Document:

Unassociated Document

    EXHIBIT
10.2

    

    

     

     

    MASTER
STANDARD SERVICE OFFER (“SSO”)

     

    SUPPLY  AGREEMENT

     

    FOR
THE PERIOD

     

    FROM
JUNE 1, 2009

     

    THROUGH
MAY 31, 2011

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      TABLE OF
CONTENTS

      

      

      
        
          	
                  ARTICLE
      1:

                	
                  DEFINITIONS

                	
                  2

                
	
                  ARTICLE
      2:

                	
                  GENERAL
      TERMS AND CONDITIONS

                	
                  11

                
	
                  2.1

                	
                  Capacity In
      Which Companies Are Entering Into This Agreement

                	
                  11

                
	
                  2.2

                	
                  Parties’
      Obligations

                	
                  11

                
	
                  2.3

                	
                  MISO
      Services

                	
                  13

                
	
                  2.4

                	
                  Communications
      and Data Exchange

                	
                  14

                
	
                  2.5

                	
                  Record
      Retention

                	
                  15

                
	
                  2.6

                	
                  Verification

                	
                  15

                
	
                  ARTICLE
      3:

                	
                  REPRESENTATIONS
      AND WARRANTIES

                	
                  16

                
	
                  3.1

                	
                  SSO Supplier's
      Representations and Warranties

                	
                  16

                
	
                  3.2

                	
                  Companies’
      Representations and Warranties

                	
                  18

                
	
                  3.3

                	
                  Joint
      Representations and Warranties

                	
                  20

                
	
                  3.4

                	
                  Survival of
      Obligations

                	
                  21

                
	
                  ARTICLE
      4:

                	
                  COMMENCEMENT
      AND TERMINATION OF AGREEMENT

                	
                  21

                
	
                  4.1

                	
                  Commencement
      and Termination

                	
                  21

                
	
                  4.2

                	
                  Termination of
      Right to Supply SSO

                	
                  21

                
	
                  4.3

                	
                  Survival of
      Obligations

                	
                  21

                
	
                  4.4

                	
                  Mutual
      Termination

                	
                  22

                
	
                  ARTICLE
      5:

                	
                  BREACH
      AND DEFAULT

                	
                  23

                
	
                  5.1

                	
                  Events of
      Default

                	
                  23

                
	
                  5.2

                	
                  Rights Upon
      Default

                	
                  26

                
	
                  5.3

                	
                  Damages
      Resulting From an Event of Default

                	
                  26

                
	
                  5.4

                	
                  Declaration of
      an Early Termination Date and Calculation of Settlement 

                  Amount and
      Termination Payment

                	
                   

                  29

                
	
                  5.5

                	
                  Step-up
      Provision

                	
                  32

                
	
                  5.6

                	
                  Setoff of
      Payment Obligations of the Non-Defaulting Party

                	
                  33

                
	
                  5.7

                	
                  Preservation
      of Rights of Non-Defaulting Party

                	
                  34

                
	
                  ARTICLE
      6:

                	
                  CREDITWORTHINESS

                	
                  34

                
	
                  6.1

                	
                  Applicability

                	
                  34

                
	
                  6.2

                	
                  Creditworthiness
      Determination

                	
                  34

                
	
                  6.3

                	
                  Independent
      Credit Requirement

                	
                  35

                
	
                  6.4

                	
                  Independent
      Credit Threshold

                	
                  35

                
	
                  6.5

                	
                  Mark-to-Market
      Credit Exposure Methodology

                	
                  40

                
	
                  6.6

                	
                  Credit
      Limit

                	
                  41

                
	
                  6.7

                	
                  Posting Margin
      and Return of Surplus Margin

                	
                  44

                
	
                  6.8

                	
                  Grant of
      Security Interest/Remedies

                	
                  46

                
	
                  6.9

                	
                  Security
      Instruments

                	
                  49

                
	
                  6.10

                	
                  Maintenance of
      Creditworthiness

                	
                  51

                
	
                  6.11

                	
                  Calling on
      Security

                	
                  51

                
	
                  6.12

                	
                  Interest on
      Cash Held by Company

                	
                  52

                

        

      

      
        
           

        

        
          i

          
            

          

        

        
           

        

      

      

      
        
          	
                  6.13

                	
                  Confidentiality

                	
                  52

                
	
                  6.14

                	
                  No Endorsement
      of SSO Supplier

                	
                  53

                
	
                  ARTICLE
      7:

                	
                  PROCEDURES
      FOR ENERGY SCHEDULING AND DATA 

                  TRANSMISSION

                	
                   

                  53

                
	
                  7.1

                	
                  Load
      Obligations

                	
                  53

                
	
                  7.2

                	
                  Data
      Transmission

                	
                  54

                
	
                  7.3

                	
                  Energy
      Scheduling

                	
                  54

                
	
                  7.4

                	
                  Meter Data
      Management Agent

                	
                  54

                
	 
    	 
    	 
    
	
                  ARTICLE
      8:

                	
                  THE
      ENERGY SETTLEMENT/RECONCILIATION PROCESS

                	
                  55

                
	
                  8.1

                	
                  Energy
      Settlement By MISO

                	
                  55

                
	
                  8.2

                	
                  Energy
      Settlement by the Company

                	
                  55

                
	
                  ARTICLE
      9:

                	
                  BILLING
      AND PAYMENT

                	
                  55

                
	
                  9.1

                	
                  The Company
      Payment of Obligations to the SSO Supplier

                	
                  55

                
	
                  9.2

                	
                  Billing for
      SSO Supplier’s Obligations to Other Parties

                	
                  57

                
	
                  9.3

                	
                  The SSO
      Supplier Payment of Obligations to the Companies

                	
                  57

                
	
                  ARTICLE
      10:

                	
                  SYSTEM
      OPERATION

                	
                  58

                
	
                  10.1

                	
                  Disconnection
      and Curtailment by the Companies

                	
                  58

                
	
                  10.2

                	
                  Inadvertent
      Loss of Service to SSO Customers

                	
                  59

                
	
                  10.3

                	
                  Good Faith
      Efforts

                	
                  59

                
	
                  10.4

                	
                  MISO
      Requirements

                	
                  60

                
	
                  10.5

                	
                  Compliance
      with Governmental Directives

                	
                  60

                
	
                  ARTICLE
      11:

                	
                  DISPUTE
      RESOLUTION

                	
                  60

                
	
                  11.1

                	
                  Informal
      Resolution of Disputes

                	
                  60

                
	
                  11.2

                	
                  Recourse to
      Agencies or Courts of Competent Jurisdiction

                	
                  61

                
	
                  ARTICLE
      12:

                	
                  REGULATORY
      AUTHORIZATIONS AND JURISDICTION

                	
                  61

                
	
                  12.1

                	
                  Compliance
      with Applicable Legal Authorities

                	
                  61

                
	
                  12.2

                	
                  FERC
      Jurisdictional Matters

                	
                  61

                
	
                  ARTICLE
      13:

                	
                  LIMITATION
      OF LIABILITY

                	
                  62

                
	
                  13.1

                	
                  Limitations on
      Liability

                	
                  62

                
	
                  13.2

                	
                  Risk of
      Loss

                	
                  62

                
	
                  ARTICLE
      14:

                	
                  INDEMNIFICATION

                	
                  63

                
	
                  14.1

                	
                  Indemnification

                	
                  63

                
	
                  14.2

                	
                  Survives
      Agreement

                	
                  64

                
	
                  ARTICLE
      15:

                	
                  MISCELLANEOUS
      PROVISIONS

                	
                  65

                
	
                  15.1

                	
                  Notices

                	
                  65

                
	
                  15.2

                	
                  No Prejudice
      of Rights

                	
                  66

                
	
                  15.3

                	
                  Assignment

                	
                  66

                
	
                  15.4

                	
                  Governing Law
      and Venue

                	
                  68

                
	
                  15.5

                	
                  Headings

                	
                  68

                
	
                  15.6

                	
                  Third Party
      Beneficiaries

                	
                  68

                
	
                  15.7

                	
                  General
      Miscellaneous Provisions

                	
                  68

                
	
                  15.8

                	
                  Taxes

                	
                  69

                

        

      

      
        
           

        

        
          ii

          
            

          

        

        
           

        

      

      

      
        
          	
                  15.9

                	
                  Use of Word
      "Including"

                	
                  70

                
	
                  15.10

                	
                  Federal
      Acquisition

                	
                  70

                
	
                  15.11

                	
                  Binding
      Terms

                	
                  71

                
	
                  15.12

                	
                  Confidentiality

                	
                  71

                
	
                  15.13

                	
                  Amendment

                	
                  74

                
	
                  15.14

                	
                  Counterparts

                	
                  74

                
	 
    	 
    
	
                  APPENDIX
      A TO MASTER SSO SUPPLY AGREEMENT

                	
                  76

                
	
                  APPENDIX
      B TO MASTER SSO SUPPLY AGREEMENT

                	
                  77

                
	
                  APPENDIX
      C TO MASTER SSO SUPPLY AGREEMENT

                	
                  78

                
	
                  APPENDIX
      D TO MASTER SSO SUPPLY AGREEMENT

                	
                  84

                
	
                  APPENDIX
      E TO MASTER SSO SUPPLY AGREEMENT

                	
                  98

                
	
                  APPENDIX
      F TO MASTER SSO SUPPLY AGREEMENT

                	
                  104

                

        

      

       

    

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

    MASTER
SSO SUPPLY AGREEMENT

    
 

    THIS MASTER SSO SUPPLY
AGREEMENT, made and entered into this ___ day of__________, 2009 by and
between The Cleveland Electric Illuminating Company, The Toledo Edison Company
and Ohio Edison Company (collectively, the “Companies”), each of which is a
corporation organized and existing under the laws of the State of Ohio, and each
of the suppliers listed on Appendix A hereto severally, but not jointly (each a
“SSO Supplier” and, collectively, the “SSO Suppliers”).  The Companies
and each SSO Supplier are hereinafter sometimes referred to collectively as the
“Parties,” or individually as a “Party,”

     

    WITNESSETH:

     

    WHEREAS, each of the Companies
is an Ohio public utility engaged, inter alia, in providing
SSO Service within its service territory; and

     

    WHEREAS, the PUCO found that,
for periods on and after June 1, 2009, it would serve the public interest for
the Companies to secure SSO Supply through a competitive bidding process; and

     

    WHEREAS, on _______, 2009 the
Company conducted and completed a successful solicitation  for SSO
Supply; and,

     

    WHEREAS, the SSO Supplier was
one of the winning bidders in the Solicitation for the provision of SSO Supply;
and

     

    WHEREAS, the PUCO has
authorized the Companies to contract with winning bidders for the provision of
SSO Supply to serve SSO Load in accordance with the terms of this Standard
Service Offer Master SSO Supply Agreement (“Agreement”); and

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    WHEREAS, the Companies and the
SSO Supplier desire to enter into this Agreement setting forth their respective
obligations concerning the provision of SSO Supply.

     

    NOW, THEREFORE, in
consideration of the mutual covenants and promises set forth below, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereto, intending to be legally bound, hereby
covenant, promise and agree as follows:

     

    ARTICLE
1:                    DEFINITIONS

     

    Any capitalized or
abbreviated term not elsewhere defined in this Agreement will have the
definition set forth in this Article.

     

    Ancillary Services has the
same meaning ascribed to the term in the applicable MISO Rules.

    

    Applicable Legal Authorities
means generally, those federal and Ohio statutes and administrative rules and
regulations that govern the electric utility industry in Ohio.

    

    Asset Owner has the meaning
ascribed thereto in the applicable MISO Rules.

    

    Auction Revenue Right or ARR has the same meaning
ascribed to the term in the applicable MISO Rules.

    

    Bankruptcy Code means those
laws of the United States of America related to bankruptcy, codified and enacted
as Title 11 of the United States Code, entitled “Bankruptcy” and found at 11
U.S.C. § 101 et
seq., as such laws may be amended, modified, replaced or superseded from
time to time.

    

    Billing Month means each
calendar month during the term of this Agreement.

    

    Business Day means any day on
which the Companies’ and MISO’s corporate offices are open for business and
commercial banks are not authorized or required to close.

    

    Charge means any fee, charge
or other amount that is billable by the Companies to the SSO Supplier under this
Agreement.

    

    Cinergy Hub means the liquid
pricing point located in MISO.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    Commercial Customer means a
Customer taking service under one of the Companies’ General Service – Small
Tariffs.

    

    Commercial Pricing Node or “CP Node”
has the same meaning ascribed to the term in the applicable MISO Rules as
of the Effective Date.

    

    Competitive Electricity Supply
means unbundled Energy, Resource Adequacy Requirements, Ancillary Services and
Firm Transmission Service, including all transmission and distribution losses
and congestion associated with the provision of the foregoing services, other
obligations or responsibilities currently imposed or that may be imposed by
MISO, and such other services or products that are provided by a CRES Supplier
to fulfill its obligations to serve customer load.  The provision of
Competitive Electricity Supply by CRES Suppliers entails fulfillment of all
obligations associated with service to Customers, including the obligations of
an LSE under the applicable MISO Rules.

    

    Costs mean, with respect to
the Non-Defaulting Party, any brokerage fees, commissions and other similar
transaction costs and expenses reasonably incurred by such Party either in
terminating any arrangement pursuant to which it has hedged its obligations or
entering into new arrangements which replace this Agreement; and all reasonable
attorneys’ fees and expenses incurred by the Non-Defaulting Party in connection
with the termination of this Agreement.

    

    CRES Supplier means a person
or entity that is duly certified by the Commission to offer and to assume the
contractual and legal responsibility to provide Competitive Electricity Supply
to Customers located in the state of Ohio pursuant to retail open access
programs approved by the Commission.

    

    Customer means any person or
entity who receives distribution service from the Companies, including, without
limitation, all persons eligible to receive Competitive Electricity Supply from
a CRES Supplier or SSO Service, respectively, in accordance with the Applicable
Legal Authorities.

    

    Damages means the amount of
compensation specified in Article 5 of this Agreement  due to a Party
resulting from an Event of Default or an Early Termination of this
Agreement.

    

    Defaulting Party means a Party
that causes or is subject to an Event of Default.

    

    Delivery Period means the time
period during which this Agreement is in effect.

    

    Early Termination means
termination of this Agreement prior to the end of the term due to the occurrence
of an Event of Default as specified in Section 5.2 of this Agreement and the
declaration of Early Termination.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    Early Termination Date means
the date upon which an Early Termination becomes effective as specified in
Section 5.2 of this Agreement.

    

    Emergency means (i) an
abnormal system condition requiring manual or automatic action to maintain
system frequency, or to prevent loss of firm load, equipment damage, or tripping
of system elements that could adversely affect the reliability of an electric
system or the safety of persons or property; or (ii) a condition that requires
implementation of emergency operations procedures; or (iii) any other condition
or situation that the Companies, the FirstEnergy Balancing Authority operator,
other transmission owner, or MISO deems imminently likely to endanger life or
property or to affect or impair the Companies’ electrical system or the
electrical system(s) of other(s) to which the Companies’ electrical system is
directly or indirectly connected (a "Connected Entity").  Such a
condition or situation may include, but shall not be limited to, potential
overloading of the Companies’ transmission or distribution circuits, MISO
minimum generation ("light load") conditions, or unusual operating conditions on
either the Companies’ or a Connected Entity's electrical system, or conditions
such that the Companies are unable to accept Energy from the SSO Supplier
without jeopardizing the Companies’ electrical system or a Connected Entity's
electrical system.

    

    Energy means three-phase,
60-cycle alternating current electric energy, expressed in units of
kilowatt-hours or megawatt-hours.

    

    Event of Default means a
breach of obligations under this Agreement as set forth in Section 5.2
hereof.

    

    FERC means the Federal Energy
Regulatory Commission, or any successor thereto.

    

    Final FERC Order means a final
order issued by FERC which is no longer subject to rehearing or judicial review
and is not the subject of proceedings at FERC on remand from any
court.

    

    Final Monthly Energy Allocation or
“FMEA” means a quantity of Energy expressed in MWh which, for any Billing
Month, is the PMEA adjusted for any billing or metering errors found subsequent
to the calculation of PMEA of which MISO is notified prior to the last date on
which MISO issues a settlement statement for a previous operating day for the
Billing Month.

    

    Financial Transmission Rights or
“FTRs” has the same meaning ascribed to the term in the applicable MISO
Rules.

    

    Firm Transmission Service
means “Network Integration Transmission Service” under the MISO
Rules.  In the event the MISO Rules are modified such that “Network
Integration Transmission Service” is no longer offered, Firm Transmission
Service means the type of transmission service offered under the MISO Rules that
is accorded the highest level of priority for scheduling and curtailment
purposes.

    
 

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    FirstEnergy Balancing Authority
means the geographic region represented by the combined service
territories of The Cleveland Electric Illuminating Company, The Toledo Edison
Company, Pennsylvania Power Company and Ohio Edison Company, as may be modified from time
to time, and which is recognized by the North American Electric Reliability
Council as the "FirstEnergy Balancing Authority."

    

    FirstEnergy Load Zone means
that set of electrical locations determined pursuant to the applicable MISO
tariff, rules, agreements and procedures, representing the aggregate area of
consumption for the Companies within the FirstEnergy Balancing Authority and
used for the purposes of scheduling, reporting withdrawal volumes, and settling
Energy transactions at aggregated load levels, to facilitate Energy market
transactions.  The reference commercial pricing node will be the MISO
commercial pricing node labeled “FESR”

    

    First Mortgage Bond – has the
meaning ascribed in Section 6.9(c) of this Agreement.

    

    Forward Market Price means
forward market prices as determined by publicly-available market quotations
obtained by the Companies for the Cinergy Hub, which is indicative of market
conditions in the FirstEnergy Balancing
Authority.   

    

    Gains means, with respect to
any Party, an amount equal to the present value of the economic benefit to it,
if any (exclusive of Costs), resulting from an Early Termination of this
Agreement, determined in a commercially reasonable manner.

    

    General Service – Small
Tariffs means Rate Schedules GS, STL, TRF and POL of the Companies’
Tariffs for Electric Service.

    

    General Service – Large
Tariffs means Rate Schedules GP, GSU and GT of the Companies’ Tariffs for
Electric Service.

    

    Guaranty means a guaranty,
hypothecation agreement, margins or security agreement or any other document,
(whether in the form attached to this Agreement or other form approved by the
Companies.)

    

    Guarantor means any party
having the authority and agreeing to guarantee a SSO Supplier’s financial
obligations under this Agreement, recognizing that such a party will be
obligated to meet the Companies’ creditworthiness requirements for SSO
Suppliers.

    

    Independent Credit Requirement or
“ICR” means an amount per Tranche required as security under Section 6.3
hereof, to reflect the risk of Energy price movements between the date of an
Early Termination caused by an Event of Default by a SSO Supplier and the date
the final calculation of Damages owing to the Companies under Section 5.2 is
made.

    

    Industrial Customer means a
Customer taking service under one of the Companies’ General Service – Large
Tariffs.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Interest Index means the
average Federal Funds Effective Rate, defined below, for the period of time the
funds are on deposit.  The Federal Funds Effective Rate is published
daily on the Federal Reserve website http://www.federalreserve.gov/releases/h15/update/.

    

    Kilowatt or “kW” means a unit
of measurement of useful power equivalent to 1,000 watts.

    

    Kilowatt-hour or “kWh” means
one kilowatt of electric power used over a period of one hour.

    

    Load Serving Entity or “LSE”
has the same meaning ascribed to the term in the applicable MISO
Rules.

    

    Losses means, with respect to
any Party, an amount equal to the present value of the economic loss to it, if
any (exclusive of Costs), resulting from an Early Termination of this Agreement,
determined in a commercially reasonable manner.

     

    Margin means the amount by
which the Total Exposure Amount exceeds the Credit Limit of the SSO Supplier, or
its Guarantor, as defined in Section 6.6 of this Agreement.

    

    Market Participant has the
meaning ascribed thereto in the MISO Rules.

    

    Mark-to-Market Exposure Amount
means an amount calculated daily for each SSO Supplier reflecting the exposure
to the Companies due to fluctuations in market prices for Energy as set forth in
Section 6.5 and in Appendix C minus amounts due pursuant to this Agreement to
such SSO Supplier for the delivery of SSO Supply.

    

    Megawatt or “MW” means one thousand
kilowatts.

    

    Megawatt-hour or “MWh” means one megawatt of
electric power used over a period of one hour.

    

    Merger Event means when a
Party consolidates or amalgamates with, or merges into or with, or transfers all
or substantially all of its assets to another entity and either (i) the
resulting entity fails to assume all of the obligations of such Party hereunder
or (ii) the benefits of any credit support provided pursuant to Article 6 fail
to extend to the performance by such resulting, surviving or transferee entity
of the Party’s obligations hereunder, and the resulting entity fails to meet the
creditworthiness standards of this Agreement.  Transfer of all or
substantially all of the Companies’ generation assets does not qualify as a
Merger Event.

    

    Meter Data Management Agent
has the meaning ascribed thereto in the applicable MISO Rules.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    Meter Read Date means the date
on which each of the Companies is scheduled, in accordance with its own
established procedures and practices and its own regularly-scheduled billing
cycles, to read a meter for purposes of producing Customer bills.

    

    Meter Reading means the
process whereby each of the Companies takes notice of the information presented
on a Customers’ meters.  A Meter Reading may be obtained manually,
through telemetry, or by estimation, in accordance with each of the Companies’
established procedures and practices.

    

    Minimum Rating means a minimum
senior unsecured debt rating as defined in Section 6.4(a)(i) of this
Agreement.

    

    MISO means the Midwest
Independent Transmission System Operator, Inc. its successors and
assigns.

    

    MISO Charges means the
prevailing charges required by MISO to be paid by each LSE operating in the
MISO.

