OE NUCLEAR CAPITAL CONTRIBUTION AGREEMENT by and between OHIO EDISON COMPANY and FIRSTENERGY NUCLEAR GENERATION CORP.
[Execution
Copy]
Exhibit
10.1
OE
NUCLEAR CAPITAL
CONTRIBUTION AGREEMENT
by
and
between
OHIO
EDISON
COMPANY
and
FIRSTENERGY
NUCLEAR
GENERATION CORP.
CAPITAL CONTRIBUTION
AGREEMENT,
dated as of
_________, 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-
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 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.
-3-
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/ | |
|
Name |
||
| Title | ||
|
FIRSTENERG6Y
NUCLEAR GENERATION
CORP.
|
||
| |
|
|
| By: | /s/ | |
|
Name |
||
| Title | ||
-4-
ANNEX
A
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.
-5-
ANNEX
B
Pollution
Control
Revenue Bonds
|
Issuer
|
Bonds
|
Principal
Amount
|
|||||
|
Ohio
Water
Development Authority
|
00
Series A
due 2033
|
$
|
44,800,000
|
||||
|
Ohio
Air
Quality Development Authority
|
00
Series A
due 2033
|
$
|
12,300,000
|
||||
|
* Ohio
Water
Development Authority
|
88
Series
A&B due 2018
|
$
|
33,000,000
|
||||
|
*Ohio
Air
Quality Development Authority
|
88
Series
A&B due 2018
|
$
|
23,000,000
|
||||
|
Beaver
County
Industrial Development Authority
|
99
Series A
due 2033
|
$
|
108,000,000
|
||||
|
Beaver
County
Industrial Development Authority
|
01
Series A
due 2031
|
$
|
10,815,000
|
||||
|
*Beaver
County
Industrial Development Authority
|
95
Series due
2020
|
$
|
60,000,000
|
||||
|
Ohio
Water
Development Authority
|
99
Series due
2033
|
$
|
30,000,000
|
||||
|
Ohio
Water
Development Authority
|
99
Series B
due 2033
|
$
|
41,000,000
|
||||
|
Ohio
Air
Quality Development Authority
|
99
Series B
due 2033
|
$
|
9,000,000
|
||||
|
Ohio
Water
Development Authority
|
95
Series due
2015
|
$
|
40,000,000
|
||||
|
|
TOTAL: |
$
|
411,915,000
|
||||
* To
be transferred
to, and assumed by, Nuclear Genco on or prior to the Contribution
Date.
-6-
