Exhibit 10.34
MASTER TRUST AGREEMENT
RESERVE FUNDS
FOR
MILLSTONE 3 NUCLEAR UNIT DECOMMISSIONING COSTS
This MASTER TRUST AGREEMENT, dated as of April 23, 1986, between THE
CONNECTICUT LIGHT AND POWER COMPANY, a Connecticut corporation having its
principal office in Berlin, Connecticut and WESTERN MASSACHUSETTS ELECTRIC
COMPANY, a Massachusetts corporation having its principal office in West
Springfield, Massachusetts (hereinafter called "Millstone 3 Lead
Participants"), and COLONIAL BANK, a banking corporation having its principal
office in Waterbury, Connecticut (together with its successor or successors,
hereinafter called the "Trustee").
WHEREAS, The Connecticut Light and Power Company; Western Massachusetts
Electric Company; City of Burlington, Vermont; Central Maine Power Company;
Central Vermont Public Service Corporation; Chicopee Municipal Lighting
Plant; Connecticut Municipal Electric Energy Cooperative; Fitchburg Gas and
Electric Light Company; Village of Lyndonville Electric Department;
Massachusetts Municipal Wholesale Electric Company; Montaup Electric Company;
New England Power Company; Public Service Company of New Hampshire; The
United Illuminating Company; and Vermont Electric Generation and Transmission
Cooperative, Inc. (collectively the "Millstone 3 Participants") are the joint
owners and licensees of a nuclear electric generating unit known as the
Millstone 3 nuclear unit; and,
WHEREAS, the Millstone 3 nuclear unit is currently operated pursuant to an
Operating License, No. NPF-49, dated January 31, 1986, as amended issued in
Docket No. 50-423 by the Nuclear Regulatory Commission ("NRC"), which
Operating Licensing by its terms expires on November 25, 2025; and
WHEREAS, rules and regulations of the NRC impose upon each licensee the
responsibility for payment of the costs of permanent shutdown of the
Millstone 3 nuclear unit and maintenance of such facility in a safe condition
after said shutdown; and
WHEREAS, the Millstone 3 Participants are parties to an agreement entitled
"Sharing Agreement - 1979 Connecticut Nuclear Unit," made as of September 1,
1973, as amended by amendments dated as of August 1, 1974, December 15, 1975,
and April 1, 1986 (said agreement, as it may be amended, being called the
"Sharing Agreement"); and
WHEREAS, Section 12A of the Sharing Agreement obligates each of the Millstone
3 Participants to pay the "Decommissioning Costs" (as that term is defined in
Section 12A of the Sharing Agreement) related to the Millstone 3 nuclear
unit, and provides that such payments may be held by an independent trust or
trusts as determined by the Millstone 3 Lead Participants; and
WHEREAS, the Millstone 3 Lead Participants desire to make provision for
payment of the decommissioning costs of the Millstone 3 nuclear unit in
accordance with the provisions of a decommissioning finance plan approved by
the Connecticut Department of Public Utility Control ("DPUC") pursuant to
Sections 16-19m through 16-19p of the Connecticut General Statutes; and
WHEREAS, the Millstone 3 Lead Participants desire to establish independent
trusts to comply with the decommissioning financing plan approved by the DPUC
and to assure the financial ability of the Millstone 3 Participants to meet
their obligations to the NRC, other governmental bodies, and the general
public in connection with decommissioning the Millstone 3 nuclear unit, such
trusts to hold all payments made to them and any earnings thereon solely for
the purpose of meeting such decommissioning expenses and only thereafter for
the benefit of the Millstone 3 Participants; and
WHEREAS, certain of such trusts are being established to comply with the
requirements for nuclear decommissioning trust funds set forth in Section
468A of the Internal Revenue Code of 1954, as amended (the "Code"); and
WHEREAS, all conditions and requirements necessary to make this Master Trust
Agreement a valid and legal instrument, in accordance with its terms and for
the purposes herein expressed, have been performed and fulfilled and the
execution and delivery hereof have been duly authorized.
NOW, THEREFORE, in consideration of the premises and of the sum of One Dollar
duly paid to the Trustee by the Millstone 3 Lead Participants and of other
good and valuable considerations, the receipt whereof is hereby acknowledged,
and for the purposes of establishing the trusts and securing the faithful
performance and observance of the convenants and conditions hereinafter set
forth, the Millstone 3 Lead Participants have executed and delivered this
Master Trust Agreement to the Trustee and said Trustee does by these presents
agree, on behalf of itself and its successor or successors in trust, to hold
all property and rights conveyed to it or them pursuant hereto upon the
trusts and subject to the conditions herein set forth, it is hereby
convenanted, declared and agreed, upon the trusts and for the purposes
aforesaid, as set forth in the following covenants, agreements, conditions
and provisions, viz.:
ARTICLE I
Definitions
Section 1.01. Defined Terms. For all purposes of this Master Trust
Agreement, unless the context otherwise specifies or requires:
A. "Millstone 3 Participants" shall mean The Connecticut Light and Power
Company; Western Massachusetts Electric Company; City of Burlington, Vermont;
Central Maine Power Company; Central Vermont Public Service Corporation;
Chicopee Municipal Lighting Plant; Connecticut Municipal Electric Energy
Cooperative; Fitchburg Gas and Electric Light Company; Village of Lyndonville
Electric Department; Massachusetts Municipal Wholesale Electric Company;
Montaup Electric Company; New England Power Company; Public Service Company
of New Hampshire; The United Illuminating Company; Vermont Electric
Generation and Transmission Cooperative, Inc., and such other entities as may
hereafter become joint owners of the Unit pursuant to the Sharing Agreement.
"Millstone 3 Participant" or "Participant" shall mean one of the Millstone 3
Participants.
B. "Unit" shall mean the nuclear electric generating unit and the land
presently owned by the Millstone 3 Participants and located at Waterford,
Connecticut, known as the Millstone 3 nuclear unit, as it shall from time to
time exist, together with such structures, components and equipment now or
hereafter associated therewith which become subject to decommissioning rules,
regulations or orders of the NRC.
C. "Operating License" shall mean Operating License No. NPF-49, dated
January 31, 1986, as heretofore or hereafter amended, originally issued in
Docket No. 50-423 by the NRC.
D. "Trustee" shall mean Colonial Bank, and its successors which shall
succeed to its authorities and duties in the manner prescribed in Section
6.04.
E. "Officers' Certificate" shall mean a certificate delivered to the Trustee
and signed by the President (or a Vice President) and the Treasurer (or an
Assistant Treasurer) of either of the Millstone 3 Lead Participants or of
Northeast Nuclear Energy Company, agent for the Millstone 3 Participants.
F. "Nuclear Regulatory Commission" or "NRC" shall mean the United States
Nuclear Regulatory Commission or any governmental agency or agencies
succeeding to its authority.
G. "Decommissioning Costs" shall mean all costs and expenses related to
decommissioning and removing the Unit from service and maintaining and
restoring the Unit's site as more fully defined in Section 12A of the Sharing
Agreement.
ARTICLE II
Identification, Nature and Duration of the Trusts
Section 2.01. Identification of Trusts. The trusts established by this
Master Trust Agreement shall be named collectively the "Millstone 3
Decommissioning Trusts," and the trusts shall be individually named as
follows:
The Connecticut Light and Power Company Trust A
The Connecticut Light and Power Company Trust B
Western Massachusetts Electric Company Trust A
Western Massachusetts Electric Company Trust B
City of Burlington, Vermont Trust A
City of Burlington, Vermont Trust B
Central Maine Power Company Trust A
Central Maine Power Company Trust B
Central Vermont Public Service Corporation Trust A
Central Vermont Public Service Corporation Trust B
Chicopee Municipal Lighting Plant Trust A
Chicopee Municipal Lighting Plant Trust B
Connecticut Municipal Electric Energy Cooperative Trust A
Connecticut Municipal Electric Energy Cooperative Trust B
Fitchburg Gas and Electric Light Company Trust A
Fitchburg Gas and Electric Light Company Trust B
Village of Lyndonville Electric Department Trust A
Village of Lyndonville Electric Department Trust B
Massachusetts Municipal Wholesale Electric Company Trust A
Massachusetts Municipal Wholesale Electric Company Trust B
Montaup Electric Company Trust A
Montaup Electric Company Trust B
New England Power Company Trust A
New England Power Company Trust B
Public Service Company of New Hampshire Trust A
Public Service Company of New Hampshire Trust B
The United Illuminating Company Trust A
The United Illuminating Company Trust B
Vermont Electric Generation and Transmission Cooperative, Inc. Trust A
Vermont Electric Generation and Transmission Cooperative, Inc. Trust B
Each of the trusts identified above shall be established on behalf of the
named Millstone 3 Participant, which Participant shall be the beneficial
owner of the property in each such trust.
Each of the trusts identified above as "Trust A" shall be established as a
nuclear decommissioning trust fund under Section 468A of the Code.
In addition to their rights to amend this Master Trust Agreement set forth in
Section 2.03, the Millstone 3 Lead Participants shall have the right to add
trusts to those identified above in the event additional entities become
obligated by the Sharing Agreement to make payment of a portion of the
Decommissioning Costs of the Unit. The Millstone 3 Lead Participants shall
also have the right to add additional trusts in the names of one or more of
the Millstone 3 Participants if such additional trusts are required to comply
with any law, order, rule or regulation of any governmental body or agency.
Section 2.02. Nature and Purpose. The Millstone 3 Decommissioning Trusts
are intended to assure provision for payment of all, or as great a portion as
possible, of the Decommissioning Costs of the Unit following the final
cessation of its commercial operation. Nothing in this Master Trust
Agreement shall be interpreted to impose any obligation upon the Trustee, or
relieve the Millstone 3 Participants of any obligation, in the event that the
moneys held in the Millstone 3 Decommissioning Trusts are insufficient to
make full payment of the Decommissioning Costs of the Unit or any other costs
or expenses payable pursuant to this Master Trust Agreement.
The Millstone 3 Decommissioning Trusts will be independent of the Millstone 3
Participants, and will constitute vehicles which will hold and disburse, in
accordance with the provisions hereof, moneys collected from the Millstone 3
Participants and dedicated to the purpose of defraying the Decommissioning
Costs of the Unit. If, after completion of the decommissioning process for
the Unit, it is determined that the excess moneys may have been collected or
accumulated in one or more trusts pursuant to this Master Trust Agreement,
any such excess shall be distributed to or for the benefit of the Millstone 3
Participants pursuant to Article VII hereof.
Section 2.03. Duration: Amendment. The term of the within trusts shall
extend until the earliest of: (1) the exhaustion of all moneys in the trusts
at a time when the Millstone 3 Participants are under no further obligation
to make deposits under Section 4.01 hereof, or (2) the completion of the
decommissioning process for the Unit, or other action or order of the NRC or
any successor agency having similar effect, or (3) notification of the
Trustee by the Millstone 3 Lead Participants of their decision to have any or
all of these trusts merged into substantially equivalent trusts and the
transfer of all the moneys in the trusts to such successor trusts; provided,
however, that any such transfer shall not change the identification of any
trust or the beneficial interest of each Participant in the trusts in its
name. It is recognized that, depending upon the amounts accumulated in the
trusts and the method of methods of decommissioning of the Unit authorized by
the NRC and other governmental agencies having jurisdiction, the trusts may
extend for an indefinite period.
The trusts are irrevocable by the Millstone 3 Lead Participants or the
Millstone 3 Participants; provided, however, that the Millstone 3 Lead
Participants may amend this Master Trust Agreement in order to comply with
any law, order, rule or regulation of any governmental body or agency having
jurisdiction over (i) the decommissioning of the Unit, (ii) rates for utility
service received by the Millstone 3 Participants, (iii) taxes paid by the
Millstone 3 Participants, or (iv) the trusts created by this Master Trust
Agreement; subject, however, to the right of the Trustee to decline to enter
into any such amendment if, in its opinion, such amendment may not afford
adequate protection to the Trustee when the same shall become operative, and
provided that no such amendment shall disqualify any Trust A as a "Nuclear
Decommissioning Trust Fund" under Section 468A of the Code.
ARTICLE III
Particular Representations and Convenants of
the Millstone 3 Lead Participants
Section 3.01. Corporate Rights and Franchises. Except as otherwise
specifically permitted by this Master Trust Agreement, the Millstone 3
Participants are obligated by the Sharing Agreement to do or cause to be done
all things necessary to preserve, extend and keep in fully force and effect
those rights and franchises which related to performance of their obligations
under this Master Trust Agreement.
Section 3.02. Unit Licenses. At the time of the execution and delivery of
this instrument, the Millstone 3 Participants and Northeast Nuclear Energy
Company, as licensees under the Operating License applicable to the Unit, are
subject to the authority of the NRC. The Sharing Agreement obligates the
Millstone 3 Participants to obtain and thereafter maintain, to the extent
within their capacity, in full force and effect, all licenses and other
public authorizations, necessary or required for the operation of the Unit to
the extent the Millstone 3 Participants or any of them continue such
operation, for the decommissioning of the Unit, and for subsequent possession
and surveillance of the site.
Section 3.03. Further Instruments. The Millstone 3 Lead Participants will
execute and deliver such further instruments and do such further acts as the
Millstone 3 Lead Participants consider necessary or proper to carry out more
effectually the purposes of this Master Trust Agreement or to transfer to any
successor trustee or trustees the estate, powers, instruments and moneys held
in trust hereunder.
Section 3.04. Appointment of Successor Trustee. Whenever necessary to avoid
or fill vacancy in the office of Trustee, the Millstone 3 Lead Participants
will, in the manner provided in Section 6.04, appoint a Trustee so that there
shall at all times be a Trustee hereunder which is eligible and qualified in
accordance with the provisions of Section 6.02.
ARTICLE IV
Decommissioning Trust Funds
Section 4.01. Deposits to Decommissioning Trusts. All moneys deposited with
the Trustee pursuant to the provisions hereof, together with income earned
thereon, shall be held by the Trustee upon the trusts hereof. Each of the
Millstone 3 Decommissioning Trusts is held for the same purposes, whether
such trust is identified as "Trust A" or "Trust B," and each Participant
shall instruct the Trustee in writing to deposit its payments in either the
Trust A or Trust B established in that Participant's name. Each Participant
may also elect to instruct the Trustee to transfer moneys between the Trust A
and the Trust B established in that Participant's name, subject to the
provisions hereof and such reasonable procedures as the Trustee may
prescribe.
In addition to the minimum Decommissioning Reserve Fund payments required to
be made pursuant to the Sharing Agreement, each Millstone 3 Participant may
deposit with the Trustee additional moneys to be held in one or more of the
trusts, pursuant to instructions to the Trustee which shall accompany such
deposits, established in such Participant's name hereunder.
No deposit shall be made in any Trust A which a Millstone 3 Participant has
elected to be treated as a nuclear decommissioning trust fund under Section
468A of the Code in excess of the amount which is allowable to such
Participant as a deduction under said Section 468A. Each Participant shall
be solely responsible for determining whether any deposit or transfer of
funds made by such Participant hereunder qualifies for a deduction under
Section 468A of the Code and, if so, the amount of such deposit or transfer
that is so deductible. Neither the Trustee nor the Millstone 3 Lead
Participants shall have any responsibility for reviewing or confirming any
determination made by a Participant with respect to the tax treatment of any
deposit or transfer of funds made by a Participant hereunder.
