CREDIT AGREEMENT

                                                             among

                                            PEPCO HOLDINGS, INC.,

                                                   BANK ONE, NA,
                                             as Administrative Agent,

                                                             and

                                            MERRILL LYNCH & CO.,

                                                as Syndication Agent

                              BANC ONE CAPITAL MARKETS, INC.,
                                           MERRILL LYNCH & CO.,
                               Co-Lead Arrangers and Co-Book Runners

                                           Dated as of August 1, 2002

                                                         CREDIT AGREEMENT

            This CREDIT AGREEMENT, dated as of August 1, 2002, is among Pepco
Holdings,
Inc. (the "Borrower"), various financial institutions (together with their
respective successors and
assigns, each a "Lender" and collectively the "Lenders") and Bank One, NA, a
national banking
association having its principal office in Chicago, Illinois, as administrative
agent.

            The parties hereto agree as follows:

                                                                   ARTICLE I

                                                                 DEFINITIONS

            1.1        Definitions. As used in this Agreement:

             "ACE" means Atlantic City Electric Company.

             "Administrative Questionnaire" means an administrative
questionnaire, substantially in
the form supplied by the Agent, completed by a Lender and furnished to the Agent
in connection
with this Agreement.

             "Advance" means a borrowing hereunder, (i) made by the Lenders on
the same
Borrowing Date, or (ii) converted or continued by the Lenders on the same date
of conversion or
continuation, consisting, in either case, of the aggregate amount of the several
Loans of the same
Type and, in the case of Eurodollar Loans, for the same Interest Period.

             "Affected Lender" is defined in Section 3.7.

             "Affiliate" of any Person means any other Person directly or
indirectly controlling,
controlled by or under common control with such Person. A Person shall be deemed
to control
another Person if the controlling Person owns 10% or more of any class of voting
securities (or
other ownership interests) of the controlled Person or possesses, directly or
indirectly, the power
to direct or cause the direction of the management or policies of the controlled
Person, whether
through ownership of stock, by contract or otherwise.

            "Agent" means Bank One in its capacity as contractual representative
of the Lenders
pursuant to Article X, and not in its individual capacity as a Lender, and any
successor Agent
appointed pursuant to Article X.

            "Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders,
as reduced from time to time pursuant to the terms hereof.

            "Agreement" means this Credit Agreement.

             "Agreement Accounting Principles" means generally accepted
accounting principles as
in effect from time to time, applied in a manner consistent with that used in
preparing the
financial statements referred to in Section 5.4.

             "Alternate Base Rate" means, for any day, a rate of interest per
annum equal to the
higher of (i) the Prime Rate for such day and (ii) the sum of the Federal Funds
Effective Rate for
such day plus 0.5%.

             "Applicable Margin" means, with respect to Eurodollar Advances at
any time, the
percentage rate per annum which is applicable at such time with respect to
Eurodollar Advances
in accordance with the provisions of the Pricing Schedule.

             "Arrangers" means BOCM, Merrill Lynch, Pierce, Fenner & Smith,
Incorporated and
Merrill Lynch & Co. and their respective successors, in their capacity as
Co-Lead Arrangers and
Co-Book Runners.

             "Asset Sale" means the sale, lease, assignment or other transfer
for value by the
Borrower or any Subsidiary to any Person (other than the Borrower or any
Subsidiary) of any
asset or right of the Borrower or such Subsidiary (including any sale or other
transfer of stock of
any Subsidiary, whether by merger, consolidation or otherwise), excluding (a)
any sale, lease,
assignment or other transfer in the ordinary course of business and (b) any
Permitted ACE Asset
Sale, Permitted DPL Asset Sale, Permitted PEPCO Distribution or Permitted PHI
Asset Sale
(each as defined in the Other Credit Agreement as in effect on the date hereof).

             "Assignment Agreement" means an agreement substantially in the form
of Exhibit C.

             "Authorized Officer" means any of the President, any Vice
President, the Chief
Financial Officer, the Treasurer or any Assistant Treasurer of the Borrower,
acting singly.

             "Bank One" means Bank One, NA, a national banking association
having its principal
office in Chicago, Illinois, in its individual capacity, and its successors.

             "BOCM" means Bank One Capital Markets, Inc.

             "Borrower" is defined in the preamble.

             "Borrowing Date" means a date on which an Advance is made
hereunder.

             "Borrowing Notice" is defined in Section 2.9.

             "Business Day" means (i) with respect to any borrowing, payment or
rate selection of
Eurodollar Advances, a day (other than a Saturday or Sunday) on which banks
generally are
open in Chicago and New York for the conduct of substantially all of their
commercial lending
activities, interbank wire transfers can be made on the Fedwire system and
dealings in United
States dollars are carried on in the London interbank market and (ii) for all
other purposes, a day
(other than a Saturday or Sunday) on which banks generally are open in Chicago
for the conduct
of substantially all of their commercial lending activities and interbank wire
transfers can be
made on the Fedwire system.

             "Capitalized Lease" of a Person means any lease of Property by such
Person as lessee
which would be capitalized on a balance sheet of such Person prepared in
accordance with
Agreement Accounting Principles.

             "Capitalized Lease Obligations" of a Person means the amount of the
obligations of such
Person under Capitalized Leases which would be shown as a liability on a balance
sheet of such
Person prepared in accordance with Agreement Accounting Principles.

             "Change in Control" means an event or series of events by which (a)
any Person, or two
or more Persons acting in concert, acquire beneficial ownership (within the
meaning of Rule
13d-3 of the SEC under the Securities Exchange Act of 1934) of 30% or more (by
number of
votes) of the outstanding shares of Voting Stock of the Borrower; or (b)
individuals who on the
date of the closing of (and after giving effect to) the Merger Transactions were
directors of the
Borrower (the "Approved Directors") shall cease for any reason to constitute a
majority of the
board of directors of the Borrower; provided that any individual becoming a
member of such
board of directors subsequent to such date whose election or nomination for
election by the
Borrower's shareholders was approved by a majority of the Approved Directors
shall be deemed
to be an Approved Director, but excluding, for this purpose, any such individual
whose initial
assumption of office occurs as a result of an actual or threatened solicitation
of proxies or
consents for the election or removal of one or more directors by any Person, or
two or more
Persons acting in concert, other than a solicitation for the election of one or
more directors by or
on behalf of the board of directors.

             "Closing Date" means the date on which all conditions precedent to
the making of the
initial Advance have been satisfied.

             "Code" means the Internal Revenue Code of 1986.

             "Commitment" means, for each Lender, the obligation of such Lender
to make Loans in
an aggregate amount not exceeding the amount set forth on Schedule 2 or as set
forth in any
Assignment Agreement relating to any assignment that has become effective
pursuant to Section
12.3.2, as such amount may be modified from time to time pursuant to the terms
hereof.

             "Conectiv" means Conectiv, a Delaware corporation.

             "Contingent Obligation" of a Person means any agreement,
undertaking or arrangement
by which such Person assumes, guarantees, endorses, contingently agrees to
purchase or provide
funds for the payment of, or otherwise becomes or is contingently liable upon,
the obligation or
liability of any other Person, or agrees to maintain the net worth or working
capital or other
financial condition of any other Person, or otherwise assures any creditor of
such other Person
against loss, including any comfort letter, operating agreement, take or pay
contract, application
for a letter of credit or the obligations of any such Person as general partner
of a partnership with
respect to the liabilities of such partnership; provided that Contingent
Obligations shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business.
The amount of any Contingent Obligation shall be deemed equal to the stated or
determinable
amount of the primary obligation of such other Person or, if such amount is not
stated or is
indeterminable, the maximum reasonably anticipated liability of such Person in
respect thereof.

             "Controlled Group" means all members of a controlled group of
corporations or other
business entities and all trades or businesses (whether or not incorporated)
under common
control which, together with the Borrower or any Subsidiary, are treated as a
single employer
under Section 414 of the Code.

             "Conversion/Continuation Notice" is defined in Section 2.10.

             "Debt Issuance" means any issuance of Indebtedness by the Borrower
or any Subsidiary
other than (a) Indebtedness secured by Liens described in Section 6.12(xvi), (b)
commercial
paper, (c) Nonrecourse Transition Bond Debt, (d) Nonrecourse Indebtedness and
(e)
Indebtedness arising under the Other Credit Agreement.

             "Default" means an event described in Article VII.

             "DPL" means Delmarva Power & Light Company, a Delaware and Virginia
corporation.

             "Environmental Laws" means any and all federal, state, local and
foreign statutes, laws,
judicial decisions, regulations, ordinances, rules, judgments, orders, decrees,
plans, injunctions,
permits, concessions, grants, franchises, licenses, agreements and other
governmental restrictions
relating to (i) the protection of the environment, (ii) the effect of the
environment on human
health, (iii) emissions, discharges or releases of pollutants, contaminants,
hazardous substances
or wastes into surface water, ground water or land, or (iv) the manufacture,
processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants,
hazardous substances or wastes or the clean-up or other remediation thereof.

             "Equity Issuance" means the issuance of equity securities or
interests by the Borrower or
any Subsidiary (other than issuances of equity securities or interests by any
Subsidiary to the
Borrower or any other Subsidiary).

             "ERISA" means the Employee Retirement Income Security Act of 1974.

             "Eurodollar Advance" means an Advance which, except as otherwise
provided in
Section 2.11, bears interest at the applicable Eurodollar Rate.

             "Eurodollar Base Rate" means, with respect to a Eurodollar Advance
for the relevant
Interest Period, the applicable British Bankers' Association Interest Settlement
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 such Interest Period, and having a maturity equal
to such Interest
Period, provided that (i) if Reuters Screen FRBD is not available to the Agent
for any reason, the
applicable Eurodollar Base Rate for the relevant Interest Period shall instead
be the applicable
British Bankers' Association Interest Settlement Rate for deposits in U.S.
dollars as reported by
any other generally recognized financial information service as of 11:00 a.m.
(London time) two
Business Days prior to the first day of such Interest Period, and having a
maturity equal to such
Interest Period, and (ii) if no such British Bankers' Association Interest
Settlement Rate is
available to the Agent, the applicable Eurodollar Base Rate for the relevant
Interest Period shall
instead be the rate determined by the Agent to be the rate at which Bank One or
one of its
Affiliate banks offers to place deposits in U.S. dollars with first-class banks
in the London
interbank market at approximately 11:00 a.m. (London time) two Business Days
prior to the first
day of such Interest Period, in the approximate amount of Bank One's relevant
Eurodollar Loan
and having a maturity equal to such Interest Period.

             "Eurodollar Loan" means a Loan which, except as otherwise provided
in Section 2.12,
bears interest at the applicable Eurodollar Rate.

             "Eurodollar Rate" means, with respect to a Eurodollar Advance for
the relevant Interest
Period, the sum of (i) the quotient of (a) the Eurodollar Base Rate applicable
to such Interest
Period, divided by (b) one minus the Reserve Requirement (expressed as a
decimal) applicable to
such Interest Period, plus (ii) the Applicable Margin.

             "Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation
and the Agent, taxes imposed on its overall net income, and franchise taxes
imposed on it, by
(i) the jurisdiction under the laws of which such Lender or the Agent is
incorporated or organized
or (ii) the jurisdiction in which such Lender's or the Agent's principal
executive office or such
Lender's applicable Lending Installation is located.

             "Facility Fee Rate" means, at any time, the "Facility Fee Rate"
applicable at such time in
accordance with the provisions of the Pricing Schedule.

             "Facility Termination Date" means July 30, 2003 or any earlier date
on which the
Aggregate Commitment is reduced to zero or the obligation of the Lenders to make
Loans to the
Borrower is terminated pursuant to Section 8.1.

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

             "Floating Rate Advance" means an Advance which, except as otherwise
provided in
Section 2.12, bears interest at the Alternate Base Rate.

             "Floating Rate Loan" means a Loan which, except as otherwise
provided in Section
2.12, bears interest at the Alternate Base Rate.

             "FRB" means the Board of Governors of the Federal Reserve System
and any successor
thereto.

             "Granting Lender" is defined in Section 12.5.

             "Indebtedness" of a Person means, without duplication, such
Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
Property or services
(other than accounts payable arising in the ordinary course of such Person's
business payable on
terms customary in the trade), (iii) obligations, whether or not assumed,
secured by Liens or
payable out of the proceeds or production from Property now or hereafter owned
or acquired by
such Person, (iv) obligations which are evidenced by notes, bonds, debentures,
acceptances, or
similar instruments, (v) obligations of such Person to purchase accounts,
securities or other
Property arising out of or in connection with the sale of the same or
substantially similar
accounts, securities or Property, (vi) Capitalized Lease Obligations, (vii) net
liabilities under
interest rate swap, exchange or cap agreements, obligations or other liabilities
with respect to
accounts or notes, (viii) obligations under any Synthetic Lease which, if such
Synthetic Lease
were accounted for as a Capitalized Lease, would appear on a balance sheet of
such Person, (ix)
unpaid reimbursement obligations in respect of letters of credit issued for the
account of such
Person and (x) Contingent Obligations in respect of Indebtedness of the types
described above.

             "Intangible Transition Property" means assets described as
"bondable transition
property" in the New Jersey Transition Bond Statute.

             "Interest Period" means, with respect to a Eurodollar Advance, a
period of one, two,
three or six months commencing on a Business Day selected by the Borrower
pursuant to this
Agreement. Such Interest Period shall end on the day which corresponds
numerically to such
date one, two, three or six months thereafter, provided that if there is no such
numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period
shall end on the last Business Day of such next, second, third or sixth
succeeding month. If an
Interest Period would otherwise end on a day which is not a Business Day, such
Interest Period
shall end on the next succeeding Business Day, provided that if said next
succeeding Business
Day falls in a new calendar month, such Interest Period shall end on the
immediately preceding
Business Day. The Borrower may not select an Interest Period which ends after
the scheduled
Facility Termination Date.

             "Lender" is defined in the preamble.

             "Lending Installation" means, with respect to a Lender, the office,
branch, subsidiary or
affiliate of such Lender specified as such in its Administrative Questionnaire
or otherwise
selected by such Lender pursuant to Section 2.18.

             "Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment,
deposit arrangement, encumbrance or preference, priority or other security
agreement or
preferential arrangement of any kind or nature whatsoever (including the
interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement, but
excluding the interest of a lessor under any operating lease).

             "Loan" means, with respect to a Lender, any loan made by such
Lender pursuant to
Article II (or any conversion or continuation thereof).

             "Loan Documents" means this Agreement and any Notes issued pursuant
to Section
2.14.

             "Material Adverse Effect" means a material adverse effect on (i)
the business, Property,
financial condition, or results of operations of the Borrower and its
Subsidiaries taken as a
whole, (ii) the ability of the Borrower to perform its obligations under
the Loan Documents, or
(iii) the validity or enforceability of any of the Loan Documents or the rights
or remedies of the
Agent or the Lenders thereunder; provided that in no event shall any Permitted
ACE Asset Sale,
Permitted PHI Asset Sale, Permitted DPL Asset Sale or Permitted PEPCO
Distribution (each as
defined in the Other Credit Agreement as in effect on the date hereof),
individually or in the
aggregate, be deemed to cause or result in a Material Adverse Effect.

             "Material Indebtedness" is defined in Section 7.5.

             "Maturity Date" means the scheduled Facility Termination Date or
such earlier date on
which the Obligations of the Borrower become due and payable pursuant to Section
8.1.

             "Merger Agreement" means the Agreement and Plan of Merger dated as
of February 9,
2001 among PEPCO, the Borrower and Conectiv.

             "Merger Transactions" means the merger of a wholly-owned subsidiary
of the Borrower
with and into PEPCO and the merger of a separate wholly-owned subsidiary of the
Borrower
with and into Conectiv, in each case substantially on the terms set forth in the
Merger
Agreement.

             "Moody's" means Moody's Investors Service, Inc.

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

             "Net Cash Proceeds" means:

             (a)      with respect to any Asset Sale, the aggregate cash
proceeds (including cash
proceeds received by way of deferred payment of principal pursuant to a note,
installment
receivable or otherwise, but only as and when received) received by the Borrower
or any
Subsidiary pursuant to such Asset Sale, net of (i) the direct costs relating to
such Asset Sale
(including sales commissions and legal, accounting and investment banking fees),
(ii) taxes paid
or payable as a result thereof (after taking into account any available tax
credit or deduction and
any tax sharing arrangement), (iii) amounts required to be applied to the
repayment of any
Indebtedness secured by a Lien on the asset subject to such Asset Sale, (iv) in
the case of the sale
of the stock of any Subsidiary, any Indebtedness of such Subsidiary which is
required to be
repaid as a result of or in connection with such sale (other than obligations
hereunder) and (v)
any reserve for adjustment in respect of the sale price of such asset (until
such amount is
available to the Borrower or the applicable Subsidiary); and

             (b)      with respect to any Debt Issuance or Equity Issuance, the
aggregate cash proceeds
received by the Borrower or any Subsidiary pursuant to such issuance, net of the
direct costs
relating to such issuance (including filing costs, sales and underwriter's
commissions and legal,
accounting and investment banking fees).

             "Net Worth" means at any time the sum, without duplication, at such
time of (a) the
Borrower's stockholders' equity plus (b) all Preferred Stock of the Borrower
(excluding any
Preferred Stock which is mandatorily redeemable on or prior to the scheduled
Facility
Termination Date) plus (c) all Trust Preferred Securities of the Borrower or any
of its
Subsidiaries.

             "New Jersey Transition Bond Statute" means the New Jersey Electric
Discount and
Energy Corporation Act as in effect on the date hereof.

            "Nonrecourse Indebtedness" means Indebtedness of the Borrower or any
Subsidiary
(excluding Nonrecourse Transition Bond Debt) secured by a Lien on the Property
of the
Borrower or such Subsidiary, as the case may be, the sole recourse for the
payment of which is
such Property and where neither the Borrower nor any of its Subsidiaries is
liable for any
deficiency after the application of the proceeds of such Property.

             "Nonrecourse Transition Bond Debt" means obligations evidenced by
Transition Bonds
rated investment grade or better by S&P or Moody's, representing a
securitization of Intangible
Transition Property as to which obligations neither the Borrower nor any
Subsidiary of the
Borrower (other than a Special Purpose Subsidiary) has any direct or indirect
liability (whether
as primary obligor, guarantor, surety, provider of collateral security, through
a put option, asset
repurchase agreement, capital maintenance agreement or debt subordination
agreement, or
through any other right or arrangement of any nature providing direct or
indirect assurance of
payment or performance of any such obligation in whole or in part), except for
liability to
repurchase Intangible Transition Property conveyed to the securitization
vehicle, on terms and
conditions customary in receivables securitizations, in the event such
Intangible Transition
Property violates representations and warranties of scope customary in
receivables
securitizations.

             "Non-U.S. Lender" is defined in Section 3.5(iv).

             "Note" means any promissory note substantially in the form of
Exhibit C issued at the
request of a Lender pursuant to Section 2.14.

             "Obligations" means all unpaid principal of and accrued and unpaid
interest on the
Loans, all accrued and unpaid fees and all expenses, reimbursements, indemnities
and other
obligations of the Borrower to the Agent or to any Lender or any other
Indemnified Party arising
under the Loan Documents.
             "Other Credit Agreement" means the Credit Agreement dated as of the
date hereof
among the Borrower, PEPCO, DPL, ACE, various lenders and Bank One, as
administrative
agent.

             "Other Taxes" is defined in Section 3.5(ii).

             "Participants" is defined in Section 12.2.1.

             "Payment Date" means the last Business Day of each March, June,
September and
December.

             "PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.

             "PCI" means Potomac Capital Investment Corporation.

             "PEPCO" means Potomac Electric Power Company.

             "Person" means any natural person, corporation, firm, joint
venture, partnership, limited
liability company, association, enterprise, trust or other entity or
organization, or any government
or political subdivision or any agency, department or instrumentality thereof.

             "Plan" means an employee pension benefit plan which is covered by
Title IV of ERISA
or subject to the minimum funding standards under Section 412 of the Code as to
which the
Borrower or any other member of the Controlled Group may have any liability.

             "Preferred Stock" means, with respect to any Person, equity
interests issued by such
Person that are entitled to a preference or priority over any other equity
interests issued by such
Person upon any distribution of such Person's property and assets, whether by
dividend or upon
liquidation.

             "Pricing Schedule" means Schedule 1 hereto.

             "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, from time to time, changing
when and as such
prime rate changes.

             "Property" of a Person means any and all property, whether real,
personal, tangible,
intangible, or mixed, of such Person, or other assets owned, leased or operated
by such Person.

             "Pro Rata Share" means, with respect to any Lender, the percentage
which such Lender's
Commitment constitutes of the Aggregate Commitment (or, if the Commitments have
terminated, the percentage which such Lender's Loans constitutes of the
aggregate principal
amount of all Loans). The initial Pro Rata Share of each Lender is set forth on
Schedule 2.

             "Public Reports" means (i) the annual reports on Form 10-K of each
of PEPCO, DPL
and ACE for the year ended December 31, 2001; (ii) the quarterly reports on Form
10-Q filed
with the SEC by PEPCO on May 10, 2002, by DPL on May 15, 2002 and by ACE on May
15,
2002; and (iii) the Borrower's Form 8-K filed with the SEC on June 7, 2002.

             "PUHCA" means the Public Utility Holding Company Act of 1935.

             "Purchasers" is defined in Section 12.3.1.

             "Reportable Event" means a reportable event as defined in Section
4043 of ERISA, with
respect to a Plan, excluding, however, such events as to which the PBGC has 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 of Section 302 of ERISA shall be a Reportable Event
regardless of
the issuance of any such waiver of the notice requirement in accordance with
either Section
4043(a) of ERISA or Section 412(d) of the Code.

             "Required Lenders" means Lenders in the aggregate having at least
51% of the
Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the
aggregate holding at least 51% of the aggregate unpaid principal amount of the
outstanding
Advances.

             "Reserve Requirement" means, with respect to an Interest Period,
the maximum
aggregate reserve requirement (including all basic, supplemental, marginal and
other reserves)
which is imposed under Regulation D of the FRB on Eurocurrency liabilities.

             "S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill
Companies, Inc.

             "SEC" means the Securities and Exchange Commission.

             "Securitization Transaction" means any sale, assignment or other
transfer by the
Borrower or any Subsidiary of accounts receivable or other payment obligations
owing to the
Borrower or any Subsidiary or any interest in any of the foregoing, together in
each case with
any collections and other proceeds thereof, any collection or deposit accounts
related thereto, and
any collateral, guaranties or other property or claims in favor of the Borrower
or such Subsidiary
supporting or securing payment by the obligor thereon of, or otherwise related
to, any such
receivables.

             "Significant Subsidiary" means a "significant subsidiary" (as
defined in Regulation S-X
of the SEC as in effect on the date of this Agreement) of the Borrower; provided
that after the
consummation of the Merger Transactions, each of PEPCO, DPL and ACE shall at all
times be a
Significant Subsidiary of the Borrower.

             "Single Employer Plan" means a Plan maintained by the Borrower or
any member of the
Controlled Group for employees of the Borrower or any member of the Controlled
Group.

             "SPC" is defined in Section 12.5.

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

             "Subsidiary" of a Person means (i) any corporation more than 50% of
the outstanding
securities having ordinary voting power of which shall at the time be owned or
controlled,
directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and
one or more of its Subsidiaries, or (ii) any partnership, limited liability
company, association,
business trust, joint venture or similar business organization more than 50% of
the ownership
interests having ordinary voting power of which shall at the time be so owned or
controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a
Subsidiary of the Borrower.

             "Substantial Portion" means, at any time with respect to the
Property of any Person,
Property which represents more than 10% of the consolidated assets of such
Person and its
Subsidiaries as shown in the consolidated financial statements of such Person
and its
Subsidiaries as at the last day of the preceding fiscal year of such Person.

             "Synthetic Lease" means (a) a so-called synthetic, off-balance
sheet or tax retention
lease or (b) any other agreement pursuant to which a Person obtains the use or
possession of
property and which creates obligations that do not appear on the balance sheet
of such Person but
which, upon the insolvency or bankruptcy of such Person, would be characterized
as
indebtedness of such Person (without regard to accounting treatment).

             "Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions,
charges or withholdings, and any and all liabilities with respect to the
foregoing which arise from
or relate to any payment made hereunder or under any Note, but excluding
Excluded Taxes and
Other Taxes.

             "Total Capitalization" means at any time the sum of Total
Indebtedness and Net Worth,
each calculated at such time.

             "Total Indebtedness" means at any time all Indebtedness of the
Borrower and its
Subsidiaries at such time determined on a consolidated basis in accordance with
Agreement
Accounting Principles, excluding to the extent otherwise included in
Indebtedness of the
Borrower or any Subsidiary, (a) debentures issued in connection with Trust
Preferred Securities;
(b) any Nonrecourse Transition Bond Debt; (c) any Nonrecourse Indebtedness
listed on Schedule
6; (d) to the extent it constitutes Nonrecourse Indebtedness, any Indebtedness
secured by Liens
described in clause (e), (f) or (g) of the definition of Permitted PHI Liens in
the Other Credit
Agreement; (e) any other Nonrecourse Indebtedness of the Borrower and its
Subsidiaries to the
extent that the aggregate amount of such Nonrecourse Indebtedness does not
exceed
$200,000,000; and (f) the amount of any medium term notes issued by PCI (but not
more than
the fair market value of the equity collateral accounts in PCI's energy
leveraged lease portfolio).
             "Transferee" is defined in Section 12.4.

             "Transition Bonds" means bonds described as "transition bonds" in
the New Jersey
Transition Bond Statute.

             "Trust Preferred Securities" means the securities described on
Schedule 3.

             "Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or a
Eurodollar Advance.

            "Unmatured Default" means an event which but for the lapse of time
or the giving of
notice, or both, would constitute a Default.

            "Utilization Fee Rate" means, at any time, the "Utilization Fee
Rate" applicable at such
time in accordance with the provisions of the Pricing Schedule.

             "Voting Stock" means, with respect to any Person, voting stock of
any class or kind
ordinarily having the power to vote for the election of directors, managers or
other voting
members of the governing body of such Person.

            1.2      Interpretation.

            (a)      The meanings of defined terms are equally applicable to the
singular and plural
forms of such terms.

            (b)      Article, Section, Schedule and Exhibit references are to
this Agreement unless
otherwise specified.

            (c)      The term "including" is not limiting and means "including
without limitation."

            (d)      In the computation of periods of time from a specified date
to a later specified
date, the word "from" means "from and including"; the words "to" and "until"
each mean "to but
excluding", and the word "through" means "to and including."

            (e)      Unless otherwise expressly provided herein, (i) references
to agreements
(including this Agreement) and other contractual instruments shall be deemed to
include all
subsequent amendments and other modifications thereto, but only to the extent
such amendments
and other modifications are not prohibited by the terms of this Agreement, and
(ii) references to
any statute or regulation are to be construed as including all statutory and
regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such statute
or regulation.

            1.3      Accounting.

            (a)      Except as provided to the contrary herein, all accounting
terms used herein shall be
interpreted and all accounting determinations hereunder shall be made in
accordance with
Agreement Accounting Principles, except that any calculation or determination
which is to be
made on a consolidated basis shall be made for the Borrower and all of its
Subsidiaries,
including those Subsidiaries of the Borrower, if any, which are unconsolidated
on the Borrower's
audited financial statements.

            (b)      If at any time any change in Agreement Accounting
Principles would affect the
computation of any financial ratio or requirement set forth herein with respect
to the Borrower
and either the Borrower or the Required Lenders shall so request, the 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 Agreement Accounting
Principles (subject to the
approval of the Required Lenders); provided that, until so amended, (i) such
ratio or requirement
shall continue to be computed in accordance with Agreement Accounting Principles
as in effect
prior to such change and (ii) the Borrower shall provide to the Agent and the
Lenders financial
statements and other documents required under this Agreement setting forth a
reconciliation
between calculations of such ratio or requirement made before and after giving
effect to such
change in Agreement Accounting Principles.

                                                                 ARTICLE II

                                                              THE CREDITS

            2.1      Commitment. Each Lender severally agrees, on the terms and
conditions set forth
in this Agreement, to make Loans to the Borrower in amounts not to exceed in the
aggregate at
any one time outstanding the amount of such Lender's Commitment; provided that
the aggregate
principal amount of all Loans by such Lender shall not exceed such Lender's Pro
Rata Share of
the aggregate principal amount of all Loans. Within the foregoing limits, the
Borrower may
from time to time borrow, prepay pursuant to Section 2.8 and reborrow hereunder
prior to the
Facility Termination Date.

            2.2      Required Payments; Termination  All outstanding Advances
and all other unpaid
Obligations shall be paid in full by the Borrower on the Maturity Date.

            2.3      Ratable Loans.  Each Advance hereunder shall be made by the
Lenders ratably in
accordance with their Pro Rata Shares.

            2.4      Types of Advances. The Advances may be Floating Rate
Advances or Eurodollar
Advances, or a combination thereof, as selected by the Borrower in accordance
with Sections 2.9
and 2.10.

            2.5      Fees

            (a)      Facility Fee. The Borrower agrees to pay to the Agent for
the account of the
Lenders according to their Pro Rata Shares a facility fee at a per annum rate
equal to the Facility
Fee Rate on the average daily amount of the Aggregate Commitment (or, if the
obligations of the
Lenders to make Loans have been terminated, on the principal amount of the
outstanding
Advances). The facility fee shall accrue from the Closing Date to the Facility
Termination Date
(or, if later, to the date all of the Borrower's Obligations have been paid in
full) and shall be
payable on each Payment Date and on the Facility Termination Date (and, if
applicable,
thereafter on demand).

            (c)      Utilization Fee. The Borrower agrees to pay to the Agent
for the account of the
Lenders according to their Pro Rata Shares a utilization fee, for each day on
which the
outstanding Loans exceed 33-1/3% of the Aggregate Commitment, at a rate per
annum equal to
the Utilization Fee Rate on the outstanding Loans on such day, payable on each
Payment Date
and on the Facility Termination Date.

            (c)      Commitment Fee. If the Facility Termination Date has not
occurred on or before
January 27, 2002, the Borrower agrees to pay to the Agent on such date, for the
ratable benefit
of the Lenders, a commitment fee equal to 0.10% of the Aggregate Commitment as
in effect on
such date.

            2.6      Reductions in Aggregate Commitment

            (a)      Optional. The Borrower may permanently reduce the Aggregate
Commitment in
whole, or in part ratably among the Lenders in accordance with their Pro Rata
Shares, and in
integral multiples of $10,000,000, upon at least five Business Days' written
notice to the Agent,
which notice shall specify the amount of any such reduction, provided that the
amount of the
Aggregate Commitment may not be reduced below the amount of the outstanding
Advances.

            (b)      Mandatory. Concurrently with the receipt by the Borrower or
any Subsidiary of
the Net Cash Proceeds of any Asset Sale, Debt Issuance or Equity Issuance, the
Aggregate
Commitment shall be reduced by an amount (rounded down, if necessary, to an
integral multiple
of $1,000,000) equal to (a) the aggregate amount of all Net Cash Proceeds
received by the
Borrower or any Subsidiary since the date of this Agreement minus (b) all such
Net Cash
Proceeds previously applied to reduce the Aggregate Commitment pursuant to this
clause (b).

            2.7      Minimum Amount of Each Advance. Each Advance shall be in
the amount of
$10,000,000 or a higher integral multiple of $1,000,000, provided that any
Floating Rate
Advance may be in the amount of the unused Aggregate Commitment.

            2.8      Prepayments. (a) The Borrower may from time to time prepay,
without penalty or
premium, all outstanding Floating Rate Advances or, in the amount of $10,000,000
or a higher
integral multiple of $1,000,000, any portion of the outstanding Floating Rate
Advances upon
notice to the Agent not later than 10:00 a.m. (Chicago time) on any Business
Day. The Borrower
may from time to time prepay, subject to the payment of any funding
indemnification amounts
required by Section 3.4 but without penalty or premium, all outstanding
Eurodollar Advances or,
in the amount of $10,000,000 or a higher integral multiple of $1,000,000, any
portion of the
outstanding Eurodollar Advances upon three Business Days' prior notice to the
Agent.

            (b)      If, after giving effect to any reduction in the Aggregate
Commitment pursuant to
Section 2.6(b), the aggregate principal amount of the outstanding Advances
exceeds the
Aggregate Commitment, then the Borrower shall immediately prepay Advances in an
amount
equal to such excess (rounded upward, if necessary, to an integral multiple of
$1,000,000).

            2.9      Method of Selecting Types and Interest Periods for New
Advances. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Advance, the
Interest Period applicable thereto from time to time. The Borrower shall give
the Agent
irrevocable notice (a "Borrowing Notice") not later than 10:00 a.m. (Chicago
time) on the
Borrowing Date of each Floating Rate Advance and three Business Days before the
Borrowing
Date for each Eurodollar Advance, specifying:

            (i)       the Borrowing Date, which shall be a Business Day, of such
Advance,

            (ii)       the aggregate amount of such Advance,

            (iii)      the Type of Advance selected, and

            (iv)      in the case of each Eurodollar Advance, the Interest
Period applicable thereto.

Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available
its Loan or Loans in funds immediately available in Chicago to the Agent at its
address specified
pursuant to Article XIII. The Agent will promptly make the funds so received
from the Lenders
available to the Borrower at the Agent's aforesaid address.

            2.10      Conversion and Continuation of Outstanding Advance 
Floating Rate Advances
shall continue as Floating Rate Advances unless and until such Floating Rate
Advances are
converted into Eurodollar Advances pursuant to this Section 2.10 or are repaid
in accordance
with Section 2.8. Each Eurodollar Advance shall continue as a Eurodollar Advance
until the end
of the then applicable Interest Period therefor, at which time such Eurodollar
Advance shall be
automatically converted into a Floating Rate Advance unless (x) such Eurodollar
Advance is or
was repaid in accordance with Section 2.8 or (y) the Borrower shall have given
the Agent a
Conversion/Continuation Notice requesting that, at the end of such Interest
Period, such
Eurodollar Advance continue as a Eurodollar Advance for a subsequent Interest
Period. Subject
to the terms of Section 2.7, the Borrower may elect from time to time to convert
all or any part of
a Floating Rate Advance into a Eurodollar Advance. The Borrower shall give the
Agent
irrevocable notice (a "Conversion/Continuation Notice") of each conversion of a
Floating Rate
Advance into a Eurodollar Advance or continuation of a Eurodollar Advance not
later than 10:00
a.m. (Chicago time) at least three Business Days prior to the date of the
requested conversion or
continuation, specifying:

            (i)       the requested date, which shall be a Business Day, of such
conversion or
                       continuation,

            (ii)      the aggregate amount and Type of the Advance which is to
be converted or
                       continued, and

            (iii)     the amount of such Advance which is to be converted into
or continued as a
                       Eurodollar Advance and the duration of the Interest
Period applicable thereto.

