EXHIBIT 10.1

 
U.S. $2,750,000,000
 
CREDIT AGREEMENT
 
Dated as of August 24, 2006
 
Among
 
FIRSTENERGY CORP., FIRSTENERGY SOLUTIONS CORP., AMERICAN TRANSMISSION SYSTEMS,
INCORPORATED, OHIO EDISON COMPANY, PENNSYLVANIA POWER COMPANY, THE CLEVELAND
ELECTRIC ILLUMINATING COMPANY, THE TOLEDO EDISON COMPANY, JERSEY CENTRAL POWER &
LIGHT COMPANY, METROPOLITAN EDISON COMPANY and PENNSYLVANIA ELECTRIC COMPANY,
as Borrowers,
 
THE BANKS NAMED HEREIN,
as Banks,
 
CITIBANK, N.A.,
as Administrative Agent,
 
THE FRONTING BANKS
PARTY HERETO FROM TIME TO TIME
as Fronting Banks
 
and
 
THE SWING LINE LENDERS PARTY
HERETO FROM TIME TO TIME
as Swing Line Lenders
   
CITIGROUP GLOBAL MARKETS INC.
and
BARCLAYS CAPITAL
Joint Lead Arrangers
 
BARCLAYS BANK PLC
Syndication Agent
 
JPMORGAN CHASE BANK, N.A.
KEYBANK NATIONAL ASSOCIATION
WACHOVIA BANK, NATIONAL ASSOCIATION
Co-Documentation Agents

 
 

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TABLE OF CONTENTS

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
     
SECTION 1.01
Certain Defined Terms.
1
SECTION 1.02
Computation of Time Periods.
18
SECTION 1.03
Accounting Terms.
19
SECTION 1.04
Certain References.
19
     
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES AND LETTERS OF CREDIT
     
SECTION 2.01
The Pro-Rata Advances.
19
SECTION 2.02
Making the Pro-Rata Advances.
19
SECTION 2.03
Swing Line Advances.
21
SECTION 2.04
Letters of Credit.
24
SECTION 2.05
Fees.
31
SECTION 2.06
Adjustment of the Commitments; Borrower Submits.
32
SECTION 2.07
Repayment of Advances.
34
SECTION 2.08
Interest on Advances.
34
SECTION 2.09
Additional Interest on Advances.
35
SECTION 2.10
Interest Rate Determination.
36
SECTION 2.11
Conversion of Advances.
36
SECTION 2.12
Prepayments.
37
SECTION 2.13
Increased Costs.
38
SECTION 2.14
Illegality.
39
SECTION 2.15
Payments and Computations
40
SECTION 2.16
Taxes.
42
SECTION 2.17
Sharing of Payments, Etc.
43
SECTION 2.18
Noteless Agreement; Evidence of Indebtedness.
44
SECTION 2.19
Extension of Termination Date.
44
SECTION 2.20
Several Obligations.
46
     
ARTICLE III
CONDITIONS OF LENDING AND ISSUING LETTERS OF CREDIT
     
SECTION 3.01
Conditions Precedent to Initial Extension of Credit.
46
SECTION 3.02
Conditions Precedent to Each Extension of Credit.
48
SECTION 3.03
Conditions Precedent to Conversions.
49
SECTION 3.04
Conditions Precedent to Extensions of Credit after Expiration of Approval.
50
     
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
     
SECTION 4.01
Representations and Warranties of the Borrowers.
50
     

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TABLE OF CONTENTS (CONTINUED)

ARTICLE V
COVENANTS OF THE BORROWERS
     
SECTION 5.01
Affirmative Covenants of the Borrowers.
54
SECTION 5.02
Debt to Capitalization Ratio.
57
SECTION 5.03
Negative Covenants of the Borrowers.
57
     
ARTICLE VI
EVENTS OF DEFAULT
     
SECTION 6.01
Events of Default.
59
     
ARTICLE VII
THE ADMINISTRATIVE AGENT
     
SECTION 7.01
Authorization and Action.
62
SECTION 7.02
Administrative Agent’s Reliance, Etc.
63
SECTION 7.03
CUSA, Barclays and Affiliates.
63
SECTION 7.04
Lender Credit Decision.
64
SECTION 7.05
Indemnification.
64
SECTION 7.06
Successor Administrative Agent.
64
     
ARTICLE VIII
MISCELLANEOUS
     
SECTION 8.01
Amendments, Etc.
65
SECTION 8.02
Notices, Etc.
66
SECTION 8.03
Electronic Communications.
66
SECTION 8.04
No Waiver; Remedies.
67
SECTION 8.05
Costs and Expenses; Indemnification.
68
SECTION 8.06
Right of Set-off.
69
SECTION 8.07
Binding Effect.
69
SECTION 8.08
Assignments and Participations.
70
SECTION 8.09
Governing Law.
73
SECTION 8.10
Consent to Jurisdiction; Waiver of Jury Trial.
73
SECTION 8.11
Severability.
74
SECTION 8.12
Entire Agreement.
74
SECTION 8.13
Execution in Counterparts.
74
SECTOPM 8.14
USA PATRIOT Act Notice.
74

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SCHEDULES AND EXHIBITS

Schedule I
-
List of Commitments and Lending Offices
Schedule II
-
List of L/C Fronting Bank Commitments
Schedule III
-
List of Swing Line Commitments
Schedule IV
-
Letters of Credit
     
Exhibit A
-
Form of Assignment and Acceptance
Exhibit B
-
Form of Note
Exhibit C
-
Form of Guaranty
Exhibit D
-
Form of Notice of Pro-Rata Borrowing
Exhibit E
-
Form of Notice of Swing Line Borrowing
Exhibit F
-
Form of Letter of Credit Request
Exhibit G
-
Form of Opinion of Gary D. Benz, Esq.
Exhibit H
-
Form of Opinion of Akin Gump Strauss Hauer & Feld LLP
Exhibit I
-
Form of Opinion of King & Spalding LLP

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CREDIT AGREEMENT

CREDIT AGREEMENT, dated as of August 24, 2006, among FIRSTENERGY CORP., an Ohio
corporation (“FE”), FIRSTENERGY SOLUTIONS CORP., an Ohio corporation (“FES”),
AMERICAN TRANSMISSION SYSTEMS, INCORPORATED, an Ohio corporation (“ATSI”), OHIO
EDISON COMPANY, an Ohio corporation (“OE”), PENNSYLVANIA POWER COMPANY, a
Pennsylvania corporation (“Penn”), THE CLEVELAND ELECTRIC ILLUMINATING COMPANY,
an Ohio corporation (“CEI”), THE TOLEDO EDISON COMPANY, an Ohio corporation
(“TE”), JERSEY CENTRAL POWER & LIGHT COMPANY, a New Jersey corporation
(“JCP&L”), METROPOLITAN EDISON COMPANY, a Pennsylvania corporation (“Met-Ed”),
and PENNSYLVANIA ELECTRIC COMPANY, a Pennsylvania corporation (“Penelec”, and
together with FE, FES, ATSI, OE, Penn, CEI, TE, JCP&L and Met-Ed, the
“Borrowers”), the banks and other financial institutions (the “Banks”) listed on
the signature pages hereof, Citibank, N.A. (“Citibank”), as Administrative Agent
(the “Administrative Agent”) for the Lenders hereunder, the fronting banks party
hereto from time to time and the swing line lenders party hereto from time to
time.
 

PRELIMINARY STATEMENTS

(1) The Borrowers have requested that the Lenders establish a five-year
unsecured revolving credit facility in the amount of $2,750,000,000 in favor of
the Borrowers, all of which may be used for general corporate purposes and the
entirety of which may be used for the issuance of Letters of Credit.
 
(2) Subject to the terms and conditions of this Agreement, the Lenders
severally, to the extent of their respective Commitments (as defined herein),
are willing to establish the requested revolving credit facility in favor of the
Borrowers.
 
NOW, THEREFORE, in consideration of the premises, the parties hereto agree as
follows:
 
ARTICLE III  
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):
 
“Account Party” has the meaning set forth in Section 2.04(a).
 
“Additional Lender” has the meaning set forth in Section 2.06(b).
 
“Administrative Agent” has the meaning set forth in the preamble hereto.
 

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“Advance” means a Pro-Rata Advance or a Swing Line Advance.
 
“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 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 its “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 Alternate Base Rate Pro-Rata Advance or
an Alternate Base Rate Swing Line Advance.
 
“Alternate Base Rate Pro-Rata Advance” means a Pro-Rata Advance that bears
interest as provided in Section 2.08(a).
 
“Alternate Base Rate Swing Line Advance” means a Swing Line Advance that bears
interest as provided in Section 2.08(c).
 
“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 made to any Borrower, the interest rate per annum set forth in the
relevant row of the table below, determined by reference to the Reference
Ratings for such Borrower from time to time in effect:
 

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BASIS FOR PRICING
 
 
LEVEL 1
 
 
Reference Ratings at least A- by S&P or A3 by Moody’s.
 
 
LEVEL 2
 
 
Reference Ratings lower than Level 1 but at least BBB+ by S&P or Baa1 by
Moody’s.
 
 
LEVEL 3
 
 
Reference Ratings of lower than Level 2 but at least BBB by S&P or Baa2 by
Moody’s.
 
 
LEVEL 4
 
 
Reference Ratings lower than Level 3 but at least BBB- by S&P or Baa3 by
Moody’s.
 
 
LEVEL 5
 
 
Reference Ratings lower than Level 4 but at least BB+ by S&P or Ba1 by Moody’s.
 
 
LEVEL 6
 
 
Reference Ratings lower than BB+ by S&P and Ba1 by Moody’s.
 
 
Applicable Margin for Eurodollar Rate Advances
 
 
0.190%
 
 
0.270%
 
 
0.350%
 
 
0.425%
 
 
0.525%
 
 
0.800%
 
 
Applicable Margin for Alternate Base Rate Advances
 
 
0%
 
 
0%
 
 
0%
 
 
0%
 
 
0%
 
 
0%
 
 
Utilization Fee
 
 
0.050%
 
 
0.050%
 
 
0.050%
 
 
0.100%
 
 
0.100%
 
 
0.100%
 

 
provided, that the Applicable Margin shall be increased by the rate per annum
set forth above in the row captioned “Utilization Fee” that corresponds to the
Reference Ratings Level used to determine the Applicable Margin during any
period in which the total amount of Outstanding Credits is greater than one-half
of the aggregate amount of the Commitments.
 
For purposes of the foregoing, (i) if there is a difference of one level in
Reference Ratings of S&P and Moody’s and the higher of such Reference Ratings
falls in Level 1, Level 2, Level 3, Level 4 or Level 5, then the higher
Reference Rating will be used to determine the pricing level and (ii) if there
is a difference of more than one level in Reference Ratings of S&P and Moody’s,
the Reference Rating that is one level above the lower of such Reference Ratings
will be used to determine the pricing level, unless the lower of such Reference
Ratings falls in Level 6, in which case the lower of such Reference Ratings will
be used to determine the pricing level. If there exists only one Reference
Rating, such Reference Rating will be used to determine the pricing level.
 
“Approval” means: (i) with respect to FE, the FE SEC Order; (ii) with respect to
FES, the FES FERC Order, (iii) with respect to ATSI, the ATSI SEC Order; (iv)
with respect to OE, the OE PUCO Order; (v) with respect to Penn, the Penn SEC
Order, subject to any borrowing limitations contained in the Organizational
Documents of Penn; (vi) with respect to CEI, the CEI PUCO Order; (vii) with
respect to TE, the TE PUCO Order; (viii) with respect to JCP&L, the JCP&L SEC
Order, subject to any borrowing limitations contained in the Organizational
Documents of JCP&L; (ix) with respect to Met-Ed, the Met-Ed SEC Order; and (x)
with respect to Penelec, the Penelec SEC Order.
 

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“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 A hereto.
 
“ATSI” has the meaning set forth in the preamble hereto.
 
“ATSI SEC Order” means the order of the SEC that authorized ATSI to obtain
Extensions of Credit until February 8, 2006, which authorization was extended
through December 31, 2007 pursuant to the FERC PUHCA 2005 Filing.
 
“ATSI Supplemental Order” means any order of the FERC or the PUCO that
authorizes ATSI to obtain Extensions of Credit after December 31, 2007.
 
“Available Commitment” means, for each Lender, the excess of such Lender’s
Commitment over such Lender’s Percentage of the Outstanding Credits. “Available
Commitments” shall refer to the aggregate of the Lenders’ Available Commitments
hereunder.
 
“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.
 
“Banks” has the meaning set forth in the preamble hereto.
 
“Barclays” means Barclays Bank PLC.
 
“Beneficiary” means any Person designated by an Account Party to whom a Fronting
Bank is to make payment, or on whose order payment is to be made, under a Letter
of Credit.
 
“Borrower” has the meaning set forth in the preamble hereto and, as the context
may require, includes FE in its capacity as guarantor under any Guaranty.
 
“Borrower Sublimit” means: (i) with respect to FE, $2,750,000,000, (ii) with
respect to FES, $0 (unless and until increased pursuant to Section 2.06(c)),
(iii) with respect to ATSI, $0 (unless and until increased pursuant to Section
2.06(c)), (iv) with respect to OE, $500,000,000, (v) with respect to Penn,
$50,000,000, (vi) with respect to CEI, $250,000,000 (unless and until increased
pursuant to Section 2.06(c)), (vii) with respect to TE, $250,000,000 (unless and
until increased pursuant to Section 2.06(c)), (viii) with respect to JCP&L,
$425,000,000, (ix) with respect to Met-Ed, $250,000,000, and (x) with respect to
Penelec, $250,000,000.
 
“Borrowing” means a Pro-Rata Borrowing or a Swing Line Borrowing.
 
“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.
 

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“CEI” has the meaning set forth in the preamble hereto.
 
“CEI PUCO Order” means the order of the PUCO that authorizes CEI to obtain
Extensions of Credit until December 31, 2006.
 
“CEI Supplemental Order” means any order of the PUCO that authorizes CEI to
obtain Extensions of Credit after December 31, 2006.
 
“Change of Control” has the meaning set forth in Section 6.01(j).
 
“Citibank” has the meaning set forth in the preamble hereto.
 
“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 8.08(c), as such amount may be
reduced pursuant to Section 2.06(a).
 
“Commitment Increase” has the meaning set forth in Section 2.06(b).
 
“Consolidated Debt” means, with respect to any Borrower at any date of
determination the aggregate Indebtedness of such Borrower and its Consolidated
Subsidiaries determined on a consolidated basis in accordance with GAAP, but
shall not include (i) Nonrecourse Indebtedness of such Borrower and any of its
Subsidiaries, (ii) obligations under leases that shall have been or should be,
in accordance with GAAP, recorded as operating leases in respect of which such
Borrower or any of its Consolidated Subsidiaries is liable as a lessee,
(iii) the aggregate principal amount of Stranded Cost Securitization Bonds of
such Borrower and its Consolidated Subsidiaries and (iv) the aggregate principal
amount of Trust Preferred Securities and Junior Subordinated Deferred Interest
Obligations not exceeding 15% of the Total Capitalization of such Borrower and
its Consolidated Subsidiaries (determined, for purposes of such calculation,
without regard to the amount of Trust Preferred Securities and Junior
Subordinated Deferred Interest Debt Obligations outstanding of such Borrower);
provided that the amount of any mandatory principal amortization or defeasance
of Trust Preferred Securities or Junior Subordinated Deferred Interest Debt
Obligations prior to the Termination Date shall be included in this definition
of Consolidated Debt.
 
“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 any Borrower and its Subsidiaries, are treated as a single
employer under Section 414(b) or 414(c) of the Code.
 

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“Convert”, “Conversion” and “Converted” each refers to a conversion of Pro-Rata
Advances of one Type into Pro-Rata Advances of another Type or the selection of
a new, or the renewal of the same, Interest Period for Pro-Rata Eurodollar Rate
Advances pursuant to Section 2.10 or 2.11.
 
“Cost of Funds Swing Line Advance” means a Swing Line Advance that bears
interest as provided in Section 2.08(e).
 
“Date of Issuance” means the date of issuance by a Fronting Bank of a Letter of
Credit under this Agreement.
 
“Debt to Capitalization Ratio” means, for any Borrower, the ratio of
Consolidated Debt of such Borrower to Total Capitalization of such Borrower.
 
“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.
 
“Drawing” means a drawing by a Beneficiary under any Letter of Credit.
 
“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 Bank; 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, if applicable) 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 2.16(d)) and (C) any Person described in clause (i),
(ii), (iii) or (iv) above shall, in addition, be reasonably acceptable to the
Administrative Agent, the Swing Line Lenders and the Fronting Banks.
 

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“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 any Eurodollar Rate Advance
made in connection with any Borrowing, the interest rate per annum at which
eurodollar deposits are offered in the London interbank market for a term
equivalent to such Interest Period determined by reference to Telerate page 3750
at 11:00 a.m. (London time) two Business Days before the first day of such
Interest Period for a period equal to such Interest Period. If such rate is not
available at such time for any reason, then the “Eurodollar Rate” for such
Interest Period shall be the rate per annum determined by the Administrative
Agent to be the rate at which deposits in dollars for delivery on the first day
of such Interest Period in same day funds in the approximate amount of (i) the
Eurodollar Rate Advance being made, continued or converted by Citibank in
connection with such Borrowing (if such Borrowing is a Pro-Rata Borrowing) or
(ii) such Borrowing (if such Borrowing is a Swing Line Borrowing), and with a
term equivalent to such Interest Period would be offered by Citibank, N.A.’s
London branch to major banks in the London interbank eurodollar market at their
request at approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.
 
“Eurodollar Rate Advance” means a Eurodollar Rate Pro-Rata Advance or a
Eurodollar Rate Swing Line Advance.
 
“Eurodollar Rate Pro-Rata Advance” means a Pro-Rata Advance that bears interest
as provided in Section 2.08(b).
 

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“Eurodollar Rate Reserve Percentage” of any Lender for the Interest Period for
any Eurodollar Rate Advance means the reserve percentage applicable during such
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.
 
“Eurodollar Rate Swing Line Advance” means an Advance that bears interest as
provided in Section 2.08(d).
 
“Event of Default” has the meaning set forth 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 Credit Agreement” means the $2.0 Billion Credit Agreement, dated as of
June 14, 2005, among the Borrowers, the banks party thereto, Citicorp USA, Inc.,
as administrative agent, and Citicorp USA, Inc. and Barclays, as fronting banks.
 
“Expiration Date” means, with respect to a Letter of Credit, its stated
expiration date.
 
“Extension of Credit” means the making of any Advance or the issuance or
amendment (including, without limitation, an extension or renewal) of a Letter
of Credit.
 
“FE” has the meaning set forth in the preamble hereto.
 
“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 that
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 July 27, 2006, among FE,
Citigroup Global Markets Inc., Barclays and Barclays Capital.
 
“FERC” means the Federal Energy Regulatory Commission or successor organization.
 

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"FERC PUHCA 2005 Filing" means the informational filing submitted to the FERC on
February 21, 2006, pursuant to the Public Utility Holding Company Act of 2005
and the FERC's Order No. 667, which enabled each Borrower, as applicable, to
continue to rely on the financing authorizations authorized in the SEC Order.
 
“FES” has the meaning set forth in the preamble hereto.
 
“FES FERC Order” means the order issued by the FERC on January 24, 2001, in
Docket Nos. ER01-000 et al. under the Federal Power Act, that granted
FirstEnergy Services, Inc. blanket approval under Part 34 of the FERC's
regulations to issue securities and assume liabilities, to which grant of
blanket approval FES subsequently succeeded through the order of the FERC issued
on October 24, 2001, in Docket Nos. ER01-2968-000 et al.
 
“FES Supplemental Order” means any order of the FERC subsequently issued that
authorizes FES to obtain Extensions of Credit in the event the blanket approval
granted in the FES FERC Order is rescinded or as may otherwise apply.
 
“FE SEC Order” means the order issued by the SEC that authorized FE to obtain
Extensions of Credit until February 8, 2006, which authorization was extended
through December 31, 2007, pursuant to the FERC PUHCA 2005 Filing.
 
“First Mortgage Indenture” means, with respect to any Significant Subsidiary, an
indenture or similar instrument pursuant to which such Person may issue bonds,
notes or similar instruments secured by a lien on all or substantially all of
such Person’s fixed assets.
 
“Fraction” means, for any Borrower at any time, a fraction, the numerator of
which shall be the Borrower Sublimit of such Borrower at such time, and the
denominator of which shall be the sum of the Borrower Sublimits of all Borrowers
at such time.
 
“Fronting Bank” means each Lender identified as a “Fronting Bank” on Schedule II
and any other Lender (in each case, acting directly or through an Affiliate)
that delivers an instrument in form and substance satisfactory to the Borrowers
and the Administrative Agent whereby such other Lender (or its Affiliate) agrees
to act as “Fronting Bank” hereunder and that specifies the maximum aggregate
Stated Amount of Letters of Credit that such other Lender (or its Affiliates)
will agree to issue hereunder.
 
“Fronting Bank Fee Letter” has the meaning set forth in Section 3.01(b).
 
“GAAP” means generally accepted accounting principles in the United States in
effect from time to time.
 
“Generation Transfers” has the meaning set forth in Section 5.03(a).
 

9

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“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.
 
“Guaranty” means a guaranty by FE substantially in the form of Exhibit C hereto.
 
“Hostile Acquisition” means any Target Acquisition (as defined below) involving
a tender offer or proxy contest that has not been recommended or approved by the
board of directors (or similar governing body) of the Person that is the subject
of such Target Acquisition prior to the first public announcement or disclosure
relating to such Target Acquisition. As used in this definition, the term
“Target Acquisition” means any transaction, or any series of related
transactions, by which any Person directly or indirectly (i) acquires all or
substantially all of the assets or ongoing business of any other Person, whether
through purchase of assets, merger or otherwise, (ii) acquires (in one
transaction or as the most recent transaction in a series of transactions)
control of at least a majority in ordinary voting power of the securities of any
such Person that have ordinary voting power for the election of directors or
(iii) otherwise acquires control of more than a 50% ownership interest in any
such Person.
 
“Increasing Lender” has the meaning set forth in Section 2.06(b).
 
“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.
 

10

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“Interest Period” means, for each Eurodollar Rate Advance made to any Borrower
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 Pro-Rata Advance
into such Eurodollar Rate Pro-Rata Advance and ending on the last day of the
period selected by such Borrower pursuant to the provisions below and,
thereafter in the case of Pro-Rata Advances, 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 such Borrower pursuant to the provisions
below. The duration of each such Interest Period shall be (i) in the case of any
Eurodollar Rate Pro-Rata Advance, one, two or three weeks or one, two, three or
six months, or (ii) in the case of any Eurodollar Rate Swing Line Advance or
Cost of Funds Swing Line Advance, a period of not more than 10 days, in each
case as the relevant Borrower may select by notice to the Administrative Agent
pursuant to Section 2.02(a), 2.03(b) or Section 2.11(a); provided, however,
that:
 
(i) no Borrower may select any Interest Period that ends after the latest
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 fifteen different Interest Periods shall apply to outstanding
Pro-Rata 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.
 
“JCP&L” has the meaning set forth in the preamble hereto.
 
“JCP&L SEC Order” means the order of the SEC that authorized JCP&L to obtain
Extensions of Credit until February 8, 2006, which authorization was extended
through December 31, 2007, pursuant to the FERC PUHCA 2005 Filing.
 
“JCP&L Supplemental Order” means any order of the FERC that authorizes JCP&L to
obtain Extensions of Credit after December 31, 2007.
 
“Junior Subordinated Deferred Interest Debt Obligations” means subordinated
deferrable interest debt obligations of any Borrower or one of its Subsidiaries
(A) for which the maturity date is subsequent to the Termination Date and (B)
that are fully subordinated in right of payment to the Indebtedness hereunder.
 
“L/C Commitment Amount” means $2,750,000,000 as the same may be reduced
permanently from time to time pursuant to Section 2.06 hereof.
 

11

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“L/C Fronting Bank Commitment” means, with respect to any Fronting Bank, the
aggregate Stated Amount of all Letters of Credit that such Fronting Bank agrees
to issue, as modified from time to time pursuant to an agreement signed by such
Fronting Bank. With respect to each Lender that is a Fronting Bank on the date
hereof, such Fronting Bank’s L/C Fronting Bank Commitment shall equal such
Fronting Bank’s “L/C Fronting Bank Commitment” listed on Schedule II and, with
respect to any Lender that becomes a Fronting Bank after the date hereof, such
Lender’s L/C Fronting Bank Commitment shall equal the amount agreed upon between
the Borrowers and such Lender at the time that such Lender becomes a Fronting
Bank.
 
“Lenders” means the Banks listed on the signature pages hereof and each Eligible
Assignee that shall become a party hereto pursuant to Section 8.08 and, as the
context requires, includes the Swing Line Lenders.
 
“Letter of Credit” has the meaning set forth in Section 2.04(a).
 
“Letter of Credit Cash Cover” has the meaning set forth in Section 6.01.
 
“Letter of Credit Request” has the meaning set forth in Section 2.04(c).
 
“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, any Guaranty, the Fee Letter
and any Fronting Bank 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 having more than 50% of the
then aggregate Outstanding Credits of the Lenders; provided, that for purposes
hereof, no Borrower, nor any of its Affiliates, if a Lender, shall be included
in (i) the Lenders having such amount of the Commitments or the Advances or
(ii) determining the total amount of the Commitments or the Outstanding Credits.
 
“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.
 
“Met-Ed” has the meaning set forth in the preamble hereto.
 
“Met-Ed SEC Order” means the order of the SEC that authorized Met-Ed to obtain
Extensions of Credit until February 8, 2006, which authorization was extended
through December 31, 2007, pursuant to the FERC PUHCA 2005 Filing.

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“Met-Ed Supplemental Order” means any order of the FERC that authorizes Met-Ed
to obtain Extensions of Credit after December 31, 2007.
 
“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 any 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.

 
“Nonconsenting Lender” has the meaning set forth in Section 2.19(d) hereof.
 
“Note” means any promissory note issued at the request of a Lender pursuant to
Section 2.18 in the form of Exhibit B hereto.
 
“Notice of Pro-Rata Borrowing” means a notice of a Pro-Rata Borrowing pursuant
to Section 2.02(a), which shall be substantially in the form of Exhibit D.
 
“Notice of Swing Line Borrowing” means a notice of a Swing Line Borrowing
pursuant to Section 2.03 which, if in writing, shall be substantially in the
form of Exhibit E.
 

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“OE” has the meaning set forth in the preamble hereto.
 
“OECD” means the Organization for Economic Cooperation and Development.
 
“OE PUCO Order” means the order of the PUCO that authorized OE to obtain
Extensions of Credit until December 31, 2006.
 
“OE Supplemental Order” means any order of the PUCO or the FERC that authorizes
OE to obtain Extensions of Credit after December 31, 2006.
 
“Organizational Documents” shall mean, as applicable to any Person, the charter,
code of regulations, articles of incorporation, by-laws, certificate of
formation, operating agreement, certificate of partnership, partnership
agreement, certificate of limited partnership, limited partnership agreement or
other constitutive documents of such Person.
 
“Other Taxes” has the meaning set forth in Section 2.16(b).
 
“Outstanding Credits” means, on any date of determination, an amount equal to
(i) the aggregate principal amount of all Advances outstanding on such date plus
(ii) the aggregate undrawn amount of all issued Letters of Credit outstanding on
such date plus (iii) the aggregate amount of Reimbursement Obligations
outstanding on such date (exclusive of Reimbursement Obligations that, on such
date of determination, are repaid with the proceeds of Advances made in
accordance with Section 2.04 (f) and (g), to the extent the principal amount of
such Advances is included in the determination of the aggregate principal amount
of all outstanding Advances as provided in clause (i) of this definition). The
“Outstanding Credits” of a Lender on any date of determination shall be an
amount equal to the outstanding Advances made by such Lender plus the amount of
such Lender’s participation interest in outstanding Letters of Credit,
Reimbursement Obligations and Swing Line Advances included in the definition of
“Outstanding Credits”.
 
“Patriot Act” means the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001), as in effect from time to time.

“Payment Date” means the date on which payment of a Drawing is made by a
Fronting Bank.
 
“PBGC” means the Pension Benefit Guaranty Corporation and any entity succeeding
to any or all of its functions under ERISA.
 
“Penelec” has the meaning set forth in the preamble hereto.
 
“Penelec SEC Order” means the order of the SEC that authorized Penelec to obtain
Extensions of Credit until February 8, 2006, which authorization was extended
through December 31, 2007, pursuant to the FERC PUHCA 2005 Filing.
 

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“Penelec Supplemental Order” means any order of the FERC that authorizes Penelec
to obtain Extensions of Credit after December 31, 2007.
 
“Penn” has the meaning set forth in the preamble hereto.
 
