NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
and
NIAGARA MOHAWK POWER CORPORATION
PARTICIPATION AGREEMENT
Dated as of May 1, 2004
- relating to -
Pollution Control Revenue Bonds
(Niagara Mohawk Power Corporation Project), 2004 Series A
________________________________________________________________________________________________________________________________________
This PARTICIPATION AGREEMENT, dated as of May 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 NIAGARA MOHAWK POWER CORPORATION, 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 "Corporation"),
WITNESSETH:
WHEREAS, pursuant to 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 Corporation to participate in
the incorporation of features in power plants and the construction of associated facilities to the extent required by the public
interest in development, health, recreation, safety, conservation of natural resources and aesthetics; and
WHEREAS, the Authority is also authorized under the Act to borrow moneys and issue its negotiable bonds to provide
sufficient moneys for achieving its corporate purposes, including the refunding of outstanding bonds and notes of the Authority; 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 Corporation is a public utility corporation doing business in the State of New York; and
WHEREAS, the Legislature of the State of New York has determined that, because interest costs incurred by public
utilities are reflected in the rates paid by the customers of such utilities and because a governmental action has mandated the
installation of pollution control facilities, it is in the public interest to enable utilities to obtain the lowest possible interest
rate on bonds sold to provide pollution control facilities; and
WHEREAS, the Corporation has requested that the Authority issue bonds for the purpose of refunding the Authority's
7.20% Pollution Control Refunding Revenue Bonds (Niagara Mohawk Power Corporation Project), 1994 Series A (the "Prior Bonds"), issued
pursuant to the Indenture of Trust dated as of October 1, 1992 (the "Prior Indenture"), between the Authority and The Bank of New
York, as trustee (in such capacity, a "Prior Trustee'), which were issued to refund bonds originally issued to finance the
acquisition, construction and installation of certain pollution control and other facilities (such facilities as further described in
Exhibit A hereto hereinafter referred to as the "Project"); and
WHEREAS, by Resolution No. 1050, adopted April 19, 2004, the Authority has determined to issue its Pollution Control
Revenue Bonds (Niagara Mohawk Power Corporation Project), in one series designated Pollution Control Revenue Bonds (Niagara Mohawk
Power
Corporation Project), 2004 Series A (the "Bonds") in an aggregate principal amount not to exceed $115,705,000, for the purpose of
refunding the outstanding principal amount of the Prior Bonds, to be issued under and secured by an Indenture of Trust dated as of
May 1, 2004 between the Authority and The Bank of New York, as Trustee (the "Indenture"); and
WHEREAS, the Corporation issued first mortgage bonds of the Seventy-ninth series (the "Prior First Mortgage Bonds")
pursuant to a supplement to the Corporation Indenture (the "Prior Supplemental Indenture") between the Corporation and Marine Midland
Bank, NA,, as trustee (the "Mortgage Trustee") to evidence its obligation to repay the Authority the proceeds of the Prior Bonds; and
WHEREAS, as set forth in this Participation Agreement, the Authority and the Corporation have agreed that the
Corporation shall take action necessary to ensure that concurrently at such time as the Bonds are issued and the Prior Bonds are
deemed paid within the meaning of Article XIV of the Prior Indenture (i) all Prior First Mortgage Bonds relating to such Prior Bonds
shall be delivered by the Prior Trustee to the Mortgage Trustee, (ii) all Prior First Mortgage Bonds relating to such Prior Bonds
shall be consolidated, amended and restated in the form set forth in Exhibit B hereto, (iii) the Prior Supplemental Indenture
relating to such Prior First Mortgage Bonds shall be consolidated, amended and restated in the form set forth in Exhibit B hereto,
(iv) the Trustee shall deliver the Prior First Mortgage Bonds to the Mortgage Trustee and (v) the Mortgage Trustee shall deliver the
First Mortgage Bonds to the Trustee; and
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:
ARTICLE I
DEFINITIONS; EFFECTIVE DATE AND DURATION OF
PARTICIPATION AGREEMENT
Section 1.01. Definitions. Each of the terms used in this Participation Agreement which is defined in Section 1.01
of the Indenture shall have the meaning herein which such term is given in said Section 1.01 of the Indenture.
Section 1.02. Effective Date of Participation Agreement; Duration of Participation Agreement. This Participation
Agreement shall become effective on the Effective Date, and shall continue in full force and effect until the principal of and
premium, if any, and interest on the Bonds have been fully paid (or provision for their payment has been made and all such Bonds are
deemed to be no longer outstanding in accordance with the provisions of the Indenture) and all sums to which the Authority and the
Trustee are entitled hereunder have been fully paid.
Notwithstanding the Effective Date, for convenience and purposes of reference this Participation Agreement shall be
dated as of May 1, 2004 and may be cited and referred to as the "Participation Agreement dated as of May 1, 2004."
ARTICLE II
REPRESENTATIONS
Section 2.01 Representations and Warranties by the Authority. The Authority represents 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 default under any of the provisions of the laws 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; and
(e) The Authority has duly authorized the execution and delivery of this Participation Agreement, the Tax Regulatory
Agreement, the Indenture and the Bond Purchase Trust Agreement and the execution and delivery of the other documents
incidental to this transaction.
Section 2.02. Representations and Warranties by the Corporation. The Corporation represents as follows:
(a) The Corporation is a corporation duly incorporated and in good standing under the laws of the State of New York,
is duly qualified and authorized to engage in business as a public utility in the State of New York, has power to enter into,
execute and deliver this Participation Agreement, the Tax Regulatory Agreement and the Supplemental Corporation Indenture,
and to issue and deliver the First Mortgage Bonds and by proper corporate action has duly authorized the execution and
delivery of this Participation Agreement, the Tax Regulatory Agreement and the Supplemental Corporation Indenture and the
issuance and delivery of the First Mortgage Bonds;
(b) The execution and delivery of this Participation Agreement, the Tax Regulatory Agreement and the Supplemental
Corporation Indenture and the issuance and delivery of the First Mortgage Bonds and the consummation of the transactions
herein contemplated will not conflict with or constitute a breach of or a default under the Corporation's Certificate of
Incorporation or By-Laws or any judgment, decree, order, statute, rule or regulation applicable to the Corporation or any
indenture, mortgage, loan agreement or other contract or instrument to which the Corporation is a party or by which it is
bound;
(c) The Participation Agreement, the Tax Regulatory Agreement and the Supplemental Corporation Indenture have been
duly executed and delivered by the Corporation and constitute valid and legally binding obligations of the Corporation,
enforceable against the Corporation 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 issuance and delivery of the First Mortgage Bonds by the Corporation and the execution and delivery of this
Participation Agreement and the Supplemental Corporation Indenture by the Corporation in the manner and for the purposes
herein set forth have been duly authorized by an order of the Public Service Commission of the State of New York; and
(e) All necessary authorizations for or approvals of the execution and delivery of this Participation Agreement, the
Tax Regulatory Agreement and the Supplemental Corporation Indenture and the issuance of the First Mortgage Bonds have been
obtained by the Corporation.
(f) In the event of any Reorganization, unless otherwise consented to by the Bond Insurer, the obligations of the
Company under, and in respect of, this Participation Agreement, the Loan Agreement, the First Mortgage Indenture and the
First Mortgage Bonds shall be assumed by, and shall become direct and primary obligations of, a Regulated Utility Company.
2. The representations and warranties of the Corporation set forth in the Tax Regulatory Agreement are hereby
incorporated by reference as though fully set forth herein.
ARTICLE III
THE PROJECT; ISSUANCE OF BONDS
Section 3.01. Construction and Completion of the Project. The Corporation hereby represents that it has caused the
Project to be completed and acknowledges that it shall not be entitled to any reimbursement for the cost of construction of the
Project from the Authority, the Trustee or the Holders of the Bonds, nor shall it be entitled to any diminution or postponement of
the payments required to be paid by the Corporation pursuant to this Participation Agreement or the First Mortgage Bonds.
Section 3.02. Sale of Bonds and Deposit of Proceeds; Additional Bonds; Liability under Bonds. In order to provide
funds for the refunding of the Prior Bonds, the Authority, on the date specified in the Bond Purchase Agreement, and concurrently
with the issuance and delivery to the Trustee 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 in the Escrow Fund.
Section 3.03. Sale of the Project. Pursuant to an Asset Purchase Agreement relating to Nine ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇
Nuclear Generating Facility ("NMP1"), dated as of December 11, 2000, by and among the Corporation, Constellation Energy Group, Inc.
and Constellation Nuclear, LLC (the "NMP1 Purchaser"), the Corporation has sold NMP1 of which certain portions of the Project are a
part to the NMP1 Purchaser.
Pursuant to an Asset Purchase Agreement relating to Nine ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇ Nuclear Generating Facility ("NMP2"),
dated as of December 11, 2000, by and among the Corporation, New York State Electric and Gas Corporation, Rochester Gas and Electric
Corporation, Central ▇▇▇▇▇▇ Gas and Electric Corporation, Constellation Energy Group, Inc. and Constellation Nuclear, LLC (the "NMP2
Purchaser"), the Corporation has sold its interest in NMP2 of which certain portions of the Project are a part to the NMP2 Purchaser.
In connection with the delivery of the Bonds, the Corporation has caused a certificate relating to the use of the
Project and the applicability of certain tax covenants contained in the asset purchase agreements to the Bonds to be delivered to the
Authority by Nine Mile Point Nuclear Station, LLC, as purchaser of the Project, in the form set forth in Exhibit C hereto.
Section 3.04. Investment of Moneys in Funds under the Indenture. Any moneys held as a part of any Fund created under
the Indenture shall, at the direction of an Authorized Corporation Representative, be invested or reinvested by the Trustee as
provided in Section 9.04 of the Indenture.
ARTICLE IV
FIRST MORTGAGE BONDS AND PAYMENTS
Section 4.01. Execution and Delivery of First Mortgage Bonds to Trustee. In order to evidence the obligation of the
Corporation to the Authority to repay the advance of the proceeds of the Bonds, the Authority hereby directs the Corporation, and the
Corporation hereby agrees, to deliver or cause to be delivered the First Mortgage Bonds to the Trustee on the Effective Date. The
First Mortgage Bonds shall be the amended and restated first mortgage bonds of the Corporation issued under the Corporation Indenture
and relating to the Bonds in substantially the form included in the Supplemental Corporation Indenture attached hereto as Exhibit B,
with only such changes, omissions and insertions thereto as shall have been approved by the Authority, and shall:
(a) be in an aggregate principal amount equal to the aggregate principal amount of the related Bonds then being
authenticated and delivered (the "related Bonds");
(b) provide for payments of interest equal to the payments of interest on the related Bonds;
(c) require payments of principal, or principal plus a premium, equal to the payments required to be made on
the related Bonds;
(d) contain redemption provisions, including premium, if any, or provisions with respect to amortization of
principal, together with premium, if any, identical to the redemption or amortization provisions of the related Bonds;
(e) require that all payments of principal, premium, if any, and interest on the First Mortgage Bonds be made to the
Trustee in such coin or currency of the United States of America as at the time of payment shall be legal tender for the
payment of public and private debts, and that each such payment be made on or before the due date for the corresponding
payment on the related Bonds; and
(f) provide that the amount of any such payment shall be reduced by the amount, if any, available under the
Indenture on the due date for such payment and applied to the corresponding payment on the related Bonds.
