Document:

Unassociated Document

    
      Exhibit
        10.1

      

      Reference
        Number:
        [    ]                    Account
        Number:
        [     ]

      

      

      THIS
        EXHIBIT
        IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. CONFIDENTIAL INFORMATION
        HAS
        BEEN SO OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
        COMMISSION. IN PLACE OF SUCH OMITTEED CONFIDENTIAL INFORMATION, “ ****** “ HAS
        BEEN INSERTED.

      

      

      
        	
                Morgan
                  Stanley

              	
                MORGAN
                  STANLEY & CO. INCORPORATED, AS AGENT FOR

                MORGAN
                  STANLEY & CO .INTERNATIONAL LIMITED

                1585
                  BROADWAY 

                NEW
                  YORK,
                  NY 10036-8293

                (212)
                  761-4000

              

      

      

      March
        1,
        2007

      

      Accelerated
        Share
        Repurchase Transaction 

      

      

      FirstEnergy
        Corp.

      76
        South Main Street

      Akron,
        OH
        44308

       

        
          

        

      

       

      Dear
        Sir/Madam:

      

      

      The
        purpose of this letter agreement (this “Confirmation”) is to confirm the terms
        and conditions of the Transaction entered into between Morgan Stanley & Co.
        International Limited (“MSIL”) and FirstEnergy Corp. (the “Issuer”) on the Trade
        Date specified below (the “Transaction”). This confirmation constitutes a
“Confirmation” as referred to in the ISDA Master Agreement specified
        below.

      

      The
        definitions and provisions contained in the 2002 ISDA Equity Derivatives
        Definitions (as published by the International Swaps and Derivatives
        Association, Inc. (“ISDA”)) (the “Equity Definitions”) are incorporated into
        this Confirmation. In the event of any inconsistency between the Equity
        Definitions and this Confirmation, this Confirmation will govern. Any reference
        to a currency shall have the meaning contained in Annex A to the 1998 ISDA
        FX
        and Currency Option Definitions, as published by ISDA.

      

      1.            
        This
        Confirmation evidences a complete and binding agreement between MSIL and
        Issuer
        as to the terms of the Transaction to which this Confirmation relates. This
        Confirmation shall be subject to an agreement (the “Agreement”)
        in the form of
        the 2002 ISDA Master Agreement (the “ISDA
        Form”)
        as if MSIL and
        Issuer had executed an agreement in such form (without any Schedule). For
        the
        avoidance of doubt, the Transaction shall be the only transaction under the
        Agreement.

       

       All
        provisions
        contained in, or incorporated by reference to, the Agreement will govern
        this
        Confirmation except as expressly modified herein. In the event of any
        inconsistency between this Confirmation and either the Definitions or the
        Agreement, this Confirmation shall govern.

      

      2.            
        The terms of the particular Transaction to which this Confirmation relates
        are
        as follows:

      

      GENERAL
        TERMS:

      

      

      
        	
                Trade
                  Date:

              	
                As
                  specified
                  in Schedule I

              

      

      

      
        	
                Buyer:

              	
                Issuer

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          

            Reference
              Number:
 [   ]                       Account
              Number:  [   ]                                     Page
              2

          

        

      

      
 

      CONFIDENTIAL
        TREATMENT REQUESTED

      

      
        	
                Seller:

              	
                MSIL

              

      

      

      
        	
                Shares:

              	
                Common
                  Stock
                  of Issuer (Ticker: FE)

              

      

      

      
        	
                Number
                  of
                  Shares:

              	
                The
                  number of
                  Shares delivered in accordance with Physical Settlement
                  below

              

      

      

      
        	
                Daily
                  Forward
                  Amount:

              	
                For
                  each
                  Trading Day during the Calculation Period, an amount equal to (i)
                  a price
                  per Share (as determined by the Calculation Agent) equal to the
                  10b-18
                  VWAP for such Trading Day multiplied by (ii) the Daily Share Number
                  for
                  such Trading Day (as specified in Schedule I). For the avoidance
                  of doubt,
                  for any day that is not a Trading Day during the Calculation Period,
                  the
                  Daily Forward Amount shall be zero.

              

      

      

      
        	
                10b-18
                  VWAP:

              	
                For
                  each
                  Trading Day during the Calculation Period, a price per share (as
                  determined by the Calculation Agent) equal to the volume-weighted
                  average
                  price of the Rule 10b-18 eligible trades in the Shares for the
                  entirety of
                  such Trading Day as determined by reference to the screen entitled
“FE.N
                  <Equity> AQR SEC” or any successor page as reported by Bloomberg
                  L.P. (without regard to pre-open or after hours trading outside
                  of any
                  regular trading session for such Trading Day or any block trade
                  in excess
                  of 200,000 Shares on such Trading
                  Day)

              

      

      

      
        	
                Calculation
                  Period: 

              	
                The
                  period
                  from and including April 9, 2007 to and including the Valuation
                  Date;
                  provided, however, that if Issuer notifies MSIL that the J.P. Morgan
                  Transaction has not terminated by April 9, 2007, then (i) all Scheduled
                  Trading Days in the Calculation Period from, and including, April
                  9, 2007
                  to, and including, the date upon which Issuer notifies MSIL that
                  the J.P.
                  Morgan Transaction has terminated shall be deemed to be Disrupted
                  Days,
                  (ii) the Calculation Period shall be suspended for all such Scheduled
                  Trading Days, (iii) MSIL shall not purchase any Shares in connection
                  with
                  this Transaction on any such Scheduled Trading Days and (iv) such
                  suspension shall be treated as a Potential Adjustment Event subject
                  to
                  Calculation Agent Adjustment.

              

      

      

      
        	
                J.P.
                  Morgan
                  Transaction:

              	
                The
                  Accelerated Share Repurchase transaction entered into on August
                  9, 2006
                  between Buyer and J.P. Morgan Securities Inc., as agent for JPMorgan
                  Chase
                  Bank, National Association, London
                  Branch.

              

      

      

      
        	
                Trading
                  Day:
                  

              	
                Any
                  Exchange
                  Business Day that is not (i) a Disrupted Day, or (ii) an Excluded
                  Day

              

      

      

      
        	
                ******:
                  

              	
                As
                  specified
                  in Schedule I

              

      

      

      
         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            

              Reference
                Number:
 [   ]                       Account
                Number:  [   ]                                     Page
                3

            

          

        

        
 

      CONFIDENTIAL
        TREATMENT REQUESTED

      

      
        	
                ******
                  Delivery
                  Date: 

              	
                ******
                  following the
                  ****** 

                 

                On
                  the
                  ******
                  Delivery
                  Date, Seller shall deliver a number of shares equal to the ******
                  and the
                  ******
                  to Buyer in
                  accordance with Section ******
                  of the
                  ******,
                  with the
                  ******
                  Delivery Date
                  deemed to be a ******
                  for purposes
                  of such Section ******

              
	 	 

      

      

      
        	
                Prepayment:
                  

              	
                Applicable

              

      

      

      
        	
                ******:
                  

              	
                As
                  specified
                  in Schedule I

              
	 	 
	
                ******:

              	
                As
                  specified
                  in Schedule I

              
	 	 
	
                ******:

              	
                As
                  specified
                  in Schedule I

              
	 	 
	
                ******:

              	
                As
                  specified
                  in Schedule I

              
	 	 
	
                ******:

              	
                As
                  specified
                  in Schedule I

              
	 	 
	
                ******:

              	
                As
                  specified
                  in Schedule I

              

      

      

      
        	
                ******:

              	
                ******following
                  the
                  ******.
                  On the
                  ******,
                  Buyer shall
                  pay to Seller the ******,
                  the******,
                  the
                  ******
                  and the
                  ******,
                  and (B)
                  Seller shall pay to Buyer the ******

              

      

      

      

      
        	
                Exchange:

              	
                The
                  New York
                  Stock Exchange

              

      

      

      
        	
                Related
                  Exchange:

              	
                The
                  primary
                  exchange on which options or futures on the relevant Shares are
                  traded.

              

      

      

      
        	
                Market
                  Disruption Event:

              	
                The
                  definition
                  of “Market Disruption Event” in Section 6.3(a) of the Equity Definitions
                  is hereby amended by (i) inserting the words “at any time on any Scheduled
                  Trading Day during the Calculation Period or” after the word “material,”
                  in the third line thereof and (ii) deleting the word “or” in the fifth
                  line thereof and inserting the following directly after the word
“Closure”
                  in the fifth line thereof: “or (iv) that, on any Exchange Business Day,
                  the Calculation Agent determines, in its good faith judgment, it
                  would not
                  be able to repurchase the Daily Share Amount without potential
                  adverse
                  legal, regulatory or market consequences”.

                 

                 

              

      

       

      
         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
              Reference
                Number:
 [   ]                       Account
                Number:  [   ]                                     Page
                4

            

          

        

        

      

       

      
        	
                
                  CONFIDENTIAL
                    TREATMENT REQUESTED

                

                 

                 

                 

                 

                 

                 

                 

                 

                 

                 

                 

                Excluded
                  Day

              	
                
                  Notwithstanding
                    anything to the contrary in the Equity Definitions, if any Scheduled
                    Trading Day in the Calculation Period is a Disrupted Day, the
                    Calculation
                    Agent shall have the option in its sole discretion either (i)
                    to determine
                    the weighting of each Rule 10b-18 eligible transaction in the
                    Shares on
                    the relevant Disrupted Day using its commercially reasonable
                    judgment for
                    purposes of calculating the Settlement Amount, (ii) to elect
                    to extend the
                    Calculation Period by a number of Scheduled Trading Days equal
                    to the
                    number of Disrupted Days during the Calculation Period or (iii)
                    to suspend
                    the Calculation Period until the circumstances giving rise to
                    such
                    suspension have ceased. For the avoidance of doubt, (A) if Calculation
                    Agent elects the option described in clause (i) above, then such
                    Disrupted
                    Day shall be deemed to be a Trading Day for purposes of calculating
                    the
                    Settlement Amount, and (B) if the Calculation Agent elects either
                    option
                    (ii) or (iii) above, then such Disrupted Day shall be deemed
                    not to be a
                    Trading Day for purposes of calculating the Settlement
                    Amount.

                

                 

                April
                  ******
                  2007, May
                  ******
                  2007, July
                  ******
                  2007, August
                  ******
                  2007, October
                  ******
                  2007,
                  November ******
                  2007,
                  December ******
                  2007, January
                  ******
                  2008,
                  February ******
                  2008,
                  February ******
                  2008

              

      

      

      

      VALUATION:

      

      
        	
                Valuation
                  Time:

              	
                The
                  Scheduled
                  Closing Time on the relevant
                  Exchange

              

      

      

      
        	
                Valuation
                  Date:

              	
                The
                  earlier of
                  (i) the Scheduled Valuation Date (as specified in Schedule I) and
                  (ii) the
                  first day on which the number of Uncovered Shares equals zero,
                  subject to
                  extension in accordance with “Market Disruption Event” above or Section 7
                  or Section 9 below. On the Valuation Date, Calculation Agent shall
                  calculate the Settlement Amount.

              
	 	 
	
                Settlement
                  Amount:

              	
                The
                  ****** minus
                  the Forward
                  Amount minus
                  the Aggregate
                  Dividend Amount

              
	 	 
	
                Uncovered
                  Shares:

              	
                For
                  any day, a
                  number of shares equal to (i) the Initial Shares minus (ii) the
                  Aggregate
                  Daily Share Number as of the day immediately preceding such
                  day

              
	 	 
	
                Daily
                  Share
                  Number

              	
                As
                  specified
                  in Schedule I

              
	 	 
	
                Aggregate
                  Daily Share Number

              	
                On
                  any day
                  prior to the first Trading Day in the Calculation Period, zero.
                  For each
                  day on or after the first Trading Day in the Calculation Period,
                  a number
                  of shares equal to the sum of (i) the Aggregate Daily Share Number
                  on the
                  day immediately preceding such day and (ii) (A) if such day is
                  a Trading
                  Day, the Daily Share Number for such Trading Day (as specified
                  in Schedule
                  I) or (B) if such day is not a Trading Day,
                  zero.

              

      

       

      
         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
              Reference
                Number:
 [ 
 ]                                    Account
                Number: 
[ 
 ]                                                                      
                     Page
                5

            

          

        

        

      

       

      
        	 	 
	
                Aggregate
                  Dividend Amount:

              	
                The
                  sum of all
                  Dividend Amounts that have been calculated with respect to this
                  Transaction pursuant to Section 4(b)(i) below.

              
	 	 
	
                Forward
                  Amount:

              	
                The
                  sum of the
                  Daily Forward Amounts

              
	 	 

      

      

      SETTLEMENT
        TERMS:

      

      
        	
                Physical
                  Settlement:

              	
                Applicable.
                  On
                  the Settlement Date, if the Settlement Amount (as defined above)
                  is
                  greater than zero, then Seller shall make a cash payment to Buyer
                  in an
                  amount equal to the Settlement Amount; provided, however, that
                  Buyer may
                  deliver to Seller a notice by no later than 4:00 p.m. on the Exchange
                  Business Day immediately preceding the Settlement Date electing
                  for Seller
                  to deliver the requisite number of Refund Shares (as defined below)
                  in
                  lieu of payment of the Settlement Amount. The delivery of any Refund
                  Shares shall be effected in accordance with “Delivery of Refund Shares”
                  below.

                 

                On
                  the
                  Settlement Date, if the Settlement Amount is less than zero, then
                  Buyer
                  shall make a cash payment to Seller in an amount equal to the absolute
                  value of the Settlement Amount; provided, however, that Buyer may
                  deliver
                  to Seller a notice by no later than 4:00 p.m. on the Exchange Business
                  Day
                  immediately preceding the Settlement Date electing (i) to deliver
                  the
                  requisite number of Payment Shares (as defined below) in lieu of
                  payment
                  of the Settlement Amount and (ii) whether such delivery shall be
                  effected
                  by means of a registered offering or by means of a private placement.
                  The
                  delivery of any Payment Shares shall be effected in accordance
                  with
                  “Delivery of Payment Shares” below.

                 

                If
                  Seller
                  suspends the Calculation Period, the suspension shall be treated
                  as a
                  Potential Adjustment Event subject to Calculation Agent Adjustment.
                  In the
                  case of a suspension pursuant to Section 9, the Calculation Agent
                  shall
                  make such adjustments prior to the period of suspension, if it
                  is
                  practical to do so. Otherwise, and in all cases of a suspension
                  as
                  contemplated under “Market Disruption Event” above, the Calculation Agent
                  shall make such adjustments promptly following the period of
                  suspension.

              

      

      

      
        	
                Settlement
                  Currency:

              	
                USD

              
	 	 
	
                Settlement
                  Date:

              	
                Three
                  Exchange
                  Business Days after the Valuation Date, or if such date is not
                  a Clearance
                  System Business Day or if there is a Settlement Disruption Event
                  on such
                  day, the immediately succeeding Clearance System Business Day on
                  which
                  there is no Settlement Disruption
                  Event.

              

      

      

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            
              6Reference
                Number:
 [   ]                      Account
                Number:  [  ]                                        Page
                6

            

          

        

        
 

      

      PROCEDURE
        FOR DELIVERY OF SHARES:

       

       

      
        	
                Delivery
                  of
                  Refund Shares:

              	
                If
                  Buyer
                  elects for Seller to satisfy its payment obligation of the Settlement
                  Amount by delivering Refund Shares, then on the Valuation Date,
                  a
                  Settlement Balance shall be established with an initial balance
                  equal to
                  the Settlement Amount. On a Trading Day after the Settlement Date
                  chosen
                  by Seller, Seller shall commence purchasing Shares for delivery
                  to Issuer
                  (such Shares, “Refund Shares”). At the end of each Trading Day on which
                  Seller purchases Refund Shares, Seller shall reduce the Settlement
                  Balance
                  by the amount paid by Seller to purchase the Shares purchased on
                  such
                  Trading Day. Seller shall deliver the Refund Shares for each Trading
                  Day
                  to Buyer on the third Exchange Business Day after the relevant
                  Trading
                  Day. Seller shall continue purchasing Refund Shares until the Settlement
                  Balance has been reduced to zero. 

              
	 	 
	
                Delivery
                  of
                  Payment Shares 

              	
                If
                  Buyer
                  elects to satisfy its payment obligation of the Settlement Amount
                  by
                  delivering Payment Shares, then on the Valuation Date a Settlement
                  Balance
                  shall be created with an initial balance equal to the absolute
                  value of
                  the Settlement Amount. On the Settlement Date, Buyer shall deliver
                  to
                  Seller a number of shares (such shares, “Payment Shares”) rounded up to
                  the nearest whole number equal to the absolute value of the Settlement
                  Balance divided by
                  either (i)
                  the Private Placement Value (if such shares are to be sold by means
                  of a
                  private placement) or (ii) a price per Share as reasonably determined
                  by
                  the Calculation Agent (if such shares are to be sold by means of
                  a
                  registered offering). Following the delivery of Payment Shares
                  or any
                  Make-Whole Payment Shares (as defined below), Seller shall sell
                  all such
                  Payment Shares or Make-Whole Payment Shares in a commercially reasonable
                  manner.  At the end of each Trading Day upon which sales have been
                  made, the Settlement Balance shall be (i) reduced by an amount
                  equal to
                  the aggregate proceeds received by Seller upon settlement of the
                  sale of
                  such Payment Shares or Make-Whole Payment Shares and (ii) increased
                  by an
                  amount (as reasonably determined by the Calculation Agent) equal
                  to
                  Seller’s funding cost with respect to the then-current Settlement Balance
                  as of the close of business on such day.  If, on any Trading Day, all
                  Payment Shares and Make-Whole Payment Shares have been sold and
                  the
                  Settlement Balance has not been reduced to zero, the Buyer shall
                  (i) deliver to Seller or as directed by Seller on the third Exchange
                  Business Day after such Trading Day an additional number of Shares
                  (the
                  “Make-Whole
                  Payment Shares”,
                  which once
                  delivered, shall be considered to be Payment Shares) equal to (x)
                  the
                  Settlement Balance as of such Trading Day divided by (y) either
                  (i) the
                  Private Placement Value (if such shares are to be sold by means
                  of a
                  private placement) or (ii) a price per Share as reasonably determined
                  by
                  the Calculation Agent (if such shares are to be sold by means of
                  a
                  registered offering) or (ii) promptly deliver to Seller cash in an
                  amount equal to the then remaining Settlement Balance.  This
                  provision shall be applied successively until either the Settlement
                  Balance is reduced to zero or the aggregate number of Payment Shares
                  and
                  Make-Whole Payment Shares equals the Share Cap (as defined below).
                  Buyer
                  can only elect to deliver Payment Shares or Make-Whole Payment
                  Shares if
                  the Conditions to Delivery of Payment Shares are met on each day
                  during
                  the period from and including the Valuation Date to and including
                  the date
                  upon which the relevant Settlement Balance is reduced to
                  zero.