    

    MISO EMT means the prevailing
MISO Open Access Transmission and Energy Markets Tariff on file with the FERC,
which sets forth the rates, terms and conditions, among other things, of
transmission service over transmission facilities located in the FirstEnergy
Balancing Authority and the rules governing MISO’s administration of Energy
markets, Ancillary Services, Financial Transmission Rights and Resource Adequacy
Requirements, as well as any MISO Business Practice Manuals as are in effect on
the date hereof and as modified from time to time.

    

    MISO Rules means any MISO
tariff, rules or agreements, or succeeding, superseding or amended versions of
the MISO tariff, rules or agreements that may take effect from time to time over
the term of this Agreement.

    

    Mutual Termination Agreement
has the meaning ascribed to in Section 4.4 of this Agreement.

    

    NERC means the North American
Electric Reliability Council or its successor.

    

    PJM Western Hub means a liquid
pricing point in PJM.

    

    Preliminary Monthly Energy Allocation
or “PMEA” means a quantity of Energy expressed in MWh which, for any
Billing Month, is the preliminary calculation of the Supplier’s SSO Supplier
Responsibility Share.

    

    PMEA/FMEA Adjustment means,
for any Billing Month, the monetary amount due to the SSO Supplier or the
Companies, as the case may be, in order to reconcile any difference between the
PMEA used for the purpose of calculating estimated payments made to SSO Supplier
for a given month and the FMEA used for calculating the final payments due to
the SSO Supplier for such month as more fully described in Article 9
hereof.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    Price means the price in $/MWh
set forth in Appendix A hereto, resulting from the Companies’ Solicitation for
the opportunity to provide SSO Supply.  The Price is the basis for
financial settlement of SSO Supply supplied by the SSO Supplier for SSO
Customers under this Agreement.

    

    PUCO or “Commission” means the
Public Utilities Commission of Ohio, or any successor thereto.

    

    Residential Customer means a
Customer taking service under any of the Companies’ Residential
Tariffs.

    

    Residential Tariff means Rate
Schedule RS.

    

    Resource Adequacy Requirements
means those requirements (or equivalent requirements) set forth in the
applicable MISO Rules, and as may be replaced or superseded by other
requirements in or in succeeding, superseding or amended versions of the MISO
Rules.

    

    Seasonal Billing Factor means
a numerical factor, as set forth in Appendix B hereto, one amount applicable
during the summer months of June through August, and one amount applicable
during the non-summer months of September through May, applied to the Price in
accordance with the provisions of Article 9 hereof and thereby used to adjust
the Companies’ payments to SSO Suppliers.  

    

    Service Territory means the
geographic areas of the State of Ohio in which the Companies serve
Customers.

    

    Settlement Amount means, with
respect to a Non-Defaulting Party, the net amount of the Losses or Gains, and
Costs, expressed in U.S. Dollars, which such party incurs as a result of Early
Termination, as set forth in Section 5.4(a) of this
Agreement.   For the purposes of calculating the Termination
Payment, the Settlement Amount shall be considered an amount due to the
Non-Defaulting Party under this Agreement if total of the Losses and Costs
exceeds the Gains and shall be considered an amount due to the Defaulting Party
under this Agreement if the Gains exceed the total of the Losses and
Costs.

    

    Solicitation means the
competitive bidding process by which the counterparty, quantity, pricing and
other terms of this Agreement are established.

    

    SSO Customers means
Residential, Commercial and Industrial Customers, including special contract
(SC) Customers, taking SSO Service from the Companies during the term of this
Agreement. 

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
 

    SSO Load means the full
electricity requirement including, without limitation, Energy, Capacity,
Resource Adequacy Requirements, Ancillary Services and Firm Transmission Service
of SSO Customers.  The hourly Energy requirements of SSO Load used to
determine the PMEA and FMEA will be measured and reported by the Companies to
MISO and will include distribution losses.    

    

    SSO Load Share means the SSO
Supplier’s portion of the FirstEnergy Load Zone single coincident peak
attributable to the Companies SSO Customers. 

    

    SSO Service means Standard
Service Offer electric generation service that is provided by the Companies to
any Customer that is not being served by a CRES Supplier. 

    

    SSO Supplier means an entity
that has been selected through the Solicitation and has accepted the obligations
and associated rights to provide SSO Supply to the Companies for retail
customers in accordance with the Applicable Legal Authorities and has entered
into this Agreement with the Companies as a Party.  The term
“supplier” also refers generically to any entity authorized by the PUCO to
provide SSO Supply where the context makes it appropriate to do
so.  The distinction can be derived from the context, but is also
generally reflected in the use of lower case type ("supplier") to reflect the
generic usage, and an initial capital ("Supplier") to reflect a Party to this
Agreement. 

    

    SSO Supplier Load Zone means
the load zone created pursuant to MISO’s tariff, rules, agreements and
procedures encompassing the individual SSO Supplier’s proportionate share of the
FirstEnergy Load Zone based on that SSO Supplier’s SSO Supplier Responsibility
Share.

    

    SSO Supplier Representative
means any officer, director, employee, consultant, contractor, or other agent or
representative of the SSO Supplier in connection with the SSO Supplier's
activity solely as a SSO Supplier.  To the extent the SSO Supplier is
a division or group of a company, the term SSO Supplier Representative does not
include any person in that company who is not part of the SSO Supplier division
or group.

    

    SSO Supplier Responsibility
Share means, for each SSO Supplier, the fixed percentage share of the
Companies’ SSO Load for which the SSO Supplier is responsible as set forth in
Appendix A.  The stated percentage share is determined by multiplying
the number of Tranches won by the SSO Supplier in the Solicitation times the
Tranche size percentage share.

    

    SSO Supply means unbundled
Energy, Capacity, Resource Adequacy Requirements, Ancillary Services and Firm
Transmission Service, including all transmission and distribution losses and
congestion and imbalance costs associated with the provision of such
services, as
measured and reported to MISO, and such other services or
products that a SSO Supplier may be required, by MISO or other governmental body
having jurisdiction, to provide in order to meet the SSO Supplier Responsibility
Share under this Agreement. 

     

     

    
      
        
        

      

      
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    SSO Tariffs means Schedules of
Rates of The Cleveland Electric Illuminating Company (P.U.C.O. 13), The Toledo
Edison Company (P.U.C.O. 8) and Ohio Edison Company (P.U.C.O. 11) , and as those
Rate Schedules may be amended from time to time.  Copies of the SSO
Tariffs may be obtained at http://www.firstenergycorp.com/corporate/Operating_Companies/index.html.

    

    Standard Service Offer means a
market-based standard service offer of all competitive retail electric services
necessary to maintain essential electric service to consumers, including a firm
supply of electric generation service as required by Section 4928.141 of the
Ohio Revised Code.

    

    Statement means a monthly
report prepared by the Companies for the SSO Supplier indicating the amount due
to the SSO Supplier in compensation for kWh supplied for SSO Customers by the
SSO Supplier during the current Billing Month, in accordance with SSO Supplier’s
obligations under this Agreement.

    

    Surplus Margin has the meaning
ascribed in Section 6.9(c) of this Agreement.

    

    Tangible Net Worth or “TNW”
means total assets less intangible assets and total liabilities. Intangible
assets include benefits such as goodwill, patents, copyrights and
trademarks.

    

    Termination
Payment  has the meaning set forth in Section 5.4 of this
Agreement.

    

    Total Exposure Amount means an
amount calculated daily for each SSO Supplier reflecting the total credit
exposure to the Companies and consisting of the sum of (i) the Mark-to-Market
Exposure Amount arising under this Agreement; (ii) any amount(s) designated as
the “Mark-to-Market Exposure Amount” arising under any other SSO Supply
agreements providing for “SSO Supply” or similar SSO Service; and (iii) the
amount designated as the “credit exposure” under any other SSO Supply agreements
providing for SSO Supply; provided that in the event the amount calculated for
any day is a negative number, it shall be deemed to be zero for such
day.

    

    Tranche means a fixed
percentage share of the Companies’ SSO Load as determined for the purposes of
the Solicitation conducted to procure SSO Supply for the Companies’ SSO
Load.  The fixed percentage is the Tranche size for the
Companies.

    

    Zonal Peak Load means the
monthly coincident peak load of the transmission system within the FirstEnergy
Balancing Authority.

     

     

    
      
        
        

      

      
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    ARTICLE
2:                    GENERAL
TERMS AND CONDITIONS

     

     

    2.1           Capacity
In Which Companies Are Entering Into This Agreement

     

    Each SSO Supplier
agrees and acknowledges that the Companies are contracting for the provision of
SSO Supply from such SSO Supplier for Customers receiving SSO Service on the
Companies’ distribution systems pursuant to the authorizations provided to each
of the Companies.  The SSO Supplier further agrees
and acknowledges that the Companies will administer and monitor the SSO
Supplier’s performance in providing SSO Supply under this Agreement and that the
Companies will be entitled to enforce SSO Suppliers’ obligations related to the
provision of SSO Supply.  The SSO Supplier hereby permanently and
irrevocably waives any claim that Companies are not entitled to seek enforcement
of this Agreement.

                   The
Parties acknowledge that this Agreement is a forward contract and, accordingly,
the Parties hereto are entitled to the protections of Section 556 of the
Bankruptcy Code.  The Parties therefore agree that this Agreement may
be terminated by either Party upon the commencement of a proceeding by one Party
under any chapter of the Bankruptcy Code in accordance with Section 5.2
hereof.

     

    2.2           Parties’
Obligations

     

    (a)           Obligations
of SSO Supplier

    Each SSO Supplier
hereby agrees severally, but not jointly, as follows:

    (i)          
  to provide sufficient quantities of SSO Supply on an instantaneous
basis at all times to meet the SSO Supplier Responsibility Share;

    (ii)          
 to procure those services provided by MISO and to perform such functions
as may be required by MISO that are necessary for the delivery of SSO Supply

     

     

    
      
        
        

      

      
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    required hereunder,
and to pay all costs, fees, and charges associated with such services, except to
the extent that, as expressly set forth in this Agreement, the Companies are
acting as the Meter Data Management Agent of the SSO Suppliers under the MISO
EMT;

    (iii)           to
cooperate with the Companies in any regulatory compliance efforts that may be
required to maintain the ongoing legitimacy and enforceability of the terms of
this Agreement and to fulfill any regulatory reporting requirement associated
with the provision of SSO Supply or SSO Service, before the PUCO, FERC or any
other regulatory body asserting jurisdiction;

    (iv)           to
become the Asset Owner, Market Participant and LSE solely with respect to the
provision of SSO Supply for the SSO Supplier Responsibility Share and to comply
with all MISO rights and obligations of an Asset Owner, Market Participant and
LSE with respect to such SSO Supplier Responsibility Share;

    (v)           
to become a Market Participant, including obtaining a properly defined CP Node
and provide written evidence thereof to the Companies and to remain a Market
Participant for the entire term of this Agreement;

    (vii)           to
pay to the Companies the PMEA/FMEA Adjustment Amount for any month in which the
PMEA exceeds the FMEA, as more fully described in Article 9 hereof
;

     (viii)        to
comply in a timely manner with all obligations under this Agreement imposed upon
a SSO Supplier.

     

    (b)           Obligations
of the Companies

    The Companies hereby
agree severally, but not jointly, as follows:

     

     

    
      
        
        

      

      
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    (i)     to pay to each SSO
Supplier every Billing Month an amount equal to the Price multiplied by the
Seasonal Billing Factor multiplied by the PMEA, as detailed in Article
9;

    (ii)    to act as the Meter
Data Management Agent for the SSO Suppliers;

    (iii)           to
pay to each SSO Supplier the PMEA/FMEA Adjustment Amount for any month in which
the FMEA exceeds the PMEA, as more fully described in Article 9
hereof;

    (iv)           to
transfer ARR revenues or to pay to each SSO Supplier the net revenues from sales
of its FTRs into the MISO Market, in proportion to such SSO Supplier’s SSO
Supplier Responsibility Share, for the period from June 1, 2009 through May 31,
2011;

    (v)    to provide a monthly
Statement to the SSO Supplier showing calculation of amounts due pursuant to
Article 9.

    (vi)           to
incrementally adjust the bid prices for, and payment to, winning bidders to the
extent that the MISO rate for Network Integration Transmission Service (NITS),
Seams Elimination Cost Adjustment (SECA) or other non-market-based FERC-approved
charges change, or are newly approved, and apply to the winning bidder(s) during
the period June 1, 2009 through May 31, 2011 pursuant to a FERC
order.

     

    2.3           MISO
Services

     

    Each SSO Supplier
must make all necessary arrangements for the delivery of SSO Supply through
MISO.  As MDMA for settlement purposes, the Companies will advise MISO
of the magnitude of each SSO Supplier's actual SSO Supplier Responsibility
Share, as required by applicable MISO EMT, for the purpose of calculating such
SSO 

     

     

    
      
        
        

      

      
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    Supplier’s
appropriate Energy obligation, Resource Adequacy Requirements obligation,
Ancillary Services obligation, Firm Transmission Service obligation, and other
requirements and obligations currently and as may be amended from time to time
by MISO, related to the provision of service under this Agreement by SSO
Suppliers arising under the applicable MISO EMT.  Each SSO Supplier
will remain responsible to MISO for the performance and cost of its Asset Owner,
Market Participant and LSE obligations associated with the provision of SSO
Supply under this Agreement until the effective date of the transfer of such
Asset Owner, Market Participant and LSE obligations.

     

    2.4           Communications
and Data Exchange

     

    Each SSO Supplier
and the Companies will supply to each other all data, materials or other
information that is specified in this Agreement, or that may otherwise
reasonably be required by SSO Suppliers or by the Companies in connection with
the provision of SSO Supply by the SSO Supplier for SSO Customers, if required,
in a thorough and timely manner.

    Electronic
information exchange between each SSO Supplier and the Companies under this
Agreement will employ a SSO Supplier identification number, assigned by the
Companies, which must be consistent with the SSO Supplier's Dunn &
Bradstreet Business number.  No later than three business days
following the close of the auction, each SSO Supplier must be equipped with the
communications capabilities necessary to comply with the communications and data
exchange standards that are set by and as may, from time to time, be modified by
MISO, and must bear the costs of putting in place and successfully testing all
required information technology systems that will enable it to 

     

     

    
      
        
        

      

      
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    send to and receive
data from the Companies and MISO and to satisfy its obligations under this
Agreement, any applicable MISO EMT.

     

    2.5           Record
Retention

     

    The Companies will
retain for a period of two (2) years following the expiration of the term of
this Agreement, necessary records so as to permit SSO Suppliers to confirm the
validity of payments due to SSO Suppliers hereunder; provided that, if a SSO
Supplier has provided notice within two (2) years of the expiration of the term
of this Agreement that it disputes the validity of any payments, the Companies
agree that they will retain all records related to such dispute until the
dispute is finally resolved.

    Each SSO Supplier
will have the right, upon reasonable notice, to inspect the books and records
retained by the Companies which document the payments due and owing, or owed and
paid, to the SSO Supplier.  Such inspection must take place during
regular business hours.

     

    2.6           Verification

     

            In
the event of a good faith dispute regarding any invoice issued or payment due
under this Agreement, each Party will have the right to verify, at its sole
expense, the accuracy of the invoice or the calculation of the payment due by
obtaining copies of the relevant portions of the books and records of the other
Party.  The right of verification will survive the termination of this
Agreement for a period of two (2) years after such termination.  Both
Parties agree that the books and records to be inspected for performance of this
paragraph shall be deemed and treated by the Parties as Confidential
Information.  Both Parties agree to use the Confidential Information
of the other Party for the sole purpose of performance under this
paragraph.  Both Parties will take all 

     

     

    
      
        
        

      

      
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    precautions and
actions to prevent sale, use or disclosure of the other Party’s Confidential
Information to any third party.

     

    ARTICLE
3:                     REPRESENTATIONS
AND WARRANTIES

     

     

    3.1           SSO
Supplier's Representations and Warranties

     

    Each SSO Supplier
hereby represents, warrants and covenants to the Companies as
follows:

    a)    such SSO Supplier is
a corporation, partnership, limited liability company or other legal entity, as
set forth in Appendix A hereto, duly organized, validly existing and in good
standing under the laws of the State of Ohio or, if another jurisdiction, is
duly registered and authorized to do business and is in good standing in the
State of Ohio;

    b)    such SSO Supplier has
all requisite power and authority to execute and deliver this Agreement and to
carry on the business to be conducted by it under this Agreement and to enter
into and perform its obligations hereunder, including satisfaction of all
applicable FERC and MISO requirements, including ongoing status as a signatory
to a service agreement between each of the Companies and SSO Supplier pursuant
to the applicable FERC-approved Tariffs;

    c)           
the execution and delivery of this Agreement and the performance of such SSO
Supplier’s obligations hereunder have been duly authorized by all necessary
action on the part of the SSO Supplier and do not and will not conflict with, or
constitute a breach of or default under, any of the terms, conditions, or
provisions of the SSO Supplier’s certificate of incorporation or bylaws or any
indenture, mortgage, other evidence of indebtedness, or other agreement or
instrument or any statute or rule, regulation, order, judgment, or decree of any
judicial or administrative body to which the 

     

     

    
      
        
        

      

      
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    SSO Supplier is a
party or by which the SSO Supplier or any of its properties is bound or
subject;

    d)         
  all necessary and appropriate action that is required on the SSO
Supplier’s part to execute this Agreement has been completed;

    e)        
   this Agreement is the legal, valid and binding obligation of
such SSO Supplier, enforceable in accordance with its terms;

    f)          
  there are no actions at law, suits in equity, proceedings or claims
pending or, to such SSO Supplier's knowledge, threatened against the SSO
Supplier before any federal, state, foreign or local court, tribunal or
government agency or authority that might materially delay, prevent or hinder
the SSO Supplier's performance of its obligations hereunder;

    g)            it
has entered into this Agreement with a full understanding of the material terms
and risks of the same, and it is capable of assuming those risks;

    h)    the SSO Supplier is
in good standing as an Asset Owner, Market Participant and LSE in MISO, is a
signatory to all applicable MISO agreements, and is in compliance, and will
continue to comply with all obligations, rules, tariffs and regulations, as
established and interpreted by MISO, that are applicable to Asset Owners Market
Participants and LSEs;

    i)           the
SSO Supplier will be solely responsible for payment of all charges due to MISO
currently and as may be amended from time to time by MISO associated with the
SSO Supplier’s standing as an Asset Owner, as a Market Participant and as a LSE,
and the provision of SSO Supply for the SSO Supplier Responsibility
Share;

     

     

    
      
        
        

      

      
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    j)      it has made
its trading and investment decisions (including regarding the suitability
thereof) based upon its own judgment and any advice from such advisors as it has
deemed necessary and not in reliance upon any view expressed by the Companies;
and

    k)   
        the SSO Supplier will comply
with any and all information and data transfer protocols that may be adopted by
the Companies or that are set by, and from time to time modified by, the
Commission; provided that each SSO Supplier will be entitled to challenge any
such protocols in the appropriate forum.

     

    3.2           Companies’
Representations and Warranties

     

    Each of the
Companies hereby represents, warrants and covenants to the SSO Suppliers as
follows:

    a)    
       it is an electric utility corporation
duly organized, validly existing and in good standing under the laws of the
State of Ohio;

    b)      
     it has all requisite power and authority to carry
on the business to be conducted by it under this Agreement and to enter into and
perform its obligations hereunder;

    c)       
    the execution and delivery of this Agreement and the
performance of its obligations hereunder have been duly authorized by all
necessary action on the part of the Company and do not and will not conflict
with, constitute a breach of or default under, any of the terms, conditions, or
provisions of the Company’s certificate of incorporation or bylaws or any
indenture, mortgage, other evidence of indebtedness, or other agreement or
instrument or any statute or rule, regulation, order, judgment, or decree of any
judicial 

     

     

    
      
        
        

      

      
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    or administrative
body to which the Company is a party or by which the Company or any of its
properties is bound or subject;

    d)         
  all necessary and appropriate action that is required on the
Company’s part to execute this Agreement has been completed;

    e)       
    this Agreement is the legal, valid and binding
obligation of the Company, enforceable in accordance with its terms, except as
such enforceability may be limited by Applicable Legal Authorities;

    f)           
 the ability of the Company to pay any and all amounts due and payable
under this Agreement, or upon any potential breach thereof, is not conditioned
upon any governmental or administrative appropriation by the Commission, the
State of Ohio or any other governmental authority;

    g)        
   there are no actions at law, suits in equity, proceedings or
claims pending or, to the Company’s knowledge, threatened against the Company
before any federal, state, foreign or local court, tribunal or governmental
agency or authority that might materially delay, prevent or hinder the Company’s
performance of its obligations under this Agreement;

    h)        
   it has entered into this Agreement with a full understanding
of the material terms and risks of the same, and it is capable of assuming those
risks;

    i)        
    the Company’s performance under this Agreement is not
contingent upon the performance of Customers or the ability of any individual
Customer to fully pay for SSO Service;

     

     

    
      
        
        

      

      
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    j)     the Company will
have full responsibility for metering, billing and delivery with respect to
Customers and SSO Suppliers will have no responsibility with respect
thereto;

    k)     the Company will be
responsible for distribution services and the Supplier will not be responsible
for distribution charges; and

    l)     T he Company will
perform MDMA functions in accordance with MISO Energy Market Tariff and Business
Practice Manuals.