Each of the Millstone 3 Participants is obligated by Section 12A of the
Sharing Agreement to make payment of moneys to be deposited into the trusts
created by this Master Trust Agreement in accordance with that Section so
long as required in order to comply with the payment schedule then applicable
to such Millstone 3 Participant.
The Millstone 3 Lead Participants shall prepare a schedule of payments to be
made by each Participant into the trusts identified in Section 2.01 for the
purpose of accumulating moneys for application toward payment of that
Participant's share of the Decommissioning Costs of the Unit. Such schedule,
as amended from time to time, shall be filed by the Millstone 3 Lead
Participants with the Trustee. Thereafter, decommissioning cost moneys paid
by the Millstone 3 Participants shall be deposited into the applicable trusts
in at least the amounts specified in the schedule then in effect.
The Millstone 3 Participants shall not be permitted at any time to offset any
deposits required pursuant to the provisions hereof by application in any way
of expenditures or obligations which might otherwise qualify for withdrawals
under Section 4.03 hereof.
Moneys held pursuant to this Master Trust Agreement as part of any trust
estate shall be applied or paid by the Trustee only in accordance with the
provisions of this Article IV.
Section 4.02. Management of Trust Moneys. The Millstone 3 Lead Participants
intend that the funds in each of the trusts identified as "Trust A" shall be
held, invested, and used in such a manner that the trust qualifies as a
"Nuclear Decommissioning Trust Fund" under Section 468A of the Code. The
Trustee shall hold and invest such funds pursuant to written investment
guidelines promulgated by the Millstone 3 Lead Participants in consultation
with the Trustee; provided, however, that the Trustee shall not be
responsible for ensuring that each of the trusts identified as "Trust A"
qualifies as a "Nuclear Decommissioning Trust Fund" under Section 468A of the
Code.
The Trustee shall hold and invest funds in each of the trusts identified as
"Trust B" pursuant to written investment guidelines promulgated from time to
time by the Millstone 3 Lead Participants in consultation with the Trustee.
It is recognized that funds deposited in trusts identified as "Trust B" may
not qualify for favorable tax treatment under the Code.
The guidelines promulgated from time to time by the Millstone 3 Lead
Participants shall follow consultation between the Millstone 3 Lead
Participants and the Trustee. These guidelines shall take into account
considerations appropriate to achievement of the purposes described in this
Master Trust Agreement, such as the estimated commencement date for
decommissioning the Unit, the amounts of moneys held in trust and anticipated
earnings, the preservation of accumulated principal, appropriate liquidity
throughout the estimated remaining life of the Unit (so that amounts of
decommissioning funds are readily available on relatively short notice in the
event of a premature decommissioning of the Unit), and the goal of maximizing
trust earnings after payment of applicable taxes and other expenses.
In investing, reinvesting, exchanging, selling and otherwise managing the
trusts, the Trustee shall discharge its duties with the care, skill, prudence
and diligence under the circumstances then prevailing which persons of
prudence, acting in a like capacity and familiar with such matters, would use
in the conduct of an enterprise of a like character and with like aims and in
accordance with the written investment guidelines promulgated from time to
time by the Millstone 3 Lead Participants in consultation with the Trustee.
The Millstone 3 Lead Participants shall have the power to appoint one or more
investment managers (and to remove any such manager) to manage, or direct,
the acquisition, holding or disposition of any trust assets in accordance
with the terms of a written appointment made by the Millstone 3 Lead
Participants. Any such investment manager shall, unless its appointment
provides otherwise, have the power to direct the Trustee in, and in such case
the Trustee shall not be responsible for, the exercise of those powers
expressly given the Trustee under this Section 4.02 with respect to all or
part of the trust moneys, pursuant to the terms of its appointment by the
Millstone 3 Lead Participants, and the Trustee shall, upon receipt of an
Officers' Certificate certifying such investment manager's appointment and
written acknowledgment of such appointment from such investment manager
satisfactory in form to the Trustee, exercise such powers as directed in
writing by such investment manager. The Trustee shall not be liable for any
diminution in the value of the trusts as a result of following any such
direction or as a result of not exercising any such powers in the absence of
any such direction. Notwithstanding the foregoing, the Trustee shall at all
times be responsible for determining whether an investment direction by an
investment manager is in compliance with the applicable written investment
guidelines referred to above, and if any investment direction does not so
comply, the Trustee shall not follow such direction and shall so notify the
Millstone 3 Lead Participants. If no such investment manager has been so
appointed by the Millstone 3 Lead Participants, the Trustee shall have full
authority to invest and reinvest the Fund in accordance with the provisions
of this Master Trust Agreement, and its associated written investment
guidelines, and shall not be required to follow the directions of any other
person.
Section 4.03. Withdrawal of Trust Moneys.
A. Upon compliance with the requirements of this Section, moneys held by the
Trustee in the trusts may be withdrawn for the following purposes:
(1) To pay or reimburse the Millstone 3 Lead Participants or their agent for
each Participant's share of expenditures which constitute payment of the
Decommissioning Costs of the Unit;
(2) To pay each Participant's share of taxes and other reasonable expenses
incurred in connection with the administration and operation of the trusts.
In computing the amounts which may be withdrawn under (1) above, the gross
amount of an expenditure shall be reduced by any refunds, rebates, or other
moneys similarly received by the Millstone 3 Lead Participants or their agent
with respect thereto. Any such refund, rebate or similar payment received
after the certification of the expenditure or obligation to which it relates,
and which has not previously been taken into account, at the election of the
Lead Participants shall be applied within three months after its receipt to
reduce the amount of a subsequent withdrawal from the trusts made under this
Section or shall be redeposited in the trusts from which the amount was
withdrawn.
B. A withdrawal under this Section from the trusts shall be paid only upon
receipt by the Trustee of an Officers' Certificate dated on the date of the
withdrawal application:
(1) stating the amount to be withdrawn, and the purposes for which the
amount is to be used;
(2) specifying in reasonable detail by general classification the underlying
items of expenditures and obligations (after giving effect to any deduction
required under subsection (1)) which will constitute part of the
Decommissioning Costs, and stating that such expenditures constitute, or
obligations when paid will constitute, part of the Decommissioning Costs, and
that none of such expenditures and obligations has been made the basis of a
prior withdrawal under this Section;
(3) stating that any moneys which have previously been withdrawn from the
trusts to pay obligations have been expended on account of items which
constitute part of the Decommissioning Costs; and
(4) stating that no governmental approval for such withdrawal is necessary
or, if at any time the making of withdrawals herefrom becomes subject to the
jurisdiction of any governmental agency, stating that such regulatory
approval has been obtained and furnishing a copy thereof.
ARTICLE V
Consolidation, Merger, Conveyance
Section 5.01. The Millstone 3 Lead Participants May Consolidate, etc., on
Certain Terms. Nothing in this Master Trust Agreement shall be interpreted
to prevent any consolidation or merger of the Millstone 3 Lead Participants
with, or into, any other entity or entities, or the conveyance or transfer of
any of their respective rights, title and interest in the Unit to any other
entity or entities; provided, however, that upon any such consolidation,
merger, conveyance or transfer, the successor entity or entities shall be
lawfully entitled to operate such properties and shall execute and deliver to
the Trustee, simultaneously with such consolidation, merger, conveyance or
transfer, a trust agreement supplemental hereto in form satisfactory to the
Trustee, containing an agreement on the part of such successor entity or
entities to assume the due and punctual performance and observance of all the
covenants and conditions of this Master Trust Agreement, with the same effect
and to the same extent as if such successor entity or entities had been an
original party hereto.
Section 5.02. Other Successors. Nothing in this Master Trust Agreement
shall be interpreted to prevent the Millstone 3 Lead Participants from
transferring their respective rights, title and interest in, and their
obligations with respect to, the Unit to any agent, representative,
authority, agency, commission or other entity or entities, authorized by
applicable state and federal statutes or regulations to assume responsibility
for the decommissioning of nuclear facilities; provided, however, that such
transferee shall execute and deliver to the Trustee a trust agreement
supplemental hereto in form satisfactory to the Trustee, containing an
agreement on the part of such transferee entity or entities to assume the due
and punctual performance and observance of all the covenants and conditions
of this Master Trust Agreement, with the same effect and to the same extent
as if such transferee had been an original party hereto.
Section 5.03. Successor Substituted. In the event any of the Millstone 3
Lead Participants, pursuant to Section 5.01 or 5.02, shall consolidate with
or merge into any other entity or shall convey or transfer all or
substantially all their respective rights, title and interest in the Unit to
any other entity, the successor entity, upon causing to be executed and
delivered the supplemental Master Trust Agreement referred to in Section 5.01
shall succeed to and be substituted hereunder with the same effect as if such
successor entity had been named herein as an original party.
ARTICLE VI
The Trustee
Section 6.01. Acceptance of Trusts; Certain Terms of the Trusts. The
Trustee, for itself and it successors, hereby accepts the trusts created by
this Master Trust Agreement and agrees to perform the same, but only upon the
terms expressly herein set forth, including the following:
A. The recitals herein shall be taken as the statements of the Millstone 3
Lead Participants and shall not be considered as made by, or imposing any
obligation or liability upon, the Trustee. The Trustee makes no
representations as to the value, condition, or validity of the trusts (or any
part thereof) to achieve the purposes of this Master Trust Agreement and the
trusts created herein, and the Trustee shall incur no liability or
responsibility in respect of any of such matters.
B. The Trustee shall be under no responsibility or duty with respect to the
disposition of any moneys duly paid to the Millstone 3 Participants or their
agent under any provision hereof.
C. The Trustee shall be under no responsibility or obligation to collect any
deposit of moneys into the trusts.
D. The Trustee shall have no responsibility for reviewing or confirming that
payments made by a Participant comply with the requirements of the Sharing
Agreement, the Code, or any other statutory or regulatory requirements.
E. The Trustee may not rely upon any default under any covenant in Article
III hereof as a defense against performing its trusts and powers hereunder.
F. The Trustee may execute any of the trusts or powers hereof and perform
any duty hereunder either directly or through its agents or attorneys. The
Trustee shall not be responsible for the misconduct or negligence of any
agent or attorney, provided that such agent or attorney is appointed with due
care and is supervised with due care to ensure timely compliance with the
Trustee's duties hereunder. Notwithstanding the foregoing, the Trustee shall
remain fully responsible for the performance of the duties set forth in
Section 4.02 hereof, whether or not the Trustee appoints an agent or attorney
to perform such duties.
G. The Trustee may, as an expense of administering the trusts, consult with
legal counsel to be selected by it (who may be counsel for any of the
Millstone 3 Participants), and the Trustee shall not be liable for any action
taken or suffered by it in good faith in accordance with the advice of such
counsel.
H. The Trustee shall have the continuing right to be reasonably compensated
for all services rendered hereunder and to be reimbursed for all reasonable
expenses, including reasonable fees and expenses of its counsel, incurred by
it in the administration of the trusts created hereby. The compensation and
reimbursements due to the Trustee hereunder shall be shown in quarterly bills
submitted to the Millstone 3 Lead Participants, with copies to the other
Participants. The Trustee's charges shall be allocated among each of the
trusts hereunder in the ratio that the balance of the assets in each of the
trusts on the last business day of the calendar quarter to which such charges
apply bears to the balance of the assets in all trusts on such last business
day, except for compensation and reimbursements to the Trustee that
specifically relate to a particular trust and are properly chargeable
directly to such trust. After 30 days following the submission of the
quarterly bills referred to above, the Trustee shall be entitled to apply
trust moneys held by it hereunder to the payment of compensation and expense
reimbursements related to such trusts.
I. The Trustee shall segregate into separately identified accounts such
portions of the trust funds held in the name of a Millstone 3 Participant as
that Participant shall direct. The Trustee shall charge such trusts for any
additional expenses resulting from such segregation and accounting.
J. Each of the Millstone 3 Lead Participants shall be obligated to indemnify
the Trustee against any liability, loss, claim, charge or expense it may
sustain, in good faith and without negligence, in the performance of its
duties hereunder, including, but not limited to, any initial tax or
additional tax paid by the Trustee pursuant to Section 4951 of the Code.
K. The Trustee shall be protected in acting upon any notice, resolution,
request, consent, order, certificate, report, opinion, statement, obligation,
appraisal or other document believed by it to be genuine and to have been
signed by the proper party or parties. The Trustee shall accept a board of
directors' resolution as conclusive evidence that a resolution has been duly
adopted and is in full force and effect. Except as otherwise expressly
provided, an Officers' Certificate shall be accepted by the Trustee as
conclusive evidence of the facts therein stated, and shall constitute full
protection to the Trustee for any action taken or omitted to be taken by the
Trustee in good faith reliance thereon. Notwithstanding the fact that the
Trustee shall have no obligation to make any investigation into the matters
stated in any such notice, resolution, request, consent, order, certificate,
report, opinion, statement, obligation, appraisal or other paper or document,
the Trustee may, in its discretion, make such further inquiry into such facts
or matters as it may see fit.
L. The Trustee shall not be responsible for any dimunition in the value of
any trust hereunder as a result of following in good faith and without
negligence the guidelines promulgated by the Millstone 3 Lead Participants
pursuant to Section 4.02 or the instructions of a Participant pursuant to the
last sentence of the first paragraph of Section 4.01.
M. The Trustee shall maintain appropriate records of all deposits,
investments and earnings thereon received by the trusts and all disbursements
made from the trusts, and each month the Trustee shall provide to the
Millstone 3 Lead Participants a written statement of all transactions. In
addition, the Trustee shall provide unto the Millstone 3 Participants at
least annually a report certifying as to the activity in each of the trusts
over the period since the most recent report and the balances at the
beginning and end of such period.
N. The Millstone 3 Participants and their agents shall have the right to
review, inspect and audit the books and records of the Trustee relating to
the trusts, providing that the expenses of such review, inspection or audit
shall be paid by the Millstone 3 Participant causing such review, inspection
or audit to be performed.
O. The Trustee shall cause appropriate tax returns with respect to the
trusts and income earned by each of the trusts to be prepared and filed and
shall pay any taxes shown to be due out of the appropriate trust moneys held
by it. In consultation with the Millstone 3 Lead Participants, the Trustee
shall have the right to challenge the obligation to make payment of any such
taxes and shall have the authority to settle any proceedings related to such
taxes, and to receive refunds and take any other action necessary or
appropriate in regard to taxes on the trusts or income earned by the trusts.
P. The Trustee shall prepare and submit such applications, reports and other
documents as may be required by any governmental authority identified in an
Officers' Certificate as having jurisdiction over the trusts and performance
of the trust obligations and activities specified by this Master Trust
Agreement.
Q. Without in any way limiting the powers and authority conferred upon the
Trustee by other provisions of this Master Trust Agreement or by law, and to
enable the Trustee to perform its duties hereunder, the Trustee is expressly
authorized and empowered as follows:
To sell, exchange, convey, transfer or otherwise dispose of any property held
by it, by public or private sale. No person dealing with the Trustee shall
be bound to see to the application of the purchase money or to inquire into
the validity or expediency of any such sale or other disposition;
To make, execute, acknowledge and deliver any and all documents of transfer
and conveyance and any and all other instruments that may be necessary or
appropriate to carry out the powers granted in this Master Trust Agreement;
To register any securities held in the trusts in its own name or in the name
of a nominee and to hold any security in bearer form or in book entry, or to
combine certificates representing such securities with certificates of the
same issue held by the Trustee in other fiduciary capacities, or to deposit
or arrange for the deposit of such securities in a qualified central
depositary even though, when so deposited, such securities may be merged and
held in bulk in the name of the nominee of such depositary with other
securities deposited therein by another person, or to deposit or arrange for
the deposit of any securities issued by the United States Government, or any
agency or instrumentality thereof, with a Federal Reserve bank, but the books
and records of the Trustee shall at all times show that all such securities
are part of the appropriate trust hereunder;
In consultation with the Millstone 3 Lead Participants, to compromise or
otherwise adjust claims in favor of or against the trusts.
Section 6.02. Persons Eligible for Appointment as the Trustee. The Trustee
shall at all times be a bank or trust company having its principal office and
place of business in the United States of America, and shall at all times be
a corporation authorized to do business in the State of Connecticut, with a
combined capital and surplus of at least $50,000,000 and authorized under
applicable laws to exercise corporate trust powers and subject to supervision
or examination by appropriate federal or state authorities. If the Trustee
publishes reports of condition at least annually, pursuant to law or to the
requirements of any supervising or examining authority referred to in this
Section, then, for the purposes of this Section, the combined capital and
surplus of the Trustee shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published.
In the event the Trustee ceases to be eligible under this Section, it shall
resign immediately in the manner and with the effect specified in Section
6.03; if the Trustee does not so resign, it shall be removed forthwith by the
Millstone 3 Lead Participants.
Whenever necessary to avoid or fill a vacancy in the office of the Trustee,
the Millstone 3 Lead Participants, will, in the manner provided in Section
6.04, appoint a Trustee so that there shall at all times be a Trustee
eligible under this Section.
Section 6.03. Resignation and Removal. The Trustee may resign and be
discharged from the trusts hereby created by giving at least six weeks' prior
written notice thereof to the Participants. Such resignation shall become
effective on the day specified in such notice or upon the appointment of a
successor and such successor's acceptance, whichever is later. If an
instrument of acceptance by a successor Trustee shall not have been delivered
to the Trustee within six weeks after the giving of such notice of
resignation, the retiring Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
The Millstone 3 Lead Participants may at any time remove the Trustee, with or
without cause, upon at least six weeks' prior written notice, such notice to
be in the form of an Officers' Certificate of the Millstone 3 Lead
Participants declaring such removal and specifying the successor trustee
appointed pursuant to Section 6.04.
The Trustee, after resignation or removal, may nevertheless retain a lien
upon the trust moneys to secure any amounts due to it under any provision of
this Master Trust Agreement.
Section 6.04. Appointment of Successor Trustee. In the event the Trustee
resigns, is removed, or becomes incapable of acting or is adjudged a bankrupt
or insolvent, or if a receiver of the Trustee or its property is appointed or
a public officer takes charge or control of the Trustee or its property or
affairs for the purpose of rehabilitation, conservation or liquidation, a
vacancy shall be deemed to exist in the office of the Trustee, and a
successor shall be appointed by the Millstone 3 Lead Participants to fill
such vacancy. The validity of any such appointment, however, shall not be
impaired or affected by failure to give notice of such appointment or by any
defect in such notice.
If, in a proper case, no successor Trustee shall have been appointed pursuant
to the foregoing provisions of this Section, or if appointed, shall not have
accepted the appointment, within 60 days after the resignation of the
Trustee, or the occurrence of a vacancy in the office of the Trustee, the
Secretary of the State of Connecticut may apply to a court of competent
jurisdiction to appoint a successor Trustee.
Section 6.05. Acceptance of Appointment by Successor Trustee. A successor
Trustee appointed hereunder shall execute an instrument accepting such
appointment and deliver one counterpart thereof each to the Millstone 3
Participants, the retiring Trustee, and, if applicable, the court making such
appointment. Thereupon, without any further act, such successor Trustee
shall become vested with all the properties, rights, powers, trusts and
duties of the retiring Trustee as if originally named under this Master Trust
Agreement; however, any retiring Trustee, when requested by the successor
Trustee in writing or by the Millstone 3 Lead Participants and upon payment
of any lawful charges and disbursements, shall nevertheless execute and
deliver an instrument or instruments conveying and transferring to such
successor Trustee all its properties, rights, powers, and trusts hereunder
and shall duly assign, transfer and deliver to such successor Trustee all
property and moneys held by it hereunder. If the successor Trustee
reasonably requests an instrument from the Millstone 3 Lead Participants for
the purpose of more fully and certainly vesting in and confirming to it said
properties, rights, powers and trusts, then such instrument shall be
executed, acknowledged and delivered to it by the Millstone 3 Lead
Participants.
Section 6.06. Merger or Consolidation of the Trustee. Subject to the
requirements of Section 6.02 hereof, any corporation into which the Trustee
may be merged or with which it may be consolidated or any corporation
resulting from any merger or consolidation to which the Trustee shall be a
party or any corporation to which substantially all the business and assets
of the Trustee may be transferred, shall be the Trustee under this Master
Trust Agreement, without further act.
ACTICLE VII
Distribution of Assets upon Termination
Section 7.01. Transfer to Successor Trust. In the event that one or more of
decommissioning trusts established pursuant to this Master Trust Agreement is
required or permitted by an action of any governmental authority having
jurisdiction to be transferred to another trust or trusts in order to satisfy
the purposes specified in Section 2.02, the Millstone 3 Lead Participants
shall have the right, by written notice to the Trustee, to elect to have such
trust or trusts subsumed into such other trust or trusts. Such written
notice of such election shall be signed by the Presidents or Treasurers of
the Millstone 3 Lead Participants and shall direct the Trustee to transfer
the trust moneys to the specified successor trust or trusts. Upon the
completion of such transfer, the specified trust shall terminate.
Section 7.02. Final Distribution. Any moneys remaining in a trust following
completion of the decommissioning process for the Unit or action or order of
the NRC or any successor agency having similar effect shall be distributed by
the Trustee for the benefit of the applicable Millstone 3 Participant, except
as may be ordered by any governmental authority having jurisdiction over such
distribution.
If any of the trusts created by this Master Trust Agreement is finally
determined to be void for any reason by a court or other governmental
authority having jurisdiction, any portion of the trust estate which cannot
then be applied to achievement of the purposes specified herein shall be
distributed in the manner specified in this Section 7.02.
ARTICLE VIII
General Provisions
Section 8.01. Compliance Certificates and Opinions. Every certificate or
opinion with respect to compliance with a condition or covenant provided for
in this Master Trust Agreement shall include:
A. A statement that each person making such certificate or opinion has read
such covenant or condition and the definitions herein relating thereto.
B. A brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based.
C. A statement that, in the opinion of each such person, he or she has made
or caused to be made such examination or investigation as is necessary to
enable that person to express an informed opinion as to whether or not such
covenant or condition has been complied with.
D. A statement as to whether or not, in the opinion of the person making
such certificate or opinion, such condition or covenant has been complied
with.
In any case where several matters are required to be certified by, or covered
by an opinion of, any specified person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such person,
or that they be so certified or covered by the opinion of, only one such
person, or that they be so certified or covered by only one document, but one
such person may certify or give an opinion with respect to some matters and
one (or more) other such persons as to other matters, and each such person
may certify or give an opinion as to such matters in one or several
documents.
Section 8.02. No Implied Obligations. This Master Trust Agreement shall not
be interpreted to impose any duty, responsibility, obligation or liability
upon the Trustee or the Millstone 3 Lead Participants in addition to those
duties, responsibilities, obligations and liabilities which are expressly
specified in this instrument.
Section 8.03. Transfer of Interests. No provision of this Master Trust
Agreement shall be interpreted to prohibit or restrict the transfer between
Participants of interests in the Millstone 3 Decommissioning Trusts in
conjunction with changes in their ownership interests in the Unit; provided,
however, that no such transfer shall in any way act to terminate any trust or
result in the transferee having any rights or interests which differ from
those previously held by the transferor.
ARTICLE IX
Miscellaneous
Section 9.01. Supplemental Trust Agreements. Subject to Section 2.03
hereof, this Master Trust Agreement may be amended or supplemented from time
to time by the execution and delivery of one or more supplemental trust
agreements by and between the Millstone 3 Lead Participants and the Trustee,
provided that the amendment or supplement has received any required approval
or acceptance by any governmental body having jurisdiction.
Section 9.02. Successor Governmental Authorities. Wherever a specific
governmental authority is identified in this Master Trust Agreement, such
identification shall include any successor governmental authority, agency or
body having substantially comparable responsibilities.
Section 9.03. Amendment or Repeal of Section 468A. Any reference in this
Master Trust Agreement to Section 468A of the Code shall be deemed to refer
not only to such section, as it may from time to time be amended, but also to
any successor statutory provision. In the event that Section 468A of the
Code, or its successor statutory provision, is repealed, in whole or in part,
and certain provisions of this Master Trust Agreement cease to be required,
such provisions shall thereupon be ineffective without the necessity of
further amendment of this Master Trust Agreement.
Section 9.04. Applicable Law. This Master Trust Agreement shall be governed
by and construed in accordance with the laws of the State of Connecticut.
Section 9.05. Unenforceable Provisions. Any provision of this Master Trust
Agreement which is prohibited or is determined to be unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
Section 9.06. Written Changes and Notices. No term or provision of this
Master Trust Agreement may be changed, waived, discharged or terminated,
except by any instrument in writing signed by the party or other person
against whom enforcement of the change, waiver, discharge or termination is
sought; and any waiver of the terms hereof shall be effective only in the
specific instance and for the specific purpose given.
Section 9.07. Counterparts. This Master Trust Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 9.08. Headings of Articles and Sections. The headings of the
various Articles and Sections herein are for convenience of reference only
and shall not define or limit any of the terms of provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Master Trust
Agreement to be duly executed by their respective authorized officers as of
the date first above written.
THE CONNECTICUT LIGHT AND POWER COMPANY
By /s/X.X. X'Xxxxxx
Its Vice President & Treasurer
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By /s/X. X. X'Xxxxxx
Its Vice President & Treasurer
COLONIAL BANK
By /s/Xxxx Xxx Xxxxxxx
Its Vice President
