ML20056A002

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Trust Agreement Jcp&L Qualified Trust
ML20056A002
Person / Time
Site: Oyster Creek, Saxton  File:GPU Nuclear icon.png
Issue date: 07/26/1990
From: Baldassari D
GENERAL PUBLIC UTILITIES CORP.
To:
Shared Package
ML20055H910 List:
References
NUDOCS 9008030052
Download: ML20056A002 (20)


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1 OYSTER CREEK TRUST AGREEMENT JCP&L QUALIFIED TRUST DATED 1/22/88

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INDENTURE, dated as of che 22nd ' day of January 1988, between JERSEY CENTRAL POWEB & LIGHT COMPANY, a corpo-ration duly organized and existing under the laws of the State of New Jersey, having its principal office at Madison Avenue at Punch Bowl Road, Morristown, New Jersey (the " Company"),

and MIDLANTIC NATIONAL BANK, a banking corporation duly organ-ized and existing under the laws of the United States having its registered office at Metro Park Plaza, Ed ison, New Jersey.

("the Trustee").

r WHEREAS, the Company owns in its entirety the Oyster Creek Nuclear Generating Station

("0CNGS")

located in Lacey Township, Ocean County, New Jersey; and WHEREAS, the Company desires to establish a trust qualifying as a Nuclear Decommissioning Reserve Fund (an "NDRF") within the meaning of section 468A of the Internal Revenue Code of-1986 (the " Code") to make assured provision for the payment of the expense of decommissioning OCNGS subsequent to the retirement thereof; and WHEREAS, the Company has not established and does not maintain any other NDRF with respect to OCNGS; and WHEREAS, all conditions and requirements necessary to i

make~ this Indenture a valid and binding legal instrument, in accordance with its terms and for the purposes herein ex-pressed, have been performed and fulfilled and the execution and delivery hereof have been duly authorized;

N-5 NOW, THEREFORE, THIS INDENTURE WITNESSETH:=

That in consideration of the covenants herein contained, - the

' Company, intending to be legally bound,.hereby covenants and agrees with the Trustee, as follows:

Article I-Nature and Duration of the Trust Section 1.01'.

A trust is hereby established (the-

" Trust") in order to make assured provision for the payment of-

- all, or as great a portion as possible, of the expense asso-ciated with the decommissioning of OCNGS following the retire-ment of such station, i.e.,

following the' cessation of useful-ness ofesuch station for the public service, which expense includes administrative costs and other incidental expenses of the. Trust including amounts payable by the Company pursuant to l

Section 4.03 hereof.

Included among the scope of work of such.

decommissioning are the dismantlement in whole or in part of the said station and the disposal of the component parts thereof in a manner not inimical to the common defense and i

- security or-to the health and safety of the public, in accor-dance with the statutory and regulatory requirements then

- applicable to such decommissioning.

Section 1.02.

The term of the Trust shall extend until all of the funds contributed to it and all earnings thereon accumulated by it shall have been paid out in

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accordance with the prov'isions of Article III hereof.

Upon-l l-such payment by the Trustee of the last of the funds in the l

Trust in accordance with the provisions of Article III hereof, l

the Trust shall terminate.

It is understood, however, that depending upon the adequacy of the level of funding of the l

l trust and the method or methods of decommissioning of OCNGS authorized by the cognizant regulatory agency or agencies and l

utilized by the Company following the retirement of the sta-tion, the Trust may extend for an indefinite period thereafter in order to provide for continuing decommissioning costs of OCNGS.

Article II Payments Into the Trust; Trust Purposes Section 2.01.

Except as limited by Section ?.02, 1

the Company ' intends to make monthly payments into the Trust in the amounts permitted or authorized by such orders of the New -

Jersey Board of Public Utilities ("NJBPU") and the Federal Energy Regulatory Commission ("FERC")

heretofore adopted and in any further-orders hereafter entered by the NJBPU, the FERC or any other governmental agency having jurisdiction in the premises and in any amendments or revisions of said orders.

Section 2.02.

Payments into the Trust shall only be (a) cash with respect to which a ded uction is allowed under Section 468A(a) of the Code or corresponding provisions of any l 1

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subsequent federal - tax law -or ' regulations and paragraph' (a) of Section 1.468A-2T o f. the Temporary Regulations issued by the

-Internal Revenue Service under sections 88 and 408A of the Code (the " Temporary Reg ulations" ) or corresponding provisions of subsequent regulations or (b) such other cash or. property which may be paid into the Trust without adversely.affecting either the deductibility for federal income tax purposes of payments made pursuant to clause (a) of this Section 2.02 or the quali-fication of'the Trust as an NDRF.

s Section 2.03.

It is the express purpose and intent of the within Trust and of the several governmental agency orders relating thereto that the payments made and to be made into the Trust'and all earnings accumulated and to be accumulated thereon shall be utilized for the payment-of the costs incurred by the Company for the decommissioning of OCNGS, following the retirement thereof and except as herein-after provided under Article III hereof, none of such funds shall be subject to. any power of the company, its successors and assigns, to acquire, assign, transfer, pledge, hypothecate or dispose of the said funds in any manner, nor be subject to attachment, garnishment, execution or otherwise for the benefit of creditors of the company.

Article III Payments by the Trustee Section 3.01.

No funds shall be paid out of tie -

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Trust except (1) for a purpose, not inconsistent with the

,j qualification of the Trust as a NDRF,. authorized under Section i

468A of the Code or ' corresponding provisions of any subsequent-federal tax law or regulations or by the Treasury regulations issued thereunder or corresponding provisions of subsequent regulations, and (ii) upon the presentation by the company to the Trustee of a certificate of the company, signed by its President or one of its Vice presidents or its Treasurer, requesting such payment.

t Section 3.02.

Any certificate with respect to reimbursement of the company f or decommissioning costs there-tofore incurred or expended shall include a brief identificau tion of the work performed, services rendered and materials and labor expended by. the Company in connection with the decommis-sioning_of OCNGS (which include administrative costs and other incidental expenses of the trust, including amounts payable by-the Company pursuant to Section 4.03 hereof) which gave rise to the costs for which reimbursement is requested.

Article IV Concerning the Trustee Section 4.01.

The Trustee may invest and reinvest the funds in the Trust, to the extent permitted by law, in Investment obligations, which investment shall be made by the Trustee at the request (made in writing or orally, confirmed in l^

writihg). of a vice president or treasurer or assistant trea-'

surcr of the Company or such other person, who need not be an I

employee of the company, as may be~ designated in writing by a vice president or treasurer or assistant treasurer of. the company.

Such investments shall mature in such amounts and at such times as may be necessary to provide funds when needed to make payments pursuant to certificates presented to the Trustee in accordance~ with Section 3.01 hereof.

The Trustee may request from time to time from the Company, and the Company shall furnish to the Trtstee upon such request, forecasts of the amounts and timing of anticipated requisi-tions.

Interest accruing or profit reall' zed and received from the investment of amounts in the Trust shall be accumulated in the Trust and held for and applied to the decommissioning of OCNGS.

" Investment obligation" shall mean (a) public debt securities of.the United States which are taken into considera-tion for purposes of the public debt limit; (b) obligations of a state or local governmental unit, the interest on which is exempt from taxation under section 103(a) of the Code; (c) checking-accounts, savings accounts, certificates of deposit or other time or demand deposits, not including a common or collective trust fund such as a common trust fund as defined in section 584 of the code, in a bank as defined in section 581 of the Code or in an insured credit union within the l

meaning of section 101(6) of the Federt adit Union Act, 12 t

U.S.C.

1752(7)(1982),- located in the United States, or (d) such other securities, obligations or other investment media author-ized.by Code section 468A or by the -Treasury regulations issued thereunder in which funds of the Trust may be invested without adversely-af fecting its status as a NDRF.

Section 4.02.

The Trustee shall not engage in any act of self-dealing as described in Section 4951(d) of the Code or corresponding prcvisions of any subsequent federal tax law or regulations, except the Trustee may (1)

Make payments for the purpose of satisfying, in whole or in part, the liability of.the Company for decommissioning costs for OCNGS.

(2)

Permit the withdrawal of excess contributions made by the company pursuant to Section 1.468A-5T(c)(2) of the Temporary Regulations or corresponding provisions of subsequent law or regulations.

(3)

Pay amounts remaining ' in the Trust upon receipt of a certificate meeting the requirements of i

Section 3.02 and stating that the _ Company has completed or has f ully provided for the comple-tion of the decommissioning of OCNGS.

Section 4.03.

A.

The Company agrees to pay to the Trustee from.

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time to time reasonable compensation for all services rendered by the Trustee hereunder ( which comperination shall not be

' limited-by any provision of law in regard to the compensation of 'a trustee of an express trust).

B.

The Company hereby ag rees,. e,' cept as otherwier, P

expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provi-sion of this Indenture ( inc1'uding the reasonable compensation and the expenses and disbursements of its agents and counsel),

except any such expense, disbursement,or advance as may be attributable to the Trustee's negligence, willful misconduct or bad faith.

C.

The company hereby agrees to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of the Trust, including the costs and ex penses of defending itself against 1

any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.

l D.

As security for the performance of the obligations of the Company under this Section the Trustee l

shall have the right to use and apply any of the funds in the Trust held by it hereunder and the Trustee shall have a first 1 l

-g lien on'the funds in the Trust to the extent compensation and reimbursement (including, but not. limited to amounts described in Section A-or B hereof) to the Trustee - hereunder remains unpaid.

Section 4.04.

The Trustee shall ' keep true and n

correct books of account with respect to the funds in the Trust and the investment thereof, which books of account shall at all 9

reasonable times during norma'l business hours be open to inspection by the Company, GPU _ Nuclear Corporation, the NRC, the NJBPU, and the FERC.

On or before the last day of April, July and October, commencing on April 30, 1988, and on or before the first day of March of each year, commencing on March 1,. 1989, the Trustee shall furnish to the company a detailed statement showing, with respect to the preceeding quarter or 4

calendar year, as the case may be, the balance of assets of the Trust on hand at the beginning of such quarter or year, all receipts and investment transactions-which took place during such quarter or year, all disbursements made during such quarter or year in accordance with Article III hereof and the balance of assets on hand at the end of such quarter or year.

Section 4.05.

The Trustee undertakes to perform such

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duties and only such duties as are specifically set forth in I

this Indenture, and no implied covenants or obligations shall L

be read into this Indenture against the Trustee.

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Section 4.06.

In the absence of bad faith on its part, the Trustee 'may conclusively rely, as to the truth of the. statements and the correctness of the opinions expressed

therein, upon certificates or opinions furnished to the Tructee and conforming to the requirements of this Inden-ture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under'a duty to examine the same to determine whether or not they conform to the requirements of this Indenture.

Section 4.07.

No provision of-this Indenture shall be construed P.o relieve the Trustee from liability for its own negligent action or failure to act, its own willful misconduct or its.own bad faith except that:

f (1 )1 the Trustee shall not be liable for any error or judgment made in good faith by an officer thereof, unless it shall be. proved = that the Trustee was negligent in ascertaining the pertinent facts; and (2) the Trustee shall not be liable with respect to any. action taken or omitted to be taken by it in good faith in accordance with the exercise of any trust or power conferred upon the Trustee under this Indenture.

No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its -

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duties hereunder, or in the exercise of any of its ~ ights or r

powers,-if-it shall have-reasonable grounds for believing that i

L repaying of such funds or adequate indemnity against such risk-or liability 'is not reasonably assured to it.

Section 4.08.

Whether or not therein-expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording-protec-j tion to the Trustee shall be subject to the provisions of this Article IV.

Section 4.09.

Except as otherwise provided in Sections 4.06 and 4.07:

(a) the Trustee may rely and shall be protected in -acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, believed by it to

'o e genuine and to have been signed or presented by tha proper party or parties; (b) the Trustee may cons 21t with counsel, which may be-counsel to the Company or to GPU Nuclear Corporation _ and the written advice of such counsel or any opinion of counsel shall constitute full and complete good faith authorization and protection in respect of any action taken, suffered, or omitted by the Trustee in reliance thereon; (c) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this p

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-Indenture, unless all other parties hereto shall have offered to the Trustee reasonable security or indemnity, against - the costs,. expenses and liabilities which might be incurred by it in compliance with such request or direction; and (d) in making any payments out of-the Trust, the Trustee shall not be bound 'to inquire as to-the use, applica-tion and allocation of such payments under Article III and the Trustee shall.have no obligation to evaluate, monitor compli-ance with or take any action with regard to the certifications referred to in Section 3.02.

Section 4.10.

The recitals contained herein and the purposes set forth in Article II shall be taken as the statements of the Company, and the Trustee assumes no responsi-bility'for their correctness.

The Trustee makes no representa-tions as to the value or condition of the trust estate or the validity or sufficiency of this Indenture.

The Trustee-shall not be accountable for the use or application by the company of any money properly paid to the Company under any provision hereof.

Section 4.11.

Money held by the Trustee in trust hereunder shall be segregated from funds of the Company but need not be otherwise segregated except to the extent required by law.

The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company.

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Section 4.12.

There shall at all times be as Trustee hereunder an entity which shall be a bank or trust company (1

-organized and doing business under the laws of the United i

States of America or of.any State, authorircJ under such laws to exercise corporate trust powers, each of which shall have-a combined capital and surplus of at least S100,000,000, subject to supervision or :::r.mination by Federal or State authority.

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If any such corporation publishes reports of condition at least 1

i annually, pursuant to law or to the requirements of such-supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corpor-i ation shall be deemed-to be its combined capital and surplus as l

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set forth in' its most recent report of condition so published.

If at any time any Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall' resign' i

immediately in the manner and with the effect hereinafter specified in this Article.

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Section 4.13.

Resignation and Removal; Appointment i

of Successor.

A.

No removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the succes-sor Trustee under Section 4.14.. -

-B.

The Trustee may resign at any time by giving written notice to the Company.

If an instrument of accept-ance by a ~ successor Trustee shall not have been delivered to the resigning Trustee within 60 days after the giving of such notice of resignatio.;, the resigning Trustee may petition any court having jurisdiction for the appointment of a succes-sor Trustee.

C.

If the Trustee shall become incapable of acting or shall be acjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilita-tion, conservation or liquidation, the Company may by resolu-tion of its Board of Directors, remove the Trustee.

D.

If the Trustee shall resign, be removed or become incapable of. acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company, by resolution of its. Board of Directors, shall promptly appoint a successor Trustee.

E.

Service by the Trustee under any indenture relating to or executed by the Company - shall not be deemed to be in conflict or incompatible with the services of that Trustee hereunder, and shall not constitute a basis for i

removal hereunder.

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Section 4.14.

Every auccessor Trustee appointed hereunder shall execute, acknowledge and deliver to the Cnmpany and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such

. successor Trustee, without any further act, deed or convey-ance, shall become cested with the properties, rights, powers, trusts 1and duties of the retiring Trustee; but on request of the company or the successor Trustee, such retiring Trustee shall, upon payment of its fees and charges incurred through the date of such appointment, execute and deliver an instrument conveying and-- transferring to such successor Trustee upon the trusts herein expressed all the properties, rights, powers and trusts of-the retiring Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property and money held by - such retiring Trustee hereunder, subject nevertheless to its lien, if any, provided for.in Section 4.03D.

