MASTER POWER PURCHASE AND SALE AGREEMENT

This Agreement is made as of the __ day of _____, 20__ (the “Effective Date”). This Agreement and the exhibits, schedules and any written supplements hereto, including Exhibits 1 through 7 inclusive hereof, the Party B Tariff, and all Transactions (including the Subject Transaction Confirmation and any other Confirmations accepted in accordance with Section 2.3 hereto), are collectively referred to as the “Agreement.” The Parties to this Agreement are the following:

Name: Power Authority of the State of New York (“NYPA” or “Party A”)	Name: __________ (“Party B”)
All Notices: Street: 123 Main Street City, State Zip: White Plains, NY 10601	All Notices: Street: _______________ City, State Zip: _______________
Attn: Energy Resource Management (W. Nadeau) Phone: (914) 681-6488 Facsimile: (914) 287-3890 Duns: 11-732-2536 Federal Tax ID Number: 13-1850882	Attn: _______________ Phone: _______________ Facsimile: _______________ Duns: _______________ Federal Tax ID Number: _______________
Confirmations: Attn: Confirmations – Accounting Dept (J. Brennan) Phone: (914) 287-3133 Facsimile: (914) 287-3391	Confirmations: Attn: _______________ Phone: _______________ Facsimile _______________
Invoices: Attn: Accounts Payable (Manna Yu) Phone: (914) 287-3370 Facsimile: (914) 287-3392	Invoices: Attn: _______________ Phone: _______________ Facsimile: _______________
Scheduling: Attn: Energy Resource Management (Paul Rougeux) Phone: (914) 681-6873 Facsimile: (914) 681-6872	Scheduling: Attn: _______________ Phone: _______________ Facsimile: _______________
Payments: Attn: Accounts Receivable (Deborah Vaccaro) Phone: (914) 287-3366 Facsimile: (914) 287-3391	Payments: Attn: _______________ Phone: _______________ Facsimile: _______________
Wire Transfer: BNK: JPMorgan Chase Manhattan Bank ABA: 021-000021 ACCT: 573804206	Wire Transfer: BNK: _______________ ABA: _______________ ACCT: _______________
Credit and Collections: Attn: Credit Manager (Steve Lockfort) Phone: (914) 681-6868 Facsimile: (914) 287-3845	Credit and Collections: _______________ _______________ _______________ Attn: _______________ Phone: _______________ Facsimile: _______________
With additional Notices of an Event of Default or Potential Event of Default to: Attn: Treasurer (Brian McElroy) Phone: (914)287-3955 Facsimile: (914)681-6995	With additional Notices of an Event of Default or Potential Event of Default to: _______________ _______________ _______________ Attn: _______________ Phone: _______________ Facsimile: _______________

The Parties hereby agree that the General Terms and Conditions are incorporated herein, and to the following provisions as provided for in the General Terms and Conditions:

Party A Tariff Tariff Not Applicable Dated Docket Number

Party B Tariff Tariff _______________ Dated _______________ Docket Number

GENERAL TERMS AND CONDITIONS

ARTICLE One GENERAL DEFINITIONS

1.1 “Act” means Sections 1000-1017 of the New York Public Authorities Law.

1.2 “Affiliate” means, with respect to any person, any other person (other than an individual) that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such person. For this purpose, “control” means the direct or indirect ownership of fifty percent (50%) or more of the outstanding capital stock or other equity interests having ordinary voting power.

1.3 “Agreement” has the meaning set forth in the preamble hereof.

1.4 “Bankrupt” means with respect to a Party or any Credit Support Provider of such Party, such Person:—

(1) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (3) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (4)(A) institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organization or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official, or (B) has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation, and such proceeding or petition is instituted or presented by a person or entity not described in clause (A) above and either (I) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (II) is not dismissed, discharged, stayed or restrained in each case within sixty (60) days of the institution or presentation thereof; (5) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (6)(A) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets or (B) in the case of Party A (I) there shall be appointed or designated with respect to it, an entity such as an organization, board, commission, authority, agency or body to monitor, review, oversee, recommend or declare a financial emergency or similar state of financial distress with respect to it or (II) there shall be declared by any legislative or regulatory body with competent jurisdiction over it, the existence of a state of financial emergency or similar state of financial distress in respect of it; (7) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within fifteen (15) days thereafter; (8) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (1) to (7) above (inclusive); or (9) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.

1.5 “Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now or hereafter in effect, or any successor statute.

1.6 “Bi-Monthly Computation” has the meaning set forth in Exhibit 2 (Procedures for Semi-Annual and Bi-Monthly Computation).

1.7 “Bi-Monthly Letter of Credit” means a Letter of Credit substantially in the form (other than the stated amount) of the Term Letter of Credit, in effect for a Bi-Monthly Period (or such longer period as provided for in this Agreement) with a face amount equal to the Party B Performance Assurance Amount, as described in Section 8.5.

1.8 “Bi-Monthly Period” means a two (2)-month period commencing on January 1, March 1, May 1, July 1, September 1 or November 1 of each year commencing in 20__ through 20__.

1.9 “Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday. A Business Day shall open at 8:00 a.m. and close at 5:00 p.m. local time for the relevant Party’s principal place of business. The relevant Party, in each instance unless otherwise specified, shall be the Party from whom the notice, payment or delivery is being sent and by whom the notice or payment or delivery is to be received.

1.10 “Buyer” means the Party to a Transaction that is obligated to purchase and receive, or cause to be received, the Product, as specified in the Transaction.

1.11 "Capacity" or "UCAP" means unforced capacity for New York City (Zone "J") certified on a Monthly basis by NYISO.

1.12 “Claiming Party” has the meaning set forth in Section 3.3.

1.13 “Claims” means all third party claims or actions, threatened or filed and, whether groundless, false, fraudulent or otherwise, that directly or indirectly relate to the subject matter of an indemnity, and the resulting losses, damages, expenses, attorneys’ fees and court costs, whether incurred by settlement or otherwise, and whether such claims or actions are threatened or filed prior to or after the termination of this Agreement.

1.14 “Commercial Operation” has the meaning set forth in Section 3.6(a).

1.15 “Computation” has the meaning set forth in Exhibit 2 (Procedures for Semi-Annual and Bi-Monthly Computation).

1.16 “Confirmation” has the meaning set forth in Section 2.3, and unless expressly limited, "Confirmation" or "Confirmations" includes both the Subject Transaction Confirmation and each Confirmation, if any, for Other Transactions.

1.17 “Consents” has the meaning set forth in Section 3.6(b).

1.18 “Construction Milestone” has the meaning set forth in Section 3.6(b).

1.19 “Contract for Differences” means an agreement utilizing the International Swaps and Derivatives Association Master Agreement (2000, 2002 or other Form subsequently approved by NYPA) in which NYPA is the fixed price payer.

1.20 “Contract Price” means the price in $U.S. (unless otherwise provided for) to be paid by Buyer to Seller for the purchase of the Product, as specified in the Transaction.

