Exhibit 10.45

 

EXECUTION COPY

 

$850,000,000

 

CREDIT AGREEMENT

 

dated as of September 29, 2003

 

among

 

EXELON GENERATION COMPANY, LLC

 

as Borrower

 

VARIOUS FINANCIAL INSTITUTIONS

 

as Lenders

 

BANK ONE, NA

 

as Administrative Agent

 

and

 

JPMORGAN CHASE BANK

 

as Documentation Agent

 

BANC ONE CAPITAL MARKETS, INC.

 

Lead Arranger and Sole Book Runner

 

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CREDIT AGREEMENT

dated as of September 29, 2003

 

EXELON GENERATION COMPANY, LLC, the banks listed on the signature pages hereof
BANK ONE, NA, as Administrative Agent and JPMORGAN CHASE BANK, as Documentation
Agent hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS AND ACCOUNTING TERMS

 

SECTION 1.01 Certain Defined Terms. As used in this Agreement, each of the
following terms shall have the respective meanings set forth below (each such
meaning to be equally applicable to both the singular and plural forms of the
term defined):

 

“Adjusted Funds From Operations” means, for any period, Net Cash Flows From
Operating Activities for such period plus Net Interest Expense for such period
minus, to the extent applicable, the portion (but, if the Borrower or any
Subsidiary, other than any Sithe Entity, has made any loan or advance to, or
investment in, any Sithe Entity during such period, not less than zero) of Net
Cash Flows From Operating Activities attributable to any Sithe Entity.

 

“Administrative Agent” means Bank One in its capacity as administrative agent
for the Lenders pursuant to Article VII, and not in its individual capacity as a
Lender, and any successor Administrative Agent appointed pursuant to Section
7.06.

 

“Advance” means an advance by a Lender to the Borrower hereunder. An Advance may
be a Base Rate Advance or a Eurodollar Rate Advance, each of which shall be a
“Type” of Advance.

 

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

 

“Aggregate Commitment Amount” means the aggregate amount of the Commitment
Amounts.

 

“Applicable Lending Office” means, with respect to each Lender, such Lender’s
Domestic Lending Office in the case of a Base Rate Advance and such Lender’s
Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

 

“Applicable Margin” – see Schedule II.

 

“Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an Eligible Assignee, and accepted by the Administrative Agent, in
substantially the form of Exhibit C.

 

“Bank One” means Bank One, NA, a national banking association with its main
office in Chicago, Illinois.

 

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“Base Rate” means, for any period, a fluctuating interest rate per annum which
rate per annum shall at all times be equal to the higher of:

 

(a) the Prime Rate; and

 

(b) the sum of 0.5% per annum plus the Federal Funds Rate in effect from time to
time.

 

“Base Rate Advance” means an Advance that bears interest as provided in Section
2.06(a).

 

“Bond Issuance Date” means any date on which the Borrower receives the proceeds
of any issuance of debt securities in the public or private long-term capital
markets (other than a refinancing of existing tax-exempt debt).

 

“Borrower” means Exelon Generation Company, LLC.

 

“Borrowing” means a group of Advances to the Borrower of the same Type made,
continued or converted on the same day by the Lenders ratably according to their
Pro Rata Shares and, in the case of a Borrowing of Eurodollar Rate Advances,
having the same Interest Period.

 

“Business Day” means a day on which banks are not required or authorized to
close in Philadelphia, Pennsylvania, Chicago, Illinois or New York, New York,
and, if the applicable Business Day relates to any Eurodollar Rate Advances, on
which dealings are carried on in the London interbank market.

 

“Closing Date” shall mean the date on which all conditions precedent to the
initial Borrowing have been satisfied.

 

“Code” means the Internal Revenue Code of 1986, and the regulations promulgated
thereunder, in each case as amended, reformed or otherwise modified from time to
time.

 

“Commitment” means, for any Lender, such Lender’s commitment to make Advances
for the account of the Borrower hereunder.

 

“Commitment Amount” means, for any Lender at any time, the amount set forth
opposite such Lender’s name on Schedule III or, if such Lender has entered into
any Assignment and Acceptance, set forth for such Lender in the Register, as
such amount may be reduced pursuant to Section 2.04.

 

“Commitment Termination Date” means, the earlier of (i) March 31, 2004 or (ii)
the date of termination in whole of the Commitments pursuant to Section 2.04 or
6.01.

 

“Commodity Trading Obligations” mean, with respect to any Person, the
obligations of such Person under (i) any commodity swap agreement, commodity
future agreement, commodity option agreement, commodity cap agreement, commodity
floor agreement, commodity collar agreement, commodity hedge agreement,
commodity forward contract or derivative transaction

 

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and any put, call or other agreement, arrangement or transaction, including
natural gas, power and emissions forward contracts, or any combination of any
such arrangements, agreements and/or transactions, employed in the ordinary
course of such Person’s business, including any such Person’s energy marketing,
trading and asset optimization business, or (ii) any commodity swap agreement,
commodity future agreement, commodity option agreement, commodity hedge
agreement, and any put, call or other agreement or arrangement, or combination
thereof (including an agreement or arrangement to hedge foreign exchange risks)
in respect of commodities entered into by such Person pursuant to asset
optimization and risk management policies and procedures adopted in good faith
by the Board of Directors of such Person. The term “commodities” shall include
natural gas, electric power, emissions contracts and related products and
ancillary services.

 

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

 

“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,
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.

 

“Domestic Lending Office” means, with respect to any Lender, the office of such
Lender specified as its “Domestic Lending Office” opposite its name on Schedule
I hereto or in the Assignment and Acceptance pursuant to which it became a
Lender, or such other office of such Lender as such Lender may from time to time
specify to the Borrower and the Administrative Agent.

 

“Eligible Assignee” means (i) a commercial bank organized under the laws of the
United States, or any State thereof; (ii) a commercial bank organized under the
laws of any other country that is a member of the OECD or has concluded special
lending arrangements with the International Monetary Fund associated with its
General Arrangements to Borrow, or a political subdivision of any such country,
provided that such bank is acting through a branch or agency located in the
United States; (iii) a finance company, insurance company or other financial
institution or fund (whether a corporation, partnership or other entity) engaged
generally in making, purchasing or otherwise investing in commercial loans in
the ordinary course of its business; or (iv) the central bank of any country
that is a member of the OECD; provided that, unless otherwise agreed by the
Borrower and the Administrative Agent in their sole discretion, (A) any Person
described in clause (i), (ii) or (iii) above shall also (x) have outstanding
unsecured long-term debt that is rated BBB- or better by S&P and Baa3 or better
by Moody’s (or an equivalent rating by another nationally recognized credit
rating agency of similar standing if

 

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either such corporation is no longer in the business of rating unsecured
indebtedness of entities engaged in such businesses) and (y) have combined
capital and surplus (as established in its most recent report of condition to
its primary regulator) of not less than $100,000,000 (or its equivalent in
foreign currency), and (B) any Person described in clause (ii), (iii) or (iv)
above shall, on the date on which it is to become a Lender hereunder, be
entitled to receive payments hereunder without deduction or withholding of any
United States Federal income taxes (as contemplated by Section 2.14(e)).

 

“Eligible Successor” means a Person which (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 Borrower and its Subsidiaries
(or, if applicable, Exelon and its Subsidiaries), (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) is acceptable to the Majority Lenders 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 rulings issued
thereunder, each as amended and modified from time to time.

 

“Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D
of the FRB, as in effect from time to time.

 

“Eurodollar Lending Office” means, with respect to any Lender, the office of
such Lender specified as its “Eurodollar Lending Office” opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Administrative Agent.

 

“Eurodollar Rate” means, for each Interest Period for each Eurodollar Rate
Advance made as part of a Borrowing, the applicable London interbank offered
rate for deposits in U.S. Dollars appearing on Reuters Screen FRBD as of 11:00
a.m. (London time) two business days prior to the first day of the applicable
Interest Period, and having a maturity equal to such Interest Period.

 

“Eurodollar Rate Advance” means any Advance that bears interest as provided in
Section 2.06(b).

 

“Eurodollar Rate Reserve Percentage” of any Lender for any Interest Period means
the reserve percentage applicable during such Interest Period (or if more than
one such percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) under regulations issued from time to time by
the FRB for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) for such Lender
with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities having a term equal to such Interest Period.

 

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“Event of Default” - see Section 6.01.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended and
modified from time to time.

 

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

 

“Existing Agreement” means the Credit Agreement, dated as of June 13, 2003,
among the Borrower, various financial institutions and Bank One as
administrative agent.

 

“Facility Fee Rate” - see Schedule II.

 

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

 

“Final Termination Date” means the earlier of (i) the date on or after the
Commitment Termination Date on which all of the Borrower’s obligations hereunder
have been paid in full and (ii) the date on which all of the Borrower’s
obligations hereunder have become due and payable (pursuant to Section 6.01 or
otherwise).

 

“FRB” means the Board of Governors of the Federal Reserve System or any
successor thereto.

 

“GAAP” - see Section 1.03.

 

“Granting Bank” - see Section 8.07(h).

 

“Hedging Obligations” mean, with respect to any Person, the obligations of such
Person under any interest rate or currency swap agreement, interest rate or
currency future agreement, interest rate collar agreement, interest rate or
currency hedge agreement, and any put, call or other agreement or arrangement
designed to protect such Person against fluctuations in interest rates or
currency exchange rates.

 

“Interest Coverage Ratio” means, for any period of four consecutive fiscal
quarters, 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 Borrower for such period prepared in
accordance with GAAP.

 

“Interest Period” means, for a Eurodollar Rate Advance, the period commencing on
the date such Eurodollar Rate Advance is made or is converted from a Base Rate
Advance and

 

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ending on the last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on the last
day of the immediately preceding Interest Period and ending on the last day of
the period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be 1, 2, 3 or 6 months, as the
Borrower may select in accordance with Section 2.02 or 2.09; provided that:

 

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

 

(ii) Interest Periods commencing on the same date for Advances made as part of
the same Borrowing shall be of the same duration;

 

(iii) whenever the last day of any Interest Period would otherwise occur on a
day other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, unless such extension
would cause the last day of such Interest Period to occur in the next following
calendar month, in which case the last day of such Interest Period shall occur
on the next preceding Business Day; and

 

(iv) if there is no day in the appropriate calendar month at the end of such
Interest Period numerically corresponding to the first day of such Interest
Period, then such Interest Period shall end on the last Business Day of such
appropriate calendar month.

 

“Lead Arranger” means Banc One Capital Markets in its capacity as Lead Arranger
and Sole Book Runner.

 

“Lenders” means each of the financial institutions listed on the signature pages
hereof and each Eligible Assignee that shall become a party hereto pursuant to
Section 8.07.

 

“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).

 

“Majority Lenders” means Lenders having Pro Rata Shares of more than 50%
(provided that, for purposes of this definition, the Borrower or any Affiliate
of the Borrower, if a Lender, shall not be included in calculating the amount of
any Lender’s Pro Rata Share or the amount of the Aggregate Commitment Amount or
Outstanding Advances, as applicable, required to constitute more than 50% of the
Pro Rata Shares).

 

“Material Adverse Change” and “Material Adverse Effect” each means, relative to
any occurrence, fact or circumstance 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 Borrower and
its consolidated Subsidiaries (other than the Sithe Entities), taken as a whole
(except that changes or effects relating to the Borrower’s investment in any
Sithe Entity shall not be considered in determining whether a Material Adverse
Change or Material Adverse Effect has

 

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occurred), or (ii) any materially adverse effect on the validity or
enforceability against the Borrower of this Agreement or any Note.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Moody’s Rating” means, at any time, the rating issued by Moody’s and then in
effect with respect to the Borrower’s senior unsecured long-term public debt
securities without third-party credit enhancement (it being understood that if
the Borrower 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”).

 

“Multiemployer Plan” means a Plan maintained pursuant to a collective bargaining
agreement or any other arrangement to which any 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 Borrower 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) the Interest
Expense for such period minus (b) interest on Sithe Project Debt for such
period.

 

“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 Borrower 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.

 

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“Note” means a promissory note of the Borrower payable to the order of a Lender,
in substantially the form of Exhibit A.

 

“Notice of Borrowing” - see Section 2.02(a).

