ML14112A520

Massachusetts Institute of Technology, Submittal of Standby Trust Agreement for the Decommissioning

ML14112A520
Person / Time
Site:	MIT Nuclear Research Reactor
Issue date:	04/10/2014
From:	Fillion G Massachusetts Institute of Technology (MIT)
To:	Naquin T D Office of Nuclear Reactor Regulation
References
Download: ML14112A520 (13)

Text

Massachusetts Institute of Technology Office of the General Counsel 77 Massachusetts AvenueBuilding 10-370 Cambridge, Massachusetts 02139-4307 Phone 617-452-2731 Fax 617-258-0267 Via Federal Express MailApril 10, 2014Tyrone Naquin, CHPU. S. Nuclear Regulatory Commission Three White Flint, Mailstop 13C-64M11601 Landsdown StreetNorth Bethesda, MD 20852PI l r Re: Standby Trust Agreement for the Decommissioning of the MIT Nuclear Reactor

Dear Mr. Naquin:

Enclosed please find one (1) original of the fully executed Standby Trust Agreement forthe Decommissioning of the MIT Nuclear Reactor.If you have any questions concerning this matter, please contact Regina Dugan at (617-253-2823) or dugan(&mit.edu.

Sincerely, 2&L "1avGail FillionLegal Assistant cc: U.S. Nuclear Regulatory Commission Document Processing CenterA*o9 STANDBY TRUST AGREEMENT FOR THE DECOMMISSIONING OF THEMIT NUCLEAR REACTORTRUST AGREEMENT, the Agreement entered into as of April _, 2014, by and between Massachusetts Institute of Technology, a Massachusetts non-profitable corporation, with principal place of administration located in Cambridge, Massachusetts, herein referred to as the "Grantor,"

and State Street Bank and TrustCompany, a Massachusetts trust company, the "Trustee."

WHEREAS, the U.S. Nuclear Regulatory Commission (NRC), an agency of the U.S. Government, pursuant tothe Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act of 1974 has promulgated regulations in Title 10, Chapter I, of the Code of Federal Regulations, Part 50 and Part 70. These regulations, applicable to the Grantor, require that a holder of, or an applicant for, two materials

licenses, issued pursuantto 10 CFR Part 50 and Part 70, provide assurance that funds will be available when needed for requireddecommissioning activities; andWHEREAS, the Grantor has elected to use a self-guarantee to provide all of such financial assurance for thefacilities identified herein; andWHEREAS, when payment is made under a self-guarantee, this standby trust shall be used for the receipt ofsuch payment in the event that the Grantor defaults under its self-guarantee; andWHEREAS, the Grantor, acting through its duly authorized

officers, has selected the Trustee to be the trusteeunder this Agreement, and the Trustee is willing to act as trustee.NOW, THEREFORE, the Grantor and the Trustee agree as follows:Section 1. Definitions.

As used in this Agreement:

(a) The term "Grantor" means the NRC licensee who enters into this Agreement and any successors or assignsof the Grantor.(b) The term "Trustee" means the trustee who enters into this Agreement and any successor trustee.Section 2. Costs of Decommissioning.

This Agreement pertains to the costs of decommissioning the materials and activities identified in License Number SNM-986 and License Number R-37 issued pursuant to 10 CFRPart 50 and Part 70 respectively, as shown in Schedule A.Section 3. Establishment of Fund. The Grantor and the Trustee hereby establish a standby trust fund (theFund) for the benefit of NRC. The Grantor and the Trustee intend that no third party shall have access to theFund except as provided herein.Section 4. Triggering Events to Transfer Property to the Fund. In the event the Grantor admits in writing itsinability to pay its debts generally, or makes a general assignment for the benefit of creditors, or anyproceeding is instituted by or against the Grantor seeking to adjudicate it as bankrupt or insolvent, or seekingdissolution, liquidation, winding-up, reorganization, arrangement, adjustment, protection, relief orI composition of it or its debts under any law relating to bankruptcy, insolvency, or reorganization or relief ofdebtors, or seeking the entry of an order for relief or the appointment of a receiver,

trustee, custodian, or othersimilar official for Grantor or for any substantial part of its property, or the Grantor takes any action toauthorize or effect any of the actions stated in this paragraph, then the NRC may:(1) Declare that the financial assurance guaranteed by the self-guarantee agreement is immediately due andpayable to the standby trust set up to protect the public health and safety and the environment, withoutdiligence, presentment, demand, protest or any other notice of any kind, all of which are expressly waived byGrantor; and(2) Exercise any and all of its other rights under applicable law.The Grantor must notify the NRC, in writing, immediately following the occurrence of any event listed in thisSection, and must include a description of the event, including major creditors, the amounts involved, and theactions taken to assure that the amount of funds guaranteed by the self-guarantee agreement fordecommissioning will be transferred to the standby trust as soon as possible.

Section 5. Payments Constituting the Fund. Payments made to the Trustee for the Fund shall consist of cash,securities, or other liquid assets acceptable to the Trustee.

The Fund is established initially as consisting of theproperty, which is acceptable to the Trustee, described in Schedule B attached hereto. Such property and anyother property subsequently transferred to the Trustee are referred to as the "Fund," together with all earningsand profits thereon, less any payments or distributions made by the Trustee pursuant to this Agreement.

TheFund shall be held by the Trustee, IN TRUST, as hereinafter provided.

The Trustee shall not be responsible nor shall it undertake any responsibility for the amount of, or adequacy of the Fund, nor any duty to collectfrom the Grantor, any payrments necessary to discharge any liabilities of the Grantor established by NRC.Section 6. Payment for Required Activities Specified in the Plan. The Trustee shall make payments from theFund to the Grantor upon presentation to the Trustee of the following:

(a) A certificate duly executed by the Secretary of the Grantor attesting to the occurrence of the events, and inthe form set forth in the attached Certificate of Events (Attachment 1), and(b) A certificate attesting to the following conditions:

(1) that decommissioning is proceeding pursuant to an NRC-approved plan;(2) that the funds withdrawn will be expended for activities undertaken pursuant to that plan; and(3) that NRC has been given 30 days prior notice of the Massachusetts Institute of Technology's intent towithdraw funds from the trust fund.No withdrawal from the Fund for a particular license can exceed 10 percent of the remaining funds available for that license unless NRC written approval is attached.

2 In addition, the Trustee shall make payments from the Fund as NRC shall direct, in writing, to provide for thepayment of the costs of required activities covered by this Agreement.

The Trustee shall reimburse the Grantoror other persons as specified by NRC from the Fund for expenditures for required activities in such amounts asNTRC shall direct in writing.

In addition, the Trustee shall refund to the Grantor such amounts as NRCspecifies in writing.

Upon refund, such funds shall no longer constitute part of the Fund as defined herein.Section 7. Trust Management.

The Trustee shall invest and reinvest the principal and income of the Fund andkeep the Fund invested as a single fund, without distinction between principal and income, in accordance withgeneral investment policies and guidelines which the Grantor shall communicate in writing to the Trusteefrom time to time The Trustee shall discharge its duties with respect to the Fund solely in the interest of thebeneficiary and with the care, skill, prudence and diligence under the circumstances then prevailing whichpersons of prudence, acting in a directed capacity and familiar with such matters, would use in the conduct ofan enterprise of a like character and with like aims, except that:(a) Securities or other obligations of the Grantor, or any other owner or operator of the facilities, or any oftheir affiliates as defined in the Investment Company Act of 1940, as amended (15 U.S.C. 80a-2(a)),

shall notbe acquired or held, unless they are securities or other obligations of the Federal or a State government; (b) The Trustee is authorized to invest the Fund in time or demand deposits of the Trustee, to the extentinsured by an agency of the Federal government, and in obligations of the Federal government such asGNMA, FNMA, and FHLM bonds and certificates or State and Municipal bonds rated BBB or higher byStandard

& Poor's or Baa or higher by Moody's Investment Services; and(c) For a reasonable time, not to exceed 60 days, the Trustee is authorized to hold uninvested cash, awaitinginvestment or distribution, without liability for the payment of interest thereon.Section 8. Commingling and Investment.

The Trustee is expressly authorized (except as limited by ScheduleB):(a) To transfer from time to time any or all of the assets of the Fund to any common, commingled, orcollective trust fund created by the Trustee in which the Fund is eligible to participate, subject to all of theprovisions

thereof, to be commingled with the assets of other trusts participating therein; and(b) To purchase shares in any investment company registered under the Investment CompanyAct of 1940 (15 U.S.C. 80a-1 et seq.), including one that may be created,

managed, underwritten, or to whichinvestment advice is rendered, or the shares of which are sold by the Trustee.

The Trustee may vote suchshares in its discretion.

Section 9. Express Powers of Trustee.

Without in any way limiting the powers and discretion conferred uponthe Trustee by the other provisions of this Agreement or by law, the Trustee is expressly authorized andempowered:

(a) To sell, exchange, convey, transfer, or otherwise dispose of any property held by it, by public or privatesale, as necessary to allow duly authorized withdrawals at the joint request of the Grantor and NRC or toreinvest in securities at the direction of the Grantor;3 (b) To make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and anyand all other instruments that may be necessary or appropriate to carry out the powers herein granted;(c) To register any securities held in the Fund in its own name, or in the name of a nominee, and to hold anysecurity in bearer form or in book entry, or to combine certificates representing such securities withcertificates of the same issue held by the Trustee in other fiduciary capacities, to reinvest interest paymentsand funds from matured and redeemed instruments, to file proper forms concerning securities held in the Fundin a timely fashion with appropriate government

agencies, or to deposit or arrange for the deposit of suchsecurities in a qualified central depository even though, when so deposited, such securities may be merged andheld in bulk in the name of the nominee or such depository with other securities deposited therein by anotherperson, or to deposit or arrange for the deposit of any securities issued by the U.S. Government, or any agencyor instrumentality

thereof, with a Federal Reserve Bank, but the books and records of the Trustee shall at alltimes show that all such securities are part of the Fund;(d) To deposit any cash in the Fund in interest-bearing accounts maintained or savings certificates issued bythe Trustee, in its separate corporate

capacity, or in any other banking institution affiliated with the Trustee, tothe extent insured by an agency of the Federal government; and(e) To compromise or otherwise adjust all claims in favor of or against the Fund.Section 10. Taxes and Expenses.

All taxes of any kind that may be assessed or levied against or in respect ofthe Fund and all brokerage commissions incurred by the Fund shall be paid from the Fund. All other expensesincurred by the Trustee in connection with the administration of this Trust, including fees for legal servicesrendered to the Trustee, the compensation of the Trustee to the extent not paid directly by the Grantor, and allother proper charges and disbursements of the Trustee shall be paid from the Fund.Section 11. Quarterly Valuation.

After payment has been made into this standby trust fund, theTrustee shall on a quarterly basis, after the receipt of payment into the standby trust fund, furnish to theGrantor and to NRC a statement confirming the value of the Trust. Any securities in the Fund shall be valuedat market value as of no more than 30 days before the quarterly report date of the Trust, or the most recentmarket value available based on the security type and standard valuation period for that vehicle.

The failure ofthe Grantor to object in writing to the Trustee within 90 days after the statement has been furnished to theGrantor and NRC shall constitute a conclusively binding assent by the Grantor, barring the Grantor fromasserting any claim or liability against the Trustee with respect to the matters disclosed in the statement.

Section 12. Advice of Counsel.

The Trustee may from time to time consult with counsel, who may be counselto the Grantor, with respect to any question arising as to the construction of this Agreement or any action to betaken hereunder.