1.21 “Costs” means, with respect to the Non-Defaulting Party, brokerage fees, commissions and other similar third party transaction costs and expenses reasonably incurred by such Party either in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements which replace a Terminated Transaction; and all reasonable attorneys’ fees and expenses incurred by the Non-Defaulting Party in connection with the termination of a Transaction.

1.22 “Credit Event” means (i) with respect to Party A, the suspension or withdrawal of the Credit Rating on the NYPA Bonds by S&P or Moody’s, or the downgrade of the Credit Rating on the NYPA Bonds below BBB by S&P, Baa2 by Moody’s or an equivalent Credit Rating by any other nationally recognized rating agency, (ii) with respect to Party B, the suspension or withdrawal of Party B’s Credit Rating by S&P or Moody’s, or downgrade of Party B’s Credit Rating below BBB by S&P, Baa2 by Moody’s or an equivalent Credit Rating by any other nationally recognized rating agency, and (iii) with respect to any Qualified Issuer, the suspension or withdrawal of such Person’s Credit Rating by S&P or Moody’s, or the downgrade of such Person’s Credit Rating below A by S&P, A2 by Moody’s or an equivalent rating by any other nationally recognized rating agency.

1.23 “Credit Rating” means (i) with respect to any Person other than Party A, the rating then assigned to such entity’s unsecured, senior long-term debt obligations (not supported by third party credit enhancements) or if such entity does not have a rating for its senior unsecured long-term debt, then the rating then assigned to such entity as an issuer rating by S&P, Moody’s or any other rating agency agreed by the Parties as set forth in this Agreement and (ii) with respect to Party A, the rating then assigned to any NYPA Bonds by S&P, Moody’s or any other rating agency agreed by the Parties as set forth in this Agreement.

1.24 “Credit Support Document” means (i) with respect to Party A, each NYPA Letter of Credit provided pursuant to this Agreement, and (ii) with respect to Party B, each Party B Letter of Credit provided pursuant to this Agreement and any undertaking of any Credit Support Provider.

1.25 “Credit Support Provider” means (i) with respect to Party A, any issuer of any NYPA Letter of Credit, and (ii) with respect to Party B, any issuer of any Party B Letter of Credit or Person who commits to provide any Party B Letter of Credit.

1.26 “Credit Support Termination Date” means the ninety-eighth (98th) day following the Final Payment Date applicable to Party B.

1.27 “Day” or “day” unless otherwise modified, means one (1) calendar day.

1.28 “Defaulting Party” has the meaning set forth in Section 5.1.

1.29 “Delivery Period” means the period of delivery for a Transaction, as specified in the Transaction.

1.30 “Delivery Point” means the point at which the Product will be delivered and received, as specified in the Transaction.

1.31 “Design” has the meaning set forth in Section 3.6(a).

1.32 “Early Termination Date” has the meaning set forth in Section 5.2.

1.33 “Eastern Prevailing Time” means Eastern Standard Time, or during the period when daylight savings time is in effect in New York State, Eastern Daylight Time.

1.34 “Effective Date” has the meaning set forth in the preamble hereof.

1.35 "Energy" means three-phase, 60-cycle alternating current.

1.36 “Equitable Defenses” means any bankruptcy, insolvency, reorganization and other laws affecting creditors’ rights generally, and with regard to equitable remedies, the discretion of the court before which proceedings to obtain same may be pending.

1.37 “Event of Default” has the meaning set forth in Section 5.1.

1.38 “Excused Delay” has the meaning set forth in Section 3.6(c).

1.39 “FERC” means the Federal Energy Regulatory Commission or any successor government agency.

1.40 “Final Payment Date” means, as to a Party, the final date on which all outstanding payment obligations of such Party to the other Party, including but not limited to any payments due pursuant to Article Four, Termination Payment under Article Five, or payments due under Article Six, have been fully liquidated and satisfied in full. In the event any payment due under this Agreement becomes the subject of a dispute, the Final Payment Date with respect to the Party owing the disputed amount shall not occur until such dispute is finally resolved and the amount owed as determined upon resolution of such dispute, if any, is paid in full.

1.41 “Force Majeure” means an event or circumstance which prevents one Party from performing its obligations under one or more Transactions, which event or circumstance was not anticipated as of the date the Transaction was entered, which is not reasonably within the control of, or the result of the negligence of or breach of contract by, the Claiming Party, and which, by the exercise of due diligence, the Claiming Party is unable to overcome or avoid or cause to be avoided. Force Majeure shall not be based on (i) the loss of Buyer’s markets; (ii) Buyer’s inability economically to use or resell the Product purchased hereunder; (iii) the loss or failure of Seller’s supply; or (iv) Seller’s ability to sell the Product at a price greater than the Contract Price. Neither Party may raise a claim of Force Majeure based in whole or in part on curtailment by a Transmission Provider unless (y) such Party has contracted for firm transmission with a Transmission Provider for the Product to be delivered to or received at the Delivery Point and (z) such curtailment is due to “force majeure” or “uncontrollable force” or a similar term as defined under the Transmission Provider’s tariff; provided, however, that existence of the foregoing factors shall not be sufficient to conclusively or presumptively prove the existence of a Force Majeure absent a showing of other facts and circumstances which in the aggregate with such factors establish that a Force Majeure as defined in the first sentence hereof has occurred. The applicability of Force Majeure to the Transaction is governed by the terms of this Agreement, the Subject Transaction Confirmation or other relevant Confirmation and the Products and Related Definitions contained in Schedule A.

1.42 “Gains” means, with respect to any Party, an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from the termination of a Terminated Transaction, determined in good faith and using commercially reasonable procedures. Gains shall be calculated in accordance with Exhibit 1 (Calculation of Gains and Losses).

1.43 “Governmental Charges” has the meaning set forth in Section 9.2.

1.44 “Imaged Agreement” has the meaning set forth in Section 10.12.

1.45 “Interest Rate” means the lesser of (i) the highest rate allowed by law or (ii) a rate per annum equal to the prime rate as listed in the Money Rates section of the Wall Street Journal under “Money Rates” on the date of determination (or if not published on such day the most recent preceding day on which published) plus two percent (2%); provided, that where Party A is the Party owing interest, and such interest is subject to the provisions of Section 2880 of the New York Public Authorities Law (or any successor thereto) then in such case, and only with respect to Party A, “Interest Rate” shall mean the rate allowed pursuant to Section 2880.

1.46 “kW” means kilowatt.

1.47 “Letter(s) of Credit” means an irrevocable, transferable, multiple-draw standby letter of credit issued by a Qualified Issuer, the costs of which shall be borne by the applicant therefor.

1.48 “Losses” means, with respect to any Party, an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from termination of a Terminated Transaction, determined in good faith and using commercially reasonable procedures. Losses shall be calculated in accordance with Exhibit 1 (Calculation of Gains and Losses).

1.49 “Moody’s” means Moody’s Investor Services, Inc. or its successor.

1.50 “MW” means megawatt.