 

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

 

“Outstanding Advances” means the sum of the aggregate principal amount of all
outstanding Advances to the Borrower.

 

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

 

“Permitted Obligations” mean, with respect to any Person, (1) Hedging
Obligations arising in the ordinary course of business and in accordance with
such Person’s established risk management policies that are designed to protect
such Person against, among other things, fluctuations in interest rates or
currency exchange rates and which in the case of agreements relating to interest
rates shall have a notional amount no greater than the payments due with respect
to the Obligations being hedged thereby and (2) Commodity Trading Obligations.

 

“Person” means an individual, partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association, joint venture,
limited liability company 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 any member of the Controlled Group may have any liability.

 

“Prime Rate” means a rate per annum equal to the prime rate of interest
announced by Bank One or by its parent, BANK ONE CORPORATION (which is not
necessarily the lowest rate charged to any customer), changing when and as said
prime rate changes.

 

“Principal Subsidiary” means each Subsidiary the assets of which exceeded
$150,000,000 in book value at any time during the preceding 24-month period.

 

“Pro Rata Share” means, with respect to a Lender, a portion equal to a fraction
the numerator of which is such Lender’s Commitment Amount (or, after the
Commitments have terminated, the principal amount of such Lender’s outstanding
Advances) and the denominator of which is the Aggregate Commitment Amount (or,
after the Commitments have terminated, the Outstanding Advances).

 

“Register” - see Section 8.07(c).

 

“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,
however, 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

 

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Reportable Event regardless of the issuance of any such waiver 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.

 

“S&P Rating” means, at any time, the rating issued by S&P and then in effect
with respect to the Borrower’s senior unsecured long-term public debt securities
without third-party credit enhancement (it being understood that if the Borrower
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”).

 

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

 

“Sithe Energies” means Sithe Energies, Inc., provided that Sithe Energies shall
not be a Subsidiary until such time as it meets the requirements of that
definition.

 

“Sithe Entity” means each of the Sithe Energies and Sithe Holdings and each of
their respective Subsidiaries.

 

“Sithe Holdings” means Exelon New England Holdings LLC (formerly known as Sithe
New England Holdings LLC).

 

“Sithe Project Debt” means Debt of any Sithe Entity for which neither the
Borrower nor any Subsidiary (other than another Sithe Entity) has any liability,
contingent or otherwise.

 

“SPC” - see Section 8.07(h).

 

“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).
References herein to “Subsidiaries” are to Subsidiaries of the Borrower unless
otherwise specified.

 

“Taxes” - see Section 2.14.

 

“Type” - see the definition of Advance.

 

“Unfunded Liabilities” means, (i) in the case of any Single Employer Plan, the
amount (if any) by which the present value of all vested nonforfeitable benefits
under such Plan exceeds the fair market value of all Plan assets allocable to
such benefits, all determined as of the then most recent evaluation date for
such Plan, and (ii) in the case of any Multiemployer Plan, the withdrawal
liability that would be incurred by the Controlled Group if all members of the
Controlled Group completely withdrew from such Multiemployer Plan.

 

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“Unmatured Event of Default” means any event which (if it continues uncured)
will, with lapse of time or notice or both, became an Event of Default.

 

“Utilization Fee Rate” - see Schedule II.

 

SECTION 1.02 Other Interpretive Provisions. In this Agreement, (a) in the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including” and the words “to” and “until” each
means “to but excluding”; (b) unless otherwise indicated, any reference to an
Article, Section, Exhibit or Schedule means an Article or Section hereof or an
Exhibit or Schedule hereto; and (c) the term “including” means “including
without limitation”.

 

SECTION 1.03 Accounting Principles. (a) As used in this Agreement, “GAAP” shall
mean generally accepted accounting principles in the United States, applied on a
basis consistent with the principles used in preparing the Borrower’s audited
consolidated financial statements as of December 31, 2002 and for the fiscal
year then ended. 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 Borrower 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 Borrower or the Majority
Lenders shall so request, the Administrative Agent, the Lenders and the Borrower
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 Lenders); provided that, until so amended, such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein.

 

ARTICLE II

 

AMOUNTS AND TERMS OF THE COMMITMENTS

 

SECTION 2.01 Commitments. Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make Advances to the Borrower from time to
time during the period from the date hereof to the Commitment Termination Date,
in an aggregate amount not to exceed such Lender’s Commitment Amount as in
effect from time to time; provided that the aggregate principal amount of all
Advances by such Lender shall not exceed such Lender’s Pro Rata Share of the
Outstanding Advances. Within the foregoing limits, the Borrower may from time to
time borrow, prepay pursuant to Section 2.10 and reborrow hereunder prior to the
Commitment Termination Date.

 

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SECTION 2.02 Procedures for Advances; Limitations on Borrowings.

 

(a) The Borrower may request Advances hereunder by giving notice (a “Notice of
Borrowing”) to the Administrative Agent (which shall promptly advise each Lender
of its receipt thereof) not later than 10:00 A.M. (Chicago time) on the third
Business Day prior to the date of any proposed borrowing of Eurodollar Rate
Advances and on the date of any proposed borrowing of Base Rate Advances. Each
Notice of Borrowing shall be sent by telecopier, confirmed immediately in
writing, and shall be in substantially the form of Exhibit B, specifying therein
the requested (i) date of borrowing (which shall be a Business Day), (ii) Type
of Advances to be borrowed, (iii) aggregate amount of such Advances, and (iv) in
the case of a borrowing of Eurodollar Rate Advances, initial Interest Period
therefor. Each Lender shall, before 12:00 noon (Chicago time) on the date of
such borrowing, make available for the account of its Applicable Lending Office
to the Administrative Agent at its address referred to in Section 8.02, in same
day funds, such Lender’s ratable portion of the requested borrowing. After the
Administrative Agent’s receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Borrower at the Administrative Agent’s
aforesaid address.

 

(b) Each Notice of Borrowing shall be irrevocable and binding on the Borrower.
If a Notice of Borrowing requests Eurodollar Rate Advances, the Borrower shall
indemnify each Lender against any loss, cost or expense incurred by such Lender
as a result of any failure to fulfill on or before the requested borrowing date
the applicable conditions set forth in Article III, including any loss, cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund the requested Advance to be made by
such Lender.

 

(c) Unless the Administrative Agent shall have received notice from a Lender
prior to the date of any requested borrowing that such Lender will not make
available to the Administrative Agent such Lender’s ratable portion of such
borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the requested borrowing date in
accordance with Section 2.02(a) and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at the time to Advances made in
connection with such borrowing and (ii) in the case of such Lender, the Federal
Funds Rate. If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Lender’s
Advance as part of such Borrowing for purposes of this Agreement.

 

(d) The failure of any Lender to make the Advance to be made by it on any
borrowing date shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on such date, but no Lender shall be responsible
for the failure of any other Lender to make any Advance to be made by such other
Lender.

 

(e) Each Borrowing of Base Rate Advances shall at all times be in an aggregate
amount not less than $5,000,000; and each Borrowing of Eurodollar Rate Advances
shall at all

 

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times be in an aggregate amount not less than $10,000,000. Notwithstanding
anything to the contrary contained herein, the Borrower may not have more than
six Borrowings of Eurodollar Rate Advances outstanding at any time.

 

SECTION 2.03 Facility and Utilization Fees. (a) The Borrower agrees to pay to
the Administrative Agent, for the account of the Lenders according to their
respective Pro Rata Shares, a facility fee for the period from the date of this
Agreement to the Commitment Termination Date (or, if later, the date on which
all Advances have been paid in full) in an amount equal to the Facility Fee Rate
multiplied by the Aggregate Commitment Amount (or, after the Commitment
Termination Date, the Outstanding Advances), payable on the last day of each
calendar quarter and on the Final Termination Date (and, if applicable,
thereafter on demand).

 

(b) The Borrower agrees to pay to the Administrative Agent, for the account of
the Lenders according to their respective Pro Rata Shares, a utilization fee for
each day on which the Outstanding Advances exceed 33-1/3% of the Aggregate
Commitment Amount in an amount equal to the Utilization Fee Rate multiplied by
the Outstanding Advances on such day, payable on the last day of each calendar
quarter and on the Final Termination Date.

 

SECTION 2.04 Reduction of Commitment Amounts. (a) The Borrower shall have the
right, upon at least two Business Days’ notice to the Administrative Agent, to
reduce the Aggregate Commitment Amount to an amount that is not less than the
Outstanding Advances; provided that each partial reduction of the Aggregate
Commitment Amount shall be in the amount of $10,000,000 or an integral multiple
thereof. Once reduced pursuant to this Section 2.04, the Aggregate Commitment
Amount may not be increased.

 

(b) The Aggregate Commitment Amount shall be reduced on each Bond Issuance Date
by the principal amount of all debt securities issued by the Borrower on such
date (rounded down, if necessary, to an integral multiple of $10,000,000).

 

(c) The Aggregate Commitment Amount shall be reduced to $550,000,000 (i) on
October 20, 2003 if the Borrower does not exercise its right of first refusal to
purchase British Energy’s 50% ownership interest in AmerGen Energy Company, LLC
prior to the close of business on such date or (ii) on any date after the
October 20, 2003 if the Borrower announces that, notwithstanding the exercise of
such right of first refusal, it will not purchase such 50% ownership interest in
AmerGen Energy Company, LLC.

 

SECTION 2.05 Repayment of Advances. The Borrower shall repay the principal
amount of the Outstanding Advances on the Commitment Termination Date.

 

SECTION 2.06 Interest on Advances. Subject to Section 2.13(f), the Borrower
shall pay interest on the unpaid principal amount of each Advance from the date
of such Advance until such principal amount shall be paid in full, at the
following rates per annum:

 

(a) At all times such Advance is a Base Rate Advance, a rate per annum equal to
the Base Rate in effect from time to time, payable quarterly on the last day of
each calendar quarter and on the date such Base Rate Advance is converted to a
Eurodollar Rate Advance or paid in full.

 

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(b) Subject to Section 2.07, at all times such Advance is a Eurodollar Rate
Advance, a rate per annum equal to the sum of the Eurodollar Rate for each
applicable Interest Period plus the Applicable Margin in effect from time to
time, payable on the last day of each Interest Period for such Eurodollar Rate
Advance (and, if any Interest Period for such Advance is six months, on the day
that is three months after the first day of such Interest Period) or, if
earlier, on the date such Eurodollar Rate Advance is converted to a Base Rate
Advance or paid in full.

 

SECTION 2.07 Additional Interest on Eurodollar Advances. The Borrower shall pay
to each Lender, for any period during which such Lender is required under
regulations of the FRB to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities, additional interest
on the unpaid principal amount of each Eurodollar Rate Advance of such Lender,
from the date of such Advance until such Advance is paid in full or converted to
a Base Rate Advance, at an interest rate per annum equal to the remainder
obtained by subtracting (i) the Eurodollar Rate for each Interest Period for
such Advance from (ii) the rate obtained by dividing such Eurodollar Rate by a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such
Lender for such Interest Period, payable on each date on which interest is
payable on such Advance; provided that no Lender shall be entitled to demand
such additional interest more than 90 days following the last day of the
Interest Period in respect of which such demand is made; provided, further, that
the foregoing proviso shall in no way limit the right of any Lender to demand or
receive such additional interest to the extent that such additional interest
relates to the retroactive application of the reserve requirements described
above if such demand is made within 90 days after the implementation of such
retroactive reserve requirements. Such additional interest shall be determined
by the applicable Lender and notified to the Borrower through the Administrative
Agent, and such determination shall be conclusive and binding for all purposes,
absent manifest error.

 

SECTION 2.08 Interest Rate Determination. (a) The Administrative Agent shall
give prompt notice to the Borrower and the Lenders of each applicable interest
rate determined by the Administrative Agent for purposes of Section 2.06(a) or
(b).

 

(b) If, with respect to any Eurodollar Rate Advances, the Majority Lenders
notify the Administrative Agent that the Eurodollar Rate for any Interest Period
for such Advances will not adequately reflect the cost to such Majority Lenders
of making, funding or maintaining their respective Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the Lenders, whereupon

 

(i) each Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor (unless prepaid or converted to a Base Rate
Advance on or prior to such day), convert into a Base Rate Advance, and

 

(ii) the obligation of the Lenders to make, continue or convert into Eurodollar
Rate Advances shall be suspended until the Administrative Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no
longer exist.

 

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SECTION 2.09 Continuation and Conversion of Advances. (a) The Borrower may on
any Business Day, upon notice given to the Administrative Agent not later than
10:00 A.M. (Chicago time) on the third Business Day prior to the date of any
proposed continuation of or conversion into Eurodollar Rate Advances, and on the
date of any proposed conversion into Base Rate Advances, and subject to the
provisions of Sections 2.08 and 2.12, continue Eurodollar Rate Advances for a
new Interest Period or convert a Borrowing of Advances of one Type into Advances
of the other Type; provided that any continuation of Eurodollar Rate Advances or
conversion of Eurodollar Rate Advances into Base Rate Advances shall be made on,
and only on, the last day of an Interest Period for such Eurodollar Rate
Advances, unless, in the case of such a conversion, the Borrower shall also
reimburse the Lenders pursuant to Section 8.04(b) on the date of such
conversion. Each such notice of a continuation or conversion shall, within the
restrictions specified above, specify (i) the date of such continuation or
conversion, (ii) the Advances to be continued or converted, and (iii) in the
case of continuation of or conversion into Eurodollar Rate Advances, the
duration of the initial Interest Period for such Advances.

 

(b) If the Borrower shall fail to select the Type of any Advance or the duration
of any Interest Period for any Borrowing of Eurodollar Rate Advances in
accordance with the provisions contained in the definition of “Interest Period”
in Section 1.01 and Section 2.09(a), the Administrative Agent will forthwith so
notify the Borrower and the Lenders and such Advances will automatically, on the
last day of the then existing Interest Period therefor, convert into Base Rate
Advances.

 

SECTION 2.10 Prepayments. (a) The Borrower may, upon notice to the
Administrative Agent at least three Business Days prior to any prepayment of
Eurodollar Rate Advances, or one Business Day’s notice prior to any prepayment
of Base Rate Advances, in each case stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the Borrower
shall, prepay the outstanding principal amounts of the Advances made as part of
the same Borrowing in whole or ratably in part, together with accrued interest
to the date of such prepayment on the principal amount prepaid; provided that
(i) each partial prepayment shall be in an aggregate principal amount not less
than $10,000,000 or a higher integral multiple of $1,000,000 in the case of any
prepayment of Eurodollar Rate Advances and $5,000,000 or a higher integral
multiple of $1,000,000 in the case of any prepayment of Base Rate Advances, and
(ii) in the case of any such prepayment of a Eurodollar Rate Advance, the
Borrower shall be obligated to reimburse the Lenders pursuant to Section 8.04(b)
on the date of such prepayment.

 

(b) If, after giving effect to any reduction of the Aggregate Commitment Amount
pursuant to Section 2.04(b) or (c), the Outstanding Advances exceed the
Aggregate Commitment Amount, the Borrower shall immediately prepay Advances in
an amount equal to such excess.

 

SECTION 2.11 Increased Costs. (a) If on or after the date of this Agreement, any
Lender determines that (i) the introduction of or any change (other than, in the
case of Eurodollar Rate Advances, any change by way of imposition or increase of
reserve requirements included in the Eurodollar Rate Reserve Percentage) in or
in the interpretation of any law or regulation or (ii) compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law) shall increase the cost to such Lender
of agreeing to make or making, funding or maintaining Eurodollar Rate Advances,
then the Borrower shall from time to time, upon demand by such Lender (with a
copy of such demand to the

 

14

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Administrative Agent), pay to the Administrative Agent for the account of such
Lender additional amounts (without duplication of any amount payable pursuant to
Section 2.14) sufficient to compensate such Lender for such increased cost;
provided that no Lender shall be entitled to demand such compensation more than
90 days following the last day of the Interest Period in respect of which such
demand is made; provided, further, that the foregoing proviso shall in no way
limit the right of any Lender to demand or receive such compensation to the
extent that such compensation relates to the retroactive application of any law,
regulation, guideline or request described in clause (i) or (ii) above if such
demand is made within 90 days after the implementation of such retroactive law,
interpretation, guideline or request. A certificate as to the amount of such
increased cost, submitted to the Borrower and the Administrative Agent by a
Lender, shall be conclusive and binding for all purposes, absent manifest error.

 

(b) If any Lender determines that, after the date of this Agreement, compliance
with any law or regulation or any guideline or request from any central bank or
other governmental authority (whether or not having the force of law) regarding
capital adequacy requirements affects or would affect the amount of capital
required or expected to be maintained by such Lender or any Person controlling
such Lender (including, in any event, any determination after the date of this
Agreement by any such governmental authority or central bank that, for purposes
of capital adequacy requirements, any Lender’s Commitment to the Borrower does
not constitute a commitment with an original maturity of less than one year) and
that the amount of such capital is increased by or based upon the existence of
such Lender’s Commitment or the Advances made by such Lender, then upon demand
by such Lender (with a copy of such demand to the Administrative Agent), the
Borrower shall immediately pay to the Administrative Agent for the account of
such Lender from time to time as specified by such Lender additional amounts
sufficient to compensate such Lender or such controlling Person, as applicable,
in the light of such circumstances, to the extent that such Lender determines
such increase in capital to be allocable to the existence of such Lender’s
Commitment or the Advances made by such Lender; provided that no Lender shall be
entitled to demand such compensation more than one year following the payment to
or for the account of such Lender of all other amounts payable hereunder by the
Borrower and under any Note of the Borrower held by such Lender and the
termination of such Lender’s Commitment to the Borrower; provided, further, that
the foregoing proviso shall in no way limit the right of any Lender to demand or
receive such compensation to the extent that such compensation relates to the
retroactive application of any law, regulation, guideline or request described
above if such demand is made within one year after the implementation of such
retroactive law, interpretation, guideline or request. A certificate as to such
amounts submitted to the Borrower and the Administrative Agent by the applicable
Lender shall be conclusive and binding, for all purposes, absent manifest error.

 

(c) Any Lender claiming compensation pursuant to this Section 2.11 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 compensation that may thereafter accrue and would not, in the reasonable
judgment of such Lender, be otherwise disadvantageous to such Lender.

 

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SECTION 2.12 Illegality. Notwithstanding any other provision of this Agreement,
if any Lender shall notify the Administrative Agent that the introduction of or
any change in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that it is
unlawful, for such Lender or its Eurodollar Lending Office to perform its
obligations hereunder to make Eurodollar Rate Advances or to fund or maintain
Eurodollar Rate Advances hereunder, (i) the obligation of such Lender to make,
continue or convert Advances into Eurodollar Rate Advances shall be suspended
(subject to the following paragraph of this Section 2.12) until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist and (ii) all Eurodollar
Rate Advances of such Lender then outstanding shall, on the last day of the then
applicable Interest Period (or such earlier date as such Lender shall designate
upon not less than five Business Days’ prior written notice to the
Administrative Agent), be automatically converted into Base Rate Advances.

 

If the obligation of any Lender to make, continue or convert into Eurodollar
Rate Advances has been suspended pursuant to the preceding paragraph, then,
unless and until the Administrative Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exist, (i) all
Advances that would otherwise be made by such Lender as Eurodollar Rate Advances
shall instead be made as Base Rate Advances and (ii) to the extent that
Eurodollar Rate Advances of such Lender have been converted into Base Rate
Advances pursuant to the preceding paragraph or made instead as Base Rate
Advances pursuant to the preceding clause (i), all payments and prepayments of
principal that would have otherwise been applied to such Eurodollar Rate
Advances of such Lender shall be applied instead to such Base Rate Advances of
such Lender.

 

SECTION 2.13 Payments and Computations. (a) The Borrower shall make each payment
hereunder and under any Note not later than 10:00 A.M. (Chicago time) on the day
when due in U.S. dollars to the Administrative Agent at its address referred to
in Section 8.02 in same day funds without setoff, counterclaim or other
deduction. The Administrative Agent will promptly thereafter cause to be
distributed like funds relating to the payment of principal, interest, facility
fees and utilization fees ratably (other than amounts payable pursuant to
Section 2.02(b), 2.07, 2.11, 2.14 or 8.04(b)) to the Lenders for the account of
their respective Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender to such Lender for the account
of its Applicable Lending Office, in each case to be applied in accordance with
the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information contained therein in the Register pursuant to
Section 8.07(d), from the effective date specified in such Assignment and
Acceptance, the Administrative Agent shall make all payments hereunder and under
the Notes in respect of the interest assigned thereby to the Lender assignee
thereunder, and the parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior to such effective
date directly between themselves.

 

(b) The Borrower hereby authorizes each Lender, if and to the extent any payment
owed to such Lender by the Borrower is not made when due hereunder, to charge
from time to time against any or all of the Borrower’s accounts with such Lender
any amount so due.

 

16

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(c) All computations of interest based on the Prime Rate shall be made by the
Administrative Agent on the basis of a year of 365 or 366 days, as the case may
be, and all computations of interest based on the Eurodollar Rate or the Federal
Funds Rate and of fees shall be made by the Administrative Agent, and all
computations of interest pursuant to Section 2.07 shall be made by a Lender, on
the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest or fees are payable. Each determination by the
Administrative Agent (or, in the case of Section 2.07, by a Lender) of an
interest rate hereunder shall be conclusive and binding for all purposes, absent
manifest error.

 

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

 

(e) Unless the Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due by the Borrower to the Lenders
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent that the Borrower shall not have so made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.

 

(f) Notwithstanding anything to the contrary contained herein, any amount
payable by the Borrower hereunder that is not paid when due (whether at stated
maturity, by acceleration or otherwise) shall (to the fullest extent permitted
by law) bear interest from the date when due until paid in full at a rate per
annum equal at all times to the Base Rate plus 2%, payable upon demand.

 

SECTION 2.14 Taxes. (a) Any and all payments by the Borrower hereunder or under
any Note shall be made, in accordance with Section 2.13, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Administrative Agent, taxes
imposed on its income, and franchise taxes imposed on it, by the jurisdiction
under the laws of which such Lender or the Administrative Agent (as the case may
be) is organized or any political subdivision thereof and, in the case of each
Lender, taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction of such Lender’s Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities, collectively, “Taxes”). If the Borrower
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder or under any Note to any Lender or the Administrative Agent,
(i) the sum payable shall be increased as

 

17

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may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.14), such
Lender 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
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.

 

(b) In addition, the Borrower severally 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 or the Notes (all of the foregoing, “Other
Taxes”).

 

(c) No Lender may claim or demand payment or reimbursement in respect of any
Taxes or Other Taxes pursuant to this Section 2.14 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 Lender’s Applicable Lending Office.

 

(d) The Borrower will indemnify each Lender 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 2.14) paid by such
Lender 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. Such indemnification shall be made within 30 days from the date such
Lender or the Administrative Agent (as the case may be) makes written demand
therefor.

 

(e) Prior to the date of an initial borrowing hereunder in the case of each
Lender listed on the signature pages hereof, and on the date of the Assignment
and Acceptance pursuant to which it became a Lender in the case of each other
Lender, and from time to time thereafter within 30 days from the date of request
if requested by the Borrower or the Administrative Agent, each Lender organized
under the laws of a jurisdiction outside the United States shall provide the
Administrative Agent and the Borrower with the forms prescribed by the Internal
Revenue Service of the United States certifying that such Lender is exempt from
United States withholding taxes with respect to all payments to be made to such
Lender hereunder and under any Note. If for any reason during the term of this
Agreement, any Lender becomes unable to submit the forms referred to above or
the information or representations contained therein are no longer accurate in
any material respect, such Lender shall notify the Administrative Agent and the
Borrower in writing to that effect. Unless the Borrower and the Administrative
Agent have received forms or other documents satisfactory to them indicating
that payments hereunder or under any Note are not subject to United States
withholding tax, the Borrower or the Administrative Agent shall withhold taxes
from such payments at the applicable statutory rate in the case of payments to
or for any Lender organized under the laws of a jurisdiction outside the United
States and no Lender may claim or demand payment or reimbursement for such
withheld taxes pursuant to this Section 2.14.

