUSE TO BE DELIVERED TO EXELON ON THE DATE HEREOF, AND AT ALL TIMES PRIOR TO
SUBSTANTIAL COMPLETION SHALL MAINTAIN, OR CAUSE TO BE MAINTAINED, THE INITIAL
LETTER OF CREDIT, ANOTHER LETTER OF

 

5

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CREDIT ISSUED BY A QUALIFIED INSTITUTION SUBSTANTIALLY IN THE FORM OF EXHIBIT A,
OR ANOTHER LETTER OF CREDIT ISSUED BY A QUALIFIED INSTITUTION OTHERWISE IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO EXELON (THE “LETTER OF CREDIT”) WITH A
FACE AMOUNT OF TWO HUNDRED MILLION DOLLARS ($200,000,000), AS SUCH AMOUNT MAY BE
REDUCED FROM TIME TO TIME IN ACCORDANCE WITH SECTION 2.2.  IF THE EXPIRATION
DATE IS A DATE PRIOR TO SUBSTANTIAL COMPLETION, ZION SOLUTIONS’ PARENT OR
GUARANTOR SHALL, NOT LESS THAN NINETY (90) DAYS PRIOR TO THE EXPIRATION DATE,
EITHER (I) CAUSE THE ISSUER OF THE LETTER OF CREDIT TO EXTEND THE LETTER OF
CREDIT TO EXPIRE ON A DATE AT LEAST ONE YEAR SUBSEQUENT TO THE THEN CURRENT
EXPIRATION DATE OR (II) OBTAIN AND DELIVER TO EXELON A LEGALLY BINDING
COMMITMENT OF A QUALIFIED INSTITUTION, IN CUSTOMARY FORM AND REASONABLY
SATISFACTORY TO EXELON, TO ISSUE A REPLACEMENT LETTER OF CREDIT WITH A STATED
EXPIRATION DATE AT LEAST ONE YEAR SUBSEQUENT TO THE STATED EXPIRATION DATE OF
THE LETTER OF CREDIT TO BE REPLACED FOR DELIVERY TO EXELON NOT LESS THAN TEN
(10) DAYS PRIOR TO THE STATED EXPIRATION DATE OF THE LETTER OF CREDIT TO BE
REPLACED.  IF ZION SOLUTIONS’ PARENT OR GUARANTOR OBTAINS AND DELIVERS TO EXELON
A COMMITMENT FOR ISSUANCE OF A REPLACEMENT LETTER OF CREDIT PURSUANT TO THE
PRECEDING CLAUSE (II), ZION SOLUTIONS’ PARENT OR GUARANTOR SHALL DELIVER A
REPLACEMENT LETTER OF CREDIT TO EXELON NOT LESS THAN TEN (10) DAYS PRIOR TO THE
STATED EXPIRATION DATE OF THE LETTER OF CREDIT TO BE REPLACED.  UPON EXELON’S
ACCEPTANCE OF A REPLACEMENT LETTER OF CREDIT IN EXCHANGE FOR THE THEN EXISTING
LETTER OF CREDIT, THE REPLACEMENT LETTER OF CREDIT SHALL BE DEEMED THE LETTER OF
CREDIT FOR ALL PURPOSES HEREUNDER.

 

2.1.2.                     ZION SOLUTIONS’ PARENT OR GUARANTOR SHALL OBTAIN A
REPLACEMENT LETTER OF CREDIT ISSUED BY A QUALIFIED INSTITUTION WITHIN NINETY
(90) DAYS FOLLOWING THE OCCURRENCE OF ANY CREDIT RATING DOWNGRADE OR OTHER EVENT
WHICH CAUSES THE ISSUER OF ANY EXISTING LETTER OF CREDIT NOT TO BE A QUALIFIED
INSTITUTION.  UPON EXELON’S ACCEPTANCE OF THE REPLACEMENT LETTER OF CREDIT IN
EXCHANGE FOR THE THEN EXISTING LETTER OF CREDIT, THE REPLACEMENT LETTER OF
CREDIT SHALL BE DEEMED THE LETTER OF CREDIT FOR ALL PURPOSES HEREUNDER.

 

2.1.3.                     IMMEDIATELY UPON SUBSTANTIAL COMPLETION, EXELON SHALL
RETURN THE LETTER OF CREDIT TO ZION SOLUTIONS’ PARENT FOR CANCELLATION (TOGETHER
WITH SUCH CONSENTS TO TERMINATION OF LETTER OF CREDIT AS ZION SOLUTIONS’ PARENT
MAY REASONABLY REQUEST).

 

2.2.                              REDUCTION OF AMOUNT OF LETTER OF CREDIT.

 

Upon achievement of the Site Restoration Milestones, the amount of the Letter
Credit shall be reduced upon the reasonable request of Zion Solutions’ Parent,
and Exelon shall, promptly following the written request of Zion Solutions’
Parent, execute and deliver any consent to reduction of the Letter Credit as may
be reasonably requested by Zion Solutions’ Parent so that (i) after giving
effect to such reduction, the sum of the face amount of the Letter of Credit and
the remaining funds in the Buyer QDF and the Buyer NDF are equal to or greater
than 200% of the remaining costs necessary to achieve the End-State Conditions,
based upon an assessment of such remaining costs and the funds available
provided by Zion Solutions and Zion Solutions Parent and agreed to by Exelon,
such agreement not to be unreasonably withheld; and (ii) the amount of funds in
the Buyer QDF and the Buyer NDF shall equal at least 100% of such

 

6

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remaining costs as a condition to any reduction in the face amount of the Letter
of Credit.  No such reduction in the amount of the Letter of Credit shall be
requested or be effective at a time when (a) a Material Letter of Credit Default
has occurred and has not been cured, (b) a Default Notice has been given by
Exelon and the existence of a Material Letter of Credit Default is the subject
of arbitration pursuant to Article 7, or (c) Exelon is otherwise authorized to
initiate a draw of the Letter of Credit.

 

3.                                       MATERIAL LETTER OF CREDIT DEFAULTS.

 

3.1.                              Notice of Default.

 

If any of the conditions or events described in this Section 3.1 (collectively,
the “Material Letter of Credit Defaults”) shall occur and be continuing:

 

3.1.1.                     (I) ZION SOLUTIONS’ PARENT OR GUARANTOR SHALL HAVE
FAILED TO OBTAIN AN EXTENSION OF THE LETTER OF CREDIT OR A COMMITMENT FROM A
QUALIFIED INSTITUTION TO ISSUE A REPLACEMENT LETTER OF CREDIT AS AND WHEN
REQUIRED UNDER CLAUSE (I) OR (II) OF SECTION 2.1.1; OR (II) ZION SOLUTIONS’
PARENT OR GUARANTOR SHALL HAVE FAILED TO OBTAIN A REPLACEMENT LETTER OF CREDIT
AS AND WHEN REQUIRED UNDER SECTION 2.1.1 OR 2.1.2;

 

3.1.2.                     THE OCCURRENCE OF A BANKRUPTCY EVENT WITH RESPECT TO
ZION SOLUTIONS’ PARENT, GUARANTOR OR ZION SOLUTIONS;

 

3.1.3.                     ZION SOLUTIONS (I) PERMANENTLY CEASES ALL, OR
SUBSTANTIALLY ALL, MATERIAL DECOMMISSIONING WORK AT THE ZION STATION SITE, OR
(II) SUSPENDS SUCH WORK FOR A PERIOD IN EXCESS OF THREE HUNDRED SIXTY FIVE (365)
DAYS, IN EITHER CASE WITHOUT EITHER EXELON’S CONSENT OR APPROVAL OR THE
OCCURRENCE OF AN EVENT OF FORCE MAJEURE OR SCHEDULE EXTENSION CONDITION.  FOR
THE AVOIDANCE OF DOUBT, CESSATION OR SUSPENSION OF MATERIAL DECOMMISSIONING WORK
MAY OCCUR DESPITE THE CONTINUATION OF MAINTENANCE, MONITORING OR SIMILAR WORK
REQUIRED TO PRESERVE OR MAINTAIN THE ZION STATION SITE;

 

3.1.4.                     ZION SOLUTIONS’ PARENT FAILS TO MAKE ANY PAYMENT WHEN
DUE UNDER THE PERFORMANCE GUARANTY (OTHER THAN PAYMENTS OF BASE RENT OR DELAY
RENT UNDER THE LEASE AGREEMENT) OR GUARANTOR FAILS TO MAKE ANY PAYMENT WHEN DUE
UNDER THE GUARANTY; OR

 

3.1.5.                     ZION SOLUTIONS FAILS TO USE DILIGENT EFFORTS TO
PERFORM ITS DECOMMISSIONING OBLIGATIONS ON A SCHEDULE CALCULATED TO ACHIEVE
SUBSTANTIAL COMPLETION ON OR BEFORE THE TARGET COMPLETION DATE IN ACCORDANCE
WITH SECTION 6.4 OF THE LEASE AGREEMENT,

 

Exelon may provide written notice thereof (a “Default Notice”) to Zion
Solutions’ Parent and Zion Solutions.  No Default Notice shall be effective
unless it references this Agreement, describes the Material Letter of Credit
Default and states that such notice is a “Default Notice.”  Notwithstanding the
foregoing, if as a result of the exercise of remedies under the

 

7

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Pledge Agreement, Exelon controls Zion Solutions by reason of the ownership of a
controlling equity interest in Zion Solutions or the appointment of a majority
of the members of the board of directors or board of managers of Zion Solutions,
the events or conditions described in Sections 3.1.3 and 3.1.5 shall not
constitute a Material Letter of Credit Default unless the events or conditions
described in Section 3.1.3  or 3.1.5  shall occur or exist by reason of the
failure or delay of Energy Solutions’ Parent or any of its Affiliates (other
than Zion Solutions) in the provision of waste disposal services and facilities
pursuant to the Disposal Capacity Asset or services and facilities for disposal
of Class B and C Low Level Waste that had been provided or had been made
available to Zion Solutions at any time before or after the date on which Exelon
acquired such control.

 

3.2.                              CURE OF MATERIAL LETTER OF CREDIT DEFAULTS.

 

3.2.1.                     ZION SOLUTIONS SHALL HAVE SIXTY (60) DAYS FOLLOWING
RECEIPT OF A DEFAULT NOTICE TO CURE ANY MATERIAL LETTER OF CREDIT DEFAULT
DESCRIBED IN SECTION 3.1.3 OR 3.1.5.

 

3.2.2.                     UPON RECEIPT OF ANY SUCH DEFAULT NOTICE, ZION
SOLUTIONS SHALL PROMPTLY, AND IN ANY EVENT WITHIN TEN (10) DAYS, INFORM EXELON
IN WRITING (I) IF IT DISPUTES THE EXISTENCE OF ANY MATERIAL LETTER OF CREDIT
DEFAULT DESCRIBED IN SECTION 3.1.3 OR 3.1.5 AND THE BASIS FOR SUCH DISPUTE, AND
SUCH DISPUTE SHALL BE RESOLVED IN ACCORDANCE WITH ARTICLE 7 AND (II) THE ACTION
THAT ZION SOLUTIONS HAS TAKEN OR PROPOSES TO TAKE WITH RESPECT TO THE MATERIAL
LETTER OF CREDIT DEFAULT DESCRIBED THEREIN.

 

3.2.3.                     IN THE EVENT ZION SOLUTIONS ELECTS TO CURE ANY
MATERIAL LETTER OF CREDIT DEFAULT IN ACCORDANCE WITH SECTION 3.2.1, ZION
SOLUTIONS SHALL PROMPTLY NOTIFY EXELON IN WRITING ONCE SUCH MATERIAL LETTER OF
CREDIT DEFAULT HAS BEEN CURED.  EXELON SHALL PROMPTLY NOTIFY ZION SOLUTIONS IN
WRITING IF IT DISPUTES THAT SUCH MATERIAL LETTER OF CREDIT DEFAULT HAS BEEN
CURED, AND SUCH DISPUTE SHALL BE RESOLVED IN ACCORDANCE WITH ARTICLE 7.

 

4.                                       LETTER OF CREDIT DRAWS.

 

4.1.                              Exelon Letter of Credit Draws.  Exelon shall
be entitled to draw on the Letter of Credit:

 

4.1.1.                     IF A MATERIAL LETTER OF CREDIT DEFAULT DESCRIBED IN
SECTION 3.1.1 OCCURS;

 

4.1.2.                     DURING THE CONTINUANCE OF A MATERIAL LETTER OF CREDIT
DEFAULT DESCRIBED IN SECTION 3.1.2 OR 3.1.4, IMMEDIATELY AFTER PROVIDING A
DEFAULT NOTICE TO ZION SOLUTIONS’ PARENT AND ZION SOLUTIONS; OR

 

4.1.3.                     DURING THE CONTINUANCE OF A MATERIAL LETTER OF CREDIT
DEFAULT DESCRIBED IN SECTION 3.1.3 OR 3.1.5 OF THIS AGREEMENT, AFTER THE
EXPIRATION OF THE SIXTY (60) DAY CURE PERIOD DESCRIBED IN SECTION 3.2 WITH
RESPECT TO SUCH MATERIAL LETTER OF CREDIT DEFAULT; PROVIDED THAT, TO THE EXTENT
THAT THERE IS A DISPUTE AMONG THE PARTIES AS TO

 

8

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WHETHER A MATERIAL LETTER OF CREDIT DEFAULT DESCRIBED IN SECTION 3.1.3 OR 3.1.5
HAS OCCURRED OR IS CONTINUING UPON THE EXPIRATION OF SUCH SIXTY (60) DAY CURE
PERIOD, EXELON MAY NOT DRAW ON THE LETTER OF CREDIT UNTIL SUCH DISPUTE HAS BEEN
RESOLVED IN ACCORDANCE WITH ARTICLE 7.  NOTWITHSTANDING THE FOREGOING, EXELON
MAY DRAW ON THE LETTER OF CREDIT WHILE AN ARBITRATION UNDER ARTICLE 7 IS PENDING
IF THE LETTER OF CREDIT SHALL EXPIRE WITHIN THIRTY (30) DAYS AND HAS NOT BEEN
REPLACED IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 2.1.1 OR 2.1.2, PROVIDED
THAT (A) ZION SOLUTIONS SHALL NOT WITHDRAW FUNDS FROM THE BACKUP NDT WHILE AN
ARBITRATION IS PENDING UNDER ARTICLE 7 AND (B) IF THE ARBITRATORS ACTING
PURSUANT TO ARTICLE 7 LATER DETERMINE THAT NO MATERIAL LETTER OF CREDIT DEFAULT
OCCURRED, AND IF NO OTHER MATERIAL LETTER OF CREDIT DEFAULT HAS OCCURRED AND
THERE IS NO ARBITRATION PENDING CONCERNING ANY OTHER ALLEGED MATERIAL LETTER OF
CREDIT DEFAULT , ZION SOLUTIONS MAY WITHDRAW THE PROCEEDS OF SUCH DRAWING FROM
THE BUYER BACKUP NDT AND REMIT SUCH PROCEEDS TO ZION SOLUTIONS’ PARENT UPON
DELIVERY OF A SUBSTITUTE LETTER OF CREDIT TO EXELON IN THE AMOUNT OF SUCH
WITHDRAWAL.

 

4.2.                              USE OF PROCEEDS OF LETTER OF CREDIT DRAWS.

 

All amounts drawn from the Letter of Credit shall be deposited directly with the
Buyer Backup NDT, to be held by the Buyer Backup NDT and disbursed by the Buyer
Backup NDT to pay Decommissioning costs incurred by Zion Solutions solely to the
extent such costs can not be reimbursed by the Buyer NDF or the Buyer QDF. 
Exelon has no rights of ownership or other rights to any amounts drawn from the
Letter of Credit.

 

5.                                       TERM OF AGREEMENT

 

This Agreement and all obligations and rights of the Parties hereunder shall
terminate upon the achievement of Substantial Completion and Exelon’s return of
the Letter of Credit to Zion Solution’s Parent in accordance with Section 2.1.3.

 

6.                                       COVENANTS OF ZION SOLUTIONS’ PARENT AND
ZION SOLUTIONS.

 

6.1  Notice of Default.  Zion Solutions and Zion Solutions’ Parent shall give
written notice to Exelon promptly, and in any event within five (5) Business
Days, after the occurrence of any event or condition that constitutes a Material
Letter of Credit Default or, but for the giving of notice, the passage of time,
or both, would constitute a Material Letter of Credit Default, together with a
statement of Zion Solutions and Zion Solutions’ Parent setting forth details of
such event or condition and the action that Zion Solutions and Zion Solutions’
Parent propose to take with respect thereto.

 

6.2  REPORTS.  DURING THE PERIOD FROM THE DATE HEREOF TO THE DATE ON WHICH THE
LETTER OF CREDIT IS RETURNED TO ZION SOLUTIONS’ PARENT IN ACCORDANCE WITH
SECTION 2.1.3, ZION SOLUTIONS AND ZION SOLUTIONS’ PARENT, AS APPLICABLE, SHALL
DELIVER TO EXELON:

 

9

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6.2.1  AS SOON AS AVAILABLE AND IN ANY EVENT WITHIN SIXTY (60) DAYS AFTER THE
END OF EACH OF THE FIRST THREE QUARTERS OF EACH FISCAL YEAR OF ZION SOLUTIONS’
PARENT, A COPY OF ZION SOLUTIONS’ PARENT’S QUARTERLY REPORT ON FORM 10-Q FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH QUARTER (OR, IF
ZION SOLUTIONS’ PARENT IS NOT REQUIRED TO FILE A QUARTERLY REPORT ON FORM 10-Q,
A COPY OF AN UNAUDITED CONSOLIDATED BALANCE SHEET OF ZION SOLUTIONS’ PARENT AS
OF THE END OF SUCH QUARTER AND THE RELATED CONSOLIDATED STATEMENT OF INCOME OF
ZION SOLUTIONS’ PARENT FOR THE PORTION OF THE FISCAL YEAR OF ZION SOLUTIONS’
PARENT ENDING ON THE LAST DAY OF SUCH QUARTER, IN EACH CASE PREPARED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, SUBJECT TO THE ABSENCE
OF FOOTNOTES AND TO YEAR-END AUDIT ADJUSTMENTS), TOGETHER WITH A CERTIFICATE OF
THE CHIEF FINANCIAL OFFICER OF ZION SOLUTIONS’ PARENT TO THE EFFECT THAT SUCH
FINANCIAL STATEMENTS FAIRLY PRESENT THE CONSOLIDATED FINANCIAL CONDITION OF ZION
SOLUTIONS’ PARENT AS OF THE DATE THEREOF AND RESULTS OF OPERATIONS FOR THE
PERIOD THEN ENDED;

 

6.2.2  AS SOON AS AVAILABLE AND IN ANY EVENT WITHIN ONE-HUNDRED FIVE (105) DAYS
AFTER THE END OF EACH FISCAL YEAR OF ZION SOLUTIONS’ PARENT, A COPY OF ZION
SOLUTIONS’ PARENT’S ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION WITH RESPECT TO SUCH FISCAL YEAR (OR, IF ZION SOLUTIONS’
PARENT IS NOT REQUIRED TO FILE AN ANNUAL REPORT ON FORM 10-K, AN AUDITED COPY OF
A CONSOLIDATED BALANCE SHEET OF ZION SOLUTIONS’ PARENT AS OF THE LAST DAY OF
SUCH FISCAL YEAR AND THE RELATED AUDITED CONSOLIDATED STATEMENTS OF INCOME,
RETAINED EARNINGS AND CASH FLOWS OF ZION SOLUTIONS’ PARENT FOR SUCH FISCAL YEAR,
TOGETHER WITH AN OPINION OF ERNST & YOUNG LLP OR OTHER CERTIFIED PUBLIC
ACCOUNTANTS OF RECOGNIZED NATIONAL STANDING); AND

 

6.2.3  As promptly as reasonably practicable, such other information concerning
Zion Solutions or Zion Solutions’ Parent as Exelon may reasonably request in
order to verify the accuracy of any statement of Zion Solutions, Zion Solutions’
Parent and Guarantor relating to the existence or absence of any Material Letter
of Credit Default.

 

6.3  Liens.  During the period from the date hereof to the date on which the
Letter of Credit is returned to Zion Solutions’ Parent in accordance with
Section 2.1.3, Zion Solutions shall not create, incur, assume or suffer to exist
any Encumbrance on its property, revenues or assets, whether now owned or
hereafter acquired, except as follows:

 

6.3.1  mechanics’, materialmen’s, carriers’, workers’, repairers’ and other
similar liens arising or incurred in the ordinary course of business relating to
obligations as to which there is no default on the part of Zion Solutions or the
validity of which are being contested in good faith, and which do not,
individually or in the aggregate, exceed One Hundred Thousand Dollars
($100,000);

 

6.3.2  liens upon or in any property acquired in the ordinary course of business
to secure the purchase price of such property or to secure any obligation
incurred solely for the purpose of financing the acquisition of such property;

 

10

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6.3.3  statutory liens for Taxes or other governmental charges or assessments
not yet due or delinquent or the validity of which are being contested in good
faith by appropriate proceedings;

 

6.3.4  zoning, entitlement, conservation restriction and other land use and
environmental regulations imposed by Governmental Authorities;

 

6.3.5  liens existing on property at the time of the acquisition thereof (other
than any such lien created in contemplation of such acquisition);

 

6.3.6  other liens, imperfections in or failures of title, easements, leases,
licenses, restrictions, activity and use limitations, conservation easements,
encumbrances and encroachments, as do not, individually or in the aggregate,
detract from the value of the Zion Assets in an amount in excess of One Hundred
Thousand Dollars ($100,000).

 

6.4  Business Activity.  During the period from the date hereof to the date on
which the Letter of Credit is returned to Zion Solutions’ Parent in accordance
with Section 2.1.3, Zion Solutions shall not (a) engage in any line of business
or business activity other than the Decommissioning and other activities
contemplated by the Lease Agreement, (b) incur any debt for borrowed money or
other liability except as reasonably necessary to engage in and complete the
Decommissioning and other activities contemplated by the Lease Agreement, or
(c) merge with or into or consolidate with or into, or sell, assign, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its assets (whether now owned or hereafter
acquired).

 

7.                                       ARBITRATION.

 

Any controversy or dispute described in Section 3.2.2 will be submitted to and
settled by binding and conclusive arbitration in Chicago, Illinois before a
panel of three (3) arbitrators familiar with the nuclear power industry and
selected as provided in this Article 7 and conducted in accordance with the
commercial arbitration rules and expedited procedures of the Association (or any
other form of arbitration agreed to by Zion Solutions and Exelon) then in
effect.  Zion Solutions and Exelon shall each have the right to designate an
arbitrator of its choice who shall not have been previously an employee or agent
of or consultant or counsel to either Zion Solutions or Exelon or their
respective Affiliates and shall not have any direct or indirect interest in Zion
Solutions or Exelon or their respective Affiliates or the subject matter of the
arbitration.   Such designation shall be made by notice to the other party and
to the Association within ten (10) days after either party gives notice of the
demand for arbitration.  The two arbitrators designated by the parties shall,
within ten (10) days after the designation of the last of the two arbitrators to
be designated by the parties, designate a third arbitrator who shall act as
chairman of the panel of three arbitrators who shall hear and make a decision
with respect to the dispute submitted to such arbitration.  If the arbitrators
designated by Zion Solutions and Exelon cannot or do not select a third
arbitrator within such ten (10) day period, either Zion Solutions or Exelon may
apply to the Association for the purpose of appointing any person listed with
the Association and familiar with the nuclear power industry as the third
independent arbitrator under the expedited rules of the Association.  The
rules of the Association shall apply to the arbitration to the extent not
inconsistent with the requirements of this Article 7.  Unless

 

11

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otherwise agreed between Zion Solutions and Exelon or as may otherwise
determined by the arbitrators upon application of Zion Solutions or Exelon, the
arbitrators shall hold a one-day hearing on the dispute within thirty (30) days
after appointment of the third arbitrator.  At such hearing, Zion Solutions and
Exelon each shall be allowed a period of four hours to present its case and
closing and rebuttal arguments to the arbitrators, unless otherwise mutually
agreed between Zion Solutions and Exelon.  The arbitrators shall render their
decision in writing within ten (10) days after the conclusion of the hearing
solely on the basis of the documents, testimony and arguments presented at the
hearing.  Not less than ten (10) days prior to the hearing, Zion Solutions and
Exelon shall exchange briefs and documents to be submitted into evidence at the
hearing.  Zion Solutions and Exelon shall also provide each other reasonable
access to their files and records and the files and records of their respective
Affiliates, to the extent those files and records are relevant to the dispute,
at all times prior to the arbitration hearing.   No findings of fact or
conclusions of law will be required in such decision.  Judgment on any award
rendered pursuant to any such arbitration proceeding may be entered in any
court, federal or state, having jurisdiction thereof, and the Parties will be
deemed to have waived their right to any form of appeal of such award to the
extent permitted by law.  Each of Zion Solutions and Exelon shall bear its own
expenses with respect to the arbitration; provided that the arbitrators, upon
application of Zion Solutions or Exelon, may assess costs and expenses against
either Zion Solutions or Exelon if the arbitrators shall deem such assessment
just and equitable.

 

8.                                       MISCELLANEOUS PROVISIONS.

 

8.1.                              AMENDMENT AND MODIFICATION.

 

Subject to applicable law, this Agreement may be amended, modified or
supplemented only by written agreement of Exelon, Zion Solutions’ Parent,
Guarantor and Zion Solutions.

 

8.2.                              WAIVER OF COMPLIANCE; CONSENTS.

 

Except as otherwise provided in this Agreement, any failure of any of the
Parties to comply with any obligation, covenant, agreement or condition herein
may be waived by the Party entitled to the benefits thereof only by a written
instrument signed by the Party granting such waiver, but such waiver of such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent failure to comply therewith.

 

8.3.                              NOTICES.

 

All notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally or by facsimile transmission, or mailed by
overnight courier or registered or certified mail (return receipt requested),
postage prepaid, to the recipient Party at its address (or at such other address
or facsimile number for a Party as shall be specified by like notice; provided,
however, that notices of a change of address shall be effective only upon
receipt thereof):

 

12

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8.3.1.                     IF TO EXELON, TO:

 

Exelon Nuclear

Exelon Generation Company, LLC

4300 Winfield Road

Warrenville, Illinois 60555

Attention: Thomas O’Neill

 

with copies to:

 

Exelon Nuclear

Exelon Generation Company, LLC

4300 Winfield Road

Warrenville, Illinois 60555

Attention: Bradley Fewell

 

and

 

Exelon Corporation

10 South Dearborn Street

Chicago, Illinois 60603

Attention: Bruce G. Wilson

 

8.3.2.                     IF TO ZION SOLUTIONS, TO:

 

ZionSolutions, LLC

423 West 300 South, Suite 200

Salt Lake City, Utah 84101

Attention: John Christian

 

with a copy to:

 

ZionSolutions, LLC

423 West 300 South, Suite 200

Salt Lake City, Utah 84101

Attention: Val Christensen

 

8.3.3.                     IF TO ZION SOLUTIONS’ PARENT OR GUARANTOR, TO:

 

EnergySolutions, LLC

423 West 300 South, Suite 200

Salt Lake City, Utah 84101

Attention: John Christian

 

with a copy to:

 

EnergySolutions, LLC

423 West 300 South, Suite 200

 

13

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Salt Lake City, Utah 84101

Attention: Val Christensen

 

8.4.                              ASSIGNMENT.

 

This Agreement and all of the provisions hereof shall be binding upon and inure
to the benefit of the Parties and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any Party, including by operation of
law, without the prior written consent of each other Party, such consent not to
be unreasonably withheld, nor is this Agreement intended (except as specifically
provided herein) to confer upon any other Person except the Parties any rights,
interests, obligations or remedies hereunder.  Any assignment in contravention
of the foregoing sentence shall be null and void and without legal effect on the
rights and obligations of the Parties hereunder.

 

8.5.                              GOVERNING LAW.

 

This Agreement shall be governed by and construed in accordance with the law of
the State of Illinois (without giving effect to conflict of law principles) as
to all matters, including matters of validity, construction, effect, performance
and remedies, except to the extent the Federal Arbitration Act would otherwise
apply to the provisions of Section 7. EXCEPT FOR ANY CONTROVERSY OR DISPUTE
DESCRIBED IN SECTION 3.2.2  WHICH SHALL BE RESOLVED IN ACCORDANCE WITH ARTICLE
7, THE PARTIES AGREE THAT VENUE IN ANY AND ALL ACTIONS AND PROCEEDINGS RELATED
TO THE SUBJECT MATTER OF THIS AGREEMENT SHALL BE IN THE UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT OF ILLINOIS (EASTERN DIVISION) OR A STATE COURT
SITUATED THERIN.  THE FOREGOING COURTS SHALL HAVE EXCLUSIVE JURISDICTION FOR
SUCH PURPOSE AND THE PARTIES IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF
SUCH COURTS AND IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING.  SERVICE OF PROCESS MAY BE MADE IN
ANY MANNER RECOGNIZED BY SUCH COURTS.  EACH OF THE PARTIES IRREVOCABLY WAIVES
ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY
DISPUTE IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

8.6.                              COUNTERPARTS.

 

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

 

8.7.                              ENTIRE AGREEMENT.

 

This Agreement, including the Exhibit, documents, certificates and instruments
referred to herein or therein, and any other documents that specifically
reference this Section 8.7, embody the entire agreement and understanding of the
Parties in respect of the transactions contemplated by this Agreement and shall
supersede all previous oral and written and all

 

14

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contemporaneous oral negotiations, commitments and understandings including,
without limitation, all letters, memoranda or other documents or communications.

 

8.8.                              CHANGE IN LAW.

 

If and to the extent that any Laws or regulations that govern any aspect of this
Agreement shall change, so as to make any aspect of this transaction unlawful,
then the Parties agree to make such modifications to this Agreement as may be
reasonably necessary for this Agreement to accommodate any such legal or
regulatory changes, without materially changing the overall benefits or
consideration expected hereunder by any Party.

 

8.9.                              SEVERABILITY.

 

Any term or provision of this Agreement that is held invalid or unenforceable in
any situation shall not affect the validity or enforceability of the remaining
terms and provisions hereof or the validity or enforceability of the offending
term or provision in any other situation.

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their
respective duly authorized officers as of the date first above written.

 

 

 

EXELON GENERATION COMPANY, LLC

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

ZIONSOLUTIONS, LLC

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

15

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ENERGYSOLUTIONS, LLC

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

ENERGYSOLUTIONS, INC.

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

16

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EXHIBIT A

 

FORM OF IRREVOCABLE LETTER OF CREDIT

 

[LETTERHEAD OF ISSUING BANK]

 

[DATE]

 

IRREVOCABLE LETTER OF CREDIT NO.                               

 

ACCOUNT PARTY:

BENEFICIARY:

EnergySolutions, LLC [or EnergySolutions, Inc.]

Exelon Generation Company, LLC

[          ]

[          ]

 

Dear Beneficiary:

 

At the request of and for the account of EnergySolutions, LLC, a Utah limited
liability company [or EnergySolutions, Inc., a Delaware corporation] (the
“Account Party”), we hereby establish in your favor, our Irrevocable Letter of
Credit No.         (this “Letter of Credit”) whereby, subject to the terms and
conditions contained herein, you are hereby irrevocably authorized to draw on
us, by your draft or drafts at sight, an aggregate amount not to exceed in the
aggregate TWO HUNDRED MILLION DOLLARS ($200,000,000.00)(such amount, as it may
be reduced in accordance with the terms hereof, the “Stated Amount”).  This
Letter of Credit is furnished to you pursuant to the Credit Support Agreement,
dated as of             , 200    by and among Exelon Generation Company, LLC,
ZionSolutions, LLC, EnergySolutions, LLC and EnergySolutions, Inc.

 

This Letter of Credit shall be effective immediately and shall expire on the
Expiration Date (as hereinafter defined).

 

You may draw upon this Letter of Credit at any time on or prior to the
Expiration Date by presenting to us:

 

(i)            a sight draft in the form of Exhibit A attached hereto (a “Sight
Draft”) in the amount of such demand; and

 

17

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(ii)           a drawing certificate in the form of Exhibit B attached hereto (a
“Drawing Certificate”),

 

each completed in accordance with the instructions contained in such Exhibit A
and Exhibit B, respectively, and executed by your Authorized Officer.

 

Presentation of any Sight Draft and accompanying Drawing Certificate shall be
made by hand delivery or by courier at [          ], Attention: [          ] or
by telecopy at [          ], Attention [         ], provided, however, that if
any Sight Draft and Drawing Certificate are presented to us by telecopy,
originals thereof shall be simultaneously sent by you by overnight courier
delivery service to us at the address stated above for hand or courier delivery;
provided, further, that your failure or delay to send such original documents
shall not affect the efficacy of a drawing made pursuant to such documents
delivered by telecopy.  We hereby agree that any Sight Draft drawn under and in
compliance with the terms of this Letter of Credit shall be duly honored by us
upon delivery of the above-specified documents, if presented (by hand delivery
or by telecopy) before the Expiration Date (as hereinafter defined) at our
office specified above.  If a demand for payment is made by you hereunder at or
before 10:00 a.m., [          ] time, on any Business Day (as hereinafter
defined), and provided that such demand for payment and the documents presented
in connection therewith conform to the terms and conditions hereof, payment
shall be made to [Buyer Backup NDT] of the amount specified, in immediately
available funds, at or before 2:00 p.m., [          ] time, on such Business
Day.  All payments made by us under this Letter of Credit shall be made with our
own funds and not with any funds of the Account Party.

 

If a demand for payment made by you hereunder or the documents presented in
connection therewith do not, in any instance, conform to the terms and
conditions of this Letter of Credit, we shall, as soon as practicable, give you
notice that the purported demand for payment was not effected in accordance with
the terms and conditions of this Letter of Credit, stating the reasons
therefor.  Upon being notified that the purported demand for payment was not
effected in accordance with this Letter of Credit, you may attempt to correct
any defect in such purported demand for payment if, and to the extent that, you
are entitled and able to do so hereunder.  As used in this Letter of Credit,
“Business Day” shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in the State of [          ] are authorized or
required by law to close.

 

Upon payment to [Buyer Backup NDT] of any amount demanded hereunder, we shall be
fully discharged on our obligation under this Letter of Credit with respect to
such amount, and we shall not thereafter be obligated to make any further
payments to you or to any other person under this Letter of Credit with respect
to such amount.

 

In connection with the presentation to us of any certificate by you, we may rely
upon the authenticity of any such certificate signed by one or more persons
represented to be your respective Authorized Officers.  “Authorized Officer”
shall mean, with respect to you, any authorized President, Vice President or
Treasurer.

 

This Letter of Credit shall automatically terminate and be delivered to us for
cancellation upon the earliest of (i) the making by you of a drawing hereunder,
and our payment of such

 

18

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drawing, in the full Stated Amount, (ii) our receipt of a certificate signed by
your Authorized Officer in the form of Exhibit C attached hereto, and (iii) the
close of business on [      ] (as it may be extended annually at least ninety
(90) days prior to the date that the Letter of Credit would otherwise expire for
periods of up to one year at the Account Party’s request and with our consent as
contemplated by the following paragraph)(the “Expiration Date”).

 

We may, but shall not be obligated to, extend the original Expiration Date or
any subsequent Expiration Date to a later Expiration Date by giving you a Notice
of Extension in the form of Exhibit D attached hereto at least ninety (90) days
before such original Expiration Date or, as applicable, ninety (90) days before
any such subsequent Expiration Date.  Upon issuance by us of any such Notice of
Extension, the Expiration Date in effect prior to the issuance of such Notice of
Extension shall be extended to the later Expiration Date stated in such Notice
of Extension, and for all purposes of this Letter of Credit thereafter, the
Expiration Date shall be the Expiration Date stated in such Notice of Extension,
unless and until we have issued a subsequent Notice of Extension extending the
Expiration Date to a later date.

 

Partial drawings under this Letter of Credit are not permitted.  The Stated
Amount shall also be reduced by any reductions in accordance with a certificate
in the form of Exhibit E attached hereto received by us from your Authorized
Officer.

 

We hereby issue this Letter of Credit in your favor and undertake with you and
bona fide holders that draft(s) drawn under and in compliance with the terms of
this Letter of Credit will be honored upon due presentation on or before the
Expiration Date.  This Letter of Credit is subject to ISP, International Standby
Practices, International Chamber of Commerce, Publication No. 590 and engages us
in accordance with the terms thereof.  The number and the date of this Letter of
Credit and the name of our Bank must be quoted on all drafts required.  This
Letter of Credit’s articles are binding on all parties hereto, unless otherwise
expressly stipulated in this Letter of Credit, and to the extent not
inconsistent therewith, shall be governed by, and construed in accordance with,
the laws of the State of [          ], including, without limitation, the
Uniform Commercial Code as in effect in such State.

 

This Letter of Credit may not be transferred without our consent. Only you may
draw upon this Letter of Credit.  Upon the payment to you or your account of the
full aggregate Stated Amount specified herein, we shall be fully discharged of
our obligations under this Letter of Credit.

 

19

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This Letter of Credit sets forth in full the terms of our undertaking. 
Reference in this Letter of Credit to other documents or instruments is for
identification purposes only and such reference shall not modify or affect the
terms hereof or cause such documents or instruments to be deemed incorporated
herein.

 

 

Very truly yours,

 

 

 

[                       ],

 

as Issuing Bank

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

20

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Exhibit A to

Letter of Credit No.          

 

SIGHT DRAFT

 

[INSERT DATE ON OR PRIOR TO EXPIRATION DATE.]

 

[          ]

[          ]

 

Re:

Irrevocable Letter of Credit No.

 

 

On Sight

 

Pay to [Buyer Backup NDT], pursuant to Irrevocable Letter of Credit
No.            of [insert bank name] (the “Letter of Credit”) in immediately
available funds                         Dollars ($                  ), if a
demand for payment is made before 10:00 a.m., [          ] time, on a Business
Day at or before 2:00 p.m., [          ] time on the date hereof, and if demand
for payment is made at any other time on the first Business Day following the
date hereof at or before 2:00 p.m.

 

 

EXELON GENERATION COMPANY, LLC

 

a Pennsylvania limited liability company.

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

21

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Exhibit B to

Letter of Credit No.           

 

DRAWING CERTIFICATE

 

[DATE]

 

[          ]

[          ]

 

Re:

Irrevocable Letter of Credit No.

 

 

Ladies and Gentlemen:

 

The undersigned, a duly authorized representative of Exelon Generation Company,
LLC, a Pennsylvania limited liability company (“Exelon”), as the beneficiary
(the “Beneficiary”) of the Irrevocable Letter of Credit No. [      ] (the
“Letter of Credit”) issued by [          ] (the “Issuing Bank”), for the account
of EnergySolutions, LLC, a Utah limited liability company (“Zion Solutions’
Parent”) [or EnergySolutions, Inc., a Delaware corporation (“Guarantor”)],
certifies as follows to the Issuing Bank:

 

1.  Exelon is a party to the Credit Support Agreement, dated as of             ,
200  (the “Agreement”) by and among Exelon, ZionSolutions, LLC (“Zion
Solutions”), EnergySolutions, LLC (“Zion Solutions’ Parent”), and
EnergySolutions, Inc. (“Guarantor”).

 

[This Drawing Certificate, as executed, must contain one, but only one, of the
following alternative paragraphs 2. below.]

 

[2.  A Material Letter of Credit Default described in Section 3.1.1, 3.1.2 or
3.1.4 of the Agreement has occurred and is continuing, and Exelon has provided a
Default Notice to Zion Solutions’ Parent and Zion Solutions with respect
thereto.]

 

[2.  A Material Letter of Credit Default described in Section 3.1.3 or 3.1.5 of
the Agreement has occurred and is continuing, and Exelon has provided a Default
Notice to Zion Solutions’ Parent and Zion Solutions with respect thereto at
least sixty (60) days prior to the date hereof.  Zion Solutions’ Parent has not
cured such Material Letter of Credit Default and Zion Solutions has not informed
Exelon pursuant to Section 3.2.2 of the Agreement that there is a dispute as to
whether such Material Letter of Credit Default exists.]

 

[2.  A Material Letter of Credit Default described in Section 3.1.3 or 3.1.5 of
the Agreement has occurred and is continuing, and Exelon has provided a Default
Notice to Zion Solutions’ Parent and Zion Solutions with respect thereto at
least sixty (60) days prior to the date hereof.  In accordance with Article 7 of
the Agreement, a panel of arbitrators has determined that such Material Letter
of Credit Default exists.]

 

22

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[2.  A Material Letter of Credit Default described in Section 3.1.3 or 3.1.5 of
the Agreement has occurred and is continuing, and Exelon has provided a Default
Notice to Zion Solutions’ Parent and Zion Solutions with respect thereto at
least sixty (60) days prior to the date hereof.  A panel of arbitrators has not
determined whether such Material Letter of Credit Default exists in accordance
with Article 7 of the Agreement, but the Letter of Credit will expire in less
than thirty (30) days and has not been replaced.]

 

3.  Substantial Completion (as defined in the Agreement) has not occurred.

 

4.  Exelon is entitled, in accordance with the terms of the Agreement and the
Letter of Credit, to make a drawing under the Letter of Credit in respect of the
amount set forth in the accompanying Sight Draft.

 

5.  All payments under the Letter of Credit shall be made by wire transfer of
immediately available funds to [Buyer Backup NDT] at [Name of [Buyer Backup
NDT’s] bank], for credit to account no.      .  No payments under the Letter of
Credit shall be paid to any person or entity (including Exelon) other than
[Buyer Backup NDT], and Exelon has no ownership or other interest in such
payments.

 

 

EXELON GENERATION COMPANY, LLC

 

a Pennsylvania limited liability company.

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

23

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Exhibit C to

Letter of Credit No.           

 

[LETTERHEAD OF BENEFICIARY]

 

[DATE.]

 

CONSENT TO TERMINATION OF LETTER OF CREDIT

 

[           ]

[           ]

 

Re:

Irrevocable Letter of Credit No.

 

 

Ladies and Gentlemen:

 

Reference is made to the Irrevocable Letter of Credit No.             (the
“Letter of Credit”) issued by [          ], for the account of EnergySolutions,
LLC, a Utah limited liability company [or EnergySolutions, Inc., a Delaware
corporation].  The undersigned beneficiary of such Letter of Credit hereby
consents to the termination of the Letter of Credit, effective immediately, and
is surrendering the Letter of Credit herewith for cancellation.

 

IN WITNESS WHEREOF, Exelon Generation Company, LLC, a Pennsylvania limited
liability company, has executed and delivered this certificate as of the     
day of           ,         .

 

 

EXELON GENERATION COMPANY, LLC

 

a Pennsylvania limited liability company.

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

24

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Exhibit D to

 

Letter of Credit No.           

 

NOTICE OF EXTENSION

 

[LETTERHEAD OF ISSUING BANK]

 

[DATE]

 

To: Exelon Generation Company, LLC

[          ]

[          ]

 

Re:

Irrevocable Letter of Credit No.

 

 

Ladies and Gentlemen:

 

We hereby irrevocably agree to extend the expiration date of the
above-referenced Letter of Credit no.                to expire on
                  (date), which date, for all purposes of the above-referenced
Letter of Credit, shall be the Expiration Date of the Letter of Credit from and
after the issuance of this Notice of Extension, unless and until we issue a
subsequent Notice of Extension extending the Expiration Date to a later date.

 

 

Very truly yours,

 

 

 

 

 

[          ],

 

as Issuing Bank

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

cc:                                              (Applicant Name)

 

25

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Exhibit E to

Letter of Credit No.           

 

CONSENT TO REDUCTION OF LETTER OF CREDIT

 

Reference is made to the Irrevocable Letter of Credit No.             (the
“Letter of Credit”) issued by [          ], for the account of EnergySolutions,
LLC, a Utah limited liability company [or EnergySolutions, Inc., a Delaware
corporation (“Guarantor”)],.  The undersigned beneficiary of such Letter of
Credit hereby consents to a permanent reduction in the amount available to be
drawn under the Letter of Credit, effective immediately, to $             .

 

IN WITNESS WHEREOF, Exelon Generation Company, LLC, a Pennsylvania limited
liability company, has executed and delivered this certificate as of the     
day of           ,         .

 

 

EXELON GENERATION COMPANY, LLC

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

26

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EXHIBIT G

 

When Recorded Return To:

 

Grantee’s Address:

 

Space above for County Recorder’s Use         

 

[PARCEL I.D. #                                ]

 

Irrevocable Easement for Disposal Capacity

 

This Irrevocable Easement for Disposal Capacity (the “Grant”) is made this   
day of        , 2007, by ENERGYSOLUTIONS LLC, a Utah limited liability company
formerly known as Envirocare of Utah, LLC (“Grantor”), to the Trustee of the
[NAME OF TRUST COMPANY OF BUYER BACKUP NDT TRUST], a                      trust
(“Grantee”) (collectively, the “Parties”).

