NUCLEAR MATERIAL LEASE AGREEMENT
Dated as of December 1, 1990
between
DCC FUEL CORPORATION,
as Lessor
and
INDIANA MICHIGAN POWER COMPANY,
as Lessee
I N D E X
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . .1
2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . .1
3. Title to Remain in the Lessor; Quiet Enjoyment;
Fuel Management; Location . . . . . . . . . . . . . . . . .2
4. Agreement for Lease of Nuclear Material . . . . . . . . . .4
5. Orders for Nuclear Material and Services;
Assigned Agreements . . . . . . . . . . . . . . . . . . . .4
6. Leasing Records; Payment of Costs of Lessor . . . . . . . .6
7. No Warranties or Representation by Lessor . . . . . . . . .9
8. Lease Term; Early Termination; Termination of Leasing
Records . . . . . . . . . . . . . . . . . . . . . . . . . 11
9. Payment of Rent; Payments with Respect to the Lessor's
Financing Costs . . . . . . . . . . . . . . . . . . . . . 13
10. Compliance with Laws; Restricted Use of Nuclear
Material; Assignments; Permitted Liens; Spent Fuel. . . . 16
11. Permitted Contests. . . . . . . . . . . . . . . . . . . . 22
12. Insurance; Compliance with Insurance Requirements . . . . 24
13. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . 26
14. Casualty and Other Events . . . . . . . . . . . . . . . . 30
15. Nuclear Material to Remain Personal Property. . . . . . . 31
16. Events of Default . . . . . . . . . . . . . . . . . . . . 32
17. Rights of the Lessor Upon Default of the Lessee . . . . . 33
18. Termination After Certain Events. . . . . . . . . . . . . 36
19. Investment Tax Credit . . . . . . . . . . . . . . . . . . 40
20. Certificates; Information; Financial Statements . . . . . 41
21. Obligation of the Lessee to Pay Rent. . . . . . . . . . . 43
22. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 44
NUCLEAR MATERIAL LEASE AGREEMENT
LEASE AGREEMENT dated as of the 1st day of December, 1990, by
and between DCC FUEL CORPORATION, an Ohio corporation (herein
called the "Lessor"), and INDIANA MICHIGAN POWER COMPANY, an
Indiana corporation (herein called the "Lessee").
In consideration of the mutual covenants contained herein, the
parties covenant and agree as follows:
1. Definitions.
Except as otherwise provided herein, defined terms when used
in this Lease Agreement (including the Exhibits hereto) shall.
have the respective meanings set forth in Appendix A hereto.
2. Notices.
Any notice, demand or other communication which by any
provision of this Lease Agreement is required or provided to be
given shall be deemed to have been delivered if in writing
addressed as provided below and actually delivered by mail,
courier, telex or facsimile at the following addresses:
(i) If to the Lessor, DCC Fuel Corporation, c/o
The Huntington Trust Company, N.A., 917 Euclid Avenue,
Cleveland, Ohio 44115, marked for the attention of Dennis R.
Franko, or at such other address as it may have furnished to
the Lessee and the Secured Parties; or
(ii) If to the Lessee, Indiana Michigan Power
Company, c/o American Electric Power Service Corporation, 1
Riverside Plaza, Columbus, Ohio 43215, marked for the
attention of the Senior Vice President-Finance, or at such
other address as it may have furnished the Lessor and the
Secured Parties in writing; or
(iii) except as otherwise requested in writing by
any Secured Party, any notice, demand or communication which
by any provision of this Lease Agreement is required or
provided to be given to the Secured Parties shall be deemed to
have been delivered to all the Secured Parties if a single
copy thereof is delivered to each of (a) The Prudential
Insurance Company of America, c/o PruCapital Management, Inc.,
Agent, Three Gateway Center, 10th Floor, 100 Mulberry Street,
Newark, New Jersey 07102-4077, marked for the attention of the
Project Management Group and (b) Prudential Power Funding
Associates, Four Gateway Center, 100 Mulberry Street, Newark,
New Jersey 07102-4069, marked for the attention of Team
Central, or at such other address as either may have furnished
the Lessor and the Lessee in writing.
3. Title to Remain in the Lessor; Quiet Enjoyment; Fuel
Management; Location.
(a) The Lessor and the Lessee hereby acknowledge that this
Lease Agreement is a lease and is intended to secure the
obligations of the Lessee to pay installments of Rent hereunder as
the same become due; that, subject to the provisions of Section
10(h) hereof, the Lessor has title to and is the owner of the
Nuclear Material; and that the relationship between the Lessor and
the Lessee shall always be only that of the Lessor and the Lessee.
(b) The Lessor (including its successors and assigns) agrees
and covenants that, so long as the Lessee makes timely payments of
Rent and fully performs all other obligations to be performed by
the Lessee hereunder, the Lessor (including its successors and
assigns) shall not hinder or interfere with the Lessee's peaceable
and quiet enjoyment of the possession and use of Nuclear Material
leased hereunder, for the term or terms herein provided, subject,
however, to the terms of this Lease Agreement.
(c) So long as no Lease Event of Default shall have occurred
and be continuing and the Lessor shall not have elected to exercise
any of its remedies under Section 17 hereof, the Lessee shall have
full right and lawful authority to engage in Fuel Management. The
Lessee is hereby designated the lawful representative of the Lessor
in all dealings with Manufacturers and any regulatory agency having
jurisdiction over the ownership or possession of the Nuclear
Material.
(d) The Lessee covenants to the Lessor that the Nuclear
Material location will be limited to: (x) the Manufacturers'
facilities, (y) transit between Manufacturers' facilities and other
Manufacturers' facilities or a Generating Facility and (z) a
Generating Facility. Each assembly of the Nuclear Material will be
located during its Heat Production and "cooling-off" stage at a
Generating Facility.
4. Agreement for Lease of Nuclear Material.
The Lessor shall lease to the Lessee and the Lessee shall
lease from the Lessor such Nuclear Material as may be mutually
agreed upon, provided that the total Stipulated Casualty Value of
all Nuclear Material leased hereunder at any one time shall not
exceed $140,000,000 in the aggregate or such other amount as the
Lessor and the Lessee may agree to in writing ("Maximum Stipulated
Casualty Value"). The Lessor and the Lessee shall evidence their
agreement to lease particular Nuclear Material in accordance with
the terms and provisions of this Lease Agreement by signing and
delivering to each other, from time to time, Leasing Records,
substantially in the form of Exhibit A or Exhibit B hereto, as
applicable, covering such Nuclear Material. Nothing contained
herein shall be deemed to prohibit the Lessee from leasing from
other lessors or otherwise obtaining other nuclear material for use
in any Generating Facility, subject to the provisions with respect
to intermingling contained in Section 6 hereof.
5. Orders for Nuclear Material and Services; Assigned Agreements.
(a) The Nuclear Material Contracts listed in Exhibit C
hereto, relating, among other things, to the purchase of, and
services to be performed with respect to, Nuclear Material were
entered into by the Lessee prior to the date of this Lease
Agreement. Any further agreements which the Lessee deems necessary
or desirable with respect to the purchase of or services to be
performed on Nuclear Material to be leased hereunder may be
negotiated by the Lessee and executed by the Lessee in its own
name, or, where permitted, as agent for the Lessor.
(b) So long as no Lease Event of Default shall have occurred
and be continuing, and subject to the approval of the Lessor and to
the limitation on the Maximum Stipulated Casualty Value of Nuclear
Material contained in Section 4, the interests of the Lessee under
the agreements listed in Exhibit C, and the interests of the Lessee
under any further Nuclear Material Contracts (whether executed and
delivered before or after the date of this agreement) pursuant to
which the Lessee desires to purchase Nuclear Material or have
services performed on any Nuclear Material leased or to be leased
hereunder, may be assigned to the Lessor under an Assignment
Agreement substantially in the form of Exhibit D hereto or in such
form, approved by the Lessor, as shall be required pursuant to the
applicable terms of the agreements listed in Exhibit C. The Lessee
shall use its best efforts to cause the other parties to such
agreements to consent to such assignment. Upon such assignment and
consent with respect to any Nuclear Material Contract, the Lessor,
subject to the limitation on the Maximum Stipulated Casualty Value
of Nuclear Material contained in Section 4, shall make all payment,
which are required thereunder for the purchase of Nuclear Material
or for services to be performed thereon, such payments to be made
as provided in Section 6.
(c) So long as no Lease Event of Default shall have occurred
and be continuing, the Lessor hereby authorizes the Lessee, at the
Lessee's cost and expense, to assert all rights and claims, and to
bring suits, actions and proceedings, in its own name or in the
name of the Lessor, in respect of any Manufacturer's warranties or
undertakings, express or implied, relating to any portion of the
Nuclear Material and to retain the proceeds of any such suits,
actions and proceedings.
(d) Notwithstanding any other provision of this Lease
Agreement or any other Basic Document, the Lessee shall not be
obligated to provide the Lessor, the Lender, the Purchasers or any
other Secured Party with a copy of, or any information relating to,
any portion of an Assigned Agreement other than as permitted by the
Assignment Agreement related to such Assigned Agreement.
6. Leasing Records; Payment of Costs of Lessor.
(a) Interim Leasing Records.
An Interim Leasing Record shall be dated the date that
the Lessor first makes any payment with respect to the Acquisition
Cost of Nuclear Material, and shall set forth the full description
of the Nuclear Material specified therein, the Acquisition Cost and
location thereof, and such other details with respect to such
Nuclear Material as the parties may agree. During the period of
preparation and processing or reprocessing of Nuclear Material
subject to an Interim Leasing Record, if the Lessor shall make any
further payment or payments or if the Lessor receives any payment
or payments representing a credit against the Acquisition Cost
previously paid with respect to such Nuclear Material, a
supplemental Interim Leasing Record dated the date that the Lessor
makes each such further payment or the date of receipt of any such
credit shall be signed by the Lessor and the Lessee to record the
revised Acquisition Cost, after giving effect to any such payments
or credits with respect to such Nuclear Material, any change in
location and such additional details as the parties may agree.
(b) Final Leasing Records.
For Nuclear Material previously covered by an Interim
Leasing Record, the Final Leasing Record shall be dated the first
day of the month following the date of completion of the first 200
full power hours of Heat Production of such Nuclear Material,
unless such date is the first day of a month, in which case the
Final Leasing Record shall be dated such date. For Nuclear
Material not previously covered by an Interim Leasing Record, the
Final Leasing Record shall be dated the date that the Lessor first
makes any payment with respect to the Acquisition Cost of such
Nuclear Material. A Final Leasing Record shall set forth a full
description of the Nuclear Material specified therein, the
Acquisition Cost thereof, the BTU Charge, the location, and such
other details with respect to such Nuclear Material as the parties
may agree.
(c) Payment of Nuclear Material Costs.
Invoices of Manufacturers, or of other persons performing
services, covering Nuclear Material to be leased hereunder shall be
forwarded to the Lessor in care of the Lessee at the Lessee's
address. Upon receipt by the Lessee of an invoice covering Nuclear
Material to be leased hereunder, the Lessee shall review such
invoice and upon the Lessee's approval thereof, the Lessee shall
forward such invoice endorsed with the Lessee's approval to the
Lessor, together with a Leasing Record completed and signed by a
Lessee Representative covering such Nuclear Material. The Lessee's
invoice for any cost incurred by it and includable in the
Acquisition Cost of any Nuclear Material shall be forwarded to the
Lessor and to the Secured Parties, together with a Leasing Record
completed and signed by a Lessee Representative covering such
costs. After receipt of such invoice and Leasing Record, the
Lessor, subject to the limitation on the Maximum Stipulated
Casualty Value of Nuclear Material contained in Section 4, shall
pay such invoice as provided therein or in the related purchase
agreement and shall execute the Leasing Record and return a copy
thereof to the Lessee and the Secured Parties. The Leasing Record
shall be dated as provided for in this Lease Agreement. To the
extent that the Acquisition Cost of the Nuclear Material covered by
any Leasing Record has been paid or incurred by the Lessee, the
Lessor, subject to the limitation on Maximum Stipulated Casualty
Value of Nuclear Material contained in Section 4, shall promptly
reimburse the Lessee. The Lessee shall (i) pay all costs and
expenses of freight, packing, insurance, handling, storage,
shipment and delivery of the Nuclear Material to the extent that
the same have not been included in the Acquisition Cost; and (ii)
at its own cost and expense, furnish such labor, equipment and
other facilities and supplies, if any, as may be required to
install and erect the Nuclear Material to the extent that the cost
and expense thereof have not been included in the Acquisition Cost.
Such installation and erection shall be in accordance with the
specifications and requirements of each Manufacturer.
(d) Intermingling of Fuel Assemblies.
Nuclear Material specified in a Leasing Record and leased
hereunder shall, subject to the provisions of Section 10(h) hereof,
be owned exclusively by the Lessor and leased to the Lessee
hereunder. The Lessee agrees that in no case will it cause or
permit nuclear material owned by any person, firm or corporation
other than the Lessor to be included in an assembly or sub-assembly
which is owned by the Lessor and leased hereunder. However, fuel
assemblies or sub-assemblies owned by the Lessor and leased to the
Lessee hereunder may be intermingled in a Generating Facility with
fuel assemblies or sub-assemblies not owned by the Lessor and
leased to the Lessee hereunder, provided that the Nuclear Material
constituting assemblies or sub-assemblies owned by the Lessor shall
be readily identifiable by serial number or other distinguishing
marks. The Lessor shall not be liable to the Lessee for any
failure or delay in obtaining Nuclear Material or making delivery
thereof.
7. No Warranties or Representation by Lessor.
THE NUCLEAR MATERIAL IS LEASED AS-IS, WHERE-IS IN THE
CONDITION THEREOF AND SUBJECT TO THE RIGHTS OF ANY PARTIES IN
POSSESSION THEREOF, THE STATE OF THE TITLE THERETO, THE RIGHTS OF
OWNERSHIP THEREIN AND TO ALL APPLICABLE LAWS, RULES, REGULATIONS,
ORDERS, WRITS, INJUNCTIONS, DECREES, CONSENTS, APPROVALS,
EXEMPTIONS, AUTHORIZATIONS, LICENSES AND WITHHOLDING OF OBJECTIONS
OF ANY GOVERNMENTAL OR PUBLIC BODY OR AUTHORITY AND ALL OTHER
REQUIREMENTS HAVING THE FORCE OF LAW APPLICABLE AT ANY TIME TO ANY
OF THE NUCLEAR MATERIALS OR ANY ACT OR TRANSACTION WITH RESPECT
THERETO OR PURSUANT TO THIS LEASE AGREEMENT, IN EACH CASE AS IN
EXISTENCE WHEN THE SAME FIRST BECOMES SUBJECT TO THIS LEASE
AGREEMENT, WITHOUT REPRESENTATIONS OR WARRANTIES OF ANY KIND BY THE
LESSOR, OR ANY PERSON ACTING ON ITS BEHALF. THE LESSEE
ACKNOWLEDGES AND AGREES THAT NEITHER THE LESSOR, ITS DIRECTORS,
OFFICERS AND EMPLOYEES, ANY COMPANY, PERSON OR FIRM CONTROLLING,
CONTROLLED BY OR UNDER COMMON CONTROL WITH ANY OF THEM NOR ANY
OTHER PERSON ACTING ON BEHALF OF THE LESSOR HAS HAD AT ANY TIME
PHYSICAL POSSESSION OF ANY PORTION OF THE NUCLEAR MATERIAL, HAS
MADE ANY INSPECTION THEREOF, HAS GIVEN ANY ADVICE TO THE LESSEE OR
HAS MADE ANY RECOMMENDATION TO THE LESSEE WITH RESPECT TO THE
CHOICE OF THE SUPPLIER, VENDOR OR PROCESSOR OF THE NUCLEAR MATERIAL
LEASED OR TO BE LEASED HEREUNDER OR WITH RESPECT TO THE PROCESSING,
MILLING, CONVERSION, ENRICHMENT, FABRICATION, CONTAINERIZATION,
TRANSPORTATION, UTILIZATION, STORAGE OR REPROCESSING OF THE SAME.
THE LESSEE ALSO ACKNOWLEDGES AND AGREES THAT NEITHER THE LESSOR,
ITS DIRECTORS, OFFICERS AND EMPLOYEES, ANY COMPANY, PERSON OR FIRM
CONTROLLING, CONTROLLED BY OR UNDER COMMON CONTROL WITH ANY OF
THEM, NOR ANYONE ACTING ON BEHALF OF THE LESSOR HAS MADE ANY
WARRANTY OR OTHER REPRESENTATION, EXPRESS OR IMPLIED, THAT THE
NUCLEAR MATERIAL LEASED OR TO BE LEASED UNDER THIS LEASE AGREEMENT
(a) WILL NOT RESULT IN INJURY OR DAMAGE TO PERSONS OR PROPERTY, (b)
WILL BE USEABLE BY THE LESSEE OR WILL ACCOMPLISH THE RESULTS WHICH
THE LESSEE INTENDS FOR SUCH NUCLEAR MATERIAL, OR (c) IS SAFE IN ANY
MANNER OR RESPECT. THE LESSEE ALSO ACKNOWLEDGES AND AGREES THAT
THE LESSOR, ITS DIRECTORS, OFFICERS AND EMPLOYEES, ANY COMPANY,
PERSON OR FIRM CONTROLLING, CONTROLLED BY OR UNDER COMMON CONTROL
WITH ANY OF THEM, AND ANYONE ACTING ON BEHALF OF ANY OF THEM IS NOT
A MANUFACTURER OR ENGAGED IN THE SALE OR DISTRIBUTION OF NUCLEAR
MATERIAL AND HAS NOT MADE AND DOES NOT HEREBY MAKE ANY
REPRESENTATION, WARRANTY OR COVENANT, EXPRESS OR IMPLIED, WITH
RESPECT TO THE MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
CONDITION, QUALITY, USEABILITY, DURABILITY, SUITABILITY OR
CONSEQUENCES OF USE OR MISUSE OF THE NUCLEAR MATERIAL IN ANY
RESPECT OR IN CONNECTION WITH OR FOR THE PURPOSES OR USES OF THE
LESSEE, OR ANY OTHER REPRESENTATION OR WARRANTY OF ANY KIND OR
CHARACTER WHATSOEVER, EXPRESS OR IMPLIED.
8. Lease Term; Early Termination; Termination of Leasing Records
(a) The Lessor hereby leases to the Lessee, and the Lessee
hereby leases from the Lessor, the Nuclear Material for the term
provided in this Lease Agreement and subject to the terms and
provisions hereof.
(b) The term of this Lease Agreement shall begin at 12:01
A.M., Cleveland, Ohio time, on December 27, 1990, and, unless
earlier terminated as provided in this Section 8 or in Sections 17
or 18 hereof, shall end at the close of business in Cleveland, Ohio
on the Scheduled Termination Date.
(c) The Lessee may at any time on or after January 1, 1992,
terminate the Lease Agreement and the lease of Nuclear Material by
giving written notice ("Notice of Lease Termination") thereof to
the Lessor and to the Secured Parties. Such Notice of Lease
Termination, shall specify a Termination Settlement Date, which
shall be the first Business Day of a calendar month not less than
30 days following the date of said Notice of Lease Termination, and
not later than the Scheduled Termination Date in effect on the date
such notice is given.
(d) Following the giving of a notice of termination of
automatic extension of the Scheduled Termination Date or the giving
of a Notice of Lease Termination under section 8(c) hereof, all
obligations of the Lessor and Lessee hereunder, including the
obligations of the Lessee to pay Basic Rent and Additional Rent,
and of the Lessor to acquire and pay for Nuclear Material and lease
the same to the Lessee, shall continue until the Termination
Settlement Date. On such Termination Settlement Date, the Lessee
shall be obligated to pay to the Lessor, as the purchase price for
the Nuclear Material, an amount equal to the sum of (x) the
Stipulated Casualty Value of all Nuclear Material leased hereunder
as of the Termination Settlement Date and (y) the Termination Rent
on the Termination Settlement Date. The Lessor shall be obligated
to deliver to the Lessee or to any designee of the Lessee a
Lessor's Bill of Sale vesting title to and ownership of the Nuclear
Material in the Lessee or in the Lessee's designee free and clear
of all Liens under the Collateral Agreements (but only if the
Secured Parties are obligated to release such liens in accordance
with Section 11 of the Security Agreement).
(e) The Lessee shall deliver to the Lessor and to the Secured
Parties an SCV Confirmation Schedule in the form of Exhibit F
hereto on or within 30 days following the date on which any Nuclear
Material leased hereunder is removed from the reactor of either
Generating Facility for purposes of "cooling-off" preliminary to
reprocessing or permanent on-site safe storage and/or off-site
disposal. If the Lessee elects within 30 days following the
receipt by Lessor of such SCV Confirmation Schedule to extend the
lease term thereof for the purposes of reprocessing any such
Nuclear Material, then the Lessor and the Lessee shall enter into
an Interim Leasing Record with respect to such Nuclear Material in
its then condition. In all other cases, the Final Leasing Record
with respect to any such Nuclear Material shall be terminated and
the Lessee shall immediately pay to the Lessor all amounts,
including Stipulated Casualty Value, with respect to such Nuclear
Material, and, upon receipt thereof, the Lessor shall transfer
title to such Nuclear Material, free and clear of the Liens created
by the Collateral Agreements (but only if the Secured Parties are
obligated to release such Liens in accordance with Section 11 of
the Security Agreement), to the Lessee or to any third party
designated by Lessee by executing and delivering to the Lessee or
any such designee a Lessor's Bill of Sale.
9. Payment of Rent; Payments with Respect to the Lessor's
Financing Costs.
(a) Basic Rent.
The Lessee shall pay Basic Rent monthly in advance on the
first day of the month, except that Basic Rent for any partial
first month of the lease of any Nuclear Material shall be paid on
the first day of such lease term. If such first day of the month
or first day of the lease term is not a Business Day then payment
shall be made on the next following Business Day.
(b) Additional Rent.
In addition to the Basic Rent, the Lessee will also pay
from time to time as provided in this Lease Agreement or on demand
of the Lessor, all Additional Rent in or within five (5) days of
the due date thereof; provided, however, that any amount of
Additional Rent due with respect to Yield Maintenance Amount shall
be paid to the Lessor on the same date that the Lessor is obligated
to make such payment under the Note Agreement. In the event of any
failure by the Lessee to pay any Additional Rent, the Lessor shall
have all the rights, powers and remedies as in the case of failure
to pay Basic Rent.
(c) Prepayments of Basic Rent.
The Lessee may prepay Basic Rent at any time. Such
payment shall be credited against subsequent amounts owed by the
Lessee on account of Basic Rent.
(d) Wire Payment; Procedure for Paying Basic Rent.
All payments of Rent and other payments to be made by the
Lessee to the Lessor pursuant to this Lease Agreement shall be paid
to the Lessor (or, at the Lessor's request, to the Secured Parties)
in Federal funds or in other funds immediately available at such
address. The Lessee shall furnish to the Lessor each month during
the Lease Term a summary of the rental calculations for such month
covering all outstanding Leasing Records.
On the Basic Rent Payment Date, the Lessee shall deliver
to the Lessor a signed and completed SCV Confirmation Schedule.
All such Schedules delivered by the Lessee pursuant to the
provisions of this Lease Agreement shall constitute representations
of the Lessee as to the accuracy of the matters contained therein.
(e) Purchase of Nuclear Material by Lessee.
The Lessee shall, upon the regularly scheduled final
maturity date of one or more Notes of the Lessor, in each case
under circumstances where the Lessor cannot obtain funds to meet
such maturities through the proceeds of borrowings by the Lessor
under the Credit Agreement and the Note Agreement, purchase an
amount of Nuclear Material to be designated by the Lessee not less
than 3 Business Days prior to such purchase, by delivering to the
Lessor an SCV Confirmation Schedule in the form of Exhibit F hereto
showing that the Stipulated Casualty Value of the designated
Nuclear Material is not less than the amount of the Lessor's
borrowings maturing under the circumstances set forth above. On
the date specified for such purchase, the Lessee shall pay an
amount equal to the Stipulated Casualty Value thereof, together
with any Additional Rent then due and payable to the Lessor.
Thereupon, the Lessor shall deliver to the Lessee a Lessor's Bill
of Sale transferring to the Lessee for no additional consideration,
all right, title, interest and claim of the Lessor to such portion
of the Nuclear Material free and clear of the Liens under the
Collateral Agreements (but only if the Secured Parties are
obligated to release such Liens in accordance with Section 11 of
the Security Agreement). Thereupon, such portion of the Nuclear
Material shall cease to be subject to any provision of this Lease
Agreement and, if the Secured Parties are obligated to release such
Liens pursuant to such section, of the Collateral Agreements. Upon
delivery of such Bill of Sale, the Lessor and the Lessee shall
execute a supplemental Leasing Record eliminating such portion of
the Nuclear Material from the description of the Nuclear Material
leased hereunder and making other necessary changes to the Leasing
Record.
10. Compliance with Laws; Restricted Use of Nuclear Material;
Assignments; Permitted Liens; Spent Fuel.
(a) Compliance with Legal Requirements.
Subject to the provisions of Section 11 hereof, the
Lessee agrees to comply with all Legal Requirements.
(b) Recording of Title.
