Exhibit 10.3

Execution Version

LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

Dated as of May 9, 2008

among

COMMONWEALTH EDISON COMPANY

and

THE FINANCIAL INSTITUTIONS SIGNATORY HERETO,

as L/C Issuers

BARCLAYS BANK PLC, NEW YORK BRANCH

as Administrative Agent

RBS SECURITIES CORPORATION d/b/a RBS GREENWICH CAPITAL,

as Syndication Agent

and

BANK OF AMERICA, N.A., THE BANK OF NOVA SCOTIA

and SUNTRUST BANK,

as Co-Documentation Agents

and

THE FINANCIAL INSTITUTIONS PARTY HERETO FROM TIME TO TIME

BARCLAYS CAPITAL and

RBS SECURITIES CORPORATION d/b/a RBS GREENWICH CAPITAL,

as Lead Arrangers and Book Runners

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TABLE OF CONTENTS

 

          Page ARTICLE I   

DEFINITIONS

   1 SECTION 1.01.    Certain Defined Terms.    1 SECTION 1.02.    Computation
of Time Periods.    11 SECTION 1.03.    Accounting Terms.    11 SECTION 1.04.   
Interpretation.    11 ARTICLE II   

AMOUNT AND TERMS OF THE LETTERS OF CREDIT

   12 SECTION 2.01.    The Letters of Credit.    12 SECTION 2.02.    Letter of
Credit Fees.    13 SECTION 2.03.    Reimbursement.    13 SECTION 2.04.    Tender
Advances.    13 SECTION 2.05.    Interest on Advances.    15 SECTION 2.06.   
Payment of Advances.    15 SECTION 2.07.    Prepayments; Reinstatement of Letter
of Credit Amounts.    15 SECTION 2.08.    Increased Costs.    16 SECTION 2.09.
   Payments and Computations.    16 SECTION 2.10.    Non-Business Days.    17
SECTION 2.11.    Evidence of Debt.    17 SECTION 2.12.    Syndication;
Reimbursement of L/C Issuers.    17 SECTION 2.13.    Obligations Absolute.    18
SECTION 2.14.    Assignments and Participations.    19 SECTION 2.15.   
Reserved.    20 SECTION 2.16.    Taxes.    20 SECTION 2.17.    Reserved.    21
SECTION 2.18.    Substitution of Bank.    21 ARTICLE III   

CONDITIONS OF CLOSING AND ISSUANCE AND ADVANCES

   22 SECTION 3.01.    Conditions Precedent to Closing.    22 SECTION 3.02.   
Additional Conditions Precedent to Issuance of Letters of Credit.    23 SECTION
3.03.    Conditions Precedent to Each Advance or Modification.    24 ARTICLE IV
  

REPRESENTATIONS AND WARRANTIES

   24 SECTION 4.01.    Representations and Warranties of the Company.    24
ARTICLE V   

COVENANTS OF THE COMPANY

   27 SECTION 5.01.    Affirmative Covenants.    27 SECTION 5.02.    Negative
Covenants.    32 ARTICLE VI   

EVENTS OF DEFAULT

   35 SECTION 6.01.    Events of Default.    35 SECTION 6.02.    Upon an Event
of Default.    37 ARTICLE VII   

THE AGENTS AND THE L/C ISSUERs

   37 SECTION 7.01.    Authorization and Action.    37 SECTION 7.02.   
Administrative Agent’s Reliance, Etc.    38 SECTION 7.03.    Bank Independent
Credit Decision.    38 SECTION 7.04.    Indemnification.    39

 

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TABLE OF CONTENTS

(continued)

 

SECTION 7.05.    Barclays and Affiliates.    39 SECTION 7.06.    Successor
Administrative Agent.    39 SECTION 7.07.    Documentation Agents, Syndication
Agent, Lead Arrangers and Book Runners.    40 ARTICLE VIII   

MISCELLANEOUS

   40 SECTION 8.01.    Amendments, Etc.    40 SECTION 8.02.    Notices, Etc.   
40 SECTION 8.03.    No Waiver; Remedies.    41 SECTION 8.04.    Right of
Set-off; Sharing of Payments.    41 SECTION 8.05.    Indemnification.    42
SECTION 8.06.    Liability of the Banks.    43 SECTION 8.07.    Costs and
Expenses.    43 SECTION 8.08.    Binding Effect; Entire Agreement.    44 SECTION
8.09.    Confidentiality.    44 SECTION 8.10.    Severability.    45 SECTION
8.11.    GOVERNING LAW.    45 SECTION 8.12.    Waiver of Jury Trial.    45
SECTION 8.13.    Consent to Jurisdiction.    45 SECTION 8.14.    Headings.    46
SECTION 8.15.    Execution in Counterparts.    46 SECTION 8.16.    Patriot Act.
   46 SECTION 8.17.    No Advisory or Fiduciary Responsibility.    46

 

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TABLE OF CONTENTS

(continued)

 

Schedules

 

Schedule 1.01    Shares Schedule 5.02(a)    Liens

Exhibits

 

A Form of Letter of Credit

B Form of Control Agreement

C Form of Compliance Certificate

 

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THIS LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT, dated as of May 9, 2008 (this
“Agreement”), is among COMMONWEALTH EDISON COMPANY, a corporation organized and
existing under the laws of the State of Illinois (the “Company”), the financial
institutions signatory hereto, as L/C Issuers (as hereinafter defined), BARCLAYS
BANK PLC, NEW YORK BRANCH, as Administrative Agent (as hereinafter defined), RBS
SECURITIES CORPORATION d/b/a RBS GREENWICH CAPITAL, as Syndication Agent, BANK
OF AMERICA, N.A., THE BANK OF NOVA SCOTIA and SUNTRUST BANK, as Co-Documentation
Agents, and the financial institutions listed on the signature pages hereof.
Unless otherwise indicated, all capitalized terms used herein shall have the
meaning referred to or set forth in Article I hereof.

PRELIMINARY STATEMENTS

The Illinois Finance Authority (or its predecessor) (the “Issuer”) has
previously issued the following series of bonds: (a) $100,000,000 aggregate
principal amount Pollution Control Revenue Refunding Bonds (Commonwealth Edison
Company Project) Series 2002 (the “Series 2002 Bonds”), (b) $42,200,000
aggregate principal amount Pollution Control Revenue Refunding Bonds
(Commonwealth Edison Company Project) Series 2003B (the “Series 2003B Bonds”),
(c) $50,000,000 aggregate principal amount Pollution Control Revenue Refunding
Bonds (Commonwealth Edison Company Project) Series 2003C (the “Series 2003C
Bonds”) and (d) $19,975,000 aggregate principal amount Pollution Control Revenue
Refunding Bonds (Commonwealth Edison Company Project) Series 2003D (the “Series
2003D Bonds”; together with the Series 2002 Bonds, the Series 2003B Bonds and
the Series 2003C Bonds, collectively, the “Existing Bonds”).

The Issuer and the Company desire to refinance one or more of the Existing Bonds
through the issuance by the Issuer of one or more new series of Pollution
Control Revenue Refunding Bonds (Commonwealth Edison Company) as more
particularly described in the definition of “Bonds” herein.

In order to enhance the Bonds by providing a source of payment when due of the
principal of and interest on and the purchase price of the Bonds, the L/C
Issuers will provide the Letters of Credit pursuant to this Agreement to
facilitate such payments.

The Banks party hereto have agreed to purchase Shares of the Reimbursement
Obligations (as such terms are defined herein) and the Letters of Credit.

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Certain Defined Terms.

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

“Adjusted Funds From Operations” means, for any period, Net Cash Flows From
Operating Activities for such period plus Interest Expense for such period minus
(x) the portion (but not less than zero) of Net Cash Flows From Operating
Activities for such period attributable to any consolidated Subsidiary that has
no Debt other than Nonrecourse Indebtedness and (y) After-Tax Transitional
Funding Instrument Revenue for such period.

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“Administrative Agent” means Barclays, in its capacity as Administrative Agent
for the Banks hereunder, and any successor Administrative Agent.

“Administrative Questionnaire” means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative Agent,
completed by such Bank and returned to the Administrative Agent (with a copy to
the Company).

“Advance” means any Tender Advance, and “Advances” means Tender Advances
collectively.

“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.

“After-Tax Transitional Funding Instrument Revenue” means, for any period, the
portion of consolidated revenue for such period attributable to charges invoiced
to customers in respect of Transitional Funding Instruments, after deducting
applicable income taxes.

“Applicable Participation Fee Rate” means 0.90% per annum.

“Approved Fund” means any Person (other than a natural Person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business
and that is administered or managed by (a) a Bank, (b) an Affiliate of a Bank or
(c) an entity or an Affiliate of an entity that administers or manages a Bank.

“Bank Information” has the meaning assigned to that term in Section 8.05(a).

“Banks” means the Banks listed on the signature pages hereof and each Eligible
Assignee that shall become a party hereto pursuant to Section 2.14(a).

“Barclays” has the meaning assigned to that term in the introductory paragraph
of this Agreement.

“Base Rate” means a fluctuating interest rate per annum that is the higher of
(a) the Federal Funds Rate plus one-half of one percent (l/2%) per annum and
(b) the rate of interest announced publicly by the Administrative Agent in New
York, New York, from time to time as its prime rate. Each change in the Base
Rate shall take effect simultaneously with the corresponding change or changes
in the Federal Funds Rate or such prime rate, as the case may be.

“Bonds” means, collectively, the $50,000,000 Pollution Control Revenue Refunding
Bonds (Commonwealth Edison Company Project) Series 2008D, the $100,000,000
Pollution Control Revenue Refunding Bonds (Commonwealth Edison Company Project)
Series 2008A, the $42,200,000 Pollution Control Revenue Refunding Bonds
(Commonwealth Edison Company Project) Series 2008C and the $19,975,000 Pollution
Control Revenue Refunding Bonds (Commonwealth Edison Company Project) Series
2008E; provided that the initial principal balance of any series of Bonds may be
less than the amount stated above.

“Business Day” means a day of the year on which banks are not required or
authorized to close in Chicago, Illinois or New York, New York.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

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“Commitment” means $215,872,078.

“Commitment Expiration Date” means the earlier of (a) June 30, 2008 and (b) the
date on which all Bonds are issued.

“Company” has the meaning assigned to that term in the introductory paragraph of
this Agreement.

“Control Agreements” means, collectively, the Securities Account Control
Agreements by and among the Company, the Administrative Agent and the Trustee,
as securities intermediary, each substantially in the form of Exhibit B hereto;
and “Control Agreement” means any of the foregoing as the context may require.

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

“Credit Agreement” means that certain Credit Agreement dated as of October 3,
2007 among the Company, various financial institutions and JPMorgan Chase Bank,
N.A., as administrative agent.

“Date of Issuance” means, with respect to each Letter of Credit for any Bonds,
the date on which such Letter of Credit is issued.

“Debt” means (i) indebtedness for borrowed money, (ii) obligations evidenced by
bonds, debentures, notes or other similar instruments, (iii) obligations to pay
the deferred purchase price of property or services (other than trade payables
incurred in the ordinary course of business), (iv) obligations as lessee under
leases that shall have been or are required to be, in accordance with GAAP (as
defined in Section 1.03), recorded as capital leases, (v) obligations
(contingent or otherwise) under reimbursement or similar agreements with respect
to the issuance of letters of credit (other than obligations in respect of
documentary letters of credit opened to provide for the payment of goods or
services purchased in the ordinary course of business) and (vi) obligations
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 in clauses (i) through (v) above.

“Default” means any condition or event which constitutes an Event of Default or
which with the giving of notice or lapse of time or both would, unless cured or
waived, become an Event of Default.

“Default Rate” means a fluctuating interest rate determined in accordance with
the provisions of Section 2.05(c) of this Agreement.

“Dollars” and “$” mean lawful money of the United States of America.

“Domestic Lending Office” means, as to each Bank, its office located at its
address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Company and the Administrative Agent.

“Effective Federal Funds Rate” has the meaning assigned to that term in
Section 2.12(b).

 

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“Eligible Assignee” means (a) a Bank; (b) an Affiliate of a Bank (other than a
natural Person); (c) an Approved Fund; and (d) any other Person (other than a
natural Person) consented to by the L/C Issuers and/or the Company, if, in
either case, such consent is required pursuant to Section 2.14; provided,
however, that notwithstanding the foregoing, “Eligible Assignee” shall not
include the Company or any of the Company’s Affiliates or Subsidiaries.

“Eligible Successor” means a Person that (i) is a corporation, limited liability
company or business trust duly incorporated or organized, validly existing and
in good standing under the laws of one of the states of the United States or the
District of Columbia, (ii) as a result of a contemplated acquisition,
consolidation or merger, will succeed to all or substantially all of the
consolidated business and assets of the Company or Exelon, as applicable,
(iii) upon giving effect to such contemplated acquisition, consolidation or
merger, will have all or substantially all of its consolidated business and
assets conducted and located in the United States and (iv) in the case of the
Company, is acceptable to the Majority Banks as a credit matter.

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

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

“Execution Date” means the date this Agreement was executed and delivered by
each of the parties hereto.

“Exelon” means Exelon Corporation, a Pennsylvania corporation, or any Eligible
Successor thereof.

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

“Fee Letters” means, collectively, (i) the Administrative Fee Letter, dated as
of the date hereof, between the Company and the Administrative Agent, (ii) the
Fronting Bank Fee Letter, dated as of May 7, 2008, between the Company and
SunTrust Bank and (iii) the Fronting Bank Fee Letter, dated as of the date
hereof, between the Company and The Bank of Nova Scotia; and “Fee Letter” means
any of the foregoing as the context may require.

“First Mortgage Bonds” means, collectively, one or more First Mortgage Bonds
issued by the Company pursuant to a Loan Agreement for the applicable series of
Bonds, which has been assigned to, and registered in the name of, the Trustee
under the Indenture for such series of Bonds as collateral security for the
payment of such series of Bonds; and “First Mortgage Bond” means any of the
foregoing as the context may require.

“Fitch” means Fitch, Inc., and any successor thereto.

“Fitch Rating” means, at any time, the rating issued by Fitch and then in effect
with respect to the Company’s senior secured long-term public debt securities
without third-party credit enhancement (it

 

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being understood that if the Company does not have any outstanding debt
securities of the type described above but has an indicative rating from Fitch
for debt securities of such type, then such indicative rating shall be used for
determining the “Fitch Rating”).

“Indentures” means, collectively, the Bond Indentures between the Issuer and the
Trustee, with respect to the Bonds, in each case as amended, restated,
supplemented or otherwise modified; and “Indenture” means any of the foregoing
as the context may require.

“Intangible Transition Property” means (i) “intangible transition property,” as
defined in Section 18-102 of the Illinois Public Utilities Act, and (ii) any
property created pursuant to an order of the Illinois Commerce Commission issued
pursuant to state legislation described in clause (ii) of the definition of
“Transitional Funding Instruments,” which consists primarily of the right to
impose non-bypassable charges to customers of a utility in order to facilitate
the utility’s recovery of specified costs and/or deferred rates.

“Interest Coverage Ratio” means, for any period of four consecutive fiscal
quarters of the Company, the ratio of Adjusted Funds From Operations for such
period to Net Interest Expense for such period.

“Interest Expense” means, for any period, “interest expense” as shown on a
consolidated statement of income of the Company for such period prepared in
accordance with GAAP plus Interest Expense to Affiliates for such period.

“Interest Expense to Affiliates” means, for any period, “Interest Expense to
Affiliates” as shown on a consolidated statement of income of the Company for
such period.

“Issuer” has the meaning assigned to that term in the introductory paragraph of
this Agreement.

“L/C Expiration Date” means, with respect to an issued and outstanding Letter of
Credit, the earlier of (a) the date that is 365 days from the Date of Issuance
of such Letter of Credit and (b) June 30, 2009.

“L/C Issuer” means the financial institution signatory hereto in their capacity
as issuer of one or more of the Letters of Credit, and “L/C Issuers” means all
of them collectively.

“L/C Obligations” means, at any time, the sum, without duplication, of (a) the
aggregate Maximum Credit Amount under all Letters of Credit outstanding at such
time, plus (b) the aggregate unpaid amount at such time of all Reimbursement
Obligations.

“Letter of Credit” means, with respect to a series of Bonds, each letter of
credit issued hereunder in connection with such Bonds, in each case as amended
or otherwise modified, and “Letters of Credit” means all of them collectively.

“Lien” means any lien (statutory or other), mortgage, pledge, security interest
or other charge or encumbrance, or any other type of preferential arrangement
(including the interest of a vendor or lessor under any conditional sale,
capitalized lease or other title retention agreement).

“Liquidity Drawing” shall have the meaning assigned to that term in the Letters
of Credit.

 

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“Loan Agreements” means, collectively, the Loan Agreements between the Issuer
and the Company, with respect to the Bonds; and “Loan Agreement” means any of
the foregoing as the context may require.

“Majority Banks” means at any time Banks having at least a majority of the then
aggregate unpaid principal amount of the Reimbursement Obligations, or, if no
such principal amount is then outstanding, Banks whose Shares equal at least a
majority of the aggregate Shares.

“Material Adverse Change” and “Material Adverse Effect” each means, relative to
any occurrence, fact or circumstances of whatsoever nature (including any
determination in any litigation, arbitration or governmental investigation or
proceeding), (i) any materially adverse change in, or materially adverse effect
on, the financial condition, operations, assets or business of the Company and
its consolidated Subsidiaries, taken as a whole; or (ii) any materially adverse
effect on the validity or enforceability against the Company of this Agreement.

“Maximum Credit Amount” means, in respect of the Letters of Credit, the
aggregate Stated Amount (as defined in the Letters of Credit) of all such
Letters of Credit in effect at any time.

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

“Moody’s Rating” means, at any time, the rating issued by Moody’s and then in
effect with respect to the Company’s senior secured long-term public debt
securities without third-party credit enhancement (it being understood that if
the Company does not have any outstanding debt securities of the type described
above but has an indicative rating from Moody’s for debt securities of such
type, then such indicative rating shall be used for determining the “Moody’s
Rating”).

“Mortgage” means the Mortgage, dated July 1, 1923, as amended and supplemented
by supplemental indentures, including the Supplemental Indenture, dated
August 1, 1944, from the Company to the Mortgage Trustees; provided, that no
effect shall be given to any amendment, supplement or refinancing after the date
of this Agreement that would broaden the definition of “permitted liens” as
defined in the Mortgage as constituted on the date of this Agreement.

“Mortgage Trustees” means BNY Midwest Trust Company (as successor to Harris
Trust and Savings Bank) and D.G. Donovan, and any other successors thereto, as
trustees under the Mortgage.

“Mortgaged Property” means all real and personal property of the Company from
time to time subject to the lien of the Mortgage.

“Multiemployer Plan” means a Plan maintained pursuant to a collective bargaining
agreement or any other arrangement to which Exelon or any other member of the
Controlled Group is a party to which more than one employer is obligated to make
contributions.

“Net Cash Flows From Operating Activities” means, for any period, “Net Cash
Flows provided by Operating Activities” as shown on a consolidated statement of
cash flows of the Company for such period prepared in accordance with GAAP,
excluding any “working capital changes” (as shown on such statement of cash
flows) taken into account in determining such Net Cash Flows provided by
Operating Activities.

“Net Interest Expense” means, for any period, the total of (a) Interest Expense
for such period minus (b) Interest Expense to Affiliates for such period to the
extent included in the amount referred to in clause (a) and related to
(i) interest payments on debt obligations that are subordinated to the
obligations of the Company under this Agreement, (ii) interest on Nonrecourse
Indebtedness or (iii) Transitional Funding Instrument Interest.

 

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

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

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

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

“Note” means, to the extent issued, a promissory note of the Company payable to
the order of any Bank.

“Official Statement” means, with respect to a series of Bonds, the Official
Statement executed in connection with such series of Bonds at the time of
issuance thereof, as amended or supplemented, together with the documents
incorporated therein by reference.

“Operative Documents” means, with respect to a series of Bonds, such Bonds and
the related Indenture, the Supplemental Indenture (including the Mortgage), the
First Mortgage Bond, the Loan Agreement, the Pledge Agreement, the Control
Agreement, the Remarketing Agreement and each other operative document or
instrument delivered in connection with the issuance, sale and securing of such
series of Bonds.

“Other Taxes” has the meaning assigned to that term in Section 2.16(b).

“Participant” has the meaning assigned to that term in Section 2.14(b).

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

“Permitted Encumbrance” means (a) any right reserved to or vested in any
municipality or other governmental or public authority (i) by the terms of any
right, power, franchise, grant, license or permit granted or issued to the
Company or (ii) to purchase or recapture or to designate a purchaser of any
property of the Company; (b) any easement, restriction, exception or reservation
in any property and/or

 

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right of way of the Company for the purposes of roads, pipelines, transmission
lines, distribution lines, transportation lines or removal of minerals or timber
or for other like purposes or for the joint or common ownership and/or use of
real property, rights of way, facilities and/or equipment, and defects,
irregularities and deficiencies in title of any property and/or rights of way,
which, in each case described in this clause (b), whether considered
individually or collectively with all other items described in this clause (b),
do not materially impair the use of the relevant property and/or rights of way
for the purposes for which such property and/or rights of way are held by the
Company; (c) rights reserved to or vested in any municipality or other
governmental or public authority to control or regulate any property of the
Company or to use such property in a manner that does not materially impair the
use of such property for the purposes for which it is held by the Company; and
(d) obligations or duties of the Company to any municipality or other
governmental or public authority that arise out of any franchise, grant, license
or permit and that affect any property of the Company.