 

Recitals

 

A.            Grantor is the owner of that certain real property located in
Tooele County, State of Utah, more particularly described on Exhibit A (the
“Easement Area”), which it operates as a low level radioactive waste disposal
facility (the “Clive Facility”).

 

B.            As used in this Grant, the term “Zion Station Site” refers to the
entire site that is subject to the Nuclear Regulatory Commission Operating
Licenses DPR-39 (Zion 1) and DPR-48 (Zion 2).

 

C.            Grantor, Exelon Generation Company, LLC, a Pennsylvania limited
liability company (“Exelon”), EnergySolutions, Inc., and ZionSolutions, LLC, a
Delaware limited liability company (“Zion Solutions”), have executed the Asset
Sale Agreement dated as of December 11, 2007 (the “Sale Agreement”) pursuant to
which Zion Solutions agreed to purchase and assume, and Exelon agreed to sell
and assign, certain assets located at the Zion Station Site and certain
associated liabilities, including the responsibility for Decommissioning the
Zion Station Site.

 

D.            Grantor desires to dedicate, through this Grant, a portion of the
Clive Facility to the disposal of all Class A Low Level Waste that may be
shipped to the Clive Facility

 

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from the Zion Station Site during the course of Decommissioning the Zion Station
Site and waste material situated in the Zion Station Site that can be made
WAC-compliant through treatment, processing or other handling.

 

Grant of Easement

 

For and in the consideration of the promises and covenants contained herein and
in the Sale Agreement and for other good and valuable consideration, the receipt
and sufficiency of which are acknowledged, the Parties grant and agree as
follows:

 

1.            Definition of Terms.  All terms not otherwise defined herein shall
have the meaning ascribed to them in the Sale Agreement or the Disposal Services
Agreement.  Unless otherwise required by the context in which any term appears
the singular shall include the plural and the plural shall include the
singular.  In addition to the terms defined elsewhere in this Grant and in the
Sale Agreement, for purposes of this Grant, the following terms are defined as
follows:

 

a.             “Damages, Losses or Liability” means claims, demands, suits,
losses, liabilities, damages, obligations, payments, costs and expenses
(including, without limitation, the costs and expenses of any and all actions,
suits, proceedings, assessments, judgments, settlements and compromises relating
thereto and reasonable attorneys’ fees and reasonable disbursements in
connection therewith).

 

b.             “Grantor Party” or “Grantor Parties” means Grantor, its
Affiliates and/or Grantor’s successors.

 

c.             “Damages, Losses or Liability that arise solely out of the
Inherent Nature of the Permitted Materials” means Damages, Losses or Liability
that arise out of the nature of the Permitted Materials and that would occur
even if the Permitted Materials were disposed of in accordance with all Laws,
including Nuclear Laws and Environmental Laws, and in accordance with practices,
methods and activities generally accepted in the radioactive waste disposal
industry as good practices applicable to the disposal of Class A Low Level Waste
and that are consistent with good business practices and safety.

 

d.             “Permitted Materials” means all Class A Low Level Waste situated
at the Zion Station Site as of the date of this Grant or created during the
course of Decommissioning the Zion Station Site and which is compliant with the
Clive Facility WAC on the date of disposal under this Grant.

 

2.            Grant of Easement.  Grantor hereby grants and sets over to
Grantee, its successors and assigns, an irrevocable easement to dispose of and
deposit up to 7,500,000 cubic feet of Permitted Materials in, on, and over the
Easement Area, and related access, ingress and egress on and over rail spurs,
roads driveways and other surface areas as necessary to dispose of Permitted
Materials in licensed and permitted disposal cells, to be exercised by Grantee,
its successors and assigns, or their respective independent

 

2

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contractors retained to handle and process Permitted Materials solely in
accordance with the terms and conditions of this Grant (the “Easement”).

 

3.            Disposal of Materials.  If Grantee or an independent contractor of
Grantee, other than a Grantor Party, disposes of any Permitted Materials
pursuant to this Grant, any disposal shall be undertaken in accordance with the
following terms, conditions and agreements:

 

a.             Compliance with Law and Good Practices.  Such disposal shall be
undertaken in accordance with all Laws, including Nuclear Laws and Environmental
Laws, and in accordance with practices, methods and activities generally
accepted in the radioactive waste disposal industry as good practices applicable
to the disposal of Class A Low Level Waste and that are consistent with good
business practices and safety.

 

b.             Indemnification.  Grantee waives, releases and agrees to
indemnify, hold harmless and defend (with legal counsel selected by Grantee) the
Grantor Parties from and against any and all Damages, Losses or Liability of any
nature on account of injury to persons, loss of life, or damage to property,
and/or that pertain to Environmental Claims, in each case to the extent arising
out of the exercise of Grantee’s rights under this Grant, other than those
Damages, Losses or Liability that arise out of the Inherent Nature of the
Permitted Materials or the violation of applicable Law, any act or omission of a
Grantor Party, or any breach or failure in performance of any contractual
obligation of a Grantor Party.

 

c.             Hazardous Substances.  Grantee may only use Hazardous Substances
within the Easement Area as are reasonably necessary to complete disposal of the
Permitted Materials, and solely in accordance with generally recognized industry
standards and all Environmental Laws.  Except for materials used in accordance
with the standards set forth above and the Permitted Materials, Grantee shall
not create, generate, store, treat, emit, dispose of, release, threaten to
release, or cause to be created, generated, stored, treated, emitted, disposed
of, released, or threatened to be released any Hazardous Substance or Nuclear
Material on, over or under the Easement Area, or any property adjacent thereto. 
If Grantee breaches any of its obligations set forth in this paragraph, Grantee
shall, upon a Grantor Party’s request and at Grantee’s sole cost and expense,
promptly and diligently undertake, perform and complete any and all activities
necessary, to the extent allowable at law, to remove, remediate and eliminate
any and all Hazardous Substances present in the Easement Area or any property
adjacent thereto by reason of such breach and to obtain appropriate governmental
agency certification that such removal, remediation and elimination are
complete.

 

d.             No Liens.  Grantee shall not permit any lien or claim of
mechanics or laborers to be filed against the Easement Area, or part or parts
thereof, for any work, labor or materials furnished, alleged to have been
furnished or to be furnished pursuant to any agreement by, through or under the
Grantee (“Lien”) other than Liens in favor of a Grantor Party or arising by,
through or under a Grantor Party.  Within thirty (30) days after the date of the
filing or recording of any such Lien, Grantee shall cause the same to be paid
and discharged of record or bonded over or to initiate proceedings challenging
the

 

3

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validity of any such Lien.  If such a proceeding results in a final judgment
(not subject to further appeal) upholding the validity of the Lien, Grantee
shall pay and discharge the Lien of record within thirty (30) days after the
date of the entry of such judgment.  If Grantee does not pay and discharge any
such Lien within the above time periods, a Grantor Party may pay and discharge
the Lien.  In such event, the amount the Grantor Party paid to discharge the
Lien together with all other related Damages, Losses, or Liability of the
Grantor Party shall be deemed to be an obligation of Grantee immediately owing
to the Grantor Party.

 

e.             Damage to Property.  Grantee shall promptly repair or replace at
its cost and expense any property or facilities of the Grantor Parties damaged
or injured by the acts or omissions of Grantee or its agents in the course of
conducting any activities within the Easement Area.  Except for acts of gross
negligence or intentional misconduct, Grantee shall not be responsible for the
restoration of any land that is physically disturbed as a result of activities
undertaken pursuant to this Grant or the repair or replacement of property or
facilities that may be required by reason of acts or omissions of a Grantor
Party; provided that Grantee shall not be required to restore land that is
physically disturbed to a degree or extent that would reasonably be expected to
result from normal use of the Clive Facility or repair or replace property or
facilities subject to wear and tear to a degree or extent that would reasonably
be expected to result from normal use of such property or facilities in the
ordinary course of operation of the Clive Facility.

 

4.             Term of Easement.  The Easement shall continue until such time as
all of the Permitted Materials have been disposed of either at the Clive
Facility or some other properly permitted Low Level Waste disposal facility. 
When such material has been so disposed of, this Grant shall automatically lapse
and expire and, within ten (10) business days after Grantor’s or its successor’s
written request therefor, Grantee shall deliver to Grantor or its successor a
recordable release of this Grant.

 

5.             Covenants to Run With the Land.  Subject to Paragraph 4, the
easement, covenants, terms and conditions of this Grant and the rights related
thereto shall constitute covenants running with the land, and shall burden the
Easement Area as the servient estate and shall be binding upon Grantor and its
successors, assigns, and any person acquiring an interest in the Easement Area.

 

6.     No Fees or Charges.   No fee, charge or other cost shall be imposed by
Grantor on the exercise by Grantee or any independent contractor of Grantee of
rights under this Grant.  The foregoing shall not preclude the payment of fees
or charges that may become due a Grantor Party for services related to the
transportation, treatment, processing or other handling of Permitted Materials
under a separate agreement between Grantee and a Grantor Party.

 

7.             Assignment.  This Grant and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns.  Grantee may assign its rights and obligations
under this Grant, in whole or in part, to Zion Solutions and its successors and
assigns.  Grantee shall not otherwise assign its rights and obligations under
this Grant without the prior written consent of Grantor.

 

4

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8.             Amendment, Modification and Waiver.  This Grant may be amended,
modified or supplemented by written agreement of Grantor and Grantee only with
the prior written consent of Zion Solutions and Exelon, which consent may be
withheld in the sole discretion of Zion Solutions and Exelon.  No failure or
delay of any Party to exercise any right or remedy under this Grant shall
constitute a waiver of such or any other right or remedy hereunder.  Any failure
of a Party to comply with any obligation, covenant, agreement or condition
herein may be waived by the Party entitled to the benefits thereof only by a
written instrument signed by the Party granting such waiver, but such waiver of
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent failure to comply therewith.

 

 

 

ENERGYSOLUTIONS, LLC

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

 

 

 

[NAME OF TRUST COMPANY OF BUYER BACKUP NDT TRUST]

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

5

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STATE OF

)

 

: ss.

COUNTY OF

)

 

The foregoing instrument was acknowledged before me this     day of            ,
200    by                                                  , the
                                               of ENERGYSOLUTIONS, LLC, a Utah 
limited liability company.

 

 

 

 

 

 

 

NOTARY PUBLIC

 

 

 

My Commission Expires:

 

Residing at:

 

 

 

 

 

 

 

STATE OF

)

 

: ss.

COUNTY OF

)

 

The foregoing instrument was acknowledged before me this     day of            ,
200    by                                                  , the
                                               of [NAME OF TRUST COMPANY OF
BUYER BACKUP NDT TRUST], a                                    trust company.

 

 

 

 

 

 

 

NOTARY PUBLIC

 

 

 

My Commission Expires:

 

Residing at:

 

 

 

 

 

 

 

6

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LENDER CONSENT AND SUBORDINATION

 

Each of the undersigned, FIRST AMERICAN TITLE INSURANCE COMPANY, a California
corporation, in its capacity as Trustee under that certain Utah Deed of Trust
and Fixture Filing dated as of January 31, 2005, which was recorded on
January 31, 2005, as Entry No. 235387 (as amended, supplemented, modified and
restated, the “Deed of Trust”), and CITICORP NORTH AMERICA, INC., a         
corporation, in its capacity as the successor in interest and assignee of Calyon
New York Branch as the Administrative Agent and Collateral Agent under the Deed
of Trust, which have an interest in the Easement Area above described pursuant
to the Deed of Trust, do hereby irrevocably consent to the foregoing Easement
and subordinate their interests, and the interests of all lenders under the
Credit Agreement (as defined in the Deed of Trust) in the Easement Area to such
Easement.

 

IN WITNESS WHEREOF, each of the undersigned has executed and delivered this
instrument as of this        day of                    20  .

 

 

FIRST AMERICAN TITLE INSURANCE COMPANY

 

 

 

BY:

 

 

 

 

 

NAME:

 

 

 

 

 

TITLE:

 

 

STATE OF                   

 

COUNTY OF                   

 

I,                              , a Notary Public in and for the State and
County aforesaid, do hereby certify that                       , personally
known to me to be the same person whose name is subscribed to the foregoing
instrument, appeared before me this day in person and acknowledged that he/she
signed and delivered such instrument as his/her free and voluntary act, for the
uses and purposes therein set forth.

 

Given under my hand and notarial seal this      day of               20  .

 

 

 

 

My Commission Expires

 

Notary Public

 

CITICORP NORTH AMERICA, INC.

 

7

--------------------------------------------------------------------------------

 

 

BY:

 

 

 

 

 

NAME:

 

 

 

 

 

TITLE:

 

 

STATE OF                   

 

COUNTY OF                   

 

I,                              , a Notary Public in and for the State and
County aforesaid, do hereby certify that                       , personally
known to me to be the same person whose name is subscribed to the foregoing
instrument, appeared before me this day in person and acknowledged that he/she
signed and delivered such instrument as his/her free and voluntary act, for the
uses and purposes therein set forth.

 

Given under my hand and notarial seal this      day of               20  .

 

 

 

 

My Commission Expires

 

Notary Public

 

 

[Add similar consents and subordinations from

other holders of mortgages or deeds of trust, if any.]

 

8

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Exhibit A

 

The Easement Area

 

BEGINNING at the Northeast Corner of Section 32, Township 1 South, Range 11
West, Salt Lake Base and Meridian, and running thence South 00°34’50” West along
the Section line 2592.91 feet to the East Quarter Corner of said Section 32;
thence South 01°21’27” West along the Section line 2691.83 feet to the Southeast
Corner of said Section 32; thence North 88°55’29” West along the Section line
2641.70 feet to the South Quarter Corner of said Section 32; thence North
88°55’07” West along the Section line 2642.25 feet to the Southwest Corner of
said Section 32; thence North 01°00’42” East along the Section line 2642.11 feet
to the West Quarter Corner of said Section 32; thence North 01°00’24” East along
the Section line 2642.53 feet to the Northwest Corner of said Section 32; thence
North 01°00’11” East along the Section line 330.24 feet to the Northwest Corner
of the South Half of the South Half of the South Half of the Southwest Quarter
of Section 29, Township 1 South, Range 11 West, Salt Lake Base and Meridian;
thence South 88°54’12” East along the North line of said South Half of the South
Half of the South Half of the Southwest Quarter 2640.41 feet to the Northeast
Corner of said South Half of the South Half of the South Half of the Southwest
Quarter; thence South 88°57’22” East along the North line of the South Half of
the South Half of the Southwest Quarter of the Southeast Quarter of said
Section 29, 1320.21 feet to the Northeast corner of said South Half of the South
Half of the Southwest Quarter of the Southeast Quarter; thence South 00°59’25”
West along the West line of said South Half of the South Half of the Southwest
Quarter of the Southeast Quarter, 330.21 feet to the South line of said
Section 29; thence South 88°55’17” East along said South line 1320.23 feet to
the point of beginning.

 

LESS AND EXCEPTING THE FOLLOWING:

 

Beginning at a point located 1120.32 feet North 88º55’17” West along the
Section Line and 329.49 feet South 01º00’43” West from the Northeast Corner of
Section 32, Township 1 South, Range 11 West, Salt Lake Base and Meridian; and
running thence North 88º55’49” West 1503.72 feet; thence South 01º04’06” West
2880.50 feet; thence South 88º55’49” East 1503.72 feet; thence North 01º04’06”
East 2880.50 feet to the point of beginning.

 

[Legal description of Easement Area must be verified

to the satisfaction of Exelon prior to execution]

 

A-1

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[g361503ke51i001.jpg]

 

EXHIBIT H

 

ENERGYSOLUTIONS, LLC

DISPOSAL AGREEMENT

 

THIS AGREEMENT made and entered into as of this          day of
                  200   (Agreement) by and between          [NAME OF TRUST
COMPANY OF BUYER BACKUP NDT TRUST], as Trustee (Customer), and ENERGYSOLUTIONS,
LLC, a Utah limited liability company (EnergySolutions).

 

 RECITALS:

 

A.            Exelon Generation Company, LLC (Exelon), EnergySolutions,
EnergySolutions, Inc., and ZionSolutions, LLC, a wholly owned subsidiary of
EnergySolutions (Zion Solutions), have entered into that Asset Sale Agreement,
dated as of   December 11, 2007, pursuant to which Exelon agreed, subject to the
terms and conditions of the Asset Sale Agreement, to, among other things, sell,
assign, convey, transfer and deliver all of its right, title and interest to the
Zion Assets to Zion Solutions;

 

B.            EnergySolutions has entered into that Performance Guarantee, dated
of December 11, 2007 (the Performance Guarantee) pursuant to which
EnergySolutions has agreed to guarantee, among other things, when due, all
obligations of Zion Solutions under the Asset Sale Agreement;

 

C.            Exelon and EnergySolutions have entered into that Pledge
Agreement, dated as of            , 200  (the Pledge Agreement), pursuant to
which EnergySolutions pledged to Exelon 100% of EnergySolutions equity interests
in Zion Solutions as collateral for its obligations under the Performance
Guarantee;

 

D.            The Asset Sale Agreement provides that Zion Solutions shall create
and maintain the Buyer Backup NDT, separate from the Buyer NDF and Buyer QDF to
serve as an additional or backup decommissioning funding assurance for the Zion
Station Site;

 

E.             The Asset Sale Agreement provides that the Buyer Backup NDT shall
hold the Disposal Capacity Asset, consisting of the Irrevocable Easement for
Disposal Capacity and this Agreement, which combined provide for an assignable
and marketable asset created for the benefit of the Buyer Backup NDT through an
irrevocable right to capacity at EnergySolutions’ Clive, Utah Facility (the
Facility) for the disposal of any or all of the WAC-compliant Class A Low Level
Waste situated in the Zion Station Site and waste material situated in the Zion
Station Site that can be made WAC-compliant through treatment, processing or
other handling in accordance with this Agreement  upon the occurrence of any
Event of Default (as defined in the Pledge Agreement);

 

F.             Upon and following an Event of Default Customer may desire to
have EnergySolutions receive, dispose and treat, as appropriate, the Waste
Material as listed and described in Schedule “A” (Waste Material) at the
Facility, which has been duly licensed and/or permitted by the State of

 

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Utah, the United States Nuclear Regulatory Commission and the United States
Environmental Protection Agency for the management and disposal of the Waste
Material, as appropriate;

 

G.            Incorporated by reference is EnergySolutions’ license #UT2300249
with amendments, issued by the State of Utah; Mixed Waste Permit UTD982598898,
with amendments, issued by the State of Utah; Hazardous Solid Waste Permit
UTD982598898 issued by the United States Environmental Protection Agency; Ground
Water Quality Discharge Permit No. UGW450005, with amendments, issued by the
State of Utah; 11e.(2) Byproduct Material License SMC-1559, with amendments,
issued by the United States Nuclear Regulatory Commission; and EnergySolutions
Waste Acceptance Criteria (WAC). Said licenses, permits and WAC are hereinafter
collectively called “EnergySolutions’ License.” The receipt, handling, storage,
treatment and disposition of the Waste Material are also subject to numerous
governmental laws, rules, regulations, ordinances, actions and requests
(collectively the Regulations).  EnergySolutions’ License allows EnergySolutions
to receive, store, treat, and dispose of the Waste Material.  Customer has
reviewed EnergySolutions’ License and is familiar with the Regulations. 
Customer agrees to comply with EnergySolutions’ License and all Regulations for
Waste Material covered under this Agreement, to the extent applicable to
Customer; and

 

H.            Upon and following an Event of Default EnergySolutions is willing
to receive, handle, store, treat, and dispose of the Waste Material in
accordance with the terms and conditions of this Agreement, EnergySolutions’
License and pursuant to all applicable Regulations.

 

NOW, THEREFORE, in consideration of the payments to be made by Customer to
EnergySolutions as herein provided, and the mutual covenants and agreements
herein contained, Customer hereby engages EnergySolutions and EnergySolutions
hereby agrees to receive, handle, store, treat, and dispose, as applicable, the
Waste Material upon the terms and conditions hereinafter set forth.

 

All capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Asset Sale Agreement.

 

1.     TERM OF AGREEMENT.

 

(a)   Term.  This Agreement shall commence on the date hereinabove indicated and
it shall terminate upon removal of all of the WAC-compliant Class A Low Level
Waste situated in the Zion Station Site, or Waste Material situated in the Zion
Station Site that can be made WAC-compliant through treatment, processing or
other handling in accordance with this Agreement, that is required to be removed
by the NRC or any other governmental authority with jurisdiction to impose
removal requirements unless this Agreement is terminated earlier as provided in
this Agreement.

 

(b)   Condition to Effectiveness.  EnergySolutions’ obligations to receive,
handle, store, treat, and dispose, as applicable, the Waste Material under this
Agreement shall only become effective upon the occurrence of an Event of
Default.

 

2

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2.     WASTE MATERIAL.

 

(a) EnergySolutions has reserved adequate space at the Facility to receive all
Waste Material during the term of this Agreement pursuant to the terms of the
Irrevocable Easement for Disposal Capacity.   Pursuant to the Irrevocable
Easement for Disposal Capacity, EnergySolutions has reserved 7,500,000 cubic
feet of space in the Facility for Waste Material.

 

(b) The Waste Material to be received and disposed of under this Agreement shall
be only of the type set forth in  Schedule “A.”  Prior to Customer delivering
the Waste Material to EnergySolutions for handling and management under this
Agreement, Customer shall prepare and submit to EnergySolutions, for
EnergySolutions’ approval, all certifications reasonably required by
EnergySolutions and EnergySolutions’ License to assure EnergySolutions that the
Waste Material is as specified in Schedule “A” and meets the requirements for
handling and management at the Facility.  Customer represents and warrants that
the information contained in its completed Waste Profile Forms is true and
correct, and Customer acknowledges that EnergySolutions can rely on the
information contained in such Waste Profile Forms.  Customer’s Waste Profile
Forms shall identify separate Waste Streams.  Customer shall commence shipment
or delivery of the Waste Material to EnergySolutions only upon approval by
EnergySolutions in accordance with Schedules “A” and “B,” which approvals shall
not be unreasonably withheld, delayed or conditioned.

 

(c) Customer may deliver Waste Material for handling, storage, treatment and
disposal at the Facility as set forth in  Schedule “A”. Under no circumstances
shall Customer be liable to EnergySolutions for failure to deliver any
particular quantity of Waste Material to the Facility for disposal by
EnergySolutions.  In the event that, at any time or from time to time, the
equipment, facilities, materials, personnel or other resources of
EnergySolutions are insufficient, for any reason, to handle, store, treat, or
otherwise provide disposal services on a timely and efficient basis for Customer
and other customers of EnergySolutions, EnergySolutions shall, to the extent
permitted under EnergySolutions’ contracts with other customers, perform
disposal services for Customer under this Agreement on a priority basis.  If and
to the extent that such priority treatment for Customer would constitute a
breach by EnergySolutions of agreements with other customers, EnergySolutions
may allocate its available equipment, facilities, materials, personnel and other
resources among Customer and such other customers on a pro-rata basis according
to their respective requirements at that time.

 

(d) Customer shall properly complete, execute and deliver to EnergySolutions all
forms identified by EnergySolutions as pertaining to the Waste Material and
which are required by EnergySolutions’ License or the Regulations, all of which
forms are available from EnergySolutions.  Upon receipt and approval of fully
executed forms by EnergySolutions, such forms, approvals and supporting
information shall be incorporated by reference in Schedule “A” and shall
constitute the description of the Waste Material pursuant to this Agreement. 
Customer shall allow EnergySolutions to audit Customer’s Waste Material
characterization process.   Additionally, with regard to Waste Material that
contains hazardous waste, Customer shall

 

3

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complete properly and in full and execute and deliver to EnergySolutions all
forms that pertain to such Waste Material, including hazardous waste manifests
and notices and certifications as required of a hazardous waste generator
(and/or treater) as provided in 40 CFR 262 Subpart B and 40 CFR 268.7. 
EnergySolutions shall be entitled to rely on the information and data set forth
in said forms as true and correct.  All said forms must be signed by Customer or
Customer’s authorized representative and identify separate waste streams.  Said
forms shall also be signed by such other persons or entities as EnergySolutions
may reasonably require.

 

3.    TREATMENT.

 

EnergySolutions will treat for disposal Waste Material in Schedule “A” to be
delivered for treatment.  EnergySolutions now has or will use its best efforts
to formulate a waste treatment method and shall perform treatment pursuant to
such method for the purpose of treatment to a standard that will permit disposal
of such Waste Material at the Facility.  Customer shall retain the right to
review and approve waste treatment, processing or other handling methods that
are used to make Waste Materials WAC-compliant Class A Low Level Waste through
treatment.  EnergySolutions does not assure or warrant that it will be able to
formulate a suitable treatment method or formula, nor that treatment will allow
the Waste Material to be disposed at the Facility; provided that EnergySolutions
shall treat Non-Conforming Waste Material in accordance with the requirements of
Paragraph 4.   If such treatment is not successful with respect to all the Waste
Material to be disposed at the Facility in accordance with EnergySolutions’
License and the Regulations and the Waste Material shall be Non-Conforming Waste
Material pursuant to Paragraph 4(a)(2), Customer shall be responsible for
payment of EnergySolutions’ costs associated with the Non-Conforming Waste
Material set forth in Paragraph 4(c).  Any fines or costs otherwise required to
be paid by Customer pursuant to Paragraph 4 shall not apply to any waste that
was originally contracted to be treated by EnergySolutions, to the extent that
EnergySolutions caused the action that created the fine or cost.

 

4.     NON-CONFORMING WASTE MATERIAL.

 

ENERGYSOLUTIONS SHALL, AT THE REQUEST OF CUSTOMER AND SUBJECT TO PAYMENT UNDER
PARAGRAPH 10, PERFORM A WALK-DOWN OF THE ZION STATION SITE WITH CUSTOMER AND
ASSIST CUSTOMER IN THE DEVELOPMENT OF PROFILES FOR MATERIALS AT THE ZION STATION
SITE FOR THE ESTABLISHMENT OF WASTE PROFILES AND TO PREVENT THE SHIPMENT OF
NON-CONFORMING WASTE MATERIAL TO THE FACILITY.

 

(a) Shipments of Waste Material shall be considered Non-Conforming Waste
Material, when:

 

(1) it is not in accordance with the analyses, descriptions, specifications or
limitations stated in Customer’s approved waste description forms and Waste
Profile Forms, as required pursuant to Paragraph 2 and Schedule “A;” or

 

(2) after treatment by EnergySolutions using scientifically accepted standards
and procedures the Waste Material is not then in compliance with the standards
for treated Waste Material as set forth in EnergySolutions’ License or the
Regulations; or

 

4

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(3) the Waste Material does not comply with  EnergySolutions’ License or the
Regulations other than for lack of treatment as required by this Agreement,
including, but not limited to,  manifesting errors, failures to comply with
Department of Transportation (DOT) transportation requirements, etc. (i.e., a
customer shipment without a Notice to Transport from EnergySolutions is
prohibited under EnergySolutions’ License and, therefore, it is a Non-Conforming
Waste Material shipment).

 

(b) Upon discovering any Non-Conforming Waste Material shipped to the Facility
by Customer, EnergySolutions will perform treatment or further treatment of the
Non-Conforming Waste Material so as to allow disposal at the Facility, to the
extent possible.   If such treatment or further treatment of such Non-Conforming
Waste Material is not effective to allow disposal of such Non-Conforming Waste
material at the Facility, EnergySolutions will give prompt written notification
to Customer.  The notice shall advise of which of the following steps
EnergySolutions intends to take with regard to the Non-Conforming Waste Material
and, except as limited or precluded by action or demand of a governmental
authority, said notification shall be given not less than two (2) Working Days
prior to EnergySolutions implementing those steps:

 

(1) perform treatment or further treatment of the Non-Conforming Waste Material
so as to allow disposal;

 

(2) to the extent it is not possible to perform treatment or further treatment
of the Non-Conforming Waste Material so as to allow disposal at the Facility,
perform other suitable management practices that are prudent considering the
nature of the Non-Conforming Waste Material, the Regulations, and input from
regulatory authorities;

 

(3) to the extent it is not possible to perform treatment or further treatment
of the Non-Conforming Waste Material so as to allow disposal at the Facility or
perform other suitable management practices that are prudent considering the
nature of the Non-Conforming Waste Material, the Regulations, and input from
regulatory authorities, remove or cause to be removed any Non-Conforming Waste
Material from the Facility;

 

(4) subject to paragraph 4(e), make its own arrangements to cause such Waste
Material to be returned to Customer at Customer’s cost, if within a reasonable
time after demand, Customer fails or refuses to undertake and complete removal
of the Non-Conforming Waste Material from the Facility;

 

(5) suspend Customer’s right to ship Waste Material to EnergySolutions, until
Customer has fully addressed all matters related to shipments of Non-Conforming
Waste Material in accordance with the requirements of EnergySolutions’ License
and the Regulations.

 

(c) EnergySolutions may charge Customer for all direct costs incurred by
EnergySolutions arising out of its management of the Non-Conforming Waste
Material.  These costs may include EnergySolutions’ expenses reasonably incurred
for any treatment or attempted treatment of the

 

5

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Non-Conforming Waste Material, disposal of the Non-Conforming Waste Material at
the Facility, any fines or penalties levied against EnergySolutions, and all
other charges, rates, expenses, fees, and damages arising out of EnergySolutions
management of such Non-Conforming Waste Material, including the preparation for
removal and/or removal of the Non-Conforming Waste Material plus any additional
charges specified in Schedule “C.”

 

(d) In the event that EnergySolutions determines that Waste Material is
Non-Conforming Waste Material after it has been treated and disposed at the
Facility, EnergySolutions may charge Customer an amount equal to the costs
reasonably incurred by EnergySolutions to retrieve and dispose the Waste
Material, plus any additional charges, as specified in Schedule “C”.

 

(e) All direct costs and expenses, fees and direct damages associated with
transporting and preparing to transport Non-Conforming Waste Material from the
Facility shall be paid by Customer.  EnergySolutions shall invoice Customer for
the Non-Conforming Waste Material in accordance with Paragraph 9. Customer shall
be given a reasonable opportunity to arrange for the return of Non-Conforming
Waste Material by such means of transport as Customer shall select.  If Customer
does not so arrange for transportation for the return of Non-Conforming Waste
Material within twenty (20) Working Days after being advised by EnergySolutions
of the existence of such Non-Conforming Waste Material, EnergySolutions may
arrange for return of the Non-Conforming Waste Material to Customer, in which
event such Non-Conforming Waste Material shall be transported to Customer by
such reasonable means of transportation as EnergySolutions shall select and
EnergySolutions shall ensure that such transportation meets all applicable
regulatory requirements applicable to the transportation of such material.

 

(f) Customer agrees to maintain all necessary licenses and permits to receive
all returned Non-Conforming Waste Material at Customer’s facility, or Customer
shall designate an alternate facility that is fully licensed and permitted to
receive Non-Conforming Waste Material shipped from the Facility.  Customer
further agrees to be prepared to receive such Non-Conforming Waste Material at
its facility or a designated facility within twenty (20) Working Days after
notification by EnergySolutions.

 

(g) Customer shall pay and save harmless and indemnify EnergySolutions from any
and all direct costs and losses, or other direct damages incurred by
EnergySolutions arising out of its treatment and handling of Non-Conforming
Waste Material, excluding treatment and handling for which charges are specified
in this Agreement, including payment of any demurrage, terminal or storage
charges invoiced to EnergySolutions by the carrier transporting the Waste
Material to the Facility.

 

6

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5.     TRANSPORTATION AND DELIVERY.

 

(a) Customer shall transport and deliver the Waste Material or cause it to be
transported and delivered to the Facility in the manner and pursuant to the
schedule specified in Schedule “B.”  The Waste Material shall be transported and
delivered only as follows: (1) in vehicles or rail cars, (2) in bulk or packaged
as required by DOT in 49 CFR 173, 178 and 179 and other applicable regulations
and as approved by EnergySolutions in writing before loading and shipment (which
approval will not be unreasonably withheld, delayed or conditioned), and (3) in
accordance with EnergySolutions’ License and the Regulations.  All Waste
Material will be packaged in accordance with the Regulations, including 49 CFR
regulations for radioactive material.  Unless otherwise agreed, EnergySolutions
shall have no responsibility for arranging for, scheduling or transporting the
Waste Material.

 

(b) A Uniform Low-Level Radioactive Waste Manifest (Manifest) shall be completed
properly and in full and executed by Customer and delivered to EnergySolutions
for and together with each loaded transport vehicle.  Customer shall comply with
all applicable regulations regarding shipping papers and, when applicable, the
requirements for hazardous waste manifests.  Additionally, Customer shall
provide to EnergySolutions a copy of the completed and executed Manifest prior
to arrival at the Facility of the shipment for which the Manifest has been
prepared.  All Waste Material shipped on an individual Manifest shall be
considered a “Shipment” under the terms of this Agreement.

 

(c) If the loaded transport vehicle and/or containers do not conform to the
requirements of EnergySolutions’ License or the Regulations, or if they arrive
damaged or excessively difficult to unload, EnergySolutions shall give
notification to Customer, and advise Customer of EnergySolutions’ proposed
corrective action and an estimate of the costs to correct the problem, if any. 
Customer shall have forty-eight (48) hours to (1) advise EnergySolutions if it
does not wish EnergySolutions to proceed with the proposed corrective action or
(2) direct an alternative course of conduct. Under no circumstances shall such
transport vehicle and/or containers be considered as accepted because the same
are located at the Facility.  If EnergySolutions does not receive timely notice
from Customer not to proceed with the proposed corrective action or is not
directed to take an alternative course of conduct, EnergySolutions will proceed
with the proposed corrective action and may thereafter charge Customer the fees
identified in Paragraph 4(c) to manage such transport vehicles and/or containers
plus the direct costs incurred in the corrective work including demurrage
charges.

 

(d) EnergySolutions shall unload and release transporting vehicles and
containers as provided in Schedule “B.”  If, upon delivery or during unloading,
EnergySolutions determines that the transport vehicles and/or containers are
contaminated, leaking, or are otherwise determined to not be packaged as
required by 49 CFR 173, or Paragraph 6, EnergySolutions shall give written
notification to Customer.  EnergySolutions shall perform decontamination and
other necessary services to the transport vehicles and/or containers or, at its
option, arrange for said services to be performed.  EnergySolutions shall
invoice Customer for said services at the rates set forth in Schedule “C.”
 Customer represents and warrants that, prior to shipping to EnergySolutions,
all

 

7

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transporting vehicles were free from contamination to at least the “sole use”
standard outlined in Schedule “B.”

 

(e) Customer acknowledges that the lawful and timely disposal of the Waste
Material and any agreed treatment thereof makes critical and vital the
scheduling for delivery of the Waste Material to the Facility.  Customer,
therefore, shall deliver the Waste Material at the Facility strictly according
to the schedule and conditions set forth in Schedule “B.”

 

(f) In the event that EnergySolutions is billed by a carrier for demurrage,
terminal or storage charges for which Customer has herein agreed to make
payment, then EnergySolutions shall invoice Customer for all said demurrage and
other charges within thirty (30) business days after receipt of invoice from the
carrier.  Customer shall make payment of said invoice to EnergySolutions
pursuant to Paragraph 8.

 

6.    PACKAGING.

 

Customer shall be responsible for all packages and containers and warrants their
compliance with the requirements and specifications in Schedule “B,” and with
all rules, regulations, laws and/or ordinances which may be applicable to the
safety, packaging, storage or transportation of such containers.  Any Waste
Material found in the delivery vehicle that is not packaged as described in
Schedule “B,” in EnergySolutions’ sole discretion, will be considered
Non-Conforming Waste Material and managed as described in Paragraph 4.

 

7.    REPRESENTATIONS AND WARRANTIES.

 

(a)  CUSTOMER.  Customer represents and warrants as follows:

 

(1) All Waste Material delivered to EnergySolutions shall conform in every
material respect with the description contained in Schedule “A” and with
EnergySolutions’ License;

 

(2) Prior to delivery of the Waste Material to EnergySolutions, Customer shall
have obtained all required permits and approvals for shipment and delivery of
the Waste Material; and

 

(3) Unless EnergySolutions has otherwise agreed to provide vehicles, rail cars,
containers, packages, or equipment for the shipment, transportation, or delivery
of Waste Material, Customer and all vehicles, rail cars, containers, packages,
or equipment used by Customer in the shipment, transportation , or delivery of
the Waste Material shall comply with the Regulations and EnergySolutions’
License for operation and management of the Facility, and with all instructions
and/or regulations of the Utah Department of Environmental Quality and/or other
governmental authority having jurisdiction over the Facility and/or over the
transport of Waste Material to the Facility.

 

8

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(b) ENERGYSOLUTIONS.  EnergySolutions acknowledges the toxic and physical
characteristics of all of the Waste Material identified in Schedule “A” and
represents and warrants as follows:

 

(1) It is authorized pursuant to EnergySolutions’ License and the Regulations to
receive, store and dispose of the Waste Material at the Facility and to treat
for disposal the Waste Material identified in Schedule “A” as being delivered
for treatment and disposal;

 

(2) It shall use scientifically accepted standards and procedures approved by
applicable regulatory authorities for treatment of any of the Waste Material as
is identified in Schedule “A” as being delivered for treatment and for disposal;
and

 

(3) It shall perform its services in compliance with EnergySolutions’ License,
this Agreement, and the Regulations.

 

8.     INDEMNIFICATION.

 

(a)  To the extent caused by the Customer’s breach of any term or provision of
this Agreement, or by the negligent or willful act or omission of the Customer,
its employees, agents or subcontractors (other than EnergySolutions or its
Affiliates) in the performance of this Agreement, Customer agrees to indemnify,
save harmless and defend EnergySolutions from and against any and all
liabilities, claims, penalties, forfeitures, proceedings, suits, and the costs
and expenses incident thereto (including costs of defense, settlement, and
reasonable attorneys’ fees), which EnergySolutions may hereafter incur, become
responsible for or pay out, as a result of death or bodily injuries to any
person, destruction of property of whatever kind or any other interest, or
contamination of or adverse effect on the environment or any violation of
governmental laws, regulations or orders.

 

(b)  The indemnification obligation of Customer hereunder is subject to the
following:  (1) EnergySolutions shall provide prompt notice to Customer of any
liability, damage, claim or other action for which EnergySolutions may seek
indemnification; (2) except in the case in which Customer is an adverse party to
EnergySolutions, Customer shall have the opportunity to participate fully, at
its expense, in any administrative or judicial proceeding, including any
settlement negotiations, with respect to any claim for which indemnification may
be sought and (3) EnergySolutions shall be obligated to exert reasonable efforts
to mitigate any loss or damage for which it may seek indemnification.

 

(c)  To the extent caused by EnergySolutions’ breach of any term or provision of
this Agreement, or by the negligent or willful act or omission of
EnergySolutions or its Affiliates, or their respective employees, agents or
subcontractors in the performance of this Agreement, EnergySolutions shall
indemnify, save harmless and defend Customer from and against any and all
liabilities, claims, penalties, forfeitures, proceedings, suits, and the costs
and expenses incident thereto (including costs of defense, settlement, and
reasonable attorneys’ fees), which Customer may hereafter incur, become
responsible for or pay out, as a result of death or bodily injuries to any

 

9

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person, destruction of property of whatever kind or any other interest, or
contamination of or adverse effect on the environment or any violation of
governmental laws, regulations or orders.

 

(d)  The indemnification obligation of EnergySolutions hereunder is subject to
the following:  (1) Customer shall provide prompt notice to EnergySolutions of
any liability, damage, claim or other action for which Customer may seek
indemnification; (2) except in the case in which EnergySolutions is an adverse
party to Customer, EnergySolutions shall have the opportunity to participate
fully, at its expense, in any administrative or judicial proceeding, including
any settlement negotiations, with respect to any claim for which indemnification
may be sought and (3) Customer shall be obligated to exert reasonable efforts to
mitigate any loss or damage for which it may seek indemnification.

 

9.     LIMITATION OF LIABILITY; DAMAGES

 

(a)  Regardless of any other provision of this Agreement, under no circumstance
will EnergySolutions be liable to Customer, nor will Customer be liable to
EnergySolutions, whether in contract, tort (including negligence and strict
liability) under any warranty or otherwise for any incidental, indirect, special
or consequential damages of any kind, nature or amount whatsoever, including but
not limited to loss of profits or revenue, even if advised of the possibility of
such damages, except as otherwise provided in this Paragraph 9.

 

(b)  In the event of a breach or failure in performance of this Agreement by
EnergySolutions, the effect of which is to prohibit or delay the handling,
storage, treatment or disposal of Waste Material shipped to the Facility by
Customer, in addition to any other damages of any kind or nature that Customer
may be entitled to recover as a consequence thereof, Customer shall be entitled
to recover from EnergySolutions: (1) the full cost of obtaining substitute
disposal services and materials from another source in excess of the costs that
Customer would be required to pay for such services and materials under this
Agreement; (2) the incremental cost incurred by Customer in transporting such
Waste Material to obtain such disposal services from another source; (3) any
additional costs that Customer may incur in disposing of such Waste Material at
the Facility or at another facility licensed to accept such Waste Material;
(4) the incremental cost incurred by Customer in transporting such Waste
Material to another facility licensed to accept such Waste Material if such
Waste Material cannot be disposed at the Facility; (5) the costs of demurrage,
terminal or storage occasioned by any delay in processing such Waste Material or
delay in acceptance at the Facility or another facility licensed to accept such
Waste Material; (6) incremental costs of permitting and licensing; and (7) costs
of enforcement of this Agreement and collection of damages.

 

(c)  The provisions of this Paragraph 9 shall apply and control notwithstanding
any other conflicting or inconsistent provision of this Agreement, to the
fullest extent permitted by applicable law.

 

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10.   PAYMENT.

 

(a) All obligations of EnergySolutions for the disposal of the Waste Material
shall be performed as and when required under this Agreement without any payment
or obligation of Customer to EnergySolutions.

 

(b) All obligations of EnergySolutions for the handling, storage, and treatment
of the Waste Material shall be performed as and when required under this
Agreement without any payment or obligation of Customer to EnergySolutions,
other than the rates for services provided in Schedule “C”.  If EnergySolutions
incurs any of the following direct out-of-pocket costs in performing services
under this Agreement for which no rate of charge is specified in Schedule “C”,
EnergySolutions may charge its direct out-of-pocket costs incurred in the
performance of such services plus a mark-up of fifteen percent (15%) for any
such costs other than taxes and fees payable to any governmental entity and
purchases of materials or services from an Affiliate:

 

1.               Costs of treatment and/or processing of the Waste Material.

2.               Costs of permits relating to the disposal of the Waste
Material.

3.               Costs relating to the characterization of the Waste Material.

4.               Costs relating to the packaging of the Waste Material.

5.               Costs relating to the transportation of the Waste Material.

6.               Costs relating to the decontamination of containers.

7.               Costs and payments specified in Paragraph 4 with respect to
Non-Conforming Waste Material.

8.               Any other cost of service other than direct disposal of the
Waste Material.

9.               Any and all federal, state and local taxes (excepting income
and general real property taxes) and fees (including, but not limited to, fees
for the long term care and site closure of the Facility) which may be imposed by
a governmental entity after the date of this Agreement for Customer’s Waste
Material delivered to the Facility.

10.         General Revenue Taxes imposed by the State of Utah.  Customer agrees
to make payment to EnergySolutions for such taxes and/or fees as separate
invoice line item.

 

(c) For payment purposes, volume or weight measurements of the Waste Material
shall be made by EnergySolutions at any time prior to treatment as specified in
Schedule “C.”

 

(d) EnergySolutions shall submit appropriate invoices to Customer as specified
in Schedule “C.”  EnergySolutions shall keep copies of said invoices for a
period of at least two (2) years.  All invoices shall be due and payable by
Customer within thirty (30) days after receipt.    Subject to Paragraph 10(e),
interest will accrue on unpaid amounts thirty (30) days from the invoice date at
one and one-half percent (1.5%) per month (but not to exceed the lawful
applicable rate).  Said interest is payable at the time of payment of the unpaid
amount. Customer shall be liable to EnergySolutions under this Agreement for all
reasonable costs, expenses, and attorney’s fees, incurred by EnergySolutions in
collecting unpaid amounts.  Subject to Paragraph 10(e), failure to pay invoices
within sixty (60) days after the invoice date shall constitute a material breach
of this Agreement, and EnergySolutions may, in its sole discretion, suspend
Customer’s shipping

 

11

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privileges, require Customer to prepay EnergySolutions prior to each shipment of
Waste Material or provide EnergySolutions with a cash security deposit, as
determined by EnergySolutions, declare Customer in default, or take any other
action available under the terms of this Agreement.

 

(e)  Notwithstanding any contrary provision of this Paragraph 10,
EnergySolutions acknowledges that payment by Customer to EnergySolutions may be
limited by provisions of the Lease Agreement and the Post-Closing Nuclear
Decommissioning Trust Agreement that require deferral of payment of amounts
otherwise due (but not to exceed $5,000,000 per month) in the event that Zion
Solutions fails to achieve a Site Restoration Milestone under the Lease
Agreement.  Customer shall not be deemed to be in breach or default of this
Agreement or be required to pay interest or late charges for delay in payment by
reason of such provisions of the Lease Agreement and the Post-Closing Nuclear
Decommissioning Trust.

 

11.   TITLE TO WASTE MATERIAL.

 

Upon EnergySolutions accepting and taking possession at the Facility of Waste
Material not requiring treatment and conforming to the requirements of this
Agreement, title, risk of loss, and all other incidents of ownership, to the
extent legally permissible, of that Waste Material shall thereupon transfer from
Customer to EnergySolutions.  Customer shall retain ownership of, and shall
retain risk of loss and all other liabilities and risks associated with, Waste
Material arriving at the Facility for treatment until such time as
EnergySolutions has completed treatment of said Waste Material and accepted it
for disposal at the Facility in its treated condition (or at such earlier time
as EnergySolutions is required to do so under this Agreement), at which time
title, risk of loss and all other incidents of ownership, to the extent legally
permissible, of that Waste Material shall thereupon transfer from Customer to
EnergySolutions.  In no event shall title, risk of loss, or any other incident
of ownership transfer from Customer to EnergySolutions with regard to Waste
Material received and accepted by EnergySolutions for treatment where said
treatment undertaken and completed in accordance with this Agreement does not
qualify that Waste Material for final disposal at the Facility.  Customer shall,
upon request by EnergySolutions, sign and deliver to EnergySolutions on an
approved form, a bill of lading to all Waste Material accepted by
EnergySolutions for disposal at the Facility.  Customer shall have no right to
recovery of any material contained in the Waste Material accepted by
EnergySolutions for disposal at the Facility or any credit for its potential
value.  Title to Non-Conforming Waste Material shall not transfer to
EnergySolutions and shall remain vested in Customer until treated in accordance
with Paragraph 4 so as to allow disposal at the Facility. Title and ownership of
Waste Material shall revert to Customer if Waste Material is determined to be
Non-Conforming after ownership has transferred to EnergySolutions.  Customer
shall remain obligated in accordance with Paragraph 4 in all respects with
respect to Non-Conforming Waste Material.

 

12.   LIABILITY COVERAGE.

 

EnergySolutions shall maintain, at its expense, at least the following liability
insurance coverage during the time that Waste Material is being received at the
Facility and treated and/or disposed under this Agreement.

 

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COVERAGE

 

LIMITS

 

 

 

(a)

Workman’s Compensation

 

Statutory

(b)

Employer’s Liability

 

$500,000 each occurrence

(c)

General Liability

(Bodily Injury and Property Damage)

 

$1,000,000 each claim

$2,000,000 aggregate limit

(d)

Pollution Liability

 

$5,000,000 each loss

 

 

 

$5,000,000 total for all losses

(e)

Automotive Liability

(Bodily Injury and Property Damage)

 

$1,000,000 combined single limit

(f)

Nuclear Liability

 

$300,000,000

 

Shippers & Transporters

 

 

 

13.   FORCE MAJEURE.

 

The performance of this Agreement, except for the payment of money owing for
services actually rendered hereunder, may be suspended or deferred by a party to
the extent such party’s performance is affected by national defense
requirements, any act of God, weather, war, terrorism, riot, fire, explosion,
accident, flood, sabotage, an order, directive or request of a governmental
agency that delivery, transportation, acceptance, treatment or disposal of the
Waste Material be suspended or terminated, the lack of adequate containers or
transportation facilities (other than railcars if EnergySolutions is required to
provide railcars), any material noncompliance by the other party with
EnergySolutions’ License, the Regulations, governmental requirements, laws,
regulations, orders or actions, or any similar event beyond the reasonable
control of either party which prevents the transportation, delivery, acceptance,
treatment or disposal of the Waste Material; provided, however, any such event
shall only be considered an event of force majeure to the extent that (1) such
event is beyond the reasonable control of the non-performing party; (2) the
non-performing party is unable to prevent, avoid, overcome or cure such event
through the exercise of diligent efforts; (3) such event is not the proximate
result of the non-performing party’s act, omission, fault or negligence,
including, but not limited to, failure to maintain equipment in good working
order, failure to comply with any contract, or failure to comply with all
applicable laws and regulations; and (4) such event results in a material
impairment of the party’s ability to perform. EnergySolutions shall give prompt
written notice to Customer if any such event of force majeure shall occur or
exist, stating the events or conditions that constitute the event of force
majeure and the steps EnergySolutions is taking or intends to take to overcome
such events or conditions, if any.  Failure of EnergySolutions to provide
Customer the notice required by the preceding sentence within ninety (90) days
after the date on which the event of force majeure first occurs, or, if later,
first becomes reasonably apparent, shall be deemed a waiver of EnergySolutions’
rights relating to or arising from such event or condition. Each party shall use
diligent efforts to overcome events of force majeure.  Each party shall give
prompt written notice to the other party upon the termination of any event of
force majeure. 

 

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Notwithstanding anything to the contrary contained in this Agreement, failure or
delay of a party to provide the other party any of the notices required by this
Paragraph shall not waive such party’s rights relating to or arising from an
event of force majeure, unless such failure causes material prejudice to the
other party.

 

14.   AUTHORIZED REPRESENTATIVES.

 

THE PARTIES SHALL ACT UNDER THIS AGREEMENT THROUGH THEIR AUTHORIZED
REPRESENTATIVES IDENTIFIED IN PARAGRAPH 17.  ANY APPROVAL, NOTICE, OR OTHER
MATTER REQUIRED TO BE IN WRITING AND SIGNED, SHALL BE SIGNED BY THE PARTIES’
AUTHORIZED REPRESENTATIVES.

 

15.   INDEPENDENT CONTRACTOR.

 

Customer and EnergySolutions are each separate entities.  Neither of them, nor
their employees or agents, shall be deemed to be employees or agents of the
other.

 

16.   WAIVER, SUSPENSION, TERMINATION AND DEFAULT.

 

Any waiver by either party of the breach of any provision or condition of this
Agreement shall not be construed or deemed to be a waiver of a subsequent breach
of the same provision or condition, unless such waiver be expressed in writing
and signed by the Authorized Representative of the party to be bound.  Further,
any declaration by a party of a suspension, termination or default as provided
for under this Agreement shall be in writing and signed by that party’s
Authorized Representative.

 

17.   NOTICE.

 

Except as required by Paragraph 2 of Schedule “B”, any notice, communication or
statement required or permitted to be given hereunder shall be in writing and
deemed to have been sufficiently given when delivered in person or by mail,
postage prepaid, or by fax, or as otherwise specified herein addressed as
follows:

 

TO CUSTOMER:

 

a) For Invoices:

b) For all other communications and Authorized Representative:

 

 

 

 

Attn:

Attn:

 

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TO ENERGYSOLUTIONS (Authorized Representative):

 

EnergySolutions, LLC

423 South 300 West, Suite 200

Salt Lake City, UT 84101

Attn:  Commercial Business Development

 

Telephone  801-649-2000

Facsimile 801-413-5658

 

or at such other address as a party shall hereafter, in writing, direct by
notice given in accordance with this Paragraph 17.

 

18.   TERMINATION/SUSPENSION.

 

(a) Notwithstanding any language to the contrary contained herein, if Customer
is in default under this Agreement and continues to be in default for a period
of thirty (30) days after receipt of written notice to cure said default (or, if
such default cannot reasonably be cured within such thirty (30) day period, such
longer period as is reasonably necessary to effect such cure provided Customer
commences such cure promptly and diligently pursues such cure continuously
thereafter), EnergySolutions may, at its sole discretion:

 

(1) waive any such default on such terms as EnergySolutions shall determine;

 

(2) suspend further performance by EnergySolutions under this Agreement until
such default is cured or waived; or

 

(3) terminate this Agreement; provided that EnergySolutions shall have no right
to terminate this Agreement at any time when EnergySolutions controls or has a
right to control Zion Solutions by reason of the ownership of a controlling
equity interest in Zion Solutions or the appointment of a majority of the
members of the board of directors or board of managers of Zion Solutions.

 

(b) Customer may terminate this Agreement by notice in writing in the event that
EnergySolutions is in default of this Agreement and continues to be in default
for a period of thirty (30) days after receipt of written notice to cure said
default (or, if such default cannot reasonably be cured within such thirty (30)
day period, such longer period as is reasonably necessary to effect such cure
provided EnergySolutions commences such cure promptly and diligently pursues
such cure continuously thereafter); provided that Customer shall have no right
to terminate this Agreement at an time when EnergySolutions controls or has a
right to control Zion Solutions by reason of the ownership of a controlling
equity interest in Zion Solutions or the appointment of a majority of the
members of the board of directors or board of managers of Zion Solutions.

 

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(c) The termination of this Agreement shall not terminate duties of Customer to
EnergySolutions, or duties of EnergySolutions to Customer, including its
obligations as to Non-Conforming Waste Material as specified in Paragraph 4,
payment of any amounts owed pursuant to the terms of this Agreement, and the
duty to maintain information confidential pursuant to Paragraph 19.

 

19.   CONFIDENTIALITY.

 

The parties shall treat as confidential property and not disclose to others
during or subsequent to the term of this Agreement, except as is necessary to
perform this Agreement and then only on a confidential basis satisfactory to
both parties, any information, including pricing data, technical information,
experience or data, regarding the other party’s plans, programs, plants,
processes, products, disposal costs, equipment, operations, customers and/or the
specific contractual terms contained herein which may come within the knowledge
of the parties, their officers or their employees in the performance of this
Agreement without in each instance securing the prior written consent of the
other party.  EnergySolutions shall also treat as confidential and shall not
disclose to others, except as required by law, governmental rules, regulations
and/or orders, information relating to the composition of the Waste Material,
any treatment performed and/or the quantity of Waste Material delivered to it by
Customer.  EnergySolutions may disclose to its agents and contractor’s
information relating to the composition, type, treatment and quantity of the
Waste Material as required to perform this Agreement, without written
authorization from Customer, including but not limited to its general
contractor, its laboratories and contractors performing special treatment
services.  Nothing herein, however, shall prevent either EnergySolutions or
Customer from disclosing to others or using in any manner any information or
document that either party can show:

 

(a) has been published and become part of the public domain other than by acts,
omissions, or fault of the other party or its employees;

 

(b)  has been furnished or made known to a party by third parties other than
those acting directly or indirectly for, or on behalf of, such party as a matter
of legal right without restriction against disclosure;

 

(c) was in the other party’s possession prior to the disclosure thereof by
EnergySolutions or Customer to each other; or

 

(d) is supplied to a governmental agency pursuant to its request without rights
of confidentiality.

 

20.   DISPUTES

 

In the event of a dispute between Customer and EnergySolutions arising out of
this Agreement, the parties shall attempt to negotiate in good faith to resolve
any such disputes,

 

16

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provided, that nothing outlined in this Paragraph shall qualify or limit either
party’s right to exercise other remedies under this Agreement pursuant to the
terms and conditions set forth herein.  In the event that such negotiations
fail, either party may initiate litigation to resolve the dispute. THE PARTIES
HERETO AGREE THAT VENUE IN ANY AND ALL ACTIONS AND PROCEEDINGS RELATED TO THE
SUBJECT MATTER OF THIS AGREEMENT SHALL BE IN EITHER THE UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT OF ILLINOIS (EASTERN DIVISION) OR THE UNITED
STATES DISTRICT COURT FOR THE DISTRICT OF UTAH OR ANY STATE COURT SITUATED IN
EITHER SUCH FEDERAL JURISDICTION.  THE FOREGOING COURTS SHALL HAVE EXCLUSIVE
JURISDICTION FOR SUCH PURPOSE AND THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF SUCH COURTS AND IRREVOCABLY WAIVE THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING.  SERVICE
OF PROCESS MAY BE MADE IN ANY MANNER RECOGNIZED BY SUCH COURTS.  EACH OF THE
PARTIES HERETO IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY. In any litigation to enforce, modify,
interpret, invalidate, rescind, or set aside any term or provision of this
Agreement, the prevailing party shall be entitled to an award of its costs and
expenses, including reasonable attorneys’ fees and court costs, incurred as a
result of such claim, action, or lawsuit.  In the case of any dispute (including
any dispute which is or may be the subject of litigation), EnergySolutions shall
continue to perform services pending final determination of the dispute, and
Customer shall continue to make payments to EnergySolutions in accordance with
this Agreement for those portions of the services completed that are not the
subject of dispute.

 

21.   SURVIVAL.

 

Any payment obligations, representations, warranties, and the provisions of
Paragraphs 4 (Nonconforming Waste), 8 (Indemnification), 9 (Limitation of
Liability), 10 (Payments), 11 (Title to Waste), 13 (Force Majeure), 19
(Confidentiality), 20 (Disputes) and Paragraphs 21 through 29 shall survive
expiration and/or termination of this Agreement.

 

22.   AMENDMENT.

 

This Agreement may be amended only by the written agreement of the parties
signed by the parties’ Authorized Representatives; provided, however, that so
long as EnergySolutions controls or has a right to control Zion Solutions by
reason of the ownership of a controlling equity interest in Zion Solutions or
the appointment of a majority of the members of the board of directors or board
of managers of Zion Solutions, any amendment, modification or change in the
terms of this Agreement shall not be effective without the prior written consent
of Exelon Generation Company LLC, which consent shall not be unreasonably
withheld, delayed or conditioned.

 

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23.   ASSIGNMENT.

 

This Agreement shall be binding upon, and shall inure to the benefit of, the
parties hereto and their respective successors and permitted assigns but neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any party hereto, including by operation of law, without the
prior written consent of the other party, such consent not to be unreasonably
withheld, nor is this Agreement intended (except as specifically provided
herein) to confer upon any other person except the parties hereto any rights,
interests, obligations or remedies hereunder.  Any assignment in contravention
of the foregoing sentence shall be null and void and without legal effect on the
rights and obligations of the parties. Notwithstanding the foregoing, Customer
may assign this Agreement, in whole or in part, to Zion Solutions or its
successors or assigns, without the consent of EnergySolutions, upon and
following which assignment Zion Solutions shall be deemed to be the Customer for
all purposes of this Agreement and the [NAME OF TRUST COMPANY OF BUYER BACKUP
NDT TRUST], as Trustee, shall have no further liability hereunder.

 

24.   SPECIFIC PERFORMANCE.

 

EACH PARTY ACKNOWLEDGES AND AGREES THAT THE OTHER PARTY WOULD BE DAMAGED
IRREPARABLY IN THE EVENT ANY OF THE PROVISIONS OF THIS AGREEMENT ARE NOT
PERFORMED IN ACCORDANCE WITH THEIR SPECIFIC TERMS OR OTHERWISE ARE BREACHED. 
ACCORDINGLY, EACH PARTY AGREES THAT THE OTHER PARTY SHALL BE ENTITLED TO AN
INJUNCTION OR INJUNCTIONS TO PREVENT BREACHES OF THE PROVISIONS OF THIS
AGREEMENT AND TO ENFORCE SPECIFICALLY THIS AGREEMENT AND THE TERMS AND
PROVISIONS HEREOF IN ADDITION TO ANY OTHER REMEDY TO WHICH IT MAY BE ENTITLED,
AT LAW OR IN EQUITY.

 

25.   APPLICABLE LAW.

 

This Agreement is entered into in the County of Salt Lake, State of Utah, shall
be performed in the County of Tooele, State of Utah, and shall be governed and
construed in accordance with the laws of the State of Utah.  This Agreement is a
contract for services, and passage to EnergySolutions of title to Waste Material
shall not cause the transaction to be characterized as a sale of goods.

 

26.   HEADINGS AND PARAGRAPH NUMBERS.

 

Headings and paragraph numbers have been inserted herein solely for convenience
and reference and shall not be construed to affect the meanings, construction or
effect of this Agreement.

 

27.   COUNTERPARTS.

 

This Agreement may be executed in any number of counterparts, each of which may
be executed by less than all of the parties hereto, each of which shall be
enforceable against the

 

18

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parties actually executing such counterparts, and all of which together shall
constitute one instrument.

 

28.   SEVERABILITY.

 

In the event that any provision of this Agreement becomes or is declared by a
court of competent jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without the said provision.

 

29.   ENTIRE AGREEMENT.

 

This Agreement constitutes the full and entire understanding and agreement
between the parties hereto concerning the disposal at the Facility of Waste
Material originating from the Zion Station Site, and supersedes any language,
term, condition, or other provision of any prior written materials, including
any request for proposal, and any oral communications between the parties
concerning that subject matter. Purchase Orders or other similar delivery
documents issued by Customer shall not amend or modify the term and conditions
contained in this Agreement.

 

30.             SCHEDULES.

 

All Schedules referred to herein are intended to be and hereby are specifically
made a part of this Agreement.  In the event of any conflict between a Schedule
to this Agreement and the main text of this Agreement, the provisions of the
Schedule shall be controlling.   All references to Schedule A shall include each
Waste Profile Form and other supporting information incorporated by reference in
Schedule “A”.

 

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IN WITNESS WHEREOF, EnergySolutions and Customer have each caused this Agreement
to be executed by its duly Authorized Representative(s) on the day and year
first above written.

 

 

ENERGYSOLUTIONS, LLC

 

CUSTOMER

 

 

 

 

 

 

By:

 

 

By:

 

 

 

 

 

 

Name:

 

 

Name:

 

 

 

 

 

 

Title:

 

 

Title:

 

 

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SCHEDULE “A”

 

Waste Material

 

·      All WAC-compliant Class A Low Level Waste situated at the Zion Station
Site or created at the Zion Station Site during the course of Decommissioning
work and all other radioactive waste material located at or originating from the
Zion Station Site during the course of Decommissioning work that can be made
WAC-compliant Class A Low Level Waste through treatment, processing or other
handling in accordance with this Agreement.

 

·      Customer shall complete EnergySolutions Waste Profile Form and such other
documentation reasonably required by EnergySolutions for each waste stream that
is subject to this Agreement.  Completion of Waste Profile Forms by Customer
shall constitute Customer’s certification that such forms are true, accurate and
complete. After submission of each such completed Waste Profile Form by Customer
and review and approval by EnergySolutions, such Waste Profile Form shall
constitute the description of Waste Material pursuant to this Agreement.  Each
Waste Profile Form, and any modifications, for Waste Material subject to this
Agreement shall be incorporated by reference into this Schedule “A” and this
Agreement.  Waste Material shall conform with the radiological, chemical and
physical characteristics set forth in the approved Waste Profile Form upon
receipt at the Facility.

 

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SCHEDULE “B”

 

Delivery Schedule

 

The following is a description of the arrival schedule and other pertinent
requirements relating to the provision of disposal services under this
Agreement.

 

1.     WORKING DAYS.

 

The Facility shall be open for receipt of Waste Material during Working Days,
which are Monday through Friday except EnergySolutions holidays.  A list of
EnergySolutions holidays is available upon request.

 

2.     NOTICES

 

For purpose of Notice of Delivery, as set forth in Paragraph 3, below, all
notices and communications shall occur through respective shipping departments
of EnergySolutions and Customer.

 

3.     NOTICE OF DELIVERY.

 

Customer shall request from EnergySolutions, in writing, a Notice to Transport
for each waste stream of Waste Material identified in Schedule “A.”   The
request shall be made by Customer, and approved by EnergySolutions (which
approval shall not be unreasonably withheld, delayed or conditioned), prior to
Customer shipping Waste Material.  At a minimum such request for each shipment
must be made five (5) Working Days prior to the requested delivery date at the
Facility.  In the event that EnergySolutions determines, in its reasonable
discretion, that such shipment cannot be received at the Facility on the
requested delivery date, then EnergySolutions shall notify Customer and
EnergySolutions and Customer may mutually agree upon a rescheduled delivery
date, subject to Paragraph 2(c) of this Agreement.  In the event Customer does
not deliver Waste Material on a scheduled delivery date, EnergySolutions is not
obligated to unload or release the transport vehicle within the time specified
in Paragraph 6, below, but shall unload and release as promptly as reasonably
possible, which shall not exceed twenty (20) Working Days after delivery for
bulk shipments and shall not exceed two (2) working days for shielded containers
or casks. In the event Customer cannot deliver Waste Material on a scheduled
delivery date, EnergySolutions will allow Customer to update the arrival date by
fax or e-mail. Customer shall be liable for and make payment of all demurrage,
late charges and fees and any other costs or fees incurred by EnergySolutions
prior to said release date by reason of the failure of delivery of Waste
Material from Customer on a scheduled delivery date.

 

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4.     SHIPPING SCHEDULE.

 

Customer shall respond in a reasonably timely manner to EnergySolutions’ request
for a rolling 90-day planning schedule on a weekly and/or monthly basis
depending on EnergySolutions requests.  The planning schedule will include
Customer’s estimate of the volume, number and type of shipments, and planned
shipping rate and timing of shipments as requested by EnergySolutions.  Each
planning schedule provided by Customer shall represent Customer’s good faith
estimate, at the time such estimate is given to EnergySolutions, of Customer’s
expected volume, number and type of shipments, shipping rate and timing of
shipments but shall not represent a binding commitment of Customer for any
purpose.

 

5.     LAST SHIPMENT.

 

The last shipment shall arrive at the Facility on or before the termination date
of this Agreement.

 

6.     TURN-AROUND TIME AT THE FACILITY.

 

Within one (1) Working Day after receiving Waste Material as scheduled in
accordance with Paragraph 3, above, EnergySolutions will unload and prepare
trucks for release, if applicable. Within seven (7) working days after receiving
Waste Material as scheduled in accordance with Paragraph 3, above,
EnergySolutions will unload and prepare gondola rail cars for release, if
applicable. Within fourteen (14) working days after receiving Waste Material as
scheduled in accordance with Paragraph 3, above, EnergySolutions will unload and
prepare rail cars carrying intermodal type containers for release, if
applicable. Within one (1) Working Day after receiving CWF Waste Material as
scheduled in accordance with Paragraph 3, above, EnergySolutions will unload and
prepare trucks, casks and shielded containers for release, if applicable For
purposes of this paragraph, the first Working Day for unloading a transport
vehicle commences at 8:00 a.m. of the Working Day on which the vehicle arrives
at the Facility, unless the arrival time is later than 12:00 noon, in which
event, the first Working Day commences at 8:00 a.m. of the next scheduled
Working Day. Shielded containers or cask shipments shall be unloaded in
accordance with EnergySolutions Waste Acceptance Criteria (WAC). EnergySolutions
shall not be obligated to release more than the number of transport vehicles
during the release period than the number of transport vehicles scheduled in
accordance with Paragraph 3, above.  Any demurrage and other charges invoiced by
the carrier by reason of EnergySolutions’ failure to unload and release
transport vehicles as and when required under this Agreement, shall be paid by
EnergySolutions to Customer or to the carrier within thirty (30) days after said
invoice.  Customer shall be responsible for and pay all other demurrage charges.

 

7.     SHIPMENT DELAY.

 

EnergySolutions will not be held responsible for any demurrage, layovers,
additional wages, per diem, etc., that may be or become payable to a third party
due to any failures by Customer to meet delivery schedules, except to the extent
any such failure is attributable to any failure of EnergySolutions to perform
its obligations under this Agreement.  Unless otherwise agreed between
EnergySolutions and Customer, Customer shall be responsible for all fees, costs
and

 

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charges incurred by EnergySolutions as a consequence of delays in shipment to
the extent attributable to any failure of Customer to meet delivery schedules,
including, but not limited to, a charge of up to $30 per day for each third
party shipment that is delayed due to Customer’s failure to meet the delivery
schedules.  Actual demurrage charges incurred, if any, shall be in addition to
such charges.  EnergySolutions shall provide Customer documentation of such
delays as and when such delays are incurred.

 

8.     WINTER WEATHER CONDITIONS

 

EnergySolutions is subject to weather conditions between December 1st and
March 1st that may delay container handling outside the requirements of this
Agreement.  During this period, EnergySolutions shall be obligated to notify
Customer in writing of the potential for delay in container return. 
EnergySolutions shall be liable for demurrage costs attributable to delays
caused by winter weather conditions affecting operations at the Facility.

 

9.     CONTAINER RELEASE CRITERIA.

 

Customer may request EnergySolutions to clean and release containers using the
following four categories of radiological release criteria.  Provided that
customer properly packages the Waste Material such that the potential
contamination is minimized, and unless otherwise provided in this Agreement,
EnergySolutions will decontaminate the Customer-supplied containers to the “Sole
Use” level for return to Customer.  Customer agrees to pay any invoices for
decontamination services in accordance with the schedule of prices included in
Schedule “C”.   EnergySolutions will not be responsible for the cost of
decontamination of containers that have had a significant breach of the liner
prior to unloading; that cost may be passed to Customer per the rates in
Schedule “C”.  If EnergySolutions is unable to meet the container release
category requested by Customer, EnergySolutions shall notify Customer and allow
Customer to select another category for container release.

 

Unrestricted Use

20 dpm/100cm^2 alpha 200 dpm/100cm^2 beta-gamma

(removable)

 

 

inside and

100 dpm/100cm^2 alpha 1000 dpm/100cm^2 beta-gamma (fixed)

 

outside

(IAW USNRC Reg guide 1.86)

 

 

 

Return to Service

220 dpm/100cm^2 alpha 2200 dpm/100cm^2 beta-gamma

(removable)

 

 

 

inside and

(IAW 49CFR173.443c)

 

outside

 

 

 

 

DOT Empty

220 dpm/100cm^2 alpha 2200 dpm/100cm^2 beta-gamma

 

(removable) outside of container

 

 

22000 dpm/100cm^2 alpha 220000 dpm/100cm^2 beta-gamma

 

 

(removable) inside of container

 

24

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(IAW 49CFR173.428)

 

 

 

“Sole Use”

220 dpm/100cm^2 alpha 2200 dpm/100cm^2 beta-gamma

 

(removable) outside of container

 

 

<10 mrem/hr on contact, <2 mrem/hr at 1 meter inside the

container

 

 

 

 

(IAW 49CFR173.443d)

 

25

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SCHEDULE “C”

 

Bulk Material Price Schedule

 

Unless otherwise specified in Paragraph 10 of the Agreement, the following
charges apply to the Waste Material described in Schedule “A” to be delivered
for disposal or treatment and disposal, as applicable, and which meets each of
the requirements of this Agreement:

 

1.             Macroencapsulation of radioactive lead solids, or treatment and
disposal of Mixed Waste, not including vacuum-thermal desorption, shall be
invoiced per cubic foot using the aggregate exterior volume of the disposable
shipping container(s) and the applicable price in the following tables.

 

a.  Radioactive Lead Solids

 

Volume Range (cubic feet)

 

Price per Cubic Foot

 

0 – 2,500

 

$

200.00

 

2,501 – 5,000

 

$

175.00

 

5,001 – 10,000

 

$

160.00

 

10,001 and above

 

$

145.00

 

 

b.  Any other Waste that requires stabilization (other than through
vacuum-thermal desorption), such as other radioactive solids, paint, asbestos,
treatable PCBs, and other similar radioactive solids.

 

Volume Range (cubic feet)

 

Price per Cubic Foot

 

0 – 2,500

 

$

200.00

 

2,501 – 5,000

 

$

175.00

 

5,001 – 10,000

 

$

160.00

 

10,001 and above

 

$

145.00

 

 

c.             Other Mixed Waste material, not listed above, requiring treatment
and disposal may require Treatability Studies and shall be priced on a
case-by-case basis subject to Customer’s acceptance. EnergySolutions’ pricing
for such treatment and handling services shall not exceed pricing offered for
similar services to other customers with appropriate adjustments to eliminate
any charges related to direct disposal and shall not exceed EnergySolutions’
direct out-of-pocket costs incurred in the performance of such services, plus a
markup of 15% on any such costs other than taxes and fees paid to any
governmental entity and purchases of materials or services from an Affiliate.

 

26

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2.             Handling and treatment of Soil, Rubble, Decommissioning Waste and
Large Components shall be priced by EnergySolutions on a case-by-case basis
subject to Customer’s acceptance. EnergySolutions’ pricing for such services
shall not exceed pricing offered for similar services to other customers with
appropriate adjustments to eliminate any charges related to direct disposal and
shall not exceed EnergySolutions’ direct out-of-pocket costs incurred in the
performance of such services, plus a markup of 15% on any such costs other than
taxes and fees paid to any governmental entity and purchases of materials or
services from an Affiliate.

 

3.             MEASUREMENT FOR PAYMENT PURPOSES.

 

Treatment and handling of Waste in non-reusable, manifested containers shall be
billed based on external volume as follows:

 

55 Gallon Drums = 7.5 ft3

B-25 boxes = 96 ft3

85 Gallon Drums = 11.6 ft3

OP-45 boxes = 49 ft3

89 Gallon Drums = 12.1 ft3

B-88 boxes = 97 ft3

B-12 boxes = 48 ft3

 

(In the event a new or different non-reusable container is manifested, the same
principle shall apply).

 

For treatment and handling of Waste in re-usable manifested shipping containers
such as Intermodals, Seavans, Roll-offs etc.,  Customer shall be invoiced using
the below protocol:

 

Bulk debris containers shall be invoiced at 90% of manifested gross container
volume. (Customer agrees to use reasonable care while loading containers in
order to minimize the likelihood of difficulties and container damage during
unloading.)

 

For invoicing purposes, dose rates shall be calculated using the average
reported dose rate on any accessible surface piece of waste inside the
container.  Customer shall identify said dose rate using the advance shipment
notification form (EC-98096).

 

4.             Special cases or specific packages with unusual loading
requirements shall be determined on a case-by-case basis, prior to shipment. For
payment purposes, the Quantity of the Waste Material shall be determined by such
manifest information using certified scale, and EnergySolutions may make final
measurements.  If EnergySolutions determines that amounts or volumes of Waste
Material shipped to EnergySolutions are greater than that manifested by
Customer, and the parties are unsuccessful in resolving the discrepancies after
two (2) Working Days, EnergySolutions may revise such amounts or volumes and
shall provide documentation of such revisions to Customer and EnergySolutions
may proceed with handling of such Waste Material.

 

27

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5.             CONTAINER DECONTAMINATION

 

Customer shall be charged for the release of containers cleaned by
EnergySolutions in accordance with Paragraph 9 of Schedule “B” at the following
unit rates:

 

Release

 

Decontamination Charge 

 

Category

 

Container

 

Rate

 

Unrestricted Use

 

To be determined on a case by case basis

 

 

 

 

 

 

 

 

 

Return to Service

 

Intermodal or 20' seavan with metal floor

 

$200 per container

 

 

40' seavan with metal floor

 

$300 per container

 

 

gondola rail car with or without lid

 

$800 per gondola

 

 

 

 

 

 

 

DOT Empty

 

Intermodal or 20'/40' seavan

 

$65 per container

 

 

lidded gondola rail car only

 

$200 per container

 

 

 

 

 

 

 

“Sole Use”

 

any gondola, intermodal, 20'/40' seavan

 

No charge

 

 

6.             ADDITIONAL TERMS.

 

(a)           If Customer schedules a shipment of Waste Material for delivery to
the Facility on days other than Working Days, an additional charge may be added
to Customer’s invoice for each such day, other than a Working Day, on which
EnergySolutions handles such Waste Material in an amount equal to
EnergySolutions’ incremental direct labor costs for work on days other than
Working Days.

 

(b)           All charges under this Agreement that are not specified above in
this Schedule “C” shall be billed at the rate of $95.00 per hour for
EnergySolutions employees, and at actual cost plus fifteen percent (15%) for all
other expenses incurred other than taxes and fees payable to any governmental
entity and purchases of materials or services from an Affiliate.

 

(c)           A two and twenty-five one hundredths percent (2.25%) price
escalator shall apply to all pricing described in Schedule “C” effective
January 1st of each year.

 

28

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EXHIBIT J

 

LEASED PERSONNEL AGREEMENT

 

This Leased Personnel Agreement (“Agreement”) is entered into this       day of
                 200  by and among EXELON GENERATION COMPANY, LLC, a
Pennsylvania limited liability company (“Seller”), ZIONSOLUTIONS, LLC, a
Delaware limited liability company (“Buyer”), and ENERGYSOLUTIONS, LLC, a Utah
limited liability company (“Buyer’s Parent”).  Seller, Buyer and Buyer’s Parent
are referred to individually as a “Party” and collectively as the “Parties.”

 

WHEREAS, the Parties are parties to the Asset Sale Agreement dated December 11,
2007 (the “Sale Agreement”), pursuant to which Buyer is purchasing and assuming
from Seller certain assets at Seller’s Zion Nuclear Generating Station located
in Zion, Illinois (“Zion Station”) and assuming certain associated liabilities
(the “Sale”);

 

WHEREAS, the execution and delivery of this Agreement is a condition to closing
under the Sale Agreement;

 

WHEREAS, at Zion Station, Seller currently employs certain management-level
personnel (the “Management Employees”) and certain bargaining unit personnel
(the “Union Employees,” and together with the Management Employees, the “Zion
Employees”);

 

WHEREAS, the Union Employees are represented by IBEW Local 15 (the “Union”)
pursuant to a Collective Bargaining Agreement among the Union, Seller,
Commonwealth Edison Company (“ComEd”) and Exelon Business Services Company
(“BSC”) (the “CBA”);

 

WHEREAS, Buyer and Buyer’s Parent desire to have Seller lease to Buyer the Zion
Employees, subject to the terms and conditions of this Agreement, to assist
Buyer at Buyer’s direction in conducting Buyer’s activities and operations at
Zion Station upon and following the closing of the Sale (the “Effective Date”);
and

 

WHEREAS, Seller is willing to lease the Zion Employees to Buyer subject to the
terms and conditions of this Agreement;

 

NOW THEREFORE, in consideration of the mutual promises and agreements contained
herein and for other good and valuable consideration, the adequacy and receipt
of which are hereby acknowledged, the Parties agree as follows:

 

1.                                       Leased Personnel.  (a)  Commencing on
the Effective Date and during the Lease Term (defined below), Buyer shall lease
from Seller, and Seller shall lease to Buyer, the Zion Employees for such lawful
purposes as Buyer shall designate in furtherance of its activities and
operations at Zion Station, subject to the terms and conditions of this
Agreement, provided that any given Zion Employee must meet applicable fitness
for duty requirements, maintain required qualifications, and maintain
satisfactory performance consistent with past management practices and
expectations (all as determined pursuant to the Labor Agreements (defined below)

 

--------------------------------------------------------------------------------

 

and applicable Laws (as defined in the Sale Agreement)) in order to be eligible
to be leased to Buyer hereunder.  The Zion Employees actively employed at Zion
Station as of the Effective Date, their titles or classifications, and their
status as Management Employees or Union Employees are set forth on Schedule 1 to
this Agreement.

 

(b)                                 During the Lease Term, the Zion Employees
shall continue to be deemed employees of Seller, not Buyer.  However, during the
Lease Term, Buyer shall be responsible for directing the day-to-day work
activities of the Zion Employees, subject to the terms and conditions of this
Agreement, provided that Seller retains the right in its discretion, upon
advance notice to Buyer, to reassign any one or more Zion Employees to perform
work during the Lease Term in support of Seller’s or any of its Affiliates’ (as
defined in the Sale Agreement) operation, maintenance and retirement of, and
related work involving, the Zion Station Synchronous Condensers (“Synchronous
Condenser Work”) at Seller’s direction for so long as Seller deems necessary in
its discretion.  Seller shall provide fourteen (14) calendar days advance notice
to Buyer prior to reassigning any Zion Employee serving in minimum shift crew
positions required under the NRC License.  Such Synchronous Condenser Work shall
take priority over any assignments made hereunder to any Zion Employees by Buyer
and its Affiliates subject to Seller’s required advance notice to Buyer.  The
Parties acknowledge and agree that:  (i) except for Synchronous Condenser Work,
the Zion Employees are performing work solely on behalf of Buyer during the
Lease Term, and not as agents of or on behalf of Seller or any of its
Affiliates; (ii) Seller is not contracting or obligated hereunder to perform any
services for Buyer, Buyer’s Parent or any of their Affiliates (whether through
the Zion Employees or otherwise); (iii) Buyer is leasing the Zion Employees at
its own risk, and neither Seller nor any of its Affiliates is guaranteeing or
warranting the work, performance, fitness for duty, fitness for any particular
task or continued employment of any of the Zion Employees in any respect; and
(iv) neither Seller nor any of its Affiliates is or shall be held responsible
for any acts or omissions of any of the Zion Employees (except on Synchronous
Condenser Work), the Union, Buyer, Buyer’s Parent or any of their Affiliates
during the Lease Term, including without limitation any work stoppage or labor
dispute involving the Union or any of the Union Employees (whether or not any
such work stoppage or labor dispute relates to Synchronous Condenser Work or any
other work for Seller or any of its Affiliates).

 

(c)                                  Seller and the Union presently are parties
to the CBA as well as various supplemental agreements and arbitration awards
applicable to the Union Employees (together, the “Labor Agreements”), each of
which may affect the nature and manner of the work that may be performed by the
Union Employees.  Buyer and Buyer’s Parent acknowledge and agree that they have
been provided with, and have reviewed, copies of the CBA and the Memorandum
Regarding the Redeployment Related to the Closing of Zion Generating Station
dated June 2, 1998.  Seller retains the right in its discretion to take such
actions with respect to the Zion Employees as Seller deems necessary to comply
with applicable Law (as defined in the Sale Agreement) or the Labor Agreements. 
Seller also retains the right in its discretion to negotiate and enter into one
or more additional or amended agreements with the Union from time to time that
may apply to or affect the terms and conditions of employment of the Union
Employees (including without limitation wage rates), potentially including one
or more agreements related to the Sale (any such Seller-Union agreements shall,
upon execution thereof, be deemed to be included among the Labor Agreements).

 

2

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(d)                                 Throughout the Lease Term, Buyer shall: 
(i) act in accordance with the Labor Agreements in directing or overseeing the
direction of the work of the Union Employees; (ii) not take any action or omit
to take any action that would cause Seller or any of its Affiliates to be in
violation of any of the Labor Agreements; (iii) comply with all directives of
Seller regarding the Zion Employees that Seller deems necessary for compliance
with applicable Law or with the Labor Agreements; (iv) maintain accurate daily
records of all time worked by the Union Employees and, to the extent required by
applicable Law or requested by Seller, the Management Employees (collectively,
“Time Records”), except for Synchronous Condenser Work; (v) provide Seller with
prompt notice of any complaint, dispute or other similar issue (collectively, a
“Complaint”) concerning or raised by any of the Zion Employees, including
without limitation any allegation by any Union Employee or Union representative
thereof of any actual or potential violation of any of the Labor Agreements, and
cooperate fully (at Buyer’s cost) with Seller at its request in any efforts to
resolve any such Complaint, including without limitation in any grievance,
arbitration or unfair labor practice proceeding; and (vi) provide Seller with
such other information concerning the Zion Employees as Seller reasonably may
request from time to time.  Without limiting the generality of the foregoing or
any other provision of this Agreement in any way, Buyer shall not remove or
exclude, or request the removal or exclusion of, any of the Zion Employees from
Zion Station or from their work for Buyer if doing so would, in Seller’s
judgment, conflict with applicable Law or the Labor Agreements.

 

(e)                                  Nothing in this Agreement obligates Seller
or any of its Affiliates to continue to employ any of the Zion Employees for any
period of time after the Effective Date, or limits or restricts any right of
Seller to lay off, terminate the employment of, offer voluntary retirement or
other separation to, accept the resignation or retirement of, promote, demote,
transfer or otherwise modify the terms and conditions of employment of any of
the Management Employees or (subject to the Labor Agreements) the Union
Employees at any time, provided that Seller shall make reasonable efforts to
provide Buyer with thirty (30) calendar days’ written notice before taking any
action under this Section 1(e) that would reduce the availability to Buyer of
any Zion Employees identified in Schedule 1 to this Agreement (other than due to
their reassignment to Synchronous Condenser Work in accordance with
Section 1(b) above).  Seller and its Affiliates shall not be liable to Buyer,
Buyer’s Parent or any of their Affiliates with respect to any such
employment-related actions taken by Seller with respect to any of the Zion
Employees.  Without limiting the generality of the foregoing or any other
provision of this Section 1, Buyer and Buyer’s Parent acknowledge and agree
that, in Seller’s discretion, one or more Zion Employees may transfer or bump
out of Zion Station to another facility of Seller, ComEd or BSC (including
without limitation due to promotions or voluntary job bids), and one or more
other employees may be hired by Seller into Zion Station, or may transfer or
bump into Zion Station from facilities of Seller, ComEd or BSC other than Zion
Station (including without limitation to “backfill” for a departed Zion
Employee) pursuant to the terms of the Labor Agreements, provided that (except
as provided in the last sentence of this paragraph), after all spent nuclear
fuel at Zion Station (“Spent Nuclear Fuel”) is removed from the fuel building
and the dry cask storage project at Zion Station  is complete in accordance with
the Lease Agreement (as defined in the Sale Agreement) (the “Fuel Removal
Date”), an employee of Seller, ComEd or BSC shall only transfer into, bump into
or be hired into Zion Station with Buyer’s prior consent in its discretion. 
After the Fuel Removal Date, Buyer may replace any Zion Employee who is
transferred out of or otherwise leaves Zion Station with an employee of Buyer or
Buyer’s

 

3

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subcontractors (subject to Buyer’s other obligations under this Agreement). 
Buyer may at any time request that Seller hire or transfer to Zion Station an
employee with specific skills, subject to Seller’s consent in its discretion. 
Any employee who transfers, bumps or is hired into Zion Station (other than for
the sole purpose of performing Synchronous Condenser Work and not any work for
Buyer or its Affiliates) in accordance with this paragraph shall, upon such
transfer, be deemed a Zion Employee under this Agreement.  Nothing in this
Agreement limits or restricts the right of Seller or any of its Affiliates, at
any time during or after the Lease Term, to transfer or hire any employee other
than a Zion Employee into, or assign any employee other than a Zion Employee to,
Zion Station for the purpose of performing work solely for Seller or any of its
Affiliates, including without limitation Synchronous Condenser Work.

 

(f)                                    Buyer or any of its Affiliates may hire
any Zion Employee whose employment with Seller terminates at any time upon such
terms and conditions of employment as Buyer or its Affiliates shall determine in
their discretion, provided that Buyer and its Affiliates shall not assign any
such Zion Employee terminated “for cause” by Seller to work at Zion Station or
on any duties relating to Zion Station or any other facility of Seller or its
Affiliates.

 

2.                                       Lease Term.  Subject to the remainder
of this Section 2, the initial term of Seller’s lease of the Zion Employees to
Buyer hereunder (the “Initial Lease Term”) shall commence on the Effective Date
and shall terminate upon the Fuel Removal Date.  Subject to the remainder of
this Section 2, the Initial Lease Term shall automatically extend thereafter
until either Buyer or Seller, in their respective discretion, gives the other
Party at least sixty (60) calendar days’ advance notice that the Lease Term
(defined below) shall not be further extended (a “Termination Notice”).  All
periods after the Initial Lease Term shall be referred to herein as the
“Extension Period.”  The Initial Lease Term and any Extension Period shall
collectively be referred to herein as the “Lease Term.”  Notwithstanding the
foregoing:  (a) Buyer shall not give any Termination Notice more than sixty (60)
days before the end of the Initial Lease Term, and no such purported Termination
Notice given by Buyer shall be of any force or effect; (b) in no event shall the
Lease Term extend, with respect to any given Zion Employee, beyond the date of
such Zion Employee’s termination of employment with Seller or such Zion
Employee’s failure to meet the fitness for duty, qualification and performance
requirements referenced in Section 1(a) above; (c) Buyer shall give not less
than sixty (60) calendar days’ advance notice to Seller of the cessation of
Buyer’s need for a particular Management Employee or Union Employee with
identified skills for which Buyer in good faith no longer has a requirement, and
the Lease Term shall then end as to such particular Zion Employee(s) (but no
other Zion Employees) at the conclusion of such notice period, provided further
that Buyer shall continue to lease the remaining Zion Employee(s) hereunder, and
shall not terminate the Lease Term as to any such Zion Employee(s), in each case
prior to the Fuel Removal Date; (d) effective at any time on or following the
one-year anniversary of the Effective Date, Seller may terminate the Lease Term
in its discretion, for any or no reason, upon not less than sixty (60) calendar
days’ advance notice to Buyer; and (e) notwithstanding the foregoing, Seller may
at any time immediately terminate the Lease Term upon a material breach of this
Agreement by Buyer or Buyer’s Parent or upon or following termination of the
Lease Agreement (as defined in the Sale Agreement) or the expiration or earlier
termination of the Lease Term (for this purpose, as defined in the Lease
Agreement).