     

    3.3           Joint
Representations and Warranties

     

    Each Party hereby
warrants, represents and covenants to the other that this Agreement is for the
purchase and sale of the full electricity requirement (including, without
limitation, Energy, Capacity, Resource Adequacy Requirements, Ancillary Services
and Firm Transmission Service) of the SSO Load that will be
delivered in quantities expected to be used or sold over a defined period in the
normal course of business, and it is the intention at the inception and
throughout the term of this Agreement that the fulfillment of the SSO Supplier’s
obligation under Section 2.2(a)(i) hereof will result in physical delivery and
not financial settlement, and that the quantity of SSO Supply that each SSO
Supplier must deliver and that each of the Companies must accept for delivery
will be determined by the requirements of the SSO Load for which the SSO
Supplier is responsible under the Agreement, and, as such, that this Agreement
does not provide for an option by either Party with respect to the quantity of
SSO Supply to be delivered or received during performance of the
Agreement.

     

    3.4           Survival
of Obligations

     

    All representations
and warranties contained in this Article are of a continuing nature and must be
maintained during the term of this Agreement.  If a Party learns that
any of the representations, warranties, or covenants in this Agreement are no
longer true during the term of this Agreement, the Party must immediately notify
the other Party in accordance with the notice provisions of Section 15.1 of this
Agreement.

     

    
      ARTICLE
4:         
  COMMENCEMENT
AND TERMINATION OF AGREEMENT

    

     

     

    4.1           Commencement
and Termination

     

    The term of this
Agreement will commence upon the date first written above (the “Effective
Date”); provided that the provision of SSO Supply by SSO Suppliers will commence
for any SSO Customer on or after June 1, 2009 at 12:00:01 a.m. on such date and
continue through May 31, 2011 unless this Agreement is terminated earlier in
accordance with the provisions hereof.

     

    4.2           Termination
of Right to Supply SSO

     

    Each SSO Supplier
agrees that termination of this Agreement for reason of an Event of Default will
terminate any right of such SSO Supplier to provide SSO Supply for the SSO
Customers and nullify any of the entitlements to which such SSO Supplier became
entitled as a result of being selected as a winning bidder in the competitive
bidding for SSO Supply.

     

    4.3           Survival
of Obligations

     

               Termination
of this Agreement for any reason shall not relieve the Companies or any SSO
Supplier of any obligation accrued or accruing prior to such
termination.  

     

     

    
      
        
        

      

      
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    Applicable
provisions of this Agreement will continue in effect after termination to the
extent necessary to provide for final billings and adjustments.

     

               4.4              
Mutual Termination

     

    The Companies and
the SSO Supplier may agree at any time during the term of this Agreement to
terminate their respective rights and obligations hereunder on such terms and
under such conditions that they mutually deem to be appropriate as set forth in
a mutual termination agreement acceptable in form and substance to the Companies
and the SSO Supplier (“Mutual Termination Agreement”); provided that Companies
agree that they will enter into a such Mutual Termination Agreement, which will
discharge the terminating SSO Supplier (the “Terminating SSO Supplier”) with
respect to liabilities arising after the effective date of the Mutual
Termination Agreement if the following conditions precedent are
met:  (i) the Terminating SSO Supplier identifies a replacement
supplier willing to assume all obligations of the Terminating SSO Supplier
hereunder for the remaining term of this Agreement (the “Replacement SSO
Supplier”); (ii) the Replacement SSO Supplier demonstrates its compliance with
Article 6 hereof, “Creditworthiness”, as of the effective date of the Mutual
Termination Agreement; (iii) the Replacement SSO Supplier executes a counterpart
signature page to this Agreement and thereby becomes a Party under this
Agreement, effective immediately following the effective date of the Mutual
Termination Agreement; and (iv) the Terminating SSO Supplier is not, to the
belief or knowledge of the Companies, subject to an Event of Default as of the
effective date of the Mutual Termination Agreement or, if the Companies believe
that the Terminating SSO Supplier may be subject to an Event of Default, either
(a) the Companies have determined that, as of the effective date of the

     

     

    
      
        
        

      

      
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    Mutual Termination
Agreement, they have not incurred any Damages as a result of the Event of
Default or (b) if the Companies have determined, as of the effective date of the
Mutual Termination Agreement, that they may have incurred Damages as a result of
the Event of Default, that the Replacement SSO Supplier has agreed in writing to
be responsible for the payment of such Damages or to otherwise cure the Event of
Default, in either case to the satisfaction of the Companies.

     

    ARTICLE
5:                    BREACH
AND DEFAULT

     

     

    5.1           Events
of Default

     

    An Event of Default
under this Agreement will occur if a Party (the "Defaulting
Party"):

    (i)     is the subject of a
voluntary bankruptcy, insolvency or similar proceeding;

    (ii)         
  makes an assignment for the benefit of its creditors;

    (iii)           applies
for, seeks consent to, or acquiesces in the appointment of a receiver,
custodian, trustee, liquidator or similar official to manage all or a
substantial portion of its assets;

    (iv)           is
dissolved (other than pursuant to a consolidation, amalgamation or merger) or is
the subject of a Merger Event;

    (v)           
has a secured party take possession of all or substantially all of its assets or
has a distress, execution, attachment, sequestration or other legal process
levied, enforced or sued on or against all or substantially all of its
assets;

    (vi)           has
a resolution passed for its winding-up, official management or liquidation
(other than pursuant to a consolidation, amalgamation or merger);

     

     

    
      
        
        

      

      
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    (vii)           in
the case of an SSO Supplier, fails to become an LSE or fails to remain an LSE
for the entire term hereof as required under Section 2.2(a) of this
Agreement;

    (viii)
         in the case of an SSO
Supplier, fails to become a Market Participant or fails to show proof of having
established a proper CP Node and provide written evidence thereof to the Company
or fails to remain a Market Participant for the entire term hereof as required
under Section 2.2(a) of this Agreement;  

    (ix)           in
the case of an SSO Supplier, MISO terminates the SSO Supplier’s ability to make
purchases from the MISO markets or MISO holds any of the Companies responsible
for the provision of Energy, Resource Adequacy Requirements, Ancillary Services
or Firm Transmission Services to meet the Supplier’s SSO Supplier Responsibility
Share under this Agreement; 

    (x)           
fails to comply with the Creditworthiness standards as set forth in Article 6
below, including, without limitation, compliance with the Creditworthiness
requirements to cover the Margin calculated under Section 6.7 or post any Margin
due under Section 6.7, within the time frames set forth in the
Agreement;

    (xi)           fails
to pay the other Party within one (1) Business Day after notice is given by the
other Party of nonpayment when payment is due;

    (xii)          violates
any federal, state or local code, regulation or statute applicable to the supply
of Energy in a manner that materially, and adversely, affects the Party’s
performance under this Agreement, including by way of failure to continually
satisfy all applicable FERC requirements, or, in the case of a SSO Supplier, by
way of failure to maintain any other governmental approvals required for
participation in the Ohio retail 

     

     

    
      
        
        

      

      
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    Energy market as a
SSO Supplier, default on any obligation or other failure to comply with MISO
requirements under the applicable MISO tariff, rules or agreements;

    (xiii)
         is the subject of an
involuntary bankruptcy or similar proceeding;

    (xiv)          subject
to Section 5.3(b) hereof, in the case of the Companies, fails to accept SSO
Supply properly tendered by SSO Supplier under this Agreement; 

    (xv)           fails
to satisfy any other material obligation under this Agreement not listed above;

    (xvi)          makes
a materially incorrect or misleading representation or warranty under this
Agreement; or

    (xvii)         commits
an act or makes an omission that constitutes an “Event of Default” under any
other agreement(s) for the provision of SSO Service between the Company and the
SSO Supplier; and fails to remedy such condition, event or delinquency herein
above described such that the other Party (the “Non-Defaulting Party”) is
completely made whole with respect to such condition, event or delinquency,
within three (3) Business Days of receipt of written notice thereof from such
Non-Defaulting Party; provided, however, that an Event of Default will be deemed
to have occurred immediately, without any need for the provision of notice
thereof by the Non-Defaulting Party and without any right of cure on the part of
the Defaulting Party, in the event of the occurrence of a condition, event or
delinquency described in subsections “i”, “ii”, “iii”, “iv”, “v”, “vi”, “vii”,
“viii”,  “ix”, “x” or “xi” above.  Termination of this
Agreement by the PUCO, other regulatory authority, or court of law does not
constitute an Event of Default under this Agreement.

     

     

    
      
        
        

      

      
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    5.2           Rights
Upon Default

     

    Upon and during the
continuation of an Event of Default, the Non-Defaulting Party will be entitled
to:

    (i)     
      pursue any and all available legal and
equitable remedies;

    (ii)           declare
an Early Termination Date of this Agreement with respect to the obligations of
the Defaulting Party without any liability or responsibility whatsoever except
for obligations arising prior to the date of termination, by providing written
notice to the Defaulting Party; provided, however, that this Agreement will
immediately terminate automatically and without notice in the case of any Event
of Default in which a Supplier is the Defaulting Party occurring under Section
5.1(i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), or (xi) hereof
and such date of automatic termination will be deemed the Early Termination Date
of this Agreement with respect to such Supplier; and

    (iii)           receive
Damages in accordance with Section 5.3 of this Agreement.

    The Non-Defaulting Party will be entitled to
elect or pursue one or more of the above remedies simultaneously or
sequentially, as appropriate.

     

     

    
      
        
        

      

      
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               5.3               Damages
Resulting From an Event of Default

     

    (a)           SSO
Suppliers’ Failure to Supply SSO Supply or Declaration of Early Termination By
the Companies:  Damages resulting from (i) a SSO Supplier’s
failure to (A) provide SSO Supply in conformance with Section 2.2 hereof or (B)
pay MISO for purchases of any products or services from MISO, or other failure
to comply with the applicable MISO requirements, such that MISO holds any of the
Companies responsible for the provision of Energy, Resource Adequacy
Requirements, Ancillary Services or Firm Transmission Services to meet the SSO
Supplier Responsibility Share 

     

     

    
      
        
        

      

      
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    under this Agreement
or (ii) the occurrence of any Event of Default attributable to a SSO Supplier
resulting in Early Termination, will include all costs incurred by any of the
Companies, acting in a commercially reasonable manner consistent with any
statutory or regulatory requirements imposed by the Applicable Legal
Authorities, in obtaining replacement services or in obtaining a replacement
supplier, which costs exceed the amounts that would have been payable to the
defaulting SSO Supplier under this Agreement.  Costs incurred by the
Companies for the purpose of calculating Damages hereunder will consist of the
following:

    (i)           the
cost of Energy, Capacity, Resource Adequacy Requirements, Ancillary Services and
Firm Transmission Service (including transmission and distribution losses,
congestion, administrative charges or other elements of SSO Supply) currently
and as may be amended from time to time by MISO allocated to the Company by MISO
due to the failure of a SSO Supplier to meet obligations owing to MISO in
connection with its obligations under this Agreement;

    (ii)          the
cost of Energy, Capacity, Resource Adequacy Requirements, Ancillary Services and
Firm Transmission Service (including transmission and distribution losses,
congestion, administrative charges or other elements of SSO Supply) currently
and as may be amended from time to time by MISO purchased by the Company to
replace SSO Supply that a SSO Supplier was obligated to supply under this
Agreement during the term hereof;

    (iii)       
administrative and
legal costs associated with procuring replacement SSO Supply; and

     

     

    
      
        
        

      

      
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    (iv)         financial
hedging costs incurred by any of the Companies as a result of having to procure
SSO Supply not provided by a SSO Supplier.

    Without limitation
of the foregoing, Damages calculated hereunder will constitute the ultimate
liability of a SSO Supplier in the event of an Early Termination caused by an
Event of Default attributable to such SSO Supplier regardless of the reason or
basis for such Early Termination.  The Parties recognize, however, the
final calculation of Damages hereunder may not be known for some time since the
level of such Damages may be dependant upon the arrangements made by the Company
to obtain replacement services or a replacement supplier.  The
Companies and each SSO Supplier agree that, until the calculation of Damages
under this provision is completed, the amount and payment to the Companies of
the Settlement Amount in the event of an Early Termination as set forth in
Section 5.4 hereof will be immediately due and owing as an estimate of all
Damages ultimately determined to be due and owing.   After
Damages have been finally determined under this Section 5.3, the amounts of
Damages due and owing will be reconciled with payments already made by SSO
Supplier under Section 5.4 hereof.

    (b)           Failure
By the Companies To Accept SSO Supply Tendered By SSO Supplier: Damages resulting
from the failure of the Companies to accept SSO Supply tendered by the SSO
Supplier necessary to meet the SSO Supplier Responsibility Share of SSO Load
under this Agreement will consist of the positive difference (if any) between
the amounts that would have been payable to the SSO Supplier hereunder had the
Companies accepted the SSO Supply tendered by the SSO Supplier necessary to the
SSO Supplier Responsibility Share of SSO Load under this Agreement minus the
amount 

     

     

    
      
        
        

      

      
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    realized by the SSO
Supplier in disposing, in a reasonable commercial manner, of the SSO Supply not
accepted by the Companies; provided however, that the Companies will not be
required to accept quantities of unbundled Energy, Capacity, Ancillary Services,
Firm Transmission Service or other component of SSO Supply utilized by Customers
on an instantaneous basis as a function of electrical load, in excess of such
Customer’s instantaneous consumption of such component of SSO Supply; and
further provided that the Companies are not liable for any Damages if this
Agreement is terminated by the PUCO, other regulatory authority or a court of
law.

    (c)           Damages
Resulting From Early Termination Due To An Event of Default Attributable To the
Companies:  Damages resulting from Early Termination due to an
Event of Default attributable to the Companies will be as set forth in Section
5.4 below.  Damages calculated in accordance with Section 5.4, and
reflected in the Termination Payment, shall be the exclusive remedy available to
the SSO Supplier in the event of Early Termination resulting from an Event of
Default attributable to the Companies.  The Companies shall not be
liable for any Damages if this Agreement is terminated by the PUCO, other
regulatory authority or a court of law.

    (d)           Other
Damages:  Damages for Events of Default not specified above
shall consist of the direct damages incurred by the Non-Defaulting
Party.

     

    
                     
5.4          Declaration
of an Early Termination Date and Calculation of Settlement Amount and
Termination Payment

    

     

    (a)           Settlement
Amount.  If an Event of Default with respect to a Defaulting
Party has occurred and is continuing, the Non-Defaulting Party (in the case of
an Event of Default by the Companies, each SSO Supplier shall be considered a
“Non-Defaulting Party”) shall have the right (i) to designate a day, no earlier
than the day such 

     

     

    
      
        
        

      

      
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    notice is effective
and no later than twenty (20) days after such notice is effective, as a date for
Early Termination (“Early Termination Date”) to accelerate all amounts owing
between the Parties and to liquidate and terminate the undertakings set forth in
this Agreement (ii) withhold any payments due to the Defaulting Party under this
Agreement and (iii) suspend performance; provided however, that an Early
Termination Date shall be deemed to occur automatically and concurrently with
the Event of Default, without any requirement for the provision of notice by the
Non-Defaulting Party,  with respect to an Event of Default under
subparagraphs “i”, “ii”, “iii”, “iv”, “v”, “vi”, “vii”, “viii”, “ix”, “x” and
“xi” of Section 5.1.  The Non-Defaulting Party will calculate, in a
commercially reasonable manner, a Settlement Amount with respect to the
obligations under this Agreement.  For the purposes of such
determination, the quantity amounts of Energy (including all charges for
transmission and distribution losses and congestion) and other services provided
for under this Agreement for the period following the Early Termination Date
through the remainder of the term of this Agreement will be deemed to be those
quantity amounts that would have been delivered on an hourly basis, had this
Agreement been in effect during the previous calendar year adjusted for such SSO
Load changes as may have occurred since the previous calendar year.

    (b)           Net Out
of Settlement Amounts.  The Non-Defaulting Party will calculate
Termination Payment by aggregating all Settlement Amounts due under this
Agreement or any other agreement(s) between the Companies and the SSO Supplier
for the provision of SSO Supply into a single amount by netting out (a) all
Settlement Amounts that are due or will become due to the Defaulting Party, plus
at the option of the Non-Defaulting Party, any cash or other form of security
then available to the Non-

     

     

    
      
        
        

      

      
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    Defaulting Party and
actually received, liquidated and retained by the Non-Defaulting Party, plus any
or all other amounts due to the Defaulting Party under this Agreement or any
other agreement(s) between the Companies and the SSO Supplier for the provision
of SSO Supply against (b) all Settlement Amounts that are due or will become due
to the Non-Defaulting Party, plus any or all other amounts due to the
Non-Defaulting party under this Agreement or any other agreement(s) between the
Companies and the SSO Supplier for the provision of SSO Supply, so that all such
amounts will be netted out to a single liquidated amount; provided however, that
if the SSO Supplier is the Defaulting Party and the Termination Payment is due
to the SSO Supplier, the Company will be entitled to retain a commercially
reasonable portion of the Termination Payment, which may be equal to the entire
amount of the Termination Payment, as security for additional amounts that may
be determined to be due and owing by the SSO Supplier as Damages and further
provided that any previously attached security interest of the Companies in such
retained amounts will continue.  The Termination Payment will be due
to or due from the Non-Defaulting Party as appropriate.  If the
Termination Payment has been retained by the Companies as security for
additional amounts that may be determined to be due and owing by the SSO
Supplier, and if, upon making a final determination of Damages, the Termination
Payment, or any portion thereof, is to be made to the SSO Supplier, the
Companies will pay simple interest on the Termination Payment amount being made
to the SSO Supplier.  Simple interest will be calculated at the lower
of the Interest Index or six (6) percent per annum.

    (c)           Notice of
Termination Payment.  As soon as practicable after calculation
of a Termination Payment, notice must be given by the Non-Defaulting Party

     

     

    
      
        
        

      

      
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    to the Defaulting
Party of the amount of the Termination Payment and whether the Termination
Payment is due to or due from the Non-Defaulting Party.  The notice
will include a written statement explaining in reasonable detail the calculation
of such amount.  Subject to Section 5.4(b), the Termination Payment
must be made by the Party that owes it within three (3) Business Days after such
notice is received by the Defaulting Party.

    (d)           Disputes
With Respect to Termination Payment.  If the Defaulting Party
disputes the Non-Defaulting Party’s calculation of the Termination Payment, in
whole or in part, the Defaulting Party must, within three (3) Business Days of
receipt of Non-Defaulting Party’s calculation of the Termination Payment,
provide to the Non-Defaulting Party a detailed written explanation of the basis
for such dispute; provided, however, that if the Termination Payment is due from
the Defaulting Party, the Defaulting Party must first provide commercially
reasonable financial assurances to the Non-Defaulting Party in an amount equal
to the Termination Payment.

     

    5.5           Step-up
Provision

     

    If any one or more
SSO Suppliers defaults in its obligations hereunder resulting in the exercise of
the right of Early Termination by the Companies with respect to such SSO
Supplier(s), then the Companies, subject to Applicable Legal Authorities, may
offer some or all Non-Defaulting Supplier(s) the optional right to assume under
this Agreement additional Tranches of SSO Load, and subject to further
compliance with the creditworthiness provisions of Article 6 of this
Agreement.  The provision of any such offer by the Companies to
Non-Defaulting Suppliers will indicate the duration of the offer and the manner
of acceptance thereof.  Following the assumption by SSO 

     

     

    
      
        
        

      

      
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    Supplier(s) of
additional Tranches hereunder, the Companies will prepare a modified Appendix A
which will set forth the revised SSO Supplier Responsibility Shares of the SSO
Load of the participating Non-Defaulting SSO Supplier(s) following such
assumption.  This modified Appendix A must be initialed (as a single
document or in counterparts) by the Companies and any affected SSO Supplier(s)
and shall thereafter be deemed a part of this Agreement, as to such affected SSO
Supplier(s), from its effective date.  A SSO Supplier will not suffer
any prejudice under this Agreement or otherwise if it declines an offer to
assume additional Tranches upon the default by another SSO
Supplier.

     

    5.6           Setoff
of Payment Obligations of the Non-Defaulting Party

     

    Any payment
obligations of the Non-Defaulting Party to the Defaulting Party pursuant to this
Agreement or any other agreement(s) between the Companies and the SSO Supplier
for the provision of SSO Supply will be set off  (i) first, to satisfy
any payment obligations of the Defaulting Party to the Non-Defaulting Party
pursuant to this Agreement or any other agreement(s) between the Companies and
the SSO Supplier for the provision of SSO Supply that are unsecured and not
subject to any Guaranty; (ii) second, to satisfy any payment obligations of the
Defaulting Party to the Non-Defaulting Party pursuant to this Agreement or any
other agreement(s) between the Companies and the SSO Supplier for the provision
of SSO Supply that are unsecured, but which are subject to a Guaranty; and (iii)
third, to satisfy any remaining payment obligations of the Defaulting Party to
the Non-Defaulting Party pursuant to this Agreement or any other agreement(s)
between the Companies and the SSO Supplier for the provision of SSO
Supply.  

     

     

    
      
        
        

      

      
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    5.7           Preservation
of Rights of Non-Defaulting Party

     

                   The
rights of the Non-Defaulting Party under this Agreement, including without
limitation Sections 5.4 and 5.6, will be supplemental to, and not in lieu of,
any right of recoupment, lien, or set-off afforded by applicable law, and all
such rights are expressly preserved for the benefit of the Non-Defaulting
Party.

     

     

    ARTICLE
6:                    CREDITWORTHINESS

     

     

    6.1           Applicability

     

    Each SSO Supplier
agrees that it will meet the Creditworthiness standards of this Article 6 at all
times during the term of this Agreements and will inform the Companies
immediately of any changes in its credit rating or financial condition. Without
limitation of the foregoing, each SSO Supplier shall, upon written request,
affirmatively demonstrate to the Companies, its compliance with the
Creditworthiness standards set forth hereunder.  The Companies may,
upon reasonable advance notice, establish less restrictive Creditworthiness
standards under this Article 6 in a non-discriminatory manner,

    6.2           Creditworthiness
Determination

    The SSO Supplier may
submit and maintain a security deposit in accordance with Section 6.3 and 6.6
below in lieu of submitting to or being qualified under a creditworthiness
evaluation.  The SSO Supplier may petition the Companies to
re-evaluate its creditworthiness whenever an event occurs that the SSO Supplier
believes would improve the determination made by the Companies of its
creditworthiness.  The Companies’ credit re-evaluation must be
completed as soon as possible,  but in no event,  longer
than thirty (30) days after receiving a fully documented request.  The
Companies 

     

     

    
      
        
        

      

      
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    shall provide the
rationale for their determination of the credit limit and any resulting security
requirement.  The Companies shall perform their credit re-evaluation
and associated security calculation in a non-discriminatory
manner.  SSO Suppliers shall provide unrestricted access to audited
financial statements; however, if audited financial statements are not
available, the Companies may specify other types of financial statements that
will be accepted.