1.51 “NERC Business Day” means any day except a Saturday, Sunday or a holiday as defined by the North American Electric Reliability Council or any successor organization thereto. A NERC Business Day shall open at 8:00 a.m. and close at 5:00 p.m. local time for the relevant Party’s principal place of business. The relevant Party, in each instance unless otherwise specified, shall be the Party from whom the notice, payment or delivery is being sent and by whom the notice or payment or delivery is to be received.

1.52 “New Facilities” has the meaning set forth in Section 3.6(a).

1.53 “Non-Defaulting Party” has the meaning set forth in Section 5.2.

1.54 “Notice to Proceed” has the meaning set forth in Section 3.6(b).

1.55 “NYISO” means the New York Independent System Operator, or any successor organization(s) thereof.

1.56 “NYPA Bonds” means the bonds issued by NYPA under the General Resolution Authorizing Revenue Obligations, adopted February 24, 1998, as amended and supplemented, but excluding those bonds which are covered by a municipal bond insurance policy.

1.57 “NYPA Letter of Credit” has the meaning set forth in Section 8.4(a).

1.58 “NYPA Performance Assurance Amount” has the meaning set forth in Section 8.4(a) and value as determined from time-to-time pursuant to Exhibit 2 (Procedures for Semi-Annual and Bi-Monthly Computation).

1.59 “Offsetting Transactions” mean any two (2) or more outstanding Transactions, having the same or overlapping Delivery Period(s), Delivery Point and payment date, where under one or more of such Transactions, one Party is the Seller, and under the other such Transaction(s), the same Party is the Buyer.

1.60 “Option” means the right but not the obligation to purchase or sell a Product as specified in a Transaction.

1.61 “Option Buyer” means the Party specified in a Transaction as the purchaser of an Option, as defined in Schedule A.

1.62 “Option Seller” means the Party specified in a Transaction as the seller of an Option, as defined in Schedule A.

1.63 “Other Transactions” means all Transactions between the Parties other than the Subject Transaction.

1.64 “Party A” has the meaning set forth on page 1 of this Agreement.

1.65 “Party A Tariff” means the tariff, if any, specified on page 2 of this Agreement.

1.66 “Party B” has the meaning set forth on page 1 of this Agreement.

1.67 “Party B Letter of Credit” means each Term Letter of Credit, Semi-Annual Letter of Credit and Bi-Monthly Letter of Credit.

1.68 “Party B Performance Assurance Amount” has the meaning set forth in Section 8.5(b) and value as determined from time-to-time pursuant to Exhibit 2 (Procedures for Computation of Performance Assurance Amounts).

1.69 “Party B Tariff” means the tariff, if any, specified on page 2 of this Agreement.

1.70 “Performance Assurance” means collateral in the form of either cash, Letter(s) of Credit, or other security acceptable to the Party entitled to receive such security.

1.71 “Person” means any person, firm or business association or other entity of any nature whatsoever, including but not limited to a Party or Credit Support Provider.

1.72 “Potential Event of Default” means an event which, with notice or passage of time or both, would constitute an Event of Default.

1.73 “Product” means Capacity, Energy or other product(s) related thereto as specified in a Transaction by reference to a Product listed in Schedule A hereto or as otherwise specified by the Parties in the Transaction.

1.74 “Qualified Issuer” means a commercial bank organized or otherwise lawfully qualified to do business under the laws of the United States or any state, having a Credit Rating of A or higher by S&P, A2 or higher by Moody’s, or an equivalent Credit Rating by any other nationally recognized rating agency.

1.75 “Quantity” means that quantity of the Product that Seller agrees to make available or sell and deliver, or cause to be delivered, to Buyer, and that Buyer agrees to purchase and receive, or cause to be received, from Seller as specified in the Transaction.

1.76 “Recording” has the meaning set forth in Section 2.5.

1.77 “Regulatory Event” has the meaning set forth in Section 10.8.

1.78 “Replacement Price” means the price at which Buyer, acting in a commercially reasonable manner, purchases at the Delivery Point (or other point mutually agreed by the Parties) a replacement for any Product specified in a Transaction but not delivered by Seller, plus (i) costs reasonably incurred by Buyer in purchasing such substitute Product and (ii) additional transmission charges, if any, reasonably incurred by Buyer to the Delivery Point, or at Buyer’s option, the market price at the Delivery Point for such Product not delivered as determined by Buyer in a commercially reasonable manner; provided, however, in no event shall Buyer be required to utilize or change its utilization of its owned or controlled assets or market positions to minimize Seller’s liability; provided, further, however, that if a Contract for Differences is in effect to provide cover, the Replacement Price shall be the fixed price for which the Contract for Differences provides. For the purposes of this definition, Buyer shall be considered to have purchased replacement Product to the extent Buyer shall have entered into one (1) or more arrangements (including Contracts for Differences) in a commercially reasonable manner whereby Buyer repurchases its obligation to sell and deliver the Product to another party at the Delivery Point.

1.79 “S&P” means the Standard & Poor’s Rating Group (a division of McGraw-Hill, Inc.) or its successor.

1.80 “Sales Price” means the price at which Seller, acting in a commercially reasonable manner, resells at the Delivery Point any Product not received by Buyer, deducting from such proceeds any (i) costs reasonably incurred by Seller in reselling such Product and (ii) additional transmission charges, if any, reasonably incurred by Seller in delivering such Product to the third party purchasers, or at Seller’s option, the market price at the Delivery Point for such Product not received as determined by Seller in a commercially reasonable manner; provided, however, in no event shall such price include any penalties, ratcheted demand or similar charges, nor shall Seller be required to utilize or change its utilization of its owned or controlled assets, including contractual assets, or market positions to minimize Buyer’s liability. For purposes of this definition, Seller shall be considered to have resold such Product to the extent Seller shall have entered into a Contract for Differences or one or more arrangements in a commercially reasonable manner whereby Seller repurchases its obligation to purchase and receive the Product from another party at the Delivery Point.

1.81 “Schedule” or “Scheduling” means the actions of Seller, Buyer and/or their designated representatives, including each Party’s Transmission Providers, if applicable, of notifying, requesting and confirming to each other the quantity and type of Product to be delivered on any given day or days during the Delivery Period at a specified Delivery Point.

1.82 “Seller” means the Party to a Transaction that is obligated to sell and deliver, or cause to be delivered, the Product, as specified in the Transaction.

1.83 “Semi-Annual Computation” has the meaning set forth in Exhibit 1 (Procedures for Semi-Annual and Bi-Monthly Computation).

1.84 Semi-Annual Letter of Credit” means a Letter of Credit substantially in the form (other than the stated amount) of the Term Letter of Credit, in effect for a Semi-Annual Period (or such longer period as provided for in this Agreement) with a face amount equal to the Party B Performance Assurance Amount, as described in Section 8.5.

1.85 “Semi-Annual Period” has the meaning set forth in Section 8.4(a).