              

      

       

      
         

        
          
            
            

          

          
            
            

            
              

            

          

          
            

              Reference
                Number:
 [   ]                       Account
                Number:  [   ]                                      
  Page
                7

            

          

        

        
 

      

      
        	 	 
	
                Private
                  Placement Value:

              	
                The
                  per share
                  value to Seller of any Payment Share or Make-Whole Payment Share,
                  determined by Seller in a commercially reasonable manner and which
                  may be
                  based on indicative bids from institutional “accredited investors” (as
                  defined in Rule 501 under the Securities Act of 1933, as amended
                  (the
                  “Securities Act”))

              
	 	 

      

      

      Share
        Adjustments:

      

      
        	
                Method
                  of
                  Adjustment:

              	
                Calculation
                  Agent Adjustment

              

      

      

      EXTRAORDINARY
        EVENTS:

      

      Consequences
        of
        Merger Events:

      

      
        	
                Share-for-Share:

              	
                Modified
                  Calculation Agent Adjustment

              

      

      

      
        	
                Share-for-Other:

              	
                Cancellation
                  and Payment on that portion of the other Consideration that consists
                  of
                  cash; Modified Calculation Agent Adjustment on the remainder of
                  the Other
                  Consideration

              

      

      

      
        	
                Share-for-Combined:

              	
                Component
                  Adjustment

              

      

      

      
        	
                Determining
                  Party:

              	
                Calculation
                  Agent

              

      

      

      
        	
                Tender
                  Offer:  

              	
                Applicable

              

      

      

      Consequences
        of
        Tender Offers:

      

      
        	
                Share-for-Share:

              	
                Modified
                  Calculation Agent Adjustment

              

      

      

      
        	
                Share-for-Other:

              	
                Cancellation
                  and Payment on that portion of the other Consideration that consists
                  of
                  cash; Modified Calculation Agent Adjustment on the remainder of
                  the Other
                  Consideration

              

      

      

      
        	
                Share-for-Combined:

              	
                Component
                  Adjustment

              

      

      

      
        	
                Determining
                  Party:

              	
                Calculation
                  Agent

              

      

      
         

        
          
            
            

          

          
            
            

            
              

            

          

          
            

              Reference
                Number:
 [   ]                     Account
                Number:  [   ]                                       Page
                8

            

          

        

        

      

      CONFIDENTIAL
        TREATMENT REQUESTED

      

      For
        purposes of this Transaction, the definition of Merger Date in Section 12.1(c)
        shall be amended to read, “Merger Date shall mean the Announcement Date.” For
        purposes of this Transaction, the definition of Tender Offer Date in Section
        12.1(e) shall be amended to read, “Tender Offer Date shall mean the Announcement
        Date.”

      
        

        
          	
                  Composition
                    of
                    Combined Consideration:

                	
                  Applicable

                

        

        
          

          
            	
                    Nationalization,
                      Insolvency or Delisting:

                  	
                    Cancellation
                      and Payment

                  

          

           

        

      

      
        	
                Determining
                  Party:

              	
                Calculation
                  Agent

              

      

      

      Additional
        Disruption Events:

      

      
        	
                Change
                  in
                  Law:

              	
                Applicable

              

      

      

      
        	
                Failure
                  to
                  Deliver:

              	
                Applicable

              

      

      

      
        	
                Insolvency
                  Filing: 

              	
                Applicable

              

      

      

      
        	
                Hedging
                  Disruption: 

                Hedging
                  Party: 

              	
                Applicable

                Seller

              

      

      

      
        	
                Increased
                  Cost
                  of Hedging: 

                Hedging
                  Party:

              	
                Applicable

                Seller

              
	 	 
	
                Loss
                  of Stock
                  Borrow: 

                Maximum
                  Stock
                  Loan Rate: 

              	
                Applicable

                ******%

              

      

      

      
        	
                Increased
                  Cost
                  of Stock Borrow: 

                Initial
                  Stock
                  Loan Rate:

              	
                Applicable

                ******%

              

      

      

      
        	
                Determining
                  Party:

              	
                Seller

              

      

      

      
        	
                Non-Reliance:

              	
                Applicable

              

      

      

      AGREEMENTS
        AND ACKNOWLEDGMENTS:

      

      
        	
                Regarding
                  Hedging Activities:

              	
                Applicable

              

      

      

      
        	
                Additional
                  Acknowledgments: 

              	
                Applicable

              

      

      

      
        	
                3.
                  Calculation
                  Agent:

              	
                MSIL

              

      

      

      4.            
        (a)
        Nationalization or Insolvency. The words “the Transaction will be cancelled,” in
        the first line of Section 12.6(c)(ii) are replaced with the words “MSIL will
        have the right to cancel this Transaction,”.

      

       

      
        
          
            
            

          

          
            
            

            
              

            

          

          
            

              Reference
                Number:
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                Number:  [   ]                                        
                  Page
                9

            

          

        

        
 

      

      CONFIDENTIAL
        TREATMENT REQUESTED

      

      
        (b)
          Dividends. (i)
          If an Ex-Dividend Date occurs at any time prior to the Settlement Date,
          then the
“Dividend Amount” with respect to the relevant Ex-Dividend Date shall be an
          amount equal to the product of (A) $******
          multiplied by
          (B) Seller’s Short Position as of the Trading Day immediately preceding the
          relevant ex-dividend date. “Seller’s
          Short Position”
means,
          at any time
          before the settlement in whole of this Transaction, the number of Shares
          constituting Seller’s net short position to stock lenders in relation to the

Transaction at such time, as determined by the Calculation
        Agent.
“Ex-Dividend
        Date”
shall
        mean
        February 5, May 3, August 3 or November 5 of any year; provided,
however,
        that if Issuer
        declares a quarterly cash dividend that has an ex-dividend date that is
        different than February 5, May 3, August 3 or November 5, then such different
        date shall be an Ex-Dividend Date; provided,
further,
        that if Issuer has
        not declared a quarterly cash dividend in the relevant quarter, then one
        of
        February 5, May 3, August 3 or November 5, whichever date falls within the
        quarter in question, shall be deemed an Ex-Dividend Date for the purposes
        of
        this Transaction.

      

      (ii)Any
        cash
        dividend declared by the issuer that either (A) is not a regularly scheduled
        cash dividend or (B) exceeds $******
        per
        Share shall
        constitute an Additional Termination Event with this Transaction as the only
        “Affected Transaction” and Issuer as the sole Affected Party.

      

      (c)
        For the
        avoidance of doubt, this Transaction shall be deemed to be a “Share Forward
        Transaction” for purposes of the Equity Definitions.

      

      (d)
        On any date
        after, December 1, 2007, the Issuer may elect in its sole discretion to
        terminate this Transaction ("Optional Termination") at any time upon at least
        ten Scheduled Trading Days’ notice to MSIL, in which event the Transaction shall
        terminate and the Optional Termination shall constitute an Additional
        Termination Event with this Transaction as the only "Affected Transaction"
        and,
        notwithstanding Section 6(b) of the Agreement, the Early Termination Date
        being
        the effective date of the notice delivered by Issuer pursuant to this Section
        4(d); provided, however, that if the parties agree that ten Scheduled Trading
        Days’ notice is not sufficient given (A) the number of Uncovered Shares, (B) the
        liquidity of the Shares and (C) general market conditions as of the date
        of the
        notice of the Optional Termination, then the parties shall agree upon a suitable
        Early Termination Date. For purposes of Section 6(e) of the Agreement, MSIL
        shall be the sole Affected Party.

      

      5.             Conditions
        to Delivery of Payment Shares. 

      

      (a) If
        Issuer timely
        elects to deliver Payment Shares and Make-Whole Shares by means of a
registered
        offering,
        the following
        provisions shall apply:

      

      (i)
        On the later of (A) the Trading Day following the Issuer’s election to deliver
        Payment Shares and any Make-Whole Shares by means of a registered offering
        (the
“Registration
        Notice Date”),
        and (B) the date
        on which the Registration Statement is declared effective by the SEC or becomes
        effective (the “Registered
        Share Delivery Date”),
        the Issuer shall
        deliver to MSIL the Payment Shares. For the avoidance of doubt, the Registered
        Share Delivery Date shall be deemed to be the Settlement Date if this Section
        5(a) shall apply.

      

      (ii)
        Promptly
        following the Registration Notice Date, the Issuer shall file with the SEC
        a
        registration statement (“Registration
        Statement”)
        covering the
        public resale by MSIL of the Payment Shares and any Make-Whole Shares
        (collectively, the “Registered
        Securities”)
        on a continuous
        or delayed basis pursuant to Rule 415 (or any similar or successor rule),
        if
        available, under the Securities Act; provided
        that no such filing
        shall be required pursuant to this paragraph (ii) if the Issuer shall have
        filed
        a similar registration statement with unused capacity at least equal to the
        Settlement Amount and such registration statement has become effective or
        been
        declared effective by the SEC on or prior to the Registration Notice Date
        and no
        stop order is in effect with respect to such registration statement as of
        the
        Registration Notice Date.  The Issuer shall use its best efforts to file an
        automatic shelf registration statement or have the Registration Statement
        declared effective by the SEC as promptly as possible.

      
         

        
          
            
            

          

          
            
            

            
              

            

          

          
            

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      (iii)
        Promptly
        following the Registration Notice Date, the Issuer shall afford MSIL a
        reasonable opportunity to conduct a due diligence investigation with respect
        to
        the Issuer customary in scope for underwritten offerings of equity securities
        (including, without limitation, the availability of senior management to
        respond
        to questions regarding the business and financial condition of the Issuer
        and
        the right to have made available to MSIL for inspection relevant financial
        and
        other records, pertinent corporate documents and other information reasonably
        requested by MSIL), and MSIL reasonably shall be satisfied in all material
        respects with the results of such due diligence investigation of the Issuer.
        For
        the avoidance of doubt, the Issuer shall not have the right to deliver Shares
        pursuant to this Section 5(a) (and the conditions to delivery of Payment
        Shares
        specified in this Section 5 shall not be satisfied) until MSIL is reasonably
        satisfied in all material respects with the results of such due diligence
        investigation of the Issuer.

      

      (iv)
        From, the
        effectiveness of the Registration Statement until all Registered Securities
        have
        been sold by MSIL, the Issuer shall, at the request of MSIL, make available
        to
        MSIL a printed prospectus relating to the Registered Securities in form and
        substance (including, without limitation, any sections describing the plan
        of
        distribution) satisfactory to MSIL (a “Prospectus”,
        which term shall
        include any prospectus supplement thereto), in such quantities as Morgan
        shall
        reasonably request.

      

      (v)
        The Issuer shall use its best efforts to prevent the issuance of any stop
        order
        suspending the effectiveness of the Registration Statement or of any order
        preventing or suspending the use of any Prospectus and, if any such order
        is
        issued, to obtain the lifting thereof as soon thereafter as is possible. 
If the Registration Statement, the Prospectus or any document incorporated
        therein by reference contains a misstatement of a material fact or omits
        to
        state a material fact required to be stated therein or necessary to make
        any
        statement therein not misleading, the Issuer shall as promptly as practicable
        file any required document and prepare and furnish to MSIL a reasonable number
        of copies of such supplement or amendment thereto as may be necessary so
        that
        the Prospectus, as thereafter delivered to the purchasers of the Registered
        Securities will not contain a misstatement of a material fact or omit to
        state a
        material fact required to be stated therein or necessary to make any statement
        therein not misleading.

      

      (vi)
        On or prior to
        the Registered Share Delivery Date, the Issuer shall enter into an agreement
        (a
“Transfer
        Agreement”)
        with MSIL (or any
        affiliate of MSIL designated by MSIL and reasonably acceptable to the Issuer)
        in
        connection with the public resale of the Registered Securities, substantially
        similar to underwriting agreements customary for underwritten offerings of
        equity securities, in form and substance satisfactory to MSIL (or such
        affiliate) and the Issuer, which Transfer Agreement shall (without limitation
        of
        the foregoing):

      

      (A)
        contain provisions substantially similar to those contained in such underwriting
        agreements relating to the indemnification of, and contribution in connection
        with the liability of, MSIL and its affiliates, and the Issuer,

      

      (B)
        provide for delivery to MSIL (or such affiliate) of customary opinions
        (including, without limitation, accounting comfort letters, opinions relating
        to
        the due authorization, valid issuance and fully paid and non-assessable nature
        of the Registered Securities and the lack of material misstatements and
        omissions in the Registration Statement, the Prospectus and the Issuer’s filings
        under the Securities Exchange Act of 1934, as amended (the “Exchange Act”));
        and

      

      (C)
        provide for the payment by the Issuer of all fees and expenses in connection
        with such resale, including all registration costs and all fees and expenses
        of
        counsel for MSIL (or such affiliate).

      

      (vii)
        If at any time
        the number of Shares covered by the Registration Statement is less than the
        number of Registered Securities required to be delivered pursuant to this
        Section 5(a) and the provisions of “Delivery of Payment Shares” in Section 2
        above, the Issuer shall, at the request of MSIL, file additional registration
        statement(s) to register the sale of all Registered Securities required to
        be
        delivered to MSIL.

      
         

        
          
            
            

          

          
            
            

            
              

            

          

          
            

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      (viii)
        The Issuer
        shall cooperate with MSIL and use its best efforts to take any other action
        necessary to effect the intent of the provisions set forth in this Section
        5(a).

      

      (b)
        If
        Issuer timely elects to deliver Payment Shares and Make-Whole Shares by means
        of
        a private placement, the following provisions shall apply:

      

      

      (i)
         all
        Payment Shares
        and Make-Whole Payment Shares shall be delivered to the Seller (or any affiliate
        of the Seller designated by the Seller) pursuant to the exemption from the
        registration requirements of the Securities Act provided by
        Section 4(2) thereof;

      

      (ii) 
        Seller and any
        potential purchaser of any such shares from the Seller (or any affiliate
        of the
        Seller designated by the Seller) identified by Seller shall have been afforded
        a
        commercially reasonable opportunity to conduct a due diligence investigation
        with respect to Issuer customary in scope for private placements of equity
        securities (including, without limitation, the right to have made available
        to
        them for inspection all relevant financial and other records, pertinent
        corporate documents and other information reasonably requested by them) and
        Buyer shall not disclose material non-public information in connection with
        such
        due diligence investigation; and

       

      (iii)
        an agreement
        (a “Private
        Placement Agreement”)
        shall have been
        entered into between Issuer and the Seller (or any affiliate of the Seller
        designated by the Seller) in connection with the private placement of such
        shares by Issuer to the Seller (or any such affiliate) and the private resale
        of
        such shares by the Seller (or any such affiliate), substantially similar
        to
        private placement purchase agreements customary for private placements of
        equity
        securities, in form and substance commercially reasonably satisfactory to
        the
        Seller and the Issuer, which Private Placement Agreement shall include, without
        limitation, provisions substantially similar to those contained in such private
        placement purchase agreements relating to the indemnification of, and
        contribution in connection with the liability of, the Seller, the Issuer
        and
        their affiliates, and shall provide for the payment by Issuer of all reasonable
        and customary fees and expenses in connection with such resale, but not
        including any underwriter or broker discounts and commissions, and shall
        contain
        representations, warranties and agreements of Issuer and Seller reasonably
        necessary or advisable to establish and maintain the availability of an
        exemption from the registration requirements of the Securities Act for such
        resales.

      

      (iv)
        If Issuer
        elects to deliver Payment Shares to satisfy its payment obligation of the
        Settlement Amount, neither Issuer nor Seller shall take or cause to be taken
        any
        action that would make unavailable either (i) the exemption set forth in
        Section 4(2) of the Securities Act for the sale of any Payment Shares
        or Make-Whole Payment Shares by Issuer to the Seller or (ii) an exemption
        from the registration requirements of the Securities Act reasonably acceptable
        to the Seller for resales of Payment Shares and Make-Whole Payment Shares
        by the
        Seller.

       

               (c)
        The provisions of Section 5(b)
        shall apply to any then-current Settlement Balance if (i) on any given day,
        Issuer cannot satisfy any of the conditions of Section 5(a) or (ii) for a
        period
        of at least ten (10) consecutive Exchange Business Days, MSIL has determined
        that it is inadvisable to effect sales of Registered Securities. 

       

                              
        (d) If the Settlement Amount is less than zero and Issuer elects to deliver
        Payment Shares to satisfy its payment obligation of the Settlement Amount,
        then,
        if necessary, Issuer shall use its best efforts to cause the number of
        authorized but unissued shares of Common Stock to be increased to an amount
        sufficient to permit Issuer to fulfill its obligations “Delivery of Payment
        Shares” above.

       

      
         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
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      (e)
        Notwithstanding anything to the contrary contained herein, Issuer shall have
        the
        right to cancel its election to satisfy its payment obligation of the Settlement
        Amount (or the then remaining balance thereof) by delivering Payment Shares
        or
        Make-Whole Payment Shares at any time before the Settlement Balance has been
        reduced to zero (such right, the "Issuer Settlement Cancellation Right")
        by
        delivering notice to MSIL on any Scheduled Trading Day. If Issuer exercises
        the
        Issuer Settlement Cancellation Right, (i) MSIL shall sell any Payment Shares
        or
        Make-Whole Payment Shares (if any) that it has an obligation to sell as of
        the
        time of receiving notice of Issuer’s exercise of its Issuer Settlement
        Cancellation Right, (ii) MSIL shall reduce the Settlement Balance by the
        amount
        realized in such sale of such Payment Shares or Make-Whole Payment Shares
        and
        (iii) Issuer shall make a cash payment to MSIL in an amount equal to remaining
        Settlement Balance.

      

      (f)
        Issuer expressly agrees and acknowledges that the public disclosure of all
        material information relating to Issuer is within its control.

       

      6.     Certain
        Payments and Deliveries by MSIL. Notwithstanding anything to the contrary
        herein, or in the Equity Definitions, if at any time (i) an Early Termination
        Date occurs and MSIL would be required to make a payment pursuant to Sections
        6(d) and 6(e) of the Agreement, (ii) a Tender Offer occurs and MSIL would
        be
        required to make a payment pursuant to Sections 12.3 and 12.7 of the Equity
        Definitions, (iii) a Merger Event occurs and MSIL would be required to make
        a
        payment pursuant to Sections 12.2 and 12.7 of the Equity Definitions, (iv)
        an
        Additional Disruption Event occurs and MSIL would be required to make a payment
        pursuant to Sections 12.8 and 12.9 of the Equity Definitions or (v) a
        Nationalization, Insolvency or Delisting occurs and MSIL would be required
        to
        make a payment pursuant to Section 12.6 of the Equity Definitions, then Issuer
        shall have the option to require MSIL to make such payment in cash or to
        settle
        such payment amount in Shares (any such payment described in Sections 6(i),
        (ii), (iii), (iv) or (v) above, an “MSIL Payment Amount”). If Issuer elects for
        MSIL to settle an MSIL Payment Amount in Shares, then the provisions of
“Delivery of Refund Shares” in Section 2 above shall apply to MSIL’s delivery of
        Shares pursuant to this Section 6 as if (A) the relevant MSIL Payment Amount
        was
        the “Settlement Amount”, (B) the date such MSIL Payment Amount is due was the
“Valuation Date” and (C) any such Shares delivered by MSIL pursuant to this
        Section 6 were “Refund Shares”. 

      

      7.     Certain
        Payments and Deliveries by Issuer. Notwithstanding anything to the contrary
        herein, or in the Equity Definitions, if at any time (i) an Early Termination
        Date occurs and Issuer would be required to make a payment pursuant to Sections
        6(d) and 6(e) of the Agreement, (ii) a Tender Offer occurs and Issuer would
        be
        required to make a payment pursuant to Sections 12.3 and 12.7 of the Equity
        Definitions, (iii) a Merger Event occurs and Issuer would be required to
        make a
        payment pursuant to Sections 12.2 and 12.7 of the Equity Definitions, (iv)
        an
        Additional Disruption Event occurs and Issuer would be required to make a
        payment pursuant to Sections 12.8 and 12.9 of the Equity Definitions or (v)
        a
        Nationalization, Insolvency or Delisting occurs and Issuer would be required
        to
        make a payment pursuant to Section 12.6 of the Equity Definitions (any such
        payment described in Sections 7(i), (ii), (iii), (iv) or (v) above, an “Early
        Settlement Payment”), then Issuer shall have the option, in lieu of making such
        cash payment, to settle its payment obligations under Sections 7(i), (ii),
        (iii), (iv) or (v) above in Shares (such Shares, the “Early Settlement Shares”).
        The provisions of “Delivery of Payment Shares” in Section 2 above shall apply to
        the delivery of Early Settlement Shares as if the relevant Early Settlement
        Amount was the “Settlement Amount” and the Early Settlement Shares were “Payment
        Shares”. In order to elect to deliver Early Settlement Shares, (i) Issuer must
        notify MSIL of its election by no later than 4 p.m. EST on the date that
        is
        three Exchange Business Days before the date that the Early Settlement Payment
        is due, (ii) must specify whether such Early Settlement Shares are to be
        sold by
        means of a registered offering or by means of a private placement and (iii)
        the
        conditions described in Section 5 above must be satisfied as if the Early
        Settlement Shares were “Payment Shares” and any additional Shares Issuer
        delivers to reduce the settlement balance to zero in connection with this
        Section 7 were “Make-Whole Payment Shares”. 

      
         

      

      
        
          
            8.     Special
              Provisions for Merger Transactions. Notwithstanding anything to the
              contrary
              herein or in the Equity Definitions, to the extent that an Announcement
              Date for
              a potential Merger Transaction occurs during the term of this Transaction
              and
              such Announcement Date does not cause this Transaction to terminate
              in whole
              under the provisions of “Extraordinary Event” in paragraph 2 above:

             

          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              

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      (a)
        As soon as
        practicable following the public announcement of such potential Merger
        Transaction, Issuer shall provide MSIL with written notice of such announcement;
        

      

      (b)
        Promptly after request from MSIL, Issuer shall provide MSIL with written
        notice
        specifying (i) Issuer's average daily Rule 10b-18 Purchases (as defined in
        Rule
        10b-18) during the three full calendar months immediately preceding the
        Announcement Date that were not effected through MSIL or its affiliates and
        (ii)
        the number of Shares purchased pursuant to the block purchase proviso in
        Rule
        10b-18(b)(4) under the Exchange Act for the three full calendar months preceding
        the Announcement Date. Such written notice shall be deemed to be a certification
        by Issuer to MSIL that such information is true and correct. Issuer understands
        that MSIL will use this information in calculating the trading volume for
        purposes of Rule 10b-18; and 

       

      (c)
        MSIL in its good faith commercially reasonable judgment may extend the
        Calculation Period to account for any reduction in the number of Shares that
        could be purchased on each day during the Calculation Period in compliance
        with
        Rule 10b-18 following the Announcement Date.

      

      "Merger
        Transaction"
        means any merger, acquisition or similar transaction involving a
        recapitalization of Issuer as contemplated by Rule 10b-18(a)(13)(iv) under
        the
        Exchange Act. 

      

      9.     Seller
        Adjustments. If Seller, in its good faith judgment, reasonably determines
        that
        with regard to any legal, regulatory or self-regulatory requirements or related
        policies and procedures including, without limitation, Rule 10b-18 (whether
        or
        not such requirements, policies or procedures are imposed by law or have
        been
        voluntarily adopted by the Seller), it may be appropriate for Seller to refrain
        from effecting transactions in Shares on any Exchange Business Day during
        the
        Calculation Period or to effect such transactions on such Exchange Business
        Day
        at a volume lower than that otherwise effected by Seller hereunder, Seller
        may
        elect not to effect transactions in Shares with respect to this Transaction
        on
        such day or to effect such transactions at a lower volume consistent with
        such
        requirements, policies and procedures; provided
        that if Seller
        decides to effect any transaction hereunder at such lower volume, the
        Calculation Agent shall be entitled to make appropriate adjustments to the
        term
        of this Transaction to reflect the effect of such diminished volume. Seller
        shall notify Buyer of the exercise of Seller’s rights pursuant to this Section 9
        upon such exercise and shall subsequently notify the Purchaser on the day
        Seller
        believes that it may resume purchasing or selling or purchasing at the volume
        level anticipated at the outset of this Transaction, as applicable, Shares.
        Seller shall not be obligated to communicate to the Purchaser the reason
        for the
        Seller’s exercise of its rights pursuant to this Section 9. 

      

      10.   
Covenants.

       

      (a)
        The Buyer covenants and agrees: 

        

        (i)(a)
        that it will
        not treat this Transaction, any portion hereof, or any obligation hereunder
        as
        giving rise to any interest income or other inclusions of ordinary income;
        (b)
        it will not treat the delivery of any portion of the Shares or cash to be
        delivered pursuant to this Transaction as the payment of interest or ordinary
        income; (c) it will treat this Transaction in its entirety as a forward contract
        for the delivery of such Shares or cash; and (d) it will not take any action
        (including filing any tax return or form or taking any position in any tax
        proceeding) that is inconsistent with the obligations contained in (a) through
        (c). Notwithstanding the preceding sentence, Buyer may take any action or
        position required by law, provided that Buyer delivers to Seller an opinion
        of
        counsel, nationally recognized as expert in Federal tax matters and acceptable
        to Buyer, to the effect that such action or position is required by a statutory
        change or a Treasury regulation or applicable court decision published after
        the
        Trade Date;

      

        (ii)
        that during the
        term of this Agreement, neither it nor any of its affiliates shall directly
        or
        indirectly (which shall be deemed to include the writing or purchase of any
        cash-settled derivative instrument) purchase Shares (or any security convertible
        into or exchangeable for Shares) without the prior written approval of Seller
        or
        take any other action that would cause the purchase by Seller of any Shares
        in
        connection with this Agreement not to comply with Rule 10b-18 under the Exchange
        Act (assuming for the purposes of this paragraph that such Rule were otherwise
        applicable to such purchases). For the avoidance of doubt, Buyer and Seller
        hereby agree that the provisions of this Section 10(a)(ii) shall not apply
        to
        purchases of Shares covered by Rule 10b-18(a)(13)(ii) under the Exchange
        Act,
        any purchases of Shares by Buyer effected on an Excluded Day and any other
        purchases of Shares by Buyer that do not violate the provisions of Section
        9(a)
        of the Exchange Act;

      

        
           

          
            
              
              

            

            
              
              

              
                

              

            

            
              

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        (iii)
        to comply with
        all laws, rules and regulations applicable to it (including, without limitation,
        the Securities Act and the Exchange Act) in connection with the transactions
        contemplated by this Confirmation; and

      

        (iv)
        that it is not
        relying, and has not relied, upon Seller or any of its representatives or
        advisors with respect to the legal, accounting, tax or other implications
        of
        this Agreement and that it has conducted its own analyses of the legal,
        accounting, tax and other implications of this Agreement, including but not
        limited to the treatment of the Transaction under FASB Statements 133 as
        amended
        or 150, EITF 00-19 (or any successor issue statements) or under FASB’s
        Liabilities & Equity Project. Buyer understands and acknowledges that Seller
        and its affiliates may from time to time effect transactions for their own
        account or the account of customers and hold positions in securities or options
        on securities of the Buyer and that Seller and its affiliates may continue
        to
        conduct such transactions during the term of this Agreement.

      

        (v)
that
        if at any time
        the Issuer concludes that either it or any of its affiliates will be taking
        any
        action that would cause Regulation M under the Securities Exchange Act of
        1934,
        as amended ("Regulation M"), to be applicable to any purchases of Shares,
        during
        the Calculation Period , including any offering by the Issuer or any of its
        affiliates of securities for which the Issuer’s common stock would constitute a
        "covered security" for purposes of Regulation M (which may include an offering
        of shares of Common Stock (or a security convertible or exercisable into
        or
        exchangeable for such shares or for which the Shares are a reference security
        (as defined in Regulation M)), then the Issuer agrees that it will, on not
        less
        than one Scheduled Trading Day’s written notice, direct MSIL not to purchase
        Shares in connection with this Confirmation during the anticipated "restricted
        period" (as defined in Regulation M) of such an offering (the "Suspension
        Period"); provided that MSIL shall keep any notice hereunder from the Issuer
        confidential. If on any Scheduled Trading Day Issuer delivers such written
        notice (and confirms by telephone) by 8:30 a.m. New York Time (the "Notification
        Time"), then such notice shall be effective to suspend the Calculation Period
        as
        of such Notification Time. In the event that Issuer delivers notice and/or
        confirms by telephone after the Notification Time, then the Calculation Period
        shall be suspended effective as of 8:30 a.m. New York Time on the following
        Scheduled Trading Day or as otherwise required by law or agreed between Issuer
        and MSIL. The Calculation Period shall be suspended in accordance with, and
        MSIL
        shall have all of the rights under, Section 9 of this Confirmation, including
        (for the avoidance of doubt), but not limited to, the right to treat any
        suspension of the Calculation Period as a Potential Adjustment Event subject
        to
        Calculation Agent Adjustment.

      

        (vi)
        that it shall
        not, directly or indirectly, communicate any information relating to Buyer,
        its
        Shares or this Transaction to any employee of Seller or MSCO (as defined
        below),
        other than as set forth in the Communications Procedures attached as Annex
        A
        hereto.

      

      (b)
        The Seller covenants and agrees: 

        

        (i)(a)
        that with
        respect to the purchase of any Shares in connection with this Agreement and
        notwithstanding Section 12 hereof, Seller will use commercially reasonable
        efforts to comply with the timing, price and volume provisions of Rule
        10b-18(b)(2), (3) and (4) under the Exchange Act; provided,
however,
        that it is
        understood and agreed that Seller will not be obligated to comply with this
        paragraph upon (A) the designation of an Early Termination Date, (B) the
        delivery of notice that an Additional Disruption Event has occurred or (C)
        delivery of notice that an Extraordinary Event has occurred pursuant to Section
        12.7(a) of the Equity Definitions;

       

      
          (ii)
          that it shall
          not purchase Shares in connection with this Transaction until the first
          Trading
          Day in the Calculation Period; 

        

        
           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
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      11.   Representations,
        Warranties
        and Acknowledgments.

      

      (a)
        The Buyer hereby represents and warrants to Seller that:

      

        (i)
        as of the date
        hereof, the Buyer (A) is not in possession of any material, non-public
        information with respect to the Buyer or any of its securities, and is entering
        into this Agreement in good faith and not as part of a plan or scheme to
        evade
        the prohibitions of Rule 10b5-1 of the Exchange Act and (B) agrees not to
        alter
        or deviate from the terms of this Agreement or enter into or alter a
        corresponding or hedging transaction or position with respect to the Shares
        (including, without limitation, with respect to any securities convertible
        or
        exchangeable into the Shares) during the term of this Agreement; 

      

        (ii)
        the
        transactions contemplated by this Confirmation have been authorized under
        Buyer’s publicly announced program to repurchase Shares; 

      

        (iii)
        the Buyer is
        not entering into this Agreement to facilitate a distribution of the Shares
        (or
        any security convertible into or exchangeable for Shares) or in connection
        with
        a future issuance of securities except pursuant to the Buyer’s employee benefit
        plans and dividend reinvestment plan or other publicly disclosed
        transaction;

      

        (iv)
        the Buyer is
        not entering into this Agreement to create actual or apparent trading activity
        in the Shares (or any security convertible into or exchangeable for Shares)
        or
        to raise or depress the price of the Shares (or any security convertible
        into or
        exchangeable for Shares); and

      

        (v)
        the Buyer is as
        of the date hereof, and after giving effect to the transactions contemplated
        hereby will be, Solvent. As used in this paragraph, the term “Solvent” means,
        with respect to a particular date, that on such date (A) the present fair
        market
        value (or present fair saleable value) of the assets of the Buyer is not
        less
        than the total amount required to pay the liabilities of the Buyer on its
        total
        existing debts and liabilities (including contingent liabilities) as they
        become
        absolute and matured, (B) the Buyer is able to realize upon its assets and
        pay its debts and other liabilities, contingent obligations and commitments
        as
        they mature and become due in the normal course of business, (C) assuming
        consummation of the transactions as contemplated by this Agreement, the Buyer
        is
        not incurring debts or liabilities beyond its ability to pay as such debts
        and
        liabilities mature, (D) the Buyer is not engaged in any business or
        transaction, and does not propose to engage in any business or transaction,
        for
        which its property would constitute unreasonably small capital after giving
        due
        consideration to the prevailing practice in the industry in which the Buyer
        is
        engaged and (E) the Buyer is not a defendant in any civil action that could
        reasonably be expected to result in a judgment that the Buyer is or would
        become
        unable to satisfy.

        

      (b)
        Seller and the Buyer each hereby acknowledges that any transactions by Seller
        in
        the Shares will be undertaken by Seller, as the case may be, as principal
        for
        its own account. All of the actions to be taken by Seller in connection with
        this Agreement, shall be taken by Seller independently and without any advance
        or subsequent consultation with the Buyer.

      

      12.   Acknowledgements
        of Buyer
        Regarding Hedging and Market Activity.

      

      (a)
        Buyer
        agrees, understands and acknowledges that:

      

      
        
           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
                Reference
                  Number:
 [   ]                      Account
                  Number:  [   ]                                     Page
                  16

              

            

          

          

        

      

      (i)
        during the period from (and including) the Trade Date to (and including)
        the
        Settlement Date, Seller and its affiliates may buy or sell Shares or other
        securities or buy or sell options or futures contracts or enter into swaps
        or
        other derivative securities in order to adjust its hedge position with respect
        to the transactions contemplated by this Transaction;   

       

      (ii)
        Seller and its
        affiliates also may be active in the market for the Shares other than in
        connection with hedging activities in relation to the transactions contemplated
        by this Transaction; 

       

      (iii)
        Seller shall
        make its own determination as to whether, when and in what manner any hedging
        or
        market activities in the Issuer’s securities shall be conducted and shall do so
        in a manner that it deems appropriate to hedge its price and market risk
        with
        respect to 10b-18 VWAP; and

       

      (iv)
        any market
        activities of Seller and its affiliates with respect to the Shares may affect
        the market price and volatility of the Shares, as well as the 10b-18 VWAP,
        each
        in a manner that may be adverse to Buyer.

      

      13.   Indemnification.

      

      (a)
        Buyer (the “Indemnifying
        Party”)
        agrees to
        indemnify and hold harmless the Seller and its officers, directors, employees,
        affiliates, advisors, agents and controlling persons (each, an “Indemnified
        Person”)
        from and against
        any and all losses, claims, damages and liabilities, joint or several
        (collectively, “Obligations”),
        to which an
        Indemnified Person may become subject arising out of or in connection with
        this
        Confirmation or any claim, litigation, investigation or proceeding relating
        thereto, regardless of whether any of such Indemnified Person is a party
        thereto, and to reimburse, within 30 days, upon written request, each such
        Indemnified Person for any reasonable legal or other expenses incurred in
        connection with investigating, preparation for, providing evidence for or
        defending any of the foregoing, provided, however, that the Indemnifying
        Party
        shall not have any liability to any Indemnified Person to the extent that
        such
        Obligations (i) are finally determined by a court of competent jurisdiction
        to
        have resulted from the gross negligence or willful misconduct of such
        Indemnified Person (and in such case, such Indemnified Person shall promptly
        return to the Indemnifying Party any amounts previously expended by the
        Indemnifying Party hereunder) or (ii) are trading losses incurred by the
        Seller
        as part of its purchases or sales of shares of Common Stock pursuant to this
        Confirmation (unless the Purchaser has breached any agreement, term or covenant
        herein).

      

      (b)
        Subject to Section 13(c), all Obligations shall be paid promptly in
        cash.

      

      (c)
        Notwithstanding the provisions of Section 13(b), in connection with any such
        Obligation, the Buyer may elect to satisfy such Obligation by delivering
        Shares
        to Seller (such Shares, the “Indemnity Shares”) by notifying Seller of such
        election within one Trading Day of being informed by Seller that such Obligation
        is due and payable. The provisions of “Delivery of Payment Shares” in Section 2
        above shall apply to such a share settlement of an Obligation as if the relevant
        Obligation was the “Settlement Amount” and the Indemnity Shares were “Payment
        Shares”. In order to elect to deliver Indemnity Shares, Issuer must (i) specify
        whether such Indemnity Shares are to be sold by means of a registered offering
        or by means of a private placement and (ii) the conditions described in Section
        5 above must be satisfied as if the Indemnity Shares were “Payment Shares” and
        any additional Shares Issuer delivers to reduce the settlement balance to
        zero
        in connection with this Section 13 were “Make-Whole Payment
        Shares”.