     

    6.3           Independent
Credit Requirement

     

    The Independent
Credit Requirement (“ICR”) per tranche (“ICRT”) that will be required of SSO
Suppliers under this Agreement will initially be $1.5 million per Tranche and
will decline in accordance with the schedule included as part of Appendix C
throughout the term hereof.  The ICR under this Agreement is the ICRT
times the number of Tranches shown in Appendix A hereto.

     

    6.4           Independent
Credit Threshold

     

    SSO Suppliers that
qualify under the following criteria will be granted an Independent Credit
Threshold (“ICT”).  The ICT will be used by the SSO Suppliers solely
to partially or fully cover the aggregate ICR amounts under this Agreement and
any other SSO agreement(s) between it and the Companies.  In all
instances, the most current senior unsecured debt rating (or, if unavailable,
the most current corporate issuer debt rating) will be used.

    (a)  The
following requirements shall apply to SSO Suppliers or Guarantors of SSO
Suppliers that have been incorporated or otherwise formed under the laws of the
United States in order to be granted an ICT.  For SSO Suppliers who
cannot meet the following requirements, the posting of cash or letter of credit
in an acceptable 

     

     

    
      
        
        

      

      
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    form as defined in
Section 6.9(b) below (see standard format
in Appendix D) for the entire aggregate ICR amounts under this Agreement and any
other SSO agreement(s) between it and the Companies will be required at the time
of or prior to the execution of this Agreement.

    (i)           The
SSO Supplier must (1) be rated by at least one of the following rating
agencies:  Standard & Poor's Rating Services (“S&P”), Moody's
Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”), and (2) have a
minimum senior unsecured debt rating (or, if unavailable, corporate issuer
rating) of at least “BBB-” from S&P, “Baa3” from Moody’s, or “BBB-” from
Fitch (a "Minimum Rating").  If the SSO Supplier is rated by only two
rating agencies, and the ratings are split, the highest rating will be
used.  If the SSO Supplier is rated by three rating agencies, and the
ratings are split, the lower of the two highest ratings will be used; provided
that, in the event that the two highest ratings are common, such common rating
will be used.  The maximum level of the ICT will be determined based
on the following table:

     

    
      
        
          
            
              	
                      Credit Rating
      of the SSO Supplier

                    	
                      Max.
      

                      Independent
      

                      Credit
      

                      Threshold

                    	 
    
	
                      S&P

                    	
                      Moody’s

                    	
                      Fitch

                    	 
    
	
                      BBB+              
      and 

                      above

                       

                    	
                      Baa1               
      and 

                      above

                    	
                      BBB+              
      and 

                      above

                    	
                      16% of
      TNW

                    
	
                      BBB

                       

                    	
                      Baa2

                    	
                      BBB

                    	
                      10% of
      TNW

                    
	
                      BBB-

                       

                    	
                      Baa3

                    	
                      BBB-

                    	
                      8% of
      TNW

                    
	
                      Below
      BBB-

                    	
                      Below
      Baa3

                    	
                      Below
      BBB-

                    	
                      0% of
      TNW

                       

                    

            

          

        

      

    

     

     

    
      
        
        

      

      
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    The SSO Supplier
will be required to post cash or a letter of credit in an acceptable form as
defined in Section 6.9 (b) below (see standard format
in Appendix D)  for the aggregate ICR amounts under this Agreement and
any other SSO agreement(s) between it and the Companies, to the
extent  that the aggregate ICR exceeds the ICT; or

    (ii)          For
SSO Suppliers having a Guarantor, the Guarantor must (1) be rated by at least
one of the following rating agencies:  S&P, Moody's, or Fitch, and
(2) have a minimum senior unsecured debt rating (or, if unavailable, corporate
issuer rating) equal to the Minimum Rating.  If the SSO Supplier is
rated by only two rating agencies, and the ratings are split, the highest rating
will be used.  If the SSO Supplier is rated by three rating agencies,
and the ratings are split, the lower of the two highest ratings will be used;
provided that, in the event that the two highest ratings are common, such common
rating will be used.  The maximum level of the ICT that could be
provided through the Guaranty (see standard format
in Appendix E) will be determined based on the following table:

    

    
      
        
          
            	
                    Credit Rating
      of the Guarantor

                  	
                    Max.
      

                    Independent
      

                    Credit
      Threshold

                  
	
                    S&P

                  	
                    Moody’s

                  	
                    Fitch

                  	 
    
	
                    BBB+               
      and 

                    above

                     

                  	
                    Baa1                
      and 

                    above

                  	
                    BBB+               
      and 

                    above

                  	
                    16% of
      TNW

                  
	
                    BBB

                  	
                    Baa2

                  	
                    BBB

                  	
                    10% of
      TNW

                     

                  
	
                    BBB-

                  	
                    Baa3

                  	
                    BBB-

                  	
                    8% of
      TNW

                     

                  
	
                    Below
      BBB-

                  	
                    Below
      Baa3

                  	
                    Below
      BBB-

                  	
                    0% of
      TNW

                     

                  

          

        

      

    

     

     

     

    
      
        
        

      

      
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    The SSO Supplier
will be granted an ICT of up to the amount of the Guaranty, provided that the
amount of the Guaranty is below the maximum ICT shown in the table
above.  If a Guaranty is provided for an unlimited amount, the SSO
Supplier will be granted an ICT of up to the maximum ICT shown in the table
above.  The Guaranty tendered by the SSO Supplier to satisfy the ITC
requirement arising under this Section 6.4 shall be a separate document from the
Guaranty, if any, tendered by the SSO Supplier to satisfy any requirement for a
credit limit to cover the Total Exposure Amount arising under Section 6.6 below;
provided, however, that a single Guaranty may be provided if such Guaranty is
for an unlimited amount.  The SSO Supplier will be required to post
cash or letter of credit in an acceptable form as defined in Section 6.9 (b)
below (see
standard format in Appendix D) for the aggregate ICR amounts under this
Agreement and any other SSO agreement(s) between it and the Companies, to the
extent that the aggregate ICR exceeds the ICT at the time of or prior to the
execution of this Agreement.

    (b)           The
following standards will apply to SSO Suppliers or Guarantors of SSO Suppliers
that have not been incorporated or otherwise formed under the laws of the United
States.  For SSO Suppliers who cannot meet the following requirements,
the posting of cash or letter of credit in an acceptable form as defined in
Section 6.9(b) below (see standard format
in Appendix D) for the entire aggregate ICR amounts under this Agreement and any
other SSO agreement(s) between it and the Companies will be required at the time
of or prior to the execution of this Agreement.

    (i)           The
SSO Supplier must supply such evidence of creditworthiness so as to provide the
Companies with comparable assurances of creditworthiness as is applicable above
for SSO Suppliers that have been incorporated or 

     

     

    
      
        
        

      

      
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    otherwise formed
under the laws of the United States.  The Companies will have full
discretion, without liability or recourse to the SSO Supplier, to evaluate the
evidence of creditworthiness submitted by such SSO Supplier; or

    (ii)          The
Guarantor of a SSO Supplier must supply such evidence of creditworthiness so as
to provide the Companies with comparable assurances of creditworthiness as is
applicable above for Guarantors of SSO Suppliers that have been incorporated or
otherwise formed under the laws of the United States.  The Companies
will have full discretion, without liability or recourse to the Guarantor or the
SSO Supplier, to evaluate the evidence of creditworthiness submitted by such
Guarantor.

    (c)          
 All SSO Suppliers or Guarantors of SSO Suppliers that have not been
incorporated or otherwise formed under the laws of the United States must, in
addition to all documentation required elsewhere in this Section 6.4, supply the
following as a condition of being granted an ICT:

    (i)           For
SSO Supplier: (1) a legal opinion of counsel qualified to practice in the
foreign jurisdiction in the which SSO Supplier is incorporated or otherwise
formed that this Agreement is, or upon the completion of execution formalities
will become, the binding obligation of the SSO Supplier in the jurisdiction in
which it has been incorporated or otherwise formed; (2) the sworn certificate of
the corporate secretary (or similar officer) of such SSO Supplier that the
person executing the Agreement on behalf of the SSO Supplier has the authority
to execute the Agreement and that the governing board of such SSO Supplier has
approved the execution of the Agreement and (3) the sworn certificate of the
corporate secretary (or similar officer) of such SSO Supplier that the SSO
Supplier has been authorized by its governing board  to 

     

     

    
      
        
        

      

      
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    enter into
agreements of the same type as this Agreement.  The Companies will
have full discretion, without liability or recourse to the SSO Supplier, to
evaluate the sufficiency of the documents submitted by the SSO
Supplier.

    (ii)          For
the Guarantor of a SSO Supplier: (1) a legal opinion of counsel qualified to
practice in the foreign jurisdiction in which the Guarantor is incorporated or
otherwise formed that this Guaranty is, or upon the completion of execution
formalities will become, the binding obligation of the Guarantor in the
jurisdiction in which it has been incorporated or otherwise formed; (2) the
sworn certificate of the corporate secretary (or similar officer) of such
Guarantor that the person executing the Guaranty on behalf of the Guarantor has
the authority to execute the Guaranty and that the governing board of such
Guarantor has approved the execution of the Guaranty and (3) the sworn
certificate of the corporate secretary (or similar officer) of such
Guarantor  that the Guarantor has been authorized by its governing
board to enter into agreements of the same type as this Guaranty.  The
Companies will have full discretion, without liability or recourse to the
Guarantor or the SSO Supplier, to evaluate the sufficiency of the documents
submitted by such Guarantor.

     

    6.5           Mark-to-Market
Credit Exposure Methodology

     

    To calculate the
daily exposure for each SSO Supplier the Mark-to-Market (“MtM”) credit exposure
methodology will be used.  The “mark” for each Billing Month will be
determined at the time the competitive bidding process is completed based on the
available Forward Market Prices and, if Forward Market Prices are not available,
using a proprietary method that reflects forward market
conditions.  At the time the competitive bidding process is completed,
the MtM credit exposure for each SSO Supplier shall be 

     

     

    
      
        
        

      

      
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    equal to
zero.  Subsequently, the differences between the available Forward
Market Prices on the valuation date and the “mark” prices for the corresponding
Billing Months will be used to calculate the daily exposures for each SSO
Supplier.  The total MtM credit exposure will be equal to the sum of
the MtM credit exposures for each Billing Month.  The methodology for
calculation of the MtM credit exposure is illustrated in the example (using
hypothetical numbers) set forth in Appendix C hereto.

     

    6.6           Credit
Limit

     

    The following
criteria constitute the Companies’ creditworthiness requirements for the SSO
Suppliers to cover the Total Exposure Amount.  In all instances, the
most current senior unsecured debt rating (or, if unavailable, corporate issuer
rating) will be used.

    (i)           
For SSO Suppliers to be granted an unsecured line of credit, the SSO Supplier
must (1) be rated by at least one of the following rating agencies: S&P,
Moody’s, or Fitch, and (2) have a minimum senior unsecured debt rating (or, if
unavailable, corporate issuer rating) equal to the Minimum Rating.  If
the SSO Supplier is rated by only two rating agencies, and the ratings are
split, the highest rating will be used.  If the SSO Supplier is rated
by three rating agencies, and the ratings are split, the lower of the two
highest ratings will be used; provided that, in the event that the two highest
ratings are common, such common rating will be used.  The maximum
level of the credit limit to cover the Total Exposure Amount will be determined
based on the following table:

     

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    

    
      
        
          
            	
                    Credit Rating
      of the SSO Supplier

                  	
                    Max. Credit
      Limit to 

                    be calculated
      as the lesser of the % of TNW and credit limit cap
below

                  
	
                    S&P

                  	
                    Moody’s

                  	
                    Fitch

                  	
                    %

                  	
                    Credit Limit
      Cap

                     

                  
	
                    BBB+               
      and 

                    above

                  	
                    Baa1               
      and 

                    above

                  	
                    BBB+              
      and 

                    above

                  	
                    16% of
      TNW

                  	
                    $75,000,000

                  
	
                    BBB

                     

                  	
                    Baa2

                  	
                    BBB

                  	
                    10% of
      TNW

                  	
                    $50,000,000

                  
	
                    BBB-

                     

                  	
                    Baa3

                  	
                    BBB-

                  	
                    8% of
      TNW

                  	
                    $25,000,000

                  
	
                    Below
      

                    BBB-

                  	
                    Below
      

                    Baa3

                  	
                    Below
      

                    BBB-

                  	
                    0% of
      TNW

                  	
                    0

                  

          

        

      

    

    

    The SSO Supplier
will be required to post cash, letter of credit in an acceptable form as defined
in Section 6.9 (b) below (see standard format
in Appendix D), or First Mortgage Bonds delivered or pledged as provided for in
Section 6.9(c) below for the Margin due the Company as set forth in Section 6.7
of this Agreement; or

    (ii)           For
SSO Suppliers having a Guarantor, the Guarantor must (1) be rated by at least
one of the following rating agencies: S&P, Moody's, or Fitch, and (2) have a
minimum senior unsecured debt rating (or, if unavailable, corporate issuer
rating) equal to the Minimum Rating.  If SSO Supplier is rated by only
two rating agencies, and the ratings are split, the highest rating will be
used.  If the SSO Supplier is rated by three rating agencies, and the
ratings are split, the lower of the two highest ratings will be used; provided
that, in the event that the two highest ratings are common, such common rating
will be used. The maximum level of the credit limit to cover the Total Exposure
Amount that could be provided through the financial guaranty (see standard format
in Appendix E) will be determined based on the following table:

     

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

     

    
      
        
          
            	
                    Credit Rating
      of the Guarantor

                  	
                    Max. Credit
      Limit 

                    to
      be calculated
      as the lesser of the % 

                    of TNW and
      credit limit cap below

                  
	
                    S&P

                  	
                    Moody’s

                  	
                    Fitch

                  	
                    %

                  	
                    Credit Limit
      Cap

                     

                  
	
                    BBB+               
      and 

                    above

                  	
                    Baa1               
      and 

                    above

                  	
                    BBB+             
      and 

                    above

                  	
                    16% of
      TNW

                  	
                    $75,000,000

                  
	
                    BBB

                     

                  	
                    Baa2

                  	
                    BBB

                  	
                    10% of
      TNW

                  	
                    $50,000,000

                  
	
                    BBB-

                     

                  	
                    Baa3

                  	
                    BBB-

                  	
                    8% of
      TNW

                  	
                    $25,000,000

                  
	
                    Below
      

                    BBB-

                  	
                    Below

                    Baa3

                  	
                    Below
      

                    BBB-

                  	
                    0% of
      TNW

                  	
                    0

                  

          

        

      

    

    

    The SSO Supplier
will be granted a credit limit equal to the lesser of (i) the amount of the
Guaranty as provided to the Companies at the time this Agreement is executed as
such amount may be modified in any amended or substitute Guaranty provided to
the Companies during the term of this Agreement or (ii) the Supplier’s Maximum
Credit Limit.  The SSO Supplier, however, may not increase or
substitute its Guaranty for the purpose of increasing its applicable credit
limit during the time period after the Companies have made a Margin call but
before the SSO Supplier has posted the required
Margin.  Notwithstanding anything herein to contrary, the SSO Supplier
may increase the limit of its Guaranty after satisfying a Margin call from the
Companies and upon the Companies’ receipt of an amended or substitute Guaranty
increasing the limit of the Guaranty, the SSO Supplier may request a return of
Margin in accordance with Section 6.7 hereof.  The SSO Suppliers will
be required to post cash, letter of credit in an acceptable form as defined in
Section 6.9 (b) below (see standard format
in Appendix D), or First Mortgage Bonds delivered or pledged as provided for in
Section 6.9(c) below for the Margin due the Companies as set forth in Section
6.7 of this Agreement; or

     

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    (iii)   The posting of cash
or letter of credit as defined in Section 6.9 (b)  below for the
entire Total Exposure Amount.

     

    6.7           Posting
Margin and Return of Surplus Margin

     

    (a)    If at any time and
from time to time during the term of this Agreement, the Total Exposure Amount
exceeds the SSO Supplier’s or Guarantor’s credit limit, then the Companies on
any Business Day, may request that SSO Supplier provide cash, letter of credit
in an acceptable form as defined in Section 6.9 (b) below (see standard format
in Appendix D),  or First Mortgage Bonds delivered or pledged as
provided for in Section 6.9(c) below,  in an amount equal to the
Margin (less any Margin posted by the SSO Supplier and held by the Companies
pursuant to this Agreement or any other agreement(s) between the Companies and
the SSO Supplier for the provision of SSO Supply).

    If the SSO Supplier
receives written notice for Margin from the Companies by 1:00 p.m. prevailing
Eastern Time on a Business Day, then the SSO Supplier shall post Margin the next
following Business Day if posting cash and the second Business Day if posting a
letter of credit or, with respect to Surplus Margin only, delivering or pledging
First Mortgage Bonds (as defined in Section 6.9(c) below), unless in each case
the Companies agree in writing to extend the period to provide
Margin.  If the SSO Supplier receives notice for Margin from the
Companies after 1:00 p.m. prevailing Eastern Time on a Business Day, whether
posting cash, letter of credit, or First Mortgage Bond delivered or pledged as
provided for in Section 6.9(c) below  then the SSO Supplier must post
Margin the second Business Day following the date of notice unless the Companies
agree in writing to extend the period to provide Margin.  The
Companies will not 

     

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    unreasonably deny a
request for a one-day extension of such period.  In the event that the
SSO Supplier fails to provide Margin when due, then an Event of Default under
Article 5 will be deemed to have occurred and the Companies will be entitled to
the remedies set forth in Article 5 of this Agreement.  If the SSO
Supplier is otherwise entitled to deliver or pledge its or its Guarantor’s First
Mortgage Bonds to cover Surplus Margin, but cannot do so within the second
Business Day time period or any extension thereof, the SSO Supplier may
initially post cash or a letter of credit to satisfy such obligation, which cash
or letter of credit shall be returned by the Companies upon the subsequent
delivery or pledge of its or its Guarantor’s First Mortgage Bonds in accordance
with the provisions of Section 6.9(c) hereof.

    (b)    Remaining Margin
being held by the Companies not needed to satisfy the Total Exposure Amount, as
determined above, will be returned to the SSO Supplier upon receipt of a written
request by the SSO Supplier.  The returned amount to the SSO Supplier
shall be the lesser of the remaining Margin then held by the Companies or the
Total Exposure Amount less the Credit Limit.   If the SSO
Supplier posted cash and notice is received by 1:00 p.m. prevailing Eastern Time
on a Business Day , the remaining Margin will be returned by the next following
Business Day and if the SSO Supplier posted cash and notice is received by the
Companies after 1:00 p.m. prevailing Eastern Time on a Business Day, the
remaining Margin will be returned by the second Business Day following the date
of notice.  If the SSO Supplier posted a letter of credit, the Surplus
Margin shall be returned on the next Business Day following the Business Day on
which the amendment to the letter of credit is received from the issuing
bank.  In the event that the Company fails to return the remaining
Margin when due in accordance 

     

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

    with this Article,
then an Event of Default under Article 5 will be deemed to have occurred and the
SSO Suppliers will be entitled to the remedies set forth in Article 5 of this
Agreement unless SSO Supplier agrees in writing to extend such period for
providing the remaining Margin.  The SSO Supplier will not
unreasonably deny a request for a one-day extension of the period for returning
the remaining Margin.  If after the SSO Supplier or its Guarantor has
delivered or pledged First Mortgage Bonds to cover Surplus Margin (as defined in
Section 6.9(c) below), there exists no Surplus Margin, then upon the written
request of the SSO Supplier, the Companies shall return such First Mortgage
Bonds to the SSO Supplier for cancellation as promptly as reasonably
practicable; provided, however, that no return of any First Mortgage Bonds
pursuant to the foregoing shall relieve the SSO Supplier of its obligation under
this Agreement to post collateral in respect of Margin, including Surplus
Margin, which obligation shall continue in full force and effect at all times
during the term of this Agreement.

     

    6.8           Grant
of Security Interest/Remedies

     

    To secure its
obligations under this Agreement and to the extent that the SSO Supplier
delivered Margin/collateral hereunder, the SSO Supplier hereby grants to the
Companies a present and continuing security interest in, and lien on (and right
of setoff against), and assignment of all property, cash collateral and cash
equivalent collateral and any and all proceeds resulting therefrom or the
liquidation thereof, whether now or hereafter held by, on behalf of, or for the
benefit of, the Companies, and SSO Supplier and the Companies agree to take such
action as reasonably required to perfect the secured Party’s first priority
security interest in, and lien on (and right of setoff against), such collateral
and any and all proceeds resulting therefrom or from the liquidation
thereof.  

