ML20196B895

First Amended & Restated Master Decommissioning Trust Agreement Dtd as of 961216 Between Cleveland Electric Illuminating Co & Mellon Bank

ML20196B895
Person / Time
Site:	Beaver Valley, Davis Besse, Perry
Issue date:	12/16/1996
From:	CLEVELAND ELECTRIC ILLUMINATING CO.
To:
Shared Package
ML20196A665	List: ML20196A660 ML20196B787 ML20196B850 ML20196B877 ML20196B895
References
NUDOCS 9906230292
Download: ML20196B895 (34)

Text

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I FIRST AMENDED AND RESTATED MASTER

. DECOMMISSIONING TRUST AGREEMENT l S dated as of December 16,1996 between GII{E'CLEV5CA D'ELECTRICILLUMINATING; COMPANY /

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MELLON BANK, N.A. l as Trustee i

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.T Table of Contents

. P.agt ARTICLE I ESTABLISHMENT AND DECLARATION OF TRUST................... I 1.1 Establishment o f Trust ........ ..... ..... ..... . ........... ......... ....................... ..... ,1 1.2 Declaratio n o f Trust.. .. ........................ . .... ..... ...... ... ... .................... ..... .. 2 ARTICLE II PURPOSE OF TRUST; USE OF TRUST ASSETS........................... 2 2.1 P urpo se o f Trus t . . . . . . . . . . . . . .. .. . .. . . ... . ... . . . . . . .. .. . . . . . . . . .. . ... .. . . . . . . . .. . . . . . . . .. . . . 2 . . . ...

2.2 Permitted Uses of Tru::t Funds ............................................................. 2 2.3 Pooling of Assets; Fund Accounts ....... ............................. ................. 3 2.4 - Permitted Investments .. . .. ... ... . ..... . .. ..... ...... . . .. .. . ...... . ... ... ...... ........ . . . ... 5 ARTICLE III DIRECTION OF INVESTMENTS ... ............................................... 7 3.1 Appointment of Investment Managers ..................... ........................... 7 3.2 - Duties Relating to Separate Investment Accounts ............. ................. 8

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3.3 Transfer of Assets to Investment Manager....... .................. ................ 8 3.4 - I nve stment o f Cash .. ..... . ... .... .. .. . . .... . . . . .. . . . . . .. .... .. . .. ... . .. . . ...... .. ...... . .. . 9 3.5 Limitation of Liability of Trustee.. .......................................... ...... .... 9 3.6 ' Company Direction .. ... .... .. . ... ..... .... .... ..... . ... . ........ ......... .... ...... .... .... .. .. 9 ARTICLE IV CONTRIBUTIONS BY THE COMPANY....................................... I1 4.1 N ature o f Contributi o ns . . .. . . . . .. .. . . . . .... . . . . . . . ... . .... .... ...... ..... ... ....... ..... . . I1 4.2 Co ntri b u ti o ns . .. . . . . . . . . . . . . . . . . . . .. . . .. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. I1 ARTICLE V INDEMNIFICATION OF THE TRUSTEE ....................... ............ .. I1 5.1 I ndemni ficatio n .. .... . .... ... . ...... . .. . . . . . . . ... . .. .. . . . ........... .... . . .. .. .. .. ...... .. .. . ... I1 ARTICLE V1 QUALIFICATIONS, DUTIES AND POWERS OF THE TRUSTEE 11

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m 6.1 - Q ualifications o f the Trustee ..... ..................... ....... ...... ......... .......... I1

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6.2 Dutles and Powers of the Trustee................................................... ..... 12 l

6.3 O verdraft Reimbursement............. .. .... .. ... . ... ...... .. .. ......... ... .... ... .......... .. 15 6.4 Authority with Respect to Amounts and Sufficiency of Contributions 1,6  !

6.5 . Duties Not Expr=!y Undertaken .................................... ................... 16 ARTICLE VII TAXES AND EXPEN S ES ................. .............................................. 16 7.1 Taxes................................................................................................... 16 7.2 - Brokerage Commissions and Other Expenses...................................... 16 7.3 Trustee's Compensation and Expenses .......................... ............. ....... 17 ARTICLE VIII ACCOUNTINGS BY THE TRUSTEE ............................. ............ I7 8.1 Inspection of Books and Records ... .............................. ...................... 17

,e 8.2 S tatements o f Account. ....... . ... . . . ... . . ... . .. . . ................ ..... . ... ..... ... .... ... . . . ... 17 l

8.3 Persons Entitied to Accounting ....... ..................................... ..... .... . 18 )

ARTICLE IX REMOVAL OF RESIGNATION OF THE TRUSTEE ......... .......... 18 i

9.1 Resignati o n o r Removal .......... .. . . .. .. .... . .. . . .... .... . . ... .. . . . . .. .. . . . . . ..... . . . . . . . . . . I8 9.2 Failure to Appoint Successor Trustee ....................... .. . ........ ..... .. I8 9.3 Merger o f Trustee ...... . ... .. . ......... . .... .. . .. . . ... . .... . .. .. .. .. . .. .. . . .... .. . . . . . . . ... . . . .. I8 ARTICLE X ACTION B Y THE COMPANY . ................ ................. .................... I9 10.1 Ani cl e t o A c t . . .. . . .. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . ... . . . .. . . . . . . . . 19 . . . . . . . . . . . .. . ,

10.2 Reliance of Tmstee on Written Certifications, Etc. .. . ..... .... . ........... 19 l 10.3 Cettai n I nform ati on .... . . .. ... ... .. .. ...... .. .. .. .... . . . . . . .. . . . .. . . ... . . . .. . . . .. . . .... . I9 ARTICLE XI AMENDMENT OF AGREEMENT................................... .............. 19 I9 1 1.1 Am e nd m e n t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

h I ARTICLE XII TERM OF THE TRU ST ... ................ ............. .. ..20.........................

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i 12.1 Termination at the Option of the Company.......................................... 20 12.2 Trust Term . .... .. ... . .. ..... ... . ... . . . .. ... .. . . . . . ..... . . . . . . . . . .. . . . . . . . . . . . . . . . .. . . . . . .. . . . . . . . .. . . . 20 12.3 Final Distribution of Trust Fund Assets...... .. .......... .. ...... .............. . 20 ARTICLE XIII DEFINITIONS ................ ... .............. .......................................... 20 13 .1 D e fini tio ns .. . .... .... .. .. .. . . .. . . ... . .. . . . . . . . . .. . . . . . .. . . . . . . . . . .. . . . . . . . . . . . .. . . . . . . . . . . .. . 20 ARTICLE XIV MISCELLANEOUS PROVISIONS AND EFFECTIVE DATE... 23 14.1 Notices......................................................................................... 23 1 4.2 S e verability.. . ... ... ...... .... .. . .. . .. .. . . .. . . . . . . . . .. . . . . . . . . . . . . .. . . .. . . . . . .. . . . . .. . . . . .. . .. . . . . . . 24 14.3 S eparate Co unterparts...... . ....... . ... . ..... ..... .. . .. . .. .. . ......... .. . ... .... ....... ... .. . 24 14.4 S uccessors and Assigns ..... ......... .................... .................. ................. 24 14 .5 Hea din g s . .. .. ... .. . . .. .. . ... . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .. .. . . . . . . . . . . . . . . .. . . . .24

- 14.6 G overning Law.... ..... ... ... . . .. . .. .. . . . . ... .. . . .. . . . . . . . . . ... .. .... ..... ... . . ..... . .. .. . 25 14.7 Administration o f Trust ............ . ... ...... ... ...... .... .. ................... ..... .... 25' I 4.8 Performance by the Company . .................... ........... ........ ....... .......... 25 14.9_ Qualification of Qualified Trust Funds under Section 468A oftheCode............................................................................................ 25 14.10 Force Maj eure........ ........ ... ... .. . .. .. .. . . .. .. .. . ... . .. ... ... . . .. .... ..... ...... . .. .. . .. 25 Schedule I Nuclear Generating Units and Related Trust Funds Schedule II Allocation ofInitial Contributions O

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.) THIS FIRST AMENDED AND RESTATED DECOMMISSIONING TRUST AGREEMENT (hereinafter referred to as the " Agreement") made this 16th day of December, 1996, by and between The Cleveland Electric Illuminating Company, an Ohio corporation having its principal place of business at Cleveland, Ohio (" Company"), and Mellon Bank, N.A., a national bank, hav'mg its principal place of business at One Mellon Bank Center, Pittsburgh, Pennsylvania, not in its individual capacity but solely as trustee (the " Trustee").

RECITALS The Company has certain obligations under Applicable Law (as such term and certain other capitalized terms used herein are defined in Article XIII hereof) with respect to the ,

Decommissioning ofits interests, whether now existing or hereinafter acquired, in the Nuclear Generatir.g Units identified in Schedule I hereto.

The Company established a trust to provide for the Decommissioning ofits interests in the Nuclear Generating Units pursuant to that certain DECOMMISSIONING TRUST AGREEMENT (" Original Trust Agreement") dated July 1,1988 by and between the Company and AmeriTrust Company National Association as trustee (the " Predecessor Trustee").

The Original Trust Agreement was amended by that certain FIRST AMENDMENT TO MASTER DECOMMISSIONING TRUST AGREEMENT dated April 24,1996 by and between A the Company and Key Trust of Ohio National Association, a national banking association, as U successor to AmeriTrust Company National Association.

On June 18,1996, Key Trust of Ohio resigned as trustee and the Company appointed and designated NBD Bank as successor trustee under the terms of the Original Trust Agreement, as amended by the First Amendment to Master Decommissioning Trust Agreement.

On December 16,1996, NBD Bank resigned as trustee and the Company appointed and designated Mellon Bank, N.A. as success,or' trustee under the terms of the Original Trust Agreement, as amended by the First Amendment to Master Decommissioning Trust Agreement.

The Company and the Trustee desire to amend and restate the Original Trust Agreement, as amended, as hereinafter set forth, pursuant to Section 10.1 of the Original Trust Agreement.

NOW, THEREFORE, the Company and the Trustee hereby agree as follows:

ARTICLEI ESTABLISHMENT AND DECLARATION OF TRUST Section 1.1 Establishment of Trust.

The Company hereby establishes with the Trustee a master trust which shall (i) be known as the "The Cleveland Electric illuminating Master Nuclear Decommissioning Trust" (the 0 Trest > and cii> censist of a ouelitied Tres1 Feed and a Nee.o eitried Trus1 Fend for eech Nuclear Generating Unit, as more fully identified in Schedule I hereto (sometimes collectively 1

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]~ referred to as the ' Trust Funds" and each, individually, as a " Trust Fund"). The assets of the Trust shall consist of all money and other property received by the Trustee from the Predecessor Trustee, contributions to the Tmst by the Company, and the earnings and the increments thereon, less disbursements therefrom. The property initially transferred to the Trustee by the Predecessor Trustee under this Section 1.1 shall consist of cash in the amounts set fonh in Schedule II, which property shall initially be allocated to and held in the specific Trust Funds as indicated in Schedule II. The Company and the Trustee agree that Schedule II may be revised one ti,me no later than 30 days after the signing of this agreement, to reflect certain accrued interest transferred to the Trustee by the Predecessor Trustee after the date of this Agreement. The rights, powers, titles, duties, discretions and immunities of the Tmstee shall be governed solely by this Agreement.

Section 1.2 Declaration of Trust.

The Tmstee declares that it will hold all estate, right, title (except as otherwise provided in Article IX hereof) and interest in and to the assets of the Trust Funds upon the trusts, and exclusively for the purposes, set forth herein.

ARTICLE 11 PURPOSE OF TRUST; USE OF TRUST ASSETS g Section 2.1 Pumose of Trust.

U The Trust has been created and shall be maintained and operated for the exclusive purpose of providing funds for the satisfaction of the Company's Decommissioning obligations with respect to the Nuclear Generating Units and certain administrative costs and expenses incidental thereto, and except as expressly set forth in this Agreement, none of the assets of any Trust Fund shall be used for, or diverted to, any other purpose.

Section 2.2 Permitted Uses of Trust Funds.

2.2.1 The assets of each Trus'. Fund may be:

(a) used to fund, in whole or in part, the Decommissioning Costs of the Company with respect to the Decommissioning of the Nuclear Generating Unit to which such Trust Fund relates; (b) used to pay taxes, administrative costs and other incidental expenses of, or allocable to, such Trust Fund, in each case only in accordance with, and subject to the provisions of, Anicle VII of this Agreement; (c) invested and reinvested, as described and subject to O the !!=it tie =s set r the investmeet maeeser for sech accomet, end these essets erthe Trest reede being allocated to the account. The Company Directive must also include the name and f .

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specimen signature of each individual who is authorized to act for the investment manager in

]'- dealings with the Tmstee.

3.1.3 The Company may from time to time remove an investment manager, and ,

may, from time to time direct the Tmstee to transfer assets from one separate account to another, I or to transfer assets from to or from one or more of the Trust Funds or any Pooled Fund to a Separate Investment Account.

3.1.4 With respect to each Separate Investment Account, the Trustee may rely conclusively upon the Company Directive establishing such account, until such time as the Tmstee receives notice of the removal of the investment manager, or the change of the designated person or persons authorized to act with respect to the separate account.

3.1.5 Should an investment manager at any time elect to place security transactions directly with a broker or dealer, the Tmstee shall not recognize such transaction unless and until it has received instructions or confirmation of such fact from the investment manager. Should the investment manager direct the Tmstee to utilize the services of any person with regard to the assets under its management or control, such instmetions shall be in writing and shall specifically set forth the actions to be taken by the Trustee as to the utilization of such services.

3.1.6 In the event that an investment manager places security transactions directly or directs the Trustee to utilize the services of any person, the investment manager shall be solely (g responsible for the acts of such persons. The sole duty of the Trustee as to such transactions shall be incident to its duties as custodian. I 3.1.7 Notwithstanding any other provision of this Agreement, an investment manager shall not have the power to lend assets of the Trust Funds unless the exercise of such 1 power by the investment manager has been authorized in writing by the Company and the l Trustee shall not accept any direction by an investment manager to exercise such power unless it shall have received satisfactory evidence that the Company has granted such authority to the investment manager.

3.1.8 To the extent that the assets of the Trust Funds are not allocated to one or more any Separate Investment Accounts :stablished under this subsection 3.1 and the investment of such assets is not subject to the direction of the Company under Section 3.6, the Trustee shall hold, invest, and reinvest the funds delivered to it hereunder as it in its sole discretion deems advisable, in accordance with Section 2.4.

Section 3.2 Duties Relating to Secarate Investment Accounts.

If a Separate Investment Account is established, the Trustee shall act upon the written instructions of the duly appointed investment manager to complete receipt or delivery of assets purchased or sold with respect to such account. The investment manager shall have sole responsibility for determining how any corporate securitien held in such account are to be voted (g) and the Trustee shall not vote any such securities except in the manner directed by such investment manager. The Trustee shall have responsibility and authority for determination of the 8

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<.ct value assets held in a Separate Investment Account, but may rely conclusively upon fication of the investment manager as to the value of any such assets. The Trustee shall

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no obligation to make any investment review or to consider the propriety of holding or ny securities or property in a Separate Investment Account. Upon establishment of a

Investment Account, the Trustee shall be relieved and released of all investment duties, bilities and liabilities with respect to the assets of such Account and, as to such Account, , ,

tee shall, except as otherwise provided in Sections 3.4 and 3.5 hereof, act as cus,todian. RheM iection 3.3 Transk of Assets to Investment Manager.

f a Separate Investment Account is established, the Trustee may, upon direction of the ~-

y, permit the investment manager to hold such portion or all of the assets allocated to the y %,% 2

Investment Account for the purpose ofinvesting such assets as directed by the y, in tccordance with Section 3.6. The Trustee shall be under no obligation to make any my^ g3g

nt review or to consider the propriety of holding or selling any investment securities or fi*

held by an investment manager, nor shall the Trustee have any duty to account for or (,-

e assets held by an investment manager for purposes of rendering the accounts provided $4j$%%%

ticle VIII. The Trustee may rely conclusively upon the certification of the investment

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of the value of the assets held in the Separate Investment Account. ' -

t y lection 3.4 Investment of Cash. hy A" ixcept to the extent an investment manager does so, the Trustee shall invest the cash of a

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Investment Account, for short term purposes by purchasing, holding and selling United reasury Bills, commercial paper, banker's acceptances, certificates of deposit and similar _

m investments, including undivided interests or participations therein and participations (' , 03 i-ton or collective funds composed of temporary or short-term investments, including such ."', ,

aintained by the Trustee or its affiliates. Notwithstanding the above, the Trustee's 'N < ^ . N

nts under this Section 3.4 shall be limited to Permitted Assets under Section 2.4 of this ,

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• ? (Q~Jf U iection 3.5 Limitation of Liability of Trustee.

fhe Company intends by this Article III to allocate to investment managers all fiduciary bility with respect to investments in a Separate Investment Account under the direction l,4. M M investment manager, except to the extent the Trustee invests cash as provided in Section

Trustee shall not have any duty or obligation to review any investments to be acquired, .

.iisposed of pursuant to the directions of an investment manager, nor shall it have any l.

abligation to review, or make recommendations with respect to, the retention or ion of any such investment. Except as othenvise may be provided by applicable federal Trustee shall not incur any liaoility for any loss of any kind which may result from the s acting without question on the direction of, or failing to act in the absence of any ,

a from, an investment manager. Nevertheless, the Company shall indemnify the Trustee .u i it harmless from all damages, liabilities, claims costs and expenses, including g'N..M ble attorneys fees, incurred by or assessed against the Trustee by reason ofits acting upon etion of an investment manager appointed under Section 3.1 or by reason ofits failure to $

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- to invest cash balances in accordance with Section 3.4 hereof. Notwithstanding the preceding, the Trustee shall not be relieved ofliability or indemnified by the Company for acting on the direction of the investment manager in lending assets of the Trust Funds, unless the Trustee has received evidence that the Company has authorized such lending in accordance with subsection i 3.1.7.

The Trustee shall not be deemed to be n party to or to have any obligations under any agreement between the Company and any investment manager. On receipt of directions from an investment manager, the Trustee shall promptly make, execute, acknowledge and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out such directions. The Tmstee shall be fMly protected in relying upon any telegram, facsimile, telecopy, letter or other communication purporting to have been sent by the investment manager which the Trustee reasonably believes in good faith to be genuine.

4 Section 3.6 Comnany Direction.

Notwithstanding any provision of this Agreement, the Company shall have the authority to (a) direct the investment and reinvestment of all or any portion of the assets of any of the Trust Funds in any one or more investments as permitted by Section 2.4 hereof and (b) exercise the powers set forth in Section 6.2 hereof with respect to such assets. In the event that the Company J elects to exercise its authority under this Section 3.6, it shall deliver to the Trustee a Company Directive, directing the investment or reinvestment of all or any portion of the assets of any of the Trust Funds or designating the individuals who are authorized to exercise on behalf of the Company the authority set forth in this Secti.m 3.6. The Trustee shall be entitled to rely upon such Company Directive until a subsequent Company Directive is delivered to the Trustee. Any Company Directive delivered to the Trustee pursuant to this Section 3.6 shall be in writing and such written direction shall constitute the Company's certification that the direction given or confirmed thereby is a proper direction. It is understood that any investment direction provided by the Company under this Section 3.6 will be limited to matters of overall investment policy as pennitted by Applicable Law.

The Trustee shall follow the directions of the Company or its designee with respect to investment and reinvestment of the portion of the assets of any of the Trust Funds under the control of the Company or its designee and shall not have any duty to review any investment to be made pursuant te such directions or to make any recommendations with respect to the disposition or continued retention of any such investment. Nevertheless, the Company hereby agrees to indemnify the Trustee and hold it harmless from any claims, damages, losses, costs and expenses, including reasonable attomeys' fees, incurred by or asserted against the Trustee by reason ofits acting on any direction of the Company or its designee or by reason ofits failure to act in the absence of any such direction, including, without limitation, any chims which arise out of any allegation that, as a result of any. Company-directed investment, the Trustee has become

] liable for. or on account of, any breach by the Company, or any other person or entity, of any of their respective responsibilities, obligations or duties under Applicable Law.

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p j The Company shall have sole responsibility for determining how any corporate securities

}3- purchased by the Trustee pursuant to the direction of the Compaay are to be vote Tmstee may not vote any such securities except in the manner directed by the Company. The indemnification provisions set forth above shall be applicable to any claims, damages, losses, costs and expenses, including reasonable attomeys' fees, incurred by or asserted against the Trustee as a result of any voting of any securities by the Trustee in accordance with the direction of the Company or any failure by the Trustee to vote sectuities in the absence of such di,rection.

In the event that the Company desires to relinquish its authority to direct the investment of any ponion of the assets of any of the Trust Funds, it shall provide written notice thereof to the Trustee at least sixty (60) days in advance of the date upon which it will discontinue exercising such authority. Within thirty (30) days after its receipt of such notice, the Trustee, in its sole discretion, shall either (i) advise the Company in writing that it will rnanage such portion of the assets of the Trust Funds or (ii) advise the Company in writing that it will not manage such portion of the assets if the Trust Funds, in which event the Company shall continue to manage such portion of the assets of the Trust Funds until an investment manager is appointed to manage such portion of the assets of the Trust Funds in accordance with Section 3.1 hereof.

ARTICLE IV CONTRIBUTIONS BY TnE COMPANY Section 4.1 Nature of Contributions.

O Company contributions to each Trust Fund shall be made in cash, securities or other property, as the Company shall elect, provided that, in the case of each Qualified Trust Fund, Company contributions shall only be made in cash or other property, if any, which may be contributed to a Qualified Nuclear Decommissioning Trust Fund under Applicable Tax Law; and provided further, that non-cash Company contributions to any Trust Fund shall be made only in

.'suchsecur tiies or ot er h property as would in each case meet the requirements of Section 2.4 of this Agreement for Permitted Investments with respect to such Trust Fund.

Section 4.2 Contributions.

The Company may deposit with the Trustee contributions to the Trust Funds (or any Trust Fund) from time to time and at any time and in such amounts as the Company shall '

determine to be necessary or desirable for compliance with its Decommissioning obligation-under Applicable Law or othenvise. The Company shall, at the time of making any deposit pursuant to this Section 4.2, instruct the Trustee in writing as to the allocation of such deposit as among the Trust Funds and the Trustee shall not accept any such deposit in the absence of instructions with respect to the allocation thereof. The Tmstee shall be accountable for all contributions that it receives, but shall have no duty to collect any contributions or to determine that the amounts thereof comply with the requirements of Applicable Law. i ARTICLE V O inosuxiricariOx 08 Tae TaUsrne 1

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Section 5.1 Indemnification.

l The Tmstee shall have no liability hereunder to any Person, except for liabilities arising l out ofits own bad faith, negligence or willful miseenduct, and shall be responsible for the performance of only such duties as are specifically set forth in this Agreement. The Company hereby agrees to indemnify and hold harmless the Trustee from and against any and all costs, expenses or liabilities (including attomey's fees) which may be incurreo by, or asserted against, the Trustee by reason ofits acting as Trustee under this Agreement (whether or not inct1rred while acting as Trustee), except for such costs, expenses and liability arising from the Trustee's bad faith, negligence or willful misconduct.

ARTICLE VI OUALIFICATIONS. DUTIES AND POWERS OF THE TRUSTEE Section 6.1 Oualifications of the Trustee.

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The Trustee shal! (a) be a commercial bank or a trust company in the nature of a bank organized under the laws of the United States or any State thereof, (b) not be an Affiliate of the  ;

Company, and (c) have a combined capital and surplus of not less than $250,000,000. If at any time during the term hereof the Tmstee shall not meet the requirements for qualification as trustee as set forth in the preceding sentence, the Trustee shall promptly notify the Company of such fact and, at the request of the Company, shall resign as Trustee. i O 1 Section 6.2 Duties and Powers of the Trustee.

Except as otherwise limited by Article III of this Agreement, the Trustee shall (a) have exclusive authority and discretion to hold, manage, care for and protect the Trust Funds (for purposes of this Section 6.2, all references to the Trust Funds are deemed to include the Pooled Funds established under subsections 2.3.1 or 2.3.2 hereof, as well as any assets held separately for the Trust Funds), and (b) make payments and distributions from the Trust Funds only for the purposes described in Section 2.2 and in accordance with Company Distribution Orders. In  ;

i addition, the Tru:; tee shall have the following powers and ducretions M addition to those j conferred by law, but only insofar as such powers and discretions are consistent with each of the  ;

Qualified Trust Funds being treated as a Qualified Nuclear Decommissioning Trust Fund under l Applicable Tax Law and any Pooled Fund not being treated as an entity subject to Federal, state or localincome taxation:

i (i) To invest and reinvest from time to time the assets j 3

of the Qualified Trust Funds (or the Qualified Pooled Fund) in investments permitted for a Qualified Nuclear Decommissioning ,

Reserve Fund under Applicable Tax Law; (ii) To invest and reinvest from time to time the assets  !

I of the Non-Qualified Trust Funds (or the Non-Qualified Pooled j j

' [") Fund) in such assets as the I rustee may in its discretion deem advisable;  ;

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g (iii) To invest all or part of the assets of the Trust Funds in interest-bearing deposits with Mellon Bank, N.A. or its affiliates, in its capacity as a banking association, including but not limited to time deposits, savings deposits, certificates of deposit or time accounts which bear a reasonable interest rate; (iv) To sell, exchange, convey, transfer or dispose of, and also to contract or grant options with respect to, any property at any time held by it and any sale may be made by private contract or public auction, and for cash or upon credit, or partly for cash and partly upon credit, as the Trustee may deem best, and no person dealing with the Trustee shall be bound to see the application of the purchase money or to inquire into validity, expediency or propriety of any such sale or other dispotition; (v) To purchase, hold and sell foreign and domestic currencies; (vi) To compromise, compound and settle any debt or obligation due to or from it as Trustee and to reduce the rate of interest thereon, to extend or otherwise modify, or to foreclose upon default or otherwise enforce or act with respect to any such O ebiigetion; (vii) To vote, in person or by general or limited proxy, any stocks or other securities at any time held in the Trust Funds, at any meeting of stockholders or security holders, in respect to any business which may come before the meeting; to exercise any options appurtenant to any stocks, bonds or otlier securities for c'6nversion thereofinto other stocks, bonds or securities; to '

exercise or sell any conversion or subscription rights appurtenant to any stocks, bonds or other securities at any time held in the Trust Funds, and to make any and all necessary payments therefore; to join in, and to approve, or to dissent from and to oppose, any corporate act or liquidation, sale of assets or other action by or plan in respect of corporations or properties, the stocks or securities of which may at any time be held in the Trust Funds; to deposit with any cominittee or depository, pursuant to any plan or agreement of protection, reorganization, consolidation, sale, merger, or other readjustment, any property held in the Trust Funds; and to make payment from a Trust Funds of any charges or l assessments imposed by the terms of any such plan or agreement; l (3

(viii) To take all action necessary to settle authorized transactions, including exercising the power to borrow or raise g .

e money from any lender, which may be the Tmstee in its corporate

]~ capacity or any affiliate or agent of the Tmstee upon such terms and conditions as are necessary to settle security purchases and/or foreign exchange or contracts for foreign exchange and to secure the repayments thereof by pledging all or any part of the Trust Fund.

(ix) To enforce any right, obligation or claim and in general to protect in any way the interests of the Trust Funds, as directed in writing by the Company, or to abandon any property which at any time may be held by the Trustee under this

. Agreement, as directed in writing by the Company; (x) To make, execute, acknowledge and deliver any and all deeds, leases, assignments, transfers, conveyances and any and all other instruments necessary or appropriate to carr/ out any powers herein granted; (xi) To cause any investment, either in whole or in part, in the Fund to be registered in, or transferred into, the Trustee's name or the names of a nominee or nominees, including but not limited to that of the Trustee or its affiliate, a clearing

.O corForation or a degositorx, er in boek entrx form, er to retete aev such investment unregistered or in a form permitting transfer by delivery, provided that the books and records of the Tnetee shall at all times show that such investments are a part of the Fund; and to cause any such investment, or the evidence thereof, to be held by the Trustee, in a depository, in a clearing corporation, in book entry form, or by any other entity or in any other mander permitted by law;  !

(xii) To hold uninvested cash awaiting investment or distribution, and such additional cash balances as it shall deem reasonable and necessary, without incurring any liability for the payment ofinterest thereon, notwithstanding the Trustee's receipt of" float" from such uninvested cash, which receipt and retention of" float" by the Trustee has been agreed to by the Company as part of the overall negotiation and consummation of this Agreement; (xiii) To appoint and employ at the expense of the Trust Funds from time to time suitable agents, custodians, depositories or counsel, domestic or foreign, as to all or any part of the Trust Funds and the functions incident thereto, and to delegate l

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]" to them such ofits duties under this Agreement as the Trustee shall see fit; (xiv) To lend assets of the Trust Funds upon'such terms and conditions as are deemed appropriate by the Trustee and ,

specifically to loan any securities to brokers, dealers or banks upon such terms, and secured in such manner, as may be advisable, to permit the loaned securities to be transferred into the name of the borrower or others and to permit the borrower to exercise such rights of ownership over the loaned securities as may be required under the terms of any such loan, provided that any loans made from the Trust Funds shall be made in conformity with such laws or regulations goveming such lending activities which may have been promulgated by any appropriate regulatory body at the time of such loan; and provided fuither that the Trustee shall make a loan of assets of the Trust Funds only if the Company has provided the Trustee with written authorization to make such loan; ]

(xv) To purchase, enter, sell, hold and generally deal in any manner in and with contracts for immediate or future delivery of financial instruments of any issuer or of any other Q property, to grant, purchase, sell, exercise, permit to expire, permit D to be held in escrow, and otherwise to acquire, dispose of, hold and generally deal in any manner with and in all forms of options in

, any combination; _

(xvi) To participate in such dividend reinvestment plans of corporations whose shares are held in the Trust Funds as may be approved in writing by the Company; (xvii) To do all acts which the Trustee may deem necessary or proper and to exercise any and all of the powers of the Trustee under this Agreement upon such terms and conditions as l the Trustee may deem in the best interest of the Trust Funds; (xviii) To invest in any collective, common or pooled trust fund operated or maintained exclusively for the commingling and collective investment of monies or other assets including any such fund operated or maintained by the Trustee or an affiliate.

The Corporation expressly understands and agrees that any such collective fund may provide for the lending ofits securities by the collective fund trustee and that such collective fund's trustee will receive compensation for the lending of securities that is separate

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compensation of the collective fund trustee for the management of such collective fund, (xix) To invest in open-end and closed-end investment companies, including those for which the Trustee or an affiliate provides services for a fee, regardless of the purposes for which such fund or funds were created, and any partnership, limited or unlimited, joint venture and other forms ofjoint enterprise created for any lawful purpose.

Section 6.3 Overdraft Reimbursement.

To the extent the Trustee advances funds to the Fund for disbursements or to effect the i settlement of purchase transactions, the Trustee shall be entitled to collect from the Fund an {'

amount equal to what would have been camed on the sums advanced (an amount approximating the " federal funds" interest rate).

I Section 6.4 Authority with Resnect to Amounts and Sufficiency of Contributions. l J

The Trustee shall have no responsibility or authority in connection with the determination of the amounts to be deposited with it from time to time as contributions of the Company, nor shall it have any authority on behalf of any Person to bring any action or proceeding to enforce the collection of any such amount.

Section 6.5 Duties Not Excressiv Undertaken.

l No duties or obligations shall be imposed upon the Trustee with respect to the Trust l

Funds unless they shall have been specifically undertaken by the Trustee by the express terms of i this Agreement or other written agreement to which the Tmstee is a party, or are otherwise i i

imposed upon the Tmstee by Applicable Law. i Q

ARTICLE VII l IAXES AND EXPENSES Section 7.1 Taxes l 7.1.1 All taxes of any kind that may be assessed or levied against or in respect of the income or assets of any Non-Qualified Trust Fund, including income taxes, if any, shall be paid from the assets of such Non-Qualified Trust Fund whether or not such Trust Fund is, for such purposes, deemed to be a taxpayer under Applicable Law. To the extent any such tax (3 obligation is a tax obligation of the Company under Applicable Law, the Company shall have the b rignt to be reimbursed therefore from the assets of such Non-Qualified Trust Fund and each such L

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l m reimbursement shall be deemed to be a distribution of assets of such Trust Fund authorized I pursuant to Section 2.2.l(b).

I 7.1.2 Ali taxes imposed under Section 468A(e)(2) of the Code and the regulations {

thereunder and all State and local taxes imposed on the income or assets of any Qualified Trust Fund shall be paid from such Qualified Trust Fund.

7.1.3 The Company shall cooperate with the Trustee in order to allow the Trustee to prepare and timely file all Federal, state, and local tax retums required to be filed by such Tmst Funds under Applicable Tay. Law and the Trustee hereby agrees to prepare and timely file I all such returns.

7.2 Brokepge Commissions and Other Exnenses.

7.2.1 All brokerage commissions incurred by any Trust Fund and all other ordinary and necessary administrative costs and incidental expenses incurred by the Tmstee in connection with the administration and operation of each Trust Fund, including, without limitation, legal expenses of agents or attomeys (whether or not arising out of ajudicial or administrative proceeding ), accounting expenses, actuarial expenses, such compensation to the Trustee as may l be agreed upon from time to time between the Trustee and the Company on a basis no less j favorable to the Company than that which the Trustee generally affords to like customers for like  !

services, and all other administrative costs and incidental expenses which are allocable to each l h Tmst Fund shall be paid from such Trust Fund.

7.2.2 Brokerage commissions and other administrative costs and incidental expenses of any Qualified Trust Fund may be paid from such Trust Fund pursuant to subsbetion 7.2.1 only to the extent such expenses are permitted to be paid from a Qualified Nuclear Decommissioning Trust Fund under Applicable Tax Law.

Section 7.3 Trustee's C_omnensation and Exnenses.

If, and to the extent that, the assets of any Trust Fund are insufficient to pay the compensation to and/or the expenses of the Trustee allocated thereto, as set forth in Section 7.2, then such compensation to and/or expenses of the Tmstee shall be paid by the Company. The Company acknowledges that, as part of the Trustee's compensation, the Trustee will earn interest on balances, including disbursement balances and balances arising from purchase and sale transactions.

ARTICLE Vill ACCOUNTINGS BY THE TRUSTEE Section 8.1 Insnection of Books and Records.

The Trustee shall, with respect to each Trust Fund, keep separate, accurate and detailed (d accounts of all investments, receipts, disbursements and other transactions hereunder, and all

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accounts, books and records relating thereto shall, at all reasonable times, be open to inspection m] and audit by the Company and its agents.

Section 8.2 Statements of Account.

Within 60 days following each March 31, June 30, September 30 and December 31 of each year, commencing 60 days following September 30,1996, the Trustee shall provide to the Company a written statement of account with respect to each Trust Fund setting forth all investments, receipts, disbursements and other transactions effected by it during the three calendar month period ending on such March 31, June 30, September 30 or December 31 (as the case may be). Within 60 days follow'mg the resignation or removal of the Trustee, the Trustee shall provide (a) to the Company a written statement of account with respect to each Trust Fund setting forth all investments, receipts, disbursements and other transactions effected by it during

- the period commencing on the day next following the last day of the period covered by the last statement of account provided by the Trustee pursuant to the preceding sentence, through and including the date of such resignation, and (b) to the Company and the successor trustee a statement of all ofits fees and expenses remaining unpaid as of the time it delivers the statement of account required pursuant to clause (a) above, which fees and expenses shall be paid by the successor trustee upon approval by and receipt of written instruction from the Company.

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, c Section 8.3 Persons Entitled to Accounting. '

No Person, other than the Company, may demand an accounting by the Trustee hereunder p institute any action or proceeding against the Trustee or the Trust. k " '!

ARTICLE IX  ;.

REMOVAL OR RESIGNATION OF THE TRUSTEE ,

% R,N N:4 Section 9.1 Resignation or Removal. (-

m The Tmstee may be removed by the Company for any reason at any time upon 60 days' --

n writing to the Trustee and the Trustee may resign at any time upon 60 days' notice in [, - WR to the Company. Upon such removal or resignation, the Company shall appoint and ite a successor tmstee meeting the requirements of Section 6.1 of this Agrecruent. Any

.or Trustee appointed hereunder shall execute, acknowledge and deliver to the Company .M /). H opriate written instrument accepting such appointment hereunder, subject to all of the e.f cf N nd conditions hereof, and thereupon such successor Trustee shati become fully vested

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l rights, powers, trusts, duties and obligations ofits predecessor in trust hereunder, with ., ; . a:

'ect as if originally named Trustee hereunder. the predecessor Trustee shall upon written ^~e' -

of the Company, and payment of all fees and expenses, deliver to the successor Trustee .'

.l 1e funds and properties then constituting the corpus of each of the Trust Funds and N<@: 1 a such other acts as may be required or desirable to vest and confirm in said successor

all right, title and interest in the corpus of the Trust Funds to which it succeeds.

Section 9.2 Failure to Annoint Successor Trustee.

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If for any reason a successor trustee shall not have been appointed within sixty (60) days hy.. " 9 L, e giving of written notice of resignation or removal provided for in Section 9.1, the  ;[d. ' "t:

or the Company may apply to a court of competentjurisdiction for the appointment of a ior trustee. ,

I . .-@M y, ,k, Section 9.3 Merger of Trustee.

Any corporation into which the Trustee may be merged or with which it may be ,

idated, or any corporation resulting from any merger or consolidation to which the Trustee ENi@@%M e a party, or any corporation to which the corporate trust functions of the Trustee may be rred, shall be the Successor Trustee under this Agreement without the necessity of ing or filing any additional acceptance of this Agreement or the performance of any further lpt, g.3 .

the part of any other parties hereto, if such corporation meets the requirements of Section this Agreement after the merger. .

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( c ARTICLE X ACTION BY THE CCLMPANY Section 10.1 Authority to Act.

Any action of the Company required or permitted under this Agreement may be taken by the Board of Directors of the Company, or any committee thereof having authority to aqt upon matters relating hereto, or by any officer, employee or agent of the Company duly authorized by its Board of Directors to act on its behalfin such respect Any such action of the Company or authorization to act on behalf of the Company shall be evidenced by a resolution ofits Board of Directors certified to the Trustee over the signature of the Secretary or of any Assistant Secretary of the Company, and the Tmstee shall be fully protected in acting in accordance with such resolution so certified to it. The Compan, shall furnish the Trustee from time to time with certified copies of resolutions ofits Board of Directors evidencing the appointment and authorization of any committee, officers, employees or agents of the Company or of any other j person authorized by the Board of Directors to act under this Agreement, and the appointment and authorization of any successors thereof.

Section 10.2 Reliance of Trustee on Written Certifications. Etc.

All certifications, Company Distribution Orders, Company Directives, requests, Q

v instructions and objections of the Company to the Trustee shall be in writing and the Trustee shall act and shall be fully protected in acting in accordance with such certifications, Company Distribution Orders, Company Directives, requests, and instructions and shall have no duty to question or verify the same.

Section 10.3 Certain Information. l The Company shall provide to the Trustee (a) as promptly as practicable after the l issuance thereof, a copy of each order, license, revenue ruling or similar action by which the Company is bound by any Governmental Authority which arises out of any proceeding to which the Trustee was not a party, and which imposes any obligation, limitation or restriction upon the management and operation of the Trust or any obligation oflimitation upon the Trustee with respect to its performance hereunder and (b) from time to time reasonably request to enable it to perform its obligations hereunder.

ARTICLE XI AMENDMENT OF AGREEMENT Section 11.1 Amendments.

Except as otherwise provided in this Agreement, the Company may, at any time and from time to time, amend,in whole or in part, any or all of the provisions of this Agreement upon written notice thereof to the Trustee, provided such amendment does not cause a Qualified Trust

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v Fund to fail to be a Qualified Nuclear Decommissioning Reserve Fund. No amendment which affects the rights, duties or responsibilities of the Trustee may be made without its consent, and l

l l g no amendment shall authorize or permit any part of the corpus or income of the Trust Funds to be used for or diverted to purposes other than those described in Section 2.2 or cause a qualified fund to fail to qualify as a Nuclear Decommissioning Reserve Fund under Section 468A of the Code or the regulations thereunder.

ARTICLE XII TERM OF THE TRUST l

Section 12.I Termination at the Ootion of the Comnanv.

! Subject to the requirements of Applicable Law, the Company may terminate the Trust at l any time prior to expiration of the Trust term (as set forth in Section 12.2) upon written notice to the Trustee.

1 Section 12.2 Trust Term.

In no event shall the Trust extend for a term longer than the earlier of(a) the date which shall be the 21st anniversary of the death of the last survivor of all of the now living lineal l descendants of Joseph P. Kennedy, father of President John F. Kennedy and (b) the date of final payment of all the costs of Decommissioning the Nuclear Generating Units. l Section 12.3 Final Distribution of Trust Fund Assets.

Upon termination of the Trust the Trustee shall distribute the remaining assets of the Trust Funds pursuant to a Company Distribution order in accordance with Section 2.2.

ARTICLE XIII DEFINITIONS Section 13.1 Definitions.

For purposes of this Agreement, the following capitalized terms shall have the following meanings:

" Applicable Law" shall mean all applicable laws, statutes, treaties, rules, codes, ordinances, regulations, certificates, orders, interpretations, licenses and permits of any Governmental Authority andjudgments, decrees, injunctions, writs, orders or like action of any court, arbitrator or otherjudicial or quasi-judicial tribunal of competent jurisdiction (including those pertaining to health, safety, the environment or otherwise).

" Applicable Tax Law" shall mean Section 468A of the Code (or any comparable subsequent provision of the Code) and any other provision of the Code relating to the Federal taxation of the Trust Funds or any Pooled Fund established in accordance with subsection 2.3.1 or 2.3.2 of this Agreement. Applicable Tax Law shall also include any regulations and judicial or administrative interpretations of the above.

" Bank" shall have the meaning set forth in Section 581 of the Code.

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" Business Day" shall mean any day other than a Saturday or Sunday or other day on

] hich w national banks are authorized or obligated to be closed.

" Code" shall mean the Intemal Revenue Code of 1986, as amended, or any comparable subsequentlaw.

" Company" shall mean 'Ihe Cleveland Electric illuminating Company, an Ohio corporation,or its successors or assigns hereunder. l

" Company Directive" shall mean any written directions of the Company to the Trustee, as described in Article III, as to the establislunent of a Separate Investment Account or the J investment of all or part of the assets of the Trust Funds.

" Company Distribution Order" shall mean any written instructions of the Company to the Trustee, pursuant to which the Company directs the Trustee to distribute or transfer all or part of j the assets of the Trust Funds, which instructions shall include a certification by an officer of the Company that the distribution or transfer requested is permitted by and in accordance with the provisions of Section 2.2.

" Cost of Service Amount" shall mean, with respect to each Nuclear Generating Unit during any taxable year, the amount of the costs of Decommissioning to the Company for such  !'

Nuclear Genemting Unit included in the Company's cost of service for ratemaking purposes for

( ) such taxable year, but only to the extent such costs are directly or indirectly charged to customers of the Company by reason of electric energy consumed during such taxable year or are otherwise required to be included in the Company's income under Section 88 of the Code and the regulations thereunder.

I

" Credit Union" shall mean any insured credit union within the meaning of Section 101(6) of the Federal Credit Union Act of 1982.

" Decommissioning" shall mean, with respect to any Nuclear Generating Unit, the pennanent removal from service of such Nuclear Generating Unit, in accordance with Applicable Laws, including any entombment, storage, decontamination, dismantlement, removal and disposal of the structures, systems and components of the such Nuclear Generating Unit.

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" Decommissioning Costs" shall mean, with respect to any Nuclear Generating Unit, any expenses orliabilities incurred by or on behalf of the Company with respect to the Decommissioning of such Nuclear Generating Unit, including any expenses incurred in connection with the preparation for Decommissioning, such as engineering or other planning expenses, and all expenses incurred after the actual Decommissioning occurs, such as physical security and radiation monitoring expenses.

" Excess Contribution" shall mean the amount by which contributions to any Qualified Trust Fund during any taxable year exceed the Maximum Qualified Contributions for such ig Qualified Trust Fund during such taxable year

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" Fund Account" shall mean any separate account maintained pursuant to subsection 2.3.3,

) reflecting the interest of a Panicipating Fund in the Pooled Fund in which its assets are held.

" Governmental Authority" shall mean any Federal, state, county, municipal, foreign, international, regional or other governmental authority, agency, board, body, instrumentality or court including, without limitation, the United States Nuclear Regulatory Commission and the Public Utilities Commission of Ohio.

" Identified Assets" shall mean any assets in existence as of the date of this Agreement that are included in a Pooled Fund, but are identified as being assets of a particular Participating Fund under subsection 2.3.3.

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" Maximum Qualified Contributions" shall mean, with respect to each Qualified Trust i Fund during any taxable year, an amount equal (a) to the lesser of(i) the Ruling Amount for such taxable year or (ii) Cost of Service Amount for such Qualified Trust Fund during such taxable year, or (b) such greater amount as may be contributed to such Qualified Trust Fund during any taxable year under Applicable Tax Law.

"Non-Qualified Pooled Fund" shall mean the single commingled fund held by the Trustee that is established in accordance with subsection 2.3.2 of this Agreement.

"Non-Qualified Trust Fund" shall mean any Trust Fund established under this Agreement

{ which is not a Qualified Nuclear Decommissioning Reserve Fund.

" Nuclear Generating Units" shall mean those nuclear units identified as such on Schedule I hereto.

" Original Trust Agreement" shall mean that certain DECOMMISSIONING TRUST AGREEMENT dated July 1,1988 by and between the Company and AmeriTrust Company National Association as trustee.

" Participating Fund" shall mean with respect to either the Qualified Pooled Fund or the Non-Qualified Pooled fund, any trust fund participating in such Pooled Fund.

" Person" shall mean any individual, partnership, corporation, trust, unincorporated association orjoint venture, a government or any depanment or agency thereof, or any other  ;

entity.

" Pooled Fund (s)" shall mean either the Qualified Pooled Fund or the Non-Qualified Pooled Fund, or both.

" Predecessor Trustee" shall mean Key Trust of Ohio National Association, successor to AmeriTrust Company National Association,in its role as trustee under the Original Trust Agreement, as amended from time to time.

O Predent invester sheii meee e gredeni invesier as described in the nesta,ement erise Law (Third), Trusts G 227, including general comments and reporter's notes.

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q "Public Debt Securities" shall mean any of Treasury bills, Treasury notes, Treasury bonds W and savings bonds issued by the Federal government of the United States of America.

" Qualified Nuclear Decommissioning Reserve Fund" shall mean a " Nuclear Decommissioning Reserve Fund" within the meaning of Section 468A of the Code,

" Qualified Pooled Fund" shall mean the single cormningled fund held by the Trustee that is established in accordance with subsection 2.3.1 of this Agreement. -

" Qualified Trust Fund" shall mean any Trust Fund established under this Agreement which meets the requirements for a Qualified Nuclear Decommissioning Reserve Fund.

"Related" shall mean, with respect to each Qualified Trust Fund established for the Decommissioning of a particular Nuclear Generating Unit, the Non-Qualified Trust Fund which has been established for the Decommissioning of the same Nuclear Generating Unit and, with respect to each Non-Qualified Trust Fund established for the Decommissioning of a panicular Nuclear Generating Unit, the Qualified Tmst Fund which has been established for the Decommissioning of the same Nuclear Generating Unit.

" Ruling Amount" shall mean, with respect to any taxable year, an amount determined in accordance with Section 1.468A-3 of the regulations of the Intemal Revenue Service, as in effect and as may be amended from time to time.

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" Separate Investment Account" shall mean any separate account established pursuant to a Company Directive under the terms of Section 3.1 of this Agreement.

" Trust" shall have the meaning set forth in Section 1.1 of this Agreement.

" Trust Funds" and " Trust Fund" shall have the respective meanings set forth in Section 1.1 of this Agreement. As provided in Sections 2.4.3,3.1 and 6.2 of this Agreement,in certain contexts, the term " Trust runds" shall also be deemed to include any Pooled Fund established under subsections 2.3.1 or 2.3.2 of this Agreement. '

l ARTICLE XIV 1 MISCELLANEOUS PROVISIONS AND EFFECTIVE DATE

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Section 14.1 Notices.

All notices, reports and other information required or permitted to be given or delivered hereunder shall be in writing and shall be deemed given when delivered in person, or on the fourth day after being deposited in the United States mail, postage prepaid, registered or certified mail, addressed as follows:

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.Q If to the Company: i The Cleveland Electric Illuminating Company c/o Centerior Energy Corporation ,

6200 Oak Tree Boulevard )

Independence, Ohio 44131 Attention: Investment Manager ,

If to the Trustee:

Mellon Bank, N.A.

One Mellon Center Pittsburgh, Pennsylvania 15258-0001

' Attention: Denise A. Fuhrer, Client Service Officer and/or to such other respective addresses and/or addressees as may be designated by notice given  ;

by either party in accordance with the provisions of this Section 14.1. ]

l Section 14.2 Severability. l Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability O without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in anyjurisdiction shall not invalidate or render unenforceable such provision in any otherjurisdiction. ,,

Section 14.3 Seoarate Counteroarts.  ;

l This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

Section 14.4 Successors and Assigns.  !

All covenants and agreements contained herein shall be binding upon, and inure to the benefit of, the Trustee and its successors and assigns and the Company and its successors and assigns, all as herein provided. Any request, notice, direction, consent, waiver or other instrument or action by the Company shall bind the successors and assigns of the Company.

Section 14.5 Headings.

The headings of the various Articles and Sections herein are for convenience of reference  ;

only and shall not define or limit any of the terms or provisions hereof.

r l .; ' , . p g Section 14.6 Governing Law.

This Agreement shall in all respects be governed by, and construed in accordance with the laws of the State of Ohio, including all matters of construction, validity and performance.

Section 14,7 Administration ofTrust.

The principal place of administration of the Trust shall be the principal office of the i - Trustee.

Section 14.8 Performance by the Comnany.

Any obligation of the Company with respect to Decommissioning hereunder or pursuant

- to Applicable Law may be performed by the Company and any such performance shall not be construed as a revocation of the trusts created hereby.

Section 14.9 Oualification of Oualified Trust Funds under Section 468A of the Code.

I The Qualified Trust Funds are established and maintained for the sole purpose of qualifying as " Nuclear Decommissioning Reserve Funds" within the meaning of, and the assets shall be used as authorized by, Section 468A of the Code and the regulations thereunder. If a Qualified Trust Fund would fail to so qualify because of any provision contained in this .

f- Agreement, this Agreement shall be deemed to be amended as necessary to conform with the i . requirements of section 468A of the Code and the regulations thereunder.

4 Section 14.10 Force Maieure. 4 I

The Trustee shall not be responsible or liable for any losses to the Trust Fund resulting i from nationalization, expropriation, devaluation, seizure or similar action by any govemmental authority, de facto or dejure; or enactment, promulgation, imposition or enforcement by any .

3 such governmental authority of currency restrictions, exchange controls, levies or other charges '

affecting the property; or acts of war, terrorism, insurrection or revolution; or acts of God; or any other similar event beyond the control of the Trustee or its agents. This Section shall survive the termination of this Trust Agreement.

Section 14.11 Power of Attorney.

, The Company appoints the Trustee as the Trust's true and lawful attorucy-in-fact and authorizes the Trustee to delegate the power of attoruey with full powers of substitution in any and all capacities to:

(a) sign all applications, requests or claims for refund, reduction, repayment or credit of, or exemption or relief from, any withholding or similar taxes in anyjurisdiction (including outside of the U.S.); and collect the refund of the tax, transfer the amounts collected to those parties designated and perform all u

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C D acts which are necessary to secure the rights attached to such recla prevent the loss ofsuch rights; (b) represent the Trust at shareholder meetings and vote or appoin any person to represent and vote as the Trust's proxy which relate to securitie held on behalf of the Fund for which the Trust is eligible to attend an  ;

security holder; and take on the Trust's behalf any and all funher to exercise said voting rights; and represent the Trust in any situa occur as a result of any corporate actions; (c) for global custody purposes, receive, maintain and safeke securities in the name of the Trust; receive, arrange for the transfer of d interest and other payments (if any) and the sale of proceeds on behl Trust; fill in or sign on behalf of the Trust any and all forms of agent or{

(purchase or sale forms) pertaining to instructions for sale or purchase o) securities; and give specific instructions regarding securities, cash and re!

transactions that are registered in the name of the Trust; and (

(d) sign, seal, execute, and ' deliver such deeds, transfers, \

i j agreements, and releases, and do such acts and things as may be necessa concur with authorized. any other person or persons in the doing of any act or thi The Company undertakes for itself and its successors in title to ratif Trust by virtue of these presents including any ac _

of these presents and before the revocations shall be known to the Trustee. q E

All costs, charges and expenses incurred by the Trust as a consequence f and paid by the Trust. matter or thing done in pursuance of the powers of any ofg 6

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) IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the day and year first above written.

THE CLEVELAND ELECTRIC ILLUMINATING COMPANY .

By: /h

Title:

Trea' surer Date:

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ATTEST: j l

Title:

MELLON BANK, N.A., not in its individual capacity, but solely as Tmstee By:

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>te: 'do ca a4.199~7 O l ATTEST:

Title:

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SCHEDULEI

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NUCLEAR GENERATING UNIT RELATED TRUST FUNDS

1. Davis-Besse Power Station Unit No.1 a. Davis-Besse Qualified Trust Fund

b. Davis-Besse Non-Qualified Trust Fund

2. Perry Power Station Unit No.1 a. Perry Qualified Trust Fund

b. Perry Non-Qualitied Trust Fund

3. Beaver Valley Power Station Unit No. 2 a. Beaver Valley Qualified Trust Fund

b. Beaver Valley Non-Qualified Trust Fund O

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.- SCHEDULEII Allocation ofInitial Contributions Davis-Besse Non-Qualified Trust Fund S 870,734.76 Davis-Besse Qualified Trust Fund $33,828,879.55

. Perry Non-Qualified Trust Fund S 866,760.21

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Perry Qualified Trust Fund $19,008,723.81 4

Beaver Valley Qualified Trust Fund S 9,661,490.48 Beaver Valley Non-Qualified Trust Fund 5 1.260.219.48 Aggregate Initial Contributions $65.496.808.29 0

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