 

(f) Any Lender claiming any additional amount payable pursuant to this Section
2.14 shall use its best efforts (consistent with its internal policy and legal
and regulatory

 

18

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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 amount which may thereafter accrue and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.

 

(g) If the Borrower makes any additional payment to any Lender pursuant to this
Section 2.14 in respect of any Taxes or Other Taxes, and such Lender 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 2.14, such Lender 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 Borrower such amount as such Lender shall have determined
to be attributable to the deduction or withholding of such Taxes or Other Taxes.
If, within one year after the payment of any such amount to the Borrower, such
Lender 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 2.14(g), the Borrower shall upon notice and
demand of such Lender promptly repay the amount of such overpayment. Any
determination made by a Lender pursuant to this Section 2.14(g) shall in the
absence of bad faith or manifest error be conclusive, and nothing in this
Section 2.14(g) shall be construed as requiring any Lender to conduct its
business or to arrange or alter in any respect its tax or financial affairs
(except as required by Section 2.14(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 Lender.

 

(h) Without prejudice to the survival of any other agreement of the Borrower or
any Lender hereunder, the agreements and obligations of the Borrower and the
Lenders contained in this Section 2.14 shall survive the payment in full of
principal and interest hereunder and under the Notes; provided that no Lender
shall be entitled to demand any payment from the Borrower under this Section
2.14 more than one year following the payment to or for the account of such
Lender of all other amounts payable by the Borrower hereunder and under any Note
issued by the Borrower to such Lender and the termination of such Lender’s
Commitment; provided, further, that the foregoing proviso shall in no way limit
the right of any Lender to demand or receive any payment under this Section 2.14
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 2.15 Sharing of Payments, Etc. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) on account of the Advances made by it (other than pursuant to
Section 2.02(b), 2.07, 2.11, 2.14 or 8.04(b)) in excess of its ratable share of
payments on account of the Advances obtained by all Lenders, such Lender shall
forthwith purchase from the other Lenders such participations in the Advances
made by them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them, provided that if all or any portion of
such excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender’s ratable share (according to the proportion
of (i) the amount of such Lender’s required repayment to (ii) the total amount

 

19

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so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.15 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.

 

SECTION 2.16 Term-Out Option. On the Commitment Termination Date, the Borrower
may, subject to the approval of all Lenders (which approval may be withheld by
any Lender in its sole discretion), elect to convert all Outstanding Advances to
term loans maturing 364 days after the Commitment Termination Date (in which
event the parties hereto shall enter into an amendment hereto to reflect the
fact that this is no longer a revolving facility and to make such other changes
to the terms hereof as may be agreed by the parties hereto).

 

ARTICLE III

 

CONDITIONS TO BORROWINGS

 

SECTION 3.01 Conditions Precedent to Initial Borrowing. No Lender shall be
obligated to make any Advance unless the Administrative Agent shall have
received (a) evidence that the Borrower has paid, or concurrently with the
making of the initial Advances will pay, all of its obligations under the
Existing Agreement; and (b) each of the following documents, each dated the date
of the initial Borrowing (or an earlier date satisfactory to the Administrative
Agent, in form and substance satisfactory to the Administrative Agent and each
(except for the Notes) in sufficient copies to provide one for each Lender:

 

(i) A Note for each Lender that has requested a Note to evidence its Advances.

 

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

 

(iii) A certificate of the Secretary or an Assistant Secretary of the Borrower
certifying (A) the names and true signatures of the officers of the Borrower
authorized to sign this Agreement and the other documents to be delivered
hereunder; (B) that attached thereto are true and correct copies of the
certificate of formation and operating agreement of the Borrower, 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 Borrower of this
Agreement and the documents contemplated hereby.

 

(iv) A certificate signed by either the chief financial officer, principal
accounting officer or treasurer of the Borrower stating that (A) the
representations

 

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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 and (B) no Event of
Default or Unmatured Event of Default has occurred and is continuing on the date
of such certificate.

 

(v) A favorable opinion of Ballard Spahr Andrews & Ingersoll LLC, special
counsel for the Borrower, substantially in the form of Exhibit D.

 

SECTION 3.02 Conditions Precedent to All Borrowings. The obligation of each
Lender to make any Advance to the Borrower shall be subject to the further
conditions precedent that on the date of such Borrowing the following statements
shall be true, and the giving of the applicable Notice of Borrowing and the
acceptance by the Borrower of the proceeds of Advances pursuant thereto shall
constitute a representation and warranty by the Borrower that on the date of the
making of such Advances such statements are true:

 

(A) The representations and warranties of the Borrower contained in Section 4.01
are correct on and as of the date of such Borrowing, before and after giving
effect to such Borrowing and the application of the proceeds therefrom, as
though made on and as of such date; and

 

(B) No event has occurred and is continuing, or would result from such Borrowing
or from the application of the proceeds therefrom, that constitutes an Event of
Default or Unmatured Event of Default.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

SECTION 4.01 Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:

 

(a) The Borrower is a limited liability company duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization.

 

(b) The execution, delivery and performance by the Borrower of this Agreement
and the Notes are within the Borrower’s powers, have been duly authorized by all
necessary organizational action on the part of the Borrower, and do not and will
not contravene (i) the organizational documents of the Borrower, (ii) applicable
law or (iii) any contractual or legal restriction binding on or affecting the
properties of the Borrower 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 Borrower of this Agreement or any
Note, except an appropriate order or orders of the Securities and Exchange
Commission under the Public Utility Holding Company Act of 1935, which order or
orders have been duly obtained, and are (x) in full force and effect and (y)
sufficient for the purposes hereof.

 

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(d) This Agreement is, and each Note when delivered hereunder will be, a legal,
valid and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms, except as the enforceability thereof may be
limited by equitable principles or by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights
generally.

 

(e) (i) The consolidated balance sheet of the Borrower and its Subsidiaries as
at December 31, 2002 and the related consolidated statements of income, retained
earnings and cash flows of the Borrower for the fiscal year then ended,
certified by Pricewaterhouse Coopers LLP, and the unaudited consolidated balance
sheet of the Borrower and its Subsidiaries as of June 30, 2003 and the related
unaudited statement of income for the six-month period then ended, copies of
which have been furnished to each Lender, fairly present in all material
respects (subject, in the case of such balance sheet and statement of income for
the period ended June 30, 2003, to year-end adjustments) the consolidated
financial condition of the Borrower and its Subsidiaries as at such dates and
the consolidated results of the operations of the Borrower and its Subsidiaries
for the periods ended on such dates in accordance with GAAP; and (ii) since
December 31, 2002, there has been no Material Adverse Change.

 

(f) Except as disclosed in Exelon’s Annual, Quarterly or Current Reports, each
as filed with the Securities and Exchange Commission and delivered to the
Lenders prior to the date of execution and delivery of this Agreement, there is
no pending or threatened action, investigation or proceeding affecting the
Borrower or any of its Subsidiaries before any court, governmental agency or
arbitrator that may reasonably be anticipated to have a Material Adverse Effect.
There is no pending or threatened action or proceeding against the Borrower or
any Subsidiary that purports to affect the legality, validity, binding effect or
enforceability against the Borrower of this Agreement or any Note.

 

(g) No proceeds of 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 or any
transaction subject to the requirements of Section 13 or 14 of the Exchange Act.

 

(h) The Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U of the FRB), and no proceeds of 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
Borrower and its Subsidiaries is represented by margin stock.

 

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

 

(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 any Borrowing,
no steps have been taken

 

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to terminate any Plan, and no contribution failure by any member of the
Controlled Group has occurred 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 any member of the
Controlled Group of any material liability, fine or penalty.

 

ARTICLE V

 

COVENANTS OF THE BORROWER

 

SECTION 5.01 Affirmative Covenants. The Borrower agrees that so long as any
amount payable by the Borrower hereunder remains unpaid or any Lender has any
Commitment, the Borrower will, and, in the case of Section 5.01(a), will cause
its Principal Subsidiaries to, unless the Majority Lenders shall otherwise
consent in writing:

 

(a) Keep Books; Existence; Maintenance of Properties; Compliance with Laws;
Insurance; Taxes.

 

(i) keep proper books of record and account, all in accordance with generally
accepted accounting principles in the United States, consistently applied;

 

(ii) subject to Section 5.02(b) (and except for the dissolution or liquidation
of any Sithe Entity), 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 Borrower and its
Principal Subsidiaries operate;

 

(vi) at any reasonable time and from time to time, pursuant to prior notice
delivered to the Borrower, permit any Lender, or any agent or representative
thereof, to examine and, at such Lender’s expense, make copies of, and abstracts
from the records and books of account of, and visit the properties of,

 

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the Borrower and any Principal Subsidiary and to discuss the affairs, finances
and accounts of the Borrower and any Principal Subsidiary with any of their
respective officers; provided that any non-public information (which has been
identified as such by the Borrower or the applicable Principal Subsidiary)
obtained by any Lender 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 any other party to this
Agreement, its examiners, affiliates, outside auditors, counsel or other
professional advisors in connection with this Agreement or if otherwise required
to do so by law or regulatory process; and

 

(vii) use the proceeds of the Advances to repay a note issued by the Borrower to
Sithe Energies, Inc. and for other general corporate purposes (including the
making of acquisitions), but in no event for any purpose which would be contrary
to Section 4.01(g) or 4.01(h).

 

(b) Reporting Requirements. Furnish to the Lenders:

 

(i) as soon as possible, and in any event within five Business Days after the
occurrence of any Event of Default or Unmatured Event of Default continuing on
the date of such statement, a statement of an authorized officer of the Borrower
setting forth details of such Event of Default or Unmatured Event of Default and
the action which the Borrower 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 Borrower (commencing with
the quarter ending September 30, 2003), a copy of the Borrower’s Quarterly
Report on Form 10-Q filed with the Securities and Exchange Commission with
respect to such quarter (or, if the Borrower is not required to file a Quarterly
Report on Form 10-Q, copies of an unaudited consolidated balance sheet of the
Borrower as of the end of such quarter and the related consolidated statement of
income of the Borrower for the portion of the Borrower’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
a certificate of an authorized officer of the Borrower stating that no Event of
Default or Unmatured Event of Default has occurred and is continuing or, if any
such Event of Default or Unmatured Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action which the
Borrower proposes to take with respect thereto;

 

(iii) as soon as available and in any event within 105 days after the end of
each fiscal year of the Borrower, a copy of the Borrower’s Annual Report on Form
10-K filed with the Securities and Exchange Commission with respect to such
fiscal year (or, if the Borrower is not required to file an Annual Report on
Form 10-K, the consolidated balance sheet of the Borrower and its subsidiaries
as of the last day of such fiscal year and the related consolidated statements
of income, retained earnings (if applicable) and cashflows of the Borrower for
such

 

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fiscal year, certified by Pricewaterhouse Coopers LLP or other certified public
accountants of recognized national standing), together with a certificate of an
authorized officer of the Borrower stating that no Event of Default or Unmatured
Event of Default has occurred and is continuing or, if any Event of Default or
Unmatured Event of Default has occurred and is continuing, a statement as to the
nature thereof and the action which the Borrower proposes to take with respect
thereto;

 

(iv) concurrently with the delivery of the annual and quarterly 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 E, duly completed and signed by the
Chief Financial Officer, the Treasurer or an Assistant Treasurer of the
Borrower;

 

(v) except as otherwise provided in clause (ii) or (iii) above, promptly after
the sending or filing thereof, copies of all reports that the Borrower sends to
any of its security holders, and copies of all Reports on Form 10-K, 10-Q or
8-K, and registration statements and prospectuses that the Borrower 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
or dividend reinvestment plans of the Borrower or such Subsidiary);

 

(vi) promptly upon becoming aware of the institution of any steps by the
Borrower 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 Borrower 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 any member of the
Controlled Group of any material liability, fine or penalty, notice thereof and
a statement as to the action the Borrower proposes to take with respect thereto;

 

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

 

(viii) such other information respecting the condition, operations, business or
prospects, financial or otherwise, of the Borrower or any Subsidiary as any
Lender, through the Administrative Agent, may from time to time reasonably
request.

