**EXECUTION
      COPY**




GUARANTY,
      dated as
      of April 3, 2006, made by FIRSTENERGY CORP., an Ohio corporation (the
“ ***Guarantor*** ”),
      in favor of the
      Bank s
      (as defined in the Reimbursement Agreement referred to below), Barclays Bank
      PLC, as Administrative Agent for the Banks (the ***“Administrative
      Agent”*** )
      and as fronting
      bank (the “ ***Fronting
      Bank*** ”),
      and KeyBank
      National Association ,
      as Syndication
      Agent (the “ ***Syndication
      Agent*** ”,
      and together with
      the Banks, the Administrative Agent, and the Fronting Bank, the “ ***Beneficiaries*** ”).




**PRELIMINARY
      STATEMENT**




FIRSTENERGY
      GENERATION CORP., an Ohio corporation (the “ ***Company*** ”)
      is party to
      a
      Letter of Credit and Reimbursement Agreement, dated as of April 3, 2006 (as
      amended, amended and restated, supplemented or otherwise modified from time
      to
      time, the “ ***Reimbursement
      Agreement*** ”;
      the capitalized
      terms defined therein and not otherwise defined herein being used herein as
      therein defined), with
      the
      Beneficiaries .
      The Guarantor will
      derive substantial direct and indirect benefits from the transactions
      contemplated by the Reimbursement Agreement. It is a condition precedent to
      the
      effectiveness of the Reimbursement Agreement that the Guarantor deliver this
      Guaranty.




NOW,
      THEREFORE, in
      consideration of the premises and in order to induce the Fronting Bank to issue
      the Letter of Credit for the account of the Company and to otherwise satisfy
      its
      obligations under the Reimbursement Agreement, the Guarantor hereby agrees
      as
      follows:




***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 Company now
      or
      hereafter existing under or in respect of the Credit Documents (including,
      without limitation, the Obligations and any extensions, modifications,
      substitutions, amendments or renewals of any or all of the 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 Company to pay principal, interest, letter of credit fees,
      charges, expenses, fees, attorneys’ fees and disbursements, indemnities and
      other amounts payable by the Company under any Credit Document, (ii) the
      obligation of the Company to reimburse any amount in respect of any drawing
      under the Letter of Credit issued for the account of the Company and (iii)
      any
      liability of the Company 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 Applicable Percentage
      of
      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 Credit Document. As used herein, “***Applicable
      Percentage***”
shall
      mean (i) 0%,
      from and after the third Business Day following delivery of a certificate of
      the
      chief financial officer, treasurer, assistant treasurer or controller of the
      Guarantor to the Administrative Agent certifying (and including reasonably
      detailed supporting calculations thereof) the existence of the conditions set
      forth in the following clauses (a) or (b) and so long as such conditions shall
      continue to exist: (a) the Company has Reference Ratings of BBB- or better
      by
      S&P and Baa3 or better by Moody’s and is in compliance with the financial
      covenant described in Section 5.03 of the Reimbursement Agreement and the
      Company shall have delivered to the Administrative Agent, with sufficient copies
      for the Banks, an annual report and related audited consolidated financial
      statements as of the last day of each of the two most recently completed fiscal
      years of the Company as set forth in Section 5.01(g)(ii) of the Reimbursement
      Agreement (provided that any such audited financial statements for the Company’s
      fiscal year 2005 shall be prepared on the same basis as shall be required of
      an
      issuer of public securities by the Securities and Exchange Commission or any
      national securities exchange) or (b) FES (x) has an Applicable Percentage (under
      and as such term is defined in the FES Guaranty Agreement) of 100% and the
      FES
      Guaranty Agreement shall have been effective for not less than 91 days, (y)
      has
      Reference Ratings of BBB- or better by S&P and Baa3 or better by Moody’s and
      (z) is in compliance with the financial covenant described in Section 7.3 of
      the
      FES Guaranty Agreement, and (ii) 100%, at all other times. 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
      the Company to any Beneficiary under or in respect of the Credit Documents
      but
      for the fact that they are unenforceable or not allowable due to the existence
      of a bankruptcy, reorganization or similar proceeding involving the Company.
      The
      Guarantor hereby agrees that this Guaranty is an absolute, irrevocable and
      unconditional guaranty of payment and is not a guaranty of
      collection.




