U.S. $2,000,000,000 CREDIT AGREEMENT Dated as of June 14, 2005 Among FIRSTENERGY CORP., FIRSTENERGY SOLUTIONS CORP., AMERICAN TRANSMISSION SYSTEMS, INCORPORATED, OHIO EDISON COMPANY, PENNSYLVANIA POWER COMPANY, THE CLEVELAND ELECTRIC ILLUMINATING...

 

 

[NAME OF ASSIGNOR], as Assignor

By                                                             

Name:

Title:

[NAME OF ASSIGNEE], as Assignee

By                                                             

Name:

Title:

Domestic Lending Office (and

address for notices):

[Address]

Eurodollar Lending Office:

[Address]

Accepted and Consented this ____ day

of ___________, ______

CITICORP USA, INC.

as Administrative Agent and as a Fronting Bank

By                                                          

Name:

Title:

[FRONTING BANK]

as a Fronting Bank

By                                                     

Name:

Title:

 

[SWING LINE LENDER]

as a Swing Line Lender

By                                                  

Name:

Title:

BARCLAYS BANK PLC

as a Fronting Bank

By                                                  

Name:

Title:

Consented to:

FIRSTENERGY CORP.

By                                                

Name:

      Title:

FIRSTENERGY SOLUTIONS CORP.

By                                                 

      Name:

      Title:

AMERICAN TRANSMISSION SYSTEMS,

INCORPORATED

By                                                

      Name:

      Title:

OHIO EDISON COMPANY

By                                                 

Name:

Title:

PENNSYLVANIA POWER COMPANY

By                                                

Name:

Title:

THE CLEVELAND ELECTRIC

ILLUMINATING COMPANY

By                                              

Name:

Title:

THE TOLEDO EDISON COMPANY

By                                             

Name:

Title:

 

 

 

LIGHT COMPANY

 

By                                                     

Name:

Title:

METROPOLITAN EDISON COMPANY

By                                                     

Name:

Title:

PENNSYLVANIA ELECTRIC COMPANY

By                                                   

Name:

Title:

Schedule 1 to

Assignment and Acceptance

Dated __________

Total Credit Agreement Commitments             $____

Percentage Interest:                          ____%

Amount of Assigned Share                 $____

Assignee’s Commitment:                   $

Aggregate Outstanding Commitments owing to the Assignee:     $

A Note payable to the order of the Assignee

Dated: ____________

Principal amount:     $

[A Note payable to the order of the Assignor

Dated: _____________

Principal amount:     $____]

Effective Date^* :        _____________

---

PROMISSORY NOTE

U.S.$[______________]                                                             June __, 2005

FOR VALUE RECEIVED, the undersigned, [FIRSTENERGY CORP., an Ohio corporation] [FIRSTENERGY SOLUTIONS CORP., an Ohio corporation] [AMERICAN TRANSMISSION SYSTEMS, INCORPORATED, an Ohio corporation] [OHIO EDISON COMPANY, an Ohio corporation] [PENNSYLVANIA POWER COMPANY, a Pennsylvania corporation] [THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, an Ohio corporation] [THE TOLEDO EDISON COMPANY, an Ohio corporation] [JERSEY CENTRAL POWER & LIGHT COMPANY, a New Jersey corporation], [METROPOLITAN EDISON COMPANY, a Pennsylvania corporation] [PENNSYLVANIA ELECTRIC COMPANY, a Pennsylvania corporation] (the “Borrower”), HEREBY PROMISES TO PAY to the order of [_____________] (the “Lender”) for the account of its Applicable Lending Office (such term and other capitalized terms herein being used as defined in the Credit Agreement referred to below) the principal sum of U.S.$[______________] or, if less, the aggregate principal amount of the Advances made by the Lender to the Borrower pursuant to the Credit Agreement outstanding on the Termination Date, payable on the Termination Date.

The Borrower promises to pay interest on the unpaid principal amount of each Advance from the date of such Advance until such principal amount is paid in full, at such interest rates, and payable at such times, as are specified in the Credit Agreement.

 

Both principal and interest are payable in lawful money of the United States of America to Citicorp USA, Inc., as Administrative Agent, at ▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in same day funds. Each Advance made by the Lender to the Borrower pursuant to the Credit Agreement, and all payments made on account of principal thereof, shall be recorded by the Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Promissory Note.

 

This Promissory Note is one of the Notes referred to in, and is entitled to the benefits of, the Credit Agreement, dated as of June 14, 2005 (the “Credit Agreement”), among the Borrower, [FirstEnergy Corp.,] [FirstEnergy Solutions Corp.,] [American Transmission Systems, Incorporated,] [Ohio Edison Company,] [Pennsylvania Power Company,] [The Cleveland Electric Illuminating Company,] [The Toledo Edison Company,] [Jersey Central Power & Light Company,] [Metropolitan Edison Company,] [Pennsylvania Electric Company,] the banks party thereto, Citicorp USA, Inc. as Administrative Agent for the Lenders thereunder, Citicorp USA, Inc. (or one of its Affiliates), as a fronting bank, Barclays Bank PLC, as a fronting bank, the other fronting banks party thereto from time to time and the swing line lenders party thereto from time to time. The Credit Agreement, among other things, (i) provides for the making of Advances by the Lender to the Borrower from time to time in an aggregate amount not to exceed at any time outstanding the U.S. dollar amount first above mentioned, the indebtedness of the Borrower resulting from each such Advance being evidenced by this Promissory Note, and (ii) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified.

 

The Borrower hereby waives presentment, demand, protest and notice of any kind. No failure to exercise, and no delay in exercising, any rights hereunder on the part of the holder hereof shall operate as a waiver of such rights.

 

 

[FIRSTENERGY CORP.] [FIRSTENERGY SOLUTIONS CORP.] [AMERICAN TRANSMISSION SYSTEMS, INCORPORATED] [OHIO EDISON COMPANY] [PENNSYLVANIA POWER COMPANY] [THE CLEVELAND ELECTRIC ILLUMINATING COMPANY], [THE TOLEDO EDISON COMPANY] [JERSEY CENTRAL POWER & LIGHT COMPANY], [METROPOLITAN EDISON COMPANY], [PENNSYLVANIA ELECTRIC COMPANY]

By                                                                          

Name:

Title:

 

GUARANTY, dated as of _______, 200_, made by FIRSTENERGY CORP., an Ohio corporation (the “Guarantor”), in favor of the Lenders (as defined in the Credit Agreement referred to below), Citicorp USA, Inc. (“CUSA”), as Administrative Agent for the Lenders (the “Administrative Agent”), the fronting banks party to the Credit Agreement referred to below from time to time (the “Fronting Banks”) and the swing line lenders party to the Credit Agreement referred to below from time to time (the “Swing Line Lenders”, and together with the Lenders, the Administrative Agent and the Fronting Banks, the “Beneficiaries”).

 

The Guarantor, FirstEnergy Solutions Corp., an Ohio corporation (“FES”), American Transmission Systems, Incorporated, an Ohio corporation (“ATSI”), Ohio Edison Company, an Ohio corporation (“OE”), Pennsylvania Power Company, a Pennsylvania corporation (“Penn”), The Cleveland Electric Illuminating Company, an Ohio corporation (“CEI”), The Toledo Edison Company, an Ohio corporation (“TE”), Jersey Central Power & Light Company, a New Jersey corporation (“JCP&L”), Metropolitan Edison Company, a Pennsylvania corporation (“Met-Ed”), and Pennsylvania Electric Company, a Pennsylvania corporation (“Penelec”, and together with the Guarantor, FES, ATSI, OE, Penn, CEI, TE, JCP&L and Met-Ed, the “Borrowers”), are parties to a Credit Agreement, dated as of June 14, 2005 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; the capitalized terms defined therein and not otherwise defined herein being used herein as therein defined), with the Beneficiaries. The Guarantor may receive, directly or indirectly, a portion of the proceeds of the Extensions of Credit under the Credit Agreement and will derive substantial direct and indirect benefits from the transactions contemplated by the Credit Agreement. [It is a condition precedent to any increase in the Borrower Sublimit of [ATSI][FES] (the “Guaranteed Borrower”) that either (i) the Guaranteed Borrower has Reference Ratings of at least BBB- by S&P and Baa3 by ▇▇▇▇▇’▇ or (ii) the Guarantor deliver this Guaranty. The Guarantor desires to deliver this Guaranty in fulfillment of such condition.][ [ATSI][FES] (the “Guaranteed Borrower”) is required to meet the debt to capitalization ratio financial covenant described in Section 5.02(b) of the Credit Agreement unless the Guarantor delivers this Guaranty. The Guarantor desires to deliver this Guaranty in order to exempt the Guaranteed Borrower from compliance with such financial covenant.]

