ML20238F711
| ML20238F711 | |
| Person / Time | |
|---|---|
| Site: | Beaver Valley |
| Issue date: | 12/31/1986 |
| From: | Anita Gray, Taylor B WILMINGTON TRUST CO. |
| To: | |
| Shared Package | |
| ML20238F529 | List: |
| References | |
| NUDOCS 8709160301 | |
| Download: ML20238F711 (404) | |
Text
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o- i i 2 To Our Stockholders 5 Asset Management 17 Financial Review 38 Directors 39 Principal Of6cers, Standing Committees and Delaware Advisory Board i 40 Of6ces and Operating j Subsidiaries
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41 Stockholder Information t i e
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1 i The Year in Brief i H 1986 1985 increase for the year (in thousands) Interent revenue 8 2(M,133 $ 184,311 10.8 % Net interest income 72,945 67,846 7,5 Provision for loan lonnes 8.250 6,800 21.3 Other income 59,365 43,122 37,7 Net interent and other income 124,060 1(4,168 19.1 Other expense 86,017 76,270 12.8 Income before income taxes 38,043 27.898 36.4 Applicable income taxes 3,999 900 344.3 Net income 34,048 26,998 26.1 Per share' r Net income $ 1.95 8 1.58 23.4 % Dividends paid .63 .55 14.5 llook value at December 31 9.68 8.33 16.2 At year end Iin shousamh) ' Anneta $2.777.933 $2,328,408 19.3 % loans 1,629,363 1,417,950 14.9 Henerve for loan losses 21.983 19,425 28.6 inicutments 521,976 436,945 19.5 Deposits 2,230,306 1,830,140 21.9 Stockholders
- equity 169,891 144,157 17.9
*Prsor year anwunts thmughout the annual report haue been achussed to reflect the 100% stock da adend declared on October 16,1986.
kse: Allfsgures i , this report, exceptfor awmges, hane been restated to include she 1984 acauastion af %far, land Ssate Bank on a pwling ofimrests basu.
t W ILS11NGTON Ta tsT C O SI PA N Y 2
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1986 ' e H Hf/((! {l' l0l'f Net income Return on Return on (Fer shee) Stockholders' Assets Equity (Netincome as a (Nel rncome as percenta;e of a percentage at aerage dise!D no h) s2.00 22 5 % 15% s1 60 18 0 % 1.2% st20 13 5 9% l I
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To Our Stockholders t 1986 marks the fifth consecutive year in i
.w hit h Wiltnirigton Tru-t'- e arriiiiz- gniw th . - ..
onipa. ed indu-trs pertbrmance by a wide marem. \ct income increa ed 2tA oser the ~ sear before to reach a reconi 131.0 million. or 91.o~> a -hare. op fnim 927.0 million, or N v l,">8 a % hare. earned in 1983. Earning- hase more than tripled in the - la-t fise year- and doubled in the la-t three.
\nnual merea-e- mer the the > ear period hase aseraged 2(A. <
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\Pf e fDt 9t(109 ( n nipjf .
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.n nullsono in< wn,e l'er shaw 1986 El 1.n 269 91.4 > s 1985 2I.0 26 1.58 '
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lual 21.5 .to 1.28 h 1981 16.5 di .oo & \ f f02 b.$ $b .hh - 1981 10.7 .65 Henant J. Llor.11 Sf' belie'st" till' Iise-)t'ar lecord t- among
" * * " ' ' * " * " tht he- ill tht* nation for banking companies i i . A rb l:4 r r a / Q r f' w ho-e -hare- are aidely traded. the fifth con ecutise annual increa-e in the
+b - L e4. 44 J
? ;T : bur compani performance al-o com- regular uarterly cash disidend raic and the
;:4= ,y pare well when mea-ured by the return thini 1009 stock disidend (twu-for-one -phti
- d M s E.,u earned on -tockholder ' equit3. Thi- critical ince 1983.
J.- d.$ mea-me ha- impnned steadily user the pa t I,suarteris < ash 1nnual w o.1
'r.:21 9.?*'l ' ' ~lav J Lf sear- to n ach a record 21.89 in 1986- dn ni,n,l e,ne in, re a >e du ideinl,
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I. id olle of tile liigbe-t rt* turns afnong cornparakde {986 3, [8 2()q [g()q 1985 .15 20 1009 [ ~ [.).$ bank- in the nation. 7 -w n. - los t .125 19 .-
\ t oncorne a, a p<rceniace or vuns .105 12 1non y j,'9 .nvruce sam kholderi equas lq93 3pg -
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, g' l on ", 20.I lon t l9,i 12trgely a i the result of the three -tock I"HA 16.6 -plits i1009 -tock dividenda, the number I""2 l'I 7 of Wilmington Trust shares outstanding ha-loMI 14 4 risen from slightly over 2 million in the thin!
.j The-e fasorable results enabled the quarter of 1933 to more than 17.5 million lloard ot Director . in October. to increare currently. We beliese this larger number of the regular quarterly cash disidend by 209 shares outstanding will contribute toward and to -plit the ,tock on a two-for-one ba-is improving the market for our stock. partien-hs pasing a 1009 -tock disidend. Thi* was larly with re-pect to liquidity and to narnm-mg the spread between the bid and offer i
-ides of the user-the-counter market in w hh h the -hare trade.
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t f 4 pirong earnifiga perfistmance in 1986 ' T - al o enabled u, to continue building the e ornpan3'- financial -trength, a goal whit h hst- taken on adsled -ignihram e rerchtly " til s ich id (be Ibtlis tillit - lsetng esper)eln ed , . . in -orne -ci tor- of t he hanking aml thrift . I nuht trie . , Ur prusided a record $8..l inilhon from 1986 earning, to huihl the re-ene for loan .. '. lo--es to $25.0 inillion. or 1.5.We of loan- - + ont-landirig af sear-end. Increa-ing the re-sene ha- been a long--tanding prioril). ' -
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6.um n ,m v ik r uta,, r , 1%,oswn ,a mar...nd ..r' t, .no in noih.orus s m mdh,*ns o .mt st, mdm e , 1980 f8.3 925.0 1. 5.5q 198 ~) fi. H 19.I 1. 17 1981 1. 8 1.17 1.25 .. w l 19RI 2.7 1 ! .8 1. 'l3 \. Nmue I (;m 1982 .i. 5 10.2 1. 12 1981 2.I *5.
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1979 l9 1.5 .85 _ 39 g ,g gg -- sta. RJdm' eymt s towen, run mdlwrut en Thi -trong buihlup of the re-ene has 1986 S170 lHq heen the re-ult of a deliberate corporate pol- 49g3 pg ;7 ary rather than herau-e of any concern about 1981 123 ii loan qualits. Lt loan charp"~off amounted 1983 108 I" to onh ,lH4 of snerage loana outstanding in
~ ~
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' 98 ll 1981 88 . - -
PlH6 and an aserage of only .15f7r ince - - - - -- 1078. w hich i- well below irulustry esperi. Stockhokled equits plus the resene for enee. kna< cruine loans tutaled only S2.8 loan losses was equal to 7.02% of aret at ludlion. or .lI9 of loan- outstanding at the the end of 1986 h'otapared with 7.0.19 the 19Mb se.n -crc l. ) ear heforek despite the record 19Pf increa-e l'n.a th of sio( k holderd equity, ano!her e in assets this pa t year. indicalot :d finencial -treligth, ha3 acceler, mington Trusti favorable results in afed oser the pa-t lite years, reaching a I90b"\CC"dPdIb"PT"jfCli"fl*II'TIb"Nf'l reconi A170 million at the end of 1986. Scar or the comimnyi 1986-1990 pirategic Plan-which strengthens our confidence that achieving the plank long-term goal i-a realistic expectation. The major thru-t or the plari call for mitiritaining tht' -trong
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g ._-. . mth of our hanking husine% and e-tah-
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@.3-9 y ,ng the company a* one of the nan. ,
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r .A ) - t piefnit*r prosider, of trH t and inse-ifnefit out-of--tate
- hank, and are enEJged in artise InallaMelntallt 9ers ket**. Ollfkng the pa-t year tll-c'U--ioll .with a riumber'of prorni iiig ,
I-' we made solid progre-- in both se pr.'t . p ro-pec t *. l [he bank' earning a -et- in, rea-ed 2f 6 lnesitabl). a growing Im ine. mean, a -( un a dady .nerage ba i- in l'>86: loan- es- larger work force and more office -pace. Our 4 panded 219 and the ime-tment porttidio projection, for both led us to pun ha-e 10.6 grew in ,l.19. liemand for loan- wa- -irong acre, of land in an office park on the out. in all sector, of nur lending bu ine- . retlect- kirt, of Wilmington. Con-truction ut an , 1> ing a healthy economy throughout our pri- 82.ooo--quare-foot building i- under wan mars lending area. Re-ult- al*o benefited with occupancy espected nest fall. The -ite from broadening our product line and can accommodate another buibling of up to- ;
-trenythening our lerding -taff. 65.000,quare feet, which thoubt -ati-ft our Effort, to buihi the compani- tru-t and space need, fi>r the foreseeable future.
imestment management bu-ine-,. which The compan>k pnn.pects for 1987 appear were accelerated during the year. inct with to be excellent. particularly if we maintain recont succe- . Mi> added S3 billion of a--et* our momentum in deseloping new tru-t and ti r which we base inse tment di cretion. 911 ime-tment management bu*ine- . We L.ok billion of custody a,,et- and 625 lullion of forwant to the year ahead and the lonerr-serm other e orporate tru-teta hll -rai-ing tht* initire with cofdidenet*-ba-ed largel) sul total fnem 973 billion at the end of l985 to the -kill, ami enerp . of our -taff. The-c si12 billion at the end of last 3rar. Tru-t and dedicated people are your compani- greate-t f ime-tment management resenue- increa-ed as-et. hy a tecord $8.2 inillion, or 2M . to 939.1
;l j
million tiir the sear. Becau-e deselopin the a--rt management -egment of.our bu-ineu
%0i U"' nard M Tayb r.11 e.-
l i- -o important to the -uire-, of our 1986- 1 % rman n j. e 1940 Strategic l'lan, we h.ne desoted page,. 5-If, of thi- report to de-cribing the major ' g. pnnluct, and -enice, we offer and the tep, [ y / we h.ne taken to deselop them. .,- M C %Et ' 'g,,j,yg g,,( /
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- yy l Other relatisely new line, of bu .meo, f m,/,.ni al-o espanded rapidly during 1986. Discount
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! lookesage resenues increa-ed 15G and fee, E*' ,', k{.y,.4~.; ,
j)$Gg# telated to precious metal- storage more than 95%q; ,",..te .)., ;t , - e F k.? %j.4 s.
. pia trupled. Our newe-t line of busines ,
procr -ing credit card account, Ihr l>ank,
' who relocate their credit card portiblius in llelaware under the Con-umer Credit Bank Act. got off to an excellent -tart. To date. we h ne reached apteement with three major
d I
'd ASSET M AN AG EM ENT i 1
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,,o A3 entr4'ed]Hsrate' flalile -Ilggt'sts. E ilitlingtei i
- It'u-t t hettl;sans Ila- efiljdla-i/Cel lhe t ril-l inlaille-- *iin e !!- b rul18liflg in lUIl3. I het' r '
, .a ihe sear . ihe cornpan3 ha- acwn,pra a naiinnai treniation w hich per-i i i., day i;n- J
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- g. b' ,' i dehwring t ,e highe-t ipiality co-tonii/ed liducian -en ice- a tro-tee casi prmide. l i., .
Thi- hi- tori" einpha-i, on tru-t ha-ine- ha- i rnabh d the cionpany to dewhip the entire range of a--et rnanagernent -en ie e- to l g[.%),'<0 i! far heuend the aserage for regional bankr. Specifically
/
T a lewl y n. Wibnington Tru-i i-i une nil3 re-pon-ibir lur apprmimately M.i hilhon of tro-i. In a ll-Itsd) ansl line-lfllt* fit ffianadennefit .t-met- II!!i* l- Pe ptal to about d I.p. . + for cai h 9 I ..I the i ompam'- hanking a--et--a ratio uh tantially higher than h5h. . .....4 L
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ihe con, pan 3 en e-a-irn-i..rierapen.ulnaich + n dh.,n ofcerroraieiru i
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3 ir 's a -et 4 eeuritie- i--or , capiipniellt lea-cr. etc.1: anl l
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Nt* Igl\ e l}\ P**!!II,*Iik l l-4 '[t* k l4 8ll III' .}l)fIbIk SIIldkt' k I 4 9ll 4 0 k It* I 1 Pll ti
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..<. Th unu-tial -i/t of the-e as-et riian.ievineto e >'g o,
.n'ti\ ilit - litt telatil8tl tti tilt' -i/e 'If dit' !Mllkl llelllt*t! lite conlp.tlly dt*wlop N.Nll n el I ,.'-n nonintere-t rewinues for caeli s l.t H) of tiet intere-t inconie in 1986.
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) We plan to empha-ize the dewlopinent of flo-t... . -
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s in trust pro- ~ \ t-ion- telating to generation -kipping perpetuities. 3pendthrift protectiott and the use of multiple inse3tmerit Inanagers. as well as the benefit' of a moderti Prudent \lan Rule. The rapid grwih of Wilmington's eh.w ntow n Building on these strengths. business datrict w-flects Delawarr's fasor-our petronal tru t hu3 int % has grown o\er the years to the point where. abic tax, judicial ami regulator 3 chmates. today. Wilmington Trust ranks si\th among tru<t hank 3 in the nation which attract out...f. state compaine, to with te-pert to petronal assets utider inanagement sersittg clients incorporate and'or establish operstmn, te-iding in 18 states and 15 foreign countries. here. Similar mduce-ments base been Tlie coriipaiis's lotig-tertti strategic instrumental in desei-oping Wilmington p dn CoIllnikt- un Io nik ng a11 doperts of our personal tru t and anet Trust's a..et manage. fftent bnHnemp, tIlalldgelut*llt )u-kile%3 dIafnaIkCd 3. We aIe Coils IICed ! IdI kh b 5 a 9 sw f y ., - l l THE DEL AWAH E A DVA NTAG-E .____--_m._._. _-_m .N 4 i I hal '" wg . . . * . 'L , ,' <, . 4 , - 4 L ' , , t 4 . f'* -
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ear can causa .' ce? co ens cs . ees i sus van vus < arnts Il 'v e / -o< 1 w* ee ( man l we mei. anna ; we oar man .l we se c . sase es t saan j . 4 .j , } y... i , . , , 7, , . * '- 1 i I i i $ f ) , ' f~,,,m! . ev i w g.. .
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? *'g g J .. 9. f- 4 g gh.5. Y f. . . > $ %^ ).'5. i y 1 'lf ~, >l f g . . . l. ~ k, g),.+c 3 f ,+7'f e j{,g/yg e .
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, .i o - . /* ,:*'my f N g .e..m. . ~. '. T :. . o. h . 8 ~ .n. ,"^_ j i ; q. 4 ~:m-achievable by complementing our prosen fiducian skills with the I promising new insestment management products and techniques that I are de-cribed below. l . Investment Management eseral years ago, we assigned q The Chicago lloard of Trade offers hishiv the highest priority to developing our investment management skill,in : dncloped market's in j L:.5. Treasurv futures. the firm helief that consistently superior insestment performance wa- 1 which %lmington j Trust is now employ m.g one of the keys to developing the full potential of our trust busine- . in its newest flench-mark 5trategy for Our studies indicated that the odd-imprming the merall i returns from long-term were against a traditionally organized and compensated commercial i l'.S. Trrasury bonds. f hank trust staff achieving superior performance-primarily becau e j i of the difficulty of attracting and retaining the requisite -killed l I professionals. This led us to the complete restructuring of our trust i organization, compensation methods and insestment strategie . Having realized that no commercial bank engaged in the trust business (including Wilmington Tru-u ( could attract all the skilled investment managers required to deselop { and manage the wide variety ofinvestment sehicles and technique- { necessary to be competitive today (and to remain so in the fmures. j 1 we decided on a new and anique course. We concentrated on deselop. ( j i ing the investment vehicles and techniques of our own where we helieved we had a competitive advantage, and we acquired tho-e we lacked by forming joint sentures with outside money managers who ] 1 1 possessed the skills and techniques needed to fill out a diversified array of attractise insestment choices. With this now in place. we beliese we are well-situated to deliver highly competitive insestment per- ! formance and to market it effectively. Our own fixed-income management techniques had already proved to be remarkably successful and highly I- I marketable. These techniques, called the Benchmark Strategies. are I o * ~ -4 hased on statistically superior computerized models designed to 1~ measure and respond to market momentum (rather than to interest rate l 1 l- l no , Ibrecasts). I " ' ~ " Using only U.S. Treasurv securitie . U ~: 1 . the bank's Benchmark Strategies have produced consistently out-s ' 1 standbg returns. During 1986, we added a Benchmark futures rtrategy b d: \c I l U b u .i { b Q t. l - _ - - - - - - - - - - - -L to our fi\ed income product line which enabled us to offer esen higher return < to long-terin inestors. bing profe'sional marketing and portfolic management teatus who-e members are paid on an incentive -rale rotnpetitise with imestment adsi-ort firms. we hate vitady enhaticed utir ability to de liser the e ntire me tiu of Benchmark pn> ducts -altracting increasing numbers of new clients with fees based partly on our performance, fixed-income as-ets managed under the Buu hmark Strategies base doubled each year since 1982. I We base al+o packaged the Bench-mark Strategies in collective funds for the bank's many Elus-qualified pen-ion customers. and in Nosember. a mutual fund utilizing the Benchmark futures techniques was registered with the &c. This latest development opens new markets to us-retail and institutional clients who may not base any trust or agency relationship with us. Knowledge gained from desetoping ; ,m; , the Benchmark Strategies and from restructuring the bank's own l I 8 . , y dx ime-iment portii>lio in 1979 led. in 1982, to our deselopmg a money NJl i T~ market mutual fund which we offered to our clients on a " private l Ag 1 . label" basis. In 1985. we assumed the management of this fund and Eiba l h $ tildt of a nt'w ta\-e\t'mpt fund. \larketkng to e%ksIing cuslomers. we .q,p., * .*w ApM.{y built the a-ets of these two mutual funds to more than $1 billion at I h,h 3 ear-end 1986. We beliese that bank-managed mutual funds offer 2 N t*\eitlng pott *ntha an Nial we are better poskIioned tban most otber , gw.. * * ..r7M ,' g*Vl hthk- to rapitalize on this opportunity. 'll' ** ! "T i Recognizing that partnerships with i Qr ~fOMF'9 MOM out-ide money managers could sastly and quickly iniprme and bmaden g our equity management sehicles. we embarked in 1985 on a program '/{% .t# $ - J of e tablishing joint sentures with outside money managers who possess y[ 5 -preialized skills and experience. The first was with Edinburgh Rmd l 6&4 %-): O \ tanagers IEdinburgh. Scotlan h to offer limited partnerships imesting s$ ni -torks of emerging Japane-e companies. Edinburgh Fund 11anagers " '
- has been ime-ting in Japan for more than 15 years, and the firm's knowledge of thi- market produced a 96% total return to investors in the-e limited partnerships in the first year of operation.
1 In 1986 we were the first commetrial hank in the countr\ to offer our own series of multiple-managed collec-In I ,'/ #/ >? . i [,f r, , ^ 5",39< ,. ~
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y Investments m the of Edinburgh, Scot-equities cf emerpng land. *hw knowledge Japanne companien of the Japanene mare am offend to 411 kets helped produce minpon Trust chents a total return of %"n throagh a limited in the partnenhap's parinenhip. The tint year of operation. underlying portfohn is managed in Edin. burgh Fund Managen ll l J n 4 firms, our corporate counsel (which has developed an excellent _. reputation for a command of these complex transactionstand industrv J 3 ' packagers of leveraged lease investments, we base become one of only M a few institutions in the countn that has the ability to help stmeture-and close multimillion-dollar transactions almost on demand. As , a result..we base participated in well over half of all equipment leasing trusts which have closed in the United States oser the past several years, serving as trustee for assets exceeding S13 billion at year-end 1986. Nearly every major domestic airline, the two largest airframe manufacturers and producers and buyers of satellites, drilling rigs, cargo vessels and railroad and automotive rolling stock ieven military transport and assault ships) are numbered ] among our clients. Many foreign countries, including the People's q Republic of China, are leasing equipment for which we play a fiduciary A y role. Despite recent changes in the Internal Revenue Code, we an-e- ticipate a strong, continuing demand by private industry for imagina- - ,l tise and cost-effective ;ehicles to fmance major capital assets. We
- l. heliese Wilmington Trust will continue t'o attract a major portion of this
[ . business in (iew of our national reputation for speed knowledge,
- f h 'titise prices and solving client problems.
I NW .} , ?- ore and more frequently, ,, jh igton Trust is called upon to sene as trustee in highly special-ned, comphrated and sometimes totally new fmancial situations. g 4 ;'i il One such specialty, formulating and carrying out corporate debt re- K;~- ' .} f'Y L -iructuring or liquidating trusts, started in 1979 when some 275 i ., ! lenders to Chrysler Financial Corporation required the services of I a trustee in order to acquire a perfected security interest in the fman. Chrysler Corporation's cial collateral of the company in exchange for restructured loan agree. ' curwne financial health ( can be traced, at least ; ments. We beliese we earned a national reputation for our skill in in > art,io an unusual , de restructuring for handling this enormously complex trusteeship, as evidenced by our which Rilmington Trust.erveda.iru.iec. hasing been chosen siibsequentiv to serve in similar capacities for
- Our competent han-dli.ng of.uch tru.iec.
other corporate gianth such as International }{arvester. Braniff Airlines, ships has led to our serving the crediton Warner Communications and Mapey Ferguson, to name a few. of many other co m. rate giante in simi ar capacities. IJ I 9 *s g s I snciu 5:Temoss 4 e ^ - _ _ _ _ = : , e -- O_. 't 4 +* M % % N 4 5 6 (* g . O , 9 j .. l , f. > w __ _ f e p , J- ., l - ~ *~ i- w . . , . . . . . .N , g ~ [ .. \ , i - s , .-a , 9 * - I h ~~A" N e Q * = C. _ .w. t . a - F - .
- p. . . . ~ . . . . . _
\ L' ~ #*, , '"iF f I 4 emus ==. -w--_----__ kinnthear. Illot^e retent. -[iet ial -itu-atisan Itaw illsolst9l -ersilip a- -tl-t:Mban af n! 8 0 if u-tee bar t'ollatera!i/etl pretencil -to. L i--uc- anni collaterahied nn.rtgage obligation o.m o tru-t , llerati-v of IIelaware las law- wIlfrh fauer the rieatiori of inge-t-tucht holding rotnpanie- and our prior insohetnent with the station'- largest itntlt rwlitt'I' . wt* llast' heen Ollo*t'll lit'I[uellt!) lo aCl a- CLlw lotlian and/or tru-tee liar these -pecial -erurities. At year-end, we were -ening as owner trustee for nnere than 521 hillion in ato inues. and we look thrwant to adding another S20 billion of *irnilar arret, when a noinber of "-helf-repi-tered" i -ne- close. In addition. we base recenth been cho-en to -ene as trustee far a 51 billion -helf-registered l i--ue of General % tor- Acceptance Corporation autornobile receis-able . the large-t ringle trust of this kind eser conceised. We betine Wilinington Tru, t wiH continue to benefit fnan the proliferation of innosathe new imestrnent schirles herau-e of our advantageous h. cation in I)elaware and he. cause we base clearly deinonstrated our ability to carn out a significant ) I role in helping to bring the-e i--ne, io maikei and in adinini-ter thern ; l , aflel tllt') (*ltimt*. I i .L urh of the sucren, that we c p mit.<, s., u, g,oa,u , i ha-..d ._ ,ht. heu.4 ,ha, .t _ _,i_ to gnm our tru-t and ime-tment management hu-iness at unurnally att raetne
- ate . ()ur staf f of fet
- contitulit3. espertise. e\peIIence.
..ompo,cr-tiii ena a highiescieipe,eneieiieniionihetefien esceca tho-e of our competitor . Our opportunity to interact w.th our large } eheni ha,e heip- u ,ie iarniif 3qui <ti3 new opperiuniiie- en uhich e' he rall Capitali7t'. $11d ht" lteliese bl!IlillKlotlIrti-l's location ill Ilclaware and unique po-ition in ine trust indu-try will enable it to . b hkI k I q I h k k kk ilo not enjos -imilar adsantages. il 1, l i n.h@M i w% c. 4
- l l
1 ta. l a . . 1 Finaneirl Review i l I l 111 \lanagentent'- \nal) i- { JJ (i.n . lulateel . tatement of (2.n liin.n Jf ikni olulated platenient of Ins orne . Ji 1.onsoli< late <I Stateflient ol 1.liange-sti .stot klHelfler** Eiluity
- j Ji (i.n oli<lateil plateni. nt ..I e :hanvr-
{ in financial l'o-ition Je s. ., e. . . . < 3.,,.. . i ,, ia, . i n ,..i,i. . .a .* talentients .f / Heport of ltuleperuleti, \uilitor- .f.; pelecteil finane ial Hati.,- and .* tati* tic. ID f int **Irar .k.fial)-in of l.af fillig- atpl (i n ohdateil piaternent of t i n.in n.n t l~ i I Menagement's Analysis i. Suturnar) Net interest Eaming Assets l 1986 wa, an eseellent near for InC0me Un D#ons. Ca# 1 Wilmington Tru-t. Net income Un "*"8. t8* **'* 888'8' equivalent basis) l reai hed a recon! 531.0 million. or $1.95 a -hare, up 269 mer the :4 827.0 million, or e 1.58 a , hare. , t earned in 1985. ,, g Net interest income benefited frorn , f reconi growth of earning a3-ets. I, ,. particularly loan ainl -hort-teirn ,j; tas-esempt insestment . The impr"'"- se ineill Iil flottinterent inroine wam ate tributed largely to an increase in Jgg 'G fee- generated from llie coinpati)'n a--ei management artisities. Th" a#' rotnpany al-o henefited froni effectise . . ?, l runtnd of nonintere-t loperatings y ,. e espen r during the 3 ear. " Unilitainlity-a- mea ured by the "N - return earned on aserage a,-ets and aserage stockhohler/ equit)~ (, reached reconi lesel- in 1986. tun . wa- 1.37G while som reached y 21.819. hoth of which rank Wil-niington Trust ainong the highe t- , g } performing hanks in the nation. y { 4 y gn N 88 M 86 E l I I 's .%nal)ein of Earning, strong in 1986. resullung it a 12119 { Net ittletent inrotne ton a tas- increase in much loati originatioti . ,i equisalent hanis-which adju-ts During 1986, the hank -ohl '92 nontasahle interret iticome to a lull) million of re-idential mortgage- in ' lasahle ha-i-l for the year amounted the werondan snarket- in unler to to $10.~.9 tuillion, up 169 mer maintain an appropriate weightina ol 1985. The impnaement wa, attrib- re,idential mortgage loan with ie- {i uted to tlie growth of carning ammets, spect in the enlige porthdio. rather than to an imprmement in the The aserage lesel of one-linent in ' net intrie-t margin. The aserage lesel short-tenn tas-exempt hond- wa-of earning a- et- grew 26% during increased by Sl90 milhon. ni U69. the sear, wlule pres-ure on interest to take adsantage of unu-nally ant.o - margin -ened to reduce the tas- tise yields usailable in ilu- -ci tor ot ' equisalent net interest siehl-fmm a the market. While the Tas Retonn ' recont 5.009 in 1985 to 1.58% la.-t Act of 1986 eliminate- the tas-year, a&antaged 3.tatus of -urh -renntic-i purcha ed by banko after \ugu-t 7 Strong demainl for loan- lifted the aserage lesel hy $258 million. or 1986, sirtually all of the comp.un'- 219. to a record 51.5 hillion. Escel- ius-esempt ,.eruntie- held ai se.u-lent gnmth wa- reconled in all loan etal were purchased pnor to that i rategoric -cononen ial loan- were date and retained their tas-esempi up 219. con-umer loan increa ed -tatu . The hank will < onimne i.. 159 and mortgage loan- grew 26G. hohl the,e " grandfather d" t.n. The itemand for re,idential mortgage fmancing iand retmancingi remained llt F Loan Portfolio Deposits Reserve for (In Villons. Carly (In Dothons. @ly LDanLegggg awrage basi 5) 84 396 00S!$) (N yer-end) \ '[.! is stj s28 tgp 1 q *9 pgyv 4 <A sen y I, y sA , a: 8N 844 2 DA s.h 8'S s A j L se < .i t .g I .s [ i ' ,Y M- ~- M m woes . cie xss , M V ,v v memanna ws g;.., W 5:e t - esempi ernritie- a- long a the tas. Depo it, on a Daily .berage lla*in ' npiisalent y nebb. retnaisi fasoralde. _ , _ . _ _ _ _ _ . _ . '*lighth more than hall of the lund- 'l"ti""o ""lo 1980 lM I * '" me for the higher lesel of earning l). m,mildepo ib / 8 398,672 9 ~A W.Hn*.' It'n a- et* came f rom a*t im rea e in the g ~ ~ ~ ~ - ~ .nnount of ecrtifie ate of elepo-it i-- s ing- 88,778 E6. I n 31 ned in the national market. The ingen.stchecking 160.384 t re.em 3-i ninpam contmned to enjoy lasonable Wney marLet , 400.547 :llu.h rI aii e to thi unportant *ource of Certitirate- under 1(W).fhk 479.061 Gac231 io inndmg. and increa ed the lesel of hal retail depo-o- WI.wn 13 : .l.128.770 the e large (.D- In $268 million. or 4.crtitirate sluiUNN) and mer 456.342 1HK Do 112 5 l 12'i to 6 ISO nullion. lWal depo-ib S L983.784 61.?, W URU 188. finohng wa al-o pnnided by '" higher lesci of rnstomer depo-it . ' llemaml balance- increa ed S 18 it- re ene for loan lo.- by increa,- iharge nff* umounted to $2.7 milhon. nuthon, or 119. durmg 1480. while in;: the pnni ion fnim earnings from or .189 of the aserage lesel of lo no miere i heanng retad depo-it grew 66 8 nullion in 1983 to $8.3 mdlien onNanding. enmpan d with 91.1 hs il37 unilhin. al o a iIq _ la : 3 ear. \t December 31.1986. the million. or .0W of loan- in 1985. nusea e. re,.cne -lood at 525.0 mdlioA or At December 31.1986. nonaernung In siew of the contmoed trong" L5 tG of hian- outstanding which loan, totaled .92.8 milhon. or .17'< deman i for loan thn.nghout 1480. . ompan with S 14. 4 million. or of loans outstanding w hich compare-the compam runtinned to -en ngthen '.37Q of loan- a scar earher. with $2.2 mdlion, or .16"< of loan-The qualit> of the loan portfolio at the end of IW The compam ha-semained ewellent in 1986. Net .w stan.cm .w. wn ..- Nonintetsst Noninterest tot income per Capital Ircome Expense Employee Generation Rate (inInlllions. (AS 3 pefitnlagt vt (10 th0ysands) { Net inC0 tnt less eXCIUdes Itsylls totalrevenuts !ax. Otviden05 paI085 8 of $8cultltes equhratent net percentagt Of BVt'- fransaCII0ns) Inttft31plu$ 00ft-aft $10Cahoiat'$' interestincorne) equtty) t 1 3 & 1*e wnwest wome E*0mme~ ' arse q ' w: wem 8 gwrmne,cem vuyrt m im foreign loan . and management li;r inuch of the 279 improvement in only 19. Nonemploy ment espen-e-monitor the entire portfolio continu. other noninterest income. The inerall increa ed 174. retim ting an inen a-e ally to asoiil th proportionate) high gain in noninteree.t income re ulted in legal and profe-winnal fee- related ronreniration- of loan within a par- in a lesel of nonintere t resenues to the introduction of new une-ttnent lirular indu-try. relatise to net interest incorne that managernent pnulurt- and other non. Nornntere-t tesenne, reconled wa> the Inghest eser for Willnington recurring item , -trong gain, in 1986. Income from Trust. Income fnim fee- and ronuni-- The compan3', contnil of operatine nonintere-t -ourrew-which includes ion-pnnlucing artisities amounted expennen contributed to reront lesel-tru-t anil une tment management to 809 of net interest income during of pnnluotitity for the compam m leew. unire charge
- on delmsit ar- 1986, which compare
- with 68% in 1986. The net profit margin inhich i.
!, roisun ha i other feen and conuui - i , 1985 and 6~>G in 1984. measured by net income a a perren-nap -grew 279 to a record $~>8.6 Securities gains taken during the tage of the sum of tas-equisalent nel militon, lhe large-t component, tru t year arnounted to SIl3.(X)O or S.02 interedt income and nonintere-t m-j' apd ime tment management feca. per share after tase . During 1985. romel reached 20.79. which com-JJWnecil 269 to $39.1 million. lo-se* realired on the ale of *eruri- pares with margin, of 19.69 ami reflectiny evellent bu ine,. deselop- tien totaled $3.1 million, which 18.7% for 1983 and 1981. re-per- ) ment ndit* and the nere ful intro- penalized earning
- in S.10 per
- hare tisely. %leasured another w.n. ihe
- du %i on of meral new pnnluots. A after taser. company'> pnnlurtisits. a- retlerted f ddd hn 2 d han Ikew and a 159 Noninterest expensen were effer. by net income per employee. re.n hed gain in mrome generated from di - tisely controlled during 1986. rising $20.900 m 1986. w hirh compaie-g rount bn>Lerage artisitie* accounted 139 to $86.0 million. palarien grew with 517,600 in 1985 and 811.800
] 129. reflecting merit increases and in 1981. -elerled addition, to taff while the cost of employment benefit, rose 9 i > Y Stockholder *' Dividerids Paid Common Equlty (%r s':are/ Stock (Inimlhurts 81 (hr ShWC) year end) V I l I V V E par m ace- 0 vr av W y 3 . ..i.s y ,.y m Y v .f.37 e v :; me ; ie*' Ud P The coinpany continneil to Coeurnon . stock Price Itange 3h Quarter tsengthen ilm finattrial entnlitnin _ _ ilutnig the year. -\ugntenteil by a . _ . . 1986 'e n, onl sate of rapital generatnin. tjuarter Ibgh l e.= lin i. lenil thgh 1.uw D, o+ J to kh.ililes ' reputy seat hed $ 170 l $24 $ 18%, $0.15 _l l' i II o i _' nulhon .it se.u.cen! 14Hei. np 189 ., gg g 3 yp) g, . , ou s Ihe *Ii1 rnillion aerorded a 3 25 20 % .15 1M ii I; svar v.nher, t..qntal adequacy, a' i
- 25 % 19 % .18 19 Ii 1; inea useil in -lui Lin.lderi equih '
plu ihe ie-cne for loan lo- .es a a """""h*'"**""""""I"*""'""""'"'"""'""'"*'"""""'""'"'""""* ,ep..n en. .aa.n,.aion n..n ro,,, en, r. .h., n .or u, n..i en. r. .an...., . i.sa., . a pen efitage of ledal a-*iet>. ham I.t)29 ne. e-. ants vrpre cnt .o hul tran arn..n. al scal-etal, hell alHne that h bkeki i-i on-idereil a lequate by the regula. The company' pnihtability en. Thniughout 1486. the -to. L "I lon agent ir . abled the lloani of I)irectors, in Octo- u ti At continucil to trade well abou 'lhe return earned on aserage a-- her. to itarrea-e the regular quarterly its In'ok salue. The clo-ing pn. " "n -ci dunng the year equaleil 1.379. ra h ilisidend rate by 200 to 5.18 Ilecernher 31.1986, wa -2.5 pm up -lighth fnnn 1.369 reporteil hir per hare anni-piit the -tock on a hare, or 238% of it- sear-en.1 h""L 1%. \ct ine.one amounted to a iwo-tor-one ba-i by declaring a salue, t . oni 21.1119 of aserage tock- 1009 tock disi lend. This action hohler ' e tuit3. up inim 20.399 represented the hith -traight year of Irt ort lcd the seat bcIore. ra h disidend increa ie* afMI tbe il.ini 1009 -tork disidend mer 1983. y ) . $ 4 4 _,, ) , 1 9' k9 'pQ'7 .'. ' * ~ ' unruolidated Statement cf Omditi.m Q .? ~ 'l] sl denowton 1 hot C,,mpam vut > ut . oid.m . tfg. o> 1 l Ira y etu art .il o ri its etJ 54. lef t t . 1980- . 1 H3 loMI s MW. Ca h amt ilne to.m lunk- 8'h5J2k. Ikiht - 127.une, ( '] %ncy market a -ri-: t' , - Tnne dve -o at micr< t - - " 9ai ' ,,s. nan J l'r .lcr.J ho. l. J1 . 182.500 2 ,o.000 J. ,( 1 pei oniir- p.n na-cd under . e agreem. 4- to re-ell 196.5id I t .o.o2f i i i1.12 i 't y +\. ( pt her pf f ;, .Jo.i x x i - ~ ] J ,g t. ,j ; , T.nal 377,4!0 _ W l.r.:n ino.72 4 1r . , j , inw tment +. ..rair . i ;y a L ..-;.. Trea n ci 61,b17
- 19 &n2 17.n 17
; ' L.M. g.<.ce:wr it agen. s %.940 7.ui? I To. 7 9 Q /f Nate and municipal 378.244 :9 4.9.41 i u;.no j L r. < " s ) r i /ther , . ~ , . 34.975 o. na 22.37'e /s < Toul i na:Lg 3 dov of s51P..oo2 'm 3! " 14Hri. - 11*, 48 % 1985 an.1 6 i t s.!51.9 M in 1981: 52!$76 4 te..o li 29n.102 t- ' p IJ ed n * , j Gnnmenial U6,5% 5 16.:1o7 toi :" i } \ s %rtsp - Con urn + M.I.71 476.5 % w t.o u 122.4 N to l . 6 :< . t n."io . Ltal - 1,629,363 1. I I T.o'r i i .101.7 6 i [ .'? .{ i -3 . Re en ' r loan to b tun. -e- (24,993) JhM,380 i lo. t 'i. 1.198f,M . I t Toe - I.002.o n , i , j Prendo a'ul e<tdpn ent. net 43,131 1.:. 07 ', Iw" \n rued Jere-i 19,743 , in.mi Ia :n . 5 , j Uther 14,569 l 't.w2 1; wt ( ' Laal a -vi- $2,777.933 v2.328.los -2.o:: .. I * - A . .. .. , . _ _ _. . _ _ . _ . . - . : 1 I U.bilities e ik mand rp. n. t 6M,251 ^ ' ~ ~ s 179.081 - ool. To N and Stockholdm' He M d- ;no-d. at ino o -n t - ' Equity ga.jne 99.789 8 ,' . >, . 1 . '<. air j i ; Ine w-t rhei king '220,268 Dei.h t ! U. . . o W '[, , , %nc. vwket , ._. 432,369 ait.o t9 2. .o u r ,' .1 185,868 pa.Hori I m .a'i Cert _ & <te- amlercl0 U MNi- . , j" , , Lid ~ r,2.18,294 -- t a. iv>3 o 67 eti mi _t 1 .s ~ e 'oanaged li.ibilitic-: a Certificate iHNUx N6 and ...er 295,761 286.20o o . u2 )/ '.,( t Edera! fundi. pon ham , 53,136 22.2(we li tro E ! 5cruritics -old umW 'nyterment. 4 'l < to repurrhw 219,'il8 21:1.187 JIo.MJ t.p. Treuurs emaml " , 55.000 . 51000 li. to l , .i Liai 623,415 57ti.562 tv. I n 4.s rued 'otenN. tasc$ and other eyicn-u 37,859 10.549 11.2'.2 Ute,i pas alA* ~ LM4 ;4.710 1.. tJ 7 Othei 6,439 tem 9 I til Ltal > 2,608.042 2.179.851 1.9 l' .. '.o; i r_ , [ x W *ubordmsteel rapif/ notru t .-.--- , . - - . _ . . . - . ~ _ - - 13.500 t i.od n e plo Lidderi conitt: , Cmnrnon .49 % d 1.(ife ;wr salue h>r "; 1%6 an<k 1985. Us.M par salue for I 14Rh authorieed 1(UM KUkM) hare- 17,55f. H . 6 '.6 Jo. D r e , Capital .surplu, 55,595 5.t 05a 27 oi Retained raroing, %,741 82.183 . -o . u l Ltal 169.891 114.137 12 U"2 To' d wo.inic an? yto, Lhohler/ c pui.s 82,777.933 f 2.328. tod 2.on.Iv .? . ..+ - - %er notes len , earnsoninfalet/ /gnatte tc/ slpermenh l ., n . 3 kit , (. t ,I J f MffMMM&*/ I ' &^\ . _ 'r Consolidated Stzlement of Income 'llilinton: tour Trn,t l'om1utro and .'.ntoorturne~ . lot th. was e nil.~l I tc. renber':ll ,in ib.u.dmio . 1986 l'Wi _ P ra l ' Net laterest Inteir-t.nsiir" "o loan--' $153.277 -i 11.2o1 - I tr.u l i laceme interr-i on mons ina Let a et- , T;me .lcpo-it at intere # 286 f . I 52 l i .ofi Fe.irral lun f- -ol ) 5,950 4.97a o.7;u - *ccuntie- pon ha-cel nnifer ween.cnt I., re-cIl 11,064 Io.I17 12..u i i H i mr - - ,;lo haro- on inw-tment -e nritir-:
- I . . Irra nrs 5,270 1.142 .o.oo l -
l 1 m. gownunent agency 4.254 o. I s 1 - .179
- tate and snunicipal- 22,943 i A.u t 1 y s *,2 tHher 1,089 1. oho Cu 6 Total intere t rewstue 204,_133 - 181.:11l 171io t lirtail elepo it, at inter t 76.529 78.378 71.Tu .
ilanaged lial.ihtic : 1.ertificate $100.000 anal owr 33,411 lo.o l i o/aa Ibderallueul purcha cd 3,0% .l.2.12 1 o73 Scruritie. old nenler agreement, lo repurchase 14.486 l i. i lo . 22. d l t 0. Trea-ury demand 2,050 1.067 0." (Ither boniming, 599 137 i b; N .'.'b'"f$!'".'."l.I f"lbdd.'"."'.-._. _ .~ _ _ _ l.107 u{- L W. lhtal interes espen e _131,188 I lb.165 I I l.:no \ct intere t incuene 72.945 67.H lo norC lbd ion for loan to -e-(8.250) io.Hi n n i1.100- \ct intere-I income after prod, ion for loan lo- r- 64,695 01.080 h IT . Other Inconic . . . _ . _ ,Trn t . uni inw iment management fer- 39.,074 lo.' Mis .'; :1 Sers n e i hare"- on depo,it arrounts 6,002 7. 171 ' l.; ti ' ( Nher operat mg income 13.546 0.047 9.iul svennlie gain do e 1 743 i .t.120, ,t.97n, Total ot her income 81.122 51 3:2 59.365^"~ \et mterent aval other income 12.4,060-wp-.eee.+,.pe--e4,i....e, 101.15A 92.Ano .s'.. .m. .e-.-#.-w Other Expcirme a rie- arul employ ment beneht* 50,768 '6.08:5 thloH \et ocenpanr3 espenac 4,759 L '> 71 1.217 furniture and equipment espen*e 7,046 6.215 ~ oio *tationery aval *upplie- 2.872 2.724 ill A Other operating espen*e 20,572 16.488 14.7;" 'lietal other espen*t> 70.270 hi HN' _ 86.017 Net Incone income lethre income taxes 38, 4 3 27.wm Jo.189 , Applicable meome Iasea 3.999 'MM} l .M i d \et me ome $ 34.044 4 26.9'M - 21. ~.o; Earning- [mr hare $ 1.95 5 1.58 + 1JH I Meighied awrage haren out tanding 17,444 17.122 loElH %er troles la runwlt latr<l_htmnreal 1:nrementa r J l 1 .n l u ) ' ~ ~ CornoliII[te[StatAr' rent o[CithngesUn Stockholders' Equity Kdmingtton Ihtst G>ntpany and Sul><iditirses Common diot k Capitd H tain d </n thormsndo share
- k,suni urplus canung-1984 Halance. Januan i I .1 -- $2t 107
. 82t,.670 S n.138 l Net incorne - - - 21.5n5 Cash disiderni panf-$.14 per -hare - - - i 7.2 Nb Gimmon ntork i, ued under employment beneht plans 31 193 .i4 l - Common twk i- ued in acquisition 17 lin 191 - Write-oilof ev e
- purcha e price of submuliars in accordance with I'Dit regulations - - -
15&il Halance, December 31 8.225 26.4fn 27.705 en.iT8 1985 Net income . 26.'na Ca,.h disidende paid-3.55 per
- hare - - -
W.128: Reduction in par salue - a22.3451 22.345 - 5ttwk disidc td-1004 4.305 4.305 - i t..*ni. Common to< k inued under employment benefit plans 126 287 3.on8 Balance. December 31 H.656 8.6.% 53.058 H2, i H 1986 Net income - - - 34Ait Cash dividends paid-8.63 per share - - - t 10.989) 5t<x L disidend-100% 8,757 8,757 - i8.757) Gnnrnon stock ini.ued under employment benefit plan
- 142 142 2.537 Balance. December 31 17.555 $ l7.555 $55.595 596.711 See nootes to cunanhdated hnanrud <tatements i
n s i' i l f.. , _ . . ~ . . . _ . . . _. Consolidated Ststement of Chxnges in Financial Po:ition Y I}llit!!;!f t <!! [rfl %I $.t t!!!lKl!!,1 tillll billni'll if5h a e ,- - p: , , Iact emi.cr .Il 'in rLminndo . - 1986 1985 toMi - Financial operation-: Heoources Were \et income s 34,044 3 23,99g. 5 giais Provided by ' Nonra h charge--Prmi-ion for (Applied to) d"P'"' 'd' i"" I"d " I"""' - .._ j.d!!!"]'.""".tyr,__ 14,335 9,n ]9 3,7g7 Tot.d 48.379 36.017 27.222 Ca-h thsidend* paid (10.989: 49.128i 17.3 a n Ltal _ 37.390 27.189 3 U 822 !)epo it, and other fmancing m. tititie : Deposit
- Demand 216.267 #l21.172i 202. 73<.
Saungs 12.418 2.3M . e .." I o ' Wney market 78.330 87 722 l!.o! I intere-t rherking accounts 63.627 2H.eo5 12.109-Certdicate under sitMUNN) 19.972 29.H95 n.1 w Certi6cate* Sl'HUNN) and mer 9.552 188.877 i 1.72 t Etal ~ 400.166 216.snl t t 2. .17 federal l'und* purcha-ed und eruritie- sold under agreements to repun ha*e 37.301 1l 7 une m U.S. Trea un demarul - 9.539 i ws. %te, pasable 24 i317e en, ,. 99 malmrdinated < apital noten (13.4001 # 2.2t W b 2.200 G mmon *tock and _ < apital wurplu*_ . _ . _ 2.679 :1.29; i. t c Total 426,770 226.119 Ju.3.; Other: Ca*h and ilue froen hanks (13.033) 655.703i > in2 >i Premi*e* and equipment, net (4.546) 83.. win . ! .nm - \cerued income and other a etr. (2.616 2.037 n. vn. Arrrued intere t payable and other liabilitie. (2.295) isN . 6. 6 - Esre** of purchawe 1.rire of oh-idian mer a *et. acquired - - N Total (22.4906 i36.323i R 22."2 ii Total $441.670 6197.285 923< t it. 6 To Fund increases Tnne deposita at miere i s - s tT73 x) 9 5.r. iw., in Earning Anects federal funds u,hl and *ecurities purchased under agreement
- to rewell 142.534 t 157.3486 f r> v.3 Insentment *ecurities 85.031 138.843 i I, n*. .
loan *,nel 214.105 313.2w) 23toan ! Other money market in trument*. - 420.tWW h 3Une Total $441.670 s197.2H5 923o tra .%ee noles to enruoluleted tinam ml ,larement.s l l e-l 3- ) ~ c Notes to C$nsolidated Fintncial Stxtementa ' R1/mington Tru<t Compans and Subddhsries ;l e ' Note li . The accounting and reporting policie, of Wilmington Tru-t Company and suh*idiarie conform - Summary of ~ to generally ace'epted accounting principle- and practice
- within the banking indu-tn.
'b #""I ' famoolidation The con-olidated financial tatements include the accounts of Wilmington Trust Company and p it4 -ub-idiaries after elimination of material ititercompan) halances and transactions $ccurities Inse-tnient -ecurities are *tated at co,1 adjusted tier amortization of premium and accretion of di* count. Insestment equit) *ecurities are tated at the lower of co-t or market. The gain or . loss recognized on the sale of an insestment securit3i - ha+ed on the adjusted co-t of the pe-b cific certificate. Included within the ime-tment portfolio are certain ecurities held fi>r future deliten under contractual agr, ement. The ewe of total principal receipt
- upon delisen mer the original cost of these securities is recognized as interest resenue on a lesel->iehl ha i mer the life of the contract.
loane Interest on commercial, mortgage and certain t> pes of consumer loans is accrued and recog-nized at income based upon the principal amount outstanding. The accrual of interest i-ih-- continued where a reasonable doubt esi ts as to the collectibility ofintere t. Reserve for lean Ionen The resene for loan lones i* maintained at a lesel considered adequate to pnnide fi>r potential loan lo-se*. llanagement. in determining the adequacy of the resene for loan fore . a- well as the appropriate prosision for loan to--er. takes into consideration the re uh* of internal re. siew procedures, prior loan lo-s experience. an anes-ment of the effect of current and antico paled future economic conditions on the loan portfolio and examinations conducted by hank supenison authorities. Premises and Equipment Premi-es and equipment are tated at cost le** accumulated depreciation and amorti/ation. Depreciation expense is computed on the straight-line basis iner the estimated u-efnl life of the asset. Imprmementv are capitalized and amortized user their useful lises. Gains or to--r-on dispositions of property and equipment are included in income a* realired. Pension Plan The pension plan i, a noncontributon defined henefit plan and ciner ohstantially all empim-ees. Costs of the plan are actuarily determined by the projected unit credit method. Prior to 1985 the frozen entn age normal method was u ed. These co t* include amortization of lo"r of the prior senice costs and are funded as accrued. Income Taxes \ mount
- pnnided for income taxes are based on income reported for financial statement pur-pee, rather than amounts currently payable under tax laws. Deferred income taxes are pro-sided for timing differences between the period in which certain income and expen-e item arr recognized for financial reporting purpmes and the period in which they affect tasable income.
Insestment tax credits on leseraged lease, are reconled as a reduction in the pnni-ion for j federal income taxes mer the lises of the related lea-es. The company and its suh idiarie . except for Brandywine Life in#urance Company and Rodney Square Ime-tors. L P.. tile a con-solidated federal income tax return. Brandywine 1.ife imurance Company files a separate l return, and Rodney Square imestor . L.P.. a 507c owned partnership. file
- a eparate return.
Truat and Investment Management Fece Trust income is recognized when payments are receised except fier certain amount
- which are
!. reconled on the accrual basis. Reconting income on a cash basis doe
- not base a material effect on net income.
i Per.Sharc Data I?.arnings per share are based on the weighted aserage number of roare out tanding dunng each year. after gising retroactive effect for the 1007c itock disidends declared on October 16 1986 and July 18.1985 and fier sharer inued to acquire $1anland 8 tate Bank. All per harr amount > hase heen adjusted for the 1004 stock disidends. The par value per share wa re-duced fmm $6.25 to $1.00 effectise April 18. 1985. Jh hp l.< D f .( +w.e+h.We..-.% Note 2: . Inveetenesat -' ' The luu,k salue and market salue of reunties. by matunt) distnbution at ,- Dee mh e r 31. are as - . h>llow% iin thinottndsl: $cesarities *+=sene- g. ~ ~ - I.986 ' - gyg , . jyg g . lb L 11 ark t m,..( \latirring 1
- alue gg,,g,,, g ,, ,g g,j,,,
blor ulor . . . ulu,. - -' , A.. Lp. Trea*nn reuritie-f A. Mithin i year , 8 2,522 .8 2.525 6 t 2.u t2 . \ tier l but within 5 teari. 59.255 $ 12 un - $ H.2 u y a. 52, 60.807 to,in 20,2n; Titer 5 but within 10 yeara 40 . ;y;; e,, ;y ,,,, ( . 40 7.889 7,37; \fter 10 sear * ' - - y ng;. \g;;- 10.138 8;951-10.825 - .3o: Total 61,817 63,372 19.182 68.659 7,7.a g ;,,au" . 15 gsernment agencie : l = Within ! 6 ear 3,046 3,092 \fter 1 but within 5' year * , 4.100 - 4,170 200 8.234 292 - g. ,o -j - 4.151 ;,i s ,,,; n 4fler 5 but uithin 10 pears 6.343 6.052 6.425 < n;u \fter 10 ) ear. 39,794 39,642 62.297 58.401 45.521 i l .W : Total 46,940 46,904 73.074 68.806 79,7 py o g,yy,1 plate and municil sal *; Mithin1 year 299,207 299,713 229.884 230.089 69.119 ini u. After i but within 5 years 8.263 8.341 7.886 7.635 1.082 t e.on After 5 but within 10 years 34,002 33,339 21.305 21.767 15.803 12.42; \ iter 10 year. 36,772 32,471 42.8 % 32.191 19.152 32m w. Total ' 378,2C, 373,864 308.931 291.682 138.154 iL7.905 Other: Mithin i 3 ear - - - - 250 2 17-After i but within 5 sear * - - - - - - \fier 5 but within 10 years - - - - 978 ali After 10 sear. 34,975 34.762 9.158 8.401 21.151- 15.' n ? . Total 34,975 34,762 9.158 8.401 22.379 . 17.0 a Total 8521,976 $318,902 $436.915 $417.548 $298.In2 42 1.o h Securities with an aggregate book salue of $161,636.627 at December 31,1986 were pledged to secure deposits and other commitments, including U.S. gosernment securities aggregating 56,747,756 held under contracts for future delisery at p letermined dates through 1991. The-- *ecurities are stated at their respectise book values for r . poses of reporting market value . Securities held under these contracts are reflected acconting to their respectise future delisen - date* in the abuse maturitv distribution. Management han established an allowance for securities losses in the amount of $1.971.136. which relates to the bhington Public Power Supply Spiem bonds. This allowance reduce, the book tatue of the state and municipal securities. Other securities at December 31,1986' include marketable equity securities with an aggregate cost of $22,506.835 and an aggregate market value of $22.191.097-At December 31,1986, the bank has included in state and municipal securities issues of oix states which were in cAces* of ten percent of 6 stockholders' equity. Management consider > such securities to be of investment grade. 1 Ikk \larkei
- l. la.*ue 6alue jalu-l- California $33,$N)JNN) $33.8A lo.i n 40 D Colorado 35.102.370 35.101.H80 l llelaware 24,462.027 21.I19.71; i
Illinoi. 31.995.838 31.966.975 Iouisiana 28.300.000 28. la n U n n a Tesas 61.020.829 6 u,u. nn l l l .J.* _a - _ _ _ - . _ - _ _ . _ _ - _ - - - - _ - - - . . _ - - - _ _ _ _- > - ~ ~ . - h s4. mh. I nfl=*a ut si.'t h itp.p. ,d f,gts4 fir IFf m
- E
~~~ Note 3: - The f dlowing in an analy*i , of the re-erse for loan lo-4e, tin thonannt/4n ileserve for - , loan [meecs ' . 1986 19H; loHJ llalance januari I 819.425 915.7nr. 91 L7"! ~ l'rm i-ion i harged Io operatinn- 8.250 $$wi l[ inn Retmene, ._.... ~_ - a. - - 1.174 .1.717 1 i lo 9.424 n.517 1.1 19 Chargradf* . . (3.866: ' i2.79He ..t.n toi . Italarn-e. December 31 $24.983 410.121
- t 5.Te v, Nonaccruing loan 8 were S2.764.892. $2.'207.826 arul S2.603.509 at December 31.198ti. 1985 arul 198 8. respectively. Ivan> are generally placed on a nonaccrual status after they hase be-come 90 day
- past due. A nonaccruing loan is not necer*arily deemed to be uncollectible,
, Note 4: A stimmarv of premise
- and equipment, at December 31. is as follows ein thouxnnhn Premises and - _ . . _ _ . _ .
Equipment ; 19 % 1981 lA l.and 8 3.964 $ :1.924 .'s '. i fludilings, and imprmement,. 38.732 :17.H7-l 17.2 to l'nrniture and equipment 22.342 ..!n.451 210.i,J 65.038 62. ~ lo o t . 7n.' \crumulated depreciation (21.907) # 2n.n:li il7 a m. Premi e and espaipment. net $43.131 912.t>T5 -t:.~~ Depreciation espen-e 8 4.090 8 4.5ti6 - 1.2 h , llental espense under real property lea-es used ihr banking purposes was S813.808. -471.02l atul 5631.924 for 1986.1985 and 1984. respectiselv. In addition. there are a ntimber of oliligation- unde r e qtiipme tit le insisig arrange tiie nt . Il st- i ing 1986.1985 and 1981, the rental pay menta under the e lease
- were S t.910.351.
S t.326.578 and S1.011.097. respectively. Certain leases contain renewal optiona calling bo increased rentals at renewal and escalation clauses corre-ponding with increa .ed real e tate lasen and'other operating expensen. Minimum rental
- under noncancellable lease- for real pinp.
erts and equipment are: 1987-$2.763.782: 1988-s l.813.291: 1989-S93 8.623: 1990-S i 12. t il: 1991-5118.671: 1992 and thereaf ter-S i 16.2 40. uI e a 4 I 1 l l 28 '? a '<l. Note 5i- - Employee
- tock Purcha-e Plan Employment l'nder the Emplosee ' to.1 Pun ha-e I'lan. -uh tantiallf all employer may elect to partie ipate Benent Plans .at the beginning of the plan 3rar through pas n ll deduction, and may terminate parti. ipJti..n at
,. any time. The prire per -hare i- the lower'of.859 of the fair market salue at time ..f chinon in !' partit ipate or at the espl.nl the plan year, which is \las 31. Information with te-pect_id the plLm ; t- a .lidlow-: 'Itare re crseil for f uture 'ul .nphon- l 'o, l' -ub enpuon-- - - - -out .tandmg per -ir,e. Balance. januars 1.1981 . 226.956 in2.188 - - ;- pub criptiona enternl into on June 1.1981 i lnM.Olb inh.n l 2 -'In Cancellation
- dunne PHI ~6.42n in.42i h i '7. ~. i n phare i- uni durmg Umi - e inn.274., ;--
Halance. l)ceember AL 1981 125.856 in3.ao l - ~m pub rnption- entered mio on June 1.14M ' 672.925 72.425 ;I JT Cancellatn.n* during 140 8.f m i t.nt a n 1 t ai te no Share iwned during 190- - a101 lHHi ~1 Halance. Dei ember 'tI. IOM 57.520 70.1 in h ai-Appropriation ihering 1980 300.000 - - pub-cription -entered into on June 1.1984 <51.658) 51.658 19.87 Cancellation
- during 1986 2.693 t 2.693) 11.27-23.00 phare- i ued during 1984 -
169.030) I1.27 .. . . ~ Halance. Det ember 31.1986 308.555 50.075 23.no . Pension Plan - The Wilmington Trust Prn ion Plan i- a noncontributot) define I henefit plan cowrme ,a,-on. tially all emplo3ee- of the rompany and it, subsidiaries. Pension expenseqincomet rh,n cd t.. operation- wa- 9 78.62 D. 9253.953 and S2.395.378 in 1986,1985 and 1981. re-p... wh An actuarial suintnary of plan benefit, at January I is as tidlows fin thoustuuhr: 1986 19ni :o . 2 Net a *ct asailalile for benetit- $37.874 _ v 12.'l2n 29 " Present salue of ai rumulated benetit.: \e*ted $17.455 - I t..M 11 "2 \ome led 1.816 1,t e l i 1J $19.271 v l8.n ta Jo no * ' bumed rate of return on plan a--et- 8.0% R W, 4 During 1985. the actuarial co-t method u ed to deterrnine pension expense wa i hanged in.m the froren entry age method to the projerted unit credit method. In addition. the a--omed v.it. of return rose from 7G to 89. while the arnmed rate of salarv increase ne e from vi to I'i . Ilad all these change been effes tiw for 1984. the net income would haw increased hs $1.159.000. or 5.07 per -hare in 1981. Poet.Hetirement Health Care and Life In.urance Benefit. In addition to prosiding pen-ion benefits. Wilmington Trust Company and it, -ub-idiarie- pn.. side certain health care ami life insurance benefits for retired employees. Sub-tantialh all ..t the bankk employees may become eligible thr those benefits if they reach nonnal retimment age while working for the company. Those and similar benefita for actiw employer- are pn.. sided thn ugh an in-urance company whose premiums are based on the benefit, paid donna the year. The bank recognize the cost of providing those benefit, by expensing the annual m. ,urance premium . which were 82.832,581. $3.131.867 and $2.279.616 for 198tt 1985 and 1981. re pectiwly. The co- of tho-e lienefa, for 110 retiree- i not eparable in,m the co-i oi pnniding benefit for the 1.139 artiw emph yee . J. , %% . me . . 4.ae..a h. ..o., . a i ~.,-.u . 4t ock Option Plan Under the Wilmington Trust Company stock option Plan. adopted in April 1983.1.600.ot x) -hares of common , lock hase been resened for 'i>>uance to officerw and other key employees pursuant to the esercise of incentite arid nonstatuton ,tock option *. The options espire 10 years from date of grant and shall not be at a price les thari 100% of the fair market salue of the tock on the date of the grant. The plan al-o prosides for the di cretionan grant of stot k apprrriation rights in conjunction with the non*tatutory optivm.. which entitle the hohler to aurrentler the option atid tereise cernmon slot k or cash for the difference between the eserci-e price and the fair market salue of the -tock at date of eserci-e, Of the non-tatulon option-granted in 198 8.1985 and 1986. 31.(XX). 10.000 and 9.106. respectively, were granted with ,tock appreciation right*. During 1986. 20.000 appreciation rights base been eserci ed.
- hare. %notatutun Inienuse awlable opnon. ..piinn- l'r o ,
for grant uui-tan hng oui. tan bng per -har.- Italance. january 1.1981 871.2Hn tin U N N) *?H.72n - 6.72 Options granted during 1981 s201.2 NH 62.4 N N) 201.2no H.n2 Options eser imed dunng 198 4 - t 6.t N Nh i lo.ta h o. ?2 ! italance. Deretnber 31.198 I 6nH.nHO 15HJ N W1 S in.26n t. 72-H H2 Options granted during 1985 13ni.72Hi HOAN N) 225.728 11 H.' - l 1.2 *> Option eserci*ed cancelled during 1985 - iln2JNWn illi 22Hi o. 72 - H. H2 Balante. December 31.1985 .in2.152 530J N N) 301.76n r 72-I A.2; Option granted dunng 1986 120.402 18.812 101.500 21.50-21.63 Option esercised!rancelled durmg 1986 - - - (40,000) (155.040) 6.72-13.25 Balance. December 31.1980 181.950 414.812 448.310 6. 2-21.63 Eserti ahle. December 31.1986 396.000 316.720 6.72-13.25 Stock Owner hip Plan The Wilmington Trust 8tock Ownership Plan is a noncontributon d-lined contribution plan effectise Januan 1.1984 for the sole purpose of holding in trust Wilmington Trust Compans common .-tock or funda to purchase such -hares of comnion st<.., L for substantially all empimee-of the company and its sub-idiaries. The bank has agreed to contribute funds equal to one half of one percent of eligible employee total compen ation per year. The amounts contributnl to the plan were $157.715. S153.971 and $138.810 in 1986,1985 and 1981. respertisely. Thrift Sasings Plan I)oring 1985. the bank e,tablished the Wilmington Trust Thrift Sasing, Plan. which emer- all l full time employees who elect to participate in the plan. Eligible emp ayees may contnbute (nnn 1% to 10% of their annual base pay. The first 6% of each employee', pay i eligible for filatching contributions from the bank of S.50 on each S t.00. The amounts contributed to the pian wert* h6I9.321 alid 8592.953. in 1986 and 1985. respeelisel). h Y Note 6: A +unnnan of managed habihtie . at fleremher 31. i a* follow- e m thonumdu Managed Liabilities '" " " " ' ' ' I rn iti. .u..- F,,ler .,1 .l. :, "m i. le r b.. - m + 18 H.i n a s fund- aerremera- i" 1. re;. il __ . _ . . _ _ _ . '""I""T 3""' ha rd - - .~ rri o n. ha-
- r. -
luth llalant e at Deretnher .il $ 295.761 8 53.136 $219.518 $ 55.m M) Reighted aserage intere-I rate at balance heet date 6.6% 26.6% h.6% 9.0% \latirnuni arnount out-taliding at an,s inunth-evid $636.905 $ 139.309 3250.372 355 oiM) \ppnaisnate aserage annount outstanding storn' ig the period $456.342 3 43 213 $213.2 40 $29.69 4 Reighted aserage intere-t rate for aserage arnount-out tanding durmg the period 7.3% 7.0% 6.8% h 99 191G . llalance at Decernher .'il 628n.2n9 $ 22.2nn $213. i $7 -; , non %eighted aserage interent rate at halance sheet date 8. .l4 ln. 5% 3 - y, \latimuni amount oublanding at an) month-end -314. fin 4 $ 19.144 32 ps. l.$2 , , noo Tpprugirnate aserage arnount uutatariding durtrig the period s l H8..G $ 39.9 47 spqu[l -;; ,c - Weighted aserage intere t rate for aserage aniounte oubtanding during the period 8.59 8.1 % 7.oq e. lWl4 llalance at Decernher Al i 97.M2 $ 15. 470 521o.872 n. ii. ! Weighted aserage interest rate at balance -heet date 't 4% 0.29 8ry p \latiriliten artioutit out-tantling Jt aris month-end 9118. l lo 9 57.070 -2in.t c 7 ;,ini \pponirnate aserage arnount uut tanding during the period 9 97.703 $ 26M93 4224.429 u.;oo EPighted aserage interest rate for aserage arnount-out tanihng during the period in. lq 10.39 to on , F'ederal fund 3 purcha ed generalls mature the da) following the date of purcha-e. wlule -,, mi. tien sohl under agreements to repurchase generally mature within thirty dap from the sarino-date, of-ale. Weighted aserage intere-t rate were determined by using actual inteir-t rate-and weighting them again-t their re-pertise principal dollar amounts. U.S. Trea-un .lernand notes are callable at the option of the l'.S. Trea urt. Note 7: On December 23.1976. Wibnington Trust Company issued, at par. Wc subordinated capital Subordinated note
- in the amount of $20.(HXUXX) repayable as to principal $2.200.0(NJ annually conunene-Debt and ing December I.1983. with a final payment of $2.100.000 in December 1991. On lle< ember Notes Payable 1.1986, and at the option of the bank, the principal plus a premium of 2.5Mc wa- prepaid m its entirety.
Wilmington Tru t t hmpany ha- iibtaine d a S500.000.15-year tiote from the llelaware -t.iir Housing Authority. Annual pay ments of principal and interest are due on \ larch 16 and . ep-tember 15 of each year at a net ir erest cost of 7.54. This note or any portion therent -h.dl be subject to prepay ment on September 15,1989 or any interest payment date thereafter. l 1 ll s .w. .. . o ,- . n. m. , h ,, ,,....; a. ) u...m-, - . .19-, - - - - .m- 4 , .- - Rodney Sjuare lniestor . [..P. ha- obtained a s 1.tHN).f NN). 20-3 ear loan from the liepart-ment'of Ilou ing and Urban 1)eselopment uniler the t om program for financing of the \\ilnnng-ton Trn i Center. \nnual pay meni- of piincipal and intere-t are due on \ larch I of each3car in the amonnt of s200.tHM) The loan agn.ement aleo pmsider for additional intere- payment-heginning \ larch I.199.3. \latmilie- of long-term ileht out-tamling. at 1)ccember 31.1980. are rin r/nmsundo: ecu .,n l . 1987 1988 1980 Pion P r si - throwi. i ' % c- pa3able +2n? +211 5223 . +2:t2 -tat -2.o7 ; Note 8: \ reconciliation of the statutory income tas at a 169 rate to the income tas espen-e ini hided income in the -tatement of income i- a follow- tin thonsundsit h es _ _ _ _ _ . . . 1986 Iox > t"::1 income before income tase- $38.043 + 27. Hun ' -lo l ;9 income tas at -iatuton rate of 169 17.500 ll.Rt3 12.1:'; Tas effect of tas-exempt resenue (13 967) il2.1221 70-Tas treiht. (1976 72.0 .o o. Ntate fasem, net of Irileral las I,eliefel 790 000 ~; i i t)ther (127) iHls J :o Total inoome taxe- $ 3.999 + onn - Io:1 Taxe- currently payable 5 2.004 - 2.0 17 - e n: 1)eferred lederal tase- ihenehu 1,995 i1.7 17: i av Total income case- $ 3.999 + oon - i,t Tase ihenehti fn.m ei nritie- g.nn- slo- c > $ 202 'il.1tm - ; 'i The components of the deferred federal tase, tbenehtsi re-uiting from net liming ditlen n. - are as follows fin thousandst: 1986 198 > '1 Ite ene for loan lo c- $(2.1111 f i2.Jo7s - ;"I - Ineraged lea e. (616) i121i 2. n \utomobile and rapital lea-e- 834 Hoo oi
- tock apprer:ation right. (320) inTJi .l'.
hne-Iment espen e 1.758 627 Pnni ion due to 1986 Tas Reform \. t 1.658 -- - Other 792 120
- 1. '.
Deferred federal tase- abenchu - $ 1.995 4it. 17e !."Jo' Note 9: In the normal course of hu,ine , there are sarious commitments and contingent liabihto - ooi. Commitments tanding which are not teflected in the financial >tatement>. \lanagement doe
- tint anticipate End Contingent that am material loss will re-ult from these transactions.
Liabilities \t f)ecernher 31.1986. outstatuling stimdby letters of credit i *ued by the hank loialed $37.8.39.626. In addition, the hank is enntingently liable for standby letters of credit tolahn 56.638.983 i*-ued on its hehalf by other domestic hanks. e i il 4 L l Note 10: .llm aledn 3 1., i..n .lis nl..n,j , j;nni,;,3 l8s Ilie j ef. s i-hill = 4,l l)el.thair' !.4% l.) . , Dividend .lHewhi.h u..p,i,e l ,ina;,g,.n ,n,,,,, .i . lIcl. t " '5e, l p ifl Restriction
- ainnunt. entrenih s l ..>.i >.in ni, - ,, ,, , ,n P,n an onnt eilual to the ennonon to, L i
i
- Note 11: \ -unun.n > ni tile nuan<liteil .piarterk re-nii ..I
~ Consolidated 11.1% i a- l' li.,u.,:n oI".'."i'""' '"' " ' ' " " ' "' "' ' ""' I "' I I '"' '"" ' l " r Quarterly Results of Operatione (Unaudited) 1986 4 , # /n shou..and.i . to Juneto \1 er. lie. . 41. _.._..3a. . . . _ . -. 51,_,,,, . . _ _ _ . __ l >,.n .t i , , , , , , ,.,,o w g gI o ,1 ; 1 intere t sewinie $50.623 $51.381 $50.525 $51.644 + pe. m; intere-t espen e 9 h.. lit . t i n. , -i- : ; 32.529 32.617 32.161 33.581 :51.979 29, p a , f g., _ ,. ,u bt intere t inconic 18.094 18.728 18.064 18 063 17. 9 nt iv,.; t i - ,i i n, ;i l' ins i i..n tor io.m lu- c-(1.750) 12.000) (2.250) (2.2501 i2. 9 m n . l ,.m, ,i,,,,,,, ,a,,,, bt miere-t meome af ter prosi ion los loan lo--c- 16.344 16,724 15.814 -15.813 13.nint 13.2tl i,. n 3 . : . Other m ome 16,688 15.455 14.877 12.345 l l .e>71 9.9 56 I t .un .. , bt intere-t anil other menme 33.032 32.179 ' 30.691 28,158 203,79 2,,137 2; D t 21 an Other espen e~ - . 23.301 -. 21.511 20.631 20.574 Jo.e>78 18.o u p er.12 mng Im ome in fore in, ome late-9.731 10.668 10 060 7.584 v..nni 7.11 8.n22 . f. , t \pplicalile income tase- ilienchie (388) 1.371 2.385 631 i1.Tisi ilt9 i.;To 1..;n i bt ine..me $10.119 $ 9.297 $ 7.675 $ 6.953 a ;19 i . lit s n.2s ,e , - .w. l{armng- l r -hare $ .57 $ . >l S .44 $ .40 $ .ti 4 .it - .c - i l l t. Report idErnst & Wldnney, InElependent Atulitors 1 ll To the floard of We haE,Aaidiiied the consolidateil-taternent of cointition of Mihnington Trust Cornpany anil Directors and -ob-idiaries a- of December 31.19Ph.1985 ain! 1981. and the related con +olidated tatement* Stockholder of ot incorne, change, in -tockhohler ' equity aini changes in financial po ition fi>r the year then ) uilmingtonTru t erni, d. Our rumination
- were made in acconlanc e with generally accepted auditing standant-Company l
and, accontingly. included such te t of the accounting reconl- and such other auditing pnice- 1 dure- a we con idered nece ,an in the cin um-tance*. I in unr opinion. the con.olidateil financial statement
- referred to abuse present fairly the con-olidated financial position of Wilmington Tru-t Company aml subsidiaries at December 31.
1986.1985 and 1981, and the con-olidated re ult- of their operations and change,in their financial position for the year 4 then ended. in conformity with generally accepted accounting principles applied on a con-i-tent basis. M+ flaitinuire. Maryland . Jannan 29. 1987 ; 1 I i ( , I l ) 4 I i n 1 ) x- w: Selected Hn:ncid Rationnd Statittics "h, 1986 p m. ", ' ~~p>W jon.g . . l,,a2 - Profitability Nei income a- a p-ri entaxe ol:. Aserage toe kholder ' equits 21.84 % j 20.199 pt 079 h 39q' ; g, y; 1 . berage total a et- 1.37 1.% .l.27 1.n l f.H berage 'carnmg a--et-' l.47 1.18 1. 58 1.13 o Growth Measurce I~5e'ntag . hange ot: - - - hetage loan- 20.60 % .t 1.619 26.239- i .g f,,39 in gy, herage earning a -et- 26.28 17 7,0 o 2H g 1.5 ,, in Lt intere-t inconw itas-equisalenti 15.62 22.21 18.92 ,.a3 ' 2; ;a Trust a#wl irise.imerit j management lee- 26.44 20.09 32.78 u we, ,I g i Li income 26.10 25.54 30.23 21 to 2 i of Noninterest Expense Pen entage of iotal rewnne-:' Control fmploy ment eq>en-e 30.86 % 33.559 35.209 3H.654 17.279 Total nonintere-t ey en-e 2 52.28 55.34 57.38 n2.67 u.12 Iman Quality ' l'ereentage inf asera[ total luari * ' Nei charge-off. .18% .099 .269 .119 .1 o4 Lnaccruing loan. .18 .lH .27 .12 90 Capital and Reecrve . Perevntage of total a,-et, iaserages: Adequacy plockholderi equity 6.25% o.659 6.t>l9 6.279 i "no ploc khohleri equity plus re-erse for loan lo- ca 7.13 7.14 7.3H n.91 <>.~.~. Percevitage of total a et- tal sear-ende: Sto< khobler ' ciputs 6.12 6.19 5.91 U s< > iu stoc kholder ' equity plu-re-erse for loan Io e- 7.02 7.03 6.57 6.b l o 2: Percentage of total loan
- lat year-endl:
l{rrene fier loan to- e- 1.53 1.37 1,24 1.33 1. 52 Capital generation rat / 14.79 13.27 12.6H 10. 10 ' ,it ~' Dividend Payout thsidend paid as a pen entage of net income 32.28 % 31.929 33.68 9 37.90q (. ; y; Selected Per Share lihidends paid s .63 s .55 s . 64 5 .39 - 5 . So Data lb ok salue sat year-endt 9.68 8.33 7.29 6 &H 1 89 ptm k price: \t year end 23.00 193 N) 11.00 7.83 5.11 liigh 25.50 19.00 11.00 7 88 i 12 le 18.25 11.00 7 75 5.00 :( l 4 Other Selected Data llanking office- 35 35 35 .52 I2 tert vor-emh Staff member > tfull-tune equisalent*e 1,628 1.537 1.457 f.435 1.3"o Stoi k holder- 4.957 4.7n4 1.523 4.28I l.l~l Share, out,,tanding 17.554,919 17.311.524 16.901.532 16.708.032 lo.57 ."2x berage haren outstandmg 17,444.448 17.122.400 16.818.292 16.656.212 It.519.8Io hequiuntent net unt mt plu nonintemt uncome. escluding securities ganu ilmsra %cludes pmn uuns 1.or loan to.un %t en< ome feu du viends pend us n jmentage ofenerage son,Lholders' equity ii lin.Velikialy:is id ENriingNnd Costidated Statement of Camdition l980 V * *' tDmh atemm m thawanh: mtn on tut.equon/mt haaru fialam e Iniere : Rate Halan, r Insen -t Raie Tirne depoon at interest 8 4.288 8 286 6.67 % $ 1.T:2 $ t. 52 o n: , huleral fund, sold and -cuntie pun ha ed under agr..ernent- to re-ell 253.290 17.014 6.72 Inr. 9 o ii. 52 i a 20 Total money market a .et. 257.578 17.300 6.72 202. ,,.2 1 o.7;- n 2: U. . Trea un 63,4 % 5.270 8.30 ,, . . o02 i.lo2 o 22 l'.p. gosernment agen 3 52.512 4.254 8.10 7 psi e.. s tI it State and inunwipal 411.415 42.307 10.31 R 1. 74 6 Jt xtl to r. Other 14.673 1.129 7.69 p s. ua 1.To rt Total inse.tment *eruritie, 542,096 53.0$0 9.79 .t:i. tla 17.1 ii o "2 (kuninen tal 558.405 55.529 9.94 lio.o lo V. mo ii v. \lortgage 504.486 55.203 10.94 301.8.58 68.21 t i 2 no (),n urner 447.260 56.006 12.52 ta9. n; i s.it . i t to Totallonna 1.510.151 166.738 11.04, 1.2u.212 n s. l e.a 12 u Total earning a=et. 2.309.825 237.088 10.26 1.H2'<.122 20H o'.8 i1. 17 Other a- et* 182.842 161.176 Total annet, $2.492.667 9 f .ooof so Ndng.6 8 88.778 4.531 5.10 $ H6.I n i.12 , :t intere t < hei king 160,384 8.568 5.34 129.tvr. ra. . \lonc3 :narkes 400.547 23.520 5.87 : liv.w n 2.' . v.r . - t Certihrate under $18MI.tNIO 479.% 1 39.910 8.33 4 % .2.11 65.Tol o '- ~ Total retall depo.it. 1.128,770 76.529 6.78 091.o.to a. 5: . on Certihi ate $ lt N).(M N) arni oser 456.342 33.411 7.32 188. 4 .t. Ir.m 5 t _ federal f und* pun ha eil and -ei untie -old under agreernent to repun ha-e 256,453 17.492 6.82 2.t 8.001 1d. .:1 - *. t .3. Trea un deniand 29.694 2.050 6.90 24.07- i.96- . Total managed liabilitic. 742.489 52.953 7.13 i li.m i te . . .' - t hher hornming- 15.985 1.706 10.67 Io. t to 1. _' Total intere . hearing liabilitie. 1.887.244 1.11.188 6.95 1. s ia.oon i lo tic . liernand drpo-d* 398.672 lio.Hoo (8ther noinniere t funil- 23.909 19. t.i t ~ Total funda used to .upport earning a**ct, 2.309.825 131.188 5.68 1.829.12.> l i r. >< c .in. L holder.J e<pnts 155.856 I (2. tx 4 Eipnis u-ed to -upport earning a- et- (23,909) i l o.. th Other hainhne- 50.895 48.14i Total liabilitica anil . stockholders' equity $2.492.667 + 1.wo 2"o bt intere t incomrgiehl 105.900 4.58 "151 + Tas.equisalent adiu-trne.nt (32.955) 2 t : l '. %et intere t income 72.945 or din ,,,ano, Pnid-n.n lor loan to -e- (8.250) bt iiilere-t tnrorne aher prog i-ion for loan lo es (4.695 ol o to ( >ther income Tni t and oise-ttnent inanagement fee. 39.074 to not irrm e i harge* on depm.it account
- 6.002 ..til i hher operatmg income 13.546 o.**i
' eruntie gain, do c > 743 .1.1 J0 Total other income 59.365 65.122 Vt mierest and other mrome 124.060 lol.lu Other espen c salarie and employ enerit bericht- 50.768 10.2 I ( VI errupancs espen e 4.759 3. '. 5 hirmture and equipment espen e 7,046 o2n Other .peraimg espense 23.444 lo Jw To~t al other espen e 86.017 To J " income before mrome tase- 38.043 .' : "* \pphrable mi orne tase- 3.999 = _ Net income s 34.044 9 2n von - f.nrnings per share 8 1.95 $ I * - ; . '.S: _ m . _ m.. e t ( ., l'4tl 198.i l9g; Italan. e . Inn.rmt H io. ' Italan, e inter.. i H,,0 . H.knd- hin.s : lu, $ lo?. oil $ l l .'ill . I I. I l'1 5 ~ leil.rel 9 l i.e.72 9 ,,9q g IK.g, :gy 4 g,q ., , , . ,) 222,127 2.l *>l l lo w 192..l'i l " l H.191 9.56 17,,,,,, 5 ,g,,,. g l .l29.!!H .G, lit 1 o. 7#, G4Jst2 . l l.otti 9 t,J _u,o, u g p ,, g , g ; g., 75.' m iH hjs91 - 9.21 1.tri *HI 12.987 9 89 l p,,7tg o.,,,- g ., , 'a n. l x i 7.679 H 29 '" 996 . H,262 H. 2t, . I 1 ;,o.g - o _ 7, , , ;j. Mi.HH 4 - 7.212 19 78 64.170
- 176
. lit H4 M9.2:49 ..l l .ju i q ; ,,7 80.410
- l. :18,.0 to Hi .59.271 4.H9; 9,92' ILin g. n! ,, g g .
