Document:

Ex-10.10 Participation Agreement

 

Exhibit 10.10

This Participation Agreement has been filed to provide investors with information regarding its
terms. It is not intended to provide any other factual information about the Tennessee Valley
Authority. The representations and warranties of the parties in this Participation Agreement were
made to, and solely for the benefit of, the other parties to this Participation Agreement. The
assertions embodied in the representations and warranties may be qualified by information included
in schedules, exhibits or other materials exchanged by the parties that may modify or create
exceptions to the representations and warranties. Accordingly, investors should not rely on the
representations and warranties as characterizations of the actual state of facts at the time they
were made or otherwise.

 

 

FINAL

 

PARTICIPATION
AGREEMENT (A1)

Dated as of September 22, 2003

among

TENNESSEE VALLEY AUTHORITY,

NVG NETWORK I STATUTORY TRUST,

WELLS FARGO DELAWARE TRUST COMPANY,

not in its individual capacity, except

to the extent expressly provided herein, but

as Owner Trustee

WACHOVIA MORTGAGE CORPORATION,

WILMINGTON TRUST COMPANY,

not in its individual capacity, except to the extent expressly provided herein, but

as Lease Indenture Trustee

and

WILMINGTON TRUST COMPANY,

not in its individual capacity, except to the extent expressly provided herein, but

as Pass Through Trustee

Lease of Control,Monitoring And Data Analysis Network

 

 

 

TABLE OF CONTENTS

	 	 	 
	 	 	Page
	SECTION 1. DEFINITIONS; INTERPRETATION OF THIS PARTICIPATION AGREEMENT
	 	2
	 
	 	 
	SECTION 2. PARTICIPATION; CLOSING DATE; TRANSACTION COSTS
	 	2
	 
	 	 
	Section 2.1 Agreements to Participate
	 	2
	 
	 	 
	Section 2.2 Closing Date; Procedure for Participation
	 	3
	 
	 	 
	Section 2.3 Postponement of Closing; Investment of Funds
	 	4
	 
	 	 
	Section 2.4 Transaction Costs
	 	5
	 
	 	 
	SECTION 3. REPRESENTATIONS AND WARRANTIES
	 	5
	 
	 	 
	Section 3.1 Representations and Warranties of TVA
	 	5
	 
	 	 
	Section 3.2 Representations and Warranties of the Owner Lessor
	 	10
	 
	 	 
	Section 3 .3 Representations and Warranties of the Owner Trustee and the Trust Company
	 	11
	 
	 	 
	Section 3.4 Representations and Warranties of the Owner Participant
	 	13
	 
	 	 
	SECTION 4. CLOSING CONDITIONS; CONDITIONS TO PURCHASE OF LESSOR NOTE
	 	14
	 
	 	 
	SECTION 5. COVENANTS OF TVA
	 	18
	 
	 	 
	Section 5.1 Delivery of Financial Statements; No Default Certificate; Information Concerning the Network
	 	18
	 
	 	 
	Section 5.2 Residual Value Insurance
	 	19
	 
	 	 
	Section 5.3 Further Assurances
	 	19
	 
	 	 
	SECTION 6. COVENANTS OF THE TRUST COMPANY, THE OWNER TRUSTEE AND THE OWNER LESSOR
	 	20
	 
	 	 
	Section 6.1 Compliance with the Trust Agreement
	 	20
	 
	 	 
	Section 6.2 Owner Lessor’s Liens
	 	20
	 
	 	 
	Section 6.3 Amendments to Operative Documents
	 	20
	 
	 	 
	Section 6.4 Transfer of the Owner Lessor’s Interest
	 	21
	 
	 	 
	Section 6.5 Owner Lessor; Lessor Estate
	 	21
	 
	 	 
	Section 6.6 Limitation on Indebtedness and Actions
	 	21
	 
	 	 
	Section 6.7 Change of Location
	 	21
	 
	 	 
	Section 6.8 Exercise of Right to Redeem Lessor Note
	 	21
	 
	 	 
	Section 6.9 Escrowed Software
	 	21
	 
	 	 
	SECTION 7. COVENANTS OF THE OWNER PARTICIPANT
	 	22
	 
	 	 
	Section 7.1 Restrictions on Transfer of Beneficial Interest
	 	22

-i-

 

TABLE OF CONTENTS
(Continued)

	 	 	 
	 	 	Page
	Section 7.2 Owner Participant’s Liens
	 	25
	 
	 	 
	Section 7.3 Amendments or Revocation of Trust Agreement
	 	25
	 
	 	 
	Section 7.4 Bankruptcy Filings
	 	26
	 
	 	 
	Section 7.5 Actions
	 	26
	 
	 	 
	Section 7.6 Appointment of Successor Trustee
	 	26
	 
	 	 
	Section 7.7 Management of Owner Lessor
	 	26
	 
	 	 
	SECTION 8. COVENANTS OF THE LEASE INDENTURE TRUSTEE
	 	26
	 
	 	 
	SECTION 9. TVA’S INDEMNIFICATIONS
	 	26
	 
	 	 
	Section 9.1 General Indemnity
	 	26
	 
	 	 
	Section 9.2 General Tax Indemnity
	 	31
	 
	 	 
	SECTION 10. TVA’S RIGHT OF QUIET ENJOYMENT
	 	41
	 
	 	 
	SECTION 11. REFINANCINGS
	 	42
	 
	 	 
	Section 11.1 Optional Refinancing of Lease Debt
	 	42
	 
	 	 
	Section 11 .2 Mandatory Sale of Lessor Notes or Issuance of Additional Lessor Notes on Early Purchase Date
	 	42
	 
	 	 
	Section 11.3 Cooperation
	 	43
	 
	 	 
	SECTION 12. PRE-CLOSING ADJUSTMENTS TO LEASE SCHEDULES
	 	43
	 
	 	 
	Section 12.1 Lease Schedules
	 	43
	 
	 	 
	Section 12.2 Pre-closing Adjustments
	 	43
	 
	 	 
	SECTION 13. SPECIAL LESSEE TRANSFERS
	 	44
	 
	 	 
	SECTION 14. RIGHT OF FIRST OFFER
	 	45
	 
	 	 
	SECTION 15. MISCELLANEOUS
	 	45
	 
	 	 
	Section 15.1 Consents
	 	45
	 
	 	 
	Section 15.2 Successor Owner Trustee
	 	46
	 
	 	 
	Section 15.3 Bankruptcy of Lessor Estate
	 	46
	 
	 	 
	Section 15.4 Amendments and Waivers
	 	46
	 
	 	 
	Section 15.5 Notices
	 	46
	 
	 	 
	Section 15.6 Survival
	 	48
	 
	 	 
	Section 15.7 Successors and Assigns
	 	49
	 
	 	 
	Section 15.8 Business Day
	 	49
	 
	 	 
	Section 15.9 Governing Law
	 	49
	 
	 	 
	Section 15.10 Severability
	 	49

-ii-

 

TABLE OF CONTENTS
(Continued)

	 	 	 
	 	 	Page
	Section 15.11 Counterparts
	 	49
	 
	 	 
	Section 15.12 Headings and Table of Contents
	 	49
	 
	 	 
	Section 15.13 Limitation of Liability
	 	50
	 
	 	 
	Section 15.14 Waiver of Trial by Jury
	 	51
	 
	 	 
	Section 15.15 Further Assurances
	 	51
	 
	 	 
	Section 15.16 Effectiveness
	 	51
	 
	 	 
	Section 15.17 No Partnership, Etc
	 	51
	 
	 	 
	Section 15.18 Compliance with Network Lease
	 	51
	 
	 	 
	Section 15.19 Entire Agreement
	 	51

APPENDICES:

Appendix A            Definitions

SCHEDULES:

Schedule 1 Filings

Schedule 2 Initial List of Competitors

Schedule 3 Account Information and Equity Investment

Schedule 4 Maximum Tax Indemnities

EXHIBITS:

Exhibit A            Form of Head Lease

Exhibit B            Form of Network Lease

Exhibit C            Form of Lease Indenture

Exhibit D            Form of Assignment and Assumption Agreement

Exhibit E            Form of Guaranty

Exhibit F            Form of Owner Lessor Security Agreement

Exhibit G            Form of Joint Operating Agreement

-iii-

 

PARTICIPATION AGREEMENT (A1)

     This PARTICIPATION AGREEMENT (Al), dated as of September 22, 2003 (this
“Participation Agreement” or this “Agreement”), among (i) TENNESSEE VALLEY
AUTHORITY, a wholly owned corporate agency and Instrumentality of the United States
(“TVA”), (ii) NVG NETWORK. I STATUTORY TRUST, a Delaware statutory trust (herein, together
with its successors and permitted assigns, the “Owner Lessor”), (iii) WELLS FARGO DELAWARE
TRUST COMPANY, a Delaware limited purpose trust company, not in its individual capacity, except to
the extent expressly provided herein, but as trustee under the Trust Agreement (herein in its
capacity as trustee under the Trust Agreement, the “Owner Trustee.” and herein in its
individual capacity, the “Trust_Company”), (iv) WACHOVIA MORTGAGE CORPORATION, a North
Carolina corporation (the “Owner Participant”), (v) WILMINGTON TRUST COMPANY, a Delaware
banking corporation, not in its individual capacity, except to the extent expressly provided
herein, but as trustee under the Lease Indenture (herein in its capacity as trustee under the Lease
Indenture, the “Lease Indenture Trustee”), and (vi) WILMINGTON TRUST COMPANY, a Delaware
banking corporation, not in its individual capacity, except to the extent expressly provided
herein, but as trustee under the Pass Through Trust Agreement (herein in its capacity as trustee
under the Pass Through Trust Agreement, the “Pass Through Trustee”).

W I T N E S S E T H:

     WHEREAS, TVA holds title to the Network (other than with respect to certain of the Software Rights
that are part of the Network) and owns, or holds licenses to use, that portion of the Network
constituting the Software Rights;

     WHEREAS, TVA desires to (i) lease an undivided interest equal to the Owner Lessor’s
Percentage in the Network (other than the Software Rights) (such undivided interest excluding the
Software Rights herein referred to as the “Undivided Interest”), and (ii) assign, or grant a
license to use, the Software Rights, in each case to the Owner Lessor pursuant to the Head Lease;

     WHEREAS, the Owner Lessor desires to sublease the Undivided Interest and assign its interest in the
Software Rights to TVA pursuant to the Network Lease;

     WHEREAS, concurrently with the execution and delivery of this Participation Agreement, the Owner
Participant has entered into the Trust Agreement, pursuant to which the Owner Participant has
authorized the Owner Lessor to, among other things and subject to the terms and conditions thereof
and hereof, lease the Undivided Interest from TVA and hold the Software Rights pursuant to the Head
Lease, and to sublease the Undivided Interest and assign such Software Rights to TVA pursuant to
the Network Lease;

     WHEREAS, concurrently with the execution and delivery of this Participation Agreement, TVA has
entered into the Underwriting Agreement with the Initial Purchasers pursuant to which the Initial
Purchasers will purchase the Certificates on the Closing Date from the Pass Through Trust;

 

 

     WHEREAS, on the Closing Date, the Owner Lessor intends to sell to the Pass Through Trust the
Lessor Note and to grant to the Lease Indenture Trustee liens and security interests in the Owner
Lessor’s interests in the Network and certain of the Operative Documents executed in connection
therewith to secure its obligations thereunder;

     WHEREAS, concurrently with the execution and delivery of this Participation Agreement, the Pass
Through Trustee has entered into the Pass Through Trust Agreement, pursuant to which the Pass
Through Trustee has been directed to use the relevant portion of the Proceeds to purchase the
Lessor Note from the Owner Lessor on the Closing Date; and

     WHEREAS, the parties hereto desire to consummate the transactions contemplated hereby.

     NOW, THEREFORE, in consideration of the foregoing premises, the mutual agreements herein contained
and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

SECTION 1. DEFINITIONS; INTERPRETATION OF THIS PARTICIPATION AGREEMENT

     The capitalized terms used in this Participation Agreement, including the foregoing recitals, and
not otherwise defined herein shall have the respective meanings specified in Appendix A hereto. The
general provisions of Appendix A shall apply to terms used, in this Participation Agreement and
specifically defined herein.

SECTION 2. PARTICIPATION; CLOSING DATE; TRANSACTION COSTS

     Section
2.1 Agreements to
Participate.

     Subject to the terms and conditions of this Agreement, and in reliance on the agreements,
representations and warranties made herein, the parties agree to participate in the Transaction as
described in this Section 2.1 on the Closing Date as follows:

     (a) the Owner Participant agrees to provide funds in an amount sufficient to (i) fund the
Equity Investment, and (ii) pay the Transaction Costs that the Owner Lessor is responsible to pay
pursuant to Section 2.4(a) hereof (collectively, the
“Owner Participant’s Commitment”);

     (b) TVA agrees to lease the Undivided Interest and to assign the Software Rights or grant a
non-exclusive license to use the Software Rights, as applicable, to the Owner Lessor on the terms
and conditions set forth in the Head Lease attached as Exhibit A hereto; the Owner Lessor agrees to
lease the Undivided Interest from TVA and to hold such Software Rights assigned or granted to the
Owner Lessor by TVA; and each agrees to execute and deliver the Head Lease substantially in such
form;

     (c) the Owner Lessor agrees to lease the Undivided Interest and to assign the Software
Rights to TVA on the terms and conditions set forth in the Network Lease attached as Exhibit B
hereto; TVA agrees to lease the Undivided Interest from the Owner Lessor and to hold

2

 

the Software Rights assigned by the Owner Lessor; and each agrees to execute and deliver the
Network Lease substantially in such form;

     (d) the Lease Indenture Trustee agrees to enter into and act as the trustee under a Lease
Indenture substantially in the form of Exhibit C hereto pursuant to which the Lessor Note will be
issued;

     (e) the Owner Lessor agrees to sell to the Pass Through Trust the Lessor Note and to grant to
the Lease Indenture Trustee liens and security interests in the Owner Lessor’s interests in the
Undivided Interest and the Software Rights and certain of the Operative Documents executed in
connection therewith to secure its obligations thereunder as provided in the Lease Indenture, and
to enter into the Lease Indenture referred to in clause (d) of this Section 2.1;

     (f) the Pass Through Trustee agrees to use the relevant portion of the Proceeds to purchase the
Lessor Note from the Owner Lessor;

     (g) the Owner Lessor agrees to use the funds received from the Owner Participant and the Pass
Through Trust pursuant to clauses (a)(i) and (f), respectively, of this Section 2.1 to pay the Head
Lease Rent under the Head Lease (such payment to be allocated as set
forth in Section 

3.3(c) thereof);

     (h) the Owner Participant and TVA agree to enter into the Tax Indemnity Agreement in the form
previously agreed to between the Owner Participant and TVA;

     (i) the Owner Participant agrees to pay the Transaction Costs the Owner Lessor is responsible to
pay pursuant to Section 2.4(a) hereof; and

     (j) the parties agree to enter into the other Operative Documents substantially in the respective
forms attached hereto.

     Section 2.2
Closing Date; Procedure for Participation.

     (a) Closing Date, The closing of the Transaction (the “Closing”) shall
take place after 10:00 a.m., New York City time, on the Scheduled Closing Date, or such other date
as the parties hereto shall mutually agree (the “Closing Date”). The Closing shall take
place at the offices of Orrick, Herrington & Sutcliffe LLP, 666 Fifth Avenue, New York, New York
10103.

     (b) Procedures for Funding. Unless the Closing Date shall have been postponed
pursuant to Section 2.3 (a), subject to the terms and conditions of this Participation Agreement,
the Owner Participant shall make the Owner Participant’s Commitment available not later than 10:00
a.m., New York City time, on the Scheduled Closing Date, by transferring or delivering such amount,
in funds immediately available on such Closing Date, to the Owner Participant’s account with the
Trust Company.

     (c) Expiration
of Commitments. The obligation of the Owner Participant to make its
Equity Investment shall expire at 11:59 p.m., New York City time, on November 1, 2003. If the
Closing Date has not occurred on or before November 1, 2003, the Transaction Parties shall have

3

 

no obligation to consummate the Transaction and, except as provided in Sections 2.4, 9.1 and
9.2, all obligations of the Transaction Parties shall cease and terminate.

     Section 2.3 Postponement of Closing; Investment of Funds.

     (a) Postponement of Closing. The Closing may be postponed from time to time
for any reason if TVA gives the Owner Participant a facsimile or telephonic (confirmed in writing)
notice of such postponement and notice of the date to which the Closing has been postponed, such
notice of postponement to be received by the Owner Participant no later than 10:00 a.m., New York
City time, on the date the Closing was scheduled to occur. TVA will promptly give notice of such
postponement to the Owner Lessor, the Owner Trustee, the Lease Indenture Trustee and the Pass
Through Trustee. If, prior to receipt of a postponement notice under this Section 2.3(a), the
Owner Participant shall have provided funds in accordance with Section 2.2(b), such
funds shall be returned to the Owner Participant, as soon as reasonably practicable but
in no event later than the Business Day following the date of such notice, unless the Owner
Participant shall have otherwise directed. All funds made available pursuant to Section 2.2(b)
will be held by the Trust Company in trust for the Owner Participant and shall not be part of the
Indenture Estate or the Lessor Estate, shall be invested by the Trust Company in accordance with
clause (b) below and shall remain the sole property of the Owner Participant unless and until (i)
released by the Owner Participant and made available to the Owner Lessor and applied by the Owner
Lessor to pay the Head Lease Rent and the Transaction Costs, or (ii) returned to the Owner
Participant, as provided in this Section 2.3(a).

     (b) Investment of Funds. If the Owner Participant has made the Owner
Participant’s Commitment available to the Trust Company in accordance with Section 2.2(b), the
Closing does not occur on the date such funds were required to be deposited, and the Trust Company
is unable to return such funds to the Owner Participant on such date, the Trust Company shall,
subject to Section 2.3(a) above, use reasonable efforts to invest such funds from time to time at
the written direction of TVA and at TVA’s sole expense and risk, in Permitted Instruments until
such funds can be returned to the Owner Participant. If on the date the Owner Participant’s
Commitment was required to be deposited, the Owner Participant has made the Owner Participant’s
Commitment available to the Trust Company in accordance with Section 2.2(b), the Closing does not
occur on such date, and the Trust Company has not returned such funds to the Owner Participant on
or before 2:00 p.m, New York City time, on such date, then TVA shall reimburse the Owner
Participant for loss of the use of such funds at the Applicable Rate for each day, from and
including the day that such funds were made
available to the Trust Company by the Owner Participant to, but excluding the earlier of (i) the
day that such funds have been returned to the Owner Participant
pursuant to Section 2.3(a) (funds
received by the Owner Participant after 2:00 p.m., New York City time, on any day shall be deemed to
be returned on the next succeeding Business Day) and (ii) ‘the Closing Date. Subject to payment for
the account of the Owner Participant of any reimbursement for loss of use of funds due to it at the
Applicable Rate, any net gain realized on the investment of such funds (including interest) shall
be paid to TVA by the Trust Company on the earlier of (i) the date such funds are returned to the
Owner Participant pursuant to Section 2.3(a) and (ii) the Closing Date. The Trust Company shall not
be liable for any interest on or loss resulting from such investments and, if such funds are made
available to the Owner Lessor and utilized to pay the Head Lease Rent or Transaction Costs on the
Closing Date, TVA shall reimburse the Trust Company for any net loss realized on the

4

 

investment of
such funds. If such funds are not so utilized, TVA shall, in addition to its obligation to
reimburse the Owner Participant for loss of use as provided above, reimburse the Owner Participant
on the date such funds are returned to the Owner Participant for any net loss realized on the
investment of such funds. In order to obtain funds for payment of the Head Lease Rent or
Transaction Costs or to return funds made available to the Owner Lessor by the Owner Participant,
the Trust Company is authorized to sell any investments or obligations purchased as aforesaid.

     Section 2.4 Transaction Costs.

     (a) If the Transaction is consummated, Transaction Costs incurred on or prior to the Closing
Date and substantiated or otherwise supported in reasonable detail to TVA shall be paid on the
Closing Date by the Owner Lessor (with funds provided by the Owner Participant); provided, however,
that the Owner Lessor shall not be obligated to pay (and the Owner Participant shall not be
obligated to fund) more than $1,650,000 of Transaction Costs in the aggregate (the “Owner
Participant Transaction Expenses”). If the Transaction Costs exceed such amount, the Owner
Participant will specify in writing to TVA which Transaction Costs it elects to include in the
Owner Participant Transaction Expenses and TVA will be liable for all other Transaction Costs
substantiated or supported as provided above. All other fees, costs and expenses incurred by
TVA, the Owner Lessor and the Owner Participant shall be for such party’s respective account
whether or not the Transaction is consummated. If the Transaction is not consummated for any
reason (including as a result of TVA’s election pursuant to Section 12.2), TVA shall bear all
Transaction Costs that are substantiated or otherwise supported in reasonable detail; provided,
however, that TVA shall not be obligated to pay Transaction Costs incurred by any Transaction Party
if such party failed to consummate the Transaction on the basis of the provisions of this
Agreement.

     (b) Following the Closing, TVA will be responsible for, and will pay as Supplemental Lease
Rent on an After-Tax Basis the annual administration fees, if any, and related expenses (including
reasonable fees and expenses of its outside counsel) of the Owner Trustee, the Lease Indenture
Trustee and the Pass Through Trustee.

SECTION 3. REPRESENTATIONS AND WARRANTIES

     Sections 3.1 Representations and Warranties of TVA. TVA represents and warrants
that, as of the Effective Date:

     (a) Legal Status. It is an instrumentality and agency of the Government duly created and
validly existing under the provisions of the TVA Act and has full power and authority to enter into
and perform its obligations under this Agreement and each of the other Operative Documents to which
it is or will be a party. TVA’s status as an instrumentality and agency of the Government can be
changed only by an act of the United States Congress.

     (b) Due
Authorization; Enforceability. Etc. This Agreement and each of the other
Operative Documents to which TVA is or will be a party have been, or when executed and delivered
will be, duly authorized, executed and delivered by all necessary corporate action by TVA, and,
assuming the due authorization, execution and delivery by each other party thereto,

5

 

this Agreement
constitutes and, when executed and delivered, the other Operative Documents to which TVA is or will
be a party constitute or will constitute the legal, valid and binding obligations of TVA,
enforceable against it in accordance with their respective terms.

     (c) Non-Contravention. The execution, delivery and performance by TVA of this
Agreement and each of the other Operative Documents to which it is or will be a party, the
consummation by TVA of the transactions contemplated hereby
and thereby, and compliance by TVA with the terms and provisions hereof and thereof, do not and
will not (i) contravene the TVA Act or any other Applicable Law binding on TVA or its property, or
(ii) constitute a default by TVA under, or result in the creation of any Lien upon the property of
TVA (other than as permitted pursuant to any Operative Document) under, or require any approval or
consent of, or notice to, any holder of any indebtedness of TVA under, the Bond Resolution, the
Subordinated Resolution or any other material contract, agreement or instrument to which TVA is a
party or by which TVA or any of its property is bound.

     (d) Government Actions. No authorization, determination or approval or other action
by, and no notice to or filing or registration with, any Governmental Entity or under any
Applicable Law is required for the due execution, delivery or performance by TVA of this Agreement
and the other Operative Documents to which TVA is or will be a party.

     (e) Litigation. There is no pending or, to the Actual Knowledge of TVA, threatened,
action, suit, investigation or proceeding against TVA before any Governmental Entity
questioning the validity of the Operative Documents or the performance by TVA of its obligations
under this Agreement or any other Operative Document or relating to the use, maintenance or
operation of the Network.

     (f) Location. TVA has the right to locate each material Component of the Network on, and to
access, and to disassemble and remove, each material Component of the Network from, each parcel of
real property or building where any Component of the Network is located. The Components of the
Network constitute personal property under the law of the respective State in which they are
located. The remedies provided in Section 18 of the Network Lease are effective to provide the
Owner Lessor with sufficient rights to recover possession of the Undivided Interest and to recover
the Software Rights upon the occurrence of a Lease Event of Default.

(g)
Title; Liens; Etc.

     (i) TVA has good and valid title to the Undivided Interest, and good and valid title to or a valid
license of, the Software Rights, in each case free and clear of all Liens other than Permitted
Closing Date Liens, TVA has paid all amounts due and owing under the Software Licenses.

     (ii) Upon execution and delivery of the Head Lease by TVA and (a) assuming due authorization,
execution and delivery of the Head Lease by the Owner Lessor, and (b) assuming due authorization,
execution and delivery of the Software License Consents and the effectiveness thereof, the Owner
Lessor’s Interest under the Head Lease shall have been duly and validly created in favor of the
Owner Lessor and shall have been duly

6

 

and
validly transferred to the Owner Lessor and the Owner Lessor shall be the leasehold
owner of the Undivided Interest and the valid holder of the Software Rights, in each case, free and
clear of all Liens other than Permitted Liens; and, subject to the provisions of the Software
Licenses and the Software License Consents, the Owner Lessor shall be able to transfer, sell or
lease the Software Rights to any Person to whom the Undivided Interest is sold, transferred or
leased pursuant to the provisions of any of the Operative Documents (including the Lease Indenture
Trustee in connection with the exercise of remedies pursuant to the Operative Documents).

     (iii) When duly authorized, executed and delivered by each of the parties thereto, the Lease
Indenture will create a valid Lien in favor of the Lease Indenture Trustee in the Indenture Estate
and no filing, recording, registration or notice with any Federal or state Governmental Entity, or
under the TVA Act, will be necessary to establish or, except for such filings as will be made
pursuant to Section 4(n), to perfect, or give record notice of, the Lien in favor of the Lease
Indenture Trustee in the Indenture Estate to the extent such Lien may be perfected by filings or
recordings. When duly authorized, executed and delivered by each of the parties thereto, and
assuming the filings will be made pursuant to Section 4(n) and that the Lease Indenture Trustee
retains possession of the original executed counterpart of the Head Lease and the Network Lease,
the Lease Indenture will create a valid and perfected Lien in favor of the Lease Indenture Trustee
in the Head Lease and the Network Lease. When duly authorized, executed and delivered by each of
the parties thereto, no filing, recording, registration or notice with any Federal or state
Governmental Entity, or under the TVA Act, will be necessary to establish or to protect the right,
title and interest of the Owner Lessor or the Lease Indenture Trustee in the Network or under the
Head Lease or the Network Lease.

     (iv) None of the Permitted Closing Date Liens will, on and after the Closing Date, materially
interfere with the use, operation or possession of the Network as contemplated by the Operative
Documents.

     (v) Attachment A to the Head Lease and Exhibit A to the Network Lease are true, accurate and
complete and, with the utilization of the Escrowed Software for purposes of determining the
location of the Network, sufficiently identifies the Network as distinguished from other assets
owned or leased by TVA for the purposes of the Head Lease and the Network Lease.

     (h) Regulation. The use by TVA of the proceeds of the Head Lease Rent will not violate or
result in a violation of Section 7 of the Exchange Act, or any regulations issued pursuant thereto,
including Regulations T, U and X of the regulations of the Federal Reserve System.

     (i) Holding Company Act and Federal Power Act. TVA is not subject to the Holding Company
Act. None of the Owner Lessor, the Owner Participant, the Trust Company, the Owner Trustee, the
Lease Indenture Trustee, or the Pass Through Trustee shall, solely by reason of the execution and
delivery of this Agreement and each of the other Operative Documents to which they are or will be
party and the consummation of the transactions contemplated hereby and thereby, be
deemed to be an “electric utility” or “public utility” as such terms are used in the

7

 

Federal
Power Act or an “electric utility company,” a “public utility company,” a “holding company,” or a
“subsidiary company” or an “affiliate” of an “electric utility company,” a “public utility
company,” or a “holding company,” as such terms are used in the Holding Company Act; provided
however, that unless an exemption under the Holding Company Act is available, the exercise of any
remedy provided for in any Operative Document that results in operation or direct or indirect
ownership by the Owner Lessor, the Owner Participant, the Trust Company, the Owner Trustee, the
Lease Indenture Trustee or the Pass Through Trustee or any Affiliate of any of them or any of their
successors or assigns, of the Network may result in regulation of the operator or any direct or
indirect owner of the Network and of its Affiliates under the Holding Company Act; provided
farther, that the exercise of any remedy provided for in any applicable Operative Document that
results in ownership or operation by the Owner Lessor, the Owner Participant, the Trust Company,
the Owner Trustee, the Lease Indenture Trustee or the Pass Through Trustee or any of their
respective successors or assigns, of the Network may result in regulation of the owner or operator
of the Network becoming subject to regulation under the Federal Power Act.

     (j) Investment Company Act. TVA is not an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

     (k) Securities Act. The offering and sale of the Certificates is exempt from the
registration requirements of Section 5 of the Securities Act. Neither TVA nor, to its knowledge,
anyone authorized by TVA, has directly or indirectly offered or sold any interest in the Beneficial
Interest, the Lessor Note, the Certificates or any part thereof, or in any similar security or
lease the offering of which for purposes of the Securities Act would be deemed to be part of the
same offering as the offering of the Beneficial Interest, the Lessor Note, or the Certificates or
any part thereof, or solicited any offer to acquire any of the same, in violation of the
registration requirements of Section 5 of the Securities Act.

     (l) Software License Consents. The grant of the rights by TVA to the Owner Lessor in the
Software Rights does not require the consent of any Person, other than the Software License
Consents.

     (m) Bankruptcy Code. TVA is not an entity that is capable of being a “debtor” as defined in
Section 101(13) or Section 109 of the Bankruptcy Code.

     (n) Applicable
Law. TVA is in compliance with all Applicable Laws relating to the
operation, maintenance, use or ownership of the Network, except where noncompliance will not have a
Material Adverse Effect or involve any danger of (i) foreclosure, sale, forfeiture or loss of, or
imposition of a material Lien on, the Network or the Undivided Interest or the impairment of the
use, operation or maintenance of the Network in any material respect,
or (ii) any criminal or
material civil liability being incurred by the Owner Participant, the Owner Lessor, the Owner
Trustee, the Lease Indenture Trustee or the Pass Through Trustee.

     (o) ERISA.
Assuming the correctness of the representations of the other parties hereto and
the correctness of the deemed representations of the Certificateholders set forth under the caption
“ERISA Considerations” in the Offering Circular, the Transaction will not constitute a non-exempt
“prohibited transaction” under ERISA.

8

 

     (p) Disclosure; No Material Omission. The Offering Circular does not contain any untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements contained therein, in light of the circumstances under which they were made, not
misleading: provided, however, that no representation is given or made with regard to (i) any
forecasts or projections included therein or omitted therefrom, or (ii) the descriptions of the
Operative Documents or the tax consequences to beneficial owners of Certificates.

     (q) No
Default; No Event of Loss. No Event of Default, or event that with the passage of
time or giving of notice or both would constitute an Event of Default, has occurred or will occur
upon or as a consequence of the execution and delivery of the
Operative Documents. No Event of Loss
of the type described in clause (a) or (b) of the definition of Event of Loss has occurred or will
occur upon the execution and delivery of the Operative Documents.

     (r) Financial Statements. The audited financial statements of TVA as of September 30, 2002,
together with the footnotes thereto, included in the Offering Circular were prepared in accordance
with GAAP, and fairly present the financial position of TVA as of such date and there has been no
material adverse change in the financial condition of TVA since such date, except as disclosed in
the Offering Circular.

     (s) Application of Net Power Proceeds. Payments of Basic Lease Rent under the Network Lease
will constitute “costs of operating, maintaining, and administering” TVA’s “power properties” as
used in the definition of “Net Power Proceeds” in
Article I of the Bond Resolution and Article I of
the Subordinated Resolution, and the Bond Resolution and the Subordinated Resolution each provides
that TVA’s “Gross Power Revenues” (as defined in the Bond Resolution and the Subordinated
Resolution) be applied to such “costs” before application to interest or principal payments on the
“Bonds” (as defined in the Bond Resolution) or other “Evidences of Indebtedness” (as defined in
each of the Bond Resolution and the Subordinated Resolution) issued pursuant to the Bond Resolution
or the Subordinated Bonds issued pursuant to the Subordinated Bond
Resolution, respectively.

     (t) Bond Resolution. Bonds as defined in and issued under the Bond Resolution and other
Evidence of Indebtedness as defined in and issued under the Bond Resolution or the Subordinated
Resolution are not subject to acceleration. The Bond Resolution and the Subordinated Resolution are
in full force and effect.

     (u) EIN.
The EIN of TVA is 62–047–4417.

     (v) Qualification to do Business. The qualification of the Owner Lessor or the Owner
Participant to do business under the laws of the states in which the Network is located, or any
political subdivision thereof, is not and will not be required solely as a consequence of the
execution and delivery of this Agreement or the other Operative Documents, the making of the Equity
Investment or, prior to expiration or termination of the Network Lease, the performance by the
Owner Lessor or the Owner Participant of its obligations under this Agreement or any other
Operative Document to which it is a party.

9

 

     Section 3.2 Representations and Warranties of the Owner Lessor. The Owner Lessor represents
and warrants that as of the Effective Date:

     (a) Due Organization. The Owner Lessor is a duly organized and validly existing
“statutory trust” as such term is defined in 12 Del. C. §3801(a) under the laws of the State of
Delaware of which the Owner Participant is the beneficial owner, and has the power and authority to
enter into and perform its obligations under this Agreement and each of the other Operative
Documents to which it is or will be a party.

     (b) Due Authorization; Enforceability; Etc.

     (i) (A) This Agreement and each of the other Operative Documents (other than the Lessor Note) to
which the Owner Lessor is or will be a party has been, or when executed and delivered will be, duly
authorized, executed and delivered by the Owner Lessor, and (B) assuming the due authorization,
execution and delivery of this Agreement by each party hereto other than the Owner Lessor, this
Agreement constitutes and each of the other Operative Documents (other than the Lessor Note) to
which it is or will be a party constitute or will, upon such execution and delivery, constitute the
legal, valid and binding obligations of the Owner Lessor, enforceable against the Owner Lessor in
accordance with their respective terms.

     (ii) Upon the execution of the Lessor Note by the Owner Lessor and authentication thereof by the
Lease Indenture Trustee in accordance with the Lease Indenture and delivery of such Lessor Note
against payment therefor, the Lessor Note will constitute a legal, valid and binding obligation of
the Owner Lessor, enforceable against the Owner Lessor in accordance with its terms.

     (c) Non-Contravention. The execution and delivery by the Owner Lessor of this
Agreement and the other Operative Documents to which it is or will be a party, the
consummation by the Owner Lessor of the transactions contemplated hereby and thereby, and the
compliance by the Owner Lessor with the terms and provisions hereof and thereof, do not and will
not contravene any Applicable Law of the United States of America or the State of Delaware, or the
Trust Agreement or the Owner Lessor’s other organizational documents or contravene the provisions
of, or constitute a default by the Owner Lessor under, any indenture, mortgage or other material
contract, agreement or instrument to which the Owner Lessor is a party or by which the Owner Lessor
or its property is bound, or result in the creation of any Owner Lessor’s Lien upon the Lessor
Estate; subject to the correctness of the Lessee’s representation set forth in Section 3.1(i) above
and provided, that no representation is made with respect to the right, power and authority of the
Owner Lessor to operate the Network following the termination of the Network Lease.

     (d) Governmental
Actions. No authorization or approval or other action by, and no
notice to or filing or registration with, any Governmental Entity is required for the due
execution, delivery or performance by the Owner Lessor, as the case may be, of the Trust Agreement,
the Lease Indenture, the Lessor Note, this Agreement or the other Operative Documents to which the
Owner Lessor is or will be a party, other than any such authorization or approval or other action
or notice or filing as has been duly obtained, taken or given; subject to the correctness of the

10

 

Lessee’s representations set forth in Section 3.1(i) above and provided, that no representation is
made with respect to the right, power and authority of the Owner Lessor to operate the Network
following the termination of the Network Lease.

     (e) Litigation. There is no pending or, to the Actual Knowledge of the Owner Lessor,
threatened, action, suit, investigation or proceeding against the Owner Lessor before any
Governmental Entity that questions the validity of any Operative Document.

     (f) Liens. The Owner Lessor’s right, title and interest in and to the Lessor Estate is free
of any Owner Lessor’s Liens.

     (g) Investment Company Act. The Owner Lessor is not an “investment company” or an
“affiliated person” of an “investment company” within the meaning of the Investment Company Act of
1940, as amended.

     (h) EIN.
The EIN of the Owner Lessor is 51–6538478.

     (i) Location. The location (as such term is used in Section 9-307 of the UCC) of the Owner
Lessor is Delaware and its organizational identification number is 3705686.

     Section 3.3
Representations and Warranties of the Owner Trustee and the Trust Company. The Trust
Company (only with respect to representations and warranties expressly relating to the Trust
Company) and the Owner Trustee hereby severally represent and warrant that, as of the Effective
Date:

     (a) Due Incorporation; Etc. The Trust Company is a limited purpose trust company
duly organized, validly existing and in good standing under the laws of the State of Delaware and
has the corporate power and authority, as Owner Trustee and/or in its individual capacity to the
extent expressly provided herein or in the Trust Agreement, to enter into and perform its
obligations under the Trust Agreement, this Agreement and each of the other Operative Documents to
which it is or will be a party.

     (b) Due Authorization; Enforceability; Etc.

     (i) The Trust Agreement has been duly authorized., executed and delivered by the Trust Company, and
assuming the due authorization execution and delivery of the Trust Agreement by the Owner
Participant, the Trust Agreement constitutes the legal, valid and binding obligation of the Trust
Company, enforceable against it in its individual capacity or as Owner Trustee, as the case may be,
in accordance with its terms.

     (ii) This Agreement has been duty authorized, executed and delivered by the Owner Trustee and, to
the extent expressly provided herein, the Trust Company, and assuming the due authorization,
execution and delivery of this Agreement by each party hereto other than the Owner Trustee and, to
the extent expressly provided herein, the Trust Company, this Agreement constitutes a legal, valid
and binding obligation of the Owner Trustee and, to the extent expressly provided herein, the Trust
Company, enforceable against the Owner Trustee and, to the extent expressly provided herein, the
Trust Company, as the case may be, in accordance with its terms.

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     (c) Execution.
(i) Each of the other Operative Documents to which the Trust Company
or the Owner Trustee is or will be a party has been or when executed and delivered will be duly
authorized, executed and delivered by the Trust Company or the Owner Trustee and (ii) assuming the
due authorization, execution and delivery of each of the other Operative Documents by each party
thereto other than the Trust Company or the Owner Trustee, each of the other Operative Documents to
which the Owner Trustee or, to the extent expressly provided therein, the Trust Company, is or will
be a party constitutes, or when executed and delivered will constitute, a legal valid and binding
obligation of the Owner Trustee and, to the extent expressly provided herein, the Trust Company, as
the case may be, enforceable against the Owner Trustee and, to the extent expressly provided
herein, the Trust Company, in accordance with its terms.

     (d) Non-Contravention. The execution and delivery by the Trust Company, in its
individual capacity or as Owner Trustee, as the case may be, of the Trust Agreement, this Agreement
and the other Operative Documents to which it is or will be a party, the consummation by the
Trust Company, in its individual capacity or as Owner Trustee, as the case may be, of the
transactions contemplated hereby and thereby, and the compliance by the Trust Company, in its
individual capacity or as Owner Trustee, as the case may be, with the terms and provisions hereof
and thereof, do not and will not (i) contravene any Applicable Law of the State of Delaware
governing the Trust Company or any United States Federal law governing the banking or trust powers
of the Trust Company, or the Trust Agreement, or its organizational documents or bylaws, or (ii)
contravene the provisions of, or constitute a default by the Trust Company under, or result in the
creation of any Owner Lessor’s Lien attributable to it upon the Lessor Estate under, any indenture,
mortgage or other material contract, agreement or instrument to which the Trust Company is a party
or by which the Trust Company or its property is bound; subject to the correctness of the Lessee’s
representations set forth in Section 3.1(i) above and provided, that no representation is made with
respect to the right, power and authority of the Trust Company or the Owner Trustee to operate the
Network following the termination of the Network Lease.

     (e) Governmental
Actions. No authorization or approval or other action by, and no
notice to or filing or registration with, any Governmental Entity of the State of Delaware or the
United States of America governing the banking or trust powers of the Trust Company is required for
the due execution, delivery or performance by the Trust Company or the Owner Trustee, as the case
may be, of the Trust Agreement, this Agreement or the other Operative Documents to which the Trust
Company or the Owner Trustee is a party, other than any such authorization or approval or other
action or notice or filing as has been duly obtained, taken or given; subject to the correctness of
the Lessee’s representations set forth in Section 3.1(i) above and provided, that no representation
is made with respect to the right, power and authority of the Trust Company or the Owner Trustee to
operate the Network following the termination of the Network Lease.

     (f) Litigation. There is no pending or, to the Actual Knowledge of the Trust
Company, threatened action, suit, investigation or proceeding against the Trust Company either in
its individual capacity or as Owner Trustee, as the case may be, before any Governmental Entity
that questions the validity of the Operative Documents.

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     (g)
Liens. The Lessor Estate is free of any Owner Lessor’s Liens attributable to the
Trust Company or the Owner Trustee.

     (h) EIN.
The EIN of the Trust Company is 37-1426872.

     Section 3.4 Representations and Warranties of the Owner Participant. The Owner Participant
represents and warrants that, as of the Effective Date:

     (a) Due
Organization. The Owner Participant is a North Carolina corporation, duly
created, validly existing and in good standing under the laws of the State of North Carolina and
has the requisite power and authority to enter into and perform its obligations under this
Agreement, the Trust Agreement, and the Tax Indemnity Agreement.

     (b) Due
Authorization;_Enforceability; Etc. This Agreement, the Trust Agreement and
the Tax Indemnity Agreement have been, or when executed and delivered will be, duly authorized,
executed and delivered by the Owner Participant and, assuming the due authorization,
execution and delivery by each other party thereto, this Agreement, the Trust Agreement and the Tax
Indemnity Agreement constitute, or when executed and delivered will constitute, the legal, valid
and binding obligations of the Owner Participant, enforceable against the Owner Participant in
accordance with their respective terms.

     (c) Non-Contravention. The execution and delivery by the Owner Participant of this
Agreement, the Trust Agreement and the Tax Indemnity Agreement, the consummation by the Owner
Participant of the transactions contemplated hereby and thereby, and the compliance by the Owner
Participant with the terms and provisions hereof and thereof, do not and will not contravene any
Applicable Law binding on the Owner Participant (subject to the correctness of the Lessee’s
representation set forth in Section 3.1(i) above and provided that no representation or warranty
is made as to any Applicable Law to the extent the Owner Participant may be subject thereto as a
result of the termination of the Network Lease) or its organizational documents, or contravene the
provisions of, or constitute a default under, or result in the creation of any Owner Participant’s
Lien upon the Lessor Estate under, any indenture, mortgage or other material contract, agreement or
instrument to which the Owner Participant is a party or by which the Owner Participant or its
property is bound.

     (d) Governmental Action. No authorization or approval or other action by, and no
notice to or filing or registration with, any Governmental Entity is required for the due
execution, delivery or performance by the Owner Participant of this Agreement, the Trust Agreement
or the Tax Indemnity Agreement, other than any authorization or approval or other action or notice
or filing as has been duly obtained, taken or given (subject to the correctness of the Lessee’s
representation in Section 3.1(i) above and provided that no representation or warranty is made as
to any Applicable Law to the extent the Owner Participant may be subject thereto as a result of the
termination of the Network Lease).

     (e)
Litigation. There is no pending or, to the Actual Knowledge of the
Owner Participant, threatened action, suit, investigation or proceeding against the Owner
Participant before any Governmental Entity that questions the
validity of the Operative Documents.

     (f) Liens. The Lessor Estate is free of any Owner Participant’s Liens.

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     (g) ERISA. No part of the funds to be used by the Owner Participant to make its investment
pursuant to this Agreement, directly or indirectly, constitutes or is deemed to constitute assets
(within the meaning of ERISA and any applicable rules, regulations and court decisions thereunder)
of any Plan.

     (h) Acquisition
for Investment. The Owner Participant is purchasing the Beneficial Interest for its
own account with no present intention of distributing such Beneficial Interest or any part thereof
in any manner that would require registration under the Securities Act, but without prejudice,
however, to the right of the Owner Participant at all times to sell or otherwise dispose of all or
any part of such Beneficial Interest under an exemption from
registration available under such Act.

     (i) Securities Act. Neither the Owner Participant nor, to its knowledge, anyone authorized
by it has directly or indirectly offered or sold any interest in the Beneficial Interest, the
Lessor Note or the Certificates or any part thereof, or in any similar security or lease, or in any
security or lease the offering of which for the purposes of the Securities Act would be deemed to
be part of the same offering as the offering of the Beneficial Interest, the Lessor Note or the
Certificates or any part thereof or solicited any offer to acquire any of the same in violation of
the registration requirements of Section 5 of the Securities Act; it being understood for purposes
of this Section 3.4(i) that no representation is made herein with respect to Advisors to the Lessee
or the Initial Purchasers, and it being further understood that neither the Advisors to the Lessee
nor the Initial Purchasers have acted or are acting on behalf of the Owner Participant in
connection with the Beneficial Interest, the Lessor Note or the Certificates.

     (j) Appropriated Funds Not Used. No Federal appropriated funds have been paid or will be
paid by or on behalf of the Owner Participant to any Person for influencing or attempting to
influence an officer or employee of any agency, a Member of Congress, an officer or employee of
Congress, or any employee of a Member of Congress in connection with the entering into of this
Agreement or any other Operative Document. In connection therewith, the Owner Participant shall
execute the Certificate required by 18 C.F.R. Part 1315.

     (k) EIN. The BIN of the Owner Participant is 56-0811711.

     (l) Regulatory Event of Loss. The Owner Participant is not aware of any fact or
circumstance that would enable the Owner Participant now, or with the passage of time, to declare a
Regulatory Event of Loss.

SECTION 4. CLOSING CONDITIONS; CONDITIONS TO PURCHASE OF LESSOR NOTE

     The obligations of the Owner Participant, the Owner Lessor, the Owner Trustee, the Lease Indenture
Trustee, the Pass Through Trustee and TVA to consummate the Transaction on the Closing Date shall
be subject to satisfaction or waiver of the following conditions (except that the obligations of
any Person shall not be subject to such Person’s own performance or compliance):

     (a) Operative
Documents. On or before the Closing Date, each of the Operative Documents to
be delivered at the Closing shall have been duly authorized by the parties thereto, and each of the
Operative Documents to be delivered at the Closing shall have been duly

14

 

executed and delivered by
the parties thereto substantially in the forms attached as an Exhibit
hereto, shall each be in full
force and effect, and executed counterparts of each shall have been delivered to each of the
parties hereto (other than the Tax Indemnity Agreement, which shall only be delivered to the
parties thereto and their counsel).

     (b) Equity Investment. The Owner Participant shall have made the Equity Investment
in the Owner Lessor at the place and in the manner contemplated by Section 2 and the Other Owner
Participants shall have made their respective “Equity Investment” in the Other Owner Lessors as
provided in the Other Participation Agreements.

     (c) Certificates and Lessor Note. Each of the conditions precedent contained in
the Underwriting Agreement shall have been satisfied or waived by the Initial Purchasers.

     (d) Corporate Documents. Each of the Transaction Parties shall have received
certified copies of the organizational documents of each of the other parties hereto (except for
the Trust Company who shall not be required to provide such documents) and resolutions of the board
of directors or other authorizing body of each such other party duly authorizing the transaction
and such documents and such evidence as each party may reasonably request in order to establish the
authority of each such other party to consummate the Transaction, the taking of all necessary
proceedings in connection
therewith and compliance with the conditions herein or therein set forth and the incumbency of all
officers signing any of the Operative Documents. Each of the foregoing documents shall be
reasonably satisfactory to the recipient.

     (e) Events of Loss, Defaults, Events of Default.  No Event of Loss, Lease Event of
Default, or Lease Indenture Event of Default or event that with the passage of time or giving of
notice or both would constitute an Event of Loss, a Lease Event of Default, or Lease Indenture
Event of Default shall have occurred and be continuing.

     (f) No Threatened Proceedings. No action, suit, investigation or proceeding shall
have been instituted nor shall governmental action be threatened before any Governmental Entity,
nor shall any order, judgment or decree have been issued or proposed to be issued by any
Governmental Entity at the time of the Closing Date, to set aside, restrain, enjoin or prevent the
consummation of the Operative Documents or any of the transactions contemplated by any of the
Operative Documents.

     (g) Consents. All permits, licenses, approvals and consents necessary to consummate
the Transaction, including the Software License Consents, shall have been duly obtained and shall
be in full force and effect, satisfactory to each of the Transaction Parties in form and substance,
and each such party shall have received a copy of such approval or consent, including the Software
License Consents.

     (h) Governmental Actions. All actions, if any, required to have been taken by any
Governmental Entity on or prior to the Closing Date in connection with the Transaction on the
Closing Date shall have been taken and all orders, permits, waivers, exemptions, authorizations,
determinations and approvals of and registrations with such Governmental Entities required to be in
effect on the Closing Date in connection with the transactions contemplated by the Operative
Documents on the Closing Date shall have been issued and shall be final and non-appealable;

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and all
such orders, permits, waivers, exemptions, authorizations, determinations and approvals shall be in
full force and effect on the Closing Date; and each of the Transaction Parties shall have received
a copy of any such order, permit, waiver, exemption, authorization, determinations or approval.

     (i) QTE
Report. The Owner Participant shall have received the QTE Report, addressed to the Owner
Participant, in form and substance satisfactory to the Owner Participant, and addressing (i) the
status of the Network and its Components as “qualified technological equipment” within the meaning
of Section 168(f)(i)(2) of the Code, (ii) the integrated status of the Network, (iii) the status
and availability of the software for the efficient operation of the Network, and (iv) the
percentage of the Network Cost attributable to “computer software” within the meaning of Section
167(f)(I)(B) of the Code.

     (j) Appraisal. The Owner Participant shall have received the Closing Appraisal
prepared by the Appraiser addressed and delivered only to the Owner Participant in form and
substance satisfactory to the Owner Participant. TVA and the Initial Purchasers shall have received
a letter from the Appraiser with regard to the fair market value and useful life of the Network.

     (k) Opinion with Respect to Certain Tax Aspects. The Owner Participant shall have
received the opinion, dated the Closing Date, of Hunton & Williams LLP addressed and delivered only
to the Owner Participant as to certain tax matters in form and substance satisfactory to the Owner
Participant.

     (l) Opinions
of Counsel. Each of the relevant Transaction Parties shall have received an
opinion or opinions, dated the Closing Date, in form and substance satisfactory to each such
Transaction Party, of (a) Orrick, Herrington & Sutcliffe LLP, special counsel to TVA, (b) Maureen
H. Dunn, Esq., Executive Vice President and General Counsel of TVA, (c) Hunton & Williams LLP,
counsel to the Owner Participant, and Parrish McCormack, Vice President and Assistant General
Counsel to Wachovia Corporation, (d) Richards, Layton & Finger, P.A., counsel to the Owner Lessor,
the Trust Company, and the Owner Trustee (e) Morris, James, Hitchens & Williams LLP, counsel to the
Lease Indenture Trustee and the Pass Through Trustee, in each case addressed to such Person, (f)
Wyatt, Tarrant & Combs, LLP, local Kentucky counsel to TVA, (g) Butler, Snow, O’Mara, Stevens &
Cannada, PLLC, local Mississippi counsel to TVA, and (h) Waller, Lansden, Dortch & Davis, local
Tennessee counsel to TVA. Each such Person expressly consents to the rendering by its counsel of
the opinion referred to in this Section 4(l) and acknowledges that such opinion shall be deemed to
be rendered at the request and upon the instructions of such Person, each of whom has consulted
with and has been advised by its
counsel as to the consequences of such request, instructions and consent. Furthermore, each such
counsel shall, to the extent requested, (i) include as addressees the Rating Agencies and the
Initial Purchasers or (ii) permit the Rating Agencies and the Initial Purchasers to rely on its
opinion as if such opinion were addressed to such parties.

     (m) Nonconsolidation Opinion. The Lessee, the Initial Purchasers and the Rating Agencies
shall have received the opinion, dated the Closing Date, of Hunton & Williams LLP in form and
substance satisfactory to the Lessee to the effect that if the Owner Participant were to become a
debtor in a case under the Bankruptcy Code, and if the matter were properly briefed

16

 

and presented
to a Federal court exercising bankruptcy jurisdiction, the court, exercising reasonable judgment
after full consideration of all relevant factors, would not order, over the objection of the
creditors of the Owner Lessor, the substantive consolidation of the assets and liabilities of the
Owner Lessor with those of the Owner Participant.

     (n) Filings. The financing statement under the Uniform Commercial Code of the State of
Delaware listed on Schedule 1 hereto shall have been duly made (or presented for filing with the
applicable office with payment of all fees in connection therewith), and all filing, recordation,
transfer and other fees payable in connection therewith shall have been paid.

     (o) Actions
of Governmental Entity. No action or proceeding shall be pending nor shall any
action be threatened before any court or Governmental Entity, nor shall any order, judgment or
decree have been issued by any court or Governmental Entity at the time of the Closing Date, to set
aside, restrain, enjoin or prevent the completion and consummation of the Operative Documents or
any of the transactions contemplated by any of the Operative Documents.

     (p) Taxes. All Taxes, if any, due and payable on or before the Closing Date in connection
with the execution, delivery, recording and filing of this Agreement or any other Operative
Document, or any document or instrument contemplated thereby shall have been duly paid in full.

     (q) Opinion of Counsel. The Owner Participant shall have received the opinion, dated the
Closing Date, of Orrick, Herrington & Sutcliffe LLP in form and substance satisfactory to the Owner
Participant to the effect that payments of Basic Lease Rent constitute an “operating expense”
payable with a priority higher than that of the bonds or other “Evidences of Indebtedness” (as
defined in the Bond Resolution) issued under the Bond Resolution.

     (r) Change in Tax Law. The Owner Participant shall not have delivered notice to TVA that
any actual or proposed change in Tax law shall have occurred on or prior to the Closing Date
(including regulations, announcements and notices) which the Owner Participant reasonably
determines could adversely affect it after taking into account any required adjustment of Basic
Lease Rent and Termination Values in accordance with Section 12 hereof.

     (s) Residual Value Insurance. The Owner Participant shall have received an opinion from the
RVI Advisor addressed to the Owner Participant in form and substance satisfactory to the Owner
Participant.

     (t) Escrow Arrangements. The Escrowed Software shall have been delivered to the Owner
Trustee pursuant to Section 6.9 hereof.

     (u) No
Material Adverse Change. Since September 30, 2002, there shall have been no material adverse
change in the financial condition of TVA, except as disclosed in the Offering Circular as of the
Closing Date.

     (v) Sales Tax Certificates. TVA shall have received a sale-for-resale certificate from the
Owner Lessor applicable for the States of Georgia (on Form ST-5), Kentucky (on Form 51A105) and
Tennessee (on Form RV-F1301301) and a statement attesting to the fact that

17

 

it has filed an application for a Mississippi sales tax permit and will provide a copy of such
permit to TVA immediately upon receipt (or, alternatively, a copy of such permit if available on
the Closing Date); and TVA shall have provided the Owner Lessor with a governmental sale exemption
certification for the States of Georgia (on Form ST-5) and Tennessee
(on Form RV-F1301301) and a
copy of a 1983 letter received by TVA from the State of Kentucky indicating that TVA can make
purchases without the payment of Kentucky sales tax.

SECTION 5. COVENANTS OF TVA

     Section 5.1 Delivery of Financial Statements; No Default Certificate; Information Concerning
the Network.

     (a) TVA shall deliver to the Owner Participant, the Owner Lessor, the Owner Trustee and, so
long as the Lien of the Lease Indenture has not been terminated or discharged, the Lease Indenture
Trustee and the Pass Through Trustee as soon as reasonably practicable after the end of each fiscal
year but in no event later than 120 days after the end of such year, (i) its audited yearly
financial statements all prepared in accordance with GAAP together with the report of
PricewaterhouseCoopers LLP or another firm of independent public accountants of nationally
recognized standing, and (ii) an annual Officer’s Certificate stating that (1) the signer has made,
or caused to be made under its supervision, a review of this Agreement and the other Operative
Documents to which it is a party, and (2) such review has not disclosed the existence during such
fiscal year (and the signer does not have Actual Knowledge of the existence as of the date of such
certificate) of any condition or event constituting a Significant Lease Default or a Lease Event of
Default or an Event of Loss or, if any such condition or event existed or exists, specifying the
nature thereof, the period of existence thereof and what action TVA has taken or proposes to take
with respect thereto and, concurrently with such delivery, shall deliver to the Owner Trustee the
annual update of the Escrowed Software required pursuant to
Section 6.9(b).

     (b) TVA shall deliver to the Owner Participant, the Owner Lessor, the Owner Trustee, and so
long as the Lien of the Lease Indenture shall not have been terminated or discharged, the Lease
Indenture Trustee and the Pass Through Trustee, as soon as reasonably practicable after the end of
each of the first three fiscal quarters but in no event later than 60 days after the end of each
such quarter, its quarterly financial statements prepared in accordance with GAAP (subject to
normal year-end adjustments).

     (c) TVA shall furnish, or shall cause to be furnished to, the Owner Trustee, the Owner
Lessor, the Owner Participant and, so long as the Lien of the Lease Indenture has not been
terminated or discharged, the Lease Indenture Trustee and the Pass Through Trustee, and their
respective authorized representatives from time to time records relating to the operation and
maintenance of the Network (but which shall not include any records or data collected or
disseminated by the Network relating to the operation and performance of the Transmission Plant
and the associated billing arrangements) and such other material financial and
nonconfidential information relating to TVA as any such person may
reasonably request; provided
that, except as provided in this Section 5.1, TVA reserves the right not to provide any information
that is not otherwise publicly available to any transferee Owner Participant (or its Owner Lessor
and Owner Trustee) if it reasonably believes in its good faith judgment that such transferee Owner
Participant is a Competitor or is an Affiliate of a Competitor of TVA or its

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Affiliates in the competitive power market, unless, before receiving any such information, such
transferee Owner Participant shall have put in place (to the reasonable satisfaction of TVA)
appropriate confidentiality arrangements.

     Section 5.2
Residual Value Insurance. No later than 12 months after the Early Purchase Date, the
Lessee shall arrange and maintain insurance for the benefit of the Owner Lessor and the Owner
Participant (the “Residual Value Insurance”) in an
amount equal to the Residual Value Insurance
Amount. The Residual Value Insurance shall be payable in an amount equal to the excess, if any, of
the Residual Value Insurance Amount over the fair market sales value of the Owner Lessor’s
Interest, provided that if the Lessee exercises the Purchase Option, such fair market sales value
shall be determined so as to be consistent with Fair Market Sales Value (subject to compliance with
any requirements of such Residual Value Insurance) (and provided further that, if the Lessee does
not elect the Purchase Option and the Owner Lessor intends to sell the Owner Lessor’s Interest to a
third party on or about the Expiration Date, such fair market sales value shall mean the amount of
net sale proceeds received or to be received by the Owner Lessor upon a sale to a third party
purchaser of the Owner Lessor’s Interest), The terms and conditions of any Residual Value Insurance
will be reasonably acceptable to Owner Lessor, including the manner in which fair market sales
value is determined. The insurance company or financial institution providing the Residual Value
Insurance (i) may not be the Owner Lessor, the Lessee or any Affiliate or Tax Affiliate of any of
the foregoing, (ii) must be reasonably acceptable to Owner Participant and (iii) must satisfy the
Residual Value Insurance Standard. If, at any time after the Lessee has provided Residual Value
Insurance, the long-term unsecured senior debt obligations or claims paying ability of the
insurance company or financial institution providing the Residual Value Insurance shall cease to be
rated as set forth in clause (i) of the definition of Residual Value Insurance Standard, the Lessee
shall, within sixty (60) days after the earlier of (x) a Responsible Officer of Lessee acquiring
Actual Knowledge of the occurrence of such event and (y) delivery of a notice from the Owner Lessor
or the Owner Participant to the Lessee that such event has occurred, replace such Residual Value
Insurance with new Residual Value Insurance pursuant to which the insurance company or financial
institution providing the same shall meet the Residual Value
Insurance Standard. All expenses of
obtaining such Residual Value Insurance, including the cost of replacing such Residual Value
Insurance, shall be borne by the Lessee. In connection with the Lessee’s arrangement and
maintenance of the Residual Value Insurance and subject to satisfaction of the requirements set
forth in this Section 5.2, the Owner Lessor and the Owner Participant agree, at the request and
expense of the Lessee, to cooperate with the Lessee in entering into such modifications or
amendments to the Operative Documents as may be reasonably necessary to facilitate the Lessee’s
ability to obtain such Residual Value Insurance with the Lessee as an additional named insured in
the event that the Lessee elects to purchase the Owner Lessor’s Interest under the Purchase Option;
provided, however, that neither the Owner Lessor nor the Owner Participant shall be required to
take any action in connection herewith that would result in any adverse consequences to that party
for which that party is not indemnified by the Lessee in a manner reasonably satisfactory to such
party (which may include the provision of collateral to secure such indemnity).

     Section 5.3 Further Assurances. TVA, at its own cost, expense and liability, will cause to be
promptly and duly taken, executed, acknowledged and delivered all such further acts, documents and
assurances as may be necessary in order to carry out the intent and purposes of

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this Participation Agreement and the other Operative Documents to which it is a party, and the
transactions contemplated hereby and thereby, including, without limitation, such further or
revised Software License Consents with respect to the Software Rights, in such case as required by
any Transaction Party. TVA, at its own cost, expense and liability, will cause such financing
statements or other similar documents (and continuation statements with respect thereto) as may be
necessary and such other documents as the Owner Participant, the Owner Lessor, the Owner Trustee
and, so long as the Lien of the Lease Indenture shall not have been terminated or discharged, the
Lease Indenture Trustee and the Pass Through Trustee, shall reasonably request to be filed at such
places and times in such manner, and will take all such other actions or cause such actions to be
taken, as may be necessary or reasonably requested in order to establish, preserve, protect and
perfect the Owner Lessor’s Interest, or any portion of any thereof or any interest therein and the
first priority Lien intended to be created by the Lease Indenture in the Indenture Estate.

SECTION 6. COVENANTS OF THE TRUST COMPANY, THE OWNER TRUSTEE AND THE OWNER LESSOR

     Section 6.1 Compliance with the Trust Agreement. The Owner Lessor, the Trust Company and the Owner
Trustee each hereby severally covenants and agrees that it will:

     (a) comply with all of the terms of the Trust Agreement applicable to it; and

     (b) not amend, supplement or otherwise modify Sections 3.5, 6.2, 6.3, 9.1, 10, or 11.16 of
the Trust Agreement without the prior written consent of (i) so long as no Lease Event of Default
has occurred and is continuing, TVA, and (ii) so long as the Lien of the Lease Indenture has not
been terminated or discharged, the Lease Indenture Trustee.

     Section 6.2 Owner Lessor’s Liens. The Trust Company, the Owner Trustee and the Owner Lessor each
covenants that it will not directly or indirectly create, incur, assume or suffer to exist any
Owner Lessor’s Lien attributable to it and will promptly notify TVA, the Owner Participant and the
Lease Indenture Trustee of the imposition of any such Lien of which it has Actual Knowledge and
shall promptly, at its own expense, take such action as may be necessary to duly discharge such
Owner Lessor’s Lien attributable to it; provided, however, that the Trust Company, the Owner
Trustee and the Owner Lessor, as the case may be, shall not be in breach of the covenant so long as
it shall be diligently contesting the imposition of such Lien and such contest shall not present
any material risk of the sale, foreclosure or loss of, or loss of priority of the
lien on, the Lessor Estate or any part thereof or the rights of the Lessee, or, so long as the Lien
of the Lease Indenture has not been terminated or discharged, the Lease Indenture Trustee, under
the Operative Documents.

     Section 6.3 Amendments to Operative Documents. The Owner Trustee, the Trust Company and the Owner
Lessor each covenants that it will not, unless such action is expressly contemplated by the
Operative Documents, (a) through its own action terminate any Operative Document to which it is a
party, (b) amend, supplement, waive or modify (or consent to any such amendment, supplement, waiver
or modification) such Operative Documents in any manner or (c) except as provided in Section 11
hereof or Section 2.10 of the Lease Indenture, take any action to prepay or refund the Lessor Note
or amend any of the payment terms of the Lessor

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Note without, in each case, the prior written consent of (i) so long as no Lease Event of Default
shall have occurred and be continuing, TVA, and (ii) in the case of clause (a) or (b) only, so long
as the Lien of the Lease Indenture has not been terminated or discharged, the Lease Indenture
Trustee.

     Section 6.4 Transfer of the Owner Lessor’s Interest. Other than as contemplated by the Operative
Documents, each of the Owner Lessor and the Owner Trustee covenants that it will not assign,
pledge, sell, lease, convey or otherwise transfer any of its then existing right, title or interest
in and to the Owner Lessor’s Interest, the Lessor Estate or the other Operative Documents. Nothing
in this Section 6 shall limit the ability of the Owner Trustee or the Owner Participant to appoint
a successor Owner Trustee pursuant to Section 9.1 and 9.6 of the Trust Agreement.

     Section 6.5 Owner Lessor; Lessor Estate. The Owner Lessor covenants that it will not voluntarily
take any action to subject the Owner Lessor or the Lessor Estate to the provisions of any
applicable bankruptcy or insolvency law (as now or hereafter in effect) unless such action is
approved in accordance with Section 3.5 of the Trust Agreement; the Owner Trustee covenants that it
will not take any action which to its knowledge would cause an involuntary filing which would
subject the Owner Lessor or the Lessor Estate to the provisions of any applicable bankruptcy or
insolvency law (as now or hereafter in effect).

     Section 6.6 Limitation on Indebtedness and Actions. Each of the Owner Trustee and the Owner Lessor
covenants that it will not incur any indebtedness nor eater into any business or activity except as
required or expressly permitted or contemplated by any Operative Document.

     Section 6.7 Change of Location. The Owner Lessor shall use all reasonable efforts to give the Owner
Participant, the Lease Indenture Trustee and TVA 30 days’ prior written notice of any change of its
location for the purposes of Section 9-307 of the UCC from the State of Delaware and of any change
in its name, but in any event the Owner Lessor shall give such notice within 30 days after such
change of location or name change.

     Section 6.8 Exercise of Right to Redeem Lessor Note. The Owner Lessor will not exercise its right
to redeem the Lessor Note pursuant to Section 2.10(b)(v) of the Lease Indenture unless (i) it has
received the prior written consent of TVA, and (ii) the corresponding right is simultaneously
exercised pursuant to Section 2.10(b)(v) of the Other Lease Indentures.

     Section 6.9
Escrowed Software. (a) On the Closing Date, TVA shall cause to be delivered to the
Owner Trustee a computer spread sheet (the “Escrowed
Software”) to be used in identifying the
location of Components of the Network other than the Software Rights. The Escrowed Software shall
include all necessary applications software and support information (such as definitions of
location codes) to allow the information defining the location of all of the equipment items
contained in the Network to be correctly accessed, viewed and interpreted. Not more than 45 days
after any Modification to the Network whereby the cost thereof is in
excess of $20,000,060, the
Escrowed Software shall be updated by the Lessee to be true and complete as of the completion date
of any such Modification. The Owner Trustee (i) shall hold such Escrowed Software, (ii) shall not
make the Escrowed Software available to any Person, including the Owner Participant, except (y) as
set forth in Section 6.9(d) below, or (z) upon the occurrence

21

 

and during the continuance of a Lease Event of Default and notification thereof to the Owner
Trustee by the Owner Participant, the Lessee or the Lease Indenture Trustee, and (iii) upon the
occurrence and during the continuance of a Lease Event of Default
and notification thereof to the Owner Trustee by the Owner Participant, the Lessee or the Lease
Indenture Trustee, shall provide, immediately upon request, such Escrowed Software to the Owner
Participant and the Lease Indenture Trustee.

     (b) Upon the delivery of the items set forth in Section 5.1(a) above, the Lessee shall
deliver updated Escrowed Software, which updated Escrowed Software shall be true and accurate as of
the date most reasonably practical prior to such annual update, and deliver such updated Escrowed
Software to the Owner Trustee in replacement for the then Escrowed
Software (the “Replaced Software”). The Owner Trustee shall not destroy any such Replaced Software, but rather, shall
retain from year to year all such Replaced Software until the termination of the Trust Agreement.

     (c) If the Network Lease terminates and TVA has not elected to acquire the Owner Lessor’s
Interest or the Owner Participant’s Beneficial Interest, TVA shall update the Escrowed Software to
be true and accurate as of the date most reasonably practical prior to such update and shall
deliver such updated Escrowed Software to the Owner Participant and the Owner Lessor concurrently
with such termination.

     (d) If, in connection with the audit of any tax filing made by the Owner Participant in any
state in which any Component of the Network (other than the Software Rights) is or was located
during the period of time covered by such tax filing, the Owner Participant is required to provide
to any such state Governmental Entity information as to the percentage of the Network which is or
was located in such state, TVA shall (y) upon receipt of appropriate written agreements of
confidentiality from the Owner Participant and any of its advisors or legal representatives, either
(i) direct the Owner Trustee to provide the Escrowed Software to the Owner Participant or such
advisors or legal representatives, or (ii) if the Escrowed Software then in the possession of the
Owner Trustee does not provide information with respect to such Components of the Network for the
time period covered by such audit, direct the Owner Trustee to deliver the Replaced Software
relating to the time period covered by such audit to the Owner Participant or such advisors or
legal representatives, and (z) assist the Owner Participant or such advisors or legal
representatives in calculating such percentage.

SECTION 7. COVENANTS OF THE OWNER PARTICIPANT

     Section 7.1 Restrictions on Transfer of Beneficial Interest.

     (a) The Owner Participant covenants and agrees that it shall not during the Network Lease
Term assign, convey or transfer any of its right, title or interest in the Beneficial Interest
without the prior written consent of TVA and, so long as the Lien of the Lease Indenture has not
been terminated or discharged, without the prior written consent of the Lease Indenture Trustee
(such consent not to be unreasonably withheld); provided, however, that the Owner Participant may
assign, convey or transfer its interest in the Beneficial Interest in whole without such consent to
a Person (the “Transferee”) which shall assume the duties and obligations of the Owner Participant
under the Operative Documents pursuant to an Assignment and Assumption

22

 

Agreement substantially in the form of Exhibit D hereto, if each of the following conditions
shall have been satisfied:

     (i) TVA and the Owner Trustee, and, so long as the Lease Debt is outstanding, the Lease Indenture
Trustee and the Pass Through Trustee, shall have received an opinion of counsel, which opinion and
counsel are reasonably satisfactory to TVA, and, so long as the Lease Debt is outstanding, the
Lease Indenture Trustee and the Pass Through Trustee, to the effect that any regulatory approvals
and notifications required in connection with such transfer or necessary to assume the Owner
Participant’s obligations under the Operative Documents prior to the end of the Network Lease Term
shall have been obtained;

     (ii) the Transferee shall be a “United States person” within the meaning of Section 7701(a)(30) of
the Code;

     (iii) the Transferee shall be either (A) an Affiliate of the Owner Participant which does not
otherwise qualify under clause (B) below, provided that all of the payment and performance
obligations of the Transferee with respect to the interest being transferred under the Operative
Documents shall be guaranteed by the Owner Participant or any guarantor of the Owner Participant’s
obligations under the Operative Documents pursuant to a guaranty substantially in the form of
Exhibit E hereto, or (B) a Person that has, or the payment and performance obligations of which
with respect to the interest being transferred under the Operative Documents are guaranteed
(pursuant to a guaranty substantially in the form of Exhibit E
hereto) by a Person (the “OP Guarantor”) that has, a tangible net worth of at least $100 million
calculated in accordance with GAAP;

     (iv)
unless waived by TVA or such transfer is to any of the Other Owner Participants, neither the
Transferee nor the OP Guarantor is a Competitor of, or an adverse party in material litigation
with, TVA;

     (v) the Rating Agencies shall have received an opinion of counsel with respect to the Transferee
substantially to the effect of the nonconsolidation opinion delivered to the Rating Agencies on the
Closing Date pursuant to Section 4(m), or if as a consequence of a change in bankruptcy law such
opinion cannot be given:

     (x) a legal opinion to the effect that the risk of bankruptcy consolidation of the Transferee, or
its direct or indirect parent, with the Owner Lessor, immediately after giving effect to the
transfer of such beneficial interest, is not materially different from the risk of bankruptcy
consolidation of the Owner Participant with the Owner Lessor immediately prior to giving effect to
such transfer; and

     (y) an Officer’s Certificate of a Transferee that is a special purpose bankruptcy remote entity
certifying that the organizational documents of such Transferee contain, and will continue to
contain after the transfer the following provisions: separateness, independent managers, no
bankruptcy petition, no dissolution and amendment of such
organizational document(s); and

23

 

     (vi) the Transferee shall agree to assume all the duties and obligations of the Owner
Participant pursuant to the Assignment and Assumption Agreement.

     (b) For
purposes of the preceding clause (a), a “Competitor” of TVA shall be an entity that
is or has an Affiliate thereof that is (x) significantly involved as a generator, seller or trader
of capacity or energy in the electric markets in which TVA sells power and energy at wholesale or
retail or (y) on the List of Competitors, which may, from time to time, but no more often than once
per year, be modified by TVA, and shall contain a list of entities that TVA reasonably believes in
its good faith judgment are Competitors of TVA; provided that such List of Competitors shall not
contain more than 8 entities at any one time. The term
“Competitor” shall not include an entity
that is primarily a financial institution, such as a bank, an investment bank, a securities broker,
or an insurance company, that also sells power and energy; provided, however, that the power and
energy sold by the financial institution has not been generated or transmitted by the financial
institution or by a subsidiary or affiliate of the financial institution.

     (c) Notwithstanding the foregoing, (x) the restrictions set forth in clauses (i), (iv) and
(v) of Section 7.1(a) and the tangible net worth
requirement in clause (iii)(B) of Section 7.1(a)
shall not inure to the benefit of TVA if such transfer is made during the continuance of a Lease
Event of Default and (y) the Owner Participant may transfer all of its interest in the Beneficial
Interest to an Affiliate if (l) the Owner Participant or the OP Guarantor guarantees all
obligations of such Affiliate under the Operative Documents and the conditions set forth in
paragraphs (a)(i), (a)(ii), (a)(v), (a)(vi) and (f) of this Section 7.1 shall have been met by such
Affiliate, or (2) the conditions set forth in paragraphs (a)(i), (a)(ii), (a)(iii), (a)(v), (a)(vi)
and (f) of this Section 7.1 shall have been met by such Affiliate or the OP Guarantor.

     (d) Except as otherwise provided in Section 9.2 hereof, TVA shall not be responsible for any
Taxes arising out of or caused by any transfer pursuant to this Section 7.1 and the Pricing
Assumptions shall not be changed as a result of any such transfer.