1.86 “Settlement Amount” means, with respect to a Transaction and the Non-Defaulting Party, the Losses or Gains, and Costs, expressed in U.S. Dollars, which such party incurs as a result of the liquidation of a Terminated Transaction pursuant to Section 5.2.

1.87 “Site” has the meaning set forth in Section 3.6(a).

1.88 “Strike Price” means the price to be paid for the purchase of the Product pursuant to an Option.

1.89 “Subject Transaction” means each Transaction that is the subject of a Subject Transaction Confirmation attached as Exhibit 3A and 3B of this Agreement.

1.90 “Subject Transaction Confirmation” means a confirmation of the Subject Transaction attached to this Agreement as Exhibit 3A (Subject Transaction Confirmation – Capacity or Capacity Plus Transmission) and/or Exhibit 3B (Subject Transaction Confirmation – Energy).

1.91 “Target Commercial Operation Date” has the meaning set forth in Section 3.6(a).

1.92 “Target Consents Application Date” has the meaning set forth in Section 3.6(b).

1.93 “Target Notice to Proceed Date” has the meaning set forth in Section 3.6(b).

1.94 “Term Letter of Credit” means a Letter of Credit with a face amount equal to the Term Letter of Credit Amount, issued within three (3) Business Days of the execution of this Agreement, substantially in the form set out in Exhibit 4 (Form of Term Letter of Credit), and each replacement or supplemental Letter of Credit therefor substantially in the same form.

1.95 “Term Letter of Credit Amount” means: (a) with respect to a Subject Transaction involving Capacity or Capacity plus Transmission Products, the amount determined from time-to-time as set forth in Section I of Exhibit 2 hereof; and (b) with respect to a Subject Transaction involving Energy, ___________ Dollars ($____) [See proposed Credit Terms, attached to Exhibit 2 for NYPA's credit support required amounts.]

1.96 “Terminated Transaction” has the meaning set forth in Section 5.2.

1.97 “Termination Payment” has the meaning set forth in Section 5.3.

1.98 “Transaction” means a particular transaction agreed to by the Parties relating to the sale and purchase of a Product pursuant to this Agreement, and, without limitation to the foregoing, includes the Subject Transaction and the Other Transactions.

1.99 “Transmission” means the provision of UCAP deliverability rights utilizing electrical transmission lines, substations, interconnections and other applicable facilities owned or controlled by Party B, rated at 138kV or greater, from a specified point of origin to Party A at a specified Delivery Point, in accordance with applicable rules of the NYISO.

1.100 “Transmission Provider” means any entity or entities transmitting or transporting the Product on behalf of Seller or Buyer to or from the Delivery Point in a particular Transaction.

1.101 “UCAP” means unforced capacity for New York City (Zone “J”) certified on a Monthly basis with the NYISO.

ARTICLE Two TRANSACTION TERMS AND CONDITIONS

2.1 Transactions

. A Transaction shall be entered into upon agreement of the Parties in writing by means of a Confirmation. Each Party agrees not to contest, or assert any defense to, the validity or enforceability of the Transaction entered into in accordance with this Agreement (a) based on any law requiring agreements to be signed by the parties, or (b) based on any lack of authority of the Party or any lack of authority of any employee of the Party to enter into a Transaction.

2.2 Governing Terms

. Unless otherwise specifically agreed, each Transaction between the Parties shall be governed by this Agreement. This Master Agreement (including all exhibits, schedules and any written supplements hereto), the Party A Tariff, if any, and the Party B Tariff, if any, any designated collateral, credit support or margin agreement or similar arrangement between the Parties and all Transactions (including any Confirmations accepted in accordance with Section 2.3) shall form a single integrated agreement between the Parties. Any inconsistency between any terms of this Master Agreement and any terms of the Transaction shall be resolved in favor of the terms of such Transaction. This Agreement shall govern all Transactions between the Parties entered into on or after the Effective Date of this Agreement, provided, however, that (a) Sections 8.4 and 8.5 of this Agreement shall only apply to the Subject Transaction and (b) Sections 8.1(b) and 8.2(b) shall apply only to Other Transactions and not apply to the Subject Transaction. Furthermore, out of Schedule A, only the definitions of “Energy” [and “Unit Firm” if applicable] and the first sentence of Schedule A shall apply to the Subject Transaction.

2.3 Confirmation

. The Subject Transaction is confirmed in writing between the Parties by the Subject Transaction Confirmation. Any proposed Other Transactions between the Parties governed by this Agreement shall be confirmed in writing by a Confirmation. Buyer shall prepare a confirmation for such Other Transaction substantially in the form of Exhibit 5 and forward two (2) original executed copies to Seller by certified mail, hand delivery, overnight courier or facsimile. Such confirmation shall be deemed to have been received by Seller two (2) Business Days after it was sent or such earlier time as such receipt is confirmed by Seller. If Seller objects to any term(s) of such confirmation it shall notify Buyer in writing of such objections within three (3) Business Days of Seller’s receipt thereof, otherwise Seller shall confirm a proposed Other Transaction by returning one (1) original fully-executed copy of the confirmation by certified mail, hand delivery, overnight courier or facsimile within three (3) Business Days after it receives the confirmation, failing which it shall be deemed to have accepted the terms as sent, and in either case if Seller does not so object to such confirmation, such proposed Other Transaction shall be an Other Transaction under this Agreement and such confirmation shall be a “Confirmation” under this Agreement. If Buyer has failed to send a confirmation within four (4) Business Days after any Other Transaction has been agreed upon orally, then Seller may prepare a confirmation for such Other Transaction substantially in the form of Exhibit 5 and forward two (2) original executed copies to Buyer by certified mail, hand delivery, overnight courier or facsimile. Such confirmation shall be deemed to have been received by Buyer two (2) Business Days after it was sent or such earlier time as such receipt is confirmed by Buyer. If Buyer objects to any term(s) of such confirmation it shall notify Seller in writing of such objections within three (3) Business Days of Buyer’s receipt thereof, otherwise Buyer shall confirm a proposed Other Transaction by returning one (1) original fully-executed copy of the confirmation by certified mail, hand delivery, overnight courier or facsimile within three (3) Business Days after it receives the confirmation, failing which it shall be deemed to have accepted the terms as sent, and in either case if Buyer does not so object to such confirmation, such proposed Other Transaction shall be an Other Transaction under this Agreement and such confirmation shall be a “Confirmation” under this Agreement. In the event any proposed Other Transaction is agreed upon orally but neither Party sends a confirmation in the manner or within the time provided herein, or if such confirmation is sent but the receiving Party objects to such confirmation and such objection is not overcome, such proposed Other Transaction shall be null and void, and not be binding upon either Party.

2.4 Additional Confirmation Terms

. When a Confirmation contains provisions, other than those provisions relating to the commercial terms of the Transaction (e.g., price or special transmission conditions), which modify or supplement the general terms and conditions of this Agreement (e.g., arbitration provisions or additional representations and warranties), such provisions shall not be deemed to be accepted pursuant to Section 2.3 unless agreed to in writing by the Parties; provided that the foregoing shall not invalidate any Transaction agreed to by the Parties.

2.5 Recording

. Each Party (a) consents to the creation of a tape or electronic recording (“Recording”) of all telephone conversations between the Parties to this Agreement, and (b) agrees that any such Recordings will be retained in confidence, secured from improper access, and may be submitted in evidence in any proceeding or action relating to this Agreement. Each Party waives any further notice of such monitoring or recording, and agrees to notify its officers and employees of such monitoring or recording and to obtain any necessary consent of such officers and employees. The Recording, and the terms and conditions described therein, if admissible, shall be evidence of the Parties’ agreement with respect to a particular Transaction in the event a Confirmation is not fully executed (or deemed accepted) by both Parties. Upon full execution (or deemed acceptance) of a Confirmation, such Confirmation shall control in the event of any conflict with the terms of a Recording, or in the event of any conflict with the terms of this Agreement.

ARTICLE Three OBLIGATIONS AND DELIVERIES

3.1 Seller’s and Buyer’s Obligations

. With respect to each Transaction, Seller shall sell and deliver, or cause to be delivered, and Buyer shall purchase and receive, or cause to be received, the Quantity of the Product at the Delivery Point, and Buyer shall pay Seller the Contract Price; provided, however, with respect to Options, the obligations set forth in the preceding sentence shall only arise if the Option Buyer exercises its Option in accordance with its terms. Seller shall be responsible for any costs or charges imposed on or associated with the Product or its delivery of the Product up to the Delivery Point. Buyer shall be responsible for any costs or charges imposed on or associated with the Product or its receipt at and from the Delivery Point.

3.2 Transmission and Scheduling

. Seller shall arrange and be responsible for transmission service to the Delivery Point and shall Schedule or arrange for Scheduling services with its Transmission Providers, as specified by the Parties in the Transaction, or in the absence thereof, in accordance with the practice of the Transmission Providers, to deliver the Product to the Delivery Point. Buyer shall arrange and be responsible for transmission service at and from the Delivery Point and shall Schedule or arrange for Scheduling services with its Transmission Providers to receive the Product at the Delivery Point.

3.3 Force Majeure

. To the extent either Party is prevented by Force Majeure from carrying out, in whole or part, its obligations under the Transaction and such Party (the “Claiming Party”) gives notice and details of the Force Majeure to the other Party as soon as practicable, then, unless the terms of the Subject Transaction Confirmation or other relevant Confirmation or of the Product and Related Definitions in Schedule A specify otherwise, the Claiming Party shall be excused from the performance of its obligations with respect to such Transaction (other than the obligation to make payments then due or becoming due with respect to performance prior to the Force Majeure, subject to the provisions of Section 6.3). The Claiming Party shall remedy the Force Majeure with all reasonable dispatch. The non-Claiming Party shall not be required to perform or resume performance of its obligations to the Claiming Party corresponding to the obligations of the Claiming Party excused by Force Majeure.

3.4 Closing Deliveries

. On the Effective Date and as a condition to the obligations of the other Party under this Agreement, (a) NYPA shall provide Party B hereto (i) a certified copy of the resolution evidencing the necessary authorizations with respect to the execution, delivery and performance by NYPA of this Agreement and (ii) the written opinions set forth on Exhibit 6 (NYPA Opinions), in form and substance reasonably acceptable to Party B, issued by legal counsel acceptable to Party B (which with respect to opinion No. 3, shall include NYPA’s in-house counsel) and (b) Party B shall provide NYPA with (i) a certified copy of the resolution evidencing the necessary authorizations with respect to the execution, delivery and performance by Party B of this Agreement and (ii) the written opinions set forth on Exhibit 7 (Party B Opinions), in form and substance reasonably acceptable to NYPA, issued by legal counsel acceptable to NYPA.

3.5 No Immunity Claim

. NYPA warrants and covenants that, to the fullest extent permitted by applicable law, with respect to its contractual obligations hereunder and performance thereof, it will not claim immunity on the grounds of sovereignty or similar grounds with respect to itself or its revenues or assets from (a) suit, (b) jurisdiction of court (including a court located outside the jurisdiction of its organization), (c) relief by way of injunction, order for specific performance or recovery of property, (d) attachment of assets, or (e) execution or enforcement of any judgment.

3.6 Party B Facility Development Obligations

[if Applicable]

(a) New Facility Development. Party B will provide the Products for the Subject Transaction from new ______________ facilities to be developed by Party B or its Affiliates and contractors (“New Facilities”). The New Facilities will be constructed at _, on a site described more fully in Exhibit 8A (the “Site”), in accordance with the design set forth in Exhibit 8B (“Design”). Party B will not make or permit any material change in the Site or Design without prior consent of NYPA, which shall not be unreasonably withheld, delayed or conditioned. The New Facilities will be in service, with all required interconnections, arrangements and authorizations necessary to commence providing the Products required under the Subject Transaction Confirmation (such status “Commercial Operation”) by _______________ (the “Target Commercial Operation Date”). Party B represents and warrants that it has (i) all necessary rights to real property necessary for development of the New Facilities, (ii) all other necessary consents, authorizations and arrangements, other than those Consents set forth in Exhibit 8C, and (iii) has the financial capability to proceed and complete the development of the New Facilities.

(b) Construction Schedule and Milestones. Party B will develop the New Facility in accordance with the following timetable (each timetable date a "Construction Milestone"):

(i) Party B expects to complete its submission of application for all remaining authorizations, permits, consents, authorizations, interconnections and land use rights set forth in Exhibit 8C ("Consents") needed to construct and operate the New Facilities by _________, 20 (the “Target Consents Application Date”).

(ii) Party B expects to complete firm equipment orders and authorize its general contractor to mobilize for construction at the site for the New Facility (such events “Notice to Proceed”) by _______________ (the “Target Notice to Proceed Date”).

(iii) Party B expects to achieve Commercial Operation on the Target Commercial Operation Date.

(c) Delay, Liquidated Damages and NYPA Early Termination Rights

(i) Party B will meet all Construction Milestones unless delayed or prevented by Force Majeure or any other cause beyond Party B's control with the use of commercially reasonable efforts, including any delay on the part of any governmental authority or transmission system operator in the issuance of any Consents (any such cause an “Excused Delay”), provided, delay, price increases or non-performance by Party B's equipment vendors, contractors or subcontractors shall not constitute Excused Delay. Each Construction Milestone will be extended Day-for-Day with respect to the effects of any Excused Delay, and provided further, in the event an Excused Delay does not or is not reasonably expected to cause a Day-for-Day delay in subsequent Construction Milestones, and to the extent any such Excused Delay can be reduced by commercially reasonable efforts of Party B, the extension of such subsequent Construction Milestones shall be a reasonable amount based upon applicable circumstances.

(ii) In the event Party B fails to complete its submission of applications for all Consents by the Target Consents Application Date, Party B will pay NYPA liquidated damages in the amount of Ten Thousand Dollars ($10,000) per Day or portion thereof, commencing with the Day immediately following the Target Consents Application Date and continuing until and including the Day on which Party B has completed submission of all applications for the Consents, provided, however, the maximum liquidated damages paid under this subparagraph shall be Nine Hundred Thousand Dollars ($900,000).