The Lessee shall promptly and duly execute, deliver, file
and record all such further counterparts of this Lease Agreement or
such certificates, Bills of Sale, financing and continuation
statements and other instruments as may be reasonably requested by
the Lessor, and take such further actions as the Lessor shall from
time to time reasonably request, in order to establish, perfect and
maintain the rights and remedies created or intended to be created
in favor of the Lessor and the Secured Parties hereunder and the
Lessor's title to and interest in the Nuclear Material as against
the Lessee or any third party in any applicable jurisdiction.
(c) Exclusive Use of Nuclear Material.
So long as no Lease Event of Default shall have occurred
and be continuing, the Lessee may use the Nuclear Material in the
regular course of its business or in the business of any subsidiary
or affiliate of the Lessee, and may, subject to Section 3(d) hereof
and after notice in writing to the Lessor and at the Lessee's sole
expense (without limiting the Lessee's rights to request payment by
the Lessor of such expense as provided in Section 6 hereof), move
such Nuclear Material to any other location for the purpose of
having services performed thereon in connection with any stage of
the Nuclear Material Cycle other than Heat Production and the
"cooling-off" stage, provided that (i) no such action shall
materially reduce the then fair market value of such Nuclear
Material, (ii) such Nuclear Material shall be and remain the
property of the Lessor, subject to this Lease Agreement, (iii) all
Legal Requirements (including, without limitation, all necessary
government approvals) shall have been met or obtained, and all
necessary or advisable recordings, filings and registrations which
the Lessor shall reasonably consider advisable shall have been duly
made in order to protect the validity and effectiveness of this
Lease Agreement and the security interest created in the Security
Agreement, and (iv) in the case of any movement of Nuclear Material
to any location outside the continental United States, the Lessee
shall have delivered to the Lessor and the Secured Parties evidence
reasonably satisfactory to the Lessor and Secured Parties
(including, if requested, an opinion of independent outside counsel
to the .Lessee) that insurance and/or indemnification against
liability to third persons for death or injury or damage to
property exists protecting the interests of the Lessor, the Lessee,
and the Secured Parties. The Lessee shall maintain and make
available to the Lessor for examination upon reasonable notice
complete and adequate records pertaining to receipt, possession,
use, location, movement, physical inventories and any other
information reasonably requested by the Lessor with respect to the
Nuclear Material leased by the Lessee.
(d) Additional Lessee Covenants.
The Lessee agrees to use every reasonable precaution to
prevent loss or damage to the Nuclear Material leased hereunder.
All individuals handling or operating Nuclear Material in the
possession of the Lessee shall be conclusively presumed not to be
agents of the Lessor. The Lessee shall cooperate fully with the
Lessor and all insurance companies and governmental agencies
providing insurance under Section 12 hereof in the investigation
and defense of any claims or suits arising from the licensing.
acquisition, storage, containerization, transportation, blending,
transfer, consumption, leasing, insuring, operating, disposing,
fabricating and reprocessing of the Nuclear Material. To the
extent required by any applicable law or regulation, the Lessee
shall attach to the Nuclear Material the form of required notice to
protect or disclose the ownership of the Lessor or that the Nuclear
Material is leased. So long as no Lease Event of Default shall
have occurred and be continuing, the Lessor will assign or
otherwise make available to the Lessee all of its rights under any
Manufacturer's warranty on Nuclear Material. The Lessee shall pay
all costs, expenses, fees and charges, except Acquisition Costs,
incurred by the Lessee in connection with the use and operation of
Nuclear Material leased hereunder during the Lease Term of such
Nuclear Material. The Lessee hereby assumes all risks of loss or
damage of Nuclear Material however caused and shall, at its own
expense, keep the Nuclear Material in good operating condition and
repair, reasonable wear and tear, obsolescence and exhaustion
excepted.
(e) Assignment by Lessor.
Except as otherwise herein provided, the Lessor may not,
without the prior written consent of the Lessee, sell, assign,
transfer or convey the Nuclear Material or any interest therein or
in the Lease Agreement, or grant to any party a security interest
in, or create a lien or encumbrance upon, all or any part of its
right, title and interest in this Lease Agreement and in any
Nuclear Material leased hereunder, provided that such consent shall
not be required if (i) the Lessor shall advise the Lessee of such
action, (ii) any such security interest, lien, encumbrance or
assignment shall be expressly subject and subordinate to the
interest of the Lessee in such Nuclear Material and in this Lease
Agreement, and to all terms and provisions of this Lease Agreement,
and (iii) the Lessor shall be and remain responsible for the
performance of all terms, conditions and obligations under this
Lease Agreement required to be performed by the Lessor, including
but not limited to Lessor's obligations under Section 3 hereof.
After receipt by the Lessee of written notice from the Lessor of
any assignment by the Lessor of Rents or other sums payable by
Lessee under this Lease Agreement, the Lessee shall make such
payments as directed in such notice of assignment and such payments
shall discharge the obligations of the Lessee hereunder to the
extent of such payments. The Lessee hereby consents to the
security interest and other rights and interests granted to the
Secured Parties under the Security Agreement, dated as of the date
first above written.
(f) Liens; Permitted Liens.
The Lessee will not directly or indirectly create or
permit to be created or to remain, and will discharge, any
mortgage, lien, encumbrance or charge on, security interest in, or
conditional sale or other title retention agreement with respect
to, the Nuclear Material or any portion thereof, or upon the
Lessee's leasehold interest therein, or upon the Basic Rent,
Additional Rent, or any other sum payable under this Lease
Agreement, other than Permitted Liens and other liens, charges or
encumbrances resulting from acts of the Lessor or securing
obligations of the Lessor which the Lessee is not obligated to pay
or discharge under the terms of this Lease Agreement.
(g) Assignment by Lessee.
Subject to all applicable law, rules and regulations, the
Lessee may assign any right or interest which it may have under
this Lease Agreement or in any Nuclear Material to a subsidiary or
affiliate of the Lessee in which case such subsidiary or affiliate
shall, 'except as otherwise provided in this sentence, be deemed to
be the Lessee hereunder, provided, however, that in any such case
the Lessee shall give prior written notice of such assignment to
the Lessor and to the Secured Parties, and provided further that no
such assignment shall in any way limit or affect the Lessee's
obligations and duties hereunder.
(h) Transfer of Title to Manufacturers.
The parties recognize that, during the processing and
reprocessing of Nuclear Material before and after its utilization
in the Generating Facilities for the production of power, the
Manufacturer performing services on the Nuclear Material may
require that title thereto be transferred to such Manufacturer
and/or that the Nuclear Material be commingled with other nuclear
material, with an obligation for the Manufacturer, upon completion
of the services, to reconvey a specified amount of nuclear
material. The standard enrichment contracts of the Department of
Energy contain such provisions. Therefore, the parties hereto
agree that Nuclear Material leased hereunder may become subject to
such a contract provision, and that the action contemplated by such
provision may be taken, notwithstanding any provision of this Lease
Agreement to the contrary, that, as between the Lessor and the
Lessee, such Nuclear Material shall be deemed to be still leased
hereunder while title thereto is in the Manufacturer, and that the
nuclear material exchanged by the Manufacturer upon completion of
its services shall be automatically leased hereunder in
substitution for the Nuclear Material originally delivered to the
Manufacturer.
(i) Spent Fuel.
Without the consent of the Lessor, the Lessee shall not
permit any Nuclear Material leased hereunder, which shall have been
removed from a Generating Facility for the purpose of "cooling-
off", storage, repair or reprocessing, to be removed from the site
of the Generating Facilities unless (i) the new site of such
Nuclear Material is a facility maintaining liability insurance and
indemnification fully insuring and indemnifying the Lessor, the
Lessee and the Secured Parties under the Atomic Energy Act and any
other law, rule or regulation, or (ii) the lease of such Nuclear
Material shall, concurrently with its removal from the Generating
Facilities, be terminated by the Lessee pursuant to the provisions
of Section 8 or 18 hereof, as applicable, with the Lessee acquiring
the ownership thereof pursuant to Section 8(d) or Section 18(d), as
applicable.
11. Permitted Contests.
The Lessee, at its expense, may in its own name or, if
necessary and permitted, in the name of the Lessor or Secured
Parties (and, if necessary but not so permitted, the Lessee may
require the Lessor or the Secured Parties to) contest after prior
notice to the Lessor, by appropriate legal proceedings conducted in
good faith and with due diligence, the amount, validity or
application, in whole or in part, of any Imposition or lien
therefor, or any Legal Requirements or Insurance Requirements, or
any matter underlying Lessee's indemnity obligations under Section
13 hereof, or any other mortgage, lien, encumbrance, charge,
security interest, conditional sale or other contract or agreement
referred to in Section 10 hereof; provided that (i) in the case of
an unpaid Imposition or lien therefor, such proceedings shall
suspend the collection thereof from the Lessor, (ii) neither the
Nuclear Material or any portion thereof, nor the taking of any step
necessary or proper with respect thereto in the management thereof
through any stage of the Nuclear Material Cycle, nor the
performance of any other act required to be performed by the Lessee
under this Lease Agreement would be enjoined, prevented or
otherwise interfered with, (iii) the Lessor would not be subject to
any additional civil liability (other than interest which the
Lessee agrees to pay), or any criminal liability, for failure to
pay any such Imposition or to comply with any such Legal
Requirements or Insurance Requirements or any such other mortgage,
lien, encumbrance, charge, contract or agreement, and (iv) the
Lessee shall have set aside on its books adequate reserves (in
accordance with generally accepted accounting principles) with
respect thereto and shall have furnished such security, if any, as
may be required in the proceedings or reasonably requested by the
Lessor. The Lessee will pay, and save the Lessor harmless against,
all losses, judgments, decrees and costs, including attorneys' fees
and expenses, in connection with any such contest and will,
promptly after the determination of such contest pay and discharge
the amounts which shall be levied, assessed or imposed or
determined to be payable therein, together with all penalties,
fines, interest, costs and expenses thereon or in connection
therewith and such indemnification and each other indemnification
obligation in favor of the Lessor hereunder shall survive any
termination of this Lease Agreement in whole or in part.
12. Insurance; Compliance with Insurance Requirements.
The Lessee shall comply with all Insurance Requirements and
with all Legal Requirements pertaining to insurance. Without
limiting the foregoing, the Lessee shall:
(a) Liability Insurance.
At its own cost and expense, procure and maintain, or
cause to be procured and maintained, liability insurance and
indemnification with respect to Nuclear Material leased hereunder
insuring and indemnifying the Lessor, the Lessee, and the Secured
Parties to the full extent required or available under the Atomic
Energy Act or under any other law, rule or regulation. In the
event the provisions of the Atomic Energy Act with respect to
liability insurance and the indemnification of licensees and
operators of Nuclear Material thereunder or any other provisions of
the Atomic Energy Act which benefit the Lessor or the Secured
Parties shall change, then the Lessee shall use its best efforts to
obtain equivalent insurance and indemnification from the Nuclear
Regulatory Commission or from such other public and/or private
sources from whom such coverage is available.
(b) Casualty Insurance.
At its own cost and expense, procure and maintain
physical damage insurance with respect to the Nuclear Material
insuring the Lessor and the Secured Parties against loss or damage
to the Nuclear Material to the extent that such insurance coverage
may be available from public and private sources. The Lessee may
self-insure with respect to liability and physical damage insurance
to the extent of $2,500,000, which amount may be increased from
time to time as the Lessor and the Lessee may agree in writing,
provided that such self-insurance is permitted under all applicable
law, rules and regulations.
(c) Third Parties - Insurance Requirements.
Use its best efforts to provide that Nuclear Material,
while in the possession of third parties, is covered for liability
insurance to the maximum extent available, and for physical damage
insurance in an amount not less than the Stipulated Casualty Value
of such Nuclear Material. To the extent that any such third party
is maintaining such insurance coverage for the Nuclear Material;
the Lessee shall have no obligation hereunder to do so.
(d) Named Insureds; Loss Payees.
Provide for the Lessor and the Secured Parties to be
named insureds where possible, and, with respect to physical damage
coverage, named loss payees in all insurance policies and
indemnification agreements relating to the Nuclear Material
required under this Section. All such policies and, where
possible, indemnification agreements, shall provide for at least
ten (10) days prior written notice to the Lessor and to the Secured
Parties of any cancellation or material alteration of such
policies.
(e) Insurance Certificates.
Upon request of the Lessor or the Secured Parties,
provide Lessor or the Secured Parties with copies of the policies
or insurance certificates in respect of the insurance procured
pursuant to the provisions of this Section, and will advise the
Lessor and the Secured Parties of all expirations and renewals of
policies and all notices issued by the insurers thereunder. Within
a six-month period from the execution of this Lease Agreement and
at yearly intervals thereafter, the Lessee will furnish to the
Lessor and the Secured Parties a certificate as to the insurance
coverage provided pursuant to this Section and will further give
notice as to any material change in the nature of such coverage,
including, to the best of the Lessee's knowledge, any material
change in the provisions of the Atomic Energy Act or applicable
rule or regulation thereunder with respect to liability insurance
and indemnification, or in the application, interpretation or
enforcement thereof. The Lessor shall be under no duty to examine
such insurance policies or indemnification agreements or to advise
the Lessee in case the Lessee is not in compliance with any
Insurance Requirements.
