Document:

EXHIBIT 10-22
	 

	 
		 
	 

	 
		AMENDMENT NO. 1
	 

	 
		to
	 

	 
		PP FOSSIL SECURITY AGREEMENT
	 

	 
		THIS AMENDMENT NO. 1 (this
		“Amendment”), dated as of June 30, 2007
		(the “Amendment Effective Date”), to the
		Security Agreement, dated as of October 24, 2005 (the “Security
		Agreement”), is entered into by and between FIRSTENERGY GENERATION
		CORP., an Ohio corporation (“Debtor”),
		and PENNSYLVANIA POWER COMPANY, a Pennsylvania corporation (“Secured
		Party” or “Seller”). Capitalized terms
		used and not otherwise defined herein shall have the meanings ascribed thereto
		in the Security Agreement.
	 

	 
		W I T N E
		S S E T H :
	 

	 
		WHEREAS, Debtor and Secured Party entered
		into the Security Agreement and Debtor issued its related PP Fossil Note, dated
		October 24, 2005 (the “Note”),
		to Secured Party in the initial principal amount of $124,467,071.91 all in
		connection with Debtor’s purchase of Secured Party’s undivided
		ownership interests in certain generating assets (the “Assets”)
		pursuant to a purchase option under that certain Master Facility Lease, dated
		January 1, 2001 (the “Master
		Lease”), among the Debtor, the Secured Party, Ohio
		Edison Company, The Cleveland Electric Illuminating Company and The Toledo
		Edison Company;
	 

	 
		WHEREAS, in connection with the cumulative
		reduction in the outstanding principal amount of the Note of $121,733,175.91 to
		$2,733,896.00 through the date hereof as a result of Debtor’s prepayments
		from time to time of the Note in accordance with the terms thereof, Debtor has
		requested amendments to certain terms of the Security Agreement to reflect the
		release from the lien (the “Lien”)
		of the Security Agreement of a comparable portion of the Assets, and Secured
		Party has agreed to such amendments in as much as the aggregate purchase price
		paid by the Debtor for those Assets being released from the Lien, as reflected
		in the applicable purchase prices contained in the Master Lease is equal to or
		less than the aggregate reduction in the outstanding principal amount of the
		Note;
	 

	 
		WHEREAS, the aggregate purchase price paid
		by Debtor under the Master Lease for the ownership interests of Secured Party
		in Units Nos. 1, 2 and 3 of the Bruce Mansfield Generating Station, located in
		the Borough of Shippingport, Pennsylvania (the “Mansfield
		Plant”), was $83,486,205.00; and 
	 

	 
		WHEREAS, such amendments shall be of benefit
		to Debtor.
	 

	 
		NOW, THEREFORE, in consideration of the
		covenants, conditions and agreements hereinafter set forth, and for other good
		and valuable consideration, the receipt and adequacy of which are hereby
		acknowledged, the parties hereto hereby agree as follows:
	 

	 
		 
	 

	 
		 
	 

	 
	 

	 

	 
		1. Amendment and Release. 
	 

	 
		(a) Effective upon and after the Amendment
		Effective Date, Section 1 (“Collateral”) of the Security Agreement shall be amended and
		restated to read in its entirety as follows:
	 

	 
		“2. Collateral. The
		collateral covered by this Agreement (“Collateral”) shall consist of
		the following:
	 

	 
			
				
				   
				

			 	
				
				  a.
				

			 	
				
				  Seller’s 20.8% undivided
				  ownership interest in Unit No. 7 of the W. H. Sammis Generating Station,
				  Village of Stratton, Ohio;
				

			 

 

	 
			
				
				   
				

			 	
				
				  b.
				

			 	
				
				  Seller’s 14.00% undivided
				  ownership interest in the 48 MW Edgewater Peaking Facility, Lorain,
				  Ohio;
				

			 

 

	 
			
				
				   
				

			 	
				
				  c.
				

			 	
				
				  Seller’s 14.40% undivided
				  ownership interest in the 60 MW Mad River Peaking Facility, Springfield,
				  Ohio;
				

			 

 

	 
			
				
				   
				

			 	
				
				  d.
				

			 	
				
				  Seller’s 14.40% undivided
				  ownership interest in the R. E. Burger Plant Diesel Generators, Meade Township,
				  Ohio;
				

			 

 

	 
			
				
				   
				

			 	
				
				  e.
				

			 	
				
				  Seller’s 14.40% undivided
				  ownership interest in the W. H. Sammis Plant Diesel Generators, Village of
				  Stratton, Ohio; and
				

			 

 

	 
			
				
				   
				

			 	
				
				  f.
				

			 	
				
				  all of Seller’s right, title
				  and interest in and to any and all contracts, fuel, spare parts, inventories,
				  equipment, supplies and other assets associated with or necessary for the
				  ownership or operation of the foregoing.”
				

			 

 

	 
		(b) Effective upon and from and after the
		Amendment Effective Date, Secured Party hereby releases, terminates and
		discharges, without recourse and without any representation or warranty of any
		kind, express or implied, all security interests and liens of any nature
		whatsoever in its favor in or on the 33.5%, 9.36% and 6.28% undivided ownership
		interests in Units Nos. 1, 2 and 3, respectively, of the Mansfield Plant
		purchased from Secured Party and now owned by Debtor, together with all of
		Secured Party’s right, title and interest in and to any and all contracts,
		fuel, spare parts, inventories, equipment, supplies and other assets associated
		with or necessary for the ownership or operation of the foregoing (the
		“Released
		Collateral”). Nothing
		contained herein shall be deemed a release or termination by Secured Party of
		any security interests in and liens on any assets of Debtor other than the
		Released Collateral, all of which shall continue in full force and effect.
		Except as specifically set forth herein, nothing contained herein shall be
		construed in any manner to constitute a waiver, release or termination or to
		otherwise limit or impair any of the obligations or indebtedness of Debtor or
		any other person or entity to Secured Party, or any duties, obligations or
		responsibilities of Debtor or any other person or entity to Secured
		Party.
	 

	 
		(c) Promptly after the Amendment Effective
		Date, Secured Party shall file with the office of the Secretary of State of the
		State of Ohio a UCC-3 financing statement amendment in the form attached as
		Annex A hereto evidencing the termination of Secured
		Party’s security interest in the Released Collateral.
	 

	 
		 
	 

	 
		 
	 

	 
	 

	 

	 
		2. Effectiveness.
		This Amendment shall become effective on the Amendment Effective Date.
	 

	 
		3. Counterparts.
		This Amendment may be executed in counterparts and by different parties hereto
		in separate counterparts, each of which, when so executed and delivered, shall
		be deemed to be an original and all of which, when taken together, shall
		constitute one and the same instrument.
	 

	 
		4. Ratification.
		The Security Agreement, as amended by this Amendment, is and shall continue to
		be in full force and effect and is hereby in all respects confirmed, approved
		and ratified.
	 

	 
		5. Governing Law.
		This Amendment shall be governed by the substantive laws of the State of Ohio,
		without giving effect to any conflict of laws principles.
	 

	 
		6. Reference to Security Agreement. From and after the Amendment Effective Date, each
		reference in the Security Agreement to “this Agreement,”
		“hereof,” “hereunder” or words of like import, and all
		references to the Security Agreement in any and all agreements, instruments,
		documents, notes, certificates and other writings of every kind and nature,
		shall be deemed to mean the Security Agreement as modified and amended by this
		Amendment. 
	 

	 
		[Signature page follows]
	 

	 
		 
	 

	 
		 
	 

	 
	 

	 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
		IN WITNESS WHEREOF, the parties hereto have
		caused this Amendment to be executed as of the date first written above.

	 

	 
		 
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  DEBTOR:
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  
 FIRSTENERGY GENERATION
				  CORP.
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  By: 
				

			 	
				
				  
 /s/ Randy Scilla
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Name: 
				

			 	
				
				  Randy Scilla
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Title: 
				

			 	
				
				  Assistant Treasurer
				

			 

 

	 
		 
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  SECURED PARTY:
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  
 PENNSYLVANIA POWER
				  COMPANY
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  By: 
				

			 	
				
				  
 /s/ Randy Scilla
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Name: 
				

			 	
				
				  Randy Scilla
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Title: 
				

			 	
				
				  Assistant Treasurer
				

			 

 

	 
		Signature Page to Amendment No. 1 PP Fossil
		Security AgreementEXHIBIT 10-23
	 

	 
		[Execution Copy]
	 

	 
		 
	 

	 
		TE FOSSIL NOTE
	 

	 
		 
	 

	 
			
				
				  $100,972,045.74
				

			 	
				
				  October 24, 2005
				

			 

 

	 
		FIRSTENERGY GENERATION CORP., an Ohio
		corporation (the “Corporation”), for value received, hereby promises
		to pay to the order of THE TOLEDO EDISON COMPANY, an Ohio corporation, its
		successors and assigns (“Payee”), the principal amount of One Hundred
		Million Nine Hundred Seventy-Two Thousand Forty-Five Dollars and Seventy-Four
		Cents, ($100,972,045.74) and to pay interest (calculated on the basis of a
		365-day year and charged on the basis of the actual number of days elapsed) on
		the unpaid balance of such principal amount at a rate per annum of 4.38% from
		the due date thereof until the obligation of the Corporation with respect to
		the payment thereof shall be discharged. 
	 

	 
		Interest on the outstanding principal amount
		of this Note shall be payable semi-annually in arrears, commencing on May 1,
		2006, and on the 1st day of each May and November thereafter (the
		“Interest Payment Dates”). The principal balance of this Note,
		together with all accrued and unpaid interest thereon, on shall be due and
		payable on November 1, 2025.
	 