 

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SECTION 5.02 Negative Covenants. The Borrower agrees that so long as any amount
payable by the Borrower hereunder remains unpaid or any Lender has any
Commitment (except with respect to Section 5.02(a), which shall be applicable
only as of the date hereof and at the time of each Advance to the Borrower), the
Borrower will not, without the written consent of the Majority Lenders:

 

(a) Limitation on Liens. Create, incur, assume or suffer to exist any Lien on
its 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
on the capital stock of or any other equity interest in any Subsidiary to secure
Nonrecourse Indebtedness; (iii) 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; (iv) Liens existing on property at the time of its
acquisition (other than any such Lien created in contemplation of such
acquisition unless permitted by the preceding clause (iii)); (v) Liens granted
in connection with any financing arrangement for the purchase of nuclear fuel or
the financing of pollution control facilities, limited to the fuel or facilities
so purchased or acquired; (vi) Liens arising in connection with sales or
transfers of, or financing secured by, accounts receivable or related contracts;
provided that any such sale, transfer or financing shall be on arms’ length
terms; (vii) Liens arising in connection with sale and leaseback transactions,
but only to the extent the aggregate purchase price of all assets sold pursuant
to such transactions does not exceed $250,000,000; (viii) Liens securing
Permitted Obligations; and (ix) Liens, other than those described in clauses (i)
through (viii) of this Section 5.02(a), granted by the Borrower in the ordinary
course of business securing Debt of the Borrower; provided that the aggregate
amount of all Debt secured by Liens permitted by clause (ix) of this
Section 5.02(a) 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 (other than any Sithe Entity) to do so, except
that (i) any Principal Subsidiary may merge with or into or consolidate with or
transfer assets to the Borrower or any other Principal Subsidiary; and (ii) the
Borrower 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 Event of Default or Unmatured 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 Borrower is a party,
either (x) the Borrower 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 Borrower under this Agreement and the Notes pursuant to a
written instrument in form and substance satisfactory to the Administrative
Agent, 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 its Interest Coverage Ratio as of the last
day of any fiscal quarter to be less than 3.25 to 1.0.

 

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

 

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ARTICLE VI

 

EVENTS OF DEFAULT

 

SECTION 6.01 Events of Default. If any of the following events shall occur and
be continuing (any such event an “Event of Default”):

 

(a) The Borrower shall fail to pay (i) any principal of any Advance when the
same becomes due and payable or (ii) any interest on any Advance or any other
amount payable by the Borrower under this Agreement or any Note within three
Business Days after the same becomes due and payable; or

 

(b) Any representation or warranty made by the Borrower herein or by the
Borrower (or any of its officers) pursuant to the terms of this Agreement shall
prove to have been incorrect or misleading in any material respect when made; or

 

(c) The Borrower shall fail to perform or observe (i) any term, covenant or
agreement contained in Section 5.02, Section 5.01(a)(vii) or Section 5.01(b)(i);
or (ii) any other term, covenant or agreement contained in this Agreement on its
part to be performed or observed 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 Borrower by the Administrative Agent
(which notice shall be given by the Administrative Agent at the written request
of any Lender); or

 

(d) The Borrower 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 Sithe Project Debt, Debt
evidenced by the Notes and Nonrecourse Indebtedness) of the Borrower or such
Principal Subsidiary (as the case may be) 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 Borrower 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; or

 

(e) The Borrower or any Principal Subsidiary (other than, so long as such entity
has no Debt other than Sithe Project Debt, any Sithe Entity) shall generally not
pay its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against the Borrower
or any Principal Subsidiary (other than, so long as such entity has no Debt
other than Sithe Project Debt, any Sithe Entity) seeking to adjudicate it as
bankrupt or insolvent,

 

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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 Borrower or any Principal
Subsidiary (other than, so long as such entity has no Debt other than Sithe
Project Debt, any Sithe Entity) shall take any action to authorize or to consent
to any of the actions set forth above in this Section 6.01(e); or

 

(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 Borrower or any Principal Subsidiary (other than,
if applicable, any Sithe Entity) and either (i) enforcement proceedings shall
have been commenced by any creditor upon such judgment or order or (ii) there
shall be any period of 30 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect; or

 

(g) (i) Any Reportable Event that the Majority Lenders determine in good faith
might constitute grounds for the termination of any Plan or for the appointment
by the appropriate United States District Court of a trustee to administer a
Plan shall have occurred and be continuing 30 days after written notice to such
effect shall have been given to the Borrower 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 or (iv) the PBGC
shall institute proceedings to terminate any Plan or to appoint a trustee to
administer any Plan; provided that on the date of any event described in clauses
(i) through (iv) above, the Unfunded Liabilities of such Plan exceed
$20,000,000; or

 

(h) Exelon (or a wholly owned Subsidiary of Exelon) shall fail to own, free and
clear of all Liens, 100% of the membership interests of the Borrower;

 

then, and in any such event, the Administrative Agent shall at the request, or
may with the consent, of the Majority Lenders, by notice to the Borrower, (i)
declare the Commitments to be terminated, whereupon the same shall forthwith
terminate, and/or (ii) declare the principal amount of the Advances, all
interest thereon and all other amounts payable by the Borrower under this
Agreement to be forthwith due and payable, whereupon the principal amount of the
Advances, all such interest and all such other amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower;
provided that in the event of an Event of Default under Section 6.01(e), (A) the
obligation of each Lender to make any Advance to the Borrower shall
automatically be terminated and (B) the principal amount of the Advances, all
interest thereon and all other amounts payable by the Borrower hereunder shall
automatically and immediately become due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly
waived by the Borrower.

 

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ARTICLE VII

 

THE AGENTS

 

SECTION 7.01 Authorization and Action. Each Lender 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 Notes), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided that the Administrative Agent shall not be
required to take any action which exposes the Administrative Agent to personal
liability or which is contrary to this Agreement or applicable law. The
Administrative Agent agrees to give to each Lender prompt notice of each notice
given to it by the Borrower pursuant to the terms of this Agreement.

 

SECTION 7.02 Administrative Agent’s Reliance, Etc. Neither the Administrative
Agent nor any of its 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, except for its or their respective own gross negligence or
willful misconduct. Without limiting the generality of the foregoing: (i) the
Administrative Agent may treat the payee of any Note as the holder thereof until
the Administrative Agent receives and accepts an Assignment and Acceptance
entered into by the Lender which is the payee of such Note, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 8.07; (ii) the
Administrative Agent may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iii)
the Administrative Agent makes no warranty or representation to any Lender and
shall not be responsible to any Lender for any statement, warranty or
representation (whether written or oral) made in or in connection with this
Agreement; (iv) the Administrative Agent 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 on the part of the Borrower or to inspect the
property (including the books and records) of the Borrower; (v) the
Administrative Agent shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any instrument or document furnished pursuant hereto; and
(vi) the Administrative Agent shall not incur any liability under or in respect
of this Agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.

 

SECTION 7.03 Administrative Agent and Affiliates. With respect to its
Commitment, Advances and Note (if any), Bank One shall have the same rights and
powers under this Agreement as any other Lender and may exercise the same as
though it were not the Administrative Agent; and the term “Lender” or “Lenders”
shall, unless otherwise expressly indicated, include Bank One in its individual
capacity. Bank One and its affiliates may accept

 

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deposits from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with the Borrower, any Subsidiary and any Person
who may do business with or own securities of the Borrower or any Subsidiary,
all as if it were not the Administrative Agent and without any duty to account
therefor to the Lenders.

 

SECTION 7.04 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement.

 

SECTION 7.05 Indemnification. The Lenders agree to indemnify the Administrative
Agent (to the extent not reimbursed by the Borrower), ratably according to their
respective Pro Rata Shares, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or any action taken or omitted by
the Administrative Agent under this Agreement, provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Administrative Agent’s gross negligence or willful misconduct. Without
limiting the foregoing, each Lender agrees to reimburse the Administrative Agent
promptly upon demand for its Pro Rata Share of any out-of-pocket expenses
(including reasonable counsel fees) incurred by the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, to the extent that such expenses are
reimbursable by the Borrower but for which the Administrative Agent is not
reimbursed by the Borrower.

 

SECTION 7.06 Successor Administrative Agent. The Administrative Agent may resign
at any time by giving written notice thereof to the Lenders and the Borrower and
may be removed at any time with or without cause by the Majority Lenders. Upon
any such resignation or removal, the Majority Lenders shall have the right to
appoint a successor Administrative Agent. If no successor Administrative Agent
shall have been so appointed by the Majority Lenders, and shall have accepted
such appointment, within 30 days after the retiring Administrative Agent’s
giving of notice of resignation or the Majority Lenders’ removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, which shall be a
commercial bank described in clause (i) or (ii) of the definition of “Eligible
Assignee” and having a combined capital and surplus of at least $150,000,000.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Administrative Agent’s resignation or removal hereunder as
Administrative Agent, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was

 

30

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Administrative Agent under this Agreement. Notwithstanding the foregoing, if no
Event of Default or Unmatured Event of Default shall have occurred and be
continuing, then no successor Administrative Agent shall be appointed under this
Section 7.06 without the prior written consent of the Borrower, which consent
shall not be unreasonably withheld or delayed.

 

SECTION 7.07 Documentation Agent and Lead Arranger. No Person designated on the
cover page, a signature page or elsewhere in this Agreement as the
“Documentation Agent” or “Lead Arranger and Sole 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 or the Notes, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Majority Lenders and, in the case of an amendment, the Borrower, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided that no amendment, waiver or
consent shall, unless in writing and signed by all the Lenders (other than any
Lender that is the Borrower or an Affiliate of the Borrower), do any of the
following: (a) waive any of the conditions specified in Section 3.01 or 3.02,
(b) increase or extend the Commitments of the Lenders or subject the Lenders to
any additional obligations, (c) reduce the principal of, or interest on, the
Notes or any fees or other amounts payable hereunder, (d) postpone any date
fixed for any payment of principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, (e) change the percentage of the Commitments or
of the aggregate unpaid principal amount of the Notes, or the number of Lenders,
that shall be required for the Lenders or any of them to take any action
hereunder, or (f) amend this Section 8.01; provided, further, that no amendment,
waiver or consent shall, unless in writing and signed by the Administrative
Agent, in addition to the Lenders required above to take such action, affect the
rights or duties of the Administrative Agent under this Agreement or any Note.

 

SECTION 8.02 Notices, Etc. All notices and other communications provided for
hereunder shall be in writing (including telecopier, telegraphic, telex or cable
communication) and mailed, telecopied, telegraphed, telexed, cabled or
delivered, if to the Borrower, at 10 S. Dearborn, 37th Floor, Chicago, IL 60603,
Attention: J. Barry Mitchell, Telecopy: (312) 394-5440; if to any Lender listed
on the signature pages hereof, at its Domestic Lending Office specified opposite
its name on Schedule I hereto; if to any other Lender, at its Domestic Lending
Office specified in the Assignment and Acceptance pursuant to which it became a
Lender; and if to the Administrative Agent, at its address at 1 Bank One Plaza,
Mail Suite 0634, 1FPN-10, Chicago, Illinois 60670, Attention: Mr. Ron Cromey,
Telecopy: (312) 732-4840 or, as to each party, at such other address as shall be
designated by such party in a written notice to the other parties. All such
notices and communications shall, when mailed, telecopied, telegraphed, telexed
or cabled, be effective when deposited in the mails, telecopied, delivered to
the telegraph company, confirmed by telex answerback or delivered to the cable
company,

 

31

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respectively, except that notices and communications to the Administrative Agent
pursuant to Article II or VII shall not be effective until received by the
Administrative Agent.

 

SECTION 8.03 No Waiver; Remedies. No failure on the part of any Lender or the
Administrative Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.

 

SECTION 8.04 Costs and Expenses; Indemnification. (a) The Borrower severally
agrees to pay on demand all costs and expenses incurred by the Administrative
Agent and the Lead Arranger in connection with the preparation, execution,
delivery, administration, syndication, modification and amendment of this
Agreement, the Notes and the other documents to be delivered hereunder,
including the reasonable fees, internal charges and out-of-pocket expenses of
counsel (including in-house counsel) for the Administrative Agent and the Lead
Arranger with respect thereto and with respect to advising the Administrative
Agent and the Lead Arranger as to their respective rights and responsibilities
under this Agreement. The Borrower further severally agrees to pay on demand all
costs and expenses, if any (including counsel fees and expenses of outside
counsel and of internal counsel), incurred by the Agent or any Lender in
connection with the collection and enforcement (whether through negotiations,
legal proceedings or otherwise) of the Borrower’s obligations this Agreement,
the Notes and the other documents to be delivered by the Borrower hereunder,
including reasonable counsel fees and expenses in connection with the
enforcement of rights under this Section 8.04(a).