     

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    Upon or any time
after the occurrence or deemed occurrence and during the continuation of an
Event of Default or an Early Termination Date, the Companies may do any one or
more of the following in any order: (i) exercise any of the rights and remedies
of the Companies with respect to all collateral, including any such rights and
remedies under law then effect; (ii) exercise their rights of setoff against any
and all property of the SSO Supplier in the possession of the Companies whether
held in connection with this Agreement or any other agreement(s) between the
Companies and the SSO Supplier for the provision of SSO Supply; (iii) draw on
any outstanding letter of credit issued for their benefit; (iv) exercise any and
all rights remedies available to it under and against any First Mortgage Bonds
delivered or pledged in accordance with Section 6.9(c); and (v) liquidate all
security held by or for the benefit of the Companies free from any claim or
right of any nature whatsoever of the SSO Supplier, including any equity or
right of right of purchase or redemption by the SSO Supplier.  The
Companies will apply the proceeds of the collateral realized upon the exercise
of such rights or remedies to reduce the SSO Supplier’s obligation under this
Agreement or any other agreement(s) between the Companies and the SSO Supplier
for the provision of SSO Supply (the SSO Supplier remaining liable for any
amounts owing to the Companies after such application), subject to the
Companies’ obligation to the return of any surplus proceeds remaining after such
obligations are satisfied in full.

    All notices, demands
or requests regarding credit requirements and credit related security or deposit
transfers shall be in writing and shall be personally delivered or sent by
overnight express mail, courier service or facsimile transmission (with the
original transmitted by any of the other aforementioned delivery methods)
addressed as follows:

     

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

     

    If to a SSO
Supplier:

     

    
      Notification
information for each SSO Supplier is set forth on Appendix A
hereto.

    

    

    If to the Companies
to:

     

    Thomas R.
Sims

    Senior Business
Analyst

    FirstEnergy
Corp.

    76 South Main
Street, 17th
Floor

    Akron,
OH  44308

    Telephone:
330-384-3808

    Facsimile:
330-255-1662

    simst@firstenergycorp.com

    
 

                        Copy
to:

     

    David M. Blank

    Vice President, Rates & Regulatory
Affairs

    FirstEnergy
Corp.

    76 South Main
Street, 8th
Floor

    Akron,
OH  44308

    Telephone:
330-384-5451

    Facsimile:
330-761-4281

    dmblank@firstenergycorp.com

    

    Copy
to:

     

    Dean W.
Stathis

    Director, Regulated
Commodity Sourcing

    2800 Pottsville
Pike

    Reading PA
19612-6001

    Telephone:
610-921-6766

    Facsimile:
610-939-8542

    dstathis@firstenergycorp.com

    

    And:

    

    Mark A. Hayden,
Esq.

    FirstEnergy
Corp.

    76 South Main
Street

    Akron,
OH  44308

    Telephone:
330-761-7735

    Facsimile:
330-384-3875

    haydenm@firstenergycorp.com

     

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

     

    or to such other
person at such other address as a Party may designate by like notice to the
other Party.  Notice received after the close of the Business Day will
be deemed received on the next Business Day; provided that notice by facsimile
transmission will be deemed to have been received by the recipient if the
recipient confirms receipt telephonically or in writing.

     

    6.9           Security
Instruments

     

    At each SSO
Supplier’s choice, the following are deemed to be acceptable methods for posting
security, if required:

    (a)           cash;
or

    (b)   a standby
irrevocable letter of credit acceptable to the Company issued by a bank or other
financial institution with a minimum “A” senior unsecured debt rating (or, if
unavailable, corporate issuer rating) from S&P or Moody’s (see standard
format in Appendix D).  The letter of credit shall state that it will
renew automatically for successive one-year or shorter periods, until terminated
upon at least ninety (90) days prior written notice from the issuing financial
institution.  If the Companies receive notice from the issuing
financial institution that letter of credit is being cancelled, the SSO Supplier
will be required to provide a substitute letter of credit from an alternative
bank satisfying the minimum requirements.  The receipt of the
substitute letter of credit must be effective as of the cancellation date and
delivered to the Companies thirty (30) days before the cancellation date of the
original letter of credit.  If the SSO Supplier fails to supply a
substitute letter of credit as required, then the Companies will have the right
to draw on the existing letter of credit and to hold the amount as
Margin.

     

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

     

    If the credit rating
of a bank or other financial institution from which a SSO Supplier has obtained
a letter of credit falls below levels specified in this Article 6, the SSO
Supplier will have two (2) Business Days following written notice by the
Companies to obtain a suitable letter of credit from another bank or other
financial institution that meets those standards unless such period is extended
in writing by Companies; or

    (c)    with respect to
Surplus Margin only the delivery or pledge of First Mortgage Bonds of the SSO
Supplier or its Guarantor, which First Mortgage Bonds shall conform to the
requirements set forth in Appendix F and otherwise be in form, amount and
substance satisfactory to the Companies in their sole discretion. For purposes
of this subsection (c), (i) “Surplus Margin” means Margin in excess of $400
million that has been secured by cash or letter of credit as defined in section
(a) and (b) above and “First Mortgage Bonds” means obligations of such SSO
Supplier or Guarantor, as the case may be, evidenced by a first mortgage bond or
other similar instrument and secured by a first priority lien on all or
substantially all of the property, plant and equipment and related assets of
such SSO Supplier or Guarantor.

    (d)           Notwithstanding
anything in the Agreement to the contrary, the Companies may exercise any rights
or claims to any collateral posted, delivered or pledged to it under Section 6.7
hereof, before, after, concurrently with, or to the exclusion of, any other
collateral posted, delivered or pledged, and in particular are not required to
exercise any remedies whatsoever against any First Mortgage Bonds prior to
applying any cash collateral against, or making a drawing under any letter of
credit in respect of, 

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

     

     

    any liabilities of
the SSO Supplier hereunder or its Guarantor under the Guaranty to the Companies
or any of them

     

    6.10         Maintenance
of Creditworthiness

     

    (a)           Reporting
of Changes.

    Each SSO Supplier
must promptly notify the Companies of any change in its credit rating or
financial condition or that of its Guarantor.  The SSO Supplier or
Guarantor must also furnish evidence of an acceptable credit rating or financial
condition upon the request of the Companies.

    (b)           Change in
Credit Standing.

    The Companies will
re-evaluate the creditworthiness of a SSO Supplier whenever it becomes aware of
an adverse change, through the provision of notice by such SSO Supplier or
otherwise, in the SSO Supplier’s or Guarantor’s credit standing.  If
the lowest credit rating (whether corporate issuer rating or unsecured senior
debt rating) used to determine the SSO Supplier’s ICT or its credit limit
adversely changes, the Companies will require additional security from a SSO
Supplier in accordance with Sections 6.4 and 6.6.  The additional
security must be in a form acceptable to the Companies, as specified in Section
6.9 of this Agreement.

     

    6.11         Calling
on Security

     

    The Companies may
call upon the security posted by the SSO Supplier if the SSO Supplier fails to
pay amounts due to the Companies pursuant to this Agreement or any other
agreement(s) between the Companies and the SSO Supplier for the provision of SSO
Supply after all of the following events occur:

    (a)           written
Notice of Default is provided to the SSO Supplier; and

     

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

     

    (b)           any
applicable cure period ends.

    The foregoing
notwithstanding, the security posted by the SSO Supplier will become due
automatically without prior notice or right of cure in the case of any Event of
Default arising under Section 5.1 (i), (ii), (iii), (iv), (v), (vi), (vii),
(viii), (ix), (x) and (xi) hereof.

     

    6.12         Interest
on Cash Held by Company

     

               The
Companies will pay simple interest calculated at the lower of the Interest Index
or six (6) percent per annum on all cash held by Companies pursuant to this
Agreement. Each Billing Month the SSO Supplier will prepare a statement of
interest amounts due from the Companies.  The statement will be sent
to the Companies within three (3) Business Days after the end of the Billing
Month via overnight mail or other expeditious means.  The Companies
will make interest payments on the first Business Day after the 5th day of
each calendar month.

     

    6.13         Confidentiality

     

    Information supplied
by a SSO Supplier in connection with the creditworthiness process shall be
deemed confidential and not subject to public disclosure, unless Applicable
Legal Authorities require disclosure of the information.  If
information must be disclosed, then the confidentiality of the information will
be maintained consistent with the Applicable Legal Authority’s rules and
regulations pertaining to confidentiality.  The SSO Supplier will be
given prompt notice of any request by a third party to obtain confidential
information related to the SSO Supplier’s creditworthiness.

     

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

     

    6.14         No
Endorsement of SSO Supplier

     

    The Companies’
determination that a SSO Supplier is creditworthy pursuant to the process set
forth above, will not be deemed to constitute an express or implied warranty or
guarantee of any kind with respect to the financial or operational
qualifications of the SSO Supplier.  The Companies will treat all SSO
Suppliers in a non-discriminatory manner and shall provide no preference to any
SSO Supplier. 

     

    
      ARTICLE
7:           
PROCEDURES
FOR ENERGY SCHEDULING AND DATA TRANSMISSION 

    

     

    The Parties must
adhere to any applicable operational requirements of MISO necessary to protect
the integrity of the transmission system within the FirstEnergy Balancing
Authority and the transmission systems of interconnected balancing authorities,
and must satisfy any and all MISO and NERC criteria, when applicable. The SSO
Supplier also must adhere to any applicable operational requirements of the
Companies necessary to protect the integrity of each of the Companies’ local
distribution systems.   

     

    7.1           Load
Obligations

     

    The Companies and
the SSO Supplier acknowledge that the SSO Customers are within the Companies’
service territories and that the SSO Load must be divided into SSO Supplier
obligations by applying the SSO Supplier Responsibility Share for each SSO
Supplier.

     

     

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

     

     

    7.2           Data
Transmission

     

    (a)           Energy

    The procedures for
transmitting load obligation data for the SSO Supplier’s hourly Energy
obligations will be as set forth by MISO.

    (b)           Resource
Adequacy

    The procedures for
transmitting load obligation data for the SSO Supplier’s Resource Adequacy
Requirements will be as set forth by MISO.

    (c)           Transmission

    The SSO Load Share
will be determined by the Companies.  The procedures for transmitting
the SSO Load Share and the SSO Supplier Responsibility Share data based upon
which the SSO Supplier will meet its Firm Transmission Service obligations will
be  as set forth by MISO.

    (d)           Ancillary
Services

    The procedures for
transmitting data regarding the SSO Supplier’s Ancillary Services obligations
will be as set forth by  MISO.

     

    7.3           Energy
Scheduling

     

    The Companies will
not provide load-forecasting services.  The SSO Supplier must schedule
Energy resources to meet its obligations with MISO as provided for in the
applicable MISO tariff, rules, agreements, procedures, and manuals.

     

    7.4           Meter
Data Management Agent

     

    The Companies will
act as the SSO Supplier’s Meter Data Management Agent by providing MISO with the
actual data regarding the SSO Supplier Responsibility Share of the SSO Load for
the purposes of settlement.  The SSO Supplier will access the Meter

     

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

     

     

    Data Management
Agent submitted data directly from the Suppliers’ own MISO portal. The Energy
obligations for each SSO Supplier will be determined based on its SSO Supplier
Responsibility Share.  

     

    
      ARTICLE
8:                   
THE
ENERGY SETTLEMENT/RECONCILIATION PROCESS

    

     

     

    8.1           Energy
Settlement By MISO

     

    The settlement
process occurs at MISO, pursuant to MISO tariffs, rules, agreements, and
procedures, to reflect the SSO Supplier’s actual Energy obligations in a
supply/usage reconciliation process.  For purposes of the settlement
process, the delivery point will be deemed to be the SSO Supplier Load
Zone.

     

    8.2           Energy
Settlement by the Company

     

    Energy Settlement
shall be conducted by the MISO.  In the event that MISO imposes
penalties against any of the Companies as a result of the SSO Supplier’s
transactions or failure to meet the MISO requirements, the Companies will bill
such penalties directly to the SSO Supplier.

     

    ARTICLE
9:                     BILLING
AND PAYMENT

     

     

    9.1           The
Company Payment of Obligations to the SSO Supplier

     

    The Companies will
pay all amounts due to the SSO Supplier hereunder in accordance with the
following provisions:

    (a)           Each
Billing Month, the Company will prepare and provide a Statement to each SSO
Supplier.  Line items on the Statement will show amounts due equal to
the Price multiplied by the applicable Seasonal Billing Factor multiplied by
PMEA times the Price in accordance with Section 2.2.

     

     

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

     

    (b)           The
Statement will be sent to SSO Supplier within six (6) Business Days after the
end of the Billing Month via overnight mail or other expeditious
means.

    (c)           The
Companies will make payment on the first Business Day after the 19th day of
each calendar month.

    (d)           To
the extent that the FMEA differs from the PMEA, the Companies will pay or charge
to the SSO Supplier (the “FMEA/PMEA Adjustment”)

    (e)           If
each Party owes an amount to the other Party pursuant to this Agreement,
including any related interest, and payments or credits, the Parties may satisfy
their respective obligations to each other by netting the aggregate amounts due
to one Party against the aggregate amounts due to the other Party, with the
Party, if any, owing the greater aggregate amount paying the other Party the
difference between the amounts owed.

    (f)           All
payments shall be subject to adjustment for any arithmetic errors, computation
errors, or other errors, provided that the errors become known within one (1)
year of the termination of this Agreement.  

    (g)           The
Companies shall make payments of funds payable to the SSO Supplier by electronic
transfer to a bank designated by the SSO Supplier.

    (h)           If
a good faith dispute arises between the Companies and the SSO Supplier regarding
a Statement, the disputing Party shall be obligated to pay only the undisputed
portion of the Statement, if any, and shall present the dispute in writing and
submit supporting documentation to the non-disputing Party within one-hundred
twenty (120) calendar days from the date of the Statement in
dispute.  Statement disputes must be addressed promptly, and in
accordance with the dispute resolution procedures set forth 

     

     

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

     

    in this
Agreement.  Upon resolution of a Statement dispute, any payments made
to either Party will include simple interest on the payment at the lower of the
Interest Index or six (6) percent per annum payable from the date that notice of
a Statement dispute was received by the non-disputing Party.

    (i)           If
payment is made to the SSO Supplier after the due date shown on the Statement, a
late fee will be added to the unpaid balance until the entire Statement is
paid.  This late fee will be calculated at the prime rate commercial
J.P. Morgan Chase charges borrowers.

     

    9.2           Billing
for SSO Supplier’s Obligations to Other Parties

     

    The Companies shall
have no responsibility for billing between the following entities: the SSO
Supplier and MISO; the SSO Supplier and any Energy source; or the SSO Supplier
and any other third party.  The Companies shall be solely responsible
for billing SSO Customers for SSO Service.

     

    9.3           The
SSO Supplier Payment of Obligations to the Companies

     

    The SSO Supplier
must pay all Charges it incurs hereunder in accordance with the following
provisions:

    (a)           Each
Billing Month, the Companies will submit an invoice to the SSO Supplier for all
Charges provided under this Agreement.  The SSO Supplier must make
payment for Charges incurred on or before the due date shown on the
invoice.  The due date will be on the first Business Day after the
19th
day of each calendar month. The invoice will be sent to SSO Supplier within six
(6) Business Days after the end of the Billing Month via overnight mail or other
expeditious means.

     

     

    
      
        
        

      

      
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    (b)           Invoices
shall be subject to adjustment for any arithmetic errors, computation errors, or
other errors, provided that the errors become known within one year of the
termination of this Agreement.  

    (c)           The
SSO Supplier must make payments of funds payable to the Company by electronic
transfer to a bank designated by the Company.

    (d)           If
a good faith dispute arises between the Companies and the SSO Supplier regarding
an invoice, the disputing Party shall pay only the undisputed portion of the
invoice, if any, and must present the dispute in writing and submit supporting
documentation to the non-disputing Party within one-hundred twenty (120)
calendar days from the due date of the invoice in question.  All
disputes shall be addressed promptly, and in accordance with the dispute
resolution procedures set forth in Article 11.  Upon resolution of a
dispute, any payments made to either Party shall include simple interest on the
payment at the lower of the Interest Index or six (6) percent per annum payable
from the date that notice of a dispute was received by the non-disputing
Party.

    (e)           If
payment is made to the Companies after the due date shown on the invoice, a late
fee will be added to the unpaid balance until the entire invoice is
paid.  This late fee shall be calculated at the prime rate commercial
J.P. Morgan Chase charges borrowers.

     

    ARTICLE
10:                  SYSTEM
OPERATION

     

     

    10.1         Disconnection
and Curtailment by the Companies

     

    Each of the
Companies shall have the right, without incurring any liability to SSO
Suppliers, to disconnect (or otherwise curtail, interrupt or reduce deliveries
from) the SSO Suppliers or to disconnect (or otherwise curtail, interrupt or
reduce deliveries to) any 

     

     

    
      
        
        

      

      
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    Customer whenever
one of the Companies determines in the exercise of its good faith discretion, or
when the Companies are directed by MISO, that such a disconnection, curtailment,
interruption or reduction is necessary to facilitate construction, installation,
maintenance, repair, replacement or inspection of any of the Companies’
facilities; or due to any other reason affecting the safe and reliable operation
of the Companies’ or a Customer’s facilities, including Emergencies, forced
outages or potential overloading of the Companies’ transmission or distribution
circuits, potential damage to any Customer’s facilities or any risk of injury to
persons.   The Companies shall not show any preference for any
entity affiliated with it in connection with any such disconnection or
curtailment.

     

    10.2         Inadvertent
Loss of Service to SSO Customers

     

                  
 The Parties agree and acknowledge that service to SSO Customers may be
inadvertently lost due to storms, weather, accidents, breakage of equipment or
other events beyond the reasonable control of the Companies affecting the
transmission and distribution facilities of the Companies.  Neither
Party will have any liability to the other Party for the occurrence of such
events except for the Companies’ obligation to pursue steps for the resumption
of the disrupted service as set forth in Section 10.3 below.  In no
event will an inadvertent loss of service affect a Party’s obligation to make
any payments then due or becoming due with respect to performance rendered prior
to such inadvertent loss of service.

     

               10.3            
 Good Faith Efforts

     

    The Companies will
use good faith efforts to (a) minimize any curtailment, interruption or
reduction to the extent practicable under the circumstances; (b) provide

     

     

    
      
        
        

      

      
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    the SSO Supplier
with prior notification of any curtailment, interruption or reduction, to the
extent practicable; and (c) resume service as promptly as
practicable.

     

               10.4           
  MISO Requirements

     

    The Parties
acknowledge and agree that, as members of MISO, each of them is bound by all of
the MISO EMT, operating instructions, policies and procedures set forth by
MISO.  The SSO Supplier acknowledges and agrees that it will cooperate
with the Companies, MISO and the applicable balancing authority and reliability
coordinator so that the Companies will be in compliance with all MISO emergency
operations procedures, which include, but are not limited to, those procedures
pertaining to minimum and maximum generation Emergencies, and measures requiring
involuntary Customer participation, such as supply voltage reduction or full
interruption of Customer load by either manual or automatic means.

     

               10.5           
  Compliance with Governmental Directives

     

    The SSO Supplier
also acknowledges and agrees that the Companies may need to act in response to
governmental or civil authority directives that may affect SSO Customer
load.  The SSO Supplier agrees to cooperate with the Companies in
order to comply with said directives.

     

    ARTICLE
11:                  DISPUTE
RESOLUTION

     

     

    11.1         Informal
Resolution of Disputes

     

    The Companies and
the SSO Supplier will use good faith and reasonable commercial efforts to
informally resolve all disputes arising out of the implementation of this
Agreement.  The SSO Supplier's point of contact for all information,
operations, and questions will be as provided for in Article 15.  Any
dispute between the Companies and 

     

     

    
      
        
        

      

      
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    the SSO Supplier
under this Agreement may be referred to a designated senior representative of
each of the Parties for resolution on an informal basis as promptly as
practicable.

     

    11.2         Recourse
to Agencies or Courts of Competent Jurisdiction

     

    Nothing in this
Agreement shall restrict the rights of either Party to file a complaint with the
FERC under relevant provisions of the Federal Power Act (“FPA”), with the PUCO
under relevant provisions of the Applicable Legal Authorities, with a Ohio State
court of competent jurisdiction, or with a federal court of competent
jurisdiction situated in the State of Ohio.  The Parties’ agreement
hereunder is without prejudice to any Parties’ right to contest the jurisdiction
of the agency or court to which a complaint is brought.

     

    ARTICLE
12:                  REGULATORY
AUTHORIZATIONS AND JURISDICTION

     

     

    12.1         Compliance
with Applicable Legal Authorities

     

    The Companies and
the SSO Supplier are subject to, and will comply with, all existing or future
applicable federal, State and local laws, all existing or future
duly-promulgated orders or other duly-authorized actions of MISO or of
Applicable Legal Authorities.

     

    12.2         FERC
Jurisdictional Matters

     

    The inclusion herein
of any descriptions of procedures or processes utilized by MISO or otherwise
subject to the jurisdiction of FERC is intended solely for informational
purposes.  If anything stated herein is found by the FERC in a final
rule, regulation, determination, or order to conflict with or be inconsistent
with any provision of the FPA, or any final rule, regulation, order or
determination of the FERC under the 

     

     

    
      
        
        

      

      
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    FPA or if any
existing procedures or processes utilized by MISO are duly modified, the
applicable FERC rule, regulation, order, determination or modification will
control.  To the extent required under any provision of the FPA, or
any rule, regulation, order or determination of the FERC under the FPA, the
Companies, and SSO Supplier, if applicable, will use reasonable commercial
efforts to secure, from time to time, all appropriate orders, approvals and
determinations from the FERC necessary to support this Agreement.

     

    ARTICLE
13:                  LIMITATION
OF LIABILITY

     

     

    13.1         Limitations
on Liability

     

    Except to the extent
expressly set forth in this Agreement, each Party will be liable to other
Parties for direct damages incurred as a result of such Party’s failure to
comply with this Agreement and no Party will have any liability to the other
Party for consequential, indirect, special or punitive damages, including lost
profits or lost revenues, arising out of such Party’s failure to comply with its
obligations under this Agreement.  Notwithstanding anything to the
contrary in this Agreement, nothing herein shall impose
any  obligations or liability from one SSO Supplier to any other SSO
Supplier(s).

