ML20211J839

Forwards Rev 1 to Provisional Decommissioning Trust Agreement for Plant,Changing Portions of Agreement to Permit Up to Two Distributions & Clarify Formula for Distribution

ML20211J839
Person / Time
Site:	Pilgrim
Issue date:	08/30/1999
From:	Alexander J ENTERGY OPERATIONS, INC.
To:	Collins S NRC (Affiliation Not Assigned)
References
ENGC-2.99.086, NUDOCS 9909070034
Download: ML20211J839 (70)

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r j] Entergy Nuclear Generation Company v Pdgnm Nuclear Power Station

, , 600 Rocky Hill Road Plymouth, MA 02360 August 30,1999 I ENGC Ltr. 2.99.086 Mr. Samuel J. Collins Pilgrim Nuclear Power Station Director, Office of Nuclear Reactor Regulation Docket Number 50-293 U.S. Nuclear Regulatory Commission License Number DPR-35 Washington, DC 20555-0001

Subject:

Amendment 1 to the Pilarim Station Decommissionina Trust Aareement

References:

1. NRC Ltr. 1.99.048 (Order) dated April 29,1999. TAC NO. MA4447,

2. NRC Ltr. 1.99.080 dated July 13,1999. TAC NO. MA6969.

Please find enclosed Amendment 1 to the Provisional Decommissioning Trust Agreement (Agreement) for the Pilgrim Nuclear Power Station. Section 9.5 of the Agreement provides for amendment (s) to the Agreement. In essence, the original Agreement identified one distribution from the Provisional Decommissioning Trust. The amendment changes portions of the Agreement to permit up to two distributions, and clarify the formula for distribution.

The amendment is dated August 24,1999. Item 15 of the amendment (page number 6) specifies that the amendment be filed within five (5) business days of { August 24,1999] and that the amendment will be become effective on the thirty-first day following the date of filing.

By Order dated April 29,1999 (Reference 1), the NRC approved the transfer of the facility operating license and the materials license, and license amendments conforming to the transfer of the Pilgrim Station, from Boston Edison Company to Entergy Nuclear Generation Company. The Orderincluded the NRC Safety Evaluation (SER) for the proposed license transfer. Section 3.0 of the SER pertained to the decommissioning funding. Section 3.3.1 required that the Director, Office of Nuclear Reactor Regulation, he given 30 days prior written notice of any material amendment to the trust agreement (s). Section 3.3.2 pertains to the funding assurance mechanism and included, as sub-item 2, the provisional decommissioning trust.

By letter dated July 13,1999 (Reference 2), the conditions related to the sale and transfer contained i in the Order were added to the facility operating license (Amendment 181) as (new) License Condition )

3.K. Condition 3.K.(3) identifies the " Provisional Trust" fund. Condition 3.K.(5)(b) duplicated the SER {,

Section 3.3.1 requirement that the Director, Office of Nuclear Reactor Regulation be given 30 days ji prior written notice of any material amendment to the trust agreement (s).

Therefore, this letter meets the requirements of the Order and License Amendment 181.

hO 9909070034 990830 PDR ADOCK 05000293 P PDR 2 m es ,

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l Entergy Nuclear Generation Company , ,

Docket 50-293 Pilgrim Nuclear Power Station License No. DPR-35

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. Please feel free to contact me at Pilgrim Station, (508) 830-8269, if you have any questions or require any additionalinformation regarding this subject.

Sincerely, 1

.A ander, Director Nuclear Assessment Group DWE/

Enclosure cc:

Mr. Alan B. Wang, Project Manager 'Mr.' Hubert J. Miller Project Directorate 1-3 Region i Administrator Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Mail Stop: OWFN 14B20 Region i 1 White Flint North 475 Allendale Road 11555 Rockville Pike King of Prussia, PA 19406 Rockville, MD 20852 1 Senior Resident Inspector U.S.. Nuclear Regulatory Commission

! Pilgrim Nuclear Power Station Attention: Document Control Desk  !

Washington, DC 20555-0001 l l

Mr. Robert Hallisey Mr. Peter LaPorte, Director  ;

Radiation Control Program Mass. Energy Management Agency {

Center for Communicable Diseases 400 Worcester Road Mass. Dept. of Public Health P.O. Box 1496 305 South Street Framingham, MA 01701-0313 Jamaica Plain, MA 02130 '

299086 L

g EXECUTION COPY FIRST AMENDMENT TO PROVISIONAL DECOMMISSIONING TRUST AGREEMENT FOR PILGRIM NUCLEAR POWER STATION FIRST AMENDMENT TO PROVISIONAL DECOMMISSIONING TRUST AGREEMENT FOR PILGRIM NUCLEAR POWER STc MN dated as of August 24,1999

(" Amendment No.1") by and between Entergy Nuclear Generation Company, a Delaware corporation ("Entergy"), and Mellon Bank, N.A., as Trustee (the " Trustee"), a national banking association (Entergy and the Trustee being referred to herein collectively as the

" Parties").

WITNESSETH:

WHEREAS, with respect to the decommissioning of Pilgrim Nuclear Power Station

("PNPS"), Entergy has a beneficial interest in the Provisional Decommissioning Trust for Pilgrim Nuclear Power Station (the " Provisional Tmst"), operating under a trust agreement dated as'of July 12,1999, between Boston Edison Company, a Massachusetts corporation and the former owner of PNPS ("BECo"), and the Tmstee, a copy of which is attached hereto as Exhibit A (the " Provisional Trust Agreement");

WHEREAS, Entergy and BECo are parties to that certain Agreement Regarding Qualified Trust Ruling, dated as of July 13,1999, a copy of which i:: attached hereto as Exhibit B (the " Letter Agreement"), which agreement provides, among other things, that BECo and Entergy shall cooperate with one another and use their respective best efforts to effectuate certain amendments to the Provisional Trust Agreement; WHEREAS, Section 9.05 of the Provisional Trust Agreement provides that the Provisional Trust Agreement may be amended, modified or altered for any purpose requested by Entergy, with the prior written approval of BECo, so long as such amendment, modification or alteration does not affect the use of the Provisional Tmst to pay the costs of Decommissioning; and

.WHEREAS, Section 9.05 of the Master Trust Agreement provides that the Trustee shall execute any amendment of the Provisional Trust Agreement required to be accepted by it but shall have no obligation to inquire or investigate whether such amendment is consistent with Section 9.05, except as to the receipt of the prior written approval of BECo.

NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

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1. Capitalized terms used in this Amendment No. I and not defined herein shall have the meaning ascribed to such terms in the Provisional Trust Agreement.

2. Section 1.01(24) of the Provisional Trust Agreement is amended and restated to read in its entirety as follows:

"(24) " Notice of Tax and Prior Distribution Adjustment Certificate Contention" shall have the meaning set forth in Section 4.05(c) hereof.".

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3. Section 1.01(27) of the Provisional Trust Agreement is amended and restated to l read in its entirety as follows:

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"(27) " Post-Closing Favorable Tax Change" shall mean any one or more amendments of or other changes in Section 468A of the Code or the Treasury regulations promulgated thereunder or the Service's interpretations thereof (including without limitation, as reflected in a revenue ruling, private letter ruling issued to the l Company or _other published position of the Service) occurring before December 31, l 2002, which would allow (regardless of whether the Company avails itself of such l amendment or other change) all or a portion of the funds in the Master Trust to i accumulate more rapidly than possible under the federal tax laws in effect as of the -

Closing Date, even if such amendment or other change will not become effective until after December 31,2002.".

4. Section 1.01(35) of the Provisional Trust Agreement is amended and restated to read in its entirety as follows:

"(35) " Tax and Prior Distribution Adjustment" shall have the meaning set forth !

l in Schedule I hereto.". I l

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5. Section 1.01(36) of the Provisional Trust Agreement is amended and restated to i read in its entirety as follows:

"(36) " Tax and Prior Distribution Adjustment Certificate" shall have the meaning set forth in Section 4.05(c) hereof.".

6. The following definitions are added to the end of Section 1.01 of the Provisional Trust Agreement as Sections 1.01(39) - 1.01(40):

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"(39) "BECo Distribution" shall have the meanings set forth in Section 4.05(c). j (40) " Continued Qualification Claim" means a Claim relating solely to a Post- l Closing Favorable Tax Change to the effect that the Qualified Fund, was not i disqualified upon the Closing under the Purchase and Sale Agreement and continued to l MHODMA. Active;8050520,6 k

'o be a " nuclear decommissioning reserve fund," as def' m ed in Section 468A(a) of the Code, when held by Entergy on and after the Closing.".

7. Section 4.05 of the Provisional Trust Agreement is amended and restated in its entirety as follows:

"4.05 Other Distributions. The Tmstee shall distribute the assets of the Provisional Trust, after payment of or reserve for any remaining administrative expenses, unpaid out-of-pocket expenses, Trustee fees, taxes (whether imposed upon the Provisional Trust or upon the Company) or costs of termination, to BECo and/or to the Master Trust in the manner described in this Section 4.05.

(a) Distribution in the Event of Pre-Closing Date Termination. At any time prior to the Closing Date, BECo may, in its sole discretion, upon prior written notice by a Company Authorized Representative to the Tmstee and to Entergy, terminate the Provisional Tmst, in which case all of the assets of the Provisional Trust shall be promptly distributed to BECo or its designee in accordance with the written instructions of a Company Authorized Representative.

(b) Distribution in the Event of a Post-Closing Favorable Tax Change.

If there are one or more Post-Closing Favorable Tax Changes on or after the Closing Date, DECO shall have the right, pursuant to the provisions of Section 4.05(c) below, to up to two distributions (at the election of the Company, to be made in cash or in kind) from the Provisional Tmst, all as determined pursuant to this Section 4.05.

(c) Determination of Occurrence of a Post-Closine Favorable Tax

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Change. in the event BECo believes a Post-Closing Favorable Tax Change has occurred entitling it to a distribution of the assets of the Provisional Trust pursuant to Section 4.05(b) hereof (a " Claim"), BECo may provide written notice (a " Notice of Claim") to the Tmstee and to the Company at any time (but on a maximum of two occasions) after the Closing Date and on or prior to January 15, 2003, in the manner and at such address as provided in Section 9.04 below, setting forth in reasonable detail (i) the basis of such Claim (including whether such Claim is a Continued Qualification Claim) and (ii) the BECo Distribution Amount in respect of such Claim (assuming that the date of distribution will be the sixtieth Business Day following the effective date of the Notice of Claim). No later than the thirtieth Business Day after the effective

'date of the Notice of Claim, the Company shall deliver to BECo and the Trustee a certificate setting forth in reasonable detail the Tax and Prior Distribution Adjustment (assuming that the date of distribution will be the sixtieth Business Day following the effective date of the Notice of Claim) (the " Tax and Prior MHODMA. Active.8050520.6 m

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i Distribution Adjustment Certificate"). Unless the Tmstee and BECo receive a timely Notice of BECo Distribution Amount Contention from the Company,Dr the Tmstee and the Company receive a timely Notice of Tax and Prior Distribution Adjustment Certificate Contention from BECo as provided below, the Trustee shall distribute to BECo or its designee (each such distribution, a "BECo Distribution") on the sixtieth Business Day following the effective date of the Notice of Claim assets with a value equal to the BECo Distribution Amount set forth in the Notice of Claim less the Tax and Prior Distribution Adjustment set forth in the Tax and Prior Distribution Adjustment Certificate in accordance with written instructions of the BECo Authorized Representatives.

In the event that (i) such BECo Distribution is the second BECo Distribution pursuant to this Section 4.05(c), or (ii) the Notice of Claim relating to such BECo Distribution does not state that the Claim is a Continued Qualification Claim, the Trustee shall, within five Business Days after making such BECo Distribution, contribute the balance of the assets of the Provisional Trust, if any, to the Master Trust in accordance with the written instructions of the Company Authorized Representatives.

Upon receipt of a Notice of Claim, the Company, if it elects to dispute the Claim, shall give written notice (a " Notice of BECo Distribution Amount Contention") to the Trustee and to BECo of its dispute of the Claim (including any dispute as to whether the Claim is a Continued Qualification Claim) no more than thirty Business Days following the effective date of BECo's Notice of Claim, in which case such Claim shall be a " Disputed Claim." Upon receipt of >

the Tax and Prior Distribution Adjustment Certificate, BECo, if it elects to dispute the Tax and Prior Distribution Adjustment Certificate, shall give written notice (a " Notice of Tax and Prior Distribution Adjustment Certificate Contention") to the Trustee and to the Company of its dispute of the Tax and Prior Distribution Adjustment Certificate no more than fifteen Business Days following the effective date of the Tax and Prior Distribution Adjustment Certificate, in which case the Claim to which the Tax and Prior Distribution Adjustment Certificate relates shall be a " Disputed Claim."

In the event of a Disputed Claim, BECo and the Company shall in good faith negotiate to settle the portion of the Disputed Claim to which the Notice of BECo Distribution Amount Contention and/or Notice of Tax and Prior Distribution Adjustment Certificate Contention relates. If no resolution is reached within ninety Business Days following the effective date of the Notice of Claim, either the Company or BECo may commence an arbitration proceeding with respect to the Disputed Claim pursuant to and consistent with the provisions of Section 9.07 hereof. l 4

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If a Disputed Claim is settled by the Company and BECo or is finally determined by the arbitration proceedings referenced in Section 9.07 below (a

" Resolved Claim"), then the Trustee shall make a BECo Distribution to BECo or its designee within 60 days from the date of such settlement, arbitration award or judgment pursuant to Section 9.07, as the case may be, of the amount provided in the settlement, arbitration award or judgment in accordance with the written instmetions of the BECo Authorized Representatives. In the event that L (i) such BECo Distribution is the second BECo Distribution pursuant to this Section 4.05(c), (ii) the Notice of Claim relating to such BECo Distribution does not state that the Claim is a Continued Qualification Claim, or (iii) the Notice of I Claim relating to such BECo Distribution states that the Claim is a Continued I

Qualification Claim but the settlement, arbitration award or judgment provides to the contrary, the Trustee shall, within five Business Days after making such

'BECo Distribution, contribute the balance of the assets of the Provisional Trust, if any, to the Master Tmst in accordance with the written instructions of the Company Authorized Representatives.

l l (d) Final Distribution to the Master Trust. In the event that on January 16, 2003 any assets remain in the Provisional Trust ad either (i) no Notice of Claim has been delivered by BECo to the Trustee and to the Company on or prior to January 15, 2003, nr (ii) any Notice of Claim delivered by BECo to the

! Trustee and to the Company on or prior to January 15,2003, has been fully l resolved as provided in Section 4.05(c) and any BECo Distribution arising therefrom has been fully made, the Trustee shall forthwith contribute 100% of l such remaining assets of the Provisional Trust to the Master Tmst in accordance with the written instructions of the Company Authorized Representatives."

8. Section 9.06 of the Provisional Tmst Agreement is amended to delete "2.09" thereon and substitute "2.07" therefor.

9. Schedule I to the Provisional Trust Agreement is amended and restated in its entirety in the form attached hereto as Exhibit C.

10. This Amendment No.1 shall bind and shall inure to the benefit of the respective Parties and their assigns, transferees and successors.

11. This Amendment No.1 and all questions pertaining to its validity, construction, and administration shall be interpreted, construed and determined in accordance with the i internal substantive laws (and not the choice of law rules) of the Commonwealth of I i I Pennsylvania.

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12. This Amendment No. I may be executed in one or more counterpans, each of which shall be deemed an original but all of which together will constitute one and the same instmment.

13. Each of Entergy, BECo and the Trustee hereby represents and warrants to the others that it has full authority to enter into this Amendment No.1 upon the terms and conditions hereof and that the individual executing this Amendment No.1 on its behalf has the requisite authority to bind it.

14. In the event of any conflict between the provisions of this Amendment No. I and Section 4 of the Letter Agreement, the provisions of this Amendment No. I shall control.

15. Entergy, BECo and the Trustee each acknowledge and agree that, as required by Section 9.05 of the Provisional Trust Agreement, this Amendment No.1 shall be filed within five (5) business days of the date hereof with the Director, Office of Nuclear Reactor Regulation of the Nuclear Regulatory Commission, and shall become effective on the thirty-first day following the date of such filing. In no event shall BECo or Entergy (or their representatives) promote or advocate before any Governmental Authority the imposition of any terms and conditions on distributions from the Provisional Trust inconsistent with the provisions of Article IV of the Provisional Trust Agreement, as amended by this Amendment No. 1.

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[ Amendment No.1]

l IN WITNESS WIIEREOF, the Parties have executed this instrument as of the date first above written, l

ENTERGY NUCLEAR GENERATION COMPANY By: //w /zj '7/

Na# Jerr[W. Yelverton

Title:

President and CEO MELLON BANK, N.A., as Trustee l

By:

Name:

Title:

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Accepted and Agreed, l

BOSTON EDISON COMPANY l  ;

By:

Name: James J. Judge

Title:

Senior Vice-President and Treasurer l

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[ Amendment No.1)

IN WITNESS WHEREOF, the Parties have executed this instrument as of the date first above written.

ENTERGY NUCLEAR GENERATION COMPANY l l l

By: l Name:

Title:

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l MELLON BANK, N.A., as Tntstee

- i By: M, m  !

TitI* II '!E!IN GEIS F iST VICE PRESIDENT Accepted and Agreed, ,

BOSTON EDISON COMPANY By:

Name: James J. Judge

Title:

Senior Vice-President and Treasurer l

[ Amendment No.1]

IN WITNESS WHEREOP, the Parties have executed this instrument as of the date first above written.

l ENTERGY NUCLEAR GENERATION COMPANY By:

Name:

Title:

MELLON BANK, N.A., as Trustee By:  ;

Name:

Title:

Accepted and Agreed, BOSTON EDISON COMPANY By: m /

$me: James j(Judg [

'Pitle: Senior Vice-President and Treasurer l

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8, EXHIDIIA PROVISIONAL DECOMMISSIONING TRUST AGREEMENT ;

FOR PILGRIM NUCLEAR POWER STATION 1

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EXECUTION COPY .

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PROVISIONAL DECOMMISSIONING TRUST AGREEMENT FOR PILGRIM NUCLEAR POWER STATION 1 l

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l l Dated: July 12,1999 l

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TABLE OF CONTENTS

. ARTICLE I _ DEFINITIONS .........................................3 1.01 De finitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1 i

L ARTICLE II. PROVISIONAL TRUST PURPOSE AND NAME . . . . . . . . . . . . . . . . . 8 2.01 Provisional Trust Purpose ............................8 2.02- Establishment of Provisional Trust . ..................... 8 2.03 Acceptance of Appointment ...........................8 2.04 Name of Provisional Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.05 Duties of Authorized Representatives . . . . . . . . . . . . . . . . . . . . , . 9 _

2.06 No Authority to Conduct Business . . . . . . . . . . . . . . . . . . . . . . 10 2.07 No Transferability of Provisional Tmst . . . . . . . . . . . . . . . . . . . 10 l

ARTICLE III. CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.01 Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 ARTICLE IV. DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11  ;

4.01 - Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 j 4.02 _ Payment of Administrative Expenses; Taxes . . . . . . . . . . . . . . . 11 j

4. 03 . Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 j 4.04 Liquidation of Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 4.05 Other Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 4.06 Governmental Authorities. .........................16 ARTICLE V. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 5.01 Termination of Provisional Trust. .....................16  !

AllTICLE VI. TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 1 6.01 Designation and Qualification of Successor Trustee (s) . . . . . . . . . 16 6.02 Exoneration from Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 6.03 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 6.04 Transactions With Third Parties .......................18 6.05 Accounts and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 6.06 Tax Returns and Other Reports . . . . . . . . . . . . . . . . . . . . . . . . 20 6.07 Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 ARTICLE VII. TRUSTEE'S GENERAL POWERS . . . . . . . . . . . . . . . . . . . . . . . . 22 7.01 Registration of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 7.02 Retention and Removal of Professional and Employee Services . . . 23 7.03 Delegation of Ministerial Powers . . . . . . . . . . . . . . . . . . . . . . . 23 7.04 Powers of Trustee to Continue Until Final Distribution . . . . . . . . 23 MHODMA. Active;8005543,9

1 7.05 Discretion in Exercise of Powers . . . . . . . . . . . . . . . . . . . . . . . 23 7.06 Deposit of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 7.07 Loaning of Securities ..............................24 7.08 Retention of Uninvested Cash . . . . . . . . . . . . . . . . . . . . . . . . . 24 ARTICLE VIIL INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 8.01 Trustec's General Investment Powers . . . . . . . . . . . . . . . . . . . . 24 ARTICLE IX. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 9.01 Headings .................... . . . . . . . . . . . . . . . . . 25 9.02 Particular Words . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 4 9.03 Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 l I

9.04 Delivery of Notices Under Agreement ...................26 9.05 Alterations and Amendments .........................27 9.06 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28  !

9.07 D is putes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 8 9.08 Governing Law. .................................31 9.09 Accounting Year .................................31-9.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 j 9.11 Decommissioning Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 j 9.12 Limitation on Trustee Liability . . . . . . . . . . . . . . . . . . . . . . . . 31 l 9.13 Entire Agreement. ...............................32 {

9.14 Authorization. ..................................32 MH0DMA.Aedvs.8005543.9

PROVISIONAL DECOMMISSIONING TRUST AGREEMENT AGREEMENT made as of this 12 day of July,1999, between Boston Edison Company, a Massachusetts corporation ("BECo"), and Mellon Bank, N.A., as Trustee (the

" Trustee"), a national banking association.

WHEREAS, Pilgrim Nuclear Power Station ("PNPS") is a nuclear fueled electric generating unit which will require Decommissioning at the end of its useful life; and WHEREAS, pursuant to the requirements of the Nuclear Regulatory Commission

("NRC"), the owner of PNPS is required to create and maintain a source of funding to provide for the costs associated with the Decommissioning of the Unit; and WHEREAS, BECo, as the current owner of PNPS, is party to a Purchase and Sale Agreement dated November 18,1998, as amended, by and between BECo, as Seller, and Entergy Nuclear Generation Company, a Delaware corporation ("Entergy"), as Buyer (the

" Purchase and Sale Agreement"), pursuant to which BECo is transferring to Entergy all or j substantially all of the assets and certain of the liabilities constituting PNPS, including without limitation all liabilities of BECo in respect of (i) the decommissioning of PNPS following pennanent cessation of operations, (ii) the management, storage, transportation and disposal of spent nuclear fuel, and (iii) any other post-operative disposition of PNPS or any other of the assets being purchased by Entergy; and WHEREAS, BECo has a beneficial interest in the Boston Edison Company Master Decommissioning Trust (the " Master Trust"), operating under a trust agreement dated as of l

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. January 1,1995 between BECo and The Bank of New York, a New York corporation having trust powers, as trustee (the " Master Trust Agreement"); and WHEREAS, upon the closing of the transactions under the Purchase and Sale 1

I Agreement, Entergy is being substituted for BECo under such Master Trust; and WHEREAS, in accordance with the Purchase and Sale Agreement, BECo desires to

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form a so-called " provisional trust" (the " Provisional Trust"), such Provisional Trust to hold certain funds for the Decommissioning of the Unit in addition to those in the Master Trust, i

such additional funds being subject to distribution to BECo other than in connection with Decommissioning of the Unit under certain circumstances as specifically provided herein; and WHEREAS, pursuant to Code sections 671 and 677, the Provisional Trust is intended to constitute a grantor tnist under Code sections 674-677, with the Company treated as the grantor, and as such, upon the Closing, the income, gains, deductions, losses and credits of the ;

i Provisional Trust shall be treated as income, gains, deductions, losses and credits of the i i

Company; and  !