     (e) So long as the Owner Participant has fulfilled its obligations pursuant to Section 14
hereof and TVA has elected not to exercise its rights under Section 14 herein, then the Owner
Participant shall have the right to give the Owner Lessor, the Owner Trustee, the Lease Indenture
Trustee and TVA 20 days’ prior written notice of such transfer, 10 days’ in the case of a transfer
to any Other Owner Participant, or 5 days’ in the case of a transfer to an Affiliate of the Owner
Participant. Such written notice shall be in the form of a certificate and stating the name and
address of any proposed Transferee and that the proposed transfer satisfies the requirements of
this Section 7.1. If requested by the Owner Participant or the Lease Indenture Trustee, TVA will
acknowledge qualifying transfers.

     (f) All reasonable fees, expenses and charges of the Lease Indenture Trustee, Pass Through.
Trustee and TVA (including reasonable attorneys’ fees and expenses in connection with any such
transfer or proposed transfer), including any of the foregoing relating to any amendments to the
Operative Documents required in connection therewith, shall be paid by the Owner Participant,
without any right of indemnification from TVA or any other Person; provided, however, that the
Owner Participant shall have no obligation to pay fees, expenses or charges of TVA as a result of
any transfer while a Lease Event of Default is continuing, in which

24

 

case TVA shall be obligated to pay such costs and the reasonable fees, expenses and charges of the
Lease Indenture Trustee and the Pass Through Trustee in connection
with such transfer.

     (g) Upon any such transfer in compliance with this Section 7.1, (i) such Transferee shall (x) be
deemed the “Owner Participant” for all purposes, and (y) enjoy the rights and privileges and
perform the obligations of the Owner Participant hereunder and under the Assignment and Assumption
Agreement, the Guaranty, if any, and each other Operative Document to which such Owner Participant
is a party, and each reference in this Agreement, the Assignment and Assumption Agreement, the
Guaranty and each other Operative Document to the “Owner Participant” shall thereafter be deemed to
include such Transferee for all purposes and (ii) the transferor Owner Participant and the OP
Guarantor, if any, of such transferor Owner Participant’s obligations shall, except as otherwise
set forth in Section 7.1(a)(iii)(A) or Section 7.1(c)(y)(l), be released from all obligations
hereunder and under each other Operative Document to which such transferor or OP Guarantor is a
party or by which such transferor Owner Participant or OP Guarantor is bound to the extent such
obligations are expressly assumed by a Transferee; provided, however, that in no event shall any
such transfer waive or release the Transferor or its OP Guarantor from any liability existing
immediately prior to or occurring simultaneously with such transfer.

     Section 7.2
Owner Participant’s Liens. The Owner Participant covenants that it will not directly or
indirectly create, incur, assume or suffer to exist any Owner Participant’s Lien and the Owner
Participant shall promptly notify TVA and the Lease Indenture Trustee of the imposition of any such
Lien of which the Owner Participant has Actual Knowledge and shall promptly, at its own expense,
take such action as may be necessary to duly discharge such Owner Participant’s Lien; provided,
however, that the Owner Participant shall not be in breach of this covenant so long as it shall be
diligently contesting the imposition of such Lien and such contest shall not present any material
risk of the sale, foreclosure or loss of the Lessor Estate or any part thereof or the rights of the
Lessee or, so long as the Lien of the Lease Indenture has not been terminated or discharged, the
Lease Indenture Trustee, under the Operative Documents.

     Section 7.3 Amendments or Revocation of Trust Agreement. The Owner Participant covenants that it
will not (i) amend, supplement or otherwise modify Sections 3.5, 6.2, 6.3, 9.1, 10 or 11.16 of the
Trust Agreement without the prior written consent of (x) so long as no Significant Lease Default or
Lease Event of Default has occurred and is continuing, TVA, and (y) so long as the Lien of the
Lease Indenture has not been terminated or discharged, the Lease Indenture Trustee, or (ii) waive
compliance with or terminate the Trust Agreement without the prior written consent of (x) so long
as no Significant Lease Default or Lease Event of Default has occurred and is continuing, TVA, and
(y) so long as the Lien of the Lease Indenture has not been terminated or discharged, the Lease
Indenture Trustee. The Owner Participant will give TVA and, so long as the Lien of the Lease
Indenture has not been terminated or discharged, the Lease Indenture Trustee, at least 15 days’
prior notice of any proposed amendment or supplement to the Trust Agreement (other than an
amendment solely effecting a transfer of the Beneficial Interest
pursuant to Section 7.1 hereof)
and deliver true, complete and fully executed copies to TVA of any amendment or supplement to the
Trust Agreement. No amendment or supplement to the Trust Agreement that could materially adversely
affect the interests of the Lease Indenture Trustee shall become effective without the written
consent of the Lease Indenture Trustee.

25

 

     Section 7.4 Bankruptcy Filings. The Owner Participant agrees that it will not file a petition, or
join in the filing of a petition, seeking reorganization, arrangement, adjustment or composition
of, or in respect of, the Owner Lessor under the Bankruptcy Code, or any other applicable Federal
or state law or the law of the District of Columbia.

     Section 7.5 Actions. The Owner Participant agrees that it will not cause the Owner Lessor to take
any action prohibited by this Agreement or any other Operative
Document.

     Section 7.6 Appointment of Successor Trustee. Any successor Owner Trustee shall be appointed as set
forth in Section 9.1 of the Trust Agreement.

     Section 7.7 Management of Owner Lessor. The Owner Participant shall not cause the affairs of the
Owner Lessor to be conducted in contravention of the assumptions set forth in Section III of the
nonconsolidation opinion referred to in Section 4(m).

SECTION 8. COVENANTS OF THE LEASE INDENTURE TRUSTEE

     The Lease Indenture Trustee will not directly or indirectly create, incur, assume or suffer to
exist any Indenture Trustee’s Lien attributable to it and arising out of events or conditions not
related to its rights in the Indenture Estate or the administration thereof and will promptly
notify the Owner Participant, the Owner Trustee and TVA of the imposition of any such Lien of which
it has Actual Knowledge and shall promptly, at its own expense, take such action as may be
necessary to duly discharge such Indenture Trustee’s Lien.

SECTION 9. TVA’S INDEMNIFICATIONS

     Section 9.1
General Indemnity.

     (a) Claims Indemnified. Subject to the exclusions stated in paragraph (b) below, TVA agrees
to indemnify, protect, defend and hold harmless, and does hereby indemnify the Owner Participant,
the Owner Lessor, the Trust Company, the Owner Trustee, the Lease Indenture Trustee, Wilmington
Trust and the Pass Through Trustee, and their respective Affiliates, successors, assigns, agents,
directors, officers or employees (each an “Indemnitee”) against any and all Claims (including
Claims under environmental laws and Claims for misappropriation or infringement of third party
software licenses) (whether or not any of the transactions contemplated by the Operative Documents
are consummated) imposed on, incurred or suffered by or asserted against any Indemnitee in any way
relating to or resulting from or arising out of or attributable to:

     (i) the construction, financing, refinancing (including the offering and sale of the Certificates),
acquisition, operation, warranty, ownership, possession, maintenance, repair, lease, condition,
alteration, modification, restoration, refurbishing, return, purchase, sale or other disposition,
sublease, or other use or non-use of the Network, the Undivided Interest, the Software Rights or
any Component or any portion of any thereof or any interest therein;

     (ii) the conduct of the business or affairs of TVA;

26

 

     (iii)
the operations, manufacture, design, purchase, acceptance, rejection, delivery or condition of,
or improvement to, the Network, the Undivided Interest, the Software Rights or any Component or any
portion of any thereof or any interest therein;

     (iv) the Head Lease, the Network Lease or any other Operative Document, the execution or delivery
thereof or the performance, enforcement, or amendment of any terms thereof;

     (v) any environmental condition at, related in any way to or directly or indirectly caused by TVA,
the Network, the Undivided Interest, the Software Rights or any Component, or any loss of or damage
to any property, natural resources or the environment, or death of or injury to any Person,
resulting from or relating to any hazardous substance that is or was present, used, generated,
treated, stored, recycled, reclaimed, managed, transported, manufactured, released, emitted or
discharged at, on, in, under, to or from the Network, the Undivided Interest, the Software Rights
or any Component;

     (vi) the reasonable costs and expenses of the Transaction Parties in connection with waivers,
amendments or supplements to the Operative Documents requested by TVA or required by Applicable Law
or by the terms of the Operative Documents (other than, in connection with waivers, amendments or
supplements requested by the Owner Lessor or the
Owner Participant which are not required by Applicable Law or any provision of the Operative
Documents, the requirement that waivers, amendments or supplements to such Operative Documents be
evidenced in a writing);

     (vii) the imposition of any Lien other than, with respect to a particular Indemnitee, an Owner
Lessor’s Lien, an Owner Participant’s Lien, or an Indenture Trustee Lien attributable to
such Indemnitee (or a Related Party);

     (viii) any violation or alleged violation by, or liability relating to, TVA, the Network or the
transactions contemplated under the Operative Documents of, or under,
any Applicable Law, whether
now or hereafter in effect (including regulatory and environmental laws), or any action of any
Governmental Entity or other Person taken with respect to the Network, the Undivided Interest, the
Software Rights, the Operative Documents or the interests of the Owner Participant, the Owner
Lessor, the Owner Trustee, the Lease Indenture Trustee or the Pass Through Trustee under the
Operative Documents or the presence, use, storage, transportation, treatment or manufacture of any
hazardous substance in, at, under or from the Network, the Undivided Interest, the Software Rights
or any Component at any time and by any Person;

     (ix) the non-performance or breach by TVA of any obligation contained in this Agreement or any
other Operative Document or the falsity or inaccuracy of any representation or warranty of TVA
contained in this Agreement or any other Operative Document and the enforcement of any of the terms
of the Operative Documents as a
result of any Event of Default or Lease Event of Default;

27

 

     (x) the continuing fees (if any) and expenses of the Owner Lessor, the Owner Trustee and the
Independent Trustee (including the reasonable compensation and expenses of their counsel,
accountants and other professional persons) arising out of the Owner Lessor’s, Owner Trustee’s or
the Independent Trustee’s discharge of their respective duties under or in connection with the
Operative Documents;

     (xi) the continuing fees (if any) and expenses of the Lease Indenture Trustee and the Pass Through
Trustee (including the reasonable compensation and expenses of their respective counsel,
accountants and other professional persons) arising out of the discharge of their respective duties
under or in connection with the Operative Documents;

     (xii) any amount payable by the Owner Lessor under the Lease Indenture; and

     (xiii) the
transactions contemplated by the Operative Documents.

     (b) Claims Excluded. Any Claim, to the extent relating to or resulting from or arising out
of or attributable to any one or more of the following, is excluded from TVA’s agreement to
indemnify any Indemnitee under this Section 9.1:

     (i) acts, omissions or events occurring after expiration or early termination of the Network Lease
and, where required by the Network Lease, surrender to the Owner Lessor or its successor of TVA’s
interest in the Undivided Interest, other than any acts, omissions or events to cure, remediate or
correct any failure to return the Undivided Interest in compliance with the provisions of the
Network Lease; provided, however, that the foregoing shall not limit TVA’s obligations under
Section 18 of the Network Lease;

     (ii) with respect to a particular Indemnitee and Related Parties, any offer, sale, assignment,
transfer or other disposition (voluntary or involuntary) by or on behalf of (A) in the case of the
Owner Participant, the Owner Participant of any of its interest in the Beneficial Interest (other
than pursuant to Section 14), (B) in the case of the Owner Lessor, and if such action is taken at
the written direction of the Owner Participant, the Owner Participant and Related Parties, the
Owner Lessor of all or any of its interest in the Owner Lessor’s Interest, or (C) in the case of
the Lease Indenture Trustee, the Lease Indenture Trustee of any of its interest in the Lessor Note
or any Additional Lessor Notes, unless in the case of clauses (A), (B) or (C) such transfer is
required by the terms of the Operative Documents or occurs in connection with the exercise of
remedies during a Lease Event of Default;

     (iii) with respect to any Indemnitee, any Claim attributable to the negligence or willful
misconduct of such Indemnitee or a Related Party unless such negligence or willful misconduct is
attributable to any breach by TVA or its Affiliates of any covenant, representation or warranty
contained in any Operative Document;

     (iv)
as to any Indemnitee, any Claim attributable to the noncompliance of such Indemnitee or a
Related Party with any of the terms of, or any misrepresentation or breach of warranty by such
Indemnitee contained in, any Operative Document made by such Indemnitee or any breach by such
Indemnitee or a Related Party of any covenant contained in any Operative Document made by such
Indemnitee or Related Party unless

28

 

attributable
to any breach by TVA or its Affiliates of any covenant, representation or warranty
contained in any Operative Document;

     (v)
with respect to the Owner Trustee or the Trust Company, any Claim
constituting or arising from an Owner Lessor’s Lien attributable to it;

     (vi) with respect to the Owner Participant, any claim constituting or arising from an Owner
Participant’s Lien;

     (vii) any amount which constitutes Transaction Costs which the Owner Participant is obligated to
pay pursuant to Section 2.4(a) hereof or any other amount to the extent such Indemnitee or a
Related Party has expressly agreed in any Operative Document to pay such amount without express
right of reimbursement;

     (viii)
any Claim that is a Tax, or is a cost of contesting a Tax, whether or not TVA is required to
indemnify therefor pursuant to Section 9.2 or under the Tax Indemnity Agreement;

     (ix) any failure on the part of the Trust Company or the Owner Trustee to distribute in accordance
with the Trust Agreement any amounts received by it under the Operative Documents and distributable
by it thereunder;

     (x) with respect to a particular Indemnitee and Related Party, any obligation or liability
expressly assumed in any Operative Document by the Indemnitee seeking indemnification;

     (xi) with respect to any Indemnitee any amendment not requested by TVA, required by Applicable Law
or by the terms of the Operative Documents; and

     (xii) any Claim that constitutes principal or interest on the Lessor Note, any Additional Lessor
Notes, or the corresponding payments under the Certificates or any Additional Certificates;

provided that the terms “omission,” “negligence,” and “willful misconduct,” when applied with
respect to the Owner Trustee, the Trust Company, the Owner Participant, the Lease Indenture
Trustee, the Pass Through Trustee or any Affiliate of any thereof, shall not include any liability
imputed as a matter of law to such Indemnitee solely by reason of any such entity’s interest in the
Undivided Interest or the Software Rights or any such Indemnitee’s failure to act in respect of
matters which are or were the obligation of TVA under this Agreement or any other Operative
Document.

     (c) Insured Claims. Subject to the provisions of paragraph (e) of this Section 9.1, in the
case of any Claim indemnified by TVA hereunder which is covered by a policy of insurance
maintained by TVA, each Indemnitee agrees, unless it and each other Indemnitee shall waive its
rights to indemnification (for itself and each Related Party thereto) in a manner reasonably
acceptable to TVA, to cooperate, at the sole cost and expense of TVA, with insurers in exercise of
their rights to investigate, defend or compromise such Claim.

29

 

     (d) After-Tax Basis. TVA agrees that any payment or indemnity pursuant to this
Section 9.1 in respect of any Claim shall be made on an After-Tax Basis to the Idemnitees.

     (e) Claims Procedure. Each Indemnitee shall promptly after such Indemnitee shall
have Actual Knowledge thereof notify TVA of any Claim as to which indemnification is sought;
provided, that the failure so to notify TVA shall not reduce or affect TVA’s liability which it may
have to such Indemnitee under this Section 9.1, and no payment hereunder by TVA to an Indemnitee
shall be deemed to constitute a waiver or release of any right or remedy that TVA may have against
any such Indemnitee for actual damages resulting directly from such failure or delay of such
Indemnitee to give TVA such notice. Any amount payable to any Indemnitee pursuant to this Section
9.1 shall be paid within thirty (30) days after receipt of such written demand therefor from such
Indemnitee, accompanied by a certificate of such Indemnitee stating in reasonable detail the basis
for the indemnification thereby sought and (if such Indemnitee is not a party hereto) an agreement
to be bound by the terms hereof as if such Indemnitee were such a party. The foregoing shall not,
however, constitute an obligation to disclose confidential information of any kind without the
execution of an appropriate confidentiality agreement. Promptly after TVA receives notification of
such Claim accompanied by a written statement describing in reasonable detail the Claims which are
the subject of and basis for such indemnity and the computation of the amount so payable, TVA
shall, without affecting its obligations hereunder, notify such Indemnitee whether it intends to
pay, object to, compromise or defend any matter involving the asserted liability of such
Indemnitee. TVA shall have the right to investigate and so long as no Significant Lease Default or
Lease Event of Default shall have occurred and be continuing, TVA shall have the right in its sole
discretion, to defend or compromise any Claim for which indemnification is sought under this
Section 9.1 which TVA acknowledges is subject to indemnification hereunder; provided that no such
defense or compromise shall involve any danger of (i) foreclosure, sale, forfeiture or loss of, or
imposition of a Lien on any part of the Undivided Interest, the Software Rights, the Lessor Estate
or the Indenture Estate or the impairment of the Undivided Interest or the Software Rights in any
material respect or (ii) any criminal liability being incurred or any material adverse effect on
such Indemnitee, provided further, that no Claim shall be compromised by TVA on a basis that admits
any criminal violation or gross negligence or willful misconduct on the part of such Indemnitee
without the express written consent of such Indemnitee; and
provided, further, that to the extent
that other Claims unrelated to the transactions contemplated by the Operative Documents are part of
the same proceeding involving such Claim, TVA may assume responsibility for the contest or
compromise of such Claim only if the same may be and is severed from such other Claims (and each
Indemnitee agrees to use reasonable efforts to obtain such a severance). If TVA elects, subject to
the foregoing, to compromise or defend any such asserted liability, it may do so at its own expense
and by counsel selected by it. Upon TVA’s election to compromise or defend such asserted liability
and prompt notification to such Indemnitee of its intent to do so, such Indemnitee shall cooperate
at TVA’s expense with all reasonable requests of TVA in connection therewith and will provide TVA
with all information not within the control of TVA as is reasonably available to such Indemnitee
which TVA may reasonably request. Where TVA or the insurers under a policy of insurance maintained
by TVA, undertake the defense of such Indemnitee with respect to a Claim (with counsel reasonably
satisfactory to such Indemnitee and. without reservation of rights
against such Indemnitee), no
additional legal fees or expenses of such Indemnitee in connection with the defense of such Claim
shall be indemnified hereunder unless such fees or expenses were incurred at the request

30

 

of TVA or such insurers. Notwithstanding the foregoing, an Indemnitee may participate at its
own expense in any judicial proceeding controlled by TVA pursuant to the preceding provisions, hut
only to the extent that such party’s participation does not in the reasonable opinion of counsel to
TVA interfere with such control; provided, however, that such party’s participation does not
constitute a waiver of the indemnification provided in this Section 9.1; provided, further, that if
and to the extent that (i) such Indemnitee is advised by counsel that an actual or potential
conflict of interest exists where it is advisable for such Indemnitee to be represented by separate
counsel or (ii) there is a risk that such Indemnitee may be indicted or otherwise charged in a
criminal complaint and such Indemnitee informs TVA that such Indemnitee desires to be represented
by separate counsel, such Indemnitee shall have the right to control its own defense of such Claim
and the reasonable fees and expenses of such defense (including the reasonable fees and expenses of
such separate counsel) shall be borne by TVA. No Indemnitee shall enter into any settlement or
other compromise with respect to, or impair the defense of, any Claim without the prior written
consent of TVA unless the Indemnitee waives its rights to indemnification hereunder with respect to
such Claim.

     (f) Subrogation. To the extent that a Claim indemnified by TVA under this
Section 9.1 is in fact paid in full by TVA or an insurer under an insurance policy maintained by
TVA, TVA or such insurer shall be subrogated to the rights and remedies of the Indemnitee on whose
behalf such Claim was paid to the extent of such payment (other than rights of such Indemnitee
under insurance policies maintained at its own expense) with respect to the transaction or event
giving rise to such Claim. Should an
Indemnitee receive any refund, in whole or in part, with respect to any Claim paid by TVA
hereunder, it shall promptly pay over to TVA the lesser of (i) the amount refunded reduced by the
amount of any Tax incurred by reason of the receipt or accrual of such refund and increased by the
amount of any Tax (but not in excess of the amount of such reduction) saved as a result of such
payment or (ii) the amount TVA or any of its insurers has paid in respect of such Claim; provided
that, so long as a Significant Lease Default or Lease Event of Default shall have occurred and is
continuing, such amount may be held by the Owner Lessor as security for TVA’s obligations under the
Network Lease and the other Operative Documents.

     (g) Minimize
Claims. The Owner Participant, the Owner Lessor, the Owner Trustee, and
each of the other Transaction Parties will use their respective reasonable efforts to minimize
Claims indemnifiable by TVA under this Section 9.1, including by complying with reasonable requests
by TVA to do or to refrain from doing any act if such compliance is, in the good faith opinion of
the Owner Participant, the Owner Lessor, the Owner Trustee, or such other Transaction Party, as the
case may be, of a purely ministerial nature or otherwise has no unindemnified adverse impact on the
Owner Participant, the Owner Lessor, the Owner Trustee, or such Transaction Party, as the case may
be, or any Affiliate of any thereof or on the business or operations of any of the foregoing.

     Section 9.2 General Tax Indemnity.

     (a) Indemnity. Except as provided in paragraph (b) below, TVA agrees (but, in all events,
without duplication of indemnities) to indemnify on an After-Tax Basis each of the Owner
Participant, the Owner Lessor, the Trust Company, the Owner Trustee, the Lease Indenture Trustee
(both in its individual capacity and as Lease Indenture Trustee) and the Pass

31

 

Through Trustee (both in its individual capacity and as Pass Through Trustee), their
respective successors and assigns and Affiliates of each of the foregoing, and the agents,
directors, officers and employees of the foregoing (each a
“Tax Indemnitee”), and to hold each Tax
Indemnitee harmless from and to defend each Tax Indemnitee against all Taxes that are imposed upon
any Tax Indemnitee, the Network or any portion or Component thereof or any interest therein, or
upon any Operative Document or interest therein, or otherwise arising out of, in connection with or
relating to, any of the following:

     (i) the construction, financing, refinancing, acquisition, operation, warranty, ownership,
possession, maintenance, repair, lease, condition, alteration, modification, restoration,
refurbishing, return, purchase, sale or other disposition, insuring, sublease, or other use or
non-use of the Network or any portion or Component thereof or any interest therein;

     (ii) the conduct of the business or affairs of TVA or any other operator at or in connection with
the Network or any portion or Component thereof or any interest therein;

     (iii) the manufacture, design, purchase, acceptance, rejection, delivery or condition of, or
improvement to, the Network or any portion or Component thereof or any interest therein;

     (iv) the Network Lease or any other Operative Document, the execution or delivery thereof, or the
performance, enforcement or amendment of any terms thereof;

     (v) the payment or receipt of Basic Lease Rent, Supplemental Lease Rent or any other payment under
the Network Lease; or

     (vi)
otherwise relating to the transactions contemplated by the Operative Documents.

     (b) Excluded Taxes. The indemnity provided for in paragraph (a) above shall be subject to
exclusion for Taxes that are attributable to or arise as a result of any of the following (the
“Excluded Taxes”):

     (i) Taxes imposed by any U.S. federal, state or local governmental or taxing authority that are
based on or measured by gross or net income or receipts or capital or net worth (including, subject
to Sections 9.2(k) – (m) below, the Georgia Depository Financial Institutions Occupation Tax, the
Georgia Corporate Income Tax, the Georgia Net Worth Tax, the Kentucky Corporation Income Tax, the
Kentucky Corporation License Tax, the Kentucky Bank Franchise Tax, the
Mississippi Corporate Income Tax, the Mississippi Franchise Tax, the Tennessee Excise Tax, the
Tennessee Franchise Tax and the Tennessee Business Tax), but excluding (1) Taxes that are or are in
the nature of sales, use, rental, value added or ad valorem taxes (personal and real, tangible and
intangible) and (2) Taxes measured by gross income, receipts, capital or net worth imposed by any
state or local governmental unit or taxing authority that arise in connection with the provision of
Substituted Components or Substituted Network Equipment, pursuant to Section 10 or 14A of the
Lease, located in a jurisdiction other than Georgia, Kentucky, Mississippi or Tennessee;

32

 

     (ii) Taxes attributable to any period, after expiration or other termination of the Network Lease
Term, surrender of the Network to the Owner Lessor in accordance with the Network Lease and the
payment in full of all amounts payable by TVA under the Operative Documents (or, in the case of the
Lease Indenture Trustee or Pass Through
Trustee, after the repayment of the Lessor Note);

     (iii) Taxes imposed on a Tax Indemnitee attributable to the negligence or willful misconduct of
such Tax Indemnitee or any Related Party;

     (iv) Taxes imposed by any U.S. federal, state or local governmental or taxing authority that are in
the nature of capital gain, accumulated earnings, personal holding company, excess profits,
succession or estate, minimum, alternative minimum, preference, franchise, conduct of business and
other similar taxes (including, subject to Sections 9.2(k)–(m) below, the Georgia Corporate Income
Tax, the Georgia Net Worth Tax, the Georgia Depository Financial Institutions Occupation Tax, the
Kentucky Corporation Income Tax, the Kentucky Corporation License Tax, the Kentucky Bank Franchise
Tax, the Mississippi Corporate Income Tax, the Mississippi Franchise Tax, the Tennessee Excise
Tax, the Tennessee Franchise Tax and the Tennessee Business Tax), but
excluding (1) Taxes that are
or are in the nature of sales, use, rental, value added or ad valorem taxes (personal and real,
tangible and intangible) and (2) so long as not based on or
measured by net income, Taxes in the
nature of accumulated earnings, personal holding company, excess profits, succession or estate,
preference, franchise, conduct of business and other similar taxes that arise in connection with
the provision of Substituted Components or Substituted Network Equipment, pursuant to Section 10 or
14A of the Lease, located in a jurisdiction other than Georgia, Kentucky, Mississippi or Tennessee;

     (v) Taxes imposed on a Tax Indemnitee that arise out of, or are caused by, any act or omission of
such Tax Indemnitee (or any Related Party) that is expressly prohibited by the Operative Documents
or by a breach by such Tax Indemnitee (or any Related Party) of any of its representations,
warranties or covenants under any Operative Document;

     (vi) Taxes arising out of, or caused by, any assignment, sale, transfer or other disposition
(direct or indirect, including any involuntary assignment, sale, transfer or other disposition
resulting from a bankruptcy or similar proceeding for relief of debtors in which such Tax
Indemnitee is a debtor or a foreclosure by a creditor of the Tax Indemnitee) of (A) the Owner
Participant of any of its Beneficial Interest, (B) the Owner Lessor of all or any of its interest
in the Network, or (C) the Lease Indenture Trustee of any interest in the Lessor Note, any
Additional Lessor Notes or the Indenture Estate), unless such assignment, sale, transfer or other
disposition (1) occurs during the continuance of a Lease Event of Default, (2) occurs pursuant to
TVA’s exercise of an Early Purchase Option or the Purchase Option or TVA’s exercise of a right
under the Operative Documents, (3) results from any merger or consolidation of TV A or (4) results
from any sublease, assignment, rebuilding, modification, substitution, replacement or addition of
or to the Network by TVA;

33

 

     (vii) Taxes arising in connection with Owner Participant’s Liens or Owner Lessor’s Liens;

     (viii) Taxes imposed on any assignee or successor-in-interest to a Tax Indemnitee to the extent any
such Taxes exceed the Taxes that would have been imposed had no assignment or transfer taken place
determined under the law as in effect on the date of transfer; provided that this exclusion shall
not apply to (1) a transferee, assignee or successor in interest that acquires the interest of a
Tax Indemnitee pursuant to a transfer or disposition in connection with the exercise of remedies
during the continuance of a Lease Event of Default or (2) the calculation of amounts necessary to
cause a payment to be made on an After-Tax Basis;

     (ix) Taxes that are included as a part of Transaction Costs or Network Cost;

     (x) Taxes imposed on, based on, or measured by any compensation that any Owner Trustee, Pass
Through Trustee or Lease Indenture Trustee receives for its
services;

     (xi) With respect to the Owner Participant., Taxes for which TVA is obligated to indemnify the
Owner Participant under the Tax Indemnity Agreement (or which are expressly excluded from
indemnification thereunder);

     (xii) Taxes resulting from the Owner Lessor not being treated as an entity disregarded as an entity
separate and apart from its beneficial owner for income tax purposes;

     (xiii) Taxes attributable to the failure of the Tax Indemnitee to comply with certification,
information, documentation, reporting or other similar requirements concerning the nationality,
residence, identity, connection with the jurisdiction imposing such Taxes or other similar matters;
provided that the foregoing exclusion shall only apply if (1) such Tax Indemnitee is eligible to
comply with such requirement and shall have been given timely written notice of such requirement by
TVA and (2) the Tax Indemnitee shall suffer no adverse effects as a result of complying with such
requirement (unless TVA shall have indemnified the Tax Indemnitee against such adverse effects to
the reasonable satisfaction of the Tax Indemnitee);

     (xiv) Taxes imposed on a Tax Indemnitee where the Tax Indemnitee’s breach of its contest
obligations under Section 9.2(g) effectively precludes TVA’s ability to contest the Taxes (in the
manner contemplated by Section 9.2(g));

     (xv) Penalties, additions to tax or interest imposed on a Tax Indemnitee attributable to such Tax
Indemntee’s failure to comply with the requirements imposed on it under Section 6011, 6111 or 6112
of the Code or the Regulations promulgated thereunder;

     (xvi) Taxes to the extent imposed as a result of the situs, organization, place of business or the
activities of the Tax Indemnitee in the jurisdiction imposing such Taxes (other than a place of
business, situs or activities attributable to the Tax Indemnitee solely

34

 

by reason of (l) the transactions contemplated by the Operative Documents, (2) any Lessee Person
being organized or having its place of business in the taxing jurisdiction,
(3) any part of the Network being located, operated or used in the taxing jurisdiction or
(4) any payment contemplated by the Operative Documents being made by or on behalf of a Lessee
Person from the taxing jurisdiction);

     (xvii) Taxes to the extent imposed on any Tax Indemnitee resulting from an amendment, modification,
supplement or waiver to any Operative Document which was not requested fay TV A and as to which TVA
is not a party and the Tax Indemnitee (or any Related Party) is a party unless such amendment,
modification, supplement or waiver (A) was required by Applicable Law or the Operative Documents,
(B) may be necessary or appropriate to, and is in conformity with, any amendment to any Operative
Document requested by TVA in writing or required by Applicable Law, or (C) is made while a Lease
Event of Default shall have occurred and be continuing;

     (xviii) Taxes imposed under Section 4975 of the Code or under subtitle B of Title I of ERISA
(unless imposed due to a misrepresentation by TVA); and

     (xix) Taxes imposed or collected under Sections 1441 through 1446 of the
Code.

Each Tax Indemnitee, at the TVA’s sole cost and expense, will use reasonable efforts to
minimize the Taxes indemnifiable by TVA, including by complying with reasonable requests made by
TVA to do or to refrain from doing any act (including the execution of any certificates or other
documents required to establish an exemption or relief from any Tax) if such efforts or such
compliance is of a purely ministerial nature and has no material adverse impact on the Tax
Indemnitee (unless such adverse impact is one of a nature and quality such that it is subject to
indemnification, and TVA has indemnified the Tax Indemnitee against such adverse impact in a manner
reasonably satisfactory to the Tax Indemnitee).

     (c) Payment. Each payment required to be made by TVA to a Tax Indemnitee pursuant to this
Section 9.2 shall be paid either (i) when due directly to the applicable taxing authority by TVA if
it is permitted to do so, or (ii) where direct payment is not permitted and with respect to gross
up amounts, in immediately available funds to such Tax Indemnitee by the later of (A) 30 days
following TVA’s receipt of the Tax Indemnitee’s written demand for the payment (which demand shall
be accompanied by a statement of the Tax Indemnitee describing in reasonable detail the Taxes for
which the Tax Indemnitee is demanding indemnity and the computation of such Taxes), (B) subject to
paragraph (g) below, in the ease of amounts which are being contested pursuant to such paragraph
(g), at the time and in accordance with a final determination of such contest or (C) in the case of
any indemnity demand for which TVA has requested review and determination pursuant to paragraph (d)
below, the completion of such review and determination; provided, however, in no event later than
the date which is five Business Days prior to the date on which such Taxes are required to be paid
to the applicable taxing authority. Any amount payable to TVA pursuant to paragraph (e) or (f)
below shall be paid promptly after the Tax Indemnitee realizes (or is deemed to realize) a Tax
Benefit giving rise to a payment under paragraph (e) or receives a refund or credit giving rise to
a payment under paragraph (f), as the case may be, and shall be accompanied by a statement of the
Tax

35

 

Indemnitee computing in reasonable detail the amount of such payment. Any amount that would
be payable to TVA pursuant to paragraph (e) or (f) below but for the fact that such amount would be
in excess of the amount of indemnity(ies) previously paid to the Tax Indemnitee by TVA may be used
as an offset against any future general tax indemnity payments owed by TVA to such Tax Indemnitee.
Upon the final determination of any contest pursuant to paragraph (g) below in respect of any Taxes
for which TVA has made a Tax Advance, the amount of TVA’s obligation under paragraph (a) above
shall be determined as if such Tax Advance had not been made. Any obligation of TVA under this
Section 9.2 and the Tax Indemnitee’s obligation to repay the Tax Advance will be satisfied first by
set off against each other, and any difference owing by either party will be paid within 10 days of
such final determination.

     (d) Independent Examination. Within 15 days after TVA receives any computation from
a Tax Indemnitee (pursuant to paragraph (c) above), TVA may request in writing that an independent
public accounting or lease advisory firm jointly selected by the Tax Indemnitee and TVA review and
determine on a confidential basis the amount of any indemnity payment by TVA to the Tax Indemnitee
pursuant to this Section 9.2 or any payment by a Tax Indemnitee to TVA pursuant to paragraph (e) or
(f) below. The Tax Indemnitee shall cooperate with such accounting firm and supply it with all
information (other than income tax returns or books) reasonably necessary for the accounting firm
to conduct such review and determination provided, that such accounting firm shall agree in writing
in a manner satisfactory to the Tax Indemnitee to maintain the confidentiality of such information.
The parties hereto agree that the independent public accounting firm’s sole responsibility shall be
to verify the computation of any payment pursuant to this Section 9.2 and that matters of
interpretation of law or of this Participation Agreement or any other Operative Document are not
within the scope of the independent accountant’s responsibility. The fees and disbursements of
such accounting firm will be paid by TVA; provided that such fees and disbursements will be paid by
the Tax Indemnitee if the verification results in an adjustment in TVA’s favor of five percent or
more of the indemnity payment or payments computed by the Tax Indemnitee (calculated using the
Discount Rate).

     (e) Tax
Benefit. If, as the result of any Taxes paid or indemnified against by TVA
under this Section 9.2, the aggregate Taxes payable (or deemed payable) by the Tax Indemnitee in
connection with such payment for any taxable year are less (whether by reason of a deduction,
credit, allocation or apportionment of income or otherwise and computed using the same assumptions
as set forth in the second sentence under the definition of After Tax Basis) than the amount of
such Taxes that otherwise would have been payable by such Tax
Indemnitee (a “Tax Benefit”), then to
the extent such Tax Benefit was not
taken into account in determining the amount of indemnification payable under paragraph (a) above
and provided no Lease Event of Default shall have occurred and be continuing (in which event the
payment provided under this Section 9.2(e) shall be deferred until the Lease Event of Default has
been cured), such Tax Indemnitee shall pay to TVA the lesser of (A) (y) the amount of such Tax
Benefit, plus (z) an amount equal to any United States Federal, state or local income tax benefit
realized by such Tax Indemnitee as a result of the payment under clause (y) above and this clause
(z) (such benefit to be determined using the same assumptions as set forth in the second sentence
under the definition of After-Tax Basis) and (B) the amount of the indemnity(ies) paid pursuant to
this Section 9.2 giving rise to such Tax Benefit. If it is subsequently determined that the Tax
Indemnitee was not entitled to such Tax Benefit, the portion of such Tax Benefit that is required

36

 

to be repaid or recaptured will be treated as Taxes for which TVA shall indemnify the Tax
Indemnitee pursuant to this Section 9.2 without regard to
paragraph (b) hereof.

     (f) Refund. If a Tax Indemnitee obtains a refund or credit of all or part of any
Taxes paid, reimbursed or advanced by TVA pursuant to this Section 9.2, the Tax Indemnitee promptly
shall pay to TVA (x) the amount of such refund or credit plus (y) an amount equal to any United
States Federal, state or local income tax benefit realized by such Tax Indemnitee as a result of
the payments to TVA under clause (x) above and this clause (y) (such amounts to be determined using
the same assumptions as set forth in the second sentence under the definition of After-Tax Basis),
provided that (A) if at the time such payment is due to TVA a Lease Event of Default shall have
occurred and be continuing, such amount shall not be payable until such Lease Event of Default has
been cured and (B) the amount payable to TVA pursuant to this sentence shall not exceed the amount
of the indemnity(ies) paid pursuant to Section 9.2 in respect of
such refunded or credited Taxes.
If it is subsequently determined that the Tax Indemnitee was not entitled to such refund or credit,
the portion of such refund or credit that is required to be repaid or recaptured will be treated as
Taxes for which TVA shall indemnify the Tax Indemnitee pursuant to this Section 9.2 without regard
to paragraph (b) hereof. If, in connection with a refund or credit of all or part of any Taxes
paid, reimbursed or advanced by TVA pursuant to this
Section 9.2, a Tax Indemnitee receives an
amount representing interest on such refund or credit, the Tax Indemnitee promptly shall pay to TVA
(1) the amount of such interest that shall be fairly attributable to such Taxes paid, reimbursed or
advanced by TVA prior to the receipt of such refund or credit and (2) any Tax savings realized by
such Tax Indemnitee as a result of the payments made by the Tax
Indemnitee under (1) and (2) (such
Tax savings to be determined using the same assumptions as set forth in the second sentence under
the definition of After-Tax Basis).

     (g) Contest.

     (i) Notice of Contest. If a written claim for payment is made by any taxing authority against a
Tax Indemnitee for any Taxes with respect to which TVA may be liable
for indemnity hereunder (a “Tax Claim”), such Tax Indemnitee shall give TVA written notice of such Tax Claim promptly after
its receipt, and shall furnish TVA with copies of such Tax Claim and all other writings received
from the taxing authority to the extent relating to such claim, provided that failure so to notify
TVA shall not relieve TVA of any obligation to indemnify the Tax Indemnitee hereunder except as
provided in clause (xiv) of Section 9.2(b). The Tax Indemnitee shall not pay such Tax Claim until
at least 30 days after providing TVA with such written notice, unless required to do so by law or
regulation.

     (ii)
Control of Contest. Subject to subsection (g)(iii) below, TVA will be entitled to contest
(acting through counsel selected by TVA and reasonably acceptable to the Tax Indemnitee), and
control the contest of, any Tax Claim if (i) the contest of the Tax Claim may be pursued in the
name of TVA; (ii) the contest of the Tax Claim mast be pursued in the name of the Tax Indemnitee
but can be pursued independently from any other proceeding involving a tax liability of such Tax
Indemnitee for which TVA is not responsible (with the Tax Indemnitee agreeing to use reasonable
efforts to sever the contest of any indemnified Tax from the contest of any unindemnified Tax so
that TVA

37

 

can control the contest of the indemnified Tax), or (iii) the Tax Indemnitee requests that TVA
control such contest. In the case of all other Tax Claims, subject to subsection (g)(iii) below,
the Tax Indemnitee will contest the Tax Claim if TVA shall request that the Tax be contested, and
the following rules shall apply with respect to such contest:

     (1) the Tax Indemnitee will control the contest of such Tax Claim in good faith (acting
through counsel selected by the Tax Indemnitee and reasonably acceptable to TVA),

     (2)
at TVA’s written request, if payment is made to the applicable taxing authority, the Tax Indemnitee shall use all reasonable efforts to obtain a refund thereof in appropriate
administrative or judicial proceedings, and

     (3) the Tax Indemnitee shall not otherwise settle, compromise or abandon such contest without
TVA’s prior written consent except as provided in paragraph
(g)(iv) below.

In either case, the party conducting such contest shall consult with and keep reasonably informed
the other party and its designated counsel with respect to such Tax Claim, shall provide the other
party with copies of any reports or claims issued by the relevant auditing agents or taxing
authority as well as redacted portions of tax returns, and shall consider and consult in good faith
with the other party regarding any request (a) to resist payment of Taxes if practical and (b) not
to pay such Taxes except under protest if protest is necessary and proper (but the decision
regarding what actions are to be taken shall be made by the controlling party in its sole judgment;
provided, however, that (subject to subsection (g)(iv) below) if the Tax Indemnitee is the
controlling party, such Tax Indemnitee may not settle the contest without the consent of TVA).

     (iii) Conditions of Contest. Notwithstanding the foregoing, in no event shall TVA be
permitted or a Tax Indemnitee be required to contest (or to continue the contest of) any Tax Claim,
unless:

     (1) within 30 days after notice by the Tax Indemnitee to TVA of such Tax Claim, TVA shall
request in writing to the Tax Indemnitee that such Tax Claim be contested; provided that if a
shorter period is required for taking action with respect to such Tax Claim and the Tax Indemnitee
notifies TVA of such requirement, TVA shall use reasonable efforts to request such contest within
such shorter period,

     (2) no Lease Event of Default has occurred and is continuing,

     (3) there is (i) no risk of sale, forfeiture or loss of, or the creation of a Lien on the
Owner Lessor’s or Owner Participant’s interest in the Network or any portion or Component thereof
or any interest therein (other than a Permitted Lien) and (ii) no risk of the imposition of
criminal penalties as a result of such Tax Claim; provided that this clause (3) shall not apply if
the Tax is fully paid in either

38

 

manner specified in clause (4) below or TVA posts security satisfactory to the Tax Indemnitee,

     (4) if such contest involves payment of such Tax, TVA will either advance to the Tax
Indemnitee on an interest-free basis and with no after-tax cost to
such Tax Indemnitee (a “Tax
Advance”) or pay such Tax Indemnitee the amount payable by TVA pursuant to 
Section 9.2(a) above
with respect to such Tax,

     (5) TVA agrees to pay (and pay on demand) all reasonable costs and expenses incurred by the
Tax Indemnitee in connection with the contest of such claim (including all reasonable legal fees
and disbursements),

     (6) the Tax Indemnitee has been provided at TVA’s sole expense with an opinion of independent
tax counsel selected by TVA and reasonably acceptable to the Tax Indemnitee to the effect that
there is a Reasonable Basis for contesting such Tax Claim,

     (7) the amount of Taxes in controversy, taking into account the amount of all similar and
logically related Taxes with respect to the transactions contemplated by Operative Documents that
could be raised in any other year (including any future year) not barred by the statute of
limitations, exceeds $50,000,

     (8) TVA shall acknowledge in writing its liability to indemnify the Tax Indemnitee hereunder
in respect of such claim if the contest is not successful, provided that such acknowledgment of
liability shall not be binding if the contest is
resolved on a basis from which it can be established that TVA would not be required to indemnify
the Tax Indemnitee under this Section 9.2 in the absence of such acknowledgment, and

     (9) in the case of a judicial appeal, no appeal to the U.S. Supreme Court shall be required
of the Tax Indemnitee or shall be permitted by TVA.

     (iv)
Waiver of Indemnification. Notwithstanding anything to the contrary contained in this Section
9.2, the Tax Indemnitee at any time may elect to decline to take any action or any further action
with respect to a Tax Claim and may in its sole discretion settle or compromise any contest with
respect to such Tax Claim without TVA’s consent if the Tax Indemnitee:

     (1) waives its right to any indemnity payment by TVA pursuant to this Section 9.2 in respect of
such Tax Claim (and any other claim for Taxes with respect to any other taxable year the contest of
which is effectively precluded by the Tax Indemnitee’s decision not to take (or not to take any
further) action with respect to the Tax Claim), and

39

 

     (2) promptly repays to TVA any Tax Advance and any amount paid to such Tax Indemnitee under Section
9.2(a) above in respect of such Taxes, but not any costs or expenses with respect to any such
contest.

Except as provided in the preceding sentence, any such waiver shall be without prejudice to the
rights of the Tax Indemnitee with respect to any other Tax Claim.

     (h) Reports.
If any report, statement or return is required to be filed by a Tax Indemnitee
with respect to any Tax that is subject to indemnification under this
Section 9.2, TVA will (1)
notify the Tax Indemnitee in writing of such requirement not later than 30 days prior to the date
such report, statement or return is required to be filed (determined without regard to extensions)
and (2) if so directed by the Tax Indemnitee and if the return to be filed reflects only
information in respect of the transactions contemplated by the Operative Documents, prepare and
furnish to such Tax Indemnitee not later than 30 days prior to the date such report, statement or
return is required to be filed (determined without regard to extensions) a proposed form of such
report, statement or return for filing by the Tax Indemnitee. Each Tax Indemnitee and TVA will
timely provide the other with all information in its possession that the other party may reasonably
require and request to satisfy its obligations under this paragraph (h).

     (i) Non-Parties.
If a Tax Indemnitee is not a party to this Agreement, TVA may require such
Tax Indemnitee to agree in writing, in a form reasonably acceptable to TVA, to the terms of this
Section 9 prior to making any payment to such Tax Indemnitee under this Section. Subject to the
preceding sentence, TVA’s obligations under this Section 9 shall inure to the benefit of each and
every Tax Indemnitee without regard to whether such Tax Indemnitee is a party to this Agreement.

     (j) Certain Withholding Taxes. If the Lease Indenture Trustee fails to withhold a Tax
required to be withheld by it pursuant to Section 9.12 of the Lease Indenture on payments made to a
Noteholder, or if the Pass Through Trustee fails to withhold a Tax
required to be withheld by it
pursuant to Section 7.15 of the Pass Through Trust Agreement on payments made to a
Certificateholder or any claim is otherwise asserted by any taxing authority against the Owner
Lessor or the Owner Participant for any such withholding Tax, TVA will indemnify (on an After-Tax
Basis) the Owner Lessor and the Owner Participant from and against any such Taxes (without regard
to the exclusions set forth in Section 9.2(b) hereof) and any costs or expenses incurred by the
Owner Lessor or the Owner Participant in connection with any such claim. Upon the payment of any
such indemnity, TVA shall be subrogated to any rights which the indemnified party may have against
the party responsible for the failure to withhold.

     (k) Mississippi Franchise Tax. Notwithstanding anything to the contrary contained in
Section 9.2(b)(i) or (iv) hereof, TVA shall indemnify the Owner Participant against any Taxes it is
required to pay pursuant to Section 27-13-1 et seq. of the Mississippi Code as a result of its
participation in the transactions contemplated by the Operative Documents provided, however, that
the maximum amount payable by TVA as to any year pursuant to this
Section 9.2(k) and 9.2(k) in the
Other Participation Agreements with respect to the Owner Participant and the Other Owner
Participants (on an aggregate basis) shall not exceed the amount set forth with respect to that
year in column A of Schedule 4 attached hereto
(computed on a non-cumulative basis). Nothing in this Section 9.2(k) shall preclude indemnification
against any Taxes required to be

40

 

paid pursuant to Section 27-13-1 et seq. of the Mississippi Code with respect to any year
or years which are assessed in later years, provided that the aggregate amount payable to the Owner
Participant and Other Owner Participants, as to any year, is not in excess of the amount
set forth with respect to that year in column A of Schedule 4 attached hereto (computed on a
non-cumulative basis).

     (1) Kentucky
Corporation License Tax. Notwithstanding anything to the contrary contained in
Section 9.2(b)(i) or (iv) hereof, TVA shall indemnify the Owner Participant against any Taxes it is
required to pay pursuant to Section 136.070 et seq. of the Kentucky Code as a result of its
participation in the transactions contemplated by the Operative Documents provided, however, that
the maximum amount payable by TVA as to any year pursuant to this Section 9.2(1) and 9.2(1) io the
Other Participation Agreements with respect to the Owner Participant and the Other Owner
Participants (on an aggregate basis) shall not exceed the amount set forth with respect to that
year in column B of Schedule 4 attached hereto (computed on a non-cumulative basis). Nothing in
this Section 9.2(1) shall preclude indemnification against any Taxes required to be paid pursuant
to Section 136.070 et seq. of the Kentucky Code with respect to any year or years which are
assessed in later years, provided that the aggregate amount payable to the Owner Participant and
Other Owner Participants, as to any year, is not in excess of the amount set forth with, respect to
that year in column B of Schedule 4 attached hereto (computed on a non-cumulative basis).

     (m) Georgia
Net Worth Tax. Notwithstanding anything to the contrary contained in Section
9.2(b)(i) or (iv) hereof, TVA shall indemnify the Owner Participant against any Taxes it is
required to pay pursuant to Section 48-13-72 et seq. of the Georgia Code as a result of its
participation in the transactions contemplated by the Operative Documents provided, however, that
the maximum amount payable by TVA as to any year pursuant to this Section 9.2(m) and 9.2(m) in the
Other Participation Agreements with respect to the Owner Participant and the Other Owner
Participants (on an aggregate basis) shall not exceed the amount set forth with respect to that
year in column C of Schedule 4 attached hereto (computed on a non-cumulative basis). Nothing in
this Section 9.2(m) shall preclude indemnification against any Taxes required to be paid pursuant
to Section 48-13-72 et seq. of the Georgia Code with respect to any year or years which are
assessed in later years, provided that the aggregate amount payable to the Owner Participant and
Other Owner Participants, as to any year, is not in excess of the amount set forth with respect to
that year in column C of Schedule 4 attached hereto (computed on a non-cumulative basis).

SECTION
10. TVA’S RIGHT OF QUIET ENJOYMENT

     Each party to this Agreement acknowledges notice of the Network Lease and expressly, severally and
as to its own actions only, agrees that, so long as no Lease Event of Default has occurred and is
continuing, it shall not take or cause to be taken any action contrary to TVA’s rights under the
Network Lease, including the right to possession, use and quiet enjoyment of the Undivided
Interest.

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SECTION 11. REFINANCINGS

     Section 11.1 Optional Refinancing of Lease Debt. TVA will have the right, on no more than three
instances during the Network Lease Term, to require the Owner Lessor to, and the Owner Lessor
shall, redeem or refinance the Lessor Note, in whole but not in part, through the issuance of
Additional Lessor Notes either in the public or private market; provided that all conditions to the
issuance of Additional Lessor Notes contained in Section 2.12 of the Lease Indenture shall have
been satisfied; and provided, further, that, TVA shall simultaneously exercise the right to
refinance the Lease Debt pursuant to Section 11.1 of each of the Other Participation Agreements.
Any refinancing in accordance with this Section 11.1 shall also be subject to the satisfaction of
the following additional conditions:

     (i) such debt may be issued and sold upon the terms and conditions set forth in the Operative
Documents and in an amount adequate to accomplish such redemption or refinancing;

     (ii) appropriate adjustments to Basic Lease Rent and Termination Value shall be made to protect the
Owner Participant’s Net Economic Return;

     (iii) the Owner Lessor and the Owner Participant shall receive copies of and be permitted to rely
upon the legal opinion delivered to the Lease Indenture Trustee pursuant to Section 2.12 of the
Lease Indenture; and

     (iv) the Owner Participant shall receive (x) an opinion satisfactory to it that the refinancing,
including any payments to be made in connection therewith and any adjustments described in Section
11.l(ii) (as opposed to the right of TVA to require such refinancing), shall not result in any
incremental tax risk to the Owner Participant, or (y) an indemnification from TVA against such
risk in form and substance satisfactory to the Owner Participant.

     Section 11.2 Mandatory Sale of Lessor Notes or Issuance of Additional Lessor Notes on Early
Purchase Date. Unless TVA shall have given irrevocable notice of its exercise of the Early Purchase
Option pursuant to Section 15.1 of the Network Lease, TVA shall, at its own cost and expense,
either (a) cause the Owner Lessor to issue Additional Lessor Notes pursuant to Section 2.12 of the
Lease Indenture to refinance the Lessor Notes on the Early Purchase Date or (b) obtain a purchaser
or purchasers for the Lessor Notes to purchase the Lessor Notes on the Early Purchase Date from the
Pass Through Trustee for a price equal to the outstanding principal balance thereof plus accrued
interest. If Additional Lessor Notes are issued pursuant to clause (a) of the preceding sentence,
such Additional Lessor Notes shall be in an aggregate principal amount equal to the Lessor Notes
refinanced and have a final maturity and amortization identical to the Lessor Notes refinanced. TVA
shall be responsible for the satisfaction of all conditions to the issuance of Additional Lessor
Notes, including those in clauses (i) through (iv) in Section 11.1 hereof and those in Section 2.12
of the Lease Indenture unless it has found a purchaser for the Lessor Notes at par plus accrued
interest. In connection with the issuance of Additional Lessor Notes in accordance with this
Section 11.2, Basic Lease Rent and Termination Values shall be adjusted in accordance with Section
3.4 of the Network Lease, but only to reflect a change in the
interest rate of the Lessor Notes.

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     Section 11.3 Cooperation. The Owner Participant and TVA will cooperate in connection with any
refinancing or assumption of the Lease Debt, so long as such refinancing is effected in accordance
with the terms of the Operative Documents. In furtherance thereof, the Owner Participant will
execute such agreements and documents as may be necessary with respect to any such refinancing and
are reasonably requested by TVA and will instruct the Owner Lessor to act accordingly. TVA shall
pay, on an After-Tax Basis, all reasonable costs and expenses of the Transaction Parties, including
the reasonable fees and expenses of counsel to the Owner Participant, the Owner Lessor, the Owner
Trustee, the Lease Indenture Trustee and the Pass Through Trustee, in each case to the extent
incurred in connection with any financing pursuant to
Sections 11.1 and 11.2 hereof whether or not
any such financing is consummated.

SECTION 12. PRE-CLOSING ADJUSTMENTS TO LEASE SCHEDULES

     Section 12.1 Lease Schedules. The Basic Lease Rent and Termination Value schedules for the Network
Lease shall be set forth in Schedules 1A and 2 thereto and shall reflect any changes in the Pricing
Assumptions (other than changes in Transaction Costs unless consented to by the Owner Participant
and TVA).

     Section 12.2
Pre-closing Adjustments.

     (i) On or before the Closing, Basic Lease Rent and Termination Values shall be adjusted, either
upward or downward, in accordance with Section 3.4 of the Network Lease at the written request of
TVA or the Owner Participant made prior to the Closing, to reflect any enactment, promulgation,
release or adoption of, amendment to or change in the Code, Treasury Regulations (final or
temporary), Revenue Rulings, Revenue Procedures or a Treasury Department or IRS administrative
notice or announcement (“Tax Law Change”) that is enacted, promulgated, released, adopted, amended,
changed or proposed on or prior to the Closing Date;

provided that if any adjustment required by this paragraph would cause the spread between the
implicit financing rate to TVA through the Early Purchase Date and TVA’s 10-year bonds current
yield to maturity to narrow by more than two basis points, TVA shall not be obligated to close the
Transaction.

     Any adjustment pursuant to this Section 12.2 shall be made in a manner that is consistent with any
uneven rent safe harbor provided under Section 467 of the Code and the Treasury Regulations
promulgated thereunder, but only to the extent (i)
that Basic Lease Rent prior to such adjustment was so consistent, thereby not increasing the
possibility, if any, of the Network Lease being determined to be a “disqualified leaseback long
term agreement” within the meaning of Section 467 of the Code or the Treasury Regulations
promulgated thereunder, and (ii) that any Tax Law Change does not affect the uneven rent safe
harbor provided under Section 467 of the Code and the Treasury Regulations promulgated thereunder.
Any such adjustment shall be calculated (A) first, to maintain the Owner Participant’s Net Economic
Return, and (B) second, to the extent consistent with clause (A), to minimize the internal rate of
return of Basic Lease Rent through the Early Purchase Date. Adjustments will be made using the same
method of computation and assumptions originally used (other than those that have changed as the
result of the event giving rise to the adjustment) in the calculation of the Basic Lease Rent and

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corresponding adjustments to Termination Values will be made. Adjustments made pursuant to this
Section 12 shall be subject to verification as provided in Section 3.4(d) of the Network Lease.

SECTION 13. SPECIAL LESSEE TRANSFERS

     Upon the occurrence of a Special Lessee Transfer Event, TVA (or its designee as provided below)
may, in lieu of exercising its rights under Section 13 of the Network Lease or complying with its
obligation under Section 10 of the Network Lease as a result of a Regulatory Event of Loss, as the
case may be, upon not less than 30 days’ written notice to the Owner Participant and the Lease
Indenture Trustee (x) subject to the limitations set forth in Section 7.1 (a) (other than
clauses (iv) and (v) therein), purchase all of the Owner Participant’s Beneficial Interest or (y)
purchase the Owner Lessor’s Interest (either such purchase being referred to as the “Special
Lessee Transfer”) on the applicable Termination Date at a price equal to the Special Lessee
Transfer Amount determined as of the date of such transfer. On the applicable Termination Date,
TVA (or its designee) shall pay to the Owner Participant the Special Lessee Transfer Amount
determined as of such date, plus all Rent due and payable to the Owner Participant on such date
(including all costs and expenses of the Owner Participant and all sales, use, value added and
other Taxes covered by Section 9.2 hereof associated with the Special Lessee Transfer pursuant to
this Section 13, to the extent such amounts have not otherwise been reimbursed by TVA pursuant to
this Section 13, it being understood that any transfer pursuant to this Section 13 shall not be
considered a voluntary transfer for purposes of Section 9.1 or 9.2). Concurrently with the payment
of all sums required to be paid pursuant to this Section 13, and the transfer of the Owner
Participant’s Beneficial Interest or the Owner Lessor’s Interest in accordance with clause (ii)
below: (i) TVA shall cease to have any liability to the Owner Participant with respect to the
Operative Documents, except for obligations (including Sections 9.1 and 9.2 hereof and the Tax
Indemnity Agreement) surviving for the benefit of the Owner Participant and its Related Parties
pursuant to the express terms of any Operative Document or which have otherwise accrued but not
been paid as of such date and (ii) the Owner Participant will transfer the Owner Participant’s
Beneficial Interest to TVA (or its designee) or cause the transfer of the Owner Lessor’s Interest
to TVA (or its designee) in the case of a transfer of the Beneficial Interest, pursuant to an
Assignment and Assumption Agreement, and, in the case of a transfer of the Owner Lessor’s Interest,
on an “as is,” “where is” and “with all faults” basis (by an appropriate instrument of transfer),
without representations or warranties other than a warranty from the Owner Participant as to the
absence of Owner Participant’s Liens and a warranty from the Owner Lessor as to the absence of
Owner Lessor’s Liens. At the time of any transfer under this Section 13 (i) the Owner Participant
shall not suffer any economic detriment as a result of such transfer (as compared to the economic
detriment had TVA exercised its rights under Section 13 of the Network Lease), (ii) the Lease
Indenture Trustee shall have received an opinion from Orrick,
Herrington & Sutcliffe LLP (or such
other national recognized law firm that shall be familiar with the Bond Resolution) to the effect
that such transfer does not affect the payment priority of Basic Lease Rent under the Bond
Resolution from that described in
Section 3.1(s) hereof, and (iii) TVA will pay all reasonable
costs and expenses of the Transaction Parties (including reasonable attorneys’ fees and
disbursements) in connection with any such transfer. It is understood and agreed among the parties
hereto that the transaction contemplated by this Section 13 shall not effect a merger of TVA’s
interest in the Undivided Interest with the Owner Lessor’s Interest. Subsequent to such transfer,
TVA and the Owner Lessor may, without

44

 

the consent of the Lease Indenture Trustee or the Pass Through Trustee, waive the Regulatory Event
of Loss or the Burdensome Termination Event, as the case may be, that gave rise to the Special
Lessee Transfer Event and the Network Lease shall continue in full force and effect in accordance
with its terms.

SECTION 14. RIGHT OF FIRST OFFER

     In the event the Owner Participant desires to, directly or indirectly, sell, lease, convey or
otherwise transfer its Beneficial Interest at any time prior to the expiration or early termination
of the Network Lease in accordance with Section 10, 13, 14, 15 or 18 thereof to any Person other
than TVA, then unless such sale, lease, conveyance or transfer (i) is in connection with a sale by
the Owner Participant of all or substantially all of its assets in a transaction tantamount to a
merger, (ii) is to an Affiliate of the Owner Participant, (iii) occurs when a Significant Lease
Default or Lease Event of Default shall have occurred and be continuing, or (iv) is to an Other
Owner Participant, the Owner Participant shall first offer the Beneficial Interest to TVA on the
terms and conditions set forth in this Section 14. Such offer shall be made to TVA in the form of a
proposed term sheet, which proposed term sheet shall include a full and complete statement of the
price and all the terms, conditions and provisions upon which the Owner Participant would he
willing to transfer its Beneficial Interest. TVA will thereafter have the right within a period of
thirty (30) days from and after the receipt by TVA of such
proposed term sheet to notify the Owner
Participant of its irrevocable intent to exercise its right hereunder. If TVA elects to exercise
the right provided in the preceding sentence, it will within sixty (60) days of such notice
execute a contract on the same terms and conditions as the offer giving rise to such right. If TVA
does not give such notice to the Owner Participant within the thirty (30) day period or, having
given such notice, does not execute such a contract within sixty (60) days of such notice, the
Owner Participant will be free to proceed under the terms and conditions substantially as set forth
in the proposed term sheet delivered to TVA, unless, in the case of a failure to execute the
contract within sixty (60) days, if such failure is attributable to a failure of the Owner
Participant to proceed with such sale or to negotiate such contract on the basis of the terms,
conditions and provisions of the proposed term sheet. In the event that such terms or conditions
are revised in any way that materially changes the agreement for sale, lease, conveyance or
transfer such that the terms of sale are substantially less favorable to the Owner Participant
(including any reduction in price or a change in the terms of payment
thereof in a manner that is
beneficial to the potential purchaser), the Owner Participant must again comply with the notice and
offer provisions of this Section 14. Any such sale, lease, conveyance or transfer to TVA shall be
subject to the provisions of Section 7.1 (a) hereof other than Sections 7.1 (a) (iv) and (v) and
the Owner Participant shall not be required to pay the fees and expenses of TVA in connection with
such transfer.

SECTION
15. MISCELLANEOUS

     Section 15.1
Consents. The Owner Participant will not unreasonably withhold its consent to any
consent requested of it or the Owner Lessor under the terms of the Operative Documents that by its
terms is not to be unreasonably withheld by it or the Owner Lessor. The Lessee will not
unreasonably withhold its consent to any consent requested of it under the terms of the Operative
Documents that by its terms is not to be unreasonably withheld by it.

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     Section 15.2 Successor Owner Trustee. The parties hereto agree that the transfer or assignment
pursuant to the terms of the Trust Agreement by the Owner Trustee to a successor Owner Trustee will
not violate the terms of any Operative Document.

     Section 15.3 Bankruptcy of Lessor Estate. If (i) all or any part of the Lessor Estate becomes the
property of a debtor subject to the reorganization provisions of the Bankruptcy Code, as amended
from time to time, (ii) pursuant to such reorganization provisions the Owner Participant is
required, by reason of the Owner Participant being held to have recourse liability to the debtor or
the trustee of the debtor directly or indirectly, to make payment on account of any amount payable
as principal or interest on the Lessor Note, and (iii) the Lease Indenture Trustee actually
receives any Excess Amount, as defined below, which reflects any payment by the Owner Participant
on account of clause (ii) above, the Lease Indenture Trustee shall, upon obtaining Actual Knowledge
thereof, upon written request of the Owner Participant, promptly refund to the Owner Participant
such Excess Amount. For purposes of this Section 15.3, “Excess Amount” means the amount by which
such payment exceeds the amount which would have been received by the Lease
Indenture Trustee if the Owner Participant had not become subject to the recourse liability
referred to in clause (ii) above. Nothing contained in this Section 15.3 shall prevent the Lease
Indenture Trustee from enforcing any personal recourse obligations (and retaining the proceeds
thereof) of the Owner Participant as contemplated by this Participation Agreement (in addition to
those referred to in clause (ii)).

     Section 15.4
Amendments and Waivers. No term, covenant, agreement or condition of this Agreement
may be terminated, amended or compliance therewith waived (either generally or in a particular
instance, retroactively or prospectively) except by an instrument or instruments in writing
executed by TVA, the Owner Participant, the Owner Lessor and the Lease Indenture Trustee; provided,
however, that, in addition to the requirements above, no amendment, waiver or consent shall (x)
adversely affect the Pass Through Trustee’s right to indemnification or repayment of costs and
expenses hereunder or increase its obligations hereunder unless such amendment, waiver or consent
is executed or approved in writing by the Pass Through Trustee, or (y) adversely affect the Trust
Company’s right to indemnification or repayment of costs and expenses hereunder or increase the
obligations of the Trust Company hereunder unless such amendment, waiver or consent is executed or
approved in writing by the Trust Company. Nothing in this Section 15.4 shall prevent TVA or the
Owner Participant from waiving any provision of this Agreement which is for its benefit and not for
the benefit of any other party hereto.

     Section 15.5 Notices. Unless otherwise expressly specified or permitted by the terms hereof, all
communications and notices provided for herein shall be in writing or by a telecommunications
device capable of creating a written record, and any such notice shall become effective (a) upon
personal delivery thereof, including by overnight mail or courier service, (b) in the case of
notice by United States mail, certified or registered, postage prepaid, return, receipt requested,
upon receipt thereof, or (c) in the case of notice by such a telecommunications device, upon
transmission thereof, provided such transmission is promptly confirmed by either of the methods set
forth in clauses (a) or (b) above, in each case addressed to the applicable party hereto at its
address set forth below or, in the case of any such party hereto, at such other address as such
party may from time to time designate by written notice to the other parties hereto:

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If to TV A:

Tennessee Valley Authority

400 West Summit Hill Drive

Knoxville, Tennessee 37902

Telephone No.: (865) 632-3366

Facsimile No.: (865)632-6673

Attention: Treasurer

If to the Owner Lessor, the Owner Trustee or the Trust Company:

Wells Fargo Delaware Trust Company

Corporate Trust Services

919 Market Street, Suite 700

Wilmington, DE 19801

Telephone No.: (302) 575-2004

Facsimile No.: (302) 575-2006

Attention: Ann E. Roberts, Vice President

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If to the Owner Participant:

Wachovia Mortgage Corporation

c/o Wachovia Securities

One Wachovia Center

Mail Code NC0738

Charlotte, North Carolina 28288-0738

Telephone No.: (704) 715-7720

Facsimile No.: (704) 383-1572

Attention: Ida Blake

Wachovia Mortgage Corporation

c/o Wachovia Securities

301 South College Street

18th Floor

Charlotte, North Carolina 28202

Telephone: (704) 715-7720

Facsimile: (704) 383-1572

Attention: Ida Blake

If to the Lease Indenture Trustee:

Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-0001

Telephone No.: (302) 636-6000

Facsimile No.: (302) 636-4141

Attention: Corporate Trust Administration

If to the Pass Through Trustee:

Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-0001

Telephone No.: (302) 636-6000

Facsimile No.: (302) 636-4141

Attention: Corporate Trust Administration

A copy of all notices provided for herein shall be sent by the party giving such notice to
each of the other parties hereto.

     Section 15.6
Survival. All warranties, representations, indemnities and covenants made by any
party hereto, herein or in any certificate or other instrument delivered by any such party

48

 

or on behalf of any such party under this Agreement shall be considered to have been relied upon
by each other party hereto and shall survive the consummation of the transactions contemplated
hereby and in the other Operative Documents regardless of any investigation made by any such party
or on behalf of any such party. In addition, the indemnifications by
TVA under Sections 9.1 and 9.2
of this Agreement shall, subject to Sections 9.1(b) and 9.2(b), respectively, expressly survive the
expiration or early termination (in either case, for whatever reason) of the Network Lease or the
transfer or other disposition of the respective interests of the Owner Participant, the Owner
Lessor, the Trust Company, the Owner Trustee, the Lease Indenture Trustee and the Pass Through
Trustee in, to and under this Agreement, the Head Lease and the other
Operative Documents.

     Section 15.7 Successors and Assigns. This Agreement shall be binding upon and shall inure to the
benefit of, and shall be enforceable by, the parties hereto and their respective successors and
assigns as permitted by and in accordance with the terms hereof, including each successive holder
of the Owner Participant’s Beneficial Interest permitted under Section 7.1.
Except as expressly provided herein or in the other Operative Documents, no party hereto may assign
its interests herein without the consent of the other parties hereto.

     Section 15.8 Business Day. Notwithstanding anything herein or in any other Operative Document to
the contrary, if the date on which any payment is to be made pursuant to this Agreement or any
other Operative Document is not a Business Day, the payment otherwise payable on such date shall be
payable on the next succeeding Business Day with the same force and effect as if made on such
scheduled date and (provided such payment is made on such succeeding Business Day) no interest
shall accrue on the amount of such payment from and after such scheduled date to the time of such
payment on such next succeeding Business Day.

     Section 15.9 Governing Law. This Agreement has been delivered in the State of New York and shall be
in all respects governed by and construed in accordance with the laws
of the State of New York
including all matters of construction, validity and performance without giving effect to the
conflicts of laws provisions thereof except New York General Obligations Law Section 5-1401.

     Section 15.10 Severability. If any provision hereof shall be invalid, illegal or unenforceable
under the Applicable Law of any jurisdiction, the validity, legality and enforceability thereof in
any other jurisdiction, and of the remaining provisions hereof in any jurisdiction, shall not be
affected or impaired thereby.

     Section 15.11 Counterparts. This Agreement may be executed in any number of counterparts, each
executed counterpart constituting an original, but all such counterparts shall together constitute
but one and the same agreement.

     Section 15.12 Headings and Table of Contents. The headings of the Sections of this Agreement and
the Table of Contents are inserted for purposes of convenience only and shall not be construed to
affect the meaning or construction of any of the provisions hereof.

49

 

     Section 15.13 Limitation of Liability.

     (a) None of the Owner Participant, the Owner Lessor, the Owner Trustee, the Trust
Company, Wilmington Trust, the Lease Indenture Trustee or the Pass Through Trustee shall have any
obligation or duty to TVA or to others with respect to the transactions contemplated hereby, except
those obligations or duties expressly set forth in this Agreement and the other Operative
Documents, and none of the Owner Lessor, the Owner Trustee, the Trust Company, the Lease Indenture
Trustee or the Pass Through Trustee shall be liable for performance by any other party hereto of
such other party’s obligations or duties hereunder.

     (b) The Trust Company is entering into the Operative Documents to which it is a party solely
as trustee under the Trust Agreement and not in its individual capacity, except as expressly
provided herein or therein, and in no case whatsoever shall the Trust Company be personally liable
for, or for any loss in respect of, any of the statements, representations, warranties, agreements
or obligations of the Owner Lessor hereunder or under any other Operative Document, as to all of
which the other parties hereto agree to look solely to the Lessor Estate; provided, however, that
the Trust Company shall be liable hereunder for its own gross negligence or willful misconduct or
for a breach of its representations, warranties and covenants made in its individual capacity.

     (c) The Lease Indenture Trustee and the Pass Through Trustee are each entering into the
Operative Documents to which they are parties solely as trustees under the Lease Indenture and the
Pass Through Trust Agreement, respectively, and not in their individual capacities and in no case
whatsoever shall the Lease Indenture Trustee and the Pass Through Trustee be personally liable
for, or for any loss in respect of, any of the statements, representations, warranties, agreements
or obligations of the Owner Lessor hereunder or under any other Operative Document, as to all of
which the other parties hereto agree to look solely to the Indenture Estate and the Lessor Estate,
respectively; provided, however, that each such party shall be liable hereunder for its own
negligence or willful misconduct.

     (d) The right of the Lease Indenture Trustee or the Pass Through Trustee to perform any
discretionary act enumerated herein or in any other Operative Document (including the right to
consent to any action which requires their consent and the right to waive any provision of, or
consent to any change or amendment to, any of the Operative Documents) shall not be construed as
giving rise to any expressed or implied duty owed by such trustee; the Lease Indenture Trustee and
the Pass Through Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such acts. In connection with any such discretionary acts, the
Lease Indenture Trustee may in its sole discretion (but shall not, except as otherwise provided in
the Lease Indenture or as otherwise required by Applicable Law, have any obligation to) request the
approval of the Pass Through Trustee as holder of the Lessor Note, and the Pass Through Trustee may
in its sole discretion (but shall not, except as otherwise provided in the Operative Documents or
as otherwise required by Applicable Law, have any obligation to) request the approval of the
Certificateholders.

50

 

     Section 15.14
Waiver of Trial by Jury.

     TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES THE
RIGHT TO DEMAND A TRIAL BY JURY, IN ANY SUCH SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS
AGREEMENT, THE OTHER OPERATIVE DOCUMENTS, OR THE SUBJECT MATTER HEREOF OR THEREOF OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY BROUGHT BY ANY OF THE PARTIES HERETO OR THEIR
SUCCESSORS OR ASSIGNS.

     Section 15.15 Further Assurances. Each party hereto will promptly and duly execute and deliver such
further documents to make such further assurances for and take such further action reasonably
requested by any party to whom such first party is obligated, all as may be reasonably necessary to
carry out more effectively the intent and purpose of this Participation Agreement, and the other
Operative Documents.

     Section 15.16
Effectiveness. This Participation Agreement shall become effective on September
22, 2003, the date of execution and delivery by each of the parties hereto.

     Section 15.17 No Partnership, Etc. The parties hereto intend that nothing contained in this
Participation Agreement or any other Operative Document shall be deemed or construed to create a
partnership, joint venture or other co-ownership arrangement by and
among any of them. The parties
hereto intend that, for United States Federal, state and local income tax purposes, the Head Lease
will be treated as a sale of the Undivided Interest by the Head Lessor to the Head Lessee and the
Network Lease will be treated as a “true lease” of the Undivided Interest by the Owner Lessor to
TVA with the result that the Owner Lessor will be treated as the owner of the Undivided Interest
and TVA will be treated as the lessee of the Undivided Interest. The parties agree to report the
Transaction on all Tax returns filed for United States Federal, state and local income tax purposes
in accordance with such intent.

     Section 15.18 Compliance with Network Lease. If compliance with Section 3.4(c) or Section 9 of the
Network Lease (or compliance with any other provision of the Operative Documents) shall ever result
in the Lessee remitting a withholding Tax to any Governmental Entity in connection with or with
respect to the Rent provided in the Network Lease (without a corresponding reduction of or offset
to the Rent payable under the Network Lease) for or with respect to a Tax that is not the Lessee’s
responsibility under Section 9.2 of the Participation Agreement, the Owner Participant shall
reimburse the Lessee for such Tax on demand (together with interest thereon computed at the
Discount Rate).

     Section 15.19 Entire Agreement. This Agreement, together with the agreements, instruments and other
documents required to be executed and delivered in connection herewith, represents the entire
agreement of the parties hereto and supersedes all prior agreements and understandings of the
parties with respect to the subject matter covered hereby.