The Trustee shall be fully protected, to the extent permitted by law, in acting on the advice ofcounsel.Section 13. Trustee Compensation.

The Trustee shall be entitled to reasonable compensation forits services as agreed upon in writing with the Grantor.

(See Schedule C.)Section 14. Successor Trustee.

Upon 90 days' notice to NRC and the Grantor, the Trustee may resign; upon 90days' notice to NRC and the Trustee, the Grantor may replace the Trustee, but such resignation or replacement shall not be effective until the Grantor has appointed a successor

Trustee, the successor accepts the4 appointment, the successor is ready to assume its duties as trustee, and NRC has agreed, in writing, that thesuccessor is an appropriate Federal or State government agency or an entity that has the authority to act as atrustee and whose trust operations are regulated and examined by a Federal or State agency. The successor Trustee shall have the same powers and duties as those conferred upon the Trustee hereunder.

When theresignation or replacement is effective, the Trustee shall assign, transfer, and pay over to the successor Trusteethe funds and properties, if any, then constituting the Fund. If for any reason the Grantor cannot or does notact in the event of the resignation of the Trustee, the Trustee may apply to a court of competent jurisdiction forthe appointment of a successor Trustee or for instructions.

The successor Trustee shall specify the date onwhich it assumes administration of the trust, in a writing sent to the Grantor, NRC, and the present Trustee, bycertified mail 10 days before such change becomes effective.

Any expenses incurred by the Trustee as a resultof any of the acts contemplated by this section shall be paid as provided in Section 10.Section 15. Instructions to the Trustee.

All orders, requests, and instructions by the Grantor to the Trustee shallbe in writing, signed by such persons as are signatories to this Agreement or such other designees as theGrantor may designate in the attached Exhibit A, as updated from time to time. The Trustee shall be fullyprotected in acting without inquiry in accordance with the Grantor's orders, requests, and instructions.

If NRCissues orders, requests, or instructions to the Trustee, these shall be in writing, signed by NRC or its designees, and the Trustee shall act and shall be fully protected in acting in accordance with such orders, requests, andinstructions.

The Trustee shall have the right to assume, in the absence of written notice to the contrary, thatno event constituting a change or a termination of the authority of any person to act on behalf of the Grantor orNRC hereunder has occurred.

The Trustee shall have no duty to act in the absence of such orders, requests, and instructions from the Grantor and/or NRC, except as provided for herein.Section 16. Amendment of Agreement.

This Agreement may be amended by an instrument in writingexecuted by the Grantor, the Trustee, and NRC, or by the Trustee and NRC if the Grantor ceases to exist. Allamendments shall meet the relevant regulatory requirements of NRC.Section 17. Irrevocability and Termination.

Subject to the right of the parties to amend this Agreement asprovided in Section 16, this trust shall be irrevocable and shall continue until terminated at the writtenagreement of the Grantor, the Trustee, and NRC, or by the Trustee and NRC if the Grantor ceases to exist.Upon termination of the trust, all remaining trust property, less final trust administration

expenses, shall bedelivered to the Grantor or its successor.

Section 18. Immunity and Indemnification.

With the exception of acts of gross negligence or willfulmisconduct by the Trustee, the Trustee shall not incur personal liability with any act or omission, made ingood faith, in the management and administration of this trust, or in carrying out any directions by the Grantoror NRC issued in accordance with this Agreement (the "Indemnified Acts"). The Trustee shall be indemnified and saved harmless by the Grantor or from the trust fund, or both, from and against any personal liability towhich the Trustee may be subjected by reason of any act or conduct in its official capacity for the Indemnified Acts, including all expenses reasonably incurred in its defense in the event the Grantor fails to provide suchdefense.Section 19. This Agreement shall be administered, construed, and enforced according to the laws of theCommonwealth of Massachusetts.

5 Section 20. Interpretation and Severability.

As used in this Agreement, words in the singular include the pluraland words in the plural include the singular.

The descriptive headings for each section of this Agreement shallnot affect the interpretation or the legal efficacy of this Agreement.

If any part of this Agreement is invalid, itshall not affect the remaining provisions which will remain valid and enforceable.

IN WITNESS WHEREOF the parties have caused this Agreement to be executed by the respective officersduly authorized and the incorporate seals to be hereunto affixed and attested as of the date first written above.{Signature page follows)6 MASSACHUSE TS UTE OF TECHNOLOGY By:[Signatureof Tepresentative of Grantor]

Israel RuizExecutive Vice President and Treasurer ATTiST:[Title][Sean]STATE STREET BANK AND TRUST COMPANYOne Lincoln Sr Boson, lassachusetts By: 6 t[Signature of repres ntative of Trustee]Vice President ATTEST:[Title][Sean]7 SCHEDULE AEstimate of Grantor's Decommissioning ExpensesNRC Decommissioning Estimate 2014A. License No. SNM-986Based upon the applicable quantities of special nuclear materials stored at this facility, in accordance with 10C.F.R. 70.25(d),

MIT must guarantee the statutory minimum of $1,125,000 for the proper disposal of thesematerials.

B. License No. R-37Duke Study (2002) 23,000,000.00 NRC Inflation Model 2014 Inflator 33,924.000.00 Labor PortionBurial portion20,470,000.00 89%2,530,000.00 11%LaborBurial1.42 29,200,000.

1.87 4,724,000.

LABORBURIAL20062.3841.2820142.65161.4233.46441.8725.43851.428 SCHEDULE BDescription of Trust Property Acceptable to TrusteeUpon a Triggering Event (As Described in Section 4 of the Agreement)

Demand Deposits of Trustee9 SCHEDULE CTrustee Compensation Trustee's fees shall be $17,500 per yearuntil a Triggering Event (as described in Section 4 in the Agreement) occurs, upon which the parties agree tonegotiate Trustee's fees in good faith, and amend this Schedule accordingly.

10 ATTACHMENT 1Certificate of EventsState Street Bank and Trust CompanyOne Lincoln StreetBoston, MA 02111Attention:

Chris SadlerState Street Bank and Trust Company:In accordance with the terms of the Standby Trust Agreement with you dated P4tI 12014, 1, Israel Ruiz, Executive Vice President and Treasurer of Massachusetts Institute ofTechnology, hereby certify that the following events have occurred:

1. MIT is required to commence the decommissioning of its facility located at 138 AlbanyStreet, Cambridge, Massachusetts (hereinafter called the decommissioning).

2. The plans and procedures for the commencement and conduct of thedecommissioning have been approved by the United States Nuclear Regulatory Commission, or its successor, on (copy of approval attached).

3. The Board of Directors of MIT has adopted the attached resolution authorizing thecommencement of the decommissioning.

MASSACHUSETTS INSTITUTE OF TECHNOLOGY By:Israel RuizExecutive Vice President and Treasurer

.6ý hDate11 EXHIBIT AMASSACHUSETTS INSTITUTE OF TECHNOLOGY, (the "Grantor"),

hereby certifies that theperson whose name appears below is authorized to act on its behalf, including the authorization togive instructions, with respect to the Stand By Trust Agreement for the Decommissioning of the MITNuclear Reactor between the Grantor and STATE STREET BANK AND TRUST COMPANY, asTrustee, dated as of ki ( ý , 2014. The Grantor further certifies that the true signature ofsuch person is set forth below opposite his name, and that the Trustee may rely upon this certificate until such time as it receives another certificate bearing a later date.NAME SIGNATUIsrael RuizMASSACHUSETTS INSTITUTE OF TECHNOLOGY BY:TITLE: -'Lcla -DATE:MASSACHUSETTS INSTITUTE OF TECHNOLOGY TITLE:2hUW\G

, \JC.1A 2DATE: n Ql-12