 

(b) If any payment of principal of, or any conversion of, any Eurodollar Rate
Advance is made other than on the last day of the Interest Period for such
Advance, as a result of a payment or conversion pursuant to Section 2.09 or 2.12
or acceleration of the maturity of the Notes pursuant to Section 6.01 or for any
other reason, the Borrower shall, upon demand by any Lender (with a copy of such
demand to the Administrative Agent), pay to the Administrative Agent for the
account of such Lender any amount required to compensate such Lender for any
additional losses, costs or expenses which it may reasonably incur as a result
of such payment or conversion, including any loss, cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
any Lender to fund or maintain such Advance.

 

(c) The Borrower hereby severally agrees to indemnify and hold each Lender and
the Administrative Agent and each of their respective Affiliates, officers,
directors and employees (each, an “Indemnified Person”) harmless from and
against any and all claims, damages, losses, liabilities, costs or expenses
(including reasonable attorney’s fees and expenses, whether or not such
Indemnified Person is named as a party to any proceeding or is otherwise
subjected to judicial or legal process arising from any such proceeding) that
any of them may pay or incur arising out of or relating to this Agreement, the
Notes or the transactions contemplated thereby, or the use by the Borrower or
any of its Subsidiaries of the proceeds of any Advance to the Borrower; provided
that the Borrower shall not be liable for any portion of such claims, damages,
losses, liabilities, costs or expenses resulting from such Indemnified Person’s
gross negligence or willful misconduct. The Borrower’s obligations under this
Section 8.04(c) shall survive the repayment of all amounts owing by the Borrower
to the Lenders and the

 

32

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Administrative Agent under this Agreement and the Notes issued by the Borrower
and the termination of the Commitments. If and to the extent that the
obligations of the Borrower under this Section 8.04(c) are unenforceable for any
reason, the Borrower agrees to make the maximum contribution to the payment and
satisfaction thereof which is permissible under applicable law.

 

SECTION 8.05 Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes issued by the Borrower due and payable
pursuant to the provisions of Section 6.01, each Lender is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of the Borrower against any
and all of the obligations of the Borrower now or hereafter existing under this
Agreement and any Note held by such Lender, whether or not such Lender shall
have made any demand under this Agreement or such Note and although such
obligations may be unmatured. Each Lender agrees promptly to notify the Borrower
after any such set-off and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 8.05 are in addition
to other rights and remedies (including other rights of set-off) that such
Lender may have.

 

SECTION 8.06 Binding Effect. This Agreement shall become effective when
counterparts hereof shall have been executed by the Borrower and the
Administrative Agent and the Administrative Agent shall have been notified by
each Lender that such Lender has executed a counterpart hereof and thereafter
shall be binding upon and inure to the benefit of the Borrower, the
Administrative Agent and each Lender and their respective successors and
assigns, provided that (except as permitted by Section 5.02(b)(iii)) the
Borrower shall not have the right to assign rights hereunder or any interest
herein without the prior written consent of all Lenders.

 

SECTION 8.07 Assignments and Participations. (a) Each Lender may, with the prior
written consent of the Borrower and the Administrative Agent (which consents
shall not be unreasonably withheld or delayed), and if demanded by the Borrower
pursuant to Section 8.07(g) shall to the extent required by such Section, assign
to one or more banks or other entities all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment,
the Advances owing to it and any Note held by it); provided that (i) each such
assignment shall be of a constant, and not a varying, percentage of all of the
assigning Lender’s rights and obligations under this Agreement, (ii) the portion
of the Commitment Amount of the assigning Lender being assigned pursuant to each
such assignment (determined as of the date of the applicable Assignment and
Acceptance) shall in no event be less than $10,000,000 or, if less, the entire
amount of such Lender’s Commitment, and shall be an integral multiple of
$1,000,000 or such Lender’s entire Commitment, (iii) each such assignment shall
be to an Eligible Assignee, (iv) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any Note
subject to such assignment and a processing and recordation fee of $4,000 (which
shall be payable by one or more of the parties to the Assignment and Acceptance,
and not by the Borrower, and shall not be payable if the assignee is a Federal
Reserve Bank), and (v) the consent of the Borrower shall not be required after
the occurrence and during the continuance of

 

33

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any Event of Default. Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each Assignment and Acceptance,
(x) the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
and (y) the Lender assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto (although an assigning
Lender shall continue to be entitled to indemnification pursuant to Section
8.04(c)). Notwithstanding anything contained in this Section 8.07(a) to the
contrary, (A) the consent of the Borrower and the Administrative Agent shall not
be required with respect to any assignment by any Lender to an Affiliate of such
Lender or to another Lender and (B) any Lender may at any time, without the
consent of the Borrower or the Administrative Agent, and without any requirement
to have an Assignment and Acceptance executed, assign all or any part of its
rights under this Agreement and any Note to a Federal Reserve Bank, provided
that no such assignment shall release the transferor Lender from any of its
obligations hereunder.

 

(b) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statement, warranty
or representation made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any instrument or document furnished pursuant hereto; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under this
Agreement or any instrument or document furnished pursuant hereto; (iii) such
assignee confirms that it has received a copy of this Agreement, together with
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the
Administrative Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Administrative Agent by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of this Agreement are required to be performed by it as a Lender.

 

(c) The Administrative Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Commitment Amount of, and principal amount of the Advances owing
by the Borrower to, each Lender from time to time (the “Register”). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Administrative Agent and the Lenders

 

34

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

may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice.

 

(d) Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender and an assignee representing that it is an Eligible Assignee, together
with any Note subject to such assignment, the Administrative Agent shall, if
such Assignment and Acceptance has been completed and is in substantially the
form of Exhibit C, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower. Within five Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent, in exchange for the surrendered Note issued by the
Borrower, a new Note to the order of the applicable assignee in an amount equal
to the Commitment Amount assumed by such assignee pursuant to such Assignment
and Acceptance and, if the assigning Lender has retained a Commitment hereunder,
a new Note to the order of the assigning Lender in an amount equal to the
Commitment Amount of such assigning Lender after giving effect to such
assignment. Each such new Note or Notes shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit A.

 

(e) Each Lender may sell participations to one or more banks or other entities
(each, a “Participant”) in or to all or a portion of its rights and/or
obligations under this Agreement (including all or a portion of its Commitment,
the Advances owing to it and any Note held by it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the holder of
any such Note for all purposes of this Agreement, (iv) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and (v) such Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment, modification
or waiver of any provision of this Agreement or any Note held by such Lender,
other than any such amendment, modification or waiver with respect to any
Advance or Commitment in which such Participant has an interest that forgives
principal, interest or fees or reduces the interest rate or fees payable with
respect to any such Advance or Commitment, postpones any date fixed for any
regularly scheduled payment of principal of, or interest or fees on, any such
Advance or Commitment, extends any Commitment, releases any guarantor of any
such Advance or releases any substantial portion of collateral, if any, securing
any such Advance.

 

(f) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 8.07, disclose to
the assignee or participant, or proposed assignee or participant, any
information relating to the Borrower furnished to such Lender by or on behalf of
the Borrower; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any confidential information relating to the Borrower
received by it from such Lender (subject to customary exceptions regarding
regulatory requirements, compliance with legal process and other requirements of
law).

 

35

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(g) If (i) any Lender shall make demand for payment under Section 2.11(a),
2.11(b) or 2.14 or (ii) shall deliver any notice to the Administrative Agent
pursuant to Section 2.12 resulting in the suspension of certain obligations of
such Lender with respect to Eurodollar Rate Advances, then (in the case of
clause (i)) within 60 days after such demand (if, but only if, such payment
demanded under Section 2.11(a), 2.11(b) or 2.14 has been made by the Borrower),
or (in the case of clause (ii)) within 60 days after such notice (if such
suspension is still in effect), as the case may be, the Borrower may demand that
such Lender assign in accordance with this Section 8.07 to one or more Eligible
Assignees designated by the Borrower and reasonably acceptable to the
Administrative Agent all (but not less than all) of such Lender’s Commitment and
the Advances owing to it within the next succeeding 30 days. If any such
Eligible Assignee designated by the Borrower shall fail to consummate such
assignment on terms acceptable to such Lender, or if the Borrower shall fail to
designate any such Eligible Assignee for all of such Lender’s Commitment and
Advances, then such Lender may (but shall not be required to) assign such
Commitment and Advances to any other Eligible Assignee in accordance with this
Section 8.07 during such period.

 

(h) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Bank”) may grant to a special purpose funding vehicle (an “SPC”),
identified as such in writing from time to time by the Granting Bank to the
Administrative Agent and the Borrower, the option to provide to the Borrower all
or any part of any Advance that such Granting Bank would otherwise be obligated
to make to the Borrower pursuant to this Agreement; provided that (i) nothing
herein shall constitute a commitment by any SPC to make any Advance and (ii) if
an SPC elects not to exercise such option or otherwise fails to provide all or
any part of such Advance, the Granting Bank shall be obligated to make such
Advance pursuant to the terms hereof. The making of an Advance by an SPC
hereunder shall utilize the Commitment of the Granting Bank to the same extent,
and as if, such Advance were made by such Granting Bank. Each party hereto
agrees that no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Bank). In furtherance of the foregoing, each party hereto agrees (which
agreement shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the payment in full of all outstanding
commercial paper or other senior indebtedness of any SPC, it will not institute
against, or join any other person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under the laws of the United States or any State thereof. In addition,
notwithstanding anything to the contrary contained in this Section 8.07, any SPC
may (i) with notice to, but without the prior written consent of, the Borrower
and the Administrative Agent and without paying any processing fee therefor,
assign all or a portion of its interests in any Advances to the Granting Bank or
to any financial institutions (consented to by the Borrower and Administrative
Agent, neither of which consents shall be unreasonably withheld or delayed)
providing liquidity and/or credit support to or for the account of such SPC to
support the funding or maintenance of Advances and (ii) disclose on a
confidential basis any non-public information relating to its Advances to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPC. This Section 8.07(h) may not be
amended in any manner which adversely affects a Granting Bank or an SPC without
the written consent of such Granting Bank or SPC.

 

36

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SECTION 8.08 Governing Law. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.

 

SECTION 8.09 Consent to Jurisdiction; Certain Waivers. (a) THE BORROWER
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE
COMMONWEALTH OF PENNSYLVANIA AND ANY UNITED STATES DISTRICT COURT SITTING IN THE
COMMONWEALTH OF PENNSYLVANIA IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE NOTES AND THE BORROWER IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH A COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS
AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.

 

(b) EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO HEREBY WAIVES ANY RIGHT IT
MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE NOTES ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.

 

SECTION 8.10 Execution in Counterparts; Integration. 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. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes all prior and contemporaneous agreements
and understandings, oral or written, relating to the subject matter hereof
(excluding any fee letter between the Borrower and the Lead Arranger or any
Lender).

 

SECTION 8.11 Termination of Existing Agreement. The Borrower and the Lenders
which are parties to the Existing Agreement (which Lenders constitute the
“Majority Lenders” as defined in the Existing Agreement) and Bank One, as
administrative agent under the Existing Agreement, agree that, concurrently with
the making of the initial Advances hereunder, the commitments under the Existing
Agreement shall terminate and be of no further force or effect (without regard
to any requirement in Section 2.04 of the Existing Agreement for prior notice of
termination of the commitments thereunder).

 

[Remainder of the page intentionally left blank]

 

37

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

 

EXELON GENERATION COMPANY, LLC     By:            

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

   

Name:

       

Title:

   

 

Credit Agreement

 

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

THE LENDERS

   

BANK ONE, NA (Main Office Chicago), as

Administrative Agent and as a Lender

    By:            

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

   

Name:

  Kenneth J. Bauer    

Title:

  Authorized Agent

 

Credit Agreement

 

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

JPMORGAN CHASE BANK, as Documentation

Agent and as a Lender

    By:            

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

   

Name:

       

Title:

   

 

Credit Agreement

 

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

SCHEDULE I

LIST OF APPLICABLE LENDING OFFICES

 

Credit Agreement dated as of September 29, 2003, among Exelon Generation
Company, LLC, as Borrower, various financial institutions, as Lenders, and Bank
One, NA, as Administrative Agent.

