Exhibit 10.7

 

BACKUP

NUCLEAR DECOMMISSIONING

TRUST AGREEMENT

 

THIS BACKUP NUCLEAR DECOMMISSIONING TRUST AGREEMENT (the “Agreement” or “Backup
NDT”), dated September 1, 2010, by and between ZionSolutions, LLC
(“ZionSolutions”), a limited liability company organized under the laws of the
State of Delaware and having a principal office at 423 West 300 South, Ste. 200,
Salt Lake City, UT 84101, and The Bank of New York Mellon, as Trustee, having
its office at New York, N.Y. (the “Trustee”).

 

WITNESSETH:

 

WHEREAS, pursuant to that Asset Sale Agreement dated as of December 11, 2007, by
and among Exelon Generation Company, LLC (“ExGen”), ZionSolutions, and
ZionSolutions’ parent entities, EnergySolutions, LLC, and EnergySolutions, Inc.
(as amended, the “Asset Sale Agreement”) ExGen has agreed, subject to the terms
and conditions of the Asset Sale Agreement, to sell, assign, convey, transfer
and deliver all of its right, title and interest in the Zion Assets (as defined
in the Asset Sale Agreement) to ZionSolutions, and ZionSolutions has agreed,
subject to the terms and conditions of the Asset Sale Agreement, to assume and
discharge the Assumed Liabilities (as defined in the Asset Sale Agreement); and

 

WHEREAS, pursuant to the Asset Sale Agreement ExGen and ZionSolutions have
executed a Lease Agreement and a Put Option Agreement, each dated as of
September 1, 2010; and

 

WHEREAS, EnergySolutions, LLC has executed and delivered a Performance Guaranty
to provide additional assurances of the payment and performance, when due, of
all obligations of ZionSolutions under the Asset Sale Agreement, the Lease
Agreement, the Put Option Agreement and other specified Ancillary Agreements,
and EnergySolutions, Inc. has executed and delivered a Guaranty to provide
additional assurances of the payment and performance, when due, of all
obligations of ZionSolutions under the Asset Sale Agreement, the Lease
Agreement, the Put Option Agreement and other specified Ancillary Agreements and
the obligations of EnergySolutions, LLC under the Asset Sale Agreement and the
Ancillary Agreements to which EnergySolutions, LLC is a party; and

 

WHEREAS, EnergySolutions, LLC has executed and delivered to ExGen a Pledge
Agreement, in the form required by the Asset Sale Agreement, to secure the
obligations of EnergySolutions, LLC under the Performance Guaranty; and

 

WHEREAS, EnergySolutions, LLC and EnergySolutions, Inc. have executed and
delivered to ExGen a Credit Support Agreement, in the form required by the Asset
Sale Agreement, to secure the obligations of EnergySolutions, LLC under the
Performance Guaranty and the obligations of EnergySolutions, Inc. under the
Guaranty; and

 

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WHEREAS, EnergySolutions, LLC has procured and delivered to ExGen the
Irrevocable Letter of Credit the proceeds of which are payable to the Trustee,
and EnergySolutions, LLC has executed and delivered to the Trustee the
Irrevocable Easement for Disposal Capacity, and the Disposal Services Agreement,
which will constitute the Disposal Capacity Asset, and together with the
Irrevocable Letter of Credit are established to further secure the obligations
of EnergySolutions, LLC under the Performance Guaranty and the obligations of
EnergySolutions, Inc. under the Guaranty; and

 

WHEREAS, nothing in this Agreement is intended to conflict with or override the
applicable licenses or the applicable regulatory requirements of the NRC, the
Service and other regulators; and

 

WHEREAS, ZionSolutions wishes that the Trustee serve as trustee under the terms
and conditions of this Agreement.

 

NOW, THEREFORE, ZionSolutions has previously delivered the Irrevocable Letter of
Credit, the Irrevocable Easement for Disposal Capacity and the Disposal Capacity
Asset to the Trustee, and the Trustee has acknowledged that any future payments
under the Irrevocable Letter of Credit shall be made to the Backup NDT, and the
Trustee has further acknowledged receipt of the Disposal Capacity Asset, all
together representing the contributions to the Trust as required under the Asset
Sale Agreement;

 

TO HAVE AND TO HOLD THE SAME IN TRUST for the exclusive use and purpose and upon
the terms and conditions hereinafter set forth and as set forth in the Terms for
Backup Nuclear Decommissioning Trust Agreement (the “Backup NDT Terms”) appended
hereto as Attachment 1, together with the proceeds and reinvestments thereof, if
any.

 

ARTICLE 1

PURPOSE OF THE TRUST

 

Section 1.01 Establishment of the Trust. The Trustee has established and shall
hold this Trust for the Plant. The Trustee shall maintain all normal and
customary records for this Trust, and shall credit thereto all income of the
Trust and charge thereto all expenses and any losses. Until otherwise instructed
in writing by ZionSolutions, nothing in this Agreement or in the Backup NDT
Terms shall be deemed to require the Trustee to segregate or invest separately
assets of the Trust, it being intended that the assets of the Trust may be
maintained and invested and reinvested as a common pool, but shall not be
required to be so maintained or invested.

 

Section 1.02. Purpose of the Trust. This Trust is established for the exclusive
purpose described in Section 1.3 of the Backup NDT Terms. None of the assets of
the Backup NDT shall be subject to attachment, garnishment, or execution of levy
in any manner for the benefit of creditors of ZionSolutions or any other party.

 

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Section 1.03. Contributions to the Trust. The Irrevocable Easement for Disposal
Capacity and the Disposal Services Agreement have been executed and delivered to
the Trustee by ZionSolutions (or others approved in writing by ZionSolutions).
The Trustee shall have no duties or responsibilities except those expressly set
forth in this Agreement.  Proceeds payable under the Irrevocable Letter of
Credit will be paid to the Trustee by the issuer of the Irrevocable Letter of
Credit.

 

Section 1.04. Transferability.  ZionSolutions shall not transfer any interest in
this Trust without the prior written consent of ExGen. The interest of
ZionSolutions in this Trust is not subject to the claims of the creditors of
ZionSolutions; provided, however, that, subject to Section 2.2(d) of the Backup
NDT Terms, any creditor of ZionSolutions, as to which a Disbursement Certificate
has been properly completed and submitted to the Trustee, may assert a claim
directly against such Disbursement Certificate or the amount of the Trust
available to pay costs other than amounts then owing the Trustee under
Section 3.2 of the Backup NDT Terms.

 

Section 1.05. Backup NDT Terms. In addition to the terms set forth herein, this
Agreement shall also be governed by the provisions of the Backup NDT Terms. It
is intended that the provisions of the Backup NDT Terms be complementary to the
terms of this Agreement, provided, however, that to the extent that the terms of
this Agreement are construed by a court of competent jurisdiction or applicable
governmental agency to be in conflict with the Backup NDT Terms, the terms of
this Agreement shall take precedence over the Backup NDT Terms. Any term
capitalized and not defined herein shall have the meaning set forth in the
Backup NDT Terms.

 

ARTICLE II

DISTRIBUTIONS

 

Section 2.01. Distributions. Upon receipt of written instructions from an
Authorized Officer in accordance with Article 2 of the Backup NDT Terms, the
Trustee shall distribute all or a portion of the funds drawn on the Irrevocable
Letter of Credit and paid into the Trust to ZionSolutions, its affiliate, or a
third party, or otherwise make use of the Disposal Capacity Asset, subject to
the applicable limitations of Article 2 of the Backup NDT Terms.

 

ARTICLE III

MISCELLANOUS

 

Section 3.01. Headings. The Section headings set forth in this Agreement are
inserted for convenience of reference only and shall be disregarded in the
construction or interpretation of any of the provisions of this Agreement.

 

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Section 3.02. Particular Words. Any word contained in the text of this Agreement
shall be read as the singular or plural as may be applicable in the particular
context. Unless otherwise specifically stated, the word “person” shall be taken
to mean and include an individual, partnership, association, trust, limited
liability company, or corporation.

 

Section 3.03. Severability of Provisions. If any provision of this Agreement or
of the Backup NDT Terms or its application to any person or entity in any
circumstances shall be invalid and unenforceable, the application of such
provision to persons and in circumstances other than those as to which it is
invalid or unenforceable, and the other provisions of this Agreement and the
Backup NDT Terms, shall not be affected by such invalidity or unenforceability.

 

Section 3.04. Form and Content of Communications. The names of Authorized
Officers and other persons authorized to act on behalf of ZionSolutions shall be
certified to the Trustee by ZionSolutions. Until notified in writing to the
contrary, the Trustee shall have the right to assume that there has been no
change in the identity or authority of any person previously certified to it
hereunder.

