Exhibit (10)-1
Commonwealth Edison Company
Form 10-K File No. 1-1839
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NUCLEAR FUEL LEASE AGREEMENT
BETWEEN
COMMED FUEL COMPANY, INC.
AND
COMMONWEALTH EDISON COMPANY
DATED AS OF NOVEMBER 23, 1993
THIS NUCLEAR FUEL LEASE AGREEMENT HAS BEEN MANUALLY EXECUTED IN MULTIPLE
COUNTERPARTS, NUMBERED CONSECUTIVELY FROM 1 UPWARDS. THE RIGHTS OF THE LESSOR
UNDER THIS FUEL LEASE AGREEMENT HAVE BEEN ASSIGNED TO, AND ARE SUBJECT TO A
SECURITY INTEREST IN FAVOR OF, MORGAN GUARANTY TRUST COMPANY OF NEW YORK, AS
INDENTURE TRUSTEE, FOR THE RATABLE BENEFIT OF THE SECURED PARTIES NAMED IN THE
TRUST INDENTURE DATED AS OF NOVEMBER 23, 1993, BETWEEN THE LESSOR AND MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, AS INDENTURE TRUSTEE THEREUNDER. TO THE
EXTENT, IF ANY, THAT SUCH FUEL LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS
SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY
APPLICABLE JURISDICTION), NO SECURITY INTEREST MAY BE CREATED IN, OR ASSIGNMENT
EFFECTED OF, SUCH FUEL LEASE AGREEMENT THROUGH THE TRANSFER OR POSSESSION OF ANY
COUNTERPART OF SUCH FUEL LEASE AGREEMENT OTHER THAN THE ORIGINAL EXECUTED
COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING COUNTERPART
NO. 1 ON THE COVER, WHICH COUNTERPART NO. 1 CONTAINS A RECEIPT EXECUTED BY THE
INDENTURE TRUSTEE ON THE SIGNATURE PAGE THEREOF.
Counterpart No.____
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TABLE OF CONTENTS
SECTION PAGE
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1. Defined Terms............................................ 1
2. Representations and Warranties of Lessee................. 2
3. Lease of Nuclear Fuel; Term.............................. 5
4. Title to Remain in the Lessor; Fuel Management;
Nuclear Fuel to be Personal Property and Used for
Generation; Location..................................... 5
5. Basic Rent and Additional Rent; Procedure for Payment.... 6
6. Payment of Costs by the Lessor........................... 9
7. Taxes.................................................... 11
8. Condition and Use of Nuclear Fuel; Quiet Enjoyment....... 11
9. Maintenance of the Nuclear Fuel.......................... 13
10. Removals, Purchase of Nuclear Fuel, Transfer to the
Lessee, Commingling, Substitution........................ 13
11. Indemnification by the Lessee............................ 17
12. Right to Inspect Nuclear Fuel............................ 19
13. Payment of Impositions; Further Assurances............... 19
14. Compliance with Legal and Insurance Requirements
and with Instruments..................................... 20
15. Liens.................................................... 20
16. Permitted Contests....................................... 21
17. Insurance................................................ 22
18. Damage................................................... 24
19. Condemnation or Eminent Domain........................... 26
20. Termination After Certain Events......................... 28
21. Conditions of Termination and Conveyance................. 34
22. Estoppel Certificates; Information....................... 35
23. Rights to Perform the Lessee's Covenants................. 35
24. Assignments.............................................. 36
25. Lease Events of Default and Remedies..................... 36
26. Surrender; Acceptance of Surrender....................... 42
27. No Merger................................................ 43
28. Notices.................................................. 43
29. Allocation of Amounts.................................... 44
30. Amendments............................................... 44
31. Severability............................................. 44
32. Taxes; Tax Benefits...................................... 45
33. Sale of Nuclear Fuel and Assignment of Rights under
Nuclear Fuel Contracts................................... 45
34. Miscellaneous............................................ 47
NUCLEAR FUEL LEASE AGREEMENT
THIS NUCLEAR FUEL LEASE AGREEMENT dated as of November 23, 1993 (as
the same may be amended, modified or supplemented from time to time, this "FUEL
LEASE"), between CommEd Fuel Company, Inc., a Delaware corporation ("LESSOR" or
the "COMPANY"), and Commonwealth Edison Company, an Illinois corporation
("LESSEE").
W I T N E S S E T H:
WHEREAS, Lessee is party to a Nuclear Fuel Lease Agreement dated as of
December 1, 1985, with CWE Fuel Company Inc. and a Nuclear Fuel Lease Agreement
dated as of March 22, 1984, with Commonwealth Fuel Company II (together with CWE
Fuel Company Inc., referred to herein as the "EXISTING FUEL COMPANIES", and
individually as an "EXISTING FUEL COMPANY"), in each case relating to the lease
by the respective lessor to Lessee of certain nuclear materials to be used in
the production of heat for the generation of electricity (collectively, the
"EXISTING LEASES"); and
WHEREAS, Lessee believes it is desirable to combine the Existing
Leases into a single lease, to have the Lessor acquire the nuclear fuel
currently leased by Lessee from the Existing Fuel Companies under the Existing
Leases and to provide for the lease by Lessor to Lessee of the nuclear fuel so
acquired as well as certain other nuclear fuel materials to be used from time to
time in the production of heat for the generation of electricity; and
WHEREAS, Lessor proposes to so acquire such nuclear fuel and to enter
into the Original Credit Agreement, the Original Note Purchase Agreements
relating to the issuance and sale of IT Notes, and the Trust Indenture (as such
terms are hereinafter defined);
NOW, THEREFORE, Lessor and Lessee hereby agree as follows:
SECTION 1. Defined Terms.
Except as otherwise specifically defined herein, the capitalized terms
used in this Fuel Lease which are defined in Appendix A to this Fuel Lease shall
have the respective meanings assigned in Appendix A.
SECTION 2. Representations and Warranties of Lessee.
The Lessee represents and warrants to the Lessor:
(a) Corporate Matters. The Lessee is a corporation duly organized,
validly existing and in good standing under the laws of the State of Illinois,
with full power and authority to own and operate its properties and conduct its
business as presently being conducted; and the Lessee is duly qualified to do
business as a foreign corporation in good standing in each jurisdiction in which
its ownership or leasing of properties or the conduct of its business requires
such qualification. The execution, delivery and performance by the Lessee of
this Fuel Lease, the other Basic Documents to which it is a party and the
certificates, instruments and documents executed, or to be executed, on behalf
of the Lessee in connection with the transactions contemplated hereby and
thereby, and the performance by the Lessee of its obligations hereunder and
thereunder, are within the Lessee's corporate powers and have been duly
authorized on behalf of the Lessee by all necessary corporate action. The
execution, delivery and performance by each Existing Fuel Company of its
Original Bill of Sale and the certificates, instruments and documents executed,
or to be executed, on behalf of such Existing Fuel Company in connection with
the transactions contemplated thereby, and the performance by such Existing Fuel
Company of its obligations thereunder, are within such Existing Fuel Company's
corporate powers and have been duly authorized on behalf of such Existing Fuel
Company by all necessary corporate action.
(b) Validity, Enforceability. The Basic Documents to which Lessee is
a party, the Original Bills of Sale executed by the Existing Fuel Companies and
the certificates, instruments and documents executed, or to be executed, on
behalf of the Lessee or an Existing Fuel Company in connection with the
transactions contemplated by such Basic Documents or the Original Bills of Sale
constitute, or when executed and delivered will constitute, legal, valid and
binding obligations of the Lessee or such Existing Fuel Company (as the case may
be), enforceable against the Lessee or such Existing Fuel Company (as the case
may be) in accordance with their respective terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium, and other
similar laws of general applicability relating to or affecting the
enforceability of creditors' rights generally or by general principles of equity
and except as enforceability may be limited by the Atomic Energy Act and the
regulations thereunder.
(c) Financial Statements. The Lessee has furnished or will furnish as
soon as practicable to the Lessor copies of each of its Annual Reports on Form
10-K, each of its Quarterly Reports on Form 10-Q, and each of any other reports
and documents filed by the Lessee with the Securities and Exchange Commission
(other than registration statements on Forms S-3 and S-8 and registration
statements on Form S-4 relating to registered exchange offers by the Lessee for
its privately placed securities), all as so filed at
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any time on or after the date of the filing of its Quarterly Report on Form 10-Q
for the quarter ended June 30, 1993. The financial statements contained in such
documents fairly represent, and the financial statements to be delivered
hereafter by the Lessee to the Lessor, any Assignee or any Secured Party will
fairly represent, the financial position, results of operations, and changes in
financial position of the Lessee as of the dates and for the periods indicated
therein and have been prepared, and will have been prepared, in accordance with
generally accepted accounting principles applied on a consistent basis (except
as otherwise indicated therein).
(d) Changes, etc. Since June 30, 1993, there has been no change in
the condition or business of the Lessee which in any way materially adversely
affects the ability of the Lessee to perform its obligations under the Basic
Documents to which it is a party except for the settlements described in
Lessee's Current Report on Form 8-K dated September 24, 1993 (which settlements
became final in November 1993).
(e) Litigation, etc. There is no action, suit, proceeding or
investigation at law or in equity or by or before any governmental
instrumentality or other agency now pending or, to the knowledge of the Lessee,
threatened against or affecting the Lessee or any property or rights of the
Lessee which questions the validity of the Basic Documents to which it is a
party or which Lessee reasonably believes would materially adversely affect the
ability of the Lessee to perform its obligations thereunder.
(f) Compliance with Other Instruments, etc. The execution, delivery
and performance of the Basic Documents to which the Lessee is a party and the
certificates, instruments and documents executed, or to be executed, on behalf
of the Lessee in connection with the transactions contemplated thereby will not
result in any violation of any term of the restated articles of incorporation or
the by-laws of the Lessee or of any agreement, indenture or similar instrument,
license, judgment, decree, order, law, statute, ordinance or governmental rule
or regulation applicable to the Lessee or its property.
(g) Consent, etc. There are no consents, licenses, orders,
authorizations or approvals of, or registrations with, any governmental or
public body or authority which presently are required in connection with the
valid execution, delivery and performance of the Basic Documents to which the
Lessee is a party, the valid execution, delivery and performance of the Original
Bills of Sale by the Existing Fuel Companies, and the certificates, instruments
and documents executed, or to be executed, on behalf of the Lessee or either of
the Existing Fuel Companies in connection with the transactions contemplated
thereby, that have not been obtained and any such consents, licenses, orders,
authorizations, approvals and registrations that have been obtained are in full
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force and effect. There are no material consents, licenses, permits,
certificates, orders, authorizations or approvals of, or registrations with, any
Person which presently are required in connection with the ownership by the
Lessee of its property and assets and for the conduct of its business as now
conducted, that have not been obtained or for which applications for renewal
have not been timely filed and are pending, and consents, licenses, permits,
certificates, orders, authorizations, approvals and registrations that have been
obtained are in full force and effect.
(h) Defaults. The Lessee is not in default under (i) any contract to
which it is a party with any manufacturer relating to the acquisition,
processing, enrichment or fabrication of nuclear fuel materials, and, to the
best of Lessee's knowledge, none of the other parties to such contracts are in
material default of their obligations to Lessee thereunder, or (ii) any
agreement, indenture or mortgage for borrowed money in excess of $20,000,000.
(i) ERISA. The provisions of each defined benefit plan, as defined in
Section 3(35) of ERISA, maintained by the Lessee or by any consolidated
subsidiary of the Lessee are in compliance in all material respects with
applicable requirements of ERISA and of the Code, and with all applicable
rulings and regulations issued under the provisions of ERISA and the Code
setting forth those requirements.
(j) Title to Fuel; Liens. (1) Each Nuclear Fuel Contract assigned
under this Fuel Lease on the date hereof is in full force and effect, and Lessee
has delivered to Lessor a true and complete copy of such Nuclear Fuel Contract
as presently in effect; (2) prior to its sale to Lessor, Lessee or an Existing
Fuel Company, as the case may be, had good title to all of the Nuclear Fuel
transferred by it, free and clear of all Liens (except for Liens permitted by
Section 15(i), (ii), (iv) or (vi) of this Fuel Lease), and Lessee and the
Existing Fuel Companies have not previously sold, assigned, transferred or
created any Lien in, the Nuclear Fuel, any Nuclear Fuel Contract or any part
thereof (except for Liens of or granted by the Existing Fuel Companies which are
to be released contemporaneously with the purchase of such Nuclear Fuel from the
Existing Fuel Companies); (3) Lessee shall warrant and defend forever Lessor's
title to the Nuclear Fuel so transferred by Lessee or an Existing Fuel Company;
(4) neither Lessee nor either Existing Fuel Company, as applicable, has waived
performance by any other Person obligated under any assigned Nuclear Fuel
Contract of any material obligation of such Person thereunder; (5) neither
Lessee nor any other Person is in default in the payment, performance or
observance of any material term, covenant or agreement on its part to be
performed or observed under any assigned Nuclear Fuel Contract; and (6) no
financing statement (other than any which may have been filed on behalf of any
Assignee of Lessor) covering all or any part of the Nuclear Fuel or any Nuclear
Fuel Contract is on file in any public office (except for
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financing statements of the Existing Fuel Companies, which are to be released
contemporaneously with the purchase of Nuclear Fuel from such Existing Fuel
Companies).
SECTION 3. Lease of Nuclear Fuel; Term.
(a) The Lessor hereby leases to the Lessee, and the Lessee hereby
leases from the Lessor, the Nuclear Fuel for the term provided in this Fuel
Lease and subject to the terms and provisions hereof.
(b) The term of this Fuel Lease shall begin at 12:01 A.M., Chicago
time, on November 23, 1993, and, except as otherwise provided herein, shall
terminate on September 30, 2013.
SECTION 4. Title to Remain in the Lessor; Fuel Management; Nuclear
Fuel to be Personal Property and Used for Generation; Location.
(a) Title to and ownership of the Nuclear Fuel shall at all times
remain in the Lessor and at no time become vested in the Lessee except in
accordance with an express provision of this Fuel Lease. This agreement is a
lease only, and shall not give or grant to the Lessee any right, title or
interest in or to the Nuclear Fuel, or any portion thereof, except the rights of
a tenant in accordance with the provisions hereof.
(b) Except as otherwise expressly limited by the provisions of this
Fuel Lease, 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 the Manufacturers and any regulatory agency
having jurisdiction over the ownership, possession or utilization of the Nuclear
Fuel.
(c) The Nuclear Fuel is personal property and the Lessee shall, at its
expense, take all such action as may be required to cause the Nuclear Fuel to
retain its character as personal property. The Nuclear Fuel shall not become
part of any real property on which it or any portion thereof may from time to
time be situated, notwithstanding the means by which it is installed or attached
thereto and notwithstanding any law or custom or the provisions of any lease,
mortgage or other instrument applicable to any such real property. The Lessee
agrees to indemnify the Lessor and each Assignee and each Secured Party against,
and to hold the Lessor and each Assignee and each Secured Party harmless from,
all losses, costs and expenses resulting from any of the Nuclear Fuel becoming
real property.
(d) The Lessee represents and warrants to the Lessor that the Nuclear
Fuel location will be limited to: (i) the Manufacturers' facilities, (ii) a
Generating Facility, (iii) a
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Storage Facility, (iv) a Reprocessing facility, or (v) transit between any of
such facilities, except as Lessee is otherwise instructed by Lessor pursuant to
Section 25(b)(ii) hereof and except as provided in Section 10(a) hereof.
SECTION 5. Basic Rent and Additional Rent; Procedure for Payment.
(a) The Lessee irrevocably and unconditionally covenants to pay to the
Lessor, or to such other person as the Lessor may direct, on each Basic Rent
Payment Date, at not later than 10:00 A.M., Chicago time, the respective amounts
of Basic Rent (net of any prepayments) shown on Annex I to the Rent Schedule
delivered to the Lessor in accordance with clause (i) of Section 5(b) hereof in
respect of such Basic Rent Payment Date. The Lessee may prepay Basic Rent at
any time by delivering such amount and a Rent Schedule appropriately completed.
The Lessee agrees to prepay Basic Rent if and to the extent required to enable
Lessor to pay interest or other amounts due under a Credit Agreement, the Note
Purchase Agreements, the IT Notes or any other Basic Documents.
(b) On or before each Basic Rent Payment Date, the Lessee shall:
(i) deliver to the Lessor a Rent Schedule and Annex
I duly completed with respect to the Basic Rent Period
ending on or immediately prior to such Basic Rent
Payment Date; and
(ii) pay to the Lessor, or to such other Person as
the Lessor may direct, the amount shown for Basic Rent
(net of any prepayments) in such Annex I.
Each such Rent Schedule shall be signed and delivered in triplicate.
(c) All sums payable by the Lessee to the Lessor shall be payable in
funds which are immediately available at the place of payment on the date when
due, and shall be paid to the Lessor at the Lessor's address for purposes of
notices hereunder or to such other person or at such other address as the Lessor
may from time to time designate.
(d) In addition to the Basic Rent, the Lessee will also pay, on
demand, from time to time, as additional rent (herein called "ADDITIONAL RENT")
to the Lessor or such other persons as the Lessor may direct from time to time,
(i) all Lessor's legal, accounting, administrative and other management and
operating expenses and taxes to the extent not paid as part of the Basic Rent,
(ii) all expenses and payments under Sections 4(c), 5(g) and 11 hereof, (iii)
interest at the rate incurred by the Lessor, 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,
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and (iv) any other amounts necessary to enable the Lessor to meet its
obligations under the Basic Documents. In the event of any failure by the
Lessee to pay Additional Rent, the Lessor shall have all the rights, powers and
remedies as in the case of failure to pay Basic Rent.
(e) The Lessee shall have reasonable access to the books and
accounting records, if any, relating to this Fuel Lease maintained by the Lessor
for purposes of auditing the computation of any and all payments made or accrued
under this Fuel Lease, and Lessor shall, upon reasonable notice and at Lessee's
expense, make such books and accounting records available on Lessor's premises
for such purpose or such other purposes as the Lessee deems appropriate.
(f) The Lessor shall have reasonable access to the books and
accounting records of the Lessee relating to the Nuclear Fuel and Nuclear Fuel
Contracts for purposes of auditing the computation of any and all payments made
or accrued under this Fuel Lease.
(g) If any lien, encumbrance or charge of any kind or any judgment,
decree or order of any court or other governmental authority (including, without
limitation, any tax lien affecting the Lessor), whether or not valid, shall be
asserted or entered which interferes with the due and timely payment of any sum
payable hereunder or the due and timely receipt and application thereof by
Lessor or any Secured Party of any sum payable by Lessor under or pursuant to a
Credit Agreement, any Additional Financing, the Note Purchase Agreements or the
IT Notes, Lessee shall, on receipt of notice to that effect from Lessor,
promptly take such legally permissible action as may be necessary to prevent or
terminate such interference. Lessee shall indemnify and hold harmless Lessor
and each Secured Party from and against any and all losses and damages caused by
any such interference.
(h) The obligation of Lessee to make all payments pursuant to this
Fuel Lease (including, without limitation, the payments to be made pursuant to
Section 20(b) hereof) shall be absolute and unconditional and shall not be
affected by any circumstances of any character. The obligation of Lessee to
make all payments due hereunder and to take any and all Nuclear Fuel during the
term of this Fuel Lease is without any warranty or representation as to any
matter whatsoever on the part of the Lessor or any Assignee or any Secured Party
and, as between Lessee and Lessor, any Assignee or any Secured Party, Lessee
assumes all risks and waives any and all defenses to such obligation to pay,
including, without limitation, any defense relating to: (a) the safety, title,
condition, intensity, quality, quantity, temperature, fitness for use,
merchantability or any other quality or characteristic of the Nuclear Fuel, or
whether or not any heat whatsoever is produced by the Nuclear Fuel or is taken
or utilized by Lessee, (b) any setoff, counterclaim, recoupment, defense or
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other right which Lessee may have against the Lessor, any holder of outstanding
Commercial Paper from time to time, any holder of outstanding IT Notes from time
to time, any Assignee, any Secured Party or anyone else for any reason
whatsoever, (c) any defect in title or ownership of the Nuclear Fuel or in the
condition, design, operation, merchantability or fitness for a particular
purpose of the Nuclear Fuel or any Generating Facility or any part of either
thereof, (d) any loss, theft or destruction of, or damage to, the Nuclear Fuel,
in whole or in part, or cessation of the use or possession of the Nuclear Fuel
by Lessee for any reason whatsoever and of whatever duration, or any
condemnation, confiscation, requisition, seizure, purchase, taking or forfeiture
of the Nuclear Fuel, in whole or in part, unless upon any of the foregoing
occurrences this Fuel Lease shall have terminated and the Nuclear Fuel shall
have been purchased by Lessee pursuant to Section 20(b) hereof, (e) any
inability or illegality with respect to the use or possession of the Nuclear
Fuel by Lessee or the ownership thereof by the Lessor, (f) any failure to
obtain, or expiration, suspension or other termination of, or interruption to,
any required governmental licenses, permits, consents, authorizations or
approvals, (g) the invalidity or unenforceability of this Fuel Lease or any
other Basic Document or any other infirmity therein or any lack of power or
authority of the Lessor or Lessee to enter into this Fuel Lease or any other
Basic Document, (h) any insolvency, bankruptcy, reorganization or similar
proceeding by or against Lessee, (i) whether, at any time in question, any
contractor shall have performed any of its duties and obligations under any
Nuclear Fuel Contract or any other agreement relating thereto, (j) any act,
failure to act, omission or breach on the part of Lessor, any Bank, any IT
Noteholder, or the Indenture Trustee under the Credit Agreement, the Note
Purchase Agreements, the Indenture or any Basic Document or other documents or
otherwise including, without limitation, the failure of any Bank, any IT
Noteholder, the Indenture Trustee or the Lessor to take any action or exercise
any right hereunder or under the Credit Agreement, the Note Purchase Agreements,
the Indenture, any Basic Document or any other document referred to herein or
therein or contemplated hereby or thereby, (k) any claim resulting from any
other dealing between Lessor, any Bank, any IT Noteholder or the Indenture
Trustee, and Lessee (it being understood that the foregoing shall not be deemed
a waiver of any rights which Lessee may have against any such party as a result
of any such act, failure to act, omission or breach), (l) any renewal,
extension, modification, acceleration, compromise, amendment, supplement,
termination, sale, exchange, waiver, surrender, release, indulgence or other
act, or failure to act, or omission by any party in respect of the Credit
Agreement, the Note Purchase Agreements, any Basic Document, any of the IT
Notes, any Nuclear Fuel Contract or any security document or other document
referred to in or contemplated by any thereof, or with respect to any
indebtedness or obligation of Lessor, whether or not Lessee shall have assented
thereto or have had any notice or knowledge of any of the foregoing, (m) the
legality, validity, irregularity or
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enforceability of any Basic Document, the Credit Agreement, the Note Purchase
Agreements, any of the IT Notes, any Nuclear Fuel Contract or any other
agreement of Lessee, Lessor or any Bank, IT Noteholder or the Indenture Trustee
relating to the Nuclear Fuel or any Generating Facility or the financing,
construction, ownership, purchase or sale thereof, or (n) any other
circumstances or happening whatsoever, whether or not similar to any of the
foregoing which might otherwise serve as a defense or relieve Lessee of any of
its obligations and liabilities hereunder, any present or future law to the
contrary notwithstanding, it being the intent of the parties hereto that all
amounts payable by Lessee hereunder shall continue to be payable in all events,
in the manner and in the time herein provided and that the obligation to make
such payments shall not be discharged except by payment in full as herein
provided. Lessee hereby waives 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, revoke, cancel, quit, rescind or surrender this Fuel Lease or to any
abatement, suspension, deferment, diminution or redemption of any amounts
payable by Lessee hereunder except in accordance with the express terms hereof.
If for any reason whatsoever this Fuel Lease shall be terminated in whole or in
part by operation of law or otherwise, except as is specifically provided
herein, Lessee nonetheless agrees to pay to the Lessor an amount equal to each
payment set forth in Section 5 and Section 20(b) hereof at the time such payment
would have become due and payable in accordance with the terms hereof had this
Fuel Lease not been terminated in whole or in part. All payments made by Lessee
pursuant to this Fuel Lease shall be final and Lessee will not seek or have any
right to recover all or any part of such payment from the Lessor, any holder of
Commercial Paper, any holder of IT Notes, any Assignee, any Secured Party or any
other party to any of the Basic Documents or any of the other agreements
referred to herein, except in the case of overpayment by mistake.