NOW, THEREFORE, in consideration of the premises and in order to induce the Beneficiaries to make Advances to, to issue Letters of Credit for the account of the Guaranteed Borrower and to otherwise satisfy their obligations under the Credit Agreement, the Guarantor hereby agrees as follows:

 

 

 

(a) The Guarantor hereby absolutely, unconditionally and irrevocably guarantees the punctual payment when due, whether at scheduled maturity or on any date of a required prepayment or by acceleration, demand or otherwise, of the Applicable Percentage (as defined below) of all payment, performance and other obligations of the Guaranteed Borrower now or hereafter existing under or in respect of the Loan Documents (including, without limitation, any extensions, modifications, substitutions, amendments or renewals of any or all of the foregoing Obligations), whether direct or indirect, absolute or contingent, and whether for principal, interest, reimbursement obligations, premiums, fees, indemnities, contract causes of action, costs, expenses or otherwise, including, without limitation, (i) the obligation of the Guaranteed Borrower to pay principal, interest, Letter of Credit fees, charges, expenses, fees, attorneys’ fees and disbursements, indemnities and other amounts payable by the Guaranteed Borrower under any Loan Document, (ii) the obligation of the Guaranteed Borrower to reimburse any amount in respect of any drawing under any Letter of Credit issued for the account of the Guaranteed Borrower and (iii) any liability of the Guaranteed Borrower on any claim, whether or not the right of any creditor to payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured or unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any proceeding (such obligations being the “Guaranteed Obligations”), and agrees to pay any and all expenses (including, without limitation, fees and expenses of counsel) incurred by any Beneficiary in enforcing any rights under this Guaranty or any other Loan Document. As used herein, “Applicable Percentage” shall mean (i) 100%, at any time that the Guaranteed Borrower [has Reference Ratings of less than BBB- by S&P and Baa3 by ▇▇▇▇▇’▇][the Guaranteed Borrower is not in compliance with the financial covenant described in Section 5.02 of the Credit Agreement] and (ii) 0%, at any time that the Guaranteed Borrower has Reference Ratings of at least BBB- by S&P and Baa3 by ▇▇▇▇▇’▇ and the Guaranteed Borrower is in compliance with the financial covenant described in Section 5.02 of the Credit Agreement. Without limiting the generality of the foregoing, the Guarantor’s liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by any other Borrower to any Beneficiary under or in respect of the Loan Documents but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving such other Borrower.

 

(b) The Guarantor, and by its acceptance of this Guaranty, each Beneficiary hereby confirms that it is the intention of all such Persons that this Guaranty and the Guaranteed Obligations of the Guarantor hereunder not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law (as hereinafter defined), the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to the extent applicable to this Guaranty and the Guaranteed Obligations. To effectuate the foregoing intention, the Beneficiaries and the Guarantor hereby irrevocably agree that the Guaranteed Obligations at any time shall be limited to the maximum amount as will result in the Guaranteed Obligations not constituting a fraudulent transfer or conveyance. For purposes hereof, “Bankruptcy Law” means any proceeding of the type referred to in Section 6.01(f) of the Credit Agreement or Title 11, U.S. Code, or any similar foreign, federal or state law for the relief of debtors.

 

 

 

The Guarantor guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Loan Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Beneficiary with respect thereto. The obligations of the Guarantor under or in respect of this Guaranty are independent of the Guaranteed Obligations or any other obligations the Guaranteed Borrower under or in respect of the Loan Documents, and a separate action or actions may be brought and prosecuted against the Guarantor to enforce this Guaranty, irrespective of whether any action is brought against the Guaranteed Borrower or whether the Guaranteed Borrower is joined in any such action or actions. The liability of the Guarantor under this Guaranty shall be irrevocable, absolute and unconditional irrespective of, and the Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to, any or all of the following:

 

(a) any lack of validity or enforceability of any Loan Document or any agreement or instrument relating thereto;

 

(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations or any other obligations of any other Borrower under or in respect of the Loan Documents, or any other amendment or waiver of or any consent to departure from any Loan Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to the Guaranteed Borrower or any other Borrower or any of its Subsidiaries or otherwise;

 

(c) any taking, exchange, release or non-perfection of any collateral, or any taking, release or amendment or waiver of, or consent to departure from, any other guaranty, for all or any of the Guaranteed Obligations;

 

(d) any manner of application of any collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any collateral for all or any of the Guaranteed Obligations or any other assets of the Guaranteed Borrower or any of its Subsidiaries;

 

(e) any change, restructuring or termination of the corporate structure or existence of the Guaranteed Borrower or any other Borrower or any of its Subsidiaries;

 

(f) any failure of any Beneficiary to disclose to the Guarantor any information relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of the Guaranteed Borrower now or hereafter known to such Beneficiary (the Guarantor waiving any duty on the part of Beneficiaries to disclose such information);

 

(g) the failure of any other Person to execute or deliver this Guaranty or any other guaranty or agreement or the release or reduction of liability of the Guarantor or other guarantor or surety with respect to the Guaranteed Obligations; or

 

(h) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by any Beneficiary that might otherwise constitute a defense available to, or a discharge of, the Guarantor or any other guarantor or surety.

 

This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by any Beneficiary or any other Person upon the insolvency, bankruptcy or reorganization of the Guarantor, the Guaranteed Borrower or otherwise, all as though such payment had not been made.

 

 

(a) The Guarantor hereby unconditionally and irrevocably waives promptness, diligence, notice of acceptance, presentment, demand for performance, notice of nonperformance, default, acceleration, protest or dishonor and any other notice with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that any Beneficiary protect, secure, perfect or insure any Lien or any property subject thereto or exhaust any right or take any action against the Guaranteed Borrower or any other Person or any collateral.

 

(b) The Guarantor hereby unconditionally and irrevocably waives any right to revoke this Guaranty and acknowledges that this Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.

 

(c) The Guarantor hereby unconditionally and irrevocably waives (i) any defense arising by reason of any claim or defense based upon an election of remedies by any Beneficiary that in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of the Guarantor or other rights of the Guarantor to proceed against the Guaranteed Borrower, any other guarantor or any other Person or any collateral and (ii) any defense based on any right of set-off or counterclaim against or in respect of the Guaranteed Obligations.

 

(d) The Guarantor hereby unconditionally and irrevocably waives any duty on the part of any Beneficiary to disclose to the Guarantor any matter, fact or thing relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of the Guaranteed Borrower or any other Borrower or any of its Subsidiaries now or hereafter known by such Beneficiary.

 

(e) The Guarantor acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by the Loan Documents and that the waivers set forth in Section 2 and this Section 3 are knowingly made in contemplation of such benefits.

 

 

The Guarantor hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire against the Guaranteed Borrower that arise from the existence, payment, performance or enforcement of the Guaranteed Obligations under or in respect of this Guaranty, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of any Beneficiary against the Guaranteed Borrower, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from the Guaranteed Borrower, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have been paid in full in cash, all Letters of Credit issued for the account of the Guaranteed Borrower shall have expired or been terminated and the Commitments relating to the Guaranteed Borrower’s Borrower Sublimit shall have expired or been terminated. If any amount shall be paid to the Guarantor in violation of the immediately preceding sentence at any time prior to the latest of (a) the payment in full in cash of the Guaranteed Obligations and all other amounts payable under this Guaranty, (b) the Termination Date, and (c) the latest date of expiration or termination of all Letters of Credit issued for the account of the Guaranteed Borrower, such amount shall be received and held in trust for the benefit of the Beneficiaries, shall be segregated from other property and funds of the Guarantor and shall forthwith be paid or delivered to the Administrative Agent in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of the Loan Documents, or to be held as collateral for any Guaranteed Obligations or other amounts payable under this Guaranty thereafter arising. If (i) the Guarantor shall make payment to any Beneficiary of all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have been paid in full in cash, (iii) the Termination Date shall have occurred and (iv) all Letters of Credit shall have expired or been terminated, the Beneficiaries will, at the Guarantor’s request and expense, execute and deliver to the Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to the Guarantor of an interest in the Guaranteed Obligations resulting from such payment made by the Guarantor pursuant to this Guaranty.

 

 

(a) Any and all payments made by the Guarantor under or in respect of this Guaranty or any other Loan Document shall be made, in accordance with Section 2.16 of the Credit Agreement, free and clear of and without deduction for any and all present or future Taxes. If the Guarantor shall be required by law to deduct any Taxes from or in respect of any sum payable under or in respect of this Guaranty or any other Loan Document to any Beneficiary, (i) the sum payable by the Guarantor shall be increased as may be necessary so that after the Guarantor and the Administrative Agent have made all required deductions (including deductions applicable to additional sums payable under this Section 5), such Beneficiary receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Guarantor shall make all such deductions and (iii) the Guarantor shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

 

(b) In addition, the Guarantor agrees to pay any present or future Other Taxes that arise from any payment made by or on behalf of the Guarantor under or in respect of this Guaranty or any other Loan Document or from the execution, delivery or registration of, performance under, or otherwise with respect to, this Guaranty and the other Loan Documents.

 

(c) The Guarantor agrees to indemnify each Beneficiary for and hold it harmless against the full amount of Taxes and Other Taxes, (including, without limitation, any Taxes or Other Taxes of any kind imposed by any jurisdiction on amounts payable under this Section 5) imposed on or paid by such Beneficiary and any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect thereto. This indemnification shall be made within 30 days from the date such Beneficiary makes written demand therefor.

