File No. 70-8267
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
CERTIFICATE PURSUANT TO
RULE 24
OF COMPLETION OF
TRANSACTIONS
JERSEY CENTRAL POWER & LIGHT COMPANY
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------------X
In the Matter of :
Jersey Central Power & Light Company : Certificate Pursuant
to Rule 24 of
Completion
SEC File No. 70-8267 : of Transactions
:
(Public Utility Holding Company
Act of 1935) :
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To the Members of the Securities and Exchange Commission:
The undersigned, Jersey Central Power & Light Company
("JCP&L"), certifies, pursuant to Rule 24 of the General Rules
and Regulations under the Public Utility Holding Company Act of
1935 (the "Act"), that the transactions proposed in the
Application, as amended, filed in SEC File No. 70-8267 have been
carried out in accordance with the terms and conditions of, and
for the purposes requested in, said Application and pursuant to
the Commission's Order, dated December 27, 1993, with respect to
said Application as follows:
1. On December 30, 1993, JCP&L executed the Sublease
Agreement, dated as of December 1, 1993, with Northampton Water
Supply, Inc. ("Northampton"), pursuant to which JCP&L has
subleased to Northampton a minimum of 135 acre feet of storage in
the Merrill Creek Reservoir Project. The Sublease Agreement
became effective on January 17, 1994.
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2. The following exhibits are filed herewith in Item 6:
B-1 Sublease Agreement, dated as of December 1,
1993, between JCP&L and Northampton.
F-1(a) "Past-tense" opinion of Berlack, Israels &
Liberman.
F-2(a) "Past-tense" opinion of Scott L. Guibord,
Esq.
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935, THE UNDERSIGNED COMPANY HAS DULY
CAUSED THIS STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
JERSEY CENTRAL POWER & LIGHT COMPANY
By:_____________________________
Don W. Myers
Vice President and Treasurer
Dated: January 31, 1994
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EXHIBITS TO BE FILED BY EDGAR
Exhibits:
B-1 Sublease Agreement, dated as of December 1,
1993, between JCP&L and Northampton.
F-1(a) "Past-tense" opinion of Berlack, Israels &
Liberman.
F-2(a) "Past-tense" opinion of Scott L. Guibord,
Esq.
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Exhibit B-1
SUBLEASE AGREEMENT
dated as of
December 1, 1993
between
JERSEY CENTRAL POWER & LIGHT COMPANY,
as Sublessor
and
NORTHAMPTON WATER SUPPLY, INC.
as Sublessee
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SUBLEASE
Sublease Agreement, dated as of December 1, 1993,
between JERSEY CENTRAL POWER & LIGHT COMPANY, a New Jersey
corporation (the "Sublessor"), and NORTHAMPTON WATER SUPPLY,
INC., a Delaware corporation (the "Sublessee").
W I T N E S S E T H:
WHEREAS, the Sublessor is a party to that certain Lease
Agreement, dated as of June 1, 1988 (the "Lease"), between
Sublessor, as lessee, and United Jersey Bank, solely in its
capacity as owner trustee, as lessor (the "Lessor");
WHEREAS, pursuant to the Lease, Sublessor has leased an
undivided 8.37% ownership interest in the Merrill Creek Reservoir
("Merrill Creek"), which, together with Sublessor's rights under
the Ownership Agreement (as defined in the Lease), entitle
Sublessor to the use of Merrill Creek to provide compensation
releases ("Make-Up Water") to the Delaware River pursuant to
requirements of the Delaware River Basin Commission (the use of
Make-Up Water for such purposes being referred to herein as
"Make-Up Purposes") for certain of the Sublessor's electric
generating units; and
WHEREAS, on the terms and conditions set forth herein,
Sublessee desires to sublease from Sublessor, and Sublessor
desires to sublease to Sublessee, certain storage in Merrill
Creek to provide Make-Up Water for the cogeneration project (the
"Northampton Project") to be constructed in Northampton,
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Pennsylvania, by Northampton Generating Company, L.P. ("Owner"),
an affiliate of Sublessee.
NOW, THEREFORE, in consideration of the premises and
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Definitions. Capitalized terms used herein
and not otherwise defined herein shall have the meanings assigned
to them in the Lease.
Section 2. Sublease of Capacity; Term.
(a) The term of this Sublease (the "Term") shall
commence on July 30, 1995 and end on July 30, 2020 (the
"Expiration Date") unless extended, renewed or earlier terminated
as hereinafter provided.
(b) On the terms and conditions set forth herein,
Sublessor agrees to sublease to Sublessee, and Sublessee hereby
subleases from Sublessor, 135 acre-feet of storage in Merrill
Creek (the "Committed Capacity") during the Term hereof.
Sublessee shall be deemed to have subleased the entire Committed
Capacity in each calendar year of the Term regardless of the
actual cumulative volume of releases of Make-Up Water allocated
to Sublessee in such year.
(c) (i) If the cumulative volume of releases of
Make-Up Water allocated to Sublessee exceeds the Committed
Capacity in any calendar year of the Term, Sublessee shall also
sublease from Sublessor, and Sublessor shall also sublease to
Sublessee, on the terms and conditions set forth herein, an
additional 135 acre-feet of storage in Merrill Creek (the
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"Standby Capacity") in such year regardless of the actual amount
that such allocation exceeds the Committed Capacity.
(ii) If the cumulative volume of releases of
Make-Up Water in Merrill Creek to be allocated to Sublessee in
any calendar year of the Term will exceed the aggregate of the
Committed Capacity and the Standby Capacity in such calendar year
(an "Extra Capacity Year"), Sublessee shall have the right to
sublease from Sublessor, and Sublessor shall, upon exercise of
such right, sublease to Sublessee, in such year, on the terms and
conditions set forth herein, an amount of storage in Merrill
Creek equal to such excess (the "Additional Capacity"; together
with the Committed Capacity and the Standby Capacity, the
"Capacity"); provided, however, that the right of Sublessee to
sublease Additional Capacity shall be expressly subject to such
Additional Capacity being "Available" Capacity. Sublessee may
sublease the Additional Capacity in any Extra Capacity Year by
providing Sublessor with Information Reports (as defined below)
as to its requirements for said Additional Capacity. As used
herein, Additional Capacity is "Available" only if and to the
extent that, (A) pursuant to the Lease or otherwise, Sublessor is
entitled to storage in Merrill Creek for Make-Up Purposes with
respect to such Additional Capacity, (B) neither Sublessor nor
any of its Affiliates requires or may require such Additional
Capacity based on existing or projected needs and (C) the right
to use such Additional Capacity has not been Transferred (as
defined in Section 8(a)) by Sublessor nor has Sublessor entered
into a commitment to make such a Transfer.
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(d) (i) It is the intention of the parties that, for
purposes of scheduling and accounting for releases of Make-Up
Water from Merrill Creek, the Northampton Project shall be
considered a generating facility of Sublessor. Accordingly,
Sublessee shall provide Sublessor with such information
("Information Reports") regarding the operation of the
Northampton Project as will enable Sublessor to supply the
Merrill Creek Project Director (the "Project Director") with
sufficient information to enable the Project Director to release
Make-Up Water for the Northampton Project in accordance with
Merrill Creek operational procedures and guidelines. The
Information Reports shall be provided to Sublessor by Sublessee
on a daily or such other basis as may be agreed to from time to
time by the parties, and in such form as the parties shall agree
to from time to time and which is sufficient to enable Sublessor
to report to the Project Director as described above. Sublessor
hereby agrees to instruct the Project Director to release Make-
Up Water for the Northampton Project as if the Northampton
Project were a generating facility of Sublessor within the
meaning of Section 1.01 of the Ownership Agreement; provided,
however, that (A) Make-Up Water shall not be released for the
Northampton Project in any calendar year of the Term if the
cumulative volume of releases of Make-Up Water to be allocated to
Sublessee in such year would exceed the Committed Capacity and
Standby Capacity unless (x) Sublessee has elected to sublease
such excess capacity as Additional Capacity pursuant to paragraph
(c)(ii) above and (y) such Additional Capacity is Available and
(B) in no event shall Make-Up Water be released for the
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Northampton Project on any day that Make-Up Water releases are
not otherwise being made for a generating facility of a Merrill
Creek Owner.
(ii) Sublessee shall be required to sublease the
Committed Capacity and, if necessary, the Standby Capacity, in
each calendar year, and Sublessee shall have the right, subject
to the limitations described herein, to sublease the Additional
Capacity in each Extra Capacity Year. Sublessee agrees not to
sublease, purchase or otherwise utilize Merrill Creek Make-Up
Water capacity for the Northampton Project from any Merrill Creek
Owner (other than Sublessor) whether or not during an Extra
Capacity Year.
Section 3. Rentals.
(a) Sublessee shall pay to Sublessor rent for the
Committed Capacity in semi-annual installments in the amounts and
on the dates set forth in Exhibit A hereof.
(b) If Sublessee has subleased the Standby
Capacity in any year, Sublessee shall also pay to Sublessor, in
addition to the rent payable for the Committed Capacity, semi-
annual installments of rent on the dates and in the amounts set
forth in Exhibit B hereof in the year following the sublease of
the Standby Capacity; provided, however, that if in such year
Sublessee has also subleased any Additional Capacity, the
aforesaid rent payments for the Standby Capacity shall be
increased in accordance with the formula set forth in Exhibit C
hereof. Rent payable under this paragraph (b), together with
rent payable under paragraph (a) above, is referred to herein as
the "Basic Rent".
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(c) Sublessee shall pay to Sublessor any and all
Supplemental Rent (as hereinafter defined) promptly as the same
shall become due and payable. Basic Rent and Supplemental Rent
are collectively referred to herein as "Rent".
(d) All Rent payable hereunder shall be paid by
Sublessee to such account at such institution as Sublessor shall
specify in writing from time to time at least five Business Days
prior to the applicable payment dates. Each payment of Rent
shall be made by Sublessee in Federal funds, on or before 12:00
Noon, New York City time, on the scheduled date on which such
payment shall be due, unless such scheduled date shall not be a
Business Day, in which case such payment shall be due and payable
on the next succeeding Business Day. Rent shall be deemed paid
when received in such account at such institution.
(e) If any Basic Rent shall not be paid on the
date and at or prior to the time when due (without taking into
account applicable grace and notice periods), Sublessee shall pay
to Sublessor, as Supplemental Rent, interest on such overdue
amount at the rate of ten percent (10%) per annum (or, if such
rate shall at any time exceed the maximum amount permitted by
law, then at such lesser rate that shall be equal to the maximum
rate permitted by law) from and including the due date thereof to
but excluding the date of payment thereof. Such interest
constituting Supplemental Rent shall be payable in the same
manner as Basic Rent within five (5) Business Days after demand
by Sublessor. If any Supplemental Rent shall not be paid on the
date and at or prior to the time when due (without taking into
account applicable grace and notice periods), Sublessee shall pay
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to Sublessor as Supplemental Rent interest on such overdue
Supplemental Rent at the rate of ten percent (10%) per annum (or,
if such rate shall at any time exceed the maximum rate permitted
by law, then at such lesser rate that shall be equal to the
maximum rate permitted by law) from and including the date
thereof to but excluding the date of payment thereof. If any
Rent shall be paid on the date when due, but after 12:00 Noon,
New York City time, at the place of payment, interest shall be
payable as aforesaid for one day.
Section 4. Renewal.
(a) This Sublease may be renewed at the end of
the Term only as provided in this Section 4.
(b) If Sublessee desires to renew this Sublease,
Sublessee shall provide notice of the same, specifying the
renewal term ("Renewal Term") proposed by Sublessee, to Sublessor
not less than twelve (12) months and not more than twenty-four
(24) months prior to the Expiration Date. Sublessor shall have
60 days from the receipt of said notice to advise Sublessee
whether any Capacity for such proposed Renewal Term is Available.
If Sublessor advises Sublessee by such 60th day that Capacity is
so Available, the parties hereto shall thereupon negotiate in
good faith with respect to the Renewal Term, rentals and other
provisions to be included in the renewal of this Sublease to the
extent of the Available Capacity. If no Capacity is Available,
or if the parties, following good faith negotiations, fail to
agree on any of the renewal terms by the Expiration Date, then
this Sublease shall terminate on the Expiration Date without
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liability on any party except for the Surviving Obligations (as
defined in Section 10(a) hereof).
(c) Any renewal or extension of the Term shall be
subject to receipt by Sublessor of all necessary regulatory
authorizations and the provisions of the Ownership Agreement.
Section 5. Representations and Warranties.
(a) Sublessor represents and warrants to the
Sublessee as follows:
(i) Due Incorporation, etc. Sublessor is a
corporation duly incorporated and validly existing in good
standing under the laws of the State of New Jersey and has
the corporate power and authority to carry on its business,
to own or lease its property, to sublease the Capacity, and
to enter into and perform its obligations under this
Sublease.
(ii) Authorization. The execution, delivery
and performance by Sublessor of this Sublease has been duly
authorized by all necessary corporate action on the part of
Sublessor.
(iii) Enforceability. This Sublease has
been duly executed and delivered by Sublessor and, assuming
the due authorization, execution and delivery hereof by
Sublessee, is a legal, valid and binding obligation of
Sublessor, enforceable against Sublessor in accordance with
its terms, except as such enforceability may be limited by
(A) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the rights of
creditors generally and (B) general equitable principles
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(regardless of whether such enforceability is considered in
a proceeding at law or in equity).
(iv) Approvals. No consents, authorizations
or approvals of any agency, regulatory or other governmental
body, or any other person, are required for the execution,
delivery and performance by Sublessor of this Sublease,
except for appropriate orders of the Securities and Exchange
Commission under the Public Utility Holding Company Act of
1935 and the New Jersey Board of Regulatory Commissioners
under the New Jersey Public Utilities Law which have been
duly obtained and are in full force and effect.
(v) Litigation. There is no action, suit,
investigation or proceeding pending or, to the knowledge of
Sublessor, threatened against Sublessor or its properties
before any court, arbitrator or administrative or
governmental body which, individually or in the aggregate
(so far as Sublessor now can reasonably foresee), will
materially and adversely affect the ability of Sublessor to
perform its obligations hereunder.
(vi) No Violation or Default. The execution,
delivery and performance by Sublessor of this Sublease do
not contravene or violate any applicable law or regulation
or the articles of incorporation or by-laws of Sublessor or
constitute a violation of or default under any agreement,
including, but not limited to, the Ownership Agreement
(subject to the right of first refusal of the Merrill Creek
Owners thereunder), the Lease or any Operative Document, or
any judgment, injunction, order, decree or other instrument
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binding upon Sublessor, which contravention, violation or
default, in the case of any of the foregoing (other than the
articles of incorporation or by-laws of Sublessor), could
materially impair its ability to perform hereunder.
(vii) No Lease Event of Default; No Basis
for Termination. There is no Lease Event of Default which
has occurred and is continuing and, to the best knowledge of
Sublessee, no event has occurred or circumstances exist,
which with the giving of notice or the passage of time would
constitute a Lease Event of Default. To the best knowledge
of Sublessor, there are no circumstances now existing which
would provide a basis for early termination of this Sublease
pursuant to Section 10 hereof.
(b) Sublessee represents and warrants to the
Sublessor as follows:
(i) Due Organization, etc. Sublessee is a
corporation duly incorporated and validly existing in good
standing under the laws of the State of Delaware and has the
corporate power and authority to carry on its business, to
own or lease its property, and to enter into and perform its
obligations under this Sublease. Sublessee has not failed
to qualify to do business in any jurisdiction where the
failure so to qualify would materially and adversely affect
the properties, business or financial condition of Sublessee
or could affect its ability to perform any of its
obligations under this Sublease.
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(ii) Authorization. The execution, delivery
and performance by Sublessee of this Sublease has been duly
authorized by all necessary action on the part of Sublessee.
(iii) Enforceability. This Sublease has
been duly executed and delivered by Sublessee and, assuming
the due authorization, execution and delivery hereof by
Sublessor, is a legal, valid and binding obligation of
Sublessee, enforceable against Sublessee in accordance with
its terms, except as such enforceability may be limited by
(A) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the rights of
creditors generally and (B) general equitable principles
(regardless of whether such enforceability is considered in
a proceeding at law or in equity).
(iv) Governmental Actions. No consents,
authorizations or approvals of any agency, regulatory or
other governmental body, or any other person, are required
for the execution, delivery and performance by Sublessee of
this Agreement.
(v) Project. Sublessee will utilize the
Capacity solely to provide Make-Up Water to the Delaware
River for Make-Up Purposes for the Northampton Project.
(vi) Litigation. There is no action, suit,
investigation or proceeding pending or, to the knowledge of
Sublessee, threatened against Sublessee or its properties
before any court, arbitrator or administrative or
governmental body which, individually or in the aggregate
(so far as Sublessee now can reasonably foresee), will have
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a material adverse effect on the properties, business or
financial condition of Sublessee or (so far as Sublessee now
can reasonably foresee) will materially and adversely affect
the ability of Sublessee to perform its obligations
hereunder.
(vii) No Violation or Default. The
execution, delivery and performance by Sublessee of this
Sublease does not contravene or violate any applicable law
or regulation or the certificate of incorporation or by-
laws of Sublessee or constitute a violation of or default
under any agreement, or any judgment, injunction, order,
decree or other instrument binding upon Sublessee, which
contravention, violation or default, in the case of any of
the foregoing (other than the certificate of incorporation
or by-laws of Sublessee) could materially impair its ability
to perform hereunder.
Section 6. Subject to; Disclaimer of Warranties.
(a) This Sublease is expressly subject and
subordinate to the provisions of the Lease and the other
Operative Documents, and all other agreements to which the Lease
is subject, including the rights of Lessor to enforce remedies
under Section 17 of the Lease if a Lease Event of Default shall
have occurred and be continuing.
(b) SUBLESSOR SUBLEASES, AND SUBLESSEE TAKES, THE
CAPACITY AS IS, AND SUBLESSOR SHALL NOT BE DEEMED TO HAVE MADE,
AND SUBLESSOR HEREBY DISCLAIMS, ANY REPRESENTATION OR WARRANTY,
EITHER EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER (EXCEPT AS
EXPRESSLY PROVIDED HEREIN), INCLUDING WITHOUT LIMITATION, THE
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DESIGN OR CONDITION OF THE PROJECT OR THE CAPACITY OR ANY PART
THEREOF, THE MERCHANTABILITY THEREOF OR THE FITNESS THEREOF FOR
ANY PARTICULAR PURPOSE, TITLE TO THE INTEREST, THE QUALITY OF
PROJECT MATERIALS OR WORKMANSHIP OR CONFORMITY THEREOF TO PLANS
OR SPECIFICATIONS, OR THE PRESENCE OR ABSENCE OF ANY LATENT OR
OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, NOR SHALL SUBLESSOR
BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING
LIABILITY IN TORT, STRICT OR OTHERWISE), IT BEING AGREED THAT ALL
SUCH RISKS, AS BETWEEN SUBLESSOR AND SUBLESSEE, ARE TO BE BORNE
BY SUBLESSEE. THE PROVISIONS OF THIS PARAGRAPH (b) HAVE BEEN
NEGOTIATED, AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND
NEGATION OF ANY REPRESENTATION OR WARRANTY BY SUBLESSOR, EXPRESS
OR IMPLIED (EXCEPT AS EXPRESSLY PROVIDED HEREIN), WITH RESPECT TO
THE PROJECT, THIS SUBLEASE, THE CAPACITY OR ANY PART THEREOF THAT
MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT OR
OTHERWISE. NOTHING CONTAINED IN THIS PARAGRAPH (b) SHALL BE
CONSTRUED AS A WAIVER OF ANY WARRANTY OR OTHER CLAIM AGAINST ANY
MANUFACTURER, SUPPLIER OR INSTALLER.
(c) Sublessee hereby acknowledges and agrees that
Sublessee's obligations hereunder, including (without limitation)
the obligation to pay Rent, shall not be affected by the failure
of Merrill Creek to effect releases of Make-Up Water for Make-Up
Purposes for any reason, or by any of the following
circumstances: (i) any defect in or failure of the title,
merchantability, condition, design, compliance with
specifications, operation, quality or fitness for use of the
Project, the Capacity or any part thereof; (ii) any damage to,
removal, abandonment, theft, dismantlement, shutdown, breakdown,
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failure, salvage, loss, scrapping or destruction of or any
requisition or taking of the Project, the Capacity, the Site, any
Component or Alteration, or any part thereof or any interference,
interruption or cessation in the use or possession of the
Interest, the Project, the Site or any Component or Alteration by
Lessee or any other Person for any reason whatsoever or of
whatever duration; (iii) any restriction, prevention or
curtailment of or interference with any use of the Capacity,
Interest, the Project, the Site, any Component or Alteration, or
any part thereof; (iv) any defect in, or any Lien on, title to
the Interest, the Project, the Site, any Component or Alteration,
or any part thereof; (v) any change, waiver, extension,
indulgence or other action or omission in respect of any
obligation or liability of Lessor; (vi) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to Sublessee,
Sublessor, Indenture Trustee, Lessor, Owner Participant, any
Holder, or any other Person, or any action taken with respect to
this Sublease or the Lease by any trustee or receiver of any
Person mentioned above, or by any court; (vii) any claim that
Sublessee has or might have against any Person, including without
limitation, Indenture Trustee, Owner Participant or any Holder
(but shall not constitute a waiver of any such claim); (viii) any
breach or failure of any representation or warranty made in, or
any failure on the part of any Person (including, without
limitation, Lessor, Indenture Trustee, Owner Participant and the
Holders) to perform or comply with any of the terms of, any
Operative Document or any other agreement; (ix) any failure of
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any Other Owner to perform its obligations under the Ownership
Agreement; (x) any doctrine of force majeure, impossibility,
frustration of purpose, failure of consideration, or any similar
legal or equitable doctrine; (xi) any amendment of or other
change to, or any assignment of rights under, any waiver, action
or omission to act under or in respect of, or any exercise or
non-exercise of any right or remedy under, the Lease, any other
Operative Document or any other agreement; or (xii) any other
occurrence similar to the foregoing, whether or not Sublessee
shall have notice or knowledge of any of the foregoing.
(d) It is understood and agreed that Sublessee
has no rights whatsoever under the Ownership Agreement, Lease or
any other Operative Documents, and that Sublessor may, in its
sole discretion, take any and all actions, including agreeing to
any amendments, modifications or waivers with respect thereto,
without the consent of or notice to Sublessee.
Section 7. Sublease Defaults.
(a) Any of the following events shall constitute
a Sublessee Default:
(i) Sublessee shall fail to pay (A) any
installment of Basic Rent within five (5) Business Days
after written notice of such failure from Sublessor; or (B)
any Supplemental Rent (or other amount due hereunder) within
30 days after written notice of such failure from Sublessor;
or
(ii) Sublessee shall fail to perform or
observe any other covenant or agreement to be performed or
observed by it under this Sublease and such failure shall
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continue for a period of 30 days after there shall have been
given notice of said failure to Sublessee by Sublessor,
stating it is a "Notice of Default" and requiring it to be
remedied, provided, however, that if the failure stated in
any such Notice of Default cannot be corrected within the
applicable period, it shall not constitute the basis of a
Sublessee Default hereunder if (1) corrective action capable
of remedying such failure is instituted by Sublessee within
the applicable period and is diligently pursued until the
failure is corrected; (2) the Sublessee shall have certified
to Sublessor prior to the end of the applicable period that
said failure is such that it can be corrected but not within
the applicable period, that corrective action capable of
remedying such failure has been instituted and is being
diligently pursued and that such corrective action will be
diligently pursued until said failure is corrected; and (3)
such default does not impair in any material respect the
rights of the Sublessor hereunder or under any Operative
Document, or the rights of Owner Trustee, Owner Participant
or Indenture Trustee in the Interest, the Trust Estate, the
Indenture Estate, or title thereto or any interest therein;
or
(iii) any representation or warranty made by
Sublessee hereunder shall prove to have been incorrect in
any material respect and shall remain uncured for a period
of 30 days after notice of said inaccuracy to Sublessee by
Sublessor stating it is a "Notice of Default" and requiring
it to be remedied; or
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(iv) (A) Sublessee shall commence a
voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its
debts under any bankruptcy, insolvency, receivership or
other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its
property, or shall consent to any such relief or to the
appointment or taking possession by any such official or
agency in an involuntary case or other proceeding commenced
against it, or shall make a general assignment for the
benefit of creditors, or shall take any corporate action to
authorize any of the foregoing; or (B) an involuntary case
or other proceeding shall be commenced against Sublessee
seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency,
receivership or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official or agency of
it or a substantial part of its property, and such
involuntary case or other proceeding shall remain
undismissed or unstayed for a period of 90 days.
(b) Upon the occurrence of any Sublessee Default
and so long as the same shall be continuing, Sublessor, at its
option, may declare this Sublease to be in default by notice to
such effect given to Sublessee (except in the case of any
Sublessee Default specified in paragraph (a)(iv), in which case
no notice shall be required), and at any time thereafter
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Sublessor may, to the extent permitted by applicable law,
exercise one or more of the following remedies, as Sublessor in
its sole discretion shall elect:
(i) Sublessor, by notice to Sublessee
(except in the case of any Sublessee Default specified in
paragraph (a)(iv), in which case no notice shall be
required), may terminate this Sublease; and
(ii) Sublessor may sell all or an undivided
partial interest in the Capacity, at public or private sale,
as Sublessor may determine, free and clear of any rights of
Sublessee in the Capacity and without any duty to account to
Sublessee with respect to such action or inaction or any
proceeds with respect thereto; and
(iii) Sublessor, by notice to Sublessee
(except in the case of any Sublessee Default specified in
paragraph (a)(iv), in which case no notice shall be
required), may accelerate all of the Basic Rent under this
Sublease, in which case all Basic Rent payable until the
Expiration Date shall be immediately due and payable; and
(iv) Sublessor may exercise any other right
or remedy that may be available to it under applicable law
or proceed by appropriate court action to enforce the terms
hereof or to recover damages for the breach hereof.
(c) No termination of this Sublease in whole or
in part or exercise of any remedy under paragraph (b) shall
relieve Sublessee of any of its liabilities hereunder. In
addition, Sublessee shall be liable for any and all unpaid Rent
due hereunder before, after or during the exercise of any of the
18
<PAGE>
foregoing remedies. Sublessee shall also pay all reasonable
legal fees and other costs and expenses incurred by Sublessor by
reason of the occurrence of any Sublessee Default or the exercise
of Sublessor's remedies with respect thereto.
(d) To the extent permitted by applicable law, no
remedy under this Section 7 is intended to be exclusive, but each
shall be cumulative and in addition to any other remedy provided
under this Section 7 hereof or otherwise available to Sublessor
at law or in equity or otherwise. No express or implied waiver
by Sublessor of any Sublessee Default hereunder shall in any way
be, or be construed to be, a waiver of any future or subsequent
Sublessee Default. The failure or delay of Sublessor in
exercising any rights granted it hereunder upon any occurrence of
any Sublessee Default shall not constitute a waiver of any such
right upon the continuation or recurrence of any such default and
any single or partial exercise of any particular right by
Sublessor shall not exhaust the same or constitute a waiver of
any other right provided herein. To the extent permitted by
applicable law, Sublessee hereby waives any rights now or
hereafter conferred by statute or otherwise which may require
Sublessor to sell, lease or otherwise use the Capacity in
mitigation of Sublessee's damages as set forth in this Section 7
hereof or which may otherwise limit or modify any of Sublessor's
rights and remedies provided herein. Notwithstanding the
provisions set forth in the immediately preceding sentence, if
Sublessor is, pursuant to Section 7(b)(ii) or otherwise, able to
sell, resublease or otherwise dispose of Sublessee's interest in
the Capacity (it being understood that the same shall not have
19
<PAGE>
been deemed to occur until after Sublessor shall have disposed of
all of its Merrill Creek capacity except for 135 acre-feet), then
the consideration received by Sublessor in exchange for such
sale, resublease or other disposition of the Capacity shall be
credited against Sublessee's obligation to pay Rent pursuant to
this Sublease; provided, that, in no event will Sublessee be
entitled to any surplus.
Section 8. Rights to Assign or Sublease.
(a) Sublessee may not assign, sublease or
otherwise transfer (each, a "Transfer") any of its rights
hereunder, or create or suffer to exist any Liens on or with
respect to the Capacity or the Rent.
(b) Sublessor shall be free to Transfer any of
its Merrill Creek entitlement from time to time without
restriction or limitation and free and clear of any interest of
Sublessee therein; provided, however, that Sublessor shall not
effect any Transfer (i) if such Transfer would cause Sublessor to
be unable to provide the Committed Capacity to Sublessee as
provided herein, unless the transferee agrees to be bound by the
terms hereof and has the power and authority to perform the
obligations of the Sublessor hereunder, or (ii) if such Transfer
would cause Sublessor to be unable to provide the Standby
Capacity as provided herein unless Sublessor has first complied
with paragraph (c) below.
(c) If Sublessor shall desire to effect any
Transfer of its Merrill Creek entitlement as described in
paragraph (b)(ii) above, Sublessor shall not do so unless it
shall have, subject to the terms of the Ownership Agreement,
20
<PAGE>
first offered to Sublessee in writing an opportunity to acquire
such entitlement (up to 135 acre-feet) upon terms no less
advantageous than those of the proposed Transfer. If Sublessee
shall not have notified Sublessor that it accepts such offer in
writing within 30 days of receipt of such offer, the offer shall
be considered rejected, and Sublessee's right hereunder to
sublease the Standby Capacity to which such entitlement relates
shall terminate. If Sublessee shall have accepted such offer,
then the transfer of the entitlement shall be made to Sublessee
on the terms and conditions set forth in the offer, and
Sublessee's right hereunder to sublease the Standby Capacity to
which such entitlement relates shall terminate.
Section 9. Payment of Certain Costs, etc.
(a) Sublessee shall pay to Sublessor, within five
Business Days of demand by Sublessor, Sublessee's pro rata share
(based on the volume of Make-Up Water releases allocated to
Sublessee) of (i) Sublessor's costs, as specified in clauses (a)
and (b) of the second sentence of Section 7.05 of the Ownership
Agreement, to replenish depleted storage utilized to provide
Make-Up Water for the Northampton Project, (ii) Sublessor's
operation, maintenance and other expenses attributable to the
Merrill Creek Project and (iii) Sublessor's depreciation charges
attributable to the Merrill Creek Project. The amounts owing by
Sublessee as aforesaid shall be considered Supplemental Rent and,
with respect to clauses (i) and (ii), shall be determined based
on billing by the Merrill Creek Project office to Sublessor.
(b) Upon execution and delivery hereof, Sublessee
shall pay to Sublessor, as Supplemental Rent, $20,000 in respect
21
<PAGE>
of Sublessor's transaction costs, including legal fees and
expenses, associated with the execution and delivery of this
Sublease. Upon request, Sublessor shall provide Sublessee with
invoices for such costs in reasonable detail.
Section 10. Early Termination.
(a) Pursuant to Section 15.1(a)(iv)(B) of the
Lease, Sublessor may not enter into this Sublease if, in the
reasonable opinion of Owner Participant, this Sublease results in
adverse tax consequences to Owner Participant as therein
provided. Notwithstanding anything in this Agreement to the
contrary, the parties hereto agree that if, in the reasonable
opinion of Owner Participant, this Sublease does result in such
adverse tax consequences, this Sublease shall immediately
terminate, without obligation or liability on either party except
(i) for Rent accrued and unpaid to the date of such termination
and (ii) arising from a breach or default hereunder that occurred
prior to the date of such termination (clauses (i) and (ii) being
collectively referred to as the "Surviving Obligations").
(b) Notwithstanding anything in this Agreement to
the contrary, this Sublease shall also terminate, without
liability on either party except for the Surviving Obligations,
if any regulatory authority having jurisdiction over Sublessor or
any of its Affiliates shall have issued an order requiring that
the Capacity be made available for use by Sublessor or any such
Affiliate.
(c) Unless a Sublessee Default shall have
occurred and be continuing, Sublessee may at any time elect to
terminate this Sublease under this Section 10(c) by delivering to
22
<PAGE>
Sublessor an irrevocable written notice designating a termination
date ("Termination Date"), which Termination Date shall be not
earlier than the first Basic Rent payment date following the
second anniversary of the receipt of such written notice. On
such Termination Date, Sublessee shall pay to Sublessor an early
termination fee of $100,000. Except for such fee and the
Surviving Obligations, such termination shall be without
obligation or liability on either party.
Section 11. Miscellaneous.
(a) Amendments, Etc. Neither this Sublease nor
any of the terms hereof may be amended, supplemented, waived or
modified orally, but only by an instrument in writing signed by
the parties hereto.
(b) Survival of Agreements. The representations,
warranties and obligations of the parties provided for herein
shall survive the execution and delivery of this Sublease and the
consummation of the transactions contemplated hereunder and
thereunder and the expiration or termination of this Sublease.
(c) Governing Law. This Sublease shall be
governed by and construed in accordance with the laws of the
State of New Jersey applicable to contracts made and to be
performed entirely within such State.
(d) Headings, Etc. The headings of the various
sections of this Sublease are for convenience of reference only
and shall not modify, define, expand or limit any of terms or
provisions hereof.
(e) Counterparts. This Sublease may be executed
by the parties hereto in separate counterparts, each of which
23
<PAGE>
when so executed and delivered shall be an original, but all such
counterparts together shall constitute but one and the same
instrument.
(f) Successors. The terms of this Sublease shall
be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
(g) Further Assurances. Each party hereto will
promptly and duly execute and deliver to the other such documents
and assurances and take such further action as the other may from
time to time reasonably request in order to carry out more
effectively the intent and purpose of this Sublease.
(h) Notices. All notices and other
communications under this Sublease shall be in writing and shall
be deemed effective five days after mailing by first-class
registered or certified mail return receipt requested, postage
prepaid, or when received by personal delivery, overnight courier
services or facsimile transmission (confirmed in writing),
addressed as follows:
(1) if to Sublessor, to
GPU Service Corporation
100 Interpace Parkway
Parsippany, New Jersey 07054
Attn: Don W. Myers
Vice President and Treasurer
with a copy to
Jersey Central Power & Light Company
300 Madison Avenue
Morristown, New Jersey 07962
Attn: Vice President of Generation
and to
Douglas E. Davidson, Esq.
Berlack, Israels & Liberman
24
<PAGE>
120 West 45th Street
New York, New York 10036
(2) If to Sublessee, to
Northampton Water Supply, Inc.
7500 Old Georgetown Road
Bethesda, Maryland 20814-3422
with a copy to
William M. Russell, Esq.
Sills Cummis Zuckerman Radin
Tischman Eptein & Gross
One Riverfront Plaza
Newark, New Jersey 07102-5400
or, in each case, to such other person or at such other address
as it may have most recently advised the other parties hereto in
writing.
(i) Merger. This Sublease supersedes any and all
prior understandings and agreements of the parties, whether
written or oral (including the Term Sheet dated September 7,
1993) all of which are hereby merged into this Agreement.
25
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Sublease to be duly executed as of the date first above written.
JERSEY CENTRAL POWER & LIGHT COMPANY,
Sublessor
(SEAL)
Attest:
By:______________________________
Name:
Title:
_________________________
Assistant Secretary
NORTHAMPTON WATER SUPPLY, INC.,
Sublessee
(SEAL)
Attest:
By:________________________
Name:
Title:
_________________________
Assistant Secretary
26
<PAGE>
Exhibit A
Committed Capacity
Date Rent Payment
Jul 30, 1995 $ 55,000
Jan 30, 1996 58,000
Jul 30, 1996 58,000
Jan 30, 1997 60,500
Jul 30, 1997 60,500
Jan 30, 1998 63,500
Jul 30, 1998 63,500
Jan 30, 1999 67,000
Jul 30, 1999 67,000
Jan 30, 2000 70,000
Jul 30, 2000 70,000
Jan 30, 2001 73,500
Jul 30, 2001 73,500
Jan 30, 2002 77,500
Jul 30, 2002 77,500
Jan 30, 2003 81,500
Jul 30, 2003 81,500
Jan 30, 2004 85,500
Jul 30, 2004 85,500
Jan 30, 2005 89,500
Jul 30, 2005 89,500
Jan 30, 2006 94,000
Jul 30, 2006 94,000
Jan 30, 2007 99,000
Jul 30, 2007 99,000
Jan 30, 2008 103,500
Jul 30, 2008 103,500
Jan 30, 2009 109,000
Jul 30, 2009 109,000
Jan 30, 2010 114,500
Jul 30, 2010 114,500
Jan 30, 2011 120,000
Jul 30, 2011 120,000
Jan 30, 2012 126,000
Jul 30, 2012 126,000
Jan 30, 2013 132,500
Jul 30, 2013 132,500
Jan 30, 2014 139,000
Jul 30, 2014 139,000
Jan 30, 2015 146,000
Jul 30, 2015 146,000
Jan 30, 2016 153,500
Jul 30, 2016 153,500
Jan 30, 2017 161,000
Jul 30, 2017 161,000
Jan 30, 2018 169,000
Jul 30, 2018 169,000
Jan 30, 2019 177,500
Jul 30, 2019 177,500
Jan 30, 2020 186,500
<PAGE>
Exhibit B
Standby Capacity
Date Rent Payment
Jul 30, 1996 $ 55,000
Jan 30, 1997 58,000
Jul 30, 1997 58,000
Jan 30, 1998 60,500
Jul 30, 1998 60,500
Jan 30, 1999 63,500
Jul 30, 1999 63,500
Jan 30, 2000 67,000
Jul 30, 2000 67,000
Jan 30, 2001 70,000
Jul 30, 2001 70,000
Jan 30, 2002 73,500
Jul 30, 2002 73,500
Jan 30, 2003 77,500
Jul 30, 2003 77,500
Jan 30, 2004 81,500
Jul 30, 2004 81,500
Jan 30, 2005 85,500
Jul 30, 2005 85,500
Jan 30, 2006 89,500
Jul 30, 2006 89,500
Jan 30, 2007 94,000
Jul 30, 2007 94,000
Jan 30, 2008 99,000
Jul 30, 2008 99,000
Jan 30, 2009 103,500
Jul 30, 2009 103,500
Jan 30, 2010 109,000
Jul 30, 2010 109,000
Jan 30, 2011 114,500
Jul 30, 2011 114,500
Jan 30, 2012 120,000
Jul 30, 2012 120,000
Jan 30, 2013 126,000
Jul 30, 2013 126,000
Jan 30, 2014 132,500
Jul 30, 2014 132,500
Jan 30, 2015 139,000
Jul 30, 2015 139,000
Jan 30, 2016 146,000
Jul 30, 2016 146,000
Jan 30, 2017 153,500
Jul 30, 2017 153,500
Jan 30, 2018 161,000
Jul 30, 2018 161,000
Jan 30, 2019 169,000
Jul 30, 2019 169,000
Jan 30, 2020 177,500
Jul 30, 2020 177,500
Jan 30, 2021 186,500
<PAGE>
EXHIBIT C
Increase in Standby Capacity Payment If Additional Capacity
Subleased
Amount of Increase = (actual calendar year
volume of releases of
Make30, Up Water allo-
cated to Sublessee
in acre feet* 30, 135)
[( ) - 1] x Standby Rent
135 Payment
___________________
* i.e., 270 plus the amount of Additional Capacity allocated
in the calendar year.
29
<PAGE>
TABLE OF CONTENTS
Section 1. Definitions . . . . . . . . . . . . . . . . . . . 2
Section 2. Sublease of Capacity; Term . . . . . . . . . . . 2
Section 3. Rentals . . . . . . . . . . . . . . . . . . . . . 5
Section 4. Renewal . . . . . . . . . . . . . . . . . . . . . 7
Section 5. Representations and Warranties . . . . . . . . . 8
Section 6. Subject to; Disclaimer of Warranties . . . . . 13
Section 7. Sublease Defaults . . . . . . . . . . . . . . . 16
Section 8. Rights to Assign or Sublease . . . . . . . . . 21
Section 9. Payment of Certain Costs, etc. . . . . . . . . 22
Section 10. Early Termination. . . . . . . . . . . . . . . 23
Section 11. Miscellaneous. . . . . . . . . . . . . . . . . 24
<PAGE>
ACKNOWLEDGEMENT
STATE OF )
) ss.:
COUNTY OF )
I CERTIFY that on ___________, 1993, in the County and
State aforesaid, ______________ personally came before me, the
subscriber, a Notary Public of the State of ________________,
authorized to take acknowledgements and proofs in said county and
state, and acknowledged under oath, to my satisfaction that:
(a) he is the Assistant Secretary of NORTHAMPTON
WATER SUPPLY INC., the corporation named as Sublessee
in the attached Sublease Agreement;
(b) he is the attesting witness to the signing of
this Sublease Agreement by the corporate officer who is
the _________________ of said corporation;
(c) the Sublease Agreement was signed and
delivered by said corporation as its voluntary act duly
authorized by a proper resolution of its Board of
Directors;
(d) he knows the proper seal of said corporation
which was affixed to the Sublease Agreement; and
(e) he signed this proof to attest to the truth
of these facts.
Signed and sworn to before me, (Attesting Witness)
a Notary Public in and for the
County of ______________ and State
of ______________, on
____________________, 1993.
_______________________________
___________________________
NOTARY PUBLIC, State of ___________ Name:
No. _______________
Qualified in __________ County
Commission Expires
___________________, 1993
(SEAL)
<PAGE>
ACKNOWLEDGEMENT
STATE OF )
) ss.:
COUNTY OF )
I CERTIFY that on ___________, 1992, in the County and
State aforesaid, ______________ personally came before me, the
subscriber, a Notary Public of the State of ________________,
authorized to take acknowledgements and proofs in said county and
state, and acknowledged under oath, to my satisfaction that:
(a) he is the Assistant Secretary of JERSEY
CENTRAL POWER & LIGHT COMPANY, the corporation named as
Sublessor in the attached Sublease Agreement;
(b) he is the attesting witness to the signing of
this Sublease Agreement by the corporate officer who is
the _________________ of said corporation;
(c) the Sublease Agreement was signed and
delivered by said corporation as its voluntary act duly
authorized by a proper resolution of its Board of
Directors;
(d) he knows the proper seal of said corporation
which was affixed to the Sublease Agreement; and
(e) he signed this proof to attest to the truth
of these facts.
Signed and sworn to before me, (Attesting Witness)
a Notary Public in and for the
County of ______________ and State
of ______________, on
____________________, 199__.
_______________________________ _________________________
NOTARY PUBLIC, State of ___________ Name:
No. _______________
Qualified in __________ County
Commission Expires
___________________, 199__
(SEAL)
<PAGE>
Exhibit F-1(a)
January 31, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Jersey Central Power & Light Company
Application of Form U-1
SEC File No. 70-8267
Dear Sirs:
We refer to our opinion, dated December 20, 1993, filed
as Exhibit F-1 to Amendment No. 1, dated the same date, to the
Application on Form U-1, dated August 31, 1993, under the Public
Utility Holding Company Act of 1935 (the "Act"), filed by Jersey
Central Power & Light Company ("JCP&L") with the Securities and
Exchange Commission (the "Commission"), which Application has
been docketed in SEC File No. 70-8267. (The Application as so
amended, is hereinafter referred to as the "Application.")
The Application contemplated the sublease by JCP&L of a
portion of its storage capacity in the Merrill Creek Reservoir
Project ("Merrill Creek") pursuant to a Sublease Agreement with
Northampton Water Supply, Inc. or an affiliate thereof
("Sublease").
In addition to the matters set forth in our opinion
heretofore filed as Exhibit F-1 to the Application, we have
examined a copy of the Commission's Order, dated December 27,
1993, forthwith granting the Application. We have also examined
a copy of the Certificate Pursuant to Rule 24 of JCP&L, dated
this date, with which this opinion is being filed, certifying to
the completion of the transactions contemplated by the
Application. We have, in addition, examined such other
instruments, agreements and documents and made such further
investigation as we have deemed necessary as a basis for this
opinion.
<PAGE>
Securities and Exchange Commission
January 31, 1994
Page 2
For many years, we have participated in various
proceedings relating to the issuance and sale of securities by
JCP&L, and its parent, General Public Utilities Corporation
("GPU"), and we are familiar with the terms of the outstanding
securities of the corporations comprising the GPU holding company
system.
With respect to all matters of New Jersey law, we have
relied on the opinion of Scott L. Guibord, Esq., which is being
filed as Exhibit F-2(a) to the above-mentioned Certificate.
Based upon the foregoing, we are of the opinion that,
(a) all State laws applicable to the proposed
transactions have been complied with; and
(b) the consummation of the proposed transactions did
not violate the legal rights of the holders of any
securities issued by JCP&L or any "associate
company" thereof, as defined in the Act.
We hereby consent to the filing of this opinion as an
exhibit to the above-mentioned Certificate and in any proceedings
before the Commission that may be held in connection therewith.
Very truly yours,
BERLACK, ISRAELS & LIBERMAN
<PAGE>
Exhibit F-2(a)
January 31, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Jersey Central Power & Light Company
Application on Form U-1
SEC File No. 70-8267
Dear Sirs:
I refer to my opinion, dated December 20, 1993, filed as
Exhibit F-2 to Amendment No. 1, dated the same date, to the
Application on Form U-1, dated August 31, 1993, under the Public
Utility Holding Company Act of 1935 (the "Act"), filed by Jersey
Central Power & Light Company ("JCP&L") with the Securities and
Exchange Commission (the "Commission") and docketed by the
Commission in SEC File No. 70-8267. (The Application, as so
amended, is hereinafter referred to as the "Application".)
The Application contemplated the sublease by JCP&L of a
portion of its storage capacity in the Merrill Creek Reservoir
Project ("Merrill Creek") pursuant to a Sublease Agreement with
Northampton Water Supply, Inc. or an affiliate thereof
("Sublease").
In addition to the matters set forth in my opinion
heretofore filed as Exhibit F-2 to the Application, I have
examined a copy of the New Jersey Board of Regulatory
Commissioners' Decision and Order, dated December 6, 1993,
authorizing JCP&L to enter into the Sublease, and a copy of the
Commission's Order, dated December 27, 1993, forthwith granting
the Application. I have also examined a copy of the Certificate
Pursuant to Rule 24 of JCP&L, dated this date, with which this
opinion is being filed, certifying to the completion of the
transactions contemplated by the Application. I have, in
addition, examined such other instruments, agreements and
documents and made such further investigation as I have deemed
necessary as a basis for this opinion.
<PAGE>
Securities and Exchange Commission
January 31, 1994
Page 2
For many years, I have participated in various proceedings
relating to the issuance and sale of securities by JCP&L, and am
familiar with the terms of the outstanding securities of JCP&L.
Based upon the foregoing I am of the opinion, insofar as
matters governed by the laws of the State of New Jersey are
concerned, that,
(a) all laws of the State of New Jersey applicable to the
proposed transactions have been complied with; and
(b) the consummation of the transactions proposed in the
Application did not violate the legal rights of the
holders of any securities issued by JCP&L.
I hereby consent to the filing of this opinion as an exhibit
to the above-mentioned Certificate and in any proceedings before
the Commission that may be held in connection therewith.
Very truly yours,
Scott L. Guibord
<PAGE>