            2.11      Changes in Interest Rate, etc. Each Floating Rate Advance
shall bear interest on
the outstanding principal amount thereof, for each day from the date such
Advance is made or is
converted from a Eurodollar Advance into a Floating Rate Advance pursuant to
Section 2.10, to
the date it is paid or is converted into a Eurodollar Advance pursuant to
Section 2.10, at a rate
per annum equal to the Alternate Base Rate for such day. Changes in the rate of
interest on that
portion of any Advance maintained as a Floating Rate Advance will take effect
simultaneously
with each change in the Alternate Base Rate. Each Eurodollar Advance shall bear
interest on the
outstanding principal amount thereof from the first day of each Interest Period
applicable thereto
to the last day of such Interest Period at the Eurodollar Rate applicable to
such Eurodollar
Advance based upon the Borrower's selections under Sections 2.9 and 2.10 and
otherwise in
accordance with the terms hereof.

            2.12      Rates Applicable After Default. Notwithstanding anything
to the contrary
contained in Section 2.9 or 2.10, during the continuance of a Default or
Unmatured Default the
Required Lenders may, at their option, by notice to the Borrower (which notice
may be revoked
at the option of the Required Lenders notwithstanding any provision of Section
8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that no
Advance may be
made as, converted into or continued as a Eurodollar Advance. During the
continuance of a
Default the Required Lenders may, at their option, by notice to the Borrower
(which notice may
be revoked at the option of the Required Lenders notwithstanding any provision
of Section 8.2
requiring unanimous consent of the Lenders to changes in interest rates),
declare that (i) each
Eurodollar Advance shall bear interest for the remainder of the applicable
Interest Period at the
rate otherwise applicable to such Interest Period plus 2% per annum and (ii)
each Floating Rate
Advance shall bear interest at a rate per annum equal to the Alternate Base Rate
in effect from
time to time plus 2% per annum, provided that during the continuance of a
Default under Section
7.6 or 7.7, the interest rates set forth in clauses (i) and (ii) above shall be
applicable to all
Advances without any election or action on the part of the Agent or any Lender.

            2.13      Method of Payment All payments of the Obligations
hereunder shall be made,
without setoff, deduction, or counterclaim, in immediately available funds to
the Agent at the
Agent's address specified pursuant to Article XIII, or at any other office of
the Agent specified
in writing by the Agent to the Borrower, by noon (Chicago time) on the date when
due and shall
be applied ratably by the Agent among the Lenders. Each payment delivered to the
Agent for the
account of any Lender shall be delivered promptly by the Agent to such Lender in
the same type
of funds that the Agent received at its address specified pursuant to Article
XIII or at any
Lending Installation specified in a notice received by the Agent from such
Lender. The Agent is
hereby authorized to charge the account of the Borrower maintained with Bank One
for each
payment of principal, interest and fees as it becomes due hereunder.

            2.14      Noteless Agreement; Evidence of Indebtedness (a) Each
Lender shall maintain
in accordance with its usual practice an account or accounts evidencing the
indebtedness of the
Borrower to such Lender resulting from each Loan made by such Lender from time
to time,
including the amounts of principal and interest payable and paid to such Lender
from time to
time hereunder.

            (b)       The Agent shall also maintain accounts in which it will
record (i) the amount of
each Loan made hereunder, the Type thereof and the Interest Period with respect
thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable
from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Agent
hereunder from the Borrower and each Lender's share thereof.

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

            (d)      Any Lender may request that its Loans be evidenced by a
Note. In such event, the
Borrower shall prepare, execute and deliver to such Lender a Note payable to the
order of such
Lender. Thereafter, the Loans evidenced by such Note and interest thereon shall
at all times
(including after any assignment pursuant to Section 12.3) be represented by one
or more Notes
payable to the order of the payee named therein or any assignee pursuant to
Section 12.3, except
to the extent that any such Lender or assignee subsequently returns any such
Note for
cancellation and requests that such Loans once again be evidenced as described
in clauses (a)
and (b) above.

            2.15      Telephonic Notices  The Borrower hereby authorizes the
Lenders and the Agent
to extend, convert or continue Advances, effect selections of Types of Advances
and to transfer
funds based on telephonic notices made by any person the Agent or any Lender in
good faith
believes to be acting on behalf of the Borrower, it being understood that the
foregoing
authorization is specifically intended to allow Borrowing Notices and
Conversion/Continuation
Notices to be given telephonically. The Borrower agrees that upon the request of
the Agent or
any Lender, the Borrower will deliver promptly to the Agent a written
confirmation signed by an
Authorized Officer, of each telephonic notice given by the Borrower pursuant to
the preceding
sentence. If the written confirmation differs in any material respect from the
action taken by the
Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest
error.

            2.16      Interest Payment Dates; Interest and Fee Basis Interest
accrued on each Floating
Rate Advance shall be payable on each Payment Date, on any date on which such
Floating Rate
Advance is prepaid, whether due to acceleration or otherwise, and at maturity.
Interest accrued
on that portion of the outstanding principal amount of any Floating Rate Advance
converted into
a Eurodollar Advance on a day other than a Payment Date shall be payable on the
date of
conversion. Interest accrued on each Eurodollar Advance shall be payable on the
last day of its
applicable Interest Period (and, in the case of a six-month Interest Period, on
the day which is
three months after the first day of such Interest Period), on any date on which
such Eurodollar
Advance is prepaid, whether by acceleration or otherwise, and at maturity.
Interest on Floating
Rate Advances which are bearing interest at the Prime Rate shall be calculated
for actual days
elapsed on the basis of a 365-day year or, when appropriate, 366-day year. All
other interest and
all fees shall be calculated for actual days elapsed on the basis of a 360-day
year. Interest shall
be payable for the day an Advance is made but not for the day of any payment on
the amount
paid if payment is received prior to noon (Chicago time) at the place of
payment. If any payment

of principal of or interest on an Advance shall become due on a day which is not
a Business Day,
such payment shall be made on the next succeeding Business Day and, in the case
of a principal
payment, such extension of time shall be included in computing interest in
connection with such
payment.

            2.17      Notification of Advances, Interest Rates, Prepayments and
Commitment
Reductions. Promptly after receipt thereof, the Agent will notify each Lender of
the contents
of each notice of reduction in the Aggregate Commitment, Borrowing Notice,
Conversion/Continuation Notice, and notice of repayment received by the Agent
hereunder. The
Agent will notify each Lender of the interest rate applicable to each Eurodollar
Advance
promptly upon determination of such interest rate and will give each Lender
prompt notice of
each change in the Alternate Base Rate.

            2.18      Lending Installations. Each Lender may book its Loans at
any Lending
Installation selected by such Lender and may change its Lending Installation
from time to time.
All terms of this Agreement shall apply to any such Lending Installation and the
Loans and any
Notes issued hereunder shall be deemed held by each Lender for the benefit of
any such Lending
Installation. Each Lender may, by written notice to the Agent and the Borrower
in accordance
with Article XIII, designate replacement or additional Lending Installations
through which Loans
will be made by it and for whose account Loan payments are to be made.

            2.19     Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case
may be, notifies the Agent prior to the date on which it is scheduled to make
payment to the
Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case
of the Borrower, a
payment of principal, interest or fees to the Agent for the account of the
Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The
Agent may, but shall not be obligated to, make the amount of such payment
available to the
intended recipient in reliance upon such assumption. If a Lender or the
Borrower, as the case
may be, has not in fact made such payment to the Agent, the recipient of such
payment shall, on
demand by the Agent, repay to the Agent the amount so made available together
with interest
thereon in respect of each day during the period commencing on the date such
amount was so
made available by the Agent until the date the Agent recovers such amount at a
rate per annum
equal to (x) in the case of payment by a Lender, the Federal Funds Effective
Rate for such day
for the first three days and, thereafter, the interest rate applicable to the
relevant Loan or (y) in
the case of payment by the Borrower, the interest rate applicable to the
relevant Obligation.

                                                                ARTICLE III

                                                YIELD PROTECTION; TAXES

            3.1      Yield Protection.  If, on or after the date of this
Agreement, the adoption of any
law or any governmental or quasi-governmental rule, regulation, policy,
guideline or directive
(whether or not having the force of law), or any change in the interpretation or
administration
thereof by any governmental or quasi-governmental authority, central bank or
comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender or
any applicable Lending Installation with any request or directive (whether or
not having the force
of law) of any such authority, central bank or comparable agency:

            (i)      subjects any Lender or any applicable Lending Installation
to any Taxes, or
                     changes the basis of taxation of payments (other than with
respect to Excluded
                     Taxes) to any Lender in respect of its Eurodollar Loans, or

            (ii)     imposes or increases or deems applicable any reserve,
assessment, insurance
                      charge, special deposit or similar requirement against
assets of, deposits with or for
                      the account of, or credit extended by, any Lender or any
applicable Lending
                      Installation (other than reserves and assessments taken
into account in
                      determining the interest rate applicable to Eurodollar
Advances), or
                       imposes any other condition the result of which is to
increase the cost to any
                       Lender or any applicable Lending Installation of making,
funding or maintaining
                       its Eurodollar Loans or reduces any amount receivable by
any Lender or any
                       applicable Lending Installation in connection with its
Eurodollar Loans, or
                       requires any Lender or any applicable Lending
Installation to make any payment
                       calculated by reference to the amount of Eurodollar Loans
held or interest received
                       by it, by an amount deemed material by such Lender,

and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending
Installation of making or maintaining its Eurodollar Loans or Commitment or to
reduce the
return received by such Lender or applicable Lending Installation in connection
with such
Eurodollar Loans or Commitment, then, within 15 days of demand by such Lender,
the Borrower
shall pay such Lender such additional amount or amounts as will compensate such
Lender for
such increased cost or reduction in amount received.

            3.2      Changes in Capital Adequacy Regulations. If a Lender
determines the amount of
capital required or expected to be maintained by such Lender, any Lending
Installation of such
Lender or any corporation controlling such Lender is increased as a result of a
Change, then,
within 15 days of demand by such Lender, the Borrower shall pay such Lender the
amount
necessary to compensate for any shortfall in the rate of return on the portion
of such increased
capital which such Lender determines is attributable to this Agreement, its
Loans or its
Commitment to make Loans hereunder (after taking into account such Lender's
policies as to
capital adequacy). "Change" means (i) any change after the date of this
Agreement in the Risk
Based Capital Guidelines (as defined below) or (ii) any adoption of or change in
any other law,
governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or
directive (whether or not having the force of law) after the date of this
Agreement which affects
the amount of capital required or expected to be maintained by any Lender or any
Lending
Installation or any corporation controlling any Lender. "Risk Based Capital
Guidelines" means
(i) the risk based capital guidelines in effect in the United States on the date
of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by
regulatory authorities outside the United States implementing the July 1988
report of the Basle
Committee on Banking Regulation and Supervisory Practices Entitled
"International
Convergence of Capital Measurements and Capital Standards," including transition
rules, and
any amendments to such regulations adopted prior to the date of this Agreement.

             3.3      Availability of Types of Advances. If any Lender notifies
the Agent that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any
applicable law, rule, regulation, or directive, whether or not having the force
of law, or if the
Required Lenders determine that (i) deposits of a type and maturity appropriate
to match fund
Eurodollar Advances are not available or (ii) the interest rate applicable to
Eurodollar Advances
does not accurately reflect the cost of making or maintaining Eurodollar
Advances, then the
Agent shall suspend the availability of Eurodollar Advances and require any
affected Eurodollar
Advances to be repaid or converted to Floating Rate Advances, subject to the
payment of any
funding indemnification amounts required by Section 3.4.

            3.4      Funding Indemnification. If any payment of a Eurodollar
Advance occurs on a
day which is not the last day of an Interest Period therefor, whether because of
acceleration,
prepayment or otherwise, or a Eurodollar Advance is not made on the date
specified by the
Borrower for any reason other than default by the Lenders, the Borrower will
indemnify each
Lender for any loss or cost incurred by it resulting therefrom, including any
loss or cost in
liquidating or employing deposits acquired to fund or maintain such Eurodollar
Advance.

            3.5      Taxes. (i) All payments by the Borrower to or for the
account of any Lender or
the Agent hereunder or under any Note shall be made free and clear of and
without deduction for
any and all Taxes. If the Borrower shall be required by law to deduct any Taxes
from or in
respect of any sum payable hereunder to any Lender or the Agent, (a) the sum
payable shall be
increased as necessary so that after making all required deductions (including
deductions
applicable to additional sums payable under this Section 3.5) such Lender or the
Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions
been made, (b) the Borrower shall make such deductions, (c) the Borrower shall
pay the full
amount deducted to the relevant authority in accordance with applicable law and
(d) the
Borrower shall furnish to the Agent the original copy of a receipt evidencing
payment thereof
within 30 days after such payment is made.

            (ii)      In addition, the Borrower hereby agrees to pay any present
or future stamp or
documentary taxes and any other excise or property taxes, charges or similar
levies which arise
from any payment made hereunder or under any Note or from the execution or
delivery of this
Agreement or any Note ("Other Taxes").

            (iii)     The Borrower hereby agrees to indemnify the Agent and each
Lender for the full
amount of Taxes or Other Taxes (including any Taxes or Other Taxes imposed on
amounts
payable under this Section 3.5) paid by the Agent or such Lender and any
liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
Payments due under
this indemnification shall be made within 30 days of the date the Agent or such
Lender makes
demand therefor pursuant to Section 3.6.

            (iv)     Each Lender that is not incorporated under the laws of the
United States of
America or a state thereof (each a "Non-U.S. Lender") agrees that it will, not
less than ten
Business Days after the date of this Agreement, (i) deliver to the Borrower and
the Agent two
duly completed copies of United States Internal Revenue Service Form W-8ECI or
W-8BEN,
certifying in either case that such Lender is entitled to receive payments under
this Agreement
without deduction or withholding of any United States federal income taxes, and
(ii) deliver to
the Borrower and the Agent a United States Internal Revenue Form W-8BEN or W-9,
as the case
may be, and certify that it is entitled to an exemption from United States
backup withholding tax.
Each Non-U.S. Lender further undertakes to deliver to the Borrower and the Agent
(x) renewals
or additional copies of such form (or any successor form) on or before the date
that such form
expires or becomes obsolete, and (y) after the occurrence of any event requiring
a change in the
most recent forms so delivered by it, such additional forms or amendments
thereto as may be
reasonably requested by the Borrower or the Agent. All forms or amendments
described in the
preceding sentence shall certify that such Lender is entitled to receive
payments under this
Agreement without deduction or withholding of any United States federal income
taxes, unless
an event (including any change in treaty, law or regulation) has occurred prior
to the date on
which any such delivery would otherwise be required which renders all such forms
inapplicable
or which would prevent such Lender from duly completing and delivering any such
form or
amendment with respect to it and such Lender advises the Borrower and the Agent
that it is not
capable of receiving payments without any deduction or withholding of United
States federal
income tax.

            (v)       For any period during which a Non-U.S. Lender has failed
to provide the
Borrower with an appropriate form pursuant to clause (iv) above (unless such
failure is due to a
change in treaty, law or regulation, or any change in the interpretation or
administration thereof
by any governmental authority, occurring subsequent to the date on which a form
originally was
required to be provided), the Borrower shall not be required to increase any
amount payable to
such Non-U.S. Lender pursuant to Section 3.5(i)(a) or to otherwise indemnify
such Lender under
this Section 3.5 with respect to Taxes imposed by the United States; provided
that, should a
Non-U.S. Lender which is otherwise exempt from or subject to a reduced rate of
withholding tax
become subject to Taxes because of its failure to deliver a form required under
clause (iv),
above, the Borrower shall take such steps as such Non-U.S. Lender shall
reasonably request to
assist such Non-U.S. Lender to recover such Taxes.

            (vi)      Any Lender that is entitled to an exemption from or
reduction of withholding tax
with respect to payments under this Agreement or any Note pursuant to the law of
any relevant
jurisdiction or any treaty shall deliver to the Borrower (with a copy to the
Agent), at the time or
times prescribed by applicable law, such properly completed and executed
documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at
a reduced rate.

            (vii)    If the U.S. Internal Revenue Service or any other
governmental authority of the
United States or any other country or any political subdivision thereof asserts
a claim that the
Agent did not properly withhold tax from amounts paid to or for the account of
any Lender
(because the appropriate form was not delivered or properly completed, because
such Lender
failed to notify the Agent of a change in circumstances which rendered its
exemption from
withholding ineffective, or for any other reason), such Lender shall indemnify
the Agent fully for
all amounts paid, directly or indirectly, by the Agent as tax, withholding
therefor, or otherwise,
including penalties and interest, and including taxes imposed by any
jurisdiction on amounts
payable to the Agent under this subsection, together with all costs and expenses
related thereto
(including attorneys fees and time charges of attorneys for the Agent, which
attorneys may be
employees of the Agent). The obligations of the Lenders under this Section
3.5(vii) shall survive
the payment of the Obligations and termination of this Agreement.