 

4

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3.                                       Monthly Leasing Fee.  Buyer shall pay,
and Buyer’s Parent shall cause Buyer to pay, Seller a monthly leasing fee during
the Lease Term (the “Monthly Leasing Fee”) equal to (a) the sum of:  (i) the
total aggregate salaries of Management Employees reduced to an hourly rate based
on a forty hour week and hourly wages of Union Employees payable by Seller or
its Affiliates to the Zion Employees, plus any other wages payable to any Zion
Employees, including without limitation any and all overtime compensation, shift
or premium payments, and bonus or incentive compensation payments, in each case
during the relevant month of the Lease Term (collectively, the “Payroll Costs”);
(ii) the equivalent of any and all employer payroll taxes and social security
and other government mandated contributions with respect to the Zion Employees
during the relevant month of the Lease Term (collectively, the “Withholdings”);
and (iii) the equivalent of an additional amount equal to 65% of the Payroll
Costs during the relevant month of the Lease Term (collectively, the “Benefits
Reimbursements”), less (b)(i) any portion of the Payroll Costs (including
overtime compensation) paid to a given Zion Employee for time spent by such Zion
Employee during the relevant month of the Lease Term actually performing
Synchronous Condenser Work (as determined using Seller’s standard procedures for
recording and allocating working time to such work) (“Synchronous Condenser
Payroll Costs”), and (ii) any prorata Withholdings and Benefits Reimbursements
directly attributable to such Synchronous Condenser Payroll Costs for such
month.  All Payroll Costs, Withholdings and Benefits Reimbursements during the
Lease Term that are not paid for and directly attributable to Synchronous
Condenser Work shall be conclusively presumed to be included in the Monthly
Leasing Fee and payable by Buyer hereunder, regardless of whether such amounts
are attributable to non-productive compensable time or any other working time
spent by Zion Employees.  Seller shall submit an invoice to Buyer within thirty
(30) calendar days following the end of each month during the Lease Term
specifying the aggregate Monthly Leasing Fee payable for the immediately
preceding completed month.  Buyer shall pay such invoiced Monthly Leasing Fee by
wire transfer to Seller’s designated account within thirty (30) calendar days
following Buyer’s receipt of such invoice.  Seller reserves the right to
reasonably increase or otherwise modify the compensation or benefits of any or
all of the Zion Employees consistent with Seller’s practices at any time upon
five (5) working days’ written notice in accordance with the Labor Agreements or
otherwise in the ordinary course of its business, and Buyer shall be responsible
for any resulting increases in the Monthly Leasing Fees following such notice. 
In the event of any termination of the Lease Term, Buyer shall pay Seller any
and all accrued and unpaid Monthly Leasing Fees through the effective
termination date of the Lease Term within thirty (30) calendar days after
Buyer’s receipt of a final invoice from Seller.  At the reasonable request of
Buyer from time to time upon reasonable advance notice, but in no event more
than once every twelve (12) months during the Lease Term, Seller will allow
Buyer to examine books and records of Seller in order to verify the Payroll
Costs, Withholdings, and Benefits Reimbursements charged to Buyer under this
Agreement.

 

4.                                       Indemnification. 
(a)                                      Buyer and Buyer’s Parent, jointly and
severally, shall indemnify, defend, and hold harmless Seller, its Affiliates and
their respective directors, officers, employees and agents (collectively, the
“Seller Indemnified Parties”) for and against any and all actual or threatened
claims, liabilities, demands, costs, expenses, losses, damages, suits,
judgments, costs of complying with any injunction or other non-monetary relief,
liens, settlements, penalties and fines (including without limitation attorneys’
fees and liquidated, punitive or exemplary damages) (collectively, “Claims”)
arising out of or relating to the leasing of the Zion Employees to Buyer
hereunder (collectively, “Seller Indemnified Claims”), including

 

5

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without limitation all Claims arising out of or related to any act or omission
of any of the Zion Employees or of Buyer or Buyer’s Parent or their Affiliates
during the Lease Term, regardless of whether any such Claims are or are found to
be unsuccessful, groundless, or fraudulent or whether any such Claims in whole
or in part are based or are alleged to be based on any acts or omissions
(including without limitation negligent conduct) of any of the Seller
Indemnified Parties, but excluding Claims to the extent arising out of: 
(x) Synchronous Condenser Work performed by a given Zion Employee; or (y) acts
or omissions by Seller (other than execution of the Labor Agreements) occurring
prior to the Lease Term.  Seller Indemnified Claims include, but are not limited
to, all Claims against any of the Seller Indemnified Parties by or on behalf of
any of the Zion Employees, the Union or any other third party (whether through
an action for indemnity, contribution or otherwise):  (i) alleging a violation
of applicable Law or of any of the Labor Agreements, including without
limitation in any grievance, arbitration or unfair labor practice proceeding;
(ii) arising out of or related to any legal, equitable, administrative,
regulatory, enforcement or other proceeding or investigation in which Seller or
any of the other Seller Indemnified Parties may be required or agree to
participate; (iii) for workers’ compensation, occupational health and safety,
occupational disease and occupational injury with respect to the Zion Employees;
(iv) alleging misrepresentation, breach of warranty or agreement, negligence,
recklessness, intentional wrongdoing, strict liability, injury or death to
person(s) (including but not limited to the Zion Employees) or loss of or damage
to property arising out of or related to any act or omission of Buyer or Buyer’s
Parent or their Affiliates or any of the Zion Employees; or (v) arising out of
or relating to any breach by Buyer or Buyer’s Parent of any of their respective
obligations under this Agreement.

 

(b)                                 Seller shall indemnify, defend, and hold
harmless Buyer, Buyer’s Parent, their Affiliates and their respective,
directors, officers, employees and agents for and against any and all Claims
(except as otherwise provided in Section 5(c) below) to the extent arising out
of:  (x) Synchronous Condenser Work performed by a given Zion Employee; or
(y) acts or omissions by Seller (other than execution of the Labor Agreements)
occurring prior to the Lease Term, regardless of whether any such Claims are or
are found to be unsuccessful, groundless, or fraudulent.

 

(c)                                  Without limiting the foregoing provisions
in any way, a Party obligated to indemnify, defend or hold harmless hereunder
(an “Indemnifying Party”) shall advance all costs and expenses to a Party or
other person entitled to be indemnified, defended or held harmless hereunder (an
“Indemnified Party”) as they are incurred with respect to any Claims subject to
such indemnity, defense or hold-harmless protection (an “Indemnified Claim”),
including without limitation attorneys’ fees and costs.  An Indemnified Party
may in its discretion engage legal counsel of its choosing in connection with
any Indemnified Claims, including without limitation to represent it in
connection with the defense or settlement of any such Indemnified Claim,
regardless of whether or not any insurer of an Indemnifying Party or any such
Indemnifying Party’s Affiliate consents to, approves, or agrees to pay or
advance some or all of the legal fees and costs of, any such legal counsel.  An
Indemnified Party hereunder may in its discretion control the defense, handling
and settlement of any claims (whether or not Indemnified Claims) threatened or
pending against any such Indemnified Party, provided that an Indemnified Party
shall not settle any Indemnified Claim without the consent of all Indemnifying
Parties with respect to such Indemnified Claim, which consent shall not be
unreasonably withheld.  Under no circumstances shall an Indemnifying Party
settle any Indemnified Claim

 

6

--------------------------------------------------------------------------------

 

with respect to an Indemnified Party without the consent of such Indemnified
Party, which consent shall not be unreasonably withheld.

 

5.                                       Insurance and Limitations on
Liability.  (a) Buyer shall, at its own expense, at all times during the Lease
Term, carry, maintain and provide Seller upon its request with appropriate
evidence of:  (i) general liability insurance coverage in an aggregate amount of
no less than $50,000,000, which shall name Seller as an additional insured and
shall include, without limitation, coverage for the Zion Employees’ acts and
omissions during the Lease Term; (ii) workers’ compensation and occupational
disease insurance coverage applicable to all Zion Employees; and (iii) any other
insurance coverage required by applicable Law.

 

(b)                                 SELLER IS NOT MAKING ANY WARRANTY OF ANY
KIND WHATSOEVER, EXPRESS OR IMPLIED, AND ALL IMPLIED WARRANTIES, INCLUDING THE
WARRANTY OF FITNESS FOR A PARTICULAR USE OR PURPOSE AND THE WARRANTY OF
MERCHANTABILITY, ARE HEREBY DISCLAIMED BY SELLER AND EXCLUDED FROM THIS
AGREEMENT.

 

(c)                                  IN NO EVENT SHALL SELLER OR ANY OF ITS
AFFILIATES BE LIABLE TO BUYER, BUYER’S PARENT OR ANY OF THEIR RESPECTIVE
AFFILIATES FOR ANY INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR CONSEQUENTIAL
DAMAGES ARISING FROM OR RELATED TO ANY BREACH OF THIS AGREEMENT, INCLUDING
WITHOUT LIMITATION ANY CLAIMS FOR DAMAGES BASED UPON LOST PROFITS.

 

6.                                       Compliance With Laws.  Buyer and
Buyer’s Parent covenant, represent and warrant that their leasing, use and
direction of the Zion Employee at all times will adhere to and be in full
compliance in all material respects with all applicable Laws throughout the
Lease Term.

 

7.                                       Notices.  Any notice required or
permitted under this Agreement shall be governed by and given in accordance with
the provisions of the Sale Agreement.

 

8.                                       Governing Law. This Agreement shall be
governed by and construed in accordance with the law of the State of Illinois
(without giving effect to conflict of law principles) as to all matters,
including matters of validity, construction, effect, performance and remedies. 
THE PARTIES HERETO AGREE THAT VENUE IN ANY AND ALL ACTIONS AND PROCEEDINGS
RELATED TO THE SUBJECT MATTER OF THIS AGREEMENT SHALL BE IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS (EASTERN DIVISION) OR ANY
STATE COURT SITUATED THEREIN.  THE FOREGOING COURTS SHALL HAVE EXCLUSIVE
JURISDICTION FOR SUCH PURPOSE AND THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF SUCH COURTS AND IRREVOCABLY WAIVE THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING.  SERVICE
OF PROCESS MAY BE MADE IN ANY MANNER RECOGNIZED BY SUCH COURTS.  EACH OF THE
PARTIES HERETO IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY
ACTION OR CLAIM

 

7

--------------------------------------------------------------------------------

 

ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

9.                                       Severability.  If for any reason any
provision of this Agreement shall be deemed by a court or arbitrator of
competent jurisdiction to be legally invalid or unenforceable, such provision
shall be ineffective only to the extent of such invalidity or unenforceability,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.

 

10.                                 Survival.  Sections 4 through 17 (inclusive)
of this Agreement shall survive any termination of the Lease Term by any Party
at any time for any or no reason.

 

11.                                 Assignment.  This Agreement may be assigned
or transferred by Seller to, and shall be binding upon and shall inure to the
benefit of, any Affiliate or other related entity of Seller or any entity which
at any time, whether by merger, purchase, or otherwise, acquires all or
substantially all of the assets, equity or business of Seller.  Buyer and
Buyer’s Parent may not assign any of their respective rights or obligations
under this Agreement without Seller’s express written consent.

 

12.                                 Entire Agreement.  This Agreement and the
Sale Agreement embody the entire agreement and understanding of the Parties
hereto with regard to the matters described herein and supersede any and all
prior and/or contemporaneous agreements and understandings, oral or written,
between said Parties regarding the matters described herein.

 

13.                                 Amendment and Waiver.  This Agreement may
not be amended except by written agreement executed by all Parties hereto.  The
waiver by any Party of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach of such provision
or of any breach of any other provision.

 

14.                                 No Joint Venture.  Nothing in this Agreement
creates or is intended to create an association, trust, partnership, joint
venture or other entity or similar legal relationship among the Parties, or
impose a trust, partnership or fiduciary duty, obligation, or liability on or
with respect to the Parties.  No Party is or shall act as or be the agent or
representative of any other Party.

 

15.                                 No Third Party Beneficiaries.  Except as
expressly provided in Section 11, this Agreement is solely for the benefit of
the Parties and their successors and permitted assigns, and neither the Zion
Employees, the Union nor any other person is or is intended to be a third-party
beneficiary of this Agreement or shall have any enforcement or other rights
hereunder.

 

16.                                 Section Headings.  The Section headings
herein are included for convenience only and are not to be considered in
applying or interpreting the provisions of this Agreement.

 

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

 

8

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their
respective duly authorized officers as of the date first above written.

 

 

EXELON GENERATION COMPANY, LLC

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

ZIONSOLUTIONS, LLC

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

ENERGYSOLUTIONS, LLC

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

9

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SCHEDULE 1

 

10

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Exhibit K

 

Opinion of Counsel for Buyer and Buyer’s Parent

 

Each of Buyer and Buyer’s Parent is a limited liability company duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization.  Guarantor is a corporation duly organized, validly existing and
in good standing under the laws of Delaware.  Each of Buyer, Buyer’s Parent and
Guarantor has the limited liability company or corporate power and authority to
enter into the Agreement and each of the Ancillary Agreements to which it is a
party and to carry out the provisions of the Agreement and such Ancillary
Agreements.

 

Neither the execution and delivery of the Agreement or the Ancillary Agreements
nor the consummation of the transactions contemplated by those agreements by
Buyer or Buyer’s Parent will conflict with or result in a breach by Buyer or
Buyer’s Parent, or constitute a default under, the formation document or limited
liability company agreement of Buyer or Buyer’s Parent, respectively.

 

The Agreement and each Ancillary Agreement to which Buyer, Buyer’s Parent or
Guarantor is a party have been duly authorized by all necessary limited
liability company or corporate action on the part of Buyer, Buyer’s Parent and
Guarantor, respectively.  The Agreement and each such Ancillary Agreement to
which they are a party have been duly executed and delivered by Buyer, Buyer’s
Parent and Guarantor and constitutes the legally valid and binding obligation of
Buyer, Buyer’s Parent and Guarantor, respectively, enforceable against Buyer,
Buyer’s Parent and Guarantor, respectively, in accordance with their terms,
except as limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws and legal principles affecting creditors’ rights generally and
except for the limitations imposed by general principles of equity, whether
applied by a court of law or equity, and the possible unavailability of specific
performance, injunctive relief or other equitable remedies.

 

A United States bankruptcy court, in the event of a case under the Bankruptcy
Code involving Buyer’s Parent or Guarantor as debtor, would not, over the
well-briefed objection of a party in interest, disregard the separate
organizational existence of Buyer and Buyer’s Parent or Buyer and Guarantor so
as to consolidate the assets and liabilities of Buyer with the assets and
liabilities of Buyer’s Parent or Guarantor, or, if it did, that order would not
be affirmed after a well-pursued appeal.

 

--------------------------------------------------------------------------------

 

EXHIBIT L

REQUIRED PROVISIONS IN THE POST-CLOSING NUCLEAR

Decommissioning Trust Agreement

 

Prior to each disbursement of funds from the Buyer QDF or the Buyer NDF, Buyer
shall present to the Trustee a Disbursement Request, signed by Authorized
Officers, setting forth as of a date specified in such Disbursement Request
(a) project costs and expenses incurred for each Major Budget Category in the
Project Budget and detailed work breakdown structure line items identified in
the level one [or two] schedule within each Major Budget Category (b) the
aggregate amount of such disbursement request, and (c) a certification and sworn
statement from Authorized Officers that (1) the project work and materials and
services for which the disbursement is requested have been performed or
delivered in connection with the Decommissioning and other work required to
achieve End State Conditions, (2) Buyer has complied with all requirements of
Section 6.21 of the Asset Sale Agreement.

 

Prior to each disbursement from the Buyer QDF or the Buyer NDF, Buyer shall also
submit to the Trustee a certificate and sworn statement from Authorized Officers
confirming that Buyer has not failed to achieve a Site Restoration Milestone (as
extended, if applicable, by any conditions of Force Majeure or Schedule
Extension Conditions) by the applicable date determined in accordance with the
Lease Agreement, or if Buyer has failed to achieve a Site Restoration Milestone
by such date, a reasonably detailed description of the Site Restoration
Milestone that Buyer has failed to achieve, including the applicable date on
which the Site Restoration Milestone was to be achieved, determined in
accordance with the Lease Agreement and, if applicable, the date on which the
Site Restoration Milestone was subsequently achieved.

 

For each month in which Buyer fails to achieve any Site Restoration Milestone by
the applicable date determined in accordance with the Lease Agreement, the
Trustee shall defer a portion of the aggregate disbursements otherwise available
to Buyer from the Buyer QDF and the Buyer NDF by a sum equal to the lesser of
(a) $5,000,000 (pro rated if the failure to achieve a Site Restoration Milestone
continued for a period of less than 30 days since it first occurred or since the
date of the previous disbursement request) or (b) the amount of the disbursement
requested in the pending disbursement request.  Such monthly deferrals of
distributions shall continue until completion of the applicable Site Restoration
Milestone, as evidenced by a subsequent certificate and sworn statement of
Authorized Officers, at which time such amounts that have been deferred in
accordance with this paragraph may be disbursed, without interest, from the
Buyer QDF or the Buyer NDF.

 

--------------------------------------------------------------------------------

 

BUYER LETTER

relating to the

ASSET SALE AGREEMENT

among

EXELON GENERATION COMPANY, LLC

ENERGYSOLUTIONS, LLC

ENERGYSOLUTIONS, INC.

and

ZION SOLUTIONS, LLC

dated as of

December    , 2007

 

Exelon Generation Company, LLC

4300 Winfield Road

Warrenville, Illinois 60555

 

Ladies and Gentlemen:

 

This letter and the accompanying Schedules are being provided by Zion Solutions,
LLC, a Delaware limited liability company (“Buyer”), EnergySolutions,LLC, a Utah
limited liability company (“Buyer’s Parent”), and EnergySolutions, Inc., a
Delaware Corporation (“Guarantor”) pursuant to the Asset Sale Agreement (the
“Agreement”), dated as of December    , 2007, among Buyer, Buyer’s Parent,
Guarantor and Exelon Generation Company, LLC, a Pennsylvania limited liability
company (“Seller”).  This letter is the “Buyer Letter” as defined in Section 1.1
of the Agreement, and the accompanying Schedules are the Schedules to which
reference is made in various sections of Article 5 of the Agreement. 
Capitalized terms used in this letter and the accompanying Schedules but not
defined herein shall have the same meanings given to them in the Agreement.

 

Some of the disclosures provided herein are made for informational purposes
only, and no reference to or disclosure of any item or other matter herein shall
be construed as an admission or indication that such item or other matter is
required to be referred to or disclosed herein.  No disclosure herein relating
to any possible breach, default or violation of any agreement, law or regulation
shall be construed as an admission of indication that any such breach, default
or violation exists or has actually occurred.

 

 

Very truly yours,

 

 

 

ZION SOLUTIONS, LLC

 

 

 

 

 

By:

/s/ R. STEVE CREAMER

 

Its:

Chief Executive Officer

 

--------------------------------------------------------------------------------

 

 

ENERGYSOLUTIONS, LLC

 

 

 

 

 

By:

/s/ R. STEVE CREAMER

 

Its:

Chief Executive Officer

 

 

 

 

 

ENERGYSOLUTIONS, INC

 

 

 

 

 

By:

/s/ R. STEVE CREAMER

 

Its:

Chief Executive Officer

 

 

Acknowledged:

 

 

 

EXELON GENERATION COMPANY, LLC

 

 

 

 

 

By:

/s/ BRUCE G. WILSON

 

 

Its:

Secretary

 

 

 

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Schedule 5.3.1

 

Third Party Consents

 

Consents required pursuant to that certain Second amended and restated credit
agreement dated as of June 7, 2006 resulting from amendment no. 1 dated June 19,
2006, amendment no. 2 dated February 9, 2007, amendment no. 3 dated June 26,
2007, and amendment no. 4 dated November 1, 2007 among EnergySolutions, LLC as
Borrower, ENV HOLDINGS LLC as Guarantor, the Lenders from time to time party
thereto, and initial issuing banks named therein as Lenders and Initial Issuing
Banks, Citigroup Global Markets Inc. as Sole Lead Arranger and Sole Bookrunner,
Citicorp North America, Inc. as Administrative Agent and Collateral Agent, and
Calyon New York Branch as Syndication Agent.

 

--------------------------------------------------------------------------------

 

Schedule 5.3.2

 

Regulatory Approvals

 

1.               NRC Approval for transfer of NRC Licenses and conforming
amendments (naming Buyer as licensee).

 

The Parties agree to submit information to NRC regarding decommissioning funding
financial assurance arrangements, including use of the QDF and NDF in accordance
with Buyer’s revised PSDAR for the Zion Station (including description of
activities related to moving Spent Nuclear Fuel to storage in the ISFSI Island),
the Buyer Backup NDT, the Irrevocable Letter of Credit, and the Performance
Guarantee.

 

2.               Private Letter Ruling from IRS including the following:

 

A.                                      PURSUANT TO REGULATIONS SECTION
1.468A-6, THE TRANSFER SHOULD BE TREATED AS A TRANSFER OF THE ASSETS OF SELLER’S
QDF WITHIN THE MEANING OF REGULATIONS SECTION 1.468A-1(B)(3) IN CONNECTION WITH
A SALE, EXCHANGE, OR OTHER DISPOSITION BY SELLER OF ALL OR A PORTION OF SELLER’S
QUALIFYING INTEREST IN ZION STATION TO BUYER.

 

b.                                      Seller’s QDFs will not become
disqualified in whole or in part on the Closing Date by reason of the transfer
of the assets in such funds to Buyer’s QDFs.

 

C.                                       SELLER’S QDFS WILL NOT RECOGNIZE GAIN
OR LOSS UPON THE TRANSFER OF THE ASSETS IN SUCH FUNDS TO BUYER’S QDFS ON THE
CLOSING DATE.

 

D.                                      SELLER WILL NOT RECOGNIZE INCOME UPON
THE TRANSFER OF THE ASSETS FROM SELLER’S QDFS TO BUYER’S QDFS ON THE CLOSING
DATE.

 

E.                                       BUYER’S QDFS ESTABLISHED TO HOLD THE
ASSETS TRANSFERRED FROM SELLER’S QDFS WILL BE TREATED AS QUALIFIED NUCLEAR
DECOMMISSIONING FUNDS SATISFYING THE REQUIREMENTS OF CODE SECTION 468A.

 

F.                                         BUYER WILL NOT RECOGNIZE GAIN OR LOSS
OR OTHERWISE TAKE ANY INCOME OR DEDUCTION INTO ACCOUNT BY REASON OF THE TRANSFER
OF THE ASSETS OF SELLER’S QDFS TO BUYER’S QDFS ON THE CLOSING DATE.

 

G.                                      BUYER’S QDFS WILL NOT RECOGNIZE GAIN OR
LOSS OR OTHERWISE TAKE ANY INCOME OR DEDUCTION INTO ACCOUNT BY REASON OF THE
TRANSFER OF THE ASSETS OF SELLER’S QDFS TO BUYER’S QDFS ON THE CLOSING DATE.

 

--------------------------------------------------------------------------------

 

H.                                      ON THE CLOSING DATE, BUYER’S QDFS WILL
RETAIN THE SAME BASIS IN THE ASSETS RECEIVED FROM SELLER’S QDFS AS SELLER’S QDFS
HAD IN SUCH ASSETS IMMEDIATELY PRIOR TO THE CLOSING DATE.

 

I.                                          FOLLOWING THE CLOSING DATE, PAYMENTS
OF REASONABLE COMPENSATION BY BUYER’S QDFS TO BUYER AND ITS AFFILIATES AS
COMPENSATION FOR THE PERFORMANCE OF REASONABLE AND NECESSARY SERVICES IN
CONNECTION WITH THE ENTOMBMENT, DECONTAMINATION, DISMANTLEMENT, REMOVAL AND
DISPOSAL OF STRUCTURES, SYSTEMS AND COMPONENTS OF THE ZION STATION (AND ANY
OTHER SERVICES WHICH WOULD CONSTITUTE “NUCLEAR DECOMMISSIONING COSTS” UNDER
REGULATION SECTION 1.468A-1(B)(5)) WILL NOT CONSTITUTE SELF-DEALING.

 

3.               Filing of Notification and Report form under Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and expiration of applicable
waiting period.

 

4.               Federal Communications Commission approval will be required for
any transfers of FCC licenses.

 

--------------------------------------------------------------------------------

 

Schedule 5.5

 

Debt of EnergySolutions, LLC

 

That certain Second amended and restated credit agreement dated as of June 7,
2006 resulting from amendment no. 1 dated June 19, 2006, amendment no. 2 dated
February 9, 2007, amendment no. 3 dated June 26, 2007, and amendment no. 4 dated
November 1, 2007 among EnergySolutions, LLC as Borrower, ENV HOLDINGS LLC as
Guarantor, the Lenders from time to time party thereto, and initial issuing
banks named therein as Lenders and Initial Issuing Banks, Citigroup Global
Markets Inc. as Sole Lead Arranger and Sole Bookrunner, Citicorp North
America, Inc. as Administrative Agent and Collateral Agent, and Calyon New York
Branch as Syndication Agent.

 

Encumbrances affecting real estate subject to the

Irrevocable Easement for Disposal Capacity

 

1.                                       Taxes or assessments which are not
shown as existing liens by the records of any taxing authority that levies taxes
or assessments on real property or by the public records.

 

2.                                       Any facts, rights, interest or claims
which are not shown by the public records but which could be ascertained by an
inspection of said land or by making inquiry of persons in possession thereof.

 

3.                                       Easements, claims of easements or
encumbrances which are not shown by the public records.

 

4.                                       Discrepancies, conflicts in boundary
lines, shortage in area, encroachments and any other facts which a correct
survey would disclose, and which are not shown by public records.

 

5.                                       Unpatented mining claims; reservations
or exceptions in patents or in Acts authorizing the issuance thereof, water
rights, claims or title to water.

 

6.                                       Any lien, or right to a lien, for
services, labor or material heretofore or hereafter furnished, imposed by law
and not shown by the public records.

 

7.                                       (Affects Parcel 1)

General property taxes for the year 2007 are NOT PAID, and are in the amount of
$6,627.19, plus interest and penalty. Tax Parcel No. 04-100-J-0001.

 

--------------------------------------------------------------------------------

 

General property taxes for the year 2006 and prior years have been paid.

 

8.                                       (Affects Parcel 2)

General property taxes for the year 2007 are NOT PAID, and are in the amount of
$1,483.70, plus interest and penalty. Tax Parcel No. 04-100-J-0003.

 

General property taxes for the year 2006 and prior years have been paid.

 

9.                                       (Affects a portion of Parcel 3)

General property taxes for the year 2007 are NOT PAID, and are in the amount of
$3,170.73, plus interest and penalty. Tax Parcel No. 04-101-A-0002.

 

General property taxes for the year 2006 and prior years have been paid.

 

10.                                 (Affects a portion of Parcel 3)

General property taxes for the year 2007 are NOT PAID, and are in the amount of
$541,300.48, plus interest and penalty. Tax Parcel No. 04-101-A-0003.

 

General property taxes for the year 2006 and prior years have been paid.

 

11.                                 These premises are within the boundaries of
the Tooele County Hospital Special Services District, North Tooele County Fire
Protection Service District and Tooele County Landfill and are subject to the
levies and assessments thereof, provided, however, that no such levies or
assessments are delinquent.

 

12.                                 (Affects Parcels 1 and other property)

The following Reservations and Right of ways as disclosed in that certain Patent
recorded November 8, 1991, as Entry No. 044189, in Book 324, at Page 79 of
Official Records.

 

13.                                 (Affects a portion of Parcel 2 and other
property)

The terms and provisions contained in the document entitled “United States
Department of The Interior Bureau of Land Management Right of Way
Grant/Temporary Use Permit Serial Number U-69560” recorded December 8, 1992 as
Entry No. 052841 in Book 343 at Page 383 of Official Records, and the county
roads established thereby.

 

14.                                 (Affects a portion of Parcel 3)

The terms and provisions contained in the document entitled “Agreement
Establishing Covenants and Restrictions” recorded March 16, 1993 as Entry
No. 054898 in Book 348 at Page 104 of Official Records.

 

--------------------------------------------------------------------------------

 

15.                                 (Affects Parcel 2 and other property)

The following Reservations and Right of ways as disclosed in that certain Patent
recorded March 15, 1995, as Entry No. 072607 in Book 391 at Page 849 of Official
Records.

 

16.                                 (Affects a portion of Parcel 3)

Conditional Use Permit #08-03, in favor of Envirocare of Utah, recorded
April 26, 2003, as Entry No. 200742 in Book 844 at Page 331 of Official Records.

 

17.                                 (Affects Parcel 2)

Conditional Use Permit #07-03, in favor of Envirocare of Utah, recorded
April 28, 2003, as Entry No. 200743 in Book 844 at Page 333 of Official Records.

 

18.                                 (Affects Parcel 3)

Conditional Use Permit #06-03, in favor of Envirocare of Utah, recorded
April 28, 2003, as Entry No. 200744 in Book 844 at Page 335 of Official Records.

 

19.                                 (Affects Parcel 2)

Conditional Use Permit #05-03, in favor of Envirocare of Utah, recorded
April 28, 2003, as Entry No. 200745 in Book 844 at Page 337 of Official Records.

 

20.                                 (Affects Parcel 2)

Conditional Use Permit #04-03, in favor of Envirocare of Utah, recorded
April 28, 2003, as Entry No. 200746 in Book 844 at Page 339 of Official Records.

 

21.                                 (Affects Parcel 2)

Conditional Use Permit #03-03, in favor of Envirocare of Utah, recorded
April 28, 2003, as Entry No. 200747 in Book 844 at Page 341 of Official Records.

 

22.                                 (Affects Parcel 1)

Conditional Use Permit #089-03, in favor of Envirocare of Utah, recorded
April 14, 2004, as Entry No. 221632 in Book 937 at Page 191 of Official Records.

 

23.                                 A Deed of Trust With Assignment of Rents
dated January 31, 2005 by and between Envirocare of Utah, LLC, a Utah limited
liability company, successor in interest by conversion to Envirocare of
Utah, Inc., a Utah corporation, as Trustor in favor of First American Title
Insurance Company, as Trustee and Calyon New York Branch, as the initial issuing
bank, administrative agent and syndication agent, as Beneficiary, to secure an
original indebtedness of $60,000,000.00 and any other amounts or obligations
secured thereby, recorded January 31, 2005 as Entry No. 235387 in Book 999 at
Page 399 of Official Records.

 

--------------------------------------------------------------------------------

 

First Amendment to Utah Deed of Trust and Fixture Filing dated February 24, 2005
recorded February 28, 2005 as Entry No. 236566 in Book 1005 at Page 113 of
Official Records.

 

Second Amendment to Utah Deed of Trust and Fixture Filing recorded April 13,
2005 as Entry No. 238900 of Official Records.

 

Third Amendment to Utah Deed of Trust and Fixture Filing, recorded June 1, 2006,
as Entry No. 260862 of Official Records.

 

Fourth Amendment Utah Deed of Trust and Fixture Filing, recorded June 14, 2006,
as Entry No. 261675 of Official Records.

 

24.                                 A UCC Financing Statement executed by
Envirocare of Utah, LLC, successor in interest by conversion to Envirocare of
Utah, Inc., as Debtor in favor of Calyon New York Branch, as Secured Party,
recorded January 31, 2005 as Entry No. 235388 in Book 999 at Page 415 of
Official Records.

 

An Amendment to the Financing Statement, recorded February 28, 2005 as Entry
No. 236567 in Book 1005 at Page 127 of Official Records.

 

An amendment to the financing statement, recorded April 20, 2006, as Entry
No. 258328 of Official Records.

 

25.                                 A UCC Financing Statement executed by
EnergySolutions, LLC, as Debtor in favor of Calyon New York Branch, as Secured
Party, recorded April 20, 2006 as Entry No. 258327 of Official Records.

 

26.                                 A UCC Financing Statement executed by
Envirocare of Utah, LLC, successor in interest by conversion to Envirocare of
Utah, Inc., as Debtor in favor of Calyon New York Branch, as Secured Party,
recorded April 21, 2006 as Entry No. 258394 of Official Records.

 

27.                                 (Affects a portion of Parcel 2 and other
property)

A right of way in favor of Rocky Mountain Power a division of PacificCorp, a
Oregon corporation, recorded November 28, 2006, as Entry No. 272391 of Official
Records.

 

28.                                 (Affects a portion of Parcel 1 and other
property)

Subject to Railroad rights.

 

29.                                 (Affects Parcel 3)

Subject to rights of other parties for ingress, egress and utilities (for
benefit of separate landowner in Section 32, 2, 800 by 1, 500 foot parcel).

 

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30.                                 A Consolidated Quit Claim Deed recorded
March 25, 2005 as Entry No. 237932 of Official Records.

 

31.                                 Second Utah Deed of Trust and Fixture Filing
dated August 15, 2007 by and between Envirocare of Utah, LLC, a Utah limited
liability company as Trustor in favor of First American Title Insurance Company
as Trustee and Citicorp North America, Inc. as Beneficiary, to secure an
original indebtedness of $200,000,000.00 and any other amounts or obligations
secured thereby, recorded August 31, 2007 as Entry No. 292693 of Official
Records.

 

32.                                 (Affects Parcels 2 and 3)

The effects, if any of that certain Consolidation Quit Claim Deed executed by
Envirocare of Utah, LLC, predecessor in interest to EnergySolutions, LLC,
recorded September 21, 2007 as Entry No. 293941 of Official Records.

 

--------------------------------------------------------------------------------

 

 

SELLER LETTER

relating to the

ASSET SALE AGREEMENT

among

EXELON GENERATION COMPANY, LLC

ENERGYSOLUTIONS, INC.

ENERGYSOLUTIONS, LLC

and

ZION SOLUTIONS, LLC

dated as of

December     , 2007

 

EnergySolutions, LLC

Zion Solutions, LLC

423 West 300 South, Suite 200

Salt Lake City, Utah 84101

 

Ladies and Gentlemen:

 

This letter and the accompanying Schedules are being provided by Exelon
Generation Company, LLC, a Pennsylvania limited liability company (“Seller”),
pursuant to the Asset Sale Agreement (the “Agreement”), dated as of
December     , 2007, among Seller, Zion Solutions, LLC, a Delaware limited
liability company (“Buyer”), EnergySolutions,LLC, a Utah limited liability
company (“Buyer’s Parent”), and EnergySolutions, Inc., a Delaware corporation
(“Guarantor”).  This letter is the “Seller Letter” as defined in Section 1.1 of
the Agreement, and the accompanying Schedules are the Schedules to which
reference is made in various sections of Article IV of the Agreement. 
Capitalized terms used in this letter and the accompanying Schedules but not
defined herein shall have the same meanings given to them in the Agreement.

 

Some of the disclosures provided herein are made for informational purposes
only, and no reference to or disclosure of any item or other matter herein shall
be construed as an admission or indication that such item or other matter is
required to be referred to or disclosed herein.  No disclosure herein relating
to any possible breach, default or violation of any agreement, law or regulation
shall be construed as an admission of indication that any such breach, default
or violation exists or has actually occurred.

 

 

Very truly yours,

 

 

 

 

 

EXELON GENERATION COMPANY, LLC

 

 

 

 

 

By:

/s/ THOMAS S. O’NEILL

 

Its:

VP, New Plant Development

 

--------------------------------------------------------------------------------

 

 

 

ENERGYSOLUTIONS, LLC

 

 

 

 

 

 

 

 

By:

/s/ R. STEVE CREAMER

 

 

Its:

Chief Executive Officer

 

 

 

 

 

 

 

 

ENERGYSOLUTIONS, INC.

 

 

 

 

 

 

 

 

By:

/s/ R. STEVE CREAMER

 

 

Its:

Chief Executive Officer

 

 

 

 

 

 

Acknowledged:

 

 

 

 

 

EXELON GENERATION COMPANY, LLC

 

 

 

 

 

By:

/s/ BRUCE G. WILSON

 

 

Its:

Secretary

 

 

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has
duly executed this Limited Liability Company Agreement as of the     day of
December, 2007.

 

 

 

CLASS A MEMBER:

 

 

 

ENERGYSOLUTIONS, LLC

 

a Utah limited liability company

 

 

 

 

 

By:

/s/ R. STEVE CREAMER

 

 

Name: R. STEVE CREAMER

 

 

Title: Chief Executive Officer

 

 

 

 

 

CLASS B MEMBER:

 

 

 

EXELON GENERATION COMPANY, LLC

 

a Pennsylvania limited liability company

 

 

 

 

 

By:

/s/ THOMAS S. O’NEILL

 

 

Name: THOMAS S. O’NEILL

 

 

Title: VP New Plant Development

 

--------------------------------------------------------------------------------

 

Schedule 4.3.1

 

Third Party Consents

 

The consent of ComEd may be required for the termination of the operation of the
Synchronous Condensers and the abandonment or relocation of the of the
Synchronous Condensers.

 

--------------------------------------------------------------------------------

 

SCHEDULE 4.3.2

 

Regulatory Approvals

 

1.               NRC Approval for transfer of NRC Licenses and conforming
amendments (naming Buyer as licensee).

 

The Parties agree to submit information to NRC regarding decommissioning funding
financial assurance arrangements, including use of the QDF and NDF in accordance
with Buyer’s revised PSDAR for the Zion Station (including description of
activities related to moving Spent Nuclear Fuel to storage in the ISFSI Island),
the Buyer Backup NDT, the Irrevocable Letter of Credit, and the Performance
Guarantee.

 

2.               Private Letter Ruling from IRS including the following:

 

A.                                       PURSUANT TO REGULATIONS SECTION
1.468A-6, THE TRANSFER SHOULD BE TREATED AS A TRANSFER OF THE ASSETS OF SELLER’S
QDF WITHIN THE MEANING OF REGULATIONS SECTION 1.468A-1(B)(3) IN CONNECTION WITH
A SALE, EXCHANGE, OR OTHER DISPOSITION BY SELLER OF ALL OR A PORTION OF SELLER’S
QUALIFYING INTEREST IN ZION STATION TO BUYER.

 

b.                                      Seller’s QDFs will not become
disqualified in whole or in part on the Closing Date by reason of the transfer
of the assets in such funds to Buyer’s QDFs.

 

C.                                       SELLER’S QDFS WILL NOT RECOGNIZE GAIN
OR LOSS UPON THE TRANSFER OF THE ASSETS IN SUCH FUNDS TO BUYER’S QDFS ON THE
CLOSING DATE.

 

D.                                      SELLER WILL NOT RECOGNIZE INCOME UPON
THE TRANSFER OF THE ASSETS FROM SELLER’S QDFS TO BUYER’S QDFS ON THE CLOSING
DATE.

 

E.                                       BUYER’S QDFS ESTABLISHED TO HOLD THE
ASSETS TRANSFERRED FROM SELLER’S QDFS WILL BE TREATED AS QUALIFIED NUCLEAR
DECOMMISSIONING FUNDS SATISFYING THE REQUIREMENTS OF CODE SECTION 468A.

 

F.                                         BUYER WILL NOT RECOGNIZE GAIN OR LOSS
OR OTHERWISE TAKE ANY INCOME OR DEDUCTION INTO ACCOUNT BY REASON OF THE TRANSFER
OF THE ASSETS OF SELLER’S QDFS TO BUYER’S QDFS ON THE CLOSING DATE.

 

G.                                      BUYER’S QDFS WILL NOT RECOGNIZE GAIN OR
LOSS OR OTHERWISE TAKE ANY INCOME OR DEDUCTION INTO ACCOUNT BY REASON OF THE
TRANSFER OF THE ASSETS OF SELLER’S QDFS TO BUYER’S QDFS ON THE CLOSING DATE.

 

--------------------------------------------------------------------------------

 

H.                                      ON THE CLOSING DATE, BUYER’S QDFS WILL
RETAIN THE SAME BASIS IN THE ASSETS RECEIVED FROM SELLER’S QDFS AS SELLER’S QDFS
HAD IN SUCH ASSETS IMMEDIATELY PRIOR TO THE CLOSING DATE.

 

I.                                          FOLLOWING THE CLOSING DATE, PAYMENTS
OF REASONABLE COMPENSATION BY BUYER’S QDFS TO BUYER AND ITS AFFILIATES AS
COMPENSATION FOR THE PERFORMANCE OF REASONABLE AND NECESSARY SERVICES IN
CONNECTION WITH THE ENTOMBMENT, DECONTAMINATION, DISMANTLEMENT, REMOVAL AND
DISPOSAL OF STRUCTURES, SYSTEMS AND COMPONENTS OF THE ZION STATION (AND ANY
OTHER SERVICES WHICH WOULD CONSTITUTE “NUCLEAR DECOMMISSIONING COSTS” UNDER
REGULATION SECTION 1.468A-1(B)(5)) WILL NOT CONSTITUTE SELF-DEALING.

 

3.               Filing of Notification and Report form under Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and expiration of applicable
waiting period.

 

4.               Federal Communications Commission approval will be required for
any transfers of FCC licenses.

 

--------------------------------------------------------------------------------

 

Schedule 4.5

 

Material Adverse Effects

 

None.

 

--------------------------------------------------------------------------------

 

Schedule 4.6

 

Title and Related Matters

 

SELLER HOLDS AN UNDIVIDED INTEREST IN THE ZION ASSETS FREE AND CLEAR OF ALL
ENCUMBRANCES, EXCEPT PERMITTED ENCUMBRANCES AND THE ENCUMBRANCES LISTED IN
SCHEDULE 4.7.

 

TO THE KNOWLEDGE OF SELLER, THERE ARE NO SPECIAL ASSESSMENTS OR ENCUMBRANCES
IMPOSED BY GOVERNMENTAL AUTHORITIES OR VIOLATIONS THAT COULD BE REASONABLY BE
EXPECTED TO RESULT IN ANY MATERIAL CHARGE BEING LEVIED OR ASSESSED OR IN THE
CREATION OF ANY MATERIAL ENCUMBRANCE, EXCEPT AS DISCLOSED IN SCHEDULE 4.7.

 

--------------------------------------------------------------------------------

 

Schedule 4.7

 

Real Property Agreements

 

1.                            TAXES FOR THE YEAS 2006 AND 2007.

 

PERMANENT INDEX NUMBER:  04-27-100-014, 04-22-401-019, 04-22-401-020,
04-22-200-001, 04-22-401-002, 04-23-100-003, 04-26-100-001, 04-27-200-001,
04-22-401-009, 04-23-100-004, 04-22-305-003, 04-22-305-004, 04-22-305-005,
04-22-401-013, 04-22-401-014, 04-22-401-015, 04-22-401-016, 04-22-401-005,
04-22-401-006, 04-22-300-006, 04-27-100-005, 04-22-116-002, AND 04-23-300-001

 

NOTE:  TAXES FOR THE YEAR 2005, AMOUNTING TO $2,507.90, $564.77, $95,588.09,
$28,034.33, $8,963.47, $1,080,900.00, $5,433.47, $10,780.68, $3,486.44,
$37,831.50, $404.47, $1,525.58, $1,525.58, $289.25, $1,549.25, $2,206.77,
$4,939.93, $5,227.02, $2,610.27, $2,950.42, $407.28, $774.68, AND $187.21,
RESPECTIVELY, ARE PAID OF RECORD.

 

2.                                   RIGHTS, IF ANY, OF THE UNITED STATES OF
AMERICA, THE STATE OF ILLINOIS, THE MUNICIPALITY AND THE PUBLIC IN AND TO SO
MUCH OF THE LAND, IF ANY, AS MAY HAVE BEEN FORMED BY MEANS OTHER THAN NATURAL
ACCRETIONS.

 

3.                                   RIGHTS, IF ANY, OF THE UNITED STATES OF
AMERICA, THE STATE OF ILLINOIS, THE MUNICIPALITY AND THE PUBLIC IN AND TO ANY
PART OF THE LAND LYING UNDER THE WATERS OF LAKE MICHIGAN; AND THE RIGHTS OF
OTHER OWNERS OF LAND BORDERING ON THE LAKE IN RESPECT TO THE USE OF THE WATERS
OF SAID LAKE.

 

4.                                   RIGHTS OF THE PUBLIC, THE STATE OF ILLINOIS
AND THE MUNICIPALITY IN AND TO THAT PART OF THE LAND, IF ANY, TAKEN OR USED FOR
ROAD PURPOSES.

 

(AFFECTS THAT PART OF PARCEL 22 FALLING IN 29TH STREET)

 

5.                                   RIGHTS OF WAY FOR DRAINAGE TILES, DITCHES,
FEEDERS, LATERALS AND UNDERGROUND PIPES, IF ANY.