2*:1.:lHfg 26. fit 2 9.53 .542.221 .t2.120 9 46 .te A 2t>l n.1;u ow ( ~>2. 753 66.:GI 13.11 2<,7. t ">7 .t2.5 8.4 12.18 Jol .:4.t.1 to. j 75 , g ,o .419.'175 lo.501 ~ 12.68 2o 8.9H 8 .42.5 6.1 12.29 2n,n2 to ,,n2 - ej g 2._79.,.t-14 -- 11.1n4 14.79 2 1:1.709 :41.9 40 16.9% 227.6H L t i. wo i, e, 911.172 128,156 1:6.47 7tn.910 h u s.o.th 13.(N) 674 lth %D7 -){i) l.558.035 lH9td2 12.2n . l . p,J lti.t 9,t , llo l l .:tp 1, 80 6, p,,, 177,2,,8 ;; ,,; 141.59.6 I J *,. lli 9 _ .4.510 $ I .t>98.# 29 . it1. '>H7 ant 61.197.t,76 .m -- $ HT 187' l.lli iOH - 6 9.4.7 to 6.78.1 3. Io 3 Io8.992 ,, de , ,(7 Il0.255: 0.501 1.on 'mL911 5pH 3.00 Ho.2tn i .t t t .t 282.768 21.270 H. 7t e 176.977 18.64. H.16 1.t. i n til af lor e,97_.2 10.86 .it>& 219 .W4.098 lo. it, .lo!. p n !!.tlJ .i _ _ _.. -.'_42.112 _ 867.642 _ 7 4. *t.H H. HJ 72iH.l7 62.5]7 H.f o 588.2H2 ~.*".G e: 97.70.4 9.90.l lo l 8 91.972 H.2t >l ' H 61 1O l .HKt JH 19 1 'J 4 289.522 25.or>J 10.n4 JH l.tel! 27..liH 4.t d JHH.2rd it.);: .1 12.5:al :l.269 l o. i w. .it. 461 .t.252 H.9 8 :50.847 t . ".m 4 . 179.725.. . .-.38.21& Io 07 411.4HH :tH.H7 8 %G 480. M ia.if: , ; 22.06.4 -_ ._1_7_4 4 _.
- 72 23.129 2. lori H.99 . 20.779 I . .. i
- l .219.7so 114.700 9.lH 1.161.236 loil :197 - H.87 1.oH9.66t> ll* l' at u 288.782 279.410 2t>l.197 16110.5 17aw? 30..tJ i l.lil.o.G l l 4.71Ki 7. 13 1. Lei 2.16 4 10:t.:19 7 7.07 1. 60 6. It e e iI7 7i!
I12,792 'N.il7 H9. i.12 t in.(uib i I 7.f d17 e i30.124i 47Jtoi 8.t.521 *> l..tol $l.09H.629 61.*>H7.toH 91.897.676 71.916 8.82 61.022 8.31 i' 8.1", I & .; 1 e l l,059: s l o. it>lt ilo.u*l. fiojtH7
- 2.H58 i 1H sino e6.pWH 2.700s e4. inh
.h. . . 2 1.7.14 19.'tH1 1 4.' R *J 4.1G 1. p10 t.9Io 9.591 4,492 *s. Hih t,4.97H6 11.7119 2.h l 16 lG.HH2 2H.4HH J l . li:1 92_tb9 THA16 ' d s. Ju l g h, . 4.2 67 4,297 **- 2II 3.0 16 1.619 I J '"2 16.169 11.180 l J. I 4; (JJtHo >H. p>l 's2.623 20.4H9 Jo.lH2 I 13 4 ' l.484 LAMB Y , _ $ 21.5#1; 9 In 313 ' It.l*9 , . $ i 2H $ 99 8 HH ;l ) Bo:rd of Directors._. l George P. Bis-ell. Jr. A. Samuel Gray lionorars Chairman of the Boani President Dasid B. Bolen Charles J. Ilarrington \ -m iate Director. International Affairs. Retired \ ice President and General - International Department \lanager. < E. l. du Ibut de Nemour+ d Gimpany Elastomer Chemical. Drpanment. " " '"' """" '"'P"" Robert H. Bolling. Jr. Gin-ulting Electrical Engineer Bernard B. Isaaenon . Certified Public Accountant 'J. Bruce Bredin and Financial Consultant , Prisate imestor Prr.o, dent and Director ! of the former Bredin Realty Company Andrew B. Kirkpatrick, Jr. irral estate hohling company Attorney. Partner. Lm Firm of . \1 orris. Nichols. Arsht & Tunnell John E. Burris Chairman and Chief Esecutise officer. W. Frederick Laird j Harris tiunis. lix . Director. The Columbia Gas putem. Inc. Joseph W. Chinn. Jr. Former Chairman of the Board Charles B. McCoy Director' Edward W. Cooch. Jr. E.1. du Pont de Nemours a Gunpany \ttorne). IIember. Law b,.rm of i Cooch & Taylor P. A. ~ Walter D. Mertz ! . Retired Senior \ ice President Charle+ 5. t.rompton. Jr. Attorney Partner. Law Firm of Hugh E. Miller l Potter. Anderson & G>rroon Senior \ ice President. $ ICI Americas Incorporated %illiam R. Deeles ' Retired Chairman of the Finance Joseph M. Moran Committee. Eeniorlice President and Secretar) American Stores Compam - "G. Burton Pearson Jr. l Edward B. du Pont Retired senior \1ce President Prisate Imestor Chairman of Atlantic biation Corporation 3"hn R. R. van Retired demar \, ice President. irsnse du Ibnt. Jr. Hercules incorporated Dirretor. .Gomas P. Sweeney E.1. du Pont de Nemours & Compam \lember. Law Finn of George P. Edmonds Richards. Layton & Finger. P. A. Fi>rmer Chairman of the Board Bernard J. Taylor. II -Endsley P. Fairman Chairman of the Board Retired Senior \ ice President Mary Jornh.n Theisen a Robert C. Fornev Former New Castle Giunts Excentise Esecutise \ ice Pr'esident and Director. ) E.1. du lbnt de Nemours & Company 1 l l l I i l i l *Retiredfrom Board 4.U.86 - Anociate Director m
- Principal Officerti Stcnding Committees .
,- _.-~-..a.,-s... Delzware Adviwry Board 3 .
- Bernani J. Tavlor.11 Executise Committee Walton H. Simpson. Chairman;
' Chairman of the Boani Bernard J. Taylor. II. Chairman . Joseph R Bateman ' A. Samuel Gray Jmeph W. Chinn, Jr. A. Dean Betts - President George P. Edmonils . John E. Bums. Robert C. Forney Ralph G. Faries. Jr. . *(lenry E Acquaotta . W. Frederick 1.aInl 3emur bec Premdent. Edwin L. Fisher 1,und \lanagement Department . Charles B. NicCoy J. Allen Frear. Jr. flugh E Gallagher.,Jr. ' *Te i T. Cecala, Jr. . Trmt Committe'* . Robert H. George senior \ ice Pre.ident. ' A. Samuel Gra . Chairman' Corporate Development Department' John W. Jardine. Jr. Doriald A. Corkran. Vice Chairman . . Claude E. Lester
- Donald A. Corkran George P. Bluell. Jr. .\liiton C.11anlose -
Senior Vice Pre.ident. Robert H.' Bolling. Jr. Rasmond W. Slasten Tru4: Departmeni - Joseph W. Chinn, Jr. R.' Byron Palmer -
- George D. Craig Irende du Pont. Jr-R. James Quillen. f t.
8cnior \ ice President. (,eorge P. Edmonds . Charles P. Spicer - Operations Department Endsley P. Fairman N. Af axson Terrv. Jr. Nathan Haywani Ill ~ Ebe Stephen Townsend. Jr.
- Robert },. A. Harra. Jr. Waher D.' Stertz .
demor hee I,n sident, , John E. WilleY Retail Banking Department g. glurton p arson. yr. *Nathan Hayward ill Amlit Committee Senior \ ice President. Irsnee du Pont. Jr.. Chairman Financial 5cnices Department ~ Charles S. Crompton. Jr.
- Joseph Nf. .\1oran William R. Deeley 8enior \1ce President and Secretar.s. Bernard B. Isaacson
- Administration Department .\tary Jornlin Theisen . *Ironard W. Quill .. Compensation Committee Senior Vice President and Treasurer. George P. Edrnonds. Chairman Commercial Banking Department Joseph W. Chinn, Jr. Dale R. liaring. ' Robert C. Forney Controller W. Frederick laird Jack B. 31ullen Charles B. SteCoy Auditor
- 11 ember. Senior .11anagement Committee 19
Of5ces" Operating Sul>$itiiaries i P l %ilniington hw Ca ile County litatulywine In-nrara e \genn. Inc. 8l$tpille% Nflnaft* horib !$arl,') Slil! Pl.Ua l{ralb b wine 1.ib' in-nr.nlee IMilenington Trn-i Cented liranmar 11aza Gunpany. inc.
- Tenth & \larkei -tecet- t,he-inar Plata I.'inancial 8,.n ice- ii)elawa, .. In,..
301 llelaware \u.nne t . l d > '""" ' Hi.liila Trau l \p m s ini . 120~ North l nion .*treet unnnninii3 Plafa ,tiarylaint State llank 2120 brth \t.nkei sneet GinconiPike 3005 Lith \larket Street Conconi Plaza N"'I"") E'lud'" \I d"dE""'""' I Corporation ilelaware City The %inche ter Gronp. Inc. F.leinere F.iirf.n u TL Capital Aih isers. inc. *Grecinille Cenler Milmington Brokerage peruce-1.ime tone lloail C'""Pd") 1.ons ier- Ilnibling %ilmington Tru-t ,ol Florkla. \. \. \liililletou n Lw Ca-tle Lwa:L Lw port
- Pike Creek Valley Tri-State \lall L t Lwark
[ j Kent Cenanty Canulen I)in er \litbnl Sumnes County Georgetow n llehoboth Scatiini .\lary lan<l lli-hopsilIe Princes 4 \nne Salishnn l I, i *()enotes mmlalalits of tratel snon jn 4 Stockholder Inforrn: tion . Corporate Headquarters Annual Meeting Wilmington Trust Center The annual meeting of Wilmington Rodney Square North Trust Company stockholders will be Wilmington, Delaware 19890 held in the company's boardmom in (302)651-1000 the %ilmington Tmst Center, Rodney am , n nEton, Mawam, Common Stock at 10:00 a.m. on 'Ihursday, April 16, Ellmington Trust Company common 3937* stock is traded over the counter under the symbol wit.M and is listed Stockholder Records in .'..e NASDAq National Market Inquiries relating to stockholder System. records, stock transfers, changen of ownership or address and dividend SAsDAQ Market Makers payments should be directed to Jody "$,0"*" S" 1. Thomas, Financial Services Offi- , gD cer, Corporate Trust Operations Dean Witter Reynolds, Inc. Section, (302) 651-1266. New York, NY Fox-Pitt, Kelton, Inc. Information Requests New York, NY Analysts, investors and others seek-Furman Selz Mager Dietz & ing fmancialinformation should con-Birney, Inc. tact Ted T. Cecala, Jr., Senior Vice New York, NY President, (302) 651-1897. Herzog, Heine, Ceduld, Inc. News media representatives and New York. NY others seeking general information Keefe, B,uyette & Woods, Inc. should contact Rita C. Turner, New York, NY Vice President, (302) 651-1218. Mabon, Nugent & Co. New York, NY Merrill Lynch, Pierce, Fenner & Smith Inc. New York, NY PaineWebber incorporated New York, NY Wheat, first Securities, Inc. Ilichmond, VA Dividend Reinvestment and Stock Purchase Plan The company offers a plan whereby participating stockholders can purchase additional shares of Wil-J mington Trust common stock through i automatic reinvestment of their regu. f lar quarterly cash dividends and/or , j voluntary cash payments. All com- . 3 missions and fees connected with - - ~ . - .' j the purchase and safekeepingof the h* j 1 shares are paid by the company. Forj ,Mg,- ' s 1 ' l f details of the plan, contact O. CliAam1Vggd'n.Q 'W #1Y W %: West, Senior Bankin6 Officer,(302h ;Mi,,y %, j 651-1448. ' 1 3* kh'??- r? A
- 2. /v
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- l Hodney p Square Lrth o %,,(%
US j'h Wilmington, Delawar 19890 ., fa *Q . N9.e%%]'b5) . i W#' h.y(. s y y.s,'.< y . a A - *h,,,,,. OWE T .4G' a W 7.n.yt ,, gym ing y .. _ ' }A.. . .a.cA.* Q ' q c,,.,g.,g Y; 'gy * .'s':g,,.n 4,
- f t 'f.w."N. 34g .,;bn.. g ' **- l y;q:
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- 'i.
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' y f'? s, ..,'..A. p.%.v&s.'Ny * %p. ,% ' ign . f,p. - , g, 9 g,, e? . '*- e j v s ..sk.#1 u.1 .. ' g W . .,'; %W.; . .?A y ee t ' .. '.y'yo $6 ' .l**)? .s.,w a %%'s. y' ,b?!" ,,' s .. . . . . , , s k.- 4 h"' 'd ,, e * .4, - vi ,. , " y;fG;q,,. - .-A.7A r**sc-l as. ;..Mw : A.s. 6\ a u. e I' t e i FORM F-2 1 ANNUAL REPORT PURSUANi TO SECTION 13 0F THE SECURITIES EXCHANGE ACT OF 1934 I 1 For the Fiscal Year Ended December 31, 1986 i F.D.I.C. Certificate Number 00680-7 i i WILMINGTON TRUST COMPANY Incorporated in the State of Delaware Employer Identification #51-0055023 Rodney Square North Wilmington, Delaware 19890 ] ) Telephone: 302-651-1000 Securities are registered pursuant to Section 12(g) of the Act: TITLE OF CLASS COMMON STOCK Securities registered are not listed with an exchange. The aggregate market value, as of January 31, 1987, of voting stock held by nonaffiliated is $457,936,594. Indicate by check mark whether the bank (1) has filed all ! reports required to be filed by Section 13 of the ' Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the bank was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO 1 I i l Par 2 I Item 1 - Business-A. The Wilmington Trust Company is er. gaged in comercial banking activities in the State of Delaware. These activities include, but are not limited to, all phases of deposit, loan, agency and/or trust services provided to a wide range of customers. Delaware's laws permit statewide branching by its banks; there are primarily four comercial banks and one mutual savings bank which are represented by branch offices in each of the three counties of the State. Based on the latest published data at December 31,1986, the Wilmington Trust Com millions)pany's
- competitive position among these five banks was (in Total--Five Wilmington Trust Company 1 Major Banks Amount % of Total Assets- $7.555 $2,778 36.8%
Deposits 6.072 2,230 06.7 Loans 4,879 1,629 33.4 Equity Capital 458 170 37.1 Although data at December 31, 1986, is not available for a precise comparison of the competitive position of the Trust Departments of the Danks, the Wilmington Trust Company's position in this field among the five major banks in the State of Delaware is acknowledged to be the largest by a substantial amount. The Wilmington Trust Company is not dependent upon a single customer or a few customers for a material part of its business. The business of the Bank is not seasonal. There were no material changes in the business of the Bank during the year 1986 and no material changes are expected in the future. Neither the Wilmington Trust Company nor any of its subsidiaries are engaged in operations in foreign countries. The Financial Center Development Act and similar legislation was passed in Delaware to allow out-of-state banks to locate within the state. Thirty. banks have moved portions of their operations, primarily credit card and investment securities, to Delaware. Although allowed to provide normal banking services that is, deposits and loans, to Delaware residents, these banksarenotalIowedtoadvertisethoseservices. The impact these banks ! have on competition within Delaware is minimal due to the f act that the j majority of the banks are not providing full-service operations. At December 31,1986, the Wilmington Trust Company had 1,628 full-time equivalent employees. It has the following subsidiaries: B. 100 West Tenth Street Corporation was formed in 1929 to hold title to owned i real estate and provide real estate management services for both owned and leased f acilities of the company. C. Brandywine Insurance Agency, Inc. was formed in July of 1968 to serve as a < broker for various lines of insurance. j I D. Holiday Travel Agency, Inc. was formed in May of 1959 as a full service i travel agency serving both retail and commercial customers. E. Rockland Corporation was formed in 1940 as a real estate holding company which holds title to non-banking real estate. F. Compton Realty Corporation was formed in April of 1980 to serve as a general partner in Rodney Square Investors L.P. (Item 1-G), and manage the daily operations of maintenance and repairs of the Wilmington Trust Company's main office building. (1) f 1 L_ _ \ y 4 Item 1 - Businiss (cont'd.) l~ G. In April.of 1980, Wilmington Trust Company and Compton Realty Corporation h became limited and general partners, respectively, of Rodney Square Investors, L.P. with a combined interest of 50%. Rodney Square Investors,- ,j L.P. was formed to construct and manage the Wilmington Trust Company's main-office building. H. Brandywine Life Insurance Company, Inc. was formed in April of 1981 to sell I credit life insurance. I. Wilmington Trust of Florida, N.A. is a national trust bank formed in June of 1983 to maintain and service trust accounts. J. Financial Services (Delaware), Iac. was formed in February of 1983 to incorporate and service Delaware holding companies. X. Rodney Square Management Corporation began operations as an investment advisor registered under the Investment Advisors Act of 1940 in October 5 of 1984. L. Wilmington Brokerage Services Company began operations as a registered broker-dealer under the Securities Exchange Act of 1934 in May of 1984. M. Maryland State Bank was acquired in December of 1984 The bank provides I consuner services to customers. N. Drew I, Ltd. was formed in June of 1905 as an investment holding company. - 4
- 0. Drew VIII, Ltd. was formed in June of 1985 as a real estate holding comp any.
- l. P. Siobain XII, Ltd. was formed in August of 1985 as a real estate holding company.
Q. The Winchester Group, Inc. was established in February of 1985 to offer comprehensive financial counseling to individuals and to assist their i c11ents with the organfration, management and protection of their financial l resources. R. Spar Hill Realty Co., Inc. was acquired in December of 1985 as a real estate holding company. l S. WT International Investments, Inc. was formed in May of 1985 as a general I partner of Edinburgh-Wilmington International Capital Management with an interest of 505. Edinburgh-Wilmington International Capital Management began operations as an investment advisor registered under the Investment R Advisors Act of 1940 to act as an investment manager in international investments. WT International Investments, Inc. is also a general partner in Japanese Special Equities I: L.P. which represents an international investmtnt limited partnership. T. WTC Capital Advisers, Inc. was formed in October of 1986. The company will comence operations as a broker-dealer upon approval by the Securities and Exchange Commission of its registration application. I i (2) l /,. . a .t . i g . '4 l' B i - ;g' M L 2 11 L- l 8 r ir gIe a s88 st l}1 !r s- I ~ 125 g} s .: E. -3 ]- . - . 83 .= l l := kl y _:g-g4 -
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& J-W " ,Ut ,x 1 ![ $ ; ge . , ' BUILDINGS OWNED BY 100 WEST TENTH STREET CORP. 7 'i . W, .., w. Name & Address ' f re i. Sq. Footage H Use . #jy Brandywine Village Branch 2.950 CommercillBaiking -2120 Market Street 3,570 Storage. Q(j, g Wilmington, Delaware 19802 ' lT7 n' h Branmar Plaza Branch 3,367 Commercial St.nking L . Marsh & Silverside Roads Wilmington, Delaware 19803 Camden Branch - . .. 2,148 Comereial Banking - #2 South Main Street 1 Camden,. Delaware .19934 1 i , Claynont Branch . 4,625 Philadelphia Pike & Manor Avenue ComercM Banking , W11mington, Delaware 19703 . ;E p ,( . M i.b ' / Concord Pike Branch 2,899 Commercial Banking . 5107 Concord Pike 0 'y(ji Wilmington, Delaware 19803 t Oelaware City Branch 5,110 Commercial Banking +1 122 Washington Street Delaware City, Delaware 19706 y Dover Main Branch 6,540 Commercial ' Banking ' i 139 South State Street 1,962 Banking Operations . Dover Delaware -19901 Elsmere Branch 3,083 Comercial ' Banking '1307 New Road Elsmere DelaAr+; 19805 4 SeorgetownBranAh. 5,948 J- Commercial Banking 11 The Circle 2,688 Tenant Area Georgetown, Delaware 19947 Middletow'n Branch 2,400' Commercial Banking 399 East Main Street Middletown, Delaware 19709 Milford Br.anch . 6,988 Comercial Banung y N. W. Corner Front & Walnut Streets Milford, Delaware 19963 New Castle Branch 4,880 , Commercial Banking 210 Delaware Street 5,276 Tenant Area ' New Castle, Delaware 19720 New Castle Drive-In Branch 423 Commercial Banking _y 38 Ferry Cut-Off f-New Castle. Delaware 19720 Newark Branch 7,736 Commercial Banking r 82 East Main street , Newark Delaware 19711 Newport Branch 3,246 i Comercial Banking 100 North J&nes street 2,904 Storage Area / Newport, Delaware 19804 .d I s t (4) \ \ L _ _ ___N _ - ( _( ~ W Q((, y r Item 2 - N a es (cont'd.) . :,, BufLDINGS OWNED BY 100 WEST TENTH STREET CORP. ; y. , i ry l' V Name & W dresg Sq. Footage g U n ; Personal Fin ~ance Repossession F .~ Builtiing F. 7,500 Storage Area W)1 North Market 17,500 Storage Area Wilmington, Delaware , ,i p@ 6 q? 1' Precious Metal Warehouse 35 East 13th Street 19,200 Precious Metals , Storage !< Wilmington, Delaware 1.9302 L, , a: -p' 37th Street BJweh ; 1,860 Commercial Banking 3605 North Marf&$treet g, Wilmington, Delavas 19302 m :'c . af b , Union Street Branch 2,793 Commercial Banking A- 1207 North finion Street : hn Wilmington, Delaware 019305 Warehouse '. 10,202 Storage & Supply 2418 West Sixth Stree4 Wilmington, Delaware 10005 West Ssaford Branch 3,270 . Commercial Banking 509 Stein Highway! ; Seaford Delaware 19973 ( f OTHERiPROPNTI,gj7eEDBY100WESTTENTHSTREETCORP. Name & Address 50. Footage Use Installment Loan tot '15,200 Repossessed Auto Lot 512 Hawley Street Wilmington, Delaware 1980!, ' y SUILDINGS WNTED BY WILMINGTON TRUST COMPANY Lease Name & Address Sq. Footage Expires le , Alico Building ,,4 1,000 12/31/88 Banking Operations e 1105 North Market Street , j Wilmington, Delaware 19801., f e Barley Mill Plaza .1,675- 07/31/93 Commercial Banking 4313 Lancaster Pike Wilmington, Delaware 19805 Brandywiree B1dg. Branch 3,445 06/15/90 Commercial Banking 301 Delaware Avenue Wilmington, Delaware 19801 Chesmar Branch 3.200 10/01/88 Commercial Banking 07 Chesmar Pista
- Newark, Delaware 19711 Community Plaza Branch 3,853 0r/01/94 Commercial Banking Route #273 & Airport Roads New Castle, Delaware 19720 Concord Plaza Branch 935 07//1/91 Commercial Banking Suite 106, P1ars centr i, 3505 Silverside Road Wilmington, Delaware 13810 j (5)
,s _ - _ _ _ _ _ - - _ _ - - = - - - - - - - - - - , Jtem 2 - Properties (cont'd.) BUILOINGS RENTED BY WILMINGTON TRUST COMPANY Lease Nane & Address Sq. Footaoe Expires M Fairf ax Branch 3,450 10/15/88 Comercial Banking 2115 Concord Pike Wilmington, Delaware 19803 Greenville Center Branch 4,524 03/01/90 Comercial Banking 3801 Kennett Pike Wilmington, Delaware 19807 Limestone Branch 3,800 06/01/91 Comercial Banking 2371 Limestone Road Wilmington, Delaware 19808 Louviers Bldg. Branch 980 02/28/89 Comercial Banking Milford Cross Roads Newark, Delaware 19711 Pike Creek Branch 4,500- 11/20/90 Commercial Banking 4770 Limestone Road Wilmington, Delaware 19808 Rehoboth Beach Branch 2,650 05/20/93 Comercial Banking Route #1, Ames Plaza Rehoboth Beach, Delaware 19971 Tenth and Market Branch 11,808 12/31/88 Comercial Banking DuPont Building 620 Poliday Travel Tenth & Market Streets Wilmington, Delaware 19801 Tri-State Branch 3,042 05/01/90 Comercial Banking Naamans Road & I-95 Claynont, Delaware 19703 West Newark Branch 2.198 11/30/88 Commercial Banking Elkton & Apple Roads Newark, Delaware 19711 Wilmington Trust Center 207,698 10/31/06 Banking Operations Rodney Square North Wilmington, Delaware 19890 Wilmington Trust of Florida 3,000 09/30/90 Commercial Banking 900 East Ocean Boulevard ! Suite 144 Stuart, Florida 33494-2430 item 3 - Legal Proceedings In 1986 the Bank and its subsidiaries were involved in no material legal proceedings. The actions to which the Bank and its subsidiaries were parties are and were ordinary, routine litigation incidental to the banking and trust business. Item a - Security Ownership of Certain Beneficial Owners and Management Item 4 has been omitted because all related matters are covered in the definitive proxy statement, pages 5, 6 and 9, incorporated herein by reference, filed by the Bank as of March 14, 1987. (6) , .Jhh I ~] l ' ', ' 8 ,' . lt j jy W \' fl ; ,'c . -u ) L ./ ) l{p j{ t j / ] i , Part II N -{ .; \( r r .c . , . p \jo/ m 5f.- Comofjfgek and Related Security Holder l'atttQ v # 'l 1 6 - A The ntsnber af shares of comon stock outstanding increased in 1056 by 8,899,157, '?#V / 1 / N These increases were, due to stock ' issued under the provisions of Wilmington -4 Trust Employment senefit Plans and 6100% stock divideno declared on October 15, > d. 1906. The number of sharen IGued due to the stock dividend ivas 8,753,772. -d . Further informatira is pro;1 odd in the 1986 Annual Report to StocLeolders pages / / lf'k.6, e
- i. a j 22,29,30,32ano35](. r )
'y . I 'a l ? 4 , 1 ,- i s *< ; < ItM 6 - Consolidated Suotry of Operations (In s,housreds, except per ;; hare data) I .. % N j' ' l ,p, ' i a q( 198( j$ ,}M5 1984 1 1983 1982_ j ", r'terest Revenue , <$ 7.04,133.$ I M ,311 $ 175,593 $ 156,255 $ 166,317 c a ,, Mte/r.st Lpense 131,188 1@,46i 114,?06 103,397 117,717 I. y n ovision d e Lcin LosA t (8,250) '{d,800) (4,4d0) (2,700) (3,500) , n -; [j \ p 4 Otsr;,Incoe ; t .j-f ;j , 59,36f I3.122 35,882 28,488 21,184 4y i .A*,her Expense $ 4 % 86,N( Y6,270_ 65l390 58;464 52,628 . g Income Before Income Taxes 3e#4'3 3 27,898 26,489 20,182 13,656 t .,< ,, c 1, y ,r, a Appitcable Income Taxes J ,999 900 4,984 3,669 477 \ t , 1 e . .J 'h I h j F Netihome ,. $ 34l04f $ j Q 93 $ J 1 45 g 5 16.513 $ 13,179 /;q 3jl ^ L'( Ea M m M r Share * $ 1.f.k $ /1.58$ 1.28 $ .99 -$ .80 <A yi' Dividends Pairl Per Share
- 5- .63 $ .55 $ 44 $ .39 5 .36 i
, W. ; . p{. W '(? i, vnber of Eroloyees: yll-Time ntuivalents 1,623 1,537 1,457 1,396 1.43S 4 - 1i I Incorte Taxes i Operaticas $ 1,797 ! 2,336 $ 6,918 5 538 $ 1,684 4 - Securities ' PSZ (1,436,) _(1,934) 4[869) (1,?,0_7,) g Tyal $ 3,999,$__,,903$ 4,9"f$ 3,669,E _ j71 Wrighted Averag! Sha es . 3 i 17,122 , Out standin9* 17.444 16,818 16,656 16,520 L' Total Asset! , $2,777,93312,378,408 $2,085,457 $1.815,965 $1,717,084 Total Long-Term - Obligations ! 3,734 $ '17,110 $ 15,627 $' 22,226 $ 20,666 SelecMd Financial Data for Financial Statwnts en pages 15 through 37 of the Wilm'iyton Trust Compr.ny 1986 Annual Report is incorporated ~ herein by reference. f
- Prior years per eare arre arcs adjusted for 100% stock dividerds declared on October
- 20,198:1. July !?,1995, N October 16, 1986. [ ltem 7 - Management's Discussion and Analysis of Financial Condi,, tion and Results <r of Operations Management's Analysis of Fha acial Statements on pages 18 to 21 of tn't . Wilmington Trust Ccspany 1986 Annual Report is incorporated herein by reference. 1 Item 8 - Finan:ial fta+4 eats and Supplementary Data Financial Stateents and supplementary data on pages 22 to J3 of the Wilmington Trust Company 1986 linual Report are incorporated herein by reference. is i (7) . [k5. , .k i l .Part III I I Item 9 - Principal Officers of the Bank Bernard J.. Taylor,=11 . .. Age: 61 7/79 - 3/80 : President Chief Executive Officer, and Director ! 7/79 - Present: Senior Management Committee i 3/80 - 1/84 : Chairman, President and Chief Executive Officer 1/84 - Present: Chaiman, CEO A. Samuel Gray Age: '52 12/76 - 1/84 : Senior Vice President-8/79 - Present: Senior Management Comittee 1/84 - Presentt' President and Director Joseph M. Moran . Age: 57-12/76 - Present: Senior Vice President and Director 8/79'- Present: Secretary 8/79 - Present: Senior Management Committee Leonard W. Quill AD e: 55 8/79 - Present: Senior Vice President and Treasurer 8/79 - Present: Senior Management Comittee Ted T. Cecala, Jr. Age: 37 8/79 - 1/b5.: Controller 1/85 - Present: Senior Vice President' 1/85 - Present: Senior Management Comittee Henry F. Acquaotta Age: 60 8/73 - 1/81 : Vice President 8/79 - Present: Senior Management Comittee 1/81 - Present: Senior Vice Pr.esident George D. Craig Age: 55 3/68 - 1/81 : Vice President 8/79 - Present: . Senior Management Comittee 1/81 - Present: Senior Vice President-Robert V. A. Harra, Jr. Age: 37 8/78 - 3/81 : Assistant Vice President JfB1 - 3/84 : Vice President 3/84 ,Present: Senior Vice President 3/84 - Present: Senior Management Comittee Nathan Hayward !!! . Age: '43 1/77 - 2/85 : State of Delaware, Executive Office of Governor Director of Office of Management Budget and Planning Director of Delaware 3/85 - Present: Senior Vice President 3/85 - Present: Senior Management Comittee Donald A. Corkran Age: 49 8/72 - 1/81 : Vice President 8/79 - Present: Senior Management Committee 1/81 - Present: Senior Vice President Dale R. Haring Age: 35 9/79 - 2/83 : Internal Auditor, Ametek Inc. Paoli, Pennsylvania 2/83 - 1/85 : Accounting Operations Manager 4/83 - 1/85 : Accounting Officer l 1/85 - Present: Controller Jack B. Mullen Age: 35 12/79 - Present: Auditor l (8) i '<r , item 9 - Principal Officers of the Bank' (cont'd.) ' Indemnification of Directers and Officers . Article X of the Bank's By-Laws as authorized by Title 8 Del. C. 145 indemnifies all Directors Officers, employees or agents of the Bank against threatened or pending litigation, including all expenses, . judgments - fines and amounts paid in settlement of any action, suit er proceeding' against any - such Director, Officer, employee or agent occasioned by virtue of any person serving in such capacity. The Bank provides Directors and Officers liability insurance as the -funding mechanism for such indemnification, There is no other charter provision, by-law, contract, arrangement or statute under which any Director or Officer of the Bank is insured or indemnified in any manner against any liability he may incur in his capacity as such. Further information for Item 9 is provided in the Bank's definitive proxy statement, pages 14, 15, 16, 17 and 19, incorporated herein by reference. Iten 10 - Management's Remunerations and Transactions Management's remunerations, transactions, and related expenses are provided in the Bank's definitive proxy statement, pages 10 through 13, incorporated herein by reference. i I (9) . _ _ _ _ - _ _ . _ _ . __ _ _ _ _ _ _ _ _ . _. ________________________-__________________-_____-_a , P' art IV Item 11 - Financial Statements. Schedules and Exhibits Financial Statements: The following financial statements are in the Wilmington Trust Company 1986 Annual Report and are incorporated herein by reference. Consolidated Statements of Condition as of December 31, 1986, 1985 and 1984 Consolidated Statements of Income 'Nr the years ended December 31, 1986, 1985 and 1984 Consolidated Statements of Changes in Stockholders' Equity for - the years ended December 31, 1986, 1985 and 1984 Consolidated Statements of Changes in Financial Position for the years ended December 31,1986,1985 and 1984 Notes to Consolidated Financial Statements for the years ended December 31, 1986, 1985 and 1984 The following documents are filed as a part of this report: Page Report of Independent Accountants 12 Financial Statement Schedules: !!!. - Loans 13 IV. - Bank Premises and Equipment 14 .V. - Investments, Income From Dividends, and l- Equity in Earnings or Losses of l Subsidiaries and Associated Companies 15 l Schedules, other than those listed above, are omitted for the reason that they are either not applicable or not required or the information re-quired is contained in the Financial Stetements or Notes thereto included in this report. A Form F-3 was filed December 1,1986 for the month of November, , General Contents:
- 1. Matters approved by the Board of Directors Vote to increase quarterly dividend to 5.18 per share.
l Vote to declare a 100% stock dividend on October 16, 1986 for stockholders of record on October 31, 1986. Exhibits: Wilmington Trust Company 1986 Annual Report. Wilmington Trust Company Proxy Statement as of March 14, 1987. (10) . SIGNATt[RES ' Pursuant'to the requirements of the Securities Exchange Act of 1934, _ the bank has duly caused this annual report to be signed on its behalf by the' undersigned, thereunto duly authorized. WII.MINGTON TRUST. COMP y 7~ DERNARD J. TATJ.OR,f1I Chairman and GEO /. . A 5APUEL GRAY .- f y President DALE R. HARING Controller Date: March 30, 1987 i 1 1 -i l (11) I i L r Ernst&Minne oee sons cha,i., Bahimore, Maryland 21201 301/539 7940 ! Board of Directors and Stockholders Wilmington Trust Company , Wilmington,.. Delaware l-We have examined the consolidated statement of condition of Wilmington Trust Company and subsidiaries as of December.31, 1986, 1985, and 1984, and the related consolidated statements of income, changes in stock-holders' equity and changes in financial position for the years then ended included in the Annual Report to stockholders of Wilmington Trust Company for the year 1986 and the schedules listed in item 11 of this Form F-2. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such testa of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the consolidated financial statements referred to above - present fairly the consolidated financial position of Wilmington Trust Company and subsidiaries at December 31, 1986, 1985, and 1984, and the consolidated results of their operations and changes in their financial position for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis. Further, it is our opinion.that the schedules referred to above present fairly the informa-tion set forth therein in compliance with the applicable accounting regu-lations of the Federal Deposit Insurance Corporation, a .: f h w =4 ' ERNST & WHINNEY 'f Baltimore, Maryland January 29, 1987 i p l '.- CILMINGTON TRUST COMPAN7 Schedule III - Loans (in thousands)- Book Value-At December 31, 1986 1985 1984 Real Estate Loans: Insured or Guaranteed by the United ' . States Government or its Agencies $. 1,069 $ 1,299 5' 1,472 Other .640,942 544,154 408.594 I l Loans to Financial Institutions -- -- -- Loans for Purchasing or Carrying j: Securities (SecuredorUnsecured). 349 2,432 6,056 Connercial and Industrial- Loans 491,506 446,087 338,699 Loans to 17.dividuals for Household, Family and Other Consumer Expenditures 450,957 365,803 302.104 AllOtherLoans(IncludingOverdrafts) 45,676 60,431 51,938 l Gross Total Loans . 1,630,499 1,420,206' 1,108,863 Less: Unearned Discount (1,136) (2,256) (3,122) Total $ g g $1,417,950 $1,105,741 Note: There are no foreign branches or subsidiaries. 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I. tI p o a msp .M ) r , oy . o e r P. a,r e pcc Cco n iCLd a rnn oev , ira w oeI icrt Cg t nensol A , aaSerl e t y rr moFD eecnoueet ( ecnops9gsf k _ rneirnaaeosn t a gt oI rnv ea SrAaC eant cB - r e u hsl o yf o r t nepti reerrt a ekMI si uve1 u nI vrl LB rrT eat _ s s e aoa aa St o _ TerCeenuun ST I nT R noqqol ti d it SSt ad f swynnwg gin o e y a a o yn y y n c a Wddl t di e e i nl e nik pnmnnmay _ m a 0al cmal ddl nr 0 r o o o ri o o ii a N 1BHRCBWRRWFM O3 ~ r .' s 1 i FORM F-4 I -f 1 QUARTERLY REPORT UNDER SECTION 13 0F THE SECURITIES EXCHANGE ACT OF 1934 For the Six Months Ended June 30, 1987 F.D.I.C. Insurance Certificate Number 00680-7 j i l WILMINGTON TRUST COMPANY Incorporated in the State of Delaware. Employer Identification No. 51-0055023 Rodney Square North Wilmington, Delaware. 19890' Telephone: 302-651-1000 l i Indicate by check mark whether the bank (1) has filed all reports required to be filed by Section 13 of the Securities Exchange Act of 1934 during the 1 preceding 12 months (or for such shorter period that the bank was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.- 1 YES , X NO 1 l o I 1-a _ _ _ _ _ _ _ _ _ _ . _ _ __ _ J 7_ - . C SIGNATURES - l l
- Pursuant to the requirements of the Securities Exchange Act of 1934, the 1
l Bank has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WILMINGTON TRUST COMPANY DATE I 'B 7 A. Samue l Gray . gjr President 'I'- i / ' DATE aI Dale R. Haring Controller 1 l i i (1) ;c =- WILMINGTON TRUST COMPANY ~ ' CONSOLIDATED STATEMENT OF CONDITION AS OF JUNE 30, (In Inousands)- 1987 1986-ASSETS Cash and Due From Banks $ 133,126 $ 131,098 Money Market Assets: ' Time Deposits at Interest -- 20,000 Federal Funds Sold-- 322,900 244,975 Securities Purchased Under Agreements to Resell 156,609 187,781-Total 479,509 452,756 Investment Securities: U.S. Treasury 59,944 68,663 U.S. Government Agency 44,630 46,417 State and Municipal 287,920- 229,853-Other 48,786 14,032 Total 441,280 358,965 -Loans: Commercial 625,483 568,719 Mortgage- 576,629 499,295 Consumer 497,704 467,478 Total . 1,699,816 1,535,492 Reserve for Loan losses (26,128) _(22389) Net Loans 1,6/3,688 T,5 , Premises and Equipment, Net 47,085 43,024 Accrued Interest 18,381 19.994 Other 14,670 11,221 Total $2,807,739 $2,530.161 LIABILITIES Demand Deposits $ 609,308 $ 542,112 Retail Deposits at Interest: Savings 134,427 87,937 Interest Checking 210,167 159,659 Money Market 429,846 400,910 Certificates Under $100,000 476,874 480,254 Total 1,251,314 1,128,760 Managed Liabilities: Certificates $100,000 and Over 421,625 333,523 Federal Funds Purchased 89.557 28,888 Securities Sold Under Agreements to Repurchase 144,266 224,180 U.S. Treasury Demand 52,640 49,661 Total 708,088 636,252 Accrued Interest, Taxes and Other Expenses 44,036 43,422 Notes Payable 3.571 3,774 Other 7,848 7,163 Total 2,524,155 2,361,483 ; 9% Subordinated Capital . Notes _ ,13,400 STOCKHOLDERS' E00!TY* Common Stock ($1.00 par value) Authorized 40 shares Outstanding 1)000000,67$,130 shares in 1987 and 17,472,002 in 1986 17,676 8,736 Capital Surplus 57,269 54,679 Retained Earnings 108,629 91,863 Total 183,574 155,278 Total 52,80/,/39 u ,530,161 *100% stock dividend declared October 16, 1986. (2) SILMINGTON TRUST COMPAN7 CONSOLIDATED STATEMENT OF INCOME , FOR THE SIX MONTHS ENDE0 JUNE 30, (In Thousanos. Except for Per Snare. Data) 1987 1986 INTEREST REVENUE Interest and Fees on Loans $ 77.344 5 77,308 Interest on Money Market Assets: Time Deposits at Interest 594 121 Federal Funds Sold 4,592 2,858 Securities Purchased Under Agreements to Resell 5,477 5,231 Interest on Investment Securities: U.S. Treasury 2,529 2,643 U.S. Government Agency 1,819 2,418 State and Municipal 8,192 11,153 Other 987 437 Total 101,634 102,169' INTEREST EXPENSE Retail Deposits at Interest 36,691 38,597 Managed Liabilities: Certificates $100,000 and Over 16,017 15.771 Federal Funds Purchased 1,853 1,663 Securities Sold Under Agreements to Repurchase 4,821 7,8 74 U.S. Treasury Demand 1,356 1,301 Other Borrowings 388 233 9% Subordinated Capital Notes -- 603 Total 61'136 66 042 Net Interest Income , 95 Jo.u/ Provision for Loan Losses (4,450) (4,500) Net Interest Income After t Provision for Loan Losses 35,948 31,627 OTHER NCOME , I Trust and Investment Management Fees 22,043 18,207 Service Charges on Deposit Accounts 3,108 2,848 Other Operating Income 7,348 5,849 Securities Gains 35 318 i Total ~3T"!GT 'TT'7Fl Net Interest and Other Income 68,482 58,849 OTHER EXPENSE Salaries and Employment Benefits 28,223 25,830 Net Occupancy 2,373 2,324 Furniture and Equipment 3,457 3,157 Stationery and Supplies 1,481 1,400 Other Operating Expense 10 8,494 Total - 8,145 41,205 !NCOME BEFORE INCOME TAXES 22,803 17,644 Applicable Income Taxes 4,581 3,016 NET INCOME $ 18,222 $ 14,628 Earnings Per Share * $ 1.04 $ .84 l Average Shares Outstanding
- 17,605 17,376
- Prior year amounts adjusted for 100% stock dividend declared October 16, 1986.
(3) I _ - _ _ _ _ _ _ _ _ - b ~' - dILMINGTON TRUST COMPANY' d D STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY CONSOLIDAT' ' -FOR THE SIA MONTHS ENDED JUNE 30. (in Thousands) , 1987 1986 Conenon Stock ($1.00 Par Value)* Balance at January 1 $ 17.555 - $ 8,656 Addition IQ 80 r Balance at June 30 $ 17,676 $g-CAPITAL SURPLUS Balance at January 1 $ 55,595 $53,058 Addition 1.674. 1,621 Balance at June 30 $ 57.269 $54,679 RETAINED EARNINGS Balance at January 1 5 96,741 $82,443 Net Income 18,222 14,628 Dividends Declared (6.334) (5,208) Balance at June 30 $108.629 $g- *100% stock dividend declared October 16, 1986.~ (4) c.< rf y,t ; I .- L Wl'MINGTON TRUST COMPANY . . i= ~ CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION - FOR THE-SIX MONTHS ENDED JUNE'30. -(In Thousands) 1987' '1986 Financial Resources Were Provided By (Applied To): Operations: Net income . . $ 18,222 $ 14.628 Noncash Charges - Provision for Depreciation, Loan Losses, Deferred In Taxes ' -Cash Dividends. Paid (6,334) (5,208) Total 18,461 3 83 Deposits and Other Financing Activities: Deposits: Demand ~(86,943) 62,128 Savings 34,638 566. ' Money Market (2,523) 46,871 i Interest Checking Accounts (10,101) 3,018 Certificates Under $100,000 (8.994) 14,358 Certificates $100,000 and Over 125,864 47,314-Total 51,941 174;255-Federal Funds Purchased and Securities Sold Under Agreements to Repurchase (38,8311 17,715 U.S. Treasury Demand (2,360 : (5,339) Notes Payable (163J 64 . Coninon Stock and Capital Surplus 1,795 1,701 . Tot al (39,559) 14,141 Other: - Cash and Due From Banks 63,598 52,593 l Premises and Equipment, Net (6,077) (2,238) Accrued Income and Other Assets 1,261 481 Accrued Interest Payable and Other Liabilities 5.536 3,937 Total 64,318 54,773 Total $ 95,161 $258,978 To Fund Increases In Earning Assets: 1 Tine Deposits at Interest $ -- $ 20,000 Federal Funds Sold and Securities Purchased Under Agreements to Resell 102,099 197,880 Investment Securities (80,696) (77,980) Loans, Net 73,758 119,078 Total $ 95,161 $M 1 l (5) u---_--__
- p,-
t i 1 . 'UILMINGTON TRUST COMPANY- *' : COMPARATIVE
SUMMARY
OF OPERATIONS FOR THE SIX MONTHS ENDE0 JUNE 30, (In Thousands, Except For, Per Share Data) 1987. '1986
!NCOME AND EXPENSE' interest' Revenue . $.101,534 $ 102.169 Trust and Investment Management Fees 22,043 18,207 Other Income. 10,456 8,697 Securities Gains 35 318-Total Income 1 134,068 129,391' Interest Expense 61,1362 66,042, Other Expense. 45.679' 41,205- 1 Provision for Loan tosses 4,450 4,500- H Income Before Income Taxes -22,803- .17,644' Appitcable Income Taxes. 4.581 3,016 Net Income $ 18,222" $ 14,628 Dividends Declared $ 6,334: $ 5,208 Income Taxes - Operations . $ 4,567 $ -2,875
- Securities Gains 14 ~ 141
- Tot al . $ 4,581 $ 3,016 PER SHARE
- 1 Net Income $ 1.04 $ .84 Dividends Declared .36 .30 Book Value 10.39 8.89 Average Shares Outstanding 17,605 17.37'6 i j
l- AVERAGES FOR THE PERIOD i
- Total Assets . $2,652.998 $2,375,300 Loans- 1,656,280 1,478,408 Investments 454,056 497,147 .
Demand Deposits 459,371 373,420 I Retail Deposits at Interest 1,229,330 1,093,461
- Managed Liabilities
Certificates $100,000 and Over 481,171 391,397 q Federal Funds Purchased and Securities i Sold Under Agreements to Repurchase 210,314 264,528 ) U.S. Treasury Demand 43,924 36,225 i Capital Notes -- 13,400 ) Stockholders' Equity 175,477 149,749 4 I
- Prior year amounts adjusted for 100% stock dividend declared October 16, 1986.
]
i 1 I J (6) ) j
d!LQ!NGTON TRUST COMPAN7 CONSOLIDATED STATEMENT OF INCO4E
.FOR THE THREE MONTHS ENDED JUNE 30, 1987 AND MARCH 31, 1987 (In Inousanos, Except for Per Share Data)
June 30 March 31 INTEREST REVENUE Interest and Fees on Loans $39,455 $37,889 Interest on Money Market Assets: Time Deposits at Interest 439 155 Federal Funds Sold 2,840 1,752 Securities Purchased Under Agreements to Resell 2,614 2,863 Interest on Investment Securities: . . U.S. Treasury 1,261 1,268 U.S. Government Agency 896 923 State and Municipal 4,099 4,093 Other 511 476 Total T2" TIT W INTERES'T EXPENSE Retail Deposits at Interest 18,373 18,318 Managed Liabilities: Certificates $100,000 and Over 8,944 7.073 Federal Funds Purchased 854 999 ! Securities Sold Under Agreements to Repurchase 2,351 2.470-U.S. Treasury Demand 717 649 Other Borrowings 181 207 Total TTT26 29,716 1 Net Interest income , 19,703 Provision for Loan Losses (2,200) (2,250) Net Interest income After Provision for Loan Losses 18,495 17,453 OTHER INCOME Trust and Irvestment Management Fees 11,004 11,039 Service Charges on Deposit Accounts 1,590 1,518 Other Operating Income 3,807 3,541 Securities Gains 23 12 Total TETR TCIT6 Net Interest and Other Income 34,919 33,583 OTHER EXPENSE Salaries and Employment Benefits 14,146 14,077 Net Occupancy 1,231 1,142 Furniture and Equipment 1,710 1,747 Stationery and Supplies 809 672 Other Operating Expense 5,377 4,768 Total 23,273 22,406 INCOME BEFORE INCOME TAXES 11,646 11,157 Applicable Income Taxes _2,160 2,a21 NET INCOME $ 9,486 $ 8,736 Earnings Per Share $ .54 $ .50 Average Shares Outstanding 17,631 17,580 (7)
n(, DP. ) CILMINGTON TRUST COMPANV COMPARATIVE
SUMMARY
OF OPERATIONS
, '50R THE THREE MONTHS ENDED JUNE 30, 1987 AND MARCH 31, 1987 (In Thousands, Except, for Per Snare Data).
June 30 March 31 INCOME AND EXPENSE Interest Revenue' $ 52,115 $ -49.419 Trust and Investment Management fees- 11,004 11,039. Other Income 5,397 5.059-
~ Securities Gains 23 12 Total Income ,
68.539 65,529
, Interest Expense 31,420 29.716 Other Expense 23,273 22,406:-
Provision for Loan Losses -2,200 2,250 Income' Before Income Taxes - 11,646 11,157 Applicable Income Taxes 2,160 2,421 Net Income $ 9,486 $ 8,736 Dividends Declared 5 3,170 $ 3,164 Income Taxes - Operations $ 2,151 $ 2,416
- Securities Gains 9 5
- Total -$ 2,160 5 , 2,421' PER SHARE Net Income .
$. .54 $ .50 -
Dividends Declared .18 .18 Book Value 10.39 10.00 Average Shares Outstanding '17,631 17,580' AVERAGES FOR THE PERIOD-Total Assets $2,684,151 52,671,499 Loans 1,679,658 1,632,642 Investments 440,976 467.282 Demand Deposits 451,488 467,342 Retail Deposits at Interest 1,239,008 1,219,545 Managed Liabilities: Certificates $100,000 and Over 521,153 440,745 Federal Funds Purchased and Securities Sold Under Agreements to Repurchase 193,317 227,500 U.S. Treasury Demand 44,433 43,409 Stockholders' Equity 178,380 172,542 t i (8) L.
WILMINGTON TRUST COMPANY CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED JUNE 30, (In Thousands, Except for Fer Share Data) 1987 1986 INTEREST REVENUE Interest and Fees on Loans $39,455 $38,385 Interest on Money Market Assets: Time Deposits at Interest 439 121 Federal Funds Sold 2,840 2,078 Securities Purchased Under Agreements to Resell 2,614 2,759 Interest on Inves**ent Securities: U.S. Treasury 1,261 1,521 U.S. Government Agency 896 947 State and Municipal 4,099 4,471 Other 511 243 Total TT ITT Iti,lTi INTEREST EXPENSE Retail Deposits at Interest 18,373 19,426 Managed Liabilities: Certificates $100,000 and Over 8,944 7.755 Federal Funds Purchased 854 638 Securities Sold Under Agreements to Repurchase 2,351 3,673 U.S. Treasury Demand 717 532 Other Borrowings 181 136 9% Subordinated Capital Notes -- 301 Total M TC4ET Net Interest Income #,695 tic 0b66 Provision for Loan Losses (2,200) (2,250) Net Interest Income After Provision for Loan Losses 18.495 15,814 j OTHER INCOME Trust and Investment Management Fees 11,004 9,547 Service Charges on Deposit Accounts 1.590 1,459 Other Operating Income 3,807 3,297 Securities Gains 23 574 Total TU T2T "IT 377 Net Interest and Other Income 34,919 30,691 l OTHER EXPENSE ! Salaries and Employment Benefits 14.146 12.785 Net Occupancy 1,231 1,200 Furniture and Equipment 1,710 1,625 Stationery and Supplies 809 788 Other Operating Expense 5 377 4 233 Total , ,
)
INCOME BEFORE INCOME TAXES 11,646 10,060 Applicable Income Taxes 2,160 2,385 ! i NET INCOME $ 9,486 $ 7,675 j l Earnings Per Share *
$J $ .44 'j Average Shares Outstanding
- 17,631 k
17.410 j
- Prior year amounts adjusted for 100% stock dividend declared October 16, 1986.
1 (9) I i u_______ _ d
WILMINGTON TRUST COMPANY COMPARATIVE
SUMMARY
OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, (In Thousands, Except For Per Share Data) 1987 1986 INCOME AND EXPENSE Interest Revenue $ 52,115 5 50,525 Trust and Investment Management Fees 11,004 9,547 Other Income 5,397 4,756 Securities Gains 23 574 Total Income 68,539 65,402 Interest Expense 31,420 32,461 Other Expense 23,273 20,631 Provision for Loan Losses 2,200 2,250 Income Before Income Taxes 11,646 10,060 l Applicable Income Taxes 2,160 2,385 l Net Income $ 9,486 5 7,675 { Dividends Declared 5 3.170 $ 2,608 Income Taxes - Operations $ 2,151 5 2,127 l . Securities Gains 9 258
- Total $ 2,160 $ 2,385 PER SHARE
- Net Income $ .54 $ .44 Dividends Declared .18 .15 Book Value 10.39 8.89 Average Shares Outstanding 17,631 17,410 AVERAGES FOR THE PERIOD Total Assets $2,684,151 $2,364,983
, Loans 1,679,658 1,496,129 Investments 440,976 428.085 Demand Deposits 451,488 365,428 Retail Deposits at Interest 1,239,008 1,121,597 Managed Liabilities:
Certificates $100,000 and Over 521,153 394,544 Federal Funds Purchased and Securities Sold Under Agreements to Repurchase 193,317 250,024 U.S. Treasury Demand 44,433 32,350 Capital Notes -- 13,400 Stockholders' Equity 178,380 152,667
- Prior year amounts adjusted for 100% stock dividend declared October 16, 1986. ,
NOTE: MANAGEMENT'S ANALYSIS OF QUARTERLY DATA FOLLOWS ,, (10)
WILMINGTON TRUST COMPANY QUARTERLY REPORT - FORM F-4 FOR THE SIX MONTHS ENDE0 JUNE 30, 1987 MANAGEMENT ANALYSIS OF QUARTERLY INCOME STATEMENTS (See Exhibit A) For the Six Months Ended June 30, 1987 vs. Six Months Ended June 30, 1986 Net Income was $18 222,000 or a 25% increase over the
$14,628,000,or$.$4persbare,$1.04pershare$6.
reported in 19 Net Interest income rose $4,271,000, or 12%. This improvement was primarily the result of an increase of $238,045,000 in Average Earning Assets combined with a smaller increase of $1b5,657 000 in Average Interest-Bearing Liabilities. Net-Interest Margin en a tax-equivalent basis was 4.13% in 1987 compared to 4.78% in 1986. The Provision For Loan Losses was $50,000 lower than last year. Other Income improved $5,312,000, or 20%. Trust and Investment Manacement Fees rose $3,836,000, or 21%, while Other Operating Income increased $1,499,000, or 26%. Other Expense increased $4,474,000, or 11%, mainly due to a $2,393.000, or 9%, increase in Salaries and Employment Benefits and a $1,651,000, or 19%, increase in Other Operating Expense. For the Three Months Ended June 30. 1987 vs. Three Months Ended March 31, 1987 Net Income for the second quarter of 1987 was $9,486,000, or 3.54 per share, a 9% increase over the $8,736,000, or $.50 per share, reported in the first quarter. Net Interest Ir.come anse IM2,000, or 5%. Average Earning Assets increased
$68,684,000, while Average Interest-Bearing Liabilities increased $66,605,000.
Net Interest Margin on a tax-equivalent basis rose from 4.11% to 4.14%. The Provision For Loan Losses was $50,000 less than the previous quarter. Other Income improved $314,000, or 2%, mainly due to a $266,000, or 8%, increase in Other Operating Income. Service Charges on Deposit Accounts rose
$72,000, e 5%.
Other Expense increased $867,000, or 4%. Stationery and Supplies rose $137,000, or 20%, and Other Operating Expense increased $609.000, or 13%. For the Three Months Ended June 30. 1987 vs. Three Months Ended June 30, 1986 i' Second quarter Net Income rose $1,811,000, or 24%, over the $7,675,000, or $.44 per share, reported in the second quarter of 1986. Net Interest Income improved $2,631,000, or 15%. Average Earning Assets rose
$265,068,000, while Average Interest-Bearing Liabilities increased $185,784,000.
Net Interest Margin on a tax-equivalent basis declined from 4.55 to 4.14%. The Provision For Loan Losses was $50,000 lower than the same quarter last year. l Other Income rose $1,547,000, or 10%, primarily as a result of a $1,457,000, or j 15%, increase in Trust and Investment Management Fees. Other Expense increased $2,642,000, or 13%. Salaries and Employment Benefits and Other Operating Expense increased $1,361,000, or 11%, and $1,144,000, or 27%, respectively (11) L w __
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a 1 ,, , PARTICIPATION AGREEMENT ,
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'l dated as of E ptemb,er 15,19S7
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g . among' PERRY ONiFALPHA LIMITED PARTNERSHIP, l r. 1 as Osener Participant 3 ' THE ORIGINAL LOAN PARTICIPANTS LISTED N SCHEDULE 1 HERETO, as Original Lmn Participants , l 1 , j: . BVPS FUNDING ~ CORPORATION, s q as Fe<nding Corporation ' THE FIRST NATIONAL BANK OF BOSTON, in its individual capacity and as Owner Trustee
, l under a Trust Agreement, dated as of 10 ti, f, with the Owner Participant, as Owner Trustee 1.
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-1RVING TRUST COMPANY, 4 in its individual capacity sad as Indenture Trustee under a Trust Indenture. Niortgage. Security Agreement l and Assignme J J Facility Lease, dated as of . .19S7 e
.:6.U/3 Owner Trustte, as Indenture Trmtee d.
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P T OEiO EDISON COMPANY, B as Lessee o i Sale and Leaseback of an Undivided Interest in l' Beaver Valley Power Station Unit 2 AIIIIA
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TABLE OF CONTENTS - _Pau Sr<Tros- ! Definitions . . . . . . .. ..,. . ... . . . I SirTios 2 Participation by the Loan
Participants:
Releveraging: Refunding: 1 Reoptimization . .... . . ... . . .. ... .. .. . Su Tins ' 3 Participation by the Owner Participant: Partial Refund. .. . ... 4 Sumos 4. Purchase. Sale, Financing and Lease of the Undivided Interest. . . . . 4
' Secrtos . 5 - Notice c f Closing: Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 SECTloN 6 ' Representations. Warranties and Agreements of Funding Corporation . . .. 5 SocrlON 7 Representations. Warranties and Agreements of the Owner Participant . ..... 6 SECTjoN 8; Representations, Warranties and Agreements of Owner Trustee. . . . . . . ... 11 , SrcrioN 9 ' Representations, Warranties and Agreements or Indenture Trustee . . ..... 13 Sctmos 10 Representations. Warranties and Agreements of the Lessee. . . ... 14 Samos 11 Conditions Precedent . . . . . . . . . . . . . ... ,, .. . ...... . . . 29 SumoN 12 Consent to Assignment of the Facility Lease: Consent to Indenture . . . 36 SecTios 13 Lessee's Indemnities and Agreements . .. .. .. .. . . . .. 36 Samos 14 Transaction Expenses . . . . . . . . . . . . . ... . ...... . .. . . . . 44 Secr!ON 15 Owner Participant's Transfers ... .. . . .... ..... . . . . .... .. 45 SECr!ON 16 - Brokerage and Finders
- Fees and Commissions . ..... . . 46 SECTION 17 Survival of Representations and Warranties: Binding Effect.. .. 47 SERMON 18 Notices. Etc. . . . . ....... . .. .. .... . , . ... .. . . 47 SECTION 19 Original Loan Participant Provisions ... .. . . .. . .. . . .. 48 ScCTioN 20 Miscellaneous. . ....... . .. .. . . . .. ... .. .. .. 4S SCHEDULES Scurorte1 ' -Participants SCHEDULE 2 -Notice of Closing Scutocts 3 -Bill of Sale and Assignment ScHEneLE 4 -Recordations and Filings Scutorte 5 -Pricing Assumptions ScurocLE 6 -Bene 6ciary Bill of Sale and Assignment b SCHEDULE 7 -Base File Assumptions APPENDIX APPENDIX A-DeBnitions ALPHA
{ CURRENT EN0!NG PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 003.00.00.00 - l l
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. PARTICIPATION AGREEMENT-PanTicirATros AGREEMENT. dated as of September 15. 1967, among PERRY ONE ALPH4 ListTEo PmTsEnsHir. an Ohio limited partnership (the;" Owner Participant"), each of the financial institutions listed in Schedule I hereto under the heading Original L' an o Participants '(each. an " Original Loan 1 Participant" and collectively. the " Original' Loan Participants"). BVPS Fnotw ConronAito% a .
Delaware corporation (the " Funding Corporation"). THE Finst NATros4L Bm or Bostos a national
' banking association, in its indisidual capacity ("FNB") and as Owner Trustee (the " Owner Trenree")-
l under a Trust Agreement dated as of September 15,1987. with the Owner Participant. IRvisc Tnni
. Courm, a New York banking corporation, in its individual capacity ("IT') and as Indenture Trustee (the " Indenture Trustee") under a Trust Indenture. Mortgage, Security Agreement and Assignment of l- Facility Lease, dated as of September 15,1987, with the Owner Trustee, and Ohio EDISON COMem, an ,
Ohio corporation (the " Lessee"), WHEREA5. the Owner Participant desires to cause the Trust (such term, and other capitalized terms used herein without deBnition, being de6ned as provided in Section 1) to purchase the Undivided Interest from the Lessee and leaseback the Undivided Interest to the Lessee and in that - connection to lease certain other property from the Lessee and sublease such other property back to ; the Lessee.
. WHEREAS. the Lessee desires to sell the Undivided Interest to the Trust and lease the Undivided Interest back from the Trust under the Facility Lease and to lease to the Trust and to sublease back from the Trust such other pt '>ert y; WHEREAS. in order to give effect to the foregoing sale and leaseback the Owner Trustee anEl the -
Lessee are willing to enter into the Purchase Documents with respect to the sale and purchase of the - Undivided Interest: WHEREAs. pursuant to the terms and provisions of the Indenture, the Owner Trustee will authorize the creation, issuance and sale and delivery of the Initial Series Notes and the granting of the security therefor, and the Indenture Trustee will authenticate the Initial Series Notes: and WHEREAS, the Original Loan Participants are willing to purchase the Initial Series Notes on the terms and conditions set forth herein: Now, THEREFoRE, in consideration of the premises and of other good and valuable consideration. receipt of which is hereby acknowledged the parties hereto agree as follows: SECTtoN L De[Mitiona. For the purposes hereof, capitalized terms used herein shall have the meanings assigned to such' terms in Appendix A. References in this Participation Agreement to sections paragraphs and elauses are to sections, paragraphs and clauses in this Participation Agreement unless otherwise indicated. SECTios 2. Participation by the Loan
Participants:
Releceraging; Refundina: Reopti nization. (a) Original loan Participants' Commitment. Subject to the satisfaction of the conditions in Sections 5(a) and !!(a), on the Closing Date each Original Loan Participant agrees to lend to the Owner Trustee an amount (a " Loan") equal to such Original Loan Participant's Loan Percentage of 4 . (b) Paymer.t; Tenns of the Initial Series Notes. (1) Payment. Proceeds of the Loans shall be paid directly to the Indenture Trustee. for the account of the Owner Trustee, in immediately available funds. at the Indenture Trustee's Office. ! ALPHA 1
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. I i (2) Terms of the Initial Series Notes. Each Loan shall be evidenced by an Initial Series Note in the principal amount of such Loan issued in the name of the Original Loan Participant making such Loan. The Initial Series Notes shall be issued by the Owner Trustee under and pursuant to the indenture, shall bear interest at the rate per annum, and shall be payable. as set forth in, or determined under. the Indenture and such Initial Series Notes.
(c) Relereraging. . Upon the occurrence of an adjustment of Basic Rent and the schedules of Casualty Values. Special Casualty Values and Modi 6ed Special Casualty Values pursuant to Section 3(d) of the Facility Lease (a " Tax Rate Adjustment") and in connection with the refunding of the Initial Series Notes, subject to the conditions set forth in Section 11(c) and this Section 2. the Lessee
'nay arrange for non-recourse loans to the Lessor ("Relcoeraging Loans") (only from Funding .
. Corporation if Bonds are then outstanding) in an additional amount equal to the amount which is necessary to minimize the net present value (discounted semiannually to the Closing Date at the Discount Rate) of the Basic Rent payments by the Lessee over the Basic Lease Term w hile presersing Net Economic Return. In addition; to the extent the Owner Participant has been required (or would l
otherwise have been required) to adjust Net Economic Return pursuant to the terms of Section 3(O of the Facility Lease, the Owner Participant may request the Lessee to, and upon such request the Lessee shall (unless market conditions ,oreclude it from doing so at a commercially reasonable cost). arrange for such Releveraging Loans in amounts which are necessary to eliminate (or minimize) the impairment of Net Economic Return (which impairment resulted from (or would have re uted from) such adjustment), subject, however, to the constraints set forth in Section 3(O of the Facility Lease. Any Releveraging Loan in connection with a Tax Rate Adjustment may be made within two years of the date of such Tax Rate Adjustment and at such time such further adjustments as are required by the terms of Section 3(0 of the Facility Lease are hereby authorized to be made. To the extent that modi 6 cations to any Transaction Document are required in connection with a Releveraging Loan, such tr'odi6 cations (i) shall satisfy the provisions of Revenue Procedure 75-21. Revenue Procedure 75-2S and any other applicable statute, regulation, revenue procedure, revenue ruling or technical informa-tion release relating to the subject matter of such revenue procedures and (ii) after gising effect to any l adjustments pursuant to Sections 3(d) and 3(O of the Facility Lease shall not, in the opinion of Owner Participant's Special Tax Counsel, adversely affect the tax bene 6ts contemplated by the Owner Participant or any Partner in entering into the transactions contemplated by this Participation Agreement and the other Transaction Documents. The Releveraging Date or Dates shall be mutually acceptable to the Lessee and the Owner Participant (but neither such Person shall unreasonably withhold its acceptance) in respect of the relevant Releveraging Loan. Proceeds of a Releveraging Loan shall be paid directly to the Indenture Trustee, in immediately available funds, at the Indenture Trustee's OfHee, and such proceeds shall be applied as a partial refund of the Investment. Each Releveraging Loan shall be evidenced by a Releveraging Note, which Note shall be issued by the-Owner Trustee under and pursuant to the Indenture, shall be in the principal amount of such Releveraging Loan, bear interest at the rate or rates per annum, and shall be payable, in each case as set forth in, or determined under, the Indenture. (So long as any Initial Series Notes are Outstanding. Releveraging Notes may be issued only if all principal of and interest on all such Initial Series Notes l are simultaneously paid in full.) (d) Nrfamding o/ Notes. Upon the occurrence of each Tax Rate Adjustment upon a refunding of the Initial Series Notes and on no more than two additional occasions during the Lease Term. subject to the satisfaction of the conditions set forth in Section 11(c), on any Refunding Date. Funding Corporation agrees to lend to the Owner Trustee, on a non recourse basis. an amount (a "Refamding Loan") equal to the sum of (i) the amount necessary to refund the Notes theretofore issued and then Outstanding. (ii) [an amount necessary to pay Transaction Expenses relating to such Refunding Loan and (iii)] an amount equal to the Releveraging Amount, if any. Proceeds of a Refunding Loan shall be paid directly to the Indenture Trustee (i) to the extent necessary to refund the Note or Notes ALPHA 2 I
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_I 8 i p l theretofore issued hnd to pay Transaction Expenses relating to such Refunding Loan L in immediately available funds, at the Indenture Trustee's OfBee and (ii) to the extent of the Releseraging Amounb j for the account of the Owner Trustee as a partial refund of the Investment, in immediately asailable i funds. at the Indenture Trustee's Office. Each Refunding Loan shall be represented by a Fixed Rate i Note. w hich Note shall be issued by the Owner Trustee under and pursuant to % Indenture. shall be-in the principal amount of such Refunding Loan and shall bear interest at th- ,tes per annum. ;md .) i shall be payable, as set forth in. or determined under. the Indenture. Not less thn three Business Day s - prior to a Refunding Date. Funding Corporation shall deliver to the Owner Participant and the Lessee
. a certiGente setting forth the information necessary to complete the Fixed Rate Note (including any
. schedule thereto). Upon such delivery, and upon approval by the Lessee and the Owner Participant of the terms thereof, the Owner Participant and the Lessee shall cause the form of fixed Rate Note to be completed. The refundings contemplated by this Section 2(d) shall be effected at the request of the Lessee given in writing at least Sve Business Days prior to the Refunding Date, which request,if in conjunction with a Tax Rate Adjustment, may be given within two years of the date of such Tax Rate
' Adjustment: provided, however, that (I) no such request shall be made or refunding occur while an Event of Default shall have occurred and be continuing: (ii) except as contemplated in Sections 3(d) and 3(f) of the Facility Lease, Net Economic Return shall not be adversely affected thereby f or appropriate adjustments shall have been made or shall be made on the Refunding Date pursuant to l
Sections 3(e) and 3(f) of the Facility Lease to preserve Net Economic Return): (iii) any modifications of the Transaction Documeme shall satisfy the provisions of Revenue Procedure 7541, Resenue - Procedure 75-28 and any other applicable statute, regulation, revenue procedure. resenue ruling or technical information release relating to the subject matter of such revenue procedures: and (iv) such modi 6 cations (after giving effect to any adjustments pursuant to clause (ii) abose) shall not, in the opinion of the Owner Participant's Special Tax Counsel, adversely affect the tax bene 6ts contemplated by the Owner Participant or any Partner in entering into the transactions contemplated by this Participation Agreement and the other Transaction Documents. Subject to the conditions of this Section 2(d) and Section ll(c), the Owner Participant agrees to cooperate with the Lessee in order to accomplish the refunding requested by the Lessee. In setting the terms of Fixed Rate Notes. the Lessee in its sole discretion may determine the number of tranches of debt and the interest r'ates applicable thereto (reflective of actual market conditions) and. based on such determination. the Owner Participant shall determine the principal amount, the amortization schedule and the aserage life applicable to all tranches of Fixed Rate Notes (provided that the aggregate average life of all such Fixed Rate Notes shall not vary from the aggregate average life reflected in the debt amortization schedule for the Initial Series Notes by more than 18 months), including the final maturities thereof which shall be no later than , 20 , so as to minimize the net present value (discounted semiannually to the Closing Date at the DiscoInt Rate) of the Basic Rate payments by the Lessee os er the Basic Lease Term, while preserving Net Economic Return. (So long as any Initial Series Notes are Outstanding. Fixed Rate Notes may be issued only if all principal of and interest on all such Initial l Series Noter are simultaneously paid in full.) (e) Reoptimization. Other than as permitted by Section 2(d), subject to the satisfaction of the conditions set forth in Sections 2(d) and il(c),in connection with any Tax Rate Adjustment. the Lessor and the Lessee shall reoptimize the amortization schedules for the Notes in accordance with. l and in the manner contemplated by Section 3(f) of the Facility Lease. which reoptimization. among other things, shall not change the average life to maturity of the initial Series Notes by more than is
! months. Upon receipt of the information referred to in Section 3.12 of the Indenture. together with con 6rmation thereof from the Owner Participant, the Owner Trustee shall deliver to the Indenture Trustee a certilleate pursuant to such Section 3.12. Notwithstanding the foregoing. the Owner Trustre may rely on such certificate of the Lessee, as so confirmed, and shall have no obligation to serif,s the j same. ,
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l- ) (f) Cooperation. Each of the Lessee, the Owner Trustee. the Owner Participant and each Loan Participant agrees that it will cooperate in connection with any Refunding Loan or Releveraging Loan
~j and enter into such additional agreements and such supplements or amendments to or consents under j i
cach of the Transaction Documents as may reasonably be requested by the Lessee to effectuate the transactions contemplated in connection with any such Refunding Loan and any Releveraging Loan.
- (g) Direction to the Indenture Trustee. The Griginal Loan Participants. as purchasers of the hiitial Series Notes. (i) hereby authorize and direct the Indenture Trustee to execute, deliser ad perform this Participation Agreement. (ii) acknowledge a.'l agree that. In connection with this Participation
. Agreement, the Indenture Trustee shall have tle beneSts and projections of Article VIII of the Indenture and (iii) agree that in the event of a cel3ct between the provisions of this Participation Agreement and the Indenture, except as otherwise sxpressly set forth in Section 19. the Indenture Trustee shall, as between the Indenture Trustee and t<e Original Loan Participants. be fuity protected in relying on the express terms of the Indenture.
