Document:

Form of First Supplemental Indenture to Indenture governing 8.25% Sr. Notes

 EXHIBIT 4.4 
  

FIRST SUPPLEMENTAL INDENTURE 
  
 FIRST SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), is dated as of
                            , by and between Pinnacle Entertainment, Inc., a Delaware corporation (the
“Company”), its subsidiaries guarantors signatories hereto (the “Guarantors”), and The Bank of New York, a New York banking corporation, as trustee (the “Trustee”). Capitalized terms used in this Supplemental Indenture
and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Indenture. 
  
 W I T N E S S E T H: 
  
 WHEREAS, the Company and the Trustee have heretofore executed and delivered the Indenture, dated as of March 15, 2004 (the “Indenture”), providing for the issuance by the Company of its securities designated
as its 8 1/4% Senior Subordinated Notes due 2012 (the “Initial Notes”) in the initial aggregate principal amount of $200,000,000, subject to the right of the Company to issue additional notes of the same series; 
  
 WHEREAS, the Company desires to reopen such series and issue additional notes
of up to $[            ] in the aggregate principal amount which will constitute a further issuance of, and will be consolidated with, the Initial Notes so as to form a single series
therewith, and will have the same CUSIP number and same terms as the Initial Notes; 
  
 WHEREAS, Section 9.01 of the Indenture authorizes the Company, the Guarantors and the Trustee to amend or supplement the Indenture and the Initial Notes to provide for the issuance of the additional notes in
accordance with the limitations set forth in the Indenture without the consent of the Holders; 
  
 WHEREAS, the Company has delivered to the Trustee, pursuant to Section 9.06 and 13.04 of the Indenture, the documents certifying that the issuance of the additional notes and execution of the Supplemental Indenture is
permitted by the terms of the Indenture; 
  
 WHEREAS, the Company
has been authorized by a resolution of the Executive Committee of its Board of Directors to execute and deliver this Supplemental Indenture and issue the Additional Notes; 
  
 WHEREAS, the Guarantors have authorized the execution and delivery of this Supplemental Indenture; and 
  
 WHEREAS, all other acts and proceedings required by law, by the Indenture and
by the certificate of incorporation and by-laws of the Company and by the organizational documents of the Guarantors to make this Supplemental Indenture, a valid and binding agreement for the purposes expressed herein, in accordance with its terms,
have been duly done and performed; 
  
 NOW THEREFORE, pursuant to
the terms of the Indenture, the series of Initial Notes established by the Indenture is hereby reopened and is hereby authorized for issuance, authentication and delivery $
[            ] aggregate principal amount of additional notes of the same series as the Initial Notes issued initially under the Indenture (the 

 
“Additional Notes”), and in consideration of the premises and the purchase and acceptance of the Additional Notes by the Holders thereof, the
Company and the Guarantors mutually covenant and agree with the Trustee, for the equal and proportional benefit of all Holders of the Initial Notes, that the Supplemental Indenture is hereby supplements and amended, to the extent and for the
purposes expressed herein, as follows: 
  
 ARTICLE ONE 

 
 Section 1.01. Amendments. 
  
 a. The series of Initial Notes established by the Indenture is hereby
reopened for the issuance of Additional Notes in an aggregate principal amount of $ [            ], which shall constitute a further issuance of, and will be consolidated with, the
Initial Notes so as to form a single series with the Initial Notes, with the same CUSIP number as the Initial Notes, and shall have the same terms as the Initial Notes, except that the Additional Notes will be issued on November
    , 2004, and interest on the Additional Notes shall accrue from September 15, 2004. 
  
 b. The Additional Notes shall be subject to, and be entitled to the benefits of the Indenture, as amended hereby, except that the date of issuance of, and
the date from which interest will begin to accrue on, the Additional Notes shall be as set forth in this Supplemental Indenture. 
  
 ARTICLE TWO 
  
 Section 2.01. Effectiveness. 
  
 This Supplemental Indenture shall be effective for all purposes as of the date and time this Supplemental Indenture has been executed and delivered by the
Company, the Guarantors and the Trustee in accordance with the Article 9.01 of the Indenture. Except as expressly provided herein, all of the terms, provisions and conditions of the Indenture and the Notes outstanding thereunder shall remain in full
force and effect. 
  
 ARTICLE THREE 
  
 Section 3.01. Construction of Supplemental Indenture. 
  
 This Supplemental Indenture is executed as and shall constitute an indenture
supplemental to the Indenture and shall be construed in connection with and as part of the Indenture. To the extent that any term of this Supplemental Indenture or the Additional Notes are inconsistent with the terms of the Indenture, the terms of
this Supplemental Indenture or the Additional Notes shall govern and supersede such inconsistent terms. This Supplemental Indenture shall be governed by and construed in accordance with the internal law of the State of New York. 
  
 Section 3.02. Trust Indenture Act Controls. 
  
 If any provision of this Supplemental Indenture limits, qualifies or
conflicts with any 

  

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provision that is required to be included by the Trust Indenture Act of 1939, as amended, as in force at the date this Supplemental Indenture is executed,
the provision required by said Trust Indenture Act shall control. 
  
 Section 3.03. Trustee Disclaimer. 
  
 The recitals
contained in this Supplemental Indenture shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Supplemental
Indenture. 
  
 Section 3.04. Counterparts. 
  
 This Supplemental Indenture may be executed in counterparts and by different
parties hereto in separate counterparts, each of which, when so executed and delivered shall be deemed to be any original and all of which, when taken together, shall constitute one and the same instrument. 
  

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 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first
above written. 
  
 Dated as of
                        ,          
  

	
	 COMPANY:

	
	 PINNACLE ENTERTAINMENT, INC.,
 a Delaware corporation

	 
	 By:                                      
                       

	 Name:                                     
                   

	 Its:                                      
                        

	
	 GUARANTORS:

	
	 BILOXI CASINO CORP.,
 a Mississippi corporation

	
	 CASINO MAGIC CORP.,
 a Minnesota corporation

	
	 CASINO ONE CORPORATION,
 a Mississippi corporation

	
	 HP/COMPTON, INC.,
 a California corporation

	
	 PNK (BOSSIER CITY), INC.,
 a Louisiana corporation

	
	 By:                                      
                       

	 Name:                                     
                   

	 Title:                                     
                     

  
  
  

			
	 BELTERRA RESORT INDIANA, LLC,
 a Nevada limited liability company

		
	 By:
	 	 Pinnacle Entertainment, Inc,
 its sole member

	 	 	 
	 	 	By:                                      
                      

  

 4 

			
	 	 	Name:                                     
                 
	 	 	Title:                                     
                    
	
	 BOOMTOWN, LLC,
 a Delaware limited liability company

		
	 By:
	 	 Pinnacle Entertainment, Inc,
 its sole member

	 	 	 
	 	 	By:                                      
                      
	 	 	Name:                                     
                 
	 	 	Title:                                     
                    

  

			
	 CRYSTAL PARK HOTEL AND CASINO DEVELOPMENT
 COMPANY, LLC,
 a California limited liability company

			
		
	 By:
	 	 HP/Compton, Inc.,
 its sole member and manager

	 	 	 
	 	 	By:                                      
                      
	 	 	Name:                                     
                 
	 	 	Title:                                     
                    

  

			
	 PNK (LAKE CHARLES), L.L.C.,
 a Louisiana limited liability company

		
	 By:
	 	 Pinnacle Entertainment, Inc.,
 its sole member and manager

	 	 	 
	 	 	By:                                      
                      
	 	 	Name:                                     
                 
	 	 	Title:                                     
                    

  

			
	 PNK (RENO), LLC,
 a Nevada limited liability company

		
	 By:
	 	 Pinnacle Entertainment, Inc,
 its sole member

  

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	 	 	 By:                                      
                                        
           

	 	 	Name:                                     
                                        
      
	 	 	Title:                                     
                                        
        
	
	 LOUISIANA-I GAMING,
 a Louisiana partnership in Commendam

		
	 By:
	 	 Boomtown, LLC.,
 a Delaware limited liability company,
 its General Partner

			
	 	 	 By:
	 	 Pinnacle Entertainment, Inc.

	 	 	Its:	 	Sole Member
			
	 	 	 	 	 By:                                      
                                        
 

	 	 	 	 	Name:                                     
                                     
	 	 	 	 	Title:                                     
                                      
 

  
  
 Dated as of                     
    ,          
  

	
	 TRUSTEE:

	
	 The Bank of New York,
 a New York banking corporation

	 
	 By:                                      
                       

	 Name:                                     
                   

	 Its:                                      
                        

  

 6Participation Agreement between NYSERDA and the Company.

 EXHIBIT 4.1 
 Execution Copy 
  
  
 NEW YORK STATE ENERGY RESEARCH 
  
 AND DEVELOPMENT AUTHORITY 
  
 and 
  
 CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. 
  