 

6.                                   RIGHT OF LAKE COUNTY PUBLIC WATER DISTRICT
TO CONSTRUCT, OPERATE AND MAINTAIN A PERFORATED WATER COLLECTING PIPE FOR A
‘RONNEY-TYPE’ COLLECTOR AND APPURTENANCES THERETO, ALL LOCATED AT A DEPTH OF NOT
LESS THAN 20 FEET BENEATH THE SURFACE OF THE LAND UNDER THE FOLLOWING DESCRIBED

 

--------------------------------------------------------------------------------

 

PROPERTY: A PARCEL OF LAND IN THE NORTH ½ OF FRACTIONAL SECTION 23, TOWNSHIP 46
NORTH, RANGE 12 EAST OF THE THIRD PRINCIPAL MERIDIAN, BOUNDED BY A LINE
DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE NORTH LINE OF CITY OF ZION’S
BEACH PARK PROPERTY (SAID POINT BEING A DISTANCE OF 220.00 FEET NORTH OF THE
SOUTH LINE OF THE NORTH ½ OF SECTION 23 AND 825.5 FEET EAST OF THE WEST LINE OF
SAID BEACH PARK PROPERTY; THENCE NORTH 100.0 FEET ALONG A LINE DEFLECTING 90
DEGREES 00 MINUTES 00 SECONDS FROM THE AFORESAID NORTH LINE OF ZION’S BEACH PARK
PROPERTY; THENCE EAST 10.0 FEET ALONG A LINE DEFLECTING 90 DEGREES 00 MINUTES 00
SECONDS FROM THE LAST DESCRIBED LINE; THENCE SOUTH 100.00 FEET ALONG A LINE
DEFLECTING 90 DEGREES 00 MINUTES 00 SECONDS FROM LAST DESCRIBED LINE TO A POINT
LOCATED ON THE NORTH BOUNDARY OF CITY OF ZION’S BEACH PARK PROPERTY; THENCE WEST
ALONG SAID PROPERTY LINE 10.0 FEET TO THE POINT OF BEGINNING, AS GRANTED BY
INSTRUMENT DATED SEPTEMBER 29, 1954 AND RECORDED JULY 17, 1956 AS DOCUMENT
916047.

 

7.                                   RIGHT OF THE ILLINOIS BELL TELEPHONE
COMPANY, ITS SUCCESSORS AND ASSIGNS, TO CONSTRUCT, LAY, MAINTAIN, ETC.,
EQUIPMENT CONSISTING OF POLES, WIRES AND UNDERGROUND CONDUITS, ETC., IN, UPON,
UNDER AND ALONG THAT PART OF FRACTIONAL SECTION 23, TOWNSHIP 46 NORTH, RANGE 12,
EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS: COMMENCING AT THE
SOUTHWEST CORNER OF THE NORTH ½ OF SAID FRACTIONAL SECTION 23 AND RUNNING THENCE
EAST ALONG THE SOUTH LINE OF SAID NORTH ½ OF FRACTIONAL SECTION 23, 1599.65 FEET
TO A POINT FOR THE POINT OF BEGINNING; THENCE NORTH ON A LINE AT RIGHT ANGLES TO
SAID SOUTH LINE OF THE NORTH ½ OF FRACTIONAL SECTION 23, 105.0 FEET TO A POINT;
THENCE EAST ON A LINE AT RIGHT ANGLES TO THE LAST DESCRIBED LINE, 10.0 FEET TO A
POINT; THENCE SOUTH ON A LINE AT RIGHT ANGLES TO THE LAST DESCRIBED LINE, 205.0
FEET TO A POINT; THENCE WEST ON A LINE AT RIGHT ANGLES TO THE LAST DESCRIBED
LINE, 10.0 FEET TO A POINT; THENCE NORTH ON A LINE AT RIGHT ANGLES TO THE LAST
DESCRIBED LINE, 100.0 FEET TO THE POINT OF BEGINNING; AND ALSO SOUTH 10.0 FEET
OF THE NORTH 80.0 FEET OF THE EAST 830.0 FEET OF THE WEST 1630.0 FEET OF THE
SOUTH ½ OF SAID FRACTIONAL SECTION 23, AS GRANTED BY INSTRUMENT DATED JUNE 14,
1954 AND RECORDED JUNE 30, 1954 AS DOCUMENT 828845.

 

8.                                   PIPELINE EASEMENT IN THAT PART OF THE LAND
DESCRIBED AS FOLLOWS: COMMENCING AT A POINT ON THE NORTH LINE OF THE SOUTH ½ OF
SAID FRACTIONAL SECTION 23, WHICH IS 1724.65 FEET EAST OF THE WEST LINE OF SAID
SECTION 23, (WHICH IS 924.65 FEET

 

--------------------------------------------------------------------------------

 

EAST OF THE WEST LINE OF THE CITY OF ZION BEACH PARK PROPERTY) SAID POINT BEING
THE POINT OF BEGINNING OF THIS EASEMENT DESCRIPTION; THENCE NORTH 00 DEGREES 00
MINUTES EAST AT RIGHT ANGLES TO THE NORTH LINE OF THE SOUTH ½ OF SAID FRACTIONAL
SECTION 23, A DISTANCE OF 102.17 FEET TO THE SOUTH LINE OF LAKE COUNTY PUBLIC
WATER DISTRICT COLLECTOR NO. 1, AS FENCED AND OCCUPIED; THENCE SOUTH 84 DEGREES
28 MINUTES EAST ALONG THE SOUTH LINE OF LAKE COUNTY PUBLIC WATER COLLECTOR NO.1,
AS FENCED AND OCCUPIED, A DISTANCE OF 10.05 FEET; THENCE SOUTH 00 DEGREES 00
MINUTES EAST, A DISTANCE OF 466.13 FEET; THENCE NORTH 90 DEGREES 00 MINUTES
WEST, A DISTANCE OF 10.0 FEET; THENCE NORTH 00 DEGREES 00 MINUTES WEST, A
DISTANCE OF 365.0 FEET TO THE POINT OF BEGINNING, AS GRANTED BY ZION PARK
DISTRICT TO THE LAKE COUNTY PUBLIC WATER DISTRICT, BY DEED DATED JANUARY 21,
1959 AND RECORDED FEBRUARY 6, 1959 AS DOCUMENT 1019978.

 

(AFFECTS PARCELS 12, 14 AND 15)

 

9.                                   COLLECTOR PIPE EASEMENT IN THAT PART OF THE
LAND DESCRIBED AS FOLLOWS:  COMMENCING AT A POINT ON THE NORTH LINE OF THE SOUTH
½ OF SAID FRACTIONAL SECTION 23, WHICH IS 1734.65 FEET EAST OF THE WEST LINE OF
SAID SECTION 23, AND WHICH IS 934.65 FEET EAST OF THE WEST LINE OF THE CITY OF
ZION BEACH PARK PROPERTY; THENCE SOUTH 00 DEGREES 00 MINUTES EAST 130.00 FEET TO
THE PLACE OF BEGINNING; THENCE EASTERLY AND SOUTHERLY ON A LINE WHOSE RADIUS IS
250.00 FEET TO A POINT WHICH IS 500.00 FEET SOUTH 00 DEGREES 00 MINUTES EAST OF
THE PLACE OF BEGINNING; THENCE NORTH 00 DEGREES 00 MINUTES EAST, 235.00 FEET TO
A POINT ON THE SOUTH LINE OF THE TRACT OF LAND DESCRIBED ABOVE FOR A COLLECTOR
SITE; THENCE NORTH 90 DEGREES 00 MINUTES EAST 37 FEET, MORE OR LESS, TO THE
SHORELINE OF LAKE MICHIGAN; THENCE NORTHERLY ALONG SHORELINE OF LAKE MICHIGAN,
30 FEET, MORE OR LESS, TO A POINT ON THE NORTH LINE OF THE TRACT OF LAND
DESCRIBED ABOVE FOR A COLLECTOR SITE; THENCE NORTH 00 DEGREES 00 MINUTES WEST 37
FEET, MORE OR LESS, TO A POINT, WHICH POINT IS THE INTERSECTION OF THE NORTH
LINE OF THE TRACT OF LAND DESCRIBED ABOVE FOR A PIPELINE EASEMENT; THENCE NORTH
00 DEGREES 00 MINUTES EAST, 235.00 FEET ALONG THE EAST LINE OF PIPELINE EASEMENT
TO THE PLACE OF BEGINNING, AS GRANTED BY ZION PARK DISTRICT TO LAKE COUNTY
PUBLIC WATER DISTRICT BY DEED DATED JANUARY 21, 1959 AND RECORDED FEBRUARY 6,
1959 AS DOCUMENT 1019978.

 

--------------------------------------------------------------------------------

 

10.                         RIGHTS OF THE PUBLIC AND OF THE STATE OF ILLINOIS,
IN AND TO SO MUCH OF THE LAND DESCRIBED AS FOLLOWS: A STRIP OF LAND, 66 FEET
WIDE, SITUATED IN THE NORTH ½ OF SECTION 22 AND IN THE NORTH ½ OF FRACTIONAL
SECTION 23, BOTH IN TOWNSHIP 46 NORTH, RANGE 12, EAST OF THE THIRD PRINCIPAL
MERIDIAN, WHICH STRIP OF LAND IS BOUNDED AND DESCRIBED AS FOLLOWS:  BEGINNING ON
THE SOUTH LINE OF THE NORTH ½ OF FRACTIONAL SECTION 23, AT A POINT WHICH IS 696
FEET, MEASURED ALONG SAID SOUTH LINE, EAST FROM THE WEST LINE OF SAID NORTH ½ OF
FRACTIONAL SECTION 23; AND RUNNING THENCE SOUTH ALONG THE EAST LINE OF THE WEST
696 FEET OF SAID NORTH ½ OF FRACTIONAL SECTION 23, A DISTANCE OF 24.72 FEET;
THENCE SOUTHWESTERLY ALONG THE ARC OF A CIRCLE, CONVEX TO THE SOUTHEAST AND
HAVING A RADIUS OF 1000 FEET, A DISTANCE OF 1070.60 FEET TO A POINT ON THE
PRESENT NORTH LINE OF SHILOH BOULEVARD, WHICH IS 108.10 FEET, MEASURED ALONG
SAID NORTH LINE, EAST FROM THE WEST LINE OF SAID NORTH ½ OF FRACTIONAL
SECTION 23; THENCE WEST ALONG SAID PRESENT NORTH LINE OF SHILOH BOULEVARD (WHICH
IS DESCRIBED AS A STRAIGHT LINE EXTENDING FROM A POINT ON THE EAST LINE OF THE
FORMER RIGHT OF WAY OF THE CHICAGO, WAUKEGAN AND NORTH SHORE RAILWAY, WHICH IS
8.60 FEET NORTH FROM THE SOUTH LINE OF THE NORTH ½ OF SAID SECTION 22, TO A
POINT ON THE WESTERLY LINE OF ILLINOIS BEACH STATE PARK NORTH ENTRANCE ROAD,
WHICH IS 9.94 FEET NORTH FROM THE SOUTH LINE OF SAID NORTH ½ OF FRACTIONAL
SECTION 23), A DISTANCE OF 204.24 FEET; THENCE NORTHEASTERLY ALONG THE ARC OF A
CIRCLE, CONVEX TO THE SOUTHEAST, HAVING A RADIUS OF 934 FEET AND BEING 66 FEET
NORTHWESTERLY FROM AND CONCENTRIC WITH THE FIRST HEREIN DESCRIBED ARC, A
DISTANCE OF 1257.41 FEET TO A POINT WHICH IS 630 FEET EAST FROM SAID WEST LINE
OF THE NORTH ½ OF FRACTIONAL SECTION 23 AND 124.94 FEET SOUTH FROM SAID SOUTH
LINE OF THE NORTH 1590.26 FEET ALONG THE EAST LINE OF THE WEST 630.0 FEET OF
SAID NORTH ½ OF FRACTIONAL SECTION 23, A DISTANCE OF 124.94 FEET TO THE SOUTH
LINE OF THE NORTH 1590.26 FEET AFORESAID; THENCE EAST ALONG SAID SOUTH LINE OF
THE NORTH 1590.26 FEET OF THE NORTH ½ OF FRACTIONAL SECTION 23, A DISTANCE OF 66
FEET TO THE POINT OF BEGINNING, AS DEDICATED FOR ROAD PURPOSES BY INSTRUMENT
DATED MARCH 14, 1968 AND RECORDED MAY 24, 1968 AS DOCUMENT 1379370.

 

(AFFECTS PARCEL 7)

 

11.                         RIGHTS OF THE PUBLIC OR QUASI-PUBLIC UTILITIES, IF
ANY, AND THE CITY OF ZION IN VACATED STREETS AND ALLEYS OF THOSE PARTS OF
ILLINOIS BEACH STATE PARK ENTRANCE ROAD WHICH

 

--------------------------------------------------------------------------------

 

FALLS WITHIN PARTS OF PARCELS 7, 8, 9 AND 15, VACATED BY ORDINANCES RECORDED AS
DOCUMENT 1380864 AND 1383005.

 

12.                         EASEMENT IN FAVOR OF LAKE COUNTY PUBLIC WATER
DISTRICT, AND ITS SUCCESSORS AND ASSIGNS, TO INSTALL, OPERATE AND MAINTAIN AN
18-INCH WATER MAIN, WITH ALL EQUIPMENT NECESSARY FOR THE PURPOSE OF SERVING THE
LAND AND OTHER PROPERTY, TOGETHER WITH THE RIGHT OF ACCESS TO SAID EQUIPMENT,
AND THE PROVISIONS RELATING THERETO CONTAINED IN THE GRANT RECORDED JULY 17,
1991 AS DOCUMENT NO. 3041142.

 

(AFFECTS PARCELS 3 AND 4)

 

13.                      COVENANTS, CONDITIONS AND RESTRICTIONS RELATING TO USE
OF THE LAND HEREIN; TO NUMBER, COST, LOCATION, KIND, CHARACTER AND USE OF
BUILDING TO BE ERECTED THEREON AND PROHIBITING USE, MANUFACTURE, SALE OR GIVING
AWAY OF INTOXICATING LIQUORS ON SAID LAND, CONTAINED IN THE DEED FROM GUS D.
THOMAS, AS RECEIVER OF THE ESTATE OF JOHN ALEX DOWIE, TO WYLLYE S. ABBOTT, DATED
MAY 10, 1909 AND RECORDED JUNE 15, 1909 AS DOCUMENT 123011.

 

SAID INSTRUMENT CONTAINS NO PROVISION FOR A FORFEITURE OF OR REVERSION OF TITLE
IN CASE OF BREACH OF CONDITION.

 

(AFFECTS PARCEL 19)

 

14.                         COVENANTS, CONDITIONS AND RESTRICTIONS RELATING TO
THE USE OF THE LAND HEREIN; TO THE USE, LOCATION, CHARACTER AND COST OF
BUILDINGS TO BE ERECTED ON SAID LAND, AND POSSIBLE RIGHTS WHICH MAY HAVE BEEN
ACQUIRED BY ANY OF THE LESSEES OF ANY PROPERTY SITUATED IN THE CITY OF ZION TO
ENFORCE THE SAME, CONTAINED IN THE LEASE MADE BY JOHN C. HATELY, RECEIVER OF THE
ESTATE OF JOHN ALEX DOWIE, TO WILLIAM BROWN PAINT COMPANY, DATED AUGUST 14, 1907
AND RECORDED AUGUST 14, 1907 AS DOCUMENT 113427.

 

SAID INSTRUMENT CONTAINS NO PROVISION FOR A FORFEITURE OF OR REVERSION OF TITLE
IN CASE OF BREACH OF CONDITION.

 

(AFFECTS PARCEL 19)

 

15.                         RIGHT OF LAKE COUNTY PUBLIC WATER DISTRICT TO A
PERPETUAL EASEMENT FOR WATER MAIN ON THE LAND AND ADJOINING PROPERTY SO THAT
SAID WATER MAIN WILL CONNECT THE COMMONWEALTH EDISON COMPANY PROPERTY TO AN
EXISTING

 

--------------------------------------------------------------------------------

 

MAIN OF THE LAKE COMPANY PUBLIC WATER DISTRICT LOCATED IN 25TH STREET AS GRANTED
BY INSTRUMENT DATED JULY 11, 1967 AND RECORDED JANUARY 15, 1969 AS DOCUMENT
1407546.

 

(AFFECTS PARCEL 24)

 

16.         RIGHTS OF THE MUNICIPALITY, PUBLIC AND QUASI-PUBLIC UTILITIES, IF
ANY, IN SAID VACATED ALLEYS AND STREETS FOR MAINTENANCE THEREIN OF POLES,
CONDUITS, SEWERS AND OTHER FACILITIES.

 

17.         EASEMENT DATED SEPTEMBER 12, 1968 (UNRECORDED) MADE BY THE
COMMONWEALTH EDISON COMPANY TO LAKE COUNTY PUBLIC WATER DISTRICT GRANTING THE
RIGHT TO INSTALL, USE, OPERATE, MAINTAIN, REPLACE AND REMOVE ONE EIGHT-INCH
WATER MAIN IN, UNDER AND ACROSS GRANTOR’S PROPERTY KNOWN AS TWENTY-NINTH STREET
(VACATED) BETWEEN DEBORAH AVENUE AND ILLINOIS BEACH STATE PARK NORTH ENTRANCE
ROAD AND THENCE SOUTH ON LAST SAID ROADWAY (NOW VACATED) TO A LINE 183.0 FEET
SOUTH OF THE NORTH SECTION LINE OF SECTION 27, TOWNSHIP 46 NORTH, RANGE 12 EAST
OF THE THIRD PRINCIPAL MERIDIAN.

 

18.         EASEMENT DATED APRIL 16, 1964 (UNRECORDED) MADE BY THE COMMONWEALTH
EDISON COMPANY TO LAKE COUNTY PUBLIC WATER DISTRICT GRANTING THE RIGHT TO
INSTALL, USE, OPERATE, MAINTAIN, REPLACE AND REMOVE ONE 12-INCH WATER MAIN,
TOGETHER WITH THE NECESSARY APPURTENANCES UNDER, ALONG AND ACROSS THE GRANTOR’S
PROPERTY AT TWO LOCATIONS, THE CENTERLINES OF WHICH ARE DESCRIBED AS FOLLOWS:

 

LOCATION NO. 1:  BEGINNING AT A POINT IN THE SOUTH LINE OF 29TH STREET WHICH IS
APPROXIMATELY FIFTEEN (15) FEET WEST OF THE CENTER LINE OF DEBORAH AVENUE;
THENCE SOUTH ONE-FOOT; THENCE EAST PARALLEL WITH THE SOUTH LINE OF 29TH STREET
TO A POINT TEN (10) FEET EAST OF THE EAST LINE OF DEBORAH AVENUE EXTENDED SOUTH;
THENCE SOUTH PARALLEL WITH THE EAST LINE OF DEBORAH AVENUE EXTENDED SOUTH A
DISTANCE OF 149.0 FEET TO THE NORTH LINE OF ILLINOIS BEACH STATE PARK, IN THE
NORTHEAST 1/4 OF SECTION 27, TOWNSHIP 46 NORTH, RANGE 12 EAST OF THE THIRD
PRINCIPAL MERIDIAN, IN LAKE COUNTY, ILLINOIS.

 

19.         RAILROAD RIGHTS-OF-WAY AND SPUR TRACKS AS LOCATED AND DEPICTED ON
SURVEY PREPARED BY RUSSELL WAID DILLON DATED SEPTEMBER 15, 2000.

 

--------------------------------------------------------------------------------

 

20.         TERMS AND PROVISIONS CONTAINED IN FACILITIES, INTERCONNECTION AND
EASEMENT AGREEMENT DATED JANUARY 12, 2001 AND RECORDED JANUARY 23, 2001 AS
DOCUMENT 4635121 MADE BY AND BETWEEN COMED GENERATION COMPANY LLC, EXELON
GENERATION COMPANY, LLC, AND THE COMMONWEALTH EDISON COMPANY.

 

21.                         EXISTING UNRECORDED LEASES IN FAVOR OF THE ILILINOIS
DEPARTMENT OF CONSERVATION FOR BICYCLE, FOOT PATH AND CROSS-COUNTRY SKIING
PURSUANT TO LEASE DATED MAY 5, 1989; ILLINOIS DEPARTMENT OF CONSERVATION FOR
INSTALLATION, OPERATION AND MAINTENANCE OF 120V UNDERGROUND CABLE WITH SIREN AND
SPEAKER, AND IN FAVOR OF THE CITY OF ZION FOR A LIBRARY, AND ALL RIGHTS
THEREUNDER OF THE LESSEES AND OF ANY PERSON OR PARTY CLAIMING BY, THROUGH OR
UNDER THE LESSEES.

 

22.                         FACILITIES, OPERATION AND EASEMENT AGREEMENT DATED
AS OF JANUARY 12, 2001 AND RECORDED FEBRUARY 20, 2001 AS DOCUMENT NUMBER 4647301
AMONG COMED GENERATION COMPANY LLC, EXELON GENERATION COMPANY, LLC AND
COMMONWEALTH EDISON COMPANY, AND THE TERMS, PROVISIONS, COVENANTS AND CONDITIONS
CONTAINED THEREIN, AS AMENDED.

 

--------------------------------------------------------------------------------

 

SCHEDULE 4.8

 

Insurance

 

No exceptions.

 

--------------------------------------------------------------------------------

 

Schedule 4.9

 

Environmental Matters

 

For purposes of the representations and warranties of Seller in Section 4.9,
references to the “Knowledge of Seller” shall be limited to the actual knowledge
of the following officers and employees of Seller or its Affiliates and matters
that should reasonably be known to such Persons (without independent
investigation or inquiry):

 

Robert Byers

John Dawn

Zigmund Karpa

Adam Levin

Alison MacKellar

Richard Maldonado

Darlene Murphy

Sharon Neal

Thomas O’Neill

Ronald Schuster

John VanVranken

 

The following Environmental Permits are used in or necessary for the ownership
and possession of the Zion Station Site and the Zion Assets as conducted as of
the date hereof.

 

Permit Name

 

Number

 

Fees

 

Reports

 

Agency

Hazardous Material Certificate

 

05249917009h

 

 

 

 

 

US DOT

Lifetime Operating Permit

 

097200AH

 

$

500

 

Air Permit 6 month usage/ annual discharge

 

IEPA

NPDES

 

IL0002763

 

$

30,000

 

Monthly

 

IEPA

Burning Permit

 

A0701161

 

 

 

 

 

IEPA IEPA ID# 097200AAH Permit is issued to Exelon Nuclear at Cantera for the
Fleet

US EPA ID#

 

ILD010217156

 

 

 

Waste Manifest Number

 

US EPA

Unit 1 Reactor License

 

DPR-39

 

 

 

 

 

US NRC

Unit 2 Reactor License

 

DPR-48

 

 

 

 

 

US NRC

Rad Material License

 

IL-01500-01

 

 

 

 

 

IDNS/ Now IEMA

 

--------------------------------------------------------------------------------

 

There are two abandoned underground storage tanks at Zion Station.  One is for
the Containment Spray Diesel Pump located on the south side of Unit 1
Containment.  The other is a diesel storage tank for the State of Illinois GEMS
System.  The diesel storage tank is abandoned and filled with aggregate in
compliance with regulations.

 

The following transformers located at the Zion Station Site may contain
polychlorinated-biphenyls.

 

Transformer I.D.
Code

 

Location of PCB Transformer Installation

 

 

 

135-1
(1AP042)

 

Turbine Building; Elev. 617'; C-36
(Ref S & L General Arrangement Drawing M-4, Coordinate F-3)

 

 

 

135
(1AP012)

 

Turbine Building; Elev. 617'; G-36
(Ref S & L General Arrangement Drawing M-4, Coordinates D-4)

 

 

 

Neutral 1
1LP47

 

Turbine Building; Elev. 617'; E-35
(Ref S & L General Arrangement Drawing M-4, Coordinate E-4)

 

 

 

139
(1AP015)

 

Unit 1 Switchgear Room; Elev. 617; H-35
(Ref. S & L General Arrangement Drawing M-4, Coordinate D-4)

 

 

 

138
(1AP014)

 

Unit 1 Switchgear Room; Elev. 617; H-33
(Ref. S & L General Arrangement Drawing M-4, Coordinate D-5)

 

 

 

137
(1AP013)

 

Unit 1 Switchgear Room; Elev. 617'; H-31
(Ref S & L General Arrangement Drawing M-4, Coordinate D-5)

 

--------------------------------------------------------------------------------

 

Transformer I.D.
Code

 

Location of PCB Transformer Installation

 

 

 

132
(1AP009)

 

Turbine Building; Elev. 617'; D-20
(Ref S & L General Arrangement Drawing M-4, Coordinate E-8)

 

 

 

232
(2AP009)

 

Turbine Building; Elev. 617'; D-20
(Ref. S & L General Arrangement Drawing M-4, Coordinate E-3)

 

 

 

237
(2AP013)

 

Unit 2 Switchgear Room; Elev. 617' H-9
(Ref. S & L General Arrangement Drawing M-13, Coordinate D-6)

 

 

 

238
(2AP014)

 

Unit 2 Switchgear Room; Elev. 617'; H-7
(Ref. S & L General Arrangement Drawing M-13, Coordinate D-6)

 

 

 

239
(2AP015)

 

Unit 2 Switchgear Room; Elev. 617'; H-6
(Ref. S & L General Arrangement Drawing M-13, Coordinate D-7)

 

 

 

235
(2AP012)

 

Turbine Building; Elev. 617'; G-4
(Ref. S & L General Arrangement Drawing M-13, Coordinate D-8)

 

--------------------------------------------------------------------------------

 

Transformer I.D.
Code

 

Location of PCB Transformer Installation

 

 

 

235-1
(2AP042)

 

Turbine Building; Elev. 617; C-4
(Ref S & L General Arrangement Drawing M-13, Coordinate F-7)

 

 

 

Neutral 2
2LP47

 

Turbine Building; Elev. 617'; E-5
(Ref. S & L General Arrangement Drawing M-13, Coordinate E-7)

 

 

 

133
(1AP010)

 

Auxiliary Building; Elev. 617'; K-26
(Ref. S & L General Arrangement Drawing M-4, Coordinate C-6)

 

 

 

134
(1AP011)

 

Auxiliary Building; Elev. 617'', N-22
(Ref S & L General Arrangement Drawing M-4, Coordinate B-7)

 

 

 

234
(2AP011)

 

Auxiliary Building; Elev. 617'; N-18
(Ref S & L General Arrangement Drawing M-4, Coordinate B-8)

 

 

 

233
(2AP010)

 

Auxiliary Building; Elev. 617'; K-18
(Ref. S & L General Arrangement Drawing M-4, Coordinate C-8)

 

In addition, there are minor amounts of PCBs in items such as ballasts for
fluorescent lights and possibly trace amounts of PCBs in transformers previously
drained of PCBs.

 

Since January 1, 2002, the following environmental assessments have been
completed by internal groups, regulatory agencies and vendors:

 

·                  Environmental Audit Report

Parker and Associates Baton Rouge, Louisiana

June 2002

·                  2002 Environmental Audit of Zion Station

Memorandum from John VanVranken dated July 15, 2002

(relates to June 2002 report of Parker and Associates)

·                  Environment, Health and Safety Audit Report

Parker and Associates Baton Rouge, Louisiana

August 2005

·                  2005 Environment, Health and Safety Audit

Memorandum from Sharon Neal dated August 31, 2005

(relates to August 2005 report of Parker and Associates)

·                  Environmental Management System Conformance Audit Report

 

--------------------------------------------------------------------------------

 

Parker and Associates Baton Rouge, Louisiana

September 2005

·                  Hydrogeologic Investigation Report, Fleetwide Assessment,
Zion Station

Conestoga-Rovers and Associates

September 2006

·                  Groundwater and Surface Water Monitoring Summary Results

AMO Environmental Decisions

Spring 2007

·                  Routine Groundwater and Surface Water Monitoring Summary
Results

AMO Environmental Decisions

Fall 2006

 

--------------------------------------------------------------------------------

 

Schedule 4.10.1

 

Material Agreements

 

None

 

--------------------------------------------------------------------------------

 

Schedule 4.12.2

 

Permits

 

The Seller holds various licenses issued by the Federal Communications
Commission that may be used in, or may be necessary for the ownership, use, or
possession of, the Zion Assets as presently conducted or as required by Law.

 

--------------------------------------------------------------------------------

 

Schedule 4.13.2

 

NRC Licenses

 

The following Licenses are issued by the NRC applicable to the Zion Assets:

 

License

 

Number

 

Agency

Unit 1 Reactor License

 

DPR-39

 

US NRC

Unit 2 Reactor License

 

DPR-48

 

US NRC

 

--------------------------------------------------------------------------------

 

Schedule 4.16

 

Qualified Decommissioning Trust

 

Attached is a statement of assets of the QDF as of November 30, 2007.

 

--------------------------------------------------------------------------------

 

Schedule 4.17

 

Non-Qualified Decommissioning Trust

 

Attached is a statement of assets of the NDF as of November 30, 2007.

 

--------------------------------------------------------------------------------

 

Schedule 2.2.17

 

Excluded Assets include the following:

 

·                  Computers and computer peripheral devices

·                  Firearms and ammunition

·                  Assets used in the operation and maintenance of the
Synchronous Condensers, which may include tools, supplies, communications
devices, one or more vehicles, office furniture and office equipment to be
identified and marked as property of Seller by mutual agreement of Buyer and
Seller prior to the Closing

·                  Other assets located at the Facility, to be identified and
marked as property of Seller by mutual agreement of Buyer and Seller prior to
the Closing

 

--------------------------------------------------------------------------------

 

GUARANTY

 

This Performance Guaranty (“Guaranty”) is made and given as of the 11th day of
December 2007, by EnergySolutions, Inc., a Delaware corporation (“Guarantor”),
in favor of Exelon Generation Company, LLC, a Pennsylvania limited liability
company (“Beneficiary”).

 

RECITALS

 

WHEREAS, ZionSolutions, LLC, a Delaware limited liability company and an
Affiliate of Guarantor (“Counterparty”), and EnergySolutions, LLC, a Utah
limited liability company and a wholly-owned subsidiary of Guarantor
(“Subsidiary”), have entered into that certain Asset Sale Agreement, dated the
date hereof (the “Asset Sale Agreement”), pursuant to which Beneficiary has
agreed to sell, assign, transfer, convey and deliver to Counterparty the Zion
Assets and transfer the Assumed Liabilities to Counterparty, and Counterparty
has agreed to purchase, assume and accept from Beneficiary the Zion Assets and
to assume, agree to pay, perform and discharge when due the Assumed
Liabilities,  all in accordance with the Asset Sale Agreement, and the parties
have undertaken certain duties, responsibilities and obligations as set forth in
the Asset Sale Agreement;

 

WHEREAS, upon the Closing, Counterparty will be entering into that certain Lease
Agreement (the “Lease Agreement”) pursuant to which Beneficiary will lease the
Premises and Counterparty will pay Rent for such lease in accordance with the
Lease Agreement, and the parties will undertake certain duties, responsibilities
and obligations as set forth in the Lease Agreement;

 

WHEREAS, upon the Closing, Counterparty and Beneficiary will be entering into
that certain Put Option Agreement (the “Put Option Agreement”), pursuant to
which Beneficiary will grant the Put Option to Counterparty subject to the terms
and conditions set forth in the Put Option Agreement;

 

WHEREAS, upon the Closing, Counterparty and Beneficiary will be entering into
that certain Assignment and Assumption Agreement  (the “Assignment and
Assumption Agreement”), pursuant to which Counterparty will assume and accept
from Beneficiary the Zion Assets and will assume all Assumed Liabilities as
provided in the Asset Sale Agreement;

 

WHEREAS, upon the Closing, Counterparty and Subsidiary will be entering into
that certain Leased Personnel Agreement (the “Leased Personnel Agreement”),
pursuant to which Counterparty will agree to compensate Beneficiary for the cost
of personnel employed by Beneficiary who may perform services for Counterparty;

 

WHEREAS, upon the Closing, Subsidiary will be entering into that certain
Disposal Services Agreement (the “Disposal Services Agreement”), pursuant to
which Subsidiary will agree to provide waste disposal services in order to
further secure the obligations of Subsidiary under the Performance Guarantee;

 

--------------------------------------------------------------------------------

 

WHEREAS, upon the Closing, Subsidiary will be entering into that certain
Irrevocable Easement for Disposal Capacity (the “Irrevocable Easement for
Disposal Capacity”), pursuant to which Subsidiary will agree to provide waste
disposal capacity in its facility in order to further secure the obligations of
Subsidiary under the Performance Guarantee;

 

WHEREAS, Subsidiary has entered into that certain Performance Guaranty, dated
the date hereof (the “Performance Guaranty”), pursuant to which Subsidiary has
guaranteed the obligations of Counterparty under the Asset Sale Agreement, the
Lease Agreement, the Put Option Agreement and the Assignment and Assumption
Agreement;

 

WHEREAS, Guarantor has agreed to guarantee obligations of Counterparty and
Subsidiary under the Asset Sale Agreement, the obligations of Counterparty under
the Lease Agreement, the Put Option Agreement, the Leased Personnel Agreement,
and the Assignment and Assumption Agreement, and the obligations of Subsidiary
under the Disposal Services Agreement, the Irrevocable Easement for Disposal
Capacity, and the Performance Guaranty (collectively, the “Guaranteed
Agreements”); and

 

WHEREAS, Guarantor has executed and delivered this Guaranty as an inducement for
Beneficiary to enter into the Asset Sale Agreement, and it is a condition to the
obligations of Beneficiary under the Asset Sale Agreement that this Guaranty
remain in full force and effect; and

 

WHEREAS, Guarantor will benefit from the transactions contemplated by the Asset
Sale Agreement.

 

NOW, THEREFORE, Guarantor agrees as follows:

 

1.                                       DEFINITIONS.  CAPITALIZED TERMS USED
BUT NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS ASCRIBED TO SUCH TERMS
IN THE GUARANTEED AGREEMENTS.

 

2.                                       GUARANTY.  AS AN INDUCEMENT TO
BENEFICIARY, FOR AND IN CONSIDERATION OF BENEFICIARY ENTERING INTO THE ASSET
SALE AGREEMENT, GUARANTOR HEREBY ABSOLUTELY, UNCONDITIONALLY, AND IRREVOCABLY
GUARANTEES TO BENEFICIARY AND ITS SUCCESSORS, ENDORSEES AND PERMITTED ASSIGNS,
AS PRIMARY OBLIGOR AND NOT MERELY AS A SURETY, THE FULL AND PROMPT PAYMENT AND
PERFORMANCE, WHEN DUE, BY COUNTERPARTY OF ALL OF ITS PRESENT AND FUTURE
OBLIGATIONS THAT ARE REQUIRED TO BE PAID OR PERFORMED IN ACCORDANCE WITH THE
GUARANTEED AGREEMENTS  (COLLECTIVELY, THE “GUARANTEED OBLIGATIONS”).  THE
GUARANTEED OBLIGATIONS SHALL INCLUDE, WITHOUT LIMITATION, ALL REASONABLE COSTS
AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS), IF ANY,
INCURRED IN ENFORCING BENEFICIARY’S RIGHTS UNDER THIS GUARANTY, BUT ONLY TO THE
EXTENT THAT BENEFICIARY IS SUCCESSFUL IN ENFORCING ITS LEGAL RIGHTS UNDER THIS
GUARANTY.  THIS IS A GUARANTY OF PAYMENT AND PERFORMANCE AND NOT OF COLLECTION.

 

3.                                       GUARANTY ABSOLUTE.   THE LIABILITY OF
GUARANTOR UNDER THIS GUARANTY SHALL BE ABSOLUTE, UNCONDITIONAL AND IRREVOCABLE,
AND NOTHING WHATEVER EXCEPT ACTUAL FULL PAYMENT AND PERFORMANCE OF THE
GUARANTEED OBLIGATIONS (AND ALL OTHER DEBTS, OBLIGATIONS AND LIABILITIES

 

--------------------------------------------------------------------------------

 

OF GUARANTOR UNDER THIS GUARANTY) SHALL OPERATE TO DISCHARGE GUARANTOR’S
LIABILITY HEREUNDER.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
GUARANTOR’S LIABILITY HEREUNDER SHALL NOT BE DISCHARGED, RELEASED OR AFFECTED,
IN WHOLE OR IN PART, BY:

 

3.1.                            THE OCCURRENCE OR CONTINUANCE OF ANY EVENT OF
BANKRUPTCY, REORGANIZATION OR INSOLVENCY WITH RESPECT TO COUNTERPARTY OR
GUARANTOR, OR ANY DISALLOWANCE OF ALL OR ANY PORTION OF ANY CLAIM BY
BENEFICIARY, ITS SUCCESSORS OR ASSIGNS IN CONNECTION WITH ANY SUCH PROCEEDING OR
IN THE EVENT THAT ALL OR ANY PART OF ANY PAYMENT IS RECOVERED FROM BENEFICIARY
AS A PREFERENCE PAYMENT OR FRAUDULENT TRANSFER UNDER THE UNITED STATES
BANKRUPTCY CODE OR ANY APPLICABLE LAW, OR THE DISSOLUTION, LIQUIDATION OR
WINDING UP OF GUARANTOR OR COUNTERPARTY;

 

3.2.                            ANY AMENDMENT, SUPPLEMENT, REFORMATION, WAIVER
OR OTHER MODIFICATION OF THE GUARANTEED AGREEMENTS, UNLESS SUCH AMENDMENT,
SUPPLEMENT, REFORMATION, WAIVER OR OTHER MODIFICATION MATERIALLY INCREASES THE
LIABILITY OF GUARANTOR WITH RESPECT TO THE GUARANTEED OBLIGATIONS AND GUARANTOR
HAS NOT GIVEN ITS CONSENT THERETO IF SUCH CONSENT IS REQUIRED UNDER THE
APPLICABLE GUARANTEED AGREEMENTS;

 

3.3.                            THE EXERCISE, NON-EXERCISE OR DELAY IN
EXERCISING, BY BENEFICIARY OR ANY OTHER PERSON, OF ANY RIGHT UNDER THIS GUARANTY
OR THE GUARANTEED AGREEMENTS;

 

3.4.                            ANY EXTENSION, RENEWAL, SETTLEMENT, COMPROMISE
OR WAIVER CONCERNING THE GUARANTEED OBLIGATIONS OR ANY CHANGE IN TIME, MANNER OR
PLACE OF PAYMENT OF, OR IN ANY OTHER TERMS OF, ALL OR ANY OF THE GUARANTEED
OBLIGATIONS OR ANY OTHER AMENDMENT OR WAIVER OF, OR ANY CONSENT TO DEPART FROM,
THE GUARANTEED AGREEMENTS OR ANY OTHER AGREEMENT, DOCUMENT OR INSTRUMENT
RELATING THERETO; PROVIDED, HOWEVER, GUARANTOR’S OBLIGATIONS WITH RESPECT TO THE
GUARANTEED OBLIGATIONS SHALL BE CREDITED TO THE EXTENT THAT THAT ANY SUCH
SETTLEMENT OR COMPROMISE REDUCES THE GUARANTEED OBLIGATIONS;

 

3.5.                            ANY ASSIGNMENT OR OTHER TRANSFER OF RIGHTS UNDER
THIS GUARANTY BY BENEFICIARY, OR ANY PERMITTED ASSIGNMENT OR OTHER TRANSFER OF
THE GUARANTEED AGREEMENTS, INCLUDING ANY ASSIGNMENT AS SECURITY FOR FINANCING
PURPOSES;

 

3.6.                            ANY MERGER OR CONSOLIDATION INTO OR WITH ANY
OTHER ENTITY, OR OTHER CHANGE IN THE CORPORATE EXISTENCE OR CESSATION OF
EXISTENCE OF, COUNTERPARTY OR GUARANTOR;

 

3.7.                            ANY CHANGE IN OWNERSHIP OR CONTROL OF GUARANTOR
OR COUNTERPARTY;

 

3.8.                            ANY SALE, TRANSFER OR OTHER DISPOSITION BY
GUARANTOR OF ANY DIRECT OR INDIRECT INTEREST IT MAY HAVE IN COUNTERPARTY;

 

3.9.                            THE INACCURACY OR BREACH, OR ALLEGED INACCURACY
OR BREACH, OF ANY OF THE REPRESENTATIONS AND WARRANTIES OF COUNTERPARTY OR
BENEFICIARY UNDER THE GUARANTEED AGREEMENTS;

 

--------------------------------------------------------------------------------

 

3.10.                      THE FAILURE TO CREATE, PRESERVE, VALIDATE, PERFECT OR
PROTECT ANY SECURITY INTEREST, COLLATERAL OR OTHER GUARANTY GRANTED TO, OR IN
FAVOR OF, ANY PERSON;

 

3.11.                      THE EXISTENCE OF, OR ANY SUBSTITUTION, MODIFICATION,
EXCHANGE, RELEASE, SETTLEMENT OR COMPROMISE OF, ANY SECURITY OR COLLATERAL FOR
OR GUARANTY OF ANY OF THE GUARANTEED OBLIGATIONS OR FAILURE TO APPLY SUCH
SECURITY OR COLLATERAL OR FAILURE TO ENFORCE SUCH GUARANTY;

 

3.12.                      THE EXISTENCE OF ANY CLAIM, SET-OFF, OR OTHER RIGHTS
WHICH GUARANTOR OR ANY AFFILIATE THEREOF MAY HAVE AT ANY TIME AGAINST
BENEFICIARY, ANY AFFILIATE THEREOF OR ANY OTHER PERSON;

 

3.13.                      THE GENUINENESS, VALIDITY, REGULARITY, OR
ENFORCEABILITY, IN WHOLE OR IN PART, OF THIS GUARANTY, THE GUARANTEED
AGREEMENTS, OR ANY OTHER AGREEMENT, DOCUMENT OR INSTRUMENT RELATED TO THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR THE ABSENCE OF ANY ACTION TO
ENFORCE THE SAME, OR ANY PROVISION OF LAW PURPORTING TO PROHIBIT PAYMENT OR
PERFORMANCE BY COUNTERPARTY OF THE GUARANTEED OBLIGATIONS;

 

3.14.                      THE ABSENCE OF ANY NOTICE TO, OR KNOWLEDGE BY,
GUARANTOR OF THE EXISTENCE OR OCCURRENCE OF ANY OF THE MATTERS OR EVENTS SET
FORTH IN THE FOREGOING CLAUSES; AND

 

3.15.                      EXCEPT AS PROVIDED HEREIN, ANY OTHER CIRCUMSTANCES
WHICH MIGHT OTHERWISE CONSTITUTE A DEFENSE TO, OR DISCHARGE OF, GUARANTOR OR
COUNTERPARTY IN RESPECT OF THE GUARANTEED OBLIGATIONS OR A LEGAL OR EQUITABLE
DISCHARGE OF COUNTERPARTY IN RESPECT THEREOF, INCLUDING, A DISCHARGE AS A RESULT
OF ANY BANKRUPTCY OR SIMILAR LAW.

 

4.                                       WAIVER.  IN ADDITION TO WAIVING ANY
DEFENSES TO WHICH SECTION 3.1 THROUGH SECTION 3.15 HEREOF MAY REFER:

 

4.1.                            GUARANTOR HEREBY IRREVOCABLY, UNCONDITIONALLY
AND EXPRESSLY WAIVES, AND AGREES THAT IT SHALL NOT AT ANY TIME INSIST UPON,
PLEAD OR IN ANY MANNER WHATSOEVER CLAIM OR TAKE THE BENEFIT OR ADVANTAGE OF, ANY
APPRAISAL, VALUATION, STAY, EXTENSION, MARSHALING OF ASSETS OR REDEMPTION LAWS,
OR EXEMPTION, WHETHER NOW OR AT ANY TIME HEREAFTER IN FORCE, WHICH MAY DELAY,
PREVENT OR OTHERWISE AFFECT THE PERFORMANCE BY GUARANTOR OF ITS OBLIGATIONS
UNDER, OR THE ENFORCEMENT BY BENEFICIARY OF, THIS GUARANTY;

 

4.2.                            GUARANTOR HEREBY IRREVOCABLY, UNCONDITIONALLY
AND EXPRESSLY WAIVES ALL NOTICES, DILIGENCE, PRESENTMENT AND DEMAND OF EVERY
KIND (WHETHER FOR NONPERFORMANCE, NONPAYMENT OR PROTEST OR OF ACCEPTANCE,
MATURITY, EXTENSION OF TIME, CHANGE IN NATURE OR FORM OF THE GUARANTEED
OBLIGATIONS, ACCEPTANCE OF SECURITY, RELEASE OF SECURITY, COMPOSITION OR
AGREEMENT ARRIVED AT AS TO THE AMOUNT OF, OR THE TERMS OF, THE GUARANTEED
OBLIGATIONS, NOTICE OF ADVERSE CHANGE IN COUNTERPARTY’S FINANCIAL CONDITION, OR
ANY OTHER FACT WHICH MIGHT MATERIALLY INCREASE THE RISK TO GUARANTOR HEREUNDER)
WITH RESPECT TO THE GUARANTEED OBLIGATIONS WHICH ARE NOT SPECIFICALLY

 

--------------------------------------------------------------------------------

 

REQUIRED TO BE GIVEN BY BENEFICIARY TO GUARANTOR IN THE GUARANTEED AGREEMENTS,
AND ANY OTHER DEMANDS WHATSOEVER WHICH ARE NOT SPECIFICALLY REQUIRED TO BE GIVEN
BY BENEFICIARY TO GUARANTOR IN THE GUARANTEED AGREEMENTS, AND WAIVES THE BENEFIT
OF ALL PROVISIONS OF LAW WHICH ARE IN CONFLICT WITH THE TERMS OF THIS GUARANTY;
PROVIDED, HOWEVER, BENEFICIARY AGREES THAT ALL DEMANDS UNDER THIS GUARANTY SHALL
BE IN WRITING AND SHALL SPECIFY IN WHAT MANNER AND WHAT AMOUNT COUNTERPARTY HAS
FAILED TO PAY OR PERFORM AND AN EXPLANATION OF WHY SUCH PAYMENT IS DUE, WITH A
SPECIFIC STATEMENT THAT BENEFICIARY IS CALLING UPON GUARANTOR TO PAY OR PERFORM
UNDER THIS GUARANTY.  ANY PAYMENT DEMAND SHALL ALSO INCLUDE THE BANK ACCOUNT AND
WIRE TRANSFER INFORMATION TO WHICH THE FUNDS SHOULD BE WIRE TRANSFERRED;

 

4.3.                            THE GUARANTOR HEREBY IRREVOCABLY,
UNCONDITIONALLY AND EXPRESSLY WAIVES PROMPTNESS, DILIGENCE, NOTICE OF ACCEPTANCE
AND ANY OTHER NOTICE WITH RESPECT TO ANY OF THE GUARANTEED OBLIGATIONS AND THE
DELIVERY, ACCEPTANCE, PERFORMANCE, DEFAULT OR ENFORCEMENT OF THIS GUARANTY AND
ANY REQUIREMENT THAT BENEFICIARY PROTECT, SECURE OR PERFECT ANY SECURITY
INTEREST OR EXHAUST ANY RIGHT OR FIRST PROCEED AGAINST COUNTERPARTY OR ANY OTHER
PERSON OR ANY OTHER SECURITY OR GUARANTY;

 

4.4.                            GUARANTOR IRREVOCABLY, UNCONDITIONALLY AND
EXPRESSLY WAIVES (I) ANY RIGHT IT MAY HAVE TO BRING A CASE OR PROCEEDING AGAINST
COUNTERPARTY BY REASON OF GUARANTOR’S PERFORMANCE UNDER THIS GUARANTY OR WITH
RESPECT TO ANY OTHER OBLIGATION OF COUNTERPARTY TO GUARANTOR, UNDER ANY STATE OR
FEDERAL BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM OR SIMILAR LAWS FOR
THE RELIEF OF DEBTORS OR OTHERWISE; (II) ANY SUBROGATION TO THE RIGHTS OF
BENEFICIARY AGAINST COUNTERPARTY AND ANY OTHER CLAIM AGAINST COUNTERPARTY WHICH
ARISES AS A RESULT OF PAYMENTS MADE BY GUARANTOR PURSUANT TO THIS GUARANTY,
UNTIL THE GUARANTEED OBLIGATIONS HAVE BEEN PAID AND PERFORMED IN FULL AND SUCH
PAYMENTS ARE NOT SUBJECT TO ANY RIGHT OF RECOVERY; (III) ANY SETOFFS OR
COUNTERCLAIMS AGAINST BENEFICIARY, COUNTERPARTY OR ANY OTHER PERSON WHICH WOULD
OTHERWISE IMPAIR BENEFICIARY’S RIGHTS AGAINST GUARANTOR HEREUNDER; AND (IV) ANY
RIGHT OF REIMBURSEMENT OR CONTRIBUTION FROM COUNTERPARTY.  IF ANY AMOUNT SHALL
BE PAID TO THE GUARANTOR ON ACCOUNT OF SUCH SUBROGATION RIGHTS AT ANY TIME PRIOR
TO WHEN THE GUARANTEED OBLIGATIONS HAVE BEEN PAID AND PERFORMED IN FULL, SUCH
AMOUNT SHALL BE HELD IN TRUST FOR THE BENEFIT OF BENEFICIARY AND SHALL FORTHWITH
BE PAID TO BENEFICIARY TO BE APPLIED TO THE GUARANTEED OBLIGATIONS; AND

 

4.5.                            NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN, GUARANTOR SHALL NOT WAIVE AND SHALL BE ENTITLED TO ASSERT
DEFENSES BASED ON OR ARISING OUT OF ANY DEFENSE OF COUNTERPARTY BASED UPON
(1) THE TERMINATION OF ANY GUARANTEED AGREEMENTS AT A TIME WHEN COUNTERPARTY IS
NOT IN BREACH OF THE RESPECTIVE AGREEMENT, OR (2) THE FAILURE OF BENEFICIARY TO
PERFORM AN OBLIGATION OF BENEFICIARY UNDER ANY GUARANTEED AGREEMENTS THAT
ADVERSELY AFFECTS COUNTERPARTY’S PERFORMANCE OF ITS OBLIGATIONS UNDER THE
RESPECTIVE AGREEMENT.

 

5.                                       REPRESENTATIONS AND WARRANTIES. 
GUARANTOR HEREBY REPRESENTS AND WARRANTS AS FOLLOWS:

 

--------------------------------------------------------------------------------

 

5.1.                            GUARANTOR IS A CORPORATION DULY ORGANIZED AND
VALIDLY EXISTING UNDER THE LAWS OF DELAWARE.

 

5.2.                            GUARANTOR HAS FULL CORPORATE POWER, AUTHORITY
AND LEGAL RIGHT TO EXECUTE AND DELIVER THIS GUARANTY AND TO PERFORM ITS
OBLIGATIONS HEREUNDER.

 

5.3.                            THIS GUARANTY HAS BEEN DULY AUTHORIZED, EXECUTED
AND DELIVERED BY GUARANTOR.

 

5.4.                            THIS GUARANTY CONSTITUTES THE LEGAL, VALID AND
BINDING OBLIGATION OF GUARANTOR ENFORCEABLE AGAINST GUARANTOR IN ACCORDANCE WITH
ITS TERMS.

 

5.5.                            THE EXECUTION AND DELIVERY BY GUARANTOR OF THIS
GUARANTY AND THE PERFORMANCE BY GUARANTOR OF ITS OBLIGATIONS HEREUNDER WILL NOT
(I) CONFLICT WITH OR RESULT IN ANY BREACH OF ANY PROVISION OF GUARANTOR’S
CERTIFICATE OF INCORPORATION OR BYLAWS (OR OTHER SIMILAR GOVERNING DOCUMENTS);
(II) VIOLATE ANY LAWS APPLICABLE TO GUARANTOR; (III) RESULT IN A BREACH OF OR
CONSTITUTE A DEFAULT (OR GIVE RISE TO ANY RIGHT OF TERMINATION, CANCELLATION OR
ACCELERATION) UNDER ANY OF THE TERMS, CONDITIONS OR PROVISIONS OF ANY NOTE,
BOND, MORTGAGE, INDENTURE, LEASE, AGREEMENT OR OTHER INSTRUMENT OR OBLIGATION TO
WHICH GUARANTOR IS A PARTY OR BY WHICH IT OR ITS ASSETS OR PROPERTY ARE BOUND;
OR (IV) REQUIRE ANY CONSENT, APPROVAL, PERMIT OR AUTHORIZATION OF, OR FILING
WITH OR NOTIFICATION TO, ANY GOVERNMENTAL AUTHORITY.

 

5.6.                            NO ACTION, SUIT OR PROCEEDING AT LAW OR IN
EQUITY OR BY OR BEFORE ANY GOVERNMENTAL AUTHORITY OR ARBITRAL TRIBUNAL IS NOW
PENDING OR, TO THE KNOWLEDGE OF GUARANTOR, THREATENED AGAINST GUARANTOR THAT
WOULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON THE LEGALITY,
VALIDITY, PERFORMANCE OR ENFORCEABILITY OF THIS GUARANTY.

 

5.7.                            GUARANTOR’S OBLIGATIONS UNDER THIS GUARANTY ARE
NOT SUBJECT TO ANY OFFSETS OR CLAIMS OF ANY KIND AGAINST COUNTERPARTY,
BENEFICIARY OR ANY OF THEIR RESPECTIVE AFFILIATES.

 

5.8.                            IT IS NOT AND SHALL NOT BE NECESSARY FOR
BENEFICIARY TO INQUIRE INTO THE POWERS OF COUNTERPARTY OR THE OFFICERS,
DIRECTORS, PARTNERS, TRUSTEES OR AGENTS ACTING OR PURPORTING TO ACT ON
COUNTERPARTY’S BEHALF PURSUANT TO THE GUARANTEED AGREEMENTS, AND ANY GUARANTEED
OBLIGATIONS MADE OR CREATED IN RELIANCE UPON THE PROFESSED EXERCISE OF SUCH
POWERS SHALL BE GUARANTEED HEREUNDER TO THE EXTENT MADE OR CREATED IN ACCORDANCE
WITH THE TERMS OF THE GUARANTEED AGREEMENTS.

 

6.                                       SECURITY.  THE GUARANTOR ACKNOWLEDGES
THAT PURSUANT TO THE CREDIT SUPPORT AGREEMENT AND THE PLEDGE AGREEMENT,
BENEFICIARY WILL BE PROVIDED CERTAIN SECURITY INTERESTS AND COLLATERAL TO SECURE
CERTAIN OF COUNTERPARTY’S OBLIGATIONS UNDER THIS GUARANTY AND THE GUARANTEED
AGREEMENTS, AND THE GUARANTOR HEREBY ACKNOWLEDGES AND AGREES THAT THIS GUARANTY
IS IN ADDITION TO, AND NOT IN SUBSTITUTION FOR, SUCH SECURITY INTERESTS AND
COLLATERAL.

 

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7.                                       ACTIONS OF BENEFICIARY.  THE
BENEFICIARY MAY, AT ANY TIME AND FROM TIME TO TIME, WITHOUT NOTICE TO OR CONSENT
OF THE GUARANTOR, WITHOUT INCURRING RESPONSIBILITY TO THE GUARANTOR AND WITHOUT
IMPAIRING OR RELEASING THE OBLIGATIONS OF THE GUARANTOR HEREUNDER, UPON OR
WITHOUT ANY TERMS OR CONDITIONS: (A) TAKE OR REFRAIN FROM TAKING ANY AND ALL
ACTIONS WITH RESPECT TO THE GUARANTEED OBLIGATIONS OR THE GUARANTEED AGREEMENTS
OR ANY PERSON THAT THE BENEFICIARY DETERMINES IN ITS SOLE DISCRETION TO BE
NECESSARY OR APPROPRIATE; (B) TAKE OR REFRAIN FROM TAKING ANY ACTION OF ANY KIND
IN RESPECT OF ANY SECURITY FOR ANY GUARANTEED OBLIGATION(S) OR LIABILITY OF THE
COUNTERPARTY TO THE BENEFICIARY; OR (C) COMPROMISE OR SUBORDINATE ANY GUARANTEED
OBLIGATION(S) OR LIABILITY OF THE COUNTERPARTY TO THE BENEFICIARY INCLUDING ANY
SECURITY THEREFOR.

 

8.                                       CONTINUING GUARANTEE.  THIS GUARANTY IS
A CONTINUING GUARANTY AND SHALL REMAIN IN FULL FORCE AND EFFECT UNTIL ALL
GUARANTEED OBLIGATIONS HAVING BEEN FULLY AND IRREVOCABLY PERFORMED AND SATISFIED
IN FULL.  THIS GUARANTY SHALL CONTINUE TO BE EFFECTIVE, OR BE REINSTATED, AS THE
CASE MAY BE, IF AT ANY TIME PAYMENT, OR ANY PART THEREOF, OF ANY OF THE
GUARANTEED OBLIGATIONS BY GUARANTOR IS RESCINDED AND RETURNED BY BENEFICIARY TO
GUARANTOR UPON THE INSOLVENCY, BANKRUPTCY, DISSOLUTION, LIQUIDATION OR
REORGANIZATION OF COUNTERPARTY OR GUARANTOR, OR UPON OR AS A RESULT OF THE
APPOINTMENT OF A RECEIVER, INTERVENOR OR CONSERVATOR OF, OR TRUSTEE OR SIMILAR
OFFICER FOR, COUNTERPARTY, GUARANTOR OR ANY SUBSTANTIAL PART OF THEIR RESPECTIVE
PROPERTIES, OR OTHERWISE, ALL AS THOUGH SUCH PAYMENTS HAD NOT BEEN MADE. 
GUARANTOR AGREES, UPON THE WRITTEN REQUEST OF BENEFICIARY, TO EXECUTE AND
DELIVER TO BENEFICIARY ANY ADDITIONAL INSTRUMENTS OR DOCUMENTS NECESSARY OR
ADVISABLE FROM TIME TO TIME, IN THE REASONABLE AND GOOD FAITH OPINION OF
BENEFICIARY, TO CAUSE THIS GUARANTY TO BE, BECOME OR REMAIN VALID AND EFFECTIVE
IN ACCORDANCE WITH ITS TERMS.

 

9.                                       AMENDMENTS; WAIVERS.  NEITHER THIS
INSTRUMENT NOR ANY TERMS HEREOF MAY BE CHANGED, WAIVED, DISCHARGED OR TERMINATED
ORALLY, BUT ONLY BY AN INSTRUMENT IN WRITING SIGNED BY BENEFICIARY AND
GUARANTOR.  NO DELAY OR FAILURE BY BENEFICIARY TO EXERCISE ANY REMEDY AGAINST
COUNTERPARTY OR GUARANTOR SHALL BE CONSTRUED AS A WAIVER OF THAT RIGHT OR
REMEDY.  NO FAILURE ON THE PART OF BENEFICIARY TO EXERCISE, AND NO DELAY IN
EXERCISING, ANY RIGHT HEREUNDER SHALL OPERATE AS A WAIVER THEREOF, NOR SHALL ANY
SINGLE OR PARTIAL EXERCISE OF ANY RIGHT HEREUNDER PRECLUDE ANY OTHER OR FURTHER
EXERCISE THEREOF OR THE EXERCISE OF ANY OTHER RIGHT.  THE REMEDIES HEREIN
PROVIDED ARE CUMULATIVE AND NOT EXCLUSIVE OF ANY REMEDIES PROVIDED BY ANY
APPLICABLE LAW.   NO COURSE OF DEALING BETWEEN THE GUARANTOR AND THE BENEFICIARY
SHALL OPERATE AS A WAIVER THEREOF.  NO NOTICE TO OR DEMAND ON THE GUARANTOR IN
ANY CASE SHALL ENTITLE THE GUARANTOR TO ANY OTHER OR FURTHER NOTICE OR DEMAND IN
SIMILAR OR OTHER CIRCUMSTANCES OR CONSTITUTE A WAIVER OF THE RIGHTS OF THE
BENEFICIARY TO ANY OTHER OR FURTHER ACTION IN ANY CIRCUMSTANCES WITHOUT NOTICE
OR DEMAND.

 

10.                                 SEVERABILITY.  IN THE EVENT THAT THE
PROVISIONS OF THIS GUARANTY ARE CLAIMED OR HELD TO BE INCONSISTENT WITH ANY
OTHER INSTRUMENT EVIDENCING OR SECURING THE GUARANTEED OBLIGATIONS, THE TERMS OF
THIS GUARANTY SHALL REMAIN FULLY VALID AND EFFECTIVE.  IF ANY ONE OR MORE OF THE
PROVISIONS OF THIS GUARANTY SHOULD BE DETERMINED TO BE ILLEGAL OR UNENFORCEABLE,
ALL OTHER PROVISIONS SHALL REMAIN EFFECTIVE.

 

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11.                                 ASSIGNMENT.

 

11.1.                        ASSIGNABILITY.  GUARANTOR SHALL NOT HAVE THE RIGHT
TO ASSIGN ANY OF GUARANTOR’S RIGHTS OR OBLIGATIONS OR DELEGATE ANY OF ITS DUTIES
UNDER THIS GUARANTY WITHOUT THE PRIOR WRITTEN CONSENT OF BENEFICIARY.  ANY
PURPORTED ASSIGNMENT IN CONTRAVENTION OF THE FORGOING SENTENCE SHALL BE VOIDED. 
GUARANTOR SHALL REMAIN LIABLE UNDER THIS GUARANTY, NOTWITHSTANDING ASSUMPTION OF
THIS GUARANTY BY A SUCCESSOR OR ASSIGN, UNLESS AND UNTIL RELEASED IN WRITING
FROM ITS OBLIGATIONS HEREUNDER BY BENEFICIARY.  BENEFICIARY MAY, AT ANY TIME AND
FROM TIME TO TIME, ASSIGN, IN WHOLE OR IN PART, ITS RIGHTS HEREUNDER TO ANY
PERSON TO WHOM BENEFICIARY HAS THE RIGHT TO ASSIGN ITS RIGHTS OR OBLIGATIONS
UNDER AND PURSUANT TO THE TERMS OF THE GUARANTEED AGREEMENTS WHEREUPON SUCH
ASSIGNEE SHALL SUCCEED TO ALL RIGHTS OF BENEFICIARY HEREUNDER.

 

11.2.                        SUCCESSORS AND ASSIGNS.  SUBJECT TO SECTION 11.1
HEREOF, ALL OF THE TERMS OF THIS INSTRUMENT SHALL BE BINDING UPON AND INURE TO
THE BENEFIT OF THE PARTIES HEREOF AND THEIR RESPECTIVE PERMITTED SUCCESSORS AND
PERMITTED ASSIGNS.

 

12.                                 ADDRESS FOR ALL NOTICES.  ALL NOTICES AND
OTHER COMMUNICATIONS PROVIDED FOR HEREUNDER SHALL BE GIVEN AND EFFECTIVE IN
ACCORDANCE WITH THE NOTICE REQUIREMENTS OF THE ASSET SALE AGREEMENT.

 

13.                                 GOVERNING LAW.  THIS GUARANTY SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF ILLINOIS
(WITHOUT GIVING EFFECT TO CONFLICT OF LAW PRINCIPLES) AS TO ALL MATTERS,
INCLUDING BUT NOT LIMITED TO MATTERS OF VALIDITY, CONSTRUCTION, EFFECT,
PERFORMANCE AND REMEDIES.  GUARANTOR AGREES THAT VENUE IN ANY AND ALL ACTIONS
AND PROCEEDINGS RELATED TO THE SUBJECT MATTER OF THIS AGREEMENT SHALL BE IN THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS (EASTERN
DIVISION) OR STATE COURTS SITUATED THEREIN.  THE FOREGOING COURTS SHALL HAVE
EXCLUSIVE JURISDICTION FOR SUCH PURPOSE AND GUARANTOR IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF SUCH COURT AND IRREVOCABLY WAIVES THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING.  SERVICE
OF PROCESS MAY BE MADE IN ANY MANNER RECOGNIZED BY SUCH COURTS AND GUARANTOR
AGREES THAT SUMMONS OR OTHER LEGAL PROCESS IN CONNECTION WITH ANY SUCH ACTION OR
PROCEEDING SHALL BE DEEMED PROPERLY AND EFFECTIVELY SERVED WHEN SENT BY
CERTIFIED U.S. MAIL, RETURN RECEIPT REQUESTED, TO THE ADDRESS OF GUARANTOR AS
SET FORTH IN THE ASSET SALE AGREEMENT.  GUARANTOR IRREVOCABLY WAIVES ITS RIGHT
TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE
IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

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14.                                 ENTIRE AGREEMENT.  THIS WRITING IS THE
COMPLETE AND EXCLUSIVE STATEMENT OF THE TERMS OF THIS GUARANTY AND SUPERSEDES
ALL PRIOR ORAL OR WRITTEN REPRESENTATIONS, UNDERSTANDINGS AND AGREEMENTS BETWEEN
BENEFICIARY AND GUARANTOR WITH RESPECT TO THE SUBJECT MATTER HEREOF.  GUARANTOR
AGREES THAT THERE ARE NO CONDITIONS TO THE FULL EFFECTIVENESS OF THIS GUARANTY.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, Guarantor has duly caused this Guaranty to be executed and
delivered as of the date first written above.

 

 

 

ENERGYSOLUTIONS, INC.

 

 

 

 

 

By:

/s/ R. STEVE CREAMER

 

 

 

 

 

 

 

Name:

R. STEVE CREAMER

 

 

 

 

 

 

 

Title:

Chief Executive Officer

 

[Performance Guaranty]

 

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PERFORMANCE GUARANTY

 

This Performance Guaranty (“Guaranty”) is made and given as of the 11th day of
December 2007, by EnergySolutions, LLC, a Utah limited liability company
(“Guarantor”), in favor of Exelon Generation Company, LLC, a Pennsylvania
limited liability company (“Beneficiary”).

 

RECITALS

 

WHEREAS, ZionSolutions, LLC, a Delaware limited liability company and an
Affiliate of Guarantor (“Counterparty”), has entered into that certain Asset
Sale Agreement, dated the date hereof (the “Asset Sale Agreement”), pursuant to
which Beneficiary has agreed to sell, assign, transfer, convey and deliver to
Counterparty the Zion Assets and transfer the Assumed Liabilities to
Counterparty, and Counterparty has agreed to purchase, assume and accept from
Beneficiary the Zion Assets and to assume, agree to pay, perform and discharge
when due the Assumed Liabilities,  all in accordance with the Asset Sale
Agreement, and the parties have undertaken certain duties, responsibilities and
obligations as set forth in the Asset Sale Agreement;

 

WHEREAS, upon the Closing, Counterparty will be entering into that certain Lease
Agreement (the “Lease Agreement”) pursuant to which Beneficiary will lease the
Premises and Counterparty will pay Rent for such lease in accordance with the
Lease Agreement, and the parties will undertake certain duties, responsibilities
and obligations as set forth in the Lease Agreement;

 

WHEREAS, upon the Closing, Counterparty and Beneficiary will be entering into
that certain Put Option Agreement (the “Put Option Agreement”), pursuant to
which Beneficiary will grant the Put Option to Counterparty subject to the terms
and conditions set forth in the Put Option Agreement;

 

WHEREAS, upon the Closing, Counterparty and Beneficiary will be entering into
that certain Assignment and Assumption Agreement  (the “Assignment and
Assumption Agreement”), pursuant to which Counterparty will assume and accept
from Beneficiary the Zion Assets and will assume all Assumed Liabilities as
provided in the Asset Sale Agreement;

 

WHEREAS, Guarantor has agreed to guarantee obligations of Counterparty under the
Asset Sale Agreement, the Lease Agreement, the Put Option Agreement and the
Assignment and Assumption Agreement (together, the “Guaranteed Agreements”); and

 

WHEREAS, Guarantor has executed and delivered this Guaranty as an inducement for
Beneficiary to enter into the Asset Sale Agreement, and it is a condition to the
obligations of Beneficiary under the Asset Sale Agreement that this Guaranty
remain in full force and effect; and

 

WHEREAS, Guarantor will benefit from the transactions contemplated by the Asset
Sale Agreement.

 

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NOW, THEREFORE, Guarantor agrees as follows:

 

1.                                       DEFINITIONS.  CAPITALIZED TERMS USED
BUT NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS ASCRIBED TO SUCH TERMS
IN THE GUARANTEED AGREEMENTS.

 

2.                                       GUARANTY.  AS AN INDUCEMENT TO
BENEFICIARY, FOR AND IN CONSIDERATION OF BENEFICIARY ENTERING INTO THE ASSET
SALE AGREEMENT, GUARANTOR HEREBY ABSOLUTELY, UNCONDITIONALLY, AND IRREVOCABLY
GUARANTEES TO BENEFICIARY AND ITS SUCCESSORS, ENDORSEES AND PERMITTED ASSIGNS,
AS PRIMARY OBLIGOR AND NOT MERELY AS A SURETY, THE FULL AND PROMPT PAYMENT AND
PERFORMANCE, WHEN DUE, BY COUNTERPARTY OF ALL OF ITS PRESENT AND FUTURE
OBLIGATIONS THAT ARE REQUIRED TO BE PAID OR PERFORMED IN ACCORDANCE WITH THE
GUARANTEED AGREEMENTS  (COLLECTIVELY, THE “GUARANTEED OBLIGATIONS”).  THE
GUARANTEED OBLIGATIONS SHALL INCLUDE, WITHOUT LIMITATION, ALL REASONABLE COSTS
AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS), IF ANY,
INCURRED IN ENFORCING BENEFICIARY’S RIGHTS UNDER THIS GUARANTY, BUT ONLY TO THE
EXTENT THAT BENEFICIARY IS SUCCESSFUL IN ENFORCING ITS LEGAL RIGHTS UNDER THIS
GUARANTY.  THIS IS A GUARANTY OF PAYMENT AND PERFORMANCE AND NOT OF COLLECTION.

 

3.                                       GUARANTY ABSOLUTE.   THE LIABILITY OF
GUARANTOR UNDER THIS GUARANTY SHALL BE ABSOLUTE, UNCONDITIONAL AND IRREVOCABLE,
AND NOTHING WHATEVER EXCEPT ACTUAL FULL PAYMENT AND PERFORMANCE OF THE
GUARANTEED OBLIGATIONS (AND ALL OTHER DEBTS, OBLIGATIONS AND LIABILITIES OF
GUARANTOR UNDER THIS GUARANTY) SHALL OPERATE TO DISCHARGE GUARANTOR’S LIABILITY
HEREUNDER.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, GUARANTOR’S
LIABILITY HEREUNDER SHALL NOT BE DISCHARGED, RELEASED OR AFFECTED, IN WHOLE OR
IN PART, BY:

 

3.1.                              THE OCCURRENCE OR CONTINUANCE OF ANY EVENT OF
BANKRUPTCY, REORGANIZATION OR INSOLVENCY WITH RESPECT TO COUNTERPARTY OR
GUARANTOR, OR ANY DISALLOWANCE OF ALL OR ANY PORTION OF ANY CLAIM BY
BENEFICIARY, ITS SUCCESSORS OR ASSIGNS IN CONNECTION WITH ANY SUCH PROCEEDING OR
IN THE EVENT THAT ALL OR ANY PART OF ANY PAYMENT IS RECOVERED FROM BENEFICIARY
AS A PREFERENCE PAYMENT OR FRAUDULENT TRANSFER UNDER THE UNITED STATES
BANKRUPTCY CODE OR ANY APPLICABLE LAW, OR THE DISSOLUTION, LIQUIDATION OR
WINDING UP OF GUARANTOR OR COUNTERPARTY;

 

3.2.                              ANY AMENDMENT, SUPPLEMENT, REFORMATION, WAIVER
OR OTHER MODIFICATION OF THE GUARANTEED AGREEMENTS, UNLESS SUCH AMENDMENT,
SUPPLEMENT, REFORMATION, WAIVER OR OTHER MODIFICATION MATERIALLY INCREASES THE
LIABILITY OF GUARANTOR WITH RESPECT TO THE GUARANTEED OBLIGATIONS AND GUARANTOR
HAS NOT GIVEN ITS CONSENT THERETO IF SUCH CONSENT IS REQUIRED UNDER THE
APPLICABLE GUARANTEED AGREEMENTS;

 

3.3.                              THE EXERCISE, NON-EXERCISE OR DELAY IN
EXERCISING, BY BENEFICIARY OR ANY OTHER PERSON, OF ANY RIGHT UNDER THIS GUARANTY
OR THE GUARANTEED AGREEMENTS;

 

3.4.                              ANY EXTENSION, RENEWAL, SETTLEMENT, COMPROMISE
OR WAIVER CONCERNING THE GUARANTEED OBLIGATIONS OR ANY CHANGE IN TIME, MANNER OR
PLACE OF PAYMENT OF, OR IN

 

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ANY OTHER TERMS OF, ALL OR ANY OF THE GUARANTEED OBLIGATIONS OR ANY OTHER
AMENDMENT OR WAIVER OF, OR ANY CONSENT TO DEPART FROM, THE GUARANTEED AGREEMENTS
OR ANY OTHER AGREEMENT, DOCUMENT OR INSTRUMENT RELATING THERETO; PROVIDED,
HOWEVER, GUARANTOR’S OBLIGATIONS WITH RESPECT TO THE GUARANTEED OBLIGATIONS
SHALL BE CREDITED TO THE EXTENT THAT THAT ANY SUCH SETTLEMENT OR COMPROMISE
REDUCES THE GUARANTEED OBLIGATIONS;

 

3.5.                              ANY ASSIGNMENT OR OTHER TRANSFER OF RIGHTS
UNDER THIS GUARANTY BY BENEFICIARY, OR ANY PERMITTED ASSIGNMENT OR OTHER
TRANSFER OF THE GUARANTEED AGREEMENTS, INCLUDING ANY ASSIGNMENT AS SECURITY FOR
FINANCING PURPOSES;

 

3.6.                              ANY MERGER OR CONSOLIDATION INTO OR WITH ANY
OTHER ENTITY, OR OTHER CHANGE IN THE CORPORATE EXISTENCE OR CESSATION OF
EXISTENCE OF, COUNTERPARTY OR GUARANTOR;

 

3.7.                              ANY CHANGE IN OWNERSHIP OR CONTROL OF
GUARANTOR OR COUNTERPARTY;

 

3.8.                              ANY SALE, TRANSFER OR OTHER DISPOSITION BY
GUARANTOR OF ANY DIRECT OR INDIRECT INTEREST IT MAY HAVE IN COUNTERPARTY;

 

3.9.                              THE INACCURACY OR BREACH, OR ALLEGED
INACCURACY OR BREACH, OF ANY OF THE REPRESENTATIONS AND WARRANTIES OF
COUNTERPARTY OR BENEFICIARY UNDER THE GUARANTEED AGREEMENTS;

 

3.10.                        THE FAILURE TO CREATE, PRESERVE, VALIDATE, PERFECT
OR PROTECT ANY SECURITY INTEREST, COLLATERAL OR OTHER GUARANTY GRANTED TO, OR IN
FAVOR OF, ANY PERSON;

 

3.11.                        THE EXISTENCE OF, OR ANY SUBSTITUTION,
MODIFICATION, EXCHANGE, RELEASE, SETTLEMENT OR COMPROMISE OF, ANY SECURITY OR
COLLATERAL FOR OR GUARANTY OF ANY OF THE GUARANTEED OBLIGATIONS OR FAILURE TO
APPLY SUCH SECURITY OR COLLATERAL OR FAILURE TO ENFORCE SUCH GUARANTY;

 

3.12.                        THE EXISTENCE OF ANY CLAIM, SET-OFF, OR OTHER
RIGHTS WHICH GUARANTOR OR ANY AFFILIATE THEREOF MAY HAVE AT ANY TIME AGAINST
BENEFICIARY, ANY AFFILIATE THEREOF OR ANY OTHER PERSON;

 

3.13.                        THE GENUINENESS, VALIDITY, REGULARITY, OR
ENFORCEABILITY, IN WHOLE OR IN PART, OF THIS GUARANTY, THE GUARANTEED
AGREEMENTS, OR ANY OTHER AGREEMENT, DOCUMENT OR INSTRUMENT RELATED TO THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR THE ABSENCE OF ANY ACTION TO
ENFORCE THE SAME, OR ANY PROVISION OF LAW PURPORTING TO PROHIBIT PAYMENT OR
PERFORMANCE BY COUNTERPARTY OF THE GUARANTEED OBLIGATIONS;

 

3.14.                        THE ABSENCE OF ANY NOTICE TO, OR KNOWLEDGE BY,
GUARANTOR OF THE EXISTENCE OR OCCURRENCE OF ANY OF THE MATTERS OR EVENTS SET
FORTH IN THE FOREGOING CLAUSES; AND

 

--------------------------------------------------------------------------------

 

3.15.                      EXCEPT AS PROVIDED HEREIN, ANY OTHER CIRCUMSTANCES
WHICH MIGHT OTHERWISE CONSTITUTE A DEFENSE TO, OR DISCHARGE OF, GUARANTOR OR
COUNTERPARTY IN RESPECT OF THE GUARANTEED OBLIGATIONS OR A LEGAL OR EQUITABLE
DISCHARGE OF COUNTERPARTY IN RESPECT THEREOF, INCLUDING, A DISCHARGE AS A RESULT
OF ANY BANKRUPTCY OR SIMILAR LAW.

 

4.                                       WAIVER.  IN ADDITION TO WAIVING ANY
DEFENSES TO WHICH SECTION 3.1 THROUGH SECTION 3.15 HEREOF MAY REFER:

 

4.1.                              GUARANTOR HEREBY IRREVOCABLY, UNCONDITIONALLY
AND EXPRESSLY WAIVES, AND AGREES THAT IT SHALL NOT AT ANY TIME INSIST UPON,
PLEAD OR IN ANY MANNER WHATSOEVER CLAIM OR TAKE THE BENEFIT OR ADVANTAGE OF, ANY
APPRAISAL, VALUATION, STAY, EXTENSION, MARSHALING OF ASSETS OR REDEMPTION LAWS,
OR EXEMPTION, WHETHER NOW OR AT ANY TIME HEREAFTER IN FORCE, WHICH MAY DELAY,
PREVENT OR OTHERWISE AFFECT THE PERFORMANCE BY GUARANTOR OF ITS OBLIGATIONS
UNDER, OR THE ENFORCEMENT BY BENEFICIARY OF, THIS GUARANTY;

 

4.2.                              GUARANTOR HEREBY IRREVOCABLY, UNCONDITIONALLY
AND EXPRESSLY WAIVES ALL NOTICES, DILIGENCE, PRESENTMENT AND DEMAND OF EVERY
KIND (WHETHER FOR NONPERFORMANCE, NONPAYMENT OR PROTEST OR OF ACCEPTANCE,
MATURITY, EXTENSION OF TIME, CHANGE IN NATURE OR FORM OF THE GUARANTEED
OBLIGATIONS, ACCEPTANCE OF SECURITY, RELEASE OF SECURITY, COMPOSITION OR
AGREEMENT ARRIVED AT AS TO THE AMOUNT OF, OR THE TERMS OF, THE GUARANTEED
OBLIGATIONS, NOTICE OF ADVERSE CHANGE IN COUNTERPARTY’S FINANCIAL CONDITION, OR
ANY OTHER FACT WHICH MIGHT MATERIALLY INCREASE THE RISK TO GUARANTOR HEREUNDER)
WITH RESPECT TO THE GUARANTEED OBLIGATIONS WHICH ARE NOT SPECIFICALLY REQUIRED
TO BE GIVEN BY BENEFICIARY TO GUARANTOR IN THE GUARANTEED AGREEMENTS, AND ANY
OTHER DEMANDS WHATSOEVER WHICH ARE NOT SPECIFICALLY REQUIRED TO BE GIVEN BY
BENEFICIARY TO GUARANTOR IN THE GUARANTEED AGREEMENTS, AND WAIVES THE BENEFIT OF
ALL PROVISIONS OF LAW WHICH ARE IN CONFLICT WITH THE TERMS OF THIS GUARANTY;
PROVIDED, HOWEVER, BENEFICIARY AGREES THAT ALL DEMANDS UNDER THIS GUARANTY SHALL
BE IN WRITING AND SHALL SPECIFY IN WHAT MANNER AND WHAT AMOUNT COUNTERPARTY HAS
FAILED TO PAY OR PERFORM AND AN EXPLANATION OF WHY SUCH PAYMENT IS DUE, WITH A
SPECIFIC STATEMENT THAT BENEFICIARY IS CALLING UPON GUARANTOR TO PAY OR PERFORM
UNDER THIS GUARANTY.  ANY PAYMENT DEMAND SHALL ALSO INCLUDE THE BANK ACCOUNT AND
WIRE TRANSFER INFORMATION TO WHICH THE FUNDS SHOULD BE WIRE TRANSFERRED;

 

4.3.                              THE GUARANTOR HEREBY IRREVOCABLY,
UNCONDITIONALLY AND EXPRESSLY WAIVES PROMPTNESS, DILIGENCE, NOTICE OF ACCEPTANCE
AND ANY OTHER NOTICE WITH RESPECT TO ANY OF THE GUARANTEED OBLIGATIONS AND THE
DELIVERY, ACCEPTANCE, PERFORMANCE, DEFAULT OR ENFORCEMENT OF THIS GUARANTY AND
ANY REQUIREMENT THAT BENEFICIARY PROTECT, SECURE OR PERFECT ANY SECURITY
INTEREST OR EXHAUST ANY RIGHT OR FIRST PROCEED AGAINST COUNTERPARTY OR ANY OTHER
PERSON OR ANY OTHER SECURITY OR GUARANTY;

 

4.4.                              GUARANTOR IRREVOCABLY, UNCONDITIONALLY AND
EXPRESSLY WAIVES (I) ANY RIGHT IT MAY HAVE TO BRING A CASE OR PROCEEDING AGAINST
COUNTERPARTY BY REASON OF GUARANTOR’S PERFORMANCE UNDER THIS GUARANTY OR WITH
RESPECT TO ANY OTHER OBLIGATION OF COUNTERPARTY TO GUARANTOR, UNDER ANY STATE OR
FEDERAL BANKRUPTCY, INSOLVENCY,

 

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REORGANIZATION, MORATORIUM OR SIMILAR LAWS FOR THE RELIEF OF DEBTORS OR
OTHERWISE; (II) ANY SUBROGATION TO THE RIGHTS OF BENEFICIARY AGAINST
COUNTERPARTY AND ANY OTHER CLAIM AGAINST COUNTERPARTY WHICH ARISES AS A RESULT
OF PAYMENTS MADE BY GUARANTOR PURSUANT TO THIS GUARANTY, UNTIL THE GUARANTEED
OBLIGATIONS HAVE BEEN PAID AND PERFORMED IN FULL AND SUCH PAYMENTS ARE NOT
SUBJECT TO ANY RIGHT OF RECOVERY; (III) ANY SETOFFS OR COUNTERCLAIMS AGAINST
BENEFICIARY, COUNTERPARTY OR ANY OTHER PERSON WHICH WOULD OTHERWISE IMPAIR
BENEFICIARY’S RIGHTS AGAINST GUARANTOR HEREUNDER; AND (IV) ANY RIGHT OF
REIMBURSEMENT OR CONTRIBUTION FROM COUNTERPARTY.  IF ANY AMOUNT SHALL BE PAID TO
THE GUARANTOR ON ACCOUNT OF SUCH SUBROGATION RIGHTS AT ANY TIME PRIOR TO WHEN
THE GUARANTEED OBLIGATIONS HAVE BEEN PAID AND PERFORMED IN FULL, SUCH AMOUNT
SHALL BE HELD IN TRUST FOR THE BENEFIT OF BENEFICIARY AND SHALL FORTHWITH BE
PAID TO BENEFICIARY TO BE APPLIED TO THE GUARANTEED OBLIGATIONS; AND

 

4.5.                              NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN, GUARANTOR SHALL NOT WAIVE AND SHALL BE ENTITLED TO ASSERT
DEFENSES BASED ON OR ARISING OUT OF ANY DEFENSE OF COUNTERPARTY BASED UPON
(1) THE TERMINATION OF ANY GUARANTEED AGREEMENTS AT A TIME WHEN COUNTERPARTY IS
NOT IN BREACH OF THE RESPECTIVE AGREEMENT, OR (2) THE FAILURE OF BENEFICIARY TO
PERFORM AN OBLIGATION OF BENEFICIARY UNDER ANY GUARANTEED AGREEMENTS THAT
ADVERSELY AFFECTS COUNTERPARTY’S PERFORMANCE OF ITS OBLIGATIONS UNDER THE
RESPECTIVE AGREEMENT.

 

5.                                       REPRESENTATIONS AND WARRANTIES. 
GUARANTOR HEREBY REPRESENTS AND WARRANTS AS FOLLOWS:

 

5.1.                              GUARANTOR IS A LIMITED LIABILITY COMPANY DULY
ORGANIZED AND VALIDLY EXISTING UNDER THE LAWS OF UTAH.

 

5.2.                              GUARANTOR HAS FULL CORPORATE POWER, AUTHORITY
AND LEGAL RIGHT TO EXECUTE AND DELIVER THIS GUARANTY AND TO PERFORM ITS
OBLIGATIONS HEREUNDER.

 

5.3.                              THIS GUARANTY HAS BEEN DULY AUTHORIZED,
EXECUTED AND DELIVERED BY GUARANTOR.

 

5.4.                              THIS GUARANTY CONSTITUTES THE LEGAL, VALID AND
BINDING OBLIGATION OF GUARANTOR ENFORCEABLE AGAINST GUARANTOR IN ACCORDANCE WITH
ITS TERMS.

 

5.5.                              THE EXECUTION AND DELIVERY BY GUARANTOR OF
THIS GUARANTY AND THE PERFORMANCE BY GUARANTOR OF ITS OBLIGATIONS HEREUNDER WILL
NOT (I) CONFLICT WITH OR RESULT IN ANY BREACH OF ANY PROVISION OF GUARANTOR’S
CERTIFICATE OF INCORPORATION OR BYLAWS (OR OTHER SIMILAR GOVERNING DOCUMENTS);
(II) VIOLATE ANY LAWS APPLICABLE TO GUARANTOR; (III) RESULT IN A BREACH OF OR
CONSTITUTE A DEFAULT (OR GIVE RISE TO ANY RIGHT OF TERMINATION, CANCELLATION OR
ACCELERATION) UNDER ANY OF THE TERMS, CONDITIONS OR PROVISIONS OF ANY NOTE,
BOND, MORTGAGE, INDENTURE, LEASE, AGREEMENT OR OTHER INSTRUMENT OR OBLIGATION TO
WHICH GUARANTOR IS A PARTY OR BY WHICH IT OR ITS ASSETS OR PROPERTY ARE BOUND;
OR (IV) REQUIRE ANY CONSENT, APPROVAL, PERMIT OR AUTHORIZATION OF, OR FILING
WITH OR NOTIFICATION TO, ANY GOVERNMENTAL AUTHORITY.

 

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5.6.                              NO ACTION, SUIT OR PROCEEDING AT LAW OR IN
EQUITY OR BY OR BEFORE ANY GOVERNMENTAL AUTHORITY OR ARBITRAL TRIBUNAL IS NOW
PENDING OR, TO THE KNOWLEDGE OF GUARANTOR, THREATENED AGAINST GUARANTOR THAT
WOULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON THE LEGALITY,
VALIDITY, PERFORMANCE OR ENFORCEABILITY OF THIS GUARANTY.

 

5.7.                              GUARANTOR’S OBLIGATIONS UNDER THIS GUARANTY
ARE NOT SUBJECT TO ANY OFFSETS OR CLAIMS OF ANY KIND AGAINST COUNTERPARTY,
BENEFICIARY OR ANY OF THEIR RESPECTIVE AFFILIATES.

 

5.8.                              IT IS NOT AND SHALL NOT BE NECESSARY FOR
BENEFICIARY TO INQUIRE INTO THE POWERS OF COUNTERPARTY OR THE OFFICERS,
DIRECTORS, PARTNERS, TRUSTEES OR AGENTS ACTING OR PURPORTING TO ACT ON
COUNTERPARTY’S BEHALF PURSUANT TO THE GUARANTEED AGREEMENTS, AND ANY GUARANTEED
OBLIGATIONS MADE OR CREATED IN RELIANCE UPON THE PROFESSED EXERCISE OF SUCH
POWERS SHALL BE GUARANTEED HEREUNDER TO THE EXTENT MADE OR CREATED IN ACCORDANCE
WITH THE TERMS OF THE GUARANTEED AGREEMENTS.

 

6.                                       SECURITY.  THE GUARANTOR ACKNOWLEDGES
THAT PURSUANT TO THE CREDIT SUPPORT AGREEMENT AND THE PLEDGE AGREEMENT,
BENEFICIARY WILL BE PROVIDED CERTAIN SECURITY INTERESTS AND COLLATERAL TO SECURE
CERTAIN OF COUNTERPARTY’S OBLIGATIONS UNDER THIS GUARANTY AND THE GUARANTEED
AGREEMENTS, AND THE GUARANTOR HEREBY ACKNOWLEDGES AND AGREES THAT THIS GUARANTY
IS IN ADDITION TO, AND NOT IN SUBSTITUTION FOR, SUCH SECURITY INTERESTS AND
COLLATERAL.

 

7.                                       ACTIONS OF BENEFICIARY.  THE
BENEFICIARY MAY, AT ANY TIME AND FROM TIME TO TIME, WITHOUT NOTICE TO OR CONSENT
OF THE GUARANTOR, WITHOUT INCURRING RESPONSIBILITY TO THE GUARANTOR AND WITHOUT
IMPAIRING OR RELEASING THE OBLIGATIONS OF THE GUARANTOR HEREUNDER, UPON OR
WITHOUT ANY TERMS OR CONDITIONS: (A) TAKE OR REFRAIN FROM TAKING ANY AND ALL
ACTIONS WITH RESPECT TO THE GUARANTEED OBLIGATIONS OR THE GUARANTEED AGREEMENTS
OR ANY PERSON THAT THE BENEFICIARY DETERMINES IN ITS SOLE DISCRETION TO BE
NECESSARY OR APPROPRIATE; (B) TAKE OR REFRAIN FROM TAKING ANY ACTION OF ANY KIND
IN RESPECT OF ANY SECURITY FOR ANY GUARANTEED OBLIGATION(S) OR LIABILITY OF THE
COUNTERPARTY TO THE BENEFICIARY; OR (C) COMPROMISE OR SUBORDINATE ANY GUARANTEED
OBLIGATION(S) OR LIABILITY OF THE COUNTERPARTY TO THE BENEFICIARY INCLUDING ANY
SECURITY THEREFOR.

 

8.                                       CONTINUING GUARANTEE.  THIS GUARANTY IS
A CONTINUING GUARANTY AND SHALL REMAIN IN FULL FORCE AND EFFECT UNTIL ALL
GUARANTEED OBLIGATIONS HAVING BEEN FULLY AND IRREVOCABLY PERFORMED AND SATISFIED
IN FULL.  THIS GUARANTY SHALL CONTINUE TO BE EFFECTIVE, OR BE REINSTATED, AS THE
CASE MAY BE, IF AT ANY TIME PAYMENT, OR ANY PART THEREOF, OF ANY OF THE
GUARANTEED OBLIGATIONS BY GUARANTOR IS RESCINDED AND RETURNED BY BENEFICIARY TO
GUARANTOR UPON THE INSOLVENCY, BANKRUPTCY, DISSOLUTION, LIQUIDATION OR
REORGANIZATION OF COUNTERPARTY OR GUARANTOR, OR UPON OR AS A RESULT OF THE
APPOINTMENT OF A RECEIVER, INTERVENOR OR CONSERVATOR OF, OR TRUSTEE OR SIMILAR
OFFICER FOR, COUNTERPARTY, GUARANTOR OR ANY SUBSTANTIAL PART OF THEIR RESPECTIVE
PROPERTIES, OR OTHERWISE, ALL AS THOUGH SUCH PAYMENTS HAD NOT BEEN MADE. 
GUARANTOR AGREES, UPON THE WRITTEN REQUEST OF BENEFICIARY, TO EXECUTE AND
DELIVER TO BENEFICIARY ANY ADDITIONAL INSTRUMENTS OR DOCUMENTS NECESSARY

 

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OR ADVISABLE FROM TIME TO TIME, IN THE REASONABLE AND GOOD FAITH OPINION OF
BENEFICIARY, TO CAUSE THIS GUARANTY TO BE, BECOME OR REMAIN VALID AND EFFECTIVE
IN ACCORDANCE WITH ITS TERMS.

 

9.                                       AMENDMENTS; WAIVERS.  NEITHER THIS
INSTRUMENT NOR ANY TERMS HEREOF MAY BE CHANGED, WAIVED, DISCHARGED OR TERMINATED
ORALLY, BUT ONLY BY AN INSTRUMENT IN WRITING SIGNED BY BENEFICIARY AND
GUARANTOR.  NO DELAY OR FAILURE BY BENEFICIARY TO EXERCISE ANY REMEDY AGAINST
COUNTERPARTY OR GUARANTOR SHALL BE CONSTRUED AS A WAIVER OF THAT RIGHT OR
REMEDY.  NO FAILURE ON THE PART OF BENEFICIARY TO EXERCISE, AND NO DELAY IN
EXERCISING, ANY RIGHT HEREUNDER SHALL OPERATE AS A WAIVER THEREOF, NOR SHALL ANY
SINGLE OR PARTIAL EXERCISE OF ANY RIGHT HEREUNDER PRECLUDE ANY OTHER OR FURTHER
EXERCISE THEREOF OR THE EXERCISE OF ANY OTHER RIGHT.  THE REMEDIES HEREIN
PROVIDED ARE CUMULATIVE AND NOT EXCLUSIVE OF ANY REMEDIES PROVIDED BY ANY
APPLICABLE LAW.   NO COURSE OF DEALING BETWEEN THE GUARANTOR AND THE BENEFICIARY
SHALL OPERATE AS A WAIVER THEREOF.  NO NOTICE TO OR DEMAND ON THE GUARANTOR IN
ANY CASE SHALL ENTITLE THE GUARANTOR TO ANY OTHER OR FURTHER NOTICE OR DEMAND IN
SIMILAR OR OTHER CIRCUMSTANCES OR CONSTITUTE A WAIVER OF THE RIGHTS OF THE
BENEFICIARY TO ANY OTHER OR FURTHER ACTION IN ANY CIRCUMSTANCES WITHOUT NOTICE
OR DEMAND.

 

10.                                 SEVERABILITY.  IN THE EVENT THAT THE
PROVISIONS OF THIS GUARANTY ARE CLAIMED OR HELD TO BE INCONSISTENT WITH ANY
OTHER INSTRUMENT EVIDENCING OR SECURING THE GUARANTEED OBLIGATIONS, THE TERMS OF
THIS GUARANTY SHALL REMAIN FULLY VALID AND EFFECTIVE.  IF ANY ONE OR MORE OF THE
PROVISIONS OF THIS GUARANTY SHOULD BE DETERMINED TO BE ILLEGAL OR UNENFORCEABLE,
ALL OTHER PROVISIONS SHALL REMAIN EFFECTIVE.

 

11.                                 ASSIGNMENT.

 

11.1.                        ASSIGNABILITY.  GUARANTOR SHALL NOT HAVE THE RIGHT
TO ASSIGN ANY OF GUARANTOR’S RIGHTS OR OBLIGATIONS OR DELEGATE ANY OF ITS DUTIES
UNDER THIS GUARANTY WITHOUT THE PRIOR WRITTEN CONSENT OF BENEFICIARY.  ANY
PURPORTED ASSIGNMENT IN CONTRAVENTION OF THE FORGOING SENTENCE SHALL BE VOIDED. 
GUARANTOR SHALL REMAIN LIABLE UNDER THIS GUARANTY, NOTWITHSTANDING ASSUMPTION OF
THIS GUARANTY BY A SUCCESSOR OR ASSIGN, UNLESS AND UNTIL RELEASED IN WRITING
FROM ITS OBLIGATIONS HEREUNDER BY BENEFICIARY.  BENEFICIARY MAY, AT ANY TIME AND
FROM TIME TO TIME, ASSIGN, IN WHOLE OR IN PART, ITS RIGHTS HEREUNDER TO ANY
PERSON TO WHOM BENEFICIARY HAS THE RIGHT TO ASSIGN ITS RIGHTS OR OBLIGATIONS
UNDER AND PURSUANT TO THE TERMS OF THE GUARANTEED AGREEMENTS WHEREUPON SUCH
ASSIGNEE SHALL SUCCEED TO ALL RIGHTS OF BENEFICIARY HEREUNDER.

 

11.2.                        SUCCESSORS AND ASSIGNS.  SUBJECT TO SECTION 11.1
HEREOF, ALL OF THE TERMS OF THIS INSTRUMENT SHALL BE BINDING UPON AND INURE TO
THE BENEFIT OF THE PARTIES HEREOF AND THEIR RESPECTIVE PERMITTED SUCCESSORS AND
PERMITTED ASSIGNS.

 

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12.                                 ADDRESS FOR ALL NOTICES.  ALL NOTICES AND
OTHER COMMUNICATIONS PROVIDED FOR HEREUNDER SHALL BE GIVEN AND EFFECTIVE IN
ACCORDANCE WITH THE NOTICE REQUIREMENTS OF THE ASSET SALE AGREEMENT.

 

13.                                 GOVERNING LAW.  THIS GUARANTY SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF ILLINOIS
(WITHOUT GIVING EFFECT TO CONFLICT OF LAW PRINCIPLES) AS TO ALL MATTERS,
INCLUDING BUT NOT LIMITED TO MATTERS OF VALIDITY, CONSTRUCTION, EFFECT,
PERFORMANCE AND REMEDIES.  GUARANTOR AGREES THAT VENUE IN ANY AND ALL ACTIONS
AND PROCEEDINGS RELATED TO THE SUBJECT MATTER OF THIS AGREEMENT SHALL BE IN THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS (EASTERN
DIVISION) OR STATE COURTS SITUATED THEREIN.  THE FOREGOING COURTS SHALL HAVE
EXCLUSIVE JURISDICTION FOR SUCH PURPOSE AND GUARANTOR IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF SUCH COURT AND IRREVOCABLY WAIVES THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING.  SERVICE
OF PROCESS MAY BE MADE IN ANY MANNER RECOGNIZED BY SUCH COURTS AND GUARANTOR
AGREES THAT SUMMONS OR OTHER LEGAL PROCESS IN CONNECTION WITH ANY SUCH ACTION OR
PROCEEDING SHALL BE DEEMED PROPERLY AND EFFECTIVELY SERVED WHEN SENT BY
CERTIFIED U.S. MAIL, RETURN RECEIPT REQUESTED, TO THE ADDRESS OF GUARANTOR AS
SET FORTH IN THE ASSET SALE AGREEMENT.  GUARANTOR IRREVOCABLY WAIVES ITS RIGHT
TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE
IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

14.                                 ENTIRE AGREEMENT.  THIS WRITING IS THE
COMPLETE AND EXCLUSIVE STATEMENT OF THE TERMS OF THIS GUARANTY AND SUPERSEDES
ALL PRIOR ORAL OR WRITTEN REPRESENTATIONS, UNDERSTANDINGS AND AGREEMENTS BETWEEN
BENEFICIARY AND GUARANTOR WITH RESPECT TO THE SUBJECT MATTER HEREOF.  GUARANTOR
AGREES THAT THERE ARE NO CONDITIONS TO THE FULL EFFECTIVENESS OF THIS GUARANTY.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, Guarantor has duly caused this Guaranty to be executed and
delivered as of the date first written above.

 

 

ENERGYSOLUTIONS, LLC

 

 

 

 

 

By:

/s/ R. STEVE CREAMER

 

 

 

 

 

 

 

Name:

R. STEVE CREAMER

 

 

 

 

 

 

 

Title:

Chief Executive Officer

 

[Performance Guaranty]

 

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LIMITED LIABILITY COMPANY AGREEMENT

OF

ZIONSOLUTIONS, LLC

 

This Limited Liability Company Agreement (together with the schedules attached
hereto, this “Agreement”) of ZIONSOLUTIONS, LLC (the “Company”), is entered into
by ENERGYSOLUTIONS, LLC, a Utah limited liability company, as the sole Class A
Member, and EXELON GENERATION COMPANY, LLC, a Pennsylvania limited liability
company, as the sole Class B Member.  Capitalized terms used and not otherwise
defined herein have the meanings set forth on Schedule A hereto.

 

WHEREAS, the Members, by execution of this Agreement, hereby form the Company as
a limited liability company pursuant to, and in accordance with, this Agreement
and the Delaware Limited Liability Company Act (6 Del. C. Section 18-101 et
seq.), as amended from time to time (the “Act”).

 

NOW, THEREFORE, the Members, intending to be legally bound, hereby agree as
follows:

 

SECTION 1.               NAME.

 

The name of the limited liability company is ZionSolutions, LLC.

 

SECTION 2.               PRINCIPAL BUSINESS OFFICE.

 

The principal business office of the Company shall be located at 423 West 300
South, Suite 200, Salt Lake City, UT  84101, or such other location as may
hereafter be determined by the Class A Member.

 

SECTION 3.               REGISTERED OFFICE.

 

The address of the registered office of the Company in the State of Delaware is
160 Greentree Dr., Suite 101, Dover, DE  19904.

 

SECTION 4.               REGISTERED AGENT.

 

The name and address of the registered agent of the Company for service of
process on the Company in the State of Delaware is National Registered
Agents, Inc.

 

SECTION 5.               MEMBERS.

 

(A)           CLASS A MEMBER.  THE MAILING ADDRESS OF THE CLASS A MEMBER IS SET
FORTH ON SCHEDULE B ATTACHED HERETO.  THE CLASS A MEMBER WAS ADMITTED TO THE
COMPANY AS A MEMBER OF THE COMPANY UPON ITS EXECUTION OF A COUNTERPART SIGNATURE
PAGE TO THIS AGREEMENT.

 

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(B)           CLASS B MEMBER.  THE MAILING ADDRESS OF THE CLASS B MEMBER IS SET
FORTH ON SCHEDULE B ATTACHED HERETO.  THE CLASS B MEMBER WAS ADMITTED TO THE
COMPANY AS A MEMBER OF THE COMPANY UPON ITS EXECUTION OF A COUNTERPART SIGNATURE
PAGE TO THIS AGREEMENT.  THE CLASS B MEMBER SHALL BE A MEMBER OF THE COMPANY
THAT HAS NO INTEREST IN THE PROFITS, LOSSES AND CAPITAL OF THE COMPANY AND HAS
NO RIGHT TO RECEIVE ANY DISTRIBUTIONS OF COMPANY ASSETS.  PURSUANT TO
SECTION 18-301 OF THE ACT, THE CLASS B MEMBER SHALL NOT BE REQUIRED TO MAKE ANY
CAPITAL CONTRIBUTIONS TO THE COMPANY AND SHALL NOT RECEIVE A LIMITED LIABILITY
COMPANY INTEREST IN THE COMPANY.  THE CLASS B MEMBER, IN ITS CAPACITY AS CLASS B
MEMBER, MAY NOT BIND THE COMPANY.  THE CLASS B MEMBER SHALL HAVE NO RIGHT TO
VOTE ON, APPROVE OR OTHERWISE CONSENT TO ANY ACTION BY, OR MATTER RELATING TO,
THE COMPANY, INCLUDING, WITHOUT LIMITATION, THE MERGER, CONSOLIDATION OR
CONVERSION OF THE COMPANY, EXCEPT FOR THE ELECTION, APPOINTMENT OR REMOVAL OF
THE EXELON DIRECTOR PURSUANT TO SECTION 10.  UPON THE PUT OPTION CLOSING, THE
CLASS B MEMBER SHALL AUTOMATICALLY BE DIVESTED OF ALL OF ITS RIGHTS UNDER THIS
AGREEMENT AND AS A CLASS B MEMBER.

 

(C)           VOTING OF MEMBERSHIP INTERESTS.  A MEMBER ENTITLED TO VOTE OR
OTHERWISE ACT UNDER THIS AGREEMENT OR THE ACT MAY TAKE SUCH ACTION BY WRITTEN
CONSENT.  A MEMBER ENTITLED TO VOTE OR ACT BY WRITTEN CONSENT UNDER THIS
AGREEMENT OR THE ACT MAY AUTHORIZE ANOTHER PERSON TO ACT FOR THE MEMBER BY PROXY
OR POWER OF ATTORNEY. ANY CORPORATION OR LIMITED LIABILITY COMPANY THAT IS A
MEMBER MAY VOTE AT MEETINGS OF MEMBERS OR TAKE ACTION BY WRITTEN CONSENT BY ANY
OF ITS OFFICERS OR AGENTS, OR BY PROXY APPOINTED BY ANY OFFICER OR AGENT, OR BY
POWER OF ATTORNEY GIVEN BY ANY OFFICER OR AGENT.  A MEMBER WHOSE INTEREST UNDER
THIS AGREEMENT IS PLEDGED SHALL BE ENTITLED TO VOTE THE MEMBERSHIP INTEREST OR
TAKE ACTION BY WRITTEN CONSENT UNTIL THE MEMBERSHIP INTEREST HAS BEEN
TRANSFERRED INTO THE NAME OF THE PLEDGEE, OR A NOMINEE OF THE PLEDGEE, BUT
NOTHING IN THIS SECTION SHALL IMPAIR THE VALIDITY OF A PROXY OR POWER OF
ATTORNEY GIVEN TO A PLEDGEE OR NOMINEE THAT MAY ENTITLE THE PLEDGEE OR NOMINEE
TO VOTE OR TAKE ACTION BY WRITTEN CONSENT WITH RESPECT TO SUCH PLEDGED
MEMBERSHIP INTEREST PRIOR TO THE TRANSFER OF SUCH MEMBERSHIP INTEREST INTO THE
NAME OF THE PLEDGE OR NOMINEE.

 

SECTION 6.               CERTIFICATES; LIMITED LIABILITY COMPANY INTEREST.

 

(A)           JEANNA M. BAKER IS HEREBY DESIGNATED AS AN “AUTHORIZED PERSON”
WITHIN THE MEANING OF THE ACT, AND HAS EXECUTED, DELIVERED AND FILED THE
CERTIFICATE OF FORMATION WITH THE SECRETARY OF STATE OF THE STATE OF DELAWARE. 
UPON THE FILING OF THE CERTIFICATE OF FORMATION WITH THE SECRETARY OF STATE OF
THE STATE OF DELAWARE, SUCH PERSON’S POWERS AS AN “AUTHORIZED PERSON” CEASED,
AND THEREAFTER ANY PERSON DESIGNATED BY THE BOARD OF DIRECTORS MAY ACT AS AN
“AUTHORIZED PERSON” WITHIN THE MEANING OF THE ACT.  THE CLASS A MEMBER, ANY
DIRECTOR OR AN OFFICER SHALL EXECUTE, DELIVER AND FILE ANY OTHER CERTIFICATES
(AND ANY AMENDMENTS AND/OR RESTATEMENTS THEREOF) NECESSARY FOR THE COMPANY TO
QUALIFY TO DO BUSINESS IN THE STATE OF ILLINOIS AND IN ANY OTHER JURISDICTION IN
WHICH THE COMPANY IS PERMITTED TO CONDUCT BUSINESS PURSUANT TO THIS AGREEMENT.

 

(B)           THE EXISTENCE OF THE COMPANY AS A SEPARATE LEGAL ENTITY SHALL
CONTINUE UNTIL CANCELLATION OF THE CERTIFICATE OF FORMATION AS PROVIDED IN THE
ACT.

 

(C)           THE CLASS A MEMBER’S LIMITED LIABILITY COMPANY INTEREST IS A
GENERAL INTANGIBLE FOR PURPOSES OF ARTICLE 9 OF THE UNIFORM COMMERCIAL CODE, AS
IN EFFECT IN ANY APPLICABLE JURISDICTION, AND NO MEMBER, DIRECTOR OR OFFICER
SHALL MAKE ANY ELECTION, OR TAKE ANY OTHER

 

2

--------------------------------------------------------------------------------

 

ACTION, TO CAUSE SUCH LIMITED LIABILITY COMPANY INTEREST TO BE TREATED AS A
SECURITY FOR PURPOSES OF THE UNIFORM COMMERCIAL CODE, AS IN EFFECT IN ANY
APPLICABLE JURISDICTION.

 

(D)           THE PARTIES INTEND FOR THE COMPANY TO BE TREATED, FOR FEDERAL
INCOME TAX PURPOSES, AS AN ENTITY THAT IS WHOLLY-OWNED BY THE CLASS A MEMBER AND
DISREGARDED AS AN ENTITY SEPARATE FROM THE CLASS A MEMBER UNDER SECTION 7701 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND SECTION 301.7701-3(B)(II) OF
THE TREASURY REGULATIONS PROMULGATED THEREUNDER.  NONE OF THE COMPANY, THE
CLASS A MEMBER OR THE CLASS B MEMBER SHALL TAKE A POSITION CONTRARY TO OR
INCONSISTENT WITH THE PRECEDING SENTENCE IN ANY TAX RETURN OR OTHER TAX FILING,
UNLESS REQUIRED TO DO SO BY LAW.

 

SECTION 7.               PURPOSES.

 

(A)           THE SOLE PURPOSES OF THE COMPANY ARE (I) TO ACQUIRE THE ZION
ASSETS AND ACHIEVE THE END STATE CONDITIONS, (II) TO ENTER INTO AND PERFORM ITS
OBLIGATIONS UNDER THE TRANSACTION DOCUMENTS, AND (III) TO TRANSACT LAWFUL
BUSINESS THAT IS INCIDENT, NECESSARY AND APPROPRIATE TO ACCOMPLISH THE
FOREGOING.

 

(B)           SUBJECT TO SECTION 9(J), THE COMPANY OR ANY DIRECTOR (OTHER THAN
THE EXELON DIRECTOR) OR OFFICER ON BEHALF OF THE COMPANY, MAY ENTER INTO AND
PERFORM THE BASIC DOCUMENTS AND ALL DOCUMENTS, AGREEMENTS OR CERTIFICATES
CONTEMPLATED THEREBY OR RELATED THERETO, ALL WITHOUT ANY FURTHER ACT, VOTE OR
APPROVAL OF ANY CLASS A MEMBER, DIRECTOR, OFFICER OR OTHER PERSON
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, THE ACT OR APPLICABLE
LAW, RULE OR REGULATION.  THE FOREGOING AUTHORIZATION SHALL NOT BE DEEMED A
RESTRICTION ON THE POWERS OF ANY DIRECTOR OR OFFICER TO ENTER INTO OTHER
AGREEMENTS ON BEHALF OF THE COMPANY WHEN AUTHORIZED TO DO SO IN ACCORDANCE WITH
THIS AGREEMENT.

 

SECTION 8.               POWERS.

 

Subject to Section 9(j), the Company, and the Board of Directors and the
authorized Officers of the Company on behalf of the Company, (i) shall have and
exercise all powers necessary, convenient or incidental to accomplish the
purposes of the Company as set forth in Section 7, and (ii) shall have and
exercise all of the powers and rights conferred upon limited liability companies
formed pursuant to the Act.

 

SECTION 9.               MANAGEMENT.

 

(A)           BOARD OF DIRECTORS.  SUBJECT TO SECTION 9(J), THE BUSINESS AND
AFFAIRS OF THE COMPANY SHALL BE MANAGED BY OR UNDER THE DIRECTION OF THE BOARD
OF DIRECTORS.  SUBJECT TO SECTION 10, THE CLASS A MEMBER MAY DETERMINE AT ANY
TIME IN ITS SOLE AND ABSOLUTE DISCRETION THE NUMBER OF DIRECTORS TO CONSTITUTE
THE BOARD.  THE AUTHORIZED NUMBER OF DIRECTORS MAY BE INCREASED OR DECREASED BY
THE CLASS A MEMBER AT ANY TIME IN ITS SOLE AND ABSOLUTE DISCRETION, UPON NOTICE
TO ALL DIRECTORS, AND SUBJECT IN ALL CASES TO SECTION 10.  THE INITIAL NUMBER OF
DIRECTORS SHALL BE FOUR (4), ONE (1) OF WHICH SHALL BE THE EXELON DIRECTOR
APPOINTED BY THE CLASS B MEMBER PURSUANT TO SECTION 10 AND THE REMAINDER OF
WHICH SHALL BE APPOINTED BY THE CLASS A MEMBER.  EACH DIRECTOR ELECTED,
DESIGNATED OR APPOINTED BY THE CLASS A MEMBER OR THE CLASS B MEMBER SHALL HOLD
OFFICE UNTIL A SUCCESSOR IS ELECTED AND QUALIFIED OR UNTIL SUCH DIRECTOR’S
EARLIER DEATH, RESIGNATION, EXPULSION OR REMOVAL.  EACH DIRECTOR SHALL EXECUTE
AND DELIVER A COPY OF THE

 

3

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MANAGEMENT AGREEMENT.  A DIRECTOR NEED NOT BE A CLASS A MEMBER.  THE INITIAL
DIRECTORS DESIGNATED BY THE CLASS A MEMBER ARE LISTED ON SCHEDULE D HERETO.

 

(B)           AUTHORITY TO BIND.  SUBJECT TO SECTION 7 AND SECTION 9(J), THE
BOARD OF DIRECTORS HAS THE AUTHORITY TO BIND THE COMPANY.

 

(C)           MEETINGS OF THE BOARD OF DIRECTORS.  THE BOARD OF DIRECTORS OF THE
COMPANY MAY HOLD MEETINGS, BOTH REGULAR AND SPECIAL, WITHIN OR OUTSIDE THE STATE
OF DELAWARE.  REGULAR MEETINGS OF THE BOARD MAY BE HELD WITHOUT NOTICE AT SUCH
TIME AND AT SUCH PLACE AS SHALL FROM TIME TO TIME BE DETERMINED BY THE BOARD. 
SPECIAL MEETINGS OF THE BOARD MAY BE CALLED BY ANY DIRECTOR (OTHER THAN THE
EXELON DIRECTOR UNLESS A CONDITION OF DEFAULT SHALL EXIST) ON NOT LESS THAN ONE
DAY’S NOTICE TO EACH DIRECTOR BY TELEPHONE, FACSIMILE, MAIL, EMAIL OR ANY OTHER
MEANS OF COMMUNICATION.

 

(D)           QUORUM:  ACTS OF THE BOARD.  AT ALL MEETINGS OF THE BOARD, A
MAJORITY OF THE DIRECTORS (OTHER THAN THE EXELON DIRECTOR, UNLESS THE VOTE OR
CONSENT OF THE EXELON DIRECTOR IS REQUIRED TO TAKE ACTION PURSUANT TO
SECTION 9(J) OR OTHER PROVISIONS OF THIS AGREEMENT) SHALL CONSTITUTE A QUORUM
FOR THE TRANSACTION OF BUSINESS AND, EXCEPT AS OTHERWISE PROVIDED IN ANY OTHER
PROVISION OF THIS AGREEMENT, THE ACT OF A MAJORITY OF THE DIRECTORS PRESENT AT
ANY MEETING AT WHICH THERE IS A QUORUM SHALL BE THE ACT OF THE BOARD.  IF A
QUORUM SHALL NOT BE PRESENT AT ANY MEETING OF THE BOARD, THE DIRECTORS PRESENT
AT SUCH MEETING MAY ADJOURN THE MEETING FROM TIME TO TIME, WITHOUT NOTICE OTHER
THAN ANNOUNCEMENT AT THE MEETING, UNTIL A QUORUM SHALL BE PRESENT.  ANY ACTION
REQUIRED OR PERMITTED TO BE TAKEN AT ANY MEETING OF THE BOARD OR OF ANY
COMMITTEE THEREOF MAY BE TAKEN WITHOUT A MEETING IF ALL MEMBERS OF THE BOARD
(OTHER THAN THE EXELON DIRECTOR, UNLESS THE VOTE OR CONSENT OF THE EXELON
DIRECTOR IS REQUIRED TO TAKE ACTION PURSUANT TO SECTION 9(J) OR OTHER PROVISIONS
OF THIS AGREEMENT) OR COMMITTEE, AS THE CASE MAY BE, CONSENT THERETO IN WRITING,
AND THE WRITING OR WRITINGS ARE FILED WITH THE MINUTES OF PROCEEDINGS OF THE
BOARD OR COMMITTEE, AS THE CASE MAY BE.  NOTWITHSTANDING THE FOREGOING, IF A
CONDITION OF DEFAULT EXISTS, THE PRESENCE OF THE EXELON DIRECTOR SHALL BE
REQUIRED TO CONSTITUTE A QUORUM FOR THE TRANSACTION OF BUSINESS AND THE ACT OF
ALL DIRECTORS PRESENT AT WHICH THERE IS SUCH A QUORUM SHALL BE THE ACT OF THE
BOARD.

 

(E)           ELECTRONIC COMMUNICATIONS.  MEMBERS OF THE BOARD, OR ANY COMMITTEE
DESIGNATED BY THE BOARD, MAY PARTICIPATE IN MEETINGS OF THE BOARD, OR ANY
COMMITTEE, BY MEANS OF TELEPHONE CONFERENCE OR SIMILAR COMMUNICATIONS EQUIPMENT
THAT ALLOWS ALL PERSONS PARTICIPATING IN THE MEETING TO HEAR EACH OTHER, AND
SUCH PARTICIPATION IN A MEETING SHALL CONSTITUTE PRESENCE IN PERSON AT THE
MEETING.  IF ALL THE PARTICIPANTS ARE PARTICIPATING BY TELEPHONE CONFERENCE OR
SIMILAR COMMUNICATIONS EQUIPMENT, THE MEETING SHALL BE DEEMED TO BE HELD AT THE
PRINCIPAL PLACE OF BUSINESS OF THE COMPANY.

 

(F)            COMMITTEES OF DIRECTORS.

 

(I)                                     THE BOARD MAY, BY RESOLUTION PASSED BY A
MAJORITY OF THE WHOLE BOARD, DESIGNATE ONE OR MORE COMMITTEES, EACH COMMITTEE TO
CONSIST OF ONE OR MORE OF THE DIRECTORS.  THE BOARD MAY DESIGNATE ONE OR MORE
DIRECTORS AS ALTERNATE MEMBERS OF ANY COMMITTEE, WHO MAY REPLACE ANY ABSENT OR
DISQUALIFIED MEMBER AT ANY MEETING OF THE COMMITTEE.

 

4

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(II)                                  IN THE EVENT OF THE ABSENCE OR
DISQUALIFICATION OF A MEMBER OF A COMMITTEE, THE MEMBER OR MEMBERS THEREOF
PRESENT AT ANY MEETING AND NOT DISQUALIFIED FROM VOTING, WHETHER OR NOT SUCH
MEMBERS CONSTITUTE A QUORUM, MAY UNANIMOUSLY APPOINT ANOTHER DIRECTOR TO ACT AT
THE MEETING IN THE PLACE OF ANY SUCH ABSENT OR DISQUALIFIED DIRECTOR.

 

(III)                               ANY SUCH COMMITTEE, TO THE EXTENT PROVIDED
IN THE RESOLUTION OF THE BOARD, AND SUBJECT TO, IN ALL CASES, SECTION 9(J) AND
SECTION 10, SHALL HAVE AND MAY EXERCISE ALL THE POWERS AND AUTHORITY OF THE
BOARD IN THE MANAGEMENT OF THE BUSINESS AND AFFAIRS OF THE COMPANY. 
NOTWITHSTANDING THE FOREGOING, NO SUCH COMMITTEE SHALL HAVE THE POWER OR
AUTHORITY TO ACT IF A CONDITION OF DEFAULT SHALL EXIST UNLESS SO AUTHORIZED TO
ACT BY ACTION OF THE BOARD IN ACCORDANCE WITH SECTION 9(D) FOLLOWING THE
OCCURRENCE OF SUCH CONDITION OF DEFAULT.  SUCH COMMITTEE OR COMMITTEES SHALL
HAVE SUCH NAME OR NAMES AS MAY BE DETERMINED FROM TIME TO TIME BY RESOLUTION
ADOPTED BY THE BOARD.  EACH COMMITTEE SHALL KEEP REGULAR MINUTES OF ITS MEETINGS
AND REPORT THE SAME TO THE BOARD WHEN REQUIRED.

 

(G)           COMPENSATION OF DIRECTORS; EXPENSES.  THE BOARD SHALL HAVE THE
AUTHORITY TO FIX THE COMPENSATION OF DIRECTORS WHO ARE EMPLOYED BY NEITHER THE
COMPANY NOR ANY MEMBER OR AFFILIATE OF A MEMBER.  DIRECTORS WHO ARE EMPLOYED BY
THE COMPANY OR A MEMBER OR AN AFFILIATE OF A MEMBER SHALL SERVE AS DIRECTORS
WITHOUT COMPENSATION.  THE DIRECTORS MAY BE PAID THEIR INCREMENTAL OUT-OF-POCKET
EXPENSES, IF ANY, OF ATTENDANCE AT MEETINGS OF THE BOARD.  NO SUCH PAYMENT SHALL
PRECLUDE ANY DIRECTOR FROM SERVING THE COMPANY IN ANY OTHER CAPACITY AND
RECEIVING COMPENSATION THEREFOR.  MEMBERS OF SPECIAL OR STANDING COMMITTEES MAY
BE ALLOWED LIKE COMPENSATION FOR ATTENDING COMMITTEE MEETINGS.

 

(H)           REMOVAL OF DIRECTORS.  UNLESS OTHERWISE RESTRICTED BY LAW, ANY
DIRECTOR OR ALL DIRECTORS DESIGNATED, ELECTED OR APPOINTED BY THE CLASS A MEMBER
MAY BE REMOVED OR EXPELLED, WITH OR WITHOUT CAUSE, AT ANY TIME BY VOTE OR
CONSENT OF THE CLASS A MEMBER OR BY ACTION OF THE HOLDER OF A PROXY OR POWER OF
ATTORNEY GIVEN BY THE CLASS A MEMBER, AND THE DIRECTOR DESIGNATED, ELECTED OR
APPOINTED BY THE CLASS B MEMBER MAY BE REMOVED OR EXPELLED, WITH OR WITHOUT
CAUSE, AT ANY TIME BY THE CLASS B MEMBER.  SUBJECT TO SECTION 10, ANY VACANCY
CAUSED BY ANY SUCH REMOVAL OR EXPULSION BY THE CLASS A MEMBER MAY BE FILLED BY
ACTION OF THE CLASS A MEMBER OR BY ACTION OF THE HOLDER OF A PROXY OR POWER OF
ATTORNEY GIVEN BY THE CLASS A MEMBER, AND ANY VACANCY CAUSED BY ANY SUCH REMOVAL
OR EXPULSION BY THE CLASS B MEMBER MAY BE FILLED BY ACTION OF THE CLASS B
MEMBER.

 

(I)            DIRECTORS AS AGENTS.  TO THE EXTENT OF THEIR POWERS SET FORTH IN
THIS AGREEMENT AND SUBJECT TO SECTION 9(J), THE DIRECTORS ARE AGENTS OF THE
COMPANY FOR THE PURPOSE OF THE COMPANY’S BUSINESS.  NOTWITHSTANDING THE LAST
SENTENCE OF SECTION 18-402 OF THE ACT, EXCEPT AS PROVIDED IN THIS AGREEMENT OR
IN A RESOLUTION OF THE DIRECTORS, A DIRECTOR MAY NOT BIND THE COMPANY.

 

5

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(J)            LIMITATIONS ON THE COMPANY’S ACTIVITIES.

 

(I)                                 THIS SECTION 9(J) IS BEING ADOPTED IN ORDER
TO COMPLY WITH CERTAIN PROVISIONS REQUIRED IN ORDER TO QUALIFY THE COMPANY AS A
“SPECIAL PURPOSE” ENTITY.

 

(II)                                  THE CLASS A MEMBER SHALL NOT, SO LONG AS
ANY OBLIGATION IS OUTSTANDING, AMEND, ALTER, CHANGE OR REPEAL THE DEFINITION OF
“EXELON DIRECTOR” OR SECTIONS 5(B), 5(C), 7, 8, 9, 10, 16, 19, 20, 21, 22, 23,
24, 25, 26, 29 OR 31 OR SCHEDULE A OF THIS AGREEMENT (COLLECTIVELY, THE “SPECIAL
PURPOSE PROVISIONS”) WITHOUT THE UNANIMOUS WRITTEN CONSENT OF THE BOARD
(INCLUDING THE EXELON DIRECTOR), PROVIDED, HOWEVER, THAT THE BOARD MAY NOT VOTE
ON, OR AUTHORIZE THE TAKING OF, ANY SUCH ACTION, UNLESS THERE IS AN EXELON
DIRECTOR THEN SERVING IN SUCH CAPACITY.  SUBJECT TO THIS SECTION 9(J), THE
CLASS A MEMBER RESERVES THE RIGHT TO AMEND, ALTER, CHANGE OR REPEAL ANY
PROVISIONS CONTAINED IN THIS AGREEMENT IN ACCORDANCE WITH SECTION 31.

 

(III)                               NOTWITHSTANDING ANY OTHER PROVISION OF THIS
AGREEMENT AND ANY PROVISION OF LAW THAT OTHERWISE SO EMPOWERS THE COMPANY, THE
CLASS A MEMBER, THE BOARD, ANY OFFICER OR ANY OTHER PERSON, NEITHER THE CLASS A
MEMBER NOR THE BOARD NOR ANY OFFICER NOR ANY OTHER PERSON SHALL BE AUTHORIZED OR
EMPOWERED, NOR SHALL THEY PERMIT THE COMPANY, AND THE COMPANY SHALL NOT, WITHOUT
THE PRIOR UNANIMOUS WRITTEN CONSENT OF THE CLASS A MEMBER AND THE BOARD
(INCLUDING THE EXELON DIRECTOR), TAKE ANY MATERIAL ACTION, PROVIDED, HOWEVER,
THAT THE BOARD MAY NOT VOTE ON, OR AUTHORIZE THE TAKING OF, ANY MATERIAL ACTION,
UNLESS THERE IS AN EXELON DIRECTOR THEN SERVING IN SUCH CAPACITY.

 

(IV)                              THE BOARD AND THE CLASS A MEMBER SHALL CAUSE
THE COMPANY TO DO OR CAUSE TO BE DONE ALL THINGS NECESSARY TO PRESERVE AND KEEP
IN FULL FORCE AND EFFECT THE COMPANY’S EXISTENCE, RIGHTS (CHARTER AND STATUTORY)
AND FRANCHISES; PROVIDED, HOWEVER, THAT THE COMPANY SHALL NOT BE REQUIRED TO
PRESERVE ANY SUCH RIGHT OR FRANCHISE IF THE BOARD SHALL DETERMINE THAT THE
PRESERVATION THEREOF IS NO LONGER NECESSARY OR USEFUL FOR THE CONDUCT OF THE
COMPANY’S BUSINESS AND THE PERFORMANCE OF THE OBLIGATIONS AND THE LOSS THEREOF
IS NOT DISADVANTAGEOUS IN ANY MATERIAL RESPECT TO THE COMPANY.

 

(V)                                 THE CLASS A MEMBER REPRESENTS AND WARRANTS,
AND AS LONG AS ANY OBLIGATION IS OUTSTANDING, COVENANTS, THAT THE COMPANY:

 

(A)                    has not engaged, and will not engage, directly or
indirectly, in any business other than the business required or permitted
pursuant to Section 7, the Transaction Documents or this Section 9(j);

 

(B)                      does not have and will not have any assets other than
the Zion Assets and other assets reasonably necessary in the performance of the
Obligations;

 

(C)                      has not engaged in, sought or consented to and will
not, to the

 

6

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fullest extent permitted by law, engage in, seek or consent to any dissolution,
winding up, liquidation, consolidation, merger, conversion, sale of all or
substantially all of its assets, transfer of its limited liability company
interests or, with respect to the matters set forth in this Section 9(j)(v),
amendment of the Certificate of Formation or this Agreement;

 

(D)                     is and will remain solvent and will pay its debts and
liabilities (including, as applicable, shared personnel and overhead expenses)
to the extent of its assets as the same shall become due, and is maintaining and
will maintain adequate capital for the normal obligations reasonably foreseeable
in a business of its size and character and in light of its contemplated
business operations;

 

(E)                       has not failed and will not fail to correct any known
misunderstanding regarding its separate identity;

 

(F)                       has maintained and will maintain its accounts, books
and records separate from any other Person and will file its own tax returns,
except to the extent that it is required to file consolidated tax returns by
law;

 

(G)                      has maintained and will maintain its own records,
books, resolutions and agreements;

 

(H)                     other than as otherwise contemplated in the Transaction
Documents, (1) has not commingled and will not commingle its funds or assets
with those of any other Person and (2) has not participated and will not
participate in any cash management system with any other Person;

 

(I)                          has held and will hold its assets in its own name;

 

(J)                         has conducted and will conduct its business in its
own name or in a name franchised or licensed to it by an entity other than an
Affiliate of the Company, and not as a division or part of any other Person,
except for services rendered under an agreement with another Affiliate of the
Company, so long as (1) such other Affiliate complies with the terms contained
in Subsection (W) below, and (2) such other Affiliate holds itself out as an
agent or independent contractor of the Company;

 

(K)                     has maintained and will maintain its financial
statements, accounting records and other entity documents separate from any
other Person and has not permitted and will not permit its assets to be listed
as assets on the financial statement of any other entity except as required by
GAAP; provided, however, that any such consolidated financial statement shall
contain a note indicating that

 

7

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its separate assets and liabilities are neither available to pay the debts of
the consolidated entity nor constitute obligations of the consolidated entity;

 

(L)                       has paid and will pay its own liabilities and
expenses, including the salaries of its own employees, out of its own funds and
assets, and has maintained and will maintain a sufficient number of employees in
light of its contemplated business operations;

 

(M)                  has observed and will observe all limited liability company
formalities;

 

(N)                     has and will have no indebtedness other than liabilities
incurred in the ordinary course of business as reasonably necessary for the
ownership and operation of the Zion Assets, the performance of the Obligations,
and the routine administration of the Company, and such other liabilities that
are existing or accrue pursuant to the Transaction Documents;

 

(O)                     has not and will not assume or guarantee or become
obligated for the liabilities of any other Person or hold out its credit as
being available to satisfy the liabilities of any other Person;

 

(P)                       has not and will not acquire obligations or securities
of its Members or any other Affiliate;

 

(Q)                     has allocated and will allocate fairly and reasonably
any overhead expenses that are shared with any Affiliate, including, but not
limited to, paying for shared office space and services performed by any
employee of an Affiliate;

 

(R)                      maintains and uses and will maintain and use separate
stationery, invoices and checks bearing its name, which stationery, invoices,
and checks shall bear the Company’s name and shall not bear the name of any
other entity unless such entity is clearly designated as being the Company’s
agent;

 

(S)                       has not pledged or granted a security interest or
other encumbrance in, and will not pledge or grant a security interest or other
encumbrance in, its assets for the benefit of any other Person;

 

(T)                      has maintained and will maintain its assets in such a
manner that it will not be costly or difficult to segregate, ascertain or
identify its individual assets from those of any other Person;

 

(U)                     has not made and will not make loans to any Person or
hold evidence of indebtedness issued by any other Person or entity (other than
cash and investment-grade securities issued by an

 

8

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entity that is not an Affiliate of or subject to common ownership with the
Company);

 

(V)                      has not identified and will not identify its Members or
any Affiliate of any of them as a division or part of the Company, and has not
identified itself and shall not identify itself as a division of any other
Person;

 

(W)                 has not entered into or been a party to, and will not enter
into or be a party to, any transaction with its Members or Affiliates except
(1) in the ordinary course of its business and on terms which are intrinsically
fair, commercially reasonable and no less favorable to it than would be obtained
in a comparable arm’s-length transaction with an unrelated third party and
(2) pursuant to the Transaction Documents;

 

(X)                     has not and will not have any obligation to, and will
not, indemnify the Class A Member or any Officer or Director unless such an
obligation is fully subordinated to the Obligations and will not constitute a
claim against it in the event that cash flow in excess of the amount required to
pay the Obligations is insufficient to pay such obligation;

 

(Y)                      does not and will not have any of its obligations
guaranteed by any Affiliate, other than the Performance Guaranty, the Guaranty,
the Credit Support Agreement and the Pledge Agreement;

 

(Z)                      has complied and will comply with all of the terms and
provisions contained in this Agreement; and

 

(AA)                    will not form, acquire or hold any subsidiary or own any
equity interest in any other entity.

 

Failure of the Company, or the Class A Member, any Officer or the Board on
behalf of the Company, to comply with any of the foregoing covenants or any
other covenants contained in this Agreement shall not affect the status of the
Company as a separate legal entity or the limited liability of the Class A
Member or the Directors.

 

SECTION 10.             EXELON DIRECTOR.

 

(A)           FROM AND AFTER THE CLOSING DATE AND UNTIL THE PUT OPTION CLOSING,
THE CLASS B MEMBER SHALL USE REASONABLE EFFORTS TO CAUSE THE COMPANY AT ALL
TIMES TO HAVE AN EXELON DIRECTOR WHO WILL BE ELECTED, APPOINTED OR REMOVED BY
THE CLASS B MEMBER.   NO RESIGNATION OR REMOVAL OF THE EXELON DIRECTOR, AND NO
APPOINTMENT OF A SUCCESSOR EXELON DIRECTOR, SHALL BE EFFECTIVE UNTIL SUCH
SUCCESSOR SHALL HAVE ACCEPTED HIS OR HER APPOINTMENT AS THE EXELON DIRECTOR BY A
WRITTEN INSTRUMENT, WHICH MAY BE A COUNTERPART SIGNATURE PAGE TO THE MANAGEMENT
AGREEMENT.  IN THE EVENT OF A VACANCY IN THE POSITION OF EXELON DIRECTOR, THE
CLASS B MEMBER

 

9

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SHALL, AS SOON AS REASONABLY PRACTICABLE, APPOINT A SUCCESSOR EXELON DIRECTOR. 
ALL RIGHT, POWER AND AUTHORITY OF THE EXELON DIRECTOR SHALL BE LIMITED TO THE
EXTENT NECESSARY TO EXERCISE THOSE RIGHTS AND PERFORM THOSE DUTIES SPECIFICALLY
SET FORTH IN THIS AGREEMENT.   THE EXELON DIRECTOR SHALL NOT AT ANY TIME SERVE
AS TRUSTEE IN BANKRUPTCY FOR ANY AFFILIATE OF THE COMPANY.

 

(B)           EXCEPT WITH RESPECT TO THOSE ACTIONS EXPRESSLY REQUIRING THE VOTE
OF THE EXELON DIRECTOR PURSUANT TO SECTION 9(J) OR OTHER PROVISIONS OF THIS
AGREEMENT, THE EXELON DIRECTOR, IN HIS OR HER CAPACITY AS EXELON DIRECTOR, SHALL
NOT HAVE ANY RIGHT TO VOTE ON, APPROVE OR OTHERWISE CONSENT TO ANY ACTION BY, OR
MATTER RELATING TO, THE COMPANY, AND THE EXELON DIRECTOR’S ATTENDANCE AT ANY
MEETING SHALL NOT BE REQUIRED AS A CONDITION TO THE TAKING OF ANY SUCH ACTION. 
ANYTHING IN THE LAWS OF THE STATE OF DELAWARE OR THIS AGREEMENT TO THE CONTRARY
NOTWITHSTANDING, THE EXELON DIRECTOR, IN HIS OR HER CAPACITY AS EXELON DIRECTOR,
MAY NOT BIND THE COMPANY.

 

SECTION 11.             OFFICERS.

 

(A)           OFFICERS.  (I) THE BOARD MAY DESIGNATE THE OFFICERS OF THE COMPANY
(THE “OFFICERS”).  THE OFFICERS MAY CONSIST OF A CHIEF EXECUTIVE OFFICER,
PRESIDENT, A SECRETARY, A TREASURER, AND ONE OR MORE VICE PRESIDENTS, ASSISTANT
SECRETARIES AND ASSISTANT TREASURERS.  ANY NUMBER OF OFFICES MAY BE HELD BY THE
SAME PERSON.  SUCH OFFICERS SHALL HOLD THEIR OFFICES FOR SUCH TERMS AND SHALL
EXERCISE SUCH POWERS AND PERFORM SUCH DUTIES AS SHALL BE DETERMINED FROM TIME TO
TIME BY THE BOARD.  THE SALARIES OF ALL OFFICERS AND AGENTS OF THE COMPANY SHALL
BE FIXED BY OR IN THE MANNER PRESCRIBED BY THE BOARD.  THE OFFICERS OF THE
COMPANY SHALL HOLD OFFICE UNTIL THEIR SUCCESSORS ARE CHOSEN AND QUALIFIED.  ANY
OFFICER MAY BE REMOVED AT ANY TIME, WITH OR WITHOUT CAUSE, BY THE AFFIRMATIVE
VOTE OF A MAJORITY OF THE BOARD.  ANY VACANCY OCCURRING IN ANY OFFICE OF THE
COMPANY MAY BE FILLED BY THE BOARD.

 

(II)           AS OF THE DATE HEREOF, THE OFFICERS OF THE COMPANY ARE AS
FOLLOWS:

 

R. Steve Creamer

Chief Executive Officer

John Christian

President

Philip O. Strawbridge

Senior Vice President and Chief Financial Officer

Val J. Christensen

Senior Vice President, General Counsel and Secretary

Pat Daly

Vice President

Mark C. McBride

Vice President and Controller

Marshall E. Erb

Vice President and Treasurer

Suzanne A. Stewart

Assistant Secretary

 

(B)           OFFICERS AS AGENTS.  THE OFFICERS, TO THE EXTENT OF THEIR POWERS
SET FORTH IN THIS AGREEMENT OR OTHERWISE VESTED IN THEM BY ACTION OF THE BOARD
NOT INCONSISTENT WITH THIS AGREEMENT, ARE AGENTS OF THE COMPANY FOR THE PURPOSE
OF THE COMPANY’S BUSINESS AND, SUBJECT TO SECTION 9(J), THE ACTIONS OF THE
OFFICERS TAKEN IN ACCORDANCE WITH SUCH POWERS SHALL BIND THE COMPANY.

 

(C)           DUTIES OF BOARD AND OFFICERS.  EXCEPT TO THE EXTENT OTHERWISE
PROVIDED HEREIN, EACH DIRECTOR (INCLUDING THE EXELON DIRECTOR) AND OFFICER SHALL
HAVE A FIDUCIARY DUTY OF LOYALTY AND CARE SIMILAR TO THAT OF DIRECTORS AND
OFFICERS OF BUSINESS CORPORATIONS ORGANIZED UNDER THE GENERAL CORPORATION LAW OF
THE STATE OF DELAWARE.

 

10

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SECTION 12.             LIMITED LIABILITY.

 

Except as otherwise expressly provided by the Act, the debts, obligations and
liabilities of the Company, whether arising in contract, tort or otherwise,
shall be the debts, obligations and liabilities solely of the Company, and
neither the Class A Member nor the Class B Member nor any Director shall be
obligated personally for any such debt, obligation or liability of the Company
solely by reason of being a Class A Member, Class B Member or Director of the
Company.

 

SECTION 13.             CAPITAL CONTRIBUTIONS.

 

The Class A Member has contributed to the Company property of an agreed value of
$1,000.00.  In accordance with Section 5(c), the Class B Member shall not be
required to make any capital contributions to the Company.

 

SECTION 14.             ADDITIONAL CONTRIBUTIONS.

 

The Class A Member is not required by this Agreement to make any additional
capital contribution to the Company. However, the Class A Member may make
additional capital contributions to the Company at any time.  To the extent that
the Class A Member makes an additional capital contribution to the Company, the
Class A Member shall revise Schedule B of this Agreement.  The provisions of
this Agreement, including this Section 14, are intended to benefit the Class A
Member and the Class B Member and, to the fullest extent permitted by law, shall
not be construed as conferring any benefit upon any creditor of the Company (and
no such creditor of the Company shall be a third-party beneficiary of this
Agreement) and the Class A Member and the Class B Member shall not have any duty
or obligation to any creditor of the Company to make any contribution to the
Company or to issue any call for capital pursuant to this Agreement.

 

SECTION 15.             ALLOCATION OF PROFITS AND LOSSES.

 

The Company’s profits and losses shall be allocated to the Class A Member.

 

SECTION 16.             DISTRIBUTIONS.

 

Distributions shall be made to the Class A Member at the times and in the
aggregate amounts determined by the Board.  Notwithstanding any provision to the
contrary contained in this Agreement, the Company shall not make a distribution
to the Class A Member on account of its interest in the Company or purchase or
redeem the membership interest of the Class A Member if: (a) a Condition of
Default shall exist at the time of such distribution or after giving effect
thereto or (b) such distribution, purchase or redemption would violate the other
provisions of this Agreement, Section 18-607 of the Act or any other applicable
law, or would constitute an Event of Default or a breach or default under the
Transaction Documents.

 

SECTION 17.             BOOKS AND RECORDS.

 

The Board shall keep or cause to be kept complete and accurate books of account
and records with respect to the Company’s business.  The books of the Company
shall at all times be

 

11

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maintained by or on behalf of the Board.  The Class A Member and its duly
authorized representatives shall have the right to examine the Company books,
records and documents during normal business hours.  The Company, and the Board
on behalf of the Company, shall not have the right to keep confidential from the
Class A Member any information that the Board would otherwise be permitted to
keep confidential from the Class A Member pursuant to Section 18-305(c) of the
Act.  The Company’s books of account shall be kept using the method of
accounting determined by the Board.  The Company’s independent auditor, if any,
shall be an independent public accounting firm selected by the Board.

 

SECTION 18.             REPORTS.

 

(A)           THE BOARD SHALL PREPARE, OR CAUSE TO BE PREPARED, SUCH REPORTS AND
STATEMENTS (FINANCIAL OR OTHERWISE) AS MAY BE REQUIRED TO PERMIT THE COMPANY AND
THE CLASS A MEMBER TO COMPLY WITH THE PROVISIONS OF THE TRANSACTION DOCUMENTS.

 

(B)           THE BOARD SHALL, AFTER THE END OF EACH FISCAL YEAR, USE REASONABLE
EFFORTS TO CAUSE THE COMPANY’S INDEPENDENT ACCOUNTANTS, IF ANY, TO PREPARE AND
TRANSMIT TO THE CLASS A MEMBER AS PROMPTLY AS POSSIBLE ANY SUCH TAX INFORMATION
AS MAY BE REASONABLY NECESSARY TO ENABLE THE CLASS A MEMBER TO PREPARE ITS
FEDERAL, STATE AND LOCAL INCOME TAX RETURNS RELATING TO SUCH FISCAL YEAR.

 

SECTION 19.             OTHER BUSINESS.

 

The Class A Member, the Class B Member and any Affiliate of the Class A Member
or the Class B Member may engage in or possess an interest in other business
ventures (unconnected with the Company) of every kind and description,
independently or with others notwithstanding any provision to the contrary at
law or in equity.  The Company shall not have any rights in or to such
independent ventures or the income or profits therefrom by virtue of this
Agreement.

 

SECTION 20.             EXCULPATION AND INDEMNIFICATION.

 

(A)           NONE OF THE CLASS A MEMBER, THE CLASS B MEMBER OR ANY OFFICER,
DIRECTOR, EMPLOYEE OR AGENT OF THE COMPANY NOR ANY EMPLOYEE, REPRESENTATIVE,
AGENT OR AFFILIATE OF THE CLASS A MEMBER OR THE CLASS B MEMBER (COLLECTIVELY,
THE “COVERED PERSONS”) SHALL BE LIABLE TO THE COMPANY OR ANY OTHER PERSON THAT
IS A PARTY TO OR IS OTHERWISE BOUND BY THIS AGREEMENT FOR ANY LOSS, DAMAGE OR
CLAIM INCURRED BY REASON OF ANY ACT OR OMISSION PERFORMED OR OMITTED BY SUCH
COVERED PERSON IN GOOD FAITH ON BEHALF OF THE COMPANY AND IN A MANNER REASONABLY
BELIEVED BY SUCH COVERED PERSON TO BE WITHIN THE SCOPE OF THE AUTHORITY
CONFERRED ON SUCH COVERED PERSON BY THIS AGREEMENT, EXCEPT THAT A COVERED PERSON
SHALL BE LIABLE FOR ANY SUCH LOSS, DAMAGE OR CLAIM INCURRED BY REASON OF SUCH
COVERED PERSON’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

 

(B)           TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, A COVERED
PERSON SHALL BE ENTITLED TO INDEMNIFICATION FROM THE COMPANY FOR ANY LOSS,
DAMAGE OR CLAIM INCURRED BY SUCH COVERED PERSON BY REASON OF ANY ACT OR OMISSION
PERFORMED OR OMITTED BY SUCH COVERED PERSON IN GOOD FAITH ON BEHALF OF THE
COMPANY AND IN A MANNER REASONABLY BELIEVED TO BE WITHIN THE SCOPE OF THE
AUTHORITY CONFERRED ON SUCH COVERED PERSON BY THIS AGREEMENT, EXCEPT THAT NO

 

12

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COVERED PERSON SHALL BE ENTITLED TO BE INDEMNIFIED IN RESPECT OF ANY LOSS,
DAMAGE OR CLAIM INCURRED BY SUCH COVERED PERSON BY REASON OF SUCH COVERED
PERSON’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT WITH RESPECT TO SUCH ACTS OR
OMISSIONS; PROVIDED, HOWEVER, THAT ANY INDEMNITY UNDER THIS SECTION 20 BY THE
COMPANY SHALL BE PROVIDED OUT OF AND TO THE EXTENT OF COMPANY ASSETS ONLY, AND
THE CLASS A MEMBER AND THE CLASS B MEMBER SHALL NOT HAVE ANY PERSONAL LIABILITY
ON ACCOUNT THEREOF; AND PROVIDED, FURTHER, THAT SO LONG AS ANY OBLIGATION IS
OUTSTANDING, NO INDEMNITY PAYMENT UNDER THIS SECTION 20 FROM FUNDS OF THE
COMPANY (AS DISTINCT FROM FUNDS FROM OTHER SOURCES, SUCH AS INSURANCE) SHALL BE
PAYABLE FROM AMOUNTS ALLOCABLE TO ANY OTHER PERSON PURSUANT TO THE TRANSACTION
DOCUMENTS.

 

(C)           TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EXPENSES
(INCLUDING LEGAL FEES) INCURRED BY A COVERED PERSON DEFENDING ANY CLAIM, DEMAND,
ACTION, SUIT OR PROCEEDING SHALL, FROM TIME TO TIME, BE ADVANCED BY THE COMPANY
PRIOR TO THE FINAL DISPOSITION OF SUCH CLAIM, DEMAND, ACTION, SUIT OR PROCEEDING
UPON RECEIPT BY THE COMPANY OF AN UNDERTAKING BY OR ON BEHALF OF THE COVERED
PERSON TO REPAY SUCH AMOUNT IF IT SHALL BE DETERMINED THAT THE COVERED PERSON IS
NOT ENTITLED TO BE INDEMNIFIED AS AUTHORIZED IN THIS SECTION 20.

 

(D)           A COVERED PERSON SHALL BE FULLY PROTECTED IN RELYING IN GOOD FAITH
UPON THE RECORDS OF THE COMPANY AND UPON SUCH INFORMATION, OPINIONS, REPORTS OR
STATEMENTS PRESENTED TO THE COMPANY BY ANY PERSON AS TO MATTERS THE COVERED
PERSON REASONABLY BELIEVES ARE WITHIN SUCH OTHER PERSON’S PROFESSIONAL OR EXPERT
COMPETENCE AND WHO HAS BEEN SELECTED WITH REASONABLE CARE BY OR ON BEHALF OF THE
COMPANY, INCLUDING INFORMATION, OPINIONS, REPORTS OR STATEMENTS AS TO THE VALUE
AND AMOUNT OF THE ASSETS, LIABILITIES, OR ANY OTHER FACTS PERTINENT TO THE
EXISTENCE AND AMOUNT OF ASSETS FROM WHICH DISTRIBUTIONS TO THE CLASS A MEMBER
MIGHT PROPERLY BE PAID.

 

(E)           TO THE EXTENT THAT, AT LAW OR IN EQUITY, A COVERED PERSON HAS
DUTIES (INCLUDING FIDUCIARY DUTIES) AND LIABILITIES RELATING THERETO TO THE
COMPANY OR TO ANY OTHER COVERED PERSON, A COVERED PERSON ACTING UNDER THIS
AGREEMENT SHALL NOT BE LIABLE TO THE COMPANY OR TO ANY OTHER COVERED PERSON FOR
ITS GOOD FAITH RELIANCE ON THE PROVISIONS OF THIS AGREEMENT OR ANY APPROVAL OR
AUTHORIZATION GRANTED BY THE COMPANY OR ANY OTHER COVERED PERSON.  THE
PROVISIONS OF THIS AGREEMENT, TO THE EXTENT THAT THEY RESTRICT THE DUTIES AND
LIABILITIES OF A COVERED PERSON OTHERWISE EXISTING AT LAW OR IN EQUITY, ARE
AGREED BY THE CLASS A MEMBER AND THE CLASS B MEMBER TO REPLACE SUCH OTHER DUTIES
AND LIABILITIES OF SUCH COVERED PERSON.

 

(F)            NOTWITHSTANDING THE FOREGOING PROVISIONS, ANY INDEMNIFICATION SET
FORTH HEREIN SHALL BE FULLY SUBORDINATE TO THE OBLIGATIONS AND, TO THE FULLEST
EXTENT PERMITTED BY LAW, SHALL NOT CONSTITUTE A CLAIM AGAINST THE COMPANY IN THE
EVENT THAT CASH FLOW IN EXCESS OF THE AMOUNT REQUIRED TO PAY THE OBLIGATIONS IS
INSUFFICIENT TO PAY SAME.

 

(G)           THE FOREGOING PROVISIONS OF THIS SECTION 20 SHALL SURVIVE ANY
TERMINATION OF THIS AGREEMENT.

 

SECTION 21.             ASSIGNMENTS.

 

(A)           SO LONG AS ANY OBLIGATION IS OUTSTANDING, THE CLASS A MEMBER MAY
NOT SELL, TRANSFER, PLEDGE, MAKE A GIFT OF, OR OTHERWISE DISPOSE OF OR ASSIGN
ANY OR ALL OF ITS RIGHTS AND

 

13

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OBLIGATIONS UNDER THIS AGREEMENT OR AS THE CLASS A MEMBER TO ANY PERSON, EXPECT
AS OTHERWISE PROVIDED IN THE TRANSACTION DOCUMENTS.

 

(B)           THE CLASS B MEMBER MAY NOT SELL, TRANSFER, PLEDGE, MAKE A GIFT OF,
OR OTHERWISE DISPOSE OF OR ASSIGN ANY OR ALL OF ITS RIGHTS AND OBLIGATIONS UNDER
THIS AGREEMENT OR AS THE CLASS B MEMBER TO ANY PERSON OTHER THAN THE CLASS A
MEMBER; PROVIDED THAT THE CLASS B MEMBER MAY ASSIGN ITS INTEREST AS A CLASS B
MEMBER AND THE ASSOCIATED RIGHTS AND OBLIGATIONS TO ANY SUCCESSOR TO ALL OR A
SUBSTANTIAL PART OF THE CLASS B MEMBER’S BUSINESS OR ASSETS.

 

SECTION 22.             RESIGNATION.

 

(A)           SO LONG AS ANY OBLIGATION IS OUTSTANDING, THE CLASS A MEMBER MAY
NOT RESIGN, EXCEPT AS OTHERWISE REQUIRED UNDER THE TRANSACTION DOCUMENTS.

 

(B)           UPON THE WRITTEN RESIGNATION OF THE CLASS B MEMBER, THE CLASS B
MEMBER SHALL AUTOMATICALLY BE DIVESTED OF ALL OF ITS RIGHTS UNDER THIS AGREEMENT
AND AS A CLASS B MEMBER.

 

SECTION 23.             ADMISSION OF MEMBERS.

 

So long as any Obligation remains outstanding, no additional Member may be
admitted to the Company.  Any pledgee, assignee, or nominee in whose name the
Class A Membership Interest may be registered pursuant to the exercise of
remedies under the Pledge Agreement or applicable law shall succeed to the
interest of the Class A Member under this Agreement without further action of
the Board of Directors or the prior holder of the Class A Membership Interest.

 

SECTION 24.             DISSOLUTION.

 

(A)           SUBJECT TO SECTION 9(J), THE COMPANY SHALL BE DISSOLVED, AND ITS
AFFAIRS SHALL BE WOUND UP UPON THE FIRST TO OCCUR OF THE FOLLOWING: (I) THE
TERMINATION OF THE LEGAL EXISTENCE OF THE LAST REMAINING MEMBER OF THE COMPANY
OR THE OCCURRENCE OF ANY OTHER EVENT WHICH TERMINATES THE CONTINUED MEMBERSHIP
OF THE LAST REMAINING MEMBER OF THE COMPANY UNLESS THE COMPANY IS CONTINUED
WITHOUT DISSOLUTION IN A MANNER PERMITTED BY THIS AGREEMENT OR THE ACT OR
(II) THE ENTRY OF A DECREE OF JUDICIAL DISSOLUTION UNDER SECTION 18-802 OF THE
ACT.  UPON THE OCCURRENCE OF ANY EVENT THAT CAUSES THE LAST REMAINING MEMBER OF
THE COMPANY TO CEASE TO BE A MEMBER OF THE COMPANY OR THAT CAUSES THE CLASS A
MEMBER TO CEASE TO BE A MEMBER OF THE COMPANY (OTHER THAN (I) UPON AN ASSIGNMENT
BY THE CLASS A MEMBER OF ALL OF ITS LIMITED LIABILITY COMPANY INTEREST IN THE
COMPANY AND THE ADMISSION OF THE TRANSFEREE PURSUANT TO SECTIONS 21 AND 23, OR
(II) THE RESIGNATION OF THE CLASS A MEMBER AND THE ADMISSION OF AN ADDITIONAL
MEMBER OF THE COMPANY PURSUANT TO SECTIONS 22 AND 23), TO THE FULLEST EXTENT
PERMITTED BY LAW, THE REPRESENTATIVE OF SUCH MEMBER IS HEREBY AUTHORIZED TO, AND
SHALL, WITHIN NINETY (90) DAYS AFTER THE OCCURRENCE OF THE EVENT THAT TERMINATED
THE CONTINUED MEMBERSHIP OF SUCH MEMBER IN THE COMPANY, AGREE IN WRITING (I) TO
CONTINUE THE COMPANY AND (II) TO THE ADMISSION OF THE REPRESENTATIVE OR ITS
NOMINEE OR DESIGNEE, AS THE CASE MAY BE, AS A SUBSTITUTE MEMBER OF THE COMPANY,
EFFECTIVE AS OF THE OCCURRENCE OF THE EVENT THAT TERMINATED THE CONTINUED
MEMBERSHIP OF THE LAST REMAINING MEMBER OF THE COMPANY OR THE CLASS A MEMBER IN
THE COMPANY.

 

(B)           NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, THE
BANKRUPTCY OF THE CLASS A MEMBER OR CLASS B MEMBER SHALL NOT CAUSE THE CLASS A
MEMBER OR CLASS B MEMBER,

 

14

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RESPECTIVELY, TO CEASE TO BE A MEMBER OF THE COMPANY AND UPON THE OCCURRENCE OF
SUCH AN EVENT, THE COMPANY SHALL CONTINUE WITHOUT DISSOLUTION.

 

(C)           NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, EACH OF THE
CLASS A MEMBER AND THE CLASS B MEMBER WAIVES ANY RIGHT IT MIGHT HAVE TO AGREE IN
WRITING TO DISSOLVE THE COMPANY UPON THE BANKRUPTCY OF THE CLASS A MEMBER OR THE
CLASS B MEMBER, OR THE OCCURRENCE OF AN EVENT THAT CAUSES THE CLASS A MEMBER OR
THE CLASS B MEMBER TO CEASE TO BE A MEMBER OF THE COMPANY.

 

(D)           IN THE EVENT OF DISSOLUTION, THE COMPANY SHALL CONDUCT ONLY SUCH
ACTIVITIES AS ARE NECESSARY TO WIND UP ITS AFFAIRS (INCLUDING THE SALE OF THE
ASSETS OF THE COMPANY IN AN ORDERLY MANNER), AND THE ASSETS OF THE COMPANY SHALL
BE APPLIED IN THE MANNER, AND IN THE ORDER OF PRIORITY, SET FORTH IN
SECTION 18-804 OF THE ACT.

 

(E)           FOLLOWING A DISSOLUTION, THE COMPANY SHALL TERMINATE WHEN (I) ALL
OF THE ASSETS OF THE COMPANY, AFTER PAYMENT OF OR DUE PROVISION FOR ALL DEBTS,
LIABILITIES AND OBLIGATIONS OF THE COMPANY, SHALL HAVE BEEN DISTRIBUTED TO THE
CLASS A MEMBER IN THE MANNER PROVIDED FOR IN THIS AGREEMENT AND (II) THE
CERTIFICATE OF FORMATION SHALL HAVE BEEN CANCELED IN THE MANNER REQUIRED BY THE
ACT.

 

SECTION 25.             WAIVER OF PARTITION; NATURE OF INTEREST.

 

Except as otherwise expressly provided in this Agreement, to the fullest extent
permitted by law, each of the Class A Member and the Class B Member hereby
irrevocably waives any right or power that such Person might have to cause the
Company or any of its assets to be partitioned, to cause the appointment of a
receiver for all or any portion of the assets of the Company, to compel any sale
of all or any portion of the assets of the Company pursuant to any applicable
law or to file a complaint or to institute any proceeding at law or in equity to
cause the dissolution, liquidation, winding up or termination of the Company. 
The Class A Member shall not have any interest in any specific assets of the
Company, and the Class A Member shall not have the status of a creditor with
respect to any distribution pursuant to Section 16.  The interest of the Class A
Member in the Company is personal property.

 

SECTION 26.             BENEFITS OF AGREEMENT; NO THIRD-PARTY RIGHTS.

 

None of the provisions of this Agreement shall be for the benefit of or
enforceable by any creditor of the Company or by any creditor of the Class A
Member or the Class B Member.  Nothing in this Agreement shall be deemed to
create any right in any Person (other than Covered Persons) not a party hereto,
and this Agreement shall not be construed in any respect to be a contract in
whole or in part for the benefit of any third Person (except as provided in
Section 29).

 

SECTION 27.             SEVERABILITY OF PROVISIONS.

 

Each provision of this Agreement shall be considered severable and if for any
reason any provision or provisions herein are determined to be invalid,
unenforceable or illegal under any existing or future law, such invalidity,
unenforceability or illegality shall not impair the operation of or affect those
portions of this Agreement which are valid, enforceable and legal.

 

15

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SECTION 28.             ENTIRE AGREEMENT.

 

This Agreement constitutes the entire agreement of the parties with respect to
the subject matter hereof.

 

SECTION 29.             BINDING AGREEMENT.

 

Notwithstanding any other provision of this Agreement, the Class A Member agrees
that this Agreement, including, without limitation, Sections 5(b), 5(c), 7, 8,
9, 10, 19, 20, 21, 22, 23, 24, 25, 26, 29 and 31, constitutes a legal, valid and
binding agreement of the Class A Member and the Class B Member.

 

SECTION 30.             GOVERNING LAW.

 

This Agreement shall be governed by and construed under the laws of the State of
Delaware (without regard to conflict of laws principles), all rights and
remedies being governed by said laws.

 

SECTION 31.             AMENDMENTS.

 

Subject to Section 9(j), this Agreement may be modified, altered, supplemented
or amended pursuant to a written agreement executed and delivered by the Class A
Member.  A copy of any such amendment shall be provided to the Class B Member on
or prior to its effectiveness.   Notwithstanding the foregoing, if a Condition
of Default shall exist, the Class A Member shall not amend this Agreement
without the unanimous written consent of the Board (including the Exelon
Director).

 

SECTION 32.             COUNTERPARTS.

 

This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original of this Agreement and all of which together shall
constitute one and the same instrument.

 

SECTION 33.             NOTICES.

 

Any notices required to be delivered hereunder shall be in writing and
personally delivered, mailed or sent by fax, electronic mail, overnight courier
or other similar form of rapid transmission, and shall be deemed to have been
duly given upon receipt (a) in the case of the Company, to the Company at its
address in Section 2, (b) in the case of the Class A Member, to the Class A
Member at its address as listed on Schedule B attached hereto, (c) in the case
of the Class B Member, to the Class B Member at its address as listed on
Schedule B attached hereto, and (d) in the case of any of the foregoing, at such
other address as may be designated by written notice to the others.

 

16

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SECTION 34.             EFFECTIVENESS.

 

Pursuant to Section 18-201(d) of the Act, this Agreement shall be effective as
of the time of the filing of the Certificate of Formation with the Office of the
Delaware Secretary of State on April 3, 2007.

 

[Signature page follows]

 

17

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IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has
duly executed this Limited Liability Company Agreement as of the        day of
December, 2007.

 

 

CLASS A MEMBER:

 

 

 

ENERGYSOLUTIONS, LLC,

 

a Utah limited liability company

 

 

 

 

 

By:

/s/ R. Steve Creamer

 

 

Name: R. Steve Creamer

 

 

Title: Chief Executive Officer

 

 

 

 

 

CLASS B MEMBER:

 

 

 

EXELON GENERATION COMPANY, LLC,

 

a Pennsylvania limited liability company

 

 

 

 

 

By:

/s/ Thomas S. O’Neill

 

 

Name: Thomas S. O’Neill

 

 

Title: VP New Plant Development

 

18

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SCHEDULE A

 

Definitions

 

A.                                   Definitions

 

When used in this Agreement, the following terms not otherwise defined herein
have the following meanings:

 

“Act” has the meaning set forth in the preamble to this Agreement.

 

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly Controlling or Controlled by or under direct or indirect common
Control with such Person, or who is a director or officer of such Person or of
an Affiliate of such Person, or any Person who has a familial relationship, by
blood, marriage or otherwise, with an Affiliate of the Company.

 

“Agreement” means this Limited Liability Company Agreement of the Company,
together with the schedules attached hereto, as amended, restated or
supplemented or otherwise modified from time to time.

 

“Ancillary Agreements” has the meaning set forth in the ASA.

 

“ASA” means that certain Asset Sale Agreement, dated as of December 11, 2007, by
and among EnergySolutions, Inc., the Company, the Class A Member and the Class B
Member.

 

“Bankruptcy” means, with respect to any Person, if such Person (i) makes an
assignment for the benefit of creditors, (ii) files a voluntary petition in
bankruptcy, (iii) is adjudged a bankrupt or insolvent, or has entered against it
an order for relief, in any bankruptcy or insolvency proceedings, (iv) files a
petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment, liquidation or similar relief under any statute, law
or regulation, (v) files an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against it in any
proceeding of this nature, (vi) seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of the Person or of all or any
substantial part of its properties, or (vii) if 120 days after the commencement
of any proceeding against the Person seeking reorganization, arrangement,
composition, readjustment, liquidation or similar relief under any statute, law
or regulation, if the proceeding has not been dismissed, or if within 90 days
after the appointment without such Person’s consent or acquiescence of a
trustee, receiver or liquidator of such Person or of all or any substantial part
of its properties, the appointment is not vacated or stayed, or within ninety
(90) days after the expiration of any such stay, the appointment is not
vacated.  The foregoing definition of “Bankruptcy” is intended to replace and
shall supersede and replace the definition of “Bankruptcy” set forth in Sections
18-101(1) and 18-304 of the Act.

 

“Basic Documents” means this Agreement, the Management Agreement, the
Transaction Documents and all other documents, certificates and instruments
executed in connection with any of the foregoing.

 

“Board” or “Board of Directors” means the Board of Directors of the Company.

 

19

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“Certificate of Formation” means the Certificate of Formation of the Company
filed with the Secretary of State of the State of Delaware on April 3, 2007, as
amended or amended and restated from time to time.

 

“Class A Member” means EnergySolutions, LLC, a Utah limited liability company.

 

“Class B Member” means Exelon Generation Company, LLC, a Pennsylvania limited
liability company.

 

“Closing Date” has the meaning set forth in the ASA.

 

“Company” means ZionSolutions, LLC, a Delaware limited liability company.

 

“Condition of Default” shall exist if (a) any event shall have occurred or
condition shall exist and shall be continuing that, but for the giving of notice
or the passage of time (or both) or a decision of arbitrators, would constitute
an Event of Default or (b) an Event of Default shall have occurred and such or
any other Event of Default shall be continuing.

 

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities or general partnership or managing
member interests, by contract or otherwise. “Controlling” and “Controlled” shall
have correlative meanings.  Without limiting the generality of the foregoing, a
Person shall be deemed to Control any other Person in which it owns, directly or
indirectly, a majority of the ownership interests.

 

“Covered Persons” has the meaning set forth in Section 20(a).

 

“Directors” means the Persons elected or appointed to the Board of Directors
from time to time by the Class A Member or the Class B Member, including the
Exelon Director, in his or her capacity as manager of the Company.  Each
Director is hereby designated as a “manager” of the Company within the meaning
of Section 18-101(10) of the Act.

 

“End State Conditions” has the meaning set forth in the Put Option Agreement.

 

“Event of Default” has the meaning set forth in the Pledge Agreement.

 

“Exelon Director” means the Director appointed by the Class B Member.

 

“Guaranty” has the meaning set forth in the ASA.

 

“Management Agreement” means the agreement of the Directors in the form attached
hereto as Schedule C.  The Management Agreement shall be deemed incorporated
into, and a part of, this Agreement.

 

“Material Action” means (i) to consolidate or merge the Company with or into any
Person or convert the Company into any other form of entity, (ii) to sell all or
substantially all of the assets of the Company or distribute or transfer the net
assets of the Company to another entity, (iii) to institute Bankruptcy or other
proceedings to have the Company be adjudicated

 

20

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bankrupt or insolvent, (iv) to consent to the institution of Bankruptcy or
insolvency proceedings against the Company, (v) to file a petition seeking, or
to consent to, reorganization or relief with respect to the Company under any
applicable federal or state law relating to Bankruptcy or insolvency, (vi) to
consent to the appointment of a receiver, liquidator, assignee, trustee,
custodian or sequestrator (or any other similar official) of or for the Company
or a substantial part of its property, (vii) to make any assignment for the
benefit of creditors of the Company, (viii) to admit in writing the Company’s
inability to pay its debts generally as they become due, (ix) to engage in any
business activity not in accordance with Section 7, (x) to dissolve or liquidate
the Company, or, (xi) to take action in furtherance of any of the matters
described in the preceding clauses (i)-(x).

 

“Members” means the Class A Member and the Class B Member.

 

“Obligations” shall mean the indebtedness, liabilities and obligations of the
Company under or in connection with the Transaction Documents.  Upon the
occurrence of the Put Option Closing, for purposes of this Agreement, no
Obligations shall be deemed to be outstanding.

 

“Officer” means an officer of the Company described in Section 11.

 

“Performance Guaranty” has the meaning set forth in the ASA.

 

“Person” means any individual, corporation, partnership, joint venture, limited
liability company, estate, trust, unincorporated association, any federal,
state, county or municipal government or any bureau, department or agency
thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.

 

“Pledge Agreement” has the meaning set forth in the ASA.

 

“Put Option Agreement” has the meaning set forth in the ASA.

 

“Put Option Closing” has the meaning set forth in the Put Option Agreement.

 

“Special Purpose Provisions” shall have the meaning set forth in
Section 9(j)(ii).

 

“Transaction Documents” means the ASA and the Ancillary Agreements.

 

“Zion Assets” shall have the meaning set forth in the ASA.

 

B.                                     Rules of Construction

 

Definitions in this Agreement apply equally to both the singular and plural
forms of the defined terms.  The words “include” and “including” shall be deemed
to be followed by the phrase “without limitation.”  The terms “herein,” “hereof”
and “hereunder” and other words of similar import refer to this Agreement as a
whole and not to any particular Section, paragraph or subdivision.  The
Section titles appear as a matter of convenience only and shall not affect the
interpretation of this Agreement.  All Section, paragraph, clause, Exhibit or
Schedule references not attributed to a particular document shall be references
to such parts of this Agreement. 

 

21

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References to any agreement, contract or instrument shall include amendments,
supplements and waivers thereto.

 

22

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SCHEDULE B

 

Members Notice Information

 

Class A Member:

 

ENERGYSOLUTIONS, LLC

423 West 300 South, Suite 200

Salt Lake City, UT  84101

Attention: R. Steve Creamer

 

Class B Member:

 

EXELON GENERATION COMPANY, LLC

4300 Winfield Road

Warrenville, Illinois 60555

Attention: Thomas O’Neill

 

B-1

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SCHEDULE C

 

Management Agreement

 

December     , 2007

 

ZionSolutions, LLC

423 West 300 South, Suite 200

Salt Lake City, UT  84101

 

Attention:  John Christian

 

Re:  Management Agreement — ZionSolutions, LLC

 

Ladies and Gentlemen:

 

For good and valuable consideration, each of the undersigned Persons, who have
been designated as Directors of ZionSolutions, LLC, a Delaware limited liability
company (the “Company”), in accordance with the Limited Liability Company
Agreement of the Company, dated as of December     , 2007, as it may be amended
or restated from time to time (the “LLC Agreement”), hereby agrees as follows:

 

1.                                       Each of the undersigned accepts such
Person’s rights and authority as a Director under the LLC Agreement and agrees
to perform and discharge such Person’s duties and obligations as a Director
under the LLC Agreement, and further agrees that such rights, authorities,
duties and obligations under the LLC Agreement shall continue until such
Person’s successor as a Director is designated or until such Person’s
resignation or removal as a Director in accordance with the LLC Agreement.  Each
of the undersigned agrees and acknowledges that he or she has been designated as
a “manager” of the Company within the meaning of the Delaware Limited Liability
Company Act.

 

2.                                       So long as any Obligation is
outstanding, each of the undersigned agrees, solely in its capacity as a
creditor of the Company on account of any indemnification or other payment owing
to the undersigned by the Company, not to acquiesce, petition or otherwise
invoke or cause the Company to invoke the process of any court or governmental
authority for the purpose of commencing or sustaining a case against the Company
under any federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Company or any substantial part of the property of the
Company, or ordering the winding up or liquidation of the affairs of the
Company.

 

3.                                       THIS MANAGEMENT AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.

 

4.                                       Initially capitalized terms used and
not otherwise defined herein have the meanings set forth in the LLC Agreement.

 

C-1

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5.                                       This Management Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the undersigned have executed this Management Agreement as
of the day and year first above written.

 

 

 

 

R Steve Creamer

 

 

 

 

 

Philip O. Strawbridge

 

 

 

 

 

Val J. Christensen

 

C-2

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SCHEDULE D

 

Directors

 

1.               R Steve Creamer

 

2.               Philip O. Strawbridge

 

3.               Val J. Christensen

 

4.               [                                    ]

 

D-1

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AMENDMENT TO ASSET SALE AGREEMENT

        This AMENDMENT TO ASSET SALE AGREEMENT (the "Amendment") is entered into
as of August 17, 2009, by and among EXELON GENERATION COMPANY, LLC, a
Pennsylvania limited liability company ("Seller"), ZIONSOLUTIONS, LLC, a
Delaware limited liability company ("Buyer"), ENERGYSOLUTIONS, LLC, a Utah
limited liability company ("Buyer's Parent"), and ENERGYSOLUTIONS, INC. a
Delaware corporation ("Guarantor"). Seller, Buyer, Buyer's Parent and Guarantor
are referred to individually as a "Party" and collectively as the "Parties."

RECITALS

        WHEREAS, the Parties have entered into that Asset Sale Agreement, dated
as of December 11, 2007 (the "Asset Sale Agreement") by and among Seller, Buyer,
Buyer's Parent, and Guarantor, pursuant to which Seller agreed, subject to the
terms and conditions of the Asset Sale Agreement, to, among other things, sell,
assign, convey, transfer and deliver all of its right, title and interest to the
Zion Assets (as defined in the Asset Sale Agreement) to Buyer;

        WHEREAS, Buyer's Parent has entered into that Performance Guaranty,
dated as of December 11, 2007 (the "Performance Guaranty") pursuant to which
Buyer's Parent has guaranteed, when due, all obligations of Buyer under the
Asset Sale Agreement and other agreements described in the Performance Guaranty;

        WHEREAS, Guarantor has entered into that Guaranty, dated as of
December 11, 2007 (the "Guaranty"): pursuant to which Guarantor has guaranteed,
when due, all obligations of Buyer under the Asset Sale Agreement and other
agreements described in the Guaranty, and all obligations of Buyer's Parent
under the Asset Sale Agreement and other agreements described in the Performance
Guaranty;

        WHEREAS, as a result of the recent financial crisis that is impacting
the U.S. and world markets the Parties desire that the Asset Sale Agreement be
amended to postpone the Closing (as defined in the Asset Sale Agreement) until
after the financial markets stabilize and the Parties reaffirm that there is
sufficient value in the decommissioning trust funds;

        NOW, THEREFORE, in consideration of the mutual promises and agreements
hereinafter set forth, and intending to be legally bound hereby, the Parties
agree as follows:

        1.     Section 3.1 of the Asset Sale Agreement is deleted in its
entirety and replaced with the following:

        "3.1.    Closing.    

        3.1.1.  'The sale, assignment, conveyance, transfer and delivery of the
Zion Assets to Buyer, the payment of the Purchase Price to Seller, and the
consummation of the other respective obligations of the Parties contemplated by
this Agreement shall take place at a closing (the "Closing"), to be held at a
time and location determined as provided in , this Section 3.1, following the
date on which the last of the conditions precedent to Closing set forth in
Article 7 have been either satisfied or waived by the respective Parties for
whose benefit such conditions precedent exist (except with respect to those
conditions which by their terms are to be satisfied at Closing), but in any
event not after the Termination Date or the earlier termination of this
Agreement pursuant to Section 9.1.4. If at any time following the date on which
the last of the conditions precedent to Closing set forth in Article 7 have been
either satisfied or waived by the respective Parties for whose benefit such
conditions precedent exist (except with respect to those conditions which by
their terms are to be satisfied at Closing) and prior to the Termination Date or
the earlier termination of this Agreement pursuant to Section 9.1.4, Buyer
desires to consummate the transactions contemplated by this Agreement, Buyer
shall give written notice (the "Buyer Closing Notice") to Seller. The Buyer
Closing Notice shall specify the date on which Buyer desires that the Closing
shall occur and shall be given to Seller not less than sixty (60).days prior to
such proposed date of Closing.

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        3.1.2.  Simultaneously with delivery of the Buyer Closing Notice, Buyer
will deliver to Seller the Original Project Budget required by Section 6.21.1
showing Buyer's best estimates of project costs and expenses, including
contingency reserves, in order to achieve the Site Restoration Milestones, the
Target Completion Date, and End State Conditions according to the schedule for
the Decommissioning and other work contemplated by the Lease Agreement, without
giving effect to any potential extension of the schedule for such work by reason
of conditions of Force Majeure or Schedule Extension Conditions. The Original
Project Budget shall show that Costs to Completion do not exceed the Projected
NDT Value and shall demonstrate to the satisfaction of Seller an allocation of
budget resources sufficient for License Termination and Spent Fuel Management.

        3.1.3.  Simultaneously with or prior to the delivery of the" Buyer
Closing Notice and the Original Project Budget, (a) Buyer will deliver to Seller
the latest available financial reports of Buyer's Parent described in
Sections 6.2.2.1 and 6.2.2.2 and (b) Buyer will disclose the details of Buyer's
arrangements to satisfy the condition to Closing set forth in Section 7.2.12.

        3.1.4.  If, following receipt of the Buyer Closing Notice and the
Original Project Budget, Seller desires to defer the Closing to a later date
(whether or not "such date is specified by Seller) or if Seller declines to
consummate the transactions contemplated by this Agreement, Seller shall give
written notice (the "Seller Decline Notice") to Buyer within thirty (30) days
following receipt of the Buyer Closing Notice and the Original Project Budget.
The delivery of a Seller Decline Notice shall not preclude a subsequent delivery
of another Buyer Closing Notice and the related required deliveries.

        3.1.5.  As promptly as reasonably practicable following receipt of the
Buyer Closing Notice and the Original Project Budget, unless and until Seller
has given the Seller Decline Notice, Seller will provide Buyer, and Buyer will
provide Seller, with any and all revisions, modifications and updates to the
Schedules that may be required so that the representations and warranties of
Seller in Article 4, the Seller Letter, and the related Schedules and the
representations and warranties of Buyer in Article 5, the Buyer Letter, and the
related Schedules are true and correct in all material respects, and such
revisions, modifications and updates will be deemed to be automatically
incorporated into the appropriate Schedules. The representations and warranties
of Seller in Article 4 and the representations and warranties of Buyer in
Article 5 shall be deemed made only as of the Closing Date.

        3.1.6.  Unless and until this Agreement is terminated, Seller will
continue to afford Buyer limited site access and a reasonable opportunity to
identify and evaluate the Zion Assets and the Assumed Liabilities; provided,
however, that (a) any such access or activity shall be conducted in such a
manner as not to interfere unreasonably with the ownership, use or management of
the Zion Assets or other activities of Seller at the Zion Station Site;
(b) Seller shall not be required to take any action which would constitute a
waiver of the attorney-client privilege; and (c) Seller need not supply Buyer
with any information that Seller is legally or contractually-prohibited from
supplying.

        3.1.7.  If either Buyer or Seller, in its sole discretion, is not
satisfied with the updated representations and warranties and related Schedules
of the other Party, the condition of the Zion Assets and the Assumed
Liabilities, or the Original Project Budget, either Buyer or Seller may
terminate this Agreement by giving written notice to the other Parties. Such
termination shall be without liability of any Party to any other Party. If
neither Buyer nor Seller exercises its right to terminate this Agreement, the
Closing shall take place at such time and place as Buyer and Seller shall
establish by mutual written agreement. The date of Closing is herein called the
"Closing Date." The Closing shall be effective for all purposes as of 12:01 a.m.
on the Closing Date."

2

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        2.     The covenants of Seller in Section 6.1.1 and the covenants of
Buyer in Sections 6.2.2.1 and 6.2.2.2 shall be suspended and be of no force or
effect until the date on which Buyer and Seller reach mutual agreement on the
proposed date for Closing and shall be effective thereafter until the Closing
Date. No failure to comply with any of the covenants in Section 6.1.1 or
Section 6.2.2.1 or 6.2.2.2 prior to the date on which Buyer and Seller reach
mutual agreement on the proposed Closing Date will constitute willful violation
of this Agreement or other actions for which Seller would be liable to Buyer, or
for which Buyer would be liable to Seller, for breach of contract.

        3.     Section 9.1.4 of the Asset Sale Agreement is deleted in its
entirety and replaced with the following:

"By Seller effective at any time after December 11, 2010, if Closing has not
occurred by such date, by giving sixty (60) days advance written notice to
Buyer;"

        4.     Section 9.1.5 of the Asset Sale Agreement is deleted in its
entirety and replaced with the following:

"By Seller or Buyer if Closing does not occur within four (4) years following
the date of this Agreement (the "Termination Date");"

        5.     Except as amended and modified by this Agreement, the Asset Sale
Agreement and the Ancillary Agreements (as defined in the Asset Sale Agreement)
remain in full force and effect in accordance with their terms.

        6.     This Agreement will be governed by, and interpreted, construed
and enforced in accordance with, the laws of the State of Illinois.

        7.     This Agreement may be executed in one or more counterparts, which
shall together constitute a valid and binding agreement.

3

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        IN WITNESS WHEREOF, the Parties have caused this Amendment to be signed'
by their respective duly authorized officers as of the date first above written.

    EXELON GENERATION COMPANY, LLC
 
 
By:
 
/s/ THOMAS S. O'NEILL

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    Name:   THOMAS S. O'NEILL     Title:   SVP Development

    ZIONSOLUTIONS, LLC
 
 
By:
 
/s/ JOHN A. CHRISTIAN

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    Name:   JOHN A. CHRISTIAN     Title:   President

    ENERGYSOLUTIONS, LLC
 
 
By:
 
/s/ R. STEVE CREAMER

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    Name:   R. STEVE CREAMER     Title:   Chief Executive Officer

    ENERGYSOLUTIONS, INC.
 
 
By:
 
/s/ R. STEVE CREAMER

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    Name:   R. STEVE CREAMER     Title:   Chief Executive Officer

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AMENDMENT TO ASSET SALE AGREEMENT
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