“Permitted Securitization” means any sale and/or contribution, or series of
related sales and/or contributions, by the Company or any Subsidiary of the
Company of accounts receivables, payment intangibles, notes receivable and
related rights (collectively, “receivables”) or interests therein to a trust,
corporation or other entity, where (a) the purchase of such receivables or
interests therein is funded in whole or in part by the incurrence or issuance by
the purchaser or any successor purchaser of Debt or securities that are to
receive payments from, or that represent interests in, the cash flow derived
primarily from such receivables or interests therein, provided, however, that
“Debt” as used in this clause (a) shall not include Debt incurred by a
Receivables SPC owed to the Company or to a Subsidiary of the Company which Debt
represents all or a portion of the purchase price paid by the Receivables SPC
for such receivables or interests therein, (b) any recourse, repurchase, hold
harmless, indemnity or similar obligations of the Company or any Subsidiary
(other than the Receivables SPC that is a party to such transaction) in respect
of receivables or interests therein sold, or payments made in respect thereof,
are customary for transactions of this type, and do not prevent the
characterization of the transaction as a true sale under applicable laws
(including debtor relief laws), and (c) any recourse, repurchase, hold harmless,
indemnity or similar obligations of a Receivables SPC in respect of receivables
or interests therein sold, or payments made in respect thereof, are customary
for transactions of this type.

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

“Plan” means 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
as to which the Company or any other member of the Controlled Group may have any
liability.

“Pledge Agreement” means the Pledge Agreement, dated of even date herewith,
between the Company and the Administrative Agent.

“Pledged Bonds” has the meaning assigned to that term in the Pledge Agreement.

“Principal Amount” has the meaning assigned to that term in Section 2.12(b).

“Principal Subsidiary” means (a) each Utility Subsidiary (other than
Commonwealth Edison Company of Indiana, Inc., so long as it does not qualify as
a Principal Subsidiary under the following clause (b)) and (b) each other
Subsidiary the assets of which, as of the date of any determination thereof,
exceeded $250,000,000 in book value at any time during the preceding 12-month
period. Notwithstanding the foregoing, Principal Subsidiary shall not include
any Receivables SPC or Special Purpose Subsidiary.

 

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“Receivables SPC” means a special purpose, bankruptcy-remote Person formed for
the sole and exclusive purpose of engaging in activities in connection with the
purchase, sale and financing of accounts receivable, payment intangibles,
accounts or notes receivable and related rights in connection with and pursuant
to a Permitted Securitization.

“Regulatory Change” means, with respect to any Bank, any change effective after
the Execution Date in United States Federal, state or foreign law or regulations
(including Regulation D) or the adoption or making after such date of any
interpretation, directive or request applying to a class of financial
institutions including such Bank of or under any United States Federal, state or
foreign law or regulations (whether or not having the force of law) by any court
or governmental or monetary authority charged with the interpretation or
administration thereof.

“Reimbursement Obligations” means the obligations of the Company pursuant to
Sections 2.03, 2.04, 2.05, 2.06 and 2.07(b) of this Agreement with respect to
each drawing under a Letter of Credit and each Advance.

“Remarketing Agent” means the Person appointed as the remarketing agent pursuant
to the applicable Remarketing Agreement.

“Remarketing Agreements” means, collectively, the Remarketing Agreements
executed by the Company and the Remarketing Agents with respect to the Bonds;
and “Remarketing Agreement” means any of the foregoing as the context may
require.

“Reportable Event” means a reportable event as defined in Section 4043 of ERISA
and regulations issued under such section with respect to a Plan, excluding such
events as to which the PBGC by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of
such event, provided that a failure to meet the minimum funding standard of
Section 412 of the Code and Section 302 of ERISA shall be a Reportable Event
regardless of the issuance of any such waivers in accordance with either
Section 4043(a) of ERISA or Section 412(d) of the Code.

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

“S&P Rating” means, at any time, the rating issued by S&P and then in effect
with respect to the Company’s senior secured long-term public debt securities
without third-party credit enhancement (it being understood that if the Company
does not have any outstanding debt securities of the type described above but
has an indicative rating from S&P for debt securities of such type, then such
indicative rating shall be used for determining the “S&P Rating”).

“Share” means, with respect to any Bank, the percentage set forth opposite such
Bank’s name on Schedule 1.01 hereto, as adjusted from time to time pursuant to
Section 2.14.

“Single Employer Plan” means a Plan maintained by the Company or any other
member of the Controlled Group for employees of the Company or any other member
of the Controlled Group.

“Special Purpose Subsidiary” means a direct or indirect wholly owned Subsidiary,
substantially all of the assets of which are Intangible Transition Property, and
proceeds thereof, formed solely for the purpose of holding such assets and
issuing Transitional Funding Instruments, and which complies with the
requirements customarily imposed on bankruptcy-remote entities in receivables
securitizations.

 

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“Subsidiary” means, with respect to any Person, any corporation or
unincorporated entity of which more than 50% of the outstanding capital stock
(or comparable interest) having ordinary voting power (irrespective of whether
or not at the time capital stock, or comparable interests, of any other class or
classes of such corporation or entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned by
such Person (whether directly or through one or more other Subsidiaries). Unless
otherwise indicated, each reference to a “Subsidiary” means a Subsidiary of the
Company.

“Supplemental Indenture” means, with respect to a series of Bonds, the
Supplemental Indenture which supplements the Mortgage to provide for the
creation and issuance of the First Mortgage Bond securing such series of Bonds.

“Supplement to Official Statement” means any supplement (including any “sticker”
or “wrap”) to any Official Statement prepared in connection with the issuance
and delivery or extension of the Letters of Credit.

“Taxes” has the meaning assigned to that term in Section 2.16(a).

“Tender Advance” has the meaning assigned to that term in Section 2.04(a).

“Tender Agent” means, with respect to a series of Bonds, the tender agent at the
time serving as such under the Indenture for such series of Bonds.

“Tender Draft” means a Liquidity Drawing under a Letter of Credit to pay the
purchase price of a series of Bonds delivered or deemed delivered to the
Trustee, the Tender Agent or the Remarketing Agent pursuant to the Indenture for
such series and not remarketed by the Remarketing Agent for such series of Bonds
on the date such Bonds are to be purchased.

“Transitional Funding Instrument” means any instrument, pass-through
certificate, note, debenture, certificate of participation, bond, certificate of
beneficial interest or other evidence of indebtedness or instrument evidencing a
beneficial interest that (i) (A) is issued pursuant to a “transitional funding
order” (as such term is defined in Section 18-102 of the Illinois Public
Utilities Act, as amended) issued by the Illinois Commerce Commission at the
request of an electric utility and (B) is secured by or otherwise payable solely
from non-bypassable cent per kilowatt hour charges authorized pursuant to such
order to be applied and invoiced to customers of such utility, or (ii) (A) is
issued pursuant to a financing order of a public utilities commission at the
request of an electric utility pursuant to state legislation which is enacted to
facilitate the recovery of certain specified costs by electric utilities through
non-bypassable cent per kilowatt hour charges and/or demand charges authorized
pursuant to such order to be applied and invoiced to customers of such utility
and (B) is secured by or otherwise payable solely from such non-bypassable
charges.

“Trustee” means the trustee under the Indenture for a series of Bonds, which as
of the date of this Agreement is The Bank of New York Trust Company, N.A.

“Utility Subsidiary” means each Subsidiary that is engaged principally in the
transmission or distribution of electricity or gas and is subject to rate
regulation as a public utility by federal or state regulatory authorities.

 

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SECTION 1.02. Computation of Time Periods.

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

SECTION 1.03. Accounting Terms.

(a) As used in this Agreement, “GAAP” means generally accepted accounting
principles in the United States, applied on a basis consistent with the
principles used in preparing the Company’s audited consolidated financial
statements as of December 31, 2007 and for the fiscal year then ended, as such
principles may be revised as a result of changes in GAAP implemented by the
Company subsequent to such date. In this Agreement, except to the extent, if
any, otherwise provided herein, all accounting and financial terms shall have
the meanings ascribed to such terms by GAAP, and all computations and
determinations as to accounting and financial matters shall be made in
accordance with GAAP. In the event that the financial statements generally
prepared by the Company apply accounting principles other than GAAP (including
as a result of any event described in Section 1.03(b)), the compliance
certificate delivered pursuant to Section 5.01(b)(iv) accompanying such
financial statements shall include information in reasonable detail reconciling
such financial statements to GAAP to the extent relevant to the calculations set
forth in such compliance certificate.

(b) If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth herein and the Company or the Majority
Banks shall so request, the Administrative Agent, the Banks and the Company
shall negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the approval
of the Majority Banks); provided that, until so amended, such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein.

(c) For purposes of any calculation or determination which is to be made on a
consolidated basis (including compliance with Section 5.02(c)), such calculation
or determination shall exclude any assets, liabilities, revenues and expenses
that are included in Company’s financial statements from “variable interest
entities” as a result of the application of FIN No. 46, Consolidation of
Variable Interest Entities – an Interpretation of ARB No. 51, as updated through
FIN No. 46-R and as modified by FIN No. 94.

SECTION 1.04. Interpretation.

The following rules shall apply to the construction of this Agreement unless the
context requires otherwise: (a) the singular includes the plural and the plural
the singular; (b) words importing any gender include the other genders;
(c) references to statutes are to be construed as including all statutory
provisions consolidating, amending or replacing the statute to which reference
is made, and all regulations adopted and publications promulgated pursuant to
such statutes; (d) references to “writing” include printing, photocopy, typing,
lithography and other means of reproducing words in a tangible visible form;
(e) the words “including”, “includes” and “include” shall be deemed to be
followed by the words “without limitation”; (f) references to articles, sections
(or sub-divisions of sections), exhibits, appendices, annexes or schedules are
to those of this Agreement unless otherwise indicated; (g) references to
agreements and other contractual instruments shall be deemed to include all
subsequent amendments and other modifications to such instruments, but only to
the extent that such amendments and other modifications are permitted or not
limited by the terms of this Agreement; and (h) references to Persons include
their respective permitted successors and assigns.

 

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ARTICLE II

AMOUNT AND TERMS OF THE LETTERS OF CREDIT

SECTION 2.01. The Letters of Credit.

(a) Each L/C Issuer agrees, on the terms and conditions set forth in this
Agreement (including the limitations set forth in this Section 2.01), upon the
request of the Company, (1) to issue direct pay Letters of Credit in favor of
the Trustee to provide credit and liquidity support in connection with the
related Bonds from time to time from the date of this Agreement to the
Commitment Expiration Date and (2) to modify Letters of Credit (“Modify,” and
each such action a “Modification”) from time to time from the Date of Issuance
of a Letter of Credit to its L/C Expiration Date; provided that (a) the sum of
(x) the Maximum Credit Amount and (y) all Reimbursement Obligations owed by the
Company to any L/C Issuer shall not exceed the amount agreed upon in writing
between the Company and such L/C Issuer; (b) any Bank’s participation in Letters
of Credit shall not exceed such Bank’s Share of the sum of (x) the Maximum
Credit Amount and (y) all Reimbursement Obligations; (c) the sum of (x) the
Maximum Credit Amount and (y) all Reimbursement Obligations shall not at any
time exceed the aggregate Commitment of all Banks; (d) no L/C Issuer shall be
obligated to issue or Modify any Letter of Credit if (i) any order, judgment or
decree of any court or other governmental authority shall by its terms purport
to enjoin or restrain such L/C Issuer from issuing such Letter of Credit or
(ii) any applicable law, or any request or directive from any governmental
authority having jurisdiction over such L/C Issuer, shall prohibit, or request
or direct that such L/C Issuer refrain from, the issuance of letters of credit
generally or of such Letter of Credit in particular and (e) on the Commitment
Expiration Date, any unused Commitment shall be reduced to zero. Unless
otherwise terminated in accordance with its terms, each Letter of Credit shall
expire on its L/C Expiration Date. Letters of Credit shall not be issued in
respect of any obligation other than the Bonds.

(b) Subject to Section 2.01(a), the Company shall give the applicable L/C Issuer
notice prior to 11:00 A.M., New York City time, at least 15 Business Days (or
such lesser time as the applicable L/C Issuer may agree) prior to the proposed
Date of Issuance or Modification of each Letter of Credit, specifying the name
of the Trustee as beneficiary, the series of Bonds to be supported by such
Letter of Credit, the proposed date of issuance (or Modification) and the expiry
date of such Letter of Credit and describing the proposed terms of such Letter
of Credit. Such notice shall also be accompanied by drafts of the proposed
Official Statement and the other Operative Documents relating to the series of
Bonds to be supported by such Letter of Credit. Upon receipt of such notice, the
applicable L/C Issuer shall promptly notify the Administrative Agent, and the
Administrative Agent shall promptly notify each Bank, of the contents thereof
and of the amount of such Bank’s participation in such proposed Letter of
Credit. The issuance or Modification by an L/C Issuer of any Letter of Credit
shall, in addition to the applicable conditions precedent set forth in Article
III (the satisfaction of which an L/C Issuer shall have no duty to ascertain;
provided that no L/C Issuer shall issue a Letter of Credit if such L/C Issuer
shall have received written notice (which has not been rescinded) from the
Administrative Agent or any Bank that any applicable condition precedent to the
issuance or modification of such Letter of Credit has not been satisfied), be
subject to the conditions precedent that such Letter of Credit shall be
satisfactory to the applicable L/C Issuer and that the Company shall have
executed and delivered such application agreement and/or such other instruments
and agreements relating to such Letter of Credit as such L/C Issuer shall have
reasonably requested (each a “Letter of Credit Application”). In the event of
any conflict (including any additional terms requiring the posting of
collateral) between the terms of this Agreement and the terms of any Letter of
Credit Application, the terms of this Agreement shall control.

(c) Upon the satisfaction of the conditions precedent set forth in this
Agreement, on the applicable Date of Issuance, the applicable L/C Issuer
hereunder will issue to the Trustee one or more

 

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Letters of Credit (substantially in the form of Exhibit A hereto) to support the
related series of Bonds. The initial face amount may be from time to time
reduced and/or reinstated in accordance with the terms of the applicable Letter
of Credit. The Banks will use only their own funds in honoring a drawing on the
Letters of Credit. The Company irrevocably and unconditionally instructs the
applicable L/C Issuer to reduce or reinstate a Letter of Credit in accordance
with its terms or in the event the Trustee elects to reduce the stated amount of
any Letter of Credit in connection with a redemption of Bonds or otherwise.

SECTION 2.02. Letter of Credit Fees.

(a) The Company hereby agrees to pay the fees specified in the Fee Letters, to
the parties, at the times and in the amounts set forth therein.

(b) The Company agrees to pay to the Administrative Agent for the account of the
Banks, ratably in accordance with their respective Shares:

(i) a letter of credit fee on the Maximum Credit Amount for the Letters of
Credit, computed at a rate per annum equal to the Applicable Participation Fee
Rate from the applicable Date of Issuance to the applicable L/C Expiration Date
of such Letters of Credit, payable quarterly in arrears on the last day of June
2008 and on the last day of each September, December, March and June thereafter
and on each applicable L/C Expiration Date; and

(ii) a commitment fee equal to 0.175% per annum multiplied by the amount by
which the Commitment exceeds the average daily Maximum Credit Amount for the
Letters of Credit, for the period from the Execution Date to the Commitment
Expiration Date, payable in arrears on the Commitment Expiration Date.

(c) Any amount of fees not paid when due shall bear interest, from the date such
amount of fees was due until the date of payment in full, at the Default Rate,
payable on demand and on the date of payment in full of such amount.

SECTION 2.03. Reimbursement.

Except as otherwise specified in Section 2.04(a), Company hereby agrees to pay
to the Administrative Agent for the account of the applicable L/C Issuer any
amount drawn under a Letter of Credit immediately after (and on the same
Business Day as) such drawing is paid by an L/C Issuer, plus interest at the
Default Rate payable on demand and on the date of payment in full on any such
amount remaining unpaid from the date such amount becomes due and payable until
payment in full. Each L/C Issuer will pay to the Administrative Agent, for the
account of the Banks, all amounts received by it from the Company for
application in payment, in whole or in part, of the Reimbursement Obligation in
respect of Letters of Credit issued by such L/C Issuer, but only to the extent
such Bank has made payment to the Administrative Agent, for the account of such
L/C Issuer, in respect of such Letters of Credit pursuant to Section 2.12.

SECTION 2.04. Tender Advances.

(a) If any L/C Issuer shall make any payments under a Letter of Credit pursuant
to a Tender Draft to pay the purchase price of Bonds being purchased upon a
tender thereof, and the conditions set forth in Section 3.03 shall have been
fulfilled, such payments shall automatically be deemed to constitute and shall
be an advance made by such L/C Issuer to the Company on the date and in the
amount of such payment, each such advance being a “Tender Advance” and
collectively the “Tender Advances”; provided, that if such conditions are not
satisfied the payments made by such L/C Issuer shall immediately become due and
payable.

 

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(b) Subject to Sections 2.07 and 6.02, the principal amount of each Tender
Advance, together with all accrued and unpaid interest thereon, shall be due and
payable on the earlier of (i) the date that is thirty (30) days after the making
of such Advance (or if such date is not a Business Day, the next succeeding
Business Day) and (ii) the applicable L/C Expiration Date.

(c) Upon each Tender Draft there shall be delivered to the Trustee, as agent for
the Administrative Agent, registered in the name of the Company but with the
Administrative Agent registered as pledgee, in duly transferable form, the Bonds
purchased with the proceeds of such Tender Draft, i.e. the Pledged Bonds (or in
the alternative, as provided in the Pledge Agreement for certificated Bonds held
by The Depository Trust Company or its nominee or a similar securities
depository, the Trustee shall cause its records in its capacity as a “DTC
participant” or similar capacity with respect to another depository, to reflect
beneficial ownership of the Pledged Bonds by the Company subject to the lien and
security interest of the Administrative Agent). As security for the payment of
each Tender Advance under this Agreement, the Company is pledging to the
Administrative Agent pursuant to the Pledge Agreement, and granting to the
Administrative Agent, for the benefit of the Administrative Agent, the L/C
Issuers and the Banks, a security interest in, all of its right, title and
interest in and to all Pledged Bonds arising in connection with a Tender Draft.

(d) Upon payment to the Administrative Agent or the applicable L/C Issuer of any
Tender Advance (together with all accrued interest thereon), other than payment
from the proceeds of a remarketing of the Bonds with respect to which such
Tender Advance was made pursuant to the applicable Indenture, and provided that
the Administrative Agent shall not have notified the Trustee and the Remarketing
Agent that an Event of Default has occurred and is continuing, the
Administrative Agent (or the Trustee (as custodian for the Administrative Agent)
at the direction of the Administrative Agent) shall release from the pledge and
security interest created hereby the Pledged Bonds purchased with the proceeds
of such Tender Advance. The Administrative Agent shall have no obligation to
release any such Pledged Bonds pursuant to this subsection (d) unless the entire
Tender Advance incurred to buy such Pledged Bonds, together with accrued
interest thereon, has been paid, and the related Letter of Credit shall have
been returned to the applicable L/C Issuer for cancellation. Such Pledged Bonds
shall be delivered to the Company or its designee on payment as aforesaid.

(e) In the event Pledged Bonds are remarketed pursuant to the applicable
Indenture, and provided that the Administrative Agent shall not have notified
the Trustee and Remarketing Agent in writing that an Event of Default has
occurred and is continuing, the Administrative Agent (or the Trustee (as
custodian for the Administrative Agent) at the direction of the Administrative
Agent) shall also release from the pledge and security interest evidenced by the
Pledge Agreement a principal amount of Pledged Bonds equal to the principal
amount of Bonds so remarketed. The Pledged Bonds shall be released (i) upon
notice from the Remarketing Agent to the Administrative Agent one Business Day
prior to such release (or such shorter period of time as may be agreed to by the
parties) specifying the principal amount of Bonds purchased by and to be
delivered to such purchaser, and (ii) upon receipt by the Trustee or Remarketing
Agent, as applicable, for the account of the Administrative Agent or L/C Issuer,
as applicable, as provided for in the related Indenture, of remarketing proceeds
with respect to such remarketed Pledged Bonds in an amount not less than the
principal amount of the Pledged Bonds, plus accrued interest thereon to the date
of remarketing.

(f) Any interest or any principal received by the Administrative Agent or the
applicable L/C Issuer in respect of Pledged Bonds shall be credited against the
Reimbursement Obligations and applied first to interest due pursuant to
Section 2.05.

 

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SECTION 2.05. Interest on Advances.

(a) General. The Company shall pay to the Administrative Agent, for the account
of the Banks in proportion to their respective Shares, interest on the unpaid
principal amount of each Tender Advance from the date of such Advance until such
principal amount is paid in full at the applicable rate set forth below.

(b) Base Rate. The Company shall pay to the Administrative Agent, for the
account of the Banks in proportion to their respective Shares, interest on each
Advance from the date of such Advance until the date the principal amount of
such Advance becomes due or is prepaid, payable quarterly in arrears and on the
date such Advance becomes due or is prepaid, at a fluctuating interest rate per
annum in effect from time to time equal to the sum of (i) the Base Rate in
effect from time to time, plus (ii) 1.00%.

(c) Default Interest. The Company shall pay to the Administrative Agent, for the
account of the Banks in proportion to their respective Shares, interest on the
unpaid principal amount of each Advance that is not paid when due and, to the
extent permitted by law, on the unpaid amount of all interest, fees and other
amounts payable hereunder that is not paid when due (including, for the
avoidance of doubt, amounts due pursuant to Section 2.03) whether at maturity,
by acceleration or otherwise, payable on demand, at a rate per annum equal at
all times to 2% per annum above the Base Rate in effect from time to time (the
“Default Rate”).

(d) Notice to Trustee. At any time that Bonds are held under the Pledge
Agreement, the Administrative Agent, at the request of the Trustee, shall notify
such Trustee of the rate of interest applicable to, and interest payment dates
for, outstanding Advances relating to such Pledged Bonds.

SECTION 2.06. Payment of Advances.

Subject to Sections 2.07 and 6.02, each Tender Advance shall be due and payable
as specified in Section 2.04(b).