CH1
      3470284v.2


2




(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 Reimbursement 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 Credit 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 Company under or in respect of the
      Credit 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 Company or whether the Company 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:




3




(a)  any
      lack of validity
      or enforceability of any Credit 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 the Company under or in
      respect of the Credit Documents, or any other amendment or waiver of or any
      consent to departure from any Credit Document, including, without limitation,
      any increase in the Guaranteed Obligations resulting from the extension of
      additional credit to the Company or any of its Subsidiaries or
      otherwise;




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




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




(e)  any
      change,
      restructuring or termination of the corporate structure or existence of the
      Company 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 Company 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 Company or otherwise, all
      as
      though such payment had not been made.




4


***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 Company or any
      other
      Person or any collateral.




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




(c)  The
      Guarantor hereby
      unconditionally and irrevocably waives (i) any defense arising by reason of
      any
      claim or defense based upon an election of remedies by any Beneficiary that
      in
      any manner impairs, reduces, releases or otherwise adversely affects the
      subrogation, reimbursement, exoneration, contribution or indemnification rights
      of the Guarantor or other rights of the Guarantor to proceed against the
      Company, 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 Company 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 Credit 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 Company 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
      Company, 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 Company, 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, the Letter of Credit issued for the account of the Company shall have
      expired or been terminated and the Commitments 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 Stated Expiration Date, and (c) the latest date
      of
      expiration or termination of the Letter of Credit issued for the account of
      the
      Company, 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 Credit 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 Stated Expiration Date shall have occurred and (iv) the
      Letter 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. 5




***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 Credit
      Document shall be made, in accordance with Section 2.16 of the Reimbursement
      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 Credit 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 Credit Document or from the execution, delivery or
      registration of, performance under, or otherwise with respect to, this Guaranty
      and the other Credit 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, the Fronting Bank 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, the Fronting Bank and the Guarantor in writing to that
      effect. Unless the Guarantor, the Fronting Bank 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, the 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 Beneficiary organized under the laws of a jurisdiction outside the
      United States.




6




(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 Booking
      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.***




As
      of (i) the date
      hereof, (ii) the Date of Issuance, (iii) the date of any Tender Advance, and
      (iv) the date of any amendment, modification or extension of the Letter of
      Credit, the Guarantor hereby makes each representation and warranty made in
      the
      Credit Documents by the Company with respect to the Guarantor and the Guarantor
      hereby further represents and warrants as follows:




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




(b)  Credit
      Analysis .
      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 Credit Document
      to which it is or is to be a party, and the Guarantor has established adequate
      means of obtaining from the Company 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 Company.




(c)  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 this
      Guaranty, and has all corporate powers and all material governmental licenses,
      authorizations, consents and approvals required to carry on its business as
      now
      conducted.




7




(b)  Corporate
      Authorization .
      The execution,
      delivery and performance by it of this Guaranty, 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 Debt 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 Guaranty, nor the consummation
      by it of the transactions contemplated hereby, nor compliance by it with the
      provisions hereof, 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 Guaranty. The Guarantor 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 the Guarantor and its Subsidiaries taken as a whole,
      or (ii) the legality, validity or enforceability of any of this Guaranty or
      the
      rights, remedies and benefits available to the parties thereunder or the ability
      of the Guarantor to perform its obligations under this Guaranty.




(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 Guaranty, other than such as have been duly obtained, given or
      accomplished.




(e)  Execution
      and
      Delivery .
      This Guaranty has
      been duly executed and delivered by it, and this Guaranty is 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.




8




(f)  Litigation .
      Except as
      disclosed in the Disclosure Documents, there is no pending or threatened action
      or proceeding (including, without limitation, any proceeding relating to or
      arising out of Environmental Laws) affecting it or any of its Subsidiaries
      before any court, governmental agency or arbitrator that has a reasonable
      possibility of having a material adverse effect on the business, condition
      (financial or otherwise), results of operations or prospects of it and its
      consolidated subsidiaries, taken as a whole, or on the ability of the Guarantor
      to perform its obligations under this Guaranty, 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 sheet of the Guarantor and its Subsidiaries as at December 31, 2005
      (the
“ ***Audited
      Financials Date*** ”),
      and the related
      consolidated statements of income, retained earnings and cash flows of the
      Guarantor and its Subsidiaries for the fiscal year then ended, certified by
      PricewaterhouseCoopers LLP, independent public accountants, copies of each
      of
      which have been furnished to each Bank, in all cases as amended and restated
      to
      the date hereof, present fairly the consolidated financial position of the
      Guarantor and its Subsidiaries as at such dates and the consolidated results
      of
      the operations of the Guarantor and its Subsidiaries for the periods ended
      on
      such dates, all in accordance with GAAP consistently applied. Except as
      disclosed in the Disclosure Documents, there has been no material adverse change
      in the business, condition (financial or otherwise), results of operations
      or
      prospects of the Guarantor and its Consolidated Subsidiaries, taken as a whole,
      since the Audited Financials Date.




(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 .
      The Guarantor 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 the Guarantor or such Subsidiary is
      contesting in good faith by appropriate legal proceedings.




9




(j)  Investment
      Company .
      The Guarantor 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.




(k)  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(s) of the Reimbursement Agreement) but for the
      requirement that notice be given or time elapse or both.




(l)  Solvency .
      (i) The fair
      saleable value of the Guarantor’s 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) the Guarantor’s assets do not constitute unreasonably small capital to
      carry out its business as now conducted or as proposed to be conducted; (iii)
      the Guarantor 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) the Guarantor 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). The Guarantor’s 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.




(m)  No
      Material
      Misstatements .
      The reports,
      financial statements and other written information furnished by or on behalf
      of
      the Guarantor to the Administrative Agent or any Bank pursuant to or in
      connection with the Guaranty and the transactions contemplated hereby 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.




***SECTION
      7. Covenants and Guarantor Defaults.***




7.1. Covenants .
      The Guarantor
      covenants and agrees that, so long as any part of the Guaranteed Obligations
      shall remain unpaid, the Letter of Credit issued for the account of the Company
      shall be outstanding or any Bank shall have any Commitment, 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 Credit Documents
      on
      its or their part to be performed or observed
      or that
      the Guarantor has agreed to cause the Company or such Subsidiaries to perform
      or
      observe.




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7.2  Affirmative
      Covenants .
      So long as a
      drawing is available under the Letter of Credit or any Bank shall have any
      Commitment under the Reimbursement Agreement or any Credit Party shall have
      any
      obligation to pay any amount to any Bank under any Credit Document or the
      Guarantor shall have any obligations hereunder, the Guarantor will, unless
      the
      Required Banks shall otherwise consent in writing:




(a)  Preservation
      of
      Corporate Existence, Etc .
      Without limiting
      the right of the Guarantor to merge with or into or consolidate with or into
      any
      other corporation or entity in accordance with the provisions of Section 7.4(c)
      hereof, (i) preserve and maintain its corporate existence in the state of its
      incorporation and qualify and remain qualified as a foreign corporation in
      each
      jurisdiction in which such qualification is reasonably necessary in view of
      its
      business and operations or the ownership of its properties and (ii) preserve,
      renew and keep in full force and effect the rights, privileges and franchises
      necessary or desirable in the normal conduct of its business.




(b)  Compliance
      with
      Laws, Etc .
      Comply, and cause
      each of its Subsidiaries to comply, in all material respects with all applicable
      laws, rules, regulations, and orders of any Governmental Authority, the
      noncompliance with which would materially and adversely affect the business
      or
      condition of the Guarantor and its Subsidiaries, taken as a whole, such
      compliance to include, without limitation, compliance with the USA Patriot
      Act
      (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), 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 the Guarantor operates and furnish
      to the Administrative Agent, within a reasonable time after written request
      therefor, such information as to the insurance carried as any Bank, through
      the
      Administrative Agent, may reasonably request.




(d)  Inspection
      Rights .
      At any reasonable
      time and from time to time as the Administrative Agent or any Bank may
      reasonably request, permit the Administrative Agent or such Bank or any agents
      or representatives thereof to examine and make copies of and abstracts from
      the
      records and books of account of, and visit the properties of, the Guarantor
      and
      any of its Subsidiaries, and to discuss the affairs, finances and accounts
      of
      the Guarantor and any of its Subsidiaries with any of their respective officers
      or directors; provided, however, that the Guarantor reserves the right to
      restrict access to any of its Subsidiaries’ generating facilities in accordance
      with reasonably adopted procedures relating to safety and security. The
      Administrative Agent and each Bank agree to use reasonable efforts to ensure
      that any information concerning the Guarantor or any of its Subsidiaries
      obtained by the Administrative Agent or
      such Bank
      pursuant to this subsection (d) or subsection (g) that is not contained in
      a
      report or other document filed with the Securities and Exchange Commission,
      distributed by the Guarantor to its security holders or otherwise generally
      available to the public, will, to the extent permitted by law and except as
      may
      be required by valid subpoena or in the normal course of the Administrative
      Agent’s or such Bank’s business operations be treated confidentially by the
      Administrative Agent or such Bank, as the case may be, and will not be
      distributed or otherwise made available by the Administrative Agent or such
      Bank, as the case may be, to any Person, other than the Administrative Agent’s
      or such Bank’s employees, authorized agents or representatives (including,
      without limitation, attorneys and accountants).




11




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




(f)  Maintenance
      of
      Properties .
      Maintain and
      preserve, and cause each of its Subsidiaries to maintain and preserve, all
      of
      its properties that are used or that are useful in the conduct of its business
      in good working order and condition, ordinary wear and tear excepted, it being
      understood that this covenant relates only to the good working order and
      condition of such properties and shall not be construed as a covenant of the
      Guarantor 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
      Bank, the following:




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




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




12


(iii)  concurrently
      with
      the delivery of the financial statements specified in clauses (i) and (ii)
      above
      a certificate of the chief financial officer, treasurer, assistant treasurer
      or
      controller of the Guarantor (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 Section
      5.01(g)(i) of the Reimbursement Agreement 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 Section 5.01(g)(i) of the Reimbursement
      Agreement 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 ratio
      contemplated by Section 7.3 hereof, as of the date of the most recent financial
      statements accompanying such certificate, to show the Guarantor’s compliance
      with or the status of the financial covenant contained in Section 7.3
      hereof;




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




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




(vi)  promptly
      and in any
      event within two Business Days after receipt thereof by the Guarantor or any
      member of the Controlled Group from the PBGC, copies of each notice received
      by
      the Guarantor 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;




(vii)  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;




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




(ix)  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




13




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




(h)  Guarantor
      Approvals .
      Maintain all
      approvals of all Governmental Authorities necessary connection with the
      execution, delivery or performance by it, or the consummation by it of the
      transactions contemplated by this Guaranty in full force and effect and comply
      with all terms and conditions thereof until all Obligations shall have been
      repaid or paid (as the case may be) and the Stated Expiration Date has
      occurred.




7.3. Financial
      Covenants of the Guarantor .




Unless
      the Required
      Banks shall otherwise consent in writing, so long as a drawing is available
      under the Letter of Credit or any Bank shall have any Commitment under the
      Reimbursement Agreement or any Credit Party shall have any obligation to pay
      any
      amount to any Bank hereunder or the Guarantor shall have any obligations
      hereunder:




(a)  Debt
      to
      Capitalization Ratio .
      The Guarantor 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 that the Guarantor shall
      be
      required to comply with this financial covenant only so long as the Guarantor’s
      Applicable Percentage shall be 100%.




7.4. Negative
      Covenants of the Guarantor .
      So long as a
      drawing is available under the Letter of Credit or any Bank shall have any
      Commitment under the Reimbursement Agreement or any Credit Party shall have
      any
      obligation to pay any amount to any Bank hereunder, the Guarantor will not,
      without the written consent of the Required Banks:




(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 the
      Guarantor, or permit any Significant Subsidiary to do so or (ii) permit the
      Guarantor 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 the Guarantor, as reported on the most recent consolidated
      balance sheet of the Guarantor, to any entity other than the Guarantor or any
      of
      its wholly owned direct or indirect Subsidiaries or, in the case of The Toledo
      Edison Company, to Centerior Funding Corporation; provided, however, that this
      provision shall not restrict the transfer of nuclear and fossil generation
      assets from Pennsylvania Power Company, Ohio Edison Company, The Cleveland
      Electric Illuminating Company and The Toledo Edison Company to the Company
      and
      FirstEnergy Generation Corp., respectively (the “ ***Generation
      Transfers*** ”).




14


(b) Liens,
          Etc. Create or suffer to exist, or permit any Significant Subsidiary 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), in each case to secure or provide
          for
          the payment of Debt, other than (i) liens consisting of (A) pledges or
          deposits
          in the ordinary course of business to secure obligations under worker’s
          compensation laws or similar legislation, (B) deposits in the ordinary
          course of
          business to secure, or in lieu of, surety, appeal, or customs bonds to
          which the
          Guarantor or Significant Subsidiary is a party, (C) pledges or deposits
          in the
          ordinary course of business to secure performance in connection with bids,
          tenders or contracts (other than contracts for the payment of money), or
          (D)
          materialmen’s, mechanics’, carriers’, workers’, repairmen’s or other like Liens
          incurred in the ordinary course of business for sums not yet due or currently
          being contested in good faith by appropriate proceedings diligently conducted,
          or deposits to obtain in the release of such Liens; (ii) purchase money
          liens or
          purchase money security interests upon or in any property acquired or held
          by
          the Guarantor 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; provided that such
          Liens
          were not created to secure the acquisition of such Person; (iv) Liens in
          existence on the date of this Guaranty; (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 Default and (B) no such
          Liens
          shall apply to assets acquired from the Guarantor 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 American Transmission Systems, Incorporated
          to secure Debt of American Transmission Systems, Incorporated, provided,
          however, that the aggregate principal amount of Debt 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
          Ohio Edison Company; (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 Debt secured
          by
          any Lien referred to in the foregoing clauses (i) through (ix); provided,
          however, that the principal amount of Debt secured thereby shall not exceed
          the
          principal amount of Debt 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 Debt that secured
          the
          Lien so extended, renewed or replaced (and any improvements on such
          property).




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




15


(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 the Guarantor to any
      Person that (in the opinion of the Required Banks) is material to the financial
      position or operations of the Guarantor or (ii) allow or suffer to exist any
      other event or condition known to the Guarantor that results in any liability
      of
      the Guarantor to the PBGC that (in the opinion of the Required Banks) is
      material to the financial position or operations of the Guarantor. For purposes
      of this subsection (d), “liability” shall not include termination insurance
      premiums payable under Section 4007 of ERISA.




7.5. Guarantor
      Defaults .
      The occurrence of
      any of the following events (whether voluntary or involuntary) shall be a
“ ***Guarantor
      Event of Default*** ”
      hereunder:




(a)  Representations
      and Warranties .
      Any representation
      or warranty made or deemed made by the Guarantor (or any of its officers) in
      any
      Credit Document or in connection with any Credit Document shall prove to have
      been incorrect or misleading in any material respect when made or deemed made;
      or




(b)  Covenant
      Performance .
      (i) the Guarantor
      shall fail to perform or observe any covenant set forth in clause (i) of Section
      7.2(a), or Section 7.3 or Section 7.4 hereof on its part to be performed or
      observed or (ii) the Guarantor shall fail to perform or observe any other term,
      covenant or agreement contained in Credit Document on its part to be performed
      or observed and such failure shall remain unremedied for 30 days after written
      notice thereof shall have been given to the Guarantor by the Administrative
      Agent or any Bank; or




(c)  Credit
      Documentation .
      Any material
      provision of any Credit Document to which the Guarantor is a party shall at
      any
      time and for any reason cease to be valid and binding upon the Guarantor, except
      pursuant to the terms thereof, or shall be declared to be null and void, or
      the
      validity or enforceability thereof shall be contested by the Guarantor or any
      Governmental Authority, or the Guarantor shall deny that it has any or further
      liability or obligation under any Credit Document to which it is a party;
      or




(d)  Cross-Default .
      The Guarantor or
      any Significant Subsidiary shall fail to pay any principal of or premium or
      interest on any Debt (other than Debt owed by the Guarantor hereunder) 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 Debt; or any other event shall occur or condition
      shall exist under any agreement or instrument relating to any such Debt 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 Debt; or
      any
      such Debt 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






16


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




(f)  Judgments .
      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
      the Guarantor or any Significant Subsidiary and either (i) valid enforcement
      proceedings shall have been commenced by any creditor upon such judgment or
      order or (ii) there shall be any period of 10 consecutive days during which
      a
      stay of enforcement of such judgment or order, by reason of a pending appeal
      or
      otherwise, shall not be in effect; or




(g)  Change
      of
      Control .
      (i) FirstEnergy
      shall fail to own directly or indirectly 100% of the issued and outstanding
      shares of common stock of each Significant Subsidiary, (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 FirstEnergy (or other securities convertible into such securities)
      representing 30% or more of the combined voting power of all securities of
      FirstEnergy 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 FirstEnergy unless the Persons replacing
      such individuals were nominated by the stockholders or the Board of Directors
      of
      FirstEnergy in accordance with FirstEnergy’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
      FirstEnergy (or other securities convertible into such securities) representing
      30% or more of the combined voting power of all securities of FirstEnergy
      entitled to vote in the election of directors.




***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 Administrative Agent, the Company, the Guarantors
      and
      the Required Banks, 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 Credit 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 Tender
      Advances or (z) the aggregate available amount of the Letter 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 Banks 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, the
      Fronting Bank, shall be effective unless agreed to in writing by the Fronting
      Bank; 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.




17




***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
      the Guarantor’s addresses specified in Section 9.02 of the Reimbursement
      Agreement, if to the Administrative Agent, any Bank or the Fronting Bank, at
      its
      address specified in Section 9.02 of the Reimbursement 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.




***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 the Fronting Bank under the Reimbursement
      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 Credit
      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.




18




***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 Company
      enforceable against the Company 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 Letter of Credit.





(c)  Without
      prejudice to
      the survival of any of the other agreements of the Guarantor under this Guaranty
      or any of the other Credit 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 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 Company
      (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 Default (including the commencement and continuation of any
      proceeding under any Bankruptcy Law relating to the Company), the Guarantor
      may
      receive regularly scheduled payments from the Company
      on account
      of the Subordinated Obligations. After the occurrence and during the continuance
      of any Default (including the commencement and continuation of any proceeding
      under any Bankruptcy Law relating to the Company), 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.




19




(b)  ***Prior
      Payment of Guaranteed Obligations.*** In any proceeding
      under any Bankruptcy Law relating to the Company, 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 Default (including the commencement
      and continuation of any proceeding under any Bankruptcy Law relating to the
      Company), the Guarantor shall, if the Administrative Agent so requests, collect,
      enforce and receive payments on account of the Subordinated Obligations as
      trustee for the Beneficiaries and deliver such payments to the Administrative
      Agent on account of the Guaranteed Obligations (including all Post Petition
      Interest), together with any necessary endorsements or other instruments of
      transfer, but without reducing or affecting in any manner the liability of
      the
      Guarantor under the other provisions of this Guaranty.




(d)  Administrative
      Agent
      Authorization. After the occurrence and during the continuance of any Default
      (including the commencement and continuation of any proceeding under any
      Bankruptcy Law relating to any other the Company), 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 Reimbursement
      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 Stated Expiration Date,
      (iii) the latest date of expiration or termination of the Letter of Credit
      issued for the account of the Company, (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 Reimbursement Agreement (including, without
      limitation, all or any portion of its Commitments and the Obligations owing
      to
      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 9.08 of the Reimbursement 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. 20




***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.




***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 Credit 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 Credit 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 CREDIT DOCUMENT, OR ANY OTHER INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER
      OR THEREUNDER.







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




FIRSTENERGY
      CORP.









By:_____________________________


Name:


Title: