Surplus Margin Guaranty
EXHIBIT 10.3
EXECUTION
VERSION
GUARANTY (this
“Guaranty”),
dated as of June 16, 2009, made by FIRSTENERGY NUCLEAR GENERATION CORP., a
corporation organized and existing under the laws of the State of Ohio (the
“Guarantor”),
in favor of THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, THE TOLEDO EDISON
COMPANY and OHIO EDISON COMPANY, corporations organized and existing under the
laws of the State of Ohio (the “Guaranteed
Parties”). Terms not defined herein take on the meaning given
to them in the Master SSO Supply Agreements by and between the Guaranteed
Parties and each of the suppliers listed on Appendix A thereto, under which
FIRSTENERGY SOLUTIONS CORP., a corporation organized and existing under the laws
of the State of Ohio and the parent of the Guarantor, is an SSO Supplier (the
“SSO
Supplier”), relating to tranches referenced in Schedule 1 hereto (the
“Agreements”).
PRELIMINARY
STATEMENTS
WHEREAS, the SSO
Supplier has entered into or been assigned the Agreements with the Guaranteed
Parties pursuant to which it is obligated to post Surplus Margin;
WHEREAS, the
Agreements provide that the SSO Supplier may satisfy such Surplus Margin
obligations through the delivery of First Mortgage Bonds by a Guarantor;
and
WHEREAS, the SSO
Supplier and the Guarantor, as a wholly owned subsidiary of the SSO Supplier and
the owner of generating assets committed, in part, to the supply of a portion of
generation service under the Agreements, desire to deliver First Mortgage Bonds
of the Guarantor to the Guaranteed Parties in satisfaction of such Surplus
Margin obligations;
NOW, THEREFORE, in
consideration of the execution and delivery by the SSO Supplier and the
Guaranteed Parties of the Agreements, which the Guarantor hereby agrees shall
benefit it and which the Guarantor acknowledges have been made in part in
reliance upon the availability and execution and delivery of this Guaranty, the
Guarantor hereby agrees as follows:
1 (a) The Guarantor hereby
irrevocably and unconditionally guarantees pursuant to the terms and conditions
hereof the SSO Supplier’s obligations to deliver Surplus Margin from time to
time in accordance with the Agreements (the “Guaranteed
Obligations”).
(b) Upon or any time
after the occurrence or deemed occurrence and during the continuation of an
Event of Default or an Early Termination Date under the Agreements (a “Demand
Event”), the Guaranteed Parties may exercise their rights under
clause (iv) of
Section 6.8 of the Agreements in respect of the Guaranteed Obligations by
written notice of demand for payment (a “Demand
Notice”) to the Guarantor stating (i) that a Demand Event has occurred
and is continuing and (ii) the amount of the payment for Surplus Margin to which
the Guaranteed Parties are entitled to as of the time of such Demand Notice as
calculated for such day pursuant to the provisions of the Agreements (the “Demand
Amount”). Any Demand Notice shall also be delivered to the
Trustee (as defined below).
(c) The Guarantor’s
payment obligation in respect of any Demand Amount under this Guaranty shall be
evidenced by Guaranty Bonds (as defined below) delivered concurrently herewith
to, and registered in the name of FirstEnergy Service Company (“Service
Co”) as custodian for the Guaranteed Parties. Upon receipt by
the Guarantor of a Demand Notice, the Guaranty Bonds shall be subject to
mandatory redemption at an aggregate redemption price equal to the lesser of (i)
the Demand Amount and (ii) the maximum aggregate principal amount of all
Guaranty Bonds then outstanding. Notwithstanding the foregoing, the
redemption price shall be reduced to the extent of the prior payment of Surplus
Margin owing from any other source available to the Guaranteed
Parties.
