Exhibit 10.7

U.S. $125,000,000

THREE-YEAR CREDIT AGREEMENT

Dated as of October 23, 2003

Among

OHIO EDISON COMPANY,
as Borrower,

THE BANKS NAMED HEREIN,
as Banks,

CITIBANK, N.A.
as Administrative Agent

CITIGROUP GLOBAL MARKETS INC.
and
BARCLAYS CAPITAL
Joint Lead Arrangers

BARCLAYS BANK PLC
and
BANK ONE CAPITAL MARKETS, INC.
Co-Syndication Agents

J.P. MORGAN SECURITIES INC.
and
WACHOVIA BANK, NATIONAL ASSOCIATION
Co-Documentation Agents

MORGAN STANLEY BANK
Senior Managing Agent

KEYBANK NATIONAL ASSOCIATION
and
THE BANK OF NEW YORK
Managing Agents

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TABLE OF CONTENTS

                      Page ARTICLE I
        DEFINITIONS AND ACCOUNTING TERMS
       
 
           
SECTION 1.01.
  Certain Defined Terms     1  
SECTION 1.02.
  Computation of Time Periods     12  
SECTION 1.03.
  Accounting Terms     12  
SECTION 1.04.
  Certain References     12  
 
            ARTICLE II
        AMOUNTS AND TERMS OF THE ADVANCES
       
 
           
SECTION 2.01.
  The Advances     12  
SECTION 2.02.
  Making the Advances     13  
SECTION 2.03.
  Fees     14  
SECTION 2.04.
  Termination or Reduction of the Commitments     14  
SECTION 2.05.
  Repayment of Advances     15  
SECTION 2.06.
  Interest on Advances     15  
SECTION 2.07.
  Additional Interest on Advances     15  
SECTION 2.08.
  Interest Rate Determination     16  
SECTION 2.09.
  Conversion of Advances     17  
SECTION 2.10.
  Prepayments     18  
SECTION 2.11.
  Increased Costs     18  
SECTION 2.12.
  Illegality     19  
SECTION 2.13.
  Payments and Computations     19  
SECTION 2.14.
  Taxes     21  
SECTION 2.15.
  Sharing of Payments, Etc     22  
SECTION 2.16.
  Noteless Agreement; Evidence of Indebtedness     22  
 
            ARTICLE III
        CONDITIONS OF LENDING
       
 
           
SECTION 3.01.
  Conditions Precedent to Initial Advances     23  
SECTION 3.02.
  Conditions Precedent to Each Advance     25  
SECTION 3.03.
  Conditions Precedent to Conversions     25  
 
            ARTICLE IV
        REPRESENTATIONS AND WARRANTIES
       
 
           
SECTION 4.01.
  Representations and Warranties of the Borrower     26  

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                      Page ARTICLE V
        COVENANTS OF THE BORROWER
       
 
           
SECTION 5.01.
  Affirmative Covenants of the Borrower     29  
SECTION 5.02.
  Financial Covenants of the Borrower     32  
SECTION 5.03.
  Negative Covenants of the Borrower     33  
 
            ARTICLE VI
        EVENTS OF DEFAULT
       
 
           
SECTION 6.01.
  Events of Default     34  
 
            ARTICLE VII
        THE AGENT
       
SECTION 7.01.
  Authorization and Action     37  
SECTION 7.02.
  Agent’s Reliance, Etc     37  
SECTION 7.03.
  Citibank and Affiliates     38  
SECTION 7.04.
  Lender Credit Decision     38  
SECTION 7.05.
  Indemnification     38  
SECTION 7.06.
  Successor Agent     39  
 
            ARTICLE VIII
        MISCELLANEOUS
       
 
           
SECTION 8.01.
  Amendments, Etc     39  
SECTION 8.02.
  Notices, Etc     40  
SECTION 8.03.
  No Waiver; Remedies     40  
SECTION 8.04.
  Costs and Expenses; Indemnification     40  
SECTION 8.05.
  Right of Set-off     41  
SECTION 8.06.
  Binding Effect     42  
SECTION 8.07.
  Assignments and Participations     42  
SECTION 8.08.
  Governing Law     46  
SECTION 8.09.
  Consent to Jurisdiction; Waiver of Jury Trial     46  
SECTION 8.10.
  Severability     46  
SECTION 8.11.
  Entire Agreement     46  
SECTION 8.12.
  Execution in Counterparts     47  

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EXHIBITS

         
Exhibit A
  -   Form of Note
Exhibit B
  -   Form of Notice of Borrowing
Exhibit C
  -   Form of Assignment and Acceptance
Exhibit D
  -   Form of Opinion of Gary D. Benz, Esq.
Exhibit E
  -   Form of Opinion of Pillsbury Winthrop LLP
Exhibit F
  -   Form of Opinion of King & Spalding LLP

 
SCHEDULES

         
Schedule I
  -   List of Commitments and Lending Offices
Schedule II
  -   Litigation

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THREE-YEAR CREDIT AGREEMENT

     THREE-YEAR CREDIT AGREEMENT, dated as of October 23, 2003, among OHIO
EDISON COMPANY, an Ohio corporation (the “Borrower”), the lenders (the “Banks”)
listed on the signature pages hereto and Citibank, N.A. (“Citibank”), as
Administrative Agent (the “Administrative Agent”) for the Lenders hereunder.

PRELIMINARY STATEMENTS

     The Borrower has requested that the Banks provide to the Borrower a
$125,000,000 unsecured revolving loan facility for general corporate purposes.
The Lenders have indicated their willingness to agree to lend such amount on the
terms and conditions of this Agreement.

     NOW, THEREFORE, in consideration of the premises, the parties hereto agree
as follows:

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

     SECTION 1.01. Certain Defined Terms.

     As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):

     “Advance” means an advance by a Lender to the Borrower as part of a
Borrowing and refers to an Alternate Base Rate Advance or a Eurodollar Rate
Advance, each of which shall be a “Type” of Advance, subject to Conversion
pursuant to Section 2.08 or 2.09.

     “Affiliate” means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person.

     “Agreement” means this Three-Year Credit Agreement, as amended, modified
and supplemented from time to time.

     “Alternate Base Rate” means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time, which rate per annum shall at
all times be equal to the higher of (i) the rate of interest announced publicly
by Citibank in New York, New York, from time to time, as Citibank’s “base rate”
and (ii) the sum of 1/2 of 1% per annum plus the Federal Funds Rate in effect
from time to time.

     “Alternate Base Rate Advance” means an Advance that bears interest as
provided in Section 2.06(a).

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     “Applicable Law” means all applicable laws, statutes, treaties, rules,
codes, ordinances, regulations, permits, certificates, orders, interpretations,
licenses and permits of any Governmental Authority and judgments, decrees,
injunctions, writs, orders or like action of any court, arbitrator or other
judicial or quasi-judicial tribunal of competent jurisdiction (including those
pertaining to health, safety or the environment or otherwise).

     “Applicable Lending Office” means, with respect to each Lender, such
Lender’s Domestic Lending Office in the case of an Alternate Base Rate Advance,
and such Lender’s Eurodollar Lending Office in the case of a Eurodollar Rate
Advance.

     “Applicable Margin” means, for any Alternate Base Rate Advance or any
Eurodollar Rate Advance, the interest rate per annum set forth in the relevant
row of the table below, determined by reference to the Reference Ratings from
time to time in effect:

                                                                           
LEVEL 2     LEVEL 3     LEVEL 4                           Reference    
Reference     Reference                 LEVEL 1     Ratings less     Ratings
less     Ratings less                 Reference     than Level 1     than Level
2     than Level 3     LEVEL 5           Ratings at least     but at least    
but at least     but at least     Reference           BBB+ by S&P     BBB by S&P
    BBB- by S&P     BB+ by S&P     Ratings lower           andBaa1 By    
andBaa2 by     andBaa3 by     andBa1 by     than Level 4 or     BASIS FOR
PRICING     Moody’s.     Moody’s.     Moody’s.     Moody’s.     unrated.    
Applicable Margin for
Eurodollar Rate
Advances
      0.725 %       0.825 %       1.125 %       1.625 %       2.000 %    
Applicable Margin for
Alternate Base Rate
Advances
      0 %       0 %       0.125 %       0.625 %       1.000 %    
Utilization Fee for
Eurodollar Rate
Advances
      0.125 %       0.125 %       0.125 %       0.125 %       0.125 %    
Utilization Fee for
Alternate Base Rate
Advances
      0 %       0 %       0.125 %       0.125 %       0.125 %    

provided, that (x) the Applicable Margin for Eurodollar Rate Advances shall be
increased by the rate per annum set forth above in the row captioned
“Utilization Fee for Eurodollar Rate Advances” that corresponds to the Reference
Ratings Level used to determine such Applicable Margin and (y) the Applicable
Margin for Alternate Base Rate Advances shall be increased by the rate per annum
set forth above in the row captioned “Utilization Fee for Alternate Base Rate
Advances” that corresponds to the Reference Ratings Level used to determine such
Applicable Margin, in any case, during any period in which the aggregate
principal amount of Advances outstanding is greater than one-third of the
aggregate amount of the Commitments.

For purposes of the foregoing, if the Reference Ratings assigned by Moody’s and
S&P are not comparable (i.e., a “split rating”) by (x) one level, the lower of
such Reference Ratings shall control or (y) two or more levels, the level
corresponding to the Reference Rating one level above the lower Reference Rating
shall control unless either is below BB+ or unrated (in the case of S&P) or Ba1
or unrated (in the case of Moody’s), in which

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case the lower of the two Reference Ratings shall control. Any change in the
Applicable Margin will be effective as of the date on which S&P or Moody’s, as
the case may be, announces the applicable change in the Reference Rating.

     “Assignment and Acceptance” means an assignment and acceptance entered into
by a Lender and an Eligible Assignee, and accepted by the Administrative Agent,
in substantially the form of Exhibit C hereto.

     “Available Commitment” means, for each Lender, the excess of such Lender’s
Commitment over the aggregate outstanding principal amount of Advances made by
such Lender.

     “Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as amended from
time to time, and any Federal law with respect to bankruptcy, insolvency,
reorganization, liquidation, moratorium or similar laws affecting creditors’
rights generally.

     “Borrowing” means a borrowing consisting of simultaneous Advances of the
same Type made by each of the Lenders pursuant to Section 2.01 or Converted
pursuant to Section 2.08 or 2.09.

     “Business Day” means a day of the year on which banks are not required or
authorized to close in New York City or Akron, Ohio and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings are
carried on in the London interbank market.

     “Change of Control” has the meaning specified in Section 6.01(j).

     “Code” means the United States Internal Revenue Code of 1986, as amended
from time to time, and the applicable regulations thereunder.

     “Commitment” means, as to any Lender, the amount set forth opposite such
Lender’s name on Schedule I hereto or, if such Lender has entered into any
Assignment and Acceptance, set forth for such Lender in the Register maintained
by the Administrative Agent pursuant to Section 8.07(c), as such amount may be
reduced pursuant to Section 2.04.

     “Consolidated Debt” means, with respect to the Borrower, at any date of
determination the aggregate Indebtedness of the Borrower and its Consolidated
Subsidiaries determined on a consolidated basis in accordance with GAAP, but
shall not include (i) Nonrecourse Indebtedness of the Borrower and any of its
Subsidiaries, (ii) the aggregate principal amount of Trust Preferred Securities
of the Borrower and its Consolidated Subsidiaries, (iii) obligations under
leases that shall have been or should be, in accordance with GAAP, recorded as
operating leases in respect of which the Borrower or any of its Consolidated
Subsidiaries is liable as a lessee, and (iv) the aggregate principal amount of
Stranded Cost Securitization Bonds of the Borrower and its Consolidated
Subsidiaries.

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     “Consolidated Subsidiary” means, as to any Person, any Subsidiary of such
Person the accounts of which are or are required to be consolidated with the
accounts of such Person in accordance with GAAP.

     “Controlled Group” means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
that, together with the Borrower and its Subsidiaries, are treated as a single
employer under Section 414(b) or 414(c) of the Code.

     “Convert”, “Conversion” and “Converted” each refers to a conversion of
Advances of one Type into Advances of another Type or the selection of a new, or
the renewal of the same, Interest Period for Eurodollar Rate Advances pursuant
to Section 2.08 or 2.09.

     “Domestic Lending Office” means, with respect to any Lender, the office of
such Lender specified as its “Domestic Lending Office” opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender, or such other office of such Lender as such Lender may from
time to time specify to the Administrative Agent.

     “Eligible Assignee” means (i) a commercial bank organized under the laws of
the United States, or any State thereof; (ii) a commercial bank organized under
the laws of any other country that is a member of the OECD or has concluded
special lending arrangements with the International Monetary Fund associated
with its “General Arrangements to Borrow”, or a political subdivision of any
such country, provided that such bank is acting through a branch or agency
located in the United States; (iii) a finance company, insurance company or
other financial institution or fund (whether a corporation, partnership or other
entity) engaged generally in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business; (iv) the central bank
of any country that is a member of the OECD; or (v) any Lender; provided,
however, that (A) any Person described in clause (i), (ii), (iii) or (iv) above
shall also (x) have outstanding unsecured indebtedness that is rated A- or
better by S&P or A3 or better by Moody’s (or an equivalent rating by another
nationally recognized credit rating agency of similar standing if neither of
such corporations is in the business of rating unsecured indebtedness of
entities engaged in such businesses) and (y) have combined capital and surplus
(as established in its most recent report of condition to its primary regulator)
of not less than $250,000,000 (or its equivalent in foreign currency), (B) any
Person described in clause (ii), (iii) or (iv) above shall, on the date on which
it is to become a Lender hereunder, be entitled to receive payments hereunder
without deduction or withholding of any United States Federal income taxes (as
contemplated by Section 2.14(d)), (C) any Person described in clause (i), (ii),
(iii) or (iv) above shall, in addition, be reasonably acceptable to the
Administrative Agent and (D) in no event shall the Borrower or any of its
Affiliates be Eligible Assignees; notwithstanding any of the foregoing, after
the occurrence of an Event of Default any commercial bank, finance company,
insurance company or other financial institution or fund (whether a corporation,
partnership or other entity) engaged generally in making, purchasing or

5

otherwise investing in commercial loans in the ordinary course of its business
shall be deemed to be an Eligible Assignee.

     “Environmental Laws” means any federal, state or local laws, ordinances or
codes, rules, orders, or regulations relating to pollution or protection of the
environment, including, without limitation, laws relating to hazardous
substances, laws relating to reclamation of land and waterways and laws relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollution, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.

     “ERISA” means the Employee Retirement Income Security Act of 1974, and the
regulations promulgated and rulings issued thereunder, each as amended, modified
and in effect from time to time.

     “Eurocurrency Liabilities” has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.

     “Eurodollar Lending Office” means, with respect to any Lender, the office
of such Lender specified as its “Eurodollar Lending Office” opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent.

     “Eurodollar Rate” means, for the Interest Period for each Eurodollar Rate
Advance made as part of the same Borrowing, an interest rate per annum equal to
the average (rounded upward to the nearest whole multiple of 1/16 of 1% per
annum, if such average is not such a multiple) of the rates per annum at which
deposits in U.S. dollars are offered by the principal office of each Reference
Bank in London, England, to prime banks in the London interbank market at
11:00 a.m. (London time) two Business Days before the first day of such Interest
Period in an amount substantially equal to such Reference Bank’s Eurodollar Rate
Advance made as part of such Borrowing and for a period equal to such Interest
Period. The Eurodollar Rate for the Interest Period for each Eurodollar Rate
Advance made as part of the same Borrowing shall be determined by the
Administrative Agent on the basis of applicable rates furnished to and received
by the Administrative Agent from the Reference Banks two Business Days before
the first day of such Interest Period, subject, however, to the provisions of
Section 2.08.

     “Eurodollar Rate Advance” means an Advance that bears interest as provided
in Section 2.06(b).

     “Eurodollar Rate Reserve Percentage” of any Lender for the Interest Period
for any Eurodollar Rate Advance means the reserve percentage applicable during
such

6

Interest Period (or if more than one such percentage shall be so applicable, the
daily average of such percentages for those days in such Interest Period during
which any such percentage shall be so applicable) under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve requirement)
for such Lender with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities having a term equal to such Interest Period.

     “Events of Default” has the meaning specified in Section 6.01.

     “Exchange Act” means the Securities Exchange Act of 1934, and the
regulations promulgated thereunder, in each case as amended and in effect from
time to time.

     “Existing Parent Credit Agreement” means the 364-Day Credit Agreement,
dated as of November 8, 2002, as amended, modified and supplemented from time to
time, among the Parent, the lenders party thereto and Citibank, as
administrative agent for such lenders.

     “Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average (rounded upward to the nearest whole multiple of
1/100 of 1% per annum, if such average is not such a multiple) of the quotations
for such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by it.

     “Fee Letter” means that certain letter agreement, dated September 23, 2003,
among the Borrower, the Parent, Citibank, Citigroup Global Markets Inc.,
Barclays Bank PLC and Barclays Capital.

     “FirstEnergy Facilities” means the Three-Year Credit Agreement, dated as of
October 23, 2003, as amended, modified and supplemented from time to time, among
the Parent, the lenders party thereto and Citibank, as administrative agent for
such lenders, and the 364-Day Credit Agreement, dated as of October 23, 2003, as
amended, modified and supplemented from time to time, among the Parent, the
lenders party thereto and Citibank, as administrative agent for such lenders.

     “First Mortgage Indenture” means the Indenture, dated as of April 1, 1930,
between the Company and The Bank of New York, as successor trustee, as amended
and supplemented from time to time in accordance with its terms.

     “Fixed Charge Ratio” means, with respect to any fiscal quarter, the ratio
of (i) the sum of (A) consolidated net income before extraordinary items of the
Borrower and its

7

Consolidated Subsidiaries for the twelve-month period ended on the last day of
such fiscal quarter, plus (B) depreciation, amortization, dividends paid on
preferred stock of subsidiaries, interest expense, amounts paid on Trust
Preferred Securities, taxes and Federal income taxes deducted in determining
such net income, plus (C) the interest element of rental payments deducted in
determining such net income under operating lease obligations of the Borrower
and its Consolidated Subsidiaries during such twelve-month period, plus (D) all
other non-cash charges constituting operating expenses deducted in determining
such net income to (ii) the sum of (A) all interest expense (excluding the
amount of any allowance for funds used during construction and amounts paid on
Trust Preferred Securities) in respect of Indebtedness of the Borrower and its
Consolidated Subsidiaries during such twelve-month period, plus (B) the interest
element of rental payments deducted in determining net income under operating
lease obligations of the Borrower and its Consolidated Subsidiaries during such
twelve-month period.

     “GAAP” means generally accepted accounting principles in the United States
in effect from time to time.

     “Governmental Action” means all authorizations, consents, approvals,
waivers, exceptions, variances, orders, licenses, exemptions, publications,
filings, notices to and declarations of or with any Governmental Authority
(other than routine reporting requirements the failure to comply with which will
not affect the validity or enforceability of any Loan Document or have a
material adverse effect on the transactions contemplated by any Loan Document or
any material rights, power or remedy of any Person thereunder or any other
action in respect of any Governmental Authority).

     “Governmental Authority” means any Federal, state, county, municipal,
foreign, international, regional or other governmental authority, agency, board,
body, instrumentality or court.

     “Indebtedness” of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, or with respect to
deposits or advances of any kind, or for the deferred purchase price of property
or services, (ii) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, (iii) all obligations of such Person upon which
interest charges are customarily paid, (iv) all obligations under leases that
shall have been or should be, in accordance with GAAP, recorded as capital
leases in respect of which such Person is liable as lessee, (v) liabilities in
respect of unfunded vested benefits under Plans, (vi) withdrawal liability
incurred under ERISA by such Person or any of its affiliates to any
Multiemployer Plan, (vii) reimbursement obligations of such Person (whether
contingent or otherwise) in respect of letters of credit, bankers acceptances,
surety or other bonds and similar instruments, (viii) all Indebtedness of others
secured by a Lien on any asset of such Person, whether or not such Indebtedness
is assumed by such Person and (ix) obligations of such Person under direct or
indirect guaranties in respect of, and obligations (contingent or otherwise) to
purchase or otherwise acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or obligations of others of the kinds referred to
above.

8

     “Interest Period” means, for each Eurodollar Rate Advance made as part of
the same Borrowing, the period commencing on the date of such Eurodollar Rate
Advance or the date of the Conversion of any Advance into such Eurodollar Rate
Advance and ending on the last day of the period selected by the Borrower
pursuant to the provisions below and, thereafter, each subsequent period
commencing on the last day of the immediately preceding Interest Period and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be one, two,
three or six months, in each case as the Borrower may select by notice to the
Administrative Agent pursuant to Section 2.02(a) or Section 2.09(a); provided,
however, that:

     (i) the Borrower may not select any Interest Period that ends after the
Termination Date;

     (ii) Interest Periods commencing on the same date for Advances made as part
of the same Borrowing shall be of the same duration;

     (iii) no more than four different Interest Periods shall apply to
outstanding Eurodollar Rate Advances on any date of determination; and

     (iv) whenever the last day of any Interest Period would otherwise occur on
a day other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided, that if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day.

     “Lenders” means the Banks listed on the signature pages hereof and each
Eligible Assignee that shall become a party hereto pursuant to Section 8.07.

     “Lien” means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person or any of its Subsidiaries shall be
deemed to own, subject to a Lien, any asset that it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.

     “Loan Documents” means this Agreement, any Note and the Fee Letter.

     “Majority Lenders” means, at any time prior to the Termination Date,
Lenders having in the aggregate more than 50% of the Commitments (without giving
effect to any termination in whole of the Commitments pursuant to Section 6.01)
and at any time on or after the Termination Date, Lenders owed more than 50% of
the then aggregate principal amount of Advances outstanding.

9

     “Margin Stock” has the meaning assigned to that term in Regulation U issued
by the Board of Governors of the Federal Reserve System, and as amended and in
effect from time to time.

     “Moody’s” means Moody’s Investors Service, Inc. or any successor thereto.

     “Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA.

     “Nonrecourse Indebtedness” means any Indebtedness that finances the
acquisition, development, ownership or operation of an asset in respect of which
the Person to which such Indebtedness is owed has no recourse whatsoever to the
Borrower or any of its Affiliates other than:

  (i)   recourse to the named obligor with respect to such Indebtedness (the
“Debtor”) for amounts limited to the cash flow or net cash flow (other than
historic cash flow) from the asset; and     (ii)   recourse to the Debtor for
the purpose only of enabling amounts to be claimed in respect of such
Indebtedness in an enforcement of any security interest or lien given by the
Debtor over the asset or the income, cash flow or other proceeds deriving from
the asset (or given by any shareholder or the like in the Debtor over its shares
or like interest in the capital of the Debtor) to secure the Indebtedness, but
only if the extent of the recourse to the Debtor is limited solely to the amount
of any recoveries made on any such enforcement; and     (iii)   recourse to the
Debtor generally or indirectly to any Affiliate of the Debtor, under any form of
assurance, undertaking or support, which recourse is limited to a claim for
damages (other than liquidated damages and damages required to be calculated in
a specified way) for a breach of an obligation (other than a payment obligation
or an obligation to comply or to procure compliance by another with any
financial ratios or other tests of financial condition) by the Person against
which such recourse is available.

     “Note” means any promissory note issued at the request of a Lender pursuant
to Section 2.16 in the form of Exhibit A hereto.

     “Notice of Borrowing” has the meaning specified in Section 2.02(a).

     “OECD” means the Organization for Economic Cooperation and Development.

     “Ohio Transition Plan Order” means the Opinion and Order of The Public
Utilities Commission of Ohio in Case Nos. 99-1212-EL-ETP, 99-1213-EL-ATA and
99-1214-EL-AAM, entered July 19, 2000.

     “Other Taxes” has the meaning specified in Section 2.14(b).

10

     “Parent” means FirstEnergy Corp., an Ohio corporation and parent company to
the Borrower.

     “PBGC” means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.

     “Person” means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.

     “Plan” means, at any time, an employee pension benefit plan that is covered
by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by a member of the
Controlled Group for employees of a member of the Controlled Group or
(ii) maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding five plan years made
contributions.

     “Reference Banks” means Citibank, Barclays Bank PLC and Bank One, and any
Lender designated as a successor or replacement Reference Bank pursuant to
Section 2.08(a).

     “Reference Ratings” means the ratings assigned by S&P and Moody’s to the
senior unsecured non-credit enhanced debt of the Borrower.

     “Register” has the meaning specified in Section 8.07(c).

     “S&P” means Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor thereto.

     “SEC” means the United States Securities and Exchange Commission or any
successor thereto.

     “Second Mortgage Indenture” means the General Mortgage and Deed of Trust,
dated as of January 1, 1998, between the Company and The Bank of New York, as
trustee, as amended, modified or supplemented from time to time in accordance
with its terms.

     “Significant Subsidiaries” means Pennsylvania Power Company and each other
Subsidiary of the Borrower the annual revenues of which exceed $100,000,000 or
the total assets of which exceed $50,000,000.

     “Stranded Cost Securitization Bonds” means any instruments, pass-through
certificates, notes, debentures, certificates of participation, bonds,
certificates of beneficial interest or other evidences of indebtedness or
instruments evidencing a beneficial interest which are secured by or otherwise
payable from non-bypassable cent

11

per kilowatt hour charges authorized pursuant to such an order of a state
commission regulating public utilities to be applied and invoiced to customers
of such utility. The charges so applied and invoiced must be deducted and stated
separately from the other charges invoiced by such utility against its
customers.

     “Subsidiary” means, with respect to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the Board of Directors or other persons performing
similar functions are at the time directly or indirectly owned by such a Person,
or one or more Subsidiaries, or by such Person and one or more of its
Subsidiaries.

     “Taxes” has the meaning specified in Section 2.14(a).

     “Termination Date” means October 23, 2006 or the earlier date of
termination in whole of the Commitments pursuant to Section 2.04 or Section 6.01
hereof.

     “Termination Event” means (i) a Reportable Event described in Section 4043
of ERISA and the regulations issued thereunder (other than a Reportable Event
not subject to the provision for 30-day notice to the PBGC under such
regulations), or (ii) the withdrawal of any member of the Controlled Group from
a Plan during a plan year in which it was a “substantial employer” as defined in
Section 4001(a)(2) of ERISA, or (iii) the filing of a notice of intent to
terminate a Plan or the treatment of a Plan amendment as a termination under
Section 4041 of ERISA, or (iv) the institution of proceedings to terminate a
Plan by the PBGC, or (v) any other event or condition that might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan.

     “Total Capitalization” means, with respect to the Borrower at any date of
determination the sum of (i) Consolidated Debt of the Borrower,
(ii) consolidated equity of the common stockholders of the Borrower and its
Consolidated Subsidiaries, (iii) consolidated equity of the preference
stockholders of the Borrower and its Consolidated Subsidiaries, and (iv) the
aggregate principal amount of Trust Preferred Securities.

     “Trust Preferred Securities” means any securities, however denominated,
(i) issued by the Borrower or any Consolidated Subsidiary of the Borrower,
(ii) that are not subject to mandatory redemption or the underlying securities,
if any, of which are not subject to mandatory redemption, (iii) that are
perpetual or mature no less than 30 years from the date of issuance, (iv) the
indebtedness issued in connection with which, including any guaranty, is
subordinate in right of payment to the unsecured and unsubordinated indebtedness
of the issuer of such indebtedness or guaranty, and (v) the terms of which
permit the deferral of the payment of interest or distributions thereon to a
date occurring after the Termination Date.

     “Type” has the meaning assigned to that term in the definition of “Advance”
when used in such context.

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     “Unfunded Vested Liabilities” means, with respect to any Plan at any time,
the amount (if any) by which (i) the present value of all vested nonforfeitable
benefits under such Plan exceeds (ii) the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of a member of the Controlled Group to the PBGC or the Plan
under Title IV of ERISA.

     SECTION 1.02. Computation of Time Periods.

     In this Agreement in the computation of periods of time from a specified
date to a later specified date, the word “from” means “from and including” and
the words “to” and “until” each means “to but excluding”.

     SECTION 1.03. Accounting Terms.

     All accounting terms not specifically defined herein shall be construed in
accordance with GAAP consistent with those applied in the preparation of the
financial statements referred to in Section 4.01(g) hereof.

     SECTION 1.04. Certain References.

     Unless otherwise indicated, references in this Agreement to articles,
sections, paragraphs, clauses, schedules and exhibits are to the same contained
in or attached to this Agreement.

ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES

SECTION 2.01. The Advances.

     Each Lender severally agrees, on the terms and conditions hereinafter set
forth, to make Advances to the Borrower in U.S. dollars only from time to time
on any Business Day during the period from the date hereof until the Termination
Date in an aggregate amount not to exceed at any time outstanding the Available
Commitment of such Lender. Each Borrowing shall be in an aggregate amount not
less than $5,000,000 or an integral multiple of $1,000,000 in excess thereof and
shall consist of Advances of the same Type and, in the case of Eurodollar Rate
Advances, having the same Interest Period made or Converted on the same day by
the Lenders ratably according to their respective Commitments. Within the limits
of each Lender’s Available Commitment and subject to the conditions set forth in
Article III and the other terms and conditions hereof, the Borrower may from
time to time borrow, prepay pursuant to Section 2.10 and reborrow under this
Section 2.01; provided, that in no case shall any Lender be required to make an
Advance hereunder if (i) the amount of such Advance would exceed such Lender’s
Available Commitment or (ii) the making of such Advance, together with the
making of the other Advances constituting part of the same Borrowing, would
cause the aggregate principal amount of Advances outstanding to exceed the
aggregate amount of the Commitments.

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     SECTION 2.02. Making the Advances.

     (a) Each Borrowing shall be made on notice, given (i) in the case of a
Borrowing comprising Eurodollar Rate Advances, not later than 11:00 A.M. (New
York time) on the third Business Day prior to the date of the proposed
Borrowing, and (ii) in the case of a Borrowing comprising Alternate Base Rate
Advances, not later than 11:00 A.M. (New York time) on the date of the proposed
Borrowing, by the Borrower to the Administrative Agent, which shall give to each
Lender prompt notice thereof. Each such notice of a Borrowing (a “Notice of
Borrowing”) by the Borrower shall be by telecopier or cable, in substantially
the form of Exhibit B hereto, specifying therein the requested (A) date of such
Borrowing, (B) Type of Advances to be made in connection with such Borrowing,
(C) aggregate amount of such Borrowing, and (D) in the case of a Borrowing
comprising Eurodollar Rate Advances, the initial Interest Period for each such
Advance, which Borrowing shall be subject to the limitations stated in the
definition of “Interest Period” in Section 1.01. Each Lender shall, before 1:00
P.M. (New York time) on the date of such Borrowing, make available for the
account of its Applicable Lending Office to the Administrative Agent at its
address referred to in Section 8.02, in same day funds, such Lender’s ratable
portion (according to the Lenders’ respective Commitments) of such Borrowing.
After the Administrative Agent’s receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Administrative Agent
will make such funds available to the Borrower at the Administrative Agent’s
aforesaid address.

     (b) Each Notice of Borrowing delivered by the Borrower shall be irrevocable
and binding on the Borrower. In the case of any Notice of Borrowing delivered by
the Borrower requesting Eurodollar Rate Advances, the Borrower shall indemnify
each Lender against any loss, cost or expense incurred by such Lender as a
result of any failure by the Borrower to fulfill on or before the date specified
in such Notice of Borrowing the applicable conditions set forth in Article III,
including, without limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or redeployment of
deposits or other funds acquired by such Lender to fund the Advance to be made
by such Lender as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.

     (c) Unless the Administrative Agent shall have received written notice via
facsimile transmission from a Lender prior to (A) 5:00 P.M. (New York time) one
Business Day prior to the date of a Borrowing comprising Eurodollar Rate
Advances or (B) 12:00 noon (New York time) on the date of a Borrowing comprising
Base Rate Advances that such Lender will not make available to the
Administrative Agent such Lender’s ratable portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at the time to Advances made in
connection with such Borrowing and (ii) in the case of such Lender, the

14

Federal Funds Rate. If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Lender’s
Advance as part of such Borrowing for purposes of this Agreement.

     (d) The failure of any Lender to make the Advance to be made by it as part
of any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Advance to be
made by such other Lender on the date of any Borrowing.

     SECTION 2.03. Fees.

     (a) The Borrower agrees to pay to the Administrative Agent for the account
of each Lender a facility fee on the amount of such Lender’s Commitment (whether
used or unused) from the date hereof in the case of each Bank and from the
effective date specified in the Assignment and Acceptance pursuant to which it
became a Lender in the case of each other Lender until the Termination Date,
payable on the last day of each March, June, September and December during such
period, and on the Termination Date, at the rate per annum set forth below
determined by reference to the Reference Ratings from time to time in effect:

                                                                           
LEVEL 2     LEVEL 3     LEVEL 4                           Reference    
Reference     Reference                 LEVEL 1     Ratings Less     Ratings
Less     Ratings Less                 Reference     Than Level 1     Than Level
2     Than Level 3     LEVEL 5           Ratings at Least     but at Least    
but at Least     but at Least     Reference           BBB+ by S&P     BBB by S&P
    BBB- by S&P     BB+ by S&P     Ratings Lower           andBaa1 By    
andBaa2 By     andBaa3 By     andBa1 By     Than Level 4 or     BASIS FOR
PRICING     Moody’s.     Moody’s.     Moody’s.     Moody’s.     unrated.    
Facility Fee
      0.150 %       0.175 %       0.250 %       0.500 %       0.625 %    

For purposes of the foregoing, if the Reference Ratings assigned by Moody’s and
S&P are not comparable (i.e., a “split rating”) by (x) one level, the lower of
such Reference Ratings shall control or (y) two or more levels, the level
corresponding to the Reference Rating one level above the lower Reference Rating
shall control unless either is below BB+ or unrated (in the case of S&P) or Ba1
or unrated (in the case of Moody’s), in which case the lower of the two
Reference Ratings shall control. Any change in the facility fee will be
effective as of the date on which S&P or Moody’s, as the case may be, announces
the applicable change in the Reference Rating.

     (b) The Borrower agrees to pay the Administrative Agent, for its own
account, certain fees in such amounts and payable on such terms as set forth in
the Fee Letter.

     SECTION 2.04. Termination or Reduction of the Commitments.

     The Borrower shall have the right, upon at least three Business Days’
notice to the Administrative Agent, to terminate in whole or, upon same day
notice, from time to time to permanently reduce ratably in part the unused
portions of the respective Commitments of the

15

Lenders; provided that each partial reduction shall be in the aggregate amount
of $5,000,000 or in an integral multiple of $1,000,000 in excess thereof. Each
such notice of termination or reduction shall be irrevocable.

     SECTION 2.05. Repayment of Advances.

     The Borrower agrees to repay the principal amount of each Advance made by
each Lender on the Termination Date.

     SECTION 2.06. Interest on Advances.

     The Borrower agrees to pay interest on the unpaid principal amount of each
Advance made by each Lender from the date of such Advance until such principal
amount shall be paid in full, at the following rates per annum:

     (a) Alternate Base Rate Advances. If such Advance is an Alternate Base Rate
Advance, a rate per annum equal at all times to the Alternate Base Rate in
effect from time to time plus the Applicable Margin for such Alternate Base Rate
Advance in effect from time to time, payable quarterly in arrears on the last
day of each March, June, September and December, on the Termination Date and on
the date such Alternate Base Rate Advance shall be Converted or be paid in full
and as provided in Section 2.10;

     (b) Eurodollar Rate Advances. If such Advance is a Eurodollar Rate Advance,
a rate per annum equal at all times during the Interest Period for such Advance
to the sum of the Eurodollar Rate for such Interest Period plus the Applicable
Margin for such Eurodollar Rate Advance in effect from time to time, payable on
the last day of each Interest Period for such Eurodollar Rate Advance (and, in
the case of any Interest Period of six months, on the last day of the third
month of such Interest Period), on the Termination Date and on the date such
Eurodollar Rate Advance shall be Converted or be paid in full and as provided in
Section 2.10;

provided, however, that if and for so long as an Event of Default shall have
occurred and be continuing the unpaid principal amount of each Advance shall (to
the fullest extent permitted by law) bear interest until paid in full at a rate
per annum equal at all times to a rate equal to 2% above the rate then
applicable to such Advance or, if higher, the Alternate Base Rate plus 2% per
annum, payable upon demand.

     SECTION 2.07. Additional Interest on Advances.

     The Borrower agrees to pay to each Lender, so long as such Lender shall be
required under regulations of the Board of Governors of the Federal Reserve
System to maintain reserves with respect to liabilities or assets consisting of
or including Eurocurrency Liabilities, additional interest on the unpaid
principal amount of each Eurodollar Rate Advance of such Lender, from the date
of such Advance until such principal amount is paid in full, at an interest rate
per annum equal at all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for the Interest Period for such Advance from (ii) the rate
obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage of such Lender for such Interest Period,
payable on each date on which interest is payable on such Advance; provided,

16

that no Lender shall be entitled to demand additional interest under this
Section 2.07 more than 90 days following the last day of the Interest Period in
respect of which such demand is made; provided further, however, that the
foregoing proviso shall in no way limit the right of any Lender to demand or
receive such additional interest to the extent that such additional interest
relates to the retroactive application by the Board of Governors of the Federal
Reserve System of any regulation described above if such demand is made within
90 days after the implementation of such retroactive regulation. Such additional
interest shall be determined by such Lender and notified to the Borrower through
the Administrative Agent, and such determination shall be conclusive and binding
for all purposes, absent manifest error.

     SECTION 2.08. Interest Rate Determination.

     (a) Each Reference Bank agrees to furnish to the Administrative Agent
timely information for the purpose of determining each Eurodollar Rate. If any
one or more of the Reference Banks shall not furnish such timely information to
the Administrative Agent for the purpose of determining any such interest rate,
the Administrative Agent shall determine such interest rate on the basis of
timely information furnished by the remaining Reference Banks. If any Reference
Bank shall no longer be a Lender hereunder, shall no longer wish to serve as a
Reference Bank hereunder or shall fail to perform hereunder, the Administrative
Agent, upon consultation with the Borrower, may appoint another Lender to serve
as a successor or replacement Reference Bank hereunder.

     (b) The Administrative Agent shall give prompt notice to the Borrower and
the Lenders of the applicable interest rate determined by the Administrative
Agent for purposes of Section 2.06(a) or (b) including the applicable rate, if
any, furnished by each Reference Bank for the purpose of determining the
applicable interest rate under Section 2.06(b).

     (c) If fewer than two Reference Banks furnish timely information to the
Administrative Agent for determining the Eurodollar Rate for any Eurodollar Rate
Advances,

     (i) the Administrative Agent shall forthwith notify the Borrower and the
Lenders that the interest rate cannot be determined for such Eurodollar Rate
Advances,

     (ii) each such Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into an Alternate Base Rate Advance
(or if such Advance is then an Alternate Base Rate Advance, will continue as an
Alternate Base Rate Advance), and

     (iii) the obligation of the Lenders to make or to Convert Advances into
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.

     (d) If, with respect to any Eurodollar Rate Advances, the Majority Lenders
notify the Administrative Agent that the Eurodollar Rate for any Interest Period
for such Advances will not adequately reflect the cost to such Majority Lenders
of making or funding their respective

17

Eurodollar Rate Advances for such Interest Period, the Administrative Agent
shall forthwith so notify the Borrower and the Lenders, whereupon

     (i) each Eurodollar Rate Advance will automatically, on the last day of the
then existing Interest Period therefor, Convert into an Alternate Base Rate
Advance, and

     (ii) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.

     SECTION 2.09. Conversion of Advances.

     (a) Voluntary. The Borrower may on any Business Day, upon notice given to
the Administrative Agent not later than 11:00 A.M. (New York time) on the third
Business Day prior to the date of any proposed Conversion into Eurodollar Rate
Advances, and on the date of any proposed Conversion into Alternate Base Rate
Advances, and subject to the provisions of Sections 2.08 and 2.12, Convert all
Advances of one Type made to the Borrower in connection with the same Borrowing
into Advances of another Type or Types or Advances of the same Type having the
same or a new Interest Period; provided, however, that any Conversion of, or
with respect to, any Eurodollar Rate Advances into Advances of another Type or
Advances of the same Type having the same or new Interest Periods shall be made
on, and only on, the last day of an Interest Period for such Eurodollar Rate
Advances, unless the Borrower shall also reimburse the Lenders in respect
thereof pursuant to Section 8.04(b) on the date of such Conversion. Each such
notice of a Conversion shall, within the restrictions specified above, specify
(i) the date of such Conversion, (ii) the Advances to be Converted, and (iii) if
such Conversion is into, or with respect to, Eurodollar Rate Advances, the
duration of the Interest Period for each such Advance.

     (b) Mandatory. If the Borrower shall fail to select the Type of any Advance
or the duration of any Interest Period for any Borrowing comprising Eurodollar
Rate Advances in accordance with the provisions contained in the definition of
“Interest Period” in Section 1.01 and Section 2.09(a), or if any proposed
Conversion of a Borrowing that is to comprise Eurodollar Rate Advances upon
Conversion shall not occur as a result of the circumstances described in
paragraph (c) below, the Administrative Agent will forthwith so notify the
Borrower and the Lenders, and such Advances will automatically, on the last day
of the then existing Interest Period therefor, Convert into Alternate Base Rate
Advances.

     (c) Failure to Convert. Each notice of Conversion given pursuant to
subsection (a) above shall be irrevocable and binding on the Borrower. In the
case of any Borrowing that is to comprise Eurodollar Rate Advances upon
Conversion, the Borrower agrees to indemnify each Lender against any loss, cost
or expense incurred by such Lender as a result of any failure to fulfill on the
date specified for such Conversion the applicable conditions set forth in
Article III, including, without limitation, any loss, cost or expense incurred
by reason of the liquidation or redeployment of deposits or other funds acquired
by such Lender to fund such Eurodollar Rate Advances upon such Conversion, when
such Conversion, as a result of such failure, does not occur. The Borrower’s
obligations under this subsection (c) shall survive the

18

repayment of all other amounts owing to the Lenders and the Administrative Agent
under this Agreement and any Note and the termination of the Commitments.

     SECTION 2.10. Prepayments.

     (a) Optional. The Borrower may at any time prepay the outstanding principal
amounts of the Advances made as part of the same Borrowing in whole or ratably
in part, together with accrued interest to the date of such prepayment on the
principal amount prepaid, upon notice thereof given to the Administrative Agent
by the Borrower not later than 11:00 A.M. (New York time) (i) on the date of any
such prepayment in the case of Alternate Base Rate Advances and (ii) on the
second Business Day prior to any such prepayment in the case of Eurodollar Rate
Advances; provided, however, that (x) each partial prepayment of any Borrowing
shall be in an aggregate principal amount not less than $5,000,000 and (y) in
the case of any such prepayment of a Eurodollar Rate Advance, the Borrower shall
be obligated to reimburse the Lenders in respect thereof pursuant to
Section 8.04(b) on the date of such prepayment.

     (b) Mandatory. If and to the extent that the aggregate principal amount of
Advances outstanding hereunder on any date shall exceed the aggregate amount of
the Commitments hereunder on such date, the Borrower agrees to prepay on such
date a principal amount of Advances, which shall result in the aggregate
principal amount of Advances outstanding being less than or equal to such excess
amount. Any prepayment of Advances shall be accompanied by accrued interest on
the amount prepaid to the date of such prepayment and, in the case of any such
prepayment of Eurodollar Rate Advances, the Borrower shall be obligated to
reimburse the Lenders in respect thereof pursuant to Section 8.04(b) on the date
of such prepayment.

     SECTION 2.11. Increased Costs.

     (a) If, due to either (i) the introduction of or any change (other than any
change by way of imposition or increase of reserve requirements included in the
Eurodollar Rate Reserve Percentage) in or in the interpretation of any law or
regulation, in each case, after the date hereof, or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law) issued, promulgated or made, as the
case may be, after the date hereof, there shall be any increase in the cost to
any Lender of agreeing to make or making, funding or maintaining Eurodollar Rate
Advances, then the Borrower shall from time to time, upon demand by such Lender
(with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost. A certificate as
to the amount of such increased cost and the basis therefor, submitted to the
Borrower and the Administrative Agent by such Lender, shall constitute such
demand and shall be conclusive and binding for all purposes, absent manifest
error.

     (b) If any Lender determines that compliance with any law or regulation or
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law), issued, promulgated or made (as the
case may be) after the date hereof, affects or would affect the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is increased by or
based upon the existence of (i) such Lender’s commitment to lend hereunder and
other commitments of

19

this type or (ii) the Advances made by such Lender, then, upon demand by such
Lender (with a copy of such demand to the Administrative Agent), the Borrower
shall immediately pay to the Administrative Agent for the account of such
Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender or such corporation in the light of such
circumstances, to the extent that such Lender determines such increase in
capital to be allocable to the existence of such Lender’s commitment to lend
hereunder or the Advances made by such Lender. A certificate as to such amounts
submitted to the Borrower and the Administrative Agent by such Lender shall
constitute such demand and shall be conclusive and binding for all purposes,
absent manifest error.

     SECTION 2.12. Illegality.

     Notwithstanding any other provision of this Agreement, if any Lender shall
notify the Administrative Agent that the introduction of or any change in or in
the interpretation of any law or regulation makes it unlawful, or any central
bank or other governmental authority asserts that it is unlawful, for any Lender
or its Eurodollar Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances
hereunder, (i) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended until the Administrative Agent
shall notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist and (ii) the Borrower shall forthwith prepay in full
all Eurodollar Rate Advances of all Lenders then outstanding, together with
interest accrued thereon, unless (A) the Borrower, within five Business Days of
notice from the Administrative Agent, Converts all Eurodollar Rate Advances of
all Lenders then outstanding into Advances of another Type in accordance with
Section 2.09 or (B) the Administrative Agent notifies the Borrower that the
circumstances causing such prepayment no longer exist. Any Lender that becomes
aware of circumstances that would permit such Lender to notify the
Administrative Agent of any illegality under this Section 2.12 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 change would avoid or eliminate such illegality and would not, in
the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.

     SECTION 2.13. Payments and Computations.

     (a) The Borrower shall make each payment hereunder and under any Note not
later than 12:00 noon (New York time) on the day when due in U.S. dollars to the
Administrative Agent at its address referred to in Section 8.02 in same day
funds, and any such payment to the Administrative Agent shall constitute payment
by the Borrower hereunder or under any Note, as the case may be, for all
purposes, and upon such payment the Lenders shall look solely to the
Administrative Agent for their respective interests in such payment. The
Administrative Agent will promptly after any such payment cause to be
distributed like funds relating to the payment of principal or interest or
facility fees ratably (other than amounts payable pursuant to Section 2.02(c),
2.03, 2.07, 2.09(c), 2.11, 2.14 or 8.04(b)) (according to the Lenders’
respective Commitments) to the Lenders for the account of their respective
Applicable Lending Offices, and like funds relating to the payment of any other
amount payable to any Lender to such Lender for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording

20

of the information contained therein in the Register pursuant to
Section 8.07(d), from and after the effective date specified in such Assignment
and Acceptance, the Administrative Agent shall make all payments hereunder and
under any Note in respect of the interest assigned thereby to the Lender
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.

     (b) The Borrower hereby authorizes each Lender, if and to the extent
payment owed to such Lender is not made by the Borrower to the Administrative
Agent when due hereunder or under any Note held by such Lender, to charge from
time to time against any or all of the Borrower’s accounts (other than any
payroll account maintained by the Borrower with such Lender if and to the extent
that such Lender shall have expressly waived its set-off rights in writing in
respect of such payroll account) with such Lender any amount so due.

     (c) All computations of interest based on the Alternate Base Rate (based
upon Citibank’s base rate) shall be made by the Administrative Agent on the
basis of a year of 365 or 366 days, as the case may be, and all computations of
facility fees and of interest based on the Alternate Base Rate (based upon the
Federal Funds Rate), the Eurodollar Rate or the Federal Funds Rate shall be made
by the Administrative Agent, and all computations of interest pursuant to
Section 2.07 shall be made by a Lender, on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such facility fees or interest
are payable. Each determination by the Administrative Agent (or, in the case of
Section 2.07, by a Lender) of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.

     (d) Whenever any payment hereunder or under any Note shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or facility fees, as the case
may be; provided, however, if such extension would cause payment of interest on
or principal of Eurodollar Rate Advances to be made in the next following
calendar month, such payment shall be made on the next preceding Business Day.

     (e) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent that the Borrower
shall not have so made such payment in full to the Administrative Agent, each
Lender shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent, at the Federal Funds Rate.

     (f) Except as provided otherwise in Section 2.06, any amount payable by the
Borrower hereunder or under any Note that is not paid when due (whether at
stated maturity, by acceleration or otherwise) shall (to the fullest extent
permitted by law) bear interest from the date

21

when due until paid in full at a rate per annum equal at all times to the
Alternate Base Rate plus 2% per annum, payable upon demand.

     SECTION 2.14. Taxes.

     (a) Any and all payments by the Borrower hereunder and under any Note shall
be made, in accordance with Section 2.13, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender, and the Administrative Agent, such taxes, levies,
imposts, deductions and charges in the nature of franchise taxes or taxes
measured by the gross receipts or net income of any Lender or the Administrative
Agent by any jurisdiction in which such Lender or the Administrative Agent (as
the case may be) is organized, located or conducts business or any political
subdivision thereof and, in the case of each Lender, by the jurisdiction of such
Lender’s Applicable Lending Office or any political subdivision thereof (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being herein referred to as “Taxes”). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Lender or the Administrative Agent, (i) the
sum payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.13) such Lender or the Administrative Agent (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with Applicable Law.

     (b) In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or under any Note or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any Note (herein referred to as “Other Taxes”).

     (c) The Borrower agrees to indemnify each Lender and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.14) paid by such Lender or the Administrative Agent
(as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. This indemnification shall be
made within 30 days from the date such Lender or the Administrative Agent (as
the case may be) makes written demand therefor.

     (d) Prior to the date of the initial Borrowing in the case of each Bank,
and on the date of the Assignment and Acceptance pursuant to which it became a
Lender in the case of each other Lender, and from time to time thereafter if
requested by the Borrower or the Administrative Agent, each Lender organized
under the laws of a jurisdiction outside the United States shall provide the
Administrative Agent, and the Borrower with the forms prescribed by the Internal
Revenue Service of the United States certifying that such Lender is exempt from
United States withholding taxes with respect to all payments to be made to such
Lender hereunder and under any Note. If for any reason during the term of this
Agreement, any Lender becomes unable to submit the forms referred to above or
the information or representations contained therein are no

22

longer accurate in any material respect, such Lender shall promptly notify the
Administrative Agent and the Borrower in writing to that effect. Unless the
Borrower and the Administrative Agent have received forms or other documents
satisfactory to them indicating that payments hereunder or under any Note are
not subject to United States withholding tax, the Borrower or the Administrative
Agent shall withhold taxes from such payments at the applicable statutory rate
in the case of payments to or for any Lender organized under the laws of a
jurisdiction outside the United States.

     (e) Any Lender claiming any additional amounts payable pursuant to this
Section 2.14 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 which may thereafter accrue
and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.

     (f) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.14 shall survive the payment in full of principal and interest
hereunder and under any Note.

     SECTION 2.15. Sharing of Payments, Etc.

     If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on account of the
Advances made by it (other than pursuant to Section 2.02(c), 2.07, 2.09(c),
2.11, 2.14 or 8.04(b)) in excess of its ratable share of payments on account of
the Advances obtained by all the Lenders, such Lender shall forthwith purchase
from the other Lenders such participations in the Advances made by them as shall
be necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and such Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery together with an amount
equal to such Lender’s ratable share (according to the proportion of (a) the
amount of such Lender’s required repayment to (b) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.15 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.

     SECTION 2.16. Noteless Agreement; Evidence of Indebtedness.

     (a) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Advance made by such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder.

23

     (b) The Administrative Agent shall also maintain accounts in which it will
record (i) the amount of each Advance made hereunder, the Type thereof and the
Interest Period (if any) with respect thereto, (ii) the amount of any principal
or interest due and payable or to become due and payable from the Borrower to
each Lender hereunder, and (iii) the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Lender’s share
thereof.

     (c) The entries maintained in the accounts maintained pursuant to
subsections (a) and (b) above shall be prima facie evidence of the existence and
amounts of the obligations therein recorded; provided, however, that the failure
of the Administrative Agent or any Lender to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
such obligations in accordance with their terms.

     (d) Any Lender may request that its Advances be evidenced by a Note. In
such event, the Borrower shall prepare, execute and deliver to such Lender a
Note payable to the order of such Lender. Thereafter, the Advances evidenced by
such Note and interest thereon shall at all times (including after any
assignment pursuant to Section 8.07) be represented by one or more Notes payable
to the order of the payee named therein or any assignee pursuant to
Section 8.07, except to the extent that any such Lender or assignee subsequently
returns any such Note for cancellation and requests that such Borrowings once
again be evidenced as described in subsections (a) and (b) above.

ARTICLE III
CONDITIONS OF LENDING

     SECTION 3.01. Conditions Precedent to Initial Advances.

     The obligation of each Lender to make its initial Advance is subject to the
condition precedent that on or before the date of such Advance:

     (a) The Administrative Agent shall have received the following, each dated
the same date (except for the financial statements and information referred to
in paragraphs (iv) and (v) below), in form and substance satisfactory to the
Administrative Agent and (except for any Note) with one copy for each Lender:

     (i) Any Note requested by a Lender pursuant to Section 2.16, duly completed
and executed by the Borrower and payable to the order of each such Lender;

     (ii) Certified copies of the resolutions of the Board of Directors of the
Borrower approving this Agreement and the other Loan Documents to which it is,
or is to be, a party and of all documents evidencing any other necessary
corporate action with respect to this Agreement and such Loan Documents;

     (iii) A certificate of the Secretary or an Assistant Secretary of the
Borrower certifying (A) the names and true signatures of the officers of the
Borrower authorized to sign each Loan Document to which the Borrower is, or is
to become, a party and the other documents to be delivered hereunder; (B) that
attached thereto are true and correct

24

copies of the charter and the Code of Regulations of the Borrower, in each case
as in effect on such date; and (C) that attached thereto are true and correct
copies of all governmental and regulatory authorizations and approvals required
for the due execution, delivery and performance by the Borrower of this
Agreement and each other Loan Document to which the Borrower is, or is to
become, a party;

     (iv) Copies of the consolidated balance sheets of the Borrower and its
Subsidiaries as of December 31, 2002, and the related consolidated statements of
income, retained earnings and cash flows of the Borrower and its Subsidiaries
for the fiscal year then ended, certified by PricewaterhouseCoopers LLP, and the
unaudited consolidated balance sheets of the Borrower and its Subsidiaries as of
June 30, 2003 and related consolidated statements of income, retained earnings
and cash flows of the Borrower and its Subsidiaries for the six month period
then ended, in all cases as amended and restated to the date of delivery;

     (v) A certificate of an officer of the Borrower certifying that the
representations and warranties contained in Section 4.01 hereof are true and
correct on and as of such date and that no event has occurred and is continuing
that constitutes an Event of Default or would constitute an Event of Default but
for the requirement that notice be given or time elapse or both;

     (vi) An opinion of Gary D. Benz, Esq., counsel for the Borrower,
substantially in the form of Exhibit D hereto;

     (vii) An opinion of Pillsbury Winthrop LLP, special counsel for the
Borrower, in substantially the form of Exhibit E hereto;

     (viii) A favorable opinion of King & Spalding LLP, special New York counsel
for the Administrative Agent, substantially in the form of Exhibit F hereto; and

     (ix) Such other certifications, opinions, financial or other information,
approvals and documents as the Administrative Agent or any Lender may reasonably
request, all in form and substance satisfactory to the Administrative Agent or
such Lender (as the case may be).

     (b) The Borrower and the Parent shall have paid all of the fees payable in
accordance with the Fee Letter.

     (c) All amounts outstanding under the Existing Parent Credit Agreement,
whether for principal, interest, fees or otherwise, shall have been paid in
full, and all commitments to lend thereunder shall have been terminated.

     (d) All amounts outstanding under the Standby Bond Purchase Agreement,
dated as of August 1, 2003, among the Borrower, the purchasers party thereto and
Barclays Bank PLC, as administrative agent, whether for principal, interest,
fees or otherwise, shall have been paid in full, and all commitments to lend
thereunder shall have been terminated.

25

     (e) The Administrative Agent shall have received evidence satisfactory to
it of the execution and delivery of the FirstEnergy Facilities.

     SECTION 3.02. Conditions Precedent to Each Advance.