	 
		Payments of principal and interest hereunder
		may be made either (a) in such coin or currency of the United States of America
		as at the time of payment shall be legal tender therein for the payment of
		public and private debts or (b) by way of the Corporation’s assumption of
		Payee’s liabilities and obligations under certain Pollution Control
		Revenue Bonds of the Payee as set forth and described in the Purchase Agreement
		referred to in Section 1 below.
	 

	 
		SECTION 1. The Note; Definitions. As used herein, the term “Note” refers to
		this Secured Promissory Note of the Corporation, dated the date hereof, and
		originally issued, executed and delivered by the Corporation in the principal
		amount of One Hundred Million Nine Hundred Seventy-Two Thousand Forty-Five
		Dollars and Seventy-Four Cents, ($100,972,045.74) pursuant to and subject to
		the terms of the Purchase and Sale Agreement dated as of May 18, 2005 (the
		“Purchase Agreement”), between the Corporation and Payee. Unless the
		context otherwise requires, the term “holder” is used herein to mean
		the person named as Payee herein. Capitalized terms used in this Note and not
		otherwise defined herein shall have the meanings set forth in the Purchase
		Agreement.
	 

	 
		SECTION 2. Security. This
		Note is secured pursuant to the terms and provisions of a Security Agreement of
		even date herewith.
	 

	 
		SECTION 3. Prepayments. The
		Corporation may, at its option and subject to the giving of notice as provided
		herein, at any time prepay this Note, without penalty, in whole or in part upon
		payment of the principal amount thereof, together with interest on the
		principal amount so prepaid accrued to the prepayment date.
	 

	 
		SECTION 4. Amendments and Waivers. This Note may not be modified or amended, except upon
		the written consent of the holder of this Note, and no covenant, agreement or
		condition contained in this Note may be waived (either generally or in a
		particular instance and either retroactively or prospectively) without the
		written consent of the holder of this Note.
	 

	 
		 
	 

	 
	 

	 

	 
		SECTION 5. Events of Default.
	 

	 
		(a) Each of the following shall constitute
		an “Event of Default” hereunder:
	 

	 
		(i) Failure by Corporation to pay the
		interest on, or principal of, this Note within thirty (30) days of the date
		due; or
	 

	 
		(ii) Filing by Corporation of a voluntary
		petition in bankruptcy or a voluntary petition or any answer seeking
		arrangement or readjustment of its debts or for any other relief under the
		Bankruptcy Reform Act of 1994, as amended (“Bankruptcy Code”), or
		under any other existing or future federal or state insolvency act or law, or
		any formal written consent to, approval of, or acquiescence in, any such
		petition or proceeding by Corporation, the application by Corporation for, or
		the appointment by consent or acquiescence of, a receiver or trustee of
		Corporation or for all or a substantial part of its property; the making by
		Corporation of an assignment for the benefit of creditors; or
	 

	 
		(iii) Filing of any involuntary petition
		against Corporation in bankruptcy or seeking arrangement or readjustment of its
		debts or for any other relief under the Bankruptcy Code, or under any other
		existing or future federal or state insolvency act or law; or the involuntary
		appointment of a receiver or trustee of Corporation, or for all or a
		substantial part of the property of Corporation; and the continuance of any of
		such events for a period of ninety (90) days undismissed or undischarged;
		or
	 

	 
		(iv) In the event that Debtor shall fail to
		perform any term, covenant or agreement, in any material respect, under the
		Purchase Agreement or the Security Agreement, each of even date herewith,
		between Corporation and Payee or under this Note.
	 

	 
		(b) Upon the occurrence of an Event of
		Default, then, and in such event, Payee may declare this Note to be due and
		payable, whereupon the entire unpaid balance of principal, together with all
		accrued interest thereon, shall become immediately due and payable without
		presentment, demand, protest or other notice of any kind, all of which are
		hereby expressly waived, anything herein to the contrary
		notwithstanding.
	 

	 
		SECTION 6. Extension of Maturity. Should the principal of, or interest on, this Note
		become due and payable on other than a business day, the maturity thereof shall
		be extended to the next succeeding business day, and, in the case of principal,
		or an installment of principal, interest shall be payable thereon at the rate
		per annum herein specified during such extension. The term “business
		day” shall mean any day that is not a Saturday, Sunday or legal holiday in
		the State of Ohio.
	 

	 
		SECTION 7. Governing Law.
		This Note shall be governed by, and construed in accordance with, the laws of
		the State of Ohio without regard to its rules or principles relating to
		conflicts of laws.
	 

	 
		IN WITNESS WHEREOF, the Corporation
		has caused this Note to be executed on the date first set forth above.
	 

	 
		 
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  FIRSTENERGY GENERATION
				  CORP.
				

			 
	
				
				

			 	
				
				   
				

			 	
				
				  By: 
				

			 	
				
				  
 /s/ Charles D. Lasky

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]