“Penn SEC Order” means the order of the SEC that authorized Penn to obtain
Extensions of Credit until February 8, 2006, which authorization was extended
through December 31, 2007, pursuant to the FERC PUHCA 2005 Filing.
 
“Penn Supplemental Order” means any order of the FERC that authorizes Penn to
obtain Extensions of Credit after December 31, 2007.
 
“Percentage” means, in respect of any Lender on any date of determination, the
percentage obtained by dividing such Lender’s Commitment on such day by the
total of the Commitments on such day, and multiplying the quotient so obtained
by 100%.
 
“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.
 
“Pro-Rata Advance” means an advance by a Lender to any Borrower as part of a
Pro-Rata Borrowing pursuant to Section 2.01 and refers to an Alternate Base Rate
Pro-Rata Advance or a Eurodollar Rate Pro-Rata Advance, each of which shall be a
“Type” of Pro-Rata Advance, subject to Conversion pursuant to Section 2.10 or
2.11.
 
“Pro-Rata Borrowing” means a borrowing consisting of simultaneous Pro-Rata
Advances of the same Type made by each of the Lenders pursuant to Section 2.01
or Converted pursuant to Section 2.10 or 2.11.
 
“PUCO” means The Public Utilities Commission of Ohio or any successor thereto.
 
“Reference Ratings” means, with respect to any Borrower, the ratings assigned by
S&P and Moody’s to the senior unsecured non-credit enhanced debt of such
Borrower; provided that, if there is no such rating, “Reference Ratings” shall
mean the ratings that are one level below the ratings assigned by S&P and
Moody’s to the senior secured debt of such Borrower.
 
“Register” has the meaning set forth in Section 8.08(c).
 
“Reimbursement Obligation” means the obligation of each Borrower to reimburse a
Fronting Bank for any Drawing paid by such Fronting Bank pursuant to
Section 2.04(g).
 
“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.
 
“SEC Order” means the order issued by the SEC on December 5, 2005, pursuant to
the Public Utility Holding Company Act of 1935, authorizing the Borrowers, as
applicable to engage in financing activities, including obtaining Extensions of
Credit, through February 8, 2006.
 
“Significant Subsidiaries” means (i) each regulated energy Subsidiary of FE,
including, but not limited to, OE, Penn, CEI, TE, JCP&L, Met-Ed and Penelec, and
any successor to any of them, (ii) FES and ATSI, and (iii)  each other
Subsidiary of FE the annual revenues of which exceed $100,000,000 or the total
assets of which exceed $50,000,000.
 
“Stated Amount” means the maximum amount available to be drawn by a Beneficiary
under a Letter of Credit.
 
“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 that are secured by or otherwise
payable from non-bypassable cent per kilowatt hour charges authorized pursuant
to 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.
 
“Supplemental Approval” means: (i) with respect to FES, an FES Supplemental
Order, (ii) with respect to ATSI, an ATSI Supplemental Order; (iii) with respect
to OE, an OE Supplemental Order; (iv) with respect to Penn, a Penn Supplemental
Order, subject to any borrowing limitations contained in the Organizational
Documents of Penn; (v) with respect to CEI, a CEI Supplemental Order; (vi) with
respect to TE, a TE Supplemental Order; (vii) with respect to JCP&L, a JCP&L
Supplemental Order, subject to any borrowing limitations contained in the
Organizational Documents of JCP&L; (viii) with respect to Met-Ed, a Met-Ed
Supplemental Order; and (ix) with respect to Penelec, a Penelec Supplemental
Order.
 

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“Swing Line Advance” means an Advance made by a Swing Line Lender to any
Borrower as part of a Swing Line Borrowing pursuant to Section 2.03 and refers
to an Alternate Base Rate Swing Line Advance, a Eurodollar Rate Swing Line
Advance or a Cost of Funds Swing Line Advance, each of which shall be a “Type”
of Swing Line Advance.
 
“Swing Line Borrowing” means a borrowing consisting of a Swing Line Advance made
by a Swing Line Lender pursuant to Section 2.03.
 
“Swing Line Commitment” means, with respect to any Swing Line Lender, the
aggregate amount of Swing Line Advances that such Swing Line Lender agrees to
make, as modified from time to time pursuant to an agreement signed by such
Swing Line Lender. With respect to each Lender that is a Swing Line Lender on
the date hereof, such Swing Line Lender’s Swing Line Commitment shall equal the
“Swing Line Commitment” listed on Schedule III and, with respect to any Lender
that becomes a Swing Line Lender after the date hereof, such Lender’s Swing Line
Commitment shall equal the amount agreed upon between the Borrowers and such
Lenders at the time such Lender becomes a Swing Line Lender.
 
“Swing Line Lender” means each of the Lenders identified as a “Swing Line
Lender” on Schedule III and any other Lender or Affiliate thereof that may be
appointed from time to time by the Borrowers to provide Swing Line Advances
under this Agreement and that is reasonably acceptable to the Administrative
Agent.
 
“Swing Line Sublimit” means an amount equal to the lesser of (i) $250,000,000
and (ii) the aggregate Commitments. The Swing Line Sublimit is part of, and not
in addition to, the aggregate Commitments.
 
“Taxes” has the meaning set forth in Section 2.16(a).
 
“TE” has the meaning set forth in the preamble hereto.
 
“TE PUCO Order” means the order of the PUCO that authorizes TE to obtain
Extensions of Credit until December 31, 2006.
 
“Termination Date” means August 24, 2011, subject, for certain Lenders, to the
extension described in Section 2.19 hereof, or, in any case, the earlier date of
termination in whole of the Commitments pursuant to Section 2.06 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.
 

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“TE Supplemental Order” means any order of the PUCO that authorizes TE to obtain
Extensions of Credit after December 31, 2006.
 
“Total Capitalization” means, with respect to any Borrower at any date of
determination the sum, without duplication, of (i) Consolidated Debt of such
Borrower, (ii) the capital stock (but excluding treasury stock and capital stock
subscribed and unissued) and other equity accounts (including retained earnings
and paid in capital but excluding accumulated other comprehensive income and
loss) of such Borrower and its Consolidated Subsidiaries, (iii) consolidated
equity of the preference stockholders of such Borrower and its Consolidated
Subsidiaries, and (iv) the aggregate principal amount of Trust Preferred
Securities and Junior Subordinated Deferred Interest Debt Obligations.
 
“Trust Preferred Securities” means (i) the issued and outstanding preferred
securities of Cleveland Electric Financing Trust I and (ii) any other
securities, however denominated, (A) issued by any Borrower or any Consolidated
Subsidiary of any Borrower, (B) that are not subject to mandatory redemption or
the underlying securities, if any, of which are not subject to mandatory
redemption, (C) that are perpetual or mature no less than 30 years from the date
of issuance, (D) 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 (E) 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 definitions of “Pro-Rata
Advance” and “Swing Line Advance” when used in such context.
 
“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.
 
“Unmatured Default” means any event that, with the giving of notice or the
passage of time, or both, would constitute an Event of Default.
 
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”.
 

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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 AND LETTERS OF CREDIT

SECTION 2.01 The Pro-Rata Advances.
 
Each Lender severally agrees, on the terms and conditions hereinafter set forth,
to make Pro-Rata Advances to each 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 Pro-Rata 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 Pro-Rata 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, each Borrower may from time to time borrow, prepay pursuant
to Section 2.12 and reborrow under this Section 2.01; provided, that in no case
shall any Lender be required to make a Pro-Rata Advance to a Borrower hereunder
if (i) the amount of such Pro-Rata Advance would exceed such Lender’s Available
Commitment, (ii) the making of such Pro-Rata Advance, together with the making
of the other Pro-Rata Advances constituting part of the same Pro-Rata Borrowing,
would cause the total amount of all Outstanding Credits to exceed the aggregate
amount of the Commitments or (iii) the amount of such Pro-Rata Advance, together
with all other Outstanding Credits for the account of such Borrower, would
exceed such Borrower’s Borrower Sublimit.
 

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SECTION 2.02 Making the Pro-Rata Advances.
 
(a) Each Pro-Rata Borrowing shall be made on notice, given (i) in the case of a
Pro-Rata Borrowing comprising Eurodollar Rate Pro-Rata 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 Pro-Rata Borrowing comprising
Alternate Base Rate Pro-Rata Advances, not later than 11:00 a.m. (New York time)
on the date of the proposed Pro-Rata Borrowing, by any Borrower to the
Administrative Agent, which shall give to each Lender prompt notice thereof.
Each such Notice of Pro-Rata Borrowing by a Borrower shall be by telecopier or
cable, in substantially the form of Exhibit D hereto, specifying therein the
requested (A) date of such Pro-Rata Borrowing, (B) Type of Pro-Rata Advances to
be made in connection with such Pro-Rata Borrowing, (C) aggregate amount of such
Pro-Rata Borrowing, (D) in the case of a Pro-Rata Borrowing comprising
Eurodollar Rate Pro-Rata Advances, the initial Interest Period for each such
Pro-Rata Advance, which Pro-Rata Borrowing shall be subject to the limitations
stated in the definition of “Interest Period” in Section 1.01, and (E) the
identity of the Borrower requesting such Pro-Rata Borrowing. Each Lender shall,
before 1:00 p.m. (New York time) on the date of such Pro-Rata 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 Pro-Rata 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 such Borrower at the
Administrative Agent’s aforesaid address.
 
(b) Each Notice of Pro-Rata Borrowing delivered by any Borrower shall be
irrevocable and binding on such Borrower. In the case of any Notice of Pro-Rata
Borrowing delivered by any Borrower requesting Eurodollar Rate Pro-Rata
Advances, such Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure by such Borrower to
fulfill on or before the date specified in such Notice of Pro-Rata 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 Pro-Rata Advance to be made by such Lender as part of
such Borrowing when such Pro-Rata Advance, as a result of such failure, is not
made on such date.
 

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(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 Pro-Rata Borrowing comprising Eurodollar
Rate Pro-Rata Advances or (B) 12:00 noon (New York time) on the date of a
Pro-Rata Borrowing comprising Alternate Base Rate Pro-Rata Advances that such
Lender will not make available to the Administrative Agent such Lender’s ratable
portion of such Pro-Rata Borrowing, the Administrative Agent may assume that
such Lender has made such portion available to the Administrative Agent on the
date of such Pro-Rata 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 applicable 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 such 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 such Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of such Borrower, the
interest rate applicable at the time to Pro-Rata Advances made in connection
with such Pro-Rata Borrowing and (ii) in the case of such Lender, the Federal
Funds Rate. If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Lender’s
Pro-Rata Advance as part of such Pro-Rata Borrowing for purposes of this
Agreement.
 
(d) The failure of any Lender to make the Pro-Rata Advance to be made by it as
part of any Pro-Rata Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Pro-Rata Advance on the date of such
Pro-Rata Borrowing, but no Lender shall be responsible for the failure of any
other Lender to make the Pro-Rata Advance to be made by such other Lender on the
date of any Borrowing.
 
SECTION 2.03 Swing Line Advances

(a) The Swing Line. Subject to the terms and conditions set forth herein, each
Swing Line Lender agrees to make Swing Line Advances to any 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 the amount of such Swing Line Lender’s Swing Line Commitment; provided,
however, no Swing Line Lender shall be required to make a Swing Line Advance
hereunder if (i) the amount of such Swing Line Advance, together with the
aggregate principal amount of all other Swing Line Advances outstanding would
exceed the Swing Line Sublimit, (ii) the making of such Swing Line Advance,
together with the making of the other Swing Line Advances constituting part of
the same Swing Line Borrowing, would cause the total amount of all Outstanding
Credits to exceed the aggregate amount of the Commitments or (iii) the amount of
such Swing Line Advance, together with all other Outstanding Credits for the
account of such Borrower, would exceed such Borrower’s Borrower Sublimit. Within
the foregoing limits, and subject to the other terms and conditions hereof, each
Borrower may borrow under this Section 2.03, prepay under Section 2.12, and
reborrow under this Section 2.03. Immediately upon the making of a Swing Line
Advance, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the applicable Swing Line Lender a risk
participation in such Swing Line Advance in an amount equal to such Lender’s
ratable portion (according to the Lenders’ respective Commitments) times the
amount of such Swing Line Advance. No more than five Swing Line Advances may be
outstanding hereunder at any time.

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(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon any
Borrower’s irrevocable notice to the applicable Swing Line Lender and the
Administrative Agent, which may be given by telephone. Each such notice must be
received by the applicable Swing Line Lender and the Administrative Agent not
later than 11:00 a.m. (New York time) on the date of the proposed Swing Line
Borrowing in the case of a Swing Line Borrowing comprising Alternate Base Rate
Swing Line Advances or Cost of Funds Swing Line Advances and three Business Days
prior to the date of the proposed Swing Line Borrowing in the case of a
Borrowing comprising Eurodollar Rate Swing Line Advances or, in each case, at
such later time as a Swingline Lender may agree, and shall specify (i) the date
of such Swing Line Borrowing, (ii) the Type of Swing Line Advance to be made in
connection with such Swing Line Borrowing, (iii) the aggregate amount of such
Swing Line Borrowing, which shall be in an aggregate amount of not less than
$1,000,000 or an integral multiple of $1,000,000 in excess thereof, (iv) in the
case of a Swing Line Borrowing comprising a Eurodollar Rate Swing Line Advance,
the Interest Period for such Advance, which Swing Line Borrowing shall be
subject to the limitations stated in the definition of “Interest Period” in
Section 1.01 and (v) the identity of the Borrower requesting such Swing Line
Borrowing. Each such telephonic notice must be confirmed promptly by delivery to
the relevant Swing Line Lender and the Administrative Agent of a written Notice
of Swing Line Borrowing, appropriately completed and signed by such Borrower.
Promptly after receipt by such Swing Line Lender of any telephonic Notice of
Swing Line Borrowing, such Swing Line Lender will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has also received such Notice of Swing Line Borrowing and, if not, such Swing
Line Lender will notify the Administrative Agent (by telephone or in writing) of
the contents thereof. Unless such Swing Line Lender has received notice (by
telephone or in writing) from the Administrative Agent (including at the request
of any Lender) prior to 12:00 p.m. (New York time) on the date of the proposed
Swing Line Borrowing (A) directing such Swing Line Lender not to make such Swing
Line Advance as a result of the limitations set forth in the first sentence of
Section 2.03(a) or (B) that one or more of the applicable conditions specified
in Article III is not then satisfied, then, subject to the terms and conditions
hereof, such Swing Line Lender will, not later than 1:00 p.m. on the borrowing
date specified in such Notice of Swing Line Borrowing, make the amount of its
Swing Line Advance available to the applicable Borrower at its office by
crediting the account of such Borrower on the books of such Swing Line Lender in
immediately available funds.
 

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(c) Refinancing of Swing Line Advances.

(i)  Each Swing Line Lender at any time in its sole and absolute discretion may
request, on behalf of any Borrower (each of which hereby irrevocably authorizes
each Swing Line Lender to so request on its behalf), that each Lender make an
Alternate Base Rate Pro-Rata Advance in an amount equal to such Lenders’ ratable
portion (according to the Lenders’ respective Commitments) of the amount of
Swing Line Advances made by such Swing Line Lender then outstanding to such
Borrower. Such request shall be made in writing (which written request shall be
deemed to be a Notice of Pro-Rata Borrowing for purposes hereof) and in
accordance with the requirements of Sections 2.01 and 2.02, without regard to
the minimum and multiples specified therein for the principal amount of
Alternate Base Rate Pro-Rata Advances, but subject to the unutilized portion of
the Commitments and the conditions set forth in Section 3.02. Such Swing Line
Lender shall furnish such Borrower with a copy of the applicable Notice of
Pro-Rata Borrowing promptly after delivering such notice to the Administrative
Agent. 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 Pro-Rata 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
such Borrower at the Administrative Agent’s aforesaid address, whereupon,
subject to Section 2.03(c)(ii), each Lender that so makes funds available shall
be deemed to have made an Alternate Base Rate Pro-Rata Advance to such Borrower
in such amount. The Administrative Agent shall remit the funds so received to
the applicable Swing Line Lender.

(ii)  If for any reason any Swing Line Advance cannot be refinanced by a
Pro-Rata Borrowing in accordance with Section 2.03(c)(i), the request for
Alternate Base Rate Pro-Rata Advances submitted by a Swing Line Lender as set
forth herein shall be deemed to be a request by such Swing Line Lender that each
Lender fund its risk participation in the relevant Swing Line Advances and each
Lender’s payment to the Administrative Agent for the account of such Swing Line
Lender pursuant to Section 2.03(c)(i) shall be deemed payment in respect of such
participation.

(iii)  If any Lender fails to make available to the Administrative Agent for the
account of any Swing Line Lender any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.03(c) by the time
specified in Section 2.03(c)(i), such Swing Line Lender shall be entitled to
recover from such Lender (acting through the Administrative Agent), on demand,
such amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to such
Swing Line Lender at a rate per annum equal to the greater of the Federal Funds
Rate and a rate determined by such Swing Line Lender in accordance with banking
industry rules on interbank compensation. A certificate of such Swing Line
Lender submitted to any Lender (through the Administrative Agent) with respect
to any amounts owing under this clause (iii) shall be conclusive absent manifest
error.

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(iv)  Each Lender’s obligation to make Pro-Rata Advances or to purchase and fund
risk participations in Swing Line Advances pursuant to this Section 2.03(c)
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against any Swing Line Lender, any
Borrower or any other Person for any reason whatsoever, (B) the occurrence or
continuance of an Unmatured Default or Event of Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Lender’s obligation to make Pro-Rata Advances
pursuant to this Section 2.03(c) is subject to the conditions set forth in
Section 3.02. No such funding of risk participations shall relieve or otherwise
impair the obligation of any Borrower to repay Swing Line Advances, together
with interest as provided herein.
 
(d) Repayment of Participations.
 
(i)  At any time after any Lender has purchased and funded a risk participation
in a Swing Line Advance, if the applicable Swing Line Lender receives any
payment on account of such Swing Line Advance, such Swing Line Lender will
distribute to such Lender its ratable portion (according to the Lenders’
respective Commitments) of such payment (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender’s risk
participation was funded) in the same funds as those received by such Swing Line
Lender.
 
(ii)  If any payment received by any Swing Line Lender in respect of principal
or interest on any Swing Line Advance is required to be returned by such Swing
Line Lender under any of the circumstances described in Section 2.15(g)
(including pursuant to any settlement entered into by the Swing Line Lender in
its discretion), each Lender shall pay to such Swing Line Lender its ratable
portion (according to the Lenders’ respective Commitments) thereof on demand of
the Administrative Agent, plus interest thereon from the date of such demand to
the date such amount is returned, at a rate per annum equal to the Federal Funds
Rate. The Administrative Agent will make such demand upon the request of such
Swing Line Lender. The obligations of the Lenders under this clause shall
survive the payment in full of the obligations hereunder and the termination of
this Agreement.
 
(e) Interest for Account of Swing Line Lenders. Each Swing Line Lender shall be
responsible for invoicing the relevant Borrower for interest on the Swing Line
Advances made to such Borrower. Until each Lender funds its Alternate Base Rate
Pro-Rata Advance or risk participation pursuant to this Section 2.03 to
refinance such Lender’s ratable portion (according to the Lenders’ respective
Commitments) of any Swing Line Advance, interest in respect of such ratable
portion (according to the Lenders’ respective Commitments) shall be solely for
the account of such Swing Line Lender.
 
(f) Payments Directly to Swing Line Lenders. Each Borrower with outstanding
Swing Line Advances shall make all payments of principal and interest in respect
of the Swing Line Advances directly to the Swing Line Lender that made such
Advances.
 

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SECTION 2.04 Letters of Credit.
 
(a) Agreement of Fronting Banks. Subject to the terms and conditions of this
Agreement, each Fronting Bank agrees to issue and amend (including, without
limitation, to extend or renew) for the account of the Borrowers or any
Subsidiary thereof (each such Person, an “Account Party”) one or more standby
letters of credit (individually, a “Letter of Credit” and collectively, the
“Letters of Credit”) from and including the date hereof to the Termination Date,
in an aggregate Stated Amount at any time outstanding not to exceed such
Fronting Bank’s LC Fronting Bank Commitment, up to a maximum aggregate Stated
Amount of all Letters of Credit at any one time outstanding equal to the L/C
Commitment Amount minus Reimbursement Obligations outstanding at such time. Each
Letter of Credit shall be renewable (if so requested by the Borrower) and shall
have an Expiration Date of no later than the earlier of (x) the latest
Termination Date and (y) the date occurring one year after the Date of Issuance
of such Letter of Credit; provided, however, that no Fronting Bank will issue or
amend a Letter of Credit if, immediately following such issuance or amendment,
(i) the Stated Amount of such Letter of Credit would (A) exceed the Available
Commitments or (B) when aggregated with (1) the Stated Amounts of all other
outstanding Letters of Credit and (2) the outstanding Reimbursement Obligations,
exceed the L/C Commitment Amount or (ii) the total amount of all Outstanding
Credits would exceed the aggregate of the Commitments. Letters of Credit shall
be denominated in U.S. dollars only.
 
(b) Forms. Each Letter of Credit shall be in a form customarily used by the
Fronting Bank that is to issue such Letter of Credit or in such other form as
has been approved by such Fronting Bank. At the time of issuance or amendment,
subject to the terms and conditions of this Agreement, the amount and the terms
and conditions of each Letter of Credit shall be subject to approval by the
applicable Fronting Bank and the applicable Borrower.
 
(c) Notice of Issuance; Application. The applicable Borrower shall give the
applicable Fronting Bank and the Administrative Agent written notice (or
telephonic notice confirmed in writing) at least one Business Day prior to the
requested Date of Issuance of a Letter of Credit, such notice to be in
substantially the form of Exhibit F hereto (a “Letter of Credit Request”). Such
Borrower shall also execute and deliver such customary letter of credit
application forms as requested from time to time by such Fronting Bank. Such
application forms shall indicate the identity of the Account Party and that such
Borrower is the “Applicant” or shall otherwise indicate that such Borrower is
the obligor in respect of any Letter of Credit to be issued thereunder. If the
terms or conditions of the application forms conflict with any provision of this
Agreement, the terms of this Agreement shall govern.
 

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(d) Issuance. Provided that the applicable Borrower has given the notice
prescribed by Section 2.04(c) and subject to the other terms and conditions of
this Agreement, including the satisfaction of the applicable conditions
precedent set forth in Article III, the applicable Fronting Bank shall issue the
requested Letter of Credit on the requested Date of Issuance as set forth in the
applicable Letter of Credit Request for the benefit of the stipulated
Beneficiary and shall deliver the original of such Letter of Credit to the
Beneficiary at the address specified in the notice. At the request of the
applicable Borrower, such Fronting Bank shall deliver a copy of each Letter of
Credit to such Borrower within a reasonable time after the Date of Issuance
thereof. Upon the request of such Borrower, such Fronting Bank shall deliver to
such Borrower a copy of any Letter of Credit proposed to be issued hereunder
prior to the issuance thereof.
 
(e) Notice of Drawing. Each Fronting Bank shall promptly notify the applicable
Borrower by telephone, facsimile or other telecommunication of any Drawing under
a Letter of Credit issued for the account of such Borrower by such Fronting
Bank.
 
(f) Payments. Each Borrower hereby agrees to pay to each Fronting Bank, in the
manner provided in subsection (g) below:
 
(i)  on each Payment Date, an amount equal to the amount paid by such Fronting
Bank under any Letter of Credit issued for the account of such Borrower by such
Fronting Bank; and
 
(ii)  if any Drawing shall be reimbursed to any Fronting Bank after 12:00 noon
(New York time) on the Payment Date, interest on any and all amounts required to
be paid pursuant to clause (i) of this subsection (f) from and after the due
date thereof until payment in full, payable on demand, at an annual rate of
interest equal to 2.00% above Citibank’s “base rate” as in effect from time to
time.
 
(g) Method of Reimbursement. Each Borrower shall reimburse each Fronting Bank
for each Drawing under any Letter of Credit issued for the account of such
Borrower by such Fronting Bank pursuant to subsection (f) above in the following
manner:
 
(i)  such Borrower shall immediately reimburse such Fronting Bank in the manner
described in Section 2.15; or
 
(ii)  if (A) such Borrower has not reimbursed such Fronting Bank pursuant to
clause (i) above, (B) the applicable conditions to Borrowing set forth in
Articles II and III have been fulfilled, and (C) the Available Commitments in
effect at such time exceed the amount of the Drawing to be reimbursed, such
Borrower may reimburse such Fronting Bank for such Drawing with the proceeds of
an Alternate Base Rate Pro-Rata Advance or, if the conditions specified in the
foregoing clauses (A), (B) and (C) have been satisfied and a Notice of Borrowing
requesting a Eurodollar Rate Pro-Rata Advance has been given in accordance with
Section 2.02 three Business Days prior to the relevant Payment Date, with the
proceeds of a Eurodollar Rate Pro-Rata Advance.
 

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(h) Nature of Fronting Banks’ Duties. In determining whether to honor any
Drawing under any Letter of Credit issued by any Fronting Bank, such Fronting
Bank shall be responsible only to determine that the documents and certificates
required to be delivered under that Letter of Credit have been delivered and
that they comply on their face with the requirements of that Letter of Credit.
Each Borrower otherwise assumes all risks of the acts and omissions of, or
misuse of any Letters of Credit issued by any Fronting Bank for the account of
such Borrower by, the Beneficiary of such Letter of Credit. In furtherance and
not in limitation of the foregoing, but consistent with applicable law, no
Fronting Bank shall be responsible, absent gross negligence or willful
misconduct, (i) for the form, validity, sufficiency, accuracy, genuineness or
legal effects of any document submitted by any party in connection with the
application for and issuance of any drawing honored under a Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit, or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex, facsimile or otherwise, whether or not they be in
cipher; (iv) for errors in interpretation of technical terms; (v) for any loss
or delay in the transmission or otherwise of any document required in order to
make a drawing under any such Letter of Credit, or the proceeds thereof;
(vi) for the misapplication by the Beneficiary of any such Letter of Credit or
of the proceeds of any drawing honored under such Letter of Credit; and
(vii) for any consequences arising from causes beyond the control of such
Fronting Bank. None of the above shall affect, impair or prevent the vesting of
any of such Fronting Bank’s rights or powers hereunder. Not in limitation of the
foregoing, any action taken or omitted to be taken by any Fronting Bank under or
in connection with any Letter of Credit shall not create against such Fronting
Bank any liability to the Borrowers or any Lender, except for actions or
omissions resulting from the gross negligence or willful misconduct of such
Fronting Bank or any of its agents or representatives, and the Fronting Bank
shall not be required to take any action that exposes the Fronting Bank to
personal liability or that is contrary to this Agreement or applicable law.
 
(i) Obligations of Borrowers Absolute. The obligation of each Borrower to
reimburse each Fronting Bank for Drawings honored under the Letters of Credit
issued for the account of such Borrower by such Fronting Bank shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances including, without limitation,
the following circumstances:
 
(i)  any lack of validity or enforceability of any Letter of Credit;
 
(ii)  the existence of any claim, set-off, defense or other right that any
Borrower, any Account Party or any Affiliate of any Borrower or any Account
Party may have at any time against a Beneficiary or any transferee of any Letter
of Credit (or any Persons or entities for whom any such Beneficiary or
transferee may be acting), such Fronting Bank or any other Person, whether in
connection with this Agreement, the transactions contemplated herein or any
unrelated transaction;
 

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(iii)  any draft, demand, certificate or any other documents presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
 
(iv)  the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents;
 
(v)  any non-application or misapplication by the Beneficiary of the proceeds of
any Drawing under a Letter of Credit; or
 
(vi)  the fact that an Event of Default, or event that would constitute an Event
of Default but for the requirement that notice be given or time elapse or both,
shall have occurred and be continuing.
 
No payment made under this Section shall be deemed to be a waiver of any claim
any Borrower may have against any Fronting Bank or any other Person.
 