 

(d) From time to time thereafter if requested by the Guarantor or the Administrative Agent, each Beneficiary organized under the laws of a jurisdiction outside the United States shall provide the Administrative Agent, each Fronting Bank, each Swing Line Lender and the Guarantor with the forms prescribed by the Internal Revenue Service of the United States certifying that such Beneficiary is exempt from United States withholding taxes with respect to all payments to be made to such Beneficiary hereunder. If for any reason during the term of this Guaranty, any Beneficiary becomes unable to submit the forms referred to above or the information or representations contained therein are no longer accurate in any material respect, such Beneficiary shall promptly notify the Administrative Agent, each Fronting Bank, each Swing Line Lender and the Guarantor in writing to that effect. Unless the Guarantor, the Fronting Banks, the Swing Line Lenders and the Administrative Agent have received forms or other documents satisfactory to them indicating that payments hereunder are not subject to United States withholding tax, the Guarantor, each Fronting Bank, each Swing Line Lender or the Administrative Agent shall withhold taxes from such payments at the applicable statutory rate in the case of payments to or for any Beneficiary organized under the laws of a jurisdiction outside the United States.

 

(e) Any Beneficiary claiming any additional amounts payable pursuant to this Section 5 shall use its best efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its Applicable Lending Office if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts that may thereafter accrue and would not, in the reasonable judgment of such Beneficiary, be otherwise disadvantageous to such Beneficiary.

 

(f) Without prejudice to the survival of any other agreement of the Guarantor hereunder, the agreements and obligations of the Guarantor contained in this Section 5 shall survive the payment in full or termination of the Guaranteed Obligations.

 

 

The Guarantor hereby makes each representation and warranty made in the Loan Documents by the Borrowers with respect to the Guarantor and the Guarantor hereby further represents and warrants as follows:

 

(a) There are no conditions precedent to the effectiveness of this Guaranty that have not been satisfied or waived.

 

(b) The Guarantor has, independently and without reliance upon any Beneficiary and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Guaranty and each other Loan Document to which it is or is to be a party, and the Guarantor has established adequate means of obtaining from the Guaranteed Borrower on a continuing basis information pertaining to, and is now and on a continuing basis will be completely familiar with, the business, condition (financial or otherwise), operations, performance, properties and prospects of the Guaranteed Borrower.

 

 

The Guarantor covenants and agrees that, so long as any part of the Guaranteed Obligations shall remain unpaid, any Letter of Credit issued for the account of the Guaranteed Borrower shall be outstanding or any Lender shall have any Commitment relating to the Guaranteed Borrower’s Borrower Sublimit, the Guarantor will perform and observe, and cause each of its Subsidiaries to perform and observe, all of the terms, covenants and agreements set forth in the Loan Documents on its or their part to be performed or observed or that the Guarantor has agreed to cause the Guaranteed Borrower or such Subsidiaries to perform or observe.

 

 

No amendment or waiver of any provision of this Guaranty and no consent to any departure by the Guarantor therefrom shall in any event be effective unless the same shall be in writing and signed by the Majority Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless in writing and signed by all of the Beneficiaries, (a) reduce or limit the obligations of the Guarantor hereunder, release the Guarantor hereunder or otherwise limit the Guarantor’s liability with respect to the Obligations owing to the Beneficiaries under or in respect of the Loan Documents, (b) postpone any date fixed for payment hereunder or (c) change the number of Beneficiaries or the percentage of (x) the Commitments, (y) the aggregate unpaid principal amount of the Advances or (z) the aggregate available amount of outstanding Letters of Credit that, in each case, shall be required for the Beneficiaries or any of them to take any action hereunder; and provided, further, that no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above to take such action, affect the rights or duties of the Administrative Agent under this Guaranty; and provided, further, that no amendment, waiver or consent that would adversely affect the rights of, or increase the obligations of, any Fronting Bank, shall be effective unless agreed to in writing by such Fronting Bank; and provided, further, that no amendment, waiver or consent that would adversely affect the rights of, or increase the obligations of, any Swing Line Lender, shall be effective unless agreed to in writing by such Swing Line Lender; and provided, further, that this Guaranty may be amended and restated without the consent of any Beneficiary if, upon giving effect to such amendment and restatement, such Beneficiary shall no longer be a Beneficiary of this Guaranty (as so amended and restated) or have any obligation hereunder and shall have been paid in full all amounts payable hereunder to such Beneficiary.

 

 

All notices and other communications provided for hereunder shall be in writing (including telegraphic, telecopy or cable communication) and mailed, telegraphed, telecopied, cabled or delivered to it, if to the Guarantor, addressed to it at FE’s addresses specified in Section 8.02 of the Credit Agreement, if to the Administrative Agent, any Lender or any Fronting Bank, at its address specified in Section 8.02 of the Credit Agreement, or, as to each party, at such other address as shall be designated by such party in a written notice to each other party. All such notices and other communications shall, when mailed, telegraphed, telecopied or cabled, be effective when deposited in the mails, delivered to the telegraph company, telecopied or delivered to the cable company, respectively. Delivery by telecopier of an executed counterpart of a signature page to any amendment or waiver of any provision of this Guaranty or of any Guaranty Supplement to be executed and delivered hereunder shall be effective as delivery of an original executed counterpart thereof.

 

 

No failure on the part of any Beneficiary to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

 

 

Upon the occurrence and during the continuance of any Event of Default, each Beneficiary and each of its Affiliates that is acting as a Fronting Bank under the Credit Agreement is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, excluding, however, any payroll accounts maintained by the Guarantor with such Beneficiary if and to the extent that such Beneficiary shall have expressly waived its set-off rights in writing in respect of such payroll account) at any time held and other indebtedness at any time owing by such Beneficiary or such Affiliate to or for the credit or the account of the Guarantor against any and all of the obligations of the Guarantor now or hereafter existing under this Guaranty, irrespective of whether such Beneficiary shall have made any demand under this Guaranty or any other Loan Document and although such obligations may be unmatured. Each Beneficiary agrees promptly to notify the Guarantor after any such set-off and application; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Beneficiary and its respective Affiliates under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) that such Beneficiary and its respective Affiliates may have.

 

 

(a)  Without limitation on any other Guaranteed Obligations of the Guarantor or remedies of the Beneficiaries under this Guaranty, the Guarantor shall, to the fullest extent permitted by law, indemnify, defend and save and hold harmless each Beneficiary and each of its Affiliates and their respective officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and against, and shall pay on demand, any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party in connection with or as a result of any failure of any Guaranteed Obligations to be the legal, valid and binding obligations of the Guaranteed Borrower enforceable against the Guaranteed Borrower in accordance with their terms.

 

(b) The Guarantor hereby also agrees that none of the Indemnified Parties shall have any liability (whether direct or indirect, in contract, tort or otherwise) to the Guarantor or any of its respective Affiliates or any of their respective officers, directors, employees, agents and advisors, and the Guarantor hereby agrees not to assert any claim against any Indemnified Party on any theory of liability, for special, indirect, consequential or punitive damages in connection with, arising out of, or otherwise relating to this Guaranty, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Advances constituting Guaranteed Obligations.

(c) Without prejudice to the survival of any of the other agreements of the Guarantor under this Guaranty or any of the other Loan Documents, the agreements and obligations of the Guarantor contained in Section 1(a) (with respect to enforcement expenses), the last sentence of Section 2, Section 5 and this Section 12 shall survive the payment in full of the Guaranteed Obligations and all of the other amounts payable under this Guaranty.

 

If any Unmatured Default shall have occurred and be continuing, the Guarantor agrees to subordinate any and all debts, liabilities and other obligations owed to the Guarantor by the Guaranteed Borrower (the “Subordinated Obligations”) to the Guaranteed Obligations to the extent and in the manner hereinafter set forth in this Section 13:

 

(a) Prohibited Payments, Etc. Except during the continuance of an Unmatured Default (including the commencement and continuation of any proceeding under any Bankruptcy Law relating to the Guaranteed Borrower), the Guarantor may receive regularly scheduled payments from the Guaranteed Borrower on account of the Subordinated Obligations. After the occurrence and during the continuance of any Unmatured Default (including the commencement and continuation of any proceeding under any Bankruptcy Law relating to the Guaranteed Borrower), however, unless the Administrative Agent otherwise agrees, the Guarantor shall not demand, accept or take any action to collect any payment on account of the Subordinated Obligations.

(b) Prior Payment of Guaranteed Obligations. In any proceeding under any Bankruptcy Law relating to the Guaranteed Borrower, the Guarantor agrees that the Beneficiaries shall be entitled to receive payment in full in cash of all Guaranteed Obligations (including all interest and expenses accruing after the commencement of a proceeding under any Bankruptcy Law, whether or not constituting an allowed claim in such proceeding (“Post Petition Interest”)) before the Guarantor receives payment of any Subordinated Obligations.

(c) Turn-Over. After the occurrence and during the continuance of any Unmatured Default (including the commencement and continuation of any proceeding under any Bankruptcy Law relating to the Guaranteed Borrower), the Guarantor shall, if the Administrative Agent so requests, collect, enforce and receive payments on account of the Subordinated Obligations as trustee for the Beneficiaries and deliver such payments to the Administrative Agent on account of the Guaranteed Obligations (including all Post Petition Interest), together with any necessary endorsements or other instruments of transfer, but without reducing or affecting in any manner the liability of the Guarantor under the other provisions of this Guaranty.

