Exhibit 10-2 Form of Letter of Credit and Reimbursement Agreement dated as
      of December 16, 2005


    
      
         

          
            

          

        

         
 

         

      

    

    


    


     

    LETTER
      OF
      CREDIT

     

    AND
      REIMBURSEMENT AGREEMENT

     

    Dated
      as of
      December 16, 2005

     

    among

     

    FIRSTENERGY
      NUCLEAR GENERATION CORP.,

     

    and

     

    THE
      PARTICIPATING BANKS

     

    LISTED
      ON
      THE SIGNATURE PAGES HERETO

     

    and

     

    BARCLAYS
      BANK PLC,

     

    acting
      through its New York Branch,

     

    as
      Fronting Bank
      and
      Administrative Agent 

     

    


     

    


     

    


     

    relating
      to

     

    $99,100,000

     

    State
      of
      Ohio

     

    Pollution
      Control Revenue Refunding Bonds, Series 2005-A

     

    (FirstEnergy
      Nuclear Generation Corp. Project)

     

    
       

        
          

        

      



    
 

    
      TABLE
        OF
        CONTENTS

      


      Page

      
        	
                PRELIMINARY
                  STATEMENTS

              	 	
                1

              


      

      


      ARTICLE
        I

      


      DEFINITIONS

      


      
        	
                SECTION
                  1.01.

              	
                Certain
                  Defined Terms

              	
                2

              
	
                SECTION
                  1.02.

              	
                Computation
                  of
                  Time Periods

              	
                13

              
	
                SECTION
                  1.03.

              	
                Accounting
                  Terms

              	
                13

              
	
                SECTION
                  1.04.

              	
                Internal
                  references

              	
                13

              


      

      


      ARTICLE
        II

      


      AMOUNT
        AND TERMS OF
        THE LETTER OF CREDIT

      


      
        	
                SECTION
                  2.01.

              	
                The
                  Letter of
                  Credit

              	
                13

              
	
                SECTION
                  2.02.

              	
                Issuing
                  the
                  Letter of Credit; Termination

              	
                13

              
	
                SECTION
                  2.03.

              	
                Commissions
                  and Fees

              	
                14

              
	
                SECTION
                  2.04.

              	
                Reimbursement
                  on Demand

              	
                14

              
	
                SECTION
                  2.05.

              	
                Tender
                  Advances; Interest Rates

              	
                15

              
	
                SECTION
                  2.06.

              	
                Prepayments

              	
                15

              
	
                SECTION
                  2.07.

              	
                Yield
                  Protection

              	
                15

              
	
                SECTION
                  2.08.

              	
                Changes
                  in
                  Capital Adequacy Regulations

              	
                16

              
	
                SECTION
                  2.09.

              	
                Payments
                  and
                  Computations

              	
                16

              
	
                SECTION
                  2.10.

              	
                Non-Business
                  Days

              	
                16

              
	
                SECTION
                  2.11.

              	
                Source
                  of
                  Funds

              	
                17

              
	
                SECTION
                  2.12.

              	
                Extension
                  of
                  the Stated Expiration Date

              	
                17

              
	
                SECTION
                  2.13.

              	
                Amendments
                  Upon Extension

              	
                17

              
	
                SECTION
                  2.14.

              	
                Evidence
                  of
                  Debt

              	
                17

              
	
                SECTION
                  2.15.

              	
                Obligations
                  Absolute

              	
                17

              
	
                SECTION
                  2.16.

              	
                Net
                  Taxes,
                  Etc.

              	
                18

              
	
                SECTION
                  2.17.

              	
                Participation
                  by Banks in Letter of Credit

              	
                19

              


      

      


      ARTICLE
        III

      


      CONDITIONS
        PRECEDENT

      


      
        	
                SECTION
                  3.01.

              	
                Conditions
                  Precedent to Issuance of the Letter of Credit

              	
                23

              
	
                SECTION
                  3.01.

              	
                Additional
                  Conditions Precedent to Issuance of the Letter of Credit and Amendment
                  of
                  the Letter of Credit

              	
                25

              
	
                SECTION
                  3.01.

              	
                Conditions
                  Precedent to Each Tender Advance

              	
                26

              


      

      



      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      


      ARTICLE
        IV

      


      REPRESENTATIONS
        AND
        WARRANTIES

      Page

      
        	
                SECTION
                  4.01.

              	
                Representations
                  and Warranties of the Company

              	
                27

              


      

      


      ARTICLE
        V

      


      COVENANTS
        OF THE
        COMPANY

      


      
        	
                SECTION
                  5.01.

              	
                Affirmative
                  Covenants

              	
                31

              
	
                SECTION
                  5.02.

              	
                Negative
                  Covenants

              	
                36

              


      

      


      ARTICLE
        VI

      


      EVENTS
        OF
        DEFAULT

      


      
        	
                SECTION
                  6.01.

              	
                Events
                  of
                  Default

              	
                41

              
	
                SECTION
                  6.02.

              	
                Upon
                  an Event
                  of Default

              	
                44

              


      

      


      ARTICLE
        VII

      


      [RESERVED]

      


      


      ARTICLE
        VIII

      


      
        	
                SECTION
                  8.01.

              	
                Appointment

              	
                45

              
	
                SECTION
                  8.02.

              	
                Delegation
                  of
                  Duties

              	
                45

              
	
                SECTION
                  8.03.

              	
                Exculpatory
                  Provisions

              	
                45

              
	
                SECTION
                  8.04.

              	
                Reliance
                  by
                  Administrative Agent

              	
                46

              
	
                SECTION
                  8.05.

              	
                Notice
                  of
                  Default

              	
                46

              
	
                SECTION
                  8.06.

              	
                Non-Reliance
                  on Administrative Agent and Other Banks

              	
                46

              
	
                SECTION
                  8.07.

              	
                Indemnification

              	
                47

              
	
                SECTION
                  8.08.

              	
                Administrative
                  Agent in Its Individual Capacity

              	
                47

              
	
                SECTION
                  8.09.

              	
                Successor
                  Administrative Agent

              	
                47

              
	
                SECTION
                  8.10.

              	
                Fronting
                  Bank

              	
                48

              
	
                SECTION
                  8.11.

              	
                Notices;
                  Actions Under Related Documents

              	
                48

              


      

      



      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      


      ARTICLE
        IX

      


      MISCELLANEOUS

      Page

      
        	
                SECTION
                  9.01.

              	
                Amendments,
                  Etc.

              	
                48

              
	
                SECTION
                  9.02.

              	
                Notices,
                  Etc.

              	
                49

              
	
                SECTION
                  9.03.

              	
                No
                  Waiver,
                  Remedies

              	
                49

              
	
                SECTION
                  9.04.

              	
                Set-off

              	
                49

              
	
                SECTION
                  9.05.

              	
                Indemnification

              	
                50

              
	
                SECTION
                  9.06.

              	
                Liability
                  of
                  the Banks

              	
                51

              
	
                SECTION
                  9.07.

              	
                Costs,
                  Expenses and Taxes

              	
                52

              
	
                SECTION
                  9.08.

              	
                Binding
                  Effect

              	
                52

              
	
                SECTION
                  9.09.

              	
                Assignments
                  and Participation

              	
                52

              
	
                SECTION
                  9.10.

              	
                Severability

              	
                55

              
	
                SECTION
                  9.11.

              	
                GOVERNING
                  LAW

              	
                55

              
	
                SECTION
                  9.12.

              	
                Headings

              	
                55

              
	
                SECTION
                  9.13.

              	
                Submission
                  to
                  Jurisdiction; Waivers

              	
                55

              
	
                SECTION
                  9.14.

              	
                Acknowledgments

              	
                56

              
	
                SECTION
                  9.15.

              	
                WAIVERS
                  OF JURY TRIAL

              	
                56

              
	
                SECTION
                  9.16.

              	
                Execution
                  in
                  Counterparts

              	
                56

              
	
                SECTION
                  9.17.

              	
                "Reimbursement
                  Agreement" for Purposes of Indenture

              	
                56

              
	
                SECTION
                  9.18.

              	
                USA
                  PATRIOT
                  Act

              	
                57

              


      

      


      


    

    



    
      
        
          iii

          


        

        
        

      

      
        3

        
          

        

      

      
        
        

        
           

        

      

    



    


    
      	
              SCHEDULES

            	 	 
	
               

              Schedule
                I

            	
               

              -

            	
               

              Commitments,
                Commitment Percentages and Applicable Booking
                Offices

            
	
               

              Schedule
                5.02(i)

            	
               

              -

            	
               

              Existing
                Investments and Guarantees

            
	
               

              EXHIBITS

            	 	 
	
               

              Exhibit
                A

            	
               

              -

            	
               

              Form
                of
                Letter of Credit

            
	
              Exhibit
                B

            	
              -

            	
              Form
                of
                Assignment and Acceptance

            
	
              Exhibit
                C

            	
              -

            	
              Form
                of
                Custodian Agreement

            
	
              Exhibit
                D

            	
              -

            	
              Form
                of
                Opinion of Gary D. Benz, Esq., Counsel to FirstEnergy and the
                Company

            
	
              Exhibit
                E

            	
              -

            	
              Form
                of
                Opinion of Akin Gump Strauss Hauer & Feld LLP, special New York
                counsel to FirstEnergy and the Company

            
	
              Exhibit
                F

            	
              -

            	
              Form
                of
                Opinions of Sidley Austin Brown & Wood LLP, special New York counsel
                to the Fronting Bank

            
	
              Exhibit
                G

            	
              -

            	
              Form
                of
                Opinion of Lovells, special English counsel to the Fronting
                Bank

            
	
              Exhibit
                H

            	
              -

            	
              Form
                of
                Guaranty Agreement

            


    

    


    



    
      
        
          iv

          


        

        
        

      

      
        4

        
          

        

      

      
        
        

        
          


        

      

    



     

    LETTER
      OF
      CREDIT AND

    REIMBURSEMENT
      AGREEMENT

     

    LETTER
      OF
      CREDIT AND REIMBURSEMENT AGREEMENT,
      dated as of
      December 16, 2005 among:

     

    
      	 	
              (i)

            	
              FIRSTENERGY
                NUCLEAR GENERATION CORP., an Ohio corporation (the “Company”);

            


    

     

    
      	 	
              (ii)

            	
              the
                participating banks listed on the signature pages hereto (the
                “Banks”);
                and

            


    

     

    
      	 	
              (iii)

            	
              BARCLAYS
                BANK
                PLC, a banking corporation organized under the laws of England and
                Wales,
                acting through its New York Branch (“Barclays”),
                as
                Fronting Bank and Administrative Agent (in such capacities, together
                with
                its successors and permitted assigns in such capacities, respectively,
                the
                “Fronting Bank”
and
                the
                “Administrative
                Agent”).

            


    

     

    PRELIMINARY
      STATEMENTS

     

    (1) The
      Ohio Water
      Development Authority (the “Issuer”)
      has caused to be
      issued, sold and delivered, pursuant to a Trust Indenture, dated as of December
      1, 2005 (as amended from time to time in accordance with the terms thereof
      and
      hereof, the “Indenture”),
      between the
      Issuer and J.P. Morgan Trust Company, National Association, as trustee (such
      entity, or its successor as trustee, being the “Trustee”),
      $99,100,000
      original aggregate principal amount of State of Ohio Pollution Control Revenue
      Refunding Bonds, Series 2005-A (FirstEnergy Nuclear Generation Corp. Project)
      (the “Bonds”)
      to various
      purchasers.

     

    (2) The
      Company has
      requested that the Fronting Bank issue and the Fronting Bank agrees to issue,
      on
      the terms and conditions set forth in this Agreement, its Irrevocable
      Transferable Letter of Credit No. SB00421, to be dated on or before December
      16,
      2005, in favor of the Trustee in the stated amount of $100,077,425, a form
      of
      which is attached hereto as Exhibit A (such letter of credit, as it may from
      time to time be extended or amended pursuant to the terms of this Agreement
      (as
      defined below), the “Letter
      of Credit”),
      of which (i)
      $99,100,000 shall support the payment of principal of the Bonds, and (ii)
      $977,425 shall support the payment of up to 36 days’ interest on the principal
      amount of the Bonds computed at a maximum rate of 10.0% per
      annum
(calculated
      on the
      basis of a year of 365 days for the actual days elapsed). 

     

    NOW,
      THEREFORE, in
      consideration of the premises and in order to induce the Fronting Bank to issue
      the Letter of Credit and the Banks to participate in the Letter of Credit and
      to
      make demand loans and Tender Advances (as defined below) as provided herein,
      the
      parties hereto agree as follows:

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    ARTICLE
      I

     

    DEFINITIONS

     

    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):

     

    “Acceleration
      Drawing” means
      a drawing
      under the Letter of Credit resulting from the presentation of a certificate
      in
      the form of Exhibit 1 to the Letter of Credit.

     

    “Administrative
      Agent”
has
      the meaning
      assigned to that term in the preamble hereto.

     

    “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 Letter
      of Credit and Reimbursement Agreement as it may be amended, supplemented or
      otherwise modified in accordance with the terms hereof at any time and from
      time
      to time.

     

    “Alternate
      Base Rate”
means,
      for any day,
      a rate of interest per
      annum
equal
      to the higher
      of (i) the Base Rate for such day and (ii) the sum of the Federal Funds Rate
      for
      such day plus
      0.50%
      per
      annum.

     

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

     

    “Applicable
      Margin for Alternate Base Rate”
means,
      on any
      date, the applicable rate per
      annum
      determined pursuant
      to the Pricing Grid.

     

    “Applicable
      Commitment Rate”
means,
      on any
      date, the applicable rate per
      annum
      determined pursuant
      to the Pricing Grid.

     

    “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 (including,
      without limitation, those pertaining to health, safety, the environment or
      otherwise).

     

    “Applicable
      LC Fee Rate” means,
      on any date,
      the applicable rate per
      annum
      determined pursuant
      to the Pricing Grid; provided that such rate shall be increased by 2.0%
per
      annum
      upon the occurrence
      and during the continuance of an Event of Default.

     

    “Available
      Amount”
in
      effect at any
      time means the maximum amount available to be drawn at such time under the
      Letter of Credit, the determination of such maximum amount to assume compliance
      with all conditions for drawing and no reduction for any amount drawn by the
      Trustee in order to make a regularly scheduled payment of interest on the Bonds
      (unless such amount is not reinstated under the Letter of Credit).

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “Bankruptcy
      Code”
means
      Title 11 of
      the United States Code, as now constituted or hereafter amended.

     

    “Banks”
has
      the meaning
      assigned to that term in the preamble hereto, and includes their respective
      successors and permitted assigns.

     

    “Barclays”
has
      the meaning
      assigned to that term in the preamble hereto.

     

    “Base
      Rate”
means
the
      rate of interest
      announced publicly by the Administrative Agent in New York, New York, from
      time
      to time, as its base rate.
      The Base Rate
      shall change concurrently with each change in such base rate.

     

    “Bonds”
has
      the meaning
      assigned to that term in the Preliminary Statements hereto.

     

    “Business
      Day”
means
      any day
      other than (i) a Saturday or Sunday or legal holiday or day on which banking
      institutions in the city or cities in which the “Designated Office” (as defined
      in the Indenture) of the Trustee, the Tender Agent or the Paying Agent or the
      office of the Fronting Bank which will honor draws upon the Letter of Credit,
      are located are authorized by law or executive order to close or (ii) a day
      on
      which the New York Stock Exchange, the Company or the Remarketing Agent is
      closed.

     

    “Cancellation
      Date”
has
      the meaning
      assigned to that term in the Letter of Credit.

     

    “Capital
      Adequacy Change”
means
      (i) any
      change after the date of this Agreement in the Risk-Based Capital Guidelines
      or
      (ii) any adoption of or change in any other law, governmental or
      quasi-governmental rule, regulation, policy, guideline, interpretation, or
      directive (whether or not having the force of law) after the date of this
      Agreement which affects the amount of capital required or expected to be
      maintained by the Fronting Bank or any Bank or any Applicable Booking Office
      or
      any corporation controlling the Fronting Bank or such Bank.

     

    “Capital
      Lease”
means
      any lease
      which is capitalized on the books of the lessee in accordance with GAAP,
      consistently applied. The term “Capital Lease” shall not include any operating
      leases that, under GAAP, are not so capitalized.

     

    “Cash
      and
      Cash Equivalents”
means
      (i) cash on
      hand; (ii) demand deposits maintained in the United States or any other country
      with any commercial bank, trust company, savings and loan association, savings
      bank or other financial institution; (iii) time deposits maintained in the
      United States or any other country with, or certificates of deposit having
      a
      maturity of one year or less issued by, any commercial bank, securities dealer,
      trust company, savings and loan association, savings bank or other financial
      institution; (iv) direct obligations of, or unconditionally guaranteed by,
      the
      United States or any agency thereof and having a maturity of one year or less;
      and (v) commercial paper having a maturity of one year or less.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    “Change
      in Control (Company)” means
      the occurrence
      of either of the following: (i) any entity, person (within the meaning of
      Section 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange
      Act”))
      or group (within
      the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), other than
      FES, which theretofore was beneficial owner (as defined in Rule 13d-3 under
      the
      Exchange Act) of less than 20% of the Company’s then outstanding common stock
      either (x) acquires shares of common stock of the Company in a transaction
      or
      series of transactions that results in such entity, person or group directly
      or
      indirectly owning beneficially 20% or more of the outstanding common stock
      of
      the Company, other than solely as a result of such entity, person or group
      having acquired beneficial ownership of 20% or more of the outstanding common
      stock of FirstEnergy, or (y) acquires, by proxy or otherwise, the right to
      vote
      for the election of directors, for any merger, combination or consolidation
      of
      the Company or any of its direct or indirect subsidiaries, or, for any other
      matter or question, more than 20% of the then outstanding voting securities
      of
      the Company; or (ii) at any time prior to the Cancellation Date when FirstEnergy
      is not the sole legal and beneficial owner, directly or indirectly, of the
      outstanding capital stock of the Company, the election or appointment of persons
      to the Company’s board of directors who were not directors of the Company on the
      date hereof, and whose election or appointment was not approved by a majority
      of
      those persons who were directors at the beginning of such period, where such
      newly elected or appointed directors constitute 20% or more of the directors
      of
      the board of directors of the Company.

     

    “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
      Bank, the obligation of such Bank to make Tender Advances and participate in
      the
      Letter of Credit in an aggregate principal amount and/or face amount at any
      one
      time outstanding not to exceed the amount set forth opposite such Bank’s name on
      Schedule I hereto (as such amount may be amended in connection with an
      assignment pursuant to Section 9.09). “Commitments”
means
      the total of
      the Banks’ Commitments hereunder.

     

    “Commitment
      Percentage”
means,
      as to any
      Bank, the percentage of the aggregate Commitments constituted by such Bank’s
      Commitment.

     

    “Company”
has
      the meaning
      assigned to that term in the preamble hereto.

     

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

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    “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 FirstEnergy and
      its
      Subsidiaries, are treated as a single employer under Section 414(b) or 414(c)
      of
      the Code.

     

    “Conversion
      Date”
means
      the
      effective date for conversion to an Interest Rate Mode for an Interest Period
      ending on the maturity date of the Bonds as such date is specified in the
      certificate of the Trustee in the form of Exhibit 6 to the Letter of Credit.
      

     

    “Credit
      Documents”
means
      this
      Agreement, the Guaranty Agreements and any and all other instruments and
      documents (including, without limitation, any fee letter) executed and delivered
      in connection with any of the foregoing.

     

    “Credit
      Party”
means
      each of the
      Company, FirstEnergy and FES.

     

    “Custodian”
means
      J.P. Morgan
      Trust Company, National Association, in its capacity as Custodian under the
      Custodian Agreement, together with its successors and assigns in such
      capacity.

     

    “Custodian
      Agreement”
means
      the
      Custodian and Pledge Agreement of even date herewith among the Company, the
      Fronting Bank and the Custodian, substantially in the form of Exhibit C attached
      hereto.

     

    “Date
      of
      Issuance”
means
      the date of
      issuance of the Letter of Credit.

     

    “Debt”
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 Debt of others secured by a Lien on any asset of such Person, whether
      or not such Debt 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.

     

    “Debt
      to
      Capitalization Ratio”
means
      the ratio of
      Consolidated Debt of the applicable Credit Party to Total Capitalization of
      such
      Credit Party.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    “Default” means
      any event or
      condition that would constitute an Event of Default but for the requirement
      that
      notice be given or time elapse or both.