(d) “Guaranty
Bonds” means First Mortgage Bonds of a series issued under the
Guarantor’s Open-End Mortgage,
General Mortgage Indenture and Deed of Trust, dated as of June 1, 2009 (as
amended and supplemented from time to time, the “Indenture”), to The Bank of New York Mellon
Trust Company, N.A, as trustee (the “Trustee”), which Guaranty Bonds
shall be substantially in the form attached hereto as Exhibit A. Each
Guaranty Bond delivered pursuant to this Guaranty from time to time by the
Guarantor shall be in a maximum principal amount of not less than $250 million;
provided, however, that the initial Guaranty Bond delivered pursuant to this
Guaranty shall be in a maximum principal amount of no less than $500
million.
(e) In the event the principal of
the Guaranty Bonds are
declared or may become due before the maturity thereof upon the happening of an
“Event of Default” as therein defined, the aggregate amount due and payable in
respect of the Guaranty
Bonds shall be the lesser of (a) the aggregate maximum principal amount
of Guaranty Bonds then
outstanding and (b) the amount of the payment for Surplus Margin to
which the Guaranteed Parties otherwise would be entitled had a Demand Event
occurred on and as of such date of such declaration or acceleration (the
“Default
Amount”). Upon
notice to the Guaranteed Parties of any such declaration or acceleration, the
Guaranteed Parties shall promptly provide the Company and the Trustee with a
calculation of such Default Amount.
2. Subject to the requirements
in paragraph 1 above as to the delivery and receipt of a Demand Notice and to
the provisions of Section 6.7(b) of the Agreements, the Guarantor hereby waives
diligence, acceleration, notice of acceptance of this Guaranty and notice of any
liability to which it may apply, and waives presentment and all demands
whatsoever except as noted herein, notice of protest, notice of dishonor or
nonpayment of any such liability, suit or taking of other action by any
Guaranteed Parties
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against, and any
other notice to, any party liable thereon (including the Guarantor or any other
guarantor), filing of claims with a court in the event of the insolvency or
bankruptcy of the SSO Supplier, and any right to require a proceeding first
against the SSO Supplier. This Guaranty is a guarantee of payment and not of
collection.
3. Subject to
the obligations of the Guaranteed Parties to return First Mortgage Bonds,
including the Guaranty Bonds, in accordance with the provisions of Section
6.7(b) of the Agreements, the Guaranteed Parties may, at any time and from time
to time, without notice to or consent of the Guarantor, without incurring
responsibility to the Guarantor and without impairing or releasing the
obligations of the Guarantor hereunder, upon or without any terms or conditions:
(i) take or refrain from taking any and all actions with respect to the
Guaranteed Obligations, any document or any person (including the SSO Supplier)
that the Guaranteed Parties determine in their sole discretion to be necessary
or appropriate; (ii) take or refrain from taking any action of any kind in
respect of any security for any Guaranteed Obligations or liability of the SSO
Supplier to the Guaranteed Parties; or (iii) compromise or subordinate any
Guaranteed Obligations or liability of the SSO Supplier to the Guaranteed
Parties including any security therefore. Notwithstanding the
provisions of Section 1(d) above, if at any time the amount of Surplus Margin
falls below $250 million, the Guarantor may request that the Guaranteed Parties
consent to the return of an appropriate portion of the then remaining Guaranty
Bond, such consent not be unreasonably withheld. Any Guaranty Bonds
to be returned pursuant to the foregoing or pursuant to Section 6.7(b) shall be
delivered to the Trustee for cancellation or, as the case may be, exchange for a
new Guaranty Bond in a lower principal amount, provided however, that the last
proviso in Section 6.7(b) shall continue in full force and effect at all times
during the term of the Agreements.