     The obligation of each Lender to make an Advance as part of any Borrowing
(including the initial Borrowing) that would increase the aggregate principal
amount of Advances outstanding hereunder shall be subject to the further
conditions precedent that on the date of such Advance:

     (a) The following statements shall be true (and each of the giving of the
applicable Notice of Borrowing and the acceptance by the Borrower of the
proceeds of such Borrowing, shall constitute a representation and warranty by
the Borrower that on the date of such Borrowing such statements are true):

     (i) The representations and warranties contained in Section 4.01 hereof are
true and correct on and as of the date of such Borrowing, before and after
giving effect to such Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date;

     (ii) No event has occurred and is continuing, or would result from such
Borrowing or from the application of the proceeds therefrom, that constitutes an
Event of Default or would constitute an Event of Default but for the requirement
that notice be given or time elapse or both; and

     (iii) Immediately following such Borrowing, (A) the aggregate outstanding
principal amount of Advances shall not exceed the aggregate amount of the
Commitments then in effect and, (B) the aggregate outstanding principal amount
of Advances made by any Lender shall not exceed the amount of such Lender’s
Commitment.

     (b) The Borrower shall have delivered to the Administrative Agent copies of
such other approvals and documents as the Administrative Agent or any Lender
(through the Administrative Agent) may reasonably request.

     SECTION 3.03. Conditions Precedent to Conversions.

     The obligation of each Lender to Convert any Borrowing is subject to the
conditions precedent that on the date of such Conversion:

     (a) The following statements shall be true (and the giving of the notice of
Conversion pursuant to Section 2.09 shall constitute a representation and
warranty by the Borrower that on the date of such Conversion such statements are
true):

     (i) The representations and warranties contained in Section 4.01 (other
than subsections (f) and (g) thereof) are correct on and as of the date of such
Conversion, before and after giving effect to such Conversion, as though made on
and as of such date; and

26

     (ii) No event has occurred and is continuing or would result from such
Conversion, that constitutes an Event of Default or that would constitute an
Event of Default but for the requirement that notice be given or time elapse or
both; and

     (b) The Borrower shall have delivered to the Administrative Agent copies of
such other approvals and documents as the Administrative Agent may reasonably
request.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES

     SECTION 4.01. Representations and Warranties of the Borrower.

     The Borrower represents and warrants as follows:

     (a) Corporate Existence and Power. The Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Ohio, is duly qualified to do business as a foreign corporation in and is in
good standing under the laws of each 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 its ability to perform its
obligations under the Loan Documents, and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted.

     (b) Corporate Authorization. The execution, delivery and performance by it
of each Loan Document to which it is, or is to become, a party, have been duly
authorized by all necessary corporate action on its part and 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, other than such consents
and approvals as have been duly obtained, given or accomplished.

     (c) No Violation, Etc. Neither the execution, delivery or performance by it
of this Agreement or any other Loan Document to which it is, or is to become, a
party, nor the consummation by it of the transactions contemplated hereby or
thereby, nor compliance by it with the provisions hereof or thereof, conflicts
or will conflict with, or results or will result in a breach or contravention of
any of the provisions of its charter or Code of Regulations or any Applicable
Law, or any indenture, mortgage, lease or any other agreement or instrument to
which it or any of its Affiliates is party or by which its property or the
property of any of its Affiliates is bound, or results or will result in the
creation or imposition of any Lien upon any of its property or the property of
any of its Affiliates except as provided herein. There is no provision of its
charter or Code of Regulations, or any Applicable Law, or any such indenture,
mortgage, lease or other agreement or instrument that materially adversely
affects, or in the future is likely (so far as it can now foresee) to materially
adversely affect, its business, operations, affairs, condition, properties or
assets or its ability to perform its obligations under this Agreement or any
other Loan Document to which it is, or is to become, a party. Each of the
Borrower and its Subsidiaries is in compliance with all laws (including, without
limitation, ERISA and Environmental Laws), regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon

27

it or its property, except where the failure to do 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, condition (financial or
otherwise) or prospects of the 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 the Borrower to perform its obligations under the Loan Documents.

     (d) Governmental Actions. No Governmental Action is or will be required in
connection with the execution, delivery or performance by it, or the
consummation by it of the transactions contemplated by this Agreement or any
other Loan Document to which it is, or is to become, a party other than those
which have been duly issued and are in full force and effect.

     (e) Execution and Delivery. This Agreement and the other Loan Documents to
which it is, or is to become, a party have been or will be (as the case may be)
duly executed and delivered by it, and this Agreement is and upon execution and
delivery thereof each other Loan Document will be the legal, valid and binding
obligation of it enforceable against it in accordance with its terms, subject,
however, to the application by a court of general principles of equity and to
the effect of any applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors’ rights generally.

     (f) Litigation. Except as disclosed in Schedule II, the Borrower’s Annual
Report on Form 10-K/A for the fiscal year ended December 31, 2002 filed on
September 11, 2003 with the SEC, its Quarterly Report on Form 10-Q/A for the
quarter ended June 30, 2003 filed on September 11, 2003 with the SEC and its
Current Reports on Form 8-K filed in 2003 prior to the date hereof (copies of
which have been furnished to each Lender), there is no pending or threatened
action or proceeding (including, without limitation, any proceeding relating to
or arising out of Environmental Laws) affecting it or any of its Subsidiaries
before any court, governmental agency or arbitrator, that has a reasonable
possibility of having a material adverse effect on the business, condition
(financial or otherwise), results of operations or prospects of it and its
consolidated subsidiaries, taken as a whole, or on the ability of the Borrower
to perform its obligations under this Agreement or any other Loan Document, and
there has been no development in the matters disclosed in Schedule II that has
had such a material adverse effect.

     (g) Financial Statements; Material Adverse Change. The consolidated balance
sheets of the Borrower and its Subsidiaries as at December 31, 2002, and the
related consolidated statements of income, retained earnings and cash flows of
the Borrower and its Subsidiaries for the fiscal year then ended, certified by
PricewaterhouseCoopers LLP, independent public accountants, and the unaudited
consolidated balance sheet of the Borrower and its Subsidiaries as at June 30,
2003, and the related consolidated statements of income, retained earnings and
cash flows of the Borrower and its Subsidiaries for the six months then ended,
copies of each of which have been furnished to each Lender, in all cases as
amended and restated to the date hereof, present fairly the consolidated
financial position of the Borrower and its Subsidiaries as at such dates and the
consolidated results of the operations of the Borrower and its Subsidiaries for
the periods ended on such dates, all in accordance with GAAP consistently
applied. Except as disclosed in the Borrower’s Annual Report on Form 10-K/A for
the fiscal year ended December 31, 2002 filed on September 11, 2003 with the
SEC, its Quarterly Report on Form 10-Q/A for the quarter ended June 30, 2003
filed on September 11, 2003 with the SEC and its

28

Current Reports on Form 8-K filed in 2003 prior to the date hereof (copies of
which have been furnished to each Lender), there has been no material adverse
change in the business, condition (financial or otherwise), results of
operations or prospects of the Borrower and its Consolidated Subsidiaries, taken
as a whole, since December 31, 2002.

     (h) ERISA.

     (i) No Termination Event has occurred or is reasonably expected to occur
with respect to any Plan.

     (ii) Schedule B (Actuarial Information) to the most recent annual report
(Form 5500 Series) with respect to each Plan, copies of which have been filed
with the Internal Revenue Service and furnished to the Lenders, is complete and
accurate and fairly presents the funding status of such Plan, and since the date
of such Schedule B there has been no material adverse change in such funding
status.

     (iii) Neither it nor any member of the Controlled Group has incurred nor
reasonably expects to incur any withdrawal liability under ERISA to any
Multiemployer Plan.

     (i) Taxes. It and each of its Subsidiaries has filed all tax returns
(federal, state and local) required to be filed and paid all taxes shown thereon
to be due, including interest and penalties, or provided adequate reserves for
payment thereof other than such taxes that the Borrower or such Subsidiary is
contesting in good faith by appropriate legal proceedings.

     (j) Use of Proceeds. The proceeds of each Borrowing will be used solely for
the general corporate purposes of the Borrower and/or its Subsidiaries.

     (k) Margin Stock. After applying the proceeds of each Borrowing, not more
than 25% of the value of the assets of the Borrower and its Subsidiaries subject
to the restrictions of Section 5.03(a) or (b) will consist of or be represented
by Margin Stock. The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying Margin Stock, and no proceeds of any
Borrowing will be used to purchase or carry any Margin Stock or to extend credit
to others for the purpose of purchasing or carrying any Margin Stock.

     (l) Investment Company. The Borrower is not an “investment company” or a
company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, or an “investment advisor” within
the meaning of the Investment Advisers Act of 1940, as amended.

     (m) No Event of Default. No event has occurred and is continuing that
constitutes an Event of Default or that would constitute an Event of Default
(including, without limitation, an Event of Default under Section 6.01(e)) but
for the requirement that notice be given or time elapse or both.

     (n) Solvency. (i) The fair saleable value of its assets will exceed the
amount that will be required to be paid on or in respect of the probable
liability on its existing debts and other

29

liabilities (including contingent liabilities) as they mature; (ii) its assets
do not constitute unreasonably small capital to carry out its business as now
conducted or as proposed to be conducted; (iii) it does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be received by it and the amounts to be
payable on or in respect of its obligations); and (iv) it does not believe that
final judgments against it in actions for money damages presently pending will
be rendered at a time when, or in an amount such that, it will be unable to
satisfy any such judgments promptly in accordance with their terms (taking into
account the maximum reasonable amount of such judgments in any such actions and
the earliest reasonable time at which such judgments might be rendered). Its
cash flow, after taking into account all other anticipated uses of its cash
(including the payments on or in respect of debt referred to in clause
(iii) above), will at all times be sufficient to pay all such judgments promptly
in accordance with their terms.

     (o) No Material Misstatements. The reports, financial statements and other
written information furnished by or on behalf of the Borrower to the
Administrative Agent or any Lender pursuant to or in connection with the Loan
Documents and the transactions contemplated thereby do not contain and will not
contain, when taken as a whole, any untrue statement of a material fact and do
not omit and will not omit, when taken as a whole, to state any fact necessary
to make the statements therein, in the light of the circumstances under which
they were or will be made, not misleading in any material respect.

ARTICLE V
COVENANTS OF THE BORROWER

     SECTION 5.01. Affirmative Covenants of the Borrower.

     Unless the Majority Lenders shall otherwise consent in writing, so long as
any amount payable by the Borrower hereunder shall remain unpaid or any Lender
shall have any Commitment hereunder, the Borrower will:

     (a) Preservation of Corporate Existence, Etc. (i) Without limiting the
right of the Borrower to merge with or into or consolidate with or into any
other corporation or entity in accordance with the provisions of Section 5.03(c)
hereof, preserve and maintain its corporate existence in the state of its
incorporation and qualify and remain qualified as a foreign corporation in each
jurisdiction in which such qualification is reasonably necessary in view of its
business and operations or the ownership of its properties and (ii) preserve,
renew and keep in full force and effect the rights, privileges and franchises
necessary or desirable in the normal conduct of its business.

     (b) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries
to comply, in all material respects with all applicable laws, rules,
regulations, and orders of any Governmental Authority, the noncompliance with
which would materially and adversely affect the business or condition of the
Borrower and its Subsidiaries, taken as a whole, such compliance to include,
without limitation, compliance with Environmental Laws and ERISA and paying
before the same become delinquent all material taxes, assessments and
governmental charges

30

imposed upon it or upon its property, except to the extent compliance with any
of the foregoing is then being contested in good faith by appropriate legal
proceedings.

     (c) Maintenance of Insurance, Etc. Maintain insurance with responsible and
reputable insurance companies or associations or through its own program of
self-insurance in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Borrower operates and furnish to the
Administrative Agent, within a reasonable time after written request therefor,
such information as to the insurance carried as any Lender, through the
Administrative Agent, may reasonably request.

     (d) Inspection Rights. At any reasonable time and from time to time as the
Administrative Agent or any Lender may reasonably request, permit the
Administrative Agent or such Lender or any agents or representatives thereof to
examine and make copies of and abstracts from the records and books of account
of, and visit the properties of, the Borrower and any of its Subsidiaries, and
to discuss the affairs, finances and accounts of the Borrower and any of its
Subsidiaries with any of their respective officers or directors; provided,
however, that the Borrower reserves the right to restrict access to any of its
Subsidiaries’ generating facilities in accordance with reasonably adopted
procedures relating to safety and security. The Administrative Agent and each
Lender agree to use reasonable efforts to ensure that any information concerning
the Borrower or any of its Subsidiaries obtained by the Administrative Agent or
such Lender pursuant to this subsection (d) or subsection (g) that is not
contained in a report or other document filed with the SEC, distributed by the
Borrower to its security holders or otherwise generally available to the public,
will, to the extent permitted by law and except as may be required by valid
subpoena or in the normal course of the Administrative Agent’s or such Lender’s
business operations be treated confidentially by the Administrative Agent, or
such Lender, as the case may be, and will not be distributed or otherwise made
available by the Administrative Agent or such Lender, as the case may be, to any
Person, other than the Administrative Agent’s or such Lender’s employees,
authorized agents or representatives (including, without limitation, attorneys
and accountants). Notwithstanding anything herein to the contrary, any party to
this Agreement (and any employee, representative or other agent of such party)
may disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of the transactions contemplated hereunder and all
materials of any kind (including opinions or other tax analyses) that are
provided to it relating to such tax treatment and tax structure. However, no
party shall disclose any information relating to such tax treatment or tax
structure to the extent nondisclosure is necessary in order to comply with
applicable securities laws.

     (e) Keeping of Books. Keep, and cause each Subsidiary to keep, proper books
of record and account in which entries shall be made of all financial
transactions and the assets and business of the Borrower and each of its
Subsidiaries in accordance with GAAP.

     (f) Maintenance of Properties. Maintain and preserve, and cause each of its
Subsidiaries to maintain and preserve, all of its properties that are used or
that are useful in the conduct of its business in good working order and
condition, ordinary wear and tear excepted, it being understood that this
covenant relates only to the good working order and condition of such

31

properties and shall not be construed as a covenant of the Borrower or any of
its Subsidiaries not to dispose of such properties by sale, lease, transfer or
otherwise.

     (g) Reporting Requirements. Furnish, or cause to be furnished, to the
Administrative Agent, with sufficient copies for each Lender, the following:

     (i) promptly after the occurrence of any Event of Default, the statement of
an authorized officer of the Borrower setting forth details of such Event of
Default and the action that the Borrower has taken or propose to take with
respect thereto;

     (ii) as soon as available and in any event within 50 days after the close
of each of the first three quarters in each fiscal year of the Borrower,
consolidated balance sheets of the Borrower and its Subsidiaries as at the end
of such quarter and consolidated statements of income of the Borrower and its
Subsidiaries for the period commencing at the end of the previous fiscal year
and ending with the end of such quarter, fairly presenting the financial
condition of the Borrower and its Subsidiaries as at such date and the results
of operations of the Borrower and its Subsidiaries for such period and setting
forth in each case in comparative form the corresponding figures for the
corresponding period of the preceding fiscal year, all in reasonable detail and
duly certified (subject to year-end audit adjustments) by the chief financial
officer, treasurer, assistant treasurer or controller of the Borrower as having
been prepared in accordance with GAAP consistently applied;

     (iii) as soon as available and in any event within 105 days after the end
of each fiscal year of the Borrower, a copy of the annual report for such year
for the Borrower and its Subsidiaries, containing consolidated and consolidating
financial statements of the Borrower and its Subsidiaries for such year
certified in a manner acceptable to the Lenders by PricewaterhouseCoopers LLP or
other independent public accountants acceptable to the Lenders, together with
statements of projected financial performance prepared by management for the
next fiscal year, in form satisfactory to the Administrative Agent;

     (iv) concurrently with the delivery of the financial statements specified
in clauses (ii) and (iii) above a certificate of the chief financial officer,
treasurer, assistant treasurer or controller of the Borrower (A) stating whether
he has any knowledge of the occurrence at any time prior to the date of such
certificate of an Event of Default not theretofore reported pursuant to the
provisions of clause (i) of this subsection (g) or of the occurrence at any time
prior to such date of any such Event of Default, except Events of Default
theretofore reported pursuant to the provisions of clause (i) of this subsection
(g) and remedied, and, if so, stating the facts with respect thereto, and
(B) setting forth in a true and correct manner, the calculation of the ratios
contemplated by Section 5.02 hereof, as of the date of the most recent financial
statements accompanying such certificate, to show the Borrower’s compliance with
or the status of the financial covenants contained in Section 5.02 hereof;

32

     (v) promptly after the sending or filing thereof, copies of all reports
that the Borrower sends to any of its securityholders, and copies of all reports
on Form 10-K, Form 10-Q or Form 8-K that the Borrower or any of its Subsidiaries
files with the SEC;

     (vi) as soon as possible and in any event (A) within 30 days after the
Borrower or any member of the Controlled Group knows or has reason to know that
any Termination Event described in clause (i) of the definition of Termination
Event with respect to any Plan has occurred and (B) within 10 days after the
Borrower or any member of the Controlled Group knows or has reason to know that
any other Termination Event with respect to any Plan has occurred, a statement
of the chief financial officer of the Borrower describing such Termination Event
and the action, if any, that the Borrower or such member of the Controlled
Group, as the case may be, proposes to take with respect thereto;

     (vii) promptly and in any event within two Business Days after receipt
thereof by the Borrower or any member of the Controlled Group from the PBGC,
copies of each notice received by the Borrower or any such member of the
Controlled Group of the PBGC’s intention to terminate any Plan or to have a
trustee appointed to administer any Plan;

     (viii) promptly and in any event within 30 days after the filing thereof
with the Internal Revenue Service, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) with respect to each Plan;

     (ix) promptly and in any event within five Business Days after receipt
thereof by the Borrower or any member of the Controlled Group from a
Multiemployer Plan sponsor, a copy of each notice received by the Borrower or
any member of the Controlled Group concerning the imposition of withdrawal
liability pursuant to Section 4202 of ERISA;

     (x) promptly and in any event within five Business Days after Moody’s or
S&P has changed any relevant Reference Rating, notice of such change; and

     (xi) such other information respecting the condition or operations,
financial or otherwise, of the Borrower or any of its Subsidiaries, including,
without limitation, copies of all reports and registration statements that the
Borrower or any Subsidiary files with the SEC or any national securities
exchange, as the Administrative Agent or any Lender (through the Administrative
Agent) may from time to time reasonably request.

     SECTION 5.02. Financial Covenants of the Borrower.

     Unless the Majority Lenders shall otherwise consent in writing, so long as
any amount payable by the Borrower hereunder shall remain unpaid or any Lender
shall have any Commitment hereunder, the Borrower will:

     (a) Fixed Charge Ratio. Maintain (determined as of the last day of each
fiscal quarter) a Fixed Charge Ratio of at least 2.00 to 1.00.

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     (b) Debt to Capitalization Ratio. Not permit the ratio of Consolidated Debt
on the last day of any fiscal quarter of the Borrower to Total Capitalization on
such day to exceed 0.65 to 1.00.

     SECTION 5.03. Negative Covenants of the Borrower.

     Unless the Majority Lenders shall otherwise consent in writing, so long as
any amount payable by the Borrower hereunder shall remain unpaid, or any Lender
shall have any Commitment hereunder, the Borrower will not:

     (a) Sales, Etc. (i) Sell, lease, transfer or otherwise dispose of any
shares of common stock of any of its Significant Subsidiaries, whether now owned
or hereafter acquired, or permit any of its Significant Subsidiaries to do so or
(ii) permit the Borrower or any Subsidiary to sell, lease, transfer or otherwise
dispose of (whether in one transaction or a series of transactions) assets
representing in the aggregate more than 15% (determined at the time of each such
transaction) of the value of all of the consolidated fixed assets of the
Borrower, as reported on the most recent consolidated balance sheet of the
Borrower, to any entity other than the Borrower or any of its wholly owned
direct or indirect Subsidiaries. Notwithstanding the foregoing, the Borrower and
its Significant Subsidiaries may consummate the transactions, including
transfers of assets, contemplated by the Ohio Transition Plan Order.

     (b) Liens, Etc. Create or suffer to exist, or permit any of its Significant
Subsidiaries to create or suffer to exist, any Lien upon or with respect to any
of its properties (including, without limitation, any shares of any class of
equity security of any of its Significant Subsidiaries), in each case to secure
or provide for the payment of Indebtedness, other than (i) liens consisting of
(A) pledges or deposits in the ordinary course of business to secure obligations
under worker’s compensation laws or similar legislation, (B) deposits in the
ordinary course of business to secure, or in lieu of, surety, appeal, or customs
bonds to which the Borrower or Significant Subsidiary is a party, (C) pledges or
deposits in the ordinary course of business to secure performance in connection
with bids, tenders or contracts (other than contracts for the payment of money),
or (D) materialmen’s, mechanics’, carriers’, workers’, repairmen’s or other like
Liens incurred in the ordinary course of business for sums not yet due or
currently being contested in good faith by appropriate proceedings diligently
conducted, or deposits to obtain in the release of such Liens; (ii) purchase
money liens or purchase money security interests upon or in any property
acquired or held by the Borrower or Significant Subsidiary in the ordinary
course of business, which secure the purchase price of such property or secure
indebtedness incurred solely for the purpose of financing the acquisition of
such property; (iii) Liens existing on the property of any Person at the time
that such Person becomes a direct or indirect Significant Subsidiary of the
Borrower or Significant Subsidiary; provided that such Liens were not created to
secure the acquisition of such Person; (iv) Liens in existence on the date of
this Agreement; (v) Liens created by the First Mortgage Indenture or the Second
Mortgage Indenture, so long as (A) in each case, under the terms thereof no
“event of default” (howsoever designated) in respect of any bonds issued
thereunder will be triggered by reference to an Event of Default hereunder or an
event which, with the giving of notice or lapse of time or both, would
constitute an Event of Default hereunder and (B) no such Liens shall apply to
assets acquired from the Borrower or any Significant Subsidiary if such assets
were free of Liens (other than as a result of a release of such Liens in
contemplation of such acquisition) immediately prior to any such acquisition;
(vi) Liens

34

securing Stranded Cost Securitization Bonds, (vii) Liens on cash (in an
aggregate amount not to exceed $270,000,000) pledged to secure reimbursement
obligations for letters of credit issued for the account of the Borrower and
(viii) Liens created for the sole purpose of extending, renewing or replacing in
whole or in part Indebtedness secured by any Lien referred to in the foregoing
clauses (i) through (vii); provided, however, that the principal amount of
Indebtedness secured thereby shall not exceed the principal amount of
Indebtedness so secured at the time of such extension, renewal or replacement,
and that such extension, renewal or replacement, as the case may be, shall be
limited to all or a part of the property or Indebtedness that secured the Lien
so extended, renewed or replaced (and any improvements on such property).

     (c) Mergers, Etc. Merge with or into or consolidate with or into any other
Person, or permit any of its Subsidiaries to do so unless (i) immediately after
giving effect thereto, no event shall occur and be continuing that constitutes
an Event of Default, (ii) the consolidation or merger shall not materially and
adversely affect the ability of the Borrower (or its successor by merger or
consolidation as contemplated by clause (i) of this subsection (c)) to perform
its obligations hereunder or under any other Loan Document, and (iii) in the
case of any merger or consolidation to which the Borrower is a party, the
corporation formed by such consolidation or into which the Borrower shall be
merged shall assume the Borrower’s obligations under this Agreement and the
other Loan Documents to which it is a party in a writing satisfactory in form
and substance to the Majority Lenders.

     (d) Nature of Business. Except as may be provided for or contemplated by
the Ohio Transition Plan Order, fail to continue to engage in the same type of
business as it is engaged in on the date hereof without material reduction or
change in nature.

     (e) Compliance with ERISA. (i) Enter into any “prohibited transaction” (as
defined in Section 4975 of the Code, and in ERISA) involving any Plan that may
result in any liability of the Borrower to any Person that (in the opinion of
the Majority Lenders) is material to the financial position or operations of the
Borrower or (ii) allow or suffer to exist any other event or condition known to
the Borrower that results in any liability of the Borrower to the PBGC that (in
the opinion of the Majority Lenders) is material to the financial position or
operations of the Borrower. For purposes of this subsection (d), “liability”
shall not include termination insurance premiums payable under Section 4007 of
ERISA.

     (f) Use of Proceeds. Use the proceeds of any Borrowing for any purpose
other than working capital and other general corporate purposes of the Borrower
and its Subsidiaries.

ARTICLE VI
EVENTS OF DEFAULT

     SECTION 6.01. Events of Default.

     If any of the following events (“Events of Default”) shall occur and be
continuing:

     (a) Any principal of, or interest on, any Advance, or any fees or other
amounts payable hereunder shall not be paid when the same become due and
payable; or

35

     (b) Any representation or warranty made by the Borrower (or any of its
officers) in any Loan Document or in connection with any Loan Document shall
prove to have been incorrect or misleading in any material respect when made; or

     (c) (i) The Borrower shall fail to perform or observe any covenant set
forth in Section 5.02 or Section 5.03 on its part to be performed or observed or
(ii) the Borrower shall fail to perform or observe any other term, covenant or
agreement contained in this Agreement or any other Loan Document on its part to
be performed or observed and such failure shall remain unremedied for 30 days
after written notice thereof shall have been given to the Borrower by the
Administrative Agent or any Lender; or

     (d) Any material provision of this Agreement or any other Loan Document
shall at any time and for any reason cease to be valid and binding upon the
Borrower, except pursuant to the terms thereof, or shall be declared to be null
and void, or the validity or enforceability thereof shall be contested by the
Borrower, any of its affiliates or any Governmental Authority, or the Borrower
shall deny that it has any or further liability or obligation under this
Agreement or any other Loan Document; or

     (e) The Borrower or any Significant Subsidiary shall fail to pay any
principal of or premium or interest on any Indebtedness (other than Indebtedness
under this Agreement) that is outstanding in a principal amount in excess of
$20,000,000 in the aggregate when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Indebtedness; or any other event
shall occur or condition shall exist under any agreement or instrument relating
to any such Indebtedness and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the maturity of
such Indebtedness; or any such Indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or

     (f) The Borrower or any Significant Subsidiary shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Borrower or
any Significant Subsidiary seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition or arrangement with creditors, a readjustment
of its debts, in each case under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, custodian or other similar official
for it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted or acquiesced in by it),
either such proceeding shall remain undismissed or unstayed for a period of 60
consecutive days, or any of the actions sought in such proceeding (including,
without limitation, the entry of an order for relief against, or the appointment
of a receiver, trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or the Borrower or any
Significant Subsidiary shall take any corporate action to authorize or to
consent to any of the actions set forth above in this subsection (f); or

36

     (g) Any judgment or order for the payment of money exceeding any applicable
insurance coverage by more than $10,000,000 shall be rendered by a court of
final adjudication against the Borrower or any Significant Subsidiary and either
(i) valid enforcement proceedings shall have been commenced by any creditor upon
such judgment or order or (ii) there shall be any period of 10 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or

     (h) Any Termination Event with respect to a Plan shall have occurred, and,
30 days after notice thereof shall have been given to the Borrower by the
Administrative Agent or any Lender, (i) such Termination Event (if correctable)
shall not have been corrected and (ii) the then Unfunded Vested Liabilities of
such Plan exceed $10,000,000 (or in the case of a Termination Event involving
the withdrawal of a “substantial employer” (as defined in Section 4001(a)(2) of
ERISA), the withdrawing employer’s proportionate share of such excess shall
exceed such amount), or the Borrower or any member of the Controlled Group as
employer under a Multiemployer Plan shall have made a complete or partial
withdrawal from such Multiemployer Plan and the Plan sponsor of such
Multiemployer Plan shall have notified such withdrawing employer that such
employer has incurred a withdrawal liability in an amount exceeding $10,000,000;
or

     (i) Any change in Applicable Law or any Governmental Action shall occur
that has the effect of making the transactions contemplated by this Agreement or
any other Loan Document unauthorized, illegal or otherwise contrary to
Applicable Law; or

     (j) (i) The Parent shall fail to own directly or indirectly 100% of the
issued and outstanding shares of common stock of the Borrower, (ii) any Person
or two or more Persons acting in concert shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of securities of the Parent (or other securities convertible into
such securities) representing 30% or more of the combined voting power of all
securities of the Parent entitled to vote in the election of directors;
(iii) commencing after the date of this Agreement, individuals who as of the
date of this Agreement were directors shall have ceased for any reason to
constitute a majority of the Board of Directors of the Parent unless the Persons
replacing such individuals were nominated by the stockholders or the Board of
Directors of the Parent in accordance with the Parent’s Code of Regulations; or
(iv) 90 days shall have elapsed after any Person or two or more Persons acting
in concert shall have entered into a contract or arrangement which upon
consummation will result in its or their acquisition of, or control over,
securities of the Parent (or other securities convertible into such securities)
representing 30% or more of the combined voting power of all securities of the
Parent entitled to vote in the election of directors (each a “Change of
Control”).

then, and in any such event, the Administrative Agent shall at the request, or
may with the consent, of the Majority Lenders, (i) by notice to the Borrower,
declare the obligation of each Lender to make Advances, to be terminated,
whereupon the same shall forthwith terminate and (ii) by notice to the Borrower,
declare the Advances and all other amounts payable under this Agreement and the
other Loan Documents to be forthwith due and payable, whereupon the Advances and
all such amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly

37

waived by the Borrower; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to the Borrower or any
Significant Subsidiary under the Bankruptcy Code, (A) the obligation of each
Lender to make Advances, shall automatically be terminated and (B) all Advances
and all other amounts payable under this Agreement shall automatically become
and be due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by the Borrower.

ARTICLE VII
THE AGENT

     SECTION 7.01. Authorization and Action.

     Each Lender hereby appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement the Administrative Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Majority Lenders,
and such instructions shall be binding upon all Lenders; provided, however, that
the Administrative Agent shall not be required to take any action which exposes
the Administrative Agent to personal liability or which is contrary to this
Agreement or applicable law. The Administrative Agent agrees to give to each
Lender prompt notice of each notice given to it by the Borrower pursuant to the
terms of this Agreement and to promptly forward to each Lender the financial
statements delivered to the Administrative Agent pursuant to Section 5.01(g).

     SECTION 7.02. Agent’s Reliance, Etc.

     Neither the Administrative Agent nor any of its directors, officers, agents
or employees shall be liable to any Lender or the Borrower for any action taken
or omitted to be taken by it or them under or in connection with this Agreement,
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Administrative Agent: (i) may
treat each Lender listed in the Register as a “Lender” with a Commitment in the
amount recorded in the Register until the Administrative Agent receives and
accepts an Assignment and Acceptance entered into by a Lender listed in the
Register, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 8.07, at which time the Administrative Agent will make such recordations
in the Register as are appropriate to reflect the assignment effected by such
Assignment and Acceptance; (ii) may consult with legal counsel (including
counsel for the Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations (whether written or oral) made in or in connection with the Loan
Documents; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of the
Loan Documents on the part of the Borrower or to inspect the property (including
the books and records) of the Borrower; (v) shall not be

38

responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
other instrument or document furnished pursuant thereto; and (vi) shall incur no
liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier,
telegram or cable) believed by it in good faith to be genuine and signed or sent
by the proper party or parties.

     SECTION 7.03. Citibank and Affiliates.

     With respect to its Commitment, the Advances made by it and any Note issued
to it, Citibank shall have the same rights and powers under this Agreement as
any other Lender and may exercise the same as though it were not the
Administrative Agent; and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated, include Citibank in its individual capacity. Citibank and
its affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, the Borrower,
any of its respective subsidiaries and any Person who may do business with or
own securities of the Borrower or any such subsidiary, all as if Citibank were
not the Administrative Agent and without any duty to account therefor to the
Lenders.

     SECTION 7.04. Lender Credit Decision.

     Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on the financial
statements referred to in Section 4.01(g) and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.

     SECTION 7.05. Indemnification.

     The Lenders agree to indemnify the Administrative Agent (to the extent not
reimbursed by the Borrower), ratably according to the amounts of their
respective Commitments, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against the Administrative Agent in any way relating to or
arising out of this Agreement or any action taken or omitted by the
Administrative Agent under this Agreement; provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Administrative Agent’s gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse the Administrative
Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including reasonable counsel fees) incurred by the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, to the extent that such expenses are
reimbursable by the Borrower but for which the Administrative Agent is not
reimbursed by the Borrower.

39

     SECTION 7.06. Successor Agent.

     The Administrative Agent may resign at any time by giving written notice
thereof to the Lenders and the Borrower and may be removed at any time with or
without cause by the Majority Lenders. Upon any such resignation or removal, the
Majority Lenders shall have the right, with the prior written consent of the
Borrower (unless an Event of Default or an event that, with the giving of notice
or the passage of time, or both, would constitute an Event of Default has
occurred and is continuing), which consent shall not be unreasonably withheld or
delayed, to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Majority Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent’s giving of notice of resignation or the Majority Lenders’
removal of the retiring Administrative Agent, then the retiring Administrative
Agent may, on behalf of the Lenders, appoint a successor Administrative Agent,
which shall be a commercial bank described in clause (i) or (ii) of the
definition of “Eligible Assignee” and having a combined capital and surplus of
at least $250,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Administrative Agent’s
resignation or removal hereunder as Administrative Agent, the provisions of this
Article VII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement.
Notwithstanding the foregoing, if no Event of Default, and no event that with
the giving of notice or the passage of time, or both, would constitute an Event
of Default, shall have occurred and be continuing, then no successor
Administrative Agent shall be appointed under this Section 7.06 without the
prior written consent of the Borrower, which consent shall not be unreasonably
withheld or delayed.

ARTICLE VIII
MISCELLANEOUS

     SECTION 8.01. Amendments, Etc.

     No amendment or waiver of any provision of this Agreement or any Note, nor
consent to any departure by the Borrower 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 the
Lenders, do any of the following: (a) waive any of the conditions specified in
Section 3.01, 3.02 or 3.03, (b) increase the Commitments of the Lenders or
subject the Lenders to any additional obligations, (c) reduce the principal of,
or interest on, the Advances or any fees or other amounts payable hereunder, (d)
postpone any date fixed for any payment of principal of, or interest on, the
Advances or any fees or other amounts payable hereunder, (e) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Advances, or the number of Lenders, that shall be required for the Lenders or
any of them to take any action hereunder or (f) amend this Section 8.01; 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

40

above to take such action, affect the rights or duties of the Administrative
Agent under this Agreement; and provided, further, that this Agreement may be
amended and restated without the consent of any Lender or the Administrative
Agent if, upon giving effect to such amendment and restatement, such Lender or
the Administrative Agent, as the case may be, shall no longer be a party to this
Agreement (as so amended and restated) or have any Commitment or other
obligation hereunder and shall have been paid in full all amounts payable
hereunder to such Lender or the Administrative Agent, as the case may be.

     SECTION 8.02. Notices, Etc.

     Unless specifically provided otherwise in this Agreement, all notices and
other communications provided for hereunder shall be in writing (including
telecopier, telegraphic or cable communication) and mailed, telecopied,
telegraphed, cabled or delivered, if to the Borrower, at its address at 76 South
Main Street, Akron, Ohio 44308, Attention: Treasurer, Telecopy: (330) 384-3772;
if to any Bank, at its Domestic Lending Office specified opposite its name on
Schedule I hereto; if to any other Lender, at its Domestic Lending Office
specified in the Assignment and Acceptance pursuant to which it became a Lender;
if to the Administrative Agent, at its address at Two Penns Way, Suite 200, New
Castle, Delaware 19720, Attention: Bank Loan Syndications; or, as to each party,
at such other address as shall be designated by such party in a written notice
to the other parties. All such notices and communications shall, when mailed,
telecopied, telegraphed, telexed or cabled, be effective when deposited in the
mails, telecopied, delivered to the telegraph company or delivered to the cable
company, respectively, except that notices and communications to the
Administrative Agent pursuant to Article II or VII shall not be effective until
received by the Administrative Agent (as the case may be).

     SECTION 8.03. No Waiver; Remedies.

     No failure on the part of any Lender or the Administrative Agent to
exercise, and no delay in exercising, any right hereunder or under any Note
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right 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.

     SECTION 8.04. Costs and Expenses; Indemnification.

     (a) The Borrower agrees to pay on demand all costs and expenses incurred by
the Administrative Agent in connection with the preparation, execution,
delivery, syndication administration, modification and amendment of this
Agreement, any Note and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and out-of-pocket expenses of
counsel for the Administrative Agent with respect thereto and with respect to
advising the Administrative Agent as to its rights and responsibilities under
this Agreement. The Borrower further agrees to pay on demand all costs and
expenses, if any (including, without limitation, reasonable counsel fees and
expenses of counsel), incurred by the Administrative Agent and the Lenders in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of this Agreement, any Note and the other

41

documents to be delivered hereunder, including, without limitation, counsel fees
and expenses in connection with the enforcement of rights under this
Section 8.04(a).

     (b) If any payment of principal of, or Conversion of, any Eurodollar Rate
Advance is made other than on the last day of the Interest Period for such
Advance, as a result of a payment or Conversion pursuant to Section 2.09 or 2.12
or a prepayment pursuant to Section 2.10 or acceleration of the maturity of any
amounts owing hereunder pursuant to Section 6.01 or upon an assignment made upon
demand of the Borrower pursuant to Section 8.07(h) or for any other reason, the
Borrower shall, upon demand by any Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender any amounts required to compensate such Lender for any additional losses,
costs or expenses which it may reasonably incur as a result of such payment or
Conversion, including, without limitation, any loss, cost or expense incurred by
reason of the liquidation or redeployment of deposits or other funds acquired by
any Lender to fund or maintain such Advance. The Borrower’s obligations under
this subsection (b) shall survive the repayment of all other amounts owing to
the Lenders and the Administrative Agent under this Agreement and any Note and
the termination of the Commitments

     (c) The Borrower hereby agrees to indemnify and hold each Lender, the
Administrative Agent and their respective Affiliates and their respective
officers, directors, employees and professional advisors (each, an “Indemnified
Person”) harmless from and against any and all claims, damages, liabilities,
costs or expenses (including reasonable attorney’s fees and expenses, whether or
not such Indemnified Person is named as a party to any proceeding or is
otherwise subjected to judicial or legal process arising from any such
proceeding) that any of them may incur or that may be claimed against any of
them by any Person by reason of or in connection with or arising out of any
investigation, litigation or proceeding related to the Commitments hereunder and
any use or proposed use by the Borrower of the proceeds of any Advance, except
to the extent such claim, damage, liability, cost or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Person’s gross negligence or willful misconduct.
The Borrower’s obligations under this Section 8.04(c) shall survive the
repayment of all amounts owing to the Lenders and the Administrative Agent under
this Agreement and any Note and the termination of the Commitments. If and to
the extent that the obligations of the Borrower under this Section 8.04(c) are
unenforceable for any reason, the Borrower agrees to make the maximum payment in
satisfaction of such obligations that are not unenforceable that is permissible
under Applicable Law or, if less, such amount that may be ordered by a court of
competent jurisdiction.

     (d) To the extent permitted by law, the Borrower also agrees not to assert
any claim against any Indemnified Person on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to actual or
direct damages) in connection with, arising out of, or otherwise relating to
this Agreement, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Advances.

     SECTION 8.05. Right of Set-off.

     Upon the occurrence and during the continuance of any Event of Default each
Lender is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set

42

off and apply any and all deposits (general or special, time or demand,
provisional or final, excluding, however, any payroll accounts maintained by the
Borrower with such Lender if and to the extent that such Lender 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
Lender to or for the credit or the account of the Borrower against any and all
of the obligations of the Borrower now or hereafter existing under this
Agreement and any Note held by such Lender, whether or not such Lender shall
have made any demand under this Agreement or such Note and although such
obligations may be unmatured. Each Lender agrees promptly to notify the Borrower
after any such set-off and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 8.05 are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) which such Lender may have.

     SECTION 8.06. Binding Effect.

     This Agreement shall become effective when it shall have been executed by
the Borrower and the Administrative Agent and when the Administrative Agent
shall have been notified by each Bank that such Bank has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Administrative Agent and each Lender and their respective successors and
permitted assigns, except that the Borrower shall not have the right to assign
its rights or obligations hereunder or any interest herein without the prior
written consent of the Lenders.

     SECTION 8.07. Assignments and Participations.

     (a) Each Lender may, with the prior written consent of the Borrower and the
Administrative Agent (which consents shall not be unreasonably withheld or
delayed and, in the case of the Borrower, shall not be required if an Event of
Default then exists), assign to one or more banks or other entities all or a
portion of its rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, all or a portion of its Commitment,
the Advances owing to it and any Note held by it); provided, however, that
(i) each such assignment shall be of a constant, and not a varying, percentage
of all the assigning Lender’s rights and obligations under this Agreement,
(ii) the amount of the Commitment of the assigning Lender being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event be less than
$5,000,000 (or if less, the entire amount of such Lender’s Commitment) and shall
be an integral multiple of $1,000,000, (iii) each such assignment shall be to an
Eligible Assignee, and (iv) the parties to each such assignment shall execute
and deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note subject to such
assignment and a processing and recordation fee of $3,500. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, (x) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the Lender assignor thereunder shall,
to the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its continuing obligations under this Agreement (and, in the case
of an Assignment and Acceptance

43

covering all or the remaining portion of an assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto).

     (b) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of their
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01(g) and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.

     (c) The Administrative Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Advances owing to,
each Lender from time to time (the “Register”). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.

     (d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Note subject to such assignment, the Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower and the Borrower shall deliver
any Note requested pursuant to Section 2.16 in favor of such assignee or
assignor (as the case may be), after giving effect to such assignment.

44

     (e) Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, all or a
portion of its Commitment, the Advances owing to it and any Note held by it);
provided, however, that (i) such Lender’s obligations under this Agreement
(including, without limitation, its Commitment to the Borrower hereunder) shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Lender shall
remain the holder of any such Note for all purposes of this Agreement, (iv) such
Lender may not subject its ability to consent to any modification of this
Agreement or any Note to the prior consent of the bank or other entity to which
such participation was sold, except in the case of proposed waivers or
modifications with respect to interest, principal and fees payable hereunder and
under any Note and with respect to any extension of the Termination Date, and
(v) the Borrower, the Administrative Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement.

     (f) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 8.07, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Borrower furnished to such Lender by or on behalf of the
Borrower; provided, that prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any confidential information relating to the Borrower
received by it from such Lender.

     (g) Notwithstanding anything to the contrary set forth herein, any Lender
may assign and pledge all or any portion of its rights hereunder and under any
Note (including, without limitation, its rights to receive payments of principal
and interest hereunder and under any Note) to (i) any Federal Reserve Bank (and
its transferees) as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank, as collateral or otherwise, or (ii) any Affiliate of
such Lender, in either case, without notice to or consent of the Borrower or the
Administrative Agent; provided, that no such assignment (other than to an
Eligible Assignee under subsection (a) above) shall release the assigning Lender
from its obligations hereunder.

     (h) If any Lender shall make demand for payment under Section 2.11(a),
2.11(b) or 2.12, or shall deliver any notice to the Administrative Agent
pursuant to Section 2.12 resulting in the suspension of certain obligations of
the Lenders with respect to Eurodollar Rate Advances, then, within 30 days of
such demand (if, and only if, such payment demanded under Section 2.11(a),
2.11(b) or 2.12, as the case may be, shall have been made by the Borrower) or
such notice (if such suspension is still in effect), as the case may be, the
Borrower may demand that such Lender assign in accordance with this Section 8.07
to one or more Eligible Assignees designated by the Borrower all (but not less
than all) of such Lender’s Commitment and the Advances owing to it within the
next 15 days. If any such Eligible Assignee designated by the Borrower shall
fail to consummate such assignment on terms acceptable to such Lender, or if the
Borrower shall fail to designate any such Eligible Assignee for all of such
Lender’s Commitment or Advances, then such Lender may assign such Commitment and
Advances to any other Eligible Assignee in accordance with this Section 8.07
during such 15-day period; it being understood for purposes of this
Section 8.07(h) that such assignment shall be conclusively deemed to be on

45

terms acceptable to such Lender, and such Lender shall be compelled to
consummate such assignment to an Eligible Assignee designated by the Borrower,
if such Eligible Assignee shall agree to such assignment in substantially the
form of Exhibit C hereto and shall offer compensation to such Lender in an
amount equal to the sum of the principal amount of all Advances outstanding to
such Lender plus all interest accrued thereon to the date of such payment plus
all other amounts payable by the Borrower to such Lender hereunder (whether or
not then due) as of the date of such payment accrued in favor of such Lender
hereunder.

     (i) Notwithstanding anything to the contrary contained herein, any Lender
(a “Granting Lender”) may grant to a special purpose funding vehicle (an “SPC”)
of such Granting Lender identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrower, the option to
provide to the Borrower all or any part of any Advance that such Granting Lender
would otherwise be obligated to make to the Borrower pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any such SPC
to make any Advance, (ii) if such SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Advance, the Granting Lender
shall be obligated to make such Advance pursuant to the terms hereof and
(iii) no SPC or Granting Lender shall be entitled to receive any greater amount
pursuant to Section 2.08 or 2.12 than the Granting Lender would have been
entitled to receive had the Granting Lender not otherwise granted such SPC the
option to provide any Advance to the Borrower. The making of an Advance by an
SPC hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Advance were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement for which a Lender would otherwise be
liable so long as, and to the extent that, the related Granting Lender provides
such indemnity or makes such payment. In furtherance of the foregoing, each
party hereto hereby agrees (which agreement shall survive the termination of
this Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior indebtedness
of any SPC, it will not institute against or join any other person in
instituting against such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
State thereof. Notwithstanding the foregoing, the Granting Lender
unconditionally agrees to indemnify the Borrower, the Administrative Agent and
each Lender against all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be incurred by or asserted against the Borrower, the
Administrative Agent or such Lender, as the case may be, in any way relating to
or arising as a consequence of any such forbearance or delay in the initiation
of any such proceeding against its SPC. Each party hereto hereby acknowledges
and agrees that no SPC shall have the rights of a Lender hereunder, such rights
being retained by the applicable Granting Lender. Accordingly, and without
limiting the foregoing, each party hereby further acknowledges and agrees that
no SPC shall have any voting rights hereunder and that the voting rights
attributable to any Advance made by an SPC shall be exercised only by the
relevant Granting Lender and that each Granting Lender shall serve as the
administrative agent and attorney-in-fact for its SPC and shall on behalf of its
SPC receive any and all payments made for the benefit of such SPC and take all
actions hereunder to the extent, if any, such SPC shall have any rights
hereunder. In addition, notwithstanding anything to the contrary contained in
this Agreement any SPC may, with notice to, but without the prior written
consent of, any other party hereto, assign all or a portion of its

46

interest in any Advances to the Granting Lender. This Section may not be amended
without the prior written consent of each Granting Lender, all or any part of
whose Advance is being funded by an SPC at the time of such amendment.

     SECTION 8.08. Governing Law.

     THIS AGREEMENT AND ANY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     SECTION 8.09. Consent to Jurisdiction; Waiver of Jury Trial.

     (a) To the fullest extent permitted by law, the Borrower hereby irrevocably
(i) submits to the non-exclusive jurisdiction of any New York State or Federal
court sitting in New York City and any appellate court from any thereof in any
action or proceeding arising out of or relating to this Agreement, any other
Loan Document, and (ii) agrees that all claims in respect of such action or
proceeding may be heard and determined in such New York State court or in such
Federal court. The Borrower hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding. The Borrower 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 by certified mail of copies of such
process to the Borrower at its address specified in Section 8.02. The Borrower
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.

     (b) THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY OTHER INSTRUMENT
OR DOCUMENT DELIVERED HEREUNDER OR THEREUNDER.

     SECTION 8.10. Severability.

     Any provision of this Agreement that is prohibited, unenforceable or not
authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition, unenforceability or non-authorization without
invalidating the remaining provisions hereof or affecting the validity,
enforceability or legality of such provision in any other jurisdiction.

     SECTION 8.11. Entire Agreement.

     This Agreement and the Notes issued hereunder constitute the entire
contract among the parties relative to the subject matter hereof. Any previous
agreement among the parties with respect to the subject matter hereof is
superseded by this Agreement, except (i) as expressly agreed in any such
previous agreement and (ii) for the Fee Letter. Except as is expressly provided
for herein, nothing in this Agreement, expressed or implied, is intended to
confer upon any party other than the parties hereto any rights, remedies,
obligations or liabilities under or by reason of this Agreement.

47

     SECTION 8.12. Execution in Counterparts.

     This Agreement may be executed in any number of counterparts and by
different parties hereto 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.

S-1

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

            OHIO EDISON COMPANY
      By           Name:           Title:        

            CITIBANK, N.A.,
as Administrative Agent
      By           Name:           Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

S-2

            Banks

CITIBANK, N.A.
      By           Name:           Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

S-3

            BARCLAYS BANK PLC
      By           Name:           Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

S-4

            BANK ONE, NA
      By           Name:           Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

S-5

            THE BANK OF NEW YORK
      By           Name:           Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

S-6

            U.S. BANK NATIONAL ASSOCIATION
      By           Name:           Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

S-7

            KEYBANK NATIONAL ASSOCIATION
      By         Name:         Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

S-8

            WACHOVIA BANK, NATIONAL ASSOCIATION
      By         Name:         Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

S-9

            MORGAN STANLEY BANK
      By         Name:         Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

S-10

            THE ROYAL BANK OF SCOTLAND PLC
      By         Name:         Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

S-11

            CREDIT SUISSE FIRST BOSTON,
    CAYMAN ISLANDS BRANCH
      By         Name:         Title:        

                  By         Name:         Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

S-12

            FLEET NATIONAL BANK
      By         Name:         Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

S-13

            UNION BANK OF CALIFORNIA, N.A.
      By         Name:         Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

S-14

            THE BANK OF NOVA SCOTIA
      By         Name:         Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

S-15

            NATIONAL CITY BANK
      By         Name:         Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

S-16

            JPMORGAN CHASE BANK
      By         Name:         Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

S-17

            FIRST COMMERCIAL BANK,
    LOS ANGELES BRANCH
      By         Name:         Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

S-18

            UBS LOAN FINANCE LLC
      By         Name:         Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

S-19

            LEHMAN COMMERCIAL PAPER INC.
      By         Name:         Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

S-20

            LASALLE BANK
      By         Name:         Title:        

SIGNATURE PAGE TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

SCHEDULE I

List of Commitments and Lending Offices

                  Lender   Allocation   Domestic Lending Office   Eurodollar
Lending Office
Barclays Bank PLC
  $ 12,062,500.00     Barclays Bank PLC
200 Park Avenue
New York, NY 10166   Same as Domestic
 
               
Citibank, N.A.
  $ 12,062,500.00     One Court Square
7th floor, Zone 2
Long Island City, NY 11120
  Same as Domestic
 
               
Bank One, NA
  $ 10,987,500.00     1 Bank One Plaza
Suite IL1-0010
Chicago, IL 60670
Attn: Brenda De Los Reyes   Same as Domestic
 
               
Wachovia Bank, National
Association
  $ 10,987,500.00     301 South College Street
5th Floor
One Wachovia Center
Charlotte, NC 28288-0251   Same as Domestic
 
               
JPMorgan Chase Bank
  $ 10,987,500.00     1 Chase Manhattan Plaza
New York, NY 10081   Same as Domestic
 
               
The Bank of New York
  $ 7,500,000.00     One Wall Street
New York, NY 10286   Same as Domestic
 
               
KeyBank National Association
  $ 7,500,000.00     127 Public Square
Cleveland, OH 44114   Same as Domestic
 
               
Morgan Stanley Bank
  $ 10,000,000.00     1633 Broadway — 25th Floor
New York, NY 10019
Attn: James Morgan   Same as Domestic
 
               
The Royal Bank of Scotland plc
  $ 5,625,000.00     101 Park Avenue
New York, NY 10178   Same as Domestic
 
               
Fleet National Bank
  $ 4,162,500.00     100 Federal Street
Boston, MA 02110   Same as Domestic
 
               
Union Bank of California, N.A.
  $ 3,125,000.00     445 South Figueroa St.
15th Floor
Los Angeles, CA 90071   Same as Domestic

SCHEDULE I TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

2

                  Lender   Allocation   Domestic Lending Office   Eurodollar
Lending Office
The Bank of Nova Scotia
  $ 3,125,000.00     The Bank of Nova Scotia,
New York Agency
One Liberty Plaza
New York, NY 10006   Same as Domestic
 
               
National City Bank
  $ 3,125,000.00     One Cascade Plaza
Akron, OH 44308   Same as Domestic
 
               
U.S. Bank National Association
  $ 3,125,000.00     U.S. Bank Tower
425 Walnut Street
ML CNOHW8
Cincinnati, OH 45201   Same as Domestic
 
               
Credit Suisse First Boston
  $ 5,625,000.00     One Madison Avenue
New York, NY 10010   Same as Domestic
 
               
UBS Loan Finance LLC
  $ 5,625,000.00     677 Washington Boulevard
6th Floor South
Stamford, CT 06901   Same as Domestic
 
               
LaSalle Bank
  $ 3,125,000.00     135 S. LaSalle Street
Suite 1425
Chicago, IL 60603   Same as Domestic
 
               
First Commercial Bank
Los Angeles Branch
  $ 3,125,000.00     515 South Flower Street
Suite 1050
Los Angeles, CA 90071
  Same as Domestic
 
               
Lehman Commercial Paper Inc.
  $ 3,125,000.00     745 7th Avenue, 16th Floor
New York, NY 10019
Attn: Marie Cowell   Same as Domestic

SCHEDULE I TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

SCHEDULE II

Litigation

On August 14, 2003, eight states in the Northeast U.S. and southern Canada,
covering a geographic area reportedly having approximately 50 million people,
experienced a widespread power outage. That outage affected approximately
1.4 million customers in the service area of FirstEnergy Corp. (“FirstEnergy”),
the parent company of the Borrower. The causes of the outage have not yet been
determined, although various industry, media and other reports initially alleged
that the outage began in FirstEnergy’s system. More recent reports point to a
wide range of contributing factors. FirstEnergy is in the process of
accumulating data and evaluating the status of its electrical system prior to
and during the outage event and understands that the same effort is under way at
utilities and transmission operators across the region.

Congressional committees, state utility commissions and others have commenced
investigations and inquiries into the causes and implications of the outage. In
addition, a joint U.S.-Canada Task Force has been formed to investigate the
events, with the U.S. Department of Energy coordinating the U.S. portion of this
investigation. The consensus of the investigating entities is that extensive
data needs to be gathered and analyzed in order to determine with any degree of
certainty the circumstances that led to the outage. FirstEnergy has been working
closely with the U.S.-Canada Task Force and other appropriate groups involved to
determine exactly what events led to the outage. The various inquiries could
take many months to complete, given the complexity of the issues involved, the
number of parties involved and the amount of data to be collected and analyzed.

A number of lawsuits have been filed against FirstEnergy in connection with the
August 14th regional outage by individuals seeking court certification to
represent a class of similarly situated persons who allegedly suffered damages
as a result of the outage.

A number of individual shareholder-plaintiffs have filed separate complaints
against FirstEnergy, its Board of Directors and certain of its executive
officers alleging that FirstEnergy and the named officers reported materially
false and misleading financial results over the relevant periods in violation of
federal securities laws in connection with the recent restatement of earnings,
the August 14th regional outage and the on-going outage at the Davis-Besse
Nuclear Power Plant. In each case, the plaintiffs are seeking certification from
the court to represent a class of similarly situated shareholders.

In addition, FirstEnergy has been served with a derivative complaint filed by an
individual shareholder on behalf of other shareholders against FirstEnergy and
its Board of Directors, alleging a series of breaches of fiduciary duties by the
directors and certain officers of FirstEnergy relating to the issues surrounding
the regional power outage, the recent restatement of earnings and the on-going
outage at the Davis-Besse Nuclear Power Plant.

In addition to these legal proceedings and depending upon the outcomes of the
governmental and other investigations of the outage, it is possible that
additional regulatory proceedings or legal actions may be instituted against
FirstEnergy or the Borrower. Two such proceedings have already been initiated at
the Public Utilities Commission of Ohio (PUCO). One such complaint, made by a
local congressman, alleges that certain subsidiaries of FirstEnergy, including
the Borrower, failed to provide reasonable and adequate service under applicable
Ohio law. The

SCHEDULE II TO OHIO EDISON 3-YEAR CREDIT AGREEMENT

2

complaint seeks the authorization for another electric supplier to furnish
electric service within the Ohio-based franchise territory of those
subsidiaries. The other PUCO matter relates to a private advocacy group seeking
to intervene in the first proceeding.

SCHEDULE II TO OHIO EDISON 3-YEAR CREDIT AGREEMENT