 

Name of Lender

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

 

Domestic Lending Office

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

 

Eurodollar Lending Office

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

Bank One, NA  

1 Bank One Plaza

Mail Suite 0634, 1FNP-10

Chicago, IL 60670

Attn: Gwendolyn Watson

Phone: (312) 732-4509

Fax: (312) 732-4840

  Same JPMorgan Chase Bank  

270 Park Avenue

New York, NY 10017

4th Floor

Attn: Michael J. DeForge

Phone: (212) 270-1656

Fax: (212) 270-1063

  Same

 

I-1

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

SCHEDULE II

PRICING SCHEDULE

 

The “Applicable Margin,” the “Facility Fee Rate” and the “Utilization Fee Rate”
for any day are the respective percentages set forth below in the applicable row
under the column corresponding to the Status that exists on such day:

 

Status

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

 

Applicable
Margin

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

 

Facility Fee
Rate

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

 

Utilization Fee
Rate

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

Level I

  0.550%   0.100%   0.100%

Level II

  0.625%   0.125%   0.125%

Level III

  0.725%   0.150%   0.125%

Level IV

  0.925%   0.200%   0.250%

Level V

  1.000%   0.250%   0.500%

 

The Applicable Margin, the Facility Fee Rate and the Utilization Fee Rate shall
be determined in accordance with the table above based on the applicable Status.
The Status in effect on any date for the purposes of this Pricing Schedule is
based on the Moody’s Rating and S&P Rating in effect at the close of business on
such date.

 

For the purposes of the foregoing (but subject to the final paragraph of this
Pricing Schedule):

 

“Level I Status” exists at any date if, on such date, the Moody’s Rating is A3
or better or the S&P Rating is A- or better.

 

“Level II Status” exists at any date if, on such date, (i) Level I Status does
not exist and (ii) the Moody’s Rating is Baa1 or better or the S&P Rating is
BBB+ or better.

 

“Level III Status” exists at any date if, on such date, (i) neither Level I
Status nor Level II Status exists and (ii) the Moody’s Rating is Baa2 or better
or the S&P Rating is BBB or better.

 

“Level IV Status” exists at any date if, on such date, (i) none of Level I
Status, Level II Status or Level III Status exists and (ii) the Moody’s Rating
is Baa3 or better or the S&P Rating is BBB- or better.

 

“Level V Status” exists at any date if, on such date, none of Level I Status,
Level II Status, Level III Status or Level IV Status exists.

 

“Status” means Level I Status, Level II Status, Level III Status, Level IV
Status or Level V Status.

 

If the S&P Rating and the Moody’s Rating create a split-rated situation and the
ratings differential is one level, the higher rating will apply. If the
differential is two levels or more, the intermediate rating at the midpoint will
apply. If there is no midpoint, the higher of the two intermediate ratings will
apply. If the Borrower has no Moody’s Rating or no S&P Rating, Level V Status
shall exist.

 

II-1

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SCHEDULE III

COMMITMENTS

 

Name of Lender

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

   Commitment
Amount

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

Bank One, NA

   $ 566,666,667

JPMorgan Chase Bank

   $ 283,333,333     

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

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

TOTAL

   $ 850,000,000     

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

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

 

 

III-1

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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

   1

SECTION 1.01

  

Certain Defined Terms

   1

SECTION 1.02

  

Other Interpretive Provisions

   10

SECTION 1.03

  

Accounting Principles

   10

ARTICLE II AMOUNTS AND TERMS OF THE COMMITMENTS

   10

SECTION 2.01

  

Commitments

   10

SECTION 2.02

  

Procedures for Advances; Limitations on Borrowings

   11

SECTION 2.03

  

Facility and Utilization Fees

   12

SECTION 2.04

  

Reduction of Commitment Amounts

   12

SECTION 2.05

  

Repayment of Advances

   12

SECTION 2.06

  

Interest on Advances

   12

SECTION 2.07

  

Additional Interest on Eurodollar Advances

   13

SECTION 2.08

  

Interest Rate Determination

   13

SECTION 2.09

  

Continuation and Conversion of Advances

   14

SECTION 2.10

  

Prepayments

   14

SECTION 2.11

  

Increased Costs

   14

SECTION 2.12

  

Illegality

   16

SECTION 2.13

  

Payments and Computations

   16

SECTION 2.14

  

Taxes

   17

SECTION 2.15

  

Sharing of Payments, Etc

   19

SECTION 2.16

  

Term-Out Option

   20

ARTICLE III CONDITIONS TO BORROWINGS

   20

SECTION 3.01

  

Conditions Precedent to Initial Borrowing

   20

SECTION 3.02

  

Conditions Precedent to All Borrowings

   21

ARTICLE IV REPRESENTATIONS AND WARRANTIES

   21

SECTION 4.01

  

Representations and Warranties of the Borrower

   21

ARTICLE V COVENANTS OF THE BORROWER

   23

SECTION 5.01

  

Affirmative Covenants

   23

SECTION 5.02

  

Negative Covenants

   26

ARTICLE VI EVENTS OF DEFAULT

   27

SECTION 6.01

  

Events of Default

   27

ARTICLE VII THE AGENTS

   29

SECTION 7.01

  

Authorization and Action

   29

 

i

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SECTION 7.02

  

Administrative Agent’s Reliance, Etc

   29

SECTION 7.03

  

Administrative Agent and Affiliates

   29

SECTION 7.04

  

Lender Credit Decision

   30

SECTION 7.05

  

Indemnification

   30

SECTION 7.06

  

Successor Administrative Agent

   30

SECTION 7.07

  

Documentation Agent and Lead Arranger

   31

ARTICLE VIII MISCELLANEOUS

   31

SECTION 8.01

  

Amendments, Etc

   31

SECTION 8.02

  

Notices, Etc

   31

SECTION 8.03

  

No Waiver; Remedies

   32

SECTION 8.04

  

Costs and Expenses; Indemnification

   32

SECTION 8.05

  

Right of Set-off

   33

SECTION 8.06

  

Binding Effect

   33

SECTION 8.07

  

Assignments and Participations

   33

SECTION 8.08

  

Governing Law

   37

SECTION 8.09

  

Consent to Jurisdiction; Certain Waivers

   37

SECTION 8.10

  

Execution in Counterparts; Integration

   37

SECTION 8.11

  

Termination of Existing Agreement

   37

 

 

ii

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Schedule I    List of Applicable Lending Offices Schedule II    Pricing Schedule
Schedule III    Commitments Exhibit A    Form of Note Exhibit B    Form of
Notice of Borrowing Exhibit C    Form of Assignment and Acceptance Exhibit D   
Form of Opinion of Special Counsel for the Borrower Exhibit E    Form of Annual
and Quarterly Compliance Certificate

 

iii

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EXHIBIT A

 

FORM OF NOTE

 

Dated: [                    ], 2003

 

FOR VALUE RECEIVED, the undersigned, EXELON GENERATION COMPANY, LLC, a
Pennsylvania limited liability company (the “Borrower”), HEREBY PROMISES TO PAY
to the order of                      (the “Lender”), for the account of its
Applicable Lending Office (such term and other capitalized terms herein being
used as defined in the Credit Agreement referred to below) on the Final
Termination Date, the aggregate principal amount of all outstanding Advances
made by the Lender to the Borrower pursuant to the Credit Agreement.

 

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

 

Both principal and interest are payable in lawful money of the United States of
America to Bank One, NA, as Administrative Agent, at 1 Bank One Plaza, Chicago,
Illinois 60670, in immediately available funds. Each Advance made by the Lender
to the Borrower pursuant to the Credit Agreement, and all payments made on
account of principal thereof, shall be recorded by the Lender and, at the
Lender’s option, endorsed on the grid attached hereto which is part of this
Promissory Note.

 

This Promissory Note is one of the Notes referred to in, and is entitled to the
benefits of, the Credit Agreement dated as of September 29, 2003 among the
Borrower, various financial institutions and Bank One, NA, as Administrative
Agent (as amended, modified or supplemented from time to time, the “Credit
Agreement”). The Credit Agreement, among other things, (i) provides for the
making of Advances by the Lender to the Borrower from time to time in an
aggregate amount not to exceed at any time outstanding the Lender’s Commitment
Amount and (ii) contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.

 

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

 

A-1

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THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE COMMONWEALTH OF PENNSYLVANIA

 

EXELON GENERATION COMPANY, LLC By            

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

   

Name:

       

Title:

   

 

A-2

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ADVANCES AND PAYMENTS OF PRINCIPAL

 

Date

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

 

Amount of

Advance

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

 

Principal

Paid or

Prepaid

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

  

Amount of

Unpaid

Principal

Balance

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

  

Notation

Made By

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

                   

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

                   

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

                   

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

                   

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

                   

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

                   

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

                   

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

                   

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

                   

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

                   

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

                   

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

                   

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

                   

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

                   

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

                   

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

                   

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A-3

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EXHIBIT B

 

FORM OF NOTICE OF BORROWING

 

[Date]

 

Bank One, NA, as Administrative Agent

for the Lenders parties to the Credit Agreement referred to below

1 Bank One Plaza

Chicago, Illinois 60670

 

Attention: Utilities Department

North American Finance Group

 

Ladies and Gentlemen:

 

The undersigned, Exelon Generation Company, LLC, refers to the Credit Agreement,
dated as of September 29, 2003, among Exelon Generation Company, LLC, various
financial institutions and Bank One, NA, as Administrative Agent (as amended,
modified or supplemented from time to time, the “Credit Agreement”), and hereby
gives you notice, irrevocably, pursuant to Section 2.02(a) of the Credit
Agreement that the undersigned requests a Borrowing under the Credit Agreement,
and in that connection sets forth below the information relating to such
Borrowing (the “Proposed Borrowing”) as required by Section 2.02(a) of the
Credit Agreement:

 

(i) The Business Day of the Proposed Borrowing is                     , 20    .

 

(ii) The Type of Advances to be made in connection with the Proposed Borrowing
is [Base Rate Advances] [Eurodollar Rate Advances].

 

(iii) The aggregate amount of the Proposed Borrowing is $                    .

 

(iv) The Interest Period for each Advance made as part of the Proposed Borrowing
is [         month[s]].

 

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

 

(A) the representations and warranties of the undersigned contained in Section
4.01 of the Credit Agreement are correct, before and after giving effect to the
Proposed Borrowing and to the application of the proceeds therefrom, as though
made on and as of such date; and

 

(B) no event has occurred and is continuing, or would result from such Proposed
Borrowing or from the application of the proceeds therefrom, that constitutes an
Event of Default or Unmatured Event of Default.

 

B-1

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Very truly yours,   EXELON GENERATION COMPANY, LLC By            

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

   

Name:

       

Title:

   

 

B-2

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EXHIBIT C

 

FORM OF ASSIGNMENT AND ACCEPTANCE

 

Dated                     , 20    

 

Reference is made to the Credit Agreement dated as of September 29, 2003 among
Exelon Generation Company, LLC (the “Borrower”), various financial institutions
and Bank One, NA, as Administrative Agent (as amended, modified or supplemented
from time to time, the “Credit Agreement”). Terms defined in the Credit
Agreement are used herein with the same meaning.

 

                     (the “Assignor”) and                      (the “Assignee”)
agree as follows:

 

1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, that interest in and to all of
the Assignor’s rights and obligations under the Credit Agreement as of the date
hereof which represents the Pro Rata Share specified on Schedule 1 of all
outstanding rights and obligations under the Credit Agreement, including,
without limitation, a corresponding interest in the Assignor’s Commitment, the
Advances owing to the Assignor and the Notes held by the Assignor. After giving
effect to such sale and assignment, the Assignee’s Commitment Amount will be as
set forth in Section 2 of Schedule 1.

 

2. The Assignor (i) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim; (ii) makes no representation or warranty
and assumes no responsibility with respect to any statement, warranty or
representation made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement or any instrument or document furnished pursuant
thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto.

 

3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Administrative Agent, the Lead Arranger, the Assignor or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (iii) confirms that it is an
Eligible Assignee; (iv) appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (v) agrees that
it will perform in accordance with their terms all of the obligations which by
the

 

C-1

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terms of the Credit Agreement are required to be performed by it as a Lender;
(vi) confirms that none of the consideration used to make the purchase being
made by the Assignee hereunder are “plan assets” as defined under ERISA; and the
rights and interests of the Assignee in and under the Credit Agreement will not
be “plan assets” under ERISA; [and] (vii) specifies as its Domestic Lending
Office (and address for notices) and Eurodollar Lending Office the offices set
forth beneath its name on the signature pages hereof [;and (viii) attaches the
forms prescribed by the Internal Revenue Service of the United States certifying
that it is exempt from United States withholding taxes with respect to all
payments to be made to the Assignee under the Credit Agreement and the Notes].1

 

4. Following the execution of this Assignment and Acceptance by the Assignor and
the Assignee, it will be delivered to the Administrative Agent for acceptance by
the Borrower (if required) and the Administrative Agent and recording by the
Administrative Agent. The effective date of this Assignment and Acceptance shall
be the date of recording thereof by the Administrative Agent, unless otherwise
specified on Schedule 1 hereto (the “Effective Date”).

 

5. Upon such recording by the Administrative Agent, as of the Effective Date,
(i) the Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.

 

6. Upon such recording by the Administrative Agent, from and after the Effective
Date, the Administrative Agent shall make all payments under the Credit
Agreement in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and fees with respect thereto)
to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement for periods prior to the
Effective Date directly between themselves.

 

7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.

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

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

 

C-2

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

 

[NAME OF ASSIGNOR] By            

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

   

Name:

       

Title:

    [NAME OF ASSIGNEE] By            

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

   

Name:

       

Title:

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

Eurodollar Lending Office:

[Address]

 

C-3

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[Consented to this              day

of                     , 20    ]

 

EXELON GENERATION COMPANY, LLC By            

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

   

Name:

       

Title:

   

 

Consented to and Accepted this              day

of                     , 20    

 

BANK ONE, NA, as Administrative Agent By            

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

   

Name:

       

Title:

   

 

C-4

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Schedule 1

 

to

 

Assignment and Acceptance

 

Dated                     , 20    

 

Section 1.

      

Pro Rata Share:

                 %

Section 2.

      

Assignee’s Commitment Amount after giving effect hereto:

   $                     

Section 3.

      

Effective Date2:

                 , 20    

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2 This date should be no earlier than the date of recording by the
Administrative Agent.

 

C-5

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EXHIBIT D

 

FORM OF OPINION OF BALLARD SPAHR ANDREWS & INGERSOLL

 

September 29, 2003

 

To each of the Agents and the Lenders which is a

party to the Credit Agreement, dated as of

September 29, 2003, among Exelon Generation

Company, LLC, as Borrower, the various financial

institutions named therein, as Lenders and Bank

One, NA, as Administrative Agent

 

  Re: Credit Agreement

 

Ladies and Gentlemen:

 

This opinion letter is furnished to you pursuant to Section 3.01 of the Credit
Agreement, dated as of September 29, 2003 (the “Agreement”), among Exelon
Generation Company, LLC (the “Borrower”), as Borrower, the various financial
institutions named therein, as Lenders and Bank One, NA, as Administrative
Agent. Unless otherwise specified, terms defined in the Agreement are used
herein as therein defined.

 

We have acted as special counsel for the Borrower in connection with the
preparation, execution and delivery of the Agreement. In that capacity, we have
examined the following:

 

(i) The Agreement and the Notes;

 

(ii) The documents furnished by the Borrower pursuant to Section 3.01 of the
Agreement;

(iii) The Operating Agreement of the Borrower and all amendments thereto (the
“Operating Agreement”); and

 

(iv) A certificate of the Secretary of State of the Commonwealth of
Pennsylvania, dated September 23, 2003, attesting to the continued subsistence
of the Borrower in Pennsylvania on such dates (the “State Certificate”); and

 

(v) A certificate executed by the Secretary of the Borrower certifying that,
among other things, the Borrower has not filed any Certificate of Merger or
Consolidation or a Certificate of Dissolution since September 23, 2003 (the
“Secretary’s Certificate” and, together with the Operating Agreement and the
State Certificate, the “Corporate Documents”).

 

D-1

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We have also examined the originals, or copies certified to our satisfaction, of
such other corporate or organizational records of the Borrower, certificates of
public officials and of officers of the Borrower, and such other agreements,
instruments and documents as we have deemed necessary as a basis for the
opinions hereinafter expressed. We have assumed the legal capacity and
competence of natural persons, the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity to
original documents of documents submitted to us as certified, conformed or
photostatic copies. We have assumed that the Administrative Agent and the
Lenders have duly executed and delivered, with all necessary power and authority
(corporate and otherwise), the Agreement.

 

When an opinion or confirmation is given to our knowledge or with reference to
matters of which we are aware or which are known to us, or with another similar
qualification, the relevant knowledge or awareness is limited to the actual
knowledge or awareness of the lawyer in this firm who is the current primary
contact for the Borrower and the individual lawyers in this firm who have
participated in the specific transaction to which this opinion letter relates
and without any special or additional investigation undertaken for the purposes
of this opinion letter, except as otherwise noted herein. Based upon the
foregoing and subject to the exceptions, limitations and qualifications set
forth herein, we are of the following opinion:

 

1. In reliance on the Corporate Documents, the Borrower is a limited liability
company duly formed and validly subsisting under the laws of the Commonwealth of
Pennsylvania.

 

2. The execution, delivery and performance by the Borrower of the Agreement and
the Notes (a) are within the Borrower’s limited liability company powers, (b)
have been duly authorized by all necessary limited liability company action of
the Borrower, (c) do not contravene (i) the Operating Agreement, of the
Borrower, (ii) any law of the United States or the Commonwealth of Pennsylvania
or (iii) to our knowledge, any agreement or instrument to which the Borrower is
a party or by which the Borrower is bound and (d) to our knowledge, do not
result in or require the creation of any lien, security interest or other charge
or encumbrance upon or with respect to any of the Borrower’s properties under
such agreements or instruments.

 

3. No authorization, approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body of the United States or the
Commonwealth of Pennsylvania is required for the due execution, delivery and
performance by the Borrower of the Agreement or the Notes, except for the
authorization of the U.S. Securities and Exchange Commission under the Public
Utility Holding Company Act of 1935, which authorization has been received and
is in full force and effect.

 

4. The Agreement and the Notes have been duly executed and delivered by the
Borrower, and the Agreement and the Notes are the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
their respective terms.

 

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

 

D-2

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

We confirm to you that, to our knowledge, after inquiry of each lawyer in this
firm who is the current primary contact for the Borrower or who has devoted
substantive attention to matters on behalf of the Borrower during the preceding
twelve months and who is still currently employed by or a member of this firm,
except as disclosed in Exelon Corporation’s (“Exelon”) Annual Report on Form
10-K for the year ended December 31, 2002 or Exelon’s Quarterly Report on Form
10-Q for the quarter ended June 30, 2003, no litigation or governmental
proceeding is pending or threatened in writing against the Borrower (i) with
respect to the Agreement or the Notes, or (ii) which is likely to have a
Material Adverse Effect.

 

We draw to your attention the existence of the following two Pennsylvania
statutes in connection with the fact that the Advances bear floating rates of
interest:

 

(i) Section 911 of the Pennsylvania “Crime Code,” 18 Pa. C.S.A. §911, enacted by
the Act of December 6, 1972, P.L. 1482. Section 911 of the Crime Code bears a
close resemblance to certain of the provisions of the Federal Racketeer
Influenced and Corrupt Organizations Act of 1970, 18 U.S.C. §§1961-1968,
commonly known as RICO, and is referred to hereinafter as the “Pennsylvania RICO
Act.” The Pennsylvania RICO Act provides, among other things, that it is a
criminal offense, punishable as a felony, to “use or invest, directly or
indirectly ... in the acquisition of any interest in, or the establishment or
operation of, any enterprise” any income collected in full or partial
satisfaction of a loan made “at a rate of interest exceeding 25% per annum ...
.”

 

(ii) The Act of December 29, 1982, P.L. 1671, 18 Pa. C.S.A. §4806.1 et seq.
(superseded volume) (the “Criminal Usury Statute”). The Criminal Usury Statute
provides, among other things, that it is a criminal offense, punishable as a
felony, to engage in, “charging, taking or receiving any money ... on the loan
... of any money ... at a rate exceeding thirty-six percent per annum... .”

 

(iii) The Criminal Usury Statute may have been repealed, but the manner in which
the repeal was enacted leaves the matter subject to uncertainty.

 

Both the Pennsylvania RICO Act and the Criminal Usury Statute appear to be
intended by the legislature to apply only to racketeering and loan sharking type
activities, and not to the type of commercial loan transaction evidenced by the
Agreement. Nevertheless, in view of the plain language of the Pennsylvania
courts, we cannot say that the ultimate resolution of this issue is free from
doubt.

 

The foregoing opinions are subject to the following exceptions, limitations and
qualifications:

 

(a) Our opinions are subject to the effect of applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, fraudulent transfer or
similar laws affecting creditors’ rights and remedies generally, general
principles of equity, including without limitation, concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and
limitations on

 

D-3

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

enforceability of rights to indemnification by federal or state securities laws
or regulations or by public policy.

 

(b) We express no opinion as to the application or requirements of the
Pennsylvania Securities Act or federal or state securities, patent, trademark,
copyright, antitrust and unfair competition, pension or employee benefit, labor,
environmental health and safety or tax laws in respect of the transactions
contemplated by or referred to in the Agreement.

 

(c) We express no opinion as to the validity or enforceability of any provision
of the Agreement or the Notes which (i) permits the Lenders to increase the rate
of interest in the event of delinquency or default if such increase would be
deemed a penalty under applicable law; (ii) purports to be a waiver by the
Borrower of any right or benefit except to the extent permitted by applicable
law; (iii) purports to require that waivers must be in writing to the extent
that an oral agreement or implied agreement by trade practice or course of
conduct modifying provisions of the Agreement or the Notes has been made; (iv)
purports to exculpate any party from its own negligent acts; or (v) purports to
authorize any Participant to set off and apply any deposits at any time held,
and any other indebtedness at any time owing, by such Participant to or for the
account of the Borrower.

 

We express no opinion as to the law of any jurisdiction other than the law of
the Commonwealth of Pennsylvania and the federal law of the United States.

 

The foregoing opinions are solely for your benefit in connection with the
consummation of the transaction described herein and may not be used or relied
upon by you for any other purpose or by any other Person for any purpose without
our express written consent (except that any Eligible Assignee that may become a
Lender under the Agreement after the date hereof may rely on this opinion letter
as if it were an addressee hereof). The opinions given herein are as of the date
hereof, and we assume no obligation to update or supplement this opinion letter
to reflect facts or circumstances which may hereafter come to our attention or
any changes in laws which may hereafter occur.

 

Very truly yours,

 

BALLARD SPAHR ANDREWS & INGERSOLL

 

D-4

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EXHIBIT E

 

FORM OF ANNUAL AND QUARTERLY COMPLIANCE CERTIFICATE

 

                    , 20    

 

Pursuant to the Credit Agreement, dated as of September 29, 2003, among Exelon
Generation Company, LLC (the “Borrower”), various financial institutions and
Bank One, NA, as Administrative Agent (as amended, modified or supplemented from
time to time, the “Credit Agreement”), the undersigned hereby certifies as
follows:

 

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

 

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

 

3. (Check one and only one:)

 

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

 

     An Event of Default or Unmatured 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 Event of Default or Unmatured Event
of Default as well as any and all actions with respect thereto taken or
contemplated to be taken by the Borrower.

 

4. The undersigned has personally reviewed the Credit Agreement, and this
certificate was based on an examination made by or under the supervision of the
undersigned sufficient to assure that this certificate is accurate.

 

E-1

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

 

EXELON GENERATION COMPANY, LLC By        

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

Name:

       

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

Title:

       

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

 

Date:                     

 

E-2