SECTION 2.07. Prepayments; Reinstatement of Letter of Credit Amounts.

(a) The Company may, upon same-day notice to the Administrative Agent, prepay
the outstanding amount of any Advance in whole or in part with accrued interest
to the date of such prepayment on the amount prepaid.

(b) Prior to or simultaneously with the remarketing or redemption of Bonds
acquired by any Trustee with the proceeds of one or more draws under the Letters
of Credit related to such Bonds by one or more Tender Drafts, or if any Pledged
Bonds shall be determined to be invalid, the Company shall prepay or cause the
Trustee on behalf of the Company to prepay the then outstanding Tender Advances
resulting from such draw or draws (in the order in which they were made) and
accrued interest thereon, if any, by paying (or causing to be paid) to the
Administrative Agent (if such prepayment is being made by the Company), for the
account of the Banks in proportion to their respective Shares, or to the
applicable L/C Issuer (if such prepayment is being made by any Trustee), for the
account of the Banks in proportion to their respective Shares, an amount equal
to the sum of (i) the aggregate principal amount of the Bonds being resold or to
be resold or being redeemed or that have been determined to be invalid, plus
(ii) accrued interest thereon, for application to the prepayment of such
Advances. With respect to payments of Tender Advances made by any Trustee to any
L/C Issuer, such payments, when such L/C Issuer shall also have received
certificates completed and signed by the Trustee in substantially the form
provided in the applicable Letter of Credit, shall be applied by the
Administrative Agent in reimbursement of such drawings (and as prepayment of
Tender Advances resulting from such drawings in the manner described

 

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above). Each of the Company and the Banks irrevocably authorizes the L/C Issuers
to rely on such certificate and to reinstate the applicable Letters of Credit in
accordance therewith, and otherwise to reinstate the applicable Letters of
Credit at the times and in the manner specified therein.

SECTION 2.08. Increased Costs.

(a) If any Bank determines that, as a result of any Regulatory Change other than
a Regulatory Change that would be governed by Section 2.16, the amount of
capital required or expected to be maintained by such Bank is increased based
upon the existence of a Letter of Credit or such Bank’s commitment to make or
participate in Advances hereunder, then, upon demand by such Bank, the Company
shall immediately pay, from time to time as specified by such Bank, such amounts
as such Bank may reasonably determine to be necessary to compensate such Bank
for any additional costs or for any reduction in such Bank’s rate of return on
its capital to the extent that such Bank reasonably determines that such
additional costs or such reduction in such Bank’s rate of return on its capital
is attributable to the maintenance by such Bank of capital in respect of a
Letter of Credit and such Bank’s commitment to make or participate in Advances
hereunder; provided that no Bank shall be entitled to demand such compensation
more than 90 days following the last day following the application of such
Regulatory Change in respect of which such demand is made and no L/C Issuer
shall be entitled to demand such compensation more than 90 days following the
expiration or termination (by a drawing or otherwise) of a Letter of Credit in
respect of which such demand is made; provided, further, that the foregoing
proviso shall in no way limit the right of any Bank or an L/C Issuer to demand
or receive such compensation to the extent that such compensation relates to the
retroactive application of any Regulatory Change if such demand is made within
90 days after the implementation of such retroactive Regulatory Change.

(b) Each Bank will notify the Company of any Regulatory Change that will entitle
such Bank to compensation pursuant to this Section 2.08 as promptly as
practicable. Each Bank will furnish to the Company a certificate setting forth
in reasonable detail the basis for the amount of each request by such Bank for
compensation. Determinations by each Bank of the amounts required to compensate
such Bank shall be conclusive, absent manifest error.

SECTION 2.09. Payments and Computations.

(a) The Company shall make each payment hereunder without condition or deduction
for any counterclaim, defense, recoupment or setoff (i) in the case of amounts
due pursuant to Sections 2.03 and 2.07(b), not later than 2:00 P.M. (New York
City time), and (ii) in all other cases, not later than 12:00 Noon (New York
City time) on the day when due in lawful money of the United States of America
to the Administrative Agent, for the account of the applicable L/C Issuer or the
Banks, as appropriate, at its address referred to in Section 8.02, in same day
funds, except that payments pursuant to Sections 2.08, 2.16, 8.06 and 8.07 shall
be made directly to the Person entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. Computations of
the fees hereunder and the Base Rate (if calculated on the basis of the
Administrative Agent’s prime rate) and Default Rate shall be made by the
Administrative Agent on the basis of a 365/366 day year, as the case may be, for
the actual number of days (including the first day but excluding the last day)
elapsed. Computations of the Base Rate (if calculated on the basis of the
Federal Funds Rate) shall be made by the Administrative Agent on the basis of a
360 day year for the actual number of days (including the first day but
excluding the last day) elapsed.

(b) If, after the Administrative Agent has paid to any L/C Issuer or any Bank
any amount pursuant to subsection (a) above, such payment is rescinded or must
otherwise be returned or must be paid over by the Administrative Agent or any
L/C Issuer to any Person, whether pursuant to any bankruptcy or

 

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insolvency law, or otherwise, such Bank shall, at the request of the
Administrative Agent or such L/C Issuer promptly repay to the Administrative
Agent or such L/C Issuer, as the case may be, an amount equal to its ratable
share of such payment, together with any interest required to be paid by the
Administrative Agent or such L/C Issuer with respect to such payment. Upon each
Bank’s repayment in full of its ratable share of such payment, the Company
agrees that to the extent of such repayment, such Bank shall be deemed to be a
direct creditor of the Company.

SECTION 2.10. Non-Business Days.

Whenever any payment to be made hereunder shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest or commission, as the case may be.

SECTION 2.11. Evidence of Debt.

The Company shall issue Notes payable to the order of any Bank that shall
request such Note. The Administrative Agent shall maintain in accordance with
its usual practice an account or accounts evidencing the indebtedness of the
Company resulting from each drawing under a Letter of Credit and from each
Advance made from time to time hereunder and the amounts of principal and
interest payable and paid from time to time hereunder and of the respective
Shares of the Reimbursement Obligations of the Banks. In any legal action or
proceeding in respect of this Agreement, the entries made in such account or
accounts shall, in the absence of manifest error, be conclusive evidence of the
existence and amounts of the obligations of the Company therein recorded. Upon
the written request of the Company, the Administrative Agent agrees to provide
to the Company a statement of the amounts owed the Banks under this Agreement.

SECTION 2.12. Syndication; Reimbursement of L/C Issuers.

(a) Each L/C Issuer hereby sells and transfers to each Bank (and upon the
issuance or Modification of each Letter of Credit, is deemed to have sold), and
each Bank hereby purchases and acquires from each L/C Issuer (and upon the
issuance or Modification of each Letter of Credit is deemed to have purchased),
an undivided interest and participation, to the extent of such Bank’s Share in
and to the Letters of Credit issued by such L/C Issuer, including the
obligations of such L/C Issuer under and in respect thereof, the Tender Advances
and the Reimbursement Obligations; provided, that such L/C Issuer shall remain
the sole party obligated to make payments under the Letters of Credit issued by
such L/C Issuer.

(b) In the event that any L/C Issuer shall make any payment under a Letter of
Credit and the Company shall not reimburse such L/C Issuer on the same Business
Day (including any payment in respect of any Tender Advance) and in full for
such payment (the difference between the amount of such payment and the amount
reimbursed by the Company being the “Principal Amount”), the Administrative
Agent will promptly notify each of the other Banks of such Principal Amount and
each such Bank will unconditionally pay to the Administrative Agent (i) on the
same Business Day if the Administrative Agent provides such Bank with telephonic
notice received not later than 3:00 P.M. (New York City time) on such Business
Day, or (ii) not later than 12:00 Noon (New York City time) on the Business Day
next succeeding the Business Day such notice is received, if such notice is
received after 3:00 P.M. (New York City time) on a Business Day, an amount equal
to its Share of the Principal Amount in United States dollars and in same day
funds in payment for its Share of the Reimbursement Obligations with respect to
such Principal Amount, plus an amount, payable on demand, from and including the
date when such Principal Amount becomes outstanding to, but not including, the
date such Bank’s Share of the Principal

 

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Amount is paid equal to the Effective Federal Funds Rate plus any applicable
amounts pursuant to the Rules of Interbank Compensation of the Council on
International Banking or the New York Clearinghouse Compensation Committee, as
the case may be, in effect from time to time, for the first three days and,
thereafter, at the Base Rate. “Effective Federal Funds Rate” means, for any day,
the weighted average of the rates on overnight Federal Funds transactions with
members of the Federal Reserve System, as published for such day by the Federal
Reserve Bank of New York. Upon payment in full for its Share of such
Reimbursement Obligations pursuant to this Section 2.12(b), the Company agrees
that to the extent of such payment, such Bank shall be deemed to be a direct
creditor of the Company.

(c) If any Bank shall default in the payment when due of its Share of any
Reimbursement Obligations, in addition to any other claim or remedy the
applicable L/C Issuer may have against such Bank, such Bank shall not be
entitled to receive any payments pursuant to this Agreement or otherwise have
any other rights hereunder until all amounts due and payable by such Bank to
such L/C Issuer hereunder shall have been paid in full. In furtherance of the
foregoing, if any Bank shall fail to make any payment to any L/C Issuer in
accordance with subsection (b) above, and such failure shall continue for five
Business Days following written notice of such failure from such L/C Issuer to
such Bank, such L/C Issuer may acquire, or, subject to Section 2.14, transfer to
a third party in exchange for the sum or sums due from such Bank, such Bank’s
interest in the related Reimbursement Obligations and all other rights of such
Bank hereunder in respect thereof, without, however, relieving such Bank from
any liability for damages and reasonable costs and expenses suffered by such L/C
Issuer as a result of such failure. The purchaser of any such interest shall be
deemed to have acquired an interest senior to the interest of such Bank and
shall be entitled to receive all subsequent payments which such L/C Issuer or
the Administrative Agent would otherwise have made hereunder to such Bank in
respect of such interest.

SECTION 2.13. Obligations Absolute.

The payment obligations of the Company under this Agreement to reimburse the L/C
Issuers for drawings made under the Letters of Credit and the obligations of the
Banks under Section 2.12 shall be unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following circumstances:

(i) any lack of validity or enforceability of the Operative Documents, the
Letters of Credit, the Fee Letters, or any other agreement, certificate or
instrument relating thereto;

(ii) any amendment or waiver of or any consent to departure from all or any of
the Operative Documents;

(iii) the existence of any claim, set-off, defense or other right which the
Company may have at any time against any Trustee or any other beneficiary, or
any transferee, of the Letters of Credit (or any Persons for whom any Trustee,
any such beneficiary or any such transferee may be acting), the Banks, or any
other Person whether in connection with this Agreement, the transactions
contemplated herein or in the Operative Documents, or any unrelated transaction;

(iv) any statement, draft, demand, certificate or any other document presented
under the Letters of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;

(v) payment by the L/C Issuers under the Letters of Credit against presentation
of a draft or certificate which does not comply with the terms of such Letter of
Credit; and

 

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(vi) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing.

SECTION 2.14. Assignments and Participations.

(a) Each Bank may assign to one or more Eligible Assignees all or a percentage
interest of its rights and obligations under this Agreement but if less than
all, then such assignment shall be in an amount equal to $5,000,000 or an
integral multiple thereof and such assigning Bank shall continue to hold a Share
of at least $5,000,000, provided, that (i) no assignment by any Bank may be made
to any Eligible Assignee, except with the prior written consent of (A) the
Company, which consent shall not be unreasonably withheld or delayed and shall
not be required (1) in the case of an assignment to a Bank, an Affiliate of a
Bank or an Approved Fund, or (2) if an Event of Default shall have occurred and
be continuing and (B) the L/C Issuers, which consent may be given or withheld in
the sole discretion of the L/C Issuers; (ii) the L/C Issuers may not assign
their direct obligations under the Letters of Credit, and (iii) each such
assignment shall be of a constant, and not a varying, percentage of the
assignor’s rights and obligations under this Agreement. The parties to each such
assignment shall execute and deliver to the Administrative Agent an instrument
of assignment in form and substance satisfactory to the Administrative Agent and
the Company, and a processing fee of $3,500, and the Administrative Agent will
record in a register maintained for such purpose the name of the assignee and
the percentage participation interest assigned by the assignor and assumed by
the assignee for purposes of the determination of such assignor’s and assignee’s
respective Shares. Upon such execution, delivery, fee payment, acceptance and
recording, from and after the effective date specified in each assignment, which
effective date shall be at least five Business Days after the delivery thereof
to the Administrative Agent, the assignee shall, to the extent of such
assignment, become a party hereto and have all of the rights and obligations of
a Bank hereunder and, to the extent of such assignment, such assigning Bank
shall be released from its obligations hereunder but shall continue to be
entitled to the benefits of Sections 2.08, 2.16, 8.05, 8.06 and 8.07 (without
relieving such Bank from any liability for damages, costs and expenses suffered
by the Administrative Agent, the L/C Issuers or the Company as a result of the
failure by such Bank to perform its obligations hereunder).

(b) Each Bank may grant participations to one or more Persons in all or any part
of, or any interest (undivided or divided) in, such Bank’s rights and/or
obligations under this Agreement (any such Person being referred to herein as a
“Participant”); provided, however, that (i) such Bank’s obligations under this
Agreement shall remain unchanged; (ii) such Bank shall remain solely responsible
to the other parties hereto for the performance of such obligations; (iii) in no
event shall such Bank be obligated to the Participant to take or refrain from
taking any action hereunder, except that such Bank may agree with the
Participant that it will not, without the consent of the Participant, agree to
(A) the extension of any L/C Expiration Date or of any date fixed for the
payment of principal of or interest, fees (if the Participant is entitled to any
part thereof) or any other payment (if the Participant is entitled to any part
thereof) pursuant to this Agreement or the Reimbursement Obligations, (B) the
reduction of any payment of principal thereof, or (C) the reduction of the rate
at which either interest is payable thereon or (if the Participant is entitled
to any part thereof) the reduction of the fees payable hereunder to a level
below the rate at which the Participant is entitled to receive interest or such
fees (as the case may be) in respect to such participation; (iv) the Company,
the L/C Issuers and the Administrative Agent shall continue to deal solely and
directly with such Bank in connection with such Bank’s rights and obligations
under this Agreement; and (v) such Participant shall be entitled to the cost
protection provisions provided for in Sections 2.08 and 2.16; provided, further,
that the amount of such cost protection shall not exceed the amount of cost
protection to which such Bank selling such participation would have been
entitled under Section 2.08 or 2.16, as the case may be. Promptly after any Bank
grants any such participation, such Bank shall inform the Company of the
identity of the Participant and the amount of such participation.

 

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(c) Notwithstanding any other provision set forth in this Agreement, any Bank
may at any time create a security interest in all or any portion of its rights
under this Agreement (including the Advances owed to it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.

SECTION 2.15. Reserved.

SECTION 2.16. Taxes.

(a) All payments by or on behalf of the Company hereunder 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 each Bank, each L/C Issuer and the Administrative Agent, taxes imposed on its
net income, and franchise taxes imposed on it, by the jurisdiction under the
laws of which such Bank, such L/C Issuer or the Administrative Agent (as the
case may be) is organized or any political subdivision thereof and, in the case
of each Bank, taxes imposed on its net income, and franchise taxes imposed on
it, by the jurisdiction of such Bank’s Domestic Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities, “Taxes”). If the Company shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Bank, any L/C Issuer or the Administrative Agent, (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.16) such Bank, such L/C Issuer or the Administrative Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Company shall make such deductions and
(iii) the Company shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.

(b) In addition, the Company agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies to the extent arising from the execution, delivery or registration of
this Agreement (all of the foregoing, “Other Taxes”).

(c) No Bank may claim or demand payment or reimbursement in respect of any Taxes
or Other Taxes pursuant to this Section 2.16 if such Taxes or Other Taxes, as
the case may be, were imposed solely as the result of a voluntary change in the
location of the jurisdiction of such Bank’s Domestic Lending Office.

(d) The Company will indemnify each Bank, each L/C Issuer and the Administrative
Agent for the full amount of Taxes or Other Taxes (including any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this Section 2.16)
paid by such Bank, such L/C Issuer or the Administrative Agent (as the case may
be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within 30 days
from the date such Bank, such L/C Issuer or the Administrative Agent (as the
case may be) makes written demand therefor.

(e) Each Bank organized under the laws of a jurisdiction outside the United
States shall provide the Administrative Agent and the Company with the forms
prescribed by the Internal Revenue Service of the United States certifying that
such Bank is exempt from United States withholding taxes with respect to all
payments to be made to such Bank hereunder. If for any reason during the term of
this Agreement, any Bank 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 Bank shall notify the Administrative Agent and the
Company in writing to that effect. Unless the Company and the Administrative
Agent have received forms or other documents satisfactory to them (as set forth
above)

 

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indicating that payments hereunder are not subject to United States withholding
tax, the Company or the Administrative Agent shall withhold taxes from such
payments at the applicable statutory rate in the case of payments to or for any
Bank organized under the laws of a jurisdiction outside the United States and
such Bank may not claim or demand payment or reimbursement for such withheld
taxes pursuant to this Section 2.16.

(f) Any Bank claiming any additional amounts payable pursuant to this
Section 2.16 shall use its best efforts (consistent with its internal policy and
legal and regulatory restrictions) to change the jurisdiction of its Applicable
Lending Office if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts which may thereafter accrue
and would not, in the reasonable judgment of such Bank, be otherwise
disadvantageous to such Bank.

(g) If the Company makes any additional payment to any Bank pursuant to this
Section 2.16 in respect of any Taxes or Other Taxes, and such Bank determines
that it has received (i) a refund of such Taxes or Other Taxes or (ii) a credit
against or relief or remission for, or a reduction in the amount of, any tax or
other governmental charge attributable solely to any deduction or credit for any
Taxes or Other Taxes with respect to which it has received payments under this
Section 2.16, such Bank shall, to the extent that it can do so without prejudice
to the retention of such refund, credit, relief, remission or reduction, pay to
the Company such amount as such Bank shall have determined to be attributable to
the deduction or withholding of such Taxes or Other Taxes. If such Bank
determines that it was not entitled to such refund, credit, relief, remission or
reduction to the full extent of any payment made pursuant to the first sentence
of this Section 2.16(g), the Company shall upon notice and demand of such Bank
promptly repay the amount of such overpayment. Any determination made by a Bank
pursuant to this Section 2.16(g) shall in the absence of bad faith or manifest
error be conclusive, and nothing in this Section 2.16(g) shall be construed as
requiring any Bank to conduct its business or to arrange or alter in any respect
its tax or financial affairs (except as required by Section 2.16(f)) so that it
is entitled to receive such a refund, credit or reduction or as allowing any
Person to inspect any records, including tax returns, of such Bank.

(h) Without prejudice to the survival of any other agreement of the Company or
any Bank hereunder, the agreements and obligations of the Company and the Banks
contained in this Section 2.16 shall survive the payment in full of principal
and interest hereunder and the termination of this Agreement; provided that no
Bank shall be entitled to demand any payment from the Company under this
Section 2.16 more than one year following the payment to or for the account of
such Bank of all other amounts payable by the Company hereunder to such Bank and
the termination of such Bank’s Commitment; provided, further, that the foregoing
proviso shall in no way limit the right of any Bank to demand or receive any
payment under this Section 2.16 to the extent that such payment relates to the
retroactive application of any Taxes or Other Taxes if such demand is made
within one year after the implementation of such Taxes or Other Taxes.

SECTION 2.17. Reserved.

SECTION 2.18. Substitution of Bank.

If any Bank has demanded compensation under Sections 2.08 or 2.16, the Company
shall have the right at its sole expense, with the assistance of the
Administrative Agent, to seek one or more mutually satisfactory Eligible
Assignees (which may be one or more of the Banks) to purchase for cash the Share
of such Bank in the outstanding Advances and the Commitment and to assume all of
such Bank’s other rights and obligations hereunder pursuant to an instrument of
assignment in form and substance reasonably acceptable to the Administrative
Agent and otherwise in accordance with the provisions of Section 2.14(a);
provided, that (i) any such assignment shall be without recourse to the
assigning Bank,

 

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(ii) such assigning Bank shall have received payment of an amount equal to the
outstanding principal of its Advances, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder, from the assignee (to the extent
of such outstanding principal and accrued interest and fees) or the Company (in
the case of all other amounts) and (iii) such assignment will result in a
reduction of such compensation.

ARTICLE III

CONDITIONS OF CLOSING AND ISSUANCE AND ADVANCES

SECTION 3.01. Conditions Precedent to Closing.

This Agreement shall become effective if the Administrative Agent shall have
received all of the following each dated a date reasonably satisfactory to the
Administrative Agent and otherwise in form and substance reasonably satisfactory
to the Administrative Agent:

(a) (i) A counterpart of this Agreement signed on behalf of each party hereto or
(ii) written evidence (which may include facsimile transmission of a signed
signature page of this Agreement) that each party hereto has signed a
counterpart of this Agreement.

(b) Certified copies of resolutions of the Board of Directors or equivalent
managing body of the Company approving the transactions contemplated by this
Agreement and of all documents evidencing other necessary organizational action
of the Company with respect to this Agreement and the documents contemplated
hereby.

(c) A certificate of the Secretary or an Assistant Secretary of Company
certifying (A) the names and true signatures of the officers of the Company
authorized to sign this Agreement and the other documents to be delivered
hereunder; (B) that attached thereto are true and correct copies of the
organizational documents of the Company, in each case in effect on such date;
and (C) that attached thereto are true and correct copies of all governmental
and regulatory authorizations and approvals required for the due execution,
delivery and performance by the Company of this Agreement and the documents
contemplated hereby.

(d) A certificate signed by either the chief financial officer, principal
accounting officer or treasurer of the Company stating that (A) the
representations and warranties contained in Section 4.01 are correct on and as
of the date of such certificate as though made on and as of such date, (B) no
Default or Event of Default has occurred and is continuing on the date of such
certificate and (C) all required governmental and third party consents and
approvals in connection with this Agreement have been obtained and are in full
force and effect.

(e) A favorable opinion of Sidley Austin LLP, counsel for the Company, in form
and substance reasonably acceptable to the Administrative Agent.

(f) For the account of the parties entitled thereto, payment of all fees and
other amounts payable pursuant to the Fee Letters.

(g) A Note, duly executed by or on behalf of the Company and made payable to
each Bank that has requested a Note.

 

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SECTION 3.02. Additional Conditions Precedent to Issuance of Letters of Credit.

The obligations of any L/C Issuer to issue any Letter of Credit in respect of
any series of Bonds shall be subject to the further conditions precedent that on
or before the Date of Issuance for such Letter of Credit, the Administrative
Agent shall have received all of the following each dated a date reasonably
satisfactory to the Administrative Agent and otherwise in form and substance
reasonably satisfactory to the Administrative Agent and the related L/C Issuer:

(a) A certificate signed by either the chief financial officer, principal
accounting officer or treasurer of the Company stating that (i) the
representations and warranties contained in Section 4.01 are correct on and as
of the Date of Issuance as though made on and as of such date, (ii) no event has
occurred and is continuing, or would result from the issuance of such Letter of
Credit, that constitutes a Default or an Event of Default, (iii) the
representations and warranties of the Company contained in the Operative
Documents relating to such series of Bonds to which it is a party are correct in
all material respects on and as of the Date of Issuance as though made on and as
of such date and (iv) all required governmental and third party consents and
approvals in connection with the issuance of such Letter of Credit have been
obtained and are in full force and effect.

(b) Executed copies (or duplicates thereof) of each of the Operative Documents
relating to such series of Bonds and the final copy of the applicable Official
Statement, together with any supplements thereto, for such series of Bonds
together with a copy of each opinion, certificate and other document or
instrument (in the case of each opinion, addressed to the Administrative Agent
either directly or through a reliance letter), including rating letters
indicating that the ratings of the related series of Bonds have been rated at
least the ratings of the applicable L/C Issuer, required to be delivered
pursuant to the applicable Indenture in connection with the issuance of such
series of Bonds.

(c) Evidence that the First Mortgage Bond relating to such series of Bonds has
been authenticated and issued to the Trustee for such series of Bonds shall be
in the aggregate principal amount not less than the principal amount of such
series of Bonds being issued.

(d) A certificate of a duly authorized officer of the Company certifying that
attached thereto is (i) a true, correct and complete copy of the Mortgage, dated
July 1, 1923, as amended and supplemented by supplemental indentures, including
the Supplemental Indenture, dated August 1, 1944, from the Company to the
Mortgage Trustees, omitting copies of supplemental indentures that provide for
the issuance of Debt, (ii) a listing of the supplemental indentures currently in
effect and confirming that such supplemental indentures are the only
supplemental indentures or other instruments in effect that have amended or
supplemented the original Mortgage and (iii) a complete and correct copy of the
Supplemental Indenture related to the series of Bonds being issued.

(e) Evidence that all conditions precedent to the issuance of such series of
Bonds shall have occurred.

(f) The Company shall have paid any fees and disbursements payable to the
Administrative Agent and the Banks pursuant to this Agreement on or prior to the
Date of Issuance.

(g) Such other approvals, opinions or documents in connection with such series
of Bonds as any Bank may reasonably request in connection with this Agreement or
any Operative Document.

(h) A certificate of the Trustee for such series of Bonds as to the principal
amount of such series of Bonds outstanding in respect of which it is acting as
Trustee.

 

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

The Company shall be deemed to have represented and warranted, on each
applicable Date of Issuance, that the certifications contained in
Section 3.02(a) are accurate.

SECTION 3.03. Conditions Precedent to Each Advance or Modification.

(a) (1) Each payment made by any L/C Issuer under the Letters of Credit pursuant
to a Tender Draft shall constitute an Advance hereunder only if on the date of
such payment the following statements (i)-(iii) shall be true and correct; and
(2) the obligations of any L/C Issuer to Modify any Letter of Credit in respect
of any series of Bonds shall be subject to the further conditions precedent that
on the date of such Modification the following statements (i)-(iii) shall be
true and correct:

(i) The representations and warranties contained in Section 4.01 are correct on
and as of the date of such Advance or Modification (as the case may be), before
and after giving effect to such Advance or Modification (as the case may be) and
as it relates to such Advance, to the application of the proceeds therefrom, as
though made on and as of such date;

(ii) The representations and warranties of the Company contained in the
Operative Documents relating to such series of Bonds are correct on and as of
the date of such Advance or Modification (as the case may be), before and after
giving effect to such Advance or Modification (as the case may be) and as it
relates to such Advance, to the application of the proceeds therefrom, as though
made on and as of such date, except for changes that would not materially
adversely affect the ability of the Company to meet its obligations hereunder
and under the Pledge Agreement; and

(iii) No event has occurred and is continuing, or would result from such Advance
or Modification (as the case may be) or as it relates to such Advance or
Modification (as the case may be), from the application of the proceeds
therefrom, that constitutes a Default or an Event of Default.

Unless the Company shall have previously advised the Administrative Agent in
writing or the Administrative Agent has actual knowledge that one or more of the
above statements is no longer true, the Company shall be deemed to have
represented and warranted, on the date of each payment by any L/C Issuer under a
Letter of Credit pursuant to a Tender Draft, and on the date of making any
Advance (or in the case of a Modification, on the date of such Modification),
that on the date of such payment (or Modification, as the case may be) the above
statements are true.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.01. Representations and Warranties of the Company.

In order to induce the Banks to enter into this Agreement, the Company
represents and warrants to each of the Administrative Agent, the L/C Issuers and
the Banks as follows:

(a) The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Illinois.

 

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(b) The execution, delivery and performance by the Company of this Agreement and
the Operative Documents to which it is party are within the Company’s powers,
have been duly authorized by all necessary organizational action on the part of
the Company, and do not and will not contravene (i) the organizational documents
of the Company, (ii) applicable law or (iii) any contractual or legal
restriction binding on or affecting the Company or any Subsidiary.

(c) No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required for the due
execution, delivery and performance by the Company of this Agreement or the
Operative Documents to which it is party except any order that has been duly
obtained and is (x) in full force and effect and (y) sufficient for the purposes
hereof.

(d) This Agreement and each of the Operative Documents to which the Company is a
party is a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as the enforceability
thereof may be limited by equitable principles or bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally.

(e) (i) The consolidated balance sheet of the Company and its Subsidiaries as at
December 31, 2007 and the related consolidated statements of income, retained
earnings and cash flows of the Company and its consolidated Subsidiaries for the
fiscal year then ended, certified by PricewaterhouseCoopers LLP, copies of which
have been furnished to the Banks, fairly present in all material respects the
consolidated financial condition of the Company and its consolidated
Subsidiaries as at such date and the consolidated results of the operations of
the Company and its Subsidiaries for the periods ended on such date in
accordance with GAAP; and (ii) since December 31, 2007, there has been no
Material Adverse Change.

(f) Except as disclosed in the Company’s Annual, Quarterly or Current Reports,
each as filed with the Securities and Exchange Commission and delivered to the
Banks prior to the Execution Date, there is no pending or, to the knowledge of
the Company after due inquiry, threatened action, investigation or proceeding
affecting the Company or any Subsidiary before any court, governmental agency or
arbitrator that may reasonably be anticipated to have a Material Adverse Effect.
There is no pending or, to the knowledge of the Company after due inquiry,
threatened action or proceeding against the Company or any Subsidiary that
purports to affect the legality, validity, binding effect or enforceability
against the Company of this Agreement.

(g) No proceeds from the issuance of any Bonds or from any Advance have been or
will be used directly or indirectly in connection with the acquisition of in
excess of 5% of any class of equity securities that is registered pursuant to
Section 12 of the Exchange Act.

(h) The Company is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U issued by the Board of Governors of the Federal Reserve System), and no
proceeds from the issuance of the Bonds or any Advance 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. Not more than 25% of the value of the
assets of the Company and its Subsidiaries is represented by margin stock.

(i) The Company is not required to register as an “investment company” under the
Investment Company Act of 1940.

 

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(j) During the twelve consecutive month period prior to the date of the
execution and delivery of this Agreement and prior to the date of the issuance
of any Letter of Credit, no steps have been taken to terminate any Plan and
there is no “accumulated funding deficiency” (as defined in Section 412 of the
Code or Section 302 of ERISA) with respect to any Plan. No condition exists or
event or transaction has occurred with respect to any Plan (including any
Multiemployer Plan) which might result in the incurrence by the Company or any
other member of the Controlled Group of any material liability (other than to
make contributions, pay annual PBGC premiums or pay out benefits in the ordinary
course of business), fine or penalty.

(k) Upon the acquisition and delivery of all or a series of Bonds pursuant to
the Pledge Agreement and the related Control Agreement, the liens granted by the
Pledge Agreement and such Control Agreement will be duly created and perfected
with the priority contemplated by the Pledge Agreement and the Control
Agreement.

(l) The information contained in each Official Statement and all written
information provided to the Banks in connection with this Agreement as of their
respective dates is correct in all material respects and does not contain an
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made in the Official Statement, in light of the
circumstances under which they were made, not misleading. The Company makes no
representation as to information in the Official Statement relating to any Bank
and provided by a Bank for inclusion in the Official Statement or summarizing
the contents of documents.

(m) Upon the issuance thereof, each of the Bonds will have been duly authorized,
authenticated and issued and delivered, and will be the legal, valid and binding
obligations of the applicable Issuer, and will not be in default.

(n) The performance of this Agreement and the transactions contemplated herein
will not affect the status as exempt from Federal income tax, of interest on the
Bonds held by any person (other than a person who is a substantial user of the
project financed with those Bonds or any person considered to be related to such
person (within the meaning of Section 103(b)(13) of the Internal Revenue Code of
1954, as amended, or Section 147(a) of the Code)).

(o) The Mortgage is, and when issued and delivered in connection with the
issuance of a series of Bonds, each First Mortgage Bond will be, the legal,
valid and binding obligations of the Company enforceable against the Company in
accordance with their respective terms except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws or equitable
principles relating to or limiting creditors’ rights generally. The issuance of
the First Mortgage Bond to the Trustee is not required to be registered under
the Securities Act of 1933, as amended. The execution, delivery and performance
by the Company of the Mortgage are, and when issued and delivered in connection
with the issuance of a series of Bonds, each First Mortgage Bond will be, within
its corporate powers, have been duly authorized by all necessary corporate
action and do not violate any provision of law or any agreement, indenture, note
or other instrument binding upon or affecting it or its restated articles of
incorporation or by-laws or give cause for acceleration of any of its Debt,
except to the extent such violation or acceleration would not, in the aggregate,
have a material adverse effect on the value of any First Mortgage Bond or the
Mortgaged Property or the enforceability of any First Mortgage Bond or the
Mortgage.

(p) All authorizations, approvals and other actions by, and notices to and
filings with, all governmental authorities and regulatory bodies required for
the due execution, delivery and performance of the Mortgage have been, and when
issued and delivered in connection with the issuance of a series of Bonds, each
First Mortgage Bond will be, obtained or made and are in full force and effect.

 

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(q) The Mortgage creates in favor of the Mortgage Trustees for the ratable
benefit of the holders of each outstanding series of mortgage bonds issued under
the Mortgage, including, when issued, the Trustee as holder of the First
Mortgage Bond for the related series of Bonds, a legally valid and enforceable
first priority security interest in the Mortgaged Property existing as of the
date of issuance of such series of Bonds and constitutes a perfected security
interest in all such Mortgaged Property, subject to (A) “permitted liens,” as
defined in the Mortgage, (B) the terms of the franchises, licenses, easements,
leases, permits, contracts and other instruments under which the Mortgaged
Property is held or operated, and (C) such other liens, prior rights and
encumbrances none of which other liens, prior rights and encumbrances, with
minor or insubstantial exceptions, affects from a legal standpoint the security
for any First Mortgage Bond or the Company’s right to use such properties in its
business. The Mortgage conforms to the requirements of the Trust Indenture Act
of 1939, as amended.

(r) The Company has good title to the Mortgaged Property, subject only to the
exceptions set forth in the Mortgage and in paragraph (q) above, none of which
materially impairs the use of the property affected thereby for the use intended
in the operation of the business of the Company and except for defects in title
or interest that would not, in the aggregate, have a material adverse effect on
the value of the Mortgaged Property.

(s) Upon issuance thereof in connection with a series of Bonds, the First
Mortgage Bond will be a bond issued pursuant to, and entitled to the benefit of,
the Mortgage and will be authenticated and delivered in accordance with the
Mortgage.

(t) Upon issuance and delivery of the First Mortgage Bond to the Trustee in
connection with the issuance of the related series of Bonds and unless the
related First Mortgage Bond has been released by the Trustee or the related
First Mortgage Bond has been paid in full (A) such First Mortgage Bond will be
outstanding (to the extent the related Bonds have not been redeemed), (B) the
Trustee will be the holder of such First Mortgage Bond for all purposes under
the Mortgage (unless such Trustee transfers such First Mortgage Bond) and
(C) such First Mortgage Bond will rank pari passu with all other bonds and
instruments issued pursuant to the Mortgage.

(u) The representations and warranties made by the Company in the Mortgage are
true and correct in all material respects after giving effect to issuance of any
Letters of Credit.

ARTICLE V

COVENANTS OF THE COMPANY

SECTION 5.01. Affirmative Covenants.

So long as a drawing is available under the Letters of Credit or any L/C Issuer
or the Banks shall have any Commitment hereunder or the Company shall have any
obligation to pay any amount payable to the Banks, the L/C Issuers or the
Administrative Agent hereunder which remains unpaid (other than contingent
expense reimbursement and contingent indemnification obligations in respect of
which no claim for payment has been made), the Company will, unless the Majority
Banks shall otherwise consent in writing:

(a) Keep Books; Existence; Maintenance of Properties; Compliance with Laws;
Insurance Taxes; Trustee; Official Statement; Remarketing; Substitute Letter of
Credit; Remarketing Agent; Redemption of Bonds; Registration of Bonds.

(i) keep proper books of record and account, all in accordance with GAAP;

 

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(ii) subject to Section 5.02(b), preserve and keep in full force and effect its
existence;

(iii) maintain and preserve all of its properties (except such properties the
failure of which to maintain or preserve would not have, individually or in the
aggregate, a Material Adverse Effect) which are used or useful in the conduct of
its business in good working order and condition, ordinary wear and tear
excepted;

(iv) comply in all material respects with the requirements of all applicable
laws, rules, regulations and orders (including those of any Governmental
Authority and including with respect to environmental matters) to the extent the
failure to so comply, individually or in the aggregate, would have a Material
Adverse Effect;

(v) maintain insurance with responsible and reputable insurance companies or
associations, or self-insure, as the case may be, in each case in such amounts
and covering such contingencies, casualties and risks as is customarily carried
by or self-insured against by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Company and its
Principal Subsidiaries operate;

(vi) at any reasonable time and from time to time, pursuant to prior notice
delivered to the Company, permit any Bank, or any agent or representative of any
thereof, to examine and, at such Bank’s expense, make copies of, and abstracts
from the records and books of account of, and visit the properties of, the
Company and any Principal Subsidiary and to discuss the affairs, finances and
accounts of the Company and any Principal Subsidiary with any of their
respective officers; provided, that any non-public information (which has been
identified as such by the Company or the applicable Principal Subsidiary)
obtained by any Bank or any of its agents or representatives pursuant to this
clause (vi) shall be treated confidentially by such Person; provided, further,
that such Person may disclose such information to (x) any other party to this
Agreement, its examiners, Affiliates, outside auditors, counsel or other
professional advisors in connection with this Agreement or (y) if otherwise
required to do so by law or regulatory process (it being understood that, unless
prevented from doing so by any applicable law or Governmental Authority, such
Person shall use reasonable efforts to notify the Company of any demand or
request for any such information promptly upon receipt thereof so that the
Company may seek a protective order or take other appropriate action);

(vii) use the proceeds of the issuance of the Bonds for the purposes set forth
in the related Indenture, but in no event for any purpose that would be contrary
to Sections 4.01(g) or 4.01(h);

(viii) pay, prior to delinquency, all of its federal income taxes and other
material taxes and governmental charges, except to the extent that (a) such
taxes or charges are being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained or (b) failure to pay such
taxes or charges would not reasonably be expected to have a Material Adverse
Effect;

(ix) maintain in place a Trustee in accordance with the provisions of each
Indenture. Without the prior written approval of the Administrative Agent (which
approval shall not be unreasonably withheld), the Company will not appoint or
permit or suffer to be appointed any successor Trustee; provided, however, that
the foregoing shall not apply to an entity that succeeds to all or substantially
all of the Trustee’s corporate trust business as a result of a merger, sale of
assets or other corporate reorganization.

 

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(x) not include, or permit to be included, any material or reference relating to
any Bank in any Official Statement or any tombstone advertisement, unless such
material or reference is approved in writing by such Bank prior to its inclusion
therein; and will not distribute, or permit to be distributed or used, any
Official Statement unless copies of such Official Statement are furnished to
such Bank;

(xi) not suffer or permit the Remarketing Agent to remarket any Bonds at a price
less than the principal amount thereof plus accrued interest, if any, thereon to
the respective dates of remarketing. Upon written notice from the Administrative
Agent that any Remarketing Agent is failing to reprice or remarket the
applicable Bonds in the manner contemplated by the Remarketing Agreement
(including in the event at any time no person is serving as Remarketing Agent
for any Bonds), the Company will take all appropriate action available to the
Company to remedy such failure;

(xii) not substitute another letter of credit for any Letter of Credit unless
prior to or simultaneously with such substitution, there shall be repaid to the
Banks in full in cash all amounts owing hereunder with respect to such Letter of
Credit and such Letter of Credit shall be cancelled;

(xiii) maintain in place a Remarketing Agent in respect of each of the Bonds in
accordance with the provisions of the applicable Indenture. Without the prior
written approval of the Majority Banks (which approval shall not be unreasonably
withheld), the Company will not appoint or permit or suffer to be appointed any
successor Remarketing Agent;

(xiv) use its reasonable best efforts to cause the Trustee, upon redemption or
defeasance of all of the Bonds pursuant to any Indenture, to surrender the
Letter of Credit issued in respect of such Bonds to the applicable L/C Issuer
for cancellation; and

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

(b) Reporting Requirements. Furnish to the Banks:

(i) as soon as possible, and in any event within five Business Days after the
Company becomes aware of the existence of any Default or Event of Default with
respect to the Company continuing on the date of such statement, after due
inquiry, a statement of an authorized officer of the Company setting forth
details of such Default or Event of Default and the action which the Company
proposes to take with respect thereto;

(ii) as soon as available and in any event within 60 days after the end of each
of the first three quarters of each fiscal year of the Company, a copy of the
Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange
Commission with respect to such quarter (or, if the Company is not required to
file a Quarterly Report on Form 10-Q, copies of an unaudited consolidated
balance sheet of the Company as of the end of such quarter and the related
consolidated statement of income of the Company for the portion of the Company’s
fiscal year ending on the last day of such quarter, in each case prepared in
accordance with GAAP, subject to the absence of footnotes and to year-end
adjustments), together with the compliance certificate referred to in
Section 5.01(b)(iv);

 

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(iii) as soon as available and in any event within 105 days after the end of
each fiscal year of the Company, a copy of the Company’s Annual Report on Form
10-K filed with the Securities and Exchange Commission with respect to such
fiscal year (or, if the Company is not required to file an Annual Report on Form
10-K, the consolidated balance sheet of the Company and its subsidiaries as of
the last day of such fiscal year and the related consolidated statements of
income, retained earnings (if applicable) and cash flows of the Company for such
fiscal year, certified by PricewaterhouseCoopers LLP or other certified public
accountants of recognized national standing), together with the compliance
certificate referred to in Section 5.01(b)(iv);

(iv) concurrently with the delivery of the quarterly and annual reports referred
to in Sections 5.01(b)(ii) and 5.01(b)(iii), a compliance certificate in
substantially the form set forth in Exhibit C, duly completed and signed by the
Chief Financial Officer, Treasurer or an Assistant Treasurer of the Company;

(v) except as otherwise provided in clause (ii) or (iii) above, promptly after
the sending or filing thereof, copies of all reports that the Company sends to
any of its security holders, and copies of all Reports on Form 10-K, 10-Q or
8-K, and registration statements (without exhibits) and prospectuses that the
Company or any Subsidiary files with the Securities and Exchange Commission or
any national securities exchange (except to the extent that any such
registration statement or prospectus relates solely to the issuance of
securities pursuant to employee purchase, benefit or dividend reinvestment plans
of the Company or a Subsidiary);

(vi) promptly upon becoming aware of the institution of any steps by the Company
or any other Person to terminate any Plan, or the failure to make a required
contribution to any Plan if such failure is sufficient to give rise to a lien
under section 302(f) of ERISA, or the taking of any action with respect to a
Plan which could result in the requirement that the Company furnish a bond or
other security to the PBGC or such Plan, or the occurrence of any event with
respect to any Plan which could result in the incurrence by the Company or any
other member of the Controlled Group of any material liability, fine or penalty,
notice thereof and a statement as to the action the Company proposes to take
with respect thereto;

(vii) promptly upon becoming aware thereof, notice of any change in the Fitch
Rating, Moody’s Rating or the S&P Rating;

(viii) a copy of any notice, certification, demand or other writing or
communication given by any Issuer to the Company or by the Company to any Issuer
under or in connection with a series of Bonds or any of the Operative Documents
with respect to such series of Bonds, in each case promptly after the receipt or
giving of the same;

(ix) promptly upon becoming aware thereof, notice of the failure by any
Remarketing Agent or Trustee to perform any of its material obligations under
the Remarketing Agreement or the Indenture and copies of any notification
delivered to or received by it with respect to a downgrade, withdrawal or
suspension of the rating assigned by either Fitch, Moody’s or S&P to the
applicable series of Bonds; and

(x) such other information respecting the business, operations or condition,
financial or otherwise, of the Company or any Subsidiary as any Bank, through
the Administrative Agent, may from time to time reasonably request (including
any information that any Bank reasonably requests in order to comply with its
obligations under any “know your customer” or anti-money laundering laws or
regulations).

 

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The Company may provide information, documents and other materials that it is
obligated to furnish to the Administrative Agent pursuant to this
Section 5.01(b) and all other notices, requests, financial statements, financial
and other reports, certificates and other information materials, but excluding
any communication that (i) relates to a request for the issuance of a Letter of
Credit or a notice of an Advance, (ii) relates to the payment of any amount due
under this Agreement prior to the scheduled date therefor or any reduction of
the Commitments, (iii) provides notice of any Default or Event of Default or
(iv) is required to be delivered to satisfy any condition precedent to the
effectiveness of this Agreement or the issuance of any Letter of Credit or the
making of any Advance hereunder (any non-excluded communication described above,
a “Communication”), electronically (including by posting such documents, or
providing a link thereto, on Exelon’s or the Company’s Internet website).
Notwithstanding the foregoing, the Company agrees that, to the extent requested
by the Administrative Agent or any Bank, it will continue to provide “hard
copies” of Communications to the Administrative Agent or such Bank, as
applicable.

The Company further agrees that the Administrative Agent may make Communications
available to the Banks by posting such Communications on Intralinks or a
substantially similar electronic transmission system (the “Platform”).

THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE ADMINISTRATIVE AGENT
DOES NOT WARRANT THE ACCURACY OR COMPLETENESS OF ANY COMMUNICATION OR THE
ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIMS LIABILITY FOR ERRORS OR
OMISSIONS IN ANY COMMUNICATION. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER
CODE DEFECTS, IS MADE BY THE ADMINISTRATIVE AGENT IN CONNECTION WITH ANY
COMMUNICATION OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT HAVE
ANY LIABILITY TO THE COMPANY, ANY BANK OR ANY OTHER PERSON FOR DAMAGES, LOSSES
OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF THE
COMPANY’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH
THE INTERNET, EXCEPT TO THE EXTENT SUCH DAMAGES ARE FOUND IN A FINAL
NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED
FROM SUCH PERSON’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITING THE
FOREGOING, UNDER NO CIRCUMSTANCES SHALL THE ADMINISTRATIVE AGENT BE LIABLE FOR
ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THE
USE OF THE PLATFORM OR THE COMPANY’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION
OF COMMUNICATIONS THROUGH THE INTERNET.

Each Bank agrees that notice to it (as provided in the next sentence) specifying
that a Communication has been posted to the Platform shall constitute effective
delivery of such Communication to such Bank for purposes of this Agreement. Each
Bank agrees (i) to notify the Administrative Agent from time to time of the
e-mail address to which the foregoing notice may be sent and (ii) that such
notice may be sent to such e-mail address.

 

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SECTION 5.02. Negative Covenants.

So long as a drawing is available under the Letters of Credit or any L/C Issuer
or the Banks shall have any Commitment hereunder or the Company shall have any
obligation to pay any amount payable to the Banks, the L/C Issuers or the
Administrative Agent hereunder which remains unpaid (other than contingent
expense reimbursement and contingent indemnification obligations in respect of
which no claim for payment has been made), the Company will not, unless the
Majority Banks shall otherwise consent in writing:

(a) Limitation on Liens. Create, incur, assume or suffer to exist, or permit any
of its Principal Subsidiaries to create, incur, assume or suffer to exist, any
Lien on its respective property, revenues or assets, whether now owned or
hereafter acquired, except:

(i) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens
and other similar Liens arising in the ordinary course of business;

(ii) Liens for taxes, assessments or governmental charges or levies on its
property if the same shall not at the time be delinquent or thereafter can be
paid without penalty, or are being contested in good faith and by appropriate
proceedings;

(iii) Liens arising out of pledges or deposits under worker’s compensation laws,
unemployment insurance, old age pensions, or other social security or retirement
benefits, or similar legislation;

(iv) Liens incidental to the normal conduct of the business of the Company or
any Subsidiary or the ownership of its property or the conduct of the ordinary
course of its business, including (A) zoning restrictions, easements, rights of
way, reservations, restrictions on the use of real property and other minor
irregularities of title, (B) rights of lessees under leases, (C) rights of
collecting banks having rights of setoff, revocation, refund or chargeback with
respect to money or instruments of the Company or any Subsidiary on deposit with
or in the possession of such banks, (D) Liens or deposits to secure the
performance of statutory obligations, tenders, bids, leases, progress payments,
performance or return-of-money bonds, performance or other similar bonds or
other obligations of a similar nature incurred in the ordinary course of
business, and (E) Liens required by any contract or statute in order to permit
the Company or a Subsidiary of the Company to perform any contract or
subcontract made by it with or pursuant to the requirements of a governmental
entity, in each case which are not incurred in connection with the borrowing or
money, the obtaining of advances or credit or the payment of the deferred
purchase price of property and which do not in the aggregate impair the use of
property in the operation of the business of the Company and its Subsidiaries
taken as a whole;

(v) Liens (A) on the capital stock of or any other equity interest in any
Subsidiary which is a Debtor, and (B) granted in connection with the financing
of generating facilities (including associated support and ancillary
facilities), limited to the facilities so financed or developed by a Debtor or
otherwise acquired by a Debtor from a Person other than the Company or its
Subsidiaries, in each case to secure Nonrecourse Indebtedness issued by such
Debtor;

(vi) Liens upon or in any property acquired in the ordinary course of business
to secure the purchase price of such property or to secure any obligation
incurred solely for the purpose of financing the acquisition of such property;

 

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(vii) Liens existing on property at the time of the acquisition thereof (other
than any such Lien created in contemplation of such acquisition unless permitted
by the preceding clause (vi));

(viii) Liens on the property, revenues and/or assets of any Person that exist at
the time such Person becomes a Subsidiary and the continuation of such Liens in
connection with any refinancing or restructuring of the obligations secured by
such Liens;

(ix) Liens granted in connection with any financing arrangement for the
financing of pollution control facilities, limited to the facilities so
purchased or financed;

(x) Liens on any improvements to property securing Indebtedness incurred to
provide funds for all or part of the cost of such improvements in a principal
amount not exceeding the cost of acquisition or construction of such
improvements and incurred within 12 months after completion of such improvements
or construction, provided, that such Liens do not extend to or cover any
property of the Company or any Subsidiary other than such improvements;

(xi) Liens arising in connection with sales or transfers of, or financing
secured by, accounts receivable or related contracts, including Liens granted by
a Receivables SPC to secure Debt arising under a Permitted Securitization;
provided, that any such sale, transfer or financing shall be on arms’ length
terms;

(xii) Permitted Encumbrances;

(xiii) Liens created under the Mortgage and “permitted liens” as defined in the
Mortgage as in effect on the date hereof;

(xiv) Liens securing the Company’s notes collateralized solely by mortgage bonds
of the Company issued under the terms of the Mortgage;

(xv) Liens arising in connection with sale and leaseback transactions, but only
to the extent that (A) except as permitted by the following clause (B), the
proceeds received from such sale are immediately applied to retire mortgage
bonds of the Company issued under the terms of the Mortgage and (B) the
aggregate purchase price of all assets sold by the Company during the term of
this Agreement pursuant to sale and leaseback transactions where such proceeds
are not applied as provided in clause (A) does not exceed $1,000,000,000;

(xvi) Liens incurred or deposits to secure the performance of surety bonds
incurred in the ordinary course of business consistent with past practice,
provided that such Liens shall cover only the Company’s or its Subsidiaries’
interests in and relating to the contract underlying the transaction for which
such surety bonds were issued;

(xvii) Liens on cash or cash equivalents created or existing to secure stay or
appeal bonds or otherwise resulting from any litigation or legal proceeding
which are being contested in good faith by appropriate action promptly initiated
and diligently conducted, including the Lien of any judgment; provided, that the
aggregate amount secured by all such Liens does not exceed $50,000,000;

(xviii) agreements for and obligations relating to the joint or common use of
property owned solely by the Company or any of its Principal Subsidiaries, or
owned by the Company or any of its Principal Subsidiaries in common or jointly
with one or more other parties;

 

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(xix) Liens securing any extension, renewal, replacement or refinancing of
Indebtedness secured by any Lien referred to in clauses (vii), (viii), (ix),
(x) or (xviii) of this Section 5.02(a); provided, that

(A) such new Lien shall be limited to all or part of the same property that
secured the original Lien (plus improvements on such property); and

(B) the amount secured by such Lien at such time is not increased to any amount
greater than the amount outstanding at the time of such renewal, replacement or
refinancing;

(xx) Liens existing on the date hereof and described in Schedule 5.02(a);

(xxi) Liens granted by a Special Purpose Subsidiary to secure Transitional
Funding Instruments of such Special Purpose Subsidiary and Liens granted by
Company to a Special Purpose Subsidiary on the Intangible Transition Property
sold to such Subsidiary as a precaution in case such sales are re-characterized
as financings of the Company;

(xxii) Liens on assets held by entities which are required to be included in the
Company’s consolidated financial statements solely as a result of the
application of Financial Accounting Standards Board Interpretation No. 46R;

(xxiii) Liens created under the Pledge Agreement, the Control Agreement and this
Agreement and other Liens on tax-exempt bonds pledged by the Company in
connection with a failed remarketing of such bonds; and

(xxiv) Liens, other than those described in clauses (i) through (xxiii) of this
Section 5.02(a), granted by the Company in the ordinary course of business
securing Debt; provided that the aggregate amount of all Debt secured by Liens
permitted by this clause (xxiv) shall not exceed in the aggregate at any one
time outstanding $50,000,000.

(b) Mergers and Consolidations; Disposition of Assets. Merge with or into or
consolidate with or into, or sell, assign, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) to any Person or
permit any Principal Subsidiary to do so, except that (i) any Principal
Subsidiary may merge with or into or consolidate with or transfer assets to any
other Principal Subsidiary, (ii) any Principal Subsidiary may merge with or into
or consolidate with or transfer assets to the Company and (iii) the Company or
any Principal Subsidiary may merge with or into or consolidate with or transfer
assets to any other Person; provided that, in each case, immediately before and
after giving effect thereto, no Default or Event of Default shall have occurred
and be continuing and (A) in the case of any such merger, consolidation or
transfer of assets to which the Company is a party, either (x) the Company shall
be the surviving entity or (y) the surviving entity shall be an Eligible
Successor and shall have assumed all of the obligations of the Company under
this Agreement and the Operative Documents to which it is a party pursuant to a
written instrument in form and substance satisfactory to the Administrative
Agent and the Administrative Agent shall have received an opinion of counsel in
form and substance satisfactory to it as to the enforceability of such
obligations assumed and (B) subject to clause (A) above, in the case of any such
merger, consolidation or transfer of assets to which any Principal Subsidiary is
a party, a Principal Subsidiary shall be the surviving entity.

(c) Interest Coverage Ratio. Permit the Interest Coverage Ratio as of the last
day of any fiscal quarter to be less than 2.00 to 1.0.

 

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(d) Continuation of Businesses. Engage, or permit any Subsidiary to engage, in
any line of business which is material to the Company and its Subsidiaries,
taken as a whole, other than businesses engaged in by the Company and its
Subsidiaries as of the date hereof and reasonable extensions thereof.

(e) Amendment of Agreements. Amend, modify, waive or terminate, or agree to
amend, modify, waive or terminate, any Operative Document or any term or
condition thereunder that would in any way adversely affect the Banks.

(f) Optional Redemption; Purchase. Permit the Issuer to (i) optionally redeem
any Bonds of a series (other than Pledged Bonds related to such series) issued
under the applicable Indenture prior to redeeming Pledged Bonds for such series
in full or (ii) purchase any Bonds in lieu of redemption.

ARTICLE VI

EVENTS OF DEFAULT

SECTION 6.01. Events of Default.

The occurrence of any of the following events shall be an “Event of Default”
hereunder:

(a) The Company shall fail to pay when due any amount paid by the Administrative
Agent, any L/C Issuer or any Bank under any Letter of Credit or any principal of
any Tender Advance or shall fail to pay, within three days of the due date
thereof, any interest or any fees payable hereunder;

(b) Any representation or warranty made by the Company herein, in any Operative
Document or in any certificate, financial or other statement furnished by the
Company (or any of its Authorized Officers) pursuant to the terms of this
Agreement or such Operative Document shall prove to have been incorrect or
misleading in any material respect when made;

(c) The Company shall fail to perform or observe (i) any term, covenant or
agreement contained in Section 5.01(a)(vii), Section 5.01(a)(x),
Section 5.01(b)(i) or Section 5.02 or (ii) any other term, covenant or agreement
on its part to be performed or observed contained in this Agreement or in any
Operative Document to which it is a party if the failure to perform or observe
such other term, covenant or agreement shall remain unremedied for 30 days after
written notice thereof shall have been given to the Company by the
Administrative Agent (which notice shall be given by the Administrative Agent at
the written request of any Bank);

(d) An “Event of Default” shall have occurred under and as defined in the Credit
Agreement; or the Company or any Principal Subsidiary shall fail to pay any
principal of or premium or interest on any Debt that is outstanding in a
principal amount in excess of $50,000,000 in the aggregate (but excluding Debt
hereunder, Nonrecourse Indebtedness, Debt of a Receivables SPC under a Permitted
Securitization, and Transitional Funding Instruments) when the same becomes due
and payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such Debt;
or any other event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect
of such event or condition is to accelerate, or to permit the acceleration of,
the maturity of such Debt; or any such Debt shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof, other than any acceleration
of any Debt secured by equipment leases or fuel leases of the Company or a
Principal Subsidiary as a result of the occurrence of any event requiring a
prepayment (whether or not characterized as such) thereunder, which prepayment
will not result in a Material Adverse Change;

 

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(e) The Company or any Principal 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 Company or any Principal
Subsidiary seeking to adjudicate it as bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts 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 by it),
either such proceeding shall remain undismissed or unstayed for a period of 60
days, or any of the actions sought in such proceeding (including 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 Company or any Principal Subsidiary shall take any action to
authorize or to consent to any of the actions set forth above in this
Section 6.01(e);

(f) One or more judgments or orders for the payment of money in an aggregate
amount exceeding $50,000,000 (excluding any such judgments or orders which are
fully covered by insurance, subject to any customary deductible, and under which
the applicable insurance carrier has acknowledged such full coverage in writing)
shall be rendered against the Company or any Principal Subsidiary and either
(i) enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect;

(g) (i) Any Reportable Event that the Majority Banks determine in good faith is
reasonably likely to result in the termination of any Plan or in the appointment
by the appropriate United States District Court of a trustee to administer a
Plan shall have occurred and be continuing 60 days after written notice to such
effect shall have been given to the Company by the Administrative Agent;
(ii) any Plan shall be terminated; (iii) a trustee shall be appointed by an
appropriate United States District Court to administer any Plan; (iv) the PBGC
shall institute proceedings to terminate any Plan or to appoint a trustee to
administer any Plan; or (v) the Company or any other member of the Controlled
Group withdraws from any Multiemployer Plan; provided that on the date of any
event described in clauses (i) through (v) above, the Company has received
notice assessing the liability of the Company with respect to the applicable
Plan and such liability exceeds $50,000,000;

(h) The outstanding capital stock of the Company shall fail to be at least 85%
owned, directly or indirectly, by Exelon (other than as a result of Exelon
distributing the capital stock of the Company to Exelon’s shareholders
generally);

(i) Any material provision of this Agreement or any Operative Document to which
the Company is a party shall at any time for any reason cease to be valid and
binding on the Company or any Indenture shall cease to be valid and binding on
the Trustee and the Issuer, or shall be declared to be null and void, or the
validity or enforceability thereof shall be contested by the Company or any
governmental authority or regulatory body or the Company shall deny that it has
any or further liability or obligation under this Agreement or any Operative
Document to which the Company is a party;

(j) the Liens created by the Control Agreements or the Pledge Agreement shall
cease to create a Lien on the collateral described therein with the priority
purported to be created thereby securing the obligations to the Administrative
Agent and the Banks; or

 

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(k) The occurrence of an “event of default” under and as defined in the
Indentures or any other Operative Document to which the Company is a party.

SECTION 6.02. Upon an Event of Default.

If any Event of Default shall have occurred and be continuing, then, and in any
such event, the Administrative Agent may, and upon written instructions from the
Majority Banks, shall, (i) by notice to the Company declare all Tender Advances
and all interest accrued thereon and all other amounts due hereunder immediately
due and payable and, upon such declaration, the same shall become and be
immediately due and payable (provided that, upon the occurrence of any Event of
Default under Section 6.01(e), all such amounts shall automatically become and
be immediately due and payable) without diligence, presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Company,
(ii) give written notice to the Trustee as contemplated in the applicable
Indenture, that an Event of Default has occurred with directions for either a
mandatory tender or acceleration of all Bonds currently outstanding, (iii) by
notice sent to the Company, require the immediate deposit of cash collateral in
an amount equal to the Maximum Credit Amount for all Letters of Credit and all
unpaid Tender Advances, and the same shall thereupon become and be immediately
due and payable by the Company; provided, however, that the Administrative Agent
shall cause such cash collateral to be deposited in a separate account which
shall not be debited to make any payment directly to a beneficiary of a Letter
of Credit pursuant to a draw by such beneficiary under such Letter of Credit,
and (iv) pursue all remedies available to it at law, by contract, at equity or
otherwise, including all remedies under the Pledge Agreement and the Control
Agreements. The Company hereby pledges, assigns and grants to the Administrative
Agent, on behalf of and for the ratable benefit of the Banks and any L/C Issuer,
a security interest in all of the Company’s right, title and interest in and to
all funds which may from time to time be on deposit in such cash collateral
account to secure the prompt and complete payment and performance of the
Company’s obligations hereunder (including, without limitation, any and all
Reimbursement Obligations and any other amounts as shall become due and payable
by the Company to the Banks or any L/C Issuer under this Agreement, the Pledge
Agreement or any Control Agreement), and the Administrative Agent may at any
time or from time to time after funds are deposited in the such cash collateral
account, apply such funds to the payment of any such obligations. All funds on
deposit in any cash collateral account shall be invested as required in any tax
exemption or arbitrage certificate and agreement among the Company, the Issuer
and the Trustee applicable to each series of Bonds (each, a “Tax Agreement”),
with respect to the investment of Gross Proceeds (as defined in the applicable
Tax Agreement).

ARTICLE VII

THE AGENTS AND THE L/C ISSUERS

SECTION 7.01. Authorization and Action.

Each Bank hereby appoints and authorizes the Administrative Agent to take such
action as Administrative Agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement (including enforcement or
collection of the Reimbursement Obligations), the Administrative Agent shall not
be required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Majority Banks, and such
instructions shall be binding upon all Banks; provided, however, that the
Administrative Agent shall not be required to take any action that exposes the
Administrative Agent to personal liability or that is

 

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contrary to this Agreement or applicable law. The Administrative Agent agrees to
give to each Bank prompt notice of each notice given to it by the Company, any
Trustee or any L/C Issuer pursuant to the terms of this Agreement.

SECTION 7.02. Administrative Agent’s Reliance, Etc.

Neither the Administrative Agent, the L/C Issuers nor any of their directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them under or in connection with this Agreement or any
Operative Document, except for its or their own gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction. Without
limiting the generality of the foregoing, each of the Administrative Agent and
the L/C Issuers: (i) may consult with legal counsel (including counsel for the
Company), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts;
(ii) makes no warranty or representations to any Bank and shall not be
responsible to any Bank for any statements, warranties or representations
(whether written or oral) made in or in connection with this Agreement or any
Operative Documents; (iii) shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or conditions of
this Agreement or any Operative Document on the part of the Company or to
inspect the property (including the books and records) of the Company;
(iv) shall not be responsible to any Bank for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any Operative Document or any other instrument or document furnished pursuant
hereto or thereto; and (v) shall incur no liability under or in respect of this
Agreement or any Operative Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopier or
telegram) believed by it to be genuine and signed or sent by the proper party or
parties. Notwithstanding any provision to the contrary contained elsewhere in
this Agreement or in any Operative Document, the Administrative Agent shall have
no duties or responsibilities, except those expressly set forth herein, nor
shall the Administrative Agent have or be deemed to have any fiduciary
relationship with any Bank and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any Operative Document or otherwise exist against the
Administrative Agent.

SECTION 7.03. Bank Independent Credit Decision.

Each Bank, including any Bank executing and delivering an assignment, confirms
and agrees hereto as follows: (i) neither the Administrative Agent or any L/C
Issuer makes any representation or warranty or assumes any 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) neither the
Administrative Agent or any L/C Issuer makes any representation or warranty or
assumes any responsibility with respect to the financial condition of the
Company or the performance or observance by the Company of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) each Bank confirms that it and its legal counsel have
received a copy of this Agreement and the Exhibits hereto, together with copies
of such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Agreement, and acknowledges
that it is satisfied with the form and substance of this Agreement and the
Exhibits hereto; (iv) each Bank will, independently and without reliance upon
the Administrative Agent, any L/C Issuer or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement, and will not rely on the Administrative Agent or any L/C Issuer
(x) to check or inquire on its behalf into the adequacy, accuracy or
completeness of any information provided by the Company under or in connection
with this Agreement or the transactions herein contemplated (whether or not such
information has been or is hereafter distributed by the Administrative Agent) or
(y) to assess or keep under review on its behalf the

 

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financial condition, creditworthiness, condition, affairs, status or nature of
the Company; (v) each Bank appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to such Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (vi) each
Bank agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Bank.