  
 PARTICIPATION AGREEMENT 
  

  

Dated as of November 1, 2004 
  
 relating to 
 $99,000,000 Facilities Revenue
Bonds, Series 2004C 
 (Consolidated Edison Company of New York, Inc. Project) 

 Execution Copy 
  
 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

	PARTICIPATION AGREEMENT
		
	 PARTIES
	  	1
	 RECITALS
	  	1
	
	ARTICLE I
	
	 DEFINITIONS; EFFECTIVE DATE AND DURATION OF
 PARTICIPATION AGREEMENT

			
	 Section 1.01.
	  	Definitions	  	3
	 Section 1.02.
	  	Effective Date of Participation Agreement; Duration of Participation Agreement	  	3
	
	ARTICLE II
	
	REPRESENTATIONS
			
	 Section 2.01.
	  	Representations and Warranties by the Authority	  	4
	 Section 2.02.
	  	Representations and Warranties by the Company	  	4
	
	ARTICLE III
	
	THE PROJECT; ISSUANCE OF BONDS
			
	 Section 3.01.
	  	The Project	  	6
	 Section 3.02.
	  	Sale of Bonds and Deposit of Proceeds	  	6
	 Section 3.03.
	  	Disbursements from Project Fund	  	6
	 Section 3.04.
	  	Adequacy of Project Fund	  	6
	 Section 3.05.
	  	Ownership and Possession of the Project	  	6
	 Section 3.06.
	  	Operation, Maintenance and Repair	  	6
	 Section 3.07.
	  	Investment of Monies in Funds Under the Indenture	  	7
	
	ARTICLE IV
	
	NOTE AND PAYMENTS
			
	 Section 4.01.
	  	Execution and Delivery of Note to Trustee	  	8
	 Section 4.02.
	  	Payments Payable; Note Payments; Additional Payments	  	8
	 Section 4.03.
	  	Notice to Pay; Medium of Payment; Acceleration	  	10
	 Section 4.04.
	  	Prepayment of Note Payments	  	10
	 Section 4.05.
	  	Company’s Payments as Trust Funds	  	11
	 Section 4.06.
	  	Absolute Obligation to Make Payments	  	11

					
	 Section 4.07.
	  	Assignment of Authority’s Rights	  	12
	 Section 4.08.
	  	Actions with Respect to or by or on behalf of the Authority under the Indenture	  	13
	 Section 4.09.
	  	Agreements of Company relating to Support Facilities	  	13
	 Section 4.10.
	  	Compensation of Trustee and Paying Agents	  	13
	 Section 4.11.
	  	Project not Security for Bonds	  	14
	 Section 4.12.
	  	Payment of Taxes and Assessments; No Liens or Charges	  	14
	 Section 4.13.
	  	Company to Pay Attorneys’ Fees and Disbursements	  	14
	 Section 4.14.
	  	No Abatement of Administration Fees and Other Charges	  	14
	
	 ARTICLE V

	
	 SPECIAL COVENANTS

			
	 Section 5.01.
	  	No Warranty as to Suitability of Project	  	15
	 Section 5.02.
	  	Authority’s Right to Inspect Project	  	15
	 Section 5.03.
	  	Company Consent to Amendment of Indenture	  	15
	 Section 5.04.
	  	Tax Covenant	  	15
	 Section 5.05.
	  	Company Agrees to Perform Obligations Imposed by Indenture	  	15
	 Section 5.06.
	  	Authority Agrees to Take Certain Actions at Direction of Company	  	15
	 Section 5.07.
	  	Certificates as to Defaults	  	15
	 Section 5.08.
	  	Recording and Filing	  	16
	 Section 5.09.
	  	Limited Obligation of Authority; Indemnification of Authority, Registrar and Paying Agent, Auction Agent and Trustee	  	16
	 Section 5.10.
	  	Provision of Information	  	17
	 Section 5.11.
	  	Ratings	  	17
	 Section 5.12.
	  	Notices	  	18
	 Section 5.13.
	  	Maintenance of Office or Agency	  	18
	 Section 5.14.
	  	Maintenance of Properties	  	18
	 Section 5.15.
	  	Insurance	  	18
	 Section 5.16.
	  	Proper Books of Record and Account	  	18
	 Section 5.17.
	  	Compliance with Laws	  	18
	 Section 5.18.
	  	Consolidation, Merger or Sale of Assets	  	19
	 Section 5.19.
	  	Financial Statements of Company	  	19
	 Section 5.20.
	  	Information to Support Facility Issuer	  	20
	
	 ARTICLE VI

	
	 REDEMPTION OF BONDS

			
	 Section 6.01.
	  	Redemption of Bonds	  	21

					
	 ARTICLE VII

	
	 EVENTS OF DEFAULT AND REMEDIES

			
	 Section 7.01.
	  	Events of Default Defined	  	22
	 Section 7.02.
	  	Remedies on Default	  	23
	 Section 7.03.
	  	No Remedy Exclusive	  	24
	 Section 7.04.
	  	No Additional Waiver Implied by One Waiver	  	25
	
	 ARTICLE VIII

	
	 MISCELLANEOUS

			
	 Section 8.01.
	  	Disposition of Amounts after Payment of Bonds	  	26
	 Section 8.02.
	  	Notices	  	26
	 Section 8.03.
	  	Successors and Assigns	  	26
	 Section 8.04.
	  	Amendment of Participation Agreement	  	26
	 Section 8.05.
	  	Participation Agreement Supersedes Any Prior Agreements	  	26
	 Section 8.06.
	  	Further Assurances and Corrective Instruments	  	26
	 Section 8.07.
	  	Counterparts	  	27
	 Section 8.08.
	  	Severability	  	27
	 Section 8.09.
	  	Delegation of Duties by Authority	  	27
	 Section 8.10.
	  	Survival of Representations, Warranties and Covenants	  	27
	 Section 8.11.
	  	NEW YORK LAW TO GOVERN	  	27
		
	 TESTIMONIUM
	  	28
		
	 SIGNATURES AND SEALS
	  	28
		
	 ACKNOWLEDGMENTS
	  	28
			
	 EXHIBIT A
	  	Description of Project Exempt Facilities	  	A-1
			
	 EXHIBIT B
	  	Description of Other Project Facilities	  	B-1
			
	 EXHIBIT C
	  	Form of Note	  	C-1

 This PARTICIPATION AGREEMENT, dated as of November 1, 2004, between NEW YORK STATE ENERGY RESEARCH AND
DEVELOPMENT AUTHORITY, a body corporate and politic, constituting a public benefit corporation, established and existing under and by virtue of the laws of the State of New York (the “Authority”) and CONSOLIDATED EDISON COMPANY OF NEW
YORK, INC., a corporation duly organized and existing and qualified to do business as a public utility under the laws of the State of New York (the “Company”), 
  
 WITNESSETH: 
  
 WHEREAS, pursuant to a special act of the Legislature of the State of New York (Title 9 of Article 8 of the Public Authorities Law of New York, as from
time to time amended and supplemented, herein called the “Act”), the Authority has been established, as a body corporate and politic, constituting a public benefit corporation; and 
  
 WHEREAS, pursuant to the Act, the Authority is empowered to contract with any
power company to participate in the construction of facilities for the furnishing of electric energy and the furnishing of gas to the extent required by the public interest in development, health, recreation, safety, conservation of natural
resources and aesthetics; and 
  
 WHEREAS, pursuant to the Act,
the Authority is also authorized to extend credit and make loans from bond proceeds to any person for the construction, acquisition, installation, reconstruction, improvement, maintenance, equipping, furnishing or leasing of any special energy
project (as defined in the Act) including, but not limited to, facilities for the distribution of steam or for the reimbursement to any person for costs incurred in connection with a special energy project completed or not completed at the time of
such credit or loan, which credits or loans may, but need not, be secured by mortgages, contracts, leases or other instruments, upon such terms and conditions as the Authority shall determine reasonable in connection with such credits or loans; and

  
 WHEREAS, the Authority is also authorized under the Act to
borrow money and issue its negotiable bonds and notes to provide sufficient monies for achieving its corporate purposes, including the refunding of its outstanding obligations; and 
  
 WHEREAS, the Authority is also authorized under the Act to enter into any contracts and to execute all instruments necessary
or convenient for the exercise of its corporate powers and the fulfillment of its corporate purposes; and 
  
 WHEREAS, the Company is a public utility corporation doing business in the State of New York and provides electric energy and gas service in The City of
New York and the County of Westchester, New York and provides steam service in the Borough of Manhattan; and 
  
 WHEREAS, the Company has requested that the Authority issue bonds for the purpose of refunding the Authority’s 7 1/8% Facilities Revenue Bonds, Series 1994 A (Consolidated Edison Company of New York, Inc. Project), in the aggregate
principal amount of $100,000,000 (the “Prior Bonds”) issued to finance a portion of the cost of acquisition, construction and installation of certain facilities for the local furnishing of gas within the Company’s service area; and

  

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 WHEREAS, the Authority proposes to issue a series of such bonds in the aggregate principal amount of
$99,000,000 Facilities Revenue Bonds, Series 2004C (Consolidated Edison Company of New York, Inc. Project) (the “Bonds”), which will be used, together with Company funds, to refund the Prior Bonds, such Bonds to be issued under and secured
by a Trust Indenture dated as of November 1, 2004, between the Authority and The Bank of New York, as Trustee (the “Indenture”); and 
  
 WHEREAS, the Authority, by Resolution No. 1065, adopted September 20, 2004, has determined to issue the Bonds, in an aggregate principal amount not to
exceed $100,000,000, for the purpose of refunding the Prior Bonds, all such Bonds to be issued under and secured by the Indenture; 
  
 NOW, THEREFORE, for and in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, it is hereby agreed by and
between the parties as follows: 
  

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 ARTICLE I 
  
 DEFINITIONS; EFFECTIVE DATE AND DURATION 
 OF
PARTICIPATION AGREEMENT 
  
 Section 1.01. Definitions. The
terms used in this Participation Agreement which are defined in the Indenture shall have the meanings, respectively, herein which such terms are given in the Indenture. 
  
 Section 1.02. Effective Date of Participation Agreement; Duration of Participation Agreement. This Participation
Agreement shall become effective upon its execution and delivery, and shall continue in full force and effect until the principal of and premium, if any, and interest on the Note and Bonds have been fully paid (or provision for their payment has
been made in accordance with the provisions of the Indenture), and all sums to which the Authority or the Trustee are entitled hereunder have been fully paid. 
  

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 ARTICLE II 
  
 REPRESENTATIONS 
  
 Section 2.01. Representations and Warranties by the Authority. The Authority represents and warrants as follows: 
  
 (a) The Authority is a body corporate and politic,
constituting a public benefit corporation, established and existing under the laws of the State of New York; 
  
 (b) The Authority has full power and authority to execute and deliver the Bonds, this Participation Agreement, the Tax Regulatory
Agreement, the Indenture, the Bond Purchase Trust Agreement and to consummate the transactions contemplated hereby and thereby and perform its obligations hereunder and thereunder; 
  
 (c) The Authority is not in violation of or in default under any of the provisions of the laws or the
Constitution of the State of New York which would affect its existence or its powers referred to in the preceding paragraph (b); 
  
 (d) The Authority has determined that its participation in the Project and the refunding of the Prior Bonds, as contemplated by this
Participation Agreement, is in the public interest; 
  
 (e) The Authority has duly authorized the execution and delivery of this Participation Agreement, the Indenture, the Tax Regulatory Agreement and the Bond Purchase Trust Agreement and the execution and delivery of the other documents
incidental to this transaction and all necessary authorizations therefor or in connection with the performance by the Authority of its obligations hereunder or thereunder have been obtained and are in full force and effect; and 
  
 (f) The execution and delivery by the Authority of the
Bonds, this Participation Agreement, the Tax Regulatory Agreement, the Indenture, the Bond Purchase Trust Agreement and the other documents incidental to this transaction and the consummation of the transactions herein or therein contemplated will
not violate or cause a default under any indenture, mortgage, loan agreement or other contract or instrument to which the Authority is a party or by which it is bound, or any judgment, decree, order, statute, rule or regulation applicable to the
Authority. 
  