       

      
        
           

          
            
              
              

            

            
              
              

              
                

              

            

            
              

                Reference
                  Number:
 [   ]                       Account
                  Number:  [   ]                                     Page
                  17

              

            

          

          

        

      

      

      14.   The
        parties hereto
        agree and acknowledge
        that
        Seller is a “financial participant” within the meaning of Section 101(22) of
        Title 11 of the United States Code (the “Bankruptcy Code”). The parties hereto
        further agree and acknowledge that this Transaction is either (i) a “securities
        contract” as such term is defined in Section 741(7) of the Bankruptcy Code, in
        which case each payment and delivery made pursuant to this Transaction is
        a
“settlement payment”, as such term is defined in Section 741(8) of the
        Bankruptcy Code, and that
        Seller is
        entitled to the protections afforded by, among other sections, Sections
        362(b)(6), 546(e) and 555 of the Bankruptcy Code, or (ii) a “swap agreement”, as
        such term is defined in Section 101(53B) of the Bankruptcy Code, in which
        case
        each party is a “swap participant”, as such term is defined in Section 101(53C)
        of the Bankruptcy Code, and that Seller is entitled to the protections afforded
        by, among other sections, Sections 362(b)(17), 546(g) and 560 of the Bankruptcy
        Code.

      

      15.   Seller
        and Issuer hereby
        agree and acknowledge that Seller has authorized the Issuer to disclose this
        Transaction to any and all persons, and there are no express or implied
        agreements, arrangements or understandings to the contrary, and authorizes
        the
        Issuer to use any information that the Issuer receives or has received with
        respect to this Transaction in any manner.

      

      16.          
        Treatment in Bankruptcy; No Setoff; No Collateral.

      

      (a)
        In the event the Buyer becomes the subject of proceedings (“Bankruptcy
        Proceedings”)
        under the U.S.
        Bankruptcy Code or any other applicable bankruptcy or insolvency statute
        from
        time to time in effect, any rights or claims of Seller hereunder in respect
        of
        this transaction shall rank for all purposes no higher than, but on a parity
        with, the rights or claims of holders of Shares, and Seller hereby agrees
        that
        its rights and claims hereunder shall be subordinated to those of all parties
        with claims or rights against the Buyer (other than common stockholders)
        to the
        extent necessary to assure such ranking. Without limiting the generality
        of the
        foregoing, after the commencement of Bankruptcy Proceedings, the claims of
        Seller hereunder shall for all purposes have rights equivalent to the rights
        of
        a holder of a percentage of the Shares equal to the aggregate amount of such
        claims (the “Claim
        Amount”)
        taken as a
        percentage of the sum of (i) the Claim Amount and (ii) the aggregate fair
        market
        value of all outstanding Shares on the record date for distributions made
        to the
        holders of such Shares in the related Bankruptcy Proceedings. Notwithstanding
        any right it might otherwise have to assert a higher priority claim in any
        such
        Bankruptcy Proceedings, Seller shall be entitled to receive a distribution
        solely to the extent and only in the form that a holder of such percentage
        of
        the Shares would be entitled to receive in such Bankruptcy Proceedings, and,
        from and after the commencement of such Bankruptcy Proceedings, Seller expressly
        waives (i) any other rights or distributions to which it might otherwise
        be
        entitled in such Bankruptcy Proceedings in respect of its rights and claims
        hereunder and (ii) any rights of setoff it might otherwise be entitled to
        assert
        in respect of such rights and claims.

      

      (b)
        Notwithstanding any provision of this Agreement or any other agreement between
        the parties to the contrary, neither
        the
        obligations of the Buyer nor the obligations of Seller hereunder are secured
        by
        any collateral, security interest, pledge or lien. 

      

      17.   
Share
        Cap.
        Notwithstanding any other provision of this Agreement to the contrary, in
        no
        event shall the Buyer be required to deliver to Seller a number of Shares
        that
        exceeds the Share Cap (as specified in Schedule I), subject to reduction
        by the
        number of Shares delivered hereunder by the Buyer on any prior
        date.

      
         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
              Reference
                Number:
 [   ]                             Account
                Number:  [   ]                                       Page
                18

            

          

        

        

          CONFIDENTIAL
            TREATMENT REQUESTED

        

      

    

    
      

      18.    Account
        Details:

      

      
        	 	
                Account
                  for
                  Payments to MSIL:

              	
                Citibank,
                  NY

                ******

                A/C
                  Morgan
                  Stanley, NY

                ******

                For
                  further
                  credit to Customer Account [·]

              

      

      

      
        	 	
                Account
                  for
                  Payments to Issuer:

              	
                To
                  be provided
                  by Issuer

              

      

      

      19.
         (a)    Morgan Stanley & Co. Incorporated (“MSCO”) is
        acting as agent for both parties but does not guarantee the performance of
        either party; (b) MSCO, MSIL and Counterparty each hereby acknowledges that
        any
        transactions by MSIL or MSCO with respect to Shares will be undertaken by
        MSIL
        as principal for its own account; (c) all of the actions to be taken by MSIL
        and
        MSCO in connection with the Transaction shall be taken by MSIL or MSCO
        independently and without any advance or subsequent consultation with
        Counterparty; and (d) MSCO is hereby authorized to act as agent for Counterparty
        only to the extent required to satisfy the requirements of Rule 15a-6 under
        the
        Exchange Act in respect of the Transaction. MSIL is not a member of the
        Securities Investor Protection Corporation.

      

      20.          
        Governing law: The laws of the State of New York.

       

      
        
           

          
            
              
              

            

            
              
              

              
                

              

            

            
              

                Reference
                  Number:
 [   ]                     Account
                  Number:  [   ]                                       Page
                  19

              

            

          

          

        

      

      
        
          

        

      

       

      Please
        confirm that
        the foregoing correctly sets forth the terms of our agreement by executing
        this
        Confirmation and returning it to us by facsimile
        to the
        number provided on the attached facsimile cover page.

      

      Confirmed
        as of the
        date first written above:

      

      
               

          	
                  FIRSTENERGY
                    CORP.

                   

                	
                  MORGAN
                    STANLEY
                    & CO. INTERNATIONAL LIMITED

                   

                
	
                  By: ___________________________________

                                  Name:

                                 
                    Title:

                	
                  By: ___________________________________

                              
                    Name:

                          
                    Title:

                   

                
	     	
                  MORGAN
                    STANLEY
                    & CO. INCORPORATED, as Agent

                   

                
	 	By: ___________________________________
                              
                    Name:

                          
                    Title:

                

        

        

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              

                Reference
                  Number:
 [   ]                      Account
                  Number:  [   ]                                     Page
                  20

              

            

          

          

 

        

      

      CONFIDENTIAL
        TREATMENT REQUESTED

      

      Schedule
        I

      

      This
        Schedule I,
        dated March 1, 2007, may be amended and/or superseded from time to time by
        mutual agreement of both parties. 

      

      For
        the purposes of this Transaction, the following terms shall have the following
        values/meanings:

      

      1.     
For
        each
        Trading Day during the Calculation Period, the ******
        shall
        equal:

      

      

      
        	
                 

                ******

                 

              	
                 

                ******

                 

              
	
                 

                If
                  the
                  ******
                  is less
                  than ******

                 

              	
                 

                A
                  number of
                  ******
                  up to the
                  lesser of (i) the ******
                  limit
                  pursuant to ******
                  in effect on
                  such Trading Day, without regard to the ******,
                  (ii) the
                  number of ******
                  on the
                  Trading Day immediately preceding such Trading Day, and (iii) ******

                 

              
	
                 

                If
                  the
                  ******
                  is greater
                  than or equal to ******
                  and less than
                  ******

                 

              	
                 

                A
                  number of
                  ******
                  up to the
                  lesser of (i) the ******
                  limit
                  pursuant to ******
                  in effect on
                  such Trading Day, without regard to the ******,
                  (ii) the
                  number of ******
                  on the
                  Trading Day immediately preceding such Trading Day, and (iii) ******

                 

              
	
                 

                If
                  the
                  ******
                  is greater
                  than or equal to ******
                  and less than
                  ******

                 

              	
                 

                A
                  number of
                  ******
                  up to the
                  lesser of (i) the ******
                  limit
                  pursuant to ******
                  in effect on
                  such Trading Day, without regard to the ******,
                  (ii) the
                  number of ******
                  on the
                  Trading Day immediately preceding such Trading Day, and (iii) ******

                 

              
	
                 

                If
                  the
                  ******
                  is greater
                  than or equal to ******
                  and less
                  than******

                 

              	
                 

                A
                  number of
                  ****** up
                  to the
                  lesser of (i) the ******
                  limit
                  pursuant to ******
                  in effect on
                  such Trading Day, without regard to the ******,
                  (ii) the
                  number of ******
                  on the
                  Trading Day immediately preceding such Trading Day, and (iii) ******

                 

              
	
                 

                If
                  the
                  ******
                  is greater
                  than or equal to ******
                  and less than
                  ******

                 

              	
                 

                A
                  number of
                  ******
                  up to the
                  lesser of (i) the ******
                  limit
                  pursuant to ******
                  in effect on
                  such Trading Day, without regard to the ******,
                  (ii) the
                  number of ******
                  on the
                  Trading Day immediately preceding such Trading Day, and (iii) ******

                 

                 

              

      

       

      
         

        
          
            
            

          

          
            
            

            
              

            

          

          
            

              Reference
                Number:
 [   ]                      Account
                Number:  [   ]                                     Page
                21

            

          

        

        

      

       

      
        
          	
                  
                    CONFIDENTIAL
                      TREATMENT REQUESTED

                  

                	
                

        

         

      

      
        	
                 

                If
                  the
                  ******
                  is greater
                  than or equal to ******

                 

              	
                 

                A
                  number of
                  ******
                  equal to the
                  lesser of (i) the ******
                  limit
                  pursuant to ******
                  in effect on
                  such Trading Day, without regard to the ******,
                  (ii) the
                  number of ******
                  on the
                  Trading Day immediately preceding such Trading Day, and (iii) ******

                 

              

      

       

      

      

      2.     
The
        Trade
        Date shall be March 1, 2007

      

      3.     
The
        Initial
        Price equals USD62.63

      

      4.     
        The******
        equal ******

      

      5.     
        The******
        equal ******

      

      6.     
        The******
        equals USD
        ******

      

      7.     
        The******
        equals USD
        ******

      

      8.     
        The******
        equals the product
        of (a) ******%
        and (b) the sum of
        the ******
        and the
******

      

      9.     
        The******
        equals USD******

      

      10.   
The******
        equals the product
        of (a) USD******
        and
        (b) the sum of
        the ******
        and the
******

      

      11.    The
        Scheduled
        Valuation Date shall be ******
        2008, subject to
        adjustment as described in this Confirmation

      

      12.
        The Share Cap shall equal, as of any date (a) the number of authorized but
        unissued shares of the Issuer that are not reserved for future issuance on
        the
        date of this Schedule I minus (b) the maximum number of Shares required to
        be
        delivered to third parties if Buyer elected to settle all of its obligations
        in
        connection with all transactions in the Shares (other than Transactions in
        the
        Shares under this Confirmation) with all third parties that are then currently
        outstanding and unexercised.

       

      
         

        
          
            
            

          

          
            
            

            
              

            

          

          
            

              Reference
                Number:
 [   ]                     Account
                Number:  [   ]                                       
                  Page
                22

            

          

        

        

      

      Annex
        A

      

      COMMUNICATIONS
        PROCEDURES

       

                                  March
        1,
        2007

       

      I.     Introduction

       

      FirstEnergy
        Corp.,
        an Ohio corporation (“Counterparty”)
        and Morgan
        Stanley & Co. Incorporated (“MSCO”),
        as agent for
        Morgan Stanley & Co. International Limited (“MSIL”)
        have adopted
        these communications procedures (the “Communications Procedures”)
        in connection
        with entering into the Confirmation (the “Confirmation”)
        dated as of March
        1, 2007 between MSIL and Counterparty relating to the sale by MSIL to
        Counterparty of common stock, par value $0.10 per share, or security
        entitlements in respect thereof (the “Common Stock”)
        of the
        Counterparty. These Communications Procedures supplement, form part of, and
        are
        subject to the Confirmation.

       

      II.     Communications
        Rules

       

      1.     From
        the date hereof
        until the end of the Calculation Period, neither Counterparty nor any Employee
        or Designee of Counterparty shall (a) engage in any Program-Related
        Communication with any ASR Personnel, other than any of the Permitted Contacts,
        or (b) disclose any Material Non-Public Information to any ASR Personnel,
        other
        than any of the Permitted Contacts, and

       

      2.     Subject
        to the
        preceding provision, the Counterparty, any Employee of Counterparty and any
        Designee of Counterparty may at any time engage in any Non-Program-Related
        Communication with any affiliate or Employee of MSIL or MSCO.

       

      III.     Termination

       

      If,
        in the sole judgment of any ASR Personnel or any affiliate or Employee of
        MSIL
        or MSCO participating in any Communication with Counterparty or any Designee
        of
        Counterparty, such Communication would not be permitted by these Communications
        Procedures, such ASR Personnel or such affiliate or Employee of MSIL or MSCO,
        as
        the case may be, shall immediately terminate such Communication. In such
        case,
        or if such ASR Personnel or such affiliate or Employee of MSIL or MSCO, as
        the
        case may be, determines following completion of any Communication with
        Counterparty or any Employee or Designee of Counterparty that such Communication
        was not permitted by these Communications Procedures, such ASR Personnel
        or such
        affiliate or Employee of MSIL or MSCO, as the case may be, shall promptly
        consult with his or her supervisors and with counsel for MSIL or MSCO, as
        the
        case may be, regarding such Communication. If, in the reasonable judgment
        of
        MSIL’s or MSCO’s, as the case may be, counsel following such consultation, there
        is more than an insignificant risk that such Communication could materially
        jeopardize the availability of the affirmative defenses provided in Rule
        10b5-1
        under the Exchange Act with respect to any ongoing or contemplated activities
        of
        MSIL or MSCO or its affiliates in respect of the Confirmation, it shall be
        an
        Additional Termination Event with respect to the Confirmation.

       

      IV.     Definitions

       

      Capitalized
        terms
        used and not otherwise defined herein shall have the meanings ascribed to
        them
        in the Confirmation. As used herein, the following words and phrases shall
        have
        the following meanings:

       

      “ASR
        Personnel”
means
        any Employee
        of the public side of the Consolidated Equities Division of MSCO that is
        responsible for executing the Transaction; provided
        that MSCO shall
        notify Counterparty of the names of such ASR Personnel upon request made
        to a
        Permitted Contact.

       

      
         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
              Reference
                Number:
 [   ]                     Account
                Number:  [   ]                                       Page
                23

            

          

        

        

      

      “Communication”
means
        any contact
        or communication (whether written, electronic, oral or otherwise) between
        Counterparty, any Employee of Counterparty or one or more Designees of
        Counterparty, on the one hand, and MSIL or MSCO or any of its affiliates
        or
        Employees, on the other hand.

       

      “Designee”
means
        a person
        designated, in writing or orally, by Counterparty to communicate with MSIL
        or
        MSCO on behalf of Counterparty.

       

      “Employee”
means,
        with
        respect to any entity, any owner, principal, officer, director, employee
        or
        other agent or representative of such entity, and any affiliate of any of
        such
        owner, principal, officer, director, employee, agent or
        representative.

       

      “Material
        Non-Public Information”
means
        information
        relating to the Counterparty or the Common Stock that (a) has not been widely
        disseminated by wire service, in one or more newspapers of general circulation,
        by communication from the Counterparty to its shareholders or in a press
        release, or contained in a public filing made by the Counterparty with the
        Securities and Exchange Commission and (b) a reasonable investor might consider
        to be of importance in making an investment decision to buy, sell or hold
        shares
        of Common Stock. For the avoidance of doubt and solely by way of illustration,
        information should be presumed “material” if it relates to such matters as
        dividend increases or decreases, earnings estimates, changes in previously
        released earnings estimates, significant expansion or curtailment of operations,
        a significant increase or decline of orders, significant merger or acquisition
        proposals or agreements, significant new products or discoveries, extraordinary
        borrowing, major litigation, liquidity problems, extraordinary management
        developments, purchase or sale of substantial assets and similar
        matters.

       

      “Non-Program-Related
        Communication”
means
        any
        Communication other than a Program Related Communication.

       

      “Permitted
        Contact”
means
        any Employee
        of the Legal Department of MSCO and any Employee of the Global Capital Markets
        Division of MSCO.

       

      “Program-Related
        Communication”
means
        any
        Communication the subject matter of which relates to the Confirmation or
        any
        Transaction under the Confirmation or any activities of MSCO (or any of its
        affiliates) in respect of the Confirmation or any Transaction under the
        Confirmation.Unassociated Document

    Exhibit
      10.2

    
 

    EXECUTION
      COPY

     

    
      
        

      

     

    U.S.
      $250,000,000

     

    CREDIT
      AGREEMENT

     

    Dated
      as of
      March 2, 2007

     

    Between

     

    FIRSTENERGY
      CORP.

    as
      Borrower,

    

    and

    

    MORGAN
      STANLEY SENIOR FUNDING, INC.

     

    as
      Lender

     

    

    
      
        

      

    

    
      
        
          
             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

    

    

    TABLE
      OF
      CONTENTS

                    

     

    ARTICLE I
      DEFINITIONS AND ACCOUNTING TERMS

     

    
      
        	 	 Page
	 SECTION
                1.01. Certain Defined Terms.	   
                  1
	 SECTION
                1.02. Computation of Time Periods.	  
                 10
	 SECTION
                1.03. Accounting Terms.	   
                10
	 SECTION
                1.04. Certain References.	  
                 10

      

    

     

     ARTICLE II
      AMOUNT AND TERMS OF THE LOAN

     

    
      	SECTION
              2.01. The
              Loan.	   
              10
	SECTION
              2.02. Selection of Interest Periods	   
              11
	SECTION
              2.03. Repayment of the Loan. 	  
               11
	SECTION
              2.04. Interest on the Loan.	   
              11
	SECTION
              2.05. Additional Interest on the Loan.	    11
	SECTION
              2.06. Prepayments. 	   
              12
	SECTION
              2.07. Increased Costs. 	   
              12
	SECTION
              2.08. Illegality. 	   
              13
	SECTION
              2.09. Payments and Computations.	   
              13
	SECTION
              2.10. Taxes.	    14
	
              SECTION
                2.11.  Noteless Agreement; Evidence of Indebtedness.

            	   
              15
	
              SECTION
                2.12.  Extension of Termination Date.

            	   
              16

    

     

    
      ARTICLE III
        CONDITIONS OF LENDING

       

      
        	SECTION
                3.01. Conditions Precedent to the Making of the Loan.	   16

      

    

     

    ARTICLE IV
      REPRESENTATIONS AND WARRANTIES

    
       

      
        	SECTION
                4.01.
                Representations and Warranties of the Borrower.	   17

      

       

    

    ARTICLE V
      COVENANTS OF THE BORROWER

    
      
         

        
          	SECTION
                  5.01.
                  Affirmative
                  Covenants of the Borrower.	  
                  21
	SECTION
                  5.02.
                  Debt to Capitalization Ratio.	   23
	
                  SECTION
                    5.03. Negative Covenants of the Borrower. 

                	  
                  23

        

         

      

    

    ARTICLE VI
      EVENTS OF DEFAULT

    
      
         

        
          	SECTION
                  6.01.
                  Events of Default.	  
                  25

        

         

      

    

     

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    ARTICLE VII
      MISCELLANEOUS

    
       

      
        	SECTION
                7.01.
                Amendments, Etc. 	   
                28
	SECTION
                7.02.
                Notices, Etc.	   
                28
	SECTION
                7.03.
                No Waiver; Remedies.  	    28
	SECTION
                7.04.
                Costs and Expenses; Indemnification.	   
                28
	SECTION
                7.05.
                Right of Set-off.	    29
	SECTION
                7.06.
                Binding Effect.  	   
                30
	SECTION
                7.07.
                Assignments and Participations. 	   
                30
	SECTION
                7.08.
                Governing Law. 	   
                32
	SECTION
                7.09.
                Consent to Jurisdiction; Waiver of Jury Trial.	   
                32
	SECTION
                7.10.
                Severability.	    32
	
                SECTION
                  7.11.
                  Entire Agreement.

              	   
                32
	
                SECTION
                  7.12.
                  Execution in Counterparts.

              	   
                32
	SECTION
                7.13.
                USA PATRIOT Act Notice.	   
                33

      

       

       

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

            
      SCHEDULES AND EXHIBITS

     

    
      	 Schedule
              I	 -	 Lending
              Office
	 	 	 
	 Exhibit A 	 -	 Form of
              Assignment and Acceptance 
	 Exhibit B	 - 	 Form of
              Note
	 Exhibit
              C	 -	 Form of
              Opinion of Gary D. Benz, Esq.
	 Exhibit
              D	 -	 Form of
              Opinion of Akin Gump Strauss Hauer & Feld LLP
	 	 	 

    

     

    

    

    
      
        
          
             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

    

    

    CREDIT
      AGREEMENT

    

    

    CREDIT
      AGREEMENT,
      dated as of March
      2, 2007, between FIRSTENERGY CORP., an Ohio corporation (the
“Borrower”)
and
      MORGAN STANLEY
      SENIOR FUNDING, INC., a Delaware corporation (the “Lender”).

     

    

    PRELIMINARY
      STATEMENTS

    

    (1) The
      Borrower has
      requested that the Lender establish a ninety-day unsecured credit facility
      in
      the amount of $250,000,000 in favor of the Borrower, all of which may be used
      for the repurchase of certain shares of the Borrower.

     

    (2) Subject
      to the terms
      and conditions of this Agreement, the Lender is willing to establish the
      requested credit facility in favor of the Borrower.

     

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

     

     

    ARTICLE I  

    DEFINITIONS
      AND ACCOUNTING TERMS

     

    SECTION
      1.01.  Certain
      Defined Terms.

     

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

     

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

     

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

     

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

     

    “Applicable
      Margin”
      means the interest
      rate per
      annum
      equal to
      0.65%.

     

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

     

    “ATSI”
      means American
      Transmission Systems, Incorporated, an Ohio corporation.

     

    

    
      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

    

    

    

     

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

     

    “Borrower”
has
      the meaning
      set forth in the preamble hereto.

     

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

     

    “CEI”
      means The Cleveland
      Electric Illuminating Company, an Ohio corporation.

     

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

     

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

     

    “Consolidated
      Debt”
means,
      at any date
      of determination, the aggregate Indebtedness of the Borrower and its
      Consolidated Subsidiaries determined on a consolidated basis in accordance
      with
      GAAP, but shall not include (i) Nonrecourse Indebtedness of the Borrower
      and any of its Subsidiaries, (ii) obligations under leases that shall have
      been or should be, in accordance with GAAP, recorded as operating leases in
      respect of which the Borrower or any of its Consolidated Subsidiaries is liable
      as a lessee, (iii) the aggregate principal amount of Stranded Cost
      Securitization Bonds of the Borrower and its Consolidated Subsidiaries and
      (iv)
      the aggregate principal amount of Trust Preferred Securities and Junior
      Subordinated Deferred Interest Obligations not exceeding 15% of the Total
      Capitalization of the Borrower and its Consolidated Subsidiaries (determined,
      for purposes of such calculation, without regard to the amount of Trust
      Preferred Securities and Junior Subordinated Deferred Interest Debt Obligations
      outstanding of the Borrower); provided
      that the amount of
      any mandatory principal amortization or defeasance of Trust Preferred Securities
      or Junior Subordinated Deferred Interest Debt Obligations prior to the
      Termination Date shall be included in this definition of Consolidated
      Debt.

     

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

     

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

     

    “Debt
      to
      Capitalization Ratio”
means
      the ratio of
      Consolidated Debt of the Borrower to Total Capitalization of the
      Borrower.

     

    

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    

    “Eligible
      Assignee”
      means (i) a
      commercial bank organized under the laws of the United States, or any State
      thereof; (ii) a commercial bank organized under the laws of any other
      country that is a member of the OECD or has concluded special lending
      arrangements with the International Monetary Fund associated with its “General
      Arrangements to Borrow”, or a political subdivision of any such country,
provided
      that such bank is
      acting through a branch or agency located in the United States; (iii) a
      finance company, insurance company or other financial institution or fund
      (whether a corporation, partnership or other entity) engaged generally in
      making, purchasing or otherwise investing in commercial loans in the ordinary
      course of its business; or (iv) the central bank of any country that is a
      member of the OECD; provided,
      however,
      that (A) any
      Person described in clause (i), (ii), (iii) or (iv) above shall
      also (x) have outstanding unsecured indebtedness that is rated A- or better
      by S&P or A3 or better by Moody’s (or an equivalent rating by another
      nationally recognized credit rating agency of similar standing if neither of
      such corporations is in the business of rating unsecured indebtedness of
      entities engaged in such businesses) and (y) have combined capital and
      surplus (as established in its most recent report of condition to its primary
      regulator, if applicable) of not less than $250,000,000 (or its equivalent
      in
      foreign currency), (B) any Person described in clause (ii), (iii) or
      (iv) above shall, on the date on which it is to become a lender hereunder,
      be entitled to receive payments hereunder without deduction or withholding
      of
      any United States Federal income taxes (as contemplated by Section 2.10(d))
      and (C) any Person described in clause (i), (ii), (iii) or (iv) above shall,
      in
      addition, be reasonably acceptable to the Lender.

     

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

     

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

     

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

     

    

    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

    

    “Eurodollar
      Rate”
      means the interest
      rate per
      annum
      at which eurodollar
      deposits are offered in the London interbank market for a term equivalent to
      the
      applicable Interest Period determined by reference to Telerate page 3750 at
      11:00 a.m. (London time) two Business Days before the first day of such Interest
      Period for a period equal to such Interest Period. If
      such rate is not
      available at such time for any reason, then the “Eurodollar Rate” for such
      Interest Period shall be the rate per annum determined by the Lender to be
      the
      rate at which deposits in dollars for delivery on the first day of such Interest
      Period in same day funds in the approximate amount of the outstanding principal
      amount of the Loan at such time and with a term equivalent to such Interest
      Period would be offered by Citibank, N.A.’s London branch to major banks in the
      London interbank eurodollar market at their request at approximately 11:00
      a.m.
      (London time) two Business Days prior to the commencement of such Interest
      Period.

     

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

     

    “Event
      of
      Default”
      has the meaning set
      forth in Section 6.01.

     

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

     

    “Existing
      Credit Agreement”
means
      the Credit
      Agreement, dated as of August 24, 2006, among the Borrower,
      FirstEnergy
      Solutions Corp., an Ohio corporation, American Transmission Systems,
      Incorporated, an Ohio corporation, Ohio Edison Company, an Ohio corporation,
      Pennsylvania Power Company, a Pennsylvania corporation, The Cleveland Electric
      Illuminating Company, an Ohio corporation, The Toledo Edison Company, an Ohio
      corporation, Jersey Central Power & Light Company, a New Jersey corporation,
      Metropolitan Edison Company, a Pennsylvania corporation, and Pennsylvania
      Electric Company, a Pennsylvania corporation, as borrowers,
      the banks and
      other financial institutions party thereto, Citibank, N.A., as administrative
      agent for the lenders thereunder, the fronting banks party thereto from time
      to
      time and the swing line lenders party thereto from time to time, as the same
      may
      be amended, restated, modified or extended from time to time.

     

    “FERC”
means
      the Federal
      Energy Regulatory Commission or successor organization.

     

    “FES”
      means FirstEnergy
      Solutions Corp., an Ohio corporation.

     

    

    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

    

    “FERC
      PUHCA 2005 Filing”
means
      the
      informational filing submitted to the FERC on February 21, 2006, pursuant to
      the
      Public Utility Holding Company Act of 2005 and the FERC's Order No. 667, which
      enabled the Borrower to continue to rely on the financing authorizations
      authorized in the SEC Order.

     

    “First
      Mortgage Indenture”
      means, with respect
      to any Significant Subsidiary, an indenture or similar instrument pursuant
      to
      which such Person may issue bonds, notes or similar instruments secured by
      a
      lien on all or substantially all of such Person’s fixed assets.

     

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

     

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

     

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

     

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

     

    

    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

    

    “Interest
      Period”
      means the period
      commencing on the date of the making of the Loan and ending on the last day
      of
      the period selected by the Borrower pursuant to the provisions below and,
      thereafter, each subsequent period commencing on the last day of the immediately
      preceding Interest Period and ending on the last day of the period selected
      by
      the Borrower pursuant to the provisions below. The duration of each such
      Interest Period shall be one, two or three months, as the Borrower may select
      by
      notice to the Lender pursuant to Section 2.02; provided,
      however,
      that:

     

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

     

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

     

    “JCP&L”
      means Jersey
      Central Power & Light Company, a New Jersey corporation.

     

    “Junior
      Subordinated Deferred Interest Debt Obligations”
means
      subordinated
      deferrable interest debt obligations of the Borrower (A) for which the maturity
      date is subsequent to the Termination Date and (B) that are fully subordinated
      in right of payment to the Indebtedness hereunder.

     

    “Lending
      Office”
      means the office of
      the Lender specified as its “Lending
      Office”
      on Schedule I hereto or, in the case of any Eligible Assignee that becomes
      a lender hereunder, in the Assignment and Acceptance pursuant to which it became
      a lender, or such other office of the Lender or such Eligible Assignee as such
      Person may from time to time specify to the Borrower.

     

    “Lender”
      has the meaning set
      forth in the preamble 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, 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”
means
      the loan
      made by the Lender to the Borrower pursuant to Section 2.01.

     

    “Loan
      Documents”
      means this
      Agreement and any Note.

     

    

    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

    

    “Mansfield
      Sale/Leaseback”
means
      the proposed
      sale and leaseback by a Subsidiary of the Borrower of its owned portion of
      Unit
      1 of the Bruce Mansfield Plant currently scheduled to be consummated in the
      second quarter of 2007. 

     

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

     

    “Met-Ed”
      means Metropolitan
      Edison Company, a Pennsylvania corporation.

     

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

     

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

     

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

     

    
      	 	
              (i)

            	
              recourse
                to
                the named obligor with respect to such Indebtedness (the “Debtor”)
                for amounts
                limited to the cash flow or net cash flow (other than historic cash
                flow)
                from the asset; and

            

    

     

    
      	 	
              (ii)

            	
              recourse
                to
                the Debtor for the purpose only of enabling amounts to be claimed
                in
                respect of such Indebtedness in an enforcement of any security interest
                or
                lien given by the Debtor over the asset or the income, cash flow
                or other
                proceeds deriving from the asset (or given by any shareholder or
                the like
                in the Debtor over its shares or like interest in the capital of
                the
                Debtor) to secure the Indebtedness, but only if the extent of the
                recourse
                to the Debtor is limited solely to the amount of any recoveries made
                on
                any such enforcement; and

            

    

     

    
      	 	
              (iii)

            	
              recourse
                to
                the Debtor generally or indirectly to any Affiliate of the Debtor,
                under
                any form of assurance, undertaking or support, which recourse is
                limited
                to a claim for damages (other than liquidated damages and damages
                required
                to be calculated in a specified way) for a breach of an obligation
                (other
                than a payment obligation or an obligation to comply or to procure
                compliance by another with any financial ratios or other tests of
                financial condition) by the Person against which such recourse is
                available.

            

    

     

    “Note”
      means any
      promissory note issued at the request of the Lender pursuant to
      Section 2.11 in the form of Exhibit B hereto.

     

    “OE”
      means The Ohio
      Edison Company, an Ohio corporation.

     

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

     

    

    
      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

    

    “Organizational
      Documents”
shall
      mean, as
      applicable to any Person, the charter, code of regulations, articles of
      incorporation, by-laws, certificate of formation, operating agreement,
      certificate of partnership, partnership agreement, certificate of limited
      partnership, limited partnership agreement or other constitutive documents
      of
      such Person.

     

    “Other
      Taxes”
      has the meaning set
      forth in Section 2.10(b).

     

    “Patriot
      Act”
means
      the USA
      Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001),
      as
      in effect from time to time.

    

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

     

    “Penelec”
      means Pennsylvania
      Electric Company, a Pennsylvania corporation.

     

    “Penn”
      means Pennsylvania
      Power Company, a Pennsylvania corporation.

     

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

     

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

     

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

     

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

     

    “SEC
      Order” means
      the order
      issued by the SEC that authorized the Borrower to obtain extensions of credit
      until February 8, 2006, which authorization was extended through December 31,
      2007, pursuant to the FERC PUHCA 2005 Filing.

     

    “Significant
      Subsidiaries”
means
      (i) each regulated energy Subsidiary of the Borrower, including, but not
      limited to, OE, Penn, CEI, TE, JCP&L, Met-Ed and Penelec, and any successor
      to any of them, (ii) FES and ATSI, and (iii)  each other Subsidiary of the
      Borrower the annual revenues of which exceed $100,000,000 or the total assets
      of
      which exceed $50,000,000. 

     

    

    
      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

    

    

    “Stranded
      Cost Securitization Bonds”
means
      any
      instruments, pass-through certificates, notes, debentures, certificates of
      participation, bonds, certificates of beneficial interest or other evidences
      of
      indebtedness or instruments evidencing a beneficial interest that are secured
      by
      or otherwise payable from non-bypassable cent per kilowatt hour charges
      authorized pursuant to an order of a state commission regulating public
      utilities to be applied and invoiced to customers of such utility. The charges
      so applied and invoiced must be deducted and stated separately from the other
      charges invoiced by such utility against its customers.

     

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

     

    “Taxes”
      has the meaning set
      forth in Section 2.10(a).

     

    “Termination
      Date”
      means June 1, 2007,
      subject to the extension described in Section 2.12 hereof.

     

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

     

    “Total
      Capitalization”
means,
      with
      respect to the Borrower at any date of determination the sum, without
      duplication, of (i) Consolidated Debt of the Borrower,
      (ii) the
      capital stock
      (but excluding treasury stock and capital stock subscribed and unissued) and
      other equity accounts (including retained earnings and paid in capital but
      excluding accumulated other comprehensive income and loss) of
      the Borrower and
      its Consolidated Subsidiaries, (iii) consolidated equity of the preference
      stockholders of the Borrower and its Consolidated Subsidiaries, and
      (iv) the aggregate principal amount of Trust Preferred Securities and
Junior
      Subordinated Deferred Interest Debt Obligations.

     

    

    
      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

    

    “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 the
      Borrower or any Consolidated Subsidiary of the Borrower, (B) that are not
      subject to mandatory redemption or the underlying securities, if any, of which
      are not subject to mandatory redemption, (C) that are perpetual or mature no
      less than 30 years from the date of issuance, (D) the indebtedness issued in
      connection with which, including any guaranty, is subordinate in right of
      payment to the unsecured and unsubordinated indebtedness of the issuer of such
      indebtedness or guaranty, and (E) the terms of which permit the deferral of
      the
      payment of interest or distributions thereon to a date occurring after the
      Termination Date. 

     

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

     

    “Unmatured
      Default”
means
      any event
      that, with the giving of notice or the passage of time, or both, would
      constitute an Event of Default. 

     

    SECTION
      1.02.  Computation
      of Time Periods.

     

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

     

    SECTION
      1.03.  Accounting
      Terms.

     

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

     

    SECTION
      1.04.  Certain
      References.

     

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

     

    ARTICLE II  

    AMOUNT
      AND
      TERMS OF THE LOAN

     

    SECTION
      2.01.  The
      Loan.

     

    The
      Lender agrees,
      on the terms and conditions hereinafter set forth, to make a single advance
      to
      the Borrower in U.S. dollars in the principal amount of $250,000,000 on the
      date
      of this Agreement.

     

    

      
        
          
          

        

        
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    SECTION
      2.02.  of
      Interest Periods

     

    On
      the date of this
      Agreement, on or before the making of the Loan by the Lender, the Borrower
      shall
      specify the duration of initial Interest Period applicable to the Loan, which
      shall be subject to the limitations stated in the definition of “Interest
      Period” in Section 1.01. Thereafter, on the third Business Day prior to the
      expiration of the Interest Period then in effect, the Borrower shall notify
      the
      Lender of the duration of the next succeeding Interest Period, which
      shall be
      subject to the limitations stated in the definition of “Interest Period” in
      Section 1.01.

     

    SECTION
      2.03.  Repayment
      of the Loan.

     

    The
      Borrower agrees
      to repay the outstanding principal amount of the Loan to the Lender no later
      than the Termination Date.

     

    SECTION
      2.04.  Interest
      on the Loan.

     

    The
      Borrower agrees
      to pay interest on the unpaid principal amount of the Loan from the date of
      this
      Agreement until such principal amount shall be paid in full, at a
      rate per annum
      equal to the sum of the Eurodollar Rate for the Interest Period then in effect
      plus
      the Applicable
      Margin, payable on the last day of each Interest Period, on the Termination
      Date
      and on the date the Loan or any portion thereof shall be prepaid in accordance
      with Section 2.06.

     

    SECTION
      2.05.  Additional
      Interest on the Loan.

     

    The
      Borrower agrees
      to pay to the Lender, so long as the Lender shall be required under regulations
      of the Board of Governors of the Federal Reserve System to maintain reserves
      with respect to liabilities or assets consisting of or including Eurocurrency
      Liabilities, additional interest on the unpaid principal amount of the Loan,
      from the date of this Agreement until such principal amount is paid in full,
      at
      an interest rate per
      annum
      equal at all times
      to the remainder obtained by subtracting (i) the Eurodollar Rate for the
      Interest Period then in effect from (ii) the rate obtained by dividing such
      Eurodollar Rate by a percentage equal to 100% minus the Eurodollar Rate Reserve
      Percentage for such Interest Period, payable on each date on which interest
      is
      payable on the Loan hereunder; provided,
      that the Lender
      shall not be entitled to demand additional interest under this Section 2.05
      more than 90 days following the last day of the Interest Period in respect
      of which such demand is made; provided
      further, however,
      that the foregoing
      proviso shall in no way limit the right of the Lender to demand or receive
      such
      additional interest to the extent that such additional interest relates to
      the
      retroactive application by the Board of Governors of the Federal Reserve System
      of any regulation described above if such demand is made within 90 days
      after the implementation of such retroactive regulation. Such additional
      interest shall be determined by the Lender and notified to the Borrower, and
      such determination shall be conclusive and binding for all purposes, absent
      manifest error.

     

    

      
        
          
          

        

        
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                        SECTION
      2.06.     Prepayments.

     

    (a)  Optional.
      The Borrower may
      at any time prepay the outstanding principal amount of the Loan in whole or
      in
      part, together with accrued interest to the date of such prepayment on the
      principal amount prepaid, upon notice thereof given to the Lender not later
      than
      11:00 a.m. (New York time) on the second Business Day prior to any such
      prepayment provided,
      however,
      that (i) each
      partial prepayment of the Loan shall be in an aggregate principal amount not
      less than $5,000,000 and (ii) the Borrower shall be obligated to reimburse
      the Lender in respect of any amounts payable pursuant to
      Section 7.04(b) on the date of such prepayment.

     

    (b)  Mandatory.
      Promptly upon the
      receipt by the Borrower or any of its Subsidiaries of cash proceeds with respect
      to the Mansfield Sale/Leaseback (net of any costs and expenses incurred by
      the
      Borrower and its Affiliates in connection therewith, and the amount of all
      taxes
      (if any) payable by the Borrower and its Affiliates in connection therewith),
      the Borrower shall prepay the Loan in the amount of such proceeds within five
      Business Days after receipt thereof. In addition, in the event that, after
      the
      date of this Agreement, there is any increase in the aggregate commitments
      of
      the lenders under the Existing Credit Agreement that is available to be borrowed
      pursuant to Section 2.06(b) thereof, and capable of being borrowed, by the
      Borrower thereunder, the Borrower shall borrow such additional amounts under
      the
      Existing Credit Agreement and, upon receipt thereof, shall prepay the Loan
      in an
      amount equal to such additional amounts. Any prepayment of the Loan shall be
      accompanied by accrued interest on the amount prepaid to the date of such
      prepayment, and the Borrower shall be obligated to reimburse the Lender in
      respect of any amounts payable pursuant to Section 7.04(b) on the date
      of such prepayment. 

     

    SECTION
      2.07.  Increased
      Costs.

     

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

     

    

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

    (b)  If
      the Lender
      determines that compliance with any law or regulation or any guideline or
      request from any central bank or other governmental authority (whether or not
      having the force of law), issued, promulgated or made (as the case may be)
      after
      the date hereof, affects or would affect the amount of capital required or
      expected to be maintained by the Lender or any corporation controlling the
      Lender and that the amount of such capital is increased by or based upon the
      making or funding of the Loan hereunder, then, upon demand by the Lender, the
      Borrower shall immediately pay to the Lender, from time to time as specified
      by
      the Lender, additional amounts sufficient to compensate the Lender or such
      corporation in the light of such circumstances, to the extent that the Lender
      determines such increase in capital to be allocable to the making or funding
      of
      the Loan hereunder. A certificate as to such amounts submitted to the Borrower
      by the Lender shall constitute such demand and shall be conclusive and binding
      for all purposes, absent manifest error.

     

    SECTION
      2.08.  Illegality.

     

    Notwithstanding
      any
      other provision of this Agreement, if the Lender shall notify the Borrower
      that
      the introduction of or any change in or in the interpretation of any law or
      regulation makes it unlawful, or any central bank or other governmental
      authority asserts that it is unlawful, for the Lender to fund or maintain the
      Loan at the Eurodollar Rate hereunder, the Loan shall forthwith bear interest
      at
      a rate per annum to be agreed between the Borrower and the Lender. Lender upon
      becoming aware of circumstances that would permit the Lender to notify the
      Borrower of any illegality under this Section 2.08 shall use its best
      efforts (consistent with its internal policy and legal and regulatory
      restrictions) to change the jurisdiction of its Applicable Lending Office if
      the
      making of such change would avoid or eliminate such illegality and would not,
      in
      the reasonable judgment of the Lender, be otherwise disadvantageous to the
      Lender.

     

    SECTION
      2.09.  Payments
      and Computations.

     

    (a)  The
      Borrower shall
      make each payment hereunder and under any Note not later than 12:00 noon (New
      York time) on the day when due in U.S. dollars to the Lender at its address
      referred to in Section 7.02 in same day funds, without set-off,
      counterclaim or defense. Upon the effective date specified in any Assignment
      and
      Acceptance, the Lender shall make all payments hereunder and under any Note
      in
      respect of the interest assigned thereby to the assignee thereunder, and the
      parties to such Assignment and Acceptance shall make all appropriate adjustments
      in such payments for periods prior to such effective date directly between
      themselves.

     

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

     

    

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

    (c)  All
      computations of
      interest shall be made by the Lender, on the basis of a year of 360 days, for
      the actual number of days (including the first day but excluding the last day)
      occurring in the period for which such interest is payable. Each determination
      by the Lender of an interest rate hereunder shall be conclusive and binding
      for
      all purposes, absent manifest error.

     

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

     

    (e)  Any
      amount payable
      by the Borrower hereunder or under any Note that is not paid when due (whether
      at stated maturity, by acceleration or otherwise) shall (to the fullest extent
      permitted by law) bear interest from the date when due until paid in full at
      a
      rate per
      annum
      equal at all times
      to the rate otherwise applicable hereunder plus
      2% per
      annum,
      payable upon
      demand.

     

    (f)  To
      the extent that
      any payment by the Borrower is made to the Lender, or the Lender exercises
      its
      right of setoff, and such payment or the proceeds of such setoff or any part
      thereof is subsequently invalidated, declared to be fraudulent or preferential,
      set aside or required (including pursuant to any settlement entered into by
      the
      Lender in its discretion) to be repaid to a trustee, receiver or any other
      party, in connection with any proceeding under any bankruptcy, insolvency or
      other similar law now or hereafter in effect or otherwise (a “Returned
      Payment”),
      then to the
      extent of such recovery, the obligation or part thereof originally intended
      to
      be satisfied shall be revived and continued in full force and effect as if
      such
      payment had not been made or such setoff had not occurred.

     

    SECTION
      2.10.  Taxes.

     

    (a)  Any
      and all payments
      by the Borrower hereunder and under any Note shall be made, in accordance with
      Section 2.09, free and clear of and without deduction for any and all
      present or future taxes, levies, imposts, deductions, charges or withholdings,
      and all liabilities with respect thereto, excluding,
      in the case of the
      Lender, such taxes, levies, imposts, deductions and charges in the nature of
      franchise taxes or taxes measured by the gross receipts or net income of the
      Lender, by any jurisdiction in which the Lender, is organized, located or
      conducts business or any political subdivision thereof and by the jurisdiction
      of the Lender’s Lending Office or any political subdivision thereof (all such
      non-excluded taxes, levies, imposts, deductions, charges, withholdings and
      liabilities being herein referred to as “Taxes”).
      If the Borrower
      shall be required by law to deduct any Taxes from or in respect of any sum
      payable hereunder or under any Note to the Lender (i) the sum payable shall
      be increased as may be necessary so that after making all required deductions
      (including deductions applicable to additional sums payable under this
      Section 2.10) the Lender receives an amount equal to the sum it would have
      received had no such deductions been made, (ii) the Borrower shall make
      such deductions and (iii) the Borrower shall pay the full amount deducted
      to the relevant taxation authority or other authority in accordance with
      Applicable Law.

     

    

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

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

     

    (c)  The
      Borrower agrees
      to indemnify the Lender for the full amount of Taxes or Other Taxes (including,
      without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
      amounts payable under this Section 2.10) paid by the Lender and any
      liability (including penalties, interest and expenses) arising therefrom or
      with
      respect thereto, whether or not such Taxes or Other Taxes were correctly or
      legally asserted. This indemnification shall be made within 30 days from the
      date the Lender makes written demand therefor.

     

    (d)  Any
      assignee of the
      Lender that is organized under the laws of a jurisdiction outside the United
      States shall provide the Lender and the Borrower with the forms prescribed
      by
      the Internal Revenue Service of the United States certifying that such assignee
      is exempt from United States withholding taxes with respect to all payments
      to
      be made to such assignee hereunder and under any Note. If for any reason during
      the term of this Agreement, any assignee becomes unable to submit the forms
      referred to above or the information or representations contained therein are
      no
      longer accurate in any material respect, such assignee shall promptly notify
      the
      Borrower in writing to that effect. Unless the Lender and the Borrower have
      received forms or other documents satisfactory to them indicating that payments
      hereunder or under any Note are not subject to United States withholding tax,
      the Borrower shall withhold taxes from such payments at the applicable statutory
      rate in the case of payments to or for any Person organized under the laws
      of a
      jurisdiction outside the United States.

     

    (e)  The
      Lender, or any
      assignee claiming any additional amounts payable pursuant to this
      Section 2.10 shall use its best efforts (consistent with its internal
      policy and legal and regulatory restrictions) to change the jurisdiction of
      its
      Lending Office if the making of such a change would avoid the need for, or
      reduce the amount of, any such additional amounts that may thereafter accrue
      and
      would not, in the reasonable judgment of such Person, be otherwise
      disadvantageous to such Person.

     

    (f)  Without
      prejudice to
      the survival of any other agreement of the Borrower hereunder, the agreements
      and obligations of the Borrower contained in this Section 2.10 shall
      survive the payment in full of principal and interest hereunder and under any
      Note.

     

    SECTION
      2.11.  Noteless
      Agreement; Evidence of Indebtedness.

     

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

     

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

     

    

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

    (c)  The
      Lender may
      request that the Loan be evidenced by a Note. In such event, the Borrower shall
      prepare, execute and deliver to the Lender a Note payable to the order of the
      Lender. Thereafter, the Loan and interest thereon shall at all times (including
      after any assignment pursuant to Section 7.07) be represented by one or
      more Notes payable to the order of the payee named therein or any assignee
      pursuant to Section 7.07, except to the extent that the Lender or any such
      assignee subsequently returns any such Note for cancellation and requests that
      the Loan once again be evidenced as described in subsection (a)
      above.

     

    SECTION
      2.12.  Extension
      of Termination Date.

     

    So
      long as no Event
      of Default or Unmatured Default has occurred and is continuing, the Borrower
      shall have the right, no later than 10 days prior to the then-effective
      Termination Date, to extend the Termination Date for a period of 30 days;
provided,
      that (i) the
      representations and warranties contained in Section 4.01 are correct in all
      material respects on and as of the date of extension of the Termination Date,
      before and after giving effect to such extension, as though made on and as
      of
      such date, and that, on or prior to the date of such extension, and (ii) the
      Lender shall have received the following, each dated such date and in form
      and
      substance reasonably satisfactory to the Lender: (x) a certificate of a
      duly authorized officer of the Borrower to the effect that as of the date of
      extension of the Termination Date the statement set forth in clause (i) above
      is
      true, and (y) certified copies of the resolutions of the Board of Directors
      of the Borrower authorizing such extension and the performance of this Agreement
      on and after the date of extension of the Termination Date, and of all documents
      evidencing other necessary corporate action and governmental and regulatory
      approvals with respect to this Agreement and such extension of the Termination
      Date.

     

     

    ARTICLE III 

    CONDITIONS
      OF LENDING

     

    SECTION
      3.01.  Conditions
      Precedent to the Making of the Loan.

     

    The
      obligation of
      the Lender to make the Loan to the Borrower on the date of this Agreement is
      subject to the conditions precedent that on or before such date:

     

    (a)  The
      Lender shall
      have received the following, each dated the same date (except for the financial
      statements referred to in paragraph (iv)), in form and substance
      satisfactory to the Lender:

     

    (i)  This
      Agreement, duly
      executed by each of the parties hereto, and any Note requested by the Lender
      pursuant to Section 2.11(c), duly completed and executed by the Borrower
      and payable to the order of the Lender;

     

    (ii)  Certified
      copies of
      the resolutions of the Board of Directors of the Borrower approving this
      Agreement and the other Loan Documents and of all documents evidencing any
      other
      necessary corporate action with respect to this Agreement and the Loan
      Documents;

     

    

      
        
          
          

        

        
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    (iii)  A
      certificate of the
      Secretary or an Assistant Secretary of the Borrower certifying (A) the
      names and true signatures of the officers of the Borrower authorized to sign
      each Loan Document and the other documents to be delivered hereunder;
      (B) that attached thereto are true and correct copies of the Organizational
      Documents of the Borrower, in each case as in effect on such date; and
      (C) that attached thereto are true and correct copies of all governmental
      and regulatory authorizations and approvals (including the SEC Order) required
      for the due execution, delivery and performance by the Borrower of this
      Agreement and each other Loan Document;

     

    (iv)  Copies
      of the
      consolidated balance sheets of the Borrower and its Subsidiaries as of
      December 31, 2006, and the related consolidated statements of income,
      retained earnings and cash flows of the Borrower and its Subsidiaries for the
      fiscal year then ended, certified by PricewaterhouseCoopers LLP;

     

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

     

    (vi)  An
      opinion of Akin
      Gump Strauss Hauer & Feld LLP, special counsel for the Borrower,
      substantially in the form of Exhibit D hereto; and

     

    (vii)  Such
      other
      certifications, opinions, financial or other information, approvals and
      documents as the Lender may reasonably request, all in form and substance
      satisfactory to the Lender. 

     

    (b)  The
      Lender shall
      have received all documentation and information required by regulatory
      authorities under applicable “know your customer” and anti-money laundering
      rules and regulations, including without limitation the Patriot Act.

     

    (c)  The
      representations
      and warranties of the Borrower contained in Section 4.01 hereof are true
      and correct on and as of the date of the making of the Loan, before and after
      giving effect to the making of the Loan and to the application of the proceeds
      therefrom. 

     

     

    ARTICLE IV 

    REPRESENTATIONS
      AND WARRANTIES

     

    SECTION
      4.01.  Representations
      and Warranties of the Borrower.

     

    The
      Borrower
      represents and warrants as follows:

     

    (a)  Corporate
      Existence and Power.
      It is a
      corporation duly incorporated, validly existing and in good standing under
      the
      laws of the State of Ohio, is duly qualified to do business as a foreign
      corporation in and is in good standing under the laws of each state in which
      the
      ownership of its properties or the conduct of its business makes such
      qualification necessary except where the failure to be so qualified would not
      have a material adverse effect on its business or financial condition or its
      ability to perform its obligations under the Loan Documents, and has all
      corporate powers and all material governmental licenses, authorizations,
      consents and approvals required to carry on its business as now
      conducted.

     

    

      
        
          
          

        

        
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    (b)  Corporate
      Authorization.
      The execution,
      delivery and performance by it of each Loan Document have been duly authorized
      by all necessary corporate action on its part and do not, and will not, require
      the consent or approval of its shareholders, or any trustee or holder of any
      Indebtedness or other obligation of it, other than such consents and approvals
      as have been duly obtained, given or accomplished.

     

    (c)  No
      Violation, Etc.
      Neither the
      execution, delivery or performance by it of this Agreement or any other Loan
      Document, nor the consummation by it of the transactions contemplated hereby
      or
      thereby, nor compliance by it with the provisions hereof or thereof, conflicts
      or will conflict with, or results or will result in a breach or contravention
      of
      any of the provisions of its Organizational Documents, any Applicable Law,
      or
      any indenture, mortgage, lease or any other agreement or instrument to which
      it
      is party or by which its property is bound, or results or will result in the
      creation or imposition of any Lien upon any of its property except as provided
      herein. There is no provision of its Organizational Documents, or any Applicable
      Law, or any such indenture, mortgage, lease or other agreement or instrument
      that materially adversely affects, or in the future is likely (so far as it
      can
      now foresee) to materially adversely affect, its business, operations, affairs,
      condition, properties or assets or its ability to perform its obligations under
      this Agreement or any other Loan Document. The Borrower and each of its
      Subsidiaries is in compliance with all laws (including, without limitation,
      ERISA and Environmental Laws), regulations and orders of any Governmental
      Authority applicable to it or its property and all indentures, agreements and
      other instruments binding upon it or its property, except where the failure
      to
      do so, individually or in the aggregate, has not had and could not reasonably
      be
      expected to have a material adverse effect on (i) the business, assets,
      operations, condition (financial or otherwise) or prospects of the Borrower
      and
      its Subsidiaries taken as a whole, or (ii) the legality, validity or
      enforceability of any of the Loan Documents or the rights, remedies and benefits
      available to the parties thereunder or the ability of the Borrower to perform
      its obligations under the Loan Documents.

     

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

     

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

     

    

      
        
          
          

        

        
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    (f)  Litigation.
      Except as
      disclosed in the Borrower’s Annual Report on Form 10-K for the fiscal year
      ended December 31, 2006 and its Current Reports on Form 8-K filed in 2007
      prior to the date hereof (copies of which have been furnished to the Lender),
      there is no pending or threatened action or proceeding (including, without
      limitation, any proceeding relating to or arising out of Environmental Laws)
      against it or any of its Subsidiaries before any court, governmental agency
      or
      arbitrator that has a reasonable possibility of having a material adverse effect
      on the business, condition (financial or otherwise), results of operations
      or
      prospects of it and its consolidated subsidiaries, taken as a whole, or on
      the
      ability of the Borrower to perform its obligations under this Agreement or
      any
      other Loan Document, and there has been no development in the matters disclosed
      in such filings that has had such a material adverse effect.

     

    (g)  Financial
      Statements; Material Adverse Change.
      The consolidated
      balance sheets of the Borrower and its Subsidiaries as at December 31,
      2006, and the related consolidated statements of income, retained earnings
      and
      cash flows of the Borrower and its Subsidiaries for the fiscal year then ended,
      certified by PricewaterhouseCoopers LLP, independent public accountants, copies
      of each of which have been furnished to the Lender, in each case as amended
      and
      restated to the date hereof, present fairly the consolidated financial position
      of the Borrower and its Subsidiaries as at such date and the consolidated
      results of the operations of the Borrower and its Subsidiaries for the period
      ended on such date, all in accordance with GAAP consistently applied. Except
      as
      disclosed in the Borrower’s Annual Report on Form 10-K for the fiscal year ended
      December 31, 2006 and its Current Reports on Form 8-K filed in 2007 prior to
      the
      date hereof (copies of which have been furnished to the Lender), there has
      been
      no material adverse change in the business, condition (financial or otherwise),
      results of operations or prospects of the Borrower and its Consolidated
      Subsidiaries, taken as a whole, since December 31, 2006.

     

    (h)  ERISA.

     

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

     

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

     

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

     

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

     

    

      
        
          
          

        

        
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    (j)  Use
      of
      Proceeds.
      The proceeds of the
      Loan will be used solely to fund repurchases of certain of the Borrower’s equity
      securities or to repay other short-term borrowings incurred for such
      purpose.

     

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

     

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

     

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

     

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

     

    (o)  No
      Material Misstatements. The
      reports,
      financial statements and other written information furnished by or on behalf
      of
      the Borrower to the Lender pursuant to or in connection with the Loan Documents
      and the transactions contemplated thereby do not contain, when taken as a whole,
      any untrue statement of a material fact and do 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 made, not misleading in any material
      respect.

     

    

      
        
          
          

        

        
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ARTICLE V  

    COVENANTS
      OF
      THE BORROWER

     

    SECTION
      5.01.  Affirmative
      Covenants of the Borrower.

     

    So
      long as any
      amount payable by the Borrower hereunder shall remain unpaid, the Borrower
      will:

     

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

     

    (b)  Compliance
      with Laws, Etc.
      Comply, and cause
      each of its Subsidiaries to comply, in all material respects with all applicable
      laws, rules, regulations, and orders of any Governmental Authority, the
      noncompliance with which would materially and adversely affect the business
      or
      condition of the Borrower and its Subsidiaries, taken as a whole, such
      compliance to include, without limitation, compliance with the Patriot Act,
      regulations promulgated by the U.S. Treasury Department Office of Foreign Assets
      Control, Environmental Laws and ERISA and paying before the same become
      delinquent all material taxes, assessments and governmental charges imposed
      upon
      it or upon its property, except to the extent compliance with any of the
      foregoing is then being contested in good faith by appropriate legal
      proceedings.

     

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

     

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

     

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

     

    

      
        
          
          

        

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

     

    (g)  Reporting
      Requirements.
      Furnish, or cause
      to be furnished, to the Lender, the following:

     

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

     

    (ii)  as
      soon as available
      and in any event within 50 days after the close of the fiscal quarter of the
      Borrower ended March 31, 2007, consolidated balance sheets of the Borrower
      and
      its Subsidiaries as at the end of such quarter and consolidated statements
      of
      income of the Borrower and its Subsidiaries for the period commencing at the
      end
      of the previous fiscal year and ending with the end of such quarter, fairly
      presenting the financial condition of the Borrower and its Subsidiaries as
      at
      such date and the results of operations of the Borrower and its Subsidiaries
      for
      such period and setting forth in each case in comparative form the corresponding
      figures for the corresponding period of the preceding fiscal year, all in
      reasonable detail and duly certified (subject to year-end audit adjustments)
      by
      the chief financial officer, treasurer, assistant treasurer or controller of
      the
      Borrower as having been prepared in accordance with GAAP consistently
      applied;

     

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

     

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

     

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

     

    

      
        
          
          

        

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

     

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

     

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

     

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

     

    (h)  SEC
      Order.
      Maintain the SEC
      Order in full force and effect and comply with all terms and conditions thereof
      until all amounts outstanding under the Loan Documents shall have been repaid
      or
      paid (as the case may be).

     

    SECTION
      5.02.  Debt
      to
      Capitalization Ratio.

     

    So
      long as any
      amount payable by the Borrower hereunder shall remain unpaid, the
      Borrower
      will maintain a
      Debt to Capitalization Ratio of no more than 0.65 to 1.00 (determined as of
      the
      last day of each fiscal quarter).

     

    SECTION
      5.03.  Negative
      Covenants of the Borrower.

     

    So
      long as any
      amount payable by the Borrower hereunder shall remain unpaid, the Borrower
      will
      not:

     

    (a)  Sales,
      Etc.
      (i) Sell, lease,
      transfer or otherwise dispose of any shares of common stock of any domestic
      Significant Subsidiary, whether now owned or hereafter acquired by such
      Borrower, or permit any Significant Subsidiary to do so or (ii) permit such
      Borrower or any Subsidiary to sell, lease, transfer or otherwise dispose of
      (whether in one transaction or a series of transactions) assets located in
      the
      United States of America representing in the aggregate more than 15% (determined
      at the time of each such transaction) of the value of all of the consolidated
      fixed assets of the Borrower, as reported on the most recent consolidated
      balance sheet of the Borrower, to any entity other than any of its wholly owned
      direct or indirect Subsidiaries or, in the case of TE, to Centerior Funding
      Corporation; provided,
      however,
      that this provision
      shall not restrict the Mansfield Sale/Leaseback.

     

    

      
        
          
          

        

        
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    (b)  Liens,
      Etc.
      Create or suffer to
      exist, or permit any Significant Subsidiary to create or suffer to exist, any
      Lien upon or with respect to any of its properties (including, without
      limitation, any shares of any class of equity security of any Significant
      Subsidiary), in each case to secure or provide for the payment of Indebtedness,
      other than (i) liens consisting of (A) pledges or deposits in the
      ordinary course of business to secure obligations under worker’s compensation
      laws or similar legislation, (B) deposits in the ordinary course of
      business to secure, or in lieu of, surety, appeal, or customs bonds to which
      the
      Borrower or Significant Subsidiary is a party, (C) pledges or deposits in
      the ordinary course of business to secure performance in connection with bids,
      tenders or contracts (other than contracts for the payment of money), or
      (D) materialmen’s, mechanics’, carriers’, workers’, repairmen’s or other
      like Liens incurred in the ordinary course of business for sums not yet due
      or
      currently being contested in good faith by appropriate proceedings diligently
      conducted, or deposits to obtain in the release of such Liens;
      (ii) purchase money liens or purchase money security interests upon or in
      any property acquired or held by the Borrower or Significant Subsidiary in
      the
      ordinary course of business, which secure the purchase price of such property
      or
      secure indebtedness incurred solely for the purpose of financing the acquisition
      of such property; (iii) Liens existing on the property of any Person at the
      time that such Person becomes a direct or indirect Significant Subsidiary of
      the
      Borrower; provided
      that such Liens
      were not created to secure the acquisition of such Person; (iv) Liens in
      existence on the date of this Agreement; (v) Liens created by any First Mortgage
      Indenture, so long as (A) under the terms thereof no “event of default”
(howsoever designated) in respect of any bonds issued thereunder will be
      triggered by reference to an Event of Default or Unmatured Default and (B)
      no
      such Liens shall apply to assets acquired from such Borrower or any Significant
      Subsidiary if such assets were free of Liens (other than as a result of a
      release of such Liens in contemplation of such acquisition) immediately prior
      to
      any such acquisition; (vi) Liens on assets of ATSI to secure Indebtedness
      of ATSI, provided,
however,
      that the aggregate
      principal amount of Indebtedness secured by such Liens shall not at any time
      exceed 60% of the depreciated book value of the property subject to such Liens;
      (vii) Liens securing Stranded Cost Securitization Bonds; (viii) Liens on
      cash (in an aggregate amount not to exceed $270,000,000) pledged to secure
      reimbursement obligations for letters of credit issued for the account of OE;
      and (ix) Liens created for the sole purpose of extending, renewing or replacing
      in whole or in part Indebtedness secured by any Lien referred to in the
      foregoing clauses (i) through (viii); provided,
however,
      that the principal
      amount of Indebtedness secured thereby shall not exceed the principal amount
      of
      Indebtedness so secured at the time of such extension, renewal or replacement,
      and that such extension, renewal or replacement, as the case may be, shall
      be
      limited to all or a part of the property or Indebtedness that secured the Lien
      so extended, renewed or replaced (and any improvements on such property).

     

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

     

    

      
        
          
          

        

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

     

    (e)  Use
      of
      Proceeds. Use
      the proceeds of
      the Loan for any purpose other than to fund repurchases of certain of the
      Borrower’s equity securities or to repay other short-term borrowings incurred
      for such purpose.

     

     

    ARTICLE VI  

    EVENTS
      OF
      DEFAULT

     

    SECTION
      6.01.  Events
      of Default.

     

    If
      any of the
      following events shall occur and be continuing (each, an “Event
      of
      Default”):

     

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

     

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

     

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

     

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

     

    

      
        
          
          

        

        
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    (e)  The
      Borrower or any
      Significant Subsidiary shall fail to pay any principal of or premium or interest
      on any Indebtedness (other than Indebtedness owed by the Borrower under this
      Agreement) that is outstanding in a principal amount in excess of $50,000,000
      in
      the aggregate when the same becomes due and payable (whether by scheduled
      maturity, required prepayment, acceleration, demand or otherwise), and such
      failure shall continue after the applicable grace period, if any, specified
      in
      the agreement or instrument relating to such Indebtedness; or any other event
      shall occur or condition shall exist under any agreement or instrument relating
      to any such Indebtedness and shall continue after the applicable grace period,
      if any, specified in such agreement or instrument, if the effect of such event
      or condition is to accelerate, or to permit the acceleration of, the maturity
      of
      such Indebtedness; or any such Indebtedness shall be declared to be due and
      payable, or required to be prepaid (other than by a regularly scheduled required
      prepayment), prior to the stated maturity thereof; or

     

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

     

    (g)  Any
      judgment or
      order for the payment of money exceeding any applicable insurance coverage
      by
      more than $50,000,000 shall be rendered by a court of final adjudication against
      the Borrower or any Significant Subsidiary and either (i) valid enforcement
      proceedings shall have been commenced by any creditor upon such judgment or
      order or (ii) there shall be any period of 10 consecutive days during which
      a stay of enforcement of such judgment or order, by reason of a pending appeal
      or otherwise, shall not be in effect; or

     

    

      
        
          
          

        

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

     

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

     

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

     

    then,
      and in any
      such event, the Lender may by notice to the Borrower declare the Loan and all
      other amounts payable under this Agreement and the other Loan Documents to
      be
      forthwith due and payable, whereupon the Loan and all such amounts shall become
      and be forthwith due and payable, without presentment, demand, protest or
      further notice of any kind, all of which are hereby expressly waived by the
      Borrower; provided,
      however,
      that in the event
      of an actual or deemed entry of an order for relief with respect to the Borrower
      or any Significant Subsidiary under the Bankruptcy Code, the Loan and all other
      amounts payable under this Agreement shall automatically become and be due
      and
      payable, without presentment, demand, protest or any notice of any kind, all
      of
      which are hereby expressly waived by the Borrower. 

     

    

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

    ARTICLE VII  

    MISCELLANEOUS

     

    SECTION
      7.01.  Amendments,
      Etc.

     

    No
      amendment or
      waiver of any provision of this Agreement or any Note, nor consent to any
      departure by the Borrower therefrom, shall in any event be effective unless
      the
      same shall be in writing and signed by the Lender, and then such waiver or
      consent shall be effective only in the specific instance and for the specific
      purpose for which given.

     

    SECTION
      7.02.  Notices,
      Etc.

     

    Unless
      specifically
      provided otherwise in this Agreement, all notices and other communications
      provided for hereunder shall be in writing (including telecopier, telegraphic
      or
      cable communication) and mailed, telecopied, telegraphed, cabled or delivered,
      if to the Borrower, to it at its address at 76 South Main Street, Akron, Ohio
      44308, Attention: Treasurer, Telecopy: (330) 384-3772; if to Lender, at its
      Lending Office; or, as to each party, at such other address as shall be
      designated by such party in a written notice to the other party. All such
      notices and communications shall, when mailed, telecopied, telegraphed or
      cabled, be effective when deposited in the mails, telecopied, delivered to
      the
      telegraph company or delivered to the cable company, respectively, except that
      notices and communications to the Lender pursuant to Article II shall not be
      effective until received by the Lender.

     

    SECTION
      7.03.  No
      Waiver; Remedies.

     

    No
      failure on the
      part of the Lender to exercise, and no delay in exercising, any right hereunder
      or under any Note shall operate as a waiver thereof; nor shall any single or
      partial exercise of any such right preclude any other or further exercise
      thereof or the exercise of any other right. The remedies herein provided are
      cumulative and not exclusive of any remedies provided by law.

     

    SECTION
      7.04.  Costs
      and Expenses; Indemnification.

     

    (a)  The
      Borrower agrees
      to pay on demand all costs and expenses incurred by the Lender in connection
      with the preparation, execution, delivery, modification and amendment of this
      Agreement, any Note, and the other documents to be delivered hereunder,
      including, without limitation, the reasonable fees and out-of-pocket expenses
      of
      counsel for the Lender with respect thereto and with respect to advising the
      Lender as to its rights and responsibilities under this Agreement. The Borrower
      further agrees to pay on demand all costs and expenses, if any (including,
      without limitation, reasonable counsel fees and expenses of counsel), incurred
      by the Lender in connection with the enforcement (whether through negotiations,
      legal proceedings or otherwise) of this Agreement, any Note and the other
      documents to be delivered hereunder, including, without limitation, counsel
      fees
      and expenses in connection with the enforcement of rights under this
      Section 7.04(a).

     

    

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

    (b)  If
      any payment of
      principal of the Loan is made other than on the last day of an Interest Period,
      as a result of a prepayment pursuant to Section 2.06 or acceleration of the
      maturity of any amounts owing hereunder pursuant to Section 6.01, or for
      any other reason, the Borrower shall, upon demand by the Lender, pay to the
      Lender any amounts required to compensate the Lender for any additional losses,
      costs or expenses that it may reasonably incur as a result of such payment,
      including, without limitation, any loss, cost or expense incurred by reason
      of
      the liquidation or redeployment of deposits or other funds acquired by the
      Lender to fund or maintain the Loan. The Borrower’s obligations under this
      subsection (b) shall survive the repayment of all other amounts owing
      to the Lender under this Agreement and any Note.

     

    (c)  The
      Borrower hereby
      agrees to indemnify and hold the Lender, its Affiliates and their respective
      officers, directors, employees and professional advisors (each, an “Indemnified
      Person”)
      harmless from and
      against any and all claims, damages, liabilities, costs or expenses (including
      reasonable attorney’s fees and expenses, whether or not such Indemnified Person
      is named as a party to any proceeding or is otherwise subjected to judicial
      or
      legal process arising from any such proceeding) that any of them may incur
      or
      that may be claimed against any of them by any Person (including the Borrower)
      by reason of or in connection with or arising out of any investigation,
      litigation or proceeding related to any use or proposed use by the Borrower
      of
      the proceeds of the Loan, except to the extent such claim, damage, liability,
      cost or expense is found in a final, non-appealable judgment by a court of
      competent jurisdiction to have resulted from such Indemnified Person’s gross
      negligence or willful misconduct. The Borrower’s obligations under this
      Section 7.04(c) shall survive the repayment of all amounts owing to
      the Lender under this Agreement and any Note. If and to the extent that the
      obligations of the Borrower under this Section 7.04(c) are
      unenforceable for any reason, the Borrower agrees to make the maximum payment
      in
      satisfaction of such obligations that are not unenforceable that is permissible
      under Applicable Law or, if less, such amount that may be ordered by a court
      of
      competent jurisdiction. 

     

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

     

    SECTION
      7.05.  Right
      of
      Set-off.

     

    Upon
      the occurrence
      and during the continuance of any Event of Default the Lender is hereby
      authorized at any time and from time to time, to the fullest extent permitted
      by
      law, to set off and apply any and all deposits (general or special, time or
      demand, provisional or final, excluding,
      however,
      any payroll
      accounts maintained by the Borrower with the Lender if and to the extent that
      the Lender shall have expressly waived its set-off rights in writing in respect
      of such payroll account) at any time held and other indebtedness at any time
      owing by the Lender to or for the credit or the account of the Borrower against
      any and all of the obligations of the Borrower now or hereafter existing under
      this Agreement and any Note, whether or not the Lender shall have made any
      demand under this Agreement or such Note and although such obligations may
      be
      unmatured. The Lender agrees promptly to notify the Borrower after any such
      set-off and application made by the Lender, provided
      that the failure to
      give such notice shall not affect the validity of such set-off and application.
      The rights of the Lender under this Section 7.05 are in addition to other
      rights and remedies (including, without limitation, other rights of set-off)
      which the Lender may have.

     

    

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

    SECTION
      7.06.  Binding
      Effect.

     

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

     

    SECTION
      7.07.  Assignments
      and Participations.

     

    (a)  The
      Lender may, with
      the prior written consent of the Borrower (which consent shall not unreasonably
      be withheld or delayed and shall not be required if an Event of Default then
      exists), assign to one or more banks or other entities all or a portion of
      its
      rights under this Agreement and the other Loan Documents (including, without
      limitation, all or a portion of the Loan and any Note held by it); provided,
      however,
      that (i) the
      amount of the Loan being assigned pursuant to each such assignment (determined
      as of the date of the Assignment and Acceptance with respect to such assignment)
      shall in no event be less than $5,000,000 and shall be an integral multiple
      of
      $1,000,000, and (ii) each such assignment shall be to an Eligible Assignee.
      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
      hereunder have been assigned to it pursuant to such Assignment and Acceptance,
      have the rights of a Lender hereunder and (y) the Lender assignor
      thereunder shall, to the extent that rights hereunder have been assigned by
      it
      pursuant to such Assignment and Acceptance, relinquish its rights under this
      Agreement (and, in the case of an Assignment and Acceptance covering all or
      the
      remaining portion of the Lender’s rights under this Agreement, the Lender shall
      cease to be a party hereto).

     

    (b)  By
      executing and
      delivering an Assignment and Acceptance, the Lender and the assignee thereunder
      confirm to and agree with each other and the Borrower as follows: (i) other
      than as provided in such Assignment and Acceptance, the Lender makes no
      representation or warranty and assumes no responsibility with respect to any
      statements, warranties or representations made in or in connection with this
      Agreement or the execution, legality, validity, enforceability, genuineness,
      sufficiency or value of this Agreement or any other instrument or document
      furnished pursuant hereto; (ii) the Lender makes no representation or
      warranty and assumes no responsibility with respect to the financial condition
      of the Borrower or the performance or observance by the Borrower of any of
      its
      obligations under this Agreement or any other instrument or document furnished
      pursuant hereto; (iii) such assignee confirms that it has received a copy
      of this Agreement, together with copies of the financial statements referred
      to
      in Section 4.01(g) and such other documents and information as it has
      deemed appropriate to make its own credit analysis and decision to enter into
      such Assignment and Acceptance; (iv) such assignee will, independently and
      without reliance upon the Lender and based on such documents and information
      as
      it shall deem appropriate at the time, continue to make its own credit decisions
      in taking or not taking action under this Agreement; and (v) such assignee
      confirms that it is an Eligible Assignee.

     

    

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

    (c)  Upon
      its receipt of
      an Assignment and Acceptance executed by an assignee representing that it is
      an
      Eligible Assignee, if such Assignment and Acceptance has been completed and
      is
      in substantially the form of Exhibit A hereto, the Lender shall give prompt
      notice thereof to the Borrower and the Borrower shall deliver any Note requested
      pursuant to Section 2.11 in favor of such assignee or assignor (as the case
      may
      be), after giving effect to such assignment. 

     

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

     

    (e)  The
      Lender may, in
      connection with any assignment or participation or proposed assignment or
      participation pursuant to this Section 7.07, disclose to the assignee or
      participant or proposed assignee or participant, any information relating to
      the
      Borrower furnished to the Lender by or on behalf of the Borrower; provided,
      that prior to any
      such disclosure, the assignee or participant or proposed assignee or participant
      shall agree to preserve the confidentiality of any confidential information
      relating to the Borrower received by it from the Lender.

     

    (f)  Notwithstanding
      anything to the contrary set forth herein, the Lender may assign, as collateral
      or otherwise, any of its rights hereunder and under any Note (including, without
      limitation, its rights to receive payments of principal and interest hereunder
      and under any Note) to (i) any Federal Reserve Bank or (ii) any
      Affiliate of the Lender in either case, without notice to or consent of the
      Borrower.

     

    (g)  If
      the Lender shall
      make demand for payment under Section 2.07(a), 2.07(b) or 2.10, or
      shall deliver any notice to the Borrower pursuant to Section 2.08 resulting
      in the suspension of certain obligations of the Lender with respect to funding
      or maintaining the Loan at the Eurodollar Rate, then, within 30 days of such
      demand (if, and only if, such payment demanded under Section 2.07(a),
      2.07(b) or 2.10, as the case may be, shall have been made by the
      Borrower) or such notice (if such suspension is still in effect), as the case
      may be, the Borrower may demand that the Lender assign in accordance with this
      Section 7.07 to one or more Eligible Assignees designated by the Borrower
      all (but not less than all) of the Loan within the next 15 days. If any such
      Eligible Assignee designated by the Borrower shall fail to consummate such
      assignment on terms acceptable to the Lender, or if the Borrower shall fail
      to
      designate any such Eligible Assignee for all of the Loan, then the Lender may
      assign the Loan to any other Eligible Assignee in accordance with this
      Section 7.07 during such 15-day period; it being understood for purposes of
      this Section 7.07(g) that such assignment shall be conclusively deemed
      to be on terms acceptable to the Lender, and the Lender shall be compelled
      to
      consummate such assignment to an Eligible Assignee designated by the Borrower,
      if such Eligible Assignee shall agree to such assignment in substantially the
      form of Exhibit A hereto and shall offer compensation to the Lender in an
      amount equal to the sum of the outstanding principal amount of the Loan plus
      all
      interest accrued thereon to the date of such payment plus all other amounts
      payable by the Borrower to the Lender hereunder (whether or not then due) as
      of
      the date of such payment accrued in favor of the Lender hereunder.
      Notwithstanding the foregoing, the Lender shall not make any assignment at
      any
      time pursuant to this subsection (h) if, at such time, (i) an Event of Default
      or Unmatured Default has occurred and is continuing or (ii) the Borrower has
      not
      satisfied all of its obligations hereunder. 

     

    

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

    SECTION
      7.08.  Governing
      Law.

     

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

     

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

     

    (a)  To
      the fullest
      extent permitted by law, the Borrower hereby irrevocably (i) submits to the
      non-exclusive jurisdiction of any New York State or Federal court sitting in
      New
      York City and any appellate court from any thereof in any action or proceeding
      arising out of or relating to this Agreement or any other Loan Document and
      (ii) agrees that all claims in respect of such action or proceeding may be
      heard and determined in such New York State court or in such Federal court.
      The
      Borrower hereby irrevocably waives, to the fullest extent permitted by law,
      the
      defense of an inconvenient forum to the maintenance of such action or
      proceeding. The Borrower also irrevocably consents, to the fullest extent
      permitted by law, to the service of any and all process in any such action
      or
      proceeding by the mailing by certified mail of copies of such process to the
      Borrower at its address specified in Section 7.02. The Borrower agrees, to
      the fullest extent permitted by law, that a final judgment in any such action
      or
      proceeding shall be conclusive and may be enforced in other jurisdictions by
      suit on the judgment or in any other manner provided by law.

     

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

     

    SECTION
      7.10.  Severability. 

     

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

     

    SECTION
      7.11.  Entire
      Agreement.

     

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

     

    SECTION
      7.12.  Execution
      in Counterparts.

     

    This
      Agreement may
      be executed in any number of counterparts and by different parties hereto in
      separate counterparts, each of which when so executed shall be deemed to be
      an
      original and all of which taken together shall constitute one and the same
      agreement.

     

    

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

    SECTION
      7.13.  USA
      PATRIOT Act Notice.

     

    The
      Lender hereby
      notifies the Borrower pursuant to the requirements of the Patriot Act that
      it is
      required to obtain, verify and record information that identifies the Borrower,
      which information includes the name and address of the Borrower and other
      information that will allow the Lender to identify the Borrower in accordance
      with the Patriot Act.

     

    

     

    [Signatures
      to
      Follow]

     

    

     

    

     

    

    
      
        
          
            

          

          33

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

    

    

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

     

     

    
      
        	 	
                 FIRSTENERGY
                  CORP.

                 

                 By:    _____________________________________________     

                        Name:
                  

                          
                  Title: 

              

      

       

    

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
       

       

      
        
          	 	
                  MORGAN
                    STANLEY
                    SENIOR FUNDING, INC.

                  as
                    Lender

                   

                   By:    _____________________________________________     

                          Name:
                    

                            
                    Title: 

                

        

         

      

       

    

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
      1

     

    Lending
      Office

    

    

    Morgan
      Stanley
      Senior Funding, Inc.

    One
      Pierrepont Plaza, 7th
      Floor

    300
      Cadman Plaza West

    Brooklyn,
      NY
      11201

    Phone:
      718-754-7282

    Fax:
      718-754-7249

    Email:
Mardoche.Dorval@morganstanley.com

     

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    

      

      EXHIBIT
        A

      Form
        of
        Assignment and Acceptance

      

      ASSIGNMENT
        AND
        ACCEPTANCE

      

                          [Date]

      

      

      Reference
        is made to
        the Credit Agreement, dated as of March 2, 2007 (as amended, modified or
        supplemented from time to time, the “Credit
        Agreement”),
        between
FirstEnergy
        Corp.,
        an Ohio
        corporation (the “Borrower”),
        and Morgan
        Stanley Senior Funding, Inc., a Delaware corporation (the “Lender”).
Capitalized
        terms
        defined in the Credit Agreement are used herein with the same
        meaning.

      

      [_____________]
        (the
“Assignor”)
        and [____________]
        (the “Assignee”)
        agree as
        follows:

       

      1. The
        Assignor hereby
        sells and assigns, without recourse, to the Assignee, and the Assignee hereby
        purchases and assumes from the Assignor, without recourse to the Assignor,
        all
        or a portion of the Assignor’s rights under the Credit Agreement and the other
        Loan Documents as of the Effective Date (as defined in Section 5 below) which
        represents the percentage interest specified on Schedule 1 of all
        outstanding rights of the Lender under the Credit Agreement (the “Assigned
        Interest”).
        After giving
        effect to such sale and assignment, the amount of the outstanding Loan owing
        to
        the Assignee will be as set forth in Section 2 of Schedule 1.

       

      2. On
        the Effective
        Date, the Assignee will pay to the Assignor, in same day funds, at such address
        and account as the Assignor shall advise the Assignee, the principal amount
        of
        the Loan outstanding under the Loan Documents that is being assigned hereunder,
        and the sale and assignment contemplated hereby shall thereupon become
        effective. From and after the Effective Date, the Assignor agrees that the
        Assignee shall be entitled to all rights, powers and privileges of the Assignor
        under the Credit Agreement to the extent of the Assigned Interest, including
        without limitation (i) the right to receive all payments in respect of the
        Assigned Interest for the period from and after the Effective Date, whether
        on
        account of principal, interest, fees, indemnities in respect of claims arising
        after the Effective Date (subject to Sections 7.04 and 7.07 of the Credit
        Agreement), increased costs, additional amounts or otherwise; (ii) the
        right to vote under the Credit Agreement based on the Assigned Interest;
        (iii) the right to set-off and to appropriate and apply deposits of the
        Borrower as set forth in the Credit Agreement; and (iv) the right to
        receive notices, requests, demands and other communications. The Assignor
        agrees
        that it will promptly remit to the Assignee any amount received by it in
        respect
        of the Assigned Interest (whether from the Borrower, or otherwise) in the
        same
        funds in which such amount is received by the Assignor.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          A-2

        

      

      3. The
        Assignor
        (i) represents and warrants that it is the legal and beneficial owner of
        the interest being assigned by it hereunder and that such interest is free
        and
        clear of any adverse claim; (ii) other than as provided in this Assignment
        and Acceptance, makes no representation or warranty and assumes no
        responsibility with respect to any statements, warranties or representations
        made in or in connection with the Credit Agreement or the execution, legality,
        validity, enforceability, genuineness, sufficiency or value of the Credit
        Agreement or any other instrument or document furnished pursuant thereto;
        (iii) makes no representation or warranty and assumes no responsibility
        with respect to the financial condition of the Borrower or the performance
        or
        observance by the Borrower of any of its obligations under the Credit Agreement
        or any other instrument or document furnished pursuant thereto; (iv)  (if
        applicable) attaches the Note and requests that the Borrower exchanges such
        Note
        for a new Note payable to the order of the Assignee in an amount equal to
        the
        outstanding principal amount of the Loan, or new Notes payable to the order
        of
        the Assignee in an amount equal to the principal amount of the Loan assumed
        by
        the Assignee pursuant hereto, and a new Note payable to the order of the
        Assignor in an amount equal to the principal amount of the Loan retained
        by the
        Assignor under the Credit Agreement, respectively, as specified on
        Schedule 1 hereto; and (v) makes no other representation or warranty with
        respect to the Borrower, the Loan Documents or any other instrument or document
        furnished pursuant thereto, except as expressly set forth in clause (i) of
        this
        Section 3.

       

      4. The
        Assignee
        (i) confirms that it has received a copy of the Credit Agreement, together
        with copies of the financial statements referred to in Section 4.01 thereof
        and such other documents and information as it has deemed appropriate to
        make
        its own credit analysis and decision to enter into this Assignment and
        Acceptance; (ii) agrees that it will, independently and without reliance
        upon the Assignor and based on such documents and information as it shall
        deem
        appropriate at the time, continue to make its own credit decisions in taking
        or
        not taking action under the Credit Agreement; (iii) confirms that it is an
        Eligible Assignee; [and] (iv)  specifies as its Lending Office (and address
        for notices) the office set forth beneath its name on the signature pages
        hereof
        [and (vi) attaches the forms prescribed by the Internal Revenue Service of
        the United States certifying that it is exempt from United States withholding
        taxes with respect to all payments to be made to the Assignee under the Credit
        Agreement and the Note].* 

       

      5. Following
        the
        execution of this Assignment and Acceptance by the Assignor and the Assignee,
        a
        copy of it will be delivered to the Borrower. The effective date of this
        Assignment and Acceptance shall be the date specified on Schedule 1 hereto
        (the “Effective
        Date”).

       

      6. Upon
        and as of the
        Effective Date (i) the Assignee shall be a party to the Credit Agreement
        and, to the extent provided in this Assignment and Acceptance, have the rights
        of a Lender thereunder and (ii) the Assignor shall, to the extent provided
        in this Assignment and Acceptance, relinquish its rights under the Credit
        Agreement.

       

      
        _____________________________

        

          
            
              	
                       *

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

                    

            

             

          

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          A-3

        

      

       

      7. From
        and after the
        Effective Date, the Borrower shall make all payments under the Credit Agreement
        and the Note in respect of the interest assigned hereby (including, without
        limitation, all payments of principal, interest and fees with respect thereto)
        to the Assignee. 

       

      8. THIS
        ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
        WITH, THE LAWS OF THE STATE OF NEW YORK.

       

      9. This
        Assignment and
        Acceptance may be signed in any number of counterparts and by different parties
        hereto in separate counterparts, each of which when so executed shall be
        deemed
        to be an original and all of which taken together shall constitute one and
        the
        same agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          A-4

        

      

      IN
        WITNESS
        WHEREOF,
        the parties hereto
        have caused this Assignment and Acceptance to be executed by their respective
        officers thereunto duly authorized, as of the date first above written, such
        execution being made on Schedule 1 hereto.

       

      

      
        	 	
                [NAME
                  OF
                  ASSIGNOR], as Assignor

                 

                 

                By
                  _____________________________

                Name:

                Title:

              
	 	
                [NAME
                  OF
                  ASSIGNOR], as Assignor

                 

                 

                By
                  _____________________________

                Name:

                Title:

              
	 	 
	 	
                Lending
                  Office
                  (and

                address
                  for
                  notices):

                [Address]

              

      

      

      

      

       

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    Schedule 1
      to

    Assignment
      and
      Acceptance

    
 

    Dated
      __________

    

    
      
        

          
            	
                    Section 1.

                  	 
	 	 
	
                      
                      Total Outstanding Principal Amount of the Loan:

                  	
                    $________________

                  
	 	 
	
                       
                      Amount of Assigned Share:

                  	
                    $________________

                  
	 	 
	
                    Percentage
                      Interest:

                  	
                     
                      ________________ %

                  
	 	 
	
                    Section 2.

                  	 
	 	 
	
                                        Assignee’s
                      Portion of Outstanding Loan:

                  	
                    $

                  
	 	 
	
                    A
                      Note payable
                      to the order of the Assignee

                    Dated:
                      ____________

                     

                    Principal
                      amount

                  	
                     

                     

                     

                    $

                  
	 	 
	
                      
                      [A Note payable to the order of the Assignor

                    Dated:
                      _____________

                     

                    Principal
                      amount:

                  	
                     

                     

                     

                    $________________

                  
	 	 
	
                    Section 3.

                  	 
	 	 
	
                                      
                      Effective Date:                _____________

                  	 
	 	 

          

        

      

    

    

    

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      B

    Form
      of
      Note

    

    PROMISSORY
      NOTE

    

    U.S.$250,000,000                                                                              _____,
      2007

    

    

    FOR
      VALUE RECEIVED,
      the undersigned, FIRSTENERGY
      CORP.,
      an Ohio corporation (the “Borrower”),
HEREBY
      PROMISES TO
      PAY to the order of MORGAN STANLEY SENIOR FUNDING, INC., a Delaware corporation
      (the “Lender”)
      for the account of
      its Lending Office (such term and other capitalized terms herein being used
      as
      defined in the Credit Agreement referred to below) the principal sum of
      U.S.$250,000,000 or, if less, the aggregate principal amount of the Loan made
      by
      the Lender to the Borrower pursuant to the Credit Agreement outstanding on
      the
      Termination Date, payable on the Termination Date.

    

    The
      Borrower
      promises to pay interest on the unpaid principal amount of the Loan from the
      date hereof until such principal amount is paid in full, at such interest rates,
      and payable at such times, as are specified in the Credit
      Agreement.

     

    Both
      principal and
      interest are payable in lawful money of the United States of America to the
      Lender, at its Lending Office, in same day funds. The Loan, and all payments
      made on account of principal thereof, shall be recorded by the Lender and,
      prior
      to any transfer hereof, endorsed on the grid attached hereto which is part
      of
      this Promissory Note.

     

    This
      Promissory Note
      is one of the Notes referred to in, and is entitled to the benefits of, the
      Credit Agreement, dated as of March 2, 2007 (the “Credit
      Agreement”),
      between the
      Borrower and the Lender. The Credit Agreement, among other things contains
      provisions for acceleration of the maturity hereof upon the happening of certain
      stated events and also for prepayments on account of principal hereof prior
      to
      the maturity hereof upon the terms and conditions therein specified.

     

    The
      Borrower hereby
      waives presentment, demand, protest and notice of any kind. No failure to
      exercise, and no delay in exercising, any rights hereunder on the part of the
      holder hereof shall operate as a waiver of such rights.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    
      	 	 	 
	 	FIRSTENERGY
              CORP.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:
	 	Title: 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    GRID

    

    
      	
               

              Date

            	
              Amount
                of
                Principal

              Paid
                or
                Prepaid

            	
              Unpaid
                Principal

              Amount
                of
                Note

            
	
            
	
               

            
	
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