SEcTuoN 3. Participation by the Osener Participant; Partist flefund (a) Oscner Participant's Commitment. Subject to the satisfaction of the conditions in Sections 5(a) and II(a), on the Closing Date the Owner Participant agrees to (i) make an equity investment l with respe'et to the Undivided Interest (the "Inrestment") equal to % of the Purchase Price, and (ii) provide to the Owner Trustee an amount equal to Estimated Transaction Expenses. The Owner Participant's Investment is subject to adjustment as provided in paragraph (b) below. Proceeds of the Investment shall be paid directly to the Indenture Trustee, for the account of the Owner Trustee, in immediately available funds, at the Indenture Trustee's Office. The Estimated Transaction Expenses shall be paid to the Owner Trustee in immediately available funds at 100 Federal Street, Boston. Massachusetts 02110, Attention: Manager Corporate Trust Department. (b) Partialliefund. In the event that the Indenture Trustee shall have receised the proceeds of any Releveraging Loan or that portion of the Refunding Loan equal to the Releveraging Amount. the Indenture Trustee shall as soon as practicable (but in any event within two Business Days? return the same to the Owner Participant as a partial refund of the Investment. Secrtos 4. Purchase. Sale, Financing and Lease of the Undicided interest. Subject to (x) the satisfaction of the conditions in Sections 5(a) and II(a), (y) receipt from the Owner Participant of the Investment and an amount equal to Estimated Transaction Expenses and (z) receipt from the Original Loan Participants of the proceeds of the Loans. on the Closing Date the Owner Trustee shall (i) cause-the Trust to purchase the Undivided Interest from the Lessee for the purchase price (the " Purchase Price") set forth in the Notice of Closing and (ii) disburse an amount equal to the Estimated Transaction Expenses in accordsnee with the payment instructions set forth in the Notice of Closing. Subject to the satisfaction or waiver of the conditions in Section II(b), on the Closing Date the Lessee shall sell the Undivided Interest to the Trust for the Purchase Price. Concurrently with such purchase and sale, the Trust shall lease the Undivided Interest to the Lessee, and the Lessee shall lease the Undivided Interest from the Trust, pursuant to the Facility Lease. Secrtos 5. Notice of Closing: Closing. (a) Notice of Closing. On or prior to the Closing Date, the Lessee shall deliver to the Owner Participant the Owner Tnastee, the Original Loan Participants and the Indenture Trustee a notice. substantially in the form of Schedule 2 (the " Notice ofClosing"), which shall (1) state that the Closing Date shall occur on the date speci6ed therein. (ii) set forth the Purchase Pnce and a list of the t'ien known Transaction Expenses payable by the Owner Trustee pursuant to Section 14(a). (" Estimated Transaction Expenses") and (iii) provide payment instructions in respect of the disposition of the Purchase Price.
~
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= OHIO EDISON CD. BOWNE OF NEW YORK (2127924S500 _I i , tb) Closing. Upon satisfaction or waiver of the conditions in Section 5(a) and Section ll(a) and upon receipt from the Owner Participant of the Investment and the amount of Estimated Transaction Expenses and from the Original Loan Participants of the proceeds of the Loans. on the Closing Date the Owner Trustee shall (i) Instruct the Indenture Trustee to pay an amount equal to the Purchase Price and (ii) disburse the Estimated Transaction Expenses. in each case in immediately atadable funds and in accordance with the payment instructions in the Notice of Closing. (*pon satisfaction or l w aiser of the conditions in Section ll(b). on the Closing Date, the Lessee shall esecute and delis er to the Owner Trustee the Bill of Sale. Sumos 6. Representations. Warranties and Agreements of Funding Corporation. (a) Funding Corporation represents and warrants that: (1) Due Organfration. Funding Corporation is a corporation duly organized and validly existing in good standing under the laws of the State of Delaware and has the corporate power and authority to carry on its business as presently conducted, own its properties, and enter into and perform its obligations under this Participation Agreement. (2) Due Authorization: Enforceability. The execution, delivery and performance by Funding Corporation of this Participation Agreement have been duly authorized by all necessary corporate action on the part of Funding Corporation and do not require the consent or approval of the stockholder of Funding Corporation. This Participation Agreement has been duly executed and delivered by Funding Corporation and constitutes a legal, valid and binding agreement of Funding Corporation enforceable against it in accordance with its terms. (3) No Violation. Neither the execution, delivery or performance by Funding Corporation of this Participation Agreement nor the consummation by Funding Corporation of the transac-tions contemplated hereby, nor compliance by Funding Corporation with the prosisions hereof conflicts or will conflict with, or results or will result in the breach of any provision of, the Certi6cate of Incorporation or By-Laws of Funding Corporation or any indenture, mortgage or agreement to which Funding Corporation is a party or by which it or its property is bound or
' contravenes any Federal, Delaware or New York law applicable to it or requires any Cosernmen-tal Action with respect to Funding Corporation under any Federal, Delaware or New York law applicable to it.
(4) No Other Business. Except as contemplated by this Participation Agreement and the other Transaction Documents and except as otherwise contemplated by the Section 6(e) Application, Funding Corporation has not engaged in any business or activity of any type or kind whatever, ( (5) ERISA. Funding Corporation will not acquire any Note with the " plan assets" of any
" employee bene 6t plan" within the meaning of section 3(3) of ERISA or any " plan" within the meaning of section 4975(e)(1) of the Code.
(6) Incestment Representations. Funding Corporation will acquire each Note to be acquired by it hereunder and under the Indenture solely for purposes of pledging such Note to the Collateral Trust Trustee to secure Bonds issued from time to time under the Collateral Trust Indenture. Funding Corporation understands that no Note to be acquired by it hereunder or under the Indenture will have been registered under the Securities Act and that each such Note will bear the legend set forth in Section 4.5 of the Indenture. (b) Agreements. Funding Corporation agrees that: (1) Transfers ofNotes. An> transfer or assign nent of any Note acquired by it or of all or any ; part of Funding Corporation's interest hereunder or under any other Transaction Docunient or any Financing Document shall be effected in a transaction constituting an exempt tram.saction under the Securities Act and on the express condition that the transferee. assignee or participant ALPIIA i 5 i CURRENT ENDING PAGE CONDTTIONS ARE 0.K. THE NEXT PAGE : 008.00.00.00 - 1 l )
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. OHIO EDis0N CO. 80WWE OF NEW YORK (212M2eS500
-I i , ,
d l shall agree to be bound by the terms and provisions hereof and thereof. Funding Corporation will i not sell, exchange or transfer any Note to any other Person (other than the Collateral Trust i Trustee) unless such transferee delivers to the Lessee, the Owner Participant. the Owner Trustee j and the Indenture Trustee a representation and warranty (and an opinion of counsel satisfactory ! to each such Person) to the effect that neither the transfer of meh Note to. nor the ownership of such Note by, such transferee will cause such transferee, or any such Persons. to be engaged in a )
" prohibited transaction", as de6ned in section 406 of ERISA or section 4975 of the Code. w hich is i not at such time subject to an exemption contained in ERISA or in the rules, regulations. releases or bulletins adopted thereunder. l I
(2) Prepayment of Bonds. Except as provided in this Participation Agreement. Funding Corporation will not reBnance or optionally prepay any Bond issued in connection with any Note without the consent of the Lessee. (3) Quiet Enjoyment. Funding Corporation acknowledges Section 6(a) of the Facility Lease. (4) No Other Business. During such time as any Note acquired by Funding Corporation is outstanding and held by the Collateral Trust Trustee as security for obligations of Funding Corporation, Funding Corporation will not (i) engage in any business or activity other than (1) in 3 connection with the Transaction Documents or (2) as otherwise contemplated by the Section 6(c) Application or (ii) amend or engage in any activity or take any action not permitted by Article THIRD, FOURTH or SLXTH ofits Certi6cate ofIncorporation, as in effect on the date of executici and delivery hereof, without, in each case, the consent of the Lessee, the Owner Participa:.t. the Ow: er Trustee and the Indenture Trunee. (c) Agreements With the Indenture Trustee. Funding Corporation hereby (i) acknowledges and agrees that, in connection with this Panicipation Agreement, the Indenture Trustee shall have the bene 6ts and projections of Article VHI of the Indenture and (ii) agrees that, to the extent it becomes a Loan Participant,in the event of a conflict between the provisions of this Participation Agreement and the Indenture, the Indenture Trustee shall, as between the Indenture Trustee and Funding Corpora-tion, be fully protected in relying on the express terms of the Indenture. Secnos 7. Representations, Warranties and Agreements of the Osener Participant. (a) Representations and Warranties. The Owner Participant represents ,and warrants that: (1) Due Organization. The Owner Participant is a limited partnership that has been properly formed under the laws of the State of Ohio and has the power and authority to enter into and perform its obligations under this Partfeipation Agreement and each other Transaction Document to which it is, or is to beceme on or before the Closing Date. a party. (2) Due Authorization. This Participation Agreement and each other Transaction Docu-ment to which the Owner Participant is, or is to become on or before the Closing Date, a party have been duly authorized by all necessary partnership action on the part of the Owner Participant and do not require the consent or approval of the Partners or any trustee or holder of any ofits indebtedness or other obligations. except such as have been, or on or before the Closing Date will have been duly obtained, gisen or accomplished. (3) Exception. TSis Partbipation Agreement and each other Transaction Document to which the Owner Participant is, or is to become on or before the Closing Date. a party hase been. or on or before the Closing Date will hase been. duly executed and delisered by the Owner Participant and constitute, or upon execution and delivery thereof will constitute. its legal. s alid
! and binding agreement, enforceable against it in accordance with their respectise terms.
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(4) No Violation. Neither the execution, delivery or performance by the Owner Participant of this Participation Agreement or any other Transaction Document to which it is, or is to become on or prior to the Closing Date, a party, nor the consummation by the Owner Participant of the transactions contemplated hereby or thereby, nor compliance by the Owner Participant with the provisions hereof or thereof, conflicts with, or results in the breach of any prosision of, or is inconsistent with, the Limit +d Partnership Agreement or contravenes any Applicable Law applicable to it or any Partner or any of their respective Afhliates, or any indenture, mortgage or agreement for borrowed money to which the Owner Participant is a party or any other agreement or instrument to which the Owner Participant or any Partner is a party or by which it or its property, or by which any Partner or the property of any such Partner is bound, or requires any Governmental Action with respect to the Owner Participant or any Partner under Federal or New York law or the law of the jurisdiction of its organization or the jurisdiction of incorporation or organization of any Partner on or before the Closing Date, except such as are contemplated by the Transaction Documents or such as have been, or on or before the Closing Date will have been. duly obtained, given or accomplished; provided, however, that the Owner Participant makes no representation or warranty as to any Applicable Law or Governmental Action relating to the Securities Act, the Securities Exchange Act, the Trust Indenture Act, the Federal Power Act, the Atomic Energy Act, the Nuclear Waste Act, ERISA (except as set forth in Section 7(a)(8) below), the Holding Company Act, Title 49 of the Ohio Revised Code, Title 66 of the Pennsylvania Consolidated Statutes Annotated, energy or nuclear matters, public utilities. the environment, health and safety or Unit 2 or the property purported to be covered by the Ground Lease or other ancillary agreements. (5) No Owner Participant's Liens. Neither the execution and delivery by the Owner Participant of this Participation Agreement or any other Transaction Document to which the Owner Participant is, or is to become on or before the Closing Date, a party, nor the performance by the Owner Participant of its obligations hereunder or thereunder, will subject the Trust Estate or the Lease Indenture Estate, or any portion of either thereof, to any Owner Participant's Lien. (6) No Sales or Solicitations. [Except as described in the letter delivered to the Lessee on the Closing Date.] neither the Owner Participant nor any Partner nor anyone acting on behalf of any of them has directly or indirectly offered or sold, or solicited any offer to acquire, any
! beneficialinterest in the Trust Estate or any Note or any limited partnership interest in the Owner Participant.
(7) No Prior Security Interest. There exists no security interest in or other Lien on the Lease Indenture Estate in the state of the principal place of business of the Owner Participant or that of l any Partner, or the State of Ohio, or the Commonwealth of Pennsylvania arising as a result of claims against the Owner Participant, or any Partners unrelated to the transactions contemplated by the Transaction Documents which is prior to the Indenture Trustee's security interest in the Lease Indenture Estate. (8) ERISA. The Owner Participant is not ac. quiring its interests in the Trust with the " plan assets" of any " employee benefit plan" within the meaning of Section 3(3) of ERISA or any " plan" within the meaning of Section 4975(e)(1) of the Code. (b) Agreements of the Owner Participant. The Owner Participant agrees that: (1) No Owner Participant's Liens. The Owner Participant will not create or permit to exist. and at its own cost and expense, will promptly take such action as may be necessary duly to discharge, all Owner Participant's Liens, except for choata Liens that hase been bonded for the full amount in dispute or as to which other secu% arrangements satisfactory to the Lessee and the Indenture Trustee shall have been made and which are being contested by the Owner Participant in good faith and by appropriate proceedings so long as such contest shall not h) invohe any danger of the sale, forfeiture or loss of the Undivided Interest or any part thereof or l ALPilA l I 7 1 ( _ CURRENT ENDING PAGE CONDITIONS ARE 4K. THE NEXT PAGE : 010.00.00.00 i l 1
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. , OHIO EDisCN CD. 80wNE OF NEW YORK PCN: 010.00.00.00 S/N: 7
' (21219745300
_,,1 i I interest therein, (y) interfere with the use, possession or disposition of the Undivided Interest or j any part thereof or interest therein or (z) impair any payment of Rent. (2) Quiet Enjoymer t. The Owner Participant acknowledges the provisions of Section 6(a) of the Facility Lease and Section 8(b)(5) of this Participation Agreement. (3) No-Petition Agreement. Following the issuance of the initial series of the Bonds and i prior to the 181st day following the payment in full of the Bonds and the discharge in accordance
-{
with its terms of the Collateral Trust Indenture, the Owner Participant agrees that it will not file a ' petition, or join in the Bling of a petition, seeking reorganization, arrangement. adjustment or composition of, or in respect of, Funding Corporation under the Bankruptcy Code. or any other applicable Federal or state law or the law of the District of Columbia. (4) Special Transfer of Enterest in the Tnat Estate. A. Upon the occurrence of a Special Transfer Event, the Owner Participant may (in the case of a Discretior,ary Special Transfer Esent) and shall (in the case of a Mandatory Special Transfer Event) assign, convey and transfer to the l Lessee all of the Owner Participant's right, title and interest in, to and under the Trust Estate (except Excepted Rights and the right to receive Excepted Payments) (a "Special Transfer"): provided that the Special Transfer shall be deemed to occur automatically upon the occurrence of an Automatic Special Transfer Event (such type of Special Transfer being referred to herein as an
" Automatic Special Transfer") without any action on the part of the owner Participant. the On ner
. Trustee, the Indenture Trustee, the Lessee or any other Person. The Special Transfer shall be
.l made without recourse, representation or warranty by the Owner Participant. other than the covenant to promptly remove any Owner Participant's Liens which may then exist on the Trust Estate or the Undivided Interest Except in the case of an Automatic Special Transfer. the Special Transfer shall be effected by the execution and delivery by the Owner Participant to the Lessee of a Bill of. Sale and Assignment substantially in the form of Schedule 3 hereto (and upon the execution and delivery thereof and the furnishing of executed counterparts thereof to the Owner Trustee such Special Transfer shall be effective without any action by the Owner Trustee, the Owner Participant, the Lessee, the Indenture Trustee or any other Person). The Owner Participant agrees promptly upon the request of the Lessee after the occurrence of an Automatic Special Transfer to execute and deliver such Bill of Sale and Assignment to the Lessee and to furnish executed counterparts thereof to the Owner Trustee. Lessee hereby agrees to accept the Special Transfer and the parties hereto acknowledge and agree that at the time of the Special Transfer Lessee shall be deemed to be a Transferee that has satis 6ed all conditions set forth in Section 15(a) of this Participation Agreement.
B. If, upon or following a Special Transfer, the Owner Participant shall hase receised the Required Rent Payment Amount in full, or payment of all principal of. and interest on. the Secured Obligations in full, (1) the obligation of the Lessee to pay further Basic Rent shall be reduced to an amount payable on each Basic Rent Payment Date thereafter, equal to the aggregate amount of principal, premium, if any, and accrued interest then payable on all Notes then Outstanding, and (ii) the Facility Lease shall become a security agreement for all purposes of Applicable Law. C. If, upon a Special Transfer the Owner Participant shall not hase receised the Required Rent Payment Amount in full, the Lessee shall thereupon be obligated to pay to the transfernne Owner Participant, directly and not as a part of the Trust Estate (or,in the event that the Lessee l shall become th6 Owner Participant hereunder upon the transfer to it of the partnership interest l of each Partner referred to in Section 7(b)(6), to each Partner in proportion to its Interest (as defined in the Limited Partnership Agreement) immediately prior to such transfer), an amount equal to the Required Rent Payment Amount (less the amount theretofore drawn under the Letter of Credit with respect to the relevant Special Transfer Event (s) (or the relesant es ents or ALPilA 8 _. CURRENT ENDING PAGE CONDm0NS ARE 0.K. THE NEXT PAGE : 01L 00.00.00 t l
.(
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ti .. j' 80whE OF NEW YORK (21219249500 i , circumstances analogous to the Special Transfer' Events)) or that portion of such Required Rent Payment Ainount (less the amount theretofore drawn under the Letter of Credit with respect to such Special Transfer Event (s) (or such events or circumstances analogous to the Special Transfer Eser.ts)) which shall not have been paid. together, in each case, with interest on the unpaid
. balante thereof at the Os erdue Interest Rate from the date of such 3pecial Transfer until pannent of such amount in full (the " Secured Obligation.s".). All or any portion of the Required Rent Payment Amount received by the transferring Owner Participant 'shall be applied by the.-
transferring Owner Participant to the payment or prepayment of the Secured Obligations (as between principal thereof and interest thereon as the transferring Owner Participant shall elect and shall advise the Lessee), D. The Secured Obligations shall be secured by (and the Lessee hereby grants to' the transferring Owner Participant a security interest in and general lien upon) all of the right, title and interest of the lessee as successor Owner Participant in. to and under the Trust Estate. In connection therewith, the Lessee as successor Owner Participant hereby agrees as follows: (1) The transferring Owner Participant shall ha$e all of the rights and remedies of a secured party under the Uniform Commercial Code as in effect in the State of New York (as such law may at any time be amended). (ii) Upon the occurrence of such Special Transfer, the Lessee as successor Owner Participant shall appoint, and hereby does appoint the transferring Owner Participant its attorney-in-fact, irrevocably, with full power of substitution, to the exclusion of the Lessee as successor Owner Participant, to ask for, require, demand, receive and gis e acquittance for any and all moneys and claims for moneys due and to become due to the Lessee as successor Owner Part.cipant under or arising out of the Trust Estate, to endorse any checks or other l instruments or orders in connection therewith, to take any action (including the Sling of Snancing statements or other documents and the delivery of wntten instructions to the Owner Trustee and the Indenture Trustee specifying that all payments to be made to the Lessee as successor Owner Participant under the Trust Agreement and the Indenture shall be made directly to the transferring Owner Participant so long as any portion of the Secured l Obligations remains outstanding) and to institute any proceedings which the transferring Owner Participant may deem necessary or appropriate to protect and preserve the security - interest of the transferring Owner Participant in the Trust Estate and the rights of the transferring Owner Participant to receive payments thereunder. (iii) Upon the occurrence of such Special Transfer, and until the Secured Obligations ! have been paid in full, the Lessee (in its capacity as Lessee and as successor Owner Participant) shall not, without the prior written consent of the transferring Owner Partici-pant, take any action or deliver any instruction under any Transaction Document the effect of which would be to (A) relieve or otherwise affect the obligation of the Lessee to make such payments, (B) terminate the Trust Agreement, (C) terminate or rescind the Facility Lease. l (D) sell, assign, transfer, deliver or encumber in any way the Trust Estate to any Person or (E) accept, or approve, any amendment to, or waive any provision of, any Transaction I Document. l l (iv) The Lessee (for itself, as the Lessee, and as successor Owner Participant) cosenants and agrees to do all such acts and execute all such instruments of further assurance as shall be reasonably requested from time to time by the transferring Owner Participant for the I payment of the Secured Obligations and for the pu pose of fully carrying out and effectuating the provisions of this Section 7(b)(4) and the intent hereof. ALPHA e 9
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, OH10 EDisch C0 80wht OF NEW YOAK (21119285500
- d i
,~ l E. On the date which is 100 days after the receipt by the Owner Participant of all amounts due to the Owner Participant pursuant to this Section 7(b)(4), the security interest and lien ;
hereinabove provided shall, so long as the Lessee is not then the subject of any bankruptcy. insolsency or similar proceeding, terminate, and the transferring Owner Participant. at the request of the Lessee as successor Owner Participant. shall execute and deliser to the Lessee as successor Owner Participant such termination statements. releases or other instruments presented to the j transferring Owner Participant as shall be reasonably required to effect such termination. l F. The obligations of the Lessee under this Section 7(b)(4), including without limitation. the obligation to pay and discharge the Secured Obligations, are absolute and unconditional and shall not be affected by (i) the sale (by foreclosure or otherwise) or termination of the Facility ( " Lease, (ii) any action or inaction by the Indenture Trustee, the Collateral Trust Trustee or any other Person under or with respect to any Transaction Document or the Collateral Trust Indenture, (iii) the failure of the transferring Owner Participant to receive any Required Rent , Payment Amount made by the Lessee under the Facility Lease (by operation of Section 5.2 of the j Indenture or otherwise), (iv) the acquisition by the Lessee of any interest in the Owner l- Participant or any Partner or (v) any other condition or event. C. The Lessee warrants to and for the beneGt of the Holders of Notes that, except as expressly permitted in this Section 7(b)(4) a Special Transfer effected in accordance with the {' provisions of this Section 7(b)(4) will not invalidate, impair, Interrupt or otherwise restrict the Lessee's obligation to pay Rent in accordance with the terms of the Facility Lease or the Lessor's rights and remedies with respect to such obligation. The Lessee covenants that it will designate an Affiliate as transferee in connection with a Special Transfer if such designation is necessary to prevent a breach of the warranty in the foregoing sentence. The Lessee agrees that (i) it will provide to the Indenture Trustee an opinion of counsel, in form and substance satisfactory to the Indenture Trustee, to the effect that, except as expressly permitted in this Section 7(b)(4). the Special Transfer did not, at the time thereof (or, if delivered prior to the Special Transfer. will
'not), invalidate, impair, interrupt or otherwise restrict the Lessee's obligation to pay Rent in accordance with the terms of the facility Lease. (ii) the opinion of counsel described in subclause (i) of this sentence will, if practicable in the Lessee's judgment, be delivered to the Indenture Trustee prior to the Special Transfer, but in no event before the date on which the esent giving rise to the Special Transfer occurred or more than 30 days after the date of the Special Transfer.
and (iii) if the opinion of counsel described in subclause (i) of this sentence is not delivers-d in accordance with subclause (ii) of this sentence, such non-delivery shall be deemed to be and shall conclusively establish that the Lessee breached the warranty contained in the Grst sentence of this paragraph. Anything to the contrary notwithstanding, nothing herein shall be construed or l interpreted to mean or imply that the Owner Participant or the Lessee cannot effect a Special Transfer on the terms and in the manner described herein or that a breach of the Lessee's j warranty in the first sentence of this paragraph G shall affect in any way the Owner Participant's entitlement to payment in accordance with this Section 7(b)(4). Following an Assumption Esent, the Lessee shall promptly commence and diligently pursue all of the conditions set forth in j Section 3.9(b) of the Indenture and upon satisfaction of such conditions assume the obligation ' represented by the Initial Series Notes, notwithstanding any intervening Special Transfer. H. In the event that the Lessee shall become the Owner Participant hereunder upon the transfer to it of the partnership interests of all Partners upon a drawing under the Letter of Credit l pursuant to Section 7(b)(6), all references to the transferring Owner Participant under thu ; Section 7(b)(4) shall be deemed to refer to each Person which shall base been a Partner immediately prior to such transfer, and all amounts stated to be payable to the transferring Ow ner Participant and all security interests stated to be granted to the transferring Owner Participant I ALPHA ( 10 l l CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : On 00.00.00 I I l l [. _ . . _ _ _ . _ _ ____________i
suuss e sauvmv r,emum, soiem va vus Joo i peocucassinoco0 25 s2sompacsa gxoncta.txs. 3.s 87 nas f sta s2so*4 (sivtts)sivLt003 esT.to r* ors:ssem.rcH6PXJPR00 setticarf0000088 Fmt- C. 100 ( s.e ism ue 1200pomu not ne noo,vmi as JOB: Y38958 PCN: 013.00.00.00 S/N: 7 l , OHIO E0is0N CD. BowNE OF NEW YORM (212J9245500 ! I I shall be paid or granted to each such Person in proportion to its Interest (as deEned in the Limited ' Partnership Agreement) immediately prior to such transfer. L The Loan Participants. the Indenture Trustee the Owner Trustee and the Funding Corporation hereby expressly acknowledge and agree to the provisions of this Section Tib)(0. f ($) Letter of Credit Adjustments. As among the Lessor, the Owner Participant and the Lessee, the Owner Participant agrees. so long as neither a Default. Esent of Default. Reimlmrse. ment Default or Reimbursement Esent of Default has occurred and is continuing nor an Esent of Loss or Deemed Loss Event has occurred with respect to which demand for payment has been ! made under Section 9(c) or 9(d) of the Facility Lease, as the case may be or in response to w hich a Special Transfer has been effected, but subject in all events to Section 10(b)(3)(ix) hereof. (i) to effect at the request of the Lessee, if and to the extent permitted by any Letter of Credit, adjustments in the schedule or schedules of amounts that may be drawn under such Letter of Credit upon each adjustment to the schedule of Modi 6ed Special Cascalty Values attached to the Facility Lease and (ii) at the request of the Lessee, to effect. If and to the extent permitted by any Letter of Credit, a permanent reduction in the stated amount of any Letter of Credit so long as no such reduction shall cause the Lessee to be in default under any Transaction Document, j (6) Transfer of Partnership Interest. In connection with a Snal drawing by any Benefeiary ! under any Letter of Credit, the Owner Participant shall as promptly as practicable cause each l Partner that has received proceeds from such Snal drawing to execute and deliser to the L.,see a BeneHeiary Bill of Sale substantially in the form of the Beneficiary Bill of Sale attached hereto as Schedule 6. No amendment to any of the provisions of the Limited Partnership Agreement relating to any such obligations of the Partners thereunder shall be made without the prior consent of the Lessee. Seciton 8. Itepresentations. Warnanties and Agreements of Oxener Trustee. (a) Representations and Warranties. FNB, as Owner Trustee and (except as otherwise provided in the last sentence of this Section 8(a)) in its individual capacity, represents and warrants that: (1) Due Organization. FNB is a national banking association duly organized and salidly existing in good standing under the laws of the United States of America and has all requisite corporate power and authority to enter into and perform its obligations (x) under the Trust Agreement and, to the extent it is a party hereto in its individual capacity, this Par +icipation Agreement and (y) acting as Owner Trustee, this Participation Agreement and each other Transaction Document to which FNB is, or is to become on or before the Closing Date, a party as Owner Trustee. (2) Due Authorization; Enforceability: Etc. This Participation Agreement and each other Transaction Document to which FNB is, or is to become on or before the Closing Date, a party have been duly authorized by all necessary corporate action of FNB (in its individual capacity or as Owner Trustee, as the case may be) and, upon execution and delivery hereof and thereof. this Participation Agreement and each such other Transaction Document will be duly executed and delivered and will be legal, valid and binding agreements of FNB enforceable against it (in its respectise capacities) in accordance with their respective terms;it being understood that FNB is not making any representation or warranty as to the priorities of the Liens created or to be created under any Transaction Document, title to the Trust Estate or recordings or filings necessary in connection therewith. (3) Notes. Upon execution of any Note to be issued by the Owner Trustee hereunder and under the Indenture, authentication thereof by the Indenture Tru> tee pursuant to the Indenture and delivery thereof against payment therefor in accordance with this Participation Agreement, such Note will be a legal, valid and binding obligation of the Owner Trustee. enforceable against the Owner Trustee in accordance with its terms. ALP!lA ! 11 i CURRENT ENDING PAGE CONDITIONS ARE 0 K. THE NEXT PAGE : 014.00.00.00 I i i
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_l 6 i (4) No Violation. Neither the execution and delivery by (x) FNB of the Trust Agreement and. to the extent FNB is a party hereto in its individual capacity, this Participation Agreement and (y) the Owner Trustee of this Participation Agreement and each other Transaction Document (other than the Trust Agreement) to which the Owner Trustee is.or is to become on or before the Closing Date, a party, nor the performance by FNB.'in its individual capacity or as Owner Trustee, as the case may be. ofits obligations under each thereof. conflicts with, or results in the breach of any provision of. its Articles of Association or By Laws or contravenes any Applicable Law of the United States of America or the Commonwealth of Massachusetts governing the banking or trust l . powers of FNB. 'or contravenes any provision of, or constitutes. a default under. any indenture, mortgage, contract or other instrument to which FNB is a party or by which it .is bound or requires any Governmental Action with respect to the Owner Trustee under any Federal or Common-wealth of Massachusetts law, except such as are contemplated by the Transaction Documents or such as have been, or on or before the Closing Date will have been, duly obtained. given or accomplished: provided, however, that no representation or warranty is made with respect to the right, power or authority of FNB or the Owner Trustee to act under the Operating Agreement or l the License in respect of the Undivided Interest, Unit 2 or the property purported to be covered by the Ground Lease, and the Owner Trustee makes no representation or warranty as to any Applicable Law or Governmental Action relating to the Securities Act, the Securities Exchange Act the Trust Indenture Act, the Federal Power Act, the Atomic Energy Act. ERISA. the Nuclear Waste Act, the Holding Comnany Act, Title 49 of the Ohio Revised Code. Title 66 of the Pennsylvania Consolidated Statutes Annotated, energy or nuclear matters. public utilities, the environment, health and safety Unit 2 or the property purported to be covered by the Ground Lease. (5) Defaults. To the best kriowledge of the Owner Trustee, no Indenture Default or
' Indenture Event of Default has occurred and is continuing. The Owner Trustee is not in violation of any of the' terms of this Participation Agreement or any other Transaction Document to which it is, or is to become on or before the Closing Date, a party.
(6) Litigation. There is no action, suit, investigation or proceeding pending or, to the knowledge of FNB, threatened against FNB (in any capacity) before any court. arbitrator or
. administrative or governmental body and which relates to its banking or trust powers which, individually or in the aggregate, if decided adversely to the interests of FNB in such capacity, would have a material adverse effect upon the ability of FNB (in any capacity) to perform its obligations under this Participation Agreement or any other Transaction Document to which it is, or is to become on or before the Closing Date, a party (in any capacity).
(7) Location of the Chief Place of Business and Chief Executice Ofce, etc. The chief place o( business and chief executive office of the Owner Trustee and the office where its records concerning the accounts or contract rights relating to the transaction contemplated hereby are kept is located in Boston, Massachusetts. (8) No Prior Securitg/ Interest. There exists no security interest in the Lease Indenture Estate
! in the States of Ohio. Pennsylvania. New York or Massachusetts arising as a result of any claim against FNB unrelated to the transactions contemplated by the Transaction Documents or the Financing Documents which is prior to the Indenture Trustee's security interest in the Lease Indenture Estate.
(9) No Oicner Truster's Liens. Neither the execution by FNB (in any capacity) of this Participation Agreement or any other Transaction Document to which it (in any capacity) is. or is to become on or before the Closing Date, a party, nor the performance in such capacity by it ofits obligations hereunder or thereunder, will subject the Trust Estate or the Lease Indenture Estate. or any portion thereof, to any Owner Trustee's Lien. ALPHA 12 4
)
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The representations and warranties in Section 8(a)(2) and Section 8(a)(3). as to Transaction
. Documents and the Notes issued thereby being legal, valid and binding obligations enforceable in accordance with their respective terms, are given only by FNB in its capacity as Owner Trustee and not in its individual capacity, except that FNB does represent in its indisidual capacity that it is authorized under the laws of the Commonwealth of hlassachusetts to execute and deliser the Transaction Documents to which it is a party.
(b) Agreements. FNB agrees, in its individual capacity, or, as to clauses (2) and (6) below. as Owner Trustee, that:
. (1) Diacharge ofLiens. FNB will not create or permit to exist, and will, at its own cost and l expense, promptly take all such action as may be necessary duly to discharge, al. Owner Trustee's Liens.
(2) Certain Amendments. The Owner Trustee agrees that unless an Event of Default has occurred and is continuing, the Owner Trustee will not amend any of the payment terms of any Note, or take any action to refund any Note after the date ofissue thereof pursuant to the terms of this Participation Agreement and the Indenture without the prior written consent of the Lessee, The Owner Trustee agrees that except for amendments or supplements. if any. contemplated by ! Section 7(b)(4), the Owner Trustee will not amend or supplement, or consent to any amendment of or supplement to, the Trust Agreement if such amendment or supplement would materially and adversely affect the rights or obligations of the Lessee under the Facility Lease or this Participa-tion Agreement without the prior written consent of the Lessee unless an Esent of Default has occurred and is continuing or the Lease Termination Date has occurred. (3) Change in Location of the Chief Place of Business and Chief Executive Ofce, etc. VNB shall notify the Lessee, the Loan Participants, the Owner Participant, Funding Corporation, and the Indenture Trustee promptly after any change in its chief executive ofBee, principal and chief place of business or place where its records concerning the accounts or contract rights relating to the transactions contemplated hereby are kept. (4) No Petition Agreement. Following the issuance of the initial series of Bonds and prior to the 181st day following the payment in full of the Bonds and the discharge in accordance with its terms of the Collateral Trust Indenture, FNB (in any capacity) agrees that it will not file a petition, or join in the Bling of a petition, seeking reorganization, arrangement, adjustment or composition of or in respect of Funding Corporation under the Bankruptcy Code or any other applicable Federal or state law or the law of the District of Columbia. (5) Quiet Ergoyment. FNB acknowledges Section 6(a) of the Facility Lease. (6) License Matters. The Owner Trustee acknowledges that before taking possession of the l Undivided Interest or any part thereof or of any other interest in BVPS, either of the following may be required: (i) the issuance of an appropriate license from the NRC, whether by amendment to the License or otherwise, or (ii) a partial transfer of the License authorizing the Lessor to l possess its interest in BVPS, to the extent of the Undivided Interest, upon application for partial transfer of such License to such extent Gled pursuant to Applicable Law. Neither the Ow ner Trustee nor the Owner Participant shall have any responsibility whatsoever to take or initiate any action with respect to any NRC licensing matter. SecTioN 9. liepresentations, warranties and Agreements ofIndenture Trustee (a) Representations and Warranties. IT represents and warrants that: (1) Due Organization. IT is a banking corporation duly organized and validl> existmg in
)
l good standing under the laws of the State of New York and has the corporate power and authorits j j ALPHA I 13 _ CURRENT ENDING PAGE CONDITIONS ARE 01 THE NEXT PAGE : On00.00.00 - 1 I t-- -- - _ _ - . - - - - - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
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i_ I l l and legal right to enter into and perform its obligations under the Indenture. this Participation , Agreement and each other Transaction Document to which it is, or is to become on or before the 4 Closing Date, a party. (2) Due Authori:ation- This Participation Agreement and each other Transaction Docu-ment to which IT is. or is to become on or before the Closing Date. a part> has e been or will be duly authorized by all necessary corporate action of IT and each has been or will has e been dnl> executed and delisered by IT. (3) Authentication of fnitial Series Notet The ofBeer or ofilcers ofIT who shall authenticate any Note to be issued pursuant to the Indenture shall be, at the time of such authentication. an Authorized Officer. (4) No Violation. Neither the execution and delivery by IT of this Participation Agreement or the Indenture. nor the authentication by it of any Note, nor the consummation by it of the transactions conternplated hereby or thereby, nor the compliance by it with the provisions hereof j or thereof contravene or will contravene any Applicable Law governing its banking or trust powers, or contravene or result in a breach of, or constitute a default under, its Articles of l Incorporation or By-laws, or require any Governmental Action under any Federal or New York law, except such as have been, or on or before the Closing Date will have been. duly obtained. given *or accomplished; provided. that no representation or warranty is made as to (i) any Applicable Law or Governmental Action relating to the Secur :es a Act, the Securities Exchange Act, the Atomic Energy Act, the Nuclear Waste Act. ERISA the Federal Power Act. the Holding Company An, Title 49 of the Ohio Revised Code. Title 66 of the Penns>lvania Consolidated Statutes Annotated, energy or nuclear matters, public utilities. the environment. health and safety. Unit 2 or the property purported to be covered by the Ground Lease or (ii) the Lease Indenture Estate to the extent it may constitute real preperty under Applicable Law. (b) Agreements. The Indenture Trustee agrees that: (1) Agreement to Discharge Liens. The Indenture Trustee will not create or permit to cust. and will promptly take such action as may be necessary duly to discharge. all Indenture Trustee's Liens. k (2) No Petition Agreement. Following the issuance of the initial series of the Bonds and prior to the Isist day fe"owing the payment in full of the Bonds and the discharge in accordance with its terms of the Collateral Trust Indenture. the Indenture Trustee agrees that it will not Sle a petition, or join in the Sling of a petition. seeking reorganization. arrangement, adjustment or composition of or in respect of Funding Corporation under the Bankruptcy Code or any other applicable Federal or state law or the law of the District of Columbia. (3) Quiet Enjoyment. The Indenture Trustee agrees to be bound by Section 6(a) of the Facility Lease. SrcTios 10. Representations, Warranties and Agreements of the lessee. j (a) Representations and Warranties. The Lessee represents and warrants that: (1) Due Organization. The Lessee is a corporation duly organized and validly existing in good standing under the laws of the State of Ohio and has the corporate power and authority to carry on its business as presently conducted, to own or hold under lease its properties and to enter into and perform its obligations under this Participation Agreement and each other Transaction Document to which it is, or is to become on or before the Closing Date, a party. The Lessee is duly qualiSed and in good standing as a foreign corporation in the Commonwealth of Penn-sylvania. The Lessee has not failed to qualify to do business or to be in good standing in any other jurisdiction where failure so to qualify or be in good standing would materially and adserselv affect the business or Snancial condition of the Lessee or its ability to perform any obligations ALPflA i 14 l l CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 017.00.00.00 _ I I i l _-_-_____n
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_I i a under this Participation Agreement or any other Transaction Document to which it is, or is to
'become, a party.
q (2) Due Authorization. The execution, delivery and performance by the Lessee of this i Participation Agreement and each other Transaction Document to which it is. or is to become on or before tne Closing Date, a party. hase been duly authorized by all necessary corporate action on the part of the Lessee and do not and will not require the censent or approsal of the stockholders of the Lessee or any trustee or holder of any indebtedness or other obligation of the Lessee, other than (i) the Mortgage Release and (ii) such other consents and approvals as base been, or on or before the Closing Date will hase been, duly obtained, given or accomplished, with true copies thereof delivered to the Owner Participant, the Indenture Trustee and the Original Loan Participants. (3) Execution. This Participation Agreement and each other Transaction Document to which the Lessee is, or is to become on or before the Closing Date, a party, will have been duly executed and delivered by the Lessee, and this Participation Agreement constitutes, and upon execution and delivery thereof. each such Transaction Document will constitute, the legal, valid and binding agreement of the Lessee, enforceable against the Lessee in accordance with its terms. (4) No Violation. Etc. Neither the execution, delivery or performance by the Lessee of this Participation Agreement or any other Transaction Document to which it is. or is to become on or before the Closing Date. a party, nor the consummation by the Lessee of the transactions contemplated hereby or thereby, nor compliance by the Lessee with the provisions hereof or thereof, conflicts or will conflict with, or results or will result in a breach or contravenes or will contravene any of the provisions of, the Articles ofIncorporation or Code of Regulations of the Lessee or any A$liates of the lessee, or any Applicable Law, or any indenture, mortgage, lease or any other agreement or instrument to which the Lessee or any A$liate of the Lessee is a party or by which the property of the Lessee or any A$liate of the Lessee is bound, or results or will result in the creation or imposition of any Lien (other than Permitted Liens) upon any property of the Lessee or any ABliate of the Lessee. There is no provision of the Articles of Incorporation or Code of Regulations of the Lessee or any A$liate of the Lessee, or any Applicable Law, or any such indenture, mortgage, lease or other agreement or instrument which materially adversely affects or in the kture is likely (to far as the Lessee can now foresee) to materially adsersely affect the businen, operations, affairs, condition, properties or assets of the Lessee, or its ability to perform its obligations under this Participation Agreement or any other Transaction Document to which it is, or is to become, a party. (5) Coorrvimental Actiorts. No Governmental Action is or will be required in connection ; with the execution, delivery or performance by the Lessee of, or the consummation by the Lessee l of the transactions contemplated by, this Participation Agreement or any other Transaction Document, except such Governmental Actions (1) as have been, or on or before the Closing Date or any Releveraging Date or any Refunding Date,in the case of Governmental Actions required in connection with the issuance of Notes on such date will have been, duly obtained, gisen or accomplished, with true copies thereof delivered to the Owner Participant. the Indenture Trustee and the Loan Participants, (ii) as may be required under existing Applicable Law to be obtained. , given or accomplished from time to time after the Closing Date in connection with the l maintenance, use, possession or operation of Unit 2 or the property purported to be covered by l the Ground Lease or otherwise with respect to Unit 2 or such property and the Lessee's or the l Operating Agent's involvement therewith and which are, for the BVPS. routine in nature and which the Lessee has no reason to beliese will not be timely obtained and (iii) as may be required ! under Applicable Law nc,t now in effect. ' ALPIIA 1 l 15 l f l CURRENT ENDING PAGE CONDITIONS ARE 01 THE NEXT PAGE : 018.00.00.00 1 I I-
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' OHIC EDis0N Co. 90WNE OF NEW V0px (212)9249500
_I i y No Governmental Action (except Cosernmental Action applicable to the Owner Participant or any Partner as a result of activities by such Person or any ofits Alliliates not contemplated by the Transaction Documents) is or will be required (a) in connection with the participation by the Owner Trustee, the Indenture Trustee. Funding Corporation. the Owner Participant or the Original Loan Participants in the consummation of the transactions contemplated b3 this Participation Agreement or (b) to be obtained by any of such Persons during the term of the l Facility Lease with respect to Unit 2 or the property purported to be cosered by the Ground Lease, except such Governmental Actions (i) as hase been. or on or before the Closing Date. in the case of the Transaction Documents. or for any Releveraging Date or Refunding Date. in the case of the Financing Documents, will have been, duly obtained. gisen or accomplished. with true copies thereof delivered to the Owner Participant, the Indenture Trustee and the Loan Partici. pants, (ii) as may be required by Applicable Law not now in effect (iii) as may be required in consequence of any transfer of ownership of the Undivided Interest by the Owner Trustee, (iv) as ! would be required by Applicable Law upon termination or expiration of the Facility Lease in l l connection with taking possession of an interest in Unit 2 or such property, (v) as may be required ' by Applicable Law if, after termination or expiration of the Facility Lease. the Lessee or any other Person should provide transmission services for the Owner Trustee or if the Lessee ceases to be agent for the Owner Trustee as provided under the Assignment and Assumption Agreement, or (vi) as may be required in consequence of any exercise of remedies or other rights by any such l Person in connection with taking possession of an interest in Unit 2 or such property. (6) Securities Act. Neither the Lessee nor anyone authorized to act on its behalf has. directly or indirectly, offered or sold any Bond or any Note, any note issued with respect to any other undivided interest in Unit 2, the Undivided Interest or any other undisided interest in Unit 2, the Facility Lease or any other lease of an undivided interest in Unit 2 or any similar security or lease, or any interest in any security or lease the offering of which. fcr purpo=es of the Securities Act, would be deemed to be part of the same offering as the offering of the aforementioned
! securities or leases, or solic;ted any offer to acquire any of the aforementioned securities or leases in violation of Section 5 of the Securities Act, and except as contemplated by this Participation Agreement, neither the Lessee nor any one authorized to act on its behalf will take any action which would subject the issuance or sale of any Note or any interest in the Facility Lease or any other debt instrument (other than th- Bonds) issued or to be issued to Snance the Undisided
- Interest to the registration requirements of such Section 5.
(7) Title to the Undivided Interest; Securitit interest. On the Closing Date ( A) good and marketable title to the Undivided Interest will be duly, validly and effectively conveyed and transferred to the Owner Trustee, free and clear of all Liens, except Permitted Liens (other than those described in clause (ii) of the de6nition of such term and that portion of clause (iv) of such de6nition relating to Liens for Taxes being contested), (B) the Lessee has good and marketable title to its ownership interest in the property purported to be covered by the Ground Lease and has, and will have, good and marketable title to its ownership interest in the Retained Assets. free and clear of all Liens except Permitted Liens, and matters disclosed in the title report referred to in Section !!(a)(31), (C) the Lessee will hase good and marketable title to its ownership interest l in the BVPS Site, (D) Unit 2 and the Common Facilities will be wholly located on the BVPS Site without any material encroachments by any portion thereof on any other property. (E) all filings and recordings necessary or advisable to perfect the Owner Trustee's right, title and interest in and to the Undivided Interest and the property purported to be covered by the Ground Lease and to perfect for the beneSt of the Indenture Trustee and the holders of the Notes the Grst priority security interest, mortgage and assignment provided for in the Indenture, will hase been duly made and (F) no other action, including any action under any fraudulent conv eyance statute. will be required to protect the title and interest of the Owner Trustee in and to the Undisided Interest. l ALPHA 16 l CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 019.00.00.00 - l l 1
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l against the claims of all Persons wh >msoeser or to perfect such Brst priority security interest. mortgage and assignment in favor of the indenture Trustee. (8) Non Interference. None of the Permitted Liens described in clauses (ii). (iii). (iv). (5 ). (sii). (sili), (ix) or (xii) of the de6nition of such term will. on and after the Closing Date. materially interfere with the use or possession of the Undisided Interest or the use of or the esereise by the Owner Trustee of its rights under the Bill of Sale. the Ground Lease. the Assignment and Assumption Agreement and the Additional Support Agreement with respect to l the interests in BVPS, the Unit 2 Site and the BVP1 Site granted or to be granted under the Bill of Sale, the Ground Lease, the Assignment and Assumption Agreement and the Additional Support l Agreement. Except as provided in Section of the Operating Agreement, nothing m the Operating Agreement or in any Material Prnject Agreement will materially interfere with the ability of the Owner Trustee to transfer or co ivey the Undivided Interest to a Person engaged in the generatiott transmission os distribution of energy, and such Person will be in a position to
! enjoy rAll the bene 6ts of, and will be, a CAPCO Participant. The operation of Unit I will not materially adversely affect tb use or possession of the Undivided Interest or the use or exercise by the Owner Trustee of the rights previously referred to in this clause (8) or the economic value (including, without limitation, anticipated economic useful life) of the Undivided Interest to the owner thereof, either durini; or after the Lease Term.
(9) Personal Propertr/. Unit 2 is, to the full extut permitted by Applicable Law, personal property. (10) Location of Chief Executive Ofce. The chief executive oEce and place of business of the Lessee and the osce where it keeps its records concerning its accounts or contract rights is located at 76 South Main Street, Akron, Ohio 44308. (11) FinancialStatements. The consolidated balance sheets of the Lessee and its subsidiaries as of December 31,1%6. and the related consolidated statements ofincome, retained earnings and cash flow for each of the years in the three. year period ended December 31,19S6. together with the notes accompanying such Snancial statements, all certi6ed by Arthur Andersen & Co., fairly present the consolidated Snancial position of the Lessee and its subsidiaries at such dates and the results of their operations for the periods then ended. in conformity with generally accepted accounting principles applied on a consistent basis. (12) Disclosure. None of the Snancial statements to which reference is made in paragraph 11 above or the reports to which reference is made in this paragraph 12 or any certi6cate written statement or other document prepared by, or for, or at the direction of. the Lessee and furnished l to the Owner Participant or any Partner or the Original Loan Participant: by the Lessee in connection with the transactions contemplated hereby (under the cireymstances at the time and for the purposes for which any statement made therein was made) contains any untrue statement {
]
of a material fact or omits to state a material fact necessary to make the statements therein not { misleading. There is no fact known to the Lessee and not disclosed to the Owner Participant. any Partner, and the Original Loan Participants in writing that materially and adsersely affects or. so far as the Lessee can now reasonably foresee, is likely to materially and adsersely affect. the business or financial condition of the Lessee or any matetial portion ofits properties or its ability to perform its obligations under this Participation Agreement, any other Transaction Document or j any Financing Document to which the Lessee is, or is to become, a party. The Lessee has j heretofore delivered to the Owner Participant and the Original Loan Participants the Gnancial l statements referred to in paragraph 11 above and its Annual Report on Form 10.K fo- the period { ended December 31,19S6 and its Quarterly Reports on Form 10-Q for the quarters ended March l 31 and June 30,1987. l ALPflA 17 CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 020.00.00.00 _ l i i
y _ _ .___ W*M koene 'stegrcted Typesettmg s; stem Vah vMs Joe 1 PR00MGRSFi t2200$76 s25oJOOQ:tP0GER EXE)PoGER EXE. J sep 87 22.26 stAe. 12soJamaisivlEs)STYLEoo3 857.N Fine DisKssCDATCHe?x1PRoo scaOTCH)TToc0o099 Tmt- C. too sgg 1 Free dead 2000Mocett hest Cae o0. vmst s2:2 JOB: Y38958 j o so Edison Co. soww or ww von PCN: 020.00.00.00 S/N: 8 i
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l l l (13) Litigation. Except as disclosed in the reports to which reference is made in paragraph 1
- 12. there is no action. suit investigation or proceeding pending or. to the knowledge of the Lessee.
threatened against the Lessee before any court. arbitrator or admmistrative or governmental body j which questions the validity or enforceability of this Participation Agreement. any other Transac. { tion Document or any Financing Document to which the Lessee is, or is to become. a parts. or q w hich. individually or in the aggregate. if decided adsersel> to the interests of the Leuce. wonid hase a material adserse effect on the business or fmancial condition of the Lessee or materially and adsersely affect the ability of the Lessee to perform its obligations under this Participation Agreement or any other Transaction Document or any Financing Document to which it is or is to become a party. (14) Tax Returns. The Lessee has filed all Federal, state, local and foreign. if any. tax retnrns which were required to be Bled, and has paid all Taxes shown to be due and payable on such returns and has paid all other Taxes in respect of t! ' Lessee's interest in Unit 2 and the property purported to be covered by the Ground Lease anc in the BVPS Site which are payable by the Lessee to the extent the same base become due and payable and before they have become delinquent, except (i) for any Taxes the amount, applicability or validity of which may be in dispute and which are currently being contested in good faith by appropriate proceedings and with respect to which the Lessee has set aside on its books reserves (segregated to the extent required by generally accepted accounting principles) deemed by it to be adequate and (ii) for l any Taxes relating to the BVPS in respect of which the Operating Agent has not gisen notice to the Lessee that the same are due and payable, The Federat income tax returns of the Lessee has e I been audited by the IRS for taxable years through l1950.l (15) ERISA. Assuming that none of the Original Loan Participants is acquinng its Initial Series Note and that the Owner Participant is'not and none of the Partners is acquiring its interests in the Trust with the " plan assets" of any " employer bene 6t plan" within the meaning of Section 3(b) of ERISA or any " plan" within the meaning of Section 4975(3)(1) of the Code. the j exOcution and delivery of this Participation Agreement. the other Transaction Documents and the ' Financing Documents by the Lessee will not invoke any prohibited transaction within the l meaning of ERISA or Section 4975 of the Code. (16) Regulation. So long as the Facility Lease is in effect assuming the proper Bling of Form U.7D with the SEC on or within 30 days after the Closing Date, under Applicable Law now in j effect, none of Funding Corporation, any Loan Participant. the Owner Participant, any Partner. l FNB or the Owner Trustee will be, or become, solely by reason of either its entering into this Participation Agreement or any other Transaction Document to which any of them is, or is to become, a party, or the transactions contemplated hereby or thereby, subject to regulation (i) as an " electric utility", an " electric utility company", a "public utility", a " holding company" or a "public utility holding company" by any Federal, state or local public utility commission or other regulatory body, authority or group (including, without limitation, the SEC. FERC. PUCO or ] q PPUC) or (ii) in any manner by the NRC. No representation is made as to the status of the ou ner j Participant or any Partner with respect to regulation under the Holding Company Act after the i transfer by a Partner of an interest in the Owner Participant to a public utility company or an> afEliate thereof. (17) Authorizations, etc. The Lessee has not failed to obtain any Cosernmental Action presently required under any Federal Ohio or Pennsylvania law or other authorization. license. approval, permit, consent, right or interest under any Federal. Ohio or Penns> h ania law. u here a failure to obtain such would materially and adversely affect the ability of the Lessee to carry on its business as presently conducted. ALPIIA I l 18 _ CURRENT EN0!hG PAGE CONDITIONS ARE INCONSISTENT WITH THE NEXT PAGE : 02 Loo.00.30 -
\ l
_ ___D
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StN: 6' BOWNE OF NEW YORK " (21239245s00 t (18) No Default, etc. The Lessee is not in default, and no condition exists that, with' the ; giving of notice or lapse of time or both, would constitute a default by the Lessee. under the i Existing Mortgage, the Reimbursement Agreement or any other material mortgage, deed of trust. indenture, lease, contract or other instrument or agreement to which the Lessee is a party or by which it or any of its properties or assets may be bound. (19) Certain Documents. ' True and correct copies nf the CAPCO Agreements. the Material Project-- Agreements, the Reimbursement Agreement and the Existing Mortgage hase been . delivered to the Owner Participant's Special Counsel and the Original Loan Participants' Counsel
; prior to the date of execution hereof. No CAPCO Agreement or Material Project Agreement will; on and after the closing Date, materially and adversely interfere with g) the tide of the Owner Trustee to the Undivided Interest or (ii) the use of, or the exercise by the Owner T ustee ofits rights under the Facility Lease, the Bill of Sale, the Ground Lease, the Assignment and Assumption Agreement and the Additional Support Agreement with respect to the UndMded l Interest and the interests in the BVPS Site granted or to be granted under the Bill of Sale. the Ground Lease, the Assignment and Assumption Agreement and the Additional Support Agree-ment. The CAPCO Agreements and the Material Project Agreements are in full force and effect d and no breach of any thereof, to the Lessee's knowledge, by any other party thereto has occurred and is continuing, except where the failure to be in force and effect or such breach would not has e l a material and adverse effect on the Undivided Interest, Unit 2 or the rights and benefits of the Owner Trustee or the Owner Participant under any Transaction Document. Upon execution and delivery of the Mortgage Release and the recordation thereof and of UCC4 releases in respect thereof, (i) the mortgagee and secured party thereunder will have released the lien of the Existing Mortgage on the Undivided loterest'and (ii) the rights of the Owner Trustee in the Undisided Interest will not be, and will not become subject or subordinate to the rights of any Person.
except the Indenture Trustee under tk Lunture. (20) Unit 2. The description of Unit 2 set forth in Annex A to the Bill of Sale is correct and su$ciently complete to identify such property. The description of the property purported to be covered by the Ground Lease is correct and su$ciently complete to identify such property. (21) Investment Company and Holding Compantj Acts. The Lessee (a) is not. and will not become, an " investment company", or a company " controlled" by an " investment compan)" within the meaning of the Investment Company Act and (b) is a " holding company" as such term - is de6ned in the Holding Company Act, but is exempt from all provisions of the Holding Company Act and the rules thereunder (except Section 9(a)(2) of the Holding Company Act). (22) Sale and Concepance. The sale, transfer and conveyance of the Undisided Interest, and any other property or interest in property transferred by the Lessee under the Transaction 4 Docur1ents will not render the Lessee insolvent nor is it being made in contemplation of the i Lessee's insolvency; the property remaining in the hands of the Lessee after such sale, cons eyance and transfer is not an unreasonably small capital; the Lessee does not intend to or believe that it will incur debts beyond its ability to pay as they mature: and the Lessee has no actual intent to hinder, delay or defraud either present or future creditors. (b) Agreements of Lessee. (1) Delivery of Documents. The Lessee agrees that it will deliver to the Owner Participant and the Loan Participants (and, in the case of Sections 10(b)(1)(iii) and (v) hereof. the Owner Trustee):
)
(i) Financial Statements: ( A) as soon as practicable, and in any esent within 120 days. after the end of each 6 scal year of the Lessee, a consolidated balance sheet of the Lessee and l its subsidiaries as at the end of such fiscal year and related consolidated statements of ALPHA 19 _. CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE 022.00.00.00 - 1 I I l
l l c M Bowne Inteytted Typesettmg system VAX/V%s Joe 1 Pe00MGASPX/ 20C00EF5/ s210JA141PAGER.EXE)PAGER.E XE; 3. sep.87 22.07 style s2s048Ms7YLEs)s7YLE0058s7.1% Fi6r 31sK$$CRATCN6P11P900!CRATCETY0000092 Fet C. 100 see io nu ue 12or, ants. hat na 2409. vmt Ju JOB: Y38958 PCN: 022,00.00,00 . S/N: 6 I* OM10 E01 SON C0. ' ~ 60wNE OF NEW' VCRK (2121924Ss00 _I - 4 i. earnings, retained earnings and changes in Snancial position for such year. all in reasonable detail and certi6ed in an opinion by a nationally recognized Grm of independent public accountants. and the annual and interim reports of the Lessee to its stockholders as soon as l the same have been mailed to such stockholders (B) as soon as practicable. and in any esent within 60 days. after the end of each fiscal quarter (other than the last fiscal quarter) of each l' 6 scal year of the Lessee, a consolidated balance sheet of the Lessee and its subsidianes as at the end of said period and a related consolidated statement of earnings retained earnings and changes in financial position for said period..all in reasonable detail and prepared in accordance with generally accepted accounting principles, and certified by the Treasurer or an Assistant Treasurer or the Chief Fina.ncial OEcer of the Lessee and (C) as soon as practical (and in any event within 15 days) after the same have been 6 led. a copy of all documents Sled by the Lessee with the SEC pursuant to the reporting requirements of the Securities Exchange Act: (ii) Other Report.r: promptly upon their becoming available, any registration statement, , offering statement, investment memorandum or prospectus prepared by the Lessee in connection wah the public offering of securities (other than public offerings of securities under employee stock option, consumer stock or dividend reinvestment plansh (iii) Notice of Default: proinptly upon the Lessee becoming aware of the existence thereof, written notice specifying any condition which constitutes a Default. an Event of Default, an Indenture Default, an Indenture Event of Default, an Event of Loss; a Deemed Loss Event, a Reimbursement Default, a Reimbursement Event of Default or a default by any CAPCO Company under the Operating Agreement and the nature and status thereof: (iv) AnnualCertifcate: within 120 days after the end of each 6 scal year of the Lessee, a-certificate of the Lessee, signed by the Treasurer or an Assistant Treasurer or the Chief Financial OEcer of the Lessee, to the effect that such o$cer has reviewed. or caused to be reviewed by individuals under his supervision, this Participation Agreement and each other Transaction Document and each Financing Document to which the Lessee is a party and has made, or caused to be made under his supervision, a review of the transactions contemplated j hereby and thereby and the condition of the Lessee during such preceding 6 scal year, and .I such review has not disclosed the existence during such 6 scal period, nor does such omeer j have knowledge of the existence as at the date of such certf 6cate, of any condition or esent that constitutes a Default or Event of Default or, if any such condition or esent exists, l specifying the nature and period of existence thereof and any action the Lessee has taken. is taking, or proposes to take with respect thereto; (v) Opinion of Counsel within 120 days after the end of each fiscal year of the Lessee. i an opinion or. opinions, satisfactory to the Owner Participant, the Owner Trustee, the ] Collateral Trust Trustee and the Indenture Trustee, of the Lessee's General Counsel and/or j other counsel acceptable to the Owner Participant (A) either to the effect that (1) all filings j and recordations required to (i) convey to the Owner Trustee, and preserse the title of the Owner Trustee to, the Undivided Interest and the interests of the Owner Trustee in the property purported to be covered by the Creund Lease, and (ii) so long as any Note is Outstanding, grant, perfect, and preserve the security interest of the Indenture Trustee in the Lease Indenture Estate have been duly made, or (2) no such additional Glings, recordings, refilings or rerecording are necessary, and (B) specifying the particulars of all action required during the period from the date of such opinion through the last day of the next j succeeding calendar year, including in the case of each UCC continuation statement required I- to be 6 led during such period, the OEce in which each such continuation statement is to be l I Gled and the Bling date and Bling number of the original Snancing statement or 6xture filing ALPHA 20 l l _ CURRENT ENDING PAGE CON 0m0NS ARE 0.K, THE NEXT PAGE : 023.00.00.00 - l 1 1
M Bo.ne Integrated Typesettmo system VAVVUs Job 1 PR00MGABPW20C00Es& s250JA4HP*GER EXE)PiGER EAE, J.sep-67 22.07 stys !!s0JA M(sTYLEsisTYLE003 8sT,19 Fde 01sKisCufCH6NPR00 sCAATCmTT0000092 Fmt: c 100 set u arn u. 2400 ponts, Nai ue 2000 v>n sa i JOB: Y38958 PCN: 023.00.00.00 S/N: 6
= OMIO EDis0N CO. 80whE OF NEW YORK (21229245500
_I i to be continued, and the dates within which such continuation statement may be Gled under applicable law: (vi) CAPCO Information upon rece , . by the Lessee, unless prohibited by Applicable Law and subject to applicable con 6dentiality undertakings with respect thereto copies of l ( A) all annual capital budgets. and monthly statistical reports on the operation of Unit 2. < B) all notices to or from the NRC with respect to violations or other material occurrences with respect to Unit 2. (C) Institute of Nuclear Power Operations evaluation reports. and (D) if not included in (A)-(C), all Systematic Assessment of Licensee Performance Reports and all signi6 cant Licensee Event Reports (or comparable successor reports); and (vii) Requested Infortnation: with reasonable promptness, such other data and informa-l tion as to the business and properties of the Lessee or as to Unit 2. the BVPS or the BVPS Site as from time to time may be reasonably requested by the Owner Participant. subject in each case to applicable con 6dentiality undertakings with respect thereto, unless prohibited by Applicable Law. (2) Further Assurances. The Lessee will cause to be promptly and duly taken. executed. acknowledged and delivered all such further acts, documents and assurances as any Loan Participant, the Owner Trustee or the Owner Participant may from time to time reasonabl, request in order to carry out more effectively the intent and purposes of this Participation Agreement, the other Transaction Documents and the Financing Documents, and the transactions contemplated hereby and thereby. The Lessee will cause the Snancing statements (and continuation statements with respect thereto) and the documents enumera ed and described in Schedule 4, and all other documents necessary or advisable in that connection. to be recorded or Bled at such places and times, and in such manner, and will take all such other actions or cause such actions to be taken, as may be necessary or reasonably requested by any Loan Participant. the Owner Participant, the Collateral Trust Trustee, the Owner Trustee or the Indenture Trustee. in order to establish. preserve, protect and perfect the title of the Owner Trustee to the Undisided Interest and the Owner Trustee's rights and interests under this Participation Agreement and the other Transaction Documents and, so long as any Note is Outstanding, the Grst and prior security interest of the Indenture Trustee in the Lease Indenture Estate and the Indenture Trustee's rights under this Participation Agreement and the other Transaction Documents, all referred to and included under the granting clause of the Indenture. (3) Cocenants. The Lessee covenants and agrees as follows: (i) Maintenance of Corporate Existence, etc. The Lessee shall at all times maintain its existence as a corporation under the laws of the State of Ohio, except as permitted by paragraph (ii) below, and qualify and remain qua:iBed to do business in Pennsylvania and in each other jurisdiction where the failure to so qualify would materially and adsersely affect the business or Gnancial condition of the Lessee or its ability to perform its obligations under any Transaction Document to which it is a party. The Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its material franchises. provided. however, that the Lessee may discontinue any material franchise if either (A) its Chief Financial OfEcer determines that such discontinuance would not heve a material adserse effect on the Lessee and does not materially and adversely affect or diminish any right of the Owner Participant or any Loan Participant or (B) Lessee continues to provide electric service to the area covered by such franchise to substantially the same extent and on substantially the same terms and conditions as provided prior to such discontinuance pending j the renegotiation or renewal thereof. I l ALPilA l i 21 I l l I _ CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 024.00.00.00 - I ' I o
s p sowne lateysted Typesettmg syltem VANV35 Joe 1 IR00MG#8PN 20C00E04/1310JA4AtPAGER eat >PAGER stre $2sDsau tsTYLEs1sTytt001esT.1', Fde 015xsscAATCH8PXJPROD EKE. 21.10 s.seo-s7 5CRitCWTT0000080 4t' O 100 see s s,ee c.e 6oo pomis. Nat oe 24co. v.it n i JOB: Y38958 PCN: 024.00.00.00 S/N: 5 OMIO EDis0N C0. BOWNE OF NEW YORK (21239245500 I (ii) Merger, Sale, etc.: The Lessee shall not (1) consolidate with any Person (2) merge with or into any Person: or (3) subject to Section ll(a) of the Facility Lease and the last paragraph of this clause (ii), consey or transfer to any Person more than 10% of its total assets, including cash (determined. In each case. on the basis of the values of such assets. as shown on the most recent certiSed balance sheet of the Lessee delisered pursuant to Section 10(b)(1)(i)(A)), in any single transaction or series of related transactions. unless. immedi. ately after gising effect to such transaction:
)
(A) the Person who is the Lessee immediately following such consolidation. merger, conveyance or transfer (the "Surcicing lessee") shall be a corporation which (i) is organized under the laws of the United States of America, a state thereof or the District of Columbia, (ii) is a public utility regulated by PUCO, (iii) is as a substantial part of its business a supplier of electric service to retail customers not substantially fewer in number than those served by the Lessee immediately prior to such consolidation. merger, conveyance or transfer, (iv) shall have assumed each covenant and condition of the Lessem under the Operating Agreement and is a CAPCO Participant and (v) holds a valid l and subsisting license from the NRC to possess Unit 2 (including the ' Undivided Interest): (B) the Surviving Lessee, if other than the Lessee immediately prior to such transaction. shall execute and deliver to the Owner Participant and the Loan Participants an agreement, in form and substance reasonably satisfactory to the Owner Participant and the Loan Participants, containing the assumption by the Surviving Lessee of each covenant and condition of this Participation Agreement, eacn other Transaction Docu. ment and each Financing Document to which the Lessee immediately prior to such transaction was a party immediately preceding such transaction: (C) no Event of Default, Default, Reimbursement Default, Reimbursement Event of l Default, Event of Loss or Deemed Loss Event shall have occurred and be continuing and the Letter of Credit shall continue in full force and effect: (D) the Surviving Lessee shall have delbered to the Owner Participant. the Loan Participants and the Indenture Trustee an Officers' CertiBeate and an opinion, reasonably satisfactory to the Owner Participant and the Indenture Trustee, ofindependent counsel to the Surviving Lessee, each stating that (1) such transaction complies with this subparagraph (ii) and (2) all conditions precedent to the consummation of such transaction have been satis 6ed and any Governmental Action required in connection with such transaction has been obtained, given or accomplished: (E) the Surviving Lessee shall have delivered to the Owner Participant an opinion. reasonably satisfactory to the Owner Participant, of independent counsel to the Surtiu ing Lessee stating that such transaction does not and will not cause a Tax Loss (as denned l in each Tax Indemni8 cation Agreement): (F) such transaction is otherwise permi+ted by and is in compliance with the Operating Agreement: (C) (i) the Surviving Lessee shall have a debt to equity ratio of not more than 3 to 1 or (ii) the long term unsecured debt securities of the Surviving Lessee shall be rated at least " investment grade", as determined by Moody's and Standard & Poor's. if the Lessee . has long term unsecured debt securities rated by such rating organizations, or as { determined by one of such rating organizations, if the Surviving Lessee has long-term ' unsecured debt securities rated by only one such organization. or. if neither of such ! rating organizations shall rate such debt securities of the Surviving Lessee at the time. by I ] ALPilA 1 22 ' CURRENT ENDING PAGE CONDm0NS ARE 0.K. THE NEXT PAGE : 025.00.00.00 l - ! I ___________n
'+ 'M Sowne lategritr) Typetettwig byttem VANvMs Joe 1 P#00MGR8tx/ 20C00E04/ s230.)AmPAGER Ex0PAGER (XE. s.seo.81 ' ZL10
- stylt s2sDJAssisrYLEs)sivtE00s 857.19 - Fdgl Disk s sCRAf CHSP AM P#N SCRATCH)rf 0000080 Fmt: C. 100 ser 6 p., w e 600 e u. Nut mae u00. vwt n1 JOS: Y38968 PCN: 025.00.00.00 SIN: 5'
' OMIO EDis0N CO. ' ROWNE OF NEW YORK (212)9245500
_1 4 l any nationally recognized statistical rating organization in the United States of America: and (H) the Surviving Lesse-e shall have a Net Worth not less than $2 billion. Upon the consummation of such transaction the Surviving Lessee. if other than the Lessee immediately prior to such transaction. shall succeed to. and be substituted for. and may exercise esery right and power of. the Lessee immediately prior to such transaction under this Participation Agreement, each other Transaction Document and each Finanemg Document to which the Lessee immediately prior to such transaction was a party immediately preceding the date of such transaction, with the same effect as if the Surviving Lessee had been named herein and therein. Notwithstanding the foregoing provisions of this clause (ii), the Lessee shall be entitled to assign this Lease in conjunction with a sale or transfer of more than 80% ofits total assets (determined as aforesaid) to a Person which shall satisfy the conditions of clauses (A) I through (H) above following such sale or transfer: provided that, unless the Owner.Partici-pant shall otherwise consent, the Lessee shall remain obligated contingently for paymenes hereunder and shall provide an instrument in form and substance reasonably satisfactory to the Owner Participant to such effect. (iii) Change in Chief Executice Ofcc. The Lessee will notify the Owner Trustee. the Owner Participant, the Loan Participants and the Indenture Trustee promptly after an> change in its chief executive ofEce and place of business, principal place of business or place , where the Lessee maintains its business records. 'i
. (iv) No Petition Agreement. Following the issuance of the initial series of Bonds and prior to the 181st day following the payment in full of the Bonds and the discharge in accordance with its terms of the Collateral Trust Indenture, the Lessee will not fde a petition.
or join in the Gling of a petition seeking reorganization, arrangement. adjustment or composition of or in respect of Funding Corporation under the Bankruptcy Code or any other applicable Federal or state law or the law of the District of Columbia. (v) CAPCO. Except where the failure to do so would not have a material and ads erse
! effect on the Undivided Interest, Unit 2 or the rights and benefits of the Owner Trustee. the Indenture Trustee, any Loan Participant or the Owner Participant under any Transaction Document or Financing Document, the Lessee at all times, unless the Owner Participant shall 1 otherwise consent, (1) will perform its obligations under and comply with the terms of the Operating Agreement and each Material Project Agreement to be complied with by it. m will keep unimpaired all of the Lessee's rights, powers and remedies under the Operating ,
Agreement and prevent any forfeiture or impairment thereof, (3) will enforce the Operating Agreement in accordance with its terms, (4) will not take, fail to take or join in any action l l with respect to the Operating Agreement which results in a breach thereof and i3) wdl not accept or approve any amendment to the Operating Agreement or any Material Project Agreement the effect of which would be to (A) reduce the proportionate share of the net
! generating capacity of Unit 2 that the Lessor shall be entitled to as a result ofiti ownership of the Undivided Interest, (B) relieve the Lessee of any obligation under the Operating Agreement in respect of the Undivided Interest on or after the Closing Date. (C) impose. 3 directly or indirectly, at any time on the Owner Trustee or the Owner Participant any obligations, (D) discriminate against (x) the Owner Trustee or the Owner Participant in its capacity as lessor in a sale and leaseback transaction or (y) any present or future "Partici.
pant" or " Transferee", under, and as deGned in, the Operating Agreement because such Person derived or will derive rights from a lessor in a sale and leaseback transaction. iEn l ALPHA I 23 i l i' , ). I l i ! CURRENT ENDING PAGE CON'DITIONS ARE O K. THE NEXT PAGE ' 026.00.00.00 _. 1 I
e
.i M &nwne margrated TypMatteg system VAX/VMs ao 1 P90DMGRBPX/ 20C0066A< l2s0JA ta tPAGER E K0PAGER ExE. 3-seo 87 22.s1 stre s23DJA4a:tsTYLE53sTrtEcoj ast.11 F# OtsdssCR*.TCHBPX 6PR00 SCRATCH)ff000011s Fmt C. 100 se. r<= t.e 6oo e m Nni rae 1200. %t Ju JOB: Y38958 OH10 E01som Co.