 Section 2.02. Representations and Warranties by
the Company. The Company represents and warrants as follows: 
  
 (a) The Company is a corporation duly incorporated and in good standing under the laws of the State of New York, is duly qualified and authorized to transact business as a public utility in the State of New York and
is not in violation of any provision of its Certificate of Incorporation or its By-Laws, has power to enter into, execute and deliver this Participation Agreement, the Tax Regulatory Agreement and the Note and by proper corporate action has duly
authorized the execution and delivery of this Participation Agreement, the Tax Regulatory Agreement and the Note; 
  

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 (b) The execution and delivery by the Company of this Participation Agreement, the Tax
Regulatory Agreement and the Note and the consummation of the transactions herein and therein contemplated will not conflict with or constitute a breach of or a default under the Company’s Certificate of Incorporation or By-Laws or a default in
any material respect under any indenture, mortgage, loan agreement or other contract or instrument to which the Company is a party or by which it is bound, or any judgment, decree, order, statute, rule or regulation applicable to the Company;

  
 (c) This Participation Agreement, the Tax
Regulatory Agreement and the Note have been duly executed and delivered by the Company and constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as
enforcement may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or other laws relating to or affecting the enforcement of creditors’ rights or contractual obligations generally or principles of equity or judicial
discretion; 
  
 (d) The execution and delivery by
the Company of this Participation Agreement and the Note in the manner and for the purposes herein set forth have been duly authorized by order of the Public Service Commission of the State of New York; and 
  
 (e) No additional authorizations for or approvals of the
execution and delivery by the Company of this Participation Agreement, the Tax Regulatory Agreement and the Note need be obtained by the Company or if any such authorization or approval is necessary it has been obtained. 
  

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 ARTICLE III 
  
 THE PROJECT; ISSUANCE OF BONDS 
  
 Section 3.01. The Project. Construction of the Project is complete. The Project is the property of the Company. In order to effectuate the purposes
of this Participation Agreement, the Company, in its own name, will do or cause to be done all things requisite or proper for the fulfillment of the obligations of the Company under this Participation Agreement. 
  
 Section 3.02. Sale of Bonds and Deposit of Proceeds. In order to
provide funds for the refunding of the Prior Bonds, the Authority, on the date specified in the Bond Purchase Agreement or as soon thereafter as practicable, and concurrently with the issuance and delivery to the Trustee of the Note as provided in
Section 4.01 hereof, will issue, sell and deliver the Bonds, all pursuant to and as provided in the Bond Purchase Agreement and subject to the conditions set forth in Section 2.06 of the Indenture, and will deposit the proceeds of such sale
including the accrued interest, if any, paid by the initial purchasers of the Bonds in the Project Fund. 
  
 Section 3.03. Disbursements from Project Fund. 1. The Authority has in the Indenture authorized and directed the Trustee to make payments from the
Project Fund in accordance with Section 8.01 of the Indenture, to pay the redemption price of the Prior Bonds and costs related thereto upon receipt from time to time of letters signed by an Authorized Company Representative in accordance with
Section 8.01 of the Indenture. Concurrently with the delivery by the Company of each such letter to the Trustee, the Company will deliver to the Authority a copy thereof and any attachments thereto. The Company will indemnify and save harmless the
Authority and the Trustee from any liability incurred in connection with any letter so delivered and any payments made in reliance thereon. 
  
 2. All monies remaining in the Project Fund after the redemption of the Prior Bonds and payment of all costs related thereto shall, at the written
direction of an Authorized Company Representative, be paid to the Company. 
  
 Section 3.04. Adequacy of Project Fund. The Company acknowledges that the monies in the Project Fund are not sufficient to pay the redemption price of the Prior Bonds and costs related thereto in full. The
Company shall pay that portion of the redemption price of the Prior Bonds and costs related thereto in excess of the monies available therefor in the Project Fund with its own funds. 
  
 Section 3.05. Ownership and Possession of the Project. Issuance of the Bonds will not vest in the owners thereof, the
Trustee, the Authority or any other person, ownership, or the right to possession, of the Project. The Company is entitled to sole and exclusive ownership and possession of the Project. 
  
 Section 3.06. Operation, Maintenance and Repair. The Company agrees to proceed in good faith to maintain the
availability of the Project for use as an authorized project under the Act. Notwithstanding the foregoing, the Authority and the Company recognize that the Project will constitute integrated portions of gas distribution facilities of the Company and
that it 
  

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 is not feasible to administer the Project separately from such facilities. The Company shall operate the Project (with
such changes, improvements or additions as the Company may deem desirable) as part of such facilities for the joint useful lives of the Project and such facilities and shall maintain and repair the Project and such facilities in conformity with the
Company’s normal maintenance and repair programs for the Project and such facilities; provided that the Company shall have no obligation to operate, maintain or repair any element or item of the Project or such facilities, the operation,
maintenance or repair of which becomes uneconomic to the Company because of damage or destruction or obsolescence (including physical, functional and economic obsolescence), or change in government standards and regulations, or the termination by
the Company of the operation of the Project or such facilities to which the element or item of the Project or such facilities is an adjunct. 
  
 Section 3.07. Investment of Monies in Funds Under the Indenture. Any monies held as a part of any fund created under the Indenture shall, at the
direction of an Authorized Company Representative, be invested or reinvested by the Trustee as provided in Article IX of the Indenture. 
  

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 ARTICLE IV 
  
 NOTE AND PAYMENTS 
  
 Section 4.01. Execution and Delivery of Note to Trustee. Concurrently with the authentication by the Trustee and delivery by the Authority of the
Bonds and in order to evidence the obligation of the Company to the Authority to repay the Bonds, the Authority hereby directs the Company, and the Company hereby agrees, to execute and deliver to the Trustee its Note, duly and validly executed and
delivered, relating to the Bonds. The Note shall be in substantially the form attached hereto as Exhibit C with only such changes to such form as may be approved by the Authority. Thereafter, the Company shall be obligated to make the Note Payments,
constituting payments of principal of, and premium, if any, and interest on the Note, and the Additional Payments required by this Participation Agreement. Such obligations shall terminate on the date when the Note has been paid in full. The Note
may be prepaid in accordance with Section 4.04 hereof. Upon payment or provision for payment in full of all amounts payable or to become payable under the Note, the Trustee shall cancel the Note and deliver the same to the Company. Provision for
payment in full of all amounts payable or to become payable under the Note shall be deemed to have occurred upon receipt by the Trustee of written notice from the Authority acknowledging that the Company has satisfied its obligations to the
Authority under the Note. The Authority agrees to deliver such written notice to the Trustee and the Bond Insurer promptly when such provision for payment in full has been made. 
  
 Section 4.02. Payments Payable; Note Payments; Additional Payments. (a) The Company covenants and agrees to pay the
Payments as and when the same are due and payable in accordance with the Note and this Section 4.02. The Company shall provide the Trustee with a written allocation of amounts paid under this Section 4.02 among the various purposes set forth in this
Section 4.02. 
  
 (b) The Note Payments shall be
in an aggregate amount sufficient for, together with other amounts held by the Trustee and available under the Indenture for application to, the payment in full of the Bonds consisting of (i) the total interest becoming due and payable on the Bonds
to the date of payment thereof, and (ii) the total principal amount plus premium, if any, of the Bonds. 
  
 (c) The Company shall make Note Payments as set forth in Section 4.02(b) at or prior to the time the corresponding payment is due on the
Bonds. Each installment of Note Payments paid by the Company shall be increased as may be necessary to make up any previous deficiency of any of the required payments and to make up any deficiency in the Bond Fund. 
  
 (d) In addition, the Company shall pay to the Registrar and
Paying Agent for deposit in the Bond Purchase Fund and credit to the Company Account therein an amount sufficient to provide for the payment of the Purchase Price (as defined in the Bond Purchase Trust Agreement) of any Bond tendered for purchase
pursuant to the Bond Purchase Trust Agreement to the extent that sufficient moneys are not available for the payment of such Purchase Price from the other sources described therein. 
  

 8 

 (e) The Company covenants that it shall deposit, or cause to be deposited with the
Trustee, sufficient funds to assure that no default shall occur in the payment of the principal of or premium, if any, or the interest on, or the Purchase Price of, the Bonds as and when due, and that no unreasonable delay shall occur in the payment
of the costs and expenses payable from Additional Payments. 
  