SECTION 6. Payment of Costs by the Lessor.
So long as no Lease Event of Default has occurred and is then
continuing and no Termination Event has occurred, whenever the Lessee desires
the Lessor to acquire title to property which, upon such acquisition, shall
become a part of the Nuclear Fuel and to pay any Acquisition Costs relating
thereto, or the Lessee desires that payment to a Manufacturer or payment to the
Lessee be made of any Acquisition Costs or Capitalized Costs or both of any
portion of the Nuclear Fuel, including Nuclear Fuel acquired after the date of
this Fuel Lease either as additional Nuclear Fuel or as replacement Nuclear
Fuel, the Lessee may deliver to the Lessor a Fuel Schedule in substantially the
form of Schedule D hereto, dated as of the date of delivery and fully executed
by the Lessee, which shall (i) describe in Annex II thereto, in the same manner
as in Schedule A hereto, such portion of the Nuclear Fuel, (ii) set forth in
Annex I thereto, in the manner specified in Section 29 hereof,
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the Acquisition Costs and Capitalized Costs payable to such Manufacturer or
incurred by the Lessee or the Lessor as of the date of such Fuel Schedule with
respect to such portion of the Nuclear Fuel, and (iii) set forth in item 2
thereof that portion of such Acquisition Costs and Capitalized Costs which have
not previously been the basis of payment to such Manufacturer or payment to the
Lessee pursuant to this Section 6, and with respect to which the Lessee desires
payment. Each delivery of a Fuel Schedule by the Lessee shall constitute a
representation by the Lessee to the effect that since the date of its last Fuel
Schedule there has been no material change in the condition or business of the
Lessee which in any way materially adversely affects the ability of the Lessee
to perform its obligations under the Basic Documents to which it is a party,
except as may be set forth in Forms 10-K, 10-Q or 8-K or in Registration
Statements filed by the Lessee with the Securities and Exchange Commission since
such date, copies of which shall be attached to such Fuel Schedule.
At such time as a Nuclear Fuel Contract provides for transfer of title
to any portion of the Nuclear Fuel for which a Fuel Schedule has been or is
being submitted to the Lessor by the Lessee, the Lessee shall cause the relevant
Manufacturer to deliver to the Lessor a duly executed Bill of Sale (or shall
itself deliver a Bill of Sale to the Lessor if title is being transferred by
Lessee to Lessor) substantially in the form of Schedule C hereto describing any
portion of the Nuclear Fuel unless the Nuclear Fuel Contract provides for the
transfer of title to the Lessor without execution and delivery by the relevant
Manufacturer of a bill of sale; and at such time as a Fuel Schedule is
delivered, the Lessee shall deliver to the Lessor a duly executed Bill of Sale
substantially in the form of Schedule C hereto describing any portion of the
Nuclear Fuel to which the Lessee has title; and the Lessor shall accept such
Bill or Bills of Sale. Not later than ten days after the Lessor shall have
received a Fuel Schedule hereunder, the Lessor shall pay to the Lessee the
amount of the requested payment in immediately available funds if so requested
and shall complete such Fuel Schedule so delivered by setting forth in Annex I
thereto the Investment in such portion of the Nuclear Fuel as of the date of
such payment, and shall execute such Fuel Schedule and deliver copies thereof to
the Lessee, provided, however, that the Lessor shall not be required to make any
payment pursuant to this Section 6 (i) if and to the extent that, at the time of
such payment by the Lessor, such payment exceeds the sum of (a) the amount of
credit then capable of being drawn by the Lessor under a Credit Agreement, all
Additional Financings and IT Notes in effect at the time of such proposed
payment plus (b) the amounts available to the Lessor for disbursement from the
Collateral Account or (ii) if such proposed payment relates to a Nuclear Fuel
Contract between the Lessee and a Manufacturer which has not theretofore been
duly assigned (in form and substance satisfactory to the Lessor) by the Lessee
to the Lessor as an Assigned Agreement or a Partially Assigned Agreement and as
to which assignment Lessor
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has not received evidence to establish that such Manufacturer has theretofore
consented to the extent reasonably practicable (in form and substance
satisfactory to the Lessor).
SECTION 7. Taxes.
The Lessee agrees that it will promptly pay or contest in good faith
all taxes, assessments and other governmental charges and fees levied or
assessed upon the interest of the Lessor in the Nuclear Fuel or any part thereof
during the term of this Fuel Lease and against the Lessor on account of the
transactions, including investments, contemplated by the Basic Documents and the
documents contemplated therein including, without limitation, any Federal, state
or local income or excess profits taxes or franchise taxes against the Lessor on
or measured by any moneys payable under the Basic Documents or the net income
therefrom or by the value of any Nuclear Fuel; provided that this Section 7
shall not be deemed to obligate the Lessee to pay any excise and use taxes, and
other governmental charges which may have been included in the Capitalized Cost
of any Nuclear Fuel. The Lessee further agrees at its expense, to do to the
extent permitted by law or applicable regulatory agencies, all things required
to be done by the Lessor in connection with the levy, assessment, billing or
payment of any such taxes and is hereby authorized by the Lessor to act for and
on behalf of the Lessor in any and all such respects, and to file, on behalf of
the Lessor, all required tax returns and reports concerning the Nuclear Fuel.
SECTION 8. Condition and Use of Nuclear Fuel; Quiet Enjoyment.
(a) Each assembly of the Nuclear Fuel is leased subject to the rights
of any parties in possession thereof and the state of the title thereto and the
rights of ownership therein whenever the same first becomes subject to this Fuel
Lease, and subject to the right of any secured party under any security
agreement, and to all applicable zoning regulations, restrictions, rules,
licenses and ordinances, building restrictions and other laws and regulations
now in effect or hereafter adopted by any governmental authority having
jurisdiction, and is leased in the state and condition thereof when the same
first becomes subject to this Fuel Lease, without representations or warranties
of any kind by the Lessor, any Assignee or Secured Party, or any person acting
on behalf of any of them. THE LESSEE ACKNOWLEDGES AND AGREES THAT THE TYPE AND
DESIGN OF THE NUCLEAR FUEL HAVE NOT BEEN SELECTED BY THE LESSOR, ANY ASSIGNEE OR
SECURED PARTY, THAT NEITHER THE LESSOR, NOR ANY ASSIGNEE NOR ANY SECURED PARTY
HAS SUPPLIED ANY SPECIFICATIONS WITH RESPECT TO THE MANUFACTURE OF ANY PORTION
THEREOF AND THAT NEITHER THE LESSOR, NOR ANY ASSIGNEE, NOR ANY SECURED PARTY NOR
ANY PERSON (EXCEPT THE LESSEE) ACTING ON BEHALF THEREOF (i) IS A MANUFACTURER
OF, OR DEALER IN, NUCLEAR MATERIAL OF ANY KIND OR HAS ANY LICENSE TO USE OR
POSSESS SUCH MATERIAL, (ii) HAS MADE ANY RECOMMENDATION,
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GIVEN ANY ADVICE OR TAKEN ANY OTHER ACTION WITH RESPECT TO (x) THE CHOICE OF ANY
MANUFACTURER, SUPPLIER, VENDOR, PROCESSOR, DESIGNER, FABRICATOR OR TRANSPORTER
OF, OR ANY OTHER CONTRACTOR WITH RESPECT TO, THE NUCLEAR FUEL OR ANY PORTION
THEREOF, OR (y) ANY ACTION TAKEN OR TO BE TAKEN WITH RESPECT TO THE NUCLEAR FUEL
OR ANY PORTION THEREOF AT ANY STAGE OF THE NUCLEAR FUEL CYCLE, (iii) HAS AT ANY
TIME HAD PHYSICAL POSSESSION OF ANY PORTION OF THE NUCLEAR FUEL OR MADE ANY
INSPECTION THEREOF OR (iv) HAS MADE ANY WARRANTY OR OTHER REPRESENTATION,
EXPRESS OR IMPLIED, THAT THE NUCLEAR FUEL (x) WILL NOT RESULT IN INJURY OR
DAMAGE TO PERSONS OR PROPERTY, (y) HAS BEEN PROPERLY DESIGNED OR FABRICATED OR
WILL ACCOMPLISH THE RESULTS WHICH THE LESSEE INTENDS THEREFOR, OR (z) IS SAFE IN
ANY MANNER OR RESPECT. NO WARRANTY HAS BEEN OR IS MADE BY THE LESSOR, ANY
ASSIGNEE, ANY SECURED PARTY OR ANY PERSON ACTING ON BEHALF THEREOF, EXPRESS OR
IMPLIED, RELATING TO THE NUCLEAR FUEL OR ANY PORTION THEREOF, WITH RESPECT TO
MERCHANTABILITY, FITNESS OR OTHERWISE, WHETHER ARISING PURSUANT TO THE UNIFORM
COMMERCIAL CODE OR ANY OTHER PRESENT OR FUTURE LAW, OR OTHERWISE.
(b) The Lessor hereby assigns to Lessee any and all rights Lessor may
have under any Manufacturer's warranties or undertakings, express or implied,
and 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 Fuel
and, in the absence of a Lease Event of Default hereunder, to retain the
proceeds of any such suits, actions and proceedings.
(c) The Lessee has investigated the state of the title to and rights
of ownership in the Nuclear Fuel subject to this Fuel Lease at the commencement
of the term hereof and has made a physical inspection of the Nuclear Fuel
subject to this Fuel Lease at the commencement of the term hereof or reasonably
prior thereto and is satisfied with and has approved the same for all purposes
hereof. The Lessee will from time to time after such commencement make a
similar investigation of title and rights of ownership of each portion of the
Nuclear Fuel as the same becomes subject to this Fuel Lease and will not permit
any such portion to become subject to this Fuel Lease unless the Lessee is
similarly satisfied with and has similarly approved the same for all purposes
hereof. The Lessee warrants that all Nuclear Fuel will be, at the time it
becomes subject to this Fuel Lease, free of liens, encumbrances and rights of
other persons, except as permitted by this Fuel Lease, and except as provided in
Section 8(b) hereof, the Lessee will not, without the prior written consent of
the Lessor, take any action which would affect or impair the Lessor's rights in
respect of Manufacturers' or other warranties or undertakings. No approval by
the Lessee pursuant to this Section 8(c) shall affect or impair any of the
Lessee's rights under Section 8(b) hereof or otherwise in respect of any
Manufacturers' or other warranties or undertakings.
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(d) So long as no Lease Event of Default shall have occurred and be
continuing, the Lessee shall have exclusive possession and use of the Nuclear
Fuel. The Lessee may use the Nuclear Fuel for the generation of electricity and
purposes incidental, supplemental or ancillary thereto, including storage or
holding of the Nuclear Fuel for ultimate usage thereof. The Lessee will not do
or permit any act or thing to be done (i) which might impair the value or
usefulness of the Nuclear Fuel or any part thereof (other than (w) any
impairment of Nuclear Fuel loaned pursuant to Section 10(e) hereof, (x) in the
normal usage thereof in the production of electric energy, (y) as may be
incidental to the Nuclear Fuel Cycle, or (z) as such value may be reduced by a
tax benefit transfer permitted by Section 32(b) hereof), (ii) which is contrary
to any Legal Requirement or Insurance Requirement, or (iii) which might impair
the security interest of any Assignee in the Nuclear Fuel or in Lessor's
interest in this Fuel Lease.
SECTION 9. Maintenance of the Nuclear Fuel.
The Lessee will (i) at its own expense (without limiting the Lessee's
right, if any, to request payment by the Lessor of such expense provided in
Section 6 hereof; provided that, if the Lessee has received payment by the
Lessor of such expense, any insurance proceeds received by the Lessee to
reimburse it for such expense will be paid by the Lessee to the Lessor) keep the
Nuclear Fuel in good condition and will promptly make or cause to be made all
necessary or appropriate repairs, replacements and renewals or Restoration
thereof, and (ii) at its own expense (without limiting the Lessee's right, if
any, to request payment by the Lessor of such expense provided in Section 6
hereof) arrange for proper Fuel Management. The Lessee shall use its best
efforts to see that all repairs, replacements and renewals or Restoration shall
be done in a workmanlike manner. The Lessee will be responsible for all actions
and expense necessary or appropriate for the proper acquisition, transportation,
utilization, preservation, storage, disposal and safety of the Nuclear Fuel.
Neither the Lessor nor any Assignee nor any Secured Party shall be required to
perform any construction, or to alter, repair, rebuild or replace the Nuclear
Fuel or any portion thereof, or to maintain, service or manage the Nuclear Fuel
or any portion thereof in any way or to engage in Fuel Management, and the
Lessee hereby expressly waives the right, if any, to perform any construction,
or to make such alterations or repairs or to effect any such Fuel Management at
the expense of the Lessor, any Assignee or any Secured Party which may be
provided for in any law now in effect or hereafter enacted.
SECTION 10. Removals, Purchase of Nuclear Fuel, Transfer
to the Lessee, Commingling, Substitution.
(a) If no Lease Event of Default under this Fuel Lease shall have
occurred and be continuing, the Lessee shall have the right at any time and from
time to time during the continuance of
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this Fuel Lease, at the Lessee's expense (without limiting the Lessee's right,
if any, to request payment by the Lessor of such expenses provided in Section 6
hereof) to move any assembly of the Nuclear Fuel to any location in accordance
with Section 4(d) hereof for the purpose of storage or having services performed
thereon in connection with any stage of the Nuclear Fuel Cycle other than the
Heat Production stage, provided that no such action shall materially reduce the
heat production capacity, Net Investment Value, or fair market value of such
assembly, provided, further, that Lessee shall give notice to the Indenture
Trustee and the Lessor if any such move requires the movement of such Nuclear
Fuel outside the State of Illinois, and provided, further, that unless such
assembly shall have been released from this Fuel Lease pursuant to Section 10(b)
hereof, (i) such assembly shall be and remain the property of the Lessor,
subject to this Fuel Lease and the Trust Indenture (except as permitted by
Section 10(c) hereof) and (ii) as a condition of such removal and relocation,
all necessary governmental approvals and licenses with respect thereto shall
have been procured and shall be in full force and effect, all necessary
recordings and filings shall have been duly made in the public offices in which
such recordings and filings must be made in order to publish notice or otherwise
protect the validity and effectiveness of this Fuel Lease and the valid first
security interest created therein or in the Nuclear Fuel by the Trust Indenture
with respect to such Nuclear Fuel (except as permitted by Section 10(c) hereof)
and with respect to this Fuel Lease and payments hereunder and with respect to
any Nuclear Fuel Contract, and all fees, taxes and charges payable in connection
with such recordings and filing shall have been paid in full by the Lessee and
the Lessee shall have complied in full with all applicable Legal Requirements
and Insurance Requirements. Any such removal shall constitute the agreement of
the Lessee that the Lessee will continue to be obligated in respect of such
assembly as provided in this Fuel Lease notwithstanding such removal, that the
Lessee will pay or cause to be paid (without limiting the Lessee's right, if
any, to request payment by the Lessor of such expense provided in Section 6
hereof) all taxes and expenses incurred or to be incurred by the Lessor, the
Lessee, any Assignee and any Secured Party by reason of such removal and
relocation, and that the indemnities by the Lessee contained in Section 11
hereof shall extend to the use, possession, conduct or management, or any work,
improvement, demolition or thing done in or about or in respect of such assembly
so removed to the same extent as if its place or relocation were a Generating
Facility. The provisions of this Section 10(a) shall be applicable to each
subsequent removal of any assembly of the Nuclear Fuel so removed from the place
of relocation to which it was removed after its initial removal from the
Generating Facility.
(b) So long as there is no Termination Event, at any time and from
time to time, the Lessee shall have the right to purchase all or any portion of
the Nuclear Fuel. Partial interests in the separate assemblies of the Nuclear
Fuel may be purchased by
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the Lessee. In the event that (i) Heat Production with respect to any Nuclear
Fuel, once commenced, for any reason (including but not limited to the
occurrence of any event described in Section 18(a) and 18(b) hereof) ceases for
a period of twenty-four consecutive months (subject, in the case of any event
described in Section 18(a) hereof, to Unavoidable Delays, but in no event later
than thirty months) or (ii) any Nuclear Fuel which was intended to have been
engaged in Heat Production at a Generating Facility or Facilities at which an
accident or incident referred to in Section 18(b) hereof has occurred cannot be
reassigned to another Generating Facility as contemplated by Section 18(b), the
Lessee shall, in the case of any Nuclear Fuel described in clause (i) hereof,
purchase such Nuclear Fuel within sixty days after the expiration of such
twenty-four month period notwithstanding any Unavoidable Delays (except as
provided in Section 18(a) hereof) and shall, in the case of any Nuclear Fuel
described in clause (ii) hereof, purchase such Nuclear Fuel as contemplated by
Section 18(b) hereof. In the event that Heat Production with respect to any
Nuclear Fuel has been completed, then Lessee shall purchase pursuant to this
Section 10(b) such Nuclear Fuel unless Reprocessing is available and Lessee
elects to have such Nuclear Fuel reprocessed and remain subject to this Fuel
Lease as provided in Section 10(c) hereof. In the event that any Nuclear Fuel
is found to be stolen or lost or any event shall occur which results in any
Nuclear Fuel (i) not being provided by a Manufacturer pursuant to the applicable
Nuclear Fuel Contract (ii) not being returned to the Company from a Manufacturer
pursuant to the applicable Nuclear Fuel Contract or (iii) being returned in a
form which results in a reduction in the Net Investment Value of said Nuclear
Fuel, then Lessee shall purchase such Nuclear Fuel or, in the case of clause
(iii) above, an amount of such Nuclear Fuel equal to such reduction in Net
Investment Value. In the event Lessee permanently shuts down any Generating
Facility for economic or other reasons, Lessee shall, with respect to Nuclear
Fuel allocated for use at or by such Generating Facility, either purchase or
reassign or relocate to another Generating Facility such Nuclear Fuel within six
months from the date of such shutdown. Whenever the Lessee desires or is
required to purchase any portion of the Nuclear Fuel, regardless of the then
present stage of its Nuclear Fuel Cycle, then the Lessee shall deliver to the
Lessor a certificate in the form of Schedule B hereto showing the Net Investment
Value of such portion of the Nuclear Fuel at the date of such certificate and
shall pay to the Lessor, in the manner provided by Section 5(c) hereof, an
amount equal to such Net Investment Value and at such time shall pay all
Additional Rent then due and payable to the Lessor. Thereupon, the Lessor shall
deliver to the Lessee or any other Person designated by the Lessee a Bill of
Sale in the form of Schedule E hereto transferring to the Lessee or such other
Person for no additional consideration all right, title, interest and claim of
the Lessor to such portion of the Nuclear Fuel. Thereupon such portion of the
Nuclear Fuel shall cease to be Nuclear Fuel and shall cease to be subject to any
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provision of this Fuel Lease. Upon delivery of such Bill of Sale, the Lessor
and the Lessee shall execute a Fuel Schedule eliminating the description of such
portion of the Nuclear Fuel from Schedule A to this Fuel Lease as theretofore
supplemented and amended.
(c) The Lessor and the Lessee recognize that during the processing
and reprocessing of Nuclear Fuel leased hereunder before and after utilization
in a Generating Facility, a Manufacturer performing service on such Nuclear Fuel
may require that title thereto be transferred to such Manufacturer and that such
Nuclear Fuel be commingled with other nuclear fuel, with an obligation on such
Manufacturer, upon completion of the services, to reconvey a specified amount of
nuclear fuel and clear and unencumbered title thereto. Accordingly, the Lessor
and the Lessee agree that (i) Nuclear Fuel, which is subject to a Nuclear Fuel
Contract, leased hereunder may become subject to such a contract notwithstanding
any provision of this Fuel Lease to the contrary, (ii) as between the Lessor and
the Lessee, such Nuclear Fuel shall be deemed to be and remain leased hereunder
while title thereto is in such Manufacturer and (iii) title to the Nuclear Fuel
so delivered by such Manufacturer upon completion of its services automatically
shall vest in the Lessor, and such Nuclear Fuel automatically shall be leased
hereunder and shall be subject to the Trust Indenture and any related security
agreement in substitution for the Nuclear Fuel originally delivered to such
Manufacturer. Upon such delivery to such Manufacturer and redelivery from such
Manufacturer, the Lessee shall deliver to the Lessor an appropriate Fuel
Schedule.
(d) After the utilization of the Nuclear Fuel leased hereunder in a
Generating Facility, the Lessor will, at the Lessee's request, transfer title to
Nuclear Fuel leased hereunder in accordance with Section 21 hereof to a third
party in exchange for the simultaneous transfer to the Lessor of clear and
unencumbered title to replacement Nuclear Fuel having a fair market value not
less than that of the Nuclear Fuel conveyed to such third party, which
replacement Nuclear Fuel shall for purposes of this Fuel Lease be deemed to have
a Net Investment Value not less than that of the transferred Nuclear Fuel,
subject to adjustment as set forth in the last sentence of this Section 10(d).
The Nuclear Fuel received by the Lessor pursuant to any such exchange shall be
automatically substituted for the Nuclear Fuel delivered by the Lessor and
deemed to be subject to this Fuel Lease, the Trust Indenture and any related
security agreement. Subject to the limitation on payment contained in Section 6
hereof, the Lessor shall pay any additional amounts required to effect such
exchange. Such payments shall increase the Acquisition Cost of the substituted
Nuclear Fuel and a new Fuel Schedule reflecting such increased Acquisition Cost
shall be executed and delivered by the Lessor and the Lessee.
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(e) Notwithstanding anything else in this Fuel Lease to the contrary,
Lessee may, upon prior written notice to Lessor, engage in one or more
transactions by which a portion of the Nuclear Fuel is loaned to any one or more
Nuclear Fuel Users ("PERMITTED FUEL LOAN"); provided that the Net Investment
Value of the Nuclear Fuel so loaned, together with the Net Investment Value of
Nuclear Fuel subject to all other Permitted Fuel Loans at that time outstanding,
shall not, in the aggregate, exceed five percent of the Net Investment Value of
all of the Nuclear Fuel as of the date of such transaction or transactions. Any
Nuclear Fuel loaned by means of a Permitted Fuel Loan shall be released from
this Fuel Lease upon the execution and delivery by Lessee to Lessor of three
copies of a Fuel Schedule and Annex III thereto upon which a notation shall
appear indicating that such Nuclear Fuel is to be released from this Fuel Lease.
Thereupon, such portion of the Nuclear Fuel shall cease to be Nuclear Fuel and
shall cease to be subject to any provision of this Fuel Lease or of any Trust
Indenture. At the time of entering into any such Permitted Fuel Loan, Lessee
shall assign to Lessor all rights of Lessee to receive nuclear fuel from such
Nuclear Fuel User in repayment of such Permitted Fuel Loan. Lessee will
nevertheless continue to be obligated in respect of such fuel as provided in
this Fuel Lease, will pay or cause to be paid all taxes and reasonable expenses
incurred by Lessor, Lessee, any Assignee or any Secured Party by reason of such
transaction, and the indemnities contained in this Fuel Lease (including without
limitation in Section 11 hereof) shall continue in full force and effect with
respect to such fuel. Upon the repayment by any Nuclear Fuel User of fuel so
loaned by delivery of the fuel comprising the repayment to Lessee, Lessee shall
execute and deliver to Lessor three copies of a Fuel Schedule and Annex II
thereto upon which a notation shall appear indicating that such fuel is to
become subject to this Fuel Lease. Upon such delivery, the fuel shall become
Nuclear Fuel and shall become subject to all provisions of this Fuel Lease and
of the Trust Indenture. Lessee shall provide Lessor with monthly reports of all
fuel loaned pursuant to a Permitted Fuel Loan.
SECTION 11. Indemnification by the Lessee.
The Lessee shall pay and indemnify and hold harmless the Lessor, each
Assignee, each Secured Party, each Dealer, each Placement Agent and their
respective officers, directors, incorporators, shareholders, partners,
employees, agents and servants from and against all liabilities (other than
liabilities arising out of the gross negligence or willful misconduct of such
Person), Impositions, taxes (excluding, however, taxes measured solely by the
net income of any Person indemnified or intended to be indemnified pursuant to
this Section 11, except as otherwise provided in Section 7 hereof), losses,
obligations, claims, damages, penalties, causes of action, suits, costs and
expenses (including, without limitation, reasonable attorneys' and accountants'
fees and expenses) and judgments of any nature arising
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from or in any way relating to any and all of the following during the term of
this Fuel Lease and thereafter: (a) 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 (as that term is defined in the Atomic Energy Act, 42
U.S.C. (Section)2011 et seq.) involving or connected in any way with the Nuclear
Fuel or any portion thereof, (b) the acquisition, ownership (including strict
liability of an owner or liability without fault), possession, disposition,
sale, use, nonuse, misuse, leasing, fabrication, design, cycling, recycling,
transportation, containerization, cooling, processing, reprocessing, storing,
condition, management, operation, construction, maintenance, repair or
rebuilding of the Nuclear Fuel or any portion thereof or resulting from the
condition of adjoining and underlying land, buildings, streets or ways, (c) any
use, nonuse or condition of, or any other matter of circumstance relating to, a
Generating Facility, any Storage Facility, any other property associated
therewith or any adjoining and underlying land, buildings, streets and ways, (d)
any violation or default, or alleged violation or default, of this Fuel Lease by
or on behalf of Lessee, or of any contracts or agreements to which the Lessee is
a party or by which it is bound, or any Legal Requirements, (e) performance of
any labor or services or the furnishing of any materials or other property in
respect of the Nuclear Fuel or any portion thereof, (f) any infringement or
alleged infringement of any patent, copyright, trade secret or other similar
right relating to the Nuclear Fuel or any portion thereof, (g) Lessor's
agreements or obligations contained in this Fuel Lease or its assignment of the
Fuel Lease to the Indenture Trustee as security for its borrowings, (h) any
claim arising out of loss or damage to the environment or (i) any claim arising
out of strict or absolute liability in tort. Lessee also indemnifies each
indemnitee, as aforesaid, from and against all other liabilities, taxes, losses,
obligations, claims, damages, penalties, causes of action, suits costs and
expenses (including, without limitation, reasonable attorneys' and accountants'
fees and expenses) and judgments of any nature which may be imposed on, incurred
by, or asserted at any time against any indemnitee in any way relating to or
arising out of the performance of this Fuel Lease or any other Basic Document to
which Lessee is a party, provided, except for claims of a nature contemplated by
clause (i) above, that the Lessee shall not be required to indemnify any
indemnitee with respect to any liability relating to or arising out of
indemnitee's gross negligence or willful misconduct and provided, further, that
the foregoing immunity shall not limit the terms of any indemnity that the
Lessee may grant separately to any indemnitee pursuant to any separate
agreement. In the event that any action, suit or proceeding is brought against
the Lessor or any other Person indemnified or intended to be indemnified
pursuant to this Section 11 by reason of any such occurrence, the Lessor or such
other Person or Persons shall promptly notify in writing the Lessee and
thereupon the Lessee shall, at the Lessee's expense, resist and defend such
action, suit or proceeding or cause the same
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to be resisted and defended by counsel designated by the Lessee and reasonably
acceptable to the Person or Persons indemnified or intended to be indemnified
under this Section 11 provided there is no conflict of interest with the Person
or Persons indemnified or intended to be indemnified under this Section 11. In
the event a conflict of interest contemplated by the proviso of the immediately
preceding sentence shall exist, then the Person or Persons as to which such
conflict exists may be defended by counsel of its or their choice at Lessee's
expense, provided Lessee's obligation for such expense shall be limited to one
firm for all such Persons as to which such a conflict exists. The obligations of
the Lessee under this Section 11 shall survive any termination of this Fuel
Lease, the Indenture, any Note Purchase Agreement or any Credit Agreement, in
whole or in part, and any payment, in whole or in part, of the Secured
Obligations.
SECTION 12. Right to Inspect Nuclear Fuel.
The Lessor, any Assignee and their authorized representatives may (i)
enter any of the Generating Facilities or Storage Facilities owned by the Lessee
at reasonable times, subject to applicable security regulations governing access
thereto, for the purposes of inspecting the Nuclear Fuel and the reactors in
which it may be loaded from time to time (subject to their availability for
inspection and any legal or regulatory restrictions with respect thereto) and
(ii) discuss their condition and performance with the responsible officers and
employees of the Lessee. The Lessee agrees subject to applicable state and
Federal laws and regulations to make the Nuclear Fuel and the reactors in which
it may be loaded from time to time available (to the extent practicable) for
such inspection and to provide customary protective procedures and devices in
connection therewith, and to make such officers and employees available for such
discussion promptly after receiving notice thereof. The Lessor shall not have
any duty to make any such inspection or conduct any such discussion and shall
not incur any liability or obligation for not making any such inspection or for
not conducting any such discussion.
SECTION 13. Payment of Impositions; Further Assurances.
(a) Subject to the provisions of Section 16 hereof, the Lessee will
pay all Impositions before any fine, penalty, interest or cost may be added for
nonpayment, and will furnish to the Lessor, upon request, copies of official
receipts or other satisfactory proof evidencing such payment.
(b) The Lessee, at its expense, shall execute, acknowledge and
deliver from time to time such further counterparts of this Fuel Lease or such
affidavits, certificates, Bills of Sale, financing and continuation statements,
consents and other instruments as may be reasonably requested by the Lessor in
order
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to evidence the respective interests of the Lessor, the Lessee, any Assignee or
any Secured Party in this Fuel Lease and the Nuclear Fuel or any portion thereof
and in order to establish the character of the Nuclear Fuel as personal property
and the perfected first security interest therein intended to be created by the
Trust Indenture, and shall, at its expense, cause to be made any filing,
recording or registration in such manner and at such time and in such places as
may be required by any present or future law in order to publish notice and
perfect the interests of the Lessor, any Assignee or any Secured Party in the
Nuclear Fuel, this Fuel Lease or any right or payment thereunder. The Lessee,
at its expense, shall take whatever further action, if any, shall be deemed
reasonably necessary by the Lessor to confirm the title of the Lessor to the
Nuclear Fuel.
SECTION 14. Compliance with Legal and Insurance Requirements
and with Instruments.
Subject to the provisions of Section 16 hereof, the Lessee at its
expense, will (i) comply with all Legal Requirements and Insurance Requirements,
whether or not compliance therewith shall require structural or basic mechanical
changes in any or all of the Generating Facilities or the Storage Facilities
owned by the Lessee or changes in the design or fabrication of the Nuclear Fuel
or any portion thereof, and whether or not such compliance will interfere with
the use and enjoyment of any Generating Facility, Storage Facility or Nuclear
Fuel or any portion thereof, (ii) procure, maintain and comply with all permits,
licenses and other authorizations required for the ownership of the Nuclear Fuel
or any portion thereof or any Nuclear Fuel Contract by the Lessor, or for any
operation or use of the Nuclear Fuel or any portion thereof then being made, and
for the proper maintenance thereof, and for the taking of all necessary and
proper steps in the management of the Nuclear Fuel through each stage of the
Nuclear Fuel Cycle, and (iii) comply with any other instruments of record or any
contract or agreement at the time in force affecting title to or ownership of
the Nuclear Fuel or any portion thereof, provided that any changes which are
made to comply with Legal Requirements or Insurance Requirements shall be made
in a manner to minimize any diminution in the value of the Nuclear Fuel, the
Generating Facilities or the Storage Facilities, as the case may be.
SECTION 15. Liens.
The Lessee will not directly or indirectly create or permit to be
created or to remain, and will at its expense promptly discharge, any mortgage,
lien, encumbrance or charge on, security interest in, or conditional sale or
other title retention agreement with respect to, the Nuclear Fuel or any portion
thereof, or any rights under any Nuclear Fuel Contract, or upon the Lessee's
leasehold interest therein or in any sublease thereof, other than (i) liens for
Impositions not yet payable, or payable without the
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addition of any fine, penalty, interest or cost for nonpayment, or being
contested as permitted by Section 16 hereof, (ii) 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 Fuel
Lease, (iii) liens of mechanics, laborers, materialmen, suppliers or vendors, or
rights thereto, incurred in the ordinary course of business for sums for money
which under the terms of the related contracts are not at the time due, provided
that such reserve or other appropriate provisions, if any, as shall be required
by generally accepted accounting principles shall have been made in respect
thereof, (iv) any lien or interest granted by virtue of any transaction or use
of Nuclear Fuel permitted by Sections 10(c) or 10(e) hereof, (v) liens created
or permitted under the Basic Documents or arising from transactions permitted
under this Fuel Lease or resulting from the acts of any Assignee or any Secured
Party and (vi) rights of the United States or any agency of the United States
under any statute or regulation arising from the enrichment of Nuclear Fuel.
SECTION 16. Permitted Contests.
The Lessee at its expense may 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 Requirement, Insurance Requirement or
any other mortgage, lien, encumbrance, charge, security interest, conditional
sale or other contract or agreement referred to in Section 15 hereof; provided
that (i) in the case of an unpaid Imposition or lien therefor, such proceedings
shall suspend the collection thereof from the Lessor, any Assignee or any
Secured Party, (ii) neither the Nuclear Fuel nor any portion thereof or interest
therein nor any rights under any Nuclear Fuel Contract would be subject to being
sold, forfeited, confiscated, condemned or lost, (iii) neither the use of the
Nuclear Fuel 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 Fuel Cycle, nor the performance of any other act required to be
performed by the Lessee under this Fuel Lease would be subject to being
enjoined, prevented or otherwise interfered with, (iv) the Lessor or any
Assignee would not be subject to any additional civil liability (other than
interest which the Lessee agrees to pay), or any criminal liability, for or
caused by failure to pay any such Imposition or to comply with any such Legal
Requirement, Insurance Requirement or any such other mortgage, lien,
encumbrance, charge, contract or agreement, (v) the Lessee shall have set aside
on its books adequate reserves in accordance with generally accepted accounting
principles with respect thereto and shall furnish such security, if any, as may
be required in the proceedings, (vi) the exercise of any rights or remedies of
the Lessor or any Assignee or Secured Party would not be impaired, and (vii) the
insurance
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coverage required by Section 17 hereof shall not be diminished in any respect.
The Lessee will pay, without limiting its right to request payment by the Lessor
of such expenses as provided in Section 6 hereof, and save the Lessor, each
Assignee and each Secured Party harmless against, all losses, judgments, decrees
and costs, including reasonable attorneys' fees and expenses, in connection with
any such contest and will, promptly after the final 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. If any tax
obligation shall be paid under protest and a refund is granted therefor and
delivered to the Lessor, the Lessor shall promptly remit to the Lessee the full
amount of the refund so received.
SECTION 17. Insurance.
(a) The Lessee shall, at its own cost and expense, obtain and, except
as provided in the following sentence, maintain in effect with respect to the
Nuclear Fuel and each Generating Facility and, to the extent available with
respect to facilities at the other locations permitted under Section 4(d) hereof
at which Nuclear Fuel is located, (i) an agreement or indemnification as
required by Section 170 of the Atomic Energy Act or any other law, rule or
regulation and (ii) nuclear liability insurance in such form and such amount as
will meet the financial protection requirements of the Nuclear Regulatory
Commission pursuant to Section 170 of the Atomic Energy Act. If the nuclear
liability protection system provided by Section 170 of the Atomic Energy Act is
repealed or modified or has expired, the Lessee will, without cost to Lessor,
maintain in effect liability protection through government indemnity, limitation
of liability or liability insurance in order to minimize impairment of
protection afforded Lessor, any Assignee and any Secured Party by Section 170 of
the Atomic Energy Act, as in effect on the date hereof, and by the provisions of
this Section, but Lessee will not be required to maintain such protection except
to the extent customarily maintained by nuclear plant owners. Further, Lessee
shall maintain Supplier's and Transporter's Form Nuclear Liability Insurance.
(b) The Lessee shall, at its own cost and expense, procure or cause
to be procured and maintain or cause to be maintained "all risk" property damage
insurance for the property at any Generating Facility (including Nuclear Fuel at
any Generating Facility) insuring the Lessor, Lessee, any Assignee and any
Secured Party against loss or damage to such insured property. Such insurance
shall be from one or more of Nuclear Mutual Limited (NML), American Nuclear
Insurers (ANI) and Mutual Atomic Energy Reinsurance Pool (MAERP), or Nuclear
Electric Insurance Limited (NEIL), whichever is selected by the Lessee from time
to time, and shall be for the benefit of all named insureds, the Lessee, the
Lessor, any Assignee, any Secured Party, any Dealer and any
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Placement Agent. The amounts of such insurance shall be not less than that
required by prudent practice in the utility industry, and in any event not less
than the amount necessary to comply with 110 CFR 50.54(w) (as such regulation
may be amended or replaced by any successor rule or regulations adopted by the
Nuclear Regulatory Commission governing the amount of insurance to be
maintained). Any such insurance may provide for such deductibles as are
available in nuclear property insurance covering property at any Generating
Facility (including Nuclear Fuel at any Generating Facility), may include the
standard coinsurance provisions contained in a nuclear property insurance policy
and may exclude the types of property and certain perils customarily excluded
from the standard nuclear property coverage in accordance with prudent practice
in the electric utility industry. Otherwise, the terms of the coverage shall be
at the discretion of the Lessee.
(c) All insurance described in this Section 17 shall (i) cover the
Lessee, the Lessor, any Assignee, any Secured Party, any Dealer and any
Placement Agent and (ii) indemnify each to the extent of its respective
interest. To the extent possible, the Lessor, any Assignee and any Secured
Party shall each, to the extent their respective interest may appear, be an
insured and, with respect to physical damage coverage, a named loss payee, in
all insurance policies maintained by the Lessee under this Section 17 provided
that, so long as no Lease Default or Lease Event of Default shall have occurred
and be then continuing, the Lessee shall control the adjustment of any losses
with the applicable insurer. If a Lease Default or Lease Event of Default shall
have occurred and be then continuing, such loss shall be adjusted by the Lessee
and an independent loss adjuster to be appointed by either (i) the Lessor or
(ii) any Assignee. Any loss proceeds and the draft payment thereof will be
delivered to the Lessee for transmittal to the Indenture Trustee. To the extent
possible, all such policies and, where obtainable, indemnification agreements,
shall provide for at least thirty (30) days' written notice to the Lessor, any
Assignee and any Secured Party, prior to any cancellation or material alteration
of such policies and agreements.
(d) Upon the request of the Lessor, the Lessee will provide the
Lessor with insurance certificates in respect of the insurance procured pursuant
to the provisions of Section 17(a) and Section 17(b) hereof and will advise the
Lessor of all expirations and renewals of policies, all notices issued by the
insurers thereunder having a materially adverse effect on coverage and all other
changes of the types referred to in Section 20(a)(ii) hereof. On the date
hereof and at yearly intervals thereafter during the term of this Fuel Lease,
the Lessee will furnish to the Lessor a detailed statement as to the insurance
coverage provided pursuant to Section 17(a) and Section 17(b) hereof and will
give prompt notice as to any changes in the nature of such coverage including
any changes which are materially adverse to the Secured Parties of
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which the Lessee has knowledge in the provisions of the Atomic Energy Act or the
regulations of the Nuclear Regulatory Commission with respect to liability
insurance and coverage.
SECTION 18. Damage.
(a) If an accident or incident resulting in any damage to,
destruction of or malfunction of any or all of the Nuclear Fuel should occur,
which damage or destruction is of such a nature as to prevent Heat Production by
any Nuclear Fuel, the Lessee will promptly give notice thereof to the Lessor,
generally describing such accident or incident and such damage, destruction or
malfunction and stating whether Restoration thereof can be completed within
twenty-four months after such incident. If such accident or incident affects
Nuclear Fuel having an aggregate Net Investment Value (as shown on the most
recently delivered Rent Schedule) in excess of eighty-five percent of the
aggregate Net Investment Value of all Nuclear Fuel (as shown on such Rent
Schedule) and such notice by the Lessee states that Restoration thereof cannot
be completed within twenty-four months, the Lessor or any Assignee shall have
the right to terminate this Fuel Lease by giving the notice provided for in
Section 20(a)(vii) hereof. If such accident or incident affects some Nuclear
Fuel but not an amount having an aggregate Net Investment Value (as shown on the
most recently delivered Rent Schedule) in excess of eighty-five percent of the
aggregate Net Investment Value of all Nuclear Fuel (as shown on such Rent
Schedule) and the Lessee's notice with respect thereto states that Restoration
thereof cannot be completed within such twenty-four months, the Lessee, if so
requested by the Lessor or any Assignee, shall, within ninety days after such
accident or incident, purchase and obtain the release pursuant to Section 10(b)
hereof of the Nuclear Fuel affected by such accident or incident. If Lessee
shall state in its notice that Restoration can be completed within twenty-four
months after such accident or incident, it shall, within ninety days after such
accident or incident, commence Restoration and shall complete the same no later
than twenty-four months after such accident or incident (subject to Unavoidable
Delays, but in no event later than thirty months after such accident or
incident), such Restoration to be at the Lessee's own expense and whether or not
the insurance proceeds, if any, on account of such damage or destruction shall
be sufficient for the purpose.
(b) If an accident or incident resulting in any damage to, destruction
of or malfunction of any or all of the Generating Facilities should occur, which
damage, destruction or malfunction is of such a nature as to prevent Heat
Production at such Generating Facility or Facilities, the Lessee will promptly
give notice thereof to the Lessor, generally describing such accident or
incident and such damage, destruction or malfunction and stating whether the
repair or reconstruction thereof can be completed within twenty-four months
after such accident or incident or, if
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such repair or reconstruction cannot be completed within twenty-four months,
whether (i) the Nuclear Fuel which was engaged in Heat Production at the
Generating Facility or Facilities where such accident or incident occurred can
be reassigned within eighteen months after such accident or incident to another
Generating Facility and engaged in Heat Production within twenty-four months
after the date of such accident or incident and whether (ii) the Nuclear Fuel
which was intended to have been engaged in Heat Production at the Generating
Facility or Facilities where such accident or incident occurred can be
reassigned within eighteen months after such accident or incident to another
Generating Facility. If such accident or incident affects ten or more out of
the twelve Generating Facilities and such notice by the Lessee states that none
of such repair or reconstruction or engagement or reassignment can be completed
within the applicable foregoing time periods, the Lessor or any Assignee shall
have the right to terminate this Fuel Lease by giving the notice provided for in
Section 20(a)(vii) hereof. If such accident or incident affects some but not
ten or more out of the twelve nuclear reactors at the Generating Facilities and
the Lessee's notice with respect thereto states that such repair or
reconstruction or engagement or reassignment cannot be completed within the
applicable foregoing time periods, the Lessee, if so requested by the Lessor or
any Assignee, shall, within ninety days after such accident or incident,
purchase and obtain the release pursuant to Section 10(b) hereof of the Nuclear
Fuel previously engaged in Heat Production at, and if no reassignment can be
made the Nuclear Fuel intended to have been engaged in Heat Production at, the
Generating Facility or Facilities where such accident or incident occurred. If
such accident or incident affects some but not ten or more out of the twelve
nuclear reactors at the Generating Facilities and such notice by Lessee states
that some of such repair or reconstruction or engagement or reassignment can be
completed within the foregoing time periods, the Lessee, if so requested by the
Lessor or any Assignee, shall, within ninety days after such accident or
incident, purchase and obtain the release pursuant to Section 10(b) hereof of
the Nuclear Fuel previously engaged in Heat Production at, or which was intended
to have been engaged in Heat Production at, the Generating Facilities, to the
extent that such Nuclear Fuel is not assigned, or cannot be reassigned, to a
Generating Facility where such repair or reconstruction can be completed within
the applicable foregoing time periods (and, in the case of Nuclear Fuel
previously in Heat Production, re-engaged in Heat Production within the
applicable foregoing time periods). If Lessee shall state in its notice that
repair or reconstruction or engagement or reassignment can be completed within
the applicable foregoing time periods after such accident or incident, it shall,
within ninety days after such accident or incident, commence such repair or
reconstruction or engagement or reassignment and shall complete the same no
later than the applicable foregoing time periods after such accident or incident
(subject to Unavoidable Delays, but in no event later than thirty months after
such accident or incident),
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such repair or reconstruction or engagement or reassignment to be at the
Lessee's own expense and whether or not the insurance proceeds, if any, on
account of such damage, destruction or malfunction shall be sufficient for the
purpose. Any such written notice that repair or reconstruction can be so
completed shall be deemed a representation by the Lessee to that effect. If at
any time during said twenty-four month period such representation could not be
reaffirmed (subject to Unavoidable Delays), the Lessee shall promptly so notify
the Lessor and each Assignee and upon such notification the Lessor or any
Assignee may (i) terminate this Fuel Lease in accordance with Section 20(a)(vii)
hereof if the accident or incident and the inability to repair or reconstruct
affects ten or more out of the twelve nuclear reactors at the Generating
Facilities or (ii) upon notice from the Lessor to the Lessee to that effect,
require the Lessee to purchase and obtain the release pursuant to Section 10(b)
hereof of the Nuclear Fuel previously engaged in Heat Production at, or intended
to be engaged in Heat Production within twenty-four months of the accident or
incident at, the Generating Facility or Facilities where such accident or
incident occurred, and not reassigned as contemplated by this section.
(c) All insurance proceeds receivable on account of any damage to or
destruction of Nuclear Fuel shall be paid to the Collateral Account. If,
notwithstanding the foregoing, any insurance proceeds are received by the Lessee
or the Lessor on account of any damage to or destruction of Nuclear Fuel, such
insurance proceeds, shall be paid over to the Collateral Account as soon as is
reasonably practicable. Such proceeds shall be disbursed from the Collateral
Account, in accordance with the provisions, and subject to the restrictions, of
the Trust Indenture, to the Lessee to reimburse it for any repair or restoration
costs it incurs in repairing and/or restoring any such damaged or destroyed
Nuclear fuel, provided that no Termination Event has occurred and no Lease
Default or Lease Event of Default has occurred and is continuing.
SECTION 19. Condemnation or Eminent Domain.
(a) In case of a Taking or the commencement of any proceedings or
negotiations which might result in any Taking, the Lessee will promptly give
notice thereof to the Lessor, generally describing the nature and extent of such
Taking or the nature of such proceedings or negotiations and the nature and
extent of the Taking which might result therefrom, as the case may be. The
Lessee hereby assigns to the Lessor any award or payment on account of any
Taking of the Nuclear Fuel or any portion thereof which is payable to the
Lessee, and any such award or payment shall be paid into the Collateral Account.
The Lessor and any Assignee shall have the right to participate fully in any
proceedings or negotiations in connection with any such Taking of the Nuclear
Fuel or any portion thereof, provided that Lessee shall be entitled to
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control such proceedings or negotiations so long as no Lease Default or Lease
Event of Default shall have occurred and be then continuing. If a Lease Default
or a Lease Event of Default shall have occurred and be then continuing, the
Indenture Trustee shall be entitled to control such proceedings or negotiations.
The Lessee will pay (without limiting its right, if any, to request payment by
the Lessor of such expenses as provided in Section 6 hereof if such expense is
of a capital nature) all costs, fees and expenses incurred by the Lessor or any
Assignee in connection with any Taking of the Nuclear Fuel or any portion
thereof and seeking and obtaining any award or payment on account thereof.
(b) In the case of any Taking, (i) the provisions of this Fuel Lease
shall remain in effect, except as expressly provided below in this Section 19,
without any abatement or reduction of Basic Rent, Additional Rent or any other
sum payable hereunder, (ii) if the Taking is of a Generating Facility, the
Lessee shall either purchase the Nuclear Fuel which is used or intended for use
in the Generating Facility or reassign it to another Generating Facility within
six months from the date of such Taking, and (iii) if the Taking is of Nuclear
Fuel, unless the Lessee shall have exercised within ninety days after the
happening of such Taking its right to purchase and obtain a release of Nuclear
Fuel or portion thereof pursuant to Section 10(b) hereof, the Lessee, whether or
not the awards or payments, if any, on account of such Taking shall be
sufficient for the purpose, at its cost and expense (without limiting the
Lessee's right, if any, to request payment by the Lessor of such expenses
provided in Section 6 hereof if such expenses are of a capital nature) will
promptly commence and complete (subject to Unavoidable Delays) Restoration of
the Nuclear Fuel or the portion, if any, thereof affected by such Taking, unless
the Lessee shall have delivered to the Lessor the certificate described in
Section 20(a)(i) hereof within ninety days after the happening of such Taking.
Upon completion of Restoration, the Lessee shall execute and deliver to the
Lessor a Fuel Schedule, shall cause the relevant Manufacturer of the replacement
Nuclear Fuel to execute and deliver to the Lessor a Bill of a Sale substantially
in the form of Schedule C hereto, unless the Nuclear Fuel Contract provides for
the transfer of title to the Lessor without execution and delivery by the
relevant Manufacturer of a bill of sale, and shall deliver to the Lessor a duly
executed Bill of Sale substantially in the form of Schedule C hereto describing
any portion of the Nuclear Fuel to which the Lessee has or receives title; and
the Lessor shall accept such Bill or Bills of Sale. As to any condemned or
requisitioned (or otherwise taken) Nuclear Fuel originally included on Schedule
A hereto, as amended, and replaced by such Restoration, the Lessor shall deliver
to the Lessee a Fuel Schedule and a Bill of Sale substantially in the form of
Schedule E hereto. If Restoration is not completed within thirty months after
such Taking, the Lessee shall, within 30 days thereafter, purchase and obtain a
release of such Nuclear Fuel pursuant to Section 10(b) hereof (the purchase
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price of any such Nuclear Fuel to be the price specified under said Section
10(b) less any award or payment paid in respect thereof to the Collateral
Account).
(c) All awards and payment received by the Lessor on account of any
Taking of the Nuclear Fuel or any portion thereof (less the actual costs, fees
and expenses incurred in the collection thereof, for which the Person incurring
the same shall be reimbursed from such awards or payments) shall be paid over to
the Collateral Account. Such awards or payment shall be disbursed from the
Collateral Account, in accordance with the provisions, and subject to the
restrictions, of the Trust Indenture, to the Lessee to reimburse it for any
repair or restoration costs it incurs, provided that no Termination Event has
occurred and no Lease Default or Lease Event of Default has occurred and is
continuing.
(d) For purposes of this Fuel Lease, all amounts paid pursuant to any
agreement with any condemning authority which has been made in connection with
any Taking shall be deemed to constitute an award on account of such Taking.
SECTION 20. Termination After Certain Events.
(a) This Fuel Lease shall terminate in the manner and with the effect
hereinafter set forth in Section 20(b) and Section 21(b) upon the happening of
any of the following events (referred to herein as "TERMINATION EVENTS"):
(i) The Lessee shall have given the Lessor five days' notice in the
form of a certificate signed by its President or any Vice President or its
Treasurer, stating that the Lessee desires to terminate this Fuel Lease,
provided at the time of termination, the Lessor has the right and available
funds to pay all Obligations (including any prepayment premium in
connection therewith);
(ii) The Lessor, at the direction of the Indenture Trustee as
directed by the Designated Holders pursuant to the provisions of the Trust
Indenture, shall have given notice to the Lessee stating that it desires
that this Fuel Lease be terminated because of (A) changes made (whether by
legislative act or published administrative or judicial determination) in
the provisions of the Atomic Energy Act or any other applicable law, rule
or regulation with respect to liability insurance, limitation of liability,
or indemnification or the application, interpretation or enforcement
thereof, or (B) any material adverse change in the insurers, coverage, or
the terms or scope of any insurance policy or indemnity agreement required
to be obtained and maintained by the Lessee pursuant to Section 17 hereof;
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(iii) If, as a result of the transactions contemplated by this Fuel
Lease, the Lessor, any Assignee or any Secured Party becomes (or with the
passage of time would become), or is declared by the Securities and
Exchange Commission (or any successor governmental entity having
jurisdiction to make such declaration) to be, an "electric utility
company," a "gas utility company," a "public utility" or similar entity
under the Public Utility Holding Company Act of 1935, as amended, or its
respective officers, directors, shareholders, partners or employees shall
become subject to regulation under such Act, and, in any such event, the
Lessor, at the direction of the Indenture Trustee as directed by the
Designated Holders pursuant to the provisions of the Trust Indenture, shall
have given notice to the Lessee stating that it desires that this Fuel
Lease be terminated;
(iv) If, as a result of the transactions contemplated by this Fuel
Lease, the Lessor, any Assignee or any Secured Party becomes (or with the
passage of time would become), or is declared by the Secretary of Energy or
the Federal Energy Regulatory Commission or a successor entity to be, a
"public utility" or a similar entity under the Federal Power Act, as
amended, or its respective officers, directors, shareholders, partners or
employees shall become subject to regulation under such Act and, in any
such event, the Lessor, at the direction of the Indenture Trustee as
directed by the Designated Holders pursuant to the provisions of the Trust
Indenture, shall have given notice to the Lessee stating that it desires
that this Fuel Lease be terminated;
(v) If, as a result of the transactions contemplated by this Fuel
Lease, the Lessor, any Assignee or any Secured Party becomes (or with the
passage of time would become), or is declared by any relevant regulatory
government body to be, a "public utility" or similar entity under the laws
of any State or its respective officers, directors, shareholders, partners
or employees shall become subject to regulation under any such laws, and,
in any such event, the Lessor, at the direction of the Indenture Trustee as
directed by the Designated Holders pursuant to the provisions of the Trust
Indenture, shall have given notice to the Lessee stating that it desires
that this Fuel Lease be terminated;
(vi) Any law or regulation or interpretation of any law or regulation
shall be adopted and be enforceable by any governmental or regulatory
authority (including, without limitation, the Secretary of Energy, the
Federal Energy Regulatory Commission, the Illinois Commerce Commission, the
Securities and Exchange Commission, the
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Nuclear Regulatory Commission and the New York Stock Exchange), and as a
result of such adoption or enforcement, approval of the transactions
contemplated by this Fuel Lease shall be required and shall not have been
obtained within any grace period after such adoption or enforcement, or as
a result of which adoption or enforcement of this Fuel Lease or any
transaction contemplated hereby, including any payments to be made by the
Lessee or the ownership of the Nuclear Fuel by the Lessor, shall be or
become unlawful or unenforceable or the performance of this Fuel Lease
shall be rendered impracticable in any material way, and, in any such
event, the Lessor, at the direction of the Indenture Trustee as directed by
the Designated Holders pursuant to the provisions of the Trust Indenture,
shall have given notice to the Lessee stating that the Lessor desires that
this Fuel Lease be terminated;
(vii) If an accident or incident described in Section 18 hereof,
which prevents Heat Production, involving Nuclear Fuel having an aggregate
Net Investment Value (as shown on the most recently delivered Rent
Schedule) in excess of eighty-five percent of the aggregate Net Investment
Value of all Nuclear Fuel (as shown on such Rent Schedule) or involving ten
or more out of the twelve Generating Facilities, shall have occurred and
(A) Lessee shall have stated in its notice required under Section 18 with
respect thereto that repair or reconstruction or relocation and engagement
or reassignment or Restoration as provided therein cannot be completed
within twenty-four months after such accident or incident; or (B) such
repair or reconstruction or relocation and engagement or reassignment or
Restoration as provided in Section 18 hereof shall not have been completed
within twenty-four months after such accident or incident (subject to
Unavoidable Delays, but in no event later than thirty months after such
accident or incident) and, in either such event, the Lessor, at the
direction of the Indenture Trustee as directed by the Designated Holders
pursuant to the provisions of the Trust Indenture, shall have given notice
to the Lessee stating that the Lessor desires that this Fuel Lease be
terminated;
(viii) If any governmental licenses, approvals or consents with
respect to any Generating Facility, without which such Generating Facility
cannot continue to operate, shall have been revoked, withdrawn or withheld,
or an order, injunction or other directive shall be issued enjoining the
operation of any Generating Facility or materially impairing the use of
Nuclear Fuel or any Generating Facility as contemplated by this Lease, and
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(A) the Lessee does not, in good faith, within 180 days of such event,
either (i) represent in writing to the Lessor that the Lessee has made a
good faith determination that such Generating Facility will return to
operation within twenty-four months of such revocation, withdrawal,
withholding, order, injunction or directive (subject to Unavoidable Delays)
or (ii) purchase and obtain the release pursuant to Section 10(b) hereof of
all the Nuclear Fuel located in, or intended to be used at, such Generating
Facility other than that portion of such Nuclear Fuel which the Lessee in
good faith represents in writing to the Lessor will be reassigned to
another Generating Facility or Facilities, or (B) after the Lessee has
delivered the representation referred to in clause (A)(i) above, at any
time during such twenty-four month period (subject to Unavoidable Delays)
said representation could not be reaffirmed and Lessee does not, within 90
days of such inability to reaffirm, purchase and obtain the release
pursuant to Section 10(b) hereof of all the Nuclear Fuel then located in,
or intended to be used at, such Generating Facility, or (C) after Lessee
has delivered the representation referred to in clause (A)(i) above, within
such twenty-four month period (subject to Unavoidable Delays), such
Generating Facility is not, in fact, returned to operation and Lessee does
not, on or before the expiration of such period, purchase and obtain the
release pursuant to Section 10(b) hereof of all the Nuclear Fuel then
located in, or intended to be used at, such Generating Facility; and, in
such event, the Lessor, at the direction of the Indenture Trustee as
directed by the Designated Holders pursuant to the provisions of the Trust
Indenture, shall have given notice to the Lessee stating that the Lessor
desires that this Fuel Lease be terminated;
(ix) If a nuclear incident (as that term is defined in the Atomic
Energy Act) involving or connected in any way with any of the Nuclear Fuel
or any of the Generating Facilities shall have occurred, and such nuclear
incident may reasonably be expected to give rise to liability of the Lessee
in an aggregate amount in excess of $20,000,000 above that covered by
insurance, and, in such event, the Lessor, at the direction of the
Indenture Trustee as directed by the Designated Holders pursuant to the
provisions of the Trust Indenture, shall have given notice to the Lessee
stating that the Lessor desires that this Fuel Lease be terminated;
(x) The Lessor, at the direction of the Indenture Trustee as directed
by the Designated Holders pursuant to the provisions of the Trust
Indenture, shall have given
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notice to the Lessee stating that it desires that this Fuel Lease be
terminated because ten or more of the twelve nuclear reactors at the
Generating Facilities have been continuously out of operation for a period
of twenty-four months or more;
(xi) The Lessor, at the direction of the Indenture Trustee as
directed by the Designated Holders pursuant to the provisions of the Trust
Indenture, shall have given notice to the Lessee stating that it desires
that this Fuel Lease be terminated because an event or condition not
mentioned above in this Section 20(a) or in Section 25(a) has occurred,
resulting in the inability of the Lessor to pay any Indebtedness; or
(xii) The Lessor, at the direction of the Indenture Trustee as
directed by the Designated Holders pursuant to the provisions of the Trust
Indenture, shall have given notice to the Lessee stating that it desires
that this Fuel Lease be terminated because any pension plan covered by
Title IV of ERISA maintained by the Lessee or any subsidiary of the Lessee
has been terminated, and the value of plan benefits guaranteeable under
Title IV of ERISA on the date of such termination exceeds the value of plan
assets allocable to such benefits on such date by more than $25,000,000.
(b) Upon the date of occurrence of any of the events listed in Section 20(a)
hereof (the first such date being herein called the "TERMINATION NOTICE DATE"),
this Fuel Lease shall cease and terminate, except with respect to obligations
and liabilities of the Lessee, actual or contingent, which arose under this Fuel
Lease on or prior to the Termination Notice Date and except for the Lessee's
obligations set forth in Section 5, 7, 9, 10(b), 13, 14 and 17 hereof, and in
this Section 20(b), 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 Lessee's obligations under Section 11 hereof shall continue as
set forth therein, and forthwith also upon such termination, title to, and the
entire interest of the Lessor in the Nuclear Fuel shall automatically transfer
to and be vested in the Lessee, without the necessity of any action by either
the Lessor or the Lessee, but subject to any liens and security interests of any
Assignee or Secured Party under the Trust Indenture; provided, however, that
title to, and the entire interest of the Lessor in, the Nuclear Fuel shall,
forthwith upon such termination, automatically transfer to and be vested in any
Person designated by the Lessee, but subject to any liens and security interests
of any Assignee or Secured Party, rather than transferring to and being vested
in the Lessee as aforesaid, if but only if (i) such Person shall, upon such
termination, be lawfully entitled to accept and be vested with title to the
Nuclear Fuel, and (ii) prior to such termination, such
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Person shall have delivered an instrument to the Lessor, in form and substance
satisfactory to it, executed and acknowledged by such Person and by the Lessee,
pursuant to which such Person shall irrevocably (1) undertake to accept title
to, and the entire interest of the Lessor in, that Nuclear Fuel forthwith upon
such termination, (2) agree that the transfer to and the vesting in such Person
of such title and interest shall occur automatically upon such termination
without the necessity of any action by either the Lessor or the Lessee or such
person, and (3) undertake to execute, upon such termination, the instrument
referred to below in this Section 20(b) acknowledging, among other things, that
title to and ownership of the Nuclear Fuel has transferred to and vested in such
Person. As soon as possible after either the Lessor or the Lessee shall learn of
the happening of any of the events listed in Section 20(a) hereof, such party
shall give notice thereof to the other party hereto (and in the case of such
notice to the Lessor, signed also by such other Person in whom title to the
Nuclear Fuel shall have vested as aforesaid), which notice shall (x) acknowledge
that this Fuel Lease has terminated, subject to the continuing obligations of
the Lessee mentioned above and the rights of any secured party under any
security agreement, and that title to and ownership of the Nuclear Fuel has
transferred to and vested in the Lessee or such other Person, as the case may
be, subject as aforesaid, (y) state that on a settlement date determined by the
Lessee occurring not less than 30 or nor more than 270 days after the giving of
such notice, which settlement date shall be specified therein (such date being
herein called the "TERMINATION SETTLEMENT DATE"), the Lessee shall be obligated
as of the Termination Notice Date to pay to the Lessor as the purchase price of
the Nuclear Fuel, which payment obligation shall be unconditional as provided in
Section 5(h) hereof, and without regard to the voidability, validity, legality
or enforceability of the Lessor's obligations under the Basic Documents an
amount equal to the sum of (i) the Net Investment Value of the Nuclear Fuel as
of the Termination Settlement Date plus (ii) the Termination Rent on the
Termination Settlement Date, and (z) state that on the Termination Settlement
Date, the Lessor shall deliver to the Lessee both a confirmatory Bill of Sale
acknowledging the above-described transfer and vesting of title and ownership of
the Nuclear Fuel, and appropriate instruments duly executed by any Assignees or
Secured Parties (but only to the extent such documents are furnished by such
Assignees or Secured Parties), cancelling and discharging any liens and security
interests created thereunder upon the Nuclear Fuel. Should an obligation of the
Lessee which would have been includable in Termination Rent if it had been known
or the amount thereof determinable on the Termination Settlement Date become
known or determined subsequent to the Termination Settlement Date, the Lessee
agrees to pay, which payment obligation shall be unconditional as provided in
Section 5(h) hereof, such amount to the Lessor upon ten Business Days' notice
thereof as an additional item of Termination Rent. The Lessor and the Lessee
shall be unconditionally obligated as of the Termination Notice Date
to make
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the payments and to deliver the documentation referred to therein on such
Termination Settlement Date to the same extent as if each had acknowledged in
writing its obligation to do so, Lessee's obligation to make such payment shall
be unconditional as provided in Section 5(h) hereof, and unaffected by any event
or matter whatsoever including, without limitation, failure of Lessor to deliver
such confirmatory documentation on the Termination Settlement Date or the
quality, condition, existence, utility or title of or to the Nuclear Fuel or any
failure to have obtained or then have in effect authorizations of governmental
authorities on the part of the Lessee and without regard to the voidability,
validity, legality or enforceability of the Lessor's obligations under the Basic
Documents, and the Lessee's obligation to make such payment shall not be
discharged except by payment in full as herein provided. Any such payment made
by the Lessee shall not prejudice, or constitute a waiver of, any right, claim
or cause of action which the Lessee shall have against the Lessor. Such payment
and delivery of documentation shall be made in accordance with Section 21
hereof.
SECTION 21. Conditions of Termination and Conveyance.
(a) Upon the purchase by the Lessee pursuant to this Fuel Lease of
the Lessor's interest in the Nuclear Fuel or any portion thereof or of the
Lessor's interest in any insurance proceeds or condemnation awards (or the right
to receive the same) which the Lessee is entitled to receive in connection with
any such purchase by it or a transfer of title to the Nuclear Fuel to the Lessee
or any other Person designated by the Lessee pursuant to Section 20 hereof, the
Lessor will transfer all of Lessor's right, title and interest therein, and the
Lessee or such Person, as the case may be, shall accept the same subject to all
liens, encumbrances, charges, exceptions and restrictions thereon, and to all
applicable laws, regulations and ordinances and otherwise without representation
and warranty by or recourse to the Lessor.
(b) Upon the Termination Settlement Date specified in the notice
delivered by the Lessor or the Lessee pursuant to Section 20 hereof, the Lessee
shall pay to the Lessor at its address for purposes of notices hereunder or to
such other Person at such other place designated by the Lessor, in federal
funds, the purchase price specified herein for, and the Lessor shall deliver to
the Lessee a confirmatory Bill of Sale acknowledging the transfer and vesting of
ownership of, the Nuclear Fuel and use its best efforts to obtain an appropriate
instrument duly executed by any Assignee or Secured Party, cancelling and
discharging any security agreements entered into by the Lessor and any liens and
security interests created thereby upon the Nuclear Fuel. The Lessee shall pay
all expenses in connection with such transfer, including all escrow fees, search
and recording and filing fees, attorneys' fees and all applicable federal, state
and local sales, use and other taxes which may be incurred or imposed by reason
of
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the transfer then being made by the Lessor, or by reason of the delivery of said
instrument or instruments of transfer, cancellation and discharge.
(c) Notwithstanding any other provisions of this Fuel Lease, whenever
the Lessee has the right or obligation to purchase the Nuclear Fuel or any
portion thereof or any other property pursuant to any provision of this Fuel
Lease (other than Section 20(b)), the Lessee may cause such purchase to be
effected by, and the Lessor shall transfer title and ownership to the subject
matter of such purchase to, any other Person lawfully entitled to receive the
same, as specified by the Lessee in a notice to the Lessor given at least
fifteen days prior to the date of such purchase, provided, however, that nothing
specified in this subsection (c) shall in any way impair or affect the
obligations of the Lessee under this Fuel Lease in connection with such purchase
and provided, further, that, at the time of any such transfer to such other
Person, the Lessee shall deliver to the Lessor the undertaking of the Lessee
indemnifying and holding Lessor harmless from and against any loss or liability
incurred by the Lessor by reason of such transfer.
SECTION 22. Estoppel Certificates; Information.
The Lessee will from time to time deliver to the Lessor, promptly upon
reasonable request, (i) a statement, executed by any Vice-President or the
Treasurer of the Lessee, certifying the dates to which the Basic Rent,
Additional Rent and other sums payable hereunder have been paid, that this Fuel
Lease is unmodified and in full effect (or, if there have been modifications,
that this Fuel Lease is in full effect as modified, and identifying such
modifications) and that no Lease Default or Lease Event of Default has occurred
and is continuing (or, if any Lease Default or Lease Event of Default has
occurred and is continuing, specifying the nature and period of existence
thereof and what action the Lessee is taking or proposes to take with respect
thereto), and (ii) such information with respect to the Nuclear Fuel or any
portion thereof, including the amounts of Net Investment Value of the Nuclear
Fuel or portions thereof in accordance with the Lessee's records, as from time
to time may reasonable be requested, it being intended that any such statement
delivered pursuant to this Section 22 shall be deemed a representation and
warranty by Lessee and may be relied upon by the Lessor and any Assignee.
SECTION 23. Rights to Perform the Lessee's Covenants.
If the Lessee shall fail to make any payment or perform any act
required to be made or performed by it hereunder, the Lessor, without notice to
or demand upon the Lessee and without waiving or releasing any obligation or
default, may (but shall be under no obligation to) at any time thereafter make
such payment or perform such act for the account and at the expense of the
Lessee.
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All payments so made by the Lessor and all costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses) incurred in
connection therewith or in connection with the performance by the Lessor of any
such act shall constitute Additional Rent hereunder and the Lessee agrees to pay
the same as provided in Section 5 hereof.
SECTION 24. Assignments.
(a) The Lessor may, with the written consent of the Lessee, grant a
security interest in or an assignment of all or part of its right, title and
interest in this Fuel Lease to any Assignee or Assignees and grant a security
interest in the Nuclear Fuel pursuant to a Trust Indenture. No Assignee shall
have any liability hereunder or be obligated to perform any duty, covenant or
condition required to be performed by the Lessor under any of the terms hereof,
and the Lessee by its execution hereof acknowledges and agrees that
notwithstanding any such grant or assignment each and all such duties, covenants
or conditions required to be performed by the Lessor shall survive any such
assignment and any such grant of a security interest and shall be and remain the
sole liability of the Lessor. Upon any such assignment by the Lessor, such
Assignee or Assignees shall succeed to all of the rights, privileges and powers
of the Lessor provided in this Fuel Lease as to such right, title or interest so
assigned.
(b) The Lessee hereby consents to the security interest and other
rights and interests granted to the Indenture Trustee in the Trust Indenture,
dated as of the date first above written.
(c) Except as provided in Section 10(e) hereof, Lessee may not
sublease any of the Nuclear Fuel and may not assign any of its rights under this
Fuel Lease without, in either case, the prior written consent of the Lessor and
the Indenture Trustee.
(d) The Lessor hereby agrees that the Lessee may sell or transfer any
tax benefits related to the Nuclear Fuel to a third party; provided, however,
that no such sale or transfer shall limit or affect any of the Lessee's
obligations or the Lessor's rights hereunder (except for the Lessor's rights, if
any, in the tax benefits so transferred). The Lessor agrees to cooperate with
the Lessee, and to execute such documents and instruments as may be reasonably
required, in effectuating any such sale or transfer; provided, however, that the
Lessor shall not be required to take any action or give any consent which could
adversely affect its rights in the event of a Lease Event of Default.
SECTION 25. Lease Events of Default and Remedies.
(a) Any of the following events of default by the Lessee shall
constitute a "LEASE EVENT OF DEFAULT" and give rise to the
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rights on the part of the Lessor described in Section 25(b) hereof:
(i) default in the payment of Basic Rent, Additional Rent, payments
required by Section 10(b) hereof, payments required on the Termination
Settlement Date or the payment of other amounts hereunder when due and
payable, and continuance of such default to pay such other amounts for a
period of ten days; or
(ii) failure to perform or observe any of the obligations or covenants
of the Lessee under Sections 14, 17 and 20(b) hereof, or failure to
purchase and obtain the release of any Nuclear Fuel under Section 10(b)
hereof when required by Sections 10(b), 18(a), 18(b) or 19(b) hereof;
(iii) default in the performance, or the breach, of any covenant,
obligation or warranty of the Lessee in this Fuel Lease (other than a
covenant or warranty a default in whose performance or whose breach is
elsewhere in this Section 25 specifically dealt with) or in any other Basic
Document to which the Lessee is a party, and continuance of such default or
breach for a period of thirty days after there has been given, by
registered or certified mail, to the Lessee by the Lessor, a written notice
specifying such default or breach and requiring it to be remedied; or
(iv) the entry of a decree or order by a court having jurisdiction in
the premises adjudging the Lessee a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment
or composition of or in respect of the Lessee under the United States
Bankruptcy Code or any other applicable federal or state law, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Lessee or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance
of any such decree or order unstayed and in effect for a period of forty-
five consecutive days; or
(v) the institution by the Lessee of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under the
United States Bankruptcy Code or any other applicable federal or state law,
or the consent by it to the filing of any such petition or the appointment
of a receiver, liquidator, assignee, trustee, sequestrator (or
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other similar official) of the Lessee or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the taking of corporate action by
the Lessee in furtherance of any such action; or
(vi) any representation or warranty made by the Lessee in this Fuel
Lease, the Consent and Agreement, any other Basic Document to which the
Lessee is a party or in any related instrument, or in any report,
certificate, financial statement or other instrument furnished in
connection with this Fuel Lease or any other Basic Document to which Lessee
is a party shall prove to be false or misleading in any material respect;
or
(vii) Lessee shall, without the consent of the Designated Holders,
merge with or into, or consolidate with or into, any other corporation or
entity, or sell, transfer or otherwise dispose of all or substantially all
of its assets, unless in each case, after giving effect to such merger,
consolidation, sale, transfer or disposition:
(1) no Credit Agreement Event of Default, Trust Indenture
Event of Default, Lease Event of Default or Termination Event, or
event that with notice or lapse of time or both would constitute a
Credit Agreement Event of Default, Trust Indenture Event of Default,
Lease Event of Default or Termination Event shall have occurred and be
continuing,
(2) such transaction does not materially and adversely
affect the Lessee's (or its successor's) ability to perform its
obligations under the Basic Documents, including this Fuel Lease,
(3) the successor or transferee is a domestic corporation,
substantially all of whose assets are located in the United States and
assumes the obligations of the Lessee under the Basic Documents in a
manner and pursuant to a written instrument satisfactory to the
Designated Holders in their sole discretion, and
(4) the net worth of such successor or transferee, after
giving effect to such transaction, is not less than the net worth of
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the Lessee immediately prior to such transaction;
provided, that the foregoing shall not prohibit the Lessee from forming
and, pursuant to a merger, consolidation or other transaction, becoming a
subsidiary of a holding company in accordance with all applicable laws, so
long as the aggregate amount of all assets (including subsidiary stock)
proposed to be transferred or disposed of by the Lessee in connection with
such transaction or any series of related transactions does not exceed 10%
of the Lessee's consolidated assets immediately prior to such transaction
or series of related transactions;
(viii) Lessee shall fail to pay any of its Indebtedness for Borrowed
Money which is outstanding in a principal amount of at least $20,000,000 in
the aggregate when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such failure shall continue after
the applicable grace period, if any, specified in any agreement or
instrument relating to such indebtedness; or any other default under any
agreement or instrument relating to any such indebtedness, or any other
event or condition shall occur and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the
effect of such default or event is to accelerate or to permit the
acceleration of the maturity of such indebtedness; or any such indebtedness
shall be declared to be due and payable, or required to be prepaid (other
than by a regularly scheduled required prepayment) prior to the stated
maturity thereof;
(ix) occurrence of a Credit Agreement Event of Default or
a Trust Indenture Event of Default; or
(x) the failure of any Bank to honor a draft under its Letter of
Credit or to make any Loan which it is obligated to make under the Credit
Agreement.
(b) Upon the occurrence of any Lease Event of Default, the Lessor may
in its discretion do any one or more of the following:
(i) treat the Lease Event of Default as an event under Section 20(a)
hereof, entitling Lessor to the consequent benefits of Section 20(b) hereof
and in general proceed by appropriate judicial proceedings, either at law
or in equity, to enforce performance or observance by the Lessee of the
applicable provisions of
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this Fuel Lease, or to recover damages for the breach of any thereof; or
(ii) by notice to the Lessee terminate this Fuel Lease, provided,
however, that in the case of a Lease Event of Default under Section 25(iv)
or (v), this Fuel Lease shall automatically terminate without such notice.
Upon such termination of this Fuel Lease, the Lessee's interest and all
right of the Lessee and Persons claiming through or under the Lessee to the
use of the Nuclear Fuel shall forthwith terminate but the Lessee shall
remain liable for its obligations and liabilities, actual or contingent,
with respect to (i) the Lessee's obligations set forth under Section 11
hereof, (ii) obligations or liabilities which arose under this Fuel Lease
on or prior to the date of such termination, (iii) the Lessee's obligations
set forth in this Section 25(b)(ii), and (iv) until the earlier of (a)
Lessor's taking possession of the Nuclear Fuel or Lessee's delivering the
Nuclear Fuel as set forth below or (b) final and uncontested payment of the
amounts referred to in (A) and (B) below, the Lessee's obligations set
forth in Sections 7, 9, 13, 14 and 17; and upon such termination the Lessor
shall have the immediate right of possession of the Nuclear Fuel (to the
extent not prohibited by law) and the right, at the Lessor's election,
either to enter any Generating Facility or any other premises of the Lessee
where the Nuclear Fuel or any portion thereof is located and remove the
Nuclear Fuel or such portion thereof there located (to the extent not
prohibited by law) or cause the same to be done by any Person entitled by
law so to do, in which case the Lessor shall not be responsible for any
damage to any Generating Facility or such premises, except for damage
resulting from the Lessor's gross negligence or wilful misconduct (the
Lessee hereby agreeing to indemnify and hold the Lessor harmless from all
losses and liabilities in respect of any such damage to any Generating
Facility, such premises or the Nuclear Fuel or injury to the Lessor's, the
Lessee's or such other Person's employees sustained in the course of such
removal, except any such damage resulting from the Lessor's gross
negligence or willful misconduct, provided that the Lessee hereby further
agrees that the gross negligence or willful misconduct of any Assignee or
any Secured Party shall not be imputed to the Lessor), or to require the
Lessee, at the Lessee's expense, to assemble the Nuclear Fuel in
appropriate cooling or other Storage Facility and, whether or not such
storage is requested by Lessor, Lessor may also require the Lessee, at the
Lessee's expense, to deliver the Nuclear Fuel or any portion thereof,
properly containerized and insulated for
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shipping at any Generating Facility or Storage Facility and consigned to a
Person specified by the Lessor and licensed to receive such Nuclear Fuel,
in which case the risk of loss shall be upon the Lessee until such delivery
is made; and the Lessor may thenceforth hold, possess and enjoy the Nuclear
Fuel (to the extent not prohibited by law) and may sell the Lessor's
interest in the Nuclear Fuel or any portion thereof upon any terms deemed
satisfactory to the Lessor, free from any rights of the Lessee and any
Person claiming through or under the Lessee; but the Lessor shall,
nevertheless, have the right to recover forthwith from the Lessee:
(A) any and all Basic Rent, Additional Rent and all other
amounts payable by the Lessee hereunder which may be due and unpaid
immediately prior to such termination or which may then be accrued and
unpaid, which obligation to pay shall be unconditional as provided in
Section 5(h) hereof; and
(B) as liquidated damages for loss of the bargain and not
as a penalty, an amount equal to the excess of (x) the sum of (i) the
Net Investment Value of the Nuclear Fuel as of the date of such
termination of this Fuel Lease plus (ii) the Termination Rent, over
(y) the Net Investment Value of the Nuclear Fuel, if the Lessor
chooses to hold and not sell the Nuclear Fuel, or the amount, if any,
realized by the Lessor in a sale of the Nuclear Fuel (at which the
Lessor may be a purchaser), without set-off or reduction thereof other
than a deduction from the sale price of all the costs of such sale,
including legal fees, commissions, sales taxes and other customary
charges; provided, however, that it is understood that the Lessor, any
Assignee and any Secured Party shall have no obligation to conduct any
such sale, and that the Lessor may, in lieu of conducting such sale,
transfer and convey title to, and its entire ownership interest in,
the Nuclear Fuel to the Lessee or any trustee or liquidator therefor
upon the terms and conditions set forth in Section 21 hereof (in which
case the amount in clause (y) above shall be zero), but that, if the
Lessor conducts such sale, the Nuclear Fuel may be sold free and clear
of all rights of the Lessee; and
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(C) any and all other damages and expenses (including,
without limitation, reasonable attorneys' fees and expenses) without
set-off, reduction or counterclaim, which the Lessor shall have
sustained by reason of the breach of any provision of this Fuel Lease.
The Lessee hereby waives, to the full extent not prohibited by law,
any right it may now or hereafter have to require the sale, in mitigation of
damages, of the Nuclear Fuel or any portion thereof consequent to a Lease Event
of Default. Lessee hereby agrees that its obligations to make payments pursuant
to this Section 25(b) shall be absolute and unconditional as provided in Section
5(h) hereof.
(c) The remedies herein provided in favor of the Lessor, any Assignee
and any Secured Party in case of a Lease Event of Default as hereinabove set
forth shall not be deemed to be exclusive, but shall be cumulative and shall be
in addition to all other remedies in its favor existing at law, in equity or in
bankruptcy.
SECTION 26. Surrender; Acceptance of Surrender.
Subject always to the rights of the Lessee to obtain a release of any
portion of the Nuclear Fuel pursuant to Section 10(b) and acquire title thereto
and the right of the Lessee to acquire title to the Nuclear Fuel in the events
and on the terms and conditions set forth in Section 20, upon the expiration or
earlier termination of this Fuel Lease, the Lessee shall surrender the Nuclear
Fuel to the Lessor or its designee in the same condition in which the various
portions thereof existed on the respective dates when such portions first became
subject to this Fuel Lease, except as repaired, replaced or added to, as
permitted by any provisions of this Fuel Lease, and except for the loss or
reduction of heat production capacity and other changes caused by the Fuel
Management through the Nuclear Fuel Cycle. The Lessee shall, at its expense and
upon request of the Lessor, remove the Nuclear Fuel or any portion thereof so
requested from the lands upon which the same is situated at the expiration or
termination of the term hereof, and deliver the Nuclear Fuel or such portions
thereof so requested, properly containerized and insulated for shipping, at any
Generating Facility or Storage Facility where it is located and consigned to a
Person specified by the Lessor and licensed to receive such Nuclear Fuel. No
surrender of this Fuel Lease or of the Nuclear Fuel or any portion thereof or of
any interest therein shall be valid or effective unless agreed to and accepted
in writing by the Lessor, and no act by any representative or agent of the
Lessor, and no act by the Lessor, other than such agreement and acceptance by
the Lessor, shall constitute an acceptance of any such surrender.
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SECTION 27. No Merger.
There shall be no merger of this Fuel Lease or of the leasehold
interest created by this Fuel Lease with the absolute ownership interest in the
Nuclear Fuel or any portion thereof by reason of the fact that the same person,
firm, corporation or other entity may acquire or own or hold, directly or
indirectly, (i) this Fuel Lease or the leasehold interest created by this Fuel
Lease or any interest in this Fuel Lease or in any such leasehold interest, and
(ii) the absolute ownership or other interest in the Nuclear Fuel or any portion
thereof, and no such merger shall occur unless and until all persons, firms,
corporations, and other entities, including any Assignee and Secured Party,
having any interest in (a) this Fuel Lease or the leasehold interest created by
this Fuel Lease or (b) the absolute ownership or other interest in the Nuclear
Fuel or any portion thereof shall join in an instrument effecting such merger.
SECTION 28. Notices.
Any notices provided for in this Fuel Lease shall be in writing and
shall be deemed to have been duly given when delivered personally or otherwise
actually received (whether by courier, telex or facsimile transmission) or five
days after the same have been deposited in the United States mail, registered
certified (or registered), postage prepaid, addressed as follows:
If to the Lessor: (with copies to each Assignee at its
address specified in the applicable Trust Indenture)
CommEd Fuel Company, Inc.
c/o Merrill Lynch Money Markets, Inc.
225 Liberty Street - 8th Floor
New York, New York 10080-6108
Attention: Mr. Gary Carlin
Vice President and Treasurer
Telecopier: (212) 236-7584
Confirmation: (212) 236-7200
If to the Lessee:
Commonwealth Edison Company
One First National Plaza, 37th Floor
Post Office Box 767
Chicago, Illinois 60690
Attention: Treasurer
Telecopier: (312) 394-3110
Confirmation: (312) 394-3117
and if to an Assignee, then at its address specified in the applicable Trust
Indenture, or at such other place as any of the
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parties may designate by notice duly given in accordance with this Section 28.
SECTION 29. Allocation of Amounts.
Whenever, under Section 1, 5, 6, 10, 18(a), 19(b) or 22, computations
are required to be made involving a cost, price, payment, charge, factor,
discount, or any other amount relating to a single assembly of the Nuclear Fuel,
such cost, price, payment, charge, factor, discount or any other amount shall be
determined in the sole judgment of the Lessee but subject to any applicable
regulatory requirements. Unless the Lessee shall have informed the Lessor
otherwise in writing or unless otherwise set forth in any of the schedules
attached hereto or furnished pursuant to this Fuel Lease, allocation shall be
made by dividing the aggregate of all such costs, prices, payments, charges,
discounts or any other amounts which are known to have been incurred, paid,
accrued or arisen, at approximately the same time and in the same general
transaction or computation, with respect to such assembly and several other
assemblies of the Nuclear Fuel, into as many equal parts as there are such
assemblies, and allocating one of the parts so divided to each such assembly.
In the event that any such cost, price, payment, charge, discount or any other
amount must be certified pursuant to this Fuel Lease, the person making such
certification shall be the sole judge of the propriety of making any such
allocation, and such person need only place the term "(allocated)" before or
after any cost, price, payment, charge, discount or any other amount so
certified in order to (i) establish the propriety of making such an allocation,
and (ii) give the warranty of such person as to the accuracy of the allocation
so certified and its compliance with the provisions of this Section 29.
SECTION 30. Amendments.
This Fuel Lease may not be amended, modified or terminated, nor may
any obligation hereunder be waived, orally, and no such amendment, modification,
termination or waiver shall be effective for any purpose unless it is in
writing, signed by the party against whom enforcement thereof is sought (except
that amendments of Schedule A hereto pursuant to Section 6, 10, 18(a) or 19(b)
hereof shall be made in accordance with the provisions of such Sections) and, if
this Fuel Lease has been assigned, consented to in writing by each Assignee for
whose benefit such assignment was made.
SECTION 31. Severability.
Any provision of this Fuel Lease 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
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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 Lessor and the Lessee hereby
waive any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.
SECTION 32. Taxes; Tax Benefits.
(a) For federal, state and local tax purposes, Lessor and Lessee
intend that Lessee shall be treated as the owner of the Nuclear Fuel and that
this Fuel Lease shall constitute a financing (i.e., a lending by Lessor and a
borrowing by Lessee) and not a lease, and neither Lessor nor Lessee shall file
any tax returns or reports or take any similar action which, for such tax
purposes, would be inconsistent with such intention as to tax treatment;
provided, that such characterization for tax purposes shall not cause this Fuel
Lease to constitute such a lending and borrowing for any other purpose.
(b) To the extent that the Nuclear Fuel is or becomes eligible for
any tax benefits under the Code as in effect on the date first above written or
thereafter amended from time to time, and if the Internal Revenue Service shall
treat the Lessor as the owner of the Nuclear Fuel, Lessor at Lessee's request
shall elect to treat Lessee as the owner of the Nuclear Fuel and as having
acquired the Nuclear Fuel and shall provide Lessee with an appropriate benefit
election. Lessee shall provide Lessor with a report or statement with respect
to all Nuclear Fuel as to which such benefit election is applicable, and such
report or statement shall be in such form as may be required for Internal
Revenue Service reporting.
SECTION 33. Sale of Nuclear Fuel and Assignment of
Rights under Nuclear Fuel Contracts.
(a) Lessee shall, from time to time, convey, transfer, sell, assign
and set over to Lessor, all or any part of Lessee's right, title and interest,
whether now or hereafter existing or acquired (other than the right, title and
interest of Lessee under this Fuel Lease), in and to Nuclear Fuel and Nuclear
Fuel Contracts. All such conveyances, transfers, sales and assignments shall be
made (i) pursuant to a Bill of Sale substantially in the form of Schedule C
hereto or (ii) pursuant to an Assignment Agreement substantially in the form of
Schedule F hereto, which have been executed and delivered by Lessee or a
Manufacturer, as the case may be, prior to the time that Lessor is required to
make any payment with respect thereto pursuant to Section 6 hereof.
(b) Neither any assignment contemplated by this Fuel Lease, nor any
action or inaction on the part of Lessor under this Fuel Lease or otherwise,
shall (i) release Lessee from any of its
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obligations and agreements under any Nuclear Fuel Contract, (ii) constitute an
assumption of any such obligations or agreements on the part of the Lessor or
any Assignee or Secured Party or (iii) impose any obligation or liability
whatsoever on Lessor or any Assignee or Secured Party. No action or failure to
act on the part of Lessee shall adversely affect or limit in any way the rights
of Lessor under this Fuel Lease or under any Nuclear Fuel Contract.
(c) Lessee at its expense will perform and comply with all the terms
and provisions of each Nuclear Fuel Contract to be performed or complied with by
it; will maintain each Nuclear Fuel Contract in full force and effect; and will
enforce each of the Nuclear Fuel Contracts in accordance with their respective
terms and will take all such action to that end as from time to time may be
reasonably requested by Lessor.
(d) Without the prior written consent of Lessor (which consent shall
not be unreasonably withheld) and, if this Fuel Lease has been assigned, the
prior written consent of each Assignee for whose benefit such assignment was
made, Lessee will not (i) cancel or terminate any Nuclear Fuel Contract or
consent to or accept any cancellation or termination thereof, (ii) waive any
default under or breach of any Nuclear Fuel Contract, or (iii) take any other
action in connection with any Nuclear Fuel Contract which would impair the
interests or rights (or value thereof) of Lessee thereunder or of Lessor in
connection therewith.
(e) Lessee will promptly deliver to Lessor copies of all notices,
requests, agreements and other documents received or delivered by Lessee under
or with respect to any Nuclear Fuel Contract which are material to the interests
or rights (or value thereof) of Lessee thereunder or of Lessor in connection
therewith. Lessee will from time to time, upon request of Lessor, furnish
Lessor such information concerning the Nuclear Fuel, any Nuclear Fuel Contract
or any Generating Facility as Lessor may reasonably request. Lessor shall
preserve the confidentiality of any information which, under the terms of the
relevant Nuclear Fuel Contract, is required to be kept confidential.
(f) Lessee will not change its principal place of business or remove
therefrom its records concerning the Nuclear Fuel Contracts unless it gives
Lessor at least thirty days' prior written notice thereof.
(g) Lessee hereby represents and warrants and agrees that: (i) each
Nuclear Fuel Contract is in full force and effect and Lessee has delivered to
Lessor a true and complete copy of each such Nuclear Fuel Contract as presently
in effect; (ii) Lessee has not previously sold, assigned or transferred, or
created any security interest in, the Nuclear Fuel, any Nuclear Fuel Contract or
any part thereof (except for (a) such portions of Partially Assigned Agreements
which are not assigned to Lessor and (b)
-46-
assignments or transfers relating to other nuclear fuel transactions all of
which have been fully discharged); (iii) Lessee has not agreed to any amendment,
modification or supplement which would constitute part of any Nuclear Fuel
Contract (other than as disclosed in connection with clause (i) of this Section
33(g), or waived performance by any other Person obligated under any Nuclear
Fuel Contract of any obligation of such Person thereunder; (iv) neither Lessee
nor any other Person is in default in the payment, performance or observance of
any term, covenant or agreement on its part to be performed or observed under
any Nuclear Fuel Contract; (v) the Nuclear Fuel will be kept at the locations
designated by Lessee in Fuel Schedules to be submitted from time to time
hereunder; and (vi) other than financing statements filed in other nuclear fuel
transactions, the underlying obligations of which have been fully discharged, no
financing statement (other than any which may have been filed on behalf of an
Assignee or Lessor and other than any which relate to such portions of Partially
Assigned Agreements which are not assigned to Lessor) covering all or any part
of the Nuclear Fuel or any Nuclear Fuel Contract is on file in any public
office.
SECTION 34. Miscellaneous.
The Lessor agrees that (i) the Lessor will not amend or modify or
consent to any amendment or modification of, or seek any waiver adverse to the
Lessee with respect to, any of the Basic Documents without the prior written
consent of the Lessee, (ii) the Lessor will at all times use its best efforts to
comply with, observe and perform all of the covenants and agreements required to
be complied with, observed or performed by the Lessor under any of the Basic
Documents to which it is a party, (iii) Lessor will exercise its rights under
any Credit Agreement only with the consent of Lessee (but Lessee agrees, for the
benefit of the parties to a Credit Agreement that no such failure to obtain the
consent of Lessee shall reduce Lessee's obligations, or adversely impair such
parties' rights, under any of the Basic Documents), and (iv) Lessor will
promptly furnish to Lessee copies of all notices, requests, agreements and other
documents received or delivered by Lessor under or with respect to any of the
Basic Documents, to the extent that the same shall not have been delivered to
Lessee pursuant thereto. The obligations of the Lessee under the Fuel Lease are
unconditional, as provided in Section 5(h), notwithstanding the performance or
nonperformance of Lessor of its obligations under this paragraph.
The Lessee agrees to furnish such documents and certificates as may be
necessary for the Lessor to comply with, observe and perform such covenants and
agreements.
The terms and provisions of this Fuel Lease supersede all prior
negotiations and oral understandings, if any, between the
-47-
Lessor and the Lessee with respect to the transactions contemplated hereby.
The obligations of the Lessor under this Fuel Lease and each document
or instrument delivered by the Lessor hereunder or in connection herewith are
solely the corporate obligations of the Lessor. No recourse shall be had for
the payment of any amount owing hereunder or any other obligation or claim
arising out of or based upon this Fuel Lease or any other document or instrument
delivered by the Lessor hereunder or in connection herewith against Merrill or
against any stockholder, employee, officer, director, incorporator or agent of
the Lessor. For purposes of this Section 34, the term "MERRILL" shall mean and
include Merrill and all affiliates thereof and any employee, officer, director,
incorporator, shareholder or beneficial owner of any of them; provided, however,
that the Lessor shall not be considered to be an affiliate of Merrill for
purposes of this Section 34.
The Lessor shall be entitled to assume that no Termination Event or
Lease Event of Default shall have occurred and be continuing hereunder, unless
an officer or a director of the Lessor has actual knowledge thereof or the
Lessor has received notice from any Assignee or Secured Party that such Assignee
or Secured Party considers that such a Termination Event or Lease Event of
Default has occurred and is continuing.
The captions in this Fuel Lease are for convenience of reference only
and shall not define or limit any of the terms or provisions hereof. This Fuel
Lease shall in all respects be governed by, and construed in accordance with,
the laws of State of Illinois applicable to contracts made and performed within
the State of Illinois.
The indemnification provisions of Section 11 hereof are for the
benefit of the parties hereto and of the indemnitees named therein and Lessee
hereby expressly agrees that any such indemnitee shall be entitled to sue
thereon as though he, she or it were a party hereto.
-48-
IN WITNESS WHEREOF, the parties hereto have caused this Fuel Lease to
be executed by their respective officers thereunto duly authorized, as of the
day and year first above written.
LESSOR:
COMMED FUEL COMPANY, INC.
By: /s/ Thomas W. Widener
---------------------
Thomas W. Widener
Vice President
LESSEE:
COMMONWEALTH EDISON COMPANY
By: /s/ Dennis F. O'Brien
---------------------
Dennis F. O'Brien
Treasurer
STATE OF ILLINOIS )
) SS.
COUNTY OF COOK )
The foregoing instrument was acknowledged before me this 23rd day of
November, 1993, by Thomas W. Widener, a Vice President of CommEd Fuel Company,
Inc., a Delaware corporation, on behalf of such corporation.
/s/ Peter J. Daane
------------------
Notary Public
(Notarial Seal)
My Commission Expires: Feb. 7, 1994
STATE OF ILLINOIS )
) SS.
COUNTY OF COOK )
The foregoing instrument was acknowledged before me this 23rd day of
November, 1993, by Dennis F. O'Brien, the Treasurer of Commonwealth Edison
Company, an Illinois corporation, on behalf of such corporation.
/s/ Peter J. Daane
------------------
Notary Public
(Notarial Seal)
My Commission Expires: Feb. 7, 1994
SCHEDULE A
SCHEDULE OF NUCLEAR FUEL
Date:___________
Assembly Allocated Allocated
Serial Acquisition Capitalized Allocated
No. Cost Cost Investment
- -------- ----------- ----------- ----------
A-1
SCHEDULE B
FORM OF RENT SCHEDULE
NET INVESTMENT VALUE CONFIRMATION
QUARTER ENDED _______________
===============================================================================================================================
1 2 3 4 5 6 7 8
- -------------------------------------------------------------------------------------------------------------------------------
For Information Purposes Only
-----------------------------
Assigned Allocated Allocated N.I.V as of Capitalized Other N.I.V at
Assembly Acquisition Capitalized the End of Monthly Lease Burn-Up N.I.V. the end of
Location Cost Cost Prior Quarter Charges Charges Additions this Quarter
- -------- ----------- ----------- ------------- ------------- ------- --------- ------------
CommEd Fuel Company, Inc. Commonwealth Edison Company
(Lessor) (Lessee)
By: By:
-------------------------------- --------------------------------
Title Treasurer
(acknowledging acceptance) (acknowledging acceptance)
Note:
Columns 2 and 3 represent the Allocated Investment prior to the initial
commencement of Heat Production.
Column 5 represents that portion of Monthly Lease Charges attributable
to the period during the quarter when the Nuclear Fuel was not in
Heat Production.
Column 7 used only when Nuclear Fuel is added or removed or Capitalized
Costs (other than Monthly Lease Charges) are allocated to Nuclear Fuel
prior to the initial commencement of Heat Production.
Column 8 equals Column 4 plus Column 5 less Column 6 plus Column 7.
Annexes I and II are a part hereof.
Any allocation shall be made in sole judgment of Lessee.
B-1
ANNEX I
CALCULATION OF BURN-UP CHARGES AND BASIC RENT
=========================================================================================
1 2 3 4 5 6
- -----------------------------------------------------------------------------------------
Est. Design
Assembly Allocated MWD Output MWD MWD Burn-up Charge
Serial No. N.I.V Remaining Factor Output (Col. 4 x Col. 5)
- ---------- --------- ----------- ------ ------ -----------------
See Attachments I, II and III for calculation of Basic Rent.
Total Burn-up Charge =
Basic Rent Calculation:
1. Total Burn-Up Charge (from above) ...................
2. A. Quarterly Lease Charge (Annex II(a)
plus Annex II(b)) ..............................
B. Less: Capitalized Lease Charge (see Column 5
of Rent Schedule) ......................
Lease charges for quarter ......................
3. Additional Rent .....................................
Amount Due Lessor ..............................
- ------------------------------
Capitalized Lease Charge equals the Quarterly Lease Charge allocable to Nuclear
Fuel prior to initial commencement of Heat Production during the quarter.
Additional Rent excludes Capitalized Costs allocated to Nuclear Fuel prior to
the initial commencement of Heat Production.
B-2
ANNEX II(a)
MONTHLY LEASE CHARGES
NUCLEAR FUEL PRIOR TO THE INITIAL COMMENCEMENT OF HEAT PRODUCTION
====================================================================================================================================
1 2 3 4 5 6 7 8 9 10 11 12
- ------------------------------------------------------------------------------------------------------------------------------------
Interest Charges
--------------------------------------------------------
Amortization of Discount on Depositary, Lessor Income on Total
--------------------------- Subor- Fees for Fees on CP Dealer, Manage- Invested Monthly
Commercial IT dinated Letters Commit- Placement ment Excess Lease
Month Paper Notes Loans IT Notes Notes of Credit ments Charges Charges Proceeds Charges
- ----- ------------ ----------- ----- -------- ------- --------- ------- ----------- ------- --------- -------
Quarterly Lease Charge .......
(Capitalized)
For Information Purposes:
Unamortized discount on Commercial
Paper as of end of Quarter .........
Unamortized discount on IT Notes
as of end of Quarter ...............
* Note: Monthly Lease Charge equals the sum of Columns 2 through 10 less the
Income on Invested Excess Proceeds (Column 11).
B-3
ANNEX II(b)
MONTHLY LEASE CHARGES
NUCLEAR FUEL AFTER THE INITIAL COMMENCEMENT OF HEAT PRODUCTION
====================================================================================================================================
1 2 3 4 5 6 7 8 9 10 11 12
- ------------------------------------------------------------------------------------------------------------------------------------
Interest Charges
--------------------------------------------------------
Amortization of Discount on Depositary, Lessor Income on Total
--------------------------- Subor- Fees for Fees on CP Dealer, Manage- Invested Monthly
Commercial IT dinated Letters Commit- Placement ment Excess Lease
Month Paper Notes Loans IT Notes Notes of Credit ments Charges Charges Proceeds Charges
- ----- ------------ ----------- ----- -------- ------- --------- ------- ----------- ------- --------- -------
Quarterly Lease Charge ............
* Note: Monthly Lease Charge equals the sum of Columns 2 through 10 less the
Income on Invested Excess Proceeds (Column 11).
B-4
SCHEDULE C
BILL OF SALE
TO
COMMED FUEL COMPANY, INC.
KNOWN ALL MEN BY THESE PRESENTS, that the undersigned,
, a corporation (the "VENDOR")
- -------------------------------- ---------------
whose post office address is , for and in
-------------------------------------
consideration of the sum of $ paid to the Vendor upon or before the
-----------
execution and delivery of this Bill of Sale to CommEd Fuel Company, Inc.,
a Delaware corporation (the "PURCHASER") whose post office address is
, and of other good and valuable
- -------------------------------------------
considerations, the receipt and adequacy of which are hereby acknowledged by the
Vendor, hereby conveys, transfers, sells and sets over all of the personal
property consisting of the assemblies of nuclear fuel or components thereof or
other nuclear material or interests therein described in Annex I hereto (the
"NUCLEAR FUEL"), and by this Bill of sale does hereby grant, bargain, sell,
transfer and deliver the Nuclear Fuel unto the Purchaser, to have and to hold
the Nuclear Fuel, itself, its successors and assigns, forever.
The Vendor hereby warrants itself to be the true and lawful owner of the
Nuclear Fuel and to have full power, good right and lawful authority to dispose
of the same in the aforesaid manner and that the Nuclear Fuel is free and clear
of all claims, liens, security interests, and other encumbrances whatsoever; and
the Vendor, for itself, its successors and assigns does hereby covenant and
agree with the Purchaser, its successors and assigns, to warrant and defend the
true ownership of the Nuclear Fuel by the Purchaser against the claims and
demands of all and every person and persons.
The Vendor and the Purchaser hereby acknowledge that, notwithstanding the sale
of the Nuclear Fuel by the Vendor to the Purchaser hereunder, the Nuclear Fuel
will be in the possession of Commonwealth Edison Company, an Illinois
corporation, or in the possession of a Manufacturer (as defined in the Nuclear
Fuel Lease Agreement dated as of November 23, 1993, between the Purchaser, as
lessor, and Commonwealth Edison Company, as lessee) processing, storing or
reprocessing the Nuclear Fuel for the account of Commonwealth Edison Company,
pursuant to such Nuclear Fuel Lease Agreement. On the date hereof, the Purchaser
is licensed to own, but not to possess, the Nuclear Fuel, and under no
circumstances shall a transfer of possession of the Nuclear Fuel to the
Purchaser
C-1
be necessary for the transfer of ownership effected and intended to be effected
by this Bill of Sale.
IN WITNESS WHEREOF, the Vendor has caused this Bill of Sale to be executed
in its corporate name, by one of its authorized officers and to be dated
, .
- --------------- ------
[Vendor]
By
--------------------------------------
Authorized Officer
ACCEPTANCE
THIS BILL OF SALE is accepted by the undersigned as of the date last above
written.
COMMED FUEL COMPANY, INC.
By
--------------------------------------
C-2
ANNEX I
Description of the Nuclear Fuel
C-3
SCHEDULE D
FORM OF FUEL SCHEDULE
FUEL SCHEDULE NO. , dated as of , 19 , between
------ ---------------- ---
CommEd Fuel Company, Inc., a Delaware corporation ("LESSOR"), whose post office
address is and Commonwealth Edison Company, an
--------------------------------
Illinois corporation ("LESSEE"), whose post office address is Post Office Box
767, One First National Plaza, Chicago, Illinois 60690.
W I T N E S S E T H:
WHEREAS, the Lessor and the Lessee have heretofore entered into that certain
Nuclear Fuel Lease Agreement dated as of November 23, 1993 (the "FUEL LEASE")
(defined terms therein being used herein with the same meanings as provided in
said Fuel Lease); and
WHEREAS, the Fuel Lease provides in Sections 6, 10, 18 and 19 thereof for
Fuel Schedules, amending Schedule A to the Fuel Lease, to be executed and
delivered from time to time;
NOW, THEREFORE, in consideration of the premises and other good and
sufficient consideration and in compliance with the requirements of the Fuel
Lease, the Lessor and the Lessee hereby agree as follows:
1. The Lessee certifies that the amounts set forth in Annex I hereto as
Acquisition Costs, Capitalized Costs and Investment, respectively, are true and
correct and have been computed in accordance with the provisions of the Fuel
Lease.
2. The Lessee requests the Lessor to accept this Fuel Schedule for the
purpose indicated:
[_] (a) Payment to the Manufacturers named in Annex I, if any, of the
amounts specified in Annex I and/or payment to the Lessee in an
amount equal to $ for costs previously incurred by the
----------
Lessee or paid by the Lessee directly to the Manufacturers. All of the
amounts for which payment is hereby requested are included in Acquisition
Costs and Capitalized Costs certified in paragraph 1 above and none of
said amounts has been previously paid by the Lessor pursuant to Section 6
of the Fuel Lease.
D-1
[_] (b) Release from the Fuel Lease--Annex III (pursuant to Fuel Lease
Section 10(b)).
[_] (c) Transfer of title--Annex II and/or Annex III (pursuant to Fuel
Lease Section 10(c)).
[_] (d) Movement of Nuclear Fuel--Annex II and/or Annex III (pursuant to
Fuel Lease Section 10(d)).
(e) Permitted Fuel Loan--Annex II and/or Annex III (pursuant to Fuel
Lease Section 10(e)).
3. (a) Schedule A to the Fuel Lease is hereby supplemented and amended so
as to include those assemblies of Nuclear Fuel or the component parts thereof or
interests therein described in Annex II hereto (the "ADDITIONAL NUCLEAR FUEL")
and to subject such Additional Nuclear Fuel to the Fuel Lease (and if any
Nuclear Fuel is simultaneously being removed, to eliminate from Schedule A, as
theretofore supplemented and amended, the description of assemblies listed on
Annex III hereto). The Additional Nuclear Fuel complies with all requirements of
the Fuel Lease and of the law, and all necessary recordings and filings
(including Uniform Commercial Code financing and continuation statements) have
been duly made in the public offices in which such recordings and filings must
be made to subject, and publish notice of the subjection of, such Additional
Nuclear Fuel to the Fuel Lease and to perfect a valid first security interest
therein on behalf of the Indenture Trustee, and all fees, taxes and charges
payable in connection with such recordings and filings have been paid in full by
the Lessee.
(b) The Lessee hereby covenants and agrees with the Lessor to warrant
and defend the true ownership by the Lessor of the Additional Nuclear Fuel
against the claims and demands of every person. The Lessee further warrants
that such property is, and is intended to be and remain, personal property, is
not and has not been affixed to any land and is free and clear of all claims,
liens, security interests and other encumbrances whatsoever, except as permitted
by the Fuel Lease.
4. Except as hereinbefore expressly modified and amended, the Fuel Lease is
ratified and confirmed in all respects, including, without limitation, the
obligation of the Lessee to pay all installments of Basic Rent and Additional
Rent and other amounts to be paid by the Lessee under the Fuel Lease.
5. Delivery of this Fuel Schedule No. constitutes a representation by
----
the Lessee that since the date of the Fuel Lease, there has been no material
change in the condition or business of the Lessee which in any way materially
adversely affects the ability of the Lessee to perform its obligations under
the Fuel
D-2
Lease except as set forth in documents which have been filed with the Securities
and Exchange Commission and heretofore furnished to Lessor, or which are
attached as part of this Fuel Schedule No. . No event or condition has
----
occurred which has resulted or is likely to result in the inability of the
Lessor to pay any Indebtedness.
IN WITNESS WHEREOF, the Lessor and the Lessee have caused this Fuel
Schedule to be duly executed as of the date first above written.
COMMED FUEL COMPANY, INC.
By:
-------------------------------------
COMMONWEALTH EDISON COMPANY
By:
-------------------------------------
D-3
ANNEX I TO SCHEDULE D
Allocated Allocated
Manufacturer and Acquisition Capitalized Allocated
Description of Service Cost Cost Investment
- ----------------------- ----------- ----------- ----------
D-4
ANNEX II TO SCHEDULE D
DESCRIPTION OF NUCLEAR FUEL
TO BE INCLUDED WITH SCHEDULE A
Net
Assembly Investment
Serial No. Value
- ---------- ----------
$
D-5
ANNEX III TO SCHEDULE D
DESCRIPTION OF NUCLEAR FUEL TO BE RELEASED
FROM SCHEDULE A
Net
Assembly Investment
Serial No. Value
- ---------- ----------
$
D-6
SCHEDULE E
FORM OF BILL OF SALE
FROM
COMMED FUEL COMPANY, INC.*
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, COMMED FUEL
COMPANY, INC., a Delaware corporation (the "FUEL COMPANY"), whose post office
address is _______________________________________________, for and in
consideration of the sum of $___________ paid to the Fuel Company upon or before
the execution and delivery of this Bill of Sale by Commonwealth Edison Company,
an Illinois corporation (the "PURCHASER"), whose post office address is P.O. Box
767, Chicago, Illinois 60697-0767, hereby conveys, transfers, sells and sets
over to the Purchaser, its successors and assigns, all right, title, interest
and claim of the Fuel Company in and to the personal property consisting of the
assemblies of nuclear fuel or components thereof or other nuclear material
described in Annex III to Fuel Schedule No. ____, a copy of which is attached
hereto and made a part hereof (the "NUCLEAR FUEL"), and by this Bill of Sale
does hereby grant, bargain, sell, transfer and deliver the Nuclear Fuel unto the
Purchaser, to have and to hold the Nuclear Fuel unto the Purchaser, and its
successors and assigns, forever. THE NUCLEAR FUEL IS TRANSFERRED AND CONVEYED
BY THE FUEL COMPANY ON AN "AS-IS," "WHERE-IS" BASIS, WITHOUT RECOURSE AGAINST OR
REPRESENTATION OR WARRANTY (EXPRESS OR IMPLIED) OF ANY KIND WHATSOEVER,
INCLUDING ANY WARRANTY OF FITNESS FOR PARTICULAR PURPOSE OR MERCHANTABILITY, ON
THE PART OF THE FUEL COMPANY, EXCEPT THAT THE FUEL COMPANY REPRESENTS AND
WARRANTS THAT IT HAS NOT VOLUNTARILY GRANTED OR CREATED ANY LIEN ON THE NUCLEAR
FUEL OTHER THAN THOSE PERMITTED BY SECTION 15 OF THE FUEL LEASE. The Nuclear
Fuel shall be delivered to the Purchaser, as a necessary incident of this Bill
of Sale, at any of the generating facilities of the Purchaser in the State of
Illinois or at facilities of a Manufacturer (designated by the Purchaser) by the
Fuel Company, its agents or a common carrier consigned to the Purchaser. The
Fuel Company hereby represents
______________________
* This document may be appropriately modified to include all Assignees having
a security interest in the relevant Nuclear Fuel and/or to substitute
another Person for Purchaser, if Purchaser has designed such other Person
in accordance with the Fuel Lease.
E-1
and warrants that it has not voluntarily granted or created any lien, exception
or restriction to attach to the Nuclear Fuel except as follows:
[Insert any liens, exceptions or restrictions permitted by Section 15 of the
Fuel Lease at time of transfer.]
IN WITNESS WHEREOF, the Fuel Company has caused this Bill of Sale to
be executed and attested by one of its duly authorized officers, and to be dated
as of _____________________, 19__.
COMMED FUEL COMPANY, INC.
By:_______________________
Title:
ATTEST:
_____________________________________
Title:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Indenture Trustee under
the Trust Indenture dated as of November 23, 1993, as amended, made by the Fuel
Company in the favor of Morgan Guaranty Trust Company of New York as trustee for
the benefit of the secured parties specified therein, does hereby release the
property described in Annex III to Fuel Schedule No. _____ from the lien and
security interest of said Trust Indenture. NO WARRANTY, EITHER EXPRESS OR
IMPLIED, AS TO TITLE, MERCHANTABILITY, FITNESS, SAFETY OR ANY OTHER MATTER
WHATSOEVER, IS MADE BY, OR SHALL BE DEEMED TO BE MADE BY, AND NO RECOURSE MAY BE
HAD FOR ANY REASON AGAINST, THE UNDERSIGNED OR ANY OF SUCH SECURED PARTIES.
By:__________________________________
Title:
E-2
ACCEPTANCE
This BILL OF SALE is accepted by the undersigned as of the date last
written above.
COMMONWEALTH EDISON COMPANY
By:________________________________
Title:
E-3
SCHEDULE F
FORM OF ASSIGNMENT AGREEMENT
KNOW ALL MEN BY THESE PRESENTS THAT:
COMMONWEALTH EDISON COMPANY, an Illinois corporation (the "ASSIGNOR"),
in consideration of one dollar and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, hereby sells, grants,
bargains, conveys and assigns to COMMED FUEL COMPANY, INC., a Delaware
corporation (the "ASSIGNEE"), all right, title and interest of the Assignor in,
to and under all the property described in Exhibit 1 attached hereto (all of
such property being herein collectively called the "PROPERTY").
TO HAVE AND TO HOLD the Property unto the Assignee, its successors
and assigns, for its and their own use forever.
1. The interest of the Assignor in the Property, and the interest
transferred by this Assignment, is that of absolute ownership.
2. The Assignor hereby warrants that it is the lawful owner of the
rights and interests conveyed by this Assignment and that its title to such
rights and interests is hereby conveyed to the Assignee free and clear of all
liens, charges, claims and encumbrances of every kind whatsoever, other than (i)
the amounts, if any, owing under the Contract (as such term is defined in
Exhibit 1 attached hereto), (ii) other claims, if any, of the Assignor and the
Contractor (as such term is defined in Exhibit 1 attached hereto) which may
exist as between themselves and (iii) other liens, charges, claims and
encumbrances permitted by the Fuel Lease (as hereinafter defined); and that the
Assignor will warrant and defend such title forever against all claims and
demands whatsoever.
-1-
3. In order that the Contractor may transfer to the Assignee clear
title to the Nuclear Fuel (as such term is defined in Exhibit 1 attached here)
on its delivery date, the Assignor hereby releases and transfers to the Assignee
any right, title or interest in the Nuclear Fuel which may have been acquired by
the Assignor under the Contract prior to its delivery date.
4. This Assignment is made in accordance with a Nuclear Fuel Lease
Agreement dated as of November 23, 1993, between the Assignor and the Assignee
(said Fuel Lease, as the same may from time to time be amended, modified or
supplemented, being herein called the "FUEL LEASE"). Pursuant to a Trust
Indenture dated as of November 23, 1993 (said Trust Indenture, as the same may
from time to time be amended, modified or supplemented, being herein called the
"TRUST INDENTURE"), made by Assignee in favor of Morgan Guaranty Trust Company
of New York as Indenture Trustee (the "INDENTURE TRUSTEE"), the Assignee is
assigning and granting a security interest in the Property and this Assignment
to the Indenture Trustee, for the ratable benefit of the secured parties named
in the Trust Indenture, as collateral security for all of the Secured
Obligations (as that term is defined in the Trust Indenture).
5. It is expressly agreed that, anything contained herein to the
contrary notwithstanding, (a) the Assignor shall at all times remain liable to
the Contractor to observe and perform all of its duties and obligations under
the Contract to the same extent as if this Assignment and the Trust Indenture
had not been executed, (b) the exercise by the Assignee or the Indenture Trustee
of any of the rights assigned hereunder or under the Trust Indenture as the case
may be, shall not release the Assignor from any of its duties or obligations to
the Contractor under the Contract, and (c) neither the Assignee nor the
Indenture Trustee, nor any of the other secured parties under the Trust
Indenture, shall have any obligation or liability under the Contract by reason
of or arising out of this Assignment, the Fuel Lease or the Trust Indenture, or
be obligated to perform or fulfill any of the duties or obligations of the
Assignor under the Contract, or to make any payment thereunder, or to present or
file any claim, or to take any action to collect or enforce the payment of any
amounts or the delivery of any property which may have been assigned to it or to
which it may be entitled at any time or times; provided, however, the Assignee
agrees, solely for the benefit of the Assignor, and subject to the terms and
conditions of the Fuel Lease, (i) to purchase the Nuclear Fuel from the
Contractor pursuant to the Contract and (ii) to pay to the Contractor and/or to
the Assignor or their order the respective amounts specified in the Fuel Lease
with respect to such Nuclear Fuel.
-2-
6. Notwithstanding anything contained herein to the contrary,
subject to the terms and conditions of the Fuel Lease, the Assignor may continue
to engage in Fuel Management (as such term is defined in the Fuel Lease) with
respect to the Property, including, without limitation, all dealings with the
Contractor.
7. The Assignor agrees that at any time and from time to time, upon
the request of the Assignee or the Indenture Trustee and at the sole expense of
the Assignor, the Assignor will promptly and duly execute and deliver any and
all such further instruments and documents and take such further action as the
Assignee or the Indenture Trustee may reasonably request in order to obtain the
full benefits of this Agreement and the Trust Indenture and of the rights,
powers and interests herein and therein granted, including, without limitation,
the filing of any financing or continuation statements under the Uniform
Commercial Code in effect in any jurisdiction with respect to the transfer of
Assignor's right, title and interest in the Property provided for hereby and the
security interest granted by the Trust Indenture and the appearance in and
prosecution or defense of any lawsuit with respect to the rights, powers and
interests herein or therein granted (or with respect to the grant herein of such
rights, powers and interests) where such appearance, prosecution or defense by
the Assignor is necessary to allow Assignee or the Indenture Trustee to obtain
the full benefits of this Agreement and the Trust Indenture. The Assignor
hereby also authorizes the Assignee and the Indenture Trustee to file any such
financing or continuation statements without the signature of the Assignor to
the extent permitted by applicable law. The Assignor will mark its books and
records pertaining to the Contract to evidence this Assignment and the transfer
of Assignor's right, title and interest in the Property provided for hereby.
8. In any suit, proceeding or action by the Assignee under the
Contract to enforce any provisions thereof, the Assignor will save, indemnify
and keep the Assignee harmless from and against all expenses, loss or damage
suffered by reason of any defense, set-off, counter-claim, recoupment or
reduction of liability whatsoever of the Contractor, arising out of a breach by
the Assignor of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to or in favor of the Contractor or
its successors from the Assignor, and all such obligations of the Assignor shall
be and remain enforceable against and only against the Assignor and shall not be
enforceable against the Assignee.
9. The Assignor hereby agrees that, except as permitted by Section
33 of the Fuel Lease, it will not enter into or consent to or permit any
cancellation, termination, amendment, supplement or modification of or waiver
with respect to the Contract so far as it relates to the Nuclear Fuel, nor will
the Assignor sell, assign, grant any security interest in or
-3-
otherwise transfer its rights or other interests in the Property or any part
thereof, except as permitted by the Fuel Lease.
10. The Assignor hereby represents and warrants that the Contract is
in full force and effect and represents the only agreement between the Assignor
and the Contractor with respect to the Nuclear Fuel.
11. The Assignor hereby agrees to send the Contractor a copy of this
Assignment.
12. This Assignment shall be governed by and construed in accordance
with the laws of the State of Illinois.
IN WITNESS WHEREOF, the Assignor has caused this Assignment to be duly
executed and delivered as of the __ day of _________, ____.
COMMONWEALTH EDISON COMPANY
By:________________________________
Title:
The foregoing Assignment is hereby accepted:
COMMED FUEL COMPANY, INC.
By:________________________________
Title:
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EXHIBIT 1 to
Assignment Agreement
--------------------
DESCRIPTION OF PROPERTY
(a) The Agreement [description of Contract between the Assignor and
[Name of Contractor] (the "CONTRACTOR") (said Agreement, as the same may from
time to time be amended, modified or supplemented being herein called the
"CONTRACT"), insofar as, and only to the extent that, the Contract relates to
[description of nuclear fuel and service to be performed] presently scheduled to
be delivered during __________, 19__ (the "NUCLEAR FUEL"); provided, however,
that all other [nuclear fuel] under the Contract shall not be deemed to be
Nuclear Fuel for purposes of this Assignment, and such nuclear fuel and the
rights relating thereto under the Contract are not assigned hereby and shall not
constitute Property; and
(b) The Property shall include, without limitation, (i) any and all
amendments and supplements to the Contract from time to time executed and
delivered, to the extent that any such amendment or supplement relates to the
Nuclear Fuel, (ii) the Nuclear Fuel, including the right to receive title
thereto, (iii) all rights, claims and proceeds, now or hereafter existing, under
any insurance, indemnities, warranties and guaranties provided for in or arising
out of the Contract, to the extent that such rights or claims relate to the
Nuclear Fuel, (iv) any claim for damages arising out of or for breach or default
by the Contractor under or in connection with the Contract insofar as it relates
to the Nuclear Fuel, (v) any other amount, whether resulting from refunds or
otherwise, from time to time paid or payable by the Contractor under or in
connection with the Contract insofar as it relates to the Nuclear Fuel and (vi)
the right of the Assignor to terminate the Contract or to perform or to exercise
or enforce any and all covenants, remedies, powers and privileges thereunder,
insofar as it or they relate to the Nuclear Fuel.
CONSENT AND AGREEMENT
The undersigned________________________(the "CONTRACTOR"), has entered
into an agreement dated _________, ____, with COMMONWEALTH EDISON COMPANY, an
Illinois corporation (the "ASSIGNOR") (said agreement, as the same may be from
time to time amended, modified or supplemented, being herein called the
"CONTRACT").
The Contractor hereby acknowledges notice that (i) in accordance with
the terms of a Nuclear Fuel Lease Agreement dated as of November 23, 1993 (the
"FUEL LEASE"), between the Assignor and COMMED FUEL COMPANY, INC., a Delaware
corporation (the "ASSIGNEE"), the Assignor has assigned to the Assignee a part
of the Assignor's rights under the Contract and may hereafter assign to the
Assignee more or all of the Assignor's rights under the Contract, each such
assignment of all or part of the Contract to be effected by the execution and
delivery by the Assignor to the Assignee of an Assignment Agreement
substantially in the form of Annex A hereto (such Assignments, as any of the
same may from time to time be amended, modified or supplemented, being herein
collectively called the "ASSIGNMENTS"), and (ii) pursuant to a Trust Indenture
dated as of November 23, 1993 (said Trust Indenture, as the same may from time
to time be amended, modified or supplemented, being herein called the "TRUST
INDENTURE"), made by the Assignee in favor of Morgan Guaranty Trust Company of
New York (the "INDENTURE TRUSTEE"), for the ratable benefit of the secured
parties named in the Trust Indenture, the Assignee has assigned and granted a
security interest in all rights under the Contract from time to time assigned to
it by Assignor, as collateral security for all of the Secured Obligations (as
that term is defined in the Trust Indenture), as such obligations are described
in the Trust Indenture. The Contractor also acknowledges receipt of a copy of
the Fuel Lease and the Trust Indenture.
The Contractor hereby consents to (i) the assignment by the Assignor
to the Assignee at any time of all, and from time to time of any part, of the
Assignor's right, title and interest in, to and under the Contract and the other
property described in the Assignments, pursuant to one or more Assignments, and
(ii) the assignment and security interest in favor of the Indenture Trustee as
described above. The Contractor further consents to all of the terms and
provisions of the Trust Indenture.
The Contractor agrees that, if requested by either the Assignor or the
Assignee, it will acknowledge in writing each Assignment delivered by the
Assignor to the Assignee; provided,
however, that, neither the lack of notice to nor acknowledgement by the
Contractor of any Assignment shall limit or otherwise affect the validity or
effectiveness of this consent to any and all such Assignments.
The Contractor hereby confirms to the Assignee and the Indenture
Trustee that
(a) all representations, warranties and agreements of the Contractor
under the Contract which relate to the Nuclear Fuel described in
the Assignments shall inure to the benefit of, and shall be
enforceable by, the Assignee or the Indenture Trustee to the same
extent as if originally named in the Contract as the purchaser of
such Nuclear Fuel.
(b) the Contractor understands that pursuant to the Fuel Lease the
Assignee has agreed to lease the Nuclear Fuel described in the
Assignments to the Assignor, and consents to the assignment to the
Assignor, for so long as the Fuel Lease shall be in effect or
until otherwise notified by the Assignee, of the Assignee's rights
under any warranty or agreement made by the Contractor in the
Contract with respect to such Nuclear Fuel, and
(c) [the Contractor is in the business of selling nuclear fuel of the
kind described in the Assignments, and the proposed sale of such
nuclear fuel under the Contract will be in the ordinary course of
business of the Contractor.]/1/
(d) Notwithstanding any provision to the contrary contained in the
Contract, the Contractor agrees that title to any Nuclear Fuel
covered by an Assignment shall pass directly to the Assignee under
the Contract and shall not pass to the Assignor; provided,
however, that the foregoing shall not apply to any Nuclear Fuel
for which title has already passed to Assignor prior to the
execution and delivery of an Assignment.
It is understood that neither the Assignments, the Trust Indenture nor
this Consent and Agreement shall in any way
- ---------------
/1/Bracketed language to be included in respect of Contracts pursuant to
which Lessor first acquires title to Nuclear Fuel (other than any enrichment
agreement). The following language may be used in lieu of the bracketed
language in the case of contracts involving the sale of uranium concentrates:
"The Contractor is in the business of selling concentrates which contain
uranium oxide (U\\3\\O\\g\\), and the proposed sale of such concentrates
under the Contract will be in the ordinary course of business of
the Contractor."
-2-
add to the obligations of the Contractor or the Assignor under the Contract.
This Consent and Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois.
IN WITNESS WHEREOF, the undersigned has caused this Consent and
Agreement to be duly executed and delivered by its duly authorized officer as of
the ___day of____________, ____.
[Name of Contractor]
By:_____________________
Title:
COMMED FUEL COMPANY, INC.
By:______________________________
Title:
COMMONWEALTH EDISON COMPANY
By:________________________________
Title:
-3-
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" shall mean the purchase price of any Nuclear Fuel
owned by the Lessor at the date of the Fuel Lease and leased thereby as
described in Schedule A thereto, and the purchase price paid by the Lessor
pursuant to Section 6 of the Fuel Lease in order to acquire any portion of the
Nuclear Fuel including progress payments, if any, made by Lessor in respect of
Nuclear Fuel, together with costs of mining, milling, conversion, enrichment,
design, fabrication, installation, delivery, redelivery, containerization,
transportation, insuring, processing and any other direct costs with respect to
acquiring, recovering or preparing such portion of the Nuclear Fuel for use or
for management thereof through the Heat Production stage of its Nuclear Fuel
Cycle, and costs with respect to repairs, replacements and renewals or
Restoration of any portion of the Nuclear Fuel but excluding therefrom all
Capitalized Cost of the Lessor with respect thereto. At the option of Lessee,
Acquisition Cost shall also include costs related to storage, Cooling,
Reprocessing and Recycling of the Nuclear Fuel to the extent that storage,
Cooling, Reprocessing and Recycling is available and Lessee elects to have such
Nuclear Fuel reprocessed and remain subject to the Fuel Lease as provided in
Section 10(c) thereof. The purchase price for any part of the Nuclear Fuel
acquired by the Lessor from the Lessee shall include, at Lessee's option, all
payments made by the Lessee to the Manufacturers for such Nuclear Fuel plus all
costs, expenses, and allowances (including allowances for borrowed and other
funds used during construction) which have been incurred, accrued, or made by
Lessee in connection with such Nuclear Fuel and which are properly includible as
a cost of such Nuclear Fuel in Lessee's books of account in accordance with
Lessee's normal accounting practice and applicable regulatory requirements.
"ACT" has the meaning set forth in Section 1.3 of the Trust Indenture.
"ACTIONABLE EVENT" means a Trust Indenture Event of Default, a Credit
Agreement Event of Default or a Lease Event of Default.
"ADDITIONAL CP" means the promissory notes of the Company issued and
sold in the commercial paper market other than the Commercial Paper.
"ADDITIONAL FINANCING" means financing obtained by the Company other
than through the issuance of the Series A Notes, Commercial Paper, the
incurrence of loans under the Original
Credit Agreement or a borrowing from the Lessee evidenced by a Subordinated
Note.
"ADDITIONAL IT NOTES" means the IT Notes issued from time to time
under Section 12.2 of the Trust Indenture.
"ADDITIONAL RENT" is defined in Section 5(d) of the Fuel Lease.
"AFFILIATE" of any Person means any other Person (1) which directly or
indirectly controls, or is controlled by, or is under common control with, such
Person, (2) which owns 5% or more of the Voting Stock of such Person or (3) 5%
or more of the Voting Stock (or in the case of a Person which is not a
corporation, 5% or more of the equity interest) of which is owned by such Person
or a subsidiary. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of Voting Stock, by contract
or otherwise.
"AFFILIATED IT NOTEHOLDERS" means the registered holders of the IT
Notes which are, or which hold for the benefit of, as nominee or otherwise, (i)
the Company, (ii) the Lessee, (iii) an Affiliate of the Company or (iv) an
Affiliate of the Lessee. The Indenture Trustee shall be entitled to rely
conclusively, and shall be fully protected in relying, on the representation of
any registered holder of the IT Notes as to such holder's status as a Non-
Affiliated Noteholder.
"AGENT" means The First National Bank of Chicago and each successor
Administrative Agent (as defined therein) under the Original Credit Agreement,
and each other banking institution which shall act as agent for the Banks which
are parties to a Credit Agreement.
"ASSIGNED AGREEMENT" means a Nuclear Fuel Contract which has been
assigned to the Company in the manner specified in Section 33 of the Fuel Lease
pursuant to a duly executed and delivered Assignment Agreement. The term
Assigned Agreement shall include a Partially Assigned Agreement.
"ASSIGNEE" means each Person to which any part of the Company's rights
or interest under the Fuel Lease shall at the time be assigned, conditionally or
otherwise, by the Company, as contemplated by Section 24 of the Fuel Lease
(including, without limitation, the Indenture Trustee).
"ASSIGNMENT AGREEMENT" means an assignment agreement substantially in
the form of Schedule F to the Fuel Lease.
"ATOMIC ENERGY ACT" shall mean the Atomic Energy Act of 1954, as
amended from time to time.
-2-
"BANK" means each of the "Banks" and "Participants" which is or
becomes a party to the Original Credit Agreement and includes all banking
institutions which shall enter into a Credit Agreement in substitution for or in
addition to the Original Credit Agreement.
"BANK NOTE" has the meaning specified in Section 1.02 of the Original
Credit Agreement.
"BANK OBLIGATIONS" means all present and future obligations and
indebtedness of the Company owing to the Banks under a Credit Agreement,
including the obligation to pay principal of and interest on the loans made
thereunder, the obligation to reimburse any of the Banks for payments made by
the Banks under a Letter of Credit, and the obligation to pay commitment and
Letter of Credit fees, costs, expenses and other charges and amounts from time
to time owed under a Credit Agreement.
"BANKRUPTCY EVENT OF DEFAULT" means (i) an event or occurrence
involving the Company of the nature defined as a Trust Indenture Event of
Default under Section 9.1.9 of the Trust Indenture or as a Credit Agreement
Event of Default under Sections 11.01(e) or (f) of the Original Credit Agreement
or (ii) an event or occurrence involving the Lessee of the nature defined as a
Lease Event of Default under Sections 25(a)(iv) or (v) of the Fuel Lease.
"BASIC DOCUMENTS" means the Fuel Lease, the Note Purchase Agreements,
the Trust Indenture, the Series A Notes, the Original Credit Agreement, any
other Credit Agreement, the Commercial Paper, the Original Letters of Credit,
the Bank Notes, the Depositary Agreement, the Consent and Agreement, the
Lessee's Letter Agreements, the Assigned Agreements, the Assignment Agreements,
the Subordination Agreement, the Subordinated Notes, each Bill of Sale, each
Fuel Schedule, the Dealer Agreement, the DTC letters of representation, the
rating agency letter agreements, the Management Agreement and other agreements
related or incidental thereto, as each of the above may from time to time be in
effect. The Basic Documents shall also include all Additional IT Notes, if any,
issued under and in accordance with the Trust Indenture, the Note Purchase
Agreements relating to such Additional IT Notes, and all notes and instruments
evidencing, and all revolving and other credit agreements relating to, any
Additional Financing, which is incurred by the Company in compliance with the
provisions of Section 6.13(b) of the Trust Indenture.
"BASIC RENT", with respect to a Basic Rent Period, shall mean the sum
of the Quarterly Lease Charge, less Capitalized Monthly Lease Charges, plus the
Burn-up Charge, as shown on a Rent Schedule for such Basic Rent Period.
-3-
"BASIC RENT PAYMENT DATE" means, for any Basic Rent Period, the last
day of the calendar month following such Basic Rent Period, except that, if such
Basic Rent Period terminates on the Termination Settlement Date, the Basic Rent
Payment Date for such Basic Rent Period shall be such Termination Settlement
Date.
"BASIC RENT PERIOD" means each of the periods (a) commencing on, in
the case of the first such period, the Effective Date and, in the case of each
succeeding period, the first day following the immediately preceding Basic Rent
Period and (b) ending on the earliest of (i) the last day of January, April,
July and October or (ii) the Termination Settlement Date.
"BILL OF SALE" means a bill of sale substantially in the form of
either Schedule C or E to the Fuel Lease, pursuant to which title to all or any
portion of the Nuclear Fuel is transferred to the Company or to the Lessee.
"BURN-UP CHARGE" shall mean the amount shown as "Total Burn-up Charge"
on Annex I to the Rent Schedule delivered to the Lessor pursuant to Section 5(b)
of the Fuel Lease in respect of the applicable Basic Rent Payment Date.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a
day on which banks are authorized by law to close in Chicago, Illinois or New
York, New York.
"CALENDAR QUARTER" means a three month period ending on the last day
of any March, June, September or December.
"CAPITALIZED COST" shall mean the sum of (i) all sales, excise, use
and personal property taxes, (ii) all legal, accounting, auditing, engineering,
insurance, financing, printing, reproduction, closing and other normally
capitalizable administrative fees and expenses actually paid or accrued by the
Lessor in connection with any acquisition or ownership of or administration
associated with the Nuclear Fuel or in connection with the transactions
contemplated by the Basic Documents and (iii) Monthly Lease Charges accrued
pursuant to the Fuel Lease which, in the Lessee's sole judgment, are allocable
to the Nuclear Fuel (x) during any stage of its Nuclear Fuel Cycle other than
after initial commencement of Heat Production or (y) during the period beginning
on the Termination Notice Date and ending on the Termination Settlement Date (in
each case as defined in Section 20(b) of the Fuel Lease) if and to the extent
that the Lessee elects to capitalize any such Monthly Lease Charges; provided,
however, that Monthly Lease Charges may be allocated to and included in
Capitalized Cost by the Lessee as set forth above only in an amount not
exceeding the sum of (i) the amount of the credit then capable of being drawn by
the Lessor under a Credit Agreement, all Additional Financings and IT Notes in
effect at the time plus (ii) the amounts available to the Lessor for
disbursement from the Collateral Account.
-4-
"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.
"CAPITALIZED MONTHLY LEASE CHARGES" shall mean Monthly Lease Charges
included in the Capitalized Cost of the Nuclear Fuel.
"CLOSING" means the date upon which the Assignment Agreements (if
any), the Lessee's Letter Agreement, the Consent and Agreement, the Fuel Lease,
the Trust Indenture, the Original Credit Agreement, the Note Purchase
Agreements, the Series A Notes and the Trust Agreement shall be executed and
delivered and the transactions contemplated therein consummated.
"CODE" shall mean the Internal Revenue Code of 1986, as from time to
time amended.
"COLLATERAL" has the meaning set forth in the granting clauses of the
Trust Indenture and includes all property of the Company described in any
Collateral Agreement as comprising part of the Collateral.
"COLLATERAL ACCOUNT" has the meaning set forth in Section 4.1 of the
Trust Indenture.
"COLLATERAL AGREEMENTS" means, collectively, the Trust Indenture, the
Fuel Lease, all Assignment Agreements, and any other assignment, security
agreement or instrument executed and delivered to the Indenture Trustee
hereafter relating to property of the Company which is security for the Secured
Obligations.
"COMMERCIAL PAPER" means the promissory notes of the Company issued
and sold in the commercial paper market which are entitled to the benefit of an
Original Letter of Credit issued pursuant to the Original Credit Agreement.
"COMMERCIAL PAPER ACCOUNT" means the special account maintained by the
Company with the Depositary for the purpose of reimbursing a Bank for LOC
Payments and repaying loans made under a Credit Agreement and includes all sub-
accounts created thereunder.
"COMPANY" means CommEd Fuel Company, Inc., a Delaware corporation.
-5-
"COMPANY REPRESENTATIVE" means any person at the time designated to
act on behalf of the Company by written certificate furnished to the Lessee and
the Indenture Trustee containing the specimen signatures of such persons and
signed on behalf of the Company by its President or any Vice President. Such
certificate may designate an alternate or alternates.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by two Company Representatives and delivered
to a Responsible Officer of the Indenture Trustee.
"CONSENT AND AGREEMENT" means the Consent and Agreement of the Lessee,
dated as of November 23, 1993, as the same may from time to time be amended,
modified or supplemented.
"COOLING" shall mean the stage of the Nuclear Fuel Cycle pursuant to
which Nuclear Fuel is placed in storage following the Heat Production stage of
the Nuclear Fuel Cycle.
"CREDIT" has the meaning specified in Section 1.02 of the Original
Credit Agreement.
"CREDIT AGREEMENT" means (i) the Original Credit Agreement, and (ii)
any credit agreement entered into by the Company in substitution for or in
addition to the Original Credit Agreement which provides for the issuance of
Letters of Credit to support the issuance of Additional CP by the Company and/or
the extension of loans to the Company, as the same is from time to time in
effect, and which comprises an Additional Financing which is incurred in
compliance with the provisions of Sections 6.13(b) and 6.14 of the Trust
Indenture.
"CREDIT AGREEMENT EVENT OF DEFAULT" means any one or more of the
events specified in Section 11.01 of the Original Credit Agreement or a similar
event or events under any other Credit Agreement.
"CREDIT AGREEMENT OUTSTANDINGS" or "OUTSTANDINGS" as of any date means
the sum of (x) the principal amount of the loans outstanding on such date under
the Credit Agreements, (y) the Face Amount of all Commercial Paper and
Additional CP outstanding on such date less the Face Amount of Commercial Paper
and Additional CP which have matured for the payment of which funds are on
deposit in the Note Redemption Account and (z) the amount on such date of all
unreimbursed LOC Payments and Deferred Reimbursements. For purposes of this
definition, "FACE AMOUNT" means the principal amount thereof plus, in the case
of Commercial Paper or Additional CP issued on an interest-bearing basis, all
interest payable thereon to its stated maturity date.
"CREDIT EVENT" has the meaning specified therefor in Section 1.02 of
the Original Credit Agreement.
-6-
"CREDIT EXPOSURE" means (i) with respect to IT Noteholders, the
aggregate principal amount of the IT Notes Outstanding, other than IT Notes
which are held by Affiliated IT Noteholders, and (ii) with respect to the Banks,
the aggregate of their Credit Amounts (as defined in the Credit Agreement).
"DEALER" means Merrill Lynch Money Markets Inc. and/or such other
entity with whom the Company enters into any Dealer Agreement.
"DEALER AGREEMENT" means the Commercial Paper Dealer Agreement dated
as of November 23, 1993, between the Company and Merrill Lynch Money Markets
Inc., and/or such other or further agreements for the distribution and placement
of Commercial Paper or Additional CP as may be entered into by the Company, in
each case as the same may be modified, supplemented or amended from time to
time.
"DEFERRED REIMBURSEMENTS" has the meaning specified in Section 1.02 of
the Original Credit Agreement.
"DEPOSITARY" means the Person which has been appointed by the Company
to act as depositary, issuing agent and paying agent for the Commercial Paper or
Additional CP, and which has entered into a Depositary Agreement with the
Company.
"DEPOSITARY AGREEMENT" means the agreement among the Company and the
Person acting as the Depositary, pursuant to which such Person acts as
depositary, issuing agent and paying agent for the Commercial Paper or
Additional CP.
"DESIGNATED HOLDERS" means, at any time when any action is taken or is
required to be taken by any Secured Party acting as provided in Section 1.3 of
the Trust Indenture, the holders of (i) at least 66-2/3% in principal amount of
all Secured Obligations at the time outstanding, (ii) at least 66-2/3% of the
Credit Agreement Outstandings under each Credit Agreement, (iii) at least
66-2/3% of the Outstanding Series A Notes, and (iv) at least 66-2/3% of the
Outstanding Additional IT Notes, provided, however, that in any determination
pursuant to clause (ii) with respect to any Credit Agreement, the percentage of
Credit Agreement Outstandings, lender commitments or combination thereof
required by the terms of such Credit Agreement for the Banks thereunder to
direct the Agent thereunder to take (or instruct the Indenture Trustee to take)
the action for which a determination of Designated Holders is being made shall
be controlling, so long as such percentage is at least 66-2/3%, and, provided
further, that in any determination pursuant to clause (iii) and clause (iv), IT
Notes that are held by Affiliated IT Noteholders shall be excluded in
determining the percentage of Outstanding IT Notes.
"DISCLOSURE DOCUMENTS" has the meaning specified in Section 10.1 of
the Original Note Purchase Agreements.
-7-
"DISCOUNTED VALUE" means, with respect to any principal amount of any
Series A Note which is to be redeemed or is subject to acceleration, the amount
obtained by discounting all Remaining Scheduled Payments with respect to such
principal amount from their respective scheduled due dates to the date of any
prepayment of such principal amount, in accordance with accepted financial
practice and at a discount factor (applied on a semiannual basis) equal to the
Reinvestment Yield with respect to such principal amount.
"EFFECTIVE DATE" means November 23, 1993.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
from time to time amended.
"ESTIMATED RESIDUAL VALUE" shall mean the salvage value (stated in
dollars) with respect to any portion of Nuclear Fuel after it shall have fully
completed Heat Production. The estimate of residual value shall not affect the
Lessee's obligations with respect to Fuel Management pursuant to Section 9 of
the Fuel Lease.
"EXISTING FUEL COMPANY" shall mean individually CWE Fuel Company
Inc., a Delaware corporation, or Commonwealth Fuel Company II, a Delaware
corporation, and collectively, such companies shall be referred to as the
"EXISTING FUEL COMPANIES."
"FAIR MARKET VALUE" shall be determined by the Lessee in good faith
and in accordance with applicable engineering and accounting standards, if any,
such determination to be evidenced, if and when requested by Lessor, by a
certificate executed by the President or a Vice President or the Treasurer or an
Assistant Treasurer of the Lessee.
"FUEL LEASE" means the Nuclear Fuel Lease Agreement dated as of
November 23, 1993, between the Company, as Lessor, and Commonwealth Edison
Company, as Lessee, as the same may from time to time be amended, modified or
supplemented in accordance with the provisions thereof and of the Trust
Indenture.
"FUEL MANAGEMENT" shall mean the design of, contracting for,
determining the price and terms of acquisition of, management, movement,
removal, disengagement, use, storage and other activities in connection with the
acquisition, utilization, storage and disposal of the Nuclear Fuel, and
sometimes is referred to in the Fuel Lease as "management".
"FUEL SCHEDULE" shall mean an instrument in substantially the form of
Schedule D to the Fuel Lease, pursuant to which Schedule A to the Fuel Lease is
amended in connection with a request by the Lessee for payment with respect to
Nuclear Fuel pursuant to Section 6 of the Fuel Lease or in connection with a
removal or a replacement of Nuclear Fuel pursuant to Sections 10, 18(a) or 19(b)
thereof.
-8-
"GENERATING FACILITY" means any nuclear reactor (except the nuclear
reactor designated as "Dresden Unit 1") located in the State of Illinois in
which Lessee has a majority ownership interest.
"GRANTING CLAUSES" means the portion of the Trust Indenture prior to
Section 1, beginning with the statement of consideration.
"HEAT PRODUCTION" shall mean that stage of the Nuclear Fuel Cycle when
the Nuclear Fuel is loaded into the reactor core of any Generating Facility and
is being consumed to produce heat, pursuant to the process of nuclear fission,
in the production of electric energy.
"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 Fuel Lease or any
transaction pursuant to the Fuel Lease or any right or interest held by virtue
of the Fuel Lease.
"INDEBTEDNESS" means, with respect to the Company, (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 Indebtedness is 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
"INDEBTEDNESS" shall not include deferred taxes.
"INDEBTEDNESS FOR BORROWED MONEY" means all Indebtedness in respect of
borrowed money or the deferred purchase price of property or services.
"INDENTURE TRUSTEE" means the institution designated as such in the
Trust Indenture and its permitted successors.
"INSTITUTIONAL INVESTOR" shall mean any Person that is a "qualified
institutional buyer" as defined in Rule 144A promulgated under the Securities
Act of 1933.
-9-
"INSURANCE REQUIREMENTS" means all terms of any insurance policy or
indemnification agreement covering or applicable to any Nuclear Fuel or
Generating Facilities and all requirements of the issuer of any such policy or
agreement necessary to keep such insurance or agreements in force, and all
orders, rules, regulations and other requirements of the Federal Energy
Regulatory Commission, the Nuclear Regulatory Commission, the National Board of
Fire Underwriters or any other body at any time exercising similar functions
with respect to electric utility properties, which are applicable to or affect
any of the Generating Facilities, any of the Nuclear Fuel or any operation, use
or condition of any thereof.
"INTEREST PAYMENT DATE" means, with respect to the IT Notes, the dates
specified for the payment of interest on the respective IT Notes.
"INVESTMENT" shall mean, with respect to any portion of the Nuclear
Fuel, the sum of (i) the Acquisition Cost for such portion, plus (ii) the
Capitalized Cost for such portion, which has been paid or accrued by the Lessor,
including payments by the Lessor to the Lessee.
"IT NOTEHOLDER" or "HOLDER OF ANY IT NOTE" means any Person in whose
name an IT Note is registered.
"IT NOTES" means the promissory notes issued by the Company from time
to time under and in accordance with the terms, provisions and limitations of
the Trust Indenture, and shall include the Series A Notes and any Additional IT
Notes.
"LEASE DEFAULT" means any of the events specified in Section 25(a) of
the Fuel Lease, whether or not any requirement for notice or lapse of time or
other condition has been satisfied.
"LEASE EVENT OF DEFAULT" has the meaning specified therefor in Section
25(a) of the Fuel Lease.
"LEGAL REQUIREMENTS" means all requirements having the force of law
applicable at any time to any or all of the Generating Facilities, or to the
Lessee as a licensee thereof, any of the Nuclear Fuel, any transaction pursuant
to the Fuel Lease or any right or interest held by the Company or the Lessee
pursuant to the Fuel Lease.
"LESSEE" shall mean Commonwealth Edison Company, an Illinois
corporation, or any successor or successors to its rights and obligations as
Lessee under the Fuel Lease.
"LESSEE REPRESENTATIVE" means any person at the time designated to act
on behalf of the Lessee by a written certificate furnished to the Company and
the Indenture Trustee containing the specimen signatures of such persons and
signed on behalf of the Lessee by any of its officers. Such certificate
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may designate an alternate or alternates. A Lessee Representative may be an
employee or representative of the Lessee.
"LESSEE'S LETTER AGREEMENT" means any letter agreement furnished by
the Lessee in connection with the issuance of any IT Notes by the Company or in
connection with any Credit Agreement, and shall include the "Lessee's Letter
Agreements" referred to in Section 5.2(f) of the Note Purchase Agreements
relating to the Series A Notes and the "Lessee's Letter Agreement to Banks"
delivered in connection with the Original Credit Agreement.
"LESSOR" shall mean CommEd Fuel Company, Inc., a Delaware corporation,
or any successor or successors to its rights and obligations as Lessor under the
Fuel Lease.
"LESSOR'S BILL OF SALE" means an instrument substantially in the form
of Schedule E to the Fuel Lease.
"LETTER OF CREDIT" means (a) an Original Letter of Credit and (b) one
or more letters of credit issued pursuant to any other Credit Agreement which
provide credit support for Additional CP issued by the Company.
"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).
"LOAN" means any Base Rate Loan, CD Rate Loan or Libor Rate Loan made
by the Banks (or any Bank) to the Company pursuant to Article II of the Original
Credit Agreement.
"LOC PAYMENT" means any payment made by a Bank under a Letter of
Credit.
"MANUFACTURER" means (a) any Person which supplies any component of,
or goods or services (including without limitation, enrichment, fabrication,
financing, transportation, storage and processing) in connection with, Nuclear
Fuel at any stage of the Nuclear Fuel Cycle, or any agent or licensee of any
such supplier, (b) any regulated electric company, and (c) any Person with
authority to convey title to nuclear fuel to any regulated electric company.
"MANAGEMENT AGREEMENT" means the Management Agreement dated as of
November 23, 1993 between the Company and Merrill Lynch Money Markets Inc., as
the same may be from time to time be amended, modified, or supplemented.
"MANAGEMENT FEE" means the amount of $50,000 per annum.
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"MAXIMUM OUTSTANDING IT NOTES LIMIT" has the meaning specified
therefor in Section 12.3(B)(ii) of the Trust Indenture.
"MONTHLY LEASE CHARGE" shall mean for any
calendar month during the term of the Fuel Lease:
(i) an accrual for such month of (1) all interest expense and all
amortization of debt discount of the Lessor (whether or not paid),
with respect to all outstanding Commercial Paper, IT Notes and other
Indebtedness or liability incurred or owed by the Lessor pursuant to
the Basic Documents and (2) all commitment, standby letter of credit
facility and other fees, costs and expenses (whether or not paid), if
any, incurred or owed by the Lessor pursuant to the Basic Documents;
plus
(ii) an accrual for such month with respect to all amounts paid or
due and payable by the Lessor with respect to the transactions
contemplated by the Basic Documents for fees and expenses for
depositaries or issuing agents' expenses, Dealers for the Commercial
Paper and/or Additional CP, and Placement Agents for the IT Notes;
plus
(iii) an accrual for such month of a management charge composed of
the cost recovery for all administrative, accounting and all other
management services including the Management Fee (other than fees,
expenses and costs referred to in the foregoing clauses (i) and (ii),
charges for auditing by an independent certified public accounting
firm and other professional fees and legal fees and expenses) for the
twelve-month period as projected by the Lessor and provided to and
reviewed by the Lessee beginning each January 1, adjusted annually for
the difference between the Lessor's projected management fee and the
amount of such costs actually incurred for the preceding twelve-month
period, divided by twelve; and minus
(iv) Lessor's cash income for such month on investment of moneys
received in connection with the transactions contemplated by the Basic
Documents, other than moneys received pursuant to (iii) above.
Any figure used in the computation of any component of the Monthly Lease Charge
shall be stated with sufficient accuracy to enable calculation of the Monthly
Lease Charge to the nearest penny. No accrual, charge or other item which would
constitute a part of the Acquisition Cost shall be included in the computation
of the Monthly Lease Charge.
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"MORTGAGE" shall mean that certain Mortgage of the Lessee to
Continental Bank, National Association, and M.J. Kruger, as trustees, dated as
of July 1, 1923, as the same has been and may from time to time be amended or
supplemented and in effect.
"MWD FACTOR" shall mean a factor determined by dividing (i) the Net
Investment Value for an assembly of Nuclear Fuel by (ii) the estimated amount of
heat remaining, measured in thermal megawatt days, that such assembly will
produce during Heat Production. The MWD Factor shall be carried to such accuracy
as needed to calculate the Basic Rent to the nearest penny.
"MWD OUTPUT" means the amount of heat, measured in thermal megawatt
days, that an assembly produced during the period in question. .
"NET INVESTMENT VALUE" or "N.I.V." shall mean, with respect to any
portion of the Nuclear Fuel (excluding any portion of the Nuclear Fuel loaned)
at any time leased under the Fuel Lease, the excess of the amount of the
Investment in such portion over the aggregate amount of Burn-up Charges
theretofore paid by the Lessee to the Lessor in respect of such portion.
"NON-AFFILIATED IT NOTEHOLDER" means the registered holders of the IT
Notes, other than any holder which is an Affiliated IT Noteholder.
"NOTE PURCHASE AGREEMENTS" means (i) the several but identical (except
for the name of the purchaser) Note Purchase Agreements, each dated as of
November 23, 1993, relating to the issue and sale by the Company of the Series A
Notes, as from time to time in effect (the "ORIGINAL NOTE PURCHASE AGREEMENTS"),
and (ii) any similar agreements hereafter entered into by the Company relating
to the purchase and sale of Additional IT Notes pursuant to the Trust Indenture
or a supplemental indenture thereto.
"NOTE PURCHASE AGREEMENT OBLIGATIONS" means the principal of, premium,
if any, and interest on the Outstanding IT Notes and all other costs, fees and
expenses and amounts required to be paid by the Lessor on or with respect to the
Outstanding IT Notes or under the Note Purchase Agreements relating thereto.
"NOTE REDEMPTION ACCOUNT" means the special account maintained by the
Depositary for the purpose of effecting payment of Commercial Paper or
Additional CP under the Depositary Agreement and includes all sub-accounts
created thereunder.
"NOTICE OF AN ACTIONABLE EVENT" means (i) a certificate of any of the
IT Noteholders that an Actionable Event has occurred, (ii) a certificate of the
Agent that an Actionable Event has occurred, or (iii) whether or not any
certificate or notice thereof shall have been delivered to the Indenture
Trustee, a Bankruptcy Event of Default. A Notice of an
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Actionable Event has been "GIVEN" (a) in the case of a Bankruptcy Event of
Default, when such Bankruptcy Event of Default occurs or (b) in the case of any
other Notice of an Actionable Event, when the certificate referred to in either
clause (i) or clause (ii) of the immediately preceding sentence has actually
been received by a Responsible Officer of the Indenture Trustee. A Notice of an
Actionable Event has been "RESCINDED" when, after a Notice of an Actionable
Event (other than a Bankruptcy Event of Default) has been given, the Person
giving such Notice has subsequently delivered to a Responsible Officer of the
Indenture Trustee a certificate stating that there exists no Actionable Event or
when, after a Bankruptcy Event of Default, such Bankruptcy Event of Default is
no longer continuing and a Responsible Officer of the Indenture Trustee has
received a certificate to that effect from the Designated Holders. A Notice of
an Actionable Event is "OUTSTANDING" at all times after such Notice of an
Actionable Event has been given until such time, if any, as such Notice of an
Actionable Event has been rescinded.
"NUCLEAR FUEL" means the separate assemblies of nuclear fuel and
materials and components thereof or portions of separate assemblies more
particularly described in Schedule A to the Fuel Lease, as amended from time to
time by means of a Fuel Schedule, in the respective forms or interests
(including undivided or partial ownership interests) therein in which such
assemblies and components exist at each stage of the Nuclear Fuel Cycle,
consisting of substances (excluding unmined ores) and equipment which, when
loaded into a nuclear reactor, are intended to produce heat through the fission
process, together with all attachments, accessories, parts and additions and all
improvements and repairs thereto, and all replacements thereof, substitutions
therefor and additions thereto; provided, however, that the term Nuclear Fuel
shall not include any assemblies, components or other items purchased and paid
for by the Lessee pursuant to the provisions of Section 10(b) of the Fuel Lease
or loaned to any one or more Nuclear Fuel Users pursuant to the provisions of
Section 10(e) of the Fuel Lease.
"NUCLEAR FUEL 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 Fuel or any service in
connection with the Nuclear Fuel and assigned to the Company pursuant to the
Fuel Lease as an Assigned Agreement.
"NUCLEAR FUEL CYCLE" shall mean the various stages herein defined in
the process, whether physical or chemical, by which the component parts of the
Nuclear Fuel are mined, milled, converted, processed, enriched, designed,
fabricated into assemblies utilizable for Heat Production, loaded or installed
into a reactor core, utilized, disengaged, cooled, stored and/or reprocessed,
together with all incidental processes and engineering with respect to the
Nuclear Fuel at any stage of such Nuclear Fuel Cycle.
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"NUCLEAR FUEL USER" means any public utility company; any financing
vehicle of any public utility; any Manufacturer; or any Person in the business
of brokering Nuclear Fuel.
"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" has the same meaning as the term Secured Obligations.
"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 Indenture Trustee, 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 Company, the Indenture Trustee or the Lessee.
"ORIGINAL BILLS OF SALE" shall mean the bills of sale, dated as of the
date of the Closing, for nuclear fuel transferred from CWE Fuel Company Inc. and
Commonwealth Fuel Company II to the Lessor.
"ORIGINAL CREDIT AGREEMENT" shall mean the Credit Agreement dated as
of November 23, 1993, among the Lessor, The First National Bank of Chicago,
Canadian Imperial Bank of Commerce, New York Agency and Credit Suisse, New York
Branch, and the other Banks which are, or become, parties thereto, as the same
may be modified, supplemented or amended from time to time.
"ORIGINAL LETTER OF CREDIT" shall mean each letter of credit,
substantially in the form of Exhibit C to the Original Credit Agreement, issued
by a Bank under the Original Credit Agreement or any letter of credit issued
thereunder in substitution therefor.
"OUTSTANDING", when used with reference to IT Notes, or "IT NOTES
OUTSTANDING," shall mean all IT Notes which have been authenticated and
delivered by the Indenture Trustee under the Trust Indenture excluding (i) each
of the following:
(a) IT Notes cancelled or purchased by the Lessor or delivered
to the Indenture Trustee for cancellation;
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(b) IT Notes that have become due (at maturity or on redemption,
acceleration or otherwise) and for the payment, including premium, if
any, and interest accrued to the due date, of which sufficient moneys
are held by the Indenture Trustee; and
(c) IT Notes in lieu of which others have been authenticated under
Section 2.5 of the Trust Indenture (relating to registration and
exchange of IT Notes) or Section 2.6 of the Trust Indenture (relating
to mutilated, lost, stolen, or destroyed IT Notes);
and (ii) in connection with any distribution of proceeds or payments in respect
of any sale or other disposition of any Collateral under any of the Collateral
Agreements or upon enforcement of any of the remedies provided by the Collateral
Agreements, IT Notes held by Affiliated IT Noteholders, except after the prior
payment in full of all IT Notes not held by Affiliated IT Noteholders.
"OUTSTANDING IT NOTE INDEBTEDNESS" means, at any particular time, the
aggregate principal balance remaining unpaid on the IT Notes then issued and
Outstanding.
"PARTIALLY ASSIGNED AGREEMENT" means a Nuclear Fuel Contract which has
been assigned, in part but not in full, to the Company in the manner specified
in Section 33 of the Fuel Lease, pursuant to a duly executed and delivered
Assignment Agreement.
"PARTICIPANT" shall have the meaning set forth in Section 1.02 of
the Original Credit Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation, created by
Section 4002(a) of ERISA and any successor thereto.
"PERMITTED FUEL LOAN" has the meaning specified in Section 10(e)
of the Fuel Lease.
"PERMITTED LIENS" means the Liens permitted by Section 15 of the Fuel
Lease, except that as used in the Indenture, the Note Purchase Agreements or any
other Basic Documents (other than the Fuel Lease), Permitted Liens do not
include any Lien created by the Lessor other than the Lien of the Indenture and
the Collateral Agreements.
"PERSON" means any individual, partnership, joint venture, limited
liability company, corporation, trust, unincorporated organization or other
business entity or any government or any political subdivision or agency
thereof.
"PLACEMENT AGENT" means Merrill Lynch & Co., Inc., as Placement Agent
for the Series A Notes, and any other person or entity subsequently acting as
Placement Agent for any Additional IT Notes issued as provided in the Trust
Indenture.
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"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.
"PRINCIPAL PAYMENT DATE" means such dates, if any, as are specified in
any IT Note and dates specified in any Note Purchase Agreement or the Trust
Indenture, as dates prior to maturity upon which principal payments shall be
made.
"PUBLIC UTILITY HOLDING COMPANY ACT" means the Public Utility Holding
Company Act of 1935, as from time to time amended.
"QUALIFIED INSTITUTION" means either a commercial bank organized under
the laws of, and doing business in, the United States of America or in any State
thereof, which has a combined capital, surplus and undivided profits of at least
$300,000,000 having trust powers.
"QUARTERLY LEASE CHARGE" shall mean the sum, for any Basic Rent
Period, of the aggregate of the Monthly Lease Charges incurred with respect to
all portions of the Nuclear Fuel subject to the Fuel Lease at any time during
such period.
"RECYCLING" shall mean the use of uranium and/or plutonium or any
other material recovered from Nuclear Fuel in the preparation of new Nuclear
Fuel.
"REINVESTMENT YIELD" means, with respect to any principal amount of
any Series A Note which is to be redeemed or is subject to acceleration, the sum
of 50 basis points plus the yield to maturity implied by (i) the yields
reported, as of 10:00 A.M. (New York City time) on the Business Day next
preceding the date of any prepayment of such principal amount, on the display
designated as "Page 678" on the Telerate Service (or such other display as may
replace Page 678 on the Telerate Service) for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average Life of such
principal amount as of the date of any prepayment of such principal amount, or
(ii) if such yields shall not be reported as of such time or the yields reported
as of such time shall not be ascertainable, the Treasury Constant Maturity
Series yields reported, for the latest day for which such yields shall have been
so reported as of the Business Day next preceding the date of prepayment with
respect to such principal amount, in Federal Reserve Statistical Release H.15
(519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Remaining Average
Life of such principal amount as of the date of prepayment of such principal
amount. Such implied yield shall be determined, if necessary, by (a) converting
U.S. Treasury bill quotations to bond-equivalent yields in accordance with
accepted financial practice and (b) interpolating linearly between reported
yields.
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"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.
"REMAINING AVERAGE LIFE" means, with respect to any principal amount
of any Series A Note which is to be redeemed or is subject to acceleration, the
number of years (calculated to the nearest one-twelfth year) obtained by
dividing (i) such principal amount into (ii) the sum of the products obtained by
multiplying (a) each Remaining Scheduled Payment of such principal amount (but
not of interest thereon) by (b) the number of years (calculated to the nearest
one-twelfth year) which will elapse between the date of any prepayment with
respect to such principal amount and the scheduled due date of such Remaining
Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to any principal
amount of any Series A Note which is to be redeemed or is subject to
acceleration, all payments of such principal amount and interest thereon that
would be due on or after any prepayment with respect to such principal amount if
no payment of such principal amount were made prior to its scheduled due date.
"RENT SCHEDULE" shall mean an instrument in substantially the form of
Schedule B to the Fuel Lease, used for the purpose of setting forth the N.I.V.,
Burn-up Charges and Monthly Lease Charges for the Nuclear Fuel.
"REPORTABLE EVENT" means any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder.
"REPROCESSING" shall mean the stage of the Nuclear Fuel Cycle in which
the Nuclear Fuel, after it has completed Heat Production and Cooling, is
separated into recovered forms of uranium, plutonium and other radioactive
materials, or any process or processes used in place thereof.
"RESPONSIBLE OFFICER" means a duly elected or appointed, authorized,
and acting officer, agent or representative of the Person acting. "RESPONSIBLE
OFFICER," when used with respect to the Indenture Trustee, means any officer of
the Indenture Trustee assigned by it to administer its corporate trust matters.
"RESTORATION" shall mean the repair, reconstruction or replacement of
all or any portion of the Nuclear Fuel which has been damaged, destroyed, lost,
stolen or rendered unusable or which has been affected by a Taking, as nearly as
possible to the value, condition and character of such portion, and in its
location, immediately prior to such damage, destruction, loss, theft or Taking,
or the replacement of any assembly of the Nuclear Fuel so damaged, lost, stolen,
destroyed or affected by a Taking with Nuclear Fuel having an equivalent value
and Heat
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Production capacity, in any case with only such alterations and additions as may
be made at the Lessee's election and as will not diminish the fair market value
or usefulness of the Nuclear Fuel so repaired, reconstructed or replaced.
"SECURED OBLIGATIONS" means:
(a) all Note Purchase Agreement Obligations,
(b) all Bank Obligations, and
(c) all obligations of the Company in respect of any Additional
Financing which is incurred in compliance with the provisions of
Section 6.13(b) of the Trust Indenture.
"SECURED PARTIES" means (i) the holders from time to time of the Bank
Obligations, (ii) the holders from time to time of the Note Purchase Agreement
Obligations, and (iii) the lenders under any Additional Financing which is
incurred in compliance with the provisions of Section 6.13(b) of the Trust
Indenture.
"SECURITY" shall have the same meaning as in Section 2(1) of the
Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as from time to
time amended.
"SERIES A NOTEHOLDER" means any Person in whose name a Series A Note
is registered.
"SERIES A NOTE PURCHASER" means the Purchasers as defined in Section
2.1 of the Original Note Purchase Agreements.
"SERIES A NOTES" means the Notes issued pursuant to and referred to as
such in Sections 2.1 and 12.1 of the Trust Indenture.
"STORAGE FACILITY" shall mean any facility which is used for the
purpose of storing the Nuclear Fuel during any stage of the Nuclear Fuel Cycle.
"SUBORDINATED NOTE" means a promissory note of the Company to the
Lessee issued pursuant to and containing the legend and provisions required by
the Subordination Agreement.
"SUBORDINATION AGREEMENT" means the Subordination Agreement dated as
of November 23, 1993 among the Company, the Lessee and the Indenture Trustee.
"TAKING" means a loss of the title to, ownership of, or use and/or
possession of Nuclear Fuel or any Generating Facility, or any interest therein
or right accruing thereto, as the result of or in lieu or in anticipation of the
exercise of the rights of
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condemnation or eminent domain pursuant to any law, general or special, or by
reason of the temporary requisition of the use of Nuclear Fuel or any Generating
Facility by any governmental authority, civil or military.
"TERMINATION EVENT" has the meaning specified in Section 20(a) of the
Fuel Lease.
"TERMINATION NOTICE DATE" is defined in Section 20(b) of the Fuel
Lease.
"TERMINATION RENT" shall mean an amount which when added to the Net
Investment Value then payable by the Lessee pursuant to Section 20(b) or Section
25(b) of the Fuel Lease, as the case may be, together with funds available to
the Lessor from the Collateral Account, will be sufficient to enable the Lessor
(i) to retire, pursuant to the terms of the Basic Documents, all of the Lessor's
then outstanding obligations under (A) all Note Purchase Agreements, including
all IT Notes issued pursuant thereto, (B) each Credit Agreement, including all
Commercial Paper and Bank Notes issued pursuant thereto, (C) all Additional CP,
and (D) all Additional Financings, (ii) to pay all charges, premiums and fees
owed to all holders of IT Notes under the Note Purchase Agreements applicable
thereto and the Banks under a Credit Agreement and to any Assignees thereof and
(iii) 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 in Section
20(b) of the Fuel Lease.
"TRUST INDENTURE" or "INDENTURE" means the Trust Indenture dated as of
November 23, 1993, between the Lessor and the Indenture Trustee, as the same may
from time to time be amended, modified or supplemented by one or more
supplemental indentures or other written instruments entered into by the Company
and the Indenture Trustee pursuant to the terms of Section 8, 11 or 16 of the
Trust Indenture.
"TRUST INDENTURE DEFAULT" means any of the events specified in Section
9.1 of the Trust Indenture, whether or not any requirement for notice or lapse
of time or other condition has been satisfied.
"TRUST INDENTURE EVENT OF DEFAULT" has the meaning specified in
Section 9.1 of the Trust Indenture.
"UNAVOIDABLE DELAYS" shall mean delays due to causes not reasonably
within the Lessee's control, including but not limited to, acts of civil or
military authority (including courts), acts of God, war, riot, insurrection or
sit-ins, any act, delay or failure to act on the part of any governmental
authority (federal, state or local), blockages, embargoes,
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sabotage, epidemics, fires, floods, storms, strikes, work stoppages, or other
labor difficulties, railroad car, barge or truck shortages, wrecks, delays in
transportation, breakdowns in equipment or machinery including any component of
Lessee's transmission or generating system or any other failure or delay beyond
Lessee's reasonable control provided that none of the foregoing causes shall be
deemed beyond its reasonable control of the Lessee unless Lessee shall have made
reasonable efforts and exercised due diligence to remove such cause, and
provided further that lack of funds shall not be deemed a cause beyond the
reasonable control of Lessee.
"VOTING STOCK" shall means Securities, the holders of which are
ordinarily, in the absence of contingencies, entitled to elect the corporate
directors (or Persons performing similar functions).
"YIELD-MAINTENANCE PREMIUM" means, with respect to any Series A Note,
a premium equal to the excess, if any, of the Discounted Value of such principal
amount of such Series A Note over the sum of (i) such principal amount plus (ii)
interest accrued thereon to any prepayment with respect to such principal
amount. The Yield-Maintenance Premium shall in no event be less than zero.
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