PCN: 026.00.00.00 SIN: 8
. BowNE OF NEW YORK (212)9245500
_i i make more restrictive the de6nition of " Transferee" (F) reduce the consent required for CAPCO action to less than unanimous. or (C) deprive the Owner Trustee or the Owner Participant, as the case may be, of any benefit which it may have under the Operating Agreement or any Material Project Agreement. The Lessee shall ( A) proside copies of any proposed amendment to or modification of the Operating Agreement to the Owner Partici. pant and the Owner Trustee not less than 45 days p-ior to the execution thereof b3 the Lessee (except where the Lessee is unaware thereof 45 dan prior to such execution. in wiich case 1 the Lessee shall provide notice thereof as promptly as pos'sible after becoming so auare) and ' (B) upon such execution furnish to the Owner Participant, the Owner Trustee and the Indenture Trustee a copy of any such amendment or modification as executed. The Lessee will not, except as permitted by paragraph (ii) above or by the Assignment and Assumption l Agreement or the Additional Support Agreement, sell, transfer, assign or otherwise dispose of all or any portion of its rights or interests in and to BVPS or any Retained Assets incidental f thereto if, as a result of any such sale, transfer, assignment or other disposition, the representation of the Lessee set forth in Section 1(b) (18)(1)(x) and (ii) of the Tax IndemniScation Agreement would be or become untrue or inaccurate if such representation had been made on the date immediately following the date of such sale. transfer aufgnment l or other disposition. Pursuant to Section 121l of the Operating Agreement, the CAPCO Companies have elected to be excluded from the application of Subchapter K of Chapter i of Subtitle A of the Code or such portion or portions thereof rs may be permitted or authorized by the Secretary of the Treasury or his delegate insofar as such subchapter or any portion or l portions thereof may be applicable to the Participants under this Agreement. > (vi) Notes and amds. The Lessee will not, and wd not permit any of its Affiliates to. equire any of the Notes or Bonds. (vii) Coopemtion. The Lessee will at the requm.t of the Owner Participant or the { Owner Trustee, cooperate with the Owner Participa::t and the O vner Trustee in obtaining the valid ar.d effective issue, or, as the case may be, transfer or ameadment of all Cos ernmen- { j t l Actions Uncluding, but without limitation, the License) nece<.,ary or,in the opinion of the Owner Participant, desirable for the ownership. operation an J possession of the Undisided l Interest, or any portion of Unit 2 presented thereby or any property purported to 9 covered by the Ground Lease by the Owner Trustee or any trnnsferee. lessee or assignee { ; thereof for the period from and after the Lease Termination Date. (viii) Decommissioning (A) Unit 2, the Common Facilities used in respect of Unit 2. the other property included in the Unit 2 Retained Assets and allocable to Un4 2.md the portion of the BVPS Site allocable to Unit 2 shall be decommissioned and rethed froni commercial service in accordance with Applicable Law and, to the extent a method of decommissioning is not prescribed by Applicable Law, by the methni for decommissioning , determined as provided in the Operating Agreement (the foregoing'being herein referred to ) as " Decommissioning"). (B) As between the Lessee, the Owner Trustee, the Owner l l Participant, any Partner, each Loan Participant and any transferee (including by way of lease) or assignee of any of the Lessor's or the Owner /articipant's right. title or interest in
! Unit 2 or the property purported to be covered by the Ground Lease (all such Persons being j herein referred to as " Decommissioning Beneficiaries"), the Lessee agrees to pay, be solely !
responsible for, and to indemnify such parties against, all costs and expenses relating or i allocable to, or incurred in ecnnection with, Decommissioning (all such costs and expenses l l heing herein referred to as " Decommissioning Cost"), notwithstanding (i) the i ecurrence of j i he Lease Termination Date, any Default Esent of Default. Esent of Loss. Deemed Loss hent or any other event or occurrence, (ii) any provision of any Transaction Document. or f other document, instrument or agreement, including, without limitation. the Operating { ALPIIA ; 24 ! l E i _ CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE 027.00.00.00 ; l i l '
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suma e.= memee7,=wum synem vams ao i aoodrwx/rocooen stsomwatexc>eata.txt. 3.:,e .s7 :: si w nsomstrasmuroonst.no re otsrrscasci.wamscuremirocoom s.r c. 10o i l sn a see ne co owu, w oe troo. vet JC% WG PCN: 027.00.00.00 S/N: 7 I omocononto sowne or new von gigssoo J i i l I 1 I Agreem-nt, (ii!) any provdion of the License or any other license or permit. or (iv) any .t Applicable Law. either now or hereafter in effect, charter or by-law provision. Cosernmental 2 Action or other impediment. including, without limitation. the bankruptcy or inschency of f the Lessee: it being understood that (x) the obligations of the Lessee under this clause (B) I are and shall be absolute and unchditional and (y) the obligations of the Lessee under this clause (B) shall not extend to any interest of any Decommissioning Beneficiary in Unit 2 acquired other than as a Decon,missioning Beneficiary hereunder. Insofar as the obligations of the Les,ee under this clause (B) relate to the portion of Unit 2 in excess of the l Decommission,ing Proportionate Interest in Unit 2. the Lessee shall be subrogated to the rights,if any, of the Decommissioning Bene 6ciaries against other Persons in respect of such portion ciDecommissioning, provided that the Lessee shall not exercise any right to vhich it has been wbn> gated in any manner materially adverse to the Decommissioning Beneficiaries. (C) '1% Lessee shall use its best efforts to cause the CAPCO Companies (and any other
" Participants" under or as defined in the Operating Agreement) to use the safest and most reliable inethod of Decommissioning consistent with public health and safety. (D) The Lessee shall establish a special decommissioning trust fund or funds (the "Decommiaioning l Trust Frmd") for the accumulation and full funding of amounts sufficient by June L 2017 to pay the Decommissioning Proportionate Interest of the Decommissioning Cost (as computed ;
as of such date as if Decommissioning were to be completed as of such date). For this I purpose Decommissioning Cost shall be ne determined by an expert selected by the Owner Participant and reasonably acceptable to the Lessee (the "Decomminioning Expert"). For purposes of making such determination. such expert shall assume that the method of l Decommissioning Unit 2 shall be the costlier of (i) the DECON method of decommissioning (if not prohibited by Applicable Law), plus cost of removal, or (ii) the method of decommis. sioning required under Applicable Law. The Decommissioning Trust Fund shall be created as promptly as practicable (but in no case later than six months) after the Closing Date by the execution and delivery of the Decommissioning Trust Agreement. The Decommissioning Timt Fund shall be funded by the making of annual deposits in the Decommissioning Trust Fund (with the first such annual deposit to be made on or before the 6fth anniversary of the Closing Date) by the Lessee in such amounts as would. based on investments in such securities as are permitted under the Decommissioning Trust Agreement and utilizing the actuarial as;umptions used by the Lessee as of the Closing Date for its pension fund. as such ranumpt!ons tray be changed from time to time by the Lessee with the consent of the Ow ner l Participant teruit in the Decommissioning Trust Fund being funded by June 1,2017 in the full amou1t of the Decommissioning Proportionate Interest of the Decommissioning Cost (as computed as of such date as if Decommissioning were to be completed as of such date): provided,lvmever, that such actuarial assumptions shall reHect that earnings on amounts depow.ed in the Decommissioning Trust Fund shall be subject to Federal income taxation until such time that under Applicable Law such earnings on such amounts will not be subject to Federal income taxation. During the first 25 years after the Closing Date. Decommissioning Cost will be reviewd by the Decommissioning Expert every 6ve years. Commencing in the 26th year after the Closing Date, Decommissioning Cost will be reviewed by the Decommis-sioning Expert each year. Immediatch following each such determination by the Decon, mis-l siming Expert prior to June 1, 2017, the Lessee will make appropriate adjustments. if required, in its annual deposits to be made thereafter so that, based on the investment and actuarini assumptions then in effect with respect to the Decommissioning Trust Fund. such Fund will be funded in the full amount of the Decommissioning Proportionate Interest of the l Deammiwoning Cost as so determined by June 1,2017 (as computed as of such date as if Decommissioning were to be completed as of such date). During the first 20 years following the Closing Date, the Decommissioning Trust Fund will be invested and reinsested in
' accordance with standards no more liberal than the insestment guidelines and actuarial ALFilA 25
_ CURRENT ENDING POE CONDIT'ONS ARE 0.K. THE NEXT PAGE 028.00.00.00 _ l 1 i
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, - OMID (0110h CD, BOWNE OF NEW VDRK ' (212!9245500
_l 6 i 4 assumptions set forth in the Decommissioning Trust Agreement, Commencing in the 21st year following the Closing Date and .thereafter. the Decommissioning Trust Fund will be insested and reinvested in Decommissioning Fund Permitted Investments: provided. however, that in - no esent shall the Decommissioning Trust Fund be invested in any securities of the Lessee or any Affdiate thereof. The Decommissioning Trust Fund shall be the. fund of the Lessee provided that the Lessor shall be granted and shall base a security interest in such fund as secunty for the obligations of the Lessee under this Section 10(bH3)(sili) which secerity interest may be shared on a pari possu basis with the lessors of any other interest in Unit 2 ; which is leased to the Lessee,If, aft er the Decommissioning of Unit 2. there shall be any funds remaining in the Decommissioning Trust Fund. such funds shall be the property of, and be paid to, the Lessee. (E) In the event that (i) the Facility Lease shall have expired or l terminated on or after June 1,2017 (other than in connection with an Event of Loss. Deemed Loss Event or Event of Default) and (ii) thireafter the Lessor shall (1) release the Undisided Interest to any Person or (2) retain the Undivided Interest and sell power and energy from its - generation entitlement share (as de6ned in the Operating Agreement), then after the Lessor . has received (x) in the case of clause (1) above, net rents (after reduction for expenses incurred by the Lessor in connection therewith) in an aggregate amount (when discounted back to the Lease Termination Date at a rate per annum equal to the Prime Rate as of the
- Lease Termination Date) equal to I %) of Facility Cost, as adjusted to refleet inflation or deflation from the Closing Date to the time of determination (the " Adjusted Base Amount") and which Adjusted Base Amount shall be adjusted equitably to reflect a termina-tion prior to the Lease Term or (y) in the case of clause (2) above. net electric resenues (after reduction for expense incurred by the Lessor in earning such revenues) in an aguegate
. amount (discounted as aforesaid) equal to the Adjusted Base Amount, the Lessor shall thereafter reimburse the Lessee out of any further net rent received or net proceeds receised from the sale of power or energy to the extent that such rent or proceeds are attributable to the decommissioning obligation of the Lessee under this Section 10(b)(3)(viii) with respect to the period from and after the Lease Termination Date through the remaining economic
! usefullife of Unit 2 (payable on an annual basis with respect to each year or portion thereof during the term of such lease referred to in clause (I) above or such geriod referred to in clause (2) above during which the Lessor retains the Undivided Interest): provided. howes er, that when such amount has been paid the Lessor shall have no further obligation to make reimbursement to the Lessee pursuant to this Section 10(b)(3)(viii), (F) In the esent that l (1) the Facility Lease shall have expired or terminated on or after June 1,2017 (other than in connection with an Event of Loss Deemed Loss Event or Event of Default), (ii) the Lessor shall sell the Undivided Interest to any Person (including the Lessee in connection with the exercise by the Lessee of the purchase options provided by Section 13 (f) and (g) of the Facility !. case and the purchase option in Section 10(b)(3)(ix)), and (iii) the net sales proceeds (discounted back to the lease Termination Date at a rate per annum equal to the Prime Rate as of the Lease Termination Date) received by the Lessor in connection therewith shall exceed the Adjusted Base Amount (reduced by the net amounts, if any, actually realized by the Lessor pursuant to clause (E) above), then the Lessor shall reimburse the Lessee out of the net proceeds of such sale, to the extent that such proceeds are attributable to the decommissioning obligation of the Lessee under this Section 10(b)(3)(viii) with respect to the period from and after the Lease Termination Date through l the remaining economie useful life of Unit 2, whereupon the reimbursement obligation of the Lessor under this Section 10(b)(3)(viii) shall terminate; provided, however, that any such j reimbursement shall not reduce the amount of such net sales proceeds retained by the Lessor
- to an amount (discounted as aforesaid) equal to less than the Adjusted Base Amount ;
(reduced by the net amounts. If any, actually realized by the Lessor pursuant to clause (E) '
- l. above). The reimb.trsement obligations of the Lessor under clauses (E) and (F) of this Il ALPHA 1
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[ Section 10(b)(3)(viii) are for the Nle beneGt cf the Lessee, and no other Person shall be a third party beneGeiary with respect threreto. For purposes of this Section 10(b)(3)(viii). (x) the amount of net renq net revenues and act sales proceeds attributable to the decommis-sioning culcation of the Lessee shall be the amount by which such rents. resenues and proceeds are greater th9n they muld have Ngif the Lessee had had ne such obligation, and O f 'he annount thereof attributitle to the'penod after the Lease Termination Ibte shall be the imount determined in the immediatek p vceding clause (x) multiplied b3 a iraction the i dcoctmnator of which is the number of monthsI n the period commencing AMst. and endird j on the capiration of the ebcnomic useful'i.fe of Unit 2 as estimated at the time a determina. 1
' tion is being made pursuant to this Sectic A 10(b)(3)(viii) and the numerator of which is the !
e number of ruonths in the period et.mmmeinrg on the Lease Termination Date and ending on i the expiration of such economic useful hfe. In the event that the Lessee nnd the Lessor shall not agree as to thr airount of net rents, ne* electric revenues or net sales proceeds
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attributable to the ' decommissioning obligation of the Lessee under this Section 10(b)(3)(viii) with respect to the period from and after the Lease Termination Date. such amount shall be determineel by tM Appraisal Procedure. (C) Upon presentation of evidence by the Lessee, reasoriaMy satisfactotto the Owner Participant and the Owner Trtetee, that thers are amounts ther) due to pay the Decommissioning Proportionate Interist of the l JDecor.unissioning Cost, the Owner Participant and the Owner Trustee agrw. and. before n effect't.ating any transfer or assignment shall require aay transferee or ass gnee (otkr than l the Lessee), to execute such certiGcates as may be required to be delisered pursuant to the e Dec3mmissioning Trust Agreement for pa ment of the Decommissioning Panportionate l Interest of thdDecommiss aning Cost, from'thee Decommissioning Trust Fund. (H) Upon presentation of a cernficad of a nuclear expert selected by the Lessee and reasonably satisfactory to the O*nd participant and the Owner Trustee, stcag that Decomentasioning hus been comphted arrt Jl . Decommissioning Cost has bees said hs full tie owner
' Participant and the Ownst ,Trusten agree to execute such certiBer.tes as may be required to S release any fund. then rerOng in the Decommission 4g Trust Fund. (I) Notwithstanding
~ anything in this EarticipaWn Aggent or any other Transaction Document to the contrary.
/
the Owner PartMipant.' the Owaer Trustee and the Lasste agree to cooperate in amending this fatticipation Agreement and. the Decommissioning Trust Agreement to- the extent nece. wry to enable the Decommissioning Trust Agreement to comply with Section 468A of the CA or to establish a separate fund meeting the requirements of said Section 46SA:
, pmvt.64, however, that in no event shall any such amen /sn ent have a matedal ndverse effect 6- art the Owner Participant's rights in Unit 2 or the Lesso: s s<seurity interes* rn de Decommis-51ning Trust Fund.
7 (ix) Finci. pal Support. On the Closing Date, the Lessee shall c:.use The slitsubishi ha.k. Ilmited, acting through its New York Branch, to issue a letter of credigsubstantiall> in the form of Exhibit B to the Reimbursement Agreement (the "1nitial Letter 4f Credit"). The kluinam Letter of Credit Amount of the Initial Letter of Credit shall be as stated in the
*nval Irtter of Credit (subject to rednetion as prnvided in the InirW Letter of Credit) and the .unount a-ailable to be hwn theuundir i r any date shall be me lesser of the 51aximum Letser of Cudit Amount as of such daie and iWlod;fied Special Casualty Value as of such date (each as adjusted as provided in vf.e Initi.1 Letter of Credit). The I,essee agrees dunng the Bric Lease Term to maintain an r,revocaW, trarsierable, s.nsemred letter or letters of y1 credit of an Eligible Bank having terms substantial umi!4r to the initial Letter of Credit (or some other form of credit support sceeptable to the Bene 6ciaries in their sole discretional such letter of credit (or other eradit support) to hwe (Al an amount asailable to be drawn i thereunder as of any date at kne :qwd to Modj6edpe ,a1 Casualty Value as of such date and (B) a Maximum Letter of Credit Amount i.s ofyy date not less than the highest stodified
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JOB: Y30968 . PCN: 030.00.00.00 1 S/N: 7 5
-,,: SowNE OF Nfw YORK - 012H12a5500 p' _
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. Special Casualty Value (as such Value may be adjusted from time to time as a result of any l
change (or required change) in Modified Special Casualty Values) payable.as of any date during the next three years or the remaining term of such letter of credit. whicheser is shorter. Each such letter of credit (or other credit support). including the initial Letter of Credit. 'is referred to herein as a " Letter of Credit" Each Letter of Credit (1) shall hase an originalitated term of not 16 a than three y ears and not more than ten years. (2) shall permit partial drawings at least to the same estent as the Initial Letter of Credit (3) shall permit any BeneSciary to assign all or an> part of its I interest therein without the consent of the Issuing Bank or the Lessee. (4) shall not hase termination provisions which are less favorable to any Bene 6ciary than those set forth in the Initial Letter of Credit and (5) shall, at the time of the issuance thereof, be accompanied by an opinion of counselin form and substance satisfactory to each BeneSciary. Any reimburse. ment agreement between the Lessee and the issuing Bank relating to a Letter of Credit, other - than the Initial Letter of Credit (1) shall not have default provisions which are less fasorable to the Lessee than those in the Reimbursement Agreement relating to the Initial Letter of Credit, (2) shall require that the issuing Bank pay any draws on the Letter of Credit from general funds and (3) shall not permit the Isaing Bank to exercise its right to set off amounts owed by the Issuing Bank to the Lessee against any amounts owed as reimbursement to the Issuing Bank for draws on the Lette'r of Credit. The Lessee shall no: grant or permit to esist any Lien on any ofits property in favor of the Issuing Bank issuing the initial Letter of Credit
- to secure reimbursement obligations of the Lessee to such issuing Bank relating to the Initial Letter of Credit. In connection with any Letter of Credit other than the Initial Letter of Credit, the Lessee may grant or permit to exist a Lien on any ofits property in favor of the
. Issuing Bank issuing such replacement Letter of Credit to secure reimbursement obligations of the Lessee to such issuing Bank; procided that no such Liens shall be granteri unless (1) each BeneSciary shall be secured equally and ratably with such Issuing Bank and (2) Opinions of Counsel as to matters of bankruptcy law reasonably satisfactory to the BeneSciaries of such Letter of Credit shall have been delisered to such BeneSciaries. The Lessee shall not amend any provision of the Reimbursement Agreement with respect to an>
Letter of Credit in a manner materially adverse to the interests of any Benc6ciary without the prior written consent of each of the BeneSciaries. The Lence shall give each Bene 6clary notice of the scheduled termination of each Letter of Credit not more than 90 nor less than 60 days before its scheduled termination date. In addition, if any Issuing Bank has its long term unsecured debt securities (or if it has no long-term ' debt securities rated. Its long-term deposits) rated less than Aa3 (or, if the rating in effect for such Issuing Bank at the time ofissuance ofits Letter of Credit was less than Aal the rating in effect at such time) by Moody's at any time following the issuance of the Letter of Credit and during the term thereof, then within 120 days following receipt by the Lessee of notice of such fact from any Bene 6ciary, the Lessee shall replace such Letter of Credit with one issued by an Eligible Bank. If the Lessee has not secured a commitment for a renewal or replacement of an expiring Letter of Credit not later than 60 days prior to the stated expiration date of such expiring Letter of Credit or, in the event of a reduced rating. not lain than 60 days prior to the espiration of such 120 day period. the Lessee shall notify och BeneSciary of such fact and each Bene 6ciary shall have the opportunity (but shdi not be obligated) to 6nd a Person, acceptable to all Bene 6ciaries, willing to issue a Letur of Credit. for the account of the Lessee on substantially the same terms as the expirir.g Letter of Credit. , except that the annual fee payable under such replacement Letter cf Credit may be up to j 0.375% of the maximum drawable amount thereunder. If neither the Lessee nor am BeneSciary has found a Person willing to issue such a Letter of Credit not later than 45 das s prior to the stated expiration date of the expiring Letter of Credit or not later than 30 dass ALPHA 28 l t l l l CURRENT EN0!WG PAGE CONDITIONS ARE INCONSISTENT WITH THE NEy.T PAGE : OM. 00.00.00
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, . . . OMIO EDis0N Co. sowNE OF NEW YORK - (212392s9500
_,1 . i , prior to the expiration of such 120 day period, the Lessee shall. unless an Event of Default'
' (other than an Event of Default set forth in Section 15(x)(B)(1) of the Facility Lease) shall have occurred and be continuing, have the right to purchase the Undivided Interest at any
" time thereafter on or before the tenth day prior to the expiration date of the Letter of Credit
~
.or ten days prior to the last day of such 120 day period for a purchase price equal to the higher of Fair Market Sales Value thereof and Casualty Value. determined as of the date of, purchase. if such date of purchase is a date set farth in Schedule 2 to the Facility Lease. or on
, the date set forth in such Schedule next succeeding such date of purchase. in a0 other cases:
provided, however, that if the Lessee shall have assumed all obligations and liabilities of the Owner Trustee under the Indenture and the Notes pursuant to Section 3.9(b) of the Indenture, the principal amount of the Notes shall be deducted from the purchase price, Upon any such purchase by the Lessee, the Letter of Credit shall promptly be cancelled. (x) Certain Changes to Operating Agreemenf. If at any time through the efforts of the Lessee or otherwise, any of the restrictions on lessors in sale leaseback transactions or their successors and assigns contained in the Operating Agreement are eliminated or reduced for. l or are made inapplicable to, (through amendment, or waiver) any part of Unit 2. the Lessee shall use its best efforts to cause such restnsions to be comparably eliminated or reduced or made inapplicable to the Lessor and its successors and assigns. The parties hereto agree to enter into such amendments to this Participation Agreement and the other Transaction Documents and such other instruments and documents as shall be necessary or appropriate to effect the foregoing.- (xi) Limitation on Certain Rights of the Lessee. ' The Lessee shall not exercise any of its rights under Section 13(a),13(b),13(c).14(a) or 14(b) of the Facility Lease unless it is concurrently exercising any similar rights it may have in any other facility leases relating to Unit 2 (and in the ease of Sections 14(a) and (b) seeking to dispose of the portion of Unit 2 which it owns) If the Lessee shall have elected to return the Undivided Interest to the Lessor pursuant to Section 5(a) of the Facility Lease and subsequently determines prior to the Lease l Termination Date that it requires additional capacity from BVPS or Unit 1, before the Lessee or any ofits Affiliates concludes any arrangement for such capacityx it shall first gise written notice to the Lessor. If the Lessor elects, within 30 days of receip 9f such notice, to sell the Undivided Interest to the Lessee, the Lessee shall purchase the Undivided Interest at the Fair . Market Sales Value thereof (determined by agreement of the Owner Participant and the Lessee or, failing such agreement, by the Appraisal Procedure) on the Lease Termination Date. If the Lessor has not made such election prior to the expiration of the period dunng which the Leesor is entitled to make such election, the Lessee shall be free to conclude such
! arrangements for capacity from BVPS or Unit I as it desires.
(xii) Additional Financial Reports. The Lessee shall provide within 120 days after the end of the fiscal year of each CAPCO Co:npany whose net worth is included in the l calculation of Net Worth Factor, annual audited financial reports with respect to each such CAPCO Company. (xiii) Other Agreements. The Lessee shall not enter into or become bound by any agreement or' arrangement which would proscribe its ability to assume the obligations and liabilities of the Owner Trustee in accordance with Section 3.9(b) of the Indenture or to accept the Special Transfer. (xiv) Lessee Undertaking. The Lessee hereby agrees not to take any action (or omit to 1-take any action) whether by voting (or failing to vote) in meetings of the CAPCO Companies l or otherwise, the taking or omission of which will materially adversely affect the operation. l safety, capacity, economic useful life or any other aspect of Unit 2, the Undivided Interest. the Common Facilities or the Common Facilities Undivided Interest. ALPHA 29 CURRENT ENDING PAGE CONDIT!%S ARE 0.K. THE NEXT PAGE : 032.00.00.00 -
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, OHO E0ls0N Co. BowNE OF NEW YORK (21279245500
_l i i (xv) Certain Meetings. Upon the reasonable written request of the Owner Participant. ! the Lessee will make 6pancial and operating officers available up to two times each calendar i year to attend meetings in Cleseland with the Partners for the purpose of reporting upon the l Gnancial condition, operations or prospects of the Lessee and BVPS. Se n n n, i1. Conditions Precedent. (a) Owner Participant and Orlainal Loan Participants Conditions. The obligation of (a the ! Original Loan Participants to make the Loans on the Closing Date. and (y) the Owner Participant to make the Insestment on the Closing Date, shall be subject to the ful611 ment on or prior to the Closing Date of the following conditions precedent (each instrument, document, certiGeate or opinion referred to below to be in form and substance satisfactory to the Original Loan Participants and the Owner Participant): (1) Notice of Closing; Transaction Documents. Each shall have received executed copies. or sets of executed counterparts, of (x) the Notice of Closing, and (y) each Transaction Document (other than the Tax Indemni6 cation Agreements), the Mortgage Release, and such other documents as are contemplated by this Participation Agreement. (2) Tar Indemnification Agreements. The General Partners and the Limited Partner shall base received executed copies of their respective Tax IndemniGention Agreements. (3) Authentication Request, etc. The Owner Trustee shall have de!isered to the Indenture Trustee (x) a requst, dated the Closing Date, authorizing the Indenture Trustee to authenticate and deliver the Initial Series Notes to the Original Loa.. Participants upon their payment to the Indenture Trustee. for the account of the Owner Trustee, of the proceeds of the Loans, and (y) the original of the Facihty Lease (against receipt). (4) Due Authori:otion. Execution and Deliocry. All of the documents described in clauses (1) and (2) of this Section ll(a) shall have been duly authorized, executed and delivered by the respective parties thereto and shall be in full force and effect on the Closing Date. and the
. Original Loan Participants and the Owner Participant shall have receised esidence as to such authorization, execution and delivery.
(5) Initial Series Notes; Int;cstment. In the case of the Original Loan Participants. the Owner Trustee shall have executed, and the Indenture Trustee shall have authenticated and delisered to the Original Loan Participants, the initial Series Notes evidencing the Loans made on the Closing Date. In the case of the Original Loan Participants, the Owner Participant shall base made the Investment, (6) Loans. In the case of the Owner Participant. the Original Loan Participants shall hase made the Loans. (7) No Violation. The making by the Owner Participant of the Insestment and by the Original Loan Participants of the Loans shall not violate any Applicable Law. (8) No Default. No Default or Event of Default or, in the care of the Original Loan Participants. Indenture Default or Indenture Event of Default, shall hase occurred and be continuing and no Event of Loss or Deemed Loss Event shall have occurred. (9) Recording and Filing. The Gnancing statements and fixture filings under the Uniform Commercial Code and certain Transaction Documents, in each case as enumerated and described in Schedule 4, shall have been duly Bled or recorded in the respective places or ofBees set forth in such S-hedule and all recording and Bling fees wah respect thereto shall base been paid. (10) Representations and Warranties of the Owner Participant. In the case of the Original Loan Participants, the representations and warranties of the Owner Participant set forth in Section 7(a) shall be true and correct on and as of the Closing Date with the same effect as though ALPIIA 30 _ CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 033.00.00.00 - l t !
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, OHIO EDis0N C0 BOWNE OF NEW VDRK (21279245500
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made on and as of the Closing Date, and the Original Loan Participants shall base receised a certificate of an officer of a General Partner, dated the Closing Date, to such effect. (l1) Opinion of the Owner Participant's Special Courssel. In the case of the Original Loan Participants. the Owner Participant and the Partners. they shall have receised a fasorable opinion of the Owner Participant's Special Counsel. dated the Closing Date and addressed to the original Loan Participants. the Owner Participant and the Partners. addressing such matters relating to the transactions contemplated hereby and by the other Transaction Documents. as the Original Loan Participants. the Owner Participant or any Partner may reasonably request. (12) Opinion of Owner Participant's Special Pennsylvania Counsel and Owner Participant Special Ohio Counsel. The Original Loan Participants, the Owner Participant and the Partners. shall have received a favorable opinion of Owner Participant's Special Pennsylvania Counsel and Owner Participant Special Ohio Counsel, each dated the Closmg Date and addressed to the Original Loan Participants, the Owner Participant and the Partners, addressing such matters relating to the transactions contemplated hereby and by the other Transaction Documents as the Original Loan Participants, the Owner Participant or any Partner shall reasonably request. (l3) Opinion of the Owner Participant's Special Tax Counsel. The Owner Participant and the Partners shall have received a favorable opinion of :he Owner Participant's Special Tax Counsel. dated the Closing Date and addressed to the Owner Participant and the Partners. with respect to such Federal tax and other tax matters as the Owner Participant or any Partner may reasonably request. (14) Representations and Warranties of the Owner Trustee. The representations and warran. ties of FNB and the Owner Trustee set forth in Sectior. 8(a) shall be true and correct on and as of the Closing Date with the same effect as though made on and as of the Clos ng Date, and the Original Loan Participants and the Owner Participant shall have received a certificate from an oflicer of FNB and a certificate of the Owner Trustec, dated the Closing Date, to such effect, (15) Opinion ofthe Owner Trustee's Counsel. The Original Loan Participants and the Owner Participant and the Partners shall have received a favorable opinion of the Owner Trustee's Counsel, dated the Closing Date and addressed to each such Person, addressing such matters relating to the transactions contemplated hereby and by the other Transaction Documents as the Original Loan Participants, the Owner Participant or kny Partner may reasonably request. (16) Representations and Warranties of the Indenture Trustee. The representations and warranties of the Indenture Trustee set forth in Section 9 shall be true and correct on and as of the Closing Date with the same effect as though made on and as of the Closing Date and the Original Loan Participants and the Owner Participant shall hase received a certificate of the Indenture Trustee, dated the Closing Date, to such effect. (17) Opinion of Owner Participant's NRC Counsel. The Owner Participant. Original Loan Participants and the Partners shall have received a favorable opinion of Owner Participant's NRC Counsel, dated the Closing Date and addressed to the Owner Participant, such Original Loan l Participants and the Partners, addressing such matters relating to the transactions contemplated hereby and by the other Transaction Documents as the Owner Participant. the Original Loan Participants or any Partner may reasonably request. (18) Representations and Warrantaes of the Lesser (A) The representations and warranties of the Lessee set forth in Section 10(a), in any other Transaction Document and in any certificate or other document to which the Lessee is a party executed or delivered in connection with the transactions contemplated hereby or thereby shall be true and correct on and as of the Closing Date with the same effect as though made on and as of the Closing Date and (B) no Default. Es ent l of Dafault, Reimbursement Default. Reimbursement Event of Default Deemed Loss Esent or ALPP 4 l \ 31 l CURRENT ENDING PAGE CONDITIONS ARE O K. THE NEXT PAGE 0 9 00.00.00 l \ L _ _ _ __________ __ --------_ .--
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.. OH10 EDis0N CD. 80*WE OF NEw YORK (212M245500
. .,,,1 i ..
Esent of Loss 'shall have occurred and each of the Original Loan Participants and the Owner Participant shall have received an Officers' Certi6cate of the Lessee, dated the Closing Date, to
- such effect and to the further effect that there has been no material adverse change in the business. properties or financial condition of the Lessee since December 31.1956. and no esent has occurred since such date which would materially adsersely affect the ability of the Lessee to perform its obligations under the Transaction Documents to w hich it is. or is to be. a party.
~
(19) Opinion of the Lessee's Special Counsel. . The Original Loan Participants and the On ner Participant shall have received a favorable opinion of the Lessee's Special Counsel. dated the Closing Date and addressed to each such Person, addressing such matters relating to the transactions contemplated hereby and by the other Transaction Documents as the Agent for the Original Loan Participants, the Owner Participant or any Partner shall reasonably request.
' (20) Opinion of Lessee's General Coimsel. The Original Loan Participants and the Owner Participant and the Partners shall have received a favorable opinion of the Lessee's General -
Counsel, dated the Closing Date and addressed to each such Person, addressing such matters relating to the transactions contemplated hereby and by the other Transaction Documents as the Agent for the Original Loan Participants, the Owner Participant or any Partner shall reasonably request. (21) Opinion of Lesser's Special Pennsylvania Counsel. The Original Loan Participants. the Owner Participant and the Partners shall have received a favt 3ble opinion of Lessee's Special l Pennsylvania Counsel, dated the Closing Date and addressed to each such Person, addressing such matters relating to the transactions contemplated hereby end by the other Transaction Documents as the Original Loan Participants, the Owner Participant or any Partner shall reasonably request. (22) Opinion of Lesser's NRC Camsel. The Owner Participant, the Original Loan Partici-pant: and the Partners shall have received a favorable opinion of Lessee's NRC Counsel. dated the Closing Date and addressed to each such Person, addressing such matters relating to the transactions contemplated hereby and by the other Transaction Documents as the Owner l Participant, the Original Loan Participants or any Partner may reasonably request. (23) Opinion ofthe Original Loan Participants' Counsel. The Original Loan Participants shall have received a favorable opinion of the Original Loan Participants' Counsel dated the Closing Date and addressed to such Original Loan Participants, with respect to such matters as the Original Loan Participants shall reasonably request. (24) Representations and Warranties >>f fimding Corporation. The representations and war. rarties of Funding Corporation set forth in Section 6(a) shall be true and correct on and as of the Closing Date with the same effect as though made on and as of the Closing Date, and the Owner Participant shall have received an OfEcers' CertiGeate of Funding Corporation, dated the Closing Date, to such effect. I (25) Opinion ofFunding Corporation's Counsel. Funding Corporation shall have receised a ' y favorable opinion of Mudge Rose Cuthrie Alexander & Ferdon. dated the Closing Date and addressed to it, in form and substance satisfactory to Funding Corporation. (26) Taxes. All Taxes, if any, payable in connection with the execution, delivery, recording and Sling of the Transaction Documents and all the documents and instruments enumerated and described in Schedule 4. or in connection with the issue and sale of the Initial Series Notes and the making by the Owner Participant of the Investment, and all Taxes payable in connection with the consummation of the transactions contemplated hereby and by the other Transaction Documents. shall have been duly paid in full. ALPHA 32 j CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT FAGE : 035.00.00.00 _. I I I I
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- OHIO E0150m CO. BOWNE OF NEW YOPK (212)e95500 1
I I l (27) form U *D. A certi6cate on Form U-7D with respect to the Facility Lease shall base been duly executed and delivered by the Owner Trustee and the Owner Participant and shall be in due form for Bling. (25) Appraisal. The Owner Participant and the Original Loan Participants shall hase receised a letter. dated the Closing Date and addressed to the Owner Participant and the Oneinal Loan Participants, from the Appraiser containing an appraisal of the Undisided Interest. w hich appraisal shall reflect the Appraiser's reasonable conclusion that (w) the fair market salue in the hands of the Owner Trustee of the Undivided Interest on the Closing Date. taking into account the effect and existence of the Ground Lease, the Assignment and Assumption Agreement. the Additional Support Agreement and the Operating Agreement. is equal to the Purchase Pnce as set forth in the Notice of Closing, (x) the estimated remaining economie useful life of Unit 2 (including the Undivided Interest) is at least years, (y) at the expiration of the Basic Lease Term the Undivided Interest will have an estimated residual value taking into account the effect and the existence of this Participation Agreement, the Ground Lease, the Assignment and Assumption Agreement, the Additional Support Agreement and the Operating Agreement. in the hands of the Owner Trustee or a Peron (unrelated to the Lessee) who could lease or purchase the Undivided Interest from the Owner Trustee for commercial use, equal to at least 20% of the Purchase Price, determined without including in such value any increase or decrease for inflation or deflation during the period from the Closing Date through the expiration of the Basic Lease l Term, and (z) taking into account the effect and the existence of the Ground Lease. the Assignment and Assurnption Agreement, the Additional Support Agreement and the Operatmg Agreement, the use of the Undivided Interest at the Lease Termination Date by any User n feasible from an engineering and economic point of view and is commercially reasonable. (29) Ofering and Sale of fnterest. The OriSinal Loan Participants, the owner Trustee and the Owner Participant shall have received a letter from First Boston and Goldman Sachs uith respect to the offering and sale of the interests in the transactions contemplated by this Participation Agreement and each other participation agreement relating to an undisided interest l in Unit 2. (30) Cooervimental Action. The Lessee shall have obtained and shall deliser to the On;inal Loan Participants and the Owner Participants all Governmental Actions (includmg. uithont l limitation the NRC order, the PUCO order, the PPUC order with respect to the transactions contemplated hereby and all orders referred to in Section !!(b)(4)), required or. in the opunun of the Original Loan Participants or the Owner Participant, advisable for the consummation of all the transactions contemplated by this Participation Agreemer:t and the other Transaction Docu-nients in accordance with their terms which orders shall be Snal and nonappealable. (31) Title Report. The Owner Participant and the Origmal Loan Participants shall base received (i) a title report (including a UCC Gnancing statement search) dated the Closing Date. with respect to the BVPS Site, which report does not disclose any exceptions materially adserse to the possession or operation of Unit 2 or the performance by the Lessee ofits obligations under tlns Participation Agreement and the other Transaction Documents to which the Lessee is, or is to become, a party and (ii) title insurance policies in the amount of $100 000 with respect to the l BVPS Site and improvement.e thereon, such policies to be in form and substance satisfactory to such Persons. (32) No Chance or Proposed Change in Tax Laws. No change shall have occurred or been proposed in the Code or any other tax statute. the regulations thereunder or an> interpretation thereof that would adversely affect the tax consequences anticipated by the Ow ner Participant with respect to the transactions contemplated by the Transaction Documents. unless the Lessee shall have agreed in writing to protect the Owner Participant and the Partners m the Tas ALPHA I 33 ; l \ l 1 l 1 1 CURRENT ENDING PAGE CONDITIONS ARE 01 THE NEXT PAGE 036.00.00.00 - 1 l l- ---
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l Indemnification Agreements or otherwise, in a manner reasonably satisfactory to each of them. against the effect of such change or proposed change. (33) Speelal Certifcate of the Lesser. The Owner Participant and the Original Loan Partici. t' pants shall hase receised a certificate of the Lessee. dated the Closing Date. to the eifect that. except as set forth on the Schedule thereto and in reliance on Duquesne Light Compans as the l constructing and operating company with respect to Unit 2. ( A) Unit 2 has been in all material I respects completed in a good and workmanlike manner and in accordance with the plans and speci6 cations relating thereto (as the same may have been modi 6ed from time to time to reflect l Unit 2 as actually completed), Applicable Law (including, but without limitation, the regulations of the NRC), the License and the Construction Agreement, (B) all Cosernmental Action necessary for the commercial operation of Unit 2 (including the Undivided Interest) hase been received, other than such Governmental Action that is routine in nature for the BVPS or that cannot be obtained under Applicable Law, or is typically not applied for. prior to the time it is required, and that the Lessee expects to be obtained in due course. (C) the plans and l specincations relating to Unit 2 are complete in all material respects (modi 6ed or to be modi 6ed as aforesaid) and consistent with prudent engineering practice. (D) the testing and startup procedures and the operation and maintenance programs are consistent with such plans and l speciftentions, Applicable Law and prudent engineering practice. (E) Unit 2 is being tested in accordance with customary testing and startup procedures and. as of the Closing Date such tests l and procedures indicate that Unit 2 will have the capacity and functional ability to perform in commercial operation, on a continuing basis, the function for which it is designed in accordance with such plans and speci6 cations. (F) all material Governmental Actions relating to the construction, operation or maintenance of Unit 2 are listed in a schedule to such certificate. (C) there is no present event or condition which would materially adversely affect the capability of Unit 2 to operate in accordance with such plans and speciScations and (H) based upon the Lessee's present reasonable expectations, and subject to Applicable Law, the rights and interests made available to the CAPCO Participants (including the Lessee) pursuant to the Operating Agreement, as such rights and interests are made available to the Owner Trustee. any successor or assign of the Owner Trustee or any " Transferee" of the Owner Trustee under and pursuant to the Operating Agreement, or the Assignment and Assumption Agreement. the Additional Support Agreement, and the Ground Lease together with the rights to be made asailable under and pursuant to the Assignment and Assumption Agreement, the Additional Support Agreement and the Ground Lease are adequate to permit, during the period following the Lease Termination Date or the taking of pcassion of the Undivided Interest in the exercise of remedies under Section 16 of the Facility Lease,in accordance with the Operating Agreement. as the case may be. (i) the construction, location, occupc an, connection, maintenance. replacement, renewal or l repair of Unit 2, (ii) the use, operation and possession of Unit 2, (iii) the construction. use. operation, possession, maintenance, replacement, renewal and repair of all alterations. modifica- ' tions, additions, accessions, improvements, appurtenances, replacements and substitutions thereof l and thereto, (iv) adequate ingress to and egress from Unit 2 for any reasonable purpose in 1 connection with the exercise of rights under the Operating Agreement, the Assignment and l Assumption Agreement, the Additional Support Agreement, and its ownership and possession of the Undivided Interest and (v) the obtaining of nuclear fuel, of water, spent fuel storage facilities j and of transmission services to the BVPS sufBeient to enable delivery of the proportionate share of the net generating capacity of Unit 2 related to the Undivided Interest in a commercially efficient { I manner and on commercially reasonable terms. Nothing in the foregoing clause (H) shall be ' deemed to be or be construed as a warranty by the Lessee as to the performance by the Op-ating Agent or any of the other CAPCO Participants of their respective obligations under the Operating Agreement, the Assignment and the Assumption Agreement, the Additional Support Agreement and the Ground Lease, l ALPIIA 34 l i CURRENT EN0!NG PAGE CONDITIONS ARE O K. THE NEXT PAGE : 037.00.00.00 i l . l I I 1 L________________
M Scene integrated Typewttmg system VANVZs Job 1 PR00MGR8PV226004 W lt3DJA44 TRAGER EXE]P;.GER ExE. 3-sep.87 21.32 styte s2sDJAa4 (sivtEs)S7YLE003 851.19 FC DisKisCR;.fCHBPX.tPROD sCRATCMITT0000084 Fmt C 100 ser e em ta *00 po.nto Nai ra 1200. vmi as JOB: Y38958 PCH: 037.00.00.00 sin: 6 OHIO EDIs0N CO. 60WNE OF NEW YORK (212M245500 l l (34) Surrey. The Owner Participant shall have received a survey of the BVPS Site. (35) Letter ofCredit. The Owner Participant shall have received the Initial Letter of Credit l from The Mitsubishi Bank. Limited referred to in Section 10(b)(3)(ix) in substantially the form of Exhibit B to the Reimbursement Agreement and otherwise duly completed. (36) Opinion of Special Counsel to the luutna Bank The Benelleiaries shall hue recched fmorable opinions of special New York and Japanese counsel to the issuing Bank. each addressing
! such matters relating to the Initial Letter of Credit issued by The Mitsubishi Bank. Linuted as the Bene 6ciary may reasonably request.
(37) Other Matters. The Original Loan Participants and the Owner Participant shall base received such other documents, certiScates and opinions as the Agent for the Original Loan Participants or the Owner Participant, or their respective counsel, shall reasonably request. (b) Lessee Conditions. The obligation of the Lessee to sell and lease back the Undivided Interest on the Closing Date pursuant to Section 4 shall be subject to the fulfillment on or prior to the closing Date of the following conditions precedent, in each case in form and substance satisfactory to the Lessee: (1) Paragraph (a) Doemnents. The Lessee shall have receised executed copies of the doaments, certi6 cates, opinions (other than the opiiuons ieferred to in Section !!(a)(13) and (23)), appraisals, letters and forms described in paragraph (a) of this Section 11. All such opinions shall be addressed to the Lessee, except the opinions or documents to w hich reference is made in clauses (13) and (23) of said paragraph (a). (2) Payment offurchase Price. The Owner Trustee shrJ1 have paid to the Lessee an amount. in immediately available funds, equal to the Purchase Price. (3) Special Opinion of the lessee's Special Counsel. The Lessee shall hase received a favorable opinion of the Lessee's Special Counsel, dated (Le Closing Date and addressed to the Lessee, with respect to such Federal tax and other matters as the Lessee may reasonably request. (4) Orders. All orders of regulatory bodies deemed by the Lessee to be required prior to the closing shall have been received and shall be in form and substance satisfactory to the Lessee. (c) Conditions to RcIct:craging or Refunding. In addition to the limitations set forth in Section 2(c) or 2(d), the obligation of the Owner Participant and Funding Corporation to participate in a reieveraging, refunding or reoptimization of any Outstanding Notes as provided in Section 2(c) or 2(d), shall be subject to the ful811 ment on or before the applicable Releseraging Date or Refunding Date, as the case may be, of the following conditions precedent (each instrument. document. l certiScate, opinion or other writing to be in form and substance satisfactory to the Owner Participant and. if Funding Corporation is the Loan Participant Funding Corporation): (1) Authentication Request, etc. The Owner Trustee shall have delivered to the Indenture Trustee a request, dated the applicable Releveraging Date or Refunding Date. as the case may be. authorizing the Indenture Trustee to authenticate and deliver the Notes pursuant to Section 3.5 of the Lease Indenture. (2) Notes and Bond Transactions. ( A) The Loan Participant shall have received (x) if and to the extent that the Loan Participant is Funding Corporation, the proceeds from the sale of Refunding Bonds or Releveraging Bonds. as applicable, in an amount sufficient to make the Refunding Loan or the Releveraging Loan, as the case may be, and (y) from the Lessee (as a special payment of Basic Rent,if the Releveraging Date or Refunding Date, as applicable. shall be
! a date other than June 1 or December 1 of any year), an amount equal to accrued interest on the ALPilA 35 1
1 I l CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 038.00.00.00 1 l 1-
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,,,,, l i Outstanding Notes from, and including, the later of the date thereof or the date to which interest thereon shall have been paid, to, but excluding, the applicable Refunding Date, as applicable. (B) the Owner Trusree shall hase executed. and the Indenture Trustee shall hase authenticated and delivered. to or upon the order of the Loan Participant the Notes evideneing the Refunding Loan or the Releseraging Loan, as the case may be. and (C) if and to the extent that the Loan Participant is Funding Corporation. the Collateral Trust Trustee shall base accepted the Re-funding Supplemental Indenture subjecting the Notes to the lien of the Collateral Trust Indenture.
(3) No Default. No Default, Event of Default, Reimbursement Default. Reimbursement Event of Default, indenture Default or Indenture Event of Default shall hase occurred and be continuing and no Event of Loss or Deemed Loss Event shall have occurred with respect to w hich the Lessor shall have demanded payment under Section 9(c) or 9(d) of the Facility Lease, as the l case may be, or in response to which the Special Transfer has been effected. (4) Representations and Warranties. In the case of the Loan Participant, the representations and warranties of the Owner Participant, FNB and the Owner Trustee, and the Lessee set forth in Sections 7(a),8(a) and 10(a), respectively, shall be true and correct on and as of the applicable Releveraging Date or Refunding Date, as applicable, with the same effect as though made on and as of such Releveraging Date or Refunding Date, as applicable, (with all references to the Closing Date in such representations and warranties being changed to a reference to the applicable Releveraging Date or Refunding Date, as applicable), in the case of the Owner Participant the representations and warranties of FNB, the Owner Trustee and the Lessee set forth in Sections 7(a),8(a) and 10(a), respectively, and if Funding Corporation is the Loan Participant. Section 6(a), shall be true and correct on and as of such Releveraging Date or Refunding Date. as applicable, with the same force and effect as though made on and as of such Releseraging Date or Refunding Date, as applicable, (with all references to the Closing Date being changed as appropriate) and the Loan Participant and the Owner Participant shall have received appropriate certiScates. dated the Releveraging Date or Refunding Date, as applicable, to such effect (and with respect to paragraph (3) above, in the case of the Lessee) and the Owner Participant. FNB. the Ownu Trustee and the Lessee shall provide such additional representations and warranties as of the applicable Releveraging Date or Refunding Date as applicable as the Owner Participant, the Loan Participant or Funding Corporation shall reasonably request. (5) Registration Statement. If and to the extent that the Loan Participant is Funding Comoration, and the Bonds shall be sold in a public offering, the Owner Participant and the Original Loan Participants, if the Initial Series Notes are being refunded, shall have receised an Officers' CertiBeate of the Lessee, dated the applicable Releveraging Date or Refunding Date. as
} applicable, to the effect that on the date it becomes effective and on the applicable Refunding Date, the Registration Statement did not and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.
(6) Opinions of Counsel The Owner Participant and the Loan Participant shall base received a favorable opinion of Mudge Rose Guthne Alexander & Ferdon. as counsel for Funding Corporation dated the Releveraging Date or Refunding Date as applicable and addressed to the Owner Participant and the Loan Participant, addressing such matters relating to the transactions in connection with the Releveraging Notes or Fixed Rate Notes as the Owner Participant or the Loan Participant may reasonably request. The Owner Participant and the Loan Participant shall have received favorable opinions of Owner Participant's Special Counsel. Owner Trustee's Counsel, Lessee's Special Counsel, Lessee's General Counsel. Lessee's Special Pennsyhama Counsel and Lessee's Special NRC Counsel each dated the applicable Releveraging Date or Refunding Date, as the case may be, and addressing such matters relating to the transactions in ALPHA 36 CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 039.00.00.00 I I i
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strie s15DJAmsTYtts)srYLE002 8st,3% Fier Otsx8sC.urCH9Px.tPROO sCRATCD0rT0000122 Fmt & 100 s,, e eme t a soo ow n ani t e 2:00. Vmt m JOB: Y38958 PCN: 039.00.00.00 SIN: 6 g onio Eoison co sownE or nEw voax rat >eassso0 _l 1 (li l I connection with the Notes as the Owner Participant or the Loan Participant may reasonably ) request, The Owner Participant and the Partners shall have also received an opinion of Owner Participants' Special Tax Counsel, dated such Releveraging Date or Refunding Date, as applicable. and addressed to the Owner Participant and the Partners, that the issuance of the Notes shall not l result in any adscrse tax effect to the Owner Participant or any Partner. (7) Receipt of Documents. If and to the estent that the Loan Participant is Funding Corporation Funding Corporation and the Collateral Trust Trustee shall have receised copies of all documents previously delivered to the Original Loan Participants pursuant to Section 1I(a). (8) Satisfaction of Underwriting Agreement Conditions. If and to the extent that the Loan Participant is Funding Corporation, all of the conditions precedent to Funding Corporation's obligations under any Underwriting Agreement shall have been met or waised by Funding Corporation. (9) Amendments to Documents. The Partners and the Lessee shall have amended the Tax l Indemni6 cation Agreements, and the Owner Trustee and the Lessee shall have amended the Facility Lease, so as to take into account the tax treatment of interest (including original issue discount) payable on any Note or Bond in a manner that is mutually acceptable. Secrtos 12. Consent to Assignment of the Facility Lease; Consent to Indenture. (a) Consent to Assignment of Facility lease. The Lessee hereby acknowledges, and con.ents in all respects to, the assignment of the Facility Lease by the Owner Trustee to the Indenture Trustee under and pursuant to the Indenture and agrees: (i) to make each payment of Basic Rent and Supplemental Rent due or to become due thereunder (excluding, in any event, all Excepted Payments) directly to the Indenture Trustee at the Indenture Trustee's Office, so long as any of the Notes shall be outstanding and unpaid: and (ii) not to seek to recover any payment (other than a payment that both the Owner Trustee and the Lessee agree was made in mistake) made to the Indenture Trustec in accordance with the Indenture once such payment is made. (b) Consent to Indentures. The Lessee hereby consents in all respects to the execution and delivery of the Indenture, and to all of the terms thereof, and the Lessee acknowledges receipt of an executed counterpart of the Indenture;it being understood that such consent shall not be construed to require the Lessee's consent to any future supplement to, or amendment, waiser or modification of the terms of, the Indenture or any Note except to the extent expressly provided for by the Transaction Documents. Srcitos 13. Lessee's Indemnities and Agreements. (a) CeneralIndemnity. The lessee agrees, whether or not any of the transactions contemplated hereby shall be consummated and whether or not the Facility Lease, any other Transaction Document or any Financing Document shall have expired or have been terminated, to assume liability for and the Lessee does hereby agree to indemnify, protect, defend, save and keep harmless each Indemnitee. on an After-Tax Basis. from and against, any and all Claims which may be imposed on, incurred by or asserted against any Indemnitee (whether because of act or omission by such Indemnitee or otherwise and whether or not such Indemnitee shall also be indemnified as to any such Claim by any other l Person) in any way relating to or arising out of (i) Unit 2, the Undivided Interest. BVPS or the BVPS Site, or any part of any thereof, the Operating Agreement, the Material Project Agreements, the issuance or payment of the Bonds or the Notes, this Participation Agreement or any other Transaction Document or any Financing Document (including, without limitation, the performance or enforce. ment of any of the obligations and terms hereunder or thereunder), (ii) a disposition of all or any part l of the Undivided Interest, Unit 2 or any other interest of the Owner Trustee in connection with any l ALPHA I 37 f l l l CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 040.00.00.00 l i i I-
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- termination of the Facility Lease, or (iii) the design, construction, assembly, manufacture. Snancine. -
erectionf purchase, acceptance, rejection, ownership, acquisition, delivery, redelisery. nondelivery. ! transportation. Insuring, lease, sublease. preparation, installation, repair, rebuilding, improvement. transfer of title, abandonment, possession, use, operation, maintenance, clean-up. condition. sale, return. storage. decommissioning, handling. decontamination. or disposition of the Undisided Interest. Unit 2. any nuclear waste or other hazardous materials, any CapitalImprosement. the BVPS Site, any other facilities on the BVPS Site or any other interest of the Owner Trustee in any thereof or an> accident. nuclear incident or extraordinary nuclear occurrence in connection therewith (including for purposes of this clause (iii), without limitation (A) claims or penalties arising from any siolation oflaw or liability in tort (strict or otherwise) or from the active or passive negligence of any Indemnitee. t B1
'. loss of or damage to any property or the environment or death or injury to any Person. (C) latent and other defects, whether or not discoverable. (D) any. claim for patent, trademark, service-mark or
. copyright infringement and (E) any claim of any Indemnitee incurred in the administration of this Participation Agreement, any other Transaction Document or an'y Financing Document and not paid as Transaction Expenses or included in Facility Cost and, if not included in Transaction Expenses. the reasonable fees and disbursements of counsel and other professionals incurred in connection there.
with): provided however, that the Lessee shall not be required to indemnify any Indemnitee pursuant l to this Section 13(a). (1) for any Claim in respect of Unit 2 or the Undivided Interest resulting solely from acts or events not attributable to either any act or omission of the Lessee whether as agent for such Indemnities or otherwise for the period on or before the Lease Termination Date which occur after redelivery of the Undivided Interest to the Owner Trustee in accordance with Section 5 of the Facility Lease, except to the extent expressly provided in any Transaction Document. the Operating Agreement or any other agreement or undertaking of the Lessee, (2) for any Claim against such Indemnitee resulting solely from acts which would constitute the willful misconduct or gross negligence of such Indemnitee (unless imputed to such Indemnitee by reason of Unit 2. the Undisided Interest. BVPS, the BVPS Site or any other facilities at the BVPS Site or any occurrence in connection with any thereof or any act of omission of the Lessee, whether as agent for such . indemnitee or otherwise), (3) for any Transaction Expense to be paid by the Owner Trustee pursuant to Section 14(a) (4) for any Claim resulting solely from a transfer by the Owner Trustee or the Owner
..l Participant of all or part of its interest in the Facility lease, Unit 2, or the Undivided Ir,terest other than in connection with any early termination of the Facility Lease or any exercise of remedies under Section 16 thereof or any Special Transfer or the Erst transfer by the Owner Participant to an Affdiate
.[
of the Owner Participant, (5) in the case of any Loan Participant, the Indenture Trustee and the l
. Collateral Trust Trustee, for any Claim based upon an untrue statement or alleged untrue statement or '
omission or alleged omission in the Registration Statement or any document or agreement in connection with the sale of the Bonds which is based upon information furnished to the Lessee or its agents by such Indemnitee expressly for use therein or (6) for any Claim against the Ouner l Participant or any Partner resulting solely from Owner Participant's Liens or against the Owner Trustee resulting solely from Lessor's Liens. To the extent that an Indemnitee in fact receives indemniGeation payments from the Lessee under the indemni6 cation provisions of this Section 13(a), the Lessee shall be subrogated. to the extent of such indemnity paid, to such Indemnitee's rights with respect to the transaction or esent requiring or giving rise to such indemnity, but only so long as such subrogation shall not materta!!y ads ersel> atreet the rights of such Indemnitee or any other indemnitee hereunder. Nothing herein contained shall l>e construed as constituting a guaranty by the Lessee of the principal of or premium. if any. or interest on l the Notes or the Sonds or the residual value or useful life of the Undivided Interest. (b) General Tax Indemnity. (1) Indemnity. All payments by the Lessee in connection with the transactions contem-plated by the Transaction Documents shall be free of withholdings of any nature whatsoeser s and ALPHA 38 CURRENT ENDING PAGE CONDITIONS ARE O.K. THE NEXT PAGE : 04 Loo.00.00 l - l i
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l at the time that the Lessee is required to make any payment upon which any withholding is 1 required, the Lessee shall pay an additional amount such that the net amount actually received by the Person entitled to receive such payment will. after such withholding, equal the full amount of s the payment then due) and shall be free of expense to each Indemnitee for collection or other i charges. If, for any reason, the Lessee is required to make any payment to a tating authority with I respect to. or as a result of. any withholding tax imposed on or with respect to an Indemnitee by way of withholding from payments to such Indemnitee in respect of the transactions contem-plated by the Transaction Documents. which withholding is not the responsibility of the Lessee f under this Section 13(b) as determined pursuant to this Section 13(b) but without regard to the ] < immediately preceding sentence of this Section 13(b)(1), then the Lessee shall promptly gise the Indemnitee written notice thereof reflecting the basis for nonresponsibility of the Lessee and of the amount of such withholding and provide to such Indemnitee a receipt or other documentation evidencing payment of the withheld amount. Upon receipt of the notice described in the preceding sentence, such Indemnitee shall promptly repay (except to the extent the Indemnitee disagrees with the Lessee about the Indemnitee's liability for such repayment and the Indemnitee promptly provides the Lessee with a written description certi6ed by the Indemnitee's tax or general counsel of the basis for such disagreement) to the Lessee on an After-Tax Basis an amount which equals the amount paid by the Lessee with respect to, or as a result of. such withholding tax. Whether or not any of the transactions ec~ mplated hereby are consummated. except as provided in Section 13(b)(2), the Lessee shw pay, and shall indemnify, defend and hold each Indemnitee harmless, on an After Tax Basis, from and against, any and all Taxes howsoeser imposed (whether imposed on or with respect to the Indemnitee, the Lessee. BVPS. Unit 1. Unit 2. the Undivided Interest, the Retained Assets, the Unit 2 Retained Assets the Common Facilities. the Common Facilities Undivided Interest, any Capital Improvement or the BVPS Site. or any part thereof or interest therein or otherwise) by any Federal, state or local government or subdivision thereof or taxing authority in the United States of America or by any foreign country or subdivision thereof or by any foreign or international taxing authority in connection with or relating to (A) the design, construction, Gnancing, purchase, acquisition, acceptance, rejection. delivery, nondelivery, transport, ownership, assembly, possession. repossession. operation. use. condition, maintenance, repair, improvement, sale, return, abandonment, decommissioning, prep-aration, installation, storage, replacement, redelivery, manufacture, insuring, leasing, subleasing. modi 6 cation, transfer of title, rebudding, rental, importation, exportation or other application or disposition of, or the imposition of any Lien other than, in the case of the Owner Participant. Owner Participant's Liens, in the case of the Owner Trustee, Owner Trustee's Liens. and, in the case of the Indenture Trustee, Indenture Trustee's Liens (or incurrence of any liability to refund or pay over any amount as a rerult of any Lien other than,in the case of the Owner Participant. Owner Participant's Liens, in the case of the Owner Trustee, Owner Trustee's Liens. and. in the case of the Indenture Trustee, Indenture Trustee's Liens) on, BVPL Unit 1. Unit 2. the Undisided Interest, the Retained Assets, the Unit 2 Retained Assets, the Common Facilities. the Common Facilities Undivided Interest, any Capital Improvement or the BVPS Site. or any part thereof or interest therein, (B) the payment of Rent or the receipts or earnings arising from or received with respect to, and the indebtedness with respect to, BVPS, Unit 1, Unit 2. the Undivided Interest. the Retained Assets, the Unit 2 Retained Assets, the Common Facilities. the Common Facilities Undivided Interest, any Capital Improvement or the BVPS Site, or any part thereof. interest j therein or application or disposition thereof. (C) any amount paid or payable pursuant to this - Participation Agreement, any other Transaction Document or any Financing Document or the transactions contemplated hereby or thereby, (D) BVPS, Unit 1 Unit 2, the Undinded Interest. the Retained Assets, the Unit 2 Retained Assets, the Common Facilities, the Common Facilires Undivided Interest, any Capital Improvement or the BVPS Site, or any part thereof or interest therein, or the applicability of the Facility Lease to the Undivided Interest or any Capital ; Improvement, or any part thereof or interest therein, (E) this Participation Agreement. an.t other ALPIIA 39 l CURRENT ENDING PAGE CONDITIONS ARE INCONSISTENT WITH THE NSXT PAGE : 042.00.00.00 - i 1
M so.ne L:tegrated typesettag system vix/v*;s Joe 1 PRGOMGRBPx/226ooe92/l!$0JA44-(T AGER ExDP1GEA1xt, ).sep-67 2LJ2 stysa: 528DJAM t STYLES)sTYLt00) esT,19 Fe OlsKisCRafCHBPK:tPRoo.sCRAYCHlfTo000084 Fmt C 100 set n s e e eene ooo eamu. nai ne sooo, vusi a t JO5: Y38958 PCN: 042.00.00.00 S /N: 4 o,co rossos co sowns or new von (212m2essoo l-i _,1 i i. Transaction Document or any Financing Document or (F) otherwise with respect to or in connection with the transactions contemplated by this Participation Agreement, any other Transaction Document or any Financing Document. (2) Exclusions from Cencral Tax Int /cmnity. Section 13(b)(1) (except for the first three sentences thereof) shall not apply to.
)
(i) Taxes based on. or measured by. the net income of an Indemnitee imposed on such j Indemnitee by the United States federal gosernment (including, without limitation. an> minimum Taxes, capital gains Taxes, withholding Taxes, any Taxes on, or measured by. items of tax preference, surcharges, additions to tax, penalties, Snes or other charges in respect thereof); (ii) Taxes however denominated (other than sales, use or rental Taxes) imposed on an Indemnitee by any state or local government or other state or local taxing authority in the United States that are based on > measured by, the net income, items of tax preference, net worth, or capital of such Indemnitee (" Income / Capital Taxes"), except, with respect to the Owner Trustee, the Trust, the Trust Estate, the Owner Participant. the General Partners, the Limited Partner, the Indenture Trustee, the indenture estate under the Collateral Trust Indenture. the Loan Participants and any AfRiiate of any thereof, any such Taxes imposed by a jurisdiction as a result of a relation or asserted relation of such jurisdiction to the transactions contemplated by the Transaction Documents or the Fmancing Documents or as a result of the activities of the Lessee, any CAPCO Company or any Affdiate of any thereof in such jurisdiction: provided, however, that the amount of any Income / Capital Taxes for w hich the Lessee is obligated to indemnify under the preceding exception shall be calculated on a pro forma basis as the amount by which: (x) the incremental Income / Capital Taxes which the Indemnitee is obligated to pay in such jurisdiction, calculated as: (I) the actual amount ofIncome/ Capital Taxes which the Indemnitee is obligated to pay in such jurisdiction (except to the extent that any allocation or apportionment method used by ruch jurisdiction takes into account the income or activities of business entities organized outside the United States of America), taking into account any actual net operating loss carryovers, reduced by (II) the amount ofIncome/ Capital Taxes which the Indemnitee would be obligated to pay in such jurisdiction (except to the extent that any allocation or apportionment method used by such jurisdiction takes into account the income or activities of business , entities organized outside the United States of America), assuming that the transactions ! contemplated by the Transaction Documents and Financing Documents had not oc. curred, taking into account any net operating loss carryovers that would have been available if such transactions or activities had not occurred: exceeds (y) any actual aggregate net reduction in Income / Capital Taxes in all other jurisdictions i in which the Indemnitee is subject to tax (whether such reduction results from the operation i of allocation or apportionment formulas, from credits or otherwise), such aggregate net reduction calculated as: s!) the aggregate amount ofIncome/ Capital Taxes which the Indemnit# would be obligated to pay in all other jurisdictions in which such Indemnitee is subject to tax. ; assuming that the transactions contemplated by the Transaction Documents and Finane. ing Documents had not occurred, reduced by ALPilA 40 j CURRENT ENDiNG PAGE CONDITIONS ARE INCONSISTENT WITH THE NEXT PAGE : 043.00.00.00 I i i-
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. (II) the actual aggregate amount ofIncome/ Capital Taxes wh'ich the Indemnitee is :
obligated to pay in all other jurisdictions in which such Indemnitee is subject to tax; provided, further, however, that with respect to. in the case of a General Partner or any partner or shareholder in a General Partner, any'such Tax and. In the case of any other , Indemnitee any such tax based on or measured by net worth, the Lessee's indemnits '
' obligation shall not exceed the incremental portion of such Tax attnbutable to the transac.
tions contemplated by the Transaction Documents: (iii) Taxes attributable to the Undivided Interest that are imposed with respect to any ! period after the later of (a) the Lease Tertnination Date, and (b) the date possession of the Undivided Interest has been delivered to the Lessor as provided in the Facility Lease, unless such Taxes relate to matters arising or events occurring prior to or simultaneously with such date, provided that the Lessee shall have fulfilled all of its material obligations under the Facihty Lease: (iv) Taxes on or with respect to an Indemnitee arising from any voluntary transfer and ~ 3 Taxes imposed on such voluntary transfer (it being understood that the term " voluntary i transfer" does not include any transfer provided for in the Transaction Documents or the ! Financing Documents and does not include any transfer to the Lessee or any Affiliate thereof) by such Indemnitee of any interest in the Undivided Interest, the Trust Estate, the Lease Indenture Estate, the Notes or any other right or interest arising under the Transaction Documents or the Financing Documents, unless an Event of Default has occurred and is I continuing, or an involuntary transfer by such Indemnitee of ar.y such' interest arising from a bankruptcy or similar proceeding in which such Indemnitee is the debtor unless such bankruptcy or similar proceeding relates to the transactions contemplated by the Transaction Documents or an involuntary transfer by an Indemnitee arising as a result of a proceeding for the enforcement of creditor's rights against such Indemnitee unless such proceeding relates to the transactions contemplated by the Transaction Documents: (v) Taxes which are income taxes or franchise, conduct of business or similar Taxes imposed upon an Indemnitee by any government or taxing authority of a foreign country in which such Indemnitee is subject to tax solely as a result of transactions or activities unrelated to those contemplated by the Transaction Documents or the Financing Documents: (vi) Taxes imposed on an Indemnitee which are a result of such Indemnitee not being a United States person; (vil) Taxes based on or measured by any fees, commission or compensation received by the Owner Trustee or the ladenture Trustee for acting as trustee, or for other ser ices rendered, in connection with any of the transactions contemplated by the Transaction Documents or the Financing Documents: (viii) Taxes in the nature of penalties and interest on or with respect to an Indemnitee l arising by reason of such Indemnitee's failure to Gle proper and timely reports or returns (unless the fding of such reports or returns is the obligation of the Lessee under the Transaction Documents or the Financing Documents) imposed by reason of such Indemni-tee's failure to comply with the laws imposing such Tax or its material failure to comply with its obligations under Section 13(b)(6), unless such failure results from any action of the Lessee or failure by the Lessee to comply with any provision of the Transaction Documents or the Financing Documents, including the failure to provide necessary information: (ix) Taxes on or with respect to an Indemnitee arising as a result of a material failure of - such Indemnitee to fulGil its obligations, if any, with respect to the contest of any claim in i accordance with Section 13(b)(4) of this Participation Agreement. or the failure of such .j l ALPIIA i \ o l'
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I i l available to it otherwise than by reason of any payment by the Lessee pursuant to this Section 13(b); provided further, however, that notwithstanding the provisions of this clause (3). such Indemnitee shall not be obligated to make any payment to the Lessee pursuant to this clause (3) if at the time such payment shall be due an Event of Default shall have occurred and be continuing. (4) General Tax Indemnity-Contestt If a written claim shall be made against an> Indemnitee for any Tax for which the Lessee is obligated pursuant to this Section 13(b). such Indemnitee shall notify the Lessee promptly of such claim, but the failure so to notify the Lessee shall not affect any obligation of the Lessee pursuant to thi: Section 13(b) except as provided in Section 13(b H 2)(is) (unless the Lessee is otherwise aware of the existence of such claim),1f the Lessee shall request in writing within 30 days after receipt of such notice, such Indemnitee shall in good faith and at the Lessee's expense contest the imposition (including the amount) of such Taxes: prm.ided, howes er. that such Indemnitee, after considering in good faith any views offered by the Lessee and the Lessee's counsel concerning the forum in which the adjustment is most likely to be fasorably i resolved, may in its sole discretion select the forum for such contest and determine whether any such contest shall be by (A) resisting payment of such Taxes (B) paying such Taxes under protest , or (C) paying such Taxes and seeking a refund thereof; provided further, howeser. that (w) such l Indemnitee shall not be obligated to contest any claim in which the amount in question (including l present claims and claims reasonably expected to be asserted) is less than n00.000. h) at such , Indemnitee's option, such contest shall be conducted by the Lessee in the name of such ! Indemnitee (subject to the preceding proviso) and (y) in no event shall such Indemnitee be required or the Lessee permitted to contest the imposition of any Taxes for which the Lessee is i obligated pursuant to this Section 13(b) unless (u) the Lessee shall have acknowledged its liability to such Indemnitee for an indemnity payment pursuant to this Section 13(b) as a result of such claim if and to the extent such Indemnitee or the Lessee, as the case may be. shril not pres ail in the contest of such claim; (v) such Indemnitee shall have receised from the Lessee (i) satisfactory indemnity for any liability, expense or loss arising out of or relating to such contest including, but not limited to, (A) all reasonable legal, accountants
- and investigatory fees and ,
disbursements, (B) the amount of any interest, additions to tax or penalty that may be payable as a result of contesting such claim and (C) if such contest is to be initiated by the payment of. and the
]
claiming of a refund for, such Tax, sufilcient funds to make such payment on an After Tax Basis j and (ii) an opinion of independent tax counsel selected by the Lessee and approsed by such Indemnitee (which approval shall not be unreasonably withheld) and furnished at the Lessee's sole expense to the effect that a Reasonable Basis exists for contesting such claim or. in the esent of an appeal, that there exista a substantial possibility that an appellate court or an adnunistratis e agency with appellate jurisdiction, as the case may be, will reverse or substantial > modif> the adverse determination: (w) the Lessee shall have agreed to pay such Indemnitee on demand all reasonable costs and expenses that such Indemnitee may incur in connection wich contesting such claim (including, without limitation, all costs, expenses, losses, reasonable legal and accounting fees, disbursements, penalties, interest and additions to tax): (x) such Indemnitee shall hase reasonably determined that the action to be taken will not result in any danger of sale. forfeiture or loss of, or the creation of any Lien (except if the Lessee shall base adequately bonded such Lien or otherwise made provision to protect the interests of such Indemnitee in a manner satisfactory to such Indemnitee) on BVPS, Unit L Unit 2, the Undivided Interest. the Retained Assets, the Unit 2 Retained Assets, the Common Facilities, the Common Facilities Undisuled Interest, any Capitalimprovement or the BVPS Site, or any part of or any interest in any of the foregoing; and (y) if such contest shall be conducted in a manner requiring the payment of the claim, the Lessee shall have paid the amount required. The Lessee agrees to gis e such Indennutre reasonable notice of any contest prior to the commencement thereof. If any Indemnitee shall obtain a refund of all or any part of any Taxes paid by the Lessee or if any such refund would be payable to the Indemnitee in the absence of an offsetting liability for taxes payable to the tasme ALFilA 43 CURRENT ENDING PAGE CONDITIONS ARE OX THE NEXT PAGE : 04 6 00,00.00 I I
M so.ne integrat$1 Tygonettmg srstem vowVMs ' Jo 1 P9eOMG%Pk 22600892/ $250JoodPoGER EXEJPoGER JExt. s20 87 21. J 2 stru $2sDromsTYLEsisTYLfCH 8sT.19 Pdr Disk $sCRaTCNdPIL(PR00 SCRATCH)TT0000084 Kmt C. 100 see is em ca isoo pom Ne=t em sooo, vmt R JOB: Y38958 PCN: 048.00.00.00 SIN: 5 , OMio ED(s0N CO 80WNE OF NEW YORK (212)9245500 l i i authority in question (unless such taxing authority would have been foreclosed from asserting l such liability but for the contest of such Taxes), such Indemnitee shall pay the Lessee. but not before the Lessee shall have made all payments theretofore due to such Indemnitee pursuant to this Section 13(b), an amount equal to the lesser of(xx) the amount of such refund so receised or I receivable, including interest received, receivable or credited and attributable thereto or (yy) ! such tax payment by the Lessee to such Indemnitee theretofore made pursuant to this Section -l 13(b). In either case net of any expenses not already paid or incurred b> the Lessee: prosided. however, that notwithstanding the prosisions of this clause -(4). such Indemnitee shall not be obligated to make any payment to the Lessee pursuant to this clause (4) if at the time such payment shall be due a material Default or an Event of Default shall have occurred and be l continuing under the Facility Lease. An Indemnitee shall not be required to make any payment ' pursuant to this clause (4) before such time as the Lessee shall have made all payments and indemnities then due under the Transaction Documents to such Indemnitee. Notwithstanding anything contained in this clause (4) to the contrary, no Indemnitee shall be required to contest any claim if the subject matter thereof shall be of a continuing nature and shall hase previously been decided pursuant to the contest provisions of this clause (4) unless there shall have been a change in the law (including, without limitation, amendments to statutes or regulations, adminis-trative rulings and court decisions) after such claim shall have been so presicusly decided. and such indemnitee shall have received an opinion ofindependent tax counsel selected by the Lessee and approved by such Indemnitee (which approval shall not be unreasonably withheld) and furnished at the Lessee's sole expense to the effect that such change provides a Reasonable Basis for the position which such Indemnitee and the Lessee, as the case may be. had asserted in such previous contest. Nothing contained in this Section 13(b) shall require any Indemnitee to contest or permit the Lessee to contest a claim which it would otherwise be required to contest pursuant to this Section 13(b) if such Indemnitee shall waive payment by the Lessee of any amount that might otherwise be payable by the Lessee under this Section 13(b) by way ofindemnity in respect of such claim. (5) Cencral Tax IndemnitpReports. If any report, return or statement is required to be filed with respect to any obligations of the Lessee under or arising out of this Section 13(b). the Lessee shall timely Gle the same, except for any such report, return or statement which such Indemnitee has noti 6ed the Lessee that it intends to Ble. The Lessee shall either Ble such report. return or statement so as to show the ownership of the Undivided Interest in the Owner Trustee and send a copy of such report, return or statement to the Owner Trustee and such Indemnitee or. where not so permitted, notify the Owner Trustee and such Indemnitee of such requirement and prepare and deliver such report, return or statement to the Owner Trustee and such Indemnitee in a manner satisfactory to the Owner Trustee and such Indemnitee within a reasonable time prior to the time such report, return or statement is to be Sled or, where such return. statement or report shall be required to reGect items in addition to any obligations of the Lessee under or arising out of this Section 13(b), provide the Owner Trustee and such Indemnitee with information sufScient to permit such return, statement or report to be properly made with respect to any obligations of the Lessee under or arising out of this Section 13(b) (and the Lessee shall hold each Indemnitee harmless from and against any liabilities, obligations. losses, damages. penalties. claims. actions. suits and reasonable costs arising out of any insufEciency or inaccuracy in any such return. statement, report or information). Upon the reasonable request by the Lessee an Indemnitee shall furnish the Lessee with information in the Indemnitee's possession or reasonably obtainable by it (and not otherwise available to the Lessee) necessary for the Lessee to fulfil its tax Gling requirements and obligations (including the Bling of any report, return or st9ement in connection therewith and any audit information request arising therefrom). The Lessee shall not hase any right to examine the tax returns of any Indemnitee. ALPIIA . 44 CURRENT EN0!NG PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 047.00.00.00 l l 1_
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_I ' i i ? (6) Central Tax Indemnity-Payment. All Taxes shall be paid when due and payable and. unless otherwise requested by the appropriate Indemnitee, the Lessee shall pay any Taxes for which it is liable pursuant to this Section 13(b) directly to the appropriate taxing authority and shall'pa'y such Indemnitee promptly on demand in immediately available funds any amount due such Indemnitee pursuant to this Section 13(b) with respect to such Taxes. Any such demand shall specify in reasonable detail the payment and the facts upon which the right to payment is based. Each Indemnitee shall promptly forward to the Lessee any notice bill or achice receised by it concerning any Taxes. Within 30 days after the date of each payment by the Lessee of any Taxes. the Lessee shall furnish the appropriate Indemnitee the original or a certifed copy of a receipt for the Lessee's payment of such Taxes or such other evidence of payment of such Taxes as is acceptable to such Indemnitee. The Lessee shall also furnish promptly upon request such data as any Indemnitee may require to enable such Indemnitee to comply with the requirements of any taxing jurisdiction. Whenever any payment is to be made by the Lessee under this Section 13(b) . and it shall be necessary, in calculating the After-Tax Basis amount of such payment. to compute the amount of any liability for federal, state or local tax imposed on or measured by the net - income of any Indemnitee, such computation shall be based on the assumption that such taxes shall be payable at the highest marginal statutory rate in effect for the relevant period. (7) Defnition of fndemniter. For purposes of this Section 13(b). the term Indemnitee shall mean and include the successors and assigns of each respective Indemnitee, and for purposes of federal income taxes, the afEliated group of corporations und each member thereof (within the meaning of Section 1504 of the Code) of which such Indemnitee is a member. if such group shall Sie a consolidated United States federal income tax return, and, for purposes of income or , franchise taxes imposed by a particular state or local taxing jurisdiction, shall mean and include ' any consolidated or combined group of which such Indemnitee is or shall be a member that is treated as such by such state or local taxing jurisdiction. (c) Supporting Materfa!. Each Indemnitee shall provide to the Lessee such supporting material (other than tax returns) as the Lessee shall reasonably request in connection with the matters set forth in Section 13(b).' The Lessee shall reimburse to any Indemnitee any expenses incurred in prosiding requested supporting material to the Lessee. (d) Verification. All computations required to be made under Section 13(b) shall (except as provided below) be made in the Brst instance by the Indemnitee, and the results of such coruputation sha:1 be delivered to the Lessee in writing. At the request and expense of the Lessee. the accuracy of such computations shall be veri 6ed by the independent accountants then employed by such Indemni-tee, or other nationally recognized accounting Brm as such Indemnitee may reasonably select. The Indemnitee agrees to cooperate fully with said accounting Brm, whether it be the regular accounting firm or one nominated by the Indemnitee, and further agrees to provide it with any material such firm believes is reasonably necessary in order to ensure the accuracy of the computations. Such accounting firm shall be requested to make its determination by the date on which the payment of any such amount must be made by the Lessee to the Indemnitee. In any case, the computations of the accounting Brm, selected as provided above, shall be Gnal, binding and conclusise upon Lessee and Indemnitee; and the Lessee shall have no right to inspect the books. records, tax returns or other documents of or relating to an Indemnitee to verify such computations. The assumptions and method l of analysis revealed or made available to such independent public accounting Grm or other Persons shall be kept con 6dential and shall not be revealed by them to any Person. (e) Cooperation. The Owner Participant shall cooperate and shall cause the Owner Trustee to cooperate with and to consider in good faith any reasonable request by the Lessee upon the written request and at the expense of the Lessee, in order to avoid or minimize any Taxes for which the Lessee is responsible under Section 13(b). ALPilA 45 CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 048.00.00.00 1 1 i-
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l Ser tto s 14. Transaction Expenses, i i l :a
' (a) Transaction Expenses.- Subject to the provisions of paragraph (c) below, with funds prosided j
l by the Owner Participant, the Owner Trustee hereby agrees that it will pay when due. or reimburse . ~ i I any Person who has previously paid. an appropriate portion (taking into account the other undivided . '
!~
interests in Unit 2 being sold on the Closing Date) of the followins costs and expenses (" Transaction i L Expenses") without duplication of amounts payable with respect to the other undisided interests in l ~ Unit 2 sold on the Closing Date: 1 (i) the reasonable legal fees and disbursements of the Original Loan Participants' Counsel l the Owner Participant's Special Pennsylvania Counsel, the Owner Participant's Special Ohio ' Counsel, the Owner Participant's Special Counsel, the Owner Participant's NRC Counsel the 1 Owner Participant's Special Tax Counsel, each local counsel retained by the Owner Participant in the jurisdictions contiguous to Pennsylvania and in Indiana, Michigan. Kentucky and the Province of Ontario, special counsel retained by any Partner, the Owner Trustee's Counsel, the Indenture !' Trustee's Counsel and Mudge Rose Cuthrie Alexander & Ferdon for their services rendered in connection with the execution and delivery of this Participation Agreement and the other Transaction Documents and ,dl fees. expenses and disbursements incurred by them in connection with such transactions; and reasonable legal fees, expenses and disbursements in connection with NRC approvals in connection with such transactions: 1 (ii) the initial (but not the ongoing) fees and expenses of the Owner Trustee and the Indenture TrusteeJthe initial (but not the ongoing) fee of the General Partners equal to .0fm of the Facility Cost and the nuclear and insurance advisors of the Owner Participant: (iii) all stenographic, printing, reproduction. and other reasonable out of pocket expenses (other than investment banking oriaokerage fees) incurred in connection with the execution und ' delivery of this Participation Agreement and the other Transaction Documents and all other agreements, documents or instruments prepared in connection therewith (including all computer lease analysis and travel related costs);
'(iv) the fees of the Appraiser for services rendered as contemplated by Section ll('a)(28):
(v) all costs of issuance of the Bonds issued to refund the Initial Series Notes including, without limitation, the costs of preparing the Financing Documents, all filing fees relating to any Registration Statement and the fees, expenses and disbursements of the law Grms referred to in clause (i) above, special counsel for the Collateral Trust Trustee, special counsel for Funding Corporation and special counsel for the purchasers, or in the event of a public offering of such Bonds, underwriters of the Bonds, the initial fees of the Collateral Trust Trustee and its out of.- pocket expenses through the applicable Refunding Date or Releveraging Date. as the case may be. rating agency fees, the fees and commissions of the underwriters of such Bonds and the fees. expenses, and disbursements of the Loan Participants, and in connection therewith (includmg all computer analysis and travel related costs), (vi) commitment fees payable to the Original Loan
Participants:
and (vii) the fees and out-of pocket expenses of First Boston and Goldman Sachs in connection
- with the placement of the bene 6cial interest in the Trust, which shall be initially paid by the Lessee, subject to reimbursement as provided in the Brst paragraph hereof to the extent that moneys are available for such purpose.