SECTION 7.04. Indemnification.

The Banks agree to indemnify the Administrative Agent and the L/C Issuers (to
the extent not reimbursed by the Company), ratably according to their respective
Shares determined at the time such indemnification is sought, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against the
Administrative Agent or any L/C Issuer in their respective capacities as such in
any way relating to or arising out of this Agreement or any action taken or
omitted by the Administrative Agent or any L/C Issuer under this Agreement or
the Operative Documents; provided, that no Bank shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent’s or the L/C Issuers’ gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction. Without
limitation of the foregoing, each Bank agrees to reimburse the Administrative
Agent and the L/C Issuers promptly upon demand for its ratable share (determined
at the time such unreimbursed expenses are sought) of any out of pocket expenses
(including reasonable counsel fees) incurred by the Administrative Agent or any
L/C Issuer in connection with the administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under this Agreement,
to the extent that the Administrative Agent or any L/C Issuer is not reimbursed
for such expenses by the Company. This provision shall survive the termination
of this Agreement.

SECTION 7.05. Barclays and Affiliates.

With respect to its Share and the Reimbursement Obligations held by it, Barclays
shall have the same rights and powers under this Agreement as any other Bank and
may exercise the same as though it were not the Administrative Agent; and the
term “Bank” or “Banks” shall, unless otherwise expressly indicated, include
Barclays in its individual capacity. Barclays and its affiliates may accept
deposits from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with, the Company, any of its Subsidiaries and
any Person who may do business with the Company or any of its Subsidiaries, all
as if Barclays were not the Administrative Agent and without any duty to account
therefor to the Banks.

SECTION 7.06. Successor Administrative Agent.

The Administrative Agent may resign at any time by giving written notice thereof
to the Banks and the Company and may be removed at any time with cause by the
Majority Banks. Upon any such resignation or removal, the Majority Banks shall
have the right to appoint a successor Administrative Agent subject to the
approval of the Company (not to be unreasonably withheld). If no successor
Administrative Agent shall have been so appointed by the Majority Banks, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent’s giving notice of resignation or the Majority Banks
removal of the retiring Administrative Agent, then the retiring Administrative
Agent after consultation with the Company may, on behalf of the Banks, appoint a
successor Administrative Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $150,000,000.00. Upon the

 

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acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring Administrative Agent’s resignation or removal hereunder as
Administrative Agent, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.

SECTION 7.07. Documentation Agents, Syndication Agent, Lead Arrangers and Book
Runners.

The titles “Documentation Agent,” “Syndication Agent”, “Lead Arranger” and “Book
Runner” are purely honorific, and no Person designated as a “Documentation
Agent,” a “Syndication Agent”, a “Lead Arranger” or a “Book Runner” shall have
any duties or responsibilities in such capacity.

ARTICLE VIII

MISCELLANEOUS

SECTION 8.01. Amendments, Etc.

No amendment or waiver of any provision of this Agreement, nor consent to any
departure by the Company therefrom, shall in any event be effective unless the
same shall be in writing and signed by the L/C Issuers, the Administrative
Agent, the Majority Banks and the Company, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Banks, do any of the following:
(a) waive any of the conditions specified in Section 3.03, (b) increase the
amount of the Commitment, extend any L/C Expiration Date then in effect or
subject any Banks to any additional obligations, (c) reduce the principal of, or
interest on, the Reimbursement Obligations or any fees or other amounts payable
hereunder (except fees payable for the account of the L/C Issuers or
Administrative Agent), (d) postpone any date fixed for any payment of principal
of, or interest on, the Reimbursement Obligations or any fees or other amounts
payable hereunder (except fees payable for the account of the L/C Issuers or
Administrative Agent), (e) change the percentage of the Reimbursement
Obligations or of the Shares or the number of Banks that shall be required for
the Banks or any of them to take any action hereunder, (f) alter the ratable
application of payments or prepayments of principal, interest or other amounts
hereunder among the Banks, (g) release any of the Pledged Bonds except upon
reimbursement for the drawings related to such Pledged Bonds or as otherwise
provided in this Agreement or the Pledge Agreement or (h) amend, waive,
supplement or otherwise modify this Section 8.01, Section 8.04(b) or
Section 8.04(c); provided, further, that no amendment, waiver or consent shall,
unless in writing and signed by the Administrative Agent or the L/C Issuers, in
addition to the Banks required above to take such action, affect the rights or
duties of the Administrative Agent or the L/C Issuers, respectively, under this
Agreement.

SECTION 8.02. Notices, Etc.

All notices and other communications provided for hereunder shall be in writing
(including telecopy notice) and mailed, sent, telecopied or delivered:

(i) if to the Company, to its street address at 440 South LaSalle Street, Suite
3300, Chicago, Illinois 60605, and, in the case of telecopy, to telecopy no.
(312) 394-2867, in each case to Attention: Chief Financial Officer, with copies
to it at the same address, Attention: General Counsel, telecopy no.
(312) 394-5433;

 

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(ii) if to the Administrative Agent or to Barclays, as a Bank, in the case of
deliveries or mailings, to its address at 200 Park Avenue, New York, New York
10166 and, in case of telecopy, to telecopy no. (212) 412-7600, in each case to
Attention: Gary B. Wenslow, Bank Debt Management, with a copy to Attention: May
Huang, Bank Debt Management, at 200 Park Avenue, New York, New York 10166, and,
in case of telecopy, to telecopy no. (212) 412-7600;

(iii) if to an L/C Issuer, to its address specified on Schedule 1.01 hereto; and

(iv) if to any other Bank, at its Domestic Lending Office specified in its
Administrative Questionnaire or to the address designated by such Bank in the
assignment agreement executed by such Bank pursuant to Section 2.14(a);

or as to each party, at such other address as shall be designated by such party
in a written notice to the other parties. All such notices and communications
shall be effective when mailed or sent, addressed as aforesaid, except that
notices to any L/C Issuer or the Administrative Agent pursuant to the provisions
of Article II shall not be effective until received by such L/C Issuer or the
Administrative Agent, as appropriate.

SECTION 8.03. No Waiver; Remedies.

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

SECTION 8.04. Right of Set-off; Sharing of Payments.

(a) In addition to any rights now or hereafter granted under applicable law and
not by way of limitation of any such rights, during the continuance of any Event
of Default, each Bank is hereby authorized at any time and from time to time,
without notice to the Company or to any other person or entity, any such notice
being hereby expressly waived, to set-off and to appropriate and apply any and
all deposits (general or special (but excluding any special deposits held by the
Company as (i) cash collateral deposits to secure the performance by contractual
counterparties in connection with power purchase agreements or (ii) cash
deposits for application to the redemption or refinancing of outstanding
securities; in any such case, as identified or referenced in the title of the
deposit account or in the documents governing the establishment of the account))
and any other indebtedness at any time held or owing by such Bank to or for the
credit or the account of the Company against and on account of the obligations
and liabilities of the Company to such Bank under this Agreement, and any Letter
of Credit, including all claims of any nature or description arising out of or
connected with this Agreement and/or the Letters of Credit, irrespective of
whether or not such Bank shall have made any demand hereunder and although such
obligations may be contingent or unmatured.

(b) Each Bank agrees promptly to notify the Company after any such set-off and
application referred to in subsection (a) above, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of the Banks under this Section are in addition to other rights and
remedies (including other rights of set-off) that the Banks may have.

 

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(c) If any Bank shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise, but excluding all
proceeds received by assignments or sales of participations in accordance with
Section 2.14) on account of the Reimbursement Obligations in excess of its
ratable share of payments on account of such Reimbursement Obligations obtained
by all the Banks, such Bank shall forthwith purchase from the other Banks a
participation in the portions of such Reimbursement Obligations owing to them as
shall be necessary to cause such purchasing Bank to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Bank, such purchases
shall be rescinded and the other Banks shall repay to the purchasing Bank the
purchase price to the extent of such recovery together in each case with an
amount equal to such Bank’s ratable share (according to the proportion of
(i) the amount of the such Bank’s required repayment to (ii) the total amount so
recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered.

(d) Notwithstanding the foregoing, if any Bank shall obtain any such excess
payment involuntarily, such Bank may, in lieu of purchasing participations from
the other Banks in accordance with subsection (c) above, on the date of receipt
of such excess payment, return such excess payment to the Administrative Agent
for distribution in accordance with Section 2.09.

SECTION 8.05. Indemnification.

The Company hereby indemnifies and holds the Administrative Agent, each L/C
Issuer, each Bank and their respective officers, directors, employees and
affiliates harmless from and against any and all claims, damages, losses,
liabilities, costs or expenses that the Administrative Agent, such L/C Issuer or
such Bank, as the case may be, may incur or which may be claimed against the
Administrative Agent, any L/C Issuer or any Bank by any person or entity
(whether or not the Administrative Agent, such L/C Issuer or such Bank, as the
case may be, is named as a party to any proceeding or is otherwise subjected to
judicial or legal process arising from such proceeding):

(a) By reason of or in connection with the initial offering and sale of the
Bonds or the subsequent remarketing and transfer from time to time of the Bonds,
provided, however, that, in the case of any action or proceeding alleging an
inaccuracy in a material respect, or an untrue statement, with respect to
information supplied by and describing the L/C Issuer in Appendix B to the
Official Statement for the Bonds or in any Supplement to Official Statement (the
“Bank Information”), or an omission to state therein a material fact necessary
to make the statements in the Bank Information, in the light of the
circumstances under which they were made, not misleading, (i) indemnification by
the Company pursuant to this Section 8.05(a) shall be limited to the costs and
expenses of the Administrative Agent, each L/C Issuer or each Bank (including
fees and expenses of such party’s counsel) of defending such allegation, (ii) if
in any such action or proceeding it is finally determined that the Bank
Information contained an inaccuracy in a material respect or an untrue statement
of a material fact or omitted to state therein a material fact necessary to make
the statements contained therein, in the light of the circumstances under which
they were made, not misleading, then the Company shall not be required to
indemnify the Administrative Agent, each L/C Issuer or each Bank pursuant to
this Section 8.05(a) for any claims, damages, losses, liabilities, costs or
expenses to the extent caused by such inaccuracy or untrue statement or
omission, and (iii) if any such action or proceeding shall be settled by the
Administrative Agent, such L/C Issuer or such Bank without there being a final
determination to the effect described in the preceding clause (ii), then the
Company shall be required to indemnify the Administrative Agent, such L/C Issuer
or such Bank pursuant to this Section 8.05(a) only if such action or proceeding
is settled with the Company’s consent; or

 

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(b) By reason of or in connection with the execution, delivery or performance of
this Agreement or any Operative Document or any transaction contemplated by this
Agreement or any Operative Document; or

(c) By reason of or in connection with the execution and delivery or transfer
of, or payment or failure to make payment under, the Letters of Credit;
provided, however, that the Company shall not be required to indemnify any L/C
Issuer pursuant to this Section 8.05(c) for any claims, damages, losses,
liabilities, costs or expenses to the extent caused by (i) such L/C Issuer’s
willful misconduct or gross negligence, as finally determined by a court of
competent jurisdiction, in determining whether documents presented under a
Letter of Credit comply with the terms of such Letter of Credit or (ii) such L/C
Issuer’s willful failure to make lawful payment under a Letter of Credit after
the presentation to it by the Trustee or a successor trustee of a draft and
certificate strictly complying with the terms and conditions of such Letter of
Credit.

Each party hereto hereby agrees, to the fullest extent permitted by applicable
law, not to assert any claim it may have against the other (including, its
officers, directors, employees, attorneys and agents), on any theory of
liability, for special, indirect, consequential or punitive damages arising out
of or relating to the actual or proposed use of the proceeds of any Letter of
Credit, any Operative Document, or any of the transactions contemplated thereby.
Nothing in this Section 8.05 is intended to limit the Company’s obligations
contained in Article II. Without prejudice to the survival of any other
obligation of the Company hereunder, the indemnities and obligations of the
Company contained in this Section 8.05 shall survive the payment in full of
amounts payable pursuant to Article II and the termination of the Letters of
Credit.

SECTION 8.06. Liability of the Banks.

Unless expressly set forth to the contrary herein, the Company assumes all risks
of the acts or omissions of each Trustee and any other beneficiary or transferee
of the Letters of Credit with respect to its use of the Letters of Credit.
Neither the L/C Issuers, the Banks nor any of their officers or directors shall
be liable or responsible for: (a) the use that may be made of the Letters of
Credit or any acts or omissions of any Trustee and any other beneficiary or
transferee in connection therewith; (b) the validity, sufficiency or genuineness
of documents, or of any endorsement thereon, even if such documents should prove
to be in any or all respects invalid, insufficient, fraudulent or forged;
(c) payment by any L/C Issuer against presentation of documents that do not
comply with the terms of a Letter of Credit, including failure of any documents
to bear any reference or adequate reference to such Letter of Credit; or (d) any
other circumstances whatsoever in making or failing to make payment, under any
Letter of Credit, except that the Company shall have a claim against an L/C
Issuer, and such L/C Issuer shall be liable to the Company, to the extent of any
direct, as opposed to consequential, damages suffered by the Company that the
Company proves were caused by (i) such L/C Issuer’s gross negligence or willful
misconduct, as finally determined by a court of competent jurisdiction, in
determining whether documents presented under a Letter of Credit comply with the
terms of such Letter of Credit or (ii) such L/C Issuer’s willful failure to make
lawful payment under a Letter of Credit after the presentation to it by the
Trustee or a successor trustee of a draft and certificate strictly complying
with the terms and conditions of a Letter of Credit. In furtherance and not in
limitation of the foregoing, the L/C Issuers may accept documents that appear on
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.

SECTION 8.07. Costs and Expenses.

The Company agrees to pay on demand all costs and expenses in connection with
the execution, delivery, filing, recording, administration and amendment of this
Agreement and any other documents

 

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that may be delivered in connection with this Agreement or the transactions
contemplated hereby, including reasonable fees and out-of-pocket expenses of
counsel for the Administrative Agent and the L/C Issuers and with respect to
advising the Administrative Agent and the L/C Issuers as to its rights and
responsibilities under this Agreement and all costs and expenses including
reasonable counsel fees and expenses of the Administrative Agent and the L/C
Issuers in connection with (i) the enforcement of this Agreement, the Operative
Documents and such other documents that may be delivered in connection herewith
or therewith (and, in the event of a Default or Event of Default, all such costs
and expenses of the other Banks) or (ii) any action or proceeding relating to a
court order, injunction, or other process or decree restraining or seeking to
restrain any L/C Issuer from paying any amount under a Letter of Credit. In
addition, the Company shall pay any and all stamp and, except as otherwise
provided in Section 2.16, other similar taxes and fees payable or determined to
be payable in connection with the execution, delivery, filing and recording of
this Agreement, the Operative Documents or the Letters of Credit or any such
other documents, and agrees to save the Administrative Agent, each Bank and each
L/C Issuer harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and fees.

SECTION 8.08. Binding Effect; Entire Agreement.

This Agreement shall become effective when it shall have been executed by the
Company, the Banks, the Administrative Agent and the L/C Issuers and thereafter
shall be binding upon and inure to the benefit of each of them and their
respective successors and assigns, except that the Company shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Banks (except as otherwise provided in
Section 5.02(b)(iii)).

SECTION 8.09. Confidentiality.

The Administrative Agent and each Bank agrees to exercise all reasonable efforts
to keep any proprietary or financial information delivered or made available by
the Company to it, confidential from anyone other than (x) the officers,
directors and employees of the Administrative Agent or any Bank who have a need
to know such information in accordance with customary banking practices and
(y) agents of, or persons retained by, the Administrative Agent or any Bank who
are or are expected to become engaged in evaluating, approving, structuring or
administering any Letter of Credit, and who, in the case of (x) and (y), receive
such information having been made aware of the restrictions set forth in this
Section; provided, that nothing herein shall prevent the Administrative Agent or
any Bank from disclosing such information (i) upon the order of any court or
administrative agency or otherwise pursuant to subpoena or similar procedure in
accordance with law, (ii) upon the request or demand of any regulatory agency or
authority having jurisdiction over the Administrative Agent or any Bank or any
self-regulatory body having or claiming authority to regulate or oversee any
aspect of the Administrative Agent’s, any L/C Issuer’s or any Bank’s business or
that of any of its Affiliates, (iii) which has been publicly disclosed, (iv) to
the extent reasonably required in connection with any litigation to which the
Administrative Agent or any Bank may be a party, (v) to the Administrative
Agent’s or any Bank’s legal counsel and independent auditors, (vi) to any actual
or proposed assignee or participant which has agreed in writing to be bound by
the provisions of this Section 8.09, (vii) any Person to (or through) whom any
Bank assigns or transfers (or may potentially assign or transfer) all or any of
its rights and obligations under this Agreement and to any Person with (or
through) whom any Bank enters into (or may potentially enter into) any
sub-participation, any hedge agreement, any securitization or other agreement in
relation to, or any transaction under which payments are to be made by reference
to, this Agreement, (viii) in connection with the exercise of any remedy
hereunder or (ix) with the prior written consent of the Company. The
Administrative Agent and each Bank shall attempt in good faith, to the extent
permitted by applicable law, (i) to notify the Company of any disclosure of such
information referred to in clause (i) of the preceding sentence and (ii) upon a
reasonable and timely request by the Company, apply (at the Company’s expense)
for an appropriate protective order to preserve the confidentiality of such
information or limit the disclosure thereof.

 

44

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SECTION 8.10. Severability.

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

SECTION 8.11. GOVERNING LAW.

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

SECTION 8.12. Waiver of Jury Trial.

Each of the Company, the Administrative Agent, the L/C Issuers and the Banks
hereby irrevocably waives all right to trial by jury in any action, proceeding
or counterclaim arising out of or relating to this Agreement, any of the
Operative Documents or the transactions contemplated hereby or thereby.

SECTION 8.13. Consent to Jurisdiction.

(a) THE COMPANY IRREVOCABLY (i) AGREES THAT ANY SUIT, ACTION OR OTHER LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE PLEDGE AGREEMENT,
ANY CONTROL AGREEMENT OR THE OPERATIVE DOCUMENTS MAY BE BROUGHT IN A COURT OF
RECORD IN THE COUNTY OF NEW YORK IN THE STATE OF NEW YORK OR IN THE COURTS OF
THE UNITED STATES OF AMERICA LOCATED IN SUCH STATE, (ii) CONSENTS TO THE
JURISDICTION OF EACH SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING AND
(iii) WAIVES ANY OBJECTION WHICH IT MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING IN ANY OF SUCH COURTS AND ANY CLAIM THAT ANY SUCH
SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE
COMPANY AGREES 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) TO THE EXTENT THAT THE ADMINISTRATIVE AGENT, ANY L/C ISSUER, ANY BANK OR THE
COMPANY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT
OF FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR
TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF
OR ITS PROPERTY, SUCH PERSON HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT
OF ITS OBLIGATIONS UNDER THIS AGREEMENT, THE LETTERS OF CREDIT AND THE OTHER
OPERATIVE DOCUMENTS.

(c) Nothing in this Section 8.13 shall affect the right of the Administrative
Agent or any Bank to bring any suit, action or proceeding against the Company or
its property in the courts of any other jurisdiction.

 

45

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SECTION 8.14. Headings.

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

SECTION 8.15. 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. One or more counterparts of this Agreement may be
delivered via telecopier with the intention that they shall have the same effect
as an original executed counterpart hereof.

SECTION 8.16. Patriot Act.

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

SECTION 8.17. No Advisory or Fiduciary Responsibility.

In connection with all aspects of the transactions contemplated hereby
(including in connection with any amendment, waiver or other modification
hereof), the Company acknowledges and agrees, and acknowledges its Affiliates’
understanding, that: (i) (A) the arranging and other services regarding this
Agreement provided by the Administrative Agent, the other agents and the lead
arrangers and the Banks are arm’s-length commercial transactions between the
Company and its Affiliates, on the one hand, and the Administrative Agent, the
other agents and the lead arrangers and the Banks on the other hand, (B) the
Company has consulted its own legal, accounting, regulatory and tax advisors to
the extent it has deemed appropriate, and (C) the Company is capable of
evaluating, and understands and accepts, the terms, risks and conditions of the
transactions contemplated hereby; (ii) (A) the Administrative Agent, the other
agents and each lead arranger and each Bank is and has been acting solely as a
principal and, except as expressly agreed in writing by the relevant parties,
has not been, is not, and will not be acting as an advisor, agent or fiduciary
for the Company or any of its Affiliates, or any other Person and (B) neither
the Administrative Agent, the other agents and any lead arranger nor any Bank
has any obligation to the Company or any of its Affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein; and (iii) the Administrative Agent, the other agents and the lead
arrangers and the Banks and their respective Affiliates may be engaged in a
broad range of transactions that involve interests that differ from those of the
Company and its Affiliates, and neither the Administrative Agent, the other
agents and any lead arranger nor any Bank has any obligation to disclose any of
such interests to the Company or its Affiliates. To the fullest extent permitted
by law, the Company hereby waives and releases any claims that it may have
against the Administrative Agent, the other agents and the lead arrangers and
the Banks with respect to any breach or alleged breach of agency or fiduciary
duty in connection with any aspect of any transaction contemplated hereby.

[Signature Pages to Follow]

 

46

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

 

COMMONWEALTH EDISON COMPANY By  

/s/ Robert K. McDonald

Name:   Robert K. McDonald Title:  
Senior Vice President, Chief Financial Officer and Treasurer

Signature Page to Letter of Credit and Reimbursement Agreement

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

BARCLAYS BANK PLC, as Administrative Agent and as a Bank By  

/s/ Gary B. Wenslow

Name:   Gary B. Wenslow Title:   Associate Director

Signature Page to Letter of Credit and Reimbursement Agreement

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

THE ROYAL BANK OF SCOTLAND PLC, as a Bank By  

/s/ Andrew N. Taylor

Name:   Andrew N. Taylor Title:   Vice President

RBS SECURITIES CORPORATION d/b/a RBS

GREENWICH CAPITAL, as Syndication Agent

By  

/s/ Rose White

Name:   Rose White Title:   Director

Signature Page to Letter of Credit and Reimbursement Agreement

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

BANK OF AMERICA, N.A., as Co-Documentation Agent and as a Bank By  

/s/ Patrick N. Martin

Name:   Patrick N. Martin Title:   Vice President

Signature Page to Letter of Credit and Reimbursement Agreement

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

THE BANK OF NOVA SCOTIA, as Co-Documentation Agent, L/C Issuer and as a Bank By
 

/s/ Thane Rattew

Name:   Thane Rattew Title:   Managing Director

Signature Page to Letter of Credit and Reimbursement Agreement

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

SUNTRUST BANK, as Co-Documentation Agent, L/C Issuer and as a Bank By  

/s/ Andrew Johnson

Name:   Andrew Johnson Title:   Director

Signature Page to Letter of Credit and Reimbursement Agreement

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

JPMORGAN CHASE BANK, N.A., as a Bank By  

/s/ Michael DeForge

Name:   Michael DeForge Title:   Executive Director

Signature Page to Letter of Credit and Reimbursement Agreement

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

SCHEDULE 1.01

SHARES AND ADDRESSES FOR NOTICES

 

Bank

  

Share

  

Operations Contact

Barclays Bank plc    16.6751895%   

Nicholas Guzzardo

Barclays Capital Services LLC

Global Services Unit

200 Cedar Knolls Road

Whippany, New Jersey 07981

Tel: (973) 576-3702

Fax: (973) 576-3014

Email: nicholas.guzzardo@barcap.com

The Royal Bank of Scotland plc    16.6649621%   

Ellen Guo

600 Steamboat Road

Greenwich, Connecticut 06830

Tel: (203) 971-7627

Fax: (212) 401-1494

Email: ellen.guo@rbs.com

Bank of America, N.A.    16.6649621%   

Jared L. McClure

901 Main Street

14th Floor

Dallas, Texas 75202

Tel: (214) 209-2354

Fax: (214) 290-9413

Email: jared.l.mcclure@bankofamerica.com

JPMorgan Chase Bank, N.A.    16.6649621%   

Kim Brown

1111 Fannin Street

10th Floor

Houston, Texas 77002

Tel: (713) 750-2880

Fax: (713) 427-6307

Email: Kimberly.texas.brown@chase.com

The Bank of Nova Scotia    16.6649621%   

Lucy Yang

720 King Street West, 2F

Toronto, Ontario, Canada M5V 2T3

Tel: (212) 225-5705

Fax: (212) 225-5709

Email: lucy_yang@scotiacapital.com

SunTrust Bank    16.6649621%   

Nicole Barry

303 Peachtree Street, 10th Floor

Atlanta, Georgia 30308

Tel: (404) 658-4777

Fax: (404) 588-4401

Email: nicole.d.barry@suntrust.com

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

SCHEDULE 5.02(a)

LIENS

None.

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

EXHIBIT A

Form of Letter of Credit

IRREVOCABLE DIRECT PAY LETTER OF CREDIT

            , 2008

**U.S.$            **

Letter of Credit No.             

[CUSIP No.                 ]

[ISIN No.                 ]

The Bank of New York Trust Company, N.A.,

as trustee

2 North LaSalle Street

Suite 1020

Chicago, Illinois 60602

Attention: Municipal Department

Ladies and Gentlemen:

At the request of Commonwealth Edison Company, a corporation duly organized,
validly existing and in good standing under the laws of the State of Illinois
(the “Company”), [L/C Issuer] (the “Bank”) hereby establishes in favor of The
Bank of New York Trust Company, N.A., as Trustee and Tender Agent (collectively,
the “Bond Trustee”) acting for the benefit of the holders of the Pollution
Control Revenue Refunding Bonds (Commonwealth Edison Company Project), Series
2008[    ] originally issued in the principal amount of $             (the
“Bonds”), pursuant to the Bond Indenture dated as of                         ,
2008 between the Illinois Finance Authority, a body politic and corporate of the
State of Illinois (the “Issuer”) and the Bond Trustee (as amended and
supplemented from time to time in accordance with the terms thereof, being
referred to herein as the “Bond Indenture”), this Irrevocable Direct Pay Letter
of Credit (this “Letter of Credit”) pursuant to a Letter of Credit and
Reimbursement Agreement dated as of May 9, 2008 (as amended, restated or
otherwise modified from time to time, the “Reimbursement Agreement”), by and
among the Company, the Bank, the other financial institutions party thereto and
Barclays Bank plc, New York Branch, as administrative agent (the “Administrative
Agent”).

The Bank hereby irrevocably authorizes the Bond Trustee to draw on the Bank from
time to time, from and after the date hereof to and including the earliest to
occur of the following (the date of the earliest of such events described below
to occur shall be the “Expiration Date”):

(i) the Bank’s close of business on                 , 2009 (the “Scheduled
Expiration Date”), or

(ii) the Bank’s close of business on either (A) the date which is five Business
Days (as hereinafter defined) following the conversion of all the Bonds to an
Indexed Rate, a Term Rate, a Commercial Paper Rate or a Fixed Rate (as each such
term is defined in the Bond Indenture) as such date is specified in a
certificate in the form of Exhibit A hereto (the “Conversion Date”), or (B) if
the Bank has honored the drawing relating to such conversion and the Letter of
Credit is earlier returned by the Bond Trustee to the Bank for cancellation in
accordance with the Bond Indenture in connection with such conversion, then the
date of such return, or

 

A-1

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(iii) the Bank’s close of business on the date which is (A) five (5) Business
Days following receipt from the Bond Trustee of a certificate in the form set
forth as Exhibit B hereto, or (B) if the Bank has honored the drawing relating
to the event described in such certificate and if the event described in such
certificate is an event in connection with which, in accordance with the Bond
Indenture, the Letter of Credit is earlier returned by the Bond Trustee to the
Bank for cancellation, then the date of such return, accompanied by receipt from
the Bond Trustee of such certificate, or

(iv) the date on which an Acceleration Drawing is honored by the Bank, or

(v) the Bank’s close of business on the date which is ten (10) days after your
receipt of written notice from us in the form set forth as Exhibit L hereto
specifying the occurrence of an Event of Default under the Reimbursement
Agreement,

a maximum aggregate amount not exceeding [            ] DOLLARS AND 00/100 (U.S.
$[            ]) (the “Original Stated Amount”; with such Original Stated
Amount, and each amount to which the same may be permanently reduced in
accordance herewith, being the “Stated Amount”) to pay principal of and accrued
interest on, or the purchase price of, the $[            ] outstanding principal
amount of Pollution Control Revenue Refunding Bonds (Commonwealth Edison Company
Project), Series 2008[__] (the “Bonds”), which Bonds were issued pursuant to the
Bond Indenture, in accordance with the terms hereof (said U.S. $[            ]
having been initially calculated to be equal to U.S. $[            ], the
principal amount of the Bonds outstanding as of the date hereof, plus U.S.
$[            ], which is fifty-three (53) days’ accrued interest on said
principal amount of the Bonds calculated at an interest rate of twelve percent
(12%) per annum calculated on the basis of actual days elapsed in a year of
three hundred sixty five (365) days).

Payments hereunder are available against the following documents (the “Payment
Documents”) presented to the Bank at [            ], Attn: [            ],
Telephone: [            ], Facsimile: [            ] (or such other office or
offices or number or numbers as we may from time to time specify to you in
writing):

(i) a certificate in the form attached as Exhibit C hereto to pay accrued
interest on the Bonds as provided for under Section 5.02 of the Bond Indenture
(an “Interest Drawing”),

(ii) a certificate in the form attached as Exhibit D hereto to pay the principal
amount of and, in the event the redemption date (or date of purchase in lieu of
redemption) does not coincide with the regularly scheduled interest payment date
for the Bonds, accrued interest on the Bonds in respect of any redemption (or
purchase in lieu of redemption as provided for in Section 4.01(D) of the Bond
Indenture) of the Bonds as provided for in Section 5.04 of the Bond Indenture (a
“Redemption Drawing”),

(iii) a certificate in the form attached as Exhibit E hereto, to pay the tender
price of Bonds for which you have received a notice from the Remarketing Agent
of a nonremarketing, or for which you have not timely received actual
remarketing proceeds on the Purchase Date or

 

A-2

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

Mandatory Purchase Date (as such terms are defined in the Bond Indenture), as
the case may be, as provided for in Section 4.12(C)(4) of the Bond Indenture (a
“Liquidity Drawing”),

(iv) a certificate in the form attached as Exhibit F hereto, to pay the
principal of and accrued interest in respect of any Bonds the payment of which
has been accelerated pursuant to Section 7.02 of the Bond Indenture (an
“Acceleration Drawing”), or

(v) a certificate in the form attached as Exhibit G hereto to pay the principal
amount of the Bonds on the date specified in such Bonds as the date on which the
principal of such Bonds is due and payable as provided for under Section 5.03 of
the Bond Indenture (a “Stated Maturity Drawing”);

each such certificate to state therein that it is given by your duly authorized
officer and dated the date such certificate is presented hereunder.

No drawings shall be made under this Letter of Credit for the purpose of making
payments on Pledged Bonds (as such term is defined in the Reimbursement
Agreement) or Bonds bearing interest at an Indexed Rate, a Term Rate, a
Commercial Paper Rate or a Fixed Rate (as each such term is defined in the Bond
Indenture).

The aforesaid certificates shall have all blanks appropriately filled in and
shall be signed by an authorized signatory of the Bond Trustee and the aforesaid
certificates shall be either in the form of a letter on the letterhead of the
Bond Trustee or a communication by telecopy delivered or transmitted to the
Bank. Any telecopy pursuant to which a drawing is made hereunder shall be
promptly confirmed to the Bank in writing (but such written confirmation shall
not be a condition to drawing hereunder).

The Bank hereby agrees with the Bond Trustee that all demands for payment made
under and in strict conformity with the terms of this Letter of Credit will be
duly honored upon delivery of transmission of the appropriate drawing
certificate or certificates as specified herein and if presented at the
aforesaid office on or before the expiration or termination date hereof. If a
demand for payment is made hereunder at or prior to 11:00 a.m. (or, in the case
of a Liquidity Drawing in respect of Bonds in a Daily Mode, 12:00 noon), New
York City time, on a business day, and provided that such demand for payment
conforms to the terms and conditions hereof, payment shall be made on the amount
specified in immediately available funds, no later than 2:00 p.m., New York City
time, on the same business day. If such demand for payment is made hereunder
after 11:00 a.m. (or, in the case of a Liquidity Drawing in respect of Bonds in
a Daily Mode, 12:00 noon), New York City time, on a business day, and provided
that such demand for payment conforms to the terms and conditions hereof,
payment shall be made of the amount specified in immediately available funds, no
later than 12:00 noon, New York City time on the next succeeding business day.
Payment under this Letter of Credit shall be made by wire transfer of
immediately available funds to the Bond Trustee, The Bank of New York, ABA
021000018, Acct. No. [            ], Further Credit: [            ], Ref: IFA
ComEd08[    ], telephone number: (312) 827-8529, telecopier number:
(312) 827-8522, Attention: Daniel Marroquin. Such account, telephone number and
telecopier number may be changed only by presentation to the Bank of a letter in
form satisfactory to the Bank specifying a different account, telephone number
or telecopier number, as the case may be, of the Bond Trustee and executed by
the Bond Trustee. If a demand for payment is not effected in conformity with
this Letter of Credit, the Bank shall notify the Bond Trustee to that effect by
telecopy, with telephone confirmation to such telephone numbers designated by
the Bond Trustee to the Bank, and the Bond Trustee may attempt to correct any
such nonconforming demand for payment to the extent that the Bond

 

A-3

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Trustee is entitled to do so. As used in this Letter of Credit, “business day”
shall mean any day which is not (i) a Saturday or Sunday, (ii) any day on which
commercial banks located in the city or cities in which the designated corporate
trust office of the Bond Trustee, the principal office of the Remarketing Agent
(as defined in the Bond Indenture) or the office of the Bank at which demands
for draws on this Letter of Credit are authorized by law to close and are closed
or (iii) any day on which The New York Stock Exchange is closed.

The “Stated Amount” of this Letter of Credit shall be automatically and
permanently reduced from time to time as of the next business day following the
date of our receipt of a certificate of the Bond Trustee in the form of Exhibit
H hereto (appropriately completed) to the amount specified in such certificate
as the amount to which the Stated Amount is to be so reduced. Also, upon receipt
by the Bank of a Certificate of the Bond Trustee in the form of Exhibit D to the
Letter of Credit in connection with a Redemption Drawing, the Bank will
automatically and permanently reduce the Stated Amount by the amount (if any)
specified in such certificate as a decline in the amount of necessary excess
interest coverage resulting from the partial redemption of Bonds effected
through such Redemption Drawing (and taking into account the non-reinstatement,
as described in the next succeeding paragraph, of that portion of any Interest
Drawing which may have been effected to pay interest on Bonds being redeemed
through such Redemption Drawing). Upon any such permanent reduction of the
Stated Amount of this Letter of Credit, the Bank may deliver to the Bond Trustee
a substitute letter of credit in exchange for this Letter of Credit or an
amendment to this Letter of Credit in the form of Exhibit I hereto
(appropriately completed) to reflect any such reduction. If the Bank delivers to
the Bond Trustee such a substitute letter of credit, the Bond Trustee shall
simultaneously surrender to the Bank for cancellation the Letter of Credit then
in its possession.

The amount available to be drawn hereunder at any particular time (the
“Available Amount” of this Letter of Credit) shall be the Stated Amount from
time to time (i) less the amount of all reductions (as provided for below)
pursuant to Interest, Redemption, Liquidity, Acceleration or Stated Maturity
Drawings occurring since the later of the date hereof and the effective date of
the last reduction in the Stated Amount, and (ii) plus the amount of all
reinstatements as below provided, likewise occurring since the later of the date
hereof and the effective date of the last reduction in the Stated Amount.

The Available Amount of this Letter of Credit will be reduced automatically by
the amount of any drawing hereunder; provided, however, that the amount of any
Interest Drawing hereunder shall be automatically reinstated effective the
opening of business on the eleventh (11th) calendar day after the date the Bank
honors such drawing, unless the Bond Trustee shall have received written notice
from the Bank (which notice may be by facsimile transmission) within ten
(10) calendar days after the date the Bank honors such drawing that an Event of
Default has occurred under the Reimbursement Agreement and directing either an
acceleration of the maturity of the Bonds or a mandatory tender of the Bonds;
and provided further, however, that the portion of any Interest Drawing (as
indicated on the related certificate in the form of Exhibit C) made to pay
interest on Bonds being concurrently redeemed through a Redemption Drawing shall
not be so reinstated. Also, to the extent the Available Amount is reduced as
contemplated in the preceding sentence due to payment by the Bank of a Liquidity
Drawing, the Available Amount will be automatically reinstated, upon receipt by
the Bank of Exhibit M, concurrently with the receipt by the Bank, or the Bond
Trustee on behalf of the Bank, of the purchase price of Bonds (or portions
thereof) previously purchased with the proceeds of a Liquidity Drawing, and
which have been remarketed pursuant to the Bond Indenture, such reinstatement to
be in an amount equal to the Original Purchase Price of such Bonds (or portions
thereof) as have been remarketed. “Original Purchase Price” shall mean the
principal amount of any Bond purchased with the proceeds of a Liquidity Drawing
plus the amount of accrued interest thereon paid upon the purchase of such Bond
with the proceeds of any such drawing.

 

A-4

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

Prior to the Expiration Date, the Bank may (but is not obligated to) extend the
Scheduled Expiration Date from time to time at the request of the Company by
delivering to the Bond Trustee an amendment to this Letter of Credit in the form
of Exhibit K hereto designating the date to which the Scheduled Expiration Date
is being extended. Each reference to the Scheduled Expiration Date herein and in
any other document shall be deemed to be references to the date designated as
the new Scheduled Expiration Date in such notice. Any date to which the
Scheduled Expiration Date has been extended as herein provided may itself be
extended in a like manner.

Upon the Expiration Date this Letter of Credit shall automatically terminate,
and the Bond Trustee agrees to promptly deliver the same to the Bank for
cancellation.

This Letter of Credit is transferable in whole only to any successor as Bond
Trustee and may not be transferred under any other circumstances. Any such
transfer (including any successive transfer) shall be effective upon receipt by
the Bank of a signed copy of the instrument effecting each such transfer signed
by the transferor and by the transferee in the form of Exhibit J hereto (which
shall be conclusive evidence of such transfer), and, in such case, the
transferee instead of the transferor shall, without the necessity of further
action, be entitled to all the benefits of and rights under this Letter of
Credit in the transferor’s place; provided that, in such case, any certificates
of the Bond Trustee to be provided hereunder shall be signed by one who states
therein that he is a duly authorized officer or agent of the transferee.

This Letter of Credit may not be transferred to any person with which U.S.
persons are prohibited from doing business under U.S. Foreign Assets Control
Regulations or other applicable U.S. laws and regulations.

Communications with respect to this Letter of Credit shall be addressed to us at
the address of the Bank above, specifically referring to the number of this
Letter of Credit (or such other address, person or department as we may from
time to time specify to you in writing).

This Letter of Credit is issued subject to the International Standby Practices
1998 (“ISP98”). This Letter of Credit shall be deemed to be issued under the
laws of the State of [New York]1[Georgia]2 and shall, as to matters not governed
by ISP98, be governed by and construed in accordance with the laws of such
State.

All payments made by the Bank hereunder shall be made from its own funds; in no
event shall such payment be made with funds obtained from the Company.

This Letter of Credit sets forth in full the terms of the Bank’s undertaking,
and such undertaking shall not in any way be modified or amended by reference to
any other document whatsoever.

 

[L/C ISSUER] By:  

 

Title:  

 

1 To be included if the Bank of Nova Scotia is L/C Issuer

2 To be included if SunTrust Bank is L/C Issuer

 

A-5

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EXHIBIT A

to

LETTER OF CREDIT

        ,     

Letter of Credit No.             

NOTICE OF CONVERSION DATE

[L/C Issuer]

 

  

 

  

 

   Attn:                         

Reference is hereby made to that certain Letter of Credit No.              dated
             200     (the “Letter of Credit”), which has been established on
behalf of Commonwealth Edison Company in favor of The Bank of New York Trust
Company, N.A., as Bond Trustee under the Bond Indenture.

The undersigned hereby certifies and confirms that the Bonds have been converted
to a/an [Indexed Rate] [Term Rate] [Commercial Paper Rate] [Fixed Rate]* on
[insert date] and, accordingly, said Letter of Credit shall terminate five
business days following such date in accordance with its terms. All defined
terms used herein which are not otherwise defined herein shall have the same
meaning as in the Letter of Credit.

 

The Bank of New York Trust Company, N.A., as Bond Trustee By:  

 

  [Title of Authorized Officer]

 

cc: Barclays Bank plc,

as Administrative Agent

200 Park Avenue

New York, New York 10166

Attention: Gary Wenslow

 

* insert appropriate statement

 

A-6

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EXHIBIT B

to

LETTER OF CREDIT

        ,     

Letter of Credit No.             

NOTICE OF TERMINATION

[L/C Issuer]

 

  

 

  

 

   Attn:                         

Reference is hereby made to that certain Letter of Credit No.              dated
            , 200     (the “Letter of Credit”), which has been established in
our favor, as trustee for the Bonds (as defined in the Letter of Credit).

The undersigned hereby certifies and confirms that [no Bonds (as defined in the
Letter of Credit) remain Outstanding within the meaning of the Bond Indenture
(as defined in said Letter of Credit)] [all drawings required to be made under
the Bond Indenture and available under the Letter of Credit have been made and
honored] [a Substitute Credit Facility (as such term is defined in the Bond
Indenture) has been delivered to the Bond Trustee to replace the Letter of
Credit in accordance with the Bond Indenture and such Substitute Credit Facility
is in effect] [the Bond Trustee is required to terminate the Letter of Credit in
accordance with the terms of the Bond Indenture]* and, accordingly, said Letter
of Credit shall be terminated in accordance with its terms.

 

The Bank of New York Trust Company, N.A., as Bond Trustee By:  

 

  [Title of Authorized Officer]

 

cc: Barclays Bank plc,

as Administrative Agent

200 Park Avenue

New York, New York 10166

Attention: Gary Wenslow

 

* insert appropriate statement

 

A-7

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EXHIBIT C

to

LETTER OF CREDIT

        ,     

Letter of Credit No.             

INTEREST DRAWING CERTIFICATE

[L/C Issuer]

 

  

 

  

 

   Attn:                         

The undersigned individual, a duly authorized officer of The Bank of New York
Trust Company, N.A. (the “Beneficiary”), hereby CERTIFIES on behalf of the
Beneficiary as follows with respect to (i) that certain Letter of Credit No.
             dated             , 200     (the “Letter of Credit”), issued by
[L/C Issuer] in favor of the Beneficiary; (ii) those certain Bonds (as defined
in the Letter of Credit); and (iii) that certain Bond Indenture (as defined in
the Letter of Credit):

1. The Beneficiary is the Bond Trustee under the Bond Indenture.

2. The Beneficiary is entitled to make this drawing in the amount of
$             under the Letter of Credit pursuant to the Bond Indenture with
respect to the payment of interest due on all Bonds outstanding on the Interest
Payment Date occurring on [insert applicable date] (the “Payment Date”) other
than Pledged Bonds (as such term is defined in the Reimbursement Agreement) or
Bonds bearing interest at an Indexed Rate, a Term Rate, a Commercial Paper Rate
or a Fixed Rate (as each such term is defined in the Bond Indenture).

3. The amount of the drawing is equal to the amount required to be drawn by the
Beneficiary pursuant to Section 5.02 of the Bond Indenture.