WHEREAS, Mellon Bank, N.A. is willing to serve as Trustee of the Provisional Trust on the terms and conditions herein set forth.

NOW, THEREFORE, in consideration of the mutual promises herein contained and othe'r good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Trustee hereby agrees:

TO HAVE AND TO HOLD the assets of the Provisional Trust; and TO INVEST AND REINVEST the same as provided herein; l

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IN TRUST NEVERTIIELESS, for the uses and purposes and upon the terms and conditions, as hereinafter set forth; and TO PAY OR DISTRIBUTE from the Provisional Trust as provided herein.

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ARTICLE I. DEFINITIONS 1 1.01 Definitions. As used in this Provisional Decommissioning Tmst Agreement, the following terms shall have the following meanings:

(1) "AAA" shall have the meaning set forth in Section 9.07 hereof.

(2) " Agreement" shall mean this Provisional Decommissioning Trust Agreement as the same may be amended, modified, or supplemented from time to time.

(3) " Applicable Law" shall mean all applicable laws, statutes, treaties, rules, codes, ordinances, regulations, 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 of competent jurisdiction (including those pertaining to health, safety, the environment or otherwise).

(4) "BECo",shall have the meaning set forth in the Preamble to this Agreement.

(5) "BECo Authorized Representative" shall mean the persons designated as such pursuant to Section 2.05(b) hereof.

(6) "BECo Distribution Amount" shall have the meaning set forth in Schedule I hereto.

(7) " Business Day" shall mean a day that is not a Saturday or Sunday or a legal holiday in the Commonwealth of Pennsylvania.

(8) " Claim" shall have the meaning set forth in Section 4.05(c) hereof.

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l (9) " Closing" shall mean 12:00 noon on the day of the Closing (as defined in the Purchase and Sale Agreement). l (10) " Closing Date" shall mean the day on which the Closing occurs.

1 (11) " Code" shall mean the Internal Revenue Code of 1986, as amended. l

)

(12) " Company" sha'i mean for that portion of the term of this Agreement which begins at the Closing, Entergy, except in any historical context referring to a pre-Closing l l

occurrence, condition or requirement, in which case " Company" shall mean BECo. With respect to the period between the date of this Agreement and the Closing, " Company" shall mean BECo and any provision of this Agreement referring to "the Company and BECo" or "the Company or BECo" shall be interpreted to refer only to BECo.

(13) " Company Authorized Representative" shall mean the persons designated as such pursuant to Section 2.05(a) hereof.

(14) " Decommissioning" shall mean the removal of the Unit from service and disposal of its components in accordance with Applicable Law. This process shall include, but not be limited to, (a) pre-shutdown activities related to its, removal and disposal including studies, planning, licensing, regulatory filings and non-DOE spent fuel storage, (b) work done to prepare and carry out DECON, ENTOMB OR SAFSTOR (as defined by the NRC) of the Unit and Site, whichever is applicable, (c) the removal of radioactively contaminated and radioactively uncontaminated portions of the Unit and disposing of the same at the end of the operating life of the Unit, (d) work done to the Site and the Unit's associated equipment and facilities and to other areas, whether or not such areas are contiguous to the Site and equipment and facilities, in order to decontaminate such Site and such areas, and (e) work done by or on MHODMA. Active;8005543;9 4

behalf of the Company (or for which the Compeny is charged) to a facility where any portion of the Unit and its associated equipment and facih'ies are to be disposed ofin order to prepare and maintain such facility as a disposal site.

(15) " Decommissioning Costs" shall mean all costs and expenses relating or allocable to, or incurred in connection with, Decommissioning, including, but not limited to, the decontamination and/or removal of the equipment, structures and portions of the Unit and its 1

Site provided, however, that if Applicable Law prohibits the foregoing or imposes requirements that are more costly to implement than their removal, the term

" Decommissioning Costs" shall mean all costs and expenses relating or allocable to, or incurred in connection with, the requirements imposed by Applicable Law at the end of the Unit's operating life.

(16) " Effective Date" shall mean the date of this Agreement as shown on the first page hereof.--

(17) " Governmental Authority" shall mean any Federal, state, county, municipal, foreign, international, regional or other governmental authority, agency, board, body, ,

instrumentality or court, including, without limitation, the NRC, the Massachusetts Department of Telecommunications and Energy and the Federal Energy Regulatory Commission. l (18) " Initial Contribution" shall have the meaning set forth in Section 3.01 hereof.

(19) " Master Trust" shall have the meaning set forth in the Preamble to this Agreement.

MHODMA.Acthe.8005543,9 5

y (20) "Nonqualified Fund" shall r n, with respect to the Master Trust, the Fund not I

constituting the Qualified Fund established under, and in accordance with, Section 2.02(b) or Section 2.05 of the Master Trust with respect to the Unit.

(21) "NRC" shall have the meaning set forth in the Preamble to this Agreement.

(22) " Notice of Claim" shall have the meaning set forth in Section 4.05(c) hereof.

(23) " Notice of BECo Distribution Amount Contention" shall have the meaning set forth in Section 4.05(c) hereof.

(24) " Notice of Tax Adjustment Certificate Contention" shall have the meaning set forth in Section 4.05(c) hereof.

(25) " Order" shall mean any order relating to Decommissioning issued by a Governmental Authority and applicable to the Unit.

(26) "PNPS" shall have the meaning set forth in the Preamble to this Agreement.

(27) " Post-Closing Favorable Tax Change" shall mean an amendment of or other change in Section 468A of the Code or the Treasury regulations promulgated thereunder or the Service's interpretations thereof occurring before December 31,2002, which would allow (regardless of whether the Company avails itself of such amendment or other change) all or a portion of the funds in the Master Trust to accumulate more rapidly than possible under the federal tax laws in effect as of the Closing Date, even if such amendment or other change will not become effective until after December 31,2002.

(28) " Provisional Trust" shall have the meaning set forth in the Preamble to this Agreement.

MHODMA. Active;8005543;9 b

I :, ,

l (29) " Purchase and Sale Agreement" shall have the meaning set forth in the Preamble i

to this Agreement.

(30) " Qualified Fund" shall mean, with respect to the Master Trust, the Fund

established under, and in accordance with, Section 2.02(b) of the Master Trust Agreement for purposes of Section 468A of the Code which is designated as such in the records of the trustee l

of the Master Trust.

(31) " Regulation" shall mean any requirement having the force of law which is binding on the Company, l 1

(32) " Resolved Claim" shall have the meaning set forth in Section 4.05(c) hereof.

(33) " Service" shall mean the Internal Revenue Service.

(34) " Site" shall mean the land of approximately_133 acres upon which the Unit is

' located on the Northerly side of Rocky Hill Road in Plymouth, Massachusetts.

(35) " Tax Adjustment" shall have the meaning set forth in Schedule I hereto. j i

(36) " Tax Adjustment Certificate" shall have the meaning set forth in Section 4.05(c) l hereof. ,

(37) " Trustee" shall have the meaning ascribed thereto in the opening paragraph of this Agreement or any successor appointed pursuant to Section 6.01 hereof.

l (38) " Unit" shall mean the Pilgrim Nuclear Power Station at the Site together with its

! ~ main and other transformers, reactor buildings, turbine building and crane, waste processing buildings, administrative buildings, auxiliary buildings, low level waste radiation buildings, spent fuel storage facilities, intake and discharge canals and all other components and ,

1 l l MHODMA.Aedve;800$543;9 7 .

equipment at the Site necessary for operation of the Unit and for its removal at the end of its operating /useful life.

ARTICLE II. PROVISIONAL TRUST PURPOSE AND NAME 2.01 Provisional Trust Purnose. Subject only to the provisions of Article IV, the exclusive purpose of the Provisional Trust is to accumulate and hold funds for the contemplated Decommissioning of the Unit.

2.02 Establishment of Provisional Trust. By execution of this Agreement, the Company:

(a) establishes the Provisional Trust, which shall be effective on the Effective Date and which shall consist of the Initial Contribution delivered to the Trustee by BECo in accordance with Section 3.01, as well as investments, reinvestments and earnings on such Initial Contribution; l

(b) appoints Mellon Bank, N.A. as Trustee of the Provisional Trust.

2.03 Acceptance of Appointment. Upon the terms and conditions herein set forth, Mellon Bank, N.A. accepts appointment as Trustee of the Provisional Trust. .The Tmstee declares that it will hold all estate, right, title and interest it may acquire hereunder exclusively for the purposes set forth in this Article II, subject only to the provisions of Article IV. The Trustee shall hold, manage, invest and administer the assets of this Provisional Trust, together with eamings and appreciation thereon, in accordance with this Agreement. In performing its duties under this Agreement, the Trustee shall exercise the same care and diligence that it would devote to its own property in like circumstances.

MHODMA. Active,8005543,9 0

2.04 Name of Provisional Tmst. The Initial Contribution received by the Trustee, together with the proceeds, reinvestments and appreciation thereof shall constitute the

" Provisional Decommissioning Trust for Pilgrim Nuclear Power Station."

2.05 Duties of Authorized Representatives.

(a) The Company has empowered the Company Authorized Representatives and their delegates to act for the Company in all respects hereunder. The Company Authorized Representatives may act as a group or may designate one or more Company Authorized Representative (s) or delegate (s) to perform the duties described in the foregoing sentence. The names and specimen signatures of the Company Authorized Representatives from the Effective Date through the Closing are as set forth on Exhibit H hereto. On the Closing Date, Entergy shall provide the Tmstee with a written statement setting forth the names and specimen signatures of the Company Authorized Representatives from and after the Closing. The Company Authorized Representatives 4 shall provide the Trustee with a written statement setting forth the names and specimen signatures of any delegate of the Company Authorized Representatives. Until otherwise notified in writing by the Company, the Trustee may rely upon any written notice, instmetion, direction, certificate or other communication believed by it to be genuine and to be signed or certified by any one or more Company Authorized Representatives or their designated delegate (s), and the Trustee shall be under no duty to make any investigation or inquiry as to the tmth or accuracy of any statement contained therein.

MHODMA. Active;800554,9 9

I (b) On the Closing Date, BECo shall empower the BECo Authorized 1

Representatives and their delegates to act for BECo in all respects hereunder. The BECo Authorized Representatives may act as a group or may designate one or more l BECo Authorized Representative (s) or delegate (s) to perform the duties described in the i

foregoing sentence. On the Closing Date and from time to time thereafter, BECo shall j l

l provide the Trustee with a written statement setting forth the names and specimen signatures of the BECo Authorized Representatives. The BECo Authorized l Representatives shall provide the Trustee with a written statement setti'  : orth the 1

names and specimen signatures of any delegate of the BECo Authonzed Representatives. Until otherwise notified in writing by BECo, the Tmstee may rely upon any written notice, instmetion, direction, certificate or other communication  !

l believed by it to be genuine and to be signed or certified by any one or more DECO Authorized Representatives or their designated delegate (s), and the Trustee shall be l under no duty to make any investigation or inquiry as to the tmth or accuracy of any statement contained therein.

2.06 No Authority to Conduct Business. Subject to Article IV hereof, the purpose of ,

l the Provisional Trust is limited specifically to the matters set forth in Section 2.01 hereof, and 1

there is no objective to carry on any business unrelated to the Provisional Trust purpose set l l

l forth in Section 2.01 hereof, or divide the gains therefrom.

i 2.07 No Transferability of Provisional Tmst. Other than in connection with the '

i transfer of the Company's beneficial interest (i) pursuant to the Purchase and Sale Agreement or, (ii) with the prior written consent of BECo, which consent shall not be unreasonably l

MHODMA. Active.8005543., 10 -

w ,

L L

withheld, to any other purchaser of all or substantially all of the assets of PNPS that also I

assumes responsibility for Decommissioning, the interest of the Company in the Provisional u )

Trust is neither transferable, whether voluntarily or involuntarily, by the Company nor subject to the payment of the claims of creditors of either the Company or BECo.