51

 

     IN WITNESS WHEREOF, the parties hereto have caused this Participation Agreement to be executed and
delivered by their respective officers thereunto duly authorized.

	 	 	 	 	 
	 	TENNESSEE VALLEY AUTHORITY

 	 
	 	By:  	/s/ John M. Hoskins
 	 
	 	 	Name:  	John M. Hoskins  	 
	 	 	Title:  	Sr. V.P. & Treasurer 	 

Participation Agreement (A1)

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	 	NVG NETWORK I STATUTORY TRUST
	 
	 	 	 	 
	 	 	By: Wells Fargo Delaware Trust Company, not in its individual capacity, except to the extent
expressly provided herein, but as Owner Trustee under the Trust Agreement
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ann Roberts Dukart
	 

	 	 	 	 
	 

	 	 	 	Name: Ann Roberts Dukart
	 

	 	 	 	Title: Vice President

Participation Agreement (A1)

 

 

	 	 	 	 	 
	 	 	WELLS FARGO DELAWARE
TRUST COMPANY,
	 	 	not in its individual,
capacity, except to the extent expressly provided herein, but as
Owner Trustee under the Trust Agreement
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ann Roberts Dukart
	 

	 	 	 	 
	 

	 	 	 	Name: Ann Roberts Dukart

Title: Vice President

Participation Agreement (A1)

 

 

	 	 	 	 	 
	 	WACHOVIA MORTGAGE CORPORATION

 	 
	 	By:  	/s/
Mark O. Trolling
 	 
	 	 	Name:  	Mark O. Trolling	 
	 	 	Title:  	Senior Vice President 	 

Participation Agreement (A1)

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	WILMINGTON TRUST COMPANY, 

not in its individual capacity, except to the extent expressly
provided herein, but as Lease Indenture Trustee under the Lease Indenture

 	 
	 	By:  	/s/ Joann A. Rozell
 	 
	 	 	Name:  	Joann A. Rozell 	 
	 	 	Title:  	Financial Services Officer 	 
	 

	 	 	 	 	 
	 	WILMINGTON TRUST COMPANY,

not in its individual capacity, except to the extent expressly
provided herein, but as Pass Through Trustee under the Pass Through Trust Agreement

 	 
	 	By:  	/s/ Joann A. Rozell
 	 
	 	 	Name:  	Joann A. Rozell 	 
	 	 	Title:  	Financial Services Officer 	 
	 

Participation
Agreement(A1)

 

FINAL

APPENDIX A

 

Definitions
(A1)

 

Lease
Of Control, Monitoring and 

Data Analysis Network

 

 

 

Appendix
A — Definitions (A1) 

GENERAL PROVISIONS

     In this Appendix A and each Operative Document (as hereinafter defined), unless otherwise provided
herein or therein:

          (a) the terms set forth in this Appendix A or in any such Operative Document shall have the
meanings herein provided for and any term used in an Operative Document and not defined therein or
in this Appendix A but in another Operative Document shall have the meaning herein or therein
provided for in such other Operative Document;

          (b) any term defined in this Appendix A by reference to another document, instrument or
agreement shall continue to have the meaning ascribed thereto whether or not such other document,
instrument or agreement remains in effect;

          (c) words importing the singular include the plural and vice versa;

          (d) words importing a gender include either gender;

          (e) a
reference to a part, clause, section, paragraph, article, party, annex, appendix, exhibit,
schedule or other attachment to or in respect of an Operative Document is a reference to a part,
clause, section, paragraph, or article of, or a party, annex, appendix, exhibit, schedule or other
attachment to, such Operative Document unless, in any such case, otherwise expressly provided in
any such Operative Document;

          (f) a reference to any statute, regulation, proclamation, ordinance or law includes all
statutes, regulations, proclamations, ordinances or laws amending, varying, consolidating or
replacing the same from time to time, and a reference to a statute includes all regulations,
policies, protocols, codes, proclamations and ordinances issued or otherwise applicable under that
statute unless, in any such case, otherwise expressly provided in any such statute or in such
Operative Document;

          (g) a definition of or reference to any document, instrument or agreement includes an amendment
or supplement to, or restatement, replacement, modification or
renovation of, any such
document, instrument or agreement unless otherwise specified in such definition or in the context
in which such reference is used;

          (h) a reference to a particular section, paragraph or other part of a particular statute shall be
deemed to be a reference to any other section, paragraph or other
part substituted therefor from time to time;

          (i) if a capitalized term describes, or shall be defined by reference to, a document, instrument or
agreement that has not as of any particular date been executed and delivered and such document,
instrument or agreement is attached as an exhibit to the Participation Agreement (as hereinafter
defined), such reference shall be deemed to be to such

 

 

form and, following such execution and delivery and subject to paragraph (h) above, to the
document, instrument or agreement as so executed and delivered;

          (j) a reference to any Person (as hereinafter defined) includes such Person’s successors and
permitted assigns;

          (k) any reference to “days” shall mean calendar days unless “Business Days” (as hereinafter
defined) are expressly specified;

          (l) if the date as of which any right, option or election is exercisable, or the date upon which
any amount is due and payable, is stated to be on a date or day that is not a Business Day,
such right, option or election may be exercised, and such amount shall be deemed due and payable,
on the next succeeding Business Day with the same effect as if the same was exercised or made on
such date or day (without, in the case of any such payment, the payment or accrual of any interest
or other late payment or charge, provided such payment is made on such next succeeding Business
Day);

          (m) words such as “hereunder”, “hereto”, “hereof” and “herein” and other words of similar import
shall, unless the context requires otherwise, refer to the whole of the applicable document and not
to any particular article, section, subsection, paragraph or clause thereof;

          (n) a reference to “including” shall mean including without limiting the generality of any
description preceding such term, and for purposes hereof and of each Operative Document the rule
of ejusdem generis shall not be applicable to limit a general statement, followed by or referable
to an enumeration of specific matters, to matters similar to those specifically mentioned;

          (o) all accounting terms not specifically defined herein or in any Operative Document shall be
construed in accordance with GAAP; and

          (p) unless the context or the specific provision otherwise requires, whenever in the Operative
Documents a provision requires that the rating of a Person or the Lease Debt be confirmed, such
provisions shall be deemed to mean that both Rating Agencies shall have confirmed the rating of the
senior long term unsecured debt of such Person or the Lease Debt, if then rated by both Rating
Agencies, or by one such Rating Agency if only rated by one of them, a copy of which confirmation
shall be delivered by TVA to the Owner Participant, the Owner Lessor and, so long as the Lien of
the Lease Indenture shall not have been terminated or discharged, to the Lease Indenture Trustee
and shall be without indication that such Person or the Lease Debt, as the case may be, has been
placed on credit watch, credit review, or any similar status with negative implications or which
does not indicate the direction of the potential ratings change.

DEFINED TERMS

“Actual Knowledge” shall mean, with respect to any Transaction Party, actual knowledge of, or
receipt of written notice by, an officer (or other employee whose responsibilities include the
administration of the Transaction) of such Transaction Party; provided, that none of the Owner

2

 

Trustee, the Trust Company, the Lease Indenture Trustee and the Pass Through Trustee shall be
deemed to have Actual Knowledge of any fact solely by virtue of an officer of the Trust Company,
Lease Indenture Trustee or Pass Through Trustee, as the case may be, having actual knowledge of
such fact unless such officer is an officer in the Corporate Trust Administration Department of the
Trust Company, Lease Indenture Trustee or Pass Through Trustee, as the case may be; and provided
further that any Transaction Party shall in any event be deemed to have “Actual Knowledge” of any
matter as to which such Transaction Party has been given notice pursuant to and in accordance with
the provisions of the Participation Agreement or any other Operative Document to which such
Transaction Party is a party.

“Additional Certificates” shall mean any additional certificates issued by the Pass Through Trust
in connection with the issuance of Additional Lessor Notes relating thereto.

“Additional
Lessor Notes” shall have the meaning specified in Section 2.12 of the Lease Indenture.

“Advisors to the Lessee” shall mean Dexia-Global Structured Finance.

“Affiliate” of a particular Person shall mean any Person directly or indirectly controlling,
controlled by or under common control with such particular Person. For purposes of this definition,
“control” when used with respect to any particular Person shall mean the power to direct the
management and policies of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have
meanings correlative to the foregoing; provided, however, that under no circumstances shall the
Trust Company be considered to be an Affiliate of any of the Owner Lessor, the Owner Trustee, or
the Owner Participant, nor shall any of the Owner Lessor, the Owner Trustee, or the Owner
Participant be considered to be an Affiliate of the Trust Company; and provided further, that no
Federal Governmental Entity shall be considered to be an Affiliate of TVA.

“After-Tax Basis” shall mean, with respect to any payment to be received by any Person, the amount
of such payment (the “base payment”) supplemented by a further payment (the “additional payment”)
to that Person so that the sum of the base payment plus the additional payment shall, after
deduction of the amount of all Federal, state and local income Taxes required to be paid by such
Person in respect of the receipt or accrual of the base payment and the additional payment (taking
into account any credits or reduction in such income Taxes and the timing thereof resulting from
Tax benefits realized or to be realized by the recipient as a result of the payment or the event
giving rise to the payment), be equal to the amount required to be received. Such calculations
shall be made on the basis of the highest generally applicable Federal, state and local income tax
rates applicable to the corporation for whom the calculation is being made for all relevant
periods, and shall take into account the deductibility of state and local income taxes for Federal
income tax purposes.

“Applicable Law” shall mean, without limitation, all applicable laws, statutes, treaties,
judgments, decrees, injunctions, writs and orders of any court, arbitration board or Governmental
Entity and rules, regulations, orders, ordinances, licenses and permits of any Governmental Entity.

3

 

“Applicable Rate” shall mean the Base Rate plus 1% per annum.

“Appraisal Procedure” shall mean (except with respect to the Closing Appraisal and any appraisal to
determine Fair Market Sales Value after a Lease Event of Default shall have occurred and be
continuing), an appraisal conducted by an appraiser or appraisers in accordance with the procedures
set forth in this definition of “Appraisal Procedures.” The Owner Participant and TVA will consult
with the intent of selecting a mutually acceptable Independent Appraiser. If a mutually acceptable
Independent Appraiser is selected, the Fair Market Rental Value or Fair Market Sales Value shall be
determined by such Independent Appraiser. If the Owner Participant and TVA are unable to agree upon
a single Independent Appraiser within a 15-day period, one shall be appointed by the Owner
Participant, and one shall be appointed by TVA (or its designee), which Independent Appraisers
shall attempt to agree upon the value, period, amount or other determination that is the subject of
the appraisal. If either the Owner Participant or TVA does not appoint its appraiser, the
determination of the other appraiser shall be conclusive and binding on the Owner Participant and
TVA. If the appraisers appointed by the Owner Participant and TVA are unable to agree upon the
value, period, amount or other determination in question, such
appraisers shall jointly appoint a third Independent Appraiser or, if such appraisers do not
appoint a third Independent Appraiser, the Owner Participant and TVA shall jointly appoint the
third Independent Appraiser. In such case, the average of the determinations of the three
appraisers shall be conclusive and binding on the Owner Participant and TVA, unless the
determination of one appraiser is disparate from the middle determination by more than twice the
amount by which the third determination is disparate from the middle determination, in which case
the most disparate determination shall be excluded, and the average of the remaining two
determinations shall be conclusive and binding on the Owner Participant and TVA. The fees and
expenses of all such appraisals shall be payable by TVA.

“Appraiser” shall mean American Appraisal Associates Incorporated.

“Assigned Documents” shall have the meaning specified in clause (2) of the Granting Clause of the
Lease Indenture.

“Assignment and Assumption Agreement” shall mean an assignment and assumption agreement in form and
substance substantially in the form of Exhibit D to the
Participation Agreement.

“Assumed Deductions” shall have the meaning specified in Section 1.1 of the Tax Indemnity
Agreement.

“Assumed
Tax Rate” shall have the meaning specified in Section 1.1 of the Tax Indemnity Agreement.

“Authorized Agent” shall have the meaning specified in the Pass Through Trust Agreement.

“Bankruptcy
Code” shall mean the United States Bankruptcy Code of 1978, 11 U.S.C. §101 et
seq.

“Base Rate” shall mean the rate of interest publicly announced from time to time by Citibank,
N.A. at its New York office as its base rate for domestic commercial loans, such rate to change

4

 

as and when such base rate changes. For purpose of this definition, “base rate” shall mean
that rate announced by Citibank N.A. from time to time as its base rate as that rate may change
from time to time with changes to occur on the date Citibank N.A.’s base rate changes.

“Basic
Lease Rent” shall have the meaning specified in Section 3.2 of the Network Lease.

“Beneficial
Interest” shall mean the interest of the Owner Participant
under the Trust Agreement.

“Bond Resolution” shall mean the Basic Tennessee Valley Authority Power Bond Resolution adopted
October 6, 1960, as amended.

“Burdensome Termination Event” shall mean the occurrence of any event which gives the Lessee the
right to terminate the Network Lease pursuant to Section 13.1 thereof.

“Business Day” shall mean any day other than a Saturday, a Sunday, or a day on which commercial
banking institutions are authorized or required by law, regulation or executive order to be closed
in Wilmington, Delaware, Knoxville, Tennessee, the city and the state in which the Corporate Trust
Office of the Lease Indenture Trustee or the Owner Trustee is located or the city and state in
which the Corporate Trust Office of the Pass Through Trustee is located.

“Certificateholders” shall mean each of the holders of Certificates, and each of such holder’s
successors and permitted assigns.

“Certificates” shall mean the Pass Through Certificates issued on the Closing Date pursuant to the
Pass Through Trust Agreement and any certificates issued in replacement therefor pursuant to the
Pass Through Trust Agreement.

“Certificates
Register” shall mean the “Register” specified in the Pass Through Trust Agreement.

“Claim” shall mean any liability (including in respect of negligence (whether passive or active or
other torts), strict or absolute liability in tort or otherwise, warranty, latent or other defects
(regardless of whether or not discoverable), statutory liability, property damage, bodily injury or
death), obligation, loss, settlement, damage, penalty, claim, action, suit, proceeding (whether
civil or criminal), judgment, penalty, fine and other legal or administrative sanction, judicial or
administrative proceeding, cost, expense or disbursement, including reasonable legal, investigation
and expert fees, expenses and reasonable related charges, of whatsoever kind and nature, but
excluding Taxes.

“Closing” shall have the meaning specified in Section 2.2(a) of the Participation Agreement.

“Closing Appraisal” shall mean the appraisal, dated the Closing Date, prepared by the Appraiser
with respect to the Owner Lessor’s Interest, which Closing Appraisal shall:

          (a) Determine the Owner Lessor’s Cost, which shall be the fair market value of the Owner Lessor’s
Interest on the Closing Date, and determine the fair market value of the Network;

5

 

          (b) Determine the economic useful life of the Network (including the Software Rights) and
confirm (i) that the Network (including the Software Rights) is reasonably estimated on the Closing
Date to have a remaining economic useful life equal to at least 125% of the Network Lease Term, and
(ii) that the Network (including the Software Rights) is reasonably estimated to have a fair market
value at the end of the Network Lease Term equal to at least 20% of the Network Cost and the Owner
Lessor’s Cost, respectively, without regard to inflation or deflation during the Network Lease
Term;

          (c) Confirm that it is reasonable to expect that upon expiration or termination of the Network
Lease, it will be commercially feasible for a party other than the Lessee to operate, together with
the owners or lessors of the Other Undivided Interests, the Network;

          (d) Allocate the percentage of the Owner Lessor’s Cost eligible for each category of
Depreciation Deduction;

          (e) Confirm that the price of the Early Purchase Option is expected to be equal to or greater
than the fair market value of the Owner Lessor’s Interest on the Early Purchase Date, taking into
account inflation or deflation during the Network Lease Term;

          (f) Confirm that the Network is capable of being an integrated. Network and should be valued as
a single system;

          (g) Confirm that the Network is not limited use property; and

          (h) Confirm that there is no financial compulsion on the Lessee to exercise the Early Purchase
Option.

“Closing Date” shall have the meaning specified in Section 2.2(a) of the Participation Agreement.

“Code” shall mean the Internal Revenue Code of 1986.

“Competitor” shall have the meaning specified in Section 7.l(b) of the Participation Agreement.

“Component” shall mean any appliance, part, instrument, appurtenance, accessory, furnishing,
equipment or other property of whatever nature that may from time to time be incorporated in the
Network.

“Corporate
Trust Office” shall have the meaning specified in the Pass Through Trust Agreement.

“Deduction Loss” shall have the meaning specified in Section 3.1 (A) of the Tax Indemnity
Agreement.

“Depreciation Deductions” shall have the meaning specified in Section 1.1 of the Tax Indemnity
Agreement.

6

 

“Discount Rate” shall mean 5% per annum.

“Distribution” shall mean, in respect of any Person, any dividend, distribution or payment
(including by way of redemption, repurchase, retirement, return or repayment) in respect of shares
of capital stock of such Person.

“Dollars” or the sign “$” shall mean United States dollars or other lawful currency of the United
States.

“DTC” shall mean The Depository Trust Company, a New York corporation.

“Early
Purchase Date” shall mean January 15, 2021.

“Early Purchase Option” shall have the meaning specified in Section 15.1 of the Network Lease.

“Early Purchase Price” shall mean the amounts set forth on Schedule 4 to the Network Lease with
respect to the Early Purchase Date.

“Effective
Date” shall mean September 22, 2003.

“Effective Rate” shall have the meaning specified in Section 5 of the Tax Indemnity Agreement.

“EIN” shall mean, as to any Person, its taxpayer identifying number (as defined in Treasury
Regulation § 301.6109-1).

“Energy Management, Protection and Billing System” shall mean a single integrated system that
(taking into account the Software Rights) performs the functions described in clauses (a), (b) and
(c) of the definition of “Network Functions” and, as of the Closing Date, consists of the equipment
described in clauses (a), (b) and (c) of the definition of “Network”.

“Equity
Investment” shall mean the amount set forth in Schedule 3 to the Participation Agreement.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974.

“Escrowed
Software” shall have the meaning set forth in Section 6.9 of the Participation Agreement.

“Event of Default” shall mean an Event of Default under the Pass Through Trust Agreement.

“Event of Loss” shall mean either of the following events:

          (a) loss of the entire Network or use thereof due to destruction or damage to the Network that is
beyond economic repair or that renders the Network permanently unfit for normal use;

7

 

          (b) seizure, condemnation, confiscation or taking of, or requisition of title to or use of, the
entire Network by any Governmental Entity (a “Requisition”) following a contest thereof and
exhaustion of all permitted appeals or an election by TVA not to pursue such appeals (provided that
no such contest shall extend beyond the earlier of (x) the date which is one year after the loss of
such title in the case of a requisition of Title, or (y) the date which is 18 months prior to the
end of the Network Lease Term), but, in any case involving Requisition of use but not of title,
only if such Requisition of use continues beyond the Network Lease Term; and

          (c) if elected by the Owner Participant within twelve (12) months of the date upon which the
Owner Participant shall obtain Actual Knowledge of the event or circumstance that would upon
election of the Owner Participant result in the right to terminate the Network Lease under this
clause (c), and only in such case as termination of the Network Lease and transfer of the Undivided
Interest and the Software Rights to the Lessee result in the Owner Participant or the Owner Lessor,
as the case may be, not being subject to the regulation described below, subjection of the Owner
Participant’s or the Owner Lessor’s interest in the Undivided Interest and the Software Rights to
any rate of return regulation by any Governmental Entity, or subjection of the Owner Participant
(or any Affiliate thereof) or the Owner Lessor to any other public utility regulation of any
Governmental Entity or law that in the reasonable opinion of the Owner Participant acting in good
faith is materially burdensome, in either case solely by reason of the participation of the Owner
Lessor or the Owner Participant in the transaction contemplated by the Operative Documents, and
not, in any event, as a result of (i) investments, loans or other business activities of the Owner
Participant or its Affiliates in respect of equipment or facilities similar in nature to the
Network or any part thereof or in any electrical, steam, cogeneration or other energy or utility
related equipment or its facilities or the general business or other activities of the Owner
Participant or Affiliates or the nature of any of the properties or assets from time to time owned,
leased, operated, managed or otherwise used or made available for use by the Owner Participant or
its Affiliates or (ii) a failure of the Owner Participant to perform routine administrative or
ministerial actions the performance of which would not subject the Owner Participant or any
Affiliate to any material adverse consequence (in the reasonable opinion of the Owner Participant
or any Affiliate acting in good faith), provided that the Lessee, the Owner Lessor and the Owner
Participant agree to cooperate and to take reasonable measures to alleviate the source or
consequence of any regulation constituting an Event of Loss under
this clause (c) (a “Regulatory
Event of Loss”), at the cost and expense of the party requesting such cooperation and so long as
there shall be no material adverse consequences to the Owner Lessor or Owner Participant (or any of
its Affiliates) as a result of such cooperation or the taking of reasonable measures. The Owner
Participant may only elect to terminate the Network Lease under this clause (c) if the Other Owner
Participants make the same election under the Other Network Leases.

“Evidences
of Indebtedness” shall have the meaning specified in the Bond Resolution.

“Excepted Payments” shall mean and include (i)(A) any indemnity or other payment (whether or not
constituting Supplemental Lease Rent and whether or not a Lease Event of Default exists) payable to
either the Trust Company, the Owner Trustee or the Owner Participant or to their respective
successors and permitted assigns (other than the Lease Indenture Trustee) pursuant to Section 2.4,
9.1 or 9.2 of the Participation Agreement and Sections 5.1 or 5.2 of the Trust Agreement, and any
payments under the Tax Indemnity Agreement or (B) any amount payable

8

 

by TVA to the Owner Lessor or the Owner Participant to reimburse any such Person for its costs and
expenses in connection with the Operative Documents, (ii) insurance proceeds, if any, payable to
the Owner Lessor or the Owner Participant under insurance separately maintained by the Owner Lessor
or the Owner Participant with respect to the Network as permitted by Section 11.1 of the Network
Lease, (iii) any amount payable to the Owner Participant as the purchase price of the Owner
Participant’s right and interest in the Beneficial interest in connection with any permitted sale
or transfer thereof, (iv) any amounts payable to the Owner Participant upon exercise by TVA of the
Special Lessee Transfer pursuant to Section 13 of the Participation Agreement, (v) the proceeds of
the Residual Value Insurance, (vi) all other fees expressly payable to the Owner Participant under
the Operative Documents, and (vii) any payments in respect of interest, or any payments made on an
After-Tax Basis, to the extent attributable to payments referred to in clause (i) through (vi)
above that constitute Excepted Payments.

“Excepted Rights” shall mean the rights specified in Section 5.6 of the Lease Indenture.

“Excess
Amount” shall have the meaning specified in Section 15.3 of the Participation Agreement.

“Exchange Act” shall mean the Securities Exchange Act of 1934.

“Excluded Property” shall mean Excepted Payments and Excepted Rights, collectively.

“Excluded
Taxes” shall have the meaning specified in
Section 9.2(b) of the Participation Agreement.

“Expiration Date” shall mean September 26, 2027, the last day of the Network Lease Term.

“Fair Market Rental Value” or “Fair Market Sales Value” shall mean with respect to any
property or service as of any date, the cash rent or cash price obtainable in an arm’s length
lease, sale or supply, respectively, between an informed and willing lessee or purchaser under no
compulsion, to lease or purchase and an informed and willing lessor or seller or supplier under no
compulsion to lease or sell or supply the property or service in question, and shall, in the case
of the Owner Lessor’s Interest, be determined (except pursuant to Section 18 of the Network Lease
or as otherwise provided below or in the Operative Documents) on the basis that (i) the conditions
contained in Sections 7 and 8 of the Network Lease shall have been complied with in all respects,
(ii) the lessee or buyer shall have rights in, or an assignment of, the Operative Documents to
which the Owner Lessor is a party and the obligations relating thereto, (iii) the Owner Lessor’s
Interest is free and clear of all Liens (other than Owner Lessor’s Liens, Owner Participant’s Liens
and Indenture Trustee’s Liens), and (iv) in the case the Fair Market Rental Value, taking into
account the terms of the Network Lease and the other Operative Documents. If the Fair Market Sales
Value of the Owner Lessor’s Interest is to be determined during the continuance of a Lease Event of
Default or in connection with the exercise of remedies by the Owner Lessor pursuant to Section 18
of the Network Lease, such value shall be determined by an appraiser appointed solely by the Owner
Lessor on an “as-is,” “where-is” and “with all faults” basis and shall take into account all Liens
(other than Owner Lessor’s Liens, Owner Participant’s Liens and Indenture Trustee’s Liens);
provided, however, in any such case where the Owner

9

 

Lessor shall be unable to obtain constructive possession sufficient to realize the economic benefit
of the Owner Lessor’s Interest, the Fair Market Sales Value of the Owner Lessor’s Interest shall be
deemed equal to $0. If in any case other than in the preceding sentence the parties are unable to
agree upon a Fair Market Sales Value of the Owner Lessor’s Interest within 30 days after a request
therefor has been made, the Fair Market Sales Value of the Owner Lessor’s Interest shall be
determined by appraisal pursuant to the Appraisal Procedures.

“Federal
Power Act” shall mean the Federal Power Act.

“FERC” shall mean the Federal Energy
Regulatory Commission.

“Final Determination” shall mean (i) a decision, judgment, decree or other order by any court of
competent jurisdiction, which decision, judgment, decree or other order has become final after all
allowable appeals by either party to the action have been exhausted or the time for filing such
appeal has expired, or in any case where judicial review shall at the time be unavailable because
the proposed adjustment involves a decrease in net operating loss carryforward or a business credit
carryforward, a decision, judgment, decree or other order of an administrative official or agency
of competent jurisdiction, which decision, judgment, decree or other order has become final
(i.e., where all administrative appeals have been exhausted by all parties thereto), (ii) a
closing agreement entered into under section 7121 of the Code, or any other settlement agreement
entered into in connection with an administrative or judicial proceeding or (iii) the expiration of
the time for instituting a claim for refund, or if such a claim was filed, the expiration of the
time for instituting suit with respect thereto.

“GAAP” shall mean generally accepted accounting principles used in the United States consistently
applied.

“Government” shall mean the United States of America.

“Governmental Action” shall mean all legislative enactments and administrative action of any
Governmental Entity.

“Governmental Entity” shall mean and include the Government, any national government, any political
subdivision of a national government or of any state, county or local jurisdiction therein or any
board, commission, department, division, organ, instrumentality, court or agency of any thereof,
but shall not include TVA.

“Guaranty” shall mean any guaranty agreement guaranteeing the obligations of the Owner Participant
or entered into pursuant to Section 7.1 of the Participation Agreement in form and substance
substantially in the form of Exhibit E to the Participation Agreement.

“Head Lease” shall mean the Head Lease Agreement (A1), dated as of Closing Date, between the Head
Lessor and the Head Lessee, substantially in the form of Exhibit A to the Participation Agreement.

“Bead Lease Basic Term” shall have the meaning specified in Section 3.1 of the Head Lease.

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“Head
Lease Renewal Term” shall have the meaning specified in
Section 3.2 of the Head Lease.

“Head Lease Rent” shall have the meaning specified in Section 3.3 of the Head Lease.

“Head Lease
Term” shall have the meaning specified in Section 3.2 of the Head Lease.

“Head Lessee” shall mean the Owner Lessor as lessee of the Undivided Interest and as grantee or
assignee of the Software Rights under the Head Lease.

“Head Lessor” shall mean TVA as lessor of the Undivided Interest and as grantor or assignor of the
Software Rights under the Head Lease,

“Holding Company Act” shall mean the Public Utility Holding Company Act of 1935.

“Inclusion Loss” shall have the meaning specified in Section 3.1(B) of the Tax Indemnity
Agreement.

“Indemnitee”
shall have the meaning specified in Section 9.1 (a) of the Participation Agreement.

“Indenture Estate” shall have the meaning specified in the Granting Clause of the Lease Indenture.

“Indenture Trustee’s Liens” shall mean any Lien on the Network, the Undivided Interest, the
Software Rights, the Lessor Estate or any part thereof arising as a result of (i) Taxes against or
affecting the Lease Indenture Trustee, or any Affiliate thereof that is not related to, or that is
in violation of, any Operative Document or the transactions contemplated thereby, (ii) Claims
against or any act or omission of the Lease Indenture Trustee, or any Affiliate thereof that is not
related to, or that is in violation of, any Operative Document or the transactions contemplated
thereby or that is in breach of any covenant or agreement of the Lease Indenture Trustee specified
therein, (iii) Taxes imposed upon the Lease Indenture Trustee, or any Affiliate thereof that are
not indemnified against by TVA pursuant to any Operative Document, or (iv) Claims against or
affecting the Lease Indenture Trustee, or any Affiliate thereof arising out of the voluntary or
involuntary transfer by the Lease Indenture Trustee of any portion of the interest of Wilmington
Trust or the Lease Indenture Trustee in the Lessor Estate, other than pursuant to the Operative
Documents.

“Independent Appraiser” shall mean a Person which is not the Owner Lessor, Owner Participant,
the Lessee or an Affiliate of any of the foregoing, who is a Member of the Appraisal Institute,
having experience in the business of evaluating equipment and software similar to the Network,
selected in accordance with the procedures described in the definition of “Appraisal Procedure”.

“Independent Engineer” shall mean an independent engineer selected by the Owner Participant
and reasonably acceptable to the Lessee.

“Independent Trustee” shall mean Frank McDonald acting in his capacity as Independent Trustee under
the Trust Agreement or any substitute Independent Trustee thereunder.

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“Initial Purchasers” shall mean Citigroup Global Markets Inc. and Lehman Brothers Inc.

“Interest Deductions” shall have the meaning specified in Section 1.1 of the Tax Indemnity
Agreement.

“Interregional Security Network” shall mean the communications network established by US electric
utilities on a collaborative basis through the North American
Electric Reliability Council (NERC)
to facilitate the exchange of real-time operational data, other operational data, and other
technical data between different electricity transmission and generation providers to help assure
reliable electric power system operations.

“IRS” shall mean the Internal Revenue Service of the United States Department of Treasury or any
successor agency.

“Joint Operating Agreement” shall mean the Joint Operating Agreement dated as of September 26,
2003, among TVA, the Owner Participant and each Other Owner Participant.

“Lease Debt” shall mean the debt evidenced by the Certificates, any additional Certificates, and
other debt issued pursuant to Section 11 of the Participation Agreement.

“Lease Debt Rate” shall mean the interest rate under the Lessor Note.

“Lease Event of Default” shall have the meaning specified in Section 17 of the Network Lease.

“Lease Indenture” shall mean the Indenture of Trust and Security Agreement (A1), dated as of the
Closing Date, between the Owner Lessor and the Lease Indenture Trustee, substantially in the form
of Exhibit C to the Participation Agreement.

“Lease Indenture Bankruptcy Default” shall mean any event or occurrence, which, with the passage of
time or the giving of notice or both, would become a Lease Indenture Event of Default under Section
4.2(e) or (f) of the Lease Indenture.

“Lease Indenture Event of Default” shall have the meaning specified in Section 4.2 of the
Lease Indenture.

“Lease Indenture Payment Default” shall mean any event or occurrence, which, with the passage of
time or the giving of notice or both, would become a Lease indenture Event of Default under Section
4.2(b) of the Lease Indenture.

“Lease Indenture Trustee” shall mean Wilmington Trust Company, not in its individual. capacity, but
solely as Lease Indenture Trustee under the Lease Indenture, and each other Person who may from
time to time be acting as Lease Indenture Trustee in accordance with the provisions of the Lease
Indenture.

“Lease Indenture Trustee Office” shall mean the office to be used for notices to the Lease
Indenture Trustee from time to time pursuant to Section 9.4 of the Lease Indenture.

12

 

“Lease Indenture Trustee’s Account” shall mean the account identified as the Lease Indenture
Trustee’s Account on Schedule 3 of the Participation Agreement.

“Lessee” shall mean TVA as lessee under the Network Lease.

“Lessee Action” shall have the meaning specified in Section 3.1 (A) of the Tax Indemnity Agreement.

“Lessee’s Interest” shall mean the Lessee’s right, title and interest in and to the Undivided
Interest and the Software Rights under the Network Lease.

“Lessee Person” shall mean the Lessee, any sublessee of the Lessee or any other person (other than
the Owner Lessor, the Owner Participant, the Indenture Trustee or the Pass-Through Trustee) using
or having possession of the Network during the Network Lease Term or any portion thereof and any
Affiliate, successor, assignee, transferee, agent or employee of any of the foregoing or any person
claiming through any of the foregoing.

“Lessor Estate” shall mean all the estate, right, title and interest of the Owner Lessor in, to and
under the Undivided Interest, the Software Rights, the Escrowed Software and the Operative
Documents, including all funds advanced to the Owner Lessor by the Owner Participant, all
installments and other payments of Basic Lease Rent Supplemental Lease Rent, Termination Value,
condemnation awards, purchase price, sale proceeds and all other
proceeds, rights and interests, of
any kind for or with respect to the estate, right, title and interest of the Owner Lessor in, to
and under the Network, the Undivided Interest, the Software Rights, the Escrowed Software, the
Operative Documents, and any of the foregoing, but shall not include
Excluded Property.

“Lessor Group Member” shall have the meaning specified in Section 6 of the Tax Indemnity Agreement.

“Lessor Note” shall mean the lessor note issued by the Owner Lessor in favor of the Pass Through
Trustee in the amount specified in and as more fully described in
Section 2.2 of the Lease
Indenture.

“Lien” shall mean any mortgage, security deed, security title, pledge, lien, charge, encumbrance,
lease, and security interest or title retention arrangement.

“List of Competitors” shall mean the initial list attached to the Participation Agreement as
Schedule 2, as amended from time to time pursuant to Section 7.1 (b) of the Participation
Agreement.

“Loan” shall mean the loan evidenced by the Lessor Note.

“Majority in Interest of Noteholders” as of any date of determination, shall mean Noteholders
holding in aggregate more than 50% of the total outstanding principal amount of the Notes;
provided, however, that any Note held by TVA and/or any Affiliate of TVA shall not be considered
outstanding for purposes of this definition unless TVA and/or such Affiliate shall hold title to
all the Notes outstanding.

13

 

“Make Whole Premium” shall mean, with respect to the Lessor Note (or in the case of a partial
redemption pursuant to Section 2.10(b)(iv) of the Lease Indenture, the Termination Percentage of
the Lessor Note) subject to redemption pursuant to the Lease Indenture, an amount equal to the
Discounted Present Value of the Lessor Note, or the Termination Percentage thereof, less the unpaid
principal amount of such Lessor Note, or the Termination Percentage thereof, as the case may be;
provided that the Make Whole Premium shall not be less than zero. For purposes of this definition,
the “Discounted Present Value” of any Lessor Note subject to redemption pursuant to the Lease
Indenture shall be equal to the discounted present value of all principal and interest payments
scheduled to become due after the date of such redemption in respect of the Lessor Note, or the
Termination Percentage thereof (in either case assuming such Lessor Note is fully redeemed on the
Early Purchase Date), calculated using a discount rate equal to the sum of (i) the yield to
maturity on the U.S. Treasury security having an average life equal to the remaining average life
of the Lessor Note and maturing on the Early Purchase Date and trading in the secondary market at
the price closest to par and (ii) 15 basis points; provided, however, that if there is no U.S.
Treasury security having an average life equal to the remaining average life of the Lessor Note
(assuming the Lessor Note is redeemed on the Early Purchase Date), such discount rate shall be
calculated using a yield to maturity interpolated or extrapolated on a straight-line basis
(rounding to the nearest calendar month, if necessary) from the yields to maturity for two U.S.
Treasury securities having average lives most closely corresponding to the remaining life of the
Lessor Note and maturing on the Early Purchase Date and trading in the secondary market at the
price closest to par.

“Material Adverse Effect” shall mean a materially adverse change in (i) the business, assets,
revenues, results of operations, financial condition or prospects of TVA, (ii) the ability of TVA
to perform its obligations under the Operative Documents, or (iii) the validity or enforceability
of the Operative Documents, the Liens granted thereunder, or the rights and remedies thereto.

“Modification” shall mean a modification, alteration, improvement, addition, betterment or
enlargement of the Network, including both Required Modifications and Optional Modifications.

“Measurement and Analysis System” shall mean shall mean a single integrated system that (taking
into account the Software Rights) performs the functions described in clause (d) of the definition
of “Network Functions” and, as of the Closing Date, consists of the equipment described in clause
(d) of the definition of “Network”.

“Moody’s” shall mean Moody’s Investors Service, Inc. and any successor thereto.

“Network” shall mean a single integrated system that (taking into account the Software Rights)
performs all of the Network Functions and, as of the Closing Date, consists of the Energy
Management, Protection and Billing System and the Measurement and Analysis System, which two
systems are, as of the Closing Date capable of being integrated into a single integrated system,
and consist of the following:

          (a) SCADA energy management equipment, consisting of the transmission supervisory control and data
acquisition system which is used to monitor and control the configuration and operation of the
Transmission Plant;

14

 

          (b) relay and protection equipment, consisting of the equipment used to detect, and respond to,
faults and anomalous operating conditions within the Transmission Plant;

          (c) metering and billing equipment, consisting of the equipment used to measure the amount of
electricity provided at certain delivery points for purposes of customer billing, and the amount of
electricity received at certain delivery points from other providers of electric power, for
purposes of determination of payments or net settlements to those providers of electric power; and

          (d) measurement and analysis equipment, consisting of the equipment used to retrieve, store and
transmit voltage, current and frequency data used to assess the quality of electricity on the
Transmission Plant.

The Network shall include the Software Rights and any or all Modifications, upgrades,
reconfigurations, replacements and accessions to the Network permitted or required by the Operative
Documents. For the avoidance of doubt and in accordance with the last sentence of Section 14A.3 of
the Lease, (a) the Network shall aiso include any remaining portion of the Network as it existed on
the Closing Date (including any Substituted Components, if applicable) and any Substituted
Non-Network Equipment, each as a separate integrated system, and (b) the term “Network” shall mean
any of (i) the Network including any Substituted Non-Network Equipment, (ii) the remaining portion
of the Network without such Substituted Non-Network Equipment, (iii) such Substituted Non-Network
Equipment itself, and (iv) the Network including any Substituted Components, as the context may
require.

The Components which (together with the associated software) comprise the Network as of the Closing
Date are identified by type, identification and model number on Attachment A to the Head Lease and
Exhibit A to the Network Lease and located at such location identified using the Escrowed Software.

“Network Cost” shall mean $388,500,000.

“Network Functions” shall mean:

          (a) monitoring and control of the configuration and operation of the Transmission Plant;

          (b) detection and correction of faults affecting the operating condition of the Transmission
Plant;

          (c) electricity metering of the Transmission Plant for purposes of administration and
billing and other transaction settlements; and

          (d) data acquisition and storage for quality assessment purposes in relation to the Transmission
Plant.

“Network Lease” shall mean the Network Lease Agreement (A1), dated as of the Closing Date, between
the Owner Lessor and TVA, substantially in the form of Exhibit B to the Participation Agreement.

15

 

“Network Lease Term” shall have the meaning specified in Section 3.1 of the Network Lease.

 “Note
Register” shall have the meaning specified in Section 2.8 of the Lease Indenture.

“Noteholder”
shall. mean any holder from time to time of an outstanding Note.

“Notes” shall mean the Lessor Note or Additional Lessor Notes issued pursuant to the Lease
Indenture.

“Obsolescence Termination Date” shall have the meaning specified in Section 14.1 of the Network
Lease.

“Offering Circular” shall mean the Offering Circular, dated September 23, 2003, with respect to the
Certificates.

“Officer’s Certificate” shall mean with respect to any Person, a certificate signed (i) in the case
of a corporation or limited liability company, by the Chairman of the Board, the President, or an
Executive Vice President, Senior Vice President, Vice President of such Person (or the designee of
such officer) or any Person authorized by or pursuant to the organizational documents, the bylaws
or any resolution of the board of directors, board of managers, or executive committee of such
Person (whether general or specific) to execute, deliver and take actions on behalf of such Person
in respect of any of the Operative Documents, and (ii) in the case of the Lease Indenture Trustee
or the Pass Through Trustee, a certificate signed by a Responsible Officer of the Lease Indenture
Trustee or the Pass Through Trustee.

“OP Guarantor” shall have the meaning specified in Section 7.1 of the Participation
Agreement.

“Operative Documents” shall mean the Participation Agreement, the Head Lease, the Network
Lease, any Guaranty, the Owner Lessor Security Agreement, the Lease Indenture, the Lessor Note, the
Pass Through Trust Agreement, the Certificates, the Joint Operating Agreement, the Trust Agreement
and the Tax Indemnity Agreement.

“Optional Modification” shall have the meaning specified in Section 8.2 of the Network Lease.

“Other Head Leases” shall mean a collective reference to each “Head Lease” as defined in and
entered into pursuant to the Other Participation Agreements.

“Other Network Leases” shall mean a collective reference to each “Network Lease” as defined in and
entered into pursuant to the Other Participation Agreements.

“Other Lease Indentures” shall mean a collective reference to each Lease Indenture as defined in
and entered into pursuant to the Other Participation Agreements.

“Other Owner Lessors” shall mean a collective reference to each “Owner Lessor” named in the Other
Participation Agreements.

16

 

“Other Owner Lessor’s Interests” shall mean a collective reference to each “Owner Lessor’s
Interest” as defined in and conveyed to the Other Owner Lessors in accordance with the Other
Participation Agreements.

“Other Owner Participants” shall mean a collective reference to each “Owner Participant” named in
the Other Participation Agreements.

“Other Participation Agreements” shall mean the Participation Agreements listed on Schedule 1 to
the Pass Through Trust Agreement (other than the Participation Agreement).

“Other Undivided Interests” shall mean the other “Undivided Interests” owned by the Other Owner
Lessors.

“Overdue Rate” shall mean 2% per annum over the Base Rate.

“Overpayment of Basic Lease Rent” means, as of any date prior to the Expiration Date on which the
Network Lease shall terminate (the “date of termination”), the excess (if any) of (y) the aggregate
Basic Lease Rent payable pursuant to Section 3.2(a) of the Network Lease on all Rent Payment Dates
on or prior to such date of termination, over (z) the aggregate Basic Lease Rent allocated pursuant
to Section 3.2(b) of the Network Lease to the period from (and including) the Closing Date to (and
including) such date of termination. The amount of any Overpayment of Basic Lease Rent as of each
Termination Date is set forth on column (c) of Schedule ID to the Network Lease.

“Owner
Lessor” shall mean NVG Network I Statutory Trust, a Delaware statutory trust.

“Owner Lessor Security Agreement” shall mean the Leasehold Security Agreement (A1) dated as of the
Closing Date, between the Owner Lessor and TVA, substantially in the form of Exhibit G to the
Participation Agreement.

“Owner Lessor’s Account” shall mean the account identified as the Owner Lessor’s Account on
Schedule 3 to the Participation Agreement.

“Owner Lessor’s Cost” shall mean at any time the product of the Network Cost and the Owner
Lessor’s Percentage.

“Owner Lessor’s Interest” shall mean the Owner Lessor’s right, title and interest in and to
the Undivided Interest and the Software Rights under the Head Lease.

“Owner Lessor’s Lien” shall mean any Lien on the Network, the Equipment, the Software Rights, the
Lessor Estate or any part thereof arising as a result of (1) Taxes against or affecting the Trust
Company or the Owner Trustee, or any Affiliate thereof that is not related to, or that is in
violation of, any Operative Document or the transactions contemplated thereby, (ii) Claims against,
or any act or omission of, the Trust Company or the Owner Trustee, or any Affiliate thereof, that
is not related to, or that is in violation of, any Operative Document or the transactions
contemplated thereby or that is in breach of any covenant or agreement of the Trust Company or the
Owner Trustee specified therein, (iii) Taxes imposed upon the Trust Company or the Owner Trustee,
or any Affiliate thereof that are not indemnified against by TVA pursuant

17

 

to any Operative Document, or (iv) Claims against or affecting the Trust Company or the Owner
Trustee, or any Affiliate thereof arising out of the voluntary or involuntary transfer by the Trust
Company or the Owner Trustee of any portion of the interest of the Trust Company or the Owner
Trustee in the Owner Lessor’s Interest, other than pursuant to the Operative Documents.

“Owner Lessor’s Percentage” shall mean 26.640926641%.

“Owner Participant” shall have the meaning set forth in the introductory paragraph to the
Participation Agreement.

“Owner Participant’s Commitment” shall mean the Owner Participant’s investment in the Owner
Lessor contemplated by Section 2.1 (a) of the Participation
Agreement.

“Owner Participant’s Lien” shall mean any Lien on the Network, the Undivided Interest, the Software
Rights, the Lessor Estate or any part thereof arising as a result of (i) Claims against or any act
or omission of the Owner Participant that is not related to, or that is in violation of, any
Operative Document or the transactions contemplated thereby or that is in breach of any covenant or
agreement of the Owner Participant set forth therein, (ii) Taxes against the Owner Participant that
are not indemnified against by TVA pursuant
to the Operative Documents or (iii) Claims against or affecting the Owner Participant arising out
of the voluntary or involuntary transfer by the Owner Participant (except as contemplated or
permitted by the Operative Documents) of any portion of the interest of the Owner Participant in
the Beneficial Interest.

“Owner Participant’s Net Economic Return” shall mean the Owner Participant’s anticipated (i)
after-tax yield, calculated according to the multiple investment sinking fund method of analysis,
and (ii) aggregate, and in connection with any adjustments made
pursuant to Section 3.4 of the
Network Lease, periodic, GAAP income and after-tax cash flow (such amounts to be adjusted by the
Termination Percentage following a Partial Termination pursuant to Section. 14A.1 of the Network
Lease and payment of a Partial Termination Payment pursuant to Section 14A.4 of the Network
Lease), in each case assuming the Lessee exercises the Early Purchase Option and, alternatively,
that the Network Lease Term continues until the Expiration Date.

“Owner Participant Transaction Expenses” shall have the meaning specified in Section 2.4 of the
Participation Agreement.

“Owner
Trustee” shall mean Wells Fargo Delaware Trust Company, a Delaware limited purpose trust
company, not in its individual capacity but solely as Owner Trustee under the Trust Agreement and
each other Person that may from time to time be acting as Owner Trustee in accordance with the
provisions of the Trust Agreement.

“Partial Termination” shall mean a partial termination of the Network Lease and a release of a
portion of the Network from the Head Lease pursuant to the procedure
set forth in Section 14A.1 of the Network Lease.

“Partial Termination Date” shall have the meaning set forth in Section 14A.1 of the Network Lease.

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“Partial Termination Payment” shall have the meaning set forth in Section 14A.4 of the Network
Lease.

“Participation Agreement” shall mean the Participation Agreement (Al), dated as of September
22, 2003, among TVA, the Owner Lessor, Wells Fargo Delaware Trust Company, in its individual
capacity and as Owner Trustee, the Owner Participant, and Wilmington Trust Company, as Lease
Indenture Trustee and as Pass Through Trustee.

“Pass Through Trust” shall mean the pass through trust created pursuant to the Pass Through Trust
Agreement.

“Pass Through Trust Agreement” shall mean the Pass Through Trust Agreement, dated as of September
22, 2003. between TVA and the Pass Through Trustee.

“Pass Through Trustee” shall mean Wilmington Trust Company, not in its individual capacity, but
solely as Pass Through Trustee under the Pass Through Trust Agreement, and each, other Person, that
may from time to time be acting as a Pass Through Trustee in. accordance with the provisions of the
Pass Through Trust Agreement.

“Permitted Acts” shall have the meaning specified in Section 3.1 (A) of the Tax Indemnity
Agreement,

“Permitted Closing Date Liens” shall mean those matters listed on Attachment B to the Head Lease.

“Permitted Instruments” shall mean (a) Permitted Securities, (b) overnight loans to or other
customary overnight investments in commercial, banks of the type referred, to in paragraph (d)
below, (c) open market commercial paper of any corporation (other than TVA or any Affiliate)
incorporated under the laws of the United States or any state thereof which is rated not less than
“prime-1” or its equivalent by Moody’s and “A-l” or its equivalent by S&P maturing within one year
after such investment, (d) certificates of deposit issued by commercial banks organized under the
laws of the United States or any state thereof or a domestic branch of a foreign bank (i) having a
combined capital and surplus in excess of $500,000,000 and (ii) which are rated “AA” or better by
S&P and “Aa2” or better by Moody’s; provided that no more than $20,000,000 may be invested in such
deposits at any one such bank and (e) a money market fund registered under the Investment Company
Act of 1940, as amended, the portfolio of which is limited to Permitted Securities.

“Permitted Liens” shall mean (i) the interests of TVA, the Owner Participant, the Owner Lessor, the
Owner Trustee, the Lease Indenture Trustee, and the Pass Through Trustee under any of the Operative
Documents; (ii) all Owner Lessor’s Liens, Owner Participant’s Liens and Indenture Trustee’s Liens;
(iii) the reversionary interests of TVA in the Network, the Undivided Interest and the Software
Rights; (iv) Liens for taxes either not delinquent or being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are maintained on the books of
TVA if required by generally accepted, accounting principles, so long as such proceedings shall not
involve any danger of the sale, forfeiture or loss of any part of the Network; (v) materialmen’s,
mechanics’, workers’, repairmen’s, employees’ or other like liens arising in the ordinary course
of business for amounts either not delinquent or being contested in

19

 

good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained
on the books of TVA if required by generally accepted accounting principles, so long as such
proceedings shall, not involve any danger of the sale, forfeiture or loss of any part of the
Network; (vi) liens arising out of judgments or awards against TVA with respect to which at the
time an appeal or proceeding for review is being prosecuted in good
faith by TVA, so long as such
judgment, award or appeal shall not involve any danger of the sale, forfeiture or loss of any part
of the Network; (vii) the rights of vendors under the Software Licenses and the Software License
Consents; and (viii) the interest of sublessees or assignees permitted by Section 20 of the Network
Lease.

“Permitted Post Network Lease Term Liens” shall mean the Permitted Liens referred to in clauses
(ii) and (vii) of the definition thereof.

“Permitted Securities” shall mean securities (and security entitlements with respect thereto) that
are (i) direct obligations of the United States of America or obligations guaranteed as to
principal and interest by the full faith and credit of the United States of America, and (ii)
securities issued by agencies of the U.S. Federal government whether or not backed by the full
faith and credit of the United States rated “AAA” and “Aaa” by S&P and Moody’s, respectively,
which, in either case under clauses (i) or (ii) are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government obligation or a specific payment of interest on
or principal of any such U.S. Government obligation held by such custodian for the account of the
holder of a depository receipt, provided that (except as required by law) such custodian is not
authorized to make any deduction in the amount payable to the holder of such depository receipt
from any amount received by the custodian in respect of the U.S. Government obligation or the
specific payment of interest on or principal of the U.S. Government obligation evidenced by such
depository receipt.

“Person” shall mean any individual, corporation, cooperative, partnership, joint venture,
association, joint-stock company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

“Plan” shall mean any “employee benefit plan” (as defined in Section 3(3) of ERISA) that is subject
to ERISA, any “plan” (as defined in Section 4975(e)(l)
of the Code) that is subject to Section 4975 of the Code, any trust created under any such plan or any “governmental plan” (as defined in
Section 3(32) of ERISA or Section 414(d) of the Code) that is organized in a jurisdiction having
prohibitions on transactions with government plans similar to those contained in Section 406 of
ERISA or Section 4975 of the Code.

“Pricing Assumptions” shall mean the “Pricing Assumptions” attached as Schedule 3 to the Network
Lease.

“Proceeds” shall mean the proceeds from the sale of the Certificates by the Pass Through Trust to
the Certificateholders on the Closing Date.

“Prudent Industry Practice” shall mean, at a particular time, either (a) any of the practices,
methods and acts engaged in or approved by a significant portion of the electric utility industry

20

 

with respect to equipment or software similar in nature to that included in the Network, or (b) any
of the practices, methods and acts which, in the exercise of reasonable judgment at the time the
decision was made, could have been expected to accomplish the desired result at the lowest
reasonable cost consistent with good business practices, reliability, safety and expedition.
“Prudent Industry Practice” is not intended to be limited to the optimum practice, method or act to
the exclusion of all others, but rather to be a spectrum of possible practices, methods or acts.

“Purchase Option” shall have the meaning specified in Section 16 of the Network Lease.

“Purchase Option Price” shall mean the Fair Market Sales Value of the Owner Lessor’s Interest on
the date specified in Section 16 of the Network Lease; provided, however, that in no event shall
the Purchase Option Price be less than $26,827,200; provided further that if as a result of a
Partial Termination, Termination Value has been paid with respect to the Terminated Portion of the
Owner Lessor’s Interest, the Purchase Option Price shall be reduced by the Termination Percentage
applicable to such Partial Termination.

“QTE Consultant” shall mean Tyler & Company.

“QTE Report” shall mean the reports of the QTE Consultant required to be delivered pursuant to
Section 4(i) of the Participation Agreement.

“Rating Agencies” shall mean S&P and Moody’s.

“Reasonable Basis” shall have the meaning of “reasonable basis” in Section 6662(d)(2)(B) of
the Code or any regulation thereunder, as may be amended from time to time.

“Rebuilding Closing Date” shall have the meaning specified in Section 10.3(c) of the Network Lease.

“Redemption Date” shall mean, when used with respect to any Note to be redeemed, the date fixed for
such redemption by or pursuant to the Lease Indenture or the respective Note, which date shall be a
Termination Date.

“Regulatory Event of Loss” shall have the meaning set forth in paragraph (c) of the definition of
Event of Loss.

“Related Party” shall mean, with respect to any Person or its successors and assigns, an Affiliate
of such Person or its successors and assigns and any director, officer, servant, employee or agent
of that Person or any such Affiliate or their respective successors and assigns; provided that the
Owner Trustee and the Owner Lessor shall not be treated as Related Parties to each other and
neither the Owner Lessor nor the Owner Trustee shall be treated as a Related Party to any Owner
Participant except that, for purposes of Section 9 of the Participation Agreement, the Owner Lessor
will be treated as a Related Party to an Owner Participant to the extent that the Owner Lessor acts
on the express direction or with the express consent of such Owner Participant.

“Reliability Operations Center” shall mean TVA’s Reliability Operations Center located in
Chattanooga, Tennessee, which provides a backup for the operations of the System Operation

21

 

Center, as well as supporting data interchange with neighboring electricity transmission systems,
and which consists of central servers which support the electricity transmission monitoring and
control software applications, workstations providing the human operator interface, interfaces to
external networks (including the Interregional Security Network), Local Area Network (LAN)
equipment, servers controlling communications with field devices, and data storage devices.

“Rent” shall mean Basic Lease Rent and Supplemental Lease Rent.

“Rent
Payment Date” shall mean December 26, 2003 and each January 15 and July 15, commencing
January 15, 2004 to and including September 26, 2027.

“Rental
Period” shall have the meaning specified in Section 3.2(a) of the Network Lease.

“Replacement Component” shall have the meaning specified in Section 7.2 of the Network Lease.

“Required Modification” shall have the meaning specified in Section 8.1 of the Network
Lease.

“Requisition” shall have the meaning specified in clause (b) of the definition of “Event of
Loss.”

“Residual Value Insurance” shall have the meaning set forth in Section 5.2 of the Participation
Agreement.

“Residual Value Insurance Amount” shall mean $26,827,200.

“Residual Value Insurance Standard” means (i) that the long-term unsecured senior debt obligations
or claims paying ability of the insurance company or financial institution providing the Residual
Value Insurance (or entity guaranteeing the obligations of such insurance company or financial
institution in a manner acceptable to the Owner Participant) are rated not less than “AA-” by S&P
or “Aa3” by Moody’s, resulting in such insurance company’s or financial institution’s obligation
under the Residual Value Insurance being so rated, and (ii) at the time of the issuance of such
insurance (excluding renewals), such insurance company or financial institution shall satisfy all
internal approvals of the Owner Participant.

“Responsible Officer” shall mean, with respect to any Person, (i) its Chairman of the Board, its
President, any Senior Vice President, the Chief Financial Officer, any Vice President, the
Treasurer or any other management employee (a) that has the power to take the action in question
and has been authorized, directly or indirectly, by the Board of Directors (or equivalent body) of
such Person, (b) working under the direct supervision of such Chairman of the Board, President,
Senior Vice President, Chief Financial Officer, Vice President or Treasurer, and (c) whose
responsibilities include the administration of the transactions and agreements contemplated by the
Operative Documents, and (ii) with respect to the Owner Trustee, the Lease indenture Trustee and
the Pass Through Trustee, an officer in their respective corporate trust administration
departments.

“Revenues” shall have the meaning specified in the Granting Clause of the Lease Indenture.

22

 

“RVI Advisor” shall mean Collateral Guaranty LLC.

“S&P” shall mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.
or any successor thereto.

“SCADA” shall mean “Supervisory Control and Data Acquisition” equipment which includes industrial
measurement, monitoring and control equipment consisting of central host or master equipment
(usually called a master station, master terminal unit or MTU); one or more field data gathering
and control units (usually called remote stations (“remotes”) or remote terminal units (RTUs)); and
associated software. SCADA equipment is used to monitor the condition and operation of industrial
plant, especially plant at field locations; and to exercise remote control over the operation of
such plant.

“Scheduled Closing Date” shall mean September 26, 2003 and any date set for the Closing in a notice
of postponement pursuant to Section 2.3(a) of the Participation Agreement.

“Scheduled Payment Date” shall mean a Rent Payment Date.

“SEC” shall mean the Securities and Exchange Commission, as from time to time constituted, created
under the Securities Exchange Act of 1934.

“Secured Indebtedness” shall have the meaning specified in Section 1 of the Lease Indenture.

“Securities Act” shall mean the Securities Act of 1933.

“Security”
shall have the same meaning as in Section 2(a)(1) of the Securities Act.

“Significant Indenture Default” shall mean a failure by the Owner Lessor to make any payment of
principal or interest on the Lessor Note after the same shall have become due and payable.

“Significant Lease Default” shall mean any of: (i) TVA shall fail to make any payment of Basic
Lease Rent or Termination Value after the same shall have become due and payable, (ii) TVA shall
fail to make any payment of Supplemental Lease Rent in excess of $250,000 (other than Excepted
Payments or Termination Value) after the same shall have become due and payable, except to the
extent such amounts are in dispute and have not been established to be due and payable, or (iii)
an event which is or, with the passage of time would be, a Lease Event of Default under Section
17(e) or (f) of the Network Lease.

“Software License Consents” and each a “Software License Consent”, shall mean (i) the Consent
executed September 17, 2003 of Telegyr Systems, Inc. to the conveyance to the Owner Lessor pursuant
to the Head Lease of the Software License described in clause (i) of the definition of “Software
Licenses”, and (ii) the Consent of Itron, Inc., executed by
Itron, Inc. on September 19, 2003, to
the conveyance to the Owner Lessor pursuant to the Head Lease of the Software License described in
clause (ii) of the definition of “Software Licenses”.

“Software Licenses” and each a “Software License” shall mean (i) the Non-Exclusive
Software/Firmware Source License Agreement No. 98PYC-224423
between TVA and Telegyr

23

 

Systems, Inc., (ii) the Software License Agreements dated March 30, 2000, as amended,
between TVA and Itron, Inc., and (iii) any proprietary software license in which TVA is the
licensee possessed by TVA on the Closing Date or acquired during the Network Lease Term, utilized
in connection with and necessary to the operation of the Network as an integrated system for its
intended functions which TVA may assign without the consent of the
vendor.

“Software Rights” shall mean all rights in the computer software utilized in connection with the
operation that are necessary for the operation, of the Network as an integrated system for its
intended use, (i) which have been developed and are owned by TVA, or (ii) which have been licensed
to TVA pursuant to the Software Licenses.

“Special Lessee Transfer” shall have the meaning specified in Section 13 of the Participation
Agreement.

“Special Lessee Transfer Amount” shall mean for any date, the amount determined as follows:

          (i) if the determination date shall be a Termination Date, the Termination Value under the Network
Lease on such date or, if the determination date shall be the Early Purchase Date, the Early
Purchase Price; plus

          (ii) any unpaid Basic Lease Rent due before the date of such determination, minus

          (iii) the
sum of all outstanding principal and accrued interest on the Notes, if any, on such
determination date (in each case, if such determination date is a Rent Payment Date, without
including any Basic Lease Rent due on such determination date).

“Special Lessee Transfer Event” shall mean the occurrence of either of (i) a Regulatory Event of
Loss, or (ii) a Burdensome Termination Event under Section 13 of the Network Lease.

“State Deductions” shall have the meaning specified in Section 1.1 of the Tax Indemnity Agreement.

“Statutory Trust Act” shall have the meaning specified in Section 1.1 of the Trust Agreement.

“Subordinated Resolution” shall mean the Tennessee Valley Authority Subordinated Debt resolution
adopted March 29, 1995, as it may be amended and supplemented.

“Substituted Components” shall have the meaning specified in Section 14A.3 of the Network Lease.

“Substituted Non-Network Equipment” shall have the meaning specified in Section 14A.3 of the
Network Lease.

“Supplemental Lease Rent” shall mean any and all amounts, liabilities and obligations (other than
Basic Lease Rent ) that TVA assumes or agrees to pay under the Operative Documents (whether or not
identified as “Supplemental Lease Rent”) to the Owner Lessor or any other Person, including
Termination Value and Make-Whole Premium.

24

 

“System Operation Center” shall mean TVA’s System Operation Center located in Chattanooga,
Tennessee, which provides the overall management of the Transmission Plant, overseeing the flows of
electric power over broad areas as well as responding to events occurring at individual points
within the Transmission Plant, and which consists of central servers which support the electricity
transmission monitoring and control software applications, workstations providing the human
operator interface, interfaces to external networks (including the Interregional Security Network),
Local Area Network (LAN) equipment, servers controlling communications with field devices, and data
storage devices.

“Tax” or “Taxes” shall mean all fees, taxes (including sales taxes, use taxes, stamp taxes,
value-added taxes, ad valorem taxes and property taxes (personal and real, tangible and
intangible), levies, assessments, withholdings and other charges and impositions of any nature,
plus all related interest, penalties, fines and additions to tax, now or hereafter imposed by any
Federal, state, local or foreign government or other taxing authority (including penalties or other
amounts payable pursuant to subtitle B of Title I of ERISA).

“Tax Advance” shall have the meaning specified in Section 9.2(g)(iii)(4) of the Participation
Agreement.

“Tax Assumptions” shall mean the items described in Section 1.1 of the Tax Indemnity Agreement.

“Tax Benefit” shall have the meaning specified in Section 9.2(e) of the Participation Agreement.

“Tax Claim” shall have the meaning specified in Section 9.2(g)(i) of the Participation Agreement.

“Tax Event” shall mean any event or transaction treated, for federal income tax purposes, as a
taxable sale or exchange of the Lessor Note.

“Tax Indemnitee” shall have the meaning specified in Section 9.2(a) of the Participation
Agreement.

“Tax
Indemnity Agreement” shall mean the Tax Indemnity Agreement (A1), dated as of the
Closing Date, between TVA and the Owner Participant.

“Tax Law Change” shall have the meaning specified in Section 12.2(ii) of the Participation
Agreement.

“Tax Loss” shall have the meaning specified in Section 3.1(B) of the Tax Indemnity Agreement.

“Tax Misrepresentation” shall have the meaning specified in Section 3.1(A) of the Tax indemnity
Agreement.

“Tax Representation” shall mean each of the items described in Section 1.2 of the Tax
Indemnity Agreement.

25

 

“Tax Savings” shall have the meaning specified in Section 4 of the Tax Indemnity Agreement.

“Terminated Portion” shall have the meaning set forth in
Section 14A.2 of the Network Lease.

“Termination Date” shall mean each of the monthly dates during the Network Lease Term identified as
a “Termination Date” on Schedule 2 of the Network Lease.

“Termination Percentage” shall have the meaning set forth in Section 14A.2 of the Network Lease.

“Termination Value” for any Termination Date shall mean an amount equal to the product of the Owner
Lessor’s Cost and the percentage set forth under the heading “Termination Value Percentage” on
Schedule 2 of the Network Lease for such Termination Date; provided, however, that if as a result
of a prior Partial Termination, the Termination Percentage of Termination Value has been paid with
respect to the Terminated Portion of the Network, the Termination Value shall be reduced by the
Termination Percentage of the Termination Value applicable to such
Partial Termination.

“Transaction” shall mean, collectively, the transactions contemplated under the Participation
Agreement and the other Operative Documents.

“Transaction Costs” shall mean the following costs to the extent substantiated or otherwise
supported in reasonable detail:

          (i) the cost of reproducing and printing the Operative Documents and the Offering Circular and all
costs and fees, including filing and recording fees and recording, transfer, mortgage, intangible
and similar taxes in connection with the execution, delivery, filing and recording of the Head
Lease, the Network Lease and any other Operative Document, and any other document required to be
filed or recorded pursuant to the provisions hereof or of any other Operative Document and any
Uniform Commercial Code filing fees in respect of the perfection of any security interests created
by any of the Operative Documents or as otherwise reasonably required by the Owner Lessor or the
Lease Indenture Trustee;

          (ii) the
reasonable fees and expenses of Hunton & Williams LLP, counsel to the Owner Participant,
for services rendered in connection with the negotiation, execution and delivery of the
Participation Agreement and the other Operative Documents;

          (iii) the reasonable fees and expenses of Orrick, Herrington & Sutcliffe LLP, special counsel to
TVA, and Sutherland, Asbill & Brennan, Butler Snow, Wyatt, Tarrant & Combs LLP and Waller, Lansden,
Dortch & Davis, PLLC, local counsel to TVA, for services rendered in connection with the
negotiation, execution and delivery of the Participation Agreement, the other Operative Documents
and the Underwriting Agreement and the preparation of the Offering Circular;

          (iv) the reasonable fees and expenses of Richards, Layton & Finger, P.A., counsel for the Owner
Lessor, the Owner Trustee, and the Trust Company for services rendered in connection with the
negotiation, execution and delivery of the Participation Agreement and the other Operative
Documents;

26

 

          (v) the reasonable fees and expenses of Sullivan & Cromwell LLP, counsel to the Initial Purchasers,
for services rendered in connection with the negotiation, execution and delivery of the
Participation Agreement, the other Operative Documents and the Underwriting Agreement and the
preparation of the Offering Circular;

          (vi) the reasonable fees and expenses of Morris, James, Hitchens & Williams LLP, counsel for the
Lease Indenture Trustee, the Trust Company and the Pass Through Trustee, for services rendered in
connection with the negotiation, execution and delivery of the Participation Agreement and the
other Operative Documents;

          (vii) the underwriting discounts and commissions payable to, and reasonable out-of-pocket expenses
of, the Initial Purchasers;

          (viii) the reasonable fees and expenses of PricewaterhouseCoopers LLP for services rendered in
connection with the Transaction;

          (ix) the reasonable out-of-pocket expenses of the Owner Participant, the Owner Lessor and the
advisor to the Owner Participant;

          (x) the initial fees and expenses of the Owner Trustee, the Independent Trustee, the Lease Trustee
and the Pass Through Trustee in connection with the execution and delivery of the Participation
Agreement and the other Operative Documents to which either one is or will be a party;

          (xi) the fees and expenses of the Appraiser for services rendered in connection with delivering the
Closing Appraisal required by Section 4 of the Participation Agreement;

          (xii) the fees and expenses of the QTE Consultant for services rendered in connection with
delivering the QTE Report required by Section 4 of the Participation
Agreement;

          (xiii) the fees and expenses of the Rating Agencies in connection with the rating of the Lease
Debt;

          (xiv) the fees and expenses of the Advisors to the Lessee for services rendered in connection with
the Transaction; and

          (xv) any other fees, costs, expenses and charges agreed in writing between the Owner Participant
and TVA.

Notwithstanding
the foregoing, Transaction Costs shall not include internal costs and expenses such
as salaries and overhead of whatsoever kind or nature nor costs incurred by the parties to the
Participation Agreement pursuant to arrangements with third parties for services (other than those
expressly referred to above), computer time procurement (other than out-of-pocket expenses of the
Owner Participant), financial analysis and consulting, advisory services (other than those
expressly referred to above), and costs of a similar nature.

27

 

“Transaction Documents” shall have the meaning specified in the Assignment and Assumption
Agreement.

“Transaction Expense Deductions” shall have the meaning specified in Section 1.1 of the Tax
Indemnity Agreement.

“Transaction Party(ies)” shall mean, individually or collectively as the context may require, all
or any of the parties to the Operative Documents (including the Trust Company, and Wilmington
Trust).

“Transmission Plant” shall mean TVA’s physical plant and equipment in the States of Tennessee,
Kentucky, Georgia and Mississippi used for the transmission of electricity, including without
limitation electric power transmission cables and associated towers, transformers and circuit
breakers (but excluding any Components of the Network).

“Transferee” shall have the meaning specified in Section 7.1(a) of the Participation Agreement.

“Treasury Regulations” shall mean regulations, including temporary regulations, promulgated under
the Code.

“Trust
Agreement” shall mean the Trust Agreement (Al), dated as of September 22, 2003, among the
Trust Company, Frank McDonald and the Owner Participant pursuant to which the Owner Lessor shall be
governed.

“Trust Company” shall mean Wells Fargo Delaware Trust Company, a Delaware limited purpose trust
company, in its individual capacity.

“Trust Indenture Act” shall mean the Trust Indenture Act of 1939 as in force at the date as of
which this instrument was executed except as provided in Section 905; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means,
to the extent required by any such amendment, the Trust Indenture Act
of 1939 as so amended.

“TVA” shall mean Tennessee Valley Authority, a wholly owned corporate agency and instrumentality
of the United States.

“TVA
Act” shall mean the Tennessee Valley Authority Act of 1933, as amended.

“Underpayment of Basic Lease Rent” means, as of any date prior to the Expiration Date on which the
Network Lease shall terminate (the “date of termination”), the excess (if any) of (y) the aggregate
Basic Lease Rent allocated pursuant to Section 3.2(b) of the Network Lease to the period from (and
including) the Closing Date to (and including) such date of termination, over (z) the aggregate
Basic Lease Rent payable pursuant to Section 3.2(a) of the Network Lease on all Rent Payment Dates
on or prior to such date of termination. The amount of any Underpayment of Basic Lease Rent as of
each Termination Date is set forth on column (b) of Schedule ID to the Network Lease.

28

 

“Underwriting Agreement” shall mean the Underwriting Agreement, dated September 24, 2003, between
TVA and the Initial Purchasers.

“Undivided
Interest” shall mean an undivided interest in the tangible property constituting the
Network equal to the Owner Lessor’s Percentage that is leased to the Owner Lessor pursuant to the
Head Lease. The Undivided Interest shall not include the Software Rights.

“Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code as in effect in the
applicable jurisdiction.

“U.S. Government Obligations” shall mean securities that are (i) direct obligations of the
United States of America for the payment of which its full faith and credit is pledged or (ii)
obligations of a Person controlled or supervised by and acting as an agency or instrumentality of
the United States of America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case under clauses (i) or (ii)
are not callable or redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect to any such U.S.
Government Obligation or a specific payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of the holder of a depository receipt, provided
that (except as required by law) such custodian is not authorized to make any deduction in the
amount payable to the holder of such depository receipt from any amount received by the custodian
in respect of the U.S. Government Obligation or the specific payment of interest on or principal of
the U.S. Government Obligation evidenced by such depository receipt.

“Verifier” shall have the meaning specified in Section 3.4(c) of the Network Lease.

“Wilmington Trust” shall mean Wilmington Trust Company in its individual capacity.

29

 

Index

	 	 	 	 	 
	Actual Knowledge
	 	 	2	 
	Additional Certificates
	 	 	3	 
	Additional Lessor Notes
	 	 	3	 
	Advisors to the Lessee
	 	 	3	 
	Affiliate
	 	 	3	 
	After-Tax Basis
	 	 	3	 
	Applicable
Law
	 	 	4	 
	Applicable
Rate
	 	 	4	 
	Appraisal
Procedure
	 	 	4	 
	Appraiser
	 	 	4	 
	Assigned Documents
	 	 	4	 
	Assignment and Assumption Agreement
	 	 	4	 
	Assumed Deductions
	 	 	4	 
	Assumed Tax Rate
	 	 	4	 
	Authorized Agent
	 	 	5	 
	Bankruptcy Code
	 	 	5	 
	Base Rate
	 	 	5	 
	Basic Lease Rent
	 	 	5	 
	Beneficial Interest
	 	 	5	 
	Bond Resolution
	 	 	5	 
	Burdensome Termination Event
	 	 	5	 
	Business Dav
	 	 	5	 
	Certificateholders
	 	 	5	 
	Certificates
	 	 	5	 
	Certificates Register
	 	 	5	 
	Claim
	 	 	5	 
	Closing
	 	 	6	 
	Closing Appraisal
	 	 	6	 
	Closing Date
	 	 	6	 
	Code
	 	 	6	 
	Competitor
	 	 	7	 
	Component
	 	 	7	 
	Corporate Trust Office
	 	 	7	 
	Deduction Loss
	 	 	7	 
	Depreciation Deductions
	 	 	7	 
	Discount Rate
	 	 	7	 
	Distribution
	 	 	7	 
	Dollars or
the sign $
	 		7	 
	DTC
	 	 	7	 
	Early Buy Out Date
	 	 	7	 
	Early Buy Out Option
	 	 	7	 
	Early Buy Out Price
	 	 	7	 
	Effective Date
	 	 	7	 
	Effective Rate
	 	 	7	 
	Energy Management, Protection and Billing System
	 	 	7	 
	Equity Investment
	 	 	8	 
	ERISA
	 	 	8	 
	Escrowed Software
	 	 	8	 
	Event of Default
	 	 	8	 
	Event of Loss
	 	 	8	 
	Evidences of Indebtedness
	 	 	9	 
	Excepted Payments
	 	 	9	 
	Excepted Rights
	 	 	9	 
	Excess Amount
	 	 	9	 
	Exchange Act
	 	 	9	 
	Excluded Property
	 	 	9	 
	Excluded Taxes
	 	 	9	 
	Expiration Date
	 	 	9	 
	Fair Market Rental Value
	 	 	10	 
	Fair Market Sales Value
	 	 	10	 
	Federal Power Act
	 	 	10	 
	FERC
	 	 	10	 
	Final Determination
	 	 	10	 
	GAAP
	 	 	10	 
	Government
	 	 	11	 
	Government Action
	 	 	11	 
	Governmental Entity
	 	 	11	 
	Guaranty
	 	 	11	 
	Head Lease
	 	 	11	 
	Head Lease Basic Term
	 	 	11	 
	Head Lease Renewal Term
	 	 	11	 
	Head Lease Rent
	 	 	11	 
	Head Lease Term
	 	 	11	 
	Head Lessee
	 	 	11	 
	Head Lessor
	 	 	11	 
	Holding Company Act
	 	 	11	 
	Inclusion Loss
	 	 	11	 
	Indemnitee
	 	 	11	 
	Indenture Estate
	 	 	11	 
	Indenture Trustee’s Liens
	 	 	12	 
	Independent Appraiser
	 	 	12	 
	Independent Engineer
	 	 	12	 
	Independent Trustee
	 	 	12	 

 

 

INDEX (continued)

	 	 	 	 	 
	 	 	Page	 
	Initial Purchaser
	 	 	12	 
	Interest Deductions
	 	 	12	 
	Interregional Security Network
	 	 	12	 
	IRS
	 	 	12	 
	Joint Operating Agreement
	 	 	12	 
	Lease Debt
	 	 	13	 
	Lease Debt Rate
	 	 	13	 
	Lease Event of Default
	 	 	13	 
	Lease Indenture
	 	 	13	 
	Lease Indenture Bankruptcy Default
	 	 	13	 
	Lease Indenture Event of Default
	 	 	13	 
	Lease Indenture Payment Default
	 	 	13	 
	Lease Indenture Trustee
	 	 	13	 
	Lease Indenture Trustee Office
	 	 	13	 
	Lease Indenture Trustee’s Account
	 	 	13	 
	Lessee
	 	 	13	 
	Lessee Action
	 	 	13	 
	Lessee Person
	 	 	13	 
	Lessee’s Interest

	 	 	13	 
	Lessor Estate
	 	 	14	 
	Lessor Group Member
	 	 	14	 
	Lessor Note
	 	 	14	 
	Lien
	 	 	14	 
	List of Competitors
	 	 	14	 
	Loan
	 	 	14	 
	Majority in Interest of Noteholders
	 	 	14	 
	Make Whole Premium
	 	 	14	 
	Material Adverse Effect
	 	 	15	 
	Measurement
and Analysis Sytem
	 	 	15	 
	Modification
	 	 	15	 
	Moody’s
	 	 	15	 
	Network
	 	 	15	 
	Network Cost
	 	 	16	 
	Network Function
	 	 	16	 
	Network Lease
	 	 	16	 
	Network Lease Term
	 	 	16	 
	Note Register
	 	 	16	 
	Noteholder
	 	 	16	 
	Notes
	 	 	17	 
	Obsolescence Termination Date
	 	 	17	 
	Offering Circular
	 	 	17	 
	Officer’s Certificate
	 	 	17	 
	OP Guarantor

	 	 	17	 
	Operative Documents
	 	 	17	 
	Optional Modification
	 	 	17	 
	Other Head Leases
	 	 	17	 
	Other Lease Indentures
	 	 	17	 
	Other Network Leases
	 	 	17	 
	Other Owner Lessor’s Interests
	 	 	17	 
	Other Owner Lessors
	 	 	17	 
	Other Owner Participants
	 	 	18	 
	Other Participation Agreements
	 	 	18	 
	Other Undivided Interests
	 	 	18	 
	Overdue Rate
	 	 	18	 
	Overpayment of Basic Lease Rent
	 	 	18	 
	Owner Lessor
	 	 	18	 
	Owner Lessor Agreement
	 	 	18	 
	Owner Lessor’s Account
	 	 	18	 
	Owner Lessor’s Cost
	 	 	18	 
	Owner Lessor’s Interest
	 	 	18	 
	Owner Lessor’s Lien
	 	 	18	 
	Owner Lessor’s Percentage
	 	 	19	 
	Owner Participant
	 	 	19	 
	Owner Participant Transaction Expenses
	 	 	19	 
	Owner Participant’s Commitment
	 	 	19	 
	Owner Participant’s Lien
	 	 	19	 
	Owner Participant’s Net Economic Return
	 	 	19	 
	Owner Trustee
	 	 	19	 
	Partial Sale Termination Date
	 	 	20	 
	Partial Termination
	 	 	19	 
	Partial Termination Payment
	 	 	20	 
	Participation Agreement
	 	 	20	 
	Pass Through Trust
	 	 	20	 
	Pass Through Trust Agreement
	 	 	20	 
	Pass Through Trustee
	 	 	20	 
	Permitted Acts
	 	 	20	 
	Permitted Closing Date Liens
	 	 	20	 
	Permitted Instruments
	 	 	20	 
	Permitted Liens
	 	 	20	 
	Permitted Post Network Lease Term Liens

	 	 	21	 
	Permitted Securities
	 	 	21	 
	Person
	 	 	21	 
	Plan
	 	 	21	 
	Pricing Assumptions
	 	 	21	 
	Proceeds
	 	 	22	 
	Prudent Industry Practice
	 	 	22	 
	Purchase Option
	 	 	22	 

-ii-

 

 

INDEX (continued)

	 	 	 	 	 
	 	 	Page	 
	Purchase Option Price
	 	 	22	 
	QTE Consultant
	 	 	22	 
	QTE Report
	 	 	22	 
	Rating Agencies
	 	 	22	 
	Reasonable Basis
	 	 	22	 
	Rebuilding Closing Date
	 	 	22	 
	Redemption Date
	 	 	22	 
	Regulatory Event of Loss
	 	 	22	 
	Related Party
	 	 	22	 
	Reliability Operations Center
	 	 	23	 
	Rent
	 	 	23	 
	Rent Payment Date
	 	 	23	 
	Rental Period
	 	 	23	 
	Replacement Component
	 	 	23	 
	Required Modification
	 	 	23	 
	Requisition
	 	 	23	 
	Residual Value Insurance

	 	 	23	 
	Residual Value Insurance Amount

	 	 	23	 
	Residual Value Insurance Standard

	 	 	23	 
	Responsible Officer

	 	 	24	 
	Revenues

	 	 	24	 
	RVI Advisor

	 	 	24	 
	S&P

	 	 	24	 
	SCADA

	 	 	24	 
	Scheduled Closing Date

	 	 	24	 
	Scheduled Payment Date

	 	 	24	 
	SEC

	 	 	24	 
	Secured Indebtedness
	 	 	24	 
	Securities Act
	 	 	24	 
	Security

	 	 	24	 
	Significant Indenture Default

	 	 	24	 
	Significant Network Lease Default

	 	 	25	 
	Software License Consents

	 	 	25	 
	Software Licenses

	 	 	25	 
	Software Rights

	 	 	25	 
	Special Lessee Transfer

	 	 	25	 
	Special Lessee Transfer Amount

	 	 	25	 
	Special Lessee Transfer Event

	 	 	26	 
	State Deductions

	 	 	26	 
	Statutory Trust Act

	 	 	26	 
	Subordinated Resolution

	 	 	26	 
	Substituted Components

	 	 	26	 
	Substituted
Non-Network Equipment
	 	 	26	 
	Supplemental Lease Rent
	 	 	26	 
	System Operation Center
	 	 	26	 
	Tax
	 	 	26	 
	Tax Advance
	 	 	26	 
	Tax Assumptions
	 	 	26	 
	Tax Benefit
	 	 	27	 
	Tax Claim
	 	 	27	 
	Tax Event
	 	 	27	 
	Tax Indemnitee
	 	 	27	 
	Tax Indemnity Agreement
	 	 	27	 
	Tax Law Change
	 	 	27	 
	Tax Loss
	 	 	27	 
	Tax Misrepresentation
	 	 	27	 
	Tax Representation
	 	 	27	 
	Tax Savings
	 	 	27	 
	Taxes
	 	 	26	 
	Terminated Portion
	 	 	27	 
	Termination
Date
	 	 	27	 
	Termination Percentage
	 	 	27	 
	Termination Value
	 	 	27	 
	Transaction
	 	 	28	 
	Transaction Costs
	 	 	28	 
	Transaction Documents
	 	 	29	 
	Transaction Expense Deductions
	 	 	29	 
	Transaction Party(ies)
	 	 	29	 
	Transferee
	 	 	30	 
	Transmission Plant
	 	 	29	 
	Treasury Regulations
	 	 	30	 
	Trust Agreement
	 	 	30	 
	Trust Company
	 	 	30	 
	Trust Indenture Act

	 	 	30	 
	TVA
	 	 	30	 
	TVA Act
	 	 	30	 
	U.S. Government Obligations
	 	 	30	 
	Underpayment of Basic Lease Rent
	 	 	30	 
	Underwriting Agreement
	 	 	30	 
	Undivided Interest
	 	 	30	 
	Uniform Commercial Code or UCC
	 	 	30	 
	Verifier
	 	 	31	 
	Wilmington Trust
	 	 	31	 

-iii-

 

 

CONTROL, MONITORING AND DATA ANALYSIS NETWORK

PARTICIPATION AGREEMENTS

The September 22, 2003, Participation Agreement (Al) among the Tennessee Valley Authority (“TVA”),
NVG Network I Statutory Trust, Wells Fargo Delaware Trust Company, Wachovia Mortgage Corporation,
and Willington Trust in two separate capacities has been filed. Each of the four Participation
Agreements is substantially similar, except as noted below:

Participation
Agreement (Al) covers an undivided 26.640926641 percent interest in the Control,
Monitoring and Data Analysis Network (“Network”). Wachovia
Mortgage Corporation, as owner
participant, agrees to take certain actions to enable NVG Network I Statutory Trust, the owner
lessor, to have the funds necessary to pay TVA head lease rent
attributable a 26.640926641 percent interest in the Network. TVA agrees to lease a 26.640926641 percent undivided interest in the Network by means
of a head lease to NVG Network I Statutory Trust, as owner lessor.
NVG Network I Statutory Trust,
as owner lessor agrees to lease back to TVA a
26.640926641 percent undivided interest in the Network by means of a
network lease.

Participation
Agreement (A2) covers an undivided 33.462033462 percent interest in the Network.
Fleet Capital Corporation, as owner participant, agrees to take certain actions to enable NVG
Network II Statutory Trust, the owner lessor, to have the funds necessary to pay
TVA head tease rent attributable a 33.462033462 percent interest in the Network. TVA agrees to
lease a 33.462033462 percent undivided interest in the
Network by means of a head lease to NVG Network II Statutory Trust, as owner lessor. NVG Network II
Statutory Trust, as owner lessor agrees to lease back to TVA a
33.462033462 percent undivided interest in the Network by
means of a network lease.

Participation
Agreement (A3) covers an undivided 21.879021879 percent interest in the Network.
SunTrust Leasing Corporation, as owner participant, agrees to take certain actions to enable NVG
Network III Statutory Trust, the owner lessor, to have the funds necessary to
pay TVA head lease rent attributable a 21.879021879 percent interest in the Network. TVA agrees
to lease a 21.879021879 percent undivided interest in
the Network by means of a head lease to NVG Network III Statutory Trust, as owner lessor. NVG
Network III Statutory Trust, as owner lessor agrees to lease back to
TVA a 21.879021879 percent undivided interest in the
Network by means of a network lease.

Participation
Agreement (A4) covers an undivided 18.018018018 percent interest in the Network.
Wachovia Mortgage Corporation, as owner participant, agrees to take certain actions to enable NVG
Network IV Statutory Trust, the owner lessor, to have the funds necessary to
pay TVA head lease rent attributable a 18.018018018 percent interest in the Network. TVA agrees
to lease a 18.018018018 percent undivided interest in
the Network by means of a head lease to NVG Network IV Statutory Trust, as owner

 

 

lessor. NVG Network IV Statutory Trust, as owner lessor agrees to lease back to TVA a
18.018018018 percent undivided interest in the Network by means of a
network lease.Ex-10.11 Network Lease Agreement

 

Exhibit 10.11

This Network Lease Agreement has been filed to provide investors with information regarding its
terms. It is not intended to provide any other factual information about the Tennessee Valley
Authority. The representations and warranties of the parties in this Network Lease Agreement were
made to, and solely for the benefit of, the other parties to this Network Lease Agreement. The
assertions embodied in the representations and warranties may be qualified by information included
in schedules, exhibits or other materials exchanged by the parties that may modify or create
exceptions to the representations and warranties. Accordingly, investors should not rely on the
representations and warranties as characterizations of the actual state of facts at the time they
were made or otherwise.

 

 

Final

NETWORK LEASE AGREEMENT

(A1)

Dated as of September 26, 2003

between

NVG NETWORK I STATUTORY TRUST,

as Owner Lessor

and

Tennessee Valley Authority,

as Lessee

 

Lease of Control, Monitoring and

 Data Analysis Network

CERTAIN OF
THE RIGHT, TITLE AND INTEREST OF THE OWNER LESSOR IN AND TO THIS NETWORK LEASE AND
THE RENT DUE AND TO BECOME DUE HEREUNDER HAVE BEEN ASSIGNED AS COLLATERAL SECURITY TO, AND ARE
SUBJECT TO, A SECURITY INTEREST IN FAVOR OF, WILMINGTON TRUST COMPANY, NOT IN ITS
INDIVIDUAL CAPACITY BUT SOLELY AS LEASE INDENTURE TRUSTEE UNDER AN INDENTURE OF TRUST AND SECURITY
AGREEMENT (Al), DATED AS OF SEPTEMBER 26, 2003, BETWEEN SAID LEASE
INDENTURE TRUSTEE, AS SECURED
PARTY, AND THE OWNER LESSOR, AS DEBTOR. SEE SECTION 22 HEREOF FOR INFORMATION CONCERNING THE
RIGHTS OF THE ORIGINAL HOLDER AND THE HOLDERS OF THE VARIOUS COUNTERPARTS HEREOF.

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	 	Page
	SECTION 1. DEFINITIONS
	 	 	1	 
	SECTION 2. LEASE OF THE UNDIVIDED INTEREST; ASSIGNMENT OF
SOFTWARE RIGHTS
	 	 	1	 
	SECTION 3. NETWORK LEASE TERM AND RENT
	 	 	2	 
	Section 3.1 Network Lease Term
	 	 	2	 
	Section 3.2 Rent
	 	 	2	 
	Section 3.3 Supplemental Lease Rent

	 	 	3	 
	Section 3.4 Adjustment of Lease Schedules
	 	 	3	 
	Section 3.5 Manner of Payments
	 	 	5	 
	SECTION 4. DISCLAIMER OF WARRANTIES; RIGHT OF QUIET ENJOYMENT
	 	 	5	 
	Section 4.1 Disclaimer of Warranties
	 	 	5	 
	Section 4.2 Quiet Enjoyment
	 	 	7	 
	SECTION 5. RETURN OF NETWORK
	 	 	7	 
	Section 5.1 Return
	 	 	7	 
	Section 5.2 Condition Upon Return
	 	 	8	 
	SECTION 6. LIENS
	 	 	8	 
	SECTION 7. MAINTENANCE; REPLACEMENTS OF COMPONENTS
	 	 	9	 
	Section 7.1 Maintenance
	 	 	9	 
	Section 7.2 Replacement and Removal of Components
	 	 	9	 
	SECTION 8. MODIFICATIONS
	 	 	10	 
	Section 8.1 Required Modifications
	 	 	10	 
	Section 8.2 Optional Modifications
	 	 	10	 
	Section 8.3 Title to Modifications
	 	 	10	 
	Section 8.4 Report of Modifications
	 	 	11	 
	SECTION 9. NET LEASE
	 	 	11	 
	SECTION 10. EVENTS OF LOSS
	 	 	12	 
	Section 10.1 Occurrence of Events of Loss
	 	 	12	 
	Section 10.2 Payment of Termination Value; Termination of Basic Lease Rent
	 	 	13	 
	Section 10.3 Repair or Replace
	 	 	14	 

-i-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	 	Page
	Section 10.4 Application of Payments Not Relating to an Event of Loss
	 	 	16	 
	SECTION 11. INSURANCE
	 	 	17	 
	Section 11.1 Insurance by Owner Lessor
	 	 	17	 
	Section 11.2 Insurance by the Lessee
	 	 	17	 
	SECTION 12. INSPECTION
	 	 	17	 
	SECTION 13. TERMINATION OPTION FOR BURDENSOME EVENTS
	 	 	18	 
	Section 13.1 Election to Terminate
	 	 	18	 
	Section 13.2 Payments Upon Termination
	 	 	19	 
	Section 13.3 Procedure for Exercise of Termination Option
	 	 	19	 
	Section 13.4 Assumption of the Lessor Note
	 	 	20	 
	SECTION 14. TERMINATION FOR OBSOLESCENCE
	 	 	20	 
	Section 14.1 Termination
	 	 	20	 
	Section 14.2 Solicitation of Offers
	 	 	21	 
	Section 14.3 Right of Owner Lessor to Retain the Owner Lessor’s Interest
	 	 	21	 
	Section 14.4 Procedure for Exercise of Termination Option
	 	 	22	 
	SECTION 14A. PARTIAL TERMINATION IN CONSEQUENCE OF SALES OF TRANSMISSION ASSETS
	 	 	23	 
	Section 14A.1 Partial Termination
	 	 	23	 
	Section 14A.2 Appraisal
	 	 	24	 
	Section 14A.3 Substituted Components; Substituted Non-Network Equipment
	 	 	24	 
	Section 14A.4 Partial Termination Payment
	 	 	26	 
	Section 14A.5 Conveyance of Terminated Portion
	 	 	27	 
	SECTION 15. EARLY PURCHASE OPTION
	 	 	27	 
	Section 15.1 Election of Early Purchase
	 	 	27	 
	Section 15.2 Procedure for Exercise of Early Purchase Option
	 	 	27	 
	SECTION 16. PURCHASE OPTION
	 	 	28	 
	Section 16.1 Election of Purchase Option
	 	 	28	 
	Section 16.2 Procedure for Exercise of Purchase Option
	 	 	29	 
	SECTION 17. EVENTS OF DEFAULT
	 	 	29	 
	SECTION 18. REMEDIES
	 	 	31	 

-ii-

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	 	Page
	Section 18.1 Remedies for Lease Event of Default
	 	 	31	 
	Section 18.2 Cumulative Remedies
	 	 	34	 
	Section 18.3 No Delay or Omission to be Construed as Waiver
	 	 	34	 
	Section 18.4 Rent Trueup
	 	 	34	 
	SECTION 19. SECURITY INTEREST AND INVESTMENT OF SECURITY
FUNDS
	 	 	35	 
	SECTION 20. LESSEE’S RIGHT TO SUBLEASE; ASSIGNMENT
	 	 	35	 
	Section 20.1 Right to Sublease
	 	 	35	 
	Section 20.2 Right to Assign
	 	 	35	 
	Section 20.3 Right to Assign or Sublease to Regional
Transmission Organizations
	 	 	36	 
	Section 20.4 Operation
	 	 	36	 
	SECTION 21. OWNER LESSOR’S RIGHT TO PERFORM
	 	 	37	 
	SECTION 22. SECURITY FOR OWNER LESSOR’S OBLIGATIONS TO
THE LEASE INDENTURE TRUSTEE
	 	 	37	 
	SECTION 23. WAIVER OF RIGHT TO PARTITION
	 	 	37	 
	SECTION 24. MISCELLANEOUS
	 	 	38	 
	Section 24.1 Amendments and Waivers
	 	 	38	 
	Section 24.2 Notices
	 	 	38	 
	Section 24.3 Survival
	 	 	39	 
	Section 24.4 Successors and Assigns
	 	 	39	 
	Section 24.5 “True Lease”
	 	 	40	 
	Section 24.6 Business Day
	 	 	40	 
	Section 24.7 Governing Law
	 	 	40	 
	Section 24.8 Severability
	 	 	40	 
	Section 24.9 Counterparts
	 	 	40	 
	Section 24.10 Headings and Table of Contents
	 	 	40	 
	Section 24.11 Further Assurances
	 	 	40	 
	Section 24.12 Effectiveness
	 	 	40	 
	Section 24.13 Owner Lessor Covenant
	 	 	40	 
	Section 24.14 Limitation of Liability
	 	 	41	 

-iii-

 

Network Lease Agreement

(A1)

     This
NETWORK LEASE AGREEMENT (A1), dated as of September 26,
2003 (this “Network Lease”),
between NVG NETWORK I STATUTORY TRUST, a Delaware statutory
trust (the “Owner Lessor”), and
TENNESSEE VALLEY AUTHORITY, a wholly owned corporate agency and instrumentality of the United
States (the “Lessee” or “TVA”).

WITNESSETH:

     WHEREAS,
the Lessee (i) holds title to the Network (other than the Software Rights) and (ii) owns,
or has a license to use, the Software Rights;

     WHEREAS, pursuant to the Head Lease, the Lessee has leased an undivided interest equal to the Owner
Lessor’s Percentage in the Network (other than the Software Rights) to the Owner Lessor (which
undivided interest, other than the Software Rights, is referred to
herein as the “Undivided
Interest”);

     WHEREAS, pursuant to the Head Lease, the Lessee has assigned the Software Licenses and/or granted a
license to use the Software Rights owned by the Lessee, to the Owner Lessor for the Head Lease
Term, and the Owner Lessor has accepted such assignment of, or grant of, such license to use, such
Software Rights from the Lessee; and

     WHEREAS, pursuant to this Network Lease, the Owner Lessor will lease the Undivided Interest to the
Lessee for the term provided herein and will assign its rights in the Software Rights to the Lessee
for the term provided herein.

     NOW, THEREFORE, in consideration of the foregoing premises, the mutual agreements herein contained,
and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

SECTION 1. DEFINITIONS

     Unless the context hereof otherwise requires, capitalized terms used in this Network
Lease, including those in the recitals, and not otherwise defined herein shall have the respective
meanings set forth in Appendix A hereto. The general provisions of such Appendix A shall apply to
the terms used in this Network Lease and specifically defined herein.

SECTION 2. LEASE OF THE UNDIVIDED INTEREST; ASSIGNMENT OF SOFTWARE RIGHTS

     The Owner Lessor hereby leases the Undivided Interest and assigns its interest in the
Software Rights, upon the terms and conditions set forth herein, to the Lessee for the Network
Lease Term, and the Lessee hereby leases the Undivided Interest and accepts the assignment
of the Software Rights, upon the terms and conditions set forth herein, from the Owner
Lessor. The

 

 

Lessee and the Owner Lessor understand and agree that (i) this lease of the Undivided
Interest and assignment of the Software Rights is subject and subordinate to the interest of the
Head Lessee under the Head Lease, (ii) legal title to the Undivided Interest remains vested in the
Head Lessor, and (iii) ownership of the software constituting the Software Rights is vested in (a)
the vendors of the software in the case of software that is the subject of the Software Licenses,
or (b) the Lessee in the case of software owned by the Lessee. The Undivided Interest shall also
include an undivided interest equal to the applicable Owner Lessor’s Percentage in (x) all
Modifications which are incorporated in the Network and which pursuant to Section 8.3 hereof become
subject to this Network Lease, (y) all Replacement Components which become part of the Network
pursuant to Section 7.2 hereof and (z) all Substituted Components and Substituted Non-Network
Equipment that become subject to the Head Lease and this Network Lease pursuant to Section 14A.3
hereof. The Undivided Interest and Software Rights shall be subject to the terms of this Network
Lease from the date on which this Network Lease is executed and delivered.

SECTION 3. NETWORK LEASE TERM AND RENT

     Section 3.1
Network Lease Term. The term of this Network Lease (the
“Network Lease Term”) shall
commence on the Closing Date and shall terminate at 11:59 p.m. (New York City time) on September
26, 2027 subject to earlier termination in whole or in part pursuant to Section 10, 13, 14, 14A,
15, or 18 hereof.

     Section 3.2 Rent. (a) The Lessee hereby agrees to pay to the Owner Lessor basic lease
rent payable with respect to the Network Lease Term (“Basic
Lease Rent”) for the lease of the
Undivided Interest and assignment of the Software Rights as follows: each payment of Basic Lease
Rent shall be payable on each Rent Payment Date in the amount equal to the product of the Owner
Lessor’s Cost and the percentage set forth opposite such Rent Payment Date on Schedule 1A hereto,
subject to adjustment in accordance with Section 3.4 hereof. In the event this Network Lease shall
have been terminated in part pursuant to Section 14A with respect to the Termination Percentage of
the Network, Basic Lease Rent payable on any Rent Payment Date thereafter shall be reduced by an
amount equal to the product of the Termination Percentage and the amount otherwise determined
pursuant to the preceding sentence. All Basic Lease Rent to be paid pursuant to this Section 3.2(a)
shall be payable in the manner set forth in Section 3.5.

          (b) Basic Lease Rent shall be allocated to each full or partial calendar year during the
Network Lease Term (each, a “Rental Period”) as set forth on Schedule 1B hereto, and within each
Rental Period, Basic Lease Rent shall be allocated on a level daily basis. The Owner Lessor and
the Lessee agree that such allocation is intended to constitute an allocation of fixed rent within
the meaning of Treasury Regulation §1.467-1 (c)(2)(ii)(A) to each Rental Period. The Basic Lease
Rent payable on each Rent Payment Date pursuant to Section 3.2(a) shall be in satisfaction of the
Lessee’s obligation to pay the Basic Lease Rent allocated to the related Rental Period, as set
forth on Schedule 1C hereto.

          (c) Basic Lease Rent payable on any Termination Date and the Early
Purchase Price, the Purchase Option Price and the Termination Values have been determined on a net
basis, by taking into account any Underpayment of Basic Lease Rent or Overpayment of

2

 

Basic Lease Rent as of the Early Purchase Date, the date of the exercise of the Purchase
Option or Termination Date. Accordingly, on any such date, the Lessee’s obligation to pay to the
Owner Lessor any Underpayment of Basic Lease Rent and the Owner Lessor’s obligation to pay to the
Lessee any Overpayment of Basic Lease Rent shall be satisfied in full by the payment by the Lessee
to the Owner Lessor of the Early Purchase Price, Purchase Option Price or Termination Value due and
payable on such date.

     Section 3.3 Supplemental Lease Rent.
The Lessee also agrees to pay to the Owner Lessor, or to any
other Person entitled thereto as expressly provided herein or in any other Operative Document, as
appropriate, any and all Supplemental Lease Rent, promptly as the same shall become due and owing,
or where no due date is specified, promptly after demand by the Person entitled thereto, and in the
event of any failure on the part of the Lessee to pay any Supplemental Lease Rent, the Owner Lessor
shall have all rights, powers and remedies provided for herein or by law or equity or otherwise for
the failure to pay Basic Lease Rent. The Lessee will also pay as Supplemental Lease Rent, to the
extent permitted by Applicable Law, an amount equal to interest at the Overdue Rate on any part of
any payment of Basic Lease Rent not paid when due for any period for which the same shall be
overdue and on any Supplemental Lease Rent not paid when due (whether on demand or otherwise) for
the period from such due date until the same shall be paid. All Supplemental Lease Rent to be paid
pursuant to this Section 3.3 shall be payable in the manner set forth in Section 3.5.

     Section 3.4 Adjustment of Lease Schedules.

          (a) The Lessee and the Owner Lessor agree that Basic Lease Rent shall be adjusted after the Closing
Date, either upwards or downwards, to reflect the principal amount, amortization and interest rate
on any Additional Lessor Notes issued pursuant to Section 2.12
of the Lease Indenture in
connection with a refinancing of the Lessor Note pursuant to Section 11.1 or 11.2 of the
Participation Agreement, provided that in connection with an adjustment relating to a refinancing
pursuant to Section 11.2,  the adjustment shall reflect only the interest rate on such Additional
Lessor Notes. To the extent not inconsistent with the prior sentence, any adjustments pursuant to
this Section 3.4(a) shall be calculated (i) first, to preserve the Owner Participant’s Net Economic
Return through the end of the Network Lease Term; (ii) second, consistent with (i), to minimize the
present value to the Lessee of the Basic Lease Rent; and (iii) third, to be consistent with any
uneven rent safe harbor provided under Section 467 of the Code and the Treasury Regulations
promulgated thereunder, but only to the extent that Basic Lease Rent prior to such adjustment was
so consistent (other than, with respect to the limitation on the criterion established by this
clause (iii), if there shall have occurred a Tax Law Change), thereby not increasing the
possibility, if any, of the Network Lease being determined to be a
“disqualified leaseback or long
term agreement” within the meaning of Section 467 of the Code and the Treasury Regulations
thereunder. Adjustments will be made using the same method of computation originally used in the
calculation of the Basic Lease Rent and the Pricing
Assumptions as set forth on Schedule 3 hereto (other than those that have changed as the result of
the event giving rise to the adjustment). The adjustments contemplated by this Section 3.4(a) will
result in corresponding adjustments to the Termination Values. Any adjustment pursuant to this
Section 3.4(a) shall be made subject to and in compliance with
Sections 3.4(c) and (d) hereof.

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          (b) The Lessee and the Owner Lessor agree that Basic Lease Rent, Termination
Values and the Early Purchase Price shall each be reduced by an amount equal to the product of the
Termination Percentage and each of such amounts, respectively, to reflect a partial termination of
this Network Lease pursuant to Section 14A.

          (c) Anything herein or in any other Operative Document to the contrary
notwithstanding, Basic
Lease Rent payable on any Rent Payment Date, whether or not adjusted in accordance with this
Section 3.4, shall, in the aggregate, be in an amount at least sufficient to pay in full scheduled
principal and interest payments on the Lessor Note on such Rent Payment Date. Anything herein or
in any other Operative Document to the contrary notwithstanding, Termination Values and the Early
Purchase Price under this Network Lease, whether or not adjusted in accordance with this Section
3.4, shall in the aggregate, together with all other Rent due and owing on such date, exclusive of
any portion thereof that is an Excepted Payment, be in an amount at least sufficient to pay in full
the principal of, premium, if any, and accrued interest on the Lessor Note payable on such date
(excluding, however, principal and interest payable on a Lease Indenture Event of Default not
caused by a Lease Event of Default).

          (d) Any adjustment pursuant to this Section 3.4 shall initially be computed by the Owner
Participant, subject to the verification procedure described in this Section 3.4(d). Once computed,
the results of such computation shall promptly be delivered by the Owner Participant to the Lessee.
Within 20 days after the receipt of the results of any such
adjustment, the Lessee may request that
a lease advisory firm or nationally recognized firm of independent public accountants jointly
selected by the Owner Participant and the Lessee (the
“Verifier”) verify, after consultation with
the Owner Participant and the Lessee, the accuracy of such adjustment in accordance with this
Section 3.4. The Owner Participant and the Lessee hereby agree, subject to the execution, by the
Verifier of an appropriate confidentiality agreement, to provide the Verifier with all information
and materials (other than income tax returns and books) as shall be necessary in connection
therewith. If the Verifier confirms that such adjustment is in accordance with this Section 3.4, it
shall so certify to the Lessee, the Owner Lessor and the Owner Participant and such certification
shall be final, binding and conclusive on the Lessee, the Owner Participant and the Owner Lessor.
If the Verifier concludes that such adjustment is not in accordance with this Section 3.4, and the
adjustments to Basic Lease Rent or Termination Value calculated by the Verifier are different from
those calculated by the Owner Participant, then it shall so certify to the Lessee, the Owner Lessor
and the Owner Participant and the Verifier’s calculation shall be final, binding and conclusive on
the Lessee, the Owner Lessor and the Owner Participant. If the Lessee does not request
verification of any adjustment within the period specified above, the computation provided by the
Owner Participant shall be final, binding and conclusive on the Lessee, the Owner Lessor and the
Owner Participant. The final determination of any adjustment hereunder shall be set forth in an
amendment to this Network Lease, executed and delivered by the Owner Lessor and the Lessee and
consented to by the Owner Participant; provided, however, that any omission to execute and deliver
such amendment shall not affect the validity and effectiveness of any such adjustment. The
reasonable fees, costs and expenses of the Verifier in verifying an adjustment pursuant to this
Section 3.4 shall be paid by the Lessee; provided, however, that, in the event that such Verifier
determines that the implicit financing rate of Basic Lease Rent to be made under this Network
Lease as calculated by the Owner Participant is greater than the implicit financing rate of the
correct Basic Lease Rent as certified by the Verifier by more than two basis points, then such
expenses of the Verifier

4

 

shall be paid by the Owner Participant. Notwithstanding anything herein to the contrary, the
sole responsibility of the Verifier shall be to verify the calculations hereunder and matters of
interpretation of this Network Lease or any other Operative Document shall not be within the scope
of the Verifier’s responsibilities.

     Section 3.5 Manner of Payments. All Rent (whether Basic Lease Rent or Supplemental Lease Rent)
shall be paid by the Lessee in lawful currency of the United States of America in immediately
available funds to the recipient not later than 11:00 a.m. (New York City time) on the date due.
All Rent payable to the Owner Lessor (other than Excepted Payments) shall be paid by the Lessee to
the Owner Lessor by payment to the Owner Lessor’s Account, or to such other place as the Owner
Lessor shall notify the Lessee in writing; provided, however, that so long as the Lien of the Lease
Indenture has not been discharged, the Owner Lessor hereby irrevocably directs (it being agreed and
understood that such direction shall be deemed to have been revoked after the Lien of the Lease
Indenture shall have been fully discharged in accordance with its terms), and the Lessee agrees,
that all payments of Rent (other than Excepted Payments) payable to the Owner Lessor shall be paid
by wire transfer directly to the Lease Indenture Trustee’s Account or to such other place as the
Lease Indenture Trustee shall notify the Lessee in writing pursuant to the Lease Indenture.
Payments constituting Excepted Payments shall be made to the Person entitled thereto at the address
for such Person set forth in the Participation Agreement, or to such other place as such Person
shall notify the Lessee in writing.

SECTION 4. DISCLAIMER OF WARRANTIES; RIGHT OF QUIET ENJOYMENT

     Section 4.1 Disclaimer of Warranties.

          (a) Without waiving any claim the Lessee may have against any manufacturer, vendor or contractor,
THE LESSEE ACKNOWLEDGES AND AGREES SOLELY FOR THE BENEFIT OF THE OWNER LESSOR AND THE OWNER
PARTICIPANT THAT (i) THE NETWORK AND EACH COMPONENT THEREOF IS OF A SIZE, DESIGN, CAPACITY AND
MANUFACTURE ACCEPTABLE TO THE LESSEE, (ii) THE LESSEE IS SATISFIED THAT THE NETWORK AND EACH
COMPONENT THEREOF IS SUITABLE FOR THEIR RESPECTIVE PURPOSES, (iii) NONE OF THE OWNER LESSOR, THE
OWNER PARTICIPANT OR THE LEASE INDENTURE TRUSTEE IS A MANUFACTURER OR A DEALER IN PROPERTY OF SUCH
KIND, (iv) THE UNDIVIDED INTEREST IS LEASED HEREUNDER TO THE EXTENT PROVIDED HEREBY FOR THE NETWORK
LEASE TERM SPECIFIED HEREIN SUBJECT TO ALL APPLICABLE LAWS NOW IN EFFECT OR HEREAFTER ADOPTED,
INCLUDING (1) ZONING REGULATIONS, (2) ENVIRONMENTAL LAWS OR (3) BUILDING RESTRICTIONS, AND IN THE
STATE AND CONDITION OF EVERY PART THEREOF WHEN THE SAME FIRST BECAME SUBJECT TO THIS NETWORK LEASE
WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND BY THE OWNER LESSOR, THE OWNER PARTICIPANT OR THE
LEASE INDENTURE TRUSTEE, (v) THE SOFTWARE RIGHTS ARE ASSIGNED HEREUNDER TO THE EXTENT PROVIDED
HEREBY FOR THE NETWORK LEASE TERM SPECIFIED HEREIN SUBJECT TO ALL APPLICABLE LAWS NOW IN EFFECT OR
HEREAFTER ADOPTED, AND (vi) THE OWNER LESSOR LEASES FOR THE NETWORK LEASE TERM SPECIFIED HEREIN AND
THE LESSEE

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TAKES THE UNDIVIDED INTEREST AND THE SOFTWARE RIGHTS UNDER THIS NETWORK LEASE “AS-IS”,
“WHERE-IS” AND “WITH ALL FAULTS”, AND THE LESSEE ACKNOWLEDGES THAT NONE OF THE OWNER LESSOR, THE
OWNER PARTICIPANT OR THE LEASE INDENTURE TRUSTEE MAKES NOR SHALL BE DEEMED TO HAVE MADE, AND EACH
EXPRESSLY DISCLAIMS, ANY AND ALL RIGHTS, CLAIMS, WARRANTIES OR REPRESENTATIONS, EITHER EXPRESS OR
IMPLIED, AS TO THE VALUE, CONDITION, FITNESS FOR ANY PARTICULAR PURPOSE, DESIGN, OPERATION,
MERCHANTABILITY OF THE NETWORK (OR ANY RELATED SOFTWARE) OR AS TO THE TITLE OF THE UNDIVIDED
INTEREST OR THE SOFTWARE RIGHTS, THE QUALITY OF THE MATERIAL OR
WORKMANSHIP OF THE NETWORK (OR ANY
RELATED SOFTWARE) OR CONFORMITY THEREOF TO SPECIFICATIONS, FREEDOM FROM PATENT, COPYRIGHT OR
TRADEMARK INFRINGEMENT, THE ABSENCE OF ANY LATENT OR OTHER DEFECT, WHETHER OR NOT DISCOVERABLE, OR
AS TO THE ABSENCE OF ANY OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER EXPRESS OR
IMPLIED REPRESENTATION OR WARRANTY WHATSOEVER WITH RESPECT THERETO, except that the Owner Lessor
represents and warrants that on the Closing Date, the Undivided Interest and the Software Rights
will be free of Owner Lessor’s Liens. It is agreed that all such risks, as between the Owner
Lessor, the Owner Participant and the Lease Indenture Trustee on the one hand and the Lessee on the
other hand are to be borne by the Lessee with respect to acts, occurrences or omissions prior to or
during the Network Lease Term. None of the Owner Lessor, the Owner Participant or the Lease
Indenture Trustee shall have any responsibility or liability to the Lessee or any other Person with
respect to any of the following: (x) any liability, loss or damage caused or alleged to be caused
directly or indirectly by the Network (or any related software) or any Component or by any
inadequacy thereof or deficiency or defect therein or by any other circumstances in connection
therewith; (y) the use, operation or performance of the Network (or any related software) or any
Component thereof or any risks relating thereto; or (z) the delivery, operation, servicing,
maintenance, repair, improvement, replacement or decommissioning of the Network (or any related
software) or any Component thereof. The provisions of this paragraph (a) of this Section 4.1 have
been negotiated, and, except to the extent otherwise expressly stated, the foregoing provisions are
intended to be a complete exclusion and negation of any representations or warranties of the Owner
Lessor, the Owner Participant or the Lease Indenture Trustee, express or implied, with respect to
the Undivided Interest, the Network (or any related software), the Software Rights, or any
Components thereof that may arise pursuant to any Applicable Law now or hereafter in effect, or
otherwise.

     
(b) During the Network Lease Term, so long as no Lease Event of Default shall have occurred and be
continuing, the Owner Lessor hereby appoints irrevocably and constitutes the Lessee its agent and
attorney-in-fact, coupled with an interest, to assert and enforce, from time to time, in the name
and for the account of the Owner Lessor and the Lessee, as their interests may appear, but in all
cases at the sole cost and expense of the Lessee, whatever claims and rights the Owner Lessor may
have in respect of the Undivided Interest, the Network, the Software Rights, or any Component
thereof, against any manufacturer, vendor or contractor, or under any express or implied warranties
relating to the Undivided Interest, the Network, the Software Rights, or any Component thereof.

6

 

     Section 4.2 Quiet Enjoyment. The Owner Lessor expressly, as to its own actions only,
agrees that, notwithstanding any provision of any other Operative Document, so long as no Lease
Event of Default shall have occurred and be continuing, it shall not interfere with or interrupt
the quiet enjoyment of the use, operation and possession by the Lessee of the Network.

SECTION 5. RETURN OF NETWORK

     Section 5.1 Return. Upon the Expiration Date or early termination of this Network Lease
pursuant to Section 18, the Lessee, at its own expense, shall return the Undivided Interest and
Software Rights (together with an undivided interest equal to the Owner Lessor’s Percentage in all
Modifications to the Network, all rights in software that shall have become subject to the Head
Lease pursuant to Section 10 of the Head Lease and Section 8.3 of this Network Lease, and an
undivided interest equal to the Owner Lessor’s Percentage in all Substituted Components and
Substituted Non-Network Equipment that shall have become subject to the Head Lease and this
Network Lease pursuant to Section 10 of the Head Lease and Section 14A of this Network Lease) to
the Owner Lessor or any permitted transferee or assignee of the Owner Lessor. Promptly following
the Expiration Date or early termination of this Network Lease (or, if later, the last “Expiration
Date” or date of termination of any Other Network Lease), the Lessee shall effect delivery of the
Undivided Interest and Software Rights at its own cost and expense by assembling and preparing the
Network (including any related software) and each Component thereof for shipment to a site or
sites designated by the Owner Lessor in order to permit the efficient reinstallation of the
Network at such site or sites. The Lessee further agrees to pay any and all installation costs
necessary to install the Network (including any related software) at such site or sites in
conformity with Prudent Industry Practice. Unless the Measurement and Analysis System shall no
longer be operating as part of the Network as a consequence of a Partial Termination under Section
14A, or as otherwise agreed between the Owner Participant and the Lessee, the Lessee shall cause
the Network to be returned and installed pursuant to this
Section 5.1 as a single integrated
“system” which shall include the presence of an automated data-communication, link established
between the Energy Management, Protection and Billing System and the Measurement and Analysis
System, which link will allow for the automatic exchange and retrieval of data between the two
systems. In addition, the Lessee shall execute and deliver to the Owner Lessor or such transferee
or assignee an instrument or instruments in form and substance reasonably acceptable to the Owner
Lessor evidencing surrender by the Lessee of the Lessee’s right to the Undivided Interest and
Software Rights under this Network Lease and to the possession thereof. In connection with such
return, the Lessee shall (a) assign, to the extent permitted by Applicable Law, an undivided
interest equal to the Owner Lessor’s Percentage in, and shall cooperate with all reasonable
requests of the Owner Participant, the Owner Lessor or a permitted transferee or assignee of
either of such parties For purposes of obtaining, or enabling the Owner Participant, the Owner
Lessor or such transferees or assignees to obtain, any and all licenses, permits, approvals and
consents of any Governmental Entities that are or will be required to be obtained by the Owner
Participant, the Owner Lessor or such transferee or assignee in
connection with the use, operation
or maintenance of the Network on or after such return in compliance with Applicable Law; and (b)
provide the Owner Lessor or a permitted transferee or assignee of the Owner Lessor, subject to any
equipment manufacturer-imposed conditions of confidentiality, originals or copies of all
documents, instruments, plans, maps, specifications, manuals, drawings and other documentary
materials relating to the installation, maintenance, operation, construction, design, modification
and repair of the

7

 

Network (including any related software) or any portion thereof, as shall be in the Lessee’s
possession and shall be reasonably appropriate or necessary for the ownership, possession,
operation or maintenance of the Network (including any related software).

     Section 5.2
Condition Upon Return. At the time of a return of the Undivided Interest and the
Software Rights by the Lessee to the Owner Lessor or any permitted transferee or assignee of the
Owner Lessor pursuant to Section 5.1, the following conditions shall be complied with, all at the
Lessee’s sole cost and expense:

          (a) the Network and any related software (including all Modifications and Substituted
Components (and any related software), and all Substituted Non-Network Equipment (and any related
software)) will be in at least as good condition as if it had been maintained, repaired and
operated during the Network Lease Term in compliance with the provisions of this Network Lease,
ordinary wear and tear and degradation excepted, and there shall be no deferred maintenance in
respect of the Network (or any related software);

          (b) the Undivided Interest and the Software Rights shall be free and clear of all Liens other
than Permitted Post Network Lease Term Liens;

          (c) if the Network (including any related software) has been reconfigured or upgraded after
the Closing Date in compliance with this Network Lease, the Network (including any related
software) shall be returned in its reconfigured or upgraded form;

          (d) the Network shall have at least the capability and functional ability to perform as an
integrated system substantially all of the Network Functions (normal wear and tear and
degradation excepted);

          (e) no Component shall be a temporary Component and any Replacement Component shall comply
with Prudent Industry Practice; and

          (f) rights in respect of any software necessary for the efficient operation of the Network at
the standard required by the other provisions of this Section 5.2 will, to the extent requiring the
consent of any vendor or other Person, be subject to a consent of such vendor or other Person in a
form substantially similar to the Software License Consents or in a form reasonably acceptable to
the Owner Lessor.

SECTION 6. LIENS

     The Lessee will not directly or indirectly create, incur, assume or suffer to exist any Lien
on or with respect to the Network, the Undivided Interest, the Software Rights or any interest
therein or in, to or on its interest in this Network Lease or its interest in any other Operative
Document, except Permitted Liens, and the Lessee shall promptly notify the Owner Lessor of the
imposition of any such Lien of which the Lessee is aware and shall promptly, at its own expense,
take such action as may be necessary to fully discharge or release any such Lien.

8

 

SECTION 7. MAINTENANCE; REPLACEMENTS OF COMPONENTS

     Section 7.1 Maintenance. The Lessee, at its own cost and expense, will (a) cause the Network
(including any related software) to be maintained in good condition, repair and working order,
ordinary wear and tear and degradation excepted, and will operate the Network (including any
related software) in compliance with all Applicable Laws of any Governmental Entity having
jurisdiction, and (b) cause to be made all necessary repairs, renewals and replacements thereof,
(i) as may be necessary so that the business carried on in connection with the Network may be
properly and advantageously conducted at all times, (ii) in accordance with Prudent Industry
Practice, (iii) as may be necessary to preserve the functional capability of the Network
(including any related software) to perform as an integrated “system” the Network Functions, and
(iv) as may be necessary to cause the Network to be operated in a manner which does not
discriminate against the Network when compared to any other similar equipment owned or leased by
the Lessee.

     Section 7.2 Replacement and Removal of Components. In the ordinary course of maintenance,
service, repair or testing, the Lessee, at its own cost and expense, may remove or cause or permit
to be removed from the Network any Component (including any related software); provided, however,
that the Lessee shall (a) cause such Component to be replaced by a replacement Component which
shall be free and clear of all Liens (except Permitted Liens) and in as good operating condition as
the Component replaced, assuming that the Component replaced, was maintained in accordance with
this Network Lease (each such replacement Component being herein referred to as a “Replacement
Component”) and (b) cause such replacement to be performed in a manner which does not diminish
the current or residual value of the Network (taking into account any related software) or the
remaining useful life or utility of the Network (taking into account any related software) by more
than a de minimis amount or cause the Network or any related software to become “limited-use”
property within the meaning of Rev. Proc. 2001-28, 2001-19 I.R.B. 1156 and 2001-29, 2001-19 I.R.B.
1160, such current value, residual value, utility and remaining useful life of any Replacement
Component shall be determined based on appropriate factors relating to the current value, residual
value, utility and remaining useful life of the Network as a whole both immediately prior to and
subsequent to such replacement (i.e., the contribution of such Replacement Component to the
Network’s function and capacity) rather than the specific current value, residual value, utility or
remaining useful life of the Replacement Component and replaced Component itself. If any Component
subject to the Head Lease and this Network Lease is at any time removed from the Network, such
Component shall remain subject to the Head Lease and this Network Lease, wherever located, until
such time as such Component shall be replaced by a Replacement Component, which has been
incorporated in the Network and which meets the requirements for Replacement Components specified
above. Immediately upon any Replacement Component becoming incorporated in the Network, without
further act (and at no cost to the Owner Lessor and with no adjustment to Head Lease Rent, Basic
Lease Rent or Termination Value), (i) the removed or replaced Component shall no longer be subject
to the Head Lease and this Network Lease, (ii) title to the removed Component shall remain vested
in the Lessee or vest in such other Person as shall be designated by the Lessee, free and clear of
all rights of the Owner Lessor and the Lease Indenture Trustee, (iii) title to the Replacement
Component shall thereupon vest with the Lessee and an undivided interest equal to the applicable
Owner Lessor’s Percentage in such Replacement Component shall (x) become subject to the Head Lease,
this Network Lease and

9

 

the Lien of the Lease Indenture, and (y) be deemed a part of the Undivided Interest for all
purposes of this Network Lease. Throughout the Network Lease Term the Lessee shall be permitted to
temporarily replace Components or portions of the Network with Components in order to keep the
Network in commercial operation or to return it to commercial operation provided that any such
Components shall he removed or replaced with proper Components as soon as commercially practicable.
Notwithstanding anything in this Section 7.2 or elsewhere in this Network Lease to the contrary, if
the Lessee has determined that a Component (including related software) is surplus or obsolete, it
shall have the right to remove such Component without replacing it: provided, that no such
Component may be so removed without being replaced if such removal would diminish the current or
residual value of the Network (taking into account any related software) or the remaining useful
life or utility of the Network (taking into account any related software) by more than a de minimis
amount or cause the Network (taking into account any related software) to become “limited use”
property within the meaning of Rev. Proc. 2001-28, 2001-19 I.R.B. 1156 and 2001-29, 2001-19 I.R.B.
1160. The Lessee shall keep records of any maintenance, servicing, repairing or testing performed
on the Network (and any related software) in the ordinary course of business in accordance with
its then current practice.

SECTION 8. MODIFICATIONS

     Section 8.1 Required Modifications. The Lessee, at its own cost and expense, shall make or
cause or permit to be made all Modifications to the Network (including any related software) as
are required by Applicable Law or any Governmental Entity having jurisdiction (each, a
“Required Modification”); provided, however, that the Lessee may, in good faith and by
appropriate proceedings, diligently contest the validity or application of any Applicable Law in
any reasonable manner which does not involve any danger of (a) foreclosure, sale, forfeiture or
loss of, or imposition of a material Lien on any part of the Network, (including any related
software) or any impairment of the use, operation or maintenance of the Network (including any
related software) in any material respect, or (b) any criminal or material civil liability being
incurred by the Owner Participant, the Owner Lessor or the Lease Indenture Trustee.

     Section 8.2 Optional Modifications. The Lessee at any time may, at its own cost and expense,
make or cause or permit to be made any Modification to the Network as the Lessee considers
desirable in the proper conduct of its business (any such non-Required Modification being referred
to as an “Optional Modification”); provided, that no Optional Modification shall be made
to the Network that would (a) change the functional nature of the Network, (b) diminish by more
than a de minimis amount the current or residual value of the Network (taking into account any
related software) or the remaining useful life or utility of the Network (taking into account any
related software), (c) cause the Network (taking into account any related software) to become
“limited use” property, within the meaning of Rev. Proc. 2001-28, 2001-19 I.R.B. 1156 and 2001-29,
2001-19 I.R.B. 1160 or (d) alter the Network such that it would not be commercially feasible for
the Lessee or its designee to return the Network as a whole in
accordance with Section 5.

     Section 8.3
Title to Modifications. Title to all Modifications shall immediately vest in the
Head Lessor. An undivided interest equal to the applicable Owner Lessor’s Percentage in all
Modifications shall (at no cost to the Owner Lessor and with no adjustment to Head Lease Rent

10

 

or Basic Lease Rent, Termination Value, either Early Purchase Price or Purchase Option
Price) immediately (i) become subject to the Head Lease and this Network Lease and, so long as the
Lien of the Lease Indenture shall not have been terminated or discharged, the Lien of the Lease
Indenture, and (ii) be deemed part of the Network and Undivided Interest for all purposes of the
Head Lease and this Network Lease. The Lessee, at its own cost and expense, shall take such steps
as either the Owner Lessor or, so long as the Lien of the Lease Indenture shall not have been
terminated or discharged, the Lease Indenture Trustee may reasonably require from time to time to
confirm that such undivided interest in all Modifications are subject to the Head Lease and this
Network Lease and, so long as the Lien of the Lease Indenture shall not have been terminated or
discharged, that the Owner Lessor’s leasehold interest in such Modifications is subject to the
Lien of the Lease Indenture.

     Section 8.4 Report of Modifications. Within 120 days after the end of each fiscal year, the
Lessee shall furnish to the Owner Lessor and, so long as the Lien of the Lease Indenture shall not
have been terminated or discharged, the Lease Indenture Trustee, a
report stating the total cost
of all Modifications made during such fiscal year and describing separately and in reasonable
detail each such Modification that cost in excess of $20,000,000.

SECTION 9. NET LEASE

     This Network Lease is a “net lease” and the Lessee’s obligation to pay all Basic Lease Rent
payable hereunder, as well as any Termination Value (or amount computed by reference thereto) in
lieu of Basic Lease Rent following termination of this Network Lease, shall be absolute and
unconditional under any and all circumstances and shall not be terminated, extinguished,
diminished, lost or otherwise impaired by any circumstance of any character, including by (i) any
setoff, counterclaim, recoupment, defense or other right which the Lessee may have against the
Owner Lessor, the Owner Participant, the Lease Indenture Trustee or any other Person, including
any claim as a result of any breach by any of said parties of any covenant or provision in this
Network Lease or any other Operative Document, (ii) any lack, or invalidity of title or other
interest or any defect in the title or other interest, condition, design, operation,
merchantability or fitness for use of the Network or any Component or any portion thereof, or any
eviction by paramount title or otherwise, or any unavailability of the Network, any Component or
any portion thereof, (iii) any loss or destruction of, or damage to, the Network or any Component
or any portion thereof or interruption or cessation in the use or possession thereof or any part
thereof by the Lessee for any reason whatsoever and of whatever duration, (iv) the condemnation,
requisitioning, expropriation, seizure or other taking of title to or use of the Network or any
Component or any portion thereof by any Governmental Entity or TVA or otherwise, (v) the
invalidity or unenforceability or lack of due authorization or other infirmity of this Network
Lease or any other Operative Document, (vi) the lack of right, power or authority of the Owner
Lessor to enter into this Network Lease or any other Operative Document, (vii) any ineligibility
of the Network or any Component or any portion thereof for any particular use, whether or not due
to any failure of the Lessee to comply with any Applicable Law, (viii) any event of “force
majeure” or any frustration, (ix) any legal requirement similar or dissimilar to the foregoing,
any present or future law to the contrary notwithstanding, (x) any insolvency, bankruptcy,
reorganization or similar proceeding by or against the Lessee or any other Person, (xi) any Lien
of any Person with respect to the Network or any Component or any
portion thereof, or (xii) any
other cause, whether similar or dissimilar to the foregoing, any present or

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future law notwithstanding, except as expressly set forth herein or in any other Operative
Document, it being the intention of the parties hereto that all Basic Lease Rent (and all amounts,
including Termination Value (or amounts computed by reference thereto), in lieu of Basic Lease Rent
following termination of this Network Lease in whole or in part) payable by the Lessee hereunder
shall continue to be payable in all events in the manner and at times provided for herein. All
Rent, including Basic Lease Rent (and all amounts, including Termination Value (or amounts computed
by reference thereto), in lieu of Basic Lease Rent following termination of this Network Lease in
whole or in part) shall not be subject to any abatement and the payments thereof shall not be
subject to any setoff or reduction for any reason whatsoever,
including any present or future
claims of the Lessee or any other Person against the Owner Lessor or any other Person under this
Network Lease or otherwise. To the extent permitted by Applicable Law, the Lessee hereby waives any
and all rights which it may now have or which at any time hereafter may be conferred upon it, by
statute or otherwise, to terminate, cancel, quit or surrender this Network Lease except in
accordance with Sections 10, 13, 14, 14A, 15 or 16. If for any reason whatsoever this Network Lease
shall be terminated in whole or in part by operation of law or otherwise, except as specifically
provided herein, the Lessee nonetheless agrees, to the extent permitted by Applicable Law, to pay
to the Owner Lessor an amount equal to each installment of Basic Lease Rent and all Supplemental
Lease Rent due and owing, at the time such payment would have become due and payable in accordance
with the terms hereof had this Network Lease not been so terminated. Nothing contained herein shall
be construed to waive any claim which the Lessee might have under any of the Operative Documents or
otherwise or to limit the right of the Lessee separately to make any claim it might have against
the Owner Lessor or any other Person or to separately pursue such claim in such manner as the
Lessee shall deem appropriate.

SECTION 10. EVENTS OF LOSS

     Section 10.1 Occurrence of Events of Loss. The Owner Lessor and the Owner Participant will
promptly notify the Lessee and, so long as the Lien of the Lease Indenture shall not have been
terminated or discharged, the Lease Indenture Trustee and the Pass Through Trustee of any event of
which it is aware that upon election by the Owner Participant or Owner Lessor would result in a
Regulatory Event of Loss. The Lessee will promptly notify the Owner Lessor, the Owner Participant
and, so long as the Lien of the Lease Indenture shall not have been terminated or discharged, the
Lease Indenture Trustee and the Pass Through Trustee of any damage to or other event with respect
to, the Network that the Lessee reasonably anticipates will cause an Event of Loss described in
clause (a) or (b) of the definition of Event of Loss or that causes damage to the Network in
excess of $20 million. If an Event of Loss described in clause (a) or (b) of the definition of
Event of Loss shall occur, then no later than six months following such occurrence, the Lessee
shall notify the Owner Lessor, the Owner Participant and, so long as the Lien of the Lease
Indenture shall not have been terminated or discharged, the Lease Indenture Trustee and the Pass
Through Trustee, in writing of its election to either (a) if no Significant Lease Default or Lease
Event of Default (other than Lease Events of Default arising as a result of such Event of Loss)
has occurred and is continuing and subject to the satisfaction of the conditions set forth in
Section 10.3(a) and (b), repair or replace the Network so that the Network shall have a current
and residual value, remaining useful life and utility at least equal to that of the Network prior
to such Event of Loss, assuming the Network was in the condition and repair required to be
maintained by this Network Lease or (b) terminate this Network Lease

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pursuant to Section 10.2 hereof. The Lessee may elect the option provided in clause (b) of the
preceding sentence regardless of whether the Network is to be repaired or replaced. If the Lessee
fails to make an election as provided above, an Event of Loss shall be deemed to occur with respect
to the Network as of the end of the six month period referred to in the third sentence of this
Section 10.1 and the Lessee will be deemed to have made the election to terminate this Network
Lease pursuant to Section 10.2.

     Section 10.2 Payment of Termination Value; Termination of Basic Lease Rent.

          (a) If (i) an Event of Loss described in clause (a) or (b) of the definition of Event of Loss
shall have occurred with respect to the Network and the Lessee shall elect not to repair or replace
the Network pursuant to Section 10.1 (a) hereof, or (ii) an Event of Loss shall be deemed to occur
pursuant to the last sentence of Section 10.1, or (iii) a Regulatory Event of Loss shall have
occurred, then, on a Termination Date occurring no later than 90 days following the Lessee’s notice
of its election referred to in the third sentence of Section 10.1 or the occurrence of a deemed
Event of Loss pursuant to the last sentence of Section 10.1 or the occurrence of a Regulatory Event
of Loss, as the case may be, the Lessee shall terminate the Network Lease and, subject to Section
10.2(d), pay to the Owner Lessor the sum of (A) Termination Value determined as of the Termination
Date on which payment is made, (B) all amounts of Supplemental Lease Rent (including all
documented, out-of-pocket costs and expenses of the Owner Lessor, the Owner Participant, the Lease
Indenture Trustee and the Pass Through Trustee, and all sales, use, value added and other Taxes
required to be indemnified by the Lessee pursuant to Section 9.2 of the Participation Agreement
associated with the exercise of the termination option pursuant to this Section 10.2) due and
payable on or prior to such Termination Date, (C) any unpaid Basic Lease Rent due before such
Termination Date and (D) in the case of a Regulatory Event of Loss, the Make Whole Premium on the
Lessor Note, if any. Ail payments of Rent under this Section 10.2(a) shall, to the extent required
by Section 3.5, be made to the Lease Indenture Trustee.

          (b) Concurrently with (but not as a condition to) the payment of all sums required to be paid
pursuant to this Section 10.2, (i) Basic Lease Rent shall cease to accrue, (ii) the Lessee shall
cease to have any liability to the Owner Lessor with respect to the Undivided Interest or the
Software Rights except for Supplemental Lease Rent and other obligations (including those under
Sections 9.1 and 9.2 of the Participation Agreement) surviving pursuant to the express provisions
of any Operative Document, (iii) unless the Lessee assumes the Lessor Notes pursuant to Section
10.2(d), the Owner Lessor shall pay the outstanding principal and accrued interest on the Lessor
Note pursuant to Section 2.10(a) of the Lease Indenture, (iv) this Network Lease and the Head Lease
shall terminate, (v) the Owner Lessor shall, at the Lessee’s cost and expense, execute and deliver
to the Lessee a release or termination of this Network Lease, (vi) the Owner Lessor shall transfer
(by an appropriate instrument of transfer in form and substance reasonably satisfactory to the
Owner Lessor and prepared by and at the expense of the Lessee) all of its right, title and interest
in and to the Owner Lessor’s Interest to the Lessee pursuant to this Section 10.2 and Section 6.2
of the Head Lease on an “as is,” “where is” and “with all faults’” basis, without representations
or warranties other than a warranty as to the absence of Owner Lessor’s Liens and a warranty of the
Owner Participant as to the absence of Owner Participant’s Liens; and (vii) the Owner Lessor shall
discharge the Lien of the Lease Indenture and execute and deliver appropriate releases and other
documents or instruments

13

 

necessary or desirable to effect the foregoing, all to be prepared and filed (as appropriate)
by and at the cost and expense of the Lessee.

          (c) Any payments with respect to the Undivided Interest or the Software Rights received at any
time by the Owner Lessor, the Lease Indenture Trustee or the Lessee from any Governmental Entity as
a result of the occurrence of an Event of Loss described in clause (b) of the definition of Event
of Loss shall be applied as follows:

     (i) all such payments received at any time by the Lessee shall be promptly paid
to the Owner Lessor or, if the Lien of the Lease Indenture shall not have been
terminated or discharged, to the Lease Indenture Trustee, for application pursuant
to the following provisions of this Section 10.2, except that so long as no
Significant Lease Default or Lease Event of Default shall have occurred and be
continuing (other than Lease Events of Default arising as a result of such Event of
Loss), the Lessee may retain any amounts that the Owner Lessor would at the time be
obligated to pay to the Lessee as reimbursement under the provisions of paragraph
(ii) below;

     (ii) so much of such payments as shall not exceed the amount required to be
paid by the Lessee pursuant to paragraph (a) of this Section 10.2 shall be applied
in reduction of the Lessee’s obligation to pay such amount if not already paid by
the Lessee or, if already paid by the Lessee, shall, so long as no Significant Lease
Default or Lease Event of Default (other than Lease Events of Default arising as a
result of such Event of Loss) shall have occurred, and be continuing, be applied to
reimburse the Lessee for its payment of such amount; and

     (iii) the balance, if any, of such payments remaining thereafter shall be paid
to the Owner Lessor.

          (d) Notwithstanding the foregoing provisions of paragraph (a) of this Section
10.2, in the case of a Regulatory Event of Loss, so long as no Lease Event of Default shall have
occurred and is continuing, the Lessee may, at its option, elect to assume in full, the Lessor Note
and if (i) the Lessee shall have executed and delivered an assumption agreement to assume in full
the Lessor Note as permitted by and in accordance with Section 2.10(c) of the Lease Indenture,
(ii) all other conditions contained in such Section 2.10(c) shall have been satisfied, and (iii) no
Significant Lease Default or Lease Event of Default shall have occurred or be continuing after
giving effect to such assumption, then, the obligation of the Lessee to pay Termination Value shall
be reduced by the outstanding principal amount and accrued interest of the Lessor Note so assumed
by the Lessee.

     Section 10.3 Repair or Replace. The Lessee’s right to repair or replace the Network pursuant
to Section 10.1 shall be subject to the fulfillment, at the Lessee’s sole cost and expense, in
addition to the conditions contained in said clause (a), of the following conditions:

          (a) the Lessee shall, on the date it gives notice pursuant to Section 10.1 of its
election to repair or replace the Network (i) deliver to the Owner Participant either (x) an
opinion

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of tax counsel to the Owner Participant to the effect that such proposed repair or
replacement will not result in any incremental adverse tax consequences to the Owner Participant or
the Owner Lessor, or (y) an indemnity against all adverse tax risks as a result of such proposed
repair or replacement, such indemnity to be in form and substance satisfactory to the Owner
Participant, (ii) deliver to the Owner Participant and, so long as the Lien of the Lease Indenture
shall not have been terminated or discharged, the Lease Indenture Trustee (A) a report of an
Independent Engineer, in form and substance reasonably acceptable to the Owner Participant, to the
effect that the repair or replacement of the Network is technologically feasible and economically
viable and that it is reasonable to expect that such repair or replacement can be completed by a
date at least 6 months prior to the end of the Network Lease Term, and (B) a report, in form and
substance reasonably acceptable to the Owner Participant, of the QTE Consultant or other party
(selected by the Owner Participant and reasonably acceptable to the Lessee) experienced in the
analysis of property eligible for treatment as “qualified technological equipment” under
§168(i)(2) of the Code that the Network (and its major Components), after repair or replacement,
will constitute “qualified technological equipment” under §168(i)(2) of the Code or “computer
software” under §167(f)(l)(B) of the Code, provided, however, such report shall be required only if
Owner Lessor’s Percentage of the Network Cost has not been fully recovered for federal income tax
purposes at the time that the repair or replacement is being made;

          (b) the Lessee shall cause the repair or replacement of the Network to commence as soon as
reasonably practicable after notifying the Owner Lessor and, so long as the Lien of the Lease
Indenture shall not have been terminated or discharged, the Lease Indenture Trustee and the Pass
Through Trustee pursuant to Section 10.1, of its election to repair or replace the Network, and in
all events within 12 months of the occurrence of the event that caused such Event of Loss, and
will cause work on such repair or replacement to proceed diligently thereafter. As the repair or
replacement of the Network progresses, title to the repaired or replacement equipment shall vest
in the Lessee and an undivided interest equal to the Owner Lessor’s Percentage in the repaired or
replacement equipment (and associated software) shall become subject to the Head Lease and this
Network Lease and, so long as the Lien of the Lease Indenture shall not have been terminated or
discharged, the Lien of the Lease Indenture, and be deemed a part of the Network for all purposes
of the Head Lease and this Network Lease, automatically without any further act by any Person; and

          (c) within 30 days of the date of the completion of such repair or replacement (the
“Rebuilding Closing Date”) the following documents shall be duly authorized, executed and
delivered by the respective party or parties thereto and shall be in full force and effect, and
an executed counterpart of each thereto shall be delivered to the Owner Lessor, the Owner
Participant and, so long as the Lien of the Lease Indenture shall not have been terminated or
discharged, the Lease Indenture Trustee: (i) supplements to the Head Lease and this Network Lease
subjecting an undivided interest equal to the Owner Lessor’s Percentage in the repaired or
replacement equipment and associated software to the Head Lease and this Network Lease (with no
change in Head Lease Rent or Basic Lease Rent as a result of such repair or replacement), (ii) so
long as the Lien of the Lease Indenture shall not have been terminated or discharged, supplements
to the Lease Indenture subjecting an undivided interest equal to the Owner Lessor’s Percentage in
the repaired or replacement equipment (and associated software) to the Lien of the Lease
Indenture, (iii) such UCC filings as may be reasonably requested by the Owner Participant

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and the Lease Indenture Trustee to be filed, (iv) an opinion of counsel of the Lessee, such
counsel and such opinion to be reasonably satisfactory to the Owner Participant and, so long as
the Lien of the Lease Indenture shall not have been terminated or discharged, the Lease Indenture
Trustee to the effect that (A) the supplements to the Head Lease and this Network Lease required
by clause (i) above constitute effective instruments for subjecting an undivided interest equal to
the Owner Lessor’s Percentage in the repaired or replacement equipment (and associated software) to
the Head Lease and this Network Lease, (B) the supplements to the Lease Indenture required by
clause (ii) above, if any, constitute effective instruments for subjecting an undivided interest
equal to the Owner Lessor’s Percentage in the rebuilt or replacement equipment (and associated
software) to the Lien of the Lease Indenture, and (C) all filings and other action necessary to
perfect and protect the Owner Lessor’s and, if applicable, the Lease Indenture Trustee’s interest
in an undivided interest equal to the Owner Lessor’s Percentage in the repaired or replacement
equipment (and associated software) have been accomplished, (v) a report, in form and substance
reasonably acceptable to the Owner Participant, by an Independent Engineer certifying that the
repaired or replacement equipment (and associated software) are in a state of repair and condition
required by this Network Lease and that the Network, as repaired or replaced, is capable of
performing the Network Functions, (vi) an appraisal, in form and substance reasonably acceptable to
the Owner Participant, by an Independent Appraiser reasonably acceptable to the Owner Participant,
certifying that the Undivided Interest and the Network (and associated software and software
rights) have a current and residual value and the Network and any related software has a remaining
useful life and utility at least equal to the current and residual value of the Undivided Interest
and the remaining useful life and utility of the Network immediately prior to the Event of Loss and
(vii) an Officer’s Certificate of the Lessee as to compliance with this Section 10.3 and that no
Lease Event of Default shall have occurred and be continuing as a result of the repair or
replacement.

Whether or not the transactions contemplated by this Section 10.3 are consummated, the Lessee
agrees to pay or reimburse, on an After-Tax Basis, any costs or expenses (including reasonable
legal fees and expenses) incurred by the Owner Lessor, the Owner Participant, the Lease Indenture
Trustee and the Pass Through Trustee in connection with the transactions contemplated by this
Section 10.3.

     Section 10.4 Application of Payments Not Relating to an Event of Loss.

     In the event that during the Network Lease Term the use of all or any portion of the Network
is requisitioned or taken by or pursuant to a request of any Governmental Entity under the power
of eminent domain or otherwise for a period which does not constitute an Event of Loss, the
Lessee’s obligation to pay all installments of Basic Lease Rent shall continue for the duration of
such requisitioning or taking. The Lessee shall be entitled to receive and retain for its own
account all sums payable for any such period by such Governmental Entity as compensation for such
requisition or taking of possession; provided, however, that if at the time of such payment a
Lease Event of Default shall have occurred and be continuing, all such sums shall be paid to and
held by the Owner Lessor or, so long as the Lien of the Lease Indenture shall not have been
terminated or discharged, the Lease Indenture Trustee as security for the obligations of the
Lessee under this Network Lease, and upon the earlier of (i) so long as no Lease Event of Default
shall be continuing under Section 17(a) or (b) hereof, 180 days after the Owner Lessor (or the
Lease Indenture Trustee) shall have received such amount, provided the Owner Lessor (or

16

 

the Lease Indenture Trustee) has not proceeded to exercise any remedy under Section 17
hereof and it is not stayed or prevented by law or otherwise from exercising such remedy and (ii)
such time as there shall not be continuing any Lease Event of Default, such amount shall be paid to
the Lessee.

SECTION 11. INSURANCE

     Section 11.1 Insurance by Owner Lessor. At any time, the Owner Lessor (either directly or in
the name of the Owner Participant), the Owner Participant or the Lease Indenture Trustee may at
its own expense and for its own account carry insurance with respect to its interest in the
Network. Any insurance payments received from policies maintained by the Owner Lessor, the Owner
Participant or the Lease Indenture Trustee pursuant to the previous sentence shall be retained by
the Owner Lessor, the Owner Participant or the Lease Indenture Trustee, as the case may be.

     Section 11.2 Insurance by the lessee. If and for so long as the unenhanced debt of the Lessee
issued under the Bond Resolution is rated BBB+ or lower by S&P and Baal or lower by Moody’s, the
Lessee shall maintain (or cause to be maintained) property and commercial general liability
insurance with respect to the Network customarily carried by other operators of similar equipment
and against such loss, damage or liability and with such deductibles as are customarily insured
against and which is reasonably acceptable to the Owner Participant. The property insurance
maintained pursuant to this Section 11.2 shall, so long as the Lien of the Lease Indenture shall
not have been terminated or discharged, name the Lease Indenture Trustee (and thereafter, the
Owner Lessor) as loss payee with respect to any claim in excess of $50 million and such amounts
shall be paid to the Lessee as and when needed to pay or reimburse the Lessee for any construction
costs to repair the damage to which such claim relates, with the balance, if any paid to the
Lessee upon completion of such repairs, or applied at the direction of the Lessee to pay
Termination Value or any other amounts payable by the Lessee under Section 10. During the period
the Lessee is required to maintain insurance under this Section 11.2, the Lessee shall no less
frequently than annually provide the Owner Lessor, the Owner Participant and, so long as the Lien
of the Lease Indenture shall not have been terminated or discharged, the Lease Indenture Trustee,
a description of the insurance it is maintaining pursuant to this Section 11.2 and evidence which
may, at the Lessee’s option, be in the form of an Officer’s Certificate, that all premiums in
respect of such policies are current and that such insurance is in effect.

SECTION 12. INSPECTION

     During the Network Lease Term, each of the Owner Participant, the Owner Lessor, and, so long
as the Lien of the Lease Indenture shall not have been terminated or discharged, the Lease
Indenture Trustee and the Pass Through Trustee and their representatives may, during normal
business hours, on reasonable notice to the Lessee and at their own risk and expense (except, at
the expense but not risk, of the Lessee when a Significant Lease Default or a Lease Event of
Default has occurred and is continuing), inspect the Network and the records with respect to the
operations and maintenance thereof in the Lessee’s custody; provided, however, that so long as no
Significant Lease Default or Lease Event of Default shall have occurred and be continuing, each
such Person shall only be entitled to make one inspection in any twelve-month period; provided,
further, that the preceding proviso shall not apply with respect to any such

17

 

inspection made (a) in connection with the occurrence of (i) failure or malfunction or any
equipment resulting in serious injury or death, (ii) a significant curtailment of operations due to
a final, nonappealable order of a Governmental Entity having jurisdiction over safety, or (iii)
cessation of operations of the Network for more than 30 days or (b) after the Early Purchase Date
unless the Lessee has exercised its option to purchase the Owner Lessor’s Interest under Section
16. For the purpose of such inspections the Owner Participant, the Owner Lessor and, so long as the
Lien of the Lease Indenture shall not have been terminated or discharged, the Lease Indenture
Trustee and the Pass Through Trustee, and their representatives, may request that the Lessee
demonstrate that the Network is performing the Network Functions. The Lessee may restrict the
quantity and scope of data made available to the inspecting party for purposes of such
demonstration, provided, that any such restriction shall not make the demonstration
unrepresentative of the performance and functionality of the Network. The Owner Participant, the
Owner Lessor, the Lease Indenture Trustee and the Pass Through Trustee, and their representatives,
may not inspect data collected and disseminated by the Network relating to the operation and
performance of the Transmission Plant and the associated billing arrangements, in the Lessee’s
custody, other than data relating to a demonstration by the Lessee of any of the Network Functions.
Any such inspection will not unreasonably interfere with the operation or maintenance of the
Network or the conduct by the Lessee of its business and will be in accordance with the Lessee’s
safety and security precautions and confidentiality undertakings, as applicable. In no event shall
the Owner Lessor, the Owner Participant, the Lease Indenture Trustee or the Pass Through Trustee
have any duty or obligation to make any such inspection and such Persons shall not incur any
liability or obligation by reason of not making any such inspection.