4. Subject to
the terms and conditions hereof and to the provisions of Section 6.7(b) of the
Agreements, the obligations of the Guarantor under this Guaranty are absolute
and unconditional and, without limiting the generality of the foregoing, shall
not be released, discharged or otherwise affected by: (i) any extension,
renewal, settlement, compromise, waiver, consent, discharge or release by the
SSO Supplier concerning any provision of the Agreements in respect of any
Guaranteed Obligations of the SSO Supplier; (ii) the rendering of any judgment
against the SSO Supplier or any action to enforce the same; (iii) the existence,
or extent of, any release, exchange, surrender, non-perfection or invalidity of
any direct or indirect security for any of the Guaranteed Obligations; (iv) any
modification, amendment, waiver, extension of or supplement to any of the
Agreements or the Guaranteed Obligations agreed to from time to time by the SSO
Supplier and the Guaranteed Parties; (v) any change in the corporate existence
(including its constitution, laws, rules, regulations or powers), structure or
ownership of the SSO Supplier or the Guarantor, or any insolvency, bankruptcy,
reorganization or other similar proceedings affecting the SSO Supplier or its
assets, the Guarantor or any other guarantor of any of the Guaranteed
Obligations; (vi) the existence of any claim, set-off or other rights which the
Guarantor may have at any time against the SSO Supplier, the Guaranteed Parties
or any other corporation or person, whether in connection herewith or in
connection with any unrelated transaction; provided that nothing herein
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shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim; (vii)
the invalidity, irregularity or unenforceability in whole or in part of the
Agreements or any Guaranteed Obligations or any instrument evidencing any
Guaranteed Obligations or the absence of any action to enforce the same, or any
provision of applicable law or regulation purporting to prohibit payment by the
SSO Supplier of amounts to be paid by it under the Agreements or any of the
Guaranteed Obligations; and (viii) except for a failure to comply with any
applicable statute of limitations, any other act or omission to act or delay of
any kind of the SSO Supplier, any other guarantor, the Guaranteed Parties or any
other corporation or person or any other event, occurrence or circumstance
whatsoever which might, but for the provisions of this paragraph, constitute a
legal or equitable discharge of the Guarantor’s obligations
hereunder.
5. The
Guarantor hereby irrevocably waives (a) any right of reimbursement or
contribution, and (b) any right of salvage against the SSO Supplier or any
collateral security or guaranty or right of offset held by the Guaranteed
Parties therefor.
6. The Guarantor will not
exercise any rights, which it may acquire by way of subrogation until all
Guaranteed Obligations to the Guaranteed Parties pursuant to the Agreements have
been paid in full.
7. Subject to the terms and
conditions hereof, this Guaranty is a continuing one and all liabilities to
which it applies or may apply under the terms here of shall be conclusively
presumed to have been created in reliance hereon. Except for a
failure to comply with any applicable statute of limitations, no failure or
delay on the part of the Guaranteed Parties in exercising any right, power or
privilege hereunder, and no course of dealing between the Guarantor and the
Guaranteed Parties, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The rights, powers and remedies herein expressly provided
are cumulative and not exclusive of any rights, powers or remedies, which the
Guaranteed Parties would otherwise have. No notice to or demand on
the Guarantor in any case shall entitle the Guarantor to any other or further
notice of demand in similar or other circumstances or constitute a waiver of the
rights of the Guaranteed Parties to any other or further action in any
circumstances without notice or demand.
8. This Guaranty shall be
binding upon the Guarantor and upon its successors and assigns and shall inure
to the benefit of and be enforceable by the Guaranteed Parties and its
successors and assigns; provided, however, that the Guarantor may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of the Guaranteed Parties. The assignment rights of the Guaranteed
Parties will be in accordance with the terms of the underlying
Agreements.
9. Neither this Guaranty nor
any provision hereof may be changed, waived, discharged or terminated except
upon written agreement of the Guaranteed Parties and the Guarantor.
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10.
The Guarantor agrees that its liability as guarantor shall continue and remain
in full force and effect in the event that all or any part of any payment made
hereunder or any obligation or liability guaranteed hereunder is recovered (as a
fraudulent conveyance, preference or otherwise) rescinded or must otherwise be
reinstated or returned due to bankruptcy or insolvency laws or
otherwise.
11.
All notices and other communications hereunder shall be made at the addresses by
hand delivery, by the next day delivery service effective upon receipt or by
certified mail return receipt requested (effective upon scheduled weekday
delivery day) or telefacsimile (effective upon receipt of evidence, including
telefacsimile evidence, that telefacsimile was received):
If
to the Guarantor:
FirstEnergy Nuclear
Generation Corp.
00
Xxxxx Xxxx Xxxxxx, 00xx
Xxxxx
Xxxxx, XX
00000
Attention: Xxxxx
Xxxxxx, Assistant Treasurer
Telephone:
000-000-0000
Facsimile:
000-000-0000
xxxxxxx@xxxxxxxxxxxxxxx.xxx
If
to the Trustee:
The
Bank of New York Trust Company, N.A.
Global Corporate
Trust
0000 Xxxx 0xx Xxxxxx,
Xxxxx 000
Xxxxxxxxx, Xxxx
00000
Attention: Xxxxxx X.
Impala, Vice President
Telephone:
000-000-0000
Facsimile:
000-000-0000
xxxxxx.xxxxxx@xxxxxxxxx.xxx
If
to the Guaranteed Parties:
The
Cleveland Electric Illuminating Company,
The
Toledo Edison Company and
Ohio Edison
Company
c/o
FirstEnergy Corp.
00
Xxxxx Xxxx Xxxxxx
00xx Xxxxx Xxxxx, XX 00000
Attention: Xxxxxxx
X. Xxxxx, President
Telephone:
000-000-0000
5
Facsimile:
000-000-0000
xxxxxx@xxxxxxxxxxxxxxx.xxx
Xxxxxx X. Xxxx,
Senior Business Analyst
Telephone:
000-000-0000
Facsimile:
000-000-0000
xxxxx@xxxxxxxxxxxxxxx.xxx
12.
If claim is ever made upon the Guaranteed Parties for repayment or recovery of
any amount or amounts received in payment or on account of any of the Guaranteed
Obligations and the Guaranteed Parties repay all or part of such amount by
reason of (a) any judgment, decree or order of any court or administrative body
having jurisdiction over such payee or any of its property, or (b) any
settlement or compromise of any such claim effected by such payee with any such
claimant (including the Guarantor), then and in such event the Guarantor agrees
that any such judgment, decree, order, settlement or compromise shall be binding
upon it, notwithstanding any revocation hereof or the cancellation of the
Agreements or other instrument evidencing any liability of the Guarantor, and
the Guarantor shall be and remain liable to the Guaranteed Parties hereunder for
the amount so repaid or recovered to the same extent as if such amount had never
originally been received by any such payee.
13.
The Guarantor hereby certifies that it satisfies the Minimum Rating by virtue of
the fact that its senior unsecured debt securities (in the form of outstanding
pollution control bonds for which it is the primary obligor and which are
guaranteed by the SSO Supplier) have heretofore been rated no lower than the
Minimum Rating by S&P and Moody’s.
14.
This Guaranty shall remain in full force and effect until all Guaranteed
Obligations have been fully and finally performed, at which point it will
expire. The Guarantor may terminate this Guaranty upon thirty (30) days prior
written notice to the Guaranteed Parties which termination shall be effective
only upon receipt by the Guaranteed Parties of alternative means of security or
credit support for Surplus Margin, as specified in the Agreements and in a form
reasonably acceptable to the Guaranteed Parties; provided, however, that nothing
herein shall be construed to affect in any way the obligations of the Guaranteed
Parties to return First Mortgage Bonds, including the Guaranty Bonds, in
accordance with the provisions of Section 6.7(b) of the
Agreements. Upon the effectiveness of any such expiration or
termination, the Guarantor shall have no further liability under this Guaranty,
except with respect to the Guaranteed Obligations entered into prior to the time
the expiration or termination is effective, which Guaranteed Obligations shall
remain guaranteed pursuant to the terms of this Guaranty until finally and fully
performed.
15.
The Guarantor represents and warrants that: (i) it is duly organized and validly
existing under the laws of the State of Ohio and has the power and authority to
execute, deliver, and perform this Guaranty; (ii) no authorization, approval,
consent or order of, or registration or filing with, any court or other
governmental body having
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jurisdiction over
the Guarantor is required on the part of the Guarantor for the execution,
delivery and performance of this Guaranty except for those already made or
obtained; (iii) this Guaranty constitutes a valid and legally binding agreement
of the Guarantor, and is enforceable against the Guarantor, except as the
enforceability of this Guaranty may be limited by the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditor’s rights generally and by general principles of equity; and (iv) the
execution, delivery and performance of this Guaranty by the Guarantor have been
and remain duly authorized by all necessary corporate or comparable action and
do not contravene any provision of its Articles of Incorporation or Code of
Regulations or any law, regulation or contractual restriction binding on it or
its assets.
16.
This Guaranty and the rights and obligations of the SSO Supplier and the
Guarantor hereunder shall be construed in accordance with and governed by the
laws of the State of Ohio. The Guarantor and Guaranteed Parties jointly and
severally agree to the exclusive jurisdiction of State and federal courts
located in the State of Ohio over any disputes arising or relating to this
Guaranty and waive any objections to venue or inconvenient forum. The Guarantor
and Guaranteed Parties each hereby irrevocably waive any and all rights to trial
by jury with respect to any legal proceeding arising out of or relating to this
Guaranty.
17.
This writing is the complete and exclusive statement of the terms of this
Guaranty and supersedes all prior oral or written representations,
understandings, and agreements between the Guaranteed Parties and the Guarantor
with respect to subject matter hereof. The Guaranteed Parties and the Guarantor
agree that there are no conditions to the full effectiveness of this
Guaranty.
18.
Every provision of this Guaranty is intended to be severable. If any term or
provision hereof is declared to be illegal or invalid for any reason whatsoever
by a court of competent jurisdiction, such illegality or invalidity shall not
affect the balance of the terms and provisions hereof, which terms and
provisions shall remain binding and enforceable. This Guaranty may be executed
in any number of counterparts, each of which shall be an original, but all of
which together shall constitute one instrument.
19.
No trustee or shareholder of the Guarantor shall be held to any liability
whatsoever for any obligation under this Guaranty, and this Guaranty shall not
be enforceable against any such trustee in their or his or her individual
capacities or capacity. This Guaranty shall be enforceable against the trustees
of the Guarantor only as such, and every person, firm, association, trust or
corporation having any claim or demand arising under this Guaranty and relating
to the Guarantor, its shareholders or trustees shall look solely to the trust
estate of the Guarantor for the payment or satisfaction thereof.
20.
Notwithstanding anything to the contrary in the Agreements, by their acceptance
of this Guaranty, the Guaranteed Parties hereby (i) accept the Guarantor as a
“Guarantor” of the SSO Supplier for purposes of posting First Mortgage Bonds to
cover
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Surplus
Margin obligations of the SSO Supplier, (ii) agree that the Guarantee Bonds
conform to the requirements set forth in Appendix F to each of the Agreements
and together with this Guaranty are satisfactory in form, amount and substance
and (iii) agree that this Guaranty is limited to a guaranty of such Surplus
Margin in accordance with its terms.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed,
delivered and effective as of the date first above written.
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FIRSTENERGY
NUCLEAR
GENERATION
CORP
.
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By:
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/s/ Xxxxx
Xxxxxx
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Name:
Xxxxx Xxxxxx
Title:
Assistant
Treasurer
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Accepted and Agreed
to as of the
date set forth
above:
THE
CLEVELAND ELECTRIC ILLUMINATING COMPANY
By: /s/ Xxxxxxx X.
Xxxxx
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Name: Xxxxxxx
X. Xxxxx
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Title: President
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THE
TOLEDO EDISON COMPANY
By: /s/ Xxxxxxx X.
Xxxxx
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Name: Xxxxxxx
X. Xxxxx
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Title: President
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OHIO EDISON
COMPANY
By: /s/ Xxxxxxx X.
Xxxxx
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Name: Xxxxxxx
X. Xxxxx
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Title: President
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Schedule
1
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FirstEnergy
Solutions Corp. Tranches
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51 tranches
per Master SSO
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5 tranches
assigned by Sempra Energy Trading
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6 tranches
assigned by XX Xxxxxx Ventures Energy Corp.
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62 Total
Tranches
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Exhibit
A
Form
of Guaranty Bond
[FORM OF FIRST MORTGAGE BOND
OF GUARANTEE SERIES B]
This Bond is not
transferable except (i) to a successor to FirstEnergy Service Company, as
Custodian, under the Custodian Agreement referred to herein pursuant to which it
acts on behalf of The Cleveland Electric Illuminating Company, The Toledo Edison
Company and Ohio Edison Company, as Guaranteed Parties under the Guaranty
Agreement, of the Company, as Guarantor, as referred to herein, (ii) in
connection with the exercise of the rights and remedies of the holder hereof
consequent upon an “Event of
Default” or an “Early Termination Date” as defined in the Agreements
referred to in the Guaranty Agreement
or an “Event of Default” as defined in the Indenture or (iii) as may be
necessary to comply with a final order of a court of competent jurisdiction in
connection with any bankruptcy or reorganization proceeding of the
Company.
FIRSTENERGY
NUCLEAR GENERATION CORP.
First Mortgage Bond,
Guarantee Series B of 2009 due 2011
Due
May 31, 2011
Maximum
Principal
Amount:
$[_____________________] No. R-__
FIRSTENERGY NUCLEAR GENERATION
CORP., a corporation of the State of Ohio (herein, together with its
successors and assigns, the “Company”),
for value received promises to pay to FirstEnergy Service Company, a corporation
of the State of Ohio (“FirstEnergy
Service”) as Custodian, under the Custodian Agreement (as defined below),
pursuant to which it acts on behalf of The Cleveland Electric Illuminating
Company, The Toledo Edison Company and Ohio Edison Company, as Guaranteed
Parties under the Company’s Guaranty Agreement (the “Guaranty
Agreement”), or registered assigns, on May 31, 2011, the principal sum
equal to the lesser of (a) the Demand Amount (as defined in the Guaranty
Agreement), if any, due and owing on such date and (b) the maximum principal
amount set forth above. Interest on the Bonds of this series shall
only be payable in the case of any default by the Company in the payment of the
principal due on any Bonds of this series, until the Company’s obligation with
respect to the payment of such principal shall be discharged as provided in the
Indenture (as
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hereinafter
defined), and shall accrue from the date of such default until payment at a
default rate of 8.0% per annum. The interest on each
Bond of this series so payable shall, subject to the exceptions provided in
Section 3.07 of the Indenture, be paid to the person in whose name such Bond is
registered on the date of such payment. The principal of, and the
interest on, this Bond shall be payable at the office or agency of the Company
in the City of Cleveland, State of Ohio in any coin or currency of the United
States of America which at the time of payment is legal tender for the payment
of public and private debts.
This Bond is one of
an issue of Bonds of the Company known as its First Mortgage Bonds, issued and
to be issued in one or more series under and secured by an Open-End Mortgage,
General Mortgage Indenture and Deed of Trust, dated as of June 1, 2009, duly
executed by the Company to The Bank of New York Mellon Trust Company, N.A., a
national banking association organized and existing under the laws of the United
States of America, as Trustee (the “Trustee”),
and indentures supplemental thereto, heretofore or hereafter executed, including
the First Supplemental Indenture dated as of June 15, 2009 (as amended,
supplemented, modified or restated, the “Supplemental
Indenture”), to
which Open-End Mortgage, General Mortgage Indenture and Deed of Trust and all
indentures supplemental thereto (collectively referred to as the “Indenture”)
reference is hereby made for a description of the property mortgaged and
pledged, the nature and extent of the security, the terms and conditions upon
which such Bonds are, and are to be, issued and secured, and the rights of the
owners of such Bonds and the Trustee in respect of such security. As
provided in the Indenture, such Bonds may be in various principal sums, are
issuable in series, may mature at different times, may bear interest at
different rates and may otherwise vary as therein provided; and this Bond is one
Bond of a series entitled “First Mortgage Bonds, Guarantee Series B of 2009 due
2011,” created by the Supplemental Indenture, as provided for in the Indenture,
and authorized for issuance in an aggregate principal amount of up to
$500,000,000.
Upon receipt of a
Demand Notice (as defined in the Guaranty Agreement) by the Company and the
Trustee from an authorized representative of the holder hereof at any time prior
to maturity, the Bonds of this series shall be redeemed by the Company in whole
on the third Business Day following receipt of such notice at a redemption price
equal to the lesser of (a) the Demand Amount specified in such Demand Notice and
(b) 100% of the aggregate maximum principal amount of Bonds of this series then
outstanding. Any such redemption shall become null and void for all
purposes under the Indenture upon receipt by the Company and the Trustee of
written notice from an authorized representative of the holder hereof of the
rescission of the aforesaid Demand Notice prior to the redemption date, and
thereupon no redemption of the Bonds of this series and no payment in respect
thereof as specified in the Demand Notice, shall be effected or
required. But no such rescission shall extend to any subsequent
Demand Notice from an authorized representative of the holder hereof or impair
any right consequent on any such subsequent Demand Notice.
The principal of
this Bond may be declared or may become due before the maturity hereof, on the
conditions, in the manner and at the times set forth in the Indenture, upon the
happening of an Event of Default as therein defined. In such event,
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the
aggregate amount due and payable in respect of the Bonds of this series shall be
the Default Amount (as defined in the Guaranty Agreement) as of such
date. Upon notice to the holder hereof of any such declaration or
acceleration, the holder shall provide the Trustee with a calculation of such
Default Amount.
No recourse shall be
had for the payment of the principal of or premium, or interest if any, on this
Bond, or any part hereof, or for any claim based hereon or otherwise in respect
hereof, or of the indebtedness represented hereby, or upon any obligation,
covenant or agreement under the Indenture, against any incorporator,
stockholder, officer or director, as such, past, present or future of the
Company or of any predecessor or successor corporation (either directly or
through the Company or a predecessor or successor corporation), whether by
virtue of any Constitutional provision, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability of
incorporators, stockholders, officers and directors being released by the
registered owner hereof by the acceptance of this Bond and being likewise waived
and released by the terms of the Indenture.
This Bond is
nontransferable except to (i) effect transfer to any successor to FirstEnergy
Service, as Custodian, under the Custodian Agreement, dated as of June 16, 2009,
among FirstEnergy Service and the Guaranteed Parties, relating to the Guaranty
Agreement (the “Custodian
Agreement”), (ii) in connection with the exercise of the rights and
remedies of the holder hereof consequent upon an “Event of Default” or an “Early
Termination Date” as defined in the Agreements (as defined in the
Guaranty Agreement) or an “Event of Default” as defined in the Indenture or
(iii) as may be necessary to comply with a final order of a court of competent
jurisdiction in connection with any bankruptcy or reorganization proceeding of
the Company. But this Bond is exchangeable by the registered holder
hereof, in person or by attorney duly authorized, at the Corporate Trust Office
of the Trustee, any such permitted transfer or exchange to be made in the manner
and upon the conditions prescribed in the Indenture, upon the surrender and
cancellation of this Bond and the payment of any applicable taxes and fees
required by law, and upon any such transfer or exchange a new registered Bond or
Bonds of the same series and tenor, will be issued to the authorized transferee,
or the registered holder, as the case may be. The Company and the Trustee may
deem and treat the person in whose name this Bond is registered as the absolute
owner for the purpose of
receiving payment of or on account of the principal and interest due hereon and
for all other purposes.
This Bond shall not
be valid until authenticated by the manual signature of the Trustee, or a
successor Trustee or Authenticating Agent appointed pursuant to the
Indenture.
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IN WITNESS WHEREOF,
the Company has caused this Bond to be executed in its name by the manual or
facsimile signature of an Authorized Executive Officer and attested by the
manual or facsimile signature of another Authorized Executive
Officer.
Dated:
_____________
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FIRSTENERGY
NUCLEAR
GENERATION
CORP.
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By:
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| Name: | |
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Title:
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Attest:
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| Name: | |
| Title: | |
[FORM OF TRUSTEE’S
AUTHENTICATION CERTIFICATE]
TRUSTEE’S
AUTHENTICATION CERTIFICATE
This is one of the
Bonds of the series designated therein referred to in the within-mentioned
Indenture.
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THE BANK OF
NEW YORK MELLON
TRUST
COMPANY, N.A., as
Trustee
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By:
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Authorized
Signatory
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