            3.6      Mitigation of Circumstances; Lender Statements; Survival of
Indemnity. Each
Lender shall promptly notify the Borrower and the Agent of any event of which it
has knowledge
which will result in, and will use reasonable commercial efforts available to it
(and not, in such
Lender's good faith judgment, otherwise disadvantageous to such Lender) to
mitigate or avoid,
(i) any obligation of the Borrower to pay any amount pursuant to Section 3.1,
3.2 or 3.5 and (ii)
the unavailability of Eurodollar Advances under Section 3.3 (and, if any Lender
has given notice
of any such event described above and thereafter such event ceases to exist,
such Lender shall
promptly so notify the Borrower and the Agent). Without limiting the foregoing,
each Lender
shall, to the extent reasonably possible, designate an alternate Lending
Installation with respect
to its Eurodollar Loans to reduce any liability of the Borrower to such Lender
under Sections 3.1,
3.2 and 3.5 or to avoid the unavailability of Eurodollar Advances under Section
3.3, so long as
such designation is not, in the judgment of such Lender, disadvantageous to such
Lender. Any
Lender claiming compensation under Section 3.1, 3.2, 3.4 or 3.5 shall deliver a
written statement
to the Borrower (with a copy to the Agent) as to the amount due under the
applicable Section,
which statement shall set forth in reasonable detail the calculations upon which
such Lender
determined such amount and shall be final, conclusive and binding on the
Borrower in the
absence of manifest error. Determination of amounts payable under any such
Section in
connection with a Eurodollar Loan shall be calculated as though each Lender
funded its
Eurodollar Loan through the purchase of a deposit of the type and maturity
corresponding to the
deposit used as a reference in determining the Eurodollar Rate applicable to
such Loan, whether
in fact that is the case or not. Unless otherwise provided herein, the amount
specified in the
written statement of any Lender shall be payable on demand after receipt by the
Borrower of
such written statement. Notwithstanding any other provision of this Article III,
if any Lender
fails to notify the Borrower of any event or circumstance which will entitle
such Lender to
compensation from the Borrower pursuant to Section 3.1, 3.2 or 3.5 within 60
days after such
Lender obtains knowledge of such event or circumstance, then the Borrower will
not be
responsible for any such compensation arising prior to the 60th day before the
Borrower receives
notice from such Lender of such event or circumstance. The obligations of the
Borrower under
Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the Obligations and
termination of this
Agreement.

            3.7      Replacement of Lender.   If any Lender makes a demand for
compensation under
Section 3.1, 3.2 or 3.5 or a notice of the type described in Section 3.3 (any
such Lender, an
"Affected Lender"), then the Borrower may replace such Affected Lender as a
party to this
Agreement with one or more other Lenders and/or Purchasers which are willing to
accept an
assignment from such Lender, and upon notice from the Borrower such Affected
Lender shall
assign, without recourse or warranty, its Commitment, its Loans and all of its
other rights and
obligations hereunder to such other Lenders and/or Purchasers for a purchase
price equal to the
sum of the principal amount of the Loans so assigned, all accrued and unpaid
interest thereon,
such Affected Lender's ratable share of all accrued and unpaid facility fees,
any amount payable
pursuant to Section 3.4 as a result of such Affected Lender receiving payment of
any Eurodollar
Loan prior to the end of an Interest Period therefor (assuming for such purpose
that receipt of
payment pursuant to such assignment constitutes payment of each outstanding
Eurodollar Loan)
and all other obligations owed to such Affected Lender hereunder.

                                                               ARTICLE IV

                                                  CONDITIONS PRECEDENT

            4.1      Initial Advance. The obligation of the Lenders to make the
initial Advance
hereunder is subject to the conditions precedent that the Agent has received (a)
evidence,
reasonably satisfactory to the Agent, that (i) the Merger Transactions have been
(or concurrently
with the initial Advance will be) completed; (ii) all obligations of PEPCO, DPL
and ACE under
the Existing Credit Facilities (as defined in the Other Credit Agreement) have
been (or
concurrently with the initial Advance will be) paid in full; and (iii) all fees
and (to the extent
billed) expenses which are payable on or before the date of the initial Advance
to the Arrangers,
the Agent or any Lender hereunder or in connection herewith have been (or
concurrently with
the initial Advance will be) paid in full; and (b) each of the following
documents (with sufficient
copies for each Lender):

            (i)       Copies of the articles or certificate of incorporation of
the Borrower, together with
                       all amendments thereto, certified by the Secretary or an
Assistant Secretary of the
                       Borrower, and certificates of good standing, certified by
the appropriate
                       governmental officer in the jurisdiction(s) of
incorporation of the Borrower.

            (ii)      Copies, certified by the Secretary or Assistant Secretary
of the Borrower, of the
                       Borrower's bylaws and resolutions of its Board of
Directors authorizing the
                       execution, delivery and performance of the Loan
Documents.

            (iii)     An incumbency certificate, executed by the Secretary or
Assistant Secretary of the
                       Borrower, which shall identify by name and title and bear
the signatures of the
                       officers of the Borrower authorized to sign the Loan
Documents, upon which
                       certificate the Agent and the Lenders shall be entitled
to rely until informed of any
                       change in writing by the Borrower.

            (iv)      A certificate, signed by an Authorized Officer, stating
that on the date of the
                        initial Advance no Default or Unmatured Default has
occurred and is continuing.

            (v)       A written opinion of internal counsel to the Borrower,
substantially in the form of
                       Exhibit D-1.

            (vi)     A written opinion of Covington & Burling, special New York
counsel to the
                       Borrower, substantially in the form of Exhibit D-2.

            (vii)     Any Notes requested by a Lender pursuant to Section 2.14
payable to the order of
                        each such requesting Lender.

            (viii)    Copies of all governmental approvals, if any, necessary
for the Borrower to enter
                        into the Loan Documents and to obtain Advances
hereunder.

            (ix)      Such other documents as any Lender or its counsel may
reasonably request.

            4.2      Each Advance. The Lenders shall not be required to make any
Advance unless on
the date of such Advance:

            (i)       No Default or Unmatured Default exists or will result from
such Advance.

            (ii)      The representations and warranties contained in Article V
are true and correct in
                       all material respects as of the date of such Advance
except to the extent any such
                       representation or warranty is stated to relate solely to
an earlier date, in which case
                       such representation or warranty shall have been true and
correct in all material
                       respects on and as of such earlier date.

            (iii)     All legal matters incident to the making of such Advance
shall be reasonably
                       satisfactory to the Lenders and their counsel.

            Each Borrowing Notice shall constitute a representation and warranty
by the Borrower
that the conditions contained in Sections 4.2(i) and (ii) have been satisfied.
Any Lender may
require a duly completed compliance certificate in substantially the form of
Exhibit A as a
condition to the making of an Advance.

                                                                  ARTICLE V

                                          REPRESENTATIONS AND WARRANTIES

            The Borrower represents and warrants to the Lenders that:

            5.1      Existence and Standing. The Borrower is a corporation, and
each Subsidiary is a
corporation, partnership or limited liability company, duly and properly
incorporated or
organized, as the case may be, validly existing and (to the extent such concept
applies to such
entity) in good standing under the laws of its jurisdiction (or, if applicable,
jurisdictions) of
incorporation or organization and has all requisite authority to conduct its
business in each
jurisdiction in which its business is conducted, except where failure to do so
could not
reasonably be expected to have a Material Adverse Effect.

            5.2      Authorization and Validity. The Borrower has the power and
authority and legal
right to execute and deliver the Loan Documents and to perform its obligations
thereunder. The
execution and delivery by the Borrower of the Loan Documents and the performance
of its
obligations thereunder have been duly authorized by proper corporate
proceedings, and the Loan
Documents constitute legal, valid and binding obligations of the Borrower
enforceable against
the Borrower in accordance with their terms, except as enforceability may be
limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.

            5.3      No Conflict; Government Consent. Neither the execution and
delivery by the
Borrower of the Loan Documents, nor the consummation of the transactions therein
contemplated, nor compliance with the provisions thereof will violate (i) any
law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on the
Borrower or any
Subsidiary or (ii) the Borrower's or any Subsidiary's articles or certificate of
incorporation,
partnership agreement, certificate of partnership, articles or certificate of
organization, bylaws, or
operating or other management agreement, as the case may be, or (iii) the
provisions of any
indenture, instrument or agreement to which the Borrower or any Significant
Subsidiary is a
party or is subject, or by which it, or its Property, is bound, or conflict with
or constitute a default
thereunder, or result in, or require, the creation or imposition of any Lien in,
of or on the
Property of the Borrower or any Significant Subsidiary pursuant to the terms of
any such
indenture, instrument or agreement. Except for an appropriate order or orders of
the SEC under
PUHCA, each of which has been issued and is in full force and effect (and copies
of which have
been delivered to the Agent), no order, consent, adjudication, approval,
license, authorization, or
validation of, or filing, recording or registration with, or exemption by, or
other action in respect
of any governmental or public body or authority (including the Federal Energy
Regulatory
Commission), or any subdivision thereof, is required to be obtained by the
Borrower or any
Subsidiary, in connection with the execution and delivery of the Loan Documents,
the
borrowings under this Agreement, the payment and performance by the Borrower of
the
Obligations or the legality, validity, binding effect or enforceability of any
of the Loan
Documents.

            5.4       Financial Statements. The Borrower's pro forma
consolidated financial
statements for the fiscal year ended December 31, 2001 and the fiscal quarter
ended March 31,
2002, copies of which have delivered to each Lender, were prepared in accordance
with
Agreement Accounting Principles and fairly present the pro forma consolidated
financial
condition and operations of the Borrower and its Subsidiaries at the dates
thereof and for the
periods then ended.

            5.5      No Material Adverse Change.  Since December 31, 2001, there
has been no
change from that reflected in the pro forma consolidated financial statements
referred to in
Section 5.4 in the business, Property, financial condition or results of
operations of the Borrower
and its Subsidiaries taken as a whole which could reasonably be expected to have
a Material
Adverse Effect.

            5.6      Taxes.  Borrower and its Subsidiaries have filed all United
States federal tax
returns and all other material tax returns which are required to be filed and
have paid all taxes
due pursuant to said returns or pursuant to any assessment received by the
Borrower or any
Subsidiary, except (a) such taxes, if any, as are being contested in good faith
and as to which
adequate reserves have been provided in accordance with Agreement Accounting
Principles and
(b) taxes and governmental charges (in addition to those referred to in clause
(a)) in an aggregate
amount not exceeding $1,000,000. The charges, accruals and reserves on the books
of the
Borrower and its Subsidiaries in respect of any taxes or other governmental
charges are
adequate.

            5.7      Litigation and Contingent Obligations. Except as disclosed
in the Public Reports,
there is no litigation, arbitration, governmental investigation, proceeding or
inquiry pending or,
to the knowledge of the Borrower, threatened against or affecting the Borrower
or any
Subsidiary which could reasonably be expected to have a Material Adverse Effect
or which seeks
to prevent, enjoin or delay the making of any Loans. Other than any liability
incident to any
litigation, arbitration or proceeding which could not reasonably be expected to
have a Material
Adverse Effect, the Borrower has no material contingent obligations not provided
for or
disclosed in the Public Reports.

            5.8      Significant Subsidiaries. Schedule 4 contains an accurate
list of all Significant
Subsidiaries of the Borrower after giving effect to the Merger Transactions,
setting forth their
respective jurisdictions of organization and the percentage of their respective
capital stock or
other ownership interests owned by the Borrower or other Subsidiaries. All of
the issued and
outstanding shares of capital stock or other ownership interests of such
Significant Subsidiaries
have been (to the extent such concepts are relevant with respect to such
ownership interests) duly
authorized and issued and are fully paid and nonassessable.

            5.9      ERISA. Each Plan complies in all material respects with all
applicable
requirements of law and regulations, no Reportable Event has occurred with
respect to any Plan,
neither the Borrower nor any other member of the Controlled Group has withdrawn
from any
Plan or initiated steps to do so, and no steps have been taken to reorganize or
terminate any Plan.

            5.10      Accuracy of Information. No written information, exhibit
or report furnished by
the Borrower or any Subsidiary to the Agent or to any Lender in connection with
the negotiation
of, or compliance with, the Loan Documents contained any material misstatement
of fact or
omitted to state a material fact or any fact necessary to make the statements
contained therein not
misleading.

            5.11      Regulation U. Margin stock (as defined in Regulation U of
the FRB) constitutes
less than 25% of the value of those assets of the Borrower and its Subsidiaries
which are subject
to any limitation on sale, pledge, or other restriction hereunder.

            5.12      Material Agreements. Neither the Borrower nor any
Subsidiary thereof is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or
conditions contained in any agreement to which it is a party, which default
could reasonably be
expected to have a Material Adverse Effect.

            5.13      Compliance With Laws. The Borrower and its Subsidiaries
have complied with
all applicable statutes, rules, regulations, orders and restrictions of any
domestic or foreign
government or any instrumentality or agency thereof having jurisdiction over the
conduct of their
respective businesses or the ownership of their respective Property except for
any failure to
comply with any of the foregoing which could not reasonably be expected to have
a Material
Adverse Effect.

            5.14      Plan Assets; Prohibited Transactions. The Borrower is not
an entity deemed to
hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101 of an
employee benefit plan (as
defined in Section 3(3) of ERISA) which is subject to Title I of ERISA or any
plan (within the
meaning of Section 4975 of the Code), and neither the execution of this
Agreement nor the
making of Loans hereunder gives rise to a prohibited transaction within the
meaning of Section
406 of ERISA or Section 4975 of the Code.

            5.15      Environmental Matters. In the ordinary course of its
business, the officers of the
Borrower consider the effect of Environmental Laws on the business of the
Borrower and its
Subsidiaries, in the course of which they identify and evaluate potential risks
and liabilities
accruing to the Borrower and its Subsidiaries due to Environmental Laws. On the
basis of this
consideration, the Borrower has concluded that Environmental Laws are not
reasonably expected
to have a Material Adverse Effect. Neither the Borrower nor any Subsidiary
thereof has received
any notice to the effect that its operations are not in material compliance with
any of the
requirements of applicable Environmental Laws or are the subject of any federal
or state
investigation evaluating whether any remedial action is needed to respond to a
release of any
toxic or hazardous waste or substance into the environment, which noncompliance
or remedial
action could reasonably be expected to have a Material Adverse Effect.

            5.16      Investment Company Act. Neither the Borrower nor any
Subsidiary thereof is an
"investment company" or a company "controlled" by an "investment company",
within the
meaning of the Investment Company Act of 1940.

            5.17      Public Utility Holding Company Act. Upon consummation of
the Merger
Transactions, the Borrower will be a "holding company", within the meaning of
PUHCA.

            5.18      Insurance. The Borrower and its Significant Subsidiaries
maintain insurance
with financially sound and reputable insurance companies on all their Property
of a character
usually insured by entities in the same or similar businesses similarly situated
against loss or
damage of the kinds and in the amounts, customarily insured against by such
entities, and
maintain such other insurance as is usually carried by such entities.

            5.19      No Default. No Default or Unmatured Default exists.

            5.20      Ownership of Properties. As of the Closing Date, the
Borrower and its
Subsidiaries have good title, free of all Liens other than those permitted by
Section 6.12, to all
the Property reflected as owned by the Borrower and its Subsidiaries in the
March 31, 2002
financial statements of the Borrower referred to in Section 5.4 other than
Property used, sold,
transferred or otherwise disposed of since such date (a) in the ordinary course
of business, (b)
which are not material to the business of the Borrower and its Subsidiaries
taken as a whole or
(c) as otherwise permitted by the terms of the Existing Credit Facilities.

                                                                  ARTICLE VI

                                                                 COVENANTS

            During the term of this Agreement, unless the Required Lenders shall
otherwise consent
in writing:
            6.1      Financial Reporting. The Borrower will maintain, for itself
and each Subsidiary, a
system of accounting established and administered in accordance with Agreement
Accounting
Principles, and furnish to the Agent (in such number of copies as the Agent may
reasonably
request):

            (i)      Within 100 days after the close of each of its fiscal
years, an audit report, which
                      shall be without a "going concern" or similar
qualification or exception and
                      without any qualification as to the scope of the audit,
certified by independent
                      certified public accountants acceptable to the Required
Lenders, prepared in
                      accordance with Agreement Accounting Principles on a
consolidated and
                      consolidating basis (consolidating statements need not be
certified by such
                      accountants) for itself and its Subsidiaries, including
balance sheets as of the end
                      of such period, related profit and loss and reconciliation
of surplus statements, and
                      a statement of cash flows, accompanied by (a) any
management letter prepared by
                      said accountants, and (b) a certificate of said
accountants that, in the course of their
                      examination necessary for their certification of the
foregoing, they have obtained
                      no knowledge of any Default or Unmatured Default, or if,
in the opinion of such
                      accountants, any Default or Unmatured Default shall exist,
stating the nature and
                      status thereof; provided that, if the Borrower is then a
"registrant" within the
                      meaning of Rule 1-01 of Regulation S-X of the SEC and
required to file a report on
                      Form 10-K with the SEC, a copy of the Borrower's annual
report on Form 10-K
                      (excluding the exhibits thereto, unless such exhibits are
requested under clause
                      (viii) of this Section) or any successor form and a
manually executed copy of the
                      accompanying report of the Borrower's independent public
accountant, as
                      filed with the SEC, shall satisfy the requirements of this
clause (i).