SECTION
13. TERMINATION OPTION FOR BURDENSOME EVENTS

     Section 13.1 Election to Terminate. On or after the occurrence of either of the events
specified below and so long as no Significant Lease Default or Lease Event of Default shall have
occurred and be continuing, the Lessee shall have the right, at its option, upon at least 30 days’
prior written notice to the Owner Lessor, the Owner Participant, and, so long as the Lien of the
Lease Indenture shall not have been terminated or discharged, the Lease Indenture Trustee, to
terminate this Network Lease in whole on the Termination Date specified in such notice (which
shall be a date occurring not more than 90 days after the date of such notice) if:

          (a) as
a result of a change in Applicable Law or an interpretation of Applicable Law, it
shall have become illegal for the Lessee to continue this Network Lease or the Head Lease or for
the Lessee to make payments under this Network Lease or the other Operative Documents, and the
transactions contemplated by the Operative Documents cannot be restructured to comply with such
change in law or interpretation of law in a manner acceptable to the Lessee, the Owner Participant,
the Owner Lessor, and, so long as the Lien of the Lease Indenture shall not have been terminated or
discharged, the Lease Indenture Trustee; or

          (b) one or more events outside the control of the Lessee or any Affiliate shall have occurred
and not the result of an intentional act of the Lessee or any of its Affiliates intended to trigger
the right to exercise the purchase option hereunder which will, or can reasonably be expected to,
give rise to an obligation by the Lessee to pay or indemnify in respect of the Tax Indemnity
Agreement or Section 9.1 or 9.2 of the Participation Agreement;
provided,

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however, that (i) such indemnity obligation (and the underlying cost or Tax) can be avoided
in whole or in part if this Network Lease is terminated and the Owner Lessor sells the
Owner Lessor’s Interest to the Lessee and (ii) the amount of such avoided payments hereunder
would exceed (on a present value basis, discounted at the Discount Rate, compounded on an
annual basis to the date of the termination) three (3) percent of the Owner Lessor’s Cost,
and provided, further, that no such termination option shall exist if the applicable
indemnitee shall waive its right to, or the Owner Participant shall arrange for payment of
(without reimbursement by the Lessee or any Affiliate thereof), amounts of indemnification
payments under the Tax Indemnity Agreement or Section 9.1 or 9.2 of the Participation
Agreement in excess of such amount as to cause such avoided payments, computed in accordance
with the preceding proviso, not to exceed three (3) percent of the Owner Lessor’s Cost.

No termination of this Network Lease pursuant to this Section 13.1 shall become effective
unless the conditions set forth in Section 13.3 are satisfied. If the Lessee does not give
notice of its exercise of the termination option under this Section 13.1 within twelve
months of the date the Lessee receives notice or Actual Knowledge of an event or condition
described above, the Lessee will lose its right to terminate this Network Lease pursuant to
this Section 13.1 as a result of such event or condition.

     Section 13.2 Payments Upon Termination. If the Lessee shall have exercised its
option under Section 13.1, the Lessee shall purchase the Owner Lessor’s Interest on the
Termination Date set forth in the termination notice for cash in an amount equal to the
Termination Value for such Termination Date, on an “as is,” “where is” and “with all faults”
basis without any representation, other than by the Owner Lessor that the Owner Lessor’s
Interest is free of Owner Lessor’s Liens and a warranty of the Owner Participant as to the
absence of Owner Participant’s Liens.

     Section 13.3 Procedure for Exercise of Termination Option. If the Lessee shall
have exercised its option to terminate the Network Lease under Section 13.1, on the
Termination Date specified in the Lessee’s notice of such exercise, the Lessee shall also
pay to the Owner Lessor (a) all amounts of Supplemental Lease Rent (excluding Termination
Value but including all reasonable out-of-pocket costs and expenses of the Owner Lessor, the
Owner Participant, the Lease Indenture Trustee and the Pass Through Trustee, all sales, use,
value added and other Taxes required to be indemnified by the Lessee pursuant to Section 9.2
of the Participation Agreement associated with the exercise of the termination option
pursuant to this Section 13 and all indemnity amounts not obviated by the termination) due
and payable on or prior to the Termination Date, (b) any unpaid Basic Lease Rent due before
such Termination Date, and (c) the Make Whole Premium due on the Lessor Note being prepaid
pursuant to this Section 13.3. All Rent payments under this Section 13.3 shall, to the
extent required by Section 3.5, be made to the Lease Indenture Trustee. Concurrently with
(but not as a condition to) the payment of all sums required to be paid pursuant to Section
13.2 and this Section 13.3, (i) Basic Lease Rent shall cease to accrue, (ii) the Lessee
shall cease to have any liability to the Owner Lessor hereunder or under the other Operative
Documents, except for Supplemental Lease Rent and other obligations (including those under
Sections 9.1 and 9.2 of the Participation Agreement) surviving pursuant to the express
terms of any Operative Document, (iii) unless the Lessee assumes the Lessor Note pursuant to
Section 13.4 hereof and Section 2.10(c) of the Lease Indenture, the Owner Lessor shall pay
the outstanding principal of and accrued interest and

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Make Whole Premium on the Lessor Note pursuant to
Section 2.10(b) of the Lease
Indenture, (iv) this Network Lease and the Head Lease shall terminate, (v) the Owner Lessor
shall transfer, at the Lessee’s cost and expense, by an appropriate instrument of transfer
(in form and substance reasonably satisfactory to the Owner Lessor and prepared by and at the
expense of the Lessee) all of its right, title and interest in and to the Owner Lessor’s
Interest to the Lessee pursuant to this Section 13.3 and Section 6.2 of the Head Lease on an
“as is,” “where is” and “with all faults” basis, without representations or warranties other
than a warranty as to the absence of Owner Lessor’s Liens and a warranty of the Owner
Participant as to the absence of Owner Participant’s Liens, and (vi) unless the Lessee
assumes the Lessor Note pursuant to Section 13.4 hereof and Section 2.10(c) of the Lease
Indenture, the Owner Lessor shall discharge the Lien of the Lease Indenture and execute and
deliver appropriate releases and other documents or instruments necessary or desirable to
effect the foregoing, all to be prepared and filed (as appropriate) by and at the cost and
expense of the Lessee. It shall be a condition of the termination of this Network Lease
pursuant to this Section 13 that the Lessee shall pay all amounts it is obligated to
pay under Section 13.2 and this Section 13.3. If the Lessee fails to consummate the
termination option under this Section 13 after giving notice of its intention to do so, (i)
the Network Lease shall continue, (ii) such failure to consummate shall not constitute a
default under the Network Lease, and (iii) unless such failure is a consequence of a failure
of the Owner Lessor or Owner Participant to fulfill their obligations under this Section 13,
the Lessee will lose its right to terminate this Network Lease pursuant to this Section 13 as
a result of such event or condition during the remainder of the Network Lease Term.

     Section 13.4 Assumption of the Lessor Note. In connection with any
Burdensome Termination Event contemplated by this Section 13, the Lessee may, at its option,
elect to assume in full the Lessor Note and if (a) the Lessee shall have executed and
delivered an assumption agreement in accordance with Section 2.10(c) of the Lease Indenture,
(b) all other conditions contained in such Section 2.10(c) of the Lease Indenture shall have
been satisfied, and (c) no Significant Lease Default or Lease Event of Default shall have
occurred and be continuing after giving effect to such assumption, then the obligation of
the Lessee to pay Termination Value shall be reduced by the outstanding principal amount and
accrued interest on the Lessor Note so assumed by the Lessee.

SECTION 14. TERMINATION FOR OBSOLESCENCE

     Section 14.1 Termination. Upon at least six months’ prior written notice to the
Owner Lessor, the Owner Participant and, so long as the Lien of the Lease Indenture has not
been terminated or discharged, the Lease Indenture Trustee (which notice shall be
accompanied by a certification by the Board of Directors of the Lessee as to one or more of
the matters described in clause (a) and (b) below), the Lessee shall have the option, so
long as no Significant Lease Default or Lease Event of Default shall have occurred and be
continuing and it simultaneously exercises the corresponding option under Section 14.1 of
the Other Network Leases, to terminate this Network Lease in whole on any Termination Date
occurring on or after the fifth anniversary of the Closing Date (the date of termination
selected by the Lessee being the “Obsolescence Termination Date”) on the terms and
conditions set forth in this Section 14 if the Lessee’s Board of Directors determines in
good faith that:

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          (a) the
Network is economically or technologically obsolete as a result of a change in
Applicable Law; or

          (b) the
Network is otherwise economically or technologically obsolete or the Network is
surplus to the Lessee’s needs or is no longer useful in its trade or business.

     
Section 14.2 Solicitation of Offers. If the Lessee shall give the Owner Lessor
notice pursuant to Section 14.1 and the Owner Lessor shall not have elected to retain the
Owner Lessor’s Interest pursuant to Section 14.3 hereof, the Lessee shall, as non-exclusive
agent for the Owner Lessor, use its commercially reasonable efforts to obtain bids and sell
such Owner Lessor’s Interest on the Obsolescence Termination Date, all of the proceeds of
which will be for the account of the Owner Lessor; provided that so long as the Lien of the
Lease Indenture shall not have been terminated or discharged, the proceeds of such sale
pursuant to this Section 14.2 shall be paid directly to the Lease Indenture Trustee. The
Owner Lessor shall also have the right to obtain bids for the sale of such Owner Lessor’s
Interest either directly or through agents other than the Lessee. At least 90 days prior to
the Obsolescence Termination Date the Lessee shall certify to the Owner Lessor and the Lease
Indenture Trustee each bid or offer, the amount and terms thereof and the name and address
of the party (which shall not be the Lessee, any Affiliate or any third party with whom it
or an Affiliate has an arrangement to use or operate the Network for the benefit of the
Lessee or such Affiliate after the termination of this Network Lease) submitting such bid or
offer.

     Section 14.3 Right
of Owner Lessor to Retain the Owner Lessor’s Interest. The
Owner Lessor may irrevocably elect to retain, rather than sell, the Owner Lessor’s Interest
by giving notice to the Lessee and the Lease Indenture Trustee at least 85 days prior to the
Obsolescence Termination Date; provided, however, that the Owner Lessor may not elect to
retain the Owner Lessor’s Interest unless (i) the Other Owner Lessors shall have elected to
retain the related Other Owner Lessor’s Interests pursuant to Section 14.3 of the respective
Other Network Leases, and (ii) it shall have provided the Lessee with financial assurances
reasonably satisfactory to the Lessee that it will satisfy all of its payment obligations
under this Section 14.3. If the Owner Lessor elects to retain such Owner Lessor’s Interest
pursuant to this Section 14.3, on the Obsolescence Termination Date the Lessee shall pay to
the Owner Lessor (a) all Supplemental Lease Rent (including all reasonable out-of-pocket
costs and expenses of the Owner Lessor, the Owner Participant, the Lease Indenture Trustee
and the Pass Through Trustee (excluding the fees and costs of any broker unless engaged by
the Lessee on the Owner Lessor’s behalf) and all sales, use, value added and other Taxes
required to be indemnified by the Lessee pursuant to Section 9.2 of the Participation
Agreement associated with the exercise of the termination option pursuant to this Section
14.3 due and payable on such Obsolescence Termination Date, (b) any unpaid Basic Lease Rent
due before such Obsolescence Termination Date, (c) any Underpayment of Basic Lease Rent
determined as of such Obsolescence Termination Date, and (d) the Make Whole Premium due on
the Lessor Note being prepaid pursuant to this Section 14.3, but shall not be required to
pay Termination Value. All Rent payments under this Section 14.3 shall, to the extent
required by Section 3.5, be made to the Lease Indenture Trustee. Concurrently with (but not
as a condition to) the payment of all sums required to be paid pursuant to this Section
14.3, (i) Basic Lease Rent shall cease to accrue, (ii) the Lessee’s obligations under this
Network Lease shall terminate, (iii) the Lessee shall cease to have any other liability to
the Owner Lessor hereunder or under the other Operative Documents, except for

21

 

Supplemental Lease Rent (other than Termination Value)
and other obligations (including
those under Sections 9.1 and 9.2 of the Participation Agreement) surviving pursuant to the
express terms of any Operative Document, (iv) the Owner Lessor shall pay the outstanding
principal of and accrued interest and Make Whole Premium on the Lessor Note pursuant to
Section 2.10(b) of the Lease Indenture and repay to the Lessee any Overpayment of Basic Lease
Rent determined as of such Obsolescence Termination Date, (v) this Network Lease shall
terminate, (vi) the Owner Lessor shall, at the Lessee’s cost and expense, execute and deliver
to the Lessee a release and termination of this Network Lease, (vii) the Lessee will return
the Owner Lessor’s Interest to the Owner Lessor in accordance with Section 5.1, and (viii)
the Owner Lessor shall cause the Lease Indenture Trustee to discharge the Lien of the Lease
Indenture and execute and deliver appropriate releases and other documents or instruments
necessary or desirable to effect the foregoing, all to be prepared and filed (as appropriate)
by and at the cost and expense of the Lessee. It shall be a condition to the termination of
this Network Lease pursuant to this Section 14.3 that the Lessee shall pay all amounts that
it is obligated to pay under this Section 14.3. If the Owner Lessor shall not pay any amount
payable by it as contemplated by clause (iv) above, then the notice of termination shall be
deemed revoked and this Network Lease shall continue in full force and effect in accordance
with its terms and, so long as such failure was not caused by the Lessee’s failure to pay
any amount required to be made by it under this Section, without prejudice to the Lessee’s
right to exercise its rights under this Section 14.

     Section 14.4
 Procedure for Exercise of Termination Option. If the Owner Lessor has not
elected to retain the Owner Lessor’s Interest in accordance with Section 14.3 hereof, on
the Obsolescence Termination Date the Owner Lessor shall sell the Owner Lessor’s Interest
under this Section 14.4 and Section 5.2 of the Head Lease to the bidder or bidders (which
shall not be the Lessee, any Affiliate thereof or any third party with whom it or an
Affiliate has an arrangement to use or operate the Network for the benefit of the Lessee or
such Affiliate after the termination of this Network Lease) that shall have submitted the
highest cash bid or bids with respect to the Owner Lessor’s Interest, and the Lessee shall
certify to the Owner Lessor, the Owner Participant and, so long as the Lien of the Lease
Indenture shall not have been terminated or discharged, the Lease Indenture Trustee, that
such buyer is not the Lessee, any Affiliate thereof or any third party with whom it or an
Affiliate has an arrangement to use or operate the Network for the benefit of the Lessee or
such Affiliate after the termination of this Network Lease. On the Obsolescence Termination
Date, the Lessee shall pay to the Owner Lessor (a) the excess, if any, of Termination Value
determined as of such Obsolescence Termination Date over the net sales price of the Owner
Lessor’s Interest paid to or retained by the Owner Lessor, after deducting from the total
sales price the expenses, if any, incurred by the Owner Lessor and the Owner Participant in
connection with such sale, plus (b) any unpaid Basic Lease Rent due on or before such
Obsolescence Termination Date, plus (c) all amounts of Supplemental Lease Rent (excluding
Termination Value but including all reasonable out-of-pocket costs and expenses of the Owner
Lessor, the Owner Participant, the Lease Indenture Trustee and the Pass Through Trustee
(excluding the fees and costs of any broker unless engaged by the Lessee on the
Owner Lessor’s behalf) and all sales, use, value added and other Taxes required to be
indemnified by the Lessee pursuant to Section 9.2 of the Participation Agreement associated
with the exercise of the termination option pursuant to this Section 14) due and payable
on such Obsolescence Termination Date and not already deducted from the sales price pursuant
to clause (a) above, plus (d) the Make Whole Premium due on the Lessor Note being prepaid
pursuant to this Section 14.4. All Rent payments under this
Section 14.4 shall, to the
extent required by

22

 

Section 3.5, be made to the Lease Indenture Trustee.
Concurrently with (but not as a
condition to) the payment of all sums required to be paid pursuant to this Section 14.4, (i)
Basic Lease Rent shall cease to accrue, (ii) the Lessee’s obligations under this Network Lease
shall terminate, (iii) the Lessee shall cease to have any other liability to the Owner Lessor
hereunder or under the other Operative Documents, except for Supplemental Lease Rent and
other obligations (including Sections 9.1 and 9.2 of the Participation Agreement) surviving
pursuant to the express terms of any Operative Document, (iv) the Owner Lessor will pay the
outstanding principal of and accrued interest and Make Whole Premium on the Lessor Note
pursuant to Section 2.10(b) of the Lease Indenture, (v) this Network Lease and the Head Lease
shall terminate, (vi) the Owner Lessor shall, at the Lessee’s cost and expense, execute and
deliver to the Lessee a release or termination of this Network Lease, (vii) the Owner Lessor
will transfer (by an appropriate instrument of transfer in form and substance reasonably
satisfactory to the Owner Lessor and prepared by and at the expense of the Lessee) all of its
right, title and interest in and to the Owner Lessor’s Interest to the purchaser pursuant to
this Section 14.4 on an “as is,” “where is” and “with all faults” basis, without
representations or warranties other than a warranty as to the absence of Owner Lessor’s Liens
and a warranty from the Owner Participant as to the absence of Owner Participant’s Liens, and
(viii) the Owner Lessor shall discharge the Lien of the Lease Indenture and execute and
deliver appropriate releases and other documents or instruments necessary or desirable to
effect the foregoing, all to be prepared and filed (as appropriate) at the cost and expense
of the Lessee. Unless the Owner Lessor shall have elected to retain the Owner Lessor’s
Interest pursuant to Section 14.3 or the Owner Lessor with the consent of the Lessee shall
have entered into a legally binding contract to sell the Owner Lessor’s Interest, the
Lessee may, at its election, revoke its notice of termination on at least 30 days’ prior
notice to the Owner Lessor, the Owner Participant and, so long as the Lien of the Lease
Indenture shall not have been terminated or discharged, the Lease Indenture Trustee and the
Pass Through Trustee, in which event this Network Lease shall continue without prejudice to
the Lessee’s right to exercise its rights under this Section 14; provided that the Lessee may
initiate the termination procedure set forth herein no more than three times. The Owner
Lessor shall be under no duty to solicit bids, to inquire into the efforts of the Lessee to
obtain bids or to otherwise take any action in arranging any such sale of the Owner Lessor’s
Interest other than, if the Owner Lessor has not elected to retain the Owner Lessor’s
Interest, to transfer the Owner Lessor’s Interest in accordance with clause (vii) of this
Section 14.4. It shall be a condition of the Owner Lessor’s obligation to consummate a sale
of the Owner Lessor’s Interest that the Lessee shall pay all amounts it is obligated to pay
under this Section 14.4 If no sale shall occur on the Obsolescence Termination Date, the
notice of termination shall be deemed revoked and this Network Lease shall continue in full
force and effect in accordance with its terms without prejudice to the Lessee’s right
to exercise its rights under this Section 14.

Section 14A. PARTIAL TERMINATION IN CONSEQUENCE OF SALES OF TRANSMISSION ASSETS.

     Section 14A.1
Partial Termination. If a portion of the Transmission Plant of the
Lessee in connection with which a portion of the Network (including software) is utilized
shall be sold to a third party which is not the Lessee or an Affiliate of the Lessee, upon
at least two months’ prior written notice to the Owner Lessor, the Owner Participant and, so
long as the Lien of the Lease Indenture has not been terminated or discharged, the Lease
Indenture Trustee and the Pass Through Trustee, the Lessee shall have the option, so long as
no Significant Lease Default or

23

 

Lease Event of Default shall have occurred and be continuing and the Lessee
simultaneously exercises the corresponding option under Section 14A of the Other Network
Leases, to declare such portion of the Network to be surplus to the Lessee’s operations in
consequence of such sale of the portion of the Transmission Plant and terminate this Network
Lease and the Head Lease in part on any Termination Date (the date of termination selected by
the Lessee being the “ Partial Termination Date”) on
the terms and conditions set forth in
this Section 14A. The Lessee’s right to partially terminate the Network Lease pursuant to
this Section 14A shall be limited to those Components of the Network (and associated
software) utilized in connection with that portion of the Transmission Plant which are to be
sold to a third party. In no event shall the termination option provided by this Section
14A.1 be used to terminate the Network Lease (a) with respect to the System Operations Center
or the Reliability Operations Center or (b) if, following such termination, the Fair Market
Sales Value of the Network (as determined by the appraisal conducted pursuant to Section
14A.2) would be less than fifty percent of the Network Cost as of the Closing Date. The
Lessee shall not be permitted to effect a Partial Termination more frequently than once in
each twenty-four month period unless the sale of the transmission facilities in respect of
which such Partial Termination shall occur shall be required by
Applicable Law.

     The
Lessee may revoke its notice of
Partial Termination so long as such notice is given
at least thirty days prior to the proposed Partial Termination Date.

     Section 14A.2
 Appraisal. In connection with the partial termination contemplated by
this Section 14A, the Lessee shall, at its own cost and expense, cause an appraisal to be
conducted by an Independent Appraiser of (a) that portion of the Network with respect to
which the Network Lease is to be terminated (the “Terminated Portion”) and (b) the entire
Network without regard to the proposed termination. The fraction (expressed as a
percentage), the numerator of which is the Fair Market Sales Value of the Terminated Portion
and the denominator of which is the Fair Market Sales Value of the entire Network, as each
is determined by such appraisal, is hereinafter called the “Termination Percentage”. It
shall be a condition to the Lessee’s right to effect a Partial Termination pursuant to this
Section 1.4A that the Lessee shall either make Substituted Components or Substituted
Non-Network Equipment subject to the Head Lease and this Network
Lease in accordance with
Section 14A.3 or make the Partial Termination Payment in accordance with Section 14A.4. The
right of the Lessee to effect a Partial Termination shall in all cases be subject to
delivery of (i) the report, in form and substance reasonably satisfactory to the
Owner Participant, of an Independent Engineer described in clause (b) of the first sentence
of Section 14A.3 and (ii) a conclusion by the Independent Appraiser in the appraisal
conducted pursuant to this Section 14A.2 that the estimated
useful life of the Network will
not be diminished following such Partial Termination from what it was prior thereto.

     Section 14A.3
 Substituted Components; Substituted Non-Network Equipment. If the Lessee
elects not to cause a sale of the Terminated Portion of the Owner Lessor’s Interest
as provided in Section 14A.4, the Lessee may elect to replace the Terminated Portion with
either Substituted Components or Substituted Non-Network Equipment (as each are hereafter
defined) upon satisfaction of the conditions provided in this Section 14A.3. In the event
that the Lessee elects to replace the Terminated Portion with Substituted Components the
Lessee shall provide replacement Components that constitute accessions to the remaining
portion of the Network and will be operated as an integral part of the remaining portion of
the Network (“Substituted

24

 

Components”). The Lessee’s right to provide Substituted Components shall be subject to (a)
receipt by each Owner Participant of either (i) an opinion of its tax counsel satisfactory to
the Owner Participant to the effect that such substitution will not result in any incremental
tax risks to the Owner Participant, or (ii) an indemnity against such incremental risks in
form and substance satisfactory to the Owner Participant from the Lessee, (b) receipt by the
Owner Participant and, so long as the Lien of the Lease Indenture has not been terminated or
discharged, the Lease Indenture Trustee and the Pass Through Trustee,
of (1)a report of an
Independent Engineer reasonably satisfactory to the Owner Participant, to the effect that
following the Partial Termination and release of the Terminated Portion from the Head Lease
and the addition to the Network of the Substituted Components, the Network constitutes a
single integrated and technologically viable “system” capable of performing the Network
Functions with respect to which it performed prior to such Partial Termination (other than
with respect to the portion of the Transmission Plant sold) and (2) a report, in form and
substance reasonably satisfactory to the Owner Participant, of the QTE Consultant or other
Person selected by the Owner Participant and reasonably acceptable to the Lessee, experienced
in the analysis of property eligible for treatment as “qualified technological equipment”
under §168(i)(2) of the Code selected by the Lessee and reasonably acceptable to the Owner
Participant that the Network and its Components (including any Substituted Components) will
continue to constitute “qualified technological equipment”
under §168(i)(2) of the Code or
“computer software” under §167(f)(1)(B) of the Code
provided, however, such report shall be
required only if the Owner Lessor’s Percentage of the Network Cost has not been fully
recovered for federal income tax purposes at the time the Terminated Portion is replaced
with Substituted Components or Substituted Non-Network Equipment; and (c) an appraisal
(which may be the appraisal conducted pursuant to Section 14A.2), in form and substance
reasonably satisfactory to the Owner Participant, to the effect that the Network has a fair
market value, estimated residual value, utility and useful life at least equal to that of
the Network prior to the Partial Termination assuming the Network is in a state of repair
and condition required by this Network Lease and that the Network and its Components
(including any Substituted Components made subject to the Head Lease pursuant to this
provision) do not constitute “limited use property” within the meaning of Rev. Proc. 2001-28,
2001-19 I.R.B. 1156 and 2001-29, 2001-19 I.R.B. 1160.

     The Lessee also may substitute for the Terminated Portion additional items of
equipment (“Substituted Non-Network Equipment”) which do not constitute accessions to the
Network subject to meeting the conditions of this Section 14A.3. The Lessee’s right to make
Substituted Non-Network Equipment subject to the Head Lease and this Network Lease shall be
subject to (a) receipt by the Owner Participant of either (i) an opinion of its tax counsel
satisfactory to the Owner Participant to the effect that such substitution will not result
in any incremental tax risks to the Owner Participant, or (ii) an indemnity against such
incremental risks in form and substance satisfactory to Owner Participant from the Lessee,
(b) receipt by the Owner Participant and, so long as the Lien of the Lease Indenture has not
been terminated or discharged, the Lease Indenture Trustee and the Pass Through Trustee, of
(i) a report of an Independent Engineer reasonably satisfactory to the Owner Participant, to
the effect that (1) following the Partial Termination and release of the Terminated Portion
from the Head Lease the Network constitutes an integrated and a technologically viable
“system” capable of performing at least one of the Network Functions, (2) that the
Substituted Non-Network Equipment itself constitutes a technologically viable integrated
“system” capable of performing at least one of the Network Functions, and (3) the Network
and Substituted Non-Network Equipment together (although not

25

 

necessarily on a fully integrated basis) are capable of
performing all of the Network Functions
or providing services that are equivalent to the Network Functions, and (ii) a report, in
form and substance reasonably acceptable to the Owner Participant, of the QTE Consultant or
other Person experienced in the analysis of property eligible for treatment as “qualified
technological equipment” under §168(i)(2) of the Code selected by the Lessee and reasonably
acceptable to the Owner Participant that, following the Partial Termination, the Network and
the Substituted Non-Network Equipment and Components of each, constitutes “qualified
technological equipment” under §168(i)(2) of the Code or “computer software” under
§167(f)(l)(B) of the Code, provided, however, such report shall be required only if
the Owner Lessor’s Percentage of the Network Cost has not been fully recovered for federal
income tax purposes at the time the Terminated Portion is replaced with Substituted
Components or Substituted Non-Network Equipment; and (c) an appraisal in form and substance
reasonably acceptable to Owner Participant (which may be the appraisal conducted pursuant to
Section 14A.2) to the effect that the Network and the Substituted Non-Network Equipment have
an aggregate fair market value, combined estimated residual value, and each has a utility
and useful life at least equal to that of the Network prior to the Partial Termination and
that neither the Network nor the Substituted Non-Network Equipment constitute “limited use
property” within the meaning of Rev. Proc. 2001-28, 2001-19 I.R.B. 1156 and 2001-29, 2001-19
I.R.B. 1160.

     The Lessee shall be permitted to satisfy its obligations under this Section 14A.3 with
a combination of Substituted Components and Substituted Non-Network Equipment, provided
that each such substitution satisfies the applicable conditions of this Section 14A.3. All
provisions of this Network Lease and the other Operative Documents shall apply to any
remaining portion of the Network as it existed on the Closing Date (including any Substituted
Components, if applicable) and any Substituted Non-Network Equipment, each as a separate
integrated system.

     Section 14A.4
Partial Termination Payment. If the Lessee shall not elect to
substitute Substituted Components or Substituted Non-Network Equipment for the Terminated
Portion of the Network pursuant to Section 14A.3, or shall be unable to meet the
requirements for substitution set forth in Section 14A.3, then on the Partial Termination
Date the Lessee shall pay the Owner Lessor an amount (the “Partial Termination Payment”)
equal to the higher of (x) the Fair Market Sales Value of the Terminated Portion and (y) the
Termination Percentage of Termination Value; provided, however, that, if such sale of the
Lessee’s transmission facilities to a third party is pursuant to any Governmental Action or
the direct or indirect result of changes in law not within the control of the Lessee, such
Partial Termination Payment by the Lessee to the Owner Lessor shall be in an amount equal to
the Termination Percentage of the Termination Value. In addition, on the Partial Termination
Date, the Lessee shall pay to the Owner Lessor (a) all amounts of Supplemental Lease Rent
(including all reasonable out-of-pocket costs and expenses of the Owner Lessor, the Owner
Participant, the Lease Indenture Trustee and the Pass Through Trustee, all sales, use,
value added and other Taxes required to be indemnified by the Lessee pursuant to Section 9.2
of the Participation Agreement associated with the exercise of the Partial Termination
Option pursuant to this Section 14A) due and payable on or prior to such Partial Termination
Date, (b) any unpaid Basic Lease Rent due before such Partial Termination Date, (c) any
Underpayment of Basic Lease Rent determined as of such Partial Termination Date and (d) the
Make-Whole Premium due on the portion of the Lessor Note being prepaid pursuant to this
Section 14A.4. All Rent payments under this Section 14A.4 shall, to the extent required by
Section 3.5, be made to the Lease Indenture Trustee. Concurrently with (but not as a

26

 

condition to) the payment of all sums required to be paid pursuant to this Section 14A.4,
the Owner Lessor shall (i) pay a portion of the outstanding principal of, and accrued
interest on, the Lessor Note equal to the Termination Percentage and the applicable
Make-Whole Premium pursuant to Section 2.10(b) of the Lease Indenture and (ii) pay to the
Lessee any Overpayment of Basic Lease Rent determined as of such Partial Termination Date.

     Section 14A.5 Conveyance of Terminated Portion. If the Lessee shall satisfy
the conditions of Section 14A.3 for the substitution of Substituted Components or
Substituted Non-Network Equipment or shall have made the Partial Termination Payment pursuant
to Section 14A.4, on the Partial Termination Date: (a) Owner Lessor shall transfer, at the
Lessee’s cost and expense, by an appropriate instrument of transfer (in form and substance
reasonably satisfactory to the Lessee and prepared by and at the expense of the Lessee) all
of its right, title and interest in and to the Owner Lessor’s Interest in the Terminated
Portion to the Lessee’s designee (which shall not be an Affiliate of the Lessee or any third
party with whom the Lessee or any Affiliate has an arrangement to use or operate the
Terminated Portion for the benefit of the Lessee or an Affiliate after the Partial
Termination) pursuant to this Section 14A.5 and Section 6.2 of the Head Lease on an “as is,”
“where is” and “with all faults” basis, without representations or warranties other than a
warranty as to the absence of Owner Lessor’s Liens and a warranty of the Owner Participant as
to the absence of Owner Participant’s Liens, (b) the schedules of Basic Lease Rent,
Termination Values and the Early Purchase Option shall be adjusted pursuant to Section 3.4(b)
and (c) the Owner Lessor shall discharge the Lien of the Lease Indenture with respect to such
Terminated Portion and execute and deliver appropriate releases and other documents or
instruments necessary or desirable to effect the foregoing, all to be prepared and filed (as
appropriate) by and at the cost and expense of the Lessee.

SECTION 15. EARLY PURCHASE OPTION

     
Section 15.1 Election of Early Purchase. So long as no Significant Lease
Default described in clause (iii) of the definition thereof or Lease Event of Default under
Section 17(e) or 17(f) hereof shall have occurred and be continuing, the Lessee shall have
the right, at its option (the 

“ Early Purchase Option”), by giving written notice to the
Owner Lessor, the Owner Participant, and, so long as the Lien of the Lease Indenture shall
not have been terminated or discharged, the Lease Indenture Trustee, at any time not earlier
than 36 months prior to the Early Purchase Date and not later than 12 months prior to the
Early Purchase Date, to purchase the Owner Lessor’s Interest and terminate this Network
Lease on the Early Purchase Date. Such notice, once given, shall be irrevocable. The Lessee
may exercise its Early Purchase Option with respect to this Network Lease only if the Lessee
simultaneously exercises its corresponding “Early Purchase Option” in the Other Network
Leases.

     
Section 15.2 Procedure for Exercise of Early Purchase Option. If the Lessee shall have
exercised its option under Section 15.1, the Lessee shall (1) pay to the Owner Lessor on
the Early Purchase Date (a) the initial installment of the applicable Early Purchase Price
set forth on Schedule 4 hereto, (b) all amounts of Supplemental Lease Rent (including all
reasonable out-of-pocket costs and expenses of the Owner Lessor, the Owner Participant, the
Lease Indenture Trustee and the Pass Through Trustee, all sales, use, value added and other
Taxes required to be indemnified by the Lessee pursuant to Section 9.2 of the Participation
Agreement associated with the exercise of the Early Purchase Option pursuant to this Section
15) due and

27

 

payable on or prior to the Early Purchase Date, and (c) any unpaid Basic Lease Rent due on
or before the Early Purchase Date, and (2) become obligated to pay to the Owner Lessor
the additional installments of the applicable Early Purchase Price in the amounts and on the
dates set forth in Schedule 4 hereto. The covenant to pay additional installments of the
Early Purchase Price in accordance with the preceding sentence shall survive termination of
this Network Lease. All Rent payments under this Section 15.2 shall, to the extent required
by Section 3.5, be made to the Lease Indenture Trustee. Concurrently with (but not as a
condition to) the payment of all sums required to be paid pursuant to
Section 15.2, (i) Basic
Lease Rent shall cease to accrue, (ii) the Lessee shall cease to have any liability to the
Owner Lessor hereunder or under the other Operative Documents, except for Supplemental Lease
Rent, the additional installments of the Early Purchase Price payable as set forth above and
other obligations (including those under Sections 9.1 and 9.2 of the Participation Agreement)
surviving pursuant to the express terms of any Operative Document, (iii) this Network Lease
and the Head Lease shall terminate, (iv) the Owner Lessor shall transfer, at the Lessee’s
cost and expense, by an appropriate instrument of transfer (in form and substance reasonably
satisfactory to the Owner Lessor and prepared by and at the expense of the Lessee) all of its
right, title and interest in and to the Owner Lessor’s Interest to the Lessee pursuant to
this Section 15.2 and Section 6.2 of the Head Lease on an “as is,” “where is” and “with all
faults” basis, without representations or warranties other than a warranty as to the absence
of Owner Lessor’s Liens and a warranty of the Owner Participant as to the absence of Owner
Participant’s Liens, and (v) the Owner Lessor shall discharge the Lien of the Lease
Indenture and execute and deliver appropriate releases and other documents or instruments
necessary or desirable to effect the foregoing, all to be prepared and filed (as appropriate)
by and at the cost and expense of the Lessee.

SECTION 16. PURCHASE OPTION

     Section 16.1
Election of Purchase Option. Unless this Network Lease shall have
been previously terminated pursuant to Section 10, 13, 14, 15 or 18 hereof, the Lessee
shall have the option, so long as no Significant Lease Default or Lease Event of Default
shall have occurred and be continuing (other than any default that would be cured by such
purchase), to purchase the Owner Lessor’s Interest on the Expiration Date for the Purchase
Option Price in accordance with this Section 16.1 (the “Purchase Option”). The Lessee may
exercise its Purchase Option with respect to this Network Lease only if the Lessee
simultaneously exercises its corresponding “Purchase Option” in the Other Network Leases. In
order to exercise the Purchase Option, the Lessee must notify the Owner Lessor, the Owner
Participant, and, so long as the Lien of the Lease Indenture shall not have been terminated
or discharged, the Lease Indenture Trustee, of its election to exercise the Purchase Option
at any time not earlier than 24 months prior to the Expiration Date and not later than 12
months prior to the Expiration Date. If such election is made by the Lessee prior to the
date which is 12 months prior to the Expiration Date, unless previously revoked by the
Lessee, such election shall become irrevocable on the date that is 12 months prior to the
Expiration Date. Upon delivery of notice by the Lessee of the notice contemplated by the
preceding sentence, the Lessee and the Owner Participant will promptly commence negotiation
to determine the Fair Market Sales Value of the Owner Lessor’s Interest. If such Fair Market
Sales Value cannot be agreed upon by the Lessee and the Owner Participant within 90 days of
the Lessee’s notice of its election to exercise the Purchase Option, such Fair Market Sales
Value shall be determined by the Appraisal Procedure. Unless the Lessee shall purchase the
Owner Lessor’s Interest in accordance with this Section 16, on the Expiration Date

28

 

the Lessee shall return the Network to the Owner Lessor in accordance with the provisions
of Section 5 of this Network Lease.

     
Section 16.2 Procedure for Exercise of Purchase Option. If the Lessee shall
have irrevocably elected the Purchase Option, the Lessee shall become unconditionally
obligated to pay on the expiration of the Network Lease Term (a) the Purchase Option Price,
(b) all amounts of Supplemental Lease Rent (including all reasonable out-of-pocket costs and
expenses of the Owner Lessor, the Owner Participant, the Lease Indenture Trustee and the
Pass Through Trustee, all sales, use, value added and other Taxes required to be indemnified
by the Lessee pursuant to Section 9.2 of the Participation Agreement associated with the
exercise of the Purchase Option pursuant to this Section 16) due and payable prior to the
Purchase Option Date, and (c) any unpaid Basic Lease Rent due before the Expiration Date of
the Network Lease Term. All Rent payments under this Section 16.2 shall, to the extent
required by Section 3.5, be made to the Lease Indenture Trustee. Concurrently with (but not
as a condition to) the payment of all sums required to be paid pursuant to this Section
16.2, (i) Basic Lease Rent shall cease to accrue, (ii) the Lessee shall cease to have any
liability to the Owner Lessor hereunder or under the other Operative Documents, except for
Supplemental Lease Rent and other obligations (including those under
Sections 9.1 and 9.2
of the Participation Agreement) surviving pursuant to the express terms of any Operative
Document, (iii) this Network Lease and the Head Lease shall
terminate, (iv) the Owner Lessor
shall transfer, at the Lessee’s cost and expense, by an appropriate instrument of transfer
(in form and substance reasonably satisfactory to the Owner Lessor and prepared by and at
the expense of the Lessee) all of its right, title and interest in and to the Owner Lessor’s
Interest to the Lessee pursuant to this Section 16.2 and Section 6.2 of the Head Lease on an
“as is,” “where is” and “with all faults” basis, without representations or warranties other
than a warranty as to the absence of Owner Lessor’s Liens and a warranty of the Owner
Participant as to the absence of Owner Participant’s Liens, and (v) the Owner Lessor
shall discharge the Lien of the Lease Indenture and execute and deliver appropriate releases
and other documents or instruments necessary or desirable to effect the foregoing, all to be
prepared, filed and recorded (as appropriate) by and at the cost and expense of the Lessee.

SECTION 17. EVENTS OF DEFAULT

     The following events shall constitute a “Lease Event of Default” hereunder (whether
any such event shall be voluntary or involuntary or come about or be effected by operation
of law or pursuant to or in compliance with any judgment, decree or order of any court or
any order, rule or regulation of any Governmental Entity):

          (a) the Lessee shall fail to make any payment of Basic Lease
Rent, Termination Value, Partial Termination Payment, Early Purchase Price or Purchase Option
Price after the same shall have become due and such failure shall have continued for five (5)
Business Days after the same shall become due; or

          (b) the Lessee shall fail to make any payment of Supplemental Lease Rent (other than
Excepted Payments, unless the Owner Participant shall have declared a default with respect
thereto and amounts described in clause (a)), after the same shall have become due and such
failure shall have continued from a period of thirty (30) days after receipt by the Lessee of

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written notice of such default
from the Owner Participant, the Owner Lessor, the Lease
Indenture Trustee or the Pass Through Trustee; or

          (c) the Lessee shall fail to perform or observe any covenant, obligation or agreement to
be performed or observed by it under this Network Lease or any other Operative Document
(other than any covenant, obligation or agreement contained in the Tax Indemnity Agreement or
any covenant, obligation or agreement referred to in clauses (a) or (b) of this Section 17)
in any material respect, which shall continue unremedied for 30 days after receipt by the
Lessee of written notice thereof from the Owner Participant, the Owner Lessor, the
Lease Indenture Trustee or the Pass Through Trustee; provided, however, that if such
condition cannot be remedied within such 30 day period, then the period within which to
remedy such condition shall be extended up to an additional 180 days, so long as the Lessee
diligently pursues such remedy and such condition is reasonably capable of being remedied
within such additional 180 day period; provided, further, that, in the case of the Lessee’s
obligation set forth in clause (a) of Section 7.1, if, to the extent and for so long as a
test, challenge, appeal or proceeding shall be prosecuted in good faith by the Lessee, the
failure by the Lessee to comply with such requirement shall not constitute a Lease Event of
Default if such test, challenge, appeal or proceeding shall not involve any danger of (i)
foreclosure, sale, forfeiture or loss of, or imposition of a lien on, any part of the
Undivided Interest or the Software Rights, or the impairment of the use, operation or
maintenance of the Network in any material respect, or (ii) any criminal liability being
incurred by, or any material adverse effect on the interests of, the Owner Participant, the
Owner Lessor, the Lease Indenture Trustee or the Pass Through Trustee, including subjecting
the Owner Participant or the Owner Lessor to regulation as a public utility or similar entity
under Applicable Law; and provided, further, that in the case of the Lessee’s obligation set
forth in clause (a) of Section 7.1, if the noncompliance is not a type that can
be immediately remedied, the failure to comply shall not be a Lease Event of Default if the
Lessee is taking all reasonable action to remedy such noncompliance and if, but only if,
such noncompliance shall not involve any danger described in clause (i) or (ii) of the
preceding proviso; and provided, further, such noncompliance, or such test, challenge,
appeal or proceeding to review shall not extend beyond the scheduled expiration of the
Network Lease Term; or

          (d) any representation
or warranty made by the Lessee in the Operative Documents
(other than a Tax Representation) shall prove to have been incorrect in any
material respect when made and continues to be material and unremedied for a period of 30
days after receipt by the Lessee of written notice thereof from the Owner Participant, the
Owner Lessor, the Lease Indenture Trustee or the Pass Through Trustee; provided, however,
that if such condition cannot be remedied within such 30 day period, then the period
within which to remedy such condition shall be extended up to an
additional 180 days, so
long as the Lessee diligently pursues such remedy and such condition is reasonably capable
of being remedied within such additional 180 day period; or

          (e) the Lessee shall (i) commence a voluntary case or other proceeding seeking relief
under the Bankruptcy Code or liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect, or apply for or consent to the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of its
property, or (ii) consent to, or

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fail to controvert in a timely manner, any such relief or the appointment of or taking
possession by any such official in any voluntary case or other insolvency proceeding
commenced against it, or (iii) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, or (iv) make a general assignment for the
benefit of creditors; or

          (f) an involuntary case or other proceeding shall be commenced against the Lessee
seeking (i) liquidation, reorganization or other relief with respect to it or its debts
under the Bankruptcy Code or any bankruptcy, insolvency or other similar law now or hereafter
in effect, or (ii) the appointment of a trustee, receiver, liquidator, custodian or other
similar official with respect to it or any substantial part of its property or (iii) the
winding-up or liquidation of the Lessee; and such involuntary case or other insolvency
proceeding shall remain undismissed and unstayed for a period of 90 days (unless, in lieu of
dismissal or stay of such proceeding, the Lessee shall deliver to the Owner Lessor and the
Lease Indenture Trustee an opinion of counsel reasonably satisfactory to each of them to the
effect that the Lessee is not an entity which can become a “debtor” under Section 101 of
the Bankruptcy Code); or

          (g) the Lessee or any Person acting on behalf of the Lessee shall repudiate or disaffirm
the validity or enforceability of the Head Lease or the rights of the Owner
Lessor thereunder;

          (h) the Lessee shall fail to return the Network in accordance with
the provisions hereof as and when required to do so hereunder; or

          (i) the Lessee shall fail to comply with its covenant set forth in Section
11.2 of the Participation Agreement.

SECTION 18. REMEDIES

     Section 18.1
Remedies for Lease Event of Default. Upon the occurrence of any
Lease Event of Default and at any time thereafter so long as the same shall be continuing,
the Owner Lessor may, at its option, declare this Network Lease to be in default by written
notice to the Lessee; provided that upon the occurrence of a Lease Event of Default
described in paragraph (e) or (f) of Section 17, this Network Lease shall automatically be
deemed to be in default without the need for giving any notice; and at any time thereafter,
so long as the Lessee shall not have remedied all outstanding Lease Events of Default, the
Owner Lessor may do one or more of the following as the Owner Lessor in its sole discretion
shall elect, to the extent permitted by, and subject to compliance with any mandatory
requirements of, Applicable Law then in effect:

          (a) proceed by appropriate court action or actions, either at law or in equity,
to enforce performance by the Lessee, at the Lessee’s sole cost and expense, of the
applicable covenants and terms of this Network Lease or to recover damages for breach
thereof;

          (b) by notice in writing to the Lessee, terminate this Network
Lease whereupon all right of the Lessee to the possession and use under this Network Lease of
the Lessee’s Interest shall absolutely cease and terminate but the Lessee shall remain liable
as hereinafter provided; and thereupon, the Owner Lessor may demand that the Lessee, and
the Lessee shall, upon written demand of the Owner Lessor and at the Lessee’s expense,
forthwith return possession of the Undivided Interest and the Software Rights to the Owner
Lessor in the

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manner and condition required by, and otherwise in accordance with all of the provisions
of Section 5, except those provisions relating to periods of notice; and the Owner Lessor
may thenceforth hold, possess and enjoy the same, free from any right of the Lessee, or its
successor or assigns, to use the Undivided Interest and the Software Rights for any purpose
whatever;

          (c) sell the Owner Lessor’s Interest at public or private sale, as the Owner Lessor may
determine, free and clear of any rights of the Lessee under this Network Lease and without
any duty to account to the Lessee with respect to such sale or for the proceeds
thereof (except to the extent required by paragraph (f) below if the Owner Lessor elects to
exercise its rights under said paragraph and by Applicable Law), in which event the Lessee’s
obligation to pay Basic Lease Rent hereunder due for any periods subsequent to the date of
such sale shall terminate (except to the extent that Basic Lease Rent is to be included in
computations under paragraph (e) or (f) below if the Owner Lessor elects to exercise its
rights under said paragraphs);

          (d) hold, keep idle or lease to others the Owner Lessor’s Interest as the Owner Lessor
in its sole discretion may determine, free and clear of any rights of the Lessee under
this Network Lease and without any duty to account to the Lessee with respect to such action
or inaction or for any proceeds with respect thereto, except that the Lessee’s obligation to
pay Basic Lease Rent due for any periods subsequent to the date upon which the Lessee shall
have been deprived of possession and use of the Lessee’s Interest pursuant to this Section 18
shall be reduced by the net proceeds, if any, received by the Owner Lessor from subleasing
the Undivided Interest and transferring the Software Rights to any Person other than the
Lessee;

          (e) whether or not the Owner Lessor shall have exercised, or shall thereafter at any
time exercise, any of its rights under paragraph (b) above with respect to the
Lessee’s Interest, the Owner Lessor, by written notice to the Lessee specifying a Termination
Date that shall be not earlier than 10 days after the date of such notice, may demand that
the Lessee pay to the Owner Lessor, and the Lessee shall pay to the Owner Lessor, on the
Termination Date specified in such notice, any unpaid Basic Lease Rent due on or before such
Termination Date, any Supplemental Lease Rent due and payable as of the Termination Date
specified in such notice, plus, as liquidated damages for loss of a bargain and not as a
penalty (in lieu of the Basic Lease Rent due after the Termination Date specified in such
notice), (i) an amount equal to the excess, if any, of the Termination Value computed as of
the Termination Date specified in such notice over the Fair Market Sales Value of the Owner
Lessor’s Interest as of the Termination Date specified in such notice, or (ii) an amount
equal to the excess, if any, of Termination Value computed as of the Termination Date
specified in such notice over the Fair Market Rental Value of the Owner Lessor’s Interest
until the end of the Network Lease Term, after discounting such Fair Market Rental Value
semiannually to present value as of the Termination Date specified in such notice at a rate
equal to the Lease Debt Rate, and upon payment of such excess amount under either clause (i)
or (ii) of this paragraph (e), this Network Lease and the Lessee’s obligation to pay Basic
Lease Rent hereunder due for any periods subsequent to the date of such payments shall
terminate;

          (f) if the Owner Lessor shall have sold the Owner Lessor’s Interest pursuant to
paragraph (c) above, the Owner Lessor may, if it shall so elect, demand that the Lessee pay
to the Owner Lessor, and the Lessee shall pay to the Owner Lessor, as liquidated damages for
loss

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of a bargain and not as a penalty (in lieu of the Basic Lease Rent due for any periods
subsequent to the dale of such sale), an amount equal to (i) any unpaid Basic Lease Rent due [on
or] before the date of such sale and, (ii) if that date is not a Termination Date, the daily
equivalent of Basic Lease Rent for the period from the preceding Termination Date to the date of
such sale, plus (iii) the amount, if any, by which the Termination Value computed as of the
Termination Date next preceding the date of such sale or, if such sale occurs on a Rent Payment
Date or a Termination Date then computed as of such date, exceeds the net proceeds of such sale,
and, upon payment of such amount, this Network Lease and the Lessee’s obligation to pay Basic Lease
Rent for any periods subsequent to the date of such payment shall terminate;

          (g) whether or not the Owner Lessor shall have exercised, or shall thereafter at any time exercise,
any of its rights under paragraph (b) above with respect to the Lessee’s Interest, the Owner
Lessor, by written notice to the Lessee specifying a Termination Date that shall not be earlier
than 10 days after the date of such notice, may demand that the Lessee pay to the Owner Lessor, and
the Lessee shall pay to the Owner Lessor, on the Termination Date specified in such notice, any
unpaid Basic Rent due before such Termination Date, plus as liquidated damages for loss of a
bargain and not as a penalty (in lieu of the Basic Rent due after the Termination Date specified in
such notice), an amount equal to the Termination Value computed, as of the Termination Date
specified in such notice and, upon payment of such Termination Value by the Lessee pursuant to this
clause (g) and all other Rent then due and payable by the Lessee, the Owner Lessor will forthwith
transfer to the Lessee in accordance with this Section 18.1(g), and Section 5 of the Head Lease
on an “as is,” “where is” and “with all faults” basis, without representation or warranty other
than a warranty as to the absence of Owner Lessor’s Liens accompanied by a warranty of the Owner
Participant as to the absence of the Owner Participant’s Liens, all of its right, title and
interest in and to the Owner Lessor’s Interest and execute, acknowledge and deliver, and prepare
and file (as appropriate), appropriate releases and all other documents or instructions necessary
or desirable to effect the foregoing all in form and substance reasonably satisfactory to, and at
the cost and expense of, the Lessee, and upon payment of such amounts under this paragraph (g),
this Network Lease and the Lessee’s obligation to pay Basic Lease Rent hereunder due for any
periods subsequent to the date of such payment shall terminate; or

          (h) apply any amounts which are held by the Owner Lessor or the Lease Indenture Trustee under
Section 10.2(c) as security for the Lessee’s obligations hereunder against any amounts owed by the
Lessee hereunder or under any other Operative Document.

In addition, the Lessee shall be liable, except as otherwise provided above, for (i) any and all
unpaid Basic Lease Rent due hereunder before or during the exercise of any of the foregoing
remedies, and (ii) on an After-Tax Basis, for legal fees and other costs and expenses incurred by
reason of the occurrence of any Lease Event of Default or the exercise of the Owner Lessor’s
remedies with respect thereto (whether those remedies are exercised by the Owner Lessor, the Lease
Indenture Trustee or a designee of either), including the repayment in full of any costs and
expenses necessary to be expended in connection with the return of the Network in
accordance with Section 5 hereof, and any costs and expenses incurred by the Owner Lessor, the
Owner Participant, the Lease Indenture Trustee and the Pass Through Trustee in connection with
retaking constructive possession of, or in repairing, the Network in order to cause it to be in
compliance with all maintenance standards imposed by this Network Lease.

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For the limited purpose of permitting the Owner Lessor to exercise the remedies provided by
paragraphs (b), (c) or (d) of this Section 18.1 in circumstances where the Lessee shall not have
complied with its covenant set forth in paragraph (b) of this Section 18.1, (i) the Lessee grants
to the Owner Lessor the right to enter upon premises owned by the Lessee or in which the Lessee has
a possessory interest on which any Component of the Network is located, (ii) the Lessee appoints
the Owner Lessor as its agent for purposes of exercising its right to ingress and egress over any
property in which the Lessee holds a possessory interest on which any Component of the Network is
located and (iii) the Lessee appoints the Owner Lessor as its attorney-in-fact for purposes of
exercising a right of ingress and egress over any property in which the Lessee holds a possessory
interest on which any Component of the Network is located, in the case of clauses (i), (ii) and
(iii), to the fullest extent permitted by Applicable Law.

     Section 18.2 Cumulative Remedies. The remedies in this Network Lease provided in favor of the Owner
Lessor shall not be deemed exclusive, but shall be cumulative and shall be in addition to all other
remedies in its favor existing at law or in equity; and the exercise or beginning of exercise by
the Owner Lessor of any one or more of such remedies shall not, except as specifically provided in
this Section 18, preclude the simultaneous or later exercise by the Owner Lessor of any or all of
such other remedies. To the extent permitted by Applicable Law, the Lessee hereby waives any rights
now or hereafter conferred by statute or otherwise which may require the Owner Lessor to sell,
lease or otherwise use the Network or any Component thereof in mitigation of the Owner Lessor’s
damages as set forth in this Section 18 or which may otherwise limit or modify any of the Owner
Lessor’s rights and remedies in this Section 18.

     Section 18.3 No Delay or Omission to be Construed as Waiver. No delay or omission to exercise any
right, power or remedy accruing to the Owner Lessor upon any breach or default by the Lessee under
this Network Lease shall impair any such right, power or remedy of the Owner Lessor, nor shall any
such delay or omission be construed as a waiver of any breach or default, or of any similar breach
or default hereafter occurring; nor shall any waiver of a single breach or default be deemed a
waiver of any subsequent breach or default.

     Section 18.4 Rent Trueup. If the Network Lease is terminated pursuant to this Section 18, the Owner
Lessor has elected not to seek any payment from the Lessee under this Section 18 and has retained
the Owner Lessor’s Interest, or the calculation of amounts due under any provision of this Section
18 have not previously included an adjustment for Basic Lease Rent that has been paid but not yet
allocated or allocated but not yet paid, then the Lessee shall pay to the Owner Lessor as Basic
Lease Rent through (but not including) the date of such early termination the amount, if any, set
forth opposite the applicable Termination Date under the caption “Underpayment of Basic Lease
Rent” or the Owner Lessor shall pay to the Lessee as a refund of Basic Lease Rent through (but not
including) the date of such early termination the amount, if any, set forth opposite the applicable
Termination Date under the caption “Overpayment of Basic Lease Rent; provided, however, that the
Owner Lessor shall be entitled to set off its obligation to make any such refund
against any amount due from the Lessee hereunder.

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SECTION 19. SECURITY INTEREST AND INVESTMENT OF SECURITY FUNDS.

     Any moneys received by the Owner Lessor or the Lease Indenture Trustee pursuant to Section 10.2(c)
or 11.2 shall, until paid to the Lessee in accordance with such Section, be held by the Owner
Lessor or the Lease Indenture Trustee, as the case may be, as security for the Lessee’s obligations
under this Network Lease and be invested in Permitted Instruments by the Owner Lessor or the Lease
Indenture Trustee, as the case may be, at the sole risk of the Lessee, from time to time as
directed in writing by the Lessee if such instruments are reasonably available for purchase. Any
gain (including interest received) realized as the result of any such Permitted Instrument (net of
any fees, commissions, taxes and other expenses, if any, incurred in connection with such
Permitted Instrument) shall be applied or remitted to the Lessee in the same manner as the
principal invested.

SECTION 20. LESSEE’S RIGHT TO SUBLEASE; ASSIGNMENT

     Section 20.1 Right to Sublease. The Lessee shall have the right to sublease the Undivided Interest
or any part thereof and assign the Software Rights without the consent of the Owner Lessor, the
Owner Participant, the Lease Indenture Trustee or the Pass Through Trustee only under the following
conditions:

          (a) the sublessee is a solvent corporation, partnership, statutory or business trust, limited
liability company or other person or entity not then involved in a bankruptcy proceeding and that
is, or has engaged a third party that is, experienced in the operation of similar equipment;

          (b) the sublease does not extend beyond the scheduled expiration of the Network Lease Term
(and may be terminated upon early termination of this Network Lease) and is expressly subject and
subordinated to this Network Lease and the Head Lease and the Lien of the Lease Indenture;

          (c) all terms and conditions of this Network Lease and the other Operative Documents remain
in effect and the Lessee remains fully and primarily liable for its obligations under this Network
Lease and the other Operative Documents and the obligation to pay Basic Lease Rent under the
Network Lease retains the same priority of payment with respect to “Gross Power Revenues” (as
defined in the Bond Resolution) as it enjoyed prior to such sublease;

          (d) no Significant Lease Default or Lease Event of Default shall have occurred and be
continuing; and

          (e) the sublease prohibits further assignment or subletting.

     Section 20.2 Right to Assign. The Lessee shall have the right to assign its interest in this
Network Lease without the consent of the Owner Lessor, the Owner Participant, the Lease Indenture
Trustee or the Pass Through Trustee only under the following conditions:

          (a) the assignee is a solvent corporation, partnership, statutory or business trust, limited
liability company or other person or entity not then involved in a bankruptcy proceedings;

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          (b) the assignment does not extend beyond the scheduled expiration of the Network Lease Term
(and may be terminated upon early termination of this Network Lease) and is expressly subject and
subordinated to this Network Lease and the Head Lease and the Lien of the Lease Indenture;

          (c) all terms and conditions of this Network Lease and the other Operative Documents remain
in effect and the Lessee remains fully and primarily liable for its obligations under this Network
Lease and the other Operative Documents and the obligation to pay Basic Lease Rent under the
Network Lease retains the same priority of payment with respect to “Gross Power Revenues” (as
defined in the Bond Resolution) as it enjoyed prior to such assignment;

          (d) no Significant Lease Default or Lease Event of Default shall have occurred and be
continuing;

          (e) the assignment prohibits further assignment or subletting;

          (f) such assignment shall be pursuant to an assignment and assumption agreement in form and
substance reasonably satisfactory to the Owner Participant, the Owner Lessor and so long as the
Lien of the Lease Indenture shall not have been terminated or discharged, the Lease Indenture
Trustee; and

          (g) the Owner Participant, the Owner Lessor and, so long as the Lien of the Lease Indenture
shall not have been terminated or discharged, the Lease Indenture Trustee shall have received an
opinion of counsel, in form and substance reasonably satisfactory to each such recipient, as to
such assignment and assumption agreement.

     As a condition precedent to any sublease or assignment effected in accordance with this Section 20,
the Lessee shall pay, on an After-Tax Basis, all reasonable documented out-of-pocket expenses of
the Owner Lessor, the Owner Participant, the Lease Indenture Trustee and the Pass Through Trustee
in connection with such sublease.

     Section 20.3 Right to Assign or Sublease to Regional Transmission Organizations. The Lessee shall
have the right to sublease the Network or any portion thereof or assign its interest in this
Network Lease and other Operative Documents without the consent of the Owner Lessor, the Owner
Participant, the Lease Indenture Trustee or the Pass Through Trustee to any regional transmission
organization or other similar entity, but otherwise in compliance
with Section 20.1 or 20.2, as
appropriate, if required by the provisions of the arrangement, establishing or governing such
regional transmission organization or similar entity.

     Section 20.4 Operation. Notwithstanding any of the provisions contained in this Section 20 or
anywhere else in this Network Lease, the Lessee shall not be permitted to relocate or operate any
Component independent of the Network, whether pursuant to a sublease, assignment or otherwise,
except in respect of ordinary maintenance and repair of the Network in accordance with Section 7,
provided, however, (x) that the Network may be operated in its entirety by any such sublessee,
assignee, regional transmission organization or other entity and (y) any Component may be used by
any sublessee, assignee, regional transmission organization or other entity as part of a sharing
arrangement with the Lessee to provide monitoring, control and/or data analysis services to
Transmission Plant that is operated independent of any

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Transmission Plant currently serviced by the Network so long as (1) any such Component
continues to function as an integral part of the Network; and (2) such sharing arrangement with any
such Components does not diminish either the capability of the Network to perform the Network
Functions or the fair market value, estimated residual value, utility or useful life of the Network
in each case by more than a de minimis amount.

SECTION 21. OWNER LESSOR’S RIGHT TO PERFORM

     If the Lessee fails to make any payment required to be made by it hereunder or fails to perform or
comply with any of its other agreements contained herein after notice to the Lessee and failure of
the Lessee to so perform or comply within 10 days thereafter, the Owner Lessor or the Owner
Participant may itself make such payment or perform or comply with such agreement in a reasonable
manner, but shall not be obligated hereunder to do so, and the amount of such payment and of the
reasonable expenses of the Owner Lessor or the Owner Participant incurred in connection with such
payment or the performance of or compliance with such agreement, as the case may be, together with
interest thereon at the Overdue Rate, to the extent permitted by Applicable Law, shall be deemed to
be Supplemental Lease Rent, payable by the Lessee to the Owner Lessor on demand.

SECTION 22. SECURITY FOR OWNER LESSOR’S OBLIGATIONS TO THE LEASE INDENTURE TRUSTEE

     In order to secure the Lessor Note, the Owner Lessor will assign and grant a Lien to the Lease
Indenture Trustee in and to all of the Owner Lessor’s right, title and interest in, to and under
this Network Lease, and grant a security interest in favor of the Lease Indenture Trustee in all of
the Owner Lessor’s right, title and interest in and to the Owner Lessor’s Interest (other than
Excepted Payments and Excepted Rights). The Lessee hereby consents to such assignment and to the
creation of such Lien and security interest and acknowledges receipt of copies of the Lease
Indenture, it being understood that such consent shall not affect any requirement or the absence
of any requirement for any consent of the Lessee under any other circumstances. Unless and until
the Lessee shall have received written notice from the Lease Indenture Trustee that the Lien of the
Lease Indenture has been fully terminated, the Lease Indenture Trustee shall have the right to
exercise the rights of the Owner Lessor under this Network Lease to the extent set forth in and
subject in each case to the exceptions set forth in the Lease Indenture. TO THE EXTENT, IF ANY,
THAT THIS NETWORK LEASE CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM
COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS NETWORK
LEASE MAY BE CREATED THROUGH TOE TRANSFER OR POSSESSION OF ANY COUNTERPART HEREOF OTHER THAN THE
ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR
EXECUTED BY THE LEASE INDENTURE TRUSTEE ON THE SIGNATURE PAGE THEREOF.

SECTION 23. WAIVER OF RIGHT TO PARTITION

     So long as the Network or any part thereof as originally constructed, reconstructed or
added to is used or useful for the transmission of electrical power and energy, or to the end of
the

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period permitted by Applicable Law, whichever first occurs, the Owner Lessor waives its
right to partition whether by partition in kind or sale and division of the proceeds thereof, and
agrees that it will not resort to any action at law or in equity to partition and further waives
the benefit of all laws that may now or hereafter authorize such partition of the properties
comprising the Network. All instruments of conveyance which effect, evidence or vest the ownership
interest of the Owner Lessor in the Network shall contain this waiver of right to partition.

SECTION 24. MISCELLANEOUS

     Section 24.1 Amendments and Waivers. No term, covenant, agreement or condition of this Network
Lease may be terminated, amended or compliance therewith waived (either generally or in a
particular instance, retroactively or prospectively) except by an instrument or instruments in
writing executed by each party hereto.

     Section 24.2 Notices. Unless otherwise expressly specified or permitted by the terms hereof, all
communications and notices provided for herein to a party hereto shall be in writing or by a
telecommunications device capable of creating a written record, and any such notice shall become
effective (a) upon personal delivery thereof, including by overnight mail or courier service, (b) in
the case of notice by United States mail, certified or registered, postage prepaid, return receipt
requested, upon receipt thereof, or (c) in the case of notice by such a telecommunications device,
upon transmission thereof, provided such transmission is promptly confirmed by either of the
methods set forth in clauses (a) and (b) above, in each case addressed to such party and copy party
at its address set forth below or at such other address as such party or copy party may from time
to time designate by written notice to the other party:

     If to the Owner Lessor:

c/o Wells Fargo Delaware Trust Company

919 Market Street, Suite 700

Wilmington, DE 19801

Attention: Ann E. Roberts, Corporate Trust Services

Facsimile No.: (302)575-2006

Telephone No.: (302)575-2004

     with a copy to the Owner Participant:

Wachovia Mortgage Corporation

c/o Wachovia Securities

Postal Mailing Address:

One Wachovia Center

Mail Code NC0738

Charlotte, NC 28288-0738

Courier Address:

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301 South College Street, 18th Floor

Charlotte, NC 28202

Facsimile No.: (704) 383-1572

Telephone No.: (704) 715-7720

Attention: Ida Blake

and to the Lease Indenture Trustee:

Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-0001

Telephone No.: (302) 636-6000

Facsimile No.: (302) 636-4140

Attention: Corporate Trust Administration

and to the Pass Through Trustee:

Wilmington Trust Company

Rodney Square North

1100 North Market Street 
Wilmington, Delaware 19890-0001

Telephone No.: (302) 636-6000

Facsimile No.: (302) 636-4140

Attention: Corporate Trust Administration

If to the Lessee:

Tennessee Valley Authority

400 West Summit Hill Drive

Knoxville, Tennessee 37902

Telephone No.: (865) 632-3366

Facsimile No.: (865) 632-6673

Attention: Treasurer

     Section 24.3
Survival. Except for the provisions of Sections 3.3, 3.5, 5,
9 and 18, which shall
survive, the warranties and covenants made by each party hereto shall not survive the expiration or
termination of this Network Lease in accordance with its terms.

     Section 24.4 Successors and Assigns.

          (a) This Network Lease shall be binding upon and shall inure to the benefit of, and shall be
enforceable by, the parties hereto and their respective successors and assigns as permitted by and
in accordance with the terms hereof.

39

 

          (b) Except as expressly provided herein or in the other Operative Documents, neither party hereto
may assign its interests or transfer its obligations herein without the consent of the other party
hereto.

     Section 24.5 “True Lease “. This Network Lease shall constitute an agreement of lease and nothing
herein shall be construed as conveying to the Lessee any right, title or interest in or to the
Undivided Interest or the Software Rights except as lessee only.

     Section 24.6 Business Day. Notwithstanding anything herein to the contrary, if the date on which
any payment or performance is to be made pursuant to this Network Lease is not a Business Day, the
payment otherwise payable on such date shall be payable on the next succeeding Business Day with
the same force and effect as if made on such scheduled date and (provided that such payment is made
on such succeeding Business Day) no interest shall accrue on the amount of such payment from and
after such scheduled date to the time of such payment on such next succeeding Business Day.

     Section 24.7 Governing Law. This Network Lease shall be in all respects governed by and construed
in accordance with the laws of the State of New York, including all matters of construction,
validity and performance (without giving effect to the conflicts of laws provisions thereof, other
than New York General Obligations Law Section 5-1401), except to the extent inconsistent with
Federal law.

     Section 24.8 Severability. Any provision of this Network Lease that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.

     Section 24.9 Counterparts. This Network Lease may be executed by the parties hereto in separate
counterparts, each of which, subject to Section 22, when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the same instrument.

     Section 24.10 Headings and Table of Contents. The headings of the sections of this Network Lease
and the Table of Contents are inserted for purposes of convenience only and shall not be construed
to affect the meaning or construction of any of the provisions hereof.

     Section 24.11 Further Assurances. Each party hereto will promptly and duly execute and deliver such
further documents and assurances for and take such further action reasonably requested by the other
party, all as may be reasonably necessary to carry out more effectively the intent and purpose of
this Network Lease.

     Section 24.12 Effectiveness. This Network Lease has been dated as of the date first above written
for convenience only. This Network Lease shall be effective as of the date set forth on the
signature page hereto.

     Section 24.13 Owner Lessor Covenant. So long as this Network Lease shall remain in effect, the
Owner Lessor (or any successor thereto) hereby agrees and covenants to comply with

40

 

the
applicable provisions of 41 C.F.R. section 60-1.4, 41 C.F.R. section 60-250.4 and C.F.R.
section 60-741.5.

     Section 24.14 Limitation of Liability. It is expressly understood and agreed by the parties hereto
that (a) this Network Lease is executed and delivered by the Trust Company, not individually or
personally but solely as trustee of the Owner Lessor under the Trust Agreement, in the exercise of
the powers and authority conferred and vested in it pursuant thereto, (b) each of the
representations, undertakings and agreements herein made on the part of the Owner Lessor is made
and intended not as personal representations, undertakings and agreements by the Trust Company, but
is made and intended for the purpose for binding only the Owner Lessor, (c) nothing herein
contained shall be construed as creating any liability on the Trust Company, individually or
personally, to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto or by any Person claiming by,
through or under the parties hereto and (d) under no circumstances shall the Trust Company, be
personally liable for the payment of any indebtedness or expenses of the Owner Lessor or be liable
for the breach or failure of any obligation, representation, warranty or covenant made or
undertaken by the Owner Lessor under this Network Lease.

41

 

     IN WITNESS WHEREOF, the Owner Lessor and the Lessee have caused this Network Lease to be duly
executed and delivered under seal by their respective officers thereunto duly authorized on the
dates below their respective signatures, but effective as of September 26, 2003.

	 	 	 	 	 	 	 
	 	 	NVG NETWORK I STATUTORY TRUST	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Wells Fargo Delaware Trust
Company,

not in its individual capacity but solely

as Owner Trustee under the Trust Agreement	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Ann Roberts Dukart	 	 
	 

	 	 	 	 

Name: Ann Roberts Dukart
	 	 
	 

	 	 	 	Title: Vice President	 	 
	 
	 	 	TENNESSEE VALLEY AUTHORITY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ John M. Hoskins	 	 
	 

	 	 	 	 

Name: John M. Hoskins
	 	 
	 

	 	 	 	Title: Sr. V.P. & Treasurer	 	 

 

 

 

			
	*	 	Receipt of the original counterpart of the foregoing Network Lease is hereby acknowledged on this
26th day of September, 2003

	 	 	 	 	 	 	 
	 	 	WILMINGTON TRUST COMPANY, not in its	 	 
	 	 	individual capacity, but solely	 	 
	 	 	as Lease Indenture Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Ann Roberts Dukart	 	 
	 

	 	 	 	 

Name: Ann Roberts Dukart
	 	 
	 

	 	 	 	Title: Vice President	 	 

 

			
	*	 	This acknowledgment executed in the original counterpart only.