Upon request of any such successor Trustee, the Company shall execute any and all instruments to more fully and certainly Vest in and confirm to such successor Trustee all s.uch estates, properties, rights, powers and trusts.

No successor Trustee

- shall accept its appointment unless at the time of such accep-tance such successor Trustee shall be qualified and eligible under this Article.

Section 4.15.

Any corporation into which the Trustee may be merged or converted or with which it may be consoli- -

dated, or any corporation resulting from any merger, cotversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be othe r wise qualified and eligible under this Article, without the execution or filing of any paper of any further act on the part of any of tha parties hereto.

Article V Amendments Section 5.01.

This Indenture may be amended in writiag from time to time by the Company, and such amendment shall aecome ef fective on such date as shall be specified in such amendment; provided, however, that no amendment shall be made which would allow any portion of the Trust assets to be paid or disbursed other than for costs and expenses associ-ated with the decommissioning of OCNGS.

i Section 5.02.

Upon receipt by the Trustee of any written amendment to this Indenture executed and delivered to the Trustee by the company and of any supporting documentation reasonably required by the Trustee to satisfy itself that such amendment has been duly authorized and delivered, the Trustee shall acknowledge receipt of such amendment and it shall be l

deemed effective. _

Section 5.03.

No amendment of this Indenture sought to h-effective pursuant to Sections 5.01 which would, in the opinion of the Trustee, increase the obligations of the Trustee or adversely affect its rights, protection or indemnities here-under shall be effective without the consent of the Trustee.

If such consent is not granted by the Trustee within 30 days of its receipt of such amendment, the Trustee shall be deemed to have furnished, on the 30th day after its receipt of such amendment, a written notification of its intent to resign as Trustee on the 90th day following its receipt of such amendment and a successor Trustee shall be appointed in accordance with Section 4.13, in which event such amendment shall become effective upon the appointment of such Successor Trustee, or if earlier, upon the effective date of the Trustee's resignation.

Article VI Miscellaneous Section 6.01.

All covenants *nd agreements in this Indenture shall be binding upon and inure to the benefit of the respective parties hereto, their successors.and assigns.

In the event that the Company shall transfer any or all of its interest in OCNGS, such transferee or transferees of such interest shall succeed to the Company's rights and obligations hereunder with respect to the interest transferred to the extent, if any, expressly provided in the document of transfer, upon such transferee's or transferees' execution of an instru-l ment satisfactory in form and substance to the Trustee making them a party to this agreement.

1 Section 6.02.

Written notices hereunder shall be deemed to have been given to a party hereto if delivered or

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mailed to such party at the registered office of such party.

i Section 6.03.

This Indenture has been concluded within, and shall be construed in accordance with the laws of, the State of New Jersey.

Settion 6.04.

This Indenture shall be simultaneously executed in several counterparts, and all such counterparts executed and delivered, each as an original, shall constitute but' one and the same ins';rument.

IN WITNESS WHEREOF, Jl?RSEY CENTRAL POWER & LIGHT COMPANY has caused this Indenture to be signed in its corporate name by its President or one of its Vice Presidents, and its corporate seal to be affixed hereunto, and the same to be attested by its Secretary or an Assistant Secretary; and MIDLANTIC NATIONAL BANK has caused this Indenture to be signed in its corporate name by its President or one of its Vice 1

Presidents, and its corporate seal to be affixed hereunto, and I

the same to be attested by its Secretary or one of its Assis-tant Secretaries.

I JERSEY CENTRAL POWER & LIGHT COMPANY

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2 By MMM D. Baldassari 5

I Vice President EV 3

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C. A. Marks Assistant Secretary MIDLANTIC NATIONAL BANK By[

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2;r;;;cYMICHAEL DAVOREN VICE PRESIDENT

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