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BK:00027 PG <br />1. Incorporation The foregoing recitals are incorporated herein by reference as if <br />fully set forth at this point in the text of the Agreement. <br />2. Definitions <br />"Coal Ash" means fly ash, bottom ash, boiler slag, or flue gas desulf nization <br />materials or effluents from a Duke coal -fired generating unit in North Carolina. <br />"Environmental Laws" means any and all federal, state and local statutes, rules, <br />regulations, ordinances, and other provisions having the force or effect of law, all judicial and <br />administrative orders and determinations, and all common law concerning human health, safety, <br />worker health and safety, pollution and protection of the environment or natural resources, <br />including without limitation, the North Carolina Coal Ash Management Act of 2014 ( "CAMA ") <br />and the United States Environmental Protection Agency's Disposal of Coal Combustion <br />Residuals from Electric Utilities final rule, each as amended and as now or hereafter in effect. <br />3. Settlement Payments Duke shall pay Lee County the sum of one dollar and fifty <br />cents ($1.50) per ton for up to eight (8) million tons of Coal Ash that Duke places at the Site. <br />Duke shall pay Lee County the sum of three dollars and fifty cents ($3.50) per ton for each ton <br />of Coal Ash that Duke places at the Site in excess of eight (8) million tons (if additional capacity <br />exists beyond current expectations). The weight of the Coal Ash shall be determined based upon <br />measurement by DOT - approved scales at the Duke generation sites or the Site as applicable or <br />by such method as is mutually agreed upon between Duke and Charah. Such scale reports shall <br />be reasonably made available to Lee County upon request and by such method as is mutually <br />agreed upon between Duke and Lee County. <br />a. Initial Advance Duke shall make an initial payment to Lee County of Four <br />Million and No /100 Dollars ($4,000,000.00) within ten (10) business days of the Site's <br />Commercial Operation Date. The "Commercial Operation Date" shall be the date that all of <br />the following have occurred: (i) all permits and governmental approvals required by applicable <br />laws, including Environmental Laws, have been received by Duke or Charah for reclaiming the <br />Site with coal ash structural fill; and (ii) the Site has been fully constructed, prepared, improved, <br />developed, and tested such that it is fully ready and capable of receiving deliveries of Coal Ash. <br />This initial advance shall cover the first 2,666,666 tons of Coal Ash placed at the Site. Once <br />Duke has placed 2,666,666 tons of Coal Ash to the Site, it shall begin making annual payments <br />to Lee County as described in paragraph 3.b. below. <br />b. Annual Payments The first annual payment described in paragraph 3.a. above <br />shall be made on or about the date that is twelve (12) months after the date that Duke completes <br />placement of the first 2,666,666 tons of Coal Ash to the Site, and shall be based on the quantity <br />of Coal Ash delivered during that period multiplied by the rate of $1.50 per ton. Duke shall <br />continue to make payments annually thereafter, based on the quantity of Coal Ash placed at the <br />Site during the prior twelve (12) month period multiplied by the rate of $1.50 per ton, until eight <br />(8) million tons of Coal Ash has been placed at the Site. Payments for Coal Ash delivered to the <br />Site in excess of eight million tons (if such capacity and need exist) shall be made at the rate of <br />Page 2 of 10 <br />