(Network
Lease (A1)

 

 

Schedule 1A to Network Lease

(NVG Network Statutory I Trust)

BASIC RENT PAYMENTS

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	               Rent	 	 	 	 
	Payment Date	 	Percentage	 
	Sep 26 2003
	 	 	0.00000000	%
	Dec 26 2003
	 	 	0.00000000	%
	Jan 15 2004
	 	 	8.93740892	%
	Jul 15 2004
	 	 	l.60834567	%
	Jan 15 2005
	 	 	3.67920324	%
	Jul 15 2005
	 	 	1.55730939	%
	Jan 15 2006
	 	 	3.73281866	%
	Jul 15 2006
	 	 	1.50369396	%
	Jan 15 2007
	 	 	4.13986616	%
	Jul 15 2007
	 	 	1.43872550	%
	Jan 15 2008
	 	 	3.85739524	%
	Jul 15 2008
	 	 	1.37911738	%
	Jan 15 2009
	 	 	3.92001568	%
	Jul 15 2009
	 	 	1.31649695	%
	Jan 15 2010
	 	 	3.98580067	%
	Jul 15 2010
	 	 	1.25071196	%
	Jan 15 2011
	 	 	4.04841949	%
	Jul 15 2011
	 	 	1.18809313	%
	Jan 15 2012
	 	 	4.09246477	%
	Jul 15 2012
	 	 	1.14404786	%
	Jan 15 2013
	 	 	4.14456066	%
	Jul 15 2013
	 	 	1.09195197	%
	Jan 25 2014
	 	 	4.22169313	%
	Jul 15 2014
	 	 	1.01481950	%
	Jan 15 2015
	 	 	5.31077824	%
	Jul 15 2015
	 	 	0.90894559	%
	Jan 15 2016
	 	 	5.60702056	%
	Jul 15 2016
	 	 	0.79316154	%
	Jan 15 2017
	 	 	5.72865582	%
	Jul 15 2017
	 	 	0.67152628	%
	Jan 15 2018
	 	 	5.85643797	%
	Jul 15 2018
	 	 	0.54374413	%
	Jan 15 2019
	 	 	5.99067764	%
	Jul 15 2019
	 	 	0.40950445	%
	Jan 15 2020
	 	 	6.08017600	%
	Jul 15 2020
	 	 	0.32000610	%
	Jan 15 2021
	 	 	6.17475420	%
	Jul 15 2021
	 	 	0.22542789	%
	Jan 15 2022
	 	 	6.17475420	%
	Jul 15 2022
	 	 	0.22542789	%
	Jan 15 2023
	 	 	6.17475420	%
	Jul 15 2023
	 	 	0.22542789	%
	Jan 15 2024
	 	 	6.17475420	%
	Jul 15 2024
	 	 	0.22542789	%
	Jan 15 2025
	 	 	6.28686613	%
	Jul 15 2025
	 	 	0.11331596	%
	Jan 15 2026
	 	 	4.71124516	%
	Jul 15 2026
	 	 	0.00000000	%
	Jan 15 2027
	 	 	0.00000000	%
	Jul 15 2027
	 	 	0.00000000	%
	Sep 26 2027
	 	 	0.00000000	%

 

 

Schedule 1
B to Network Lease

(NVG Network Statutory I Trust)

ALLOCATED RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	From and	 	To and	 	Basic Rent	 
	Including	 	Including	 	Allocated	 
	Sep 26 2003
	 	Dec 25 2003	 	 	0.00000000	%
	Dec 26 2003
	 	Jan 14 2004	 	 	0.27637150	%
	Jan 15 2004
	 	Jul 14 2004	 	 	0.00000000	%
	Jul 15 2004
	 	Jan 14 2005	 	 	5.45732942	%
	Jan 15 2005
	 	Jul 14  2005	 	 	4.81205367	%
	Jul 15 2005
	 	Jan 14 2006	 	 	0.00000000	%
	Jan 15 2006
	 	Jul 14 2006	 	 	5.23651263	%
	Jul 15 2006
	 	Jan 14 2007	 	 	0.00000000	%
	Jan 15 2007
	 	Jul 14 2007	 	 	0.00000000	%
	Jul 15 2007
	 	Jan 14 2008	 	 	5.67814622	%
	Jan 15 2008
	 	Jul 14 2008	 	 	5.13695806	%
	Jul 15 2008
	 	Jan 14 2009	 	 	0.00000000	%
	Jan 15 2009
	 	Jul 14 2009	 	 	0.00000000	%
	Jul 15 2009
	 	Jan 14 2010	 	 	5.67814622	%
	Jan 15 2010
	 	Jul 14 2010	 	 	4.79487903	%
	Jul 15 2010
	 	Jan 14 2011	 	 	0.00000000	%
	Jan 15 2011
	 	Jul 14 2011	 	 	0.00000000	%
	Jul 15 2011
	 	Jan 14 2012	 	 	5.67814622	%
	Jan 15 2012
	 	Jul 14 2012	 	 	4.79487903	%
	Jul 15 2012
	 	Jan 14 2013	 	 	0.00000000	%
	Jan 15 2013
	 	Jul 14 2013	 	 	0.00000000	%
	Jul 15 2013
	 	Jan 14 2014	 	 	5.67814622	%
	Jan 15 2014
	 	Jul 14 2014	 	 	4.79487903	%
	Jul 15 2014
	 	Jan 14 2015	 	 	0.00000000	%
	Jan 15 2015
	 	Jul 14 2015	 	 	0.00000000	%
	Jul 15 2015
	 	Jan 14 2016	 	 	5.67814622	%
	Jan 15 2016
	 	Jul 14 2016	 	 	5.77809023	%
	Jul 15 2016
	 	Jan 14 2017	 	 	0.00000000	%
	Jan 15 2017
	 	Jul 14 2017	 	 	0.00000000	%
	Jul 15 2017
	 	Jan 14 2018	 	 	6.93995649	%
	Jan 15 2018
	 	Jul 14 2018	 	 	5.86040770	%
	Jul 15 2018
	 	Jan 14 2019	 	 	0.00000000	%
	Jan 15 2019
	 	Jul 14 2019	 	 	0.00000000	%
	Jul 15 2019
	 	Jan 14 2020	 	 	6.93995649	%
	Jan 15 2020
	 	Jul 14 2020	 	 	5.86040770	%
	Jul 15 2020
	 	Jan 14 2021	 	 	0.00000000	%
	Jan 15 2021
	 	Jul 14 2021	 	 	0.00000000	%
	Jul 15 2021
	 	Jan 14 2022	 	 	6.93995649	%
	Jan 15 2022
	 	Jul 14 2022	 	 	5.86040770	%
	Jul 15 2022
	 	Jan 14 2023	 	 	0.00000000	%
	Jan 15 2023
	 	Jul 14 2023	 	 	0.00000000	%
	Jul 15 2023
	 	Jan 14 2024	 	 	6.93995649	%
	Jan 15 2024
	 	Jul 14 2024	 	 	5.86040770	%
	Jul 15 2024
	 	Jan 14 2025	 	 	0.00000000	%
	Jan 15 2025
	 	Jul 14 2025	 	 	6.40018210	%
	Jul 15 2025
	 	Jan 14 2026	 	 	0.00000000	%
	Jan 15 2026
	 	Jul 14 2026	 	 	6.40018210	%
	Jul 15 2026
	 	Jan 14 2027	 	 	0.00000000	%
	Jan 15 2027
	 	Jul 14 2027	 	 	4.71124516	%
	Jul 15 2027
	 	Sep 26 2027	 	 	0.00000000	%

 

 

Schedule 1C to Network Lease

(NVG Network Statutory I Trust)

ATTRIBUTION
OF BASIC LEASE RENT PAYMENTS TO
ALLOCATIONS
OF BASIC LEASE RENT

(Percentages are
percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Allocated	 	 	Allocated	 
	Rent Payment Date	 	Basic Lease Rent	 	 	From and Including	 	 	To and Including	 
	Sep 26 2003
	 	 	0.00000000	%	 	 	 	 	 	 	 	 
	Dec 26 2003
	 	 	0.00000000	%	 	 	 	 	 	 	 	 
	Jan 15 2004
	 	 	8.93740892	%	 	Dec 26 2003	 	Jul 14 2005
	Jul 15 2004
	 	 	1.60834567	%	 	Jan 15 2005	 	Jul 14 2005
	Jan 15 2005
	 	 	3.67920324	%	 	Jan 15 2006	 	Jul 14 2006
	Jul 15 2005
	 	 	1.55730939	%	 	Jan 15 2006	 	Jul 14 2006
	Jan 15 2006
	 	 	3.73281866	%	 	Jul 15 2007	 	Jan 14 2008
	Jul 15 2006
	 	 	1.50369396	%	 	Jul 15 2007	 	Jan 14 2008
	Jan 15 2007
	 	 	4.13986616	%	 	Jul 15 2007	 	Jul 14 2008
	Jul 15 2007
	 	 	1.43872550	%	 	Jan 15 2008	 	Jul 14 2008
	Jan 15 2008
	 	 	3.85739524	%	 	Jul 15 2009	 	Jan 14 2010
	Jul 15 2008
	 	 	1.37911738	%	 	Jul 15  2009	 	Jan 14 2010
	Jan 15 2009
	 	 	3.92001568	%	 	Jul 15 2009	 	Jul 14 2010
	Jul 15 2009
	 	 	1.31649695	%	 	Jan 15 2010	 	Jul 14 2010
	Jan 15 2010
	 	 	3.98580067	%	 	Jul 15 2011	 	Jan 14 2012
	Jul 15 2010
	 	 	1.25071196	%	 	Jul 15 2011	 	Jan 14 2012
	Jan 15 2011
	 	 	4.04841949	%	 	Jul 15 2011	 	Jul 14 2012
	Jul 15 2011
	 	 	1.18809313	%	 	Jan 15 2012	 	Jul 14 2012
	Jan 15 2012
	 	 	4.09246477	%	 	Jul 15 2013	 	Jan 14 2014
	Jul 15 2012
	 	 	1.14404786	%	 	Jul 15 2013	 	Jan 14 2014
	Jan 15 2013
	 	 	4.14456066	%	 	Jul 15 2013	 	Jul 14 2014
	Jul 15 2013
	 	 	1.09195197	%	 	Jan 15 2014	 	Jul 14 2014
	Jan 15 2014
	 	 	4.22169313	%	 	Jul 15 2015	 	Jan 14 2016
	Jul 15 2014
	 	 	1.01481950	%	 	Jul 15 2015	 	Jan 14 20l6
	Jan 15 2015
	 	 	5.31077824	%	 	Jul 15 2015	 	Jul 14 2016
	Jul 15 2015
	 	 	0.90894559	%	 	Jan 15 2016	 	Jul 14 2016
	Jan 15 2016
	 	 	5.60702056	%	 	Jul 15  2017	 	Jan 14 2018
	Jul 15 2016
	 	 	0.79316154	%	 	Jul 15 2017	 	Jan 14 2018
	Jan 15 2017
	 	 	5.72865582	%	 	Jul 15 2017	 	Jul 14 2018
	Jul 15 2017
	 	 	0.67152628	%	 	Jan 15 2018	 	Jul 14 2018
	Jan 15 2018
	 	 	5.85643797	%	 	Jul 15 2019	 	Jan 14 2020
	Jul 15 2018
	 	 	0.54374413	%	 	Jul 15 2019	 	Jan 14 2020
	Jan 15 2019
	 	 	5.99067764	%	 	Jul 15 2019	 	Jul 14 2020
	Jul 15 2019
	 	 	0.40950445	%	 	Jan 15 2020	 	Jul 14 2020
	Jan 15 2020
	 	 	6.08017600	%	 	Jul 15 2021	 	Jan 14 2022
	Jul 15 2020
	 	 	0.32000610	%	 	Jul 15  2021	 	Jan 14 2022
	Jan 15 2021
	 	 	6.17475420	%	 	Jul 15 2021	 	Jul 14 2022
	Jul 15 2021
	 	 	0.22542789	%	 	Jan 15 2022	 	Jul 14 2022
	Jan 15 2022
	 	 	6.17475420	%	 	Jul 15 2023	 	Jan 14 2024
	Jul 15 2022
	 	 	0.22542789	%	 	Jul 15 2023	 	Jan 14 2024
	Jan 15 2023
	 	 	6.17475420	%	 	Jul  15 2023	 	Jul 14 2024
	Jul 15 2023
	 	 	0.22542789	%	 	Jan 15 2024	 	Jul 14 2024
	Jan 15 2024
	 	 	6.17475420	%	 	Jan 15 2025	 	Jul  14 2025
	Jul 15 2024
	 	 	0.22542789	%	 	Jan 15 2025	 	Jul 14 2025
	Jan 15 2025
	 	 	6.28686613	%	 	Jan 15 2026	 	Jul 14 2026
	Jul 15 2025
	 	 	0.11331596	%	 	Jan 15 2026	 	Jul 14 2026
	Jan 15 2026
	 	 	4.71124516	%	 	Jan 15 2027	 	Jul 14 2027
	Jul 15 2026
	 	 	0.00000000	%	 	 	 	 	 	 	 	 
	Jan 15 2027
	 	 	0.00000000	%	 	 	 	 	 	 	 	 
	Jul 15 2027
	 	 	0.00000000	%	 	 	 	 	 	 	 	 
	Sep 26 2027
	 	 	0.00000000	%	 	 	 	 	 	 	 	 

 

 

Schedule 1
D to Nework Lease

(NVG Network Statutory I Trust)

OVERPAYMENTS AND UNDERPAYMENTS

OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
		 	(b)	 	 	(c)	 
	(a)	 	Underpayment	 	 	Overpayment	 
	Termination Date	 	of Basic Lease Rent	 	 	of Basic Lease Rent	 
	Dec 26 2003
	 	 	0.00000000	%	 	 	0.00000000	%
	Jan 15 2004
	 	 	0.27637150	%	 	 	0.00000000	%
	Feb 15 2004
	 	 	0.00000000	%	 	 	8.66103742	%
	Mar 15 2004
	 	 	0.00000000	%	 	 	8.66103742	%
	Apr 15 2004
	 	 	0.00000000	%	 	 	8.66103742	%
	May 15 2004
	 	 	0.00000000	%	 	 	8.66103742	%
	Jun 15 2004
	 	 	0.00000000	%	 	 	8.66103742	%
	Jul 15 2004
	 	 	0.00000000	%	 	 	8.66103742	%
	Aug 15 2004
	 	 	0.00000000	%	 	 	9.35982819	%
	Sep 15 2004
	 	 	0.00000000	%	 	 	8.45027329	%
	Oct 15 2004
	 	 	0.00000000	%	 	 	7.54071838	%
	Nov 15 2004
	 	 	0.00000000	%	 	 	6.63116348	%
	Dec 15 2004
	 	 	0.00000000	%	 	 	5.72160857	%
	Jan 15 2005
	 	 	0.00000000	%	 	 	4.81205367	%
	Feb 15 2005
	 	 	0.00000000	%	 	 	7.68924796	%
	Mar 15 2005
	 	 	0.00000000	%	 	 	6.88723902	%
	Apr 15 2005
	 	 	0.00000000	%	 	 	6.08523007	%
	May 15 2005
	 	 	0.00000000	%	 	 	5.28322113	%
	Jun 15 2005
	 	 	0.00000000	%	 	 	4.48121218	%
	Jul 15 2005
	 	 	0.00000000	%	 	 	3.67920324	%
	Aug 15 2005
	 	 	0.00000000	%	 	 	5.23651263	%
	Sep 15 2005
	 	 	0.00000000	%	 	 	5.23651263	%
	Oct 15 2005
	 	 	0.00000000	%	 	 	5.23651263	%
	Nov 15 2005
	 	 	0.00000000	%	 	 	5.23651263	%
	Dec 15 2005
	 	 	0.00000000	%	 	 	5.23651263	%
	Jan 15 2006
	 	 	0.00000000	%	 	 	5.23651263	%
	Feb 15 2006
	 	 	0.00000000	%	 	 	8.09657918	%
	Mar 15 2006
	 	 	0.00000000	%	 	 	7.22382708	%
	Apr 15 2006
	 	 	0.00000000	%	 	 	6.35107497	%
	May 15 2006
	 	 	0.00000000	%	 	 	5.47832287	%
	Jun 15 2006
	 	 	0.00000000	%	 	 	4.60557077	%
	Jul 15 2006
	 	 	0.00000000	%	 	 	3.73281866	%
	Aug 15 2006
	 	 	0.00000000	%	 	 	5.23651263	%
	Sep l5 2006
	 	 	0.00000000	%	 	 	5.23651263	%
	Oct 15 2006
	 	 	0.00000000	%	 	 	5.23651263	%
	Nov 15 2006
	 	 	0.00000000	%	 	 	5.23651263	%
	Dec 15 2006
	 	 	0.00000000	%	 	 	5.23651263	%
	Jan 15 2007
	 	 	0.00000000	%	 	 	5.23651263	%
	Feb 15 2007
	 	 	0.00000000	%	 	 	9.37637878	%
	Mar 15 2007
	 	 	0.00000000	%	 	 	9.37637878	%
	Apr 15 2007
	 	 	0.00000000	%	 	 	9.37637878	%
	May 15 2007
	 	 	0.00000000	%	 	 	9.37637878	%
	Jun 15 2007
	 	 	0.00000000	%	 	 	9.37637878	%
	Jul 15 2007
	 	 	0.00000000	%	 	 	9.37637878	%
	Aug 15 2007
	 	 	0.00000000	%	 	 	9.86874658	%
	Sep 15 2007
	 	 	0.00000000	%	 	 	8.92238887	%
	Oct 15 2007
	 	 	0.00000000	%	 	 	7.97603117	%
	Nov 15 2007
	 	 	0.00000000	%	 	 	7.02967347	%
	Dec 15 2007
	 	 	0.00000000	%	 	 	6.08331576	%
	Jan 15 2008
	 	 	0.00000000	%	 	 	5.13695806	%
	Feb 15 2008
	 	 	0.00000000	%	 	 	8.13819362	%
	Mar 15 2008
	 	 	0.00000000	%	 	 	7.28203395	%
	Apr 15 2008
	 	 	0.00000000	%	 	 	6.42587427	%
	May 15 2008
	 	 	0.00000000	%	 	 	5.56971459	%
	Jun 15 2008
	 	 	0.00000000	%	 	 	4.71355492	%
	Jul 15 2008
	 	 	0.00000000	%	 	 	3.85739524	%
	Aug 15 2008
	 	 	0.00000000	%	 	 	5.23651263	%
	Sep 15 2008
	 	 	0.00000000	%	 	 	5.23651263	%
	Oct 15 2008
	 	 	0.00000000	%	 	 	5.23651263	%
	Nov 15 2008
	 	 	0.00000000	%	 	 	5.23651263	%
	Dec 15 2008
	 	 	0.00000000	%	 	 	5.23651263	%
	Jan 15 2009
	 	 	0.00000000	%	 	 	5.23651263	%
	Feb 15 2009
	 	 	0.00000000	%	 	 	9.15652831	%
	Mar 15 2009
	 	 	0.00000000	%	 	 	9.15652831	%

 

 

Schedule 1D to Network Lease

(NVG Network Statutory I Trust)

OVERPAYMENTS AND UNDERPAYMENTS

OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	 	 	(b)	 	 	(c)	 
	(a)	 	Underpayment	 	 	Overpayment	 
	Termination Date	 	of Basic Lease Rent	 	 	of Basic Lease Rent	 
	Apr 15 2009
	 	 	0.00000000	%	 	 	9.15652831	%
	May 15 2009
	 	 	0.00000000	%	 	 	9.15652831	%
	Jun 15 2009
	 	 	0.00000000	%	 	 	9.15652831	%
	Jul 15 2009
	 	 	0.00000000	%	 	 	9.15652831	%
	Aug l5 2009
	 	 	0.00000000	%	 	 	9.52666755	%
	Sep 15 2009
	 	 	0.00000000	%	 	 	8.58030984	%
	Oct 15 2009
	 	 	0.00000000	%	 	 	7.63395214	%
	Nov 15 2009
	 	 	0.00000000	%	 	 	6.68759444	%
	Dec 15 2009
	 	 	0.00000000	%	 	 	5.74123673	%
	Jan 15 2010
	 	 	0.00000000	%	 	 	4.79487903	%
	Feb 15 2010
	 	 	0.00000000	%	 	 	7.98153320	%
	Mar 15 2010
	 	 	0.00000000	%	 	 	7.18238669	%
	Apr 15 2010
	 	 	0.00000000	%	 	 	6.38324019	%
	May 15 2010
	 	 	0.00000000	%	 	 	5.58409368	%
	Jun 15 2010
	 	 	0.00000000	%	 	 	4.78494718	%
	Jul 15 2010
	 	 	0.00000000	%	 	 	3.98580067	%
	Aug 15 2010
	 	 	0.00000000	%	 	 	5.23651263	%
	Sep 15 2010
	 	 	0.00000000	%	 	 	5.23651263	%
	Oct 15 2010
	 	 	0.00000000	%	 	 	5.23651263	%
	Nov 15 2010
	 	 	0.00000000	%	 	 	5.23651263	%
	Dec 15 2010
	 	 	0.00000000	%	 	 	5.23251263	%
	Jan 15 2011
	 	 	0.00000000	%	 	 	5.23651263	%
	Feb 15 2011
	 	 	0.00000000	%	 	 	9.28493212	%
	Mar 15 2011
	 	 	0.00000000	%	 	 	9.28493212	%
	Apr 15 2011
	 	 	0.00000000	%	 	 	9.28493212	%
	May 15 2011
	 	 	0.00000000	%	 	 	9.28493212	%
	Jun 15 201l
	 	 	0.00000000	%	 	 	9.28493212	%
	Jul 15 2011
	 	 	0.00000000	%	 	 	9.28493212	%
	Aug 15 2011
	 	 	0.00000000	%	 	 	9.52666755	%
	Sep 15 2011
	 	 	0.00000000	%	 	 	8.58030984	%
	Oct 15 2011
	 	 	0.00000000	%	 	 	7.63395214	%
	Nov 15 2011
	 	 	0.00000000	%	 	 	6.68759444	%
	Dec 15 2011
	 	 	0.00000000	%	 	 	5.74123673	%
	Jan 15 2012
	 	 	0.00000000	%	 	 	4.79487903	%
	Feb 15 2012
	 	 	0.00000000	%	 	 	8.08819729	%
	Mar 15 2012
	 	 	0.00000000	%	 	 	7.28905079	%
	Apr 15 2012
	 	 	0.00000000	%	 	 	6.48990428	%
	May 15 2012
	 	 	0.00000000	%	 	 	5.69075778	%
	Jun 15 2012
	 	 	0.00000000	%	 	 	4.89161127	%
	Jul 15 2012
	 	 	0.00000000	%	 	 	4.09246477	%
	Aug 15 2012
	 	 	0.00000000	%	 	 	5.23651263	%
	Sep 15 2012
	 	 	0.00000000	%	 	 	5.23651263	%
	Oct 15 2012
	 	 	0.00000000	%	 	 	5.23651263	%
	Nov 15 2012
	 	 	0.00000000	%	 	 	5.23651263	%
	Dec 15 2012
	 	 	0.00000000	%	 	 	5.23651263	%
	Jan 15 2013
	 	 	0.00000000	%	 	 	5.23651263	%
	Feb 15 2013
	 	 	0.00000000	%	 	 	9.38107328	%
	Mar 15 2013
	 	 	0.00000000	%	 	 	9.38107328	%
	Apr 15 2013
	 	 	0.00000000	%	 	 	9.38107328	%
	May 13 2013
	 	 	0.00000000	%	 	 	9.38107328	%
	Jun 15 2013
	 	 	0.00000000	%	 	 	9.38107328	%
	Jul 15 2013
	 	 	0.00000000	%	 	 	9.38107328	%
	Aug 15 2013
	 	 	0.00000000	%	 	 	9.52666755	%
	Sep l5 2013
	 	 	0.00000000	%	 	 	8.58030984	%
	Oct 15 2013
	 	 	0.00000000	%	 	 	7.63395214	%
	Nov 15 2013
	 	 	0.00000000	%	 	 	6.68759444	%
	Dec 15 2013
	 	 	0.00000000	%	 	 	5.74123673	%
	Jan 15 2014
	 	 	0.00000000	%	 	 	4.79487903	%
	Feb 15 2014
	 	 	0.00000000	%	 	 	8.21742565	%
	Mar 15 2014
	 	 	0.00000000	%	 	 	7.41827915	%
	Apr 15 2014
	 	 	0.00000000	%	 	 	6.61913264	%
	May 15 2014
	 	 	0.00000000	%	 	 	5.81998614	%
	Jun l5 2014
	 	 	0.00000000	%	 	 	5.02083963	%
	Jul 15 2014
	 	 	0.00000000	%	 	 	4.22169313	%

 

 

Schedule 1D to Network Lease

(NVG Network Statutory I Trust)

OVERPAYMENTS AND UNDERPAYMENTS

OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	 	 	(b)	 	 	(c)	 
	(a)	 	Underpayment	 	 	Overpayment	 
	Termination Date	 	of Basic Lease Rent	 	 	of Basic Lease Rent	 
	Aug 15 2014
	 	 	0.00000000	%	 	 	5.23651263	%
	Sep 15 2014
	 	 	0.00000000	%	 	 	5.23651263	%
	Oct 15 2014
	 	 	0.00000000	%	 	 	5.23651263	%
	Nov 15 2014
	 	 	0.00000000	%	 	 	5.23651263	%
	Dec 15 2014
	 	 	0.00000000	%	 	 	5.23651263	%
	Jan 15 2015
	 	 	0.00000000	%	 	 	5.23651263	%
	Feb 15 2015
	 	 	0.00000000	%	 	 	10.54729086	%
	Mar 15 2015
	 	 	0.00000009	%	 	 	10.54729086	%
	Apr 15 2015
	 	 	0.00000000	%	 	 	10.54729086	%
	May 15 2015
	 	 	0.00000000	%	 	 	10.54729086	%
	Jun 15 2015
	 	 	0.00000000	%	 	 	10.54729086	%
	Jul 15 2015
	 	 	0.00000000	%	 	 	10.54729086	%
	Aug 15 2015
	 	 	0.00000000	%	 	 	10.50987875	%
	Sep l5 2015
	 	 	0.00000000	%	 	 	9.56352105	%
	Oct 15 2015
	 	 	0.00000000	%	 	 	8.61716334	%
	Nov 15 2015
	 	 	0.00000000	%	 	 	7.67080564	%
	Dec 15 2015
	 	 	0.00000000	%	 	 	6.72444794	%
	Jan 15 2016
	 	 	0.00000000	%	 	 	5.77809023	%
	Feb 15 2016
	 	 	0.00000000	%	 	 	10.42209576	%
	Mar 15 2016
	 	 	0.00000000	%	 	 	9.45908072	%
	Apr 15 2016
	 	 	0.00000000	%	 	 	8.49606568	%
	May 15 2016
	 	 	0.00000000	%	 	 	7.53305064	%
	Jun 15 20l6
	 	 	0.00000000	%	 	 	6.57003560	%
	Jul 15 2016
	 	 	0.00000000	%	 	 	5.60702056	%
	Aug 15 2016
	 	 	0.00000000	%	 	 	6.40018210	%
	Sep 15 2016
	 	 	0.00000000	%	 	 	6.40018210	%
	Oct 15 2016
	 	 	0.00000000	%	 	 	6.40018210	%
	Nov 15 2016
	 	 	0.00000000	%	 	 	6.400182 10	%
	Dec 15 2016
	 	 	0.00000000	%	 	 	6.40018210	%
	Jan 15 2017
	 	 	0.00000000	%	 	 	6.40018210	%
	Feb 15 2017
	 	 	0.00000000	%	 	 	12.12883792	%
	Mar 15 2017
	 	 	0.00000000	%	 	 	12.12883792	%
	Apr 15 2017
	 	 	0.00000000	%	 	 	12.12883792	%
	May 15 2017
	 	 	0.00000000	%	 	 	12.12883792	%
	Jun 15 2017
	 	 	0.00000000	%	 	 	12.12883792	%
	Jul 15 2017
	 	 	0.00000000	%	 	 	12.12883792	%
	Aug 15 2017
	 	 	0.00000000	%	 	 	11.64370478	%
	Sep 15 2017
	 	 	9.00000000	%	 	 	10.48704537	%
	Oct 15 2017
	 	 	0.00000000	%	 	 	9.33038595	%
	Nov 15 2017
	 	 	0.00000000	%	 	 	8.17372653	%
	Dec 15 2017
	 	 	0.00000000	%	 	 	7.01706712	%
	Jan 15 2018
	 	 	0.00000000	%	 	 	5.86040770	%
	Feb 15 2018
	 	 	0.00000000	%	 	 	10.74011105	%
	Mar 15 2018
	 	 	0.00000000	%	 	 	9.76337644	%
	Apr 15 2018
	 	 	0.00000000	%	 	 	8.78664182	%
	May 15 2018
	 	 	0.00000000	%	 	 	7.80990720	%
	Jun l5 2018
	 	 	0.00000000	%	 	 	6.83317258	%
	Jul 15 2018
	 	 	0.00000000	%	 	 	5.85643797	%
	Aug 15 2018
	 	 	0.00000000	%	 	 	6.40018210	%
	Sep l5 2018
	 	 	0.00000000	%	 	 	6.40018210	%
	Oct 15 2018
	 	 	0.00000000	%	 	 	6.40018210	%
	Nov 15 2018
	 	 	0.00000000	%	 	 	6.40018210	%
	Dec 15 2018
	 	 	0.00000000	%	 	 	6.40018210	%
	Jan 15 2019
	 	 	0.00000000	%	 	 	6.40018210	%
	Feb 15 2019
	 	 	0.00000000	%	 	 	12.39085974	%
	Mar 15 2019
	 	 	0.00000000	%	 	 	12.39085974	%
	Apr 15 2019
	 	 	0.00000000	%	 	 	12.39085974	%
	May 15 2019
	 	 	0.00000000	%	 	 	12.39085974	%
	Jun 15 2019
	 	 	0.00000000	%	 	 	12.39085974	%
	Jul 15 2019
	 	 	0.00000000	%	 	 	12.39085974	%
	Aug 15 2019
	 	 	0.00000000	%	 	 	11.64370478	%
	Sep 15 2019
	 	 	0.00000000	%	 	 	10.48704537	%
	Oct 15 2019
	 	 	0.00000000	%	 	 	9.33038595	%
	Nov 15 2019
	 	 	0.00000000	%	 	 	8.17372653	%

 

 

Schedule ID to Network Lease

(NVG Network Statutory I Trust)

OVERPAYMENTS AND UNDERPAYMENTS

OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	(a)	 	(b)	 	 	(c)	 
	 	 	Underpayment	 	 	Overpayment	 
	Termination Date	 	of Basic Lease Rent	 	 	of Basic Lease Rent	 
	Dec 15 2019
	 	 	0.00000000	%	 	 	7.01706712	%
	Jan 15 2020
	 	 	0.00000000	%	 	 	5.86040770	%
	Feb 15 2020
	 	 	0.00000000	%	 	 	10.96384909	%
	Mar 15 2020
	 	 	0.00000000	%	 	 	9.98711447	%
	Apr 15 2020
	 	 	0.00000000	%	 	 	9.01037985	%
	May 15 2020
	 	 	0.00000000	%	 	 	8.03364523	%
	Jun 15 2020
	 	 	0.00000000	%	 	 	7.05691062	%
	Jul 15 2020
	 	 	0.00000000	%	 	 	6.08017600	%
	Aug 15 2020
	 	 	0.00000000	%	 	 	6.40018210	%
	Sep 15 2020
	 	 	0.00000000	%	 	 	6.40018210	%
	Oct 15 2020
	 	 	0.00000000	%	 	 	6.40018210	%
	Nov 15 2020
	 	 	0.00000000	%	 	 	6.40018210	%
	Dec 15 2020
	 	 	0.00000000	%	 	 	6.40018210	%
	Jan 15 2021
	 	 	0.00000000	%	 	 	6.40018210	%
	Feb 15 2021
	 	 	0.00000000	%	 	 	12.57493630	%
	Mar 15 2021
	 	 	0.00000000	%	 	 	12.57493630	%
	Apr 15 2021
	 	 	0.00000000	%	 	 	12.57493630	%
	May 15 2021
	 	 	0.00000000	%	 	 	12.57493630	%
	Jun 15 2021
	 	 	0.00000000	%	 	 	12.57493630	%
	Jul 15 2021
	 	 	0.00000000	%	 	 	12.57493630	%
	Aug 15 2021
	 	 	0.00000000	%	 	 	11.64370478	%
	Sep 15 2021
	 	 	0.00000000	%	 	 	10.48704537	%
	Oct 15 2021
	 	 	0.00000000	%	 	 	9.33038595	%
	Nov 15 2021
	 	 	0.00000000	%	 	 	8.17372653	%
	Dec 15 2021
	 	 	0.00000000	%	 	 	7.01706712	%
	Jan 15 2022
	 	 	0.00000000	%	 	 	5.86040770	%
	Feb 15 2022
	 	 	0.00000000	%	 	 	11.05842729	%
	Mar 15 2022
	 	 	0.00000000	%	 	 	10.08169267	%
	Apr 15 2022
	 	 	0.00000000	%	 	 	9.10495806	%
	May 15 2022
	 	 	0.00000000	%	 	 	8.12822344	%
	Jun 15 2022
	 	 	0.00000000	%	 	 	7.15148882	%
	Jul 15 2022
	 	 	0.00000000	%	 	 	6.17475420	%
	Aug 15 2022
	 	 	0.00000000	%	 	 	6.40018210	%
	Sep 15 2022
	 	 	0.00000000	%	 	 	6.40018210	%
	Oct 15 2022
	 	 	0.00000000	%	 	 	6.40018210	%
	Nov 15 2022
	 	 	0.00000000	%	 	 	6.40018210	%
	Dec 15 2022
	 	 	0.00000000	%	 	 	6.40018210	%
	Jan 15 2023
	 	 	0.00000000	%	 	 	6.40018210	%
	Feb 15 2023
	 	 	0.00000000	%	 	 	12.57493630	%
	Mar 15 2023
	 	 	0.00000000	%	 	 	12.57493630	%
	Apr 15 2023
	 	 	0.00000000	%	 	 	12.57493630	%
	May 15 2023
	 	 	0.00000000	%	 	 	12.57493630	%
	Jun 15 2023
	 	 	0.00000000	%	 	 	12.57493630	%
	Jul 15 2023
	 	 	0.00000000	%	 	 	12.57493630	%
	Aug 15 2023
	 	 	0.00000000	%	 	 	11.64370478	%
	Sep 15 2023
	 	 	0.00000000	%	 	 	10.48704537	%
	Oct 15 2023
	 	 	0.00000000	%	 	 	9.33038595	%
	Nov 15 2023
	 	 	0.00000000	%	 	 	8.17372653	%
	Dec l5 2023
	 	 	0.00000000	%	 	 	7.01706712	%
	Jan 15 2024
	 	 	0.00000000	%	 	 	5.86040770	%
	Feb 15 2024
	 	 	0.00000000	%	 	 	11.05842729	%
	Mar 15 2024
	 	 	0.00000000	%	 	 	10.08169267	%
	Apr 15 2024
	 	 	0.00000000	%	 	 	9.10495806	%
	May 15 2024
	 	 	0.00000000	%	 	 	8.12822344	%
	Jun 15 2024
	 	 	0.00000000	%	 	 	7.15148882	%
	Jul 15 2024
	 	 	0.00000000	%	 	 	6.17475420	%
	Aug 15 2024
	 	 	0.00000000	%	 	 	6.40018210	%
	Sep 15 2024
	 	 	0.00000000	%	 	 	6.40018210	%
	Oct 15 2024
	 	 	0.00000000	%	 	 	6.40016210	%
	Nov 15 2024
	 	 	0.00000000	%	 	 	6.40018210	%
	Dec 15 2024
	 	 	0.00000000	%	 	 	6.40018210	%
	Jan 15 2025
	 	 	0.00000000	%	 	 	6.40018210	%
	Feb 15 2025
	 	 	0.00000000	%	 	 	11.62035121	%
	Mar 15 2025
	 	 	0.00000000	%	 	 	10.55365420	%

 

 

Schedule ID to Network Lease

(NVG Network Statutory I Trust)

OVERPAYMENTS AND UNDERPAYMENTS

OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	(a)	 	(b)	 	 	(c) 	 
	 	 	Underpayment	 	 	Overpayment	 
	Termination Date	 	of Basic Lease Rent	 	 	of Basic Lease Rent	 
	Apr 15 2025
	 	 	0.00000000	%	 	 	9.48695718	%
	May 15 2025
	 	 	0.00000000	%	 	 	8.42026017	%
	Jun 15 2025
	 	 	0.00000000	%	 	 	7.35356315	%
	Jul 15 2025
	 	 	0.00000000	%	 	 	6.28686613	%
	Aug 15 2025
	 	 	0.00000000	%	 	 	6.40018210	%
	Sep 15 2025
	 	 	0.00000000	%	 	 	6.40018210	%
	Oct 15 2025
	 	 	0.00000000	%	 	 	6.40018210	%
	Nov 15 2025
	 	 	0.00000000	%	 	 	6.40018210	%
	Dec 15 2025
	 	 	0.00000000	%	 	 	6.40018210	%
	Jan 15 2026
	 	 	0.00000000	%	 	 	6.40018210	%
	Feb 15 2026
	 	 	0.00000000	%	 	 	10.04473024	%
	Mar 15 2026
	 	 	0.00000000	%	 	 	8.97803322	%
	Apr 15 2026
	 	 	0.00000000	%	 	 	7.91133620	%
	May 15 2026
	 	 	0.00000000	%	 	 	6.84463919	%
	Jun 15 2026
	 	 	0.00000000	%	 	 	5.77794217	%
	Jul 15 2026
	 	 	0.00000000	%	 	 	4.71124516	%
	Aug 15 2026
	 	 	0.00000000	%	 	 	4.711245l6	%
	Sep 15 2026
	 	 	0.00000000	%	 	 	4.71124516	%
	Oct 15 2026
	 	 	0.00000000	%	 	 	4.71124516	%
	Nov 15 2026
	 	 	0.00000000	%	 	 	4.71124516	%
	Dec 15 2026
	 	 	0.00000000	%	 	 	4.71124516	%
	Jan 15 2027
	 	 	0.00000000	%	 	 	4.71124516	%
	Feb 15 2027
	 	 	0.00000000	%	 	 	3.92603763	%
	Mar 15 2027
	 	 	0.00000000	%	 	 	3.14083010	%
	Apr 15 2027
	 	 	0.00000000	%	 	 	2.35562258	%
	May 15 2027
	 	 	0.00000000	%	 	 	1.57041505	%
	Jun 15 2027
	 	 	0.00000000	%	 	 	0.78520753	%
	Jul 15 2027
	 	 	0.00000000	%	 	 	0.00000000	%
	Aug 15 2027
	 	 	0.00000000	%	 	 	0.00000000	%
	Sep 15 2027
	 	 	0.00000000	%	 	 	0.00000000	%
	Sep 26 2027
	 	 	0.00000000	%	 	 	0.00000000	%

 

 

Schedule 2 to Network Lease

(NVG Network Statutory I Trust)

TERMINATION VALUES

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Termination Date	 	Termination Value	 
	Dec 26 2003
	 	 	104.85152600	%
	Jan 15 2004
	 	 	105.30445439	%
	Feb 15 2004
	 	 	96.89597217	%
	Mar 15 2004
	 	 	97.42644234	%
	Apr 15 2004
	 	 	97.95846512	%
	May 15 2004
	 	 	98.47089297	%
	Jun 15 2004
	 	 	98.98476667	%
	Jul 15 2004
	 	 	99.47893807	%
	Aug 15 2004
	 	 	98.36610162	%
	Sep 15 2004
	 	 	98.86295661	%
	Oct 15 2004
	 	 	99.43182794	%
	Nov 15 2004
	 	 	99.91011647	%
	Dec 15 2004
	 	 	100.38964886	%
	Jan 15 2005
	 	 	100.84927575	%
	Feb 15 2005
	 	 	97.62232681	%
	Mar 15 2005
	 	 	98.07572127	%
	Apr 15 2005
	 	 	98.53026262	%
	May 15 2005
	 	 	98.96490664	%
	Jun 15 2005
	 	 	99.40058661	%
	Jul 15 2005
	 	 	99.81625765	%
	Aug 15 2005
	 	 	98.67554300	%
	Sep l5 2005
	 	 	99.09306691	%
	Oct 15 2005
	 	 	99.41603213	%
	Nov 15 2005
	 	 	99.81425532	%
	Dec 15 2005
	 	 	100.21329899	%
	Jan 15 2006
	 	 	100. 59211695	%
	Feb 15 2006
	 	 	97.22988601	%
	Mar 15 2006
	 	 	97.60118356	%
	Apr 15 2006
	 	 	97.97319515	%
	May 15 2006
	 	 	98.32770838	%
	Jun 15 2006
	 	 	98.68283634	%
	Jul 15 2006
	 	 	99.02036604	%
	Aug 15 2006
	 	 	97.85471603	%
	Sep 15 2006
	 	 	98.19327726	%
	Oct 15 2006
	 	 	98.41602088	%
	Nov l5 2006
	 	 	98.73730148	%
	Dec 15 2006
	 	 	99.05900019	%
	Jan 15 2007
	 	 	99.36290285	%
	Feb 15 2007
	 	 	95.51642657	%
	Mar 15 2007
	 	 	95.81013358	%
	Apr 15 2007
	 	 	96.10415962	%
	May 15 2007
	 	 	96.38803687	%
	Jun 15 2007
	 	 	96.67217499	%
	Jul 15 2007
	 	 	96.94610581	%
	Aug 15 2007
	 	 	95.78151315	%
	Sep 15 2007
	 	 	96.05584919	%
	Oct 15 2007
	 	 	96.42016539	%
	Nov 15 2007
	 	 	96.68437982	%
	Dec 15 2007
	 	 	96.94873878	%
	Jan 15 2008
	 	 	97.20277342	%
	Feb 15 2008
	 	 	93.58956242	%
	Mar 15 2008
	 	 	93.83383147	%
	Apr 15 2008
	 	 	94.07818580	%
	May 15 2008
	 	 	94.31469424	%
	Jun 15 2008
	 	 	94.55124206	%
	Jul 15 2008
	 	 	94.78109496	%
	Aug 15 2008
	 	 	93.63183047	%
	Sep 15 2008
	 	 	93.86168337	%
	Oct 15 2008
	 	 	94.10194085	%
	Nov 15 2008
	 	 	94.33179375	%
	Dec 15 2008
	 	 	94.56164665	%
	Jan 15 2009
	 	 	94.79149955	%
	Feb 15 2009
	 	 	91.09090002	%
	Mar 15 2009
	 	 	91.31031618	%
	Apr 15 2009
	 	 	91.52973234	%
	May 15 2009
	 	 	91.74914850	%
	Jun 15 2009
	 	 	91.96856465	%

 

Schedule 2 to Network Lease

(NVG Network Statutory I Trust)

TERMINATION
VALUE

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Termination Date	 	Termination Value	 
	Jul 15 2009
	 	 	92.18798081	%
	Aug 15 2009
	 	 	91.09090002	%
	Sep 15 2009
	 	 	91.31031618	%
	Oct 15 2009
	 	 	91.46319101	%
	Nov 15 2009
	 	 	91.68260717	%
	Dec 15 2009
	 	 	91.90202333	%
	Jan 15 2010
	 	 	92.12143949	%
	Feb 15 2010
	 	 	88.34409081	%
	Mar 15 2010
	 	 	88.55254280	%
	Apr 15 2010
	 	 	88.76099479	%
	May 15 2010
	 	 	88.96944679	%
	Jun 15 2010
	 	 	89.17789878	%
	Jul 15 2010
	 	 	89.38635077	%
	Aug 15 2010
	 	 	88.34409081	%
	Sep 15 2010
	 	 	88.55254280	%
	Oct 15 2010
	 	 	88.75865077	%
	Nov 15 2010
	 	 	88.96710276	%
	Dec 15 2010
	 	 	89.17555476	%
	Jan 15 2011
	 	 	89.38647959	%
	Feb 15 2011
	 	 	85.53607562	%
	Mar 15 2011
	 	 	85.73409114	%
	Apr 15 2011
	 	 	85.93210666	%
	May 15 2011
	 	 	86.13274387	%
	Jun 15 2011
	 	 	86.33339658	%
	Jul 15 2011
	 	 	86.53668659	%
	Aug 15 2011
	 	 	85.55191466	%
	Sep 15 2011
	 	 	85.75526727	%
	Oct 15 2011
	 	 	85.94061608	%
	Nov 15 2011
	 	 	86.14666922	%
	Dec 15 2011
	 	 	86.35276992	%
	Jan 15 2012
	 	 	86.56154014	%
	Feb 15 2012
	 	 	82.65975001	%
	Mar 15 2012
	 	 	82.85042466	%
	Apr 15 2012
	 	 	83.04109930	%
	May 15 2012
	 	 	83.23447995	%
	Jun 15 2012
	 	 	83.42787660	%
	Jul 15 2012
	 	 	83.62399536	%
	Aug 15 2012
	 	 	82.67609847	%
	Sep 15 2012
	 	 	82.87228185	%
	Oct 15 2012
	 	 	83.19836259	%
	Nov 15 2012
	 	 	83.39733335	%
	Dec 15 2012
	 	 	83.59635320	%
	Jan 15 2013
	 	 	83.79812843	%
	Feb 15 2013
	 	 	79.83813998	%
	Mar 15 2013
	 	 	80.02272745	%
	Apr 15 2013
	 	 	80.20733029	%
	May 15 2013
	 	 	80.39475210	%
	Jun 15 2013
	 	 	80.58220604	%
	Jul 15 2013
	 	 	80.77249582	%
	Aug 15 2013
	 	 	79.87088274	%
	Sep 15 2013
	 	 	80.06127100	%
	Oct 15 2013
	 	 	80.08078992	%
	Nov 15 2013
	 	 	80.27409795	%
	Dec 15 2013
	 	 	80.46747294	%
	Jan 15 2014
	 	 	80.66371881	%
	Feb 15 2014
	 	 	76.62550048	%
	Mar 15 2014
	 	 	76.80906010	%
	Apr 15 2014
	 	 	76.99270507	%
	May 15 2014
	 	 	77.17983285	%
	Jun 15 2014
	 	 	77.36616441	%
	Jul 15 2014
	 	 	77.55599735	%
	Aug 15 2014
	 	 	76.73113325	%
	Sep 15 2014
	 	 	76.92121181	%
	Oct 15 2014
	 	 	77.23503347	%
	Nov 15 2014
	 	 	77.42832500	%
	Dec 15 2014
	 	 	77.62175944	%
	Jan 15 2015
	 	 	77.81828462	%

 

Schedule 2 to Network Lease

(NVG Network Statutory I Trust)

TERMINATION VALUES

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Termination Date	 	Termination Value	 
	Feb 15 2015
	 	 	72.68654796	%
	Mar 15 2015
	 	 	72.86575254	%
	Apr 15 2015
	 	 	73.04512110	%
	May 15 2015
	 	 	73.22779888	%
	Jun 15 2015
	 	 	73.41066118	%
	Jul 15 2015
	 	 	73.59685336	%
	Aug 15 2015
	 	 	72.87430528	%
	Sep 15 2015
	 	 	73.06090931	%
	Oct 15 2015
	 	 	73.12265366	%
	Nov 15 2015
	 	 	73.31283731	%
	Dec 15 2015
	 	 	73.50324989	%
	Jan 15 2016
	 	 	73.69703704	%
	Feb 15 2016
	 	 	68.26475653	%
	Mar 15 2016
	 	 	68.43974832	%
	Apr 15 2016
	 	 	68.61499333	%
	May 15 2016
	 	 	68.79478061	%
	Jun 15 2016
	 	 	68.97484948	%
	Jul 15 2016
	 	 	69.15948916	%
	Aug 15 2016
	 	 	68.55127760	%
	Sep l5 20l6
	 	 	68.73653972	%
	Oct l5 20l6
	 	 	69.00914955	%
	Nov 15 2016
	 	 	69.19935442	%
	Dec 15 2016
	 	 	69.38990253	%
	Jan 15 2017
	 	 	69.58508344	%
	Feb 15 2017
	 	 	64.03170866	%
	Mar 15 2017
	 	 	64.20736459	%
	Apr 15 2017
	 	 	64.38339761	%
	May 15 2017
	 	 	64.56449611	%
	Jun 15 2017
	 	 	64.74600391	%
	Jul 15 2017
	 	 	64.93260958	%
	Aug 15 20l7
	 	 	64.44813086	%
	Sep 15 2017
	 	 	64.63562292	%
	Oct 15 2017
	 	 	64.47841583	%
	Nov 15 2017
	 	 	64.67151867	%
	Dec 15 2017
	 	 	64.86510183	%
	Jan 15 2018
	 	 	65.06385432	%
	Feb 15 2018
	 	 	59.38538556	%
	Mar 15 2018
	 	 	59.56387156	%
	Apr 15 2018
	 	 	59.74287742	%
	May 15 2018
	 	 	59.92733257	%
	Jun 15 2018
	 	 	60.11234289	%
	Jul 15 2018
	 	 	60.30283803	%
	Aug 15 2018
	 	 	59.95017995	%
	Sep 15 2018
	 	 	60.14186040	%
	Oct 15 2018
	 	 	60.13482525	%
	Nov 15 2018
	 	 	60.33266059	%
	Dec 15 2018
	 	 	60.53113027	%
	Jan 15 2019
	 	 	60.73516440	%
	Feb 15 2019
	 	 	54.92681863	%
	Mar 15 2019
	 	 	55.10982547	%
	Apr 15 2019
	 	 	55.29351130	%
	May 15 2019
	 	 	55.48305884	%
	Jun 15 2019
	 	 	55.67332406	%
	Jul 15 2019
	 	 	55.86948993	%
	Aug 15 2019
	 	 	55.65690818	%
	Sep l5 2019
	 	 	55.85459220	%
	Oct 15 2019
	 	 	55.96824064	%
	Nov l5 2019
	 	 	56.17267019	%
	Dec 15 2019
	 	 	56.37790546	%
	Jan 15 2020
	 	 	56.58912996	%
	Feb 15 2020
	 	 	50.68636153	%
	Mar 15 2020
	 	 	50.86450320	%
	Apr 15 2020
	 	 	51.04338331	%
	May 15 2020
	 	 	51.22835682	%
	Jun 15 2020
	 	 	51.41410919	%
	Jul 15 2020
	 	 	51.60599561	%
	Aug 15 2020
	 	 	51.47869570	%

 

 

Schedule 2 to Network Lease

(NVG Network Statutory I Trust)

TERMINATION VALUES

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Termination Date	 	Termination Value	 
	Sep 15 2020
	 	 	51.67222650	%
	Oct 15 2020
	 	 	51.87193738	%
	Nov 15 2020
	 	 	52.07251432	%
	Dec 15 2020
	 	 	52.27396244	%
	Jan 15 2021
	 	 	51.76732038	%
	Feb15 2021
	 	 	46.68541951	%
	Mar 15 2021
	 	 	46.85951472	%
	Apr 15 2021
	 	 	47.03441770	%
	May 15 2021
	 	 	47.21566156	%
	Jun 15 2021
	 	 	47.39775548	%
	Jul 15 2021
	 	 	47.58623284	%
	Aug l5 2021
	 	 	47.55017517	%
	Sep 15 2021
	 	 	47.74044353	%
	Oct 15 2021
	 	 	47.93714369	%
	Nov 15 2021
	 	 	48.13478536	%
	Dec 15 2021
	 	 	48.33337411	%
	Jan 15 2022
	 	 	48.69008975	%
	Feb 15 2022
	 	 	42.66378559	%
	Mar 15 2022
	 	 	42.81289167	%
	Apr 15 2022
	 	 	42.96265766	%
	May 15 2022
	 	 	43.11862273	%
	Jun 15 2022
	 	 	43.27528830	%
	Jul 15 2022
	 	 	43.43819378	%
	Aug 15 2022
	 	 	43.37641293	%
	Sep 15 2022
	 	 	43.54080592	%
	Oct 15 2022
	 	 	43.71148454	%
	Nov 15 2022
	 	 	43.88295071	%
	Dec 15 2022
	 	 	44.05520909	%
	Jan 15 2023
	 	 	44.19775231	%
	Feb 15 2023
	 	 	38.14481225	%
	Mar 15 2023
	 	 	38.26712483	%
	Apr 15 2023
	 	 	38.38993879	%
	May 15 2023
	 	 	38.51879237	%
	Jun 15 2023
	 	 	38.64818604	%
	Jul 15 2023
	 	 	38.78365826	%
	Aug 15 2023
	 	 	38.69428183	%
	Sep 15 2023
	 	 	38.83091597	%
	Oct 15 2023
	 	 	38.97367150	%
	Nov 15 2013
	 	 	39.11704937	%
	Dec 15 2023
	 	 	39.26105326	%
	Jan 15 2024
	 	 	39.64044471	%
	Feb 15 2024
	 	 	33.55891483	%
	Mar 15 2024
	 	 	33.65246842	%
	Apr 15 2024
	 	 	33.74635325	%
	May 15 2024
	 	 	33.84610653	%
	Jun 15 2024
	 	 	33.94622772	%
	Jul 15 2024
	 	 	34.05225427	%
	Aug l5 2024
	 	 	33.93325795	%
	Sep 15 2024
	 	 	34.04009694	%
	Oct 15 2024
	 	 	34.15288104	%
	Nov 15 2024
	 	 	34.26611015	%
	Dec 15 2024
	 	 	34.37978690	%
	Jan 15 2025
	 	 	34.69423236	%
	Feb 15 2025
	 	 	28.49418382	%
	Mar 15 2025
	 	 	28.58140334	%
	Apr 15 2025
	 	 	28.66902716	%
	May 15 2025
	 	 	28.76279590	%
	Jun 15 2025
	 	 	28.85700770	%
	Jul 15 2025
	 	 	28.95740339	%
	Aug 15 2025
	 	 	28.94496538	%
	Sep 15 2025
	 	 	29.04632845	%
	Oct 15 2025
	 	 	29.15391772	%
	Nov 15 2025
	 	 	29.26203183	%
	Dec 15 2025
	 	 	29.37067386	%
	Jan 15 2026
	 	 	29.45095681	%
	Feb 15 2026
	 	 	24.83630512	%
	Mar 15 2026
	 	 	24.93347009	%

 

 

Schedule 2 to Network Lease

(NVG Network Statutory I Trust)

TERMINATION VALUES

(Percentages are percentages of Owner Lessors Cost)

	 	 	 	 	 
	Termination Date	 	Termination Value	 
	Apr 15 2026
	 	 	25.03120996	%
	May 15 2026
	 	 	25.13547967	%
	Jun 15 2026
	 	 	25.24036631	%
	Jul 15 2026
	 	 	25.35182508	%
	Aug 15 2026
	 	 	25.4639433l	%
	Sep 15 2026
	 	 	25.57672491	%
	Oct 15 2026
	 	 	25.69612536	%
	Nov 15 2026
	 	 	25.81623225	%
	Dec 15 2026
	 	 	25.93704978	%
	Jan 15 2027
	 	 	25.97944347	%
	Feb 15 2027
	 	 	26.10768167	%
	Mar 15 2027
	 	 	26.23667861	%
	Apr 15 2027
	 	 	26.36643878	%
	May 15 2027
	 	 	26.52576340	%
	Jun 15 2027
	 	 	26.68603069	%
	Jul 15 2027
	 	 	26.87604294	%
	Aug l5 2027
	 	 	27.06717943	%
	Sep l5 2027
	 	 	27.25944680	%
	Sep 26 2027
	 	 	27.25944680	%

 

 

Schedule 3 to Network Lease

(NVG Network Statutory I Trust)

PRICING ASSUMPTIONS

	 	 	 	 	 
	(1) Network Cost
	 	$	388,500,000.00	 
	 
	 	 	 	 
	(2) Owner Lessor’s Cost:
	 	$	103,500,000.00	 
	 
	 	 	 	 
	(3) Equity Investment:
	 	$	28,327,000.00	 
	 
	 	 	 	 
	(4) Closing Date:
	 	 	9/26/2003	 
	 
	 	 	 	 
	(5) Assumed Tax Rate:
	 	 	38.90	%
	 
	 	 	 	 
	(6) Transaction Cost:
	 	$	1,518,532.81	 
	 
	 	 	 	 
	(7) Early Purchase Date:
	 	 	1/15/2021	 
	 
	 	 	 	 
	(8) Lessor Note:
	 	 	 	 
	Interest Rate:
	 	 	4.929	%

 

 

Schedule 4 to Network Lease

(NVG Network Statutory I Trust)

EARLY PURCHASE PRICE AND INSTALLMENTS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Underpayment	 	 	Overpayment	 	 	 	 
	 	 	 Early	 	Early	 	 	of	 	 	of	 	 	Early	 
	 	 	Purchase Date	 	Purchase Amount	 	 	Basic Lease Rent*	 	 	Basic Lease Rent*	 	 	Purchase Price	 
	(1)	 	Jan 15 2021
	 	 	36,988,322.64	 	 	 	0.00	 	 	 	13,015,1159.07	 	 	 	23,973,263.57	 
	(2)	 	Apr 15 2021
	 	 	5,803,760.61	 	 	 	0.00	 	 	 	0.00	 	 	 	5,803,760.61	 
	(3)	 	Jun 15 2021
	 	 	5,803,760.61	 	 	 	0.00	 	 	 	0.00	 	 	 	5,803,760.61	 
	(4)	 	Sep 15 2021
	 	 	5,803,760.61	 	 	 	0.00	 	 	 	0.00	 	 	 	5,803,760.61	 
	(5)	 	Dec 15 2021
	 	 	5,803,760.61	 	 	 	0.00	 	 	 	0.00	 	 	 	5,803,760.61	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 	60,203,365.07	 	 	 	0.00	 	 	 	13,015,059.07	 	 	 	47,188,306.00	 

 

			
	*	 	Values are calculated without regard to any offset for amounts of Basic Lease Rent that are
due and owing on such date: the total amount due and payable by Lessee on such date is the sum of
(i) the Early Purchase Price and (ii) the amount of Basic Lease Rent payable on such date as set
forth on Schedule 1A.

 

 

CONTROL, MONITORING AND DATA ANALYSIS NETWORK

NETWORK LEASE AGREEMENT (A1)

The
September 26, 2003, Network Lease Agreement (A1) between the Tennessee Valley
Authority (“TVA”), as lessee, and NVG Network I Statutory
Trust, as owner lessor, has
been filed.

Network
Lease Agreement (A1) covers an undivided 26.640926641 percent interest in the Control,
Monitoring and Data Analysis Network (“Network”). In consideration of NVG Network
I Statutory Trust agreeing to lease the undivided interest in the Network
to TVA, TVA agrees to pay basic rent to NVG
Network I Statutory Trust for the network lease term as set out in
the Schedule 1A, with
explanatory schedules 1B, 1C, and 1D. Schedule 2 sets out the termination values
applicable to this network lease. Schedule 3 describes the pricing assumptions applicable
to this network lease. Schedule 4 sets out the early purchase price and installments
applicable to this network lease.

 

 

CONTROL, MONITORING AND DATA ANALYSIS NETWORK

NETWORK LEASE AGREEMENT (A2)

The September 26, 2003, Network Lease Agreement (A1) between the Tennessee Valley Authority
(“TVA”), as lessee, and NVG Network I Statutory Trust, as
owner lessor, has been filed. It is
substantially similar to Network Lease Agreement (A2), except as noted below:

Network
Lease Agreement (A2) covers an undivided 33.462033462 percent interest in the Control,
Monitoring and Data Analysis Network (“Network”).

In
consideration of NVG Network II Statutory Trust agreeing to lease the undivided interest in the Network to TVA,
TVA agrees to pay basic rent to NVG Network II Statutory Trust for the network lease term as set out
in the Schedule 1A, with explanatory schedules 1B, 1C, and 1D. Schedule 2 sets out the termination
values applicable to this network lease. Schedule 3 describes the pricing assumptions applicable to
this network lease. Schedule 4 sets out the early purchase price and installments applicable to
this network lease.

These schedules for Network Lease Agreement (A2) follow on the next pages.

 

 

Schedule 1A to Network Lease

(NVG Network Statutory II Trust)

BASIC RENT PAYMENTS

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Rent	 	 	 
	Payment Date	 	          Percentage
	 
	Dec 26 2003
	 	 	0.00038994	%
	Jan 15 2004
	 	 	8.68538939	%
	Jul 15 2004
	 	 	1.55202542	%
	Jan 15 2005
	 	 	3.58159287	%
	Jul 15 2005
	 	 	1.50200673	%
	Jan 15 2006
	 	 	3.63413928	%
	Jul 15 2006
	 	 	1.44946032	%
	Jan 15 2007
	 	 	3.68934114	%
	Jul 15 2007
	 	 	1.39425846	%
	Jan 15 2008
	 	 	3.74733266	%
	Jul 15 2008
	 	 	1.33626695	%
	Jan 15 2009
	 	 	3.80825480	%
	Jul 15 2009
	 	 	1.27534480	%
	Jan 15 2010
	 	 	3.87225567	%
	Jul 15 2010
	 	 	1.21134394	%
	Jan 15 2011
	 	 	3.93949085	%
	Jul 15 2011
	 	 	1.14410876	%
	Jan 15 2012
	 	 	4.01012379	%
	Jul 15 2012
	 	 	1.07347582	%
	Jan 15 2013
	 	 	4.08432619	%
	Jul 15 2013
	 	 	0.99927341	%
	Jan 15 2014
	 	 	4.32314421	%
	Jul 15 2014
	 	 	0.91735661	%
	Jan 15 2015
	 	 	5.40656842	%
	Jul 15 2015
	 	 	0.80671999	%
	Jan 15 2016
	 	 	5.52279611	%
	Jul 15 2016
	 	 	0.69049229	%
	Jan 15 2017
	 	 	5.64489743	%
	Jul 15 2017
	 	 	0.56839098	%
	Jan 15 2018
	 	 	5.77316919	%
	Jul 15 2018
	 	 	0.44011922	%
	Jan 15 2019
	 	 	5.90792322	%
	Jul 15 2019
	 	 	0.30536519	%
	Jan 15 2020
	 	 	6.04948710	%
	Jul 15 2020
	 	 	0.16380130	%
	Jan 15 2021
	 	 	6.04948710	%
	Jul 15 2021
	 	 	0.16380130	%
	Jan 15 2022
	 	 	6.04948710	%
	Jul 15 2022
	 	 	0.16380130	%
	Jan 15 2023
	 	 	6.04948710	%
	Jul 15 2023
	 	 	0.16380130	%
	Jan 15 2024
	 	 	6.04948710	%
	Jul 15 2024
	 	 	0.16380130	%
	Jan 15 2025
	 	 	6.10328141	%
	Jul 15 2025
	 	 	0.11000699	%
	Jan 15 2026
	 	 	4.57367063	%
	Jul 15 2026
	 	 	0.00000000	%
	Jan l5 2027
	 	 	0.00000000	%
	Jul 15 2027
	 	 	0.00000000	%
	Sep 26 2027
	 	 	0.00000000	%

 

 

Schedule 1B to Network Lease

(NVG Network Statutory II Trust)

ALLOCATED RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	From and	 	 	To and	 	Basic Rent
	Including	 	 	Including	 	Allocated
	 
	Dec 26 2003
	 	Jan 14 2004	 	 	0.26830109	%
	Jan 15 2004
	 	Jul 14 2004	 	 	4.88590406	%
	Jul 15 2004
	 	Jan 14 2005	 	 	0.00000000	%
	Jan 15 2005
	 	Jul 14 2005	 	 	5.08359960	%
	Jul 15 2005
	 	Jan 14 2006	 	 	0.00000000	%
	Jan 15 2006
	 	Jul 14 2006	 	 	5.08359960	%
	Jul 15 2006
	 	Jan 14 2007	 	 	0.00000000	%
	Jan 15 2007
	 	Jul 14 2007	 	 	5.08359960	%
	Jul 15 2007
	 	Jan 14 2008	 	 	0.00000000	%
	Jan 15 2008
	 	Jul 14 2008	 	 	5.08359960	%
	Jul 15 2008
	 	Jan 14 2009	 	 	0.00000000	%
	Jan 15 2009
	 	Jul 14 2009	 	 	5.08359960	%
	Jul 15 2009
	 	Jan 14 2010	 	 	0.00000000	%
	Jan 15 2010
	 	Jul 14 2010	 	 	5.08359960	%
	Jul 15 2010
	 	Jan 14 2011	 	 	0.00000000	%
	Jan 15 2011
	 	Jul 14 2011	 	 	5.08359960	%
	Jul 15 2011
	 	Jan 14 2012	 	 	0.00000000	%
	Jan 15 2012
	 	Jul 14 2012	 	 	5.08359960	%
	Jul 15 2012
	 	Jan 14 2013	 	 	0.00000000	%
	Jan 15 2013
	 	Jul 14 2013	 	 	5.08359960	%
	Jul 15 2013
	 	Jan 14 2014	 	 	0.00000000	%
	Jan 15 2014
	 	Jul 14 2014	 	 	5.08359960	%
	Jul 15 2014
	 	Jan 14 2015	 	 	0.00000000	%
	Jan 15 2015
	 	Jul 14 2015	 	 	5.24050083	%
	Jul 15 2015
	 	Jan 14 2016	 	 	0.00000000	%
	Jan 15 2016
	 	Jul 14 2016	 	 	6.21328840	%
	Jul 15 2016
	 	Jan 14 2017	 	 	0.00000000	%
	Jan 15 2017
	 	Jul 14 2017	 	 	6.21328840	%
	Jul 15 2017
	 	Jan 14 2018	 	 	0.00000000	%
	Jan 15 2018
	 	Jul 14 2018	 	 	6.21328840	%
	Jul 15 2018
	 	Jan 14 2019	 	 	0.00000000	%
	Jan 15 2019
	 	Jul 14 2019	 	 	6.21328840	%
	Jul 15 2019
	 	Jan 14 2020	 	 	0.00000000	%
	Jan 15 2020
	 	Jul 14 2020	 	 	6.13679643	%
	Jul 15 2020
	 	Jan 14 2021	 	 	0.08294310	%
	Jan 15 2021
	 	Jul 14 2021	 	 	6.20683727	%
	Jul 15 2021
	 	Jan 14 2022	 	 	0.00000000	%
	Jan 15 2022
	 	Jul 14 2022	 	 	6.21328840	%
	Jul 15 2022
	 	Jan 14 2023	 	 	0.00000000	%
	Jan 15 2023
	 	Jul 14 2023	 	 	6.21328840	%
	Jul 15 2023
	 	Jan 14 2024	 	 	0.00000000	%
	Jan 15 2024
	 	Jul 14 2024	 	 	6.21328840	%
	Jul 15 2024
	 	Jan 14 2025	 	 	0.00000000	%
	Jan 15 2025
	 	Jul 14 2025	 	 	6.21328840	%
	Jul 15 2025
	 	Jan 14 2026	 	 	0.00000000	%
	Jan 15 2026
	 	Jul 14 2026	 	 	6.21328840	%
	Jul 15 2026
	 	Jan 14 2027	 	 	0.00000000	%
	Jan 15 2027
	 	Jul 14 2027	 	 	4.57367063	%
	Jul 15 2027
	 	Sep 26 2027	 	 	0.00000000	%

 

 

Schedule 1C to Network Lease

(NVG Network Statutory II Trust)

ATTRIBUTION OF BASIC LEASE RENT PAYMENTS TO ALLOCATIONS OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Allocated	 	Allocated
	Rent Payment Date	 	 	Basic Lease Rent	 	 	From and Including	 	To and Including
	 
	Dec 26 2003

	 	 	0.00038994%		 	Dec 26 2003
	 	Jan 14 2004
	Jan 15 2004

	 	 	8.68538939%		 	Dec 26 2003
	 	Jul 14 2005
	Jul 15 2004

	 	 	1.55202542%		 	Jan 15 2005
	 	Jul 14 2005
	Jan 15 2005

	 	 	3.58159287%		 	Jan 15 2006
	 	Jul 14 2006
	Jul 15 2005

	 	 	1.50200673%		 	Jan 15 2006
	 	Jul 14 2006
	Jan 15 2006

	 	 	3.63413928%		 	Jan 15 2007
	 	Jul 14 2007
	Jul 15 2006

	 	 	1.44946032%		 	Jan 15 2007
	 	Jul 14 2007
	Jan 15 2007

	 	 	3.68934114%		 	Jan 15 2008
	 	Jul 14 2008
	Jul 15 2007

	 	 	1.39425846%		 	Jan 15 2008
	 	Jul 14 2008
	Jan 15 2008

	 	 	3.74733266%		 	Jan 15 2009
	 	Jul 14 2009
	Jul 15 2008

	 	 	1.33626695%		 	Jan 15 2009
	 	Jul 14 2009
	Jan 15 2009

	 	 	3.80825480%		 	Jan 15 2010
	 	Jul 14 2010
	Jul 15 2009

	 	 	1.27534480%		 	Jan 15 2010
	 	Jul 14 2010
	Jan 15 2010

	 	 	3.87225567%		 	Jan 15 2011
	 	Jul 14 2011
	Jul 15 2010

	 	 	1.21134394%		 	Jan 15 2011
	 	Jul 14 2011
	Jan 15 2011

	 	 	3.93949085%		 	Jan 15 2012
	 	Jul 14 2012
	Jul 15 2011

	 	 	1.14410876%		 	Jan 15 2012
	 	Jul 14 2012
	Jan 15 2012

	 	 	4.01012379%		 	Jan 15 2013
	 	Jul 14 2013
	Jul 15 2012

	 	 	1.07347582%		 	Jan 15 2013
	 	Jul 14 2013
	Jan 15 2013

	 	 	4.08432619%		 	Jan 15 2014
	 	Jul 14 2014
	Jul 15 2013

	 	 	0.99927341%		 	Jan 15 2014
	 	Jul 14 2014
	Jan 15 2014

	 	 	4.32314421%		 	Jan 15 2015
	 	Jul 14 2015
	Jul 15 2014

	 	 	0.91735661%		 	Jan 15 2015
	 	Jul 14 2015
	Jan 15 2015

	 	 	5.40656842%		 	Jan 15 2016
	 	Jul 14 2016
	Jul 15 2015

	 	 	0.80671999%		 	Jan 15 2016
	 	Jul 14 2016
	Jan 15 2016

	 	 	5.52279611%		 	Jan 15 2017
	 	Jul 14 2017
	Jul 15 2016

	 	 	0.69049229%		 	Jan 15 2017
	 	Jul 14 2017
	Jan 15 2017

	 	 	5.64489743%		 	Jan 15 2018
	 	Jul 14 2018
	Jul 15 2017

	 	 	0.56839098%		 	Jan 15 2018
	 	Jul 14 2018
	Jan 15 2018

	 	 	5.77316919%		 	Jan 15 2019
	 	Jul 14 2019
	Jul 15 2018

	 	 	0.44011922%		 	Jan 15 2019
	 	Jul 14 2019
	Jan 15 2019

	 	 	5.90792322%		 	Jan 15 2020
	 	Jul 14 2020
	Jul 15 2019

	 	 	0.30536519%		 	Jan 15 2020
	 	Jan 14 2021
	Jan 15 2020

	 	 	6.04948710%		 	Jul 15 2020
	 	Jul 14 2021
	Jul 15 2020

	 	 	0.16380130%		 	Jan 15 2021
	 	Jul 14 2021
	Jan 15 2021

	 	 	6.04948710%		 	Jan 15 2022
	 	Jul 14 2022
	Jul 15 2021

	 	 	0.16380130%		 	Jan 15 2022
	 	Jul 14 2022
	Jan 15 2022

	 	 	6.04948710%		 	Jan 15 2023
	 	Jul 14 2023
	Jul 15 2022

	 	 	0.16380130%		 	Jan 15 2023
	 	Jul 14 2023
	Jan 15 2023

	 	 	6.04948710%		 	Jan 15 2024
	 	Jul 14 2024
	Jul 15 2023

	 	 	0.16380130%		 	Jan 15 2024
	 	Jul 14 2024
	Jan 15 2024

	 	 	6.04948710%		 	Jan 15 2025
	 	Jul 14 2025
	Jul 15 2024

	 	 	0.16380130%		 	Jan 15 2025
	 	Jul 14 2025
	Jan 15 2025

	 	 	6.10328141%		 	Jan 15 2026
	 	Jul 14 2026
	Jul 15 2025

	 	 	0.11000699%		 	Jan 15 2026
	 	Jul 14 2026
	Jan 15 2026

	 	 	4.57367063%		 	Jan 15 2027
	 	Jul 14 2027
	Jul 15 2026

	 	 	0.00000000%		 	 	 	 
	Jan 15 2027

	 	 	0.00000000%		 	 	 	 
	Jul 15 2027

	 	 	0.00000000%		 	 	 	 
	Sep 26 2027

	 	 	0.00000000%		 	 	 	 

 

 

Schedule 1D to Network Lease

(NVG Network Statutory II Trust)

OVERPAYMENTS AND UNDERPAYMENTS

OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	(a)               	 	 	(b)	 	 	 	(c)	 
	 	 	 	Underpayment	 	 	 	Overpayment	 
	Termination Date	 	 	of Basic Lease Rent	 	 	 	of Basic Lease Rent	 
	 
	Dec 26 2003

	 	 	0.00000000%		 	 	0.00000000%	
	Jan 15 2004

	 	 	0.26791115%		 	 	0.00000000%	
	Feb 15 2004

	 	 	0.00000000%		 	 	7.60316090%	
	Mar 15 2004

	 	 	0.00000000%		 	 	6.78884356%	
	Apr 15 2004

	 	 	0.00000000%		 	 	5.97452622%	
	May 15 2004

	 	 	0.00000000%		 	 	5.16020887%	
	Jun 15 2004

	 	 	0.00000000%		 	 	4.34589153%	
	Jul 15 2004

	 	 	0.00000000%		 	 	3.53157418%	
	Aug 15 2004

	 	 	0.00000000%		 	 	5.08359960%	
	Sep 15 2004

	 	 	0.00000000%		 	 	5.08359960%	
	Oct 15 2004

	 	 	0.00000000%		 	 	5.08359960%	
	Nov 15 2004

	 	 	0.00000000%		 	 	5.08359960%	
	Dec 15 2004

	 	 	0.00000000%		 	 	5.08359960%	
	Jan 15 2005

	 	 	0.00000000%		 	 	5.08359960%	
	Feb 15 2005

	 	 	0.00000000%		 	 	7.81792588%	
	Mar 15 2005

	 	 	0.00000000%		 	 	6.97065928%	
	Apr 15 2005

	 	 	0.00000000%		 	 	6.12339268%	
	May 15 2005

	 	 	0.00000000%		 	 	5.27612607%	
	Jun 15 2005

	 	 	0.00000000%		 	 	4.42885947%	
	Jul 15 2005

	 	 	0.00000000%		 	 	3.58159287%	
	Aug 15 2005

	 	 	0.00000000%		 	 	5.08359960%	
	Sep 15 2005

	 	 	0.00000000%		 	 	5.08359960%	
	Oct 15 2005

	 	 	0.00000000%		 	 	5.08359960%	
	Nov 15 2005

	 	 	0.00000000%		 	 	5.08359960%	
	Dec 15 2005

	 	 	0.00000000%		 	 	5.08359960%	
	Jan 15 2006

	 	 	0.00000000%		 	 	5.08359960%	
	Feb 15 2006

	 	 	0.00000000%		 	 	7.87047228%	
	Mar 15 2006

	 	 	0.00000000%		 	 	7.02320568%	
	Apr 15 2006

	 	 	0.00000000%		 	 	6.17593908%	
	May 15 2006

	 	 	0.00000000%		 	 	5.32867248%	
	Jun 15 2006

	 	 	0.00000000%		 	 	4.48140588%	
	Jul 15 2006

	 	 	0.00000000%		 	 	3.63413928%	
	Aug 15 2006

	 	 	0.00000000%		 	 	5.08359960%	
	Sep 15 2006

	 	 	0.00000000%		 	 	5.08359960%	
	Oct 15 2006

	 	 	0.00000000%		 	 	5.08359960%	
	Nov 15 2006

	 	 	0.00000000%		 	 	5.08359960%	
	Dec 15 2006

	 	 	0.00000000%		 	 	5.08359960%	
	Jan 15 2007

	 	 	0.00000000%		 	 	5.08359960%	
	Feb 15 2007

	 	 	0.00000000%		 	 	7.92567415%	
	Mar 15 2007

	 	 	0.00000000%		 	 	7.07840755%	
	Apr 15 2007

	 	 	0.00000000%		 	 	6.23114095%	
	May 15 2007

	 	 	0.00000000%		 	 	5.38387434%	
	Jun 15 2007

	 	 	0.00000000%		 	 	4.53660774%	
	Jul 15 2007

	 	 	0.00000000%		 	 	3.68934114%	
	Aug 15 2007

	 	 	0.00000000%		 	 	5.08359960%	
	Sep 13 2007

	 	 	0.00000000%		 	 	5.08359960%	
	Out 15 2007

	 	 	0.00000000%		 	 	5.08359960%	
	Nov 15 2007

	 	 	0.00000000%		 	 	5.08359960%	
	Dec 15 2007

	 	 	0.00000000%		 	 	5.08359960%	
	Jan 15 2008

	 	 	0.00000000%		 	 	5.08359960%	
	Feb 15 2008

	 	 	0.00000000%		 	 	7.98366566%	
	Mar 15 2008

	 	 	0.00000000%		 	 	7.13639906%	
	Apr 15 2008

	 	 	0.00000000%		 	 	6.28913246%	
	May 15 2008

	 	 	0.00000000%		 	 	5.44186586%	
	Jun 15 2008

	 	 	0.00000000%		 	 	4.59459926%	
	Jul 15 2008

	 	 	0.00000000%		 	 	3.74733266%	
	Aug 15 2008

	 	 	0.00000000%		 	 	5.08359960%	
	Sep 15 2008

	 	 	0.00000000%		 	 	5.08359960%	
	Oct 15 2008

	 	 	0.00000000%		 	 	5.08359960%	
	Nov 15 2008

	 	 	0.00000000%		 	 	5.08359960%	
	Dec 15 2008

	 	 	0.00000000%		 	 	5.08359960%	
	Jan 15 2009

	 	 	0.00000008%		 	 	5.08359960%	
	Feb l5 2009

	 	 	0.00000000%		 	 	8.04458780%	
	Mar 15 2009

	 	 	0.00000000%		 	 	7.19732120%	

 

 

Schedule
1D to Network Lease

(NVG Network Statutory II Trust)

OVERPAYMENTS AND UNDERPAYMENTS

OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	(a)             	 	 	(b)	 	 	 	(c)	 
	 	 	 	Underpayment	 	 	 	Overpayment	 
	Termination Date	 	 	of Basic Lease Rent	 	 	 	of Basic Lease Rent	 
	 