13. Indemnity.
Without limitation of any other provision of this Lease
Agreement, including Section 11, the Lessee agrees to indemnify and
hold harmless the Lessor and the Secured Parties and all companies,
persons or firms controlling, controlled by, or under common
control with either of them and the respective share-holders,
directors, officers and employees of the foregoing against any and
all claims, demands and liabilities of whatsoever nature, and all
costs, losses, damages, obligations, penalties, causes of action,
judgments and expenses (including reasonable attorneys' fees and
expenses) directly or indirectly relating to or in any way arising
out of:
(a) defects in title to Nuclear Material on acquisition by
the Lessor, ownership of and interest in the Nuclear Material
leased or to be leased hereunder (the term "Nuclear Material" when
used in this Section 12 shall include, in addition to all other
Nuclear Material, nuclear material the lease of which has been
terminated hereunder and which is in storage, or is being
transported to storage, and which has not been sold or disposed of
by the Lessor to the Lessee or to a third party) or the licensing,
ordering, rejection, use, nonuse, misuse, possession, control,
installation, acquisition, storage, containerization,
transportation, blending, transfer, consumption, leasing, insuring,
operating, disposing, fabricating, refining, milling, enriching,
conversion, cooling, processing, condition, operation, repair and
reprocessing thereof, or resulting from the condition of the
environment including the adjoining and/or underlying land, water,
buildings, streets or ways, except to the extent that such costs
are included in the Acquisition Cost of Nuclear Material leased or
to be leased hereunder within the Maximum Stipulated Casualty Value
specified within the limits provided by Section 4 hereof (or within
any change of such limit agreed to in writing by the Lessor and the
Lessee), and except for any general administrative expenses of the
Secured Parties and of such representative;
(b) all costs, charges, damages or expenses and royalties
and/or claims and expenses of litigation (including, but not
limited to, attorneys' fees), arising out of or necessitated by the
assertion of any claim or demand based upon any infringement or
alleged infringement of any patent or other right, by or in respect
of any Nuclear Material; provided, however, that the Lessor will
make available to the Lessee all of the Lessor's rights under any
similar indemnification from a Manufacturer under any Nuclear
Material Contract;
(c) all federal, state, county, municipal or other fees and
taxes of whatsoever nature including, but not limited to, license,
qualification, franchise, sales, use, business, gross receipts, ad
valorem, property, excise, and occupation fees and taxes and
penalties and interest thereon, whether assessed, levied against or
payable by the Lessor or to which the Lessor is subject with
respect to the Nuclear Material or the ownership thereof or
interest therein or the licensing, ordering, ownership, use,
possession, control, acquisition, storage, containerization,
transportation, blending, milling, enriching, transfer,
consumption, leasing, insuring, operating, disposing, fabricating,
refining, conversion, cooling and reprocessing of Nuclear Material,
or measured in any way by the value thereof or by the business of
investment in, financing of or ownership by the Lessor with respect
thereto; provided, however, that Lessee shall not be obligated to
indemnify the Secured Parties for any taxes, whether federal, state
or local, based on or measured by net income of the Secured Parties
where taxable income is computed in substantially the same manner
as taxable income is computed under the Code;
(d) any injury to or disease, sickness or death of persons,
or loss of or damage to property occurring through or resulting
from any Nuclear Incident involving or connected in any way with
the Nuclear Material or any portion thereof;
(e) any violation, or alleged violation, of this Lease
Agreement by the Lessee or of any contracts or agreements to which
the Lessee is a party or by which it is bound or any laws, rules,
regulations, orders, writs, injunctions, decrees, consents,
approvals, exemptions, authorizations, licenses and withholdings of
objection, of any governmental or public body or authority and all
other requirements having the force of law applicable at any time
to the Nuclear Material or any action or transaction by the Lessee
with respect thereto or pursuant to this Lease Agreement;
(f) performance of any labor or service or the furnishing of
any materials in respect of the Nuclear Material or any portion
thereof, except to the extent that such costs are included in the
Acquisition Cost of such Nuclear Material within the Maximum
Stipulated Casualty Value specified provided in Section 4 hereof
(or within any change of such limit agreed to in writing by the
Lessor and the Lessee);
(g) liabilities based upon a theory of strict liability in
tort, negligence or willful acts to the extent that such
liabilities relate to the Nuclear Material or any action or
transaction with respect thereto or pursuant to this Lease
Agreement; or
(h) the Lease Agreement, the Nuclear Material or any related
transactions or documents.
The Lessee shall, forthwith, upon demand, reimburse the
Lessor, the Secured Parties or other indemnified parties, as the
case may be, for any sum or sums expended with respect to any of
the foregoing or advance such amount, upon request by the Lessor,
the Secured Parties or such other party for payment thereof;
provided, however, that the Lessee shall not indemnify any party
seeking indemnification under this Section 13, for any claims,
demands, liabilities, costs or expenses (other than any such
claims, demands, liabilities, costs, or expenses arising out of the
gross negligence or willful misconduct of such party) which arise
or result from, or relate to obligations of such party as an
insurer under contracts or agreements of insurance or reinsurance.
Without limiting any of the foregoing provisions of this Section
13, to the extent that the Lessee in fact indemnifies the Lessor,
the Secured Parties or such other party under this indemnity
provision, the Lessee shall be subrogated to the rights of the
Lessor, the Secured Parties and such other party in the affected
transaction and shall have a right to determine the settlement of
claims therein, provided that any such rights to which the Lessee
shall be subrogated shall be subordinate and subject in right of
payment to the prior payment in full of all liabilities to the
Lessor of the person or entity in respect of which such rights
exist. The foregoing indemnity shall not be affected by any
termination of this Lease Agreement, or of the lease of any Nuclear
Material hereunder.
14. Casualty and Other Events.
Upon the occurrence of any one or more of the following
events:
(a) the loss, destruction or damage beyond repair of any
Nuclear Material leased hereunder;
(b) the commandeering or attachment of any Nuclear Material
leased hereunder by reason of the act of any governmental
instrumentality for a period exceeding ninety (90) days; or
(c) a determination by the Lessee in its sole discretion that
any Nuclear Material is no longer useful in its then condition for
the purpose of generating power in either Generating Facility or is
economically unserviceable to the to the Lessee, provided that no
Lease Event of Default has occurred and is continuing and provided
that no such determination may be made by Lessee with respect to
such Nuclear Material prior to January 1, 1994;
Then, in any such case, the Lessee promptly shall give
written notice of any such event and upon the earlier of (i) 10
days following receipt of any insurance or other proceeds paid with
respect to the foregoing and (ii) two hundred and seventy (270)
days of the occurrence of any such event, the Lessee shall pay to
the Lessor an amount equal to the then Stipulated Casualty Value of
such Nuclear Material, together with any Basic Rent and Additional
Rent then due. The lease of such Nuclear Material hereunder and
the obligation of the Lessee to pay Basic Rent and Additional Rent
with respect to such Nuclear Material shall continue until the day
on which the Lessor receives payment of such Stipulated Casualty
Value, Basic Rent and Additional Rent. Upon receipt of such
payment, the Lessor shall deliver to the Lessee a Lessor's Bill of
Sale transferring all right, title, interest and claim of the
Lessor to such Nuclear Material, free and clear of the Liens
created by the Collateral Agreements (but only if the Secured
Parties are obligated to release such Liens in accordance with
Section 11 of the Security Agreement), and thereupon the lease with
respect to such Nuclear Material shall terminate.
15. Nuclear Material to Remain Personal Property.
It is expressly understood and agreed that the Nuclear
Material shall be and remain personal property notwithstanding the
manner in which it may be attached or affixed to realty and
notwithstanding any law or custom or the provisions of any lease,
mortgage or other instrument applicable to any such realty. The
Lessee agrees to indemnify the Lessor and the Secured Parties
against and to hold the Lessor and the Secured Parties harmless
from all losses, costs and expenses (including reasonable
attorneys' fees and expenses) resulting from any of the Nuclear
Material becoming part of any realty. Upon termination of the
lease of any Nuclear Material, any costs of removal,
transportation, storage and delivery of such Nuclear Material shall
be paid by the Lessee. The Lessor and the Secured Parties shall
not be liable for any physical damage caused to any realty or any
building by reason of the removal of the Nuclear Material
therefrom.
16. Events of Default.
Each of the following events of default by the Lessee shall
constitute a "Lease Event of Default" and give rise to the rights
on the part of the Lessor described in Section 17 hereof:
(a) Default in the payment of Basic Rent or Additional Rent,
if any, on the date on which such payment is due and the
continuance of such default for ten (10) days;
(b) Default in the payment of Termination Rent or any amount
required to be paid under Section 9(e) on the date on which such
payment is due;
(c) Default in the payment or performance of any other
liability or obligation or covenant of the Lessee to the Lessor,
and the continuance of such default for thirty (30) days after
written notice to the Lessee sent by registered or certified mail;
provided that, no such default shall be deemed a Lease Event of
Default if (i) such default is curable but cannot be cured within
such thirty (30)-day period, (ii) the Lessee is diligently pursuing
such cure and effects such cure within 360 days of the date of such
default, and (iii) during the continuance thereof, such default
does not impair in any material respect the rights of the Lessor or
the Secured Parties in the Collateral or subject the Lessor or the
Secured Parties to onerous regulation or to any material
liabilities under law;
(d) The admission of insolvency or bankruptcy, inability to
pay debts as they mature, or entering into receivership on the part
of Lessee;
(e) The institution of bankruptcy, reorganization,
liquidation or receivership proceedings by or against the Lessee
and, if instituted against the Lessee, its consent thereto or the
pendency of such proceedings for sixty (60) days; or
(f) Other than pursuant to a condemnation proceeding, any
court, governmental officer or agency shall, under color of legal
authority, take and hold possession of any substantial part of the
property or assets of the Lessee.
17. Rights of the Lessor Upon Default of the Lessee.
Upon the occurrence of any Lease Event of Default, the Lessor
may, in its discretion, and shall, at the direction of the Secured
Parties, do one or more of the following:
(a) Terminate the lease of any Nuclear Material upon five (5)
days written notice to the Lessee sent by registered or certified
mail;
(b) Whether or not any lease of any Nuclear Material is
terminated, and, subject to any applicable law or regulation, take
immediate possession of any or all Nuclear Material or cause such
Nuclear Material to be taken from the possession of the Lessee, and
for such purpose, enter upon any premises without liability for so
doing or require the Lessee, at the Lessee's expense, to deliver
the Nuclear Material, properly containerized and insulated for
shipping to the Lessor or to such other person as Lessor may
designate, in which case the risk of loss shall be upon the Lessee
until such delivery is made;
(c) Whether or not any action has been taken under (a) or (b)
above, and subject to any applicable law or regulation, sell any
Nuclear Material (with or without the concurrence or request of the
Lessee) for cash at public or private sale and the Lessee shall be
liable for and shall promptly pay to the Lessor all unpaid Rent to
the date of receipt by the Lessor of the proceeds of such sale plus
any deficiency between the net proceeds of such sale and the
Stipulated Casualty Value of such Nuclear Material at the time of
such payment by the Lessee;
(d) Subject to any applicable law or regulation, sell in a
commercially reasonable manner, dispose of, hold, use, operate,
remove, lease or keep idle any Nuclear Material as the Lessor in
its sole discretion may decide, without any obligation to account
to the Lessee with respect to such action or inaction or any
proceeds thereof, except that the net proceeds of any such selling,
disposing of, holding, using, operating or leasing shall be
credited by the Lessor against any amount due to the Lessor from
the Lessee hereunder;
(e) Terminate this Lease Agreement as to any or all of the
Nuclear Material, or exercise any other right or remedy which may
be available under applicable law or proceed by appropriate court
action to enforce the terms hereof or to recover damages for the
breach hereof.
If the Lessee fails to deliver, promptly after written
request, the Nuclear Material pursuant to (b), above, subject to
reasonable wear and tear, use and exhaustion, in good operating
condition and repair, or converts or destroys any Nuclear Material,
the Lessee shall be liable to the Lessor for all Rent then due and
payable on the Nuclear Material, all other amounts then due and
payable under this Lease Agreement, the then Stipulated Casualty
Value of such Nuclear Material, plus any loss, damage and expense
(including without limitation reasonable attorneys' fees and
disbursements) sustained by the Lessor by reason of such Lease
Event of Default and the exercise of the Lessor's remedies with
respect thereto, including any costs incurred under the Credit
Agreement, the Note Agreement, and the Security Agreement, and any
other amounts owed to the Secured Parties with respect to the
Notes. If, upon the occurrence of a Lease Event of Default, the
Lessee delivers Nuclear Material to the Lessor or to such other
person as Lessor may designate, or if the Lessor repossesses or
causes Nuclear Material to be repossessed on its behalf, the Lessee
shall be liable for and the Lessor may recover from the Lessee all
Rent on the Nuclear Material due and payable to the date of such
delivery or repossession, all other amounts due and payable under
this Lease Agreement, plus any loss, damage and expense (including
without limitation reasonable attorneys' fees and disbursements)
sustained by the Lessor by reason of such Lease Event of Default
and the exercise of the Lessor's remedies with respect thereto. No
remedy referred to in this Section 17 is intended to be exclusive,
but each shall be cumulative and in addition to any other remedy
referred to above or otherwise available to the Lessor at law or in
equity and the exercise in whole or in part by the Lessor of any
one or more of such remedies shall not preclude the simultaneous or
later exercise by the Lessor of any or all such other remedies. No
waiver by the Lessor of any Lease Event of Default hereunder shall
in any way be, or be construed to be, a waiver of any future or
subsequent Lease Event of Default.
18. Termination After Certain Events.
(a) This Lease Agreement shall terminate prior to the
expiration of its term upon the happening of any of the following
"Terminating Events":
(i) Any change in, or new interpretation by a
governmental authority having jurisdiction relating to the
Price-Anderson Act, as amended, or the Atomic Energy Act, or
the regulations of the Nuclear Regulatory Commission
thereunder, in each case as in effect on the date of this
Lease Agreement, as a result of which, in the opinion of
independent counsel selected by the Lessor and reasonably
satisfactory to the Lessee and the Secured Parties, the Lessor
is prohibited from asserting any material right, protection or
defense available under applicable law as of the date of this
Lease Agreement with respect to civil or criminal actions
brought in connection with a Nuclear Incident;
(ii) There shall have occurred a Deemed Loss Event;
(iii) Any law or regulation or interpretation (judicial,
regulatory or otherwise) of any law or regulation shall be
adopted or enforced by any Court or governmental or regulatory
authority, and as a result of such adoption or enforcement,
approval of the transactions contemplated by this Lease
Agreement shall be required and shall not have been obtained
within any applicable grace period after such adoption or
enforcement, or as a result of which adoption or enforcement
this Lease Agreement or any transaction contemplated hereby,
including any payments to be made by the Lessee or the
ownership of the Nuclear Material by the Lessor, shall be or
become unlawful, or the performance of this Lease Agreement
shall be rendered impracticable in any material way;
(iv) The occurrence of a Nuclear Incident at either
Generating Facility as a result of which such Generating
Facility ceases to operate (or if such Generating Facility is
not in operation immediately prior to such Nuclear Incident,
the failure to resume operation as a result of such Nuclear
Incident) for a period of 24 consecutive months;
(v) There shall occur the revocation or material
adverse modification of any authorization, consent, exemption
or approval theretofore obtained from any regulatory body or
governmental authority necessary for the carrying out of the
intent and purposes of this Lease Agreement, or the actions or
transactions contemplated hereby, and the effectiveness of any
such revocation or material adverse modification shall not be
stayed pending any appeal thereof; or
(vi) If, with respect to either Generating Facility, any
governmental licenses, approvals or consents with respect to
such Generating Facility, without which such Generating
Facility cannot continue to operate, shall have been revoked
and the Lessee does not, in good faith, within 180 days of
such revocation, represent in writing to the Lessor that the
Lessee has made a good faith determination that such
Generating Facility will return to operation within 24 months
of such revocation, or for any other reason the Lessee shall
cease operating the Generating Facility for a period of 24
consecutive months.
(b) Upon the happening of any of the events listed in Section
18(a) hereof, this Lease Agreement shall cease and terminate,
except with respect to obligations and liabilities of the Lessee,
actual or contingent, which arose under the Lease Agreement on or
prior to the date of termination and except for the Lessee's
obligations set forth in Sections 10, 12 and 13 hereof, and in this
Section 18, all of which obligations will continue until the
delivery of documentation by the Lessor and the payment by the
Lessee provided for below, and except that after such delivery and
payment, the Lessee's obligations under Section 13 shall continue
as therein set forth as shall all of Lessee's indemnification
obligations set forth in other sections of this Lease Agreement.
Notwithstanding the foregoing, if a Terminating Event described in
either Section 18(a)(iv) or (vi) shall occur with respect to one
but not both of the Generating Facilities, then the lease of
Nuclear Material hereunder shall terminate only with respect to
such Nuclear Material as is then used in or specially designed for
use in the Generating Facility affected.
(c) Upon such termination, the entire interest of the Lessor
in the Nuclear Material, or in the case of a Terminating Event
described in Section 18(a)(iv) or (vi), the portion thereof
determined in accordance with Section 18(b), shall automatically
transfer to and be vested in the Lessee, without the necessity of
any action by either the Lessor or the Lessee, provided, however,
that if the Lessor shall have theretofore approved in writing such
person and the terms of such transfer, the entire interest of the
Lessor in such Nuclear Material shall, upon such termination,
automatically transfer to and be vested in any person designated by
the Lessee.
(d) Promptly after either party hereto shall learn of the
happening of any of the events listed in Section 18(a) hereof, such
party shall give notice thereof to the other party hereto and to
the Secured Parties, which notice shall (x) acknowledge that the
Lease Agreement has terminated, or, in the case of a Terminating
Event described in Section 18(a)(iv) or (vi), that the lease with
respect to a portion of the Nuclear Material hereunder shall have
terminated, subject to the continuing obligations of the Lessee
mentioned above, and that title to and ownership of such Nuclear
Material has transferred to and vested in the Lessee or such other
person, and (y) specify a Termination Settlement Date occurring, if
the notice is given by the Lessor, 270 days after the giving of
such notice or, if the notice is given by the Lessee, not less than
90 nor more than 270 days after the giving of such notice. After
such termination of this Lease Agreement and until such Termination
Settlement Date, the Lessee shall continue to pay Basic Rent and
Additional Rent. On such Termination Settlement Date, the Lessee
shall be obligated to pay to the Lessor as the purchase price for
the Nuclear Material, an amount equal to the sum of (x) Stipulated
Casualty Value of the Nuclear Material as of the Termination
Settlement Date, and (y) the Termination Rent on the Termination
Settlement Date. The Lessor shall be obligated to deliver to the
Lessee a Lessor's Bill of Sale on an as-is, where-is, non-
installment, cash sale basis, without recourse to or warranty or
agreement of any kind by the Lessor acknowledging the above
described transfer and vesting of title and ownership of the
Nuclear Material, free and clear of the Liens created by the
Collateral Agreements (but only if the Secured Parties are
obligated to release such Liens in accordance with Section 11 of
the Security Agreement).
19. Investment Tax Credit.
To the extent that the Lessee determines the Nuclear Material
is or becomes eligible for any investment or similar credit under
the Code as now or hereafter in effect, the Lessee shall request in
writing that the Lessor elect to treat the Lessee as having
acquired such Nuclear Material which is leased hereunder, and, if
permitted to do so under the Code and under any other applicable
law, rule or regulation, the Lessor, pursuant to such request of
the Lessee, shall provide the Lessee with an appropriate investment
credit election and the Lessee shall consent to such election. A
condition to the Lessor's making such election will be the
provision by the Lessee of a report or statement with respect to
all Nuclear Material as to which the investment credit election is
applicable. Such report or statement shall contain such
information and be in such form as may be required for Internal
Revenue Service reporting purposes. The Lessee shall indemnify and
hold harmless the Lessor and any affiliates with respect to any
adverse tax consequence, other than the loss of the credit, which
may result from such election.
20. Certificates; Information; Financial Statements.
(a) The Lessee will from time to time deliver to the Lessor
and the Secured Parties, promptly upon reasonable request:
(i) a statement executed by any Vice President of the Lessee,
certifying the dates to which the sums payable hereunder have been
paid, that this Lease Agreement is unmodified and in full effect
(or, if there have been modifications, that this Lease Agreement is
in full effect as modified, and identifying such modifications) and
that no Lease Event of Default has occurred and is continuing (or
specifying the nature and period of existence of any thereof and
what action the Lessee is taking or proposes to take with respect
thereto), (ii) such information with respect to the Nuclear
Material, as may reasonably be requested, and (iii) such
information with respect to the Lessee's operations, business,
property, assets, financial condition or litigation as the Lessor
or any assignee of the Lessor shall reasonably request.
(b) the Lessee will deliver to the Lessor and the Secured
Parties:
(i) Quarterly Financial Statements.
As soon as practicable and in any event within 90
days after the end of each quarterly period (other than the
last quarterly period) in each fiscal year, a balance sheet of
the Lessee as of the end of such quarter, and a comparative
earnings statement and cash flows statement of the Lessee for
such quarter, each certified as true and correct by the chief
accounting officer thereof;
(ii) Annual Financial Statements.
As soon as practicable and in any event within 120
days after the end of each fiscal year, an annual report of
the Lessee consisting of its financial statements, including
a balance sheet as of the end of such fiscal year and
statements of income and cash flows for the year then ended,
with all notes thereto, setting forth in each case in
comparative form corresponding consolidated figures from the
preceding annual audit, all in reasonable detail and certified
by independent public accountants of recognized standing
selected by the Lessee;
(iii) SEC Reports, etc.
With reasonable promptness, copies of all reports on
Form 8-K filed by the Lessee with the Securities and Exchange
Commission (or any governmental body or agency succeeding to
the functions of the Securities and Exchange Commission);
(iv) Other Information.
With reasonable promptness, such other financial
data as the Lessor and the Secured Parties may reasonably
request. Together with each delivery of financial statements
required by clause (b)(ii) above, the Lessee will deliver to
the Lessor and the Secured Parties an Officer's Certificate
demonstrating compliance by the Lessee with the terms of this
Lease Agreement and stating that there exists no Lease Event
of Default or, if any Lease Event of Default exists,
specifying the nature and period of existence thereof and.
what action the Lessee proposes to take with respect thereto.
The Lessee also covenants that forthwith upon the chief
executive officer, principal financial officer or principal
accounting officer of the Lessee obtaining knowledge of a
Lease Event of Default, it will deliver to the Lessor and the
Secured Parties an Officer's Certificate specifying the nature
and period of existence thereof and what action the Lessee
proposes to take with respect thereto.
21. Obligation of the Lessee to Pay Rent.
The Lessee's obligation to pay, as the same becomes due, Basic
Rent, Additional Rent, Termination Rent, and all other amounts
payable hereunder shall, subject to the covenant of the Lessor
contained in Section 3 hereof, be absolute and unconditional and
shall not be affected by any circumstance, including, without
limitation; (i) any setoff, counterclaim, recoupment, defense or
other right which the Lessee may have against the Lessor or anyone
else for any reason whatsoever; (ii) any defect in the title,
compliance with specifications, condition, design, operation or
fitness for use of, or any damage to or loss or destruction of, any
Nuclear Material; or (iii) any interruption or cessation in the use
or possession of any Nuclear Material by the Lessee for any reason
whatsoever; provided, however, that if an interruption or cessation
in the Lessee's use or possession of any Nuclear Material is caused
by any attachment or similar act by or on behalf of any creditor of
the Lessor, and is not attributable to any failure by the Lessee to
perform its obligations under this Lease Agreement, then the
Lessee's obligation to pay any of the foregoing amounts with
respect to such Nuclear Material shall be appropriately reduced for
the period of such interruption or cessation. The Lessee hereby
waives, to the extent permitted by applicable law, any and all
rights which it may now have or which at any time hereafter may be
conferred upon it, by statute or otherwise, to terminate, cancel,
quit or surrender this Lease Agreement except in accordance with
the express terms hereof. Each payment of Rent and each other
payment made by the Lessee shall be final and the Lessee will not
seek to recover all or any part of such payment from the Lessor for
any reason whatsoever.
22. Miscellaneous.
(a) Successors and Assigns.
This Lease Agreement shall be binding upon the Lessee and
the Lessor and their respective successors and assigns, and shall
inure to the benefit of the Lessee and the Lessor and their
respective successors and assigns.
(b) Waivers.
The parties hereto agree that either party shall not by
act, delay, omission or otherwise be deemed to have waived any of
its rights or remedies hereunder unless such waiver is given in
writing. A waiver on one occasion shall not be construed as a
waiver on any other occasion.
(c) Entire Agreement.
This Lease Agreement, together with the written
instruments provided for or contemplated hereby, the other Basic
Documents and other written agreements between the parties dated as
of the date hereof, constitute the entire agreement between the
parties hereto with respect to the leasing of Nuclear Material and
no representations, warranties, promises, guaranties or agreements,
oral or written, express or implied, have been made by either party
hereto, or by any one else with respect to this Lease Agreement or
the Nuclear Material leased hereunder, except as may be expressly
provided for herein or therein. Any change or modification of this
Lease Agreement must be in writing and duly executed by the parties
hereto.
(d) Descriptive Headings.
The captions in this Lease Agreement are for convenience
of reference only and shall not be deemed to affect the meaning or
construction of any of the provisions hereof.
(e) Severability.
Any provision of this Lease Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction. To the extent permitted by
applicable law, the Lessee hereby waives any provision of law which
renders any provision hereof prohibited or unenforceable in any
respect.
(f) Governing Law.
This Lease Agreement and the rights and obligations of
the parties hereunder shall be construed in accordance with and be
governed by the law of the State of Ohio.
(g) No Recourse.
This Lease Agreement is intended to be a corporate
obligation of the Lessor only, and all of the statements,
representations, covenants and agreements made by the Lessor
contained herein are made and intended only for the purpose of
binding the Lessor and establishing the existence of rights and
remedies provided for herein which can be exercised and enforced
against the Lessor. Therefore, anything contained in this Lease
Agreement to the contrary notwithstanding, no recourse may be made
against any incorporator, shareholder (direct or indirect),
affiliate, director, officer, employee or agent of the Lessor with
respect to claims against the Lessor arising under or relating to
this Lease Agreement; provided, however, that nothing in this
Section 20(g) shall relieve the Lessor from its corporate
obligations under this Lease Agreement.
IN WITNESS WHEREOF, the Lessor and the Lessee have caused
this Lease Agreement to be executed and delivered by their duly
authorized officers as of the day and year first above written.
DCC FUEL CORPORATION,
Lessor
ATTEST
/s/ Terrence J. Stone____ By /s/ Richard J. Wild____
Secretary Vice President
INDIANA MICHIGAN POWER COMPANY,
Lessee
ATTEST
/s/ Jeffrey D. Cross_____ By /s/ G. P. Maloney______
Assistant Secretary Vice President
STATE OF OHIO )
COUNTY OF FRANKLIN ) SS:
On this 27th day of December, 1990, before me personally
appeared G. P. Maloney, to me personally known, who, being by me
duly sworn, says that he is Vice President of Indiana Michigan
Power Company, that said instrument was signed on behalf of said
corporation by authority of its Board of Directors and he
acknowledged that the execution of the foregoing instrument was the
free act and deed of said corporation.
___/s/ Mary M. Soltesz___________
Notary Public
My Commission Expires: 7-13-94
STATE OF OHIO )
COUNTY OF CUYAHOGA ) SS:
On this 26th day of December, 1990, before me personally
appeared Terrence J. Stone, to me personally known, who, being by
me duly sworn, says that he is Vice President of DCC Fuel
Corporation, that said instrument was signed on behalf of said
corporation by authority of its Board of Directors and he
acknowledged that the execution of the foregoing instrument was the
free act and deed of said corporation.
__/s/ Elsie M. Kuzminchuk________
Notary Public
My Commission Expires: 2-2-92
APPENDIX A
DEFINITIONS
As used in the Basic Documents (as defined below), the
following terms shall have the following meanings (such definitions
to be applicable to both singular and plural forms of the terms
defined), except as otherwise specifically defined therein:
"Acquisition Cost" means the purchase price of any
Nuclear Material, any progress payments made thereon, costs of
milling, conversion, enrichment, fabrication, installation,
delivery, redelivery, containerization, storage, reprocessing, any
other costs incurred by the Company in acquiring the Nuclear
Material, plus in any case (i) any consulting costs incurred in
connection with any of the above enumerated costs, (ii) any
allowance for funds used during construction with respect to
Nuclear Material purchased by the Company, (iii) at the option of
Lessee, any Monthly Rent Component payable by Lessee to the Company
with respect to any Nuclear Material prior to the completion of the
first 200 full power hours of Heat Production of such Nuclear
Material, (iv) any sales, excise or other taxes and charges payable
by the Company with respect to any such payment for such Nuclear
Material, (v) at the option of Lessee, any Monthly Financing Charge
payable by Lessee to the Company with respect to Nuclear Material
during any period in which such Nuclear Material is subject to an
Interim Leasing Record, but excluding any interest charges or
penalties for late payment by the Company of the purchase price or
any portion thereof, if such late payment results from the
negligence of the Company, (vi) such other costs with respect to
any Nuclear Material as may be agreed by the Company and Lessee and
approved by the Lender and the Purchasers, in each case in writing,
and, in the case of any Nuclear Material removed from the
Generating Facilities for the purpose of "cooling off" and repair
or reprocessing, shall include the Stipulated Casualty Value
thereof at the time of such removal, if any, and (vii) at the
option of Lessee, any Financing Costs. Any amount realized by the
Company from the disposition of the by-products (including, but not
limited to, plutonium) of Nuclear Material specified in a Leasing
Record during the repair or reprocessing of such Nuclear Material
while leased hereunder shall be credited against the Acquisition
Cost of such Nuclear Material.
"Additional Rent" shall mean all legal, accounting,
administrative and other operating expenses and taxes incurred by
the Company to the extent not paid as part of Basic Rent
(including, without limitation, any Cancellation Fees, Yield
Maintenance Amount, Commitment Cancellation Fee and all other
liabilities incurred or owed by the Company pursuant to the Basic
Documents), and all amounts (other than Basic Rent) that the Lessee
agrees to pay under the Lease Agreement (including, without
limitation, indemnification payable under the Lease Agreement,
general and administrative expenses of the Company, and, to the
extent not included in Acquisition Cost, Financing Costs) and
interest at the rate incurred by the Company or any Secured Party
as a result of any delay in payment by the Lessee to meet
obligations that would have been satisfied out of prompt payment by
the Lessee, and the amount of any and all other costs, losses,
damages, interest, taxes, deficiencies, liabilities, obligations,
actions, judgments, suits, claims, fees (including, without
limitation, attorneys' fees and disbursements) and expenses, of
every kind, nature, character and description, direct or indirect,
that may be imposed on or incurred by the Company as a result of,
arising from or relating to, in any manner whatsoever, one or more
Basic Documents, or any other document referred to therein, or the
transactions contemplated thereby or the enforcement thereof;
provided, however that Additional Rent shall not include expenses
incurred, and amounts owed, by the Company solely as a result of
the willful misconduct or gross negligence of the Owner Trustee,
and so long as no Lease Event of Default shall have occurred,
Additional Rent shall not include the principal of any Note due by
reason of acceleration. For purposes of calculating the interest
incurred by the Company or any Secured Party as a result of any
such delay, it shall be assumed that the Company or any Secured
Party, as applicable, incurred interest at the Credit Agreement
Default Rate.
"Affiliate" or any Person means any other Person directly
or indirectly controlling, controlled by or under direct or
indirect common control with such Person. For purposes of this
definition, the term "control," as used with respect to any Person,
shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by
contract or otherwise.
"Aggregate Commitment Amount" means $140,000,000.
"Aggregate Monthly Rent Component" shall mean the sum of
the Monthly Rent Components for all items of Nuclear Material which
are engaged in either reactor at the Generating Facility during the
relevant period.
"Assigned Agreement" means a Nuclear Material Contract
which has been assigned to the Company in the manner specified in
Section 5 of the Lease Agreement pursuant to a duly executed and
delivered Assignment Agreement. The term Assigned Agreement shall
include a Partially Assigned Agreement.
"Assignment Agreement" means an assignment agreement
substantially in the form of Exhibit D to the Lease Agreement.
"Atomic Energy Act" means the Atomic Energy Act of 1954,
as from time to time amended.
"Basic Documents" means the Lease Agreement, the Credit
Agreement, the Note Agreement, the Security Agreement, the Notes,
the Letter Agreement, the Assigned Agreements, the Assignment
Agreements, the Trust Agreement, each Bill of Sale, each Leasing
Record, each SCV Confirmation Schedule, and other agreements
related or incidental thereto which are identified in writing by
the Company, the Lessee and the Secured Parties as one of the
"Basic Documents" in each case, as such documents may be amended
from time to time.
"Basic Rent" means for any Basic Rent Period, the sum of
(a) that portion of the Monthly Financing Charge not allocated to
Acquisition Cost pursuant to the Lease Agreement plus (b) the
Monthly Rent Component a shown on a Basic Rent Schedule for such
Basic Rent Period.
"Basic Rent Payment Date" means, for any Basic Rent
Period, the first Business Day of the calendar month of such Basic
Rent Period.
"Basic Rent Period" means each calendar month or portion
thereof commencing on, in the case of the first such period, the
effective date of the Lease Agreement, and in the case of each
succeeding period, the first day following the immediately
preceding Basic Rent Period, and ending on the earliest of (i) the
last day of any calendar month or (ii) the Termination Settlement
Date.
"Basic Rent Schedule" means an instrument substantially
in the form of Annex I to Exhibit F to the Lease Agreement, which
is to be used by the Lessee to calculate Basic Rent for each Basic
Rent Period.
"Bill of Sale" means the Original Bill of Sale or a bill
of sale substantially in the form of Exhibit E to the Lease
Agreement, pursuant to which title to all or any portion of the
Nuclear Material is transferred to the Company or to the Lessee.
"BTU Charge" means the dollar amount set forth in the BTU
Charge Agreement which is used to calculate the Monthly Rent
Component. The BTU Charge initially set forth for any Nuclear
Material in any Final Leasing Record shall be the amount agreed by
Lessor and Lessee as set forth in Attachment 1 to Exhibit B to the
Lease Agreement based upon the reasonably anticipated operating
life, heat output, salvage value and utilization of such Nuclear
Material.
"BTU Charge Agreement" shall mean the agreement in the
form of Exhibit B to the Lease Agreement.
"Business Day" means any day other than (i) a Saturday or
Sunday, or (ii) a day on which banking institutions in either New
York City or Columbus, Ohio are authorized by law to close.
"Cancellation Fees" shall mean the fees payable to the
Purchasers pursuant to paragraph 2F of the Note Agreement.
"Capitalized Lease" means any and all lease obligations
which are or should be capitalized on the balance sheet of the
Person in question in accordance with generally accepted accounting
principles and Statement No. 13 of the Financial Accounting
Standards Board or any successor to such pronouncement regarding
lease accounting without regard for the accounting treatment
permitted or required under any applicable state or federal public
utility regulatory accounting system unless such treatment controls
the determination of the generally accepted accounting principles
applicable to such Person.
"Closing," with respect to the Note Agreement, shall have
the meaning specified therefor in paragraph 2D of such Note
Agreement, and with respect to the Credit Agreement, means December
27, 1990.
"Code" means the Internal Revenue Code of 1986, as from
time to time amended.
"Collateral" has the meaning set forth in the granting
clauses of the Security Agreement and includes all property of the
Company described in the Security Agreement as comprising part of
the Collateral.
"Collateral Agreements" means, collectively, the Security
Agreement, all Assignment Agreements, and any other assignment,
security agreement or instrument executed and delivered to the
Secured parties thereafter relating to property of the Company
which is security for the Notes.
"Collateral Equivalence Test" shall have the meaning
specified therefor in paragraph 3R of the Credit Agreement and
paragraph 4R of the Note Agreement.
"Commitment Cancellation Fee" means the fee, payable by
the Company under paragraph 2B(5) of the Credit Agreement on the
Termination Settlement Date specified by the Lessee in accordance
with Section 8(c) of the Lease Agreement, equal to the discounted
value of all future payments of Non-Usage Fee which would otherwise
have been payable by the Company under paragraph 2E of the Credit
Agreement for each calendar month from the Termination Settlement
Date to and including the Scheduled Termination Date, which fee
shall be calculated based upon zero utilization of the Floating
Rate Commitment amount during such period and a discount factor
(applied on a monthly basis) equal to the yield for U.S. Treasury
obligations having a final maturity equal to the number of months
between the Termination Settlement Date and the Scheduled
Termination Date, such yield to be linearly interpolated where U.S.
Treasury obligations do not exist for such period.
"Company" means the DCC Fuel Corporation.
"Consents and Agreements" means the agreements, each
substantially in the form attached as Exhibit 2 to Exhibit D to the
Lease Agreement, between the Lessee and the various contractors
under the Nuclear Material Contracts.
"Controlled Group" means a controlled group of
corporations of which Company is a member within the meaning of
Section 414(b) of the Code, any group of corporations or entities
under common control with Company within the meaning of Section
414(c) of the Code or any affiliated service group of which Company
is a member within the meaning of Section 414(m) of the Code.
"Credit Agreement" means the Floating Rate Credit
Agreement, dated as of December 1, 1990, between the Company and
the Lender, as it may be amended from time to time.
"Credit Agreement Default" means an event which would,
with the lapse of time or the giving of notice or both, constitute
a Credit Agreement Event of Default.
"Credit Agreement Default Rate" means the interest rate
per annum in effect from time to time equal to the greater of (i)
2% per annum in excess of the rate then in effect as specified in
paragraph 2C of the Credit Agreement, or (ii) the rate of interest
publicly announced by Morgan Guaranty Trust Company of New York
from time to time in New York City as its "base rate."
"Credit Agreement Event of Default" means any one or more
of the events specified in paragraph 6A of the Credit Agreement.
"Deemed Loss Event" means the following event: if at any
time during the term of the Lease Agreement, (A) either the Company
or any of its respective Affiliates, by reason solely of the
ownership of the Nuclear Material or any part thereof or the lease
of the Nuclear Material to the Lessee under the Lease Agreement or
any other transaction contemplated by the Lease Agreement or any of
the other Basic Documents, shall be deemed, by any governmental
authority having jurisdiction, to be, or to be subject to
regulation as an "electric utility" or a "public utility" or a
"public utility holding company" or similar term, under an
applicable law or deemed a "public utility company" or a
"subsidiary company" or a "holding company" within the meaning of
the Public Utility Holding Company Act, (B) the Public Utility
Holding Company Act shall affect the legality, validity and
enforceability of the lease obligations of the Company and Lessee
under the Lease Agreement; or (C) either the Company or any Secured
Parties by reason solely of being a party to the Basic Documents
shall be required to obtain any consent, order or approval, of or
to make any filing or registration, or to give any notice to, any
governmental authority, or be subject to any liabilities, duties or
obligations under the Public Utility Holding Company Act, except in
any case if the same shall be solely the result of Nonburdensome
Regulation; provided, however, that if in compliance with
applicable laws, Lessee, with the cooperation of the Company, shall
have acted diligently and in good faith to contest or obtain an
exemption from the requirements of applicable laws described in
clauses (A), (B) or (C) that would otherwise constitute a Deemed
Loss Event, such Deemed Loss Event shall be deemed not to have
occurred so long as (I) Lessee shall have furnished to the Company
or such Secured Parties, as the case may be, an opinion of
independent counsel to the effect that there exists a reasonable
basis for such contest or exemption and that a determination under
such applicable laws shall be effectively stayed during the
application for exemption or contest and shall not be subject to
retroactive effect at the conclusion of such contest, (II) the
Company, any such Affiliate or such Secured Parties, as the case
may be, shall have determined in its sole discretion that such
contest or exemption shall not adversely affect their business or
involve any danger of the sale, foreclosure or loss of, or creation
of a Lien upon, the Collateral, and (III) Lessee shall have agreed
to indemnify the Company, its Affiliates or such Secured Parties,
as the case may be, for expenses incurred in connection with such
contest or exemption; and further provided, that a Deemed Loss
Event shall be deemed not to have occurred for such period as may
be approved by any governmental authority having jurisdiction, not
to exceed 270 days, following notice from Lessee to the Company or
such Secured Parties, as the case may be, that Lessee shall be
unable to furnish the opinion described in clause (I) of the next
preceding proviso or that any such contest shall not be successful
or such exemption shall not be available, during which the Company
shall use reasonable efforts to assign or transfer its interest in
the Collateral upon commercially reasonable terms and conditions,
provided that the Company shall not be required to assign or
transfer the Nuclear Material for a price which, after deduction of
sales tax and expenses of such sale incurred by the Company, shall
be less than the sum of (A) Stipulated Casualty Value determined as
of the date of such proposed sale, and (B) the Termination Rent
determined in accordance with Section 18 of the Lease Agreement.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as from time to time amended.
"Excepted Payments" means any indemnity, expense, or
other payment which by the terms of any of the Basic Documents
shall be payable to the Company in order for the Company to satisfy
its obligations pursuant to Section 7.8 of the Trust Agreement.
"Federal Energy Regulatory Commission" means the
independent regulatory commission of the Department of Energy of
the United States Government existing under the authority of the
Department of Energy Organization Act, as amended, or any successor
organization or organizations performing any identical or
substantially identical licensing and related regulatory functions.
"Federal Power Act" means the Federal Power Act, as
amended.
"Final Leasing Record" means a Leasing Record which
records the leasing of Nuclear Material during any period when such
Nuclear Material has completed the first 200 full power hours of
Heat Production. A Final Leasing Record shall be in the form of
Exhibit B to the Lease Agreement.
"Financing Costs" means (a) fees and other amounts owing
to any Secured Party or to the Owner Trustee under the Trust
Agreement, (b) legal fees and disbursements and other amounts
referred to in Section 8 of the Security Agreement, (c) legal,
accounting, and other fees and expenses incurred by the Lessee
and/or the Company in connection with the preparation, execution
and delivery of Basic Documents, or the issuance of the Notes, and
(d) such other reasonable fees and expenses of the Owner Trustee
and the Company as they may be entitled to under the Basic
Documents.
"Fixed Rate Commitment" shall mean the commitment of the
Purchasers to purchase Fixed Rate Notes from time to time in a
principal amount at any one time outstanding not to exceed
$125,000,000.
"Fixed Rate Notes" shall have the meaning specified
therefor in paragraph 2A of the Note Agreement.
"Floating Rate Commitment" shall mean the commitment of
the Lender to make Floating Rate Loans from time to time in a
principal amount at any one time outstanding not to exceed
$140,000,000.
"Floating Rate Loans" shall have the meaning specified
therefor in paragraph 2A of the Credit Agreement.
"Floating Rate Notes" shall have the meaning specified
therefor in paragraph 2A of the Credit Agreement.
"Fuel Management" means the design of, contracting for,
fixing the price and terms of acquisition of, management, movement,
removal, disengagement, storage and other activities in connection
with the acquisition, utilization, storage and disposal of the
Nuclear Material.
"Generating Facility" means each of Unit No. 1 and No. 2
of the Donald C. Cook Nuclear Generating Station, located at
Bridgman, Michigan.
"Heat Production" means the stage of the Nuclear Material
Cycle commencing with the commercial operation of a Generating
Facility, during which the Nuclear Material in question is
producing thermal energy which results in the production of net
positive electrical energy transmitted within the distribution
network of any utility and during which the Nuclear Material in
question is engaged in the reactor core of such Generating
Facility.
"Hereof," "herein," "hereunder" and words of similar
import when used in a Basic Document refer to such Basic Document
as a whole and not to any particular section or provision thereof.
"Impositions" means all payments required by public or
governmental authority in respect of any property subject to the
Lease Agreement or any transaction pursuant to the Lease Agreement
or any right or interest held by virtue of the Lease Agreement.
"Insurance Requirements" means all terms of any insurance
policy or indemnification agreement covering or applicable to (i)
any Nuclear Material or (ii) the Generating Facility or the Lessee
in its capacity as licensee of the Generating Facility, in each
case insofar as any insurance policy or indemnification agreement
directly or indirectly relates to the Nuclear Material or the
performance by the Lessee of its obligations under the Basic
Documents, and all requirements of the issuer of any such policy or
agreement necessary to keep such insurance or agreements in force.
"Interest Rate Acceptance" has the meaning specified
therefor in paragraph 2C of the Note Agreement.
"Interest Rate Notice" has the meaning specified therefor
in paragraph 2B of the Note Agreement.
"Interim Leasing Record" means a Leasing Record which
records the leasing of Nuclear Material (i) during any period prior
to completion of the first 200 full power hours of Heat Production
of such Nuclear Material that such Nuclear Material is leased, and
(ii) during any period commencing with the "cooling off" and
reprocessing of Nuclear Material and prior to the date of
completion of the first 200 full power hours of Heat Production of
such reprocessed Nuclear Material. An Interim Leasing Record shall
be in the form of Exhibit A to the Lease Agreement.
"Investment Company Act" means the Investment Company Act
of 1940, as from time to time amended.
"Issuance Notice" has the meaning specified therefor in
paragraph 2B of the Note Agreement.
"Lease Agreement" means the Nuclear Material Lease
Agreement, dated as of December 1, 1990, between the DCC Fuel
Corporation, as Lessor and the Indiana Michigan Power Company, as
Lessee, as the same may be modified, supplemented or amended from
time to time.
"Lease Event of Default" has the meaning specified
therefor in Section 16 of the Lease Agreement.
"Leasing Record" is a form signed by the Lessor and
Lessee to record the leasing under the Lease Agreement of the
Nuclear Material specified in such Leasing Record. A Leasing
Record shall be either an Interim Leasing Record or a Final Leasing
Record.
"Legal Requirements" means all applicable provisions of
the Atomic Energy Act, all applicable orders, rules, regulations
and other requirements of the Nuclear Regulatory Commission and the
Federal Energy Regulatory Commission, and all other laws, rules,
regulations and orders of any other jurisdiction or regulatory
authority relating to (i) the licensing, acquisition, storage,
containerization, transportation, blending, transfer, consumption,
leasing, insuring, using, operating, disposing, fabricating and
reprocessing of the Nuclear Material, (ii) the Generating Facility
or the Lessee in its capacity as licensee of the Generating
Facility, in each case insofar as such provisions, orders, rules,
regulations, laws and other requirements directly or indirectly
relate to the Nuclear Material or the performance by the Lessee of
its obligations under the Basic Documents, or (iii) the Basic
Documents, insofar as any of the foregoing directly or indirectly
apply to the Lessee.
"Lender" means PruLease, Inc., and its successors or
assigns.
"Lessee" has the meaning specified therefor in the
introduction to the Lease Agreement.
"Lessee Representative" means a person at the time
designated to act on behalf of Lessee by a written instrument
furnished to the Company and the Secured Parties containing the
specimen signature of such person and signed on behalf of Lessee by
any of its officers. The certificate may designate an alternate or
alternates. A Lessee Representative may be an employee of a Lessee
or of the Owner Trustee.
"Lessor" has the meaning specified therefor in the
introduction to the Lease Agreement, and its successors and
assigns.
"Lessor's Bill of Sale" means an instrument substantially
in the form of Exhibit E to the Lease Agreement.
"Letter Agreement" means the Letter Agreement, dated as
of December 1, 1990, between the Lessee, the Company, the
Purchasers and the Lender, as it may be amended from time to time.
"Lien" means any mortgage, pledge, lien, security
interest, title retention, charge or other encumbrance of any
nature whatsoever (including any conditional sale or other title
retention agreement, any lease in the nature thereof and the filing
of or agreement to execute and deliver any financing statement
under the Uniform Commercial Code of any jurisdiction).
"Majority Secured Parties" means at any time the Secured
Parties holding at such time more than 50% of the outstanding
principal amount of all Secured Obligations.
"Manufacturer" means any supplier of Nuclear Material or
of any service (including without limitation, enrichment,
fabrication, transportation, storage and processing) in connection
therewith, or any agent or licensee of any such supplier.
"Manufacturer's Consent" means any consent which may be
given by a Manufacturer under a Nuclear Material Contract to the
assignment by the Lessee to the Company of all or a portion of the
Lessee's rights under such Nuclear Material Contract.
"Monthly Debt Service" for any month means the sum of the
Monthly Financing Charge for such month and the principal amount of
the Fixed Rate Notes due and payable on the first Business Day of
such month.
"Monthly Financing Charge" means, for any calendar month
or portion thereof, the sum of:
(a) (i) all interest payable by the Company during such
month with respect to all outstanding Notes, and (ii) the Non-Usage
Fee, if any, payable by the Company pursuant to the Credit
Agreement during such month; and
(b) the amounts paid or due and payable by the Company
with respect to the transactions contemplated by the Basic
Documents during such month for the following other fees, costs,
charges and expenses incurred or owed by the Company under or in
connection with the Lease Agreement or the other Basic Documents:
(i) legal, printing, reproduction, and closing fees, and expenses,
(ii) auditors', accountants' and attorneys' fees and expenses,
(iii) franchise taxes and income taxes, and (iv) any other fees and
expenses incurred by the Company under or in respect of the Basic
Documents.
Any figure used in the computation of any component of the Monthly
Financing Charge shall be stated to ten decimal places.
"Monthly Rent Component" for any Nuclear Material covered
by a Final Leasing Record for each full month during the lease of
such Nuclear Material shall be as follows:
(i) for the first full month the Monthly Rent Component shall
be zero;
(ii) for the second full month the Monthly Rent Component shall
be zero;
(iii) for the third full month the Monthly Rent Component shall
be an amount determined by multiplying (x) the number of British
Thermal Units of heat produced by such Nuclear Material during the
first full month while covered by the Final Leasing Record and also
during the first partial month, if any, such Nuclear Material was
covered by an Interim or Final Leasing Record and was engaged in
Heat Production by (y) the BTU Charge set forth in the Final
Leasing Record covering such Nuclear Material;
(iv) for each full month after the third full month, the
Monthly Rent Component shall be an amount determined by multiplying
(x) the number of British Thermal Units of heat produced by such
Nuclear Material during the second preceding month by (y) the BTU
Charge set forth in the Final Leasing Record covering such Nuclear
Material. The BTU Charge for any Nuclear Material may be revised
by Lessee at any time during the lease thereof to reflect any
reasonably anticipated change in its operating life, heat output,
salvage value or utilization. Such revision shall be affected by
Lessee executing and forwarding to the Lessor a revised Final
Leasing Record dated the first day of the following month and
setting forth such revised BTU Charge. Upon receipt of such
revised Final Leasing Record, Lessor shall execute and return a
copy thereof to the Lessee. Such revised BTU Charge shall be
applicable to such Nuclear Material for each month thereafter
beginning on the date of the revised Final Leasing Record.
"Nonburdensome Regulation" means (i) ministerial
regulatory requirements that do not impose limitations or
regulatory requirements on the business or activities of or
adversely affect the Company (or an Affiliate thereof) and that are
deemed, in the reasonable discretion of the Company, not to be
burdensome, or (ii) assuming redelivery of the Nuclear Material in
accordance with the Lease Agreement, regulation resulting from any
possession of the Nuclear Material (or right thereto) on or after
the termination of the Lease Agreement.
"Non-Usage Fee" means the fee payable pursuant to
paragraph 2E of the Credit Agreement.
"Note Agreement" means the Note Purchase Agreement, dated
as of December 1, 1990, between the Company and the Purchasers, as
it may be amended from time to time.
"Note Agreement Default" means an event which would, with
the lapse of time or the giving of notice or both, constitute a
Note Agreement Event of Default.
"Note Agreement Event of Default" means any one or more
of the events specified in paragraph 10A of the Note Agreement.
"Notes" means the Fixed Rate Notes and the Floating Rate
Notes.
"Notice of Lease Termination" has the meaning specified
therefor in Section 8(c) of the Lease Agreement.
"Nuclear Incident" shall have the meaning specified
therefor in the Atomic Energy Act, 42 U.S.C. Sec. 2014(q), as such
definition may be amended from time to time.
"Nuclear Material" means those items which have been
purchased by or on behalf of the Company for which a duly executed
Leasing Record has been delivered to the Company and which continue
to be subject to the Lease Agreement consisting of (i) the items
described in such Leasing Record and each of the components thereof
in the respective forms in which such items exist during each stage
of the Nuclear Material Cycle, being substances and equipment
which, when fabricated and assembled and loaded into a nuclear
reactor, are intended to produce heat, together with all
attachments, accessories, parts and additions and all improvements
and repairs thereto, and all replacements thereof and substitutions
therefor, and (ii) the substances and materials underlying the
right, title and interest of the Lessee under any Nuclear Material
Contract assigned to the Company pursuant to the Lease Agreement;
provided, however, that the term Nuclear Material shall not include
spent fuel.
"Nuclear Material Contract" means any contract, as from
time to time amended, modified or supplemented, entered into by the
Lessee with one or more Manufacturers relating to the acquisition
of Nuclear Material or any service in connection with the Nuclear
Material.
"Nuclear Material Cycle" means the various stages in the
process, whether physical or chemical, by which the component parts
of the Nuclear Material are designed, mined, milled, processed,
converted, enriched, fabricated into assemblies utilizable for Heat
Production, loaded or installed into a reactor core, utilized,
disengaged from a reactor core or stored, together with all
incidental processes with respect to the Nuclear Material at any
such stage.
"Nuclear Regulatory Commission" means the independent
regulatory commission of the United States Government existing
under the authority of the Energy Reorganization Act of 1974, as
amended, or any successor organization or organizations performing
any identical or substantially identical licensing and related
regulatory functions.
"Obligations" means (i) all items (including, without
limitation, Capitalized Leases but excluding shareholders' equity
and minority interests) which in accordance with generally accepted
accounting principles, should be reflected on the liability side of
a balance sheet as at the date as of which Obligations ar to be
determined; (ii) all obligations and liabilities (whether or not
reflected upon such balance sheet) secured by any Lien existing on
the Property held subject to such Lien, whether or not the
obligation or liability secured thereby shall have been assumed;
and (iii) all guarantees, endorsements (other than for collection
in the ordinary course of business) and contingent obligations in
respect of any liabilities of the type described in clauses (i) and
(ii) of this definition (whether or not reflected on such balance
sheet); provided, however, that the term "Obligations" shall not
include deferred taxes.
"Obligations for Borrowed Money or Deferred Purchase
Price" means all Obligations in respect of borrowed money or the
deferred purchase price of property or services.
"Officer's Certificate" means, with respect to any
corporation, a certificate signed by the President, any Vice
President, the Treasurer or any Assistant Treasurer of such
corporation, and with respect to any other entity, a certificate
signed by an individual generally authorized to execute and deliver
contracts on behalf of such entity.
"Opinion of Counsel" means a written opinion of counsel
who is acceptable to the Lender, or where it is stated as being an
opinion of counsel of a particular party, who is acceptable to such
party. The counsel may be counsel to the Owner Trustee, the
Company, the Lender or a Lessee.
"Original Bill of Sale" means the Bill of Sale for
nuclear material transferred from the Lessee to the Company.
"Owner Trust Beneficiary" means Indiana Michigan Power
Company.
"Owner Trust Estate" means all estate, right, title and
interest of the Owner Trustee in and to the outstanding stock of
the Company and in and to all monies, securities, investments,
instruments, documents, rights, claims, contracts, and other
property held by the Owner Trustee under the Trust Agreement;
provided, however, that there shall be excluded from the Owner
Trust Estate all Excepted Payments.
"Owner Trustee" means The Huntington Trust Company, N.A.,
acting as trustee under and pursuant to the Trust Agreement, and
its permitted successors.
"Partially Assigned Agreement" means a Nuclear Material
Contract which has been assigned, in part but not in full, to the
Company in the manner specified in Section 5 of the Lease Agreement
pursuant to a duly executed and delivered Assignment Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation,
created by Section 4002(a) of ERISA and any successor thereto.
"Permitted Liens" means (i) any assignment of the Lease
Agreement permitted thereby, by the Note Agreement and by the
Credit Agreement, (ii) liens for Impositions not yet payable, or
payable without the addition of any fine, penalty, interest or cost
for nonpayment, or being contested by the Lessee as permitted by
Section 11 of the Lease Agreement, (iii) liens and security
interests created by the Security Agreement, (iv) the title
transfer and commingling of the Nuclear Material contemplated by
paragraph (h) of Section 10 of the Lease Agreement, and (v) lines
of mechanics, laborers, materialmen, suppliers or vendors, or
rights thereto, incurred in the ordinary course of business for
sums of money which under the terms of the related contracts are
not more than 30 days past due or are being contested in good faith
by the Lessee as permitted by Section 11 of the Lease Agreement;
provided, however, that in each case, such reserve or other
appropriate provision, if any, as shall be required by generally
accepted accounting principles shall have been made in respect
thereto.
"Person" means any individual, partnership, joint
venture, corporation, trust, unincorporated organization or other
business entity or any government or any political subdivision or
agency thereof.
"Plan" means, with respect to any Person, any plan of a
type described in Section 4021(a) of ERISA in respect of which such
Person is an "employer" or a "substantial employer" as defined in
Sections 3(5) and 4001(a)(2) of ERISA, respectively.
"Proceeds" shall have the meaning assigned to it under
the Uniform Commercial Code, as amended, and, in any event, shall
include, but not be limited to, (i) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to the Company
from time to time with respect to the Collateral, (ii) any and all
payments (in any form whatsoever) made or due and payable to the
Company from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental body, authority, bureau
or agency (or any person acting under color of governmental
authority), and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Property" means any interests in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Public Utility Holding Company Act" means the Public
Utility Holding Company Act of 1935, as from time to time amended.
"Purchasers" means the Purchasers listed in Exhibit A to
the Note Agreement, and their respective successors or assigns.
"PSC" means the Public Service Commission of Michigan and
the Indiana Utility Regulatory Commission.
"Qualified Institution" means a commercial bank organized
under the laws of, and doing business in, the United States of
America or in any State thereof, which has combined capital,
surplus and undivided profits of at least $150,000,000 having trust
power.
"Related Person" means, with respect to any Person, any
trade or business, (whether or not incorporated) which, together
with such Person, is under common control as described in Section
414(c) of the Code.
"Rent" means Basic Rent, Additional Rent and Termination
Rent.
"Reportable Event" means any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder.
"Responsible Officer" means a duly elected or appointed,
authorized, and acting officer, agent or representative of the
Person acting.
"Scheduled Termination Date" means January 1, 1994,
provided that on January 1, 1992, and on the first day of each
month thereafter, the Scheduled Termination Date shall be
automatically extended by one month unless notice of termination of
such automatic extension is given by the Lessor to the Lessee and
the Secured Parties, by the Lessee to the Lessor and the Secured
Parties, or by any Purchaser or the Lender to the Lessor and the
Lessee, in which event the Scheduled Termination Date shall be the
Scheduled Termination Date in effect on the date such notice is
given.
"SCV Confirmation Schedule" means an instrument
substantially in the form of Exhibit F to the Lease Agreement which
is to be completed by the Lessee for the purpose of calculating and
acknowledging the SCV at the end of each Basic Rent Period.
"Secured Obligations" means each and every debt,
liability and obligation, of every type and description which the
Company may now or at any time hereafter owe to any Secured Party
under, pursuant to or in connection with the Note Agreement, the
Credit Agreement, any Floating Rate Note, any Fixed Rate Note or
any other Basic Document, whether such debt, liability or
obligation now exists or is hereafter created or incurred, and
whether it is or may be direct or indirect, due or to become due,
absolute or contingent, primary or secondary, liquidated or
unliquidated, or joint, several or joint and several, including,
without limitation, the principal of, interest on and any Yield-
Maintenance Amount or premium due with respect to any Floating Rate
Loan or Fixed Rate Note, any Non-Usage Fees, and Cancellation Fees,
Commitment Cancellation Fees and all indemnifications, costs,
expenses, fees and other compensation of the Secured Parties
provided for, and all other amounts owed to the Secured Parties,
under the Security Agreement, Credit Agreement, Note Agreement and
the other Basic Documents.
"Secured Parties" means the Lender, the Purchasers and
any other holder form time to time of any Note.
"Securities Act" means the Securities Act of 1933, as
from time to time amended.
"Security Agreement" means the Security Agreement, dated
as of December 1, 1990, between the Company and the Secured
Parties.
"Single Employer Plan" means any Plan which is not a
multi-employer plan as defined in Section 4001(a)(3) of ERISA.
"Stipulated Casualty Value" or "SCV" for any Nuclear
Material covered by any Leasing Record means an amount equal to the
Acquisition Cost for such Nuclear Material reduced by the aggregate
total amount, if any, of the Monthly Rent Components paid by Lessee
to the Lessor with respect to such Nuclear Material.
"Termination Date" means the earlier of (i) Scheduled
Termination Date, (ii) the Termination Settlement Date; or (iii)
any day on which the Fixed Rate Notes or Floating Rate Notes are
declared immediately due and payable pursuant to paragraph 7B(1) of
the Note Agreement or paragraph 6B(1) of the Credit Agreement.
"Termination Rent" means an amount which, when added to
the Stipulated Casualty Value and Basic Rent then payable by the
Lessee, if any, will be sufficient to enable the Company to retire,
at their respective maturities, all outstanding Notes and to pay
all charges, premiums and fees (including, without limitation, any
Yield-Maintenance Amount or Commitment Cancellation Fee) owed to
the Purchasers, the Lender and all holders of Notes under the
Credit Agreement and the Note Agreement and to pay all other
obligations of the Company incurred in connection with the
implementation of the transactions contemplated by the Basic
Documents.
"Termination Settlement Date" has the meaning specified
therefor in Section 8(c) or 18(d) of the Lease Agreement, as
applicable; or, in the event of termination of the Lease Agreement
pursuant to Section 8(b) thereof, the Scheduled Termination Date.
"Terminating Event has the meaning specified therefor in
Section 18 of the Lease Agreement.
"Trust" means the DCC Fuel Trust, a trust formed pursuant
to the Trust Agreement.
"Trust Agreement" means the Trust Agreement dated as of
December 1, 1990 among Indiana Michigan Power Company, as Trustor,
the Owner Trustee, as trustee, and the Lessee, as beneficiary, as
the same may be amended, modified or supplemented from time to
time.
"Trustor" means the institution designated as such in the
Trust Agreement and its permitted successors.
"UCC" means the Uniform Commercial Code as adopted and in
effect in the State of Ohio.
"Yield-Maintenance Amount" shall have the meaning
specified therefor in paragraph 9A of the Note Agreement.