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{{Adams
#REDIRECT [[RA-15-0009, Supplement to Application for Order Approving Transfer of Control of License and for Conforming License Amendment Pursuant to 10 CFR 50.80 and 10 CFR 50.90]]
| number = ML15075A102
| issue date = 03/04/2015
| title = Brunswick, Units 1 & 2, Shearon Harris, Units 1 & 2, Supplement to Application for Order Approving Transfer of Control of License and for Conforming License Amendment Pursuant to 10 CFR 50.80 and 10 CFR 50.90
| author name = Repko R T
| author affiliation = Duke Energy Carolinas, LLC, Progress Energy Carolinas, Inc
| addressee name =
| addressee affiliation = NRC/Document Control Desk, NRC/NRR
| docket = 05000324, 05000325, 05000400
| license number = DPR-062, DPR-071, NPF-063
| contact person =
| case reference number = RA-15-0009
| document type = Letter, License-Application for Facility Operating License (Amend/Renewal) DKT 50
| page count = 117
}}
 
=Text=
{{#Wiki_filter:(DUKEENERGY.Regis T. Repko526 South Church StreetCharlotte, NC 28202Mailing Address:Mail Code EC07H / P.O. Box 1006Charlotte, NC 28201-1006 704-382-4126 10 CFR 50.8010 CFR 50.90Serial: RA-1 5-0009March 4, 2015U.S. Nuclear Regulatory Commission ATTN: Document Control DeskWashington, DC 20555-0001 BRUNSWICK STEAM ELECTRIC PLANT, UNIT NOS. 1 AND 2DOCKET NOS. 50-325 AND 50-324 / RENEWED LICENSE NOS. DPR-71 AND DPR-62SHEARON HARRIS NUCLEAR POWER PLANT, UNIT NO. 1DOCKET NO. 50-400 / RENEWED LICENSE NO. NPF-63
 
==SUBJECT:==
Supplement to Application for Order Approving Transfer of Control ofLicense and for Conforming License Amendment Pursuant to 10 CFR 50.80and 10 CFR 50.90
 
==REFERENCES:==
: 1. Duke Energy letter, Application for Order Approving Transfer of Control of License andfor Conforming License Amendment Pursuant to 10 CFR 50.80 and 10 CFR 50.90,dated December 22, 2014 (ADAMS Accession No. ML14358A253)
Ladies and Gentlemen:
On December 22, 2014, Duke Energy submitted to the Nuclear Regulatory Commission (NRC),an Application for Order Approving Transfer of Control of License and for Conforming LicenseAmendment Pursuant to 10 CFR 50.80 and 10 CFR 50.90 (Reference 1). Subsequent tosubmittal of Reference 1, the NRC staff brought to our attention that there was an error onEnclosure 1, Attachment 2, page 1 and that Enclosure 2 was missing.The Enclosures included with this submittal correct these errors. Enclosure 1 provides thecorrected page and Enclosure 2 provides the enclosure that was missing from Reference 1.Please note that Enclosure 2 is a publically available document and is not confidential.
This submittal does not affect the conclusion of Reference 1 that the proposed changes involveno significant hazards consideration.
This correspondence contains no new regulatory commitments.
(24 U.S. Nuclear Regulatory Commission RA-15-0009 Page 2Should you have any questions concerning this letter, or require additional information, pleasecontact Art Zaremba, Manager -Nuclear Fleet Licensing, at 980-373-2062.
I declare under penalty of perjury that the foregoing is true and correct.
Executed on March 4,2015.Sincerely, Regis T. RepkoSenior Vice President
-Governance, Projects and Engineering JLV/NDE U.S. Nuclear Regulatory Commission RA-1 5-0009Page 3cc: USNRC Region IIUSNRC Resident Inspector
-SHNPPUSNRC Resident Inspector
-BSEPAndrew L. Hon, NRR Project Manager -BSEPMartha C. Barillas, NRR Project Manager -SHNPPW. L. Cox, Ill, Chief, North Carolina Department of Health and Human Services, RPSection (NC)S. E. Jenkins,
: Manager, Radioactive and Infectious Waste Management (SC)Chairman, North Carolina Utilities Commission Enclosure 1 toRA-1 5-0009Enclosure 1 to RA-1 5-0009Attached is the corrected page of Enclosure 1, Attachment 2, page 1 to theDecember 22, 2014, Duke Energy letter RA-14-0029 Enclosure 1Attachment 2 toRA-1 4-0029Page 1 of 4Shearon Harris Nuclear Power Plant, Unit No. 1,Docket No. 50-400 / Renewed License No. NPF-63DUKE ENERGY PROGRESS, INC.NORTH CARO.INA rEAS... ..RN MUNICIPAL P.. .R.A.ENC.
DOCKET NO. 50-400SHEARON HARRIS NUCLEAR POWER PLANT. UNIT 1RENEWED FACILITY OPERATING LICENSERenewed License No. NPF-631 .The Nuclear Regulatory Commission (the Commission or the NRC) has found that:A. The application for renewal of the license filed by the Carolina Power & LightCompany' (CP&L) for itself, and thc North ,-ralinz Saste^. Mnisipal PovmA* n.e; Pe.. lb....),
complies with the standards and requirements of theAtomic Energy Act of 1954, as amended (the Act), and the Commission's regulations set forth in 10 CFR Chapter I, and all required notifications to otheragencies or bodies have been duly made;B. Construction of the Shearon Harris Nuclear Power Plant, Unit 1, (the facility) hasbeen substantially completed in conformity with Construction Permit No.CPPR-158 and the application, as amended, the provisions of the Act, and theregulations of the Commission; C. Actions have been identified and have been or will be taken with respect to (1)managing the effects of aging during the period of extended operation on thefunctionality of structures and components that have been identified to requirereview under 10 CFR 54.21 (a)(1); and (2) time-limited aging analysis that havebeen identified to require review under 10 CFR 54.21(c),
such that there isreasonable assurance that the activities authorized by the renewed operating license will continue to be conducted in accordance with the current licensing basis, as defined in 10 CFR 54.3, for the facility, and that any changes made tothe facility's current licensing basis in order to comply with 10 CFR 54.29(a) are inaccordance with the Act and the Commission's regulations; D. The facility will operate in conformity with the application, as amended, theprovisions of the Act, and the regulations of the Commission (except asexempted from compliance in Section 2.D. below);E. There is reasonable assurance:
(i) that the activities authorized by this operating license can be conducted without endangering the health and safety of the public,and (ii) that such activities will be conducted in compliance with the Commission's regulations set forth in 10 CFR Chapter I (except as exempted from compliance in Section 2.D. below);On April 29, 2013, the name "Carolina Power & Light Company" (CP&L) was changed to "DukeEnergy Progress, Inc."Renewed License No. NPF-63Amendment No. 4-42 Enclosure 2 toRA-1 5-0009Enclosure 2 to RA-15-0009 Attached is the missing Enclosure 2 Asset Purchase Agreement to the December22, 2014, Duke Energy letter RA-14-0029, with a strike-through on the"Confidential" header, since this document is not confidential.
Enclosure 2 toRA-14-0029 Enclosure 2Asset Purchase Agreement by and betweenDuke Energy Progress, Inc. andNorth Carolina Eastern Municipal Power Agency EN T1 4 -EEXECUTION COPYASSET PURCHASE AGREEMENT by and betweenDUKE ENERGY PROGRESS, INC.andNORTH CAROLINA EASTERN MUNICIPAL POWER AGENCYDated as of September 5, 2014CHAR2\I573738vIO G,-OA Y .rr T1 4-AF *EXECUTION COPYTABLE OF CONTENTSPageArticle I DEFINITIONS; USAGE ...................................................................................................
1Section 1.1. D efi nition s .......................................................................................................
1Section 1.2. Rules as to Usage .....................................................................................
10Section 1.3. Schedules and Exhibits
................................................................................
11Article II SALE AND PURCHASE; PRICE; CLOSING .............................................................
11Section 2.1. Sale and Purchase; Definition of Purchased Assets; AssumedL iab ility .....................................................................................................
11Section 2.2. Purchase Price ..........................................................................................
12Section 2.3. Allocation of Purchase Price for Tax Purposes
....................................
13Section 2.4. The Closing ...............................................................................................
13Section 2.5. Further Assurances
...............................................................................
15Section 2.6. Withholding
............................................................................................
16Article III REPRESENTATIONS AND WARRANTIES
........................................................
16Section 3.1. Representations and Warranties of Seller .............................................
16Section 3.2. Representations and Warranties of Purchaser
.....................................
20Article IV COVENANTS
..........................................................................................................
21Section 4.1. Efforts to Close .......................................................................................
21Section 4.2. Preservation of Purchased Assets ...........................................................
23Section 4.3. Notification
..............................................................................................
23Section 4.4. Tax Matters ..............................................................................................
24Section 4.5. Access to Information
..............................................................................
25Section 4.6. Spare Parts Inventory
...........................................................................
25Section 4.7. PE Pension Plan .......................................................................................
25Article V CONDITIONS TO CLOSING ................................................................................
26Section 5.1. Purchaser's Conditions Precedent
........................................................
26Section 5.2. Seller's Conditions Precedent
...............................................................
28Article VI TERMINATION
.....................................................................................................
30Section 6.1. Termination Prior to Closing ...............................................................
30Section 6.2. Effect of Termination or Breach Prior to Closing ................................
30Article VII SURVIVAL; INDEMNIFICATION
......................................................................
30Section 7.1. Survival
...................................................................................................
30Section 7.2. Seller Indemnification
...........................................................................
31Section 7.3. Purchaser Indemnification
...................................................................
31Article VIII MISCELLANEOUS
..............................................................................................
31Section 8.1. Dispute Resolution
..................................................................................
31Section 8.2. Governing Law; Submission to Jurisdiction
........................................
31CHAR2\1573738v]0 "N= r A4L EXECUTION COPYSection 8.3. Specific Perform ance .............................................................................
32Section 8.4. Notices ...........................................................................................................
32Section 8.5. Entire Agreem ent ...................................................................................
33Section 8.6. Expenses
...................................................................................................
33Section 8.7. Public Announcem ents ...........................................................................
33Section 8.8. Confidentiality
..........................................................................................
33Section 8.9. W aivers .....................................................................................................
34Section 8.10. Am endm ent ............................................................................................
34Section 8.11. No Construction Against Drafting Party ............................................
34Section 8.12. No Third-Party Beneficiary
..................................................................
35Section 8.13. H eadings ................................................................................................
35Section 8.14. Invalid Provisions
..................................................................................
35Section 8.15. No Assignm ent; Binding Effect ........................................................
35Section 8.16. Counterparts
.........................................................................................
35Exhibit A -Knowledge Exhibit B -Real Property Legal Description Exhibit C -Plants Agreements Termination Agreement Exhibit D -Bill of SaleExhibit E -Form of DeedsiiCI-AR2\1 573 738v10 GOAWDEALTAM EXECUTION COPYASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT (the "Agreement")
is made and entered intoeffective as of September 6 2014 (the "Effective Date"), by and between NORTH CAROLINAEASTERN MUNICIPAL POWER AGENCY, a joint agency and public body and body corporate andpolitic organized and existing under North Carolina law ("Seller"),
and DUKE ENERGY PROGRESS, INC., a North Carolina corporation
("Purchaser").
Seller and Purchaser are also each referred to hereinindividually as a "Party" and collectively as the "Parties."
RECITALSWHEREAS, Purchaser and Seller each has an undivided ownership interest in the nuclear-fueled generation facilities known as the Shearon Harris Nuclear Plant, located in Wake County, North Carolina(the "Harris Plant"),
and Brunswick Unit 1 (the "Brunswick 1 Plant") and Brunswick Unit 2 (the"Brunswick 2 Plant"),
each located in Brunswick County, North Carolina, and the coal-fueled generation facilities known as the Mayo Plant (the "Mayo Plant") and Roxboro Unit 4 (the "Roxboro 4 Plant"),
eachof which is located in Person County, North Carolina (the Harris Plant, the Brunswick I Plant, theBrunswick 2 Plant, the Mayo Plant and the Roxboro 4 Plant, collectively, the "Plants");
: WHEREAS, Seller currently owns the following undivided ownership interests in the Plants:16.17% in the Harris Unit No. I and 12.94% in the cancelled Harris Units No. 2, 3 and 4 (collectively, the"Harris Interest"),
18.33% in the Brunswick I Plant (the "Brunswick 1 Interest"),
18.33% in theBrunswick 2 Plant (the "Brunswick 2 Interest"),
16.17% in the Mayo Unit No. I and 12.94% in thecancelled Mayo Unit No. 2 (collectively, the "Mayo Interest"),
and 12.94% in the Roxboro 4 Plant and3.77% in the common facilities that support the Roxboro 4 Plant and the three (3) other coal-fired generation facilities located at the site of the Roxboro 4 Plant (collectively, the "Roxboro 4 Interest",
andtogether with the Harris Interest, the Brunswick I Interest, the Brunswick 2 Interest and the MayoInterest, the "Seller's Interests");
andWHEREAS, Seller has agreed to sell to Purchaser, and Purchaser has agreed to purchase fromSeller, the Seller's Interests and certain related assets and accounts in accordance with, and subject to theterms and conditions of, this Agreement.
NOW, THEREFORE, in consideration of the Recitals set forth above, the respective covenants and agreements of the Parties herein set forth, and other good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged by the Parties, the Parties, intending to be legally bound,do hereby agree as follows:AGREEMENT ARTICLE IDEFINITIONS; USAGESection 1.1. Definitions.
Unless the context shall otherwise
: require, capitalized terms used inthis Agreement shall have the meanings assigned to them in this Section 1.1."Additional Decommissioning Funds" means all funds, other than those held in the NuclearDecommissioning Trust Funds, reserved or held by Seller, and not reported to the NRC in any DFAReport, for the purpose of funding or defraying the decommissioning costs, expenses or liabilities CHAR2\1573738v!0 00-54-FI-F
-Aý q-Z 4 1EXECUTION COPYassociated with spent fuel management and site restoration for the Harris Plant, the Brunswick 1 Plant orthe Brunswick 2 Plant."Affiliate" of any Person means any other Person directly or indirectly Controlling, directly orindirectly Controlled by or under direct or indirect common Control with such Person."Agreement" has the meaning given to it in the preamble hereof."Assigned Contracts" means the (i) License Agreement dated as of June 24, 1987, by and amongNorth Carolina Eastern Municipal Power Agency, Cogentrix Carolina Leasing Corporation and CarolinaPower & Light Company (N/K/A Duke Energy Progress, Inc.), recorded Book 698, page 365, Brunswick County Registry; and (ii) Lease dated September 3, 1996, by and among Carolina Power & LightCompany (N/K/A Duke Energy Progress, Inc.), North Carolina Eastern Municipal Power Agency, asLandlords, and Brunswick County, as Tenant, recorded Book 1144, page 1175, Brunswick CountyRegistry.
"Assumed Liabilities" has the meaning given to it in Section 2.1.3."Bill of Sale" has the meaning given to it in Section 2.4.1(b)(ii).
"Bond Fund Trustee" means The Bank of New York Trust Company, N.A., in its capacity asBond Fund Trustee under the Bond Resolution.
"Bond Legislation" means legislation passed by the North Carolina General Assembly andenacted into law permitting Seller to issue bonds to refinance existing Indebtedness of Seller outstanding under the Bond Resolution and attributable to Seller's Interest that cannot be repaid (or its paymentprovided for) with that portion of the Purchase Price described in Section 2.2.1(a) of this Agreement orother funds available to Seller."Bond Resolution" means Resolution R-2-82, adopted by the Board of Commissioners of Selleron April 1, 1982, as amended and supplemented.
"Brunswick 1 Interest" has the meaning given to it in the Recitals to this Agreement.
"Brunswick 1 Plant" has the meaning given to it in the Recitals to this Agreement.
"Brunswick 2 Interest" has the meaning given to it in the Recitals to this Agreement.
"Brunswick 2 Plant" has the meaning given to it in the Recitals to this Agreement.
"Business Day" means any day except Saturday, Sunday or any weekday that banks in Charlotte, North Carolina or New York, New York are closed."Catch-Up Pension Contribution" has the meaning given to it in Section 4.7(b)."Closing" has the meaning given to it in Section 2.4."Closing Date" means the date on which the Closing occurs."Code" means the Internal Revenue Code of 1986 and the regulations thereunder.
2CHAR2\1573738v10 R MWEATr-T7A EXECUTION COPY"Control" of any Person means the possession, directly or indirectly, of the power either to (a)vote more than fifty percent (50%) of the securities or interests having ordinary voting power for theelection of directors (or other comparable controlling body) of such Person or (b) direct or cause thedirection of management or policies of such Person, whether through the ownership of voting securities orinterests, by contract or otherwise.
"Debt Service Support Contract" shall have the meaning given to it in Section 5.1.14."Decommissioning Trust Liabilities" means any and all Liabilities arising out of or related toSeller's possession, management, operation, or use of the Nuclear Decommissioning Trusts or any of thefunds, proceeds, or rights associated therewith or contained therein;
: provided, however, that, subject tocompliance with the requirements set forth in Section 3.1.14, if, based on any DFA Report filed prior toClosing, the NRC determines before or after Closing that Seller fails to demonstrate financial assurance for its share of radiological decommissioning costs in accordance with NRC regulations, such failure shallnot be deemed to be a Decommissioning Trust Liability.
"Deeds" has the meaning given to it in Section 2.4.1(b)(iii).
"DFA Report" means any decommissioning financial assurance report filed by Seller, or onbehalf of Seller, with the NRC pursuant to 10 CFR 50.75(f)(1) for the Harris Plant, the Brunswick I Plantor the Brunswick 2 Plant."Disbursement Instructions" means the instructions delivered to Purchaser by Seller and the BondFund Trustee regarding that portion of the Purchase Price described in Section 2.2.1(a) of this Agreement to be deposited into the Escrow Deposit and/or Refunding Trust Fund by Purchaser at Closing."Disclosure Update" has the meaning given to it in Section 4.3."Effective Date" has the meaning given to it in the preamble to this Agreement.
"ElectriCities" means ElectriCities of North Carolina, Inc., a joint municipal assistance agencyand public body and body corporate and politic organized and existing under North Carolina law."Escrow Deposit and/or Refunding Trust Fund" means the escrow or refunding trust fund orfunds into which that portion of the Purchase Price described in Section 2.2.1(a) of this Agreement is tobe deposited pursuant to an agreement between the Seller and the Bond Fund Trustee (such agreement, the "Escrow Deposit and/or Refunding Trust Fund Agreement").
"Excluded Assets" has the meaning given to it in Section 2.1.2."Excluded Liabilities" has the meaning given to it in Section 2.1.4."Existing Participant Power Sales Agreements" means, collectively, the existing Initial ProjectPower Sales Agreements between Seller and each Participant and the existing Supplemental Power SalesAgreements between Seller and each Participant.
"Existing Participant Power Sales Agreement Termination Agreements" has the meaning given toit in Section 2.4.1(b)(xiii).
"Federal Power Act" means the Federal Power Act of 1935 and the regulations thereunder.
3CHAR2\1573738vI0
-M. F-F-9 -F A. T-Z 4 LEXECUTION COPY"FERC" means the Federal Energy Regulatory Commission.
"FERC 203 Approval" means the order issued by FERC under Section 203 of the Federal PowerAct that approves the purchase of the Purchased Assets as contemplated by this Agreement.
"FERC 205 Approvals" means the order or orders issued by FERC under Section 205 of theFederal Power Act that accept or approve (i) all amendments to the rates in the Wholesale Power SalesAgreements, as proposed by Purchaser in the exercise of its sole discretion, to include recovery of thePurchase Price (including any acquisition adjustment above net book value of the Purchased Assetsreflected therein) in such rates over a time period acceptable to Purchaser, as determined in Purchaser's sole discretion, as well as recovery of a return, at a level acceptable to Purchaser, as determined inPurchaser's sole discretion, on the unamortized balance of the Purchase Price, and (ii) the FullRequirements Power Purchase Agreement without any amendment or modification that is unacceptable tothe Parties."FERC Accounting Approval" means the order or orders issued by FERC under the FederalPower Act that approve, without any condition, amendment or modification that is unacceptable toPurchaser, as determined in Purchaser's sole discretion, all accounting practices or treatments proposedby Purchaser in connection with Purchaser's proposal to recover under the Wholesale Power SalesAgreements and the Full Requirements Power Purchase Agreement the Purchase Price (including anyacquisition adjustment above net book value of the Purchased Assets reflected therein) in such rates overa time period acceptable to Purchaser, as determined in Purchaser's sole discretion as well as recovery ofa return, at a level acceptable to Purchaser, as determined in Purchaser's sole discretion, on theunamortized balance of the Purchase Price."Fuel Inventory" has the meaning given to it in Section 2.1.1(d).
"Full Requirements Power Purchase Agreement" means the Full Requirements Power PurchaseAgreement by and between Seller and Purchaser dated as of even date herewith.
"Full Requirements Power Sales Agreement" shall have the meaning given to it in Section 5.1.13."Governmental Authority" means any federal, state or local governmental entity, authority oragency, court, tribunal, regulatory commission or other body, whether legislative, judicial or executive (ora combination or permutation thereof).
"Harris Interest" has the meaning given to it in the Recitals to this Agreement.
"Harris Plant" has the meaning given to it in the Recitals to this Agreement.
"Indebtedness" means, with respect to any Person at any date, without duplication:
(i) allobligations of such Person for borrowed money or in respect of loans or advances, (ii) all obligations ofsuch Person evidenced by bonds, debentures, notes or other similar instruments or debt securities, (iii) allobligations arising from cash/book overdrafts, (iv) all indebtedness for the deferred purchase price ofproperty or services with respect to which a Person is liable as obligor (other than trade payables incurredin the ordinary course of business),
(v) all obligations in respect of capital leases, and (vi) all accruedinterest prepayment premiums or penalties related to any of the foregoing.
"Independent Accounting Firm" means Grant Thornton LLP.4CHAR2\1573738v10
-C--0AQr1--'
ýT-W-fC ~I.TEF E~T1A1EXECUTION COPY"Knowledge" or any similar phrase in this Agreement means (i) in the case of Seller, the actualknowledge of those officers and employees of Seller or ElectriCities listed in Exhibit A, or any otherinformation which those officers and employees of Seller or ElectriCities listed in Exhibit A wouldreasonably be expected to be aware of in the prudent discharge of their duties (whether in their capacity asan officer or employee of Seller or ElectriCities) in the ordinary course of business but which may not beactually known to such Persons, and (ii) in the case of Purchaser, the actual knowledge of those officersand employees of Purchaser listed in Exhibit A, or any other information which those officers andemployees of Purchaser listed in Exhibit A would reasonably be expected to be aware of in the prudentdischarge of their duties in the ordinary course of business but which may not be actually known to suchPersons.
In all events, a Party shall be deemed to have Knowledge of a matter of which such Party hasreceived written notice."Law" means any statute, law, treaty, rule, code, common law, ordinance, regulation, permit,certificate or order of any Governmental Authority, or any judgment,
: decision, decree, injunction, writ,order or like action of any court, arbitrator or other Governmental Authority.
"Liability" means any Indebtedness, obligation and other liability of a Person (whether
: absolute, accrued, contingent, fixed, known or unknown or otherwise, and whether due or to become due)."Lien" means any pledge, deed of trust, mortgage, hypothecation, assignment, depositarrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security grantor agreement of any kind or nature whatsoever, including without limitation any conditional sale or othertitle retention agreement, any financing lease having substantially the same effect as any of the foregoing, or the filing of any financing statement or similar instrument under the Uniform Commercial Code as ineffect in any relevant jurisdiction or comparable law of any jurisdiction, domestic or foreign, and anyother lease, and any easement, restriction, condition,
: covenant, right-of-way or other encumbrance or titleexception.
"Losses" has the meaning given to it in Section 7.2."Material Adverse Effect" means a material adverse effect on (a) any of the Plants or any of theother Purchased Assets, (b) the ability of Seller or Purchaser to perform its obligations under thisAgreement or any of the other Transaction Agreements, or (c) the validity or enforceability of thisAgreement or any of the other Transaction Agreements, or the rights or remedies of Seller or Purchaser hereunder or thereunder.
"Mayo Interest" has the meaning given to it in the Recitals to this Agreement.
"Mayo Plant" has the meaning given to it in the Recitals to this Agreement.
"Municipalities' Consent" means the unanimous consent of the Participants to, and approval of,(i) the consummation of the transactions contemplated by this Agreement (as the same may be amendedby the Parties),
including the sale of Seller's Interests to Purchaser on the terms hereof, (ii) the FullRequirements Power Purchase Agreement (as the same may be amended by the Parties) and (iii) suchother documents or agreements as may be necessary to effect or implement either of the foregoing, inform and substance reasonably satisfactory to Purchaser and Seller."Municipalities' Consent Outside Date" has the meaning given to it in Section 6.1(d)."NCUC" means the North Carolina Utilities Commission.
CHAR2\1573738vI0
-0 1-F-F-9 B.A. I -A 4 "EXECUTION COPY"NCUC Approval" means the order or orders issued by the NCUC that approve an amendment, transfer or issuance, as appropriate, of a Certificate of Public Convenience and Necessity for the Plants toreflect Seller's transfer of the Purchased Assets to Purchaser.
"NCUC Rate Approvals" means approval by the NCUC of a retail power rate structure (including the rate structure that would result from implementation of the North Carolina Legislation) that makes, asdetermined in Purchaser's sole discretion, the transactions contemplated by this Agreement economically viable for Purchaser and Purchaser's stakeholders.
"North Carolina Legislation" means legislation passed by the North Carolina General Assemblyand enacted into law that makes, as determined in Purchaser's sole discretion, the transactions contemplated by this Agreement economically viable for Purchaser and Purchaser's stakeholders.
"NRC" means the Nuclear Regulatory Commission.
"NRC Approvals" means the orders issued by the NRC that (i) approve the transfer of Seller'sownership
: licenses, Renewed License DPR-71 for Brunswick Steam Electric Plant, Unit 1, RenewedLicense DPR-62 for Brunswick Steam Electric Plant, Unit 2, and Renewed License NPF-63 for ShearonHarris Nuclear Power Plant, Unit 1, to Purchaser and (ii) authorize the distribution of the NuclearDecommissioning Trust Funds to or for the benefit of Purchaser in accordance with the terms of theNuclear Decommissioning Trust."Nuclear Decommissioning Trust" means the Decommissioning Trust Agreement, dated as ofJune 28, 1990 and effective as of June 29, 1990, between North Carolina Eastern Municipal PowerAgency and U.S. Bank National Association (as successor to Wachovia Bank & Trust Company, N.A.),as Trustee, that has been established and is maintained by Seller pursuant to regulations promulgated bythe NRC in order to fund Seller's share of the radiological decommissioning costs for the Harris Plant, theBrunswick I Plant and the Brunswick 2 Plant."Nuclear Decommissioning Trust Funds" means the following separate trust funds established bythe Trustee under the Nuclear Decommissioning Trust:(a) the Harris Unit No. I Decommissioning Trust Fund;(b) the Brunswick Unit No. 1 Decommissioning Trust Fund; and(c) the Brunswick Unit No. 2 Decommissioning Trust Fund."OFA" means the Operating and Fuel Agreement, dated as of July 30, 1981, between CarolinaPower & Light Company (N/K/A Duke Energy Progress, Inc.) and North Carolina Municipal PowerAgency Number 3 (N/K/A North Carolina Eastern Municipal Power Agency),
as amended."Outside Date" has the meaning given to it in Section 6.1(e)."Participant" means each of the cities, towns or other municipal Governmental Authorities thathave executed and are parties to an Initial Project Power Sales Agreement with Seller as of the Effective Date."Parat" or "Parties" has the meaning given to it in the preamble to this Agreement.
"PE Pension Plan" has the meaning given to it in Section 4.7.6CHAR2\1573738v I0 fGb&TEFJ b-rT1r AEXECUTION COPY"Permits" means permits,
: licenses, approvals, certificates and other authorizations of anyGovernmental Authority.
"Permitted Liens" means (i) those exceptions to title listed in Schedule
: 1. 1 as of the date hereof,(ii) liens for Taxes or other governmental charges or assessments not yet due and delinquent or thevalidity of which is being contested in good faith by appropriate proceedings, (iii) mechanics',
carriers',
workers',
repairers' and other similar liens and rights arising or incurred in the ordinary course ofbusiness for amounts not yet due and payable or the validity of which is being contested in good faith byappropriate proceedings, and (iv) zoning, entitlement, conservation restrictions and other land use andenvironmental regulations by any Governmental Authority.
"Person" means any individual, corporation, partnership, joint venture, association, joint stockcompany, trust, limited liability
: company, unincorporated organization, Governmental Authority or anyother form of legal entity."Plants" has the meaning given to it in the Recitals to this Agreement.
"Plants Agreements" means the (i) OFA, (ii) the Power Coordination Agreement, dated as of July30, 1981, between Carolina Power & Light Company (N/K/A Duke Energy Progress, Inc.) and NorthCarolina Municipal Power Agency Number 3 (N/K/A North Carolina Eastern Municipal Power Agency),as amended, the (iii) the Power Coordination Agreement
-1988B For the Diesel New ResourceGenerating Project at Edenton, North Carolina, dated as of March 29, 1988, between Carolina Power &Light Company (N/K/A Duke Energy Progress, Inc.) and North Carolina Eastern Municipal PowerAgency, (iv) the Power Coordination Agreement
-1988C For the Diesel New Resource Generating Project at Elizabeth City, North Carolina, dated as of March 29, 1988, between Carolina Power & LightCompany (N/K/A Duke Energy Progress, Inc.) and North Carolina Eastern Municipal Power Agency, (v)the Agreement Applicable to Supplemental Load Beginning January 1, 2010, dated as of February 25,2005, between Carolina Power & Light Company (N/K/A Duke Energy Progress, Inc.) and NorthCarolina Eastern Municipal Power Agency, as amended, (vi) the Power Supply Agreement Applicable toSupplemental Load Beginning January 1, 2018 Through December 31, 2031, dated as of October 31,2011, between Carolina Power & Light Company dba Progress Energy Carolinas, Inc. (N/K/A DukeEnergy Progress, Inc.) and North Carolina Eastern Municipal Power Agency, as amended, (vii) thePurchase, Construction, and Ownership Agreement, dated as of July 30, 1981, between Carolina Power &Light Company (N/K/A Duke Energy Progress, Inc.) and North Carolina Municipal Power AgencyNumber 3 (N/K/A the North Carolina Eastern Municipal Power Agency),
as amended, (viii) theCancellation Agreement between Carolina Power & Light Company and North Carolina EasternMunicipal Power Agency, dated as of April 21, 1982, related to the cancellation of Harris Units No. 3 and4, (ix) the Cancellation Agreement between Carolina Power & Light Company and North CarolinaEastern Municipal Power Agency, dated as of December 23, 1985, related to the cancellation of HarrisUnit No. 2, (x) the Cancellation Agreement between Carolina Power & Light Company and NorthCarolina Eastern Municipal Power Agency Regarding Cancellation of Mayo Unit No. 2, dated as ofFebruary 24, 1988, (xi) any other agreement between or among Seller or any of its Affiliates andPurchaser or any of its Affiliates entered into prior to the Effective Date and related to the ownership oroperation of the Plants, interconnection, or the production,
: purchase, or sale of power, and (xii) withrespect to each of (i) through (xi), including side letters or other agreements between or among Seller orits Affiliates and Purchaser or its Affiliates deriving from the transactions contemplated thereby."Plants Agreements Termination Agreement" has the meaning given to it in Section 2.4.1(a)(1).
7CHAR2\1573738vl0 G OA. "1 11,A TMIEXECUTION COPY"Plants Liabilities" means all Liabilities (other than any Indebtedness incurred by Seller),
costs,fees and expenses (including operating expenses) arising out of or related to the operation, ownership oruse of the Plants prior to the Closing, regardless of when such Liabilities are actually suffered or incurred.
"Plants Permits" has the meaning given to it in Section 3.1.12."Pre-Execution Update" has the meaning given to it in Section 4.3."Property Taxes" has the meaning given to it in Section 2.2.2."PSCSC" means the Public Service Commission of South Carolina.
"PSCSC Rate Approvals" means approval by the PSCSC of a retail power rate structure (including the rate structure that would result from implementation of the South Carolina Legislation) thatmakes, as determined in Purchaser's sole discretion, the transactions contemplated by this Agreement economically viable for Purchaser and Purchaser's stakeholders.
"Purchase Price" has the meaning given to it in Section 2.2.1."Purchased Assets" has the meaning given to it in Section 2.1.1."Purchaser" has the meaning given to it in the preamble to this Agreement.
"Purchaser's Disclosure Schedule" means the schedule delivered to Seller by Purchaser herewithand dated as of the Effective Date, containing all lists, descriptions, exceptions and other information andmaterials as are required to be included therein by Purchaser pursuant to this Agreement, attached heretoas Schedule 3.2."Purchaser Indemnified Person" has the meaning given to it in Section 7.2."Purchaser Plants Liabilities" means all Plants Liabilities other than the Seller Plants Liabilities.
"Purchaser Required Consents" has the meaning given to it in Section 3.2.5."Real Property" means the real property upon which the Plants are located as described inExhibit B attached hereto, and the real property upon which the support facilities of the Plants are locatedas described in Exhibit B attached hereto, in each case together with all buildings, structures and otherimprovements constructed thereon; rights, title and interests of Seller in and to all other easements,
: benefits, privileges and other rights appurtenant to such real property or in any way appertaining thereto,and all strips and gores and any land lying in the bed of any street or road open or closed adjoining suchreal property.
"Related Person" means with respect to any Person, such Person's Affiliates, and the employees,
: officers, directors, agents, representatives, licensees and invitees of such Person and its Affiliates.
"Required Consents" means, collectively, the Purchaser Required Consents and the SellerRequired Consents.
"Roxboro 4 Interest" has the meaning given to it in the Recitals to this Agreement.
"Roxboro 4 Plant" has the meaning given to it in the Recitals to this Agreement.
8CHAR2\1573738v10 C A TI-FflIA rTz A,EXECUTION COPY"Seller" has the meaning given to it in the preamble to this Agreement.
"Seller Indemnified Person" has the meaning given to it in Section 7.3."Seller Plants Liabilities" means the amount of (i) all Taxes attributable to Seller's pre-Closing ownership interest in the Plants and (ii) the Seller's obligations to compensate Purchaser for (A) servicesrendered or products delivered in connection with the Plants Agreements for all periods prior to Closing,(B) any Service Costs attributable to pre-Closing time periods and (C) any Catch-Up PensionContribution.
"Seller Required Consents" has the meaning given to it in Section 3.1.5."Seller's Disclosure Schedule" means the schedule delivered to Purchaser by Seller herewith anddated as of the Effective Date, containing all lists, descriptions, exceptions and other information andmaterials as are required to be included therein by Seller pursuant to this Agreement and attached heretoas Schedule 3.1."Seller's Interests" has the meaning given to it in the Recitals to this Agreement.
"Service Costs" means the cost associated with the present value of benefits attributed to a PEPension Plan participant's service in the current year plus administrative expenses of the PE Pension Plan."Solvent",
when used with respect to any Person, means that, as of any date of determination, (a) such Person will not have, as of such date, an unreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged following such date, and (b) suchPerson will be able to pay its Liabilities as they mature."South Carolina Legislation" means legislation passed by the South Carolina General Assemblyand enacted into law that makes, as determined in Purchaser's sole discretion, the transactions contemplated by this Agreement economically viable for Purchaser and Purchaser's stakeholders.
"Spare Parts Inventory" has the meaning given to it in Section 2.1.1(e).
"Tax" or "Taxes" means any and all taxes, including any interest, penalties, or other additions totax that may become payable in respect thereof, imposed by any federal, state, local, or foreigngovernment or any agency or political subdivision of any such government, which taxes shall include allincome taxes, profits taxes, taxes on gains, alternative minimum taxes, estimated taxes, payroll andemployee withholding taxes, unemployment insurance taxes, social security taxes, welfare taxes,disability taxes, severance taxes, license charges, taxes on stock, sales and use taxes, ad valorem taxes,value-added taxes, excise taxes, franchise taxes, gross receipts taxes, business license taxes, occupation taxes, real or personal property taxes, stamp taxes, environmental taxes, transfer taxes, workers'compensation taxes, and other taxes, fees, duties, levies, customs,
: tariffs, imposts, assessments, obligations and charges of the same or of a similar nature to any of the foregoing or any amounts due inlieu thereof."Tax Returns" means any return, report, information return, claim for refund or other document(including any related or supporting information) supplied to or required to be supplied to any TaxingAuthority with respect to Taxes, including any attachments, amendments and supplements thereto."Taxing Authority" means, with respect to any Tax, the Governmental Authority that imposessuch Tax, and the Governmental Authority (if any) charged with the collection of such Tax.9CHAR2\1573738vl0 G0AT4D-,,
-T-M-EEXECUTION COPY"Transaction Agreements" means the following agreements:
(a) this Agreement; (b) the Bill of Sale;(c) the Deeds;(d) the Plants Agreements Termination Agreement; and(e) the Full Requirements Power Purchase Agreement.
"Transfer Taxes" has the meaning given to it in Section 4.4(a)."Update Period" has the meaning given to it in Section 4.3."Wholesale Power Sales Agreements" means the following wholesale power sales agreements (asthe same may be amended, consolidated, supplemented, novated or replaced by the parties thereto fromtime to time) of Purchaser as of the Closing Date which utilize a formula rate: Power Supply andCoordination Agreement dated June 10, 2009 with Public Works Commission of the City of Fayetteville, North Carolina; Full Requirements Power Purchase Agreement dated June 28, 2012 with French BroadElectric Membership Cooperative; Second Amended and Restated Power Supply and Coordination Agreement dated February 7, 2014, with North Carolina Electric Membership Corporation; FullRequirements Power Purchase Agreement, dated October 28, 2013, with The City of Camden, SouthCarolina; and Second Amended and Restated Partial Requirements Service Agreement dated December16, 2013 with Piedmont Electric Membership Corporation.
"2015 Expenditure Cap" means $78,000,000.
"2016 Expenditure Cap" means $55,000,000.
Section 1.2. Rules as to Usage. Except as otherwise expressly provided herein, the following rules shall apply to the usage of terms in this Agreement:
(a) The terms defined above have the meanings set forth above for allpurposes, and such meanings are equally applicable to both the singular and plural forms of the termsdefined.(b) "Include,"
"includes" and "including" shall be deemed to be followed by"without limitation" whether or not they are in fact followed by such words or words of like import.(c) "Writing,"
"written" and comparable terms refer to printing, typing, andother means of reproducing in a visible form.(d) References to any document are references to that document as amended,consolidated, supplemented, novated or replaced by the parties thereto from time to time.(e) Any Law defined or referred to above means such Law as from time totime amended, modified or supplemented, including by succession of comparable successor Law.(f) References to a Person are also to its successors and assigns.10CHAR2\1573738v10 GOA ENT EXECUTION COPY(g) Any term defined above by reference to any agreement, instrument orLaw has such meaning whether or not such agreement, instrument or Law is in effect.(h) "Hereof,"
"herein,"
"hereunder" and comparable terms refer, unlessotherwise expressly indicated, to the entire agreement or instrument in which such terms are used and notto any particular
: article, section or other subdivision thereof or attachment thereto.
References in aninstrument to "Article,"
"Section,"
or another subdivision or to an attachment are, unless the contextotherwise
: requires, to the relevant
: article, section, subsection or subdivision of or an attachment to suchagreement or instrument.
If such reference in this Agreement to "Article,"
"Section,"
or other subdivision does not specify an agreement or document, such reference refers to an article, section or othersubdivision of this Agreement.
All references to exhibits or schedules in any agreement or instrument that is governed by this Agreement are to exhibits or schedules attached to such instrument or agreement.
(i) Pronouns, whenever used in any agreement or instrument that isgoverned by this Agreement and of whatever gender, shall include natural Persons, corporations, limitedliability companies, partnerships and associations of every kind and character.
(j) References to any gender include, unless the context otherwise
: requires, references to all genders.(k) "Shall" and "will" have equal force and effect.Section 1.3. Schedules and Exhibits.
This Agreement consists of the Articles contained herein and the Schedules and Exhibits attached hereto, all of which constitute one and the sameagreement with equal force and effect.ARTICLE IISALE AND PURCHASE; PRICE; CLOSINGSection 2.1. Sale and Purchase, Definition of Purchased Assets: Assumed Liability.
2.1.1. Closing.
Seller shall sell, transfer, convey, assign and deliver to Purchaser, freeand clear of all Liens (other than Permitted Liens), and Purchaser shall purchase and pay for, all ofSeller's right, title and interest in and to all assets and properties of Seller relating to its ownership interestin the Plants, including without limitation, Seller's right, title and interest in and to the following assets(collectively, the "Purchased Assets"):
(a) Seller's Interests; (b) All Real Property (to the extent not included in Seller's Interests);
(c) the Nuclear Decommissioning Trust Funds and $26,000,000 ofAdditional Decommissioning Funds, and all proceeds and rights therein;(d) Nuclear fuel inventory purchased for the Harris Plant, the Brunswick 1Plant and the Brunswick 2 Plant and residing in Seller's nuclear fuel fleet inventory accounts and allaccounts related to such nuclear fuel inventory
( the "Fuel Inventory");
(e) Spare parts inventory of the Plants and any related support facilities, including equipment, tools, goods and supplies (the "Spare Parts Inventory");
and11CHAR2\ 1573738v I
EXECUTION COPY(f) The Plants Permits.2.1.2. Excluded Assets. The Purchased Assets shall not include Seller's interest in thefollowing agreements, assets and properties (the "Excluded Assets"),
and Purchaser shall have noLiability with respect thereto:(a) Except as set forth in Section 2.1.1(c),
cash, cash equivalents, bankdeposits, and accounts and notes receivable, trade or otherwise; (b) Rights of Seller arising under this Agreement, the Transaction Agreements or any other instrument or document executed and delivered pursuant to this Agreement; (c) All assets, properties and contractual rights of Seller other than thePurchased Assets; and(d) Any damages, costs or settlement amounts that are attributable to theHarris Interest, the Brunswick I Interest or the Brunswick 2 Interest and that are collected by Purchaser pursuant to or as a result of (i) Carolina Power & Light Co., et. al. v United States, No. I 1-869C in theUnited States Court of Federal Claims, and (ii) any similar action or proceeding initiated by DEP in thefuture against the United States related to damages associated with spent fuel storage costs incurredduring the period beginning January 1, 2011 and ending on the Closing Date, provided that any suchdamages, costs or settlement amounts shall be reduced by Seller's properly allocable ownership portion(calculated based on the applicable Seller's Interests) of the litigation costs (including reasonable attorneyfees) incurred by Purchaser or its Affiliates in or pursuant to such actions or proceedings, to the extent thesame have not already been reimbursed by Seller (under the Plants Agreements or otherwise).
2.1.3. Assumed Liabilities.
On the terms and subject to the conditions set forth in thisAgreement, effective as of the Closing, Purchaser shall assume and satisfy or perform only the following Liabilities of Seller:(a) those Liabilities of Seller, other than the Decommissioning TrustLiabilities, directly related to the decommissioning of the Harris Plant, the Brunswick I Plant and theBrunswick 2 Plant; and(b) all Purchaser Plants Liabilities, other than the Decommissioning TrustLiabilities (clause (a) and (b) collectively, the "Assumed Liabilities").
2.1.4. Excluded Liabilities.
Except for the Assumed Liabilities, Purchaser shall haveno liability or obligation whatsoever for, and Seller shall retain and continue to be responsible for, all ofSeller's duties, obligations and Liabilities, including the Decommissioning Trust Liabilities and the SellerPlants Liabilities, whether incurred or arising before or after Closing, (all of such retained duties,obligations and Liabilities being referred to herein as the "Excluded Liabilities").
Section 2.2. Purchase Price.2.2.1. Amount. In consideration of the sale, assignment, conveyance, transfer anddelivery to Purchaser as of the Closing of Seller's right, title and interest in and to the Purchased Assets,Purchaser shall pay to or on behalf of Seller an amount equal to the sum of (a) $1,200,000,000, plus (b)the lesser of (i) an amount equal to all payments made by Seller pursuant to Section 2.3 of the OFA onaccount of capital expenditures made with respect to the Seller's Interests in the Plants from January 1,2015 through December 31, 2015, as such amount is determined by Purchaser at least thirty (30) Business12CHAR2\1573738vi0 G OA WIMP EMAK 4 LEXECUTION COPYDays prior to Closing based on the books and records of the Plants maintained by Purchaser, or (ii) the2015 Expenditure Cap, pLus (c) the lesser of (i) an amount equal to all payments made by Seller pursuantto Section 2.3 of the OFA on account of capital expenditures made with respect to the Seller's Interests inthe Plants from January 1, 2016 through the Closing Date, as such amount is determined by Purchaser atleast thirty (30) Business Days prior to Closing based on the books and records of the Plants maintained by Purchaser, or (ii) the 2016 Expenditure Cap (the total of (a), (b) and (c), the "Purchase Price").2.2.2. Prorations.
Real, personal, Public Service Company ad valorem Taxes andpayments in lieu of ad valorem Taxes with respect to the Purchased Assets ("Property Taxes") will beprorated on a calendar year basis through the Closing Date. Any special assessments or roll-back Taxeson or against the Purchased Assets shall be paid by Seller on or prior to the Closing Date. If the actualamount of Property Taxes is not known on the Closing Date, such Taxes shall be prorated on the basisof the amount of such Taxes payable for the prior year, and shall be adjusted between the Parties whenthe actual amount of such Taxes payable in the year of Closing is known to Purchaser and Seller.Within 30 days after the Property Tax liability is known for the calendar year in which the Closingoccurs, Purchaser and Seller shall make such payments or credits between themselves as are necessary so that each Party bears only its pro rata portion of the actual Property Tax liability for the calendar yearin which the Closing occurs. All prorations shall be made as adjustments to the Purchase Price,provided that to the extent any charge or receipt to be prorated at Closing is not known as of the ClosingDate, the Parties shall make the applicable proration and adjusting payments as soon as possible afterClosing.2.2.3. Method of Payment of Purchase Price. At Closing, Purchaser shall deliver thePurchase Price, as adjusted for the prorations and other adjustments hereunder, in United States dollars,by wire transfer of immediately available federal funds in accordance with the Disbursement Instructions provided by the Bond Fund Trustee.Section 2.3. Allocation of Purchase Price for Tax Purposes.
The Purchase Price shall beallocated among the Purchased Assets as of the Closing in accordance with a schedule to be prepared byPurchaser, using the allocation method provided by Section 1060 of the Code and the regulations thereunder.
The consent of Seller under this Section shall not be a condition to the Closing.
The Partiesshall cooperate to comply with all substantive and procedural requirements of Section 1060 of the Codeand the regulations thereunder, and except for any adjustment to the Purchase Price, the allocation shallbe adjusted only if and to the extent necessary to comply with such requirements.
Purchaser and Selleragree that they will not take nor will they permit any Affiliate to take, for income Tax purposes, anyposition inconsistent with such allocation;
: provided, however, that (i) Purchaser's cost may differ fromthe total amount allocated hereunder to reflect the inclusion in the total cost of items (for example,capitalized acquisition expenses) not included in the total amount so allocated, and (ii) the amountrealized by Seller may differ from the amount allocated to reflect transaction costs that reduce the amountrealized for federal income Tax purposes.
Transfer Taxes on the Deeds shall be calculated based on suchallocation.
Section 2.4. The Closine.
The closing of the transactions contemplated herein (the"Closing")
will take place at Purchaser's offices in Charlotte, North Carolina (or such other locationagreed to by the Parties),
at 10:00 a.m. local time on the date as soon as practicable (but in no eventlonger than 10 Business Days) after all conditions to the Closing set forth in Section 5.1 and Section 5.2have been satisfied or waived. The Closing shall be deemed effective as of 12:01 A.M. Charlotte, NorthCarolina time on the Closing Date.2.4.1. Closing.13CHAR2\1573738v 10 GOA T-17 4 LEXECUTION COPY(a) At the Closing, Purchaser shall (i) pay the Purchase Price in accordance with Section 2.2 and (ii) execute (as applicable) and deliver the following items to Seller:(i) a termination agreement in substantially the form and substance of Exhibit C attached hereto (the "Plants Agreements Termination Agreement"),
pursuant towhich the Parties shall terminate the Plants Agreements effective as of the Closing;(ii) the Required Consents obtained as of Closing to the extentPurchaser is the recipient or grantee thereof;(iii) a certificate of good standing (or equivalent certification) withrespect to Purchaser issued within thirty (30) days prior to the Closing Date by the Secretary ofState of the State of North Carolina; (iv) copies, certified by the Secretary or Assistant Secretary ofPurchaser, of resolutions of Purchaser's Board of Directors authorizing the execution anddelivery of this Agreement and all of the other agreements and instruments, in each case, to beexecuted and delivered by Purchaser in connection herewith; (v) a certificate of the Secretary or Assistant Secretary of Purchaser identifying the name and title and bearing the signatures of the officers of Purchaser authorized toexecute and deliver this Agreement and the other agreements and instruments contemplated hereby; and(vi) a certificate addressed to Seller dated as of the Closing Dateexecuted by a duly authorized officer of Purchaser to the effect that the conditions set forth inSection 5.2.1 and Section 5.2.2 have been satisfied by Purchaser.
(b) At the Closing, Seller shall execute (as applicable) and deliver or causeto be delivered the following items to Purchaser:
(i) documentation, in form and substance satisfactory to Purchaser, required to vest full, complete and valid title in Purchaser in and to all right, title and interest ofSeller in the Nuclear Decommissioning Trust Funds, and all proceeds and rights contained therein;(ii) a bill of sale in substantially the form of Exhibit D attachedhereto (the "Bill of Sale");(iii) special warranty deeds in substantially the form of Exhibit Eattached hereto (the "Deeds")
and any other documents necessary to convey all of Seller's right,title and interest in and to Seller's Interests; (iv) the Plants Agreements Termination Agreement; (v) the Required Consents obtained as of Closing to the extent Selleris the recipient or grantee thereof;(vi) the Disbursement Instructions; 14CHAR2\1573738v10 G- 14 4 -fEXECUTION COPY(vii) payoff or release letters (or such other instruments satisfactory toPurchaser) providing for the release of any Liens (other than Permitted Liens) on the Purchased Assets;(viii) a certificate, duly completed and executed by Seller, certifying that Seller is not a foreign Person. Such certificate shall be substantially in the form of thesample set forth in Treasury Regulation Section 1.1445-2(b)(2)(iv)(B);
(ix) a certificate of existence with respect to Seller, issued withinthirty (30) days prior to the Closing Date, issued by the Secretary of State of the State of NorthCarolina; (x) copies, certified by the Secretary or Assistant Secretary of Seller,of resolutions of Seller's Board of Directors authorizing the execution and delivery of thisAgreement and all of the other agreements and instruments, in each case, to be executed anddelivered by Seller in connection herewith; (xi) a certificate of the Secretary or Assistant Secretary of Selleridentifying the name and title and bearing the signatures of the officers of Seller authorized toexecute and deliver this Agreement and the other agreements and instruments contemplated hereby;(xii) a certificate addressed to Purchaser dated the Closing Dateexecuted by a duly authorized officer of Seller to the effect that the conditions set forth inSection 5.1.1 and Section 5.1.2 have been satisfied by Seller;(xiii) copies of the termination agreements, in form and substance satisfactory to Purchaser and fully executed by Seller and each Participant (collectively, the"Existing Participant Power Sales Agreement Termination Agreements"),
pursuant to whicheach Existing Participant Power Sales Agreement shall be terminated effective as of theClosing;(xiv) a completed Internal Revenue Service Form W-9 (Request forTaxpayer Identification Number and Certification) for Seller;(xv) $26,000,000 in immediately available funds (representing theAdditional Decommissioning Funds being purchased from Seller by Purchaser) by wire transferto an account designated by Purchaser prior to Closing; and(xvi) if requested by Purchaser, an assignment agreement, in formand substance reasonably satisfactory to Purchaser and Seller, assigning Seller's right, title andinterest in the Assigned Contracts to Purchaser.
Section 2.5. Further Assurances.
Subject to the terms and conditions of this Agreement, atany time or from time to time after the Closing, at either Party's request and without furtherconsideration, the other Party shall execute and deliver to such Party such other instruments of sale,transfer, conveyance, assignment and confirmation, provide such materials and information and take suchother actions as such Party may reasonably deem necessary or desirable in order more effectively (i) totransfer, convey and assign to Purchaser, and to confirm Purchaser's title to, the Purchased Assets, (ii) tothe full extent permitted by Law, to put Purchaser in actual possession of the Purchased Assets, and (iii)otherwise to consummate the transactions contemplated by this Agreement 15CHAR2\1573738vI0 G-RAI-F-r-o-,
A T-Z 4 "EXECUTION COPYSection 2.6. Withholdin
.Purchaser shall be entitled to deduct and withhold from anyamount otherwise payable to Seller pursuant to this Agreement such amounts as it is required to deductand withhold with respect to the making of such payment under any provision of applicable Law. If anyamount is so withheld, such withheld amounts shall be treated for all purposes of this Agreement ashaving been paid to Seller.ARTICLE IIIREPRESENTATIONS AND WARRANTIES Section 3.1. Representations and Warranties of Seller. Except as specifically set forth inSeller's Disclosure Schedule attached hereto as Schedule 3.1, Seller hereby represents and warrants toPurchaser that all of the statements contained in this Section 3.1 are true and correct as of the Effective Date. Each exception and other response to this Agreement set forth in Seller's Disclosure Schedule isidentified by reference to, or has been grouped under a heading referring to, a specific individual sectionof this Agreement, and, except as otherwise specifically stated with respect to such exception, relates onlyto such section.3.1.1. Existence.
Seller is a joint agency and public body and body corporate andpolitic organized, validly existing under the Laws of the State of North Carolina, Seller has all requisite corporate power and authority to own, lease and operate its properties and to carry out its business as it isnow being conducted, and is duly qualified in each jurisdiction in which the nature of its business or theownership or leasing of its assets and properties makes such qualification necessary.
3.1.2. Authority.
Seller has full corporate power and authority to execute and deliverthis Agreement and the Transaction Agreements to which it is or will be a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby.
Seller'sBoard of Directors has the power and authority to bind Seller with respect to the execution and delivery ofthis Agreement (including any amendments hereto) and the Transaction Agreements (including anyamendments thereto) to which Seller is or will be a party, and the performance by Seller of its obligations hereunder and thereunder, and Seller's Board of Directors has approved the execution and delivery bySeller of this Agreement and the Transaction Agreements to which it is or will be a party, and theperformance by Seller of its obligations hereunder and thereunder.
Accordingly, the execution anddelivery by Seller of this Agreement and the Transaction Agreements to which it is or will be a party, andthe performance by Seller of its obligations hereunder and thereunder, have been duly and validlyauthorized by all required corporate action by Seller, and no other action on the part of Seller, itsdirectors, commissioners, or Participants is necessary.
Resolution No. R-8-95 adopted by the Board ofCommissioners of Seller, effective as of July 11, 1995, was duly adopted by the Board of Commissioners and such resolution remains effective.
Resolution No. R-8-95 has been amended by Resolution Nos.EAR-3-96, EAR-2-01, EAR-5-04 and EAR-I-09, adopted on August 9. 1996, May 2, 2001, December15, 2004 and January 28, 2009, respectively, and a true and accurate copy of Resolution No. R-8-95, andeach of the amendments, is attached to Section 3.1.2 of Seller's Disclosure Schedule.
A complete andaccurate list of all Participants is set forth in Section 3.1.2 of Seller's Disclosure Schedule.
3.1.3. Binding Agreement.
This Agreement and the Transaction Agreements to whichSeller is or will be a party have been, or will be when delivered, duly executed and delivered by suchSeller and, assuming due and valid authorization, execution and delivery thereof by Purchaser, thisAgreement and the Transaction Agreements to which Seller is or will be a party are, or will be whendelivered, valid and binding obligations of Seller enforceable against Seller in accordance with theirterms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors' rights16CHAR2\1573738viO GGA ENTWEEXECUTION COPYgenerally and (ii) to the extent that the availability of the remedy of specific performance or injunctive orother forms of equitable relief may be subject to equitable defenses or would be subject to the discretion of the court before which any proceeding therefor may be brought.3.1.4. No Conflicts.
The execution and delivery by Seller of this Agreement does not,and the execution and delivery by Seller of the Transaction Agreements to which it is or will be a party,the performance by Seller of its obligations under this Agreement and such Transaction Agreements, andthe consummation of the transactions contemplated hereby and thereby shall not:(a) conflict with or result in a violation or breach of any of the terms,conditions or provisions of Seller's (i) bylaws or other applicable documents relating to the operation, governance or management of Seller, or (ii) articles of incorporation or other applicable organizational orcharter documents relating to the creation of Seller;(b) assuming all of the Seller Required Consents have been obtained, resultin a default,
: penalty, or any adjustment in required payments (or give rise to any right of termination, cancellation or acceleration) under any of the terms, conditions or provisions of any note, bond, deed oftrust, indenture,
: license, agreement, lease or other instrument or obligation to which Seller is party or bywhich Seller or any of the Purchased Assets may be bound, except for such defaults, penalties oradjustments (or rights of termination, cancellation or acceleration) as to which requisite waivers orconsents have been obtained in writing (true and correct copies of which waivers or consents have beenfurnished to Purchaser);
or(c) assuming all of the Seller Required Consents have been obtained, conflict with or result in a violation or breach of any term or provision of any Law applicable to Seller orthe Purchased Assets.3.1.5. Approvals and Filings.
Except as set forth in Section 3.1.5 of Seller's Disclosure Schedule (all items set forth on Section 3.1.5, the "Seller Required Consents"),
no consent, approval oraction of, filing with or notice to any Governmental Authority or other Person by Seller is required inconnection with the execution, delivery and performance by Seller of this Agreement or any of theTransaction Agreements to which it is or will be a party or the consummation of the transactions contemplated hereby or thereby.3.1.6. Legal Proceedings.
There are no claims, actions, proceedings or investigations pending with respect to which Seller has received notice, has been served or entered an appearance or, toSeller's Knowledge, threatened against Seller before any Governmental Authority that could reasonably be expected (i) to result in the issuance of an order restraining, enjoining or otherwise prohibiting ormaking illegal the consummation of the transactions contemplated by this Agreement or any of theTransaction Agreements, (ii) to adversely affect the ownership, operation or maintenance of any of thePurchased Assets, (iii) result in a Lien on any of the Purchased Assets or (iv) individually or in theaggregate, to have a Material Adverse Effect. There are no outstanding judgments, rules, orders, writs,injunctions or decrees of any Governmental Authority relating specifically to Seller or the Purchased Assets.3.1.7. Compliance with Laws. Seller is not in violation of or in default in any materialrespect under any Law applicable to Seller or, to Seller's Knowledge, the Purchased Assets. Except as setforth in Section 3.1.7 of Seller's Disclosure
: Schedule, Seller has not received notification alleging that itis in violation of any Law applicable to Seller or the Purchased Assets.17CHAR2\1573738v 10 G -01.41 ýA 4 --A VIE 4 7EXECUTION COPY3.1.8. Title: Solvency.
Except as set forth in Section 3.1.8 of Seller's Disclosure
: Schedule, Seller has good and valid title to all of its properties and assets constituting the Purchased Assets other than Seller's Interests and the Real Property (it being understood that the representations andwarranties applicable to Seller's Interests and the Real Property are set forth in Section 3.1.9), free andclear of all Liens except Permitted Liens. Seller is, and from the Effective Date until immediately following the Closing will be, Solvent.3.1.9. Real Property.
Except as set forth in Section 3.1.9 of Seller's Disclosure
: Schedule, Seller has good, valid and marketable fee simple title to Seller's Interests and the RealProperty, free and clear of all Liens other than Permitted Liens. Seller has not received notice of anyaction, litigation, condemnation or other proceeding of any kind with respect to or concerning Seller'sInterests or the Real Property, and none of the foregoing are pending, or to Seller's Knowledge, threatened.
Seller has not received any notice, and Seller does not have any Knowledge, that the RealProperty (or any portion of it) is in violation of any applicable zoning, flood, building or other code, orany other legal requirement or private restriction.
Other than Permitted Liens, there are no commitments to or agreements with any Governmental Authority affecting the use or ownership of Seller's Interests orthe Real Property.
3.1.10. Indebtedness.
Except as set forth in Section 3.1.10 of Seller's Disclosure Schedule (which shall set forth the Indebtedness of Seller by series and amount thereof),
Seller does nothave any Indebtedness related to the Purchased Assets or for which the Purchased Assets have beenpledged as collateral or pursuant to which the Purchased Assets are otherwise encumbered or subject torestriction on transfer.
3.1.11. Contracts and Agreements.
Except for the Plants Agreements and anyagreements listed in Section 3.1.11 of Seller's Disclosure
: Schedule, there are no agreements, indentures, security agreements, deeds of trust and other contracts relating to the development, design, construction, ownership, operation or maintenance of the Purchased Assets, to which Seller is a party. Section 3.1.11of Seller's Disclosure Schedule sets forth all agreements to which Seller is a party and to which Purchaser is not a party that are related to the sale or purchase of power. The Plants Agreements constitute lawful,valid and legally binding obligations of Seller, and are enforceable against Seller in accordance with theirterms. Each Plants Agreement is in full force and effect and constitutes the entire agreement by andbetween the parties thereto, no party to any Plants Agreement has repudiated any provision
: thereof, andno fact, event or circumstance has occurred that constitutes, or could reasonably be expected to constitute, a default under any Plants Agreement.
3.1.12. Permits.
Section 3.1.12 of Seller's Disclosure Schedule sets forth all Permitsacquired or held by or in the name of Seller in connection with the ownership, operation, maintenance oruse of the Purchased Assets (the "Plants Permits").
Seller is in compliance with each Plants Permit andSeller has not received notice of violation or noncompliance of any Plants Permit from any Governmental Authority or any other Person. Seller has not received any notice alleging that any such Plants Permit (i)is not in full force and effect, or (ii) is subject to any legal proceeding or to any unsatisfied condition that(A) is not reasonably expected to be satisfied or (B) if not satisfied could reasonably be expected to allowmaterial modification or revocation thereof.3.1.13. Taxes.(a) Seller has filed or will file when due all Tax Returns that are required tobe filed on or before the Closing Date with respect to the Purchased Assets and has paid or will pay in fullall Taxes required to be paid with respect to the Purchased Assets; and (ii) such Tax Returns wereprepared or will be prepared in the manner required by applicable Laws. Seller has not received any18CHAR2\1573738v10 G -ý 4VI-F-9-F.A.1-T-f 4LEXECUTION COPYnotice that any Taxes relating to any period prior to the Closing Date are owing that have not been paid onor before the Closing Date.(b) Seller has not extended or waived the application of any statute oflimitations of any jurisdiction regarding the assessment or collection of any Tax of Seller with respect tothe Purchased Assets.(c) None of the Purchased Assets are subject to any Liens for Taxes, otherthan Permitted Liens.(d) There are no audits, claims, assessments, levies, administrative orjudicial proceedings
: pending, or to Seller's Knowledge, threatened, proposed or contemplated withrespect to the Purchased Assets by any Taxing Authority.
3.1.14. Nuclear Decommissioning Funds. Seller funds the Nuclear Decommissioning Trust Funds and Additional Decommissioning Funds by making annual deposits to the same, whichdeposits are funded from Seller's revenues derived from the sale of power and energy to its Participants.
Section 3.1.14 of Seller's Disclosure Schedule sets forth the value of each Nuclear Decommissioning Trust Fund as of December 31, 2013. As of Closing, Seller shall have deposited into the NuclearDecommissioning Trust Funds, in accordance with and pursuant to the requirements, terms andconditions set forth in the Nuclear Decommissioning Trust and applicable Law and consistent withcurrent and past practices, all amounts scheduled to be deposited therein from January 1, 2013 through theClosing Date as set forth in the DFA Report dated March 28, 2013 that was filed by Purchaser, on behalfof Seller; with the NRC for the calendar year ending December 31, 2012 (ADAMS Accession NumberML 13091A025).
As of Closing, Seller shall have on deposit in the Additional Decommissioning Fundsaccount $26,000,000 of Additional Decommissioning Funds. The Nuclear Decommissioning Trust Fundsand the Additional Decommissioning Funds are the sole and exclusive trusts, funds or accounts in whichSeller maintains any deposits or reserves for nuclear decommissioning costs, liabilities or expenses.
UntilClosing, Seller shall manage and invest the Nuclear Decommissioning Trust Funds in accordance withand pursuant to the requirements, terms and conditions set forth in the Nuclear Decommissioning Trustand applicable Law and consistent with current and past practices.
3.1.15. Brokers.
All negotiations relative to this Agreement and the transactions contemplated hereby have been carried out by Seller directly with Purchaser without the intervention ofany Person on behalf of Seller in such manner as to give rise to any valid claim by any Person againstPurchaser for a finder's fee, brokerage commission or similar payment.3.1.16. Third Party Rights. There are no contracts or agreements (written or oral) with,or options, commitments or rights in favor of, any Person to directly or indirectly acquire any of thePurchased Assets.3.1.17. Payments.
Seller has not, directly or indirectly, paid or delivered or agreed topay or deliver any fee, commission or other sum of money or item of property, however characterized, toany Person that is in any manner related to Purchased Assets in violation of any Law. Neither Seller, norany officer, director or employee of Seller, has received or, as a result of the consummation of thetransactions contemplated hereby, will receive, any rebate, kickback or other improper or illegal paymentfrom any Person.3.1.18. No Misstatements or Omissions.
No representation or warranty made by Sellerin this Agreement, and no statement contained in any certificate or schedule furnished or to be furnished by Seller pursuant hereto, contains or will contain any untrue statement of a material fact or omits or will19CHAR2\! 573738v10
-X.F.W -,I Z 4 "EXECUTION COPYomit to state a material fact necessary in order to make such representation or warranty or such statement not misleading.
Section 3.2. Representations and Warranties of Purchaser.
Except as specifically set forthin Purchaser's Disclosure Schedule attached hereto as Schedule 3.2, Purchaser hereby represents andwarrants to Seller that all of the statements contained in this Section 3.2 are true and correct as of theEffective Date. Each exception and other response to this Agreement set forth in Purchaser's Disclosure Schedule is identified by reference to, or has been grouped under a heading referring to, a specificindividual section of this Agreement, and, except as otherwise specifically stated with respect to suchexception, relates only to such section.3.2.1. Existence.
Purchaser is a corporation, duly incorporated, validly existing and ingood standing under the Laws of the State of North Carolina.
Purchaser has all requisite corporate powerand authority to own, lease and operate its properties and to carry out its business as it is now beingconducted.
3.2.2. Authority.
Purchaser has full power and authority to execute and deliver thisAgreement and the Transaction Agreements to which it is or will be a party, to perform its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby.
Theexecution and delivery by Purchaser of this Agreement and the Transaction Agreements to which it is orwill be a party, and the performance by Purchaser of its obligations hereunder and thereunder, have beenduly and validly authorized by all required action by Purchaser, and no other action on the part ofPurchaser is necessary.
3.2.3. Binding Agreement.
This Agreement and the Transaction Agreements to whichPurchaser is or will be a party have been, or will be when delivered, duly executed and delivered byPurchaser and, assuming due and valid authorization, execution and delivery thereof by Seller, thisAgreement and the Transaction Agreements to which Purchaser is or will be a party are, or will be whendelivered, valid and binding obligations of Purchaser, enforceable against Purchaser in accordance withtheir terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors' rights generally and (ii) the availability of the remedy of specific performance or injunctive or other formsof equitable relief may be subject to equitable defenses and would be subject to the discretion of the courtbefore which any proceeding therefor may be brought.3.2.4. No Conflicts.
The execution and delivery by Purchaser of this Agreement donot, and the execution and delivery by Purchaser of the Transaction Agreements to which it is or will be aparty, the performance by Purchaser of its obligations under this Agreement and such Transaction Agreements and the consummation of the transactions contemplated hereby and thereby shall not:(a) conflict with or result in a violation or breach of any of the terms,conditions or provisions of Purchaser's articles of incorporation or bylaws;(b) result in a default,
: penalty, or any adjustment in required payments (orgive rise to any right of termination, cancellation or acceleration) under any of the terms, conditions orprovisions of any note, bond, deed of trust, indenture,
: license, agreement, lease or other instrument orobligation to which Purchaser is a party or by which Purchaser or any of its assets and properties may bebound, except for such defaults, penalties or adjustments (or rights of termination, cancellation oracceleration) as to which requisite waivers or consents have been obtained or that would not materially and adversely impact Purchaser's ability to perform its obligations under this Agreement or theTransaction Agreements to which it is or will be a party; or20CHAR2\1573738v10 GGA' '-f-PEN-M-f EXECUTION COPY(c) assuming the Purchaser Required Consents have been obtained, conflictwith or result in a violation or breach of any term or provision of any Law applicable to Purchaser or anyof its assets and properties, except with respect to any violations or breaches that would not materially andadversely impact Purchaser's ability to perform its obligations under this Agreement or the Transaction Agreements to which it is or will be a party.3.2.5. Approvals and Filings.
Except as set forth in Section 3.2.5 of Purchaser's Disclosure Schedule (all items set forth on Section 3.2.5, the "Purchaser Required Consents"),
noconsent, approval or action of, filing with or notice to any Governmental Authority or other Person byPurchaser is required in connection with the execution, delivery and performance by Purchaser of thisAgreement or any of the Transaction Agreements to which it is or will be a party or the consummation byPurchaser of the transactions contemplated hereby or thereby.3.2.6. Legal Proceedings.
There are no claims, actions, proceedings or investigations pending or, to Purchaser's Knowledge, threatened against Purchaser before any Governmental Authority that would reasonably be expected to result in the issuance of an order restraining, enjoining or otherwise prohibiting or making illegal the consummation of the transactions contemplated by this Agreement orany of the Transaction Agreements.
3.2.7. Brokers.
All negotiations relative to this Agreement and the transactions contemplated hereby have been carried out by Purchaser directly with Seller without the intervention ofany Person on behalf of Purchaser in such manner as to give rise to any valid claim by any Person againstSeller for a finder's fee, brokerage commission or similar payment3.2.8. No Misstatements or Omissions.
No representation or warranty made byPurchaser in this Agreement, and no statement contained in any certificate or schedule furnished or to befurnished by Purchaser pursuant hereto, contains or will contain any untrue statement of a material fact oromits or will omit to state a material fact necessary in order to make such representation or warranty orsuch statement not misleading.
ARTICLE IVCOVENANTS Section 4. 1. Efforts to Close. After the Effective Date and prior to Closing:4.1.1. Required Consents:
Other Covenants.
(a) Each Party shall provide reasonable cooperation to the other Parties inobtaining
: consents, approvals or actions of, making all filings with and giving all notices toGovernmental Authorities or other Persons required of the other Party in connection with obtaining anyRequired Consents with respect to the transactions contemplated hereby and by the Transaction Agreements, including the following:
(i) As soon as practicable following the completion of thepreparation of the applicable filing materials and supporting documentation to the satisfaction ofPurchaser, as determined in Purchaser's sole discretion, Purchaser shall file with the FERC alldocuments reasonably required to obtain the FERC 203 Approval, the FERC 205 Approvals andthe FERC Accounting Approval.
Seller shall take all actions reasonably requested by Purchaser 21CHAR2\1573738viO G- ý I P. 4 LEXECUTION COPYto support such filings and any related proceedings, including filing any supporting memoranda or other documents with the FERC related to such filings and any related proceedings; and(ii) As soon as practicable following the Effective Date, Purchaser shall file with the NRC all documents reasonably required to obtain the NRC Approvals.
(b) The Parties shall furnish to each other's counsel such necessary information and assistance as the other Party may request in connection with its preparation of any suchfiling or submission that is necessary to obtain the foregoing
: consents, approvals or actions.
The Partiesshall consult with each other as to the appropriate time of making such filings and submissions and shallmake such filings and submissions at the agreed upon time. The Parties shall keep each other apprisedof the status of any communications with and any inquiries or requests for additional or supplemental information from applicable Governmental Authorities and shall provide any such additional orsupplemental information that may be reasonably requested in connection with any such filings orsubmissions.
4.1.2. Fulfillment of Conditions.
(a) Each Party shall use commercially reasonable efforts to take, or cause tobe taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under Law toconsummate and make effective the purchase, sale, assignment, conveyance, transfer and delivery of thePurchased Assets and the assumption of the Assumed Liabilities pursuant to this Agreement.
Suchactions shall include each Party using its commercially reasonable efforts to ensure satisfaction of theconditions precedent to its obligations hereunder, including, (i) with respect to Purchaser, initiating commercially reasonable efforts to (A) secure passage of the North Carolina Legislation at such timefollowing the Effective Date deemed appropriate by Purchaser (as determined in Purchaser's solediscretion) and (B) procure the NCUC Rate Approvals as soon as practicable following the date the NorthCarolina Legislation is enacted into Law, (ii) with respect to Seller, initiating commercially reasonable efforts to (A) secure passage of the Bond Legislation concurrently with (and in no event before)Purchaser's efforts to secure passage of the North Carolina Legislation and (B) procure theMunicipalities' Consent as soon as practicable following the date the Bond Legislation is enacted intoLaw, and (iii) with respect to Purchaser and Seller, jointly filing with the NCUC all documents reasonably required to obtain the NCUC Approval at such time following the Effective Date deemedappropriate by Purchaser (as determined in Purchaser's sole discretion).
The Parties shall consult on andcoordinate all principal activities, procurement
: efforts, meetings, submissions and filings undertaken ormade, as applicable, by Purchaser and Seller to the North Carolina General Assembly in connection withthe North Carolina Legislation and the Bond Legislation and the NCUC in connection with the NCUCApproval.
In no event shall (x) Purchaser, with respect to the North Carolina Legislation, include in thedraft of such legislation introduced on behalf of Purchaser for approval by the North Carolina GeneralAssembly any subject matter other than that which is necessary, as determined in Purchaser's solediscretion, to (i) make the transactions contemplated by this Agreement economically viable for Purchaser and Purchaser's stakeholders or (ii) otherwise facilitate the consummation of the transactions contemplated by this Agreement, or (y) Seller, with respect to the Bond Legislation, include in the draft ofsuch legislation introduced on behalf of Seller for approval by the North Carolina General Assembly anysubject matter other than that which is necessary, as determined in Seller's sole discretion, to (i) permitSeller to issue bonds to refinance existing Indebtedness of Seller outstanding under the Bond Resolution and attributable to the Seller's Interest that cannot be repaid (or its payment provided for) with thatportion of the Purchase Price described in Section 2.2.1(a) of this Agreement or other funds available toSeller or (ii) otherwise facilitate the consummation of the transactions contemplated by this Agreement.
Neither Purchaser nor Seller shall be deemed to have violated their respective covenants set forth in theimmediately preceding sentence in the event that, during the legislative
: process, any other Person (other22CHAR2\1573738vl0 CVAWD_,ýý T-M-EEXECUTION COPYthan on behalf of Purchaser or Seller) introduces additional subject matter or material beyond thatdescribed in the immediately preceding sentence to the North Carolina Legislation or the BondLegislation, as applicable.
(b) Each Party shall give notice to the other promptly after becoming awareof (i) the occurrence or non-occurrence of any event whose occurrence or nonoccurrence would be likelyto cause any representation or warranty contained in this Agreement to be untrue or inaccurate in anymaterial respect at any time from the Effective Date hereof to the Closing Date and (ii) any failure of aParty to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied byit hereunder.
Section 4.2. Preservation of Purchased Assets.(a) After the Effective Date and prior to Closing, (i) Seller shall preserve andmaintain those of the Purchased Assets described in Sections 2.1.1(c) and (f); and (ii) Seller shall fulfillits obligations under the Plants Agreements in the usual and ordinary course of business.
(b) After the Effective Date and prior to Closing Seller shall, and shall causeits Related Persons (including ElectriCities and any of ElectriCities' Related Persons) to, (i) continue tooperate its business and affairs in the ordinary course of business, consistent with past practices, including maintaining the Nuclear Decommissioning Trusts as required by the applicable trust documentation ineffect as of the Effective Date and otherwise consistent with all Laws and (ii) contribute all necessary funds to the Additional Decommissioning Funds, and take all other actions necessary in connection therewith, to cause there to be $26,000,000 of Additional Decommissioning Funds as of Closing.(c) Except to the extent expressly contemplated by this Agreement, withoutthe prior written consent of Purchaser (which Purchaser may withhold in its sole discretion),
after theEffective Date and prior to Closing, Seller shall not, and shall cause its Related Persons (including ElectriCities and any of ElectriCities' Related Persons) not to: (i) distribute,
: disburse, dispose of, sell,lease, transfer, pledge, assign or encumber, or incur or permit to exist any Lien (other than a Permitted Lien) on, any of the Purchased Assets, including (A) any disbursements of funds from the NuclearDecommissioning Trusts or (B) any disbursement of Additional Decommissioning Funds that wouldresult in there being less than $26,000,000 of Additional Decommissioning Funds as of Closing; (ii)amend its certificate of incorporation, bylaws or any other documents or instruments relating to theoperation, governance, management or creation of Seller; (iii) take any action that alters the regulatory status of Seller or the Purchased Assets; (iv) take any action that could result in a loss, in whole or in part,of the authority of Seller's Board of Directors, or fail to take any action that could prevent any such lossof authority, to (A) legally bind Seller and (B) take all actions necessary or desirable on behalf of Seller toconsummate the transactions contemplated by this Agreement; (v) take any action that adversely affectsthe Purchased Assets or impairs the ability of the Parties to consummate the transactions contemplated bythis Agreement, or fail to take any action that could prevent the same; (vi) enter into any agreement orcommitment to do or engage in any of the foregoing; or (vii) enter into any discussions or negotiations with any Person (other than Purchaser and its Related Persons) or provide any information to any Person(other than Purchaser and its Related Persons) in furtherance of any of the foregoing.
Section 4.3. Notification.
Seller shall update, amend, modify or add additional sections toSeller's Disclosure
: Schedule, as applicable (each, a "Disclosure Update")
between the Effective Date andthe Closing Date (the "Update Period")
to reflect any (a) matter, fact, circumstance or event first arisingafter the Effective Date that, if had it existed on the Effective Date, would have been required to be setforth in Seller's Disclosure Schedule as of the Effective Date, or (b) any matter, fact, circumstance orevent becoming known to Seller during the Update Period that arose prior to the Effective Date that was23CHAR2\ 1573738vl0 EXECUTION COPYrequired to be set forth in Seller's Disclosure Schedule as of the Effective Date but was omitted (eachitem identified pursuant to this clause (b), a "Pre-Execution Update").
Such Disclosure Update shall be inthe form of an amendment or supplement to Seller's Disclosure Schedule specifying the section orsections of Seller's Disclosure Schedule to be updated thereby.
If any Disclosure Update, standing on itsown or taken together with any prior Disclosure
: Updates, discloses any matter, fact, circumstance orevent that constitutes a material breach or inaccuracy of any representation or warranty of Seller, thenPurchaser may terminate this Agreement if (x) Purchaser delivers written notice of termination to Sellernot later than thirty (30) days following Purchaser's receipt of the Disclosure Update, and (y) Seller failsto cure such material breach or inaccuracy within thirty (30) following Seller's receipt of such termination notice from Purchaser, with the effective date of termination being the expiration of such thirty (30) daycure period. If Purchaser does not, in the case of any such Disclosure Update that give Purchaser theright to terminate the Agreement as set forth in the immediately preceding
: sentence, deliver any suchwritten notice of termination to Seller within such thirty (30) day period, Purchaser shall be deemed tohave forever waived its right to terminate this Agreement pursuant to Section 6.1(b) solely with respect tosuch Disclosure Update. If the Closing occurs, then with respect to any Pre-Execution Update, therepresentations and warranties of Seller contained in Article III shall not be deemed to have beenqualified by such Pre-Execution Update, and the information contained in such Pre-Execution Updateshall not be deemed to have cured any breach of any such representation or warranty contained in ArticleIII, and Purchaser shall have the right to seek indemnification from Seller for any Losses arising out of orresulting from such breach in accordance with Article VII.Section 4.4. Tax Matters.(a) Notwithstanding any other provision of this Agreement, all applicable sales, transfer, use, stamp, conveyance, value added, excise, and other similar Taxes, if any, and othersimilar costs of Closing, that may be imposed upon, or payable, collectible or incurred in connection with the transfer of the Purchased Assets to Purchaser or otherwise as a result of the transfer of thePurchased Assets ("Transfer Taxes") shall be borne solely by Seller; provided,
: however, that allrecording or filing fees payable in connection with the recording or filing of the transfer of record of thePurchased Assets to Purchaser in the appropriate public registries shall be paid by Purchaser.
Seller, atits own expense, will file, to the extent required by applicable Law, all necessary Tax Returns and otherdocumentation with respect to all such Transfer Taxes, and if required by applicable Law, Purchaser will join in the execution of any such Tax Returns or other documentation.
(b) With respect to Taxes to be prorated in accordance with Section 2.2.2,Purchaser shall prepare and timely file all Tax Returns required to be filed after the Closing with respectto the Purchased Assets, if any, and shall duly and timely pay all such Taxes shown to be due on such TaxReturns.
Purchaser's preparation of any such Tax Returns that are material shall be subject to Seller'sapproval, which shall not be unreasonably
: withheld, conditioned or delayed.
Purchaser shall make suchTax Returns available for Seller's review and approval not later than 15 Business Days prior to the duedate for filing such Tax Return and shall make such changes as are reasonably requested by Seller.Within 10 Business Days after Purchaser's payment of such Taxes, Seller shall pay to Purchaser, orPurchaser shall pay to Seller, as appropriate, the difference between (i) Seller's proportionate share of theamount shown as due on such Tax Return determined in accordance with Section 2.2.2 and (ii) theamount paid by Seller at the Closing Date pursuant to Section 2.2.2.(c) Seller and Purchaser shall provide the other with such assistance as mayreasonably be requested in connection with the preparation of any Tax Return, any audit or otherexamination by any Taxing Authority, or any judicial or administrative proceedings relating to Liability for Taxes, and each will retain and provide the requesting Party with any records or information that maybe relevant to such return, audit, or examination, proceedings or determination.
Any information obtainedpursuant to this Section 4.4 or pursuant to any other Section hereof providing for the sharing of24CHAR2\1573738v10
-_P -I-r-1. _9 EA M 4 _fEXECUTION COPYinformation or review of any Tax Return or other schedule relating to Taxes shall be kept confidential bythe Parties.(d) Purchaser shall remit to Seller any refund or credit of Taxes, if and whenactually received by Purchaser, to the extent such Taxes are attributable to any taxable period, or portionthereof, ending on or before the Closing Date and were paid by Seller to the applicable Taxing Authority or to Purchaser pursuant to this Agreement.
(e) Any payment by Purchaser or Seller to the other pursuant to this Section4.4 shall be treated for all purposes by both Parties as an adjustment to the Purchase Price, to themaximum extent permitted by Law.(f) In the event that a dispute arises between Seller and Purchaser regarding Taxes or any amount due under this Section 4.4, the Parties shall attempt in good faith to resolve suchdispute and any agreed upon amount shall be paid to the appropriate Party. If such dispute is not resolvedwithin 30 days, the Parties shall submit the dispute to the Independent Accounting Firm for resolution within 30 days thereafter, which resolution shall be final, conclusive and binding on the Parties.Notwithstanding anything in this Agreement to the contrary, the fees and expenses of the Independent Accounting Firm in resolving the dispute shall be borne by Purchaser, on the one hand, and Seller, on theother hand, in inverse proportion as they may prevail on matters resolved by the Independent Accounting Firm, which proportionate allocations shall also be determined by the Independent Accounting Firm at thetime its determination on the merits of the matters submitted is rendered.
Any payment required to bemade as a result of the resolution of the dispute by the Independent Accounting Firm shall be made within10 days after such resolution as required for the applicable Tax.Section 4.5. Access to Information.
From the Effective Date until the Closing, Seller shallafford to Purchaser and its Related Persons, reasonable access to all their respective books, contracts, commitments, personnel,
: records, properties, offices and other facilities related to the Purchased Assetsand, during such period, Seller shall furnish promptly to Purchaser all available information concerning the Purchased Assets as Purchaser may reasonably request; provided however that any suchinvestigation shall be conducted during normal business hours upon reasonable advance notice to Seller,under the supervision of Seller's personnel (to the extent such investigation is conducted on the premisesof Seller) and in such a manner as not to materially interfere with the normal operations of Seller;provided, f that Seller may withhold (a) any document or information if not doing so would resultin a loss of the ability to successfully assert the attorney-client privilege, provided that in each case Sellershall use commercially reasonable efforts to disclose the pertinent information contained therein in amanner so that such privilege is maintained or (b) such portions of documents or information relating tomatters that are highly sensitive if the exchange of such documents (or portions thereof) or information, as determined by Seller's outside counsel, would reasonably be expected to result in violation of antitrust Laws, provided that Seller has used reasonable efforts to maximize the delivery of such information.
Section 4.6. Spare Parts Inventory.
From the Effective Date until the Closing, Purchaser shall maintain inventory levels of spare parts of the Plants and any related support facilities, including equipment, tools, goods and supplies, in the ordinary course of business, and shall not engage in anyadverse distinction or undue discrimination against the Plants, including, but not limited to, the build-upof Spare Parts Inventory to levels that are not consistent with practices at other generating facilities ownedand operated by Purchaser.
Section 4.7. PE Pension Plan. Purchaser maintains the Progress Energy Pension Plan (the"PE Pension Plan"), which provides retirement benefits to certain current and former employees of thePlants. Seller is obligated under the OFA to pay its properly allocable ownership portion of certain costs25CHAR2\1573738vI0 GOAWD EN7lE T143bEXECUTION COPYassociated with operating, administering and funding the PE Pension Plan, including, but not limited to,Service Costs and benefit funding expenses.
(a) From the Effective Date through the Closing Date, Seller shall, inaccordance with the OFA, pay Purchaser the lesser of (i) its properly allocable ownership portion of theService Costs, or (ii) Seller's properly allocable ownership portion of the actual contributions made to thePE Pension Plan by Purchaser.
(b) In the event that on the last day of the plan year immediately preceding the Closing Date the PE Pension Plan's funding status, as determined by the actuarial report performed for the PE Pension Plan for that plan year by the PE Pension Plan's independent actuarial consultants, in amanner consistent with past practices, was below 100%, the Seller shall, within thirty (30) days prior tothe Closing Date, pay Purchaser an amount equal to Seller's properly allocable ownership portion of theaggregate contribution required to return the PE Pension Plan to 100% funded status as of the last day ofthe plan year preceding the Closing Date (such amount, the "Catch-Up Pension Contribution").
Notwithstanding the foregoing, in the event that the actuarial report for the plan year immediately preceding the Closing Date is incomplete as of the Closing Date, Seller shall pay Purchaser Seller'sCatch-Up Pension Contribution within thirty (30) days following receipt of written notice from Purchaser of the actuarial report's finding with respect to the applicable year end funding level and an assessment ofSeller's properly allocable ownership portion of contributions required to return the PE Pension Plan to100% funded status.(c) In the event that this Agreement is terminated in accordance withSection 6.1, Seller shall, within thirty (30) days of the termination, pay Purchaser an amount equal to (x)Seller's properly allocable ownership portion of all PE Pension Plan expenses pursuant to the OFA minus(y) amounts actually paid in accordance with Section 4.7(a) above.ARTICLE VCONDITIONS TO CLOSINGSection 5.1. Purchaser's Conditions Precedent.
The obligations of Purchaser hereunder toexecute or deliver the items it is required to deliver pursuant to Section 2.4.1(a) are subject to thefulfillment, at or before the Closing, of each of the following conditions (all or any of which may bewaived in whole or in part by Purchaser in its sole discretion):
5.1.1. Representations and Warranties.
Each of the representations and warranties made by Seller in this Agreement that are qualified as to materiality or Material Adverse Effect shall betrue and correct on and as of the Closing Date as though made on and as of the Closing Date. Each ofthe representations and warranties made by Seller in this Agreement that are not qualified as tomateriality or Material Adverse Effect shall be true and correct in all material respects on and as of theClosing Date as though made on and as of the Closing Date.5.1.2. Performance.
Seller shall have performed and complied with the agreements, covenants and obligations required by this Agreement to be so performed or complied with by Seller at orbefore the Closing Date.5.1.3. Law. There shall not be in effect at the Closing Date any preliminary orpermanent injunction or other order or decree by any federal or state court which prevents theconsummation of the transactions contemplated by this Agreement or any Law restraining, enjoining orotherwise prohibiting or making illegal the consummation of the transactions contemplated by thisAgreement.
26CHAR2\! 573738v10 4-fEXECUTION COPY5.1.4. NCUC Approval.
The NCUC Approval shall have been duly obtained and be infull force and effect, shall not have been reversed, stayed, enjoined, set aside, annulled or suspended, andshall not have imposed or required any condition or modification unacceptable to Purchaser.
5.1.5. FERC 203 Approval.
The FERC 203 Approval shall have been duly obtainedand be in full force and effect, shall not have been reversed, stayed, enjoined, set aside, annulled orsuspended, and shall not have imposed or required any condition or modification unacceptable toPurchaser.
5.1.6. FERC 205 Approvals.
The FERC 205 Approvals shall have been duly obtainedand be in full force and effect, shall not have been reversed, stayed, enjoined, set aside, annulled orsuspended, and shall not have imposed or required any condition or modification unacceptable toPurchaser.
5.1.7. FERC Accounting Approval.
The FERC Accounting Approval shall have beenduly obtained and be in full force and effect, shall not have been reversed, stayed, enjoined, set aside,annulled or suspended, and shall not have imposed or required any condition or modification unacceptable to Purchaser.
5.1.8. NRC Approvals.
The NRC Approvals shall have been duly obtained and be infull force and effect, shall not have been reversed, stayed, enjoined, set aside, annulled or suspended, andshall not have imposed or required any condition or modification unacceptable to Purchaser.
5.1.9. Required Consents.
Purchaser shall have received evidence reasonably satisfactory to Purchaser that, in addition to the NCUC Approvals, the FERC 203 Approval, the FERC205 Approvals, the FERC Accounting Approval and the NRC Approvals, all other Required Consentshave been duly obtained and are in full force and effect, shall not have been reversed, stayed, enjoined, setaside, annulled or suspended, and shall not have imposed or required any condition or modification unacceptable to Purchaser.
5.1.10. Plant Permits.
Purchaser shall have received evidence reasonably satisfactory toPurchaser that all Plant Permits have, or promptly following Closing will be, transferred to Purchaser without any condition or modification thereof unacceptable to Purchaser.
5.1.11. Municipalities' Consent.
The Municipalities' Consent shall have been dulyobtained and be in full force and effect, shall not have been reversed, stayed, enjoined, set aside, annulledor suspended, and shall not have imposed or required any condition or modification unacceptable toPurchaser.
5.1.12. State Rate Approvals.
The North Carolina Legislation, the NCUC RateApprovals, the South Carolina Legislation and the PSCSC Rate Approvals shall each have been procuredand remain in full force and effect and shall not have been reversed, stayed, enjoined, set aside, annulledor suspended, and shall not have imposed or required any condition or modification unacceptable toPurchaser.
5.1.13. Full Requirements Power Sales Agreements.
Each Participant shall have enteredinto a Full Requirements Power Sales Agreement (each, a "Full Requirements Power Sales Agreement"),
incorporating the terms and conditions stipulated or required in the Full Requirements Power PurchaseAgreement and otherwise in form and substance reasonable satisfactory to Purchaser, pursuant to whichSeller agrees to sell to each such Participant and each such Participant agrees to purchase from Seller,27CHAR2\1573738vI0
--4 D H -W 4 EEXECUTION COPYsuch Participant's full requirements bulk power supply, and no such Full Requirements Power SalesAgreement shall have been modified, amended or changed in a manner unacceptable to Purchaser.
5.1.14. Debt Service Support Contracts.
Each Participant shall have entered into a DebtService Support Contract (each, a "Debt Service Support Contract"),
pursuant to which Seller agrees toissue bonds to refinance Seller's existing Indebtedness outstanding under the Bond Resolution andattributable to the Seller's Interest and each Participant agrees to fix, charge and collect rates, fees andcharges for service to the customers of its electric system at least sufficient to provide revenues adequateto meet its obligations under the Debt Service Support Contract and the Full Requirements Power SalesAgreement.
5.1.15. Full Requirements Power Purchase Agreement.
The Full Requirements PowerPurchase Agreement shall have been executed by each of Purchaser and Seller, and the term of the FullRequirements Power Purchase Agreement shall not have expired or otherwise been validly terminated thereunder (nor shall notice of any such termination have been issued by either Purchaser or Seller inaccordance with the terms thereof).
5.1.16. Deliveries.
Seller shall have executed and delivered to Purchaser the items setforth in Section 2.4.1(b).
5.1.17. Condition of Plants. There shall not have been or occurred, since the Effective Date, any material damage, destruction or loss (whether or not covered by insurance) with respect to anyof the Plants, including all real and personal property constituting all or a part of the same.5.1.18. Seller's Indebtedness.
Contingent only upon the disbursement of that portion ofthe Purchase Price described in Section 2.2.1(a) to the Escrow Deposit and/or Refunding Trust Fundpursuant to the Disbursement Instructions, all of Seller's Indebtedness outstanding under the BondResolution and attributable to the Seller's Interest shall have been fully defeased and is no longeroutstanding under the Bond Resolution.
5.1.19. Material Adverse Effect. There shall not have been or occurred, since theEffective Date, any event, occurrence or circumstance that would reasonably be expected to result in orgive rise to a Material Adverse Effect.Section 5.2. Seller's Conditions Precedent.
The obligations of Seller hereunder to executeor deliver the items it is required to deliver pursuant to Section 2.4.1(b) are subject to the fulfillment, ator before the Closing, of each of the following conditions (all or any of which may be waived in wholeor in part by Seller in its sole discretion):
5.2.1. Representations and Warranties.
Each of the representations and warranties made by Purchaser in this Agreement that are qualified by materiality or Material Adverse Effect shall betrue and correct on and as of the Closing Date as though made on and as of the Closing Date. Each of therepresentations and warranties made by Purchaser in this Agreement that are not qualified by materiality or Material Adverse Effect shall be true and correct in all material respects on and as of the Closing Dateas though made on and as of the Closing Date.5.2.2. Performance.
Purchaser shall have performed and complied with the agreements, covenants and obligations required by this Agreement to be so performed or complied with by Purchaser at or before the Closing Date.28CHAR2\1573738v10 G_ A QAK 4-KEXECUTION COPY5.2.3. Law. There shall not be in effect at the Closing Date any preliminary orpermanent injunction or other order or decree by any federal or state court which prevents theconsummation of the transactions contemplated by this Agreement or any Law restraining, enjoining orotherwise prohibiting or making illegal the consummation of the transactions contemplated by thisAgreement.
5.2.4. NRC Approvals.
The NRC Approvals shall have been duly obtained and be infull force and effect and shall not have been reversed, stayed, enjoined, set aside, annulled or suspended.
5.2.5. Bond Legislation.
The Bond Legislation shall have been enacted into Law andremain in full force and effect without amendment or modification unacceptable to Seller.5.2.6. Municipalities' Consent.
The Municipalities' Consent shall have been dulyobtained and be in full force and effect, shall not have been reversed, stayed, enjoined, set aside, annulledor suspended.
5.2.7. Full Requirements Power Sales Agreements.
Each Participant shall have enteredinto a new Full Requirements Power Sales Agreement, incorporating the terms and conditions stipulated or required in the Full Requirements Power Purchase Agreement and otherwise in form and substance reasonable satisfactory to Seller, pursuant to which Seller agrees to sell to each such Participant and eachsuch Participant agrees to purchase from Seller, such Participant's all-requirements bulk power supply,and no such Full Requirements Power Sales Agreement shall have been modified, amended or changed ina manner unacceptable to Seller.5.2.8. Debt Service Support Contract.
Each Participant shall have entered into a DebtService Support Contract pursuant to which Seller agrees to issue bonds to refinance Seller's existingIndebtedness outstanding under the Bond Resolution and attributable to the Seller's Interest and eachParticipant agrees to fix, charge and collect rates, fees and charges for service to the customers of itselectric system at least sufficient to provide revenues adequate to meet its obligations under the DebtService Support Contract and the Full Requirements Power Sales Agreement.
5.2.9. Full Requirements Power Purchase Agreement.
The Full Requirements PowerPurchase Agreement shall have been executed by each of Purchaser and Seller, and the term of the FullRequirements Power Purchase Agreement shall not have expired or otherwise been validly terminated thereunder (nor shall notice of any such termination have been issued by either Purchaser or Seller inaccordance with the terms thereof).
5.2.10. Deliveries.
Purchaser shall have executed and delivered to Seller the items setforth in Section 2.4.1(a).
5.2.11. Seller's Indebtedness.
Contingent only upon the disbursement of that portion ofthe Purchase Price described in Section 2.2.1(a) to the Escrow Deposit and/or Refunding Trust Fundpursuant to the Disbursement Instructions, all of Seller's Indebtedness outstanding under the BondResolution and attributable to the Seller's Interest shall have been fully defeased and is no longeroutstanding under the Bond Resolution 5.2.12. Material Adverse Effect. There shall not have been or occurred, since theEffective Date, any event, occurrence or circumstance that would reasonably be expected to result in orgive rise to a material adverse effect with respect to Purchaser's ability (a) to consummate the transactions contemplated by this Agreement or (b) perform its obligations under the Full Requirements PowerPurchase Agreement in all material respects.
29CHAR2\1573738v10 G-I.P.- '.A414LEXECUTION COPYARTICLE VITERMINATION Section 6.1. Termination Prior to Closing.
This Agreement may be terminated, and thetransactions contemplated hereby may be abandoned:
(a) at any time before the Closing, by Seller or Purchaser upon notice to theother, in the event that any Law becomes effective restraining, enjoining, or otherwise prohibiting ormaking illegal the consummation of the transactions contemplated by this Agreement; (b) at any time before the Closing, by Seller or Purchaser upon notice to theother, in the event (i) of a breach hereof by the non-terminating Party (or Parties, as applicable) thatwould reasonably be expected to give rise to a Material Adverse Effect, if the non-terminating Party (orParties, as applicable) fails to cure such breach within 30 days following notification thereof by theterminating Party (or Parties, as applicable);
or (ii) any condition to such Party's (or Parties',
asapplicable) obligations under this Agreement (other than the payment of money hereunder) becomesimpossible or impracticable to satisfy with the use of commercially reasonable
: efforts, so long as suchimpossibility or impracticability is not caused by a breach hereof by such Party (or Parties, as applicable);
(c) at any time before the Closing, by Purchaser in accordance with Section4.3;(d) by Purchaser upon written notice to Seller at any time following the datethat falls 3 months after the date that the Bond Legislation is enacted into Law (the "Municipalities' Consent Outside Date"), if the Municipalities' Consent is not obtained on or prior to the Municipalities' Consent Outside Date; or(e) at any time following December 31, 2016 (the "Outside Date"), by Selleror Purchaser upon notice to the other if the Closing shall not have occurred on or before such date andsuch failure to consummate is not caused by a breach of this Agreement by the terminating Party,provided,
: however, that the Outside Date may be extended by mutual written agreement of the Parties.Section 6.2. Effect of Termination or Breach Prior to Closing.