	Apr 15 2009

	 	 	0.00000000%		 	 	6.35005460%	
	May 15 2009

	 	 	0.00000000%		 	 	5.50278800%	
	Jun 15 2009

	 	 	0.00000000%		 	 	4.65552140%	
	Jul 15 2009

	 	 	0.00000000%		 	 	3.80825480%	
	Aug 15 2009

	 	 	0.00000000%		 	 	5.08359960%	
	Sep 15 2009

	 	 	0.00000000%		 	 	5.08359960%	
	Oct 15 2009

	 	 	0.00000000%		 	 	5.08359960%	
	Nov 15 2009

	 	 	0.00000000%		 	 	5.08359960%	
	Dec 15 2009

	 	 	0.00000000%		 	 	5.08359960%	
	Jan 15 2010

	 	 	0.00000000%		 	 	5.08359960%	
	Feb 15 2010

	 	 	0.00000000%		 	 	8.10858867%	
	Mar
15 2010

	 	 	0.00000000%		 	 	7.26132207%	
	Apr 15 2010

	 	 	0.00000000%		 	 	6.41405547%	
	May 15 2010

	 	 	0.00000000%		 	 	5.56678887%	
	Jun 15 2010

	 	 	0.00000000%		 	 	4.71952227%	
	Jul 15 2010

	 	 	0.00000000%		 	 	3.87225567%	
	Aug 15 2010

	 	 	0.00000000%		 	 	5.08359960%	
	Sep 15 2010

	 	 	0.00000000%		 	 	5.08359960%	
	Oct 15 2010

	 	 	0.00000000%		 	 	5.08359960%	
	Nov 15 2010

	 	 	0.00000000%		 	 	5.08359960%	
	Dec 15 2010

	 	 	0.00000000%		 	 	5.08359960%	
	Jan 15 2011

	 	 	0.00000000%		 	 	5.08359960%	
	Feb 15 2011

	 	 	0.00000000%		 	 	8.17582385%	
	Mar 15 2011

	 	 	0.00000000%		 	 	7.32855725%	
	Apr 15 2011

	 	 	0.00000000%		 	 	6.48129065%	
	May 15 2011

	 	 	0.00000000%		 	 	5.63402405%	
	Jun 15 2011

	 	 	0.00000000%		 	 	4.78675745%	
	Jul 15 2011

	 	 	0.00000000%		 	 	3.93949085%	
	Aug 15 2011

	 	 	0.00000000%		 	 	5.08359960%	
	Sep 15 2011

	 	 	0.00000000%		 	 	5.08359960%	
	Oct 15 2011

	 	 	0.00000000%		 	 	5.08359960%	
	Nov 15 2011

	 	 	0.00000000%		 	 	5.08359960%	
	Dec 15 2011

	 	 	0.00000000%		 	 	5.08359960%	
	Jan 15 2012

	 	 	0.00000000%		 	 	5.08359960%	
	Feb 15 2012

	 	 	0.00000000%		 	 	8.24645679%	
	Mar 15 2012

	 	 	0.00000000%		 	 	7.39919019%	
	Apr 15 2012

	 	 	0.00000000%		 	 	6.55192359%	
	May 15 2012

	 	 	0.00000000%		 	 	5.70465699%	
	Jun 15 2012

	 	 	0.00000000%		 	 	4.85739039%	
	Jul 15 2012

	 	 	0.00000000%		 	 	4.01012379%	
	Aug 15 2012

	 	 	0.00000000%		 	 	5.08359960%	
	Sep 15 2012

	 	 	0.00000000%		 	 	5.08359960%	
	Oct 15 2012

	 	 	0.00000000%		 	 	5.08359960%	
	Nov 15 2012

	 	 	0.00000000%		 	 	5.08359960%	
	Dec 15 2012

	 	 	0.00000000%		 	 	5.08359960%	
	Jan 15 2013

	 	 	0.00000000%		 	 	5.08359960%	
	Feb 15 2013

	 	 	0.00000000%		 	 	8.32065920%	
	Mar 15 2013

	 	 	0.00000000%		 	 	7.47339260%	
	Apr 15 2013

	 	 	0.00000000%		 	 	6.62612600%	
	May 15 2013

	 	 	0.00000000%		 	 	5.77885940%	
	Jun 15 2013

	 	 	0.00000000%		 	 	4.93159280%	
	Jul 15 2013

	 	 	0.00000000%		 	 	4.08432619%	
	Aug 15 2013

	 	 	0.00000000%		 	 	5.08359960%	
	Sep 15 2013

	 	 	0.00000000%		 	 	5.08359960%	
	Oct 15 2013

	 	 	0.00000000%		 	 	5.08359960%	
	Nov 15 2013

	 	 	0.00000000%		 	 	5.08359960%	
	Dec 15 2013

	 	 	0.00000000%		 	 	5.08359960%	
	Jan 15 2014

	 	 	0.00000000%		 	 	5.08359960%	
	Feb 15 2014

	 	 	0.00000000%		 	 	8.55947722%	
	Mar 15 2014

	 	 	0.00000000%		 	 	7.71221061%	
	Apr 15 2014

	 	 	0.00000000%		 	 	6.86494401%	
	May 15 2014

	 	 	0.00000000%		 	 	6.01767741%	
	Jun 15 2014

	 	 	0.00000000%		 	 	5.17041081%	
	Jul 15 2014

	 	 	0.00000000%		 	 	4.32314421%	

 

 

Schedule 1D to Network Lease

(NVG Network Statutory II Trust)

OVERPAYMENTS AND UNDERPAYMENTS

OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	(a)	 	(b)	 	(c)
	 	 	Underpayment	 	Overpayment
	Termination Date	 	of Basic Lease Rent	 	of Basic Lease Rent
	 
	Aug 15 2014
	 	0.00000000%	 	5.24050083%
	Sep 15 2014
	 	0.00000000%	 	5.24050083%
	Oct 15 2014
	 	0.00000000%	 	5.24050083%
	Nov 15 2014
	 	0.00000000%	 	5.24050083%
	Dec 15 2014
	 	0.00000000%	 	5.24050083%
	Jan 15 2015
	 	0.00000000%	 	5.24050083%
	Feb 15 2015
	 	0.00000000%	 	9.77365244%
	Mar 15 2015
	 	0.00000000%	 	8.90023563%
	Apr 15 2015
	 	0.00000000%	 	8.02681883%
	May 15 2015
	 	0.00000000%	 	7.15340202%
	Jun 15 2015
	 	0.00000000%	 	6.27998522%
	Jul 15 2015
	 	0.00000000%	 	5.40656842%
	Aug
15 2015
	 	0.00000000%	 	6.21328840%
	Sep 15 2015
	 	0.00000000%	 	6.21328840%
	Oct 15 2015
	 	0.00000000%	 	6.21328840%
	Nov 15 2015
	 	0.00000000%	 	6.21328840%
	Dec 15 2015
	 	0.00000000%	 	6.21328840%
	Jan 15 2016
	 	0.00000000%	 	6.21328840%
	Feb 15 2016
	 	0.00000000%	 	10.70053645%
	Mar 15 2016
	 	0.00000000%	 	9.66498838%
	Apr 15 2016
	 	0.00000000%	 	8.62944031%
	May 15 2016
	 	0.00000000%	 	7.59389225%
	Jun 15 2016
	 	0.00000000%	 	6.55834418%
	Jul 15 2016
	 	0.00000000%	 	5.52279611%
	Aug 15 2016
	 	0.00000000%	 	6.21328840%
	Sep 15 2016
	 	0.00000000%	 	6.21328840%
	Oct 15 2016
	 	0.00000000%	 	6.21328840%
	Nov 15 2016
	 	0.00000000%	 	6.21328840%
	Dec 15 2016
	 	0.00000000%	 	6.21328840%
	Jan 15 2017
	 	0.00000000%	 	6.21328840%
	Feb 15 2017
	 	0.00000000%	 	10.82263776%
	Mar 15 2017
	 	0.00000000%	 	9.78708970%
	Apr 15 2017
	 	0.00000000%	 	8.75154163%
	May 15 2017
	 	0.00000000%	 	7.71599356%
	Jun 15 2017
	 	0.00000000%	 	6.68044549%
	Jul 15 2017
	 	0.00000000%	 	5.64489743%
	Aug 15 2017
	 	0.00000000%	 	6.21328840%
	Sep 15 2017
	 	0.00000000%	 	6.21328840%
	Oct 15 2017
	 	0.00000000%	 	6.21328840%
	Nov 15 2017
	 	0.00000000%	 	6.21328840%
	Dec 15 2017
	 	0.00000000%	 	6.21328840%
	Jan 15 2018
	 	0.00000000%	 	6.21328840%
	Feb 15 2018
	 	0.00000000%	 	10.95090952%
	Mar 15 2018
	 	0.00000000%	 	9.91536145%
	Apr 15 2018
	 	0.00000000%	 	8.87981339%
	May 15 2018
	 	0.00000000%	 	7.84426532%
	Jun 15 2018
	 	0.00000000%	 	6.80871725%
	Jul 15 2018
	 	0.00000000%	 	5.77316919%
	Aug 15 2018
	 	0.00000000%	 	6.21328840%
	Sep 15 2018
	 	0.00000000%	 	6.21328840%
	Oct 15 2018
	 	0.00000000%	 	6.21328840%
	Nov 15 2018
	 	0.00000000%	 	6.21328840%
	Dec 15 2018
	 	0.00000000%	 	6.21328840%
	Jan 15 2019
	 	0.00000000%	 	6.21328840%
	Feb 15 2019
	 	0.00000000%	 	11.08566355%
	Mar 15 2019
	 	0.00000000%	 	10.05011548%
	Apr 15 2019
	 	0.00000000%	 	9.01456742%
	May 15 2019
	 	0.00000000%	 	7.97901935%
	Jun 15 2019
	 	0.00000000%	 	6.94347128%
	Jul 15 2019
	 	0.00000000%	 	5.90792322%
	Aug 15 2019
	 	0.00000000%	 	6.21328840%
	Sep 15 2019
	 	0.00000000%	 	6.21328840%
	Oct 15 2019
	 	0.00000000%	 	6.21328840%
	Nov 15 2019
	 	0.00000000%	 	6.21328840%

 

Schedule ID to Network Lease

(NVG Network Statutory II Trust)

OVERPAYMENTS AND UNDERPAYMENTS

OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	(a)	 	(b)	 	(c)
	 	 	 	Underpayment	 	 	 	Overpayment	 
	Termination Date	 	 	of Basic Lease Rent	 	 	 	of Basic Lease Rent	 
	 
	Dec 15 2019

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Jan 15 2020

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Feb 15 2020

	 	 	0.00000000%	 	 	 	11.23997610%	 
	Mar 15 2020

	 	 	0.00000000%	 	 	 	10.21717669%	 
	Apr 15 2020

	 	 	0.00000000%	 	 	 	9.19437729%	 
	May 15 2020

	 	 	0.00000000%	 	 	 	8.17157788%	 
	Jun 15 2020

	 	 	0.00000000%	 	 	 	7.14877848%	 
	Jul 15 2020

	 	 	0.00000000%	 	 	 	6.12597907%	 
	Aug 15 2020

	 	 	0.00000000%	 	 	 	6.27595653%	 
	Sep 15 2020

	 	 	0.00000000%	 	 	 	6.26213267%	 
	Oct 15 2020

	 	 	0.00000000%	 	 	 	6.24830882%	 
	Nov 15 2020

	 	 	0.00000000%	 	 	 	6.23448497%	 
	Dec 15 2020

	 	 	0.00000000%	 	 	 	6.22066112%	 
	Jan 15 2021

	 	 	0.00000000%	 	 	 	6.20683727%	 
	Feb 15 2021

	 	 	0.00000000%	 	 	 	11.22185149%	 
	Mar 15 2021

	 	 	0.00000000%	 	 	 	10.18737862%	 
	Apr 15 2021

	 	 	0.00000000%	 	 	 	9.15290574%	 
	May 15 2021

	 	 	0.00000000%	 	 	 	8.11843286%	 
	Jun 15 2021

	 	 	0.00000000%	 	 	 	7.08395998%	 
	Jul 15 2021

	 	 	0.00000000%	 	 	 	6.04948710%	 
	Aug 15 2021

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Sep 15 2021

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Oct 15 2021

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Nov 15 2021

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Dec 15 2021

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Jan 15 2022

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Feb 15 2022

	 	 	0.00000000%	 	 	 	11.22722744%	 
	Mar 15 2022

	 	 	0.00000000%	 	 	 	10.19167937%	 
	Apr 15 2022

	 	 	0.00000000%	 	 	 	9.15613130%	 
	May 15 2022

	 	 	0.00000000%	 	 	 	8.12058323%	 
	Jun 15 2022

	 	 	0.00000000%	 	 	 	7.08503517%	 
	Jul 15 2022

	 	 	0.00000000%	 	 	 	6.04948710%	 
	Aug 15 2022

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Sep 15 2022

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Oct 15 2022

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Nov 15 2022

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Dec 15 2022

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Jan 15 2023

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Feb 15 2023

	 	 	0.00000000%	 	 	 	11.22722744%	 
	Mar 15 2023

	 	 	0.00000000%	 	 	 	10.19167937%	 
	Apr 15 2023

	 	 	0.00000000%	 	 	 	9.15613130%	 
	May 15 2023

	 	 	0.00000000%	 	 	 	8.12058323%	 
	Jun 15 2023

	 	 	0.00000000%	 	 	 	7.08503517%	 
	Jul 15 2023

	 	 	0.00000000%	 	 	 	6.04948710%	 
	Aug 15 2023

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Sep 15 2023

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Oct 15 2023

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Nov 15 2023

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Dec 15 2023

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Jan 15 2024

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Feb 15 2024

	 	 	0.00000000%	 	 	 	11.22722744%	 
	Mar 15 2024

	 	 	0.00000000%	 	 	 	10.19167937%	 
	Apr 15 2024

	 	 	0.00000000%	 	 	 	9.15613130%	 
	May 15 2024

	 	 	0.00000000%	 	 	 	8.12058323%	 
	Jun 15 2024

	 	 	0.00000000%	 	 	 	7.08503517%	 
	Jul 15 2024

	 	 	0.00000000%	 	 	 	6.04948710%	 
	Aug 15 2024

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Sep 15 2024

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Oct 15 2024

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Nov 15 2024

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Dec 15 2024

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Jan 15 2025

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Feb 15 2025

	 	 	0.00000000%	 	 	 	11.28102175%	 
	Mar 15 2025

	 	 	0.00000000%	 	 	 	10.24547368%	 

 

 

Schedule ID to Network Lease

(NVG Network Statutory II Trust)

OVERPAYMENTS AND UNDERPAYMENTS

OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	(a)	 	(b)	 	(c)
	 	 	 	Underpayment	 	 	 	Overpayment	 	 
	Termination Date	 	 	of Basic Lease Rent	 	 	 	of Basic Lease Rent	 
	 
	Apr 15 2025

	 	 	0.00000000%	 	 	 	9.20992561%	 
	May 15 2025

	 	 	0.00000000%	 	 	 	8.17437755%	 
	Jun 15 2025

	 	 	0.00000000%	 	 	 	7.13882948%	 
	Jul 15 2025

	 	 	0.00000000%	 	 	 	6.10328141%	 
	Aug 15 2025

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Sep 15 2025

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Oct 15 2025

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Nov 15 2025

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Dec 15 2025

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Jan 15 2026

	 	 	0.00000000%	 	 	 	6.21328840%	 
	Feb 15 2026

	 	 	0.00000000%	 	 	 	9.75141097%	 
	Mar 15 2026

	 	 	0.00000000%	 	 	 	8.71586290%	 
	Apr 15 2026

	 	 	0.00000000%	 	 	 	7.68031483%	 
	May 15 2026

	 	 	0.00000000%	 	 	 	6.64476676%	 
	Jun 15 2026

	 	 	0.00000000%	 	 	 	5.60921870%	 
	Jul 15 2026

	 	 	0.00000000%	 	 	 	4.57367063%	 
	Aug 15 2026

	 	 	0.00000000%	 	 	 	4.57367063%	 
	Sep 15 2026

	 	 	0.00000000%	 	 	 	4.57367063%	 
	Oct 15 2026

	 	 	0.00000000%	 	 	 	4.57367063%	 
	Nov 15 2026

	 	 	0.00000000%	 	 	 	4.57367063%	 
	Dec 15 2026

	 	 	0.00000000%	 	 	 	4.57367063%	 
	Jan 15 2027

	 	 	0.00000000%	 	 	 	4.57367063%	 
	Feb 15 2027

	 	 	0.00000000%	 	 	 	3.81139219%	 
	Mar 15 2027

	 	 	0.00000000%	 	 	 	3.04911375%	 
	Apr 15 2027

	 	 	0.00000000%	 	 	 	2.28683532%	 
	May 15 2027

	 	 	0.00000000%	 	 	 	1.52455688%	 
	Jun 15 2027

	 	 	0.00000000%	 	 	 	0.76227844%	 
	Jul 15 2027

	 	 	0.00000000%	 	 	 	0.00000000%	 
	Aug 15 2027

	 	 	0.00000000%	 	 	 	0.00000000%	 
	Sep 15 2027

	 	 	0.00000000%	 	 	 	0.00000000%	 
	Sep 26 2027

	 	 	0.00000000%	 	 	 	0.00000000%	 

 

 

Schedule 2 to Network Lease

(NVG Network Statutory II Trust)

TERMINATION VALUES

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Termination Date	 	 	Termination Value	 
	 
	Dec 26 2003

	 	 	105.33650342%	 
	Jan 15 2004

	 	 	105.72183209%	 
	Feb 15 2004

	 	 	97.49798430%	 
	Mar 15 2004

	 	 	97.96035945%	 
	Apr 15 2004

	 	 	98.42357155%	 
	May 15 2004

	 	 	98.87248194%	 
	Jun 15 2004

	 	 	99.32217397%	 
	Jul 15 2004

	 	 	99.75750873%	 
	Aug 15 2004

	 	 	98.64154394%	 
	Sep 15 2004

	 	 	99.07833340%	 
	Oct 15 2004

	 	 	99.50071258%	 
	Nov 15 2004

	 	 	99.92376440%	 
	Dec 15 2004

	 	 	100.34749160%	 
	Jan 15 2005

	 	 	100.75675487%	 
	Feb 15 2005

	 	 	97.57670754%	 
	Mar 15 2005

	 	 	97.97887437%	 
	Apr 15 2005

	 	 	98.38166504%	 
	May 15 2005

	 	 	98.77001443%	 
	Jun 15 2005

	 	 	99.15893089%	 
	Jul 15 2005

	 	 	99.53334907%	 
	Aug 15 2005

	 	 	98.40627035%	 
	Sep 15 2005

	 	 	98.78171028%	 
	Oct 15 2005

	 	 	99.14259655%	 
	Nov 15 2005

	 	 	99.50393706%	 
	Dec 15 2005

	 	 	99.86573365%	 
	Jan 15 2006

	 	 	100.21292054%	 
	Feb 15 2006

	 	 	96.91760836%	 
	Mar 15 2006

	 	 	97.25683503%	 
	Apr 15 2006

	 	 	97.59646291%	 
	May 15 2006

	 	 	97.92344726%	 
	Jun 15 2006

	 	 	98.25078252%	 
	Jul 15 2006

	 	 	98.56542375%	 
	Aug 15 2006

	 	 	97.43090485%	 
	Sep 15 2006

	 	 	97.74614772%	 
	Oct 15 2006

	 	 	98.04864685%	 
	Nov 15 2006

	 	 	98.35139631%	 
	Dec 15 2006

	 	 	98.65439710%	 
	Jan 15 2007

	 	 	98.94460387%	 
	Feb 15 2007

	 	 	95.53646899%	 
	Mar 15 2007

	 	 	95.81787588%	 
	Apr 15 2007

	 	 	96.09948423%	 
	May 15 2007

	 	 	96.37376416%	 
	Jun 15 2007

	 	 	96.64821625%	 
	Jul 15 2007

	 	 	96.91531053%	 
	Aug 15 2007

	 	 	95.78828899%	 
	Sep 15 2007

	 	 	96.05566915%	 
	Oct 15 2007

	 	 	96.31566242%	 
	Nov 15 2007

	 	 	96.57576917%	 
	Dec 15 2007

	 	 	96.83598985%	 
	Jan 15 2008

	 	 	97.08879424%	 
	Feb 15 2008

	 	 	93.58468465%	 
	Mar 15 2008

	 	 	93.82799200%	 
	Apr 15 2008

	 	 	94.07138397%	 
	May 15 2008

	 	 	94.30890890%	 
	Jun 15 2008

	 	 	94.54649469%	 
	Jul 15 2008

	 	 	94.77818959%	 
	Aug 15 2008

	 	 	93.67365446%	 
	Sep 15 2008

	 	 	93.90542333%	 
	Oct 15 2008

	 	 	94.13127741%	 
	Nov 15 2008

	 	 	94.35714440%	 
	Dec 15 2008

	 	 	94.58302435%	 
	Jan 15 2009

	 	 	94.80573551%	 
	Feb 15 2009

	 	 	91.21003818%	 
	Mar 15 2009

	 	 	91.42259565%	 
	Apr 15 2009

	 	 	91.63515311%	 
	May 15 2009

	 	 	91.84771058%	 
	Jun 15 2009

	 	 	92.06026805%	 

 

 

Schedule 2
to Network Lease

(NVG Network Statutory II Trust)

TERMINATION VALUES

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Termination Date	 	 	Termination Value	 
	 
	Jul 15 2009

	 	 	92.27332361%	 
	Aug 15 2009

	 	 	91.21103640%	 
	Sep 15 2009

	 	 	91.42409606%	 
	Oct 15 2009

	 	 	91.63879193%	 
	Nov 15 2009

	 	 	91.85349658%	 
	Dec 15 2009

	 	 	92.06821005%	 
	Jan 15 2010

	 	 	92.28456652%	 
	Feb 15 2010

	 	 	88.61801612%	 
	Mar 15 2010

	 	 	88.82373707%	 
	Apr 15 2010

	 	 	89.02947375%	 
	May 15 2010

	 	 	89.23694623%	 
	Jun 15 2010

	 	 	89.44444165%	 
	Jul 15 2010

	 	 	89.65368010%	 
	Aug 15 2010

	 	 	88.65160480%	 
	Sep 15 2010

	 	 	88.86090376%	 
	Oct 15 2010

	 	 	89.07195315%	 
	Nov 15 2010

	 	 	89.28304018%	 
	Dec 15 2010

	 	 	89.49416499%	 
	Jan 15 2011

	 	 	89.70704774%	 
	Feb 15 2011

	 	 	85.96927895%	 
	Mar 15 2011

	 	 	86.17104635%	 
	Apr 15 2011

	 	 	86.37285929%	 
	May 15 2011

	 	 	86.57652815%	 
	Jun 15 2011

	 	 	86.78025036%	 
	Jul 15 2011

	 	 	86.98583634%	 
	Aug 15 2011

	 	 	86.04737479%	 
	Sep 15 2011

	 	 	86.25308347%	 
	Oct 15 2011

	 	 	86.46066408%	 
	Nov 15 2011

	 	 	86.66831411%	 
	Dec 15 2011

	 	 	86.87603385%	 
	Jan 15 2012

	 	 	87.08563378%	 
	Feb 15 2012

	 	 	83.27341548%	 
	Mar 15 2012

	 	 	83.47139901%	 
	Apr 15 2012

	 	 	83.66946089%	 
	May 15 2012

	 	 	83.86950641%	 
	Jun 15 2012

	 	 	84.06963876%	 
	Jul 15 2012

	 	 	84.27176326%	 
	Aug 15 2012

	 	 	83.40050731%	 
	Sep 15 2012

	 	 	83.60282294%	 
	Oct 15 2012

	 	 	83.80713969%	 
	Nov 15 2012

	 	 	84.01156081%	 
	Dec 15 2012

	 	 	84.21608674%	 
	Jan 15 2013

	 	 	84.42262287%	 
	Feb 15 2013

	 	 	80.53257924%	 
	Mar 15 2013

	 	 	80.72697576%	 
	Apr 15 2013

	 	 	80.92148671%	 
	May 15 2013

	 	 	81.11811707%	 
	Jun 15 2013

	 	 	81.31487104%	 
	Jul 15 2013

	 	 	81.51375364%	 
	Aug 15 2013

	 	 	80.71349569%	 
	Sep 15 2013

	 	 	80.91264456%	 
	Oct 15 2013

	 	 	81.11393189%	 
	Nov 15 2013

	 	 	81.31536197%	 
	Dec 15 2013

	 	 	81.51693537%	 
	Jan 15 2014

	 	 	81.72065721%	 
	Feb 15 2014

	 	 	77.58773477%	 
	Mar 15 2014

	 	 	77.77810993%	 
	Apr 15 2014

	 	 	77.96863908%	 
	May 15 2014

	 	 	78.16143709%	 
	Jun 15 2014

	 	 	78.35439904%	 
	Jul 15 2014

	 	 	78.54963984%	 
	Aug 15 2014

	 	 	77.82769802%	 
	Sep 15 2014

	 	 	78.02328753%	 
	Oct 15 2014

	 	 	78.22116667%	 
	Nov 15 2014

	 	 	78.41923064%	 
	Dec 15 2014

	 	 	78.61748021%	 
	Jan 15 2015

	 	 	78.81803034%	 

 

 

Schedule 2 to Network Lease

(NVG Network Statutory II Trust)

TERMINATION VALUES

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Termination Date	 	 	Termination Value	 
	 
	Feb 15 2015

	 	 	73.59376843%	 
	Mar 15 2015

	 	 	73.77627155%	 
	Apr 15 2015

	 	 	73.95897209%	 
	May 15 2015

	 	 	74.14423772%	 
	Jun 15 2015

	 	 	74.32971212%	 
	Jul 15 2015

	 	 	74.51776300%	 
	Aug 15 2015

	 	 	73.89931412%	 
	Sep 15 2015

	 	 	74.08780634%	 
	Oct 15 2015

	 	 	74.27888744%	 
	Nov 15 2015

	 	 	74.47020121%	 
	Dec 15 2015

	 	 	74.66174860%	 
	Jan 15 2016

	 	 	74.85589743%	 
	Feb 15 2016

	 	 	69.50812413%	 
	Mar 15 2016

	 	 	69.68339322%	 
	Apr 15 2016

	 	 	69.85890961%	 
	May 15 2016

	 	 	70.03785083%	 
	Jun 15 2016

	 	 	70.21705442%	 
	Jul 15 2016

	 	 	70.39969801%	 
	Aug 15 2016

	 	 	69.89212689%	 
	Sep 15 2016

	 	 	70.07532679%	 
	Oct 15 2016

	 	 	70.26198310%	 
	Nov 15 2016

	 	 	70.44893349%	 
	Dec 15 2016

	 	 	70.63617916%	 
	Jan 15 2017

	 	 	70.82689786%	 
	Feb 15 2017

	 	 	65.35267968%	 
	Mar 15 2017

	 	 	65.52367097%	 
	Apr 15 2017

	 	 	65.69497559%	 
	May 15 2017

	 	 	65.86993516%	 
	Jun 15 2017

	 	 	66.04522437%	 
	Jul 15 2017

	 	 	66.22418489%	 
	Aug 15 2017

	 	 	65.83510051%	 
	Sep 15 2017

	 	 	66.01475459%	 
	Oct 15 2017

	 	 	66.19809793%	 
	Nov 15 2017

	 	 	66.38180535%	 
	Dec 15 2017

	 	 	66.56587835%	 
	Jan 15 2018

	 	 	66.75365875%	 
	Feb 15 2018

	 	 	61.14727365%	 
	Mar 15 2018

	 	 	61.31444162%	 
	Apr 15 2018

	 	 	61.48199504%	 
	May 15 2018

	 	 	61.65344792%	 
	Jun 15 2018

	 	 	61.82530386%	 
	Jul 15 2018

	 	 	62.00107695%	 
	Aug 15 2018

	 	 	61.73715162%	 
	Sep 15 2018

	 	 	61.91376806%	 
	Oct 15 2018

	 	 	62.09432119%	 
	Nov 15 2018

	 	 	62.27531477%	 
	Dec 15 2018

	 	 	62.45675062%	 
	Jan 15 2019

	 	 	62.64214297%	 
	Feb 15 2019

	 	 	56.89761343%	 
	Mar 15 2019

	 	 	57.06146933%	 
	Apr 15 2019

	 	 	57.22578935%	 
	May 15 2019

	 	 	57.39426861%	 
	Jun 15 2019

	 	 	57.56323099%	 
	Jul 15 2019

	 	 	57.73637168%	 
	Aug 15 2019

	 	 	57.60464945%	 
	Sep 15 2019

	 	 	57.77879675%	 
	Oct 15 2019

	 	 	57.95714366%	 
	Nov 15 2019

	 	 	58.13601423%	 
	Dec 15 2019

	 	 	58.31541062%	 
	Jan 15 2020

	 	 	58.49902819%	 
	Feb 15 2020

	 	 	52.61011000%	 
	Mar 15 2020

	 	 	52.77122646%	 
	Apr 15 2020

	 	 	52.93289274%	 
	May 15 2020

	 	 	53.09899420%	 
	Jun 15 2020

	 	 	53.26566596%	 
	Jul 15 2020

	 	 	53.43679346%	 
	Aug 15 2020

	 	 	53.44471061%	 

 

 

Schedule 2 to Network Lease

(NVG Network Statutory II Trust)

TERMINATION VALUES

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Termination Date	 	 	Termination Value	 
	 
	Sep 15 2020

	 	 	53.61702243%	 
	Oct 15 2020

	 	 	53.79381318%	 
	Nov 15 2020

	 	 	53.97121814%	 
	Dec 15 2020

	 	 	54.14923983%	 
	Jan 15 2021

	 	 	52.83176391%	 
	Feb 15 2021

	 	 	48.42543457%	 
	Mar 15 2021

	 	 	48.56906836%	 
	Apr 15 2021

	 	 	48.71318012%	 
	May 15 2021

	 	 	48.86166235%	 
	Jun 15 2021

	 	 	49.01064247%	 
	Jul 15 2021

	 	 	49.16401306%	 
	Aug 15 2021

	 	 	49.15410033%	 
	Sep 15 2021

	 	 	49.30850901%	 
	Oct 15 2021

	 	 	49.46733047%	 
	Nov 15 2021

	 	 	49.62669230%	 
	Dec 15 2021

	 	 	49.78659674%	 
	Jan 15 2022

	 	 	49.95093652%	 
	Feb 15 2022

	 	 	44.02634817%	 
	Mar 15 2022

	 	 	44.15164793%	 
	Apr 15 2022

	 	 	44.27735033%	 
	May 15 2022

	 	 	44.40734756%	 
	Jun 15 2022

	 	 	44.53776674%	 
	Jul 15 2022

	 	 	44.67250012%	 
	Aug 15 2022

	 	 	44.64387360%	 
	Sep 15 2022

	 	 	44.77949162%	 
	Oct 15 2022

	 	 	44.91944519%	 
	Nov 15 2022

	 	 	45.05986163%	 
	Dec 15 2022

	 	 	45.20074282%	 
	Jan 15 2023

	 	 	45.34598120%	 
	Feb 15 2023

	 	 	39.40221297%	 
	Mar 15 2023

	 	 	39.50825404%	 
	Apr 15 2023

	 	 	39.61461863%	 
	May 15 2023

	 	 	39.72519859%	 
	Jun 15 2023

	 	 	39.83612072%	 
	Jul 15 2023

	 	 	39.95127695%	 
	Aug 15 2023

	 	 	39.90299284%	 
	Sep 15 2023

	 	 	40.01887250%	 
	Oct 15 2023

	 	 	40.13900662%	 
	Nov 15 2023

	 	 	40.25952216%	 
	Dec 15 2023

	 	 	40.38042070%	 
	Jan 15 2024

	 	 	40.50559433%	 
	Feb 15 2024

	 	 	34.54167890%	 
	Mar 15 2024

	 	 	34.62748999%	 
	Apr 15 2024

	 	 	34.71354148%	 
	May 15 2024

	 	 	34.80372489%	 
	Jun 15 2024

	 	 	34.89416666%	 
	Jul 15 2024

	 	 	34.98875838%	 
	Aug 15 2024

	 	 	34.91982527%	 
	Sep 15 2024

	 	 	35.01497109%	 
	Oct 15 2024

	 	 	35.11428618%	 
	Nov 15 2024

	 	 	35.21389716%	 
	Dec 15 2024

	 	 	35.31380524%	 
	Jan 15 2025

	 	 	35.41790216%	 
	Feb 15 2025

	 	 	29.38453370%	 
	Mar 15 2025

	 	 	29.45465857%	 
	Apr 15 2025

	 	 	29.52499623%	 
	May 15 2025

	 	 	29.59950757%	 
	Jun 15 2025

	 	 	29.67424972%	 
	Jul 15 2025

	 	 	29.75318365%	 
	Aug 15 2025

	 	 	29.72235957%	 
	Sep 15 2025

	 	 	29.80179248%	 
	Oct 15 2025

	 	 	29.88543644%	 
	Nov 15 2025

	 	 	29.96934874%	 
	Dec 15 2025

	 	 	30.05353047%	 
	Jan 15 2026

	 	 	30.14194277%	 
	Feb 15 2026

	 	 	25.63863786%	 
	Mar 15 2026

	 	 	25.70929269%	 

 

 

Schedule 2 to Network Lease

(NVG Network Statutory II Trust)

TERMINATION VALUES

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Termination Date	 	Termination Value
	 
	Apr 15 2026

	 	 	25.78023782	%
	May 15 2026

	 	 	25.85557937	%
	Jun 15 2026

	 	 	25.93123048	%
	Jul 15 2026

	 	 	26.01129735	%
	Aug 15 2026

	 	 	26.09169318	%
	Sep 15 2026

	 	 	26.17241934	%
	Oct 15 2026

	 	 	26.25758211	%
	Nov 15 2026

	 	 	26.34309478	%
	Dec 15 2026

	 	 	26.42895880	%
	Jan 15 2027

	 	 	26.51928053	%
	Feb 15 2027

	 	 	26.60997338	%
	Mar 15 2027

	 	 	26.70103885	%
	Apr 15 2027

	 	 	26.79247848	%
	May 15 2027

	 	 	26.90473894	%
	Jun 15 2027

	 	 	27.01746065	%
	Jul 15 2027

	 	 	27.15109064	%
	Aug 15 2027

	 	 	27.28526967	%
	Sep 15 2027

	 	 	27.42000000	%
	Sep 26 2027

	 	 	25.92000000	%

 

 

Schedule 3 to Network Lease

(NVG Network Statutory II Trust)

PRICING ASSUMPTIONS

	 	 	 	 	 	 	 
	(1)
	 	Network Cost:	 	$	388,500,000.00	 
	 	 	 	 	 	 	 
	(2)
	 	Owner Lessor’s Cost:	 	$	130,000,000.00	 
	 	 	 	 	 	 	 
	(3)
	 	Equity Investment:	 	$	38,211,000.00	 
	 	 	 	 	 	 	 
	(4)
	 	Closing Date:	 	 	9/26/2003	 
	 	 	 	 	 	 	 
	(5)
	 	Assumed Tax Rate:	 	 	39.55	%
	 	 	 	 	 	 	 
	(6)
	 	Transaction Cost:	 	$	1,907,335.91	 
	 	 	 	 	 	 	 
	(7)
	 	Early Purchase Date:	 	 	1/15/2021	 
	 	 	 	 	 	 	 
	(8)
	 	Lessor Note:	 	 	4.929	%
	 
	 	Interest Rate:	 	 	 	 

 

 

Schedule 4 to Network Lease

(NVG Network Statutory II Trust)

EARLY PURCHASE PRICE AND INSTALLMENTS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Underpayment	 	 	Overpayment	 	 	 	 
	 	 	Early	 	Early	 	 	of	 	 	of	 	 	Early	 
	 	 	Purchase Date	 	Purchase Amount	 	 	Basic Lease Rent *	 	 	Basic Lease Rent *	 	 	Purchase Price	 
	 
	(1)
	 	Jan 15 2021	 	 	46,733,106.73	 	 	 	0.00	 	 	 	15,933,221.68	 	 	 	30,799,885.05	 
	(2)
	 	Apr 15 2021	 	 	7504,268.70	 	 	 	0.00	 	 	 	0.00	 	 	 	7,504,268.70	 
	(3)
	 	Jun 15 2021	 	 	7,504,268.70	 	 	 	0.00	 	 	 	0.00	 	 	 	7,504,268.70	 
	(4)
	 	Sep 15 2021	 	 	7,504,268.70	 	 	 	0.00	 	 	 	0.00	 	 	 	7,504,268.70	 
	(5)
	 	Dec 15 2021	 	 	7,504,268.70	 	 	 	0.00	 	 	 	0.00	 	 	 	7,504,268.70	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	76,750,181.53	 	 	 	00.00	 	 	 	15,933,221.68	 	 	 	60,816,959.85	 

 

	*	 Values are calculated without regard to any offset for
amounts of Basic Lease Rent that are
due and owing on such date: the total amount
due and payable by Lessee on such date is the sum of (i) the Early
Purchase Price and (ii) the amount of Basic
Lease Rent payable on
such date as set forth on Schedule 1A.

 

 

CONTROL, MONITORING AND DATA ANALYSIS NETWORK

NETWORK LEASE AGREEMENT (A3)

The
September 26, 2003, Network Lease Agreement (A1) between the Tennessee Valley
Authority (“TVA”), as lessee, and NVG Network I Statutory
Trust, as owner lessor, has
been filed. It is substantially similar to Network Lease Agreement (A3), except as noted
below:

Network
Lease Agreement (A3) covers an undivided 21.879021879 percent interest in the Control,
Monitoring and Data Analysis Network (“Network”).

In
consideration of NVG Network III Statutory Trust agreeing to lease the undivided interest in the Network to TVA,
TVA agrees to pay basic rent to NVG Network III Statutory Trust for the network lease
term as set out in the Schedule 1A, with explanatory schedules
1B, 1C, and 1D. Schedule
2 sets out the termination values applicable to this network lease. Schedule 3 describes
the pricing assumptions applicable to this network lease. Schedule 4 sets out the early
purchase price and installments applicable to this network lease.

These schedules for Network Lease Agreement (A3) follow on the next pages.

 

 

Schedule
1A to Network Lease

(NVG Network Statutory III Trust)

BASIC RENT PAYMENTS

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 
	Rent	 	 
	Payment Date	 	Percentage
	 
	Sep 26 2003
	 	0.00000000%
	Dec 26 2003
	 	0.60717044%
	Jan 15 2004
	 	8.18444750%
	Jul 15 2004
	 	1.61937326%
	Jan 15 2005
	 	3.59901053%
	Jul 15 2005
	 	1.57058510%
	Jan 15 2006
	 	3.65026422%
	Jul 15 2006
	 	1.51933141%
	Jan 15 2007
	 	3.70410804%
	Jul 15 2007
	 	1.46548759%
	Jan 15 2008
	 	3.76067288%
	Jul 15 2008
	 	1.40892275%
	Jan 15 2009
	 	3.82009625%
	Jul 15 2009
	 	1.34949938%
	Jan 15 2010
	 	3.88252261%
	Jul 15 2010
	 	1.28707302%
	Jan 15 2011
	 	3.94810371%
	Jul 15 2011
	 	1.22149192%
	Jan 15 2012
	 	4.01699898%
	Jul 15 2012
	 	1.15259664%
	Jan 15 2013
	 	4.08937591%
	Jul 15 2013
	 	1.08021972%
	Jan 15 2014
	 	4.32899564%
	Jul 15 2014
	 	1.00015364%
	Jan 15 2015
	 	5.42733617%
	Jul 15 2015
	 	0.89104572%
	Jan 15 2016
	 	5.54195790%
	Jul 15 2016
	 	0.77642399%
	Jan 15 2017
	 	5.66237209%
	Jul 15 2017
	 	0.65600980%
	Jan 15 2018
	 	5.78887147%
	Jul 15 2018
	 	0.52951043%
	Jan 15 2019
	 	5.92176354%
	Jul 15 2019
	 	0.39661835%
	Jan 15 2020
	 	6.06137138%
	Jul 15 2020
	 	0.25701051%
	Jan 15 2021
	 	6.06137138%
	Jul 15 2021
	 	0.25701051%
	Jan 15 2022
	 	6.06137138%
	Jul 15 2022
	 	0.25701051%
	Jan 15 2023
	 	6.18588824%
	Jul 15 2023
	 	0.13249365%
	Jan 15 2024
	 	6.31838189%
	Jul 15 2024
	 	0.00000000%
	Jan 15 2025
	 	6.31838189%
	Jul 15 2025
	 	0.00000000%
	Jan 15 2026
	 	4.65103111%
	Jul 15 2026
	 	0.00000000%
	Jan 15 2027
	 	0.00000000%
	Jul 15 2027
	 	0.00000000%
	Sep 26 2027
	 	0.00000000%

 

 

Schedule
1B to Network Lease

(NVG Network Statutory III Trust)

ALLOCATED RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	From and	 	To and	 	Basic Rent
	Including	 	Including	 	Allocated
	 
	Sep 26 2003
	 	Dec 25 2003	 	0.00000000%
	Dec 26 2003
	 	Jan 14 2004	 	0.27283977%
	Jan 15 2004
	 	Jul 14 2004	 	4.96855580%
	Jul
15 2004
	 	Jan 14 2005	 	0.00000000%
	Jan 15 2005
	 	Jul 14 2005	 	5.16959563%
	Jul 15 2005
	 	Jan 14 2006	 	0.00000000%
	Jan 15 2006
	 	Jul 14 2006	 	0.00000000%
	Jul 15 2006
	 	Jan 14 2007	 	5.60558562%
	Jan 15 2007
	 	Jul 14 2007	 	4.73360564%
	Jul 15 2007
	 	Jan 14 2008	 	0.00000000%
	Jan 15 2008
	 	Jul 14 2008	 	5.16959563%
	Jul 15 2008
	 	Jan 14 2009	 	0.00000000%
	Jan 15 2009
	 	Jul 14 2009	 	5.16959563%
	Jul 15 2009
	 	Jan 14 2010	 	0.00000000%
	Jan 15 2010
	 	Jul 14 2010	 	0.00000000%
	Jul 15 2010
	 	Jan 14 2011	 	5.60558562%
	Jan 15 2011
	 	Jul 14 2011	 	4.73360564%
	Jul
15 2011
	 	Jan 14 2012	 	0.00000000%
	Jan 15 2012
	 	Jul 14 2012	 	0.00000000%
	Jul 15 2012
	 	Jan 14 2013	 	5.60558562%
	Jan 15 2013
	 	Jul 14 2013	 	0.00000000%
	Jul 15 2013
	 	Jan 14 2014	 	5.13282539%
	Jan 15 2014
	 	Jul 14 2014	 	4.77037588%
	Jul 15 2014
	 	Jan 14 2015	 	0.00000000%
	Jan 15 2015
	 	Jul 14 2015	 	0.00000000%
	Jul 15 2015
	 	Jan 14 2016	 	5.77859560%
	Jan 15 2016
	 	Jul 14 2016	 	5.86893557%
	Jul 15 2016
	 	Jan 14 2017	 	0.00000000%
	Jan 15 2017
	 	Jul 14 2017	 	0.00000000%
	Jul 15 2017
	 	Jan l4 2018	 	6.85125747%
	Jan 15 2018
	 	Jul 14 2018	 	5.78550631%
	Jul 15 2018
	 	Jan 14 2019	 	0.00000000%
	Jan l5 2019
	 	Jul 14 2019	 	0.00000000%
	Jul 15 2019
	 	Jan 14 2020	 	6.85125747%
	Jan 15 2020
	 	Jul 14 2020	 	0.00000000%
	Jul 15 2020
	 	Jan 14 2021	 	6.27344058%
	Jan 15 2021
	 	Jul 14 2021	 	5.83044762%
	Jul 15 2021
	 	Jan 14 2022	 	0.00000000%
	Jan 15 2022
	 	Jul 14 2022	 	6.31838189%
	Jul 15 2022
	 	Jan 14 2023	 	0.00000000%
	Jan 15 2023
	 	Jul 14 2023	 	0.00000000%
	Jul 15 2023
	 	Jan 14 2024	 	6.85125747%
	Jan 15 2024
	 	Jul 14 2024	 	5.78550631%
	Jul 15 2024
	 	Jan 14 2025	 	0.00000000%
	Jan 15 2025
	 	Jul 14 2025	 	0.00000000%
	Jul 15 2025
	 	Jan 14 2026	 	6.85125747%
	Jan 15 2026
	 	Jul 14 2026	 	0.00000000%
	Jul 15 2026
	 	Jan 14 2027	 	6.27344058%
	Jan 15 2027
	 	Jul 14 2027	 	4.16309685%
	Jul 15 2027
	 	Sep 26 2027	 	0.00000000%

 

 

Schedule 1C to Network Lease

(NVG Network Statutory III Trust)

ATTRIBUTION OF BASIC LEASE RENT PAYMENTS TO ALLOCATIONS OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 
	 	 	 	 	Allocated	 	Allocated
	Rent Payment Date	 	Basic Lease Rent	 	From and Including	 	To and Including
	 
	Sep 26 2003
	 	0.00000000%	 	 	 	 
	Dec 26 2003
	 	0.60717044%	 	Dec 26 2003	 	Jul 14 2004
	Jan 15 2004
	 	8.18444750%	 	Jan 15 2004	 	Jul 14 2005
	Jul 15 2004
	 	1.61937326%	 	Jan 15 2005	 	Jul 14 2005
	Jan 15 2005
	 	3.59901053%	 	Jul 15 2006	 	Jan 14 2007
	Jul 15 2005
	 	1.57058510%	 	Jul 15 2006	 	Jan 14 2007
	Jan 15 2006
	 	3.65026422%	 	Jul 15 2006	 	Jul 14 2007
	Jul 15 2006
	 	1.51933141%	 	Jan 15 2007	 	Jul 14 2007
	Jan 15 2007
	 	3.70410804%	 	Jan 15 2008	 	Jul 14 2008
	Jul 15 2007
	 	1.46548759%	 	Jan 15 2008	 	Jul 14 2008
	Jan 15 2008
	 	3.76067288%	 	Jan 15 2009	 	Jul 14 2009
	Jul 15 2008
	 	1.40892275%	 	Jan 15 2009	 	Jul 14 2009
	Jan 15 2009
	 	3.82009625%	 	Jul 15 2010	 	Jan 14 2011
	Jul 15 2009
	 	1.34949938%	 	Jul 15 2010	 	Jan 14 2011
	Jan 15 2010
	 	3.88252261%	 	Jul 15 2010	 	Jul 14 2011
	Jul 15 2010
	 	1.28707302%	 	Jan 15 2011	 	Jul 14 2011
	Jan 15 2011
	 	3.94810371%	 	Jul 15 2012	 	Jan 14 2013
	Jul 15 2011
	 	1.22149192%	 	Jul 15 2012	 	Jan 14 2013
	Jan 15 2012
	 	4.01699898%	 	Jul 15 2012	 	Jan 14 2014
	Jul 15 2012
	 	1.15259664%	 	Jul 15 2013	 	Jan 14 2014
	Jan 15 2013
	 	4.08937591%	 	Jul 15 2013	 	Jul 14 2014
	Jul 15 2013
	 	1.08021972%	 	Jan 15 2014	 	Jul 14 2014
	Jan 15 2014
	 	4.32899564%	 	Jul 15 2015	 	Jan 14 2016
	Jul 15 2014
	 	1.00015364%	 	Jul 15 2015	 	Jan 14 2016
	Jan
 15 2015
	 	5.42733617%	 	Jul 15 2015	 	Jul 14 2016
	Jul 15 2015
	 	0.89104572%	 	Jan 15 2016	 	Jul 14 2016
	Jan 15 2016
	 	5.54195790%	 	Jul 15 2017	 	Jan 14 2018
	Jul 15 2016
	 	0.77642399%	 	Jul 15 2017	 	Jan 14 2018
	Jan 15 2017
	 	5.66237209%	 	Jul 15 2017	 	Jul 14 2018
	Jul 15 2017
	 	0.65600980%	 	Jan 15 2018	 	Jul 14 2018
	Jan 15 2018
	 	5.78887147%	 	Jul 15 2019	 	Jan 14 2020
	Jul 15 2018
	 	0.52951043%	 	Jul 15 2019	 	Jan 14 2020
	Jan 15 2019
	 	5.92176354%	 	Jul 15 2019	 	Jan 14 2021
	Jul 15 2019
	 	0.39661835%	 	Jul 15 2020	 	Jan 14 2021
	Jan 15 2020
	 	6.06137138%	 	Jul 15 2020	 	Jul 14 2021
	Jul 15 2020
	 	0.25701051%	 	Jan 15 2021	 	Jul 14 2021
	Jan 15 2021
	 	6.06137138%	 	Jan 15 2022	 	Jul 14 2022
	Jul 15 2021
	 	0.25701051%	 	Jan 15 2022	 	Jul 14 2022
	Jan 15 2022
	 	6.06137138%	 	Jul 15 2023	 	Jan 14 2024
	Jul 15 2022
	 	0.25701051%	 	Jul 15 2023	 	Jan 14 2024
	Jan 15 2023
	 	6.18588824%	 	Jul 15 2023	 	Jul 14 2024
	Jul 15 2023
	 	0.13249365%	 	Jan 15 2024	 	Jul 14 2024
	Jan 15 2024
	 	6.31838189%	 	Jul 15 2025	 	Jan 14 2026
	Jul 15 2024
	 	0.00000000%	 	 	 	 
	Jan 15 2025
	 	6.31838189%	 	Jul 15 2025	 	Jan 14 2027
	Jul 15 2025
	 	0.00000000%	 	 	 	 
	Jan 15 2026
	 	4.65103111%	 	Jul 15 2026	 	Jul 14 2027
	Jul 15 2026
	 	0.00000000%	 	 	 	 
	Jan 15 2027
	 	0.00000000%	 	 	 	 
	Jul 15 2027
	 	0.00000000%	 	 	 	 
	Sep 26 2027
	 	0.00000000%	 	 	 	 

 

 

Schedule 1D to Network Lease

(NVG Network Statutory III Trust)

OVERPAYMENTS AND UNDERPAYMENTS

OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	(a)             	 	(b)	 	(c)
	 	 	Underpayment	 	Overpayment
	Termination Date	 	of Basic Lease Rent	 	of Basic Lease Rent
	 
	Dec 26 2003
	 	0.00000000%	 	0.00000000%
	Jan 15 2004
	 	0.00000000%	 	0.33433067%
	Feb 15 2004
	 	0.00000000%	 	7.69068553%
	Mar 15 2004
	 	0.00000000%	 	6.86259290%
	Apr 15 2004
	 	0.00000000%	 	6.03450027%
	May 15 2004
	 	0.00000000%	 	5.20640763%
	Jun 15 2004
	 	0.00000000%	 	4.37831500%
	Jul 15 2004
	 	0.00000000%	 	3.55022237%
	Aug 15 2004
	 	0.00000000%	 	5.16959563%
	Sep 15 2004
	 	0.00000000%	 	5.16959563%
	Oct 15 2004
	 	0.00000000%	 	5.16959563%
	Nov 15 2004
	 	0.00000000%	 	5.16959563%
	Dec 15 2004
	 	0.00000000%	 	5.16959563%
	Jan 15 2005
	 	0.00000000%	 	5.16959563%
	Feb 15 2005
	 	0.00000000%	 	7.90700689%
	Mar 15 2005
	 	0.00000000%	 	7.04540761%
	Apr 15 2005
	 	0.00000000%	 	6.18380834%
	May 15 2005
	 	0.00000000%	 	5.32220907%
	Jun 15 2005
	 	0.00000000%	 	4.46060980%
	Jul 15 2005
	 	0.00000000%	 	3.59901053%
	Aug 15 2005
	 	0.00000000%	 	5.16959563%
	Sep 15 2005
	 	0.00000000%	 	5.16959563%
	Oct 15 2005
	 	0.00000000%	 	5.16959563%
	Nov 15 2005
	 	0.00000000%	 	5.16959563%
	Dec 15 2005
	 	0.00000000%	 	5.16959563%
	Jan 15 2006
	 	0.00000000%	 	5.16959563%
	Feb 15 2006
	 	0.00000000%	 	8.81985985%
	Mar 15 2006
	 	0.00000000%	 	8.81985985%
	Apr 15 2006
	 	0.00000000%	 	8.81985985%
	May 15 2006
	 	0.00000000%	 	8.81985985%
	Jun 15 2006
	 	0.00000000%	 	8.81985985%
	Jul 15 2006
	 	0.00000000%	 	8.81985985%
	Aug 15 2006
	 	0.00000000%	 	9.40492699%
	Sep 15 2006
	 	0.00000000%	 	8.47066272%
	Oct 15 2006
	 	0.00000000%	 	7.53639845%
	Nov 15 2006
	 	0.00000000%	 	6.60213418%
	Dec 15 2006
	 	0.00000000%	 	5.66786991%
	Jan 15 2007
	 	0.00000000%	 	4.73360564%
	Feb 15 2007
	 	0.00000000%	 	7.64877940%
	Mar 15 2007
	 	0.00000000%	 	6.85984513%
	Apr 15 2007
	 	0.00000000%	 	6.07091086%
	May 15 2007
	 	0.00000000%	 	5.28197659%
	Jun 15 2007
	 	0.00000000%	 	4.49304231%
	Jul 15 2007
	 	0.00000000%	 	3.70410804%
	Aug 15 2007
	 	0.00000000%	 	5.16959563%
	Sep 15 2007
	 	0.00000000%	 	5.16959563%
	Oct 15 2007
	 	0.00000000%	 	5.16959563%
	Nov 15 2007
	 	0.00000000%	 	5.16959563%
	Dec 15 2007
	 	0.00000000%	 	5.16959563%
	Jan 15 2008
	 	0.00000000%	 	5.16959563%
	Feb 15 2008
	 	0.00000000%	 	8.06866924%
	Mar 15 2008
	 	0.00000000%	 	7.20706997%
	Apr 15 2008
	 	0.00000000%	 	6.34547070%
	May 15 2008
	 	0.00000000%	 	5.48387142%
	Jun 15 2008
	 	0.00000000%	 	4.62227215%
	Jul 15 2008
	 	0.00000000%	 	3.76067288%
	Aug 15 2008
	 	0.00000000%	 	5.16959563%
	Sep 15 2008
	 	0.00000000%	 	5.16959563%
	Oct 15 2008
	 	0.00000000%	 	5.16959563%
	Nov 15 2008
	 	0.00000000%	 	5.16959563%
	Dec 15 2008
	 	0.00000000%	 	5.16959563%
	Jan 15 2009
	 	0.00000000%	 	5.16959563%
	Feb 15 2009
	 	0.00000000%	 	8.12809261%
	Mar 15 2009
	 	0.00000000%	 	7.26649334%

 

 

Schedule 1D to Network Lease

(NVG Network Statutory III Trust)

OVERPAYMENTS AND UNDERPAYMENTS

OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	(a)              	 	(b)        	 	(c)             
	 	 	Underpayment	 	Overpayment
	Termination Date	 	of Basic Lease Rent	 	of Basic Lease Rent
	 
	Apr 15 2009
	 	0.00000000%	 	6.40489407%
	May 15 2009
	 	0.00000000%	 	5.54329480%
	Jun 15 2009
	 	0.00000000%	 	4.68169552%
	Jul 15 2009
	 	0.00000000%	 	3.82009625%
	Aug 15 2009
	 	0.00000000%	 	5.16959563%
	Sep 15 2009
	 	0.00000000%	 	5.16959563%
	Oct 15 2009
	 	0.00000000%	 	5.16959563%
	Nov 15 2009
	 	0.00000000%	 	5.16959563%
	Dec 15 2009
	 	0.00000000%	 	5.16959563%
	Jan 15 2010
	 	0.00000000%	 	5.16959563%
	Feb 15 2010
	 	0.00000000%	 	9.05211824%
	Mar 15 2010
	 	0.00000000%	 	9.05211824%
	Apr 15 2010
	 	0.00000000%	 	9.05211824%
	May 15 2010
	 	0.00000000%	 	9.05211824%
	Jun 15 2010
	 	0.00000000%	 	9.05211824%
	Jul 15 2010
	 	0.00000000%	 	9.05211824%
	Aug 15 2010
	 	0.00000000%	 	9.40492699%
	Sep 15 2010
	 	0.00000000%	 	8.47066272%
	Oct 15 2010
	 	0.00000000%	 	7.53639845%
	Nov 15 2010
	 	0.00000000%	 	6.60213418%
	Dec 15 2010
	 	0.00000000%	 	5.66786991%
	Jan 15 2011
	 	0.00000000%	 	4.73360564%
	Feb 15 2011
	 	0.00000000%	 	7.89277507%
	Mar 15 2011
	 	0.00000000%	 	7.10384080%
	Apr 15 2011
	 	0.00000000%	 	6.31490653%
	May 15 2011
	 	0.00000000%	 	5.52597226%
	Jun 15 2011
	 	0.00000000%	 	4.73703798%
	Jul 15 2011
	 	0.00000000%	 	3.94810371%
	Aug 15 2011
	 	0.00000000%	 	5.16959563%
	Sep 15 2011
	 	0.00000000%	 	5.16959563%
	Oct 15 2011
	 	0.00000000%	 	5.16959563%
	Nov 15 2011
	 	0.00000000%	 	5.16959563%
	Dec l5 2011
	 	0.00000000%	 	5.16959561%
	Jan 15 2012
	 	0.00000000%	 	5.16959563%
	Feb 15 2012
	 	0.00000000%	 	9.18659461%
	Mar 15 2012
	 	0.00000000%	 	9.18659461%
	Apr 15 2012
	 	0.00000000%	 	9.18659461%
	May 15 2012
	 	0.00000000%	 	9.18659461%
	Jun 15 2012
	 	0.00000000%	 	9.18659461%
	Jul 15 2012
	 	0.00000000%	 	9.18659461%
	Aug 15 2012
	 	0.00000000%	 	9.40492699%
	Sep 15 2012
	 	0.00000000%	 	8.47066272%
	Oct 15 2012
	 	0.00000000%	 	7.53639845%
	Nov 15 2012
	 	0.00000000%	 	6.60213418%
	Dec 15 2012
	 	0.00000000%	 	5.66786991%
	Jan 15 2013
	 	0.00000000%	 	4.73360564%
	Feb
l5 2013
	 	0.00000000%	 	8.82298154%
	Mar 15 2013
	 	0.00000000%	 	8.82298154%
	Apr 15 2013
	 	0.00000000%	 	8.82298154%
	May 15 2013
	 	0.00000000%	 	8.82298154%
	Jun 15 2013
	 	0.00000000%	 	8.82298154%
	Jul 15 2013
	 	0.00000000%	 	8.82298154%
	Aug 15 2013
	 	0.00000000%	 	9.04773037%
	Sep 15 2013
	 	0.00000000%	 	8.19225947%
	Oct 15 2013
	 	0.00000000%	 	7.33678857%
	Nov 15 2013
	 	0.00000000%	 	6.48131767%
	Dec 15 2013
	 	0.00000000%	 	5.62584677%
	Jan 15 2014
	 	0.00000000%	 	4.77037588%
	Feb 15 2014
	 	0.00000000%	 	8.30430887%
	Mar 15 2014
	 	0.00000000%	 	7.50924622%
	Apr 15 2014
	 	0.00000000%	 	6.71418358%
	May l5 2014
	 	0.00000000%	 	5.91912093%
	Jun 15 2014
	 	0.00000000%	 	5.12405829%
	Jul 15 2014
	 	0.00000000%	 	4.32899564%

 

 

Schedule 1D to Network Lease

(NVG Network Statutory III Trust)

OVERPAYMENTS AND UNDERPAYMENTS

OF BASIC LEASE RENT

 (Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	(a)	 		(b)		 		(c)	
		 		Underpayment		 		Overpayment	
	Termination Date	 		of Basic Lease Rent		 		of Basic Lease Rent	
	 
	Aug 15 2014
	 	 	0.00000000%		 	 	5.32914928%	
	Sep 15 2014
	 	 	0.00000000%		 	 	5.32914928%	
	Oct 15 2014
	 	 	0.00000000%		 	 	5.32914928%	
	Nov 15 2014
	 	 	0.00000000%		 	 	5.32914928%	
	Dec 15 2014
	 	 	0.00000000%		 	 	5.32914928%	
	Jan 15 2015
	 	 	0.00000000%		 	 	5.32914928%	
	Feb 15 2015
	 	 	0.00000000%		 	 	10.75648544%	
	Mar 15 2015
	 	 	0.00000000%		 	 	10.75648544%	
	Apr 15 2015
	 	 	0.00000000%		 	 	10.75648544%	
	May 15 2015
	 	 	0.00000000%		 	 	10.75648544%	
	Jun 15 2015
	 	 	0.00000000%		 	 	10.75648544%	
	Jul 15 2015
	 	 	0.00000000%		 	 	10.75648544%	
	Aug 15 2015
	 	 	0.00000000%		 	 	10.68443190%	
	Sep 15 2015
	 	 	0.00000000%		 	 	9.72133263%	
	Oct 15 2015
	 	 	0.00000000%		 	 	8.75823337%	
	Nov 15 2015
	 	 	0.00000000%		 	 	7.79513410%	
	Dec 15 2015
	 	 	0.00000000%		 	 	6.83203483%	
	Jan 15 2016
	 	 	0.00000000%		 	 	5.86893557%	
	Feb 15 2016
	 	 	0.00000000%		 	 	10.43273754%	
	Mar 15 2016
	 	 	0.00000000%		 	 	9.45458161%	
	Apr 15 2016
	 	 	0.00000000%		 	 	8.47642568%	
	May 15 2016
	 	 	0.00000000%		 	 	7.49826976%	
	Jun 15 2016
	 	 	0.00000000%		 	 	6.52011383%	
	Jul 15 2016
	 	 	0.00000000%		 	 	5.54195790%	
	Aug 15 2016
	 	 	0.00000000%		 	 	6.31838189%	
	Sep 15 2016
	 	 	0.00000000%		 	 	6.31838189%	
	Oct 15 2016
	 	 	0.00000000%		 	 	6.31838189%	
	Nov 15 2016
	 	 	0.00000000%		 	 	6.31838189%	
	Dec 15 2016
	 	 	0.00000000%		 	 	6.31838189%	
	Jan 15 2017
	 	 	0.00000000%		 	 	6.31838189%	
	Feb l5 2017
	 	 	0.00000000%		 	 	11.98075398%	
	Mar 15 2017
	 	 	0.00000000%		 	 	11.98075398%	
	Apr 15 2017
	 	 	0.00000000%		 	 	11.98075398%	
	May 15 2017
	 	 	0.00000000%		 	 	11.98075398%	
	Jun l5 2017
	 	 	0.00000000%		 	 	11.98075398%	
	Jul 15 2017
	 	 	0.00000000%		 	 	11.98075398%	
	Aug l5 2017
	 	 	0.00000000%		 	 	11.49488754%	
	Sep 15 2017
	 	 	0.00000000%		 	 	10.35301129%	
	Oct 15 2017
	 	 	0.00000000%		 	 	9.21113505%	
	Nov 15 2017
	 	 	0.00000000%		 	 	8.06925880%	
	Dec 15 2017
	 	 	0.00000000%		 	 	6.92738256%	
	Jan 15 2018
	 	 	0.00000000%		 	 	5.78550631%	
	Feb 15 2018
	 	 	0.00000000%		 	 	10.61012673%	
	Mar 15 2018
	 	 	0.00000000%		 	 	9.64587567%	
	Apr 15 2018
	 	 	0.00000000%		 	 	8.68162462%	
	May 15 2018
	 	 	0.00000000%		 	 	7.71737357%	
	Jun 15 2018
	 	 	0.00000000%		 	 	6.75312252%	
	Jul 15 2018
	 	 	0.00000000%		 	 	5.78887147%	
	Aug 15 2018
	 	 	0.00000000%		 	 	6.31838189%	
	Sep 15 2018
	 	 	0.00000000%		 	 	6.31838189%	
	Oct 15 2018
	 	 	0.00000000%		 	 	6.31838189%	
	Nov 15 2018
	 	 	0.00000000%		 	 	6.31838189%	
	Dec 15 2018
	 	 	0.00000000%		 	 	6.31838189%	
	Jan 15 2019
	 	 	0.00000000%		 	 	6.31838189%	
	Feb 15 2019
	 	 	0.00000000%		 	 	12.24014544%	
	Mar 15 2019
	 	 	0.00000000%		 	 	12.24014544%	
	Apr 15 2019
	 	 	0.00000000%		 	 	12.24014544%	
	May 15 2019
	 	 	0.00000000%		 	 	12.24014544%	
	Jun 15 2019
	 	 	0.00000000%		 	 	12.24014544%	
	Jul 15 2019
	 	 	0.00000000%		 	 	12.24014544%	
	Aug 15 2019
	 	 	0.00000000%		 	 	11.49488754%	
	Sep 15 2019
	 	 	0.00000000%		 	 	10.35301129%	
	Oct 15 2019
	 	 	0.00000000%		 	 	9.21113505%	
	Nov 15 2019
	 	 	0.00000000%		 	 	8.06925880%	

 

 

Schedule 1D to Network Lease

(NVG Network Statutory III Trust)

OVERPAYMENTS AND UNDERPAYMENTS

OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	(a)	 		(b)		 		(c)	
		 		Underpayment		 		Overpayment	
	Termination Date	 		of Basic Lease Rent		 		of Basic Lease Rent	
	 
	Dec 15 2019
	 	 	0.00000000%		 	 	6.92738256%	
	Jan 15 2020
	 	 	0.00000000%		 	 	5.78550631%	
	Feb 15 2020
	 	 	0.00000000%		 	 	11.84687769%	
	Mar 15 2020
	 	 	0.00000000%		 	 	11.84687769%	
	Apr 15 2020
	 	 	0.00000000%		 	 	11.84687769%	
	May 15 2020
	 	 	0.00000000%		 	 	11.84687769%	
	Jun 15 2020
	 	 	0.00000000%		 	 	11.84687769%	
	Jul
15 2020
	 	 	0.00000000%		 	 	11.84687769%	
	Aug 15 2020
	 	 	0.00000000%		 	 	11.05831477%	
	Sep l5 2020
	 	 	0.00000000%		 	 	10.01274134%	
	Oct 15 2020
	 	 	0.00000000%		 	 	8.96716791%	
	Nov 15 2020
	 	 	0.00000000%		 	 	7.92159448%	
	Dec 15 2020
	 	 	0.00000000%		 	 	6.87602105%	
	Jan 15 2021
	 	 	0.00000000%		 	 	5.83044762%	
	Feb 15 2021
	 	 	0.00000000%		 	 	10.92007774%	
	Mar 15 2021
	 	 	0.00000000%		 	 	9.94833647%	
	Apr 15 2021
	 	 	0.00000000%		 	 	8.97659520%	
	May 15 2021
	 	 	0.00000000%		 	 	8.00485392%	
	Jun 15 2021
	 	 	0.00000000%		 	 	7.03311265%	
	Jul 15 2021
	 	 	0.00000000%		 	 	6.06137138%	
	Aug 15 2021
	 	 	0.00000000%		 	 	6.31838189%	
	Sep 15 2021
	 	 	0.00000000%		 	 	6.31838189%	
	Oct l5 2021
	 	 	0.00000000%		 	 	6.31838189%	
	Nov 15 2021
	 	 	0.00000000%		 	 	6.31838189%	
	Dec 15 2021
	 	 	0.00000000%		 	 	6.31838189%	
	Jan 15 2022
	 	 	0.00000000%		 	 	6.31838189%	
	Feb 15 2022
	 	 	0.00000000%		 	 	11.32668963%	
	Mar 15 2022
	 	 	0.00000000%		 	 	10.27362598%	
	Apr 15 2022
	 	 	0.00000000%		 	 	9.22056233%	
	May 15 2022
	 	 	0.00000000%		 	 	8.16749868%	
	Jun 15 2022
	 	 	0.00000000%		 	 	7.11443503%	
	Jul 15 2022
	 	 	0.00000000%		 	 	6.06137138%	
	Aug 15 2022
	 	 	0.00000000%		 	 	6.31838189%	
	Sep 15 2022
	 	 	0.00000000%		 	 	6.31838189%	
	Oct 15 2022
	 	 	0.00000000%		 	 	6.31838189%	
	Nov 15 2022
	 	 	0.00000000%		 	 	6.31838189%	
	Dec 15 2022
	 	 	0.00000000%		 	 	6.31838189%	
	Jan 15 2023
	 	 	0.00000000%		 	 	6.31838189%	
	Feb 15 2023
	 	 	0.00000000%		 	 	12.50427013%	
	Mar 15 2023
	 	 	0.00000000%		 	 	12.50427013%	
	Apr 15 2023
	 	 	0.00000000%		 	 	12.50427013%	
	May 15 2023
	 	 	0.00000000%		 	 	12.50427013%	
	Jun 15 2023
	 	 	0.00000000%		 	 	12.50427013%	
	Jul 15 2023
	 	 	0.00000000%		 	 	12.50427013%	
	Aug l5 2023
	 	 	0.00000000%		 	 	11.49488754%	
	Sep 15 2023
	 	 	0.00000000%		 	 	10.35301129%	
	Oct 15 2023
	 	 	0.00000000%		 	 	9.21113505%	
	Nov 15 2023
	 	 	0.00000000%		 	 	8.06925880%	
	Dec 15 2023
	 	 	0.00000000%		 	 	6.92738256%	
	Jan 15 2024
	 	 	0.00000000%		 	 	5.78550631%	
	Feb 15 2024
	 	 	0.00000000%		 	 	11.13963715%	
	Mar 15 2024
	 	 	0.00000000%		 	 	10.17538610%	
	Apr 15 2024
	 	 	0.00000000%		 	 	9.21113505%	
	May 15 2024
	 	 	0.00000000%		 	 	8.24688400%	
	Jun l5 2024
	 	 	0.00000000%		 	 	7.28263294%	
	Jul 15 2024
	 	 	0.00000000%		 	 	6.31838189%	
	Aug l5 2024
	 	 	0.00000000%		 	 	6.31838189%	
	Sep 15 2024
	 	 	0.00000000%		 	 	6.31838189%	
	Oct 15 2024
	 	 	0.00000000%		 	 	6.31838189%	
	Nov 15 2024
	 	 	0.00000000%		 	 	6.31838189%	
	Dec 15 2024
	 	 	0.00000000%		 	 	6.31838189%	
	Jan 15 2025
	 	 	0.00000000%		 	 	6.31838189%	
	Feb 15 2025
	 	 	0.00000000%		 	 	12.63676378%	
	Mar 15 2025
	 	 	0.00000000%		 	 	12.63676378%	

 

 

Schedule 1D to Network Lease

(NVG Network Statutory III Trust)

OVERPAYMENTS AND UNDERPAYMENTS

OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	(a)	 		(b)		 		(c)	
		 		Underpayment		 		Overpayment	
	Termination Date	 		of Basic Lease Rent		 		of Basic Lease Rent	
	 
	Apr 15 2025
	 	 	0.00000000%		 	 	12.63676378%	
	May 15 2025
	 	 	0.00000000%		 	 	12.63676378%	
	Jun 15 2025
	 	 	0.00000000%		 	 	12.63676378%	
	Jul 15 2025
	 	 	0.00000000%		 	 	12.63676378%	
	Aug l5 2025
	 	 	0.00000000%		 	 	11.49488754%	
	Sep 15 2025
	 	 	0.00000000%		 	 	10.35301129%	
	Oct l5 2025
	 	 	0.00000000%		 	 	9.21113505%	
	Nov l5 2025
	 	 	0.00000000%		 	 	8.06925880%	
	Dec 15 2025
	 	 	0.00000000%		 	 	6.92738256%	
	Jan 15 2026
	 	 	0.00000000%		 	 	5.78550631%	
	Feb 15 2026
	 	 	0.00000000%		 	 	10.43653743%	
	Mar 15 2026
	 	 	0.00000000%		 	 	10.43653743%	
	Apr 15 2026
	 	 	0.00000000%		 	 	10.43653743%	
	May 15 2026
	 	 	0.00000000%		 	 	10.43653743%	
	Jun 15 2026
	 	 	0.00000000%		 	 	10.43653743%	
	Jul 15 2026
	 	 	0.00000000%		 	 	10.43653743%	
	Aug 15 2026
	 	 	0.00000000%		 	 	9.39096400%	
	Sep 15 2026
	 	 	0.00000000%		 	 	8.34539057%	
	Oct 15 2026
	 	 	0.00000000%		 	 	7.29981714%	
	Nov 15 2026
	 	 	0.00000000%		 	 	6.25424371%	
	Dec 15 2026
	 	 	0.00000000%		 	 	5.20867028%	
	Jan 15 2027
	 	 	0.00000000%		 	 	4.16309685%	
	Feb 15 2027
	 	 	0.00000000%		 	 	3.46924737%	
	Mar 15 2027
	 	 	0.00000000%		 	 	2.77539790%	
	Apr 15 2027
	 	 	0.00000000%		 	 	2.08154842%	
	May 15 2027
	 	 	0.00000000%		 	 	1.38769895%	
	Jun 15 2027
	 	 	0.00000000%		 	 	0.69384947%	
	Jul 15 2027
	 	 	0.00000000%		 	 	0.00000000%	
	Aug 15 2027
	 	 	0.00000000%		 	 	0.00000000%	
	Sep 15 2027
	 	 	0.00000000%		 	 	0.00000000%	
	Sep 26 2027
	 	 	0.00000000%		 	 	0.00000000%	

 

 

Schedule 2 to Network Lease

(NVG Network Statutory III Trust)

TERMINATION VALUES

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Termination Date	 	Termination Value
	 
	Dec 26 2003
	 	 	105.07165687	%
	Jan 15 2004
	 	 	104.82735162	%
	Feb l5 2004
	 	 	97.08698921	%
	Mar 15 2004
	 	 	97.53180008	%
	Apr 15 2004
	 	 	97.97733977	%
	May 15 2004
	 	 	98.41094897	%
	Jun 15 2004
	 	 	98.84524031	%
	Jul 15 2004
	 	 	99.26755430	%
	Aug 15 2004
	 	 	98.07113010	%
	Sep 15 2004
	 	 	98.49471688	%
	Oct 15 2004
	 	 	98.99810107	%
	Nov 15 2004
	 	 	99.41025619	%
	Dec 15 2004
	 	 	99.82300405	%
	Jan 15 2005
	 	 	100.22368480	%
	Feb 15 2005
	 	 	97.01776859	%
	Mar 15 2005
	 	 	97.41141012	%
	Apr 15 2005
	 	 	97.80560114	%
	May 15 2005
	 	 	98.18774184	%
	Jun 15 2005
	 	 	98.57038410	%
	Jul 15 2005
	 	 	98.94092792	%
	Aug 15 2005
	 	 	97.74133989	%
	Sep l5 2005
	 	 	98.11279209	%
	Oct 15 2005
	 	 	98.39765690	%
	Nov l5 2005
	 	 	98.75737046	%
	Dec 15 2005
	 	 	99.11749214	%
	Jan 15 2006
	 	 	99.46542155	%
	Feb 15 2006
	 	 	96.15490347	%
	Mar 15 2006
	 	 	96.49501013	%
	Apr 15 2006
	 	 	96.83547881	%
	May 15 2006
	 	 	97.16539446	%
	Jun 15 2006
	 	 	97.49562967	%
	Jul 15 2006
	 	 	97.81526922	%
	Aug 15 2006
	 	 	96.61585410	%
	Sep 15 2006
	 	 	96.93604827	%
	Oct 15 2006
	 	 	97.14748360	%
	Nov 15 2006
	 	 	97.45727500	%
	Dec 15 2006
	 	 	97.76730211	%
	Jan 15 2007
	 	 	98.06664935	%
	Feb 15 2007
	 	 	94.65310677	%
	Mar 15 2007
	 	 	94.94386522	%
	Apr 15 2007
	 	 	95.23481746	%
	May 15 2007
	 	 	95.51964975	%
	Jun 15 2007
	 	 	95.80465115	%
	Jul 15 2007
	 	 	96.08350779	%
	Aug 15 2007
	 	 	94.89702105	%
	Sep 15 2007
	 	 	95.17616669	%
	Oct 15 2007
	 	 	95.54938863	%
	Nov 15 2007
	 	 	95.82248483	%
	Dec 15 2007
	 	 	96.09570124	%
	Jan 15 2008
	 	 	96.36272379	%
	Feb 15 2008
	 	 	92.85974088	%
	Mar 15 2008
	 	 	93.11752614	%
	Apr 15 2008
	 	 	93.37540709	%
	May 15 2008
	 	 	93.62838557	%
	Jun 15 2008
	 	 	93.88143971	%
	Jul 15 2008
	 	 	94.12957128	%
	Aug 15 2008
	 	 	92.96883557	%
	Sep 15 2008
	 	 	93.21707829	%
	Oct 15 2008
	 	 	93.47078298	%
	Nov 15 2008
	 	 	93.71411842	%
	Dec 15 2008
	 	 	93.95748933	%
	Jan 15 2009
	 	 	94.19589732	%
	Feb 15 2009
	 	 	90.60432011	%
	Mar 15 2009
	 	 	90.83285417	%
	Apr 15 2009
	 	 	91.06140329	%
	May 15 2009
	 	 	91.29129890	%
	Jun 15 2009
	 	 	91.52121525	%

 

 

Schedule 2 to Network Lease

(NVG Network Statutory III Trust)

TERMINATION VALUES

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Termination Date	 	Termination Value
	 
	Jul 15 2009
	 	 	91.75248377	%
	Aug 15 2009
	 	 	90.63427939	%
	Sep 15 2009
	 	 	90.86560096	%
	Oct 15 2009
	 	 	91.03173923	%
	Nov 15 2009
	 	 	91.26445118	%
	Dec 15 2009
	 	 	91.49719560	%
	Jan 15 2010
	 	 	91.73130398	%
	Feb 15 2010
	 	 	88.07252366	%
	Mar 15 2010
	 	 	88.29630441	%
	Apr 15 2010
	 	 	88.52012378	%
	May 15 2010
	 	 	88.74538316	%
	Jun 15 2010
	 	 	88.97068733	%
	Jul 15 2010
	 	 	89.19743771	%
	Aug 15 2010
	 	 	88.13716606	%
	Sep 15 2010
	 	 	88.36401863	%
	Oct 15 2010
	 	 	88.58997984	%
	Nov 15 2010
	 	 	88.81834254	%
	Dec 15 2010
	 	 	89.04676295	%
	Jan 15 2011
	 	 	89.27664255	%
	Feb 15 2011
	 	 	85.54755229	%
	Mar 15 2011
	 	 	85.76663004	%
	Apr 15 2011
	 	 	85.98577236	%
	May 15 2011
	 	 	86.20645418	%
	Jun 15 2011
	 	 	86.42720725	%
	Jul 15 2011
	 	 	86.64950654	%
	Aug l5 2011
	 	 	85.65039190	%
	Sep 15 2011
	 	 	85.87284749	%
	Oct 15 2011
	 	 	86.07619935	%
	Nov 15 2011
	 	 	86.30029336	%
	Dec 15 2011
	 	 	86.52447284	%
	Jan 15 2012
	 	 	86.75021282	%
	Feb 15 2012
	 	 	82.94756359	%
	Mar 15 2012
	 	 	83.16200605	%
	Apr 15 2012
	 	 	83.37654161	%
	May 15 2012
	 	 	83.59272247	%
	Jun 15 2012
	 	 	83.80900367	%
	Jul 15 2012
	 	 	84.02693744	%
	Aug 15 2012
	 	 	83.09238220	%
	Sep 15 2012
	 	 	83.31053170	%
	Oct l5 2012
	 	 	83.65750033	%
	Nov 15 2012
	 	 	83.87742565	%
	Dec 15 2012
	 	 	84.09746691	%
	Jan 15 2013
	 	 	84.31917640	%
	Feb 15 2013
	 	 	80.43957054	%
	Mar 15 2013
	 	 	80.64946448	%
	Apr 15 2013
	 	 	80.85948283	%
	May 15 2013
	 	 	81.07125895	%
	Jun 15 2013
	 	 	81.28316732	%
	Jul 15 2013
	 	 	81.49684134	%
	Aug 15 2013
	 	 	80.63043580	%
	Sep 15 2013
	 	 	80.84439072	%
	Oct l5 2013
	 	 	80.88639725	%
	Nov l5 2013
	 	 	81.10227507	%
	Dec 15 2013
	 	 	81.31830222	%
	Jan 15 2014
	 	 	81.53611219	%
	Feb l5 2014
	 	 	77.41173956	%
	Mar 15 2014
	 	 	77.61652062	%
	Apr 15 2014
	 	 	77.82146038	%
	May 15 2014
	 	 	78.02828184	%
	Jun 15 2014
	 	 	78.23527050	%
	Jul 15 2014
	 	 	78.44414940	%
	Aug 15 2014
	 	 	77.65305044	%
	Sep 15 2014
	 	 	77.86228163	%
	Oct 15 2014
	 	 	78.19408461	%
	Nov 15 2014
	 	 	78.40540054	%
	Dec 15 2014
	 	 	78.61690240	%
	Jan 15 2015
	 	 	78.83031331	%

 

 

 Schedule 2 to Network Lease

(NVG Network Statutory III Trust)

TERMINATION VALUES

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Termination Date	 	Termination Value
	 
	Feb 15 2015
	 	 	73.59839805	%
	Mar 15 2015
	 	 	73.79401444	%
	Apr 15 2015
	 	 	73.98982711	%
	May 15 2015
	 	 	74.18776985	%
	Jun 15 2015
	 	 	74.38591856	%
	Jul 15 2015
	 	 	74.58620707	%
	Aug 15 2015
	 	 	73.89566561	%
	Sep 15 2015
	 	 	74.09638653	%
	Oct 15 2015
	 	 	74.17104625	%
	Nov 15 2015
	 	 	74.37414419	%
	Dec 15 2015
	 	 	74.57746960	%
	Jan 15 2016
	 	 	74.78295637	%
	Feb 15 2016
	 	 	69.42761904	%
	Mar 15 2016
	 	 	69.61447800	%
	Apr 15 2016
	 	 	69.80157637	%
	May 15 2016
	 	 	69.99153128	%
	Jun 15 2016
	 	 	70.18173849	%
	Jul 15 2016
	 	 	70.37481520	%
	Aug 15 2016
	 	 	69.79173323	%
	Sep 15 2016
	 	 	69.98534165	%
	Oct 15 2016
	 	 	70.26457993	%
	Nov 15 2016
	 	 	70.46135156	%
	Dec 15 2016
	 	 	70.65840390	%
	Jan 15 2017
	 	 	70.85835426	%
	Feb l5 2017
	 	 	65.37615744	%
	Mar 15 2017
	 	 	65.55662788	%
	Apr 15 2017
	 	 	65.73739472	%
	May 15 2017
	 	 	65.92121018	%
	Jun 15 2017
	 	 	66.10533597	%
	Jul 15 2017
	 	 	66.29252437	%
	Aug 15 2017
	 	 	65.82402737	%
	Sep 15 2017
	 	 	66.01186590	%
	Oct 15 2017
	 	 	65.85295010	%
	Nov 15 2017
	 	 	66.04420664	%
	Dec 15 2017
	 	 	66.23580452	%
	Jan 15 2018
	 	 	66.43049615	%
	Feb 15 2018
	 	 	60.81558874	%
	Mar 15 2018
	 	 	60.98990993	%
	Apr 15 2018
	 	 	61.16458974	%
	May 15 2018
	 	 	61.34252230	%
	Jun 15 2018
	 	 	61.52082852	%
	Jul 15 2018
	 	 	61.70240260	%
	Aug l5 2018
	 	 	61.35485509	%
	Sep 15 2018
	 	 	61.53720848	%
	Oct 15 2018
	 	 	61.51860669	%
	Nov 15 2018
	 	 	61.70465057	%
	Dec 15 2018
	 	 	61.89110191	%
	Jan 15 2019
	 	 	62.08085505	%
	Feb 15 2019
	 	 	56.32711888	%
	Mar 15 2019
	 	 	56.49557095	%
	Apr 15 2019
	 	 	56.66444946	%
	May 15 2019
	 	 	56.83679764	%
	Jun 15 2019
	 	 	57.00958850	%
	Jul 15 2019
	 	 	57.18586532	%
	Aug 15 2019
	 	 	56.96598285	%
	Sep 15 2019
	 	 	57.14317970	%
	Oct 15 2019
	 	 	57.23390074	%
	Nov 15 2019
	 	 	57.41507940	%
	Dec 15 2019
	 	 	57.59673754	%
	Jan 15 2020
	 	 	57.78191858	%
	Feb 15 2020
	 	 	51.88295642	%
	Mar 15 2020
	 	 	52.04586387	%
	Apr 15 2020
	 	 	52.20927163	%
	May 15 2020
	 	 	52.37637951	%
	Jun 15 2020
	 	 	52.54400520	%
	Jul 15 2020
	 	 	52.71534859	%
	Aug
15 2020
	 	 	52.63021692	%

 

 

Schedule 2 to Network Lease

(NVG Network Statutory III Trust)

TERMINATION VALUES

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	      Termination Date	 	Termination Value
	 
	Sep 15 2020
	 	 	52.80263345	%
	Oct 15 2020
	 	 	52.97878764	%
	Nov 15 2020
	 	 	53.15549733	%
	Dec 15 2020
	 	 	53.33276483	%
	Jan 15 2021
	 	 	52.79947311	%
	Feb 15 2021
	 	 	47.80205658	%
	Mar 15 2021
	 	 	47.94687347	%
	Apr 15 2021
	 	 	48.09211529	%
	May 15 2021
	 	 	48.24098763	%
	Jun 15 2021
	 	 	48.39030179	%
	Jul 15 2021
	 	 	48.54326345	%
	Aug 15 2021
	 	 	48.43967347	%
	Sep 15 2021
	 	 	48.59355476	%
	Oct 15 2021
	 	 	48.75110258	%
	Nov l5 2021
	 	 	48.90912837	%
	Dec 15 2021
	 	 	49.06763413	%
	Jan 15 2022
	 	 	49.38147153	%
	Feb 15 2022
	 	 	43.44558157	%
	Mar 15 2022
	 	 	43.57140736	%
	Apr 15 2022
	 	 	43.69757893	%
	May 15 2022
	 	 	43.82730158	%
	Jun 15 2022
	 	 	43.95738626	%
	Jul 15 2022
	 	 	44.09103831	%
	Aug 15 2022
	 	 	43.96805826	%
	Sep 15 2022
	 	 	44.10246870	%
	Oct 15 2022
	 	 	44.24046454	%
	Nov 15 2022
	 	 	44.37885688	%
	Dec 15 2022
	 	 	44.51764737	%
	Jan 15 2023
	 	 	44.62399419	%
	Feb 15 2023
	 	 	38.55454378	%
	Mar 15 2023
	 	 	38.67137477	%
	Apr 15 2023
	 	 	38.78860054	%
	May 15 2023
	 	 	38.90956082	%
	Jun 15 2023
	 	 	39.03093310	%
	Jul 15 2023
	 	 	39.15605717	%
	Aug 15 2023
	 	 	39.14911693	%
	Sep 15 2023
	 	 	39.27510147	%
	Oct 15 2023
	 	 	39.40485702	%
	Nov 15 2023
	 	 	39.53506121	%
	Dec 15 2023
	 	 	39.66571591	%
	Jan 15 2024
	 	 	40.02938363	%
	Feb 15 2024
	 	 	33.81864177	%
	Mar 15 2024
	 	 	33.92673031	%
	Apr 15 2024
	 	 	34.03526921	%
	May 15 2024
	 	 	34.14774672	%
	Jun 15 2024
	 	 	34.26069289	%
	Jul 15 2024
	 	 	34.37759604	%
	Aug l5 2024
	 	 	34.49498628	%
	Sep 15 2024
	 	 	34.61286565	%
	Oct 15 2024
	 	 	34.73472255	%
	Nov 15 2024
	 	 	34.85708719	%
	Dec 15 2024
	 	 	34.97996168	%
	Jan 15 2025
	 	 	35.30161767	%
	Feb 15 2025
	 	 	29.07013480	%
	Mar 15 2025
	 	 	29.15739590	%
	Apr 15 2025
	 	 	29.24502059	%
	May 15 2025
	 	 	29.33650253	%
	Jun 15 2025
	 	 	29.42836565	%
	Jul 15 2025
	 	 	29.52410367	%
	Aug 15 2025
	 	 	29.62024061	%
	Sep 15 2025
	 	 	29.71677811	%
	Oct l5 2025
	 	 	29.81721000	%
	Nov 15 2025
	 	 	29.91806036	%
	Dec 15 2025
	 	 	30.01933092	%
	Jan 15 2026
	 	 	30.08988724	%
	Feb 15 2026
	 	 	25.51466477	%
	Mar 15 2026
	 	 	25.59078928	%

 

 

Schedule 2 to Network Lease

(NVG Network Statutory III Trust)

TERMINATION VALUES

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Termination Date	 	Termination Value
	 
	Apr 15 2026
	 	 	25.66723098	%
	May 15 2026
	 	 	25.74748333	%
	Jun 15 2026
	 	 	25.82807006	%
	Jul 15 2026
	 	 	25.91248472	%
	Aug 15 2026
	 	 	25.99725111	%
	Sep 15 2026
	 	 	26.08237069	%
	Oct 15 2026
	 	 	26.17133709	%
	Nov 15 2026
	 	 	26.26067417	%
	Dec 15 2026
	 	 	26.35038350	%
	Jan 15 2027
	 	 	26.35886853	%
	Feb l5 2027
	 	 	26.45283369	%
	Mar 15 2027
	 	 	26.54719037	%
	Apr 15 2027
	 	 	26.64194020	%
	May 15 2027
	 	 	26.75419389	%
	Jun 15 2027
	 	 	26.86691531	%
	Jul 15 2027
	 	 	26.99721547	%
	Aug l5 2027
	 	 	27.12805854	%
	Sep 15 2027
	 	 	27.25944680	%
	Sep 26 2027
	 	 	27.25944680	%

 

 

Schedule 3 to Network Lease

(NVG Network Statutory III Trust)

PRICING ASSUMPTIONS

	 	 	 	 	 	 	 	 	 
	 	(1	)	 	Network Cost:
	 	$	388,500,000.00	 
	 	 	 	 	 
	 	 	 	 
	 	(2	)	 	Owner Lessor’s Cost:
	 	$	85,000,000.00	 
	 	 	 	 	 
	 	 	 	 
	 	(3	)	 	Equity Investment:
	 	$	23,115,000.00	 
	 	 	 	 	 
	 	 	 	 
	 	(4	)	 	Closing Date:
	 	 	9/26/2003	 
	 	 	 	 	 
	 	 	 	 
	 	(5	)	 	Assumed Tax Rate:
	 	 	35.00	%
	 	 	 	 	 
	 	 	 	 
	 	(6	)	 	Transaction Cost:
	 	$	l,247,104.25	 
	 	 	 	 	 
	 	 	 	 
	 	(7	)	 	Early Purchase Date:
	 	 	1/15/2021	 
	 	 	 	 	 
	 	 	 	 
	 	(8	)	 	Lessor Note:
	 	 	 	 
	 	 	 	 	Interest Rate:
	 	 	4.929	%

 

 

Schedule 4 to Network Lease

(NVG Network Statutory III Trust)

EARLY PURCHASE PRICE AND INSTALLMENTS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Underpayment	 	 	Overpayment	 	 	 	 
	 	 	Early	 	Early	 	 	of	 	 	of	 	 	Early	 
	 	 	Purchase Date	 	Purchase Amount	 	 	Basic Lease Rent *	 	 	Basic Lease Rent *	 	 	Purchase Price	 
	 
	(l)	 	Jan 15 2021
	 	 	32,438,951.68	 	 	 	0.00	 	 	 	10,108,046.16	 	 	 	22,330,905.53	 
	(2)	 	Apr 15 2021
	 	 	4,349,120.23	 	 	 	0.00	 	 	 	0 00	 	 	 	4,349,120 23	 
	(3)	 	Jun 15 2021
	 	 	4,349,120.23	 	 	 	0 00	 	 	 	0.00	 	 	 	4,349,120.23	 
	(4)	 	Sep 15 2021
	 	 	4,349,120.23	 	 	 	0.00	 	 	 	0.00	 	 	 	4,349,120.23	 
	(5)	 	Dec 15 2021
	 	 	4,349,120.23	 	 	 	0.00	 	 	 	0.00	 	 	 	4,349,120.23	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 	 	49,835,432.62	 	 	 	0.00	 	 	 	10,108,046.16	 	 	 	39,727,386.46	 

 

			
	*	 	Values are calculated without regard to any offset for amounts of Basic Lease
Rent that are due and owing on such date: the total amount due and
payable by Lessee on such
date is the sum (i) the Early Purchase Price and (ii) the amount of Basic Lease Rent payable
on such date as set forth on Schedule 1A.

 

 

CONTROL, MONITORING AND DATA ANALYSIS NETWORK

NETWORK LEASE AGREEMENT (A4)

The September 26, 2003, Network Lease Agreement (Al) between the Tennessee Valley Authority
(“TVA”), as lessee, and NVG Network I Statutory Trust, as
owner lessor, has been filed. It is
substantially similar to Network Lease Agreement (A4), except as noted below:

Network
Lease Agreement (A4) covers an undivided 18.018018018 percent interest in the Control,
Monitoring and Data Analysis Network (“Network”).

In
consideration of NVG Network IV Statutory Trust agreeing to lease the undivided interest in the Network to TVA,
TVA agrees to pay basic rent to NVG Network IV Statutory Trust for the network lease term, as set out
in the Schedule 1A, with explanatory schedules 1B, 1C, and 1D. Schedule 2 sets out the termination
values applicable to this network lease. Schedule 3 describes the pricing assumptions applicable to
this network lease. Schedule 4 sets out the early purchase price and installments applicable to
this network lease.

These schedules for Network Lease Agreement (A4) follow on the next pages.

 

 

Schedule 1A to Network Lease

(NVG Network Statutory IV Trust)

BASIC RENT PAYMENTS

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Rent	 	 	 
	Payment Date	 	Percentage
	 
	Sep 26 2003
	 	 	0.00000000	%
	Dec 26 2003
	 	 	0.00000000	%
	Jan 15 2004
	 	 	9.00427841	%
	Jul 15 2004
	 	 	1.65460183	%
	Jan 15 2005
	 	 	3.68820160	%
	Jul 15 2005
	 	 	1.60448376	%
	Jan 15 2006
	 	 	3.74085240	%
	Jul 15 2006
	 	 	1.55183296	%
	Jan 15 2007
	 	 	3.99663800	%
	Jul 15 2007
	 	 	1.49158074	%
	Jan 15 2008
	 	 	3.85946103	%
	Jul 15 2008
	 	 	1.43322433	%
	Jan 15 2009
	 	 	3.92076651	%
	Jul 15 2009
	 	 	1.37191885	%
	Jan 15 2010
	 	 	3.98517009	%
	Jul 15 2010
	 	 	1.30751527	%
	Jan 15 2011
	 	 	4.04181870	%
	Jul 15 2011
	 	 	1.25086666	%
	Jan 15 2012
	 	 	4.11201227	%
	Jul 15 2012
	 	 	1.18067309	%
	Jan 15 2013
	 	 	4.18608054	%
	Jul 15 2013
	 	 	1.10660482	%
	Jan 15 2014
	 	 	5.46976287	%
	Jul 15 2014
	 	 	0.99907479	%
	Jan 15 2015
	 	 	5.58272698	%
	Jul 15 2015
	 	 	0.88611068	%
	Jan 15 2016
	 	 	5.70139978	%
	Jul 15 2016
	 	 	0.76743788	%
	Jan 15 2017
	 	 	5.81473271	%
	Jul 15 2017
	 	 	0.65410495	%
	Jan 15 2018
	 	 	5.94513002	%
	Jul 15 2018
	 	 	0.52370764	%
	Jan 15 2019
	 	 	4.95289352	%
	Jul 15 2019
	 	 	0.41455035	%
	Jan 15 2020
	 	 	6.11855372	%
	Jul 15 2020
	 	 	0.35028394	%
	Jan 15 2021
	 	 	6.26430476	%
	Jul 15 2021
	 	 	0.20453290	%
	Jan 15 2022
	 	 	6.26430476	%
	Jul 15 2022
	 	 	0.20453290	%
	Jan 15 2023
	 	 	6.26430476	%
	Jul 15 2023
	 	 	0.20453290	%
	Jan 15 2024
	 	 	6.26430476	%
	Jul 15 2024
	 	 	0.20453290	%
	Jan 15 2025
	 	 	6.35687823	%
	Jul 15 2025
	 	 	0.11195944	%
	Jan 15 2026
	 	 	4.65484587	%
	Jul 15 2026
	 	 	0.00000000	%
	Jan 15 2027
	 	 	0.00000000	%
	Jul 15 2027
	 	 	0.00000000	%
	Sep 26 2027
	 	 	0.00000000	%

 

 

Schedule 1B to Network Lease

(NVG Network Statutory IV Trust)

ALLOCATED RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	From and	 	To and	 	Basic Rent	 
	Including	 	Including	 	Allocated	 
	 
	Sep 26 2003
	 	Dec 25 2003	 	 	0.00000000%	
	Dec 26 2003
	 	Jan 14 2004	 	 	0.27933617%	
	Jan 15 2004
	 	Jul 14 2004	 	 	0.00000000%	
	Jul 15 2004
	 	Jan 14 2005	 	 	5.51587089%	
	Jan 15 2005
	 	Jul 14 2005	 	 	4.86367318%	
	Jul 15 2005
	 	Jan 14 2006	 	 	0.00000000%	
	Jan 15 2006
	 	Jul 14  2006	 	 	5.29268536%	
	Jul 15 2006
	 	Jan 14 2007	 	 	0.00000000%	
	Jan 15 2007
	 	Jul 14 2007	 	 	0.00000000%	
	Jul 15 2007
	 	Jan 14 2008	 	 	5.73905641%	
	Jan 15 2008
	 	Jul 14 2008	 	 	5.04184768%	
	Jul 15 2008
	 	Jan 14 2009	 	 	0.00000000%	
	Jan 15 2009
	 	Jul 14 2009	 	 	0.00000000%	
	Jul 15 2009
	 	Jan 14 2010	 	 	5.73905641%	
	Jan 15 2010
	 	Jul 14 2010	 	 	4.84631431%	
	Jul 15 2010
	 	Jan 14 2011	 	 	0.00000000%	
	Jan 15 2011
	 	Jul 14 2011	 	 	0.00000000%	
	Jul 15 2011
	 	Jan 14 2012	 	 	5.73905641%	
	Jan 15 2012
	 	Jul 14 2012	 	 	4.84631431%	
	Jul 15 2012
	 	Jan 14 2013	 	 	0.00000000%	
	Jan 15 2013
	 	Jul 14 2013	 	 	0.00000000%	
	Jul 15 2013
	 	Jan 14 2014	 	 	5.73905641%	
	Jan 15 2014
	 	Jul 14 2014	 	 	4.84631431%	
	Jul 15 2014
	 	Jan 14 2015	 	 	0.00000000%	
	Jan 15 2015
	 	Jul 14 2015	 	 	6.46883766%	
	Jul 15 2015
	 	Jan 14 2016	 	 	0.00000000%	
	Jan 15 2016
	 	Jul 14 2016	 	 	6.46883766%	
	Jul 15 2016
	 	Jan 14 2017	 	 	0.00000000%	
	Jan 15 2017
	 	Jul 14 2017	 	 	0.00000000%	
	Jul 15 2017
	 	Jan 14 2018	 	 	7.01440228%	
	Jan 15 2018
	 	Jul 14 2018	 	 	5.92327304%	
	Jul 15 2018
	 	Jan 14 2019	 	 	0.00000000%	
	Jan 15 2019
	 	Jul 14 2019	 	 	6.46883766%	
	Jul 15 2019
	 	Jan 14 2020	 	 	0.00000000%	
	Jan 15 2020
	 	Jul 14 2020	 	 	5.36744388%	
	Jul 15 2020
	 	Jan 14 2021	 	 	0.00000000%	
	Jan 15 2021
	 	Jul 14 2021	 	 	6.46883766%	
	Jul 15 2021
	 	Jan 14 2022	 	 	0.00000000%	
	Jan 15 2022
	 	Jul 14 2022	 	 	6.46883766%	
	Jul 15 2022
	 	Jan 14 2023	 	 	0.00000000%	
	Jan 15 2023
	 	Jul 14 2023	 	 	0.00000000%	
	Jul 15 2023
	 	Jan 14 2024	 	 	7.01440228%	
	Jan 15 2024
	 	Jul 14 2024	 	 	5.92327304%	
	Jul 15 2024
	 	Jan 14 2025	 	 	0.00000000%	
	Jan 15 2025
	 	Jul 14 2025	 	 	0.00000000%	
	Jul
15 2025
	 	Jan 14 2026	 	 	7.01440228%	
	Jan 15 2026
	 	Jul 14 2026	 	 	5.92327304%	
	Jul 15 2026
	 	Jan 14 2027	 	 	0.00000000%	
	Jan 15 2027
	 	Jul 14 2027	 	 	4.65484587%	
	Jul 15 2027
	 	Sep 26 2027	 	 	0.00000000%	

 

Schedule 1C to Network Lease

(NVG Network Statutory IV Trust)

ATTRIBUTION OF BASIC LEASE RENT PAYMENTS TO ALLOCATIONS OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Allocated	 	Allocated 
	Rent Payment Date	 	 	Basic Lease Rent	 	From and Including	 	To and Including
	 
	Sep 26 2003

	 	 	0.00000000	%	 	 	 	 
	Dec 26 2003

	 	 	0.00000000	%	 	 	 	 
	Jan 15 2004

	 	 	9.00427841	%	 	Dec 26 2003
	 	Jul 14 2005
	Jul 15 2004

	 	 	1.65460183	%	 	Jan 15 2005
	 	Jul 14 2005
	Jan 15 2005

	 	 	3.68820160	%	 	Jan 15 2006
	 	Jul 14 2006
	Jul 15 2005

	 	 	1.60448376	%	 	Jan 15 2006
	 	Jul 14 2006
	Jan 15 2006

	 	 	3.74085240	%	 	Jul 15 2007
	 	Jan 14 2008
	Jul 15 2006

	 	 	1.55183296	%	 	Jul 15 2007
	 	Jan 14 2008
	Jan 15 2007

	 	 	3.99663800	%	 	Jul 15 2007
	 	Jul 15 2008
	Jul 15 2007

	 	 	1.49158074	%	 	Jan 15 2008
	 	Jul 14 2008
	Jan 15 2008

	 	 	3.85946103	%	 	Jul 15 2009
	 	Jan 14 2010
	Jul 15 2008

	 	 	1.43322433	%	 	Jul 15 2009
	 	Jan 14 2010
	Jan 15 2009

	 	 	3.92076651	%	 	Jul 15 2009
	 	Jul 14 2010
	Jul 15 2009

	 	 	1.37191885	%	 	Jan 15 2010
	 	Jul 14 2010
	Jan 15 2010

	 	 	3.98517009	%	 	Jul 15 2011
	 	Jan 14 2012
	Jul 15 2010

	 	 	1.30751527	%	 	Jul 15 2011
	 	Jan 14 2012
	Jan 15 2011

	 	 	4.04181870	%	 	Jul 15 2011
	 	Jul 14 2012
	Jul 15 2011

	 	 	1.25086666	%	 	Jan 15 2012
	 	Jul 14 2012
	Jan 15 2012

	 	 	4.11201227	%	 	Jul 15 2013
	 	Jan 14 2014
	Jul 15 2012

	 	 	1.18067309	%	 	Jul 15 2013
	 	Jan 14 2014
	Jan 15 2013

	 	 	4.18608054	%	 	Jul 15 2013
	 	Jul 14 2014
	Jul 15 2013

	 	 	1.10660482	%	 	Jan 15 2014
	 	Jul 14 2014
	Jan 15 2014

	 	 	5.46976287	%	 	Jan 15 2015
	 	Jul 14 2015
	Jul 15 2014

	 	 	0.99907479	%	 	Jan 15 2015
	 	Jul 14 2015
	Jan 15 2015

	 	 	5.58272698	%	 	Jan 15 2016
	 	Jul 14 2016
	Jul 15 2015

	 	 	0.88611068	%	 	Jan 15 2016
	 	Jul 14 2016
	Jan 15 2016

	 	 	5.70139978	%	 	Jul 15 2017
	 	Jan 14 2018
	Jul 15 2016

	 	 	0.76743788	%	 	Jul 15 2017
	 	Jan 14 2018
	Jan 15 2017

	 	 	5.81473271	%	 	Jul 15 2017
	 	Jul 14 2018
	Jul 15 2017

	 	 	0.65410495	%	 	Jan 15 2018
	 	Jul 14 2018
	Jan 15 2018

	 	 	5.94513002	%	 	Jan l5 2019
	 	Jul 14 2019
	Jul 15 2018

	 	 	0.52370764	%	 	Jan 15 2019
	 	Jul 14 2019
	Jan 15 2019

	 	 	4.95289352	%	 	Jan 15 2020
	 	Jul 14 2020
	Jul 15 2019

	 	 	0.41455035	%	 	Jan 15 2020
	 	Jul 14 2020
	Jan 15 2020

	 	 	6.11855372	%	 	Jan 15 2021
	 	Jul 14 2021
	Jul 15 2020

	 	 	0.35028394	%	 	Jan 15 2021
	 	Jul 14 2021
	Jan 15 2021

	 	 	6.26430476	%	 	Jan 15 2022
	 	Jul 14 2022
	Jul 15 2021

	 	 	0.20453290	%	 	Jan 15 2022
	 	Jul 14 2022
	Jan 15 2022

	 	 	6.26430476	%	 	Jul 15 2023
	 	Jan 14 2024
	Jul 15 2022

	 	 	0.20453290	%	 	Jul 15 2023
	 	Jan 14 2024
	Jan 15 2023

	 	 	6.26430476	%	 	Jul 15 2023
	 	Jul 14 2024
	Jul 15 2023

	 	 	0.20453290	%	 	Jan 15 2024
	 	Jul 14 2024
	Jan 15 2024

	 	 	6.26430476	%	 	Jul 15 2025
	 	Jan 14 2026
	Jul 15 2024

	 	 	0.20453290	%	 	Jul 15 2025
	 	Jan 14 2026
	Jan 15 2025

	 	 	6.35687823	%	 	Jul 15 2025
	 	Jul 14 2026
	Jul 15 2025

	 	 	0.11195944	%	 	Jan 15 2026
	 	Jul 14 2026
	Jan 15 2026

	 	 	4.65484587	%	 	Jan 15 2027
	 	Jul 14 2027
	Jul 15 2026

	 	 	0.00000000	%	 	 	 	 
	Jan 15 2027

	 	 	0.00000000	%	 	 	 	 
	Jul 15 2027

	 	 	0.00000000	%	 	 	 	 
	Sep 26 2027

	 	 	0.00000000	%	 	 	 	 

 

 

Schedule 1D to Network Lease

(NVG Network Statutory IV Trust)

OVERPAYMENTS AND UNDERPAYMENTS

OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	(a)         	 	 	(b)	 	 	(c)
	 	 	Underpayment	 	Overpayment
	Date Termination	 	of Basic Lease Rent	 	of Basic Lease Rent
	 
	Dec 26 2003

	 	 	0.00000000	%	 	 	0.00000000	%
	Jan 15 2004

	 	 	0.27933617	%	 	 	0.00000000	%
	Feb 15 2004

	 	 	0.00000000	%	 	 	8.72494224	%
	Mar 15 2004

	 	 	0.00000000	%	 	 	8.72494224	%
	Apr 15 2004

	 	 	0.00000000	%	 	 	8.72494224	%
	May 15 2004

	 	 	0.00000000	%	 	 	8.72494224	%
	Jun 15 2004

	 	 	0.00000000	%	 	 	8.72494224	%
	Jul 15 2004

	 	 	0.00000000	%	 	 	8.72494224	%
	Aug 15 2004

	 	 	0.00000000	%	 	 	9.46023225	%
	Sep 15 2004

	 	 	0.00000000	%	 	 	8.54092044	%
	Oct 15 2004

	 	 	0.00000000	%	 	 	7.62160862	%
	Nov 15 2004

	 	 	0.00000000	%	 	 	6.70229681	%
	Dec 15 2004

	 	 	0.00000000	%	 	 	5.78298499	%
	Jan 15 2005

	 	 	0.00000000	%	 	 	4.86367318	%
	Feb 15 2005

	 	 	0.00000000	%	 	 	7.74126258	%
	Mar 15 2005

	 	 	0.00000000	%	 	 	6.93065038	%
	Apr 15 2005

	 	 	0.00000000	%	 	 	6.12003819	%
	May 15 2005

	 	 	0.00000000	%	 	 	5.30942599	%
	Jun 15 2005

	 	 	0.00000000	%	 	 	4.49881379	%
	Jul 15 2005

	 	 	0.00000000	%	 	 	3.68820160	%
	Aug 15 2005

	 	 	0.00000000	%	 	 	5.29268536	%
	Sep 15 2005

	 	 	0.00000000	%	 	 	5.29268536	%
	Oct 15 2005

	 	 	0.00000000	%	 	 	5.29268536	%
	Nov 15 2005

	 	 	0.00000000	%	 	 	5.29268536	%
	Dec 15 2005

	 	 	0.00000000	%	 	 	5.29268536	%
	Jan 15 2006

	 	 	0.00000000	%	 	 	5.29268536	%
	Feb 15 2006

	 	 	0.00000000	%	 	 	8.15142353	%
	Mar 15 2006

	 	 	0.00000000	%	 	 	7.26930931	%
	Apr 15 2006

	 	 	0.00000000	%	 	 	6.38719508	%
	May 15 2006

	 	 	0.00000000	%	 	 	5.50508085	%
	Jun l5 2006

	 	 	0.00000000	%	 	 	4.62296663	%
	Jul 15 2006

	 	 	0.00000000	%	 	 	3.74085240	%
	Aug l5 2006

	 	 	0.00000000	%	 	 	5.29268536	%
	Sep 15 2006

	 	 	0.00000000	%	 	 	5.29268536	%
	Oct 15 2006

	 	 	0.00000000	%	 	 	5.29268536	%
	Nov 15 2006

	 	 	0.00000000	%	 	 	5.29268536	%
	Dec 15 2006

	 	 	0.00000000	%	 	 	5.29268536	%
	Jan 15 2007

	 	 	0.00000000	%	 	 	5.29268536	%
	Feb 15 2007

	 	 	0.00000000	%	 	 	9.28932336	%
	Mar 15 2007

	 	 	0.00000000	%	 	 	9.28932336	%
	Apr 15 2007

	 	 	0.00000000	%	 	 	9.28932336	%
	May 15 2007

	 	 	0.00000000	%	 	 	9.28932336	%
	Jun 15 2007

	 	 	0.00000000	%	 	 	9.28932336	%
	Jul 15 2007

	 	 	0.00000000	%	 	 	9.28932336	%
	Aug 15 2007

	 	 	0.00000000	%	 	 	9.82439469	%
	Sep 15 2007

	 	 	0.00000000	%	 	 	8.86788529	%
	Oct 15 2007

	 	 	0.00000000	%	 	 	7.91137589	%
	Nov 15 2007

	 	 	0.00000000	%	 	 	6.95486648	%
	Dec 15 2007

	 	 	0.00000000	%	 	 	5.99835708	%
	Jan 15 2008

	 	 	0.00000000	%	 	 	5.04184768	%
	Feb 15 2008

	 	 	0.00000000	%	 	 	8.06100076	%
	Mar 15 2008

	 	 	0.00000000	%	 	 	7.22069282	%
	Apr 15 2008

	 	 	0.00000000	%	 	 	6.38038487	%
	May 15 2008

	 	 	0.00000000	%	 	 	5.54007692	%
	Jun 15 2008

	 	 	0.00000000	%	 	 	4.69976898	%
	Jul 15 2008

	 	 	0.00000000	%	 	 	3.85946103	%
	Aug 15 2008

	 	 	0.00000000	%	 	 	5.29268536	%
	Sep
15 2008

	 	 	0.00000000	%	 	 	5.29268536	%
	Oct 15 2008

	 	 	0.00000000	%	 	 	5.29268536	%
	Nov 15 2008

	 	 	0.00000000	%	 	 	5.29268536	%
	Dec 15 2008

	 	 	0.00000000	%	 	 	5.29268536	%
	Jan 15 2009

	 	 	0.00000000	%	 	 	5.29268536	%
	Feb 15 2009

	 	 	0.00000000	%	 	 	9.21345187	%
	Mar 15 2009

	 	 	0.00000000	%	 	 	9.21345187	%

 

 

Schedule 1D to Network Lease

(NVG Network Statutory IV Trust)

OVERPAYMENTS AND UNDERPAYMENTS

OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	(a)           	 	(b)          	 	 	(c)           	 
	 	 	Underpayment	 	 	Overpayment	 
	Termination Date	 	of Basic Lease Rent	 	 	of Basic Lease Rent	 
	 
	Apr 15 2009
	 	 	0.00000000%	 	 	 	9.21345187%	 
	May 15 2009
	 	 	0.00000000%	 	 	 	9.21345187%	 
	Jun 15 2009
	 	 	0.00000000%	 	 	 	9.21345187%	 
	Jul 15 1009
	 	 	0.00000000%	 	 	 	9.21345187%	 
	Aug 15 2009
	 	 	0.00000000%	 	 	 	9.62886132%	 
	Sep 15 2009
	 	 	0.00000000%	 	 	 	8.67235192%	 
	Oct 15 2009
	 	 	0.00000000%	 	 	 	7.71584251%	 
	Nov 15 2009
	 	 	0.00000000%	 	 	 	6.75933311%	 
	Dec 15 2009
	 	 	0.00000000%	 	 	 	5.80282371%	 
	Jan 15 2010
	 	 	0.00000000%	 	 	 	4.84631431%	 
	Feb l5 2010
	 	 	0.00000000%	 	 	 	8.02376534%	 
	Mar 15 2010
	 	 	0.00000000%	 	 	 	7.21604629%	 
	Apr 15 2010
	 	 	0.00000000%	 	 	 	6.40832724%	 
	May 15 2010
	 	 	0.00000000%	 	 	 	5.60060819%	 
	Jun 15 2010
	 	 	0.00000000%	 	 	 	4.79288914%	 
	Jul 15 2010
	 	 	0.00000000%	 	 	 	3.98517009%	 
	Aug 15 2010
	 	 	0.00000000%	 	 	 	5.29268536%	 
	Sep l5 2010
	 	 	0.00000000%	 	 	 	5.29268536%	 
	Oct 15 2010
	 	 	0.00000000%	 	 	 	5.29268536%	 
	Nov l5 2010
	 	 	0.00000000%	 	 	 	5.29268536%	 
	Dec 15 2010
	 	 	0.00000000%	 	 	 	5.29268536%	 
	Jan l5 201l
	 	 	0.00000000%	 	 	 	5.29268536%	 
	Feb 15 20l1
	 	 	0.00000000%	 	 	 	9.33450406%	 
	Mar 15 2011
	 	 	0.00000000%	 	 	 	9.33450406%	 
	Apr 15 2011
	 	 	0.00000000%	 	 	 	9.33450406%	 
	May 15 2011
	 	 	0.00000000%	 	 	 	9.33450406%	 
	Jun 15 2011
	 	 	0.00000000%	 	 	 	9.33450406%	 
	Jul 15 2011
	 	 	0.00000000%	 	 	 	9.33450406%	 
	Aug 15 2011
	 	 	0.00000000%	 	 	 	9.62886132%	 
	Sep 15 2011
	 	 	0.00000000%	 	 	 	8.67235192%	 
	Oct 15 2011
	 	 	0.00000000%	 	 	 	7.71584251%	 
	Nov 15 2011
	 	 	0.00000000%	 	 	 	6.7593331l%	 
	Dec 15 2011
	 	 	0.00000000%	 	 	 	5.80282371%	 
	Jan 15 2012
	 	 	0.00000000%	 	 	 	4.84631431%	 
	Feb 15 2012
	 	 	0.00000000%	 	 	 	8.15060753%	 
	Mar 15 2012
	 	 	0.00000000%	 	 	 	7.34288848%	 
	Apr 15 2012
	 	 	0.00000000%	 	 	 	6.53516943%	 
	May 15 2012
	 	 	0.00000000%	 	 	 	5.72745038%	 
	Jun 15 2012
	 	 	0.00000000%	 	 	 	4.91973133%	 
	Jul 15 2012
	 	 	0.00000000%	 	 	 	4.11201227%	 
	Aug 15 2012
	 	 	0.00000000%	 	 	 	5.29268536%	 
	Sep 15 2012
	 	 	0.00000000%	 	 	 	5.29268536%	 
	Oct 15 2012
	 	 	0.00000000%	 	 	 	5.29268536%	 
	Nov 15 2012
	 	 	0.00000000%	 	 	 	5.29268536%	 
	Dec 15 2012
	 	 	0.00000000%	 	 	 	5.29268536%	 
	Jan 15 2013
	 	 	0.00000000%	 	 	 	5.29268536%	 
	Feb 15 2013
	 	 	0.00000000%	 	 	 	9.47876590%	 
	Mar 15 2013
	 	 	0.00000000%	 	 	 	9.47876590%	 
	Apr l5 2013
	 	 	0.00000000%	 	 	 	9.47876590%	 
	May 15 2013
	 	 	0.00000000%	 	 	 	9.47876590%	 
	Jun 15 2013
	 	 	0.00000000%	 	 	 	9.47876590%	 
	Jul 15 2013
	 	 	0.00000000%	 	 	 	9.47876590%	 
	Aug 15 2013
	 	 	0.00000000%	 	 	 	9.62886132%	 
	Sep 15 2013
	 	 	0.00000000%	 	 	 	8.67235192%	 
	Oct 15 2013
	 	 	0.00000000%	 	 	 	7.71584251%	 
	Nov l5 2013
	 	 	0.00000000%	 	 	 	6.75933311%	 
	Dec 15 2013
	 	 	0.00000000%	 	 	 	5.80282371%	 
	Jan 15 2014
	 	 	0.00000000%	 	 	 	4.84631431%	 
	Feb 15 2014
	 	 	0.00000000%	 	 	9.50835813%
	Mar 15 2014
	 	 	0.00000000%	 	 	 	8.70063908%	 
	Apr 15 2014
	 	 	0.00000000%	 	 	 	7.89292003%	 
	May 15 2014
	 	 	0.00000000%	 	 	 	7.08520098%	 
	Jun 15 2014
	 	 	0.00000000%	 	 	 	6.27748192%	 
	Jul 15 2014
	 	 	0.00000000%	 	 	 	5.46976287%	 

 

Schedule 1D to Network Lease

(NVG Network Statutory IV Trust)

OVERPAYMENTS AND UNDERPAYMENTS

OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	(a)          	 	(b)         	 	 	(c)         	 
	 	 	Underpayment	 	 	Overpayment	 
	Termination Date	 	of Basic Lease Rent	 	 	of Basic Lease Rent	 
	 
	Aug 15 2014
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Sep 15 2014
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Oct 15 2014
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Nov 15 2014
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Dec 15 2014
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Jan 15 2015
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Feb 15 2015
	 	 	0.00000000%	 	 	 	10.97342503%	 
	Mar 15 2015
	 	 	0.00000000%	 	 	 	9.89528542%	 
	Apr 15 2015
	 	 	0.00000000%	 	 	 	8.81714581%	 
	May 15 2015
	 	 	0.00000000%	 	 	 	7.73900620%	 
	Jun 15 2015
	 	 	0.00000000%	 	 	 	6.66086659%	 
	Jul 15 2015
	 	 	0.00000000%	 	 	 	5.58272698%	 
	Aug 15 2015
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Sep l5 2015
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Oct l5 2015
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Nov 15 2015
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Dec 15 2015
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Jan
15 2016
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Feb 15 20l6
	 	 	0.00000000%	 	 	 	11.09209783%	 
	Mar 15 2016
	 	 	0.00000000%	 	 	 	10.01395822%	 
	Apr 15 2016
	 	 	0.00000000%	 	 	 	8.93581861%	 
	May 15 2016
	 	 	0.00000000%	 	 	 	7.85767900%	 
	Jun 15 2016
	 	 	0.00000000%	 	 	 	6.77953939%	 
	Jul 15 2016
	 	 	0.00000000%	 	 	 	5.70139978%	 
	Aug 15 2016
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Sep 15 20l6
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Oct 15 2016
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Nov 15 2016
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Dec 15 2016
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Jan 15 2017
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Feb 15 2017
	 	 	0.00000000%	 	 	 	12.28357037%	 
	Mar 15 2017
	 	 	0.00000000%	 	 	 	12.28357037%	 
	Apr 15 2017
	 	 	0.00000000%	 	 	 	12.28357037%	 
	May 15 2017
	 	 	0.00000000%	 	 	 	12.28357037%	 
	Jun 15 2017
	 	 	0.00000000%	 	 	 	12.28357037%	 
	Jul 15 2017
	 	 	0.00000000%	 	 	 	12.28357037%	 
	Aug 15 2017
	 	 	0.00000000%	 	 	 	11.76860828%	 
	Sep
15 2017
	 	 	0.00000000%	 	 	 	10.59954123%	 
	Oct 15 2017
	 	 	0.00000000%	 	 	 	9.43047418%	 
	Nov 15 2017
	 	 	0.00000000%	 	 	 	8.26140713%	 
	Dec 15 2017
	 	 	0.00000000%	 	 	 	7.09234009%	 
	Jan 15 2018
	 	 	0.00000000%	 	 	 	5.92327304%	 
	Feb 15 2018
	 	 	0.00000000%	 	 	 	10.88119089%	 
	Mar 15 2018
	 	 	0.00000000%	 	 	 	9.89397872%	 
	Apr 15 2018
	 	 	0.00000000%	 	 	 	8.90676654%	 
	May 15 2018
	 	 	0.00000000%	 	 	 	7.91955437%	 
	Jun 15 2018
	 	 	0.00000000%	 	 	 	6.93234220%	 
	Jul 15 2018
	 	 	0.00000000%	 	 	 	5.94513002%	 
	Aug 15 2018
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Sep l5 2018
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Oct l5 2018
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Nov 15 2018
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Dec 15 2018
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Jan 15 2019
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Feb l5 2019
	 	 	0.00000000%	 	 	 	10.34359158%	 
	Mar 15 2019
	 	 	0.00000000%	 	 	 	9.26545197%	 
	Apr !5 1019
	 	 	0.00000000%	 	 	 	8.18731236%	 
	May 15 2019
	 	 	0.00000000%	 	 	 	7.10917275%	 
	Jun 15 2019
	 	 	0.00000000%	 	 	 	6.03103313%	 
	Jul 15 2019
	 	 	0.00000000%	 	 	 	4.95289352%	 
	Aug 15 2019
	 	 	0.00000000%	 	 	 	5.36744388%	 
	Sep 15 2019
	 	 	0.00000000%	 	 	 	5.36744388%	 
	Oct 15 2019
	 	 	0.00000000%	 	 	 	5.36744388%	 
	Nov 15 2019
	 	 	0.00000000%	 	 	 	5.36744388%	 

 

Schedule 1D to Network Lease

(NVG Network Statutory IV Trust)

OVERPAYMENTS
AND UNDERPAYMENTS

OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	(a)         	 	(b)         	 	 	(c)         	 
	 	 	Underpayment	 	 	Overpayment	 
	Termination Date	 	of Basic Lease Rent	 	 	of Basic Lease Rent	 
	 
	Dec 15 2019
	 	 	0.00000000%	 	 	 	5.36744388%	 
	Jan 15 2020
	 	 	0.00000000%	 	 	 	5.36744388%	 
	Feb 15 2020
	 	 	0.00000000%	 	 	 	10.59142362%	 
	Mar 15 2020
	 	 	0.00000000%	 	 	 	9.69684964%	 
	Apr 15 2020
	 	 	0.00000000%	 	 	 	8.80227566%	 
	May 15 2020
	 	 	0.00000000%	 	 	 	7.90770168%	 
	Jun 15 2020
	 	 	0.00000000%	 	 	 	7.01312770%	 
	Jul 15 2020
	 	 	0.00000000%	 	 	 	6.11855372%	 
	Aug 15 2020
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Sep 15 2020
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Oct 15 2020
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Nov 15 2020
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Dec 15 2020
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Jan 15 2021
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Feb 15 2021
	 	 	0.00000000%	 	 	 	11.65500281%	 
	Mar 15 2021
	 	 	0.00000000%	 	 	 	10.57686320%	 
	Apr 15 2021
	 	 	0.00000000%	 	 	 	9.49872359%	 
	May 15 2021
	 	 	0.00000000%	 	 	 	8.42058398%	 
	Jun 15 2021
	 	 	0.00000000%	 	 	 	7.34244437%	 
	Jul 15 2021
	 	 	0.00000000%	 	 	 	6.26430476%	 
	Aug 15 2021
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Sep 15 2021
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Oct 15 2021
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Nov 15 2021
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Dec 15 2021
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Jan 15 2022
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Feb 15 2022
	 	 	0.00000000%	 	 	 	11.65500281%	 
	Mar 15 2022
	 	 	0.00000000%	 	 	 	10.57686320%	 
	Apr 15 2022
	 	 	0.00000000%	 	 	 	9.49872359%	 
	May 15 2022
	 	 	0.00000000%	 	 	 	8.42058398%	 
	Jun 15 2022
	 	 	0.00000000%	 	 	 	7.34244437%	 
	Jul 15 2022
	 	 	0.00000000%	 	 	 	6.26430476%	 
	Aug 15 2022
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Sep 15 2022
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Oct 15 2022
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Nov 15 2022
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Dec 15 2022
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Jan 15 2023
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Feb 15 2023
	 	 	0.00000000%	 	 	 	12.73314243%	 
	Mar 15 2023
	 	 	0.00000000%	 	 	 	12.73314243%	 
	Apr 15 2023
	 	 	0.00000000%	 	 	 	12.73314243%	 
	May 15 2023
	 	 	0.00000000%	 	 	 	12.73314243%	 
	Jun 15 2023
	 	 	0.00000000%	 	 	 	12.73314243%	 
	Jul 15 2023
	 	 	0.00000000%	 	 	 	12.73314243%	 
	Aug 15 2023
	 	 	0.00000000%	 	 	 	11.76860828%	 
	Sep 15 2023
	 	 	0.00000000%	 	 	 	10.59954123%	 
	Oct 15 2023
	 	 	0.00000000%	 	 	 	9.43047418%	 
	Nov 15 2023
	 	 	0.00000000%	 	 	 	8.26140713%	 
	Dec 15 2023
	 	 	0.00000000%	 	 	 	7.09234009%	 
	Jan 15 2024
	 	 	0.00000000%	 	 	 	5.92327304%	 
	Feb 15 2024
	 	 	0.00000000%	 	 	 	11.20036563%	 
	Mar 15 2024
	 	 	0.00000000%	 	 	 	10.21315346%	 
	Apr 15 2024
	 	 	0.00000000%	 	 	 	9.22594128%	 
	May 15 2024
	 	 	0.00000000%	 	 	 	8.23872911%	 
	Jun 15 2024
	 	 	0.00000000%	 	 	 	7.25151694%	 
	Jul 15 2024
	 	 	0.00000000%	 	 	 	6.26430476%	 
	Aug 15 2024
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Sep 15 2024
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Oct 15 2024
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Nov 15 2024
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Dec 15 2024
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Jan 15 2025
	 	 	0.00000000%	 	 	 	6.46883766%	 
	Feb 15 2025
	 	 	0.00000000%	 	 	 	12.82571589%	 
	Mar 15 2025
	 	 	0.00000000%	 	 	 	12.82571589%	 

 

Schedule 1D to Network Lease

(NVG Network Statutory IV Trust)

OVERPAYMENTS AND UNDERPAYMENTS

OF BASIC LEASE RENT

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 	 	 	 	 
	(a)         	 	(b)         	 	 	(c)         	 
	 	 	Underpayment	 	 	Overpayment	 
	Termination Date	 	of Basic Lease Rent	 	 	of Bask Lease Rent	 
	 
	Apr 15 2025
	 	 	0.00000000%	 	 	 	12.82571589%	 
	May 15 2025
	 	 	0.00000000%	 	 	 	12.82571589%	 
	Jun 15 2025
	 	 	0.00000000%	 	 	 	12.82571589%	 
	Jul 15 2025
	 	 	0.00000000%	 	 	 	12.82571589%	 
	Aug 15 2025
	 	 	0.00000000%	 	 	 	11.76860828%	 
	Sep 15 2025
	 	 	0.00000000%	 	 	 	10.59954123%	 
	Oct 15 2025
	 	 	0.00000000%	 	 	 	9.43047418%	 
	Nov 15 2025
	 	 	0.00000000%	 	 	 	8.26140713%	 
	Dec 15 2025
	 	 	0.00000000%	 	 	 	7.09234009%	 
	Jan 15 2026
	 	 	0.00000000%	 	 	 	5.92327304%	 
	Feb 15 2026
	 	 	0.00000000%	 	 	 	9.59090674%	 
	Mar 15 2026
	 	 	0.00000000%	 	 	 	8.60369457%	 
	Apr 15 2026
	 	 	0.00000000%	 	 	 	7.61648239%	 
	May 15 2026
	 	 	0.00000000%	 	 	 	6.62927022%	 
	Jun l5 2026
	 	 	0.00000000%	 	 	 	5.64205805%	 
	Jul 15 2026
	 	 	0.00000000%	 	 	 	4.65484587%	 
	Aug l5 2026
	 	 	0.00000000%	 	 	 	4.65484587%	 
	Sep 15 2026
	 	 	0.00000000%	 	 	 	4.65484587%	 
	Oct 15 2026
	 	 	0.00000000%	 	 	 	4.65484587%	 
	Nov 15 2026
	 	 	0.00000000%	 	 	 	4.65484587%	 
	Dec 15 2026
	 	 	0.00000000%	 	 	 	4.65484587%	 
	Jan 15 2027
	 	 	0.00000000%	 	 	 	4.65484587%	 
	Feb 15 2027
	 	 	0.00000000%	 	 	 	3.87903823%	 
	Mar 15 2027
	 	 	0.00000000%	 	 	 	3.10323058%	 
	Apr 15 2027
	 	 	0.00000000%	 	 	 	2.32742294%	 
	May 15 2027
	 	 	0.00000000%	 	 	 	1.55161529%	 
	Jun 15 2027
	 	 	0.00000000%	 	 	 	0.77580765%	 
	Jul 15 2027
	 	 	0.00000000%	 	 	 	0.00000000%	 
	Aug 15 2027
	 	 	0.00000000%	 	 	 	0.00000000%	 
	Sep 15 2027
	 	 	0.00000000%	 	 	 	0.00000000%	 
	Sep 26 2027
	 	 	0.00000000%	 	 	 	0.00000000%	 

 

Schedule 2 to Network Lease

(NVG Network Statutory IV Trust)

TERMINATION VALUES

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Termination Date	 	Termination Value	 
	 
	Dec 26 2003
	 	 	104.66682483%	 
	Jan 15 2004
	 	 	105.61642190%	 
	Feb 15 2004
	 	 	97.13211100%	 
	Mar 15 2004
	 	 	97.65345190%	 
	Apr 15 2004
	 	 	98.16694870%	 
	May 15 2004
	 	 	98.66979100%	 
	Jun 15 2004
	 	 	99.17391030%	 
	Jul 15 2004
	 	 	99.66731010%	 
	Aug 15 2004
	 	 	98.49957840%	 
	Sep 15 2004
	 	 	98.98763330%	 
	Oct 15 2004
	 	 	99.50304460%	 
	Nov 15 2004
	 	 	99.97363080%	 
	Dec 15 2004
	 	 	100.44530790%	 
	Jan 15 2005
	 	 	100.89833730%	 
	Feb 15 2005
	 	 	97.65580170%	 
	Mar 15 2005
	 	 	98.10246300%	 
	Apr 15 2005
	 	 	98.54238430%	 
	May 15 2005
	 	 	98.97133410%	 
	Jun 15 2005
	 	 	99.40118300%	 
	Jul 15 2005
	 	 	99.81999150%	 
	Aug 15 2005
	 	 	98.62648380%	 
	Sep 15 2005
	 	 	99.03825630%	 
	Oct 15 2005
	 	 	99.39300210%	 
	Nov 15 2005
	 	 	99.78565700%	 
	Dec 15 2005
	 	 	100.17900390%	 
	Jan 15 2006
	 	 	100.55244000%	 
	Feb 15 2006
	 	 	97.17683080%	 
	Mar 15 2006
	 	 	97.54265970%	 
	Apr 15 2006
	 	 	97.90041550%	 
	May 15 2006
	 	 	98.24838650%	 
	Jun 15 2006
	 	 	98.59891480%	 
	Jul 15 2006
	 	 	98.93545780%	 
	Aug 15 2006
	 	 	97.71476700%	 
	Sep 15 2006
	 	 	98.04936690%	 
	Oct 15 2006
	 	 	98.31081730%	 
	Nov 15 2006
	 	 	98.62474690%	 
	Dec 15 2006
	 	 	98.93897160%	 
	Jan 15 2007
	 	 	99.23522930%	 
	Feb 15 2007
	 	 	95.52500150%	 
	Mar 15 2007
	 	 	95.81160750%	 
	Apr 15 2007
	 	 	96.09048590%	 
	May 15 2007
	 	 	96.36357370%	 
	Jun 15 2007
	 	 	96.63678600%	 
	Jul 15 2007
	 	 	96.90416950%	 
	Aug 15 2007
	 	 	95.67673480%	 
	Sep 15 2007
	 	 	95.94095290%	 
	Oct 15 2007
	 	 	96.24608860%	 
	Nov 15 2007
	 	 	96.50111990%	 
	Dec 15 2007
	 	 	96.75616980%	 
	Jan 15 2008
	 	 	97.00754340%	 
	Feb 15 2008
	 	 	93.38973000%	 
	Mar 15 2008
	 	 	93.63137760%	 
	Apr 15 2008
	 	 	93.87302520%	 
	May 15 2008
	 	 	94.11467280%	 
	Jun 15 2008
	 	 	94.35632040%	 
	Jul 15 2008
	 	 	94.59796800%	 
	Aug 15 2008
	 	 	93.40639130%	 
	Sep 15 2008
	 	 	93.64803890%	 
	Oct 15 2008
	 	 	93.89488880%	 

5

 

Schedule 2 to Network Lease

(NVG Network Statutory IV Trust)

TERMINATION VALUES

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Termination Date	 	Termination Value
	 
	Nov 15 2008
	 	 	94.13653640	%
	Dec 15 2008
	 	 	94.37818400	%
	Jan 15 2009
	 	 	94.61983160	%
	Feb 15 2009
	 	 	90.93049510	%
	Mar 15 2009
	 	 	91.16192510	%
	Apr 15 2009
	 	 	91.39335510	%
	May 15 2009
	 	 	91.62478510	%
	Jun 15 2009
	 	 	91.85621520	%
	Jul 15 2009
	 	 	92.08764520	%
	Aug 15 2009
	 	 	90.94715640	%
	Sep 15 2009
	 	 	91.17858640	%
	Oct 15 2009
	 	 	91.37674570	%
	Nov 15 2009
	 	 	91.60817580	%
	Dec 15 2009
	 	 	91.83960580	%
	Jan 15 2010
	 	 	92.07103580	%
	Feb 15 2010
	 	 	88.30656180	%
	Mar 15 2010
	 	 	88.52725790	%
	Apr 15 2010
	 	 	88.74795400	%
	May 15 2010
	 	 	88.96865010	%
	Jun 15 2010
	 	 	89.18934620	%
	Jul 15 2010
	 	 	89.41004230	%
	Aug 15 2010
	 	 	88.32322310	%
	Sep 15 2010
	 	 	88.54391920	%
	Oct 15 2010
	 	 	88.76344320	%
	Nov 15 2010
	 	 	88.98413930	%
	Dec 15 2010
	 	 	89.20483540	%
	Jan 15 2011
	 	 	89.42553150	%
	Feb 15 2011
	 	 	85.59496750	%
	Mar 15 2011
	 	 	85.80622210	%
	Apr 15 2011
	 	 	86.01747680	%
	May 15 2011
	 	 	86.22873140	%
	Jun 15 2011
	 	 	86.43998610	%
	Jul 15 2011
	 	 	86.65124070	%
	Aug 15 2011
	 	 	85.61162870	%
	Sep 15 2011
	 	 	85.82288340	%
	Oct 15 2011
	 	 	86.02380950	%
	Nov 15 2011
	 	 	86.23506420	%
	Dec 15 2011
	 	 	86.44631880	%
	Jan 15 2012
	 	 	86.65757350	%
	Feb 15 2012
	 	 	82.74511690	%
	Mar 15 2012
	 	 	82.94467270	%
	Apr 15 2012
	 	 	83.14422840	%
	May 15 2012
	 	 	83.34378410	%
	Jun 15 2012
	 	 	83.54333980	%
	Jul 15 2012
	 	 	83.74289560	%
	Aug 15 2012
	 	 	82.76177820	%
	Sep 15 2012
	 	 	82.96133390	%
	Oct 15 2012
	 	 	83.22446900	%
	Nov 15 2012
	 	 	83.42402480	%
	Dec 15 2012
	 	 	83.62358050	%
	Jan 15 2013
	 	 	83.82313620	%
	Feb 15 2013
	 	 	79.82426670	%
	Mar 15 2013
	 	 	80.01147770	%
	Apr 15 2013
	 	 	80.19868870	%
	May 15 2013
	 	 	80.38589970	%
	Jun 15 2013
	 	 	80.57311080	%
	Jul 15 2013
	 	 	80.76062990	%
	Aug 15 2013
	 	 	79.84267290	%
	Sep 15 2013
	 	 	80.03132780	%

 

Schedule 2 to Network Lease

(NVG Network Statutory IV Trust)

TERMINATION VALUES

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Termination Date	 	Termination Value
	 
	Oct 15 2013
	 	 	80.13677300	%
	Nov 15 2013
	 	 	80.32910620	%
	Dec 15 2013
	 	 	80.52146640	%
	Jan 15 2014
	 	 	80.71749810	%
	Feb 15 2014
	 	 	75.42589220	%
	Mar 15 2014
	 	 	75.60409640	%
	Apr 15 2014
	 	 	75.78438470	%
	May 15 2014
	 	 	75.96645080	%
	Jun 15 2014
	 	 	76.14858530	%
	Jul 15 2014
	 	 	76.33250980	%
	Aug 15 2014
	 	 	75.51870330	%
	Sep 15 2014
	 	 	75.70405840	%
	Oct 15 2014
	 	 	75.95282090	%
	Nov 15 2014
	 	 	76.14135220	%
	Dec 15 2014
	 	 	76.32998880	%
	Jan 15 2015
	 	 	76.52171560	%
	Feb 15 2015
	 	 	71.11201180	%
	Mar 15 2015
	 	 	71.28515930	%
	Apr 15 2015
	 	 	71.45969490	%
	May 15 2015
	 	 	71.63683110	%
	Jun 15 2015
	 	 	71.81411600	%
	Jul 15 2015
	 	 	71.99401960	%
	Aug 15 2015
	 	 	71.28968540	%
	Sep 15 2015
	 	 	71.47163730	%
	Oct 15 2015
	 	 	71.59383490	%
	Nov 15 2015
	 	 	71.78033990	%
	Dec 15 2015
	 	 	71.96704750	%
	Jan 15 2016
	 	 	72.15813410	%
	Feb 15 2016
	 	 	66.62827120	%
	Mar 15 2016
	 	 	66.80003850	%
	Apr 15 2016
	 	 	66.97374350	%
	May 15 2016
	 	 	67.15028470	%
	Jun 15 2016
	 	 	67.32708530	%
	Jul 15 2016
	 	 	67.50674260	%
	Aug 15 2016
	 	 	66.91999930	%
	Sep 15 2016
	 	 	67.10097880	%
	Oct 15 2016
	 	 	67.32697110	%
	Nov 15 2016
	 	 	67.51189930	%
	Dec 15 2016
	 	 	67.69713820	%
	Jan 15 2017
	 	 	67.88604300	%
	Feb 15 2017
	 	 	62.23753620	%
	Mar 15 2017
	 	 	62.40407550	%
	Apr 15 2017
	 	 	62.57168760	%
	May 15 2017
	 	 	62.74233720	%
	Jun 15 2017
	 	 	62.91332740	%
	Jul 15 2017
	 	 	63.08737720	%
	Aug 15 2017
	 	 	62.61072670	%
	Sep 15 2017
	 	 	62.78855960	%
	Oct 15 2017
	 	 	62.79761540	%
	Nov 15 2017
	 	 	62.98200210	%
	Dec 15 2017
	 	 	63.16680580	%
	Jan 15 2018
	 	 	63.35778750	%
	Feb 15 2018
	 	 	57.58235980	%
	Mar 15 2018
	 	 	57.75251850	%
	Apr 15 2018
	 	 	57.92617770	%
	May 15 2018
	 	 	58.10316730	%
	Jun 15 2018
	 	 	58.28065390	%
	Jul 15 2018
	 	 	58.46149570	%
	Aug 15 2018
	 	 	58.12101200	%

 

 

Schedule 2 to Network Lease

(NVG Network Statutory IV Trust)

TERMINATION VALUES

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Termination Date	 	Termination Value
	 
	Sep 15 2018
	 	 	58.30476930	%
	Oct 15 2018
	 	 	58.39165850	%
	Nov 15 2018
	 	 	58.58123460	%
	Dec 15 2018
	 	 	58.77138110	%
	Jan 15 2019
	 	 	58.96681670	%
	Feb 15 2019
	 	 	54.19177040	%
	Mar 15 2019
	 	 	54.37022570	%
	Apr 15 2019
	 	 	54.55115270	%
	May 15 2019
	 	 	54.73567600	%
	Jun 15 2019
	 	 	54.92084630	%
	Jul 15 2019
	 	 	55.10964050	%
	Aug 15 2019
	 	 	54.88643790	%
	Sep 15 2019
	 	 	55.07847280	%
	Oct 15 2019
	 	 	55.23106040	%
	Nov 15 2019
	 	 	55.42936160	%
	Dec 15 2019
	 	 	55.62839050	%
	Jan 15 2020
	 	 	55.83300330	%
	Feb 15 2020
	 	 	49.88064660	%
	Mar 15 2020
	 	 	50.04744890	%
	Apr 15 2020
	 	 	50.21623870	%
	May 15 2020
	 	 	50.38910460	%
	Jun 15 2020
	 	 	50.56211130	%
	Jul 15 2020
	 	 	50.73821800	%
	Aug 15 2020
	 	 	50.58114530	%
	Sep 15 2020
	 	 	50.78048790	%
	Oct 15 2020
	 	 	50.98568650	%
	Nov 15 2020
	 	 	51.19186980	%
	Dec 15 2020
	 	 	51.39904420	%
	Jan 15 2021
	 	 	51.64911250	%
	Feb 15 2021
	 	 	46.28408030	%
	Mar 15 2021
	 	 	46.46257920	%
	Apr 15 2021
	 	 	46.64396330	%
	May 15 2021
	 	 	46.82938130	%
	Jun 15 2021
	 	 	47.01566410	%
	Jul 15 2021
	 	 	47.20601240	%
	Aug 15 2021
	 	 	47.19534160	%
	Sep 15 2021
	 	 	47.39011860	%
	Oct 15 2021
	 	 	47.59142430	%
	Nov 15 2021
	 	 	47.79368890	%
	Dec 15 2021
	 	 	47.99691820	%
	Jan 15 2022
	 	 	48.28254930	%
	Feb 15 2022
	 	 	42.17128490	%
	Mar 15 2022
	 	 	42.32499950	%
	Apr 15 2022
	 	 	42.48180580	%
	May 15 2022
	 	 	42.64250760	%
	Jun 15 2022
	 	 	42.80392920	%
	Jul 15 2022
	 	 	42.96927640	%
	Aug 15 2022
	 	 	42.93231550	%
	Sep 15 2022
	 	 	43.10064910	%
	Oct 15 2022
	 	 	43.27422110	%
	Nov 15 2022
	 	 	43.44859160	%
	Dec 15 2022
	 	 	43.62376530	%
	Jan 15 2023
	 	 	43.78619560	%
	Feb 15 2023
	 	 	37.64540810	%
	Mar 15 2023
	 	 	37.76943000	%
	Apr 15 2023
	 	 	37.89523030	%
	May 15 2023
	 	 	38.02474890	%
	Jun 15 2023
	 	 	38.15480890	%
	Jul 15 2023
	 	 	38.28861520	%

 

 

Schedule 2 to Network Lease

(NVG Network Statutory IV Trust)

TERMINATION VALUES

(Percentages are percentages of Owner Lessor’s Cost)

	 	 	 	 	 
	Termination Date	 	Termination Value
	 
	Aug 15 2023
	 	 	38.22234940	%
	Sep 15 2023
	 	 	38.36120820	%
	Oct 15 2023
	 	 	38.50755100	%
	Nov 15 2023
	 	 	33.65453200	%
	Dec 15 2023
	 	 	38.80215510	%
	Jan 15 2024
	 	 	39.07192400	%
	Feb 15 2024
	 	 	32.90568860	%
	Mar 15 2024
	 	 	33.00411010	%
	Apr 15 2024
	 	 	33.10657310	%
	May 15 2024
	 	 	33.21261160	%
	Jun 15 2024
	 	 	33.31904810	%
	Jul 15 2024
	 	 	33.42908620	%
	Aug 15 2024
	 	 	33.33637480	%
	Sep 15 2024
	 	 	33.44862960	%
	Oct 15 2024
	 	 	33.56567690	%
	Nov 15 2024
	 	 	33.68318980	%
	Dec 15 2024
	 	 	33.80117100	%
	Jan 15 2025
	 	 	34.02137170	%
	Feb 15 2025
	 	 	27.74965260	%
	Mar 15 2025
	 	 	27.83538150	%
	Apr 15 2025
	 	 	27.92223780	%
	May 15 2025
	 	 	28.01297030	%
	Jun 15 2025
	 	 	28.10410730	%
	Jul 15 2025
	 	 	28.19894730	%
	Aug 15 2025
	 	 	28.18624780	%
	Sep 15 2025
	 	 	28.28596100	%
	Oct 15 2025
	 	 	28.39321100	%
	Nov 15 2025
	 	 	28.50096010	%
	Dec 15 2025
	 	 	28.60921120	%
	Jan 15 2026
	 	 	28.70773420	%
	Feb 15 2026
	 	 	24.15081810	%
	Mar 15 2026
	 	 	24.24930070	%
	Apr 15 2026
	 	 	24.35212400	%
	May 15 2026
	 	 	24.45894010	%
	Jun 15 2026
	 	 	24.56636030	%
	Jul 15 2026
	 	 	24.67780340	%
	Aug 15 2026
	 	 	24.79221680	%
	Sep 15 2026
	 	 	24.90727970	%
	Oct 15 2026
	 	 	25.02854310	%
	Nov 15 2026
	 	 	25.15049690	%
	Dec 15 2026
	 	 	25.27314530	%
	Jan 15 2027
	 	 	25.35949460	%
	Feb 15 2027
	 	 	25.48932930	%
	Mar 15 2027
	 	 	25.61990560	%
	Apr 15 2027
	 	 	25.75336010	%
	May 15 2027
	 	 	25.90386910	%
	Jun 15 2027
	 	 	26.05525290	%
	Jul 15 2027
	 	 	26.22381040	%
	Aug 15 2027
	 	 	26.40547340	%
	Sep 15 2027
	 	 	26.58819560	%
	Sep 26 2027
	 	 	25.92000000	%

 

 

Schedule 3 to Network Lease

(NVG Network Statutory IV Trust)

PRICING ASSUMPTIONS

	 	 	 	 	 	 	 
	(1)
	 	Network Cost:	 	$	388,500,000.00	 
	 
	(2)
	 	Owner Lessor’s Cost:	 	$	70,000,000.00	 
	 
	(3)
	 	Equity Investment:	 	$	17,794,000.00	 
	 
	(4)
	 	Closing Date:	 	 	9/26/2003	 
	 
	(5)
	 	Assumed Tax Rate:	 	 	38.90	%
	 
	(6)
	 	Transaction Cost:	 	$	1,027,027.03	 
	 
	(7)
	 	Early Purchase Date:	 	 	1/15/2021	 
	 
	(8)
	 	Lessor Note	 	 	 	 
	 
	 	
Interest Rate:	 	 	4.929	%

 

 

Schedule 4 to Network Lease

(NVG Network Statutory IV Trust)

EARLY
PURCHASE PRICE AND INSTALLMENTS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Underpayment	 	 	Overpayment	 	 	 	 
	 	 	Early	 	 	Early	 	 	of	 	 	of	 	 	Early	 
	 	 	Purchase Date	 	 	Purchase Amount	 	 	Basic Lease Rent *	 	 	Basic Lease Rent *	 	 	Purchase Price	 
	(1)
	 	Jan 15 2021	 	 	26,551,232.16	 	 	 	0.00	 	 	 	8,913,199.70	 	 	 	17,638,032.46	 
	(2)
	 	Apr 15 2021	 	 	3,532,833.25	 	 	 	0.00	 	 	 	0.00	 	 	 	3,532,833.25	 
	(3)
	 	Jun 15 2021	 	 	3,532,833.25	 	 	 	0.00	 	 	 	0.00	 	 	 	3,532,833.25	 
	(4)
	 	Sep 15 2021	 	 	3,532,833.25	 	 	 	0.00	 	 	 	0.00	 	 	 	3,532,833.25	 
	(5)
	 	Dec 15 2021	 	 	3,532,833.25	 	 	 	0.00	 	 	 	0.00	 	 	 	3,532,833.25	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	40,682,565.15	 	 	 	0.00	 	 	 	8,913,199.70	 	 	 	31,769,365.45	 

 

			
	*	 	Values are calculated without regard to any offset for
amounts of Basic Lease Rent that are due
and owing on such date; the total amount due and payable by Lessee on such date is the sum of (i) the
Early Purchase Price and (ii) the amount of Basic Lease Rent payable on such date as set forth on Schedule
1A.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00114-of-00352.parquet"}]]