4. The amount of the drawing made by this Certificate was computed in compliance
with the terms of the Bond Indenture and, when added to the amount of any other
drawing under the Letter of Credit made simultaneously herewith, does not exceed
the Available Amount (as defined in the Letter of Credit) of the Letter of
Credit as presently in effect.

5. $             of the amount of the drawing made by this Certificate is to be
applied to the payment of interest due on a portion of the outstanding Bonds
being redeemed pursuant to a concurrent Redemption Drawing, the redemption date
of which coincides with the Interest Payment Date referred to in paragraph
(2) above.*

 

* To be included in Certificate only if applicable in the circumstances
described.

 

A-8

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IN WITNESS WHEREOF, this Certificate has been executed this              day of
                ,         .

 

The Bank of New York Trust Company, N.A., as Bond Trustee By:  

 

  [Title of Authorized Officer]

 

cc: Barclays Bank plc,

as Administrative Agent

200 Park Avenue

New York, New York 10166

Attention: Gary Wenslow

 

A-9

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EXHIBIT D

to

LETTER OF CREDIT

        ,     

Letter of Credit No.             

REDEMPTION DRAWING CERTIFICATE

[L/C Issuer]

 

  

 

  

 

   Attn:                         

The undersigned individual, a duly authorized officer of The Bank of New York
Trust Company, N.A. (the “Beneficiary”), hereby CERTIFIES on behalf of the
Beneficiary as follows with respect to (i) that certain Letter of Credit No.
             dated             , 200     (the “Letter of Credit”), issued by
[L/C Issuer] in favor of the Beneficiary; (ii) those certain Bonds (as defined
in the Letter of Credit); and (iii) that certain Bond Indenture (as defined in
the Letter of Credit):

1. The Beneficiary is the Bond Trustee under the Bond Indenture.

2. The Beneficiary is entitled to make this drawing in the amount of
$             under the Letter of Credit pursuant to Section 5.04 of the Bond
Indenture.

3.(a) The amount of this drawing is equal to (i) the principal amount of Bonds
other than Pledged Bonds (as such term is defined in the Reimbursement
Agreement) or Bonds bearing interest at an Indexed Rate, a Term Rate, a
Commercial Paper Rate or a Fixed Rate (as each such term is defined in the Bond
Indenture) to be redeemed (or purchased in lieu of redemption as provided for in
Section 4.01(D) of the Bond Indenture) by or on behalf of the Company pursuant
to Section 4.01 of the Bond Indenture on [insert applicable date] (the
“Redemption Date”), plus (ii) in the event such date does not coincide with a
regularly scheduled Interest Payment Date, interest accrued on such Bonds from
the immediately preceding Interest Payment Date (as defined in the Bond
Indenture) to the Redemption Date.

(b) Of the amount stated in paragraph 2 above:

(i) $             is demanded in respect of the principal amount of the Bonds
referred to in subparagraph (a) above; and

(ii) $             is demanded in respect of accrued interest on such Bonds.

4. The amount of the drawing made by this Certificate was computed in compliance
with the terms and conditions of the Bond Indenture and, when added to the
amount of any other drawing under the Letter of Credit made simultaneously
herewith, does not exceed the Available Amount of the Letter of Credit.

 

A-10

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5. The Bank is hereby instructed following the honor of this drawing, and in
accordance with the terms of the Letter of Credit, to permanently reduce the
amount otherwise available for drawing under the Letter of Credit by
$             [insert applicable amount] which amount represents the amount of
excess interest coverage under the Letter of Credit (computed in respect of the
outstanding principal amount of the Bonds at an assumed interest rate of     
percent (    %) per annum for a period of      days) no longer necessary as a
result of the redemption (or purchase in lieu of redemption) of Bonds with the
proceeds of the drawing made by this Certificate, and, if applicable, taking
into account any permanent reduction in the Available Amount occasioned by the
payment of accrued interest on such redeemed (or purchased in lieu of
redemption) Bonds through an Interest Drawing (as defined in the Letter of
Credit) and not through the drawing effected by this Certificate.

IN WITNESS WHEREOF, this Certificate has been executed this              day of
                ,         .

 

The Bank of New York Trust Company, N.A., as Bond Trustee By:  

 

  [Title of Authorized Officer]

 

cc: Barclays Bank plc,

as Administrative Agent

200 Park Avenue

New York, New York 10166

Attention: Gary Wenslow

 

A-11

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EXHIBIT E

to

LETTER OF CREDIT

        ,     

Letter of Credit No.             

LIQUIDITY DRAWING CERTIFICATE

[L/C Issuer]

 

  

 

  

 

   Attn:                         

The undersigned individual, a duly authorized officer of The Bank of New York
Trust Company, N.A. (the “Beneficiary”), hereby CERTIFIES on behalf of the
Beneficiary as follows with respect to (i) that certain Letter of Credit No.
             dated             , 200     (the “Letter of Credit”), issued by
[L/C Issuer] in favor of the Beneficiary; (ii) those certain Bonds (as defined
in the Letter of Credit); and (iii) that certain Bond Indenture (as defined in
the Letter of Credit):

1. The Beneficiary is the Bond Trustee under the Bond Indenture.

2. The Beneficiary is entitled to make this drawing under the Letter of Credit
in the amount of $             with respect to Bonds tendered pursuant to
Section [4.06][4.08][4.10]* of the Bond Indenture, [which the Beneficiary has
been informed were not remarketed][remarketing proceeds for which were not
timely received by the Bond Trustee]**on [insert applicable date] (the “Purchase
Date”).

3.(a) The amount of the drawing is equal to (i) the principal amount of Bonds,
other than Pledged Bonds (as defined in the Reimbursement Agreement) or Bonds
bearing interest at an Indexed Rate, a Commercial Paper Rate, a Term Rate or a
Fixed Rate (as each such term is defined in the Bond Indenture), for which [the
Bond Trustee has received a notice from the Remarketing Agent of a
nonremarketing][the Bond Trustee has not timely received actual remarketing
proceeds on the Purchase Date]***as provided for in Section 4.12(C)(4) of the
Bond Indenture, plus (ii) interest on such Bonds accrued from the immediately
preceding Interest Payment Date to the Purchase Date.

(b) Of the amount stated in paragraph (2) above:

(i) $             is demanded in respect of the principal portion of the
purchase price of the Bonds referred to in subparagraph (2) above; and

 

* insert appropriate section

** insert appropriate statement

*** insert appropriate statement

 

A-12

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(ii) $             is demanded in respect of payment of the interest portion of
the purchase price of such Bonds.

4. The amount of the drawing made by this Certificate was computed in compliance
with the terms and conditions of the Bond Indenture and, when added to the
amount of any other drawing under the Letter of Credit made simultaneously
herewith, does not exceed the Available Amount of the Letter of Credit as
presently in effect.

5. The Beneficiary will register or cause to be registered in the name of the
Company, but with the Administrative Agent registered as pledgee, upon payment
of the amount drawn hereunder, Bonds in the principal amount of the Bonds being
purchased with the amounts drawn hereunder and will deliver such Bonds to the
Bond Trustee; provided, however, if The Depository Trust Company or its nominee,
or a similar securities depository, is the registered owner of all Bonds, the
Beneficiary acknowledges that it will cause the security interest of the
Administrative Agent to be recorded by such depository on its books or, if the
Beneficiary is a participant with respect to such depository, on its own books.

IN WITNESS WHEREOF, this Certificate has been executed this              day of
                ,         .

 

The Bank of New York Trust Company, N.A., as Bond Trustee By:  

 

  [Title of Authorized Officer]

 

cc: Barclays Bank plc,

as Administrative Agent

200 Park Avenue

New York, New York 10166

Attention: Gary Wenslow

 

A-13

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EXHIBIT F

to

LETTER OF CREDIT

        ,     

Letter of Credit No.             

ACCELERATION DRAWING CERTIFICATE

[L/C Issuer]

 

  

 

  

 

   Attn:                         

The undersigned individual, a duly authorized officer of The Bank of New York
Trust Company, N.A. (the “Beneficiary”), hereby CERTIFIES on behalf of the
Beneficiary as follows with respect to (i) that certain Letter of Credit No.
             dated             , 200     (the “Letter of Credit”), issued by
[L/C Issuer] in favor of the Beneficiary; (ii) those certain Bonds (as defined
in the Letter of Credit); and (iii) that certain Bond Indenture (as defined in
the Letter of Credit):

1. The Beneficiary is the Bond Trustee under the Bond Indenture.

2. An Event of Default has occurred under subsection [insert subsection] of
Section 7.01 of the Bond Indenture, and the Bond Trustee has declared the
principal of and accrued interest on all Bonds then outstanding immediately due
and payable. The Beneficiary is entitled to make this drawing in the amount of
$             under the Letter of Credit pursuant to Section 7.02 of the Bond
Indenture.

3.(a) The amount of this drawing is equal to (i) the principal amount of Bonds,
other than Pledged Bonds (as such term is defined in the Reimbursement
Agreement) or Bonds bearing interest at an Indexed Rate, a Term Rate, a
Commercial Paper Rate or a Fixed Rate (as each such term is defined in the Bond
Indenture), outstanding on [insert date of acceleration] (the “Acceleration
Date”) plus (ii) interest on such Bonds accrued from the immediately preceding
Interest Payment Date to the Acceleration Date.

(b) Of the amount stated in paragraph 2 above:

(i) $             is demanded in respect of the principal of the Bonds referred
to in subparagraph (a) above; and

(ii) $             is demanded in respect of accrued interest on such Bonds.

4. The amount of the drawing made by this Certificate was computed in compliance
with the terms and conditions of the Bond Indenture and does not exceed the
Available Amount of the Letter of Credit.

 

A-14

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IN WITNESS WHEREOF, this Certificate has been executed this              day of
                ,         .

 

The Bank of New York Trust Company, N.A., as Bond Trustee By:  

 

  [Title of Authorized Officer]

 

cc: Barclays Bank plc,

as Administrative Agent

200 Park Avenue

New York, New York 10166

Attention: Gary Wenslow

 

A-15

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EXHIBIT G

to

LETTER OF CREDIT

        ,     

Letter of Credit No.             

STATED MATURITY DRAWING CERTIFICATE

[L/C Issuer]

 

  

 

  

 

   Attn:                         

The undersigned individual, a duly authorized officer of The Bank of New York
Trust Company, N.A. (the “Beneficiary”), hereby CERTIFIES on behalf of the
Beneficiary as follows with respect to (i) that certain Letter of Credit No.
             dated             , 200     (the “Letter of Credit”), issued by
[L/C Issuer] in favor of the Beneficiary; (ii) those certain Bonds (as defined
in the Letter of Credit); and (iii) that certain Bond Indenture (as defined in
the Letter of Credit):

1. The Beneficiary is the Bond Trustee under the Bond Indenture.

2. The Beneficiary is entitled to make this drawing in the amount of
$             under the Letter of Credit pursuant to Section 5.03 of the Bond
Indenture. The amount of this drawing is equal to the principal amount of Bonds
with a Maturity Date (as such term is defined in the Letter of Credit) on
[insert date], other than Pledged Bonds (as defined in the Reimbursement
Agreement) or Bonds bearing interest at an Indexed Rate, a Term Rate, a
Commercial Paper Rate or a Fixed Rate (as each such term is defined in the Bond
Indenture).

3. The amount of this drawing made by this Certificate was computed in
compliance with the terms and conditions of the Bond Indenture and, when added
to the amount of any other drawing under the Letter of Credit made
simultaneously herewith, does not exceed the Available Amount of the Letter of
Credit.

 

A-16

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IN WITNESS WHEREOF, this Certificate has been executed this              day of
                ,         .

 

The Bank of New York Trust Company, N.A., as Bond Trustee By:  

 

  [Title of Authorized Officer]

 

cc: Barclays Bank plc,

as Administrative Agent

200 Park Avenue

New York, New York 10166

Attention: Gary Wenslow

 

A-17

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EXHIBIT H

to

LETTER OF CREDIT

        ,     

Letter of Credit No.             

REDUCTION CERTIFICATE

[L/C Issuer]

 

  

 

  

 

   Attn:                         

The undersigned individual, a duly authorized officer of The Bank of New York
Trust Company, N.A. (the “Beneficiary”), hereby CERTIFIES on behalf of the
Beneficiary as follows with respect to (i) that certain Letter of Credit No.
             dated             , 200     (the “Letter of Credit”), issued by
[L/C Issuer] (the “Bank”) in favor of the Beneficiary; (ii) those certain Bonds
(as defined in the Letter of Credit); and (iii) that certain Bond Indenture (as
defined in the Letter of Credit):

1. The Beneficiary is the Bond Trustee under the Bond Indenture.

2. Upon receipt by the Bank of this Certificate, the Stated Amount (as defined
in the Letter of Credit) shall be reduced by $            , and the Stated
Amount shall thereupon equal $            , all in accordance with the
provisions of the Bond Indenture.

IN WITNESS WHEREOF, this Certificate has been executed this              day of
                ,         .

 

The Bank of New York Trust Company, N.A., as Bond Trustee By:  

 

  [Title of Authorized Officer]

 

cc: Barclays Bank plc,

as Administrative Agent

200 Park Avenue

New York, New York 10166

Attention: Gary Wenslow

 

A-18

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EXHIBIT I

to

LETTER OF CREDIT

        ,     

Letter of Credit No.             

NOTICE OF AMENDMENT

The Bank of New York Trust Company, N.A.

2 North LaSalle Street

Suite 1020

Chicago, Illinois 60602

Attention: Municipal Department

Dear Sirs:

Reference is hereby made to that certain Letter of Credit No.              dated
            , 200     (the “Letter of Credit”), established by us in your favor
as Beneficiary. We hereby notify you that, in accordance with the terms of the
Letter of Credit and that certain Letter of Credit and Reimbursement Agreement
dated as of             , 2008, by and among Commonwealth Edison Company, us,
the other financial institutions party thereto and Barclays Bank plc, New York
Branch, as administrative agent, the Stated Amount of the Letter of Credit has
been reduced to $            .

This letter should be attached to the Letter of Credit and made a part thereof.

 

[L/C ISSUER] By:  

 

  [Title of Authorized Officer]

 

cc: Barclays Bank plc,

as Administrative Agent

200 Park Avenue

New York, New York 10166

Attention: Gary Wenslow

 

A-19

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EXHIBIT J

to

LETTER OF CREDIT

        ,     

Letter of Credit No.             

TRANSFER CERTIFICATE

[L/C Issuer]

 

  

 

  

 

   Attn:                         

Dear Sirs:

Reference is made to that certain Letter of Credit No.              dated
            , 200     which has been established by the Bank in favor of The
Bank of New York Trust Company, N.A.

The undersigned [Name of Transferor] (“Transferor”) (i) has transferred (and
hereby confirms to you said transfer) all of its rights in and under said Letter
of Credit to [Name of Transferee] (“Transferee”), which shall have the sole
rights as beneficiary thereof, including sole rights relating to any amendments
whether increases or extensions or other amendments and whether now existing or
hereafter made, and (ii) confirms that [Name of Transferor] no longer has any
rights under or interest in said Letter of Credit, and that all amendments are
to be advised direct to the named Transferee without necessity of any consent of
or notice to the undersigned Transferor.

Transferor and Transferee have indicated on the face of said Letter of Credit
that it has been transferred to Transferee.

Transferee hereby certifies that it is a duly authorized Transferee under the
terms of said Letter of Credit and is accordingly entitled, upon presentation of
the documents called for therein, to receive payment thereunder.

 

 

[Name of Transferor] By:  

 

  [Name and Title of Authorized
Officer of Transferor]

 

A-20

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[Name of Transferee] By:  

 

  [Name and Title of Authorized
Officer of Transferee]

 

A-21

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EXHIBIT K

to

LETTER OF CREDIT

        ,     

Letter of Credit No.             

NOTICE OF AMENDMENT

The Bank of New York Trust Company, N.A.

2 North LaSalle Street

Suite 1020

Chicago, Illinois 60602

Attention: Municipal Department

Dear Sirs:

Reference is hereby made to that certain Letter of Credit No.              dated
            , 200     (the “Letter of Credit”), established by us in your favor
as Beneficiary. We hereby notify you that, in accordance with the terms of the
Letter of Credit and that certain Letter of Credit and Reimbursement Agreement
dated as of             , 2008, by and among Commonwealth Edison Company, us,
the other financial institutions party thereto and Barclays Bank plc, New York
Branch, as administrative agent, the Scheduled Expiration Date of the Letter of
Credit has been extended to                 ,             .

This letter should be attached to the Letter of Credit and made a part thereof.

 

[L/C ISSUER] By:  

 

  [Title of Authorized Officer]

 

cc: Barclays Bank plc,

as Administrative Agent

200 Park Avenue

New York, New York 10166

Attention: Gary Wenslow

 

A-22

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EXHIBIT L

to

LETTER OF CREDIT

        ,     

Letter of Credit No.             

EVENT OF DEFAULT NOTICE

The Bank of New York Trust Company, N.A.

2 North LaSalle Street

Suite 1020

Chicago, Illinois 60602

Attention: Municipal Department

[L/C Issuer]

 

  

 

  

 

   Attn:                         

Dear Sirs:

Reference is hereby made to that certain Letter of Credit No.              dated
            , 200     (the “Letter of Credit”; any other defined terms used
herein having their respective meanings set forth in the Letter of Credit),
established by the Bank in your favor as Beneficiary. We hereby notify you that
[an Event of Default under the terms of the Reimbursement Agreement has
occurred] [an Event of Default under the terms of the Reimbursement Agreement
has occurred and the Letter of Credit will not be reinstated]*. Accordingly, the
Letter of Credit shall terminate ten (10) days after your receipt of this
notice.

We hereby direct you [to cause pursuant to Section 4.10 of the Bond Indenture
the mandatory tender of all Bonds (other than Pledged Bonds (as such term is
defined in the Reimbursement Agreement) or Bonds bearing interest at an Indexed
Rate, a Term Rate, a Commercial Paper Rate or a Fixed Rate) currently
outstanding] [to cause pursuant to Section 7.02 of the Bond Indenture the
acceleration of all Bonds (other than Pledged Bonds or Bonds bearing interest at
an Indexed Rate, a Term Rate, a Commercial Paper Rate or a Fixed Rate) currently
outstanding]*.

 

BARCLAYS BANK PLC, NEW YORK BRANCH, as Administrative Agent By:  

 

  [Title of Authorized Officer]

 

* select one of the bracketed clauses

 

A-23

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EXHIBIT M

to

LETTER OF CREDIT

        ,     

Letter of Credit No.             

CERTIFICATE FOR REINSTATEMENT OF LIQUIDITY DRAWING

[L/C Issuer]

 

  

 

  

 

   Attn:                         

The undersigned hereby CERTIFIES to [L/C Issuer] (the “Bank”) with reference to
the Bank’s Letter of Credit No.              dated             , 200     (the
“Letter of Credit”; the terms “Bond Indenture” and “Bonds” used herein having
their respective meanings set forth in the Letter of Credit) that:

1. The undersigned is the Bond Trustee under the Bond Indenture.

2. In accordance with the provisions of the Bond Indenture, the Bond Trustee has
demanded and received payment under the Letter of Credit in the amount of
$            , which amount the Bond Trustee has used solely to pay the purchase
price of Bonds tendered or deemed tendered to the Bond Trustee for purchase in
accordance with Section [specify section] of the Bond Indenture.

3. Such Bonds, so purchased by the Bond Trustee have been successfully
remarketed and therefore the Letter of Credit must be reinstated by
$             to a new balance of $            .

IN WITNESS WHEREOF, the undersigned has executed and delivered this Certificate
this              day of                 ,         .

 

The Bank of New York Trust Company, N.A., as Bond Trustee By:  

 

  [Title of Authorized Officer]

 

cc: Barclays Bank plc,

as Administrative Agent

200 Park Avenue

New York, New York 10166

Attention: Gary Wenslow

 

A-24

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EXHIBIT B

Form of Control Agreement

[Attached.]

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EXHIBIT C

Form of Annual and Quarterly Compliance Certificate

                    , 20        

Pursuant to the Letter of Credit and Reimbursement Agreement, dated as of
[            ], 2008, among Commonwealth Edison Company (the “Company”), various
financial institutions and Barclays Bank plc, New York Branch, as Administrative
Agent (as amended, modified or supplemented from time to time, the
“Reimbursement Agreement”), the undersigned, being              of the Company,
hereby certifies on behalf of the Company as follows:

1. [Delivered] [Posted concurrently]* herewith are the financial statements
prepared pursuant to Section 5.01(b)[(ii)/(iii)] of the Reimbursement Agreement
for the fiscal              ended                 , 20    . All such financial
statements comply with the applicable requirements of the Reimbursement
Agreement.

 

* Applicable language to be used based on method of delivery.

2. Schedule I hereto sets forth in reasonable detail the information and
calculations necessary to establish the Company’s compliance with the provisions
of Section 5.02(c) of the Reimbursement Agreement as of the end of the fiscal
period referred to in paragraph 1 above.

3. A review of the activities of the Company during such fiscal period has been
made under the supervision of the undersigned with a view to determining whether
during such fiscal period the Company performed and observed all its obligations
under the Reimbursement Agreement.

4. Based on the review described in paragraph 3 above, to the best of the
knowledge of the undersigned during such fiscal period (Check one and only one:)

     No Default or Event of Default has occurred and is continuing.

     A Default or Event of Default has occurred and is continuing, and the
document(s) attached hereto as Schedule II specify in detail the nature and
period of existence of such Default or Event of Default as well as any and all
actions with respect thereto taken or contemplated to be taken by the Company.

5. Capitalized terms used in this certificate and not otherwise defined shall
have the meanings given in the Reimbursement Agreement.

 

COMMONWEALTH EDISON COMPANY By  

 

Name:  

 

Title:  

 

Date: