EXHIBIT B-2
OE NUCLEAR CAPITAL CONTRIBUTION AGREEMENT
by and between
OHIO EDISON COMPANY
and
FIRSTENERGY NUCLEAR GENERATION CORP.
CAPITAL CONTRIBUTION AGREEMENT, dated as of May 18, 2005 between Ohio
Edison Company, an Ohio corporation ("Ohio Edison") and FirstEnergy Nuclear
Generation Corp., an Ohio corporation ("Nuclear Genco").
R E C I T A L S
WHEREAS, Ohio Edison wishes to make a capital contribution to Nuclear
Genco of the Contributed Assets (in each case as defined below) on the terms and
conditions set forth herein; and
WHEREAS, the Board of Directors of Ohio Edison and Nuclear Genco have
approved Ohio Edison's capital contribution to Nuclear Genco of all of Ohio
Edison's right, title and interest in and to (a) its undivided ownership
interests in Units Nos. 1 and 2 of the Beaver Valley Nuclear Power Plant, (b)
its undivided ownership interests in the Beaver Valley Nuclear Power Plant
Common Facilities, and (c) the shares of common stock of OES Nuclear
Incorporated, an Ohio corporation, and associated decommissioning funds and
other assets, all as more specifically described in Annex A and in Annex C
hereto (collectively, the "Contributed Assets"), together with Ohio Edison's
transfer and assignment prior to, on or from time to time after the Contribution
Date (as hereinafter defined) to Nuclear Genco of all of Ohio Edison's rights,
liabilities and obligations in respect of $411,915,000 aggregate principal
amount of outstanding pollution control revenue bonds with respect to the
Contributed Assets (as more specifically described in Annex B hereto) and other
included liabilities as more specifically described in Annex C (collectively,
the "Transferred Liabilities", and together with the Contributed Assets, the
"Contribution"); and
WHEREAS, each of the parties hereto has agreed to execute and deliver
all such agreements, certificates and other documents as they deem necessary or
desirable to implement the Contribution, with such terms, conditions,
modifications, amendments or alterations as the officers executing the same
shall approve as necessary or desirable, such approval to be conclusively
established by their execution thereof, and to take all actions necessary or
desirable in order to enable the parties to fulfill their obligations under such
agreements, certificates and other documents; and
WHEREAS, each of the parties hereto has determined that the
Contribution is in its best interests.
NOW, THEREFORE, in consideration of the premises and intending to be
legally bound hereby, the parties hereto agree as follows:
1. CAPITAL CONTRIBUTION. Subject to the terms and conditions hereof, Ohio
Edison hereby agrees to make, and Nuclear Genco agrees to accept, the
Contribution of the Contributed Assets and to assume the Transferred
Liabilities. The parties hereby acknowledge and agree that the value of the
Capital Contribution will be the book value thereof, less accumulated
depreciation, of the Contributed Assets as shown on Ohio Edison's balance sheet
as of the end of the fiscal quarter immediately preceding the Contribution Date,
less the agreed upon value of the Transferred Liabilities and the Assumed
Liabilities as of the Contribution Date which Ohio Edison transfers to Nuclear
Genco and Nuclear Genco assumes prior to or on the Contribution Date.
2. EFFECTIVENESS OF TRANSACTION.
a. The initial Contribution shall take place as promptly as
practicable following receipt of all necessary regulatory authorizations and
other consents and approvals as may be necessary, appropriate or advisable to
consummate the transactions contemplated hereby (the "Contribution Date"), it
being understood that, as contemplated herein, Ohio Edison intends to transfer
certain of the Transferred Liabilities to Nuclear Genco from time to time after
the Contribution Date.
b. The parties hereby agree that the Contribution shall, to the extent
they deem appropriate, be further evidenced and effected through the taking of
all such additional actions and the execution of all instruments, agreements and
documents of transfer, including without limitation such deeds, assignment and
assumption agreements, releases and other documents as may be necessary or
desirable to further evidence or carry out the Contribution.
3. COVENANTS.
a. Ohio Edison hereby undertakes and agrees that the Contributed
Assets will be transferred to Nuclear Genco free and clear of the liens of the
Indenture, dated as of August 1, 1930, between Ohio Edison and the Bank of New
York, as successor to Bankers' Trust Company, as Trustee, as amended and
supplemented, and the General Mortgage Indenture and Deed of Trust, dated as of
January 1, 1998, between Ohio Edison and The Bank of New York, as Trustee as
amended and supplemented, but may be subject to other liens, claims, liabilities
and encumbrances, all of which Nuclear Genco agrees to accept and assume, except
as otherwise provided herein.
b. Nuclear Genco agrees to accept prior to or on the Contribution Date
and from time to time thereafter as Ohio Edison may request the assignment of
the Transferred Liabilities, and all such other liabilities and obligations of
Ohio Edison as may be associated with, or directly related to, the Contributed
Assets including, without limitation, any decommissioning liabilities and
obligations associated with the Contributed Assets and other liabilities as more
specifically identified in the form of Assignment and Assumption Agreement
attached as Annex C hereto (the "Assumed Liabilities"), which include, among
other liabilities, liability for the decommissioning and decontamination of the
Contributed Assets, management of spent nuclear fuel, and all environmental
liabilities, as well as any liabilities associated with the ownership of the
Contributed Assets from and after the Contribution Date, but otherwise exclude
the liabilities and obligations associated with Ohio Edison's ownership of the
Contributed Assets prior to the Contribution Date. Nuclear Genco hereby agrees
fully to perform and discharge the Assumed Liabilities in a timely fashion.
Nuclear Genco further agrees to indemnify and hold harmless Ohio Edison from and
against any and all liabilities, actions, claims, damages, costs and expenses
which Ohio Edison may suffer or incur as a result of Nuclear Genco's failure to
perform the foregoing obligations.
c. The parties acknowledge and agree that other than the Transferred
Liabilities and the Assumed Liabilities, Ohio Edison shall retain and discharge
all liabilities and obligations associated with, or directly relating to, the
Contributed Assets arising out of Ohio Edison's ownership of the Contributed
Assets prior to the Contribution Date, including, without limitation, any
liability or obligation to fund the deficiency as of the Contribution Date in
Ohio Edison's nuclear decommissioning trusts associated with the Contributed
Assets, in the amount and as may be required by the Nuclear Regulatory
Commission in connection with the transactions contemplated hereby . Ohio Edison
further agrees to timely and fully discharge all such liabilities and
2
obligations and to indemnify and hold harmless Nuclear Genco from and against
any and all liabilities, actions, claims, damages, costs and expenses which
Nuclear Genco may suffer or incur as a result of Ohio Edison's failure to
perform the foregoing obligations.
d. The parties covenant and agree to use all commercially reasonable
efforts to obtain all regulatory and other approvals, authorizations and
consents, including rulings from the Internal Revenue Service, and make all such
filings necessary, appropriate or desirable in order for Ohio Edison to make and
for Nuclear Genco to accept the Contribution of the Contributed Assets, the
Transferred Liabilities and the Assumed Liabilities as contemplated hereby.
4. GOVERNING LAW. This Capital Contribution Agreement shall be governed by
the substantive laws of the State of Ohio, without reference to its conflicts of
laws principles.
5. COUNTERPARTS. This Capital Contribution Agreement may be executed in
counterparts, each of which taken together shall be deemed one and the same
instrument.
IN WITNESS WHEREOF, this Capital Contribution Agreement has been duly
executed and delivered by the parties as of the date first above written.
OHIO EDISON COMPANY
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Corporate Secretary
FIRSTENERGY NUCLEAR GENERATION CORP.
By: /s/ Xxxx X. Xxxxxxx, Xx.
------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: Sole Incorporator
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ANNEX A
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General Description of Contributed Assets
-----------------------------------------
1. Ohio Edison's 35% undivided ownership interest in Unit No. 1 of
the Beaver Valley Nuclear Power Plant, Borough of Shippingport,
Pennsylvania
2. Ohio Edison's 20.22% undivided ownership interest in Unit No. 2 of
the Beaver Valley Nuclear Power Plant, Borough of Shippingport,
Pennsylvania
3. Ohio Edison's undivided ownership interest in the Beaver Valley
Nuclear Power Plant Common Facilities, Borough of Shippingport,
Pennsylvania
4. The common stock of OES Nuclear, Incorporated, an Ohio corporation
5. Ohio Edison's interest in the qualified and non-qualified nuclear
decommissioning trust funds associated with its ownership
interests in the Beaver Valley and Perry Nuclear Power Plants
6. All of Ohio Edison's right, title and interest in and to any and
all contracts, fuel, spare parts, inventories, equipment, supplies
and other assets associated with or necessary for the ownership or
operation of the foregoing
in each case as more specifically described in the Assignment and Assumption
Agreement attached as Annex C.
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ANNEX B
Pollution Control Revenue Bonds
-------------------------------
--------------------------------------------------------------------------------
ISSUER BONDS PRINCIPAL AMOUNT
------ ----- ----------------
--------------------------------------------------------------------------------
Ohio Water Development 00 Series A due 2033 $ 44,800,000
Authority
--------------------------------------------------------------------------------
Ohio Air Quality Development 00 Series A due 2033 $ 12,300,000
Authority
--------------------------------------------------------------------------------
*Ohio Water Development 88 Series A&B due 2018 $ 33,000,000
Auhority
--------------------------------------------------------------------------------
*Ohio Air Quality Development 88 Series A&B due 2018 $ 23,000,000
Authority
--------------------------------------------------------------------------------
Beaver County Industrial 99 Series A due 2033 $108,000,000
Development Authority
--------------------------------------------------------------------------------
Beaver County Industrial 01 Series A due 2031 $ 10,815,000
Development Authority
--------------------------------------------------------------------------------
*Beaver County Industrial 95 Series due 2020 $ 60,000,000
Development Authority
--------------------------------------------------------------------------------
Ohio Water Development 99 Series due 2033 $ 30,000,000
Authority
--------------------------------------------------------------------------------
Ohio Water Development 99 Series B due 2033 $ 41,000,000
Authority
--------------------------------------------------------------------------------
Ohio Air Quality Development 99 Series B due 2033 $ 9,000,000
Authority
--------------------------------------------------------------------------------
Ohio Water Development 95 Series due 2015 $ 40,000,000
Authority ------------
--------------------------------------------------------------------------------
TOTAL: $411,915,000
============
--------------------------------------------------------------------------------
--------------------
* To be transferred to, and assumed by, Nuclear Genco on or prior to the
Contribution Date.
