2010-12-03 Oglethorpe Term Sheet Revised

8/6/2019 2010-12-03 Oglethorpe Term Sheet Revised

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Department of EnergyWashington, DC 20585F eb ru ary 1 3,2 01 0

O gletho rp e P ow er C orp oratio n (A n E lectric M embersh ip C orp oratio n)2100 East Exchange PlaceT uck er, G eo rg ia 3 00 84 -5 33 6Attention: Betsy H iggins

Chief F in an cial O ffice rRe: United States Department of Energy ("DOE") Loan Gua rant ee

L ad ie s an d G en tleme n:This letter and the summary of the proposed principal term s and conditions attached

hereto as Annex A (including all exhibits, schedules and attachm ents referenced therein)(collectively, this "Term Sheet") sets forth the term s and conditions of D OE's offer to provideto Oglethorpe Power Corporation (A n Electric M em bership Corporation) (the "Com pany"),pursuant to T itle XV II of the Energy Policy Act of 2005 (Pub. L. No. 109-58), as am ended("Title XVII"), a loan guarantee in the aggregate principal am ount of up to U S$3,057,069,461(the "Loan Guarantee") on the terms and conditions set forth in this Term Sheet. By signingthis Term Sheet in the m anner provided below , the C om pany (i) c on fi rms th at it d esires to o btainthe Loan Guarantee, on the term s and conditions set forth herein, w ith respect to a loan or loans(the "G uaranteed O bligations") to be provided by the Federal Financing B ank ("FFB") an d (ii)acknowledges and agrees to its obligations set forth in this Term Sheet. The definitiveagreements between and among DOE, FFB and the Company setting forth the terms andconditions of the Loan Guarantee and the G uaranteed Obligations are referred to in this TermS heet as th e " Definitiv e A greem en ts."

Upon the due execution and delivery of this Term Sheet by the Com pany and payment ofthe portion of the "DOE Loan Facility Fee" that is due and payable upon such execution anddelivery (as provided in A nnex A ), this Term Sheet shall constitute a conditional commitm ent(the "C onditional Com mitm ent") in accordance w ith Section 609.8(b) of the Regulations (asdefined in Annex A). All provisions herein are subject to the term s and conditions of theProgram R equirem ents (as defined in A nnex A ).

The C om pany represents and w arrants to D OE as follow s:(a) the execution and delivery of this Term Sheet has been duly authorized by the

Company and the obligations of the Company set forth in the Conditional Commitm entconstitute valid, legal, and binding obligations of the C em pany; and

NY3498932.05

(b) to the know ledge of the Company, the Company's application for the LoanGuarantee (including all exhibits thereto, the "Application") and the Company's w rittenresponses to written due diligence questions from DOE (other than any forward-looking


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inform ation contained in the A pplication and such responses), are com plete and, taken togetheras a w hole, correct in all m aterial respects and do not contain any untrue statem ent of a m aterialfact or om it to state a m aterial fact necessary in order to m ake the statem ents contained thereinnot m isleading in light of the circumstances under which such statements are made. Anyforw ard-look ing info rm atio n co ntained in the A pplication and the C om pan y's w ritten resp onsesto written due diligence questions from DOE was prepared in good faith and was based onassumptions th at the C om pany b elieved to be reaso nab le.

The Com pany shall payor, at D OE's discretion, reim burse D OE or such persons as D OEm ay direct, for (a) all reasonable costs and expenses (including fees and expenses for outsidelegal counsel and consultants identified to the Company and w ith whom the Company hasentered into a fee paym ent agreem ent letter) incurred by DOE in connection w ith the negotiationand preparation of this Term Sheet, the D efinitive A greem ents and the docum ents, instrum ents,and approvals required to be delivered hereunder or thereunder, and for all o ther reasonable outof pocket costs and expenses incurred by DOE, and (b) all costs and expenses (including feesand expenses for outside legal counsel) incurred in connection w ith the collection of any am ountdue hereunder. Reasonable costs and expenses incurred by D OE both prior to and subsequent tothe date of execution of the Conditional Com mitm ent by the Com pany shall be due and payableprom ptly upon w ritten dem and by DOE .

Neither the Company, nor any of their affiliates, on the one hand, nor DOE, on the otherhand, shall issue any press release concerning the Conditional Com mitm ent w ithout the priorconsent of the other, which consent shall not be unreasonably w ithheld or delayed. Anydescrip tion of D OE, the C onditional Commitm ent, the term s and conditions thereof, or any othercircumstances concerning DOE's support for the Company or the Project shall be subject toD OE 's prior w ritten consent. T he provisions of this paragraph shall not restrict in any w ay DOE,the Com pany or any of its affiliates from m aking any disclosures w hich it or they determ ine arenecessary or appropriate to com ply w ith the requirem ents of law , including, w ithout lim itation,w ith respect to the Company and its affiliates, rules and regulations of the Georgia PublicS erv ice C omm issio n o r ap plicab le sec urities law s.

The Company shall at all times indemnify and hold harm less DOE and its officials,em ployees, advisors, agents, and servants (each, an "Indemnified Person") from and against,and reim burse su ch In dem nified P erson s fo r: (a) any and all losses, claim s, d am ages, liab ilities,penalties, costs and expenses of any kind or nature w hatsoever in any w ay relating to or arisingout of or in connection w ith the Conditional Com mitm ent to w hich an Indem nified Person m aybecome subject (each, a "Loss"); and (b) any and all claim s, litigation, investigations orproceeding s relatin g to any L oss reg ardless of w hether any In dem nified P erson is a party th ereto,and any and all costs and expenses incurred by an Indem nified Person in defending, analyzing,settlin g, or resolvin g a L oss (the "C osts of D efense"). T he foregoing indem nity shall not applyto the extent that a court or arbitral tribunal of competent jurisdiction renders a final non-appealable determ ination that a L oss or a C ost of D efense resulted from (i) the gross negligenceor w illfu l m isconduct of an Indem nified Person, or (ii) DOE 's failu re to p erform an y act requ iredof it under the Conditional Comm itment. The foregoing indemnity is independent of and inaddition to any other rights of any Indemnified Person in connection w ith any Loss or Costs ofD efense hereunder, under any other agreem ent, or at Jaw . Each Indem nified Person shall havethe right to control its, h is or her defense. Each Indemnified Person agrees to (x) notify the

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Company promptly after its, his or her receipt of a notice of the commencement of any claim,investigation or proceeding for which indemnification will be sought from the Companypursuant to this paragraph and (y) keep the Company reasonably informed of materialdevelopments with respect thereto. The Company may, at any time and at its own expense, electto participate in the defense of any claim for which indemnification will be sought from theCompany. The Company shall not have any liability with respect to any settlement orcompromise of any claim or proceeding effected without its prior written consent, which shallnot he unreasonably withheld, nor shall the Company be liable for the fees and disbursements ofmore than one firm of attorneys in connection with the same matter in the same jurisdiction forall Indemnified Persons, unless it would be necessary or desirable to retain multiple firms ofattorneys as a result of the interests of such Indemnified Persons not being fully aligned. Theobligations in this paragraph shall survive execution and delivery of the Definitive Agreements.

If for any reason the Definitive Agreements are not executed and delivered on or beforethe earlier of December 31,2012 or three months after issuance of the COL (as defined in AnnexA), DOE's obligations under the Conditional Commitment shall terminate, unless extended byDOE in its sole discretion. In addition, without limiting DOE's rights under the ProgramRequirements, DOE may, at any time, by written notice to the Company, revoke this Term Sheetor terminate the Conditional Commitment, as applicable, terminate its obligations hereunder, orpursue any and all rights and remedies then available to DOE upon the occurrence of any of thefollowing: (a) the Company fails or refuses to comply in a timely manner with any of the terms,provisions, or conditions of the Conditional Commitment; (b) DOE, in its reasonable judgment,determines that a material adverse change has occurred or is reasonably likely to occur in the (i)business, properties, or financial condition of the Company or the Project (as defined in AnnexA), (ii) ability of the Company to carry out the Project or to perform its respective obligationshereunder or under the Definitive Agreements, or (iii) condition or value of any materialcollateral security; (c) any of the information, data, representations, or other materials submittedto DOE by or on behalf of the Company contains any inaccuracy, omission, or misrepresentationthat is material to DOE's decision to provide the Loan Guarantee on the terms set forth herein;(d) it becomes unlawful for DOE or FFB to make or maintain any-commitment to extend creditor allocate funds to the Company for the Project due to the adoption of, change in, change in theinterpretation of, or change in the effectiveness of, any applicable law after the date of this TermSheet; (e) DOE, in its sole judgment, is not satisfied with the results of its due diligenceinvestigation; (f) a NRC (as defined in Annex A) that the COL will not beissued on or or (g) the occurrence of any event that would constitutea (as defined in Annex A). In addition, upon thirty (30) days'written notice to DOE, the Company may terminate the Conditional Commitment and itsobligations thereunder arising or incurred after the date of such cancellation. Upon any suchtermination, the Company shall pay to DOE on demand any fees, costs, expenses, or otheramounts then due hereunder.

From the date of this Conditional Commitment until execution of the DefinitiveAgreements or termination of this Term Sheet or the Conditional Commitment, as applicable, theCompany will promptly provide to DOE on an ongoing basis such information relating to theCompany, its principals, the member wholesale power contracts to which the Company is aparty, the Company's mortgage indenture, the Project and the financing thereof as may bereasonably requested by DOE.

3NY3498982.05


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The representations and warranties, and the payment, reimbursement, andindemnification provisions contained herein shall survive the execution of the DefinitiveA greem ents and any m odification, cancellation, term ination, or expiration of the C onditionalComm itm ent, as applicable, except as expressly provided in or superseded by the DefinitiveAgreements .

A ll payments due hereunder to DOE shall be paid in U .S. dollars by wire transfer inimmed ia te ly a va ila ble fu nd s a s fo llows:U .S . T re as ur y Depa rtmentABA No. 0 21 0~ 30 00 ~4 TREASNYCICTRlBNF=D89000001OBJ""'L GPO L oan N o. I 0 17 ~ F acility FeeThe Company may not assign this Term Sheet or the Conditional Commitment, asapplicable, or any rights hereunder to any person or entity. This Term Sheet and the ConditionalCom mitm ent are for the sole benefit of the Com pany and D OE, and no other person (other thanthe Indemnified Persons) shall be a direct or indirect beneficiary thereof, be entitled to rely

thereon, or have any direct or indirect cause of action or claim in connection therewith. TheConditional Commitm ent em bodies the entire agreem ent and understanding am ong the partieshereto and supersedes any prior agreements or understandings, w ritten or oral, relating to thesubject m atter hereof. The Conditional Com mitm ent may not be am ended or waived except byan instrum ent in w riting signed by each of the parties hereto.THE CONDITIONAL COMMITMENT SHALL BE GOVERNED BY, AND

CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE FEDERAL LAW OFTHE UNITED STATES OF AMERICA. TO THE EXTENT THAT FEDERAL LAW DOESNOT SPECIFY THE APPROPRlATE RULE OF DECISION FOR A PARTICULAR MATTERAT ISSUE, IT IS THE INTENTION AND AGREEMENT OF THE PARTIES HERETO THATTHE LA W OF THE STATE OF NEW YORK SHALL BE ADOPTED AS THE GOVERNINGFED ERAL RU LE OF DECISIO N.

Any legal action or proceeding with respect to the Conditional Commitment or anydocum ent related hereto m ay be brought in the courts of the U nited States of A merica located inthe D istrict of Columbia and, by execution and delivery of this Term Sheet, the Companyaccepts for itself and in respect of its property, gen erally and unconditionally, the non-exclusivejurisdiction of the aforesaid courts. The Com pany hereby accepts venue in each such court andw aiv es any right to claim inconvenience of th e forum .

EACH OF DOE AND THE COMPANY WAIVES ANY RIGHT TO HAVE A lUR YPARTICIPATE IN RESOLVING ANY DISPUTE ARISING OUT OF, IN CONNECTIONWITH, OR RELATED TO, THE CONDITIONAL COMMITMENT OR ANY OTHERINSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED INCONNECTION HEREW ITH OR THE TRANSACTIONS RELATED THERETO.This Term Sheet may be executed in separate counterparts, each of which shall be an

original, and all of w hich taken together shall constitute one and the sam e agreem en t.

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If thi!> Term S~ correctly sets f o r t n our understanding p\ease i n d i c n t r . : youracknowledgcmtnl an d ag re emen t to the terms hereof by $ignin an d returning to DOE auexecuted origInal coo nterpart of thi~ Term Sheet no later than l\'1ay 17, 2010. Upon timelyre ce ip t o ( su ch siyn~ ccemerpart (b y f acsimi le with th e original to follow by ove rn ighto r lo ca lcourier) hy 00 an d payrnf ; iot (,)f t he port ion o f the "O OE Loan Facility Feet' that is due ~ndp ay ab le u pon su ch exccuuon and deli v~ry (as provided in A nnex A ), the provisions of this letterand Sections 1 6 an d 2 9 o f' A nn ex A sh all co nstitute an effe ctiv e a nd leg ally b in ding ab'TCernenlbetween the parties as of' th e dale hereof. T he Company may request an extension .tlf the dateupon which e xecu tion o f this T erm S hee t is re qu ire d, E xt e ns io n of this Term Sheet ~hnl1hi! atDOE 's opt ion,

t:NITED STATES DEPARTMENT OFENERGY

By:. _b~t\a m c-; .St,.~~,nChpT itle: S ecretar),ACKNOWLEDGED AND AGREED TO.as of the date of this T erm S heet:OGLETHORPE PO'VERCORPORA TJON (AN ELtCfltlCMEMBERSH IP CORPORATION)

-)~4Z-y;Name:" I C W :


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1. Parties Borrower: Oglethorpe Power Corporation (An ElectricM em bersh ip C orp oratio n), an electric m em bersh ip co rp orationorganized and existing under the law s of G eorgia.

ANNEXATO DOE LOAN GUARANTEE LETTERSUMMARY OF TERM S AND CONDITIONS

T his term sheet ("Term Sheet") is a summary of the proposed principal term s and conditions for.aU .S. Dep artm en t o f E nerg y ("DOE') gu aran tee o f a lo an to O gleth orp e P ow er C orp oratio n (AnElectric Mem bership C orporation) (the "Borrower") made by the Federal Financing Bank("FFB"), pursuant to Title X VII of the Energy Policy A ct of200S, as am ended eTitle xV/r).The comp lete an d final te rm s a nd c on ditio ns will be se t forth in appropriate docum entation (the"Definitive Agreements") , which will be negotiated by DOE, FFB and the Borrower( co lle cti ve ly , t he "Parties") . Capitalized terms used but not defined in this Term Sheet have themeanings given to such term s (as of the date hereof) in the final regulations located at 10 C .F.R .Part 609 prom ulgated by DOE to im plem ent T itle X VII (the URegulations'lAll provisions of this Term Sheet are subject to the following: (i) the provisions of T itle X VlIand the Regulations, and (ii) all DOE or FFB legal and financial requirements, policies, andprocedures applicable to the Title XVII program from time to time (the "ProgramRequirements," except that from a nd a fte r the date that th e De fin itiv e Ag reements ar e enteredinto, th e te rm "Prog ram Requirem ents" shall not include D OE or FFB requirem ents, policies andprocedures r ef er enced a t s ubsect ion (ii) of the definition not having the force of law ).

Eligible Lender: FFB, an instrum entality of the U nited Statesgovernment created by the Federal F inancing Bank Act of1973 that is under the general supervision of the Secretary ofTreasury.Loan Servicer: FFB , DOE, o r su ch o th er. fin an cia l in stitu tio nselected by DOE in i ts s ole d is cr et ion .

2. Project The construction of an approximately 2,214 MW nuclearg enera ti ng fa cil it y in accordance with the Project Plans (asdefined below), utilizing the W estinghouse APlOOOtechnology, and located approximately 30 m iles south ofA ug usta, G eo rg ia, in clu din g asso ciated transm issio n facilitiesand fuel (the "Project'). The P ro je ct will be com prised of tw ou nits (th e "Units"). The APIOOO is a p ressu rized w ater reactorw ith passive safety system s, designed to achieve and m aintainsafe shutdow n in case of design-basis accidents withoutoperator action, AC power or pumps. The Borrower owns a30% undivided interest in the Project (the "UndividedInterest'), and Georgia Power Company (uGPCt) owns a45.7% undivided interest, Municipal Electric Authority ofGeorgia or various subsidiaries of Municipal ElectricAuthority of G eorgia ("MEA 0") owns a 22.7% undivided

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3. FFB Credit Facility

NY3 - 4 9? 11 9. 07

in te re st, a nd the City of D alton (UDaltoni owns a 1.6%und iv ided inte re st (co llecti ve ly , the B orrow er, O PC ; MEAGand Dalton are referred to as the "Owners") .The B orrow er w ill provide, or cause to b e- provided, detailedproject plans that have been approved by the United StatesNuc lea r R eg ula to ry Commis sio n (th e "NRC') an d any otherregulatory. a uth ority th e ap pro va l o f which is r equir ed by Jawfor the design, construction, equipping, operation andm aintenance of the Project (the "Project Plans'), includingwithout - limita tion enginee ring - and co ns tru ctio n p la ns,operating and ma in tenanc e p lans and/or managemen t p la ns .Such Project Plans m ay be rev ised f rom time to time by theBorrowe r o r the Ope ra to r ( as d ef in ed b elow) sub je ct to r ec eip to f a ny re qu ire d approvals of the NRC and any other regulatoryauthori ty the approval o f whic h is re qu ire d b y law.Southern Nuclear Operating Company, a wholly-ownedsub sidiary of T he Southern Compan y (th e uOperator") , w inoversee construction of and operate the P roject on behalf ofthe Owners. The O perator w ill be the holder of the com binedconstruction permit and opera ting l icense (the "COL', issuedby the NRC. The Operator currently operates the VogtleE lectric G enerating P lants U nits 1 and 2, as w ell as four othernuclear unit s.The Borrow er w ill provide detailed plans for financing all ofthe estim ated costs attributable to the Borrower's UndividedInterest in the Project ("O PC Bose P roject C osts'). TheBorrower date o f this Term Sheet that suchcosts set forth on Schedule I attachedhereto. As used herem, "O PC O verrun P roject C osls" shallmean the portion of costs attributable to the Borrow er'sU ndivided In terest in the Pro je ct, if any,' in excess of opeBase P ro je ct Cos ts .A loan from FFB (the "Guarnn te et l Lonn" ) a vaila ble to th eB orrow er in the principal amount (the uG un ra nte ed L oa nAmOlmf') of up to the lesser of (i) $3,057,069,461 and (ii)700A of Eligible Project Costs, as set forth on Schedule 11attac he d h ere to . A s u se d h erein , "E li gib le Pro je ct Co s ts " shallmean those portions of ope Base Project Costs that areeligible for funding as "Project Costs" as defined in theRegulations. Amounts borrowed and repaid may not bereborrowed, . .

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NY3.499119,01 3

4. Funding Commitments A ll portions of ope Base Project C osts that are not E lig ibleProject C osts, p lu s tho se p ortio ns o f E ligible Pro ject C osts forwhich the Guaranteed Loan Amount is not available("Ineligihle Project Costs") shall be paid by the B orrow er,The Borrower shall (i) fund its U ndivided Interest in th eProject ("Base Funding") in an am ount not less than 1 00% o fal l Inelig ible Project Costs (the "Base FlIndingCommument'), and (ii) fund 100% of ope Overru n P ro je ctC osts (the "Overrun Funding Commitmenf') from so urcesother than the Guaranteed that follow ing theas provided in

th is T e.nn Sheetto fund th

5. DOE Guarantee An un con ditio nal g uarantee b y DOE (the ~'DOEGllarantee")of 100% of the principal of and interest on the GuaranteedL oan (th e "Guarmlfeetl Ohligations") in accordance w ith theProgram Requirem ents and on term s and conditions as agreedwithFFB.

6. FuJI Faith and Credit The DOE Guarantee will be irrevocable and unconditional andw ill pledge the full faith and credit of the United States ofAmerica to th e paym en t o f the G uaranteed O blig atio ns,

7. Availability of Funds Subject to the terms of the Definitive Agreements, advances ofthe G uaranteed Loan (each an "Advance") m ay be requ estedfrom time to time during the period from (x) the date of thesatisfaction of the conditions to the initial A dvance through(y) a date to be agreed in the Definitive Agreements (the'~vailnbility Period").

8. Use of P roceeds The proceeds of Advances w ill be used to p ay E lig ib le P ro je ctCosts in accordance w ith a financial plan and constructionbudget to be subm itted by the Borrower. The Borrower w illprovide updated financial plans and construction budgets toDOE each quarter, unless there have been no changes to thepreviously delivered plans and budgets, in which case theBorrower will notify DOE that no changes have been made ..The Borrower shall request an Advance by subm itting anAdvance request to DOE. The Borrower w ill certify in eachA dvance request that the am ounts are to be borrow ed: (i) topay Eligible Project Costs then due and payable, or (ii) toreim burse the Borrow er for E lig ible Project Costs that havebeen previously paid and have not been the subject of a priorAdvance, in each case in accordance w ith the financial planand construction budget subm itted by the Borrower. Each


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9. Amortization; Term

10. Interest Rate; LateCharge Rate

Advance r eque st will provide sufficient detail of the subjectE ligible P roject C osts and include w ire transfer instructionsand copies of invoices or other supporting docum entationsatisfactory to DOE . E ach A dvance request will be rev iewedand certified by MPR A ssociates, Inc., or such otheren ginee ring finn sele cted by DOE in its sole discretion (the"DOE E ng in ee r" ). The D OE Engineer will be permitted toconduct reasonable perio dic in sp ec tio ns o f the Pro ject duringcon str uc tio n. Amounts r eque ste d in any Advance r eque st w iUbe funded by FFB w ithin five bu sin ess day s fo llow in g receiptby FFB of (i) an Advance r eque st from th e Borrower, and(ii) an Advance approval notice from DOE. DOE shallpromptly review each A dvance request and, after such rev iewand receipt of all necessary .an Advance notice.

T he o utstan din g p rinc ip al amoun t of the Guaran tee d Loan w illbe p aya ble in acco rd an ce w ith S ch ed ule III, w ith in stallmen tsof principal commencing on a date to be agreed in th eDefinitive the shall notbe

The interest rate on each Advance may be a fixed rate or afloating rate as selected by the Borrower at the tim e of suchAdvance. The interest rate on each Advance (each suchinterest rate, an " Ad va nc e In te re st R ate ") will be a rate perannum equal to the sum of (x) the single equivalent rate of theAdvance repayment stream determined from Treasury's"Cons ta nt Ma tu rity T re asury" curve , ta kin g in to con sid era tio nthe shortest maturity Treasury bill being then currentlyauctioned, up through the Constant M aturity Treasury ratecorresponding to the period from the date of such Advance tothe final m aturity of the G uaranteed L oan, plus (y) a spread tob e calculate d p rior to closing , to be d ete rm ined in ac cord anc ew ith FFB polic y guid elin es .The Borrow er m ay select m ultiple interest rate calculationperiods for each A dvance in accordance w ith F FB policies andprocedures; w hereby the interest rate calculation method and

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11. Interest Payments

NY3 .499119.07

in te re st ra te p erio d may b e re se t p erio dic ally fo r a ny p artic ula rA dvance; provided, tbat each A dvance shall have only oneAdv an ce In te re st R ate a t any given tim e. T he B orrow er m ayre qu est m ultip le Adv an ce s o n th e same Adv an ce re qu est d ate,e ac h Adv an ce w ith a se para te in te re st ra te c alc ula tio n p erio d.A ny su ch in terest rate resets shall n ot be considered amountsrepaid an d rebo rro wed for purpo ses of S ection 3 (FFB C r ed itFacility) of this Term Shee t.A ll overdue am ounts on the G uaranteed Loan will accruein te rest a t a late cha rge r ate ( th e " La te C lIa rg e R aten) e qu al toone and one-half times the rate to be determ ined by theSecretary of the Treasury taking into consideration thep re va ilin g m ark et y ield o n th e rema in in g m atu rity o f th e mostre cent ly auct ioned 13 -week Un ited S ta te s T reas ur y b ill s.T he in itial L ate C ha rg e R ate sh all b e in e ffec t u ntil th e e arlierto occur of either (A) the date on which payment of theoverdue am ount and the am ount of the accrued late charge ismade; or (B) the first Interest Paym ent Date or PrincipalP ayme nt D ate to o ccu r a fte r th e sc he du le d d ate o f p ayme nt fo rsuch overdue am ount. In the event that the overdue am ountand the am ount of the accrued late cbarge are not paid on orb efo re s uc h In te re st P aymen t Da te o r P rin cip al P aymen t Da te ,then the am ount payable shall be the sum of the overdueam ount and the am ount of the accrued late charge, plus a latecharge on such sum accruing at a new Late C harge R ate to beth en determ ined in accordance w ith th e precedin g sen tence.For so long as any overdue am ount rem ains unpaid, the L ateC harge R ate shall again be redeterm ined on each InterestPayment D ate or P rincipal P aym en t D ate, as th e case m ay b e,an d shall be app lied to the o verdue am oun t an d all am ou nts ofthe accrued late charge to the date on w hich paym ent of theov erdu e am oun t and all am oun ts of the accru ed late charge ismade.In terest w ill accru e from the first A dv an ce an d be payable incash in arrears on each date interest is due under the FFBProm issory Note (each such payment date, an "InterestPayme Jl t Da te ") .Interest on each A dvance shall be com puted on the basis of(a) actual days elapsed from (but not including) the date onw hich the respective A dvance is m ade (for the first InterestP aymen t D ate fo r th e re sp ectiv e Adv an ce ) 01 ' t he la st In te re stP ayme nt D ate (fo r a ll o th er p ayme nts o f in te re st d ue u nd er th eFFB Prom issory N ote for the respective A dvance), to (and

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NYJ 499119.01 6

12. DOEFees

including) th e next Interest Paym ent Date, and (b) a year of365 days.The Borrower ha s paid or will pa y the following fees to DOE(col lec tive ly , the "DOE Fee s" );Ap_p lic atio nFee: An app lic atio n f ee o f $800,000 (wh ich DOEa ck nowled ge s th at it h as re ce iv ed in two W tyments , th e first o nJuly.Zl, 2008 in the am ount of $200,000 and the second onDecembe r 19,2008 in th e amount o fS600,OOO);POE Loan Facility Fee: A facility fee equal to 0.5% of theGua ra nte ed Loa n Amount, 2 0 0 1 0 of w hich is payable upon theexecution of this Term Sheet and 80010of which is payable no tla te r th an th e Financial Closing Da te .D OE M aintenance Fee: A m aintenance fee payable to D OEfo r DOE's administrative expenses in servicing andm onitoring the Project and the Guaranteed Loan during thecon struction, startup, comm ission in g and operation' of theProject in the amount of_for the first year, subject toescal at ion each year a s d eterm in ed in th e f ollowin g sentence,until c omple tio n o f th e s ec on d re fu elin g o uta ge fo r t.hPro ee tat w hich tim e the main te nan ce fe e s ha ll b e re se t atsub je ct to escalation ea ch y ea r as determined in the 0 owingsentence for each over the scheduled term ofthe Guaranteed Loan.

meansquarter given calendar year andUECr ' means th e Employment C ost Index, as publish ed by theBureau o f L abo r Sta ti st ic s for the rel evan t per iod .DOE Modification F ee: A modification fee payable to DOEin the event that the Project experiences technica l, financial,legal, or other events which require DOE to incur time orexp en se s ( in clu ding third-party expenses) beyond standard '


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13. Credit Subsidy

14.

NY3 .499119.07

mon ito ri ng o f th e De fin itiv e Ag reemen ts , r eimbu rs ing DOE infull fo r such am ounts as DOE reasonably d etermin es a re it saddit ional internal adminis trative cos ts , a nd r el at ed expen se so f its in de pend en t c on su lta nts a nd outsid e le ga l c ou ns el, to th eextent that such third parties are no t p aid d ire ctly by th eBorrower.T he cre dit su bsid y c ost fo r th e DOE Guarantee is the "cost of. a loan guarantee," as set f 0 1 1 h in Section 502(5)(C ) of theFederal C redit Reform Act of 1990 (the "Credit SubsidyCost"), The final Credit Subsidy Cost amount shall bedeterm ined by DOE in its sole discretion, tak ing intocon sid era ti on , among o ther th ings , the spread to T reas ur y asapplied by F FB , subject to review and approval by the O fficeof Management and Budget prior to the Financial ClosingDate,Changes to the term s of the transaction requested by theBorrower that constitute "m odifications" as set forth inFederal C redit R eform A ct of 1990 and OMB Circular A-1Im ay result in an increase of the C redit Subsidy C ost that theBorrower may be required to pay. Except if explicitlyau thorized by an act of C ongress, the B orrow er shall not useany funds obtained from the U nited States governm ent, 01 'from a Joan or other instrument guaran teed by th e U nitedStates government, to pay for the Credit Subsidy Cost,a dm in is tra tiv e fe es, o r o th er fe es charged hy 01' paid to DOEpur su an t to th e Program Requirements.The Defin itiv e

Each of the follow ing events shall be a

7


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8

(c )

(d )

(e )

in accordanceDOE 's right to exercise, or exercise of, such rem edy does notin any w ay lim it any other rights or rem edies DOE m ay haveas set forth in Section 23 (DOE C on /ro t; R em ed ie s) of this


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NY3499119.07 9

T erm Sheet or under applicable law .15. Voluntary Prepayments The Borrower may prepay all of the principal amount of anyAdvance of the Guaranteed Loan upon prior written notice to

FFB , D OE and the Loan Service)' and subject to the follow ingconditions: (i) minimum am ount requirem ents, and(ii) paym ent of (x) all ac cru ed and unpaid interest on such, p rin cip al amo un t, and (y) any fees and expenses then payable,including any prepaym ent prem ium s, discounts, or otheram ounts as m ay be required under the D efinitive A greem ents.

16. Definitive Agreements Upon execution of this Term Sheet by DOE and the Borrower;the parties agree to work to negotiate and execute mutual1yacceptable Definitive Agreem ents for the Guaranteed Loanand DOE Guarantee. The Definitive Agreements shall setforth the final terms for the Guaranteed Loan and the DOEG uarantee. The Definitive A greem ents shall include w ithoutlimitation (i) a Common T enu s A greem en t, a Loan Guaran te eAgreement, an FFB Note Purchase an FFBa DOE

an d (ii)DOE or FFB as a result

of matters specifically identified in their due diligenceinvestigation. The FFB Prom issory Note and the DOEReim bursem ent Note will be issued under and pursuant to theBorrower's Indenture dated as of March 1, 1997. w ith U.S,Bank Natio na l A ss oc ia tio n, as trustee (the "IndentureTrustee"), as amended and supplemented (the "MortgageIndenture"), such that the obligations of the Borrower underthe FFB Prom issory Note and the DOE Reimbursement Notewill be secu red by the Trust Estate (as defined in the M ortgageIndenture) on a pari passu basis w ith all other indebtednessthen 01 ' th ere after se cu re d u nd er th e Mo rtg ag e In den tu re.The execution of th e Loan G uarantee A greem ent and the .FFBProm issory Note and the issuance of the DOE Guarantee andthe DOE Reim bursem ent Note (the date of such execution andis su an ce , th e "Financial Closing Date") will be subject to allof the conditions to the funding of the initial Advance set forthin Section 17 (Cond it io n s P rec ed ent t o Ini ti al Ad van ce ) o f th isTerm Sheet.


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NY3 .499119.07 10

17. Conditions Precedent to The funding of the initial Advance will be subject to th eInitial Advance satisfaction of the following conditions, each of which must beto th e satisfac tion of DOE or FFB, as applicable:With res.pect to the Borrower :(a) DOE shall have completed its due diligence reviewwith respect to the B orrow er, an d al l matter s r el at edthereto;(b ) execu tion o f th e Definit ive Agreements ;(c) all representations and warranties shall be true and ,correct i n a ll mate ri al r espec ts ;(d) delivery of all necessary consents and w aivers from th eBorrower's current creditors and to the extentapplicable , credi t e nh an ce rs o f the Mortgage Indentureobligations an d the Rural Utilities Services (suchservic e or any agency or other governmental bodysucceeding to the func tions thereof, "R US");(e) delivery of organizational documents fo r th e Bo rrower ;(f ) delivery of secretary's certificates, resolutions andgood s tanding cer ti fi ca tes for the Borrower;(g) delivery of legal opinions, bring down cer tific ate s,reJian ce lette rs an d sim ilar d ocumen ts a s DOE or F FBmay request;(h) delivery of (i) audited f inanc ia l s ta tement s of th eB orrow er for the then m ost recently com pleted fiscalyear of the Borrower; (ii) unaudited financialstatements of the B orrow er for the then m ost recentlycom pleted fiscal quarter of the B orrow er; and (iii) acertificate of an officer of the B orrow er that no eventof default or event or circumstance that with thepassage of time or giving of notice, or both) wouldconstitute an event of default under the D efinitive

Agreements exis ts ;(i) not later than 30 days prior to the Financial C losingDate , d eliv ery of an updated credit rating from anationally recognized rating agency reflecting theCond itiona l Commitment w ithou t th e DOE Guarante e;


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(m) all conditions precedent under the Mortgage Indenturefor (i) the FFB Prom issory Note to constitute an"A dd itio nal O blig atio n" u nd er th e M ortg ag e In den tu re,(ii) the DOE Reimbursement Note to constitute a"C redit O bligation" under the M ortgage Indenture, and(iii) all Project assets attributable to the Borrow er'sUndivided

in each case, shall have beenacco ro an ce w ith th e M ortg ag e In den tu re.

0) no event 01 ' condition shall have occurred since thedate of the m ost recent financial statem ents provided toDOE prior to the Financial Closing D ate (the "ClosingDale Financial Statementsr) that has had or couldreasonably be expected to have a material adverseeffect on the business, properties, or financialc on ditio n o f th e B orrowe r;

(k) payment in full of the Credit Subsidy Cost ina cc ord an ce w ith P ro gram Requireme nts;

(1) payment of a n DOE Fees due as of the FinancialC lo si ng Da te ; an d

With resp ect to th e P ro ject:(a ) DOE shall have com pleted its due diligence review ofth e P ro ject an d all m atters related th ereto , in clu din gth at n o ma te ria l is su es exist w ith re sp ect to th e P ro je ct

or the Operator under the laws of the U nited States oran y s ubd iv is ion the reo f;(b)(c ) all representations and warranties shall be true and

correct;(d) th e D ire cto r o f th e O ffice and M anagem ent and Budgethas certified in advance in writing that the DOEGua ra nte e an d th e P ro je ct comply w ith the provisionsof the Omnibus Appropriations Act, 2009, P.L. No.

111-8, D ivision C, Title III, as amended by Section408 of the Supplemental Appropriations Act, 2009,

Ny'} 499119.07 11


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NY3.499119.01

P .L . No. 1 11 -32 ;(e) acquisition of all real estate rights and other propertyin te re sts requ ired fo r th e development o f th e P ro je ct;( 1 ) e vid en ce th at th e Owne rs h av e a va ila ble al l the patentsan d tec hn olo gy n ec essary to comp lete an d o perate th eProject;(g) delivery of environmental site assessments andassociated re liance le tte rs and satisfaction of anyadditional environmental requirements in accordancewith DOE policy set forth in the D efinitiveAgreements;(h) the Opera tor shall have received the COL and th e

relevant partie s sh all have rece ived al l environmental,regulatory and other perm its and approvals thenrequired for the current stage of developm ent of theProject, including the final env ir orunent al impac tstatem ent, the final safety evaluation report and thepub lic at ion o f a r ecord o f dec is ion. by DOE;de Jive ry o f a rep ort a nd asso ciated c lo sing c ertifica tefrom the DOE ts Engi neer;(i )

(j) execution of the "P ro je c t Doc lImen t s/ ' which sh allinclude (1) that certain Plant Vogtle OwnersAgre emen t Auth oriz in g Dev elo pmen t, Con stru ctio n,Licensing and Operation of Addit iona l Gene ra tingUnits dated as of May 13, 2005, as amended (the"Ag enc y A g re emen t') , among the Owners, (2) thatcertain Plant A lv in W . Vogtle Nuc lear U nits Amend edand R estated O perating A greem ent dated as of April21 , 2 00 6, as amended (the "OperatingAgreement),among the Owners, (3) that certain Plant Alvin W .V ogtle A dditional U nits Ownership ParticipationAgreement da ted a s of A pril 21, 2006, as am ended (the"Deve lopmen t Agreement'), am ong the O wners, (4)that certain Second Amended and R estated N uclearManaging Board Agreement dated as o f April 2 1, 20 06(the uNu cle flr Ma na gin g B oa rd A gr eem en t'), amongthe Owners, (5) the ownership agreement andope ra ting agreement w it h the Operato r w ith re spe ct tothe Project, (6) the Engineering, Procurem ent andConstruction A greem ent betw een OPC, acting foritself and as agent for the other Owners, and a

12


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18. Conditions Precedent toEach Advance

NY3 499119.07

consortium consisting of WestinghouseC om pany LtC and Stone & Webster Inc.

(k ) receipt of the Advance Schedule, th e Financial Plan,the Base Case Projections, the Construction Plan, andth e Construction Budget;

(I) not less than 30 days prior to the Financial ClosingDate , u pd ate d financing information if th e terms an dconditions of the financing arrangements changedbetween the date of execution of this Term Sheet andthe Financial Closing Date, and th e Parties shall amendthe Definitive Agreements to reflect the revised termsand conditions inthe event such revisions occur;

(m) delivery of a certification from the Borrower,certificates from insurers, and such other evidence asDOE may request (i) that the Borrower has in effectinsurance coverage for the Project that is available oncommercially reasonable terms, conditions and priceand is in accordance with normal nuclear industrypractices, and (ii) that the applicable insurance policiesare in full force a nd e ffe ct without default;

(n) evidence of the filing of all documents and taking ofal l actions required to ensure perfection of all requisitesecurity interests in the T rust Estate;

(0) evidence that notice to proceed has been issued underth e EPe Agreement; and(P ) receipt by DOE of satisfactory evidence that theBorrower has complied with all Davis Bacon

Requirements (as defined below in Section 20(e)(Aff irmat ive Covenants) of this Term Sheet).Each Advance of the Guaranteed Loan and DOE Guarantee,including the initial Advance, will be subject to thesatisfaction of the following conditions, each of which must beto th e satisfaction of DOE or FFB, as applicable:

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NY3 499119.07 14

Wi th re spec t to th e Bo rrower :(a) all representations and warra ntie s sh all be true andcorrect, and no default shall have occurred and b e

continuing; provided, how ever, that if the relevantd efa ult is o ne o f th e de fa ults re fe re nc ed in th e p ro visoat the end of Section 22 (E ven ts o f D efa ulI) of this.T erm Sheet, and sub secti on (i) or (ii) o f su ch p ro visoshan apply to such default, such default shall bedeemed not to be continuing for purposes of thisSect ion 18(a);(b) the Borrower is in compliance with the DefinitiveAgreements;(c) receipt of an A dvance request from the B orrow er;(d) payment of all DOE Fees and other fees an d expensespayable to DOE, its counsel and its advisors that areth en due ;(e) receipt of officer's certificate of the Borrower w ithrespect to the satisfaction of all of the conditionsp re ced en t id en tifie d in this Section 18 (ConditionsP re ce de nt to E ac h Advance) o f th is T erm S hee t;(f )

(g) receipt of w ritten certification from the B orrow er that(i) the Borrower has complied with the reportingrequirements of th e P rogram Requ ir ements an d (ii) th eBorrower has taken all actions an d d eliv ere d a lld oc uments a nd c ertific ate s (in clu din g to th e In dentu reTrustee) such that immediately following such.A d va nce , th e o blig ation s o f th e Borrower w ith re sp ectto such A dvance and all prior A dvances under the F FBPromissory Note are secured under the M ortgageIndenture; and

Wi th re spec t to t he P ro je ct :(a ) a ll rep re sen ta tio ns an d w arra nties sh all be true andcorrect, and no default shall have occurred and bec on tinu in g; p ro vid ed, h ow ev er, tha t if th e re lev antd efa ult is o ne o f th e d efa ults re fe re nc ed in t he prov iso


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19. Representations andWarranties

NV3 499119.01

at the end of Section 22 (Events of Default) of thisTerm Sheet, an d subsection (i) or (ii) of such provisoshall apply to such default, such default shall bedeemed not to be continuing for purposes of thisSection 18(a);(b) evidence that the Advances to be made will pay forE lig ib le P ro ject C osts th at h av e b een in cu rred , to geth er

w ith sufficient description thereof. as certified byDOE 's E ng in ee r;( c) certification by the Borrow er 'that the proceeds of allprior A dvances have been applied for Eligible ProjectCosts;(d) copies of al l governm ental approvals, perm its 01'consents not previously delivered, as time to timerequ ired for th e construction or operatio n of the Project

or as otherwise required under the TransactionDo cumen ts; a nd(e) receipt by DOE of satisfactory evidence that theBorrower has complied with all Davis BaconRequirements.T he D efinitiv e A greem ents (but not the F FB Prom issory N ote)will contain representations and w arranties (w ith custom aryqualifications and exceptions, including m ateriality) w ithrespect to th e following matters:W ith resp ect to th e B orrower:(a )(b)(c)(d)

d ue o rg an iz atio n a nd v alid e xiste nc e;good s tanding ;c orp ora te p ower a nd a uth ority ;accuracy of disclosures in reports filed with theSecurities and Exchange Commission under theSecurities Exchange Act of 1934, as amended("Exchange Acf') or w ith DOE if the Borrower is notan Exchange Ac t f ile r;

(e) as of the Financial C losing Date, capitalization,owne rs hi p a nd o rg an iz at io n ;

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(n )(0 )(p)

NY) 499119.01

(f)(g )

solvency;le ga lity , v alid ity and enfor ce ab ility o f th e T ransac tio nDocuments, subject to general enforceabilityexceptions;

(b ) no conflicts w ith charter, bylaws, contracts andapplicable laws;(i)(j )(k )

no li tigation;in debtedn es s a s o f'th e F in an cia l C lo sin g Da te ;n o ju dgmen ts o r o rd ers a ga in st th e Borr ow er th at c ou ldre aso nably b e expected to have a ma te ria l a dv er see ff ec t o n th e Bo rrowe r's f in an cia l c onditio n;

( 1 ) com pliance in a11 respects w ith Title XVII and theRegulations;(m ) com pliance in all m aterial respects w ith (i) a ll o th errequirements of law and (ii) all other ProgramR equirem ents (other than subsection (i) of thedefinition of "Program R equirem ents") (i t beingunderstood that the Borrower shall be deemed incomplian ce w ith the fore go ing for this purpose if (x )with resp ect to an y asse rtion by an y governmentala ge nc y o f n on -c omp lia nc e, th e Borr ow er is contestingin good faith by appropriate legal proceedings sucha ss ertio n th at th e Bor rowe r is not in com pliance, and

(y ) with respect to any v io la tion being cur ed pur su an tto a Remediation Plan (as defined in Section 22( Ev en ts o f De fau lt )' of this T erm S heet), the B orrow eris diligently w orking to cure such non-com pliancea ccordin g to such Remed ia tio n P lan) ;d isc losure and projec t ions;title to Trust Estate;no lien against the Trost Estate (other than theB orrow er's U ndivided Interest in the P roject) existswhich ronks prior to, or pari passu with, the liensecuring the Guaranteed Loans, except Perm ittedE xcep tio ns (as d efin ed in th e Mortgag e Ind entu re) an dother Henspermitted by t he Mor tgage Indenture;

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(z)

(aa)(bb)

NY3 .499119.07

(q ) taxes;(r) creditor and, if applicable, credit enhancers of theMortgage Indenture and RUS consents andgovernment permits and approvals;(8 ) perfection and priority of security interests with respectto the Trust Estate, including that the FFB PromissoryNote and the DOE Reimbursement Note are securedunder the Mortgage Indenture;(t) the financial statements included in the Borrower'smost recent Exchange Act filings (or most recentlysubmitted to DOE if the Borrower is not an ExchangeAct filer) present fairly, in all material respects, thefinancial position, results of operations and cash flowsof the Borrower as of and from the dates indicated, andsuch financial statements have been prepared inconformity with U.S. GAAP;(u) Employee Retirement Income Security Act of 1974, asamended e'ERlSAU), matters;(v) no default under the Definitive Agreements hasoccurred and is continuing;(w)(x)

no corrupt or prohibited practices by the Borrower; .no event having a material adverse effect on thebusiness, properties, or financial condition of theBorrower since the Closing Date Financial Statements;

(y) not required to register as an investment companyunder the Investment Company Act of 1940, asamended;based on conditions existing as of the date of suchrepresentation, th e Borrower reasonably expects thattotal funding available to the Borrower will' besufficient to fund' (i) the ope Base Project Costs and(ii) the OPC Overrun Project Costs that are reasonablyexpected to be incurred;no violation of Foreign Asset Control Regulations;the Guaranteed Loan will not finance, directly orindirectly! tax-exempt debt obligations;

17


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NY) - 499119.07

(cc) environm ental m atters;(dd) insurance; and(ee) po ssessio n o f franch ises; certificates, licen ses, pen n itsand o ther au thor izat ions neces sa ry for operat ion .

(a)(b )

(c) com pliance in all respects with Title XVII and theRegulations;(d ) com pliance in all m aterial respects w ith (i) a11otherrequirements of law and (ii) al l oth er P rog ramRequirements (other than subsection (i) of thedefinition of "Program Requirements") (it beingunderstood that the B orrow er shall he deemed in

(e) no funds, p ers onne l o r p rope rty (tang ib le o r in tang ib le )of any federal agency, instrum entality, personnel oraffiliated entity are expected to be used (directly orindirectly) through acquisitions; contracts,d emonstra tions , exchanges, g rants,' in centiv es , le as es ,procurements, sales, other transaction authority, oroth er arran gem en ts, to su pp ort the Project o r to ob taing ood s or serv ices from th e P ro ject, ex cept to the ex tentthat the Project benefits from any exem ption set forthin Omnib us App ro pria tio ns Act, 2 009, P .L . No. 111~8;Div isio n C , T itle III, a s amend ed by Section 408 of theSupplementa l App ro pria tio ns Act, 2 009, P .L . No. 1 11 -

18


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32.(f)

(g) availability and adequacy of all patents and technologyneces sa ry to comp le te and ope ra te th e P ro je ct;(h) envi ro runen ta l and safety matt er s;(i) Pro ject Documents ;0) the Borrower has delivered to DOE a current an dcomp le te c opy o f th e c on stru ctio n p la n a nd budge t;(k) disclosure of all government perm its and approvalsthen ob ta ined;( 1 ) legality, validity and enforceability against theBorrowe r o f th e T ra nsa ctio n Documen ts; a nd(m ) compliance with al l Davis Bacon Requi rement s.

20. Affirmative Covenants The Definitive Agreements shall contain the followingaffirm ative covenants (w ith custom ary qualifications andexceptions , including mater iali ty) :

NY3 - 499119. 07

With re sp ec t to th e Borrowe r:(a)(b)

us e of proceeds;ma in tenance o f corpor ate exis tence, rights , f ranchis esand authori ty;

(c ) main tenance o f f irs t p rio rity .lien in re spec t o f th e T ru stEstate;(d) p erfo rman ce o f T ra nsa ctio n Documen ts to whic h it is a

19


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party and(e) p ro visio n o f fin an cial statem ents an d o ther in fo rm ationas p ro vid ed in S ectio n 2 6 (Repor ting Requ iremen ts ) of. this T erm Sheet;( 1 )

(g ) ma in tenanc e o f r equ ir ed insur ance ;(b ) paymen t o f ta xe s, f ee s, e tc .;(i ) maintenance of natio na lly re cogn iz ed inde pe nden taud ito rs o r oth er in depen den t au dito rs acceptab le to .DOE;0) m aintenance of books and records and inspectionthereof, including such records as are necessary tof ac il it at e an eff ec tive an d accurate audit;(k ) ma in tenanc e o f properties an d title thereto;(I)

(m ) maintenance of audit provisions com plying w ith 10C.F.R. 609.1 O C t ) ; an d(n) compliance with lobbying requirem ents under 31U.S.C. 1352.

NY3 499119.01 20


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21. N egative Covenants

NY3 .499119.07

(b)

(c )

(d) maintenance of all patents and technology necessary tocomp lete an d o perate th e P ro ject;(e) compliance w ith the requirement that all laborers andmec ha nic s emp lo ye d b y c on trac to rs an d su bc on trac to rs

in the perform ance of construction w ork related to theProject shall be paid w ages at r ate s not less th an th oseprevailing on projects of a character sim ilar in thelocality as determined by the Secretary of Labor inaccordance w ith the Davis Bacon Act, and allr egu la tions r el at ed thereto, in clu din g b ut not l imi ted tothose set forth in 29 C.F.R . 5.5(a)(1) to (10), and allno ti ce , r eport ing an d o th er o blig atio ns re la te d theretoas required by DOE ( co ll ec ti ve ly , th e "Davis BaconRequirements");

(f)

(g) the Borrower will m aintain insurance coverage for theProject that is in accordance with normal nuclearindustry practices, provided that such insurancecoverage is available on commercially reasonablete rm s, c on ditio ns a nd p ric e.

The Definitive Agreements shall contain the followingnegative covenants (w ith customary qualifications andex cep tio ns, in clu din g m ateriality, it also b ein g u nd ersto od th atDOE will consider conforming the notice and approvalprocess with respect to the subject m atter of certain negativecovenants with the notice and process contained inSection 9.1 of theW ith resp ect to th e B orrower:

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(a) n o transaction s w ith affiliates th at are no t co nd ucted o neither (i) an an n's le ng th b asis o r (ii) a t cost .(b)

(c) restriction on distributions to the members of theBorrower (the "Members") as set fo rth in th e Mo rtg ag eIndenture;(d) lim itation on certain cash investm ents as set forth inth e Mor tgage Indenture;(e ) no alteratio n of character of business from that of anelectric utility company; and(f)

(b )

NY3 - 499119. 07 22


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22. Events of Default

NY). 499119.07

(g )

(c )

(d)

T he D efinitive A greem en ts shall co ntain the follow ing even tsof default (w ith customary qualifications, exceptions an dg ra ce per iod s, in cl ud ing ma te ri al it y) :W ith respect to the Borrower:(a).(b )

failure to m ake paym ents w hen due;default under any other indebtedness of the B orrow erin excess of an amount to be agreed (other than theGu ara nte ed Loa n);

(c ) failure by the Borrower to com ply w ith the prov isio nsof T itle X VII and the continuance of such failure for aperiod of 30 days; provided, how evel'~ that the failureto com ply w ith Section 1702(k) of T itle X VII shall bean event of default only if such failure continues for aperiod of 90 days;

(d) failure by the B on-ow er to com ply w ith the provisionsof the Regulations, unless such breach is capable ofbeing cured, in which case failure to cure such breachw ithin a period of 90 days, so long as the Borrower isd ilig en tly p ursu in g su ch cu re;

(e) failure by the Borrower to comply in all materialresp ects w ith (i) all o ther requirem ents of law and (ii)all o th er Pro gram R equ irem ents (other than sub section(i) of the definition of "Program R equirem ents"), andthe continuance of any such failure for a period of9 0 d ay s;

(f) breach of representations and warranties under anyDe fi ni ti ve Ag re ement ;b reach o f co ven an ts u nd er an y D efin itiv e A greem en t;

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NY3 499119 .07

(h ) failure to fund when required or other default withrespect to the Base Funding Commitment or theOverrun Fund ing Commitment ;

0 ) bankruptcy, insolvency and dissolution' of th eBorrower;G ) judgments in excess of $10 m illion against theBorrower;(k) certain ERISA events;( 1 ) impai rmen t o f securi ty interes ts in th e Trust Estate;(m) invalidity or unenforceability of the Definitive

Agreements, other than the DOE Guarantee;(n)

(0) an Event of Default.under the M ortgage Indenture hasoccurr ed and is continuing.With resp ect to the Proiect:(a) failure b y the Borrower to use the proceeds of theGuara nte ed L oan fo r E lig ib le P ro je ct Costs;(b)

(c)

(d )

2 4


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(e)

( 1 )

(g)(h )

23. DOE Control; Remedies Assignment of Rights: As ofthe Financial Closing Date, DOEshall be considered to, and shall, have the rights, powers,privileges and remedies under the Definitive Agreements ofFFB. The Borrower agrees to take post-closing directionsolely from DOE.Subrogation: On and as of any business day that the Borrowerdefau lt s under the Definitive Agreements, DOE shall have, byway of subrogation or agreement or otherwise, all of therights, powers, privileges and remedies of FFB, including,

NY3 499119,01 25


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NY3 499119 .07 26

w ith out lim ita tion , w ith resp ect to an y fees, co sts, ex pen sesand other amounts (such amounts, collectively, the"Additional Amoll"ts"); p rovided . howeve r, if a ccele ra tion o fsuch guaran teed ob liga tion has occurred under th e Mortg ageIndenture, th en such subrogation and ass ignment sha ll inc ludethe en tire g ua ran te ed amoun t o f th e g uara nte ed o blig atio ns,plus th e Additional Amounts, notw ithstanding that theSecretary shall b e o blig ated to make payment hereunder onlyin in stallm en ts o n each subsequent Principal Payment Dateand only as 10 the gua ra nte ed amoun ts. DOE's su bro ga tio nrigh ts sh all b e in addition 10 t he r igh ts assigned to it by FFB,an d shall not be the exclusive source of rights, powers,privi leges and remedies against the Borrower .R emed ie s: U po n th e occurrence and continuat ion of an Eventof Default which a ls o constitutes an event o f d efa ult u nd er theMortgage Indenture, DOE (and not FFB ) w ill h av e the rig ht,amon g o th ers, w itho ut co nsultatio n, to do any or all of thefollowing, wi thout l imi tat ion: (a ) s us pend o r te rm inate f ur th erAdvances, including any undrawn commitments and (b)subject to the term s of the M ortgage Indenture, 0) deliver anotice of default under the G uaranteed Loa n a nd /o r vote toa cc ele ra te (o r c au se the In de ntu re T ruste e to ac cele rate ) them aturity of the Guaranteed Loan, (ii) vote to cause theIndenture Trustee to take those actions necessary to perfectand maintain any or all of the securi ty interests granted by th eBorrower, (iii) se t o ff an d ap ply amo un ts to th e satisfac tion o fthe Guaranteed Obligations under all of the DefinitiveAgre em en ts, (iv ) cu re de fau lts, (v ) protect and' enforce (orcau se the In den tu re T ruste e to p ro tec t and e nfo rc e) its rig htsan d remedies by appropriate proceedings , including th e filingof proofs of claim in any bankruptcy, insolvency, or otherju dic ia ] p ro ce ed in g, (v i) e xe rc ise (o r cause the IndentureT ruste e to ex erc ise) an y an d a ll rig hts an d rem ed ies av ailab leto it under any of the Transaction Docum ents, and (vii) inaccor dance with Sec tion 609 .1O(e )(4 ) o f th e Regu la tions , takes uch o ther actions (o r cau se th e Indentu re T ru ste e 10 ta ke su chother actions) as DOE m ay reasonably require to provide forthe care, preservation, protection, and m aintenance of allcollateral so as to enable the United States to achievemaximum recovery u po n d efau lt by th e Borrowe r on th eGuarant eed Loan. Upon th e occurrence and continuation ofan Event of D efault under any G uaranteed Loan D ocum ent(w hich does not also constitute an event of default under theMortg ag e In den tu re), DOE (an d n ot F FB ) w ill ha ve th e rig ht,among others, without consultation, to do any or all of thef ol low ing, w ithou t l im ita tion: ( a) s us pend o r te rm inate further


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NY3 - 499119. 07 27

Advances; including any undrawn commitments; and (b)exercise any and till rights and remedies (other thana cce le ra tio n) av ailab le to it under the Guaranteed LoanDocuments (other than Mortgage Indenture); it beingunderstood that D OE will not be entitled to pursue rights orremedies in respect of the Trust Estate. In addition, upon thebankruptcy or insolvency of the Borrow er, the D OE shall haveth e right to term inate its commitm ent to m ake A dvances.

24. Collateral The Borrower's obligations under the FFB Promissory Noteand the DOE Reimbursement Note will be secured by a first-priority perfected security title, lien and security interest in allex isting an d after-acqu ired p rop erty an d assets co nstitutin g th eTrust Estate; including without lim itation, the Borrower'sUndivided Interest in the Project and all other Project assetsattributable to the Borrow er's U ndivided Interest, includingw it hout l im ita ti on , i nte lle ctu al p rope rty .The G uaranteed Loan will not b e subordinate to any loan oro th er d eb t obl ig atio n.T he B on -ower will bear all of the following amounts fromtime to time due under or in connection with the DefinitiveAgreements: (i) all recordation and other costs, fees andcharges in connection with the execution, delivery, filing,registration, or perform ance of the Transaction D ocum ents orthe perfection of the security interests in the Trust Estate,(ii) all fees, charges, and expenses of any independentconsultants, legal counsel, accountants, and other advisors toDOE and (iii) all other fees, charges, expenses and otheram ounts from tim e to time due under 01' in connec tion with th eDe fini ti ve Agreement s.

25. Expenses

26. ReportingRequirements The Borrower shall provide FFB, DOE and the Loan Servicerw ith th e fo llowin g re po rts:(a) monthly construction reports consistent with theBorrower's requirement of GPC (as the Borrower'sagent) to provide such reports to (i) the other O wnerspursuant to the Project ow nership agreem ents, (ii) th e

G eorgia Public Service C ommission and (iii) th e NRC ;quarterly financial statements and reports of theBorrower within 50 days after the end of each fiscalquarter, w ith such financial statem ents to be preparedin accordance with U.S. GAAP, subject to changes

(b)


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27. ReimbursementAgreement

28. Waiver ofJury Trial;Consent to Jurisdiction;GoverningLaw

NYJ 499119 .( )7

re su lting f rom aud it and norma l yea r- end adju stments ;(c) annual financial statements an d reports on or prior 10105 days after end of each fiscal year, with suchf inancial s tatements to be prepared in accordance w ithU.S. GAAP (except for changes with which theindependent auditor s ha ll concu r); and(d ) o ther neces sa ry f inanc ia l information of th e Borrowera s re aso nably re qu este d b y DOE" FFB or the LoanServicer.Ifth e Bo rrower def au lts in any paym ent due to FFB under theGuaranteed Loan or under any oth er Definitive Agreement,an d as a result o f su ch payment d efau lt by th e Borrowe r, DOEbecom es obJigated to m ake any paym ents to FFB purs uant tothe DOE Guarantee, the B orrow er shall becom e immediatelyobligated to reim burse DOE in an am ount equal to the sum of(i) all D OE G uarantee paym ents paid by DOE to FFB , (ii) al lcosts or expen ses incurred b y DOE in conne ctio n th erewith ,w hether by p aymen t. to F FB o r o therwise , and (iii) i nt er es t onthe DOE Guarantee payments from th e date such payment w asm ade or incurred by DOE under the DOE Guarantee untilpaym ent in full thereof b y the Borrower to DOE, at theapplicable rate of interest provided in the DefmitiveAgre emen ts. S uch Borrowe r Reimbu rsement Oblig atio ns a reabsolute, i rr evocab le and uncondi tiona1 a nd w ill be evidencedby the DOE Re imburs ement No te .E ac h P arty waiv es an y rights it may have to a trial by jury inrespect of any litigation arising out of the DefinitiveAgreem ents. T he Borrow er (8 ) s ubmits to th e non -exc lu siv eg en era l ju risd ic tio n o f (i) the courts of the United Stutes ofAmerica located in th e Distric t o f Columb ia , (ii) any oth erfederal court of competent jurisdiction in an y otherjur isdiction where it or any of its property m ay be found, and(iii) a pp ella te c ou rts from any o f th e fo re go in g, a nd (b) waivesa ny rig ht to c la im in co nv en ie nc e o f th e fo nun.T he cho ice o flaw p ro visio n in the D efinitiv e Agreem en ts andany other Transaction Document to which DOE is a party(other than (i ) docum ents to w hich FFB is a party, as to w hichthe governing law shall be in the form required by FFB, and(ii) the M ortgage Indenture, as to w hich the governing Jawshall be th e Jaw of the S tate o f G eo rg ia) shall be 8S follows:

28


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THIS AGREEMENT SHALL BE GOVERNED BY, ANDCONSTRUED AND lNTERPRETED IN ACCORDANCEWITH, T H E FEDERAL LAW OF THE UNITED STATESOF AMERICA. TO THE EXTENT THAT FEDERAL LAWDOES NOT SPECIFY THE APPROPRIATE RULE OFDECISION FOR A PARTICULAR MA TIER AT ISSUE, ITIS THE INTENTION AND AGREEMENT OF THEPARTIES HERETO THAT THE LAW OF THE STATE OFNEW YORK SHALL BE ADOPTED AS THE GOVERNINGFEDERAL RULE OF DECISION.

29. Freedom of InformationAct (FOIA) The parties acknow ledge and agree that all correspondence,books, documents, papers and records relating to thestructuring, negotiation and execution of this Term Sheet, theDefin itiv e Ag re ements , an d al l supporting documentation,

financial statem ents, audit reports of independent accountingfirm s, p erm its an d regu lato ry approvals furnished or oth erw isemade available to DOE, will be handled in accordance w ith allapplicable federal law s, rules, or regulations, including but notlim ited to the Trade Secrets Act, 18 U.S.C. 1905, and theFreedom of Information Act (FOIA), 5 U .S.C . S52 , andDOE 's im plem enting regulations at 10 C .F.R . ]004.

The closing of any financial transaction relating to the G uaranteed Loan is subject to D efinitiveAgreem ents acceptable to the Borrower, DO E and FFB .

NY) .499119.07 29


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Schedul e I I - ope E lig ib le Base P ro je ct Costsf:MP e.~ ( f o O i 200t W P'w.-(Wt)I : o p f > c"""tIIFIl


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S ch ed ule I - ope Base P ro je ct Costs

CWIP B,Ianel(F or 2 008 a nd

IDC(Excl.DOl! & Other Deferred DOl! DeferredDOE


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Schedule II I - Continued


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Sch edule III - Repayment S ch edule