ML20056A009

TMI-1 Trust Agreements

ML20056A009
Person / Time
Site:	Crane, Saxton  File:GPU Nuclear icon.png
Issue date:	07/26/1990
From:	High D GENERAL PUBLIC UTILITIES CORP.
To:
Shared Package
ML20055H910	List: ML20056A002 ML20056A009 ML20056A018
References
NUDOCS 9008030069
Download: ML20056A009 (82)

Text

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ATTACMENT 5 I

TMI-l TRUST AGREEMENTS:

NET-ED QUALIFIED TRUST DATED 3/1/88 MET-ED NON-QUALIFIED TRUST DATED 9/26/79 PENELEC QUALIFIED TRUST DATED 3/7/88 PENELEC NON-QUALIFIED TRUST DATED 9/26/79 JCP&L QUALIFIED TRUST DATED 1/22/88 j

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t INDENTURE, dated as of the 1st day of March 1988, between METROPOLITAN EDISON COMPANY, a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania, having its principal office at 2800 Pottsville Pike, Reading, Pennsylvania (the " Company"), and YORK BANK AND TRUST COMPANY, a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania (the " Trustee"),

'having its registered office at Market and Beaver Streets, York, Pennsylvania.

WHEREAS, the Company owns, as a tenant in common, a 50% undivided interest in the Three Mile Island Nuclear Gener-ating Station - Unit 1 ("TMI-1") located in Londonderry Town-ship, Dauphin County, Pennsylvania; 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 its allocable share of the expense of decommis-sioning TMI-1 subsequent to the retirement thereof; and WHEREAS, the Company has not established and does not maintain any other NDRF with respect to TMI-1; and WHEREAS, all conditions and requirements necessary to 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;

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l 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 t

Section 1.01.

A trust is hereby established (the L

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

all, or as great a.por tion as possible, of the Company's l

allocable share of the expense associated with the decommis-sioning'of TMI-1 following the retirement of such station, i.e.,

following the cessation of usefulness of such station for the public service.

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 i

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 o

applicable to such decommissioning.

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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 accordance with the provisions of Article III hereof.

Upon such payment by the Trustee of the lant of the funds in the Trust in accordance with the provisions of Article III hereof, -

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the Trust shall _ terminate.

It is understood', however, that depending upon the adequacy of the level. of f unding' of the.

l trust and' the method or. methods of decommissionin9 of TMI-1 authorized by the cognizant regulatory agency or agencies and v

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. utilized by the Company following the retirement of the 'sta-

. tion, the Trust may extend for an indefinite period thereafter.

j in order to provide for continuing decommissioning costs of i

TMI-1.

i Article II Payments Into the Trust: Trust Purposes 1

Section 2.01.

Except as limited by Section 2.02, the Company intends to make monthly payments into the Trust in the amounts permitted or authorized by such orders of the l

t Pennsylvania Public Utilities Commission ("PAPUC") and-the l

Federal Energy Regulatory Commission ("FERC")

heretofore adopted and in any further orders'hereafter entered by the

PAPUC, 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 deduction is allowed under Section 468A(a) of the Code or corresponding provisions of any subsequent federal tax law or regulations and paragraph (a) of Section 1.468A-2T of the Temporary Regulations issued by the Internal Revenue Service under secticns 88 and 468A of the Code..

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(the " Temporary Reg ulat ions" ) 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.

Section 2J03.

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 exclusively f or the payment of (a) the costs incurred by the Company for the decommissioning of TMI-1, following the retirement thereof and (b) possible customer refunds, in such manner as the PAPUC and any other governmental - agency having jurisdiction in the premises may direct, of any funds not required to pay, or to make provision for the payment of, either immediate or fore-seeable long-term post-retirement decommissioning costs of TMI-1; and that, except as hereinaf ter - 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, execu-tion or otherwise for the benefit of creditors of the Company.

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f Article III-l 5

Payments by the Trustee j

Section 3.01.

No funds shall be paid out of the l

Trust.except (i) for a purpose, not inconsistent with the qualification 1 of the Trust as a NDRF, authorized under Section 468A of the Code or corresponding provisions of any subsequent federal tax law or regulations or-by the Treasury regulations issued thereunder or corresponding provisi~ons of subsequent

-regulations, and (ii) ' upon the presentation by the Company to

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the Trustee of a certifi.ite of the Company, signed by its

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President or one of its Vice Presidents or its Treasurer, requesting such payment, i

Section 3.02.

Any certificate with respect to reimbursement of the Company for decommissioning costs there-tofore incurred or expended shall include a brief identifica-tion of the work performed, services - rendered and materials ' and labor expended by the company in connection with the decommis-sioning of TMI-1 which gave rise to the costs for which reim-bursement is requested.

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Article IV i

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Concerning the Trustee Section 4.01.

The Trustee may invest and reinvest the funds in the Trust, to the extent permitted by law, in L

Investment obligations, which investment shall be made by the i.

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Trustee at the request-(made in writing or. orally, confirmed in writing) of a vice president or treasurer or assistant trea-l 1

surer of the company or such other person, who need not be an-employee of the company, as may be designated in writing by a i

vice president or treasurer or assistant treasurer of the i

i Company.

Such investments shall mature in such amounts and at such times as may be necessary to provide funds when l

needed to make payments pursuant to certificates. presented to l

the Trustee in accordance with Section 3.01 hereof.

The Trustee may request from time to time from the Company, - ' a nd j

the Company shall furnish to the Trustee upon such request, i

forecasts of the amounts and timing of anticipated requisi-tions.

Interest accruing or profit realized 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 TMI-1.

" 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,

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i meaning of section 101(6) of the Federal Credit Union Act, 12 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 I

without adversely affecting its status as a NDRP.

Section 4.02.

The Trustee shall not engage in any

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act of self-dealing as described in Section-4951(d) of the Code or corresponding provisions of any subsequent federal tax l

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 TMI-1.

(2)

Permit the withdrawal of excess contributions made by. the company pursuant to Section 1.468A-5T(c) s 2)' of the Temporary Regulations or s

corresponding provisions of subsequent law or regulations.

(3)

Pay amounts remaining in the Trust upon receipt of a certificate meeting the requirements of Section 3.02 and stating that the Company has completed or has fully provided for the comple-tion of the decommissioning of TMI-1.

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s Section 4.03.

A.

The Company agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to receive, reasonable compensation for services rendered by it in the execution of the trust hereunder.

Under no circumstances, however, shall the assets of the trust be subject to claims of the Trustee for compensation or expenses; the Trustee shall look solely to the Company, its successors and assigns, for payment thereof.

I B.

The Company hereby agrees, except as otherwise 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 (including 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, wilfull misconduct or bad faith, i

C.

The Company hereby agrees to indemnify the Trustee for, and to hold it harmless against, any loss, j

liability or expense incurred without negligence, wilfull 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 expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.

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l Section 4.04.

The Trustee shall keep true and=

q correct books of account with respect to the funds in the Trust J

and the investment thereof, which books-of account shall at all reasonable. times ' during normal business hours be open to inspection by the Company, GPU Nuclear Corporation, the NRC, the PAPUC, and the FERC.

On or before the last day of April,

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i July and October, commencing on April 30, 1988, and on or j

before the first day of March of each year, commencing on-March l

1, 1989, the Trustee shall furnish to the Company a-detailed

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statement showing, with respect to the preceeding quarter or 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 j

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 j

duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee.

Section 4.06.

In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of t

the statements and the correctness of the opinions expressed

therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Inden-

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which by any provision hereof are specifically required to

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be furnished to the Tr'astee, the Trustee shall be under a L

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 to relieve the Trustee from liability for its own l

negligent action or failure to act, its own willful misconduct a

or its own bad faith except that (1) the Trustee shall not be liable for any error or.

f 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.

l 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 t

duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repaying of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

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Section 4.08.

Whether or not therein expressly so i

provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protec-l tion to the Trustee shall be subject to the provisions of this Article IV.

i Section 4.09.

Except as otherwise provided in Sections 4.06 and 4.07:

(a) the Trustee may rely and shall be protected l

in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, f

believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) the Trustee may consult 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 l

and protection in reap 6ct of any action taken, suffered, or l

omitted by the Trustee in reliance thereon; l

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.the Trustee shall be under no obligation to l

exercise any of the rights or powers vested in it by this i

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Indenture, unless all other parties hereto shall have of fered l

l 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 l

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i (d) in making any payments out of the Trust, the Trustee shall not be bound to inqvire as to the use, applica-i tion -and allocation of such payments under Article III and the Trustee shall have no obligation to evaluate, monitor compli-l 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 i

i the purposes set forth in Article II shall be taken as the i

statements of the company, and the Trustee assumes no responsi-bility for their correctness.

The Trustee makes no representa-l l

tions as to the value or condition of the trust estate or the i

validity or suf ficiency of this Indenture.

The Trustee shall' i

not be accountable for the use or application by the Company of 1

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 r

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 l

l otherwise agreed with the Company.

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Section 4.12.

There shall at all times be as Trustee i

hereunder an entity which shall be a bank or trust company I

organized and doing business under the laws of the United States of America or of any State, authorized under such laws l. -.-

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to exercise corporate trust powers, each of which shall have a combined capital and. surplus of at -least $50,000,000,- subject to supervision or examination by Federal or State authority.

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If any such corporation publishes reports of condition at least 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-ation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

If at any time any Trustee chall cease to be elig ible. in accordance with the provisions of this Section, it shall resign immediately in the manner and with the'effect hereinafter specified in this Article.

Section 4.13.

Resignation and Removal; Appointment of Succesmor.

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.

1 B.

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

If an instrument of accept-j ance by a successor Trustee shall not have been delivered to the resigning Trustee within 60 days after the giving of such notice of resignation, the resigning Trustee may petition..

g; any court having jurisdiction for the appointment of a succes-sor Trustee.

C.

If the Trustee shall become incapable of acting l-or-shell be adjudged a bankrupt or insolvent, or a receiver L

of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of Eits property or affairs for the purpose of rehabilita-tion, conservation or liquidation, the company may by resolu-j i

tion of its Board of Directors, remove the Trustee.

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If the Trustee.shall r e s ig n~,

be removed or beco 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.

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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 removal hereunder.

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Section 4.14.

Every successor Trustee appointed hereunder shall

execute, acknowledge and deliver to the Company 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 1 )

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A successor Trustee, without any further act, deed or convey-

- ance, shall become vested with the properties, rights, power s,

trusts and 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 th ro ug h.

the date of such appointment, execute and deliver an inst'rument conveying and transferring to such successor Trustee upon the trusts herein expressed all the properties, rights, powers and I'

trusts of'the retiring Trustee, and shall duly assign, transfer 1

L and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.

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 such estates, properties, rig hts,

powers and trusts.

No successor Trustee shall accept its appointment unless at the time of such acceptance such.succes-sor 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, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the l

corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be i

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i otherwise qualified and eligible under this Article, without' the execution or filing of any paper of any further act on the part of any of the parties hereto.

Article V Amendments i

Section 5.01.

This Indenture may be amended from time i

to time by the Company in such manner as shall not be incon-sistent with any orders or regulations of the PAPUC or other governmental agencies having ju'risdiction in the premises; provided, however,. that no amendment shall be made which would 1

allow any portion of the trust assets to be turned over to the Company, it successors or assigns, except to reimburse the Company, as aforesaid, for funds theretofore expended by. It L

either for decommissioning purposes or as refunds of unneeded E

J funds to its customers, in each case in accordance with all I

applicable statutory and' regulatory requirements.

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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

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reasonably required by the Trustee to satisfy itself that such amendment has been duly authorized and delivered, the Trustee

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shall acknowledge receipt of such amendment and it shall be 1

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deemed effective.

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Section 5.03.

No amendment of this Indenture sought to be effective pursuant to Sections 5.01 which would, in the I

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.

t 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 and agreements in 1

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 TMI-1, 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 m.

ment satisfactory in form and - substance to the Trustee making s

them a party to this agreement.

Section 6.02.

Written notices hereunder shall.be

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deemed to have - been given to a party hereto if delivered or mailed to such party at the registered of fice of such party.

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Section 6.03.

This Ind en t'u r e has-been concluded

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i within, and shall be construed in accordance with. the laws of the Commonwealth of Pennsylvania.

i Section 6.04. 'This Indenture shall be simultaneously j

executed in several counterparts, and all such counterparts 6

executed and delivered, each as an original, shall constitute but one and the same instrument.

j IN WITNESS WHEREOF, METROPOLITAN EDISON COMPANY has caused this Indenture to be -signed in its corporate name by its President'or one of-its Vice Presidents, and i

its corporate seal to be affixed hereunto, and the same to.

be attested by its Secretary or an Assistant Secretary; and YORK BANK AND TRUST COMPANY has caused this Indenture to be -

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signed in its corporate name by its President or one of its i

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r j-Vice Presidents, and its corporate seal to be affixed hereunto, and the same to be attested by its Secretary or one of its Assistant Secretaries.

METROPOLITAN EDISON COMPANY B. J. /kM er Vice # resident Attest n/

!b Secretary YORK BANK AND TRUST COMPANY By M R

Vir E.P.7??!.'It1T Attest:

MW Assistastefetary L

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INDENTURE, dated as of the ll,r# day of September, c

1979, between METROPOLITAN EDISON COMPANY,.a corporation-

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duly organized and existing under the, laws of the Commonwealth-of Pennsylvania,.having its registered office at 2800 Pottsville Pike, Muhlenberg Township, Berks County, Pennsylvania 19640 (the " Company"), party of the first part, and York Bank and Trust Company, a corporation duly organized and-existing under the laws of the Commonwealth of Pennsylvania (the

" Trustee"), having its registered office at Market and-Beaver Streets, York, Pennsylvania 17405, party of the second part.

WHEREAS, the Company owns a.50% undivided interest.

(as tenant in common with the owners of the other undivided interests) in Unit No. 1 of the Three Mile Island nuclear generation station ("TMI-1") which is located in Londonderry Township, Dauphin County, Pennsylvania; and WHEREAS, the Company, pursuant.to the Order of the Pennsylvania Public Utility Commission (the "P.U.C.")

entered September 18, 1978 at R.I.D. 434-et al. and March-29, 1979 at R.I.D.

626 et al., desires to establish a trust to make provision for the payment'of all, or as great a portion as possible, of the-Company's 50% share of the expense of

' decommissioning TMI-1 subsequent to the retirement thereof; and WHEREAS, all conditions and requirements necessary to make this Indenture a valid and binding legal instrument,

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in accordance with its terms and for'the purposes herein

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expressed, have been performed and fulfilled and the execution and delivery hereof-have been duly authorized:

N,0W, THEREFORE, THIS INDENTURE WITNESSETH:

r That in consideration of-the covenants herein contained, the

.I Company hereby covenants and agrees with the Trustee, as

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follows:

Article I.

Nature and Duration of the Trust Section 1.01.

The within trust is hereby established pursuuat to the aforesaid Orders in order to-make assured i

provision for the payment of all, or as. great a portion as possible, of the Company's 50% share of the expense associated:

a with the decommissioning of TMI-1 following the retirement of such unit, i.e.,

following the cessation of usefulness of f

such unit for the public service.

Included among the scope of work of such-decommissioning are the dismantlement in i

.whole or in part of the said unit and the disposal of the component parts thereof in a manner not inimical to the common defense and security or to the health and safety of the public, in accordance with the statutory and regulatory requirements then applicable to such decommissioning.

Section 1.02.

The term of the within trust shall extend until all of the funds contributed to the trust and i

.all. earnings thereon accumulated by the trust shall have been paid out in accordance with the provisions of Article L

III hereof. Upon such payment by the Trustee of the last of

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the-funds in the trust in accordance with the provisions of Article III hereof, the trust hereunder shall thereupon l

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' terminate..

It ;is understood, however, _ that depending upon the adequacy of the level of funding of the within trust and i

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L the method.or methods of decommissioning of TMI-1 authorized by'the cognizant regulatory agency or agencies and utilized r

g by the Company following the retirement of the unit, the i

trust:may extend for an indefinite period thereafter in order _to provide for continuing decommissioning costs of TMI-1.

Article II.

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-Payments into the Trust; Trust Purposes Section 2.01.

The Company shall make monthly payments' into the trust in the amounts specified in the aforesaid P.U.C. orders and in any further orders hereafter

. entered by the P.U.C. or any other governmental agency having jurisdiction in the premises and in any amendments or revisions.of said orders.

Section 2.02.

It is the express purpose and j

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 exclusively for the payment of (a) the costs incurred by the Company for the decommissioning of TMI-l following the retirement thereof and (b) possible customer refunds, in such manner as the PUC and any other governmental agency having jurisdiction in the l

premises may direct, of any funds not required to pay, or

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'make provision for the payment of, either immediate or foreseeable long-term post-retirement decommissioning costs j

of TMI-1; and that, except as hereinafter provided under hj Article III, hereof, none of such funds shall be subject to any power of the-Company, tts successors and assigns, to.

.f acquire, assign, transfer, pledge, hypothecate or dispose of

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the said funds in any manner, nor be subject to attachment, t

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 the l

trust except _ upon the presentation by the Company to the

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Trustee of a certificate of the. Company, signed by its l

President or one of its Vice Presidents and its Treasurer or o

an-Assistant Treasurer, requesting such payment.

Section 3.02.

Any certificate with respect to reimbursement of the 'ampany for' decommissioning costs theretofore incurred or expended shall include the following:

(a)

A statement that TMI-l'has been retired and l

l is in the process of being decommissioned; 1

(b)- A brief identification of the work performed, l

services rendered and materials and libor expended b/

the Company in connection with the decommissioning of such unit which gave rise to the costs for which re-imbursement is requested; l

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hp L(c): A! statement 1that such costs:have not there-

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Ltofore beenbthess'bject of' reimbursement of the' Company-u i"

out of: funds oftthe trust; and

(,d)-

A statement that all necessaryLauthorizations of-the P.U.C. and any other governmental agencies-P havina $ Irisdiction with respect.to - th'e decommissioning:

of ruu _41t and the requested payment from the trust have been obtained.

A Each1 certificate of the Company requesting payment, as=aforesaid, out of the. trust for decommissioning costs w

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theretofore incurred or expended by the CompanyLshall;be-11 accompanied-by a certificate of a registered professional i

I engineer,.an appraiser or other expert, who may be an officer or employee of-the Company or of an affiliate of the' Company, as to the fair value of the-work performed, services rendered y

I and materials,and labor expended which are the subject of L{

the request for. reimbursement out of the trust.

Section 3.03.

Any certificate with respect to reimbursement of-the Company-for refunds theretofore made by 1

it to customers of funds previously collected from customers l

1

?t and paid into the within trust shall include the follewing':

(a) a statement of the circumstances which gave"

- i rise to the payment of such refund; (b) a statement of the amount of refunds so paid; (c) a statement that such refunds have not there-J tofore been the subject of reimbursement of the Company out.of the funds of the trust; and i

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.(d) a-statement that-all n'cessaryLauthorizations of the P.U.C. and any other. governmental agencies

~having jurisdiction with respect to the requested J

payment from the trust have been obtained.

Section 3.04.

Each certificate of the. Company requesting payment, as aforesaid~, out of the trust.shall-be accompanied by an opinion of counsel stating that the request for such-payment to the Company has been duly authorized by the' Company and that all necessary authorizationc, approvals or consents.of the P.U.C.

and any-other governmental agencies having jurisdiction with respect to such requested payment have been obtained.

p Article IV.

Concerning the Trustee Cection 4.03.

The Trustee hereby accepts the trust cr.

m.a hereunder.

The Trustee agrees that it shall use tt same der se of care and skill in the execution by it' q

of th(

-S t'

,awers vested in it by this Indenture as

-perse er i, discretion and intelligence would exerci<

<me.ne ci.rcumstances in the conduct of their own affairs.

I *'

1 iection 4.02.

The Trustee shall hold, invest and reinvest the funds delivered to it hereunder and shall accumulate, invest and reinvest the trust income hereunder.

7 hA

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V Section 4.03.

The Trustee shall invest and reinvest the funds delivered to it hereunder and the income-thereon in securities issued by the Commonwealth of Pennsylvania, i

'its political subdivisione, agencies and authorities which are lega' favestments under Pennsylvania law for savings banks 3 as ths Trustee may, from time to time, determine. The Trustee teay also invest In uch other securities as may be authorized by the P.U.C.

or such other governmental agencies having jurisdiction in the premises, which authorization shall be conclusively evidenced by delivery to the Trustee-t by the Company of a copy of the order or other document-setting forth such authorization.

Pending the making-of such investments, the Trustee may deposit any amounts held by it hereunder in interest-bearing accounts in any commercial bank or banks having a-capital and surplus not less than $40,000,000.

Section 4.04.

The Company agrees-to pay to the Trustee from time to time, and the Trustee shall be entitled to receive,' reasonable compensation for services rendered by-it in the execution of the trust hereunder.

Under no circum-stances, however, shall the assets of the trust be subject-to claims of-the Trustee for compensation or expenses; the Trustee shall look solely to the Company, its successors and assigns, for payment thereof.

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'7' 8'-

Section 4.05.

The Trustee shall keep true and correct books of account-with respect to the trust funds and investments, which-books of account shall at all. reasonable times be op,en to the inspection of the Company,.or its duly appointed representatives, and the P.U.C. or other govern-mental-agency having jurisdiction in the premises.

On or before the first day of February of each year, commencing on February 1, 1980, the Trustee shall furnish to the Company a detailed stater.ent showing, with respect to the preceding l

calendar year, the balance of assets on hand at the beginning

'of such year, all receipts and investment transactions which took place during such year, all disbursements, 1f any, made during such year in accordance with Article III hereof and the balance of assets on hand at the end of such year.

Section 4.06.

The Trustee. upon receipt of documents furnished to it by the-Company pursuant to the provisions of 3

the Indenture, shall examine the-same to determine whether i

they conform to the requirements hereof.

The Trustee acting in good faith.may conclusively rely, as to the truth of i

statemen's and the correctness of opinions expressed therein, t

upon certificates or opinions conforming to the requirements aof this Indenture.

In the event that the Trustee in the administration of the trust hereunder, shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless evidence in respect thereof is otherwise specifically

3:

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- prescribed hereunder) may~be deemediby the-Trustee to be p

y conclusively proved or established-byla~ certificate signed =

y by;the, President or a Vice. President andLthe Treasurar or an r,.

H AssistantnT,reasurer or:the: Comptroller'or.an Assistant.

- ComptrollerLof'the Company and delivered to the Trustee.

Section 4.07.

The Trustee may resign at any. time upon thirty (30) days' prior written notification to the.

Company.

The. Company may remove the Trustee atranyLtime upon thirty.(30)' days' prior written notification to the l

R.

Trustee. In the event that the Trustee shall-be adjudged bankrupt or1 insolvent, a vacancy shall thereupon be deemed to exist in the office of Trustee and a successor shall l

thereupon'be appointed by the Company.

Any successor' Trustee d

appointed. hereunder shall execute, acknowledge-and deliver to the Company an appropriate written instrument accepting such appointment hereunder,' subject to all the-terms and i

- conditions hereof, and thereupon such. successor Trustee shall become fully vested with all the rights,. powers,

.,i trusts, duties and obligations of its predecessor in trust hereunder, with like effect as if originally. named as Trustee hereunder.

The predecessor Trustee shall upon written request of the Company deliver to the successor Trustee all

!I

. such instruments and perform.such other acts as may be 1

l i

required or be desirable to vest and confirm in said successor Trustee all right, title and interest in the res of the i

i trust.to which it succeeds.

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. I Section 4.08: Any corporation into.which the v

Trustee may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which th,e Trustee shall be a party, or any corporation to which the' corporate trust functions of the Trustee may be transferred, shall be the successor Trustee under this Indenture, without'the necessity of executing or filing any

- additional acceptance of this trust or the performance of any further act on the part of any other parties' hereto; provided, however, that the Trustee hereunder shall at all times be.a bank or trust company having its registered office and principal place of business in the Commonwealth of Pennsylvania and which is authorized under the laws of 7

said Commonwealth to exercise corporate trust powers subject to supervision or examination by Federal or Commonwealth authorities.

Article V.

Amendments This Indenture may be amended from time to time by the Company in such manner as shall not be inconsistent with any orders or regulations of the P.U.C. or other governmental agencies having jurisdiction in the premises; provided, however, that no amendment shall be made which would allow any portion of the trust assets to be turned over to the Company, its successors or assigns, except to reimburse the

E'

.4 c:, Company, as'aforesaid, for funds theretofore expendedLby it either for decommissioning purposes or. as refunds of un-q needed funds to -its customers, in each case in accordance with all applicable statutory and regulatory requirements.

Article VI.

. Miscellaneous Section 6.01.

All covenants and 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 TMI-1, such transferee or transferees of such_ interest shall succeed to the Company's rights and obligations hereunder with respect to the interest trans-ferred upon their execution of an instrument satisfactory in form and substance to the Trustee making them a party to this agreement.

Section 6.02.

Written notices' hereunder shall be deemed to have been given to a party-hereto if delivered or mailed to such party at the registered office of such party.

Section 6.03.

This Indenture has been concluded within, and shall be construed in accordance with the laws of, the Commonwealth of Pennsylvania.

Section 6.04.

This Indenture shall be simul-taneously executed in several counterparts, and all such counterparts executed and delivered, each as an original,

{

4

, c shall' constitute but one and the same instrument.

IN WITNESS WHEREOF, Metropolitan' Edison Company, the party of the r first part, has caused this Indenture to be signed-in (ts corporate name by its President or one-of its Vice Presidents, and its corporate seal to be affixed'here-unto, and the same to be attested by its Secretary:or an Assistant Secretary; and York Bank and Trust Company, party.

of the second part, has caused this Indenture to' ins 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 one of its Assistant Secretaries.

Executed and delivered in the Township of Muhlenberg',

Berks County, Pennsylvania, as of the day and year first above written.

METROPOLITAN EDISON COMPANY By g -$r

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Vice President Attest:

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Secretary YORK BANK AND TRUST C HPANY s

c By\\

d,, h N \\,1 Ik q q*PresiM nt e " ~~

w Attest:

E/ YW/Nk&-

Ass 7' nbeeretary

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l INDENTURE, dated as of the 7th day of-March 1988, between PENNSYLVANIA ELECTRIC COMPANY, a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania, having its-principal office at 1001 Broad Street, Johnstown,- Pennsylvania ( the ' ' " Company" ), and PENNBANK, a corporation duly organized and existing under the laws of. the Commonwealth of Pennsylvania ( the. " Trustee"), having its registered office at 315 Second Avenue, Warren, Pennsylvania.

WHEREAS, the company owns, as a tenant in common, a 25% undivided interest in the Three Mile Island Nuclear Gener-ating Station - Unit 1 ("TMI-1") located in Londonderry Town-ship, Dauphin County, Pennsylvania; 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 its allocable share of the expense of decommis-sioning TMI-1 subsequent to the retirement thereof;. and WHEREAS, the Company has not established and does not maintain any other NDRP with respect to TMI-1; and WHEREAS, all conditions and requirements necessary to make this Indenture a valid and binding legal instrument, in L

accordance with its terms and for the purposes herein ex-l pressed, have been pe r formed and fulfilled and the execution and delivery hereof have been duly authorized; l

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9 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 Company's allocable share of the expense associated with the decommis-sioning of TMI-1 following.the retirement of such station, i.e.,

following the cessation of usefulness of such station for the public service.

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 4

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 accordance with the provisions of Article III hereof.

Upon such payment by the Trustee of the last of the funds in the Trust in accordance with the provisions of Article III hereof, 2-i

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s

-r the Trust shall terminate.

It is understood, however, that

- depending upon the adequacy of the level of funding of the trust and the method or methods of decommissioning of TMI-1 authorized by the cognizant regulatory agency or agencies and 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 TMI-1.

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

_Except as imited by Section 2.02, the Company intends. to make monthly payments into the Trust in the amounts permitted or authorized by-such orders of the Pennsylvania Public Utilities Commission ("PAPUC") and the Federal Energy Regulatory Commission ("FERC")

heretofore adopted and in any further orders hereafter entered by the PAPUC,- 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 deduction is allowed under Section 468A(a) of the Code or corresponding provisions of any subsequent federal tax ' law or regulations and parag raph (a) of Section 1.468A-2T of the Temporary Reg ulations issued by the Internal Revenue Service under sections 88 and 468A of the Code

.(the " Temporary Regulations") or-corresponding provisions of l

subsequent regulations or (b) such other-cash or property which may be paid into the Trust without adversely af fecting 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.

1+.

1.

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 exclusively for the l-payment of (a) the costs incurred by the Company for the l

decommissioning of TMI-1, following the retirement thereof and (b) possible customer refunds, in such manner as the PAPUC and l

any other governmental agen'cy having jurisdiction in the premises may direct, of any funds not required to pay, or to L

make provision for the payment of, either immediate or fore-seeable.long-term post-retirement decommissioning costs of TMI-Ir and that, except as hereinafter provided under Article III hereof, none of such funds shall be subject to any power of ac 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, execu-tion or otherwise for the benefit of creditors of the Company.

_4

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Article III Payments by the Trustee' Section 3.01.

No funds shall be paid out of the-Trust except (i) for a purpose, not inconsistent with the

-qualification of the Trust as a NDRP, authorized under Section.

468A of the Code or corresponding provisions of any - subsequent:

4

-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.

Section 3.02.

Any ' certificate with respect to reimbursement of the Company for decommissioning costs there-tofore incurred or expended shall include a brief identifica-tion of the work performed, services' rendered and materials and labor. expended by the Company in connection with the decommis-sioning of TMI-I which gave rise to the costs for which reim-bursement 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 writing) of a vice president or treasurer or assistant.trea-surer of the company or such other person, who need not be an employee of the Company, as may be designated in writing by_ a vice president or treasurer or assistant treasurer of tne 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 Trustee upon such request, forecasts of the amounts and timing of anticipated requisi-tions.

Interest accruing or profit realized 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 TMI-1.

" Investment oblig ation" 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 !

-s-meaning ' of section 101(6) of the Federal Credit Union Act, 12 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 reg ulat ion s -

issued thereunder in which funds of the Trust may be invested without adversely affecting 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 provisions 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 TMI-1.

(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 U

regulations.

(3)

Pay amounts remaining in the Trust upon receipt

'j of a certificate meeting the requirements of-Section 3.02 and stating that the Company has-completed or has fully provided for the comple-tion of the decommissioning of TMI-1.

, i

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Section 4.03.

A.

The Company agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to receive, reasonable compensation for services rendered by it in the execution of the trust hereunder.

Under no circumstances, j

however, shall the assets of the trust be subject to claims of the Trustee for compensation or expenses; the Trustee shall look solely to the Company, its successors and assigns, for payment thereof.

B.

The Company hereby agrees, except as otherwise 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 (including 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, wilfull misconduct or

[i 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, wilfull r

misconduct or bad faith on its part, arising out of or in L

connection with the acceptance or administration of the Trust, including the costs and ex penses of defending itself against 1

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

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t Section 4.04.

The. Tr ustee shall keep true and correct books of account with respect to the funds in the Trust and the investment thereof, which books of account shall at'all reasonable times during normal business hours be open to inspection by the Company, GPU Nuclear Co r po r at ion', the NRC, the PAPUC, 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 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 d ur ing ' 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 duties and only such. duties as Are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee.

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 Trustee and conforming to the requirements of this Inden-

-9

.1.

w ture; but' in. the' case of any suchicertificates' 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 to relieve the Trustee from liability for its own negligent action or failure to act, its own willful misconduct r

or its own bad f aith except that:

(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 duties hereunder, or in the exercise of any of its rights or powe r s, i f it shall have reasonable grounds for believing that 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 I

provided, every provision of this Indenture relating to the conduct or.affecting the liability of or affording protec-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

- -i n acting or refraining from acting upon any resolution, certificate, statement, instrument,

opinion, report, notice, believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) the Trustee may consult 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 fa i th 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 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

- 11

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r (d) in making any payments _out of the Trust, the q

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-i any money properly paid to the Company under any provision hereof.

Faction 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

.i interest on any money received by it hereunder except as otherwise agreed with the Company.

Section 4.12.

There shall at all times be as Trustee hereunder an entity which shall be a bank or trust company organized and doing business under the laws of the United States of America or of any State, authorized under such laws 12 -

o i

to exercise corporate trust powers, each of which shall have a combined capital and surplus of at least S50,000,000, subject to supervision ' or examination by Federal or State authority.

If any such corporation publishes reports of condition at least.

annually, pursuant to law or to the requirements of such i

i supervising or examining authority, then for the purposes of'

=this Section, the combined capital and surplus of such corpor-ation shall be deemed ta be its combined capital and surplus as 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 immediately in the manner and with the effect hereinafter specified in this Article.

Section 4.13.

Resignation and Removal; Appointment 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 resignation, the resigning Trustee may petition I

.any cou'rt ' having jurisdiction for the appointment of a succes-sor Trustee.

C.

If the Trustee shall become incapable of acting or shall be adjudged 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 removal hereunder.

Section 4.14.

Every successor Trustee appointed I

hereunder shall

execute, acknowledge and deliver to the Company 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 i

4 F

successor Trustee, without any f urther. act, deed or convey-ance, shall become vested with the properties, rights, powers, trusts and duties of the retiring Trustee; but on request of the Company.or the successor Trustee, such retiring Trustee j

shall, upon payment of its fees and charges incurred: thr oug h 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 l

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.

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 such estates, properties, rig hts,

powers and trusts.

No successor Trustee shall accept its appointment unless at the time of such acceptance such succes-sor 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, conversion 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 m.

s.

pi s

l otherwise qualified and eligible under this Article, without the execution or filing of any' paper of any f urther act on the part of any of the parties hereto.

l Article V Amendments section 5.01.

This Indenture may be amended from time to time by the Company in such manner as shall not be incon -

sistent with any orders or regulations of the PAPUC or other governmental agencies having jurisdiction in the premises; provided, however, that no amendment shall be made which would p

allow any portion of the trust assets to be turned over to the l

Company, it successors or assigns, except to reimburse the-Company, as aforesaid, for funds theretofore expended by. it either for decommissioning purposes-or as refunds of unneeded funds to its customers, in each case in accordance ' with all applicable statutory and regulatory requirements.

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 s'

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 deemed effective.

.,9 l

i Section 5.03.

No amendment of this Indenture sought 7

to be ef fective' pursuant to Sections 5.01 which would, in the opinion of the Trustee,. increase the obligations of the Trustee i

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 l

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, upor the ef fective date of the Trustee 's resignation.

Article VI Miscellaneous Section 6.01.

All covenants and 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 TMI-1, 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-1 ment ~ satisfactory in form and substance to the Trustee-making them a party to this agreement.

I Section 6.02.

Written notices-hereunder shall be deemed to. have been given to a party hereto if delivered or mailed to such party at the registered office of such party..

Section 6.03.

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

^

the Commonwealth of Pennsylvania.

Section 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 instrument.

IN WITNESS WHEREOF, PENNSYLVANIA ELECTRIC 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 1

be attested by its Secretary or an Assistant Secretary; and PENNBANK has caused this Indenture to be signed in its corporate name by its President or one of its Vice Presidents, s

- 18

Pr p

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'and its corporate seal to be af fixed hereunto, and the 'same. te be attested by-its Secretary or-one of its Assistant Secretaries

]

a PENNSYLVANIA ELECTRIC. COMPANY By vice President Attest:

MM Secretary i

PENNBANK d u l

PENNX BMI5X j

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By-Vice Presi' dent f

i Att t:

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i dbk h / s V}&

i Secretary

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I; INDENTURE, dated as of the 26th day of-September, 1979, between PENNSYLVANIA ELECTRIC COMPANY, a corporation duly organized and existing under the laws of the Commonwealth

'of Pennsylvania, having its registered office at 1001 Broad Street, Johnstown, Cambria County, Pennsylvania (the " Company"),

party of the first part, and Pennsylvania Bank and Trust l

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Company, a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania (the " Trustee"),

having its registered office at 127 West Spring Street, i

Titusville, Pennsylvania 16354, party of the second part.

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WHEREAS, the Company owns a 25% undivided interest j

i (as tenant in common sith the owners of the other undivided interests) in Unit No. 3 c f the Three Mile Island nuclear.

t generation station ("THI-1") which is located in Londonderry

-l Township, Dauphin County, Pennsylvania; and WHEREAS, the Company, pursuant to the Orders of the Pennsylvania Public Utility Commission (the "P.U.C.")

entered June 28, 1978 at R.I.D.

392 et al. and-January 26, 1979 at R-78040599 et al., desires to establish a trust to make assured provision for the payment of all, or as great a portion as possible, of the Company's 25% share of the expense of decommissioning TMI-1 subsequent to the retirement thereof; and WHEREAS, all conditions and requirements necessary to make this Indenture a valid and binding legal instrument, e

.' in accordance with its terms and for the purposes herein expressed, have been performed and fulfilled and the exe-cution and delivery hereof have been duly authorized:

NOW, THERETORE, THIS INDENTURE WITNESSETH:

That in consideration of the covenants herein contained, the Company hereby covenants and agrees with the Trustee, as folloWs:

Article I.

Nature and Duration f the Trust Section 1.01.

The within trust is hereby established pursuant to the aforesaid Orders in order to make assured provision for the payment of all, or as great a portion as possible, of the Company's 25% share of the expense associated with *:he decommissioning of TMI-1 following the retirement of such unit, i.e.,

following the cessation of usefulness of such unit for the public service.

Included among the scope of work of such decommissioning are the dismantlement in whole or in part of the said unit and the disposal of the component parts thereof in a man.;er not inimical to the common defense and security or to the health and safety of the public, in accordance with the statutory and regulatory requirements then applicable to sue' decommissioning.

Section 1.02.

The term of the within trust shall extend until all of the funds contributed to the trust and all earnings thereon accumulated by the trust shall have been paid out in accordance with the provisions of Article III hereof. Upon such payment by the Trustee of the last of

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I the funds in the trust in accordance with the provisions of Article III hereof, the trust hereunder shall thereupon t erminat e.

It is understood, however, that depending upon the adequacy of the level of funding of the within trust and the method or methods of decommissioning of TMI-1 authorized by the ecgnizant regulatory agency or agencies and utilized by the Company following the retirement of the unit, the trust may extend for an indefinite period thereafter in order to provide for continuing decommissioning costs of TMI-1.

Article II.

Payments Into the Trust; Trust Purposes Section 2.01.

The Company shall make monthly payments into the trust in the amounts specified in the aforesaid P.U.C. orders and in any further orders hereafter entered by the p.U.C. or any other governmental agency having jurisdiction in the premises and in any amendments or revisions of said orders.

Section 2.02.

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 exclusively for the payment of (a) the costs incurred by the Company for the 9-decommissioning of TMI-1 following the retirement thereof l

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-and (b) possible customer refunds, in such manner as the PUC l

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and any other governmantal agency having jurisdiction in the premises may direct, of any funds not required to pay, or to make provision for the payment of, either immediate or foreseeeble long-term post-retirement decommissioning costs of TMI-1; and that, except as hereinafter 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 the trust except 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 and its Treasurer or an Assistant Treasurer, requesting such payment.

Section 3.02.

Any certificate with respect to reimbursement of the Company f or decommissioning costs e

theretofore incurred or expended shall include the following:

(a)

A statement that TMI-l has been retired and is in the process of being decommissioned; (b)

A brief identification of the work performed, services rendered and materials and labor expended by

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t 1 the Company in connection with the decommissioning of such unit which gave rise to the costs for which reimbursement is requestedt

(.c)

A statement that such costs have not there-tofore been the subject of reimbursement of the Company out of funds of the trust; and

'd)

A statement that all necessary authorizations of the P.U.C. and any other governmente' agencies having jurisdiction with respect to tl decommissioning of such unit and the requested payment from the trust.

have been obtained.

Each certificate of the Company requesting payment, as aforesaid, out of the trust for decommissioning costs theretofore incurred or expended by the Company shall be accompanied by a certificate of a registered professional engineer, an appraiser or other expert, who may be an officer or employee of the Company or of an affiliate of the Company, as to the fair value of the work performed, services rendered

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and materials and labor expended which are the subject of the request for reimbursement out of the trust.

l Section 3.03.

Any cer.tificate with respect to reimbursement of the Company for refunds theretofore made by it to customers of funds previously collected from customers and paid into the within trust shall include the following:

(a) a statement of the circumstances which gave rise to the payment of such refund;

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e 1 (b) a statement of the amount of refunds so paid; (c) a statement that such refunds have not there-tofore been the subject of reimbursement of the Company out of the funds of the trust; and (d) a statement that all necessary authorizations of the P.U.C. and any other governmental agencies having jurisdiction with respect to the requested payment from the trust have been obtained.

Section 3.04.

Each certificate of the Company requesting payment, as aforesaid,, out of the trust shall be accompanied by an opinion of counsel stating that the request for such payment to the Company has been duly authorized by the Company and that all necessary authorizations, approvals or consents of the P.U.C. and any other governmental agencies having jurisdiction with respect to such requested payment have been obtained.

Article IV.

Concerning the Trustee Section 4.01.

The Trustee hereby accepts the trust created hereunder.

The Trustee agrees that it shall use the same degree of care and skill in the execution by it of the rights and powers vested in it by this Indenture as persons of prudence, discretion and intelligence would exercise under the circumstances in the conduct of their own affairs.

L Section 4.02.

The Trustee shall hold, invest and reinvest the funds delivered to it hereunder and shall accumulate, invest and reinvest the trust income hereunder.

Section 4.03.

The Trustee shall invest and reinvest the' funds delivered to it hereunder and the income thereon in securities issued by the Commonwealth of Pennsylvania, its political subdivisions, agencies and authorities which are legal investments under Pennsylvania law for savings banks, as the Trustee may, from time to time, determine. The Trustee may also invest in such other securities as may.be authorized by the P.U.C. or such other governmental agencies having jurisdiction in the premises which authorization shall be conclusively evidenced by delivery to the Trustee by the Company of a copy.of the order or other document setting forth such authorization.

Pending the making of such investments, the Trustee may deposit any amounts held by it hereunder in interest-bearing accounts in any commercial bank or banks having a capital and surplus not less than $25,000,000.

Section 4.04.

The Company agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to receive, reasonable compensation for services rendered by it in the execution of the trust hereunder.

Under no circum-stances, however, shall the assets of the trust be subject to claims of the Trustee for compensation or expenses; the

4

-8 Trustee shall look solely to the Company, its successors and assigns, for payment thereof.

Section 4.05.

The Trustee shall keep true and correct books of account with respect to the trust funds and investments, which books of account shall at all reasonable times be open to the inspection of the Company, or its duly appointed representatives, and the P.U.C. or other govern-mental agency having jurisdiction in the premises.

On or 1

before the first day of February of each year, commencing on February 1, 1980, the Trustee shall furnish to the Company a detailed statement showing, with respect to the preceding calendar year, the balance of assets on hand at the beginning l

of such year, all receipts and investment transactions which took place during such year, all disbursements, if any, made during such year in accordance with Article III hereof and the balance of assets on hand at the end of such year.

Section 4.06.

The Trustee, upon receipt of documents furnished to it by the Company pursuant to the provisions of the Indenture, shall examine the same to determine whether they conform to the requirements hereof.

The Trustee acting in good faith may conclusively rely, as to the truth of statements and the correctness of opinions expressed therein, upon certificates or opinions conforming to the requirements of this Indenture.

In the event that the Trustee in the administration of the trust hereunder,

n shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless evidence in respect thereof is otherwise specifically prescribed hereunder) may be deemed by the Trustee to be conclusively proved or establiened by a certificate signed by the President or a Vice President and the Treasurer or an Assistant Treasurer or the Comptroller or an Assistant Comptroller of the Company and delivered to the Trustee.

Section 4.07.

The Trustee may resign at any time upon thirty (30) days' prior written notification to the Company.

The Companv may remove the Trustee at any time upon thirty (30) days' prior written notification to the Trustee. In the event that the Trustee shall be adjudged bankrupt or insolvent, a vacancy shall thereupon be deemed q

i to exist in the office of Trustee and a successor shall thereupon be appointed by the Company.

Any successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company an appropriate written instrument accepting such appointment hereunder, subject to all the terms and

.c conditions hereof, and thereupon such successor Trustee shall become fully vested with all the rights, powers, trusts, duties and obligations of its predecessor in trust hereunder, with like effect as if originally named as Trustee hereund er.

The predecessor Trustee shall upon written request of the Company deliver to the successor Trustee all

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such instruments and perform such other acts as may be required or be desirable to vest and confirm ih said successor Trustee all right, title and interest in the res of the trust to which it succeeds.

Section 4.08 Any corporation into which the Trustee may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Trustee shall be a party, or any corporation to which the corporate trust functions of the Trustee may be transferred, shall be the successor Trustee under-this Indenture, without the necessity of executing or filing any additional acceptance of this trust or the performance of any further act on the_part of any other parties hereto; provided, however, that the Trustee hereunder shall at all times be a bank or trust company-having its registered office and principal place of business in the Commonwealth of Pennsylvania and which is authorized under the laws of said Commonwealth to exercise corporate trust powers subject to supervision or examination by Federal or Commonwealth authorities.

Article V.

Amendments This Indenture may be amended from time to time by the Company in such manner as shall not be inconsistent with r

any orders or regulations of the P.U.C. or other governmental agencies having jurisdiction in the premises; provided,

i however, that no amendment shall be made which would allow any portion of the trust assets to be turned over to the Company, its successors or assigns, except to reimburse the Company, as aforesaid, for funds theretofore expended by it either for decommissioning purposes or as refunds of un-needed funds to its customers, in each case in accordance with all applicable statutory and regulatory requirements.

Article VI.

Miscellaneous Section 6.01.

All covenants and 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 TMI-1, such transferee or transferees of such interest shall succeed to the Company's rights and obligations hereunder with respect to the interest trans-ferred upon their execution of an instrument satisfactory in i

form and substance to the Trustee making them a party to this agreement.

Section 6.02.

Written notices hereunder shall be deemed to have been given to a party hereto if delivered or mailed to such party at the registered office of such party.

Section 6.03.

This Indenture has been concluded within, and shall be construed in accordance with the laws of, the Commonwealth of Pennsylvania.

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1 Section 6.04.

This Indenture shall be simultaneously i

executed in several counterparts, and all such counterparts l-executed and delivered, each as an original, shall constitute but one and,the same instrument.

i IN WITNESS WHEREOF, Pennsylvania Electric Company, the party of the first part, has caused this Indenture to be i

signed in its_ corporate name by its President or one of its t

Vice Presidents, and its corporate seal to be affixed here-unto, and the same to be attested by its Secretary or an l

Assistant Secretary; and Pennsylvania Bank and Trust Company, party of the second part, 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 here-unto, and the same to be attested by its Secretary or one of its Assistant Secretaries.

Executed and delivered in the City of Johnstown, Cambria County, Pennsylvania, as of the day and year first above written.

PENNSYLVANIA ELECTRIC COMPANY 1

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2 By President AttyM V w~n n Secretary PENNSYLVANIA BANK AND TRUST COMPANY

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l Vice ~ Presi~ dent At t:

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dgt. Secretat$

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,e p-INDENTURE, dated as of the 22nd day of January 1988, between JERSEY CENTRAL POWER & LIGHT COMPANY, a corpo-rt. tion 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-l ized and existing under the laws of the United States having its registered office at Metro Park Plaza, Ed ison, New Jersey l'

("the Trustee").

l WHEREAS, the Company owns, as a tenant in common, a l

25% und ivided interest in the Three Mile Island Nuclear Gener-ating Station - Unit 1 ("TMI-1") located in Londonderry Town-t l

ship, Dauphin County, Pennsylvania; and I

l 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 its allocable share of the expense of decommis-sioning TMI-1 subsequent to the retirement thereof; and WHEREAS, the Company has not established and does not maintain any other NDRF with respect to TMI-1; and WHEREAS, all conditions and requirements necessary to 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; 1

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 l

all, nr as great a portion as possible, of the company's allocable share of the ex pense associated with the decommis-sioning of TMI-1 following the retirement of such station, i.e., following the cessation of usefulness of such station for the public service, which expense includes administrative costs and other incidental ex penses of the Trust including amounts payable by the Company pursuant to Section 4.03 hereof.

l 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 l

inimical to the common defense and security or to the health and safety of the public, in accordance 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 l l

accordance with the provisions of Article III hereof.

Upon such payment by the Trustee of the last of the funds in the Trust in accordance with the provisions of Article III hereof, the Trust shall terminate.

It is understood, however, that depending upon the adequacy of the level of funding of the trust and the method or methods of decommissioning of TMI-1 authorized by the cognizant regulatory agency or agencies and 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 TMI-1.

Article II Payments Into the Trusti Trust Purposes Section 2.01.

Except as limited by Section 2.02, 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 PERC 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 deduction is allowed under Section 468A(a) of the Code or corresponding provisions of any If e

subsequent federal tax law or regulations and paragraph (a) of Section 1.468A-2T of the Temporary Regulations issued by the Internal Revenue Service under sections 88 and 468A of the Code (the " Temporary Regulations")

or corresponding provisions of subsequent regulations or (b) such other cash or property which v

may be paid into the Trust without adversely affecting either the deductibilitr for federal income tax purposes of payments 6

made pursuant to clause (a) of this Section 2.02 or the quali-fication of the Trust as an NDRF.

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 TMI-1, 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 the i

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r Trust except (i) for a purpose, not inconsistent with the qualification of the Trust as a NDRF, authorized under Section 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 (11) 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.

Section 3.02.

Any certificate with respect to reimbursement of the Company for decommissioning costs there-tofore incurred or expended shall include a brief identifica-tion of the work. performed, services rendered and materials and labor expended by the company in connection with the decommis-sioning of TMI-1 (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 i

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 O

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writing) of a vice president or treasurer or assistant trea-1 1

surer of the company or such other person, who need not be an

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employee of the Company, as may be designated in writing by a j

i 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 Trustee upon such request, forecasts of the amounts and timing ' of anticipated requisi-tions.

Interest accruing or profit real12ed 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 TMI-1.

" Investment obligation" shall mean (a) public debt securities of the United States which are taken into considera-tion for purposes of the public debt limitt (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 meaning of section 101(6) of the Federal Credit Union Act, 12 s

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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 f unds of the Trust may be invested without adversely affecting 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 provisions 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 TMI-1.

(2)

Permit the withdrawal of excess contributions made by the Company pursuant to Section 1.468A-ST(c)(2) of the Temporary Regulations or corresponding provisions of subsequent law or 4

regulations.

I (3)

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

Section 3.02 and stating that the Company has completed or has fully provided for the comple-tion of the decommissioning of TMI-1.

l Section 4.03.

l 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 compensation 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 agrees, except as otherwise 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 (including 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 l

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 l

connection with the acceptance or administration of the Trust, including the costs and expenses of defending itself against l

any claim or liability in connection with the exercise or l

performance of any of its powers or duties hereunder.

D.

As security for the performance of the l

obligations of the Company under this Section the Trustee a

f shall have the right to use and apply any of the funds in the l

Trust held by it hereunder and the Trustee shall have a first i

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a n i

lien on the funds in the Trust to the extent compensation f

and reimbursement (including, but not limited to amounts j

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described in Section A or B hereof) to the Trustee hereunder remains unpaid.

Section 4.04.

The Trustee shall keep true and correct books of account with respect to the funds in the Trust and the investment thereof, which books of account shall at all reasonable times during normal 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 i

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 l

balance of assets on hand at the end of such quarter or year.

Section 4.05.

The Trustee undertakes to perform such L

duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall 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 1

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therein, upon certificates or opinions furnished to the Trustee 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 l

be furnished to the Trustee, the Trustee shall be under a i

L 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 to 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 (1) the Trustee shall not be liable for any error or l

judgment made in good faith by an officer thereof, unless it shall be proved that the Trustee was negligent in ascertaining l

the pertinent facts; and j

l (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 rights or powers, if it shall have reasonable grounds for believing that repaying of such f unds 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-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 be genuine and to have been signed or presented by the proper party or parties; (b) the Trustee may consult with counsel, which may i

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 t

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 I

(d) in making any payments out of the Trust, the Trustee shall not be bound to inquire as to the use, applica-tion and allocetion 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 L

referred to in Section 3.02.

Section 4.10.

The recitals c'ontained 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 j

validity or sufficiency of this Indenture.

The Trust _e shall not be accountable for the use or application by the Company of any money properly paid to the Company under any provision I

-hereof.

Section 4.11, Money held by the Trustee in trust l'

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 organized and doing business under the laws of the United States of America or of any State, authorized under such laws to exercise corporate trust powers, each of which shall have a combined capital and surplus of at least $100,000,000, subject to supervision or examination by Federal or State authority.

If any such corporation publishes reports of condition at least 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-ation shall be deemed to be its combined capital and surplus as 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 sha21 resign immediately in the manner and with the effect hereinafter specified in this Article.

Section 4.13.

Resignation and Removal; Appointment 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.

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i 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 resignation, 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 I

or shall be adjudged

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

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of its Board of Directors, shall prompt 1y appoint a successor Trustee.

E.

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

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f Section 4.14.

Every successor Trustee appointed hereunder shall execute, acknowledge and deliver' to the company 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-k ance, shall become vested with the properties, rights, powers, trusts and 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 succes' or Trustee upon the s

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, nubject 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 such 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.

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Section 4.15.

Any corporation into which the Trustee l

may be merged or converted or with which it may be consoli-l 9

dated, or any corporation resulting from any merger, conversion 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 otherwise qualified and eligible under this Article, without the execution or filing of any paper of any further act on the part of any of the parties hereto.

Article V Amendments Section 5.01.

This Indenture' may be amended in writing from time to time by the company, and such amendment shall become effective 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 TMI-1.

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

}

l shall acknowledge receipt of such amendment and it shall be i

deemed effective.

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t Section 5.03.

No amendment sf this Indenture sought to be ef fective 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 ef fective date of the Trustee's resignation.

Article VI

$scellaneous Section 6.01.

All covenants and 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 TMI-1, 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-r n

y, I

ment satisfactory in form and substance to the' Trustee making jf them a party to this agreement.-

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Section 6.02.

Written notices hereunder shall be deemed to have been given to a party _ hereto if delivered or mailed to such party at the registered office of such party.

Section 6.03.

This Indenture has been concluded i

within, and shall be constraed-in accordance with the laws of, the State of New Jersey.

Section 6.04.

This Indenture shall be simultaneously-1 executed in -overal counterparts, and all such counterparts executed and delivered, each as an original, shall constitute but ene and the same instrument.

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IN WITNESS WHEREOF, JEESEY CENTRAL POWER & LIGHT COMPANY has caused this Indenture ti de signed in its corporate name by its President or one of its Vice ~ Presidents, and i

its corporate seal to. be af fixed hereunto, and the same to i

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

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r

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Pr e sid en t s', -- and its corporate seal to be affixed hereunto, and l

3-1 the same: to be attested by its Secretary or one' of its Assis-4 tant Secretaries.

JERSEY CENTRAL POWhR i LIGHT COMPANY l'!

7 4nQ 3

J By t__ s r

y U.

BaldaThari 4-y i

Vice President-2-

7 Attest:

' Ed U t

I i

o 4n n a..

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

'/

// / ~

FAQUILLAci; Attest:

VKT PRtsineNT & TausT orriera C.+ s,

==r?' MICHAEL DA_VOREN VICE PRESIDE!G

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