(iii) In the event Party B fails to achieve Notice to Proceed by the Target Notice to Proceed Date, Party B will pay NYPA liquidated damages in the amount of ___ Dollars ($) per Day or portion thereof [such amount to be $50,000 per Day per 100 MW of Capacity/Associated Energy], commencing with the Day immediately following the Target Notice to Proceed Date and continuing until and including the Day on which Notice to Proceed occurs, provided, however, the maximum liquidated damages paid under this subparagraph shall be Dollars ($_) [amount to be 150x the foregoing per diem amount, e.g., $7.5M per 100 MW].

(iv) In the event Party B fails to achieve Commercial Operation by the Target Commercial Operation Date, Party B will pay NYPA liquidated damages in the amount of ___ Dollars ($) per Day or portion thereof [$25,000 per Day per 100 MW of Capacity/Associated Energy], commencing with the Day immediately following the Target Commercial Operation Date and continuing until and including the Day on which Commercial Operation occurs, provided, however, the maximum liquidated damages paid under this subparagraph shall be Dollars ($_) [amount to be 225x the foregoing per diem amount, e.g., $5.625M per 100 MW].

(v) The Parties agree that if Party B fails to meet Construction Milestones, other than as the result of an Excused Delay, NYPA will suffer damages that will be difficult to quantify. Accordingly they have agreed that in such event Party B will pay the foregoing liquidated damages amounts, as damages and not as a penalty. Party B shall provide and maintain a standby letter of credit in the form set forth in Exhibit 4 in the amount of $_________ [$7.5M per 100 MW of Capacity/Associated Energy] to secure payment of liquidated damages amounts. [See Attachment to Exhibit 2 for NYPA guidelines on liquidated damages letter of credit amount.]

(vi) NYPA will hold all liquidated damages paid under this subsection with respect to Party B's failure to meet the Target Consents Application Date or Target Notice to Proceed Date in escrow, with interest to accrue for NYPA's account. In the event Party B is able to achieve Commercial Operation by the Target Commercial Operation Date notwithstanding such prior unexcused delays, NYPA will refund all previously-paid liquidated damages amounts, without interest. In the event Party B is able to achieve Commercial Operation within forty-five (45) Days following the Target Commercial Operation Date, Party B's total liability to NYPA for liquidated damages shall not exceed the maximum about set forth in subparagraph (c)(iv) above, and NYPA will refund to Party B any liquidated damages amount in escrow over and above such maximum. In all other events, liquidated damages shall remain with NYPA without repayment or credit to Party B's account for any purpose.

(vii) If Party B does not achieve Commercial Operation of the New Facility by the date one hundred eighty (180) Days following the Target Commercial Operation Date, as such may be extended by Excused Delays, NYPA may, in its sole discretion, upon notice to Party B, terminate the Subject Transaction and such failure shall constitute an event of default under Section 5.1(c)(iii) with respect to the Subject Transaction.

(viii) If Party B does not obtain all Consents by _, 20, or achieve Commercial Operation of the New Facility by __, 20, and such failure is the result of Excused Delays, NYPA may, in its sole discretion, upon notice to Party B, terminate the Subject Transaction upon notice to Party B, provided, however, that such circumstances shall not constitute an Event of Default and no Party shall be required to make any Termination Payment.

3.7 Buyer Termination Right in Event of Extended Force Majeure

. In the event Party B is unable to provide Products required pursuant to any Transaction as a result of any event of Force Majeure, NYPA's payment obligation for any month during the continuation of such Force Majeure shall extend only to quantities of such Products actually delivered (subject to Section 6.3) and for which the NYISO will allow NYPA credit. In the event Party B's deliveries of such Products continues to be substantially interrupted for any period of twelve (12) consecutive months, Buyer may terminate the affected Transaction, upon notice to Party B in NYPA's sole discretion, provided, however, that such circumstances shall not constitute an Event of Default and no Party shall be required to make any Termination Payment.

ARTICLE Four REMEDIES FOR FAILURE TO DELIVER/RECEIVE

4.1 Seller Failure

. If Seller fails to Schedule and/or deliver all or part of the Product pursuant to a Transaction, and such failure is not excused under the terms of the Subject Transaction Confirmation or other relevant Confirmation or of the Product and Related Definitions in Schedule A or by Buyer’s failure to perform, then notwithstanding any provisions of this Agreement to the contrary, Seller shall pay Buyer, within five (5) Business Days of invoice receipt, an amount for such deficiency equal to (i) any penalty or other charge assessed to Buyer by NYISO directly or indirectly as a result of Seller's failure, plus (ii) the positive difference, if any, obtained by subtracting the Contract Price from the Replacement Price with the result multiplied by the deficiency in quantity of Product actually Scheduled or delivered by the Seller. The invoice for such amount shall include a written statement explaining in reasonable detail the calculation of such amount.

4.2 Buyer Failure

. If Buyer fails to Schedule and/or receive all or part of the Product pursuant to a Transaction and such failure is not excused under the terms of the Subject Transaction Confirmation or other relevant Confirmation or of the Product and Related Definitions in Schedule A or by Seller’s failure to perform, then Buyer shall pay Seller, within five (5) Business Days of invoice receipt, an amount for such deficiency equal to the positive difference, if any, obtained by subtracting the Sales Price from the Contract Price with the result multiplied by the deficiency in quantity of Product actually Scheduled or received by the Buyer. The invoice for such amount shall include a written statement explaining in reasonable detail the calculation of such amount.

ARTICLE Five EVENTS OF DEFAULT; REMEDIES

5.1 Events of Default

. An “Event of Default” shall mean, with respect to a Party (a “Defaulting Party”), the occurrence of any of the following:

(a) the failure to make, when due, any payment required pursuant to this Agreement if such failure is not remedied within three (3) Business Days after written notice;

(b) any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated;

(c) either (i) the failure to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default) if such failure is not remedied within three (3) Business Days after written notice, (ii) any willful failure to deliver Product when required under this Agreement, or (iii) [if applicable] failure of Party B to achieve Commercial Operation by the date One Hundred Eighty (180) Days following the Target Commercial Operation Date, as extended by any Excused Delay;

(d) such Party becomes Bankrupt;

(e) the failure of such Party to satisfy the creditworthiness/collateral requirements agreed to pursuant to Article Eight hereof;

(f) such Party or any Credit Support Provider of such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity (or, without limiting the foregoing, if such Party is Party A, an entity such as an organization, board, commission, authority, agency or body succeeds to the principal functions of, or powers and duties granted to, such Party) and, at the time of such consolidation, amalgamation, merger, transfer, or succession:

(i) the resulting, surviving, transferee or successor entity fails to assume all the obligations of such Party or such Credit Support Provider under this Agreement or any Credit Support Document to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other Party to this Agreement; or

(ii) the resulting, surviving, transferee or successor entity, if a Credit Support Provider, is not a Qualified Issuer; or

(iii) the benefits of any Credit Support Document fail to extend (without the consent of the other Party) to the performance by such resulting, surviving, transferee or successor entity of its obligations under this Agreement, if any;

(g) the occurrence and continuation of (i) a default, event of default or other similar condition or event in respect of such Party or any Credit Support Provider for such Party under one or more agreements or instruments, individually or collectively, relating to indebtedness for borrowed money in an aggregate amount of not less than _ Million Dollars ($,000,000), which results in such indebtedness becoming immediately due and payable or (ii) a default by such Party or any Credit Support Provider for such Party in making on the due date therefor one or more payments, individually or collectively, in an aggregate amount of not less than __ Million Dollars ($,000,000);

(h) with respect to such Party’s Credit Support Provider, if any:

(i) any representation or warranty made by a Credit Support Provider in connection with this Agreement or any Credit Support Document is false or misleading in any material respect when made or when deemed made or repeated;

(ii) the failure of a Credit Support Provider to make any payment required or to perform any other material covenant or obligation in any Credit Support Document and such failure shall not be remedied within three (3) Business Days after written notice;

(iii) a Credit Support Provider becomes Bankrupt;

(iv) the failure of a Credit Support Document to be in full force and effect for purposes of this Agreement (other than in accordance with its terms) prior to the satisfaction of all obligations of such Party under the Subject Transaction to which such Credit Support Document shall relate without the written consent of the other Party; or

(v) a Party or Credit Support Provider shall repudiate, disaffirm, disclaim, or reject, in whole or in part, or challenge the validity of this Agreement or any Credit Support Document;

provided, however, for the avoidance of doubt, any Credit Event, or other event or circumstance with respect to an issuer of a NYPA Letter of Credit or Party B Letter of Credit, shall not constitute an Event of Default unless the applicable Party fails to deliver a replacement NYPA Letter of Credit or Party B Letter of Credit, as applicable, to the other Party in accordance with Sections 8.4 and 8.5 within five (5) Business Days after receipt of written notice from such other Party of such circumstance as described in this sub-Section, and provided, further, that the foregoing proviso shall not prevent any draws on Letters of Credit by the Parties permitted under Sections 8.4 and 8.5;

(i) solely with respect to the Subject Transaction, the failure of such Party to deliver to the remaining Party any Credit Support Document required by Section 8.4 or Section 8.5 within the time periods specified therein; or

(j) solely with respect to the Subject Transaction, the drawing by a Party against any Credit Support Document required by Section 8.4 or Section 8.5 when or to an extent not authorized under the terms of this Agreement, or the failure of a Party having drawn against any Credit Support Document not to repay any excess amount drawn as required under the terms of this Agreement; provided, however, that such events shall not constitute an Event of Default unless the Party drawing or holding such funds fails to repay the same within five (5) Business Days after notice from the other Party that such payment is due.

Notwithstanding the foregoing, the Event of Default described in Subsection 5.1(c)(i) shall not be deemed to occur with respect to any failure or inability of Party B to deliver Products to be provided from a specific designated facility if such facility is unavailable in whole or part for any reason, and Party B provides Party A with equivalent Products from a different source at the Delivery Point on the same terms and conditions as required hereunder until such specified facility is returned to service.

5.2 Declaration of an Early Termination Date and Calculation of Settlement Amounts

. If an Event of Default with respect to a Defaulting Party shall have occurred and be continuing, the other Party (the “Non-Defaulting Party”) shall have the right (i) to designate a day, no earlier than the day such notice is effective and no later than 20 days after such notice is effective, as an early termination date (“Early Termination Date”) to accelerate all amounts owing between the Parties and to liquidate and terminate all, but not less than all, Transactions (each referred to as a “Terminated Transaction”) between the Parties, (ii) withhold any payments due to the Defaulting Party under this Agreement and (iii) suspend performance. The Non-Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amount for each such Terminated Transaction as of the Early Termination Date (or, to the extent that in the reasonable opinion of the Non-Defaulting Party certain of such Terminated Transactions are commercially impracticable to liquidate and terminate or may not be liquidated and terminated under applicable law on the Early Termination Date, as soon thereafter as is reasonably practicable).

5.3 Net Out of Settlement Amounts

. The Non-Defaulting Party shall aggregate all Settlement Amounts into a single amount by: netting out (a) at the option of the Non-Defaulting Party, any cash or other form of security then available to the Non-Defaulting Party pursuant to draws on Letters of Credit under this Agreement, plus any or all other amounts due to the Defaulting Party under this Agreement against (b) all Settlement Amounts that are due to the Non-Defaulting Party plus, at the option of the Non-Defaulting Party, any cash or other form of liquid security then in the possession of the Defaulting Party provided as Performance Assurance pursuant to Article Eight, plus any or all other amounts due to the Non-Defaulting Party under this Agreement, so that all such amounts shall be netted out to a single liquidated amount (the “Termination Payment”) payable by one Party to the other. The Termination Payment shall be due to or due from the Non-Defaulting Party as appropriate. For the avoidance of doubt, notwithstanding any provision of this Agreement that may be interpreted to the contrary, the Defaulting Party shall not be entitled to recover any Losses upon termination pursuant to Section 5.2.

5.4 Notice of Payment of Termination Payment

. As soon as practicable after a liquidation, notice shall be given by the Non-Defaulting Party to the Defaulting Party of the amount of the Termination Payment and whether the Termination Payment is due to or due from the Non-Defaulting Party. The notice shall include a written statement explaining in reasonable detail the calculation of such amount. The Termination Payment shall be made by the Party that owes it within five (5) Business Days after such notice is effective. Notwithstanding any provision to the contrary contained in this Agreement, the Non-Defaulting Party shall not be required to pay to the Defaulting Party any amount under Article Five until the Non-Defaulting Party receives confirmation satisfactory to it in its reasonable discretion (which may include an opinion of its counsel) that all other obligations of any kind whatsoever of the Defaulting Party to make any payments to the Non-Defaulting Party under this Agreement or otherwise which are due and payable as of the Early Termination Date have been fully and finally performed; provided, however, the period for obtaining such confirmation shall not extend more than sixty (60) days after the date the Defaulting Party’s payment is due.

5.5 Disputes With Respect to Termination Payment

. If the Defaulting Party disputes the Non-Defaulting Party’s calculation of the Termination Payment, in whole or in part, the Defaulting Party shall, within five (5) Business Days of receipt of Non-Defaulting Party’s calculation of the Termination Payment, provide to the Non-Defaulting Party a detailed written explanation of the basis for such dispute; provided, however, that if the Termination Payment is due from the Defaulting Party, the Defaulting Party shall first transfer Performance Assurance to the Non-Defaulting Party in an amount equal to the Termination Payment.

5.6 Closeout Setoffs

. After calculation of a Termination Payment in accordance with Section 5.3, if the Defaulting Party would be owed the Termination Payment, the Non-Defaulting Party shall be entitled, at its option and in its discretion, to (i) set off against such Termination Payment any amounts due and owing by the Defaulting Party to the Non-Defaulting Party under any other agreements, instruments or undertakings between the Defaulting Party and the Non-Defaulting Party and/or (ii) to the extent the Transactions are not yet liquidated in accordance with Section 5.2, withhold payment of the Termination Payment to the Defaulting Party. The remedy provided for in this Section shall be without prejudice and in addition to any right of setoff, combination of accounts, lien or other right to which any Party is at any time otherwise entitled (whether by operation of law, contract or otherwise).

5.7 Suspension of Performance

. Notwithstanding any other provision of this Agreement, if an Event of Default shall have occurred and be continuing, the Non-Defaulting Party, upon written notice to the Defaulting Party, shall have the right (i) to suspend performance under any or all Transactions; provided, however, in no event shall any such suspension continue for longer than ten (10) NERC Business Days with respect to any single Transaction unless an early Termination Date shall have been declared and notice thereof pursuant to Section 5.2 given, and (ii) to the extent an Event of Default shall have occurred and be continuing to exercise any remedy available at law or in equity.

5.8 Matters Not Affecting Certain Transactions

. Notwithstanding any other provision of this Agreement to the contrary, any termination effected by any Party pursuant to this Article Five with respect to the Subject Transaction shall not have the effect of terminating this Agreement with respect to any Other Transaction or Other Transactions, and any termination effected by any Party pursuant to this Article Five with respect to any Other Transaction or Other Transactions shall not have the effect of terminating this Agreement with respect to the Subject Transaction, it being understood and agreed that the Parties shall treat the Subject Transaction and Other Transactions independently with respect to the matters for which Article Five provides, and take any permitted termination actions hereunder separately with respect to the Subject Transaction, on the one hand, and Other Transactions on the other hand. The provisions of Section 5.3 shall be applied independently as to the Subject Transaction on the one hand, and the Other Transactions on the other hand, and there shall be no netting out of Settlement Amounts as between the Subject Transaction and any Other Transactions.

ARTICLE Six PAYMENT AND NETTING

6.1 Billing Period

. Unless otherwise specifically agreed upon by the Parties in a Transaction, the calendar month shall be the standard period for all payments under this Agreement (other than Termination Payments, any payments pursuant to Section 4.1 or 4.2 and Option premium payments pursuant to Section 6.7). As soon as practicable after the end of each month, each Party will render to the other Party an invoice for the payment obligations, if any, incurred hereunder during the preceding month.

6.2 Timeliness of Payment

. Unless otherwise agreed by the Parties in a Transaction, all invoices under this Agreement shall be due and payable in accordance with each Party’s invoice instructions on or before the later of the twenty-eighth (28th) day of each month, or tenth (10th) day after receipt of the invoice or, if such day is not a Business Day, then on the next Business Day. Each Party will make payments by electronic funds transfer, or by other mutually agreeable method(s), to the account designated by the other Party. Any amounts not paid by the due date will be deemed delinquent and will accrue interest at the Interest Rate, such interest to be calculated from and including the due date to but excluding the date the delinquent amount is paid in full, and the Party owing such overdue obligation shall be further obligated to pay the Party owed such obligations for such Party’s costs of collection reasonably incurred, including reasonable attorneys’ fees.

6.3 Disputes and Adjustments of Invoices

. A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice, rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered, or the date of any adjustment as provided by the NYISO. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due, with notice of the objection given to the other Party. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within two (2) Business Days of such resolution along with interest accrued at the Interest Rate from and including the due date to but excluding the date paid. Inadvertent overpayments shall be returned upon request or deducted by the Party receiving such overpayment from subsequent payments, with interest accrued at the Interest Rate from and including the date of such overpayment to but excluding the date repaid or deducted by the Party receiving such overpayment. Any dispute with respect to an invoice is waived unless the other Party is notified in accordance with this Section 6.3 within twelve (12) months after the invoice is rendered or any specific adjustment to the invoice is made, or the date of any adjustment as provided by the NYISO. If an invoice is not rendered within twelve (12) months after the close of the month during which performance of a Transaction occurred, the right to payment for such performance is waived. For the purposes of determining invoice amounts, the parties may rely upon meter readings of the entity designated as the applicable metering authority by NYISO, provided, (i) Party A shall be notified and have the right to attend any testing or calibration of applicable meters (and Party B shall not object to Party A's standing or right to attend such events), and (ii) in the event any meter error is detected, the Parties agree to correct invoices to reflect changes in metered amounts of any Product for the period for which such meter error was detected, or if such period is not known, for one-half the period between the date of detection and the last previous test of the applicable meters.

6.4 Netting of Payments

. The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each other on the same date pursuant to all Transactions through netting, in which case all amounts owed by each Party to the other Party for the purchase and sale of Products during the monthly billing period under this Agreement, including any related damages calculated pursuant to Article Four (unless one of the Parties elects to accelerate payment of such amounts as permitted by Article Four), interest, and payments or credits, shall be netted so that only the excess amount remaining due shall be paid by the Party who owes it.

6.5 Payment Obligation Absent Netting

. If no mutual debts or payment obligations exist and only one Party owes a debt or obligation to the other during the monthly billing period, including, but not limited to, any related damage amounts calculated pursuant to Article Four, interest, and payments or credits, that Party shall pay such sum in full when due.

6.6 Security

. Unless the Party benefiting from Performance Assurance or a guaranty notifies the other Party in writing, and except in connection with a liquidation and termination in accordance with Article Five, all amounts netted pursuant to this Article Six shall not take into account or include any Performance Assurance or guaranty which may be in effect to secure a Party’s performance under this Agreement.

6.7 Payment for Options

. The premium amount for the purchase of an Option shall be paid within two (2) Business Days of receipt of an invoice from the Option Seller. Upon exercise of an Option, payment for the Product underlying such Option shall be due in accordance with Section 6.1.

6.8 Transaction Netting

. If the Parties enter into one or more Transactions, which in conjunction with one or more other outstanding Transactions, constitute Offsetting Transactions, then all such Offsetting Transactions may by agreement of the Parties, be netted into a single Transaction under which:

(a) the Party obligated to deliver the greater amount of Products will deliver the difference between the total amount it is obligated to deliver and the total amount to be delivered to it under the Offsetting Transactions, and

(b) the Party owing the greater aggregate payment will pay the net difference owed between the Parties.

Each single Transaction resulting under this Section shall be deemed part of the single, indivisible contractual arrangement between the parties, and once such resulting Transaction occurs, outstanding obligations under the Offsetting Transactions which are satisfied by such offset shall terminate.

ARTICLE Seven LIMITATIONS

7.1 Limitation of Remedies, Liability and Damages

. EXCEPT AS SET FORTH HEREIN, THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, EXCEPT AS OTHERWISE PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN OR IN A TRANSACTION, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. UNLESS EXPRESSLY HEREIN PROVIDED, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACT