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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


 

















 


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

  



 


i

















 


	
   

  	
  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

  



 


ii

















 


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

  



 


iii

















 


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.


 

















 


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.


 


2

















 


(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.


 


3

















 


(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.


 


4

















 


(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.


 


5






 










 


(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


 


6

















 


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.


 


7

















 


(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,” 


 


8

















 


“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

















 


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.


 


10

















 


(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

















 


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 


 


12

















 


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

















 


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.


 


14

















 


(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.


 


15






 










 


(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

















 


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.


 


17

















 


(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.


 


18

















 


(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 


 


19

















 


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;


 


20

















 


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;


 


21

















 


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;


 


22

















 


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, 


 


23

















 


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 


 


24

















 


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


 


25

















 


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;


 


26






 










 


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 


 


27

















 


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 


 


28

















 


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”).


 


29

















 


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 


 


30

















 


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 


 


31

















 


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;


 


32

















 


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 


 


33

















 


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 


 


34

















 


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 


 


35

















 


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 


 


36

















 


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


 


37














 


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 


 


38

















 


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.


 


39

















 


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 


 


40

















 


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.


 


41

















 


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 


 


42

















 


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 


 


43

















 


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 


 


44

















 


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 


 


45

















 


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;


 


46

















 


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


 


47














 


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;


 


48

















 


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 


 


49

















 


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 


 


50

















 


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.


 


51

















 


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 


 


52

















 


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 


 


53

















 


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,



 


54

















 


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 


 


55

















 


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 


 


56

















 


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 


 


57

















 


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 


 


65

















 


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 


 


75

















 


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 


 


76

















 


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 


 


77

















 


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.


 


78














 


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):


 


79

















 


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


 


80

















 


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.


 


81

















 


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 


 


82

















 


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.


 


83

















 


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

  



 


84

















 


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:

  



 

















 


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)


 

















 


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

  	
   

  



 


i

















 


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.


 


1

















 


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


 


2

















 


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

















 


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


 


4

















 


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.


 


5

















 


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 


 


6

















 


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.


 


7

















 


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.


 


8

















 


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


 


9














 


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 


 


10

















 


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.


 


11

















 


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 


 


15

















 


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


 


16

















 


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 


 


17

















 


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 


 


18

















 


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


 


19














 


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, 


 


21

















 


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.


 


22

















 


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

















 


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

















 


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

















 


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

















 


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














 


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

















 


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

















 


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

















 


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

















 


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

















 


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 1⁄2 OF THE SOUTHEAST 1⁄4 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 1⁄4 THENCE EAST
ALONG THE NORTH LINE OF SAID SOUTHWEST 1⁄4 TO THE EAST LINE SAID WEST 1⁄2, 1323.11
FEET; THENCE SOUTH ALONG THE EAST LINE OF SAID WEST 1⁄2, 1111.83 FEET; THENCE
WEST TO THE WEST LINE OF SAID SOUTHEAST 1⁄4 TO A POINT 1112.06 FEET SOUTH OF THE
NORTHWEST CORNER OF SAID SOUTHEAST 1⁄4; THENCE NORTH ALONG THE WEST LINE OF SAID
SOUTHEAST 1⁄4 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

















 


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 1⁄2 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






 










 


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





















 


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





















 


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





















 


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










 










 


EXHIBIT
D


 


 


PUT
OPTION AGREEMENT


 


 


BY
AND BETWEEN


 


EXELON
GENERATION COMPANY, LLC


 


AND


 


ZIONSOLUTIONS,
LLC


 


 


            
          , 200  


 

















 


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

  
				



 

















 


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

















 


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.


 


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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 


 


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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

















 


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

















 


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

















 


(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














 


(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

















 


(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

















 


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

















 


(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.


 


12

















 


(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

















 


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;


 


14

















 


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.


 


15

















 


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;


 


16

















 


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 


 


17

















 


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;


 


18














 


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 


 


19

















 


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.


 


20

















 


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 


 


21

















 


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


 


22

















 


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;


 


23

















 


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;


 


24

















 


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 


 


25

















 


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 


 


26

















 


(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 


 


27

















 


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


 


28














 


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;


 


29

















 


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 


 


30

















 


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

















 


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

















 


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

















 


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

















 


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














 


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

  	
   

  	
   

  
							



 

















 


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:


 


1

















 


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;


 


2

















 


(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).


 


3

















 


(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.


 


4

















 


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

















 


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.


 


6

















 


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


 


7














 


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


 


8

















 


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.


 


9

















 


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

















 


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

















 


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

















 


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

















 


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

















 


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

















 


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

















 


SCHEDULE  3.2 to


Pledge Agreement


 


LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE


 


	
  Pledgor

  	
   

  	
  Jurisdiction

  	
   

  	
  Location

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EnergySolutions,
  LLC

  	
   

  	
  Utah

  	
   

  	
  [                    ]

  



 


17














 


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  


 

















 


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

















 


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

















 


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

















 


(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

















 


(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

















 


(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

















 


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

















 


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

















 


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














 


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

















 


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

















 


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

















 


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

















 


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

















 


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

















 


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

















 


	
   

  	
  ENERGYSOLUTIONS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ENERGYSOLUTIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  



 


16














 


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

















 


(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

















 


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

















 


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

















 


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

















 


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

















 


[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

















 


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

















 


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

















 


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














 


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 


 

















 


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

















 


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

















 


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

















 


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

















 


	
  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

















 


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

















 


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














 





 


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 


 

















 


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

















 


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

















 


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

















 


(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

















 


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

















 


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

















 


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

















 


(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

















 


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.


 


10














 


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

















 


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.


 


12

















 


	
  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.  


 


13

















 


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:

  



 


14

















 


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.


 


15

















 


(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

















 


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.


 


17

















 


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

















 


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”.


 


19

















 


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:

  	
   

  



 


20














 


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.


 


21

















 


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.


 


22

















 


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


 


23

















 


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

















 


	
   

  	
   

  	
  (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

















 


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

















 


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

















 


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














 


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

















 


(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

















 


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

















 


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

















 


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

















 


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

















 


SCHEDULE
1


 


10






 










 


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

  	
   

  	
   

  



 

















 


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).


 

















 


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 1⁄2 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 1⁄2 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 1⁄2 OF SAID FRACTIONAL SECTION 23 AND RUNNING THENCE EAST ALONG
THE SOUTH LINE OF SAID NORTH 1⁄2 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 1⁄2 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 1⁄2 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 1⁄2 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 1⁄2 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 1⁄2 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 1⁄2 OF SECTION 22
AND IN THE NORTH 1⁄2 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 1⁄2 OF FRACTIONAL SECTION 23, AT A POINT WHICH
IS 696 FEET, MEASURED ALONG SAID SOUTH LINE, EAST FROM THE WEST LINE OF SAID
NORTH 1⁄2 OF FRACTIONAL SECTION 23; AND RUNNING THENCE SOUTH ALONG THE EAST
LINE OF THE WEST 696 FEET OF SAID NORTH 1⁄2 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 1⁄2 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 1⁄2 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 1⁄2 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 1⁄2 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 1⁄2 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 1⁄2 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.


 

















 


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.


 

















 


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.


 

















 


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]


 

















 


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]


 














 


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.


 

















 


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 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.


 

















 


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 


 

















 


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.


 

















 


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]


 

















 


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]


 














 


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.


 

















 


(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

















 


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

















 


(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

















 


(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

















 


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

















 


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

















 


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

















 


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














 


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

















 


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





















 


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





















 


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





















 


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





















 


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

















 


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

















 


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














 


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

















 


“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

















 


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.  


 


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References to any agreement,
contract or instrument shall include amendments, supplements and waivers
thereto.


 


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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

















 


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

















 


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

















 


SCHEDULE D


 


Directors


 


1.               R Steve Creamer


 


2.               Philip O. Strawbridge


 


3.               Val J. Christensen


 


4.               [                                    ]


 


D-1




















































 
    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. 








 

        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







 

        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







 

        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







 
	 	 	Name:	 	THOMAS S. O'NEILL
	 	 	Title:	 	 SVP Development




 


 






 



					
	 	 	ZIONSOLUTIONS, 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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AMENDMENT TO ASSET SALE AGREEMENT

RECITALS