            (ii)     Within 60 days after the close of the first three quarterly
periods of each of its
                      fiscal years, for itself and its Subsidiaries, either (i)
consolidated and consolidating
                      unaudited balance sheets as at the close of each such
period and consolidated and
                      consolidating profit and loss and reconciliation of
surplus statements and a
                      statement of cash flows for the period from the beginning
of such fiscal year to the
                      end of such quarter, all certified by its chief financial
officer or (ii) if the Borrower
                      is then a "registrant" within the meaning of Rule 1-01 of
Regulation S-X of the
                      SEC and required to file a report on Form 10-Q with the
SEC, a copy of the
                      Borrower's report on Form 10-Q for such quarterly period,
excluding the exhibits
                      thereto, unless such exhibits are requested under clause
(viii) of this Section.

            (iii)    Together with the financial statements required under
Sections 6.1(i) and (ii), a
                       compliance certificate in substantially the form of
Exhibit A signed by an
                      Authorized Officer showing the calculations necessary to
determine compliance
                      with Section 6.13 of this Agreement and stating that, to
the knowledge of such
                      officer, no Default or Unmatured Default exists, or if any
Default or Unmatured
                      Default exists, stating the nature and status thereof.

            (iv)     As soon as possible and in any event within 30 days after
receipt by the Borrower,
                       a copy of (a) any notice or claim to the effect that the
Borrower or any Subsidiary
                       is or may be liable to any Person as a result of the
release by the Borrower, any
                       Subsidiary, or any other Person of any toxic or hazardous
waste or substance into
                       the environment, and (b) any notice alleging any
violation of any federal, state or
                       local environmental, health or safety law or regulation
by the Borrower or any
                       Subsidiary, which, in either case, could be reasonably
expected to have a Material
                       Adverse Effect.

            (v)      Promptly upon the furnishing thereof to the shareholders of
the Borrower, copies
                      of all financial statements, reports and proxy statements
so furnished.

            (vi)     Promptly upon the filing thereof, copies of all
registration statements and annual,
                      quarterly, monthly or other regular reports which the
Borrower or any Subsidiary
                      files with the SEC.

            (vii)   As soon as the Borrower obtains knowledge of an actual
Change in Control or
                      publicly disclosed prospective Change in Control, written
notice of same, including
                      the anticipated or actual date of and all other publicly
disclosed material terms and
                      conditions surrounding such proposed or actual Change in
Control.

            (viii)  Such other information (including nonfinancial information)
as the Agent or any
                      Lender may from time to time reasonably request.

            Documents required to be delivered pursuant to clause (i), (ii), (v)
or (vi) above may be
delivered electronically and, if so delivered, shall be deemed to have been
delivered on the date
(i) on which the Borrower posts such documents, or provides a link thereto, on a
website on the
internet at a website address previously specified to the Agent and the Lenders;
or (ii) on which
such documents are posted on the Borrower's behalf on IntraLinks or another
relevant website, if
any, to which each of the Agent and each Lender has access; provided that (i)
upon request of the
Agent or any Lender, the Borrower shall deliver paper copies of such documents
to the Agent or
such Lender (until a written request to cease delivering paper copies is given
by the Agent or
such Lender) and (ii) the Borrower shall notify (which may be by facsimile or
electronic mail)
the Agent and each Lender of the posting of any documents. The Agent shall have
no obligation
to request the delivery of, or to maintain copies of, the documents referred to
above or to monitor
compliance by the Borrower with any such request for delivery, and each Lender
shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.

            6.2      Use of Proceeds. The Borrower will use the proceeds of the
Advances for general
corporate purposes and to consummate the Merger Transactions. The Borrower will
not, nor will
it permit any Subsidiary to, use any of the proceeds of the Advances to purchase
or carry any
"margin stock" (as defined in Regulation U of the FRB) other than in connection
with the
consummation of the Merger Transactions.

            6.3       Notice of Default. The Borrower will give prompt notice in
writing to the
Lenders of the occurrence of any Default or Unmatured Default and of any other
development,
financial or otherwise, which could reasonably be expected to have a Material
Adverse Effect (it
being understood and agreed that the Borrower shall not be required to make
separate disclosure
under this Section 6.3 of occurrences or developments which have previously been
disclosed to
the Lenders in any financial statement or other information delivered to the
Lenders pursuant to
Section 6.1).

            6.4      Conduct of Business. The Borrower will, and will cause each
Significant
Subsidiary (or, in the case of clause (ii) below, each Subsidiary) to, (i) carry
on and conduct its
business in substantially the same manner and in substantially the same fields
of enterprise as it
is presently conducted and (ii) do all things necessary to remain duly
incorporated or organized,
validly existing and (to the extent such concept applies to such entity) in good
standing as a
domestic corporation, partnership or limited liability company in its
jurisdiction of incorporation
or organization, as the case may be, and maintain all requisite authority to
conduct its business in
each jurisdiction in which its business is conducted, except to the extent, in
the case of all
matters covered by this clause (ii) other than the existence of the Borrower,
that failure to do so
would not reasonably be expected to have a Material Adverse Effect.

            6.5      Taxes. The Borrower will, and will cause each Subsidiary
to, timely file complete
and correct United States federal and applicable foreign, state and local tax
returns required by
law and pay when due all taxes, assessments and governmental charges and levies
upon it or its
income, profits or Property, except (a) those that are being contested in good
faith by appropriate
proceedings and with respect to which adequate reserves have been set aside in
accordance with
Agreement Accounting Principles and (b) taxes, governmental charges and levies
(in addition to
those referred to in clause (a)) in an aggregate amount not exceeding
$1,000,000.

            6.6      Insurance. The Borrower will, and will cause each
Significant Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all their
Property in such amounts and covering such risks as is consistent with sound
business practice,
and the Borrower will furnish to any Lender such information as such Lender may
reasonably
request as to the insurance carried by the Borrower and its Significant
Subsidiaries.

            6.7      Compliance with Laws. The Borrower will, and will cause
each Subsidiary to,
comply with all laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards
to which it may be subject, including all Environmental Laws, where failure to
do so could
reasonably be expected to have a Material Adverse Effect.

            6.8      Maintenance of Properties; Books and Records. The Borrower
will, and will
cause each Subsidiary to, do all things necessary to (a) maintain, preserve,
protect and keep its
Property in good repair, working order and condition, and make all necessary and
proper repairs,
renewals and replacements so that its business carried on in connection
therewith may be
properly conducted at all times, where failure to do so could reasonably be
expected to have a
Material Adverse Effect; and (b) keep proper books and records in which full and
correct entries
shall be made of all material financial transactions of the Borrower and each
Subsidiary.

            6.9      Inspection. The Borrower will, and will cause each
Significant Subsidiary to,
permit the Agent and the Lenders upon reasonable notice and, at such reasonable
times and
intervals as the Agent or any Lender may designate, by their respective
representatives and
agents, to inspect any of the Property, books and financial records of the
Borrower and each
Significant Subsidiary, to examine and make copies of the books of accounts and
other financial
records of the Borrower and each Significant Subsidiary, and to discuss the
affairs, finances and
accounts of the Borrower and each Significant Subsidiary with, and to be advised
as to the same
by, their respective officers.

            6.10      Merger. The Borrower will not, nor will it permit any
Significant Subsidiary to,
merge or consolidate with or into any other Person, except that, so long as both
immediately
prior to and after giving effect to such merger or consolidation, no Default or
Unmatured Default
shall have occurred and be continuing, then (i) any Significant Subsidiary may
merge with the
Borrower or a wholly-owned Subsidiary and (ii) the Borrower may merge or
consolidate with
any other Person so long as the Borrower is the surviving entity. Nothing in
this Section 6.10
shall prohibit the Merger Transactions.

            6.1      Sales of Assets. The Borrower will not, and will not permit
any Subsidiary to,
lease, sell or otherwise dispose of any of its assets (other than in the
ordinary course of business),
or sell or assign with or without recourse any accounts receivable, except:

            (i)       Any Subsidiary may sell, transfer or assign any of its
assets to the Borrower or
                       another Subsidiary.

            (ii)      The sale, assignment or other transfer of accounts
receivable or other rights to
                       payment pursuant to any Securitization Transaction.

            (iii)     So long as no Default or Unmatured Default exists or would
result therefrom, the
                       sale of Intangible Transition Property to a Special
Purpose Subsidiary in
                       connection with such Special Purpose Subsidiary's
issuance of Nonrecourse
                       Transition Bond Debt.

            (iv)      So long as no Default or Unmatured Default exists or would
result therefrom, any
                        Permitted DPL Asset Sale, Permitted PHI Asset Sale or
Permitted ACE Asset
                        Sale (each as defined in the Other Credit Agreement as
in effect on the date
                        hereof).

            (v)       Permitted Pepco Distributions (as defined in the Other
Credit Agreement as in
                        effect on the date hereof).

            (vi)      The Borrower and its Subsidiaries may sell or otherwise
dispose of assets so long
                        as the aggregate amount of all assets sold or otherwise
disposed of in any fiscal
                        year of the Borrower (other than assets sold or
otherwise disposed of in the
                        ordinary course of business or pursuant to clauses (i)
through (v) above) does not
                        exceed a Substantial Portion of the Property of the
Borrower and its Subsidiaries.

            6.12     Liens. The Borrower will not, and will not permit any
Significant Subsidiary to,
create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any
Significant Subsidiary, except:

            (i)        Liens for taxes, assessments or governmental charges or
levies on its Property if
                        the same shall not at the time be delinquent or
thereafter can be paid without
                        penalty, or are being contested in good faith and by
appropriate proceedings and
                        for which adequate reserves in accordance with Agreement
Accounting Principles
                        shall have been set aside on its books.

            (i)        Liens imposed by law, such as carriers', warehousemen's
and mechanics' liens
                        and other similar liens arising in the ordinary course
of business which secure
                        payment of obligations not more than 90 days past due or
which are being
                        contested in good faith by appropriate proceedings and
for which adequate
                        reserves shall have been set aside on its books.

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

            (iv)      Utility easements, building restrictions, zoning laws or
ordinances and such other
                        encumbrances or charges against real property as are of
a nature generally
                        existing with respect to properties of a similar
character and which do not in any
                        material way affect the marketability of the same or
interfere with the use thereof
                        in the business of the Borrower and its Significant
Subsidiaries.

            (v)       Liens existing on the date hereof and described in
Schedule 5 (including Liens on
                        after-acquired property arising under agreements
described in Schedule 5 as such
                        agreements are in effect on the date hereof).

            (vi)      Judgment Liens which secure payment of legal obligations
that would not
                       constitute a Default under Article 7.

            (vii)     Liens on Property acquired by the Borrower or a
Significant Subsidiary after the
                       date hereof, existing on such Property at the time of
acquisition thereof (and not
                       created in anticipation thereof), provided that in any
such case no such Lien shall
                       extend to or cover any other Property of the Borrower or
such Significant
                       Subsidiary, as the case may be.

            (viii)   Deposits and/or similar arrangements to secure the
performance of bids, fuel
                       procurement contracts or other trade contracts (other
than for borrowed money),
                       leases, statutory obligations, surety and appeal bonds,
performance bonds and
                       other obligations of a like nature incurred in the
ordinary course of business by the
                       Borrower or any Significant Subsidiary.

            (ix)      Liens on assets of the Borrower and its Significant
Subsidiaries arising out of
                        obligations or duties to any municipality or public
authority with respect to any
                        franchise, grant, license, permit or certificate.

            (x)       Rights reserved to or vested in any municipality or public
authority to control or
                        regulate any property or asset of the Borrower or any
Significant Subsidiary or to
                       use such property or asset in a manner which does not
materially impair the use of
                        such property or asset for the purposes for which it is
held by the Borrower or any
                        Significant Subsidiary.

            (xi)      Irregularities in or deficiencies of title to any Property
which do not materially
                        affect the use of such property by the Borrower or any
Significant Subsidiary in
                        the normal course of its business.

            (xii)     Liens securing Indebtedness of the Borrower and its
Subsidiaries incurred to
                        finance the acquisition of fixed or capital assets,
provided that (i) such Liens shall
                        be created substantially simultaneously with the
acquisition of such fixed or
                        capital assets, (ii) such Liens do not at any time
encumber any property other than
                        the property financed by such Indebtedness, (iii) the
amount of Indebtedness
                        secured thereby is not increased and (iv) the principal
amount of Indebtedness
                        secured by any such Lien shall at no time exceed 100% of
the original purchase
                        price of such property at the time it was acquired.

            (xiii)    Any Lien on any property or asset of any corporation or
other entity existing at
                        the time such corporation or entity is acquired, merged
or consolidated or
                        amalgamated with or into the Borrower or any Significant
Subsidiary and not
                        created in contemplation of such event.

            (xiv)    Liens arising out of the refinancing, extension, renewal or
refunding of any
                        Indebtedness secured by any Lien permitted by Section
6.12 (v), (vii), (xii) or
                        (xiii), provided that such Indebtedness is not increased
and is not secured by any
                        additional assets.

            (xv)     Rights of lessees arising under leases entered into by the
Borrower or any
                        Significant Subsidiary as lessor, in the ordinary course
of business.

            (xvi)    Permitted PEPCO Liens, Permitted DPL Liens, Permitted ACE
Liens and
                       Permitted PHI Liens (each as defined in the Other Credit
Agreement as in effect
                       on the date hereof).

            (xvii)  Purchase money mortgages or other purchase money liens or
conditional sale,
                       lease-purchase or other title retention agreements upon
or in respect of property
                       acquired or leased for use in the ordinary course of its
business by the Borrower or
                       any Significant Subsidiary.

            (xviii) Liens granted by a Special Purpose Subsidiary to secure
Nonrecourse Transition
                       Bond Debt of such Special Purpose Subsidiary.

            (xix)   Liens, in addition to those permitted by clauses (i) through
(xviii), granted to
                       secure Nonrecourse Indebtedness incurred after the date
hereof, provided that the
                       aggregate amount of all Indebtedness secured by such
Liens shall not at any time
                       exceed $200,000,000.

            (xx)    Other Liens, in addition to those permitted by clauses (i)
through (xix), securing
                       Indebtedness or arising in connection with Securitization
Transactions, provided
                       that the sum (without duplication) of all such
Indebtedness, plus the aggregate
                       investment or claim held at any time by all purchasers,
assignees or other
                        transferees of (or of interests in) receivables and
other rights to payment in all
                       Securitization Transactions (excluding any Nonrecourse
Transition Bond Debt),
                       shall not at any time exceed $500,000,000.

            6.13       Leverage Ratio. The Borrower will not permit the ratio,
determined as of the
end of each of its fiscal quarters, of (i) the Total Indebtedness of the
Borrower to (ii) the Total
Capitalization of the Borrower to be greater than (a) prior to the 90th day
after the issuance of
any Nonrecourse Transition Bond Debt, 0.70 to 1.00 and (b) thereafter, 0.65 to
1.00.

                                                                ARTICLE VII

                                                                  DEFAULTS

             The occurrence of any one or more of the following events shall
constitute a Default:

             7.1     Representation or Warranty. Any representation or warranty
made, or
deemed made pursuant to Section 4.2, by or on behalf of the Borrower to the
Lenders or the
Agent under or in connection with this Agreement or any certificate or
information delivered in
connection with this Agreement or any other Loan Document shall be materially
false on the
date as of which made.

            7.2       Nonpayment. Nonpayment of the principal of any Loan when
due; or
nonpayment of any interest on any Loan or of any commitment fee, facility fee,
utilization fee or
other obligation under any of the Loan Documents within five days after the same
becomes due.

            7.3     Certain Covenant Breaches. The breach by the Borrower of any
of the terms
                      or provisions of Section 6.2, 6.4 (as to the existence of
the Borrower), 6.10, 6.11,
                      6.12 or 6.13.

            7.4     Other Breaches. The breach by the Borrower (other than a
breach which
constitutes a Default under another Section of this Article VII) of any of the
terms or provisions
of this Agreement which is not remedied within 15 days (or, in the case of
Section 6.9, five
Business Days) after the chief executive officer, the chief financial officer,
the President, the
Treasurer or any Assistant Treasurer of the Borrower obtains actual knowledge of
such breach.

            7.5      Cross Default. Failure of the Borrower or any Significant
Subsidiary to pay when
due any Indebtedness aggregating in excess of $50,000,000 ("Material
Indebtedness"); or the
default by the Borrower or any Significant Subsidiary in the performance (beyond
the applicable
grace period with respect thereto, if any) of any term, provision or condition
contained in any
agreement under which any such Material Indebtedness was created or is governed,
or any other
event shall occur or condition exist, the effect of which default or event is to
cause, or to permit
the holder or holders of such Material Indebtedness to cause, such Material
Indebtedness to
become due prior to its stated maturity; or any Material Indebtedness of the
Borrower or any
Significant Subsidiary shall be declared to be due and payable or required to be
prepaid or
repurchased (other than by a regularly scheduled payment) prior to the stated
maturity thereof; or
the Borrower or any Significant Subsidiary shall not pay, or admit in writing
its inability to pay,
its debts generally as they become due.