Sulp to tb provisions of paragraph (c) below, funds for the payment of Transaction Expenses will be provided by the Owner Participant to the Owner Trustee and the Owner Trustee will promptly disburse such funds. ALPHA 46 CURRENT ENDING PAGE CONDITIONS ARE 01 THE NEXT PAGE : 049.00.00.00 t 1 l-
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I 8 L (- l L (b) Post Closing Expenses._ The Lessee will pay, as Supplemental Rent, (1) the ongoing fees. expenses, disbursements, administrative costs and other costs (including legal. accounting, pricing and other professional fees and expenses) of or incurred by the Owner Trustee, the Indenture Trustee. the Owner Participant, any Partner, and the Collateral Trust Trustee. including in connection with the issue. sale and purchase of Notes and Bonds after the Closing Date, and (ii) all fees. expenses. disbursements and costs (including legal and other professional fees and expenses) incurred by the Loan Participants, the Owner Participant, any Partner, the Owner Trustee. the Indenture Trustee and the Collateral Trust Trustee in connection with (a) any Default. Event of Default. Reimbursement i Default, Reimbursement Event of Default, Indenture Default or Indenture Event of Default, (b) the entering into or giving or withholding of any amendment, modfScation, supplement, waiser, consent or other action with respect to any Transaction Document or Financing Document, (c) any Event of Loss or Deemed Loss Event, (d) any transfer of all or any part of the right, title and interest of the Indenture Trustee in, to and under the Transaction Documents (e) any transfer of all or any part of '
' the right, title and interest of the Owner Trustee in the Undivided Interest or in, to and under the Transaction Documents (f) any Special Transfer and (g) any releveraging or refunding or reoptimiza-tion referred to in Sections' 2(c), 2(d) or 2(e) (except to the extent constituting Transaction -
Expenses). - (c) Lessce's Obligation. Notwithstanding Section 14(a) hereof, (i) in the esent the transactions contemplated by this Participation Agreement shall not be consummated, the Lessee shall pay or cause to be paid, and shall indamnify and hold harmless the Original Loan Participants. the Funding Corporation, the Indenture Trustee, the Owner Trustee and the Owner Participant in respect of all Transaction Expenses unless, in the case of the Owner Participant such failure to consummate shall result solely from the Owner Participant's default in making its Investment hereunder and (ii) the Lessee shall pay or cause to be paid [, to the extent not paid through the application of the proceeds of a Refunding Loan as permitted by Section 2(d),l that portion of the Transaction Expenses which exceeds 1,10% of the Purchase Price (provided that on the initial Refunding Date, the Owner Trustee (with funds provided by the Owner Participant) shall pay an amount of Transaction Expenses which w hen taken together with Transaction Expenses theretofore paid by Owner Participant will not exceed 2.00% of the Purchase Price (and appropriate adjustments under Section 3(e) of the Facility Lease shall be made), . l Secrnon 15, owner Participant's Transfers. (a) Transfers. After the Closing Date, except as a Special Transfer, the Owner Participant shall l not assign, convey or otherwise transfer all or any part of (including without limitation an undivided I interest in) its right, title or interest in, and to this Participation Agreement, any of the other Transaction Documents or the Trust Estate (except its right to receive Excepted Payments) to any
]
Person (a " Transferee") except on the following conditions: { (i) the Transferee shall enter into an agreement or agreements whereby such Transferee con 6rms that (1) it shall be bound by the terms of this Participation Agreement and each other f i Transaction Document, to the extent of the interest transferred, as ifit had been odginally named i as the Owner Participant hereunder and thereunder, (2) if such Transferee who at the time of { transfer is an entity which is subject to regulation as an electrie utility. public utility or a holding ( company of an electric utility or public utility under Applicable Law or Governmental Action, it j shall have waived its right to claim Special Casualty Value upon the occurrence of a Deemed Loss ' Event of the type speciSed in clause (1) of the de6nition thereof under the Facility Lease and (3) if such Person is not a limited partnership, appropriate changes to the Transaction Documents to i delete references to matters relating to Partners or partnership structure shall be made: I (ii) the Transferee shall be either a financial institution, a corporation or a partnership. a majority in interest in which is composed of one or more Snancial institutions or corporations; and l ALPilA i 47 I i _. CURRENT ENDING PAGE CONDITIONS ARE INCONSISTENT WITH THE NEXT PAGE : 050.00.00.00 1 I i
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. (iii) such transfer shall not violate the Securities Act or any provision of. or create a relationship which would be in violation o( any Applicable Law or agreement to which the transferring Owner Participant or the Transferred is a party or by which its property is bound.
Upon any such transfer the transferring Owner Participant shall be released from its obligations under this Participation Agreement and the other Transaction Documents to the estent of the interest transferred other than its obligation set forth in Section 7(b)(1) hereof with respect to Owner Participant's Liens created by or arising through such transferring Owner Participant. An agreement to transfer shall not in and of itself constitute a transfer for purposes of this Section 15. (b) Pmeedure. If the Owner Participant shall transfer all or any part of its interest hereunder pursuant to this Section 15 it shall give written notice thereof to the Lessee, the Owner Trustee. the Indenture Trustee and the Loan Participants, specifying the name and address for notices to the Transferee, such other information and evidence as shall be reasonably necessary to establish compliance with this Section 15 and the extent of the interest transferred to such Transferee (such Information and evidence shall be deemed to be approved by the Lessee, the Owner Trustee. the Indenture Trustee and the Loan Participants unless the transferring Owner Participant is otherwise so advised in writing within 10 Business Days' of the date of the such notice),If, as a result of any such transfer, the original Owner Participant is not to continue to receive all payments to be made b> the Indenture Trustee to the " Owner Participant" under the Indenture, the original Owner Participant shall from time to time, by notice to the Indenture Trustee, with copies to the Lessee. the Owner Trustee and the Collateral Trust Trustee, designate the manner in which any such payments to the
" Owner Participant" are to be allocated, and the Indenture Trustee shall be entitled to rel> on such notice for all purposes. This Section 15 is for the bene 6t of the Lessee, the Owner Trustee and the l Owner Participant and may not be enforced by any other party, SecTion 16. Bmkerage and Finders' Fees and Commissions.
Except to the extent of amounts payable by the Owner Participant pursuant to Section 14. the l Lessee shall and hereby does indemnify and hold harmless each Loan Participant. the Indenture Trustee, the Owner Trustee and the Owner Participant in respeu of any commissions. fees. Judgments or other expenses of any nature and kind which any of them may become liable to pay by reason of any claims by or on behalf of brokers, Gnders, agents, advisors or investment bankers in connection with the transactions contemplated by this Participation Agreement, any other Transaction Document or any Fintncing Document, or any litigation or similar proceeding arising from any such claims. other than those claims arising out of written undertakings of the party claiming indemni6 cation under this Section 16 or any AfEllate or shareholder or partner (or Affiliate of such shareholder or partner) of such Person with any such broker, finder, agent, adsisor or investment banker. , SECTION 17,. SuWind Of Representations and Warranties: Binding Efect. (a) Surekal. All indemnities, representations and warranties contained in this Participation Agreement, in any other Transaction Document, in any Financing Document and in any agreement. l document or certi6cate delivered pursuant hereto or thereto or in connection herewith or therewith. shall survive. and shall continue in effect following the execution and delisery of this Participation f l Agreement, the making of the investments and the loans referred to herein. any disposition of an> I l interest in the Undivided Interest, Unit 2 or any other property referred to in this Participation Agreement and the expiration or other termination of any of the Transaction Documents or Financing Documents and shall be and continue in effect i, notwithstanding (i) any investigation made b> the Owner Participant or the Loan Participants or (ii) the fact that any of the Indenture Trustee. the j Owner Trustee, the Loan Participants or the Owner Participant may waive compliance uith an> of the i i terms, provisions or conditions of any of the Transaction Documents or Finanemg Documents. This i ALPHA I 48 l l _ CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 0$ Loo.00.00 -- l I 1 } _ _ _ _ _ _ _ _ _ - . _ _
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l j i uy i Section 17 and the ' obligations of the Lessee under Sections 10(b)(1)(vi),10(b)(1)(vii),10(b)(2).- l 10( b) (3 ) (iv), 10( b) (3) ( vil ),10( b) (3) ( viii),10( b) (3) (ix),10(b) (3) (x ),10( b ) (3) ( x1),10(b ) (3 ) (xili ) , 13,14,16 and 20(f) shall survive the expiration or other termination of this Participation Agreement or any other Transaction Document or Financing Document. The extension of any applicable statute of limitations by the Owner Trustee, the Indenture Trustee, the Lessee, the Owner Participant, the Loan Participants or any Indemnitee shall not affect such survival. (b) Binding Efect. ' All agreements. representations and warranties in this Participation Agree. ment, the other Transaction Documents and the Financing Documents and in any agreement, document or certi6cate delivered concurrently with the execution of this Participation Agreement or from time to time thereafter, shall bind the party making the same and its successors and permitted assigns and shall inure to the bene 6t of each party for whom made, their respective successors and l permitted assigns, and, to the extent provided in the next sentence, each Indemnitee and its successors and assigns. The obligations of the Lessee under Section 13 hereof and Section 20 of the Facility Lease are expressly made for the bene 6t of, and shall be enforceable by, any Indemnitee. separately or together, without declaring the Facility Lease to be in default and notwithstanding any assignment by the Lessor of the Facility Lease or any of its rights thereunder or any disposition of all or' any part of l any interest in the Undivided Interest, Unit 2 or any other property referred to in this Participation Agreement er any other Transaction Document or any Financing Document. All payments required to be made pursuant to Section 13 hereof shall be made directly to, or as otherwise requested by. the Indemnitee entitled thereto upon written demand by such Indemnitee. The Lessee shall not assign any ofits rights or obligations hereunder without the prior written consent of the Owner Participant and the Owner Trustee. Except as otherwise indicated, all references herein to any party to this Participation Agreement and the other Transaction Documents shall include the permitted successors and assigns of such party. SumoN 18. Notices, Etc. (a) Notices, etc. All communications, notices and consents provided for herein shall be in writing, including telex, telecopy or other wire transmission containing a request for assurance of receipt in manner typical with respect to communications of that type, or mailed by registered or certi6ed mail, and shall be addressed (i) if to the Owner Participant or to an Original Loan Participant. at the address for noticei, set forth on Schedule 1: (ii) if to FNB. or the Owner Trustee, at The First National Bank of Boston,100 Federal Street, Boston, Massachusetts 02110, Attention: Corporate Trust Division (Telex No. 94 0581 Bostonbk BSN): (iii) if to the Indenture Trustee, at Irving Trust Company, One Wall Street, New York, New York 10015, Attention: Vice President. Corporate Trust Administra. tion: (iv) if to Funding Corporation at Corporation Trust Center,1209 Orange Street, Wilmington. Delaware 19801. Attention: President; and (v) if to Lessee at 76 South Main Street. Akron Ohio 44105. Attention: Secretary; or at such other address as any party hereto may from time to time designate by notice duly given in accordance with the provisions of this Section to the other parties hereto. All such communications, notices and consents given in the manner provided above shall be effectise on the date of receipt of such communication, notice or consent. (b) Distribution of Certain Materials. The Owner Participant hereby requests each other part> hereto, and the parties hereto hereby agree, that, as a matter of convenience only, each communica. tion, notice, consent, certi6cate, document, Snancial statement, opinion or other material that the Owner Participant is entitled to receive under this Participation Agreement, the other Transaction Documents and the Financing Documents shall be sent in addition to each Partner at the address set forth in Schedule 1. ALPHA ' I 49 l l 1 CtJRRENT ENDING PAGE CDNDITIONS ARE 0.K. THE NEXT PAGE : 052.00.00.00 I I I-.
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SecTsos 19. Original Loan Participant Procisions. (a) Notwithstanding anything to the' contrary contained in Section 6.8(c) of the Indenture, at any time that the Initial Series Notes shall be Outstanding, the Owner Trustee shall not terminate the -
. Facility Lease or arrange for the substitution of another Person as lessee without the prior written consent of the Original Loan Participants, which consent shall not be unreasonably withheld or delay ed.
(b) Notwithstanding anything to the contrary contained in Section 2.3 of the Indenture. at any time that the Initial Series Notes shall be Outstanding, there shall be no release of all or any portion of - s the Lease Indenture Estate f.om the security or other interest created by Section 2.1 of the Indenture without the prior written consent of the Original Loan Participants, which consent shall not be unreasonably withheld or delayed. (c) The provisions of this Section 19 shall prevail to the extent they are inconsistent with or contrary to the provisions of any of the Transaction Documents. (d) The provisions of this Section 19 shall remain in full force and effect until the full payment of all principal of, and premium, if any, and interest on, the Initial Series Notes. SecTsos 20. Miscellaneous. (a) Erecution. This Participation Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which, when so executed and-delis ered, shall be an original, but all such counterparts shall together constitute but one and the same instrument, Ahhough this Participation Agreement is dated as of the date first abose written for convenience, the actual dates of execution hereof by the parties hereto are respectively the dates set forth under the signatures hereto, and this Participation Agreement chall be effective on the latest of - such dates.
-(b) Intention of the Owner Participant. The Owner Participant intends to exercise its rights and -
carry out its obligations hereunder and under the other Transaction Documents solely with a view to furthering its own best interests and does not have, and does not expect to have, any form of joint profit motive with any other Person. The Owner Participant shall not be required to share any Rent to which it is entitled under the Facility Lease with any other Person except to the extent provided in the Indenture. The Owner Participant is not under the control of nor shall it be deemed to be under the l control of any other Person having any interest in Unit 2, and shall not be the agent of or have a right or power to bind any such Person (other than the Owner Trustee) without its express written consent, The Owner Participant =?cordingly does not intend to create any form of partnership or joint venture with any other Person by virtue of the transactions contemplated hereby or by any of the Transaction Documents. In the event that it is determined, contrary to the intent of the Owner Participant, that, for purposes of the Code or any other income tax law, a form of partnership or joint venture exists between the Owner Participant and any other Person, the Owner Participant hereby elects to the > extent permitted by law (i) not to have the partnership provisions of the Code or such other income tax law apply to any of the transactions contemplated hereby or by any of the Transaction Documents and (ii) to be treated solely as owning the Undivided Interest. (c) Coceming Law. This Participation Agreement has been negotiated and delisered in the State of New York and shall be governed by, and be construed in accordance with, the laws of the State of New York. (d) Amendments, Suppicments, etc. Neither this Participation Agreement nor any of the terms hereof may be amended, supplemented, waived or modified orally, but only by an instrument in , wrating signed by the party against which enforcement of such change is sought. ALPHA 50 l CURRENT ENDING PAGE CON 0m0NS ARE 0.K. THE NEXT PAGE : 052.01.00.00 i l
, 1
w _ _- _ __ --_ 1 M Sowne integrated Typewttmg system vaA/v:ls Jets 1 PR00MGRBPA/ 226004~.1/ 52$0JAmrMER EXDrMER EXC. J sep.87 M J2 sty? $250JA44 (s14ES)SrYLE00s 8st,tt F42 Otsa s sCR A TCH8PX. t PR00. sCCATCH)fT0000084 Fmt C. 100 set 22 Free Isaa 12000*pourts. Nest Eat 12600. Vwst hF2:n JOB: Y38958 PCN: 052.01.00.00 S/N: 1 OH10 E0150N Ca 80WNE OF NEW YORK (212)9245500 I i (e) Headings. The headings of the sections and paragraphs of this Participation Agreement have been inserted for convenience of reference only and shall in no way restrict or otherwise modify any of the terms or provisions hereof. (f) Bankrupterj of Oscner Participant or Osener Tru.stee. If (a) the Owner Participant or the On nar Trustee becomes a debtor subject to the reorganization prosisions of the Bankruptcy Code. or j any successor provision. (b) pursuant to such reorganization provisions the Owner Participant or the Owner Trustee is required. by reason of the Owner Participant being held to base recourse liability directly or indirectly to the Holder of any Note or the Indenture Trustee, to make payment on account of any amount payable as principal or interest on such Note and (c) such Holder or the Indenture Trustee actually receives any Excess Amount (as hereinafter deBned) which reflects any payment by the Owner Participant on account of clause (b) of this Section, then such Holder or the Indenture Trustee. as the case may be, shall promptly refund to the Owner Participant such Excess Amount. For purposes of this Section. " Excess Amount" means the amount by which such payment exceeds the amount which would have been received on or prior to the date of such payment by such Holder or the Indenture Trustee if the Owner Participant or the Owner Trustee had not become subject to the recourse liability referred to in clause (b) of this Section. Nothing contained in this Section shall prevent such Holder or the Indenture Trustee from enforcing any personal recourse obligation (and retaining the preceeds thereof) of the Owner Participant expressly providEd for under this Participa. tion Agreement. (g) Entire Agreement. This Participation Agreement (including the Schedules hereto) the other Transaction Documents, the supplemental agreement between the Lessor and the Lessee referred to in the deSnition of" Fair Market Sales Value"in the Asr.ignment and Assumption Agreement and the Financing Documents supersede all prior agreements, written or oral, between or among any of the parties hereto relating to the transactions contemplated hereby and thereby and each of the parties hereto represents and warrants te the others that this Participation Agreement and the other Transaction Documents and the Financing Documents constitute the entire agreement among the parties relating to the transactions contemplated hereby and thereby. (h) No Recourse to General Partners or Limited Partners. Recourse for payment of amounts payable by the Owner Participant under the Participation Agreement any other Transaction Docu. ment or any Financing Document shall be limited to the assets of the Owner Participant and none of the parties hereto will commence or continue any action, suit or proceeding seeking personal recourse or judgment against any General Partner or any Limited Partner for payment of any such amounts. (i) Publicity. Each party hereto agrees that it will not issue or release for external publication any article or advertising or publicity matter relating to or otherwise disclose the transactions contemplated hereby or any similar transaction and mentioning or implying the identity of the Ow ner Participant or any Partner without the prior written consent of the Owner Participant and each of the parties agrees that it will maintain the con 6dentiality of the transactions contemplated hereby provided however, that the Owner Participant agrees that such consent shall not be withheld if and to the extent that such disclosure is required by Applicable Law. 2 l ALPHA ! i 51 I CURRENT ENDING PAGE CONDITIONS ARE 03 THE NEXT PAGE : 053.00.00.00 i - I L_-_------_
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' PEnth dNE ALPHA LIMITED PARTNERSHIP '
, By Perry One. Inc. "
By
. TitinL President . <
l . Date: September 30,1987 l q-1 (CHE5tlCAL BANK,l o y. y; y l , ,r : '
' Title t V Date: September 30,1987
.p l b ., i.
1 [WESTPAC BANKINC,CO3PORATION.] '^ ' g By
Title:
l Date: September 30,1987 [ CANADIAN IMPERIAL BA: Or ,COMMEnr:E.l By
Title:
n; Date: September 30.1987 , ,, p:
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[THE toronto-DOMINION BANK. CRAND CAntAN ISLANDS BRANCH l By
Title:
I Dste September 30.1987 l {l/NION BANK.] i i' s i By
Title:
' c Date: September 30.1987 ALPilA 52 1 _ CURRENT ENDING PAGE CON 0m0NS ARE 04 THE NEXT PAGE : 054.00.00.00 -
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_ i i r I h. g< , i-l 7 lTHE CHASE MANHATTAN BANK. N.A..l
,i By
Title:
o ,. Date: September 30 1967 ITitE RovAL BANK OF CAN ads.l By
Title:
Date: September 30.1987 [STANorno CHARTERED Bask.l T' _
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Title:
!j Date: September 30,1987 OHlo EDISON COMPANY, By
Title:
Executile Vice President t, l l Date: September 30,1967 ( THE FlasT NaTios AL Ban or BosTos. in its indi-vidual capacity and as Owner Trustee By
Title:
Date: September 30.1987 l linvisc Tacsr CoueANY.I in its inan idual capacit> and as Indenture Trustee By
Title:
Date: September 30.1967 l BVPS FeNorsc CoaronATros B y. Tit 'e: Da e September 30.19S7 ALPIIA 53 r I CURRf.NT ENDING PAGE CON 0m0NS ARE 0.K. THE NEXT PAGE : 056 00.00.00 _ i I
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Schedule 1
- Participants A. Owner Participant -
Commitment
. Perry One Alpha Limited Partnership . .g clo Squire, Sanders & Dempsey 1800 Huntinitton Buildmg Cleseland. Ohio 44115 Attention: John P. Dunn. Esq.
Telex: 965661 Telecopy: 216-687-8777 with a copy of all communications, notices and consents to: Francis H. Musselman. Esq. Milbank. Tweed, Hadley oc McCloy 1 Chase Manhattan Plaza New York New York 10005 l Telex; 22962 Telecopy: 212-530-5999 B. Limited Partner - l [$ovran Leasing Corporation Attn: Mr. William N. Smith Senior Vice President 1510 Willow Lawn Drive l Richmond Virginia 23230] C. Original Loan Participants Loan Percentage
, Chemical Bank g 277 Park Avenue New York New York 10172 Telex: 422803 Rapifax: 212 371-1727 Attention: Jane C. Spencer With a copy to:
Chemical Bank 277 Park Avenue - New York New York 10172 Telex: 422803 Rapifax: 212 371 1727 Attention: Joanne L. Johnson
. lWestpac Banking Corporation %
Three First National Plaza Suite 1200 Chicago, Illinois 60602 Rapifax: 312 332-3527 Telex: 210103 Attention: Karin Janowski With a copy to
. Westpac Banking Corporation Special Industries Three First National Plaza Suite 1200 Chicago, Illinois 60602 Rapifax: 312-332-3527.
Telex: 210-103 l Attention: Melissa R. Taylor) ALPHA - f' f l CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEX1 PAGE : 0$7.00.00.00 - I l i 1
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. : omo ee: son ca ne seo.v,wn. .sai tae ineso. wj sta i JM: YA964 towat CF new voeu PCN: Ejf.00.00.00 s/N: 5 y
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t I (Union Bank - %
$1 ; 445 South Figueroa Street t*
. 9}:
~ ' .f ' Los Angeles California 90071 c Teirex: 674512 -
J~- il M. ' itapifax: 213 236-4096 .
,, f I- . ' Attention: John M. Edmonston , -- j-j" I'
= St$ndard Charwred Bank - E -g
' ?J Bill.ter Street - '
w y- 7
'Lsden EC3A 2BE S 33 1 Er land - ~ # ; f,/ ,
q I, J:' Te ex: 885951'
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-l Racifax: 9-011-441 280-7849
- Attention: P.R. Thomas, Loans Administrative Manag,ert
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The Royal Bank of Canada s %
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ew York Brr,och e
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g 76 Wil2em Fr.wt ,
! M ~ ff j . New Yorc, %v Yo-k 10005 '
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Telex: 01-2W/ ,~ . i 'a Answerback: '10'.
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AN 61519 g , f Hapifax: 212-311-f.994 . i ' A, , Attention: Manag:tr - Luans A
- Administration - i
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',- With a copy to:, - I
/o o The Royal Bank of Cami/. i #
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, ' One PSG Place, Suite 2D0 :
Pittsburgh, Penns:<!vania 15222 -r'* Teka: 6e 12899 . .,^
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- Rapifax: 412-232 3258 t l Attention: James W, Gibson} c
) ,f J s i j - [The, Toronto Dor-!nion Bank. <- C % actin through its - - r Cra Ca a ~
#,L i Three First Suite 1900 bman
'ational Plaza Isinds Gran'ch
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' Tebex: 253835 TORBADOM CHCO ,
Attention: Manager, Credit Administration f a
,m iWith a copy to: ,
) The Toronto-Dominion Bank 55 East 52nd Street f .10th Floor New ' fork, New York 100T #
Telex: 645489 TOR DOM DIVNYK s i Rapifax: 212-888 5023 j Attention: Senior Mana er x , ., l } Utilities Finance Group a .#/ l /' I [ Canadian Imperial Bank of Canmerce % Suite 5670, U.S. Steel Building 600 Grant Streeb Pittsburgh, Pennsylvania 15219 Telex: 866-482 Rapifax: 412 456-2212 Attention: Manager, Corporate Bankhg '
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' With a copy to:
. Canadian Imperial Bank of Commerce' Corporate Finance Group Suite 2300 200 W. Madison Street Chicago, Illinois 60606 Telex: 206-913
- Rapifax: 312 750427 -..
Attention: Assistant General Manager-L~tilities)
~ IThe Chase Monhattan Bank, N.A.-
One Chase Manhattan Plaza New York, New York 10081
' Rapifax: 212-552-1687 Telex: 125568: Answerback: CMBNYK'
; Attention: George E. Wik
, .=
With a copy
.The Chase to! . hattan Bank, N.A.
' Man
' Commercial Loan Department One Chase Manhattan Plaza Floor IB -
New York, New York 10081 - Telex: 125566 l Attention: Frank Mililloj 4 ALPHA l 3 CURRENT ENDING PAGE CON 0!TIONS ARE 0.K. THE NEXT PAGE : 059.00.00.00
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_I. . I _ Schedule 2 OHIO EDISON COMPANY ~ BEAVER VALLEY POWER STATION UNIT 2 NOTICE OF CLOSING
~
Pursuant to Section 5(a) of the Participation Agreement, dated as of September 15.1987 (the "Parflefpation Agreement"). among (Owner Participant], the Original Loan Participants, listed in l- Schedule I thereto, BVPS Funding Corporation. The First National Bank of Boston. in its individual capnetty and as Owner Trustee. Irving Trust Company, in its individual capacity and as Indenture Trustee. and Ohio Edison Company ("OE"), OE hereby gives notice of a Closing to occur at 10:00 a.m. on September 30,1987 (the " Closing Date"). The Closing will be held at the offices of Mudge Rose Cuthrie Alexander & Ferdon,180 Maiden Lane, New York, New York 10038. (1) Purchase Price is 8 . (ii) Based upon information supplied to OE. the current estimate of Transaction Expenses is an aggregate of 8 . Instructions with respect to such Transaction Expenses will be provided by OE. (iii) Payment of the Purchase Price shall be made [to comel. Capitalized terms used herein and not otherwise sp'eci6eally defined herein shall have the meanings set forth in Appendix A to the Participation Agreement. IN WITNESS WHEREOF, Ohio Edison Company has executed this Notice of Closing this day of
, 1987.
OurO EDISON CO%tPANY By
Title:
l 1 ALPHA 1 I
, CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 060.00.00.00 l l 1
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, Owl 0 EDis0N Co. BowNE OF hew VCi.K (212>0215500
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Schedule 3 BrLL Or SALE AND ASSIGNMENT, dated as of , 19 , from (OWNER PARTICIPANT l (the " Owner Participant"), to OHIO EDISON COMPANY, an Ohio corporation ("OE"). WITNESSETH: WHEREAS, pursuant to Section 7(b)(4) of the Participation Agreement. dated as of September 15. 19S7, among the Owner Participant, the Original Loan Participants referred to therein. BVPS Funding Corporation. The First Nanonal Bank of Bosten, in its individual capacity and as Ow ner Trustee. In ing Trust Company, in its in s Anal capacity and as Indenture Trustee and OE. as Lessee (the "Participa-tion Agreement"), the Owner Participant desires to sell and OE desires to buy the Assigned Propert> (as hereinafter de6ned); Now, THEBEFORE, in consideration of the premises and of other good and valuable consideration. receipt and sufEciency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS Sect ON l.01. For purposes hereof, capitalized terms used herein shall have the meanings assigned to such terms in the Participation Agreement. References in this Agreement to articles, sections and clauses are to articles, sections and clauses in this Agreement unless otherwise indicated.
" ARTICLE II ASSIGNMENT OF TnesT ESTATE SEcr:ON 2.01. Assignment. The Owner Participant does hereby grant bargain. conse.s. self.
assign transfer and set over to OE. without recourse, representation or warranty. express and implied. of any nature whatsoever (except as set forth in the next succeeding :entence). all of the owner Participant's right, title and interest in, to and under the Trust Estate except the Owner Participant's right to meive Excepted Payments (the " Assigned Property") isubject to the Owner Participant's security interest in, and interest of OE, as successor Owner Participant in. to and under the Assigned Property'j. The Owner Participant hereby represents and warrants to OE that the Owner Participant has goo:1 and valid title to the Assigned Property free and clear of all Owner Participant's Liens. IInsert the following prevision if OE shall be obligated to pay the Secured Obligations: SECTION 2.02. Secured Obligations. OE is obligated pursuant to Section 7(b)(4) of the Partici-pation Agreement to pay the Owner Participant the full amount of any Secured Obligations dne thereunder and agrees hereunder to pay the full amount of such Secured Obligations to the owner Participant. As security for its obligation to pay the Secured Obligations due to the Owner Participant. OE has granted to the Owner Participant a security interest in and general lien upon all of the nght. l title and interest of OE as successor Owner Participant in. to and under the Trust Estate.l [ Insert following if the Owner Participant has received the Required Rent Payment Amount. SEcr ON 2.02. Acknowledgment. The Owner Participant hereby acknowledges receipt of l $ representing payment in full of the Required Rent Payment Amount.l ARTICLE III ErrECUVENESS OF TaANsrEn SECTION 3.01. Effectiveness of Transfer. [The transfer of the Assigned Property shall become l effective without further action upon the execution and delisery by the Owner Participant to OE of this Bill of Sale and Assignment and the furnishing of a counterpart of this Bill of Sale and Assignment to the Owner Trustee.1 [In accordance with Section 7(b)(4) of the Participation Agreement the transfer of the Assigned Property took place automatically upon the occurrence of an Esent of Loss speci6ed in the last paragraph of the de6nition of Final Shutdown.]
- To be inserted if on the date of the Special Transfer OE is obligated to pay the Secured Obhgarmns.
ALPilA I CURRENT ENDING PAGE CONDITIONS ARE INCONSISTENT WITH THE AEXT PAGE : 061.00.00 00 -. I l
_ - .-.-.------ -- -- - - - - -- . = - - -
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.a. OMIO EDISON C0 00WNE OF NEW YORK ' (11119245500
_l - i ARTICLE IV
- MISCELLANEOUS SEctlON 4.01. . Successors and Assigns. This Bill of Sale and Assignment shall be binding upon the
- Owner Participant and its successors and assigns and shall inure to the benefit of OE and its successors and assigns.
' SEcrm 4.02. Corerning Law. This Bill of Sale and Assignment shall be goserned b> and construed and enforced in accordance with the law of the State of New York.
SErrlON 4.03. L Headings. The division of this Bill of Sale and Assignment into sections. and the insertion of headings are for convenience of reference only and shall not affect the construction or
' interpretation of this Bill of Sale and Assignment.
IN WrrNEss WHEREOF. the undersigned has caused this Bill of Sale and Assignment to be duly executed as of the day and year written above. [ OWNER PARTICIPANT l By
Title:
i ALPHA - 2 _ CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 063.00.00.00
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' OMIO EDISON Ca BOWNi 0F NfW YORM (212); % s00 I
i i ,~ Schedule 4 Recordations and Filings Part I. Recordations in Respect of the Sale of. and the Owner Trustee's Title to. the Undivided Interest and the BVPS Site. Prothanotary. Beaver County. Pennsylvania: (i) Trust Agreement (not required on or prior to Closing Date): (ii) Bill of Sale: (iii) Assignment and Assumption Agreement; (iv) Additional Support Agreement; (v) Facility Lease; (vi) Cround Lease; (vii) Indenture; and (viii) Mortgage Release. Part II. UCC-1 Financing Statements and Other Filings. A. Prothanotary, Beaser County. Pennsylvania: (i) A Snancing statement on form UCC 1 naming OE. as lessee, the Owner Trustee. as lessor. and the Indenture Trustee, as assignee of the Owner Trustee, in respect of the Facility Lease: and (11) A financing statement on form UCC-1 naming the Owner Trustee as debtor. and the Indenture Trustee, as secured party, in respect of the Lease Indenture Estate. B. Secretary of State. Pennsylvania: (i) A financing statement on form UCC-1 naming OE, as lessee, the Owner Trustee, as lessor. and the Indenture Trustee, as assignee of the Owner Trustee. In respect of the Facility Lease: (ii) A financing statement on form UCC-1 naming the Owner Trustee. as debtor. and the Indenture Trustee, as secured party, in respect of the lease Indenture Estate: (iii) A certi6ed copy of the Facility Lease, as contemplated by Section of the Pennsylvania Consolidated Statutes Annotated, with respect to the recording of publie utility mortgages (not required on or prior to Closing Date); and (iv) Mortgage Release. C. County Recorder, Summit County, Ohio: (i) A Snancing statement on form UCC-1 naming OE, as lessee, the Owner Trustee. as lessor. { and the Indenture Trustee, as assignee of the Owner Trustee. in respect of the Facility Lease- 1 (ii) A Snancing statement on form UCC-1 naming the Owner Trustee, as debtor. and the i Indenture Trustee, as secured party, in respect of the Lease Indenture Estate. D. Secretary of State, Ohio: 1 (i) A 6nancing statement on form UCC-1 naming OE as lessee, the Owner Trustee, as lessor. and the Indenture Trustee, as assignee of the Owner Trustee, in respect of the Facility Lease:
)
(ii) A Gnancing statement on form UCC 1 naming the Owner Trustee, as debtor. and the ! Indenture Trustee, as secured party,in respect of the Lease Indenture Estate: i i E. Commonwealth of Massachusetts, state and locah l l A 6nancing statement on form UCC-1 naming the Owner Trustee. as debtor, and the i indenture Trustee, as secured party, in respect of the Lease Indenture Estate. {' I ALPilA CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 04,4.01.00.00 i i 1 1- \ _ _ _ _ _ . . _ - _ _ _ ,
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60WNE OF NEW YORK (212M245500 l 6. L. Schedule 5 Pricing Assumptions Basic Rent, Casualty Value, Special Casualty Value and Modified Special Casualty Value, as set forth in the Facility Lease as originally executed have been computed on the basis of the following pricing assumptions:
- 1. Investment Percentage: ~ %.
- 2. Debt Percentage; %.
3.~' interest Rate on Notes: % per annum.
- 4. Federal ACRS Deductions: 10-year public utility property deductions 'on the basis of 91.75% of Facility Cost.
- 5. Investment Tax Credit: 8.25% of Facility Cost.-
- 6. Owner Participant's Tax December 31,1987.
Year.End:
- 7. Closing Date: September 30.1967. -
- 8. Transaction Expenses: [1.10%l of Facility Cost paid on September 30.1987 by the Owner Participant in addition to its imestment (amor-tized on a straight.line basis during the Basic Lease Term).
-l 9. ~ Basic Rent Payment Date: June I and December 1 of each year (rent payable in arrears).-
- 10. First Basic Rent Payment . June 1,1988.
Date:
!. 11. Last Basic Rent Payment June 1,2017.
Date: l 12. Interim Rent Payment Date: December 1,1987.
- 13. Rent Structure: Semi Annual Arrears.
14, Owner Participant's Marginal 39.95068% in 1987; 34% thereafter. Federal Tax Rates:
- 15. Owner Participant's Marginal 0%.
State Tax Rate:
- 16. State and City Deductions: None.
17, First Estimated Tax Payment October 15.1987. Date:
- 18. Owner Participant's Short Commences March 19.1987.
First Tax Year:
- 19. Tax Accounting Method: Accrual.
- 20. Amortization of Notes: See Amortization Schedule in Nctes.
- 21. Undivided Interest % of Unit 2.
Percentage:
! 22. Facility Cost: 8 .
- 23. Purcha>e Price: 100% of Facility Cost.
- 24. Free Cash: Rent minus Deb Service (free cash) may be no more than i 1.5% of Facility Cost on each Date.
Basic Rent Payment ) ALPHA CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 064.02.00.00 1 I I-a __.__._____________U
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i.- i t -. . .. . Schedule 6 !
' BENEFICIARY BILt. OF SALE AND AsSICNSfENT, dated as of .
. . from
. [ BENEFICIARY -(the "BeneSciary"), to OHIO EDISON COMPANY, an Ohio corporation ("OE").-
WITNESSETH:
' WHEntw the BeneBelary desires to sell and OE desires to buy the Assigned Property' tas 1 hereinafter denned);
NOw, THEnErOne, in consideration of the premises and of other good and valuable consideration. receipt and sulRelency of which are hereby acknowledged, the parties hereto agree as followsi ARTICLE I der NmONs SECTION I.01. For purposes hereof, capitalized terms used herein shall h:ne the meanings assigned to such terms in the CertiScate of Limited Partnership and Limited Partnership Agreement of
.l dated as of l March 16), 1987. References in this Agreement to articles. sections and.
clauses are to articles. sections and clauses in this Agreement unless otherwise indicated. ARTICLE II ASSIGNMENT OF PARTNERSHIP INTEREST SECTION 2.01. ~ Assignment, The BeneBelary does hereby grant bargain, con $ey, sell, assign, transfer and set over to OE, without recourse, representation or warranty, express or implied, of any nature whatsoever (except as set forth in the next succeeding sentence), all of the Bene 6elary's right, title and interest in, to and under its Interest with respect to the undivided Interest in the Partnership except (1) the BeneSciary's right to receive its Interest with respect to the undisided Interest in Secured Obligations and Excepted Payments, each as deSned in the Participation Agreement (the
" Assigned Property"). The BeneSciary hereby represents and warrants to OE that the BeneGeiary has good and valid title to the Assigned Property free and clear of all Liens.
- SECTION - 2.02. - Acknowledgement. The BeneSciary hereby acknowledges receipt of 3 .. .
representing all amounts available to it under the Letter of Credit (as defined in - the Participation Agreement). ARTICLE III EFFECTIVENESS OF Ta4NsrER SECTION 3.01. Efecticeness of Transfer. The transfer of the Assigned Property shall become s effective without further action upon the execution and delivery by the Benenciary to OE of this BeneSciary Bill of Sale and Assignment. ARTICLE IV MiscELLA'NEOes SECTION 4.01. Successors and Assigns. This BeneSciary Bill of Sale and Assignment shall be binding upon the Bene 6einry and its successors and assigns and shall inure to the beneSt of OE and its successors and assigns. I ALPHA CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 0M03.00.00 1 1 I-( _ - __-_--__ --- - -- -
f 1
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_I i l SECTION 4.02. Coreming Law. This Bene 6ciary Bill of Sale and Assignment shall be goserned by and construed and enforced in accordance with the law of the State of New York. SccT1os 4.03. Headings. The division of this BeneSciary Bill of Sale and Assignment into sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Bene 6ciary Bill of Sale and Assignment. IN WITNtm WHrnrof. the undersigned has caused this BeneSciary Bill of Sale and Assignment to be duly executed as of the day and year written abose. [ BENEFICIARY l By
Title:
l ALPilA 2 CURRENT ENDING PAGE CONDITIONS ARE INCONSISTENT WITH THE NEXT PAGE : 065.00 00.00 _. l l _ _ _ _]
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~
I i 1 1 Appendix A DEFINITIONS
%' sms defined herein relate to the Participation Agreement (as defined below) and certain Transaction Documents executed. or to be executed. in connection with the Participation Agreement.
Suen 9rms include the plural as well as the singular. Any agreeme . defined or referred to below shall include each amendment, modification and supplement thereto and waiser thereof as may become effective from time to time. except where otherwise indicated. Any term defined below by reference to any agreement shall have such meaning whether or not such document is in effect. The terms
" hereof" "herein"," hereunder" and comparable terms refer to the entire agreement with respect to which such terms are used and not to any particular article, section or other subdivision thereof.
If, and to the ettent that. the Participation Agreement shall be amended from time to time pursuant to the terms thereof, this Appendix and the Appendix to each Transaction Document which incorporates this Appendix shall be, or be deemed to have been, ame. ded concurrently with the execution and delivery of each such amendment of the Participation Agreement in orderio conform the definitions herein and therein to the new or amended de6nitions set forth in or required by each such amendment to the Participation Agreement. Additional Bonds shall mean Bonds in addition to the initial series of Bonds. Additional Equity iniestment shall have the meaning speci6ert in Sectw 6(f) of the Facility Lease. AdditionalInsureds shall mean the Lessor and the Owner Participant. Additional Notes shall ha$e the meaning set forth in the recitations in the Indutv e a. w hich Additional Notes shall be issued. if at all, pursuant to Section 3.5 of the lederure AdditionalSupport Agreement shall mean the Additional Support Agreement. dated as of 1987. between the Owner Trustee and the Lessee. Adjusted Aggregate Liability shall mean the amount of Aggregate Liability for a single Nutlear Incident of all Persons Indemnified. as determined in accordance with the Price. Anderson Act. Adjusted Dase Amount shall have the meaning set forth in Section 10(b)(3)(siii)(E) of the , Participation Agreement. Adjusted Net Economic Return shall have the meaning set forth in Section 3(f)(iv) of the Facility Lease. Adjustment Factor shall mean the quotient obtained by dividing the number of Nuclear Facilities I having operating licenses by 110. Afliate, with respect to any Person, shall mean any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such Person. For purposes of this , definition, the term " control" (including the correlative meanings of the terms " controlled by" and "under common control with"), as used with respect to any Person. shall mean the possession. directiv or indirectly, of the power to direct or cause the direction of the management policies of such Person. whether through the ownership of voting securities or by contract or otherwise. After. Tax Basis shall mean, with respect to any payment receised or accrued or deemed to hase i been received or accrued by any Person, the amount of such payment supplemented by a further payment to that Person so that the sum of the two payments shall. after deduction of all taxes and other charges (without regard to Section 13(b)(2) of the Participation Agreement. but taking into account any credits or deductions arising therefrom and the timing thereof, computed at the highest marginal f ALPflA 1 l CURRENT ENDING PAGE CONDIT10NS ARE 0.K. THE NEXT PAGE : ORDO.00.00 - l 1
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ses 2 rm aae nou*ea.nu, sat rae 1200. vmt Ju - JOS: Y38958 PCN: 088.00.00.00 S/N: 5' omo Eersom Ca sowmE OF NEW voan (212m45 00 j L I
- 1. I statutory tax rate) resulting from the receipt (actual or constructive) or accrual of such two payments imposed under any Applicable Law or by any Governmental Authority, be equal to such payment 4 received or accrued or deemed to have been received or accrued.
Agent and Agency Period shall have 'he meanings specified in Section 7.01 of the Assignment and
. Assumption Agreement, .
Aggregate Liability shall ha e the meaning assigned in the Price-Anderson Act. as in effect as of the Closing Date: provided that if the Price-Anderson Act shall be amended to expand the meaning of 1 the term " aggregate liability", the term " Aggregate Liability" shall be similarly expanded. Applicable Lanc shall mean all applicable laws, statutes, treaties, rules, codes. ordinances, regula-tions, permits, certificates. orders, interpretations, licenses and permits of any Governmental Authority and judgments, decrees, injunctions writs, orders or like action of any court, arbitrator or other judicial or quasi judicial tribunal (including those pertaining to health, safety, the environment or otherwise). Appraisal Procedure shall mean a procedure whereby two independent appraisers. one chosen by the Lessee'and one by the Lessor, shall mutually agree upon the value, period amount or determina-tion then the subject of an appraisal. If either the Lessor or the Lessee, as the case may be, shall determine that a value, period, amount or determination to be determined under the Facility Lease or any other Transaction Document cannot timely be established by mutual agreement, such party shall appoint its appraiser and deliver a written notice t'.creof to the other party. Such other party shat! appoint its appraiser within 30 days after receipt from the other party of the foregoing written notice, if within 60 days after appointment of the two appraisers, as described above. the two appraisers are unable to agree upon the value. period, amount or determination in question, a third independent appraiser shall be chosen within ten days thereafter by the mutual consent of such Brst two appraisers or, if such 6rst two appraisers fail to agree upon the appointment of a third appraiser within such period, such appointment shall be made by the American Arbitration Association, or any organization successor thereto, from a panel of arbitrators having familiarity with nuclear electric generating plants and a familiarity with equipment used or operated in connection therewith. The decision of the third appraiser so apptinted and chosen shall be given within 60 days after the selection of such third appraiser. If three appraisers shall be so appointed and the determination of one appraiser is more disparate from the middle determination by more than twice the amount by which the third determination 7 is disparate from the middle determination, then the determir ation of such appraiser shall be excluded, the remaining two determinations shall be averaged and such average shall be binding and conclusive on the Lessor and the Lessee; otherwise the average of all three determinations shall be binding and conclusive on the Lessor and the Lessee The fees and expenses of appraisers incurred in connection with any Appraisal Procedure relating to any transaction contemplated by any provision of any Transaction Document shall be divided equally between the Lessor and the Lessee (except pursuant to Section 13 or 16 of the Facility Lease, which shall be paid solely by the Lessee). Appraiser shall mean Ebasco Business Consulting Company. Assigned foyments shall have the meaning speci6ed in Section 2.1 of the Indenture. Assignment and Assumption Agreement shall mean the Assignment. Assumption and Further l Agreement, dated as of ,1087, among the Owner Trustee and the [CAPCO Companies.l Assumption Agreemtat shall mean the Assumption Agreement substantially in the form of Exhibit B to the Indenture. Assumption Event shall mean and include a Deemed Loss Event or an Event of Loss in respect of which demand for payment has been made under Section 9(c) or 9(d) of the Facility Lease, as the case may be, or in response to which a Special Transfer has been effected. and each of the esents ALPHA A2 CURRENT ENDING PAGE CONDITIONS ARE O K. THE NEXT PAGE : 067.00.00.00 l i I
[ l.' M Boone inteyated typeutting system v1X/v%s Joe 1 P#ootoGR8PX/20C00Ea s2so;A44 6AGER.EAE)PAGEA.EXE, 3 sep-67 22.23 ( styk s2 SOJA 4f tsTYLES1 STYLE 003 8sT,19 Fide DIsitssCAATCH88X.tPR00 SCRATCH)f70000095 Fmt C: 100 t< see i a,n t.e .00asemnu, wt t e oo, vwst na JOS: Y38958. PCN: 087.00.00.00 $/N: 2 [ onto Eoiscrs co. sow:E or ww vonx (nimnassoo l giving rise to the exercise of the purchase options referred to in Secticns 13(f) 13(g) and 15(x) of the : Facility Lease and Section 10(b)(3)(ix) of the Participation Agreement in respect of which the Lessee shall have given notice ofits election to exercise any such option. Assumptions shall mean the Pricing Assumptions and the Tax Assumptions. Atomic Energy Act shall mean the Atomic Energy Act of 1954, as amended. and regulations from time to time issued. published or promulgated pursuant thereto. Authorized Oficer shall mean, with respect to the Indenture Trustee, any o$cer of the Indenture Trustee who shall be duly' authorized by appropriate corporate action to authenticate a Note and shall mean, with respect to the Owner Trustee, any omeer of the Owner Trustee who shall be duly authorized by appropriate corporate action to execute any Transaction Document. Automatic Special Transfer Event shall mean a Special Transfer Event referred to in clause (e) of the deGnition of Special Transfer Event. Banlcruptcy Code shall mean the Bankruptcy Reform Act of 1978, as amended. and any law with respect to bankruptcy, insolvency or reorganization successor thereto. Base File shall have the meaning set forth in Section 3(f)(i) of the Facility Lease. Base File Assumptions shall mean the base Ble assumptions set forth in Schedule 7 to the Participation Agreement ' Basic Lease Tenn silall mean the initial term of the Facility Lease, which shall begin on the Closing l Date and end on lMay 30,2016,1 unless earlier terminated as provided in the Facility Lease. Basic Rent shall have the meaning nt forth in Section 3(a) of the Facility Lease. Basic Rent Payment Dates shall mean and include June 1,19S8, and June I and December I of each year thereafter commencing June 1,1988. and ending June 1,2017, and, if a Renewal Term shall be permitted under the Lease and the Lessee shall elect the Renewal Term. each June I and December I of each year during such Renewal Term and the last day of such Renewal Term Benefeiaries shall man the Owner Participant, the Limited Partner and the Managing Partner acting on behalf of the General Partners. Benefelary Bill of Sale and Assignment shall mean a Beneficiary Bill of Sale and Assignment ! substantially in the form %s' Schedule 6 to the Participation Agreement. BillofSale shall mean the Bill of Sale, Instrument of Transfer and Severance Agreement, dated the Closing Date, between the Lessee and the Owner Trustee. Billof Sale and Assignment shall mean the Bill of Sale and Assignment substantially in the form of Schedule 3 to the Peticipation Agreement. Bonds shall mean all bonds, notes and other evidences ofindebtedness from time to time issued and outstanding under the Collateral Trust Indenture. Business Day shall mean any day other than a Saturday or Sunday or other day on which banks in Akron, Ohio. New York, New York, or Boston, Massachusetts. are authorized or obligated to be closed. BVPS shall mean the nuclear fueled electric generating plants located on the Ohio Riser in Shippingport, Pennsylvania, commonly known as the Beaver Valley Power Station. BVPS Site shall mean the site described in Exhibit to the Ground Lease. CAPCO shall mean the Central Area Power Coordination Group. a power pool which includes as participants the CAPCO Companies. ALPilA A3 _ CURRENT ENDING PAGE CONDITIONS ARE INCONSISTENT WITH THE NEXT PAGE : 068.00.00.00 - 1 I l
-_. _ _ - - -____ --_-_---__----- D
, M Bowne integrated 'spesetteg sistem v1.A/VWs Joe 1. PRODMGR9FX/20C00EJ3/ s2s0JAa4 FAGER.EXD7AGER.EXE. 3 sea sr 21.s?
sty 9 $250Jaa4 (STYLES) STYLE 003 8sT,19 F4 DisxtsCRITCM0PrdPR00 sCRATCM)TT0000089 Fet C. 100 seq 4 Free lese 1200" poets. Ne:1 tae 3000. Vast J1:1 JOS: Y38958 PCN: 068.00.00.00 SIN: 4 OH10 EDis0N CO. 80W8tE OF NEW YORK (212n2 *Ss00 6 I i 1 i i CAPCO Agreements shall mean the Construction Agreement and the Operating Agreement. j l CAPCO Companies shall mean The Cleveland Electric Illuminating Company, Duquesne Light j Company. Ohio Edison Company, Pennsylvania Power Company and The Toledo Edison Company. j 1 CAPCO Net Worth shall mean the sum (without duplication) of the consolidated common l stockholders' equity of the CAPCO Participants and their respective successors. as shown in their most , recent respectise audited financial statements; provided. howeser. that the consolidated common l stockholders' equity of any such Person shall not be included in the foregoing sum after (and onl> after) such time as such Person is not a CAPCO Participant. CAPCO Participant shall mean each " Participant" under the Operatirg Agreement having rights l co-extensive with the CAPCO Companies which at the time are " Participants" thereunder. J Capital improvement shall mean (a) the addition, betterment or enlargement of any property l' constituting part of Unit 2 or the replacement of any such property with other property. Irrespective of j whether (i) such replacement property constitutes an enlargement or betterment of the property 1 which it replaces (ii) the cost of such addition, betterment, enlargement or replacement is or may be { capitalized, or not charged to maintenance or repairs. in accordance with the Uniform System of j Accounts or (iii) such addition, betterment or enlargement is or is not included or reflected in the j plans and specifications for Unit 2, as built, and (b) any alteration, modification. addition or j impovement to Unit 2 other than original, substitute or replacement parts incorporated into Unit 2: i provided. however, that, where the context so requires, reference to a Capital Impros ement shall mean the Leswis Undivided Interest Percentage in such Capital Improvement. Casualty Value, as of any date during the Basic Lease Term shall mean the percentage of Facility Cost set forth opposite su-b date or s the Basic Rent Payment Date next succeeding such date) in Schedule 2 to the Facility Lease. Anything contained in the Participation Agretet or the Facility Lease to the contrary notwithstanding, Casualty Value shall te, when added to all other amounts which the Lessee is required 19 pay under Section 9(c) of the Facility Lease or under any other provision requiring the payment of Casualty Value (taking into account any assumption of the Notes by the Lessee), under rmy circumstances and in any event, in an amount at least sufficient to pay in full, as of the date of payment, the aggregate unpaid principal amount of all Notes Outstanding at the close of business on such date, together with accrued and unpaid interest on such Notes. Casualty Value as of any Basic Rent Payment Date during the Renewal Term shall mean the amount determined by amortizing ratably the present value of Basic Rent (discounted at the Discount Rate in effect at the time of such calculation) payable in respect of the Undivided Interest for the Renewal Term (retaining as a residual the anticipated Fair Market Sales Value of the Undivided Interest as of the last day of the Renewal Term) in semi-annual steps over the period from such date to the License Expiration Date. I Chief Financial Ofcer shall mean the person who is the chief financial officer of the Lessee. Claims shall mean liabilities, obligations, losses, damages penalties. claims (including. without limitation, claims involving liability in tort, strict or otherwise), actions. suits. Judgments. costs. interest. expenses and disbursements, whether or not any of the foregoing shall be founded or unfounded (including, without limitation, legal fees and expenses and costs of investigation) of any kind and nature whatsoever without any limitation as to amount. Closing shall mean the proceedings which occur on the Closing Date, as contemplated by the Participation Agreement. Closing Date shall mean September 30,1987. Code shall mean the Internal Revenue Code of 1986, as amended, or any comparable successor ! law. l l ALPflA I 4 i A4 - l l _ CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 069.00.00.00 .- - l l l l
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_I i Collateral Trust Indenture shall mean a Collateral Trust Indenture among the Lessee. Funding Corporation and the Collateral Trust Trustee. Collateral Trust Indenture Supplement shall mean a supplement to the Collateral Trust Indenture. Collateral Trust Trustee shall mean the bank or trust company acting as trustee under the Collateral Trust Indenture, and the successors or assigns of such trustee. j Common Facilities shall mean all facilities used in connection with the operation of Unit 2 a hich are or may be used in connection with the operation of Unit I at BVPS. exclusise of transmission facilities. Common Facilities Undivided Interest shall mean the Undivided Interest Percentage of Common l Facilities covered by the Ground Lease, dated as of September 15.1987. between the Lessee and the Owner Trustee. i Constnaction Agreement shall mean the Construction Agreement-Beaver Valley Power Station Unit No. 2, dated December 5.1975, between and among the CAPCO Companies, as amended. Debt shall mean (A) secured or unsecured indebtedness for borrowed money or for the deferred purchase price of property or evidenced by notes, bonds or other instruments. (B) obligations as lessee under capital leases. (C) the present value .of obligations as lessee under other leases the remaining term of which (including options to renew) is more than one year, in each case discounted to present value as of the respective dates on which such obligations are due at the rate per annum borne by the debt placed in conjunction with such lease or, if no such debt was placed, at the Lessee's marginal cost of debt at the time such lease was entered ir.to. (D) obligations secured by any Lien exining on an.s property owned or held by a Person, whether or not such Person has assumed or become liable for the obligations secured thereby. (E) obligations under letters of credit and bankers' acceptances, and i F) obligations under direct or indirect guarantees of (including obligations (contingent or otheruiset to assure a creditor against loss in respect of) indebtedness or obligations of others of the kinds referred to in clause (A), (B), (C), (D) or (E). For purposes of the foregoing. there shall be excluded obligations under any operating lease of computers, ofHee equipment and the like. the original term of which (including options to renew) is less than Eve years. Decommissioning shall have the meaning set forth in Section 10(b)(3)(siii)( A) of the Participa. tion Agreement. Decommissioning Beneficiaries shall have the meaning set forth in Section 10(b)(3)(siii)(B) of the Participation Agreement. Decommissioning Cost shall have the meaning set forth in Section IO(b)(3)(siii)(B) of the Participation Agreement. Decommissioning Expert shall have the meaning set forth in Section 10(b)(3)(siii)(D) of the Participation Agreement. Decommissioning Fund Pennitted Investments shall mean (i) direct obligations of the United States of America, or (ii) obligations fully guaranteed by the United States of America. or (iii) certificates of deposit by, or bankers' acceptances of, or time deposits with, any bank, trust company or national banking association incorporated or doing business under the laws of the United States of Amenea or one of the States thereof having a combined capital and surplus of at least $500.000.000 and the unsecured debt securities of which shall be rated at least Aa3 by Moody's or the equis alent thereof b> j Standard & Poor's (or, if neither such organi ation t shall rate such commercial paper at any time. b 3 ! any nationally recognized statistical rating organization in the Umted States of America) (includmg ! the Decommissioning Trustee if such conditions are met) or (iv) commercial paper of compames l [ incorporated or doing business under the laws of the United States of America or one of the States l 1 ALPHA A-5 l CURRENT ENDING PAGE CONDITIONS ARE OX THE NEXT PAGE: 070,00.00.00 l i I
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str$ s2s0x4HsTYLis}sTYLf00s.ssT,19 Far DisassCRArCH0PX-(P900 sCAATCHirT0000009 ' Fet: - C '100 ' se9: 6 nm =a nooasamu. =en ma 2200, v st n : JOS: Y38954 PCN: 070.00.00.00 8/N: 4 CHIO EDis0N CO. 00WNE OF Nfw You (212)924sS00 I i q i thereof and in each case having a rating assigned to such commercial paper by Standard & Poor's or Moody's (or, if neither such organization shall rate such commercial paper at any time, by any
-b nationally recognized statistical rating organization in the United States of America) equal to the highest rating assigned by such organization, or (v) repurchase ogreements fully collateralized by an obligation of the type described in clause (i) or (ii) above pursuant to which a bank, trust company or national banking association referred to in clause (iii) above or another Gnancial institution haiing a j net worth of at least $500,000.000 and the unsecured debt securities of w hich shall be rated at least Aa3 l by Moody's or the equivalent thereof by Standard & Poor's is. obligated to repurchase any such obligation not later than 90 days'after the purchase of any such obligation, or-(vi) such other investments as shall be proposed by the Lessee and consented to from time to time by the Owner Participant.
Decommissioning Proportionate Interest shall mean, as of the date of computation. the aggregate,
-l . percentage interest of the Lessee in Unit 2, whether owned, leased or otherwise controlled (directly or indirectly), excluding, however, by such interest o' ned w or leased by Pennsylvania Power Company.
Decommissioning Tnar Agreement shall mean a Decommissioning Trust Agreement. among the Owner Trustee, the Lessee and the Decommissioning Trustee. Decos,nmissioning Trent Fund shall have the meaning set forth in Section 10(b)(3)biii)(D) of the Participation Agreement. Decommissioning Trustee shall mean a bank or trust company selected by the Lessee and reasonably acceptable to the Owner Trustee, which is acting as decommissioning trustee under the Decommissioning Trust Agreement, and each successor decommissioning trustee under the Decom. missioning Trust Agreement. DECON shall mean the decommissioning alternative in which the equipment. structures and portions of a facility and site containing radioactive contaminants are removed or decontaminated to a level that permits the property to be released for unrestricted use shortly after cessation of operations. Dermed Loss Erent shall mean any of the following events (unless and until waised in writing by the Owner Participant): (1) Utility Regulation. If at any tirne from and including the Closing Date and before the Lease Termination Date, the Lessor, the Owner Participant or any Partner, by reason of the acquisition or ownership of the Undivided Interest or any part thereof by the Lessor (or any beneficial Interest therein by the Owner Participant or any Partnership interest in the Owner Participant by any Partner) or the lease of the Undivided Interest to the Lessee or any of the other transactions contemplated by the Transaction Documents (the " Transaction Role") shall be deemed by any Governmental Authority having jurisdiction to be, or shall become subject to regulation (other than Non Burdensome Regulation) as, an electric utility, a public utility or a holding company of an electrie utility or public utility under any Applicable Law or as a consequence of any Governmental Action, and the effect thereof on the Lessor, the Owner Participant or any Partner would be, in the sole judgment of the Owner PartRipant. acting on the advice of counsel, adverse, except that if the Lessee, at its sole cost and expense. is contesting diligently. and in good faith any Governmental Action which would otherwise constitute a Deemed Loss Event under this clause (1), such Deemed Loss Event shall be deemed not to has e occurred so long as in the sole judgment of the Owner Participant (1) such contest does not involve any danger of the foreclosure, sale, forfeiture or loss of, or the creation of any Lien on. the U'tjivided Interest, or any part thereof or any interest therein, (ii) such contest does not
, adversely affect the Undivided Interest or any part thereof or any other property, assets or rights of the Lessor, the Owner Participant or any Partner or the tien of the Indenture thereon. (iii) the Lessee shall have furnished the Owner Participant with an opinion of independent counsel ALPHA '
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- a. '
satisfactory to the Owner Participant to the effect that (a) there exists a reasonable basis for contesting such determination or (b) in the case of any action arising from or related to the ; Lessor, the Owner Participant or any Partner under the Holding Company Act. It is more likely than not that the Less" will successfully contest such determination without the need for any appeal. (iv) such det' mination shad be effectively stayed or withdrawn during such contest iand ) shall not in the sol' sdgment of the Owner Participant be subject to retroactive application at the conclusion of s' .:h contest) in a manner satisfactory to the Owner Participant. and the Owner Participant shall base determined in its sole judgment that such contest and the Lessor's i continued ownership of the Undivided Interest during the pendency of such contest will not adversely affect its business or the business of any of its Affiliates or any Partner, and (v) the Lessee shall have indemnified the Lessor, the Owner Participant and each Partner in a manner satisfactory to the Owner Participant for any liability or loss which any thereof may incur: it being understood, however, that the term Owner Participant as used in this clause (1) does not include any Transferee who at the time of transfer is an entity which is subject to regulation (other than Non-Burdensome Regulation) as an electric utility, public utility or a holding company of an electric utility or public etility under Applicable Law or Governmental Action. (2) Change in Applicable Latc. Any change in, or new interpretation by a Governmental Authority having jurisdiction relating to. Applicable Law, including, without limitation. the Price-Anderson Act, the Atomic Energy Act, the Nuclear Waste Act or the regulations of the NRC. in each case as in effect on the Closing Date, as a result of which, in the opinion of independent counsel to the Owner Participant: (i) the Aggregate Liability for a single Nuclear Incident of all Persons IndemniGed is increased: (ii) the Aggregate Liability foi a single Nuclear Incident of all Persons IndernniSed exceeds the amount of Financial Protection required under Applicable Law and wailatte at the time of such Nuclear incident: (iii)(a) the amount of Primary Fiweial Frotection required with respect to a single Nuclear Facility under ApplienMe la a increased. whether or not the total amount of Financial Protection require i wira respect to a single Nuclear Facility is increased, or (b) the amount of Financial Protection required under Applicable Law is
. increased (including, but not limited to, an incresse in the amount of retrospective premiums payable under the Retrospective Rating Plan) or (c) the amount of retrospective premiums payable under the Retrospective Rating Plan in an> one year with respect to two or more Nuclear incidents is increased: (iv) the provisions of the penultimate sentence of Section 170b. of the Atomic Energy Act,10 C.F.R. Section 140.22 or 10 C.FA Section 140.92 (as it relates to the guarantee by the NRC of defaults by licensees under the hetrospectise Rating Plan) shall be modi 6ed or changed in any material respect: (v) the Lessor or the Owner Participant or any Partner rnay become liable or responsible in any capacity (including, without limitation. through 1 assessments imposed by a Governmental Authority) for payments owed in respect of the Nuclear Waste Fund (as such term is used in Section 302 of the Nuclear Waste Act) or in respect of the handling or disposal of nuclear waste, decontamination, storage, transportation or safekeeping of radioactive or hazardous materials or any other obligation in the nature of the foregoing: (vi) the Lessor, the Owner Participant, any Partner or the Lessee may be prohibited from asserting any right, protection or defense available under Applicable Law as of the Closing Date with respect to civil or criminal actions brought in connection with a Nuclear Incident (including, without limitation, through an expansion of the waiver of defenses provision under subsection 170n. of the Atomic Energy Act); (vii) there shall be expressly created a new cause of action whereby any Person who pays or will pay retrospective premiums under the Retrospective Rating Plan or other assessments required under Applicable Law may recover the amount of such payments from the facility at which a Nuclear Incident occurs or from any Person associated with such facility; (viii) there shall be a third tier or additional level of potential or real liability (including assessments imposed by a Governmental Authonty) with respect to a Nuclear Facility: (ix) there shall be any type of claim, liability or expense (other than the costs of investigating and settling claims and ALPHA A-7 l
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-! i 1 !
j l defending suits for damage) excluded from the limitation of liability established by the Price- 1 Anderson Act (through modi 6 cation of the deGnitions of" aggregate liability" " persons indemni-
)
Ged", " nuclear incident", or otherwise) or excluded [(or the funding or payment thereof ! deferred)] under insurance or other Financial Protection required under Applicable Law as in effect on the Closinh Date, except to the extent and in the amcunt expressly excluded or deferred pursuant to Applicable Law as in effect on the Closing Date; or (x) the Lessor. the Owner Participant or any Partner may be exposed. during the Lease Term or after the Lease Termination l Date. to any other increased real or potential liability (including. without limitation. through assessments imposed by a Governmental Authority) with respect to a Nuclear Incident or - ; l otherwise relating to the operation of Unit 2 or the transactions contemplated by the Participation Agreement; provided, however, that no such change shall constitute a Deemed Loss Evert if and j for so long as such change or interpretation meets all the conditions constituting a Safe Harbor l Change or to the extent that such change constitutes a change in limited partnership law which i would constitute a Deemed Loss Event pursuant to this paragraph (2) and paragraph (8) of this ! deGnition, such change is otherwise excluded from the de6nition of Deemed Loss Event as a result l Of the operation of paragraph (8) of this deGnition. For purposes of this clause (2), the ' requirement or existence of insurance, retrospective premiums, indemnities (whether by the Lessee or any other Person) or other forms of Financial Protection (similar or dissimilar to the foregoing) shall not be deemed to eliminate or negate any exposure of the Lessor, the Ow ner Participant or any Partner to real or potential increased liability. (3) License. Any expiration, revocation, suspension amendment or interpretation by any Governmental Authority of the License or any other change in Applicable Law or Governmental
'f%n, as a result of which, prior to the Lease Termination Date, either the Lessor. the Owner Particent or any Partner is or might (i) be required to be or become a licensee under the Atomic Energy Act with respect to Unit 2 or (ii) be subject to the obligations or liabilities imposed. as of the Closing Dc ce thereafter, on licensees under the Atomic Energy Act with respect to Unit 2 or (iii) be otherwise subject to signiGeant regulation relating to nuclear, er,rrgy, environmental or safety matters by ream of its Transaction Role (as de6ned in paragraph (1) of this de6nition).
(4) Multiple Incidents. The occurrence after the Closing Date (i) of two or more incidents (including incidents occurrink outside the United States of America),in each case at any Nuclear I Facility or Facilities either (A) i ing a three loop Westinghouse pressurized water reactor nuclear steam supply system or (B) uung any other reactor system having one or more components
! similar in function and purpose to those included in Unit 2, the failure of which system (in the case of clause (A) above) or component (in the case of clause (B) above) results in (x) a discharge or dispersal of radioactive material off4ite when, as a result of an esent comprised of one or more related happenings, radioactive material is released from its intended place of conGnement. in amounts off-site, or causing radiation levels off-site, which result in off-site surface radiation lesels measured over a contiguous or non-contiguous area of at least a total of 100 square meters of (A) alpha particles from transuranic isotopes in excess of 3.5 reierocuries per square meter, (B) alpha particles from all other isotopes in excess of 3.5 microcuries per square meter or (C) either beta or gamma particles in excess of 4 millirads per hour as measured at a height of one centimeter (measured through not more than 7 milligrams per square centimeter of total absorber); provided. however, that (I) if the level of radiation constituting an Extraordinary Nuclear Occurrence is reduced by the NRC from those set forth herein. then the levels set forth herein shall be reduced equivalently (provided, however, that if such level is subsequently l increased then the levels set forth herein ass changed shall be increased but no higher than the levels set forth herein on the date hereof) or (II) if alternative criteria for determining an Extraordinary Nuclear Occurrence are adopted by the NRC, then the enteria set forth herein shall be modi 6ed to be consistent with the criteria established by the NRC: (y) ( A) the radiation lesel in the containment as measured by the aserage of two high range radiation monitors in the top ALPilA A8 CURRENT ENDING PAGE CONDITIONS ARE INCONSISTENT WITH THE NEXT PAGE : 073.00.00.00 1 I
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.4 half of such containment (or if only one such monitor is operating at such time, such monitor)
. averaged over one hour equaling or exceeding . rad per hour; or (B) any measure of.
radioactivity in the primary coolant system exceeding by times the limiting conditions for operation speciGed in the technical speci6 cations for Unit 2 (as in eEect on the Closing Date): or (z) damage to of-site property, including, without limitation, costs for decontamination, in l amounts in excess of ' in 1987 dollars (escalated in accordance with changes in the
- Consumer Price Index issued from time to time by the U.S. Department of Labor. Bureau of Labor l Statistics. for the region which includes the BVPS Site): or (ii) within a Sve9 ear period of three or more incidents, of the type and severity described in subclause (i)(x), (y) or (z) aboie, at any Nuclear Facility or Facilities (excluding incidents occurring outside the United States of
. America).
(5) filegality; Exercise of Rights and Remedies. Any change in Applicable Law or any Governmental Action the efect of which is or might be (i) to make any of the transactions contemplated by the Transaction Documents unauthorized, illegal or otherwise contrary to Applicable Law, (ii) to impede the exercise by the Lessor or the Owner Participant of any right or remedy under any Transaction Document relating to the assertion of claims for Rent or monetary damages. (iii) to cause the Lessor or the Owner Participant to be or become liable in any capacity in respect of Decommissioning, or (iv) to constitute an assertion to the efect that (a) the exercise by the Lessor or the Owner Participant of any'right (irrespective of the event giving rise to such right) under any Transaction Document would constitute impermissible control over Unit 2 or the licensees of Unit 2, other than an assertion consistent with the second sentence of Section 154 of the Atomic Energy Act and the NRC's regulations thereunder, including, without limitation. l0 C.F.R. Section 50.81, as now in efect, or (b) the acquisition or transfer of the Undivided Interest was in violation of, or otherwise contrary to, Applicable Law. (6) Violations. With respect to the BVPS, the NRC shall have issed within a two9 ear .i period (x) two or more Gnal orders involving " Severity Level I" violations or (y) three or more i Snal orders involving " Severity Level I" or " Severity Level lt" violations, as such terms are used in l Supp#ement I to Appendix C to 10 C.F.R., Part 2, as in efect on the Closing Date (or, if such t Supplement is amended or supeneded or diferent catego ies are in efect, comparable violations). (7) Reduced Operations. From and after the time Unit 2 has Srst achieved electric output of at least 95% of estimated rated capacity during a test period of 100 consecutive hours. Unit 2 shall have operated in three consecutive calendar years at an Eqdvaient Availability Factor as denned q in ANSI /IEEF sandasd 762 belw % other than as a result of outage to provide capital improvements at Unit 2 not in the nature of repairing, replacing or maintaining failed or damaged equipment or outage due to NRC requirements applied generally, but not necessarily solely. to pressurized water reactor nuclear steam supply systems of similar design and not resulting from safety or other de6cie.nch speci6c to Unit 2: provided. however, that if the NRC shall determine I at any time during the Lease Term that the operation of this paragraph might impair the ability of 1 the Lessee or the Operating Agent to comply with the terms of the License or Applicable Law or i it terfere with the exercise of the NRC's jurisdiction to protect the public health and safety, then ! this paragraph shall be deemed waived. j { (8) Limited Partnership Law. Any change in, or new judicial decision or other interpreta- 4 l tion of. Applicable Law in any state or province within a radius of 500 miles from the BVPS Site (in connection with which, in the opinion of independent counsel of nationally recognized , standing selected by the Owner Participant or the Limited Partner, there exists a reasonable basis I for the highest judicial court in the jurisdiction involved to Gnd such change, new decision or interpretation to be co Tect and in accordance with law) as a result of which (in the opinion of , such independent counsel) the Limited Partner may be exposed during the Lease Term or after { the Lease Termination Date, to any increase in liability, real or potential. for any obligation or f ] l ALPHA 1 j A9 I
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. , , L ONIO EDISON CO. - 00Wht 0F NEW YORK (21219213500 J' I ' ..
.J liabilities of the Owner Participant (including, without limitation, in respect of a Nuclear -
Incident) even if the Limited Partner does 'not take part in the control of the business of the l Owner Participant to any greater extent than is permitted of a Limited Partner (in the opinion of
- l. such counsel) under the laws of such state or province on the date hereofin order for the Limited .
' Partner to have the status and limited liability of a limited partner under such laws on such date.
unless (a) an amendment to the Limited Partnership Agreement limiting the participation of the Limited Partner in the affairs of the ' Owner Participant to the role contemplated by the' Limited Partnership Agreement on the date hereof would (in the opinion of such counsel) eliminate any such exposure, or (b) upon the effective date of such change or new decision or interpretation. and at all times thereafter, the Lessor, the Owner Participant, the General Partners and the: Limited Partner (1) shall be exempt from all real and potential liability in respect of a Nuclear: Incident (" Nuclear Liability") both during and after the Lease Term (unless the Lessor. the Owner Participant, the General Partners or the Limited Partner, as the case may be. is as of the time of a Nuclear Incident in actual possession and control of Unit 2) and (ii) shall have receised an opinion ofits independent counsel to the effect provided in (clause A(1)(y) of the de6nition
. of" Safe Harbor Change" hereinafter set forth in this Appendix Al or (b) the Limited Partnership
- Agreement shall have been amended to add the Limited Partner as a General Partner or to include an explicit assumption of liability by the Limited Partner for such obligation or liabilities or -
otherwise to hold out the Limited Partner as liable for such obligation 'or liabilities. It is understood and intended that the Linilted Partner shall not be deemed to be exposed to any increase in liability, real or potential. for any obligation or liability of the Owner Parcitipant to the ettent that such exposure relates to the risk of loss of all or a portion ofits insestment in the Owner Participant. . 1 (9) Earthquake. Ar, carthqaake of measured Richter magnitude of or greater with its epicenter located within a ten mile ralius of Un.it 2. (10) Unit f Incidents. (1) The occurrence of an event at Unit I as a result of which: (a) the radiation levelin the top half of the containment es measured by the average of two hign range radiation monitors in the top half of such containment (or if only one such monitor is operating at such time, such monitor) of Unit I exceeds rad per hour; or (y) any measure of radioactiuty in the primary coolant system of Unit I shall exceed by times the limiting conditions for operation speci6ed in the technical specifications for Unit 1 (as in effect c>n the date of such event); or (z) assessment of core damage according to indicates percent clad failure or percent fuel melt, or (2) the occurrence of a Nuclear Incident at Unit I as a result of which Unit I ceases to operate (or if Unit 1 is not in operation immediately prior to such Nuclear Incident, the failure to resume operation as a result of such Nuclear Incident) for a Period of 36 consecutive months; or (3) except as a result of controlled mos ement l of spent fuel into or within the spent fuel storage facility for Unit 1, the radiation lesel in the fuel building above such storage facility, as measured by a valid radiation measuring instrument l located in such building shall be more than times the average of the previous fhe readings of such measuring instrument over a period of not less than 24 hours. (11) Suspension or Termination ofincurance. If any policy ofliability insurance with respect l to Unit 2 shall be suspended or terminated, or the coverage thereunder reduced. for any reason whatsoever or shall be amended or supplemented, in either case in a manner which may expose the Owner Trustee, or the Owner Participant or any Partner, either during or subsequent to the Lease Term, to any increased real or potential liability in respect of a Nuclear Incident and such policy of insurance shall not be immediately replaced by insurance or other financial proaction satisfactory to the Owner Participant effective immediately upon such suspension. termination. reduction amendment or supplementation which, in the reasonable opinion of the Owner Participant,is at least as protective ofit and each such other Person (in all respects deemed by it ALPHA A-10 i
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l i
- M Sonne tritegrated fysenettmg system v* A/ VMs Joe 1 PR00MGRBPX/ 20C00Es2/s2so Aed tPAMIEXD?iMR EXE. J Sep 87 2249 styv $2s0JAMisTYLEDsTYLE003 0sTM Fe OlsKssCAATCH8PX.< PROD sCA.*.TCH)TT0000101 Fmt: C- 100 see i Free ta 60cuimmtt Nut wa oo. vn,n su JOB: Y38958 PCN: 075.00.00.00 SIN: 5 OH10 EDis0N CD $0whE OF NEW YORM (212)92*.5500 J l to be material) as the policy of insurance so terminated, suspended. reduced. amended or supplemented, unless the aggregate liability for a Nuclear Incident of " persons indemni6ed" (as such term is de6ned in the Atomic Energy Act of 1954, as amended) is reduced by an amount equal to the amount of liability insurance so terminated, suspended. reduced. amended or supplemented and. in the reasonable opinion of the Owner Participant, neither it nor any such other Person may otherwise be exposed. either during or subsequent to the Lease Term. to any increased real or potential liability in respect of a Nuclear incident as a consequence of such suspension, termination, reduction. amendment or supplementation.
