Master Facility Lease

Exhibit 10-11 [Execution Copy]


MASTER FACILITY LEASE


Dated as of January 1, 2001

between


OHIO EDISON COMPANYPENNSYLVANIA POWER COMPANYTHE CLEVELAND ELECTRIC ILLUMINATING COMPANYTHE TOLEDO EDISON COMPANY
Lessors


and


FIRSTENERGY GENERATION CORP.,
Lessee


TABLE OF CONTENTS Page Section 1. Definitions 4 Section 2.Lease of the Transferred Property; Term; Description85. 4 (a) Lease of the Transferred Property 4 (b) Term 4 (c) Description 4 Section 3.Rent 4 (a) Rent 4 (b) Manner of Payment 5 Section 4.Net Lease 5 Section 5.Return of the Transferred Property 6 (a) Return of the Transferred Property 6 (b) Disposition Services 6 Section 6.Warranty of the Lessors 6 (a) Quiet Enjoyment 6 (b) Disclaimer of Other Warranties 6 (c) Enforcement of Certain Warranties 7 Section 7.Liens 7 Section 8.Operation and Maintenance; Inspection; Capital Improvements 7 (a) Operation and Maintenance 7 (b) Inspection 7 (c) Capital Improvements 7 (d) Reports 8 (e) Title to Capital Improvements 8 Section 9.Damage or Loss 8 (a) Damage or Loss 8 (b) Repair 8 (c) Application of Payments 8 (i) Other Dispositions 8 Section 10.Insurance 8 (a) Required Insurance 8 (b) Permitted Insurance 9 Section 11.Rights to Assign or Sublease 9 (a) Assignment or Sublease by the Lessee10 Section 12.Purchase Option10 (a) Purchase Option10 (b) Purchase of the Transferred Property; Payment, Etc.10 Section 13.Events of Default10


Section 14.Remedies11 (a) Remedies11 (b) No Release12 (c) Remedies Cumulative12 (d) Exercise of Other Rights or Remedies12 Section 15.Notices12 Section 16.Successors and Assigns13 Section 17.Right to Perform for Lessee14 Section 18.Amendments and Miscellaneous14 (a) Amendments in Writing14 (b) Survival14 (c) Severability of Provisions14 (d) True Lease14 (e) Governing Law14 (f) Headings14 (g) Counterpart Execution14 14Section 19Special Termination14


MASTER FACILITY LEASE

This MASTER FACILITY LEASE, dated as of January 1, 2001 between OHIO EDISON COMPANY, an Ohio corporation (the e5OE Lessore6), PENNSYLVANIA POWER COMPANY, a Pennsylvania corporation (the e5PP Lessore6), THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, an Ohio corporation (the e5CEI Lessore6), THE TOLEDO EDISON COMPANY, an Ohio corporation (the e5TE Lessore6) (collectively the e5Lessorse6) and FIRSTENERGY GENERATION CORP., an Ohio corporation (the e5 Lesseee6).

W I T N E S S E T H :

WHEREAS, the Lessors own the Transferred Property in their individual capacity or as tenants in common;
WHEREAS, the Lessee desires to lease from the Lessors the Transferred Property on the terms and conditions set forth herein; and
WHEREAS, the Lessors are willing to lease the Transferred Property to the Lessee on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and of other good and valuable consideration, receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Definitions .
For purposes hereof, capitalized terms used herein shall have the meanings assigned to such terms in Appendix A hereto. References in this Master Facility Lease to sections, paragraphs and clauses are to sections, paragraphs and clauses in this Master Facility Lease unless otherwise indicated.
Section 2. Lease of the Transferred Property; Term.
(a) Lease of the Transferred Property . Upon the terms and subject to the conditions of this Master Facility Lease, the Lessors hereby lease to the Lessee, and the Lessee hereby leases from the Lessors, the Transferred Property.
(b) Term . The term of this Master Facility Lease shall begin on the date hereof and shall end on the last day of the Lease Term. (c) Description . The Transferred Property is scheduled on Exhibit A for OE Lessor property, Exhibit B for PP Lessor property, Exhibit C for CEI Lessor property and Exhibit D for TE Lessor property. Section 3. Rent .
(a) Rent . The Lessee shall pay to the Lessors, as rent (herein referred to as e5 Rente6) for the Transferred Property, on June 30, 2001, and on each December 31 and June 30 thereafter to and including the last day of the Lease Term, payments as indicated on Exhibit A for OE Lessor property, Exhibit B for PP Lessor property, Exhibit C for CEI Lessor property and Exhibit D for TE Lessor property.
The Lessors shall have all rights, powers, and remedies provided for in this Master Facility Lease, at law, in equity or otherwise, in the case of non-payment of Rent.

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(b) Manner of Payment . Each payment of Rent under this Master Facility Lease shall be made on the date each such payment shall be due and payable hereunder and shall be paid either to the Lessors at their addresses determined in accordance with Section 17, or at such other addresses as the Lessors may direct by notice in writing to the Lessee. If the date on which any payment of Rent is due hereunder shall not be a Business Day, the payment otherwise due thereon shall be due and payable on the next Business Day, with the same force and effect as if paid on the nominal date provided in this Master Facility Lease.
Section 4. Net Lease .
This Master Facility Lease (as originally executed and as modified, supplemented and amended from time to time) is a net lease and the Lessee hereby acknowledges and agrees that the Lessee' s obligation to pay all Rent hereunder, and the right of the Lessors in and to such Rent, shall be absolute, unconditional and irrevocable and shall not be affected by any circumstances of any character, including, without limitation, (i) any set-off, abatement, counterclaim, suspension, recoupment, reduction, rescission, defense or other right or claim which the Lessee may have against any of the Lessors, any vendor or manufacturer of any equipment or assets included in the Transferred Property, any Capital Improvement, or any other Person for any reason whatsoever, (ii) any defect in or failure of the title, merchantability, condition, design, compliance with specifications, operation or fitness for use of all or any part of the Transferred Property or any Capital Improvement, (iii) any damage to, or removal, abandonment, shutdown, salvage, scrapping, requisition, taking, condemnation, loss, theft or destruction of all or any part of the Transferred Property, any Capital Improvement, or any interference, interruption or cessation in the use or possession thereof or of the Transferred Property by the Lessee or by any other for any reason whatsoever or of whatever duration, (iv) any restriction, prevention or curtailment of or interference with any use of all or any part of the Transferred Property, or any Capital Improvement, (v) any insolvency, bankruptcy, reorganization or similar proceeding by or against the Lessee, the Lessors, or any other Person, (vi) the invalidity, illegality or unenforceability of this Master Facility Lease or any other instrument referred to herein or any other infirmity herein or therein or any lack of right, power or authority of the Lessors, the Lessee or any other Person to enter into this Master Facility Lease or any other instrument referred to herein or to perform the obligations thereunder or the transactions contemplated thereby or any doctrine of force majeure, impossibility, frustration, failure of consideration, or any similar legal or equitable doctrine that the Lessee' s obligation to pay Rent is excused because the Lessee has not received or will not receive the benefit for which the Lessee bargained, it being the intent of the Lessee to assume all risks from all causes whatsoever that the Lessee does not receive such benefit, (vii) the breach or failure of any warranty or representation made in this Master Facility Lease or any instrument referred to herein by the Lessor or any other Person, (viii) any amendment or other change of, or any assignment of rights under this Master Facility Lease or any instrument referred to herein, or any waiver, action or inaction under or in respect of this Master Facility Lease or any instrument referred to herein or any exercise or nonexercise of any right or remedy under this Master Facility Lease or any instrument referred to herein, including, without limitation, the exercise of any foreclosure or other remedy under this Master Facility Lease, any Capital Improvement, the Transferred Property, or any part thereof or any interest therein, or (ix) any other circumstance or happening whatsoever whether or not similar to any of the foregoing. The Lessee acknowledges that by conveying the leasehold estate created by this Master Facility Lease to the Lessee and by putting the Lessee in possession of the Transferred Property the Lessors have performed all of the Lessors' obligations under and in respect of this Master Facility Lease, except the covenant contained in Section 6(a). The Lessee hereby waives, to the extent permitted by Applicable Law, any and all rights, which it may now have or which at any time hereafter may be conferred upon it, by statute or otherwise, to terminate, cancel, quit or surrender this Master Facility Lease or to effect or claim any diminution or reduction of Rent payable by the Lessee hereunder, except in accordance with the express terms hereof. Each payment of Rent made by the Lessee hereunder shall be final and the Lessee shall not seek or have any right to recover all or any part of such payment from the Lessors or any other Person for any reason whatsoever. All covenants, agreements and undertakings of the Lessee herein shall be performed at its cost, expense and risk unless expressly otherwise stated. Without limiting the generality of this Section 4, the Lessee will reimburse the Lessors for any insurance and property taxes that may be paid by the Lessors with respect to the Transferred
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Property and for any expenses, including attorney fees, incurred by the Lessors in challenging the imposition of any such property taxes. Nothing in this Section 4 or elsewhere shall be construed as a guaranty by the Lessee of any residual value in the Transferred Property.
Section 5. Return of the Transferred Property .
(a) Return of the Transferred Property . Unless the Lessee has theretofore acquired the Transferred Property as provided in Section 12, on the Lease Termination Date, the Lessee will surrender possession of the Transferred Property to the Lessors. At the time of such return the Lessee shall pay or have paid all amounts due and payable, or to become due and payable, which are allocable or chargeable (whether or not payable during or after the Lease Term) to the Transferred Property in respect of any period or periods ending on or prior to the Lease Termination Date (including, but without limitation, all amounts payable with respect to any and all Capital Improvements paid by the Lessors relating to the Transferred Property prior to the end of the Lease Term), and the Transferred Property shall be free and clear of all Liens (other than Permitted Liens) and in the condition and state of repair required by Section 8.
(b) Disposition Services . The Lessee agrees that if it does not exercise its Option to purchase as provided in Section 12, then the Lessee will fully cooperate with the Lessors in connection with the Lessors' efforts to lease or dispose of the Transferred Property including using the Lessee' s reasonable efforts to lease or dispose of the Transferred Property. The Lessors agree to reimburse the Lessee for reasonable out-of-pocket costs and expenses of the Lessee incurred at the request of the Lessors in connection with such cooperation and such efforts, but only to the extent of proceeds actually received by the Lessors.
Section 6. Warranty of the Lessors .
(a) Quiet Enjoyment . Subject to Section 19, the Lessors warrant that unless an Event of Default has occurred and is continuing the Lessee' s use and possession of the Undivided Interests in the Transferred Property in accordance with the terms hereof shall not be interrupted by the Lessors or any Person claiming by, through or under the Lessors and their respective successors and assigns (other than as provided for with respect to the Permitted Liens)
(b) Disclaimer of Other Warranties . The warranty set forth in Section 6 (a) is in lieu of all other warranties of the Lessors, whether written, oral or implied, with respect to this Master Facility Lease, any Capital Improvement, or the Transferred Property. As between the Lessors and the Lessee, execution by the Lessee of this Master Facility Lease shall be conclusive proof of the compliance of the Transferred Property (including any Capital Improvement) with all requirements of this Master Facility Lease, and the Lessee acknowledges and agrees that (i) THE LESSORS ARE NOT MANUFACTURERS OR DEALERS IN PROPERTY OF SUCH KIND, (ii) THE LESSORS LEASE AND THE LESSEE TAKES THE TRANSFERRED PROPERTY, AND SHALL TAKE ANY APPLICABLE CAPITAL IMPROVEMENT AND ANY PART THEREOF, AND (iii) THE LESSORS SHALL NOT BE DEEMED TO HAVE MADE, AND THE LESSORS DISCLAIM, ANY OTHER REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE DESIGN OR CONDITION OF THE TRANSFERRED PROPERTY, ANY CAPITAL IMPROVEMENT, THE MERCHANTABILITY THEREOF OR THE FITNESS THEREOF FOR ANY PARTICULAR PURPOSE, TITLE TO THE TRANSFERRED PROPERTY, ANY CAPITAL IMPROVEMENT, THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREOF OR CONFORMITY THEREOF TO SPECIFICATIONS, FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT OR THE ABSENCE OF ANY LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, NOR SHALL THE LESSORS BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING LIABILITY IN TORT, STRICT OR OTHERWISE), it being agreed that all such risks, as between the Lessors and the Lessee, are to be borne by the Lessee. The provisions of this Section 6(b) have been negotiated, and, except to the extent otherwise expressly provided in Section 6(a), the foregoing provisions are intended to be a complete exclusion and negation of any representations or warranties by the Lessors, express or implied,
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with respect to the Transferred Property (including any Capital Improvement), that may arise pursuant to any law now or hereafter in effect, or otherwise.
(c) Enforcement of Certain Warranties . The Lessors authorize the Lessee (directly or through agents), at the Lessee' s expense, to assert for the Lessors' accounts, during the Lease Term, all of the Lessors' rights (if any) under any applicable warranty and any other claims (under this Master Facility Lease) that the Lessee or the Lessors may have against any vendor or manufacturer with respect to the Transferred Property (including any Capital Improvement), and the Lessors agree to cooperate, at the Lessee' s expense, with the Lessee and any Agent in asserting such rights.
Section 7. Liens .
The Lessee will not directly or indirectly create, incur, assume or permit to exist any Lien except Permitted Liens on or with respect to the Transferred Property, the Lessors' respective title thereto or any interest of the Lessors or Lessee therein (and the Lessee will promptly, at its own expense, take such action as may be necessary duly to discharge any such Lien, except Permitted Liens).
Section 8. Operation and Maintenance; Inspection; Capital Improvements .
(a) Operation and Maintenance . The Lessee shall have unrestricted access to the Transferred Property and will (A) maintain the Transferred Property in such condition that the Transferred Property will have the capacity and functional ability to perform, on a continuing basis (ordinary wear and tear excepted), in normal commercial operation, the functions and substantially at the ratings for which it was designed, (B) operate, service, maintain and repair the Transferred Property and replace all necessary or useful parts and components thereof so that the condition and operating efficiency will be maintained and preserved, ordinary wear and tear excepted, in all material respects in accordance with (1) Good Utility Practice for items of similar size and nature, (2) such operating standards as shall be required to take advantage of and enforce all available warranties and (3) the terms and conditions of all insurance policies maintained in effect at any time with respect thereto, and (C) use, possess, operate and maintain the Transferred Property in compliance with all Mortgage Requirements and with all material applicable Governmental Actions (including any applicable License) affecting the Transferred Property or the use, possession, operation and maintenance thereof. The Lessee will comply with all its obligations under Applicable Law affecting the Transferred Property, and the use, operation and maintenance thereof. As between the Lessors and the Lessee, the Lessors shall not be obliged in any way to maintain, alter, repair, rebuild or replace the Transferred Property or any part thereof, or to pay the cost of alteration, rebuilding, replacement, repair or maintenance of the Transferred Property or any part thereof, and the Lessee expressly waives the right to perform any such action at the expense of the Lessors pursuant to any law at any time in effect.
(b) Inspection . The Lessors (or authorized representatives with appropriate security clearance, if necessary) shall have the right to inspect the Transferred Property (subject, in each event, to Applicable Law, applicable confidentiality undertakings which have been established and established procedures) at their expense. The Lessors shall not have any duty whatsoever to make any inspection, or inquiry referred to in this Section 8 (b) and shall not incur any liability or obligation by reason of not making any such inspection or inquiry.
(c) Capital Improvements . The Lessee shall, at its sole expense, promptly participate in the making of any required Capital Improvement to the Transferred Property. The interests of the Lessors in Transferred Property at any time removed shall continue, no matter where located, until such time as a Capital Improvement constituting a replacement of such property shall have been installed or such removed property has been disposed of. Simultaneously with such disposition, title to the removed property shall vest in the Person receiving such property, and upon the release of the Permitted Liens if necessary, free and clear of any and all claims or rights of the Lessors. Upon the incorporation of a Capital Improvement which constitutes a replacement of Transferred Property without further act, (i) title to such Capital Improvement shall vest in the Lessors in the same proportion as their title to the property replaced and (ii) such Capital Improvement shall become subject to this Master Facility ...