If this Agreement isvalidly terminated pursuant to Section 6.1, this Agreement shall terminate and the transactions contemplated hereby shall be abandoned without further action by the Parties hereto. If the Agreement is validly terminated as provided herein, (a) there shall be no liability or obligation on the part of Selleror Purchaser, except that the provisions of ARTICLE VII and this Section 6.2 shall continue to applyfollowing any such termination, and (b) all filings, applications and other submissions made pursuant tothis Agreement, to the extent practicable, shall be withdrawn from the Governmental Authority or otherPerson to which they were made. Notwithstanding any other provision in this Agreement to thecontrary, if this Agreement is validly terminated by Purchaser or Seller pursuant to Section 6.1(b)(i) orby Purchaser pursuant to Section 6.1(c), then the terminating Party may exercise such remedies as maybe available at law or in equity with respect to the breach precipitating such termination.
ARTICLE VIISURVIVAL; INDEMNIFICATION Section 7.1. Survival.
The representations and warranties of Seller and Purchaser contained in this Agreement shall survive the Closing and shall expire on the date that is three (3) years after the30CHAR2\1573738vt0
-AT1FYrETTT7A, EXECUTION COPYClosing Date. Notwithstanding the preceding
: sentence, the representations and warranties contained inSections 3.1.1, 3.1.2, 3.1.3, 3.1.8, 3.1.9, 3.1.12, 3.1.13, 3.1.14, 3.2.1, 3.2.2, and 3.23 and therepresentations and warranties set forth in the Deeds shall survive indefinitely after the Closing.
Thecovenants and agreements of the Parties contained in ARTICLES II, IV, VII and VIII of this Agreement shall survive the Closing for (i) the time period(s) set forth in the respective Sections contained in suchArticles, or (ii) if no time period is so specified, until 90 days after the expiration of the applicable statuteof limitations.
Section 7.2. Seller Indemnification.
Seller shall indemnify, reimburse and hold harmlessPurchaser and each of its Affiliates and its and their respective directors,
: officers, employees, successors and assigns (each, including Purchaser, a "Purchaser Indemnified Person")
from and against any and allLiabilities, claims, demands, assessments, judgments, orders, decrees,
: actions, cause of actions,litigations, suits, investigations or other proceedings or damages, costs (including operating costs) orexpenses (including reasonable attorney fees and operating expenses)
(collectively, "Losses")
that anysuch Purchaser Indemnified Person incurs, suffers or becomes liable for from and after the Closing as aresult of (a) the inaccuracy or breach of any representation or warranty of Seller contained in thisAgreement, (b) the breach of any covenant or agreement of Seller contained in this Agreement, or (c) anyExcluded Liability.
Section 7.3. Purchaser Indemnification.
Purchaser agrees that it shall indemnify, reimburse and hold harmless Seller and each of its Affiliates and their respective directors, commissioners,
: officers, employees, agents, successors and assigns (each, including Seller, a "Seller Indemnified Person")
fromand against any and all Losses that any such Seller Indemnified Person incurs, suffers or becomes liablefor from and after the Closing as a result of (a) the inaccuracy or breach of any representation or warrantyof Purchaser contained in this Agreement, (b) the breach of any covenant or agreement of the Purchaser contained in this Agreement, or (c) any Assumed Liability, except to the extent Losses resulting from anyAssumed Liability are related to the inaccuracy or breach of any representation or warranty of Sellercontained in this Agreement.
ARTICLE VIHMISCELLANEOUS Section 8.1. Dispute Resolution.
Any dispute or claim arising under this Agreement that isnot resolved in the ordinary course of business shall be referred to a panel consisting of a senior executive of Purchaser (President or a Vice President) and Seller (Chief Executive Officer or member of Executive Management),
with authority to decide or resolve the matter in dispute, for review and resolution.
Suchsenior executives shall meet and in good faith attempt to resolve the dispute within 30 days. If the Partiesare unable to resolve a dispute pursuant to this Section 8.1, either Party may enforce its rights under thisAgreement at law or in equity subject to the provisions of this Agreement, including Section 8.2.Section 8.2. Governin, Law: Submission to Jurisdiction.
THIS AGREEMENT SHALLBE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OFNORTH CAROLINA APPLICABLE TO A CONTRACT EXECUTED AND PERFORMED IN SUCHSTATE, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.Each Party hereto irrevocably submits to the exclusive jurisdiction of the General Court of Justice,Superior Court Division, Wake County, North Carolina and, if applicable, the United States DistrictCourt, Eastern District of North Carolina, Raleigh Division, for the purposes of any action arising out ofor based upon this Agreement or relating to the subject matter hereof. Each Party hereto further agreesthat service of any process,
: summons, notice or document by U.S. registered mail to such Party's31CHAR2\1573738vI0
__ ýýr_G ýF'q A 11CIY~T~Y1W&~rA!EXECUTION COPYrespective address set forth in Section 8.4 shall be effective service of process for any action, suit orproceeding with respect to any matters to which it has submitted to jurisdiction in this Section 8.2. EachParty hereto irrevocably and unconditionally waives any objection to the laying of venue of any action,suit or proceeding in the federal or states courts set forth in this Section 8.2, and hereby furtherirrevocably and unconditionally waives and agrees not to plead or claim in any such court that any suchaction, suit or proceeding brought in any such court has been brought in an inconvenient forum.Section 8.3. Specific Performance.
EACH PARTY AGREES THAT DAMAGEREMEDIES SET FORTH IN THIS AGREEMENT MAY BE DIFFICULT OR IMPOSSIBLE TOCALCULATE OR OTHERWISE INADEQUATE TO PROTECT ITS INTERESTS AND THATIRREPARABLE DAMAGE MAY OCCUR IN THE EVENT THAT PROVISIONS OF THISAGREEMENT ARE NOT PERFORMED BY THE PARTIES IN ACCORDANCE WITH THESPECIFIC TERMS OF THIS AGREEMENT.
ANY PARTY MAY SEEK TO REQUIRE THEPERFORMANCE OF ANY OTHER PARTY'S OBLIGATIONS UNDER THIS AGREEMENT THROUGH AN ORDER OF SPECIFIC PERFORMANCE RENDERED BY A COURT OFCOMPETENT JURISDICTION AS PROVIDED IN SECTION 8.2.Section 8.4. Notices.8.4.1. All notices,
: requests, claims, demands and other communications under thisAgreement shall be in writing and shall be deemed given upon receipt by the applicable Party at thefollowing addresses (or at such other address for a party as shall be specified by like notice):If to Purchaser, to:Duke Energy Progress, Inc.411 Fayetteville StreetRaleigh, NC 27601Email: harold.JamesPduke-energy.com Attn: Harold James, Jr. -Vice President Wholesale Powerwith copies to:Duke Energy Progress, Inc.550 South Tryon Street, 45h' FloorCharlotte, NC 28202Attn: Greer MendelowEmail: Greer.Mendelow@duke-energy.com Facsimile:
(980) 373-9962Moore & Van Allen PLLCBank of America Corporate Center100 N. Tryon StreetSuite 4700Charlotte, North Carolina 28202-4003 Attn: Stephen D. Hope and Rob RustEmail: stevehope@mvalaw.com; robrust@mvalaw.com Facsimile:
(704) 378-2036 and (704) 339-5864If to Seller, to:32CHAR2\1573738vt0
-AV.- A~TMY fEXECUTION COPYNorth Carolina Eastern Municipal Power Agency1427 Meadow Wood Boulevard
: Raleigh, North Carolina 27604Attn: Roy Jones -Chief Operating OfficerEmail: riones@electricities.org with a copies to:North Carolina Eastern Municipal Power Agency1427 Meadow Wood Boulevard
: Raleigh, North Carolina 27604Attn: David Barnes -Chief Legal and Ethics OfficerEmail: dbarnes@electricities.org Poyner Spruill LLP130 South Franklin StreetRocky Mount, North Carolina 27804Attn: Michael S. ColoEmail: mscolo@poynerspruill.com Section 8.5. Entire Agreement.
This Agreement and the Transaction Agreements supersede all prior discussions and agreements between the Parties with respect to the subject matter hereof andthereof, including, in each case, all schedules and exhibits
: thereto, and contain the sole and entireagreement between the Parties hereto with respect to the subject matter hereof and thereof.Section 8.6. Expenses.
Except as otherwise expressly provided in this Agreement, whetheror not the transactions contemplated hereby are consummated, each Party will pay its own costs andexpenses incurred in connection with the negotiation, execution and performance under this Agreement and the Transaction Agreements and the transactions contemplated hereby and thereby.Section 8.7. Public Announcements.
Any public announcement or similar publicity withrespect to this Agreement or the transactions contemplated hereby will be issued, if at all, at such time andin such manner as mutually agreed to by Seller and Purchaser.
Notwithstanding the foregoing, no Partyshall be prohibited from making, issuing or releasing any announcements, statements oracknowledgments that such party customarily issues in connection with acquisition or sale transactions oris required to make, issue or release by applicable Law or by any listing agreement with or listing rules ofa securities exchange or trading market inter-dealer quotation system; provided however that, in the caseof any press release or other similar written statement, the other Party has been afforded at least 3Business Days to review and comment on such written material.
Section 8.8. Confidentiality.
Each Party hereto will hold, and will use commercially reasonable efforts to cause its Related Persons to hold, in strict confidence from any Person (other thanany such Related Persons),
this Agreement, the Transaction Agreements and all documents andinformation concerning the other Party or any of its Related Persons furnished to it by the other Party orsuch other Party's Related Persons in connection with this Agreement or the transactions contemplated hereby, unless (a) compelled to disclose by judicial or administrative process (including in connection with obtaining the necessary approvals of this Agreement and the transactions contemplated hereby ofGovernmental Authorities),
or by other requirements of Law, including without limitation, the NorthCarolina Public Records law, or by any listing agreement with or listing rules of a securities exchange ortrading market inter-dealer quotation system or necessary or desirable to disclose in order to obtain theRequired
: Consents, or (b) disclosed in an action or proceeding brought by a Party hereto in pursuit of its33CHAR2\1573738vI0 Q)AWDERA 7-K. 4 FEXECUTION COPYrights or in the exercise of its remedies hereunder, except to the extent that such documents or information can be shown to have been (x) previously known by the Party receiving such documents or information, (y) in the public domain (either prior to or after the furnishing of such documents or information hereunder) through no fault of such receiving Party or (z) later acquired by the receiving Party fromanother source if the receiving Party is not aware that such source is under an obligation to another Partyhereto to keep such documents and information confidential.
In the event the transactions contemplated hereby are not consummated, upon the request of the other Party, each Party hereto will, and will usecommercially reasonable efforts to cause its Related Persons to, promptly (and in no event later than five(5) Business Days after such request) destroy or cause to be destroyed all copies of confidential documents and information furnished by the other Party in connection with this Agreement or thetransactions contemplated hereby and destroy or cause to be destroyed all notes, memoranda, summaries,
: analyses, compilations and other writings related thereto or based thereon prepared by the Party furnished such documents and information or its Related Persons;
: provided, however, that (i) outside legal counselfor each Party may retain one copy of confidential documents and information furnished by the otherParty, (ii) each Party and its Related Persons may retain any materials that are required to be maintained pursuant to Law or such Party or Related Person's compliance or regulatory policies or procedures, including any documents presented to a board of directors or transaction review committee and (iii) eachParty and its Related Persons may retain any system back-up media such as copies of any electronic records or files created pursuant to automatic archiving or back-up procedures, provided that allconfidential documents and information retained pursuant to (i), (ii) or (iii) shall continue to be held instrict confidence in accordance with the confidentiality provisions herein. The obligations contained inthis Section 8.8 shall survive until the first to occur of Closing or, if this Agreement is terminated pursuant to ARTICLE VI, one year following the termination of this Agreement.
Section 8.9. Waivers.8.9.1. Grant of Waivers.
Any term or condition of this Agreement may be waived atany time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless setforth in a written instrument duly executed by or on behalf of the Party waiving such term or condition.
No waiver by any Party of any term or condition of this Agreement, in any one or more instances, shall bedeemed to be or construed as a waiver of the same or any other term or condition of this Agreement onany future occasion.
All remedies, either under this Agreement or by Law or otherwise
: afforded, will becumulative and not alternative.
8.9.2. Exercise of Remedies.
No failure or delay of any Party, in any one or moreinstances, (1) in exercising any power, right or remedy (other than failure or unreasonable delay ingiving notice of default) under this Agreement or (ii) in insisting upon the strict performance by theother Party of such other Party's covenants, obligations or agreements under this Agreement, shalloperate as a waiver, discharge or invalidation
: thereof, nor shall any single or partial exercise of any suchright, power or remedy or insistence on strict performance, or any abandonment or discontinuance ofsteps to enforce such a right, power or remedy or to enforce strict performance, preclude any other orfuture exercise thereof or insistence thereupon or the exercise of any other right, power or remedy. Thecovenants, obligations, and agreements of a defaulting Party and the rights and remedies of the otherParty upon a default shall continue and remain in full force and effect with respect to any subsequent breach, act or omission.
Section 8.10. Amendment.
This Agreement and any of the Transaction Agreements may beamended, supplemented or modified only by a written instrument duly executed by or on behalf of eachParty hereto.Section 8.11. No Construction Against Drafting Party. The language used in thisAgreement is the product of each Party's efforts, and each Party hereby irrevocably waives the benefits of34CHAR2\1573738vl0 Glý A .I.F.F DEA 7Z 4 "EXECUTION COPYany rule of contract construction that disfavors the drafter of a contract or the drafter of specific words ina contract.
Section 8.12. No Third-Party Beneficiary.
The terms and provisions of this Agreement areintended solely for the benefit of each Party hereto and their respective successors or permitted assigns,and it is not the intention of the Parties to confer third-party beneficiary rights upon any other Person.Section 8.13. Headings.
The headings used in this Agreement have been inserted forconvenience of reference only and do not define or limit the provisions hereof.Section 8.14. Invalid Provisions.
If any provision of this Agreement is held to be illegal,invalid or unenforceable under any present or future Law, and if the rights or obligations of any Partyhereto under this Agreement will not be materially and adversely affected
: thereby, (a) such provision willbe fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid orunenforceable provision had never comprised a part hereof, (c) the remaining provisions of thisAgreement will remain in full force and effect and will not be affected by the illegal, invalid orunenforceable provision or by its severance therefrom and (d) Purchaser and Seller shall negotiate anequitable adjustment in the provisions of the Agreement with a view toward effecting the purposes of theAgreement, and the validity and enforceability of the remaining provisions, or portions or applications
: thereof, shall not be affected thereby.Section 8.15. No Assignment; Binding Effect. Neither this Agreement nor any right,interest or obligation hereunder may be assigned by any Party hereto without the prior written consent ofthe other Party hereto and any attempt to do so will be void, except for assignments and transfers byPurchaser to an Affiliate (provided any such assignment or transfer will not relieve Purchaser of itsobligations hereunder) or by Purchaser (but not Seller) by operation of Law. This Agreement is bindingupon, inures to the benefit of and is enforceable by the Parties and their respective successors and assigns.Section 8.16. Counterparts.
This Agreement may be executed in any number ofcounterparts, each of which will be deemed an original, but all of which together will constitute one andthe same instrument.
Each Party expressly acknowledges the effectiveness of .pdf, facsimile or otherelectronic signatures as originals.
[Signature Page Follows.]
35CHAR2\1573738v10 I .774-fEXECUTION COPYIN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by theirrespective duly authorized officers as of the Effective Date.PURCHASER:
DUKE ENERGY PROGRESS, INC.Name: N7yATitle: Pi~f &ýTSELLER: NORTH CAROLINA EASTERN MUNICIPAL POWER AGENCYBy: 2%x /'wName: 4 rdiov-daTitle: C 6'0CHAR2\1573738vI0 GO IT4TJ 'HEXECUTION COPYEXHIBIT AKnowledge Seller:I.2.3.4.5.6.7.T. Graham Edwards, Chief Executive Officer of ElectriCities Roy Jones, Chief Operating Officer of ElectriCities Tim Tunis, Chief Financial Officer of ElectriCities David Barnes, Chief Legal & Ethics Officer of ElectriCities Richard N. Hicks, Chair of the Board of Directors of SellerD. Ronald Hovis, Vice Chair of the Board of Directors of SellerGrant W. Goings, Secretary of the Board of Directors of SellerFor purposes of determining the accuracy of Section 5.1.1 of the Agreement, the foregoing list shall alsoinclude anyone succeeding to any of the foregoing positions between the Effective Date and Closing.Purchaser:
: 1. Kent Fonvielle, Director
-Joint Owner & Point of Delivery of Duke Energy Corp.2. Harold James, Vice President
-Wholesale Power Sales of Duke Energy Corp.3. Greer Mendelow, Deputy General Counsel of Duke Energy Corp.For purposes of determining the accuracy of Section 5.2.1 of the Agreement, the foregoing list shall alsoinclude anyone succeeding to any of the foregoing positions between the Effective Date and Closing.CHAR2\1573738v9 G-0-PaRK-0-9 M-F-C i IEXECUTION COPYEXHIBIT BReal Property Legal Description See AttachedCHAR2\1573738v9 LEGAL DESCRIPTIONS Shearon Harris Property:
The courses in the following description are basedon the North Carolina State Plane Coordinate System.Lying and being in Buckhorn and Holly Springs Townships, Wake County, and Cape Fear Township, Chatham County,North Carolina.
BEGMIRING at a point where the perimeter of te exclusion area of the Shearon Harris Nuclear Power Plant Projectintersects contour elevation 243 feet above mean ea"level, said beginning point having North CarolinaCoordinates Y=684,472.716 and X-2,005,928.804; andruns thence along and with the perimeter of said exclusion area and a curve concave to the east having a radiusof 7,000 feet and a chord distance of 897.96 feet toa point in contour elevation 260 feet above mean sealevel; thence along and with said 260-foot contourto a point where the sane again intersects the perimeter of said exclusion area; thence along and with the perimeter of said exclusion area and a curve concave to thesoutheast having a radius of 7,000 feet and a chorddistance of 883.07 feet to a point in said 260-footcontour; thence along and with said 260-foot contour,crossing and recrossing U. S. Highvwhy 1, to a pointwhere the same again intersects the perimeter of saidexclusion area; thence along and with the perimeter of said exclusion area and a curve concave to the south-east having a radius of 7,000 feet and a chord distanceof 1,519.91 feet to a point in the southeastern edgeof the right of way of U. S. Highway 1; thence alongand with the southeastern edge of the right of way(con't. on following pages) of said HIghway North 60 degrees 40 minutes 38 secondsEast 218.71 feet to a point where the right of wyof said Highway marrows; thence Earth 29 degrees39 minutes 22 seconds West 45.00 feet to a pointIn said 260-contour; thence along mid with said 260-.ecntouor xaslm crossing and recrossing said HIghwayI to a point where said 260-foot contour intersects the southeastern edge of the right of way of saidHighway 1; thence along and with the southeastern edge of the right of way of said Usiway 1 the following seven (7) courses and distances:
North 69 degrees12 minutes 29 seconds East 101.12 feet, Worth 60degrees 40 minutes 38 seconds East 325.00 feet, South29 degrees 19 minzates 22 seconds 3ast 20.00 feet,North 60 degrees 40 minutes 38 seconds East 700.00feet, North 29 degrees 19 minutes 20 seconds West20.00 feet. North 60 degrees 40 minutes 39 secondsEast 428.67 feet, and North 60 degrees 40 minutes38 seconds East 357.62 feet to a point of curvature In sald Highway right of way; thence with a seriesof three (3) curves concave to the northwest alongthe southeastern edge of the tight of way of saidHighway 1 having successive chord distances of 301.58feet, 378.27 feet, and 1.16 feet to a point; thencealong and with the perimeter of said exclusion areaand a curve concave to the south having a radiusof 7,000 feet and a chord distance of $54.50 feetto a point in contour elevation 243 feet above meansea level; thence along and with said 243-foot contour,crossing and recrossiug said UIgShay I to a pointI the perimeter of said exclusion area; thenc/ alongend with the periameter of said exclusion area anda curve concave to the south having a radius of 7,000feet and a chord distance of 1,011.74 feet to a pointin said 243-fooz contour; thence along and with said243-foot contour to a point in the perinmeter of saidexclusion area;, thence along and with the perimeter of said exclusion area and a curve concave to thesouth having a radius of 7.000 feet and a chorddistance of 1,042.51" feet to a point In said 243-foot contour; thence along and with 243-footcAntour to a .point In the petrieter of said exzlusion area; thence along and with the perimeter of saidexclusioa area and a curve concave to the southwest having a radius of 7.000 feet and a chord distanceof 5.,017.02 feet to a point in said 243-foot contour;theuce along and with said 243-foot contour to a'point In an essentially rectangular area surrounding the dam of said Shearon Harris Nuclear PowerPlant Project; thence along and with the boundaries of said rectangular area the following five (5) coursesand distances:
South 22 degrees 54 minutes 33 secondsZest 318.4 feets South 22 degrees 54 minutes 33seconds Best 1,000.00 feet, South 67 degrees 05 minutes27 seconds West 2,528.21 feet, North 22 degrees 54mLutes 33 seconds West 1,000.00 feet, and North22 degrees 54 minutes 33 seconds West 743.77 feetto a point In said 243-foot contour; and thence alongand with said 243-foot contour to the point of BEGINN11G, containing approxiuately 11,680 acres +/-s as shownon Carolina Power & Light Company Drawing go. L-D-6392 (dated October.
1980, Revised:
September, 1981), which is attached hereto and incorporated herein.
(con't.)Less and except the real property conveyed to Norfolk Southern Railway Company by deedrecorded in Book 424, Page 156, Chatham County Registry.
Brunswick Property:
Being the property described as FIRST SEGMENT, SECOND SEGMENT, THIRDSEGMENT, FOURTH SEGMENT and FIFTH SEGMENT in that certain deed fromCAROLINA POWER & LIGHT COMPANY to NORTH CAROLINA EASTERNMUNICIPAL POWER AGENCY, dated and recorded April 21, 1982 in Book 497, Page121, Brunswick County Registry, and as shown on a drawing therein referred to asCarolina Power & Light Company Drawing No. L-D-6397 (dated August 1980), whichdrawing is recorded in Plat Book M, Page 392, Brunswick County Registry, and to whichdeed and drawing reference is specifically made herein.Less and except 0.18 acre tract of land conveyed by Deed of Gift With Reservation ofDistribution Easement recorded in Book 2952, Page 1197, Brunswick County Registry, asshown on map recorded in Map Cabinet 60, Page 55, Brunswick County Registry.
Mayo Property:
Lying and being in Allensville, Holloway and Woodsdale Townships, Person County,North Carolina:
Being that certain tract of land containing 5,218.412 acres, more or less, as shown anddescribed on Carolina Power & Light Company Drawing No. L-D-6396 (dated July, 1980),Sheets 1 through 12, which Drawing is recorded in Carolina Power & Light Company PlatBook at pages 30-41, Person County Registry, and which Drawing is incorporated hereinby reference.
Roxboro Property:
Lying and being situate in Person County, North Carolina, and being more particularly described asfollows:Ut. .tok Mb3S dimsrctle am MuOeM 1Its State HIm budiuae SpatsUAa Fietmu to m aEm UN d a Wlnud,asS -i-nt %goathInbsr t @.StaK'UI 1*X*,UM, d-aslashU bmbp Mute .f~l guSts 33349f eets Use fapo spnas sh lume 9C donpu U muds pis 25.0 Sotena Wnta SIa fqlwapldo slatSfldmpa9uuea3 uuso htnNL fi2 WWIp via Iddi 9 da Sn P1146,.n btbaced. OoteatI, 05.5 tess apsbs;s theane labtisq M U oma Ml ist .9.00 fot ma* pednj slam 3m I fl tfq2 itc ohm emSdle vt wiM? fees to a PINt am@ 20 l1_ doomed, e 31uu nook .ka J..U fatptso a a 72 breu Iw uuhw.X doata ea731.20 fsInt spl9; thea J1 5 dtmIas 3Sdetm5 Xws l a vatbs 109.0 fuct1a p(in; tno4uuWa thmm sI nIt.s 2p dais, mw19ailt Wa : tt a o ists 4flhl 19u guroha:
w dln. Ito ai 1fadn0iM god, Ic, kpm ls U lue otuthna ISS,0 fats, huth V dupes 09 ndluutd5h.t 9. ek N lpse o" OW$ 46 tIst IE fa, 0tub 0 5 dupn s 14 udnte aw Jmi, S mm was In, o a-M. 4- N cUMB .redse JID: to I usvOrH". ofai (buod hedin 130,. aom fUs. I&uld fast, %u aea paM beef.6dM(con't on following page)
Together with any and all rights of Grantor to use support facilities located at the Roxboro SteamElectric Plant, including the railroad
: thereon, as more particularly described in deeds fromCarolina Power & Light Company to Grantor recorded in Book 170, Page 316; Book 171, Page824; Book 172, Page 310; Book 172, Page 724 and Book 174, Page 119, Person County Registry.
EXHIBIT CPlants Agreements Termination Agreement PLANTS AGREEMENTS TERMINATION AGREEMENT THIS PLANTS AGREEMENTS TERMINATION AGREEMENT (this "Agreement")
ismade and entered into effective as _, 201 (the "Effective Date"), by and between NORTHCAROLINA EASTERN MUNICIPAL POWER AGENCY, a joint agency and public body and bodycorporate and politic organized and existing under North Carolina law ("Seller"),
and DUKE ENERGYPROGRESS, INC., a North Carolina corporation
("Purchaser").
Seller and Purchaser are also eachreferred to herein individually as a "P" and collectively as the "Parties."
All capitalized terms usedbut not defined herein shall have the meanings set forth in the APA (as defined below).WHEREAS, pursuant to the terms of that certain Asset Purchase Agreement dated as of,2014 (as amended, modified and supplemented, the "APA"), by and between Seller andBuyer, Seller and Buyer agreed to terminate the Plants Agreements effective as of the Closing; andWHEREAS, Seller and Buyer desire to enter into this Agreement to effect the termination of thePlants Agreements as of the Closing and to address certain other matters in connection therewith; NOW, THEREFORE, in consideration of the mutual covenants contained herein, and intending to be legally bound, the Parties hereby agree as follows:1. Termination of Plants Agreements.
Effective as of, and conditional upon theoccurrence of, the Closing, the Plants Agreements shall terminate and notwithstanding anything therein tothe contrary, be of no further force or effect, and neither Party shall have any rights, obligations orliabilities thereunder or with respect thereto.2. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed inaccordance with the laws of the State of North Carolina applicable to a contract executed and performed in such state, without giving effect to the conflicts of laws principles thereof.
Each Party heretoirrevocably submits to the exclusive jurisdiction of the General Court of Justice, Superior Court Division, Wake County, North Carolina, and, if applicable, the United States District Court, Eastern District ofNorth Carolina, Raleigh Division, for the purposes of any action arising out of or based upon thisAgreement or relating to the subject matter hereof. Each Party further expressly waives any objection based on forum non-conveniens or any objection to venue of any such action.(b) Successors and Assigns.
This Agreement shall be binding upon and inure to thebenefit of the Parties hereto and their respective successors and assigns;
: provided, however, thisAgreement shall not be assignable by either Party without the written consent of the other Party, exceptfor assignments by Purchaser to an Affiliate (provided any such assignment will not relieve Purchaser ofits obligations hereunder) or by Purchaser (but not by Seller) by operation of Law.(c) Severability.
Should any term, covenant, condition or provision of thisAgreement be held to be invalid or unenforceable, the balance of this Agreement shall remain in full forceand effect and shall stand as if the unenforceable provision did not exist.CHAR2\1 573738v9 (d) -Waiver.
No failure or delay by either Party in exercising any rights under thisAgreement shall operate as a waiver of such rights, and no waiver of any breach shall constitute a waiverof any prior, concurrent or subsequent breach.(e) Entire Agreement.
This Agreement constitutes the entire agreement between theParties with respect to the subject matter hereof and supersedes all other agreements, oral or written,between Seller and Buyer prior to the date of this Agreement regarding the subject matter hereof.(f) Counterparts.
This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the sameinstrument.
Each Party expressly acknowledges the effectiveness of .pdf, facsimile or other electronic signatures as originals.
[Signatures on Following Page]CHAR2\1573738v9 IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by theirrespective duly authorized officers as of the Effective Date.PURCHASER:
DUKE ENERGY PROGRESS, INC.By:Name:Title:SELLER:NORTH CAROLINA EASTERNPOWER AGENCYMUNICIPAL By:Name:Title:CHAR2\1573738v9 EXHIBIT DBill of SaleThis BILL OF SALE (this "Bill of Sale") is made effective as of the __ day of, 201_, by NORTH CAROLINA EASTERN MUNICIPAL POWER AGENCY, ajoint agency and public body and body corporate and politic organized and existing under NorthCarolina law ("Seller"),
to DUKE ENERGY PROGRESS, INC., a North Carolina corporation
("Purchaser").
: WHEREAS, Seller and Purchaser have entered into an Asset Purchase Agreement dated as of_ ,2014 (as amended, modified and supplemented, the "Asset Purchase Ageement")
providing for, subject to the terms and conditions set forth therein, the sale, transfer, conveyance, assignment and delivery by Seller to Purchaser of, among other Purchased Assets, Fuel Inventory andSpare Parts Inventory, free and clear of all Liens (other than Permitted Liens). All capitalized termsused but not defined herein shall have the meanings set forth in the Asset Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged, Seller hereby sells,transfers,
: conveys, assigns and delivers to Purchaser all of Seller's right, title and interest in and to theFuel Inventory and Spare Parts Inventory free and clear of all Liens (other than Permitted Liens).This Bill of Sale is being executed and delivered pursuant and subject to the Asset PurchaseAgreement.
Nothing in this Bill of Sale shall, or shall be deemed to, defeat, limit, alter, impair, enhanceor enlarge any right, obligation, claim or remedy created by the Asset Purchase Agreement.
In the eventof any conflict between this Bill of Sale and the Asset Purchase Agreement, the Asset PurchaseAgreement shall control.This Bill of Sale shall be binding upon Seller and its successors and assigns and shall inure tothe benefit of Purchaser and its successors and assigns.Subject to the terms and conditions of the Asset Purchase Agreement, at any time or from timeto time after the Closing, at Purchaser's request and without further consideration, Seller shall executeand deliver to Purchaser such other instruments of sale, transfer, conveyance, assignment andconfirmation, provide such materials and information and take such other actions as Purchaser mayreasonably deem necessary or desirable in order more effectively (i) to transfer, convey and assign toPurchaser, and to confirm Purchaser's title to, the Fuel Inventory and Spare Parts Inventory, (ii) to thefull extent permitted by Law, to put Purchaser in actual possession of the Fuel Inventory and Spare PartsInventory, and (iii) otherwise to consummate the transactions contemplated by the Asset PurchaseAgreement and this Bill of Sale.This Bill of Sale shall be governed by and construed and enforced in accordance with the lawsof the State of North Carolina without giving effect to the principles of conflicts of law thereof.This Bill of Sale may be executed by .pdf or other electronic signature, which shall be deemedan original.
[ Signatures on Following Page ]CHAR2\1573738v9 IN WITNESS WHEREOF, the undersigned has caused this Bill of Sale to be executed anddelivered as of this _ day of _201-.NORTH CAROLINA EASTERN MUNICIPAL POWER AGENCYBy:Name:Title:CHAR2\1 573738v9 G O-A UP-r-P -N. N I T-f 4 rDEP DRAFT 2/21/14EXHIBIT EForm of DeedsCHAR2\1573738v9 VSPECIAL WARRANTY DEEDDeed stamps:Tax Lot No.:Prepared by: Paul Arena, Poyner Spruill LLP, 301 S. College St., Suite 2300, Charlotte, NC 28202-6021 Return to:THIS DEED is made this ___ day of ,2014, by and between North CarolinaEastern Municipal Power Agency, a joint agency and public body and body corporate and politicorganized and existing under North Carolina law, whose address is 1427 Meadow Wood Blvd,Raleigh, NC 27604 ("Grantor")
and Duke Energy Progress, Inc., a North Carolina corporation, whose address is 410 South Wilmington Street, Raleigh, NC 27601-1748
("Grantee").
WITNESSETH:
: Grantor, for a valuable consideration paid by the Grantee, the receipt of which is herebyacknowledged, has and by these presents does grant, bargain, sell and convey unto the Grantee in feesimple all of Grantor's 16.17% undivided interest in and to all of that certain lot or parcel of land("Land")
described on Exhibit A attached hereto and incorporated herein by reference and any and alladditional right, title and interest, if any, Grantor may have acquired under the vesting deeds("Vesting Deeds") identified on Exhibit A or otherwise.
There is also conveyed by Grantor to Grantee any and all of Grantor's right, title and interest, if any,in and to the following appurtenances
("Appurtenances"):
(a) any buildings, structures and otherimprovements now located on the Land, and (b) any easements,
: benefits, privileges and other rightsappurtenant to the Land or in any way appertaining
: thereto, and all strips and gores and any landlying in the bed of any street or road open or closed adjoining the Land.TO HAVE AND TO HOLD to Grantee all of Grantor's undivided interest in the Land, in feesimple; and to Grantee all of Grantor's
: interest, if any, in the Appurtenances, free and discharged from any and all right, title, claim or interest of Grantor or anyone claiming by, through or underGrantor.CHAR2\I602486v3 And Grantor covenants with Grantee that Grantor has done nothing to impair such title as Grantorreceived in and to the Land and Appurtenances, and Grantor will warrant and defend such title to theLand and Appurtenances unto Grantee against the lawful claims of all persons claiming by, under orthrough Grantor, except with respect to the following exceptions:
: 1. Real property taxes for the year 2015 and subsequent years.2. Easements, covenants, restrictions,
: defects, encumbrances and other matters of record.3. Matters that would be shown by a current survey and/or inspection of the Harris Property.
: 4. Laws, regulations or ordinances relating to zoning, environmental protection, subdivision, occupancy, use, construction or development of the Harris Property, including but not limitedto any existing violations thereof.5. Easements granted to Norfolk Southern Railway Company in deed recorded in Book 424,Page 156, Chatham County Registry.
: 6. Right of Way Agreement in favor of NC Department of Transportation recorded March 27,1985 in Book 3451, Page 361, Wake County Registry.
: 7. Right of Way Agreement in favor of NC Department of Transportation recorded April 5,1985 in Book 3458, Page 402, Wake County Registry.
: 8. Right of Way Agreement in favor of NC Department of Transportation recorded April 18,1985 in Book 3464, Page 754, Wake County Registry.
: 9. Right of Way Agreement in favor of NC Department of Transportation recorded May 21,1997 in Book 7472, Page 501, Wake County Registry.
: 10. Right of Way Agreement in favor of NC Department of Transportation executed by CarolinaPower & Light Company and North Carolina Eastern Municipal Power Agency recordedJanuary 5, 1999 in Book 8223, Page 2548, Wake County Registry.
: 11. Deed of Easement from Carolina Power & Light Company, a North Carolina public servicecorporation d/b/a Progress Energy Carolinas, Inc., and the North Carolina Eastern Municipal Power Agency to the Town of Holly Springs recorded October 26,2011 in Book 14511, Page864, Wake County Registry.
: 12. Memorandum of Action recorded April 24, 2012 in Book 14738, Page 230, Wake CountyRegistry, in connection with pending Civil Action filed April 13, 2012 in File Number 12-CVS-5070 of the office of the Wake County Clerk of Superior Court, Department ofTransportation
: v. Carolina Power & Light Company and NCEMPA.2CHAR2\1602486v3
: 13. Stormwater Agreement recorded January 15, 2013 in Book 15103, Page 2668, Wake CountyRegistry.
: 14. Maps recorded in Book of Maps 2013, Pages 52-53, Wake County Registry.
Grantor states that the Land and Appurtenances do not include the primary residence of Grantor.[Operating and Fuel Agreement, dated July 30,1981, between Carolina Power and Light Company(N/K/A Duke Energy Progress, Inc.) and North Carolina Municipal Power Agency Number 3(N/K/A North Carolina Eastern Municipal Power Agency) and Purchase, Construction, andOwnership Agreement, dated July 30, 1981, between Carolina Power & Light Company (N/K/ADuke Energy Progress, Inc.) and North Carolina Municipal Power Agency Number 3 (N/K/A NorthCarolina Eastern Municipal Power Agency) to be terminated of record (references to specific bookand page numbers and a statement that Grantee, by acceptance of this deed, agrees that theagreements are terminated, to be included).]
The designation Grantor and Grantee as used herein shall include said parties, their heirs, successors, legal representatives and assigns, and shall include singular, plural, masculine, feminine or neuter, asrequired by the context.[Signature Page Follows]3CHAR2\1602486v3 IN WITNESS WHEREOF, Grantor has executed this instrument under seal the day and year firstabove written.North Carolina Eastern Municipal Power Agency,a joint agency and public body and body corporate and politic organized and existing under North Carolina law[CORPORATE SEAL]By:_______________
Name:Title:STATE OFCOUNTY OF1, , a Notary Public of the County and State aforesaid, do hereby certify thatpersonally appeared before me this day and acknowledged the dueexecution of the foregoing instrument.
Witness my hand and official seal this the day of,2014.printed name: , Notary Public (Official Seal)My commission expires:4CHAR2\1 602486v3 Exhibit ATMe coca. in thbe followi descuiption Am basedCA the unab CUrolin State ~lane CDoorInaL 7te yaLyin and being in Ad aHwlUy Spzngo Towipslps, rake County, ad Cape Peiar tcumaksL, Chatem Cunty*,North Carolina.
BGEXG== at a point TWhre the peuiuster of the eluasioares of the Sheer. Harris McLe POW Plant PTojectint1SCCs contour elavuysni 243 feet above ass eealavel, said %egian" point faing orth CaroalinCoordinates T-684,472.716 and Xm2,005,92B.80l andthenceUSfo.
along ad with the peflmrtn of aid uzclusUso Area ad a curve tueane to die east having a wadi"of 72,c0 feot and a chord distance of 897.96 feet toa point In contour elevation 260 feet ab umes asslevel; theme along and vith said 260-foot conoto a point flere the Sam agais stenosect the permeteof add eaalusion area; thence alMn end with the peutaater of salt excluson are and a cunt concave to thesoutheast a radle of 7,000 feat and a hkorddistane of 883.07 feet to a point Iu smad 260-footcontour; thenee salng and wth Said 260-foot contour,crowing and reossing V. S. 1U1wa.1,
.tIo a prsthbere b. aim epicn Intersuets tbe permeter of soldacivaisa area; tbenme alang set with the perimeter of od exclusion an and a curve Concave to the southi-east baving a radius of 7,000 feat and a chord distaceof 10519.91 feat to a point to the southeeton
.40of the right of way of U. S. liSbvay 1; thce aoud vilt the eouabeaerem edge of the right of wa(cAn't aw be246 pags)5CHAR2\1602486v3 of sod Uiaey Naoth S0 de es 40 anuteos 3 secodegut 218.7f feet to 8 point where the rigt of wayo said HZgbu xarmr; thence North 29 dupee.19 adate. 22 saoads Wont 45.00 feet to a piuntin amid 260-conteun chase stoM ad vith said 260-.coeoent.
again erosuing and reetessing
.uIA HighwaI to a point whave aid MO-foot ncosaur itersects tem moutheasteez edge of the rigbt of way of saidWs4hwy 1; thece slang ad with the suctbhaeru edge of the risht of way of said lighusy 1 the folIonig-en (7) coatses ad dissnces; North 69 ftrees12 lts. 29 ecoods East 101.12 feet. Worth 60degrees 40 minutes 38 weeds Ena 325.00 feet, South29 degrees 19 minutes 22 seconds East 20.00 feet,Eonh 40 degrees 40 taustes 38 seconds lost 700.00feet, troh 29 degree 19 mUutes 20 semaus Vest20.00 faeet. North 60 degrees 40 minutes 39 secoeesEst 428.67 feet, nd lnot 60 Veegs 40 smates38 seconds EBst 357.62 fest to a point of curturein nid right of way; tbeace with a serLesoftee (3) curves to the nort'hest alongOth seamtssate edge of the rtLBt of war of sadKh&Wy I having succeasive chord distacs of 301.58feet, 318.27 Ant, and 1.16 feee to a pois-; thencealong ad vwib the perspecer of said areaad a curve coacm. to the south having a radiusof 7,000 feet atn a chord distane of 554.50 oeetto a point In cootoar elevation 243 feet above mas-& let; thmee along and wit said 243-foot costou.,crossing and recrossing said B5 wy I to a pointID the persmoar of said exclusion amea; alomgad with the perimcer of said ex*iusion ares anda curve c ave to the mouth having a radius of 7,60feet ad a short distance of 1,0L1.74 feet to £ pointIn *ad coatowur; tbeece alon and With said243-foot cnacur to a point in the perfstera of acLaosm area; thence slang and with the perimeter of said elusion area ad a curve concave to themouth having a tadius of 7,000 feet end a chorddiestese of 1,042.51 feet to a point im soal 243-foot contour; thence al&g and with maid 243-footcontour to .point In the perimeter of amid esuamoaart- tOunce alo8 and -with the perimeter of saidealuatn area and a cutee concave to the ms hwesthaving a radius of 7,000 feet ad a chord distaseof 5,03-01 feet to a pointa isaeit 243-fact contour;thence slag and with sU 243-foot catont to a'oint In an. essentally rtetanulsr area the rata dam of said Shearo Harris Inser'anea ProJect; thence Alag ad wlith the boumnrLes of said rectangular area the followneg five (5) coursesand distancess South 22 degres 54 minutes 33 secondsleot 318.44 feest, South 22 degees 354 So mes 33seconds asts 1,000.00 feet, Somth 67 degrees 05 minutes27 seconds Vest 2,528.21 feet, Boxth 22 degree 54ute.nue 33 seconds Veas 1,000.00 feet, ant Moth22 degoees 54 minates 33 semonds Vst 74-77 feetto a point in maid 243-foot contour; and thene alongad with said 243-foot contour to the point of BlIMOiG,coataining approxLnateLy 11,650 acres +/-, a shownon Caroline Power & Light Coqmpan Drawing No. I.-D-392 (dated October, 1980, Rtevdue Sopmcber, 1951), Which is attached hereto and incorporated hoees.
Less and except the real property conveyed to Norfolk Southern Railway Company by deed recordedin Book 424, Page 156, Chatham County Registry.
Together with (but without any warranties) any and all rights of Grantor, if any, as more particularly described in deeds from Carolina Power & Light Company to Grantor recorded in Book 3010, Page718; Book 3044, Page 775; Book 3055, Page 12; Book 3067, Page 177, Wake County Registry andBook 450, Page 607; Book 454, Page 501; Book 455, Page 142 and Book 456, Page 9, ChathamCounty Registry (the "Vesting Deeds").7CHAR2\1602486v3 SPECIAL WARRANTY DEEDDeed stamps:Tax Lot No.:Prepared by: Paul Arena, Poyner Spruill LLP, 301 S. College St., Suite 2300, Charlotte, NC 28202-6021 Return to:THIS DEED is made this day of _2014, by and between North CarolinaEastern Municipal Power Agency, a joint agency and public body and body corporate and politicorganized and existing under North Carolina law, whose address is 1427 Meadow Wood Blvd,Raleigh, NC 27604 ("Grantor")
and Duke Energy Progress, Inc., a North Carolina corporation, whose address is 410 South Wilmington Street, Raleigh, NC 27601-1748
("Grantee").
WITNESSETH:
: Grantor, for a valuable consideration paid by the Grantee, the receipt of which is herebyacknowledged, has and by these presents does grant, bargain, sell and convey unto the Grantee in feesimple all of Grantor's 18.33% undivided interest in and to all of that certain lot or parcel of land("Land")
described on Exhibit A attached hereto and incorporated herein by reference and any and alladditional right, title and interest, if any, Grantor may have acquired under the vesting deeds("Vesting Deeds") identified on Exhibit A or otherwise.
There is also conveyed by Grantor to Grantee any and all of Grantor's right, title and interest, if any,in and to the following appurtenances
("Appurtenances"):
(a) any buildings, structures and otherimprovements now located on the Land, and (b) any easements,
: benefits, privileges and other rightsappurtenant to the Land or in any way appertaining
: thereto, and all strips and gores and any landlying in the bed of any street or road open or closed adjoining the Land.TO HAVE AND TO HOLD to Grantee all of Grantor's undivided interest in the Land, in fee simple;and to Grantee all of Grantor's
: interest, if any, in the Appurtenances, free and discharged from anyand all right, title, claim or interest of Grantor or anyone claiming by, through or under Grantor.ICHAR2\1602466v3 And Grantor covenants with Grantee that Grantor has done nothing to impair such title as Grantorreceived in and to the Land and Appurtenances, and Grantor will warrant and defend such title to theLand and Appurtenances unto Grantee against the lawful claims of all persons claiming by, under orthrough Grantor, except with respect to the following exceptions:
: 1. Real property taxes for the year 2015 and subsequent years.2. Easements, covenants, restrictions,
: defects, encumbrances and other matters of record.3. Matters that would be shown by a current survey and/or inspection of the Brunswick Property.
: 4. Laws, regulations or ordinances relating to zoning, environmental protection, subdivision, occupancy, use, construction or development of the Brunswick
: Property, including but notlimited to any existing violations thereof.5. Matters shown on maps recorded in Map Cabinet M, Page 392; Map Cabinet 53, Page 23; MapCabinet 60, Pages 54-55; Map Cabinet 63, Page 27 and Map Cabinet S, Pages 359-362,Brunswick County Registry.
: 6. Instrument of Combination recorded in Book 3002, Page 479, Brunswick County Registry.
: 7. Easement Deed to Pfizer, Inc. recorded in Book 654, Page 432, Brunswick County Registry.
: 8. License Agreement with Cogentrix Carolina Leasing Corporation recorded in Book 698,Page 365, Brunswick County Registry.
Deed and Assignment of Easements recorded inBook 712, Page 849, Brunswick County Registry.
Consent and Agreement recorded in Book791, Page 1097, Brunswick County Registry.
: 9. Lease to Brunswick County recorded in Book 1144, Page 1175, Brunswick County Registry, amended by Lease Amendment recorded in Book 1220, Page 107, Brunswick CountyRegistry.
: 10. Easement in favor of Town of Caswell Beach recorded in Book 2952, Page 1204, Brunswick County Registry.
: 11. Deed of Easement in favor of City of Southport recorded in Book 2977, Page 897,Brunswick County Registry.
: 12. Easement in favor of Town of Yaupon Beach recorded in Book 961, Page 248, Brunswick County Registry.
2CHAR2\1602466v3
: 13. Deed of Easement to NC Department of Transportation recorded in Book 709, Page 464,Brunswick County Registry.
Grantor states that the Land and Appurtenances do not include the primary residence of Grantor.[Operating and Fuel Agreement, dated July 30, 1981, between Carolina Power and Light Company(N/K/A Duke Energy Progress, Inc.) and North Carolina Municipal Power Agency Number 3(N/K/A North Carolina Eastem Municipal Power Agency) and Purchase, Construction, andOwnership Agreement, dated July 30, 1981, between Carolina Power & Light Company (N/K/ADuke Energy Progress, Inc.) and North Carolina Municipal Power Agency Number 3 (N/K/A NorthCarolina Eastern Municipal Power Agency) to be terminated of record (references to specific bookand page numbers and a statement that Grantee, by acceptance of this deed, agrees that theagreements are terminated, to be included).]
The designation Grantor and Grantee as used herein shall include said parties, their heirs, successors, legal representatives and assigns, and shall include singular, plural, masculine, feminine or neuter, asrequired by the context.[Signature Page Follows]3CHAR2\1602466v3 IN WITNESS WHEREOF, Grantor has executed this instrument under seal the day and year firstabove written.North Carolina Eastern Municipal Power Agency,a joint agency and public body and body corporate and politic organized and existing under North Carolina law[CORPORATE SEAL]By:Name:Title:STATE OFCOUNTY OFI, , a Notary Public of the County and State aforesaid, do hereby certify thatpersonally appeared before me this day and acknowledged the dueexecution of the foregoing instrument.
Witness my hand and official seal this the __ day of_,2014.printed name: , Notary PublicMy commission expires:(Official Seal)4CHAR2\1602466v3 Exhibit ABeing the property described as FIRST SEGMENT, SECOND SEGMENT, THIRDSEGMENT, FOURTH SEGMENT and FIFTH SEGMENT in that certain deed fromCAROLINA POWER & LIGHT COMPANY to NORTH CAROLINA EASTERNMUNICIPAL POWER AGENCY, dated and recorded April 21, 1982 in Book 497, Page 121,Brunswick County Registry, and as shown on a drawing therein referred to as Carolina Power& Light Company Drawing No. L-D-6397 (dated August 1980), which drawing is recorded inPlat Book M, Page 392, Brunswick County Registry, and to which deed and drawing reference is specifically made herein.Less and except 0.180 acre tract of land conveyed to the Town of Caswell Beach by Deed ofGift With Reservation of Distribution Easement recorded in Book 2952, Page 1197,Brunswick County Registry, as shown on map entitled, "Survey of Property of Progress EnergyCarolinas, Inc. Vacuum Station Site and Easements",
Sheet 2 of 2, prepared by WK Dicksondated August 2008 and Plot Date 06/26/09, and recorded in Map Cabinet 60, Page 55,Brunswick County Registry.
Together with (but without any warranties) any and all rights of Grantor, if any, as moreparticularly described in Book 497, Page 121; Book 507, Page 853; Book 511, Page 673; Book515, Page 185 and Book 527, Page 730, Brunswick County Registry (the "Vesting Deeds").Together with easements contained or conveyed in that certain Deed of Gift With Reservation of Distribution Easement recorded in Book 2952, Page 1197, Brunswick County Registry.
5CHAR2\1602466v3 SPECIAL WARRANTY DEEDDeed stamps:Tax Lot No.:Prepared by: Paul Arena, Poyner Spruill LLP, 301 S. College St., Suite 2300, Charlotte, NC 28202-6021 Return to:THIS DEED is made this ___ day of ,2014, by and between North CarolinaEastern Municipal Power Agency, a joint agency and public body and body corporate and politicorganized and existing under North Carolina law, whose address is 1427 Meadow Wood Blvd,Raleigh, NC 27604 ("Grantor")
and Duke Energy Progress, Inc., a North Carolina corporation, whose address is 410 South Wilmington Street, Raleigh, NC 27601-1748
("Grantee").
WITNESSETH:
: Grantor, for a valuable consideration paid by the Grantee, the receipt of which is herebyacknowledged, has and by these presents does grant, bargain, sell and convey unto the Grantee in feesimple all of Grantor's 16.17% undivided interest in and to all of that certain lot or parcel of land("Land")
described on Exhibit A attached hereto and incorporated herein by reference and any and alladditional right, title and interest, if any, Grantor may have acquired under the vesting deeds("Vesting Deeds") identified on Exhibit A or otherwise.
There is also conveyed by Grantor to Grantee any and all of Grantor's right, title and interest, if any,in and to the following appurtenances
("Appurtenances"):
(a) any buildings, structures and otherimprovements now located on the Land, and (b) any easements,
: benefits, privileges and other rightsappurtenant to the Land or in any way appertaining
: thereto, and all strips and gores and any landlying in the bed of any street or road open or closed adjoining the Land.TO HAVE AND TO HOLD to Grantee all of Grantor's undivided interest in the Land, in feesimple; and to Grantee all of Grantor's
: interest, if any, in the Appurtenances, free and discharged from any and all right, title, claim or interest of Grantor or anyone claiming by, through or underGrantor.CHAR2\1602482v3 And Grantor covenants with Grantee that Grantor has done nothing to impair such title as Grantorreceived in and to the Land and Appurtenances, and Grantor will warrant and defend such title to theLand and Appurtenances unto Grantee against the lawful claims of all persons claiming by, under orthrough Grantor, except with respect to the following exceptions:
I. Real property taxes for the year 2015 and subsequent years.2. Easements, covenants, restrictions,
: defects, encumbrances and other matters of record.3. Matters that would be shown by a current survey and/or inspection of the Mayo Property.
: 4. Laws, regulations or ordinances relating to zoning, environmental protection, subdivision, occupancy, use, construction or development of the Mayo Property, including but not limitedto any existing violations thereof.5. Easements to Piedmont Electric Membership Corp. recorded in Book 313, Page 528 andBook 495, Page 726, Person County Registry.
: 6. Temporary Easement to NC Department of Transportation recorded in Book 829, Page 683,Person County Registry.
: 7. Matters shown on map recorded in Carolina Power & Light Company Plat Book at pages 30-41, Person County Registry.
: 8. Right of Way Agreement in favor of NC Department of Transportation recorded in Book199, Page 253, Person County Registry.
Grantor states that the Land and Appurtenances do not include the primary residence of Grantor.[Operating and Fuel Agreement, dated July 30, 1981, between Carolina Power and Light Company(N/K/A Duke Energy Progress, Inc.) and North Carolina Municipal Power Agency Number 3(N/K/A North Carolina Eastern Municipal Power Agency) and Purchase, Construction, andOwnership Agreement, dated July 30, 1981, between Carolina Power & Light Company (N/K/ADuke Energy Progress, Inc.) and North Carolina Municipal Power Agency Number 3 (N/K/A NorthCarolina Eastern Municipal Power Agency) to be terminated of record (references to specific bookand page numbers and a statement that Grantee, by acceptance of this deed, agrees that theagreements are terminated, to be included).]
The designation Grantor and Grantee as used herein shall include said parties, their heirs, successors, legal representatives and assigns, and shall include singular, plural, masculine, feminine or neuter, asrequired by the context.[Signature Page Follows]2CHAR2\1602482v3 IN WITNESS WHEREOF, Grantor has executed this instrument under seal the day and year firstabove written.North Carolina Eastern Municipal Power Agency,a joint agency and public body and body corporate and politic organized and existing under North Carolina law[CORPORATE SEAL]By:Name:Title:STATE OFCOUNTY OFI, , a Notary Public of the County and State aforesaid, do hereby certify thatpersonally appeared before me this day and acknowledged the dueexecution of the foregoing instrument.
Witness my hand and official seal this the __ day of.2014.printed name:__ Notary PublicMy commission expires:(Official Seal)3CHAR2\1602482v3 Exhibit ALying and being in Allensville, Holloway and Woodsdale Townships, Person County, NorthCarolina:
Being that certain tract of land containing 5,218.412 acres, more or less, as shown anddescribed on Carolina Power & Light Company Drawing No. L-D-6396 (dated July, 1980),Sheets I through 12, which Drawing is recorded in Carolina Power & Light Company PlatBook at pages 30-41, Person County Registry, and which Drawing is incorporated herein byreference.
Together with (but without any warranties) any and all rights of Grantor, if any, as moreparticularly described in deeds from Carolina Power & Light Company to Grantor recorded inBook 170, Page 331; Book 171, Page 812; Book 172, Page 296; and Book 172, Page 710,Person County Registry (the "Vesting Deeds").4CHAR2\1602482v3 SPECIAL WARRANTY DEEDDeed stamps:Tax Lot No.:Prepared by: Paul Arena, Poyner Spruill LLP, 301 S. College St., Suite 2300, Charlotte, NC 28202-6021 Return to:THIS DEED is made this __day of ,2014, by and between North CarolinaEastern Municipal Power Agency, ajoint agency and public body and body corporate and politicorganized and existing under North Carolina law, whose address is 1427 Meadow Wood Blvd,Raleigh, NC 27604 ("Grantor")
and Duke Energy Progress, Inc., a North Carolina corporation, whose address is 410 South Wilmington Street, Raleigh, NC 27601-1748
("Grantee").
WITNESSETH:
: Grantor, for a valuable consideration paid by the Grantee, the receipt of which is herebyacknowledged, has and by these presents does grant, bargain, sell and convey unto the Grantee in feesimple all of Grantor's 12.94% undivided interest in and to all of that certain lot or parcel of land("Land")
described on Exhibit A attached hereto and incorporated herein by reference and any andall additional right, title and interest, if any, Grantor may have acquired under the vesting deeds("Vesting Deeds") identified on Exhibit A or otherwise.
There is also conveyed by Grantor to Grantee any and all of Grantor's right, title and interest, if any,in and to the following appurtenances
("Appurtenances"):
(a) any buildings, structures and otherimprovements now located on the Land, and (b) any easements,
: benefits, privileges and other rightsappurtenant to the Land or in any way appertaining
: thereto, and all strips and gores and any landlying in the bed of any street or road open or closed adjoining the Land.TO HAVE AND TO HOLD to Grantee all of Grantor's undivided interest in the Land, in feesimple; and to Grantee all of Grantor's
: interest, if any, in the Appurtenances, free and discharged from any and all right, title, claim or interest of Grantor or anyone claiming by, through or underGrantor.CHAR2\1602419v4 And Grantor covenants with Grantee that Grantor has done nothing to impair such title as Grantorreceived in and to the Land and Appurtenances, and Grantor will warrant and defend such title to theLand and Appurtenances unto Grantee against the lawful claims of all persons claiming by, under orthrough Grantor, except with respect to the following exceptions:
: 1. Real property taxes for the year 2015 and subsequent years.2. Easements, covenants, restrictions,
: defects, encumbrances and other matters of record.3. Matters that would be shown by a current survey and/or inspection of the Roxboro Property.
: 4. Laws, regulations or ordinances relating to zoning, environmental protection, subdivision, occupancy, use, construction or development of the Roxboro Property, including but notlimited to any existing violations thereof.5. Matters shown on map recorded in Carolina Power & Light Company Plat Book at Pages 1-12,42 and 44, Person County Registry.
: 6. Right-of-way of railroad adjoining the Roxboro Property, as described in deeds recorded inBook 170, Page 316; Book 171, Page 824; Book 172, Page 310; Book 172, Page 724 andBook 174, Page 119, Person County Registry.
Grantor states that the Land and Appurtenances do not include the primary residence of Grantor.[Operating and Fuel Agreement, dated July 30, 1981, between Carolina Power and Light Company(N/K/A Duke Energy Progress, Inc.) and North Carolina Municipal Power Agency Number 3(N/K/A North Carolina Eastern Municipal Power Agency) and Purchase, Construction, andOwnership Agreement, dated July 30, 1981, between Carolina Power & Light Company (N/K/ADuke Energy Progress, Inc.) and North Carolina Municipal Power Agency Number 3 (N/K/A NorthCarolina Eastern Municipal Power Agency) to be terminated of record (references to specific bookand page numbers and a statement that Grantee, by acceptance of this deed, agrees that theagreements are terminated, to be included).]
The designation Grantor and Grantee as used herein shall include said parties, their heirs, successors, legal representatives and assigns, and shall include singular, plural, masculine, feminine or neuter, asrequired by the context.[Signature Page Follows]2CHAR2\1602419v4 IN WITNESS WHEREOF, Grantor has executed this instrument under seal the day and year firstabove written.North Carolina Eastern Municipal Power Agency,a joint agency and public body and body corporate and politic organized and existing under North Carolina law[CORPORATE SEAL]By:Name:Title:STATE OFCOUNTY OFI, _, a Notary Public of the County and State aforesaid, do hereby certify thatpersonally appeared before me this day and acknowledged the dueexecution of the foregoing instrument.
Witness my hand and official seal this the __ day of.2014.printed name: , Notary PublicMy commission expires:(Official Seal)3CHAR2\16024190 Exhibit AThe courses tn the following description are based.on the North Carolina State Plane Coordinate System.Lying and being in Cunningham
: Township, Person County,North Carolina.
BEGINNING at a point in the center. line of a railroad, said beginning point having North Carolina Coordinates Y-994,968.720 and X-1,978,280.945, and runs thenceSouth 03 degrees 13 minutes 37 seconds West 320.59feet to a point; thence South 32 degrees 44 minutes58 seconds West 80.04 feet to a point; thence South03 degrees 13 minutes 10 seconds West 357.00 feetto a point; thence North 84 degrees 51 minutes 30seconds West 522.37 feet to a point; thence North72 degrees 03 minutes 39 seconds West 386.88 feetto a point; thence North 61 degrees 31 minutes 19seconds Vest 155.69 feet to a point; thence South14 degrees 36 minutes 41 seconds West 70.00 feet toa point; thence North 75 degrees 23 minutes 19 secondsWest 115.87 feet to a point; thence North 10 degrees55 minutes 17 seconds East 127.25 feet to a point;thence North 72 degrees 16 minutes 46 seconds West759.20 feet to a point; thence North 15 degrees 06minutes 55 seconds West 109.24 feet to a point; thenceNorth 84 degrees 42 minutes 12 seconds Vast 275.03feet to a point; ihence South 72 degrees 17 minutes41 seconds East 52.13 feet to a point in the centerline of said railroad; thence along and with the centerline of said railroad the following seven (7) coursesand distances:
North 84 degrees 48 minutes 01 secondEast 756.41 feet,North 87 degrees 31 minutes 14 secondsEast 100.01 feet, South 86 degrees 06 minutes 46 secondsEast 100.00 feet, South 87 degrees 09 minutes 50 secondslast 100.01 feet, North 88 degrees 17 minutes 39 secondsEast 99.99 feet, North 86 degrees 04 minutes 10 secondslast 248.08 feet, and South 56 degrees 46 minutes 40seconds East 240.30 feet to the point of BEGINNUO.,
containing 21.757;acres, more or less, as shown anddescribed on Carolina Power & Light Company DrawingNo. L-A-6415 (dated November, 1980), a copy of whichis attached hereto and made a part hereof.Together with (but without any warranties) any and all rights of Grantor, if any, to use supportfacilities located at the Roxboro Steam Electric Plant, including the railroad
: thereon, as moreparticularly described in deeds from Carolina Power & Light Company to Grantor recorded in Book170, Page 316; Book 171, Page 824; Book 172, Page 310; Book 172, Page 724 and Book 174, Page119, Person County Registry (the "Vesting Deed").4CHAR2\1602419v4 Ixhi~hit A ('rnnf "Exhibit A (con't)* LI/* CeoPANyS.,ue,,i 6*0 Mopume s1M0M(.sa*DA'feR a SSOCI*T(es CO*W&W~ EirinwaAIme~w , V.C.NOTE...All Camvi. SoWN Are 4kd V& Tre#or## COWIN# ceWdctv/it SYSISm.CAOND" WAVR & UOMI COMMNSPAAUCIM.
ii. C.Raiei 0t~rWCax"MPlif CdvJ,- PM .M/500 1!paCHAR2\1602419Y4 SCHEDULE 3.1SELLER'S DISCLOSURE SCHEDULETOASSET PURCHASE AGREEMENT BY AND BETWEENDUKE ENERGY PROGRESS, INC.ANDNORTH CAROLINA EASTERN MUNICIPAL POWER AGENCYDATED AS OF______ __ _ ,2014CHAR2\I603952v3 INDEX TO SCHEDULE 3.11Section 3.1.2 -Seller's Board of Directors' Resolutions List of Seller's Participants Section 3.1.5 -Seller's Required ConsentsSection 3.1.7 -Non-Compliance with LawsSection 3.1.8 -Title Exceptions to Purchased Assets (other than Seller's Interests)
Section 3.1.9 -Title Exceptions to Seller's Interests Section 3.1.10 -Seller's Indebtedness Related to Purchased AssetsSection 3.1.11 -Contracts Relating to the Development, Design, Construction, Ownership, Operation or Maintenance of the Purchased Assets (otherthan the Plants Agreements)
Section 3.1.12 -Seller's Plants PermitsSection 3.1.14 -Value of Seller Nuclear Decommissioning Trust Funds (December 31,2013)Unless the context indicates otherwise, capitalized terms used in this Schedule 3.1 have the meanings given themin the Asset Purchase Agreement by and between Duke Energy Progress, Inc. and North Carolina Eastern Municipal Power Agency, dated as of ,2014.CHAR2\1603952v3 Section 3.1.2Seller's Board of Directors' Resolutions Seller's Resolution No. R-8-95 (see attached)
Seller's Resolution No. EAR-3-96 (see attached)
Seller's Resolution No. EAR-2-01 (see attached)
Seller's Resolution No. EAR-5-04 (see attached)
Seller's Resolution No. EAR-1-09 (see attached)
List of Seller's Participants Town of ApexTown of AydenTown of BelhavenTown of BensonTown of ClaytonTown of EdentonCity of Elizabeth CityTown of Farmville Town of FremontCity of Greenville Town of HamiltonTown of HertfordTown of HobgoodTown of Hookerton City of KinstonTown of La GrangeCity of Laurinburg Town of Louisburg City of Lumberton City of New BernTown of Pikeville Town of Red SpringsTown of Robersonville City of Rocky MountTown of Scotland NeckTown of SelmaTown of Smithfield City of Southport Town of TarboroTown of Wake ForestCity of Washington City of WilsonCHAR2\1603952v3 RESOLUTION R- 8-95RESOLUTION OF THE BOARD OF COMMISSIONERS OFNORTH CAROLINA EASTERN MUNICIPAL POWER AGENCYPROVIDING FOR THE CREATION OF ABOARD OF DIRECTORS
: WHEREAS, the General Assembly of North Carolina has amendedChapter 159B, "Joint Municipal Power and Energy Act," effective July 11, 1995, to permit, among other things, the creation of aBoard of Directors by the board of commissioners of a joint agency;andWHEREAS, Chapter 159B, as amended, permits a Board ofDirectors created pursuant thereto to act simultaneously as theBoard of Directors of any other joint agency or joint municipal assistance agency, if so provided by such other entities; andWHEREAS, the Board of Commissioners (the "Board ofCommissioners")
of North Carolina Eastern Municipal Power Agency("Eastern"),
subject to the terms and conditions of thisResolution, desires to create a Board of Directors and to delegateto such Board of Directors the exclusive power and authority to actfor and on behalf of Eastern to the extent set forth herein, allpursuant and subject to the provisions of N.C.G.S.
Section 159B-10;andWHEREAS, the Board of Commissioners believes that suchcreation and delegation is in the best interests of Eastern and itsParticipants.
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of this Eastern:Section 1. Creation.
Subject to the terms and conditions set forth in this Resolution, there is created hereby a Board ofDirectors of Eastern.
The Board of Directors shall actsimultaneously as the Board of Directors of Eastern, North CarolinaMunicipal Power Agency Number 1 ("Agency No. 1") and such jointmunicipal assistance agency as Eastern and Agency No. 1 mayorganize pursuant to the provisions of N.C.G.S.
Section 159B-43(the "JMAA").
The Board of Directors shall act as the Board ofDirectors of the JMAA upon the (i) adoption of a resolution by theJMAA containing substantially the same terms and conditions as areset forth in this Resolution, or containing such other terms andconditions as the Board of Commissioners may approve by Resolution, and (ii) the election and qualification of the Directors elected bythe JMAA.1 Section 2. Authority.
(a) Except as set forth below, theBoard of Directors is delegated exclusively hereby, and shall haveand exercise exclusively, all of the powers and authority of theBoard of Commissioners, including, but not limited to, the powerand authority to (i) adopt or amend Bylaws for the regulation ofthe affairs and the conduct of its business, and to prescribe rules, regulations and policies in connection with the performance of its functions, duties, powers and authority, (ii) establish oneor more committees necessary or appropriate for the conduct of itsbusiness and that of Eastern, (iii) issue notes and bonds ofEastern with the concurrence of the Board of Commissioners, (iv)employ a Chief Executive Officer and provide for management services;
: provided, however, that the Chief Executive Officer shallnot be a member of the Board of Directors and shall not have beena member of the Board of Directors for at least twelve (12) monthsprior to employment as Chief Executive
: Officer, (v) set wholesale rates sufficient to provide revenues adequate to meet requirements set forth in any budget adopted by the Board of Commissioners, asthe same may be amended from time to time, and (vi) do all acts andthings necessary, convenient or desirable to exercise its powersand authority.
(b) Notwithstanding the foregoing, the Board of Commissioners hereby reserves exclusively unto itself the power and authority to(i) amend this Resolution or elect or remove Directors, (ii) adoptor amend any budget for Eastern, (iii) adopt or amend Bylaws forthe regulation of the affairs and the conduct of its business, andto prescribe rules, regulations and policies in connection with theperformance of its functions, duties and powers and authority reserved unto the Board of Commissioners, (iv) establish one ormore committees necessary or appropriate for the conduct of itsbusiness, and (v) do all acts and things necessary, convenient ordesirable to exercise the powers and authority reserved unto theBoard of Commissioners.
Section 3. Number; Classes:
Oualifications:
Method ofElection; Term; Votes. The number of Directors constituting theBoard of Directors shall be not less than twelve (12) nor more thanfourteen (14) members.
Six (6) members of the Board of Directors shall be elected by the Board of Commissioners, six (6) members ofthe Board of Directors shall be elected by the Board ofCommissioners of Agency No. 1, and (i) one (1) member of the Boardof Directors shall be elected by the non-joint agency members ofthe JMAA if the membership thereof includes seven (7) or fewermunicipalities that are not Participants of Eastern or Agency No.1 or nonmunicipalities owning electric distribution
: systems, or(ii) two (2) members of the Board of Directors shall be elected bythe non-joint agency members of the JMAA if the membership thereofincludes more than seven (7) municipalities that are notParticipants of Eastern or Agency No. 1 or nonmunicipalities owningelectric distribution
: systems, pursuant to procedures established 2
therefor by such members.
Directors initially elected shall bedivided into the following three (3) classes:Class I -two (2) Directors elected by each of Eastern andAgency No. 1;Class II -two (2) Directors elected by each of Eastern andAgency No. 1 and one (1) Director elected by the JMAA if it isthen entitled to elect two (2) Directors; andClass III -two (2) Directors elected by each of Eastern andAgency No. 1 and 1 Director elected by the JMAA.Each Director elected initially in Class I, Class II and Class IIIshall be elected for a term of one (1) year, two (2) years andthree (3) years, respectively.
Thereafter, all Directors shall beelected for terms of four (4) years. No Director shall serve morethan two (2) consecutive terms in office; provided,
: however, thatthe initial term of office of each Director elected initially as aClass I or Class II Director shall not be considered as a term inoffice. All Directors shall serve until the election andqualification of a successor or until their earlier death,resignation or removal from office. Each Director shall have one(1) vote.Section 4. Directors Elected by Eastern:
Qualifications, Method of Election.
: Removal, Vacancies.
Compensation.
Theprovisions of this Section shall apply only to the six (6)Directors elected by Eastern.
Four (4) Directors, at the time oftheir election and at all times during their terms, shall be either(i) an electric utility ratepayer of a Participant of Eastern, (ii)an elected or appointed official of a Participant of Eastern, or(iii) an employee of a Participant of Eastern.
Two (2) of theDirectors having the qualifications described in the preceding
: sentence, and one (1) of the remaining two (2) Directors, shall beelected by the weighted vote of the Board of Commissioners presentand entitled to vote thereon, and the remaining three (3) Directors shall be elected by a majority vote of the Board of Commissioners present and entitled to vote thereon.
Directors shall serve at thepleasure of the Board of Commissioners and may be removed, at anytime and for any reason, with or without cause, by the Board ofCommissioners.
Removal of a Director shall require the same voteof the Board of Commissioners as was required to elect suchDirector.
If any Director dies, resigns, is removed, or otherwise is incapable of serving or is no longer qualified to serve thebalance of the term for which such Director was elected, theresulting vacancy shall be filled by the Board of Commissioners asexpeditiously as possible.
Each such successor Director shall beelected in the same manner and be subject to the samequalifications, if applicable, as the predecessor Director.
3 Section 5. Compensation.
(a) As compensation for theperformance of their duties on the Board of Directors, Directors shall receive compensation as determined by theboard of Commissioners for each meeting of the Board of Directors, or meeting of a committee or committees of the Board of Directors, attended per month; provided,
: however, that Directors shall not becompensated for more than two (2) of such meetings per calendarmonth; except that the Chairman of the Board of Directors shall becompensated for up to three (3) meetings of the Board of Directors, or meetings of a committee or committees of the Board of Directors, attended per month. In addition, Directors shall be reimbursed forordinary and necessary expenses incurred in the performance of suchduties.(b) Notwithstanding the foregoing, if any Director is asalaried employee of a Participant of Eastern, such compensation shall be paid to such Participant and such reimbursement shall bemade to the Director or Participant, as deemed appropriate by suchParticipant.
Section 6. Condition to Effectiveness.
This Resolution shall become effective upon the (i) adoption of a resolution byAgency No. 1 containing substantially the same terms and conditions as are set forth in this Resolution, or containing such other termsand conditions as the Board of Commissioners may approve byResolution, and (ii) the election and qualification of theDirectors elected by Eastern and Agency No. 1.Section 7. Duration.
This Resolution shall remain in fullforce and effect for a period of not less than three (3) years fromthe effective date hereof, as determined pursuant to Section 6 ofthis Resolution.
Thereafter, this Resolution may be revoked by theBoard of Commissioners upon one (1) year's prior written notice toAgency No. 1 and the JMAA.Section 8. Amendment, Modification.
SuDmlement.
Except asotherwise provided in Section 6 of this Resolution, this Resolution may be amended,
: modified, or supplemented, but such amendment, modification or supplement shall not become effective until theadoption of amendments, modifications or supplements containing substantially the same provisions as are contained in suchamendment, modification or supplement by Agency No. 1 and the JMAA.Section 9. Delivery of Certified Copy of Resolution.
Acertified copy of this Resolution, and any amendment, modification or supplement hereto, shall be delivered to the Chairman of AgencyNo. 1 and the General Manager of the JMAA as soon as practicable after adoption.
4 This the 3rd day ofAugust , 1995.Secretary-Treasurer 050229187/120794 5
RESOLUTION EAR-3-96RESOLUTION OF THE BOARD OF COMMISSIONERS OFNORTH CAROLINA EASTERN MUNICIPAL POWER AGENCYPROVIDING FOR THE TERM OF SERVICE OF THEBOARD OF DIRECTORS
: WHEREAS, the Board of Commissioners (the "Board ofCommissioners")
of North Carolina Eastern Municipal Power Agency("Eastern"),
adopted Resolution R-8-95 on August 3, 1995; andWHEREAS, Resolution R-8-95 provides, in Section 3, thatDirectors elected to the Board of Directors of Eastern ("Board ofDirectors")
subsequent to the Directors initially elected shall beelected for terms of four years; andWHEREAS, the Board of Commissioners, subject to the terms andconditions of this Resolution, desires to amend Section 3 ofResolution R-8-95; andWHEREAS, the Board of Commissioners believes that suchamendment is in the best interests of Eastern and its Participants.
NOW, THEREFORE, BE IT RESOLVED, by the Board ofCommissioners of Eastern:Section 1. Term of Directors Elected to Board ofDirectors:
Section 3 of Resolution R-8-95 is hereby amended,subject to the terms and conditions hereof, by deleting the fourthsentence from the end of Section 3 in its entirety and inserting, in lieu thereof, the following:
"Thereafter all Directors shall be elected for terms of three(3) years."Section 2. Condition to Effectiveness.
This Resolution shall become effective upon the adoption of resolutions by NorthCarolina Municipal Power Agency Number 1 ("Agency No. 1") andElectriCities of North Carolina, Inc. ("ElectriCities"),
containing substantially the same terms and conditions as are set forth inthis Resolution, or containing such other terms and conditions asthe Board of Commissioners may approve by Resolution.
Section 3. Amendment.
Modification, SuDDlement.
ThisResolution may be amended,
: modified, or supplemented, but suchamendment, modification or supplement shall not become effective until the adoption of amendments, modifications or supplements containing substantially the same provisions as are contained insuch amendment, modification or supplement by Agency No. 1 andElectriCities.
1 Section 4. Delivery of Certified CoVy of Resolution.
Acertified copy of this Resolution, and any amendment, modification or supplement hereto, shall be delivered to the Chairman of AgencyNo. 1 and the Chief Executive Officer of ElectriCities as soon aspracticable after adoption.
This the 9th day of August , 1996.chairmanSecretary-Tteasuter 0SO229Ml71142M~
2 RESOLUTION EAR-2-01RESOLUTION OF THE BOARD OF COMMISSIONERS OFNORTH CAROLINA EASTERN MUNICIPAL POWER AGENCYPROVIDING FOR THE TERM OF SERVICE OF CERTAINMEMBERS OF THEBOARD OF DIRECTORS
: WHEREAS, the Board of Commissioners (the "Board of Commissioners")
of NorthCarolina Eastern Municipal Power Agency ("Eastern"),
adopted Resolution R-8-95 on August 3,1995, which resolution was amended by action of the Board of Commissioners by Resolution EAR-3-96, adopted by the Board of Commissioners on August 9, 1996; andWHEREAS, Resolution R-8-95, as amended,
: provides, in part in Section 3, that noDirector shall serve more than two (2) consecutive terms in office; andWHEREAS, the Board of Commissioners, subject to the terms and conditions of thisResolution, desires to amend Section 3 of Resolution R-8-95, as amended; andWHEREAS, the Board of Commissioners believes that such amendment is in the bestinterests of Eastern and its Participants.
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of Eastern:Section 1. Consecutive Terms of Certain Directors:
Section 3 of Resolution R-8-95,as amended, is hereby amended, subject to the terms and conditions hereof, by deleting the thirdsentence from the end of Section 3 in its entirety and inserting, in lieu thereof, the following:
"Except as set forth below, no Director shall serve more than two (2) consecutive termsin office; provided,
: however, that the initial term of office of each Director electedinitially as a Class I or Class II Director shall not be considered as a term in office; andprovided
: further, however, that no Director elected by the non-joint agency members ofthe JMAA shall serve more than three (3) consecutive terms in office."Section 2. Condition to Effectiveness.
This Resolution shall become effective uponthe adoption of resolutions by North Carolina Municipal Power Agency Number 1 ("Agency No.1") and ElectriCities of North Carolina, Inc. ("ElectriCities"),
containing substantially the sameterms and conditions as are set forth in this Resolution, or containing such other terms andconditions as the Board of Commissioners may approve by Resolution.
Section 3. Amendment, Modification, Supplement.
This Resolution may beamended,
: modified, or supplemented, but such amendment, modification or supplement shall notbecome effective until the adoption of amendments, modifications or supplements containing substantially the same provisions as are contained in such amendment, modification orsupplement by Agency No. 1 and ElectriCities.
Section 4. Delivery of Certified Cooy of Resolution.
A certified copy of thisResolution, and any amendment, modification or supplement hereto, shall be delivered to theChairman of Agency No. 1 and the Chief Executive Officer of ElectriCities as soon aspracticable after adoption.
Section 5. Defined Terms. All terms capitalized in this Resolution and not otherwise defined herein shall have the meanings given them in Resolution EAR-3-96, as amended.This the 2nd day of May, 2001.ChairmanAr5Secretary-Treasurer 05022911871142958 ROCKYMOUNT/I 40129-002/230312
: v. I2 RESOLUTION EAR-5-04RESOLUTION OF THE BOARD OF COMMISSIONERS OFNORTH CAROLINA EASTERN MUNICIPAL POWER AGENCYFIXING THE COMPENSATION FOR MEMBERS OF THEBOARD OF DIRECTORS
: WHEREAS, this Board of Commissioners, by the adoption of Resolution R-8-95 onAugust 3, 1995, provided for the creation of a Board of Directors for North Carolina EasternMunicipal Power Agency ("Power Agency")
and provided, among other things, that thecompensation of the members of the Board of Directors would be as determined by the Board ofCommissioners; andWHEREAS, this Board of Commissioners desires to change the compensation payable tomembers of the Board of Directors previously fixed by this Board of Commissioners.
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of this PowerAgency:Section 1. The Board of Commissioners finds and determines that the compensation payable to members of the Board of Directors shall be fixed at the sum of $1000.00 per monthand the compensation payable to the duly elected Chairman of the Board of Directors shall befixed at the sum of $1,500.00 per month, in each case irrespective of the number of meetingsheld per month; provided,
: however, that each month the foregoing compensation shall be pro-rated, based on the relationship of the meetings attended to the total number of meetings duringthe month.Section 2. This Resolution shall become effective upon the adoption of a resolution byNorth Carolina Municipal Power Agency Number 1 ("Power Agency 1") and ElectriCities ofNorth Carolina, Inc. ("ElectriCities')
containing essentially the same provisions as are set forthin this Resolution, or containing such other provisions as this Board of Commissioners mayapprove by Resolution.
Section 3. A certified copy of this Resolution shall be delivered to the Chairman ofPower Agency 1 and the Chief Executive Officer of ElectriCities as soon as practicable after,adoption.
Adopted this the 15th day of December, 2004.A T: -YSecmrtary-Treasuirer ROCKYMOUNT/1401294MS~33667 v.]
RESOLUTION EAR-1-09RESOLUTION OF THE BOARD OF COMMISSIONERS OFNORTH CAROLINA EASTERN MUNICIPAL POWER AGENCYPROVIDING FOR CERTAIN EX OFFICIO MEMBERS OF THEBOARD OF DIRECTORS
: WHEREAS, this Board of Commissioners, by the adoption of Resolution R-8-95 onAugust 3, 1995, and in accordance with the provisions of N.C.G.S.
§159B-10, provided for thecreation of a Board of Directors, containing not less than twelve (12) nor more than fourteen (14)members, for North Carolina Eastern Municipal Power Agency ('Eastern")
and delegated to theBoard of Directors exclusive power and authority to act for and on behalf of Eastern, to theextent set forth in said Resolution; andWHEREAS, the Board of Commissioners of North Carolina Municipal Power AgencyNumber 1 ("Agency No. 1"), and in accordance with the provisions of N.C.G.S.
§159B-10, bythe adoption of a Resolution R-10-95, also provided for the creation of a Board of Directors anddelegated to the Board of Directors exclusive power and authority to act for and on behalf ofElectriCities, to the extent set forth in said Resolution; andWHEREAS, the Commissioners of ElectriCities of North Carolina, Inc. ("ElectriCities"),
by the adoption of a Resolution on November 1, 1995, and in accordance with the provisions ofN.C.G.S.
§ 159B-43, also provided for the creation of a Board of Directors and delegated to theBoard of Directors exclusive power and authority to act for and on behalf of ElectriCities, to theextent set forth in said Resolution; andWHEREAS, each of the aforementioned Resolutions provided that the Board of Directors so created would act simultaneously as the Board of Directors of Eastern, Agency No. 1, andElectriCities; andWHEREAS, since the adoption of the aforementioned Resolutions, the Board ofDirectors has served as the Board of Directors of Eastern, Agency No. 1, and ElectriCities andhas governed the business and affairs of each of said agencies, to the extent of the power andauthority set forth in the aforementioned Resolutions; andWHEREAS, this Board of Commissioners desires to provide that the Chairman of theBoard of Commissioners of Eastern, and the Chairman of the Board of Commissioners ofAgency No. 1, shall each serve as Ex Officio Members of the Board of Directors; andWHEREAS, this Board of Commissioners, subject to the terms and conditions of thisResolution, desires to amend Section 4 of Resolution R-8-95, as set forth below, to provide thatthe Chairman of the Board of Commissioners of Eastern and the Chairman of the Board ofCommissioners of Agency No. 1, each shall serve as Ex Officio Members of the Board ofDirectors; andRALEIOHII140129-00215'74194v5 01106/2009
: WHEREAS, the Board of Commissioners believes that such amendment is in the bestinterests of Eastern and its Participants.
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of Eastern:Section 1. Section 4 of Resolution R-8-95 is hereby amended and restated in itsentirety as follows:"Section
: 4. Directors Elected by Eastern:
Qualifications, Method of Election,
: Removal, Vacancies, Compensation.
(a) The provisions of this Section shall apply only to the six (6) Directors elected byEastern.
Four (4) Directors, at the time of their election and at all times during their terms, shallbe either (i) an electric utility ratepayer of a Participant of Eastern, (ii) an elected, or appointed official of a Participant of Eastern, or (iii) an employee of a Participant of Eastern.
Two (2) ofthe Directors having the qualifications described in the preceding
: sentence, and one (1) of theremaining two (2) Directors, shall be elected by the weighted vote of the Board ofCommissioners present and entitled to vote thereon, and the remaining three (3) Directors shallbe elected by a majority vote of the Board of Commissioners present and entitled to vote thereon.Directors shall serve at the pleasure of the Board of Commissioners and may be removed, at anytime and for any reason, with or without cause, by the Board of Commissioners.
Removal of aDirector shall require the same vote of the Board of Commissioners as was required to elect suchDirector.
If any Director dies, resigns, is removed, or otherwise is incapable of serving or is nolonger qualified to serve the balance of the term for which such Director was elected, theresulting vacancy shall be filled by the Board of Commissioners as expeditiously as possible.
Each such successor Director shall be elected in the same manner and be subject to the samequalifications, if applicable, as the predecessor Director.
(b) The Chairman of the Board of Commissioners of Eastern and the Chairman of theBoard of Commissioners of Agency No. 1 shall each serve as Ex Officio Members of the Boardof Directors, and as such, shall be entitled to the privileges of a statutory member of the Board ofDirectors, subject to the following:
(i) Each Ex Officio Member shall be allowed to attend meetings of the Boardof Directors and participate in the discussions of items on the agendas of such meetings, but an Ex Officio Member shall not be allowed to vote on any matter coming before theBoard of Directors or before any committee of the Board of Directors, or to make anymotion regarding any matter before the Board of Directors or before any committee ofthe Board of Directors.
(ii) Each Ex Officio Member may be reimbursed for his or her ordinary andnecessary expenses incurred in the execution of his or her duties as an Ex OfficioMember of the Board of Directors, subject to the same requirements and restrictions asapply to reimbursement of expenses of statutory members of the Board of Directors.
AnEx Officio Member shall not be entitled to compensation for the execution of his or herduties as an Ex Officio Member.2B.ALELOH/I40129.OOMi74884v 01/06/2009 (iii) Unless otherwise directed by a majority of the statutory members of theBoard of Directors or prohibited by law with respect to public records or publicinformation, an Ex Officio Member shall be allowed access to information that is deemedconfidential by the Board of Directors (or by a committee of the Board of Directors respecting committee information).
(iv) Unless otherwise directed by a majority of the statutory members of theBoard of Directors, an Ex Officio Member shall be allowed to participate in or attendexecutive or closed sessions of the Board of Directors (or of any committee of the Boardof Directors),
unless otherwise directed by a majority of the statutory members of theBoard of Directors (or of the committee).
(v) An Ex Officio Member may not be elected as an officer of the Board ofDirectors.
(vi) At the request of an Ex Officio Member, the Chairman of the Board ofDirectors may appoint the Ex Officio Member as an ex officio member of any standingcommittee of the Board of Directors.
(vii) An Ex Officio Member shall not be authorized to consult with or request alegal opinion of counsel to the Board of Directors or any committee.
(viii) An Ex Officio Member shall observe all rules, regulations and policiesapplicable to statutory members of the Board of Directors, and any other conditions, restrictions or requirements established or directed by a majority of the statutory members of the Board of Directors."
Section 2. This Resolution shall become effective upon the adoption of a resolution by Agency No. 1 and ElectriCities containing essentially the same provisions as are set forth inthis Resolution, or containing such other provisions as this Board of Commissioners mayapprove by Resolution.
Section 3. A certified copy of this Resolution shall be delivered to the Chairman ofAgency No. I and the Chief Executive Officer of ElectriCities as soon as practicable afteradoption.
This the 28t" day of January, 2009./hairman0erST:r r3RALEIGHII40129-00215748945 01/06/2009 Section 3.1.5Seller's Required Consents1. The NCUC Approval2. The NRC Approvals
: 3. Consent of the North Carolina Local Government Commission to the issuance bySeller of bonds to refinance the portion of Seller's existing Indebtedness outstanding under the Bond Resolution that will not be defeased by the payment of the PurchasePrice.4. The Municipalities' Consent from the governing bodies of each of Seller'sParticipants (which are listed on Section 3.1.2 of this Seller's Disclosure Schedule)
: 5. The Bond Legislation CHIAR2\1603952v3 Section 3.1.7Non-Compliance with LawsNoneCHAR2\1603952v3 Section 3.1.8Title Exceptions to Purchased Assets (other than Seller's Interests)
NoneCHAR2\1603952v3 Section 3.1.9Title Exceptions to Seller's Interests See AttachedCHAR2\1603952v3 Section 3.1.9Title Exceptions to Seller's Interests Harris Interest1. Real property taxes for the year 2015 and subsequent years.2. Easements, covenants, restrictions,
: defects, encumbrances and other matters of record.3. Matters that would be shown by a current survey and/or inspection of the Harris Property.
: 4. Laws, regulations or ordinances relating to zoning, environmental protection, subdivision, occupancy, use, construction or development of the Harris Property, including but not limited to any existing violations thereof.5. Easements granted to Norfolk Southern Railway Company in deed recorded in Book 424,Page 156, Chatham County Registry.
: 6. Right of Way Agreement in favor of NC Department of Transportation recorded March27, 1985 in Book 3451, Page 361, Wake County Registry.
: 7. Right of Way Agreement in favor of NC Department of Transportation recorded April 5,1985 in Book 3458, Page 402, Wake County Registry.
: 8. Right of Way Agreement in favor of NC Department of Transportation recorded April 18,1985 in Book 3464, Page 754, Wake County Registry.
: 9. Right of Way Agreement in favor of NC Department of Transportation recorded May 21,1997 in Book 7472, Page 501, Wake County Registry.
: 10. Right of Way Agreement in favor of NC Department of Transportation executed byCarolina Power & Light Company and North Carolina Eastern Municipal Power Agencyrecorded January 5, 1999 in Book 8223, Page 2548, Wake County Registry.
: 11. Deed of Easement from Carolina Power & Light Company, a North Carolina publicservice corporation d/b/a Progress Energy Carolinas, Inc., and the North Carolina EasternMunicipal Power Agency to the Town of Holly Springs recorded October 26, 2011 inBook 14511, Page 864, Wake County Registry.
: 12. Memorandum of Action recorded April 24, 2012 in Book 14738, Page 230, Wake CountyRegistry, in connection with pending Civil Action filed April 13, 2012 in File Number12-CVS-5070 of the office of the Wake County Clerk of Superior Court, Department ofTransportation
: v. Carolina Power & Light Company and NCEMPA.CHAR2\I603952v3
: 13. Stormwater Agreement recorded January 15, 2013 in Book 15103, Page 2668, WakeCounty Registry.
: 14. Maps recorded in Book of Maps 2013, Pages 52-53, Wake County Registry.
CHAR2\1603952v3 Section 3.1.9Title Exceptions to Seller's Interests Brunswick 1 Interest1. Real property taxes for the year 2015 and subsequent years.2. Easements, covenants, restrictions,
: defects, encumbrances and other matters of record.3. Matters that would be shown by a current survey and/or inspection of the Brunswick Property.
: 4. Laws, regulations or ordinances relating to zoning, environmental protection, subdivision, occupancy, use, construction or development of the Brunswick
: Property, including but not limited to any existing violations thereof.5. Matters shown on maps recorded in Map Cabinet M, Page 392; Map Cabinet 53, Page 23;Map Cabinet 60, Pages 54-55; Map Cabinet 63, Page 27 and Map Cabinet S, Pages 359-362, Brunswick County Registry.
: 6. Instrument of Combination recorded in Book 3002, Page 479, Brunswick CountyRegistry.
: 7. Easement Deed to Pfizer, Inc. recorded in Book 654, Page 432, Brunswick CountyRegistry.
: 8. License Agreement with Cogentrix Carolina Leasing Corporation recorded in Book 698,Page 365, Brunswick County Registry.
Deed and Assignment of Easements recorded inBook 712, Page 849, Brunswick County Registry.
Consent and Agreement recorded inBook 791, Page 1097, Brunswick County Registry.
: 9. Lease to Brunswick County recorded in Book 1144, Page 1175, Brunswick CountyRegistry, amended by Lease Amendment recorded in Book 1220, Page 107, Brunswick County Registry.
: 10. Easement in favor of Town of Caswell Beach recorded in Book 2952, Page 1204,Brunswick County Registry.
: 11. Deed of Easement in favor of City of Southport recorded in Book 2977, Page 897,Brunswick County Registry.
: 12. Easement in favor of Town of Yaupon Beach recorded in Book 961, Page 248, Brunswick County Registry.
CHAR2\I603952v3
: 13. Deed of Easement to NC Department of Transportation recorded in Book 709, Page 464,Brunswick County Registry.
CHAR2\I603952v3 Section 3.1.9Title Exceptions to Seller's Interests Brunswick 2 Interest1. Real property taxes for the year 2015 and subsequent years.2. Easements, covenants, restrictions,
: defects, encumbrances and other matters of record.3. Matters that would be shown by a current survey and/or inspection of the Brunswick Property.
: 4. Laws, regulations or ordinances relating to zoning, environmental protection, subdivision, occupancy, use, construction or development of the Brunswick
: Property, including but not limited to any existing violations thereof.5. Matters shown on maps recorded in Map Cabinet M, Page 392; Map Cabinet 53, Page 23;Map Cabinet 60, Pages 54-55; Map Cabinet 63, Page 27 and Map Cabinet S, Pages 359-362, Brunswick County Registry.
: 6. Instrument of Combination recorded in Book 3002, Page 479, Brunswick CountyRegistry.
: 7. Easement Deed to Pfizer, Inc. recorded in Book 654, Page 432, Brunswick CountyRegistry.
: 8. License Agreement with Cogentrix Carolina Leasing Corporation recorded in Book 698,Page 365, Brunswick County Registry.
Deed and Assignment of Easements recorded inBook 712, Page 849, Brunswick County Registry.
Consent and Agreement recorded inBook 791, Page 1097, Brunswick County Registry.
: 9. Lease to Brunswick County recorded in Book 1144, Page 1175, Brunswick CountyRegistry, amended by Lease Amendment recorded in Book 1220, Page 107, Brunswick County Registry.
: 10. Easement in favor of Town of Caswell Beach recorded in Book 2952, Page 1204,Brunswick County Registry.
: 11. Deed of Easement in favor of City of Southport recorded in Book 2977, Page 897,Brunswick County Registry.
: 12. Easement in favor of Town of Yaupon Beach recorded in Book 961, Page 248, Brunswick County Registry.
CHAR2\1603952v3
: 13. Deed of Easement to NC Department of Transportation recorded in Book 709, Page 464,Brunswick County Registry.
CHAR2\1603952v3 Section 3.1.9Title Exceptions to Seller's Interests Mayo InterestI. Real property taxes for the year 2015 and subsequent years.2. Easements, covenants, restrictions,
: defects, encumbrances and other matters of record.3. Matters that would be shown by a current survey and/or inspection of the Mayo Property.
: 4. Laws, regulations or ordinances relating to zoning, environmental protection, subdivision, occupancy, use, construction or development of the Mayo Property, including but not limited to any existing violations thereof.5. Easements to Piedmont Electric Membership Corp. recorded in Book 313, Page 528 andBook 495, Page 726, Person County Registry.
: 6. Temporary Easement to NC Department of Transportation recorded in Book 829, Page683, Person County Registry.
: 7. Matters shown on map recorded in Carolina Power & Light Company Plat Book at pages30-41, Person County Registry.
: 8. Right of Way Agreement in favor of NC Department of Transportation recorded in Book199, Page 253, Person County Registry.
CHAR2\1603952v3 Section 3.1.9Title Exceptions to Seller's Interests Roxboro 4 Interest1. Real property taxes for the year 2015 and subsequent years.2. Easements, covenants, restrictions,
: defects, encumbrances and other matters of record.3. Matters that would be shown by a current survey and/or inspection of the RoxboroProperty.
: 4. Laws, regulations or ordinances relating to zoning, environmental protection, subdivision, occupancy, use, construction or development of the Roxboro Property, including but not limited to any existing violations thereof.5. Matters shown on map recorded in Carolina Power & Light Company Plat Book at Pages1-12, 42 and 44, Person County Registry.
: 6. Right-of-way of railroad adjoining the Roxboro Property, as described in deeds recordedin Book 170, Page 316; Book 171, Page 824; Book 172, Page 310; Book 172, Page 724and Book 174, Page 119, Person County Registry.
CHAR2\1603952v3 Section 3.1.10Seller's Indebtedness Related to Purchased AssetsPower System Revenue Bonds (December 31, 2013)SeriesSeries 1991 ASeries 1993 BSeries 2003 ESeries 2005 ASeries 2008 ASeries 2008 BSeries 2008 CSeries 2009 ASeries 2009 BSeries 2009 CSeries 2009 DSeries 2010 ASeries 2012 ASeries 2012 BSeries 2012 CSeries 2012 DPar Amount$ 28,755,000 333,545,000 4,195,000 124,400,000 317,595,000 41,845,000 30,480,000 52,435,000 364,160,000 6,650,000 13,195,000 146,145,000 79,100,000 170,705,000 29,385,000 126,865,000 CHAR2\1603952v3 Section 3.1.11Contracts Relating to the Development, Design,Construction, Ownership, Operation or Maintenance of the Purchased Assets (other than the Plants Agreements)
NoneCHAR2NI603952v3 Section 3.1.12Seller's Plants PermitsNCUC Order Authorizing Sale and Granting Certificate of Public Convenience and Necessity, dated November 18, 1981LicensesBrunswick Steam Electric Plant Unit I Facility Operating License DPR-71, dated January 1985Brunswick Steam Electric Plant Unit 2 Facility Operating License DPR-62, dated January 1985Shearon Harris Nuclear Power Plant Unit I Facility Operating License NPF-63, dated October24, 1986Brunswick Steam Electric Plant Unit 1 Renewed Facility Operating License DPR-71, dated June26, 2006Brunswick Steam Electric Plant Unit 2 Renewed Facility Operating License DPR-62, dated June26, 2006Shearon Harris Nuclear Power Plant Unit I Renewed Facility Operating License NPF-63, datedDecember 17, 2008CHAR2\1603952v3 Section 3.1.14Value of Seller'sNuclear Decommissioning Trust Funds(December 31, 2013)Generating FacilityHarris PlantBrunswick I PlantBrunswick 2 PlantSub-Total Accrued InterestTotalFund Balance$49,167,786.21 91,053,834.94 98,872,945.90
$239,094,567.05 460,018.90
$239,554,585.95 CHAR2\1603952v3 SCHEDULE 3.2PURCHASER'S DISCLOSURE SCHEDULETOASSET PURCHASE AGREEMENT BY AND BETWEENDUKE ENERGY PROGRESS, INC.ANDNORTH CAROLINA EASTERN MUNICIPAL POWER AGENCYDATED AS OFf'ý4hq,"
_..-9 ,2014CHAR2\1607186v1 INDEX TO SCHEDULE 3.21Section 3.2.5 -Purchaser Required Consents1 Unless the context indicates otherwise, capitalized terms used in this Schedule 3.2 have the meanings given themin the Asset Purchase Agreement by and between Duke Energy Progress, Inc. and North Carolina Eastern Municipal Power Agency, dated as of , 2014.CHAR2\1607186vI Section 3.2.5Purchaser Required Consents1. The NCUC Approval2. The NCUC Rate Approvals
: 3. The PSCSC Rate Approvals
: 4. The NRC Approvals
: 5. The FERC 203 Approval6. The FERC 205 Approvals
: 7. The FERC Accounting Approval8. The North Carolina Legislation
: 9. The South Carolina Legislation CHAR2\1607186vl}}

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