     

    13.2         Risk
of Loss

     

               Solely
for purposes of determining risk of loss and for determining the indemnity
obligations under Article 14 hereof, the Companies will be deemed to have
custody and control of the electric Energy delivered by a SSO Supplier upon
receipt thereof into the Companies’ distribution system and until delivery
thereof at the retail electric meter of the Customer; and each SSO Supplier will
be deemed to have custody and control of the 

     

     

    
      
        
        

      

      
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    electric Energy at
all times prior to receipt thereof by the Companies.  Each SSO
Supplier will at all times be deemed to hold title to electric Energy until
delivery at the retail electric meter of the Customer at which time title shall
be deemed to pass to such Customer.  It is acknowledged and agreed
that the Companies shall at no time take title to any electric Energy under this
Agreement. The Party deemed to have custody and control of electric Energy will,
among the Parties to this Agreement, be responsible for all loss or damage to
property or injury or death to persons arising in connection with such electric
Energy while in its custody and control and will indemnify the other Parties
with respect to same as set forth in Article 14 of this Agreement.

     

    ARTICLE
14:                 
 INDEMNIFICATION

     

     

    14.1         Indemnification

     

    (a)           Should
any of the Companies become the defendant in, or obligor for, any third party’s
claims or liabilities for losses, penalties, expenses, damage to property,
injury to or death of any person including a Party’s employees or any third
parties, that were caused by or occur in connection with an act or omission of a
SSO Supplier with respect to an obligation arising under or in connection with
this Agreement, or for which such SSO Supplier has otherwise assumed liability
under the terms of this Agreement, such SSO Supplier must defend (at the
Companies’ option), indemnify and hold harmless the Companies, their
shareholders, board  members, directors, officers and employees,
agents and attorneys from and against any and all such third party claims and
liabilities, except to the extent that a court of competent jurisdiction
determines that the losses, penalties, expenses or damages were caused wholly or
in part by the gross 

     

     

    
      
        
        

      

      
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    negligence or
willful misconduct of the Companies.  The Companies may, at their own
expense, retain counsel and participate in the defense of any such suit or
action.

    (b)           Should
a SSO Supplier (the “Indemnified Supplier”) become the defendant in, or obligor
for, any third party’s claims or liabilities for losses, penalties, expenses,
damage to property, injury to or death of any person including a Party’s
employees or any third parties, that were caused by or occur in connection with
an act or omission of the Companies or another SSO Supplier with respect to an
obligation arising under or in connection with this Agreement, or for which the
Companies or such other SSO Supplier has otherwise assumed liability under the
terms of this Agreement, the Companies or such SSO Supplier must defend (at the
option of the Indemnified Supplier), indemnify and hold harmless the Indemnified
Supplier, its shareholders, board members, directors, officers, employees,
agents and attorneys from and against any and all such third party claims and/or
liabilities, except to the extent that a court of competent jurisdiction
determines that the losses, penalties, expenses or damages were caused wholly or
in part by the gross negligence or willful misconduct of the Indemnified
Supplier.  The Indemnified Supplier may, at its own expense, retain
counsel and participate in the defense of any such suit or action.

     

    14.2         Survives
Agreement

     

    The obligation of a
Party to defend, indemnify, and hold harmless another Party under this Article
will survive termination of this Agreement, and will not be limited in any way
by any limitation on the amount or type of damages, compensation, or benefits
payable by or for either Party under any statutory scheme, including any
Worker’s Compensation Acts, Disability Benefit Acts or other Employee Benefit
Acts.

     

     

    
      
        
        

      

      
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    ARTICLE
15:                  MISCELLANEOUS
PROVISIONS

     

     

    15.1         Notices

     

    Unless otherwise
stated herein, all notices, demands or requests required or permitted under this
Agreement must be in writing and must be personally delivered or sent by
overnight express mail, courier service or facsimile transmission (with the
original transmitted by any of the other aforementioned delivery methods)
addressed as follows:

     

    If to a SSO
Supplier:

     

    
                              Notification
information for each SSO Supplier is set forth on Appendix A
hereto.

    

    

    If to the Company
to:

     

    David M. Blank

    Vice President, Rates & Regulatory
Affairs

    FirstEnergy
Corp.

    76 South Main
Street, 8th
Floor

    Akron,
OH  44308

    Telephone:
330-384-5451

    Facsimile:
330-761-4281

    dmblank@firstenergycorp.com

    

                                    Copy
to:

     

    Mark A. Hayden,
Esq.

    FirstEnergy
Corp.

    76 South Main
Street

    Akron,
OH  44308

    Telephone:
330-761-7735

    Facsimile:
330-384-3875

    haydenm@firstenergycorp.com

    

    or to such other
person at such other address as a Party may designate by like notice to the
other Party.  Notice received after the close of the Business Day will
be deemed received on the next Business Day; provided that notice by facsimile
transmission will be 

     

     

    
      
        
        

      

      
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    deemed to have been
received by the recipient if the recipient confirms receipt telephonically or in
writing.

     

    15.2         No
Prejudice of Rights

     

    The failure of a
Party to insist on any one or more instances upon strict performance of any
provisions of this Agreement, or to take advantage of any of its rights
hereunder, may not be construed as a waiver of any such provisions or the
relinquishment of any such right or any other right hereunder, which will remain
in full force and effect.  No term or condition of this Agreement will
be deemed to have been waived and no breach excused unless such waiver or
consent to excuse is in writing and signed by the Party claimed to have waived
or consented to excuse.

     

    15.3         Assignment

     

    Parties may not
assign any of their rights or obligations under this Agreement without obtaining
(a) any necessary regulatory approval(s) and (b) the prior written consent of
the non-assigning Party, which consent will not be unreasonably withheld;
provided that the Companies agree that they will grant their consent to a
proposed assignment by a SSO Supplier if the proposed assignee meets all of the
Companies’ creditworthiness requirements then in effect under Article 6 of this
Agreement; and further provided that a SSO Supplier wishing to assign its
interests hereunder will not be obligated to obtain the consent of any other SSO
Supplier.  No assignment of this Agreement will relieve the assigning
Party of any of its obligations under this Agreement until such obligations have
been assumed by the assignee and all necessary consents have been
obtained.  Any assignment in violation of this Section 15.3 will be
void; provided, however, any of the Companies may assign any or all of its
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    this Agreement,
without the SSO Supplier’s consent, to any entity succeeding to all or
substantially all of the assets of the Company, if such assignee agrees, in
writing, to be bound by all of the terms and conditions hereof and all necessary
regulatory approvals are obtained.  SSO Supplier may, with prior
written notice to the Companies but without obtaining the approval of the
Companies, assign the accounts, revenues or proceeds under this Agreement to a
third party.  The Companies agree that following receipt of such
notice of the assignment of accounts, revenues or proceeds and such other
documentation that the assigning SSO Supplier may reasonably request that the
Companies will pay amounts becoming due to the assigning SSO Supplier under this
Agreement directly to the designated assignee; provided however, that nothing
herein shall enlarge or expand the rights of such designated assignee beyond the
rights granted to the SSO Supplier and the right of such designated assignee to
receive payments shall be subject to all defenses, offsets and claims of the
Companies arising under this Agreement.  The Companies further agrees
that, in the event necessary regulatory approvals to effectuate an assignment
have been sought in good faith but that action by the regulatory body is
pending, the Companies will accept the performance of the proposed assignee as a
Party to this Agreement, as co-obligor with the Party proposing to assign its
interest, until such approvals are obtained; provided that, in the event the
regulatory body declines to grant its approval (or, in the discretion of the
Companies, in the event the application seeking approval is still pending
without action by the regulatory  body after ninety (90) days), the
request for approval of the assignment will be deemed to have been
rejected.

     

     

    
      
        
        

      

      
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    15.4         Governing
Law and Venue

     

    To the extent not
subject to the jurisdiction of the FERC, questions including those concerning
the formation, validity, interpretation, execution, amendment, termination and
construction of this Agreement will be governed by the laws of the State of
Ohio, without regard to principles of conflicts of law.  Any lawsuit
arising in connection with this Agreement must be brought in the State or
Federal courts of Ohio.

     

    15.5         Headings

     

    The headings and
subheadings contained in this Agreement are used solely for convenience and do
not constitute a part of the Agreement between the Parties hereunto, nor should
they be used to aid in any manner in the construction of this
Agreement.

     

    15.6         Third
Party Beneficiaries

     

    This Agreement is
intended solely for the benefit of the Parties hereto including Customers for
whom the Companies are executing this Agreement as agent.  Nothing in
this Agreement may be construed to create any duty, or standard of care with
reference to, or any liability to, any person not a Party to this
Agreement.

     

    15.7         General
Miscellaneous Provisions

     

    (a)    This Agreement may
not be interpreted or construed to create an association, joint venture, or
partnership between the Parties (or any of them), or to impose any partnership
obligation or liability upon any Party.  The obligations of the SSO
Suppliers are expressly agreed to be several and not joint.  No Party
will have any right, power, or authority to enter into any agreement or
undertaking for, or on behalf of, or to act as or be an agent or representative
of, or to otherwise bind, the any other Party.

     

     

    
      
        
        

      

      
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    (b)    Cancellation,
expiration or Early Termination of this Agreement will not relieve the Parties
of obligations that by their nature survive such cancellation, expiration or
termination, including warranties, remedies, promises of indemnity and
confidentiality.

    (c)    Should any provision
of this Agreement be held invalid or unenforceable, such provision will be
invalid or unenforceable only to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable any other
provision hereof, unless it materially changes the agreement of the
Parties.

    (d)    Each of the Parties
acknowledges that it has read this Agreement, understands it, and agrees to be
bound by its terms.  This Agreement is intended by the Parties as a
final expression of their agreement.  The Parties further agree that
this Agreement is the complete and exclusive statement of agreement and
supersedes all proposals (oral or written), understandings, representations,
conditions, warranties, covenants and all other communications between the
Parties relating thereto.

     

    15.8         Taxes

     

    All present and
future federal, state, municipal or other taxes imposed by any taxing authority
by reason of the provision of SSO Supply by a SSO Supplier under this Agreement
will be the liability of the SSO Supplier, except for Ohio Sales and Use Taxes,
which will be the Companies’ responsibility.   Should a SSO
Supplier be required to remit any Ohio  Sales and Use Taxes directly
to the applicable taxing authority, other than taxes previously collected by the
SSO Supplier on behalf of the Companies, the Companies will defend and indemnify
the SSO Supplier for such Sales and Use Taxes and will pay to the SSO Supplier
all such tax amounts upon demand.  Each SSO Supplier 

     

     

    
      
        
        

      

      
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    shall pay all such
taxes to the applicable taxing authority to the extent required or permitted by
law.  If any transaction is exempt from the payment of any such taxes,
the affected SSO Supplier will, if requested, provide the Companies with valid
tax exemption certificates.  Should the Companies be required to remit
any such taxes directly to any applicable taxing authority, other than taxes
previously collected by the Companies directly from an SSO Supplier, the SSO
Supplier will defend and indemnify the Companies and will pay to the Companies
all such tax amounts upon demand.

    If new Federal or
Ohio taxes or Federal or Ohio government-mandated fees are imposed on wholesale
transactions covering Energy, Resource Adequacy Requirements, Firm Transmission
Service or Ancillary Services after the effective date, the Companies will
reimburse suppliers for such new taxes or fees provided the Companies recover
the cost of such new taxes or fees from the Companies’ customers.

     

    15.9         Use
of the Word "Including"

     

    The word
"including", when following any general statement or term, is not to be
construed as limiting the general statement or term to the specific items or
matters set forth or to similar items or matters, but rather as permitting the
general statement or term to refer to all other items or matters that could
reasonably fall within its broadest possible scope.

     

    15.10      
Federal Acquisition Regulation

     

    If any of the
following clauses prescribed by the Federal Acquisition Regulation (“FAR”), 48
Code of Federal Regulations Chapter 1 should be deemed to apply to this
Agreement, the SSO Supplier shall comply with the requirements of such
clause(s), and 

     

     

    
      
        
        

      

      
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    shall include the
terms or substance of such clause(s) in its subcontracts, as and to the extent
required by the FAR:

    (i)          
 Clean Air and Water:  §52.223-2;

    
      	
               
      

            	
              (ii)

            	
              Contract Work
      Hours and Safety Standards Act-Overtime
      Compensation:  §52.222-4

            

    

    (iii)          Equal
Opportunity:  §52.222-26;

    
      	
               
      

            	
              (iv)

            	
              Affirmative
      Action for and Employment Reports on Special Disabled and Vietnam Era
      Veterans:  §52.222-35 and
§52.222-37;

            

    

    (v)           Affirmative
Action for Handicapped Workers:  §52.222-36; and

    
      	
               
      

            	
              (vi)

            	
              Utilization of
      Small Business Concerns and Small Disadvantaged Business Concerns and
      Small Business and Small Disadvantaged Business Subcontracting
      Plan:  §52.219-8 and
§52-219-9.

            

    

    In case of a
conflict between the provisions of the FAR and the balance of this Agreement,
the requirements of the FAR will prevail.

     

    15.11       Binding
Terms

     

                   This
Agreement and the rates, terms and conditions herein will remain in effect for
the entire term hereof and each Party agrees not to seek any change to such
rates, terms and conditions pursuant to the Federal Power Act, if the Federal
Power Act is deemed to have jurisdiction to this Agreement, including on the
grounds that they are not just and reasonable.

     

    15.12      Confidentiality

     

    (a)           Each
Party shall hold in confidence and not release or disclose any document or
information furnished by the other Party in connection with this Agreement,

     

     

    
      
        
        

      

      
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    unless: (i)
compelled to disclose such document or information by judicial, regulatory or
administrative process or other provisions of law; (ii) such document or
information is generally available to the public; (iii) such document or
information was available to the receiving Party on a non-confidential basis; or
(iv) such document or information was available to the receiving Party on a
non-confidential basis from a third-party, provided that the receiving Party
does not know, and, by reasonable effort, could not know that such third-party
is prohibited from transmitting the document or information to the receiving
Party by a contractual, legal or fiduciary obligation.

    (b)           Notwithstanding
any other provision of this Section 15.13, a Party may disclose to its
employees, representatives and agents all documents and information furnished by
the other Party in connection with this Agreement, provided that such employees,
representatives and agents have been advised of the confidentiality provisions
of this Section 15.13, and further provided that in no event shall a document or
information be disclosed in violation of the standard of conduct requirements
established by FERC.

    (c)         
  Absolute protection from public disclosure of the bidders’ data and
information filed in this auction process cannot be provided.  By
participating in this auction process, each bidder acknowledges and agrees to
the confidentiality provisions set forth herein, as well as any limitations
thereto.  In addition, the bidder agrees the bidder's data and
information submitted in this auction process will be disclosed if required by
any federal, state or local agency (including, without limitation, the PUCO) or
by a court of competent jurisdiction.  However, the FirstEnergy Ohio
Utilities will endeavor to notify the bidder in advance of such
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    FirstEnergy Ohio
Utilities nor the Auction Manager, nor any of their employees or agents, will be
responsible to the bidders or any other party, or liable for any disclosure of
such designated materials before, during or subsequent to this
auction.  Notwithstanding the above, the FirstEnergy Ohio Utilities
and the Auction Manager reserve the right to use and communicate publicly and/or
to third parties any and all information/data submitted as part of this auction
process in any proceedings before FERC, the PUCO, and any other regulatory body
and the courts, if necessary, without the prior consent/approval of, or notice
to, any such bidder.

    (d)          
A Party receiving notice or otherwise concluding that any confidential document
or information furnished by the other Party in connection with this Agreement is
being sought under any provision of law, to the extent it is permitted to do so
under any applicable law, shall: (i) promptly notify the other Party; and (ii)
use reasonable efforts in cooperation with the other Party to seek confidential
treatment of such confidential information.

    (e)           The
Parties agree that monetary damages may be inadequate to compensate a Party for
the other Party’s breach of its obligations under this Section 15.13. Each Party
accordingly agrees that the other Party shall be entitled to equitable relief,
by way of injunction or otherwise, if the Party breaches or threatens to breach
its obligations under this Section 15.13, which equitable relief shall be
granted without bond or proof of damages, and the receiving Party shall not
plead in defense that there would be an adequate remedy at law.

     

     

    
      
        
        

      

      
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    15.13      
Amendment

     

    This Agreement, including the appendices
hereto, cannot be amended without the written agreement of all Parties and the
approval of the Commission prior to such amendment becoming
effective.

     

    15.14      
Counterparts

     

                   
This Agreement may be executed in counterparts, each of which will be considered
an original, but all of which will constitute one instrument.

     

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      IN WITNESS WHEREOF, the
Parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the date first set forth above.

       

      
        	
                ATTEST:

              	 
    	 
    
	 
    	 
    	 
    
	 
    	 
    	 
    
	 
    	 
    	
                By:

              	 
    
	
                Rhonda S.
      Ferguson

              	 
    	 
    	
                Steven E.
      Strah

              
	
                Vice
      President, Corporate Secretary

                Chief Ethics
      Officer FirstEnergy Service Co.

              	 
    	 
    	
                Regional
      President, Ohio Edison

              
	 
    	 
    	 
    
	 
    	 
    	
                By:

              	 
    
	 
    	 
    	 
    	
                Trent A.
      Smith

              
	 
    	 
    	 
    	
                Regional
      President, The Toledo

              
	 
    	 
    	 
    	
                Edison
      Company

              
	 
    	 
    	 
    
	 
    	 
    	 
    
	 
    	 
    	
                By:

              	 
    
	 
    	 
    	 
    	
                Dennis M.
      Chack

              
	 
    	 
    	 
    	
                Regional
      President, The Cleveland

              
	 
    	 
    	 
    	
                Electric
      Illuminating Company

              
	 
    	 
    	 
    
	 
    	 
    	 
    
	 
    	 
    	 
    
	
                ATTEST:

              	 
    	 
    
	 
    	 
    	 
    
	 
    	 
    	 
    
	 
    	 
    	
                By:

              	 
    
	 
    	 
    	 
    	
                Name:

              
	 
    	 
    	 
    	
                Title:

              

      

      

      

      

      

      [SUPPLIER SIGNATURES
APPEAR ON SUCCEEDING PAGES]

    

    

    
      
         

      

      
        75

        
          

        

      

      
         

      

    

    APPENDIX
A TO MASTER SSO SUPPLY AGREEMENT

    DATED _________,
2009,

    BY AND
BETWEEN  THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, 

    THE TOLEDO EDISON
COMPANY AND OHIO EDISON COMPANY

     AND THE SSO
SUPPLIERS

    

    

     

                                                        Notice

     

    

    

    

    SSO
Supplier                                                                                   Price                                              SSO
Supplier

                                                                              Responsibility Share

    

    

    ___________________________________                                                                          ______/MWh                                      
      _____________

    

    Address for
Notice

    

    

    The
address for any notice to _______________ provided pursuant to Sections 6.8 and
15.1 of the SSO Master SSO Supply Agreement shall be the following:

    

    For
Credit Related Issues, Section 6.8:

    

     

    Name

    Address

    Telephone

    Fax

    e-mail

    

    For
Notices, Section 15.1:

    

    Name

    Address

    Telephone

    Fax

    e-mail

    

    

    

    
      
         

      

      
        76

        
          

        

      

      
         

      

    

    APPENDIX
B TO MASTER SSO SUPPLY AGREEMENT

    DATED __________ ,
2009

    BY AND BETWEEN THE
CLEVELAND ELECTRIC ILLUMINATING COMPANY, 

    THE TOLEDO EDISON
COMPANY AND OHIO EDISON COMPANY 

    AND THE SSO
SUPPLIERS

    

     

    

     

    Seasonal
Billing Factor

     

    

    The
Seasonal Billing Factors are as follows:

     

    

    

    
      
        
          
            
              
                
                  	
                          June 1 through
      August 31

                           

                        	
                          1.1180

                        
	
                          September 1
      through December 31  and 

                          January 1
      through May 31

                           

                        	
                          0.9581

                        

                

              

            

          

        

      

    

    

    

    

    
      
         

      

      
        77

        
          

        

      

      
         

      

    

    APPENDIX
C TO MASTER SSO SUPPLY AGREEMENT

    DATED __________ ,
2009

    BY AND BETWEEN THE
CLEVELAND ELECTRIC ILLUMINATING COMPANY, 

    THE TOLEDO EDISON
COMPANY AND OHIO EDISON COMPANY

    AND THE SSO
SUPPLIERS

    

    

     

    Schedule
for ICRT

     

    Column (A) will be
used to correspond to the term time period specified in Article 4.1 of the
Master SSO Supply Agreement.

    

    
      
        
          	 
    	
                  (A)

                
	
                  MONTH

                	
                   ($/tranche)

                
	
                  June
      2009

                	
                  1,500,000

                
	
                  July
      2009

                	
                  1,500,000

                
	
                  August
      2009

                	
                  1,500,000

                
	
                  September
      2009

                	
                  1,500,000

                
	
                  October
      2009

                	
                  1,200,000

                
	
                  November
      2009

                	
                  1,200,000

                
	
                  December
      2009

                	
                  1,200,000

                
	
                  January
      2010

                	
                  1,200,000

                
	
                  February
      2010

                	
                  800,000

                
	
                  March
      2010

                	
                  800,000

                
	
                  April
      2010

                	
                  800,000

                
	
                  May,
      2010

                	
                  800,000

                
	
                  June,
      2010

                	
                  600,000

                
	
                  July,
      2010

                	
                  600,000

                
	
                  August,
      2010

                	
                  600,000

                
	
                  September,
      2010

                	
                  600,000

                
	
                  October,
      2010

                	
                  400,000

                
	
                  November
      2010

                	
                  400,000

                
	
                  December,
      2010

                	
                  400,000

                
	
                  January,
      2011

                	
                  400,000

                
	
                  February
      2011

                	
                  200,000

                
	
                  March
      2011

                	
                  200,000

                
	
                  April
      2011

                	
                  200,000

                
	
                  May,
      2011

                	
                  200,000

                

        

      

    

    

    

    

    
      
         

      

      
        78

        
          

        

      

      
         

      

    

    

     

    APPENDIX C TO MASTER SSO
SUPPLY AGREEMENT

    DATED__________
, 2009

    BY AND BETWEEN THE
CLEVELAND ELECTRIC ILLUMINATING COMPANY, 

    THE TOLEDO EDISON
COMPANY AND OHIO EDISON COMPANY

    AND THE SSO
SUPPLIERS

    

    MtM
Exposure Amount Calculation Information

     

    Table
1  contains the illustrative marks for a twelve month period of the
Agreement.  Monthly marks (example only, to be updated in May 2009)
are provided for June 2009 through May 2010. For each month, two-month blocks or
quarterly blocks where a publicly-available market quotes are available, a
market quote will be used for those months. For any month that a market quote is
not available, the Companies will use a proprietary method that reflects forward
market conditions.

    The mark for each
Billing Month is the mark that is calculated on the date that the Solicitation
closes and will not change over the life of the contract. After the close of the
competitive bidding process Forward Market Prices will change.  In
addition, the on-peak and off-peak loads used to calculate the MtM Exposure
Amount will be adjusted monthly to reflect the most current
changes.

     

     

    
      
        
        

      

      
        79

        
          

        

      

      
        
        

      

    

     

    Forward Market
Prices for the months, two-month blocks or quarterly blocks where a market quote
is available will be equal to the market quote. In case a quote for a component
of a block and for the block is both available, the Companies reserve the right
not to use both the component of a block and the block if they are inconsistent
with each other.  However, when this inconsistency occurs, the
Companies must use either the market quote for the component or the market quote
for the block. Forward Market Prices for each month, two-month blocks, or
quarterly blocks where a market quote is unavailable will be equal to the last
available market quote for that time period or in case they have not been quoted
since the Solicitation closed, they will be equal to the marks set at the close
of the Solicitation.

    

    MtM
Calculation Example

    

    Parameters

    

    On
the closing day of the Solicitation, the following parameters are
set

    

    
      	
              1.  

            	
              The expected
      On-Peak Load per tranche.

            

    

    

    
      	
              2.  

            	
              The expected
      Off-Peak Load per tranche.

            

    

    

    
      	
              3.  

            	
              A table of
      monthly on-peak forward prices (to be used as the “mark” or inception
      price for each month of the supply
period).

            

    

    

    
      	
              4.  

            	
              A table of
      monthly on-and off-peak energy prices to determine the ratio of off-peak
      price to on-peak prices.

            

    

    

    Indicative on-peak
and off-peak loads per tranche will be made available 14 days prior to the
Solicitation.

    

    
      
         

      

      
        80

        
          

        

      

      
         

      

    

     

    

     

    MARK-TO-MARKET
EXAMPLE

     

    All
Energy prices are based on Cinergy Hub

     

     

    

    Table
1 - Initial Market Price Data

    Market
Quotes Prior to Solicitation Closing Day

    

    

    
      
        
          	
                  Month

                	
                  Jun-09

                	
                  Jul-09

                	
                  Aug-09

                	
                  Sep-09

                	
                  Oct-09

                	
                  Nov-09

                
	
                  On-Peak

                	
                  $46.39

                	
                  $56.39

                	
                  $56.39

                	
                  $44.56

                	
                  $40.90

                	
                  $44.03

                

        

      

    

    

    
      
        
          	
                  Month

                	
                  Dec-09

                	
                  Jan-10

                	
                  Feb-10

                	
                  Mar-10

                	
                  Apr-10

                	
                  May-10

                
	
                  On-Peak

                	
                  $43.11

                	
                  $53.11

                	
                  $51.69

                	
                  $50.40

                	
                  $50.40

                	
                  $48.43

                

        

      

    

    

    

    

    

    Table
2 - Off-peak Price Factors

    Pre-determined
Ratio of Off-Peak to On-Peak Price

    

    

    
      
        
          	
                  Month

                	
                  Ratio
      of Off-Peak to On-Peak Price

                
	
                  January

                	
                  0.66

                
	
                  February

                	
                  0.66

                
	
                  March

                	
                  0.66

                
	
                  April

                	
                  0.59

                
	
                  May

                	
                  0.45

                
	
                  June

                	
                  0.46

                
	
                  July

                	
                  0.45

                
	
                  August

                	
                  0.49

                
	
                  September

                	
                  0.55

                
	
                  October

                	
                  0.65

                
	
                  November

                	
                  0.59

                
	
                  December

                	
                  0.66

                

        

      

    

     

    

     

    
      
         

      

      
        81

        
          

        

      

      
         

      

    

    Table
3 – Closing Day Marks

    Marks
Set on the Closing Day of the Solicitation

    Energy
(MWh/tranche)

    

    Prices for June 2009
through May 2011  so as to correspond to the Delivery
Period

    

    
      
        
          	 
    	
                  On-Peak
      Volume

                	
                  Off-Peak
      Volume

                	
                  On-Peak
      Price

                	
                  Off-Peak
      Price

                
	
                  Jun-09

                	
                  25,735

                	
                  23,155

                	
                   $
      46.39

                	
                  $21.34

                
	
                  Jul-09

                	
                  31,768

                	
                  22,281

                	
                   $
      56.39

                	
                  $25.38

                
	
                  Aug-09

                	
                  23,577

                	
                  26,691

                	
                   $
      56.39

                	
                  $27.63

                
	
                  Sep-09

                	
                  24,723

                	
                  20,579

                	
                   $
      44.56

                	
                  $24.51

                
	
                  Oct-09

                	
                  23,968

                	
                  19,890

                	
                   $
      40.90

                	
                  $26.59

                
	
                  Nov-09

                	
                  20,637

                	
                  22,806

                	
                   $44.03

                	
                  $25.98

                
	
                  Dec-09

                	
                  27,935

                	
                  21,333

                	
                   $
      43.11

                	
                  $28.45

                
	
                  Jan-10

                	
                  25,510

                	
                  25,737

                	
                   $
      53.11

                	
                  $35.05

                
	
                  Feb-10

                	
                  25,971

                	
                  23,056

                	
                   $
      51.69

                	
                  $34.12

                
	
                  Mar-10

                	
                  24,097

                	
                  24,880

                	
                   $
      50.40

                	
                  $33.26

                
	
                  Apr-10

                	
                  25,576

                	
                  18,448

                	
                   $
      50.40

                	
                  $29.74

                
	
                  May-10

                	
                  19,875

                	
                  23,210

                	
                   $
      48.43

                	
                  $21.79

                
	
                  Jun-10

                	
                  25,735

                	
                  23,155

                	
                   $
      54.11

                	
                  $24.89

                
	
                  Jul-10

                	
                  31,768

                	
                  22,281

                	
                   $
      65.11

                	
                  $29.30

                
	
                  Aug-10

                	
                  23,577

                	
                  26,691

                	
                   $
      65.11

                	
                  $31.90

                
	
                  Sep-10

                	
                  24,723

                	
                  20,579

                	
                   $
      51.40

                	
                  $28.27

                
	
                  Oct-10

                	
                  23,968

                	
                  19,890

                	
                   $
      45.40

                	
                  $29.51

                
	
                  Nov-10

                	
                  20,637

                	
                  22,806

                	
                   $
      44.43

                	
                  $26.21

                
	
                  Dec-10

                	
                  27,935

                	
                  21,333

                	
                   $
      44.43

                	
                  $29.32

                
	
                  Jan-11

                	
                  25,510

                	
                  25,737

                	
                   $
      64.13

                	
                  $42.33

                
	
                  Feb-11

                	
                  25,971

                	
                  23,056

                	
                   $
      64.13

                	
                  $42.33

                
	
                  Mar-11

                	
                  24,097

                	
                  24,880

                	
                   $
      52.57

                	
                  $34.70

                
	
                  Apr-11

                	
                  25,576

                	
                  18,448

                	
                   $
      52.57

                	
                  $31.02

                
	
                  May-11

                	
                  19,875

                	
                  23,210

                	
                   $
      51.65

                	
                  $23.24

                

        

      

    

    

    

    Table 4 – Market Prices on Day 1 of the
Delivery Period

    Market
Quotes on Day 1 of the Delivery Period

    

    
      
        
          	
                  Month

                	
                  Jun-09

                	
                  Jul-09

                	
                  Aug-09

                	
                  Sep-09

                	
                  Oct-09

                	
                  Nov-09

                
	
                  On-Peak

                	
                  $46.39

                	
                  $57.39

                	
                  $56.39

                	
                  $46.56

                	
                  $40.90

                	
                  $45.03

                

        

      

    

    

    
      
        
          	
                  Month

                	
                  Dec-09

                	
                  Jan-10

                	
                  Feb-10

                	
                  Mar-10

                	
                  Apr-10

                	
                  May-10

                
	
                  On-Peak

                	
                  $44.11

                	
                  $53.11

                	
                  $51.69

                	
                  $50.40

                	
                  $50.40

                	
                  $48.43

                

        

      

    

    

    
      
         

      

      
        82

        
          

        

      

      
         

      

    

    Table
5 – MtM on Day 1

     

    Mark-to-Market
set on Day 1 of the Delivery Period

    Energy
(MWh/tranche)

     

    Data for June 2009
through May 2011 so as to correspond to the Delivery Period

    

    
      
        
          
            
              	 
    	
                      On-Peak
      

                      Load per
      Tranche (MWh)

                    	
                      Off-Peak
      

                      Load per
      Tranche (MWh)

                    	
                      Mark for
      

                      On-Peak
      

                      Prices

                    	
                      Current
      

                      Day 1
      On-

                      Peak
      

                      Prices

                    	
                      Change in
      

                      On-Peak
      

                      Price

                    	
                      Change in
      

                      Off-Peak
      

                      Price

                    	
                      MtM

                    
	
                      Jun-09

                    	
                      25,735

                    	
                      23,155

                    	
                       $
      46.39

                    	
                      $46.39

                    	
                      $-

                    	
                      $-

                    	
                      $-

                    
	
                      Jul-09

                    	
                      31,768

                    	
                      22,281

                    	
                       $
      56.39

                    	
                      $57.39

                    	
                      $1.00

                    	
                      $0.45

                    	
                      $41,794

                    
	
                      Aug-09

                    	
                      23,577

                    	
                      26,691

                    	
                       $
      56.39

                    	
                      $56.39

                    	
                      $-

                    	
                      $-

                    	 
    
	
                      Sep-09

                    	
                      24,723

                    	
                      20,579

                    	
                       $
      44.56

                    	
                      $46.56

                    	
                      $2.00

                    	
                      $1.10

                    	
                      $
      72,081

                    
	
                      Oct-09

                    	
                      23,968

                    	
                      19,890

                    	
                       $
      40.90

                    	
                      $40.90

                    	
                      $-

                    	
                      $-

                    	 
    
	
                      Nov-09

                    	
                      20,637

                    	
                      22,806

                    	
                       $44.03

                    	
                      $45.03

                    	
                      $1.00

                    	
                      $0.59

                    	
                      $
      34,093

                    
	
                      Dec-09

                    	
                      27,935

                    	
                      21,333

                    	
                       $
      43.11

                    	
                      $44.11

                    	
                      $-

                    	
                      $-

                    	 
    
	
                      Jan-10

                    	
                      25,510

                    	
                      25,737

                    	
                       $
      53.11

                    	
                      $53.11

                    	
                      $-

                    	
                      $-

                    	 
    
	
                      Feb-10

                    	
                      25,971

                    	
                      23,056

                    	
                       $
      51.69

                    	
                      $51.69

                    	
                      $-

                    	
                      $-

                    	 
    
	
                      Mar-10

                    	
                      24,097

                    	
                      24,880

                    	
                       $
      50.40

                    	
                      $50.40

                    	
                      $-

                    	
                      $-

                    	 
    
	
                      Apr-10

                    	
                      25,576

                    	
                      18,448

                    	
                       $
      50.40

                    	
                      $50.40

                    	
                      $-

                    	
                      $-

                    	 
    
	
                      May-10

                    	
                      19,875

                    	
                      23,210

                    	
                       $
      48.43

                    	
                      $48.43

                    	
                      $-

                    	
                      $-

                    	 
    
	
                      Jun-10

                    	
                      25,735

                    	
                      23,155

                    	
                       $
      54.11

                    	
                      $54.11

                    	
                      $-

                    	
                      $-

                    	 
    
	
                      Jul-10

                    	
                      31,768

                    	
                      22,281

                    	
                       $
      65.11

                    	
                      $65.11

                    	
                      $-

                    	
                      $-

                    	 
    
	
                      Aug-10

                    	
                      23,577

                    	
                      26,691

                    	
                       $
      65.11

                    	
                      $65.11

                    	
                      $-

                    	
                      $-

                    	 
    
	
                      Sep-10

                    	
                      24,723

                    	
                      20,579

                    	
                       $
      51.40

                    	
                      $51.40

                    	
                      $-

                    	
                      $-

                    	 
    
	
                      Oct-10

                    	
                      23,968

                    	
                      19,890

                    	
                       $
      45.40

                    	
                      $45.40

                    	
                      $-

                    	
                      $-

                    	 
    
	
                      Nov-10

                    	
                      20,637

                    	
                      22,806

                    	
                       $
      44.43

                    	
                      $44.43

                    	
                      $-

                    	
                      $-

                    	 
    
	
                      Dec-10

                    	
                      27,935

                    	
                      21,333

                    	
                       $
      44.43

                    	
                      $44.43

                    	
                      $-

                    	
                      $-

                    	 
    
	
                      Jan-11

                    	
                      25,510

                    	
                      25,737

                    	
                       $
      64.13

                    	
                      $64.13

                    	
                      $-

                    	
                      $-

                    	 
    
	
                      Feb-11

                    	
                      25,971

                    	
                      23,056

                    	
                       $
      64.13

                    	
                      $64.13

                    	
                      $-

                    	
                      $-

                    	 
    
	
                      Mar-11

                    	
                      24,097

                    	
                      24,880

                    	
                       $
      52.57

                    	
                      $52.57

                    	
                      $-

                    	
                      $-

                    	 
    
	
                      Apr-11

                    	
                      25,576

                    	
                      18,448

                    	
                       $
      52.57

                    	
                      $52.57

                    	
                      $-

                    	
                      $-

                    	 
    
	
                      May-11

                    	
                      19,875

                    	
                      23,210

                    	
                       $
      51.65

                    	
                      $51.65

                    	
                      $-

                    	
                      $-

                    	 
    
	 
    	 
    	 
    	 
    	 
    	 
    	
                      Total

                    	
                      $
  147,968

                    

            

          

        

      

    

    
      
         

      

      
        83

        
          

        

      

      
         

      

    

    APPENDIX
D TO MASTER SSO SUPPLY AGREEMENT

    DATED __________,
2009

    BY AND BETWEEN THE
CLEVELAND ELECTRIC ILLUMINATING COMPANY, 

    THE TOLEDO EDISON
COMPANY AND OHIO EDISON COMPANY

    AND THE SSO
SUPPLIERS

    

    

     

    Sample
SSO Letter of Credit

     

    

    

    ___________________________
(Date)

    

    Letter of Credit No.
_______________

    

    
      	
              To:

            	
              The Cleveland
      Electric Illuminating Company, The Toledo Edison Company and Ohio Edison
      Company (“Beneficiaries”)

            

    

    

    
      1.      We
hereby establish in your favor this irrevocable transferable Letter of Credit
(this “ Letter of Credit ”) for the account of
_______________________(the “Applicant”), in the aggregate amount of
$________________, effective immediately and available to you at sight upon
demand at our counters at _____________ and expiring 364 days from date of
issuance or any extension thereof (in the form of Annex 5), unless terminated
earlier or automatically extended, in accordance with the provisions hereof or
otherwise extended.

       

      2.      This Letter of
Credit is issued at the request of the Applicant, and we hereby irrevocably
authorize you to draw on us, in accordance with the terms and conditions hereof,
up to the maximum amount of this Letter of Credit, subject to reduction as
provided in paragraph 12 hereof.  This Letter of Credit may be drawn upon
an Event of Default under the SSO Master Supply Wholesale  Agreement(s)
between the Applicant and you, dated _________ .

       

     

    
      
        
        

      

      
        84

        
          

        

      

      
        
        

      

    

     

    
      3.  A partial or full drawing hereunder may be made by you on any
Business Day on or prior to the expiration of this Letter of Credit by
delivering, by no later than 11:00 A.M. (New York, NY time1) on such Business Day to                      
                             
 (Bank),
                                                                      
 (address), (i) a notice executed by you in the form of Annex 1 hereto,
appropriately completed and duly signed by an Authorized Officer of each of the
Beneficiaries and (ii) your draft in the form of Annex 2 hereto, appropriately
completed and duly signed by an Authorized Officer of each of the Beneficiaries.
Authorized Officer shall mean President, Treasurer, any Vice President or any
Assistant Treasurer.  

       

      4.      We may, but shall
not be obligated to, accept any request to issue a substitute Letter of
Credit.  Such request shall be in an Availability Certificate in the form
of Annex 3 hereto by you to us for exchange for a new Letter of Credit in the
amount set forth in an Availability Certificate, which amount shall not exceed
the present value of this letter of credit.  Upon acceptance by us of any
such request to issue a substitute Letter of Credit for exchange, the new Letter
of Credit shall be issued in the amount as set forth in the Availability
Certificate.

       

      
        5.      We
hereby agree to honor a drawing hereunder made in compliance with the terms and
provisions of this Letter of Credit by transferring in immediately available
funds the amount specified in the draft delivered to us in connection with such
drawing to such account at such bank in the United States as you may specify in
your draft delivered to us pursuant to Paragraph 3 hereof, by 3:00 P.M. (New
York, NY time) on the date of such drawing, if delivery of this requisite
document is made prior to 

         

      

       

      
        

      

      
        1 If the issuer of the Letter of Credit is
located in an area that is not in the Eastern time zone, this time and all other
times in this Letter of Credit, and the definition of a business day should be
adjusted accordingly

         

      

    

     

     

    
      
        
        

      

      
        85

        
          

        

      

      
        
        

      

    

     

    
       

           11:00 AM
(New York, NY time) on a business day pursuant to Paragraph 3 herein above, but
at the opening of business on the first Business Day next succeeding the date of
such drawing if delivery of the requisite document is made on or after 11:00 AM
(New York, NY time) on any Business Day pursuant to Paragraph 3 herein
above.

       

      6.      If a
demand for payment made by you hereunder does not, in any instance, conform to
the terms and conditions of this Letter of Credit, we shall give you prompt
notice (not exceeding three (3) Business Days following the date of receipt of
the documents) that the demand for payment was not effected in accordance with
the terms and conditions of this Letter of Credit, stating the reasons therefore
and that we will upon your instructions hold any documents at your disposal or
return the same to you.  Upon being notified that the demand for payment
was not effected in conformity with this Letter of Credit, you may attempt to
correct any such non-conforming demand for payment to the extent that you are
entitled to do so, provided, however, in such event a conforming demand for
payment must be timely made in accordance with the terms of this Letter of
Credit.

       

      7.      This Letter of
Credit will automatically terminate and be delivered to us for cancellation on
the earliest of (i) the making by you of the drawings in an amount equal to the
maximum amount available to be made hereunder, (ii) the date we issue a new
letter of credit in exchange for this Letter of Credit in accordance with
paragraph 4 herein above, (iii) the date we receive from you a Certificate of
Expiration in the form of Annex 4 hereto, or (iv) will be automatically extended
without written amendment for successive additional one (1) year periods from
the current or any 

       

       

       

       

       

      
        
          
          

        

        
          86

          
            

          

        

        
          
          

        

      

    
             future extended expiry date, unless at least ninety (90) days prior to
such date of expiration, we give written notice to Beneficiaries by registered
or certified mail, return receipt requested, or by overnight courier, at the
address set forth above, or at such other address of which prior written notice
has been provided to us, that we elect not to renew this irrevocable standby
Letter of Credit for such additional one (1) year period.

       

    

    
      8.      As
used herein:

       

            " Availability Certificate ” shall mean a certificate
substantially in the form of Annex 3 hereto, appropriately completed and duly
signed by your 

            authorized
officer.

       

      “ Business
Day ” shall mean any day on which commercial banks are not authorized or
required to close in New York, New York and any day on which payments can be
effected on the Fed wire system.

       

      9.      This Letter of
Credit is assignable and transferable, in accordance with Annex 6, to an entity
who you certify to us in the form of Annex 6, and we hereby consent to such
assignment or transfer, provided that this Letter of Credit may not otherwise be
amended or modified without consent from us, you and the Applicant, and except
as otherwise expressly stated herein, is subject to the Uniform Customs and
Practice for Documentary Credits – 2007 Revision, ICC Publication No. 600, or
any successor publication thereto (the “ UCP ”). 
Any and all transfer fees, expenses and costs shall be borne by the
Applicant.  This Letter of Credit shall, as to matters not governed by the
UCP, be governed and construed in accordance with New York law, without regard
to principles of conflicts of law.  Transfers fees shall be borne by the
Applicant.

       

       

       

      
        
          
          

        

        
          87

          
            

          

        

        
          
          

        

      

    

     

    
      10.  This Letter of Credit sets forth in full
our undertaking, and such undertaking shall not in any way be modified, amended,
changed, amplified or limited by reference to any document, instrument or
agreement referred to herein, except for Annexes 1 through 6 hereto and the
notices referred to herein; and any such reference shall not be deemed to
incorporate herein by reference any
document, instrument or agreement except as set forth above.

       

      11.  We certify that as of
___________________________(date) we ______________ (“Bank”) satisfy the senior
unsecured debt rating of “A” from Standard & Poor’s Rating Service.

       

      12.  The amount which may
be drawn by you under this Letter of Credit shall be automatically reduced by
the amount of any drawings paid through us referencing this Letter of Credit No.
_____.    Partial drawings are permitted hereunder.

       

      13.  Faxed document(s) are
acceptable. Presentation by fax must be made to fax number ____________________
confirmed by telephone to _______________.

       

      14.  In the event of act of
God, riot, civil commotion, insurrection, war, terrorism or by any strikes or
lock outs, or any cause beyond our control, that interrupts our business, and
causes the place for presentation of this letter of credit to be closed for
business on the last day of presentation, the expiration date of this letter of
credit shall be automatically extended without amendment to a date thirty (30)
calendar days after the place for presentation reopens for business.

       

      15.  This original letter
of credit has been sent to the Company located at ________________ above (as per
Applicant’s instructions).  The aggregate amount paid to the Company during
the validity of this Letter of Credit will not exceed the 

       

       

       

      
        
          
          

        

        
          88

          
            

          

        

        
          
          

        

      

       

       

            amount of this Letter of Credit.  Any
demands or communications in the form of the attached Annexes (except for Annex
5) or other communications directed to us under this Letter of Credit must be
signed by an Authorized Officer of the EDC.  Acceptance or rejection of any
amendments to this Letter of Credit or any extensions pursuant to Annex 5 must
be signed by an Authorized Officer of each of the Beneficiaries.

       

    

     

     

                                                                                                Very truly
yours,

                                                                                                 (Bank)

                                                                                                 __________________________________

                                                                                                By:_______________________________

                                                                                                     Name:

                                                                                                    Title:

    

                                                                                                By:_______________________________

                                                                                                    Name:

                                                                                                Title:

    

      

    

      
      1 If the
issuer of the Letter of Credit is located in an area that is not in the Eastern
time zone, this time and all other times in this Letter of Credit, and the
definition of a business day should be adjusted
accordingly

    

    
      
         

      

      
        89

        
          

        

      

      
         

      

    

     

    Annex
1 to Letter of Credit

     

    DRAWING UNDER LETTER
OF CREDIT NO. ________

    

    _______________,
20__

    

    To:       
(Bank)

                
 (Address)

    

                 
Attention:  Standby Letter of Credit Unit

    

    Ladies and
Gentlemen:

    

          The
undersigned is making a drawing under the above-referenced Letter of Credit in
the amount specified below and hereby certifies to you as follows:

    

    1.           Capitalized
terms used herein that are defined herein shall have the meanings ascribed
thereto in the Letter of Credit.

    

    2.           "Pursuant
to Paragraph 2 of the Letter of Credit No._____________, dated____________,
20__, the undersigned is entitled to make a drawing under the Letter of Credit
in the aggregate amount of $__________, inasmuch as there is an Event of Default
under any SSO Master Supply Wholesale  Agreement between the Applicant
and us.

    

    3.           The
amount to be received by The Cleveland Electric Illuminating Company is
$___________, the amount to be received by The Toledo Edison Company is
$________ and the amount to be received by The Ohio Edison Company is
$____________ , for total equal to the aggregate amount in the previous
paragraph.

    

    4.           We
acknowledge that, upon your honoring the drawing herein requested, the amount of
the Letter of Credit available for drawing shall be automatically decreased by
an amount equal to this drawing.

                                                                    Very
truly yours,

    

    The
Cleveland Electric Illuminating
Company                                                                                                  
The Toledo Edison Company

    By:
__________________________________                                                                                                By:__________________________

    Name:                                                                                                                 Name:

    Title:                                                                                                                 Title:

    Date:                                                                                                                            Date:

    

    Ohio Edison
Company

    By:
________________________________

    Name:

    Title:

    Date:

    
      
         

      

      
        90

        
          

        

      

      
         

      

    

     

    Annex
2 to Letter of Credit

     

    DRAWING UNDER LETTER
OF CREDIT NO. ________

    

    ______________,
20__

    

    

    ON [Business Day
immediately succeeding

               date
of presentation]

    

    PAY
TO:                           The
Cleveland Electric Illuminating Company

    

    $
_________________________________

    

    For
credit to the account of _________________________.

    

    PAY
TO:                           The
Toledo Edison Company

    

    $
_________________________________

    

    For
credit to the account of _________________________.

    

    PAY
TO:                           Ohio
Edison Company

    

    $
_________________________________

    

    For
credit to the account of _________________________.

    

    FOR
VALUE RECEIVED AND CHARGE TO ACCOUNT OF LETTER OF CREDIT NO. ____________
OF

    

    (Bank)

    (Address)

    

    The
Cleveland Electric Illuminating
Company                                                                                                  
The Toledo Edison Company

    By:
__________________________________                                                                                                By:__________________________

    Name:                                                                                                                 Name:

    Title:                                                                                                                Title:

    Date:                                                                                                                          
Date:

    

    Ohio Edison
Company

    By:
_______________________________

    Name:

    Title:

    Date:

    
      
         

      

      
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    Annex
3 to Letter of Credit

     

    AVAILABILITY
CERTIFICATE

    UNDER LETTER OF
CREDIT NO. ________

    

    _______________,
20__

    To:           (Bank)

                    
(Address)

    

               
    Attention:  Standby Letter of Credit
Unit

    

    Ladies and
Gentlemen:

    

          Each
of the undersigned hereby requests that, in exchange for the above-referenced
Letter of Credit, a new Letter of Credit be issued in the aggregate amount of
$_________ (the “New
Amount”) and to expire on __________________(date), but otherwise in the
form of this Letter of Credit.

    

          Please
acknowledge your intention to issue such new Letter of Credit in the New Amount
upon the surrender of the above-referenced Letter of Credit by signing the
attached acknowledgment copy hereof and forwarding it to:

    

    Beneficiaries

                                          
 Addresses

    

                                                                    Very
truly yours,

    

    

    The
Cleveland Electric Illuminating
Company                                                                                                 
 The Toledo Edison Company

    By:
__________________________________                                                                                                By:__________________________

    Name:                                                                                                                 Name:

    Title:                                                                                                                        
   Title:

    Date:                                                                                                                                  
 Date:

    

    Ohio Edison
Company

    By:
_____________________________

    Name:

    Title:

    Date:

    

                                                                                         APPLICANT NAME

    

                                                                                       
 By:                                                               

                                               
 Name:

                                                                                         Title:

                                                                                       
 Date:

     

     

    
      
        
        

      

      
        92

        
          

        

      

      
        
        

      

    

     

     

    Agreed and
Accepted:

    (Bank)

    

    By
______________________

    Name:

    Title:

    Date:

    

    

    
      
         

      

      
        93

        
          

        

      

      
         

      

    

     

    Annex
4 to Letter of Credit

     

    CERTIFICATE OF
EXPIRATION

    OF LETTER OF CREDIT
NO. ________

    

    _______________,
20__

    

    To:     (Bank)

               (Address)

    

               Attention:  Standby
Letter of Credit Unit

    

    Ladies and
Gentlemen:

    

          The
undersigned hereby certifies to you that the above referenced Letter of Credit
may be cancelled without payment.  Attached hereto is said Letter of
Credit, marked cancelled.

    

    

    The
Cleveland Electric Illuminating
Company                                                                                              
  The Toledo Edison Company

    By:
_________________________________                                                                                                By:__________________________

    Name:                                                                                                                      
Name:

    Title:                                                                                                                         
Title:

    Date:                                                                                                                                 Date:

    

    Ohio Edison
Company

    By:
_____________________________

    Name:

    Title:

    Date:

    

    

    

    

    cc:         ___________________________
(Applicant Name)

    

    
      
         

      

      
        94

        
          

        

      

      
         

      

    

     

    Annex
5 to Letter of Credit

     

    NOTICE OF
EXTENSION

    OF LETTER OF CREDIT
NO._________________

    

    ____________,
20__

    

    To
         The Cleveland Electric
Illuminating Company, The Toledo Edison Company and Ohio Edison
Company:

    

    Re: Our Letter of
Credit no. ______________________ presently in the aggregate amount of
USD________________ issued for the account of _______________________ and
expiring on ____________________.

    

    On the expiration
date of the Letter of Credit no. _______________, we will issue a new Letter of
Credit No. ____________ to expire on __________________(date). This new Letter
of Credit No. _________________will, aside from the expiration date be in the
amount and form of our Letter of Credit No. __________________.

    

    Very truly
yours,

    

           BANK_______________________________

    

                                                                            By  _______________________________

                                                                                          Name:

    

                                                                            Title:

                                                                            Date:

    

    

    

    cc:         ___________________________
(Applicant Name)

    
      
         

      

      
        95

        
          

        

      

      
         

      

    

     

    Annex
6 to Letter of Credit

     

    NOTICE OF
TRANSFER

    OF LETTER OF CREDIT
NO._________________

    

    ____________,
20__

    To:

    Bank

    Bank
Address

    

    To Whom It May
Concern:

    Re:
Credit_______________________

    Issued by
_______________________

    Advice
No_______________________

    

    For the value
received, the undersigned beneficiary hereby irrevocably transfers
to:

    

    ________________________________

    (Name of
Transferee)

    

    _______________________________

    (Address)

    

    all rights of the
undersigned beneficiary to draw under the above Letter of Credit in its
entirety.

    

    By this transfer,
all rights of the undersigned beneficiary in such Letter of Credit are
transferred to the transferee and the transferee shall have the sole rights as
beneficiary thereof, including sole rights relating to any amendments whether
increases or extensions or other amendments and whether now existing or
hereafter made.  All amendments are to be advised direct to the
transferee without necessity of any consent of or notice to the undersigned
beneficiary.

    

    The advice of such
Letter of Credit is returned herewith, and we ask you to endorse the transfer on
the reverse thereof, and forward it direct to the transferee with your customary
notice of transfer.

    

    Enclosed is a
certified check in the amount of $_______ in payment of your transfer commission
and in addition we agree to pay to you on demand any expenses that may be
incurred by you in conjunction with this transfer.

    

    Very Truly
Yours

    

    _____________________________________

    (signature of the
Company)

    

     

     

    
      
        
        

      

      
        96

        
          

        

      

      
        
        

      

    

    
 

    The above signature
with title as stated conforms to that on file with us and is authorized for the
execution of said instruments.

    

    

    

    (Name of
authenticating party)

    

    _____________________________________

    (Authorized
signature of authenticating party)

    Name

    Title

    
      
         

      

      
        97

        
          

        

      

      
         

      

    

    APPENDIX
E TO MASTER SSO SUPPLY AGREEMENT

    DATED ____________,
2009

    BY AND BETWEEN THE
CLEVELAND ELECTRIC ILLUMINATING COMPANY, 

    THE TOLEDO EDISON
COMPANY AND OHIO EDISON COMPANY

    AND THE SSO
SUPPLIERS

    

    

     

    Guaranty

     

    

    

    GUARANTY (this
“Guaranty”), dated as of ____________________, made by _________________ (the
“Guarantor”), a corporation organized and existing under the laws of
_________________ in favor of The Cleveland Electric Illuminating Company, The
Toledo Edison Company and Ohio Edison Company (the “Guaranteed Parties”),
corporations organized and existing under the laws of the State of
Ohio.

    

    Terms not defined
herein take on the meaning given to them in the SSO Master Supply
Wholesale  Agreement(s) dated ______.  Guarantor enters into
this Guaranty in consideration of, and as an inducement for Guaranteed Parties
having entered into or entering into the “Agreements” with
_______________________[Name], a ___________________ [State] corporation (the
“SSO Supplier”), which may involve the extension of credit by the Guaranteed
Parties.  Guarantor, subject to the terms and conditions hereof,
hereby unconditionally and absolutely guarantees to the Guaranteed Parties the
full and prompt payment when due, subject to an applicable grace period and upon
demand in writing from the Guaranteed Parties to the Guarantor’s attention at
the address for Guarantor set forth in Article 11 hereof of any and all amounts
payable by the SSO Supplier to the Guaranteed Parties arising out of the
Agreement(s), and,

    

    
      1.      The
Guarantor, as primary obligor and not merely as surety, hereby irrevocably and
unconditionally guarantees the full and prompt payment when due (whether by
acceleration or otherwise) of the principal and interest on any sums due and
payable by the SSO Supplier as a result of an Event of Default under the
Agreement(s) (including, without limitation, indemnities, damages, fees and
interest thereon, pursuant to the terms of the Agreement(s)). 
Notwithstanding anything to the contrary herein, the maximum aggregate liability
of the Guarantor under this Guaranty shall Option 1 [in no event exceed
_________________.]  Option 2 [in no event exceed the lesser of [the credit
limit amount] or the sum of the Total Exposures Amounts under the
Agreement(s).]  All such principal, interest, obligations and liabilities,
collectively, are the “Guaranteed Obligations”.  This Guaranty is a
guarantee of payment and not of collection.

       

       

       

      2.      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

       

       

       

      
        
          
          

        

        
          98

          
            

          

        

        
          
          

        

      

       

       

       

       

            Guaranteed  Parties  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.

       

    

     

    
      3.      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
Obligation(s) or liability of the SSO Supplier to the Guaranteed  Parties ; or (iii) compromise or subordinate any Guaranteed
Obligation(s) or liability of the SSO Supplier to the Guaranteed  Parties  including any security therefore.

       

       

       

      4.      Subject to the terms
and conditions hereof, 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 Agreement(s) 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 Agreement(s) 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 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
Agreement(s) 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 Agreement(s) 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 

       

       

       

      
        
          
          

        

        
          99

          
            

          

        

        
          
          

        

      

       

       

       

       

            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 Agreement(s) 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 Agreement(s).

       

       

       

      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. 

       

       

       

      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 

       

       

       

       

       

      
        
          
          

        

        
          100

          
            

          

        

        
          
          

        

      

       

       

            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:

    [To be
completed]

    

    

    

                  
 If to the Guaranteed Parties:

                   
Thomas R. Sims

                    Senior
Business Analyst

    FirstEnergy
Corp.

    76 South Main
Street, 17th
Floor

    Akron,
OH  44308

    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 th Guaranteed Parties repays 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
      Agreement(s) 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 as defined in the
      Agreement(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, as specified in the Agreement(s) and in a form reasonably
      acceptable to the Guaranteed Parties. 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,
      

            

    

     

     

    
      
        
        

      

      
        101

        
          

        

      

      
        
        

      

    

    
      

       

              
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 jurisdiction in which it was organized 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
      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 ___________________ [insert
      appropriate corporate organizational document, such as Declaration of
      Trust, Limited Liability Agreement, Articles of Incorporation or by-laws]
      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 Guarantor shall be held to any liability whatsoever for any
      obligation under this Guaranty, and such 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 Guarantor only as such, and

            

    

    

    

    
      
        
        

      

      
        102

        
          

        

      

      
        
        

      

    

     

    
      

       

      every person, firm,
association, trust or corporation having any claim or demand arising under this
Guaranty and relating to Guarantor, its shareholders or Trustee shall look
solely to the trust estate of Guarantor for the payment or satisfaction
thereof.

       

       

       

       

       

       

       

    

    

    

    IN WITNESS WHEREOF,
the Guarantor has caused this Guaranty to be executed and delivered as of the
date first above written to be effective as of the earliest effective date of
any of the Agreement(s).

    

    

    [GUARANTOR]

    

    

    By:_____________________________

               Title:

    

    

    Accepted and Agreed
to:

    

    

    The Cleveland
Electric Illuminating Company, 

    The Toledo Edison
Company 

    and Ohio Edison
Company 

    By:__________________________

               Title:

    

     

    
 

    
      
        
        

      

      
        103

        
          

        

      

      
        
        

      

    

     

    APPENDIX
F TO MASTER SSO SUPPLY AGREEMENT

    

    Any First Mortgage
Bonds delivered or pledged in satisfaction of the Surplus Margin requirements of
Section 6.9(c) of the Agreement by the SSO Supplier or its Guarantor (each, an
“Issuer”) shall be in a maximum principal amount of not less than $250 million;
provided that First Mortgage Bonds delivered or pledged to cover the first $500
million of Surplus Margin shall be in a maximum principal amount of not less
than $500 million; provided further that the provisions of such First Mortgage
Bonds may provide that the aggregate liability of the Issuer thereunder at any
given time will be the lesser of the aggregate maximum principal amount of all
such First Mortgage Bonds then delivered or pledged and the actual amount of
Surplus Margin then due under the Agreement.  Such First Mortgage
Bonds shall also satisfy the following conditions:

     

    
      	
              1)  

            	
              the Issuer’s
      First Mortgage Bonds or other senior secured debt securities that are pari
      passu with such First Mortgage Bonds shall at the date of delivery or
      pledge be rated at least BBB-, Baa3 or BBB- by any of S&P, Moody’s or
      Fitch;

            

    

    
      	
              2)  

            	
              all required
      State and Federal regulatory approvals for the delivery or pledge of such
      First Mortgage Bonds shall have been obtained and be in full force and
      effect;

            

    

    
      	
              3)  

            	
              any mortgage,
      indenture, deed of trust or other security agreement (the “Indenture”)
      providing for the issuance and delivery of the First Mortgage Bonds shall
      be a first priority lien on the property covered thereby subject only to
      customary permitted encumbrances, and shall contain customary provisions
      including with respect to:

            

    

    
      	
              a)  

            	
              the coverage
      of the lien thereof to appropriate asset classes (i.e. all assets used or
      useful in the generating electricity) and the maintenance and protection
      of the effectiveness and priority of such lien and the collateral covered
      thereby;

            

    

    
      	
              b)  

            	
              the limitation
      in amount of any First Mortgage Bond or other ratable obligations issuable
      thereunder to not more than 75% of the lower of cost or fair value of
      collateral covered thereby;

            

    

    
      	
              c)  

            	
              the exercise
      of remedies against the Issuer and such collateral in the event of, among
      other things, any default in payment, compliance with covenants or
      occurrence of bankruptcy, insolvency or similar
    proceedings;

            

    

    
      	
              4)  

            	
              the Issuer
      shall provide the Companies with customary legal opinions of outside
      counsel as to such matters as the Companies may request, including, but
      not limited to:

            

    

    
      	
              a)  

            	
              the
      authorization, execution, delivery and enforceability of the First
      Mortgage Bonds and the Indenture,

            

    

    
      	
              b)  

            	
              the due
      recordation of the Indenture and creation and priority of the lien
      thereof,

            

    

    
      	
              c)  

            	
              the Issuer’s
      valid and marketable title to the property covered by the lien of the
      Indenture, and

            

    

     

     

    
      
        
        

      

      
        104

        
          

        

      

      
        
        

      

    

     

    
      
        	
                   d)

              	
                  the
      receipt and full force and effect of all required State and Federal
      approvals; and

              

      

       

      
        	
                      
      5)

              	
                the structure
      of the delivery or pledge of the First Mortgage Bonds shall be acceptable
      to the Ohio Utilities (i.e. pledge, guaranty, escrow,
    etc.).

              

      

       

       

    

    Notwithstanding the
foregoing, any First Mortgage Bonds delivered or pledged in satisfaction of the
requirements of Section 6.9(c) of the Agreement shall be in form, amount and
substance satisfactory to the Companies in their sole discretion and the
Companies hereby reserve the right to waive or modify any of the above
conditions in their sole discretion.

     

    

    
      
         

      

      
        105Exhibit 10.1

 

	
   

  	
  

  
	
   

  	
  CF Industries Holdings, Inc.

  
	
   

  	
  4 Parkway North, Suite 400

  
	
   

  	
  Deerfield,
  Illinois 60015-2590

  
	
   

  	
   

  
	
   

  	
  847-405-2400

  
	
   

  	
  www.cfindustries.com

  

 

 

May 2, 2008

 

Cheryl K. Schmura

Vice President, Crop
Nutrients

CHS, Inc.

5500 Cenex Drive

Inver Grove Heights,
Minnesota 55077

 

Re:          Multiple-Year
Contract for the Purchase and Sale of Fertilizer

Dated July 1, 2005
by and between CF Industries, Inc. and

CHS, Inc. (as
assignee from Agriliance, LLC)

 

Dear Cheryl:

 

To better accommodate our
operations and the needs of our customers, we have modified our Multiple-Year
Contract to combine the Requirement Volume and the Sales Target Volume for DAP
and MAP. To that end, this letter is intended to amend the above-referenced
contract effective July 1, 2008 by (i) modifying Section 1(a) such
that the Requirement Volume and the Sales Target Volume for DAP and MAP are
combined as DAP/MAP and (ii) adding the following sentence at the end of
the first paragraph of Section 2 to address the placement of orders for
MAP:

 

Orders for MAP must be placed (i) not less than
fifteen (15) days prior to the first day of the month in which the Customer has
requested shipment (the “Shipment Month”) for Product sourced from Plant City,
Florida, and (ii) not less than forty-five (45) days prior to the first
day of the Shipment Month for Product sourced from all other locations.

 

In all other respects,
the Multiple-Year Contract shall remain in full force and effect.

 

If you are in agreement
with these changes, please indicate your consent by signing and returning the
enclosed copy of this letter.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  CF
  Industries, Inc.

  
	
   

  	
  By: 

  	
  /s/ Monty Summa

  
	
   

  	
   

  	
  Monty Summa, Vice
  President, Sales

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACCEPTED AND AGREED TO

  	
   

  
	
  this 9th day of May,
  2008

  	
   

  
	
   

  	
   

  
	
  CHS, Inc.

  	
   

  
	
  By:

  	
  /s/ Cheryl K. Schmura

  	
   

  
	
   

  	
  Cheryl K. Schmura

  	
   

  
	
   

  	
  Vice President, Crop
  Nutrients

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