EXHIBIT 10.3

 
EXECUTION VERSION

Surplus Margin Guaranty

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
 
 
 

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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.
76 South Main Street, 17th Floor
Akron, OH 44308
Attention:  Randy Scilla, Assistant Treasurer
Telephone: 330-384-5202
Facsimile: 330-384-3722
scillar@firstenergycorp.com

If to the Trustee:

The Bank of New York Trust Company, N.A.
Global Corporate Trust
1660 West 2nd Street, Suite 830
Cleveland, Ohio 44113
Attention: Biagio S. Impala, Vice President
Telephone: 216-622-6516
Facsimile: 216-621-1441
biagio.impala@bnymellon.com

If to the Guaranteed Parties:

The Cleveland Electric Illuminating Company,
The Toledo Edison Company and
Ohio Edison Company
c/o FirstEnergy Corp.
76 South Main Street
18th Floor Akron, OH 44308
Attention: Richard R. Grigg, President
Telephone: 330-384-5838
 
 
 
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Facsimile: 330-384-5669
rgrigg@firstenergycorp.com
Thomas R. Sims, Senior Business Analyst
Telephone: 330-384-3808
Facsimile: 330-255-1662
simst@firstenergycorp.com

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.

 
FIRSTENERGY NUCLEAR
GENERATION CORP
 
.
By:
/s/ Randy Scilla
 
Name:  Randy Scilla
Title:      Assistant Treasurer

 
 
Accepted and Agreed to as of the
date set forth above:

THE CLEVELAND ELECTRIC ILLUMINATING COMPANY

By: /s/ Richard R. Grigg

 
Name:  Richard R. Grigg

 
Title:    President

THE TOLEDO EDISON COMPANY

By: /s/ Richard R. Grigg
 
Name:  Richard R. Grigg

 
Title:    President

OHIO EDISON COMPANY

By: /s/ Richard R. Grigg
 
Name:  Richard R. Grigg

 
Title:    President

Signature page to Surplus Margin Guaranty
 
 

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Schedule 1
 

 
FirstEnergy Solutions Corp. Tranches
 
51 tranches per Master SSO
5 tranches assigned by Sempra Energy Trading
6 tranches assigned by JP Morgan Ventures Energy Corp.
     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: _____________
 
 
FIRSTENERGY NUCLEAR
GENERATION CORP.
       
By:
    Name:  
Title:

 
 
Attest:
   
 
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.
 
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Trustee
       
By:
   
Authorized Signatory

 

 

 
 

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