     

    “Default
      Rate” means
      a fluctuating
      interest rate equal to (i) in the case of any amount of overdue principal
      with respect to any Tender Advance, 2% per
      annum
      above the interest
      rate required to be paid on such Tender Advance immediately prior to the date
      on
      which the Default Rate becomes effective with respect thereto, and (ii) in
      all other cases, 2% per
      annum
above
      the Alternate
      Base Rate in effect from time to time.

     

    “Disclosure
      Documents” means
      FirstEnergy’s
      Annual Report on Form 10-K filed with the Securities and Exchange Commission
      for
      the year ended December 31, 2004, as amended, FirstEnergy’s Quarterly Reports on
      Form 10-Q filed with the Securities and Exchange Commission for the quarters
      ending March 31, 2005, June 30, 2005 and September 30, 2005, and FirstEnergy’s
      Current Reports on Form 8-K filed with the Securities and Exchange Commission
      on
      or before December 15, 2005.

     

    “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, as amended from time to
      time.

     

    “Event
      of
      Default” has
      the meaning
      assigned to that term in Section 6.01.

     

    “Federal
      Funds Rate” means,
      for any day,
      an interest rate per
      annum
equal
      to the
      weighted average of the rates on overnight Federal funds transactions with
      members of the Federal Reserve system arranged by Federal funds brokers on
      such
      day, as published for such day (or, if such day is not a Business Day, for
      the
      immediately preceding Business Day) by the Federal Reserve Bank of New York,
      or,
      if such rate is not so published for any day which is a Business Day, the
      average of the quotations at approximately 10:00 a.m. (New York City time)
      on
      such day on such transactions received by the Administrative Agent from three
      Federal funds brokers of recognized standing selected by the Administrative
      Agent in its sole discretion.

     

    “FES”
means
      FirstEnergy
      Solutions Corp., an Ohio corporation and a wholly-owned Subsidiary of
      FirstEnergy.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    “FES
      Guaranty Agreement”
means
      that certain
      Guaranty by FES, in substantially the form of Exhibit H hereto, as the same
      may
      be amended, restated, supplemented or otherwise modified from time to time;
      provided that the effectiveness of the FES Guaranty Agreement shall be
      conditioned upon the Administrative Agent’s receipt of (i) a certificate signed
      by a duly authorized officer of FES confirming that the conditions set forth
      in
      Section 3.02 shall be true and correct as of the effective date of the FES
      Guaranty Agreement and (ii) documents, certificates and opinion letters
      consistent with those delivered on the date of this Agreement with respect
      to
      FirstEnergy as to the corporate power and authority of FES to execute, deliver
      and perform its obligations under the FES Guaranty Agreement.

     

    “FirstEnergy”
means
      FirstEnergy
      Corp., an Ohio corporation and the holder, directly or indirectly, of all of
      the
      common shares of FES and the Company on the date hereof, or any successor
      thereto.

     

    “FirstEnergy
      Guaranty Agreement”
means
      that certain
      Guaranty, dated as of December 16, 2005, by FirstEnergy, in substantially the
      form of Exhibit H hereto, as the same may be amended, restated, supplemented
      or
      otherwise modified from time to time.

     

    “First
      Mortgage Bonds”
means
      first
      mortgage bonds at any time issued by the Company pursuant to a First Mortgage
      Bond Indenture.

     

    “First
      Mortgage Bond 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, as
      amended and supplemented by various supplemental indentures, and as the same
      may
      be further amended, modified or supplemented after the date hereof in accordance
      with the terms hereof.

     

    “Fixed
      Assets”
means,
      with
      respect to any Person, at any time, total net plant, including construction
      work
      in progress, as reported by such Person on its most recent consolidated balance
      sheet.

     

    “Fronting
      Bank”
has
      the meaning
      assigned to that term in the preamble hereto.

     

    “GAAP”
means
      generally
      accepted accounting principles of the Accounting Principles Board of the
      American Institute of Certified Public Accountants and the Financial Accounting
      Standards Board that are applicable from time to time.

     

    “Governmental
      Action”
means
      all
      authorizations, consents, approvals, waivers, exceptions, variances, orders,
      licenses, exemptions, publications, filings, notices to and declarations of
      or
      with any Governmental Authority, other than routine reporting requirements
      the
      failure to comply with which will not affect the validity or enforceability
      of
      any Credit Document or any Related Documents or have a material adverse effect
      on the transactions contemplated by any Credit Document or any Related
      Document.

     

    “Governmental
      Authority” means
      any nation or
      government, any state or other political subdivision thereof and any entity
      exercising executive, legislative, judicial, regulatory or administrative
      functions of or pertaining to government.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    “Guarantee”
of
      or by any
      Person (the “guarantor”)
      means any
      obligation, contingent or otherwise, of the guarantor guaranteeing or having
      the
      economic effect of guaranteeing any Debt or other monetary obligation of any
      other Person (the “primary
      obligor”)
      in any manner,
      whether directly or indirectly, and including in any event any obligation of
      the
      guarantor, direct or indirect, (i) to purchase or pay (or advance or supply
      funds for the purchase or payment of) such Debt or other obligation or to
      purchase (or to advance or supply funds for the purchase of) any security for
      the payment thereof, (ii) to purchase or lease property, securities or services
      for the purpose of assuring the owner of such Debt or other obligation of the
      payment thereof, (iii) to maintain working capital, equity capital or any other
      financial statement condition or liquidity of the primary obligor as to enable
      the primary obligor to pay such Debt or other obligation or (iv) as an account
      party in respect of any letter of credit or letter of guaranty issued to support
      such Debt or obligation, provided
      that the term
“Guarantee”
shall
      not include
      endorsements for collection or deposit in the ordinary course of business.
      The
      term “Guaranteed”
has
      a meaning
      correlative thereto.

     

    “Guarantor”
means
      each of
      FirstEnergy and, from and after the effective date of the FES Guaranty
      Agreement, FES.

     

    “Guaranty
      Agreements”
means
      each of the
      FirstEnergy Guaranty Agreement and the FES Guaranty Agreement, as the same
      may
      be amended, restated, supplemented or otherwise modified from time to
      time.

     

    “Indenture” has
      the meaning
      assigned to that term in the Preliminary Statements hereto.

     

    “Interest
      Period” has
      the meaning
      assigned to that term in the Indenture.

     

    “Interest
      Rate Mode”
has
      the meaning
      assigned to that term in the Indenture.

     

    “Issuer” has
      the meaning
      assigned to that term in the Preliminary Statements hereto.

     

    “Letter
      of Credit” has
      the meaning
      assigned to that term in the Preliminary Statements hereto.

     

    “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 and the other Credit Documents, 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
      Agreement”
has
      the meaning
      assigned to the term “Agreement”
in
      the
      Indenture.

     

    “Material
      Adverse Effect” means
      a material
      adverse effect on (a) the business, operations, property, condition (financial
      or otherwise) or prospects of any Guarantor and its Subsidiaries taken as a
      whole or the Company and its Subsidiaries taken as a whole, (b) the ability
      of
      any Credit Party to perform its obligations under any Credit Document or any
      Related Document or (c) the validity or enforceability of any Credit Document
      for any Related Document or the rights or remedies of the Administrative Agent,
      the Fronting Bank or the Banks hereunder or thereunder.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    “Notes” means
      any bonds,
      notes or similar instruments (unsecured other than by First Mortgage Bonds)
      issued by the Company in exchange for cash in any publicly-registered offering,
      private placement, or other offering exempt from registration under Federal
      and
      state securities laws, but
      excluding
any
      notes issued by
      the Company in connection with any revolving credit facility, term loan
      facility, letter of credit reimbursement agreement or other bank credit facility
      of the Company.

     

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

     

    (i) recourse
      to the
      named obligor with respect to such Debt (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
      Debt 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 Debt, 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.

     

     “Obligations” means
      the Tender
      Advances, fees relating to the Letter of Credit, any and all obligations of
      the
      Company to reimburse the Banks for any drawings under the Letter of Credit,
      all
      accrued and unpaid commitment fees and all other obligations of the Credit
      Parties to the Banks arising under or in relation to this Agreement and the
      Letter of Credit or any other Credit Document.

     

    “Official
      Statement” means
      the Official
      Statement, dated December [__],
      2005 relating to
      the Bonds, together with any supplements or amendments thereto and all documents
      incorporated therein (or in any such supplements or amendments) by
      reference.

     

    “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.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      “Paying
        Agent” has
        the meaning
        assigned to that term in the Indenture.

    

     

    “PBGC”
means
      the Pension
      Benefit Guaranty Corporation or any successor thereto.

     

    “Permitted
      Investments”
means
      (i) direct
      obligations of, or obligations the principal of and interest on which are
      unconditionally guaranteed by, the United States of America (or by any agency
      thereof to the extent that such obligations are backed by the full faith and
      credit of the United States of America), in each case maturing within one year
      from the date of acquisition thereof, (ii) investments in commercial paper
      maturing within one year from the date of acquisition thereof and having, at
      such date of acquisition, the highest credit rating obtainable from S&P or
      Moody’s, (iii) investments in certificates of deposit, banker’s acceptances and
      time deposits maturing within one year from the date of acquisition thereof
      issued or guaranteed by or placed with, and money market deposit accounts issued
      or offered by, any domestic office of any commercial bank organized under the
      laws of the United States of America or any State thereof that has combined
      capital and surplus and undivided profits of not less than $500,000,000, and
      (iv) fully collateralized repurchase agreements with a term of not more than
      30
      days for securities described in clause (i) of this definition and entered
      into
      with a financial institution satisfying the criteria described in clause (iii)
      of this definition.

     

    “Permitted
      Liens” has
      the meaning
      assigned to that term in Section 5.02(a).

     

    “Person”
means
      an
      individual, partnership, corporation (including, without limitation, a business
      trust), joint stock company, limited liability 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. 

     

    “Pledged
      Bonds”
means
      the Bonds
      purchased with moneys received under the Letter of Credit in connection with
      a
      Tender Drawing and owned or held by the Company or an affiliate of the Company
      or by the Trustee and pledged to the Fronting Bank on behalf of the Banks
      pursuant to the Custodian Agreement.

     

    “Pricing
      Grid”
means
      the pricing
      grid attached hereto as Annex 1.

     

    “PUCO”
means
      The Public
      Utilities Commission of Ohio or any successor thereto.

     

    “Purchase
      Agreement”
means
      the Bond
      Purchase Agreement dated December 15, 2005, between the Issuer and the
“Underwriters” identified therein.

     

    “Reference
      Rating”
has
      the meaning
      assigned to that term on Annex 1 hereto.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    “Related
      Documents”
means
      the Bonds,
      the Indenture, the Loan Agreement, the Remarketing Agreement and the Custodian
      Agreement.

     

    “Remarketing
      Agent”
has
      the meaning
      assigned to that term in the Indenture.

     

    “Remarketing
      Agreement”
means
      any
      agreement or other arrangement pursuant to which a Remarketing Agent has agreed
      to act as such pursuant to the Indenture.

     

    “Required
      Banks”
means
      Banks whose
      aggregate Commitment Percentages are greater than 50% at such time.

     

    “Restricted
      Payment”
means
      any dividend
      or other distribution by the Company or any of its Subsidiaries (whether in
      cash, securities or other property) with respect to any ownership interest
      or
      shares of any class of equity securities of the Company or any such Subsidiary,
      or any payment (whether in cash, securities or other property), including,
      without limitation, any sinking fund or similar deposit, on account of the
      purchase, redemption, retirement, acquisition, cancellation or termination
      of
      any such interest or shares or any option, warrant or other right to acquire
      any
      such interest or shares.

     

    “Risk-Based
      Capital Guidelines”
means
      (i) the
      risk-based capital guidelines in effect in the United States on the date of
      this
      Agreement, including transition rules, and (ii) the corresponding capital
      regulations promulgated by regulatory authorities outside the United States
      implementing the July 1988 report of the Basle Committee on Banking Regulation
      and Supervisory Practices Entitled “International Convergence of Capital
      Measurements and Capital Standards,” including transition rules, and any
      amendments to such regulations adopted prior to the date of this
      Agreement.

     

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

     

    “Significant
      Subsidiaries”
means
      (i) the
      Company, (ii) each regulated energy Subsidiary of FirstEnergy, including, but
      not limited to, 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, and any successor to any of them, (iii) FES and American Transmission
      Systems, Incorporated, and (iv) each other Subsidiary of FirstEnergy the annual
      revenues of which exceed $100,000,000 or the total assets of which exceed
      $50,000,000.

     

    “Stated
      Expiration Date”
has
      the meaning
      assigned to that term in the 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.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    “Subsidiary”
means,
      with
      respect to any Person, any corporation or unincorporated entity of which more
      than 50% of the outstanding capital stock (or comparable interest) having
      ordinary voting power (irrespective of whether at the time capital stock (or
      comparable interest) of any other class or classes of such corporation or entity
      shall or might have voting power upon the occurrence of any contingency) is
      at
      the time directly or indirectly owned by said Person (whether directly or
      through one of more other Subsidiaries). In the case of an unincorporated
      entity, a Person shall be deemed to have more than 50% of interests having
      ordinary voting power only if such Person’s vote in respect of such interests
      comprises more than 50% of the total voting power of all such interests in
      the
      unincorporated entity.

     

    “Tender
      Advance”
has
      the meaning
      assigned to that term in Section 2.05(a).

     

    “Tender
      Agent”
has
      the meaning
      assigned to that term in the Indenture.

     

    “Tender
      Drawing” means
      a drawing
      under the Letter of Credit resulting from the presentation of a certificate
      in
      the form of Exhibit 2 to the Letter of Credit.

     

    “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 which might constitute grounds under Section 4042 of ERISA for the
      termination of, or the appointment of a trustee to administer, any
      Plan.

     

    “Total
      Capitalization”
means,
      with
      respect to the applicable Credit Party at any date of determination the sum,
      without duplication, of (i) Consolidated Debt of such Credit Party, (ii)
      consolidated equity of the common stockholders of such Credit Party and its
      Consolidated Subsidiaries, (iii) consolidated equity of the preference
      stockholders of such Credit Party and its Consolidated Subsidiaries, and (iv)
      the aggregate principal amount of Trust Preferred Securities of such Credit
      Party and its Consolidated Subsidiaries.

     

    “Transition
      Plan Order”
means
      the Opinion
      and Order of The Public Utilities Commission of Ohio in Case Nos. 99 1212 EL
      ETP, 99 1213 EL ATA and 99 1214 EL AAM, entered July 19, 2000, as amended and
      supplemented by the Opinion and Order in Case No. 03-2144-EL-ATA, entered June
      9, 2004.

     

    “Trustee”
has
      the meaning
      assigned to
      that term in the
      Preliminary Statements hereto.

     

    “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
      FirstEnergy or any of its Consolidated Subsidiaries, (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 Stated
      Expiration Date.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    “Underwriters”
means
      the
“Underwriters” identified in the Purchase Agreement.

     

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

     

    SECTION
      1.02. Computation of Time Periods. In
      this Agreement,
      in the computation of a period of time from a specified date to a later
      specified date, the word “from” means “from and including” and the words “to”
and “until” each means “to but excluding”.

     

    SECTION
      1.03. Accounting Terms. All
      accounting terms
      not specifically defined herein shall be construed in accordance with GAAP,
      except as otherwise stated herein.

     

    SECTION
      1.04. Internal References. The
      words “herein”,
“hereof’ and “hereunder” and words of similar import, when used in this
      Agreement, shall refer to this Agreement as a whole and not to any provision
      of
      this Agreement, and “Article”, “Section”, “subsection”, “paragraph”, “Exhibit”,
“Schedule” and respective references are to this Agreement unless otherwise
      specified. References herein or in any Related Document to any agreement or
      other document shall, unless otherwise specified herein or therein, be deemed
      to
      be references to such agreement or document as it may be amended, modified
      or
      supplemented after the date hereof from time to time in accordance with the
      terms hereof or of such Related Document, as the case may be.

     

    ARTICLE
      II

     

    AMOUNT
      AND
      TERMS OF THE LETTER OF CREDIT

     

    SECTION
      2.01. The Letter of Credit. The
      Fronting Bank
      agrees, on the terms and conditions hereinafter set forth (including, without
      limitation, the satisfaction of the conditions set forth in Sections 3.01 and
      3.02), to issue the Letter of Credit to the Trustee at or before 5:00 P.M.
      (New
      York City time) on December 16, 2005.

     

    SECTION
      2.02. Issuing the Letter of Credit; Termination. (a)
      The Letter of
      Credit shall be issued on at least one Business Day’s notice from the Company to
      the Fronting Bank specifying the Date of Issuance, which shall be a Business
      Day. On the Date of Issuance, upon fulfillment of the applicable conditions
      set
      forth in Article III, the Fronting Bank will issue the Letter of Credit to
      the
      Trustee and shall promptly notify the Banks thereof and provide them with a
      copy
      of the Letter of Credit. 

     

    (b) Any
      outstanding
      Tender Advances and all other unpaid Obligations shall be paid in full by the
      Company on the Cancellation Date. Notwithstanding the termination of this
      Agreement on the Cancellation Date, until all of the Obligations (other than
      contingent indemnity obligations) shall have been fully paid and satisfied
      and
      all financing arrangements among the Company and the Banks hereunder shall
      have
      been terminated, all of the rights and remedies under this Agreement shall
      survive.

    
       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

    

    (c) Provided
      that the
      Company shall have delivered notice thereof to the Administrative Agent not
      less
      than three Business Days prior to any proposed termination, the Company may
      terminate this Agreement (other than those provisions which expressly survive
      termination hereof) upon (i) payment in full of all outstanding Tender Advances,
      together with accrued and unpaid interest thereon and on the Letter of Credit,
      (ii) the cancellation and return of the Letter of Credit, (iii) the payment
      in
      full of all accrued and unpaid fees, and (iv) the payment in full of all
      reimbursable expenses and other Obligations together with accrued and unpaid
      interest thereon.

     

    SECTION
      2.03. Commissions and Fees. (a)
      The Company
      hereby agrees to pay to the Administrative Agent, for the ratable account of
      the
      Banks, a commitment fee (the “Commitment
      Fee”)
      on the
      Commitments in effect from time to time (notwithstanding that the Date of
      Issuance has not occurred or that the applicable conditions set forth in Article
      III have not been satisfied) from the date hereof until the Date of Issuance,
      at
      a rate per
      annum
      equal to the
      Applicable Commitment Rate. The Commitment Fee shall be payable quarterly in
      arrears on the last day of each March, June, September and December, commencing
      on December 31, 2005, and on the Date of Issuance.

     

    (b) The
      Company hereby
      agrees to pay to the Administrative Agent, for the ratable account of the Banks,
      a letter of credit fee (the “Letter
      of Credit Fee”) on
      the Available
      Amount in effect from time to time from the Date of Issuance until the
      Cancellation Date, at a rate per
      annum
      equal to the
      Applicable LC Fee Rate. The Letter of Credit Fee shall be payable quarterly
      in
      arrears on the last day of each March, June, September and December, commencing
      on December 31, 2005, and on the Cancellation Date.

     

    (c) The
      Company hereby
      agrees to pay to the Administrative Agent and the Fronting Bank such further
      fees as are specified in the letter agreement, dated the date hereof, among
      the
      Company, the Administrative Agent and the Fronting Bank.

     

    SECTION
      2.04. Reimbursement On Demand.
      Except as otherwise
      specified in Section 2.05 (and provided that the conditions precedent specified
      therein have been fulfilled), each amount paid by the Fronting Bank under the
      Letter of Credit (including, without limitation, amounts in respect of any
      reinstatement of interest on the Bonds at the election of the Banks
      notwithstanding any failure by the Company to reimburse the Banks for any
      previous drawing to pay interest on the Bonds) shall constitute a demand loan
      made by the Banks to the Company on the date of such payment by the Fronting
      Bank under the Letter of Credit. The Company agrees to pay or cause to have
      paid
      to the Administrative Agent, for the account of the Banks, after the honoring
      by
      the Fronting Bank of any drawing under the Letter of Credit giving rise to
      such
      demand loan, each such demand loan no later than 5:00 P.M. (New York City time)
      on the date of its making. Any such demand loan (or any portion thereof) not
      so
      paid on such date shall bear interest, payable on demand, from the date of
      making of such demand loan until payment in full, at a fluctuating interest
      rate
per annum
      equal to the
      Default Rate.

     

    
      
        
        

      

      
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    SECTION
      2.05. Tender Advances; Interest Rates.
      (a) If the Fronting
      Bank shall make any payment under the Letter of Credit in response to a Tender
      Drawing and, on the date of such payment, the conditions precedent set forth
      in
      Section 3.03 shall have been fulfilled, that portion of such payment equal
      to
      the principal amount of the Bonds purchased with the proceeds of such Tender
      Drawing shall be deemed to constitute an advance made by the Banks to the
      Company on the date and in the amount of such principal amount (each such
      advance being a “Tender
      Advance”).
      Each Tender
      Advance shall bear interest as provided in Section 2.05(b), and the principal
      amount thereof and all interest thereon shall be due and payable on the earliest
      to occur of (i) the date that occurs 30 days after the date of such Tender
      Advance, (ii) the Cancellation Date, (iii) the date on which the Pledged Bonds
      are redeemed or cancelled pursuant to the Indenture, (iv) the date on which
      any
      Pledged Bonds are remarketed pursuant to the Indenture and (v) the date on
      which
      the Letter of Credit is replaced by a substitute letter of credit in accordance
      with the terms of the Indenture. To the extent that the Administrative Agent
      receives interest payable on account of any Pledged Bonds such interest received
      shall be applied and credited against accrued and unpaid interest on the Tender
      Advances that financed the Tender Drawing in respect of which such Pledged
      Bonds
      were purchased.

     

    (b) The
      Company shall
      pay interest on the unpaid principal amount of each Tender Advance, from the
      date of such Tender Advance until the date such Tender Advance is due and
      payable, at a fluctuating interest rate per
      annum
      equal to the sum of
      (i) the Alternate Base Rate in effect from time to time plus
      (ii) the then
      Applicable Margin for Alternate Base Rate, payable on any date on which such
      Tender Advance is repaid, whether by acceleration or otherwise, and on the
      date
      such Tender Advance is due and payable as herein provided.

     

    (c) Notwithstanding
      any
      provision to the contrary herein, the Company shall pay interest on all past-due
      amounts of principal and (to the fullest extent permitted by law) interest,
      costs, fees and expenses hereunder or under any other Credit Document, from
      the
      date when such amounts became due until paid in full, payable on demand, at
      the
      Default Rate in effect from time to time.

     

    SECTION
      2.06. Prepayments. (a) The
      Company
      may, upon at least one Business Day’s notice to the Administrative Agent, prepay
      without premium or penalty the outstanding amount of any Tender Advance in
      whole
      or in part with accrued interest to the date of such prepayment on the amount
      prepaid. 

     

    (b) Prior
      to or
      simultaneously with the receipt of proceeds related to the remarketing of Bonds
      purchased pursuant to one or more Tender Drawings, the Company shall directly,
      or through the Remarketing Agent, the Tender Agent or the Paying Agent on behalf
      of the Company, repay or prepay (as the case may be) the then-outstanding demand
      loans and Tender Advances (in the order in which they were made) by
      paying to
      the
      Administrative Agent for the pro
      rata
      share of the Banks
      an amount equal to the sum of (i) the aggregate principal amount of the
      Bonds remarketed plus
      (ii) all
      accrued interest on the principal amount of demand loans and/or Tender Advances
      so repaid or prepaid.

     

    SECTION
      2.07. Yield Protection.
      If any law or any
      governmental or quasi-governmental rule, regulation, policy, guideline or
      directive (whether or not having the force of law), or any interruption thereof,
      or the compliance of the Fronting Bank or any Bank therewith,

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (i) imposes
      or increases
      or deems applicable any reserve, assessment, insurance charge, special deposit
      or similar requirement against letters of credit issued by, or assets held
      by,
      deposits in or for the account of, or credit extended by, the Fronting Bank
      or
      such Bank or any Applicable Booking Office, or

     

    (ii) imposes
      any other
      condition the result of which is to increase the cost to the Fronting Bank
      or
      such Bank or any Applicable Booking Office of issuing or participating in the
      Letter of Credit or making, funding or maintaining loans or reduces any amount
      receivable by the Fronting Bank or such Bank or any Applicable Booking Office
      in
      connection with letters of credit or loans, or requires the Fronting Bank or
      such Bank or any Applicable Booking Office to make any payment calculated by
      reference to the amount of letters of credit or loans held or interest received
      by it, by an amount deemed material by the Fronting Bank or such Bank or any
      Applicable Booking Office,

     

    then,
      upon demand by
      the Fronting Bank or such Bank, the Company shall pay the Fronting Bank or
      such
      Bank that portion of such increased expense incurred or reduction in an amount
      received which the Fronting Bank or such Bank determines is attributable to
      issuing or participating in the Letter of Credit or making, funding and
      maintaining any demand loan hereunder, Tender Advance or its
      Commitment.

     

    SECTION
      2.08. Changes in Capital Adequacy Regulations. If
      the Fronting Bank
      or any Bank determines the amount of capital required or expected to be
      maintained by the Fronting Bank or such Bank, any Applicable Booking Office
      of
      the Fronting Bank or such Bank or any corporation controlling the Fronting
      Bank
      or such Bank is increased as a result of a Capital Adequacy Change, then, upon
      demand by the Fronting Bank or such Bank, the Company shall pay the Fronting
      Bank or such Bank the amount necessary to compensate for any shortfall in the
      rate of return on the portion of such increased capital which the Fronting
      Bank
      or such Bank determines is attributable to this Agreement, the Letter of Credit,
      its Commitment, any demand loan hereunder, or any Tender Advance (or any
      participations therein or in the Letter of Credit) (after taking into account
      the Fronting Bank’s or such Bank’s policies as to capital
      adequacy).

     

    SECTION
      2.09. Payments and Computations. Other
      than payments
      made pursuant to Section 2.04, the Company shall make each payment hereunder
      not
      later than 12:00 noon (New York City time) on the day when due in lawful money
      of the United States of America to the Administrative Agent at its address
      referred to in Section 9.02 in same day funds. Computations of the Alternate
      Base Rate (when based on the Federal Funds Rate), the Default Rate (when based
      on the Federal Funds Rate) and fees under Section 2.03 shall be made by the
      Administrative Agent on the basis of a year of 360 days for the actual number
      of
      days (including the first day but excluding the last day) elapsed, and
      computations of the Alternate Base Rate (when based on the Base Rate) and the
      Default Rate (when based on the 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, for the
      actual number of days (including the first day but excluding the last day)
      elapsed.

     

    SECTION
      2.10. Non-Business Days. Whenever
      any payment
      to be made hereunder shall be stated to be due on a day that is not 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 fees, as the case may be.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    SECTION
      2.11. Source of Funds. All
      payments made by
      the Fronting Bank and any Bank pursuant to the Letter of Credit shall be made
      from funds of the Fronting Bank and such Bank, respectively, and not from funds
      obtained from any other Person.

     

    SECTION
      2.12. Extension of the Stated Expiration Date.
      Unless the Letter
      of Credit shall have expired in accordance with its terms on the Cancellation
      Date, at least 90 but not more than 365 days before the Stated Expiration Date,
      the Company may request the Fronting Bank with the consent of all the Banks,
      by
      notice to the Administrative Agent in writing (each such request being
      irrevocable) to extend for one year the Stated Expiration Date. If the Company
      shall make such a request the Administrative Agent shall promptly notify the
      Banks thereof, and if the Fronting Bank and the Banks, in their sole discretion,
      elect to extend the Stated Expiration Date then in effect, the Administrative
      Agent shall deliver to the Company a notice (herein referred to as a
“Notice
      of Extension”) designating
      the date
      to which the Stated Expiration Date will be extended and the conditions of
      such
      consent (including, without limitation, conditions relating to legal
      documentation and the consent of the Trustee). If all such conditions are
      satisfied and such extension of the Stated Expiration Date shall be effective
      (which effective date shall occur on the Business Day following the date of
      delivery by the Fronting Bank to the Trustee of an Extension Certificate
      (“Extension
      Certificate”)
      in the form of
      Exhibit 8 to the Letter of Credit designating the date to which the Stated
      Expiration Date will be extended), thereafter all references in any Credit
      Document to the Stated Expiration Date shall be deemed to be references to
      the
      date designated as such in such legal documentation and the most recent
      Extension Certificate delivered to the Trustee. Any date to which the Stated
      Expiration Date has been extended in accordance with this Section 2.12 may
      be
      extended in like manner. Failure of the Administrative Agent to deliver a Notice
      of Extension as herein provided within thirty (30) days of a request by the
      Company to extend such Stated Expiration Date shall constitute an election
      by
      the Fronting Bank and the Banks not to extend the Stated Expiration
      Date.

     

    SECTION
      2.13. Amendments Upon Extension. Upon
      any extension
      of a Stated Expiration Date pursuant to Section 2.12 of this Agreement, the
      Fronting Bank and the Banks reserve the right to renegotiate any provision
      hereof.

     

    SECTION
      2.14. Evidence of Debt. The
      Fronting Bank
      and each Bank shall maintain, in accordance with its usual practice, an account
      or accounts evidencing the indebtedness of the Company resulting from each
      drawing under the Letter of Credit, from each demand loan and from each Tender
      Advance made from time to time hereunder and the amounts of principal and
      interest payable and paid from time to time hereunder. In any legal action
      or
      proceeding in respect of this Agreement, the entries made in such account or
      accounts shall, in the absence of manifest error, be conclusive evidence of
      the
      existence and amounts of the Obligations of the Company therein
      recorded.

     

    SECTION
      2.15. Obligations Absolute.
      The payment
      obligations of the Company under this Agreement 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:

     

    (a) any
      lack of validity
      or enforceability of the Letter of Credit, any Credit Document, any Related
      Document or any other agreement or instrument relating thereto;

     

    
      
        
        

      

      
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    (b) any
      amendment or
      waiver of or any consent to departure from all or any of any Credit Document
      or
      any Related Document;

     

    (c) the
      existence of any
      claim, set-off, defense or other right which any Credit Party may have at any
      time against the Trustee or any other beneficiary, or any transferee, of the
      Letter of Credit (or any persons or entities for whom the Trustee, any such
      beneficiary or any such transferee may be acting), the Fronting Bank, or any
      other person or entity, whether in connection with any Credit Document, the
      transactions contemplated herein or therein or in the Related Documents, or
      any
      unrelated transaction;

     

    (d) any
      statement or any
      other document presented under the 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;

     

    (e) payment
      by the
      Fronting Bank under the Letter of Credit against presentation of a certificate
      which does not comply with the terms of the Letter of Credit; or

     

    (f) any
      other
      circumstance or happening whatsoever, including, without limitation, any other
      circumstance which might otherwise constitute a defense available to or
      discharge of the Company, whether or not similar to any of the
      foregoing.

     

    Nothing
      in this
      Section 2.15 is intended to limit any liability of the Fronting Bank pursuant
      to
      Section 9.06 in respect of its willful misconduct or gross
      negligence.

     

    SECTION
      2.16. Net of Taxes, Etc. (a)
      All payments
      made by the Company under this Agreement shall be made free and clear of, and
      without deduction or withholding for or on account of, any present or future
      income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
      or withholdings, now or hereafter imposed, levied, collected, withheld or
      assessed by any Governmental Authority, excluding,
      in the case of the
      Administrative Agent, the Fronting Bank and each Bank, taxes imposed on its
      overall net income, and franchise taxes imposed on it by the jurisdiction under
      the laws of which the Administrative Agent, the Fronting Bank or such Bank
      (as
      the case may be) is organized or any political subdivision thereof and, in
      the
      case of each Bank, taxes imposed on its overall net income, and franchise taxes
      imposed on it by the jurisdiction of such Bank’s Applicable Booking Office or
      any political subdivision thereof (all such non-excluded taxes, levies, imposts,
      deductions, charges, withholdings and liabilities being hereinafter referred
      to
      as “Taxes”).
      If any Taxes are
      required to be withheld from any amounts payable to the Administrative Agent,
      the Fronting Bank or any Bank hereunder, the amounts so payable to the
      Administrative Agent, the Fronting Bank or such Bank shall be increased to
      the
      extent necessary to yield to the Administrative Agent, the Fronting Bank or
      such
      Bank (after payment of all Taxes) interest or any such other amounts payable
      hereunder at the rates or in the amounts specified in this Agreement. Whenever
      any Taxes are payable by the Company, as promptly as possible thereafter the
      Company shall send to the Administrative Agent for its own account or for the
      account of the Fronting Bank or such Bank, as the case may be, a certified
      copy
      of an original official receipt received by the Company showing payment thereof.
      If the Company fails to pay any Taxes when due to the appropriate taxing
      authority or fails to remit to the Administrative Agent the required receipts
      or
      other required documentary evidence, the Company shall indemnify the
      Administrative Agent, the Fronting Bank and the Banks for any incremental taxes,
      interest or penalties that may become payable by the Administrative Agent,
      the
      Fronting Bank or any Bank as a result of any such failure. The agreements in
      this Section shall survive the termination of this Agreement and the payment
      of
      the obligations hereunder and all other amounts payable hereunder.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    (b) Each
      Bank that is
      not incorporated under the laws of the United States of America or a state
      thereof agrees that it will deliver to the Company and the Administrative Agent
      on or before the latter of the date hereof and the date such Bank becomes a
      Bank
      two duly completed copies of United States Internal Revenue Service Form W-8BEN
      or W-8ECI or successor applicable form, as the case may be. Each such Bank
      also
      agrees to deliver to the Company and the Administrative Agent two further copies
      of said Form W-8BEN or W-8ECI or successor applicable forms or other manner
      of
      certification, as the case may be, on or before the date that any such form
      previously delivered expires or becomes obsolete or after the occurrence of
      any
      event requiring a change in the most recent form previously delivered by it
      to
      the Company, and such extensions or renewals thereof as may reasonably be
      requested by the Company or the Administrative Agent, unless in any such case
      an
      event (including, without limitation, any change in treaty, law or regulation)
      has occurred prior to the date on which any such delivery would otherwise be
      required which renders all such forms inapplicable or which would prevent such
      Bank from duly completing and delivering any such form with respect to it and
      such Bank so advises the Company and the Administrative Agent. Such Bank shall
      certify that it is entitled to receive payments under this Agreement without
      deduction or withholding of any United States federal income taxes and that
      it
      is entitled to an exemption from United States backup withholding
      tax.

     

    (c) If
      any Bank shall
      request compensation for costs pursuant to this Section 2.16, (i) such Bank
      shall make reasonable efforts (which shall not require such Bank to incur a
      loss
      or unreimbursed cost or otherwise suffer any disadvantage deemed by it to be
      significant) to make within 30 days an assignment of its rights and delegation
      and transfer of its obligations hereunder to another of its offices, branches
      or
      affiliates, if such assignment would reduce such costs in the future, (ii)
      the
      Company may with the consent of the Required Banks and the Fronting Bank, which
      consent shall not be unreasonably withheld, secure a substitute bank to replace
      such Bank, which substitute bank shall, upon execution of a counterpart of
      this
      Agreement and payment to such Bank of any and all amounts due under this
      Agreement, be deemed to be a Bank hereunder (any such substitution referred
      to
      in clause (ii) shall be accompanied by an amount equal to any loss or reasonable
      expense incurred by such Bank as a result of such substitution); provided
      that this Section
      2.16(c) shall not be construed as limiting the liability of the Company to
      indemnify or reimburse such Bank for any costs or expenses the Company is
      required hereunder to indemnify or reimburse.

     

    SECTION
      2.17. Participation by Banks in Letter of Credit.
      (a) The Fronting
      Bank irrevocably agrees to grant and hereby grants, without recourse, to each
      Bank, and, to induce the Fronting Bank to issue the Letter of Credit hereunder,
      each Bank irrevocably agrees to accept and purchase and hereby accepts and
      purchases, without recourse, on the terms and conditions hereinafter stated,
      for
      such Bank’s own account and risk an undivided interest equal to such Bank’s
      Commitment Percentage in the Fronting Bank’s obligations and rights under the
      Letter of Credit and the amount of each drawing paid by the Fronting Bank
      thereunder.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (b)
 Upon
      receipt of
      written notice of a drawing under the Letter of Credit, the Fronting Bank shall
      notify the Administrative Agent, who in turn shall notify each Bank promptly
      by
      telex, telecopier or telephone (such telephonic notice to be confirmed in
      writing) of such drawing under the Letter of Credit. In the event that such
      drawing is actually paid by the Fronting Bank and either (i) the Fronting Bank
      has not been reimbursed in full therefor by the Company by 5:00 p.m. (New York
      City time) on the day such drawing is paid by the Fronting Bank or (ii) the
      reimbursement obligation arising from such drawing is to be refinanced through
      a
      Tender Advance, the Administrative Agent shall notify promptly each Bank
      thereof. Upon receipt of such notice, each Bank shall make available to the
      Administrative Agent such Bank’s Commitment Percentage of the demand loans or
      the Tender Advances resulting from such drawing, in immediately available funds,
      by 12:00 noon (New York City time) on the next succeeding Business Day after
      the
      date of such notice. The Administrative Agent shall be deemed to have received
      a
      Bank’s payment at the time that a FedWire confirmation number with respect to
      the payment of such Bank is received by the Administrative Agent.

     

    (c)  
      Upon
      receipt by the Administrative Agent of any payment of, or whenever the
      Administrative Agent makes an application of funds in respect of, the principal
      portion of any Obligations in respect of which a Bank has fulfilled its
      obligations hereunder, the Administrative Agent shall promptly pay over to
      such
      Bank, so long as such Bank is not in default of any of its obligations
      hereunder, in the same funds which the Administrative Agent receives in respect
      thereof, such Bank’s Commitment Percentage of the amount of such payment or
      application.

     

    (d) 
       (i) 
       Upon
      receipt by the
      Administrative Agent of any payment of, or whenever the Administrative Agent
      makes an application of funds in respect of, the interest portion of any
      Obligations as to which a Bank has fulfilled its obligations hereunder, the
      Administrative Agent shall promptly pay over to such Bank, so long as such
      Bank
      is not in default of any of such Bank’s obligations hereunder, in the same funds
      which the Administrative Agent receives in respect thereof, such Bank’s
      Commitment Percentage of the amount of such payment or application; but subject
      to the provisions of clause (ii) of this Section 2.17(d).

     

    (ii)
 If
      a Bank does not
      make available to the Administrative Agent such Bank’s Commitment Percentage of
      any demand loan or Tender Advance on any date on which the related payment
      under
      the Letter of Credit is made by the Fronting Bank (a “Disbursement
      Date”), such
      Bank shall be
      required to pay interest to the Administrative Agent for the account of the
      Fronting Bank on its Commitment Percentage of such demand loan or Tender Advance
      at the Federal Funds Rate from such Disbursement Date until (but excluding)
      the
      date such amount is received by the Fronting Bank. If the Fronting Bank receives
      a Bank’s Commitment Percentage of any demand loan or Tender Advance on the
      related Disbursement Date or if the Fronting Bank receives interest on any
      late
      payment from such Bank in accordance with the provisions of the preceding
      sentence and such late payment is received within five Business Days of the
      related Disbursement Date such Bank shall receive interest on its pro
      rata
share
      of such demand
      loan or Tender Advance in accordance with clause (i) of this Section 2.17(d)
      from such Disbursement Date. If the Fronting Bank does not receive a Bank’s
      Commitment Percentage of any demand loan or Tender Advance on the Disbursement
      Date therefor and does not receive interest on any such late payment together
      with such late payment within five Business Days from such Disbursement Date
      from such Bank in accordance with the provisions of this paragraph, such Bank
      shall receive interest on its Commitment Percentage of such demand loan or
      Tender Advance in accordance with clause (i) of this Section 2.17(d) only from
      the date, if any, on which such Bank’s payment is received by the Fronting
      Bank.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    (e)
 Upon
      receipt by the
      Administrative Agent of any payment of, or whenever the Administrative Agent
      makes an application of funds in respect of, the fees payable pursuant to
      Section 2.03(a) and (b) hereof (the “Shared
      Fees”),
      the
      Administrative
      Agent shall promptly pay over to each Bank, so long as such Bank is not in
      default of any of such Bank’s obligations hereunder, in the same funds which the
      Administrative Agent receives in respect thereof, such Bank’s pro
      rata
share
      of the amount
      of such payment or application, which share shall be based on such Bank’s
      Commitment Percentage of the Shared Fees applicable.

     

    (f)  
      Upon
      receipt by the Administrative Agent of any payment of, or whenever the
      Administrative Agent makes an application of funds in respect of, any amount
      owed to any Bank pursuant to Section 2.07, 2.08 or 2.16, the Administrative
      Agent shall promptly pay over to such Bank, so long as such Bank is not in
      default of any of such Bank’s obligations hereunder, in the same funds which the
      Administrative Agent receives in respect thereof, the amount of such payment
      or
      application.

     

    (g)  
      Upon
      receipt by the Fronting Bank from time to time of any amount pursuant to the
      terms of any Related Document (other than pursuant to the terms of this
      Agreement), the Fronting Bank shall promptly deliver to the Administrative
      Agent
      any such amount. Upon receipt by the Administrative Agent of any such amount,
      the Administrative Agent shall distribute such amounts as follows:

     

    First: To
      the Fronting Bank
      in an amount equal to any draw under the Letter of Credit not reimbursed in
      full
      by the Company or refinanced through a Tender Advance by the Banks pursuant
      to
      Section 2.17(b) hereof on the date of such distribution;

     

    Second:
      To the Fronting
      Bank (for its own account), the Administrative Agent (for its own account)
      and
      the Banks, pro
      rata,
      in an amount equal
      to the commissions and fees due and payable hereunder to the Fronting Bank,
      the
      Administrative Agent and the Banks on the date of such
      distribution;

     

    Third:
      To the Banks,
pro
      rata, in
      an amount equal
      to the interest due and payable on any demand loan or Tender Advance outstanding
      hereunder on the date of such distribution;

     

    Fourth:
      To the Banks,
pro
      rata, in
      an amount equal
      to the principal due and payable to the Banks hereunder on the date of such
      distribution;

     

    Fifth: To
      the Fronting Bank
      and the Administrative Agent, in an amount equal to any amount due and payable
      to the Fronting Bank and the Administrative Agent in their capacities as such
      pursuant to Section 9.07 hereof (or any similar provision in any other Credit
      Document) on the date of such distribution;

     

    Sixth: To
      the Banks,
pro
      rata, in
      an amount equal
      to any amount due and payable to the Banks pursuant to Section 9.07 hereof
      (or
      any similar provision in any other Credit Document) on the date of such
      distribution; and

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    Seventh:
 To
      the Fronting Bank
      (for its own account), the Administrative Agent (for its own account) and the
      Banks, pro rata,
      for
      any other
      amounts not described above due and payable hereunder or under any other Credit
      Document to such Persons on the date of such distribution.

     

    (h)
 If
      all or any part
      of any payment made to the Administrative Agent with respect to the Obligations
      or hereunder and paid over by the Administrative Agent to any Bank pursuant
      to
      the terms hereof is thereafter recovered or returned from or by the
      Administrative Agent for any reason, then such Bank shall pay to the
      Administrative Agent such Bank’s pro rata
      share
      thereof (based
      upon the amount such Bank has received in respect thereof) upon the
      Administrative Agent’s demand therefor (together with interest thereon to the
      extent that the Administrative Agent is required to pay interest on the amount
      so recovered or returned).

     

    (i)  
      Each
      Bank shall indemnify and hold harmless the Fronting Bank from and against any
      and all liabilities (including liabilities for penalties), actions, suits,
      judgments, demands, costs and expenses (including, without limitation,
      reasonable attorneys’ fees and expenses) resulting from any failure on such
      Bank’s part to provide, or from any delay  in providing, any payment
      required by such Bank under subsection (b) of this Section 2.17. If any Bank
      fails to make any payments under subsection (b) of this Section 2.17 within
      five
      Business Days of the due date therefor, then the Fronting Bank may acquire,
      or
      transfer to an assignee, in exchange for the unpaid sum or sums due from such
      Bank, such Bank’s unfunded portion of its Commitment Percentage of the
      Obligations and the Letter of Credit without, however, relieving such Bank
      from
      any liability for damages, costs and expenses suffered by the Fronting Bank
      as a
      result of such failure. The purchaser of any such interest (including the
      Fronting Bank) shall be deemed to have acquired an interest senior to such
      Bank’s remaining interest hereunder (if any), and accordingly, such purchaser
      shall be entitled to receive all subsequent payments allocable to such Bank’s
      interest hereunder which the Administrative Agent would otherwise have made
      to
      such Bank until such time as the purchaser shall have obtained recovery of
      the
      amount it paid for its interest, with interest at the Default Rate. After any
      such transfer, such Bank shall have no further obligations hereunder (except
      for
      any liability for damages, costs and expenses as aforesaid) and shall not be
      entitled to its Commitment Percentage of any fees or commissions accruing after
      the effective date of such transfer.

     

    (j)  
      Each
      Bank hereby irrevocably authorizes the Fronting Bank to pay drawings under
      the
      Letter of Credit, and authorizes the Administrative Agent to receive from the
      Company payment of all fees, costs, expenses, charges, principal and interest
      and to take such action on such Bank’s behalf hereunder and the Related
      Documents and to exercise such powers and to perform such duties hereunder
      and
      thereunder as are specifically delegated to or required of the Administrative
      Agent by the terms hereof and thereof, together with such powers as are
      reasonably incidental thereto.

     

    (k)  
      Each
      Bank hereby acknowledges and agrees that such Bank’s obligation to participate
      in the Letter of Credit and such Bank’s obligation to pay to the Administrative
      Agent on the dates specified herein amounts equal to such Bank’s Commitment
      Percentage of drawings paid by the Fronting Bank under the Letter of Credit,
      the
      Tender Advances and the demand loans made hereunder shall be at all times and
      in
      all events absolute, irrevocable and unconditional obligations, and that such
      obligations shall not be affected in any way by any intervening circumstances
      occurring after the payment of any drawing under the Letter of Credit or the
      making of any Tender Advances or demand loans including, without
      limitation:

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    (i)  
      the
      existence of any claim, set-off, defense or other right that any Credit Party
      may have against the Administrative Agent, the Fronting Bank, any Bank or any
      other party; or

     

    (ii)  
      any
      certificate or any other document presented under the Letter of Credit proving
      to have been forged, fraudulent, invalid or insufficient in any respect or
      any
      statement therein being untrue or inaccurate in any respect except in the case
      of the gross negligence or willful misconduct of the Fronting Bank;
      or

     

    (iii)  
      any
      other act or omission to act of any kind by the Fronting Bank, the
      Administrative Agent or any Credit Party or any Person providing security or
      guarantees in connection with this Agreement, the Letter of Credit or any other
      Credit Document except in the case of the gross negligence or willful misconduct
      of the Fronting Bank; or

     

    (iv)  
      the
      existence of any Event of Default, Default or other default hereunder;
      or

     

    (v)  
      any
      change of any kind whatsoever in the financial position or creditworthiness
      of
      any Credit Party, any guarantor or any other Person.

     

    (1)  
      Each
      Bank agrees to indemnify the Fronting Bank for such Bank’s Commitment Percentage
      of any and all liabilities, obligations, losses, damages, penalties, actions,
      judgments, suits, costs, expenses or disbursements of any kind and nature
      whatsoever which may be imposed on, incurred by or asserted against it in any
      way relating to or arising out of the Obligations, the Related Documents or
      the
      transactions contemplated hereby or thereby or the enforcement of any of the
      terms thereof (including, without limitation, reasonable fees and disbursements
      of counsel), provided
      that no Bank shall
      be liable for any of the foregoing to the extent they arise from the Fronting
      Bank’s gross negligence or willful misconduct or to the extent the Fronting Bank
      has been indemnified or reimbursed by the Company. This indemnity shall survive
      the termination of this Agreement.

     

    ARTICLE
      III

     

    CONDITIONS
      PRECEDENT

     

    SECTION
      3.01.  Conditions Precedent to Issuance of the Letter of
      Credit. The
      obligation of
      the Fronting Bank to issue the Letter of Credit is subject to the conditions
      precedent that (i) the Administrative Agent shall have received from the Company
      the amounts payable by the Company to the Administrative Agent upon the issuance
      of the Letter of Credit in accordance with Section 2.03, (ii) the Administrative
      Agent shall have received from the Company pursuant to Section 9.07 payment
      for
      the costs and expenses, including legal expenses for which an invoice has been
      submitted to the Company, of the Administrative Agent incurred and unpaid
      through such date and (iii) the Administrative Agent shall have received on
      or
      before the Date of Issuance the following, each dated such date, in form and
      substance satisfactory to the Administrative Agent and the Banks, with copies
      for each Bank:

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    (a)  
      Counterparts
      of (i)
      this Agreement, duly executed by the Company, the Administrative Agent, the
      Fronting Bank and the Banks and (ii) the FirstEnergy Guaranty Agreement, duly
      executed by FirstEnergy;

     

    (b)  
      Counterparts
      of the
      Custodian Agreement, duly executed by the Company, the Fronting Bank and the
      Custodian;

     

    (c)  
      Certified
      copies of
      each of the Company’s and FirstEnergy’s Organizational Documents;

     

    (d)  
      Evidence
      of the
      status of each of the Company and First Energy as a duly organized and validly
      existing corporation under the laws of the State of Ohio;

     

    (e)  
      A
      duplicate copy, certified, as of the Date of Issuance, by the Company (in a
      manner satisfactory to the Administrative Agent) to be a true and complete
      copy,
      of all proceedings relating to the issuance and sale of the Bonds;

     

    (f)  
      A
      duplicate copy, certified, as of the Date of Issuance, by the Company (in a
      manner satisfactory to the Administrative Agent) to be a true and complete
      copy,
      of each Related Document not delivered pursuant to subsection (e) above,
      together with opinion letters of counsel to the Issuer, the Trustee and/or
      the
      Custodian, as applicable, providing for the reliance thereon by the
      Administrative Agent and the Banks and any related closing certificates of
      the
      Issuer;

     

    (g)  
      Certified
      copies of
      audited consolidated financial statements of FirstEnergy and its Subsidiaries
      for the 2003 and 2004 fiscal years;

     

    (h)  
      Certified
      copies of
      the resolutions of the Board of Directors of each of the Company and FirstEnergy
      authorizing each Credit Document to which it is a party and all of the Related
      Documents to which each such Credit Party is a party and the transactions
      contemplated hereby and thereby, and of all other documents evidencing any
      other
      necessary corporate action;

     

    (i)  
      Evidence
      that the
      Remarketing Agent has acknowledged and accepted in writing its appointment
      as
      Remarketing Agent under the Indenture and its duties and obligations
      thereunder;

     

    (j)  
      Duplicate
      copies
      (certified by the Secretary or an Assistant Secretary of the Company to be
      true
      and complete copies) of all governmental actions and regulatory approvals
      (including, without limitation, approvals or orders of the Securities and
      Exchange Commission, the Issuer and the PUCO, if any) necessary for the Company
      to enter into this Agreement and each of the Related Documents to which the
      Company is a party and the transactions contemplated hereby and
      thereby;

     

    (k)  
      A
      certificate of the Secretary or an Assistant Secretary of each of the Company
      and FirstEnergy certifying the names, true signatures and incumbency of the
      officers of each such Credit Party authorized to sign each Credit Document
      to
      which it is a party and the other documents to be delivered by it hereunder
      or
      thereunder;

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    (l)  
      An
      opinion letter of Gary D. Benz, Esq., Associate General Counsel of FirstEnergy
      and counsel to the Company, in substantially the form of Exhibit D and as to
      such other matters as the Administrative Agent may reasonably
      request;

     

    (m)  
      An
      opinion letter of Akin Gump Strauss Hauer & Feld LLP, special New York
      counsel to FirstEnergy and the Company, in substantially the form of Exhibit
      E
      and as to such matters as the Administrative Agent may reasonably request;
      

     

    (n)  
      An
      opinion letter of Sidley Austin Brown & Wood LLP, special New York counsel
      to the Fronting Bank, in substantially the form of Exhibit F and as to such
      other matters as the Fronting Bank my reasonably request; 

     

    (o)  
      An
      opinion letter of Lovells, special English counsel to the Fronting Bank, in
      substantially the form of Exhibit G and as to such matters as the Fronting
      Bank
      may reasonably request; 

     

    (p)  
      A
      letter from Squire, Sanders & Dempsey, L.L.P., Bond Counsel, addressed to
      the Administrative Agent, the Fronting Bank and the Banks and stating therein
      that such Persons may rely on the opinion letter of such firm delivered in
      connection with the issuance of the Bonds;

     

    (q)  
      Copies
      of the Official Statement used
      in connection with
      the offering of the Bonds;


     

    (r)  
      Letters
      from S&P and Moody’s to the effect that the Bonds have been rated at least
      A-1 and P-1, respectively, such letters to be in form and substance satisfactory
      to the Administrative Agent;

     

    (s)  
      A
      certificate of an authorized officer of the Custodian certifying the names,
      true
      signatures and incumbency of the officers of the Custodian authorized to sign
      the documents to be delivered by it hereunder and as to such other matters
      as
      the Administrative Agent may reasonably request; and

     

    (t)  
      A
      certificate of an authorized officer of the Trustee certifying the names, true
      signatures and incumbency of the officers of the Trustee authorized to make
      drawings under the Letter of Credit and as to such other matters as the
      Administrative Agent may reasonably request.

     

    SECTION
      3.02.  Additional Conditions Precedent to Issuance of the Letter of Credit
      and Amendment of the Letter of Credit.  The
      obligation of
      the Fronting Bank to issue the Letter of Credit, or to amend, modify or extend
      the Letter of Credit, shall be subject to the further conditions precedent
      that
      on the Date of Issuance and on the date of such amendment, modification or
      extension, as the case may be:

     

    (a)  
      The
      following statements shall be true and the Administrative Agent shall have
      received a certificate from each Credit Party signed by a duly authorized
      officer of such Credit Party (including FES only if the FES Guaranty Agreement
      shall be effective), dated such date, stating that:

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    (i)  
      The
      representations and warranties of such Credit Party contained in Sections 4.01
      of this Agreement or in Section 6 of its Guaranty Agreement, as the case may
      be,
      and as applicable in the Related Documents are true and correct in all material
      respects on and as of such date as though made on and as of such date (except
      to
      the extent such representations and warranties relate solely to a specified
      earlier date, in which case such representations and warranties were true and
      correct on and as of such earlier date); and

     

    (ii)  
      No
      event has occurred and is continuing, or would result from the issuance of
      the
      Letter of Credit or such amendment, modification or extension of the Letter
      of
      Credit (as the case may be), which constitutes a Default or an Event of Default;
      and

     

    (iii)  
      True
      and complete copies of the Related Documents (including all exhibits,
      attachments, schedules, amendments or supplements thereto) have previously
      been
      delivered to the Administrative Agent and the Related Documents have not been
      modified, amended or rescinded, and are in full force and effect as of the
      Date
      of Issuance; and

     

    (b)  
      The
      Administrative Agent shall have received such other approvals, opinions or
      documents as the Administrative Agent may reasonably request.

     

    SECTION
      3.03.  Conditions Precedent to Each Tender
      Advance. The
      obligation of
      the Banks to make each Tender Advance shall be subject to the condition
      precedent that, on the date of such Tender Advance, the following statements
      shall be true:

     

    (a)  
      The
      representations and warranties of the Company contained in Section 4.01 of
      this
      Agreement and of each Guarantor in Section 6 of its Guaranty Agreement are
      true
      and correct in all material respects on and as of the date of such Tender
      Advance as though made on and as of such date, both before and after giving
      effect to such Tender Advance and to the application of the proceeds
      thereof;

     

    (b)  
      The
      Bonds to be purchased with the proceeds of the Tender Drawing relating to such
      Tender Advance shall simultaneously be pledged in accordance with the provisions
      of Section 5.05 of the Indenture and of the Custodian Agreement;
      and

     

    (c)  
      No
      event has occurred and is continuing, or would result from such Tender Advance
      or the application of the proceeds thereof, which constitutes a Default or
      an
      Event of Default.

     

    Unless
      the Credit
      Parties shall have previously advised the Banks in writing that one or more
      of
      the statements contained in clauses (a) and (c) above is no longer true, each
      Credit Party shall be deemed to have represented and warranted, on the date
      of
      any Tender Advance made by the Banks hereunder, that on the date of such Tender
      Advance the above statements are true.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      IV

     

    REPRESENTATIONS
      AND WARRANTIES

     

    SECTION
      4.01.  Representations and Warranties of the
      Company. The
      Company hereby
      represents and warrants 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, as follows:

     

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

     

    (b)  
      Corporate
      Authorization. The
      execution,
      delivery and performance by the Company of this Agreement and each Related
      Document are within the Company’s corporate powers, have been duly authorized by
      all necessary corporate action on the part of the Company and did not, do not,
      and will not, require the consent or approval of the Company shareholders,
      or
      any trustee or holder of any Debt or other obligation of the Company, other
      than
      such consents and approvals as have been, or on or before the Date of Issuance,
      will have been, duly obtained, given or accomplished.

     

    (c)  
      No
      Violation, Etc. Neither
      the
      execution, delivery or performance by the Company of this Agreement or any
      Related Document nor the consummation by the Company of the transactions
      contemplated hereby, nor compliance by the Company 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 the Company’s Organizational Documents
      or any Applicable Law, or any indenture, mortgage, lease or any other agreement
      or instrument to which it or any of its Affiliates is party or by which its
      property or the property of any of its Affiliates is bound, or results or will
      result in the creation or imposition of any Lien upon any of its property or
      the
      property of any of its Affiliates. There is no provision of (i) any of the
      Company’s Organizational Documents, (ii) except as disclosed in the Disclosure
      Documents, any Applicable Law, or (iii) any such indenture, mortgage, lease
      or
      other agreement or instrument that materially adversely affects, or in the
      future is likely to materially adversely affect, the business, operations,
      affairs, condition, properties or assets of the Company, or its ability to
      perform its obligations under this Agreement or any Related
      Document.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    (d)  
      Governmental
      Actions. No Governmental
      Action
      is or will be required in connection with the execution, delivery or performance
      by the Company of, or the consummation by the Company of the transactions
      contemplated by, this Agreement or any Related Document to which it is, or
      is to
      become, a party, except such Governmental Actions as have been duly obtained,
      given or accomplished. No Governmental Action by any Governmental Authority
      relating to the Securities Act of 1933, as amended, the Securities Exchange
      Act
      of 1934, as amended, the Trust Indenture Act of 1939, as amended, the Federal
      Power Act, the Atomic Energy Act, the Nuclear Waste Act, the Public Utility
      Holding Company Act of 1935, the Ohio Public Utility Act, energy or nuclear
      matters, public utilities, the environment or health and safety matters is
      or
      will be required in connection with the participation by the Administrative
      Agent, the Fronting Bank or any Bank in the consummation of the transactions
      contemplated by this Agreement and the Related Documents, or will be required
      to
      be obtained by any of such Persons during the term of this Agreement, except
      such Governmental Actions (i) as have been duly obtained, given or accomplished
      or (ii) as may be required by Applicable Law not now in effect. None of the
      Governmental Actions referred to in the first sentence of this subsection (d)
      or
      in clause (i) of the second sentence of this subsection (d) are the subject
      of
      appeal or reconsideration or other review, and the time in which to make an
      appeal or request the review or reconsideration of any such Governmental Action
      has expired with any appeal or request for review or reconsideration not having
      been taken or made.

     

    (e)  
      Execution
      and Delivery. This Agreement
      and any
      Related Document to which the Company is a party have been duly executed and
      delivered by the Company, and this Agreement and each such Related Document
      is
      the legal, valid and binding obligation of the Company enforceable in accordance
      with its respective terms.

     

    (f)  
      Full
      Force and Effect. Each
      Related
      Document is in full force and effect. The Company has duly and punctually
      performed and observed all the terms, covenants and conditions contained in
      each
      such Related Document on its part to be performed or observed, and no Default
      or
      Event of Default has occurred and is continuing.

     

    (g)  
      Bonds
      Validly Issued. The
      Bonds have been
      duly authorized, authenticated and issued and delivered, and are the legal,
      valid and binding obligations of the Issuer, and are not in
      default.

     

    (h)  
      Material
      Adverse Change. Since
      December 16,
      2005, there has been no material adverse change in such condition or in the
      Company’s properties or business or results of operations, or in the prospects
      of the Company and its Subsidiaries, or in the ability of the Company to perform
      its obligations under this Agreement or any Related Document to which it is
      a
      party.

     

    (i)  
      Litigation.
      There is no pending
      or threatened action, investigation or proceeding (including, without
      limitation, any proceeding relating to or arising out of Environmental Laws)
      before any court, governmental agency or arbitrator against or affecting the
      Company or any of its Subsidiaries which (i) purports to affect the legality,
      validity or enforceability of this Agreement or any Related Document or (ii)
      may
      have a Material Adverse Effect or a material adverse effect on the business,
      operations, property, condition (financial or otherwise) or prospects of the
      Company and its Subsidiaries, taken as a whole, except (with respect to this
      clause (ii) only) as is disclosed in the Disclosure Documents.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

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

     

    (k)  
      Environmental.
      Except as otherwise
      disclosed in the Disclosure Documents or otherwise to the Banks by the Company
      in writing, (i) facilities and property (including underlying groundwater)
      owned
      or leased by the Company or any of its Subsidiaries have been, and continue
      to
      be, owned or leased by it and its Subsidiaries in compliance with all
      Environmental Laws, except for such failures to comply which would not give
      rise
      to any potential material liability of the Company or any of its Subsidiaries;
      and (ii) there have been no past, and, to the Company’s actual knowledge, there
      are no pending or threatened (A) claims, complaints or notices for information
      received by the Company or any of its Subsidiaries with respect to any alleged
      violation of any Environmental Law, or (B) complaints or notices to the Company
      or any of its Subsidiaries regarding potential material liability under any
      Environmental Law, except for such alleged violations which would not give
      rise
      to any potential material liability of the Company or any of its
      Subsidiaries.

     

    (l)  
      Title
      to
      Real Property. The
      Company and each
      of its Subsidiaries has good and marketable title to all of the real property
      it
      purports to own, free and clear of Liens other than Permitted
      Liens.

     

    (m)  
      ERISA.
       (i)
 No
      Termination Event has occurred nor is reasonably expected to occur with respect
      to any Plan.

     

    (ii)  
      Schedule
      B
      (Actuarial Information) to the 2003 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
      the Company nor any of its Affiliates has incurred nor reasonably expects to
      incur any withdrawal liability under ERISA to any Multiemployer
      Plan.

     

    (n)  
      Official
      Statement.
      Except for
      information contained in the Official Statement furnished in writing by or
      on
      behalf of the Issuer, the Trustee, the Tender Agent, the Paying Agent, the
      Underwriters, the Remarketing Agent or the Fronting Bank specifically for
      inclusion therein, the Official Statement and any supplement or “sticker”
thereto are accurate in all material respects for the purposes for which their
      use shall be authorized; and the Official Statement and any such supplement
      or
“sticker”, when read together with the statement that it supplements or amends,
      does not, as of its date, contain any untrue statement of a material fact or
      omit to state any material fact necessary to make the statements made therein,
      in the light of the circumstances under which they are or were made, not
      misleading.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    (o)  
      Accuracy
      of Information.
      No exhibit,
      schedule, report or other written information provided by or on behalf of the
      Company or its agents to the Administrative Agent, the Fronting Bank or the
      Banks in connection with the negotiation, execution and closing of this
      Agreement and the Custodian Agreement (including, without limitation, the
      Official Statement) knowingly contained when made any material misstatement
      of
      fact or knowingly omitted to state any material fact necessary to make the
      statements contained therein not misleading in light of the circumstances under
      which they were made.

     

    (p)  
      Margin
      Stock; Investment Company.
      No proceeds of the
      Bonds or of the Letter of Credit will be used in violation of, or in any manner
      that would result in a violation by any party hereto of, Regulations T, U or
      X
      promulgated by the Board of Governors of the Federal Reserve System or any
      successor regulations. The Company (i) is not an “investment
      company” within
      the meaning
      ascribed to that term in the Investment Company Act of 1940 and (ii) is not
      engaged in the business of extending credit for the purpose of buying or
      carrying margin stock.

     

    (q)  
      Taxability.
      The performance of
      this Agreement and the transactions contemplated herein will not affect the
      status of the interest on the Bonds as exempt from Federal income
      tax.

     

    (r)  
      Solvency. 
(i)
       The
      fair salable
      value of the Company’s assets will exceed the amount that will be required to be
      paid on or in respect of the probable liability on the Company’s existing debts
      and other liabilities (including contingent liabilities) as they mature; (ii)
      the Company’s assets do not constitute unreasonably small capital to carry out
      its business as now conducted or as proposed to be conducted; (iii) the Company
      does not intend to incur debt 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
      Company 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 Company’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.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    (s)  
      No
      Material Misstatements.
      The reports,
      financial statements and other written information furnished by or on behalf
      of
      the Company to the Administrative Agent or any Bank pursuant to or in connection
      with this Agreement 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.
      

     

    (t)  
      Public
      Utility Holding Company Act.
      The Company is a
“public utility company” and a “subsidiary company” of FirstEnergy, which is a
      registered “holding company” as such terms are defined in the Public Holding
      Company Act of 1935, as amended, which has been repealed effective February
      8,
      2006. Thereafter, pursuant to the Public Utility Holding Company Act of 2005,
      the Company will be subject to the jurisdiction of the Federal Energy Regulatory
      Commission (“FERC”)
      as a “public
      utility” within the meaning of the Federal Power Act, as amended (“FPA”),
      and subject to
      FERC regulation, including such regulations as FERC may adopt relating to
      accounting, cost allocation, record keeping another rules governing transactions
      between holding companies and their service companies. The Company is also
      subject to the limited jurisdiction of any State commission with jurisdiction
      to
      regulate a public utility company in the Company's holding company system,
      with
      respect to access to the books and records of the Company. The Company has
      obtained blanket authority from FERC under Section 204 of the FPA, and/or is
      exempt from any requirement to obtain FERC approval, to issue securities and
      assume liabilities, and such authorization and/or exemption remains in full
      force and effect. No further regulatory authorizations from either FERC or
      any
      State commission are required for this transaction. 

     

    ARTICLE
      V

     

    COVENANTS
      OF
      THE COMPANY

     

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

     

    (a)  
      Preservation
      of Corporate Existence, Etc. Without
      limiting the
      rights of the Company under Section 5.02(f) 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, licenses, permits and franchises necessary
      or
      desirable in the normal conduct of its business.

     

    (b)  
      Compliance
      with Laws, Payment of Taxes, Etc. Comply,
      and cause
      each of its Subsidiaries to comply, in all respects with all Applicable Laws
      of
      any Governmental Authority, the noncompliance with which in such respect could
      reasonably be expected to have a Material Adverse Effect, such compliance to
      include, without limitation, paying before the same become delinquent all 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 is good faith.

     

    
      
        
        

      

      
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    (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 Company operates and furnish
      to the Administrative Agent, within a reasonable time after written request
      therefor, such information as to the insurance carried as the Administrative
      Agent may reasonably request.

     

    (d)  
      Visitation
      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 Company and
      any of its Subsidiaries, and to discuss the affairs, finances and accounts
      of
      the Company and any of its Subsidiaries with any of their respective officers
      or
      directors and with their independent public accountants; provided,
      however, that
      the Company
      reserves the right to restrict access to any of its 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 Company or any of its Subsidiaries obtained
      by the Administrative Agent or such Bank pursuant to this Section which is
      not
      contained in a report or other document filed with the Securities and Exchange
      Commission, distributed by the Company 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 (which shall include,
      without limitation, providing such information to regulatory authorities and
      such Bank’s sharing of its liability under the Letters of Credit with other
      banks), be treated confidentially by the Administrative Agent or such Bank
      and
      will not be distributed or otherwise made available by the Administrative Agent
      or such Bank to any Person, other than (i) the Administrative Agent’s or such
      Bank’s affiliates, employees, authorized agents or representatives, (ii) to
      legal counsel, accountants, and other professional advisors to such Bank or
      to
      prospective assignees and participants pursuant to Section 9.09, (iii) to its
      direct or indirect contractual counterparties in swap agreements or to legal
      counsel, accountants and other professional advisors to such counterparties,
      and
      (iv) to rating agencies if requested or required by such agencies in connection
      with a rating relating to the Letters of Credit issued hereunder; provided
      that, for purposes
      of the foregoing clauses (ii), (iii) and (iv), prior to any such disclosure
      to
      any such Person, such Person shall agree to preserve the confidentiality of
      any
      confidential information relating to the Company or any of its Subsidiaries
      received by it from the Administrative Agent or such Bank.

     

    (e)  
      Keeping
      of Books; Access to Information on Remarketing Agent and Tender
      Agent. Keep,
      and cause each
      of its Subsidiaries 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
      Company and such Subsidiary in accordance with generally accepted accounting
      principles, consistently applied except to the extent described therein, and
      to
      the extent permitted under the terms of the Indenture and reasonably requested
      by the Administrative Agent, inspect, and provide access to information received
      by the Company with respect to any inspection of, the books and records of
      the
      Remarketing Agent and the Tender Agent.

     

    
      
        
        

      

      
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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 which are used or which 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
      Company 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 Banks,
      the
      following:

     

    (i)
 as
      soon as possible
      and in any event within five Business Days after the occurrence of each Default
      or Event of Default, the statement of an authorized officer of the Company
      setting forth details of such Default or Event of Default and the action which
      the Credit Parties have taken and propose to take with respect
      thereto;

     

    (ii)
 as
      soon as available
      and in any event within 50 days after the close of each of the first three
      quarters in each fiscal year of the Company (A) unaudited consolidated balance
      sheets of the Company and its Subsidiaries as at the end of such quarter and
      consolidated statements of income and of cash flows of the Company and its
      Subsidiaries for the twelve-month period then ended, fairly presenting the
      financial condition of the Company and its Subsidiaries as at such date and
      the
      cash flows of the Company 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 comptroller of the Company as having been
      prepared in accordance with generally accepted accounting principles
      consistently applied, and (B) a certificate of such officer (1) stating whether
      he has any knowledge of the occurrence at any time prior to the date of such
      certificate of any Default or Event of Default not theretofore reported pursuant
      to the provisions of paragraph (i) of this subsection (g) and, if so, setting
      forth the details of such Default or Event of Default and (2) setting forth
      in a
      true and correct manner, the calculation of the ratio contemplated by Section
      5.03 hereof, if applicable, to show the Company’s compliance with or the status
      of the financial covenant contained in Section 5.03 hereof; provided, however,
      that the Company shall have no obligation to satisfy the reporting obligation
      under clause (A) above unless and until the earlier of (x) the date the
“Applicable Percentage” under (and as defined in) each then effective Guaranty
      Agreement shall be 0% and (y) such earlier date as the Company shall elect
      in
      its sole discretion;

     

    
      
        
        

      

      
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    (iii)
 (A)
      as soon as
      available and in any event within 105 days after the end of each fiscal year
      of
      the Company, a copy of the annual report for such year for the Company and
      its
      Subsidiaries containing financial statements for such year, in each case,
      prepared in accordance with generally accepted auditing standards by independent
      public accountants of recognized national standing selected by the Company
      and
      certified in a manner acceptable to the Banks by such independent public
      accountants, and (B) a certificate of the chief financial officer, treasurer,
      assistant treasurer, comptroller or corporate secretary of the Company stating
      whether he has any knowledge of the occurrence at any time prior to the date
      of
      such certificate of any Default or Event of Default not theretofore reported
      pursuant to the provisions of paragraph (i) of this subsection (g) and, if
      so,
      setting forth the details of such Default or Event of Default; provided,
      however, that the Company shall have no obligation to satisfy the reporting
      obligation under clause (A) above unless and until the earliest of (x) the
      date
      the “Applicable Percentage” under (and as defined in) each then effective
      Guaranty Agreement shall be 0% and (y) such earlier date as the Company shall
      elect in its sole discretion;

     

    (iv)  
      promptly
      after the
      sending or filing thereof, (A) copies of all reports which the Company sends
      to
      its security holders generally and (B) copies of all reports which the Company
      or any of its Subsidiaries files with the Securities and Exchange Commission
      or
      any national securities exchange;

     

    (v)  
      as
      soon
      as possible and in any event (A) within 30 days after the Company or any
      Affiliate 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 Company or any Affiliate 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 Company describing
      such Termination Event and the action, if any, which the Company or such
      Affiliate proposes to take with respect thereto;

     

    (vi)  
      promptly
      and in any
      event within two Business Days after receipt thereof by the Company or any
      Affiliate from the PBGC, copies of each notice received by the Company or any
      such Affiliate 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 which is a pension plan (other than
      a
      Multiemployer Plan) maintained for employees of the Company or any Affiliate,
      which provides payments at, or defers receipt of payment until, retirement
      and
      is subject to Title IV of ERISA;

     

    (viii)  
      if
      and
      for so long as the Company or any Affiliate shall incur, or expect to incur,
      any
      liability under a Multiemployer Plan, promptly and in any event within five
      Business Days after receipt thereof by the Company or any Affiliate from a
      Multiemployer Plan sponsor, a copy of each notice received by the Company or
      any
      Affiliate concerning (A) the imposition of withdrawal liability by a
      Multiemployer Plan pursuant to Section 4202 of ERISA, (B) the determination
      that
      a Multiemployer Plan is, or is expected to be, in reorganization within the
      meaning of Title IV of ERISA, (C) the termination of a Multiemployer Plan within
      the meaning of Title IV of ERISA, or (D) the amount of liability incurred,
      or
      expected to be incurred, by the Company or any Affiliate in connection with
      any
      event described in clause (A), (B) or (C), above;

     

    
      
        
        

      

      
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    (ix)  
      promptly
      after the
      Company becomes aware of the occurrence thereof, notice of all actions, suits,
      proceedings or other events (A) of the type described in Section 4.01(i) or
      Section 4.01(k) or (B) for which the Administrative Agent or the Banks will
      be
      entitled to indemnity under Section 9.05;

     

    (x)  
      such
      other information respecting the condition or operations, financial or
      otherwise, of the Company or any of its Subsidiaries as any Bank may from time
      to time reasonably request;

     

    (xi)  
      promptly
      and in any
      event within five Business Days after Moody’s or S&P has modified its rating
      of any of the Company’s First Mortgage Bonds, if any, notice of such
      modification;

     

    (xii) 
       promptly
      and in any
      event within two Business Days after receipt thereof, copies of each written
      notice received by the Company from the Trustee, the Paying Agent, the
      Underwriters, the Remarketing Agent or the Tender Agent pursuant to any of
      the
      Related Documents; and

     

    (xiii)  
      promptly
      and in any
      event within two Business Days after the Trustee resigns as trustee under the
      Indenture, notice of such resignation.

     

    (h)
 Transactions
      with Affiliates.  Conduct,
      and
      cause each of its Subsidiaries to conduct, all transactions with any of its
      Affiliates on terms that are fair and reasonable and no less favorable to the
      Company or such Subsidiary than it would obtain in a comparable arm’s-length
      transaction with a Person not an Affiliate; provided,
      however, that
      any transaction
      with any Affiliate of the Company which transaction (or any plan that involves
      such transaction) has been approved by the Public Utilities Commission of Ohio,
      the Pennsylvania Public Utility Commission or the Securities and Exchange
      Commission, as the case may be, shall not be subject to this
      Section.

     

    (i)  
      Environmental
      Laws. 
      (i) Comply with,
      cause each of its Subsidiaries to comply with, and insure compliance by all
      tenants and subtenants, if any, with, all Environmental Laws and obtain and
      comply with and maintain, cause each of its Subsidiaries to obtain and comply
      with and maintain, and insure that all tenants and subtenants obtain and comply
      with and maintain, any and all licenses, approvals, registrations or permits
      required by Environmental Laws, except to the extent that failure to do so
      would
      not have a material adverse effect on the business, condition (financial or
      otherwise), operations, performance, properties or prospects of the Company
      or
      any of its Subsidiaries.

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    (ii)  
      Conduct
      and complete, and cause each of its Subsidiaries to conduct and complete, all
      investigations, studies, sampling, and testing and remedial, removal and other
      actions required under Environmental Laws and promptly comply with, and cause
      each of its Subsidiaries to promptly comply with, all lawful orders and
      directives of all Governmental Authorities respecting Environmental Laws, except
      to the extent that the same are being contested in good faith by appropriate
      proceedings and the pendency of such proceedings would not have a material
      adverse effect on the business, condition (financial or otherwise), operations,
      performance, properties or prospects of the Company or any of its
      Subsidiaries.

     

    (iii)  
      Defend,
      indemnify and hold harmless the Administrative Agent, the Fronting Bank and
      each
      Bank, and their respective employees, agents, officers, directors and affiliates
      from and against any claims, demands, penalties, fines, liabilities,
      settlements, damages, costs and expenses of whatever kind or nature known or
      unknown, contingent or otherwise, arising out of or in any way relating to
      the
      violation of or noncompliance with any Environmental Laws applicable to the
      real
      property owned or operated by the Company or any of its Subsidiaries, or any
      orders, requirements or demands of Governmental Authorities relating thereto,
      including, without limitation, attorney’s and consultant’s fees, investigation
      and laboratory fees, court costs and litigation expenses, except to the extent
      that any of the foregoing arise out of the gross negligence or willful
      misconduct of the party seeking indemnification therefor.

     

    (j)  
      Redemption
      or Defeasance of Bonds.
      Use
      its best efforts
      to cause the Trustee, upon redemption or defeasance of all of the Bonds pursuant
      to the Indenture, to surrender the Letter of Credit to the Fronting Bank for
      cancellation.

     

    (k)  
      Registration
      of Bonds.
      Cause all Bonds
      which it acquires, or which it has had acquired for its account, to be
      registered forthwith in accordance with the Indenture and the Custodian
      Agreement in the name of the Company or its nominee (the name of any such
      nominee to be disclosed to the Trustee and the Administrative
      Agent).

     

    (l)  
      Related
      Documents.
      Perform and comply
      in all material respects with each of the provisions of each Related Document
      to
      which it is a party.

     

    (m)  
      Use
      of
      Letter of Credit.
      Cause the Letter
      of Credit to be used in support of the payment of principal, and interest on
      the
      principal amount, of the Bonds. 

     

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

     

    
      
        
        

      

      
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    (a)  
      Liens,
      Etc.
      Except as permitted
      in Section 5.02(b) and (c), create or suffer to exist, or permit any of its
      Subsidiaries to create or suffer to exist, any Lien upon or with respect to
      any
      of its properties, in each case to secure or provide for the payment of Debt,
      other than the following Liens (“Permitted Liens”) (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 Company or any of its Subsidiaries 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 Company or any of its Subsidiaries in the ordinary
      course of business to secure the purchase price of such property or to 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 Subsidiary of the Company;
provided
      that
      such Liens were
      not created to secure the acquisition of such Person; (iv) Liens created to
      secure Debt in respect of First Mortgage Bonds; provided,
      however, that
      the principal
      amount of Debt secured by the Liens described in this clause (iv) shall not
      at
      any time exceed the depreciated book value of the property subject to such
      Liens; (v) Liens in existence on the date of this Agreement; and (vi) 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
      (v);
      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). Notwithstanding the foregoing,
      this subsection (a) shall have no force or effect if and for so long as the
      Obligations are secured by First Mortgage Bonds and/or cash collateral in an
      aggregate principal amount at least equal to the sum of (x) the Available Amount
      and (y) the aggregate outstanding principal amount of all unreimbursed Letter
      of
      Credit drawings, demand loans hereunder and Tender Advances.

     

    (b) Cash
      Collateral.
      Create or suffer to
      exist, or permit any of its Subsidiaries to create or suffer to exist, any
      lien,
      security interest, other charge or encumbrance, or any other type of
      preferential arrangement upon or with respect to its Cash and Cash Equivalents
      or marketable securities, in each case to secure or provide for the payment
      of
      Debt, in an amount in excess of $100,000,000 in the aggregate, unless,
      on
      or prior to the date thereof, the Company shall have (i) pursuant to
      documentation satisfactory to the Administrative Agent and Required Banks,
      equally and ratably secured the obligations of the Company under this agreement
      by a preferential arrangement with respect to such Cash and Cash Equivalents
      and
      marketable securities of a similar type acceptable to the Administrative Agent
      in its sole discretion, and (ii) caused the creditor or creditors, as the case
      may be, in respect of such Debt to have entered into an intercreditor agreement
      in form, scope and substance satisfactory to the Administrative Agent and the
      Required Banks. Notwithstanding the foregoing, this subsection (b) shall have
      no
      force or effect if and for so long as the Obligations are secured by First
      Mortgage Bonds and/or cash collateral in an aggregate principal amount at least
      equal to the sum of (x) the Available Amount and (y) the aggregate outstanding
      principal amount of all unreimbursed Letter of Credit drawings, demand loans
      hereunder and Tender Advances.

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    (c) Security. In
      connection with
      any Debt incurred after the date hereof by the Company or any of its
      Subsidiaries (other than refinancings of Debt of the Company or any such
      Subsidiary that is outstanding and secured in the manner described below as
      of
      the date hereof), sell or otherwise transfer, or arrange for the sale or
      transfer by any Person of, any security of any Person (including, without
      limitation, First Mortgage Bonds), which security is secured, in whole or in
      part, directly or indirectly, by any property of the Company or any of its
      Subsidiaries, in any case to secure the obligations of the Company thereunder
      or
      in respect thereof, unless,
      on
      or prior to the date thereof, the Company or such Subsidiary (as the case may
      be) shall have (i) pursuant to documentation satisfactory to the Administrative
      Agent and the Required Banks, equally and ratably secured the Obligations of
      the
      Company hereunder by a preferential arrangement with respect to, or by a
      transfer to the Administrative Agent of, such securities of a similar type
      acceptable to the Administrative Agent in its sole discretion, and (ii) caused
      the creditor or creditors, as the case may be, in respect of such Debt to have
      entered into with the Administrative Agent an intercreditor agreement in form,
      scope and substance satisfactory to the Administrative Agent and the Required
      Banks. Notwithstanding the foregoing, it is expressly understood and agreed
      that
      this subsection (c) shall: (I) not apply to the issuance by the Company of
      (A)
      First Mortgage Bonds sold or issued in exchange for cash in an amount, or other
      assets having an aggregate fair market value, in each case not less than the
      fair market value of such First Mortgage Bonds at the time of such sale or
      exchange; (B) First Mortgage Bonds issued to provide for the payment of the
      Company’s (1) reimbursement obligations to any financial institution in respect
      of any letter of credit, bond insurance policy or similar credit support that
      supports the payment of principal, interest and/or premium (if any) under
      pollution control revenue bonds issued for the benefit of the Company, (2)
      payment obligations to the trustee under any indenture pursuant to which
      pollution control revenue bonds have been issued for the benefit of the Company,
      to enable the issuer of such pollution control revenue bonds to satisfy its
      payment obligations to the holders of such pollution control revenue bonds,
      or
      (3) obligations to the holders of Notes issued by the Company; or (C) First
      Mortgage Bonds issued pursuant to a First Mortgage Bond Indenture of the Company
      to the trustee under any new mortgage bond indenture of the Company, which
      new
      indenture shall provide that the Company may not, while any mortgage bonds
      are
      outstanding under such new indenture, issue any First Mortgage Bonds under
      a
      First Mortgage Bond Indenture except to such trustee as the basis for the
      issuance of mortgage bonds thereunder described in the foregoing clauses (B)
      and
      (C) to entitle such financial institutions and the holders of such pollution
      control revenue bonds, Notes and mortgage bonds to the benefits of the Lien
      of a
      First Mortgage Bond Indenture; and (II) have no force or effect if and for
      so
      long as the Obligations are fully secured by First Mortgage Bonds and/or cash
      collateral in an aggregate principal amount at least equal to the sum of (x)
      the
      Available Amount and (y) the aggregate outstanding principal amount of all
      unreimbursed Letter of Credit drawings, demand loans hereunder and Tender
      Advances. For purposes of this subsection (c), the phrase “refinancings of Debt”
shall include, but shall not be limited to, Debt incurred after the date hereof
      pursuant to a commitment to extend credit so long as such commitment replaced
      one or more commitments to extend credit entered into prior to the date hereof
      and the new commitment to extend credit is in an aggregate principal amount
      (whether drawn or undrawn) of the Debt being refinanced.

     

    
      
        
        

      

      
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    (d)  
      Certain
      Amendments.
      Amend or modify, or
      enter into or consent to any amendment or modification of: (i) any of its
      Organizational Documents (including the provisions thereof restricting the
      payment of dividends), (ii) its accounting policies, (iii) any First Mortgage
      Bond Indenture (including the provisions thereof restricting the payment of
      dividends), or (iv) any Related Document, in each case in any manner adverse
      to
      the interests of the Administrative Agent, the Fronting Bank or the Banks in
      their reasonable judgment and, with respect to the Indenture and the Loan
      Agreement, except in compliance with Section 15.01, 15.02 and 15.03 of the
      Indenture; provided,
however,
      that any amendment
      or modification of any Related Document that assigns or otherwise transfers
      the
      Company’s rights or obligations thereunder to any other Person shall require the
      prior written consent of the Fronting Bank and all of the Banks.

     

    (e)  
      Compliance
      with ERISA.
      (i) Enter into any
“prohibited transaction” (as defined in Section 4975 of the Code, as amended,
      and in ERISA) involving any Plan which may result in any liability of the
      Company to any Person which (in the reasonable opinion of the Required Banks)
      is
      material to the financial position or operations of the Company or (ii) allow
      or
      suffer to exist any other event or condition known to the Company which results
      in any liability of the Company to the PBGC which (in the reasonable opinion
      of
      the Required Banks) is material to the financial position or operations of
      the
      Company. For purposes of this Section 5.02(d), “liability” shall not include
      termination insurance premiums payable under Section 4007 of ERISA.

     

    (f)  
      Mergers,
      Etc.
      Merge, consolidate
      or amalgamate, or liquidate, wind up or dissolve itself (or suffer any
      liquidation or dissolution), or (except as permitted by Section 5.02(g)) convey,
      sell, lease, assign, transfer or otherwise dispose of, all or substantially
      all
      of its property, business or assets, or permit any of its Subsidiaries to do
      so,
      except that:

     

    (i)
 any
      Subsidiary of
      the Company may be merged or consolidated with or into the Company (provided
      that the Company shall be the continuing or surviving corporation) or with
      or
      into any one or more wholly-owned Subsidiaries of the Company (provided
      that such
      wholly-owned Subsidiary or Subsidiaries shall be the continuing or surviving
      corporation); and 

     

    (ii)  
      any
      wholly-owned Subsidiary of the Company may sell, lease, transfer or otherwise
      dispose of any or all of its assets (upon voluntary liquidation or otherwise)
      to
      the Company or any other wholly-owned Subsidiary of the Company;

     

    provided,
      that,
      in any such case,
      after giving effect thereto: (x) no Default or Event of Default shall have
      occurred and be continuing and (y) in the case of any merger or consolidation
      to
      which the Company is a party, the corporation formed by such consolidation
      or
      into which the Company shall be merged shall assume the Company’s obligations
      under this Agreement in a written document satisfactory in form and substance
      to
      the Required Banks.

     

    
      
        
        

      

      
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    (g)  
      Sale
      of
      Assets, etc. 
 Sell,
      lease,
      transfer, enter into any sale and leaseback agreement involving or otherwise
      dispose of (including by the Company to any affiliate of the Company), or permit
      any of its Subsidiaries to sell, lease, transfer, enter into any sale and
      leaseback agreement involving or otherwise dispose of, whether in one or a
      series of transactions, more than 15% (determined at the time of each such
      sale,
      lease, transfer, agreement or disposition) of the aggregate Fixed Assets of
      the
      Company and its Subsidiaries; provided,
      however,
      that the Company
      may consummate the transactions contemplated by the Transition Plan
      Order.

     

    (h)  
      Change
      in Nature of Business. 
Have
      as its
      principal business any business other than the unregulated production,
      generation and sale of electricity to Affiliates and other Persons, all in
      compliance with all Applicable Law; and it will only conduct such a business
      in
      a manner to ensure its continued operation as an unregulated producer, generator
      and supplier of electricity and related activities. For purposes hereof,
“unregulated” shall mean unregulated by a public utility commission or similar
      agency of any State.

     

    (i)  
      Investments,
      Loans, Advances, Guarantees and Acquisitions.
       Purchase,
      hold
      or acquire (including, without limitation, pursuant to any merger) any capital
      stock, evidences of indebtedness or other securities (including, without
      limitation, any option, warrant or other right to acquire any of the foregoing)
      of, make or permit to exist any loans or advances to, Guarantee any obligations
      of, or make or permit to exist any investment or any other interest in, any
      other Person, or purchase or otherwise acquire (in one transaction or a series
      of transactions (including, without limitation, pursuant to any merger)) any
      assets of any other Person constituting a business unit, or permit any of its
      Subsidiaries to do so, except:

     

    (i)   
      Permitted
      Investments;

     

    (ii)  
      investments
      and
      Guarantees existing on the date hereof and set forth in Schedule
      5.02(i);

     

    (iii)  investments
      made by
      the Company in the equity securities or other ownership interests of any of
      its
      Subsidiaries and made by any such Subsidiary in the equity securities or other
      ownership interests of any other such Subsidiary;

     

    (iv)  
      loans
      or advances made by the Company to any of its Affiliates and made by any such
      Subsidiary to the Company or any other Affiliate of the Company, in each case
      in
      the ordinary course of business;

     

    (v)   
      acquisitions
      made by
      the Company from any of its Subsidiaries or made by any such Subsidiary from
      the
      Company or any other such Subsidiary;

     

    
      
        
        

      

      
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    (vi)  
      any
      transaction permitted by Section 5.02(f); and

     

    (vii)  if
      at the time
      thereof and immediately after giving effect thereto no Default or Event of
      Default shall have occurred and be continuing, other investments, loans,
      advances, Guarantees and acquisitions, provided
      that the sum of (A)
      the aggregate consideration paid by the Company or any of its Subsidiaries
      in
      connection with all such acquisitions, (B) the aggregate amount of all such
      other investments, loans and advances outstanding and (C) the amount of
      obligations and liabilities outstanding in the aggregate that is Guaranteed
      pursuant to all such other Guarantees, shall not exceed $5,000,000 at any
      time.

     

    (j)  
      Restricted
      Payments.
       If
      any Default
      or Event of Default has occurred and is continuing, declare or make, or agree
      to
      pay for or make, directly or indirectly, any Restricted Payment, or permit
      any
      of its Subsidiaries to do so, except
      that (i) the
      Company may declare and pay dividends or other distributions with respect to
      its
      equity interests payable solely in additional equity interests, and (ii) any
      Subsidiary of the Company may declare and pay dividends or other distributions
      with respect to its equity interests to the Company or any Subsidiary of the
      Company.

     

    (k)  No
      Action on Bonds.
      The Company shall
      not cause, nor shall it consent to, or instruct any other Person to cause,
      (i)
      any redemption or defeasance of all or any portion of the Bonds pursuant to
      the
      Indenture, (ii) any termination of the Letter of Credit or (iii) any conversion
      of the Interest Rate Mode applicable to the Bonds.

     

    SECTION
      5.03.  Financial Covenant. 
      So
      long as a drawing is available under the Letter of Credit or the Fronting Bank
      or any Bank shall have any Commitment hereunder or the Company shall have any
      obligation to pay any amount to the Banks hereunder or any Guarantor shall
      have
      any obligations under any Guaranty Agreement:

     

    (a)  
      Debt
      to
      Capitalization Ratio. 
The
      Company
      shall 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
      Company shall be required to comply with this financial covenant only so long
      as
      FirstEnergy’s “Applicable Percentage”, and, at any time the FES Guaranty
      Agreement shall be in effect, FES’ “Applicable Percentage”, in each case under
      (and as defined in) such Guarantor’s Guaranty Agreement, shall be
      0%.

     

    ARTICLE
      VI

     

    EVENTS
      OF
      DEFAULT

     

    SECTION
      6.01.  Events of Default.  The
      occurrence of
      any of the following events (whether voluntary or involuntary) shall be an
      “Event
      of
      Default”
      hereunder:

     

    (a)  
      Any
      Credit Party shall fail to pay any amount of principal, interest, fees or other
      amounts payable under any Credit Document when due; or

     

    (b)  
      Any
      representation or warranty made, or deemed made, by the Company herein or by
      the
      Company (or any of its officers) in connection with this Agreement, any other
      Credit Document or any of the Related Documents or any document delivered
      pursuant hereto or thereto shall prove to have been incorrect in any material
      respect when made or deemed made; or

     

    
      
        
        

      

      
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    (c)  
      The
      Company shall fail to perform or observe any term, covenant or agreement
      contained in clause (i) of Section 5.01(a) or Section 5.02 or Section
      5.03;

     

    (d)  
      The
      Company shall fail to perform or observe any other term, covenant or agreement
      contained in this Agreement or any material term, covenant or agreement
      contained in any of the Related Documents on its part to be performed or
      observed and, in any such case, such failure shall continue for 30 days after
      written notice thereof from the Administrative Agent to the Company;
      or

     

    (e)  
      The
      Company or any of its Subsidiaries shall fail to make when due (whether by
      scheduled maturity, required prepayment, acceleration, demand or otherwise)
      any
      payment on any Debt (other than the Debt represented by this Agreement or the
      Bonds) the aggregate principal amount of which is greater than (x) at any time
      the “Applicable Percentage” under (and as defined in) any Guaranty Agreement
      shall be 100%, $50,000,000 or (y) at any other time, $20,000,000, or to make
      when due any payment of any interest or premium thereon, 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 or condition shall
      occur
      and shall continue after the applicable grace period, if any, specified in
      any
      agreement or instrument relating to any such Debt, if the effect thereof is
      to
      accelerate, or to permit the acceleration of (other than by a specified
      mandatory redemption provision in connection with pollution control bonds
      unrelated to any default or event of default with respect thereto) the maturity
      of any such Debt; or any such Debt shall be declared due and payable, or
      required to be prepaid (other than by a regularly scheduled required prepayment
      or a specified mandatory redemption provision in connection with pollution
      control bonds unrelated to any default or event of default with respect thereof)
      prior to the stated maturity thereof; or

     

    (f)  
      (i)  
The
      Company or any Subsidiary of the Company shall (A) apply for or consent to
      the
      appointment of a receiver, trustee, liquidator or custodian or the like of
      itself or of its property, (B) admit in writing its inability to pay its debts
      generally as they become due, (C) make a general assignment for the benefit
      of
      creditors, (D) be adjudicated a bankrupt or insolvent, or (E) commence a
      voluntary case under the Bankruptcy Code or file a voluntary petition or answer
      seeking reorganization, an arrangement with creditors or any order for relief
      or
      seeking to take advantage of any insolvency law or file an answer admitting
      the
      material allegations of a petition filed against it in any bankruptcy,
      reorganization or insolvency proceeding; or corporate action shall be taken
      by
      it for the purpose of effecting any of the foregoing, or (ii) if, without the
      application, approval or consent of the Company or such Subsidiary, a proceeding
      shall be instituted in any court of competent jurisdiction, seeking in respect
      of the Company or such Subsidiary an adjudication in bankruptcy, reorganization,
      dissolution, winding up, liquidation, a composition or arrangement with
      creditors, a readjustment of debts, the appointment of a trustee, receiver,
      liquidator or custodian or the like of the Company or such Subsidiary or of
      all
      or any substantial part of its assets, or other like relief in respect thereof
      under any bankruptcy or insolvency law and if such proceeding is being contested
      by the Company or such Subsidiary in good faith, the same shall (x) result
      in
      the entry of an order for relief of any such adjudication or appointment or
      (y)
      continue undismissed, or pending and unstayed, for any period of sixty (60)
      consecutive days; or

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    (g)  
      (x) 
at
      any
      time the “Applicable Percentage” under (and as defined in) any Guaranty
      Agreement shall be 100%, 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 Company or any of its
      Subsidiaries 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 (y) at any other time, any judgment or order for the payment of
      money
      exceeding applicable insurance coverage (if the insurance company shall have
      admitted liability) by more than $10,000,000 (or, if there is no applicable
      insurance coverage, exceeding $20,000,000) shall be rendered against the Company
      or any of its Subsidiaries and either (i) enforcement proceedings shall have
      been commenced by any creditor upon such judgment or order or (ii) there shall
      be any period of 30 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 FirstEnergy by the Administrative Agent
      or any Bank, (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 

     

    (i)  
      FirstEnergy
      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 

     

    (j)  
      Any
      “Event of Default” under and as defined in the Indenture shall have occurred and
      be continuing; or

     

    (k)  
      Any
      approval or order of any Governmental Authority related to any Credit Document
      or any Related Document shall be (i) rescinded, revoked or set aside or
      otherwise cease to remain in full force and effect, or (ii) modified in
any
      manner that, in the opinion of the Required Banks, could reasonably be expected
      to have a Material Adverse Effect;
      or

     

    (l)  
      Any
      change in Applicable Law or any Governmental Action shall occur which has the
      effect of making the transactions contemplated by the Credit Documents or the
      Related Documents unauthorized, illegal or otherwise contrary to Applicable
      Law;
      or

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    (m)  
      Any
      provision of this Agreement, or any material provision of any Related Document
      to which the Company is a party, shall at any time for any reason cease to
      be
      valid and binding on the Company other than in accordance with the terms of
      such
      Related Document, or shall be declared to be null and void, or the validity
      or
      enforceability thereof shall be denied or contested by the Company, or a
      proceeding shall be commenced by any Governmental Authority having jurisdiction
      over the Company seeking to establish the invalidity or unenforceability thereof
      and the Company shall fail diligently or successfully to defend such proceeding;
      or

     

    (n) The
      Custodian
      Agreement after delivery under Article III hereof shall for any reason, except
      to the extent permitted by the terms thereof, fail or cease to create valid
      and
      perfected Liens (to the extent purported to be granted by the Custodian
      Agreement and subject to the exceptions permitted thereunder) in any of the
      collateral purported to be covered thereby, provided,
      that
      such failure or
      cessation relating to any non-material portion of such collateral shall not
      constitute an Event of Default hereunder unless the same shall not have been
      corrected within 30 days after the Company becomes aware thereof;
      or

     

    (o)  
      A
      Change in Control (Company) shall occur; or

     

    (p)  
      Any
      “Guarantor Event of Default” under (and as defined in) Section 7.5(e) of any
      Guaranty Agreement shall occur; or

     

    (q)  
      Any
      other “Guarantor Event of Default” under (and as defined in) any Guaranty
      Agreement shall occur.

     

    SECTION
      6.02.  Upon an Event of Default.  If
      any Event of
      Default shall have occurred and be continuing, the Fronting Bank (in the case
      of
      clauses (i), (ii) and (iv) below) and the Administrative Agent may, or if
      requested by the Required Banks, the Administrative Agent shall (i) by notice
      to
      the Company, declare the obligation of the Fronting Bank to issue the Letter
      of
      Credit to be terminated, whereupon the same shall forthwith terminate, (ii)
      give
      notice (or, in the case of the Administrative Agent, cause the Fronting Bank
      to
      give notice) to the Trustee (A) directing a mandatory purchase of the Bonds
      as
      provided in Section 5.01(b)(iii) of the Indenture and/or (B) as provided in
      Section 11.02 of the Indenture to declare the principal of all Pledged Bonds
      then outstanding to be immediately due and payable, (iii) declare the principal
      amount of all demand loans and Tender Advances hereunder, all interest thereon
      and all other amounts payable hereunder or under any other Credit Document
      or in
      respect hereof or thereof to be forthwith due and payable, whereupon all such
      principal, interest and all such other 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 the Company, and (iv) in
      addition to other rights and remedies provided for herein or in the Custodian
      Agreement or otherwise available to any of them, as holder of the Pledged Bonds
      or otherwise, exercise all the rights and remedies of a secured party on default
      under the Uniform Commercial Code in effect in the State of New York at that
      time; provided
      that,
if
      an Event of Default described in Section 6.01(f) shall have occurred with
      respect to the Company then or an Event of Default described in Section 6.01(p)
      shall have occurred with respect to a Guarantor, automatically, (x) the
      obligation of the Fronting Bank hereunder to issue the Letter of Credit shall
      terminate, (y) any demand loans and Tender Advances, all interest thereon and
      all other amounts payable hereunder or under any other Credit Document or in
      respect hereof or thereof 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 the Company and (z) the Fronting Bank shall give
      the
      notice to the Trustee referred to in clauses (ii) and (iv) above.

     

    
      
        
        

      

      
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    ARTICLE
      VII

     

    [RESERVED]

     

    ARTICLE
      VIII

     

    THE
      ADMINISTRATIVE AGENT AND THE FRONTING BANK

     

    SECTION
      8.01.  Appointment.  Each
      Bank and the
      Fronting Bank hereby irrevocably designates and appoints Barclays as the
      Administrative Agent of such Bank and of the Fronting Bank under this Agreement,
      the other Credit Documents and the other Related Documents, and each such Bank
      and the Fronting Bank irrevocably authorizes Barclays, as the Administrative
      Agent for such Bank and for the Fronting Bank, to take such action on its behalf
      under the provisions of this Agreement, the other Credit Documents and the
      other
      Related Documents and to exercise such powers and perform such duties as are
      expressly delegated to the Administrative Agent by the terms of this Agreement,
      the other Credit Documents and the other Related Documents, together with such
      other powers as are reasonably incidental thereto. Notwithstanding any provision
      to the contrary elsewhere in any Credit Document, the Administrative Agent
      shall
      not have any duties or responsibilities, except those expressly set forth herein
      and in the Related Documents, or any fiduciary relationship with any Bank,
      and
      no implied covenants, functions, responsibilities, duties, obligations or
      liabilities shall be read into this Agreement, any other Credit Document or
      any
      other Related Document or otherwise exist against the Administrative
      Agent.

     

    SECTION
      8.02.  Delegation of Duties. 
      The
      Administrative
      Agent may execute any of its duties under this Agreement, the other Credit
      Documents and the other Related Documents by or through agents or
      attorneys-in-fact and shall be entitled to advice of counsel concerning all
      matters pertaining to such duties. The Administrative Agent shall not be
      responsible for the negligence or misconduct of any agents or attorneys-in-fact
      selected by it with reasonable care.

     

    SECTION
      8.03.  Exculpatory Provisions.  Neither
      the
      Administrative Agent nor any of its officers, directors, employees, agents,
      attorneys-in-fact or affiliates shall be (i) liable for any action lawfully
      taken or omitted to be taken by it or such Person under or in connection with
      this Agreement, any other Credit Document or any other Related Document (except
      in the case of gross negligence or willful misconduct as determined by a court
      of competent jurisdiction) or (ii) responsible in any manner to any of the
      Banks
      for any recitals, statements, representations or warranties made by any Credit
      Party or any officer thereof contained in this Agreement, any other Credit
      Document or any Related Document or in any certificate, report, statement or
      other document referred to or provided for in, or received by the Administrative
      Agent under or in connection with, this Agreement, any other Credit Document
      or
      any Related Document or for the value, validity, effectiveness, genuineness,
      enforceability or sufficiency of this Agreement, the Letter of Credit, any
      other
      Credit Document or any Related Document or for any failure of any Credit Party
      to perform its obligations hereunder or thereunder. The Administrative Agent
      shall not be under any obligation to any Bank to ascertain or to inquire as
      to
      the observance or performance of any of the agreements contained in, or
      conditions of, this Agreement, any other Credit Document or any Related
      Document, or to inspect the properties, books or records of the Credit
      Parties.

     

    
      
        
        

      

      
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    SECTION
      8.04.  Reliance by Administrative Agent. 
      The
      Administrative
      Agent shall be entitled to rely, and shall be fully protected in relying, upon
      any writing, resolution, notice, consent, certificate, affidavit, letter,
      cablegram, telegram, telecopy, telex or teletype message, statement, order
      or
      other document or conversation believed by it to be genuine and correct and
      to
      have been signed, sent or made by the proper Person or Persons and upon advice
      and statements of legal counsel (including, without limitation, counsel to
      the
      Credit Parties), independent accountants and other experts selected by the
      Administrative Agent. The Administrative Agent may deem and treat the payee
      of
      any evidence of indebtedness in respect of any demand loans or other
      indebtedness hereunder as the owner thereof for all purposes unless a written
      notice of assignment, negotiation or transfer thereof shall have been filed
      with
      the Administrative Agent. The Administrative Agent shall be fully justified
      in
      failing or refusing to take any action under this Agreement, any other Credit
      Documents or any Related Document unless it shall first receive such advice
      or
      concurrence of the Required Banks (unless all of the Banks’ action is required
      hereunder) as it deems appropriate or it shall first be indemnified to its
      satisfaction by the Banks against any and all liability and expense which may
      be
      incurred by it by reason of taking or continuing to take any such action. The
      Administrative Agent shall in all cases be fully protected in acting, or in
      refraining from acting, under this Agreement, the other Credit Documents and
      the
      Related Documents in accordance with a request of the Required Banks (unless
      all
      of the Banks’ action is required hereunder), and such request and any action
      taken or failure to act pursuant thereto shall be binding upon all the
      Banks.

     

    SECTION
      8.05.  Notice of Default. 
      The
      Administrative
      Agent shall not be deemed to have knowledge or notice of the occurrence of
      any
      Event of Default hereunder unless the Administrative Agent has received notice
      from a Bank or the Credit Parties referring to this Agreement, describing such
      Event of Default and stating that such notice is a “notice of default”. In the
      event that the Administrative Agent receives such a notice, the Administrative
      Agent shall give notice thereof to the Banks. The Administrative Agent shall
      take such action with respect to such Event of Default as shall be reasonably
      directed by the Required Banks; provided
      that unless and
      until the Administrative Agent shall have received such directions, the
      Administrative Agent may (but shall not be obligated to) take such action,
      or
      refrain from taking such action, with respect to such Event of Default as it
      shall deem advisable in the best interests of the Banks.

     

    SECTION
      8.06.  Non-Reliance on Administrative Agent and Other
      Banks. 
Each
      Bank
      expressly acknowledges that neither the Administrative Agent nor any of its
      officers, directors, employees, agents, attorneys-in-fact or affiliates has
      made
      any representations or warranties to it and that no act by the Administrative
      Agent hereinafter taken, including any review of the affairs of the Credit
      Parties, shall be deemed to constitute any representation or warranty by the
      Administrative Agent to any Bank. Each Bank represents to the Administrative
      Agent that it has, independently and without reliance upon the Administrative
      Agent or any other Bank, and based on such documents and information as it
      has
      deemed appropriate, made its own appraisal of and investigation into the
      business, operations, property, financial and other condition and
      creditworthiness of the Credit Parties and made its own decision to enter into
      this Agreement. Each Bank also represents that it will, independently and
      without reliance upon the Administrative Agent or any other Bank, and based
      on
      such documents and information as it shall deem appropriate at the time,
      continue to make its own credit analysis, appraisals and decisions in taking
      or
      not taking action under this Agreement, the other Credit Documents and the
      Related Documents and to make such investigation as it deems necessary to inform
      itself as to the business, operations, property, financial and other condition
      and creditworthiness of the Credit Parties. Except for notices, reports and
      other documents expressly required to be furnished to the Banks by the
      Administrative Agent hereunder, the Administrative Agent shall not have any
      duty
      or responsibility to provide any Bank with any credit or other information
      concerning the business, operations, property, condition (financial or
      otherwise), prospects or creditworthiness of the Credit Parties which may come
      into the possession of the Administrative Agent or any of its officers,
      directors, employees, agents, attorneys-in-fact or affiliates.

     

    
      
        
        

      

      
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    SECTION
      8.07.  Indemnification. 
The
      Banks
      agree to indemnify the Administrative Agent in its capacity as such (to the
      extent not reimbursed by the Credit Parties and without limiting the obligation
      of the Credit Parties to do so), ratably according to the respective amounts
      of
      their Commitments, from and against any and all liabilities, obligations,
      losses, damages, penalties, actions, judgments, suits, costs, expenses or
      disbursements of any kind whatsoever which may at any time (including, without
      limitation, at any time following the termination of the Letter of Credit)
      be
      imposed on, incurred by or asserted against the Administrative Agent in any
      way
      relating to or arising out of this Agreement, the Letter of Credit, any other
      Credit Document, any of the Related Documents or any documents contemplated
      by
      or referred to herein or therein or the transactions contemplated hereby or
      thereby or any action taken or omitted by the Administrative Agent under or
      in
      connection with any of the foregoing; provided
      that
no
      Bank shall be liable for the payment of 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. The agreements in this Section shall survive
      the termination of the Letter of Credit and the payment of all amounts payable
      hereunder or under any other Credit Document.

     

    SECTION
      8.08.  Administrative Agent in Its Individual Capacity.
 The
      Administrative
      Agent and its affiliates may make loans to, accept deposits from and generally
      engage in any kind of business with the Credit Parties as though the
      Administrative Agent were not the Administrative Agent hereunder. With respect
      to its interest in the demand loans and any other amounts owed to it hereunder,
      the Administrative Agent shall have the same rights and powers under the Credit
      Documents as any Bank and may exercise the same as though it were not the
      Administrative Agent, and the terms “Bank” and “Banks” shall include the
      Administrative Agent in its individual capacity.

     

    SECTION
      8.09.  Successor Administrative Agent. 
The
      Administrative Agent may resign as Administrative Agent upon ten days’ notice to
      the Banks. If the Administrative Agent shall resign as Administrative Agent
      under the Credit Documents, then the Required Banks, with the consent of the
      Company, shall appoint from among the Banks a successor agent for the Banks,
      whereupon such successor agent shall succeed to the rights, powers and duties
      of
      the Administrative Agent, and the term “Administrative Agent” shall mean such
      successor agent effective upon its appointment, and the former Administrative
      Agent’s rights, powers and duties as Administrative Agent shall be terminated,
      without any other or further act or deed on the part of such former
      Administrative Agent or any of the parties to this Agreement. After any retiring
      Administrative Agent’s resignation as Administrative Agent, the provisions of
      this Section shall inure to its benefit as to any actions taken or omitted
      to be
      taken by it while it was Administrative Agent under the Credit
      Documents.

     

    
      
        
        

      

      
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    SECTION
      8.10.  Fronting Bank.
       Each
      Bank hereby
      acknowledges that the provisions of this Article VIII shall apply to the
      Fronting Bank in its capacity as such, in the same manner as such provisions
      are
      expressly stated to apply to the Administrative Agent.

     

    SECTION
      8.11.  Notices; Actions Under Related Documents. 
      All
      notices received
      by the Fronting Bank pursuant to this Agreement, any other Credit Document
      or
      any Related Document shall be promptly delivered by the receiving party to
      the
      Administrative Agent, for distribution to the Banks, and any notices, reports
      or
      other documents received by the Administrative Agent pursuant to this Agreement
      shall be promptly delivered to the Fronting Bank and the Banks. The Fronting
      Bank hereby agrees not to amend or waive any provision or consent to the
      amendment or waiver of any Related Document without the consent of the Required
      Banks (or, to the extent required pursuant to Section 9.01, all of the
      Banks).

     

    ARTICLE
      IX

     

    MISCELLANEOUS

     

    SECTION
      9.01.  Amendments, Etc.
       No
      amendment
      or waiver of any provision of any Credit Document, nor consent to any departure
      by any Credit Party 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 such waiver
      and no such amendment, supplement or modification shall (a) extend the Stated
      Expiration Date or the maturity of any Tender Advance or unreimbursed drawing,
      or reduce the rate or extend the time of payment of interest in respect thereof,
      or reduce any fee payable to any Bank hereunder or extend the time for the
      payment thereof or change the amount of any Bank’s Commitment, in each case
      without the written consent of all the Banks, (b) amend, modify or waive any
      provision of this Section 9.01 or reduce the percentage specified in the
      definition of Required Banks, or consent to the assignment or transfer by any
      Credit Party of any of its rights and obligations under any Credit Document,
      in
      each case without the written consent of all the Banks, (c) amend, modify or
      waive any provision of Article VIII without the written consent of the then
      Administrative Agent and Fronting Bank, (d) waive, modify or eliminate any
      of
      the conditions precedent specified in Article III, in each case without the
      written consent of all the Banks, (e) forgive principal, interest, fees or
      other
      amounts payable hereunder, in each case without the written consent of all
      the
      Banks, (f) release any Guarantor from its obligations under the Guaranty
      Agreement to which it is a party without the written consent of all the Banks,
      or (g) waive any requirement for the release of collateral, in each case without
      the written consent of all the Banks.

     

    
      
        
        

      

      
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    SECTION
      9.02.  Notices, Etc. 
All
      notices
      and other communications provided for hereunder or under any other Credit
      Document shall be in writing (including telegraphic communication) and mailed,
      telecopied, telegraphed or delivered as follows:

     

    The
      Company or the
      Guarantors:

     

    FirstEnergy
      Corp.

    FirstEnergy
      Nuclear
      Generation Corp.

    76
      South Main Street

    Akron,
      Ohio
      44308

    Attention:
      Treasurer

    Telecopy
      No.: (330)
      384-3772

     

    The
      Administrative
      Agent or the Fronting Bank:

     

    Barclays
      Bank PLC


    200
      Park Avenue, 4th
      Floor

    New
      York, New York 10166

    Attention:
      David E.
      Barton

    Telecopy
      No.: (212)
      412-7511

     

    with
      a copy
      to:

     

    Barclays
      Bank PLC


    c/o
      Barclays Capital Services, LLC

    200
      Cedar Knolls Road

    Whippany,
      NJ
      07981

    Attention:
      Dawn
      Townsend

    Telecopy
      No.: (973)
      576-3017

     

    and
      if to any Bank,
      at its address or telecopy number set forth on Schedule 1 hereto; or, as to
      each
      party or 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, be effective three days after being deposited in the mails or when
      sent
      by telecopy or telex or delivered to the telegraph company, respectively,
      addressed as aforesaid.

     

    SECTION
      9.03.  No Waiver; Remedies. 
      No failure
      on the part
      of the Administrative Agent, the Fronting Bank or any Bank to exercise, and
      no
      delay in exercising, any right hereunder or under any other Credit Document
      shall operate as a waiver thereof; nor shall any single or partial exercise
      of
      any right hereunder or thereunder 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
      9.04.  Set-off. 
      (a)
      Upon the
      occurrence and during the continuance of any Event of Default, each 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) at any time held and other indebtedness
      at
      any time owing by such Bank to or for the credit or the account of any Credit
      Party against any and all of the obligations of the Credit Parties now or
      hereafter existing under any Credit Document, irrespective of whether or not
      such Bank shall have made any demand hereunder and although such obligations
      may
      be contingent or unmatured.

     

    
      
        
        

      

      
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    (b)  
      If
      any
      Bank (a “benefited Bank”) shall
      at any time
      receive any payment of all or part of the demand loans or other obligations
      of
      any Credit Party to it under any Credit Document (such Bank’s “Credit
      Party Obligations”),
      or interest
      thereon, or receive any collateral in respect thereof (whether voluntarily
      or
      involuntarily, by set-off, pursuant to events or proceedings of the nature
      referred to in Section 6.01(f), or otherwise), in a greater proportion than
      any
      such payment to or collateral received by any other Bank, if any, in respect
      of
      such other Bank’s Credit Party Obligations, or interest thereon, such benefited
      Bank shall purchase for cash from the other Banks such portion of each such
      other Bank’s Credit Party Obligations, or shall provide such other Banks with
      the benefits of any such collateral, or the proceeds thereof, as shall be
      necessary to cause such benefited Bank to share the excess payment or benefits
      of such collateral or proceeds ratably with each of the Banks; provided,
      however,
      that if all or any
      portion of such excess payment or benefits is thereafter recovered from such
      benefited Bank, such purchase shall be rescinded, and the purchase price and
      benefits returned, to the extent of such recovery, but without interest. The
      Company agrees that each Bank so purchasing a portion of another Bank’s Credit
      Party Obligations may exercise all rights of payment (including, without
      limitation, rights of set-off) with respect to such portion as fully as if
      such
      Bank were the direct holder of such portion.

     

    (c)  
      Each
      Bank agrees promptly to notify the Credit Parties after any such set-off and
      application referred to in subsection (a) above; provided
      that the failure to
      give such notice shall not affect the validity of such set-off and application.
      The rights of each Bank under this Section 9.04 are in addition to other rights
      and remedies (including, without limitation, other rights of set-off) which
      each
      Bank may have.

     

    SECTION
      9.05.  Indemnification. 
      The
      Company hereby
      indemnifies and holds the Fronting Bank, the Administrative Agent and each
      Bank
      harmless from and against any and all claims, damages, losses, liabilities,
      costs and expenses which such party may incur or which may be claimed against
      such party by any Person:

     

    (a)  
      by
      reason of any inaccuracy or alleged inaccuracy in any material respect, or
      any
      untrue statement or alleged untrue statement of any material fact, contained
      in
      the Official Statement or any amendment or supplement thereto, except to the
      extent contained in or arising from information in the Official Statement (or
      any amendment or supplement thereto) supplied in writing by and describing
      the
      Fronting Bank; or by reason of the omission or alleged omission to state therein
      a material fact necessary to make such statements, in the light of the
      circumstances under which they were made, not misleading; or

     

    (b)  
      by
      reason of or in connection with the execution, delivery or performance of this
      Agreement, the other Credit Documents or the Related Documents, or any
      transaction contemplated by this Agreement, the other Credit Documents or the
      Related Documents, other than as specified in subsection (c) below;
      or

     

    
      
        
        

      

      
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    (c)  
      by
      reason of or in connection with the execution and delivery or transfer of,
      or
      payment or failure to make payment under, the Letter of Credit; provided,
      however, that
      the Company
      shall not be required to indemnify any such party pursuant to this Section
      9.05(c) for any claims, damages, losses, liabilities, costs or expenses to
      the
      extent caused by (i) the Fronting Bank’s willful misconduct or gross negligence
      in determining whether documents presented under the Letter of Credit comply
      with terms of the Letter of Credit or (ii) the Fronting Bank’s willful or
      grossly negligent failure to make lawful payment under the Letter of Credit
      after the presentation to it by the Trustee or the Tender Agent under the
      Indenture of a certificate strictly complying with the terms and conditions
      of
      the Letter of Credit.

     

    Nothing
      in this
      Section 9.05 is intended to limit the Company’s obligations contained in Article
      II. Without prejudice to the survival of any other obligation of the Credit
      Parties hereunder or under any other Credit Document, the indemnities and
      obligations of the Credit Parties contained in this Section 9.05 and under
      the
      Guaranty Agreements shall survive the payment in full of amounts payable
      pursuant to Article II and the termination of the Letter of Credit.

     

    SECTION
      9.06.  Liability of the Banks. 
      Each
      Credit Party
      assumes all risks of the acts or omissions of the Trustee, the Tender Agent,
      the
      Paying Agent and any other beneficiary or transferee of the Letter of Credit
      with respect to its use of the Letter of Credit. None of the Fronting Bank,
      the
      Administrative Agent, the Banks nor any of their respective officers or
      directors shall be liable or responsible for: (a) the use which may be made
      of
      the Letter of Credit or any acts or omissions of the Trustee, the Tender Agent,
      the Paying Agent and any other beneficiary or transferee in connection
      therewith; (b) the validity, sufficiency or genuineness of documents, or of
      any
      endorsement thereon, even if such documents should prove to be in any or all
      respects invalid, insufficient, fraudulent or forged; (c) payment by the
      Fronting Bank against presentation of documents which do not comply with the
      terms of the Letter of Credit, including failure of any documents to bear any
      reference or adequate reference to the Letter of Credit; or (d) any other
      circumstances whatsoever in making or failing to make payment under the Letter
      of Credit, except that the Company shall have a claim against the Fronting
      Bank
      and the Fronting Bank shall be liable to the Company, to the extent of any
      direct, as opposed to consequential, damages suffered by the Company which
      the
      Company proves were caused by (i) the Fronting Bank’s willful misconduct or
      gross negligence in determining whether documents presented under the Letter
      of
      Credit are genuine or comply with the terms of the Letter of Credit or (ii)
      the
      Fronting Bank’s willful or grossly negligent failure, as determined by a court
      of competent jurisdiction, to make lawful payment under the Letter of Credit
      after the presentation to it by the Trustee or the Paying Agent under the
      Indenture of a certificate strictly complying with the terms and conditions
      of
      the Letter of Credit. In furtherance and not in limitation of the foregoing,
      the
      Fronting Bank may accept original or facsimile (including telecopy) certificates
      presented under the Letter of Credit that appear on their face to be in order,
      without responsibility for further investigation, regardless of any notice
      or
      information to the contrary.

     

    
      
        
        

      

      
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    SECTION
      9.07.  Costs, Expenses and Taxes.  The
      Company agrees
      to pay on demand all costs and expenses in connection with the preparation,
      issuance, delivery, filing, recording, and administration of this Agreement,
      the
      Letter of Credit, the other Credit Documents and any other documents which
      may
      be delivered in connection with the Credit Documents, including, without
      limitation, the reasonable fees and out-of-pocket expenses of counsel for the
      Administrative Agent and the Fronting Bank incurred in connection with the
      preparation and negotiation of this Agreement, the Letter of Credit, the other
      Credit Documents and any document delivered in connection therewith and all
      costs and expenses incurred by the Administrative Agent (and, in the case of
      clause (iii) or (iv) below, any Bank) (including reasonable fees and
      out-of-pocket expenses of counsel) in connection with (i) the transfer, drawing
      upon, change in terms, maintenance, renewal or cancellation of the Letter of
      Credit, (ii) any and all amounts which the Administrative Agent or any Bank
      has
      paid relative to the Administrative Agent’s or such Bank’s curing of any Event
      of Default resulting from the acts or omissions of any Credit Party under this
      Agreement, any other Credit Document or any Related Document, (iii) the
      enforcement of, or protection of rights under, this Agreement, any other Credit
      Document or any Related Document (whether through negotiations, legal
      proceedings or otherwise), (iv) any action or proceeding relating to a court
      order, injunction, or other process or decree restraining or seeking to restrain
      the Fronting Bank from paying any amount under the Letter of Credit or (v)
      any
      waivers or consents or amendments to or in respect of this Agreement, the Letter
      of Credit or any other Credit Document requested by any Credit Party. In
      addition, the Company shall pay any and all stamp and other taxes and fees
      payable or determined to be payable in connection with the execution, delivery,
      filing and recording of this Agreement, the Letter of Credit, any other Credit
      Documents or any of such other documents (“Other
      Taxes”),
      and agrees to
      save the Fronting Bank, the Administrative Agent and the Banks harmless from
      and
      against any and all liabilities with respect to or resulting from any delay
      in
      paying or omission to pay such Other Taxes.

     

    SECTION
      9.08.  Binding Effect. 
This
      Agreement shall become effective when it shall have been executed and delivered
      by the Company and the Fronting Bank, the Administrative Agent and the Banks
      and
      thereafter shall (a) be binding upon the Company and its respective successors
      and assigns, and (b) inure to the benefit of and be enforceable by the Banks
      and
      each of their respective successors, transferees and assigns; provided
      that,
the
      Company may not
      assign all or any part of its rights or obligations under any Credit Document
      without the prior written consent of the Banks.

     

    SECTION
      9.09.  Assignments and Participation.  (a)
 Each
      Bank
      may assign to one or more banks, financial institutions or other entities all
      or
      a portion of its rights and obligations under this Agreement, the other Credit
      Documents and the Related Documents (including, without limitation, all or
      a
      portion of its Commitment and the Tender Advances and demand loans owing to
      it);
provided,
      however, that
      (i) the Company
      (unless an Event of Default shall have occurred and be continuing) and the
      Fronting Bank shall have consented to such assignment (which consent, in the
      case of the Company, shall not be unreasonably withheld or delayed and, in
      the
      case of the Fronting Bank, shall be in its sole and absolute discretion) by
      signing the Assignment and Acceptance referred to in clause (iii) below, (ii)
      each such assignment shall be in a minimum amount of $5,000,000 and be of a
      constant, and not a varying, percentage of all of the assigning Bank’s rights
      and obligations under this Agreement, the other Credit Documents and the Related
      Documents and (iii) the parties to each such assignment shall execute and
      deliver to the Administrative Agent, for its acceptance and recording in the
      Register (as defined in Section 9.09(c)), an Assignment and Acceptance, together
      with a processing and recordation fee of $3,500, payable by the assigning Bank
      or the assignee, as agreed upon by such parties. 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 Bank hereunder and (y) the Bank 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
      obligations under this Agreement (and, in the case of an Assignment and
      Acceptance covering all or the remaining portion of an assigning Bank’s rights
      and obligations under this Agreement, such Bank shall cease to be a party
      hereto). Notwithstanding anything to the contrary contained in this Agreement,
      any Bank may at any time assign all or any portion of the demand loans owing
      to
      it to any affiliate of such Bank. No such assignment referred to in the
      preceding sentence, other than to an affiliate of such Bank consented to by
      the
      Company (such consent not to be unreasonably withheld or delayed), shall release
      the assigning Bank from its obligations hereunder. Nothing contained in this
      Section 9.09 shall be construed to relieve the Fronting Bank of any of its
      obligations under the Letter of Credit.

     

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

     

    (b)  
      By
      executing and delivering an Assignment and Acceptance, the Bank 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 Bank 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,
      any
      other Credit Document or any Related Document or the execution, legality,
      validity, enforceability, genuineness, sufficiency or value of this Agreement,
      any other Credit Document or any Related Document or any other instrument or
      document furnished pursuant hereto; (ii) such assigning Bank makes no
      representation or warranty and assumes no responsibility with respect to the
      financial condition of any Credit Party or the performance or observance by
      any
      Credit Party of any of its obligations under this Agreement, any other Credit
      Document or any Related Document or any other instrument or document furnished
      pursuant hereto or thereto; (iii) such assignee confirms that it has received
      a
      copy of each Credit Document, together with copies of the financial statements
      referred to in Section 6(g) of the Guaranty Agreements and such other documents
      and information as it has deemed appropriate to make its own credit analysis
      and
      decision to enter into such Assignment and Acceptance; (iv) such assignee will,
      independently and without reliance upon the Administrative Agent, such assigning
      Bank or any other Bank 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 Documents; (v) such assignee
      appoints and authorizes the Administrative Agent to take such action as agent
      on
      its behalf and to exercise such powers under the Credit Documents as are
      delegated to the Administrative Agent by the terms hereof, together with such
      powers as are reasonably incidental thereto; and (vi) such assignee agrees
      that
      it will perform in accordance with their terms all of the obligations which
      by
      the terms of the Credit Documents are required to be performed by it as a
      Bank.

     

    (c)  
      The
      Administrative Agent shall maintain at its address referred to in Section 9.02
      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 Banks and the
      Commitment of, and principal amount of the demand loans and unreimbursed
      drawings owing to, each Bank from time to time (the “Register”).
      The entries in
      the Register shall be conclusive and binding for all purposes, absent manifest
      error, and the Credit Parties, the Administrative Agent, the Fronting Bank
      and
      the Banks may treat each Person whose name is recorded in the Register as a
      Bank
      hereunder for all purposes of the Credit Documents. The Register shall be
      available for inspection by the Credit Parties or any Bank at any reasonable
      time and from time to time upon reasonable prior notice.

     

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

     

    (d)  
      Upon
      its receipt of an Assignment and Acceptance executed by an assigning Bank and
      an
      assignee, the Administrative Agent shall, if such Assignment and Acceptance
      has
      been completed and is in substantially the form of Exhibit B hereto, and has
      been signed by the Company (if the Company’s consent is required), (i) accept
      such Assignment and Acceptance, (ii) record the information contained therein
      in
      the Register and (iii) give prompt notice of such recordation to the Credit
      Parties.

     

    (e)  
      Each
      Bank may sell participations to one or more banks, financial institutions or
      other entities in all or a portion of its rights and obligations under this
      Agreement, the other Credit Documents and the Related Documents (including,
      without limitation, all or a portion of its Commitment and the demand loans
      owing to it); provided,
however,
      that (i) such
      Bank’s obligations under this Agreement (including, without limitation, its
      Commitment to the Company hereunder) shall remain unchanged, (ii) such Bank
      shall remain solely responsible to the other parties hereto for the performance
      of such obligations, and (iii) the Credit Parties, the Administrative Agent
      and
      the other Banks shall continue to deal solely and directly with such Bank in
      connection with such Bank’s rights and obligations under this Agreement. Any
      agreement pursuant to which any Bank may grant such a participating interest
      shall provide that such Bank shall retain the sole right and responsibility
      to
      enforce the obligations of the Credit Parties hereunder or under any other
      Credit Document including, without limitation, the right to approve any
      amendment, modification or waiver of any provision of the Credit Documents;
      provided
      that such
      participation agreement may provide that such Bank will not agree to any
      modification, amendment or waiver of any Credit Document which would (a) waive,
      modify or eliminate any of the conditions precedent specified in Article III,
      (b) increase or extend the Commitments of the Banks or subject the Banks to
      any
      additional obligations, (c) forgive principal, interest, fees or other amounts
      payable hereunder or under any other Credit Document or reduce the rate at
      which
      interest or any fee is calculated, (d) postpone any date fixed for any payment
      of principal, interest, fees or other amounts payable hereunder or under any
      other Credit Document, (e) change the percentage of the Commitments or the
      number of Banks which shall be required for the Banks or any of them to take
      any
      action hereunder or under any other Credit Document, (f) or waive any
      requirement for the release of collateral or (g) amend this Section
      9.09(e).

     

    (f)  
      Any
      Bank may, in connection with any assignment or participation or proposed
      assignment or participation pursuant to this Section 9.09, disclose to the
      assignee or participant or proposed assignee or participant, any information
      relating to any Credit Party furnished to such Bank by or on behalf of any
      Credit Party; 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 any Credit Party received by it from such Bank.

     

    (g)  
      Anything
      in this
      Section 9.09 to the contrary notwithstanding, any Bank may assign and pledge
      all
      or any portion of its Commitment and the demand loans owing to it to any Federal
      Reserve Bank (and its transferees) as collateral security pursuant to Regulation
      A of the Board of Governors of the Federal Reserve System and any Operating
      Circular issued by such Federal Reserve Bank. No such assignment shall release
      the assigning Bank from its obligations hereunder.

     

    
      
        
        

      

      
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    (h)  
      If
      any
      Bank (or any bank, financial institution, or other entity to which such Bank
      has
      sold a participation) shall make any demand for payment under Section 2.07
      or
      2.08, then within 30 days after any such demand, the Company may, with the
      approval of the Administrative Agent (which approval shall not be unreasonably
      withheld) and provided
      that
      no Event of
      Default or Default shall then have occurred and be continuing, demand that
      such
      Bank assign in accordance with this Section 9.09 to one or more assignees
      designated by the Company all (but not less than all) of such Bank’s Commitment
      and the demand loans and Tender Advances owing to it within the period ending
      on
      such 30th day. If any such assignee designated by the Company shall fail to
      consummate such assignment on terms acceptable to such Bank, or if the Company
      shall fail to designate any such assignees for all or part of such Bank’s
      Commitment, demand loans or Tender Advances, then such demand by the Company
      shall become ineffective; it being understood for purposes of this subsection
      (h) that such assignment shall be conclusively deemed to be on terms acceptable
      to such Bank, and such Bank shall be compelled to consummate such assignment
      to
      an assignee designated by the Company, if such assignee (i) shall agree to
      such
      assignment by entering into an Assignment and Acceptance in substantially the
      form of Exhibit B hereto with such Bank and (ii) shall offer compensation to
      such Bank in an amount equal to all amounts then owing by the Credit Parties
      to
      such Bank hereunder, whether for principal, interest, fees, costs or expenses
      (other than the demanded payment referred to above and payable by the Credit
      Parties as a condition to the Company’s right to demand such assignment), or
      otherwise.

     

    SECTION
      9.10.  Severability. 
      , 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
      9.11.  GOVERNING LAW. THIS AGREEMENT
      SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
      OF
      NEW YORK.

     

    SECTION
      9.12.  Headings. 
      Section
      headings in
      this Agreement are included herein for convenience of reference only and shall
      not constitute a part of this Agreement for any other purpose.

     

    SECTION
      9.13.  Submission To Jurisdiction; Waivers. 
The
      Company
      hereby irrevocably and unconditionally:

     

    (a)  
      submits
      for itself and its property in any legal action or proceeding relating to this
      Agreement and the other Related Documents to which it is a party, or for
      recognition and enforcement of any judgment in respect thereof, to the
      non-exclusive general jurisdiction of the Courts of the State of New York,
      the
      courts of the United States of America for the Southern District of New York,
      and appellate courts from any thereof;

     

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

     

    (b)  
      consents
      that any
      such action or proceeding may be brought in such courts and waives any objection
      that it may now or hereafter have to the venue of any such action or proceeding
      in any such court or that such action or proceeding was brought in an
      inconvenient court and agrees not to plead or claim the same;

     

    (c)  
      agrees
      that service of process in any such action or proceeding may be effected by
      mailing a copy thereof by registered or certified mail (or any substantially
      similar form of mail), postage prepaid, to the Guarantors at their address
      set
      forth in Section 9.02 or at such other address of which the Administrative
      Agent
      shall have been notified pursuant thereto; and

     

    (d)  
      agrees
      that nothing herein shall affect the right to effect service of process in
      any
      other manner permitted by law or shall limit the right to sue in any other
      jurisdiction.

     

    This
      Section 9.13
      shall not be construed to confer a benefit upon, or grant a right or privilege
      to, any Person other than the parties hereto.

     

    SECTION
      9.14.  Acknowledgments. 
      The
      Company hereby
      acknowledges:

     

    (a)  
      it
      has
      been advised by counsel in the negotiation, execution and delivery of this
      Agreement, the other Credit Documents and other Related Documents;

     

    (b)  
      no
      Bank
      has a fiduciary relationship to any Credit Party, and the relationship between
      any Bank, on the one hand, and any Credit Party on the other hand, is solely
      that of debtor and creditor; and

     

    (c)  
      no
      joint venture exists between any Credit Party and any Bank.

     

    SECTION
      9.15. WAIVERS OF JURY TRIAL. THE
      COMPANY,
      THE ADMINISTRATIVE AGENT, THE FRONTING BANK AND EACH BANK HEREBY IRREVOCABLY
      AND
      UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
      TO THIS AGREEMENT OR ANY RELATED DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
      THIS
      SECTION
      9.15 SHALL NOT BE CONSTRUED TO CONFER A BENEFIT UPON, OR GRANT A RIGHT OR
      PRIVILEGE TO, ANY PERSON OTHER THAN THE PARTIES HERETO.

     

    SECTION
      9.16.  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
      9.17.  “Reimbursement Agreement” for Purposes of
      Indenture. 
      This Agreement
      shall be
      deemed to be a “Reimbursement Agreement” for the purpose of the
      Indenture.

     

    
      
        
        

      

      
        60

        
          

        

      

      
        
        

      

    

     

    SECTION
      9.18.
USA
      PATRIOT Act.
      Each Bank hereby
      notifies each Credit Party that pursuant to the requirements of the USA PATRIOT
      Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
“Act”), it is required to obtain, verify and record information that identifies
      such Credit Party, which information includes the name and address of such
      Credit Party and other information that will allow such Bank to identify such
      Credit Party in accordance with the Act.

     

     

    


    



    
      
        
          


        

        
        

      

      
        61

        
          

        

      

      
        
        

        
           

          


        

      

    



     

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

     

     

    
      	 	 	 
	 	FIRSTENERGY
              NUCLEAR GENERATION CORP.
	 
 	 
 	 
 
	 	By:  	 
              
              

              Name:
	 	Title:
	 	 


    

    
      	
               

               

            	 	 
	 	BARCLAYS
              BANK PLC.
	 
 	 
 	
              acting
                through its New York Branch,

              as
                Administrative Agent and Fronting Bank

              
 

            
	 	By:  	 
	 	
              

              Name:
	 	Title: 


    

     

     

     


    
      
        Signature
          Page to Letter of Credit and Reimbursement Agreement

        State
          of
          Ohio

        Pollution
          Control Revenue Refunding Bonds 

        Series
          2005-A (FirstEnergy Nuclear Generation Corp. Project)

        
        

      

      
        62

        
          

        

      

      
        
        

      

    

     

    
 

    
      	
            	 


    

    
      	
               

               

            	 	 
	 	
              The
                Banks:

               

              BARCLAYS
                BANK PLC.

            
	 
 	 
 	
              acting
                through its New York Branch

              
 

            
	 	By:  	 
	 	
              

              Name:
	 	Title: 


    

     

     

     

     

    




    
      
        
          Signature
            Page to Letter of Credit and Reimbursement Agreement

          State
            of
            Ohio

          Pollution
            Control Revenue Refunding Bonds

          Series
            2005-A (FirstEnergy Nuclear Generation Corp.
            Project)

        

        
        

      

      
        63

        
          

        

      

      
        
        

        
          


        

      

    



    ANNEX
      1

    


    PRICING
      GRID

    


    The
      “Applicable LC Fee Rate”, “Applicable Margin for Alternate Base Rate” or
“Applicable Commitment Rate” for any day, as the case may be, is the percentage
      set forth below in the applicable row under the column corresponding to the
      Status that exists on such day:

     

    
      	
              Status

            	
              Level
                1 Status

               

              Reference
                Ratings at least A- by S&P or A3 by
                Moody’s

            	
              Level
                2 Status

               

              Reference
                Ratings lower than Level 1 but at least BBB+ by S&P or Baa1 by
                Moody’s

            	
              Level
                3 Status

               

              Reference
                Ratings of lower than Level 2 but at least BBB by S&P or Baa2 by
                Moody’s

            	
              Level
                4 Status

               

              Reference
                Ratings lower than Level 3 but at least BBB- by S&P and Baa3 by
                Moody’s

            	
              Level
                5 Status

               

              Reference
                Ratings lower than Level 3 but at least BBB- by S&P or Baa3 by
                Moody’s

            	
              Level
                6 Status

               

              Reference
                Ratings lower than Level 4 but at least BB+ by S&P or Ba1 by
                Moody’s

            	
              Level
                7 Status

               

              Reference
                Ratings lower than BB+ by S&P and Ba1 by Moody’s or if no Reference
                Rating exists

            
	
              Applicable
                LC Fee Rate

              (basis
                points)

            	
              35.0

            	
              40.0

            	
              50.0

            	
              65.0

            	
              70.0

            	
              87.5

            	
              112.5

            
	
              Applicable
                Margin for Alternate Base Rate (basis
                points)

            	
              50.0

            	
              50.0

            	
              50.0

            	
              50.0

            	
              50.0

            	
              50.0

            	
              50.0

            
	
              Applicable
                Commitment Rate

            	
              8.0

            	
              10.0

            	
              12.5

            	
              15.0

            	
              17.5

            	
              20.0

            	
              30.0

            


    

     

    For
      purposes of this Pricing Grid, the following terms have the following meanings
      (as modified by the provisos below):

     

    “Index
      Debt”
means
      the senior
      unsecured long-term debt securities of FirstEnergy, without third-party credit
      enhancement provided by any Person; provided that (i) at any time the Company’s
      senior unsecured long-term debt securities shall have an assigned rating of
      BBB-
      or better by S&P and Baa3 or better by Moody’s, “Index Debt” shall mean such
      senior unsecured long-term debt securities of the Company and (ii) if
clause
      (i)
      of this paragraph shall not be applicable, at any time FES’ senior unsecured
      long-term debt securities shall have an assigned rating of BBB- or better by
      S&P and Baa3 or better by Moody’s and FES’ “Applicable Percentage” under
      (and as defined in) the FES Guaranty Agreement shall be 100%, “Index Debt” shall
      mean such senior unsecured long-term debt securities of FES.

     

    “Reference
      Ratings”
means
      the ratings
      assigned by S&P and Moody’s to the Index Debt; provided that if there is no
      such rating, “Reference
      Ratings”
shall
      mean the
      ratings that are one Level below the rating assigned by S&P and Moody’s to
      (i) at any time the Company’s senior secured debt shall have an assigned rating
      of BBB or better by S&P and Baa2 or better by Moody’s, such senior secured
      debt of the Company, (ii) if clause
      (i)
      of this paragraph shall not be applicable, at any time FES’ senior secured debt
      shall have an assigned rating of BBB or better by S&P and Baa2 or better by
      Moody’s and FES’ “Applicable Percentage” under (and as defined in) the FES
      Guaranty Agreement shall be 100%, such senior secured debt of FES, or (iii)
      at
      any other time, the senior secured debt of FirstEnergy. 

     

    
      
        
        

      

      
        64

        
          

        

      

      
        
        

      

    

     

    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 Status, Level 2 Status, Level 3 Status, Level 5 Status
      or Level 6 Status, then the higher Reference Rating will be used to determine
      the applicable Status or (ii) there is a difference of more than one level
      in
      Reference Ratings of S&P and Moody’s, the level that is one level above the
      lower of such Reference Ratings will be used to determine the applicable Status,
      unless the lower of such Reference Ratings falls in Level 5 Status or Level
      7
      Status, in which case the lower of such Reference Ratings will be used to
      determine the applicable Status. If there exists only one Reference Rating,
      such
      Reference Rating shall be used to determine the applicable Status.

     

    “Status”
refers
      to the
      determination of which of Level 1 Status, Level 2 Status, Level 3 Status, Level
      4 Status, Level 5 Status, Level 6 Status or Level 7 Status exists at any
      date.

     

    The
      credit ratings to be utilized for purposes of this Pricing Grid are (subject
      to
      the proviso in the first sentence of the definition of “Reference Ratings”
above) those assigned to the Index Debt, and any rating assigned to any other
      debt security of FirstEnergy shall be disregarded. The rating in effect at
      any
      date is that in effect at the close of business on such date, provided, that
      the
      applicable Status shall change as and when the applicable Index Debt (or other
      debt security to the extent applicable pursuant to the proviso in the first
      sentence of the definition of “Reference Ratings” above) ratings
      change.

     

    


      
        
          
            Signature
              Page to Letter of Credit and Reimbursement Agreement

            State
              of
              Ohio

            Pollution
              Control Revenue Refunding Bonds

            Series
              2005-A (FirstEnergy Nuclear Generation Corp.
              Project)

          

          
          

        

        
          65