ARTICLE III. CONTRIBUTIONS

- 3.01 Contributions. At or prior to the Closing, BECo shall contribute $70 million in cash to the Provisional Trust (the " Initial Contribution"), which funds shall be held as cash and not invested during the period prior to and including the Closing. No further contributions shall be made to, or accepted by the Trustee on behalf of, the Provisional Trust.

ARTICLEIV. DISTRIBUTIONS 4.01 Generally. The Trustee shall not distribute any funds from the Provisional Trust except in accordance with this Article IV.

4.02 Payment of Administrative Exnenses: Taxes. The Trustee shall make payments of all administrative expenses (including taxes imposed directly on the Provisional Tmst),

reasonable out-of-pocket expenses, and Trustee's fees as specified in,the agreement referred to in Section 4.03 hereof in connection with the operation of the Provisional Trust pursuant to I this Agreement. At the dir:ction of a Company Authorized Representative, with five Business i

. Days prior written notice to BECo, the Trustee shall distribute, within thirty Business Days of i the end of each calendar quarter, to the Company an amount equal to the aggregate federal, state and local. tax attributable to its interest in the Provisional Trust that would have been i imposed on the Company for such quarter, determined as if the Company had filed separate federal, state and local income tax returns with taxes computed at the maximum marginal MHODMA. Active;8003543;9 11

corporate tax rate. Such distribution shall be reduced, but not below zero, for any excess ,

1 distributions made hereunder with respect to prior quarters such that the total distributions under this Section 4.02 with respect to any calendar year equals the federal, state and local taxes that would be due if the Company filed separate federal, state and local income tax returns with taxes computed at the maximum marginal corporate tax rate. If the Provisional Trust is insufficient to permit the payment in full of amounts payable under this Section 4.02, the Trustee shall have no liability with respect to such insufficiency and no obligation to use its i

own funds to pay the same.

~

4.03 Eras. The Trustee shall receive as exclusive compensation for its services such '

amounts as may from time to time be agreed to by the Trustee and the Company with, for any such agreement occurring after the Closing Date, prompt written notice to BECo.

4.04 Liquidation ofInvestments. At the direction of the Company, the Trustee shall sell or liquidate such investments of the Provisional Trust as may be specified, with the proc eds to be credited to the Provisional Trust.

4.05 other Distributions. The Trustee shall distribute the assets of the Provisional .

Trust, after payment of or reserve for any remaining administrative expenses, unpaid out-of-pocket expenses, Trustee fees, taxes (whether imposed upon the Provisional Trust or upon the Company) or costs of termination, to BECo and/or to the Master Trust in the manner described in this Section 4.05.

(a) Distribution in the Event of Pre-Closing Date Termhalion. At any time prior to the Closing Date, BECo may, in its sole discretion, upon prior written notice by a Company Authorized Representative to the Trustee and to Entergy, terminate the MHODMA. Active,800$543;9 12

Provisional Trust, in which case all of the assets of the Provisional Trust shall be promptly distributed to BECo or its designee in accocdance with the written instructions of a Company Authorized Representative.

(b) Distribillion in the Event of a Post-Closing Favorable Tax Change. If there has been a Post-Closing Favorable Tax Change on or after the Closing Date, BECo

{

shall have the right, pursuant to the provisions of Section 4.05(c) below, to a distribution (at the election of the Company, to be made in cash or in kini) of the BECo Distribution Amount minus the Tax Adjustment. The balance, if any, of the Provisional Tntst shall be contributed to the Master Tmst, all in accordance with the written instructions of the Company Authorized Representatives.

(c) Determination of Occurrence of a Post-Closing Favorable Tax Change. In the event BECo believes a Post-Closing Favorable Tax Change has occurred entitling it to a distribution of the assets of the Provisional Tmst pursuant to Section 4.05(b) hereof (a " Claim"), BECo shall provide written notice (a " Notice of Claim") to the Trustee and to the Company at any time (but on only one occasion) after the Closing Date and 1

on or prior to January 15,2003, in the manner and at such address as provided in Section 9.04 below, setting forth in reasonable detail the basis of such Claim and the BECo Distribution Amount (assuming that the date of distribution will be the sixtieth Business Day following the effective date of the Notice of Claim). No later than the thirtieth Business Day after the effective date of the Notice of Claim, the Company shall deliver to BECo and the Trustee a Certificate setting forth in reasonable detail the Tax Adjustment (assuming that the date of distribution will be the sixtieth Business Day MHODMA. Active;8005543.9 13

f following the effective date of the Notice of Claim)(the " Tax Adjustment Certificate").

Unless the Trustee and BECo receive a timely Notice of BECo Distribution Amount ,

Contention from the Company, or the Trustee and the Company receive a timely Notice of Tax Adjustment Certificate Contention from BECo as provided below, the Trustee shall (i) distribute to BECo assets with a value equal to the BECo Distribution Amount set forth in the Notice of Claim less the Tax Adjustment set forth in the Tax Adjustment Certificate in accordance with written instmetions of the BECo Authorized Representatives and (ii) contribute the balance of the assets of the Provisional Trust, if any, to the Master Trust in accordance with the written instructions of the Company 4 Authorized Representatives; all on the sixtieth Business Day following the effective date of the Notice of Claim.

Upon receipt of a Notice of Claim, the Company, if it elects to dispute the Claim, shall give written notice (a " Notice of BECo Distribution Amount Contention")

to the Trustee and to BECo of its dispute of the Claim no more than thirty Business Days following the effective date of BECo's Notice of Claim, in which case such Claim shall be a " Disputed Claim." Upon receipt of the Tax Adjustment Certificate, BECo, if it elects to dispute the Tax Adjustment Certificate, shall give written notice (a

" Notice of Tax Adjustment Certificate Contention") to the Trustee and to the Company ofits dispute of the Tax Adjustment Certificate no more than fifteen Business Days 1

i following the effective date of the Tax Adjustment Certificate, in which case the Claim to which the Tax Adjustment Certificate relates shall be a " Disputed Claim."

MHODMA.Aedve;B005543;9 14

) l In the event of a Disputed Claim, BECo and the Company shallin good faith negotiate to settle the portion of the Disputed Claim to which the Notice of BECo Distribution Amount Contention and/or Notice of Tax Adjustment Certificate '

Contention relates. If no resolution is reached within ninety Business Days following the effective date of the Notice of Claim, the Claim (s) shall be treated as a Disputed Claim and either the Company or BECo may commence an arbitration proceeding pursuant to and consistent with the provisions of Section 9.07 hereof.

If a Disputed Claim is settled by the Company and BECo or is finally determined by the arbitration proceedings referenced in Section 9.07 below (a

" Resolved Claim"), then the Trustee shall (i) distribute to BECs or its designee the amount provided in the settlement, arbitration award or judgment in accordance with the written instructions of the BECo Authorized Representatives, and (ii) contribute the balance of the assets of the Provisional Trust, if any, to the Master Trust in accordance l l

with the written instructions of the Company Authorized Representatives; all within 60 days from the date of such settlement, arbitration award or judgment, as the case may I

be.

(d) Distributions in the Absence of a Post-Closing Favorable Tax Change. In  ;

the event that BECo fails to deliver a Notice of Claim to the Tmstee and to the Company on or prior to January 15,2003,100% of the assets of the Provisional Trust shall be contributed to the Master Trust in accordance with the written instructions of the Company Authorized Representatives.

MHODMA. Active;8005543;, 15

4 I

L4.06 Governmental Authorities. Notwithstanding anything to the contrary in this Article IV, BECo (prior to the Closing)'and Entergy (following the Closing) shall direct distributions from the Provisional Trust in a manner consistent with any terms and conditions imposed by any Governmental Authority with jurisdiction over the Unit or the Provisional Trust; provided, however, that the Company and BECo each agree not to (and to cause their representatives not to) promote or advocate before any Governmental Authority the imposition of any terms and conditions on distributions from the Provisional Trust inconsistent with the i

provisions of this Article IV.

ARTICLE V. TERMINATION 5.01 Termination of Provisional Trust. Prior to the Closing, the Provisional Trust shall terminate only as and when set forth in Section 4.05(a) above. From and after the Closing, the Provisional Trust shall terminate only as and when all the assets and property of the Provisional Trust have been distributed pursuant to Section 4.05(c) or (d) above, unless an earlier termination is agreed to in writing by the Company and BECo. j ARTICLE VI. TRUSTEES ,

6.01 Designation and Oualification of Successor Trustee (s). At any time during the term of the Provisional Tmst, the Company shall have the right to remove the Trustee acting hereunder and appoint another qualified entity as a successor Trustee upon thirty (30) days' notice in writing to the Trustee, or upon such shorter notice as may be acceptable to the

' Trustee; provided, however, that unless otherwise agreed to by the Ccmpany and BECo in writing, the Trustee hereunder shall at all times be the same bank or trust company serving as trustee under the Master Trust Agreement. In the event that the bank or tmst company serving MHODMA. Active,8005543;9 16

L as Trustee or successor Trustee shall: (a) become insolvent or admit in writing its insolvency; (b) be unable or admit in writing its inability to pay its debts as such debts mature; (c) make a general assignment for the benefit of creditors; (d) have an involuntary petition in bankruptcy filed against it; (e) commence a case under or otherwise seek to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law, statute, or proceeding or (f) resign, the Company shall appoint a successor Trustee; provided, however, that unless otherwise agreed to by the Company and BECo in writing, the Trustee hereunder shall at all times be the same bank or trust company serving as trustee under the Master Trust Agreement. In the event of any such removal or resignation, the Tmstee or successor Trustee shall have the right to have its accounts finalized as provided in Section 6.05 hereof. Any successor to the Company, as provided herein, shall have the same right to remove and to appoint any Trustee or successor Trustee.

Any successor Trustee shall be a bank or trust company incorporated and doing business within the United States of America and having a combined capital and surplus of at least $250,000,000, if there be such an institution willing, able and legally qualified to perform the duties of Trustee hereunder upon reasonable or customary terms.

Any successor Trustee shall qualify by a duly acknowledged acceptance of the Provisional Trust, delivered to the Company, with a copy to BECo. Upon acceptance of such appointment by the successor Trustee, the Trustee shall assign, transfer and pay over to such Successor Trustee the assets then constituting the Provisional Trust. Any successor Trustee shall have all the rights, powers, duties and obligations herein granted to the original Trustee.

MHODMA. Active,8005$43.9 17

> 1

. l 6.02 Exoneration from Bond. No bond or other security shall be exacted or required of any Tmstee or successor Trustee appointed pursuant to this Agreement.

6.03 Resignation. The Tmstee or any successor Trustee hereof may resign and be relieved as Trustee at any time without prior application to or approval by or order of any court by a duly acknowledged instrument, which shall be delivered to the Company and BECo i l

by the Trustee no less than thirty (30) days prior to the effective date of the Trustee's resignation or upon such shorter notice as may be acceptable to the Company and to BECo. If for any reason the Company cannot or does not act in the event of the resignation of the Trustee, the Trustee may apply to a court of competent jurisdiction for the appointment of a successor Trustee and the cost of makag such application shall be an administrative expense.

6.04 Transactions With Third Parties. No person or organization dealing with the Tmstee hereunder shall be required to inquire into or to investigate its authority for entering into any transaction or to see to the application of the proceeds of any such transaction.

6.05 Accounts and Reports. The Tmstee shall keep accurate and detailed accounts of all investments, receipts and disbursements and other transactions hereunder with respect to the Trust in accordance with specifications of the Company, and all accounts, books and records relating thereto shall be open to inspection and audit at all reasonable times with reasonable notice by any person designated by the Company and by any person designated by BECo.

Within 25 days following the close of each month, the Trustee shall provide a written report of the estimated market value of the Provisional Trust, prepared on an accmal basis to the Company and to BECo. Within 35 days following the close of each month, the Tmstee shall l

file with the Company and BECo, a final written report setting forth all investments, receipts MHODMA. Active;8005543,9 18

and disbursements and other transactions effected by it during the month and containing an exact description of all cash and securities purchased, sold or distributed and the cost or net proceeds of sale, and showing all cash, and securities and other investments held at the end of such month and the cost and fair market value of each item thereof as carried on the books of the Tnistee. Such accounts and reports shall be based on the accrual method of reporting net l

income and expenses. l Upon the expiration of 90 days from the date of filing such written reports with the l

Company and BECo, the Trustee shall be forever released and discharged from all liability or accountability to anyone with respect to all acts and transactions shown in such written reports, except such acts or transactions as to which the Company or BECo shall take exception by written notice to the Trustee within such 90 day period; provided, however, that nothing contained in this Section 6.05 shall be deemed to relieve the Trustee of any liability imposed pursuant to Section 6.07 hereof. In the event that any exception taken by the Company or BECo cannot be amicably adjusted, the Company or BECo, as the case may be, may, within one year of the date of such exception, file the written report in a court having jurisdiction and upon the audit thereof any and all such exceptions which may not have been amicable settled shall be heard and adjudicated. Any exception not so filed within one year shall be deemed waived and any liability of the Trustee with respect thereto shall be deemed released.

All records and accounts maintained by the Trustee with respect to the Provisional Trust shall be preserved for such period as the Company and BECo shall specify and in the absence of any instructions from the Company and BECo shall be preserved for a period of four (4) years. Upon the expiration of any such required retention period, the Trustee shall MHODMA. Active,8005543.9 19

,s .

have the right to destroy such records and accounts after first notifying the Company and DECO in writing of its intention and transferring to the Co,apany (originals or copies, as appropriate) and BECo (copies only), any records and accounts requested by each of them, respectively.

6.06 Tax Returns and Other Reports. The Company, or the Trustee at the Company's direction, shall prepare and file any federal income tax returns as may be required from time to time with respect to the Provisional Trust, and the Trustee agrees to provide the Company and BECo in a timely manner with any information which is necessary to make such filings, if any, which information is not in the possession of the Company or BECo, as the case may be. The Trustee shall prepare and submit to the Company and BECo in a timely manner all information requested by either the Company or BECo regarding the amounts required to be included in the Company's and/or BECo's federal income tax return. The Trustee may l l

employ independent certified public accountants or other tax counsel to prepare or review such returns and reports and the reasonable cost thereof shall be an administrative cost. The Trustee agrees to sign any tax returns or other reports where required by law to do so or arising out of the Trustee's responsibilities hereunder. Any interest or penalty charges assessed against the Provisional Trust pursuant to Chapters 67 or 68 of the Code as a result of the Trustee's failure to comply with this Section 6.06 shall be an administrative expense unless caused by the Trustee's negligence or willful misconduct, in which case such interest or penalty charges shall J be borne by the Trustee and not the Provisional Trust. The Trustee agrees to notify the Company and BECo in writing within 10 days of the commencement of the audit of the Provisional Trust's federal tax returns, and to participate with the Company or BECo, as the MHODMA. Active.8005543.9 20

, j case may be, on behalf of the Provisional Trust in such audits and related inquiries. The i

Trustee further agrees to provide the Company and BECo with any additional information in its possession regarding the Provisional Trust which may be requested by the Company or BECo to be furnished in an audit of the Company's or BECo's federal tax returns. BECo's rights under thir Section 6.06 shall only apply to periods prior to the Closing.

6.07 Liability. (a) The Trustee shall not be liable for any loss or injury resulting l

from its actions or its performance of its duties hereunder or for its investment decisions in the I absence of its own willful misconduct or negligence. In no event shall the Trustee be liable (i) for acting in accordance with instructions from a Company Authorized Representative or a BECo Authorized Representative or pursuant to a legal opinion of counsel to the Tmstee, to the Company or to BECo, or pursuant to a final arbitration award pursuant to Section 9.07 (ii) for special or consequential damages or (iii) for the acts or omissions of The Depository Trust Company, The Federal Reserve Bank, Participants Trust Company or any clearing agency or depositary regulated by the Securities and Exchange Commission.

(b) BECo and Entergy shall indemnify the Trustee and hold it harmless against any and i

all claims, losses, liabilities, excise taxes, damages or reasonable expenses (including attorneys' fee and expenses) howsoever arising from or in connection with this Agreement or the performance of its duties hereunder, together with any income taxes imposed on the Trustee as a result of any indemnity paid by BECo or Entergy hereunder, provided, however, that nothing contained herein shall require that the Trustee be indemnified for any liability imposed pursuant to clause (a) of this Section 6.07. The indemnity obligation of BECo hereunder shall apply only to matters occurring prior to the Closing, and the indemnity MHODMA. Active.8005543.9 21

m obligation of Entergy hereunder shall apply only to matters occurring at or after the Closing.

Nothing contained herein shall limit or in any way impair the right of the tmstee to indemnification under any other provision of this Agreement.

(c) The Company understands that when and if the Tmstee delivers property against payment, it may deliver such property prior to receiving final payment and that, as a matter of bookkeeping convenience, the Trustee may credit the Provisional Trust with anticipated proceeds of sale prior to actual receipt of final payment. The risks of non receipt of payment shall be the Company's and the Trustee shall have no liability therefor.

(d) All credits to the Provisional Trust of the proceeds of sales and redemptions of property and of anticipated income from property shall be conditional upoa receipt by Trustee of final payment and may be reversed to the extent final payment is not receive'd .

(e) The provisions of this Section 6.07 and the right of the Tmstee to claim the benefit thereof shall survive any termination of this Agreement and any resignation or removal of the Trustee.  ;

ARTICLE VII. TRUSTEE'S GENERAL POWERS The Trustee shall have, with respect to the Provisional Trust, the following powers, all of which powers are fiduciary powers to be exercised in a fiduciary capacity and in the best interests of this Provisional Trust and the purposes hereof, namely:

7.01 Registration of Securities. To hold any stocks, bonds, securities, and/or other property in the name of a nominee, in.a street name, or by other title holding device, without indication of the Provisional Trust and generally to exercise the powers of an owner, including MHODMA. Active;8005543;, 22

L t.

l without limitation the power to vote in accordance with instructions provided by the Company, with respect to any such property whether so held or held in its own name, as Trustee.

7.02 Retention and Removal of Professional and Employee Services. To employ attorneys, accountants, custodians, engineers, contractors, clerks and agents as may be reasonably necessary to' carry out the purposes of the Provisional Trust. The reasonable cost

of any such employment shall be an administrative cost payable from the Provisional Trust

! pursuant to Section 4.02.

7.03 Delegation of Ministerial Powers. To delegate to other persons such ministerial powers and duties as the Trustee may deem to be advisable.

7,04 Powers of Trustee to Continue Until Final Distribution. To exercise any of such powers after the date on which the principal and income of the Provisional Trust shall have become distributable and until such time as the entire principal of, and income from, the l

' Provisional Trust shall have been actually distributed by the Tmstee in accordance with Section l

4.05 hereof.

7.05 Discretion in Exercise of Powers. To do any and all other acts which the Tmstee shall deem proper to effectuate the powers specifically conferred upon it by this Agreement, provided. however, that the Trustee may not do any act or participate in any transaction which would:

'(a) Contravene any provision of this Agreement, including any requirement for notice to, or the approval of, any party; or .

(b) Violate the terms and conditions of any instructions provided in a written statement of the Company.

MHODMA. Active;800$$43;, 23 i'

i l

l 7.06 Deoosit of Funds. To deposit funds in interest betring account deposits maintained by or savings certificates issued by the Trustee in its separate corporate capacity, or 1

in any other banking institution affiliated with the Tmstee.

1 7.07 Loaninn of Securities. To loan securities to brokers or dealers or other borrowers under such terms and conditions as the Company authorizes pursuant to a separate agreement.

l l 7.08 Retention of Uninvested Cash. To hold uninvested cash awaiting investment l

and such additional cash balances as it shall deem reasonable or necessary, without incurring any liability for the payment of interest thereon.

1 ARTICLE VIII. INVESTMENTS 8.01 Trustee's General Investment Powers. The Trustee shall have the power to I

l invest the assets of the Provisional Trust in accordance with the guidelines set forth on Exhibit l l  !

I A and in accordance with the written directions of the Company; provided, however, I l

investments may not include any securities settled or safekept outside of the United States.

Nothing in this Agreement shall restrict the Tmstee, in its individual capacity, from acting as an agent for, providing banking, investment advisory, investment management and l

other services to, and generally engaging in any kind of business with others (including 1

without limiting the generality of the foregoing issuers of securities, of money market l instruments or of other property purchased or on behalf of the Provisional Trust) to the same 1

l extent as if it was not the Trustee hereunder. Nothing in this Agreement shall in any way be deemed to restrict the right of the Trustee, in its individual capacity, to perform services for any other person or entity, and the performance of such services for others will not be deemed MHODMA.Anin%@5543.9 24 l

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to violate or give rise to any duty or obligation to the Company, BECo or the Provisional Trust )

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not specifically undertaken by the Tnistee hereunder. Nothing in this Agreement shall limit or restrict the Trustee, in its individual capacity, or any of its officers, affiliates or employees from buying, selling or trading in any securities for its or their own accounts. The Trustee, in its individual capacity, its officers, employees or affiliates, and its other clients may at any l time have, acquire, increase, decrease or dispose of positions in investments which are at the j same time being acquired or disposed of for the account of the Provisional Trust. The Trustee shall have no obligation to acquire for the Provisional Trust a position in any property which it acquires in its individual capacity, or which its officers, employees or' affiliates may acquire for its or their own accounts or for the account of a client.

ARTICLE IX. MISCELLANEOUS 9.01 Headings. The section headings set forth in this Agreement and the Table of Contents are inserted for convenience of reference only and shall be disregarded in the construction or interpretation of any of the provisions of this Agreement.

9.02 Particular Words. Any word contained in the text of this Agreement shall be read as the singular or plural and as the masculine, feminine, or neuter as may be applicable or permissible in the particular context. Unless otherwise specifically stated, the word " person" shall be taken to mean and include an individual, partnership, association, tnist, company, or corporation.

9.03 Severability of Provisions. If any provision at this Agreement or its application .

l to any person or entity or in any circumstances shall be invalid and unenforceable, the 1

application of such provision to persons and in circumstances other than those as to which it is MHODMA. Active,8005543;9 25

invalid or unenforceable and the other provisions of this Agreement, shall not be affected by such invalidity or unenforceability.

9.04 Delivery of Notices Under Agreement. Any notice, direction or instruction required by this Agreement to be given to the Company, BECo or the Trustee shall be deemed to have been properly given when sent by overnight mail and by facsimile, to the person to be notified as set forth below:

If to BECo:

Boston Edison Company 800 Boylston Street, 36th Floor Boston, MA 02199 Attention: Douglas S. Horan, Esq., Senior Vice President and General Counsel Fax Number: (617) 424- 3421 If to the Company, then to Entergy (below) or to BECo (above), as the case may be.

If to Entergy:

Entergy Nuclear Generation Company c/o RL&F Service Corp.

One Rodney Square,10th Floor ,

Tenth & King Streets Wilmington, DE 19801 With a copy to:

Joseph L. Blount, Esq.

Assistant Secretary Entergy Nuclear, Inc.

Malling Address Street Address (Use for Overnight Mail)

P.O. Box 31995 1340 Echelon Parkway Jackson, MS 39286-1995 Jackson, MS 39213 Fax Number: (601) 368-5694 i MHODMA. Active,0005543,, 26

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2 If to the Tnistee:

. Mellon Bank, N. A; 500 Grant Street, Room 3346 Pittsburgh, PA 15258 Attention: Glen Metzger Fax Number: 412-234-6112 Any of the Company, BECo, Entergy or the Trustee may change their address above by delivering notice thereof in writing to the other parties. The effective date of any notice given hereunder shall be the date of mailing.

9.05 Alterations and Amendments. The Trustee and the Company understand and agree that modifications or amendments may be required to this Agreement, and to the exhibits and schedules hereto, from time to time to effectuate the purpose of the Provisional Trust and comply with Applicable Law, any Order, any changes in tax laws, regulations or rulings (whether published or private) of the Service and any similar state taxing authority, and any other changes in the laws applicable to the Company and the Unit. This Agreement, and the exhibits hereto, may be altered or amended to the extent necessary or advisable to effectuate such purposes or to comply with such Applicable Law, Order or changes, and to effectuate the

-distribution provisions of Article IV.

Otherwise, this Agreement, and the exhibits and schedules hereto, may be amended, modified, or altered for any reasonable purpose requested by the Company; in the case of any amendment, modification, or alteration following the Closing Date, so long as such amendment, modification, or alteration does not affect the use of the assets of the Provisional Trust to pay the costs of Decommissioning, MHODMA. Active,800$543,9 27

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l l - Any alteration or amendment to, or modification of, this Agreement or an exhibit or a schedule hereto must be in writing and signed by the Company and the Trustee, and, if ,

I effective after the Closing Date, is subject to the prior written approval of BECo, which i l

l approval shall not be unreasonably withheld.' The Tnistee shall execute any such alteration, modification or amendment required to be executed by it and :, hall accept and be governed by i l- 1 any amended, modified or altered schedule delivered to it but shall have no duty to inquire or l

make any investigation as to whether any amendment, modification or alteration is consistent with'this Section 9.05, except as to the receipt of prior written approval of BECo as set forth in

( the first sentence of this paragraph.

Notwithstanding anything in this Section 9.05 to the contrary, no material amendment, modification or alteration to this Agreement shall become effective unless and until the Company shall have provided the Director, Office of Nuclear Reactor Regulation of the Nuclear Regulatory Commission at least 30 days prior written notice of such material L . amendment, modification or alteration, with a copy to BECo.

I 9.06 Successors and Assigns. Subject to the provisions of Sections 2.09 and 6.01, l this Agreement shall be binding upon and inure to the benefit of the Company, the Trustee and I  :

BECo and their respective successors, assigns, personal representatives, executors and heirs, 9.07 Disputes. Each dispute, difference, controversy or claim between the Company and BECo arising in connection with or related or incidental to this Agreement or the Provisional Trust after the Closing Date, including without limitation a Disputed Claim, shall be settled either by mutual agreement of the Company and BECo (evidenced by appropriate instructions in writing to the Trustee, signed by the Company and BECo), or otherwise by MHODMA.Aciive,8005$43;, 28-

1 arbitration under the Commercial Arbitration Rules of the American Arbitration Association (the "AAA") by an arbitral tribunal composed of three arbitrators, each of whom shall be an attorney or accountant experienced in tax matters, appointed by agreement of the Company and 1

BECo in accordance with said Rules. In the event the Company and BECo fail to agree upon a panel of arbitrators from the first list of potential arbitrators proposed by the AAA, the AAA l

will submit a second list in accordance with said Rules. In the event the Company and BECo i

shall have failed to complete a full, agreed upon panel of arbitrators from said second list, any remaining arbitrators to be selected shall be appointed by the AAA in accordance with said Rules. If, at the time of the arbitration, the Company and BECo agree in writing to submit the dispute to a single arbitrator, said single arbitrator shall be appointed by agreement of the Company and BECo in accordance with the foregoing procedure, or, failing such agreement, by the AAA in accordance with said Rules. The foregoing arbitration proceedings may be commenced by the Company or BECo by notice to the other and the Trustee. The venue for any such arbitration shall be Boston, Massachusetts or any other venue mutually agreed to by the Company and BECo. Except as provided below, all costs of such proceeding shall be t

borne as specified in the award or order. The arbitrators may award interest as they deem just and equitable covering the period from the sixtieth Business Day following the effective date of the Notice of Claim through the date of the actual distribution to BECo from the Provisional Trust. This agreement to arbitrate (and any proceedings relating to such arbitration or any arbitral award resulting therefrom) shall be governed by Chapter 251 of the Massachusetts General Laws. However, the Company, BECo and the Trustee each hereby agree as follows:

M HODM A. Active,800554),, 29

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a) the arbitral award shall be final and binding on the Company, BECo and the Trustee and shall not be contested, challenged or appealed by any of them; b) in further specification of the forgoing rubparagraph, l

(i) neither the Company, nor BECo, nor or the Trustee shall seek to vacate 1

! the award on any ground, all rights to seek to vacate the award on any ground being E:eby waived; and l

(ii) any application to modify the arbitral award must be brought solely l

l before the arbitration panel (which, following the award, shall retain jurisdiction solely for such purpose), and shall be limited to the grounds for modification listed in Section 11(a)(1)-(3) of Chapter 251 of the Massachusetts General Laws, ah rights to seek to modify the award on any other ground being hereby waived; and c) any application to court relating to this agreement to arbitrate, or to any i

l proceedings relating to such arbitration, or to any arbitral award resulting therefrom, shall be brought solely in the Massachusett,s Superior Court in Suffolk County, Massachusetts, it being further agreed (i) that the Company, BECo and the Trustee hereby waive any lack of personal jurisdiction in any such proceeding, (ii) that any application to court (or request for relief therein) shall be limited to compelling arbitration, confirming the arbitral award, or enforcing any judgment entered thereon, MHODMA. Active;8005543;9 30

I s

(iii) that all rights of appeal from any order or judgment entered by the court in any such proceeding are hereby waived, and (iv) that if the Company or BECo commences an action, seek relief or pursues an appeal in contravention of the foregoing, such party shall bear i

the reasonable costs and expenses of the other party (including attorneys' fees) incurred in connection with both the original arbitration proceeding and any such action, request for relief, or appeal.

9.08 Governing Law.

.(a) This Agreement, the Provisional Trust and all questions pertaining to their validity, construction, and administration shall be interpreted, construed and determined in accordance with the internal substantive laws (and not the choice oflaw rules) of the Ccmmonwealth of Pennsylvania, i 1

9.09 Accounting Year. The Provisional Trust shall operate on an accounting year which coincides with the calendar year, January 1 through December 31.

9.10 countercarts. This Agreement may be executed in any number of counterparts, ,

each of which shall be an original, with the same effect as if the signatures thereto and hereto ,

were upon the same instrument.

9.11 Decommissioning Liability. Nothing in this Agreement or in any amendment is intended to impose any responsibility on the Trustee for overseeing or paying the cost of the Decommissioning of the Unit other than, in the case of the Trustee, the disbursement of funds in accordance with Article IV hereof.

MHODMA. Active;B005543,9 31

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\ l 9.12 Limitation on Trustee Liability. Notwithstanding anything in this Agreement to i

the contrary, the Trustee shall not be responsible or liable for its failure to perform under this Agreement or for any losses to the Provisional Trust resulting form any event beyond the reasonable control of the Trustee, its agents or subcustodians, including but not limited to l nationalization, strikes, expropriation, devaluation, seize, or similar action by any governmental authority, de facto or de jure; or enactment, promulgation, imposition or enforcement by any such governmental authority of currency, restrictions, exchange controls, levels or other charges affecting the Provisional Trust's property; or the breakdown, failure or malfunction of any utilities or telecommunications systems; or any order or regulation of any 4

banking or securities industry including changes in the market rules and market conditions affecting the execution or settlement of transactions; or acts of war, terrorism, insurrection or revolution; or acts of God; or any other similar event. This Section shall survive the termination of this Agreement.

9.13 Entire Acreement. This Agreement and the Purchase and Sale Agreement constitute the entire agreement among BECo, Entergy and the Trustee and supersedes any prior understandings, agreements or representations by or between the parties, written or oral, to the extent related in any manner to the subject matter hereof. All conflicts or inconsistences between the terms hereof and the terms of the Purchase and Sale Agreement shall be resolved in favor of this Agreement.

-9.14 Authorization. Each of the Company, BECo and the Trustee hereby represents and warrants to the other parties that it has full authority to enter into this Agreement upon the MHODMA. Active,8005543,9 32

t terrns and conditions hereof and that the individual executing this Agreement has the requisite l

authority to bind that party.

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1 IN WITNESS WHEREOF, the Company and the Trustee have set their hands to this Agreement as of the day and year first above written.

BOSTON EDISON COMPANY By:b e j a b. rf,dve, Na#: JamesJ.f]udp g l I

/

Titld. Senior Vite Yresident and Treasurer I

MELLON BANK, N.A., as Tmstee By:

Name:

Title:

Accepted and Agreed,

' ENTERGY NUCLEAR GENERATION COMPANY l

l By:

Name:

l

Title:

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l l IN WITNESS WHEREOF, the Company and the Trustee have set their hands to this Agreement as of the day and year first above written.

BOSTON EDISON COMPANY By:

Name:

Title:

MELLON BANK, N.A., as Trustee l

By: _

to _ rd l Name: [.!. O H N G S S

Title:

pigg7 ; g . p,qESIDENT Accepted and Agreed, ENTERGY NUCLEAR GENERATION COMPANY l

By:

i Name:

Title:

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.z IN WITNESS WHEREOF, the Company and the Trustee have set their hands to this Agreement as of the day and year first above written. j f

BOSTON EDISON COMPANY By:

Name:

Title:

MELLON BANK, N.A., as Trustee By:

Name:

Title:

Accepted and Agreed, ENTERGY NUCLEAR GENERATION COMPANY By: $[f-//. AM N'ame: Robert M. Bellamy

Title:

Vice-President

.t EXHIBIT A i l

. INVESTMENT GUIDELINES Permitted investments for the Provisional Trust shall be any investments permitted by l Applicable Law, rule or regulation. Subject to clarification, if any, by the Nuclear Regulatory '

l Commission, investments in the securities or other obligations of Entergy Nuclear Generation Company, a Delawr.re corporation, Entergy Corporation, a Delaware corporation, and each of their affiliates, subsidiaries, associates or their successors or assigns shall be prohibited. In l addition, except for investments tied to market indexes or non-nuclear sector mutual funds, investments in any entity owning one or more nuclear power plants is prohibited. Permitted investments include investments tied to market indexes, mutual funds or common tmst funds which may hold securities issued by Entergy Corporation, its affiliates and subsidiaries. ,

After the Closing, the Trustee shall at all times invest the funds of the Provisional Trust pro rata in the same investments in which the funds of the Master Trust are invested from time to time.

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MHODMA. Active;800550;9

EXHIBIT B COMPANY AUTIIORIZED REPRESENTATIVES l

l Name lille Signature 1

James J. Judge. Senior Vice-President Adx and Treasurer 7Am 4,

() 00o Robert J. Weafer Vice-President of Finance, i Controller and Chief Accounting Officer v

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l l l l Schedule I l Pursuant to Section 4.05 in the event of a Post-Closing Favorable Tax Change, BECo shall be entitled to a distribution of assets of the Provisional Trust in an amount equal to the l BECo Distribution Amount less the Tax Adjustment. No interest or earnings shall be payable on the BECo Distribution Amount except to the extent expressly permitted under Section 9.07 I

i with respect to the period after the sixtieth day following the effective date of the Notice of Claim.

The BECo Distribution amount is intended to be the difference between (i) the amount actually funded in the Master Trust and Provisional Trust at Closing increased by the assumed l after tax earnings thereon to the effective date of the Post-Closing Favorable Tax Change I assuming no portion of the fund is Qualified, assuming the effective federal and state tax rate is j 39.2%, using the Pre-Tax Growth Rate and using all other Fixed Assumptions as set forth l below) (" Initial Funding Amount") and (ii) the amount that needs to be funded in the Master Trust and Provisional Trust on the effective date of the Post-Closing Favorable Tax Change to allow those funds to reach the Target Decommissioning Amount on December 31,2012 reflecting the changes to the Variable Assumptions (but not the Fixed Assumptions) resulting from the Post-Closing Favorable Tax Change (" Revised Funding Amount") (with such amount computed regardless of whether the Company in fact avails itself of such Post-Closing Favorable Tax Change). The Target Decommissioning Trust Fund Amount has been agreed to by the parties in a confidential memorandum dated July 12,1999 (" Confidential j Memorandum"). In no event shall the BECo Distribution Amount be greater than the Maximum BECo Distribution Amount determined as follows:

1 Effective Date of Post Closing Maximum BECo Distribution Favorable Tax Change Amount (in millions) l Closing Date $70.0 12/31/99 68.8 12/31/00 66.3 12/31/01 63.5 12/31/02 60.3 l 12/31/03 56.7 12/31/04 52.6 12/31/05 48.1 12/31/06 43.0 12/31/07 37.5 l

12/31/08 31.3 l

12/31/09 24.5 12/31/10 17.1 12/31/11 8.9 12/31/12 0 MHODMA. Active;8015849,4 l

r (in the event the effective date of the Post Closing Favorable Tax Change does not occur as of the Closing Date or December 31, the amount shall be interpolated on a l straight line basis).

In determining the Initial Funding Amount, the following fixed assumptions (" Fixed l Assumptions") were made and shall not be subject to change in determining the Revised I l

Funding Amount and the BECo Distribution amount:

1

• Portion of Master Trust Fund which is Qualified under Section 468A of the Code is never greater than 80%. The term " Qualified" is intended to refer to that portion of the Master Trust Fund which is subject to the favorable tax rate provided in Code Section l

468A(e)(2)(B)(ii) in effect on the date of Closing.

• Master Tmst and Provisional Trust funds grow to December 31,2012.

• Nonqualified funds are taxed at federal and state effective tax rate of 39.2%.

a Nonqualified and Qualified funds will grow at the pre-tax rates specified in the Confidential Memorandum (the " Pre-Tax Growth Rate").

• All Code provisions except Section 468A as in effect on the Closing Date will remain in effect through 2012.

In determining the Initial Funding Amount the following assumptions were made but are variable assumptions (" Variable Assumptions") for purposes of determining the revised Funding Amount and the BECo Distribution Amount:

• Section 468A of the Code as in effect on the Closing Date will remain in effect through 2012.

• Qualified funds are subject to an effective federal and state tax rate of 20%.

• No portion of the Master Tmst or Provisional Trust is a Qualified fund.

The matrix (" Matrix") contained in the Confidential Memorandum, which sets forth the determination of the Revised Funding Amount assuming a Post-Closing Favorable Tax Change occurring after the Closing and before December 31,2002, increases the portion of the Master Trust subject to Qualified tax treatment from 0% up to 80%. For purposes of the Matrix, all other Fixed and Variable Assumptions are unchanged.

The difference between the Initial Funding Amount and the Revised Funding Amount determined using the Matrix would equal the BECo Distribution Amount. If the BECo Distribution Amount as calculated using the Matrix is greater than the Maximum BECo MHODMA. Active,8015849,4 l

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' Distribution Amount, the BECo Distribution Amount shall be reduced to equal the Maximum BECo Distribution Amount. In the event other Variable Assumptions change or in the event the Post-Closing Favorable Tax Change is phased in on different effective dates, the Matrix will serve as the basis for determining the BECo Distribution Amount with appropriate adjustments.

The Revised Funding Amount can also be calculated using the following formula:

. where-

'A = RFA

[1 +i(1 - R))]'. .

. RFA"_ equals the Revised Funding Amount "A" equals the Target Decommissioning Trust Fund Amount "i" equals the appropriate Pre-Tax Growth Rate "t" equals the number of years (and portions thereof) between the effective date of the Post-Closing Favorable Tax Change and December 31, 2012 "R" equals the effective federal and state tax rate determined as follows:

R=[X-QR] +[.392-(1-X))

where:

"X" is the portion (stated as a decimal) of the Master Trust which is Qualified but in no event greater than .8; and "QR" is the federal tax rate applicable to the Qualified fund under Code Section 468A(e)(2)(B) or successor provision thereof and applicable after tax state rate.

In determining the amount of the Provisional Trust to be distributed to BECo under Section 4.05, the Tax Adjustment shall be deducted from the BECo Distribution Amount after the BECo Distribution Amount has been reduced, if necessary, to the Maximum BECo Distribution Amount. The Tax Adjustment is the amount reflecting the effect in present value dollars as of the effective date of the Post-Closing Favorable Tax Change of the tax costs or the loss or deferral of tax benefits reasonably expected to be incurred by the Company (or an Affiliate with which it files consolidated federal tax returns) as a condition to, or a consequence of, the Post-Closing Favorable Tax Change (regardless of whether the Company

' avails itself of such Post-Closing Favorable Tax Change), other than tax costs or the loss or deferral of tax benefits incurred or arising out of provisions of the Code in existence on-November 18,1998. Whether a tax cost or the loss or deferral of a tax benefit is a condition to, or a consequence of, the Post-Closing Favorable Tax Change shall be determined by taking into account not only the change in the Code, Treasury regulations and/or the Service's l

MHODMA. Active;8015849,4 interpretations thereof constituting such Post-Closing Favorable Tax Change, but also the legislative history of the Post-Closing Favorable Tax Change. In determining net present value, the discount rate used shall be LIBOR (as in effect from time to time) plus 1%. In the event of an in-kind distribution to BECo of the BECo Distribution Amount, the Tax Adjustment shall be reduced by an amount sufficient to reimburse BECo for any directly related expenses or taxes incurred as a result of receiving an in-kind distribution that exceeds the amount of directly related expenses or taxes that would have been incurred by BECo as a l result of a cash distribution. It is agreed by the Parties th'at if Section 468A were amended as of November 18,1998, to permit the Company to contribute all or a portion of the Master Tmst to a Qualified Fund (i.e. a Favorable Tax Change), with no other change to existing law, the Tax Adjustment would be zero (assuming a cash distribution).

The full amount to be distributed to BECo pursuant to Section 4.05 shall be the BECo Distribution Amount (reduced, if necessary, to the Maximum BECo Distribution Amount) plus interest allowed pursuant to Section 9.07, if any, less the Tax Adjustment. -If after the l

l Disputed Claim is resolved, the Tax Adjustment is equal to or greater than the BECo Distribution Amount, no distribution shall be made to BECo and the Trustee shall contribute l- the assets of the Provisional Trust to the Master Trust (subject to reserves and payments) as provided in Section 4.05(c).

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EXHIBIT B AGREEMENT REGARDING QUALIFIED TRUST RULING 1

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t EXECUTION COPY AGREEMENT REGARDING QUALIFIED TRUST RULING AGREEMENT REGARDING QUALIFIED TRUST RULING dated as of July 13, 1999 (" Agreement"), by and between Boston Edison Company, a Massachusetts corporation

("BECo"), and Entergy Nuclear Generation Company, a Delaware corporation ("Entergy").

WITNESETH:

REFERENCE is made to that certain Provisional Trust Agreement for Pilgrim Nuclear Power Station (the " Provisional Tmst Agreement"), dated as of July 12,1999, by and among BECo and Mellon Bank, N.A., a national banking association, as Trustee, and acknowledged and agreed to by Entergy. Capitalized terms used in this Agreement and not defined herein shall have the meaning ascribed to such terms in the Provisional Tmst Agreement.

WHEREAS, BECo and Entergy filed a joint request for a private letter ruling with the Internal Revenue Service (the " Service") on December 17,1998 (the " Original Request");

WHEREAS, the Service notified BECo and Entergy informally on July 1,1999, that, after receipt of an amended ruling request from BECo and Entergy (the " Amended Request"),

the Service is willing to rule (notwithstanding requested rulings numbered 1,2 and 3 set forth in the Original Request) that the Qualified Fund will not be disqualified by virtue of the Closing under the Purchase and Sale Agreement and that the Qualified Fund will continue to be a " nuclear decommissioning reserve fund," as defined in I.R.C. 6468A(a), when held by Entergy on and after the Closing (such a ruling or a published position of the Service to the same effect referred to herein as the " Qualified Tmst Ruling");

WHEREAS, on July 8,1999, BECo and Entergy jointly filed the Amended Request with the Service; WHEREAS, the Service has informed BECo and Entergy informally that it is unwilling to mie favorably on certain aspects of the requested mlings numbered 9 and 11 set fonh in the Amended Request pertaining to Entergy's basis in the purchased assets attributable to assumption of liabilities, and that in responding to such requested rulings (or, to the extent such requested rulings are later withdrawn, on the Service's own initiative) the Service may rule that Entergy will not obtain a tax basis in the purchased assets attributable to the assumption of the liability to decommission Pilgrim until such date as decommissioning costs are incurred by Entergy; MHODMA. Active.8041400.5

1 WHEREAS, as of the date hereof, BECo and Entergy are proceeding with the Closing under the Purchase and Sale Agreement, notwithstanding that the Qualified Trust Ruling has not yet been issued by the Service, and in connection therewith, BECo is funding the Provisional Trust with $70 million; and l l

WHEREAS, BECo and Entergy wish to agree in advance as to the BECo Distribution )

Amount and Tax Adjustment to be used in calculating the amount of the distribution to be i made to BECo from the Provisional Tmst upon the issuance of the Qualified Trust Ruling and  !

as to certain other matters relating thereto.

l NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, i BECo and Entergy, intending to be legally bound, hereby agree as follows:

1. Assuming that the Qualified Trust Ruling is issued by the Service prior to December 31,2002, the Qualified Trust Ruling shall constitute a Post-Closing Favorable Tax Change. j l

2. The BECo Distribution Amount with respect to the Post-Closing Favorable Tax ,

Change resulting from the Qualified Trust Ruling shall be $43,338,980 (payable in cash), as computed on the spreadsheet attached hereto as Exhibit A.

3. The Tax Adjustment with respect to the amount to be distributed to BECo from the Provisional Trust in respect of the Qualified Trust Ruling shall be zero, assuming that the Qualified Tmst Ruling contains no other changes to existing i law (the failure to obtain requested mlings 9 and 11 referenced above with respect to Buyer's basis in the purchased assets arising from the assumption of liabilities not being considered a change in existing law for this purpose).

4. BECo and Entergy shall cooperate with one another and use their respective best efforts (i) to amend the Provisional Trust Agreement within 30 days following the Closing (A) to permit up to two distributions (one of which shall be on account of the Qualified Trust Ruling and the second in time of which shall reflect the occurrence of the first) to BECo as a result of Post-Closing Favorable Tax Changes (rather than the maximum of one distribution contemplated by the Provisional Trust Agreement) and (B) to correct the &anula found on page 3 of Schedule I thereto to provide that in calculating the BLCo Distribution Amount with respect to a Post-Closing Favorable Tax Change, "X" shall be the portion (stated as a decimal) of the Master Tmst and the Provisional Trust which is Qualified after accounting for the amount to be distributed to BECo with respect to such Post-Closing Favorable Tax Change, and (ii) to make any required filings relating to such amendment with, and secure any required approvals from, appropriate Governmental Authorities as expeditiously as possible MHODMA. Active,80tl400,5 t

following the Closing. In no event shall BECo or Entergy (or their representatives) promote or advocate before any Governmental Authority, any position inconsistent with the provisions of this Agreement.

This Agreement shall be construed and enforced in accordance with the laws (other than the conflict of law niles) of The Commonwealth of Massachusetts, and may be executed in one I

or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.

No failure or delay by either party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege thereunder. No waiver of any of the provisions hereof shall be deemed or shall constitute a waiver of any other provision hereof, nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.

If any party or provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality or enforceability of the remaining parts or provisions contained herein shall not in any way be affected or impaired.

- [ Remainder of this page intentionally left blank.]

1 MHODMA. Active,8041400.5

[ Agreement Regarding Qualified Trust Ruling]

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

ENTERGY NUCLEAR GENERATION COMPANY By: M[

Name: Robert M. Belfamy

Title:

Vice President BOSTON EDISON COMPANY By:  % / __

ame:Iamesf}

jf}itle:

Senior Jut /

(fePresident Vice and Treasurer W

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EXHIBIT A SPREADSHEET 9

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' Calculation of the BECo Distribution Amount due to.  ;

I continued qualification of the Decommissioning Fund June 29th market Values per Mellon letter 7/1/99 (Col. B) (Col. C) (Col. D)

(Col A)

Calculation of the Pre Tax Growth Rate

$ 157,907,890.06 Mellon letter 1 Quahfied Fund 5 274,669.40 Mellon Letter 2 Quahfied Fund -interest 5 158,182,559.46 (kne 1 plus line 2) 3 Total Quahfied Fund

$ 471,218,181.82 BECofax 4a Initial Funding Amount

$ (43,338,980.32) below ,

4b Less BECo Distnbution I S 427,879,201.50 Funding required 4 Total Funding Required

+ 36.96898 % (Line 3 / line 4) 5 Percentage Quahfied Per Provisional Trust - Confidential Memorandum j

Portion of l Master Trust Fund Which is qualified under Sec. 468A 30% 6.68600 % Confidential Memorandum 6 Confidential Memorandum 40% 6.76100 % Confidential Memorandum 7 Confidential Memorandum 10% 0.07500 % (Line 7 less line 6) 8 Difference 6.969 % 0.05227 % (Line 8

• prorated share 9 (percentage on line 5 less 30%)

36.96898 % 6.73827 % (line 6 plus line 9) 10 l

Calculation of the Revised Funding Amount Schedule 1 page 3 l 11' Revised Funding Amount (RFA) = A / (1+(i(1-R))]^t Where:

S 782,000,000.00 Confidential Memorandum 12 A= Target Decommissioning Trust Fund Amount 6.73827 % Calculated above 13 l= appropriate pre-tax growth 13.4794521 14 t=the years between 7/13/99 and 12/31/2012 15 R=[X.OR]+[.392*(1 X)]

36.96898% line 5 16 X=the portion of the trust which is quahfied 20.00000 %

17 oR= red tax rate for quahried Fund under Section 468A(e)(2)(a) after state tax 7.39380 % Line 16* line 17 20 X*QR =

24.70816%

21 [.392*(1-x)]=

32.10196 % line 20 + line 21 22 R=[X.QR)+[.392*(1 X)]

Calculation of the BECo Distribution Amount

$ 427,879,201.50 Calculated based on above 23 RFA=

$ 471,218,181.82 Line 4 24 initial Funding Amount S 43,338,980.32 Line 24-line 23 25 BECo Distribution Amount 1

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EXHIBIT C AMENDED AND RESTATED SCHEDULE I TO PROVISIONAL TRUST AGREEMENT l

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J Schedule I Pursuant to Section 4.05 in the event of one or more Post-Closing Favorable Tax Changes, BECo shall be entitled to up to two BECo Distributions from the Provisional Trust, each in an amount equal to the BECo Distribution Amount less the Tax and Prior Distribution l Adjustment as determined with respect to the particular Claim. No interest or earnings shall l be payable on any BECo Distribution except to the extent expressly permitted under Section  ;

9.07 with respect to the period after the sixtieth day following the effective date of the Notice i of Claim. I l

The BECo Distribution Amount used to calculate the amount of any BECo Distribution is intended to be the difference between (i) the amount actually funded in the Master Trust and l Provisional Trust at Closing increased by the assumed after tax earnings thereon to the '

l effective date(s) of the Post-Closing Favorable Tax Change (s) assuming no portion of the funds are Qualified, assuming the effective federal and state tax rate is 39.2%, using the Pre-Tax Growth Rate and us'alg all other Fixed Assumptions as set forth below) (" Initial Funding Amount") and (ii) the amount that needs to be funded in the Master Trust and Provisional l Trust on the effective date(s) of the Post-Closing Favorable Tax Change (s) to allow those funds l to reach the Target Decommissioning Amount on December 31,2012 reflecting the changes to the Variable Assumptions (but not the Fixed Assumptions) resulting from the Post-Closing Favorable Tax Change (s) (" Revised Funding Amount") (with such amount computed regardless of whether the Company in fact avails itself of such Post-Closing Favorable Tax Change (s)). The Target Decommissioning Trust Fund Amount has been agreed to by the parties in a confidential memorandum dated July 12,1999 (" Confidential Memorandum"). In I no event shall the BECo Distribution Amount used to calculate the amount of any BECo Distribution be greater than the Maximum BECo Distribution Amount determined as follows:

l Effective Date of Post Closing Maximum BECo Distribution Favorable Tax Change Amount (in millions)

Closing Date $70.0 12/31/99 68.8 12/31/00 66.3 l 12/31/01 63.5 12/31/02 60.3 12/31/03 56.7 12/31/04 52.6 l 12/31/05 48.1 12/31/06 43.0 l 12/31/07 37.5 12/31/08 31.3 12/31/09 24.5 12/31/10 17.1 l

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12/31/11 8.9 12/31/12 0 (in the event the effective date of any Post Closing Favorable Tax Change does not occur as of the Closing Date or December 31, the amount shall be interpolated on a straight line basis).

In determining the Initial Funding Amount, the following fixed assumptions (" Fixed Assumptions") were made and shall not be subject to change in determining the Revised Funding Amount and the BECo Distribution Amount used to calculate the amount of any l

BECo Distribution:

• The portion of the Original Corpus, after accounting for the BECo Distribution Amount ,

being calculated, which is " Qualified" under Section 468A of the Code (i.e. subject to  !

the favorable tax rate provided in Code Section 468A(e)(2)(B)(ii) in effect on the Closing Date) is never greater than 80%. The term " Original Corpus" shall mean the

$471,281,181 aggregate corpus of the Master Trust and the Provisional Trust on the i

Closing Date, irrespective of the actual income, gains or losses of the Master Trust and the Provisional Trust incurred or accrued on or after the Closing Date.

• Master Trust and Provisional Trust funds grow to December 31,2012.

• Nonqualified funds are taxed at federal and state effective tax rate of 39.2%.

l e Nonqualified and Qualified funds will grow at the pre-tax rates specified in the Confidential Memorandum (the " Pre-Tax Growth Rate").

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• All Code provisions except Section 468A as in effect on the Closing Date will remain in effect through 2012.

In determining the Initial Funding Amount the following assumptions were made but are variable assumptions (" Variable Assumptions") for purposes of determining the Revised

, Funding Amount and the BECo Distribution Amount used to calculate the amount of any l BECo Distribution.

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• Section 468A of the Code as in effect on the Closing Date will remain in effect through 1

1 2012.

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• Qualified funds are subject to an effective federal and state tax rate of 20%.

• No portion of the Master Trust or Provisional Trust is a Qualified fund.

l The matrix (" Matrix") contained in the Confidential Memorandum, sets forth the l determination of the Revised Funding Amount assuming one or more Post-Closing Favorable l Tax Changes occurring after the Closing and before December 31,2002, increase the portion i

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of the Original Corpus (after accounting for the BECo Distribution Amount being calculated) which is Qualified from 0% up to 80%. For purposes of the Matrix, all other Fixed and Variable Assumptions are unchanged.

The difference between the Initial Funding Amount and the Revised Funding Amount determined using the Matrix equals the BECo Distribution Amount with respect to any BECo l

Distribution. If the BECo Distribution Amount as calculated using the Matrix is greater than the Maximum BECo Distribution Amount, the BECo Distribution Amount shall be reduced to equal the Maximum BECo Distribution Amount.

l The Revised Funding Amount can also be calculated using the following fonnula:

l where:

A = RFA

[1 +i(1 - R)]'

i "RFA" equals the Revised Funding Amount "A" equals the Target Decommissioning Trust Fund Amount "i" equals the appropriate Pre-Tax Growth Rate "t" equals the number of years (and po-tions thereof) between the effective date of the Post-Closing Favorable Tax Change and December 31,2012 i "R" equals the effective federal and state tax rate determined as follows:

1 R = [X-QR] +[.392-(1-X))

where:

"X" is the quotient (stated as a decimal) of Y divided by Z, where "Z" is (i) the Original Corpus, Jns (ii) the BECo Distribution Amount being calculated; and "Y" is the amount of Z that is (or, if the Company had availed itself of l the Post-Closing Favorable Tax Change (s), would have become)  !

Qualified; but in no event shall "X" be greater than .8.

"QR" is the federal tax rate applicable to the Qualified funds under Code Section 468A(e)(2)(B) or successor provision thereof and applicable after tax state rate.

In the event that (i) a Post-Closing Favorable Tax Change is phased-in over time (i.e.

permits additional amounts to be transferred to a Qualified fund over time), (ii) more than one l

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Post-Closing Favorable Tax Change occurs, or (iii) Variable Assumptions other than those

accounted for in the formula or the Matrix change, appropriate changes shall be made to the L foregoing formula and the Matrix to reflect the period during which each of the variables is applicable such that the formula and the Matrix indicate a BECo Distribution Amount that is equal to the difference between the Initial Funding Amount and the Revised Funding Amount.

l In addition, in determining the BECo Distribution Amount for purposes of calculating the- '

l l amount of a second BECo Distribution, all Post-Closing Favorable Tax Changes shall be taken into account (including those taken into account in calculating the amount of the prior BECo  !

Distribution for the periods applicable).

In determining the amount of any BECo Distribution under Section 4.05, the Tax and Prior Distribution Adjustment shall be deducted from the BECo Distribution Amount after the BECo Distribution Amount has been reduced, if necessary, to the Maximum BECo j l Distribution Amount. The Tax and Prior Distribution Adjustment is the amount equal to (i) 1 the effect, in present value dollars as of the effective date(s) of all Post-Closing Favorable Tax l_ Change (s), of the tax costs or the loss or deferral of tax benefits (including those taken into l ' account in calculating the amount of the prior BECo Distribution for the periods applicable) reasonably expected to be incurred by the Company (or an Affiliate with which it files consolidated federal tax returns) as a condition to, or a consequence of, the Post-Closing Favorable Tax Change (s) (regardless of whether the Company avails itself of such Post-Closing Favorable Tax Change (s)), other than tax costs or the loss or deferral of tax benefits incurred or arising out of provisions of the Code'in existence on November 18,1998,.phis (ii) the amount of any prior BECo Distribution. Whether a tax cost or the loss or deferral of a tax benefit is a condition to, or a consequence of, a Post-Closing Favorable Tax Change shall be determined by taking into account not only the change in the Code, Treasury regulations and/or the Service's interpretations thereof constituting such Post-Closing Favorable Tax Change, but also the legislative history of the Post-Closing Favorable Tax Change. In determining net present value, the discount rate used shall be LIBOR (as in effect from time to time) plus IL It is agreed by the Parties that if Section 468A were amended as of November 1 18,1998, to permit the Company to contribute all or a portion of the Master Trust to a j Qualified Fund (i.e. a Favorable Tax Change), with no other change to existing law, the Tax 1 and Prior Distribution Adjustment would be zero (assuming no prior BECo Distribution had been made).

In the event of any in-kind BECo Distribution, the amount of the BECo Distribution shall be increased by an amount sufficient to place BECo in the same position after tax and j l expenses as BEco would have been in if the BECo Distribution consisted solely of cash.  !

I The full amount of any BECo Distribution pursuant to Section 4.05 shall be the BECo l Distribution Amount (reduced, if necessary, to the Maximum BECo Distribution Amount).plus I l interest allowed pursuant to Section 9.07, if any, kss the Tax and Prior Distribution Adjustment, plus any adjustment for an in-kind distribution pursuant to the immediately preceding paragraph. If with respect to any BECo Distribution, the Tax and Prior Distribution Adjustment is equal to or greater than the BECo Distribution Amount (reduced, if necessary, to the Maximum BECo Distribution Amount), no distribution shall be made to BECo but such L j

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l event shall constitute one of the maximum of two BECo Distributions permitted by the tenns {

of Section 4.05(c), i q

I The Trustee shall contribute the assets of the Provisional Trust to the Master Trust (subject to reserves and payments) as and when provided in Section 4.05(c).

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