 (f) The Company further covenants and agrees to pay, when due and payable, as Additional Payments, certain additional amounts and costs and expenses. Each installment of Additional Payments, if any, shall be equal to
the sum of the amounts set forth in clauses (i) to (iv), inclusive, below, and shall be paid directly to the persons entitled to such payments. “Additional Payments” is hereby defined to be the aggregate of the installments of the
following: 
  
 (i) the reasonable fees and
expenses payable to the Trustee, any Indexing Agent, the Registrar and Paying Agent, any issuer of a Support Facility and any Remarketing Agent under any Remarketing Agreement (and in the case of Auction Rate Bonds, the Auction Agent under the
Auction Agency Agreement, and any Broker-Dealers under the respective Broker-Dealer Agreements), and of any counsel or agents of any of the foregoing; 
  
 (ii) all costs incurred in connection with the transfer, exchange, purchase or redemption of Bonds not otherwise paid by the holders
thereof, including all charges of the Authority (and in the case of Auction Rate Bonds, the Auction Agent, any Broker-Dealer and any Remarketing Agent), the Registrar and Paying Agent and the Trustee with respect thereto, to the extent monies are
not otherwise available therefor; 
  
 (iii) the
reasonable fees and other costs incurred for services of such attorneys and accountants as are employed to make examinations, provide services, render opinions and prepare reports required under this Participation Agreement, the Tax Regulatory
Agreement, the Bond Purchase Trust Agreement, and the Indenture; and 
  
 (iv) initial administration fees of the Authority in the amount of $247,500 on the date of authentication and delivery of the Bonds to the initial purchasers thereof, an annual fee equal to $130 per million dollar
principal amount of the Bonds on November 1, 2005 and on November 1 of each year thereafter, based upon the amount of Bonds Outstanding as of such November 1 and for purposes of the calculation of such fee, rounding up to the nearest whole million
dollars, and all reasonable expenses, disbursements, advances, taxes, assessments or impositions, not otherwise paid under this Participation Agreement or the Indenture, incurred by or imposed upon the Authority in connection with its administration
and enforcement of, and compliance with, this Participation Agreement, any Auction Agency Agreement, the Bond Purchase Trust Agreement, any Remarketing Agreement and the Indenture, which amounts the Company is obligated to pay, including, but not
limited to, reasonable attorneys’ fees. In addition, the Company shall deliver to the Authority a check payable to 
  

 9 

 the State of New York with respect to a bond issuance charge applicable to the Bonds pursuant to Section
2976 of the Public Authorities Law of the State of New York in the amount specified by such section on the date of authentication and delivery of the Bonds. 
  
 (g) In the event that the Company shall fail to make any Payment as required by Sections 4.02(a) – (e) hereof, the Payment so in
default shall continue as an obligation of the Company until the amount in default shall have been fully paid, and the Company agrees to pay the same with interest thereon, which interest shall also constitute an obligation of the Company at the
maximum rate of interest payable on the Bonds pursuant to the Indenture, to the extent permitted by law, from the date of default until paid; provided, that the Company agrees in the event the Company shall fail to make any Payment during an Auction
Rate Period, the Payment so in default shall continue as an obligation of the Company until the amount in default shall have been fully paid, and the Company agrees to pay the same with interest thereon, which interest shall also constitute an
obligation of the Company at the Overdue Rate, to the extent permitted by law, from the date of default until paid. Nothing in this Section 4.02 shall require the Company to pay costs and expenses mentioned in clause (f)(iii) above so long as the
validity or the reasonableness thereof shall be contested in good faith unless the Trustee shall receive an opinion of independent counsel that such contest jeopardizes the respective interests of the Authority and the Trustee in this Participation
Agreement, any Auction Agency Agreement, the Bond Purchase Trust Agreement, the Indenture or any Remarketing Agreement, in which event the Company shall pay such costs and expenses (without prejudice to any rights of the Company to recover such
costs and expenses if not valid or reasonable) to the end that the respective interests of the Authority and the Trustee, in the opinion of independent counsel, are not jeopardized. 
  
 Section 4.03. Notice to Pay; Medium of Payment; Acceleration. Failure to receive any prior notice of the due date of
any Payment will not relieve the Company of its obligation to pay such Payment when it is due and payable. The Company covenants and agrees that it will pay or cause to be paid when due and payable hereunder the Payments, and every installment
thereof, without notice or demand therefor and without abatement, reduction or set-off of any kind or nature whatsoever, in lawful money of the United States of America. 
  
 If pursuant to the provisions of Section 12.03 of the Indenture, the Bonds are accelerated or shall otherwise be declared
due and payable immediately, then the Company shall forthwith pay or cause to be paid to the Trustee an amount sufficient with all other funds available therefor, to pay the Bonds in full and, secondly an amount which shall be sufficient, with all
other funds available therefor, to pay all other obligations of the Authority or the Company incurred or to be incurred under the Indenture, this Participation Agreement, the Auction Agency Agreement, the Bond Purchase Trust Agreement or any
Remarketing Agreement. 
  
 Section 4.04. Prepayment of Note
Payments. The Note may be prepaid, in whole or in part, at the option of the Company in connection with an optional redemption of the Bonds pursuant to Article V of the Indenture and shall be prepaid, in whole or in part, in 
  

 10 

 connection with any mandatory redemption of the Bonds pursuant to Article V of the Indenture other than a mandatory
redemption pursuant to Section 5.07 of the Indenture. Prepayment of the Note pursuant to the preceding sentence shall be with or without premium, as required to provide sufficient funds to redeem the Bonds being redeemed pursuant to Article V of the
Indenture. The Note also may be prepaid in whole or in part at any time, without premium, at the option of the Company subsequent to the redemption of the Bonds with moneys furnished by the State of New York pursuant to Section 5.07 of the
Indenture. 
  
 The Company shall give notice to the Trustee and
the Authority of any intention to prepay the Note in whole or in part and of the principal amount to be prepaid not more than sixty (60) nor less than thirty-five (35) days prior to the date on which such prepayment is to be made on the Note. Such
optional prepayment may be made not later than one (1) Business Day prior to the date of prepayment of the Bonds. 
  
 The Company may also elect to provide for the defeasance of the Bonds in accordance with Article XV of the Indenture and upon the defeasance of the Bonds,
the Note will be deemed paid, in whole or in applicable part. 
  
 Section 4.05. Company’s Payments as Trust Funds. All Note Payments and Additional Payments required to be made by the Company under this Participation Agreement and the Note to the Authority, the Trustee or the Registrar and
Paying Agent which under the Indenture are required to be applied in payment of or as security for the Bonds, shall be and constitute and are hereby declared to be trust funds, whether held by the Authority, the Trustee, the Registrar and Paying
Agent, or any bank or trust company, designated for such purpose and shall continue to be impressed with a trust until such monies are applied in the manner provided in the Indenture. 
  
 Section 4.06. Absolute Obligation to Make Payments. The obligation of the Company to pay the Note Payments and the
Additional Payments, as required by this Participation Agreement and the Note, and to satisfy any other financial liabilities incurred hereunder and thereunder shall be an absolute, direct, general obligation, and shall be unconditional and shall
not be abated, rebated, set off, reduced, abrogated, waived, diminished or otherwise modified in any manner or to any extent whatsoever (other than for prior payment), regardless of any rights of set-off, recoupment or counterclaim that the Company
might otherwise have against the Authority or the Trustee or any other party or parties and regardless of any contingency, act of God, event or cause whatsoever and notwithstanding any circumstance or occurrence that may arise or take place
including, but without limiting the generality of the foregoing, the following: 
  
 (a) any damage to or destruction of any part or all of the Project; 
  
 (b) the taking or damaging of any part or all of the Project by any public authority or agency in the
exercise of the power of eminent domain or otherwise; 
  
 (c) any assignment, novation, merger, consolidation, transfer of assets, subleasing or other similar transaction of or affecting the Company whether with or without the approval of the Trustee, except as otherwise expressly provided in this
Participation Agreement; 
  

 11 

 (d) with respect solely to the obligation of the Company to pay the Additional Payments,
the termination of this Agreement and payment or provision for payment in full of the amount due under the Note pursuant to the provisions hereof; 
  
 (e) any failure of any party to perform or observe any agreement or covenant, whether express or implied, or any duty, liability or
obligation arising out of or in connection with this Participation Agreement, the Note, the Auction Agency Agreement, any Broker-Dealer Agreement, any Remarketing Agreement, the Bond Purchase Trust Agreement or the Indenture; 
  
 (f) any change or delay in the time of availability of the
Project or any part thereof for use of the Project or any part thereof; 
  
 (g) any acts or circumstances that may constitute an eviction or constructive eviction from any part of the Project; 
  
 (h) failure of consideration, failure of title to any part of the Project or commercial frustration; and 
  
 (i) any change in the tax or other laws of the United States
or of any state or other governmental authority; 
  
 provided, however, that the
foregoing shall not be deemed to be a waiver of any right of recourse the Company may have against the Authority, the holder of any Bond or others, including but not limited to, the rights, causes of action or claims which may arise out of the
breach of their respective obligations or the inaccuracy of their respective warranties, provided, however, that the Company may pursue any such right, claim or cause of action only by a separate proceeding or action and not by counterclaim or
set-off hereunder and the bringing of such separate proceeding or action shall not affect the Company’s absolute, irrevocable and unconditional obligation to make payments pursuant to this Section 4.06. 
  
 Section 4.07. Assignment of Authority’s Rights. As security for
the payment of the Bonds, the Authority will assign to the Trustee the Participation Agreement and the Note and all of the Authority’s rights, remedies and interest under this Participation Agreement and the Note, including the right to receive
payments under this Participation Agreement and the Note (except the Authority’s rights with respect to (a) administrative compensation, attorney’s fees and indemnification, (b) the receipt of notices, opinions, reports, copies of
instruments and other items of a similar nature required to be delivered to the Authority under this Participation Agreement, (c) granting approvals and consents and making determinations when required under this Participation Agreement, (d) making
requests for information and inspections in accordance with this Participation Agreement, (e) Article III and Sections 4.02(f), 4.14 and 5.09 of this Participation Agreement and, insofar as the obligations of the Company under Section 4.12 of this
Participation Agreement relate to taxes and assessments imposed upon the Authority and not the Trustee, Section 4.12 thereof and (f) the right to amend this Participation Agreement) and 
  

 12 

 hereby directs the Company to make said payments directly to the Trustee or in the case of the Purchase Price to the
Registrar and Paying Agent. The Company herewith assents to such assignment and will make payments under this Participation Agreement and the Note (except (i) payments made pursuant to Sections 4.02(f) and 5.09 hereof which shall be made directly to
the Authority and (ii) payments of the Purchase Price, which shall be made directly to the Registrar and Paying Agent) directly to the Trustee without defense or set-off by reason of any dispute between any of the Company, the Trustee or Registrar
and Paying Agent. Except as provided in the Indenture, the Authority will not sell, assign, transfer, convey or otherwise dispose of its interest in this Participation Agreement during the term of this Participation Agreement. 
  
 Section 4.08. Actions with Respect to or by or on behalf of the Authority
under the Indenture. The Authority hereby grants the right to the Company to request the Authority to take certain actions under the Indenture and/or to perform or undertake certain actions as specified under the Indenture. The Company agrees to
request the Authority to take action or undertake or perform any action solely in compliance with or after complying with the requirements and provisions of the Indenture. 
  
 Section 4.09. Agreements of Company relating to Support Facilities. The Company agrees not to request that the
interest rate mode applicable to the Bonds be adjusted to another Adjustable Rate or a Fixed Rate unless the Bonds to be converted will be rated at least “A” by S&P or “A2” by Moody’s or “A” by Fitch or an
equivalent rating by any nationally recognized rating agency. 
  
 The Company further agrees that it will maintain a Liquidity Facility issued by a financial institution rated not less than “A” by at least one nationally recognized rating agency in effect with respect to the Bonds at all times,
except with respect to Bonds bearing interest at an Auction Rate, a Fixed Rate or a Term Rate for a Calculation Period in excess of thirteen months. 
  
 Section 4.10. Compensation of Trustee and Paying Agents. The Company agrees: 
  
 (1) to pay to the Trustee from time to time such compensation for all services rendered by it in any
capacity under the Indenture as shall from time to time be agreed in writing (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); 
  
 (2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred by the Trustee under the Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except
any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and 
  
 (3) to pay to the Registrar and Paying Agent, if other than the Trustee, reasonable compensation for all services rendered by it as
Registrar and Paying Agent under the Indenture and reimburse it for its reasonable expenses incurred under the Indenture, except any such expense as may be attributable to its negligence or bad faith. 
  

 13 

 Section 4.11. Project not Security for Bonds. It is expressly recognized by the parties that none
of the Project or any of its gas distribution facilities will constitute any part of the security for the Bonds. The principal security for the Bonds shall be the Note and the absolute, irrevocable and unconditional obligation of the Company to make
the Note Payments. 
  
 Section 4.12. Payment of Taxes and
Assessments; No Liens or Charges. The Company will (a) pay, when the same shall become due and payable, all taxes and assessments, including income, profits, property or excise taxes, if any, or other municipal or governmental charges, imposed,
levied or assessed by the Federal, state or any municipal government upon the Authority or the Trustee in respect of any payments (other than payments made pursuant to Section 4.10) made or to be made pursuant to this Participation Agreement or the
Notes and (b) pay or cause to be discharged, within sixty (60) days after the same shall accrue, any lien or charge upon any such payment (except as aforesaid) made or to be made under this Participation Agreement; provided that the Company shall
not be required to pay any such tax, assessment or charge so long as (i) the Company at its expense contests by appropriate legal proceedings conducted in good faith and with due diligence the amount, validity or application of any such tax,
assessment or charge, (ii) such proceedings shall have the effect of suspending the collection thereof from the Authority and the Trustee, and (iii) the Company shall indemnify and hold the Authority and the Trustee harmless from any losses, costs,
charges, expenses (including reasonable attorneys’ fees and disbursements), judgments and liabilities arising in respect of such tax, assessment or charge and the nonpayment thereof. 
  
 Section 4.13. Company to Pay Attorneys’ Fees and Disbursements. If the Company shall default under any of the
provisions of this Participation Agreement and the Authority or the Trustee or both shall employ attorneys or incur other expenses for the collection of payments due under this Participation Agreement or the Note or for the enforcement of
performance or observance of any obligation or agreement on the part of the Company contained in this Participation Agreement, the Company will on demand therefor reimburse the reasonable fees of such attorneys and such other reasonable
disbursements so incurred. 
  
 Section 4.14. No Abatement of
Administration Fees and Other Charges. It is understood and agreed that so long as any Bonds are outstanding under the Indenture, the Administration Fees and other charges payable to the Authority pursuant to this Participation Agreement or the
Note shall continue to be payable at the times and in the amount herein specified, whether or not the Project, or any portion thereof, shall have been destroyed by fire or other casualty, or title thereto or the use thereof shall have been taken by
the exercise of the power of eminent domain, and that there shall be no abatement of any such Administration Fees and other charges by reason thereof. 
  

 14 

 ARTICLE V 
  
 SPECIAL COVENANTS 
  
 Section 5.01. No Warranty as to Suitability of Project. The Authority makes no warranty, either express or implied, with respect to actual or
designed capacity of the Project, as to the suitability of the Project for the purposes specified in this Participation Agreement, as to the condition of the Project, or that the Project will be suitable for the Company’s purposes or needs.

  
 Section 5.02. Authority’s Right to Inspect
Project. The Authority shall have the right at all reasonable times to examine and inspect the Project. 
  
 Section 5.03. Company Consent to Amendment of Indenture. The Authority and the Trustee shall not enter into any indenture supplemental to or
amendatory of the Indenture which affects the rights or obligations of the Company without the prior consent of the Company as evidenced by a certificate in writing signed by an Authorized Company Representative. 
  
 Section 5.04. Tax Covenant. Notwithstanding any other provision
hereof, the Company covenants and agrees that it will not take or authorize any action or permit any action within its reasonable control to be taken, or fail to take any action within its reasonable control, with respect to the Project, or the
proceeds of any series of the Bonds, including any amounts treated as proceeds of the Bonds for any purpose of Section 103 of the Code, which will result in the loss of the exclusion of interest on any series of Bonds from gross income for Federal
income tax purposes under Section 103 of the Code (except for any Bond during any period while any such Bond is held by a person referred to in Section 147(a) of the Code). This provision shall control in case of conflict or ambiguity with any other
provision of this Participation Agreement. In furtherance of such covenant and agreement as it relates to the Bonds, the Authority and the Company have entered into the Tax Regulatory Agreement and the Company hereby covenants and agrees to comply
with the provisions thereof. 
  
 Section 5.05. Company Agrees
to Perform Obligations Imposed by Indenture. The Company agrees to perform such obligations as may be required of it by the provisions of the Indenture. 
  
 Section 5.06. Authority Agrees to Take Certain Actions at Direction of Company. The Authority agrees to exercise any option to redeem the Bonds
pursuant to Section 5.01 of the Indenture at the direction of the Company. The Authority agrees to exercise its rights under Article XV of the Indenture upon the request of the Company. 
  
 Section 5.07. Certificates as to Defaults. The Company shall file with the Trustee and the Support Facility, on or
before November 15 of each year, commencing on November 15, 2004, a certificate signed by an Authorized Company Representative stating that, to the best of his or her knowledge, information and belief, the Company has kept, observed, performed and
fulfilled each and every one of its covenants and obligations contained in this Participation Agreement, the Tax Regulatory Agreement and in the Note and, to the best of his knowledge, information and belief, there does not exist at the date of such
certificate any Event 
  

 15 

 of Default hereunder or other event which, with notice or the lapse of time specified in Section 7.01 hereof, or both,
would become an Event of Default or, if any such Event of Default or other event shall so exist, specifying the same and the nature and status thereof. 
  
 Section 5.08. Recording and Filing. The Company hereby covenants that it will cause all financing statements related to the Indenture and all
supplements thereto and this Participation Agreement and all supplements thereto, as well as such other security agreements, financing statements and all supplements thereto and other instruments as may be required from time to time to be kept, to
be recorded and filed in such manner and in such places as may from time to time be required by law in order to preserve and protect fully the security of Holders of the Bonds and the rights of the Trustee hereunder, and to take or cause to be taken
any and all other action necessary to perfect the security interest created by the Indenture and shall, within ten (10) days after such filing, cause there to be furnished to the Trustee and the Bond Insurer an opinion of counsel as to the adequacy
and details of such filing and specifying any re-filing to be effected in the future. 
  
 Section 5.09. Limited Obligation of Authority; Indemnification of Authority, Registrar and Paying Agent, Auction Agent and Trustee. The Bonds shall not be general obligations of the Authority, and shall not
constitute an indebtedness of or a charge against the general credit of the Authority or give rise to any pecuniary liability of the Authority. The liability of the Authority under the Bonds shall be enforceable only to the extent provided in the
Indenture, and the Bonds shall be payable solely from the Note Payments and any other funds held by the Trustee under the Indenture and available for such payment. The Bonds shall not be a debt of the State of New York, and the State of New York
shall not be liable thereon. 
  
 No member, officer, agent or
employee of the Authority shall be personally liable for the payment of the Bonds or any money or damages hereunder or related hereto. Notwithstanding the fact that it is the intention of the parties hereto that the Authority and all officers and
employees thereof shall not incur pecuniary liability by reason of the terms of this Participation Agreement, or the undertakings required of the Authority hereunder or any officer or employee thereof, by reason of the issuance of the Bonds, the
execution and delivery of any document, including, but not limited to, the Indenture, the Tax Regulatory Agreement, this Participation Agreement, the Note, any Auction Agency Agreement, any Remarketing Agreement, the Bond Purchase Trust Agreement,
any Broker-Dealer Agreement or any final official statement, or by reason of the performance or non-performance of any act required of it by this Participation Agreement or any such other agreement, or the performance or non-performance of any act
requested of it by the Company, including all claims, liabilities or losses arising in connection with the violation of any statutes or regulations pertaining to the foregoing; nevertheless, if the Authority (including any person at any time serving
as an officer or employee of the Authority) should incur any such pecuniary liability, then in such event the Company shall indemnify and hold harmless the Authority (including any person at any time serving as an officer or employee of the
Authority) against all claims by or on behalf of any person, firm or corporation or other legal entity, arising out of the same, and all costs and expenses incurred in connection with any such claim or in connection with any action or proceeding
brought thereon. 
  

 16 

 The Company releases the Authority (including any person at any time serving as an officer or employee of
the Authority), the Registrar and Paying Agent, the Auction Agent and the Trustee (including any person at any time serving as an officer or employee of the Trustee, the Registrar and Paying Agent or any Auction Agent) from, agrees that the
Authority (including any person at any time serving as an officer or employee of the Authority), the Registrar and Paying Agent, any Auction Agent and the Trustee (including any person at any time serving as an officer or employee of the Trustee,
the Registrar and Paying Agent or any Auction Agent) shall not be liable for, and agrees to indemnify and hold the Authority (including any person at any time serving as an officer or employee of the Authority) and the Trustee, any Auction Agent,
the Registrar and Paying Agent (including any person at any time serving as an officer or employee of the Trustee, any Auction Agent or the Registrar and Paying Agent) harmless, to the fullest extent permitted by law from any losses, costs, charges,
expenses (including reasonable attorneys’ and agents’ fees and expenses), by reason of (i) any liability for any loss or damage to property or any injury to, or death of, any person that may be occasioned by any cause whatsoever arising
out of the construction or operation of the Project, or (ii) any action, suit or proceeding instituted or threatened in connection with the transactions contemplated by this Participation Agreement, the Indenture and the Note, provided, however,
that the Company shall not be liable as the result of the negligence of the Authority, the Trustee, the Registrar and Paying Agent, any Remarketing Agent or any Auction Agent or bad faith or wilful misconduct of the Authority, the Trustee, the
Registrar and Paying Agent, any Remarketing Agent or any Auction Agent (including any person at any time serving as an officer or employee of the Authority or the Trustee, the Registrar and Paying Agent, any Remarketing Agent or any Auction Agent).
If any such claim is asserted, the Authority, any individual indemnified herein, the Trustee, the Registrar and Paying Agent, any Remarketing Agent or any Auction Agent, as the case may be, shall give prompt notice to the Company and permit the
Company to participate in the defense thereof at its own expense. The Company will reimburse the indemnified parties for any legal or other expenses reasonably incurred by the indemnified parties in investigating or defending against any such claim,
provided that the Company shall not be required to reimburse any of the indemnified parties for fees and expenses of counsel other than one counsel selected by the Trustee in its sole discretion for all indemnified parties in which proceedings are
brought or threatened to be brought unless and to the extent there are actual or potential conflicts of interest between or among indemnified parties or defenses available to some indemnified parties that are not available to other indemnified
parties in which case, the Company will reimburse the indemnified parties for any legal or other expenses reasonably incurred by the indemnified parties in investigating or defending against any such claim by each counsel of each of the indemnified
parties affected. The obligation of the parties hereto under this Section shall survive the termination of this Participation Agreement and the Indenture. 
  
 Section 5.10. Provision of Information. The Company shall provide the Trustee with the forms of any notices required to be sent to holders of Bonds
in connection with any redemption of Bonds, a change in an Auction Period, the Interest Period or Change in the Interest Rate Mode pursuant to Articles III, IV and V of the Indenture or the establishment of a Fixed Rate on the Bonds pursuant to
Section 4.02 of the Indenture. 
  
 Section 5.11. Ratings.
During any Auction Rate Period, the Company shall take all reasonable action necessary to enable at least two nationally recognized, statistical rating organizations (as that term is used in the rules and regulations of the Commission under the
Exchange Act) to provide ratings for the Auction Rate Bonds. 
  

 17 

 Section 5.12. Notices. During any Auction Rate Period, the Company on behalf of the Authority
shall provide the Trustee and, so long as no Event of Default has occurred and is continuing and the ownership of any Auction Rate Bonds is maintained in book-entry form by the Securities Depository, the Auction Agent, with notice of any change in
(a) the Statutory Corporate Tax Rate under the Indenture, (b) the Applicable Percentage, or (c) the maximum rate permitted by law on the Bonds. There is currently no such maximum rate. 
  
 Section 5.13. Maintenance of Office or Agency. So long as the Note remains outstanding and unpaid, the Company will
at all times keep, in New York, New York, or another location in the State of New York, an office or agency where notices and demands with respect to the Note may be served, and will, from time to time, give written notice to the Trustee of the
location of such office or agency; and, in case the Company shall fail so to do, notices may be served and demands may be made at the principal office of the Trustee. 
  
 Section 5.14. Maintenance of Properties. So long as the Note remains outstanding and unpaid, the Company will at all
times make or cause to be made such expenditures for repairs, maintenance and renewals, or otherwise, as shall be necessary to maintain its properties in good repair, working order and condition as an operating system or systems to the extent
necessary to meet the Company’s obligations under the Public Service Law of the State of New York and the Participation Agreement. 
  
 Section 5.15. Insurance. So long as the Note remains outstanding and unpaid, the Company will keep or cause to be kept its properties that are of
an insurable nature, insured against loss or damage by fire or other risks, the risk of which in the opinion of an Authorized Company Representative (who shall be an officer or employee of the Company responsible for the management of such risks) is
customarily insured against by companies similarly situated and operating like properties, to the extent that property of similar character is, in such Authorized Company Representative’s opinion, customarily insured against by such companies,
either (a) by reputable insurers or (b) in whole or in part in the form of reserves or of one or more insurance funds created by the Company, whether alone or with other Corporations. 
  
 Section 5.16. Proper Books of Record and Account. So long as the Note remains outstanding and unpaid, the Company
will at all times keep or cause to be kept proper books of record and account, in which full, true and correct entry will be made of all dealings, business and affairs of the Company, including proper and complete entries to capital or property
accounts covering property worn out, obsolete, abandoned or sold, all in accordance with the requirements of any system of accounting or keeping accounts or the rules, regulations or orders prescribed by a regulatory commission with jurisdiction
over the rates of the Company giving rise to at least fifty-one percent (51%) of the Company’s gross revenues, or if there are no such requirements or rules, regulations or orders, then in compliance with generally accepted accounting
principles. 
  
 Section 5.17. Compliance with Laws. So long
as the Note remains outstanding and unpaid, the Company agrees to use its best efforts to comply in all material respects with all 
  

 18 

 applicable laws, rules and regulations and orders of any governmental authority, non-compliance with which would have a
material adverse effect on its business, financial condition or results of operations (to the extent the Company deems it can reasonably comply while maintaining its public utility operations) or would materially adversely affect the Company’s
ability to perform its obligations hereunder or under the Participation Agreement, except laws, rules, regulations or orders being contested in good faith or laws, rules, regulations or orders which the Company has applied for variances from, or
exceptions to. 
  
 Section 5.18. Consolidation, Merger or Sale
of Assets. So long as the Note remains outstanding and unpaid, the Company will not consolidate with or permit itself to be merged into any other corporation or corporations, or sell, lease, transfer or otherwise dispose of all or substantially
all of its properties and assets, except in the manner and upon the terms and conditions set forth in this Section 5.18. 
  
 Nothing contained herein or in the Note shall prevent (and the Note shall be construed as permitting and authorizing, without acceleration of the maturity
of the Note) any lawful consolidation or merger of the Company with or into any other corporation or corporations lawfully authorized to acquire and operate the properties of the Company, or a series of consolidations or mergers, or successive
consolidations or mergers, in which the Company or its successor or successors shall be a party, or any sale of all or substantially all the properties of the Company as an entirety to a corporation lawfully authorized to acquire and operate the
same; provided that, upon any consolidation, merger or sale, the corporation formed by such consolidation, or into which such merger may be made if other than the Company, or making such purchase shall execute and deliver to the Trustee an
instrument, in form reasonably satisfactory to the Trustee, whereby such corporation shall effectually assume the due and punctual payment of the principal of and premium, if any, and interest on the Note according to its tenor and the due and
punctual performance and observance of all covenants and agreements to be performed by the Company pursuant to the Note and the Participation Agreement on the part of the Company to be performed and observed; and, thereupon, such corporation shall
succeed to and be substituted for the Company hereunder, with the same effect as if such successor corporation had been named herein as obligor. 
  
 Every such successor corporation shall possess, and may exercise, from time to time, each and every right and power hereunder of the Company, in its name
or otherwise; and any act, proceeding, resolution or certificate by any of the terms of the Note required or provided to be done, taken and performed or made, executed or verified by any board or officer of the Company shall and may be done, taken
and performed or made, executed and verified with like force and effect by the corresponding board or officer of any such successor Company. 
  
 If consolidation, merger or sale or other transfer is made as permitted by this Section, the provisions of this Section shall continue in full force and
effect and no further consolidation, merger or sale or other transfer shall be made except in compliance with the provisions of this Section. 
  
 Section 5.19. Financial Statements of Company. The Company agrees to have an annual audit made by independent accountants and to furnish the
Trustee with a balance sheet and statements of income, retained earnings and cash flow showing the financial condition of the 
  

 19 

 Company and its consolidated subsidiaries, if any, at the close of each fiscal year, and the results of operations of the
Company and its consolidated subsidiaries, if any, for each fiscal year, as audited by said accountants, on or before the last day of the third month following the close of the fiscal year or as soon thereafter as they are reasonably available. The
Company further agrees to furnish to the Trustee, the Authority and to any owner of Bonds if requested in writing by such owner all financial statements which it sends to its shareholders. The delivery of such financial statements to the Trustee is
for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein, including the Company’s compliance with any of its covenants hereunder. 
  
 Section 5.20. Information to Support Facility Issuer. (a) To the
extent that the Company has entered into a continuing disclosure agreement with respect to the Bonds, any Support Facility Issuer shall be included as party to be notified. 
  
 (b) The Company shall immediately notify any Support Facility Issuer if at any time there are insufficient moneys to make
any payments of principal and/or interest as required and immediately upon the occurrence of any Event of Default hereunder. 
  

 20 

 ARTICLE VI 
  
 REDEMPTION OF BONDS 
  
 Section 6.01. Redemption of Bonds. If the Company is not in default in making Note Payments, the Authority and the Trustee, at the request of the
Company, at any time the aggregate monies in the Bond Fund are sufficient to effect a redemption of Bonds and if the same are then redeemable under the provisions of the Indenture and the Bonds, shall forthwith take all steps that may be necessary
under the applicable redemption provisions of Article V of the Indenture to effect redemption of all or part of the then Outstanding Bonds as may be specified by the Company on such redemption date. 
  

 21 

 ARTICLE VII 
  
 EVENTS OF DEFAULT AND REMEDIES 
  
 Section 7.01. Events of Default Defined. The following shall be an “Event of Default” under this Participation Agreement and the term
“Event of Default” shall mean, whenever it is used in this Participation Agreement, any one or more of the following events: 
  
 (a) Failure by the Company to pay or cause to be paid, when due and payable, any installment of Note Payments and, in the case of failure
to pay any installment of interest on the Note, continuance of such failure for one (1) Business Day. 
  
 (b) Failure by the Company to observe and perform any covenant, condition or agreement in this Participation Agreement or the Note on its
part to be observed or performed, other than as referred to in subsection (a) of this Section 7.01 (and other than failure to pay the amounts due under Sections 4.02(f), 4.13 and 5.09 of this Participation Agreement), for a period of ninety (90)
days after written notice, specifying such failure and requesting that it be remedied, has been given to the Company unless the Trustee (with any required consent of Bondholders under the provisions of the Indenture) shall agree in writing to an
extension of such time prior to its expiration, provided that if any such failure shall be such that it cannot be cured or corrected within such ninety-day period, it shall not constitute an Event of Default hereunder if curative or corrective
action is instituted within such period and diligently pursued until the failure of performance is cured or corrected. 
  
 (c) The dissolution or liquidation of the Company or the filing by the Company of a voluntary petition in bankruptcy, or failure by the
Company promptly to discharge or cause to be discharged any execution, garnishment or attachment of such consequence as will impair its ability to carry on its operations generally or the commission by the Company of any act of bankruptcy, or
adjudication of the Company as a bankrupt, or assignment by the Company for the benefit of its creditors, or the entry by the Company into an agreement of composition with its creditors, or the approval by a court of competent jurisdiction of a
petition applicable to the Company in any proceeding for its reorganization instituted under the provisions of the federal bankruptcy laws or the Company becomes insolvent or is unable to pay its debts as they become due. The term “dissolution
or liquidation of the Company”, as used in this subsection, shall not be construed to include the cessation of the corporate existence of the Company resulting either from a merger or consolidation of the Company into or with another
corporation or a dissolution or liquidation of the Company following a transfer of all or substantially all of its assets as an entirety, under the conditions permitting such action with respect to the Company contained in Section 5.18 hereof.

  
 (d) The occurrence of an Event of Default as
defined in Section 12.01 of the Indenture. 
  
 Subsection (b) of
this Section 7.01 is subject to the following limitations: Except for the obligations of the Company contained in Article IV hereof, if by reason of force majeure 
  

 22 

 the Company is unable in whole or in part to carry out the agreements on its part herein contained, the Company shall not
be deemed in default during the continuance of such inability. The term “force majeure” as used herein shall include the following: acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders of any kind
of the government of the United States or of the State of New York or any of their departments, agencies, or officials, or any civil or military authority; insurrections; riots; epidemics; landslides; lightning; earthquake; fire; typhoons; storms;
floods; washouts; droughts; arrests; civil disturbances; explosions; breakage or accident to machinery, transmission pipes or canals; partial or entire failure of utilities; or any other cause or event not reasonably within the control of the
Company. The Company agrees, however, to remedy with all reasonable dispatch the cause or causes preventing the Company from carrying out its agreements; provided, that the settlement of strikes, lockouts and other industrial disturbances shall be
entirely within the discretion of the Company, and the Company shall not be required to make settlement of strikes, lockouts and other industrial disturbances by acceding to the demands of the opposing party or parties when such course is in the
judgment of the Company unfavorable to the Company. 
  
 Section
7.02. Remedies on Default. In the event any of the Bonds shall at the time be Outstanding and unpaid and provision for the payment thereof shall not have been made in accordance with the provisions of the Indenture, whenever any Event of
Default referred to in Section 7.01 hereof shall have happened and be subsisting, the Authority, with respect to those rights not assigned to the Trustee, or the Trustee, following acceleration of the Bonds in accordance with provisions of Section
12.03 of the Indenture where so provided, may take any one or more of the following remedial steps: 
  
 (a) The Trustee as provided in the Indenture may, at its option, or shall, to the extent required by the Indenture, declare all payments
payable under clauses (a) - (e) of Section 4.02 hereof and the Note for the remainder of the term of this Participation Agreement to be immediately due and payable, whereupon the same shall become immediately due and payable. 
  
 (b) The Authority, with respect to those rights not assigned
to the Trustee, or the Trustee may take whatever action at law or in equity that may appear necessary or desirable to collect the amounts then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or
covenant of the Company under this Participation Agreement or the Note whether for specific performance of any covenant or agreement contained herein or therein or in aid of the execution of any power herein granted. 
  
 Any amounts collected pursuant to action taken under this Section 7.02 shall
be paid into the Bond Fund and applied in accordance with the provisions of the Indenture. 
  
 If any such declaration of acceleration of the Bonds shall have been annulled pursuant to the terms of the Indenture and if, at any time after such declaration, but before all the Bonds shall have matured by their
terms, all arrears of interest upon the Note, and interest on overdue installments of interest (to the extent enforceable under applicable law) at the rate or rates per annum specified for the Note and the principal of and premium, if any, on the
Note which shall have become due and payable otherwise than by acceleration, and all other sums 
  

 23 

 payable hereunder, except the principal of, and interest on, the Note which pursuant to such declaration shall have
become due and payable, shall have been paid by or on behalf of the Company or provision satisfactory to the Trustee shall have been made for such payment, then such acceleration of the Note shall ipso facto be deemed to be rescinded
and any such Event of Default and its consequences shall ipso facto be deemed to be annulled, but no such annulment shall extend to or affect any subsequent Event of Default or impair or exhaust any right or remedy consequent thereon.

  
 Section 7.03. No Remedy Exclusive. No remedy herein
conferred upon or reserved to the Authority or to the Trustee is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this
Participation Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver
thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority or the Trustee to exercise any remedy reserved to it in this Article, it shall not be necessary to
give any notice, other than such notice as may be herein expressly required. Such rights and remedies as are given the Authority hereunder shall also extend to the Trustee and, the Trustee and the Holders of the Bonds issued under the Indenture
shall be deemed third party beneficiaries of all covenants and agreements herein contained. 
  
 In case the Trustee (as assignee of the Authority under the Indenture) or the Authority shall have proceeded to enforce its rights under this Participation Agreement and such proceedings shall have been discontinued
or abandoned for any reason or shall have been determined adversely to the Trustee or the Authority, then and in every such case, the Company, the Authority and the Trustee shall be restored respectively to their several positions and rights
hereunder, and all rights, remedies and powers of the Company, the Authority and the Trustee shall continue as though no such proceeding had been taken. 
  
 The Company covenants that, in case an Event of Default shall occur with respect to any Note Payments payable under Sections 4.02(a) - (e) hereof and the
Note, then, upon demand of the Trustee (as assignee of the Authority under the Indenture) the Company will pay to the Trustee the whole amount that then shall have become due and payable under said Sections, with interest (to the extent permitted by
law) on said amount at the rate of interest then borne by the Bonds pursuant to the Indenture, but not exceeding the maximum rate permitted by law, until paid, and in addition thereto, such further amounts as shall be sufficient to cover the costs
and expenses of collection, including reasonable compensation to the Trustee, its agents, attorneys, and counsel, and any other expenses or liabilities incurred by the Trustee other than those incurred through bad faith or negligence. 
  
 In case the Company shall fail forthwith to pay such amounts upon such
demand, the Authority, with respect to those rights not assigned to the Trustee, or the Trustee (as assignee of the Authority under the Indenture) shall be entitled and empowered to institute any action or proceeding at law or in equity for the
collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company and collect, in the manner provided by law out of the
property of the Company, the monies adjudged or decreed to be payable. 
  

 24 

 In case there shall be pending proceedings for the bankruptcy or for the reorganization of the Company
under the Federal bankruptcy laws or any other applicable law, or in case a receiver or trustee shall have been appointed for the property of the Company or in the case of any other similar judicial proceedings relative to the Company or to the
creditors or property of the Company, the Trustee shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and provide a claim or claims for the whole amount owing and unpaid pursuant to this Participation Agreement
and, in case of any judicial proceedings, to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Holders and the Trustee allowed in such judicial proceedings relative to the
Company, its creditors, or its property, and to collect and receive any monies or other property payable or deliverable on any such claims, and to distribute the same after the deduction of its charges and expenses; and any receiver, assignee or
trustee in bankruptcy or reorganization is hereby authorized to make such payments to the Trustee, and to pay to the Trustee any amount due it for compensation and expenses, including reasonable counsel fees and expenses incurred by it up to the
date of such distribution. 
  
 Nothing herein contained shall be
construed to prevent the Authority from enforcing directly any of its rights under Sections 4.02(f), 4.13 and 5.09 hereof; provided that, in case the Company shall have failed to pay amounts required to be paid under Sections 4.02(f), 4.13 and 5.09
hereof which event shall have continued for a period of thirty (30) days after the date on which written notice of such failure, requiring the Company to remedy the same, shall have been given to the Company by the Authority or the Trustee, the
Authority or the Trustee may take whatever action at law or in equity as may appear necessary or desirable to enforce performance or observance of any obligations or agreements of the Company under Sections 4.02(f), 4.13 and 5.09 hereof. 

 
 Section 7.04. No Additional Waiver Implied by One Waiver. In the
event any agreement contained herein or in the Note should be breached by any party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach
hereunder. 
  

 25 

 ARTICLE VIII 
  
 MISCELLANEOUS 
  
 Section 8.01. Disposition of Amounts after Payment of Bonds. Any amounts remaining in the funds created under the Indenture after payment in full
of principal of and premium, if any, and interest on all the Bonds, or provision for payment thereof having been made in accordance with the provisions of the Indenture, and payment of all the fees, charges and expenses of the Authority, the
Trustee, any Auction Agent, any Remarketing Agent, and the Registrar and Paying Agent and any other paying agent in accordance with the Indenture and this Participation Agreement, shall belong to and be promptly paid to the Company by the Trustee in
accordance with the provisions of the Indenture. 
  
 Section 8.02.
Notices. All notices, certificates, requests or other communications between the Authority, the Company and the Trustee required to be given under this Participation Agreement or under the Indenture shall be sufficiently given and shall be
deemed given when delivered by hand or first class mail, postage prepaid, addressed as follows: if to the Authority, at 17 Columbia Circle, Albany, New York 12203-6399, Attention: President; if to the Company, at 4 Irving Place, New York, New York
10003, Attention: Secretary; and if to the Trustee or the Registrar and Paying Agent, at The Bank of New York, 101 Barclay Street - 21W, New York, New York 10286, Attention: New York Municipal Finance Unit. A duplicate copy of each notice,
certificate, request or other communication given hereunder to the Authority, the Company or the Trustee shall also be given to the others. The Company, the Authority and the Trustee may, by notice given hereunder, designate any further or different
addresses to which subsequent notices, certificates, requests or other communications shall be sent. 
  
 Section 8.03. Successors and Assigns. This Participation Agreement shall inure to the benefit of and shall be binding upon the Authority, the
Company, the Trustee and their respective successors and assigns. 
  
 Section 8.04. Amendment of Participation Agreement. This Participation Agreement may not be amended except by an instrument in writing signed by the parties and upon compliance with the provisions of Sections 14.06 and 14.07 of the
Indenture. 
  
 Section 8.05. Participation Agreement Supersedes
Any Prior Agreements. This Participation Agreement and the Bond Purchase Agreement supersede any other prior agreements or understandings, written or oral, between the parties with respect to the transactions contemplated hereby and thereby.

  
 Section 8.06. Further Assurances and Corrective
Instruments. The Authority and the Company agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be
required for correcting any inadequate or incorrect description of the Project or for carrying out the expressed intention of this Participation Agreement in accordance with the provisions of the Indenture. 
  

 26 

 Section 8.07. Counterparts. This Participation Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original; but such counterparts shall together constitute but one and the same Participation Agreement. 
  
 Section 8.08. Severability. If any clause, provision or section of this Participation Agreement is held illegal,
invalid or unenforceable by any court or administrative body, this Participation Agreement shall be construed and enforced as if such illegal or invalid or unenforceable clause, provision or section had not been contained in this Participation
Agreement. In case any agreement or obligation in this Participation Agreement be held to be in violation of law, then such agreement or obligation shall be deemed to be the agreement or obligation of the Authority or the Company, as the case may
be, to the full extent permitted by law. 
  
 Section 8.09.
Delegation of Duties by Authority. It is agreed that under the terms of this Participation Agreement and also under the terms of the Indenture the Authority has delegated certain of its duties hereunder to the Company. The fact of such
delegation shall be deemed a sufficient compliance by the Authority to satisfy the duties so delegated and the Authority shall not be liable in any way by reason of acts done or omitted by the Company or any Authorized Company Representative. The
Authority shall have the right at all times to act in reliance upon the authorization, representation or certification of an Authorized Company Representative unless such reliance is in bad faith. 
  
 Section 8.10. Survival of Representations, Warranties and Covenants.
The respective agreements, representations, warranties and covenants set forth herein will remain in full force and will survive the execution and delivery of this Participation Agreement. 
  
 Section 8.11. NEW YORK LAW TO GOVERN. THE LAW OF THE STATE OF NEW YORK
SHALL GOVERN THE CONSTRUCTION OF THIS PARTICIPATION AGREEMENT. 
  
 [Signature Page of this Agreement Follows] 
  

 27 

 IN WITNESS WHEREOF, the parties hereto have caused this Participation Agreement to be duly executed as of
the day and year first written above. 
  

					
	 	 	 NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY

			
	(SEAL)	 	By:	 	  

	 	 	 	 	President
			
	Attest:	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
 Assistant Secretary
	 	 	 	 
		
	 	 	 CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.

			
	(SEAL)	 	By:	 	  

	 	 	 	 	 Executive Vice President and
 Chief Financial Officer

			
	Attest:	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
 Secretary
	 	 	 	 

  
 [Signature Page of
Participation Agreement] 
  

 28 

 EXHIBIT A 
  

(To Participation Agreement, 
 dated as of
November 1, 2004, 
 between New York State Energy Research and Development Authority 
 and Consolidated Edison Company of New York, Inc.) 
  
 DESCRIPTION OF PROJECT 
 EXEMPT FACILITIES 
  
 [A copy of Exhibit A to the Participation Agreement 
 entered into in connection with the Prior Bonds will be inserted at this place] 
  

 A-1 

  
 EXHIBIT A 

 
 (To Third Supplemental Participation Agreement, 
 dated as of December 1, 1994, 
 between New York
State Energy Research and Development Authority 
 and Consolidated Edison Company of New York, Inc.) 
  
 DESCRIPTION OF SERIES 1994 A PROJECT 
 EXEMPT FACILITIES 
  
 The following facilities are as further described in the Series 1994 A Tax Regulatory Agreement between the Authority and the Corporation dated the date
of the initial delivery of the Series 1994 A Bonds. All terms used in this Exhibit A and not otherwise defined are used as defined in the above-referenced Third Supplemental Participation Agreement. 
  
 The Series 1994 A Project Exempt Facilities will consist of the following
facilities which have been or are to be acquired, constructed and installed within the City of New York and the County of Westchester, New York by the Corporation as part of the Corporation’s gas distribution system: 
  

	 	1.	Gas Mains 

  

	 	2.	Gas Measuring and Regulating Station Equipment 

  

	 	3.	Gas Services 

  

	 	4.	Gas Meters 

  

	 	5.	Gas Meter Installations 

  

	 	6.	House Regulators 

  

	 	7.	House Regulator Installations 

  

	 	8.	Liquefied Natural Gas Storage Projects 

  

	 	9.	Gas Distribution Plant Structures and Improvements 

  
 The Series 1994 A Project Exempt Facilities shall also include (i) such instrumentation, controls, structures and all other facilities, equipment, devices
and the like necessary to support the facilities herein described, (ii) such necessary land improvements and (iii) such additional or substituted facilities for the furnishing of gas within the Corporation’s gas service area which because of
changes in technology, environmental standards, cost or the like, the Corporation determines shall be added to or substituted for said facilities. 
  
 Provided, however, that the Series 1994 A Project Exempt Facilities shall not include: (i) facilities placed in service more than 18 months
prior to the issuance of the Series 1994 A Bonds; and (ii) facilities for which the Cost of Construction was expended by the Corporation prior to December 13, 1991. 
  

 A-2 

 EXHIBIT B 
  

(To Participation Agreement 
 dated as of
November 1, 2004, 
 between New York State Energy Research and Development Authority 
 and Consolidated Edison Company of New York, Inc.) 
  
 DESCRIPTION OF OTHER PROJECT FACILITIES 
  
 [A copy of Exhibit B to the Participation Agreement 
 entered into in connection with the
Prior Bonds will be inserted at this place] 
  

 B-1 

  
 EXHIBIT B 

 
 (To Third Supplemental Participation Agreement 
 dated as of December 1, 1994, 
 between New York
State Energy Research and Development Authority 
 and Consolidated Edison Company of New York, Inc.) 
  
 DESCRIPTION OF OTHER SERIES 1994 A PROJECT FACILITIES 
  
 Any facilities which would be described in the preceding Exhibit A but
for the proviso thereto. 
  

 B-2 

 EXHIBIT C 
  

(To Participation Agreement dated as of November 1, 2004 between 
 New York State Energy Research and Development Authority and 
 Consolidated Edison Company of New York, Inc.,

 relating to Series 2004C Bonds) 
  
 CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. 
  
 $                     PROMISSORY NOTE

  
 FOR 
  
 FACILITIES REVENUE BONDS, SERIES 2004C 
 (CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. PROJECT) 
  
 New York, New York 
 November 12, 2004

  
 FOR VALUE RECEIVED, Consolidated Edison Company of New
York, Inc., a New York corporation (the “Company”), promises to pay to the order of The Bank of New York, as trustee (the “Trustee”) under the hereinafter referred to Indenture, in lawful money of the United States, moneys that
are in the aggregate sufficient for, together with other amounts held by the Trustee and available under the Indenture (as defined below) for application to, the payment of the principal sum of $99,000,000, together with interest thereon at such
rate or rates applicable to, and with such redemption premiums, if any, becoming due and payable on, the Facilities Revenue Bonds, Series 2004C (Consolidated Edison Company of New York, Inc. Project) (the “Bonds”), issued by New York State
Energy Research and Development Authority (the “Authority”) in the aggregate principal amount of $99,000,000 pursuant to a Trust Indenture (the “Indenture”) dated as of November 1, 2004, between the Authority and the Trustee, and
at such times as provided in the Indenture. This Note is being delivered pursuant to and in accordance with the Participation Agreement dated as of November 1, 2004, between the Company and the Authority (the “Participation Agreement”),
the terms and provisions of which are incorporated herein by reference and made a part hereof. All terms used and not otherwise defined herein are used as defined in the Indenture. 
  
 In the event the Company should fail to make any payment required by this Note, the Company’s obligation to make such
payment shall continue as an obligation of the Company until the amount in default shall have been fully paid, and the Company agrees to pay the same with interest thereon at the rate of interest borne by the Bonds, to the extent, but not exceeding
the maximum rate, permitted by law, until paid. 
  
 This Note,
unless paid earlier as permitted by the Participation Agreement, shall mature on November 1, 2039. 
  

 C-1 

 This Note is subject to optional and mandatory prepayment and to acceleration as provided in the
Participation Agreement. 
  
 All payments hereunder shall be
payable at the principal corporate trust office of the Trustee in New York, New York. 
  
 The obligation of the Company to make payments under this Note shall be an absolute, direct, general obligation, and shall be unconditional and shall not be abated, rebated, set off, reduced, abrogated, waived,
diminished or otherwise modified in any manner or to any extent whatsoever (other than for prior payment). 
  
 The Company hereby waives presentment for payment, demand, demand and protest and notice of protest, demand and dishonor and nonpayment of this Note.

  
 THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK. 
  

					
	 	 	 CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.

			
	 (SEAL)
	 	By:	 	  

	 	 	 	 	 Executive Vice President and
 Chief Financial Officer

			
	 ATTEST:
	 	 	 	 
			
	
	 	 	 	 
	Assistant Secretary	 	 	 	 

  

 C-2

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