ML20210N296
| ML20210N296 | |
| Person / Time | |
|---|---|
| Site: | Clinton  |
| Issue date: | 08/09/1999 |
| From: | Matthews J AFFILIATION NOT ASSIGNED |
| To: | NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM) |
| References | |
| NUDOCS 9908110066 | |
| Download: ML20210N296 (24) | |
Text
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!!OO M Street. N.W.
f WasNngton, D.C. 20036-5869 8 202-467-70W u .
sBockiusur Fax: 202 467-7176 COUN5ELORS AT LAW John E. Matthews 202-467-7524 Docket No. 50-461 10 CFR 50.80 10 CFR 50.92 August 9,1999 BY OVERNIGHT DELIVERY .
I U.S. Nuclear Regulatory Commission ATTN: Document Control Desk Mail Stop O-PI-17 One White Flint North 11555 Rockville Pike Rockville, MD 20852-2738 Re: Clinton Power Station (CPS)
Facility Operating License No. NPF-62 (LA-99-007)
Application for License Transfer and Conforming Administrative License Amendment'
Dear Sir or Madame:
On behalf of AmerGen Energy Company, LLC ("AmerGen"), the enclosed Form of Nuclear Decommissioning Master Trust Agreement is being submitted for your information in connection with the above-referenced application.
If you have any questions, please do not hesitate to call me at 202-467-7524.
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/ John E. Matthews Enclosures (as stated) cc (w/ encls.): Robert S. Wood (Mail Stop 11 F1)
! {Q Susan L. Uttal(Mail Stop 15 B18)
Jon B. Hopkins (Mail Stop 13 E21) 9900110066 990009 PDR ADOCK 05000461
- P pg PNiedelpNa WasNngton New York Los Angeles Mami Hamsburg Plttsburgh Princeton London Brussels Frankfurt Tokyo Sinippare Jakarta L j
NUCLEAR DECOMMISSIONING MASTER TRUST AGREEMENT THIS NUCLEAR DECOMMISSIONING MASTER TRUST AGREEMENT, dated as of between AmerGen Energy Company, LLC, a corporation duly organized and existing under the laws of the State of Delaware.
having its principal office at (the " Company"), and MELLON BANK, N.A., as Trustee, having its principal office at One Mellon Bank Center, Pittsburgh, Pennsylvania 15258 (the " Trustee");
WITNESSETII:
WIIEREAS, the Company owns one hundred percent of the Clinton Nuclear Power Plant (the " Unit"); and WIIEREAS, the Company desires to appoint Mellon Bank, N.A. as successor Trustee and to continue to maintain pursuant to this Agreement its fund which qualifies as a Nuclear Decommissioning Reserve Fund under section 468A of the Internal Revenue Code of 1986, as amended, or any corresponding section or sections of any future United States intemal revenue statute (the " Code") and the regulations thereunder (the " Qualified Fund"), and its fund of which does not so qualify (the "Nonqualified Fund"; collectively, the " Funds"), under the laws of the [ State of Delaware / Commonwealth of Pennsylvania].
WIIEREAS, the execution and delivery of this Agreement have oeen duly authorized by th: Company and the Trustee and all things necessary to make this Agreement a vdd and binding agreement by the Company and the Trustee have been done.
NOW, TIIEREFORE, TIIIS AGREEMENT WITNESSETII, that to provide for the maintenance of the Funds and the making of payments therefrom and the performance of the covenants of the Company and the Trustee set forth herein, the Company does hereby sell, assign, transfer, set over and pledge unto the Trustee, and to its successors in the trust and its assigns, all of the Company's right, title and interest in and to any and all cash and property herewith and hereafter contributed to the Funds, subject to the provisions of Article V hereof and Section 4 of the Special Terms of the Qualified Nuclear Decommissioning Reserve Fund, attached hereto as Exhibit A (the "Special Terms").
TO IIAVE AND TO HOLD Tile SAME IN TRUST for the exclusive purpose of providing funds for the decommissioning of the Unit in order to satisfy the liability in connection therewith, to pay the administrative costs and other incidental expenses of the Funds, and to make certain investments, all as hereinafter provided.
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ARTICLE I Eurposes of the Funds: Contributions Section 1.01. Establishment of the Funds. The Master Trust shall be divided by the Trustee into Funds to be identified as follows:
(a) Clinton Qualified Fund; and (b) Clinton Nonqualified Fund.
The Funds shall be maintained separately at all times in the United States as the Nonqualified Fund and the Qualified Fund pursuant to this Agreement and in accordance with the laws of the [ State of Delaware / Commonwealth of Pennsylvania]. The I Company intends that the Qualified Fund shall qualify as a Nuclear Decommissioning Reserve Fund under section 468A of the Code. The assets of the Qualified Fund may be used only in a manner authorized by section 468A of the Code and the regulations thereunder and this Agreement cannot be amended to violate section 468A of the Code or the regulations thereunder. The Trustee shall maintain such records as are necessary to reflect each Fund separately on its books from each other Fund and shall create and maintain such subaccounts within each Fund as the Company shall direct.
Section 1.02. Eurposes of the Funds. The Funds are established for the exclusive purpose of providing funds for the decommissioning of the Unit identified in their respective titles. The Nonqualified Fund shall accumulate all contributions (whether from the Company or others) which do not satisfy the requirements for contributions to the Qualified Fund pursuant to Section 2 of the Special Terms. The Qualified Fund shall accumulate all contributions (whether from the Company or others) which satisfy the requirements of Section 2 of the Special Terms. The Qualified Fund shall also be governed by the provisions of the Special Terms, which provisions shall take precedence over any provisions of this Agreement construed to be in conflict therewith. None of the assets of the Funds shall be subject to attachment, gamishment, execution or levy in any manner for the benefit of creditors of the Company or any other party.
Section 1.03. Contributions _to the Funds. The assets of the Funds shall be transferred or contributed by the Company (or by others approved in writing by the Company) from time to time. Cash contributions for a Unit shall be allocated to its Qualified Fund unless the Company designates in writing at the time of payment to which of the Unit's two Funds the payment is allocated. The Company shall have sole discretion as to whether cash payments are allocated to a Qualified Fund or a Nonqualified Fund.
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ARTICLE II Eayments by the Trustee Section 2.01. Use of Assets. The assets of the Funds shall be used exclusively (a) to satisfy, in whole or in part, any expenses or liabilities incurred with respect to the decommissioning of the Unit, including expenses incurred in connection with the preparation for decommissioning, such as engineering and other planning expenses, and all expenses incurred after the actual decommissioning occurs, such as physical security and radiation monitoring expenses (the " Decommissioning Costs"), (b) to pay the administrative costs and other incidental expenses of each Fund, and (c) to invest in securities and investments as directed by the investment manager (s) pursuant to Section 3.02(a) or the Trustee pursuant to Section 3.02(b), except that all assets of a Qualified Fund must be invested in Permissible Assets as defined in the Special Terms. The assets of the Funds shall not be invested in the securities or other obligations of GPU Nuclear, l
Inc., Peco Energy, British Energy, plc, or affiliates thereof, or their successors or assigns. 1 Except for investments tied to market indexes or other non-nuclear sector mutual funds, investments in any entity owning one or more nuclear power plants is prohibited. Use of the assets of a Qualified Fund shall be further limited by the provisions of the Special Terms.
Section 2.02. Certification for Decommissioning Costs.
(a) If assets of the Funds are required to satisfy Decommissioning Costs, the Company shall present a certificate substantially in the form attached hereto as Exhibit B to the Trustee signed by its Chairman of the Board, its President or one ofits Vice Presidents and its Treasurer or an Assistant Treasurer, requesting payment from the Fund.
Any certificate requesting payment by the Trustee to a third party or to the Company from the Fund for Decommissioning Costs shall include the following:
(1) a statement of the amount of the payment to be made from the Fund and whether the payment is to be made from the Nonqualified Fund, the Qualified Fund or in part from both Funds; (2) a statement that the payment is requested to pay Decommissioning Costs which have been incurred, and if payment is to be made from the Qualified Fund, a statement that the Decommissioning Costs to be paid constitute Qualified Decommissioning Costs, as defined in the Special Terms; !
(3) the nature of the Decommissioning Costs to be paid-I (4) the payee, which may be the Company in the case of reimbursement for payments previously made or expenses previously incurred by the Company for Decommissioning Costs; l 1-WA:1272199.1 3 1
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j (5) a statement that the Decommissioning Costs for which payment is requested have not theretofore been paid out of the Funds; and (6) a statement that any necessary authorizations of the U.S. Nuclear Regulatory Commission ("NRC") and/or any other governmental agencies having jurisdiction with respect to the decommissioning have been obtained.
(b) The Trustee shall retain at least one countemart of all copies of such certificates (including attachments) and related documents received by it pursuant to this Article II.
(c) The Company shall have the right to enforce payments from the Funds upon compliance with the procedures set forth in this Section 2.02.
Section 2.03. Administrative Costs. The Trustee shall pay, as directed by the Company, the administrative costs and other incidental expenses of the Nonqualified Fund, including all federal, state, and local taxes, if any, imposed directly on the Nonqualified Fund, legal expenses, accounting expenses, actuarial expenses and trustee expenses, from the assets of the Nonqualified Fund and shall pay, as directed by the Company, the administrative costs and other incidental expenses of the Qualified Fund, as defined in the Special Terms, from the assets of the Qualified Fund.
Section 2.04. Payments between the Funds. The Trustee shall make payments (i) from the Qualified Fund to the Nonqualified Fund provided such payments are in cash and are in accordance with Section 4 of the Special Terms or (ii) from the Nonqualified Fund to the Qualified Fund provided such payments are in cash and are in accordance with the contribution limitations set forth in Section 2 of the Special Temis, as the case may be, upon presentation by the Company of a certificate substantially in the form of Exhibit C hereto executed by the Company instructing the Trustee to make any such payments. The Trustee shall be fully protected in relying upon such certificate.
ARTICLE - III Concerning the Trustee Section 3.01. Authority of Trustec. The Trustee hereby accepts the trust created under this Agreement. The Trustee shall have the authority and discretion to manage and control the Funds to the extent provided in this Agreement but does not guarantee the Funds in any manner against investment loss or depreciation in asset value or guarantee the adequacy of the Funds to satisfy the Decommissioning Costs. The Trustee shall not be liable for the making, retention or sale of any asset of a Qualified Fund which qualifies as a Permissible Asset, as defined in the Special Terms, nor shall the Trustee be responsible for any other loss to or diminution of the Funds, or for any other loss or 1-WA:1272199.1 4
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A damage which may result from the discharge ofits duties hereunder except for any action not-taken rn good faith.