            7.6      Voluntary Bankruptcy, etc. The Borrower or any Significant
Subsidiary shall (i)
have an order for relief entered with respect to it under the Federal bankruptcy
laws as now or
hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii)
apply for, seek,
consent to, or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator
or similar official for it or any Substantial Portion of its Property, (iv)
institute any proceeding
seeking an order for relief under the Federal bankruptcy laws as now or
hereafter in effect or
seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts under
any law relating
to bankruptcy, insolvency or reorganization or relief of debtors or fail to file
an answer or other
pleading denying the material allegations of any such proceeding filed against
it, (v) take any
corporate, partnership or limited liability company action to authorize or
effect any of the
foregoing actions set forth in this Section 7.6 or (vi) fail to contest in good
faith any appointment
or proceeding described in Section 7.7.

            7.7       Involuntary Bankruptcy, etc. Without the application,
approval or consent of the
Borrower or any Significant Subsidiary, a receiver, trustee, examiner,
liquidator or similar
official shall be appointed for the Borrower or any Significant Subsidiary or a
Substantial Portion
of its Property, or a proceeding described in Section 7.6(iv) shall be
instituted against the
Borrower or any Significant Subsidiary and such appointment continues
undischarged or such
proceeding continues undismissed or unstayed for a period of 30 consecutive
days.

            7.8      Seizure of Property, etc. Any court, government or
governmental agency shall
condemn, seize or otherwise appropriate, or take custody or control of, all or
any portion of the
Property of the Borrower and its Significant Subsidiaries which, when taken
together with all
other Property of the Borrower and its Significant Subsidiaries so condemned,
seized,
appropriated, or taken custody or control of, constitutes a Substantial Portion
of its Property.

            7.9      Judgments. The Borrower or any Significant Subsidiary shall
fail within 60 days
to pay, bond or otherwise discharge one or more (i) judgments or orders for the
payment of
money in excess of $50,000,000 (or the equivalent thereof in currencies other
than U.S. Dollars)
in the aggregate, or (ii) nonmonetary judgments or orders which, individually or
in the aggregate,
could reasonably be expected to have a Material Adverse Effect, and, in any such
case, there is a
period of five consecutive days during which a stay of enforcement of such
judgment(s) or
orders(s) is not in effect (by reason of pending appeal or otherwise).

            7.10      ERISA. (i) Any Person shall engage in any "prohibited
transaction" (as defined
in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii)
any "accumulated
funding deficiency" (as defined in Section 302 of ERISA), whether or not waived,
shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise
on the assets of
the Borrower or any other member of the Controlled Group, (iii) a Reportable
Event shall occur
with respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or
commencement of proceedings or appointment of a trustee is, in the reasonable
opinion of the
Required Lenders, likely to result in the termination of such Plan for purposes
of Title IV of
ERISA, (iv) any other member of the Plan shall terminate for purposes of Title
IV of ERISA,
(v) the Borrower or any other member of the Controlled Group shall, or in the
reasonable
opinion of the Required Lenders is likely to, incur any liability in connection
with a withdrawal
from, or the insolvency or reorganization of, a Multiemployer Plan or (vi) any
other event or
condition shall occur or exist with respect to a Plan; and in each case referred
to in clauses (i)
through (vi) above, such event or condition, together with all other such events
or conditions, if
any, could reasonably be expected to have a Material Adverse Effect with respect
to the
Borrower.

            7.11      Unenforceability of Loan Documents. Any Loan Document
shall cease to be in
full force and effect (other than, in the case of a Note, as contemplated
hereby), any action shall
be taken by or on behalf of the Borrower to discontinue or to assert the
invalidity or
unenforceability of any of its obligations under any Loan Document, or the
Borrower or any
Person acting on behalf of the Borrower shall deny that the Borrower has any
further liability
under any Loan Document or shall give notice to such effect.

            7.12      Change in Control. Any Change in Control shall occur; or
at any time after the
consummation of the Merger Transactions, the Borrower shall fail to own,
directly or indirectly,
100% of the Voting Stock of each of PEPCO, DPL and ACE.

                                                                  ARTICLE VIII

                    ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

            8.1      Acceleration. If any Default described in Section 7.6 or
7.7 occurs with respect to
the Borrower, the obligations of the Lenders to make Loans hereunder shall
automatically
terminate and the Obligations shall immediately become due and payable without
any election or
action on the part of the Agent or any Lender. If any other Default occurs, the
Required Lenders
(or the Agent with the consent of the Required Lenders) may terminate or suspend
the
obligations of the Lenders to make Loans hereunder, or declare the Obligations
to be due and
payable, or both, whereupon the obligations of the Lenders to make Loans
hereunder shall
terminate and/or the Obligations shall become immediately due and payable,
without
presentment, demand, protest or notice of any kind, all of which the Borrower
hereby expressly
waives.

            If, within 30 days after acceleration of the maturity of the
Obligations or termination of
the obligations of the Lenders to make Loans hereunder as a result of any
Default (other than any
Default as described in Section 7.6 or 7.7 with respect to the Borrower) and
before any judgment
or decree for the payment of the Obligations due shall have been obtained or
entered, the
Required Lenders (in their sole discretion) shall so direct, the Agent shall, by
notice to the
Borrower, rescind and annul such acceleration and/or termination.

            8.2      Amendments. Subject to the provisions of this Article VIII,
the Required Lenders
(or the Agent with the consent in writing of the Required Lenders) and the
Borrower may enter
into agreements supplemental hereto for the purpose of adding or modifying any
provisions to
this Agreement changing in any manner the rights of the Lenders or the Borrower
hereunder or
waiving any Default or Unmatured Default hereunder; provided that no such
supplemental
agreement shall, without the consent of all of the Lenders:

            (i)      Extend the final maturity of any Loan or forgive all or any
portion of the principal
                      amount thereof, or reduce the rate or extend the time of
payment of interest thereon
                      or any facility fees, utilization fees or commitment fees.

            (ii)      Reduce the percentage specified in the definition of
Required Lenders.

            (iii)    Extend the Facility Termination Date, or increase the
amount of the Commitment
                      of any Lender hereunder, or permit the Borrower to assign
its rights under this
                     Agreement.

            (iv)   Amend this Section 8.2.

No amendment of any provision of this Agreement relating to the Agent shall be
effective
without the written consent of the Agent. The Agent may waive payment of the fee
required
under Section 12.3.2 without obtaining the consent of any other party to this
Agreement.

            8.3      Preservation of Rights. No delay or omission of the Lenders
or the Agent to
exercise any right under the Loan Documents shall impair such right or be
construed to be a
waiver of any Default or Unmatured Default or an acquiescence therein, and the
making of a
Loan notwithstanding the existence of a Default or Unmatured Default or the
inability of the
Borrower to satisfy the conditions precedent to such Loan shall not constitute
any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment or
other variation
of the terms, conditions or provisions of any Loan Document whatsoever shall be
valid unless in
writing signed by the parties required pursuant to Section 8.2, and then only to
the extent in such
writing specifically set forth. All remedies contained in the Loan Documents or
by law afforded
shall be cumulative and all shall be available to the Agent and the Lenders
until the Obligations
have been paid in full.

                                                                  ARTICLE IX

                                                      GENERAL PROVISIONS

            9.1       Survival of Representations. All representations and
warranties of the Borrower
contained in this Agreement shall survive the making of the Loans herein
contemplated.

            9.2      Governmental Regulation. Anything contained in this
Agreement to the contrary
notwithstanding, no Lender shall be obligated to extend credit to the Borrower
in violation of any
limitation or prohibition provided by any applicable statute or regulation.

            9.3      Headings. Section headings in the Loan Documents are for
convenience of
reference only, and shall not govern the interpretation of any of the provisions
of the Loan
Documents.

            9.4      Entire Agreement. The Loan Documents embody the entire
agreement and
understanding among the Borrower, the Agent and the Lenders and supersede all
prior
agreements and understandings among the Borrower, the Agent and the Lenders
relating to the
subject matter thereof.

            9.5       Several Obligations; Benefits of this Agreement. The
respective obligations of
the Lenders hereunder are several and not joint and no Lender shall be the
partner or agent of any
other (except to the extent to which the Agent is authorized to act as such).
The failure of any
Lender to perform any of its obligations hereunder shall not relieve any other
Lender from any of
its obligations hereunder. This Agreement shall not be construed so as to confer
any right or
benefit upon any Person other than the parties to this Agreement and their
respective successors
and assigns, provided that the parties hereto expressly agree that each Arranger
shall enjoy the
benefits of the provisions of Sections 9.6, 9.10 and 10.11 to the extent
specifically set forth
therein and shall have the right to enforce such provisions on its own behalf
and in its own name
to the same extent as if it were a party to this Agreement.

            9.6      Expenses; Indemnification. (i) The Borrower shall reimburse
the Agent and the
Arrangers for all reasonable costs, internal charges and out of pocket expenses
(including
reasonable attorneys' fees and time charges of attorneys for the Agent, which
attorneys may be
employees of the Agent or an Arranger) paid or incurred by the Agent or the
Arrangers in
connection with the preparation, negotiation, execution, delivery, syndication,
review,
amendment, modification, and administration of the Loan Documents. The Borrower
agrees to
reimburse the Agent, the Arrangers and the Lenders for all reasonable costs,
internal charges and
out of pocket expenses (including reasonable attorneys' fees and time charges of
attorneys for
the Agent, the Arrangers and the Lenders, which attorneys may be employees of
the Agent, an
Arrangers or a Lender) paid or incurred by the Agent, the Arrangers or any
Lender in connection
with the collection and enforcement of the Obligations under the Loan Documents
(including in
any "work-out" or restructuring of the Obligations of the Borrower resulting
from the occurrence
of a Default).

             (ii)      The Borrower agrees to indemnify the Agent, each
Arranger, each Lender, their
respective affiliates, and each of the directors, officers and employees of the
foregoing Persons
(collectively, the "Indemnified Parties") against all losses, claims, damages,
penalties,
judgments, liabilities and reasonable expenses (including, all reasonable
expenses of litigation or
preparation therefor whether or not any Indemnified Party is a party thereto)
which any of them
may pay or incur arising out of or relating to this Agreement, the other Loan
Documents, the
transactions contemplated hereby or the direct or indirect application or
proposed application of
the proceeds of any Loan hereunder except to the extent that they are determined
in a final non-
appealable judgment by a court of competent jurisdiction to have resulted from
the gross
negligence or willful misconduct of the Indemnified Party seeking
indemnification. The
obligations of the Borrower under this Section 9.6 shall survive the termination
of this
Agreement.

            9.7      Numbers of Documents. All statements, notices, closing
documents, and requests
hereunder shall be furnished to the Agent with sufficient counterparts so that
the Agent may
furnish one to each of the Lenders.

            9.8      Disclosure. The Borrower and the Lenders hereby (i)
acknowledge and agree that
Bank One and/or its Affiliates from time to time may hold investments in, make
other loans to or
have other relationships with the Borrower and its Affiliates and (ii) waive any
liability of Bank
One or any of its Affiliates to the Borrower or any Lender, respectively,
arising out of or
resulting from such investments, loans or relationships other than liabilities
arising out of the
gross negligence or willful misconduct of Bank One or its Affiliates.

            9.9      Severability of Provisions. Any provision in any Loan
Document that is held to
be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that
jurisdiction, be
inoperative, unenforceable, or invalid without affecting the remaining
provisions in that
jurisdiction or the operation, enforceability, or validity of that provision in
any other jurisdiction,
and to this end the provisions of all Loan Documents are declared to be
severable.

            9.10     Nonliability of Lenders. The relationship between the
Borrower on the one hand
and the Lenders and the Agent on the other hand shall be solely that of borrower
and lender.
Neither the Agent, any Arranger nor any Lender shall have any fiduciary
responsibilities to the
Borrower. Neither the Agent, the Arrangers nor any Lender undertakes any
responsibility to the
Borrower to review or inform the Borrower of any matter in connection with any
phase of the
Borrower's business or operations. The Borrower agrees that neither the Agent,
the Arrangers
nor any Lender shall have liability to the Borrower (whether sounding in tort,
contract or
otherwise) for losses suffered by the Borrower in connection with, arising out
of, or in any way
related to, the transactions contemplated and the relationship established by
the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless it is
determined in a final non-appealable judgment by a court of competent
jurisdiction that such
losses resulted from the gross negligence or willful misconduct of the party
from which recovery
is sought. Neither the Agent, the Arrangers nor any Lender shall have any
liability with respect
to, and the Borrower hereby waives, releases and agrees not to sue for, any
special, indirect or
consequential damages suffered by the Borrower in connection with, arising out
of, or in any
way related to the Loan Documents or the transactions contemplated thereby.

            9.11     Confidentiality. Each Lender agrees to hold any
confidential information which it
may receive from the Borrower pursuant to this Agreement in confidence, except
for disclosure
(i) to its Affiliates and to other Lenders and their respective Affiliates, (ii)
to legal counsel,
accountants, and other professional advisors to such Lender or to a Transferee
who agrees to be
bound by the confidentiality restrictions set forth in this Section, (iii) to
regulatory officials
having jurisdiction over such Lender, (iv) to any Person as required by law,
regulation, or legal
process, (v) to any Person in connection with any legal proceeding relating to
this Agreement to
which such Lender is a party, (vi) to such Lender's direct or indirect
contractual counterparties in
swap agreements who agree to be bound by the confidentiality restrictions set
forth in this
Section and to legal counsel, accountants and other professional advisors to
such counterparties,
(vii) permitted by Section 12.4, (viii) to rating agencies if required by such
agencies in
connection with a rating relating to the Advances hereunder, and (ix) to the
extent required in
connection with the exercise of any remedy or any enforcement of this Agreement
by such
Lender or the Agent.

            9.12      Nonreliance. Each Lender hereby represents that it is not
relying on or looking to
any margin stock (as defined in Regulation U of the FRB) for the repayment of
the Loans
provided for herein.

                                                                    ARTICLE X

                                                                   THE AGENT

            10.1       Appointment; Nature of Relationship. Bank One, NA is
hereby appointed by
each of the Lenders as its contractual representative (herein referred to as the
"Agent") hereunder
and under each other Loan Document, and each of the Lenders irrevocably
authorizes the Agent
to act as the contractual representative of such Lender with the rights and
duties expressly set
forth herein and in the other Loan Documents. The Agent agrees to act as such
contractual
representative upon the express conditions contained in this Article X.
Notwithstanding the use
of the defined term "Agent," it is expressly understood and agreed that the
Agent shall not have
any fiduciary responsibilities to any Lender by reason of this Agreement or any
other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders
with only those duties as are expressly set forth in this Agreement and the
other Loan
Documents. In its capacity as the Lenders' contractual representative, the Agent
(i) does not
hereby assume any fiduciary duties to any of the Lenders, (ii) is a
"representative" of the Lenders
within the meaning of Section 9-105 of the Uniform Commercial Code and (iii) is
acting as an
independent contractor, the rights and duties of which are limited to those
expressly set forth in
this Agreement and the other Loan Documents. Each of the Lenders hereby agrees
to assert no
claim against the Agent on any agency theory or any other theory of liability
for breach of
fiduciary duty, all of which claims each Lender hereby waives.

            10.2      Powers. The Agent shall have and may exercise such powers
under the Loan
Documents as are specifically delegated to the Agent by the terms of each
thereof, together with
such powers as are reasonably incidental thereto. The Agent shall have no
implied duties to the
Lenders, or any obligation to the Lenders to take any action hereunder or under
any other Loan
Document except any action specifically provided by the Loan Documents to be
taken by the
Agent.

            10.3      General Immunity. Neither the Agent nor any of its
directors, officers, agents or
employees shall be liable to the Borrower or any Lender for any action taken or
omitted to be
taken by it or them hereunder or under any other Loan Document or in connection
herewith or
therewith except to the extent such action or inaction is determined in a final
non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful
misconduct of such Person.

            10.4      No Responsibility for Loans, Recitals, etc. Neither the
Agent nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain,
inquire into, or verify (a) any statement, warranty or representation made in
connection with any
Loan Document or any borrowing hereunder; (b) the performance or observance of
any of the
covenants or agreements of any obligor under any Loan Document, including any
agreement by
an obligor to furnish information directly to each Lender; (c) the satisfaction
of any condition
specified in Article IV, except receipt of items required to be delivered solely
to the Agent; (d)
the existence or possible existence of any Default or Unmatured Default; or (e)
the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other
instrument or writing furnished in connection therewith. The Agent shall have no
duty to
disclose to the Lenders information that is not required to be furnished by the
Borrower to the
Agent at such time, but is voluntarily furnished by the Borrower to the Agent
(either in its
capacity as Agent or in its individual capacity).

            10.5      Action on Instructions of Lenders. The Agent shall in all
cases be fully protected
in acting, or in refraining from acting, hereunder and under any other Loan
Document in
accordance with written instructions signed by the Required Lenders (or, when
expressly
required hereunder, all of the Lenders), and such instructions and any action
taken or failure to
act pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge
that the Agent shall be under no duty to take any discretionary action permitted
to be taken by it
pursuant to the provisions of this Agreement or any other Loan Document unless
it shall be
requested in writing to do so by the Required Lenders. The Agent shall be fully
justified in
failing or refusing to take any action hereunder and under any other Loan
Document unless it
shall first be indemnified to its satisfaction by the Lenders pro rata against
any and all liability,
cost and expense that it may incur by reason of taking or continuing to take any
such action.

            10.6      Employment of Agents and Counsel. The Agent may execute
any of its duties as
Agent hereunder and under any other Loan Document by or through employees,
agents, and
attorneys in fact and shall not be answerable to the Lenders, except as to money
or securities
received by it or its authorized agents, for the default or misconduct of any
such agents or
attorneys in fact selected by it with reasonable care. The Agent shall be
entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all
matters pertaining to the Agent's duties hereunder and under any other Loan
Document.

            10.7      Reliance on Documents; Counsel. The Agent shall be
entitled to rely upon any
Note, notice, consent, certificate, affidavit, letter, telegram, statement,
paper or document
believed by it to be genuine and correct and to have been signed or sent by the
proper person or
persons, and, in respect to legal matters, upon the opinion of counsel selected
by the Agent,
which counsel may be employees of the Agent.

            10.8      Agent's Reimbursement and Indemnification. The Lenders
agree to reimburse
and indemnify the Agent ratably in proportion to their respective Commitments
(or, if the
Commitments have been terminated, in proportion to their Commitments immediately
prior to
such termination) (i) for any amounts not reimbursed by the Borrower for which
the Agent is
entitled to reimbursement by the Borrower under the Loan Documents, (ii) for any
other
expenses incurred by the Agent on behalf of the Lenders, in connection with the
preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including for any
expenses incurred by the Agent in connection with any dispute between the Agent
and any
Lender or between two or more of the Lenders) and (iii) for any liabilities,
obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent in any
way relating to or arising out of the Loan Documents or any document delivered
in connection
therewith or the transactions contemplated thereby (including for any such
amounts incurred by
or asserted against the Agent in connection with any dispute between the Agent
and any Lender
or between two or more of the Lenders), or the enforcement of any of the terms
of the Loan
Documents or of any such other documents, provided that (i) no Lender shall be
liable for any of
the foregoing to the extent any of the foregoing is found in a final
non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct
of the Agent and (ii) any indemnification required pursuant to Section 3.5(vii)
shall,
notwithstanding the provisions of this Section 10.8, be paid by the relevant
Lender in accordance
with the provisions thereof. The obligations of the Lenders under this Section
10.8 shall survive
payment of the Obligations and termination of this Agreement.

            10.9     Notice of Default. The Agent shall not be deemed to have
knowledge or notice of
the occurrence of any Default or Unmatured Default hereunder (except for failure
of the
Borrower to pay any amount required to be paid to the Agent hereunder for the
account of the
Lenders) unless the Agent has received written notice from a Lender or the
Borrower referring to
this Agreement describing such Default or Unmatured Default and stating that
such notice is a
"notice of default". In the event that the Agent receives such a notice, the
Agent shall give
prompt notice thereof to all Lenders.

            10.10   Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the
same rights and powers hereunder and under any other Loan Document with respect
to its
Commitment and its Loans as any Lender and may exercise the same as though it
were not the
Agent, and the term "Lender" or "Lenders" shall, at any time when the Agent is a
Lender, unless
the context otherwise indicates, include the Agent in its individual capacity.
The Agent and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of trust,
debt, equity or other transaction, in addition to those contemplated by this
Agreement or any
other Loan Document, with the Borrower or any Subsidiary in which the Borrower
or such
Subsidiary is not restricted hereby from engaging with any other Person. The
Agent in its
individual capacity is not obligated to remain a Lender.

            10.11   Lender Credit Decision. Each Lender acknowledges that it
has, independently
and without reliance upon the Agent, the Arrangers or any other Lender and based
on the
financial statements prepared by the Borrower and such other documents and
information as it
has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement
and the other Loan Documents. Each Lender also acknowledges that it will,
independently and
without reliance upon the Agent, the Arrangers 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 and the
other Loan
Documents.

            10.12   Successor Agent. The Agent may resign at any time by giving
written notice
thereof to the Lenders and the Borrower, such resignation to be effective upon
the appointment
of a successor Agent or, if no successor Agent has been appointed, forty-five
days after the
retiring Agent gives notice of its intention to resign. The Agent may be removed
at any time
with or without cause by written notice received by the Agent from the Required
Lenders, such
removal to be effective on the date specified by the Required Lenders. Upon any
such
resignation or removal, the Required Lenders shall have the right (with, so long
as no Default or
Unmatured Default exists, the consent of the Borrower, which shall not be
unreasonably
withheld or delayed) to appoint, on behalf of the Borrower and the Lenders, a
successor Agent.
If no successor Agent shall have been so appointed by the Required Lenders
within thirty days
after the resigning Agent's giving notice of its intention to resign, then the
resigning Agent may
appoint, on behalf of the Borrower and the Lenders, a successor Agent.
Notwithstanding the
previous sentence, the Agent may at any time without the consent of any Lender
but with the
consent of the Borrower, not to be unreasonably withheld or delayed, appoint any
of its Affiliates
which is a commercial bank as a successor Agent hereunder. If the Agent has
resigned or been
removed and no successor Agent has been appointed, the Lenders may perform all
the duties of
the Agent hereunder and the Borrower shall make all payments in respect of the
Obligations to
the applicable Lender and for all other purposes shall deal directly with the
Lenders. No
successor Agent shall be deemed to be appointed hereunder until such successor
Agent has
accepted the appointment. Any such successor Agent shall be a commercial bank
having capital
and retained earnings of at least $100,000,000. Upon the acceptance of any
appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and
become vested with all the rights, powers, privileges and duties of the
resigning or removed
Agent. Upon the effectiveness of the resignation or removal of the Agent, the
resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan
Documents. After the effectiveness of the resignation or removal of an Agent,
the provisions of
this Article X shall continue in effect for the benefit of such Agent in respect
of any actions taken
or omitted to be taken by it while it was acting as the Agent hereunder and
under the other Loan
Documents. In the event that there is a successor to the Agent (by merger,
resignation or
removal), or the Agent assigns its duties and obligations to an Affiliate
pursuant to this Section
10.12, then the term "Prime Rate" as used in this Agreement shall mean the prime
rate, base rate
or other analogous rate of the new Agent.

            10.13   Agent's Fee. The Borrower agrees to pay to the Agent and
BOCM, as an
Arranger, for their own respective accounts, the fees agreed to by the Borrower,
the Agent and
BOCM pursuant to the letter agreement dated March 19, 2002, among the Borrower,
the Agent
and BOCM or as otherwise agreed to from time to time.

            10.14   Delegation to Affiliates. The Borrower and the Lenders agree
that the Agent may
delegate any of its duties under this Agreement to any of its Affiliates. Any
such Affiliate (and
such Affiliate's directors, officers, agents and employees) which performs
duties in connection
with this Agreement shall be entitled to the same benefits of the
indemnification, waiver and
other protective provisions to which the Agent is entitled under Articles IX and
X.

            10.15   Syndication Agent. None of the Persons identified on the
cover page of this
Agreement or otherwise herein as being a "Co-Syndication Agent" shall have any
right, power,
obligation, liability, responsibility or duty under this Agreement other than,
if applicable, those
applicable to all Lenders. Each Lender acknowledges that it has not relied, and
will not rely, on
the Co-Syndication Agents in deciding to enter into this Agreement or in taking
or refraining
from taking any action hereunder or pursuant hereto.

                                                                  ARTICLE XI

                                                SETOFF; RATABLE PAYMENTS

            11.1      Setoff. In addition to, and without limitation of, any
rights of the Lenders under
applicable law, if the Borrower becomes insolvent, however evidenced, or any
Default occurs,
any and all deposits (including all account balances, whether provisional or
final and whether or
not collected or available) and any other Indebtedness at any time held or owing
by any Lender
or any Affiliate of any Lender to or for the credit or account of the Borrower
may be offset and
applied toward the payment of the Obligations owing to such Lender, whether or
not the
Obligations, or any part thereof, shall then be due.

            11.2     Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment
made to it upon its Loans (other than payments received pursuant to Section 3.1,
3.2, 3.4 or 3.5)
in a greater proportion than that received by any other Lender, such Lender
agrees, promptly
upon demand, to purchase a portion of the Loans held by the other Lenders so
that after such
purchase each Lender will hold its ratable proportion of Loans. If any Lender,
whether in
connection with setoff or amounts which might be subject to setoff or otherwise,
receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff,
such Lender agrees, promptly upon demand, to take such action necessary such
that all Lenders
share in the benefits of such collateral ratably in proportion to their Loans.
In case any such
payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be
made.

                                                                    ARTICLE XII

                    BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

            12.1     Successors and Assigns. The terms and provisions of the
Loan Documents shall
be binding upon and inure to the benefit of the Borrower and the Lenders and
their respective
successors and assigns, except that (i) the Borrower shall not have the right to
assign its rights or
obligations under the Loan Documents and (ii) any assignment by any Lender must
be made in
compliance with Section 12.3. The parties to this Agreement acknowledge that
clause (ii) of the
preceding sentence relates only to absolute assignments and does not prohibit
assignments
creating security interests, including any pledge or assignment by any Lender of
all or any
portion of its rights under this Agreement and any Note to a Federal Reserve
Bank; provided that
no such pledge or assignment creating a security interest shall release the
transferor Lender from
its obligations hereunder unless and until the parties thereto have complied
with the provisions of
Section 12.3. The Agent may treat the Person which made any Loan or which holds
any Note as
the owner thereof for all purposes hereof unless and until such Person complies
with Section
12.3; provided that the Agent may in its discretion (but shall not be required
to) follow
instructions from the Person which made any Loan or which holds any Note to
direct payments
relating to such Loan or Note to another Person. Any assignee of the rights to
any Loan or any
Note agrees by acceptance of such assignment to be bound by all the terms and
provisions of the
Loan Documents. Any request, authority or consent of any Person, who at the time
of making
such request or giving such authority or consent is the owner of the rights to
any Loan (whether
or not a Note has been issued in evidence thereof), shall be conclusive and
binding on any
subsequent holder or assignee of the rights to such Loan.

            12.2     Participations

            12.2.1  Permitted Participants; Effect. Upon giving notice to but
without obtaining the
consent of the Borrower, any Lender may, in the ordinary course of its business
and in
accordance with applicable law, at any time sell to one or more banks or other
entities
("Participants") participating interests in any Obligations owing to such
Lender, any Note held
by such Lender, any Commitment of such Lender or any other interest of such
Lender under the
Loan Documents. In the event of any such sale by a Lender of participating
interests to a
Participant, such Lender's obligations under the Loan Documents shall remain
unchanged, such
Lender shall remain solely responsible to the other parties hereto for the
performance of such
obligations, such Lender shall remain the owner of the Obligations owing to such
Lender and the
holder of any Note issued to it for all purposes under the Loan Documents, all
amounts payable
by the Borrower under this Agreement shall be determined as if such Lender had
not sold such
participating interests, and the Borrower and the Agent shall continue to deal
solely and directly
with such Lender in connection with such Lender's rights and obligations under
the Loan
Documents.

            12.2.2  Voting Rights. Each Lender shall retain the sole right to
approve, without the
consent of any Participant, any amendment, modification or waiver of any
provision of the Loan
Documents other than any amendment, modification or waiver which extends the
Facility
Termination Date or the final maturity of any Loan in which such Participant has
an interest or
forgives all or any portion of the principal amount thereof, or reduces the rate
or extends the time
payment of interest thereon or on any facility, utilization or commitment fees.

            12.2.3  Benefit of Setoff. The Borrower agrees that each Participant
shall be deemed to
have the right of setoff provided in Section 11.1 in respect of its
participating interest in amounts
owing under the Loan Documents to the same extent as if the amount of its
participating interest
were owing directly to it as a Lender under the Loan Documents, provided that
each Lender shall
retain the right of setoff provided in Section 11.1 with respect to the amount
of participating
interests sold to each Participant. The Lenders agree to share with each
Participant, and each
Participant, by exercising the right of setoff provided in Section 11.1, agrees
to share with each
Lender, any amount received pursuant to the exercise of its right of setoff,
such amounts to be
shared in accordance with Section 11.2 as if each Participant were a Lender.

            12.3     Assignments.

            12.3.1  Permitted Assignments. Any Lender may, in the ordinary
course of its business
and in accordance with applicable law, at any time assign to one or more banks
or other entities
("Purchasers") all or any part of its rights and obligations under the Loan
Documents. Such
assignment shall be substantially in the form of Exhibit B or in such other form
as may be agreed
to by the parties thereto. The consent of the Borrower and the Agent shall be
required prior to an
assignment becoming effective with respect to a Purchaser which is not a Lender
or an Affiliate
thereof; provided that if a Default exists, the consent of the Borrower shall
not be required. Such
consent shall not be unreasonably withheld or delayed. Each such assignment with
respect to a
Purchaser which is not a Lender or an Affiliate thereof shall (unless each of
the Borrower and the
Agent otherwise consents) be in an amount not less than the lesser of (i)
$5,000,000 or (ii) the
remaining amount of the assigning Lender's Commitment (calculated as at the date
of such
assignment) or outstanding Loans (to the extent such Commitment has been
terminated).

            12.3.2  Effect; Effective Date. Upon (i) delivery to the Agent of an
Assignment
Agreement, together with any consents required by Section 12.3.1, and (ii)
payment of a $3,500
fee to the Agent for processing such assignment (unless such fee is waived by
the Agent), such
Assignment Agreement shall become effective on the effective date specified in
such
Assignment Agreement. On and after the effective date of such Assignment
Agreement, such
Purchaser shall for all purposes be a Lender party to this Agreement and any
other Loan
Document executed by or on behalf of the Lenders and shall have all the rights
and obligations
of a Lender under the Loan Documents, to the same extent as if it were an
original party hereto,
and no further consent or action by the Borrower, the Lenders or the Agent shall
be required to
release the transferor Lender with respect to the percentage of the Aggregate
Commitment and
Obligations assigned to such Purchaser. Upon the consummation of any assignment
to a
Purchaser pursuant to this Section 12.3.2, the transferor Lender, the Agent and
the Borrower
shall, if the transferor Lender or the Purchaser desires that its Loans be
evidenced by Notes,
make appropriate arrangements so that new Notes or, as appropriate, replacement
Notes are
issued to such transferor Lender and new Notes or, as appropriate, replacement
Notes, are issued
to such Purchaser.

            12.4     Dissemination of Information. The Borrower authorizes each
Lender to disclose
to any Participant or Purchaser or any other Person acquiring an interest in the
Loan Documents
by operation of law (each a "Transferee") and any prospective Transferee any and
all
information in such Lender's possession concerning the creditworthiness of the
Borrower and its
Subsidiaries, including any information contained in any Public Reports;
provided that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.

            12.5     Grant of Funding Option to SPC. Notwithstanding anything to
the contrary
contained herein, any Lender (a "Granting Lender") may grant to a special
purpose funding
vehicle (an "SPC"), identified as such in writing from time to time by the
Granting Lender to the
Agent and the Borrower, the option to provide to the Borrower all or any part of
any Loan that
such Granting Lender 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 Loan and (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or
any part of such Loan, the Granting Lender shall be obligated to make such Loan
pursuant to the
terms hereof. The making of a Loan by an SPC hereunder shall utilize the
Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender.
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 Lender).
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 proceeding
under the laws of
the United States or any State thereof. In addition, notwithstanding anything to
the contrary
contained in this Section 12.5, any SPC may (a) with notice to, but without the
prior written
consent of, the Borrower and the Agent and without paying any processing fee
therefor, assign
all or a portion of its interests in any Loan to the Granting Lender or to any
financial institution
(consented to by the Borrower and the Agent) providing liquidity and/or credit
support to or for
the account of such SPC to support the funding or maintenance of Loans and (b)
disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement
to such SPC.

            12.6      Tax Treatment. If any interest in any Loan Document is
transferred to any
Transferee which is organized under the laws of any jurisdiction other than the
United States or
any State thereof, the transferor Lender shall cause such Transferee,
concurrently with the
effectiveness of such transfer, to comply with the provisions of Section
3.5(iv).

                                                               ARTICLE XIII

                                                                    NOTICES

            13.1      Notices. Except as otherwise permitted by Section 2.15,
all notices, requests and
other communications to any party hereunder shall be in writing (including
facsimile
transmission or, subject to Section 13.2, electronic mail or posting on a
website) and shall,
subject to the last paragraph of Section 6.1, be given to such party at (i) in
the case of the
Borrower or the Agent, its address, facsimile number or electronic mail address
set forth on the
signature pages hereof or such other address, facsimile number or electronic
mail address as it
may hereafter specify for such purpose by notice to the other parties hereto;
and (ii) in the case of
any Lender, at the address, facsimile number or electronic mail address set
forth in its
Administrative Questionnaire or such other address, facsimile number or
electronic mail address
as such Lender may hereafter specify for such purpose by notice to the Borrower
and the Agent.
Subject to the last paragraph of Section 6.1, each such notice, request or other
communication
shall be effective (i) if given by facsimile transmission, when transmitted to
the facsimile number
specified pursuant to this Section and confirmation of receipt is received, (ii)
if given by mail,
three Business Days after such communication is deposited in the mails with
first class postage
prepaid, addressed as aforesaid, or (iii) if given by any other means, when
delivered (or, in the
case of electronic mail, received) at the address specified pursuant to this
Section; provided that
notices to the Agent under Article II shall not be effective until received.

            13.2     Limited Use of Electronic Mail. Electronic mail and
internet and intranet
websites may be used to distribute routine communications, such as financial
statements and
other information as provide in Section 6.1, and to distribute Loan Documents
for execution by
the parties thereto, but not for purposes of other notices hereunder.

                                                                ARTICLE XIV

                                                             COUNTERPARTS

            This Agreement may be executed in any number of counterparts, all of
which taken
together shall constitute one agreement, and any of the parties hereto may
execute this
Agreement by signing any such counterpart. This Agreement shall be effective
when it has been
executed by the Borrower, the Agent and the Lenders and each party has notified
the Agent by
facsimile transmission or telephone that it has taken such action.

                                                                 ARTICLE XV

      CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

            15.1     CHOICE OF LAW. THE LOAN DOCUMENTS SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING SECTION 5.1401.7 OF THE
GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO THE
CONFLICT OF LAWS PROVISIONS THEREOF) OF THE STATE OF NEW YORK, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

            15.2     CONSENT TO JURISDICTION. THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW
YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENT AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF 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 COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER
TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY
OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER
AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR
ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW
YORK.

            15.3     WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT
OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

            IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have
executed this
Agreement as of the date first above written.

                                                            PEPCO HOLDINGS, INC.

                                                            By:         A. J.
KAMERICK           
                                                            Title: Vice
President and Treasurer

                                                                     701 Ninth
Street NW
                                                                     Fifth Floor
                                                                     Washington,
DC 20068

                                                            Attention:     Anthony
J. Kamerick
                                                            Telephone:    (202)
872-2056
                                                            Fax:               (202)
872-3015

                                                            E-mail:           tjkamerick@pepco.com

 

 

                                                            BANK ONE, NA,
Individually and as Administrative
                                                            Agent

                                                            By:            DAWN
M. LAWLER               
                                                            Title:                Director                              

                                                                     1 Bank One
Plaza
                                                                     Chicago,
Illinois 60670

                                                            Attention: Utilities
Group
                                                            Telephone: (312)
732-3857
                                                            Fax: (312) 732-3055
                                                            E-mail:          dawn_m_lawler@bankone.com

 

 

                                                            MERRILL LYNCH
CAPITAL CORPORATION,
                                                            as a Lender

                                                            By:             SHEILA
McGILLICUDDY              
                                                            Title:                    Vice
President                          

                                                            WACHOVIA BANK,
NATIONAL ASSOCIATION,
                                                            Individually and as
Co-Documentation Agent

                                                            By:                  D.
MITCH WILSON                    
                                                            Title:                  Vice
President                            

 

                                                            THE BANK OF NOVA
SCOTIA, Individually and as Co-
                                                            Documentation Agent

                                                            By:                BRUCE
MATHESON                        
                                                            Title:                Managing
Director                            

                                                            CREDIT SUISSE FIRST
BOSTON, CAYMAN ISLANDS
                                                            BRANCH, Individually
and as Co-Documentation Agent

                                                            By:                     JAMES
P. MORAN                      
                                                            Title:                       Director                                     

                                                            By:                     VANESSA
GOMEZ                     
                                                            Title:                           Associate                              

                                                            BANK OF AMERICA,
N.A.

                                                            By:          GRETCHEN
P. BURUD     
                                                            Title:         Managing
Director             

                                                            MELLON BANK, N.A.

                                                            By:                SCOTT
HENNESSEE                   
                                                            Title:                 Managing
Director                     

                                                            THE BANK OF NEW YORK

                                                            By:           JOHN
N. WATT                
                                                            Title:         Vice
President                   

                                                            SUNTRUST BANK

                                                            By:              DAVID
H. EIDSON                 
                                                            Title:               Vice
President                       

                                                                   SCHEDULE 1

                                                               PRICING SCHEDULE

Level I Status

Level II Status

Level III Status

Level IV Status

Level V Status

Level VI Status

Applicable Margin

0.565%

0.675%

0.750%

0.850%

1.200%

1.800%

Facility Fee Rate

0.085%

0.100%

0.125%

0.150%

0.175%

0.200%

Utilization Fee Rate

0.100%

0.100%

0.125%

0.125%

0.125%

0.250%

            For the purposes of this Schedule, the following terms have the
following meanings,
subject to the other provisions of this Schedule:

             "Level I Status" exists on any date if, on such date the Borrower's
Moody's Rating is A2
or better or the Borrower's S&P Rating is A or better.

             "Level II Status" exists on any date if, on such date, (i) the
Borrower has not qualified
for Level I Status and (ii) the Borrower's Moody's Rating is A3 or better or the
Borrower's S&P
Rating is A- or better.

             "Level III Status" exists on any date if, on such date, (i) the
Borrower has not qualified
for Level I Status or Level II Status and (ii) the Borrower's Moody's Rating is
Baa1 or better or
the Borrower's S&P Rating is BBB+ or better.

             "Level IV Status" exists on any date if, on such date, (i) the
Borrower has not qualified
for Level I Status, Level II Status or Level III Status and (ii) the Borrower's
Moody's Rating is
Baa2 or better or the Borrower's S&P Rating is BBB or better.

             "Level V Status" exists on any date if, on such date, (i) the
Borrower has not qualified
for Level I Status, Level II Status, Level III Status or Level IV Status and
(ii) the Borrower's
Moody's Rating is Baa3 or better or the Borrower's S&P Rating is BBB- or better.

             "Level VI Status" exists on any date if, on such date, the Borrower
has not qualified for
Level I Status, Level II Status, Level III Status, Level IV Status or Level V
Status.

             "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 debt securities
without third-party
credit enhancement.

             "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 debt securities without
third-party credit
enhancement.

             "Status" means Level I Status, Level II Status, Level III Status,
Level IV Status, Level V
Status or Level VI Status.

            For purposes of this Schedule, the Moody's Rating and the S&P Rating
in effect for the
Borrower on any date are that in effect at the close of business on such date.

            The Applicable Margin, the Facility Fee Rate and the Utilization Fee
Rate shall be
determined in accordance with the above based on the Borrower's Status as
determined from its
then-current Moody's Rating and S&P Rating. If the Borrower is split-rated and
the ratings
differential is one level, the higher rating will apply. If the Borrower is
split-rated and the ratings
differential is two levels or more, the intermediate rating at the midpoint will
apply or, if
there is no midpoint, the higher of the two intermediate ratings will apply. If
at any time the
Borrower has no Moody's Rating or no S&P Rating, Level VI Status shall exist.

                                                                 SCHEDULE 2

                                          COMMITMENTS AND PRO RATA SHARES

Lender

Amount of Commitment

Pro Rata Share

Bank One, NA

$275,000,000

25.000%

Merrill Lynch Capital Corp.

$275,000,000

25.000%

Wachovia Bank, National Association

$100,000,000

9.091%

The Bank of Nova Scotia

$100,000,000

9.091%

Credit Suisse First Boston, Cayman Islands Branch

$100,000,000

9.091%

Bank of America, N.A.

$100,000,000

9.091%

Mellon Bank, N.A.

$50,000,000

4.545%

The Bank of New York

$50,000,000

4.545%

SunTrust Bank

$50,000,000

4.545%

                                                                SCHEDULE 3

                                                TRUST PREFERRED SECURITIES

$125,000,000 of 7-3/8% Trust Originated Preferred Securities (TOPRs) issued by
Potomac
Electric Power Company Trust I, a statutory Delaware business trust established
by Potomac
Electric Power Company.

$70,000,000 of 8-1/4% Cumulative Quarterly Income Preferred Securities issued by
Atlantic
Capital I, a special purpose statutory Delaware business trust established by
Atlantic City
Electric Company.

$25,000,000 of 7-3/8% Cumulative Quarterly Income Preferred Securities issued by
Atlantic
Capital II, a special purpose statutory Delaware business trust established by
Atlantic City
Electric Company.

$70,000,000 of 8-1/8% Cumulative Trust Preferred Capital Securities issued by
Delmarva Power
Financing I, a special purpose statutory Delaware business trust established by
Delmarva Power
& Light Company.

 

                                                                    
     SCHEDULE 4

                                                          SIGNIFICANT
SUBSIDIARIES

Name of Company Controlled

Owned By

Percent
Ownership

Amount of
Investment
(as of 3/31/02)

Potomac Electric Power Company

(a D.C. and Virginia corporation)

Pepco Holdings, Inc

100%

$1,332.8 Million

Conectiv

(a Delaware corporation)

Pepco Holdings, Inc

100%

$1,309.4 Million

Delmarva Power & Light Company

(a Delaware and Virginia corporation)

Conectiv

100%

$588.2 Million

Atlantic City Electric Company

(a New Jersey corporation)

Conectiv

100%

$615.6 Million

Conectiv Energy Holding Company
(A Delaware corporation)

Conectiv

100%

$572.0 Million

Conectiv Delmarva Generation, Inc
(A Delaware corporation)

Conectiv Energy Holding Company

100%

$447.8 Million

Potomac Capital Investment Corp
(a Delaware corporation)

Pepco Holdings, Inc

100%

$373.4 Million

*After giving effect to the Merger and the Permitted Pepco Distributions

                                                                   SCHEDULE 5

                                                                       
      LIENS

Incurred By

Owed To

Property
Encumbered

Maturity

Amount of
Indebtedness

Potomac Electric Power Co.

CitiCapital (BLC)

Vehicles, Office
Equip., Computers

Master Agreement

$ 17,210,807*

Potomac Electric Power Co.
(Pepco Energy Services)

Hannon Armstrong
Pepco Funding Corp.

Contract Payments Receivable

Master Agreement

$ 59,717,761*

Potomac Electric Power Co.
(Pepco Energy Services)

ABB Energy Capital L.L.C.

Contract Payments Receivable

Master Agreement

$ 10,539,803*

POM Holdings, Inc.
(Potomac Capital Investment Corp.)

ABB Energy Capital L.L.C.

Contract Payments Receivable

August 30, 2017

$ 9,189,292*

Pepco Energy Services, Inc. & Viron/Pepco Services Partnership

John Hancock

Contract Payments Receivable

August 30, 2017

$ 20,761,223*

POM Holdings, Inc., Pepco Energy Services, Inc., & Trigen/Pepco Services, LLC

Allfirst Bank

Contract Payments Receivable

December, 31, 2023

$ 6,527,500*

Delmarva Power & Light Company

Town of St. Michaels, Maryland

Distribution Equipment

October 15, 2006

$ 872,000

Atlantic City Electric Co.

Guo Mao International Hotels B.V.

Scrubber @ B.L. England Generation Station

January 21, 2007

$ 4,634,809

*The amount of this lien fluctuates with the amount of accounts receivable
created by this program. The amount listed is as of
May 31, 2002.

 

                                                              SCHEDULE 6

                                              NONRECOURSE INDEBTEDNESS

Name of Company

Aggregate
Principal
Amount

Type of
Indebtedness

Potomac Capital Investment Corporation
(Potomac Equipment Leasing Corporation)

$19,140,000

Promissory Note with
First Security Bank

Potomac Capital Investment Corporation
(Harmans Building Associates)

$ 6,280,000

Loan Agreement with
Massachusetts Mutual

Conectiv Bethlehem, Inc.

Up to $365 million

Senior Secured Credit
Facilities 4-Year
Construction and Term
Loan Facility *

         * Closed on June 26, 2002

   

                                                         TABLE OF CONTENTS

   

Page

ARTICLE I

DEFINITIONS

1

ARTICLE II

THE CREDITS

12

            2.1

Commitment

12

            2.2

Required Payments, Termination

13

            2.3

Ratable Loans

13

            2.4

Types of Advances

13

            2.5

Fees

13

            2.6

Reductions in Aggregate Commitment

13

            2.7

Minimum Amount of Each Advance

13

            2.8

Prepayments

14

            2.9

Method of Selecting Types and Interest Period for New Advances

14

            2.10

Conversion and Continuation of Outstanding Advances

14

            2.11

Changes in Interest Rate, etc.

15

            2.12

Rates Applicable After Default

15

            2.13

Method of Payment

15

            2.14

Noteless Agreement; Evidence of Indebtedness

16

            2.15

Telephonic Notices

16

            2.16

Interest Payment Dates; Interest and Fee Basis

16

            2.17

Notification of Advances, Interest Rates, Prepayments and Commitment Reductions

17

            2.18

Lending Installations

17

            2.19

Non-Receipt of Funds by the Agent

17

ARTICLE III

YIELD PROTECTION; TAXES

18

            3.1

Yield Protection

18

            3.2

Changes in Capital Adequacy Regulations

18

            3.3

Availability of Types of Advances

19

            3.4

Funding Indemnification

19

            3.5

Taxes

19

            3.6

Mitigation of Circumstances; Lender Statement; Survival of Indemnity

21

            3.7

Replacement of Lender

21

ARTICLE IV

CONDITIONS PRECEDENT

22

            4.1

Initial Advance

22

            4.2

Each Advance

23

ARTICLE V

REPRESENTATIONS AND WARRANTIES

23

            5.1

Existence and Standing

23

            5.2

Authorization and Validity

23

            5.3

No Conflict, Government Consent

24

            5.4

Financial Statements

24

            5.5

No Material Adverse Change

24

            5.6

Taxes

24

            5.7

Litigation and Contingent Obligations

25

            5.8

Significant Subsidiaries

25

            5.9

ERISA

25

            5.10

Accuracy of Information

25

            5.11

Regulation U

25

            5.12

Material Agreements

25

            5.13

Compliance With Laws

25

            5.14

Plan Assets; Prohibited Transactions

25

            5.15

Environmental Matters

26

            5.16

Investment Company Act

26

            5.17

Public Utility Holding Company Act

26

            5.18

Insurance

26

            5.19

No Default

26

            5.20

Ownership of Properties

26

ARTICLE VI

COVENANTS

26

            6.1

Financial Reporting

27

            6.2

Use of Proceeds

28

            6.3

Notice of Default

28

            6.4

Conduct of Business

29

            6.5

Taxes

29

            6.6

Insurance

29

            6.7

Compliance with Laws

29

            6.8

Maintenance of Properties; Books and Records

29

            6.9

Inspection

29

            6.10

Merger

30

            6.11

Sales of Assets

30

            6.12

Liens

30

            6.13

Leverage Ratio

33

ARTICLE VII

DEFAULTS

33

            7.1

Representation or Warranty

33

            7.2

Nonpayment

33

            7.3

Certain Covenant Breaches

33

            7.4

Other Breaches

33

            7.5

Cross of Default

33

            7.6

Voluntary Bankruptcy, etc.

34

            7.7

Involuntary Bankruptcy, etc.

34

            7.8

Seizure of Property, etc.

34

            7.9

Judgments

34

            7.10

ERISA

34

            7.11

Unenforceability of Loan Documents

35

            7.12

Change in Control

35

ARTICLE VII

ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

35

            8.1

Acceleration

35

            8.2

Amendments

35

            8.3

Preservation of Rights

36

ARTICLE IX

GENERAL PROVISIONS

36

            9.1

Survival of Representations

36

            9.2

Governmental Regulation

36

            9.3

Headings

36

            9.4

Entire Agreement

36

            9.5

Several Obligations; Benefits of this Agreement

37

            9.6

Expenses; Indemnification

37

            9.7

Numbers of Documents

37

            9.8

Disclosure

37

            9.9

Severability of Provisions

38

            9.10

Nonliability of Lenders

38

            9.11

Confidentiality

38

            9.12

Nonreliance

38

ARTICLE X

THE AGENT

39

            10.1

Appointment; Nature of Relationship

39

            10.2

Powers

39

            10.3

General Immunity

39

            10.4

No Responsibility for Loans, Recitals, etc.

39

            10.5

Action on Instructions of Lenders

40

            10.6

Employment of Agents and Counsel

40

            10.7

Reliance on Documents; Counsel

40

            10.8

Agent's Reimbursement and Indemnification

40

            10.9

Notice of Default

41

            10.10

Rights as a Lender

41

            10.11

Lender Credit Decision

41

            10.12

Successor Agent

41

            10.13

Agent's Fee

42

            10.14

Delegation to Affiliates

42

ARTICLE XI

SETOFF; RATABLE PAYMENTS

42

            11.1

Setoff

42

            11.2

Ratable Payments

43

ARTICLE XII

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIOS

43

            12.1

Successors and Assigns

43

            12.2

Participations

43

            12.2.1

Permitted Participants; Effects

43

            12.2.2

Voting Rights

44

            12.2.3

Benefit of Setoff

44

            12.3

Assignments

44

            12.3.1

Permitted Assignments

44

            12.3.2

Effect; Effective Date

44

            12.4

Dissemination of Information

45

            12.5

Grant of Funding Option to SPC

45

            12.6

Tax Treatment

46

ARTICLE XIII

NOTICES

46

ARTICLE XIV

COUNTERPARTS

46

ARTICLE XV

CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

47

            15.1

CHOICE OF LAW

47

            15.2

CONSENT TO JURISDICTION

47

            15.3

WAIVER OF JURY TRIAL

47

SCHEDULES

SCHEDULE 1 PRICING SCHEDULE

SCHEDULE 2 COMMITMENTS AND PRO RATA SHARES

SCHEDULE 3 TRUST PREFERRED SECURITIES

SCHEDULE 4 SIGNIFICANT SUBSIDIARIES

SCHEDULE 5 LIENS

SCHEDULE 6 NONRECOURSE INDEBTEDNESS

                                                                    EXHIBITS

EXHIBIT A COMPLIANCE CERTIFICATE

EXHIBIT B ASSIGNMENT AGREEMENT

EXHIBIT C NOTE

EXHIBIT D FORM OF LEGAL OPINIONS