(j) Participations by Lenders. By the issuance of a Letter of Credit and without
any further action on the part of any Fronting Bank or any Lender in respect
thereof, each Fronting Bank shall hereby be deemed to have granted to each
Lender, and each Lender shall hereby be deemed to have acquired from such
Fronting Bank, an undivided interest and participation in such Letter of Credit
(including any letter of credit issued by such Fronting Bank in substitution or
exchange for such Letter of Credit pursuant to the terms thereof) equal to such
Lender’s Percentage of the Stated Amount of such Letter of Credit, effective
upon the issuance of such Letter of Credit. In consideration and in furtherance
of the foregoing, each Lender hereby absolutely and unconditionally agrees to
pay to such Fronting Bank, in accordance with this subsection (j), such Lender’s
Percentage of each payment made by such Fronting Bank in respect of an
unreimbursed Drawing under a Letter of Credit. Such Fronting Bank shall notify
the Administrative Agent of the amount of such unreimbursed Drawing honored by
it not later than (x) 12:00 noon (New York time) on the date of payment of a
draft under a Letter of Credit, if such payment is made at or prior to 11:00
a.m. (New York time) on such day, and (y) the close of business (New York time)
on the date of payment of a draft under a Letter of Credit, if such payment is
made after 11:00 a.m. (New York time) on such day, and the Administrative Agent
shall notify each Lender of the date and amount of such unreimbursed Drawing
under such Letter of Credit honored by such Fronting Bank and the amount of such
Lender’s Percentage therein no later than (1) 1:00 p.m. (New York time) on such
day, if such payment is made at or prior to 11:00 a.m. (New York time) on such
day, and (2) 11:00 a.m. (New York time) on the next following Business Day, if
such payment is made after 11:00 a.m. (New York time) on such day. Not later
than 2:00 p.m. (New York time) on the date of receipt of a notice of an
unreimbursed Drawing by a Lender, such Lender agrees to pay to such Fronting
Bank an amount equal to the product of (A) such Lender’s Percentage and (B) the
amount of the payment made by such Fronting Bank in respect of such unreimbursed
Drawing.
 

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If payment of the amount due pursuant to the preceding sentence from a Lender is
received by such Fronting Bank after the close of business on the date it is
due, such Lender agrees to pay to such Fronting Bank, in addition to (and along
with) its payment of the amount due pursuant to the preceding sentence, interest
on such amount at a rate per annum equal to (i) for the period from and
including the date such payment is due to but excluding the second succeeding
Business Day, the Federal Funds Rate, and (ii) for the period from and including
the second Business Day succeeding the date such payment is due to but excluding
the date on which such amount is paid in full, the Federal Funds Rate plus
2.00%.
 
(k) Obligations of Lenders Absolute. Each Lender acknowledges and agrees that
(i) its obligation to acquire a participation in any Fronting Bank’s liability
in respect of the Letters of Credit and (ii) its obligation to make the payments
specified herein, and the right of each Fronting Bank to receive the same, in
the manner specified herein, are absolute and unconditional and shall not be
affected by any circumstances whatsoever, including, without limitation, (A) the
occurrence and continuance of any Event of Default or Unmatured Default; (B) any
other breach or default by any Borrower, the Administrative Agent or any Lender
hereunder; (C) any lack of validity or enforceability of any Letter of Credit or
any Loan Document; (D) the existence of any claim, setoff, defense or other
right that the Lender may have at any time against any Borrower, any other
Account Party, any Beneficiary, any Fronting Bank or any other Lender; (E) the
existence of any claim, setoff, defense or other right that any Borrower may
have at any time against any Beneficiary, any Fronting Bank, the Administrative
Agent, any Lender or any other Person, whether in connection with this Agreement
or any other documents contemplated hereby or any unrelated transactions; (F)
any amendment or waiver of, or consent to any departure from, all or any of the
Letters of Credit or this Agreement; (G) any statement or any document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect; (H) payment by any Fronting Bank under any Letter of Credit
against presentation of a draft or certificate that does not comply with the
terms of such Letter of Credit, so long as such payment is not the consequence
of such Fronting Bank’s gross negligence or willful misconduct in determining
whether documents presented under a Letter of Credit comply with the terms
thereof; (I) the occurrence of the Termination Date; or (J) any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing. Nothing herein shall prevent the assertion by any Lender of a claim
by separate suit or compulsory counterclaim, nor shall any payment made by a
Lender under Section 2.04 hereof be deemed to be a waiver of any claim that a
Lender may have against any Fronting Bank or any other Person.
 

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(l) Proceeds of Reimbursements. Upon receipt of a payment from a Borrower
pursuant to subsection (f) hereof, the applicable Fronting Bank shall promptly
transfer to each Lender such Lender’s pro rata share (determined in accordance
with such Lender’s Percentage) of such payment based on such Lender’s pro rata
share (determined as aforesaid) of amounts previously paid pursuant to
subsection (j), above, and not previously transferred by such Fronting Bank
pursuant to this subsection (l); provided, however, that if a Lender shall fail
to pay to such Fronting Bank any amount required by subsection (j) above by the
close of business on the Business Day following the date on which such payment
was due from such Lender, and such Borrower shall not have reimbursed such
Fronting Bank for such amount pursuant to subsection (f) hereof (such
unreimbursed amount being hereinafter referred to as a “Transferred Amount”),
such Fronting Bank shall be deemed to have purchased, on such following Business
Day (a “Participation Transfer Date”) from such Lender (a “Defaulting Lender”),
a participation in such Transferred Amount and shall be entitled, for the period
from and including the Participation Transfer Date to the earlier of (i) the
date on which such Borrower shall have reimbursed such Fronting Bank for such
Transferred Amount and (ii) the date on which such Lender shall have reimbursed
such Fronting Bank for such Transferred Amount (the “Participation Transfer
Period”), to the rights, privileges and obligations of a “Lender” under this
Agreement with respect to such Transferred Amount, and such Defaulting Lender
shall not be deemed to be a Lender hereunder, and shall not have any rights or
interests of a Lender hereunder, with respect to such Transferred Amount, and
its Percentage shall be reduced accordingly with the amount by which such
Percentage is reduced deemed held by such Fronting Bank during the Participation
Transfer Period; and provided further, however, that if, at any time after the
occurrence of a Participation Transfer Date with respect to any Lender and prior
to the reimbursement by such Lender of such Fronting Bank with respect to the
related Transferred Amount pursuant to subsection (j) above, such Fronting Bank
shall receive any payment from such Borrower pursuant to subsection (f) hereof,
such Fronting Bank shall not be obligated to pay any amounts to such Lender, and
such Fronting Bank shall retain such amounts (including, without limitation,
interest payments due from such Borrower pursuant to subsection (f) hereof) for
its own account as a Lender, provided that all such amounts shall be applied in
satisfaction of the unpaid amounts (including, without limitation, interest
payments due from such Lender pursuant to subsection (j), above) due from such
Lender with respect to such Transferred Amount.
 

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If at any time after the occurrence of a Participation Transfer Date with
respect to any Lender, the Administrative Agent shall receive any payment from
any Borrower for the account of such Lender pursuant to this Agreement, if at
the time of receipt of such amounts by the Administrative Agent such Lender
shall not have reimbursed the applicable Fronting Bank with respect to the
related Transferred Amount pursuant to subsection (j) above, the Administrative
Agent shall not pay any such amounts to such Lender but shall pay all such
amounts to such Fronting Bank, and such Fronting Bank shall retain such amounts
for its own account as a Lender and apply such amounts in satisfaction of the
unpaid amounts (including, without limitation, interest payments due from such
Lender pursuant to subsection (j) above) due from such Lender with respect to
such Transferred Amount.
 
All payments due to the Lenders from any Fronting Bank pursuant to this
subsection (l) shall be made to the Lenders if, as, and, to the extent possible,
when such Fronting Bank receives payments in respect of Drawings under the
Letters of Credit pursuant to subsection (f) hereof, and in the same funds in
which such amounts are received; provided that if any Lender to which such
Fronting Bank is required to transfer any such payment (or any portion thereof)
pursuant to this subsection (l) does not receive such payment (or portion
thereof) prior to (i) the close of business on the Business Day on which such
Fronting Bank received such payment from such Borrower, if such Fronting Bank
received such payment prior to 1:00 p.m. (New York time) on such day, or (ii)
1:00 p.m. (New York time) on the Business Day next succeeding the Business Day
on which such Fronting Bank received such payment from the Borrower, if such
Fronting Bank received such payment after 1:00 p.m. (New York time) on such day,
such Fronting Bank agrees to pay to such Lender, along with its payment of the
portion of such payment due to such Lender, interest on such amount at a rate
per annum equal to (A) for the period from and including the Business Day when
such payment was required to be made to the Lenders to but excluding the second
succeeding Business Day, the Federal Funds Rate and (B) for the period from and
including the second Business Day succeeding the Business Day when such payment
was required to be made to the Lenders to but excluding the date on which such
amount is paid in full, the Federal Funds Rate plus 2.00%. The provisions of
this subsection (l) shall not affect or impair any of the obligations under this
Agreement of any Defaulting Lender to any Fronting Bank, all of which shall
remain unaffected by any default in payment by any Fronting Bank to such
Defaulting Lender.
 

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(m) Concerning the Fronting Banks. Each Fronting Bank will exercise and give the
same care and attention to the Letters of Credit issued by it as it gives to its
other letters of credit and similar obligations, and each Lender agrees that
each Fronting Bank’s sole liability to each Lender shall be (i) to distribute
promptly, as and when received by such Fronting Bank, and in accordance with the
provisions of subsection (l) above, such Lender’s pro rata share (determined in
accordance with such Lender’s Percentage) of any payments to such Fronting Bank
by the Borrowers pursuant to subsection (f) above in respect of Drawings under
the Letters of Credit issued by such Fronting Bank, (ii) to exercise or refrain
from exercising any right or to take or to refrain from taking any action under
this Agreement or any Letter of Credit issued by such Fronting Bank as may be
directed in writing by the Majority Lenders (or, when expressly required by the
terms of this Agreement, all of the Lenders) or the Administrative Agent acting
at the direction and on behalf of the Majority Lenders (or, when expressly
required by the terms of this Agreement, all of the Lenders), except to the
extent required by the terms hereof or thereof or by applicable law, and (iii)
as otherwise expressly set forth in this Section 2.04. No Fronting Bank shall be
liable for any action taken or omitted at the request or with approval of the
Majority Lenders (or, when expressly required by the terms of this Agreement,
all of the Lenders) or of the Administrative Agent acting on behalf of the
Majority Lenders (or, when expressly required by the terms of this Agreement,
all of the Lenders) or for the nonperformance of the obligations of any other
party under this Agreement, any Letter of Credit or any other document
contemplated hereby or thereby. Without in any way limiting any of the
foregoing, each Fronting Bank may rely upon the advice of counsel concerning
legal matters and upon any written communication or any telephone conversation
that it believes to be genuine or to have been signed, sent or made by the
proper Person and shall not be required to make any inquiry concerning the
performance by any Borrower, any Beneficiary or any other Person of any of their
respective obligations and liabilities under or in respect of this Agreement,
any Letter of Credit or any other documents contemplated hereby or thereby. No
Fronting Bank shall have any obligation to make any claim, or assert any Lien,
upon any property held by such Fronting Bank or assert any offset thereagainst
in satisfaction of all or any part of the obligations of the Borrowers
hereunder; provided that each Fronting Bank shall, if so directed by the
Majority Lenders or the Administrative Agent acting on behalf of and with the
consent of the Majority Lenders, have an obligation to make a claim, or assert a
Lien, upon property held by such Fronting Bank in connection with this
Agreement, or assert an offset thereagainst.
 
Each Fronting Bank may accept deposits from, make loans or otherwise extend
credit to, and generally engage in any kind of banking or trust business with
the Borrowers or any of their Affiliates, or any other Person, and receive
payment on such loans or extensions of credit and otherwise act with respect
thereto freely and without accountability in the same manner as if it were not a
Fronting Bank hereunder.
 
Each Fronting Bank makes no representation or warranty and shall have no
responsibility with respect to: (i) the genuineness, legality, validity, binding
effect or enforceability of this Agreement or any other documents contemplated
hereby; (ii) the truthfulness, accuracy or performance of any of the
representations, warranties or agreements contained in this Agreement or any
other documents contemplated hereby; (iii) the collectibility of any amounts due
under this Agreement; (iv) the financial condition of the Borrowers or any other
Person; or (v) any act or omission of any Beneficiary with respect to its use of
any Letter of Credit or the proceeds of any Drawing under any Letter of Credit.
 

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(n) Indemnification of Fronting Banks by Lenders. To the extent that any
Fronting Bank is not reimbursed and indemnified by the Borrowers under Section
8.05 hereof, each Lender agrees to reimburse and indemnify such Fronting Bank on
demand, pro rata in accordance with such Lender’s Percentage, for 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 such Fronting
Bank, in any way relating to or arising out of this Agreement, any Letter of
Credit or any other document contemplated hereby or thereby, or any action taken
or omitted by such Fronting Bank under or in connection with this Agreement, any
Letter of Credit or any other document contemplated hereby or thereby; provided,
however, that such Lender shall not be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Fronting Bank’s gross
negligence or willful misconduct; and provided further, however, that such
Lender shall not be liable to such Fronting Bank or any other Lender for the
failure of any Borrower to reimburse such Fronting Bank for any drawing made
under a Letter of Credit issued for the account of such Borrower with respect to
which such Lender has paid such Fronting Bank such Lender’s pro rata share
(determined in accordance with such Lender’s Percentage), or for such Borrower’s
failure to pay interest thereon. Each Lender’s obligations under this subsection
(n) shall survive the payment in full of all amounts payable by such Lender
under subsection (j) above, and the termination of this Agreement and the
Letters of Credit. Nothing in this subsection (n) is intended to limit any
Lender’s reimbursement obligation contained in subsection (j) above.
 
(o) Representations of Lenders. As between any Fronting Bank and the Lenders, by
its execution and delivery of this Agreement each Lender hereby represents and
warrants solely to such Fronting Bank that (i) it is duly organized and validly
existing in good standing under the laws of the jurisdiction of its formation,
and has full corporate power, authority and legal right to execute, deliver and
perform its obligations to such Fronting Bank under this Agreement; and (ii)
this Agreement constitutes its legal, valid and binding obligation enforceable
against it in accordance with the terms hereof, except as such enforceability
may be limited by applicable bank organization, moratorium, conservatorship or
other laws now or hereafter in effect affecting the enforcement of creditors
rights in general and the rights of creditors of banks, and except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity).
 
(p) The Letters of Credit listed in Schedule IV shall be deemed “Letters of
Credit” upon fulfillment of their conditions precedent listed in Section 3.01.
 
(q) Successor Fronting Bank. Any Fronting Bank may resign at any time by giving
written notice thereof to the Lenders, the Fronting Banks and the Borrowers, as
long as such Fronting Bank has no Letters of Credit outstanding under this
Agreement. Upon such resignation, the Borrowers may designate one or more
Lenders as Fronting Banks to replace the retiring Fronting Bank.
 

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SECTION 2.05 Fees.
 
(a) FE 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 applicable to
such Lender, payable on the last day of each March, June, September and
December during such period, and on such Termination Date, at the rate per annum
set forth below determined by reference to the Reference Ratings of FE from time
to time in effect:
 

 
BASIS FOR PRICING
 
 
LEVEL 1
 
 
Reference Ratings at least A- by S&P or A3 by Moody’s.
 
 
LEVEL 2
 
 
Reference Ratings lower than Level 1 but at least BBB+ by S&P or Baa1 by
Moody’s.
 
 
LEVEL 3
 
 
Reference Ratings of lower than Level 2 but at least BBB by S&P or Baa2 by
Moody’s.
 
 
LEVEL 4
 
 
Reference Ratings lower than Level 3 but at least BBB- by S&P or Baa3 by
Moody’s.
 
 
LEVEL 5
 
 
Reference Ratings lower than Level 4 but at least BB+ by S&P or Ba1 by Moody’s.
 
 
LEVEL 6
 
 
Reference Ratings lower than BB+ by S&P and Ba1 by Moody’s.
 
 
Facility Fee
 
 
0.060%
 
 
0.080%
 
 
0.100%
 
 
0.125%
 
 
0.175%
 
 
0.200%
 

For purposes of the foregoing, if (i) there is a difference of one level in
Reference Ratings of S&P and Moody’s and the higher of such Reference Ratings
falls in Level 1, Level 2, Level 3, Level 4 or Level 5 then the higher Reference
Rating will be used to determine the Facility Fee, and (ii) there is a
difference of more than one level in Reference Ratings of S&P and Moody’s, the
Reference Rating that is one level above the lower of such Reference Ratings
will be used to determine the Facility Fee, unless the lower of such Reference
Ratings falls in Level 6, in which case the lower of such Reference Ratings will
be used to determine the Facility Fee. If there exists only one Reference
Rating, such Reference Rating will be used to determine the Facility Fee.
 
(b) FE 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.
 
(c) Each Borrower shall pay to the Administrative Agent, for the account of the
Lenders, a fee in an amount equal to the then Applicable Margin for Eurodollar
Rate Advances multiplied by the Stated Amount of each Letter of Credit issued
for the account of such Borrower, in each case for the number of days that such
Letter of Credit is issued but undrawn, payable quarterly in arrears on the last
day of each March, June, September and December and on the Termination Date.
 
(d) FE agrees to pay to each Fronting Bank, for its own account, certain fees in
such amounts and payable on such terms as set forth in the Fronting Bank Fee
Letter to which such Fronting Bank is a party.
 

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SECTION 2.06 Adjustment of the Commitments; Borrower Submits.
 
(a) The Borrowers 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 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; provided, further, that the
Commitments may not be reduced to an amount that is less than the aggregate
Stated Amount of outstanding Letters of Credit. Subject to the foregoing, any
reduction of the Commitments to an amount below $2,750,000,000 shall result in a
reduction of the L/C Commitment Amount to the extent of such deficit. Each such
notice of termination or reduction shall be irrevocable; provided, further,
that, if, after giving effect to any reduction of the Commitments, the Swing
Line Sublimit or any Borrower Sublimit exceeds the amount of the aggregate
Commitments, such sublimit shall be automatically reduced by the amount of such
excess.
 
(b) Commitment Increase. (i) On any date on or prior to the Termination Date,
the Borrowers may increase the aggregate amount of the Commitments by an amount
not less than $50,000,000 and up to an amount not more than the sum of the
aggregate amount of the Commitments on the date hereof plus $500,000,000 (any
such increase, a “Commitment Increase”) by designating one or more of the
existing Lenders or one or more Affiliates thereof (each of which, in its sole
discretion, may determine whether and to what degree to participate in such
Commitment Increase) or one or more other Eligible Assignees reasonably
acceptable to the Administrative Agent, the Fronting Banks and the Swing Line
Lenders that at the time agree, in the case of any such Eligible Assignee that
is an existing Lender, to increase its Commitment (an “Increasing Lender”) and,
in the case of any other Eligible Assignee or an Affiliate of a Lender (an
“Additional Lender”), to become a party to this Agreement. The sum of the
increases in the Commitments of the Increasing Lenders pursuant to this
subsection (b) plus the Commitments of the Additional Lenders upon giving effect
to the Commitment Increase shall not exceed the amount of the Commitment
Increase. The Borrowers shall provide prompt notice of any proposed Commitment
Increase pursuant to this Section 2.06(b) to the Administrative Agent, which
shall promptly provide a copy of such notice to the Lenders and the Fronting
Banks.
 
(ii)  Any Commitment Increase shall become effective upon (A) the receipt by the
Administrative Agent of an agreement in form and substance satisfactory to the
Administrative Agent signed by each Borrower, each Increasing Lender and each
Additional Lender, setting forth the new Commitment of each such Lender and
setting forth the agreement of each Additional Lender to become a party to this
Agreement and to be bound by all the terms and provisions hereof binding upon
each Lender, (B) the funding by each Lender of the Advance(s) to be made by each
such Lender described in paragraph (iii) below and (C) receipt by the
Administrative Agent of a certificate (the statements contained in which shall
be true) of a duly authorized officer of each Borrower stating that both before
and after giving effect to such Commitment Increase (1) no Event of Default has
occurred and is continuing and (2) all representations and warranties made by
such Borrower in this Agreement are true and correct in all material respects.
 

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(iii)  Upon the effective date of any Commitment Increase, the Borrowers shall
prepay the outstanding Pro-Rata Advances (if any) in full, and shall
simultaneously make new Pro-Rata Advances hereunder in an amount equal to such
prepayment, so that, after giving effect thereto, the Pro-Rata Advances are held
ratably by the Lenders in accordance with their respective Commitments (after
giving effect to such Commitment Increase). Prepayments made under this
paragraph (iii) shall not be subject to the notice requirements of Section 2.12.
 
(iv)  Notwithstanding any provision contained herein to the contrary, from and
after the date of any Commitment Increase and the making of any Pro-Rata
Advances on such date pursuant to paragraph (iii) above, all calculations and
payments of the facility fees, Letter of Credit fees and interest on the
Advances shall take into account the actual Commitment of each Lender and the
principal amount outstanding of each Advance made by such Lender during the
relevant period of time.
 
(c) Borrower Sublimit Increase. FES and ATSI may increase their Borrower
Sublimits up to $250,000,000 and $100,000,000, respectively, by delivering a
notice to the Administrative Agent requesting such increase, subject to the
condition that either (i) such Borrower requesting the increase in its Borrower
Sublimit has Reference Ratings of at least BBB- by S&P and Baa3 by Moody’s or
(ii) FE unconditionally guarantees the amounts payable by such Borrower
hereunder by delivering to the Administrative Agent a duly completed Guaranty
executed by FE. Each of CEI and TE may increase its Borrower Sublimits up to
$500,000,000 by delivering a notice to the Administrative Agent requesting such
increase, subject to the condition that such Borrower requesting the increase in
its Borrower Sublimit has Reference Ratings of at least BBB by S&P and Baa2 by
Moody’s.
 
SECTION 2.07 Repayment of Advances.
 
Each Borrower agrees to repay the principal amount of each Advance made by each
Lender to such Borrower no later than the earlier of (i) 364 days after the date
such Advance is made (or in the case of a Swing Line Advance, 10 days after the
date such Swing Line Advance is made) and (ii) the latest Termination Date of
all the Lenders; provided, however, that if any Borrower shall deliver to the
Administrative Agent evidence reasonably satisfactory to the Administrative
Agent (including, without limitation, certified copies of governmental approvals
and legal opinions) that such Borrower is authorized under Applicable Law to
incur Indebtedness hereunder maturing more than 364 days after the date of
incurrence of such Indebtedness, such Borrower shall repay each Advance made to
it no later than the latest Termination Date of all Lenders.
 
SECTION 2.08 Interest on Advances.
 
Each Borrower agrees to pay interest on the unpaid principal amount of each
Advance made by each Lender to such Borrower from the date of such Advance until
such principal amount shall be paid in full, at the following rates per annum:
 

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(a) Alternate Base Rate Pro-Rata Advances. If such Advance is an Alternate Base
Pro-Rata 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 Pro-Rata 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 Pro-Rata Advance shall
be Converted or be paid in full and as provided in Section 2.12;
 
(b) Eurodollar Rate Pro-Rata Advances. If such Advance is a Eurodollar Rate
Pro-Rata 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 Pro-Rata Advance in effect from
time to time, payable on the last day of each Interest Period for such
Eurodollar Rate Pro-Rata 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 Pro-Rata Advance shall be
Converted or be paid in full and as provided in Section 2.12;
 
(c) Alternate Base Rate Swing Line Advances. If such Advance is an Alternate
Base Rate Swing Line Advance, a rate per annum equal to the sum of the Alternate
Base Rate in effect from time to time plus the Applicable Margin for such
Alternate Base Rate Swing Line Advance payable on the date such Alternate Base
Rate Swing Line Advance is paid in full and as provided in Section 2.12;
 
(d) Eurodollar Rate Swing Line Advances. If such Advance is a Eurodollar Rate
Swing Line Advance, a rate per annum equal to the sum of the Eurodollar Rate (if
the Eurodollar Rate is available) in effect from time to time plus the
Applicable Margin for such Eurodollar Rate Swing Line Advance, payable on the
last day of the Interest Period of such Swing Line Advance;
 
(e) Cost of Funds Swing Line Advances. If such Advance is a Cost of Funds Swing
Line Advance, a rate per annum equal to the sum of the applicable Swing Line
Lender’s cost of funds as determined by such Swing Line Lender in its sole
discretion with reference to its funding sources on the date such Swing Line
Advance is made for a term equal to the Interest Period for such Swing Line
Advance plus the Applicable Margin for a corresponding Eurodollar Rate Swing
Line Advance, payable on the last day of the Interest Period of such Swing Line
Advance; 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.
 

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SECTION 2.09 Additional Interest on Advances.
 
Each 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 made by such Lender to such
Borrower, 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, that no Lender shall be entitled to demand additional
interest under this Section 2.09 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 applicable Borrower through the Administrative Agent, and such
determination shall be conclusive and binding for all purposes, absent manifest
error.
 
SECTION 2.10 Interest Rate Determination.
 
(a) The Administrative Agent shall give prompt notice to the applicable Borrower
and the Lenders of the applicable interest rate determined by the Administrative
Agent for purposes of Section 2.08(a), (b) or (c).
 
(b) If, with respect to any Eurodollar Rate Pro-Rata Advances, the Majority
Lenders notify the Administrative Agent that (i) dollar deposits are not being
offered to banks in the London interbank eurodollar market for the applicable
amount and Interest Period of such Eurodollar Rate Advances, (ii) adequate and
reasonable means do not exist for determining the Eurodollar Rate or (iii) 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
Eurodollar Rate Advances for such Interest Period, the Administrative Agent
shall forthwith so notify the Borrowers and the Lenders, whereupon
 
(i)  each Eurodollar Rate Pro-Rata Advance will automatically, on the last day
of the then existing Interest Period, therefor, Convert into an Alternate Base
Rate Pro-Rata 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 Borrowers and the Lenders that the circumstances causing such
suspension no longer exist.
 

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SECTION 2.11 Conversion of Advances.
 
(a) Voluntary. Any 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
Pro-Rata Advances, and on the date of any proposed Conversion into Alternate
Base Rate Pro-Rata Advances, and subject to the provisions of Sections 2.10 and
2.11, Convert all Pro-Rata Advances of one Type made to such Borrower in
connection with the same Borrowing into Pro-Rata Advances of another Type or
Types or Pro-Rata 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 Pro-Rata Advances into Pro-Rata Advances of another Type or
Pro-Rata 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 Pro-Rata Advances, unless the applicable Borrower shall also
reimburse the Lenders in respect thereof pursuant to Section 8.05(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
Pro-Rata Advances to be Converted, and (iii) if such Conversion is into, or with
respect to, Eurodollar Rate Pro-Rata Advances, the duration of the Interest
Period for each such Pro-Rata Advance.
 
(b) Mandatory. If any Borrower shall fail to select the Type of any Pro-Rata
Advance or the duration of any Interest Period for any Borrowing comprising
Eurodollar Rate Pro-Rata Advances in accordance with the provisions contained in
the definition of “Interest Period” in Section 1.01 and Section 2.11(a), or if
any proposed Conversion of a Borrowing that is to comprise Eurodollar Rate
Pro-Rata Advances upon Conversion shall not occur as a result of the
circumstances described in paragraph (c) below, the Administrative Agent will
forthwith so notify such 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 Pro-Rata Advances.
 
(c) Failure to Convert. Each notice of Conversion given by any Borrower pursuant
to subsection (a) above shall be irrevocable and binding on such Borrower. In
the case of any Borrowing that is to comprise Eurodollar Rate Pro-Rata 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 Pro-Rata Advances upon such
Conversion, when such Conversion, as a result of such failure, does not occur.
Each Borrower’s obligations under this subsection (c) shall survive the
repayment of all other amounts owing by such Borrower to the Lenders and the
Administrative Agent under this Agreement and any Note and the termination of
the Commitments.
 

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SECTION 2.12 Prepayments.
 
(a) Optional. Any Borrower may at any time prepay the outstanding principal
amounts of the Advances made to such Borrower 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 such 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 with respect to Pro-Rata Borrowings and $1,000,000 with respect
to Swing Line Borrowings and (y) in the case of any such prepayment of a
Eurodollar Rate Advance, such Borrower shall be obligated to reimburse the
Lenders in respect thereof pursuant to Section 8.05(b) on the date of such
prepayment.
 
(b) Mandatory. (i) If and to the extent that the Outstanding Credits on any date
hereunder shall exceed the aggregate amount of the Commitments hereunder on such
date, each Borrower agrees to (A) prepay on such date a principal amount of
Advances and/or (B) pay to the Administrative Agent an amount in immediately
available funds (which funds shall be held as collateral pursuant to
arrangements satisfactory to the Administrative Agent) equal to all or a portion
of the amount available for drawing under the Letters of Credit outstanding at
such time, which prepayment under clause (A) and payment under clause (B) shall,
when taken together result in the amount of Outstanding Credits minus the amount
paid to the Administrative Agent pursuant to clause (B) being less than or equal
to the aggregate amount of the Commitments hereunder on such date.
 
(ii) If at any time the Outstanding Credits with respect to a Borrower on any
date hereunder shall exceed the Borrower Sublimit for such Borrower, such
Borrower agrees to (A) prepay on such date Advances in a principal amount equal
to such excess and/or (B) pay to the Administrative Agent an amount in
immediately available funds (which funds shall be held as collateral pursuant to
arrangements satisfactory to the Administrative Agent) equal to all or a portion
of the amount available for drawing under the Letters of Credit outstanding to
such Borrower at such time, which prepayment under clause (A) and payment under
clause (B) shall, when taken together, result in the amount of Outstanding
Credits minus the amount paid to the Administrative Agent pursuant to clause (B)
being less than or equal to the aggregate amount of the applicable Borrower
Sublimit hereunder on such date.
 
(iii) If at any time the aggregate principal amount of the Swing Line Advances
exceeds the Swing Line Sublimit, each Borrower agrees to prepay the Swing Line
Advances outstanding to such Borrower in a principal amount equal to such
Borrower’s pro-rata amount of such excess, determined on the basis of the
percentage of the aggregate principal amount of Swing Line Advances outstanding
to such Borrower.
 

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(iv) If at any time either ATSI or FES shall have Outstanding Credits and shall
fail to have Reference Ratings of at least BBB- by S&P and Baa3 by Moody’s, and
FE shall fail to deliver to the Administrative Agent a Guaranty executed by FE,
such Borrower agrees (A) to prepay to the Administrative Agent the principal
amount of all Advances outstanding to such Borrower and (B) to pay to the
Administrative Agent an amount in immediately available funds (which funds shall
be held as collateral pursuant to arrangements satisfactory to the
Administrative Agent) equal to all of the amount available for drawing under the
Letters of Credit outstanding to such Borrower at such time.

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 applicable Borrower shall be
obligated to reimburse the Lenders in respect thereof pursuant to
Section 8.05(b) on the date of such prepayment.
 
SECTION 2.13 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 or any increase in the cost to any Fronting Bank or any Lender of
issuing, maintaining or participating in Letters of Credit, then each Borrower
shall from time to time, upon demand by such Lender or such Fronting Bank (as
the case may be) (with a copy of such demand to the Administrative Agent), pay
to the Administrative Agent for the account of such Lender or such Fronting Bank
(as the case may be) additional amounts sufficient to compensate such Lender or
such Fronting Bank (as the case may be) for such increased cost. A certificate
as to the amount of such increased cost and the basis therefor, submitted to
each Borrower and the Administrative Agent by such Lender or such Fronting Bank
(as the case may be), shall constitute such demand and shall be conclusive and
binding for all purposes, absent manifest error.
 

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(b) If any Lender or any Fronting Bank 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 such Fronting Bank (as the case may be) or any corporation controlling
such Lender or such Fronting Bank (as the case may be) and that the amount of
such capital is increased by or based upon the existence of (i) such Lender’s
commitment to lend or participate in Letters of Credit hereunder and other
commitments of this type or (ii) the Advances made by such Lender or (iii) the
participations in Letters of Credit acquired by such Lender or (iv) in the case
of any Fronting Bank, such Fronting Bank’s commitment to issue, maintain and
honor drawings under Letters of Credit hereunder, or (v) the honoring of Letters
of Credit by any Fronting Bank hereunder, then, upon demand by such Lender or
such Fronting Bank (as the case may be) (with a copy of such demand to the
Administrative Agent), each Borrower shall immediately pay to the Administrative
Agent for the account of such Lender or such Fronting Bank (as the case may be),
from time to time as specified by such Lender or such Fronting Bank (as the case
may be), additional amounts sufficient to compensate such Lender, such Fronting
Bank or such corporation in the light of such circumstances, to the extent that
such Lender or such Fronting Bank (as the case may be) determines such increase
in capital to be allocable to (i) in the case of such Lender, the existence of
such Lender’s commitment to lend hereunder or the Advances made by such Lender
or (ii)  the participations in Letters of Credit acquired by such Lender or
(iii) in the case of any Fronting Bank, such Fronting Bank’s Commitment to
issue, maintain and honor drawings under Letters of Credit hereunder, or
(iv) the honoring of Letters of Credit by any Fronting Bank hereunder. A
certificate as to such amounts submitted to each Borrower and the Administrative
Agent by such Lender or such Fronting Bank (as the case may be) shall constitute
such demand and shall be conclusive and binding for all purposes, absent
manifest error.
 
(c) Each Borrower shall be liable for its pro rata share of each payment to be
made by the Borrowers under subsections (a) and (b) of this Section 2.13,
determined on the basis of such Borrower’s Fraction; provided, however, that if
and to the extent that any such liabilities are reasonably determined by the
Borrowers (subject to the approval of the Administrative Agent, which approval
shall not be unreasonably withheld) to be directly attributable to Advances made
to a specific Borrower, then only such Borrower shall be liable for such
payments.
 

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SECTION 2.14 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 Borrowers and the Lenders that the circumstances causing such
suspension no longer exist and (ii) the Borrowers shall forthwith prepay in full
all Eurodollar Rate Advances of all Lenders then outstanding, together with
interest accrued thereon, unless (A) the Borrowers, within five Business Days of
notice from the Administrative Agent, Converts all Eurodollar Rate Pro-Rata
Advances of all Lenders then outstanding into Advances of another Type in
accordance with Section 2.11 (in which case all Eurodollar Rate Swing Line
Advances must still be repaid pursuant to this Section 2.14) or (B) the
Administrative Agent notifies the Borrowers 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 2.14 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 change would avoid or eliminate
such illegality and would not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender.

SECTION 2.15 Payments and Computations.
(a) Each 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 or, with respect to payments made in respect of
Reimbursement Obligations, to the applicable Fronting Bank, at its address
referred to in Section 8.02 in same day funds, without set-off, counterclaim or
defense and any such payment to the Administrative Agent or any Fronting Bank
(as the case may be) shall constitute payment by such 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 or such Fronting Bank (as
the case may be) for their respective interests in such payment. The
Administrative Agent or such Fronting Bank (as the case may be) will promptly
after any such payment cause to be distributed like funds relating to the
payment of principal or interest or facility fees or Reimbursement Obligations
ratably (other than amounts payable pursuant to Section 2.02(c), 2.05, 2.09,
2.11(c), 2.13, 2.16 or 8.05(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 of
the information contained therein in the Register pursuant to Section 8.08(d),
from and after the effective date specified in such Assignment and Acceptance,
the Administrative Agent and each Fronting Bank 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.

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(b) Each Borrower hereby authorizes each Lender and each Fronting Bank, if and
to the extent payment owed to such Lender or such Fronting Bank (as the case may
be) is not made by such Borrower to the Administrative Agent or such Fronting
Bank (as the case may be) when due hereunder or under any Note held by such
Lender, to charge from time to time against any or all of such Borrower’s
accounts (other than any payroll account maintained by such Borrower with such
Lender or such Fronting Bank (as the case may be) if and to the extent that such
Lender or such Fronting Bank (as the case may be) shall have expressly waived
its set-off rights in writing in respect of such payroll account) with such
Lender or such Fronting Bank (as the case may be) 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 2.09
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 2.09,
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 any Borrower
prior to the date on which any payment is due to the Lenders hereunder that such
Borrower will not make such payment in full, the Administrative Agent may assume
that each 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 a 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 2.08, any amount payable by a
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 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.
 

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(g) To the extent that any payment by or on behalf of a Borrower is made to the
Administrative Agent, any Fronting Bank or any Lender, or the Administrative
Agent, any Fronting Bank or any Lender exercises its right of setoff, and such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent,
such Fronting Bank or such Lender in its discretion) to be repaid to a trustee,
receiver or any other party, in connection with any proceeding under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
otherwise (a “Returned Payment”), then (i) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such setoff had not occurred, and (ii) each Lender and each Fronting Bank
severally agrees to pay to the Administrative Agent upon demand its applicable
share (without duplication) of any amount so recovered from or repaid by the
Administrative Agent, plus interest thereon from the date of such demand to the
date such payment is made at a rate per annum equal to the Federal Funds Rate
from time to time in effect. The obligations of the Lenders and the Fronting
Banks under clause (ii) of the preceding sentence shall survive the payment in
full of any amounts hereunder and the termination of this Agreement.
 
SECTION 2.16 Taxes.
 
(a) Any and all payments by each Borrower hereunder and under any Note shall be
made, in accordance with Section 2.15, 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, each Fronting Bank 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, any Fronting
Bank or the Administrative Agent by any jurisdiction in which such Lender, such
Fronting Bank 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 a 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, any Fronting Bank 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 2.16) such Lender, such Fronting Bank 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) such Borrower shall make such deductions and
(iii) FE shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with Applicable Law.
 
(b) In addition, FE agrees to pay any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies that
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, any
Letter of Credit or any Note (herein referred to as “Other Taxes”).
 

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(c) FE agrees to indemnify each Lender, each Fronting Bank 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 2.16) paid by such Lender, such Fronting Bank
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,
such Fronting Bank 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 a Borrower or the Administrative Agent, each Lender organized under the laws
of a jurisdiction outside the United States shall provide the Administrative
Agent, each Fronting Bank, each Swing Line Lender and such 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 longer accurate in any material respect, such Lender shall
promptly notify the Administrative Agent, each Fronting Bank, each Swing Line
Lender and each Borrower in writing to that effect. Unless the Borrowers, the
Fronting Banks, the Swing Line Lenders 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,
each Borrower, each Fronting Bank 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 2.16 shall use its best efforts (consistent with its internal policy and
legal and regulatory restrictions) to change the jurisdiction of its Applicable
Lending Office if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts that may thereafter accrue and
would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
 
(f) Without prejudice to the survival of any other agreement of the Borrowers
hereunder, the agreements and obligations of the Borrowers contained in this
Section 2.16 shall survive the payment in full of principal and interest
hereunder and under any Note.
 

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SECTION 2.17 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 or participations in Letters of Credit acquired by it (other than
pursuant to Section 2.02(c), 2.09, 2.11(c), 2.13, 2.16 or 8.05(b)) in excess of
its ratable share of payments on account of the Advances or Letters of Credit
(as the case may be) obtained by all the Lenders, such Lender shall forthwith
purchase from the other Lenders such participations in the Advances made by them
or participations in Letters of Credit acquired by them (as the case may be) 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.
Each Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.17 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 such Borrower in the amount of such participation.
 
SECTION 2.18 Noteless Agreement; Evidence of Indebtedness.
 
(a) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of each 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.
 
(b) The Administrative Agent shall also maintain accounts in which it will
record (i) the amount of each Advance made hereunder, the Borrower thereof, 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 such Borrower to each Lender hereunder, and (iii) the amount of any sum
received by the Administrative Agent hereunder from each 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 each Borrower to repay
such obligations in accordance with their terms.
 

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(d) Any Lender may request that its Advances be evidenced by a Note. In such
event, each 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 8.08) be represented by one or more Notes payable to the
order of the payee named therein or any assignee pursuant to Section 8.08,
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.
 
SECTION 2.19 Extension of Termination Date.
 
(a) So long as no Event of Default or Unmatured Default has occurred and is
continuing, the Borrowers may, no earlier than 90 days prior to the first
anniversary of the date hereof but no later than 90 days prior to the last
anniversary of the date hereof preceding the then-effective Termination Date, by
delivering a written request (the date of delivery of the written request
described below being the “Extension Notice Date”) to the Administrative Agent
(such request being irrevocable), request that each Lender extend for one year
the Termination Date with respect to such Lender’s Commitment. The
Administrative Agent shall, upon its receipt of such request, promptly notify
each Lender thereof, and request that each Lender promptly advise the
Administrative Agent of its approval or rejection of such request. The Borrowers
may exercise their right to request an extension of the Termination Date under
this Section 2.19 no more than two times.
 
(b) Upon receipt of such notification from the Administrative Agent, each Lender
may (but shall not be required to), in its sole and absolute discretion, agree
to extend the Termination Date with respect to its Commitment and any of its
Outstanding Credits for a period of one year, and shall (should it determine to
do so), no earlier than 60 days but in any event no later than 70 days
immediately following the Extension Notice Date, notify the Administrative Agent
in writing of its consent to such request. If any Lender shall not so notify the
Administrative Agent, such Lender shall be deemed not to have agreed to such
request. The Administrative Agent shall thereupon notify the Borrowers no later
than 75 days following the Extension Notice Date as to the Lenders, if any, that
have consented to such request. Notwithstanding the foregoing, no Advance shall
be outstanding longer than 364 days.
 

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(c) If Lenders holding Commitments aggregating more than 66-2/3% of the
Commitments then in effect agree to such request, the Commitment of each Lender
that agreed to such request shall be extended for a period of one year,
commencing on the then-scheduled Termination Date; subject, however, to the
conditions precedent that (i) the following statements shall be true: (A) no
event has occurred and is continuing, or would result from the extension of the
Termination Date, that constitutes an Event of Default or would, with the giving
of notice or the lapse of time, or both, constitute an Event of Default and
(B) the representations and warranties contained in Section 4.01 are correct in
all material respects on and as of the date of extension of the Termination
Date, before and after giving effect to such extension, as though made on and as
of such date, and that, on or prior to the date of such extension, and (ii) the
Administrative Agent shall have received the following, each dated such date and
in form and substance satisfactory to the Administrative Agent: (x) a
certificate of a duly authorized officer of each Borrower to the effect that as
of the date of extension of the Termination Date the statements set forth in
clauses (A) and (B) above are true, (y) certified copies of the resolutions of
the Board of Directors of each Borrower authorizing such extension and the
performance of this Agreement on and after the date of extension of the
Termination Date, and of all documents evidencing other necessary corporate
action and governmental and regulatory approvals with respect to this Agreement
and such extension of the Termination Date and (z) an opinion of counsel to the
Borrowers, as to such matters related to the foregoing as the Administrative
Agent or the Lenders through the Administrative Agent may reasonably request.
Subject to subsection (d) below, the Commitment of any Lender electing not to
extend (or failing to notify the Administrative Agent in writing of its consent
to extend) the Termination Date shall automatically terminate on the
then-scheduled Termination Date (without regard to any extension by any other
Lender).
 
(d) In the event that any Lender (a “Nonconsenting Lender”) shall not agree (or
shall be deemed not to have agreed) to an extension request of the Borrowers
made pursuant to subsection (a) above, the Borrowers will have the right to
substitute other financial institutions reasonably acceptable to the
Administrative Agent, the Swing Line Lenders and the Fronting Banks for any
Nonconsenting Lender (provided that the other Lenders shall have the right to
increase their Commitments ratably according to the amount of their Commitments
relative to the other Commitments that are to be extended up to the amount of
the Commitment of such Nonconsenting Lender before the Borrowers shall be
permitted to substitute any other financial institution for such Nonconsenting
Lender) by causing any Nonconsenting Lender to assign its Commitment pursuant to
Section 8.08 hereof, provided, however, that the parties to any such assignment
shall not be required to pay the processing and recordation fee otherwise
payable under Section 8.08(a)(iv), and provided, further that such Nonconsenting
Lender shall, prior to the effectiveness of any such assignment, be paid in full
all amounts due to it hereunder.
 
(e) Upon the extension of the Termination Date in accordance with this Section
2.19, the Administrative Agent shall deliver to each Lender a revised Schedule I
setting forth the Commitment of each Lender after giving effect to such
extension of the Termination Date for each Lender, and such Schedule I shall
replace the Schedule I in effect before the extension of the then applicable
Termination Date.
 

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(f) In the event that any Lender shall not have consented to a request made by
the Borrowers under this Section 2.19 to extend the Termination Date, then, on
the date of any termination of such Lender’s Commitment pursuant to this Section
2.19, the Borrowers shall pay or prepay to such Lender the aggregate outstanding
principal amount of all Advances of such Lender and an amount equal to the
aggregate Stated Amount of all issued but undrawn Letters of Credit issued by
such Lender with respect to such termination of its Commitment, together with
accrued interest to the date of such prepayment on the principal amount prepaid
and all other fees and other amounts due and payable to such Lender hereunder.
In the case of any such prepayment of a Eurodollar Rate Advance, the Borrowers
shall be obligated to reimburse each such Lender in respect thereof pursuant to
Section 8.05(b).
 
SECTION 2.20 Several Obligations.
 
Each Borrower’s obligations hereunder are several and not joint. Any action
taken by or on behalf of the Borrowers shall not result in one Borrower being
held responsible for the actions, debts or liabilities of the other Borrowers.
Nothing contained herein shall be interpreted as requiring the Borrowers to
effect Borrowings jointly.
 
 
ARTICLE III
CONDITIONS OF LENDING AND ISSUING LETTERS OF CREDIT
 
SECTION 3.01 Conditions Precedent to Initial Extension of Credit.
 
The obligation of each Lender to make its initial Advance to any Borrower, and
the obligation of each Fronting Bank to issue its initial Letter of Credit, are
subject to the conditions precedent that on or before the date of any such
Extension of Credit:
 
(a) The Administrative Agent shall have received the following, each dated the
same date (except for the financial statements referred to in paragraph (iv)),
in form and substance satisfactory to the Administrative Agent and (except for
any Note) with one copy for each Fronting Bank and each Lender:
 
(i)  This Agreement, duly executed by each of the parties hereto, and Notes
requested by any Lender pursuant to Section 2.18(d), duly completed and executed
by each Borrower and payable to the order of such Lender;
 
(ii)  Certified copies of the resolutions of the Board of Directors of each
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;
 

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(iii)  A certificate of the Secretary or an Assistant Secretary of each Borrower
certifying (A) the names and true signatures of the officers of such Borrower
authorized to sign each Loan Document to which such Borrower is, or is to
become, a party and the other documents to be delivered hereunder; (B) that
attached thereto are true and correct copies of the Organizational Documents of
such 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 (including such Borrower’s Approval, as applicable)
required for the due execution, delivery and performance by such Borrower of
this Agreement and each other Loan Document to which such Borrower is, or is to
become, a party;
 
(iv)  Copies of the consolidated balance sheets of each Borrower and its
Subsidiaries (other than FES and ATSI, the financial statements of which are
consolidated into the balance sheets of FE) as of December 31, 2005, and the
related consolidated statements of income, retained earnings and cash flows of
such Borrower and its Subsidiaries (other than FES and ATSI, the statements of
income, retained earnings and cash flows of which are consolidated into the
financial statements of FE) for the fiscal year then ended, certified by
PricewaterhouseCoopers LLP, and the unaudited consolidated balance sheets of
such Borrower and its Subsidiaries (other than FES and ATSI, the balance sheets
of which are consolidated into the balance sheets of FE) as of June 30, 2006 and
related consolidated statements of income, retained earnings and cash flows of
such Borrower and its Subsidiaries for the three-month period then ended, in all
cases as amended and restated to the date of delivery;
 
(v)  An opinion of Gary D. Benz, Esq., counsel for the Borrowers, substantially
in the form of Exhibit G hereto;
 
(vi)  An opinion of Akin Gump Strauss Hauer & Feld LLP, special counsel for the
Borrowers, substantially in the form of Exhibit H hereto;
 
(vii)  A favorable opinion of King & Spalding LLP, special New York counsel for
the Administrative Agent, substantially in the form of Exhibit I hereto; and
 
(viii)  Such other certifications, opinions, financial or other information,
approvals and documents as the Administrative Agent, any Fronting Bank, any
Swing Line Lender or any other Lender may reasonably request, all in form and
substance satisfactory to the Administrative Agent, such Fronting Bank, such
Swing Line Lender or such other Lender (as the case may be).
 
(b) The Borrowers and each Fronting Bank shall have entered into an agreement,
in form and substance satisfactory to such Fronting Bank, concerning fees
payable by the Borrower to such Fronting Bank for its own account (the “Fronting
Bank Fee Letters”).
 
(c) The Borrowers shall have paid all of the fees payable in accordance with the
Fee Letter, and the Borrowers shall have paid all the fees payable in accordance
with the Fronting Bank Fee Letters.
 

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(d) All amounts outstanding under the Existing 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 and the Existing
Credit Agreement shall have been terminated.
 
(e) The Administrative Agent shall have received all documentation and
information required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including without
limitation the Patriot Act.
 
SECTION 3.02 Conditions Precedent to Each Extension of Credit.
 
The obligation of each Lender to make an Advance to any Borrower as part of any
Borrowing (including the initial Borrowing) that would increase the aggregate
principal amount of Advances outstanding hereunder, and the obligation of each
Fronting Bank to issue, amend, extend or renew a Letter of Credit (including the
initial Letter of Credit for the account of such Borrower), shall be subject to
the further conditions precedent that on the date of such Extension of Credit:
 
(i)  The following statements shall be true (and each of the giving of the
applicable Notice of Pro-Rata Borrowing, Notice of Swing Line Borrowing or
Letter of Credit Request and the acceptance by such Borrower of the proceeds of
such Borrowing or the acceptance of a Letter of Credit by the Beneficiary
thereof, as the case may be, shall constitute a representation and warranty by
such Borrower that on the date of such Extension of Credit such statements are
true):
 
(A)  The representations and warranties of such Borrower contained in
Section 4.01 (other than subsections (f) and (g) thereof with respect to any
Extension of Credit following the initial Extension of Credit) hereof are true
and correct on and as of the date of such Extension of Credit, before and after
giving effect to such Extension of Credit and to the application of the proceeds
therefrom, as though made on and as of such date;
 
(B)  No event has occurred and is continuing, or would result from such
Extension of Credit or from the application of the proceeds therefrom, that
constitutes an Event of Default with respect to such Borrower (and if FE has
executed and delivered a Guaranty with respect to the obligations of such
Borrower hereunder, with respect to FE) or would constitute an Event of Default
with respect to such Borrower (and if FE has executed and delivered a Guaranty
with respect to the obligations of such Borrower hereunder, with respect to FE)
but for the requirement that notice be given or time elapse or both; and
 

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(C)Immediately following such Extension of Credit, (1) the aggregate amount of
Outstanding Credits shall not exceed the aggregate amount of the Commitments
then in effect, (2) the Outstanding Credits of any Lender shall not exceed the
amount of such Lender’s Commitment, (3) the aggregate principal amount of
Advances outstanding for such Borrower shall not exceed amounts authorized under
such Borrower’s Approval or Supplemental Approval, as the case may be, (4) the
Outstanding Credits for the account of any Borrower shall not exceed the
Borrower Sublimit for such Borrower, (5) the aggregate principal amount of the
Swing Line Advances outstanding shall not exceed the Swing Line Sublimit, and
(6) if such Extension of Credit is the issuance of a Letter of Credit, the
Stated Amount thereof, when aggregated with (x) the Stated Amount of each other
Letter of Credit that is outstanding or with respect to which a Letter of Credit
Request has been received and (y) the outstanding Reimbursement Obligations,
shall not exceed the L/C Commitment Amount;
 
(ii)  In the case of an Extension of Credit with respect to ATSI or FES without
delivery of a Guaranty executed by FE with respect to such Borrower, the
financial statements described in Section 5.01(g)(ii) and (iii) shall be
currently available for such Borrower, and such Borrower shall have delivered
copies of such financial statements to the Administrative Agent; and
 
(iii)  Such Borrower shall have delivered to the Administrative Agent copies of
such other approvals and documents as the Administrative Agent, any Fronting
Bank, any Swing Line Lender or any other Lender (through the Administrative
Agent) may reasonably request.
 
SECTION 3.03 Conditions Precedent to Conversions.
 
The obligation of each Lender to Convert any Borrowing of any Borrower 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 2.11 shall constitute a representation and
warranty by such Borrower that on the date of such Conversion such statements
are true):
 
(i)  The representations and warranties of such Borrower 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
 
(ii)  No event has occurred and is continuing or would result from such
Conversion, that constitutes an Event of Default with respect to such Borrower
(and, if FE has executed and delivered a Guaranty with respect to the
obligations of such Borrower hereunder, with respect to FE) or that would
constitute an Event of Default with respect to such Borrower (and, if FE has
executed and delivered a Guaranty with respect to the obligations of such
Borrower hereunder, with respect to FE) but for the requirement that notice be
given or time elapse or both; and
 

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(b) Such Borrower shall have delivered to the Administrative Agent copies of
such other approvals and documents as the Administrative Agent may reasonably
request.
 
SECTION 3.04 Conditions Precedent to Extensions of Credit after Expiration of
Approval.
 
At any time after the expiration of an Approval or Supplemental Approval
applicable to a Borrower, the obligation of each Lender to make an Advance to
such Borrower as part of any Borrowing (including the initial Borrowing) that
would increase the aggregate principal amount of Advances outstanding hereunder,
and the obligation of each Fronting Bank to issue, amend, extend or renew a
Letter of Credit (including the initial Letter of Credit), shall be subject to
the further conditions precedent that on or prior to the date of such Extension
of Credit the Administrative Agent shall have received the following, each dated
the same date, in form and substance satisfactory to the Administrative Agent
and with one copy for each Fronting Bank and each Lender:
 
(i)  A certificate of the Secretary or an Assistant Secretary of such Borrower
certifying that attached thereto is a true and correct copy of the Supplemental
Approval and that such order has been issued and is in full force and effect;
and
 
(ii)  An opinion of Akin Gump Strauss Hauer & Feld LLP, special counsel for such
Borrower, if such Supplemental Approval consists of a FERC order, or Gary D.
Benz, Esq., counsel for such Borrower, if such Supplemental Approval consists of
a PUCO order, to the effect that no Governmental Action is or will be required
in connection with the execution, delivery or performance by such Borrower, or
the consummation by such Borrower of the transactions contemplated by this
Agreement or any other Loan Document to which it is, or is to become, a party
other than such Supplemental Approval, which has been duly issued and is in full
force and effect.
 
Notwithstanding the foregoing, this Section 3.04 shall not be applicable to any
Borrower who has exercised its rights under Section 2.07 hereof to incur
Indebtedness hereunder maturing more than 364 days after the date of the
incurrence of such Indebtedness.
 
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
 
SECTION 4.01 Representations and Warranties of the Borrowers.
 
Each Borrower represents and warrants as follows:
 
(a) Corporate Existence and Power. It is a corporation duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, is duly qualified to do business as a foreign corporation in and
is in good standing under the laws of each 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.
 

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(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 Organizational Documents, 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
Organizational Documents, 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 such
Borrower and each of 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 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
such Borrower and its Subsidiaries taken as a whole, or (ii) the legality,
validity or enforceability of any of the Loan Documents or the rights, remedies
and benefits available to the parties thereunder or the ability of such Borrower
to perform its obligations under the Loan Documents.
 
(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 (i) such
Borrower’s Approval, as applicable, which has been duly issued and is in full
force and effect and (ii) such Borrower’s Supplemental Approval, as applicable.
 
(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.
 

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(f) Litigation. Except as disclosed with respect to ATSI and FES, in FE’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2005, its Quarterly
Report on Form 10-Q for the quarter ended June 30, 2006 and its Current Reports
on Form 8-K filed in 2005 prior to the date hereof (copies of which have been
furnished to each Bank) or with respect to any other Borrower, in such
Borrower’s Annual Report on Form 10-K for the fiscal year ended December 31,
2005, its Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 and
its Current Reports on Form 8-K filed in 2006 prior to the date hereof (copies
of which have been furnished to each Bank for each Borrower other than ATSI and
FES, 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 such Borrower to perform its obligations under this Agreement or any
other Loan Document, and there has been no development in the matters disclosed
in such filings that has had such a material adverse effect.
 
(g) Financial Statements; Material Adverse Change. The consolidated balance
sheets of FE and its Subsidiaries, with respect to ATSI and FES, and such
Borrower and its Subsidiaries, with respect to any other Borrower, as at
December 31, 2005, and the related consolidated statements of income, retained
earnings and cash flows of FE and its Subsidiaries, with respect to ATSI and
FES, and such Borrower and its Subsidiaries, with respect to any other Borrower,
for the fiscal year then ended, certified by PricewaterhouseCoopers LLP,
independent public accountants, and the unaudited consolidated balance sheet of
FE and its Subsidiaries, with respect to ATSI and FES, and such Borrower and its
Subsidiaries, with respect to any other Borrower, as at June 30, 2006, and the
related consolidated statements of income, retained earnings and cash flows of
FE and its Subsidiaries, with respect to ATSI and FES, and such Borrower and its
Subsidiaries, with respect to any other Borrower, for the three months then
ended, copies of each of which have been furnished to each Bank and each
Fronting Bank, in all cases as amended and restated to the date hereof, present
fairly the consolidated financial position of such Borrower and its Subsidiaries
as at such dates and the consolidated results of the operations of such Borrower
and its Subsidiaries for the periods ended on such dates, all in accordance with
GAAP consistently applied. Except as disclosed in FE’s, with respect to ATSI and
FES, or such Borrower’s, with respect to any other Borrower, Annual Report on
Form 10-K for the fiscal year ended December 31, 2005, its Quarterly Report on
form 10-Q for the quarter ended June 30, 2006 and its Current Reports on Form
8-K filed in 2005 prior to the date hereof (copies of which have been furnished
to each Bank), there has been no material adverse change in the business,
condition (financial or otherwise), results of operations or prospects of such
Borrower and its Consolidated Subsidiaries, taken as a whole, since December 31,
2005.
 

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(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 Banks, 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 in accordance with GAAP other than such taxes that such Borrower or such
Subsidiary is contesting in good faith by appropriate legal proceedings.
 
(j) Use of Proceeds. The proceeds of each Extension of Credit and each Letter of
Credit will be used solely for the general corporate purposes of such Borrower
and/or its Subsidiaries.
 
(k) Margin Stock. After applying the proceeds of each Extension of Credit, not
more than 25% of the value of the assets of such Borrower and its Subsidiaries
subject to the restrictions of Section 5.03(a) or (b) will consist of or be
represented by Margin Stock. Such Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Extension of Credit 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. Such 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.
 

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(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 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 such Borrower to the
Administrative Agent, any Fronting Bank 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 BORROWERS
 
SECTION 5.01 Affirmative Covenants of the Borrowers.
 
Unless the Majority Lenders shall otherwise consent in writing, so long as any
amount payable by any Borrower hereunder shall remain unpaid, FE shall have any
obligations under any Guaranty, any Letter of Credit shall remain outstanding or
any Lender shall have any Commitment hereunder, such Borrower will:
 
(a) Preservation of Corporate Existence, Etc. (i) Without limiting the right of
such 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.
 

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(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 such Borrower and
its Subsidiaries, taken as a whole, such compliance to include, without
limitation, compliance with the Patriot Act, regulations promulgated by the U.S.
Treasury Department Office of Foreign Assets Control, Environmental Laws and
ERISA and paying before the same become delinquent all material taxes,
assessments and governmental charges 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 such 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 or any Fronting Bank,
through the Administrative Agent, may reasonably request.
 
(d) Inspection Rights. At any reasonable time and from time to time as the
Administrative Agent, any Fronting Bank or any Lender may reasonably request,
permit the Administrative Agent, such Fronting Bank 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, such Borrower and
any of its Subsidiaries, and to discuss the affairs, finances and accounts of
such Borrower and any of its Subsidiaries with any of their respective officers
or directors; provided, however, that such 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, each Fronting Bank and each Lender agree to use reasonable
efforts to ensure that any information concerning such Borrower or any of its
Subsidiaries obtained by the Administrative Agent, such Fronting Bank 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 such 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, such Fronting Bank’s or such
Lender’s business operations be treated confidentially by the Administrative
Agent, such Fronting Bank or such Lender, as the case may be, and will not be
distributed or otherwise made available by the Administrative Agent, such
Fronting Bank or such Lender, as the case may be, to any Person, other than the
Administrative Agent’s, such Fronting Bank’s or such Lender’s employees,
authorized agents or representatives (including, without limitation, attorneys
and accountants).
 
(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 such Borrower and each of its Subsidiaries in
accordance with GAAP.
 

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(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 properties
and shall not be construed as a covenant of such 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 and each Fronting
Bank, the following:
 
(i)  promptly after the occurrence of any Event of Default, the statement of an
authorized officer of such Borrower setting forth details of such Event of
Default and the action that such Borrower has taken or proposes 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 such Borrower (other
than ATSI or FES, unless then currently available for either such Borrower),
consolidated balance sheets of such Borrower and its Subsidiaries as at the end
of such quarter and consolidated statements of income of such 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 such Borrower and its Subsidiaries as at such date and the results
of operations of such 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 such 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 such Borrower (other than ATSI or FES, unless then currently
available for either such Borrower), a copy of the annual report for such year
for such Borrower and its Subsidiaries, containing consolidated and
consolidating financial statements of such Borrower and its Subsidiaries for
such year certified in a manner acceptable to the Lenders and the Fronting Banks
by PricewaterhouseCoopers LLP or other independent public accountants acceptable
to the Lenders and the Fronting Banks, together with statements of projected
financial performance prepared by management for the next fiscal year, in form
satisfactory to the Administrative Agent;
 

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(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 such 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 such Borrower’s
compliance with or the status of the financial covenants contained in
Section 5.02 hereof;
 
(v)  promptly after the sending or filing thereof, copies of any reports that
such Borrower sends to any of its securityholders, and copies of all reports on
Form 10-K, Form 10-Q or Form 8-K that such Borrower or any of its Subsidiaries
files with the SEC;
 
(vi)  as soon as possible and in any event (A) within 30 days after such
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 such
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 such Borrower describing such Termination
Event and the action, if any, that such 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 such Borrower or any member of the Controlled Group from the PBGC, copies of
each notice received by such 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 such Borrower or any member of the Controlled Group from a Multiemployer Plan
sponsor, a copy of each notice received by such 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
 

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

(h) Borrower Approvals. Maintain such Borrower’s Approval, as applicable, and,
on and after the date of any Extension of Credit after the expiration of such
Borrower’s Approval, as applicable, such Borrower’s Supplemental Approval, as
applicable, in full force and effect and comply with all terms and conditions
thereof until all amounts outstanding under the Loan Documents shall have been
repaid or paid (as the case may be) and the Termination Date has occurred.
 
SECTION 5.02 Debt to Capitalization Ratio.
 
Unless the Majority Lenders shall otherwise consent in writing, so long as any
amount payable by any Borrower hereunder shall remain unpaid, FE shall have any
obligations as guarantor under any Guaranty, any Letter of Credit for the
account of any Borrower shall remain outstanding or any Lender shall have any
Commitment to any Borrower hereunder, such Borrower or FE, as guarantor, as the
case may be, will maintain a Debt to Capitalization Ratio of no more than 0.65
to 1.00 (determined as of the last day of each fiscal quarter); provided,
however, that each of FES and ATSI shall be required to comply with such
covenant only if any Advance or Letter of Credit issued for the account of such
Borrower is outstanding under this Agreement, unless such Borrower shall have
delivered to the Administrative Agent a duly completed Guaranty, executed by FE.

SECTION 5.03 Negative Covenants of the Borrowers.

Unless the Majority Lenders shall otherwise consent in writing, so long as any
amount payable by any Borrower hereunder shall remain unpaid, FE shall have any
obligations as guarantor under any Guaranty, any Letter of Credit for the
account of any Borrower shall remain outstanding or any Lender shall have any
Commitment to any Borrower hereunder, such Borrower will not:

(a) Sales, Etc. (i) Sell, lease, transfer or otherwise dispose of any shares of
common stock of any domestic Significant Subsidiary, whether now owned or
hereafter acquired by such Borrower, or permit any Significant Subsidiary that
is a Subsidiary of such Borrower to do so or (ii) permit such Borrower or any
Subsidiary to sell, lease, transfer or otherwise dispose of (whether in one
transaction or a series of transactions) assets located in The United States of
America 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
such Borrower, as reported on the most recent consolidated balance sheet of such
Borrower, to any entity other than such Borrower or any of its wholly owned
direct or indirect Subsidiaries or, in the case of TE, to Centerior Funding
Corporation; provided, however, that this provision shall not restrict the
transfer of nuclear and fossil generation assets from Penn, OE, CEI and TE to
FirstEnergy Nuclear Generation Corp. and FirstEnergy Generation Corp.,
respectively (the “Generation Transfers”).

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(b) Liens, Etc. Create or suffer to exist, or permit any Significant Subsidiary
that is a Subsidiary of such Borrower 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 Significant Subsidiary that is
a Subsidiary of such Borrower), 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
such 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 such 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 such
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 any First Mortgage Indenture, so long as
(A) 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 or Unmatured Default and (B) no such Liens shall apply to
assets acquired from such 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 on assets of ATSI to secure Indebtedness of ATSI, provided, however,
that the aggregate principal amount of Indebtedness secured by such Liens shall
not at any time exceed 60% of the depreciated book value of the property subject
to such Liens; (vii) Liens securing Stranded Cost Securitization Bonds; (viii)
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
OE; (ix) Liens on assets transferred in the Generation Transfers in favor of the
transferor thereof; and (x) 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 (ix); 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).
 

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(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 such 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 such Borrower is a party, the
corporation formed by such consolidation or into which such Borrower shall be
merged shall assume such 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 and the Fronting Banks.
 
(d) 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 such Borrower to any Person that (in the opinion of
the Majority Lenders and the Fronting Banks) is material to the financial
position or operations of such Borrower or (ii) allow or suffer to exist any
other event or condition known to such Borrower that results in any liability of
such Borrower to the PBGC that (in the opinion of the Majority Lenders and the
Fronting Banks) is material to the financial position or operations of such
Borrower. For purposes of this subsection (d), “liability” shall not include
termination insurance premiums payable under Section 4007 of ERISA.
 
(e) Use of Proceeds. Use the proceeds of any Extension of Credit for any purpose
other than working capital and other general corporate purposes of such Borrower
and its Subsidiaries; provided, however, that such Borrower may not use such
proceeds in connection with any Hostile Acquisition.
 
 
ARTICLE VI
EVENTS OF DEFAULT
 
SECTION 6.01 Events of Default.
 
If any of the following events shall occur and be continuing with respect to any
Borrower, or with respect to FE at any time that a Guaranty with respect to such
Borrower’s obligations hereunder is in effect (as to such Borrower, an “Event of
Default”):
 
(a)  Any principal of, or interest on, any Advance, or any Reimbursement
Obligation, or any fees or other amounts payable hereunder shall not be paid by
such Borrower when the same become due and payable; or
 
(b)  Any representation or warranty made by such 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) Such 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) such 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 such 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 such 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 such Borrower or
any Governmental Authority, or such Borrower shall deny that it has any or
further liability or obligation under this Agreement or any other Loan Document;
or

(e)  Such Borrower or any Significant Subsidiary that is a Subsidiary of such
Borrower shall fail to pay any principal of or premium or interest on any
Indebtedness (other than, in the case of FE, Indebtedness owed by FE under this
Agreement) that is outstanding in a principal amount in excess of $50,000,000 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)  Such Borrower or any Significant Subsidiary that is a Subsidiary of such
Borrower 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 any Borrower or any Significant Subsidiary that is a
Subsidiary of such Borrower 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 any Borrower or any
Significant Subsidiary that is a Subsidiary of such Borrower shall take any
corporate action to authorize or to consent to any of the actions set forth
above in this subsection (f); or
(g)  Any judgment or order for the payment of money exceeding any applicable
insurance coverage by more than $50,000,000 shall be rendered by a court of
final adjudication against such Borrower or any Significant Subsidiary that is a
Subsidiary of such Borrower 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 such 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 any 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 with respect to such Borrower; or
 
(j)  (i) FE shall fail to own directly or indirectly 100% of the issued and
outstanding shares of common stock of each Significant Subsidiary (with any such
failure constituting an Event of Default with respect to FE and any such
Significant Subsidiary that is also a 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 FE (or other securities convertible into such securities)
representing 30% or more of the combined voting power of all securities of FE
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 FE unless the Persons replacing such individuals were nominated
by the stockholders or the Board of Directors of FE in accordance with FE’s
Organizational Documents; 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 that upon consummation will result in its or their acquisition of,
or control over, securities of FE (or other securities convertible into such
securities) representing 30% or more of the combined voting power of all
securities of FE entitled to vote in the election of directors (each a “Change
of Control”).
 

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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 defaulting
Borrower, declare the obligation of each Lender to make Advances to such
Borrower, and the obligation of the Fronting Banks to issue Letters of Credit
for the account of such Borrower, to be terminated, whereupon the same shall
forthwith terminate, and (ii) by notice to such Borrower, declare the Advances
made to such Borrower, an amount equal to the aggregate Stated Amount of all
issued but undrawn Letters of Credit issued for the account of such Borrower,
(such amount being the “Letter of Credit Cash Cover”) and all other amounts
payable under this Agreement and the other Loan Documents by such Borrower to be
forthwith due and payable, whereupon such 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 waived by such
Borrower; provided, however, that in the event of an actual or deemed entry of
an order for relief with respect to any Borrower or any Significant Subsidiary
that is a Subsidiary of such Borrower under the Bankruptcy Code, (A) the
obligation of each Lender to make Advances to such Borrower, and the obligation
of the Fronting Banks to issue Letters of Credit for the account of such
Borrower, shall automatically be terminated and (B) all Advances made to such
Borrower, the Letter of Credit Cash Cover with respect to such Borrower and all
other amounts payable under this Agreement by such Borrower 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 such Borrower.
In the event that any Borrower is required to pay the Letter of Credit Cash
Cover pursuant to this Section, such payment shall be made in immediately
available funds to the Administrative Agent, which shall hold such funds as
collateral pursuant to arrangements satisfactory to the Administrative Agent and
the Fronting Banks to secure Reimbursement Obligations in respect of Letters of
Credit then outstanding.
 
 
ARTICLE VII
THE ADMINISTRATIVE AGENT
 
SECTION 7.01 Authorization and Action.
 
Each Lender, each Fronting Bank and each Swing Line 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 and all Fronting Banks; provided, however, that the
Administrative Agent shall not be required to take any action that exposes the
Administrative Agent to personal liability or that is contrary to this Agreement
or applicable law. The Administrative Agent agrees to give to each Lender and
each Fronting Bank prompt notice of each notice given to it by the Borrowers
pursuant to the terms of this Agreement and to promptly forward to each Lender
and each Fronting Bank the financial statements and any other certificates or
statements delivered to the Administrative Agent pursuant to Section 5.01(g).
 

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SECTION 7.02 Administrative Agent’s Reliance, Etc.
 
Neither the Administrative Agent nor any of its directors, officers, agents or
employees shall be liable to any Lender, any Fronting Bank or the Borrowers 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 8.08, 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 Borrowers), 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 or any Fronting Bank and shall not be responsible
to any Lender or any Fronting Bank 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 Borrowers or to inspect the property
(including the books and records) of the Borrowers; (v) shall not be responsible
to any Lender or any Fronting Bank 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, Barclays and Affiliates.
 
With respect to its Commitment, the Advances made by it and any Note issued to
it, each of Citibank and Barclays 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, a Swing Line Lender or a Fronting Bank (as the
case may be); and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated, include each of Citibank and Barclays in its individual
capacity. Each of Citibank and Barclays 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, each Borrower, any of its respective subsidiaries and
any Person who may do business with or own securities of such Borrower or any
such subsidiary, all as if Citibank or Barclays were not the Administrative
Agent or a Fronting Bank (as the case may be) and without any duty to account
therefor to the Lenders or the Fronting Banks.
 

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SECTION 7.04 Lender Credit Decision.
Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent, the Fronting Banks 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, the
Fronting Banks 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 Borrowers), 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 Borrowers but for which the Administrative Agent is not
reimbursed by the Borrowers.

SECTION 7.06 Successor Administrative Agent.
The Administrative Agent may resign at any time by giving written notice thereof
to the Lenders, the Fronting Banks and the Borrowers and may be removed at any
time with or without cause by the Majority Lenders and the Fronting Banks. Upon
any such resignation or removal, the Majority Lenders and the Fronting Banks
shall have the right, with the prior written consent of the Borrowers (unless an
Event of Default or an Unmatured 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 the Fronting Banks, and shall have
accepted such appointment, within 30 days after the retiring Administrative
Agent’s giving of notice of resignation or the Majority Lenders’ and the
Fronting Banks’ removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Lenders and the Fronting Banks,
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 or Unmatured 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 Borrowers, which consent
shall not be unreasonably withheld or delayed.

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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 any 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, 3.03 or 3.04 (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, the aggregate undrawn amount of outstanding Letters of Credit 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 above to take such
action, affect the rights or duties of the Administrative Agent under this
Agreement; and provided, further, that no amendment, waiver or consent that
would adversely affect the rights of, or increase the obligations of, any
Fronting Bank, or that would alter any provision hereof relating to or affecting
Letters of Credit issued by such Fronting Bank, shall be effective unless agreed
to in writing by such Fronting Bank; and provided, further, that no amendment,
waiver or consent that would adversely affect the rights of, or increase the
obligations of, any Swing Line Lender, or that would alter provisions hereof
relating to or affecting Swing Line Advances made by such Swing Line Lender,
shall be effective unless agreed to in writing by such Swing Line Lender; and
provided, further, that this Agreement may be amended and restated without the
consent of any Lender, any Fronting Bank, any Swing Line Lender or the
Administrative Agent if, upon giving effect to such amendment and restatement,
such Lender, such Fronting Bank, such Swing Line 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
(including, without limitation, any obligation to make payment on account of a
Drawing) and shall have been paid in full all amounts payable hereunder to such
Lender, such Fronting Bank, such Swing Line Lender or the Administrative Agent,
as the case may be.
 

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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 any Borrower, to it in care of FE at its address at 76 South
Main Street, Akron, Ohio 44308, Attention: Treasurer, Telecopy: (330) 384-3772;
if to any Bank (including any Swing Line Lender), at its Domestic Lending Office
specified opposite its name on Schedule I hereto; if to any other Lender
(including any Swing Line 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; if to any Fronting Bank
identified on Schedule II hereto, at the address specified opposite its name on
Schedule II hereto; if to any other Fronting Bank, at such address as shall be
designated by such Fronting Bank in a written notice to the other parties; 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 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 or the Fronting Banks pursuant to
Article II or VII shall not be effective until received by the Administrative
Agent, the Swing Line Lenders or the Fronting Banks (as the case may be).
 
SECTION 8.03 Electronic Communications.
 
(a) Each Borrower hereby agrees that it will provide to the Administrative Agent
all information, documents and other materials that it is obligated to furnish
to the Administrative Agent pursuant to the Loan Documents, including, without
limitation, all notices, requests, financial statements, financial and other
reports, certificates and other information materials, but excluding any such
communication that (i) relates to a request for a new, or a conversion of an
existing, Borrowing or other Extension of Credit (including any election of an
interest rate or Interest Period relating thereto), (ii) relates to the payment
of any principal or other amount due under the Credit Agreement prior to the
scheduled date therefor, (iii) provides notice of any Unmatured Default or Event
of Default under the Credit Agreement or (iv) is required to be delivered to
satisfy any condition precedent to the effectiveness of the Credit Agreement
and/or any Borrowing or other Extension of Credit thereunder (all such
non-excluded communications being referred to herein collectively as
“Communications”), by transmitting the Communications in an electronic/soft
medium in a format acceptable to the Administrative Agent to
oploanswebadmin@citigroup.com or faxing the Communications to 212-994-0848. In
addition, each Borrower agrees to continue to provide the Communications to the
Administrative Agent in the manner otherwise specified in this Agreement, but
only to the extent requested by the Administrative Agent.
 

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(b) Each Borrower further agrees that the Administrative Agent may make the
Communications available to the Lenders by posting the Communications on
Intralinks or a substantially similar electronic transmission systems (the
“Platform”). Each Borrower acknowledges that the distribution of material
through an electronic medium is not necessarily secure and that there are
confidentiality and other risks associated with such distribution.
 
(c) THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE AGENT PARTIES (AS
DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY
FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS,
IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT
PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL
THE ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES
(COLLECTIVELY, “AGENT PARTIES”) HAVE ANY LIABILITY TO ANY BORROWER, ANY LENDER
OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT
LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY
BORROWER’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF THE COMMUNICATIONS
THROUGH THE PLATFORM, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS
FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO
HAVE RESULTED PRIMARILY FROM SUCH AGENT PARTY’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
 
(d) The Administrative Agent agrees that the receipt of the Communications by
the Administrative Agent at its e-mail address set forth above shall constitute
effective delivery of the Communications to the Administrative Agent for
purposes of the Loan Documents. Each Lender agrees that notice to it (as
provided in the next sentence) specifying that the Communications have been
posted to the Platform shall constitute effective delivery of the Communications
to such Lender for purposes of the Loan Documents. Each Lender agrees to notify
the Administrative Agent in writing (including by electronic communication) from
time to time of such Lender’s e-mail address to which the foregoing notice may
be sent by electronic transmission and that the foregoing notice may be sent to
such e-mail address.
 
(e) Nothing herein shall prejudice the right of the Administrative Agent or any
Lender to give any notice or other communication pursuant to any Loan Document
in any other manner specified in such Loan Document.
 

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SECTION 8.04 No Waiver; Remedies.
 
No failure on the part of any Lender, any Fronting Bank 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 8.05 Costs and Expenses; Indemnification.
 
(a) FE agrees to pay on demand all costs and expenses incurred by either the
Administrative Agent or any Fronting Banks in connection with the preparation,
execution, delivery, syndication administration, modification and amendment of
this Agreement, any Note, any Letter of Credit 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 and the Fronting
Banks with respect thereto and with respect to advising the Administrative Agent
and the Fronting Bank as to their rights and responsibilities under this
Agreement. FE 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, the Fronting Banks and the
Lenders in connection with the enforcement (whether through negotiations, legal
proceedings or otherwise) of this Agreement, any Note and the other documents to
be delivered hereunder, including, without limitation, counsel fees and expenses
in connection with the enforcement of rights under this Section 8.05(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 2.11 or 2.14
or a prepayment pursuant to Section 2.12 or acceleration of the maturity of any
amounts owing hereunder pursuant to Section 6.01 or upon an assignment made upon
demand of a Borrower pursuant to Section 8.08(h) or for any other reason, FE
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 that 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. FE’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.
 

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(c) Each Borrower hereby agrees to indemnify and hold each Lender, each Fronting
Bank, 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 (including any Borrower) by reason of or in connection
with or arising out of any investigation, litigation or proceeding related to
the Commitments or the commitment of each Fronting Bank hereunder and any use or
proposed use by any Borrower of the proceeds of any Extension of Credit or the
existence or use of any Letter of Credit or the amounts drawn thereunder, 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.
Each Borrower’s obligations under this Section 8.05(c) shall survive the
repayment of all amounts owing to the Lenders, the Fronting Banks and the
Administrative Agent under this Agreement and any Note and the termination of
the Commitments, the commitment of the Fronting Banks hereunder and any Letters
of Credit. If and to the extent that the obligations of the Borrowers under this
Section 8.05(c) are unenforceable for any reason, each 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, each 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.
 
(e) Each Borrower shall be liable for its pro rata share of any payment to be
made by the Borrowers under this Section 8.05, such pro rata share to be
determined on the basis of such Borrower’s Fraction; provided, however, that if
and to the extent that any such liabilities are reasonably determined by the
Borrowers (subject to the approval of the Administrative Agent which approval
shall not be unreasonably withheld) to be directly attributable to a specific
Borrower or Borrowers, only such Borrower or Borrowers, as the case may be,
shall be liable for such payments.
 

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SECTION 8.06 Right of Set-off.
 
Upon the occurrence and during the continuance of any Event of Default each
Lender and each Fronting Bank is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, excluding,
however, any payroll accounts maintained by the Borrowers with such Lender or
such Fronting Bank (as the case may be) if and to the extent that such Lender or
such Fronting Bank (as the case may be) 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 or such Fronting Bank (as the case
may be) to or for the credit or the account of the Borrowers against any and all
of the obligations of the Borrowers now or hereafter existing under this
Agreement and any Note held by such Lender, whether or not such Lender or such
Fronting Bank (as the case may be) shall have made any demand under this
Agreement or such Note and although such obligations may be unmatured. Each
Lender and each Fronting Bank agrees promptly to notify the Borrowers after any
such set-off and application made by such Lender or such Fronting Bank (as the
case may be), provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender and each
Fronting Bank under this Section 8.06 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which such
Lender or such Fronting Bank (as the case may be) may have.
 
SECTION 8.07 Binding Effect.
 
This Agreement shall become effective when it shall have been executed by the
Borrowers and the Administrative Agent and when the Administrative Agent shall
have been notified by each Bank, each Swing Line Lender and each Fronting Bank
that such Bank, such Swing Line Lender or such Fronting Bank (as the case may
be) has executed it and thereafter shall be binding upon and inure to the
benefit of the Borrowers, the Administrative Agent, each Swing Line Lender, each
Fronting Bank and each Lender and their respective successors and permitted
assigns, except that the Borrowers shall not have the right to assign its rights
or obligations hereunder or any interest herein without the prior written
consent of the Lenders and the Fronting Banks.
 

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SECTION 8.08 Assignments and Participations.
 
(a) Each Lender may, with the prior written consent of the Borrowers, the
Fronting Banks (in each Fronting Bank’s sole discretion), the Swing Line Lenders
(in each Swing Line Lender’s sole discretion) and the Administrative Agent
(which consents, in the case of the Borrowers and the Administrative Agent,
shall not unreasonably be withheld or delayed and, in the case of the Borrowers,
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 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
Borrowers or the performance or observance by the Borrowers 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, the Fronting Banks, 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 that by the terms of this Agreement are
required to be performed by it as a Lender.
 

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(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
Borrowers, the Administrative Agent, the Fronting Banks 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 Borrowers, the Fronting Banks 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 A hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to the Borrowers and the Borrowers shall deliver any Note requested
pursuant to Section 2.18 in favor of such assignee or assignor (as the case may
be), after giving effect to such assignment.
 
(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 Borrowers hereunder and its
obligations to the Fronting Banks 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 Borrowers, the
Administrative Agent, the Fronting Banks 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 8.08, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Borrowers furnished to such Lender by or on behalf of the
Borrowers; 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 Borrowers
received by it from such Lender.
 

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(g) Notwithstanding anything to the contrary set forth herein, any Lender may
assign, as collateral or otherwise, any 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,
(ii) any Affiliate of such Lender or (iii) any other Lender, in either case,
without notice to or consent of the Borrowers, the Fronting Banks, the Swing
Line Lenders or the Administrative Agent; provided, that no such assignment
shall release the assigning Lender from its obligations hereunder.
 
(h) If any Lender shall make demand for payment under Section 2.13(a),
2.13(b) or 2.16, or shall deliver any notice to the Administrative Agent
pursuant to Section 2.14 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 2.13(a),
2.13(b) or 2.16, as the case may be, shall have been made by a Borrower) or such
notice (if such suspension is still in effect), as the case may be, such
Borrower may demand that such Lender assign in accordance with this Section 8.08
to one or more Eligible Assignees designated by such 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 such Borrower shall
fail to consummate such assignment on terms acceptable to such Lender, or if
such 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 8.08
during such 15-day period; it being understood for purposes of this
Section 8.08(h) that such assignment shall be conclusively deemed to be on terms
acceptable to such Lender, and such Lender shall be compelled to consummate such
assignment to an Eligible Assignee designated by such Borrower, if such Eligible
Assignee shall agree to such assignment in substantially the form of Exhibit A
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 such Borrower to such Lender hereunder (whether or not then due) as
of the date of such payment accrued in favor of such Lender hereunder.
Notwithstanding the foregoing, no Lender shall make any assignment at any time
pursuant to this subsection (h) if, at such time, (i) an Event of Default or
Unmatured Default has occurred and is continuing, (ii) any Borrower has not
satisfied all of its obligations hereunder with respect to such Lender or (iii)
such replacement of such Lender is not acceptable to the Administrative Agent
and the Fronting Banks.
 

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(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 Borrowers, the option to
provide to a Borrower all or any part of any Advance that such Granting Lender
would otherwise be obligated to make to such 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 2.09 or 2.13 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 a 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 each Borrower, the Administrative Agent,
each Fronting Bank 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
such Borrower, the Administrative Agent, such Fronting Bank 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
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.
 

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SECTION 8.09 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 8.10 Consent to Jurisdiction; Waiver of Jury Trial.
 
(a) To the fullest extent permitted by law, each 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 or any Letter of Credit, 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. Each 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. Each 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 such Borrower at its address specified in
Section 8.02. Each 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) EACH BORROWER, THE ADMINISTRATIVE AGENT, EACH FRONTING BANK, EACH SWING LINE
LENDER 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 LETTER OF CREDIT, OR ANY OTHER INSTRUMENT OR DOCUMENT
DELIVERED HEREUNDER OR THEREUNDER.
 
SECTION 8.11 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 8.12 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 and the Fronting Bank Fee Letters. 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.
 

77

--------------------------------------------------------------------------------

 
SECTION 8.13 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.
 
SECTION 8.14 USA PATRIOT Act Notice.
 
Each Lender that is subject to the Patriot Act, each Fronting Bank and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrowers pursuant to the requirements of the Patriot Act that it
is required to obtain, verify and record information that identifies the
Borrowers, which information includes the name and address of the Borrower and
other information that will allow such Lender, such Fronting Bank or the
Administrative Agent, as applicable, to identify the Borrowers in accordance
with the Patriot Act.
 

 
[Signatures to Follow]
 

78

--------------------------------------------------------------------------------

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

By
   
Name:
 
Title:

S-1

--------------------------------------------------------------------------------

CITIBANK, N.A., as Administrative Agent, and as a Bank

By
   
Name:
 
Title:

S-2

--------------------------------------------------------------------------------

BARCLAYS BANK PLC, as a Bank and as a Fronting Bank

By
   
Name:
 
Title:

S-3

--------------------------------------------------------------------------------

JPMORGAN CHASE BANK, N.A., as a Bank and as a Fronting Bank

By
   
Name:
 
Title:

S-4

--------------------------------------------------------------------------------

KEYBANK NATIONAL ASSOCIATION, as a Bank and as a Fronting Bank

By
   
Name:
 
Title:

S-5

--------------------------------------------------------------------------------

WACHOVIA BANK, NATIONAL ASSOCIATION, as a Bank and as a Fronting Bank

By
   
Name:
 
Title:

S-6

--------------------------------------------------------------------------------

THE ROYAL BANK OF SCOTLAND PLC, as a Bank and as a Fronting Bank

By
   
Name:
 
Title:

S-7

--------------------------------------------------------------------------------

THE BANK OF NOVA SCOTIA, as a Bank and as a Fronting Bank

By
   
Name:
 
Title:

S-8

--------------------------------------------------------------------------------

BANK OF AMERICA, N.A., as a Bank

By
   
Name:
 
Title:

S-9

--------------------------------------------------------------------------------

THE BANK OF NEW YORK, as a Bank

By
   
Name:
 
Title:

S-10

--------------------------------------------------------------------------------

CREDIT SUISSE, CAYMAN ISLANDS BRANCH as a Bank

By
   
Name:
 
Title:

By
   
Name:
 
Title:

 

S-11

--------------------------------------------------------------------------------

MORGAN STANLEY BANK, as a Bank

By
   
Name:
 
Title:

S-12

--------------------------------------------------------------------------------

UBS LOAN FINANCE LLC, as a Bank

By
   
Name:
 
Title:

By
   
Name:
 
Title:

S-13

--------------------------------------------------------------------------------

UNION BANK OF CALIFORNIA, N.A., as a Bank

By
   
Name:
 
Title:

S-14

--------------------------------------------------------------------------------

LEHMAN BROTHERS BANK, FSB, as a Bank

By
   
Name:
 
Title:

S-15

--------------------------------------------------------------------------------

LASALLE BANK, NATIONAL ASSOCIATION, as a Bank

By
   
Name:
 
Title:

S-16

--------------------------------------------------------------------------------

WILLIAM STREET CREDIT CORPORATION, as a Bank

By
   
Name:
 
Title:

S-17

--------------------------------------------------------------------------------

NATIONAL CITY BANK, as a Bank

By
   
Name:
 
Title:

S-18

--------------------------------------------------------------------------------

SUMITOMO MITSUI BANKING CORPORATION, as a Bank

By
   
Name:
 
Title:

S-19

--------------------------------------------------------------------------------

MIZUHO CORPORATE BANK, LTD., as a Bank

By
   
Name:
 
Title:

S-20

--------------------------------------------------------------------------------

PNC BANK, NATIONAL ASSOCIATION, as a Bank

By
   
Name:
 
Title:

S-21

--------------------------------------------------------------------------------

U.S. BANK, N.A., as a Bank

By
   
Name:
 
Title:

S-22

--------------------------------------------------------------------------------

SUNTRUST BANK, as a Bank and as a Fronting Bank

By
   
Name:
 
Title:

S-23

--------------------------------------------------------------------------------

MELLON BANK, N.A., as a Bank

By
   
Name:
 
Title:

S-24

--------------------------------------------------------------------------------

FIRST COMMERCIAL BANK, as a Bank

By
   
Name:
 
Title:

S-25

--------------------------------------------------------------------------------

FIFTH THIRD BANCORP, as a Bank

By
   
Name:
 
Title:

S-26

--------------------------------------------------------------------------------

KBC BANK N.V., as a Bank

By
   
Name:
 
Title:

S-27

--------------------------------------------------------------------------------

FIRST MERIT BANK. N.A., as a Bank

By
   
Name:
 
Title:

S-28

--------------------------------------------------------------------------------

SCHEDULE I

List of Commitments and Lending Offices

Lender
Allocation
Domestic Lending Office
Eurodollar Lending Office
       
Citibank, N.A.
$190,000,000
Two Penns Way
Suite 200
New Castle, DE 19720
Email: christina.m.quezon@citigroup.com
Same as Domestic Lending Office 
       
Barclays Bank PLC
$190,000,000
200 Park Avenue, 4th Floor
New York, NY 10166
c/o Barclays Capital Services LLC
200 Cedar Knolls Road
Whippany, NJ 07981
Phone: 973-576-3795
Fax: 973-576-3014
Email: jan.becker@barcap.com
Same as Domestic Lending Office
       
JPMorgan Chase Bank, N.A.
$157,500,000
1111 Fannin
10th Floor
Houston, TX 77002
Phone: 713-750-2530
Fax: 713-427-6307
email: Kelly.collins@jpmchase.com 
Same as Domestic Lending Office
       
KeyBank National Association
$157,500,000
127 Public Square
Cleveland, OH 44114
Attn: Sherrie Manson
Phone: 216-689-3443
Fax: 216-689-4981
Email: sherrie.manson@keybank.com
Same as Domestic Lending Office
       
Wachovia Bank, National Association
$157,500,000
301 South College St., NC5562
Charlotte, NC 28202
Attn: John Kovarik
Phone: 704-715-1469
Fax: 904-383-1625
Same as Domestic Lending Office
       
The Royal Bank of Scotland plc
$157,500,000
101 Park Avenue
New York, NY 10178
Attn: Li Yao Li
Phone: 212-401-1335
Fax: 212-401-1494
Email: liyao.li@rbos.com
Same as Domestic Lending Office

--------------------------------------------------------------------------------

Lender
Allocation
Domestic Lending Office
Eurodollar Lending Office
       
The Bank of Nova Scotia
$157,500,000
1 Liberty Plaza
New York, NY 10006
Attn: Pier Griffith
Phone: 212-225-5084
Fax: 212-225-5145
Email:
Same as Domestic Lending Office
       
Bank of America, N.A.
$157,500,000
101 North Tryon
Charlotte, NC 28255
NC1-001-15-02
Attn: Cindy Jordan
Phone: 704-387-5440
Same as Domestic Lending Office
       
The Bank of New York
$130,000,000
One Wall Street
Energy Division, 19th Floor
New York, NY 10286
Attn: John-Paul Marotta
Phone: 212-635-8204
Fax: 212-635-7932
Email: jmarotta@bankofny.com  
Same as Domestic Lending Office
       
Credit Suisse, Cayman Islands Branch
$130,000,000
One Madison Avenue
New York, NY 10010
Attn: Ed Markowski
Phone: 212-538-3380
Fax: 212-538-6851
Email: edward.markowski@csfb.com
Same as Domestic Lending Office
       
Morgan Stanley Bank
$130,000,000
One Pierrepont Plaza, 7th Floor
300 Cadman Plaza West
Brooklyn, NY 11201
Phone: 718-754-7282
Fax: 718-754-7249
Email: Mardoche.Dorval@morganstanley.com
Same as Domestic Lending Office
       
UBS Loan Finance LLC
$130,000,000
677 Washington Blvd.
6th Floor South
Stamford, CT 06901
Attn: David Vitti
Phone: 203-719-5968
Fax: 203-719-3888
Email: David.Vitti@ubs.com
Same as Domestic Lending Office

2

--------------------------------------------------------------------------------

Lender
Allocation
Domestic Lending Office
Eurodollar Lending Office
       
Union Bank of California, N.A.
$100,000,000
445 S. Figueroa Street, 15th Floor
Los Angeles, CA 90071
Attn: Jonathan Bigelow
Phone: 213-236-4246
Fax: 213-236-4096
Email: jonathan.bigelow@uboc.com
Same as Domestic Lending Office
       
Lehman Brothers Bank, FSB
$100,000,000
745 7th Avenue, 5th Floor
New York, NY 10019
Attn: Wendy Lau
Phone: 212-526-6560
Fax: 212-520-0450
Email: WLau@lehman.com
Same as Domestic Lending Office
       
LaSalle Bank, National Association
$100,000,000
135 S. LaSalle St.
Suite 1425
Chicago, IL 60603
Attn: Jeannette Lahart
Phone: (312) 904-0598
Fax: (312) 821-8710
Email: jeannette.lahart@abnamro.com
Same as Domestic Lending Office
       
William Street Credit Corporation
$100,000,000
30 Hudson Street, 17th Floor
Jersey City, NJ 07302
Attn: Philip F. Green
Phone: 212-357-7570
Fax: 212-357-4597
Email: Philip.F.Green@gs.com
Same as Domestic Lending Office
       
National City Bank
$75,000,000
I Cascade Plaza - 14-1803
Akron, OH 44308
Attn: Kevin O. Thompson
Phone: 330-375-8137
Fax: 330-375-8029
Email: Kevin.thompson@nationalcity.com
Same as Domestic Lending Office
       
Sumitomo Mitsui Banking Corporation
$75,000,000
277 Park Avenue, 6th Floor
New York, NY 10172
Attn: Delma Mitchell
Phone: 212-224-4387
Fax:212-224-4391
Email: Delma_C_Mitchell@smbcgroup.com
Same as Domestic Lending Office

3

--------------------------------------------------------------------------------

Lender
Allocation
Domestic Lending Office
Eurodollar Lending Office
       
Mizuho Corporate Bank, Ltd.
$75,000,000
1251 Avenue of the Americas
New York, NY 10020
Attn: Noreen Young
Phone: 201-626-9323
Fax: 201-626-9941
Email: noreen.young@mizuhocbus.com
Same as Domestic Lending Office
       
PNC Bank, National Association
$50,000,000
One PNC Plaza
249 Fifth Avenue
Pittsburgh, PA 15222
Attn: Thomas A. Majeski
Phone: 412-762-2431
Fax: 412-762-6484
Email: Thomas.majeski@pnc.com
Same as Domestic Lending Office
       
U.S. Bank, N.A.
$50,000,000
1850 Osborn Avenue
Oshkosh, WI 54901
Attn: Connie Sweeney
Phone: 920-237-7604
Fax: 920-237-7993
Email: Connie.Sweeney@usbank.com
Same as Domestic Lending Office
       
SunTrust Bank
$50,000,000
303 Peachtree Street, 10th Floor
Atlanta, GA 30308
Attn: Tina Marie Edwards
Phone: 404-588-8660
Fax: 404-588-4402
Email: Tinamarie.edwards@suntrust.com
Same as Domestic Lending Office
       
Mellon Bank, N.A.
$35,000,000
One Mellon Center
Room 151-4530
Pittsburgh, PA 15258-0001
Attn: Mark W. Rogers
Phone: 412-234-1888
Fax: 412-236-1840
Email: rogers.mw@mellon.com
Same as Domestic Lending Office
       
First Commercial Bank
$30,000,000
515 South Flower Street
Suite 1050
Los Angeles, CA 90071
Attn: Josephine Chong
Phone: 213-405-1133
Fax: 213-362-0219
Email: fcblaloan@sbcglobal.net
Same as Domestic Lending Office

4

--------------------------------------------------------------------------------

Lender
Allocation
Domestic Lending Office
Eurodollar Lending Office
       
Fifth Third Bancorp
$25,000,000
5050 Kingsley Drive
MD 1MOC2B
Cincinnati, OH 45263
Attn: Dawn Bufler@53.com
Phone: 513-358-3060
Fax: 513-358-0221
Email: Dawn.bufler@53.com
Same as Domestic Lending Office
       
KBC Bank N.V.
$25,000,000
1177 Avenue of the Americas
New York, NY 10036
Attn: Rose Pagan
Phone: 212-541-0657
Fax: 212-956-5581
Email:
Same as Domestic Lending Office
       
FirstMerit Bank, N.A.
$15,000,000
FirstMerit Bank, N.A.
Mail Code TOW-24
106 S. Main St.
Akron, Ohio 44308
Attention: Laura L. Horovitz
Phone: 330-384-7848
Fax: 330-996-6272
Email: laura.horovitz@firstmerit.com
Same as Domestic Lending Office
       
TOTAL
$2,750,000,000
   

5

--------------------------------------------------------------------------------

SCHEDULE II

List of L/C Fronting Bank Commitments

Fronting Bank
Fronting Bank Address
L/C Fronting Bank Commitment
     
Barclays Bank PLC
200 Park Avenue
New York, NY 10166
$500,000,000
KeyBank National Association
127 Public Square
Cleveland, OH 44114
Attn: Sherrie Manson
$500,000,000
The Royal Bank of Scotland plc
101 Park Avenue
New York, NY 10176
Attn: Luis Montanti
$500,000,000
The Bank of Nova Scotia
1 Liberty Plaza
New York, NY 10006
Attn: Pier Griffith
Phone: 212-225-5084
Fax: 212-225-5145
Email:
$500,000,000
Wachovia Bank, National Association
191 Peachtree St.
Atlanta, GA 30303
Attn: Loan Administration
$375,000,000
JPMorgan Chase Bank, N.A.
270 Park Avenue
15th Floor
New York, NY 10017-2014
Attn: Jonathan Vojtecky
$375,000,000
SunTrust Bank
25 Park Place
16th Floor
Atlanta, GA 30303
Attn: International
Operations
$150,000,000

--------------------------------------------------------------------------------

SCHEDULE III

List of Swing Line Commitments

Swing Line Lender
Swing Line Commitment
 
Barclays Bank PLC
 
$125,000,000
KeyBank National Association
$125,000,000
The Royal Bank of Scotland plc
$125,000,000
Wachovia Bank, National Association
$125,000,000
JPMorgan Chase Bank, N.A.
$125,000,000
The Bank of Nova Scotia
$125,000,000

--------------------------------------------------------------------------------

SCHEDULE IV

Letters of Credit

Please see attached.

--------------------------------------------------------------------------------

EXHIBIT A
Form of Assignment and Acceptance

ASSIGNMENT AND ACCEPTANCE

[Date]

Reference is made to the Credit Agreement, dated as of August 24, 2006 (as
amended, modified or supplemented from time to time, the “Credit Agreement”),
among FirstEnergy Corp., an Ohio corporation (“FE”), FirstEnergy Solutions
Corp., an Ohio corporation (“FES”), American Transmission Systems, Incorporated,
an Ohio corporation (“ATSI”), Ohio Edison Company, an Ohio corporation (“OE”),
Pennsylvania Power Company, a Pennsylvania corporation (“Penn”), The Cleveland
Electric Illuminating Company, an Ohio corporation (“TE”), Jersey Central Power
& Light Company, a New Jersey corporation (“JCP&L”), Metropolitan Edison
Company, a Pennsylvania corporation (“Met-Ed”), and Pennsylvania Electric
Company, a Pennsylvania corporation (“Penelec”, and together with FE, FES, ATSI,
OE, Penn, CEI, TE, JCP&L and Met-Ed, the “Borrowers” and each a “Borrower”), the
banks party thereto (the “Banks”), CITIBANK, N.A. (“Citibank”), as
Administrative Agent (the “Administrative Agent”) for the Lenders thereunder,
the fronting banks party thereto from time to time and the swing line lenders
party thereto from time to time. Capitalized terms defined in the Credit
Agreement are used herein with the same meaning.

[_____________] (the “Assignor”) and [____________] (the “Assignee”) agree as
follows:
 
1. The Assignor hereby sells and assigns, without recourse, to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, without recourse to
the Assignor, all or a portion of the Assignor’s rights and obligations under
the Credit Agreement and the other Loan Documents as of the Effective Date (as
defined in Section 5 below) which represents the percentage interest specified
on Schedule 1 of all outstanding rights and obligations of the Lenders under the
Credit Agreement (the “Assigned Interest”), including, without limitation, such
percentage interest in the Commitment as in effect on the Effective Date, the
Advances outstanding on the date hereof, the Notes (if any) held by the Assignor
and in the Letters of Credit. After giving effect to such sale and assignment,
the Assignee’s Commitment and the amount of outstanding credits owing to the
Assignee will be as set forth in Section 2 of Schedule 1.
 

--------------------------------------------------------------------------------

2. On the Effective Date, the Assignee will pay to the Assignor, in same day
funds, at such address and account as the Assignor shall advise the Assignee,
the principal amount of the Advances, and the participatory interest in
Reimbursement Obligations, outstanding under the Loan Documents that are being
assigned hereunder, and the sale and assignment contemplated hereby shall
thereupon become effective. From and after the Effective Date, the Assignor
agrees that the Assignee shall be entitled to all rights, powers and privileges
of the Assignor under the Credit Agreement to the extent of the Assigned
Interest, including without limitation (i) the right to receive all payments in
respect of the Assigned Interest for the period from and after the Effective
Date, whether on account of principal, interest, fees, indemnities in respect of
claims arising after the Effective Date (subject to Sections 8.05 and 8.08 of
the Credit Agreement), increased costs, additional amounts or otherwise;
(ii) the right to vote and to instruct the Administrative Agent under the Credit
Agreement based on the Assigned Interest; (iii) the right to set-off and to
appropriate and apply deposits of the Borrowers as set forth in the Credit
Agreement; and (iv) the right to receive notices, requests, demands and other
communications. The Assignor agrees that it will promptly remit to the Assignee
any amount received by it in respect of the Assigned Interest (whether from the
Borrowers, the Administrative Agent or otherwise) in the same funds in which
such amount is received by the Assignor.
 
3. The Assignor (i) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim; (ii) other than as provided in this
Assignment and Acceptance, makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto;
(iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrowers or the performance or
observance by the Borrowers of any of their obligations under the Credit
Agreement or any other instrument or document furnished pursuant thereto; (iv) 
(if applicable) attaches the Notes referred to in Section 1 above and requests
that the Administrative Agent exchange such Notes for a new Note payable to the
order of the Assignee in an amount equal to the Commitment assumed by the
Assignee pursuant hereto or new Notes payable to the order of the Assignee in an
amount equal to the Commitment assumed by the Assignee pursuant hereto and the
Assignor in an amount equal to the Commitment retained by the Assignor under the
Credit Agreement, respectively, as specified on Schedule 1 hereto; and (v) makes
no other representation or warranty with respect to the Borrowers, the Loan
Documents or any other instrument or document furnished pursuant thereto, except
as expressly set forth in clause (i) of this Section 3.
 

A-2

--------------------------------------------------------------------------------

4. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Administrative Agent, any Fronting Bank, the Assignor 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 the Credit Agreement; (iii) confirms that it is an
Eligible Assignee; (iv) appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (v) agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of the Credit Agreement are required to be performed by it as a
Lender; [and] (vi) specifies as its Domestic Lending Office (and address for
notices) and Eurodollar Lending Office the offices set forth beneath its name on
the signature pages hereof [and (vi) attaches the forms prescribed by the
Internal Revenue Service of the United States certifying that it is exempt from
United States withholding taxes with respect to all payments to be made to the
Assignee under the Credit Agreement and the Notes].* 
 
5. Following the execution of this Assignment and Acceptance by the Assignor and
the Assignee, it will be delivered to the Administrative Agent for acceptance
and recording by the Administrative Agent. The effective date of this Assignment
and Acceptance shall be the date of acceptance thereof by the Administrative
Agent, unless otherwise specified on Schedule 1 hereto (the “Effective Date”);
provided, however, that in no event shall this Assignment and Acceptance become
effective prior to the payment for the processing and recordation fee to the
Administrative Agent as provided in Section 8.08(a) of the Credit Agreement.
 
6. Upon such acceptance and recording and receipt of any consent of the
Borrowers and the Administrative Agent required pursuant to Section 8.08(a) of
the Credit Agreement, as of the Effective Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and (ii) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
 
7. Upon such acceptance, recording and consent, from and after the Effective
Date, the Administrative Agent shall make all payments under the Credit
Agreement and the Notes in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Notes for periods
prior to the Effective Date directly between themselves.
 

A-3

--------------------------------------------------------------------------------

8. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
This Assignment and Acceptance may be signed 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.
 
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule 1 hereto.
 

[NAME OF ASSIGNOR], as Assignor

By
   
Name:
 
Title:

[NAME OF ASSIGNEE], as Assignee

By
   
Name:
 
Title:

Domestic Lending Office (and
address for notices):
[Address]

Eurodollar Lending Office:
[Address]

Accepted and Consented this ____ day
of ___________, ______

CITIBANK, N.A.
as Administrative Agent

By
   
Name:
 
Title:

A-4

--------------------------------------------------------------------------------

BARCLAYS BANK PLC
as a Fronting Bank and a Swing Line Lender

By
   
Name:
 
Title:

KEYBANK NATIONAL ASSOCIATION
as a Fronting Bank and a Swing Line Lender

By
   
Name:
 
Title:

THE ROYAL BANK OF SCOTLAND PLC
as a Fronting Bank and a Swing Line Lender

By
   
Name:
 
Title:

WACHOVIA BANK, NATIONAL ASSOCIATION
as a Fronting Bank and a Swing Line Lender

By
   
Name:
 
Title:

[OTHER FRONTING BANK]
as a Fronting Bank

By
   
Name:
 
Title:

A-5

--------------------------------------------------------------------------------

[OTHER SWING LINE LENDER]
as a Swing Line Lender

By
   
Name:
 
Title:

Consented to:
FIRSTENERGY CORP.

By
   
Name:
 
Title:

FIRSTENERGY SOLUTIONS CORP.

By
   
Name:
 
Title:

AMERICAN TRANSMISSION SYSTEMS,
INCORPORATED

By
   
Name:
 
Title:

OHIO EDISON COMPANY

By
   
Name:
 
Title:

A-6

--------------------------------------------------------------------------------

PENNSYLVANIA POWER COMPANY

By
   
Name:
 
Title:

THE CLEVELAND ELECTRIC
ILLUMINATING COMPANY

By
   
Name:
 
Title:

THE TOLEDO EDISON COMPANY

By
   
Name:
 
Title:

JERSEY CENTRAL POWER &
LIGHT COMPANY

By
   
Name:
 
Title:

METROPOLITAN EDISON COMPANY

By
   
Name:
 
Title:

PENNSYLVANIA ELECTRIC COMPANY

By
   
Name:
 
Title:

--------------------------------------------------------------------------------

 *
If the Assignee is organized under the laws of a jurisdiction outside the United
States.

 

A-7

--------------------------------------------------------------------------------

Schedule 1 to
Assignment and Acceptance

Dated
   

Section 1.
     
Total Credit Agreement Commitments
$____
   
Percentage Interest:
____%
   
Amount of Assigned Share
$____
   
Section 2.
     
Assignee’s Commitment:
$
   
Aggregate Outstanding Commitments owing to the Assignee:
$
   
A Note payable to the order of the Assignee
 
Dated:
       
Principal amount:
 
$
   
[A Note payable to the order of the Assignor
 
Dated:
   
Principal amount:
 
$
       

Section 3.

Effective Date:
   

*  This date should be no earlier than the date of acceptance by the
Administrative Agent

A-8

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EXHIBIT B
Form of Note

PROMISSORY NOTE

U.S.$[______________]August __, 2006

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

The Borrower promises to pay interest on the unpaid principal amount of each
Advance from the date of such Advance until such principal amount is paid in
full, at such interest rates, and payable at such times, as are specified in the
Credit Agreement.
 
Both principal and interest are payable in lawful money of the United States of
America to Citibank, N.A., as Administrative Agent, at Two Penns Way, Suite 200,
New Castle, Delaware 19720, in same day funds. Each Advance made by the Lender
to the Borrower pursuant to the Credit Agreement, and all payments made on
account of principal thereof, shall be recorded by the Lender and, prior to any
transfer hereof, endorsed on the grid attached hereto which is part of this
Promissory Note.
 
This Promissory Note is one of the Notes referred to in, and is entitled to the
benefits of, the Credit Agreement, dated as of August 24, 2006 (the “Credit
Agreement”), among the Borrower, [FirstEnergy Corp.,] [FirstEnergy Solutions
Corp.,] [American Transmission Systems, Incorporated,] [Ohio Edison Company,]
[Pennsylvania Power Company,] [The Cleveland Electric Illuminating Company,]
[The Toledo Edison Company,] [Jersey Central Power & Light Company,]
[Metropolitan Edison Company,] [Pennsylvania Electric Company,] the banks party
thereto, Citibank, N.A. as Administrative Agent for the Lenders thereunder, the
fronting banks party thereto from time to time and the swing line lenders party
thereto from time to time. The Credit Agreement, among other things,
(i) provides for the making of Advances by the Lender to the Borrower from time
to time in an aggregate amount not to exceed at any time outstanding the U.S.
dollar amount first above mentioned, the indebtedness of the Borrower resulting
from each such Advance being evidenced by this Promissory Note, and
(ii) contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.
 
The Borrower hereby waives presentment, demand, protest and notice of any kind.
No failure to exercise, and no delay in exercising, any rights hereunder on the
part of the holder hereof shall operate as a waiver of such rights.
 

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THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
 
[FIRSTENERGY CORP.] [FIRSTENERGY SOLUTIONS CORP.] [AMERICAN TRANSMISSION
SYSTEMS, INCORPORATED] [OHIO EDISON COMPANY] [PENNSYLVANIA POWER COMPANY] [THE
CLEVELAND ELECTRIC ILLUMINATING COMPANY], [THE TOLEDO EDISON COMPANY] [JERSEY
CENTRAL POWER & LIGHT COMPANY], [METROPOLITAN EDISON COMPANY], [PENNSYLVANIA
ELECTRIC COMPANY

 

By
   
Name:
 
Title:

B-2

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EXHIBIT C
Form of Guaranty

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

The Guarantor, FirstEnergy Solutions Corp., an Ohio corporation (“FES”),
American Transmission Systems, Incorporated, an Ohio corporation (“ATSI”), Ohio
Edison Company, an Ohio corporation (“OE”), Pennsylvania Power Company, a
Pennsylvania corporation (“Penn”), The Cleveland Electric Illuminating Company,
an Ohio corporation (“CEI”), The Toledo Edison Company, an Ohio corporation
(“TE”), Jersey Central Power & Light Company, a New Jersey corporation
(“JCP&L”), Metropolitan Edison Company, a Pennsylvania corporation (“Met-Ed”),
and Pennsylvania Electric Company, a Pennsylvania corporation (“Penelec”, and
together with the Guarantor, FES, ATSI, OE, Penn, CEI, TE, JCP&L and Met-Ed, the
“Borrowers”), are parties to a Credit Agreement, dated as of August 24, 2006 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”; the capitalized terms defined therein and not
otherwise defined herein being used herein as therein defined), with the
Beneficiaries. The Guarantor may receive, directly or indirectly, a portion of
the proceeds of the Extensions of Credit under the Credit Agreement and will
derive substantial direct and indirect benefits from the transactions
contemplated by the Credit Agreement. [It is a condition precedent to any
increase in the Borrower Sublimit of [ATSI][FES] (the “Guaranteed Borrower”)
that either (i) the Guaranteed Borrower has Reference Ratings of at least BBB-
by S&P and Baa3 by Moody’s or (ii) the Guarantor deliver this Guaranty. The
Guarantor desires to deliver this Guaranty in fulfillment of such condition.][
[ATSI][FES] (the “Guaranteed Borrower”) is required to meet the debt to
capitalization ratio financial covenant described in Section 5.02(b) of the
Credit Agreement unless the Guarantor delivers this Guaranty. The Guarantor
desires to deliver this Guaranty in order to exempt the Guaranteed Borrower from
compliance with such financial covenant.]

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

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SECTION 1. Guaranty; Limitation of Liability.
 
(a) The Guarantor hereby absolutely, unconditionally and irrevocably guarantees
the punctual payment when due, whether at scheduled maturity or on any date of a
required prepayment or by acceleration, demand or otherwise, of the Applicable
Percentage (as defined below) of all payment, performance and other obligations
of the Guaranteed Borrower now or hereafter existing under or in respect of the
Loan Documents (including, without limitation, any extensions, modifications,
substitutions, amendments or renewals of any or all of the foregoing
Obligations), whether direct or indirect, absolute or contingent, and whether
for principal, interest, reimbursement obligations, premiums, fees, indemnities,
contract causes of action, costs, expenses or otherwise, including, without
limitation, (i) the obligation of the Guaranteed Borrower to pay principal,
interest, Letter of Credit fees, charges, expenses, fees, attorneys’ fees and
disbursements, indemnities and other amounts payable by the Guaranteed Borrower
under any Loan Document, (ii) the obligation of the Guaranteed Borrower to
reimburse any amount in respect of any drawing under any Letter of Credit issued
for the account of the Guaranteed Borrower and (iii) any liability of the
Guaranteed Borrower on any claim, whether or not the right of any creditor to
payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any proceeding (such obligations being the
“Guaranteed Obligations”), and agrees to pay any and all expenses (including,
without limitation, fees and expenses of counsel) incurred by any Beneficiary in
enforcing any rights under this Guaranty or any other Loan Document. As used
herein, “Applicable Percentage” shall mean (i) 100%, at any time that the
Guaranteed Borrower [has Reference Ratings of less than BBB- by S&P and Baa3 by
Moody’s][the Guaranteed Borrower is not in compliance with the financial
covenant described in Section 5.02 of the Credit Agreement] and (ii) 0%, at any
time that the Guaranteed Borrower has Reference Ratings of at least BBB- by S&P
and Baa3 by Moody’s and the Guaranteed Borrower is in compliance with the
financial covenant described in Section 5.02 of the Credit Agreement. Without
limiting the generality of the foregoing, the Guarantor’s liability shall extend
to all amounts that constitute part of the Guaranteed Obligations and would be
owed by any other Borrower to any Beneficiary under or in respect of the Loan
Documents but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
such other Borrower.
 

C-2

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(b) The Guarantor, and by its acceptance of this Guaranty, each Beneficiary
hereby confirms that it is the intention of all such Persons that this Guaranty
and the Guaranteed Obligations of the Guarantor hereunder not constitute a
fraudulent transfer or conveyance for purposes of Bankruptcy Law (as hereinafter
defined), the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer
Act or any similar foreign, federal or state law to the extent applicable to
this Guaranty and the Guaranteed Obligations. To effectuate the foregoing
intention, the Beneficiaries and the Guarantor hereby irrevocably agree that the
Guaranteed Obligations at any time shall be limited to the maximum amount as
will result in the Guaranteed Obligations not constituting a fraudulent transfer
or conveyance. For purposes hereof, “Bankruptcy Law” means any proceeding of the
type referred to in Section 6.01(f) of the Credit Agreement or Title 11, U.S.
Code, or any similar foreign, federal or state law for the relief of debtors.
 
SECTION 2. Guaranty Absolute.
 
The Guarantor guarantees that the Guaranteed Obligations will be paid strictly
in accordance with the terms of the Loan Documents, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of any Beneficiary with respect thereto. The
obligations of the Guarantor under or in respect of this Guaranty are
independent of the Guaranteed Obligations or any other obligations the
Guaranteed Borrower under or in respect of the Loan Documents, and a separate
action or actions may be brought and prosecuted against the Guarantor to enforce
this Guaranty, irrespective of whether any action is brought against the
Guaranteed Borrower or whether the Guaranteed Borrower is joined in any such
action or actions. The liability of the Guarantor under this Guaranty shall be
irrevocable, absolute and unconditional irrespective of, and the Guarantor
hereby irrevocably waives any defenses it may now have or hereafter acquire in
any way relating to, any or all of the following:
 
(a) any lack of validity or enforceability of any Loan Document or any agreement
or instrument relating thereto;
 
(b) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Guaranteed Obligations or any other obligations of any
other Borrower under or in respect of the Loan Documents, or any other amendment
or waiver of or any consent to departure from any Loan Document, including,
without limitation, any increase in the Guaranteed Obligations resulting from
the extension of additional credit to the Guaranteed Borrower or any other
Borrower or any of its Subsidiaries or otherwise;
 
(c) any taking, exchange, release or non-perfection of any collateral, or any
taking, release or amendment or waiver of, or consent to departure from, any
other guaranty, for all or any of the Guaranteed Obligations;
 

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(d) any manner of application of any collateral, or proceeds thereof, to all or
any of the Guaranteed Obligations, or any manner of sale or other disposition of
any collateral for all or any of the Guaranteed Obligations or any other assets
of the Guaranteed Borrower or any of its Subsidiaries;
 
(e) any change, restructuring or termination of the corporate structure or
existence of the Guaranteed Borrower or any other Borrower or any of its
Subsidiaries;
 
(f) any failure of any Beneficiary to disclose to the Guarantor any information
relating to the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Guaranteed Borrower now or hereafter
known to such Beneficiary (the Guarantor waiving any duty on the part of
Beneficiaries to disclose such information);
 
(g) the failure of any other Person to execute or deliver this Guaranty or any
other guaranty or agreement or the release or reduction of liability of the
Guarantor or other guarantor or surety with respect to the Guaranteed
Obligations; or
 
(h) any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by any
Beneficiary that might otherwise constitute a defense available to, or a
discharge of, the Guarantor or any other guarantor or surety.
 
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Beneficiary or any other Person upon the
insolvency, bankruptcy or reorganization of the Guarantor, the Guaranteed
Borrower or otherwise, all as though such payment had not been made.
 
SECTION 3. Waivers and Acknowledgments.
 
(a) The Guarantor hereby unconditionally and irrevocably waives promptness,
diligence, notice of acceptance, presentment, demand for performance, notice of
nonperformance, default, acceleration, protest or dishonor and any other notice
with respect to any of the Guaranteed Obligations and this Guaranty and any
requirement that any Beneficiary protect, secure, perfect or insure any Lien or
any property subject thereto or exhaust any right or take any action against the
Guaranteed Borrower or any other Person or any collateral.
 
(b) The Guarantor hereby unconditionally and irrevocably waives any right to
revoke this Guaranty and acknowledges that this Guaranty is continuing in nature
and applies to all Guaranteed Obligations, whether existing now or in the
future.
 

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(c) The Guarantor hereby unconditionally and irrevocably waives (i) any defense
arising by reason of any claim or defense based upon an election of remedies by
any Beneficiary that in any manner impairs, reduces, releases or otherwise
adversely affects the subrogation, reimbursement, exoneration, contribution or
indemnification rights of the Guarantor or other rights of the Guarantor to
proceed against the Guaranteed Borrower, any other guarantor or any other Person
or any collateral and (ii) any defense based on any right of set-off or
counterclaim against or in respect of the Guaranteed Obligations.
 
(d) The Guarantor hereby unconditionally and irrevocably waives any duty on the
part of any Beneficiary to disclose to the Guarantor any matter, fact or thing
relating to the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Guaranteed Borrower or any other
Borrower or any of its Subsidiaries now or hereafter known by such Beneficiary.
 
(e) The Guarantor acknowledges that it will receive substantial direct and
indirect benefits from the financing arrangements contemplated by the Loan
Documents and that the waivers set forth in Section 2 and this Section 3 are
knowingly made in contemplation of such benefits.
 
SECTION 4. Subrogation.
 
The Guarantor hereby unconditionally and irrevocably agrees not to exercise any
rights that it may now have or hereafter acquire against the Guaranteed Borrower
that arise from the existence, payment, performance or enforcement of the
Guaranteed Obligations under or in respect of this Guaranty, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution
or indemnification and any right to participate in any claim or remedy of any
Beneficiary against the Guaranteed Borrower, whether or not such claim, remedy
or right arises in equity or under contract, statute or common law, including,
without limitation, the right to take or receive from the Guaranteed Borrower,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim, remedy or right, unless
and until all of the Guaranteed Obligations and all other amounts payable under
this Guaranty shall have been paid in full in cash, all Letters of Credit issued
for the account of the Guaranteed Borrower shall have expired or been terminated
and the Commitments relating to the Guaranteed Borrower’s Borrower Sublimit
shall have expired or been terminated. If any amount shall be paid to the
Guarantor in violation of the immediately preceding sentence at any time prior
to the latest of (a) the payment in full in cash of the Guaranteed Obligations
and all other amounts payable under this Guaranty, (b) the Termination Date, and
(c) the latest date of expiration or termination of all Letters of Credit issued
for the account of the Guaranteed Borrower, such amount shall be received and
held in trust for the benefit of the Beneficiaries, shall be segregated from
other property and funds of the Guarantor and shall forthwith be paid or
delivered to the Administrative Agent in the same form as so received (with any
necessary endorsement or assignment) to be credited and applied to the
Guaranteed Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of the Loan
Documents, or to be held as collateral for any Guaranteed Obligations or other
amounts payable under this Guaranty thereafter arising. If (i) the Guarantor
shall make payment to any Beneficiary of all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other amounts
payable under this Guaranty shall have been paid in full in cash, (iii) the
Termination Date shall have occurred and (iv) all Letters of Credit shall have
expired or been terminated, the Beneficiaries will, at the Guarantor’s request
and expense, execute and deliver to the Guarantor appropriate documents, without
recourse and without representation or warranty, necessary to evidence the
transfer by subrogation to the Guarantor of an interest in the Guaranteed
Obligations resulting from such payment made by the Guarantor pursuant to this
Guaranty.
 

C-5

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SECTION 5. Payments Free and Clear of Taxes, Etc.
 
(a) Any and all payments made by the Guarantor under or in respect of this
Guaranty or any other Loan Document shall be made, in accordance with Section
2.16 of the Credit Agreement, free and clear of and without deduction for any
and all present or future Taxes. If the Guarantor shall be required by law to
deduct any Taxes from or in respect of any sum payable under or in respect of
this Guaranty or any other Loan Document to any Beneficiary, (i) the sum payable
by the Guarantor shall be increased as may be necessary so that after the
Guarantor and the Administrative Agent have made all required deductions
(including deductions applicable to additional sums payable under this Section
5), such Beneficiary receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Guarantor shall make all such
deductions and (iii) the Guarantor shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
 
(b) In addition, the Guarantor agrees to pay any present or future Other Taxes
that arise from any payment made by or on behalf of the Guarantor under or in
respect of this Guaranty or any other Loan Document or from the execution,
delivery or registration of, performance under, or otherwise with respect to,
this Guaranty and the other Loan Documents.
 
(c)  The Guarantor agrees to indemnify each Beneficiary for and hold it harmless
against the full amount of Taxes and Other Taxes, (including, without
limitation, any Taxes or Other Taxes of any kind imposed by any jurisdiction on
amounts payable under this Section 5) imposed on or paid by such Beneficiary and
any liability (including penalties, additions to tax, interest and expenses)
arising therefrom or with respect thereto. This indemnification shall be made
within 30 days from the date such Beneficiary makes written demand therefor.
 
(d)  From time to time thereafter if requested by the Guarantor or the
Administrative Agent, each Beneficiary organized under the laws of a
jurisdiction outside the United States shall provide the Administrative Agent,
each Fronting Bank, each Swing Line Lender and the Guarantor with the forms
prescribed by the Internal Revenue Service of the United States certifying that
such Beneficiary is exempt from United States withholding taxes with respect to
all payments to be made to such Beneficiary hereunder. If for any reason during
the term of this Guaranty, any Beneficiary becomes unable to submit the forms
referred to above or the information or representations contained therein are no
longer accurate in any material respect, such Beneficiary shall promptly notify
the Administrative Agent, each Fronting Bank, each Swing Line Lender and the
Guarantor in writing to that effect. Unless the Guarantor, the Fronting Banks,
the Swing Line Lenders and the Administrative Agent have received forms or other
documents satisfactory to them indicating that payments hereunder are not
subject to United States withholding tax, the Guarantor, each Fronting Bank,
each Swing Line Lender or the Administrative Agent shall withhold taxes from
such payments at the applicable statutory rate in the case of payments to or for
any Beneficiary organized under the laws of a jurisdiction outside the United
States.
 

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(e)  Any Beneficiary claiming any additional amounts payable pursuant to this
Section 5 shall use its best efforts (consistent with its internal policy and
legal and regulatory restrictions) to change the jurisdiction of its Applicable
Lending Office if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts that may thereafter accrue and
would not, in the reasonable judgment of such Beneficiary, be otherwise
disadvantageous to such Beneficiary.
 
(f)  Without prejudice to the survival of any other agreement of the Guarantor
hereunder, the agreements and obligations of the Guarantor contained in this
Section 5 shall survive the payment in full or termination of the Guaranteed
Obligations.
 
SECTION 6. Representations and Warranties.
 
The Guarantor hereby makes each representation and warranty made in the Loan
Documents by the Borrowers with respect to the Guarantor and the Guarantor
hereby further represents and warrants as follows:
 
(a) There are no conditions precedent to the effectiveness of this Guaranty that
have not been satisfied or waived.
 

(b) The Guarantor has, independently and without reliance upon any Beneficiary
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Guaranty and each other
Loan Document to which it is or is to be a party, and the Guarantor has
established adequate means of obtaining from the Guaranteed Borrower on a
continuing basis information pertaining to, and is now and on a continuing basis
will be completely familiar with, the business, condition (financial or
otherwise), operations, performance, properties and prospects of the Guaranteed
Borrower.
 
SECTION 7. Covenants.
 
The Guarantor covenants and agrees that, so long as any part of the Guaranteed
Obligations shall remain unpaid, any Letter of Credit issued for the account of
the Guaranteed Borrower shall be outstanding or any Lender shall have any
Commitment relating to the Guaranteed Borrower’s Borrower Sublimit, the
Guarantor will perform and observe, and cause each of its Subsidiaries to
perform and observe, all of the terms, covenants and agreements set forth in the
Loan Documents on its or their part to be performed or observed or that the
Guarantor has agreed to cause the Guaranteed Borrower or such Subsidiaries to
perform or observe.
 

C-7

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SECTION 8. Amendments, Guaranty Supplements, Etc.
 
No amendment or waiver of any provision of this Guaranty and no consent to any
departure by the Guarantor therefrom shall in any event be effective unless the
same shall be in writing and signed by the Majority Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by all of the Beneficiaries, (a)
reduce or limit the obligations of the Guarantor hereunder, release the
Guarantor hereunder or otherwise limit the Guarantor’s liability with respect to
the Obligations owing to the Beneficiaries under or in respect of the Loan
Documents, (b) postpone any date fixed for payment hereunder or (c) change the
number of Beneficiaries or the percentage of (x) the Commitments, (y) the
aggregate unpaid principal amount of the Advances or (z) the aggregate available
amount of outstanding Letters of Credit that, in each case, shall be required
for the Beneficiaries or any of them to take any action hereunder; and provided,
further, that no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent in addition to the Lenders required above to
take such action, affect the rights or duties of the Administrative Agent under
this Guaranty; and provided, further, that no amendment, waiver or consent that
would adversely affect the rights of, or increase the obligations of, any
Fronting Bank, shall be effective unless agreed to in writing by such Fronting
Bank; and provided, further, that no amendment, waiver or consent that would
adversely affect the rights of, or increase the obligations of, any Swing Line
Lender, shall be effective unless agreed to in writing by such Swing Line
Lender; and provided, further, that this Guaranty may be amended and restated
without the consent of any Beneficiary if, upon giving effect to such amendment
and restatement, such Beneficiary shall no longer be a Beneficiary of this
Guaranty (as so amended and restated) or have any obligation hereunder and shall
have been paid in full all amounts payable hereunder to such Beneficiary.
 
SECTION 9 Notices, Etc.
 
All notices and other communications provided for hereunder shall be in writing
(including telegraphic, telecopy or cable communication) and mailed,
telegraphed, telecopied, cabled or delivered to it, if to the Guarantor,
addressed to it at FE’s addresses specified in Section 8.02 of the Credit
Agreement, if to the Administrative Agent, any Lender or any Fronting Bank, at
its address specified in Section 8.02 of the Credit Agreement, or, as to each
party, at such other address as shall be designated by such party in a written
notice to each other party. All such notices and other communications shall,
when mailed, telegraphed, telecopied or cabled, be effective when deposited in
the mails, delivered to the telegraph company, telecopied or delivered to the
cable company, respectively. Delivery by telecopier of an executed counterpart
of a signature page to any amendment or waiver of any provision of this Guaranty
or of any Guaranty Supplement to be executed and delivered hereunder shall be
effective as delivery of an original executed counterpart thereof.
 

C-8

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SECTION 10. No Waiver, Remedies.
 
No failure on the part of any Beneficiary to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
 
SECTION 11. Right of Set-off.
 
Upon the occurrence and during the continuance of any Event of Default, each
Beneficiary and each of its Affiliates that is acting as a Fronting Bank under
the Credit Agreement is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final, excluding, however,
any payroll accounts maintained by the Guarantor with such Beneficiary if and to
the extent that such Beneficiary shall have expressly waived its set-off rights
in writing in respect of such payroll account) at any time held and other
indebtedness at any time owing by such Beneficiary or such Affiliate to or for
the credit or the account of the Guarantor against any and all of the
obligations of the Guarantor now or hereafter existing under this Guaranty,
irrespective of whether such Beneficiary shall have made any demand under this
Guaranty or any other Loan Document and although such obligations may be
unmatured. Each Beneficiary agrees promptly to notify the Guarantor after any
such set-off and application; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of each Beneficiary and its respective Affiliates under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Beneficiary and its respective Affiliates may have.
 
SECTION 12. Indemnification.
 
(a)  Without limitation on any other Guaranteed Obligations of the Guarantor or
remedies of the Beneficiaries under this Guaranty, the Guarantor shall, to the
fullest extent permitted by law, indemnify, defend and save and hold harmless
each Beneficiary and each of its Affiliates and their respective officers,
directors, employees, agents and advisors (each, an “Indemnified Party”) from
and against, and shall pay on demand, any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party in connection with or as a result of any failure of any
Guaranteed Obligations to be the legal, valid and binding obligations of the
Guaranteed Borrower enforceable against the Guaranteed Borrower in accordance
with their terms.
 
(b) The Guarantor hereby also agrees that none of the Indemnified Parties shall
have any liability (whether direct or indirect, in contract, tort or otherwise)
to the Guarantor or any of its respective Affiliates or any of their respective
officers, directors, employees, agents and advisors, and the Guarantor hereby
agrees not to assert any claim against any Indemnified Party on any theory of
liability, for special, indirect, consequential or punitive damages in
connection with, arising out of, or otherwise relating to this Guaranty, any of
the transactions contemplated herein or the actual or proposed use of the
proceeds of the Advances constituting Guaranteed Obligations.
 

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

SECTION 13. Subordination.
 
If any Unmatured Default shall have occurred and be continuing, the Guarantor
agrees to subordinate any and all debts, liabilities and other obligations owed
to the Guarantor by the Guaranteed Borrower (the “Subordinated Obligations”) to
the Guaranteed Obligations to the extent and in the manner hereinafter set forth
in this Section 13:
 
(a) Prohibited Payments, Etc. Except during the continuance of an Unmatured
Default (including the commencement and continuation of any proceeding under any
Bankruptcy Law relating to the Guaranteed Borrower), the Guarantor may receive
regularly scheduled payments from the Guaranteed Borrower on account of the
Subordinated Obligations. After the occurrence and during the continuance of any
Unmatured Default (including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to the Guaranteed Borrower), however, unless
the Administrative Agent otherwise agrees, the Guarantor shall not demand,
accept or take any action to collect any payment on account of the Subordinated
Obligations.

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

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

C-10

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(d) Administrative Agent Authorization. After the occurrence and during the
continuance of any Unmatured Default (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating to any other
the Guaranteed Borrower), the Administrative Agent is authorized and empowered
(but without any obligation to so do), in its discretion, (i) in the name of the
Guarantor, to collect and enforce, and to submit claims in respect of,
Subordinated Obligations and to apply any amounts received thereon to the
Guaranteed Obligations (including any and all Post Petition Interest), and (ii)
to require the Guarantor (A) to collect and enforce, and to submit claims in
respect of, Subordinated Obligations and (B) to pay any amounts received on such
obligations to the Administrative Agent for application to the Guaranteed
Obligations (including any and all Post Petition Interest).
 
SECTION 14. Continuing Guaranty; Assignments under the Credit Agreement.
 
This Guaranty is a continuing guaranty and shall (a) remain in full force and
effect until the latest of (i) the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty, (ii) the
Termination Date, (iii) the latest date of expiration or termination of all
Letters of Credit issued for the account of the Guaranteed Borrower, (b) be
binding upon the Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Beneficiaries and their successors,
transferees and assigns. Without limiting the generality of clause (c) of the
immediately preceding sentence, any Beneficiary may assign or otherwise transfer
all or any portion of its rights and obligations under the Credit Agreement
(including, without limitation, all or any portion of its Commitments, the
Advances owing to it and the Note or Notes held by it) to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Beneficiary herein or otherwise, in each case as and to
the extent provided in Section 8.08 of the Credit Agreement. The Guarantor shall
not have the right to assign its rights hereunder or any interest herein without
the prior written consent of the Beneficiaries.
 
SECTION 15. Execution in Counterparts.
 
This Guaranty and each amendment, waiver and consent with respect hereto may be
executed in any number of counterparts and by different parties thereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Guaranty by telecopier shall be effective as delivery of an original executed
counterpart of this Guaranty.
 

C-11

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SECTION 16. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.
 
(a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
 
(b) To the fullest extent permitted by law, the Guarantor hereby irrevocably and
unconditionally (i) submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or Federal court of the United States
of America sitting in New York City, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Guaranty or any
of the other Loan Documents to which it is or is to be a party, and (ii) agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State court or, in such Federal court. The Guarantor
agrees, to the fullest extent permitted by law, that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
 
(c) The Guarantor hereby irrevocably and unconditionally waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Guaranty or any of the other Loan Documents to which it is or is to be a
party in any New York State or federal court. The Guarantor hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such suit, action or proceeding in any such court.
The Guarantor also, irrevocably consents, to the fullest extent permitted by
law, to the service of any and all process in any such action or proceeding by
the mailing of certified mail of copies of such process to the Guarantor at its
address specified in Section 9.
 
(d) THE GUARANTOR AND EACH BENEFICIARY HEREBY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
GUARANTY, ANY OTHER LOAN DOCUMENT, OR ANY OTHER INSTRUMENT OR DOCUMENT DELIVERED
HEREUNDER OR THEREUNDER.
 

 

C-12

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

By
   
Name:
 
Title:

 

 

 

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EXHIBIT D
Form of Notice of Pro-Rata Borrowing

Citibank, N.A., as Administrative Agent
for the Lenders party to the Credit Agreement
referred to below

____ __, 200__

Ladies and Gentlemen:
 
The undersigned refers to the Credit Agreement, dated as of August 24, 2006 (the
“Credit Agreement”, the terms defined therein being used herein as therein
defined), among the undersigned, [FirstEnergy Corp.,] [American Transmission
Systems, Incorporated,] [Pennsylvania Power Company,] [The Cleveland Electric
Illuminating Company,] [The Toledo Edison Company,] [Jersey Central Power &
Light Company,] [Metropolitan Edison Company,] [Pennsylvania Electric Company,]
the banks party thereto, Citibank, N.A. as Administrative Agent for the Lenders
thereunder, the fronting banks party thereto from time to time and the swing
line lenders party thereto from time to time, and hereby gives you notice,
irrevocably, pursuant to Section 2.02 of the Credit Agreement that the
undersigned hereby requests a Pro-Rata Borrowing under the Credit Agreement, and
in that connection sets forth below the information relating to such Pro-Rata
Borrowing (the “Proposed Borrowing”) as required by Section 2.02(a) of the
Credit Agreement:
 
(i) The Business Day of the Proposed Borrowing is __________________, ____.
 
(ii) The Type of Pro-Rata Advance to be made in connection with the Proposed
Borrowing is [an Alternate Base Rate Pro-Rata Advance] [a Eurodollar Rate
Pro-Rata Advance].
 
(iii) The aggregate amount of the Proposed Borrowing is $____________.
 
[(iv) The Interest Period for each Eurodollar Rate Pro-Rata Advance made as part
of the Proposed Borrowing is ____ [week[s]][month[s]].]
 

(v)  
The Borrower requesting the Proposed Borrowing is _______________.

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

 

--------------------------------------------------------------------------------

 
(A) the representations and warranties of such Borrower contained in
Section 4.01 [(other than subsections (f) and (g) thereof)]*  of the Credit
Agreement are correct, before and after giving effect to the Proposed Borrowing
and to the application of the proceeds therefrom, as though made on and as of
such date;
 
(B) no event has occurred and is continuing, or would result from such Proposed
Borrowing or from the application of the proceeds therefrom, that constitutes an
Event of Default with respect to such Borrower (and if FE has executed and
delivered a Guaranty with respect to the obligations of such Borrower
thereunder, with respect to FE) or would constitute an Event of Default with
respect to such Borrower (and if FE has executed and delivered a Guaranty with
respect to the obligations of such Borrower thereunder, with respect to FE) but
for the requirement that notice be given or time elapse or both; and
 
(C) immediately following such Proposed Borrowing, (1) the aggregate amount of
Outstanding Credits shall not exceed the aggregate amount of the Commitments
then in effect, (2) the Outstanding Credits of any Lender shall not exceed the
amount of such Lender’s Commitment, (3) the Outstanding Credits for the account
of any Borrower shall not exceed the Borrower Sublimit for such Borrower, and
(4) the aggregate principal amount of the Swing Line Advances outstanding shall
not exceed the Swing Line Sublimit.
 
Very truly yours,

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

By
   
Name:
 
Title:

--------------------------------------------------------------------------------

* Delete for initial Extension of Credit.

D-2

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EXHIBIT E
Form of Notice of Swing Line Borrowing

Citibank, N.A., as Administrative Agent
for the Lenders party to the Credit Agreement
referred to below

____ __, 200__

Ladies and Gentlemen:
 
The undersigned refers to the Credit Agreement, dated as of August 24, 2006 (the
“Credit Agreement”, the terms defined therein being used herein as therein
defined), among the undersigned, [FirstEnergy Corp.,] [American Transmission
Systems, Incorporated,] [Pennsylvania Power Company,] [The Cleveland Electric
Illuminating Company,] [The Toledo Edison Company,] [Jersey Central Power &
Light Company,] [Metropolitan Edison Company,] [Pennsylvania Electric Company,]
the banks party thereto, Citibank, N.A., as Administrative Agent for the Lenders
thereunder, the fronting banks party thereto from time to time and the swing
line lenders party thereto from time to time, and hereby gives you notice,
irrevocably, pursuant to Section 2.03 of the Credit Agreement that the
undersigned hereby requests a Swing Line Borrowing under the Credit Agreement,
and in that connection sets forth below the information relating to such Swing
Line Borrowing (the “Proposed Borrowing”) as required by Section 2.03(b) of the
Credit Agreement:
 
(i) The Business Day of the Proposed Borrowing is __________________, ____.
 
(ii) The Type of a Swing Line Advance to be made in connection with the Proposed
Borrowing is [an Alternate Base Rate Swing Line Advance] [a Eurodollar Rate
Swing Line Advance] [a Cost of Funds Swing Line Advance].
 
(iii) The aggregate amount of the Proposed Borrowing is $____________.
 
[(iv) The Interest Period for each [Eurodollar Rate Swing Line Advance] [Cost of
Funds Swing Line Advance] made as part of the Proposed Borrowing is ____
[week[s]][month[s]].]
 

(v)  
The Borrower requesting the Proposed Borrowing is _______________.

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

 

--------------------------------------------------------------------------------

 
(A) the representations and warranties of such Borrower contained in
Section 4.01 [(other than subsections (f) and (g) thereof)]*  of the Credit
Agreement are correct, before and after giving effect to the Proposed Borrowing
and to the application of the proceeds therefrom, as though made on and as of
such date;
 
(B) no event has occurred and is continuing, or would result from such Proposed
Borrowing or from the application of the proceeds therefrom, that constitutes an
Event of Default with respect to such Borrower (and if FE has executed and
delivered a Guaranty with respect to the obligations of such Borrower
thereunder, with respect to FE) or would constitute an Event of Default with
respect to such Borrower (and if FE has executed and delivered a Guaranty with
respect to the obligations of such Borrower thereunder, with respect to FE) but
for the requirement that notice be given or time elapse or both; and
 
(C) immediately following such Proposed Borrowing, (1) the aggregate amount of
Outstanding Credits shall not exceed the aggregate amount of the Commitments
then in effect, (2) the Outstanding Credits of any Lender shall not exceed the
amount of such Lender’s Commitment, (3) the Outstanding Credits for the account
of any Borrower shall not exceed the Borrower Sublimit for such Borrower, and
(4) the aggregate principal amount of the Swing Line Advances outstanding shall
not exceed the Swing Line Sublimit.
 
Very truly yours,

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

By
   
Name:
 
Title:

--------------------------------------------------------------------------------

* Delete for initial Extension of Credit.

E-2

--------------------------------------------------------------------------------

EXHIBIT F
Form of Letter of Credit Request

_____ __, 200__

Citibank, N.A., as Administrative Agent Two Penns Way
Suite 200
New Castle, Delaware 19720
Attn:_______________________

[___________________, as Fronting Bank
[ADDRESS]]

Ladies and Gentlemen:

The undersigned, [FIRSTENERGY CORP., an Ohio corporation] [FIRSTENERGY SOLUTIONS
CORP. an Ohio corporation], [AMERICAN TRANSMISSION SYSTEMS, INCORPORATED, an
Ohio corporation] [OHIO EDISON COMPANY, an Ohio corporation] [PENNSYLVANIA POWER
COMPANY, a Pennsylvania corporation] [THE CLEVELAND ELECTRIC ILLUMINATING
COMPANY, an Ohio corporation] [THE TOLEDO EDISON COMPANY, an Ohio corporation]
[JERSEY CENTRAL POWER & LIGHT COMPANY, a New Jersey corporation] [METROPOLITAN
EDISON COMPANY, a Pennsylvania corporation] [PENNSYLVANIA ELECTRIC COMPANY, a
Pennsylvania corporation], (the “Borrower”), refer to that certain Credit
Agreement, dated as of August 24, 2006 (the “Credit Agreement”), among
FirstEnergy Corp., FirstEnergy Solutions Corp., American Transmission Systems,
Incorporated, Ohio Edison Company, Pennsylvania Power Company, the Cleveland
Electric Illuminating Company, The Toledo Edison Company, Jersey Central Power &
Light Company, Metropolitan Edison Company, and Pennsylvania Electric Company,
the banks party thereto, Citibank, N.A., as Administrative Agent for the Lenders
thereunder, the fronting banks party thereto from time to time and the swing
line lenders party thereto from time to time. Capitalized terms used herein, and
not otherwise defined herein, shall have their respective defined meanings as
set forth in the Credit Agreement.

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

1. Date of Issuance:

2. Expiration Date:

--------------------------------------------------------------------------------

3. Stated Amount:

4. Beneficiary:

5. Account Party:

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

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

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

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

(C) immediately following the issuance of such Letter of Credit, (1) the
aggregate amount of Outstanding Credits shall not exceed the aggregate amount of
the Commitments then in effect, (2) the Outstanding Credits of any Lender shall
not exceed the amount of such Lender’s Commitment [and] [,] (3) the Stated
Amount thereof, when aggregated with (x) the Stated Amount of each other Letter
of Credit that is outstanding or with respect to which a Letter of Credit
Request has been received and (y) the outstanding Reimbursement Obligations,
shall not exceed the L/C Commitment Amount [and (2) the aggregate Stated Amount
of all outstanding Letters of Credit issued by the Fronting Bank will not exceed
$375,000,000]* *.

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

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

By
   
Name:
 
Title:

--------------------------------------------------------------------------------

* Delete for initial Extension of Credit.
** Include if applicable Fronting Bank is [_______________________________].

F-2

--------------------------------------------------------------------------------

EXHIBIT G
Form of Opinion of Gary D. Benz, Esq.

[LETTERHEAD OF FIRSTENERGY CORP.]
 
August 24, 2006
 

 

 
To the Banks party to the within-mentioned
Credit Agreement, Citibank, N.A., as
Administrative Agent for the Lenders thereunder,
the fronting banks party thereto and
the swing line lenders party thereto.

Re: Credit Agreement,
 
dated as of August 24, 2006
 
Ladies and Gentlemen:
 
I am Associate General Counsel for FirstEnergy Corp., an Ohio corporation (“FE”)
and have acted as counsel to FE and its subsidiaries, FirstEnergy Solutions
Corp., an Ohio corporation (“FES”), American Transmission Systems, Incorporated,
an Ohio corporation (“ATSI”), Ohio Edison Company, an Ohio corporation (“OE”),
Pennsylvania Power Company, a Pennsylvania corporation (“Penn”), The Cleveland
Electric Illuminating Company, an Ohio corporation (“CEI”), The Toledo Edison
Company, an Ohio corporation (“TE”), Jersey Central Power & Light Company, a New
Jersey corporation (“JCP&L”), Metropolitan Edison Company, a Pennsylvania
corporation (“Met-Ed”), and Pennsylvania Electric Company, a Pennsylvania
corporation (“Penelec”, and together with FE, FES, ATSI, OE, Penn, CEI, TE,
JCP&L and Met-Ed, the “Borrowers” and each a “Borrower”) in connection with the
transactions contemplated by the U.S. $2,750,000,000 Credit Agreement, dated as
of August 24, 2006 (the “Credit Agreement”), among the Borrowers, the banks
party thereto, Citibank, N.A., as Administrative Agent for the Lenders
thereunder, the fronting banks party thereto and the swing line lenders party
thereto. Capitalized terms used herein and not defined have the meanings
assigned to them in the Credit Agreement. This opinion is being furnished to you
pursuant to Section 3.01(a)(v) of the Credit Agreement. The Credit Agreement,
the Notes and each Guaranty are sometimes referred to in this opinion
collectively as the “Loan Documents” and each individually as a “Loan Document”.
 

 

--------------------------------------------------------------------------------

For purposes of this opinion, I or persons under my supervision and control have
reviewed executed originals or copies of executed originals of the Credit
Agreement and the respective forms of the Notes and the Guaranty attached
thereto. I or persons under my supervision and control have also reviewed
originals or copies of the Approvals and such corporate records and other
documents and matters and have made such investigation of fact and law as I have
considered relevant or necessary as a basis for this opinion. In such review, I
have assumed the accuracy and completeness of all agreements, documents,
records, certificates and other materials submitted to us, the conformity with
the originals of all such materials submitted to us as copies (whether or not
certified and including facsimiles), the authenticity of the originals of such
materials and all materials submitted to us as originals, the genuineness of all
signatures (other than those on behalf of the Borrowers) and the legal capacity
of all natural persons.
 
I have also assumed (a) the due organization, valid existence and good standing
under the laws of its jurisdiction of incorporation of each party (other than
the Borrowers) to each Loan Document, (b) the corporate or other power and due
authorization of each Person (other than the Borrowers) not a natural person to
execute, deliver and perform its obligations under each Loan Document to which
it is a party, (c) the due execution and delivery of each Loan Document by each
party thereto (other than the Borrowers), and (d) that each Loan Document
constitutes the valid and binding obligation of each party thereto (other than
the Borrowers), enforceable against such party in accordance with its terms. As
to various questions of fact relevant to this opinion, I have relied, without
independent investigation, upon certificates of public officials, certificates
of officers of the Borrowers and representations and warranties of the Borrowers
contained in the Credit Agreement.
 
I am a member of the Bars of the State of Ohio and the Commonwealth of
Pennsylvania, and, for purposes of this opinion, I do not hold myself out as an
expert on the laws of any jurisdiction other than the laws of the State of Ohio
and the Commonwealth of Pennsylvania. Except as set forth in the next sentence,
I express no opinion herein as to the application or effect of the laws of any
jurisdiction other than the laws of the State of Ohio or the Commonwealth of
Pennsylvania. Insofar as the opinion expressed herein relates to matters which
are governed by (i) the laws of the State of New York or the federal laws of the
United States, I have relied with your permission on the opinion, dated the date
hereof, addressed to you of Akin Gump Strauss Hauer & Feld LLP, New York, New
York, and (ii) the laws of the State of New Jersey, I have relied with your
permission on the opinion, dated the date hereof, addressed to me of Thelen Reid
& Priest LLP, Florham Park, New Jersey.
 
Based on the foregoing and such legal considerations as I have deemed necessary
or advisable to express this opinion, I am of the opinion that:
 
Each Borrower is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, is duly
qualified to do business as a foreign corporation in and is in good standing
under the laws of each other state in which the ownership of its properties or
the conduct of its business makes such qualification necessary, except where the
failure to be so qualified would not have a material adverse effect on its
business or financial condition or on its ability to perform its obligations
under the Loan Documents, and has all corporate powers to carry on its business
as now conducted and to maintain and operate its property and business.
 

G-2

--------------------------------------------------------------------------------

 
No Governmental Action is or will be required for (a) the due execution or
delivery by any Borrower of any Loan Document or the performance by any Borrower
of its obligations thereunder or (b) the consummation by any Borrower of any
transaction contemplated by the Loan Documents, other than (1) the Approvals,
which are in full force and effect as of the date hereof, (2) the Supplemental
Approvals, (3) such Governmental Action as may be required as a condition to the
exercise by any Borrower of its rights under Section 2.07 of the Credit
Agreement and (4) such Governmental Action as may be required after the date
hereof in connection with the performance by the Borrowers of the general
covenants set forth in Sections 5.01(a) and (b) of the Credit Agreement.
 
The execution and delivery by each Borrower of the Loan Documents to which it is
a party, the performance by such Borrower of its obligations under such Loan
Documents, the consummation by such Borrower of the transactions contemplated by
any such Loan Document, and compliance by such Borrower with the provisions
thereof, will not result in of (a) a breach or violation of, or conflict with,
any of the provisions of the Organizational Documents of such Borrower, (b) a
breach or violation of, or conflict with, any Applicable Law of the State of
Ohio, the Commonwealth of Pennsylvania or the State of New Jersey, (c) a breach
or contravention of, or conflict with, any of the provisions of any material
indenture, mortgage, lease or other agreement or instrument to which any
Borrower or any Affiliate of such Borrower is a party or by which any of its
property or the property of its Affiliates is bound, or (d) the creation or
imposition of any Lien upon any property of such Borrower or any of its
Affiliates.
 
The execution, delivery and performance by each Borrower of each of the Loan
Documents to which it is a party are within its corporate powers, have been duly
authorized by all necessary corporate action on the part of such Borrower and
did not, do not, and will not require the consent or approval of such Borrower’s
shareholders, or any trustee or holder of any Indebtedness or other obligation
of it, other than such consents and approvals as have been duly obtained, given
or accomplished.
 
The Credit Agreement has been duly executed and delivered by each Borrower and
is a valid and binding obligation of each Borrower, enforceable against each
Borrower in accordance with its terms, subject to and qualified by the effect of
(a) applicable bankruptcy, insolvency, fraudulent transfer and conveyance,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally; (b) general principles of equity, (regardless of whether
enforcement is sought in a proceeding at law or in equity); (c) commercial
reasonableness and unconscionability and an implied covenant of good faith and
fair dealing; (d) the power of the courts to award damages in lieu of equitable
remedies; (e) securities laws and public policy underlying such laws with
respect to rights to indemnification and contribution; and (f) unenforceability
of any indemnification or other provision on the basis that such enforcement
would contravene public policy.
 

G-3

--------------------------------------------------------------------------------

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

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

This opinion is limited by, subject to and based on the following:
 
No examination has been made of, and no opinion is expressed as to the effect
of, any zoning ordinance or permit pertaining to the authority of the Borrowers
to operate their properties or conduct their businesses;
 
I also express no opinion with respect to (i) Section 8.10(a) of the Credit
Agreement or any similar provision in any of the other Loan Documents, to the
extent such provisions purport to confer subject matter jurisdiction on any
federal court of the United States of America or grant a waiver of the defense
of inconvenient forum; (ii) Section 8.10(b) of the Credit Agreement or any
similar provision in any of the other Loan Documents, to the extent such
provisions relate to the waiver of the right to jury trial in the federal
courts; (iii) the financial condition or solvency of any Borrower, (iv) the
financial ability of any Borrower or the ability (financial or otherwise) of any
other Person to meet its obligations under the Credit Agreement or any other
Loan Document; or (v) the compliance of the Credit Agreement or any other Loan
Document or the transactions contemplated thereby with, or the effect of any of
the foregoing with respect to, Federal and state securities Laws, rules and
regulations;
 

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This opinion and the matters addressed herein are as of the date hereof or such
earlier date as is specified herein, and I undertake no, and hereby disclaim
any, obligation to advise you of any change in any matter set forth herein,
whether based on a change in the law, a change in any fact relating to the
Borrowers or any other Person, or any other circumstance occurring after the
date hereof;
 
I have assumed that no fraud, dishonesty, forgery, coercion, duress or breach of
fiduciary duty exists with respect to any of the matters relevant to this
opinion; and
 
This opinion is limited to the matters expressly set forth herein and no opinion
is to be implied or may be inferred beyond the matters expressly stated herein.
 
This opinion is solely for the benefit of the addressees hereof in connection
with the transactions contemplated by the Credit Agreement and may not be relied
on by the addressees hereof for any other purpose or furnished or quoted to or
relied on by any other Person for any purpose without my prior written consent.
 

 

 
Respectfully submitted,
 
Gary D. Benz, Esq
Associate General Counsel

 

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EXHIBIT H
Form of Opinion of Akin Gump Strauss Hauer & Feld LLP

August 24, 2006

To the Banks party to the within-mentioned
Credit Agreement, Citibank, N.A., as
Administrative Agent for the Lenders thereunder,
the fronting banks party thereto and
the swing line lenders party thereto.

Ladies and Gentlemen:
 
We have acted as special New York counsel to FirstEnergy Corp., an Ohio
corporation (“FE”) and its subsidiaries, FirstEnergy Solutions Corp., an Ohio
corporation (“FES”), American Transmission Systems, Incorporated, an Ohio
corporation (“ATSI”), Ohio Edison Company, an Ohio corporation (“OE”),
Pennsylvania Power Company, a Pennsylvania corporation (“Penn”), The Cleveland
Electric Illuminating Company, an Ohio corporation (“CEI”), The Toledo Edison
Company, an Ohio corporation (“TE”), Jersey Central Power & Light Company, a New
Jersey corporation (“JCP&L”), Metropolitan Edison Company, a Pennsylvania
corporation (“Met-Ed”), and Pennsylvania Electric Company, a Pennsylvania
corporation (“Penelec”, and together with FE, FES, ATSI, OE, Penn, CEI, TE,
JCP&L and Met-Ed, the “Borrowers” and each a “Borrower”) in connection with the
execution and delivery of the Credit Agreement, dated as of August 24, 2006 (the
“Credit Agreement”), among the Borrowers, the banks party thereto, Citibank,
N.A., as Administrative Agent for the Banks thereunder, the fronting banks party
thereto and the swing line lenders party thereto. Capitalized terms used herein
and not defined have the meanings assigned to them in the Credit Agreement. This
opinion is being furnished to you pursuant to Section 3.01(a)(vi) of the Credit
Agreement. The Credit Agreement, the Notes and each Guaranty are sometimes
referred to in this opinion collectively as the “Loan Documents” and each
individually as a “Loan Document”.
 
In connection with this opinion, we have reviewed executed originals or copies
of executed originals of the Credit Agreement and the respective forms of the
Notes and the Guaranty attached thereto. We have also reviewed copies of the
Approvals and originals or certified copies of such corporate and company
records of each Borrower and other certificates and documents of officials of
each Borrower and certain of their affiliates, public officials and others as we
have deemed appropriate for purposes of this opinion, and relied upon them to
the extent we deem appropriate. As to various questions of fact relevant to this
opinion, we have relied, without independent investigation, upon certificates of
public officials, certificates of officers of each Borrower, and representations
and warranties of each Borrower contained in the Credit Agreement. In addition,
we have made no inquiry of any Borrower or any other person or entity (including
governmental authorities), regarding any judgments, orders, decrees, franchises,
licenses, certificates, permits or other public records or agreements to which
any Borrower is a party other than those described herein, and our knowledge of
any such matters is accordingly limited. We have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, and
the conformity to authentic original documents of all copies submitted to us as
conformed, certified or reproduced copies.
 

 

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We have also assumed (i) the due organization, valid existence and good standing
under the laws of its jurisdiction of incorporation of each party to each Loan
Document, (ii) the legal capacity of natural persons, (iii) the corporate or
other power and due authorization of each Person not a natural person to
execute, deliver and perform its obligations under each Loan Document to which
it is a party, (iv) the due execution and delivery of each Loan Document by all
parties thereto, (v) that each Loan Document constitutes the valid and binding
obligation of each party thereto (other than the Borrowers), enforceable against
such party in accordance with its terms, (vi) that the execution, delivery and
performance by any party to the Loan Documents do not, and will not, require the
consent or approval of its shareholders, or any trustee or holder of any
Indebtedness or other obligation of it and will not result in (a) a breach or
violation of, or conflict with, any of the provisions of its Organizational
Documents or (b) a breach or contravention of, or conflict with, any of the
provisions of any indenture, mortgage, lease or other agreement or instrument to
which it is a party or (c) a breach or violation of, or conflict with, any law
(other than in the case of any Borrower any Included Law (as defined herein)) or
any order, rule, regulation or determination of any Governmental Authority
applicable to it (other than in the case of any Borrower under any Included
Law), (vii) that all required Governmental Action (other than under in the case
of any Borrower any Included Law) for the execution and delivery by each party
to any Loan Document, the performance by it of its obligations thereunder or the
consummation by it of any transaction contemplated thereby have been obtained or
taken and (viii) that the Approvals (other than the FE SEC Order, ATSI SEC
Order, FES FERC Order, Penn SEC Order, JCP&L SEC Order, Met-Ed SEC Order and
Penelec SEC Order (collectively, the “SEC Order”)) are in full force and effect.
 
Based upon the foregoing and subject to the assumptions, exceptions,
qualifications and limitations set forth herein, we are of the opinion that:
 
No Governmental Action is or will be required under any Included Law for the due
execution and delivery by each Borrower of any Loan Document to which it is a
party or the performance by it of its obligations thereunder, other than (i) the
SEC Order, which is in full force and effect as of the date hereof, and (a) with
respect to ATSI, any ATSI Supplemental Order, (b) with respect to FES, any FES
Supplemental Order, (c) with respect to Penn, any Penn Supplemental Order, (d)
with respect to JCP&L, any JCP&L Supplemental Order, (e) with respect to Met-Ed,
any Met-Ed Supplemental Order and (f) with respect to Penelec, any Penelec
Supplemental Order, and (ii) such Governmental Action as may be required after
the date hereof in connection with the performance by such Borrower of the
general covenants set forth in Section 5.01(a) and (b) of the Credit Agreement.
 
The execution and delivery by each Borrower of any Loan Document to which it is
a party, the performance by such Borrower of its obligations under any such Loan
Document, the consummation by such Borrower of the transactions contemplated by
any such Loan Document and compliance by such Borrower with the provisions
thereof, will not result in a breach or violation of, or conflict with, any
Included Law or, to our knowledge, any order, rule or regulation of any
Governmental Authority having jurisdiction over such Borrower under any Included
Law.
 
The Credit Agreement constitutes a valid and binding obligation of each
Borrower, enforceable against each Borrower in accordance with its terms.
 

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Each Note, when properly completed and executed by the applicable Borrower and
delivered in exchange for value, and each Guaranty, when properly completed and
executed by FE and delivered in exchange for value, will constitute a valid and
binding obligation of such Borrower or FE, as the case may be, enforceable
against such Borrower or FE, as the case may be, in accordance with its terms.
 
*  *  *
 
A.  We express no opinion as to the laws of any jurisdiction other than the
Included Laws. We have made no special investigation or review of any published
constitutions, treaties, laws, rules or regulations or judicial or
administrative decisions (“Laws”), other than a review of (i) the Laws of the
State of New York, and (ii) the Federal Laws of the United States of America.
For purposes of this opinion, the term “Included Laws” means the items described
in clauses (i) and (ii) of the preceding sentence that are, in our experience,
normally applicable to transactions of the type contemplated by the Loan
Documents. The term Included Laws specifically excludes Laws of any counties,
cities, towns, municipalities and special political subdivisions and any
agencies thereof and Laws relating to land use, zoning and building code issues,
taxes, environmental issues, intellectual property Laws, antitrust issues and
securities law issues.
 
B.  When used in this opinion, the phrases “known to us”, “to our knowledge” and
similar phrases (i) mean the conscious awareness of facts or other information
by (a) the lawyer in our firm who signed this letter, (b) any lawyer in our firm
actively involved in negotiating and preparing the Loan Documents and (c) solely
as to information relevant to a particular opinion, issue or confirmation
regarding a particular factual matter, any lawyer in our firm who is primarily
responsible for providing the response concerning that particular opinion, issue
or confirmation, and (ii) do not require or imply (a) any examination of this
firm’s, such lawyer’s or any other person’s or entity’s files, (b) that any
inquiry be made of the client, any lawyer (other than the lawyers described
above), or any other person or entity, or (c) any review or examination of any
agreements, documents, certificates, instruments or other papers (including, but
not limited to, the exhibits and schedules to the Loan Documents and the various
papers referred to in or contemplated by the Loan Documents and the respective
exhibits and schedules thereto) other than the Loan Documents.
 
C.  The matters expressed in this opinion are subject to and qualified and
limited by (i) applicable bankruptcy, insolvency, fraudulent transfer and
conveyance, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally; (ii) general principles of equity, (regardless of
whether enforcement is sought in a proceeding at law or in equity); (iii)
principals of commercial reasonableness and unconscionability and an implied
covenant of good faith and fair dealing; (iv) the power of the courts to award
damages in lieu of equitable remedies; and (v) securities Laws and public policy
underlying such Laws with respect to rights to indemnification and contribution.
Although it appears that the requirements of Section 5-1401 of the New York
General Obligations Law have been met, we express no opinion on whether the
choice of law provision in Section 8.09 of the Credit Agreement or in each
Guaranty or Note would raise any issues under the United States constitution or
in equity that would affect whether courts in New York would enforce the choice
of New York law to govern the Credit Agreement or such Guaranty or Note. We have
also assumed that the choice of law of the State of New York as the governing
law of the Credit Agreement and each Guaranty and Note would not result in a
violation of an important public policy of another state having greater contacts
with the transactions contemplated by the Loan Documents than the State of New
York
 

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D.  This opinion and the matters addressed herein are as of the date hereof or
such earlier date as is specified herein, and we undertake no, and hereby
disclaim any, obligation to advise you of any change in any matter set forth
herein, whether based on a change in the law, a change in any fact relating to
any Borrower or any other Person, or any other circumstance occurring after the
date hereof. This opinion is limited to the matters expressly stated herein and
no opinions are to be inferred or may be implied beyond the opinions expressly
set forth herein.
 
E.  We have assumed that no fraud, dishonesty, forgery, coercion, duress or
breach of fiduciary duty exists with respect to any of the matters relevant to
this opinion.
 
F.  We express no opinion as to (i) the compliance of the transactions
contemplated by the Loan Documents with any regulations or governmental
requirements applicable to any Person other than the Borrowers; (ii) the
financial condition or solvency of any Borrower; (iii) the ability (financial or
otherwise) of any Borrower or any other Person to meet its obligations under the
Loan Documents; (iv) the compliance of the Loan Documents or the transactions
contemplated thereby with, or the effect on any of the foregoing with respect
to, the antifraud provisions of the Federal and state securities Laws, rules and
regulations; or (v) the conformity of the Loan Document to any term sheet or
commitment letter.
 
G.  We express no opinion with respect to any provisions of the Credit Agreement
or any Guaranty that purport to grant:
 
i.  a “consent to jurisdiction” or “waiver of inconvenient forum” in connection
with any legal proceedings, insofar as such provisions relate to federal courts
(except as to the personal jurisdiction thereof); and
 
ii.  a waiver of trial by jury insofar as such provision is sought to be
enforced in a federal court.
 
H.  For purposes of this letter, the phrase “transactions of the type
contemplated by the Loan Documents” and similar phrases mean (i) the issuance of
Advances and Letters of Credit by the banks party to the Credit Agreement and
(ii) the performance by the Borrowers of their obligations under the Loan
Documents.
 
I.  This opinion is solely for your benefit, and no other Person shall be
entitled to rely upon this opinion, except that Gary D. Benz, Esq. may rely on
this opinion, in connection with his opinion to you of even date herewith, to
the extent it relates to matters that involve the Included Laws, with respect to
the Loan Documents and the transactions contemplated thereby. Without our prior
written consent, this opinion may not be quoted in whole or in part or otherwise
referred to in any document and may not be furnished or otherwise disclosed to
or used by any other Person, except for (i) delivery of copies hereof to counsel
for the addressees hereof and (ii) inclusion of copies hereof in a closing file.
 
 
Very truly yours,
 

 
AKIN GUMP STRAUSS HAUER & FELD LLP
 

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EXHIBIT I
Form of Opinion of
Special New York Counsel to the Administrative Agent

August 24, 2006

Citibank, N.A., as administrative agent, 
the fronting banks, the swing line lenders and
the lenders party to the Credit Agreement
defined below

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

Ladies and Gentlemen:
 
We have acted as special New York counsel to Citibank, N.A., individually and as
administrative agent (the “Administrative Agent”), in connection with the
preparation, execution and delivery of the Credit Agreement, dated as of August
24, 2006 (the “Credit Agreement”), among FirstEnergy Corp., an Ohio corporation
(“FE”), FirstEnergy Solutions Corp., an Ohio corporation (“FES”), American
Transmission Systems, Incorporated, an Ohio corporation (“ATSI”), Ohio Edison
Company, an Ohio corporation (“OE”), Pennsylvania Power Company, a Pennsylvania
corporation (“Penn”), The Cleveland Electric Illuminating Company, an Ohio
corporation (“CEI”), The Toledo Edison Company, an Ohio corporation (“TE”),
Jersey Central Power & Light Company, a New Jersey corporation (“JCP&L”),
Metropolitan Edison Company, a Pennsylvania corporation (“Met-Ed”), and
Pennsylvania Electric Company, a Pennsylvania corporation (“Penelec”, and
together with FE, FES, ATSI, OE, Penn, CEI, TE, JCP&L and Met-Ed, the
“Borrowers”), Citibank, N.A., as Administrative Agent for the Lenders
thereunder, the fronting banks party thereto, the swing line lenders party
thereto and the Banks party thereto. Unless otherwise defined herein, terms
defined in the Credit Agreement are used herein as therein defined. This opinion
is being delivered pursuant to Section 3.01(a)(vii) of the Credit Agreement.
 
In that connection, we have examined (i) counterparts of the Credit Agreement,
executed by the Borrowers, the Banks, the Swing Line Lenders, the Administrative
Agent and the Fronting Banks, (ii) a form of the Notes and (iii) the other
documents furnished to the Administrative Agent pursuant to Section 3.01(a) of
the Credit Agreement, including (without limitation) the opinions of Gary D.
Benz, Esq., counsel to the Borrowers, and Akin Gump Strauss Hauer & Feld LLP,
special counsel to the Borrowers (such opinions referred to hereinafter,
collectively, as the “Borrowers’ Counsel Opinions”).
 

 

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In our examination of the documents referred to above, we have assumed the
authenticity of all such documents submitted to us as originals, the genuineness
of all signatures, the due authority of the parties executing such documents and
the conformity to the originals of all such documents submitted to us as copies.
We have also assumed that each of the Banks, the Swing Line Lenders, the
Fronting Banks and the Administrative Agent have duly executed and delivered,
with all necessary power and authority (corporate and otherwise), the Credit
Agreement. We have further assumed that you have evaluated, and are satisfied
with, the creditworthiness of the Borrowers and the business and financial terms
evidenced by the Loan Documents.
 
To the extent that our opinions expressed below involve conclusions as to
matters governed by law other than the law of the State of New York and the
Federal law of the United States, we have relied upon the Borrowers’ Counsel
Opinions and have assumed without independent investigation the correctness of
the matters set forth therein, our opinions expressed below being subject to the
assumptions, qualifications and limitations set forth in the Borrowers’ Counsel
Opinions. As to matters of fact, we have relied solely upon the documents we
have examined. We note that we do not represent the Borrowers, and accordingly,
are not privy to the nature or character of their business. Accordingly, we have
assumed that the Borrowers are subject only to statutes, rules, regulations,
judgments, orders and other requirements of law generally applicable to
corporations doing business in the State of New York.
 
Based upon the foregoing, and subject to the qualifications set forth below, we
are of the opinion that:
 
(i) The Credit Agreement is, and each of the Notes when executed and delivered
for value received will be, the legal, valid and binding obligation of each
Borrower enforceable against each Borrower in accordance with their respective
terms.
 
(ii) While we have not independently considered the matters covered by the
Borrowers’ Counsel Opinions to the extent necessary to enable us to express the
conclusions stated therein, each of the Borrowers’ Counsel Opinions and the
other documents furnished to the Administrative Agent pursuant to Section
3.01(a) of the Credit Agreement are substantially responsive to the
corresponding requirements set forth in Section 3.01(a) of the Credit Agreement
pursuant to which the same have been delivered.
 
Our opinions are subject to the following qualifications:
 
(a) Our opinion in paragraph (i) above is subject to the effect of any
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar law affecting creditors’ rights generally.
 

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(b) Our opinion in paragraph (i) above is subject to the effect of general
principles of equity, including (without limitation) concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether considered in
a proceeding in equity or at law).
 
(c) We note further that, in addition to the application of equitable principles
described above, courts have imposed an obligation on contracting parties to act
reasonably and in good faith in the exercise of their contractual rights and
remedies, and may also apply public policy considerations in limiting the right
of parties seeking to obtain indemnification under circumstances where the
conduct of such parties in the circumstances in question is determined to have
constituted negligence.
 
(d) We express no opinion herein as to (i) Section 8.06 of the Credit Agreement,
(ii) the enforceability of provisions purporting to grant to a party conclusive
rights of determination, (iii) the availability of specific performance or other
equitable remedies, (iv) the enforceability of rights to indemnity under Federal
or state securities laws and (v) the enforceability of waivers by parties of
their respective rights and remedies under law.
 
(e) Our opinion in paragraph (i) is limited to the law of the State of New York
and the Federal law of the United States, and we do not express any opinion
herein concerning any other law. Without limiting the generality of the
foregoing, we express no opinion as to the effect of the law of any jurisdiction
other than the State of New York wherein any Lender may be located or wherein
enforcement of the Credit Agreement or the Notes may be sought that limits the
rates of interest legally chargeable or collectible.
 
The foregoing opinion is solely for your benefit and may not be relied upon by
any other Person other than any Person that may become a Lender under the Credit
Agreement after the date hereof.
 

Very truly yours,

MEO:vjs

 
 
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