 

Section 3.05. Delivery of Notices Under Agreement. Any notice required by this
Agreement to be given to ZionSolutions or the Trustee shall be deemed to have
been properly given when delivered in person or when mailed postage prepaid, by
registered or certified mail. Notices to ZionSolutions shall be address to:

 

ZIONSOLUTIONS, LLC

423 West 300 South

Suite 200

Salt Lake City, UT 84101

 

Notices to the Trustee shall be addressed to;

Glen R. Metzger, Vice President

BNY Mellon Asset Servicing

One Mellon Center

Room 151-1315

Pittsburgh, PA 15258-0001

 

Section 3.06. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of ZionSolutions, the Trustee, and their respective
successors and assigns.  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 is a party, or any corporation succeeding
to the trust business of the Trustee, shall become the successor of the Trustee
hereunder, without the execution or filing of any instrument or the performance
of any further act on the part of the parties hereto.

 

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Section 3.07. Third Parties. ExGen shall be a beneficiary of the provisions of
Section 1.04 of this Agreement and Sections 2.1, 2.2, 2.3, 2.7 and 2.9 of the
Backup NDT Terms. Except as expressly provided in this Section 3.07 and
Section 1.04 of this Agreement, nothing expressed or implied in this Agreement
or in the Backup NDT Terms is intended, or shall be construed to confer upon or
give any person or entity other than ZionSolutions and the Trustee any rights or
remedies under or by reason of this Agreement. ExGen shall have the right to
enforce the provisions of Section 1.04 of this Agreement and this Section 3.07
and Sections 2.1, 2.2, 2.3, 2.7 and 2.9 of the Backup NDT Terms insofar as such
Sections grant it rights under this Agreement.

 

Section 3.08. Counterparts of Agreement.  This Agreement has been executed in
counterparts, each of which shall be deemed to be an executed original.

 

Section 3.09. Governing Jurisdiction. The Trust created hereunder is an Illinois
trust. All questions pertaining to the validity, construction, and
administration of this Trust shall be determined in accordance with the laws of
the State of IllinoisPennsylvania.

 

Section 3.10. Trust Fiscal Year. The accounting and taxable year for the Trust
shall be the taxable year of ZionSolutions for federal income tax purposes. If
the taxable year of ZionSolutions shall change, ZionSolutions shall notify the
Trustee of such change and the accounting and taxable year of the Backup NDT
must change to the taxable year of ZionSolutions.

 

Section 3.11. [Deleted]

 

Section 3.12.  Representations.  Each party represents and warrants to the other
that it has full authority to enter into this Agreement upon the terms and
conditions hereof and that the individual executing this Agreement on its behalf
has the requisite authority to that party to this Agreement.  ZionSolutions has
received and read the “Customer Identification Program Notice”, a copy of which
is attached to this Agreement as Exhibit A.

 

[Signature Page to Follow]

 

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IN WITNESS WHEREOF, the parties hereto, each intending to be legally bound
hereby, have hereunto set their hands and seals as of the day and year first
above written.

 

 

ZIONSOLUTIONS, LLC

 

 

 

 

By:

/s/ Brett Hickman

 

Name:

Brett Hickman

 

Title:

General Counsel & Secretary

 

 

 

 

 

THE BANK OF NEW YORK MELLON

 

 

 

 

By:

/s/ Carol Condie

 

Name:

Carol Condie

 

Title:

Vice President

 

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EXHIBIT A

 

CUSTOMER IDENTIFICATION PROGRAM NOTICE

 

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT

 

To help the government fight the funding of terrorism and money laundering
activities, all financial institutions are required by law to obtain, verify and
record information that identifies each individual or entity that opens an
account.

 

What this means for you:  When you open an account, we will ask you for your
name, address, taxpayer or other government identification number and other
information, such as date of birth for individuals, that will allow us to
identify you.  We may also ask to see identification documents such as a
driver’s license, passport or documents showing existence of the entity.

 

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TERMS FOR

BACKUP

NUCLEAR DECOMMISSIONING

TRUST AGREEMENT

 

Between

 

ZIONSOLUTIONS, LLC

 

and

 

THE BANK OF NEW YORK MELLON

 

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

 

Page

 

 

 

ARTICLE 1: DEFINITIONS, AUTHORIZED ACTORS AND PURPOSE

1

1.1

Definitions

1

1.2

[DELETED]

3

1.3

Purpose of Trust Agreements

3

ARTICLE 2: TRUST DISTRIBUTIONS AND DISPOSITIVE PROVISIONS

3

2.1

Deferral of Trust Distributions

3

2.2

Payment of Nuclear Decommissioning Costs

4

2.3

Exercise of Rights

5

2.4

[DELETED]

6

2.5

Remittance and Payment of Taxes

6

2.6

[DELETED]

6

2.7

Time of Termination

6

2.8

Distribution of Trust Upon Termination

6

2.9

Alterations and Amendments

6

2.10

No Authority to Conduct Business

7

ARTICLE 3: GENERAL PROVISIONS RELATING TO THE TRUSTEE

7

3.1

Designation and Qualification of Successor Trustees

7

3.2

Compensation and Reimbursement

8

3.3

Transactions With Third Parties

8

3.4

Financial Statements

8

3.5

Tax Returns, Tax Information Returns and Other Reports

9

3.6

Nominees; Depositories

9

3.7

Future Orders

10

3.8

Appointment of Investment Manager

10

3.9

[Deleted]

11

3.10

Certain Duties and Responsibilities of the Trustee

11

3.11

Certain Rights of Trustee

12

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE 4: TRUSTEE’S POWERS

13

4.1

Payment of or Provision for Expenses of Administration

13

4.2

Investment of Trust Fund: Prudent Investor Standard.

13

4.3

Prohibited Investments

16

4.4

Management of Trusts

17

4.5

Extension of Obligations and Negotiation of Claims

17

4.6

[DELETED]

17

4.7

Foreign Custodians

18

4.8

Securities Lending

18

4.9

Retention and Removal of Professional Service Providers

18

4.10

Right to Assign Disposal Capacity Assets

18

4.11

Delegation of Ministerial Powers

18

4.12

Discretion in Exercise of Powers

18

 

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TERMS FOR

BACKUP

NUCLEAR DECOMMISSIONING

TRUST AGREEMENT

 

The following Terms for the Backup Nuclear Decommissioning Trust Agreement (the
“Backup NDT Terms”) shall apply for purposes of the Backup Nuclear
Decommissioning Trust Agreement by and between ZionSolutions, LLC and the
Trustee.

 

Any terms capitalized but not defined herein shall have the same meaning as
assigned to such terms in the Trust Agreement or, if not in the Trust Agreement,
in the Asset Sale Agreement.

 

ARTICLE 1:  DEFINITIONS, NAME, AUTHORIZED ACTORS AND PURPOSE

 

1.1          Definitions. For purposes of the Backup NDT Terms, the following
terms shall have the following meanings:

 

“Agreement,” and “Trust Agreement” shall mean the Backup Nuclear Decommissioning
Trust Agreement as it may from time to time be amended, modified, or
supplemented.

 

“Applicable Regulatory Requirements” shall mean laws, rules, regulations, orders
and license requirements of the United States of America or any state thereof in
which a Plant is located that are applicable to the retention, investment and
utilization of funds for the costs of the decommissioning of any Plant,
including, without limitation, rules, regulations and orders issued by the NRC
and any requirements set forth in the NRC-issued license to operate that Plant
and any amendments thereto.

 

“Asset Sale Agreement” shall mean that certain Asset Sale Agreement dated as of
December 11, 2007, as amended, by and among Exelon Generation Company, LLC,
ZionSolutions, LLC, EnergySolutions, LLC, and EnergySolutions, Inc.

 

“Authorized Officer” shall mean the chief financial officer, the chief
accounting officer, or the principal project management officer of ZionSolutions
or other responsible officer or employee of ZionSolutions.

 

“Backup NDT Terms” shall mean these Terms for Backup Nuclear Decommissioning
Trust Agreement.

 

“Code” shall mean the Internal Revenue Code of 1986, as it may be amended from
time to time, and the regulations promulgated thereunder.  “Section 468A” shall
mean that section of the Code, as it may be amended from time to time, and any
successor provision thereto, and the regulations promulgated thereunder. 
“Section 4951” shall mean that section of the Code, as it may be amended from
time to time, and any successor provision thereto, and the regulations
promulgated thereunder.

 

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“Data Providers” shall mean pricing vendors, brokers, dealers, investment
managers, subcustodians, depositories and any other person providing Market Data
to the Trustee.

 

“Data Terms Website” shall mean http://bnymellon.com/products/assetservicing/
performanceanalytics.html or any successor website the address of which is
provided by the Trustee to ZionSolutions.

 

“Disbursement Certificate” shall mean a document properly completed and executed
by an Authorized Officer substantially in the form of Exhibit A hereto.

 

“Disposal Capacity Asset” shall mean the Irrevocable Easement for Disposal
Capacity and the Disposal Services Agreement.

 

“Disposal Services Agreement” shall mean that Disposal Services Agreement, in
the form of Exhibit C, executed and delivered to the Trustee by EnergySolutions,
LLC.

 

“ExGen” shall mean Exelon Generation Company, LLC.

 

“Future Orders” shall mean any orders of applicable regulatory bodies, including
the NRC, and any Federal or state laws adopted, in connection with the
retention, investment and utilization of funds for the costs of the
decommissioning of any Plant.

 

“Irrevocable Easement for Disposal Capacity” shall mean that Irrevocable
Easement for Disposal Capacity, in the form of Exhibit D, executed and delivered
to the Trustee by EnergySolutions, LLC.

 

“Irrevocable Letter of Credit” shall mean that duly executed Irrevocable Letter
of Credit, in the form of Exhibit E, procured and delivered to ExGen by
EnergySolutions, LLC and payable to the Trustee;

 

“Losses” shall mean, collectively, losses, costs, expenses, damages, liabilities
and claims.

 

“Market Data” shall mean pricing or other data related to Securities and other
assets.  Market data includes but is not limited to security identifiers,
valuations, bond ratings, classification data, and other data received from
investment managers and others.

 

“NRC” shall mean the United States Nuclear Regulatory Commission and any
successor agency thereto.

 

“Plant” shall mean the Zion Station as that term is defined in the Asset Sale
Agreement.

 

“Qualified Costs” shall mean the costs incurred in the decommissioning of the
Plant (including any related common facilities), to the extent that such costs
may be paid out of the Trust without contravening Applicable Regulatory
Requirements.

 

“Service” shall mean the Internal Revenue Service.

 

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“Trust” shall mean all sums payable to the Trustee under the Irrevocable Letter
of Credit and the Disposal Capacity Asset held under the Trust Agreement, as
such Agreement may be supplemented from time to time by ZionSolutions by written
notice to the Trustee.

 

“Withdrawal Certificate” shall mean a document properly completed and executed
by an Authorized Officer substantially in the form of Exhibit B hereto.

 

“ZionSolutions” shall mean ZionSolutions, LLC.

 

1.2          [Intentionally Deleted]

 

1.3          Purpose of Trust Agreement.  The purpose of this Trust Agreement is
to serve as an additional or backup decommissioning funding assurance for Zion
Station as required under the Asset Sale Agreement.  This Backup Nuclear
Decommissioning Trust will be the recipient of proceeds paid on the Irrevocable
Letter of Credit and will hold and exercise rights under the Disposal Capacity
Asset.  Any payments made pursuant to the Irrevocable Letter of Credit or cash
collateral provided in lieu of the Irrevocable Letter of Credit are to be paid
to and held by this Backup Nuclear Decommissioning Trust.

 

ARTICLE 2:

TRUST DISTRIBUTIONS AND DISPOSITIVE PROVISIONS

 

The Trustee shall manage, invest, reinvest and, after payment of the expenses
described in Section 4.1 hereof, distribute the Trust as follows:

 

2.1  Deferral of Trust Distributions.  For each month in which ZionSolutions
fails to achieve any Site Restoration Milestone by the applicable date
determined in accordance with the Lease Agreement (as extended, if applicable,
by any conditions of Force Majeure or Schedule Extension Conditions) as
evidenced by a certificate and sworn statement of an Authorized Officer
presented to the Trustee, the Trustee shall defer a portion of the aggregate
receivables otherwise available to be disbursed to ZionSolutions or its
affiliates (“Receivables”) from the Trusts by a sum equal to the lesser of
(a) $5,000,000 (pro rated if the failure to achieve a Site Restoration Milestone
continued for a period of less than 30 days since it first occurred or since the
date of the previous reimbursement request) or (b) the amount of the Receivables
requested in the pending Disbursement Certificate or Withdrawal Certificate
ZionSolutions shall indicate in such certificate the amount to be deferred. 
Such monthly deferrals of Receivables shall continue (and any such deferred
Receivables shall not be submitted for reimbursement from the Trust) until
completion of the applicable Site Restoration Milestone, as evidenced by a
subsequent certificate and sworn statement of an Authorized Officer, at which
time such Receivables that have been deferred in accordance with this
Section 2.1 may be disbursed, without interest, from the Trust, subject to any
other applicable limitation in this Agreement.  Disbursements to third parties
that are not affiliates of ZionSolutions, or reimbursement of Qualified Costs
actually incurred by ZionSolutions and paid to third parties not affiliated with
ZionSolutions, shall be not be affected by this provision, and, except as
otherwise provided in

 

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this Agreement,  nothing shall restrict distributions from the Trust to meet
such obligations.  In addition to the foregoing limitations on disbursements
from the Trust, the Trustee shall not make a disbursement from the Trusts
(unless authorized in writing by ExGen) if, as evidenced by a certificate and
sworn statement from an Authorized Officer presented to the Trustee
(a) immediately prior to such requested disbursement, Costs to Completion exceed
Projected NDT Value or (b) after giving effect to such requested disbursement,
Costs to Completion will exceed Projected NDT Value, unless, in the case of
either clause (a) or (b), ZionSolutions has certified that it has complied with
all applicable procedures of Section 6.21 of the Asset Sale Agreement. The
Trustee shall be under no duty to inquire into the correctness or accuracy of
matters contained in a certificate presented pursuant to the provisions of this
Section unless representatives of the Trustee then approving any withdrawal or
disbursement based on such certificate have actual knowledge of the falsity of
any statements made therein.

 

2.2          Payment of Nuclear Decommissioning Costs.

 

(a)           Subject to the restrictions contained in Sections 2.1 and 2.2(d),
the Trustee shall make payments of Qualified Costs or comply with the written
direction of ZionSolutions in accordance with the following procedures:

 

(i)            Disbursements to Third Parties.  The Trustee shall use funds
drawn on the Irrevocable Letter of Credit and paid into the Trust to make
payments of Qualified Costs to any person (other than ZionSolutions) for goods
provided or labor or other services rendered to ZionSolutions in connection with
the decommissioning of a Plant as described in a Disbursement Certificate.

 

(ii)           Reimbursement.  The Trustee shall use funds drawn on the
Irrevocable Letter of Credit and paid into the Trust to make payments to
ZionSolutions in reimbursement of Qualified Costs actually incurred by
ZionSolutions or incurred and paid by ZionSolutions to any other person as
described in a Withdrawal Certificate.

 

(b)           The Trustee shall be under no duty to inquire into the correctness
or accuracy of matters contained in a Disbursement Certificate, a Withdrawal
Certificate, or a written direction to assign the Disposal Capacity Asset unless
representatives of the Trustee then approving any withdrawal,  disbursement, or
action to assign the Disposal Capacity Asset based on such certificate have
actual knowledge of the falsity of any statements made therein.

 

(c)           ZionSolutions hereby agrees to indemnify the Trustee and hold it
harmless from any tax imposed pursuant to Section 4951 with respect to a
disbursement, reimbursement or action to assign the Disposal Capacity Asset made
by the Trustee pursuant to this Section 2.2 in reliance on a Disbursement
Certificate, a Withdrawal Certificate, or a written direction to assign the
Disposal Capacity Asset, provided

 

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representatives of the Trustee then approving such disbursement,  reimbursement
or action to assign the Disposal Capacity Asset do not have actual knowledge of
the falsity of any statements made in the related Disbursement Certificate,
Withdrawal Certificate, or written direction to assign the Disposal Capacity
Asset that would have prevented the imposition of such tax.

 

(d)           Except for administrative costs as provided in Sections 2.5 and
4.1 hereof, no disbursements or payments from the Trust shall be made by the
Trustee:

 

(i)            where the purpose of such proposed disbursement, payment, or use
of the Disposal Capacity Asset either in whole or in part is not for Qualified
Costs; and

 

(ii)           unless the Disbursement Certificate or Withdrawal Certificate (a
“Distribution Request”) presented to the Trustee contains a certificate and
sworn statement from an Authorized Officer setting forth as of the date
specified in such Distribution Request that the costs submitted in the
Distribution Request cannot be disbursed or reimbursed from any other fund
established for the nuclear decommissioning of the Plant (other than by reason
of any required deferral of payment of Receivables); and

 

(iii)          unless either (A) ExGen has submitted a written consent to the
Distribution Request or (B) the Distribution Request presented to the Trustee
contains a certificate and sworn statement from an Authorized Officer confirming
that ZionSolutions has not failed to achieve a Site Restoration Milestone as
described in Section 2.1, or if ZionSolutions has failed to achieve a Site
Restoration Milestone, a reasonably detailed description of the Site Restoration
Milestone that ZionSolutions has failed to achieve, including the applicable
date on which the Site Restoration Milestone was to be achieved, determined in
accordance with the Lease Agreement, and either the date on which the Site
Restoration Milestone was subsequently achieved or a statement that the Site
Restoration Milestone has not been achieved and Receivables are subject to
deferral pursuant to Section 2.1; and

 

(iv)          unless the Disbursement Certificate, Withdrawal Certificate, or a
written direction to assign the Disposal Capacity Asset presented to the Trustee
contains a certificate and sworn statement from an Authorized Officer that an
Event of Default has occurred.

 

2.3          Exercise of Rights.  The Trustee shall not enter into or consent to
any amendment, modification, waiver, termination or assignment of any provision
of the Irrevocable Easement for Disposal Capacity or the Disposal Services
Agreement without the written direction of an Authorized Officer and the prior
written consent of ExGen.  Upon and following an Event of Default the Trustee
shall, pursuant to the written direction of an Authorized Officer or ExGen,

 

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assign all of its rights, responsibilities, title and interest in, to and under
the Disposal Services Agreement and the Irrevocable Easement for Disposal
Capacity to Zion Solutions or its successors and assigns in accordance with
Paragraph 23 of the Disposal Services Agreement and Paragraph 7 of the
Irrevocable Easement for Disposal Capacity, respectively.

 

2.4          [Intentionally Deleted]

 

2.5          Remittance and Payment of Taxes

 

(a)           [Intentionally Deleted]

 

(b)           Remittance of Taxes.  The Trustee shall remit to ZionSolutions,
within 15 business days after a ZionSolutions request therefor the amount from
the Trust which ZionSolutions certifies in writing as the amount by which
ZionSolutions’ Federal and, if applicable, state income taxes for the preceding
fiscal year were increased by the net income of such Trust.  The Trustee shall
be under no duty to inquire into the correctness or accuracy of any such
certificate.

 

(c)           Unrelated Business Taxable Income.  To the extent that assets of
the Trust are segregated in an investment management account pursuant to
Section 3.8(a) hereof, the Investment Manager shall have the sole responsibility
to make any determination as to whether any investment of such assets results in
unrelated business taxable income and shall prepare any applicable tax
information returns and/or other reports pursuant to Section 3.5.  The Trustee
shall act at the direction of the Investment Manager consistent with the
provisions of Section 2.5(a), 2.5(b) and 3.5 hereof.

 

2.6          [Intentionally Deleted]

 

2.7          Time of Termination.  The Trust Agreement shall terminate upon the
earlier to occur of the following events:

 

(a)           The achievement of End State Conditions required under the Asset
Sale Agreement and the Lease Agreement as evidenced to the Trustee by the
written certification of an Authorized Officer and a confirming written
certification of ExGen.

 

(b)           The distribution from the Trust of all amounts drawn from the
Letter of Credit and assignment of the Easement for Disposal Capacity.

 

2.8          Distribution of Trust Upon Termination.  Upon the termination of
the Trust Agreement, the Trustee shall distribute the entire remaining amount of
the Trust, including all accrued, accumulated, and undistributed net income, to
EnergySolutions, Inc.

 

2.9          Alterations and Amendments.  The Trustee and ZionSolutions
understand and agree that amendments may be required to the Trust Agreements
and/or these Backup NDT

 

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Terms from time to time to effectuate the purpose of the Trust Agreement and to
comply with amendments to or changes in Applicable Regulatory Requirements,
changes in tax laws, regulations or rulings (whether published or private) of
the Service, and any other changes in the laws applicable to ZionSolutions, the
Plant or the Trust Agreement. ZionSolutions and the Trustee may amend the Trust
Agreement and/or these Backup NDT Terms to the extent necessary or desirable to
effectuate such purpose or to comply with such changes; provided, however, that
Sections 2.1, 2.2, 2.3, 2.7, and 2.9 of these Backup NDT Terms and Sections 1.04
and 3.07 of the Trust Agreement may not be amended without the prior written
approval of ExGen; and provided further that neither the Trust Agreement nor
these Backup NDT Terms may be modified in any material respect without first
providing 30 days’ prior written notice to the NRC Director, Office of Nuclear
Reactor Regulation and to ExGen, and absent notice of objection from the NRC
Director, Office of Nuclear Reactor Regulation, prior to the effective date of
any such amendment.  ZionSolutions shall furnish the Trustee with an opinion of
legal counsel that any such amendment does not violate Applicable Regulatory
Requirements,  and that all necessary approvals to such amendment have been
obtained.  Notwithstanding the foregoing, the Trustee may decline to adopt such
amendment, if such amendment materially increases the expenses or
responsibilities of the Trustee and no adequate provision has been made to
compensate the Trustee for such increase, or if the Trustee would be unable with
reasonable effort to comply with its duties as to be amended.

 

2.10        No Authority to Conduct Business.  The purpose of the Trust
Agreement is limited to the matters set forth in Section 1.3 hereof. Neither the
Trust Agreement nor these Backup NDT Terms shall be construed to confer upon the
Trustee any authority to conduct business.

 

ARTICLE 3:

GENERAL PROVISIONS RELATING TO THE TRUSTEE

 

The appointment of any successor Trustee, provisions governing resignation and
compensation of the Trustee, and the general rules governing the relationships
of the Trustee and ZionSolutions and any third parties are as follows:

 

3.1          Designation and Qualification of Successor Trustees.  At any time
during the term of the Trust Agreements, ZionSolutions shall have the right,
with respect to the Trust, to remove the Trustee acting under the Trust
Agreement and appoint another qualified entity as a successor trustee upon 60 
days’ notice in writing to the Trustee, or upon such shorter notice as may be
acceptable to the Trustee.  Any Trustee shall have the right to resign at any
time upon 60 days’ notice in writing to ZionSolutions and upon such resignation
ZionSolutions shall appoint another qualified entity as a successor Trustee for
the Trust.

 

Any successor Trustee shall qualify by a duly acknowledged acceptance of the
Trust Agreement, the Trust created hereunder and these Backup NDT Terms,
delivered to ZionSolutions.  Upon acceptance of such appointment by the
successor Trustee, the Trustee shall transfer to such successor Trustee the
Disposal Capacity Asset.  Any successor Trustee shall have all the rights,
powers, duties and obligations herein granted to the original Trustee.

 

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If for any reason ZionSolutions is unable to or does not appoint a successor
Trustee within 90 days after the resignation or removal of the Trustee for the
Trust as provided above, ZionSolutions,  or the Trustee may apply to a court of
competent jurisdiction for the appointment of a successor Trustee.

 

3.2          Compensation and Reimbursement.  The Trustee shall be entitled to
compensation from ZionSolutions at such rates as may be approved in writing from
time to time by ZionSolutions.  Subject to the approval of ZionSolutions (which
shall not be unreasonably withheld or delayed), the Trustee shall be entitled to
be reimbursed from ZionSolutions for out-of-pocket expenses, including, but not
limited to, expenses of agents, auditors and counsel, incurred in connection
with the administration of such Trust.  ZionSolutions acknowledges that, as part
of the Trustee’s compensation, the Trustee will earn interest on balances,
including disbursement balances and balances arising from purchase and sale
transactions as disclosed in the Trustee’s float policy.  Expenses for which
ZionSolutions may reimburse the Trustee also include taxes of any kind
whatsoever that may be levied or assessed under existing or future laws of any
jurisdiction upon or in respect of the Trust.  The Trustee may take all action
necessary to pay for, and settle, Authorized Transactions, including exercising
the power to borrow or raise monies from the Trustee in its corporate capacity
or an affiliate.  To secure advances made to settle or pay for Authorized
Transactions, including payment for securities and disbursements, ZionSolutions
grants to the Trustee a first priority security interest in the Trust, all
Property therein, all income, substitutions and proceeds, whether now owned or
hereafter acquired (the “Collateral”); provided that ZionSolutions does not
grant the Trustee a security interest in any securities issued by an affiliate
of the Trustee (as defined in Section 23A of the Federal Reserve Act) or in the
Disposal Capacity Assets.  The parties intend that as the securities
intermediary with respect to the Collateral, the Trustee’s security interest
shall automatically be perfected when it attaches.  The Trustee shall be
entitled to collect from the Trust sufficient cash for reimbursement and, if
such cash is insufficient, dispose of the assets of the Trust to the extent
necessary to obtain reimbursement.  To the extent the Trustee advances funds to
the Trust for disbursements or to effect the settlement of purchase
transactions, the Trustee shall be entitled to collect from the Trust reasonable
charges established under the Trustee’s standard overdraft terms, conditions and
procedures.

 

3.3          Transactions With Third Parties.  No person or organization dealing
with the Trustee shall be required to inquire into or to investigate its
authority for entering into any transaction or to see to the application of the
proceeds of any such transaction.

 

3.4          Financial Statements.  In the event funds are drawn from the Letter
of Credit and deposited with the Trust the Trustee shall furnish monthly audited
statements for the Trust to ZionSolutions not later than the 15th business day
of the following month.  The statements shall show the financial condition of
the Trust, including, without limitation, the market value of the assets, and
the income and expenses of the Trust for the period since the preceding
statement.  Any such statement may be approved by ZionSolutions with respect to
the Trust by written notice to the Trustee or by failure to object to such
statement within 180 days after the date upon which such statement was delivered
to ZionSolutions.  The approval of any such statement shall constitute a full
and complete discharge of the Trustee as to all matters set forth in such
statement; provided, however, that the foregoing shall not relieve or absolve
the Trustee from

 

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any liability associated with a failure to perform its fiduciary
responsibilities.  The statements shall be audited upon direction of
ZionSolutions by independent certified public accountants, subject to the
limitations contained in Section 4.9 hereof.   In providing pricing or other
Market Data in connection with this Agreement, the Trustee is authorized to use
Data Providers to provide such Market Data.  The Trustee may follow Authorized
Instructions in providing pricing or other Market Data, even if such
instructions direct the Trustee to override its usual procedures and Market Data
sources.  The Trustee shall be entitled to rely without inquiry on all Market
Data (and all Authorized Instructions related to Market Data) provided to it,
and the Trustee shall not be liable for any Losses incurred as a result of
errors or omissions with respect to any Market Data utilized by the Trustee or
ZionSolutions hereunder.  Zion Solutions acknowledges that certain pricing or
valuation information may be based on calculated amounts rather than actual
market transactions and may not reflect actual market values, and that the
variance between such calculated amounts and actual market values may be
material.  Market Data may be the intellectual property of the Data Providers,
which may impose additional terms and conditions upon ZionSolutions’s use of the
Market Data.  The additional terms and conditions can be found on the Data Terms
Website.

 

3.5          Tax Returns, Tax Information Returns and Other Reports.  The
Trustee shall prepare or cause to be prepared tax information returns and such
reports as may be required from time to time for the Trust, and shall provide
copies thereof to ZionSolutions in advance of its filing for review.  The
Trustee shall provide to ZionSolutions all statements, documents, lists, or
other information related to such tax returns and information returns reasonably
requested by ZionSolutions.  The Trustee shall also sign all such tax
information returns, and the Trustee shall file them or cause them to be filed
with the appropriate government agencies.  The Trustee shall cooperate with all
requests made by regulatory agencies related to such tax returns and information
returns and shall provide copies to ZionSolutions in advance of all information
related to such tax returns and information returns submitted by the Trustee to
regulatory agencies (unless prohibited by the terms of such request). 
Notwithstanding the foregoing, no such notice shall be required in the case of
disclosure by the Trustee to any of its regulators.

 

3.6          Nominees; Depositories.  The Trustee may cause any investment,
either in whole or in part, in the Trust to be registered in, or transferred
into, the Trustee’s name or the names of a nominee or nominees, including but
not limited to that of the Trustee or an affiliate of the Trustee, a clearing
corporation, or a depository, or in book entry form, or to retain any such
investment unregistered or in a form permitting transfer by delivery, provided
that the books and records of the Trustee shall at all times show that such
investments are a part of the Trust; and to cause any such investment, or the
evidence thereof, to be held by the Trustee, in a depository, in a clearing
corporation, in book entry form, or by any subcustodian or other entity or in
any other manner permitted by law; provided that the Trustee shall not be
responsible for any losses resulting from the deposit or maintenance of
securities or other property (in accordance with market practice, custom, or
regulation) with any recognized foreign or domestic clearing facility,
book-entry system, centralized custodial depository, or similar organization.

 

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3.7          Future Orders.  ZionSolutions shall promptly advise the Trustee in
writing of the existence of any Future Orders having the effect of imposing new
or different responsibilities upon the Trustee under the Trust Agreement or
these Backup NDT Terms.

 

3.8          Appointment of Investment Manager.

 

(a)           ZionSolutions shall have the right from time to time to appoint
and remove one or more Investment Managers for the Trust held under the
applicable Trust Agreement and to direct the segregation of any part or all of
any such Trust into one or more accounts to be known as “investment manager
accounts” and if ZionSolutions does so, it shall appoint an individual,
partnership, association, or corporation as Investment Manager to manage the
portion of any Trust so segregated, provided, however, that ZionSolutions, its
affiliates, and its subsidiaries and persons representing them shall not provide
day-to-day management direction of investments or direction on individual
investments to either the Trustee or an investment manager.  Written notice of
any such appointment and/or removal shall be given to the Trustee and the
Investment Manager so appointed.  The appointment, after the date hereof, shall
be accomplished using an investment manager agreement signed by ZionSolutions
and the Investment Manager.  The Trustee may assume that any investment manager
account previously established and the prior appointment of any Investment
Manager for that account continues in force until receipt of written notice to
the contrary from ZionSolutions.  As long as the Investment Manager is acting,
the Investment Manager shall have full authority to direct the acquisition,
retention and disposition of the assets from time to time comprising the
investment manager account being managed by the Investment Manager, in
accordance with Sections 2.5(c), 4.2, 4.3, 4.4 and 4.5 hereof.  Upon the
segregation of the assets in accordance with ZionSolutions instructions, the
Trustee, as to those assets while so separated, shall be released and relieved
of all investment duties, investment responsibilities and investment liabilities
normally or statutorily incident to a trustee; provided, however, that the
Trustee shall review the transactions in each investment manager account for the
purpose of determining whether any assets acquired or any pending asset
acquisitions (as to which the Trustee has been given information) are Prohibited
Investments as provided in Section 4.3 hereof.  In the event that the Trustee
determines as a result of any such review that an investment is a Prohibited
Investment as provided in Section 4.3, hereof, then it shall notify
ZionSolutions and the applicable Investment Manager within a reasonable period
of time after such determination by telephone, with confirmation in writing. 
The Trustee shall retain all other fiduciary duties with respect to assets the
investment of which is directed by investment managers.

 

(b)           ZionSolutions hereby agrees to indemnify the Trustee and hold it
harmless from any liability or expense incurred without negligence, willful
misconduct, recklessness or bad faith on the part of the Trustee, in connection
with or arising out of:  (i) any action taken or omitted or any investment or
disbursement of any part of the investment manager account made by the Trustee
at the direction of the Investment Manager, or (ii) any action taken by the
Trustee pursuant to notification of an order

 

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issued by an Investment Manager to purchase or sell securities directly to a
broker or dealer under a power of attorney.

 

(c)           To the extent that ZionSolutions notifies the Trustee that any
Trust assets are currently not allocated to an investment manager account, to
the extent agreed to by the Trustee in writing, the Trustee shall have
investment responsibility for such assets until further notice from
ZionSolutions, and shall hold, invest and reinvest such assets subject to any
investment guidelines issued to it by ZionSolutions, and subject further to the
provisions of Sections 4.2 and 4.3 hereof.

 

3.9          [Intentionally Deleted].

 

3.10        Certain Duties and Responsibilities of the Trustee.

 

(a)           In the absence of bad faith on its part, the Trustee may
conclusively rely upon certificates or opinions furnished to the Trustee and
conforming to the requirements of the Trust Agreement and these Backup NDT
Terms; but in the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to the Trustee, the
Trustee shall have no duty to examine the same to determine whether they conform
to the requirements of the Trust Agreement and these Backup NDT Terms unless the
representative of the Trustee involved with the certificate in question has
actual knowledge of the falsity of any statement made therein.

 

(b)           In performing its duties under this Agreement, the Trustee shall
exercise the same care and diligence that it would devote to its own property in
like circumstances.  The duties of the Trustee shall only be those specifically
undertaken pursuant to this Agreement.  The Trustee shall not be liable for any
action taken by it in good faith and without negligence and believed by it to be
authorized or within the rights or powers conferred upon it by this Agreement
and may consult with counsel of its own choice (including counsel for
ZionSolutions) and shall have full and complete authorization and protection for
any action taken or suffered by it hereunder in good faith and without
negligence and in accordance with the opinion of such counsel.   ZionSolutions
hereby agrees to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence, willful misconduct or
bad faith on the part of the Trustee, arising out of or in connection with its
entering into this Agreement and carrying out its duties hereunder, including
the costs and expenses of defending itself against any claim of liability. 
Except as otherwise provided in this Agreement, the Trustee shall be liable for
the actions of its nominees and the agents it selects.

 

The Trustee shall not be responsible or liable for any losses or damages
suffered by the Trust arising as a result of the insolvency of any custodian,
subtrustee or subcustodian, except to the extent the Trustee was negligent in
its selection or continued

 

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retention of such entity.  Under no circumstances shall the Trustee be liable
for any indirect, consequential, or special damages with respect to its role as
Trustee.

 

3.11        Certain Rights of Trustee.

 

(a)           ZionSolutions shall notify the Trustee in writing of all
Authorized Officers and the rights, powers and duties of each such person or
entity.  Any Investment Manager appointed pursuant to Section 3.8 shall notify
the Trustee in writing of all persons or entities who are authorized to act on
its behalf and the rights, powers and duties of each such person or entity.  The
Trustee shall be entitled to deal with any such person or entity identified by
ZionSolutions or by an Investment Manager (“Authorized Party” or “Authorized
Parties”) until notified otherwise in writing.

 

(b)           “Authorized Instructions” shall mean (i) all directions to the
Trustee from an Authorized Party pursuant to the terms of this Agreement;
(ii) all directions by or on behalf of ZionSolutions to the Trustee in its
corporate capacity (or any of its affiliates) with respect to contracts for
foreign exchange; (iii) all directions by or on behalf of ZionSolutions pursuant
to an agreement with Trustee (or any of its affiliates) with respect to benefit
disbursement services or information or transactional services provided via a
web site sponsored by the Trustee (or any of its affiliates) (e.g., the
“Workbench web site”) and (iv) all directions by or on behalf of ZionSolutions
pursuant to any other agreement or procedure between Trustee (or any of its
affiliates) and ZionSolutions, if such agreement or procedure specifically
provides that authorized persons thereunder are deemed to be authorized to give
instructions under this Agreement.  Authorized Instructions shall be in writing,
transmitted by first class mail, overnight delivery, private courier, facsimile,
or shall be an electronic transmission subject to the Trustee’s policies and
procedures, other institutional delivery systems or trade matching utilities as
directed by an Authorized Party and supported by the Trustee, or other methods
agreed upon in writing by ZionSolutions and the Trustee.  The Trustee may, in
its discretion, accept oral directions and may require confirmation in writing. 
However, where the Trustee acts on an oral direction prior to receipt of a
written confirmation, the Trustee shall not be liable if a subsequent written
confirmation fails to conform to the oral direction.

 

(c)           The Trustee shall be fully protected in acting in accordance with
all instructions that the Trustee reasonably believes to be Authorized
Instructions.

 

(d)           “Authorized Transactions” shall mean any action or series of
actions resulting from Authorized Instructions.

 

(e)           The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by the Trust Agreement at the request or direction
of ZionSolutions pursuant to the Trust Agreement or these Backup NDT Terms,
unless ZionSolutions shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction.

 

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(f)            Notwithstanding anything in this Agreement to the contrary, the
Trustee shall not be responsible or liable for its failure to perform under this
Agreement or for any losses to the Trust resulting from any event beyond the
reasonable control of the Trustee, its agents or subcustodians, including but
not limited to nationalization, strikes, expropriation, devaluation, seizure, or
similar action by any governmental authority, de facto or de jure; or enactment,
promulgation, imposition or enforcement by any such governmental authority of
currency restrictions, exchange controls, levies or other charges affecting the
Trust’s property; or the breakdown, failure or malfunction of any utilities or
telecommunications systems; or any order or regulation of any banking or
securities industry including changes in market rules and market conditions
affecting the execution or settlement of transactions; or acts of war,
terrorism, insurrection or revolution; or acts of God; or any other similar
event.  This Section shall survive the termination of this Agreement.

 

ARTICLE 4:  TRUSTEE’S POWERS

 

The Trustee shall have, with respect to the Trust Agreement, the following
powers, all of which powers are fiduciary powers to be exercised in a fiduciary
capacity and in the best interests of the Trust, and which are to be exercised
as the Trustee, acting in such fiduciary capacity, in its discretion, shall
determine, except that the Trustee shall not act in its discretion but only at
the direction of an appointed Investment Manager in the exercise of those powers
given in Sections 4.2, 4.3, 4.4 and 4.5 hereof with respect to the acquisition,
retention, and disposition of the assets of an investment manager account, which
are intended in no way to limit the general powers of the office.  The
Subordinated Trustee shall have those powers set forth in an appropriate
Subordinated Trust Agreement, which shall not be inconsistent with the material
terms of the Trust Agreement or these Backup NDT Terms.

 

4.1          Payment of or Provision for Expenses of Administration.  The
Trustee shall have the power to incur, pay or make provision for any and all
charges, taxes, and expenses upon or connected with the Trust Agreement in the
discharge of its fiduciary obligations thereunder (and other incidental expenses
of the Trust (including legal, accounting, actuarial and trustee expenses)).

 

4.2          Investment of Trust Fund:  Prudent Investor Standard.

 

(a)           In the event funds are drawn from the Letter of Credit and
deposited with the Trust, and pending any other permissible use of the Trust
held under the Trust Agreement, and subject to the limitations provided in
Section 4.3 of these Backup NDT Terms, the Trustee shall have the power and
authority to invest and reinvest all or any part of the assets of such Trust,
including any undistributed income therefrom, in a manner consistent with the
“prudent investor” standard as specified in 18 CFR § 35.32(a)(3) of the Federal
Energy Regulatory Commission regulations and in such a way as to attempt to
achieve reasonable after-tax returns thereon, considering the pattern of

 

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cash flow, decommissioning schedule and other such considerations made known to
the Trustee by ZionSolutions.  Any investment advisor or other person directing
such investments shall adhere to the “prudent investor” standard, as specified
in 18 CFR § 35.32(a)(3).

 

(b)           In the exercise of the power and authority set forth in
Section 4.2(a) hereof, the Trustee has the following powers and authority:

 

(i)            to purchase, receive or subscribe for any securities or other
property and to retain in trust such securities or other property;

 

(ii)           to sell, exchange, convey, transfer, lend, or otherwise dispose
of any property held in the Trust and to make any sale by private contract or
public auction; and no person dealing with the Trustee shall be bound to see to
the application of the purchase money or to inquire into the validity,
expediency or propriety of any such sale or other disposition;

 

(iii)          to vote in person or by proxy any stocks, bonds or other
securities held in the Trust;

 

(iv)          to exercise any rights appurtenant to any such stocks, bonds or
other securities for the conversion thereof into other stocks, bonds or
securities, or to exercise rights or options to subscribe for or purchase
additional stocks, bonds or other securities, and to make any and all necessary
payments with respect to any such conversion or exercise, as well as to write
options with respect to such stocks and to enter into any transactions in other
forms of options with respect to any options which the Trust has outstanding at
any time;

 

(v)           to join in, dissent from or oppose the reorganization,
recapitalization, consolidation, sale or merger of corporations or properties of
which the Trust may hold stocks, bonds or other securities or in which it may be
interested, upon such terms and conditions as deemed wise, to pay any expenses,
assessments or subscriptions in connection therewith, and to accept any
securities or property, whether or not trustees would be authorized to invest in
such securities or property, which may be issued upon any such reorganization,
recapitalization, consolidation, sale or merger and thereafter to hold the same.
To the extent that any securities that are accepted are attributable to an
investment manager account, the provisions of Section 3.8(a) apply with respect
to Trustee review for Prohibited Investments under Section 4.3 and notification
of ZionSolutions and the applicable Investment Manager;

 

(vi)          to enter into any type of contract with any insurance company or
companies, either for the purposes of investment or otherwise; provided that no
insurance company dealing with the Trustee shall be considered to be a party to
the Trust Agreement and these Backup NDT Terms and shall only be bound by and
held accountable to the extent of its contract with the Trustee. Except as

 

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otherwise provided by any contract, the insurance company need only look to the
Trustee with regard to any instructions issued and shall make disbursements or
payments to any person, including the Trustee, as shall be directed by the
Trustee.  Where applicable, the Trustee shall be the sole owner of any and all
insurance policies or contracts issued.  Such contracts or policies, unless
otherwise determined, shall be held as an asset of the Trust for safekeeping or
custodian purposes only;

 

(vii)         to invest assets of the Trust in foreign and domestic futures
contracts, options on futures contracts, options contracts, swaps, short sales
and other derivative investments, and, in connection with such investments, to
transfer assets of the Trust to brokers or other third parties as margin or
collateral at the direction of the Investment Manager; provided, however, that
the Investment Manager and Trustee shall have first entered into an appropriate
account agreement with such broker or third party.  Notwithstanding anything to
the contrary contained in the Trust Agreement or these Backup NDT Terms, the
Trustee shall have no custodial responsibility for any assets so transferred;

 

(viii)        to invest in any collective, common or pooled Trust operated or
maintained exclusively for the commingling and collective investment of monies
or other assets including any such fund operated or maintained by the Trustee or
its affiliates.  Notwithstanding the provisions of this Agreement which place
restrictions upon the actions of the Trustee or an Investment Manager, to the
extent monies or other assets are utilized to acquire units of any collective
trust, the terms of the collective trust indenture shall solely govern the
investment duties, responsibilities and powers of the trustee of such collective
trust and, to the extent required by law, such terms, responsibilities and
powers shall be incorporated herein by reference and shall be part of this
Agreement.  For purposes of valuation, the value of the interest maintained by
the Fund in such collective trust shall be the fair market value of the
collective fund units held, determined in accordance with generally recognized
valuation procedures.  ZionSolutions expressly understands and agrees that any
such collective fund may provide for the lending of its securities by the
collective fund trustee and that such collective fund’s trustee will receive
compensation from such collective fund for the lending of securities that is
separate from any compensation of the Trustee hereunder, or any compensation of
the collective fund trustee for the management of such collective fund.  The
Trustee is authorized to invest in a collective fund which invests in The Bank
of New York Mellon Corporation stock in accordance with the terms and conditions
of the Department of Labor Prohibited Transaction Exemption 95-56 (the
“Exemption”) granted to the Trustee and its affiliates and to use a
cross-trading program in accordance with the Exemption.  ZionSolutions
acknowledges receipt of the notice entitled “Cross-Trading Information”, a copy
of which is attached to this Agreement as Exhibit C; and

 

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(ix)          to make foreign investments, including investments to be
maintained abroad; provided, however, that such authority is limited to those
foreign jurisdictions in which the Trustee has selected a foreign custodian in
accordance with Section 4.7 hereof.

 

Notwithstanding anything else in this Agreement to the contrary, including,
without limitation, any specific or general power granted to the Trustee,
including the power to invest in real property, no portion of the Fund shall be
invested in real estate.  For this purpose, “real estate” includes, but is not
limited to, real property, leaseholds or mineral interests.

 

(c)           ZionSolutions recognizes that settlements of transactions may be
effected in trading and processing practices customary in the jurisdiction or
market where the transaction occurs.  ZionSolutions acknowledges that this may,
in certain circumstances, require the delivery of cash or securities (or other
property) without the concurrent receipt of securities (or other property) or
cash and, in such circumstances, ZionSolutions shall have sole responsibility
for non-receipt of payment (or late payment) by the counterparty.

 

(d)           All investments must be sufficiently liquid to enable the Trust to
fulfill the purpose of the Trust Agreement and to satisfy obligations as they
become due as communicated in writing to the Trustee.  Nothing in this
Section 4.2 shall be construed as requiring the Trustee to make any
investigation as to when any of the Plants may be decommissioned or when
obligations relating to such decommissioning may be expected to become due.

 

4.3          Prohibited Investments.  The Trustee shall assure that the assets
of the Trusts are not invested or reinvested in the following Prohibited
Investments:

 

(a)           Any securities or other obligations of EnergySolutions, Inc. or
affiliates thereof, or their successors or assigns; or

 

(b)           Any securities or other obligations of any entity owning or
operating one or more nuclear power plants; provided, however, that the
foregoing restriction shall not prevent investments tied to market indices or
other non-nuclear sector mutual funds; or

 

(c)           Any investment which would contravene any Future Orders in effect
at the time such investment or reinvestment is made and previously furnished to
the Trustee with reference to the Trust;

 

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provided, however, that with respect to the securities and obligations
prohibited under clauses (a) and (b), ZionSolutions provides a list of such
securities and obligations and their issuer code and/or CUSIPs.

 

4.4          Management of Trusts.

 

The Trustee shall have the power to sell, exchange or otherwise dispose of all
or any part of any Trust held hereunder, without prior application to or
approval by or order of any court, upon such terms and in such manner and at
such prices as the Trustee shall determine; to modify, renew, or extend, bonds,
notes, or other obligations or any installment of principal thereof or any
interest due thereon and to waive any defaults in the performance of the terms
and conditions thereof; and to execute and deliver any and all assignments,
bonds, or other instruments in connection with these powers, at such times, in
such manner and upon such terms and conditions as the Trustee may be deemed
expedient.  The Trustee’s determinations of manner of sales, terms, prices and
the exercise of other powers granted herein, if reasonably made, are not to be
questioned.

 

4.5          Extension of Obligations and Negotiation of Claims.  Subject to the
limitations contained in Sections 4.2, 4.3 and 4.4 hereof, the Trustee shall
have the power to renew or extend the time of payment of any obligation, secured
or unsecured, payable to or by any Trust, for as long a period or periods of
time and on such terms as it shall determine; and, subject to the approval of
ZionSolutions (which shall not be unreasonably withheld or delayed), to adjust,
settle, compromise, and arbitrate claims or demands in favor of or against the
Trust, including claims for taxes, upon such terms as it deems advisable.

 

4.6            [Intentionally Deleted].

 

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4.7          Foreign Custodians.

 

(a)           The Trustee shall have the power to appoint foreign custodians as
agent of the Trustee to custody foreign securities holdings of the Trust or any
investment manager account.  Custody of foreign investments shall be maintained
with foreign custodians selected by the Trustee.  In the case of an investment
manager account, the Investment Manager shall have sole responsibility for the
decision to maintain the custody of foreign investments in its investment
manager account abroad, which decision shall be subject to the limitation
contained in the foregoing second sentence of this Section 4.7(a).  The Trustee
shall have no responsibility for losses to the Trust resulting from the acts or
omissions of any foreign custodian appointed by the Trustee unless due to the
foreign custodian’s fraud, negligence or willful misconduct.

 

(b)           The Trustee shall have the power to utilize any tax reclaim
procedures with respect to taxes withheld to which the Trust may be entitled
under applicable tax laws, treaties and regulations; provided that any exercise
of such power by the Trustee shall be on a reasonable efforts basis.

 

4.8          Securities Lending.  Pursuant to a written agreement between the
Trustee and ZionSolutions, the Trustee shall have authority to lend funds drawn
from the Letter of Credit and deposited with the Trust.

 

4.9          Retention and Removal of Professional Service Providers.  The
Trustee shall have the power to employ attorneys, accountants, agents, and
custodians as it shall deem advisable and in accordance with Section 3.2 to make
such payments thereof as the Trustee shall deem reasonable for the
implementation of the purpose of the Trust Agreements.  The Trustee shall have
the absolute right to dismiss any such agents for any reason whatsoever;
provided that the Trustee’s selection of an accounting firm shall be subject to
the prior consent of ZionSolutions, which consent shall not be unreasonably
withheld.

 

4.10        Right to Assign Disposal Capacity Assets.  The Trustee shall have
the power to make a Qualified Assignment of the Disposal Services Agreement, as
defined therein, and the power to make a Permitted Assignment of the Irrevocable
Easement for Disposal Capacity, as defined therein.

 

4.11        Delegation of Ministerial Powers.  The Trustee shall have the power
to delegate to other persons such ministerial powers and duties as it may deem
to be advisable.

 

4.12        Discretion in Exercise of Powers.  The Trustee shall have the power
to do any and all other acts which the Trustee shall deem proper to effectuate
the powers specifically conferred upon it by the Trust Agreement and these
Backup NDT Terms; provided, however, that this Section 4.12 shall not authorize
the Trustee to do any act or participate in any transaction which would
(a) contravene any provision of the Trust Agreement or these Backup NDT Terms;
or (b) violate the terms and conditions of, or cause the Trust held under the
Trust Agreement not to satisfy Applicable Regulatory Requirements.

 

18

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EXHIBIT A

 

DISBURSEMENT CERTIFICATE

Backup Decommissioning Trust

 

The undersigned, being a duly Authorized Officer of ZionSolutions, LLC, a
Delaware limited liability company (“ZionSolutions”), and, in such capacity,
being duly authorized and empowered to execute and deliver this certificate,
hereby certifies to the Trustee of the ZionSolutions, LLC Backup Decommissioning
Trust (the “Trust”), pursuant to Section 2.2(a)(i) of the Terms for Backup
Nuclear Decommissioning Trust Agreement (the “Backup NDT Terms”), between
ZionSolutions and the Trustee, as follows:

 

(a)           There is due and owing to each Payee identified in Exhibit 1
attached hereto (“Payees”)  [all/a portion of] the invoiced cost to
ZionSolutions for goods or services provided in connection with the
Decommissioning and other work required to achieve End State Conditions at the
Zion Station as evidenced by the Invoice Schedule (with supporting exhibits)
attached as Exhibit 1 hereto;

 

(b)           All such amounts due and owing to such Payees constitute Qualified
Costs;

 

(c)           All conditions precedent to the making of this disbursement set
forth in any agreement between each such Payee and ZionSolutions have been
fulfilled;

 

(d)           No Payee is a “disqualified person” within the meaning of
Section 4951 or Section 468A by reason of an affiliation with ZionSolutions or,
if any are, then the payment constitutes compensation or payment or
reimbursement of expenses which are reasonable and necessary to carry out the
purpose of the Trust(s) and the payment is not excessive;

 

(e)           The payment of the amounts owing meets Applicable Regulatory
Requirements, requirements of the Code, and all necessary consents and approvals
for such payment have been obtained;

 

(f)            Exhibit 1 attached hereto sets forth as of the date of this
Disbursement Certificate costs that cannot be disbursed or reimbursed from any
other fund established for the Decommissioning of the Plant (other than by
reason of any required deferral of payment of receivables);

 

(g)           An Event of Default has occurred as defined in the Asset Sale
Agreement.  However, ZionSolutions has complied with all applicable requirements
of Section 6.21 of the Asset Sale Agreement and the requested disbursement does
not exceed any applicable limitation of Section 2.1 of the Master Terms; and

 

(h)           Pursuant to Section 2.2(d)(iii) of the Backup NDT Terms:

 

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(      )       ZionSolutions has not failed to achieve a Site Restoration
Milestone; or

 

(      )       ZionSolutions has failed to achieve a Site Restoration Milestone,
and Exhibit 2 attached hereto sets forth a description of the Site Restoration
Milestone that ZionSolutions has failed to achieve, including the applicable
date on which the Site Restoration Milestone was to be achieved; and

 

(      )       Exhibit 2 includes the date on which the Site Restoration
Milestone was subsequently achieved; or

 

(      )       the Site Restoration Milestone has not been achieved and the
Receivables (or portion thereof) described in Exhibit 1 are subject to deferral
pursuant to Section 2.1 of the Backup NDT Terms.

 

Accordingly, subject to the requirements of Section 2.2(d) of the Backup NDT
Terms, you are directed to permit the disbursement of the amounts indicated on
Exhibit 1 hereto from the Trust in order to permit payment of such sum(s) to be
made to the aforementioned Payees for such purpose.  You are further directed to
disburse such sum(s), once withdrawn, directly to such Payees, in the manner
indicated on Exhibit 1 hereto.

 

Capitalized terms used herein without definition shall have the meanings given
to such terms in the Trust Agreements and the Backup NDT Terms.

 

CERTIFIED and sworn to this         day of
                        ,             .

 

 

 

ZIONSOLUTIONS, LLC

 

 

 

 

 

By:

 

 

 

Duly Authorized Officer

 

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EXHIBIT B

 

WITHDRAWAL CERTIFICATE
Backup Decommissioning Trust

 

The undersigned, being a duly Authorized Officer of ZionSolutions, LLC, a
Delaware limited liability company (“ZionSolutions”), and, in such capacity,
being duly authorized and empowered to execute and deliver this certificate,
hereby certifies to the Trustee of the ZionSolutions, LLC Backup Decommissioning
Trust (the “Trust”), pursuant to Section 2.2(a)(ii) of the Terms for Backup
Nuclear Decommissioning Trust Agreement (the “Backup NDT Terms”), between
ZionSolutions and the Trustee, as follows:

 

(a)           ZionSolutions has paid, and is entitled to reimbursement for,
amounts paid for goods or services provided in connection with the
Decommissioning and other work required to achieve End State Conditions at the
Zion Station as described in the schedule (with supporting exhibits) attached as
Exhibit 1 hereto;

 

(b)           All such amounts paid constitute Qualified Costs;

 

(c)           No payee was a “disqualified person” within the meaning of
Section 4951 or Section 468A by reason of an affiliation with ZionSolutions or,
if any were, then the payment constituted compensation or payment or
reimbursement of expenses which were reasonable and necessary to carry out the
purpose of the Trust and the payment was not excessive;

 

(d)           The payment of the amounts met Applicable Regulatory Requirements,
requirements of the Code, and all necessary consents and approvals for such
payment had been obtained;

 

(e)           Exhibit 1 attached hereto sets forth as of the date of this
Withdrawal Certificate costs that cannot be disbursed or reimbursed from any
other fund established for the nuclear decommissioning of the Plant (other than
by reason of any required deferral of payment of receivables);

 

(f)            An Event of Default has occurred as defined in the Asset Sale
Agreement.  However, ZionSolutions has complied with all applicable requirements
of Section 6.21 of the Asset Sale Agreement and the requested disbursement does
not exceed any applicable limitation of Section 2.1 of the Master Terms; and

 

(g)           Pursuant to Section 2.2(d)(iii) of the Backup NDT Terms:

 

(      )       ZionSolutions has not failed to achieve a Site Restoration
Milestone; or

 

(      )       ZionSolutions has failed to achieve a Site Restoration Milestone,
and Exhibit 2 attached hereto sets

 

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forth a description of the Site Restoration Milestone that ZionSolutions has
failed to achieve, including the applicable date on which the Site Restoration
Milestone was to be achieved; and

 

(      )       Exhibit 2 includes the date on which the Site Restoration
Milestone was subsequently achieved; or

 

(      )       the Site Restoration Milestone has not been achieved and the
Receivables (or portion thereof) described in Exhibit 1 are subject to deferral
pursuant to Section 2.1 of the Backup NDT Terms.

 

Accordingly, subject to the requirements of Section 2.2(d) of the Backup NDT
Terms, you are directed to permit the disbursement of the amounts indicated on
Exhibit 1 hereto from the Trust in order to reimburse ZionSolutions for such
payments.  You are further directed to disburse such sum(s), once withdrawn,
directly to “ZionSolutions, LLC.”

 

Capitalized terms used herein without definition shall have the meanings given
to such terms in the Trust Agreements and the Backup NDT Terms.

 

CERTIFIED and sworn to this        day of                        ,            .

 

 

 

ZIONSOLUTIONS, LLC

 

 

 

 

 

By:

 

 

 

Duly Authorized Officer

 

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EXHIBIT C

 

CROSS-TRADING INFORMATION

 

As part of the Cross-Trading Program covered by the Department of Labor
Prohibited Transaction Exemption (“PTE”) 95-56 for Mellon Bank, N.A. and its
affiliates (“Mellon”), Mellon is to provide to ZionSolutions the following
information:

 

I.             The Existence of the Cross-Trading Program

 

Mellon has developed and intends to utilize, wherever practicable, a
Cross-Trading Program for Indexed Accounts and Large Accounts as those terms are
defined in PTE 95-56.

 

II.            The “Triggering Events” Creating Cross-Trade Opportunities

 

In accordance with PTE 95-56, three “Triggering Events” may create opportunities
for Cross-Trading transactions.  They are generally the following (see PTE 95-56
for more information):

 

1.                                      A change in the composition or weighting
of the index by the independent organization creating and maintaining the index;

 

2.                                      A change in the overall level of
investment in an Indexed Account as a result of investments and withdrawals on
the Indexed Account’s opening date, where the Indexed Account is a bank
collective fund, or on any relevant date for non-bank collective funds;
provided, however, a change in an Indexed Account resulting from investments or
withdrawals of assets of Mellon’s own plans (other than Mellon’s defined
contributions plans under which participants may direct among various investment
options, including Indexed Accounts) are excluded as a “Triggering Events”; or

 

3.                                      A recorded declaration by Mellon that an
accumulation of cash in an Indexed Account attributable to interest or dividends
on, and/or tender offers for portfolio securities equal to not more than .5% of
the Indexed Account’s total value has occurred.

 

III.          The Pricing Mechanism Utilized for Securities Purchased or Sold

 

Securities will be valued at the current market value for the securities on the
date of the crossing transaction.

 

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Equity Securities - the current market value for the equity security will be the
closing price on the day of trading as determined by an independent pricing
service; unless the security was added to or deleted from an index after the
close of trading, in which case the price will be the opening price for that
security on the next business day after the announcement of the addition or
deletion.

 

Debt Securities - the current market value of the debt security will be the
price determined by Mellon as of the close of the day of trading according to
the Securities and Exchange Commission’s Rule 17a-7(b)(4) under the Investment
Company Act of 1940. Debt securities that are not reported securities or traded
on an exchange, will be valued based on an average of the highest current
independent bids and the lowest current independent offers on the day of cross
trading.  Mellon will use reasonable inquiry to obtain such prices from at least
three independent sources that are brokers or market makers.  If there are fewer
than three independent sources to price a certain debt security, the closing
price quotations will be obtained from all available sources.

 

IV.          The Allocation Method

 

Direct cross-trade opportunities will be allocated among potential buyers or
sellers of debt or equity securities on a pro-rata basis.  With respect to
equity securities, please note Mellon imposes a trivial dollar amount constraint
to reduce excessive custody ticket charges to participating accounts.

 

V.            Other Procedures Implemented by Mellon for its Cross-Trading
Practices

 

Mellon has developed certain internal operational procedures for cross-trading
debt and equity securities.  These procedures are available upon request.

 

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