Default shall mean an event or condition which, with the giving of notice or lapse of time. or both. would constitute an Event of Default. 3 I Directice shall mean an instrument in writing executed in accordance with the terms and provisions of the Indenture by the Holders, or their duly authorized agents or attorneys-in-fact, representing a Majority in Interest of Holders of Notes, directing the Indenture Trustee to take or refrain from taking the action speci6ed in such instrument or otherwise advising the Indenture Trustee; provided, however, that each Holder of Notes then outstanding, or its duly authorized agent or attorney-in-fact, shall be entitled to direct the Indenture Trustee as herein prosided only with respect to the aggregate unpaid principal amount of Notes (or portion thereof) issued and Outstanding . which are registered in the name of such Holder and which are certi6ed by such Holder or its duly 5 authorized agent or attorneyon-fact to be (i) held by it for its own account and not pledged as collateral for any ofits obligations or (ii) pledged as collateral for one or more of its obligations. or obligations with respect to which it is nating as trustee under a related indenture, but in respect of w hich it has received a directive, satisfactory in form and substance to the Indenture Trustee gisen by the holder or holders of a proportionate interest in the obligations secured by such Notes m accordance with the instrument governing such obligations. More than one direction can be gisen by a registered Holder of Notes or its duly authorized agent or attorney-m fact pursuant to clause (ii) of the preceding sentence, and such directions may be contradictory or meonsistent, so long as each direction to take or refrain from taking the action speci6ed therein or otherwise advising the indenture Trustee meets the requirements of said clause (ii). Discount Rate shall mean % on a semiannual basis ( % per annum on a bond equivalent basis). Discretionary Special Transfer Ecent shall mean a Special Transfer Es ent referred to m elause (b L (c) or (d) of the de6nition of Special Transfer Event. Early Termination Commitment Date shall have the meaning g sci 6ed in Section 14(c) of the Facility Lease. Early Termination Date shall have the meaning speciSed in Section 14(c) of the Facility Lease. Early Termination Notice shat! have the meaning speciSed in Section 14(c) of the Facility Lease. Eligible Bank shall mean a commercial bank, trust company in the nature of a bank or United States branch or agency of a foreign bank (as used herein, a " Letter ofCredit BanA") not related to any Bene 6ciary or the Lessee at the time ofissuance of any Letter of Credit which shall be (i) in the case l of the initial Letter of Credit. [ l (ii) any Letter of Credit Bank whose long term unsecured debt securities are rated Aaa by Moody's. unless there are (A) legal or regulatory constraints on the issuance to or holding by any Benc6ciary of a letter of credit from such Letter of Credit Bank. or (B) policy constraints in effect for any BeneSciary on the issuance to or holding by such Bene 6ciary of a Letter of Credit of such Letter of Credit Bank (it bemg understood that no such policy constraints may be applied by such BeneSciary to preclude the eligibility of such Letter of Credit Bank as an Eligible Bank unless such policy constramts are then ALPilA A-Il l l 1 _. CURRENT ENDING PAGE CONDITIONS ARE INC0t!! STENT WITH THE NEXT PAGE : 076.00.00.00 - I l 1
I f , ense e a. intw oo Tm wwas 5:nm m uvus Je i moouGaspx/ zococca snom treGEuxEWGEMxt. 3 5ep-67 n5? l styte $2sDJA44 (sTYLEsisTYLEo0J 8sT.29 Fde: OtsassCRATCHBPxdP90D sCR.;TCHirfo000089 Fmt C 100 see 12 Fm us oo own Nat ne troo. van JOB: Y38958 PCN: 076.00.00.00 SIN: 4 OHIO EDis0N CO BOWN! 0F NEW Y0h (222)9289500 I i applicable generally to extensions of credit by such Beneficiary or any AEliate thereof to such Letter of Credit Bank and have been applied by such BeneBeiary to the determination of such eligibility l without regard to the nature of BVPS or the transactions contemplated hereby or the identity or credit of the Lessee), or (iii) any Letter of Credit Bank whose long term unsecured debt securities are rated not less than Aa3 by Moody's, other than a Letter of Credit Bank to which any BeneSciary shall not consent (such consent not to be unreasonably withheld,it being understood that one of the bases for withholding such consent may be, in the case of a Letter of Credit Bank which is part of a holding company structure, the failure of such Letter of Credit Bank's parent holding company to has e a rating not less than Aa3 by Moody's in respect of its long term unsecured debt securities). provided. however, that any Letter of Credit issued by a Letter of Credit Bank that is not incorporated in the United States shall provide that all payments shall be in United States dollars and shall be made in New York, New York, or, as to any BeneSciary, such other city in the United States as such BeneSciary shall reasonably request. For purposes hereof, a Letter of Credit Bank which has long term unsecured debt securities rated at least Aa3 by Moody's and which has been proposed as an Eligible Bank by the Lessee in writing to each Bene 6ciary no earlier than one year prior to the stated expiration date of an existing Letter of Credit (the " Existing letter of Credit") and no later than 60 days prior to such date shall be deemed to be an Eligible Bank unless, within 21 days of receipt by the Bene 6ciaries of such proposal, any Bene 6ciary, by certi6 cation of one ofits Responsible OEcers. (1). in the case of a Letter of Credit Bank which has long term unsecured debt securities rated Aaa by Moody's. has identiSed such Letter of Credit Bank as one in respect of which constraints of the type referred to in clause ( A) or (B) above exist and has designated which of such clauses is applicable or (2). in the case of a Letter of Credit Bank which has long-term unsecured debt securities rated less than Aaa but not less than Aa3. by Moody's objects to such Letter of Credit Bank. Once a Letter of Credit Bank has qua!iGed as an Eligible Bank with respect to a renewal or replacement letter of credit, it shall remain an Eligble Bank for such purpose from the date of its qualiBeation through the stated expiration date of the Existing Letter of Credit (such period, the " Eligible Period"): orocided, howeter, that such Letter of Credit Bank shall cease to be an Eligible Bank 120 days following a notice from any BeneSciary to the Lessee of a reduction in the rating of such Bank's debt securities during the Eligible Penod. Equity Portion of Rent shall mean (i) in the case of any payment of Basic Rent. the amount of Basic Rent payable under the Facility Lease reduced by the principal and interest then doe and payable on the Notes, (ii) in the case of any payment of Casualty Value or Special Ca.uahy Value. the amount thereof reduced by the principal amount of and accrued interest on the Outstanding Notes or (iii) in the case of any payment of Supplemental Rent the amount thereof payable to the Owner Participant or any Partner. ERISA shall mean the Employee Retirement income Security Act of 19N. as amended. Estimated Transaction Expenses shall have the meaning set forth in Section 5(a) of the Participa-tion Agreement. Event of Default shall have the meaning set forth in Section 15 of the Facility Lease. Ecent ofloss shall mean any of the following events: (a) a Final Shutdown. (b) a Requisition of Title or (c) a Requisition of Use. Excepted Payments shall mean (i) all indemnity payments (including, without limitation. payments under any Tax Indemni6 cation Agreement) to which the Owner Trustee, the Owner Participant or any Partner, or any of their respective AEliates (or the respective successors, assigns, agents. o$cers. d' rectors or employees of the Owner Trustee, the Owner Participant or any Partner). is entitled. (ii) ai y announts payable under any Transaction Document to reimburse the Lessoi. the Ownee Participant or any Partner , or any of their respective AEliates (including the reasonable expenses of the Lessor. the Owner Participant or any Partner incurred in connection with any such payment). for performing or complying with any t f the obligations of the Lessee under and as permitted by any Transaction ALPilA A 12 CURRENT ENDING PAGE CONDITIONS ARE O K. THE NEXT PAGE ; 077.00.00.00 l l l-m
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'+ _f . 4 Document. (iii) any amount payable to the Owner Participant by any Transferee as the purchase price of the Owner Participant's interest in the Trust Estate, (iv) any insurance proceeds or other payments received from any Governmental Authority or other Person (except the Lessee) with respect to an
- Event of Loss in excess of amounts then due and owing to reimburse the Indenture Trustee for any.
Trustee's Expenses and to pay the reasonable remuneration of the Indenture Trustee plus amounts then due and owing in respect of the principal of and premium. if any. and interest on all Notes Outstanding. (vy any insurance proceeds (or payments with respect to risks self. insured) under liability policies. (vi) all payments of Secured Obligations by the Lessee, bti) if the Letter of Credit has been terminated or has expired, the portion, if any of casualty value or Special Casualty Value as of any date (before taking into account the effect of Section 3(g) of the Facility Lease) equal to the amount liy which Modi 6ed Special Casualty Value as of such date exceeds the sum of all amounts . drawn mder the Letter of Credit and not reinstated and (viii) any payments in respect ofinterest to the exte.nt attributable to payments referred to in clauses (i) through (vii) above. Excepted Rights shall mean all rights with respect to Excepted Payments of the Person entitled thereto and all rights and interests with respect to the Letter of Credit and any amounts paid or payable under the Letter of Credit. Excess Amount shall have the meaning set forth in Section 20(f) of the Participation Agreement.- Existing letter ofCredit shall mean any Letter of Credit which, at the time of determination. is in full force and effect. Existing Mortgage shall mean the Indenture of Mortgage and Deed of Trust dated as of August 1,1930, between the Lessee and Bankers Trust Company, as Trustee. Expenses shall mean liabilities obligations, losses. damages, taxes (other than taxes on vt income), clahrt actions, suits. costo interest. expenses and disbursements (inkl!$ Iqal fees and expenses) of any kind and nature whatsoever. Extraordinary Nuclear Oca.mnce shall have the meaning assigned in Section 11 of the Atomic l Energy Act and the related NRC regulations (10 C.F.R. ll140.84 and 140.65) as in effect as of the Closing Date. Facility Cost shall mean the Purchase Price plus the sum of (x) all Supplemental Financing Amounts and (y) all Additional Equity Investment amounts. Facility Lease shall mean the Facility Lease, dated as of ,1987, between the Lessee and the Owner Trustee. Fair Market Rental Value or Fair Market Sales Value of any property or service shall mean the value, which shall not in any event be less than zero, of such property or service for lease or sale determined on the basis of an arm's. length transaction for cash between an informed and willing lessee or buyer or purchaser (under no compulsion to lease or purchase) and an informed and willing lessor or seller (under no compulsion to lease or sell), and shall take into account the Lessor's rights and obligations under the Assignment and Assumption Agreement. the Additional Support Agreement and the Ground Lease and rights under the Bill of Sale, but shall be without regard to any rights of the Lessee (including the Renewal Option) under the Lease, provided that the determination of Fair Market Rental Value and Fair Market Sales Value of the Undivided Interest shall take into account the existence of the Decommissioning Trust Fund and the rights afforded by Section 10(b)(3) bili) of the Participation Agreement to the parties identiSed therein. Except pursuant to Section 16 of the Facility Lease, Fair Market Rental Value and Fair Market Sales Value of the Undivided Interest shall be
! determined on the assumption that (i) Unit 2 has been maintained in accordance with, and the Lessee has complied with, the requirements of the Facility Lease and the other Transaction Documents. (ii) the Lessee is otherwise in compliance with the requirements of all Transaction Documents. (iii) an ALPHA A.13 3
Cl*RRENT EN0!NG PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 078.00.00.00 1 1
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_I 4 owner of the Undivided Interest will have all of the rights and obligations of a CAPCO Participant imd [tv) in the case of a proposed purchase by the Lessee pursuant to Section 13(g) of the Facility Lease, the Fair Market Sales Value of the Undivided Interest equals the Fair Market Sales Value after the contemplated Capital Improvements are made.minus the Undivided Interest Percentage of the estimated cost'of making such Capital Improvements. Fair Market Rental Value shall be determined on the assumption that basic rent will be payable in equal semi-annual installments in arrears. Federal Power Act she!! mean the Federal Power Act. as amendedJ FederalSecurities shall hase the meaning set forth in Section 2.4(c) of the Indenture. FERC shall mean the Federal Energy Regulatory Commission of the United States of America or any successor agency. Final Shutdown shall mean the occurrence of any of the following: (1) the expiration or revocation of the License or that portion of the License that permits the l operation of Unit 2 or the expiration, suspension or revocation of the License or that portion of the License that permits the possession by the Lessee of the Undivided Interest: (2)(x)(A) the suspension of. the License or that portion of the License which permits
! operation of Unit 2 which suspension remains in effect for three consecutive calendar months: or (B) any order of or direction (or series of orders or directions) by the NRC 'or any other Governmental Authority that Unit 2 suspend operations for reasons of radiological health and safety for a Period exceeding 24 months: or (y) any cessation of operation of Unit 2 for a Period of 24 months if the resumption of operations requires the concurrence of the NRC or any other Governmental Authority; (3) the occurrence of a Nuclear Incident at Unit I or Unit 2. as a result of which Unit 2 ceases to operate (or if Unit 2 is not in operation immediately prior to such Nuclear lacident. the failure to resume operation as a result of such Nuclear Incident) for a Period of IS consecutive months (4) the occurrence of an event at Unit 2 as a result of which (x) the radiation lesel in the top half of the containment as measured by the average of two high range radiation monitors in the top half of such containment (or if only one such monitor is operating at such time. such monitor) exceeds rad per hour, or (y) any measure of radioactivity in the primary coolant system which exceeds by times the limiting conditions fcr operation speciBed in the technical speci6 cations for Unit 2 (as in effect on the Closing Date); or (z) assessment of core damage according to which indicates percent clad failure or percent fuel melt:
(5) the occurrence at Unit 2 of a discharge or dispersal of radioactive material off-site when. as a result of an event comprised of one or more related happenings. radioactive material is released from its intended place of con 6nement, in amountt off-site. or causing radiation les els off-site. which: (s) the NRC declares to be an Extraordinary Nuclear Occurrence: (y) result in off-site surface radiation levels measured over a contiguous or non-contiguous area of at least a total of l 100 square meters of ( A) alpha particles from transuranic isotopes in excess of.35 microcuries per square meter, (B) alpha particles from all other Isotopes in excess of 3.5 microcuries per square meter or (C) either beta or gamma particles in excess of 4 millirads per hour as measured at a height'of one centimeter (measured through not more than 7 milligrams per square centimeter of total absorber); provided, however, that (I) if the level of radiation constituting an Extraordinary l Nuclear Occurrence is reduced by the NRC from those set forth herein. then the lesels set forth ' herein shall be reduced equivalently or (II) if alternative criteria for determining an Extraordi-nary Nuclear Occurrence are adopted by the NRC, then the criteria set forth herein shall be modi 6ed to be consistent with the criteria established by the NRC: or (z) result in on site surface ALPHA A 14 i CURRENT ENDING PAGE 00NDIT10NS ARE INCONSISTENT WITH THE NEXT PAGE079.00.00.00 : I l I w__ - _ _ _ _ _ __- _ _ l
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radiation levels (measured at a distance of not less than one-half mile from the outside of any
-l building at the BVPS Site and over a contiguous or non-contiguous area of at least a total of 100 square rneters) which are in excess of 20 times the measurement level set forth in or established pursuant to clause (y) for any particle:
(6) the occurrence at Unit 2 of a discharge or dispersal of radioactive material'when. as a result of an esent comprised of one or more related happenings. radioacthe material is released from its intended place of conGnemeut in amounts off site resulting in an aggregate cost ul l- decontarnination estimated to be in excess of 8 in 1957 dollars (escalated in accordance with changes in the Consumer Price Index issued from time to time bv the U.S. Department of-I Labor, Bureau of Labor Statistics, for the region which includes the BVPS Site): (7) the declaration by the Operating Agent of a site area emergency for any reason other than a drill, false alarm or a precautionary emergency declared without actual major failure of plant functions needed for protection of the public:
'(8) except as a result of controlled movement of spent fuel into or within the spent fuel l storage facility for Unit 2, the radiation levelin the fuel building above such storage facility as measured by a valid radiation measuring instrument located in such building. shall be more than l l1.000l times the aserage of the previous Eve readings of such measuring instrument os er a period of not less than 24 hours:
(9) damage to Unit 2 and the failure of the Lessee, or of the Lessee and one or more other CAPCO Companies, to complete restoration or reconstruction of Unit 2 within three s ears of such damage, or in the case of damage occurring less than three years prior to the date of expiration of the Lease Term, on or before the expiration of the Lease Term: (10) damage to Unit 2 and the failure by the Lcssee within 18 months to agree te participate in the reconstruction of Unit 2: (11) the cessation of operation of Unit 2 as a result of damage to Unit 2 for a Period whicli
.will exceed three years or end after the expiration of the Lease Term (including any then elected Renewal Term) (it beinh understood that the cessation of operation shall be a:tributable to damage to Unit 2 if such cessation shall occur within 10 days of such dar. .;): and (12) the destruction of Unit 2.
For purposes of th6s deSnition, a Final Shutdown shall be deemed to have occurred (A) pursuant to clause (4) or (5) above immediately upon the occurrence of any of the following: (i) [the water les el within the reactor vessel shall declia.e to a level which is of the top of the actise fuel. (ii) the water level within the spent fuel storage facility shall decline to a level which is three feet abose the top of any fuel which has been in the reactor core within the prior 12 months or (iii) the departure l from nucleate boiling ratio shall be less than . and (B) pursuant to clause (8) abose immediately upon the water level within the spent fuel storage facility declining to a level which is three feet abos e l the top of any fuel which has been in the reactor core within the prior 12 months.) Financial Protection shall have the encaning assigned in the Price-Anderson Act. as in effect as of the Closing Date; provided that if the Price-Anderson Act shall be amended to expand the meaning of the term "Snancial protection", the term " Financial Protection" shall be similarly expanded. Financing Documenta shall mean the Collateral Trust Indenture and the Underwriting Agreement. First Boston shall mean The First Boston Corporation. FNB shall mean The First National Bank of Boston in its individual capacity, and its successors and assigns. ALPHA A 15 l l _ CURRENT ENDING PAGE CONDITIONS ARE 01 THE NEXT PAGE : 080.00.00.00 - l I 1 L __ _ _ _ _ _ _____a
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. Fixed flate Notes shall mean any non-recourse promissory notes which are issued by the Owner
' Trustee and authenticated by the Indenture Trustee on any Refunding Date to refund an Outstanding L
- Series of Notes, in whole or in part.
. Form U.TD shall mean the certi6cate to be Bled pursuant to Rule 7(d) of the [Iolding Company Famding Corporation shall mean BVPS Funding Corporation. a Delaware corporation.
General Partners shall mean the Managing Partner and PARock Limited Partnership. Centrating Unit shall mean Unit 2 or any of the other generating units constit'uting BVPS. Coldman Sache shall mean Goldman, Sachs & Co. Cocemmental Action shall mean all authorizations, consents, approvals. waivers. exceptions. variances, orders, licenses, exem;,tions, publications. Slings, notices to and declarations of or with any Governmental Authority (other than routine reporting requirements the failure to comply with which
- will not affect the validity or enforceability of any of the Transaction Documents or have a material adverse effect on the transactions contemplated by any Transaction Document or any Financing Document or any other action in respect of any Cosernmental Authority) and shall include, without -
limitation, all siting. environmental and operating permits and licenses which are required for the use l and operation of Unit 2. includine the Undivided Interest and the Common Facilities. Governmental Arethority shall mean any Federal, state, county, municipal. foreign. international.
. regional or other governmental authority, agency, board, body, instrumentality or court. '{
Cmnting Clause Documente shall have the meaning speci6ed in Section 2.l(2) of the Indenture. Cround lease shall mean, collectively, the Ground Lease dated es of ,1987 between the i Lessee and the Owner Trustee and the Easement dated as of ,1987 from the Lessee to the Owner Trustee. Holders shall mean the holders of the Notet Holding Company Act shall mean the Public Utility Holding Company Act of 1931 as amended. Income / Capital Taxes shall have the meaning set forth in Section 13(b)(2)(ii) of the Participation Agreement. l Indemnities shall mean the Owner Participant, each Partner, the Owner Trustee. FNB. the Loan Participants. the Funding Corporation, the stockholder of Funding Corporation and its officers and l directors. [IT), the Indenture Trustee, each Holder of a Note from time to time Outstanding. the Collateral Trust Trustee, the Trust, the Trust Estate, the Lease Indenture Estate, the indenture estate l under the Collateral Trust Indenture, any Alliliate of, or partner in any of the foregoing and the respective successors, assigni egents, shareholders. officers, directors or employees of the foregoing excluding, however, any Particips.St under the Operating Agreement other than the Owner Trustee or .. Owner Participant, to the extent they should become such a Participant. l g Indemnity Payment shall have the meaning set forth in Section of the Tax IndemniGeation Agreement. a I Indenture shall mean the Trust Indenture, Mortgage, Security Agreement and Assignment of ; l Facility Lease, dated as of - ,1987, between the Owner Trustee and the Indenture Trustee. j indentare Default shall mean an event w hich, after giving of notice or lapse of time. or both, would i' become an Indenture Event of Default. Indenture Ecent of Default shall mean any of the events speciGed in Section 6.2 of the Indenture. ALPHA
\
A.16
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k' Indenture Trustee shall mean Irving Trust Company,.,s New York banking corporat$m. wk ia its individual capacity, but solely as Indenture Trustee under the Indenture and each successor" trustee
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and co-trustee thereunder,
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indenture Trustre's Liens shall mean Liens against the Lease Indenture Estate which result from 'n acts of. or any failure to act by, or as a result of claints against. the Indenture Trustee. in its indisidual i > ~ capacity. unrelated to the transaethns enntemplated by the Transaction Documents. s
. Indenture Trustee's Ofice ' hall nbnNe 9ffice of the Indenture Trustee located at One Wal Street. New York, New York 10015. Att ention:Vice President, Corporate Trust Administration. or such other office as may be designated by tbt Indenture Trustee to the Owner Trustee and each Holder of a Note Outstanding under the Indenture.
Indenture Truster's Counsel shall mean [Could & Wilkie, One Wall Street, New York New York ' 10005] or such other counsel as shall be selected by the Indenture Trustee. Initialletter of Credit shall have the meaning set forth in Section 10(b)(3)(i.def,the Participation Agreement. r I
- Initial Pricing File shall have the meaning set forth in Section 3(f)(i) of the[Factli@ lease.
Initial Series Notes shall mean the non recourse promissory notes, subs'tantie.!!y in $ forni of Exhibit A to the Indenture, to be issued by the Owner Trustee and authenticated by thh Indenture Trustee on the Closing Date to finance a portien of the Purchase Price. '
-3 g_
lncestment shall have the meanity set forth h. Section 3(a) of the Participation Agreement.' larestment Company Act shall mean the Investment Company Act of 1940, as amended. IRS shad mean the Internal Revenue Service of the United States Department of the Treasury or any successor agency, y issuing Bank shall mean, with respect to the Initial Letter of Credit. [The Fuji Bank. Limited. acting through its New York branch), and with respect to each other Letter of Credit. the issuing bank thereof. IT shall mean Irving Trust Comprmy in its k.dividual capacity, and its necessors and assigns. Lease Indenture Estate shall have the meaning set forth in Section 2.1 of the Indenture. Lease Term shall mean the aggregate of the Basic Lease Term and the Renewal Term. if'any. ' Lease Termination Data shall mean the last day of the Lease TetMhether occurring by reason of a termination or expiration of the Lease Term). Lessee shall mean Ohio Edison Company, an Ohio corporation, and its successors and assigns. as lessee under the Faellity Lease and as party to the other Tamaction Documents and Fmancing Docaments to which it is a signatory. Lessee's Cencral Counsel shall mean Russell L Spetrino, Esq., Vice President and General Counsel of the Lessee, or any other person holding such office with the Lessee. 1 Lessee's NRC Counsel shall mean Shaw, Pittman, Potts ac Trowbridge 2403 N Street. N.W.. Washington. D.C. 20037, or such other counsel expert in matters relating to the NRC as shall be < sdected by the Lessee. Lessee's Special Counsel shall mean Winthrop, Stimson. Putnam & Roberts. 40 Wall Street. New York, New York 10005, or such other counsel as shall be selected by the Lessee. ; ALPHA I A 17 I i CtJRRENT ENDING PAGE CON 0!TIONS ARE INCONSISTENT WITH THE NEXT PAGE : 082.00.00.00 I J l
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[ Lessee's Special Pennsylvania Couruel shall mean Ballard, Spahr. Andrews & Ingersol' 30 South lith Street, Philadelphia. Pennsylvania 19103, or such other counsel as shall be selected by the Lessee. Lessor shall mean the Owner Trustee, as lessor under the Facility Lease, and its successors and assigns as such lessor. Lessor" Exemption Procision shall mean (x) a provision in the Price-Anderson Act or the Atomic 1> Energy Act to the effect that. or substantially to the effect that. "no person under a bona fide Lease of any utilization or production facility (or part thereof or undivided interest therein) shall be liable b 3 reason of an interest as Lessor of such production or utilization facility, for any Legal Liability arising out of or resulting from a nuclear incident resulting from such facility, unless such facility is in the actual possession and control of such person at the time of the nuclear incident giving rise to such Legal Liability", or (y) Applicable Law which otherwise exempts. in the reasonable opinion of independent counsel to the Owner Participant the Owner Trustee and the Owner Participant from all real or potential liability in respect of a Nuclear Incident so long as neither the Owne Trustee nor the Owner Participant is in actual possession and control of Unit 2 or the Undivided fr:erest. Lessor's Liens or Oscner Truster's Liens shall mean Liens against the Trust Estate or the Lease klenture Estate which result from acts of. or any failure to act by, or as a result of claims against. FNB.
!mrelated to the ownership of the Undivided Interest. the administration of the Trust Estate or the transactions contemplated by the Transaction Documents.
Letter of Credit shall have the meardng set forth in Section 10(b)(3)(it) of the Participation Agreement. License shall mean NRC Facility Operating License No. NPF-64. as the same may be amended, modified, extended, renewed or superseded from time to time. License Expiration Date shall mean June 1,2017, or such later date or earlier date as the License shall expire or be terminated. Lien shall mean any mortgage, pledge, security interest encumbrance. lien. easement. sersitude or charge of any kind, including, without limitation, any conditional sale or other title retention agreemerit, any lease in the nature thereof or the Bling of, or agreement to gise, any Snancing statement under the Uniform Commercial Code of any jurisdiction. Limited Partner shall mean Sovran Leasing Corporation and its successors and assigns. Limited Fadnership Agreement shall mean the Amended and Restated Limited Partnership Agreemont dated as of , by and among the General Partners and the Limited Partner loan shall have the meaning set forth in Section 2(a) of the Participation Agreement. Loan Participants shall mean the Original Loan Participants, so long as the Initial Series Notes are s Outstandtug, and each other Holder of a Note from time to time. f.ean Percentage shall meau,in respect of each Originalloan Participant. the percentage set forth opposite the name of such Original Loan Participant in Schedule 1 to the Participation Agreement. Majority in Interest of Holders of Notes shall mean Holders of a majority in principal amount of ail Notes Outstanding under the Indenture at the time of any such determination provided. howes er. that for purposes of any determination with respect to the Initial Series Notes. such term shall mean Holders of not less than 66%% in principal amount at the time of such determination. Management Fee shall mean the fee referred to in Section 3(b)(iv) of the Facility Lease. Managing Panner shall mean Perry One. Inc. a Delaware corporation. ALPHA A-16 ) CURRENT ENDiNG PAGE CONDITIONS ARE INCONS!$ TENT WITH THE NEXT PAGE : 083.00.00.00 - 1 l
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OMio E0is0N CO. gDWNE OF NEW YORK (21219245500 I i , Sfandatory Special Transfer fornt shall mean a Special Transfer Event referred to in clause (a) of the definition of Special Transfer Event. Sfaterial Project Agreements shall mean the CAPCO Project Agreements as de6ned in the Assignment and Assumption Agreement. 3/aximum Aggregate lots shall be computed and applied in respect of Unit 2. including all interests therein. and with respect to each calendar year shall mean the sum of (i) retrospective premiums. if any, payable during such year under the Retrospective Rating Plan with respect to any Nuclear Incident which shall have occurred prior to the date of such calculation. (ii) all uninsured liquidated amounts paid or payable during such year, and not covered by the Retrospective Rating Plan. in respect of Nuclear Incidents, and (iii) other known assessments and costs and an assumed additional amount in respect of such retrospective premiums which would be payable during such year if a Nuclear Incident, or one addhional Nuclear Incident, should occur in such year. Sfaximum Letter of Credit Amount shell mean the maximum credit amount in any Letter of Credit. Sfodifed Special Casualty Value, as of any date during the Basic Lease Term, shall mean the percentage of Facility Cost set forth opposite such date (or the Basic Rent Payment Date next succeeding such date) in Schedule 4 to the Facility Lease. Sloody's shall mean Moody's Investors Service, Inc., and any successor thereto which is issuing nation hy accepted securities ratings. Sfortgage Refrase shall mean the Release under and with respect to the Existing Mortgage releasing, among other things, the Undivided Interest from the lien of the Existing Mortgage. Ne't Economic Return shall mean the after tax economic yield and aggregate after'ta cad. Pow originally expected by the Partners with respect to the Undivided Interest. calculated utilizing the Assumptions and the initial computation of Basic Rent, Casualty Values. Special Casualty Values and ModiGed Special Casualty Values derived from the Assumptions. as such return shall be adjusted l pursuant to, and in accordance with, the terms of Sections 3(d) and (f) of the Facility Lease. Net Worth means the consolidated common stockholders' equity, preference and preferred stock of the Lessee and its Subsidiaries, but does not include intangibles determined by the Lessee's auditors j on the basis of generally accepted accounting principles. ; 1 Nrt Worth factor shall mean the quotient obtained by dwiding (1) CAPCO Net Worth. as of December 31 of the year prior to the date of any calculation of Net Worth Factor. by (ii) CAPCO Net Worth, as of December 31,1986. Non-Burdensome Regulation shall mean (i) ministerial regulatory requirements ahich do not ! impose limitations or regulatory requirements on the business or actisities of the Owner Participant and which are deemed,in the reasonable discretion of the Owner Participant. not to be burdensome. (ii) assuming redelivery of the Undivided Ir terest in accordance with Section 5(a) of the Facilit> Lease, regulation resulting from any possescion of the Undivided Interest on or after the Lease Termination Date or (iii) regulation of the Owner Trustee which would be terminated by the appointment of a successor Owner Trustee or a co-Owner Trustee pursuant to the terms of the Trust Agreement. Nonscocrable, when used with respect to any Capital Improvement. shall mean any Capital Improvement which is not a Severable Capital Improvement. Norrholder shall mean any Holder from time to time of a Note Outstanding under the Indenture. Notes shall mean the Initial Series Notes and any Additional Notes. Notice ofClosing shall hase the meaning set forth in Section 5(a) of the Participation Agreement. ALPIIA A-19 CURRENT ENDING PAGE CONDtTIONS ARE 0.K. THE NEXT PAGE : 084 00.00 00 - I
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b NRC chall mean the Nuclear RegElatory Commission of the Unitr,l States of America or any Ml
@ successor agency.
[F' j j" Nuclear Facility shall mean a facility designed for producing subshndai amounts of electricity and having a rated capacity of 100.000 electrical kilowatts or more. .O - , yY : Nuplear incident shall have the meaning set forth in the Atomic Energy Act. alin effeOs of the Closing Date: provided that if the Atomic Energy Act shali be amend?d to expand the deG*ntion of a ~
"mM6ar incident"ithe term Nuclear incident shall be similarly expanded. s 7
a i Nuclear Waste Act sk?Jl Mean ' the ' Nuclear Waste Policy Act of 1962. as ' amended. or any comparable successor law, i
'l4 / ~ Obsolescence Redemption lay sinal! mean (i) if an>4Honds are outstanding on the' related
/ Termination Date, the date wHals 40 days after such Termination Date, or if such date is not a I'
Dustries: Day, the next Business gy thereafter, or (ii) if nq Bonds are outstanding, such Termination Date.
/. ~
i Ofcers' Certifcate shall mean a certi6cate signed by,the P isident or any Vice President and by .i l the Treasurer. or any Assistant Treasurer, the Secretary or n/ /Assistant Secretary of the Person with respect to which such term is used. [ i r l f Operating Agent shallimean Duquesne Light Company, a Pennsylvania corporation. or an-successo' r Operating Agent under the Operating Agreement. Opercting Agreement shall mean the Operating Agreement - Beaver WR2v Power $tation Unit No. I and 2 as Amended and Restated , ,1967, between and among the CAPCO Companies. 3 [Utiti! such time that thrOperating Agreement is fully effective by its terms. the term " Operating
; , { Agreement" shall include th Construction Ayreement to the extent that'said agreement goserns h E matters that would be govetud by the Op4 rating Agreement ifit were fully'ellectige.]
Optimal Debt Stru .
) ]
Il have the meaning set k*cttb,in Section 3(Q(v) of the Feility Lease. i 1
,; Optimal Structu* 1%II I *.ve the meaning set forth ig Section 3(O(vi) of the Faciht) Lease.
t ,
+ !
) Optimir.ed Basic Rem shall have the meaning set forth in Section 3(0(v) of the Faylity Lease.. l i
i e f, Origmal loan Participants shall mesq the Snancial institutions listed in Schedule 1 of the ! Participation Agreement under the headin# Original Loan Participants". Original Loan Participants' Counsel shdlinean Cravath, Swaine & Moore, One Chase blanhattan Plaza. New York, New York 10005, or sueldther counsel as shall be selected by the Original Loan Participants. C Original of the Facility lease shall mean the fully executed counterpart of the Facility Lease. marked "This Counterpart is the Original Counterpart", pursuant to Section 22(e) of the Facility ' Lease and containing the receipt of the Indenture Trustee. Original Present Value shall have the meaning set forth in Section 3(O(iij of the Facility Lease. Outs 4 ding when used with respect to Notes, shall mean, as of the date of determination. all such
, Notes thereto0are issued authenticated and delivered under the Indenture, except (a) Notes thereto.
fore cancelled by e.he Inmturo Trustee or delivered to the Indenture Trustee for cancellation. (b) l Notes or portions threof (or the payment of which the Indenture Trustee holds (and has noeSed the I Holders thereof that it hcids) in trust for that purpose an amount sufficient to make full pa> ment
~, ,. thereof when due (c) Notes or portions thereof which have been pledged n collateral for an>
obligations of the obligor thereof to the extent that an amount sufScient to make full pa> ment of such
- c. obligations when due has been deposited with the pledgee of such Notes for the purpose of holding x j h( v ( ALPHA
-( T" A.20 li j ,
I l J), 1 CURRENT ENDING PAGE CON 0!TIONS ARE INCONSISTENT WITH THE NEXT PAGE : ta100.0100 - I ( _ ____ . . _ _ _ . _ - _ _ _ _ _ _ _ _ _ _ _ - - - - _ _ _ - - _ - - - _ - _ _ _ - - - - - - -
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Such amount in trust for the payment of such obligations in accordance with the indenture or j agreement under which such obligations are secured and (d i Notes in exchange for, or in lieu of.
-)
which other Notes have been issued, authenticated and delivered pursuant to the Indenture: provided. l however, that any Note owned by the Lessee, the Owner Participant or the Owner Trustee or any .l
. Affiliate of any thereof shall be disregarded and deemed not to be Outstanding for the purpose of an>
Directh em j j Orcrdne Interest Rate shall mean the weighted aserage rate per annum of interest pasable uith respect to oserdue payments of principal on the Notes Outstanding, computed as set forth in such Notes, j4 q Owner Participant shall mean l Perry One Alpha Limited Partnership.l and each successor or assign of such Person in accordance with the Trust Agreement and the. Participation Agreement. l 1 Owner Participant's Liens shall mean Liens against the Trust Estate or the Lease Indenture Estate and which result from acts of, or any failure to act by, or as a result of claims against. the Owner Participant or any Partner unrelated to the transactions contemplated by the Transaction Documents. Owner Participant's NRC Couruel shall mean [Newman & Holttinger, P.C. 1615 L Street. l Washington. D. C. 20036,] or such other evunsel expert in matters relating to the NRC as shall be 'f i selected by the Owner Participant. Owner Participant's Special CounM shall mean lMilbank, Tweed. Hadley & McCloy. One Chase Manhattan Plaza. New York. New York 10005.l or such other counsel as shall be selected b> the Owner Participant. Owner Participant's Special Ohio Counsel shall mean Squire. Sanders & Dernpsey,1500 Huntington Buildiryg. Cleveland, Ohio 44115, or such other counsel as shall be selected by the Owner Participant.
' Owner Participant's Special Pennspicania Counsel shall mean Dechert Price Rhoads. 3100 Centre i Square West, Philadelphia Pennsylvania 19102 or such other counsel as shall be selected by the Owncr !
Participant. Owner Participant's Special Tax Counsel shall mean [Shearman & Sterling, 5') Wall Street. New York, New York 10005.] or such other counsel as shall be selected by the Owner Pa-ticipant. l Owner Tnutee shall mean The First National Bank of Boston, not in its individual capacity. but i solely as Owner Trustee under the Trust Agreement, and each successor as trustre. separate trustee I and co trustee thereunder; provided, however, that the term Owner Trustee, as used in the Trust i Agreement, shall mean The First National Bank of Boston in its individual capacity. Owner Trustee's Counsel shall mean Csaplar & Bok, One Winthrop Square. Boston. Massachusetts 02110. or such other counsel as shall be selected by the Owner Trustee. Participation Agreement shall mean the Participation Agreement. dated as of .1957. l among the Owner Trustee, the Indenture Trustee, Funding Corporation. the Original Loan Partici-pants, the Owner Participant and the Lessee. Partner shall mean any General Partner or Limited Partner. Penalty Rate shall mean the higher of (x) 2% per annum in excess of the Prime Rate and (y) 14 j I per annum in excess of the Overdue Interest Rate. b Period shall mean the length of time for which an action or event is stated or otherwise known at its inception to be in existence (determined by the trrms of such action or esent or the surrounding circumstances), or is expected at its inception to be in existence as determined by e independent l nuclear engineering consultant or firm having expertise in the area of nuclear electric generating l plants designated by Lestor and Lessee within 10 days after either shall request such designation ALPHA A 21 CURRENT ENDING PAGE CONDITIONS ARE INCONSISTENT WITH THE IJEXT PAGE 086 00.00 00 1 l I-e
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I l (which Lessor or Lessee may do at any time after such action or event occurs) or. if Lessor and Lessee are unable to agree on such consultant or Erm within such 10-day period, designated by the American Arbitration Association, or any organization successor thereto, within 7 days after either Lessor or Lessee shall request such organization so to do (which Lessor or Lessee may do at any time after the expiration of such 10-day period). Such consultant or Grm shall render its determination within 14
. davs after its designation. which determination shall be Snal. binding and conclusise on Lessor and Lessee. The fees and expenses of such consultant or firm shall be shared equally by Lessor and Lessee.
L
~
Permitted Liens shall mean (i) the respective rights and interests of the Lessee, the Owner L Participant, the Lessor, the Loan Participants and the Inder.ture Trustee, as provided in the Transae; ' , tion Documents; (ii) the rights of any sublessee or assignee under a sublease' or an assignment permitted by the terms of the Facility Lease (iii) the Lien of the Existing Mortgage on the leasehold l estate under the Facility Lease and on the Retained Assets and the Unit 2 Retained Assets: (iv) Liens for taxes either not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted, so long as such proceedings shall not (x) involve any danger of the sale. L forfeiture or loss of the Undivided Interest or any part thereof or interest therein. (y) interfere with the use, possession or disposition of the Undivided Interest or any part thereof or interest thereir., or . (z) impair payment of Rent: (v) inchoate materialmen's. mechanics', workmen's, repairmen's. employ-l ers', carriers', warehousemen's or other like Liens arising in the ordinary course of business for BVPS. and not delinquent; (vi) Lessor's Liens. Owner Participant's Liens and Indenture Trustee's Liens: (vii) choate Liens that have been bonded for the full amnunt in dispute or as to which other security. arrangements satisfactory to the Lessor and the Owner Participant shall have been made and which are being contested diligently by the appropriate party in good faith and by appropriate proceedings so long as such proceedings shall not violate clause (x), (y) or (z) of clause (iv) abose: (viii) choate Liens of any of the types described in clause (v) above that have been bonded for the full amount in dispute' or as to which other security arrangements satisfactory to the Lessor and the Owner Participant shall have been made and which arise out of judgments or awards and with respect to which ( A) an appeal or proceeding for review is being prosecuted in good faith and for the payment of which adequate reserves shall have been provided as required by generally accepted accounting practice and (B) there shall have been secured a stay of execution pending such appeal or proceeding
- for review, so long as such proceedings shall not violate clause (x), (y) or (z) of clause (iv) above: (ix) the rights and interests of the Lessee under the Assignment and . Assumption Agreement. the Additional Support Agreement and the Ground Lease (x) the rights of the NRC under the License:
(xi) the rights of the CAPCO Companies (other than the Lessee) under the CAPCO Agreements: and l (xii) Liens on the undivided ownership interests in Unit 2 of the CAPCO Companies and other Persons (other than the lessee). Person shall mean any individual, partnership, corporation, trust, unincorporated association or joint venture, a government or any department or agency thereof, or any other entity. Perrons Indemnifed shall have the meaning assigned in the Price-Anderson Act. as in effect as of the Closing Date; provided that if the Price-Anderson Act shall be amended to expand the meaning of the term " persons indemni6ed", the term Persons Indemnifed shall be similarly expanded. PPUC shall mean the Pennsylvania Public Commission, or any successor agency. Preliminary Market Interest Rates shall have the meaning set forth in Section 3t f)(v) of the Facility l Lease. Preliminary Optimized Rent Pricing File shall have the meaning set forth in Section 3(f)(v) of the 4 Facility Lease. I 1 Price-Anderson Act shall mean the Price Anderson Act. Pub. L No. 85-256,71 Stat. 576 (1957), as j amended to the Closing Date. ALPHA I i A-22 i CURRENT ENDING PAGE CONDITIONS ARE INCONSISTENT WITH THE NEXT PAGE : 087.00.00.00 I i l I) n 1
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,,,,,1 4 Pricing Assumptions shall mean the pricing assumptions set forth in Schedule 5 to the Participation Agreement.
Primary Financial Protection shall mean Financial Protection required to be maintained by each Nuclear Facility under Applicable Law. except for such amounts required to be maintained under a Retrospective Rating Plan, Prime Rate shall mean the rate of interest publicly announced from time to time by FNB at its prmeipal office in Boston, Massachusetts as its prime or base lending rate. Any change in the Prune Rate shall be effective on the date such change in the Prime Rate is announced. Project shall have the meaning set fo th in Section 13(g) of the Facility Lease. Prudent Utility Practice shall mean, at a particular time, any of the practices. methods and acts engaged in or approved by a significant portion of the electric utility industry prior to such time or any of the practices. methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at the lowest reasonable cost consistent with good business practices, reliability, safety and expedition. Prudent Utility Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather to a spectrum of possible practices methods or acts hasing due regard for, among other things, manufacturers' warranties and the requirements of governmental agencies of competent jurisdiction and the requirements of the Transaction Documents. PUCO shall mean The Public Utilities Commission of Ohio. or any successor agency. Purchase Dohments shall mean the Bill of Sale and such other documents as the Participant, the Owner Trustee, the Indenture Trustee, the Original Loan Participants or their l respective counsel shall deem desirable to convey good and marketable title to the Undivided Interest to the Trust. Purchase Price shall have the meaning set forth in Section 4 of the Participation Agreement. Itensonable Basis for a position shall exist if tax counsel raay properly advise reporting such position on a tax return in accordance with Formal Opinion 65-352 issued by the Standing Committee on Ethics and Professional Responsibility of the American Bar Association. Refunding Bonds shall mean any series of bonds of Funding Corporation issued. authenticated and delivered under the Collateral Trust Indenture, as supplemented. If necessary, by a Refunding SupplementalIndenture, the proceeds of which will be used to refend the Initial Series Notes or any Additional Notes. Refunding Date shall mean any date on which Refunding Bonds are issued. Refunding Loan shall have the meaning set forth in Section 2(d) of the Participation Agreement. j Refimding SupplementalIndenture shall mean ar.y Refunding Bond Supplemental Indenture among f Lessee, Funding Corporation and the Collateral Trust Trustee, supplementing the Collateral Trust Indenture and providing, among other things. for the issuance of Refunding Bonds. Registration Statement shall mean a registration statement. including all exhibits and all documents incorporated in such Registration Statement by reference, filed with the SEC under the Secunties Act j in connection with the offer, issue and sale of any Refunding Bonds. Regulations shall mean the income tax regulations issued, published or promulgated under the Code, or under the Internal Revenue Code of 1954, as amended. f Reimbursement Agrrement shall mean the Reimbursement Agreement dated as of 1987 among the Lessee Chemical Bank, , Limited and the participating banks named j ALPHA } l A 23 i CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 088.00 00.00 - 1 i
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. i 1
1 therein, and with respect to any subsequent Letter of Credit, the reimbursement agreement governing the rights and obligations of the Lessee and the Issuing Bank. Reimbursement Default, while the Initial Letter of Credit is outstanding, shall have the meaning set ] forth in Section 1 of the Reimbursement Agreement and thereafter shall include similar esents in any i subsequent reimbursement agreement with respect to a subsequent Letter of Credit, i Reimbursement Event of Default. while the Initial Letter of Credit is outstanding. shall base the meaning srt forth in Section 1 of the Reimbursement Agreement and thereafter shall include similar events in any subsequent reimbursernent agreement with respect to a subsequent Letter of Credit. Releveraging Amount shall mean (i) the initial principal amount of each series of Releveraging Bonds, but only in an amount equal to the amount of the related Note or Notes issued in connection with such Bonds, or (ii) the initial principal amount of any series of Refunding Bonds to the extent such amount is in excess of the Bonds being refunded, but only in an amount equal to the amount that the related Fixed Rate Note or Notes exceed the outstanding amount of the Notes then being prepaid. Refereraging Bonds shall mean a series of securities issued, authenticated and delivered under the Collateral Trust Indenture, part of the proceeds of which is used to refund to the Owner Participant a portion ofits Investment as provided in Section 3(b) of the Participation Agreement. Relcreraging Date shall mean any date on which heleseraging Bonds are issued. Br/rieraging loan shall hase the meaning speciSed in Section 2(c) of the Participation Agreement. fieleceraging Note shall mean a Note. or that portion thereof, evidencing a Releseraging Loan. Renewal Option shall mean the option to elect an extension of the Facility Lease for the Renewal Term. Renetral Term shall have the meaning set forth in Section 12 of the Facility Lease. Rent shall mean Basic Rent and Supplemental Rent. Elent Differential shall have the meaning set forth in Section 3(h) of the Facility Lease. Required Rent Payment Amount shall mean the Equity Portion of Rent in respect of the following amounts payable as Supplemental Rent by the Lessee through the Indenture Trustee (i) in the case of Special Transfer Events based upon Deemed Loss Events, Special Casualty Value as of the Basic Rent Payment Date on which occurs the Special Transfer, or, if the date on which the Special Transfer occurs is not a Basic Rent Payment Date, the Basic Rent Payment Date next succeeding the date of the Special Transfer, (ii) in the case of Special Transfer Events based upon Events of Loss. Casualty Value I as of the Basic Rent Payment Date on which the Special Transfer occurs or, if the date on which the Special Transfer occurs is not a Basic Rent Payment Date, the Basic Rent Payment Date next succeeding the date of the Special Transfer and (iii) in the case of Special Transfer Events based upon Events of Default, the amount set forth in Section 16(a)(v)(D) of the Facility Lease, together in each case with interest thereon, if any, in accordance with Section 3(b)(iii) of the Facility Lease. Requisition of title shall mean any circumstance or event in consequence of which Unit 2 or the Undivided Interest or any portion of the Common Facilities or the BVPS Site the loss of which would significantly interfere with the use of Unit 2 or the Undivided Interest shall be condemned or seized or tide thereto shall be requisitioned or taken by any Governmental Authority under power of eminent domain or otherwise. Requisition of Use shall mean any circumstance or esent other than a Requisition of Title m consequence of which the use of Unit 2 or the Undivided Interest or any portion of the Common Facilities or the BVPS Site the loss of which would signi6cantly interfere with the use of Unit 2 or the l i ALPilA A-24 l l l l
~ CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 089.00.00 00
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) 1 Undivided Interest shall be requisitioned or taken by any Governmental Authority under power of eminent domain or otherwise.
Responsible Oficer shall mean, with respect to the subject matter of any cosenant. agreement or obligation of any party contained in any Transaction Document, the President. or an> Vice President. Assistant Vice President. Treasurer. Assistant Treasurer or other officer who in the normal perform. ance of his operational responsibility would base knowledge of such matter and the reqmrements uith respect thereto. l Retained Assets shall mean (1) the Lessee's interest in BVPS other than the Undisided Interest and (ii) Severable Capital Improvements title to the undivided interest in which is retained by the Lessee in accordance with Section 8(e) of the Facility Lease. Retrospective Rating Plan shall mean the industry retrospective rating plan established pursuant to the Price Anderson Act, or any successor or similar plan established under Applicable Law. Recersed Base file shall hase the meaning set forth in Section 3(f)(iii) of the Facility Lease. Recised Optimized Rent Pricing File shall have the meaning set forth in Section3(f)(vii) of the Facility Lease. Recised Present Value shall hase the meaning set forth in Section 3(f)(iv) of the Facility Lease. Safe Harbor Change shall mean any Substantial Amendment, and any other change which. had it been part of the Grst Substantial Amendment (together with all other changes since the first Substantial Amendment) would have beer a Substantial Amendment. enacted after the Closing Date. if upon the effective date of such Substantial Amendment or othar change and at all times thereafter (as shall be determined from time to time): ( A) (1) There shall be a Lessor's Exemption Provision, and (2) such Substantial Amendment meets the conditions stated in subclauses (1), (ii), (iii), (vi), (vii), (viii) and (ix) of clause (B) below provided. however, that part (b) in subclause (i) of clause (B) shall read as follows. "libi the product of (1) 1.75 times (2) the Net Worth Factor times (3) the product of S bilhon multiplied by the Adjustment Factor *"", and subclause (iii) of clause (B) shall read as follows.
" Maximum Aggregate Loss, on the date of enactment of the Substantial Amendment and at all times thereafter shall not exceed the product of (x) 1.75 times (y) .5% times) (z) the product of l the Net Worth Factor times 8 billion *"" l provided, further, that in the esent the owner Participant is furnished with an opinion of its independent counsel stating that, because of a change in Applicable Law, there is a reasonable basis for concluding that the Lessor's Esemption Provision then in effect is unconstitutional or no longer valid, then this clause ( A) shall cease to be applicable; or (B) in the event clause (A) is not applicable, as a result of such Substantial Amendment: (i) l Adjusted Aggregate Liability, on the date of enactment of the Substantial Amendment and at all l times thereafter, shall not exceed (in the opinion of independent counsel to the Owner Participant) (a) the amount of Financial Protection required to be maintained by each Nuclear
)
Facility with respect to a single Nuclear Incident or (b) the product of (1) the Net Worth Factor times (2) the product of $7.0 billion times (3) the Adjustment Factor, and if Adjusted Aggregate Liability should exceed either (a) or (b) abose the Substantial Amendment shall no longer constitute a Safe Harbor Change: (ii) the amount of Primary Financial Protection available (commencing on the effective date of such Substantial Amendment and at all times thereafter) ; from commeretalinsurance underwriters on terms substantially equivalent (in the opinion of the ' Owner Participant) to the terms in effect on the Closing Date under Applicable Law and required to be maintained by licensees with respect to any single Nuclear Facility shall be at least equal to i the amount required under Applicable Law (which amount shall not exceed 5500 millionn nii) l ALPilA A 25 l CURRENT ENDING PAGE CONDITIONS ARE INCONSISTENT WITH THE NEXT PAGE : 090.00.00.00 - 1 i
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_I l q hiaximum Aggregate Loss, on the date of enactment of the Substantial Amendruent and at all times thereafter, shall not exceed (in the opinion ofindependent counsel to the Owner Participant) the product of (x) .5% times (y) the Net Worth Factor times (z) $7.0 billion. and if Af aximum Aggregate Loss should exceed the foregoing product the Substantial Amendment shall no longer constitute a Safe Harbor Change: (iv) the provisions of the penultimate sentence of Section 170b. of the Atomic Energy Act.10 C.F.R. { 140.22. or 10 C.F.R. { 140.92 (as it relates to the guarantee by the NhC of defaults by licensees under the Retrospective Rating Plan). as in effect on the Closing Date, shall not (in the opinion of independent counsel to the Owner Participants h ne been amended or modiSed in any material respect; (v) a mechanism in form and substance reasonably satisfactory to the Owner Participant shall be in effect under which the maximum potential liability of all Persons during any calendar year as a result of a Nuclear Incident shall not exceed the amount ofinsurance or other Gnancial protection required to be available during the calendar year to pay all amounts which may beco ne payable by any such Person. when and as they become payable. in respect of such liability and the form and source (other than commercial insurance underwriters m respect of $160 million of primary insurance coverage and licensees of nuclear facilities in respect of deferred premiums) of insurance and other Snancial protection required under Applicable Law to be maintained in respect of liability arising from a Nuclear incident shall be reasonably satisfactory to the Owner Participant: (vi) neither the Lessor. nor the Owner Participant shall, in the opinion of independent counsel to the Owner Participant. be exposed to any increased real or potential liability (including assessments imposed by a Cosern-mental Authority) with respect to activities authorized by the Nuclear Waste Act: (vii) none of the results contemplated in subclauses (vii) and (ix) of clause (2) of the deAnition of Deemed Loss Event shall,in the opinion ofindependent counsel to the Owner Participant. hase occurred. l (viii) neither the Lessor, the Owner Participant nor any Partner shall, in the opinion of independent counsel to the Owner Participant delivered within six months after the enactment of such Substantial Amendment, be exposed to any other ntaterial increase in its real or potential liability with respect to a Nuclear Incident, either before, on or after the Lease Termination Date. except for liability arising with respect to a Nuclear Incident which takes place after the Lessor, the Owner Participant or such Partner, as the case may be, comes into actual possession and control of Unit 1, and (ix) neither the Lessor, the Owner Participant, nny Partner. nor the Lessee shall be prohibited from asserting any other right, protection or defense asailt.ble under Applicable Law as in effect on the Closing Date other than those rights, projections and defenses which are waived pursuant to this de6nition of Safe Harbor Change: provided, houerer, that an expansion of the waiver of defenses provision of subsection 170n. (1) of the Atomic Energy Act so that such waivers are applicable with respect to an Extraordinary Nuclear Occurrence arising out of or resulting from or occurring in the course of (a) transportation of source material. by-product material, or special nuclear material to or from any facility licensed under Section n 63 or Sl of the Atomic Energy Act, (b) activities undertaken by the Secretary of Energy. including but not limited to activities related to the storage or disposal of high-level radioactive waste, or (c) the construction. possession or operation of any facility licensed under Section n 63 or 51 of the { Atomic Energy Act, shall not be deemed to expose the Lessor. the Owner Participant or the Lessee to any increased real or potential liability. Sale Proceeds shall mean, with respect to any sale of the Undivided Interest by the Lessor to any Person. the gross proceeds of such sale paid in cash, less all costs and expenses w hatsoeser incurred by the Lessor and the Owner Participant in connection therewith. SEC shall mean the Securities and Exchange Commission of the United States of America or any ! successor agency. (2 ALPilA A-26 s l _ CURRENT ENDING PAGE CONDITIONS ARE INCONSISTENT WITH THE NEXT PAGE : 091.00.00.00 - , i i I
p=
,, M . So ne integrstes Typesettme system v1X/ VMs Joe s PRooMGRBPX/20Co0EJ 3/ s2sDJA 46:PAGER.EXE)P1GER EAE, s-sep 87 21.57 sty * $250ea44:(STYLES)sfYLEco3 0st,19 Far DisassCatCH9PK(9Roo sCRATCicf70000009 Fmt: c too sey 27 s= r.e ecoa,.mu, act tae sooo. vust an ' JOS: Y30958 t- o.co Epison co. soWWE oF NEW Wo#M (212mtSS00 PCN: 091.00.00.00 5/N: 3 I
i . Section 6fc) Application shall mean Funding Corporation's Application for an Order under Section 6(c) of the Investment Company Act of 1940 Exempting Funding Corporation from All Provisions of l such Act, as filed with the SEC on August 11,1987. Secured Obligations shall hase the meaning set forth in Section 7(b)(4)(C) of the Participation Agreement, Securities Act shall mean the Securities Act of 1933, as amended. Securities Exchange Act shall mean the Securities Exchange Act of 1934, as amended. Screrable, when used with respect to any Capital Improvement, shall mean any Capital Impros e-ment which can be removed from Unit 2 without materially damaging Unit 1 or materially diminishing or impairing the value, utility or condition of Unit 2. Share shall mean a percentage equal to the Undivided Interest Percentage. Signifcont Expenditures shall have the meaning set forth in Section 13(g) of the Facility Lease. Special Casualty Value, as of any date during the Basic Lease Term, shall mean the percentage of Facility Cost set forth opposite such date (or the Basic Rent Payment Date next succeeding such date) in Schedule 3 to the Facility Lease. Anything contained in the Participation Agreement or the Facility Lease to the contrary notwithstanding, Special Casualty Value shall be. when added to all other
'I amounts which the Lessee is required to pay under Section 9(d) of the Facility Lease or under any '
other provisions of the Facility Lease which requires the payment of Special Casualty Value (taking into account any assumption of the Notes by the Lessee), under any circumstances and in any esent. in an amount at least sullicient to pay in full, as of any date of payment, the aggregate unpaid principal amount of all Notes Outstanding at the close of business on such date, together with accrued and unpaid interest on such Notes. Special Casualty Value as of any Basic Rent Payment Date during any Renewal Term, shall mean the amount determined by amortizing ratably the present value of Basic Rent (discounted at the Discount Rate in effect at the time of such calculation) payable in respect of the Undivided Interest for the Renewal Term (retaining as a residual the anticipated Fair 51arket Sales Value of the Undivided Interest as of the last day of the Renewal Term) in semi-annual steps oser the period from such date to the License Expiration Date, Special Transfer shall have the meaning set forth in Section 7(b)(4)(A) of the Participation Agreement, j Special Transfer Event shall mean: (a) if a Deemed Loss Event or Event of Loss has occurred and the Lessee shall not have assumed the Notes as contemplated by Section 3.9(b) of the Indenture, the receipt by the Owner Participant of the payments to be made by the Lessee as prosided in Section I 9(c) or 9(d) of the Facility Lease, as the case may be; (b) the occurrence of an Esent of Loss or a Deemed Loss Event: (c) the occurrence and continuance of an Event of Default: (d) any drawing made upon the Letter of Credit predicated upon an event substantially similar to a Deemed Loss Event. Event of Loss or Event of Default; or (e) the occurrence of an Esent of Loss referred to in the final paragraph of the definition of" Final Shutdown", Standard & Poor's shall mean Standard & Poor's Corporation and any success 2r issuing nationally i accepted securities ratings. l Stated Price shall have the meaning set forth in Section 6.ll(b) of the Indenture. Substantial Amendment shall mean any amendment to or replacement of the Price Anderson Act or the Atomic Energy Act which would constitute a Deemed Loss Event. under clause (2) of the definition of Deemed Loss Event. Substituted Lessee shall have the meaning set forth in Section 6.S(c) of the Indenture. ALPHA 1 q l A-27 l CURRENT ENDING PAGE CONDm0NS 4RE 0.K. THE NEXT PAGE : 092.00.00.00 1 1 I-
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[! t L. i y g.- Supplemental Financing shall mean a Gnancing of the Supplemental Financing Amount of Capital improvements made pursuant to Section 8(f) of the Facility Lease. Supplemental financing Amormt shall mean that portion of the Undivided Interest Percentage of the cost of a Capital improvement which equals (1) the amount of the increase if any. In the Owner Participant's basis in the Undivided Interest for purposes of Section 1012 or 1016 of the Code as a result i of such Capital Improvement less (ii) the amount of the related Additional Equity hnestment of the
. Lessor, if any.
Supplemental Rent shall have the meaning set forth in Section 3(b) of the Facility Lease. Surviving Lessee shall have the meaning speciGed in Section 10(b)(3)(ll) of the Participation Agreement. Tax shall mean any and all fees (including, without limitation, documentation, recording, license and registration fees), taxes (including, without limitation, net income, franchise, value added, ad valorem, gross income, gross receipts, sales, use, property (personal and real, tangible and intangible) and stamp taxes), levies, imposts, duties, charges, assessments, or withholdings of any nature whatso-ever, general or special, ordinary or extraordinary, together with any and all penalties, Snes. additions - to tax and interest thereon. Tax Assumptions shall mean the assumptions set forth in Section 1(a) of the Tax IndemniReation Agreement, with respect to the Federal income tax consequences of the transactions contemplated by the Transaction Documents. Tax Indemnification Agreement shall mean each of (i) the Tax IndemniBeation Agreement. dated as of ,1987, between the Lessee and the General Partners and (ii) the Tax IndemniGeation Agreement, dated as of ,1987 between the Lessee and the Limited Partner, L Tax Rate shall have the meaning set forth in Section 3(d) of the Facility Lease. Tax Rate Adjustment shall have the meaning set forth in Section 2(c) of the Participation Agreement. Tar Rate Cap shall have the meaning set forth in Section 3(f)(iv) of the Facility Lease. Tax Rate Change shall have the meaning set forth in Section 3(d) of the Facility Lease. Termination Data shall have the meaning set forth in Section 14(a) of the Facility Lease. Termination Epent shall mean any early termination of the Facility Lease in accordance with Section 14 thereof. Termination Notice shall have the meaning set forth in Section 14(a) of the Facility Lease. Transaction Documents shall mean the Participation Agreement, the Facility Lease. the Ground Lease, the Trust Agreement, the Indenture, the Decommissioning Trust Agreement, the Tax IndemniR. i cation Agreements, the Mortgage Release, the Assignment and Assumption Agreement, the Additional Support Agreement, each Purchase Document and the Notes. Transaction Expenses shall have the meaning set forth in Section 14(a) of the Participation Agreement. Transfer shall mean the transfer, by bill of sale or otherwise, by the Lessor of all the Lessor's nght. title and interest in and to the Undivided Interest and under the Assignment and Assumption Agreement and the Additional Support Agreement on an "as is, where is with all faults" hasis. free and clear of all Lessor's Liens and Owner Participant's Liens (but subject to the Lien of the Indenture if ' and to the ertent it attaches) but otherwise without recourse, representation or warranty (including an express disclaimer of representations and warranties in a manner comparable to that set forth in the ALPHA l A 28 l l I J CURRENT ENDING PAGE CONDITIONS ARE INCONSISTENT WITH THE NEXT PAGE : 09).00.00.00 ._ 'l l l _ _ __-___ m
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_. I i second sentence of Section 6(b) of the Facility Lease), together with the due assumption by the transferee of, and the due release of the Lessor from all the Lessor's obligations under the Assignment and Assumption Agreement and the Additional Support Agreement by an instrument or instrument satisfactory in form and substance to the Lessor and the owner Participant. Transferer shall hae the meaning assigned thereto in Section 15 of the Participation Agreement. Tnat shall mean the trust created by the Trust Agreement. l Tnnt Agreement shall mean the Trust Agreement. dated as of September 15.19M", between the Owner Participant and FNB. Tnnt Estate shall have the meaning set forth in Section 2.02 of the Trust Agreement. Tnat Indenture Act shall mean the Trust Indenture Act of 1939, as amendad. Tnuter's Expenses shall mean any and all liabilities, obligations, costs, compensation, fees, expenses and disbursements (including, without limitation, legal fees and expenses) of any kind and nature whatsoever (other than such amounts as are included in Transaction Expenses) which may be imposed on. incurred by or asserted against the Indenture Trustee or any of its agents. ser ants or personal representatives, in any way relating to or arising out of the Indenture, the Lease Indenture Estate, the Participation Agreement or the Facility Lease, or any document contemplated thereby, or the performance or enforcement of any of the terms thereof, or in any way relating to or arising out of the administration of such Lease Indenture Estate or the action or inaction of the Indenture Trustee under the Indenture: provided, however, that such amounts shall not include any Taxes or any amount expressly excluded from the Lessee's indemnity oblio. tion pursuant to Section 13(a) or 13(b) of the Participation Agreement. UCC or Unifonn Commercial Code shall mean the Uniform Commercial Code as in effect in any applicable jurisdiction. Underwriting Agreement shall mean an agreement among Funding Corporation. Lessee, and tb
)
underwriter or underwriters for any Refunding Bonds relating to the purchase, sale and deliser> > such Refunding Bonds. I Undicided Interest shall mean the Lessor's undivided ownership interest in Unit 2. the percentag,. of which shall be equal to the Undivided Interest Percentage: the owner of the Undivided Interest shali be a tenant.in-common with the owners (including Lessee, ifit should be such an ow ner) of all other l undivided interests in Unit 2. Where the context so requires. Undivided Interest includes an appropriate portion of generation entitlement share under, and as defmed in. the Operating Agreement. Undkided Interest Percentage shall mean % the Undivided Interest Percentage may change from time to time as a result of a disposition or acquisition of an undivided ownership interest in Umt 2. Unifonn System of Accounts shall mean the Uniform System of Accounts prescribed for Public Utilities and Licensees subject to the provisions of the Federal Power Act (Class A and Class B).15 CFR 101, as in effect on the date of execution of the Participation Agreement, as amended or moddied from time to time after such date. Unit I shall mean the 810 megawatt class nuclear generating unit commonly known as Unit I at the BVPS located in Shippingport, Pennsylvania. Unit 2 fletained Assets shall have the meaning set forth in the Assignment and Assumption Agreement. Unit 2 Site shall have the meanmg assigned thereto in Annex B to the B.ll of Sale. Unit 2 shall mean the 800 megawatt class nuclear generating unit commonly known as Unit 2 at BPVS located in Shippingport. Pennsylvania as more ft fly described in Annex A to the Bill of Sale. together with Capital Improvements thereto. User shall mean a Person unrelated to Lessee (within the meaning of Section 318 of the Code) possessing the Undivided Interest after the Lease Termination Date. ( ALPHA A 29 I THIS 15 THE LAST PAGE. _ . I I l l
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,a _ t , geo totson CERTAIN RIGHTS OF THE LESSOR'UNDER THIS FACILITY LEASE HAVE BEEN ASSIGNED ' TO. ' AND ARE. SUBJECT TO A SECURITY INTEREST IN FAVOR OF IRVING TRUST CO.\lPANY.-
AS INDENTURE TRUSTEE UNDER A TRUST INDENTURE, .\lORT.
- l CACE, SECURITY AGREE.\ LENT AND ASSIGNAIENT OF FACILITY-LEASE DATED AS OF SEPTEMBER 15,1987. Tills FACILITY LEASE liAS BEEN EXECUTED IN SEVERAL COUNTERPARTS. SEE SEC.
- TION 22(e) OF THIS FACILITY LEASE FOR INFORMATION CONCERNING THE RICIITS OF HOI.DERS OF VARIOUS COUN-TERPARTS IIEREOF, THIS COUNTERPART IS .NOT THE ORICINAL COUNTERPART.
(, FACILITY LEASE l 'date'd as of September 15,1987 between TIIE FIRST NATIONAL BANK OF BOSTON, not in its individual capacity, but solely as Owner Trustee l under a Trust Agreement, dated as of September 15,1937, with PERRY ONE ALPHA LL\1ITED PARTNERSHIP, Lessor
-and-
~ OHIO EDISON COMPANY, Lessee Sale and Leaseback of an Undivided Interest in l Beaver Valley Power Station Unit No. 2 ALPHA L
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t a 4 j. , dulp L i TABLE OF CONTENTS
!'3'2 '
- PMtTL E* , , .
i t: , . . .
. S EtTinN 1 Definitinna .. ., .. . ... . . . . . , ,
S Es Tio v 2 Leane of ("sidivided Interent and Muhlease of l' nit 2 Site asid Corumon Facilities L*ndivided Interest: Term Personal Property . . .. .. ... ...
~
- n. Lenx* of l'ndivided Interest and Muhleaxe of I' nit 2 Mite and Common Pacilitien l'udiviileit interent. . . .
- h. Term .. ..... .. ...... . ... .. .. ..
- e. Personal Property ... . . ... , .. . .. .
- d. De heription . . . . . . . . . . . . . . . . . .. .. ... .
S M Tio % 3 Rent; Ad.juntments to Rent. .... . . . . . . ,,.
- a. Basie Rent ....'.c........ .. . .. . ... .
- h. Supplemental Rent'. .... . ..... .. .
e.' Form of Payment .
- d. Attjustments to Rent For 11:ange in Tax Rate . .
- e. Other Adjustments tn Rent . . . ... . .
- f. Computation of Ailjuntmentu .'. . ..,. . .
- g. Sutliciency of Basic Rent and Mnpplemental llent ,
- h. Reut Differentia! . . . . . . .... . .. . . . ...
- i. Applicatinu of Drawiurn tuider Letter of Credit ..
l j. Rent for l'uit 2 Site and Canunun Facilitiva l'ndivided interest . .. . ,. . . SDT1ox 4 Net Lenae .. ..... .. . . . .. .. . . ... h vios 5 Return of the (*ndivided interent . . .. ... ... .
- a. Return of the l'ntlirided luterent. . .. . .....
- h. Disposition Servicem . . . . . . .
HECTtoN 6 Warranty of the LenMor. , . . . . .... .
- a. Qtdet Enjoyment . .. .. . . ...
- b. Disclaimer of Other Warrantien . . . .. . .
- c. Enforcement of certain Warranties. ,.
SecTtox 7 Liens. ... .. . .. . . .
-i ALPHA 3
CURRENT ENDING PAGE CON 0!TIONS ARE O K. THE NEXT PAGE : 001 00.00.00 l I
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1 l ii ..
-Pm H Et Tion s ' tiperation anel llaintenanefe: Capited Improvements. ..
- n. ilperation and 'Llaintenance . ' ., . .. . .
b.; lumpection . . . . . . . . . . . . . . . . . . . ...... .
- e. Capital linprovements. ...... ,,, ..s.. .... ...
- d. Repo rts . . . . . . . . . . . .. ................. ... .
- e. Title to Capital Improvements .. , , , . . ' . . . . ' . . . .
.l, '
- f. Furuling of the Coat of Capital linprovements -..
N E< Tins 9 Event of Loan: Deemed Lona Event . ... 4 .. . ..
- a. Darnaire or Lonn. .. ... ... . ...... ... .. ',
- b. Repair . . . . . . . . . . . . . . . . . . . . . . , . ..
- c. Payment af Casualty Value . ..... ... . ..
- d. Payment at 8pecial anualty Value . . . . . . . . .
- e. Requisition of I'ne ...... . .. .. ... . .
- f. Termination of Lease Term . . . . . .. ... . . . . ..
- r. Application af Paymenta on an Event of Luna. ..
- h. Application of Paymenta Nat Relating to an Event of .
Loan , ,. ., . . . . . . . . . . . . .
- i. Other Di* punitions . . .. .. ... ... .
8Ertiox 10 Innuranea. . .. . .. . . ... . . . ..
- a. Required innurance,, . . . . .
- b. Permit ted lunurance . . . . . . . . . . . . . . ... .
Hscvios 11 Rights to Annign or Suhlease . . . . . . . . . . .. . .... .
- a. Ansigmnent or Hubleaxe by the Lessee . . .. . ..
Y h.> Assignment by Lessor as Security for Lennor's Ohligationn ..... ... . . ... .... . SEcmos 12 - Lease Renewal . . ... ....... ...... . . . HerTios 13 Notices for Renewal or Purehase: Purchase Optionn: Deterruination of Fair alarket Value .. . ... .
- a. Expiration of Baaic Leane Tenn. . ... .
- h. Expiration of Renewal Term. . . . ... . .
- c. Purehane option at Expiration of the Leane Terin . .
- d. Purch a* of the Undiviiled Interenti Payment. Etc
- e. Determination nf Fair 31arket Value . . . . . .
- f. Durdensome Termination . . . , .. .
- g. Purchase option for Mignifleant Expenditure . .
- h. Acquisition of Aihlitional Capacity . .
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' P,Lg Sm ituN ' 14.' Optional Terrnipation . . . . . . . . . . . ,. .. .
- a. Terniinntiott Notice . . '. .. . .,.'.. .. .
- h. Eventa un the Teratination Date ' .. .. .. , ,
- e. Early Terniination Notice . . . . . , . . . , . . . . . . . .
Stetiiw 15 ' Events of Default . . . . . . . . . . . . . . . . . . . . . ... .. Setitos. 16 Remedies . , . .. ..... ...., .. ... ..
- a. Remedies. .... ... ... .. .... .. ........ .
- h. No Release . . . . ... .. ... ........ ..... ..
- c. Remedien ('innulative . . . . . ... ..... .. ....
- d. Exercin of Other Rights or Remedies , , . . . .. ..
Sctinfv 17 Notices . . c......,.. ........ ......... . Sn Tnis ; lo . Mnceennors and Asnisens. . ..... ... .. . .... 8 m TinN 19 Riititt to Perfortes for f.ehnee . . . N Us tinv :!O Additiornal t'ovenantn. . . .. .. .. .. Ha vin.N : 1 ' 4 3round Lease .. . . . . . . .... .. . SattuN :t:! Ainendments and Mineellaneniin . . . . ..
- a. Amendmenta in Writing, . .. , ..
- h. Survival . . . . . . . ..., .. ........ . ,
I' c. severahdity of Pterinian= - .. .. .. ......
- d. Tftic leane -. . . .. ....... ... ....... ..
- e. Original Leane . . . .. . .. . . ......... ..
- f. Governing Im . .. , .
. g. Headingo . . . . ...... . .. ....... . ...
- h. Concerning the owner Tntstee . . . . . ... .
- i. Lien of Leone Imlenture . ... ......... .. ..
- j. Counterpart Exceution . . . . . . . . . . . . . . . . . . , ..
APerwotr A ' Definitions . . . . . . . ... ... .... ..... . ..... .. Schedtde 1 Basie Rent Percentages Mehedule 2 Canualt.v Values Schedule 3 8pecial Casualty Values Nehedule 4 Modified 8pecist Casualty Values Schedule S Deneription of (*ndivided Interent ALPHA I-I
. CURRENT ENDING PAGE CONDP.10N5 ARE 0.K.
THE NEXT PAGE : 005.00.00 00
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-l FACILITY LEASE i Thia FACILITY LEASE. dated as of September 15.19A7 herween Tus Fiawr NAT osat. Bass ur Boston. a national banking association, not in its individual capacity, but soli'ly an Owner Trustee under a Trust l Agreement. dated as of September 15,1967, with Perry One Alpha Limited Partnership Ohe " Lessor"). and Onto Eotsox UOMPANT. an Ohio corporn-tion (the "Lew,").
W I T N E S S E T II : WHEREAs, the Lessor owns the Unitivided Inte ent: WHEuEAs, the Lessee de<iren to lease from too Lemmor the t'ndivi. led i Interent and to nubleune frotu the Lemmor the interest ist the Utiit 2 Site alul certain Conunon Facilities which are covered by the Uround Lea e. in each case on the terma and conditions set forth herciu: and WHEREAN, the Leanor is willinst to leane the Undivided Interest and to l subtense the aforementioned interent in the Unit 2 Mite and certain ronunon Facilities to the Lensee ou the terms and conditiona net furth herrim Now, THEREFoRE. in consideration of the preminen and of other good and valuable consideration, receipt and nutileiency of which are hereby acknowledged. the partien hereto agree as follows: SEertos 1. Defnitions. For purpose 1 hereof. capitalized terms used herein shall have the meanings asnigned to such terms in Appendix A hereto. Iteferences in this Facility Lease to sections. paragraphx and clannes are to sect ions, , paragraphs and claunes in this facility Lease indens otherwise indicated. ! HErrtos 2. Loose of Undivided interest and Subl *ast of Cnd 2 Sitr and \ Common Facilities Undivided Interest: Term: Personni Property. (n) Lense of Fudivided interest and $nblanx* of Unit 2 &I+ and O>mmon Facilition Cudivided lutornt. Upon the termn and subject to the cotulitions of this Facility Lease, the Lessor hereby leases to the Lesser. and the j Lensee hereby leases from the Lessor the Undivided Interest and the Lessor hereby subleases to the Lennee and the Lessee hereby nubleanen ALPHA l CURRENT ENDING PAGE CONDITIONS ARE O K. THE NEXT PAGE 006 00 00 00 1 1 1 i I l 1
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i 2 I from the' Lessor. 'the' Unit 2 Site and the Common Facilities Umlivi leil Interent.
. (b) Teren. The term of this Facility Lease shall begin on the d'insing D' ate and shall end on the last day of the Leane Tertn.
(c) Personal Property. It is the express intention of the Lessor and the
. Lessee that title to the Undivided Interent and every portion thereof is severed. and shall be and remain severed. from title to the real entate
! constituting the DVPS Hite..The Lessor and the Lessee intend'that the
!: 4 (fnitivideil Interent shall constitute perxonal property to the maximum extent permitted by Applicable Law. (d) Disciption.' The Undivided Interest in donerihed in Schedule n' hereto. The linit 2 Site in demerihed in Exhibit A to the (Iround Lenne dated an of September 15. 1987 between the Lesnee. as Irs =or. and the owner Truntee, an lexx**. The Conunon Facilities Umlivide i Interent is de crilied in Exhibit H to wuch fironud Leas.e. Section 3. Rent:.trijnstmonts to Rent. (al 'Busic Rent. The Lessee shall pay to the Lexsor, as haaie rent (herein referred to an. "Busic Rent) for the Undivided interrst, the , following amounta: I (i) on December 1,1987, an amount ettual to r og Facility coat for the period from, and including, the Cine.ing Date to. but excholing. December 1,19t<7, plus or minun the itent DitTerrntial: (ii) ou fune 1.1988 and on each Basic Rent Payment Date thereafter to, and including, June 1, 2017, an amount estual to the percentage of Facility Coat net forth opposite unch Danie Rent Pay-ment Date ou Schedule 1, phis or minus the Rent DitYerentiah and (iii) if the Lessee shall be entitled to, and shall. elect the Renewal l Term, on December 1. 2017 and on each Basie Rent Payment Date thereafter during the Renewal Term, an amount equal to one half of an amount determined by dividing the aggregate amount of all paymenth , of Bawie Rent payable with respect to the Basic Lease Term pursuant to clanne (ii) of this Section :l(a) (taking into account the amount of any Rent Dt!7erential and any adjustments pursuant to Section : thin )
! by (59).