Section 3.02. Investment of Funds. (a) The Company shall have the authority to appoint one or more investment managers who shall have the power to direct the Trustee in investing the assets of the Funds; provided, however, that the Trustee shall not follow any direction which would result in assets of a Qualified Fund being invested in assets other than Pennissible Assets as defined in the Special Terms. To the extent that the Co'mpany chooses to exercise this authority, it shall so notify the Trustee and instruct the Trustee in writing to separate into a separate account those assets the investment of which will be directed by each investment manager. The Company shall designate in writing the person or persons who are to represent any such investment manager in dealings with the Trustee. Upon the separation of the assets in accordance with the Company instructions, the Trustee, as to those assets while so separated, shall be released and relieved of all investment duties, investment responsibilities and investment liabilities normally or statutorily incident to a trustee; provided, however, that the Trustee shall not be relieved of the responsibility of ensuring that assets of a Qualified Fund are invested solely in Permissible Assets, as defined in the Special Terms. The Trustee shall retain all other fiduciary duties with respect to assets the investment of which is directed by investment managers.
(b) To the extent that the investment of assets of the Funds are not being directed by one or more investment managers under Section 3.02(a), the Trustee shall hold, invest, and reinvest the funds delivered to it hereunder as it in its sole discretion deems advisable, subject to the restrictions set forth herein for investment of the assets of a Qualified Fund.
(c) Regardless of the person directing investments, any assets of a Qualified Fund shall be invested solely in Permissible Assets as defined in, and required by, the Special Terms, and shall be accumulated, invested, and reinvested in like manner. Upon the written consent of the Company, the assets of a Qualified Fund relating to a Unit may be pooled, but only with the assets of any other Qualified Fund relating to any other Unit; provided that the book and tax allocations of the Qualified Fund Pool are made in proportion to each Qualified Fund's relative book capital accounts. Upon the written consent of the Company, the assets of a Nonqualified Fund relating to a Unit may be pooled, but only with the assets of another Nonqualified Fund relating to any other Unit.
(d) Notwithstanding any other provision of this Agreement, with respect to the pooling ofinvestments authorized by subparagraph (c) no part of any Fund's (or any l subsequent holder's) interest in such pool, nor any right pertaining to such interest ,
(including any right to substitute another entity for the Fund or for any subsequent holder, I as holder ofinvestments pooled pursuant to subparagraph (c)) may be sold, assigned, I transferred or otherwise alienated or disposed of by any holder of an interest in the pool unless the written consent to the transfer of every other holder ofinterests in such pool is obtained in advance of any such transfer.
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(e) Notwithstanding the provisions of subparagraph (d) of this Section, a Fund's investment in a pooled arrangement may be withdrawn from the pool (but not from the Master Trust, except as otherwise permitted by this Agreement) at any time upon 7 days written notice to the Trustee by the Fund. If the Fund withdraws its entire l- interest in a pool, the pooled arrangement shall terminate 30 days after notice of final
) withdravial has been given by any withdrawing Fund unless a majority in interest of the remaining Funds give their written consent to continue the pool within such 30 day period. If the pooled arrangement terminates, each Fund's assets will be segregated into a separate account under the Master Trust, and no further commingling may occur for a l period of at least one year after such termination.
(f) Subparagraphs (c), (d) and (e) apply to transfers ofinterests within, and withdrawals from, the pooling aangement. Nothing within these sections shall be i interpreted to permit or to limit tansfer ofinterests in, or withdrawals from, a fund, which transfers and withdrawals are govemed by other provisions of this agreement. In addition, the provisions of subparagraphs (c), (d) and (c) shall not limit the Trustee's authority to invest in permissible common or collective trust funds.
Section 3.03. Prohlhition Agal-st Self Deallag. Notwithstanding any other provision in this Agreement, the Trustee shall not engage in any act of self dealing as defined in section 468A(e)(5) of the Code and Treas. Reg. 1.468A-5(b) or any corresponding future law or Treasury Regulation.
- Section 3.04. Ce7===tia=. The Trustee shall be entitled to receive out of the Funds reasonable compensation for services rendered by it, as well as expenses j necessarily incurred by it in the execution of the trust hereunder, provided such I compensation and expenses qualify as administrative costs and other incidental expenses of the Qualified Fund, as defined in the Special Terms, with respect to any payment of ,
compensation and expenses from the Qualified Fund. The Company acknowledges that, as part of the Trustee's compensation, the Trustee will eam interest on balances, including disbursement balances and balances arising from purchase'and sale transactions. If the Trustee advances cash or securities for any pmpose, including the purchase or sale of foreign exchange or of contracts for foreign exchange, or in the event that the Trustee shall incur or be assessed taxes, interest, charges, expenses, assessments, or other liabilities in connection with the performance of this Agreement, except such as may arise from its own negligent action, negligent failure to act, or willful misconduct, any property at any time held for the Funds or under this Agreement shall be security therefor and the Trustee shall be entitled to collect from the Funds sufficient cash for reimbursement, and if such cash is insufficient, dispose of the assets of the Company held under this Agreement to the extent necessary to obtain reimbursement. To the extent the Trustee advances funds to the Funds for disbursements or to effect the settlement of purchase transactions, the Trustee shall be entitled to collect from the Funds either (i) with respect to domestic assets, an amount equal to what would have been earned on the sums advanced (an amount approximating the " federal funds" interest rate) or (ii) with respect j to nondomestic assets, the rate applicable to the appropriate foreign market. I 1- m :1 m 199.1 6 l
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Section 3.05. Books of Account. The Trustee shall keep separate true and correct books of account with respect to each of the Funds, which books of account shall at all reasonable times be open to inspection by the Company or its duly appointed representatives. The Trustee shall, upon written request of the Company, permit government agencies, such as the NRC or the Internal Revenue Service, to inspect the books of account of the Funds. The Trustee shall furnish to the Company by the tenth business day of each month a statement for each Fund showing, with respect to the preceding calendar month, the balance of assets on hand at the beginning of such month, all receipts, investment transactions, and disbursements which took place during such month and the balance of assets on hand at the end of such month. The Trustee agrees to provide on a timely basis any information deemed necessary by the Company to file the Company's federal, state and local tax retums.
Section 3.06. Reliance on Documents. The Trustee, upon receipt of documents furnished to it by the Company pursuant to the provisions of this Agreement, shall examine the same to determine whether they conform to the requirements thereof. The Trustee acting in good faith may conclusively rely, as to the truth of statements and the correctness of opinions expressed in any certificate or other documents conforming to the requirements of this Agreement. If the Trustee in the administration of the Funds, shall deem it necessary or desirable that a matter be provided or established prior to taking or suffering any action hereunder, such matter (unless evidence in respect thereofis otherwise specifically prescribed hereunder) may be deemed by the Trustee to be conclusively provided or established by a certificate signed by the Chairman of the Board, the President or any Vice President of the Company and delivered to the Trustee.
The Trustee shall have no duty to inquire into the validity, accuracy or relevancy of any I statement contained in any certificate or document nor the authorization of any party making such certificate or delivering such document and the Trustee may rely and shall be protected in acting or refraining from acting upon any such written certificate or document fumished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee shall not, however, be relieved of any obligation (a) to refrain from self-dealing as provided in Section 3.03 hereof, or (b) to ensure that all assets of a Qualified Fund are invested solely in Permissible Assets as defined in the Special Terms.
Section 3.07. I.Inhility and Indemnification. The Trustee shall not be liable for any action taken by it in good faith and without gross negligence, willful misconduct or recklessness and reasonably believed by it to be authorized or within the rights or powers conferred upon it by this Agreement and may consult with counsel ofits own choice (including counsel for the Company) and shall have full and complete authorization and protection for any action taken or suffered by it hereunder in good faith and without gross ,
negligence and in accordance with the opinion of such counsel, provided, however, that the Trustee shall be liable for direct damages resulting from investing assets of the Qualified Fund in other than Permissible Assets or from self dealing as provided in Section 3.03 hereof. Provided indemnification does not result in selfdealing under Section 3.03 hereof or in a deemed contribution to a Qualified Fund in excess of the 1 WA 1272199.1 7 m
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I limitation on contributions under Section 468A of the Code and the regulations thereunder, the Company hereby agrees to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without gross negligence, willful misconduct, recklessness or bad faith on the part of the Trustee, arising out of or in connection with its entering into this Agreement and carrying out its duties hereunder, including the costs and expenses of defending itself against any claim ofliability, provided such loss, liability or expense does not result from investing assets of a Qualified Fund in other than Permissible Assets as defined in the Special Tenns or from self dealing under Section 3.03 hereof, and provided further that no such costs or expenses shall be paid if the payment of such costs or expenses is prohibited by section 468A of the Code or the regulations thereunder.
The Trustee shall not be responsible or liable for any losses or damages suffered by the Fund arising as a result of the insolvency of any custodian, subtrustee or subcustodian, except to the extent the Trustee was negligent in its selection or continued retention of such entity. Under no circumstances shall the Trustee be liable for any indirect, consequential, or special damages with respect to its role as Trustee.
Section 3.08. Resignation. Removal and Successor Trustees. The Trustee may i resign at any time upon sixty (60) days written notification to the Company. The ;
Company may remove the Trustee for any reason at any time upon thirty (30) days )
written notification to the Trustee. If a successor Trustee shall not have been appointed within these specified time periods after the giving of written notice of such resignation or removal, the Trustee or Company may apply to any court of competent jurisdiction to appoint a successor Trustee to act until such time, if any, as a successor shall have been appointed and shall have accepted its appointment as provided below. If the Trustee shall be adjudged bankrupt or insolvent, a vacancy shall thereupon be deemed 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 conditions hereof, and thereupon such successor Trustee shall become fully vested with all the rights, powers, trusts, duties and obligations ofits predecessor in trust hereunder, with like effect as if originally named as Trustee hereunder. The predecessor Trustee shall upon written request of the Company, and payment of all fees and expenses, deliver to the successor Trustee the corpus of the Funds and perform such other acts as may be required or be desirable to vest and confirm in said successor Trustee all right, title and interest in the corpus of the Funds to which it succeeds.
Section 3.09. Merger of Trustee. 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 Agreement without the necessity of executing or filing any additional 1-WA 1272199.1 8
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I acceptance of this Agreement or the performance of any further act on the part of any other parties hereto.
ARTICLE IV Amendments The Company may revoke this Agreement at any time or may amend this Agreement from time to time, provided such amendment does not cause the Qualified Fund to fail to qualify as a Nuclear Decommissioning Reserve Fund under section 468A of the Code and the regulations thereunder. The Qualified Fund is established and shall be maintained for the sole purpose of qualifying as a Nuclear Decommissioning Reserve Fund under section 468A of the Code and the regulations thereunder. If the Qualified Fund would fail to so qualify because of any provision contained in this Agreement, this
! . Agreement shall be deemed to be amended as necessary to conform with the requirements of section 468A and the regulations thereunder. If a proposed amendment shall affect the responsibility of the Trustee, such amendment shall not be considered valid and binding until such time as the amendment is executed by the Trustee, Notwithstanding any provision herein to the contrary, this Agreement cannot be modified in any material respect without first providing 30 days prior written notice to the NRC Director, Office of Nuclear Reactor Regulation.
ARTICLE V i Powers of the Trustee and Investment Manager Section 5.01. General Powers. The Trustee shall have and exercise the following powers and authority in the administration of the Funds only on the direction of an Investment Manager where such powers and authority relate to a separate account established for an Investment Manager, and in its sole discretion where such powers and authority relate to investments made by the Trustee in accordance with Section 3.02(b):
(a) to purchase, receive or subscribe for any securities or other property and to retain in trust such securities or other property; l (b) to sell, exchange, convey, transfer, lend, or otherwise dispose of any property held in the Funds and to make any sale by private contract or public auction; and no person dealing with the Trustee shall be bound to see to the application of the purchase money or to inquire into the validity, expediency or propriety of any such sale or other disposition; (c) to vote in person or by proxy any stocks, bonds or other securities held in the
! Funds; (d) to exercise any rights appurtenant to any such stocks, bonds or other securities 1 WA 1272199.1 9 l
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for the conversion thereofinto other stocks, bonds or securities, or to exercise rights or options to subscribe for or purchase additional stocks, bonds or other securities, and to make any and all necessary payments with respect to any such conversion or exercise, as well as to write options with respect to such stocks and to enter into any transactions in other forms of options with respect to any options which the Funds have outstanding at any time; l (e) to join in, dissent from or oppose the reorganization, recapitalization, consolidation, sale or merger of corporations or properties of which the Funds may hold stocks, bor.ds or other securities or in which it may be interested, upon such terms and
, conditions as deemed wise, to pay any expenses, assessments or subscriptions in l connection therewith, and to accept any securities or property, whether or not trustees would be authorized to invest in such securities or property, which may be issued upon any such reorganization, recapitalization, consolidation, sale or merger and thereafter to hold the same, without any duty to sell; (f) to enter into any type of contract with any insmance company or i companies, either for the purposes ofinvestment or otherwise; provided that no insurance l
company dealing with the Trustee shall be considered to be a party to this Agreement and shall only be bound by and held accountable to the extent ofits contract with the Trustee.
Except as otherwise provided by any contract, the insurance company need only look to the Trustee with regard to any instructions issued and shall make disbursements or l payments to any person, including the Trustee, as shall be directed by the Trustee. Where applicable, the Trustee shall be the sole owner of any and all insurance policies or contracts issued. Such contracts or policies, unless otherwise determined, shall be held as an asset of the Funds for safekeeping or custodian purposes only; ,
(g) upon authorization of the Company to lend the assets of the Funds and, specifically, to loan any securities to brokers, dealers or banks upon such terms, and secured in such manner, as may be determined by the Trustee, 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, with respect to the lending of i securities pursuant to this paragraph, the Trustee's powers shall subsume the role of I
custodian (the expressed intent hereunder being that the Corporation, in such case, be deemed a financial institution, within the meaning of section 101 (22) of the Bankruptcy Code); and provided, further, that any loans made from the Funds shall be made in
! conformity with such laws or regulations goveming such lending activities which may l have been promulgated by any appropriate regulatory body at the time of such loan; (h) to purchase, enter, sell, hold, and generally deal in any manner in and with contracts for the immediate or future delivery of financial instruments of any issuer or of any other property; to grant, purchase, sell, exercise, permit to expire, permit 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 combinaticn.
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Settlements of transactions may be effected in trading and processing practices customary in thejurisdiction or market where the transaction occurs. The Company acknowledges that this may, in certain circumstances, require the delivery of cash or securities (or other property) without the concurrent receipt of securities (or other property) or cash and, in such circumstances, the Company shall have sole responsibility for nonreceipt of payment (or late payment) by the counterparty.
Notwithstanding anything in this Agreement to the contrary, the Trustee shall not be responsible or liable for its failure to perform under this Agreement or for any losses to the Funds resulting from any event beyond the reasonable control of the Trustee, its agents or subcustodians, including but not limited to nationalization, strikes, expropriation, devaluation, seizure, or similar action by any governmental authority, de facto or de jure; or enactment, promulgation, imposition or enforcement by any such govemmental authority of currency restrictions, exchange controls, levies or other charges affecting the Funds' property; or the breakdown, failure or malfunction of any utilities or telecommunications systems; or any order or regulation of any banking or securities industry including changes in market rules and market conditions affecting the execution or settlement of transactions; or acts of war, terrorism, insurrection or
- revolution; or acts of God; or any other similar event. This Section shall survive the termination of this Agreement.
Section 5.02. Specine Powers of the Trustee. The Trustee shall have the following powers and authority, to be exercised in its sole discretion with respect te the Fund:
(a) to appoint agents, custodians, subtrustees, depositories or counsel, domestic or foreign, as to part or all of the Funds and functions incident thereto where, in the sole discretion of the Trustee, such delegation is necessary in order to facilitate the operations of the Funds and such delegation is not inconsistent with the purposes of the Funds or in contravention of any applicable law. To the extent that the appointment of any such person or entity may be deemed to be the appointment of a fiduciary, the Trustee may exercise the powers granted hereby to appoint as such a fiduciary any person or entity. Upon such delegation, the Trustee may require such reports, bonds or written agreements as it deems necessary to properly monitor the actions ofits delegate.
(b) to cause any investment, either in whole or in part, in the Funds 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 an affiliate of the Trustee, a
- clearing corporation, or a depository, or in book entry form, or to retain any such investment unregistered or in a form pennitting transfer by delivery, provided that the books and records of the Trustee shall at all times show that such investments are a part of the Funds; 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 manner permitted by law; provided that the Trustee shall not be 1-WA:1272199.1 11
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1 responsible for any losses resulting from the deposit or maintenance of securities or other property (in accordance with market practice, custom, or regulation) with any recognized foreign or domestic clearing facility, book entry system, centralized custodial depository, or similar organization; and
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I (c) to make, execute and deliver, as trustee, any and all deeds, leases, mortgages, conveyances, waivers, releases or other instruments in writing necessary or desirable for the accomplishment of any of the foregoing powers; (d) . to defend against or participate in any legal actions involving the Funds or the Trustee in its capacity stated herein, in the manner and to the extent it deems advisable.
(e) to form corporations and to create trusts, to hold title to any security or other property, to enter into agreements creating, partnerships orjoint ventures for any purpose or purposes determined by the Trustee to be in the best interests of the Funds; (f) to establish and maintain such separate accounts in accordance with the instructions of the as the Company deems necessary for the proper administration of the Funds, or as determined to be necessary by the Trustee;
-(g) to hold uninvested cash in its commercial bank or that of an affiliate, as it shall deem reasonable or necessary; (h) 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 Company 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 from any compensation of the Trustee hereunder, or any compensation of the collective fund trustee for the management of such collective fund; (i) 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 i unlimited, joint venture and other forms ofjoint enterprise created for any lawful purpose; (j) to generally take all action, whether or not expressly authorized, which the Trustee may deem necessary or desirable for the protection of the Funds, i Notwithstanding anything else in this Agreement to the contrary, including, without limitation, any specific or general power granted to the Trustee and to the Investment Managers, including the power to invest in real property, no portion of the 1-WA:1272199.1 12
Funds shall be invested in real estate. For this purpose "real estate" includes, but is not limited to; real property, leaseholds or mineral interests.
Section 5.03 The powers described in this Section 6.1 may be exercised by the j Trustee with or without instructions, from the Company or a party authorized by the Company to act on its behalf, but where the Trustee acts on Authorized Instructions, the Trustee shall be fully protected as described in Section 3.7. Without limiting the j generality of the foregoing, the Trustee shall not be liable for the acts or omissions of any j person appointed under paragraph (a) of Section 5.2 pursuant to Authorized Instructions. I l
Section 5.04 The assets of the Funds shall not be invested in the securities or other obligations ofGPU Nuclear, Inc., Peco Energy, British Energy, plc, or affiliates thereof, or their successors or assigns. Except for investments tied to market indexes or other non-nuclear sector mutual funds, investments in any entity owning one or more nuclear power plants is prohibited.
ARTICLE VI Termination The Qualified Fund shall terminate upon the later of(A) the earlier of either (i) substantial completion of decommissioning of their respective Unit, as defined in the Special Terms, or (ii) disqualification of the Qualified Fund by the Intemal Revenue Service as provided in Treas. Reg. 1.468A5(c) or any corresponding future Treasury Regulation or (B) termination by the NRC of the Unit's operating license. The Nonqualified Fund shall terminate upon termination by the NRC of the Unit's operating license. The Company shall notify the Trustee upon termination of any Fund, and the assets of the terminated Fund shall be distributed to the Company. If a Fund termination occurs before the NRC terminates the Unit's operating license, the Trustee will adhere to Section 5.02(b) of this Agreement.
l ARTICLE VII Miscellanenus Section 7.01. Binding Agreement. All covenants and agreements in this Agreement shall be binding upon and inure to the benefit of the respective parties hereto, their successors and assigns.
1-WA:1 N2199.1 13
Section 7.02. Matkes. All notices and communications hereunder shall be in writing and shall be deemed to be duly given on the date mailed if sent by registered mail, return receipt requested, as follows:
MELLON B ANK, N.A.
Trust and Investment Department ,
Attn: Trust Administration Room 151-3346 One Mellon Bank Center Pittsburgh, PA 15258 or at such other address as any of the above may have furnished to the other parties in writing by registered mail, return receipt requested.
Section 7.03. Governing Law. The Funds have been established pursuant to this Agreement in accordance with the requirements for a trust under the laws of the (State of Delaware / Commonwealth of Pennsylvania] and this Agreement shall be governed by and construed and enforced in accordance with the laws of the (State of Delaware / Commonwealth of Pennsylvania].
Section 7.04. Counterparts. This Agreement may be executed in several counterparts, and all such counterparts executed and delivered, each an original, shall constitute but one and the same instrument.
Section 7.05. (a) Contractual Income. The Trustee shall credit the Fund with income and maturity proceeds on securities on contractual payment date net of any taxes or upon actual receipt as agreed between the Trustee and the Company. To the extent the l Company and the Trustee have agreed to credit income on contractual payment date, the l I
Trustee may reverse such accounting entries with back value to the contractual payment date if the Trustee reasonably believes that such amount will not be received by it.
(b) Contractual Settlement. The Trustee will attend to the settlement of securities transactions on the basis of either contractual settlement date accounting or actual settlement date accounting as agreed between the Company and the Trustee. To the extent the Company and the Trustee have agreed to settle certain securities ,
transactions on the basis of contractual settlement date accounting, the Trustee may I reverse with back value to the contractual settlement date any entry relating to such contractual settlement where the related transaction remains unsettled according to j established procedures.
Section 7.06. The Company and the Trustee hereby each represent and warrant to ;
the other that it has full authority to enter into this Agreement upon the terms and !
conditions hereof and that the individual executing this Agreement on its behalf has the requisite authority to bind the Company and the Trustee to this Agreement.
1-WA:1272199.1 14
rm .
IN WITNESS WHEREOF, the parties hereto, each intending to be legally bound hemby, have hereunto set their hands and seals as of the day and year first above written.
AMERGEN ENERGY COMPANY, LLC By:
Name:
Title:
MELLON BANK, N.A.
By:
Name:
Title:
1 WA:1272199.1 15
EXHIBIT "A" SPECIAL TERMS OF TIIE QUALIFIED NUCLEAR DECOMMISSIONING RESERVE FUND The following Special Terms of the Qualified Nuclear Decommissioning Reserve Fund (the " Qualified Fund") (hereinafter referred to as the "Special Terms") will apply for purposes of the Nuclear Decommissioning Trust Agreement, dated between (the " Company") and MELLON BANK, N.A.
(the " Trustee") (the " Agreement").
Section 1. Definitions. The following terms as used in the Special Terms shall, unless the context clearly indicates otherwise, have the following respective meanings:
(a) " Administrative costs and other incidental expenses of a Qualified Fund" shall mean all ordinary and necessary expenses incurred in connection with the operation of a Qualified Fund, as provided in Treas. Reg. 1.468A 5(a)(3)(ii)(A) or any corresponding future Treasury Regulation, including without limitation, federal, state and local income tax, legal expenses, accounting expenses, actuarial expenses and trustee expenses.
(b) " Qualified Decommissioning Costs" shall mean all expenses otherwise deductible for federal income tax purposes without regard to section 280B of the Intemal Revenue Code of 1986, as amended, or any corresponding section or sections of any future United States internal revenue statute (the " Code"), incurred (or to be incurred) in connection with the entombment, decontamination, dismantlement, removal and disposal of the structures, systems and components of the Unit (s) when it has permanently ceased the production of electric energy, excluding any costs incurred for the disposal of spent nuclear fuel, as provided in Treas. Reg. 1.468A 1(b)(5) or any corresponding future Treasury Regulation. Such term includes all otherwise deductible expenses to be incurred in connection with the preparation for decommissioning, such as engineering and other planning expenses, and all otherwise deductible expenses to be incurred with respect to the Unit after the actual decommissioning occurs, such a physical security and radiation monitoring expenses.
(c) " Permissible Assets" shall mean any investment permitted for a qualified nuclear decommissioning reserve fund under section 468A of the Code and the regulations thereunder.
(d) " Substantial completion of decommissioning" shall mean the date that the maximum acceptable radioactivity levels mandated by the NRC with respect to a decommissioned nuclear power plant are satisfied by the Unit; provided, however, that if the Company requests a ruling from the Internal Revenue Service, the date designated by ,
1 WA:1272199.1 16 l
l j
s
)
the Internal Revenue Service as the date on which substantial completion of ,
decommissioning occurs shall govern; provided, further, that the date on which substantial completion of decommissioning occurs shall be in accordance with Treas.
Reg. Ql.468A-5(d)(2) or any corresponding future Treasury Regulation.
i Section 2. Contributions in a Oumilbd Fund. The. assets of the Qualified Fund l shall be contributed by the Company (or by others approved by the Company in writing) from time to time in cash. The Trustee shall not accept any contributions for the Qualified Fund other than cash payments with respect to which the Company is allowed a deduction under section 468A(a) of the Code and Treas. Reg. 1.468A2(a) or any corresponding future Treasury Regulations. The Company hereby represents that all contributions (or deemed contributions) by the Company to the Qualified Fund in accordance with the provisions of Section 1.03 of the Agreement shall be deductible under section 468A of the Code and Treas. Reg. {1.468A2(a) or any corresponding future Treasury Regulation or shall be withdrawn pursuant to Section 4 hereof.
Section 3. Liml*=tlan on Use of Assets. The assets of the Qualified Fund shall be used exclusively as follows:
(a) To satisfy, in whole or in part, the liability of the Company for Qualified Decommissioning Costs through payments by the Trustee pursuant to Section 2.02 of the Agreement; and (b) To pay the administrative costs and other incidental expenses of the Qualified Fune and (c)' fo the extent the assets of the Qualified Fund are not currently required for (a) and (b) above, to invest directly in Permissible Assets.
Section 4. Withdrawals by the Comnany. If the Company's contribution (or deemed contribution) to the Qualified Fund in any one year exceeds the amount deductible under section 468A of the Code and the regulations thereunder, the Company may withdraw such excess contribution from the Qualified Fund or instruct the Trustee to withdraw such excess contribution from the Qualified Fund and pay such excess contribution to the Nonqualified Fund, as defined in the Agreement, pursuant to Section 2.04 of the Agreement, provided any such withdrawal occurs on or before the date prescribed by law (including extensions) for filing the federal income tax return of the Qualified Fund for the taxable year to which the excess contribution relates for withdrawals pursuant to Treas. Reg. ((1.468A5(c)(2) and 1.468A 2(f)(2) and occurs on or before the later of the date prescribed by law (including extensions) for filing the federal income tax return of the Qualified Fund for the taxable year to which the excess contribution relates or the date that is thirty (30) days after the date that the Company receives the ruling amount for such taxable year for withdrawals pursuant to Treas. Reg. { 1.468A-3(j)(3).' If the Company determines that withdrawal 1-WA:12r2199.1 17
p -
pursuant to this Section 4 is appropriate, the Company shall present a certificate so stating to the Trustee signed by its Chairman of the Board, its President or one ofits Vice Presidents and its Treasurer or an Assistant Treasurer, requesting such withdrawal. The certificate shall be substantially in the form attached as Exhibit C to the Agreement for transfers to the Nonqualified Fund as provided in Section 2.04 of the Agreement and substantially in the form of Exhibit D to the Agreement for withdrawals by the Company.
Section 5. TArnhle Year / Tax Returns. The accounting and taxable year for a Qualified Fund shall be the taxable year of the Company for federal income tax purposes.
If the taxable year of the Company shall change, the Company shall notify the Trustee of such change and the accounting and taxable year of the Qualified Fund must change to the taxable year of the Company as provided in Treas. Reg. Q l.468A4(c)(1) or any corresponding future Treasury Regulation. The Company shall assist the Trustee in complying with any requirements under section 442 of the Code and Treas. Reg. Ql.4421.
The Company shall prepare, or cause to be prepared, any tax returns required to be filed by the Qualified Fund, and the Trustee shall sign and file such returns on behalf of the Qualified Fund. The Trustee shall cooperate with the Company in the preparation of such returns.
I 1 WA:1272199.1 18 i l
4 EXIllBIT "B" CERTIFICATE FOR PAYMENT OF DECOMMISSIONING COSTS
[Name of Trusteel, as Trustee
[ Address]
This Certificate is submitted pursuant to Section 2.02 of the Nuclear Decommissioning Trust Agreement, dated , between Mellon Bank, N.A.
and (the " Company")(the " Agreement"). All capitalized terms used in this Certificate and not otherwise defined herein shall have the meanings assigned to such temis in the Agreement. In your capacity as Trustee, you are hereby authorized and requested to disburse out of the Funds to the amount ofS from the Qualified Fund and the amount of S from the Nonqualified Fund for the payment of the Decommissioning Costs which have been incurred with respect to the Three Mile Island Unit One Nuclear Generating Facility. With respect to such Decommissioning Costs, the Company hereby certifies as follows:
- 1. The amount to be disbursed pursuant to this Certificate shall be solely used for the purpose of paying the Decommissioning Costs described in Schedule A l hereto.
- 2. None of the Decommissioning Costs described in Schedule A hereto have l
previously been made the basis of any certificate pursuant to Section 2.02 of the Agreement.
- 3. The amount to be disbursed from the Qualified Fund pursuant to this Certificate shall be used solely for the purpose of paying Qualified Decommissioning Costs as defined in the Special Terms.
- 4. Any necessary authorizations of the NRC, or any corresponding goverrmental authority having jurisdiction over the decommissioning of the Unit have been obtained.
IN WITNESS WHEREOF, the undersigned have executed this Certificate in the capacity shown below as of .
1 WA:1272199.1 19
l AMERGEN ENERGY COMPANY, LLC l By:
Name:
Title:
l MELLON BANK, N.A.
By:
Name:
Title:
1 1 1-WA:1272199.1 20 1
c 1
i EXIIIBIT "C" CERTIFICATE FOR TRANSFER BETWEEN TIIE QUALIFIED FUND AND TIIE NONQUALIFIED FUND i l
[Name of Trustee],
l as Trustee l
[ Address]
l l
l This Certificate is submitted pursuant to Section 2.04 of the Nuclear Decommissioning Tmst Agreement, dated , between Mellon Bank, N.A. (the " Trustee") and (the " Company")(the " Agreement"). All capitalized terms used in this Certificate and not otherwise defined herein shall have the meanings assigned to such terms in the Agreement. In your capacity as Trustee, you are hereby authorized and instructed as follows (complete one):
To pay 5 in cash from the Nonqualified Fund to the Qualified Fund; or l
To pay $ in cash from the Qualified Fund to the i Nonqualified Fund. '
With respect to such payment, the Company hereby certifies as follows:
- 1. Any amount stated herein to be paid from the Nonqualified Fund to the Qualified Fund is in accordance with the contribution limitations applicable to the Qualified Fund set fonh in Section 2 of the Special Terms and the limitations of Section 2.04 of the Agreement.
- 2. Any amount stated herein to be paid from the Qualified Fund to the Nonqualified Fund is in accordance with Section 4 of the Special Terms. The Company has determined that such payment is appropriate under the standards of Section 4 of the Speck! Ter'r.s.
1-WA:1272199.1 21
p._ - ,
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IN WITNESS WHEREOF, the undersigned have executed this Certificate in the capacity as shown below as of , .
AMERGEN ENERGY COMPANY, LLC l
I By: l Name: )
Title:
]
l l
MELLON BANK, N.A.
By:
Name:
Title:
l.
i 1
l l
1-WA:1272199.1 22
I EXIIIBIT "D" CERTIFICATE FOR WITIIDRAWAL 1 OF EXCESS CONTRIBUTIONS FROM QUALIFIED FUND i
[Name of Trusteel, as Trustee
[ Address]
This Certificate is submitted pursuant to Section 4 of the Special Terms attached l as Exhibit A to the Nuclear Decommissioning Trust Agreement, dated ,
l between Mellon Bank, N.A. (the " Trustee") and (the " Company")
(the " Agreement"). All capitalized terms used in this Certificate and not otherwise defined herein shall have the meanings assigned to such terms in the Agreement. In your capacity as Trustee, you are hereby authorized and instructed to pay 5 in cash to the Company from the Qualified Fund. With respect to such payment, the Company hereby certifies that withdrawal pursuant to Section 4 of the Special Terms is appropriate and that 5 constitutes an excess contribution pursuant to such Section.
IN WITNESS WIIEREOF, the undersigned have executed this Certificate in the capacity as showm below as of , .
1 AMERGEN ENERGY COMPANY, LLC By:
Name:
Title:
MELLON BANK, N.A.
By:
Name:
Title:
1 WA 1272199.1 23