[Execution
Copy]
Exhibit
10.1
PP NUCLEAR
SUBSCRIPTION AND CAPITAL CONTRIBUTION AGREEMENT
by and
between
PENNSYLVANIA POWER
COMPANY
and
FIRSTENERGY
NUCLEAR GENERATION CORP.
SUBSCRIPTION AND
CAPITAL CONTRIBUTION AGREEMENT , dated
as of May 10, 2005 between Pennsylvania Power Company, a
Pennsylvania corporation ("Penn Power") and FirstEnergy Nuclear
Generation Corp., an Ohio corporation ("Nuclear Genco").
R E C I T A L
S
WHEREAS, Penn Power wishes to
subscribe for 100 shares of common stock, without par value, of
Nuclear Genco (the "Shares"); and
WHEREAS, Nuclear Genco
desires to accept the subscription for the Shares in consideration
for Penn Power’s Contribution to Nuclear Genco of the
Contributed Assets (in each case as defined below) on the terms and
conditions set forth herein; and
WHEREAS, the Board of
Directors of Penn Power and Nuclear Genco have each approved Penn
Power’s subscription for the Shares and the contribution by
Penn Power of all of Penn Power’s right, title and interest
in and to its undivided ownership interests in (a) Units Nos. 1 and
2 of the Beaver Valley Nuclear Power Plant, (b) the Beaver Valley
Nuclear Power Plant Common Facilities, (c) the Perry Nuclear Power
Plant and associated decommissioning trust funds, and (d) certain
other assets associated therewith (the "Other Nuclear Assets"), all
as more specifically described in Annex A and in Annex C hereto
(collectively, the "Contributed Assets"), together with Penn
Power’s transfer and assignment to Nuclear Genco of all of
Penn Power’s rights, liabilities and obligations in respect
of $63,650,000 aggregate principal amount of outstanding pollution
control revenue bonds with respect to the Contributed Assets (as
more specifically described in Annex B hereto) and other included
liabilities as more specifically described in Annex C
(collectively, the "Transferred Liabilities", and together with the
Contributed Assets, the "Contribution"); and
WHEREAS, each of the parties
hereto has agreed to execute and deliver all such agreements,
certificates and other documents as they deem necessary or
desirable to implement the Contribution, with such terms,
conditions, modifications, amendments or alterations as the
officers executing the same shall approve as necessary or
desirable, such approval to be conclusively established by their
execution thereof, and to take all actions necessary or desirable
in order to enable the parties to fulfill their obligations under
such agreements, certificates and other documents; and
WHEREAS, each of the parties
hereto has determined that the Contribution is in its best
interests.
NOW, THEREFORE, in
consideration of the premises and intending to be legally bound
hereby, the parties hereto agree as follows:
1.
Subscription for
Shares. Subject to the terms and conditions hereof,
Penn Power hereby agrees to subscribe for the Shares, and Nuclear
Genco hereby agrees to accept the subscription and the Contribution
of the Contributed Assets and to assume the Transferred Liabilities
in consideration for its issuance of the Shares and the Note (as
defined below) to Penn Power. The parties hereby acknowledge and
agree that the value of the Contribution will be the book value
thereof, less accumulated depreciation, of the Contributed Assets
as shown on Penn Power’s balance sheet as of the end of the
fiscal quarter immediately preceding the Contribution Date,
less the agreed upon value of the Transferred Liabilities as
of the Contribution Date.
2.
Promissory
Note. In further consideration for
the Contribution of the Contributed Assets, Nuclear Genco hereby
agrees to issue to Penn Power a promissory note (the "Note"),
substantially in the Form of Exhibit A hereto, in a principal
amount equal to the value of the Other Plant Assets less the amount
of the Assumed Liabilities (as defined in paragraph 4c
below).
3.
Effectiveness of
Transaction.
a.
Nuclear Genco
agrees to issue the Shares and the Note to Penn Power and Penn
Power agrees to accept the Shares and the Note and to make the
Contribution as promptly as practicable following receipt of all
necessary regulatory authorizations and other consents and
approvals as may be necessary, appropriate or advisable to
consummate the transactions contemplated hereby.
b.
The parties
hereby agree that the Contribution shall, to the extent they deem
appropriate, be further evidenced and effected through the taking
of all such additional actions and the execution of all
instruments, agreements and documents of transfer, including
without limitation such deeds, assignment and assumption
agreements, releases and other documents as may