. ALPHA l
l CURRENT ENDING PAGE CONDITIONS ARE 01 THE NEXT PAGE : 007.00 00 00 1 - l
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;l l . Payments made on December 't,19t'7 and on each Bamic Rent Payment l: Date shall be in satisfaction of the Lensee's obligation to pay Basie Rent for
! the six. month period ending on the tirat day of the umnth in which auch l- Banic Rent Payment Date nhall have occurred (or the period commencing with the Closing Date and ending on December 1.1987 in the case of the l: payment made on December 1,1987). If an interest payment on any Note R
u nhall be.due on a date other than December 1.1987 or a Basic Rent Payment Date, the Lessee shall pay Basic Rent on such date equal to much interest payment and much payment of Basic Rent shall be credited against L- ' - l the Basie Rent due on December 1,1987 or the Basic' Rent Payment Date
~
next succeeding the date that vueh additional Baie Rent shall have been ! paid, (b) Supp/no*ntal Rent. The Leance = hall pay the following amounts (herein referred to an "Nupplenu ntul R, nt"): ~
-(i) when due or, where no due date in specified, on tiemand, any amount (other _tlam Banie Hent. Casualty s'alue Special Casualty-Vahte and Stodified Special Casunity Value t which the Less** anmues the obligation to pay or agreen to pay to. or for the account of. the Lessor, the Owner Participant, any Partner. the Indenture Truster, the l Collateral Trust Truntee or any Inde!nnitee under this Facility Lease:
any other Transaction Document or any Collateral Trust Indenture: (ii) when due, any amount payable hereunder as Casualt.s Value. Special Casualty Value, or .\!odified Special Casually Value and an amount equal to any premium or prepayment penalty with respect to
' the Notes; (iii) on demand and in any event on the Basic Rent Payment Date next succeeding the date such amounta shall be due and payable hereinider to the extent permitted by Applicable Law, interest (com.
puted on the same basin as interest on the Noten in computed) at a rate per annam ettual to (A) the Overdue Interest Rate, on that portion of the payment of Baaic Rent or Supplemental Rent distributable purmu. ant to clause "first" of Section 5.1 or claume "uercul" of Section 13 of the Indenture (determined j,*ior to the computation of interest on overdue payments referred to in ei h elausen), and (B) the Penalty Rate, on the balance of any such pa sut of Basic Rent or Supplemen-tal Rent (including, without limitation, to the extent permitted by Applicable Law, interest payable pursuant to this clause tiiin not paid ALPHA CURRENT EN0!NG PAGE CON 0!TIONS ARE O K. THE NEXT PAGE : 008.00.00.00 - i i
U
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$ tete. Silod1J($7Yke$iST4 004 85f J 8 i. 5:50u19' Moo scaAfWf:ccc2H fx' Fmt C, :00 uco 57vte 5,t s m, i..e soo m wo i.. neo vi,u a JOS: Y38973 . PCN: 006.00.00.00 . ' S/N:- 6 ;! emo seison towat :s new ex inamassoo
_1~ i [ , l 4 when due (withont regaril to any period of grace) for any perio.1 for which the name nhall he overduch and (iv) a Management Fee of .066670'c of Facility Poit payable on each anniversary of the Cloning Date during the Lease Term. The Lennor shall have all rights, powers, and remedies provided for in . this' Facility Lease. at law in equity or otherwise, in the came of non-payinent of Baie Rent or Supplemental: Rent.
- (c) Form ur Payment. Snbject to Section ll(h), each payment of Reni under thin Facility Lease shall be made in immediately available I'mulu no-later than 1100 noon, local time at the place of receipt. on the date cach unch payment whall be due and payahle herennder and shall be paid either
( A) in the caxe of payments other than Excepted Paymenta, to the Lexxor 4 at its addrenn determined in accordance with Section 17. or at much other uddrena as the Len=or may direct by notice in writing to the Lemace, or ( B) in the came of Excepted Paymenta. o much Pernou an aball he entitled to receive auch payment at much addrena an unch Perwon tuay direct by nutiec in writing to the Lennee. If the date on which any payment of Rent in shic hereunder nhall not be a Businema Day, the Imyment otherwine due thereon l Shall be due and payable on the succeeding Duninesa Day, with the same force and etTect as if paid on the nominal date provided in this Facility Lease. (d) . adjustments to Rent far Charur in Tar Rntr.' Basie Rent and the schedules of Casualty Values. Special Cuuahy Vulnes ano . toon.
- 8pecial Cannalty Valnem attached hereto nhall he adjunted npward or downwaril in the manner met forth in paragraph (f) of thiv Section :1 if there i= any change (" Tax Hate Change") in the Code enacted intu law after the Cloning Date and prior to . '. 0 . which rexults in the marginal feileral income tax rate (" Tax Rate") applicable to corporations ditTering from the
! rate assumed to be applicable in the Pricing Annumptionn an in etreet on the l Cloning Date: provided, houverr. that any upward increase in Basie Rent L whall not cau=e the present value (discounted to the ('loming Date at the Dimeuunt Rate) of aggregate ud, justed Basic Rent paytnenta by the f.emmec over the Basic Lease Term exprenned as a percentage of Faeility i'ost to be more than 1.Gfi greater than the present value (dimeoumed to the t'loming , Date at the Discount Rate) of aggregate Basic Rent payments tealculated b in accordance with the Base File Rent) by the Leasee over the Basie 1. case Term expressed as a percentage of Facility Cost. ALPIIA I t ', CURRENT ENDING PAGE CONotTIONS' ARE 0.K. THE NEXT PAGE : 009.00 00 00 - l J
- . _ _ . - . . . _ _ _. __ _ _. ___-.___._________m_____ _ _.____._ _ _
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i k y d 1 i L . (e) Other .'idinutments to Rent. ' Basic Rent and the nehedulen of-Canualty Valuen.' Special Casualty Valuem and Modified Special Casualty ' L Values attached hereto nhall be adjusted (upward or downward) to pre-
- serve Net Economic Return (i) following any Supplemental Fiuaneing. (ii) . 'l if Transaction Expennen paid by the Lensor exceed the amount of Transac- '
-Q
. tion Expenses specified in Schedule 5 to the Participation Agreement an in effect on the Cloning Date or (iii) in connection with the insuaner of any E Fixed Rate Notes. Any adjustments pursuant to Section 3(d) 'nr thin Section age) (i) shall satisfy the provisions of Revenue Procedure 7~> 21.
Revenue Procedure 75-25. and any other applicable statutes regidationn. revenue procedures. revenue rulings or. technical information relenwn
, relating to the nuhjeet matter of such revenue procedures. (ii) nhall be made in a manner denigned to avoid application of Section 47th)(2) of the
- Code and any regniations therrumler or any other similar provi ion of Federal income tax law and othenvise nhall not canne any adverse eWert umler any Federal inenme tux inwn in effect at the time of auch adjnstment.-
(iiit shall not canne any adverse effect under current accounting standard = for leveraged leanen an provided in Statement of Financial Accounting Stamlariin No.13 and (ivi shall, to the extent possible and not inconsistent with the foregning, minimize the net present value cont of the Banie Rent tu - the Lenace to the extent that the foregoiug eriteria are met (auhjeet to the
- l requirements Section 3(f) hereof). The schedulen 'of Canualty Values.
Special Casualty Valuen and Modified Special Cannalty Values shall be appropriately adjusted to reflect any Indemnity Payment (as defined in Section 2(c)(1) of any Tax Indemnification Agreement) that the Lesare becomes required to pay and pays under the Tax Indemnitiention-Agreement. (f) Computation of .1djustments. I*pon the necurrence of an event requiring an adjustment to Banie Rent and the schedules of rannalty Values, Special Casualty Valuen and Modified Special Casualty Valuen attached hereto, pursuant to paragraph (d) or (e) of this Section 3. the Owner Participant nhall make the necennary computations amt furnish to the Lessee, the Loan Participant, the Lessor, the Indenture Trustee and any Collateral Trust Truntee the revised amountn and percentages, which amounts and percentages shall be implementeil upon the later of ( Al delivery of such amounts and percentages and (B) if the Letter of Fredit in in effect. 30 days after the delivery thereof, a' nd, in either cane. etYective a* of the date of occurrence of the event requiring such adjm tment anil shall ALPHA i I
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{ remain effective until changed in cimsequence of any verification procedure j met forth below or in conseynence of any event occurring thereafter r* ptir. in;r further adjnattaent pursuant to paragrapti (d) or (e) of thin Section 3. All adjustments pursuant to paragcaph (d) of thin Section 3 nhall be i made based upon the assumptions and in accordance with the procedures set forth in the following subparagraphs (f) through (viii): (i) The Owner Participant has prepared ( A) a base file (the
" Base File") which incorporates the Bane File Assumption < as in c Teet on the Cloning Date and (B) a pricing tile (the " Initial Pricimt File"t w hich incorporates the Pricing Anxumptions as in etTect on the rhisime Date.
(ii) The present table (iliscounted to the rim.ing Date ni the Discount Rate) of aggregate Ba** File Rent exprewed as a percentae, of Facility Cost is ei t the " Original Prement Value"). tili) I'pon any Tax Rate rimnge. the owner Participant shall create a file (the "Revined Base File") which ine >rporates the Ba e File Assumptions but reflect u the new Tax Raten for the perind subsequent to the etYecthe date of the Tax Rate change. Schedules of Basic Rent and debt amortization in the Revimeil Basr File for the period subsequent to much Tax Rate Chaug . = hall be reculeulated by the owner Participant utilizing an Optimal Structure tan de%erihed in unhparagraph (vi) of thia paragraph (f)). (iv) If the present value (discounted to the Closing Date ut the Discount Rate) of aggretrate Revised Bane File Rent payments by I.exaeo over the Baaic Lease Term expressed as a percentage of Facility Cont (the "Revimed Present Vahte") does not exceed the Original Prement Value by an amount in exeens of IEi of Facility Cost (the " Tax Rate Cap"), the components of Net Economic Return shall he those set forth in the Original Dame File. If the Revised Present Value execeda the Original Prement Value by more than the Tux Rate Cup, the Owner Participant shall adjuwt the components of Net Eco-nomic Return in the Base File (the " Adjusted Net Economic Return") sneh that the Revised Present Value (determined utilizing sneh Ad. justed Net Economic Return) does not exceed the Original Present j Value by more than the Tax Rate rap. In order to provide for more 1 than one Tax Rate Change, the mont eurrent Revised Base File shall he ALPHA I i I
- CURRENT ENDING PAGE CONDITIONS ARE O K. l THE NEXT PAGE : 01t.00 00 00 - l i
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-l 7
leemed to be the Base File for purp.mes of determining the rental adjuntment resulting from the next subsequent Tax Rate Chanea provided. however that the Tax Rate Cap shall always he mera. red from the Original Base File. (v) Adjustments to Basie Rent and the schedules of Casualty Valuen. Special Caanalty Yahien and Modified Special Casualty Valnes as a result of a Tax Rate Change (a) shall be made 40 as to preserve Net Economic Return or Adjusted Net Economic Return (whichever is applicable, after the determination described in subparaitniph livs ). (b) shall comply with Section 3(e) hereof, and (e) shall to the extent pouible and not inconsistent with elaunes (a) and (b) of thin unbparn-graph (v) (but wubject to the following assumptions and prnee inre o minimize the net present value cont of Basic Rent to the i.eure. In order to achieve the foregoing the Owner Participant nhall initially determine " optimized Baxie Rent" in accordance with thr proeminr., I ileseribed in thin subparagraph tv) amt subparagraphs (vil and tvii) below. In order to determine the Uplimized Banie Rent, the ow n-r Participant will prepare a pricing file (the " Preliminary optauized Rent Pricing File") which incorporates all of the assumptions con-l tained in the Initial Pricing File (or,if one or more Pricing Filew have been prepared nubsequent to the date of the Initial Pricing File, the Pricing File prepared in connection witt the next preceding Tax Rate Change) adjusted to reflect actual rent and debt amortization nehed-ules prior to the latest Tax Rate Change except that the interest rates to be applied ou the debt shall he the preliminary market interest rates on the Noten which shall be determined in the sole discretion of the l Lessee (the " Preliminary 3Iarket Interest Raten"). The principal amount of the Noten tanuumed outstanding in the period after the effective date of the Tax Rate ('hange (and the acheduled amortization of such Notes shall he recalculated in a manner (the " Optimal Debt Structure") no as to minimize the net present value (discounted at the resulting weight il ascio;e interest rute on the Notes) of the lia*ic l Rent paymenta b, the Lennee over the Basic Leane Term tutilizin:r th* Optimal Structure, ALPHA 1 I i CURRENT ENDING PAGE CONDITIONS aRE 0.K. THE NEXT PAGE : 012.00.00 00 i I k l l 1 i
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- mesmsoe l ~~t
~~
Y 6 (vil Au nued herein the term " Optimal 5tnteture" aludt mean Optimized Banic ltent or Revined Base File Rent which (A) preserves the Net Economic Return or Ad.inste.1 Net Economic Return (whichever in applicable after the determination described in subparagraph (iv)) but not any other economic return measure ned by the Owner Participant for other purpom. ! l (B) minimizes the net present value of (a) in the case of the ; Preliminary Optimized Rent Pricing File and the Pricing File, such Optimized Basic Rent discounted at the weighted userage interest rate associated with the Notes and (b) in the cane of the Revised Base File, the Revixed Base File Rent (discounted o, the t'lohing Date at the Diwcount Rate), ((') assumes there in no refunsling of the debt or chango in the amortization of outstanding debt which results in a chane" in the average life to matn'rity of the debt in tiw Pricing File or the Revised 8,0.e File twhicheser in applicable) of nnsre tim n is months from the average life to maturity of the ilebt in the Pricing File or the Recised Base File (whicheveris applicable) ut the time such debt was incorporated into the Pricing File or the Resised Base File (whichever is applicable), and (D) assumes that Basic Rent and Revised Base File Rent payments (a) in any calendar year, between the years [19n9) and [20151, do not differ from the rental payments in the innnediately preceding year by more than [IFil or (b) for any two eonaceutis e rent payment states between the years [1987) and {20173), do not exceed (ll.f>N of Facility Cost, proeided. Auum c. that the (II.5N constraint set forth in thin subparagraph (vit t Di t h s shall be adjusted upward in each period by an amount eiptal to the amount by which the actual interest rate on the Nuten in unch period exceedu [IlN per annum. (vii) The Owner Participant shall proviile the Le**-* uith a schedule which detailm the Optimal Debt Structure containeil in the Preliminary Optiinized Rent Pricing File. If for any reason the aetnal principal amount of the Noten or the amortization schedule of the l Noten differs from the Optimal Debt St ructure contained in the Preliminary Optimiz: Rent Pricing File or the actual interest rates on the Noten ditTer froni the Preliminary .\Iarket Interest Rates, then ALPilA _ CURRENT ENDING PAGE CONDITIONS ARE O K. THE NEXT PAGE - 013 00 00 00 - l
)
l
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- w : a n na : coa a sur we ... s.r uoo vnu a . JOS: Y38973 PCN: 013.00.00.00 SIN: 8
. caso scison - some or nr* vaan : trumessoo
+.
j k.. _ 1: L 9 the Preliminary Optimized itent Pricing FiS will be atUunted he the l Owner Participant in an additional file (th'e -Revised Optimized Rent Pricing File") to reflect the actual principal amount of the Notes. the actual amortiratinu nehedule of the Notes, the actualinterent raten on such Notes and Bamie Rent shall be determined so as to preserve Net Economie Return or Adjusted Net Econornie Return (whichever is . applicable) and to the extent possible and not inconsistent with the foregoing, minimize the net present vaine of Rent.' The Owner Partici-pant shall une its best enorts, in no adjunting Basic Rent, to natiuty the constraints set forth in subparagntph (vi)(D). To the extent'a Preliminary Optimized Rent' Pricing File contains the actual priucipal sinuunt of the Notes presumed outistandirig, the actunt schedule debt - amortization of the .% ten and the actual interest' rate on the Noten, it shall be deemed to be a Revised Optimized Rent Pricing File. 1viii) If the principal amount of the Noten or the amortiza' inn
*ehedule of much Nuten diWors from such principal aniount or th..
amortization achedule in the Preliminary Optimized Rent Pncim: Fil*. the Lenner alud! be permitted to refiuul the Nuten and oth-rwi
- reoptirnize and releverage in acconlance with the Participation
.\greement.
The revised amounts and percentages furnished hv the Owner Partici-pant purntiant to the first paragraph of this paragraph (f) shall be subject to verification (at the Lessee's request) by the Owner Participants nation. ally recognized independent public accountants (which may rely, if nu instructed by the Owner Participant, upon information funiished to theni by the nationally recognized independent pnblic accountants of each Part-ner without independently confirming the neeurney of such infonnation) in l which case such accountants of the Owner Participant nhall either I A) confinn to the Lessee in writing that such revised amounts were computed on a basis consistent with (1) in the came of adjustments pursuant to Section 3(d) hereof the aanmptionn amt procedures net forth in subpara. graphs (i) through (viii) of this paragraph (f) and (2) in the came of i adjustments pmsuant to Section 3(e) hereof, the original calculation. or (D) compute and provide to the Le= nee, the Lessor, the Owner Participant. ; the Loan Participant. the Indenture' Trustee and any Collateral Tni t .' Trustre revined amounts and percentages which are emnputeil on sneh a hanis, The revined amounts arni percentages. as no confirmed of computed if applicable shall he conclusive and binding upon the Lessee the Lewor the ALPIIA i k 1 CURRENT ENDING PAGE CONDITIONS 'ARE O K. THE NEXT PACE : 014.00.00.00 I I 6
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$ty e suBA.J '$TvLE335f vLIO04 857 ) ** $1830M tP400 5cearcet0C0027t fXf amt.
see J a.., C. 130 MCm 1?Yif - d ma :oo o au 4.n na uno. vmu a ' Joe: Y38973 PCN: 014.00.0040 stM: 5-
. '" .. . miotenow> nowne or new voa - t:mesmoc L -
l 10 l Owner Participant, the Loan Participant, the Isidentitre Tritatee und miy
- Collateral Trust Trustee. The cout of any auch verification shall be borne by
' the Lessee tudenn auch accountants shall regtdre a downward adjustment to the revised amounts and percentages originally provided by the owner -
Participant which in greater than 10Fo of the amount of the adjustment to Basic Rent no provided, in which case such cost shall be paid by the Owner Participant, Each adjustinent pursuant to paragraph (d) or (e) of this Section 3 may, but need not (unicas requested by the Lensee, the Lexxor nr -
. the Owner Participant), he evidenced by the execution and delivery of a
~
supplement to this Facility Lease in form and substance satisfactory to the Lessee and the Owner Participant. but shall he etYeetive as prosided herein without regard to the date on which such supplement to this Facility Lea e is no excented and delivere L (g) suficisorey of Baar Rrut urud Supplemental R nt. Notwith>tandim:
' any other provision of thin Facility Lease, any hther Transaction Dnemnoot l nr any Financing Docinnent (i) the amount of Basie Hent pnychte un December 1,1M and on each Baaic Rent Payment Date shall lo at Irnst eipial to the aggregate amount of principal presnium. if any, and accrued -
interent then payable (or payable on or before the last day of the 'mnuth in which *neh llanie Rent' Payment Date whall-have occurred) on all Nuten then outstanding and (ii) each payment of Casualty Valne and Special Cannalty Value shall in no event be tenn (when added to all other amounta required to.he paid by the Lessee under thin Facility Lease in respect of any Event of Loan or Deemed Loso Event or termination of this Facility Lease)- than an amount sufficient. as of the date of payment, to pay in full the principal of, and premium, if any, and interent on, all Notes Outstanding vii and as of such date of payment (taking into necount any assumption of the Noten by the Leasee).
.'(h) Rent .DifmntioI. Each installment of Basic' Rent shall be in.
l creased or decreased, as the case may be, by the Rent Differential. For purposes hereof, the term "Rint Di.tr,rantinI"whall mean, an of December 1. 19e7 or any Basic Rent Payment Date during any period in which Note are Outstanding which hear interent at a variable rate. the duYerence betw*u (i) the aggregate ammmt ofinterent due and payable nu such date nn neh Notes, and (ii) the aggregate amount of interent that wouhl have been due
. and payable on such date on such Notes if such Noten had ut all tiines l during the relevant period borne interent at the interest rate assinned in the Pricing Annumptions then in effect. If. as of Deecmher 1. IM on any Danie ALPHA CURRENT ENDING PAGE CONDITIONS ARE 0 K. THE NEXT PAGE : 015.00.00 00 l _
i L.
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~~ ,
11 1 Rent Payment Date. (M the amount determined in accordance with clause y L 4i) of the immediately preceding mentence shall be greater than the amount
' determined in accordance with elaume (ii) of such sentence, the amount of Baaic Rent due on such date shall be increased by the Rent Differential, . ,
and (B).the amount determined in accordance with such clauhe (ii) nhall exceed the amount determined in accordance with such claume (i), the ' amount of Basic Rent due on such date shall he decreased by the Rent-Differential. (i) .4pplication of Drmrings undor Letterof Credit. Drawingn under the Letter of ('redit by any Beneficiary shall be deemed to be in satistnetion of the Lessee's obligation to pay the Equity Portion of Rent to the extent of such drawing but if a drawing in made by reason of an Event of Defanit. wuch drawing shall not enre suel Event of Default, and shall be applied a. follows: (M in the case of a drawing by reason of a Deemed Luns Event or sinnilar event, to the 8pecial Cannalty Value payable under 8eetion 9( lh (lb in the ease _of a drawing by reason of an Event of Loxa or similar event, to the Casnalty Value payable under Section 9(el;' (C) in the came of a drawing by reason of a "Speciallease Er,ut" as defined in the Initial Letter of Credit (or an anakiguus event an described in any subsequent Letter of Credit), or the occurrence of a
" Dole of Early Termination" an defined in the initini 1,etter of Credit.'
(or an analogoun event as desceribed in any unbsequent Letter of
- Credit) to the liquidated damages payable umler Section ItHa)(th and (D) in the case of an "OP Parflul Drn,c"an defined in the luitial Letter of Credit (or an analogous event au lenceribed in any subne.
quent Letter of Credit) by reason of an Event of Detaidt, to the Rent obligation of the Lesmee which triggered nueh Event of Default,in aneh order and amounts as the Owner Participant may elect. (J) Rent for Unit 2 Site and l'onunon Facilities Undivided intor*xt. During the term of this Facility Lease. the Lessee nhall pay to the Lessor l the amount due as Rent under Section 3.1 of the Ground Lease, which amount shall be offset against the amount dne by the Lessor under maid Section 3.L ALPHA i 1 CURRENT ENDING PAGE CONDITIONS ARE INCONSISTENT w!TH THE NEXT PAGE : OR 00.00.00 - ' I I
)
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! i L 12 I SErrtuN 4. .Y*'t lsua. This Facility Lease (as originally executed and an moddied. anpple. g mented and amended from time to time) is a net lease and the Lennee hereby acknowledged and agrees that the Lessee's obligation to pay all Rent hereunder, and the rights of the Lennor in and to such Rent, shall be absolute, unconditional and irrevocable wnd shall not be affected by any ciremustaneen of any character including, without limitation. (i) any set. otT. abatetnent. counterelaitn. huspension recoupment, reduction, rescinion. defense or other right or claim which the Leswee may have against the Lessor, the Owner Participant, any Partner. the Indenture Trmter, the ('ollateral Trust Trustee. any != suing Bank. any Loan Participant the Operating Agent, any CA PCO Company, nny vendor or manufacturer of any equipiaent or axneth inelnded in the Usulivided Interext. l*tur 2, any Capital Improvement, the BVPS Site, BVPS. the Connnon Facilitien Undivhl..d Interest, the Common Facilitien, the l' nit 2 Site or any part of any thrreof, or any other Person for any reason whatsoever, tii) any defect in or rail ..e of the title, merchantability. condition, design, compliane with aperitica-tioun, uperation or titnesa for une of all or any part of the Utultvided q Interest, Unit 2, any Capital Improvetnent,14VPS Site. the t'ouunon Facilities Undivided Intereht, the Common facilities. the Unit 2 Site or BVPS. (iii) any damage to, or removal, uhamhmment, decornmi -ioning, shutdown, salvage, scrapping, requisition. taking, conde. .mation. lo s. theft or destruction of all or any part of the Undivided Interrat. I' nit 2. any e Capital Impro . aent, the BVPS Site the Conunon Facilities Undhide.1 Interest, the Common Facilities, the Unit 2 Site or the BVPS. or any interference, ituerruption or eenaation in the use or ponsession thereof or of the Undividyd interest by the Lenace or by any other Person (including. hnt l withaal UmiHtion. the Operating Agent or an3 CAPCO Company) for any reason whatsoever or of whatever duration (iv) any restriction prevention or enrrailment of or interference with any une, of all or any part of the . Undivided huerrat, Unit 2, any Capital Improvemvve, the BVPS site, the e Common Facilities Undivided Interest. the Corn non Facilities the Unit 2 Site or BVPS (v) any insoleency. hankniptcy reorganization or similar proceeding by or against the Lenwe, the Lemmor, the Owner Participant, n'ay Partner, the Indenture Trustee, the Collateral Trust Truxtee, any Lena Participant. the Operating Agent. any t'APCO Company, any issmug Bauk or any other Person. (vi) the invalidity. illegidity or unwnforecubility of ti.is Facility Leane, any other Transaction Doemnent, any Financing Docum. nt. ALPHA i 1 CURRENT ENDING PAGE CONDITIONS ARE OA THE NEXT PAGE : 017 00.00.00 - l _ _ _ _ _ _-_ O
, ~sumus s m .rso me 5 wtuia.snte vu vus se t eaccmasca awu sa:ata .pcia t.E *EED !*E 3. ins- d 7 2115 5tys lis0A* p tSMIMfvLt004 9tf J Ae lisDUA9 ;P!a01Ca1.TCHsTYo000179 ta? Fa.' L.c ae C. 100 M00 $mE see to **. oe not ats %nt ne uoo. n t a JOB: Y38973 PCfJ: 017.00.00.00 SIN: 4 CHfC (W1CN Bowhf 0F Nf* MAK f 2Mitte$500 13 the CAPCO Agreernents. the .\laterial Project Agreements. the fleimburse-ment Agreement, or any other inntriunent referred to herein or therein or auy other infirmity herein or therein or any lack of right, power or authority of the Lessor, the Lessee, the Owner Participant, any Partner, the Inden-ture Trustee, the Collateral Trust Trustee, any Loan Participant. any Issuing Bank or any other Person to enter into this Facility Leawe any other Transaction Doenment, any Financing Doenment, the CAPro Agn e.
ments or the Reimhnenernent Agreement or to perform the obligations thereunder or the transactions enntemplated thereby or any doctrine of force majeure, impossibility, frustration, failure of consideration. or any similar legal or equituhle doctrine that the LeuceN obligation to pa3 Rent is eseused becaundhe Leuee han not received or will not receive the benefit for which the Leuee bargained. it neing the mtent of the Leuee to aunme nH rinks from all canweg w halmoever that the Lew.ee doen not recche wwh benefit. (vii) the breach or failury of any warrunty or representation mmle in thin Facility Lenae or any other Transaction Doemnent or any Fimmeinir Document or the Iteituburnement Agreement by the Lensor, the Owner Participant, any Partner. the ludenture Trnstee, the Collateral Trunt Trnatee. any Loan Participant, any luning Bank or any other Person. (viiin any uniendment or other change of, or any ansigmnent of rights under, thin Facility Leame, any other Transaction Doemnent. any Financing Doerunent any Alaterial f roject Agreement or the CAPCO Agreements, orany waiver, action or inaction under or in respect of this Facility Lease. any other Transaction Doenment. any Financing Doenruent, any Material Pro.ieet Agreement or the CAPCO A Freements. or uny excreine or non.cxereine of any right or remedy under thin Facility Leane. any other Transaction Document, any Financing Doetunent. the .\laterial Project Agreement %. the Reunbursement Agreement or the CAPCO Agreements. including uithunt limi t ation, the exercise of any foreclomore or other remedy under the Indenture, the Collateral Trust Indenture or this Facility Leme, or the
- ale of Unit 2. any Capital Improvement, the Undivided Interest, the Comnmn Facilities Undivided Interest, the Common Facilitin. the l' nit 2 site. the BVP8 Site or BVPS.or any part thereof or any interest therein, or (ix i any other circumstance or happening whatwoever whether or not ximilar to any of the foregoing. The Leuce acknowledges that by conveying the leau-hohl estate created by trO Facility Lease to the Leu.ee and by putting the Lenee in possession of the Undivided Interest amt anhleasing to the Lemace l the Unit 2 Site and the Common Facihties Undivided Interent. the Lemaur has performed all of the Leuor's obligations under and in respect ot' thin ALPIIA k
CURRENT ENDING PAGE CONDITIONS ARE 0x THE NEXT PAGE : 0 t 8.00.00. 00 - I 1 l l l
, M Sa arernee 'apet i. .um WAR W$ Mt PPCD*E4EW 236JC9s? $18CJalJ 'C(A E 4E PAM4 E AE, 4dde f' %#
Stv e $;3D,A.J ($'viESiSTRE00 gif J F4 8:$Was Pe00 SCsatWT::oc:64 tu? Fast C 100 asoc $?v s g w F.n naa: er ma n o.m s.o us oc wu a ,108: Y38973 PCR 018.00.00.C0 S/N: 5 a.co conos sawne or nem vomit caeramo 14 Facility Leuar, except the covenant contained in .section 6(a). The f.e%.*e hereby waiven, to the extent perniitted by Applicable Law, any and all rights which it may now have or which at any time hereafter may be conferred upon it, by statute or otherwise, to terminate, cancel. quit or surrender this Facility Lease or to et?ect or claim any diminution or reduction of Rent payable by the Lessee hereunder, except in accordance with the expreu termn hereof. If for any reason whatsoever thin Facility Lease shall be terminated in whole or in part by operation of law or otherwine. -xcept an
- specifically provided herein. the Lennee nonetheleu agrees to pay to the Lessor or other Person entitled thereto un mnount equal to each instalinwnt ot' Banie Rent and all Suppleniental Rent at the time ntwh Payment wouki have become due and payable in accordance w nh the tertua hereof had thin Facility Lenne not been terminated in w hole or in part. Each payment of Rent unnie by the Leure hereunder whall h. Enal and the Leuer mhall not week or have any right to recover all or any part of such payment from the Lenor or any other Person for any reason what o-ever. All covenants. agreementa anti undertaking of the Lewee heroin shall he performed at its cost. expenne and ri k unicu expreuly otherwise stated. Nothing in this Section 4 or elsewhere ahall be construed on a gm reaty by & Ln.eNy nelad vahae iw the (butided Interent or as a guaranty of the Noten or any Bonds.
sr.crtus 3. Return ol tio l'ndreided into ent. (a) Return of the l'ndoerd.d interest. l'nlenn the Lenee han theretutore acquired the l'tulivided Interent as provided herein, on the Lene Termina. tion Date, the Leuce will (1) nurrender pouenion of the Undividal Interest to the Lessor (or to a Person specified by the Leuor to the Leuee in writing not leu than 6 months prior to the Lene Termination Date). CD cause the Lewor or such other Pernot to have full rights u a " Transferee' under, and as defined in, the Operating Agreement, and a CAPCO Partici. pant and (3) furnish to the Lesnor: (i) copies certified by a senior ottieer of the Lenee of all Governmental Action (including. without limitation. appropriate amendmenth to the Licennei necewary to effect much surrender und receipt of poneuion and permitting the Lenor and the i la ne r Participant (without the Lenor, the Owner Participut.t or any Partner being required to change its hunineu or corporate or partnership tructure or otherwine to suffer any real or potential adverse etYeet on its humineu or that of ith Affiliaten an a reunit of such surrender and reecipt of poneuion ALPl!A CUPRENT ENDING PAGE CONDITIONS ARE INCCN$lSTENT WITH THE NEXT PAGE : 019 00 00.00 - _- _ - - - - . - - - _ - _ - - - - - - - - - - - - - - - - - - ~ - - ~ - - - " ~ ~
mn= - - - .
- M e ,n ,nes *, awu=9 . . eam das W5 . Jct L P900W499H':hooW 5:5LA'J PAGER EXEJPMER f(E. 3 ko-47 +
$n e; Hs0# t <sfy'.t?.$7H **04 857 J . 8+ lisouAt aco scRAfc.ottacco;7s rar 4 -9 amt. L.ecaw C. 100 Mco STytt "
su a s.* == too sao w.: ua uoo vm e JOB: Y38973 PCN: 019.00.00.00 SIN: 4 QHIO EDisca in%NE or Nfw v0aK ' t212n2s3500 i
- 1 i
f i
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; , J S '
r ~ 15 Y or much Person to poswews the t'ndivided Interent with or withoitt the continued involvement of the Leuee, which Goverrunental Action shall be in full force and effect: and (ii) an epinion of counsel experienced with .N'HC and other nuclear and utility matt *rs reasonably r+ satisfactory to the Owner Participant to the effect that.(A) the Lessee ha obtained all Governmental Action and action under t'u; Operating Agreement necennarf to effect anch surrender by the Lessee and reevipi. of ponnennion by the Lensor (or by the Person so specified hp the Lessor) of the (?ndivided Interest without the
' essor, the Owner Participant or any Partner being rhuirvd to chance its business, or corporute or partnership structure or v)eNip.e to 4utNr any real or potential adverse effect on its business or the of its AtfD'aten as a result of nuch surrender and receipt of possession and withot.; regard to the
' continned involvernent of the Lessee. - ( B) the Leswr (or the Pe rman specitled by the Lennor) is a " Transferee" under. and an defin-d '.n. the Operating Agreement with respect to the' tIndividei tuterest and is a PAPCO Participant and (U) such Mvernmental Action in in full force and atfeet amt not unb.ieet to anyjudicial or adrninistratr e context. challenge or review. At the time of .<uch return the Lessee shall pay or have pabt all f
ammmtx due and payable, or to become due and payable. by it ander the
, , Operating Agreement and each other .\laterial Project Aare ment. allnenble
- t nr chargeable (whether or not payable during nr aftEr the J.'euw Terno to j the t'ndivided Internt />r Cornmon Facilitien lindivided Interest in respect 3
> t of any period or periods ending on or prior to the Lease Termina: ion Date
! a(inchiding, but without limitation. all amounta payable with respect to any nd all Capital irnprovementa to l' nit 2 or the IWPS Sitr approved or authorized (without the concurrence of the Owner Participants prior to the end of the Lease Terta, whdher or not implementation thereof has heeti completed on or prior to the Lease Termination Date). and the 1.in divided
~
v Interent whall be free and clear of all Liena tother than Perniitted Lien
- described in clauses (i), (v) (other than those for which arrangement for
! the payment thetrof satisfactory to the Lennor and the Owner Participant have not been made ar.d thnae arising by, through or under the Lessee alone). (vi) (other than Indenture Trustee % Liens). (vii) (other than those .
arising by, through or ander the Leswee alone). (viii) (other than as h eforesaid), (ix), (x) a.at (x3) of the definition of much ten.4) and in the I q
- condition and state of wpair eripiired by Section 4. In the event that on or '
/- ,
prior to the Lease Ternuation Date ther.t shall have occurred a defanit by aay " Participant" (other than the [.useep under the Operating Astreement an,I such default shall not hary been eured by the defaulting " Participant. ' ALPl!A B CURRENT ENDING PAGE CONDITIONS ARE O K. YkF '4 EXT PAGE : 020.00.00 00 i - i - l i ( l l l' l l t _
h,'
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4: M - Swur :amrand %eewttme 3.,tsa var vv5- se i F#CDi8GTW :?+0r'*w l;$0.aiJ pacgt get PEE
- fst 3. M.n , n4 5tyv $13D#1. 41TYit$5tvLE204 est J - 8de sit 0uae<P900 sc2aftmtic0cci?5 fx? F eet. Lc tee C too neco 5?vtg
. set a sm iue loco amats ' int me vooJuant n JOS: Y38973 iCN: 020.00.00.00 SIN: 4 L- 00Wht y artArVORK CM10 EDl50N 1 2:21924H00 l
Di' then (i) the LeAnee ' agrees to indemnify and hold the Lexxor land each successor, assign und . transferee .thereof) harmlena aguiuxt any 'and all obligationsLunder the Operating Agreetuent and each Material Project Agreenient with respect to contributions or partuents required to be made thereby as a result of such default and (ii) the Lexuor (and each nuecero or. assign and transferee thereof) agrees to reimburne the Lessee for all amounts paid by the Lennee pursuant to the foregoing claume (i) to the extent, but only to the extent, that the Lemsor (or much successor. amaign or transferee) aball have actually received proc (eds from auch ih faultine
" Participant" or from the other non defaulting " Participants" (other thun the Lennee) an a~ result of much default and. to the extent the Lenaor per vueh successor asxign or traunferee) shall base received much proceed =. the amount to be reimborwed to the Lenwee pursuant to thim clanne tiil whall inehade interea.t.'at the Prinni Rate' frnm the date of any receipt nf she proceeds dexerihed above throturh the date of reimbursement nr uch ~
umnunt purnoant to thin claus.e tiin tb) Dignvition .6rcach The Lessee a:rrr*= that if it doen uut exercise - H ' ita optinn to renew or purebase au provided in Meetion= 12 amt 13 respectively, then shari.nr the .laat thirty i.ix ninnths of the Lease Term. the f.ennee will fidly ennperate with the Lemmor in connection with the Lemnori etforts to lease or dinpone of th'e Utulivided Interest including using the Lennee% reannnable efforta to lease or dispone of the Undivided Interest. The Lensor agreen to reimborne the Lesmee for reasonable out of pneket costs ami exp+nses of 'the Leo.ce incurred at the requent of the Lessor or the Owner Participant in connection with such cooperation and such etYorts, but only to the extent of proceeds actually received by the Lessor. NEvTinN ti.- Warrantrj of the Lessor. I (a) Quiet Enjoyment. The Lessor warrants that unless an Event of Default has occurred and is continuing the Lessee's use and possessio'n of Unit 2 and the Common Facilities, including the Undivided Interent, the Common Facilities Undivided Interent and the Unit 2 Site, in acenedance with the terms of the Transaction Documents shall not be interrupted by the Lennor or any Person claiming by, through or under the Lesnor. and their respective successors aml ansigns. (b) Dise/uim,r of Other Warrunties. The warranty net forth in section 43(a) in in lieu of all other marranties of the Leusor or the alwner Partiei. ALPIIA CURRENT ENDING PAGE CONDtTIONS ARE h. THE NEXT PAGE : 02L00.00 00 - I _ _ . . _ . _ _ _ _ _ _ . _ .- . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ' ' - - ~ -
~
, imens so ,e .:n
.we %en t,.w. un .vs re 6 mew.nca : owe su:.au puan gn 84su r e 3. w. s n .s si,, sisesestnesasinsoos est J w suaunwoo scutcetecooits rc re t car t tea uco s we Sag 14 F'ee tatt 100 points. Mest asait um v at n JOB: Y38913 PCN: 021.00.00.00 Sir:: 4 ceco eatsca toww s we e euwsuo
_I 17 pant, whether wr tien. oral or irnplied, with respect to thin Facility Lea e. Unit 2. any Capital Ituprovement. the Undivided Interest. the Cononon Facilities Undivided interest. the Common Facilities the Unit 2 Site. BVPS. or the BVPS Hite. As arnong the Owner Participant, the Loan Participants. the Indentare Trustee, the Collateral Trust Truntee, the Lessor and the Lessee, execuuon by the Lennee of this Facility Lease shall l be conchisive proof of the emnpliance of Unit 2 (including any Capital Irnprovernent) and the Undivided interest with all reituirenients of this Ft.cility Lease. and the Lessee ecknowledgen und agreen that (i) NEITHER THE LESSOR NOR THE OWNER PARTICIPANT IS A MANUFACTURER OR A DEALER IN PROPERTY OF SUCII KIND. (ii) THE LESSOR LEASES AND TIIE LESSEE TAKES THE UNDI. VIDED INTEREST. AND SIIALL TAKE EACH CAPITAL (MPROVE. MENT AND ANY PART THEREOF. AND (iii) THE LESSOR SUDLEASES AND T!!E LESSEE TAKES TIIE UNIT I SITE AND THE COMMON FACILITIES PNDIVIDED INTEREST AS 18 AND WilERE 18. WITil ALL FAULTS and neither the Le o.or nor the owner Participant shall be deemed to have made. and THE LES8oit AND TH E OWNElt PARTic! PANT EACH HEREBY D18CLADiS. ANY OTHER REPRESENTATION OR WARRANTY. EITHER EXPRESS ott DI. PLIED. AS TO ANY MATTER WIL4TSOEVER. INCLi'DINO. 41Til. l OUT LD!!TATION. Tile DESIGN OR CONDITION OF UNIT 2. ANY CAPITAL IMPROVEMENT. THE UNDIVIDED INTEREST. TIIE l CILITIES. COMMON THEFACILITIES UNIT 2 SITE. THE UNDIVIDED BVPS SITE OR INTEREST. SVPS OR ANY Tile COM'.40N FA. PART THEREOF THE MERCHANTABILITY Ti!EREOF OR Tl!E J FITNESS THEREOF FOR ANY PARTICULAR PURPOSE. TITLE TO UNIT 2. ANY CAPITAL DIPROVEMENT. THE UNDIVIDED INTER. i EST. THE BVP5 81TE OR THE BVPS OR ANY PART THEREOF. Tile l QUALITY OF THE MATERIAL OR WORKMANSHIP TIIEREOF OR - CONFORMITY THEREOF TO SPECIFICATIONS. FREEDOM FROM PATENT 0R TRADEMARK INFRINGEMENT OR TIIE ABSENCE OF i ANY LATENT OR OTIIER DEFECTS. WHETHER OR NOT DISCOV. I ERABLE. NOR SHALL THE LESSOR OR THE OWNER PARTICI. ' PANT BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL - DAMAGE 8 (INCLUDING LIABILITY IN TORT. STRICT OR OTHEft. ! WISE). it being agreed that au such risks, an among the owner Partici. pant, the Loan Participants. the Collateral Trust Truster. the Indenture Trua. tee, the Lessor and the Lessee, are to be borne by the L. nee. The ALPilA i CURRENT ENDING PAGE CONDITIONS ARE O K. THE NEXT PAGE 022 00 00 00 l l
4 W S:*ae .%seysars 7.weetyg 5 534, 441 W1 - ye . P8 con %23CM *06025W $15LAU . PACERS tE'PtGEp f t1 , 5 iec ,1 n s*
- Str#: ~515oaa.2t1?vLt5ilfvLt30s eif J . 7de S2souarreoo scaArcvT cootts Txt' Fmt. Lnss C 100 ' saco str.E .'
sa :s m. ine nco saan wo ine s7oo von n - Joe: Y38973 - : PCN: 022,00.00.00 S /N: .4
. .. os.so tenscu sont v new vsn - tumussoo
.k 1 18
, provinionn of thin Section fi(b) have been negotiated and, except to the.
extent otherwine *xprenuly provided in Section G(a), the foregoing provi-
. sionx are intended to be a complete exclusion and negation of any represen-tations ~ or warrantien by the. Lennor, the Owner Participant, the Loan -
Participants, the Co: lateral Trust Trustee or the Indenture Truntee, expresa l or implied, with respect to Unit 2 (including any Capital improvement L the Undivided Intecent, the Common Facilities Undivided Interest. the roen-
.l~ mon Facilities BVP8 or eth BVPS Site that may arine pursuant to any law now or hereafter in effect, or otherwise.
, (et Rnforcerns nl of ('ertain tVarranties. The Lensor ensthouixt:n t ht' Lennee (directly or through agenta, including the Operating Agent), at the LenneeV expenne, to axxert for the Lesnoin ' account, during the Lea *e
' Term, all of the I,ennoin rights tif any) under any applicable warranty and any "ther claisun (under thin Facility Len*e or any Purchase D*mnenti that the Lennee.nr the Leant may have neninnt any vendor or nmunfactnrer with respet't 1H Unit *.# tifiehnlitig utly Cilpital intpf'Ovelne!!!). the Coininnie Fucilitien. the Unnunon Pacilitien Undivided luterent nr the Unitivided interent. amt the Lemmor agreen to coop rate, at the Lennee'n expenn*. with the Lennee amt the Opernting Agent in an=erting much rights. Any amount receivnble (without regard to any right of netutY ur other nimilar right of any Pernon against the Lennee) by ths LenneeN payment under any much warranty or other clairn againnt any vendor or manufacturer (nr. if much warranty or claim relates to the Undivided Interent and the Retained Assets, the portion of auch received amount appropriately allocable to the Undivided Interest) shall be applied in accordance with Section 9t g) th >
and (i). 8Errtos 1. Idens. The' Lennee will not directly or indirectly create, invur, annume or permit to exint any Lien except Permitted Lienn on or with respect to trie l Uudivided laterent, the property purported to he covered by the firound Lease, or linit 2. the Lennor% title thereto or any interent of the Lennor or Lessee therein (and the Lennee will promptly, at its own expenne. take auch action as may be neeennary duly to discharFe any auch Lien, except Permitted Liens). ALPIIA L r CURRENT ENDING PAGE CONDITIONS ARE OA THE NEXT PAGE : 023000040 - i I
r kK +
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,.g. m so-.e.. men u.a . rmwum 3.e m vus. x4 . recx,now new nstat.: e c.4a sir.acattext_ 4.; .e7 - 4:4s Sn.t sisoamvttsn acosast ' se sisovawto scuramces tar r.e. u,o e no isoo sivte s e is r , um :oc pa
- 4. am.: arm voo. vna e JOS: Y34973 - PCN: 023.00.00.00 SIN: 4 cmo crison ecwat or new vcoi cumenoo
_;u ~ .yj L. l< 19 4 8genos 6. Uperettion and Maintrnaum Capital linprovernentt (a) Operatiem and Maintenance, The Lennee will cause the Operating Agent to (A) maintain Unit 2 and the Commou Facilitien in unch condition that (* nit 2 will have the capacity and functional ability to perform. on a continuing basia (ordinary wear and tear excepted), in normal com nercial
.c-
. l designed.
operation, the functions and nuhstantially at the ratings for which it wan (B) operate, service, maintain and repair l' nit 2 and the Common Facilities and replace all necessary or useful parts and components thereof so that the condition and operating etficiency will 'he maintained and ~ preserved. ordinary wear and tear excepted. in all material respectn in '. accordance with (1) Prudent Utility Practiev for items of similar nize and nature. (2) such operating standards as shall be required to take advantage of and enforce all available warrantier and (3) the terms and conditions of
! all insuraner poliefen maintained in effect at any time with renpect thereto.
d') use, ponen, operate and maintain ITnit 2 and the Common Facilities in l compliance with all material applicable Governmental Actions (inehulinst the Licensel ascetine BVim or Unit 2 or the Connnon Facilitiew ur the use, pn=xculon, operation and maintenance thereof and (D) otherwise net in l accordance with the Operating Agreement. The Lessee will comply with all itn obligations under Applicable Law affecting linit 2. the l'intivided Interest, the Common Facilitien Undivided Interent. the Common Facilities. l the (* nit 2 Site. BVPS. and the BVPS site, and the une, operation and
-maintenance thereof. The Lennee agreen to (i) exereine its rights urnier the Operating Agreement no that there will always he an Operating Airent for
. ! BVPS and (ii) maintain in full force and effect a license from the .N'RC adequate for it to possess the l*ndivided Interest under the circumstances l contemplated by the Operating Agreement. The Lessor shall not he obliged in any way to maintain, alter, repair, rebuild or replace Unit 2. any Capital Improvement, the 1*ndivided Interest, the Common Facilitien. the Conanon Facilities Undirided Interent or any part thereof, or, except an provided in l Section d(f), to pay the cont of alteration, rebuilding, replacement repair pr maintenance of (* nit 2. any Capital Improvement or the Undivided Interent or any part thereof, and the Lessee expressly waives the right to perform
. any such action at the expense of the Lenor pursuant to any law at any time in effect.
(h). Insperlion. 'The Lenxor the Owner Participant. the Indenture Trustre and the Collateral Trust Trustee (or their respective authorized representatives with appropriate seenrity clearance,if necessary) shall have ALPIIA CURRENT ENDING PAGE CONDITIONS ARE OX THE NEXT PAGE : 024.00.00 00 - 1 1
=._._._.__,__m_-___-___ . . _ _ _ . ..____._.______._z _ _ . _ _ . _ . . _ _ _ _ . _ _ _ _ . . _ _ _ . . = _ _ _ _ - _ _ _ _ _ _ , - . _ _ _ , _ . - _ _ - . _ . _ _ _ _ _ _ _ _ _ _ . , _ _ _ _ _ _ . _ , _ _ _ _ _ _ _ ,
s
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.* suus . . amu i.wwoe mwu rs 6& a as me '. receucasca ::60cw nsdu aca po*4ep t e 2 9o4r :. 5 so. stma.J :stusisvuaoa sstr. % susvatinoo semarwrreocoirs rar - rom om c. tee uoe swa-w it o we voo so.au. wo ne ' uao. v.a a : JOS: Y38973 PCN: 024.00.00.00 $1N: 4 cmo tetson sewne or nra voax . <:umenoo -
;As l 20 l the right to inspect BVPS fauhject, in ' each event to the operating Agreement Applicable Law, applicable confidentiality undertaking und
~ procedures established by the Operating Agent) at their expense. The Lennor and the Owner Participant and their respective authorized repre, sentativen shall have the right to inspect. at their expense, the hooks and
- l records of the Lessee relating to Unit 2. and make copies of and extracts therefrom (nubject an aforenaid) and may, at their eroense, discuss' the .
Lesnee's affairs. anances and acconnts with its executive odleersiali at such times and an often an may be reasonably requented. None of the Leuor. the Owner Participant, the Indeuture Trustee and the Collateral Trust Truntee shall have any duty whatsoever to make any inspection or inquiry referred ! to in thin Section e(h) and shall not incur any liability or obligation by reason of not makhig any much innpection or inquiry. (e) . r. spit,d /,npmno,,nto If and to the extent required by the opernt. imt .\greement, the Lewee nhall, at its note expense (except an provided in Section *(f > ) promptly participate in the making of any Capital Improva inent to Unit 2. Without the written connent of the Lennor, the Lruner shall not permit any Capital improvement to Unit 2 to be inade during the Inxt
. three years 6f the Leane Term untens the Leswee has exereined its option to purchnae or renew an provided herein or untenn (i) such Capital Improve.
ment is reanonably expected to he completed prior to the end of the Leane
' Term.' an determined by an independent engineer nelected by the Lennee and reasonably acceptable to the Lessor. (ii) arrangements for the payment
. tlycreof satisfactory to the Owner Participant have been made and tili) the Lessee is committed to pay the cost thereof (whether or not completed prior to the end 'of the Lease Term) in a manner satisfactory to the Owner -
Participant. The Undivided Interent Percentage of the net proceeds of (i)
! any sale or other disposition of property removed from (' nit.2 received (considering an part of nuch amount received any amount net uti or deducted by any Person claiming a right againnt the Lenn** to do no) by. or credited to the account of. the Lennee in accordance with the Operating Agreement and (ii) any insurance proceeda received (considering un part of such amount received any amount net off or deducted by any Person claiming a right against the Lessee to do *n) for the necount of the Lennor or the Lesmee in respect of the loss or destruction of. or damatre or casualty to, any much property nhall be applied an provided in Sectiou Dig). (h) or ti l an)y, an the case may be. The Undivided Interent Percentage in property at tiene removed from Unit 2 nhall remain the property of the Lenor, no ALPHA l
l CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 025.00.00.00 1 - i
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8"e $113U Of*00 sCAAfWTC00oi?S :M Fait- Lena C ;co MCC !?vte s,e ta r . wa noo o.mu %,o wa aoo von e JOB: Y38973 PCN: 025.00.00.00 S /N: 4 oono ecsscu scout or ute *onx nmtmoa
~1 i
21 matter where loented until such time an a Capital Improvement constitut-
! ing a replacement of such property shall have been installed in Unit 2 or such removed property han been disponed of by the Operating Agent in accordance with the Operating Agreement. Simultaneously with such dixpo-sition by the Operating Agent, title to the Lessor's undivided interest in the removed property shall vest in the Person receiving much property, free and clear of any and all claims or rights of the Lessor,l'nless subparagraph (3) l of Section 4(e) mhall be applicable. upon the incorporation of a Capital Improvement in I' nit 2. without further act. (i) title to an nndivided interest equal to the t'ndivided Interest Percentage in auch Capital im-prosement shall vest in the Lennor and (ii) such undivided interest in such Capital Improvement shall become subject to this Facility Lease and he deemed to be part of the l'ndivided Interent for all purposes hereof tn the wame extent that the Lexuor hail a like undivided interest in the property l originally incorporated or installed in Unit 2. The Leuee warrants and agrees that the Lemnor's interext in all Capital Improvements shall be free and clear of all Liens, except Permitted Liens.
(d) Reports. To the extent permissible. the Leuee shall prepare and tile in a timely fashion, or where the Lessor shall be reipdred to tile the Lennee shall prepare or canse to he prepared and deliver to the Lessor
! within a reasonable time prior to the date for tiling, any reports with respect to ifnit 2. the !!ndivided Interest, the Cornmon Facilities, or the Common Facilities (*ndivided Interest. or the condition or operation thereof that shall be required to be filed with any Governmental Authority. On or before March 1 of each year (comineneing March 1, l'Jn) and on the Lease Termination Date, the Lennee shall furnish the Lennor arut the Owner Participant with a report stating the total cost of all Capital Improvements and demeribing **parately and in reasonable detail each Capital improve-ment (or related group of Capital Improvements) made during the period from the date hereof to December :ll,1%7 in the came of the tirwt such report and during the period from the end of the period covered by the laut
! previous report to the December 31 immediately preceding to such report in the case of subnequent reporta. On or before March 1 in each year (commencing March 1. l'M8) and at much other timen as the Le=nor or the owner Participant shall reasonably request in writing, the Lessee will report in writing to the Lessor with rexpect to (i) the capital expenditures l contemplated by the most recent anmtal budget for Unit 2 and (ii) the ALPHA i
CURRENT ENDING PAGE CONDITIONS ARE 0 K. THE NEXT PAGE 026 00.00.00 - 5 I I i l 1 1 _ ._ __ ______J
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- ses a e, i.a 2,co sa.ats. $nt lew noo. vmai n - JOS: Y38973 ' PCN: 026.00.00.00 SIN: 4 onto EDilCN . GOWNE OF NfW YCr4M ' (21:14241500
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current plans (if any) which the Lennee may have for the finaneing of the
. game under Section a(f).
(e) Title to PapitalImprm ements. Title to an undivided interest. equal to the Undivided Interest Percentage, in each Capital improvement to Unit l 2 shall vent as follows: (1)l in the case nf each Nonseverable Capital Improvement. whether or nut the Lessor shall have financed or provided financing (in wholefor in part) for such undivided interent in such Capital Irnprove-ment by an Additional Optity Inveniment or a Supplemental Finane. ing, or both, etfective on the date auch Capital Imprm ement nhall hase l been incorporated or installed in Unit 2, the Lensor ahall. uithout further act, acepaire title to much undivided interent in much Capital Improvement:
. (2) in the came of each Severnble Capital improvement, if the
[ annor shall have finance i thy an Athlitional Eipdty Inventinent or a Supplemental Pinaneimr, or huth) the l*mlivide i Interent l'ereentage of the cent pf auch Capital improvement. or if much Capital improer-nient shall he re.piired by Applieuble Law, the Lennor shall, without further net aerpiire title to such usativided interent in auch I'apital improvement: and (3) in the ease of each Severable Capital Irnprovernent which doen not countitute a Capital Improvement required to be made pursuant to Meetion P(a)( A), (B) or. to the extent uf compliance with Gmernmen-tal Actions not significantly more onerous tium that in effect on the Closing Date. (C) hereof, if the Lessor shall not have financed (by either an Additional Equity Investment or a Supplemental Financing. or both) the Undivided Interent Percentage of the cant of much Capital Improvement, and such Capital Improvement ia not require I by Appli-cable Law, the Lessee shall retain title to such undivided interent: proeidad, homerer, that if, an a result of the foregoing, title to un undivided interent in a Severable Capital improvetneut which in in I l replacement of any component of l~ nit 2 venta in the Lennor, title to an equivalent undivided interent in the replaced component shall vent in the Lessee at the time of such replacement, provided no Event of Default shall have occurred and be continuing at such time. ALPHA { _ CURRENT ENDING PAGE CONDtTIONS ARE 0.K. THE NEXT PAGE : 027.00 00.00 1 l J
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!. Sty v. l!5DAU ($NLES)$Pl.E301857 J #* 3150VAh8400 SCRATCs*1?7000C173 UT Fmt Lmad C A 00 MCO 5*vtg l sa :o a,n iue aco amit am nu noo v=u a JOB: Y38973 PCN: 027.00.00.00 SIN: 4 Osl0 EDtW1 60wnt 08 NEW v0Rt (2:242an03 l i 23 Immediately upon title to such undivided interent in any Capital improvernent venting in the Lessor puranant to nub-paragraph (1) or nub-paragraph (2) of this Section B(e), such undivided interest in much Capital l Improvement shall without further act, become subject to tids Facility Lease and be deemed part of the Undivided Interest and Unit 2 far all purposes hereof. (f) Fundong of the rmt of Capitalimproerwents. The Lessee shall give the Lessor and the Owner Participant reasonable advance notice before
! placing in ser ice any Capital Improvement to Unit 2 the cost of u hich exceeda 8100.000.000 in respect of the interests of all the Participants under the Operating Agreement. The owner Participant shall have the option, in its mole dineretion, of finaneing through the Lessor the Umlivi led Interent Percentage of the cont of any nueh Capital improvement (other than one whone cost in to be incurred during the laat rive years of the Banie Lease Term). or any other Capital Improvement presented to the t hrner Participant for tinuncing, including or not including the making < f an inventment by the owner Participant tan "Addorionni Erinitot inontwo n!")
und the innuanee of one or more Additional Notes, all on terma neceptable to the Lesser and the owner Participant. If the owner Participant doen not finance, or arrange the financing of the l'ndivided Intere.st Percentage of the cost of nueh Capital Improvement the f.ennee inny canne the Lennor to inane, if and to the extent permitted by the Indenture, to one or more Persons (oth, r than the Lennee or any Pernon affiliated with the Leswe within the me aning of Section 31s of the Code or any Agent thereon one or more Addit'onal Notes and to use the proceeds thereof to pay the Undi-vided Interest Percentege of the cont of such Capital Improvement. *nhjeet to satista: tion of the f, ilowing conditions: (i) there shal be no more than one supplemental Finuneing in ar.' calendar year; (ii) the sum o ' the Supplemental Financing Amounta in any caltadar year shall e 'nal or excee I the Lennor'n Share of 810.00tum (iii) the Lessee nay include in any requent for a Supplernental Financing only Capital : improvements not previously financed in any Supplemental Financing and which have been installed nr artixed no earlier than three calendar years before the beginning of the calendur year in which such Supplemental Financing occurs: ALPIIA CURRENT EN0(NG PAGE CONDITIONS ARE O K. THE NEXT PAGE : 028.00.00.00 I l
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L , o , I q l 1 24 (iv) the present v' alue as of the Closing Date of the total Iirnoittit . of all Supplemental Financings (diacounted at'the Dincount Itate in . effect at the time of such Supplemental Financing) during the Baule j Lease Term with respect to the Lessee's leasehold interest ahall not exceed 20'"c of the Purchase Price; i
- (v) unless waived by the Owner Participant, the Lessee shall. at the time of such Supplemental Financing, have outataniling first
' mortgage honds rated ut least " investment grade". a(deterrnined by Standant & Poor'n or .\loody's, or if neither of such rating organiza.
tions shall rate debt securities of the Lessee at the time, by any nationally recognized ntatixtical rating orguuization 'in the United States of America: (vil in the opinion of indepemlent tax counnel to the ilwner Participant (which counsel 'may' consnit with 'the indepernlent tax counnel of each Partner in reaching ita opinion with respect to the tax effect on each Partner). much Supplemental Financing abatt not re nit in any adverhe tax etYeet upon the owner Participant or any Partner or affect the ntatus of the Facility I,came as a "true teame" for Federal !- inconte tax purponen..and the owner Participant an.1 the f. ewer % hall have agreed upon the amount and manner of payrnent of anyirnlemnity payable by the Lensee as a conacipience of such Supplemerital Financing: . (vii) the suin of the Suppleinental Financing Amount and 'any Additional Eqtety investment < hall not exceed that portion of the cost of Capital Improvements which, when financed, will eunatitute un
. addition to the Owner Participant's basis under Section 1012 or 10 lei of the Code:
tviii) the Additional Notes shall have a final maturity date no
!. later than June 1. 2017:
(isi the Lessee shall have made sneh representations and warran-tien and covenants regarding the tax characterintica of the Lessor'x undivided interest in each rapital Improvement an shall be mutually acceptable to the parties to the Tax Inderunification Agreernents amt the Tax Indemnification Agreements shall have been appropriately enodified; ALPHA
. CURRENT ENDING PaGE CCNDIT!043 ARE 0.K. THE NEXT PACE 029.00.00.00 -
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$ir s- liscsAU (STYLE 3)$7 Lt304 85f 3 8 ,. 8:sDuaope00 staarCmtT 000DS fMf Fmt L.noa C. 100 Mco $*vt.t w :2 r, =ae soo a.'o seitne :eo0. v.a a JOB: V38973 PCN: 039.00.00.00 S/N: 4 owie retson sewme or he* vaan nzmassw .. ~~l 25 (x) appropriate increaxes,if any, to Basic Rent and the achedules of Caxualty Values. Special Casualty Values and Modified Special Casualty Values shall have been agreed to by the Owner Participant and the Lessee in accordance with the adjustment provisions of paragraphs (e) and (f) of Section.3 hereof to support the amortization of the Additional Notes issued in respect of such Supplemental Financing and to preaerve Net Economic Return (without regard to any tax benefits associated with such Capital Improvement):
(xi) the Lessee shall have paid to the Lessor an amount equal to - all out of. pocket costs and expensen reasonahly incurred by the f.essor or the Owner Participant not financed an a part of much Supplemental Financing or reflected in adjustments to Basie Rent: (xiin no Default. Event of Default. Reimhnrsement Defanit or Reimbursement Event of Default shall have occurred and be continuing: t xiii) the Lessee shall enter into sneh agreenients ami shall have made or delivered unch representatinnn, warrantien covenants. opm. ionn. certificates and other documents as the Owner Participant shall reasonably request: and (xiv) in the opinion of the Owner Participant evidenced by a certificate of a Responsible Ot'ficer thereof netting forth the hasis for l such opinion, such supplemental Financing shall not reudt in any material adverse accounting or financial consequeneen to the owner Participant or any Partner (it being understood that the incurrence of additional indebtedness by the Less,or in accordance with this Section shall not he deemed in and of itself. to cause an adverse financial consequence to the Owner Participant or any Partner).
.tc1 ton 9. Erent of Loss: Dromed Lw Reenl.
(a) Damage or loss. In the event that an Event of Loss shall occur. or l l Unit 2 or any substantial part thereof shall antier destruction damare, losa. condemnation, confiscation, theft or seizure for any reason whatsoever, such fact shall promptly, and in any case within five Businen Days after anch event he reported by the Lessee to the Lesnor and the Owner Participant. (b) Repair. The Lennee shall promptly make any and all payments j required of the Lexnee under the provisions of the Operating Agreement 1 ALPHA i CURRENT ENDING PAGE CONDITIONS ARE 0 K. THE NEXT PAGE 030.00 00 00 -- 1 I I
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! relating to damage or destruction or the like to Unit 2 or any portion thereof.
(c) Payment of Casuallu l'alue. On the date following the occurrence of an Everat of Loss au specified in a notice from the Lessor to the Lessee, the Lessee shall pay to the Lessor all Baxic Rent due on, or accrued Basic Rent to, such date, plus an amount equal to the excess of (x) Panually Value, determined as of the date auch payment is due,if auch date in a Basie Rent , Payment Date. or the next succeeding Basic Rent Payment Date. in all other canen, over (y) the unpaid principal amount of the Nott s outstanding { on nueb date and annumed by the Lessee on such date, after giving cITeet to the payment, if any, of the principal instalknent due and payable and paid in respect of och Notex on auch date. [f the Lessee shall hase made such payment and n!' .ll have anamned all obligatioux ami liabilities of the owner Truxtee muler ile Indenture and the Noten pursuant to Section 3.9t ha of the Imlenture. ts.e Lenor shall, as long ns no Defanit or Event of Default shall have occurred anil be eminuine (amt at any tirne after the oeenrrence ! of an Event of Low the Leaur may). Transfer th. Umlivide.1 Interest to the Leuer sub.iret however to the Lien of the Imlenture. If the Lesser shall have made such payment but = hall not have a,*mned the obligations and liabilities of the Owner Trustee under the itulenture ami the Notes pursuant to Section 3.0(b) of the Indenture, the owner Participant shall etTeet the Special Transfer, in which case. without further act on the part of the Lessor or the Lessee, (i) the obligation of the Lessee to pay further Basic Rent shall be reduced to an amount, payable on each Banie Rent Payment Date thereafter, equal to the aggregate amount of principal, premium if any, and neerued interest then payable on. all Notes then Outstanding, aml (ii) this Facility Lease shall become a security agreement for all purposes of Applicable Law. (d) Payment of Special Coxualty l'alur. if events giving rise to a Deemed Loss Event shall occur, the party hereto having knowledge thereof nhall promptly notify the other party of the occurrence thereof Iprovided that the faihtre by th- Lenor to furrush to the Lewee the foregomg notier whall not impair the right of the Lehnor to exereixe the option referred to l below) and at any time thereafter. the Lessor may demand. by written notice to the Leure, that the Leuee pay, and the Leuee shall pay, on the date specified in such notice, to the Leuor all Basie Rent dur on. or acerned Baxie Rent to, such date, plus an amount equal to the eseesx ot' < x) ALPilA CURRENT ENDING PAGE C0hoIT!0NS ARE 0.K. THE NEXT PAGE : 03 t.00 00.00 i - l
1
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omo rein towne or sta voes tr meenoo - )
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I _{ l i 1 M I Special Casualty Vahie, determined as of the date such paymenit is due. if l such date is a Baxie Rent Payment Date, or the innuediately succeeding i Basie Rent Payment Date. in all other cases, over (y) the unpaid principal amount of the Notes Outstanding on such date. after gtving etfeet to the payment, if any, of the principal installment due and payable and paid in respect of the Notes on much date. If the Lessee shall have made >>nch payment and shall have assitmed all obligations avid liabilities of the 4)wner Trustee ttnder the Indetiture and the Notes pursuant to Section 19th) of the Indenture. the I,essor hitall, so long as no Defanit or Event of Defaillt shall have occurred and be continuing (and at any time after the ocetarretice of a Deemed Low Event the Lessor snay). Transfer the Undivided Interest to the Leshee, subject. however to the Lien of the ludenture. I If the Lessee xhall have made such payment but shall not ha.e annumeil all obligatioux and liabilities of the Owner Trustee under the Indenture and Notes pursuant to Section 10(b) of the Indenture. the Owner Participant shall etfeet the 'pecial Transfer, in which case. without further act on the part of the Lessor or the Lessee. (i) the obligation of the Lexnee to pas further Banie Rent shall be reehteed to an amount, payable on each Bash Rent Payment Date thereafter, equal to the e . neate amount of principal, premium, if any, and accrued interent then payable on all Noten (hitntand. ing, and (ii) this Facility Lease shall become a sceurity attreement for all purposes of Applicable Law. (e) Requisdion of Use. In the case of a Requisition of Use not constitut-ing an Event of Loss, this Facility Lease shall continne, and each and every obligation of the Lessee hereunder and under each Transaction Docionent shall remain in full force and effect. So long as no Default or Event of Default 6 hall have occurred and be conti.iuing, the Lesmee shall be entitled to all suma received by reason of any much Respiisition of I' r for the perio.1 ending on the Leane Termination Date, and the Lennor shall be entitled to all sums received by reason of any such Requisition of Use for the period after the Lease Termination Date. (f) Tmnination of Lease Tmn. Upon (but only npon) a Trauxter by the
! Lessor pursuant to Section 9(e) or 9(d) of the L*= ace, the assurnption by the Lesnee of all remaining obligations and liabilities of the Owner Trustee under the Indenture and the Notes pursuant to Section 19(b) of the indenture and payment of the amounts speci6ed in the Indenture, the Notes and this Facility Lease, the Lease Term shall end and the Lesser's ALPilA CURRENT ENDING PAGE CONDITIONS ARE INCONSISTENT WITH THE NEXT PAGE : 032.00 00.00 -
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. o to cetwn soww or we veen cu4:esco c.- , ,
jf . fi W. obligation to. pay l'urther Basie Retit nliall eeuwe, but the Lexnee shull
. contintie to .be required to make all payments of Supplemental Rent when due. In all other canen, the L* axe Term shall continue and thin Facility Lease shall remain in full force and elYect.
^ (g) Application' of Paynwnts on an ' Erent of Lou. Any payments received at any tiene by the Lensor or the Leasee (other than insuranee- ~l placed by the Owner Trustee or the Owner Participant purunant to 8eetion - !
10(b)) from any Governmental Authority, insurer or other Person (except the Lenee) as a result of the occurrence of an Event of Low teonsiderine " as part of such amount received any amount whleh was net oli or deducted g therefroen as a result of a claim by any Perxon against the Lexxee) nhall f.e applied as follows: (i) all such paymentu nhall he promptly paid to the Lennor f..r application purwnant to the.following provisionn nf thin section me), except that the Lessee may retain any amomita that wonhl at th. tim.- be payable to the Lenee as reimbura*nient und*r the provi<iona 'of clause (ii) helow: (ii) no enueh of much paymenta um shall not execed the uniount required to be paid by the Lensee pursuant tu Section Ute) shall he applied in reduction of the LesserVobligatinn to pay wieb amount if not already paid by the Lessee or, if already paid by the I,ensee, shall be applied to reimburse the Lennee foritn payment of much amount: aiol (iii)' the balance,if any, of much paymenta in the enne of papnenin from insurance carried by or on behalf of the Lennee ahull be paid to the Lessee or in the case of any other payments shall be divided between the Lenor and the Lessee as their intereat< may appenr.
. (b) Application of Payments Not Relatints to un Eront of Lou. Payments received (considering as part of such amount received any amount which was set off or deducted therefrom as a' result of a claim by any Pernou againnt.the Lennee) at any time by the Lenhor. the Lesnee or the Owner Partielpant (other than insurance placed by the Lennor or the owner Partleipant pursuant to Section 10(h)) from any insurer or other Person
- with respect to any event giving rise to an amount referred to in the second wentence of Section 6(c) or the third wentence of Section e(c), or to any destruction, damage, lonn, condemnation. confineation, theft, seizure of or re.tuisition of title to l' nit 2, the Undivided interest or any part thereof. in ALPHA CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 033.00.00.00 -
1 I i
- - . - __ _ . _ . ,__ _ _ _ _ . _ _ _ _. .-__._______.____._.__.m_-_ _ _ _ . _ _ _ . - - _
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. me a smia soo o.mu. Seit eae voo. (vit # - JOS: Y38973 PCN: 033.00.00.00 SIN: 4 cene torso:s towat or men v::ca - rnamessoo 3, m t 29 L
each case. not constituting an Event of Loas, shall be applied' /irut ' to - reimburse the Lennee for all amounta expended by it puranant to Neetion
" 9(b) and second. the balance, if any, of such payments shalb in the cane of payments from innuranee carrieti by or on behalf of the Lessee, be paid to
- the Lessee or,in the case of other payments, be divided between the Lesnor and the Lessee as their interents may appear..
- (1) Other Dispositions. Notwithstanding the foregoing provision = of -
this Section 9, if a Default or an Event of Default sh'all hat? occurred and be continuing, any amount that would otherwise be payable to or for the accotint of. or that would otherwine he retained by, the Lessee purnuant to Section 10 or this Section 9 whall be paid to the Le* wor as security for the oisligations of the Le**ee urnier this Facility Lease and, at auch time thereafter an no Default or Event of Default shall be continuing. nuch amount shall be paid promptly to the Le* wee unhwa this Facility Lenne shall liare theretofore been ileclared to he in default,in which event such nmount whall be dixpo ed of in accordance with the provinionn hereof,' of the Itulenture ~and of the Truxt- A;treement. swrnos It).' in.surana. _ (a) R$ quired lusnrance. The Lessee will canAe the Operating Agent to carry and maintain at least the following insurance coverage with respect tu the Undivided Interest, the Common Facilities l'ndivided Interent and the
! Unit 2 Site, in each case with insurers of recognized responnihility, in such form na shall be satisfactory to the Owner Participant.
(1) Non. Nuclear Insurance. (i) The Lesnee shall maintain 'all risk
- property insurance enver-
! ing physicalloss eith respect to Unit 2 in such amountn and with auch other terms as are required by or are in accordance with Prudent Utility Practice, but in no event shall such amounts be lena than the estimated maximum probable loss in respect of nuch property. Any insurance carried in accordance with this Section 10(a)t t)(i) shall be endorsed to provide that:
(A) losses shall be adjusted and paid as provided in Section 10(a)(4): (B) (i) the Lensor and the Owner Participant (the "lddi. timmi lusureds") are included as additional insureds, un their ALPHA l CURRENT ENDING PAGE CONDIT!0RS ARE O K. THE NEXT PAGE 034 00 00 00 1 I
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WAt vv5. me ;. 8'*CCt%7tCM 0 Ansa 4. $:8hA:J 'PacgIL f '0 PAC & t v(n b ies.51 3 49 - 5tv< $1$oJaJ f5 fLE515tyttoca e57 J 8* $150VWPt oo.5cRafCWTococirl f sf - N e ucsoLEoA C too uco STvt,E
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interents may appear, and (ii) any obligation impoxeil upon the insured (including without limitation the liability to pay prPmi- L umn) shall be the sole obligation of the Lessee and not that of any Additional Insured: (C) the respective interesta of the Additional Insureds shall not he invalidated by any breach of any warranties by the CAPPO Participants, contained in auch policies: (D) the insurer thereunder waiven all rights of nuhrogation
~
against the Additiental inanreds with rispect to their respei tive interesta 'in'(* nit 2: (E) inch inxurunee shall be prinnary withont right of contri-bution of imy other insurance carrieil by or on behalf of any I' Additional Innurail with ' respect to ita interent in (* nit 2; und (F) if such insurance ia cancelled for any reason what oever including non. payment of premium or any suhatantial chamre in maile in the coverage which utfects the intenwt of the Aihlitional inaureds. I1) nueh cancellation or change shall not he effective as to the ' Additional Inanreds for 30 days after receipt by The First National Bank of Boston. an Owner Trustee and agent. of written notice from such insurer of such cancellation ur change. and (2) the Lessee will use its best efforts to cause such innurer to deliver a certilleate with respect to such cancellation or changr to the owner Participant and the indenture Trustre. (ii) The Lessee shall maintain bodily indury and ' property damasto liability insurnuce (including product liability, completed operations and personal hdury insurance) coverinir claims arixing out of .the ownership ~ operation tuaintenance, condition or use of Ifnit 2. the Common Facilities or the BVPS Site. The amount and other terma of much insurance shall be in accordance with the higher of Pnnient Utility Practice and the Operating Agreement, but such limits shall in no event he lens than $25.000.000 per occurrence coinbined bodily irdury and property damage. Such insurance may include deductible amounts not to exceed M,000.000. Any insurance carried in accordance with this Section 10(a)(1)(ii) shall he endorsed an prothled in paragraphs (B). (C). (D). (E) and (F) of Section 10(n) t I >(i). ALPIIA CURRENT ENDING PAGE CONDITIONS ARE 0 K. THE NEXT PAGE 035 00.00 00 _
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i ' except that the term " Additional Inxureda" wherever it appears ahall include the Lennor, the Owner Participant and all Indemniteen, i
. (2) Nucl, ear insurance, .4 (i) The Lessee shall maintain nuclear ' property insurance in \
amounts and with such othe'r terms as are required by or are in accordance with the highest of (a) Applicable Law, (b) the Operating Agreement'and (c) Pnnient Utility Practice. The coverage afforded by such nuclear property insuranee in respect of any loan at the BVPS . Site ami available for any loxx at Unit 2 either ( A) shall at all times be at least equal to $750 million regardless of any nunpension. termina. tion, amendment, nnpplement 'or reduction of auch insurance for any reason (inelnding by reason of Nuclear incidenti or (D) ao long an (1) . l Ifnit 2 in in, or in in a procedure which will rexnit in, a state of cold shutdown in accordance with Pruilent Utility Practice and (2) the first mort; tag bonda ..f the Lennee shall have an investment : trade rating tx) by two m.tionally accepted rating agenciem if much tirst mort: tag-houds are rated by two nationally accepted ruting agencies or ty) by one nationally accepted rating agency if xnch first inurtgago boml are only rated by one nationally accepted rating agency. will be reinstated to be equal to at least W>0 million within Is0 ilays of any su*p. nwinn. termination, amendment, supplement or reduction of such insurance for any reason (including by reason of a Nuclear Incident). Sneh insurance may include deductible amounts not to exceed $10.000.000. Any insurance carried in accordance with thin .section 10(a)(2) ti) shall be endorsed by the innurer an provided in paragraphs (A), t B). (D) (E) and (F) of Section 10(a)(1)(i), (ii).The Lessee shall maintain the maximum nuclear liability insurance in amounts and with such other terms as are required by or in accordance with the highest of (a) Applicable Law. (b) the Operat-lug Agreement (e) Prudent Utility Practice and (d) the maximum nuclear liability insurauce available ou commercially reasonable terms. but in any event In sneh amounts and containing auch other terms am to cover the ' aggregate liability' for a single ' nuclear incident' of all
' persons imlemnified' (as such terms are used in the Atomic Energy Act) and in connection with the ownership, maintenance, condition or l nae of Unit 2 and the BVPS Aite. The Lessee shall also maintain supplier's and transporter's insurance in amounts consistent wit h ALPHA CURRENT EN0!NG PAGE CONDITIONS ARE 04 THE NEXT PAGE On00 00 30 - 4 I
I
~ "sumus em. wmo somem :,,am m .v5 m .6 ewuc.aecs :asew s:sceu was na *cte sis Styar sis 34145$?vLE5)S7vLE3ca BST J Fw $150iJwp;o0 2Aaf wtscoott$ rx' i . ,.. o . . >$
Fet. Lees C 100 MOD STYLE set a se ine <;oo e nn. wie ne t;co vmit a JOB:Y38973 PCN: 036.00.00.00 SIN: 4 cmo Eoiscn towtE as ww ve:x (n:mesoo 32 Prudent l'tility Practice. The Lennee shall maintain nuclear liability insurunee puranant to this Section 10(a)(2)(ii) whether or not the Lease Terndnation Date shall have necurred, until notified by the Owner Participant that neither the Lenaar nor the Owner Participant has any further real or potential liability in connection with the ownership, operation, maintenance, condition or use of Unit 2 or the BVPS Site; prnesdad, that after Decommissioning has been completed the Lessee shall not be required to maintain nuclear liability insurance for more than 30 yeart Any innurance carried in accordance with thia Section 10(aH2)(ii) shall be endorsed as provided in paragraph , t B). (D). (E) and (F) of Section 10(a)(1)(i). (iii) The Lessee shall, or nhall cause the Operating Agent to. n e its bent effortn at all times to obtain the endorsetnent referred to in paragraph (C) of Section 10(a)(1)(i) on all insurance referred to in this Section 10 tall 2). und shall enn,e much endorsement to he obtaineil if and to the extent it i, aeailable to any other owner ur operatot of a nuclear ge nerating nuit. (3) Annnal fleportu and certificate =. The Lessee shall, on or before March I nf each year comruencing March 1.15. furnish to the Lessor and l the Owner Participant ( A) a report signed by the broker or brokers for the BVPS Site insurance tor if insurance is placed directly by the Operating Agent. a report nigned by the Operating Agent which will include a copy of the certificate of insurunee signed by the carrier, which certificate shall indicate that all endorsements reiptired by this Section 10 are applicable) (i) describing in detail the innurance then maintained by the CAPCt > I Participants with respect to BVPS and the BVPS Site. (ii) stating that no premiums are then delinunent, and (iii) stating that insurance maintained in in accordance with (1) the Operating Agreement and (2) this Section 10: (B) a report signed by the broker or brokers for Lensee's insurance (or if insurance is placed directly by the Lessee, a report signed by the Lewee which will include a copy of the certificate of innurance sigurd by the carrier, which certificate shall italieate that all endorsemruts reipdrad by thin Section 10 are applicable) showing the separate insurance. if any. then maintained by the Lexaee with respeet to its interent in BVPS and the BVPS Site and stating that no premiinns under such insurance are ' delinquent: (C) a certificate signed by the Lessee stating that the insurauer maintained by the CAPCO Participants and by the Lessee, identificil on the ALPIIA l l l 4 I CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 037.00.00.00 - 1 l l l i f n ._ _ - _ _ _ _ _ _ _ _ _ _ _ _
~imens e... marms wwwo suic m vus as t recowace. neu us:.Aa pacte !st> acte se m.m nn 5tw $1504U ($?vLtt5f480o4 85f ) F4 $153ur* *Pe00 5e:Af tso170000173 f;tt Fmt: L., cole C. 130 MOD style se, so r.w seae loco eainu seit w uoo van e JOB: Y38973 PCN: 037.00.00.00 S/N: 4 onto reisca sewat :s wen vsn umu4noe 33 reports to be delivered pursuant to clausen ( A) and (B). in in accordance with Prudent L.'tility Practice within the nnelear indnatry. the operating Agreement and this Section 10: and (D) upon the request of the Lenor or the Owner Participant. copies (to the extent permitted by the inners of such policies) of policies so maintained. Any report by an insurance broker with respect to clanne ( A)(iii)(1) may be made in reliance upon a schedule ,
provided by the Lenee (a copy of which shall be attached) identifying the ' insurance (by enterage, limits, insureds and other pertitient details) re. quired to be maintained under the Operating Agreement. Any report with respect to elause ( A)(iii)(2) may be inade in reliance upon a nimilar nehedule provided by the Lessee (a copy of which shall be attached) identifying the insurance required to be maintained under this Section 10. (4) Proceeds. All insurance proceeds paid in respect of or purutant to paragraphs (1) and (2) above shall (i) be applied an provided in Section 9t g),th) or (i), as the came may be, and (ii) he adjusteil with the insuranc.- l companien or otherwise collected. inchnling the filing of appropriate pro. eeedings, by the Operating Agent in accordance with the Operating Agr-. ment muliject. losumr. to any priority allocations of much proceeds to decontamination and debris removal met forth in the insurance policies or reipaired under Applicable Law. (b) Permitteil Invnraner. Nothing in this Section'in shall prohibit the Lessee from placing at its expense insuranee on or with respect to the eost of purchasing replacement pow er. narning the Lenace as inaureil and /or loss payee, unlew such inwurance woubt eunflict with or otherwise limit t h.- ; availability of insurance to be provided or maintained in accordance with Section 10(a). Nothing in this Section 10 shall prohibit the Lessor or the Ou ner Participant from placing at its expenne other in*urance on or with respect to Unit 2. the Undivided Interent. the Pomnion Facilitien Undiviiled Interest or the L* nit 2 Site or the operation of (~ nit 2. naming the Lessor or the Owner Participant an insured and/or losa payee. unless xuch insurance . would conflict with or otherwise limit the insurance to be provided or maintained in accordance with Section 10(a). ) i Secitos 11. Rights to .Issign or Subitase. (a) Assignment or Sublease but the Lessre. %'ithout the prior written consent of the Lewor. the Lewee nhall not awign sublease, transfer (except to a Surviving Lewee in connection u ith a sale of not lew than Wi ALPIIA
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' of the annets of the Lemsee under ciretunxtances in which the Lehs haw, guaranteed the obligations of such Surviving Lennee an provided in, and lulx -
otherwise complied with. Section'10(b)(3)(ii) of the Participation Agree; tuent) or encumber (except for Perndtted Liens) its leasehold interent in. l- the Undivided Interent'under this Facility Leane, ex'eept that the Lesuee may assign its leanehold interest under thin Facility Lease in the Ifndivided interent to a wholly owned subsidiary of the Lennee if such wuhsidiary% - obligations under this Facility Lease and the other Transaction Documents and the Financing Documents, if then in elTeet. ahall he guaranteed by Ohio Edison Company pursuant to a valid arid enforceable guarantee enntaining appropriate covenant. of Ohio Edinon Company and otherwise ati factory in form and nuhutance to the Owner Participant 'in ita absolute dixerelion.. The Lesure shall not, without the prior written conwnt of the Le<<nr und the 4 Iwner Participimt. part with the ponnenion of. or hnlYer or allow tii paw mP of its ponunninn. the l'ndivhleil Interest. or any interest therein, .vept to the extent resplired pur mant to the t >peratimt A:rreement or an exprenly permitted by the provisions of this Facility Leane or any other Transnetinn Duen tuent, t h) .1wynnu n! !>y Lo ssor ax se curity for Lexxor'x II!diantions. Tu ~eente the imichiedneu evidenced by the Noten. the .Lennor ivill auign to the indenture Trnater tx) its right. title and interest in amt to this Facility Leane,. including the right to receive certain payinents of Rent t unt
. including, in any event. Excepted Payments), to the extent provided in the Indenture and (y) its right, title and interest in the Undivided Interest.
The Lessee hereby (a) consents to vueh assignment and to the terms of the Indenture. (b) agrees to pay directly to the Indenture Tntstee at the Indenture Tntstee'n Otilee (so lony as the lien of the Indenture has not been matisfied and discharged and the Lexnor' in obligated thereunder) all amounts of Rent (other than Excepted Paymentn) due or to become due to the Leesor. (c) agreen that the right of the Indenture Tntstee to any much l payments shall he absolute and unconditional and shall not be affected by any eiretuustances whatsoever, including without limitation. those circum-
*tances het forth in Section 4 and (d) agreew that, to the extent provided in the Indenture and until the Indenture is diseharged in accordance with ita terms, the ludenture Tntstee shall have all the rights of the Leunr herenuder (other than Excepted Rights and the right to receive Excepted ' j-Paymental an if the Indenture Trustee had originally been name.1 herein an -
q the Leuor. Following any transfer to. or purehuse by the Leuer of the ALPHA 1
-i CURRENT ENDING PAGE CONDIT!0N'S ARE OX THE NEXT PAGE i
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trndivided 'Isiterent. the Undivided Interest shall (unlenn the Noten shall have been paid in tidl) remain subject to the lien of the~ Indenture anil auch
. lien shall not be irupaired in consequence thereof.
Swituu 12. L.rau Ronoval. Subject to the notice requirentents set forth in Section 13(a). at the '. . end of the Basic Lease Terni. provided that no Event of Default shall base occurred and be continuing hereunder. no Event of Loss or Deemed Loss Event shall have ocenrred in resswet of which the Lennor han demande 1. pnyment in respect of Section 9(c) or 9(d) hereof. as the case may be, or in j responne to which a 8pecial Trannfer han been effected, and all Noten shall have been paid in fidl. the Lennee shall have the right to renew the term of l this Fnellity Lenne for the Renewal Term (an hereinafter defined). The Renewal Tarm shall he for a period of two years. a= arlected by the Lessa. Heyrtus 1:5. .% tiers for Hanen al ne l'archase: 1% rchnvr Options: Ikt rmina.
^ lion of Fair .11arkt 1*nino.
. (a) Eepiratwn of Basic /,rosi T rm. Not curlier than five norlater than
-three years prior to the expiration date ofIhe Basic Lease Term, the Lewee shall give to the Lessor written notice ofits election either to I1) return the Undivided Interest to the Lessor purwnant to Section 5, or (2) exercise the renewal option permitted by Section 12 or the purchaxe option permit trd by Section 13 (e). If the notice specified in clanxe (2) of the ' preceding sentence is given. then not later than 18 monthm prior to the expiration date of the Basic Lease Term, the Lessee will give the Lexxor written notice of its election to exerciae either (x) the purchase option permitted by Section 13(c) or (y) the option to renew this Facility Lease for the Renewal Term.
Any such electiou shall be irrevocable as to the Lessee, but no wuch . lection shall be binding on the Leksor if. ou the effective date thereof, a Defaidt nr-an Event of Default shall have ocenrred and be continning or an Event of Lons or a Deemed Lona Event shall have occurred and the Lex *or shall have demanded payment under 8ection O(c) or 9(d). as the case may be, or the response to which a Special Transfer has been effectuated. (b) Eepirution of Reneicul Term. Not later than eighteen months prior to the expiration date of the Renewal Term,if elected. the Lessee shall stive to the Lepor written notice of its election either to (1) retnrti the Undivided Interent to the Lessor pursuant to Section .1 or (2) exercise the i ALPIIA ' CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 040.00 00.00 t - I
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I ._ i I L ( % T purchaxe option permitted by Section lHeb Any such election shall he} irrevocable as to the Lessee, but no much election shall be hinding on the Lessor. if, on the effective date thereof, a Default or an Eveut of Default l' shall have occurred amt be continuing or au Event of Loan or Deemed Loxx L Event shall have occurred and the Lessor shall have demanded payment under Section 9(c) or 9(d), as the came may be, or the responne to which a Special Transfer has been effectuated. [ (e)' Purchan Option at Ezpimtion of tin. Isuse Term. Subject to the. i notice requirements net forth in Section 13(a) or lHb), an the came may be. F provided that no Default or Esent of Default shall have occurred and be L continning and the Notes shall have hees paid in full.'the Lessee whall have the right to purchame the I*ndivided Interent on'the date of the expiration of the Banie Leane Term nr the Renewal Term (if electedh for a purchaar price equal to the Fair Marker salen Vulne thereof. (d) therehan of the Cudivid.el Ink rr st: Paoinn ut. Etc. 1( the Leu - shall have elected to purchaxe the Umhvided Interent pursuant to section
'j IWeb payment by the Lexaee of the pureluw prier therefor shall h* made '
'in imniediately availaide funds. whereupon the 1.cnwor shall Tranaf.'r the Undivided Interent to the Leawee.
-(e) IMOminution of fair .llurh/1*rdue, Not later than four years prior to the expiration date of the Basic Lease Term and not later than two years prior to the expiration date of the Renewal Term,if any, the Lessee an.1 the Owner Participant nhall agree on the Fair Market sales value as of the expiration of the Basic Lease Term or the Renewal Term. as the caxe may be, and if the Lessee and the Owner Participant are unable to agree upon much Fair Market Sales Value, such Value shall be detennineel by the Appraisal Procedure.
(f) Burdensome Termination. So long au no material Defanit or Ev nt of Defanit shall have occurred and be continuing, in the event that a l burdennome idemnity payment (as defined below) xhall occur. th Lee whall have the option to terminate thin Facility Leune on at least 90 days prior written notice to the Lessor, the Owner Participant and the Indenture Trustee on the first Bamic Rent Payment Date following the EtYective Date (as defined in Section 4 of any Tax Indrnmification Aereement) of any L Indemnity Payment that is a burdenxome indemnity payment (as iletined below). or if such first Basic Rent Payment Date is less than 90 stays, frmn such Effective Date. on the next succeeding Basic Rent Payment Date on ALPHA i CURRENT ENotNG PAGE CONDITIONS ARE INCONSISTENT WITH THE NEXT PAGE : 04 t.00.00 00 - t I
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.nuch Basic Rent Payment Date the Lessee shall pay to the Le*we (or in the . :{
- ease of amounta ihte under clause (B) below, the Personn entitled thereto) 1 all Basic Rent due on such Basic Rent Payment Date, plus an amount equal-g
~ to.(A) the excess of (i) the higher of Fair }larket Sales Value or Cannalty 1
. Value determined an of such Basic Rent Payment Date over (ii) the utipaid '
principal amount of the Notes Outstanding on much date after giving etfect" to'the payment,if any, of tlie principalinstallment due and payable on wuch j date and shalt assume ~ all of the obligations and liabilities of the Owner -
~ 1 Trustee under the Indenture and the Notes pursuant to Section 3.9thi of -I the Indenture plus (B) any amounts then due under the Tax Indrinnifica-l tion Agreement. !!pon compliance in full by the Lessee with the foregoine 4
provisions of this Section 13(f) and assumption by the Lessee of all the
'(
obligations amt liabilities of the Oirner Trustee umler the Indentnre and . L the Noten purnunnt to Section 3.9(b) of the Indentme. the Lessor shall tno ' long an 'm> Deranit or ' Event of Default < hall imve necurred and he continuingh Transfer the !*ndivide.l Interent to the Lesnee.
~f An uaed .in thin Section 13(fl the 'phrnne "Isu ri/rimnni isula nini/>f fusffnern/" nicenn au ludetunity Payment (an defined in Section 2(el ti) of.
any Tax Indemnitiention Agreement) which caunen (x) the num of (il the net prenent value as of the (loning Date of all instalknents of Basic Rent (as such'inntallmenta ruay he adjusted pursuant to' Section .3(d) 'or 3(el l hereof) discounted semi. annually at the Discount Rate plus (ii) the l aggregate- net present value as of the Closirig _ Date of all indemnity Paymenta paid or payable by the. Lessee up to the time of deter:nination l discounted semi annually at the Discount Rate to exceed by more than f/i j
~
j (y) the net present value as of the Closing Date of all instalhuents of Basie Rent (as such installments may be adjusted pursuant to Section 3(d) or { u
- l 3(e) hereof) discounted semi annually at the Discount Rate.
(g) Purchase Optiirn for Signi)fcant E.rpenditures. So long an no De. fault or Event of Default shall have occurred and be continning, the Lessee shall have the option to terminate this Facility Lease on a leaxt 90 days prior written notlee to the Lensor, the Owner Participant and the Indenture ! Trustee on any Basic Rent Payment Date occurring on or after September i 30,1997 to the effect that a Significant Expenditure in renpret of a Project (an each of such terms is defined below) is planned or required. On <nch l Basic Rent Payment Date the Lennee shall pay to the Leswr all flusic Rent due on auch Basie Rent Payment Date, phin an amcunt equal to the higher of the Fair 3larket Sales Value of 'he t Undivided Interest or the t'anualty 1 i ALPHA I I I i i CURRENT ENDING PAGE CONDITIONS ARE 04 i 1 THE NEXT PAGE : 04t00 00.00 -.- I 1 l l _ l
M 3 =9e >'ef stes *,pewuq Sn% s a1. W5. M ,i Wow. neon :)t4A.'1 us -tai, 84 D E'E Paria EJE 4.5p-E? nn I 5tve $150,f.4MSTYLf5)STvl8304 857.) Fae $130tJ1kM00 5CI.17MJ7Ccc0Pt TXf Fr..t C uc Moo STYLE so t r.ee i.a :ocu.wm. et 444 co. vn.u e .'08: Y38973 PCN: 042.00.00.00 SIN: 5
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1 33 Value therror, in each ease letermined as of such Basic Rent Puyinent Date. To the extent the Lessee has ananmed the Outstanding Noten pursuant to, and in accordance with. Sectiou 3.9(h) of the Indenture an of ' such Basic Reut Payment Date, the amount determineet pursuant to the immediately preceding hentence shall be reduced by the principal amount of l the Notes so assumed, taking into account any amounta paid on unch date in respect of principal instalhnents then due. Upon compliance in full by the Lessee with the foregoing provisions of this Section 13(g), the Lenor shall (no long as no Defanit or Event of Default shall have ocenrre.1 an.1 he continuing) Transfer the Undivided Interest to the Lewee. Ar. used in thii Section 13(g). the term "Signitiennt E xp..m li t u re" ; whall tuean expenditures by all of the CAPPO Participants in respeci of l Nonweverable Capital Improvements to (~ nit 2 (other than those re.piire.1 by Section af a) 1 A). ( B) or, to the extent ol' cotupliinier with Govermnental Actions not significantly more onerous timn those in etYeet on the t' losing f thin Lease) umi which. (il for the peri.nl to and meinding l 131ay Date.30.(C) 2011.] sha!! exceed a250.ulHl.no0. .aw *ncii arnonut inay he in-ervasett on each anniversary of the closing Date by the percenture meren-in the t 'onsiuner Price Imtex issueil from time to time by the lW. Department of Lahor, ilureau of Labor Statisties, for the region w hich I l inchides the HVPS Site and in respect of which th:* Owner Timtee or the ilwner Participant shall not perrnit the cost therror to be financed throngh
! the Lensor and (ii) for the period from [May 31. 2011J to the end of the Lease Term. shall exceed $100.000.000, as much amount may be increa ...d on each anniversary of the Closing Date by the percentage increase in the l Consumer Price Index issued from time to time by the (*.S. Department of Labor, Bureau of Labor Statistics, for the region which include. the DVPS Site. The term " Project", as used in thin Section 13(g), shall mean either l (i) an addition, betterment or improvement to Unit 2 which. in the opinion of an engineer welected by the Lessee and reasonably acceptable to the Owner Participant, would involve no more than a ingle major component and work integral thereto of l' nit 2 or (ii) a serien of additioux. het terment s ,
or improvements to (' nit 2 which are required by Governmental Action taken within a period of 3 months and which relate to matters of public health, aafety or the environment. (h) Acquindime of .idditional rapueilif. Except un perrnitt. d by see- i tion 10(h)(3)(vi) of the Participation Agreement, the Leswe aerem not to acquire or lease any additional espacity from BVPS or Unit ! .lurme the ALPIIA i -CURRENT ENDING PAGE CONDITIONS ARE INCONSISTENT WITH THE NEXT PAGE 043 00.00.00 _. I I I l t
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- 19 .
tive years preceding the expiration of'the Basic Leane Term untena at the ritne of such acquisition or lease, the Lennee han exereined its op' tion to renew this Facility Lease nr purchase the Undivided Interest. Hsc'rson 14. Optional Termination. (a) Termination Notice. linless a Default or an Event of Default shall
.have occurred and be continuing or an Event of Loss or a Deemed Loss
- Event shall have occurred in respect of which the Lessor shall have -
- demanded payment under Section 9(c) or 9(d). the Lessee nhall have th. -
! l option. exercisable by the giving of at leant 360 dayn' prior written notice ta -
" Termination Notic/*) to the Leoor, the Owner Participant and the Inden-ture Trustee (provided that the Leuce ahnll have delivered to tLe Lemanr an Offleers' Uertifieste to the effect that the Lennee's Board of Directors han l adopted und there in in etYeet a rennlution determining that Unit :! i* -
economically oh*nlete for any ren*nn and that the Lewee ahonhl =cek to dispone of n!! of itn interests towned or leaned) iii l' nit :!) to terminate thin Facility Leane on any Basic itent Payment Date after Decernher 1.1997 t the "Tirminution Dal,"). If the Lennee shall give the Lensor a Termination Notice, the Lessee shall, as agent for the Lesanr. une its best' etYorts in obtain caxh hids' for the purchase of the Undivided Interest. The Lenor shall also have the right to obtain such cash bida. cither directly or through agents other than the Lessee. The Lessee shall certify to the Lenor within ten days after the Lesnee's receipt of each bid (and. in any event, prior to the Termination Date) the amount and terms thereof and the name and addrenn of the party (which shall not be the Lessee or any Atliliate n( the Lenkee or any agent thereof) which submitted sneh bid. (b) Events im the Termination Dat. Un the Termination Date the . Lesnor shall (but only upon receipt of the male price and all additional payments specified in the next sentence) Transfer the Undivided lut* rest for canh to the bidder (which shall not be the Lennee or an AtYiliate of the Lenee or any agent thereof) that shall have submitted the highest hid on or l be before retrained the by Termination the Lesnor (subject. Date. The however, total to male the terms price ofrealized the Indenture at much wale = hall and the requirement that on the Termination Date there shall have been I' paid to the indenture Trustee an amount suffleient to pay in full the unpaid principal amount of all Noten Outsts iding on the Obsolescence Redemption Date and all premium, if any, ant' interest acanted and unpaid on such outstanding Notes as of the Termina ion Ne to accrue on the outstanding ALPHA e CURRENT ENDING PAGE CONDITION $' ARE 0 K. THE NEXT PAGE : 044.00.00 00 - I l l
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. 40 Noten ~ from nuch dat4 to the Obsolemeence Redemption Datel and. in' .
addition. on the Tennination Date the Lennee shall pay to the Leer ( A)
' the excena,if any, of the 8pecial Casualty Value~as of the Termination Date <*
nur the mp dde price of the Undivided interent and (B) any Baate but
#_ . due or accrued. au the case may be, to and including the Tennination DIste
,6.4
- '
- and an amount equal to any premium payable on the Outstandin,i Noten an di !'
-of the Ohnolescence Redemption' Dationd any interent to'a'eente on 'the Outstandit@ Notes from'and including the Tennination Date td the Ohao. a lencence Redemptiori Date, and shall pay to tho Persor(or Persom. entitled thereto all Supplemental Rent (other than Special Casualtyyalues. Upon W, .
compliance by the Lewee with the applicable provinioits of thin Seetien 14,
, the obligation'of the Lessee to pay Basic Rent due hereunder for uny peri..d after the Termination Date xhall cease and the Basic Leame Tenn *ludi em!
on the Terminathm Date: but the e bligation of the Ibce' to pity. Supple. mental Rent whJn uml an ihte shall continue in fullVorce and etYeer and
'ahall not he impnired by reudor. of any such termination if on or n* of th e .
Termination Date n' o sneh unle shall oeenr or the Lesace whall n'nt hat W , , emnplied in full with thin scetion 14. this Facility Leuse shall continue in : ftdt force iunt effect in acconlance with its tennu except that the Less * - shall be entitled to deliver one other Tenniuatio.tf Notice provided that with
*eennd Tennination Notice xhall not occur during the 1-year period follow.
iner much Tennination Date. The Lexxor shall he under no duty to solicit , bids, to inspiire into the etforta of the Lenace to obtain bids or otherwise
- 3 take any action in connection with any such sale other than to Transfer the W
(*mlivided interest to the purchauer named in the highest bid certified by the f.eksee to the Lessor or obtained by the Lesur, against receipt of the payments provided for herein. i (c) Early Tenninntion Notier. In the event that the Lecce shall fail to exercise its renewal option or purehuse option within .the time limit provided by Section 13(ab the Lexmor whall have the option ' un any Basic Rent Payment Date thereafter, on at least one yearn prior written notice (an "Earltf Tmninntion .W/ ice") to the Lemaec and the ludenture Truste*. j to terminate this Facility Leane on the Basie &nt Payment Date *peeitied . in auch notice (the "Eurly T, rmhiatum Dnie"). Any Early Termination ; Notice may be revoked by the Lexuor atsuy time on or prior to the 30th day preceding the Early Termination Date (the "Earle/ Tmnin </lon nmunil-ment Dale").1after which the Lenior shall he irrevocably committe<l to terndnate this Facility Lease on the Early Termination Date On or prior to ALPIIA _J
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i I 4 '. the Early Termination Commitment Date, the Lessor shall deposit with the Indenture Truntee conh in an amount (or a letter of creiht for =uch annatot of (1) any bank whose long term unsee.tred debt securitien are rated not less than Aa3 by body's and (2) if the Bonds are then rated by S&P. any bank whose long term unaccured debt seenritien are rated by S&P not less than the rating on the Bonds) equal to the unpaid principal amount of all Noten Outstanding on such date and all premium, if any, and interest l acerned and to acerne on and as of the Early Termination Date. On the
\ ' Early Termination Date, the Lenee shall pay to the Lessor any Basie Rent due or acerued. as the ease may be, to and ineluding the Early Termination n
Date, and nhall pay to the Person or Persona entitled thereto all Supple-mental Rent (excluding from nuch Supplemental Rent any amount due and owing with ren.pect to principal of, and premium, if any, on the Notes being prepaid on unch date, other than nny amonnt ol' principal nhieb unnld hme ben paid on much date if such Notes, were not being prepaid), whereupon th, obligation of the Lessee to pay any Basic lient for any penod after the Early Termination Date nhall eense ami the Lense Term shall end. Inu the atigations of the Lennee to pay supplemental itent when und as eine shall eenlinne in full force and etYect ami shall not he impaire.1 by reason of any such termination. 8serson 13 Econts of D*/ault. The term Erent of D+/aalt, wherever u.ed herem. nhall mean any of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary, or come about or be errected by operation of law, or be pursuant to or in compliance with any Applicable Law or Governmental Action): 1 (i) the Lenace shall fail to make. or cause to be made. (x) any payment of Casualty Value, or Special Casmalty Value when due or (y) any payment of Basic Rent within 5 Business Days after the same hall heeome due or (z) any payment of Supplemental Rent (other than Casualty Value or Special Caxually Value) incimling, without linnta-tion, any payments due under any Tax Indemnineation Agreement . within 20 days after the same shall heenme due or he demanded. as the cane may be: or (ii) the Lessee shall fail to perform or observe any cownant, condition or agreement to be performed or observed by it under ALPHA
._ CURRENT ENDING PAGE CON 0fflONS APE O K. THE NEXT PAGE 046 00 00 00 1
v._.
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. onic totson 4, sowat or utw eca cmeansoo (g-42 a-Section 101b)(3)(i) or 10(b)l3) Oil, of the Participation .\greement or Mection 7 or 11 of thin Facility Leane: or (iii) the Lense shall fail to perform its agreementa uct forth in .
' 8ection 5(al hereof; or (iv) the Lessee shall fail to petform or observe any covenant.
condition or agreement (other than thone referred to in clausen (i) through (iii) above) to be perfornied or ebnerved by it under this Facility Leane or any other Transaction Document, and such failure whall continue for a period of 30 dayn after there shall have been given to the Lessee by the Leanor or the Owner Participant a notice specifying auch failiare and requiring it to be remedied or (v) any representation or warranty made by the Lenxee in thin Facility Lease, any other Transaction.Docinnent (other than the Tax Indemnitientinn Agreement *) or any agr** ment, document nr e rtiti. eute delivered by th* Lexx-* in enunection herewith or therewith hall prove- to havr becu inenrrect in any material nspect when auch representation or warranty wa= made nr given and shall reinain material ain1 materially inenrrect at the time in tnention: or (vi) the I.ex~ee whall connnence a voluntary case or other proceed. ing seeking li<ptidation. reorganization or other relief with respect to itself or its debts umler any bankniptey, insolveney or nther similar
! law now or hereafter in elYeet or weeking the appointment of a tnistee, receiver, liquidator, euntodian or other mimilar utlicial of it or nny unbatantial part of its property, or shall con ent to any uncli relief or to the appotutment of or taking of ponsession by any much official in an involuntary case or other proceeding commenced against it or shall make a general assigninent for the benefit of ereditors, or shall take any corporate action to authorize any of the foregoing; or an itivolun-tary case or other proceeding shall be commenced against the Lessee neeking liquidation, reor anization or other relief with reapeet to it or its debts undar any bankniptcy, innolveney or other sintilar law now or hereafter in effect or seeking the appointment of a tnistee. receiver.
liquidator, custodian or other nimilar otHeial of it or any unbatantial part of its property, and sisch involuntary case or other penceeding shall remain undismixsed or unstayed for a period of 60 conkrentice l days:or ALPHA l i CURRENT ENDINO: PAGE CONDITIONS ARE 0x THE NEXT PAGE : 047.00.00 00 l l 4
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- (vii) final judgment ' for 'the payment of money in exceh of -
410.000.000 shall be rendered against the Lmee amt the Leoee shall not have discharged the sarne or provided for its dineharge in Weor-s J> , i' dance si
+ '.
executlp,.h thereof ir.s
*soddnterms orfrom 60 dayn' houded the entrythe anme thereo6 or or procured a ytay of' n2 e (viii) a pqynu at or other material default by the Lennee imder the
$ [- Operating Agreemeht and the lapse of 15 Basinend Days without the '
( F ' i> . Leswee having eured such default: provided, however.1 hat for purposes of this clause if the Leasce shall have disputed de exintenee or nature r of a. default and such dispute shall have become the *ub.ieet ot' un
~
l ._ arbitration ninter the terms of.Section ' of f.he Operatisqr Agreement. A , wuch 15 Baninexa Day period = hall commence on the date of the final ye - f I determination of the board of arbitratmx under auch provisiom or
( 3 n e4- < , ., (ix F (1) the LewMn >. hall fail to pay when due '(whether by-p4 j *ch.%hded maturity. re9hireil prepayment, deceleration. demamt or y otherwinc t any Debt if the principal amount (or equivalent) ther*of t*
A gre44r-than *20.000.000 and such failure shall continue after the a applicable Drace pe,rtod. if any, apecified in the nitreement or.instrn! < ment relating to. vnth Debt. or (2r any other default under any /"
-agreement or.itwirnment relating to any such Debt. or any other event.
p sh.dl occur and shall continue after the applicable graer period if any. Tapiteifled'in such agreement or instrument, if the effect of unch default "or event is to accelerate the maturity of such De hti or
+
' (x) the Lessee ( A) shall fail at any time, to provide or maintain a Letter of Credit which complien with all or ihe terms and comtitions of Rection 19(h)(3)(ix) of the Participation Agmement, whether or not the Lessee han used ita bent efforts to obtain and maintain such Letter of Credit or (B) whall fail to provide a renewal or replacement Lettar of Credit no complying (1) not less than 30 days prior to the stated 9 s
termination date of an Existing Letter of Credit. (2) within 20 days ,
^
after the receipt by any Benenciary of notice that an Existing Letter of Credit will be terudnated prior to its stated termination date under eiremnstaneen in which at least 30 days' notice of such termination is required and more than 30 days remain before the ntated termination date of the Existing Letter of Credit or (3) concurrently with the ceceipt by any Beneficiary of notiet that an Exinting Letter of Credit will he terminated prior to its stated termination date under circum. ALPHA - ' l ,5 CURRENT ENDING PAGE CONDITIONS ARE D K, THE NEXT PAGE : 048.00.00.00
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$ '< : ~ l ep 44 staneek in which Jens than 30. dayn' uotice 'of. wuch terinination .in . required or less thun 30 dayn ternain until the stated termination dat'e - of the Existing' Letter of Credit; prended. Amrerer, that'it ahall not l . constitute 'ee: Event of Defatdt hereunder if the Lessee shall be
- providing and maintaining a Letter of Credit whie'h complies with all of g
4 the terrns and conditions of elause (A) of the first paragraph of Section
.10(b)(3)(ix) of the Participation Agreement and would continne to -
comply therewith in respect of the amount of 3fodified Special(%nalty Value applicable for the next aneceeding 30 day period but which fails to comply with the terms of clause (B) of such paragraph solely as a retsult of an adjustment to 3!odilled Special Casually Value pursuant to
' Section 3(d) hereof, which mljmstment has been etteetive for not more than 180 days; and pmWde,l. /urther, that it also shall not ennatitute nn Event of Defaidt heremoler purhuant to Section 15(x)( A) above (the happening' of which in molely a rrault of the happenimt of an event described in the necond'nentence of the third paragrapis of Netion 10thH3)(ix) of the Participation Attreernenti or Section 15(xl(Bi t 1) above, if IWI the Leuce han propo ed to the Beneticiarie* a Letter of Credit Bank (as provided in the definition of Eligible Banki wideh han heen anxigned a rntimt by llanedy'a 'in respect of its long term un-neeured debt meeuritien of not leu than Ann. (X) any Beneficiary han objected tu nuch Letter of ('redit Bank for the reasonn nel furth in clause (B) of such definition. (Y) the Lenxec has utfered to pnrehuse the Undivided interest on the date ten dayn prior to .the date of expiration of the Existing Letter of ('redit (the "purrA<tv J<d ") in consideration of the assumption by the Lehnee of the Outs,tanding
' Notes pursuant to, and in accordance with. tiection 19(b) of the Indenture and the payment to the Lessor of the 3fodified Special
('asualty Value in effect on the purchase date (if such date in a Basic Rent Payment Date) or (in all other ennes) the Basie Rent Payment Date next following sneh date and (Z) to the extent such offer has been accepted by the Lennor, the Notes have been validly assumed by the Lenace in accordance with Section 3.9(b) of the Indenture and much amount han been paid to the Leswor mi the purchase date in inunedi-ately available fumla: ur (xi)(a) Unit 2 has failed to achieve electric output of at lea t 30'"< of estimated rated capacity of megawatta during a trst permd of at least 100 consecutive hourn by December 31.194 or (h) I' nit : ha-ALPitA CURRENT ENDING PAGE CONDtTIONS' ARE 01 THE NEXT PAGE : 049 00.00.00 - I
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PCN: 049.00.00.00 . S/N: 4
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p . _ . i l# 7 45 L failed to achieve electrie output of at least 95fi of' enthnated rated capacity of . megawatta during a tent period l of at leut 100 - consecutive hours by provided that if (~ nit 2 han
' failed to reach such capacity for such period by auch date due solely to ly Governmental. Aetion or direct or indireet interference by any Govern-4 mental Authority, then much date shall be extended by a period of tirne equal to the period of time Govermnental Action or direct or imlirect interference by any Governmental Authority so impeded its operation l but in no cane longer than 18 months: or (xii) the Lenneo shall fail to perform or ohnerve any covenant or -
y agreement to be performed or observed by it under Section 10ib)(3)(v) of the Participation Agreement and much failure shall continue for a period of 15 dayn after there shall have been given to the Lenner by the Lexuor or the Owner Participant a notlee upecifying anch failure and reituiring it to be remedied and stating that such notice in a Notice of Defanit hereunder. H w rio s 16. Hina dh s, (al R"ardies. I'pon the occurrence of any Event of Defauh and o long us the name s. hall be continning, the Lensor may, to the extent permitted by Applicuble Law, exercise _ one or more of the following - remedies except as hereinbelou exprennly otherwise wt forth, as the Lennor in its nolo dineretion shall elect; (i) the Lennor nuiy declarr this Facility Lease to be in default by written notice to much effect given to the Lewaee, or may, by notice to - the Lensee, rencind or terminate thin Fnellity Lease; (ii) the Lessor may (x) demand that the Lennee. and thereupon the Lessee shall, return ponnennion of the 1.'ndivided Interent promptly to the Lessor in the manner and comlition required by, and etherwise in accordance with the provisions of, thin Facility Leane an if the Undivided Interest were being returned at the end of the Leane Term and the Lesnor shall not be liable for the reimbursement of the Lessee for any costs and expenses incurred by the Lessee in connection l therewith and (y) enter upon the BVPS Site and take inunediate possession ut (to the exclusion of the Lessee) the (*ndivided Interewt. by nummary proceedings or otherwise, all without liability to the Lennee for or by reaxon of much entry or taking of possennion, whether i ALPHA CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 050.00 00.00 1 - I i i
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..for the restoration of damage to property consed by unch taking or otherwine; (iii) the Lessor icay sell the Uudivided Interest or any part '
thereof, together with'any interent of the Lessor under the Assignment and Assumption Agreement, the Additional Snpport Agreement and . the Ground Lease at public or private male, as the Lennor may-determine, free and clear of any rights of the Lessee 'in the I'ndivided Interest and witnout any duty to account to the Lessee with respect to
' wuch netion orinaction or any proceeds with respect thereto (except to ~
the exteht rerluired by clause tv) or tvil h* low if the Lessor shall elect to exercise its rights thereunder). in which event the Lexxce's obliga-tion to pay Basic Rent hereunder for period 4 conuneneing after the '9 date of auch male shall be terminated or proportionately reduced, as the cm./ nmy be (except to tiv extent that thie Rent in to he inelnded in - computation.s under clanne tvi or t vil below if the Len.<or whall cleet to exereine its right= thereundern tid the Lenor may hold. kerp idle or tenu to others all or any part of the l'ndivided Interext, um the Lewor in its mole dixeretion muy determine, free uml clear of any rightm of the Lenner und with.mt any i duty to account to the Lexhee with respect to much action or inaction or for any proceeds with respect to much action or inuetion, except that the Lessee's obligation to pay Basic Rent for perioda commencing after the Lessee shall have been deprived of use of the l'ndivided Interest pursuant to this elause (iv) shall be reduced by an annount equal to the net proceeds, if any, received by the Lessor from les sing the 1.*ndivided
-Interent to any Person other than the Lexue* for th e ame perio.1= or any portion thereof; (v) except in the case of an Event of Default specified in clause -
. (iii) of Section 15, the Lessor may, whether or not the Lessor shall have exercised or nhall thereafter at any time exercise its rights mnter claune (i), (ii), (iii) or (iv) above, demand, by written notice to the Lewee specifying a payment date which shall he a Bamic Rent Payment Date not earlier than 10 days after the date of such notice, that the Lennee pay to the Lennor, and the Lessee shall pay to the Lenwor, on the i Basic Rent Payment Date =pecified in such notice, as liquidated damages for loan nf a bargain and not an a penalty (in lien of the Basic Rent due after the Danie Rent Payment Date apreified in such notice),
i. ALPIIA l 1 i I CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 0$ Loo.00 00 1 - 1
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.-'. 044I0 20150N 00wNE OF htw vomet 4W92s5500
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i any unpaid Rent due thrimgh the Basic Rent Payment Date apecified in auch notice phin which#rer of the following ammmt= the Lea or iri. its sole discretion, ahall specify in such notice (together with interent ou nuch amount at the interest rate specified in Section 3(b)(iii) from i the Basic Rent Payment Date specified in such notice to the date of - actual payment): y, ( A) an amount equal to the excess, if any, of (1) Camunity Value, computed as of the Basie Rent Payment Date specified in
.l wuch notice, over (2) thii Fair 3farket Rental Value of the l'ndi-vided luterest (determined on the hanis of the then actual conili-l tion of l' nit 2) until the end of the remaininst tineful life of l' nit 2.
after discountinir auch Fair alarket Rental Value semi annually to present value an of the Banie Rent Payment Date specified in unch
- notice at the Discount Rute then in etYeet; (B) an umount e iual to Ihe excess.' if any, of. i1 i : *uch .
Canualty Value over (21 the Fair 31arset Sale = Value of the Ifudiviled Inter
- t (determined on the hanin of the then actual '
l condition of l'oit 2) an of the Hanic Rent Payment Date speciried in much notice; (C) an amount e.inal to the excesa,if any, of (1) the present value as of the Basic Rent Payment Date specified in siich notice of all installment of Basic Rent until the end of the Basie I. cane Term or the Renewal Term,'as the case may be. dineounted semi-annually at the Dimeount Rate then in etfeet, over. (2) the pre ent value as of such Basic Rent Payment Date of the Fair.3!arket Rental Value of the l'ndivided Interest (determined on the bani, l of the then actual condition of l' nit 2) until the end of the Da ie Leane Term or the Renewal Term, as the ca e may be. discounted, semi annually at the Discount Rate then in etYeet: or (D) an amount equal to the highest of (1) nuch Ca*nalty Value, (2) auch dineounted Fair Alarket Rental Valne and (:0 such Fair Starket Sales Value and, in thin event, upon full payment by the Lessee of all sums due hereunder, the Lemsor shall, at its option, either Transfer the l'ndiviiled Interest to the Lessee, or promptly nell the I'ndivided Interest and pay over to the Lessee the net proceeds thereof up to the amount set forth in (1), (2) or (3) above actually paid by the Lensee to the Leusor: ALPHA CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 052.00.00.00 _.- 1 I i
.1 i
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$ty* S18CJA1J f $fvtESGivLE004 857.J #de 1150uatiPit00 SCR3.Mm773000lf5 fx? Fmt L.is C. no Moo 5
, $.. 3 s,. .=w soo u. we ese poo vnai e JOS: Y38973 PCN: 052.00.00.00 3IN: . 4'vLE cuto to Son sowze or uta vonn aumassoo I .GWP _
1 s 1 4s j
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(vi) except 'in the came of an Event of Default specified in clause (iii) of Section li if the Lenor whall have auld all the L'ndivided Interent pursuant to elause (iii) above, the Lessor,in lieu of exereinintt its rights under clause _ (v) above with respect to the l'udivided
' Interest may, if it whall no elect, demand that the Lennee pay to the Lessor, and the Lessee nhall pay to the Lessor on the date of such sale.
as. liquidated damagen for loss of a bargain and not an a penalty (in lieu of Basi:. Rent due for periods commencing after the next Danie Rent Payment Date following the date of such Sale), any' unpaid Danie l Rent due through such Basic Rent Payment Date. plus the amount of any deficiency between the Sale Proceeds and tbnalty Value com. ! puted as of Nuch Oasie Nent Payment Date, together aith interest ni die interest rate specified in Section 3(b)(iii) on the amount of much Rent and auch deficiency from the date of much nate until the date of ' actual payment: (vii) in the ce of an Event of Default npecified in elanne tiiit of sectinn 15, the Lenor may demamt. by written notice to the Le a - apecifyiur a payment date which shall be the tant Basie Rent Paym-nt Date of the Bamie Leane Term. that the Lewee pay to the Lensor, and the Lc==ce shall pay to the Lemmor, on much lla. sic f(ent Paytoent 1) ate an liquidated damagen for lona of a hargain und not an a penalty, any unpaid. Rent due through such Banie Rent Payment Date p'.n* un l amnnnt (not less than zero) equal to the Fair Market sales Value ..f the Undivided Interest (determined on the banin of the then acinal l condition of Unit 2) determined as of such llanie Rent Payment Date (together with interest on such amount at the interest rate spreilled in Section 3(b)(iii) from such Ba>,ic Rent Payment Date specified in much notice to the date of actual' payment) .t r.eul upon receipt of much payment the Lessor shall (or may prior to the receipt of such pannent > I Trannter to the Lessee the Undivided Interent) provided, however, that l the Lensor may not exercise the foregoing remedy if the Lesnor shall have failed to Transfer the l'udivided Interent to a purchaner (which shall not be the Lennee or an Affiliate of the Lennee or the agent thereof) that aball have (i) nubmitteil a bid on or before the date on which such Event of Default arose, but in no ease before the date on which Fair 31arket Malen Value han heen determine <l an provided in Section 13(e), for purchase of the l~ndivide i Intercat un the last Banie Rent Payment Date for a purchane price which in not lens than the Fair ALPIIA j CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 053.00.00.00 - l 1 f 1 1' l 1
, M ta*ae >e. orated 'spewe mi iv .u*a /AA vuS Jcts 1 Peccn o scn :aaoted 9153,atJ Pt4ER itE:P&;tagag
). w.47 21 4
$crie 1150sA1J IsifLES;5f vt1004 est.> rue. sis 00ANM90 scaATC**Ff3000175 TJt' Fait Leos C. ;00 MCC $tvit ket 4h fate scat 300*pointo test test 1)c0 vnnt a JOS: Y38973 PCN: 053.00.00.00 S/N: 8 c iC eerson some or etw on emmmoo p
49 Market Salen Value an no determined, and (ii) tendered paytnent in full in imtuediately available funds to the Lesxor on or prior to the date upon which payment by the Lessee would otherwise he required from the Lesnee under this clause (vii). Tlte Lessor agreen that it willif and to the extent no requested by the Lessee. use reasonable eiforts for a two year period (or a shorter period which shall connnence on the date Fair Market Salen Valne has been determined as provided in Section 13(e)) ending on such last Basic Rent Payment Date, to fin-1 a Person l willing to submit such a cash hid: provided, however, that the failure of the Lessor to do no shall not relieve the Lessee of its obligations under this clause (vii); or (viii) except in the case of an Event of Default specified in ebm e (iii) of Section 15. the Lessor may exereine any other right or remedy that may be available to it under any Applicable Law or proceed by appropriate enurt netion to enforce the terms hereof or to recover dan ~.ros for the breach hereof. (b) L # /,ns, . L reaciaion or termination of thin Facility Lease. in whole or in part or reponewinn of the Ifndivided Interont or exercise of any remedy under paragraph (a) of thin Section 16 xhall, except as ; speci6eally provided therein. relieve the Lessee of any of its liabilities aint obligations hereunder. In addition the Lessee shall be liable, except as otherwine provided above, for any and all unpaid Rent due hereunder before. after or during the exercise of any of the foregoing reinedies. < including all reanonable legal fees and other costs and expensen incurred by j the Lessor or the Owner Participant by reason of the occurrence of any Event of Default or the exercise of the Lessor's remedien with respeet thereto. At any sale of the (*ndivided Interent. or any part thereof pursuant to this Section 16. the Owner Participant, the Lessor or the in lenture l Trustee may bid for and purchase such property. (c) Remedies ('umulative. Except u* expressly set forth therein, no I remedy under paragraph (a) of thin Section 16 in intended to be ewinsive, but each shall be cumulative a .d in addition to any other reine ly provided i under such paragraph (a) or ,therwise available to the Lessor at law or in ' equity; provided, that if the i mee is in default of its payment oblientions under Section IG(a)(vii), tF Lessor may exercise ita nther remedies under Section 16(a) (except that the maximuin amount payable by the Lessee iri the event of the exercise by the Lessur of any of the remedies pr 4ided for ALPIIA 4 CURRENT ENDING PAGE CONDITIONS ARE 0x THE NEXT RAGE : 054 00 00.00 l l
~
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.~)0 in Section itita) tv) or (vi) shall not exceed the total amount payable by the Lehsee under Section iti(a)(vii) minus the atuount provided in unbehme.e (2) of clause (Ah (B) or (C) of touch Section 16(a)(v). if the Lessor elects a remedy mpecified in naid clause ( A), (B) or (C), or the difference referred to in Section 16(a)(vi),if the Lessor elects the retnedy specified in Section Ifi(a)(vi) hereof). No exprean or implied waiver by the Lennor of any Default or Event of Defanit hereunder shall in any way be, or he construed to be, a waiver of any futme or anhnequent Default or Event of Defanh. The failure or delay of the Lessor in exercising any right granted it hereninier upon any occurrence of any of the contingencies set forth herein shall not
{ constitute a waiser of any sneh right upon the continuation or recurrence of ! any much contingencies or nimilar contingencies and any single or partial exereine of any partien!ar right by the Lexxor shall not exhaust the same or cou nt it ut e a uniser of any other right pros ided herein. To the extent I permitted by Applienble Law. the Les-e hereby w aives any righta now or l herentter conferred by statute or otherwise whieb may rmpure the Le>=or to v 11. lenw or otherwiu nw the l'ndivided Interent or l' nit 2 in mitigation of the Lessori darnagen um wet forth in paragraph (a) of thih Section 16 or which may otherwise limit or modify any of the Lessor'n right 3 and remedien provided in this Section 16. I (d > R.ro rein n! Other Rights or Rom *k. In a<hlition to alt other rights and remediem provided in this Section 16. the Leu.or tuay exercise any other right or remedy that may be available to it under Applicable Law ; or proceed by appropriate court action to enforce the terms hereof or to ' recover damages for the breach hereof. SD TION 17. .Votice s. Ali communications and notices provided for in this Facility Lense shall be in writing and shall be given in person or by meaux of telex. telecopy, or other wire transmission. or mailed by registere i or certitied mail addressed an provided in the Participation Agreement. All sneh conununientionn and notices given in much manner nhall he etYective on the date of receipt of nuch communication or notice. S v Tion 18. Sucensors and .Inigns. This Fneility Lease. including all agreements, covenantn. imlemnitie , representations and warranties. Shall be binding upon and inure to the ALPIIA I J CURRENT ENCING PAGE CONDITIONS ARE O K. THE NEXT PAGE 055.00 00.00 - i 1 1 I 1 l
*- M Bow se 'oferatee *,petetug Spitem Vat VMs_ Job i PDCOMGROGn 20eJC8641180, A L)(PAdli f *El#4JE7 'ME - J.W.47 ' 'a dS
= si,. stio.Ataistnasistnacotestr sae stsoonepeco sC2Af>ff00C0175 Tat 1 W,; 40 s eg itaa lt00'soents, Nent eat 2600 ' Ymt a ' JOS: Y34973 Fast; imoa c 100 Mco stnt '
PCN: 065.00.00.00 S/N: 1-onto ecisca sowne or nr* voa a m e:4ssoo Al benefit of the _Lexsnr and its snecennors and permitted.axxignx. anni the
. Lennee and its utiecenxors antt, to the extent permitted herebyi annigns.
r . SKritv4 19, Right to Perform for iswr,. If the Lessee shall fail to make any payment of Rent to be made by it, or shall fail. to ' perform or comply with any of its other agreements contained herein. or fail to tuake any payment to be made by it under the
- Operating Agreement or any 3taterial Project Agreement, or shall fail tu perform or comply with any of its other agreementa contained in the
~ Operating Agreement or any Material Project Agreement, either the f.euor or the owner Participant may, but ithall n6t he obligated to. til to the extent not prohibited by Applicable Law, tender such payment, or to the extent not prohibited by Applienhie Law, and in the enke of the Operatirnr Agreement or any 31aterial Project Agreement, to the agrut not expreuly prohibited thereby, the Operatine Agreement'and or such Material Projret.
Agrrernent effect xneh performance ur compliance, aml'the amount nf snen-payntent amt the amonut of all coats and expensex (inelnding,; withont ' liinitation. attorneyn' aml other pr6feuiomdn* feen and expennen) of ths Lennor or the owner Participant, an the came may be, inencred in connection .
> with such payment or the performance of or compliance with ench agreef ment, as the came may he, together with interent thereon at the higher of the Overdue interest Rate or the Penalty Rate. shall be deemed Supplemental Rent, payable by the Lessee upon demand. The foregoing prusisionn of this Section shall not however. he retid into the Indenture in derogati6n of the limitation' npon the rights of the LeNsor and/or the Owner Participant to cure DefHnttM or Events of Det'anit as provided in Section tie of the Indenture.
$sertos 20; Additional Coronants..
The Lessee agreen to comply with and to pay an Supplemental Rent, all amounta payable by it under the provisions of Section 13 of the Participa. tion ' Agreement and under the provisions of the Tax Indemnitleation Agreements, which provisions are incorporated herein by this reference an fully as if set forth in full at thin I ace. d The Leuee agrees to comply with its covenants and agreements set forth in Sections 10(b).14 and 16 of the Participation Agreement and Articles III, IV, V and VI of the Amigmnent and Assumption Agreement and its agreement set forth in the Additional L ALPilA l CURRENT ENDING PAGE CONDri!ONS ARE 0.K. THE NEXT PAGE : 0 % 00.00.00 - 1 I n , l
L
', M i Sanne -Mereted ', e6etMg 5, stem VA4 7M$ ~ < 1sti 1 P#COMr#9CM 20eCCALC 1;$CJa.J 4'.PAGER 5,s.e7 . Ji(Kf:#Aa(2 li . Eag. >
^ $tyis.' SL50JA1J t37YLE$)$fvtt004 :57 s : fine $1800ahre001CAafCauft3000279 fxT . 8me C. L00 mod Sty (g' s.,e ,,. ne scom. amu. ani ne no. vmi e < JOS: Y34973
. ceno reisers seven or new voen PCN: 054.00.00.00 SIN: 2 umtmsoo t ,
'W i-i 52 Support Agreement which covenanta and agreernenta are iricorpotuteil herein~ by thin reference as fully an if wet forth in full at thin place.
f'iKt'TtON 21. Ground [.aras! Lessee 'hereby assumes and will duly and punctually observe atul
. perform, at its expense, all covenants, terms and conditions imposed upon Lessor, an ground lessee under the Ground - Lease. (including without limitation the payment of all rents and other sums), to the end that Lessor, na ground lessee under the tiround Lense, shall have no responsibility for conipliance with the prmixions of the tiround Lease und aludi he indenmi.
fled against all liability, loma, cost ami expenses resulting from nonperform-anee therentnler. < ( HerTuox 22. Aw. nalou nt,< anol JUiwllanonns. t a ) lun nelnu nts in II*riting. The terms of this Facility Lease may not he united, altered ino litied, arnended, supplemented or terminated in any manner whatno.6er except by written inntramont aigned by the Lennor and the I.enhee. ( b i NuMeul. (1) All indemnities. repreventatinna and warranties contained in thin Facility Lease and the other Trannaetion Documenta and the Financing Documents and in any agreement, document or certificate
- delivered purxnant hereto or thereto or in connection herewith or therewith
< hall unrvive. and continue in effect following the excention and delivery of .I thin Facility Leane and the expiration or other termination of thi* Facility Leane.
(2) The obligations of the Lenace to pay Supplernental Rent end the obligations of the Lensee under Sectioux 5. Iti.19 and 20 herent' uhan
- survive the expiration or termination of thia Facility Lease. The exten> ion of any applicable statute of limitations by the Owner Truntee, the Indenturr l Trustee, the Lessee, the Owner Participant, any Loan Participant or any Indemnitee shall not affect such survival. The obligations of the Lewee under Section 20 are expressly made fcr the benefit of, and shall be enforceable by, any Indenutitee, separately or together, without declaring thin Facility Leane to be in detaidt and notwithstanding any ansignment by the Le==or of thin Facility Leane or any of its righta thereunder or any di= position of all or any part of any interest in the Undivided Interect.
I l' nit 2 or any other property referred to in thin Facility Lease or any other ALPHA CURRENT ENDING PAGE CONDITIONS APE INCONSISTENT WITH THE NEXT PAGE : 057.00 00.00 - 1 I 4
, ,.,, eci , ~nn wm var vus xe recoumor o.cea t sLAu esets s>E s ctm a ent s.1,. 47 nc si, stsoeu (stytisisivtsu est a rw sisouc+ipeoo scoarattsooons te em one. c_ too woo styte i so s.w =a 4co emin wi =4e uoo vm it JOS: Y38973 PCN: 057.00.00.00 S /N: 1
. omo toisen sc*u or men voan mmssoa i 51 Tninnaction Doetunent or Financing Document. All paymenta required to be made pursuant to Section 20 mhall be made directly to, or an otherwise requested by, the Indemnitee entitled thereto upon written demand by such Indemnitee. (c), dererability of Proclaions. Any provision of thin Facility Lease which may be determined by competent authority to be prohibited or unenforceable in anyjurisdiction shall as to such jurisdiction. he inetTective i the extent of such prohibition or unenforceability without invalidating tla remaining provisionn hereof or thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or remier unen. l forceable auch provision in any other jurisdiction. To the extrnt permined by Applienble Law, the Lenxee hereby waiven any provinion of law w hich renders any provision hereof prohibited or unenforceable in any re<pect. 60 Tno L"tue. This Facility l, ease in intended an. and < hall conui. tute, an agreement of leane and nothing herein shall be ennst rue.1 a- l conveying to the Lessee any right, title or interent in or to the Undivided Interest except am lessee only. (e) Original Entu. The single executed original of thiu Facility Lease snarked "TIII8 Cut *NTERPART is TIIE ORIGINAL iHI*NTER. PART" and containing the receipt of the Todenture Trustee thereon shall be the " Original" of this Facility Lenne. To the extent that this Facility Leune conhlktllteS ebattek paper, aS such terin kW dei}ned in the Uniforin Commercial Code as in effect in any applicable jurisdiction, no security interest in this Facility Lease may be created through the transfer or possession of any counterpart other than the "Origitial" (f) Governing Laic. This Facility Leaxe shall he governed by and constnied in necordance with the law of the State of New York. (g) Headings. The diviaion of thin Facility Lease into meetions, the provision of a table of contenta and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of thin Facility Lenne. (hn (%cerning the Girner Truste . FNil is entering into thin Facility Lease solely as Owner Tnistee under the Tntst Agreement and not in its individual capacity. Anything herein to the contrary notwithstanding, all and each of the representations, warranties, niulertakings and agreernents herein made on the part of the Owner Tnatee are made and intended not as ALPilA CURRENT FCING PAGE CONDtTIONS ARE 0.K. THE NEXT PAGE : 058.00.00.00 I I
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- s. 3<o.83 n as. -a Sivw:. StloA1J tSTYLis)S7vLID04 81T J - 8.ir $1&DUA9tP*00 $Cneftm* TOG 001*S TAT .. Fmt: L*4d C. 100 adoo STYLt 1
'/ w si am stee anopeasemu. sent sae 00 vs.u a - JOS: Y38973 ' PCN; 064.00.00.00 SIN:- 1
- 5 :mc tetson .ecret or atw voax m:42s1500
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=6 personal reprementatioux, warrantie<, undertakings and agreernents by or for the purpose or with the intention of binding FNB pernonally bitt are made and intended for the purpose of binding only the Trust Estate, and this Facility Lease is executed and delivered by the Owner Tntxtee solely in- ,
the exercise of the powers expreuly conferred upon is as truxtee under the ' Trust. Agreement; and no -personal liability or responnihility in assumed hereunder by or shall at any tirne he enforceable againxt FNB i.r any .. successor in trust or the Owner Participant on acenunt of any reprmenta. I tion, warranty, undertaking or agreernent hereunder of the Du ner Tn.stee, either expressed or implied. all such personal liability, if any.. heine exprenty waived by the Lenee, except that 'the I.essee or any. Perveii claiming by, through or under it. making claim heriunder, may lunk in the Truxt F,atate for satisfaction of the name and tLe Owaier Trtister nr its suceraaor in tnist an upplienble. xhall be personally liable for N nun gro - negligence or willful misconduer. If a nueve=nor owner tniste . appointrd in acconlance with the tennx of the Tnint Agreement. nuch uncernanr owner trustee almil. without any hirther act. *nceerd to all the right+. dutiew. immunilirm and obliitutions of the owner Tntxtee hereunder ami the predecessor nwner tninter whall be releaxed frotu all further duties umt uhligatinux herrumler.
,(i) Lieu of Leone /udentu re. The Lehnee hereby agreen that. any
' tranafer of all or 'any part of the property which is nuhjeet to the tien of the Indenture. to the extent much lien cannot he releaned. whall he transferred subject en such lien.
-(j) Counterpart E'rerution. This Facility I.enne muy be executed in
' any number of counterparts and by each of the partien hereto or thereto nu weparate counterparts, all such enunterparts together ennstituting but one and tne name instrument.
I ALPHA l CURRENT ENDING PAGE CONDIT!ONS ARE OX THE NEXT PAGE : 059.00 00.00
.1 l-
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. . at **0Corde,:= :)+Mos a ;.n.a ;3 26.:.gs { er sa .ro s q ,,w...
O $tve: b1104U ts*VLt51$7*L5002 857 J ' 8' ..e' " 5 re00 Scarf;wi?f 3000p4 f a? 13 llCU.t9 sme unos C l00 acc S?vLE
,. Set sa F .e seme ::4ocupan seu neaovita JOB: Y38973 PC. 059.00.00.00 S/N: 1 owie soisca so*me or urs, +w - u e: nce i
.3.1 lx WITns- Wilentsor. each of the partien hereto int
- nui*eil ilu-Facility Lease to be iluly exectitral in New York. New York by an ottierr therriutto iluly aitthorize l.
i Signed anil acknowloileoil by Ohio oitto Etusox ConeAxy Eilison Contpany in the Isresence of: By: Narne: H. P. Bneg
Title:
Vice President Signed anil acknowledgeil by The Tate Pinvr NATtosas. BAw or First National Bank of Boston. Bowros not innlividually but solely not indivulnally but solely an an owner Trust.a.a as afor*<a .I owner Trust ** an aforesaid in the presence of: By: Nanie: Robert .I. Ihnni
Title:
.\wistant Vice President i ALPIIA l CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 060 00.00.00 I l i_. i l
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I
. b i s use e3.ou an am t 'ue 30 vmt a J J28: Y38973 PCN: 060 00.00.00 SIN:. 2 j o .NIC FC150N 8CwNE OF hf h 503 (21. 424 7,00 j l 1 t j 1
1 Sei I STATE OF NEW YoH* ('orNTY of N EW YoNK "" B F.Fo R E ME, a Notary Public in ami for said County and state. i pernunally appearcel the ahose.naineil Onto EiJisos t 'ourasv. by !!. P. Brno, one of ita Vice Presidrnts, who acknowledged that he did aign the foregoing inninunent on behalf of naid Corporation by anthority ot* itw Board of Dirretors anil that the same in the free act and deed of naid Corporation and his free act and deed individually and as such officer. IN TexTniovy WuERMoF. I have herennto set any hand and official weal
! at New York, New Yurk this day of september,19m7.
Skal. ;
,v.st.o .g }*nist,'o
.\l,s t 'onotum inn E spirem:
STATE of NEW YORK l corsTV or NEW Yuenc f* Bsvoar Me, a Notary Public in and for said County and state. personally appeared the above named Tne FinsT Nartosat. Baxx or Bostos, by Ronnat .l. Di'xx. its Araistant Vice President, who acknowl-edged thut he did sign the foreroing instnament on behalf of said National Banking Axuociation by authority of its Board <,f Directors and that the same is the free act ami deed of said National Banking Association cml his free act and deed individually and an anch ollieers. IN Tr.xTntoxy Wurnr.ur. I have herenuto wet my hand and official wul l at New York. New York this day of september,1937. S Ea t.
.voorer r,o f *nI,I,e 3!y Connnimnu Espirem ALPHA THt$ 15 THE LAST PAGE. -
1 I
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9, - usc.a:i7nnst<tasoa ssi s := saava.: n:o scearrert:ccc:.[rs rJ '[7 "
, . m i a ce .a stsou s w u w,i ne :: mi a ; JOS.Y38959 PCN: 001.00.00.00 S /N: 12 CM10 (01504 C0 BCWNE 3r NE A V09% J;pe's3500 IlDE MARKED TO SHOW CHANGES PARTICIPATION AGREENIENT
( dated as of 5eptember 15.1987 among SECURITY PACIFIC CAPITAL LEASING CORPORATION, as Osener Participant THE ORIGINAL LOAN PARTICIPANTS LISTED IN SCHEDULE 1 HERETO, as Original Loan Participants BVPS FUNDING CORPORATION, as Funding Corporation THE FIRST NATIONAL BANK OF BOSTON, in its indisidual capacity and as Owner Trustee under a Trust Agreement. dated as of September 15,1987. with the Owner Participant. as Owner Trustee IRVING TRUST CO.\lPANY, in its individual capacity and as Indenture Trustee under a Trust Indenture, \lurtgage, Security Agreement . and Assignment of Facility Lease, dated as of September 15,1957, with the Owner Trustee, as Indenture Tnntee and OHIO EDISON CONIPANY, as Lessee i 1 i Sale and Leaseback of an Undivided Interest in l Beaser Valley Power Station Unit 2 SPCLC 1 _ CURRENT Eh0!NG RAGE CONDITIONS ARE 0.K. THE NEXT PAGE : 002.00 00 00 i i
L 5N nso aIJTstv.Adrhtsd est.: s.. s:ssuattiredsdaiSErAIo}[a~r7" r .
. waa s.n L 12000Mp.mts. W.t . ia4e 30 vnnst at . JOS: Y39969 PCN: 002.C.00.00
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t OMio toison to : Gowne or serw voax t:tzm4ssoo i y TABLE Ol' CONTENTS u I*E Se:cTroN I Definitions . .. . .. . .. . . .... SecTtoN 2 Participation by the Loan Participants; Releveraging: Refunding; Reoptimization . SectioN .3. - Participation by the Owner Participant: Partial Refund.' . . .. .., SECTION 4 Purchase. Sale. Financing and Lease of the Undivided Interest. . .. .. SecTioN 5- Notice of Closing; Closing . ...... ...... . . . . .. . .. SecTioN Representations. Warrantics and Agreements of Funding Corporation., . . SEcTioN 7. Representations. Waetanties and Agreements of the Owner Participant . . . SECTION N . ~ Representations. Warranties and Agreements of Owner Trustee. . SECTION f 9 Representations. Warranties and Agreements ofIndenture Trustee . .. . . SEcTroN 10 Representations. Warranties and Agreements of the Lessee. . ... . . SECTioN 11 Conditions Precedent. .. . . .. ... .. .. . SecTsoN 12 ' Consent to Assignment of the Facility Lease: Consent to Indenture . . . SEcrioN 13 Lessee's indemmties and Agreements . . . . . . . . . . ... .. ... SrcTios 14 Transaction Expenses. . ... . . .. . . . ... .. ,, ... . . . SaccTioN 15 Owner Participant's Transfers . . ..... .. . .... . . .. . . SEctioN 16 Brokerage and Finders' Fees and Commissions .. . . . .. . .. ,. . SECT oN 17 Survival of Representations and Warranties: Binding Effect . . . .. . SEcTioN 18 Notices. Etc., . . . .. .. .......... ... ... .. ... .. .. SEcTioN 19 Original Loan Participant Provisions . .. ... .. . ......, . .. SecTroN 20 Miscellaneous. . .... . ... . .. . . ... . , . .. . , ,. SCHEDULES ScitEDULE 1 -Participants SCHEDULE 2 -Notice of Closing SCHEDULE 3 -Bill of Sale and Assignment SCHEDULE I -Recordations and Filings ScHEuUt.E 5 -Pricing Assumptions l SCHEDULE-Base 6 File Assumptions APPENDIX APPENDIX A-Defnitions l' 5PCLC i l l CURRENT ENDING PAGE CONDITIONS ARE O K. THE NEXT PAGE : 003 00.00.00 l. I i
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.j PARTICIPATION AGREE.\ LENT l
PAnitctPAnoN AcnntENT. dated as of September 15. 1987, among Sect utTY PActne car!TAL i LEAslNG CORPORATION. a Delaware corporation (the "Ouner Participant"). cach of the 6nancial institutions listed in Schedule I hereto under the heading Original Loan Participants (each, an
" Original Loan Participant" and collectiscly, the " Original Loan Participants"), BVPS FcNotNc ConronArtoN. a Delaware corporation (the " Funding Corporation"). THE Flasi NATIONAL BANK or Boston. a national banking association, in its individual capacity ("FNB") and as Ow ner Trustee (the "Ovener Truster") under a Trust Agreement. dated as of September 15. 1987, with the Owner Participant. InvtNo TnesT COttPANY, a New York banking corporation in its individual capacity ("lT*)
and as Indenture Trustee (the " Indenture Trustre") under a Trust Indenture. Mortgage. Securit> l Agreement and Assignment of Facdity Lease dated as of September 15.1987. with the Ow ner Trustee. and OHto EorsoN CostPAby. an Ohio corporation (the " Lessee"). WHERE4s. the Owner Participant desires to cause the Trust (such term, and other capitalized terms used herein without de6mtion, being de6ned as provided in Section 1) to purchase the Undivided Interest from the Lessee and leaseback the Undivided Interest to the Lessee and in that connection to lease certain other property from the Lessee and sublease such other property back to j the Lessee. ' WHrnr.As. the Lessee desires to sell the Undiv!Jed Interest to the Trust and lease the Undivided Interest back from the Trust under the Facility Lease and to lease to the Trust and to sublease back from the Tnist such other property: WurarAs. in order to gise erect to the foregoing sale and leaseback the Owner Trustee and the ; Lessee are willing to enter into the Purchase Documents with respect to the sale and purchase of the # Undivided [nterest; WHEREAs. pursuant to the terms and prosisions of the Indenture the owner Trustee will authorire the creation. issuance and sale and delis cry of the Initial Senes Notes and the granting of the security therefor, and the Indenture Trustee will authenticate the Initial Series Notes; and WHEBEAs the Original Loan Participants are willing to purchase the Initial Series Notes on the terms and conditions set forth herem: Now, THentrons, in consideration of the preniises and of other good and valuable consideration. receipt of which is hereby acknowledged, the parties hereto agree as follows: SecTioN 1. Definitions. For the purposes hereof. capitalized terms used herein shall have the meanings assigned to such terms in Appeudix A. References in this Participation Agreement to sections, paragraphs and clauses are to sections paragraphs and clauses in this Participation Agreement unless otherwise indicated. SecTios 2. Participation Im the Loan Participants;lleleveraging:llefunding;lleoptimi:.ation. l (a) Original loan Participants' Commitment. Subject to the satisfaction of the conditions in Sections 5(a) and ll(a) on the Closing Date each Original Loan Participant agrees to lend to the j Owner Trustee an amount (a " Loan") equal to such Original Loan Participant's Loan Percentage of ) I (b) Payment. Tenn.s of the Initial Series Notes. l (1) Pairmeret. Proceeds of the Loans shall be paid directly to the Indenture Trustee. for the l account of the Owner Trustee. in immediately asailable funds, at the Indenture Trustee's OfEce. (2) Terms of'the Imtial Serses Notes Each Loan shall he esidenced by an Initial Senes Note j in the principal amount of such Loan issued in the name of the Origmal Loan Participant making 1 such Loan. The Initial Series Notes shall be issued by the Owner Trustee under and pursuant to i j SPCLC 1 CURRENT ENDING PAGE CONDITIONS ARE O K. THE NEXT PAGE : 004.00 00.00 I l l
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[i1 i the Indenture. shall bear interest .at the rate per annum and shall be payable. as set forth in. or determined under, the Indentuie and such Initial Series Notes. (c) lielecernemg. ' ('pon the occurrence of an adjustment of Basic Rent and the schedules of Casualty Values. Special Casualty Values and Modi 6ed Special Casualty Values pursuant to Section 3(d) of the Facility Lease (a " Tor finte Adjustment") and in connection with the refunding of the Initial Series Notes. subject to the conditions set forth in Section ll(e) and this Section 2. the Lessee - may arrange for non-recourse loans to the Lessor ("Releceracins loans") (only from Funding Corporation if Bonds are then outstandimt) in an additional amount equal to the amount w hich is necessary to minimiye the net present value (discounted semiannually to the Closing Date at the Discount Rate) of the Basic Rent payments by the Lessee over the Basic Lease Term while prescrsing - Net Economic Return. In addition. to the estent the Owner Participant has been required (or would ( otherwise base been required) to adjust Net Economic Return pursuant to the terms of Section 3(f) of 1 the Facilit) Lease. the Owner Participant may request the Lessee to and upon such request the Lessee shall (unless market conditions preclnde it from doing so at a commercially reasonable cost), arrange for such such Reicscraging Loans in amounts which are necessary to eliminate (or minimize) the impairment of Net Econonne Return (which impairment resulted from (or would have resulted from) l such adjustment), subject howeser. to the constraints set forth in Section 3(f) of the Facility Lease. ~ Any Relescraging Loan in connection with a Tax Rate Adjustment may be made within two years of ; the date of such Tax Rate Adjustment and at such time such further adjustments as are required by the i terms of Section 3(f) of the Facihty Lease are hereby authorized to be made. To the extent that ; modiGeations to any Transaction Document are required in connection with a Releveraging Loan. such
. modifications (i) shall satisfy the provisions of Resenue Procedure 75 21. Revenue Procedure 325) ,
and any other applicable statute. regulation, resenue procedure. resenue ruling or technical informa- ' l tion release relating to the subject matter of such resenue procedures and (ii) after giving effect to any y adjustments pursuant to Sections 3(d) and 3(f) of the Facility Lease. Shall not in the opinion of Owner Participant's Special Tax Counsel, adversely affect the tax benefits contemplated by the Owner Participant in entering into the transactions contemplated by this Participation Agreement and the other Transaction Docmnents. The Releseraging Date or Dates shall be nmtnall> acceptable to the . Lessee and the Owner Participant (but neither such Person shall unreasonable.s withhold its accept-ance) in respect of the relesant Releveraging Loan. Proceeds of a Releseraging Loan shall be paid directly to the Indenture Trustee. in immediately available funds. at the indenture Trustee's Office. and such proceeds shall be applied as a partial refund of the Insestment. Each Releseraging Loan shall be esidenced by a Releveraging Note. which Note shall be issued by the Owner Trustee under and pursuant to the Indenture. shall be in the principal amount of such Releveraging Loan. bear interest at l the rate or rates per annum. and shall be payable. in each case as set forth in, or deternoned under the ' indenture. (So long as any. Initial Series Notes are Outstanding. Releseraging Notes may be issued only if all principal of and interest on all such Initial Series Notes are simultaneously paid in full.) (d) liefnnding ofNotes Upon the occurrence of each Tax Rate Adjustment upon a refunding of the initial Series Notes and on no more than two additional occasions during the Lease Term. subject to the satisfaction of the conditions set forth in Section ll(c). on any Refunding Date. Funding Corporation agrees to lend to the Owner Trustec. on a non-recourse basis. an amount (a "Refundmg Lonn") equal to the sum of (i) the amount necessary to refund the Notes theretofore issued and then Outstanding. (i6) [an amount necessary to pay Transaction Expenses relating to such Refunding Loan and (iii)] an amount equal to the Releseraging Amount. if any. Proceeds of a Refunding Loan shall he l theretofore paid directly to the issued land to payIndenture Transaction Expenses Trustee (i) totosuch relating theRefunding extentLoan necessary l, in inunediately to refund the N available funds, at the Indenture Trustee's Office and (ii) to the extent of the Releveraging Amount. . for the account of the Owner Trustee as a partial refund of the Investment. In immediately available L funds, at the Indenture Trustee's Office. Each Refunding Loan shall be represented by a Fixed Rate Note, which Note shall be issued by the Owner Trustee under and pursuant to the Indenture. shall be I.' in the principal amount of such Refunding Loan and shall bear interest at the rates per annum. and NPCLC 2 CURRENT ENDING PAGE CONDITIONS ARE 0.K. THE NEXT PAGE - 005.00 00.00 i k - . _ _ _ . _ _ _ _ _ _ _ _ _ _ - _ _ _ - _ _ _ _ _ - _ _ -
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- ,n r, m .couun a o na : mi t JOS: Y38959 PCN: 005.00.00.00 $ / N: 7 OMO EDisc N 6C*h! Or NE A < 04 ' se245s30 shall be pa> able. as set forth in or determined under. the indenture. Not less than three Business Days prior to a Refundum Date. Fumhng Corporation shall deliser to the Owner Participant and the Lessee a certificate setting forth the information necessary to complete the Fived Rate Note (including any schedule thereto). Upon such dehsery. and upon approsal by the Lessee and the Owner Participant of the terms thereof, the Ow ner Participant and the Lessee shall cause the form of Fixed Rate Note to be completed. The refundings contemplated b> this Section 2(d) shall be eifected at the request of the l Lessee gisen in wnting at least fue Business Days pnor to the Refunding Date, which, if in geonjdnetion with a Tax Rate Adjustment. request may be gisen within two years of the date of such Tas Rate Adjustment: prrisided howeser. that (i) no such request shall be made or refunding occur while an Esent of Default shall base occurred and be continuing: (ii) except as contemplated in l Sections Hd) and H f) of the Facdity Lease. Net Economic Return shall not be adsersely affected thereby (or appropriate adjustments shall hase been made or shall be made on the Refunding Date l pursuant to Sections he) and 3(f) of the Facility Lease to preser e Net Economic Return). (iii) ans modi 6 cations of the Transaction Documents shall satisfy the provisions of Resenne Procedure 7 r21.
Resenue Procedure 75-25 and any other applicable statute, regulation. resenue procedure. revenue , ruling or technicalinformation release relating to the subject matter of such revenue procedures. and ! (iv) such modi 6 cations (after gising effect to any adjustments pursuant to clanse iii) abose) shall not. l' in the opinion of the Owner Participant's Special Tax Counsel. adsersely affect the tax benc6ts contemplated by the Owner Participant in entering into the transactions contemplated by this Participation Agreement and the other Transaction Documents. Subject to the conditions of this Section 2(d) and Section 11(c). the Owner Participant agrees to cooperate with the Lessee in order to accomplish the refunding requested by the Lessee. In setting the tenns of Fixed Rate Notes. the Lessee in its sole discretion may determine the number of tranches of debt and the interest rates applicabic thereto (reflectise of actual market conditions) and. based on such detennination. the Owner Participant shall detennine the principal amount, the amortization schedule and the aserage life applicable to all tranches of Fixed Rate Notes (prosided that the aggregate average life of all such Fixed Rate Notes shall not vary from the aggregate aserage life reflected in the debt amortwation schedule for the Initial Series Notes by more than 15 months), including the Gnal matunties thereof ahich shall be no later than 20 so as to minimize the net present value (discounted semiannually to the Closing Date at the Discount Rate) of the Basic Rent payments by the Lessee oser the Basic Lease Term, while presening Net Economic Return. (So long as any Initial Series Notes are Outstanding. Fised Rate Notes may be issued only if all principal of and interest on all such initial fSeries Notes are simultaneously paid in full.) ie) ficoptimention. Other than as pennitted by Section 2(d). subject to the satisfaction of the conditions set forth in Sections 2(d) and il(ch in connection with any Tax Rate Adjustn ent. the Lessor and the Lessee shall reoptimize the amortization schedules for the Notes in accordance with. and in the manner contemplated by Section 3(f) of the Facility Lease. which reoptimization. amone other things shall not change the average life to maturity of the Initial Series Notes by more than l8 fnonths. Upon receipt of the information referred to in Section 3.12 of the Indenture. together with con 6nnation thereof from the Owner Participant. the Owner Trustee shall deliser to the Indenture I Trustee a certi6eate pursuant to such Section 3.12. Notwithstanding the foregoing, the Owner Trustee may rely on such certi6cate of the Lessee, as so con 6rmed, and shall have no obligation to serify the same, tf) Cooperation. Each of the Lessee, the Owner Trustee, the Owner Participant and each Loan Participant agree. that it will cooperate in connection with any Refunding Loan or Releseraging Loan and enter into such additional agreements and such supplernents or amendments to or consents under each of the Transaction Documents as may reasonably be requested by the Lessee to effectuate the transactions contemplated in connection with any such Refunding Loan and any Relescragmg Loan. tg) Directron to the Indenture Tnntee. The Original Loan Participants. as purchasers of the Imtial Series Notes. ii) hereby authori7e and direct the Indenture Trustee to execute. dehur and perform this Participation Agreement. (ii) acknowledge and agree that, in connection with this Participation
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