 

(d) Administrative Agent Authorization. After the occurrence and during the continuance of any Unmatured Default (including the commencement and continuation of any proceeding under any Bankruptcy Law relating to any other the Guaranteed Borrower), the Administrative Agent is authorized and empowered (but without any obligation to so do), in its discretion, (i) in the name of the Guarantor, to collect and enforce, and to submit claims in respect of, Subordinated Obligations and to apply any amounts received thereon to the Guaranteed Obligations (including any and all Post Petition Interest), and (ii) to require the Guarantor (A) to collect and enforce, and to submit claims in respect of, Subordinated Obligations and (B) to pay any amounts received on such obligations to the Administrative Agent for application to the Guaranteed Obligations (including any and all Post Petition Interest).

 

 

This Guaranty is a continuing guaranty and shall (a) remain in full force and effect until the latest of (i) the payment in full in cash of the Guaranteed Obligations and all other amounts payable under this Guaranty, (ii) the Termination Date, (iii) the latest date of expiration or termination of all Letters of Credit issued for the account of the Guaranteed Borrower, (b) be binding upon the Guarantor, its successors and assigns and (c) inure to the benefit of and be enforceable by the Beneficiaries and their successors, transferees and assigns. Without limiting the generality of clause (c) of the immediately preceding sentence, any Beneficiary may assign or otherwise transfer all or any portion of its rights and obligations under the Credit Agreement (including, without limitation, all or any portion of its Commitments, the Advances owing to it and the Note or Notes held by it) to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Beneficiary herein or otherwise, in each case as and to the extent provided in Section 8.08 of the Credit Agreement. The Guarantor shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Beneficiaries.

 

 

This Guaranty and each amendment, waiver and consent with respect hereto may be executed in any number of counterparts and by different parties thereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Guaranty by telecopier shall be effective as delivery of an original executed counterpart of this Guaranty.

 

 

(a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

(b) To the fullest extent permitted by law, the Guarantor hereby irrevocably and unconditionally (i) submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Guaranty or any of the other Loan Documents to which it is or is to be a party, and (ii) agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, in such Federal court. The Guarantor agrees, to the fullest extent permitted by law, that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

 

(c) The Guarantor hereby irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Guaranty or any of the other Loan Documents to which it is or is to be a party in any New York State or federal court. The Guarantor hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such suit, action or proceeding in any such court. The Guarantor also, irrevocably consents, to the fullest extent permitted by law, to the service of any and all process in any such action or proceeding by the mailing of certified mail of copies of such process to the Guarantor at its address specified in Section 9.

 

(d) THE GUARANTOR AND EACH BENEFICIARY HEREBY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY, ANY OTHER LOAN DOCUMENT, OR ANY OTHER INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR THEREUNDER.

 

 

IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.

 

FIRSTENERGY CORP.

By:_____________________________

Name:

Title:

 

 

 

 

Citicorp USA, Inc., as Administrative Agent

for the Lenders party to the Credit Agreement

referred to below

____ __, 200__

Ladies and Gentlemen:

 

The undersigned refers to the Credit Agreement, dated as of June 14, 2005 (the “Credit Agreement”, the terms defined therein being used herein as therein defined), among the undersigned, [FirstEnergy Corp.,] [American Transmission Systems, Incorporated,] [Pennsylvania Power Company,] [The Cleveland Electric Illuminating Company,] [The Toledo Edison Company,] [Jersey Central Power & Light Company,] [Metropolitan Edison Company,] [Pennsylvania Electric Company,] the banks party thereto, Citicorp USA, Inc. as Administrative Agent for the Lenders thereunder, Citicorp USA, Inc. (or one of its Affiliates), as a fronting bank, Barclays Bank PLC, as a fronting bank, the other fronting banks party thereto from time to time and the swing line lenders party thereto from time to time, and hereby gives you notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that the undersigned hereby requests a Pro-Rata Borrowing under the Credit Agreement, and in that connection sets forth below the information relating to such Pro-Rata Borrowing (the “Proposed Borrowing”) as required by Section 2.02(a) of the Credit Agreement:

 

(i) The Business Day of the Proposed Borrowing is __________________, ____.

 

(ii) The Type of Pro-Rata Advance to be made in connection with the Proposed Borrowing is [an Alternate Base Rate Pro-Rata Advance] [a Eurodollar Rate Pro-Rata Advance].

 

(iii) The aggregate amount of the Proposed Borrowing is $____________.

 

[(iv) The Interest Period for each Eurodollar Rate Pro-Rata Advance made as part of the Proposed Borrowing is ____ [week[s]][month[s]].]

 

(v)

The Borrower requesting the Proposed Borrowing is _______________.

 

The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the Proposed Borrowing:

 

(A) the representations and warranties of such Borrower contained in Section 4.01 [(other than subsections (f) and (g) thereof)]*  of the Credit Agreement are correct, before and after giving effect to the Proposed Borrowing and to the application of the proceeds therefrom, as though made on and as of such date;

 

(B) no event has occurred and is continuing, or would result from such Proposed Borrowing or from the application of the proceeds therefrom, that constitutes an Event of Default with respect to such Borrower (and if FE has executed and delivered a Guaranty with respect to the obligations of such Borrower thereunder, with respect to FE) or would constitute an Event of Default with respect to such Borrower (and if FE has executed and delivered a Guaranty with respect to the obligations of such Borrower thereunder, with respect to FE) but for the requirement that notice be given or time elapse or both; and

 

(C) immediately following such Proposed Borrowing, (1) the aggregate amount of Outstanding Credits shall not exceed the aggregate amount of the Commitments then in effect, (2) the Outstanding Credits of any Lender shall not exceed the amount of such Lender’s Commitment, (3) the Outstanding Credits for the account of any Borrower shall not exceed the Borrower Sublimit for such Borrower, and (4) the aggregate principal amount of the Swing Line Advances outstanding shall not exceed the Swing Line Sublimit.

 

Very truly yours,

[FIRSTENERGY CORP.] [FIRSTENERGY SOLUTIONS CORP.] [AMERICAN TRANSMISSION SYSTEMS, INCORPORATED] [OHIO EDISON COMPANY] [PENNSYLVANIA POWER COMPANY] [THE CLEVELAND ELECTRIC ILLUMINATING COMPANY] [THE TOLEDO EDISON COMPANY] [JERSEY CENTRAL POWER & LIGHT COMPANY] [METROPOLITAN EDISON COMPANY] [PENNSYLVANIA ELECTRIC COMPANY]

By                                                                         

Name:

Title:

---

Citicorp USA, Inc., as Administrative Agent

for the Lenders party to the Credit Agreement

referred to below

____ __, 200__

Ladies and Gentlemen:

 

The undersigned refers to the Credit Agreement, dated as of June 14, 2005 (the “Credit Agreement”, the terms defined therein being used herein as therein defined), among the undersigned, [FirstEnergy Corp.,] [American Transmission Systems, Incorporated,] [Pennsylvania Power Company,] [The Cleveland Electric Illuminating Company,] [The Toledo Edison Company,] [Jersey Central Power & Light Company,] [Metropolitan Edison Company,] [Pennsylvania Electric Company,] the banks party thereto, Citicorp USA, Inc. as Administrative Agent for the Lenders thereunder, Citicorp USA, Inc. (or one of its Affiliates), as a fronting bank, Barclays Bank PLC, as a fronting bank, the other fronting banks party thereto from time to time and the swing line lenders party thereto from time to time, and hereby gives you notice, irrevocably, pursuant to Section 2.03 of the Credit Agreement that the undersigned hereby requests a Swing Line Borrowing under the Credit Agreement, and in that connection sets forth below the information relating to such Swing Line Borrowing (the “Proposed Borrowing”) as required by Section 2.03(b) of the Credit Agreement:

 

(i) The Business Day of the Proposed Borrowing is __________________, ____.

 

(ii) The Type of a Swing Line Advance to be made in connection with the Proposed Borrowing is [an Alternate Base Rate Swing Line Advance] [a Eurodollar Rate Swing Line Advance] [a Cost of Funds Swing Line Advance].

 

(iii) The aggregate amount of the Proposed Borrowing is $____________.

 

[(iv) The Interest Period for each [Eurodollar Rate Swing Line Advance] [Cost of Funds Swing Line Advance] made as part of the Proposed Borrowing is ____ [week[s]][month[s]].]

 

(v)

The Borrower requesting the Proposed Borrowing is _______________.

 

The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the Proposed Borrowing:

 

(A) the representations and warranties of such Borrower contained in Section 4.01 [(other than subsections (f) and (g) thereof)]*  of the Credit Agreement are correct, before and after giving effect to the Proposed Borrowing and to the application of the proceeds therefrom, as though made on and as of such date;

 

(B) no event has occurred and is continuing, or would result from such Proposed Borrowing or from the application of the proceeds therefrom, that constitutes an Event of Default with respect to such Borrower (and if FE has executed and delivered a Guaranty with respect to the obligations of such Borrower thereunder, with respect to FE) or would constitute an Event of Default with respect to such Borrower (and if FE has executed and delivered a Guaranty with respect to the obligations of such Borrower thereunder, with respect to FE) but for the requirement that notice be given or time elapse or both; and

 

(C) immediately following such Proposed Borrowing, (1) the aggregate amount of Outstanding Credits shall not exceed the aggregate amount of the Commitments then in effect, (2) the Outstanding Credits of any Lender shall not exceed the amount of such Lender’s Commitment, (3) the Outstanding Credits for the account of any Borrower shall not exceed the Borrower Sublimit for such Borrower, and (4) the aggregate principal amount of the Swing Line Advances outstanding shall not exceed the Swing Line Sublimit.

 

Very truly yours,

[FIRSTENERGY CORP.] [FIRSTENERGY SOLUTIONS CORP.] [AMERICAN TRANSMISSION SYSTEMS, INCORPORATED] [OHIO EDISON COMPANY] [PENNSYLVANIA POWER COMPANY] [THE CLEVELAND ELECTRIC ILLUMINATING COMPANY] [THE TOLEDO EDISON COMPANY] [JERSEY CENTRAL POWER & LIGHT COMPANY] [METROPOLITAN EDISON COMPANY] [PENNSYLVANIA ELECTRIC COMPANY]

By                                                                   

Name:

Title:

---

_____ __, 200__

Citicorp USA, Inc., as Administrative Agent [and as Fronting Bank]¹ 

▇▇▇ ▇▇▇▇▇ ▇▇▇

▇▇▇▇▇ ▇▇▇

▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇

Attn:_______________________

[___________________, as Fronting Bank

[ADDRESS]]² 

Ladies and Gentlemen:

The undersigned, [FIRSTENERGY CORP., an Ohio corporation] [FIRSTENERGY SOLUTIONS CORP. an Ohio corporation], [AMERICAN TRANSMISSION SYSTEMS, INCORPORATED, an Ohio corporation] [OHIO EDISON COMPANY, an Ohio corporation] [PENNSYLVANIA POWER COMPANY, a Pennsylvania corporation] [THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, an Ohio corporation] [THE TOLEDO EDISON COMPANY, an Ohio corporation] [JERSEY CENTRAL POWER & LIGHT COMPANY, a New Jersey corporation] [METROPOLITAN EDISON COMPANY, a Pennsylvania corporation] [PENNSYLVANIA ELECTRIC COMPANY, a Pennsylvania corporation], (the “Borrower”), refer to that certain Credit Agreement, dated as of June 14, 2005 (the “Credit Agreement”), among FirstEnergy Corp., FirstEnergy Solutions Corp., American Transmission Systems, Incorporated, Ohio Edison Company, Pennsylvania Power Company, the Cleveland Electric Illuminating Company, The Toledo Edison Company, Jersey Central Power & Light Company, Metropolitan Edison Company, and Pennsylvania Electric Company, the banks party thereto, Citicorp USA, Inc. as Administrative Agent for the Lenders thereunder, Citicorp USA, Inc. (or one of its Affiliates), as a fronting bank, Barclays Bank PLC, as a fronting bank, the other fronting banks party thereto from time to time and the swing line lenders party thereto from time to time. Capitalized terms used herein, and not otherwise defined herein, shall have their respective defined meanings as set forth in the Credit Agreement.

Pursuant to Section 2.04(d) of the Credit Agreement, the Borrower irrevocably requests that the Fronting Bank to which this Letter of Credit Request is addressed issue a Letter of Credit on the following terms:

 

¹  Include bracketed language if applicable Fronting Bank is Citicorp USA, Inc.

²  Include bracketed language if applicable Fronting Bank is not Citicorp USA, Inc.

 

1. Date of Issuance:

2. Expiration Date:

3. Stated Amount:

4. Beneficiary:

5. Account Party:

and the terms set forth in the attached application for said Letter of Credit.

The Borrower hereby further certifies that (i) as of the date hereof, (ii) as of the Date of Issuance and (iii) after the issuance of the Letter of Credit requested hereby:

(A) the representations and warranties of such Borrower contained in Section 4.01 [(other than subsections (f) and (g) thereof)]*  of the Credit Agreement are true and correct on and as of the date hereof, before and after giving effect to the issuance of such Letter of Credit and to the application of the proceeds therefrom, as though made on and as of such dates;

(B) no event has occurred and is continuing, or would result from the issuance of the Letter of Credit requested hereby or from the application of the proceeds therefrom, that constitutes an Event of Default with respect to such Borrower (and if FE has executed and delivered a Guaranty with respect to the obligations of such Borrower thereunder, with respect to FE) or would constitute an Event of Default with respect to such Borrower (and if FE has executed and delivered a Guaranty with respect to the obligations of such Borrower thereunder, with respect to FE) but for the requirement that notice be given or time elapse or both; and

(C) immediately following the issuance of such Letter of Credit, (1) the aggregate amount of Outstanding Credits shall not exceed the aggregate amount of the Commitments then in effect, (2) the Outstanding Credits of any Lender shall not exceed the amount of such Lender’s Commitment [and] [,] (3) the Stated Amount thereof, when aggregated with (x) the Stated Amount of each other Letter of Credit that is outstanding or with respect to which a Letter of Credit Request has been received and (y) the outstanding Reimbursement Obligations, shall not exceed the L/C Commitment Amount [and (2) the aggregate Stated Amount of all outstanding Letters of Credit issued by the Fronting Bank will not exceed $500,000,000]* *.

If notice of the request for the above referenced Letter of Credit has been given by the Borrower previously by telephone, then this notice shall be considered a written confirmation of such telephone notice as required by Section 2.04(d) of the Credit Agreement.

 

 

* Delete for initial Extension of Credit.

** Include if applicable Fronting Bank is CUSA or Barclays.

 

By ___________________________

Name:

Title:

[LETTERHEAD OF FIRSTENERGY CORP.]

 

June 14, 2005

 

 

 

To the Banks party to the within-mentioned

Credit Agreement, Citicorp USA, Inc., as

Administrative Agent for the Lenders thereunder,

Citicorp USA (or one of its Affiliates), as a

fronting bank, Barclays Bank PLC, as a fronting

bank, the other fronting banks party thereto and

the swing line lenders party thereto.

Re: Credit Agreement,

 

 

Ladies and Gentlemen:

 

I am Associate General Counsel for FirstEnergy Corp., an Ohio corporation (“FE”) and have acted as counsel to FE and its subsidiaries, FirstEnergy Solutions Corp., an Ohio corporation (“FES”), American Transmission Systems, Incorporated, an Ohio corporation (“ATSI”), Ohio Edison Company, an Ohio corporation (“OE”), Pennsylvania Power Company, a Pennsylvania corporation (“Penn”), The Cleveland Electric Illuminating Company, an Ohio corporation (“CEI”), The Toledo Edison Company, an Ohio corporation (“TE”), Jersey Central Power & Light Company, a New Jersey corporation (“JCP&L”), Metropolitan Edison Company, a Pennsylvania corporation (“Met-Ed”), and Pennsylvania Electric Company, a Pennsylvania corporation (“Penelec”, and together with FE, FES, ATSI, OE, Penn, CEI, TE, JCP&L and Met-Ed, the “Borrowers” and each a “Borrower”) in connection with the transactions contemplated by the Credit Agreement, dated as of June 14, 2005 (the “Credit Agreement”), among the Borrowers, the banks party thereto, Citicorp USA, Inc., as Administrative Agent for the Lenders thereunder, Citicorp USA, Inc. (or one of its Affiliates), as a fronting bank, Barclays Bank PLC, as a fronting bank, the other fronting banks party thereto and the swing line lenders party thereto. Capitalized terms used herein and not defined have the meanings assigned to them in the Credit Agreement. This opinion is being furnished to you pursuant to Section 3.01(a)(v) of the Credit Agreement. The Credit Agreement, the Notes and each Guaranty are sometimes referred to in this opinion collectively as the “Loan Documents” and each individually as a “Loan Document”.

 

For purposes of this opinion, I or persons under my supervision and control have reviewed executed originals or copies of executed originals of the Credit Agreement and the respective forms of the Notes and the Guaranty attached thereto. I or persons under my supervision and control have also reviewed originals or copies of the Approvals and such corporate records and other documents and matters and have made such investigation of fact and law as I have considered relevant or necessary as a basis for this opinion. In such review, I have assumed the accuracy and completeness of all agreements, documents, records, certificates and other materials submitted to us, the conformity with the originals of all such materials submitted to us as copies (whether or not certified and including facsimiles), the authenticity of the originals of such materials and all materials submitted to us as originals, the genuineness of all signatures (other than those on behalf of the Borrowers) and the legal capacity of all natural persons.

 

I have also assumed (a) the due organization, valid existence and good standing under the laws of its jurisdiction of incorporation of each party (other than the Borrowers) to each Loan Document, (b) the corporate or other power and due authorization of each Person (other than the Borrowers) not a natural person to execute, deliver and perform its obligations under each Loan Document to which it is a party, (c) the due execution and delivery of each Loan Document by each party thereto (other than the Borrowers), and (d) that each Loan Document constitutes the valid and binding obligation of each party thereto (other than the Borrowers), enforceable against such party in accordance with its terms. As to various questions of fact relevant to this opinion, I have relied, without independent investigation, upon certificates of public officials, certificates of officers of the Borrowers and representations and warranties of the Borrowers contained in the Credit Agreement.

 

I am a member of the Bars of the State of Ohio and the Commonwealth of Pennsylvania, and, for purposes of this opinion, I do not hold myself out as an expert on the laws of any jurisdiction other than the laws of the State of Ohio and the Commonwealth of Pennsylvania. Except as set forth in the next sentence, I express no opinion herein as to the application or effect of the laws of any jurisdiction other than the laws of the State of Ohio or the Commonwealth of Pennsylvania. Insofar as the opinion expressed herein relates to matters which are governed by (i) the laws of the State of New York or the federal laws of the United States, I have relied with your permission on the opinion, dated the date hereof, addressed to you of Akin Gump ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, New York, New York, and (ii) the laws of the State of New Jersey, I have relied with your permission on the opinion, dated the date hereof, addressed to me of ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, Florham Park, New Jersey.

 

Based on the foregoing and such legal considerations as I have deemed necessary or advisable to express this opinion, I am of the opinion that:

 

Each Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation, is duly qualified to do business as a foreign corporation in and is in good standing under the laws of each other state in which the ownership of its properties or the conduct of its business makes such qualification necessary, except where the failure to be so qualified would not have a material adverse effect on its business or financial condition or on its ability to perform its obligations under the Loan Documents, and has all corporate powers to carry on its business as now conducted and to maintain and operate its property and business.

 

No Governmental Action is or will be required for (a) the due execution or delivery by any Borrower of any Loan Document or the performance by any Borrower of its obligations thereunder or (b) the consummation by any Borrower of any transaction contemplated by the Loan Documents, other than (1) the Approvals, which are in full force and effect as of the date hereof, (2) the Supplemental Approvals, and (3) such Governmental Action as may be required after the date hereof in connection with the performance by the Borrowers of the general covenants set forth in Sections 5.01(a) and (b) of the Credit Agreement.

 

The execution and delivery by the Borrowers of the Loan Documents, the performance by the Borrowers of their obligations under the Loan Documents, the consummation by the Borrowers of the transactions contemplated by any Loan Document, and compliance by the Borrowers with the provisions thereof, will not result in of (a) a breach or violation of, or conflict with, any of the provisions of the Organizational Documents of the Borrowers, (b) a breach or violation of, or conflict with, any Applicable Law of the State of Ohio, the Commonwealth of Pennsylvania or the State of New Jersey, (c) a breach or contravention of, or conflict with, any of the provisions of any material indenture, mortgage, lease or other agreement or instrument to which any Borrower or any Affiliate of such Borrower is a party or by which any of its property or the property of its Affiliates is bound, or (d) the creation or imposition of any Lien upon any property of any Borrower or any of its Affiliates.

 

The execution, delivery and performance by each Borrower of each of the Loan Documents to which it is a party are within its corporate powers, have been duly authorized by all necessary corporate action on the part of such Borrower and did not, do not, and will not require the consent or approval of such Borrower’s shareholders, or any trustee or holder of any Indebtedness or other obligation of it, other than such consents and approvals as have been duly obtained, given or accomplished.

 

The Credit Agreement has been duly executed and delivered by each Borrower and is a valid and binding obligation of each Borrower, enforceable against each Borrower in accordance with its terms, subject to and qualified by the effect of (a) applicable bankruptcy, insolvency, fraudulent transfer and conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally; (b) general principles of equity, (regardless of whether enforcement is sought in a proceeding at law or in equity); (c) commercial reasonableness and unconscionability and an implied covenant of good faith and fair dealing; (d) the power of the courts to award damages in lieu of equitable remedies; (e) securities laws and public policy underlying such laws with respect to rights to indemnification and contribution; and (f) unenforceability of any indemnification or other provision on the basis that such enforcement would contravene public policy.

 

Each Note, when executed by the applicable Borrower and delivered in exchange for value, and each Guaranty, when executed by FirstEnergy and delivered in exchange for value, will be a valid and binding obligation of such Borrower or FirstEnergy, as the case may be, enforceable against such Borrower or FirstEnergy, as the case may be, in accordance with its terms, subject to and qualified by the effect of (a) applicable bankruptcy, insolvency, fraudulent transfer and conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally; (b) general principles of equity, (regardless of whether enforcement is sought in a proceeding at law or in equity); (c) commercial reasonableness and unconscionability and an implied covenant of good faith and fair dealing; (d) the power of the courts to award damages in lieu of equitable remedies; (e) securities laws and public policy underlying such laws with respect to rights to indemnification and contribution; and (f) unenforceability of any indemnification or other provision on the basis that such enforcement would contravene public policy.

 

In any action or proceeding arising out of or relating to the Notes or the Credit Agreement in any court of the State of Ohio, the Commonwealth of Pennsylvania or the State of New Jersey or in any federal court sitting in the State of Ohio, the Commonwealth of Pennsylvania or the State of New Jersey, such court should recognize and give effect to the provisions of the Notes or Section 8.09 of the Credit Agreement, as the case may be, wherein the parties thereto agree that the Notes and the Credit Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. Without limiting the generality of the foregoing, a court of the State of Ohio, the Commonwealth of Pennsylvania or the State of New Jersey or a federal court sitting in the State of Ohio, the Commonwealth of Pennsylvania or the State of New Jersey should apply the usury law of the State of New York, and should not apply the usury law of the State of Ohio, the Commonwealth of Pennsylvania or the State of New Jersey, respectively, to the Credit Agreement and the Notes. However, if a court were to hold that the Credit Agreement or the Notes are governed by, and to be construed in accordance with, the laws of the State of Ohio, the Commonwealth of Pennsylvania or the State of New Jersey, the Credit Agreement and the Notes (when executed and delivered in accordance with the terms of the Credit Agreement) would be, under the laws of, as applicable, the State of Ohio, the Commonwealth of Pennsylvania or the State of New Jersey, the legal, valid and binding obligations of the Borrowers, enforceable against the Borrowers in accordance with their respective terms, subject to and qualified by the effect of (a) applicable bankruptcy, insolvency, fraudulent transfer and conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally; (b) general principles of equity, (regardless of whether enforcement is sought in a proceeding at law or in equity); (c) commercial reasonableness and unconscionability and an implied covenant of good faith and fair dealing; (d) the power of the courts to award damages in lieu of equitable remedies; (e) securities laws and public policy underlying such laws with respect to rights to indemnification and contribution; and (f) unenforceability of any indemnification or other provision on the basis that such enforcement would contravene public policy.

 

Except as disclosed in any filings made by the Borrowers in compliance with the Securities Exchange Act of 1934, as amended, (a) there is no provision of the Organizational Documents of any Borrower, or any Applicable Law of the State of Ohio, the Commonwealth of Pennsylvania or the State of New Jersey, or any indenture, mortgage, lease or other agreement or instrument, in each case, that could reasonably be expected to have a material adverse effect on such Borrower’s ability to perform its obligations under any Loan Document, (b) each Borrower and its Subsidiaries are in compliance with all laws (including, without limitation, ERISA and Environmental Laws), regulations and orders of any Governmental Authority of the State of Ohio, the Commonwealth of Pennsylvania or the State of New Jersey applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except in each case where the failure to be so, individually or in the aggregate, has not had and could not reasonably be expected to have a material adverse effect on (i) the business, assets, operations or condition (financial or otherwise) of such Borrower and its Subsidiaries taken as a whole, or (ii) the legality, validity or enforceability of any of the Loan Documents or the rights, remedies and benefits available to the parties thereunder or the ability of such Borrower to perform its obligations under the Loan Documents, and (c) there is no pending or, to the best of my knowledge, threatened action or proceeding (including, without limitation, any proceeding relating to or arising out of Environmental Laws) affecting any Borrower or any of its Subsidiaries before any court, governmental agency or arbitrator, that could reasonably be expected to have a material adverse effect on the business, condition (financial or otherwise) or results of operations of such Borrower and its Subsidiaries, taken as a whole, or on the ability of such Borrower to perform its obligations under the Credit Agreement or any other Loan Document.

 

 

This opinion is limited by, subject to and based on the following:

 

No examination has been made of, and no opinion is expressed as to the effect of, any zoning ordinance or permit pertaining to the authority of the Borrowers to operate their properties or conduct their businesses;

 

I also express no opinion with respect to (i) Section 8.10(a) of the Credit Agreement or any similar provision in any of the other Loan Documents, to the extent such provisions purport to confer subject matter jurisdiction on any federal court of the United States of America or grant a waiver of the defense of inconvenient forum; (ii) Section 8.10(b) of the Credit Agreement or any similar provision in any of the other Loan Documents, to the extent such provisions relate to the waiver of the right to jury trial in the federal courts; (iii) the financial condition or solvency of any Borrower, (iv) the financial ability of any Borrower or the ability (financial or otherwise) of any other Person to meet its obligations under the Credit Agreement or any other Loan Document; or (v) the compliance of the Credit Agreement or any other Loan Document or the transactions contemplated thereby with, or the effect of any of the foregoing with respect to, Federal and state securities Laws, rules and regulations;

 

This opinion and the matters addressed herein are as of the date hereof or such earlier date as is specified herein, and I undertake no, and hereby disclaim any, obligation to advise you of any change in any matter set forth herein, whether based on a change in the law, a change in any fact relating to the Borrowers or any other Person, or any other circumstance occurring after the date hereof;

 

I have assumed that no fraud, dishonesty, forgery, coercion, duress or breach of fiduciary duty exists with respect to any of the matters relevant to this opinion; and

 

This opinion is limited to the matters expressly set forth herein and no opinion is to be implied or may be inferred beyond the matters expressly stated herein.

 

This opinion is solely for the benefit of the addressees hereof in connection with the transactions contemplated by the Credit Agreement and may not be relied on by the addressees hereof for any other purpose or furnished or quoted to or relied on by any other Person for any purpose without my prior written consent.

 

Respectfully submitted,

 

 

 

▇▇▇▇ ▇. Benz, Esq.

Associate General Counsel

 

To the Banks party to the within-mentioned

Credit Agreement, Citicorp USA, Inc., as

Administrative Agent for the Lenders thereunder,

Citicorp USA, as a fronting bank, Barclays

Bank PLC, as a fronting bank, the other

fronting banks party thereto and

the swing line lenders party thereto.

 

Ladies and Gentlemen:

 

We have acted as special New York counsel to FirstEnergy Corp., an Ohio corporation (“FE”) and its subsidiaries, FirstEnergy Solutions Corp., an Ohio corporation (“FES”), American Transmission Systems, Incorporated, an Ohio corporation (“ATSI”), Ohio Edison Company, an Ohio corporation (“OE”), Pennsylvania Power Company, a Pennsylvania corporation (“Penn”), The Cleveland Electric Illuminating Company, an Ohio corporation (“CEI”), The Toledo Edison Company, an Ohio corporation (“TE”), Jersey Central Power & Light Company, a New Jersey corporation (“JCP&L”), Metropolitan Edison Company, a Pennsylvania corporation (“Met-Ed”), and Pennsylvania Electric Company, a Pennsylvania corporation (“Penelec”, and together with FE, FES, ATSI, OE, Penn, CEI, TE, JCP&L and Met-Ed, the “Borrowers” and each a “Borrower”) in connection with the execution and delivery of the Credit Agreement, dated as of June 14, 2005 (the “Credit Agreement”), among the Borrowers, the banks party thereto, Citicorp USA, Inc., as Administrative Agent for the Banks thereunder, Citicorp USA, Inc., as a fronting bank, Barclays Bank PLC, as a fronting bank, the other fronting banks party thereto and the swing line lenders party thereto. Capitalized terms used herein and not defined have the meanings assigned to them in the Credit Agreement. This opinion is being furnished to you pursuant to Section 3.01(a)(vi) of the Credit Agreement. The Credit Agreement, the Notes and each Guaranty are sometimes referred to in this opinion collectively as the “Loan Documents” and each individually as a “Loan Document”.

 

In connection with this opinion, we have reviewed executed originals or copies of executed originals of the Credit Agreement and the respective forms of the Notes and the Guaranty attached thereto. We have also reviewed copies of the Approvals and originals or certified copies of such corporate and company records of each Borrower and other certificates and documents of officials of each Borrower and certain of their affiliates, public officials and others as we have deemed appropriate for purposes of this opinion, and relied upon them to the extent we deem appropriate. As to various questions of fact relevant to this opinion, we have relied, without independent investigation, upon certificates of public officials, certificates of officers of each Borrower, and representations and warranties of each Borrower contained in the Credit Agreement. In addition, we have made no inquiry of any Borrower or any other person or entity (including governmental authorities), regarding any judgments, orders, decrees, franchises, licenses, certificates, permits or other public records or agreements to which any Borrower is a party other than those described herein, and our knowledge of any such matters is accordingly limited. We have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity to authentic original documents of all copies submitted to us as conformed, certified or reproduced copies.

 

We have also assumed (i) the due organization, valid existence and good standing under the laws of its jurisdiction of incorporation of each party to each Loan Document, (ii) the legal capacity of natural persons, (iii) the corporate or other power and due authorization of each Person not a natural person to execute, deliver and perform its obligations under each Loan Document to which it is a party, (iv) the due execution and delivery of each Loan Document by all parties thereto, (v) that each Loan Document constitutes the valid and binding obligation of each party thereto (other than the Borrowers), enforceable against such party in accordance with its terms, (vi) that the execution, delivery and performance by any party to the Loan Documents do not, and will not, require the consent or approval of its shareholders, or any trustee or holder of any Indebtedness or other obligation of it and will not result in (a) a breach or violation of, or conflict with, any of the provisions of its Organizational Documents or (b) a breach or contravention of, or conflict with, any of the provisions of any indenture, mortgage, lease or other agreement or instrument to which it is a party or (c) a breach or violation of, or conflict with, any law (other than any Included Law (as defined herein)) or any order, rule, regulation or determination of any Governmental Authority applicable to it (other than under any Included Law), (vii) that all required Governmental Action (other than under any Included Law) for the execution and delivery by each party to any Loan Document, the performance by it of its obligations thereunder or the consummation by it of any transaction contemplated thereby have been obtained or taken and (viii) that the Approvals (other than the FE SEC Order, ATSI SEC Order, Penn SEC Order, JCP&L SEC Order, Penelec SEC Order and Met-Ed SEC Order (collectively, the “SEC Order”)) are in full force and effect.

 

Based upon the foregoing and subject to the assumptions, exceptions, qualifications and limitations set forth herein, we are of the opinion that:

 

No Governmental Action is or will be required under any Included Law for the due execution and delivery by each Borrower of any Loan Document to which it is a party or the performance by it of its obligations thereunder, other than (i) the SEC Order, which is in full force and effect as of the date hereof, and any FE Supplemental SEC Order, ATSI Supplemental SEC Order, Penn Supplemental SEC Order, JCP&L Supplemental SEC Order, Penelec Supplemental SEC Order and Met-Ed Supplemental SEC Order, and (ii) such Governmental Action as may be required after the date hereof in connection with the performance by such Borrower of the general covenants set forth in Section 5.01(a) and (b) of the Credit Agreement.

 

The execution and delivery by each Borrower of any Loan Document to which it is a party, the performance by such Borrower of its obligations under any such Loan Document, the consummation by such Borrower of the transactions contemplated by any such Loan Document and compliance by such Borrower with the provisions thereof, will not result in a breach or violation of, or conflict with, any Included Law or, to our knowledge, any order, rule or regulation of any Governmental Authority having jurisdiction over such Borrower under any Included Law.

 

The Credit Agreement constitutes a valid and binding obligation of each Borrower, enforceable against each Borrower in accordance with its terms.

 

Each Note, when executed by the applicable Borrower and delivered in exchange for value, and each Guaranty, when executed by FE and delivered in exchange for value, will constitute a valid and binding obligation of such Borrower or FE, as the case may be, enforceable against such Borrower or FE, as the case may be, in accordance with its terms.

 

*              *              *

 

A. We express no opinion as to the laws of any jurisdiction other than the Included Laws. We have made no special investigation or review of any published constitutions, treaties, laws, rules or regulations or judicial or administrative decisions (“Laws”), other than a review of (i) the Laws of the State of New York, and (ii) the Federal Laws of the United States of America. For purposes of this opinion, the term “Included Laws” means the items described in clauses (i) and (ii) of the preceding sentence that are, in our experience, normally applicable to transactions of the type contemplated by the Loan Documents. The term Included Laws specifically excludes Laws of any counties, cities, towns, municipalities and special political subdivisions and any agencies thereof and Laws relating to land use, zoning and building code issues, taxes, environmental issues, intellectual property Laws, antitrust issues and securities law issues.

 

B. When used in this opinion, the phrases “known to us”, “to our knowledge” and similar phrases (i) mean the conscious awareness of facts or other information by (a) the lawyer in our firm who signed this letter, (b) any lawyer in our firm actively involved in negotiating and preparing the Loan Documents and (c) solely as to information relevant to a particular opinion, issue or confirmation regarding a particular factual matter, any lawyer in our firm who is primarily responsible for providing the response concerning that particular opinion, issue or confirmation, and (ii) do not require or imply (a) any examination of this firm’s, such lawyer’s or any other person’s or entity’s files, (b) that any inquiry be made of the client, any lawyer (other than the lawyers described above), or any other person or entity, or (c) any review or examination of any agreements, documents, certificates, instruments or other papers (including, but not limited to, the exhibits and schedules to the Loan Documents and the various papers referred to in or contemplated by the Loan Documents and the respective exhibits and schedules thereto) other than the Loan Documents.

 

C. The matters expressed in this opinion are subject to and qualified and limited by (i) applicable bankruptcy, insolvency, fraudulent transfer and conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally; (ii) general principles of equity, (regardless of whether enforcement is sought in a proceeding at law or in equity); (iii) principals of commercial reasonableness and unconscionability and an implied covenant of good faith and fair dealing; (iv) the power of the courts to award damages in lieu of equitable remedies; and (v) securities Laws and public policy underlying such Laws with respect to rights to indemnification and contribution. Although it appears that the requirements of Section 5-1401 of the New York General Obligations Law have been met, we express no opinion on whether the choice of law provision in Section 8.09 of the Credit Agreement or in each Guaranty or Note would raise any issues under the United States constitution or in equity that would affect whether courts in New York would enforce the choice of New York law to govern the Credit Agreement or such Guaranty or Note. We have also assumed that the choice of law of the State of New York as the governing law of the Credit Agreement and each Guaranty and Note would not result in a violation of an important public policy of another state having greater contacts with the transactions contemplated by the Loan Documents than the State of New York

 

D. This opinion and the matters addressed herein are as of the date hereof or such earlier date as is specified herein, and we undertake no, and hereby disclaim any, obligation to advise you of any change in any matter set forth herein, whether based on a change in the law, a change in any fact relating to any Borrower or any other Person, or any other circumstance occurring after the date hereof. This opinion is limited to the matters expressly stated herein and no opinions are to be inferred or may be implied beyond the opinions expressly set forth herein.

 

E. We have assumed that no fraud, dishonesty, forgery, coercion, duress or breach of fiduciary duty exists with respect to any of the matters relevant to this opinion.

 

F. We express no opinion as to (i) the compliance of the transactions contemplated by the Loan Documents with any regulations or governmental requirements applicable to any Person other than the Borrowers; (ii) the financial condition or solvency of any Borrower; (iii) the ability (financial or otherwise) of any Borrower or any other Person to meet its obligations under the Loan Documents; (iv) the compliance of the Loan Documents or the transactions contemplated thereby with, or the effect on any of the foregoing with respect to, the antifraud provisions of the Federal and state securities Laws, rules and regulations; or (v) the conformity of the Loan Document to any term sheet or commitment letter.

 

G. We express no opinion with respect to any provisions of the Credit Agreement or any Guaranty that purport to grant:

 

i.

a “consent to jurisdiction” or “waiver of inconvenient forum” in connection with any legal proceedings, insofar as such provisions relate to federal courts (except as to the personal jurisdiction thereof); and

 

ii.

a waiver of trial by jury insofar as such provision is sought to be enforced in a federal court.

 

H. For purposes of this letter, the phrase “transactions of the type contemplated by the Loan Documents” and similar phrases mean (i) the issuance of Advances and Letters of Credit by the banks party to the Credit Agreement and (ii) the performance by the Borrowers of their obligations under the Loan Documents.

 

I. This opinion is solely for your benefit, and no other Person shall be entitled to rely upon this opinion, except that ▇▇▇▇ ▇. Benz, Esq. may rely on this opinion, in connection with his opinion to you of even date herewith, to the extent it relates to matters that involve the Included Laws, with respect to the Loan Documents and the transactions contemplated thereby. Without our prior written consent, this opinion may not be quoted in whole or in part or otherwise referred to in any document and may not be furnished or otherwise disclosed to or used by any other Person, except for (i) delivery of copies hereof to counsel for the addressees hereof and (ii) inclusion of copies hereof in a closing file.

 

J. This law firm is a registered limited liability partnership organized under the laws of the State of Texas.

 

Very truly yours,

 

 

AKIN GUMP ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP

 

June 14, 2005

Citicorp USA, Inc., as administrative agent, Citicorp USA, Inc. (or one of its Affiliates) as a fronting bank, Barclays Bank PLC, as a fronting bank, and the other fronting banks, the swing line lenders and the lenders party to the Credit Agreement defined below

Re: FirstEnergy Corp., FirstEnergy Solutions Corp., American Transmission Systems, Incorporated, Ohio Edison Company, Pennsylvania Power Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company, Jersey Central Power & Light Company, Metropolitan Edison Company, and Pennsylvania Electric Company

Ladies and Gentlemen:

 

We have acted as special New York counsel to Citicorp USA, Inc., individually and as administrative agent (the “Administrative Agent”), in connection with the preparation, execution and delivery of the Credit Agreement, dated as of June 14, 2005 (the “Credit Agreement”), among FirstEnergy Corp., an Ohio corporation (“FE”), FirstEnergy Solutions Corp., an Ohio corporation (“FES”), American Transmission Systems, Incorporated, an Ohio corporation (“ATSI”), Ohio Edison Company, an Ohio corporation (“OE”), Pennsylvania Power Company, a Pennsylvania corporation (“Penn”), The Cleveland Electric Illuminating Company, an Ohio corporation (“CEI”), The Toledo Edison Company, an Ohio corporation (“TE”), Jersey Central Power & Light Company, a New Jersey corporation (“JCP&L”), Metropolitan Edison Company, a Pennsylvania corporation (“Met-Ed”), and Pennsylvania Electric Company, a Pennsylvania corporation (“Penelec”, and together with FE, FES, ATSI, OE, Penn, CEI, TE, JCP&L and Met-Ed, the “Borrowers”), Citicorp USA, Inc., as Administrative Agent for the Lenders thereunder, Citicorp USA, Inc., as a fronting bank, Barclays Bank PLC, as a fronting bank, the other fronting banks party thereto, the swing line lenders party thereto and the Banks party thereto. Unless otherwise defined herein, terms defined in the Credit Agreement are used herein as therein defined. This opinion is being delivered pursuant to Section 3.01(a)(vii) of the Credit Agreement.

 

In that connection, we have examined (i) counterparts of the Credit Agreement, executed by the Borrowers, the Banks, the Swing Line Lenders, the Administrative Agent and the Fronting Banks, (ii) a form of the Notes and (iii) the other documents furnished to the Administrative Agent pursuant to Section 3.01(a) of the Credit Agreement, including (without limitation) the opinions of ▇▇▇▇ ▇. Benz, Esq., counsel to the Borrowers, and Akin Gump ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, special counsel to the Borrowers (such opinions referred to hereinafter, collectively, as the “Borrowers’ Counsel Opinions”).

 

In our examination of the documents referred to above, we have assumed the authenticity of all such documents submitted to us as originals, the genuineness of all signatures, the due authority of the parties executing such documents and the conformity to the originals of all such documents submitted to us as copies. We have also assumed that each of the Banks, the Swing Line Lenders, the Fronting Banks and the Administrative Agent have duly executed and delivered, with all necessary power and authority (corporate and otherwise), the Credit Agreement. We have further assumed that you have evaluated, and are satisfied with, the creditworthiness of the Borrowers and the business and financial terms evidenced by the Loan Documents.

 

To the extent that our opinions expressed below involve conclusions as to matters governed by law other than the law of the State of New York and the Federal law of the United States, we have relied upon the Borrowers’ Counsel Opinions and have assumed without independent investigation the correctness of the matters set forth therein, our opinions expressed below being subject to the assumptions, qualifications and limitations set forth in the Borrowers’ Counsel Opinions. As to matters of fact, we have relied solely upon the documents we have examined. We note that we do not represent the Borrowers, and accordingly, are not privy to the nature or character of their business. Accordingly, we have assumed that the Borrowers are subject only to statutes, rules, regulations, judgments, orders and other requirements of law generally applicable to corporations doing business in the State of New York.

 

Based upon the foregoing, and subject to the qualifications set forth below, we are of the opinion that:

 

(i) The Credit Agreement is, and each of the Notes when executed and delivered for value received will be, the legal, valid and binding obligation of each Borrower enforceable against each Borrower in accordance with their respective terms.

 

(ii) While we have not independently considered the matters covered by the Borrowers’ Counsel Opinions to the extent necessary to enable us to express the conclusions stated therein, each of the Borrowers’ Counsel Opinions and the other documents furnished to the Administrative Agent pursuant to Section 3.01(a) of the Credit Agreement are substantially responsive to the corresponding requirements set forth in Section 3.01(a) of the Credit Agreement pursuant to which the same have been delivered.

 

Our opinions are subject to the following qualifications:

 

(a) Our opinion in paragraph (i) above is subject to the effect of any applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar law affecting creditors’ rights generally.

 

(b) Our opinion in paragraph (i) above is subject to the effect of general principles of equity, including (without limitation) concepts of materiality, reasonableness, good faith and fair dealing (regardless of whether considered in a proceeding in equity or at law).

 

(c) We note further that, in addition to the application of equitable principles described above, courts have imposed an obligation on contracting parties to act reasonably and in good faith in the exercise of their contractual rights and remedies, and may also apply public policy considerations in limiting the right of parties seeking to obtain indemnification under circumstances where the conduct of such parties in the circumstances in question is determined to have constituted negligence.

 

(d) We express no opinion herein as to (i) Section 8.06 of the Credit Agreement, (ii) the enforceability of provisions purporting to grant to a party conclusive rights of determination, (iii) the availability of specific performance or other equitable remedies, (iv) the enforceability of rights to indemnity under Federal or state securities laws and (v) the enforceability of waivers by parties of their respective rights and remedies under law.

 

(e) Our opinion in paragraph (i) is limited to the law of the State of New York and the Federal law of the United States, and we do not express any opinion herein concerning any other law. Without limiting the generality of the foregoing, we express no opinion as to the effect of the law of any jurisdiction other than the State of New York wherein any Lender may be located or wherein enforcement of the Credit Agreement or the Notes may be sought that limits the rates of interest legally chargeable or collectible.

 

The foregoing opinion is solely for your benefit and may not be relied upon by any other Person other than any Person that may become a Lender under the Credit Agreement after the date hereof.

 

Very truly yours,

MEO:VGS:gat