Section 4.02. Prepayment to Redeem Bonds. Whenever any Bonds are redeemable in whole or in part (other than pursuant
to Section 8.05 of the Indenture), the Authority will redeem the same at the written direction of an Authorized Corporation
Representative, and the Corporation will pay, as a prepayment of the amount due on the First Mortgage Bonds corresponding to such
Bonds, an amount equal to the total cost of such redemption, less the amount, if any, in the Bond Fund on the date fixed for such
redemption and available for such redemption payment.
Section 4.03. Obligation for Payment Absolute; Deficiencies. The Corporation agrees that its obligation to make the
First Mortgage Bond Payments at the times and in the amounts provided in the First Mortgage Bonds and to make all other payments
provided for in this Participation Agreement shall be absolute, irrevocable and unconditional and shall not be subject to any defense
(other than payment) or any rights of setoff, recoupment, abatement, counterclaim or deduction and without any rights of suspension,
deferment, diminution or reduction it might otherwise have against the Authority or Trustee or the owner of any Bond. The Corporation
will not suspend or discontinue any such payments or terminate this Participation Agreement for any cause including, without limiting
the generality of the foregoing, the unenforceability (because of judicial decision or otherwise) or the impossibility of performance
of the First Mortgage Bond obligations, or any breach by the Authority of any obligation to the Corporation, whether under this
Participation Agreement or any indebtedness or liability at any time owing to the Corporation by the Authority or the destruction by
fire or other casualty of any Project or any portion thereof, or the taking of title thereto or the use thereof by the exercise of
the power of eminent domain or condemnation or any change in the tax or other laws of the United States, the State or any political
subdivision of either thereof. Except to the extent provided in the first and second sentences in this Section 4.03, nothing
contained herein shall constitute a waiver or release by the Corporation of any right, claim or cause of action which the Corporation
may have against the Authority, the Trustee or others, including, but not, limited to, those 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 Corporation may pursue any such right, claim or cause of action only by a separate proceeding or action and not by counterclaim
or setoff and the bringing of such separate proceeding or action shall not affect the Corporation's absolute, irrevocable and
unconditional obligation to make payments pursuant to this Section 4.03. No provisions set forth herein shall constitute a waiver or
release by the Authority of any right, claim or cause of action which the Authority may have against the Corporation, the Trustee or
others, including, but not limited to, those rights, causes of action or claims which arise out of the breach of their respective
obligations or the inaccuracy of their respective warranties. Notwithstanding anything herein to the contrary, if for any reason
First Mortgage Bond Payments, together with other moneys held by the Trustee and then available for such purpose, would not be
sufficient to make the corresponding payments of principal of and premium, if any, and interest on the Bonds when such payments are
due, the Corporation will pay the amounts required from time to time to make up any such deficiency.
Section 4.04. Administration Fees, Expenses, etc. In order to defray a portion of the expenses incurred by the
Authority in conducting and administering its pollution control facility financing programs, the Corporation shall pay to the
Authority an initial Administration Fee in the amount of $289,262.50 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 May 1, 2005 and on May 1
of each year thereafter, based upon the amount of Bonds Outstanding as of such May 1 and for purposes of the calculation of such fee,
rounding up to the nearest whole million dollars. In addition to such Administration Fees, the Corporation will pay or reimburse the
Authority upon its request for 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 (including printing costs and the
reasonable fees, expenses and disbursements of its counsel and bond counsel) in connection with its administration and enforcement
of, and compliance with, this Participation Agreement, the First Mortgage Bonds, the Policy, the Auction Agency Agreement, the Bond
Purchase Trust Agreement, any Remarketing Agreement and the Indenture or any transaction, instrument or event contemplated by any
such document, which amounts the Corporation is obligated to pay, including, but not limited to, reasonable attorneys' fees. In
addition, the Corporation shall wire to the State of New York a bond issuance charge fee 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 to the initial purchasers thereof
Section 4.05. Compensation of Trustee and Registrar and Paving Agents. The Corporation agrees to pay to the Trustee
until the principal of, premium, if any, and interest on the Bonds shall have been fully paid: (i) an amount equal to the initial or
acceptance fee of the Trustee and the annual fee of the Trustee for its ordinary services rendered and its ordinary expenses incurred
as Trustee under the Indenture, as and when the same become due; (ii) reasonable fees and charges of the Trustee, as Bond Registrar
and Registrar and Paying Agent, and any other Registrar and Paying Agents for the Bonds for acting as Registrar and Paying Agent, as
provided in the Indenture, as and when the same become due; (iii) reasonable fees and disbursements of counsel to the Trustee, as and
when the same become due; and (iv) the reasonable fees and charges of the Trustee for the necessary extraordinary services rendered
by .it and extraordinary expenses incurred by it under the Indenture, as and when the same become due; provided, that the Corporation
may, without creating a default hereunder, contest in good faith the necessity for any such extraordinary services or extraordinary
expenses and the reasonableness of any such fees, charges or expenses. Such fees, charges and expenses shall be paid directly to the
Trustee for its own use or for disbursement to the Registrar and Paying Agents, as the case may be.
Section 4.06. Project Not Security for Bonds. It is expressly recognized by the parties that the Project will not
constitute any part of the security for the Bonds. The principal security for the Bonds shall be the First Mortgage Bonds and the
absolute, irrevocable and unconditional obligation of the Corporation to make the First Mortgage Bond Payments.
Section 4.07. Payment of Taxes and Assessments; No Liens or Charges. The Corporation will (a) pay, when the same
shall become due, 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 Sections 4.06 and 4.08 hereof) made or to be made pursuant to this
Participation Agreement or the First Mortgage Bonds, 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 made or to be made under this Participation Agreement, provided, that the
Corporation shall not be required to pay any such tax or assessment so long as (i) the Corporation 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 Corporation shall indemnify and hold the Authority and the Trustee harmless from any losses, costs, charges,
expenses (including attorneys' fees and expenses), judgments and liabilities arising in respect of such tax, assessment or charge and
the non-payment thereof.
Section 4.08. Indemnification of Authority and Trustee. Any obligation of the Authority created by or arising out of
this Participation Agreement shall be a limited obligation of the Authority, payable solely from the First Mortgage Bond Payments and
any other funds held by the Trustee under the Indenture and available for such payment, and shall not constitute an indebtedness of
or a charge against the general credit of the Authority and shall not constitute or give rise to any pecuniary liability of the
Authority; nevertheless, if the Authority shall incur any such pecuniary liability, then in such event the Corporation shall
indemnify and hold the Authority harmless by reason thereof The Corporation releases the Authority and the Trustee from, agrees that
the Authority and the Trustee shall not be liable for, and agrees to indemnify and hold the Authority and the Trustee harmless from,
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 any Project or the financing thereof The Corporation agrees to indemnify
and hold the Authority, its members, officers and employees harmless from any losses, costs, charges, expenses (including attorneys'
fees and disbursements), judgments and liabilities incurred by it or them, as the case may be, in connection with any action, suit or
proceeding instituted or threatened in connection with the transactions contemplated by this Participation Agreement so long as it or
they, as the case may be, have acted in good faith to carry out the transactions contemplated by this Participation Agreement. The
Corporation agrees to indemnify and hold the Trustee harmless from any losses, costs, charges, expenses (including attorneys' fees
and disbursements), judgments and liabilities incurred by it in connection with any action, suit or proceeding instituted or
threatened in connection with the transactions contemplated by this Participation Agreement, except for its own willful misconduct or
negligence in carrying out the transactions contemplated by this Participation Agreement.
Section 4.09. Corporation to Pay Attorneys' Fees and Disbursements. If the Corporation shall default under any of
the provisions of this Participation Agreement and the Authority or the Trustee shall employ attorneys or incur other expenses for
the collection of payments due under this Participation Agreement or for the enforcement of performance or observance of any
obligation or agreement on the part of the Corporation contained in this Participation Agreement, the Corporation will on demand
therefor reimburse the reasonable fees of such attorneys and such other reasonable disbursements so incurred.
Section 4.10. No Abatement of Administration Fees and Other Charges. It is understood and agreed that so long as any
Bonds are outstanding under the Indenture, Administration Fees and other charges payable to the Authority pursuant to this
Participation Agreement shall continue to be payable at the times and in the amounts herein specified, whether or not any 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.
Section 4.11. Prepayment of First Mortgage Bonds. The Corporation shall not prepay any First Mortgage Bonds or any
portion thereof except as necessary in connection with the redemption prior to maturity of all or a portion of the related Bonds, or
upon acceleration of maturity of the related Bonds or pursuant to Article XIV of the Indenture.
Section 4.12. Payment to Registrar and Paying Agent. The Corporation shall pay, or cause to be paid, to the
Registrar and Paying Agent for deposit in the Bond Purchase Fund and credit to the Corporation Account therein an amount sufficient
to provide for the payment of the Purchase Price of any Bond tendered for purchase pursuant to the Indenture and 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.
Section 4.13. Agreements of the Corporation Relating to Support Facilities. The Corporation agrees not to request
that the interest rate mode applicable to the Bonds be adjusted to an Adjustable Rate or a Fixed Rate unless on the effective date of
the applicable Change in the Interest Rate Mode the Bonds shall be rated at least "A" by S and P or "A" by ▇▇▇▇▇'▇ or an equivalent
rating by any nationally recognized rating agency. Such rating of the Bonds may, but is not required to, be achieved by obtaining a
Support Facility which meets the requirements of Article VI of the Indenture.
The Corporation 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 an Auction Period Rate, a Term Rate for a Calculation Period of greater than 13 months or a Fixed Rate.
Notwithstanding the foregoing, so long as the conditions set forth in Section 6.05 of the Indenture are met by the Bond Insurer and
with respect to the Policy, and unless otherwise agreed by the Bond Insurer, the Corporation shall 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 an Auction Period Rate, a Term Rate for a Calculation Period of
greater than 13 months or a Fixed Rate.
Section 4.14. Corporation Liable to Owners of Bonds in the Case of Certain Events of Taxability. The Corporation
confirms and agrees that if as result of action by the Corporation, the owner of the Project as of the date hereof, or any successor
owner of the Project, the interest on the Bonds is determined to be included for federal income tax purposes in the gross income of
any owner of a Bond (other than a "substantial user" of the Project or a "related person" within the meaning of section 147(a)(1) of
the Code), as evidenced by a published or private ruling of the Internal Revenue Service or a final, nonappealable judicial decision
by a court of competent jurisdiction, then the Corporation, in addition to its obligation to redeem the Bonds pursuant to Section
5.04 of the Indenture, shall be liable to the affected owners of the Bonds for any taxes, penalties and interest assessed against
such owners by the Internal Revenue Service and attributable to the Bonds.
The Authority and the Trustee agree not to object to the intervention in or participation by the Corporation at its
own expense in any proceedings by or before the Internal Revenue Service or any court relating to whether interest on the Bonds is
includable for federal income tax purposes in the gross income of any owner of a Bond (other than a "substantial user" of the Project
or a "related person" within the meaning of Section 147(a)(1) of the Code).
ARTICLE V
SPECIAL COVENANTS
Section 5.01. No Warranty as to Suitability of Project. The Authority makes no warranty, either express or implied,
as to the actual or designed capacity of any Project, as to the suitability of any Project for the purposes specified in this
Participation Agreement, as to the condition of any Project, or that any Project will be suitable for the Corporation's purposes or
needs.
Section 5.02. Authority's Rights to Inspect Project and Plans and Specifications. The Authority shall have the right
at all reasonable times to examine and inspect any and all records of the Corporation relating to the Project and, to the extent
reasonably available to the Corporation, the plans and specifications therefor.
Section 5.03. Corporation Consent to Amendment of Indenture. The Authority shall not adopt any indenture
supplemental to or amendatory of the Indenture which affects the rights or obligations of the Corporation without the prior consent
of the Corporation as evidenced by a certificate in writing signed by an Authorized Corporation Representative.
Section 5.04. Tax Covenant. Notwithstanding any other provision hereof, the Corporation covenants and agrees that it
will not take or authorize or permit any action to be taken with respect to the Project, or the proceeds of Bonds, including any
amounts treated as proceeds of Bonds for any purpose of Section 103 or any related provisions 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, the Authority and the Corporation will enter into the Tax Regulatory Agreement and the Corporation
hereby agrees to comply with the provisions thereof.
Section 5.05 Corporation Agrees to Perform Obligations Imposed by Indenture and Corporation Indenture.
(a) The Corporation agrees to perform such obligations as may be required of it by the provisions of the
Indenture.
(b) The Corporation agrees to perform such obligations relating to recording and filing and compliance with laws,
maintenance of properties, insurance, proper books of record and account, and consolidation, merger or sale of assets as may
be required of it by the covenants of Article Fifth, Sections 5, 8, 9, 12 and 16 of the Corporation Indenture, respectively.
Section 5.06. Certificates as to Defaults. The Corporation shall file with the Trustee, on or before the first day
of the month in which any series of Bonds are delivered and on the anniversary of such date as long as the Bonds are outstanding, a
certificate signed by an Authorized Corporation Representative stating that, to the best of his or her knowledge and belief, the
Corporation has kept, observed, performed and fulfilled each and every one of its covenants and obligations contained herein and
there does not exist at the date of such certificate any default hereunder or, if any such default shall so exist, specifying the
same and the nature and status thereof.
Section 5.07. Compliance with Laws. The Corporation shall
(a) do or cause to be done all things necessary on its part to preserve and keep in full force and effect its
corporate existence and rights and such corporate and public utility franchises, rights, licenses and permits as are
necessary for the conduct of its business; provided that the Corporation may terminate or abandon, or permit the termination
or abandonment of, any such right, franchise, license or permit if in the opinion of the Corporation's Board of Directors,
the termination or abandonment thereof is either necessary or in the best interests of the Corporation and, in any such
case, will not have a material adverse effect on the Corporation's ability to pay amounts with respect to the First Mortgage
Bonds in accordance with their terms or otherwise to comply with the terms of this Participation Agreement; and
(b) use its best efforts to comply in all material respects with all 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 Corporation deems it can reasonably comply while maintaining
its public utility operations) or would materially adversely affect the Corporation's ability to perform its obligations
hereunder or under the First Mortgage Bonds, except laws, rules, regulations or orders being contested in good faith.
Section 5.08. Maintenance of Office or Agency. So long as the First Mortgage Bonds remain outstanding and unpaid,
the Corporation shall 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 First Mortgage Bonds may be served, and shall, from time to time, give written notice
to the Trustee of the location of such office or agency; and, in case the Corporation shall fail so to do, notices may be served and
demands may be made at the principal office of the Trustee, in accordance with Article Fifth, Section 3 of the Corporation Indenture.
ARTICLE VI
DEFAULTS BY CORPORATION; REMEDIES
Section 6.01. Events of Default; Acceleration. In case one or more of the following events of default shall have
occurred and be continuing;
(a) failure by the Corporation to pay when due any amount required to be paid under this Participation Agreement or
the First Mortgage Bonds, which failure causes a default in the payment when due of the principal of, or premium, if any, or interest
on, any of the Bonds; or
(b) failure by the Corporation to pay when due any amount required to be paid under Section 4.11 of this
Participation Agreement, which failure causes an Event of Default to occur pursuant to paragraph (a) of Section 12.01 of the
Indenture; or
(c) failure on the part of the Corporation duly to observe or perform any other of the covenants or agreements on
the part of the Corporation contained in the Participation Agreement (other than failure to pay amounts required to be paid under
Sections 4.04, 4.05 and 4.08), the Tax Regulatory Agreement or in the First Mortgage Bonds for a period of ninety (90) days after the
date on which written notice of such failure, requiring the Corporation to remedy the same, shall have been given to the Corporation
by the Authority or the Trustee; or
(d) the occurrence of an Event of Bankruptcy of the Corporation or failure by the Corporation generally to pay its
debts under the Corporation Indenture; then, and in any such event, the Trustee (as assignee of the Authority) may, with the consent
of the Bond Insurer (provided that the Bond Insurer is not in default under the Policy), and/or the direction of the Bond Insurer
(provided that the Bond Insurer is not in default under the Policy), or, upon the written request or direction of the owners of not
less than twenty-five percent (25%) in aggregate principal amount of the Bonds then outstanding with the consent of the Bond Insurer
shall, proceed to protect and enforce all rights of the owners of Bonds and the Trustee and as permitted by the Indenture and the
laws of the State of New York, by such means or appropriate judicial proceedings as shall be suitable or deemed by it most effective,
including suits or special proceedings at law or in equity, or otherwise, for specific enforcement of any covenant or agreement
contained in the Participation Agreement, or to require the Corporation to perform its duty under the Participation Agreement. Any
amounts collected by the Trustee pursuant to action taken here shall be applied in accordance with the Indenture. In addition, if at
any time the principal of the Bonds shall have been declared to be due and payable by acceleration pursuant to the terms of the
Indenture, the First Mortgage Bonds shall thereupon become and be immediately due and payable, subject to such declaration with
respect to the Bonds being annulled pursuant to Section 12.03 of the Indenture.
The right or obligation of the Trustee to make any such declaration as aforesaid, however, is subject to the
condition that if, at any time after declaration, but before all the Bonds shall have matured by their terms, the principal of,
premium, if any, and interest on, the First Mortgage Bonds which shall have become due and payable otherwise than by such
declaration, and all other sums payable under this Participation Agreement, except the principal of, and interest on, the First
Mortgage Bonds which shall have become due and payable by such declaration, shall have been paid or provision satisfactory to the
Trustee shall have been made for such payment, and the reasonable expenses of the Trustee and of the owners of the Bonds shall have
been paid, including reasonable attorneys' fees paid or incurred, and all defaults hereunder and under the Bonds or under the
Indenture, except as to the payment of principal and interest due and payable solely by reason of such declaration, shall be made
good or be secured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall be made therefore, then
and in every such case, the Bond Insurer (unless the Bond Insurer is then in default under the Policy), or the owners of a majority
in aggregate principal amount of the Bonds then outstanding, with the consent of the Bond Insurer, by written notice to the Authority
and to the Trustee, may rescind such declaration and annul such default in its entirety, or, if the Trustee shall have acted in the
absence of a written request of the owners of at least twenty-five percent (25%) in aggregate principal amount of the outstanding
Bonds, and if there. shall not have been theretofore delivered to the Trustee written direction to the contrary by the owners of a
majority in aggregate principal amount of the outstanding Bonds, then any such declaration shall ipso facto be deemed to be rescinded
and any such default and its consequences shall ipso facto be deemed to be annulled, but no such rescission and annulment shall
extend to or affect any subsequent default or impair or exhaust any right or power consequent thereon.
In case the Trustee shall have proceeded to enforce any right under this Participation Agreement or the First
Mortgage Bonds and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely
to the Trustee, then and in every such case the Corporation, the Authority and the Trustee shall be restored respectively to their
former positions and rights hereunder, and all rights, remedies and powers of the Corporation, the Authority and the Trustee shall
continue as though no such proceedings had been taken.
Section 6.02. Events of Default Relating to Fees or Indemnification. In case the Corporation shall have failed to
pay amounts required to be paid under Sections 4.06, 4.08 and 4.111, which event shall have continued for a period of ninety (90)
days after the date on which written notice of such failure, requiring the Corporation to remedy the same, shall have been given to
the Corporation 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 Corporation under said
Sections 4.06, 4.08 and 4.11.
Section 6.03. Judicial Proceedings by Trustee. Upon the occurrence and continuance of an event of default under this
Article, the Trustee may, and upon the written request of the owners of at least twenty-five percent (25%) in aggregate principal
amount of the Bonds then outstanding shall, institute any actions or proceedings at law or in equity for the collection of any
amounts then due and unpaid on the First Mortgage Bonds, and may prosecute any such action or proceeding to judgment or final decree,
and may collect in the manner provided by law the moneys adjudged or decreed to be payable.
Section 6.04. Rights of the Credit Facility Issuer; Other Rights of the Trustee to Enforce this Participation
Agreement. Notwithstanding anything herein to the contrary, any judicial proceedings of the Trustee under Section 6.03 may be
instituted only with the written consent of the Credit Facility Issuer and shall be instituted by the Trustee at the written
direction of the Credit Facility Issuer.
Nothing in this Participation Agreement shall limit any other rights of the Trustee to enforce this Participation
Agreement.
ARTICLE VII
MISCELLANEOUS
Section 7.01. 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 Trustee
and Registrar and Paying Agents in accordance with this Participation Agreement, shall belong to and be paid to the Corporation by
the Trustee in accordance with the provisions of the Indenture.
Section 7.02. Notices. All notices, certificates, requests or other communications between the Authority, the
Corporation 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 ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: President; if to the Corporation, at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer, with a copy to Niagara Mohawk Power Corporation, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Assistant Treasurer; and if to the Trustee or the Registrar and Paying Agent, at The Bank of New
York, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Administration. A duplicate copy of each notice,
certificate, request or other communication given hereunder to the Authority, the Corporation or the Trustee shall also be given to
the others. The Corporation, 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 7.03. Successors and Assigns. This Participation Agreement shall inure to the benefit of and shall be
binding upon the Authority, the Corporation and their respective successors and assigns.
Section 7.04. Amendment of Participation Agreement. This Participation Agreement may not be amended except by an
instrument in writing signed by the parties hereto and, if such amendment occurs after the issuance of the Bonds, upon compliance
with the provisions of Article XV of the Indenture.
Section 7.05. Assignment by Authority. The Authority shall assign its rights under and interest in this
Participation Agreement (except the rights and interest of the Authority under Article III hereof and Sections 4.06, 4.11, 4.12, and
4.13 hereof) to the Trustee pursuant to the Indenture, as security for payment of the principal of and premium, if any, and interest
on the Bonds but such assignment shall be subject to the provisions of this Participation Agreement. In addition, the Trustee shall
have the same power as the Authority to enforce from time to time the rights of the Authority set forth in Article III hereof,
subject to the provisions of this Participation Agreement relating to the amendment hereof Except as provided in this Section 7.05,
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 7.06. Participation Agreement Supersedes Any Prior Agreements. This Participation Agreement supersedes any
other prior agreements or understandings, written or oral, between the parties with respect to the transactions contemplated hereby
except the Bond Purchase Agreement, dated May 25, 2004 by and among the Authority, the Corporation, and ▇.▇. ▇▇▇▇▇▇ Securities Inc.
Section 7.07. Counterparts. This Participation Agreement may be simultaneously executed in counterparts. Each such
counterpart so executed shall be deemed to be an original, and all together shall constitute but one and the same instrument.
Section 7.08. Severability. If any clause, provision or section of this Participation Agreement be held illegal,
invalid or unenforceable by any court or administrative body, such determination 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 contained 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 Corporation, as the case may be, to the full
extent permitted by law.
Section 7.09. Law and Place of Enforcement of this Participation Agreement. This Participation Agreement shall be
construed and interpreted in accordance with the laws of the State of New York and all suits and actions arising out of this
Participation Agreement shall be instituted in a court of competent jurisdiction in the State of New York.
Section 7.10. The Policy. The Corporation acknowledges that it will cause the Bond Insurer to deliver the Policy
insuring payment of the principal of and interest on the Bonds.
Section 7.11. Bond Insurer Indemnification. The Corporation shall defend, indemnify, and hold harmless the Bond
Insurer from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs, or expenses of whatever
kind or nature, including losses relating to a decline in value of the property securing the First Mortgage Bonds (the "Mortgaged
Property") or expenses of the mortgage trustee with respect thereto, known or unknown, contingent or otherwise, arising out of, or in
any way related to, any of the following occurring in connection with the Mortgaged Property: (A) the presence, disposal, release, or
threatened release of any Hazardous Materials which are on, from, or affecting the soil, water, vegetation, buildings, personal
property, persons, animals, or otherwise; (B) any personal injury (including wrongful death) or property damage (real or personal)
arising out of or related to such Hazardous Materials; and (C) any violation of laws, orders, regulations or requirements of
government authorities, or requirements of the mortgage trustee, which are based upon or in any way related to such Hazardous
Materials including, without limitation, reasonable attorney and consultant fees, investigation and laboratory fees, court costs, and
litigation expenses. For purposes of this paragraph, "Hazardous Materials" includes, without limit, any flammable explosives,
radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic substances, or related materials defined in the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et seq.), the
Hazardous Materials Transportation Act, as amended (42 U.S.C. Sections 1801 et seq.), the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Sections 9601 et seq.), and in the regulations adopted and publications promulgated pursuant thereto, or any other
Federal, state or local environmental law, ordinance, rule, or regulation.
Section 7.12. Bond Insurer Reporting Requirements, The Corporation shall provide to the Bond Insurer:
(i) annual audited financial statements of the Corporation within 120 days after the end of each fiscal year;
(ii) any final offering statement prepared in connection with the issuance of additional debt, whether or not it is on a parity
with the Bonds within 30 days of the sale of such Bonds; and
Section 7.13. Further Assurances and Corrective Instruments. The Authority and the Corporation 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.
Section 7.14. 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 Corporation. 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 Corporation or any Authorized Corporation Representative. The
Authority shall have the right at all times to act in reliance upon the authorization, representation or certification of an
Authorized Corporation Representative unless such reliance is in bad faith.
Section 7.15. 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.
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
By______________________________
President
(SEAL)
ATTEST:
_______________________________
Assistant Secretary
NIAGARA MOHAWK POWER CORPORATION
By______________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Treasurer
(SEAL)
ATTEST:
_______________________________
Secretary
_________________________________________________________________________________________________________________________________________
EXHITIB A
Description of the Project
The following facilities were originally financed with proceeds of the Authority's (i) 111/4% Pollution Control
Revenue Bonds (Niagara Mohawk Power Corporation Project), 1984 Series A ("1984 Series A Bonds") and (ii) 11?% Pollution Control
Revenue Bonds (Niagara Mohawk Power Corporation Project), Series 1984I ("Series 1984I Bonds"), in the respective aggregate original
principal amounts of $100,000,000 and $56,250,000. Such facilities are as further described in the Tax Regulatory Agreement (as
defined in the above-referenced Participation Agreement). The 1984 Series A Bonds and the Series 1984I Bonds were refunded by the
Authority's 7.20% Pollution Control Refunding Revenue Bonds (Niagara Mohawk Power Corporation Project), 1994 Series A ("1994 Series A
Bonds").
FACILITIES FINANCED WITH 1984 SERIES A BOND PROCEEDS
The following facilities are as further described in the Letter of Representation of the Corporation to the
Authority and ▇▇▇▇▇▇▇ Delafield and Wood LLP dated August 8, 1984 (the "Letter"):
1. A Radwaste Solidification and Storage System at Nine Mile Point Unit No. 1 ("Unit No. 1") and a building
associated therewith;
2. Certain Facilities at Nine Mile Point Unit No. 2 ("Unit No. 2"), to the extent of the Corporation's 41%
interest in those Facilities, including:
a. A Cooling Water System, consisting of a circulating water system, a cooling tower, a hypochorite generating
system, and an intake and discharge system;
b. An oil Separator System and a Water Treatment Resin Regeneration System, both of which treat
non-radiological liquid waste streams;
c. A Liquid Radwaste System, a portion of a building housing this system and certain support systems
associated with that building, and a Condensate Polisher Demineralizer Liquid Waste System, both of which treat possibly
radiological liquid streams;
d. An Offgas System; a Gaseous Waste System; a VAX Computer, which compiles information concerning gaseous
effluent steams, and a Shielding System which surrounds various plant equipment (including the main steam tunnel, the
turbine, and the reactor), all of which aid in reducing the level of radiological waste which may be found in the air;
e. A Condensate Polisher Resin Regeneration System; a Radioactive Solid Waste System and a portion of a
building associated therewith, both of which treat possibly radioactive solid wastes;
f. A Filter Backwash Line, which treats non-radioactive solid wastes; and
g. A Sanitary Drain System, which will transport sanitary wastes to the Sewage Treatment Facility; and
3. A Permanent Sewage Treatment Facility which will serve both ▇▇▇▇ ▇▇. ▇ ▇▇▇ ▇▇▇▇ ▇▇. ▇, to the extent of the
Corporation's full ownership interest in Unit No. I and its 41% interest in Unit No. 2 (costs are being charged ratably to the owners
of the Units on the basis of nominal output capacities of the units).
No part of Project A constitutes an interim on-site low-level waste storage facility. The term "interim on-site
low-level waste storage facility" means a storage facility designed to accommodate the storage of a greater volume of low-level
radioactive waste than one year's production capacity.
FACILITIES FINANCED WITH SERIES 1984I BOND PROCEEDS
The following facilities are as further described in the Letter of Representation of the Corporation to the
Authority and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ LLP dated October 30, 1984 (the "Letter"):
1. Certain Facilities at Nine Mile Point Unit No. 1 ("Unit No. 1"), including:
a. A Radwaste Solidification and Storage System and a building associated therewith; and
b. A High Density Spent Fuel Pool Modification;
2. Certain Facilities at Nine Mile Point Unit No. 2 ("Unit No. 2"), to the extent of the Corporation's 41%
interest in those Facilities, including:
a. A Cooling Water System, consisting of a circulating water system, a cooling tower, and an intake and
discharge system;
b. An Oil Separator System and a Water Treatment Resin Regeneration System, both of which treat
non-radiological liquid waste streams;
c. A Liquid Radwaste System, a portion of a building housing this system and certain support systems
associated with that building, and a Condensate Polisher Demineralizer Liquid Waste System, both of which treat possibly
radiological liquid streams;
d. An Offgas System; a Gaseous Waste System; a VAX Computer, which compiles information concerning gaseous
effluent steams, and a Shielding System which surrounds various plant equipment (including the main steam tunnel, the
turbine, and the reactor), all of which aid in reducing the level of radiological waste which may be found in the air;
e. A Condensate Polisher Resin Regeneration System; a Radioactive Solid Waste System and a portion of a
building associated therewith, both of which treat possibly radioactive solid wastes;
f. A Filter Backwash Line, which treats non-radioactive solid wastes;
g. A Sanitary Drain System, which will transport sanitary wastes to the Sewage Treatment Facility; and
h. A Spent Fuel Handling System, which treats and stores spent fuel.
3. A Permanent Sewage Treatment Facility which will serve both ▇▇▇▇ ▇▇. ▇ ▇▇▇ ▇▇▇▇ ▇▇. ▇, to the extent of the
Corporation's full ownership interest in Unit No. I and its 41% interest in Unit No. 2 (costs are being charged ratably to the owners
of the Units on the basis of nominal output capacities of the units).
No part of the Project constitutes an interim on-site low-level waste storage facility. The term "interim onsite low-level waste
storage facility" means a storage facility designed to accommodate the storage of a greater volume of low-level radioactive waste
than one year's production capacity.
_________________________________________________________________________________________________________________________________________
EXHIBIT B
Corporation Supplemental Indenture
[See Item Number [_] of this Record of Proceedings]
_________________________________________________________________________________________________________________________________________
EXHIBIT C
Certificate of Nine Mile Point Nuclear Station, LLC
[See Item Number [___] of this Record of Proceedings]